Statute of the New Towns Construction Company (Specialized Holding Company)

Chapter One- Generalities and capital

Article 1- The New Towns Construction Company (Specialized Holding Company) which will be referred to as “Company” in this statute, is a governmental company which is following the Housing and Urban Development Ministry and the center of this company is in Tehran and also has affiliated companies (subset) and according to the existing case or if necessary, by having the approval of the General Assembly and also passing the legal processes can constitute company or affiliated companies (subset) in order to establish new Towns in the country and also can do this job by creation of branches or agency according to the relevant provisions.

Article 2- The Company has legal character and financial independence and is governed according to this statute.

Article 3- The purpose of company establishment is management and organization of stateincumbent activities in the following fields:

A. reviewing potential needs and demands and also feasibility studies for the proportional distribution of population and employment throughout the country and the population overflow of metropolitan cities of the country at the points of interest based on national, zonal and regional somatic plans in order to prevent the unbridled development of large cities and also the optimal use of water, soil and energy resources.

B. Completion and correction of the network of population centers and the management of the creation of planned population areas and prevention of living in margin areas of metropolitan cities, as well as preventing the destruction of agricultural land around the mentioned cities and the provision of needed basis for reducing environmental pollution.

C. Assist in the quantitative and qualitative implementation of housing development plans and creation of a balance in the housing market and provide a suitable basis in order to restore the values of urbanism and Iranian-Islamic architecture.

D. A comprehensive planning of controlling, monitoring and following up of the government’s sovereignty duties in order to create new Towns, towns and city gardens outside the legal frontage and limits of the cities of the country and also provision of infrastructure and substructure within the framework of the policies of the Ministry of Housing and Urban Development and also the enactments of Supreme Council of Urban Planning and Architecture of Iran and attracting investment of private, cooperative and nongovernmental sections in order to achieve the above objectives, as well as guidance, support and monitoring of the construction of the aforementioned sections in the new Towns, towns and city gardens.

Article 4- The subject of the activities and duties of the company are:

1. Organization, guidance and also the management of creation of towns or new Towns in the country with due attention to national, zonal and regional studies and somatic plans which are approved or will be approved by the Supreme Council of Urban Development and Architecture of Iran.

Note 1- In accordance with article 1 of the law of creation of the new Towns, the purpose of the new city in this statute is populated areas which are being foregone for the habitation of population with more than 30000 members in addition of needed public buildings, facilities, services and also appropriate economic conditions for its inhabitants in the framework of approved plan of the Supreme Council of Urban Development and Architecture of Iran beyond the frontage and bounds of the cities (whichever is the bigger).

Note 2- The purpose of the town in this statute is residential or non-residential towns with special functions such as touristic, recreational, seasonal, pilgrimage, etc. revenues (excluding industrial towns) outside the frontage and bounds of cities which the Ministry of Housing and Urban Development has the duty of their creation and establishment (by governmental or nongovernmental section) and also monitoring the observance of rules and regulations of urbanization and architecture of the country according to article 7 of the law of the renaming of the Ministry of Development and Housing to the Ministry of Housing and Urban Development and determining its duties, the regulations of the use of land and the establishment of constructions and facilities beyond the frontage and bounds of the cities and regulations of special manner of reviewing and approval of local, zonal, regional and national construction and development plans and regulations of urbanization and architecture of the country which was passed in 1947.

2. Studying and reviewing of approved national, zonal and national somatic plans, as well as suggesting new areas for being populated to the High Council for Urban Development and Architecture of Iran in accordance with Article 6 of the law of organization and support of the production and supply of housing, with economic justification.

3. Issuance of authorization of the new city or town or city garden construction in accordance with the acts of the Supreme Council of Urban Development and Architecture of Iran.

4. Management of preparation of comprehensive and detailed plans for new Towns and maps of separated lands and their subsequent changes, and also the plans of the implementation of towns and city gardens, which are provided through dependent towns (subset) or private or cooperative sections, within the framework of the law of creation of the new Towns and regulations and guidelines of the creation and construction of a new city and town according to the existing case.

5. Management and supervision of the preparation and establishment of construction, installation and urban, service, production and commercial facilities, which are carried out through affiliated companies (subsets).

6. Management and supervision of exploitation and management of created facilities in each of the new Towns or towns which are established through affiliated companies (subsets), as the case may be, until the incumbency of the relevant organizations or delivery of them to the organization of town owners.

7. Being included in different types of partnership with real and legal persons, including domestic and foreign, governmental and nongovernmental ones, and have loans from credit and monetary institutions and the banking system, in compliance with related laws and regulations and through affiliated companies (subsets).

8. Bargain for the use of consulting services of institutions and domestic and foreign companies in accordance with relevant laws and regulations.

9. Issuance of authorizations and enforce the criterions and standards for the construction and creation of the facilities in each of the new Towns or towns according to the relevant laws and regulations.

10. Preservation of the rights and implementation of ownership actions which are related to the lands that are owned by the government in each of the new Towns or their frontages and towns through affiliated companies (subsets).

11. Supervision and control over the preservation and protection of lands and establishments, sale and transfer of real estate and residential, commercial and production units (industrial, workshops, service, etc.) in the framework of the relevant rules and regulations and through affiliated companies (subsets).

12. Supervising the performance of affiliated companies (subsets) and also the applicants for the construction of a new city or town, and controlling and directing them for the proper implementation of comprehensive and detailed plans other related executive plans and also accomplishment of assigned tasks.

13. Provision of the needed basis and facilities for attracting non-governmental applicants in order to create or contribute to the creation of new Towns and towns, in accordance with relevant laws and regulations.

14. Manage to equip domestic and foreign resources to invest in the projects of new Towns or towns, such as issuing partnership papers, guaranteeing or obtaining facilities for the implementation of infrastructure facilities, etc., in the framework of related laws and regulations.

15. Provision of support, professional and technical services to affiliated companies (subsets).

16. Carrying out other relevant referrals or assignments which are on behalf of the Minister of Housing and Urban Development that are related to the activities of the specialized holding company and this statute and other relevant laws and regulations.

Article 5- The capital of the company is one hundred and eighteen billion and five hundred and eighty three million (118,583,000,000) Rials, which is divided into (118,583) shares with 1 million Rials worth and is completely owned by the government and is provided to the company from the nominal value of the state owned lands.

Chapter Two- The pillars of the company

Article 6- The pillars of the company are as follows:

A. General Assembly

B. Board of directors and CEO

C. Inspector (auditor)

A. General Assembly

Article 7- The Ministers of Housing and Urban Development, Economic Affairs and Assets, Mines and also President’s strategic planning and monitoring assistant are the representatives of governmental equities in the General Assembly. The General Assembly is chaired by the Minister of Housing and Urban Development and the meetings of Ordinary and Extraordinary General Assembly will have formality by participation of three members and the decisions are valid with two consensus votes.

Article 8- The Ordinary General Assembly shall have meetings at least twice a year, at the written invitation of the chairman of the General Assembly or the chairman of the board of directors or CEO in order to approve the company’s financial statements, the plans and also budget of the company for next year, as well as checking other mentioned cases in the agenda. The Ordinary General Assembly may be formed if necessary in extraordinary format. The agenda of the meetings must be sent to members of the Ordinary General Assembly at least fifteen days before the meeting.

Article 9- The Extraordinary General Assembly and the General Assembly shall be convened as a matter of urgency upon the request of any member of the General Assembly, the chairman of the board of directors, the CEO or the inspector and at the invitation of the chairman of the General Assembly, the chairman of the board of directors or the CEO and with the presence of the chairman of the General Assembly.

Article 10- The duties and powers of the Ordinary General Assembly are as follows:

1. Determining and approval of the general policy and goals and also the plans of company.

2. Investigate and check the report and performance of the board of directors and also the report of the inspector (auditor) and make a decision on the company’s financial statements and combined financial statements of the company and also the division of special profits of the company in accordance with relevant laws and regulations.

3. Approval of annual budget of the company and its changes in accordance with the relevant laws and regulations.

4. Approval of the transfer of credit and income between affiliated companies (subsets) to help affiliated companies (subsets) which have incurred a loss and also financing the company on the suggestion of the board of directors.

5. Approval of the structure of company and establishment of affiliated companies (subsets) on the proposal of the board of directors in accordance with relevant laws and regulations.

6. Approval of branch or representation establishment in required zones.

7. Making decision on financial, trading, employment and other regulations of the company as well as its changes, and submit a proposal to the Cabinet of Ministers in order to be approved.

8. Selection members of the board of directors on the proposal of the Minister of Housing and Urban Development.

9. Selection of the inspector (auditor) of the company according to the law of the use of professional and specialized services of qualified accountants as the official accountant which was approved in 1993 and also determining his fees in accordance with relevant laws and regulations.

10. Determination of the salaries and fringe benefits of the members of the board of directors to the extent that the salary and benefits council determines and also determination of their rewards in accordance with relevant laws and regulations.

11. Selection of wide-published newspaper in order to publish the notices of company.

12. Approval of the suggestion of the board of directors which is related to the cession of liquidation, merging and reorganization of affiliated companies (subsets) and submit proposal to the relevant authorities in order to pass the legal processes.

13. Approval and communication of the specified terms of investment of affiliated companies (subsets) in accordance with the relevant laws and regulations.

14. Making decision on suggestions which are submitted by the chairman of the General Assembly or the board of directors in accordance with the relevant laws and regulations which are related to the company.

15. Approval of different types of partnership with real and legal persons including domestic and foreign, governmental and nongovernmental ones, equipping domestic and foreign resources in order to invest in the projects of new cities, as well as the issuance of partnership papers and also guaranteeing the availability of facilities from monetary and banking institutions in accordance with the relevant rules and regulations.

Article 11- The duties and powers of the Extraordinary General Assembly are as follows:

1. Consideration and confirmation of the proposal for making changes to the articles of association in order to be approved by the Cabinet of Ministers.

2. Making a decision on increasing and decreasing the company’s capital and submit the proposal to the Cabinet of Ministers in order to be approved.

3. Consideration and confirmation the suggestion of liquidation of the company for approval by the Cabinet of Ministers and also determination of the refining managers.

Note- The decisions of the Extraordinary General Assembly are valid with two consensus votes that imply the vote of the Minister of Housing and Urban Development.

Article 12- The board of directors of the company consists of five main members, the chairman of the board of directors and the CEO will have the position of the Deputy Minister of Housing and Urban Development. The CEO and also members of the board of directors are elected and appointed for three years by the suggestion of the chairman of General Assembly and also the approval of the mentioned assembly and will remain in their position until the next election and their re-election is allowed. In the case of retirement, resignation, deposal, death or any other reason that make the work continuation of any of the members of the board of directors impossible, the successor of them shall be determined according to the mentioned order.

Dismissal of each of the members of the board of directors of the company is one of the powers of the General Assembly.

Note- The members of the board of directors of the specialized holding company are the trustees of the New Cities Construction Company at the General Assembly of the affiliated companies (subsets) and the chairman of the board of directors of the specialized holding company is the chairman of the General Assembly of affiliated companies (subsets).

Article 13. Incumbency of any other position, whether it is bound or not, is prohibited in other specialized holding companies and also the affiliated companies (subsets) by the members of the board of directors and the CEO of the company and also the affiliated companies (subsets).

Article 14- The board of directors has needed authorities of the execution of duties which are within the scope of the activities of the company except making decisions on which are in the special jurisdiction of the General Assembly. Among the duties that are mentioned above are as follows:

1. Preparation and submission of proposal of the company’s structure plan in order to be approved by the General Assembly in accordance with the relevant laws and regulations.

2. Preparation and of financial, trading, employment, welfare and other regulations of the company for making decision by the General Assembly.

3. Submission of proposal for compromising claims or referring them to the arbitration and determination of arbitration with the peace and agreement right or without it and the reclamation of claims in to be approved by the General Assembly (in accordance with the rule of one hundred and thirty-ninth article of the constitution of the Republic Islamic of Iran)

4. Determining the salary and fringe benefits of the CEO in the framework of relevant laws and regulations if he is not a member of the board of directors.

5. Provision of the report of annual performance, financial statements and compound financial statements of the company in order to be approved by the General Assembly that should be submitted to the inspector (auditor) and also the members of the General Assembly within the deadline.

6. Provision of the report of annual budget of the company by exerting of the percentage of the transfer of credit and income of affiliated companies (subsets) and also the required percentage to finance the specialized holding company in order to be approved by the General Assembly.

7. Provision and communication of the instructions and executive procedures in accordance with the relevant laws and regulations.

8. Consideration and making decision on how to receive or pay credit facilities in accordance with applicable laws and regulations and also approved budget after approval by the General Assembly.

9. Making decision on whether or not to purchase any equipment and belongings that are necessary for the execution of the duties, as well as the exchange of belongings, lands and also the buildings which belong to the company in order to meet the needs of the company within the framework of the approved budget in accordance with relevant laws and regulations.

10. Purchasing and taking possession of lands and properties which are required by the new cities or towns in accordance with relevant laws and regulations and the using methods of swaps or partnerships with owners.

11. Making decision on how to perform undertaken commitments in accordance with the obligations of the company or affiliated companies (subsets) using different swap and trading methods in accordance with relevant laws and regulations.

12. Making decision on the granting of discounts on the cession of land and buildings in essential and exceptional cases within the framework of relevant laws and regulations.

13. Approval of price of the land which is purchased by the company.

14. Submission of the proposal of the CEO to the General Assembly.

15. Submission of the proposal of specific criterions of investment by affiliated company (subset) to the General Assembly in order to be approved in accordance with relevant laws and regulations.

16. Making decision on any kind of partnership and investment and also guaranteeing affiliated companies in order to obtain loans and facilities based on the framework of the general policy that are approved by the General Assembly.

17. Consideration of the credits and income of the affiliated companies (subsets), determination of the companies which incur loss and also submission the proposal of percentages that are necessary for the transfer of credits and income and financing the specialized holding company’s expenses to the General Assembly in order to be approved.

18. Provision of comprehensive plans for the new cities through affiliated companies (subsets) as well as presenting them to the Council of Architecture and Urban Development.

19. Provision and presentation of detailed plans of the new cities and executive plans of towns and city gardens as well as separated maps of the land in the new cities and towns and city gardens and their subsequent changes to competent authorities in order to be approved.

20. Making decision on whether to create new city or town or not by choosing who executes the contract.

21. Submission of proposals of issuing the participation papers or borrowing from credit and monetary institutions and also banking system in the framework of relevant laws and regulations to the General Assembly for approval.

22. Having a representative of the shareholder and also accomplishing the duties of the General Assembly of affiliated companies (subsets) including cases that are mentioned in the future articles.

23. Approval of policies and guidelines of affiliated companies (subsets) within the framework of the General Assembly resolutions.

24. Approval of the statute of affiliated companies (subsets) and amendments and submission of them to the competent authorities in order to be approved.

25. Deposal and appointment of members of the board of directors as well as appointment an inspector (auditor) of affiliated companies (subsets) in accordance with relevant laws and regulations.

26. Determination the salaries, frontage benefits and rewards of the members of the board of directors of affiliated companies (subsets) and also the fees of the inspector (auditor) in accordance with the relevant laws and regulations.

27. Considering and making decision on the performance report, financial statements and the annual budget of affiliated companies (subsets).

28. Submission of a proposal of merging or liquidation of one or more of the affiliated companies (subsets) to the General Assembly of the company.

29. Monitoring and controlling the performance of affiliated companies (subsets) and obtaining statistical reports, financial and accounting statements, and reviewing them in order to be confirmed or submitting proposals and making adjustments and also making necessary decisions.

30. Designing and providing of educational plans in order to enhance the capabilities of the managers of affiliated companies (subsets) within the framework of relevant laws and regulations.

31. Preparation of affiliated companies (subsets) which are ready for sale and suggest them to the General Assembly in order to be approved.

32. Correction of the structure, submission of the proposal of the least price of the sale in accordance with the relevant laws, submission of the proposal of the timetable of the sale of transferable companies, the provision and submission of complete financial information and other relevant information and documents and evidences that are related to the determination of the least price to the privatization organization by the approval of the General Assembly.

Article 15- The meetings of the board of directors will have a quorum by the attendance of the chairman and at least to members of the board of directors and the taken decisions will be valid with at least three agreeing votes, and the decisions shall be recorded by mentioning the opinion of minority in the special notebook and also the present members at the meeting should sign that.

Article 16- The chairman of the board of directors has the highest executive position and CEO of the company has highest administrative position of the company and these members of the company supervise all affiliated companies and are responsible for the good management of all affairs and also maintenance of the rights, profits, belongings and capital of the company and have all legal rights and freedoms in order to manage the affairs of the company and the implementation of the resolutions of the General Assembly and the board of directors and also they are the representatives of the company and government against all authorities, judicial and army positions and also all of the organizations, institutions, structures and foundations. They also have the right to appoint someone else as their attorney.

Article 17- The CEO of the company is the representative of the company within the limits of the powers that were conferred upon him by the board of directors and has the right to sign per pro the company.

Article 18- The most important duties of the CEO are as follows:

1. Implementation of the decisions and enactments of the board of directors and the General Assembly.

2. Preparing, regulating and submitting the proposal of the strategy, operating plan and annual budget of the company to the board of directors.

3. Preparation and adjustment of annual financial statements of the company and submission of them to the board of directors.

4. Determination of the implementing procedures in the framework of laws and regulations and communication of them to the relevant sections.

5. Provision and submission the proposal of the financial, trading and employment regulations of the company to the board of directors.

6. Provision and submission the proposal of the detailed structure of the company to the board of directors within the framework of the resolutions of the General Assembly.

7. Monitoring the implementation of the company’s regulations and taking the necessary measures in order to have a proper management on the affairs of the company within the framework of relevant laws and regulations.

8. Disposal, appointment and promotion of employees of the company, determination of salary and rewards, promotion and punishment of them according to relevant laws and regulations.

9. Applying financial, accounting and inspecting control on all parts of the company directly or by delegating authority to the members of the board of directors or the employees of company.

10. Management and monitoring of the consideration of the justification reports and the preliminary plan of the city garden or town construction as well as the issuance of license of town or city garden construction or the permit of their exploitation and other affairs which are related to the towns in the framework of the regulations and related instructions.

11. Monitoring and preventing violations in the construction of new cities or towns or city gardens and pursuing violators through competent authorities.

12. Signing and issuing permit for the construction of a new city or town.

13. Carrying out any other duties which are assigned or will be assigned to the CEO in accordance with the relevant laws and regulations.

Note 1- The CEO can delegate part of his duties and powers to each of the employees of the company.

Note 2- In the case of expiring the manager’s term of management, his actions will be valid until the appointment of the new CEO and will have executive power.

Article 19- Opening an account in banks, all of the cheques, documents, financial papers, contracts and binding documents of the company shall be signed by one of the members of the board of directors (by the choice of the board of directors) and the chairman of the board of directors and the CEO or his authorized representative. Meanwhile, all of the cheques must include a signature of the responsible accountant or his representative in addition to all of the mentioned signatures.

Note: All of the administrative correspondence shall be signed by the CEO or his authorized representative.

Article 20- The Inspector (auditor) of the company who is a member of auditing organization, or a member of official accountants and auditing institutions according to the law on the use of professional and specialized services of accountants which was approved in 1993, monitors the implementation of the provisions of the articles and the relevant regulations and also checks company’s financial statements and provide required reports for the General Assembly, as well as all the duties and powers that were delegated to him law of commerce. The inspector submits a copy of his report to the relevant authorities and positions at least fifteen days before the General Assembly convention. The Inspector has the right to refer to all of the documents and evidences by informing the chairman of the board of directors and the CEO without the right of interference and/or interruption in the operational proceedings of the company.

Chapter Three- Other regulations

Article 21-This company and affiliated companies (subsets) are subordinating the laws and regulations of the Ministry of Housing and Urban Development in the fields of policies, plans and other operational activities.

Article 22- The financial year of the company commences from the first day of first month of each solar year (Farvardin) and ends at the end of the last month of the same solar year (Esfand) with the exception of the first year of the establishment of the company which commences on the date of the establishment of the company and ends at the end of the same solar year (end of Esfand).

Article 23- The accounts of the company shall be closed at the end of Esfand (last month of each of solar years) and the financial statements shall be submitted annually to the inspector within the prescribed deadlines.

Article 24- The transfer of the credits and income of affiliated companies (subsets) and the percentage that is required to finance the expenses of the company are not included in income lists.

Article 25- Investment from the company’s internal resources in order to create educational, services, cultural, and religious facilities in the new cities is considered as a pre-payment of the taxes of the specialized holding company and each of the affiliated companies (subsets) and also will be transferred to their definitive tax accounts.

Article 26- The cases which are not anticipated in this statute, shall be governed by the relevant laws and regulations of establishment of new cities law which was approved in 2001 and also its implementation regulations, urban land law and its implementation regulations and other relevant guidelines.

This statute has been approved by the Guardian Council in accordance with the letters No. 35401/30/88 dated 20/08/2009 and No. 37164/30/88 dated 21/1/2010 of the mentioned council.