business conduct guidelines

CONFLICT OF INTEREST and BUSINESS CONDUCT GUIDELINES

CONFLICT OF INTEREST, February 22, 2011 Legal PAGE 1 OF 8

Introduction

The following Conflict of Interest, Business Conduct and IT Guidelines (the

“Guidelines”) are issued pursuant to the Corporate Governance Framework adopted by

the General Assembly of the Saudi Arabian Mining Company (“Ma’aden”) and its

subsidiaries and Affiliates and are intended to set forth general guiding principles and

procedures to be followed by all Company’s personnel at all levels, in all Company

branches and affiliates and some representatives in their dealings with each other, and

with others entities including shareholders, suppliers, customers and competitors, as

well as persons or business concerns which are affected by any of the operations or

activities of Ma’aden.

In order to ensure ongoing compliance with these Guidelines, all Directors, officers,

employees and representatives of Ma’aden may be asked to execute a certificate and/or

complete a survey and related set of questions on a regular basis. Likewise, Ma’aden

requires its contractors, sub-contractors, consultants, suppliers and customers to strictly

observe these guidelines which will be incorporated in all contracts and dealings with

Ma’aden.

Since these Guidelines are based on the laws of the Kingdom of Saudi Arabia; including

(but not limited to) the Capital Market Law and regulations; which may change from

time to time, any changes are implied to form part of these Guidelines. The examples

provided are intended to be illustrative only and should not be considered to represent

an all-inclusive or exhausted list. We encourage Directors, officers and employees to

contact the Chief Legal Counsel of Ma’aden if they have any questions in terms of

situations that might not be covered by these Guidelines.

In summary it is Ma’aden’s intention to operate within the bounds of local laws and

best international practices in all sites Ma’aden operate in. Where there is any

uncertainty, Ma’aden expects from its Directors and employees to behave and act to

the highest legal and ethical standards.

These Guidelines are intended to reflect and uphold the high standard of care, integrity

and ethical values of conduct which Ma’aden expects of all of its Directors, employees

and certain other related parties. These Guidelines must be read in conjunction with

and, as applicable, supplimented by other manuals and relevant policies or guidelines



issued by the Company.

These Guidelines contain three parts: Part (A) Conflict of Interest Guidelines, Part (B)

Guidelines on Business Conduct and Part (C) Information Technolgy (IT) Guidelines.

Part (A) – Conflict of Interest Guidelines

For purposes hereof, the term "conflict of interest" shall mean any circumstance in which

someone in a position of trust or decision-making has a competing interest (either

direct or indirect) that might influence that individual's ability to perform his duties

and fulfil his responsibilities objectively, fully and faithfully; and shall include any

circumstances of an actual or potential conflict or impropriety, even if there is no

evidence of improper actions.

Ma’aden's basic guideline on conflicts of interest is that, although Directors and employees

are entitled to privacy in their personal affairs, every employee has a duty to be free of

those outside interests, activities and influences which might cause any of the following:

(a) Impair the exercise of that persons' independent judgment, fiduciary

responsibility, initiative, or efficiency in acting for or on behalf of

Ma’aden; or

(b) Expose that person or Ma’aden to investigations, legal liability or public

criticism; or

(c) Harm, damage or jeopardize any of Ma’aden operations or activities, or

affect its reputation.

The following are examples of the types of situations which indicate conflicts of

interest, or the appearance of conflicts of interest, which Directors, officers and

employees of Ma’aden should avoid unless prior written approval is obtained from

the President and Chief Executive Officer of Ma’aden:

1. Business Relationship or Involvement with Suppliers and Certain other

Parties: Involvement of a director, officer or employee, or any member of his

immediate family (wife(s) and/or children) with a supplier, contractor, customer,



competitor, joint venture partner, service provider or other business entity dealing

with Ma’aden such as:

a. Acquistion of a significant interest in any supplier, contractor, customer

or other business entity that deals with Ma’aden. A “significant”

interest normally would be one which (i) exceeds 10% of the employee's

total investment in securities, excluding holdings in any of Ma’aden’s

securities; (ii) exceeds SR 500,000 (or the equivalent in any other

currency); or (iii) represents more than 1% of the outstanding securities

of the same class of securities of any such entity acquired.

b. Holding a partnership interest or having a profit-sharing or incentive

arrangement, creditor-debtor relationship or similar economic or

financial involvement with any such supplier, contractor, customer or

other business entity dealing with Ma’aden; or

c. Serving in any capacity (such as an agent, representative, consultant,

director, officer or employee) for or on behalf of a supplier, contractor,

customer or other business entity dealing with Ma’aden; or

d. Acceptance of a loan, advance, or other benefit from a supplier,

contractor, customer or other business entity dealing with Ma’aden,

other than loans or advances from recognized banks or other lending

institutions according to available commerical standards.; or

e. Acceptance or receipt of any gift of more than SR500.00 from, or

accepting lavish entertainment offers provided or arranged by, any

supplier, contractor, customer or other business entity dealing with

Ma’aden

2. Utilizing Confidential Information or Protected Property Rights in Trading of

Ma’aden’s Securities: Employees are free to invest in Ma’aden’s securities.

Employees or employees’ immediate family members, however, should avoid any

activities which involves or suggests the personal use or misuse, or the disclosure to

others, of confidential or proprietary information, concerning or relating to

Ma’aden; Employees are further advised that the CMA Law and Capital Market



Regulations are fully endorsed by and complied with Ma’aden. Any employee or

immediate family memeber trading in Ma’aden securities should become aware of

the implications of these law as it may applies to them. All employees are further

advised to become aware of the law and CMA regulations or any changes from time

to time that pertains to insider trading. Article (50) of the Capital Market Law

provides for the following: “a) Any person who obtains, through family, business or contractual relationship, inside information (hereinafter an “insider”) is prohibited from directly or indirectly trading in the Security related to such information, or to disclose such information to another person with the expectation that such person will trade in such Security.”

“Insider information means information obtained by the insider and which is not available to the general public, has not been disclosed, and such information is of the type that a normal person would realize that in view of the nature and content of this information, its release and availability would have a material effect on the price or value of a Security related to such information, and the insider knows that such information is not generally available and that, if it were available, it would have a material effect on the price or value of such Security.”

“b) No person may purchase or sell a Security based on information obtained from an insider while knowing that such person, by disclosing such insider information related to the Security, has violated paragraph (a) of this Article.”

3. Personal Use of Ma’aden Information and Business Opportunities: Employees or

employees’ immediate family members should not use the employee's position with

Ma’aden for any personal gain or for the benefit of any outside party.

4. Gifts: An employee should avoid the acceptance by himself or by any member of his

immediate family of any gift or other favour such as entertainment, receiving services

for less than real value or other types of special treatment extended because of the

employee’s position in Ma’aden. These gifts shall not include normal discounts or

special treatment for all Maaden employees, such as hotel, air tickets and car rental

discounts.

If these gifts, favors or offers may be interpreted by others that it may influence his



decision or action regarding Ma’aden business; or receiving these gifts or favors may be

interpreted by others to harm the employee or Ma’aden. However, this does not include

gifts provided officially by suppliers to Ma’aden as part of their advertisement

campaigns.

5. Joining Public Associations and Organizations, and Other Commercial Entities:

Employees who are asked by Ma’aden to serve in any organization or estblishment as a

representative for Ma’aden should not accept compensation of any kind from that

organization or estblishment and in the event an employee receives any form of

compensation from such an organization or authority such compensation should be

disclosed to Ma’aden and, upon request, paid over to Ma’aden.

The duty to remain free of conflicts of interest is a continuing obligation of

Ma’aden’s employees. It must be recognized that interests or relationships which

were unquestionably free of any source of potential conflict at one time may

become source of potential conflict as a result of changes in the operations or

interests of Ma’aden or as a result of changes completely independent of Ma’aden.

Part B - Guidelines On Business Conduct

The basic principles in these Guidelines are to guide dealings by Ma’aden with all our

constituencies; particularly our customers, suppliers and the communities.

Employees are assured that continued strict observance of these standards, even at the

risk of adverse business consequences, will be supported by the senior management of

Ma’aden. Deviation from them, on the other hand, will be grounds for appropriate

disciplinary or other action, which action may include termination of employment and

referral of such conduct to the concerned authorities.

If the following Guidelines do not cover a particular situation, such as where the

application of a local law or regulation is difficult to interpret, or a circumstance where the

proper course of ethical conduct is unclear, advice should be obtained from the Chief Legal

Counsel of Ma’aden.



1. General Policy of Adherence to Ethical Standards:Employees and representatives

of Ma’aden ought to act in accordance with the highest standards of fairness,

integrity and equity.

2. General Policy of Adherence to Law: Employees of Ma’aden ought to act in

accordance with the applicable Saudi Rules and Regulations and the laws of other

jurisdictions in which Ma’aden conducts business, including, but not limited to, all

applicable security and business laws. It is recognized that employees may be

subjected to engage in unlawful conduct, however the interests of Ma’aden will be

served best in the long run if such pressures are resisted.

While illegal conduct may take many forms, one type is worthy of special mention,

which is; unlawful, improper or facilitating payments.

Ma’aden’ s Employee must not offer or promise to give gifts, money; or conducting

illegal or inappropriate actions such as bribery, payoff, payments refund in order to

accomplish one of the aforementioned purposes.

3. Selection of Suppliers, Consultants and Other Third Parties: Employees are also

required to use special care in selecting suppliers, consultants and other third

parties since the actions of such persons in violation of these Guidelines can cause

embarrassment and bring about legal liabilities to Ma’aden and its employees.

4. Entertainment, Gifts and Social Amenities: It is impermissible to offer or give gifts

of substantial value, or offer lavish and extravagant entertainment (SAR 1,000.00

and more) to any any public or private individuals, including officials, employees

and representatives, governments and their branches and agencies, private

corporations and non-governmental or any other types of organizations doing

business with Ma’aden. An exception to the above is when gifts of high value are

given by Maaden to high-ranking Government and other officials during a ceremony

or similar event.

5. Proper Accounting: Ma’aden's books, records and accounts are to reflect accurately

and fairly, in reasonable detail, all transactions and acquisitions and dispositions of

assets in accordance with the highest standards of integrity and applicable generally



accepted accounting principles in the Kingdom. No person shall directly or indirectly

falsify, or cause to be falsified, any of Ma’aden's books, records or accounts.

6. Third Country Payments: Customers and distributors may sometimes request that

their regular commissions or service fees be remitted to third persons or bank accounts

in third countries. Such payments will continue to be made only under the following

conditions: (i) the amount payable does not arise from artificial additions to normal

selling prices; (ii) payment is authorized in writing by Ma’aden and the person earning

the commission or fee; (iii) payment is made to the same entity to which it is owed or

to an Affiliate under common ownership; and (iv) payment will not cause Ma’aden to

violate applicable law.

7. Investigation of Violations: All reported or discovered violations of the combined

Guidelines will promptly be investigated by Ma’aden and will be treated confidentially

to the extent consistent with Ma’aden’s interests and its legal obligations.

If the result of the investigation indicates that corrective action is required, Ma’aden

executive will in its discretion decide what steps it should take to rectify the problem

and avoid the likelihood of recurrence, including summarily termination of services of

the wrongdoer and takes appropriate legal procedures.

If one of Ma’aden personnel seek clarification or has enquiry in relation to this

Guidelines, currently or in the future, he should contact Chief Legal Counsel of

Ma’aden.

Part (C): IT Guidelines

1) Employees of Ma’aden acknowledge that all pc's, lap-tops, communications media and

storage media provided to them are the property of Ma’aden and supplied to them to

use solely for Ma’aden's business. Therefore Ma’aden may, with President & CEO

approval, require access and perform any necessary actions on these equipment. In

order to preserve your privacy, you are advised and required to remove all your personal

items from the company's equipment and store them in your personal pc's and lap-tops.

Likewise you are advised and requested to keep your personal pc's and lap-tops away

from the company's offices and premises, since they will be treated the same as Ma’aden



own equipments, to avoid inadvertent logging-in by the company. Same access right is

reserved for Ma’aden offices for all papers, documents, files, and similar Medias.

2) In the course of business an employee may come to know or discover situations and

incidents where some staff of Ma’aden, or Ma’aden’s contractors and consultants makes

contacts with third party companies and firms with the intention of helping such

companies and firms to gain business with Ma’aden, or leaks information that is

considered confidential to Ma’aden. A reverse situation may also happen, where third

party companies and firms make contacts with the staff of our consultants and

contractors, or even Ma’aden employees, for the same intention.

Such behavior is detrimental to Ma’aden’s business and image. Therefore employees

must report such authentic incidents immediately to Manager of the Internal Audit who

will in turn relay the matter to the company's Upper Management for the proper action

to be taken.

3) All employees recognize that Ma’aden has formed and is forming new companies and

affiliates, to which some of the employees in the Corporate have been or will be

transferred .Hence these guidelines and any amendment or update thereto remain

binding on the transferred employees in the new companies , unless superseded by

similar guidelines developed by those new companies and affiliate.

business conduct guidelines

Documents