AFGHANISTAN SEED AND CROP IMPROVEMENT SITUATION

ANNEXES

ANNEX I

THE AFGHAN SEED COMPANY
Articles of Association

(NOTE: This organization is now known as the Improved Seed Enterprise)

(translated by A.R. Manan, May, 2002)

Date: Wednesday 27 Zamari Asad 1355 (18/8/1976)

Decree (597) Dated 3/5/1355 ( 25/7/1976) of the Prime Minister on approval of Afghanistan Seed Company.

This Articles of Association is composed of 11 chapters and 32 articles as follows.

CHAPTER 1: DEFINITIONS

Article 1: In this Articles of Association, the following terms shall have the following meanings:

Multiplier: Persons and organizations which are working in the production and multiplication of improved seed with the agreement of the Afghan Seed Company.

Retailer: Persons or organizations which are distributing seed to farmers and buyers who will plant the seed.

Seed Type: Plant material which by its growth habit, stem, fruit, seed and/or other characteristics, can be distinguished from other strains of the same crop. For example Mexipak wheat, Chenab, etc.

Germination: The percentage of the seed's germination capacity; i.e., when planted under normal conditions, are capable of producing healthy seedlings.

Weed Seed: Seed, bulbs, tubers and roots of plant species, which within the country, have been designated as weeds.

Date of Germination: month and year in which seed germination has been tested in an appropriate laboratory.

Seed Origin: The region or area in which the seed were produced.

Seed Treatment: Protecting seed by the application of appropriate agro-chemicals for the control of insects and diseases.

Breeder Seed: Seed which were directly controlled and produced by the responsible breeder or research station, and constitutes the base of basic seed for multiplication.

Basic Seed: Seed of the first generation which were produced under special conditions from Breeder mother seed.

Certified Seed: Seed which are produced from pure basic seed under special conditions and which are then distributed to farmers for planting.

Improved Seed: Better-quality seed, including Basic and Certified seed.

Company: The Improved Seed Company established hereunder.

CHAPTER 2: ESTABLISHMENT AND AIMS

Article 2: In accordance with this Articles of Association, a Company by the name of (Improved Seed Company) as a government Company is herewith established.
The central office of the Company is in Kabul city. Branches and representatives in are in Kandahar , Helmand ,Ghazni and Baghlan Provinces and other branches and representatives, according to the needs, may be established in other provinces.

Article 3: The objectives of the Company are:

The production of basic and certified seed in Tarnak , Marja, Sarday, and Larkhabi multiplication farms initially, and in other provinces as needed.
The production of certified seed on contract grower farmer fields, which is carried out under special conditions.
Cleaning the seed so produced, using the Company's processing machines.
Laboratory quality analysis of the seed in the Company's seed testing laboratories.
Distribution of the seed through the Company's authorized retailers to farmers according to the procedures and regulations established for this purpose.

Article 4: For the implementation of its objectives and programs, the Company may raise funds from the selling of shares, government subsidy, internal and external loans and with aid from other sources after obtaining approval of the High Council of the Company and the permission of the government.

Article 5: The Company shall permit the distribution of certified seed under a loan through the agricultural bank and/or other organizations.

Article 6: The Company may distribute seed through intermediary representatives or directly to farmers in the different provinces, in accordance with separate guidelines.

Article 7: In addition to its own activities , the Company may work in other related fields such as establishment and operation of fruit nurseries and animal husbandry farms for the benefit of the Company, after approval by the Company's High Council.

CHAPTER 3: PRODUCTION AND DISTRIBUTION OF IMPROVED SEED

Article 8:Persons or organizations desiring to produce certified seed of different crops shall first obtain a permit from the Company in accordance with the regulations established by the Company.

Article 9: Persons or organizations desiring to work in the production of certified seed shall obtain official permits at the beginning of each year.

CHAPTER 4: LABELING REQUIRED ON SEED BAGS AND CONTAINERS

Article 10: The following information shall be clearly written on each seed bag or container:

1. Kind and variety of seed.
2. Net weight.
3. Origin or the place of production.
4. Percentage of weed seed.
5. Percentage of germination.
6. Date of laboratory analysis and testing of planting quality of the seed.

Article 11: The following information shall be clearly written on each bag or container of treated seed:

That the seed has been treated.
Names and type(s) of chemicals used to treat the seed.
If the seed has been treated with mercury or similar chemicals, each bag or container shall be labeled with the word "toxic" in red bold letters.
If the seed is treated with other chemicals which do not include mercury, each bag or container shall be labeled "seed should not be used for human or animal consumption.

CHAPTER 5: ORGANIZATION

Article 12: The Company shall be controlled and administered by the following bodies:

1. High Council
2. Board of Operators
3. The Board of ControlCHAPTER 6: HIGH COUNCIL

Article 13: The Company's High Council shall be composed of the following persons:

1. Minister of Agriculture, as Head of the Council
2. Members of the Council shall include:

a. Minister of Finance
b. Minister of planning
c. Director of Agricultural Extension
d. Director of Agricultural Research
e. President of Agricultural Bank
f. President of the Fertilizer Company
g. President of the Agricultural Cooperative

3. President of this Company shall be a member and Secretary of the High Council.

Article 14: A meeting of the High Council shall take place on request of the Board of Operators. A quorum of an official meeting is in effect when at least 5 member s are present. Decisions shall be made on the basis of a majority vote of the members present. Each member shall have one vote. In case of a tie vote, the president shall cast the deciding vote. Decisions of the High Council shall be recorded and kept on file in the office of the secretary, and shall take effect immediately upon being signed by the president and present members.

Article 15: The High Council shall have the following duties and authorizations:

Determination of policies and general procedures of the Company in accordance with the objectives of this Articles of Association.
Appointment and discharge of the Company president.
Appointment and discharge of deputies of the Company as requested by the Company president.
Establishment or abolition of offices and branches of the Company in the center and provinces.
Approval of guidelines and procedures for accomplishing the activities of the Company in the following areas:

·Determination of salary, wages and other remuneration paid to employees.
· Employment, changing, promoting ,discharging and other administrative actions relating to employees of the Company.
· Other duties and authorizations as required to carry out the activities of the Company.
Determination of sources of funding for the Company, from different sources.
Determination of the amount of subsidy which should be provided by the government, and proposing this to the government.
Taking decisions on matters proposed by the Board of Operators.
Determination of buying and selling prices of improved seed, discount allowed to retail sellers, and decisions on guidelines relating to their activities, as requested the Board of the Operators.
Analysis and finalization of the Company's budget, balance sheets, and calculation of the annual gain and loss, and report thereupon to the Board of Control.
Finalization of importing the required improved seed for multiplication on Company farms from outside of the country; and finalizing multiplication and distribution of improved seed to different provinces of the country.
Determination of authority of cash expenditures, and signing of contracts proposed by the Board of Operators of the Company.

CHAPTER 7: COMPOSITION OF THE BOARD OF OPERATORS

Article 16: Management of the Company in implementing its goals and activities according to policies determined by the High Council shall be according to guidelines of the Board of Operators as established herein.

The Board of Operators shall be composed of the following members:

1. President of the Company shall be President of the Board of Operators.
2. Technical Deputy of the Company.
3. Administrative and Finance Deputy of the Company.

Article 17: Duties of the Board of Operatorss: The Board of Operatorss, individually or collectively shall be responsible for their duties and actions to the High Council'

Article 18: The Board of Operatorss shall devote all their efforts and time to the operation and progress of the Company, and shall not work in other agency or organization for financial benefit.

Article 19: The Board of Operators shall obtain approval of the High Council and shall work according to the Company's guidelines and procedures in performing their duties.

Article 20: The Board of Operators shall have the following authority and tasks:

Preparing the plan and program of work of the Company and getting its approval from the High Council.
Adoption of the Company work plan.
Preparation of the annual budget and its submission to the High Council.
Submission to the High Council of semi-annual progress reports on implementing the work plan of the Company.
Employment, appointment ,changing and discharging Company staff.
Reprimanding and punishment of Company staff.
Tasks and authorities not otherwise specifically assigned by this Articles of Association shall be vested in the Board of Operators.

Article 21: The Company shall be represented by the President of the Company or his specifically-appointed delegate in matters of justice and judicial proceedings.

CHAPTER 8: THE BOARD OF CONTROL

Article 22: The Board of Control shall becomposed of two members, one delegate each from the Ministries of Agriculture and Finance.

Article 23: The Board of Control shall perform the following tasks:

1. Audit the account of the Company and compare its annual balance sheet to determine profits and losses.
Analysis of the condition of the Company and giving proposals for its improvement.
Audit the cash on hand and stock of the Company.
Observe the performance of the Company from the standpoint of its adherence to this Articles of Association.

Article 24:The Board of Control, in the performance of its duties, shall be responsible to the High Council.

CHAPTER 9: FINANCIAL MATTERS

Article 25: The initial funding of the Company is 500 million Afghanis, which isallocated to 5,000 shares, with the value of one share in the amount of 100,000 Afghanis. These shares are allocated to the following organization and authorities in the amounts of:

1. Ministry of Agriculture: 2,500 shares
2. Ministry of Planning: 1,000 shares
3. Ministry of Finance: 1,000 shares
4. Afghan Fertilizer Company: 200 shares
5. Agricultural Bank: 300 shares

Article 26: The fiscal year of the Company shall begin from first of Hamal and end at the end of Hoot of the same year.

Article 27: The annual balance sheet of the Company shall be prepared at the end of the financial year, and within the first 3 months of the next year, shall be submitted for evaluation by the Board of Control, and submitted to the High Council.

CHAPTER 10: DISSOLUTION OF THE COMPANY

Article 28: Dissolution of the Company may take place upon proposal of the High Council and after approval by the Council of Ministers.

Article 29: The Company shall be dissolved in case of the following:

If the High Council determines that the Company is not successfully able to achieve its aims, a proposal of cancellation shall be submitted to the government.
In case the government takes a decision to cancel the Company.
After such cancellation, the Company is cleared.

CHAPTER 11: MISCELLANEOUS MATTERS

Article 30: The Minister of Agriculture is responsible for the implementation of this Articles of Association.

Article 31: Problems or conditions not anticipated in this Articles of Association shall be resolved in accordance with applicable laws of the government and the principle of the commerce.

Article 32: This Articles of Association takes effect after its printing in the Official Gazette.