file_download ENGLISH
REPORT
العربية

ZAIN HOMEPAGE

BOARD OF DIRECTORS

BOARD OF DIRECTORS
MESSAGE

2018 AT A GLANCE

KEY MILESTONES

VICE CHAIRMAN & GROUP
CEO STATEMENT

GROUP KEY PERFORMANCE
INDICATORS

OPERATIONS OVERVIEW

A YEAR IN REVIEW

THE WORLD OF ZAIN

OPERATIONS SNAPSHOT

REGULATORY LANDSCAPE

OUR STRATEGY

TOGETHER WE ARE ZAIN

TECHNOLOGY

ZAIN DRONE

COMMERCIAL

CORPORATE
SUSTAINABILITY

ANNUAL CORPORATE
GOVERNANCE REPORT

CONSOLIDATED ANNUAL
FINANCIAL STATEMENTS
AND INDEPENDENT
AUDITOR'S REPORT

Table of Contents

ANNUAL
CORPORATE
GOVERNANCE
REPORT

Mobile Telecommunications Company K.S.C.P. (Zain) continuously works to adhere to the best practices of governance in all its operations and to maximize value for shareholders and other stakeholders. Zain aspires to be a leader in the Kuwaiti market in this field, to comply with the requirements of different stakeholders and to improve the level of its operations and disclosures to the highest standards.

The Board of Directors provides the strategic plans necessary to develop and review the company's vision and objectives. Therefore, the Board determines the strategic direction of the company by adopting the company's strategy, vision, mission, business plans, capital structure, financial objectives, organizational structure, functional structures and policies.

The Board is committed to creating long-term benefits for stakeholders while ensuring that the company's operations are conducted in an ethical, legal and responsible manner towards the environment and society. An effective governance framework enables all stakeholders to better understand, plan and implement strategies in response to challenges and risks arising from changes in laws, markets, and financial and operational factors.

The Corporate Governance Framework is best implemented by an effective and knowledgeable Board of Directors. The Board consists of a group of experienced members who are committed to their roles, including dealing with the issues presented by Executive Management, and discharging their responsibilities towards shareholders.

The company's business is carried out by the company's executive management led by the CEO with the supervision of the Board.

The Fundamental Principles of the Corporate Governance Framework are followed at various levels of business, including operations outside of Kuwait, in line with the instructions of the Capital Markets Authority (CMA), and other regulatory bodies and in compliance with the leading practices in governance.

The Board of Directors ensures the protection of the interests of shareholders, customers, employees and other stakeholders, and maintains an effective, positive and productive working environment. The Board's efforts in this area during 2018 have been highlighted through several agreements in digital transformation, which correspond to the migration of technological developments in the field of communications and the application of a digital lifestyle compatible with best practices in the global markets.

Zain is committed to transparency when communicating with stakeholders in order to guarantee the integrity of its operations. In this report we will highlight the most important steps taken during 2018 to balance the achievements and interests of the company and stakeholders at various levels.

RULE I: CONSTRUCT A BALANCED BOARD COMPOSITION

ABOUT THE BOARD OF DIRECTORS

One of the most significant changes during 2018 was the amendment to the Articles of Association of the Company in the Extraordinary General Assembly on 15 March 2018 and the addition of a ninth member to the Board of Directors. Pursuant to this amendment, elections were held in the Ordinary General Assembly on 28 March 2018. The Board of Directors was restructured as follows:

COMPOSITION OF THE BOARD OF DIRECTORS
NAME
CLASSIFICATION
EDUCATION
PROFESSIONAL
EXPERIENCE
DATE OF ELECTION/
APPOINTMENT
Ahmed Tahous Al Tahous Chairman
Non-executive
Bachelor’s Degree in
Business
Administration
34 years in the banking
and investment sectors in
the global and Kuwaiti markets
12 Mar 2017
Bader Nasser Al-Kharafi
Vice Chairman & Group CEO
Executive
Master of Business
Administration
Industrial and banking sector, Investment and business sectors, Non-profit institutions, Telecommunications and mechanical engineering sector
12 Apr 2011
Talal Said Al Mamari
Non-executive
Bachelor’s Degree in Business Administration
Finance experience in the telecommunications sector
15 Oct 2017
Mehdi Mohamed Jawad Abduwani
Non-executive
Bachelor’s Degree in Economics
Post-graduate diploma
29 years in communications, economic planning, banking, corporate management,
finance, energy, industry, Sectors of tourism and maritime transport
19 Dec 2017
Saud Ahmed Abdulkarim Al Nahari
Non-executive
Postgraduate Diploma in Port Management
Economic and commercial sectors, insurance, port management and corporate governancee
19 Dec 2017
Martial Antoine Marcel Caratti
Non-executive
Bachelor’s Degree in Finance
and Accounting
30 years of financial experience In the telecommunications sector in the Middle East and Europe
19 Dec 2017
Nigel Kevin Govett
Non-executive
Bachelor of Arts in History
20 years in Investment, Finance, Telecommunications, Strategies, Acquisitions, Fellow of the Chartered Accountants Association
19 Dec 2017
Abdulrahman Mohammad Ibrahim Al Asfour
Independent
Independent
Bachelor’s Degree in Business Administration
– Accounting Major
Technical expertise in the application of IT solutions,
audit and finance
28 Mar 2018
Yousef Khaled Al-Abdulrazzaq
Non-executive
Bachelor’s Degree in Business Administration
– Finance Major
Audit and investment expertise within the general reserve sector and investment funds
30 May 2018
Hatmal Farouq Al Qadi
Secretary
Master of Laws (L.L.M)
Legal Consultancy Telecommunications sector
12 May 2015
BOARD OF DIRECTORS’ MEETINGS
NAME
MEETING (1)
7/2/2018
MEETING (2)
28/3/2018
MEETING (3)
10/5/2018
MEETING (4)
31/7/2018
MEETING (5)
7/11/2018
MEETING (6)
11/12/2018
TOTAL
ATTENDED
Ahmed Tahous Al Tahous
Chairman
6
Bader Nasser Al Kharafi
Vice Chairman and Group CEO
6
Talal Said Al
Mamari
6
Mehdi Mohamed Jawad Abduwani
6
Saud Ahmed Abdulkarim Al Nahari
6
Martial Antoine Marcel Caratti
6
Nigel Kevin Govett
6
Abdulrahman Mohammad Ibrahim Al Asfour
Independent1
N/A
5
Yousef Khaled Al-Abdulrazzaq2
N/A
N/A
4

The table includes all board meetings held during the year.

1 Mr. Abdulrahman Mohammad Al Asfour joined Zain Group Board of Directors on 28 March 2018.

2 Mr. Yousef Khaled Al-Abdulrazzaq joined Zain Group Board of Directors on 30 May 2018 as a representative of Kuwait Investment Authority (KIA).

MANAGEMENT OF BOARD MEETINGS

The Secretary of the Board of Directors shall be responsible for assisting the Chairman in all matters relating to the Board, including coordinating, organizing and attending Board meetings, ensuring compliance with all relevant regulatory requirements, preparing the agendas and sending invitations to Board meetings. The Secretary provides the members of the Board of Directors with the agenda at least three working days prior to the meeting of the Board, excluding emergency meetings. All decisions and discussions of Board members are recorded, in addition to the results of voting sessions at Board meetings. The secretary is the custodian of all documents relating to board affairs.

The Board Secretary ensures compliance with procedures adopted by the Board, which relate to providing information to members, committees and executive management, under the supervision of the Chairman. The Secretary obtains approval by the Board to distribute decisions to the concerned departments for implementation and follows-up on the implementation of the Board’s resolutions.

In addition, the Secretary of the Board carries out the same responsibilities with regards to the Board Committees which include the preparation and issuance of agendas and invitations to meetings as per the approval of the Chairman of the Committee and providing the supporting documents to each member of the Committee.

These procedures include recording the attendance of members at all meetings, preparing the minutes for each meeting of any committee and presenting it to the chairman of the concerned committee and its members for approval.

RULE II: ESTABLISH APPROPRIATE ROLES AND RESPONSIBILITIES

THE ROLES AND RESPONSIBILITIES OF THE BOARD OF DIRECTORS AND EXECUTIVE MANAGEMENT

In accordance with the Company’s Memorandum and Articles of Association, the Board of Directors has been delegated with the responsibility for the effective leadership of the Company in order to raise its value in a profitable and consistent manner. The corporate governance framework includes charters defining the responsibilities of the board of directors, its members, and its committees.

The Board of Directors formed committees in accordance with the charters which define the duration of the Committee, its authorities and responsibilities, and the manner of the Board's oversight thereof. The charters also include the committees’ functions, rights and duties. The board also evaluates the performance of these committees and their members. The committees must report to the board the results and decisions with absolute transparency.

The Board of Directors is the key decision maker in the areas of strategy, policy, planning, finance, auditing, governance, compliance, risk management and internal control. The Board aims to ensure fair treatment of all shareholders, in accordance with regulatory requirements. In addition, the board ensures that transparent procedures for regulating the relationship with shareholders are in place.

The Executive Management is appointed by the Board of Directors. The Board selects members of the executive management based on competencies and capabilities that ensure that the Company's strategy is consistent with the expected performance to maximize the value of stakeholders. Therefore, the executive management follows the policies and regulations adopted by the Board. The Board holds periodic meetings with the executive management to discuss the operations, obstacles and opportunities. Accordingly, performance standards are set for executive management consistent with the company's objectives and strategy.

Each member of the Board and Executive Management acts in the best interests of shareholders, the Company and the stakeholders, in compliance with the Code of Conduct of the Board and the Executive Management. The Company has detailed the responsibilities of the Board of Directors including independent, executive and nonexecutive members. In addition, responsibilities and duties of the Board Committees and the Executive Management have been defined.

BOARD ACHIEVEMENTS IN 2018

Amendment of the company's Articles of Association during the Extraordinary General Assembly on 15 March 2018.

Approval of the company's financial statements for 2017 and recommending a dividend of 35 fils.

Approval of the Group's new strategy, which determines the future direction of its operations and seeks investment opportunities that will enhance cashflows.

Continuous support to Zain Saudi Arabia with its business plans and strategies which have contributed to its turnaround and the achievement of record and historical financial indicators since its inception.

Approval of an agreement with a group of regional and international banks to refinance a five-year credit facility of US $ 700 million, which will be used for general purposes serving the Group's strategy.

Assisting Zain Saudi Arabia in refinancing and extending its SAR 5.9 billion (US $ 1.57 billAssisting Zain Saudi Arabia in refinancing and extending its SAR 5.9 billion (US $ 1.57 billion) Murabaha contract for a period of five years, up to 30 June 2023 providing additional liquidity to fund its business growth plans focused on digital services.

Ongoing support and consultation with Zain Saudi Arabia in seeking the best options for its operational model have been instrumental in advancing the discussions on the sale and leaseback of the towers, a step aimed at increasing the focus on increasing the network's operational efficiency, and expansion of investments with higher returns in the future.

Establishment of Zain Innovation Center (ZINC) in Kuwait as part of the Group's efforts in its digital transformation strategy, at the company's headquarters, as one of the leading incubators for local and regional entrepreneurship initiatives.

As part of the Board's quest to provide complementary and parallel services, the Company has launched its new operating entity, "Zain Drone", opening up new opportunities for the wide use of UAV technology in the Middle East and Africa.

BOARD COMMITTEES
Board Risk Committee

Formed: 12 May 2015

Term: Membership period is the same as the term of the Board of Directors, and not more than three years, renewable.

Responsibilities:

The responsibilities of this committee include reviewing and adopting risk strategies, risk management and overall risk governance and submitting them to the Board for final approval. The Committee shall ensure that the Company does not exceed the risk tolerance levels approved by the Board of Directors and that any irregularities in this regard shall be submitted to the Board.

The responsibilities of this committee include reviewing the risk management structure of the company, the tasks, responsibilities and methodologies prepared and making recommendations to the Board of Directors for approval on annual basis. The Committee reviews and ensures the adequacy of the risk management function, ensuring the availability of resources and infrastructure, and the efficiency of information systems and access to information in such a way that the risk management function can effectively assume the functions entrusted to it.

The responsibilities and authorities of the committee have been defined in the internal charters according to the applicable laws and regulations.

Achievements of BRC during 2018

Reviewed policies and procedures and ensured compliance with leading global standards.

Ensured compliance with the Capital Markets Authority's risk management requirements.

Increased risk awareness at the company and its subsidiaries by enabling a risk management culture.

Discussed and approved the principles and criteria for risk assessment and monitored the effectiveness of management controls on a regular basis.

Reviewed and assessed the performance of subsidiaries in risk management, and the extent of coordination between risk units in subsidiaries.

Reviewed risk management reports and submitted them to the Board for discussion and definition of an action plan accordingly.

Committee Members:

Saud Ahmed Abdulkarim Al Nahari (Committee Chairman)

Bader Nasser Al-Kharafi

Talal Said Al Mamari

Number of committee meetings in 2018: 3

MEMBER
MEETING (1)
10/5/2018
MEETING (2)
31/7/2018
MEETING (3)
7/11/2018
Saud Ahmed Abdulkarim Al Nahari (Committee Chairman)
Bader Nasser Al Kharafi
Talal Said Al Mamari
Board Audit Committee

Formed: 9 June 2011

Term:Membership period is the same as the term of the Board of Directors, and not more than three years, renewable.

Responsibilities:

The Committee's responsibilities include assessing the adequacy of internal control systems applied within the Company and preparing reports containing the Committee's opinion and recommendations in this regard, including: 1. Data Protection. 2. Accounting and financial control tools and business risk management control system. 3. Effectiveness of the overall governance framework. 4. legal and ethical compliance, and appointment of external consultants if required.

The Committee is also responsible for the technical supervision of the internal audit function at the company in order to ensure its efficiency in the tasks entrusted to it by the Board of Directors. In addition, the Committee reviews and evaluates the performance of external auditors and makes recommendations about their services to the Board.

The Committee reviews the periodic financial statements before submitting them to the relevant regulators, in addition to the supporting notes and disclosures in the report and ensures that they reflect the appropriate accounting standards and principles.

Achievements of BAC during 2018

Monitored the work of the Internal Audit Department for the year 2018.

Followed-up with the internal audit function on a quarterly basis and worked on the implementation of corrective measures of the observations contained in the reports.

The Internal Audit Department evaluated the corporate governance framework which includes the board and its committees. Accordingly, a gap report was prepared and recommendations to address areas of development were made and documented. The gap report was submitted to the Audit Committee in November. The final matrix that reflects the best governance standards in Zain will be completed by early 2019.

All departments were instructed to keep the Internal Audit Department informed of any fraud incidents occurring in any of the Group companies within one week, in accordance with the rules of governance.

Reviewed the Internal Audit reports and submitted them to the Board for discussion and to determine the action plan accordingly.

As of the beginning of 2019, consideration should be given to overcoming medium-level risks when calculating the annual bonuses for the executive management of subsidiaries, which was previously set on high-level risks.

Approved the Internal Audit Plan for 2019.

Prepared the Audit Committee report, which shall be read by the Chairman of the Board during the General Assembly.

Committee Members:

Martial Antoine Marcel Caratti (Committee Chairman)

Nigel Kevin Govett

Abdulrahman Mohammad Ibrahim Al Asfour (independent)

Yousef Khaled Al-Abdulrazzaq

Number of committee meetings in 2018: 4

MEMBER
MEETING (1)
7/2/2018
MEETING (2)
9/5/2018
MEETING (3)
30/7/2018
MEETING (4)
6/11/2018
Martial Antoine Marcel Caratti (Committee Chairman)
Nigel Kevin Govett
Abdulrahman Mohammad Ibrahim Al Asfour
(Independent) Joined on
28 Mar 2018
N/A
Yousef Khaled Al-Abdulrazzaq
Joined on 30 May 2018
N/A
N/A
N/A
Ahmad Tahous Al Tahous
(Al Tahous was appointed the chairman of the board during
Q1-2018, and Martial Caratti was appointed as the committee chairman)
N/A
N/A
N/A
Board Nominations and Remunerations Committee

Formed:12 May 2015

Term: Membership period is the same as the term of the Board of Directors, and not more than three years, renewable.

Responsibilities:

This committee is responsible for nominating and re-nominating members of the Board of Directors and the Executive Management. It also conducts an annual review of the required skills and competencies in the Board of Directors and Executive Management, considering the Company's approved strategic objectives and corporate governance rules issued by the Capital Markets Authority. In coordination with the Executive Management, the Committee shall prepare the succession plan for the Executive Management, including emergency cases or unexpected vacancies to ensure the sustainability of the company's business.

The Committee maintains a training system to develop the skills of employees. The committee also evaluates the performance of the executive management and facilitates the evaluation of the board of directors. The Committee also plays a key role in the remuneration of the Board and the Executive Management in accordance with applicable rules and regulations.

Achievements of BNRC during 2018

Reviewed the company's strategy and policy regarding remunerations and nominations, and discussed the mechanism of bonus distribution for 2018 and submitted them to the Board of Directors for approval.

Reviewed the salaries and benefits report of the executive management.

Identified required training programs for Board members and submitted them to the Board of Directors for approval.

Monitored the evaluation of the Board and the Executive Management and submitted the results to the Board.

Worked with the relevant departments and committees to identify the required competencies in the company according to regulatory requirements.

Prepared the remuneration report according to regulatory requirements and submitted it to the Board for approval and to be read during the General Assembly.

Committee Members:

Mehdi Mohamed Jawad Abduwani (Committee Chairman)

Bader Nasser Al-Kharafi

Talal Said Al Mamari

Abdulrahman Mohammad Ibrahim Al Asfour (Independent)

Number of committee meetings in 2018: 2

MEMBER
MEETING (1)
25/3/2018
MEETING (2)
29/5/2018
Mehdi Mohamed Jawad Abduwani
(Committee Chairman)
Bader Nasser Al Kharafi
Talal Said Al Mamari
Abdulrahman Mohammad Ibrahim Al Asfour (Independent)
Joined 28 Mar 2018
N/A

Relationship between the Board of Directors and the Executive Management

The Board of Directors shall have direct and unrestricted access to the executive management and shall receive periodic reports from the Company's executive management. The Board may request any information from any of the Company's employees from time to time. The members of the Board shall have the authority to conduct any investigations into any matter of the Company.

The Board of Directors has delegated some of its duties to the committees of the Board of Directors, executive management or executive committees based on documented decisions. Such delegations shall not be general or indefinite. These delegations do not exempt the Board from its responsibility to ensure an effective, comprehensive governance framework that provides transparency in the company. The Board may also invite the management of the Company or its employees or any external party to attend its meetings, in order to obtain information, recommendations or clarifications as required.

The Board supervises the performance of the Executive Management and ensures that they operate in accordance with the policies and regulations. The Board also holds periodic meetings with the executive management to discuss obstacles and problems, and to review important information related to the company's activity.

In addition, the Board of Directors approves and develops internal policies and charters, ensuring transparency and clarity, and separating the authorities between the Board and the executive management.

The management ensures that the Board and its committees are informed of all material information related to their responsibilities immediately.

RULE III: RECRUIT HIGHLY QUALIFIED CANDIDATES FOR THE MEMBERS OF A BOARD OF DIRECTORS AND THE EXECUTIVE MANAGEMENT

ABOUT THE BOARD OF DIRECTORS
Ahmed Tahous Al Tahous – Chairman

Ahmed Al-Tahous is a member of the Board of Directors of Zain Group. He holds a Bachelor's degree in Business Administration with a specialization in Economics from Kuwait University. Al-Tahous has over 34 years of experience in the banking and investment sectors internationally and in Kuwait. Al-Tahous is the Executive Director of the Marketable Securities at Kuwait Investment Authority (KIA), the oldest sovereign wealth fund in the world. He has also been the Chairman of the Board of Directors of Touristic Enterprises Company since 2011.

Talal Said Al Mamari – Board Member

Talal Said Al Mamari has been a member of the Board of Directors of Zain Group since October 15, 2017. He holds a Business Administration degree from Duke University - Pittsburgh - Pennsylvania, USA. Al Mamari has been the Chief Executive Officer of Omantel since June 29, 2014. Prior to his appointment as CEO, Al-Mamari has held a number of leadership positions at Omantel, most recently as Chief Financial Officer. He has been involved in several major projects and initiatives, including the initial public offering to sell part of the government's stake in the company, the company's restructuring project through the integration of fixed telecommunications services, and mobile telecommunications services in one entity, and then the completion of Oman Mobile's legal merger with Omantel. Talal Al Mamari also managed the acquisition of Omantel's 9.84% of the capital of Zain Group, which was completed on 24 August 2017.

Talal Al Mamari is a member of the board of directors at a number of investment companies and funds, most importantly, his board membership at Oman Governance Center and Al-Amal Investment Fund.

Bader Nasser Al Kharafi – Vice Chairman and Group CEO

Bader Al-Kharafi is one of the most active business leaders in the Middle East and Africa, with an exceptional record in business development and consultancy projects for large firms and international organizations. Al-Kharafi holds the presidency and membership of several Boards in industrial and banking sectors. Bader holds an Executive MBA from London Business School and holds a Bachelor’s degree in Mechanical Engineering from Kuwait University. Al-Kharafi is the Chairman and Managing Director of Kuwait based Gulf Cables & Electrical Industries KSC, a Board Member of Foulath Holding B.S.C., a Board Member of Refreshment Trading Company (Coca-Cola), and a Board Member of Gulf Bank. Al-Kharafi was appointed to the Middle East Advisory Board of Coutts, the wealth division of the Royal Bank of Scotland Group.

Mehdi Mohamed Jawad Al-Abduwani – Board Member

Mehdi Al-Abduwani officially joined Zain Group on November 13, 2017. He is a member of the Board of Directors of Oman Telecommunications Company (Omantel) since 2005. Mr. Al- Abduwani is the CEO of National Ferries Company (NFC), a subsidiary of Oman International Logistics Group. The company specializes in shipping and manages a fleet of high-speed crafts (HSCs) in addition to other models to transport passengers, vehicles and landing ships. He was selected within the best 100 CEOs in the Arab world, at the “Arab Best“ awards in 2017, while NFC received the Arab Best Company award in maritime transport. Mehdi Al-Abduwani has diverse interdisciplinary experience gained over 29 years in domains such as communications, economic planning, banking, corporate management, finance, energy, and the industrial field. He holds a BA in Economics from Yarmouk University in Jordan, a postgraduate degree in development planning techniques from the Netherlands. He also has a significant presence in the management of public shareholding companies, as well as membership of the Board of Directors of Zain Group and Omantel Group, He is the Chairman of the Board of Directors of the Computer Stationery Industry (CSI) and the International Maritime College in Oman. He is also a Board Member of several other companies

Saud Ahmed Abdulkarim Al Nahari – Board Member

Saud Ahmed Al Nahari joined Zain Group on 13 November 2017. He is currently Chief Executive Officer of Port Services Corporation SAOG (Sultanate of Oman). He holds a Post-graduate Diploma in Port Management. He is a Deputy Chairman in Oman United Insurance Co. SAOG and board member in Oman Al Arabi Fund. He has extensive management experience and is familiar with corporate governance systems and a board member licensed by the Capital Market Authority in Oman

Nigel Kevin Govett – Board Member

Nigel Kevin Govett officially joined Zain Group Board of Directors on 13 November 2017. Govett is the Chief Financial Officer of Oman Investment Fund having joined on 1st October 2014 with 20 years of experience in the Investment and Finance sectors having begun his career in the UK. Prior to joining Oman Investment Fund Govett was a Director for EQT Partners, the Swedish based private equity organization with excess of 45 Billion Euros of raised capital. Govett has played an active role in a number of strategic telecom sector initiatives and acquisitions carried out by Oman Investment Fund. He is a senior member of the OIF Investment Committee.

He sits on the boards of several companies as well as the charity Outward Bound Oman. He is a Fellow of the Association of Chartered Certified Accountants and holds a Bachelor of Arts Degree in History from University of Sunderland, UK.

Abdulrahman Mohammad Ibrahim Al Asfour – Independent Board Member

Abdulrahman Mohammad Al Asfour joined Zain Group Board of Directors on 28 March 2018. He has expertise in applying IT solutions which he gained as an ERP consultant at EQUATE Petrochemical Company, a global producer of petrochemicals and the owner and single-operator of several fully integrated world-class petrochemical complexes in Kuwait, North America and Europe.

Moreover, his career included an auditing role in the petroleum industry at the State Audit Bureau of Kuwait where he was assigned. He also served as a board member at WABA medical insurance company. Al Asfour is the Chief Executive Officer of Alpha Group Holding Company. Al Asfour holds a Bachelor's degree in Business Administration with a major in Accounting from Kuwait University. He has also completed multiple certifications in SAP systems in addition to other finance and accounting courses.

Martial Antoine Marcel Caratti – Board Member

Marital Caratti has been a member of Zain Group since 13 November 2017. He joined Omantel in 2015 as Group Chief Financial Officer. Caratti has more than 30 years of experience in the telecom industry in the Middle East and Europe. He began his career in 1986 at NCR in France, an Omni-channel technology provider. He continued his career in the telecommunications sector in France, where he served as CFO at a subsidiary of France Telecom from 1992 to 1996.

In 1996, he became France Telecom Group’s Controller of customer branches and Financial Director at Itineris, part of the France Telecom / Orange Group. Between 2000-2006, he served as Vice President of Finance - Content Division at Orange Group France, along with the role of Orange International Finance Vice-President in London. In 2007 he joined KAZ Europe as CFO of EMEA region. Thereafter between 2008 and 2015 Caratti served as CFO for a Tunisian telecom operator. He holds a Bachelor's degree in Finance and Accounting from ESLSCA University in Paris.

Yousef Khaled Al-Abdulrazzaq– Board Member

Yousef Khaled Al-Abdulrazzaq joined Zain Group Board of Directors on 30 May 2018 as a representative of Kuwait Investment Authority (KIA). Joining the KIA in 2006, he is currently an investment manager within the General Reserve Sector under the local equities department. Al-Abdulrazzaq holds office as Board Member and other key roles in several Kuwaiti entities. In 2010, he was involved in the Kuwait Airways privatization project. Since 2005, Mr. Al- Abdulrazzaq has been the Investment Manager in the Private Equity and Local Investment Funds Unit of the KIA. Since 2012, he has been a member of the Board of Directors at Touristic Enterprises Company where he also serves as Member of the Executive Committee and Chairman of the Audit Committee. Since 2015, he also served as a member of the Board of Directors and Chairman of the Audit Committee and Chairman of the Human Resources Committee at the Public Utilities Management Company, Kuwait, a fully owned subsidiary of the KIA.

Over the years, Al-Abdulrazzaq has attended numerous accredited training courses and conferences. Al-Abdulrazzaq holds a Bachelor's degree in business administration with a major in Finance from Kuwait University.

ABOUT THE EXECUTIVE MANAGEMENT AT ZAIN GROUP
Scott Gegenheimer – Chief Executive Officer – Operations

Scott Gegenheimer joined Zain Group in December 2012 bringing with him outstanding international experience in the telecom sector, in the USA, Eastern Europe, the Middle East and Africa. His leadership style drives efficiency and effectiveness, with a focus on value creation and business development. He holds a Bachelor of Science degree in Finance and Management from Northern Illinois University and an MBA from DePaul University in Chicago. He has recorded numerous achievements in the telecommunications sector, and has presided over many of the telecommunications companies in the Middle East and North Africa. Gegenheimer has also held leadership positions across global and international companies. He was appointed a Board member of the GSMA for the period 2017 to 2018.

Kamil Hilali – Chief Strategy Officer

Hilali was appointed Chief Strategy Officer of Zain Group effective March 2018. In this role, Hilali is responsible for the development and implementation of Zain’s corporate and growth strategy, including business development, strategic investments and portfolio management. With 15 years of track record in Strategy, Mergers and Acquisitions, Corporate Development and Portfolio Management, Hilali comes to this important role within Zain Group with excellent leadership capabilities, solid technical skills and business acumen. Hilali joined Zain Group in 2011 as Corporate Finance and Business Planning Director.

Hilali attained his Master's in Finance from London Business School (UK), his MBA from Suffolk University (USA) and holds a Bachelor’s degree in Industrial Engineering from the National School of Mineral Industry (Morocco). He is a Board Member of INWI Corp, Morocco based telecom operator.

Duncan Howard –Chief Commercial Officer

Duncan Howard was appointed to this role effective July 2014. He oversees all commercial, marketing, branding and advertising areas across Zain’s regional footprint. Howard came to Zain with 20 years’ experience in mobile, television and fixed telecom across the Middle East, Europe and North America. Howard holds an MBA from the Open University, UK and attained a BA (Hons) System Analysis from the University of West of England.

Firas Oggar – Head of Legal

Firas joined Zain Group in November 2017 as Group Head of Legal. With a career spanning over 18 years, Firas has worked for conglomerate organizations in the Middle East and France. Firas has immense experience of senior in-house roles in the Middle East, having had four roles in the position of either head of legal or general counsel since moving on from his private practice career. More recently, Firas has been recognized in 2015 and 2017 as one of the GC Powerlist: Middle East (formerly the Corporate Counsel 100) by the publication The Legal 500. Firas is a Board member and treasurer of the Association of Corporate Counsel (ACC), Middle East Chapter. Firas is a qualified lawyer before the Paris Bar in France and holds a Master's degree from the University of Paris in International Business Law.

Venkatesh Jandhyala –Chief Internal Auditor

Venkatesh Jandhyala was appointed Chief Internal Auditor of Zain Group effective April 2014, 10 years after joining Zain. Rising through the ranks within Zain Group, Jandhyala is a dynamic professional with over 24 years of proven leadership track record within telecommunications and consulting firms, having worked in complex business environments in the Americas, Europe, Africa, Middle East & Asia. Jandhyala has a Bachelor of Commerce and Law degrees from Osmania University, Hyderabad, India and has received a scholarship for a dual degree in Master of Science in International Finance and an MBA in Finance and Marketing from the University of Miami, USA. He also has a Chartered/Board Secretary diploma from India.

Ossama Matta –Chief Financial Officer Ossama Matta was appointed CFO of Zain Group in June 2010. With more than 20 years of finance and management experience in the Middle East, he attained an MBA from the American University in Beirut and is a Certified Public Accountant. Matta joined the Group in 2004 as the CFO at Zain’s management operation in Lebanon, then known as "MTC Touch". Subsequently Matta was promoted to Chief Financial Officer at Zain Kuwait in early 2008, and again promoted to the role of Zain Group Chief Finance Officer

Hisham Allam – Chief Technology Officer Hisham Allam was appointed the role in December 2011 having over 20 years of experience in the fields of information technology and telecommunications. Prior to his appointment, Allam was the Chief Operating Officer of Zain Sudan, having joined the operation in May 2003 as Chief Technology Officer. Allam holds a Bachelor of Science in Electronics Engineering degree from the University of Kent in England.

Mohammad Abdal – Chief Communications Officer Mohammad Abdal was appointed Chief Communications Officer of Zain Group in July 2015, heading three significant divisions within Zain Group: Investor Relations, Corporate Communications, and Corporate Governance & Compliance. Over the past 18 years Abdal has risen rapidly through the organization; playing a key role in various aspects of the company’s success. In 2005 Abdal joined Zain Group from Zain Kuwait. Abdal is a founding member and Chairman of the Middle East Investor Relations Society chapter in Kuwait and a member of the globally recognized National Investor Relations Institute (NIRI). He graduated in 2001 from Portland State University, Oregon, US with a Bachelor of Science in Business Administration with a double major in Finance & Management Information Systems.

Dr. Andrew Arowojolu –Chief Regulatory Officer Dr. Andrew Arowojolu was appointed Group Chief Regulatory Officer, effective October 2016. He liaises with Regulatory Authorities across the company’s eight-country footprint. A seasoned telecom executive with over 25 years of experience and a proven track-record in the telecom industry across the Middle East, Europe, Africa and Asia. Arowojolu joined Zain in 2003 and holds a Doctorate degree (Ph.D.) in Mobile Radio Communications (1994) and an M.Sc., (Distinction) in Microelectronic and Telecommunications from University of Liverpool, United Kingdom (1991) and a B.Sc. (First Class) in Electrical and Electronic Engineering from the University of Lagos (1988).

Abdul Ghaffar Setareh –Chief Risk Officer Appointed to the role in January 2016, Abdul Ghaffar Setareh is an accomplished corporate executive with over 30 years of operational, engineering, insurance and risk management experience in mobile telecommunications and technology sectors across the Middle East and Africa. Setareh graduated with a Telecommunications Engineering degree from the Ecole Nationale des Telecommunications, Rabat, Morocco in 1984..

BOARD NOMINATIONS AND REMUNERATION COMMITTEE (BNRC)

Please refer to Rule II of this report, which contains all information on the functions and achievements of the Committee as well as the composition and meetings.

REMUNERATION REPORT FOR THE BOARD AND EXECUTIVE MANAGEMENT

The Board of Directors designs the remuneration policy. This policy sets the basis for the remuneration of the Board of Directors and the Executive Management and its compatibility with the objectives and performance of the Company. The policy reflects the objectives of the company and takes into account the integrity of its operations and its financial position. This policy is part of the corporate governance framework. The Board implements this policy through the Nominations and Remuneration Committee (BNRC).

The Company's remuneration policy was created in accordance with the following principles:

1. Link rewards to the degree of risk.

2. Attract and retain the best professionals.

3. Ensure equality within the company and competitiveness outside.

4. Comparison of performance levels in the market using analyses received from specialized consulting firms in the area.

5. Ensure transparency in awarding bonuses.

6. Link to performance indicators (KPIs) for Board members and Executive Management.

7. Be consistent with the Company's strategy and objectives both long-term and short-term

8. Match the experience and qualifications of the company's employees at different levels of employment.

The remuneration policy of the company determines the reward system in line with the objectives of the company, shareholders and stakeholders. This policy reflects standards and principles of best practices in good governance based on the relevant regulatory requirements.

The BNRC is responsible for the implementation of this policy. It is also responsible for reviewing the policy on an annual basis and when necessary, taking into consideration the extent of compliance with the laws and guidelines issued by the relevant regulatory bodies such as the Capital Markets Authority and others. The Committee submits proposed policy amendments to the Board for approval.

The Board of Directors is keen to promote the principles of effective governance within the company's remuneration system. The Board of Directors, through the Nomination and Remuneration Committee, continues to prepare and update the remuneration policy in line with the Company's strategy and overall risk framework.

The executive management is responsible for designing the staff reward system in accordance with the approved policy, as well as the responsibility of following up the implementation of the approved system.

The KPIs are based on the Company's overall strategy and are approved by the Board of Directors. The Executive Management implements this strategy and reports thereon to the Board of Directors on a regular basis.

BOARD REMUNERATION

The total Board remuneration shall not exceed 10% of the net profits of the Company (after depreciation, reserves and payment of dividends to shareholders not less than 5% of the Company's capital or any higher percentage, as provided in the Articles of Association of the Company).

The Board remuneration is approved during the Annual General Meeting of shareholders as per the recommendations of the BNRC, and by the Board of Directors.

In 2018, the total remuneration granted to the Board members was KD 420,000 subject to shareholders’ approval at the Annual General Meeting.

EXECUTIVE MANAGEMENT REMUNERATION

The Executive Management Remuneration System takes into consideration the environment in which the company operates, the results achieved and the company's risk tolerance, and includes the following key components:

Fixed Remunerations

Fixed remuneration is determined by the level of responsibilities assigned and the specific career path of the executive member at the Company. The remuneration index is established for each job, reflecting the value to the Company.

Fixed remuneration is reviewed by the Nomination and Remuneration Committee (NRC), in coordination with the relevant departments if necessary (i.e. human resources) on an annual basis to reassess the total remuneration package, market conditions, and performance of divisions across the company.

Fixed remunerations including salaries, allowances and benefits (and end of service indemnity) are awarded under the approved salary and grading structure by the Board of Directors, the applicable laws and regulations and the manual of contractual agreements of employees issued by human resources.

Variable Remunerations

Variable remunerations are linked to the achievement of predefined goals.

This type of remuneration is designed to motivate and reward Executive Management members. Variable bonuses are allocated based on the individual performance of the Executive Management member and the overall performance of the Company.

Variable remuneration in Zain can comprise of two elements: annual variable remuneration (variable remuneration granted to employees on an annual basis) and multi-annual variable remuneration (variable remuneration granted to employees over multiple years indicating that the Board of Directors focuses on short and long-term objectives).

There are two types of annual objectives: financial indicators (financial targets to be achieved by the Company and departments during the fiscal year) and non-financial indicators (non-financial operational objectives to be achieved by the Company through activities and processes such as product introduction, entering a specific investment, etc.).

BALANCE BETWEEN FIXED AND VARIABLE REMUNERATION

The Company ensures that there is an appropriate balance between fixed and variable remuneration to allow for the possibility of reducing variable remuneration in the case of weak or adverse financial performance. The percentage of fixed and variable remuneration is reviewed and determined annually by the Board of Directors based on BNRC recommendation.

Category
No. of
Employees
Fixed
Remuneration
(KWD 000’)
Variable
Remuneration
(KWD 000’)
Total
(KWD 000’)
Executive Management at Zain Group
10
2,393
1,814
4,207

RULE IV: SAFEGUARD THE INTEGRITY OF FINANCIAL REPORTING

BOARD AUDIT COMMITTEE

Please refer to Rule II of this report, which contains all information on the functions and achievements of the Committee as well as the composition and meetings.

INDEPENDENCE AND IMPARTIALITY OF THE EXTERNAL AUDITOR

The internal charters and policies of the Company reiterate applicable laws and regulations, emphasizing the importance of external auditors’ independence. Therefore external auditors do not perform any additional work that may affect their neutrality and independence.

The Audit Committee shall recommend to the Board of Directors the appointment, reappointment or change of the external auditor, in addition to determining their fees and reviewing their letters of appointment. The external auditor is appointed by the Ordinary General Assembly as per the recommendation of the Board of Directors. The following requirements must be met when appointing the external auditors:

The external auditor is a licensed auditor by the CMA and has fully met all registration requirements stated by the CMA.

The external auditor is independent and does not perform additional tasks that may affect neutrality and independence.

The Audit Committee approves in advance the type of services provided by the external auditor (audit or other) and the required fees, and ensures that the external auditor has identified procedures necessary to change the external auditor periodically.

Accordingly, Deloitte and Touche (Al Wazzan & Partners) has been appointed to perform the functions required by the Independent External Auditor. We would like to confirm that Deloitte is not doing any additional services for the Company.

ABOUT DELOITTE & TOUCHE (AL WAZZAN & PARTNERS)

Deloitte & Touche employs 286,200 professionals worldwide, and enjoys a globally connected network of member firms in more than 150 countries where it provides audit, consulting, financial advisory, enterprise risk, and tax services. Deloitte & Touche (M.E.) is a member firm of Deloitte Touche Tohmatsu Limited (DTTL) and is the first Arab professional services firm established in the Middle East region with uninterrupted presence since 1926 with more than 3,000 staff working in over 26 offices in 15 countries in the Middle East.

In Kuwait, Deloitte & Touche Al Wazzan & Co. has a strong audit practice serving leading enterprises and institutions in telecommunications, banking, aviation, insurance, construction, trading, manufacturing, energy and resources. The Kuwait audit practice has approximately 10 partners, principals and directors, and more than 110 dedicated audit professionals.

RULE V: APPLY SOUND SYSTEMS OF RISK MANAGEMENT AND INTERNAL AUDIT

The role of the Board of Directors is to oversee the proper application of internal control and risk management systems through the Risk Committee and the Audit Committee. The Board must also ensure, through the relevant committees, that the Internal Audit and Risk Management Department operate appropriately and independently in accordance with the relevant regulatory requirements.

In accordance with applicable regulations and laws, risk management reports to the Board Risk Committee. The Internal Audit Department reports to the Board Audit Committee.

BOARD RISK COMMITTEE

Please refer to Rule II of this report, which contains all information on the functions and achievements of the Committee as well as the composition and meetings.

INTERNAL CONTROL SYSTEMS

The Board of Directors is responsible for establishing the governance framework and for monitoring the effectiveness of its implementation in a manner designed to protect shareholders' rights and increase the company's value. Based on the regulations and guidelines issued by the Capital Markets Authority, the Company has appointed BDO (Al Nisf & Partners), the Kuwait Member Firm of BDO International to complete the Internal Control Review.

RULE VI: PROMOTE CODE OF CONDUCT AND ETHICAL STANDARDS

PROFESSIONAL CONDUCT AND VALUES:

The Company maintains a Code of Business Conduct for the Board of Directors, in addition to the employee Code of Conduct which is applicable to all departments and management levels. The company has also developed internal policies and charters conforming to the laws and regulations. Board members ensure that the interests of customers, employees and other stakeholders are protected, and they maintain an effective, positive, and productive working environment.

The Board of Directors, Executive Management and all employees follow the Code of Business Conduct while assuming the duties and responsibilities assigned to them. Moreover, they conform to the Company’s values such as honesty and integrity, maintaining the confidentiality of information and allocating sufficient time to assume responsibilities.

CONFLICT OF INTERESTS:

Each member of the Board of Directors and Executive Management shall be responsible for disclosing to the Board any cases that may result in a conflict between their interests and the interests of the Company. The Board shall monitor and deal with cases of conflict of interest reported by the members of the Board, the Executive Management or the Company's employees and ensure that such cases have been dealt with in an appropriate and timely manner with the necessary approvals in accordance with the relevant regulatory requirements.

The Conflict of Interest policy applies to the Board of Directors, the Executive Management, and all employees in accordance with the company's professional conduct and principles, to ensure that any cases of conflicts of interest may not negatively affect the interests of the Company, stakeholders and related parties. All employees of the Company comply with the requirements of this policy, the instructions of the Capital Markets Authority, the Companies Law and other relevant laws and regulations.

RULE VII: ENSURE TIMELY AND HIGH-QUALITY DISCLOSURE AND TRANSPARENCY

DISCLOSURE MECHANISMS AND CHARACTERISTICS

The Company is committed to providing accurate disclosures of all material information, while ensuring fairness and equality of access to such information. The Board of Directors monitors the process of disclosure and communication with stakeholders within and outside the Company and ensures that all disclosures are fair, comprehensive, transparent, clear, accurate and timely, reflecting the nature and extent of the risks inherent in the Company's business activities.

The Corporate Governance and Compliance Department is responsible for overseeing the disclosure process in accordance with the requirements of the Capital Markets Authority and applicable laws and regulations. Accordingly, The Corporate Governance and Compliance Department provides any clarification or advice regarding the disclosure requirements of the Capital Markets Authority. The Corporate Governance and Compliance Department is responsible for communicating with and responding to CMA's inquiries and related regulatory authorities.

DISCLOSURE RECORDS

The company has retained the essential information and disclosures within the internal electronic library, which facilitates the work of the concerned departments and organizes the information in such a way as to ensure that the information is available to the concerned persons in a timely manner. The electronic library includes a record of all disclosures, such as disclosures of directors, executive management and insiders, which are amended as required. Any person may access this register during official working hours without charge. The Company periodically updates its data.

The company's official website contains a record of all the company's market disclosures, which dates back to more than eight years.

INVESTOR RELATIONS

The Investor Relations team includes multiple competencies and expertise, ensuring easy communication with potential shareholders, potential investors, analysts and the media. The Board adopted a policy to regulate the communication with shareholders and investors to ensure compliance with all legal and regulatory requirements. The main principles of this policy are: protecting shareholders’ rights, communicating with shareholders, and disclosure of material information to shareholders. Material information is provided to shareholders through appropriate disclosure means such as periodic reports, annual report, company website, Kuwait Stock Exchange website (Boursa Kuwait), quarterly analyst calls and related Investor relations conferences.

THE MAIN OBJECTIVES OF INVESTOR RELATIONS

1. Establish consistent and reliable channels of communication with investors in compliance with relevant regulations and laws, including those issued by the CMA and the Commercial Companies Law of the State of Kuwait.

2. Strengthen the company's position in the market and attract shareholders and investments.

3. Establish a link between Executive Management and the financial community with a view to strengthening the relationship of Executive Management with analysts and stakeholders.

4. Provide financial and non-financial information related to the company to the Board of Directors, Executive Management, shareholders and analysts.

IT INFRASTRUCTURE AND DISCLOSURE PROCESSES:

The company's website includes all the disclosures which date back to more than eight years. The website also includes the periodic financial reports, in addition analyst reports and other facts and indicators.

The website contains the information of the board of directors, the executive management and the company's code of conduct, as well as the main principles and values that support the company's operations.

The CMA is addressed by e-mail (in addition to mail) to provide the required information and disclosures.

The company follows the electronic system of disclosures through the Boursa Kuwait website, in order to update disclosures and data.

The company's intranet includes an electronic library that contains all the details and information, which are easily accessible at any time with the correct credentials.

RULE VIII: RESPECT THE RIGHTS OF SHAREHOLDERS

PROTECTION OF SHAREHOLDERS’ RIGHTS

The Company is committed to ensuring that all shareholders exercise their rights fairly. In addition, the Company is committed to protecting shareholders' assets from any misuse by the Company's Executive Management, Board of Directors or key shareholders. The Company treats all shareholders of the same class equally and without any discrimination, in line with the Company’s interests, and in accordance with the laws and regulations. The Company is committed to providing the following rights to the shareholders:

Record the value of ownership in the register of shareholders with Kuwait Clearing Company (KCC).

Disposal of shares through registration of ownership and / or transferring

Receipt of cash and share dividends.

Acquiring a share of the Company's assets in case of liquidation (after payment of all debts of the Company).

Obtaining data and information about the Company's business and its operational and investment strategy on a regular basis.

Participation in meetings of the General Assembly of shareholders and vote on its decisions

Election of Board members.

Monitoring the performance of the Company in general and the work of the Board of Directors in particular.

Accountability of Board Members or Executive Management, if they fail to perform the tasks assigned to them.

Shareholders also receive information and data in accordance with the laws. Shareholders are entitled to access the information contained in the Company's disclosure records.

SHAREHOLDERS’ REGISTER AT THE KUWAIT CLEARING COMPANY (KCC)

In April 2004, Zain signed an agreement with the Kuwait Clearing Company (KCC) to maintain a record of its shareholders with the KCC. Accordingly, the KCC provides the following:

Create an index for all shareholders, which includes the names, trading numbers, number of shares and nationalities.

Update the data according to all trading activities on the KSE.

Perform all procedures for transfer of ownership in addition to buy/sell transactions after obtaining all the required approvals from the regulatory authorities.

Track procedures for lost/damaged certificates and the related issuance of new ones.

Distribute cash dividends and stock splits.

Provide the company with shareholders’ balance reports on a daily/monthly basis.

Provide the company with the profits reports on a daily/monthly basis.

Provide the company with unclaimed dividend reports on a monthly basis.

Distribute outstanding share certificates, issue new shares for heirs, and register them.

Record mortgage transactions on company’s shares.

Prepare AGM invitations in coordination with the company.

Allow shareholders to obtain the company’s information or documents in compliance with laws and regulations.

SHAREHOLDERS’ VOTING AND PARTICIPATION AT THE AGM

The Company encourages all shareholders to participate in the Annual General Meetings (AGM) and to vote on all resolutions adopted by the Assembly, including the selection of the members of the Board of Directors. Any class of shareholders is entitled to attend the meetings of the General Assembly without paying any fees for their attendance.

The Board of Directors invites all shareholders to the AGM, in accordance with the laws and regulations. When organizing the general meetings of the shareholders, the Company includes the agenda and the date and place of the meeting in the invitation. The company provides all information related to the agenda items well in advance of the General Assembly, in particular the reports of the Board of Directors, the external auditor and the financial statements.

The Company encourages shareholders to actively participate in the General Assembly, discuss the issues on the agenda and related inquiries, and ask questions thereon to the members of the Board of Directors and the external auditor. The Board of Directors or the external auditor shall answer the questions to the extent that they do not jeopardize the interests of the Company.

Shareholders are provided with access to all the data contained in the disclosure register of the members of the Board and the members of the Executive Management without any fees. Shareholders are also entitled to access the minutes of the AGMs.

RULE IX: RECOGNIZE THE ROLES OF STAKEHOLDERS

THE PROTECTION OF STAKEHOLDERS’ RIGHTS

The oversight and supervisory role of the Board is one of the most important components of the effective governance framework. The Board therefore has the primary responsibility for protecting the rights of stakeholders. Briefing the Board on any developments in the Company's internal and external environment is important and essential, providing the Board with the ability to intervene immediately if necessary. The executive management is responsible for the day-to-day management of the company's operations and the implementation of its strategy. Therefore, it is a key responsibility of the board to select the executive management members who can carry out these tasks efficiently. The Board of Directors shall carry out its supervisory duties either directly or through its committees.

One of the most important principles for protecting the rights of stakeholders is equality. This principle is based on easy and regular access to information and data about the company.

The Code of Business Conduct of the Board of Directors, Executive Management and staff includes guidelines for compliance with the laws governing the Company's operations to protect the rights of stakeholders. The company is committed to protecting the rights of all stakeholders, maximizing their value, and achieving stability and continuity by ensuring a good financial position for the company. The stakeholder protection policy has been designed to identify parties considered stakeholders for the company and to develop guidelines on how to protect their rights.

STAKEHOLDER PARTICIPATION AND FOLLOW UP OF THE COMPANY'S ACTIVITIES:

For the Board to be able to discharge its responsibilities successfully, effective and communication channels must be in place to build the necessary confidence among stakeholders, executive management and the Board of Directors. Financial reports must be prepared in a timely manner in accordance with the regulations of the CMA and any other regulatory bodies. The Company provides information, data, the required books, records and tools from the relevant stakeholders in accordance with applicable regulations and laws.

The Company shall provide information and disclosures in a timely and accurate manner in accordance with the requirements of the CMA and any other regulatory bodies. The company also invests in information technology in order to provide alternative means of communicating with stakeholders and electronic services to enhance the experience of dealing with the company.

The Company is subject to a set of laws, regulations and guidelines issued by the relevant regulatory bodies. It is the responsibility of the Board of Directors to ensure that the Company complies with these laws, regulations and instructions. The Company also guarantees the protection of the rights of stakeholders. It also expects all stakeholders to fulfill their obligations under the contracts.

RULE X: ENCOURAGE AND ENHANCE PERFORMANCE

BOARD TRAINING AND DEVELOPMENT PLAN

All members of the Board are committed to allocating sufficient time to perform the tasks assigned to them. Accordingly, all members allocate time to review any material / reports related to the meetings of the Board or any of the committees of which they are members. They also review the performance reports received from the Board Committees and the Executive Management and make recommendations on any problems to the Board; the members commit to the proposed development plan as by the Nomination and Remuneration Committee as it provides an added value in relation to the interests of the Board of Directors and the company. As a result of the Board's assessment process, a training plan is prepared for all members covering all development needs identified during the evaluation process.

BOARD ASSESSMENT AND VALUE CREATION EFFORTS TO ACHIEVE STRATEGIC GOALS

The periodic assessment enables the Board of Directors to assess the efficiency and effectiveness of the Board in discharging its responsibilities. Since the Board of Directors determines the general climate of professional and ethical conduct within the organization, it is necessary to regularly assess the governance and performance of the Board. This provides the Board with a comprehensive overview of performance and allows the Board to fill the gaps through the planned training plan and work to improve the performance of the Board and its supervisory capacity. This process will help in solving the company's problems and challenges related to governance and compliance which is in the best interest of shareholders and stakeholders.

The assessment of the Board of Directors is also a means of improving performance and reducing constraints that may prevent the full implementation of their responsibilities. The Board of Directors adopted a new, more neutral and independent method of assessing the performance of the Board, Members and Committees, which is the third-party evaluation. The third-party evaluation is an independent evaluation conducted by a neutral, seasoned third-party. The objective of this assessment is to provide an unbiased assessment of the operations of the Board of Directors. This assessment helps the company to raise the efficiency and improve the performance of the Board and its members and committees, which is reflected on the performance of the company as a whole. Such an assessment helps the Company to identify potential problem areas, improve its ability to manage risks related to Board performance, and measure Board performance indicators against governance standards and applicable legal and regulatory requirements.

RULE XI: FOCUS ON THE IMPORTANCE OF CORPORATE SOCIAL RESPONSIBILITY

The aim of the Corporate Sustainability Policy is to ensure that the Sustainability strategy and direction is imbedded to achieve the company’s goals and targets in a holistic and inclusive manner. The purpose of the policy is to provide an official statement that affirms Zain’s commitment to achieving sustainable growth, socio-economic development while ensuring that its business processes are monitored and reported as well as to ensure that relevant community deficits and challenges are being addressed in an effective manner. In order to do so, the company provides and focuses on capacity building, youth and women empowerment, social innovation, job opportunities, poverty reduction, and addresses aspects of broadband connectivity that can lead to the abuse, trafficking, violence, and exploitation of children. Furthermore, the company states its alignment and commitment to the Sustainable Development Goals which is a global agenda set by the United Nations. Therefore, the company adjusted the responsibility matrix where the Chief Sustainability Officer is determined to ensure that the company’s Corporate Sustainability Policy is in line with international best practices and standards on both an internal and external basis.

As with any policy, a revision was done during 2018 to ensure key developments in the area of sustainability were captured and included in the policy. For Zain, the policy is a key document that provides guidance and frames the company’s sustainability approach in relation to its business activities, stakeholders, and communities. The revision of the CS Policy was made in alignment to the latest developments that reflect issues associated with rapid changes and advancements in technology (fourth industrial revolution and technological disruptions) related to mobile connectivity and associated socio-economic development.

SOME OF ZAIN’S CORPORATE SUSTAINABILITY ACTIVITIES/INITIATIVE/PROJECTS INCLUDE:
BAHRAIN
Zain Community Engagement Program

Established in 2018, the program aims to contribute to various areas such as health, the environment, gender equality, youth mentorship programs and capacity building. Zain Bahrain was able to establish several partnerships with organizations that included National Bank of Bahrain Elderly Home, Salmaniya Hospital, The Cancer Ward, Bahrain Society for Training and Development, Women Tech Makers, and Bahrain Philanthropic Society. During the year, Zain Bahrain was able to provide 69 volunteering opportunities with more than 80 employees participating in the various programs.

Google Developer Group Women Tech Makers

In partnership with Google Developers Group (GDG) Manama, Bahrain, Zain entered a memorandum of understanding that aims to further Zain’s leadership position in empowering women in the technology space. Through this partnership, Zain Bahrain will provide access to its facilities to host events and workshops, provide knowledge exchanging opportunities with Zain employees, and encourage and promote entrepreneurship and innovation in the field of technology. In 2018, 25 women participated in the GDG Women Tech Makers events and workshops.

IRAQ
Jameaty in partnership with Ministry of Education

In 2018, Zain Iraq launched the Jameaty initiative, which aims to fulfill the needs of the scientific and administrative departments in public and private universities. Through the initiative Zain Iraq distributed 1680 printers, more than 500 ZainFi devices, and 4800 e-Go devices. Additionally, e-Go modems were provided to high-achieving students in each university as a form of recognition for their hard work and accomplishments. Through this initiative Zain Iraq was able to fulfil social opportunities and improve the quality of education for students attending universities in Iraq.

Knowledge Space

Knowledge Space is a newly formed coding and technology developer space, which is a collaborative work space created to support the making, learning, exploring and sharing of knowledge in the fields of science, technology, engineering and math (STEM). This space is considered the first supporting facility for the ICT community in Kirkuk. Through this facility, training programs are being offered in topics such as 3D printing and data science.

KUWAIT
Zain Kuwait and Coded

Zain Kuwait, in partnership with Coded, created a training program for young people, which teaches coding and technology using robots, and arts and science, utilizing the latest tools and technologies. The four-week program covered introductory topics to coding and robotics such as block coding, text coding, python, coding logic, sensors, building a computer, and robotic controls. Some of the tools used included KANO Computer Kit, Sony KOOV Kit, Lego Boost, Lego Mindstorm, Cubetto, and Bottley. 39 students were trained through the Coded Junior Summer Camp.

Zain Kuwait Partnership with LOYAC

Zain and LOYAC’s strategic partnership is based on the development of the Education and Youth sectors in Kuwait. Through this partnership, Zain engages with various public, private, and non-profit organizations that cater to youth’s talents and skills, ultimately contributing to the further progression of the national economy. Zain has been able to support KON, a social entrepreneurship program that is offered in Kuwait in collaboration with Babson College in Boston. Another program established through this partnership is the IFAD Internship Program, where talented young Kuwaiti are sent abroad to learn from international experts. Lastly, LOYAC AC Milan Soccer School is a program that has become one of the leading soccer schools in the region over the course of its nine years of existence. Since inception, Zain’s partnership with LOYAC has been able to impact more than 52,000 students positively.

SAUDI ARABIA
MITEF Pan Arab Startup Competition

Zain’s annual partnership with MITEF Pan Arab Startup Competition aims to create opportunities for growth and development in the MENA region based on innovation and value creation. The competition, saw a local version hosted in Saudi Arabia, is divided into three main categories: Ideas, Startups, and Social Entrepreneurship. Each of these tracks has three winners who were awarded cash prizes and other benefits including training, mentorship, media exposure and networking opportunities. Various stakeholders supported the competition along with Zain KSA and included the General Authority for Small and Medium Enterprises; King Abdullah Economic City; King Khaled Foundation; Saudi Aramco Entrepreneurship Center Wa’ed; Saudi Investment Bank; Microsoft; Oracle, and others.

Cooperative Training

Zain Saudi Arabia is committed to upskilling, training and recruiting nationals, and as a result the company has collaborated with Saudi University to provide co-operative training opportunities for undergraduate students. Upon completion of the program, Zain Saudi Arabia was able to hand pick top performers to become full-time employees, providing them with meaningful employment. This year, the company hired 30% of those who completed the training program.

JORDAN
Mobile Clinic for Children

Ongoing since 2002, Zain Jordan’s Mobile Clinic provides health services for hundreds of children in remote areas across the Kingdom. The clinic offers free medical consultation, dental treatment and medication dispensed by a fully equipped and qualified medical team. To ensure children receive quality treatment, the clinic facilitates patient transfers to different health centers and hospitals under the Ministry of Health network of affiliates. Serving children up to the age of 15 years, the clinic treated 200,000 children in 2018.

Knowledge Station

In 2018, Zain Jordan provided connectivity to six knowledge stations across the Kingdom. This initiative was undertaken in collaboration with the National Information Technology Center in several governorates including Amman, Karak, Ma'an, Na'our, Jordan Valley and Irbid. Through the Knowledge Station, approximately 8,620 people are estimated to have benefitted from the services.

LEBANON
touch Innovation Program (TIP)

The touch Innovation Program’s objective is to create an initiative that supports startups, while nurturing a pool of high-potential entrepreneurs to be able to invest in. The selected “touch innovators” are offered benefits set to develop their ideas and businesses further. TIP identifies and selects 8-12 startups every year with six companies being selected to participate in the initiative every six months. Those selected entities are given access to touch Lab, touch’s flexible workspace that accommodates meetings, product launches, workshops, and training courses.

touch in partnership with Fe-male

touch, in partnership with Fe-male, established a nine-month training program targeting young girls and women in Bekaa and Akkar. This training program offered women part-time courses on ICT-related skills such as computer literacy, the use of smartphones, and social media tools. The participants were educated on cybercrimes, cybersecurity, and how to overcome online attacks. The program also extended to awareness raising sessions on women’s rights, business planning, entrepreneurship, leadership, public-speaking, decision-making, and self-assertion. 60 women have completed the training.

SUDAN
Student Meal Project

In collaboration with Mujdidoon Organization, Zain Sudan provided annual Iftar meals to ensure temporary food security for those who are less fortunate. Since its launch in 2011, 3,000 meals per day every year have been handed out to students in Khartoum. Every year, approximately 528,000 meals are given out to students in need, adding up to 4.22 million meals having been distributed during the life-time of the initiative.

ZainX

Established in 2017, ZainX is an annual event in which people with disabilities are given a platform to share their stories and experiences that shed light on the challenges they face. This year, more than 70 candidates from across Sudan applied to represent the disabled community in the event and eight representatives were selected. Two blind people participated, as did two deaf and mute people, two physically disabled participants, and two with developmental disorders such as autism. The TEDx inspired event attracted 700 attendees including three ministers and heads of universities and NGOs.

SOUTH SUDAN
Zain Youth Empowerment Initiatives (ZY)

Under the Zain Youth (ZY) Platform established in 2018, Zain South Sudan launched a variety of initiatives that aim to develop the youth through capacity building projects, programs in schools, and spreading awareness on inclusivity. This platform targets the youth segment from ages 18-30 years old. As such, stringent KPIs were put into place to measure the impact of the programs and ensure the targets are being met. Under ZY, Zain South Sudan launched an entrepreneurial business training program that targets some of the most vulnerable populations such as single mothers, girls who have dropped out of school, and Widows with HIV/AIDS. Moreover, on International Hand Wash Day the company organized an event to raise awareness on the importance of handwashing with soap as it is an effective and affordable tool that significantly minimizes diseases and illnesses. 15 schools participated in the event and 6,150 school children attended.