1.2. The company s title is Erdenes Mongol Limited Liability Company and its abbreviation is Erdenes Mongol LLC.

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1 ERDENES MONGOL LIMITED LIABILITY COMPANY CHARTER One. General Provisions 1.1. This Charter is a primary document that defines Erdenes Mongol Limited Liability Company (hereinafter referred to as Company ) legal status, lines of business, and management and its rights and obligations (The title and Articles 1.1 and 1.2 of the Charter were revised as per Government resolution No. 9 dated January 11, 2014) The company s title is Erdenes Mongol Limited Liability Company and its abbreviation is Erdenes Mongol LLC The company s location and mailing address shall be determined by the address of its office or executive management The company shall have its symbols (logo and flag) and use letterhead and stamp by law. Two. Company s Legal Status 2.1. The company shall operate under Mongolia s Constitution, Civil Law, Human Development Fund Law, Company Law, Minerals Law, and Nuclear Energy Law, and international agreements Mongolia is a party to, and other laws and legal acts, and this Charter The company is a profit-making legal entity that keeps a separate balance sheet and financial statement, exercises its rights and obligations on its behalf, and has separate assets The shareholder shall not be liable to the company s obligations but it shall be liable in proportion to the shares it owns. The company shall not be liable to its shareholder. Three. Company s Lines of Business and Principles 3.1. The company shall conduct the following operations To exercise state representation in relation to development of strategic deposits and strategic minerals ( Deposits collectively): To own state-owned shares of legal entities which are deposit exploration and mining licensees; To collect the following incomes due to the state in the course of deposit development: Dividends from state-owned shares of legal entities which are deposit mining licensees, and income from share sales; Upfront payment and part of loans obtained in connection with deposit development; Deposit development: To conduct geological surveys, research, prospecting, and exploration at deposits with public budget funding and other financial sources; To develop deposits individually or collectively; To make preparations for and enter into a deposit development agreement with Government consent; To establish and hold shares in upstream and downstream processing industries at deposits; To develop general infrastructure development plans for deposits and take action to implement and manage infrastructure projects and programs individually and collectively; To provide logistics, product transportation, transit, storage, and customs control zone support at deposits; To bring deposits into economic circulation, increase capacities, boost production, and introduce advanced technology Holding and ownership, use, and disposal of licenses and assets: To hold, partially or entirely return, transfer, obtain, and collateralize deposit exploration and mining licenses;

2 To engage in monitoring transfer and movement of deposit exploration and mining licenses and conducting censuses; To own, use, lease, let, buy, and sell any property, equipment, and intellectual property rights in relation to deposit development; To buy, build, own, hold, use, let, and collateralize buildings and facilities and other real estate; Attraction and distribution of financing: To take out loans and attract investment in different ways to develop deposits and conduct operations set out in the Charter; To issue loans to and make investment into legal entities in different ways the company holds shares in; To issue bonds with competent authorities consent; Sales and trade: To sell mining production (mined, concentrated, and processed production) on foreign and domestic markets and enter into contracts and agreements; To conduct mining production exchange operations; To build, own, and use port of entry and point of entry facilities in relation to export and import of production; Consulting services: To do feasibility study, reserve estimations, and capital and financial planning with respect to deposit development; To do environmental impact assessment and reclamation and remediation with respect to deposit development; To sell state-owned shares of partially state-owned companies that conduct mining operations and engage strategic investors; To take action to promote deposits and pursue public relations at home and abroad in relation to bringing of deposits into economic circulation; To ensure that shares of legal entities, which are deposit licensees, are listed on domestic and foreign exchanges and engage in trading; To exercise state representation in development of deposits with prospecting and exploration conducted and reserves determined with public budget funding other than those set out in Article of the Charter as per a competent authority decision; To obtain, own, and sell state-owned shares of state-owned and partially state-owned legal entities other than those set out in Article of the Charter as per a competent authority decision; 3.2. The company may conduct any operation not prohibited by law and conduct it through its subsidiaries and affiliates The company shall conduct operations, which need licenses, obtaining licenses issued by a competent authority by law The company shall conform to the following principles in its operations: Independence; Transparency; Impartiality of institution, corporate entity, official, individual, and political party interests. Four. Company Shares and Joint Stock 4.1. The shares announced by the company shall consist of 100,000,000 (one hundred million) ordinary shares each of which has nominal value of Tg 1 (one)[1] and 3,000,000 (three million) preference shares each of which has nominal value of Tg 1 (one) The size of the company s joint stock shall equal the total value of the ordinary and preference shares issued.

3 4.3. The company shall issue preference shares for each citizen of Mongolia based on official quantitative data of the consolidated database at the General Agency for State Registration and establish a price and conditions of such a preference share under the conditions set by the Board of Directors ( Board ) or under the Charter Preference shares shall be transferred to a citizen of Mongolia free of charge, who is registered with population and household registration set out in Article 15.1 of the Human Development Fund Law and has a clean citizenship record, and sale, trading, gifting, collateralizing, and inheriting preference shares shall be prohibited The company s shares shall be intangible and the company shall keep and store ordinary shares. A custodian shall be contracted to record preference share holding and termination Unless provided otherwise in the Human Development Fund and Charter the company s preference shareholder shall be entitled to receive dividends through the Human Development Fund only The company s ordinary shares shall vest in the state only until a decision is made by the Government and shall not be traded to others in any manner If the Company announces more shares and other securities it shall establish the quantity, date of issue, and conditions by law The company s shares shall represent the title to joint stock not the title to any company assets Cash, securities, and other assets, and titles to assets may be used to make payments for shares issued in the course of the company s incorporation as well as additional share issue. Five. Shareholders Meeting 5.1. The Government shall exercise the rights of the company s shareholder The State Great Hural shall discuss and resolve appointment and discharge of members of Supervisory Board members as part of its jurisdiction The Government is entitled to discuss and resolve issues in relation to the company s operations other than those that fall under the State Great Hural s jurisdiction under this law and laws as part of its jurisdiction and shall discuss and resolve the following issues according to its operating regulations as part of the company s shareholders meeting jurisdiction To restructure the company by merger, division, separation, or change; To change the company s type; To incorporate and liquidate its subsidiary or controlled company and establish a liquidation commission; To discuss and approve reviews conducted by the Board on the company s annual operating report and financial statement; To address an issue of shares in light of types and amounts of shares announced by the company; To make a decision to sell, buy, and redeem securities issued by the company other than preference shares issued by the company; To appoint and discharge the Chairman and members of the company s Board, and Executive Director; To make a decision to allow the company to hold state-owned shares of a legal entity that holds a mining license at deposits with prospecting and exploration conducted and reserved determined with public budget funding; To set amounts of salaries and bonuses for the Board Chairman and members; To make a decision if the Board fails to conduct negotiations on substantial and conflict of interest transactions; Other issues submitted for discussion according to the company s board decision If deemed necessary, issues that fall under the jurisdiction of shareholders meeting may be submitted to the Government for discussion any time as per a board decision.

4 5.5. As a shareholder the Government shall respect the company s legitimate interests, ensures that it conducts independent and efficient operations, and support it regularly through policy and decisions aimed to increase the company s assets The State Great Hural and Government shall not engage in the company s day-to-day operations directly with respect to issues other than those that fall under their jurisdiction under laws and this Charter The Board shall submit an issue on financing for a subsidiary or controlled company that doesn t conduct business operations and make profits but carries out management and research activities as part of the company, to a Cabinet meeting for resolution. Six. Board of Directors 6.1. The Board shall be the company s governing body when shareholders meeting is in recess The Board shall consist of 9 (nine) members and they shall be nominated, appointed, and discharged under the Human Development Law The main type of board activity shall be its meeting. A board meeting shall be held once a quarter and if deemed necessary a supplementary meeting may be held any time The Board shall set up the following committees to conduct its activities regularly and professionally and may establish standing and ad hoc committees on other specific issues Nomination; Audit; Salaries and bonuses Each of the committees shall have 3 (three) members and such members shall be selected by the Board from among its members The committee shall refer a proposal and opinion on issues it is responsible for to the Board for discussion and the Board shall make a decision thereon The committee shall develop draft operating regulations that set out its rights and obligations in compliance with the Company Law and submit to the Board for discussion and approval and abide by the regulations in its activities The following issues shall be discussed and resolved at a board meeting To approve the company s organizational structure and vacancies; To approve the company s budget and business plan; To approve a production sales and marketing plan; To determine the company s investment policy and areas; To determine the company s strategic goals and approve a long-term and medium-term business plan; To approve regulations and agreements that regulate relations between the parent, subsidiaries, and controlled companies; To set the company s operating and investment cost ceiling; To submit a proposal to appoint or discharge the Board Chairman and Executive Director to the Government for resolution; To set terms and conditions of an agreement to be made with the company s Executive Director, his/her salaries and bonuses, and extent of his/her rights and responsibility to dispose assets, and make an agreement (revised by Government resolution No. 9 issued on January 11, 2014); To discuss and resolve issues of establishment, opening, and dissolution of the company s branch or representative office and appointment and discharge of its management; To provide opinions on the company s annual operating report and financial statement; To set market values of assets and titles to assets;

5 To discuss and resolve external audit opinions provided on the company s balance sheets and statements; To approve the Board operating regulations and rules and regulations of the board committees; To discuss and resolve issues of assets the company will buy, dispose, and write off; To discuss and provide opinions on fixed assets subject to sale and transfer; To distribute revenues received by the company and determine and approve types and amounts of investment; To appoint the Company s eligible officer who will exercise the rights of subsidiary and controlled company shareholders and approve guidance for comments to be made by a person who will be present in shareholders meeting as the company or shareholder s representative on decisions with respect to items on its agenda; To approve regulations on determination and expenditure of risk accumulation left to the company s discretion; To determine amounts of revenues the company collects to the public budget and Human Development Fund or dividends unless otherwise provided in laws; To make decisions on prices of substantial and conflict of interest transactions and whether to perform such transactions; To refer proposals to the Government on establishment and dissolution of a legal entity, making of investment, and sale of investment made; To appoint and discharge the company s Senior Deputy Director and Deputy Director as proposed by the Board Chairman; To exercise the powers of shareholders meeting of the subsidiary 100 (a hundred) % of whose shares is controlled by the company, itself or pursuant to Article of this Charter and appoint and discharge members of the subsidiary s Board and its Executive Director unless otherwise provided in the subsidiary s charter; To discuss and resolve all issues other than those subject to discussion and resolution at shareholders meeting only under this Charter and Company Law; To discuss and resolve other issues provided in laws and this Charter; To refer issues on establishment of full-time and part-time councils and other units in investment, production, technology, deposit reserve control, science, technology, and risk management, and in other areas where necessary in light of the company s operations to the Government for resolution A Board Chairman shall be appointed and discharged by the Government from among the members as proposed by the Board The Board Chairman shall be obligated to manage board activities, convene and preside at its meeting and ensure that minutes are taken and supervise this process The role of the Board Chairman shall be undertaken by one of the members in his absence as assigned by the Board Chairman The Board Chairman shall not undertake the role of the chairman of one of the board committees A board meeting shall be convened as per the regulations set out in Article 80 of the Company Law A board meeting shall be valid when a great majority or two third (2/3) of the members are present thereat and a decision made at the meeting shall be effective when a great majority or two third (2/3) of the eligible voting members are present at the meeting A board member shall be present at a meeting in person only and exercise his/her rights and shall not be present at a meeting by proxy. If the Board makes comments on items on the agenda in writing though he/she isn t present at the meeting in person he/she shall be considered present thereat Issues on convention of a board meeting, validity, members participation, discussion of agenda items, establishment of rules of procedure, rights and obligations of the Board Chairman, and other related issues shall be set out in the Board operating regulations A Board Secretary shall be appointed at a board meeting as proposed by the Board Chairman. The rights and obligations of the Board Secretary shall be set out in the Board operating regulations.

6 6.18. The Board Chairman and members shall receive salaries and bonuses and amounts of such salaries and bonuses shall be consistent with specific standard rates set by the Government and other related competent authorities The Board shall report its work to shareholders meeting at least once per year. Seven. Executive Management 7.1. The company s executive management shall be exercised by a team consisted of the Senior Deputy Director, Deputy Director, and Head of Finance Unit led by the Executive Director (revised pursuant to Government resolution No. 9 dated January 11, 2014) The Executive Director shall be appointed and discharged by the Government as proposed by the Board The Executive Director shall conduct activities such as management of the company s day-to-day operations, within the bounds of the powers set out in the company s charter and agreement made with the Board, performance of transactions, making of agreements, and representation of the company in Mongolia and abroad in its interests on the company s behalf without power of attorney The Executive Director shall make agreements with each member of the executive management and members rights, obligations, salaries, bonuses, benefits, and rights and responsibilities to dispose assets, and other issues shall be set out in such agreements (revised pursuant to Government resolution No. 9 dated January 11, 2014) Regulations on agreement performance assessment and granting of bonuses shall be approved by the Board If the Executive Director is found guilty of violating his obligations under this Charter and agreement and causes serious damage to the company s reputation and economic state in carrying out his/her duties the Board shall provide a proposal to terminate his/her powers to the Government for resolution If a member of the executive management is found guilty of violating his/her obligations under this Charter and agreement and causes serious damage to the company s reputation and economic state in carrying out his/her duties the Board shall discuss and resolve an issue of termination of his/her powers The Executive Director shall meet the following criteria To have excellent management skills, at least 10-year (ten) management work experience, and higher education; Not to have overdues under a loan or guarantee agreement; To have a clean criminal record; Not to have ethics and business reputation that contradict management of the company The Executive Director shall exercise the following rights and obligations To be fully responsible for the company s operations and report his/her work to the Board at least twice per year for review; To be obligated to issue and report the company s balance sheet, financial statement, and operating report to related entities and responsible for the accuracy; To approve and enforce the company s internal regulations, instructions, guidance, terms of reference, and schedules, and take disciplinary action to the company s employees; To create an internal supervisory system that will help monitor law enforcement, financial and business operations, expenditure and use of assets, and the company s internal labor regulations; To appoint the company s internal supervisor in consultation with the Board; To develop and refer the company s operation and business plan, annual budget, and investment plan to a board meeting for resolution and take action to implement them; To interact with and express his/her position to the Government and other related authorities directly on issues in relation to the company s policy and its pursuance;

7 To issue power of attorney to allow presentation of the company on issues the agreement made with the Board Chairman applies to; To bring a list of information, data, and materials in relation to the company s secrets and secret protection regulations in compliance with laws and obtain approval from a board meeting for and enforce them; To take action to ensure enforcement, execution, and performance of this Charter, applicable laws, standards, decisions made at the company s shareholders meetings, board decisions, and assignments; To pursue and conduct policy and activities aimed to the obligations set out in the agreement and raise the company s solvency and reputation; Not to use information and data obtained in carrying out his/her duties in pursuance of his/her personal or third party interests; To develop and refer a proposal on the company s structure and organization to the Board for approval and approve terms of reference for employees, and recruit, make labor agreements with, and discharge employees within the bounds of the approved vacancies and structure; To bring issues on fixed assets the company wants to buy, dispose, write off, sell, or transfer to a board meeting; To issue a decree on issues in relation to the company s operations and ensure its enforcement; To be responsible for and organize professional training and retraining; To approve samples of the company s symbol and stamp; To develop associated rules and regulations in compliance with applicable laws and refer them to the Board and subsidiaries competent bodies for discussion and resolution to ensure that the parent and subsidiaries operations are consistent and comply with policy and guidance issued by competent authorities; To solicit associated news, information, data, reports, and statements from the subsidiaries and controlled companies on the parent s behalf, be exposed to balance sheets and statements, and allow corresponding authorities to audit them if deemed necessary unless otherwise provided in the subsidiaries and controlled companies charters; To exercise other rights and obligations set out in laws, this Charter, and agreement The Executive Director may delegate his/her rights and obligations to the company s eligible officer temporarily. Such delegation with power of attorney shall not justify his/her discharge from liability The company s executive management may refer an issue of employment full-time or part-time technical consultant or consulting team in relation to performance of its functions set out in this Chapter to the Board for discussion and resolution. Eight. Subsidiary, Controlled Company, Branch, and Representative Office 8.1. The Board shall refer issues on establishment of a subsidiary or controlled company individually or collectively with another legal entity as per a competent authority s decision and incorporation of a subsidiary or controlled company through transfer and acquisition of a legal entity s shares to the Government for resolution. A subsidiary or controlled company shall be a legal entity that issues its own balance sheets and statements and has a current bank account and exercises its rights and obligations If necessary the Board may open a branch or representative office at home or abroad A representative office shall conduct operations on the company s behalf as its representative. A branch is an entity that conducts the company s primary operations on its behalf in a different place A branch and representative office shall not exercise a legal entity s rights and shall conduct operations in compliance with regulations approved by the company. They shall use the company s letterhead and branch and representative office stamps A director of a branch or representative office shall be appointed and discharged by the Board as proposed by the Executive Director and they shall conduct operations based on power of attorney issued by the company.

8 Nine. Subsidiary and Controlled Company Relations and Group 9.1. The company shall interact with its subsidiaries and controlled companies through its representatives under the Company Law and this Charter and make agreements and work with its subsidiaries and controlled companies and other legal entities which are mining licensees under Mongolian laws and Government and state administrative authority decisions An agreement set out in Article 9.1 of this Charter shall determine management, financial, and supervisory systems to be put in place by the parent and parties rights and obligations The company shall agree on and address employment of its representatives in specific positions in its subsidiaries and controlled companies executive management with the parties in light of its part of state-owned shares in such subsidiaries and controlled companies The company and its subsidiaries and controlled companies are referred to as a group collectively and a specific structure may be created and operated as part of their executive management to regulate issues in relation to common interests and operations of the companies associated with the group The company may exercise the right to hold any legal entity s state-owned shares as per a competent authority s decision itself or through its subsidiary The company shall exercise the title to state-owned shares in its subsidiary or controlled company with an entity entitled by the Board and executive management. The entity entitled by the Board and executive management shall abide by guidance based on proposals approved by the Board under this Charter in exercising its right as a company or shareholder representative and provision of a proposal other this guidance shall justify its discharge from the right as its representative In the case of an interruption in the company, its subsidiary, or controlled company s regular operations and variation in financial ratios and indicators the Board may implement a specific plan, project, or program aimed to stabilize its operations and overcome the challenges as per a competent authority decision or by itself, in conformity with an auditor s opinion Regulations on exercise of a subsidiary and controlled company shareholder s right shall be approved by the company s Board in compliance with this Charter. Ten. General Transaction Procedures Significant transactions shall be determined and performed under the Company Law and unless otherwise provided in this Charter significant transactions shall exclude regular transactions and raw material and goods purchase and end product sale transactions associated with the company s day-to-day primary operations Unless otherwise provided in this Charter authorization to perform a transaction the total value of which is over Tg 50,000,000 (fifty million) shall be approved by the Board If the value of a transaction is less than the amount set out in Articles 10.1 and 10.2 of this Charter but the sum of the total value of the transaction and other ones associated with it exceeds the amount set out in Articles 10.1 and 10.2 Articles 10.1 and 10.2 of this Charter shall be followed The company s Board shall determine whether the transaction is a significant one and may renew the asset price in the balance sheet as per an auditor s recommendation in light of the inflation rate in doing so The market price of an asset and title to an asset of a significant transaction shall be established by the Board Conflict of interest transaction-related provisions under Article 89.4 of the Company Law shall exclude any transactions performed between the company and shareholder or the company and its subsidiary or controlled company or other company affiliated with the shareholder. Each board member may take a vote on such transactions The company is obligated to report significant and conflict of interest transactions performed in the financial year and their prices to the public.

9 Eleven. Company s Eligible Officer Pursuant to Article 84.1 of the Company Law the following persons shall be considered the Company s eligible officers Board Chairman and members; Executive Director; Senior Deputy Director and Deputy Director; Head of Finance Unit; Accountant-in-Chief; Specialist-in-Chief; Board Secretary; Department Director and Division Head; Other entities that engage in making decisions and agreements and transactions performed directly or indirectly The eligible officer shall provide information on entities that share common interests with him/her and other information for related competent authorities and officials under the Company Law and other laws, and exercise the obligations set out in this Charter and internal regulations and act in good faith in the company s interests The company s eligible officer shall exercise the following rights To act within the bounds of his/her powers set out in laws and the company s Charter and regulations and exercise his/her powers; To be committed to caring the company s interests in carrying out his/her activities and carry out his/her obligations set out in the Company Law and this Charter strictly; To carry out his/her activities independently, prioritize the shareholder, customers, and other parties interests, and not come into conflict of interest; To report any transaction or issue on material benefits that can affect the company directly or indirectly or on a third party s side to the Board; To make a reasonable decision in the company s interests; To avoid conflict of interest in making a decision and inform the Board and auditor in the case of likely conflict of interest every time it happens; Not to receive a gift or bonus from an outsider in exercising his/her obligations; To prepare and refer a list of entities that share common interests with him/her within 10 (ten) days to the Board Secretary under Article 99 of the Company Law after he/she is appointed to the position and inform the company within 10 (ten) days every time a change is made to the list; Not to disclose information included in the company s secrets to others or use it for personal purposes Unless a longer period is set under the agreement made with the company the company s eligible officer shall exercise the obligation set out in Article of this Charter within 3 (three) years after he/she is discharged from the position. Twelve. Company s Supervisory System The company shall have the following supervisory system Supervisory Board; Internal supervision;

10 External supervision The obligation to carry out regular supervision over the company s operations shall be exercised by the Supervisory Board The Supervisory Board shall consist of 5 (five) members and they shall be appointed and discharged under the Human Development Fund Law The Supervisory Board shall exercise the following rights to perform its functions To discuss the company s report on enforcement of the Supervisory Board s decision and external auditor s opinion and recommendation at a Supervisory Board meeting; To be exposed to operating reports and financial statements presented by the company to competent authorities and public; To develop proposals to improve the company s operations and its legal framework; To solicit reports, information, and other necessary documents on complaints made with respect to the company s decisions and decisionsand operations and review such complaints; To review complaints made in relation to decisions made by the company s eligible officers; To extend a demand to the company s management in order that the company can fix an irregularity occurred in its operations The Supervisory Board shall exercise the following rights to perform its functions To supervise selection of an audit company that will audit the company s annual financial statement; To be exposed to and supervise action the company takes to abide by an auditor s opinions and recommendations and monitor its performance; To supervise enforcement of Supervisory Board decisions A Supervisory Board Chairman shall exercise the following rights apart from the rights of a board member To manage Supervisory Board activities and set a date for and preside a meeting; To select the member who will substitute the Supervisory Board Chairman in the latter s absence; To approve Supervisory Board members terms of reference and supervise performance thereof A Supervisory Board member shall exercise the following rights To propose a specific issue for discussion at a Supervisory Board meeting; To be exposed to the company s operations as per a Supervisory Board decision; To solicit documents he/she needs to perform his/her terms of reference from the company The Supervisory Board Chairman and member shall exercise the following obligations To be responsible for specific tasks as per terms of reference approved by the Supervisory Board Chairman and expose performance and results to a Supervisory Board meeting; To protect the company s legitimate interests; To show up for a scheduled and announced meeting in cases other than excuses; To comply with the Supervisory Board s rules of procedure Supervisory Board members shall be prohibited from being the company s eligible officers The Supervisory Board shall oversee performance of the company s Charter, shareholders meeting decisions, and State Great Hural and Government decisions on the company s operations, provide and expose an opinion on the company s management operations and financial statements to shareholders meeting, and report its activities to the State Great Hural The Supervisory Board shall exercise other rights and obligations provided by this Charter and applicable laws in exercising oversight over the company s operations.

11 Supervisory Board members shall be nominated for and one who obtains a majority of votes from the Supervisory Board shall be elected as a Supervisory Board Chairman A type of Supervisory Board activity shall be its meeting and it shall have at least 1 (one) per quarter A meeting shall be valid when 3 (three) or more Supervisory Board members are present thereat and a decision shall be effective a great majority or two third (2/3) of the eligible members present at the meeting vote for it Issues on convention of a Supervisory Board meeting, review of complaints, and other activities shall be regulated by Supervisory Board s operating regulations approved by the Government in compliance with this Charter The company s Executive Director, Senior Deputy Director, Deputy Director, and other eligible officers shall be obligated to expose the company s business and financial operation-related documents to and enable the Supervisory Board to supervise them at its request An internal supervisor appointed by the Executive Director shall exercise internal supervision. Procedures for internal supervisors shall be approved by the Board. Internal supervision shall be in operation regularly The company shall be committed to having external supervision in its operations, ensure that its financial statements are audited and certified, and allow an external audit company to carry out full or partial audits in its financial and economic activities The company s Board shall select and make an agreement with the company s auditor based on an audit committee s opinion Selection of the following entities shall be selected and employed as the company s auditor Entities that share common interests with the company and the company s eligible officers and entities that share common interests with them and employees and eligible officers who work under contracts with the company or companies that share common interests; Entities that hold securities other than preference shares issued by the company or entities that share common interests with it or other assets or titles to assets associated with the company or entities that share common interests with it; Entities that perform transactions and have business relations on issues other than audit services Discussion shall be held and decision made on an external auditor s report at a board meeting. Thirteen. Corporate Finance and Dividends The company shall be financed from the following sources Dividends from state-owned shares and specific part of incomes from share sale; Specific part of upfront payment or loans received in relation to deposit development; Others The amount of revenues the company collects for the public budget and Human Development Fund shall be determined at a board meeting and decision made thereon shall be delivered to the Government and central state administrative authority in charge of finance and budget at least 30 (thirty) before a bill on Human Development Fund budget of the financial year is referred to the State Great Hural The Board shall deduct the company s budget for the financial year, necessary investment expenses, and assets for risk accumulation (contingent and enlargement expenses, current and fixed assets expenses, and assets needed for other actual and conditional payments) from aggregate collected assets in determining amounts of revenues set out in Article 13.2 of this Charter Revenues the company collects for the public budget and Human Development Fund shall consist of the sources set out in Article of this Charter and they shall be collected in the company s bank account only The company shall transfer incomes or dividends collected pursuant to that year s Budget Law and Human Development Fund Budget Law to the public budget and Human Development Fund The company shall distribute dividends or allotments for preference shares under the Human Development Fund Law and nominal value of preference shares shall not affect distribution of dividends or allotments.

12 13.7. The amount of assets the company leaves for risk accumulation for the year shall not exceed 5 (five) percent of aggregate revenues set out in Article 13.1 of this Charter. Fourteen. Company s Financial Operations The company shall keep accounting records under accounting laws and international accounting standards and prepare and enable an audit company to provide an opinion on financial statements and expose them to the shareholder and other eligible entities. The company s Executive Director and Accountant-in-Chief shall be responsible for accuracy of financial statements The company shall issue a consolidated financial statement together with its subsidiaries The company s Accountant-in-Chief shall be a Certified Public Accountant and he shall be appointed and discharged by the Executive Director in consultation with the Board The company s financial year shall start on January 1 and end on December 31 of that year. Fifteen. Transparency of Information The company shall disseminate news and information on its operations to the public through its website every time it is available The company shall disseminate the following information to the public accessibly through the mass media on an annual and semiannual basis Reports and news and on the company s operations and developments; Annual and semiannual financial statements certified by audit companies; Environmental impact assessment; Information on substantial and conflict of interest agreements and transactions the company makes and performs with other parties; Information on state guarantees and other financial assistance and other guarantees the company give other parties; Other information the Board deems necessary to make public. Sixteen. Other Provisions Any issue not set out in this Charter shall be regulated and interpreted by the Human Development Fund Law, Company Law, and other applicable laws The company s shareholder, eligible officer, and contractor shall not use or dispose information in relation to the company s secrets without its consent in writing in cases other than those in which special law provisions apply to it or a competent state authority requests it The company shall organize document recording and storage and transfer to other agencies under laws Any decision made in breach of this Charter shall not be in force.