2011 Annual Report - Khaleeji Commercial Bank BSC

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KHALEEJI COMMERCIAL BANK BSC RISK MANAGEMENT DISCLOSURES 8. Product Disclosures (continued) 8.4 Restricted Investment Accounts (RIA’s) (continued) RIA name Details launch Projected Return Return annualized (%) date returns frequency 2011 2010 2009 2008 2007 RIA 5 - A restricted investment 2008 90.66% Bullet - - - - - North Gate product which owns a over return 6.0% stake in Shaden Real product at maturity Estate Investment WLL tenor which in turn (through its subsidiaries), holds a parcel of reclaimed land measuring approximately 3.875 million Sq. Meters (located in Al-Hidd, Muharraq). The mixed-use plot will be sold to end users subsequent to the completion of infrastructure works. RIA 6 - A Restricted 2009 110.54% Bullet - - - - - Locata Mudaraba product which over return at entitles the investors product maturity beneficial ownership of 25% tenor equity share capital of Locata Corporation Pty Ltd., a company incorporated in Australia. The Company has invented a new and patented wireless radiolocation technology and shall use this funding to scale up its production capacity, sales / marketing channels and further product enhancement capabilities. 104 Annual Report 2011
KHALEEJI COMMERCIAL BANK BSC RISK MANAGEMENT DISCLOSURES 9. Corporate Governance & Other Disclosures 9.1 Corporate governance structure The Bank is governed by the Commercial Companies Law No. 21 of 2001 (the “Companies Law”), the Kingdom of Bahrain Corporate Governance Code (the “CGC”), volume 2 of the Rulebook of the CBB (and in particular the High-Level Controls (“HC Module”)), and the Bahrain Stock Exchange Law of 1987 (collectively, the “Regulations”). The Bank acknowledges its responsibility to all of its stakeholders and is committed to the highest standards of corporate governance. The Bank believes good corporate governance enhances stakeholder value and provides an appropriate guidance to the Board, its committees, and the Bank’s executive management to carry out their duties in the best interest of the Bank and its stakeholders. The Bank maintains the highest levels of transparency, accountability and good management through the adoption and monitoring of corporate strategies, goals and policies to comply with its regulatory and ethical responsibilities. In 2011, the Bank has adopted the CGC which is effective from January 2011. The Bank has also aligned its corporate governance policies with the HC Module of the CBB Rulebook which was introduced in October 2010 (built on the provisions of the CGC). 9.2 Board of directors As at 31 December 2011, the Board of the Bank comprised ten members. Members of the Board are elected for a three year renewable term. The current composition of the Board complies with the requirements of the Regulations. The Board Nominations, Remunerations and Governance Committee (“BNRGC”) reviews the skills and qualifications required of directors on periodic basis for potential nominee director. A nominee director may be elected by the Board upon receiving majority of votes during the election process. Positions at the Board are filled in compliance with the Bank’s Articles of Association and the Commercial Companies Law. A Director’s membership to the Board shall terminate in the event that, amongst other things, the Director is convicted of an offence of dishonor or breach of trust or is declared bankrupt. The Chairman of the Board of Directors is charged with regular supervision and assessment of executive management and is responsible for leading the Board, ensuring its effectiveness, monitoring the performance of the CEO and maintaining a dialogue with the Bank’s stakeholders. The Board has constituted certain committees with specific delegated authorities to oversee and guide the management in specific areas of the Bank’s operations and decision-making. The Board, either directly or through its various committees, will oversee the management of the Bank. The Board has formalized the division of work responsibilities between the Board and the Bank’s management. Working in consultation with the Bank’s management team, the Board provides oversight for the overall management of the Bank’s business. The Board reviews and approves the corporate strategy for the Bank and has overall responsibility for risk management, financial reporting and corporate governance issues. Matters that specifically require Board approval include, amongst other things, the financial statements and the acquisition and disposal of companies. The Board also ensures that the Bank upholds the Bank’s core values including the values set out in the Bank’s internal policies. The Board Risk Management Committee (“BRMC”) ensures that all policies prescribed are reviewed and updated on annual basis. . The Risk management department in conjunction with the Internal Control unit ensures the policies and procedures are updated and adhered to under the oversight of the related management committees. The Board is also responsible for approving any related party transaction as per the Bank’s authority matrix. Related party transactions concerning a Board member should be minimally approved by the Board Investment and Credit Committee (“BICC”). In addition, any material transaction defined by the Bank (10% of the Banks’ capital) should be approved by the Board. The preparation of the consolidated financial statements of the Bank is the responsibility of the Board of Directors. The duties, functions, and responsibilities are detailed in the Bank’s Corporate Governance Framework. Members of the Board have access to the Bank’s management at all times. The CEO together with the Bank’s senior management monitors the Bank’s performance against pre-set corporate objectives and manages the Bank’s day-to-day affairs based upon the policies, objectives, strategies and guidelines lay down and approved by the Board from time to time. Risk Management Disclosures 105
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2011 Annual Report - Khaleeji Commercial Bank BSC

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