CSE: Amendments in CGC within the framework of EU harmonization

The CSE will proceed with significant amendments of the Corporate Governance Code in an effort to improve its provisions and harmonize them with those of the European Union and other foreign developed markets.

The new amendments, which change significant aspects in the way of operation and action of the listed companies, will be valid from September 30, 2009. However, for the smooth adjustment of the listed companies to the new data of the Corporate Governance Code, the CSE gave a period of transition until April 2011 for the Corporate Governance reports for 2010.

The amendments that will be effective from January 1, 2010 concern the provisions for the independence of the Board members, for the further transparency of their remunerations, as well as the expansion of the role of the Audit Committee for the inspection of the risk management systems.

See below the significant CGC amendments:

All CGC amendments are available at the CSE website, www.cse.com.cy.

Based on the amendments that will be effective from January 1, 2010, the following will be adopted:

- In case that the listed company adopts the CGC provisions, it will be regarded as that the Code is adopted to all the Group of companies to which the companies belong, that is, the subsidiaries too. In case that the subsidiaries of the listed companies have the same Committees mentioned in the CSE CGC, that is, Nominations Committee, Remunerations Committee and Audit Committee, the subsidiaries must adopt the CSE CGC provisions.

- In case of appointments or resignations of Board members, an announcement must be released to the CSE. In addition, if the resignations/appointments affect the composition of the CGC Committees, an additional announcement on the issue must be released too (it is noted that this provision will be effective from September 30, 2009).

- For the companies that are listed either in the CSE Main Market or in the Big Projects Market and the Shipping Market, at least 50% of the Board of Directors (excluding the Chairman) must comprise of independent Non-Executive Board members. If the criterion of 50% is not fulfilled, a minimum 1/3 of the Board of Directors must be independent non-executive Board members and the companies must give the relevant explanation to the second part of the report, for the number of Board members that are not independent non-executive and who exceed 50% and submit the relevant application for the safeguard of a period of time of compliance to the CSE Council. The CSE Council may approve the applications for each one of the companies separately no later than 12 months.

- Each independent non-executive Board member:

- Must have no other relation with the company, which might affect his/her independent and impartial view and must not supply goods and services that affect his/her independent and impartial view

- Also, the Board members will not be regarded as independent if they or their husbands/wives, or underage children or parents or the companies in which they hold more than 20% of their share capital have loans or guarantees that exceed €500,000.

- Must not be a Board member for more than 9 years, consecutive or not.

- Must introduce a Remunerations Committee in order to express views to the Board of Directors on the proposals for the appointment of new Board members. The majority of the members of the Committee must be non-executive Board members and its Chairman might be either the Chairman of the Board of Directors (in case he/she is non-executive) or a non-executive Board member. The Chairman and the members of the Nominations’ Committee must be announced in the Annual Report.

- The total remunerations must be analyzed between remunerations for services as Board members and remunerations for executive services. The remunerations of the Board members must be analyzed by name for each one of the Board members separately and must include information for the stable income, such as salary and variable income such as bonus, shares, share options etc, so as to achieve full transparency in relation to the remunerations and benefits of all Board members.

- the duties of the Audit Committee must include the company’s internal financial controls. Also, they must include the company’s internal control and the risk management systems, unless they are supervised either by separate Risk Management Committee composed of independent Board members or by the Board of Directors of the company.