Article of Association of Telecommunication Company of Iran

(LLP)

Registration Number 325081

* Chapter 1: Summary, name, type, object, duration, nationality and company's main
office
* Chapter 2: Capital and shares
* Chapter 3: Changes in company capital
* Chapter 4: General assemblies
* Chapter 5: Board of directors:
* Chapter 6: Inspector
* Chapter 7: Company accounts
* Chapter 8: Company dissolution and liquidation
* Chapter 9: Other issues

Chapter 1: Summary, name, type, object, duration, nationality and company's main office

Summary:

Telecommunication Company of Iran has been stablished in accordance with establishment act
of TCI dated June, 18, 1971 and possess legal personality according to article 587 of law of
commerce. In order to execute article 44 of constitution and according to article 7 of the fourth
economic, social and cultural development plan of the Islamic Republic of Iran and cabinet
ratification number 28627/T/39760 dated May, 18, 2008 TCI became an LLP and has been
registered in company registration office by registration number of 325081. In order to execute
paragraph 3 of article 18 of the law for correcting some items of the law for of the fourth
economic, social and cultural development plan of the Islamic Republic of Iran and execution of
overall policies of articles 44 of constitution, TCI articles of association ratified in 1971was
discussed by TCI general assembly and has been ratified by the following corrections. This
document will replaced the previous article of association after validation of allocation council
and belongs to shareholders according to the regulations of this document.
Article 1- Name and type of company:

Company name is Telecommunication Company of Iran (LLP) hereinafter referred to as TCI.

Article 2- Object of company:

Object of company compromises:

A) Main objects:

Performing all activities related to establishment act of Telecommunication Company of Iran

ratified in 1971 in order to create and utilize telecommunication networks and any activity
related to ICT including the following except telecommunication parent networks:
· Creation and utilization of fixed telephone networks, data and content
transformation, in such a way that full and integrated creation and distribution of ICT
services can be possible in non-parent telecommunication networks.
· Preparing necessary recommendations on strategies, policies and long-term and
mid-term telecommunication and IT plans in frame work of related regulations in order to
present to competent authorities
· Ratification of telecommunication and IT comprehensive plans in company's area
of responsibility
· Supervision and evaluation of telecommunication networks of related companies
and subsidiaries in the framework of regulations and laws
· Compilation of regulations and standard related to design, stablish, maintain and
utilization of telecommunication networks in subsidiaries in compliance with national
and international regulations and standards and supervision on their proper
implementation
· Compilation and propose tariffs related to company activities to competent
authorities

B) Secondary objects:
· Obtaining any loan or finance via internal or external resources and publishing
bonds
· Management, development and supply financial resources and optimum use of
them via financial circulation among company and related companies and subsidiaries
· Attracting and obtaining domestic and international capitals for developing and
progressing company activities
 · Participate in any industrial, business and service cooperation and investment in
the country or abroad related to company activities in the framework of laws and
regulations
· Investigation, study and performing other necessary actions in order to develop
technology, transfer technical knowledge and informing in telecommunication and IT
area considering company duties
· Support educational and research activities in the expertized fields related to
telecommunication and IT and support training programs required for company's experts
· Support researches and scientific activities and developing human resources and
other factors effective in refinement of management and company productivity
· Supervision on management affairs and financial system of related companies and
conducting necessary audit and inspection
· Preparing subsidiaries for allocation, price determination and timetable for sale of
shares in the framework of laws and regulations
· Creation, dissolution, allocation, reorganizing and transferring duties and human
resources among subsidiaries in the framework of laws and regulations
· Membership and participation in assemblies and specialized regional and
international agencies in compliance with laws and regulations
· Creating possibility of exchanging technical, scientific and business information
and creating financial relations in the activities assigned to TCI with subsidiaries and
among them

Article 3- Company duration

Duration for TCI activities in unlimited from the date of establishment

Article 4- Nationality and main office

TCI nationality is Iranian. TIC main office locates at Tehran in Tehran province. Transferring
TCI main office to any city of Iran needs ratification of extraordinary general assembly.
Changing address on the same city can be done by ratification of board of directors. Board of
directors has the right to open or close new branches or units in the country or abroad.

Chapter 2: Capital and shares

Article 5- Capital amount and number of shares

TCI capital is equal to 45873655652000 Rials which is divided into 45873655652 er shares each
valued 1000 Rials and is paid by name to the shareholders.

Article 6- Stock certificate

All stock certificates of the TCI have name. They have uniform shape and have been printed
with serial numbers and must be signed by two TCI directors. They have to be sealed and
contained the following:
· Company name and its registration number assigned by company registration
authority and Securities and Exchange Organization (SEO)
· Certificate registration number assigned by SEO
· Value of registered capital and the value has been paid
· Stock type
· Nominal value of stock and the value paid in both alphabet and digits
· Number of shares represented by each certificate
· Name and national code of shareholder

Article 7- Transfer of shares

SEO is the only reference for transferring company shares while the company is active in stock
market. Transfer of shares must be registered in company's share registration book. Transferor of
share or his/her legal advocate must sign the book. Full identity and address of the new
shareholder must be recorded in company registration book and the new shareholder or his/her
legal advocate has to sign the book, too. Formalities for transferring shares in the company is in
accordance with SEO regulations for stock exchange deals. Owing or receiving each share of the
company requires acceptance this articles of association and decisions of general assemblies of
shareholders.

Article 8- Shares are not dividable

TCI shares are not dividable. Joint owners of shares must delegate a person to represent them
against the company.
Chapter 3: Changes in company capital

Article 9- Regulations govern capital change

TCI capital change must be performed in accordance to related laws and regulations including
law of commerce, law of securities market ad instruction for registration and delivery of
securities ratified by SEO supreme council;.

Article 10- Ratification of capital change

Any change in company capital including decrement or increment is only valid if ratified by
extraordinary general assembly. Inviting for the assembly of reviewing company capital change
requires approval of SEO for compliance with laws and regulations.

Note: Obtaining approval from SEO, extraordinary general assembly can allow board of
directors increase company capital up to the value ratified by the assembly not later than two
years after the assembly decision made.

Article 11- Company capital rise

Company capital can be raised by issuing new shares after approval of shareholders and
extraordinary general assembly and in compliance with related regulations.

Payment for shares with new nominal price can be done by one the following methods:
· Cash payment of nominal price
· Changing receivable cashes into new shares
· Transferring undivided profits or gains from extra value of shares to company
capital
· Changing bonds into shares

Note: Changing legal savings into capital is prohibited.

Article 12- Payment of news share price from receivables

If extraordinary general assembly approved company capital rise from shareholders’ cash
receivables, payment of nominal price for new shares requires shareholders agreement.
Note: Shareholders cash receivables form ratified profit or profit made out of capital raise, is
considered done and can be paid if requested by shareholders.

Article 13- Share options in purchasing news shares

If capital raise is approved, company shareholders have priority in purchasing new shares
proportional to their amount of shares. This right is transferable. Deadline for implementing this
priority is proposed by board of directors and approved by extraordinary general assembly and is
not less than 60 days.

Article 14- Capital raise announcement and sending share options certificates

Share option share option must be sent via registered mail service to the last declared address of
shareholders or to the central depository office. Announcement of new shares underwriting must
be published in mass-circulation newspaper and announced to the shareholders via TCI official
website.

Article 15- Spending shares

Extraordinary general assembly can decide on selling new shares with price higher than nominal
values in order to raise capital proposed by board of directors if the method of spending extra
value gained has been cleared in the assembly.

Article 16- Capital reduction

Other than mandatory reduction of capital due to waste of company capital, company
extraordinary general assembly can decide on capital reduction proposed by board of directors if
this reduction does not damage balance of shareholders rights. Mandatory capital reduction is
being done by reducing number of shares or shares nominal amount. Optional capital reduction
is done by reducing nominal price of shares in equal fraction and returning reduced amount to
share owners.

Article 17- Issuing bonds

TCI can issue bonds if ratified by ordinary general assembly. If SEO approved that the process
of issuing bonds had been done in compliance with laws and regulations, shareholders can be
invited to participate in ordinary general assembly. Ordinary general assembly can allow board
of directors issue bonds with the value ratified by the assembly in a timeline not exceeding two
year after the decision had been made. This required obtaining allowance from SEO.

Chapter 4: General assemblies

Article 18- Duties and responsibilities of general assemblies

Duties and responsibilities of ordinary and extraordinary general assemblies of TCI are the same
as the duties and responsibilities mentioned in law of commerce for LLP companies.

TCI ordinary assemblies are held in compliance with law of commerce as following:

1-Ordinary general assembly: this assembly must be held once a year maximum 4 months after
expiry of fiscal year and to address the following items:
· Listening to directors report on last fiscal year performance
· Listening to inspector(s) report
· Review and approve last fiscal year financial reports
· Ratification of dividable profit
· Ratification of bonus amount for board of directors’ members
· Selecting main and reserve inspector(s) and their salary
· Selecting mass-circulation newspaper(s) for publishing company announcements
· Selecting directors
· Issuing unchangeable or non-transferable bonds
· Other items specified in law of commerce as competency of ordinary general
assembly

2- Extraordinary general assembly: This assembly can be hold in any case as the following:
· Changing articles of association content
· Changing capital amount (raise or reduction)
· Issuing exchangeable (exchangeable with shares) bonds
· Company dissolution in accordance with regulations of law of commerce
Note: Submission of determining bonus and payment to members of directors’ board and
inspector(s) to company directors is not permitted.

Article 19- Required condition for presence right and vote right in assemblies: All shareholders
or their legal advocates regardless to their amount of share can attend in all general assemblies
and have one vote for each share. Validated document for presence of advocates is mandatory.

Note: If shares had been transferred, new shareholder can participate in the assembly by
presenting one of the following documents:
· Share purchase announcement
· Share deposit and transfer certificate
· Original copy of share certificate
· Certificate issued by central deposit company and balance sheet for the cashes paid

Article 20- Invitation announcement for general assemblies:

Inviting shareholders to all general assemblies must be done via publishing announcement in
mass-circulation newspaper like other announcements related to the company and via TCI
official website. Minute, date and time of assembly and complete address of the meeting location
must be mentioned in the announcement.

Article 21- Agenda:

Agenda for the assembly is provided by who has invited the attendees. All the items covers by
the minute must be clearly mentioned in the invitation announcement. Important issues such as
selecting board of directors’ members, inspectors, diving profit and savings and changing subject
of activity cannot be specified as other items in the agenda. Items have not been covered in the
agenda cannot be discussed in general assembly unless all shareholders have attended in general
assembly and vote discussing such items.

Article 22- Assembly managerial board:

General assemblies are directed by a managerial board consists of a chair, a secretary and two
supervisors. General assemblies are held chaired by head of company's board of directors or
his/her deputy and if they are absent the assembly will be chaired by a director had been selected
by the board of directors to do this task unless in assemblies including selection or dismissal of
directors. In this situation assembly chair will be selected among shareholders by voting. Two
shareholders will selected as observers and one more as the secretary.

Article 23- Voting method:

Voting is done oral (by raising hand or standing up) unless general assembly decides on written
voting.

Note: Voting for selection of board of directors’ members and inspector must be written.

Article 24- Minimum requirement for credibility of ordinary general assembly:

Attending owners of more than half of the company's shares with vote right in ordinary general
assembly is mandatory. If this requirement has not been satisfied in the first meeting, invitation
for the second meeting will be issued and the second meeting will be held regardless to the
number of attendees if the result of the first meeting has been specified in the invitation for the
second meeting.

Article 25- Majority of votes required for ordinary general assembly:

Decisions are made in ordinary general assembly considering half plus one of votes unless for
selecting directors and inspectors where relative majority of vote is required. For selecting
directors, number of votes for each voter multiplies in number of directors. Voters can vote one
candidate or divide it between different candidates.

Article 26- Minimum requirement for credibility of extraordinary general assembly and voting:

Owners of more than half of the shares have to attend in extraordinary general assembly. If
minimum requirement has not been met by the first invitation, second invitation will be done and
this assembly is credible by attending one-third of shareholders if the result of first invitation has
been announced in second invitation. Decisions of extraordinary general assembly is always
credible by two-third of voters of attendees in the meeting.
Chapter 5: Board of directors:

Article 27- Board of directors’ number of members:

Company is directed by a board consisting of five person selected by the ordinary general
assembly among shareholders. Directors can be fired and reselecting them is allowable.

Note 1: Ordinary general assembly can select reserve members for board of directors.

Note 2: At least one of the members of directors’ board or his/her advocate must be non-tasked
and hold financial educational degree (accounti.ng, financial management, economy, other fields
related to finance or economy)

Article 28- Complementing members of directors’ board:

If number of directors’ board in less than assigned minimum number and no reserve members
had been selected, directors’ board has to hold ordinary general assembly in less than one month
in order to complement directors’ board.

Note: If legal persons with membership in directors’ board had not introduced their agent in 15
days after voting in the assembly or this position has not been occupied for one month, this is
considered as resignation of legal person.

Article 29- Resignation of directors’ board members:

If any member of directors’ board decides to resign he/she must inform directors’ board and
inspector at least 30 days before.

Article 30- Absence in director’s board meetings

Absence of any directors’ board members or his/her advocate in 4 consecutive or 6 alternative

meeting during a year with legitimate excuse results in expiry of the membership. Directors’
board must approve legitimacy of the absence.

Article 31- Directors duty period:

Directors are tasked for their responsibilities for two years. This mission is continued until the
registration process of the announcement for new directors completes in official authority.
Reselecting main and reserve members of directors’ board for the next periods is permitted.

Article 32- Bail shares:

Each director has to owe at least 1000 stocks of company shares during his/her duty period and
must keep them in company as bail. These shares are kept as guarantee for compensation of any
potential damage caused by directors personal or group mismanagement. These shares are
registered by name and are not transferable and will be kept until director balances his/her
account with the company after his/her duty period. These shares can be used by the director in
general assemblies for voting and the profit of them will be paid.

Article 33- Board of director head, deputy and secretary:

Board of directors selects one member as head of board and another one as deputy at its first
meeting after ordinary general assembly. Duty period for head and deputy of the board in no
longer than their duty period as members of directors' board. Head and deputy of the board can
be removed or reselect to these positions by the directors' board. If head and his/her deputy is
absent, directors’ board select a person among them to conduct duties of the head. Directors’
board select a person among them as secretary for one year.

Article 34- Holding board of directors' meetings:

Period for holding directors’ board meetings is determined by directors’ board. Directors’ board
has to hold the meeting in periods not longer than one month by written invitation of head,
deputy or two members of the board and if necessary by invitation of CEO. A rational time must
be considered between date of sending invitation and date of the meeting. If exact time and date
of the next meeting is specified in board of directors' meeting minute, sending invitation is not
necessary. Board of directors meeting hold on company main office or in any other location
specified in the invitation.

Article 35- Credibility limitation for meetings and required majority:

Meetings of directors' board are credible if more than half of its members attend. Board of
directors' decision are credible regarding relative majority of votes.
Article 36- Board of directors' meetings minute:

A minute must be prepared for each meeting of directors' board and must be signed at least by all
present members attend in the meeting. Name of present and absent directors must be specified
and a brief of discussions and decisions made must be available in the minute. If a director did
not agree with all or part of any decision made, this opinion must be specified in the minute.

Article 37- Authorities of directors' board:

Board of directors has the full authority for any action on behalf of the company of conducting
any operation or deal related to company scope of activity and making any decision which has
not been clearly specified as general assembly authority. This includes the followings:
1- Representing company against shareholders, all private and public organizations
and institutes, judicial authorities and other ordinary and legal persons.
2- Ratification of company internal regulations and instructions, proposed by CEO.
3- Decision making on establishment and removing agents or branches in Iran or any
other point worldwide.
4- Ratification of organizational structure, employment guidelines and amount of
salary
5- Prediction and ratification of company's annual budget
6- Opening any account and using it registered as company property in banks and
credible financial institutes.
7- Getting company's receivables and paying debts including.
8- Commitment, endorse, acceptance, payment and requesting commercial documents.
9- Signing any contract and change or cancel it on purchase and sell, exchanging
movable goods including conducting all operations and deals mentioned in article 3 of
statute.
10- Decision making on issues related with registration and bargaining all nonmaterial
laws including patent or registration of trade name, logo and purchase and sell or
assignment of patents or any right
11- Lending any document, deed, company's cashes or bonds and refunding them
12- Getting loans from banks, companies and official institutes with respect to current
articles of associations.
13- Hypothecate company’s properties including moveable and immovable and cancel it
any time needed
14- Propose any criminal or legal claim on behalf of legal or regular persons an defend
any claims against company in all authorities considering research right, appeal,
compromise, lawyer determination, agreement, claim a hoax, refund claim and refer
claim to legal referees with or without authority to compromise, determining expert,
confession whether in claim or in cases against claims, claim for damages, counterclaim,
providing claimer, request custody for people and properties via official and legal
references, setting deadline for getting debts, request issuance of executive document and
follow its operational process and changing convicted to valedictory cases in courts and
offices.
 15- Prepare annual fiscal reports and activity report of directors' board and present them
to the inspector
16- Prepare intermediate fiscal reports for 3-month periods and present it to the inspector
and the auditor
17- Invitation for ordinary and extraordinary general assemblies and determining their
agenda
18- Propose any saving more than legal saving
19- Propose method for dividing profit among shareholders
20- Propose statute correction to extraordinary general assembly
21- Review and ratify policies and company's operational program
22- Decision making on using consultancy services and domestic and foreign experts
23- Getting deposit from applicant for fix and mobile telephone lines according to the
allocation regulations for these services via subsidiaries
24- Getting any deposit from applicants for using telecommunication services according
to related regulations via subsidiaries
25- Supervision on proper implementation of tasks and supervision on all management
affairs and financial system of subsidiaries and conducting necessary audit and inspection
affairs
26- Ratification of regulations for selecting subsidiaries' board of directors' members.

Article 38- Bonus for board of directors' members:

Each year general assembly may decide to allocate a defined fraction of special profit as bonus to
board of directors in compliance with latest corrections of law of commerce. This fraction must
be less than 5-percent of profit which is paid to the stakeholders at the same year.

Article 39- Deal between directors and the company:

Members of directors' board and CEO and institutes and companies in which they are member of
directors' board cannot deal with the company without ratification of the directors' board directly
or indirectly. Law of commerce specified verdict for such bargains.

Article 40- Allocating loans and credits to directors:

Company CEO and members of directors' board, except legal persons, have not the right to get
any loan or credit from company and company cannot guarantee their debts. Such operations are
invalid automatically. This prohibition includes representatives of legal person in board of
directors and also spouse, father, mother, grandparents, children, grandchildren, brother and
sister of people mentioned in this article.
Article 41- Competition of directors with the company:

Directors and CEO cannot conduct such deals which contains compete with company operation.
If a director violates from regulations of this article and this violation causes loss for company,
he/she will be responsible for that. Loss means causing damage or decreasing benefit.

Article 42- CEO:

Board of directors have to select a person among or out of the board and determine his/her
authority, salary, duty period and other related issues. Board of directors can assign some of the
items mentioned in article 37 to the CEO. CEO is the representative of the company for the
authorities assigned to him/her and has the right to sign behalf of the company. If CEO is a
member of the board his/her duty period will not be longer than other director's duty period.
CEO cannot be head of the board simultaneously.

Note: Name, specification and authorities of the CEO must be sent to official registration
authority with the related minute of the board and it must be announced.

Article 43- CEO position vacancy:

If no one hold the position of CEO as result of resignation, removal, death or any other reason,
directors' board must select another person as CEO in compliance with content of articles of
association in a one-month period of time. If the process of selection elongates more than a
week, directors' board has to assign and temporary agent with the responsibilities and authorities
of the CEO.

Article 44- Credible signature:

All the documents and papers with commitment will be signed by the persons assigned by board
of directors. Name of person allowed for signing documents will be sent to official registration
office via a minute to be published in gazette.

Chapter 6: Inspector
Article 45- Inspector selection:

Ordinary general assembly must select a main and a reserve inspector each year among audit
institutes trusted by SEO to conduct duties and responsibilities assigned in laws and regulations
and also specified in this article of association for one year.

Article 46- Inspector duties:

Moreover than legal responsibilities, inspector has the following duties:

1) Commenting on financial status reports according to national accounting and audit
standards and instructions and regulations ratified by SEO.
2) Presenting report to general assembly on directors/ compliance of laws and
regulations

Article 47- Inspector wage:

Ordinary general assembly determines wage for inspector. Inspector, directors, staff and their
dependents have not the right to receive cash, property or any benefit from the company, unless
ratified by general assembly, and cannot deal with company directly or indirectly.

Chapter 7: Company accounts

Article 48- Fiscal year:

Company fiscal year begins at March 20 and finishes at March 19 next year.

Article 49- Annual accounts:

Board of directors has to prepare company financial reports attached to a report on the activities
and overall status of the company not later than 3 months after each fiscal year and deliver it to
the inspector.

Article 50- Financial reports:

Financial reports of each fiscal year must be prepared not later than 4 months after each fiscal
year in order to present to ordinary general assembly.

Article 51- Legal and optional savings:

Legal saving is calculated from net profit of the company according to law of commerce.
Proposed by directors' board and ratified by ordinary general assembly part of special profit can
be saved for making specific savings.

Chapter 8: Company dissolution and liquidation

Article 52- Optional items for company dissolution:

Proposed by the directors' board, extraordinary general assembly can vote for company
dissolution. Report of directors' board must include reasons and factors referred to which
members of directors' board propose for dissolution. This report must be delivered to the
inspector prior to review in the assembly and inspector must present his/her comments on the
report in the assembly. Decision making on the proposal of the directors' board in the assembly
without listening to inspector comments in not possible. Extraordinary general assembly for
company dissolution is credible if at least 75 percent of the shareholders participate there.

Article 53- Liquidation

If company dissolution took place according to the above article, process of liquidation will be
followed in accordance to the related laws and regulations.
Chapter 9: Other issues

Article 54- Regulations of securities exchange

While TCI name is listed among SEO accepted companies all the organs of this company has to
comply regulations of SEO.

Article 55- Unforeseen affairs:

Items unforeseen by this document are covered by law of commerce, IRI law of securities market
and other laws and regulations.

Article 56- Content of the article of association:

This article of association includes 56 articles and 11 notes and ratified by extraordinary general
assembly in August, 2, 2008. Any change in content of this document requires approval of SEO