2016 Corporate governance report

Emirates Integrated Telecommunications Company PJSC P.O. Box: 502666 , Tel: + 971 (4) 360 0000 Email: [email protected] ‘Printed on Scheufelen FSC Code: March 2017 FSC- C009951 – 170 and 400 g/m2’ Corporate governance report 2016III Corporate governance report 2016

Table of contents

Subject Page

1. Overview 04 2. Share Dealing 06 3. Formation of the Board of Directors 07 Structure 07 Statement of female representation proportion 13 Statement for not nominating any females to the membership of the Board of Directors 13 Statement of the following: 13 Total remuneration paid to the Board of Directors for 2015 13 Proposed total remuneration paid to the Board of Directors for 2016 13 Detailed statement of meeting attendance allowances for the Board of Directors and its committees 14 Number of Board meetings held in 2016 14 Statement of the functions and terms of the Board of Directors carried out by Executive 15 Management as delegated by the Board of Directors Transactions with related parties 15 Our organisational structure 16 Statement of the Executive Management Compensation 21 4. External Auditor 23 Overview of external auditor 23 Statement of fees, costs and services provided by all external auditor firms in 2016 23 5. The Audit Committee 24 Members of Audit Committee and a statement of their tasks 24 Statement of date and number of meetings held in 2016 25 6. The Nomination and Remuneration Committee 26 Members of the Nomination and Remuneration Committee and a statement of its tasks 26 Statement of date and number of meetings held in 2016 27 7. The Investment Committee 28 Members of the Investment Committee and a statement of their tasks 28 Statement of date and number of meetings held in 2016 29 8. Insider Transactions Supervision Committee 30 9. Internal Control 31 The role of the Board of Directors in internal control 31 Name and qualifications of Internal Control Department Head 32 Name and qualifications of Compliance Officer 32 How internal control management addresses a serious issue 32 10. Violations 34 11. Contribution to Sustainability and Community Engagement 36 12. General Information 39 Performance of the company’s shares in the market in 2016 39 Performance of the company’s shares, compared with the general market index and the telecom 40 sector’s index in UAE for 2016 Breakdown of ownership of public shareholders as of 31/12/2016 42 Statement of shareholders who own 5% or more of the company’s capital as of 31/12/2016 42 Statement of distribution of shareholders according to the size of the property as of 31/12/2016 43 Statement of actions that have been taken to regulate shareholder relations 43 Statement of decisions presented at the General Assembly in 2016 and actions taken thereon 44 Statement of core events that the company experienced in 2016 44

Table of contents 03 Corporate governance report 2016 Corporate governance report 2016

1. Overview

As a business committed to delivering value, we In 2016, we reviewed the governance framework The effectiveness of our governance model relies including the Board of Directors and Committees as recognise that good governance is the foundation related to our Board of Directors, ensuring that on the distribution of duties and responsibilities illustrated in the chart below. to delivering long-term benefits for all of our our Board is able to carry out its responsibilities amongst shareholders, management and directors, stakeholders. Throughout 2016, our Board of effectively. We also encouraged our Board of Directors worked hard to develop a number Directors to fully participate in governance activities of frameworks that focus on the continuous to ensure their performance is in the best interest Regulatory Bodies improvement of our operations. Ensuring our of the organisation. Furthermore, to allow our Telecommunications Regulatory Authority, business is focused on efficiency allows us to protect shareholders and stakeholders to openly share Securities and Commodities Authority the success we have built whilst helping us achieve their opinions, we opened a number of channels External the UAE’s vision of a strong, innovative, technology- of communication with the Board. Auditors State Audit Institution and driven economy. External Auditor We believe in the importance of identifying and Our commitment to delivering best practice means nurturing future leaders, those from within our we also aim to exceed the regulatory limits for organisation, and also those we recruit externally. compliance. We believe this protects and adds As such, we have completed a formal review of our Internal Shareholders shareholders’ value and develops trust with our succession plan ensuring that each position is filled stakeholders. As such, we continually monitor best by the most qualified and experienced individual the Reports Appoints Appoints practice in the field of governance both regionally, role can accommodate. Company and internationally, to ensure we are always up to Board of Directors Secretary date with developments in this area. We seek to continually evolve our methods of communicating with our stakeholders to ensure Reports Appoints Reports to Chairman of Corporate Governance is the central mechanism that all those related to our business are kept up to Appoints Nomination & the Board Audit Investment for delivery of our values and principles, proving date in a timely and efficient manner. This means Internal Remuneration Reports to Committee Committee structures and practices that aim to protect the ensuring proper disclosure of our financial situation Control the Audit Committee interests of the company and its stakeholders by in quarterly statements to shareholders, investors Committee guaranteeing transparency and accountability. Our and the wider public. Reports Appoints commitment to governance is delivered throughout our organisation and as such, we reinforce In addition, as ever, we continue to strengthen our CEO the culture of solid business ethics across our decision-making process, to ensure we act in a departments and employees. truly socially considerate way. We are conscious Reports Appoints of the society around us and the part we play in it. In line with the administrative decision of the For example, we strive to be a fair and accountable Securities and Commodities Authority (SCA) Board of employer, one that places parity and equality at its Management Directors No. (7/R.M) 2016, regarding the institutional core, championing our senior women to progress discipline standards and governance of public joint and lead our teams. stock companies, we reviewed all of our governance policies to ensure our compliance. Furthermore, we In 2016, we facilitated a number of workshops for studied international best practice and implemented a our Board of Directors and Executive Management range of elements that complement the governance team, bringing them together to discuss the future of our business and culture. of our business in the context of developments in governance best practice. During the year, to preserve and protect our shareholder’s equity, we continued to evolve our One of these workshops focused on long- corporate governance practices, through regular term strategy and digital technology in the review of our processes, being mindful of any telecommunications sector. This event was supported regulatory developments in the global market. by Deloitte who offered solutions that would enhance our governance practices and overall performance.

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2. Share Dealing 3. Formation of the Board of Directors

Our share dealing policy applies to all individuals or a personal relationship with an employee. Our Board of Directors dedicates its efforts and 3.1 Structure working for us or any of our subsidiaries, at all All parties are required to commit to the policies experience to the advancement of the company’s In accordance with the Articles of Association, levels and grades, including members of the regarding share dealing of the company, which performance, in line with shareholder the Founder shareholders - Emirates Investment Board of Directors, Executive Management, senior include a statement of default consequences in and key partner aspirations. Authority, Emirates International Communications managers, and other employees. The policy also the event of non-compliance with the policy. Company LLC and Mubadala Development extends to all third parties who have access to critical Specified governance reporting and discussions are Company - have the right to jointly appoint eight information which may be share price sensitive due There were no trades by Board members or their delegated to the Board Committees which have members of the Board. to a contractual relationship with us or a subsidiary, first degree relatives during 2016. been formed in accordance with the Code of Corporate Governance and as otherwise The remaining two members are elected by public considered necessary or appropriate by the shareholders through cumulative voting in the Board. Each Board Committee reports their General Assembly every three years. recommendations to the Board of Directors, upon which the Board members have the authority to All members of our Board are non-executives. The individually vote in order to reach a democratic Board consists of eight independent non-executive decision on the basis of the recommendations. members and two non-executive members.

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Ahmad Bin Byat Khaled Balama Chairman Vice Chairman (Non-Executive) (Independent Non-Executive)

Ahmad Bin Byat is one of UAE’s most a global investment holding company, Khaled Balama has enjoyed a Beyond his role as Executive Director respected and successful corporate which operates in 24 countries from successful professional career of of the Real Estate Department at First Appointment leaders, renowned for his business around the world. First Appointment over 25 years, during which he held Abu Dhabi Investment Council, which 21/12/2005 acumen and visionary leadership. As 17/3/2015 various executive roles in prestigious he has held for almost a decade, a senior figure in many of the UAE’s Additionally, he holds several other organisations. Khaled Balama also holds the Representing leading organisations, he plays a key positions in leading organisations Representing following positions: Emirates International role in spearheading the country’s including: Emirates Investment He holds a Bachelor of Science in • Board Member of the Central Bank Telecommunications LLC drive towards the creation of a • Director General of Dubai Creative Authority Finance from Indiana University (USA), of the UAE knowledge-based economy. Cluster Authority as well as being a Chartered Financial • Board Member of the General • Member of the Board of Trustees Analyst (CFA) since 1995. Pension and Social Security His educational background, of Mohammed Bin Rashid School Authority leadership qualities and technology of Government skills have made him a highly • Vice Chairman of Zayed University resourceful and inspiring corporate • Board Member of Dubai Future leader. Foundation • Board Member of Dubai Free Zone He is currently the Vice Chairman and Council Managing Director of ,

Saeed Al Yateem Abdullah Al Shamsi Board Member Board Member (Independent Non-Executive) (Independent Non-Executive)

Saeed Al Yateem is a high ranking UAE of Finance, he is responsible for Abdullah Al Shamsi is a prominent He currently holds the following government official with over 20 years the supervision of the UAE Federal Emirati businessman with a wealth of position: First Appointment of experience in public service. Government Budgeting process and First Appointment experience in various industries. • Board Member of Dubai Islamic 21/12/2005 performance. 14/3/2007 Bank He holds a Bachelor’s degree in He holds a Bachelor’s Degree in Representing Political Science from the College of In addition to his role at the Ministry Representing Finance and Economics from New Emirates Investment Economic and Administrative Sciences of Finance Saeed Al Yateem holds the Public Shareholders York University (USA). Authority at United Arab Emirates University. following positions: • Board Member of the Arab Fund for As the current Assistant Economic and Social Development Undersecretary of Budget and • Board Member of Etihad Rail Revenues Affairs at the Ministry

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Ziad Galadari Mohamed Al Suwaidi Board Member Board Member (Independent Non-Executive) (Independent Non-Executive)

Ziad Galadari is the Founder and He also holds a number of other Mohamed Al Suwaidi has significant Previously, he has served as Principal of Galadari Advocates & positions including: experience serving as a Board Executive Director of the Fixed First Appointment Legal Consultants and has been • Member of the Board of Directors First Appointment Member for several organizations in Income Department at the Abu Dhabi 14/3/2007 practicing as an Advocate, Legal of the Dubai World Trade Centre 27/8/2012 the UAE. Investment Authority ‘ADIA’. Advisor and Arbitrator since 1983. • Member of the International Bar Representing Association Representing He holds a Bachelor’s Degree in In addition, he holds the following Public Shareholders He obtained a law degree from the • Member of the Chartered Institute Emirates Investment accounting from the United Arab position: UAE University. of Arbitrators Authority Emirates University. • Board Member of Arab Insurance • Tribunal Panel of the Dubai Group ‘ARIG’ Ziad Galadari is the Chairman of Technology and Media Free Zone Mohamed Al Suwaidi is currently • Board Member of Abu Dhabi Marina Galadari Investments LLC. and a the Executive Director of Asset Real Estate Investment member of the Board of Directors for Management at Emirates Investment Dana Gas. Authority.

Fadel Al Ali Hana Al Rostamani Board Member Board Member (Non-Executive) (Independent Non-Executive)

Accomplished businessman Fadel Beyond his role as Chief Executive Hana Al Rostamani has more than Hana Al Rostamani is currently Al Ali is recognised throughout the Officer at Dubai Holding, he also holds 15 years of experience in the field of the Head of Consumer Banking at First Appointment UAE for his expertise in corporate the following positions: First Appointment banking and financial services. First Gulf Bank, a leading financial 10/3/2009 governance and strategic • Chairman of Dubai International 25/5/2013 She has a Master’s Degree in institution in the UAE. commercial roles. Capital Information Management from the Representing • Chairman of Dubai Group Representing George Washington University (USA), She also currently holds the following Emirates International He graduated from the University • Board Member of the Dubai Emirates Investment and has also completed a Certificate positions: Telecommunications LLC of Southern California (USA) with a Financial Services Authority (DFSA) Authority in Bank Card Management from Visa • Chairperson of the Board of Aseel Bachelor of Science in Industrial and • Board Member of Dubai Properties International Association and the U.K. Finance Company System Engineering. He also holds Group Chartered Institute of Bankers. • Vice Chairman of Emirates Institute a Certificate of Finance from the • Board Member of Dubai Institute of for Banking and Financial Studies American University of Sharjah. Design and Innovation

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3.2 Statement of female representation Commodities Authority (SCA) item number 7, Homaid Al Shimmari proportion 2016 relating to the delegation of management when Board Member Gender diversity contributes to a balanced considering the cancellation of remuneration for (Independent Non-Executive) composition of the boardroom. Also the inclusion attending Board of Director meetings. Homaid Al Shimmari is the Chief • Chairman of Abu Dhabi Ship and participation of women throughout business The study included an examination of the Directors Executive Officer of Aerospace & Building operations contributes to the quality and remuneration policy and its division into several key First Appointment Engineering Services at Mubadala. • Board Member of Mubadala effectiveness of our Board’s decisions. As such, we components, including the method for determining a 23/12/2015 He is driving forward the strategic Petroleum are happy to report a 10% female representation on lump sum for each member and additional amounts vision and plans for developing • Board Member of Abu Dhabi our Board of Directors. linked to presence in meetings. It also studied Representing technologically advanced industries Aviation, Royal Jet, and AerCap participation and/or chairmanship of the member Mubadala Development within Abu Dhabi and the UAE. Holdings 3.3 Statement for not nominating any females in Board Committees. Company • Board Member of the UAE to the membership of the Board of Directors He graduated with a Bachelor of University In 2016, we did not open nominations for A new board remuneration framework has been Science in Aeronautical Engineering • Chairman of the Advisory Board of membership of the Board of Directors. introduced in 2016 and it relies mainly on board from Embry Riddle Aeronautical Etihad Airways Engineering LLC members retention fees. The new framework will be University (USA), and holds a black • Board Member of SR Technics 3.4 Statement of the following: implemented in 2017. belt in Six Sigma from General Electric. • Board Member of Masdar 3.4.1 Total remuneration paid to the Board of • Board Member of Global Directors for 2015 The Nomination and Remuneration Committee Homaid Al Shimmari also holds Foundries Inc In 2016, the General Assembly agreed that the Board reviews attendance and performance of Directors several other positions in several • Chief Executive Officer of Aerospace of Directors’ remuneration for 2015 should amount and Committee members in applicable meetings, prominent organisations including: & Engineering Services at Mubadala to a total of AED 9.656 million. This sum will be and submits its recommendations to the • Chairman of Emirates Defence • Member of the Investment distributed to all members of the Board of Directors Board. Upon approval by the Board, the final Industries Company (EDIC) Committee at Mubadala according to the agreed policy outlined in 2015. recommendation for aggregate Board remuneration • Chairman of Maximus Air Cargo is submitted for approval by the shareholders’ vote • Chairman of Abu Dhabi 3.4.2 Proposed total remuneration paid to the at the General Assembly. Autonomous Systems Investment Board of Directors for 2016 (ADASI) Board of Directors remuneration encourages the At the General Assembly in 2017, the Board retention of the board of directors’ members. In 2016 will recommend awarding AED 8,561,528 to be we appointed Willis Towers Watson, a leading global distributed to all members of the Board of Directors advisory firm, to conduct an analysis of structure of according to the agreed policy for 2016. Masood Mahmood our Board of Directors and the level of remuneration for its members. This is in line with Securities and Board Member (Independent Non-Executive)

Masood Mahmood brings with him a Engineering from Boston University wealth of experience having served on (USA), and holds an MBA in Finance First Appointment the boards of several companies from from McGill University (Canada). 18/12/2013 financial, industrial and manufacturing Masood Mahmood is the Chief industries as well as the real-estate Executive Officer of Yahsat. Representing sector. Mubadala Development He also holds the following position: Company He graduated with a Bachelor of • Board Member of Yahlive, a joint Science degree in Computer Systems venture of Yahsat & SES

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3.5 Detailed statement of meeting attendance allowances for the Board of Directors and its Board meetings dates and attendance of the members of the Board: Committees: Meeting Number Date Absence

Attendance allowances for the Board’s Committees sessions Board Meeting 1 29/2/2016 None Name Committee name Allowance amount Number of meetings Board Meeting 2 25/4/2016 Hana Al Rostamani

Nomination & Homaid Al Shimmari Khaled Balama 105,000 5 Board Meeting 3 31/5/2016 Remuneration Committee Proxy was given for Masood Mahmood Audit Committee and Khaled Balama Hana Al Rostamani 273,000 13 Board Meeting 4 28/7/2016 Investment Committee Proxy was given to Mohamed Al Suwaidi

Masood Mahmood Investment Committee 168,000 8 Board Meeting 5 28/9/2016 Hana Al Rostamani

Nomination & Saeed Al Yateem, Hana Al Rostamani Ziad Galadari 126,000 6 Board Meeting 6 31/10/2016 Remuneration Committee Proxy was given to Khaled Balama Hana Al Rostamani, Homaid Al Shimmari Audit Committee and Board Meeting 7 14/12/2016 Fadel Al Ali 273,000 13 Proxy was given to Masood Mahmood Investment Committee

Saeed Al Yateem Audit Committee 147,000 7 3.7 Statement of the functions and terms of Abdullah Al Shamsi Investment Committee 189,000 9 reference of the Board of Directors carried out There are specific cases where transactions conducted with a related party can be considered in the best Investment Committee by Executive Management as delegated by the interest of the company and its shareholders, and hence Mohamed Al Suwaidi and Nomination & 273,000 13 Board of Directors we adopted our related party transactions policy to Remuneration Committee Responsibilities held and exercised by the Board of provide a sound framework for the review and approval Directors are in line with administrative decision of the of these transactions. Securities and Commodities Authority (SCA) Board 3.6 Number of Board meetings held in 2016 issues and the decisions made during the meeting are of Directors No. (7/R.M) 2016. Our Board is responsible The Board of Director meetings are held in the presence recorded as minutes, taking into account any member’s We allow specific consideration for related party for carrying out these functions but may delegate them of the majority of its members. In the fiscal year ending opinions or dissenting views that are expressed during transactions that do not reach 5% of the asset value of to the relevant Committee or to Executive Management, on 31/12/2016, a total of seven Board meetings the meeting. the company. in writing. In the case of delegation, they have clear were held. instructions on how this delegation can be authorized Any related party transactions or conflicts of interest However, for any related party transactions that exceed and the relevant limitations. The Board has agreed Board meetings are held following written invitation are declared at the beginning of each meeting, recorded 5% of the asset value of the company, it is important matters reserved for the Board and its corresponding from the Chairman or upon the written request of two in the minutes of the meeting and approved by the that the related party is not provided with voting Committees within its Board Charter. During 2016, the members of the Board or either of its Committees. members present, thus ensuring that the member rights pertaining to decisions of both the Board Board did not delegate any of its duties or functions to relevant to that resolution is excluded from voting. (if s/he is a member) and the General Assembly (if s/he the Executive Management. The invitation and the agenda are sent to the members is a shareholder). at least a week ahead of schedule, and details of the 3.8 Transactions with related parties When a transaction with related parties concludes, the Related party transactions include those involving Chairman of the Board will notify the Securities and any persons who have authority or influence over our Commodities Authority with the content of the data operational and financial decision making, either directly and information related to the transaction. This sets or indirectly. They can present potential or actual the conditions for the transaction to ensure it is fair, conflicts of interest for our company and may create reasonable and in favour of the shareholders of du. the appearance that business decisions are based on considerations other than the best interests of our company and its shareholders.

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The total value of transactions with related parties:

Related parties Thousand dirhams

Axiom Telecom (LLC) - Accredited distributor - Net sales 2,149,557

Khazna Data Center - Rent and services 66,648

TECOM Investments Free Zone (LLC) - Rent and services 36,933

TECOM Investments Free Zone (LLC) - Infrastructure cost 14,821

Injazat Data Systems (LLC) - Data centre rental and related services 9,239

3.9 Our organisational structure The CEO, along with the rest of our Executive Our Executive Management is responsible for the Management team, reports to the Board of Directors day-to-day running of our business. The team is to follow up recommendations and implement managed by our Chief Executive Officer (CEO), who is strategies, policies and frameworks as proposed by in charge of the operations of the company. The CEO the Board. On the following page are biographies of drives the development of our company to improve our Executive Management team. its performance and the value for our shareholders.

Chief Executive Officer Osman Sultan

Chief Chief Chief Chief Human Chief Wholesale Chief New Commercial Operations Financial Capital and and Corporate Business and Officer Officer Officer Administration Affairs Officer Innovation Officer Officer Fahad Farid Amer Ibrahim Ananda Carlos Al Hassawi Faraidooni Kazim Nassir Bose Domingo, PhD

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Osman Sultan Farid Faraidooni Chief Executive Officer Chief Operations Officer

Osman Sultan, the founding Sultan’s drive and acute business Farid Faraidooni, Chief Operations City and other business parks. In CEO of Emirates Integrated acumen has earned him several Officer, currently looks after Customer 2003, he was nominated by TECOM Telecommunications Company PJSC- industry accolades, such as Operations, Network, IT Development Investments in the Distinguished du, joined the company in January being included as one of the and Operations, Technology Security Government Employee category in the 2006. In less than a decade and under telecommunication industry’s most and Risk Management, Products Dubai Government Excellence Program his leadership, du’s annual revenue has powerful executives in the world on Engineering and Operations, Planning Awards. exceeded USD 3.4 billion and boasts the GTB Power100 list. He has also and Services. Prior to this, he held market share of 47%. mentored a generation of key telecom the roles of Chief Commercial Officer, Farid is currently member of the Board sector players, who have gone on to Executive Vice President of Commercial of Directors of Khazna Data Center Sultan has over 30 years of experience occupy leadership roles, many of them and Executive Vice President of Limited and was previously member of spanning Europe, North America and as CEOs across the world. Corporate Affairs. the Board of Directors of Interoute, one the MENA region. Prior to du, Sultan of Europe’s largest private networks. set up and led another successful Before joining our company, Farid Middle Eastern telecommunications facilitated the implementation of operator, Mobinil, where he achieved technology infrastructure in TECOM his vision of putting ‘a mobile in the Investments business clusters such as hands of everyone.’ the , , Knowledge Village, Dubai Healthcare

Fahad Al Hassawi Amer Kazim Chief Commercial Officer Chief Financial Officer

In his role as the Chief Commercial of Human Resources at Emirates Amer was named Chief Financial Officer Services at Dubai Airports, where he Officer, Fahad is responsible for Airlines. in December 2013, and is responsible played a leading role in shaping the driving both sales and marketing for overseeing all areas of our financial organisation’s long-term business across all business units to achieve Fahad holds a Master’s Degree operations, including raising capital, strategy. Amer also previously spent the required revenues and increase in Industrial Engineering from financial strategy and providing both eight years with Emirates Airline where the company’s market share. the University of Miami (USA). operational and programmatic support he held various positions including He completed a Global Business to the organisation. Senior Vice President of Finance. Prior to his current role, Fahad was the Consortium Programme at London Chief Human Resources and Shared Business School in 2005. Amer is a senior professional with Services Officer at du. Before joining almost twenty years of experience du, Fahad was the Vice President in finance. Prior to his current role, he was the Senior Vice President of Group

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Ibrahim Nassir Carlos Domingo, PhD Chief Human Capital and Administration Officer Chief New Business and Innovation Officer

Ibrahim was appointed Chief Human Automotive, where he managed the Carlos Domingo was promoted to product development, digital services, Capital and Administration Officer in HR function for all 10 companies within Chief New Business and Innovation alliances and partnerships and 2013, and is responsible for managing the automotive division, and was also Officer in June 2016. He is responsible business intelligence and analytic. our human resources function and the Executive Vice President, Human for the development of all our big data Previously, he spent eight years at implementing best practices in training Resources, Organisation Effectiveness and new product and service initiatives Telefonica as CEO of Telefonica R&D and development, manpower planning and Corporate Services at Dubai including all digital, smart city initiatives, and the CEO for New Business and and business excellence. Aluminium Company Limited. du TV, and advancements to our digital Innovation for Telefonica Digital. He channels and mobile app. holds a PhD in computer science. Prior to his current role, Ibrahim worked as the Director of Human Resources Prior to du, Carlos was Chief Product for the UAE and Overseas at Al Futtaim and Business Development for Etihad (Mobily) where he managed

3.10 Statement of the Executive Management Compensation The following table lists the appointment dates our company, their current positions, and their of the members of the Executive Management of remuneration at the publication date of this report:

Total Other cash Date of Position remuneration bonuses paid appointment paid in 2016 (AED) in 2016 (AED) Ananda Bose Chief Wholesale and Corporate Affairs Officer Chief Executive Officer 1/1/2006 4,669,146 1,161,892

Ananda is a senior professional management consultancy firms Chief Commercial Officer 23/4/2006 2,063,370 435,933 with over 20 years’ experience including Arthur Anderson, Ernst & Chief Operations Officer 1/1/2006 2,076,258 435,933 working in consulting firms and Young and Coopers & Lybrand. telecommunications operators, Chief Financial Officer 8/12/2013 2,036,820 N/A handling diverse areas including In his current role, Ananda is finance, strategy, information responsible for the Wholesale and Chief Human Capital and Administration Officer 26/5/2013 1,888,200 107,207 technology, wholesale, regulatory Corporate Affairs department, which Chief Wholesale and Corporate Affairs Officer 1/1/2006 1,923,768 435,933 affairs, legal and project management. includes International and National Wholesale, Procurement, Legal, Chief New Business and Innovation Officer 19/4/2015 1,648,200 N/A Ananda has been working in the Regulatory Affairs, Risk Management telecoms industry since 2003, and and Investments. • Remuneration and bonuses are subject to • The remuneration evaluation and approval prior to this he worked in global our company’s performance and calculated process for all members of the Executive based on the individual’s performance within Management team is currently under a specific framework. The final decision is review. Bonuses for 2016 will be announced then approved by our Board of Directors. once the decision has been approved.

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4. External Auditor

4.1 Overview of external auditor It has been present in the Middle East for nearly PricewaterhouseCoopers (Dubai Branch) (PwC) was 43 years and in the UAE for over 27 years. It specialises appointed as the company’s external auditor for the in the field of legal auditing, business consulting fiscal year 2016. It is one of the largest legal auditing and taxation. firms, with operations across 154 countries.

4.2 Statement of fees, costs and services provided by all external auditor firms in 2016:

External Auditor Service Value (AED)

Consultancy - Corporate Control Framework 1,516,001 Deloitte & Touche (M.E.) Due Diligence Services 85,715 Total 1,601,716

Accounting Services 94,500 Ernst & Young Pvt. Ltd. Total 94,500

Consultancy - Assets Transformation Project 2,116,267 Whistle-blowing Reporting 75,000 KPMG Technical Audit Review 293,880 Total 2,485,147

Statutory Audit Fees - 2016 1,120,000 Statutory Audit Fees - Financial Statements Arabic Translation 45,000 Professional Fees Capital Reduction 15,796 PwC (Dubai Branch) Consultancy - Investigation Services 170,447 Due Diligence Services 440,820 Audit Services Subsidiaries up to the year 2015 242,451 Total 2,034,514

Audit Services 44,464 Taxation Services 5,558 PwC (Singapore Branch) Other Services 13,897 Total 63,919

Statement of annual fees paid to external auditor of the company for statutory audit:

External auditor Year Fees (AED)

PwC 2014 1,050,000

PwC 2015 1,120,000

PwC 2016 1,120,000

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5. The Audit Committee

5.1 Members of the Audit Committee and a statement of their tasks • Review the transactions between the company • Present reports and recommendations to The Audit Committee members are Hana Al Rostamani (Chairman), Fadel Al Ali and Saeed Al Yateem. and related parties to ensure there is no conflict the Board of Directors regarding the matters of interest. Offer recommendations to the mentioned above. Board of Directors before closing any deal. The • The Board has authorized the Audit Committee committee also guarantees the application of the to manage the governance of du and review set of regulations for each party and its validities its policies. which are approved by the Board of Directors.

5.2 Statement of date and number of meetings held in 2016:

Hana Al Rostamani Meeting Number Date Absentees The objective Audit Committee No. 1 16/2/2016 Khaled Balama Financial Statements

Audit Committee No. 2 23/3/2016 None Review of Internal Audit

Audit Committee No. 3 25/4/2016 Hana Al Rostamani Financial Statements

Audit Committee No. 4 28/7/2016 None Financial Statements

Fadel Saeed Audit Committee No. 5 28/9/2016 Hana Al Rostamani Review of Internal Audit Al Ali Al Yateem Audit Committee No. 6 31/10/2016 None Financial Statements

Key roles and responsibilities of the Audit performance of the internal control department Audit Committee No. 7 8/12/2016 None Review of Internal Audit Committee include: with the Board, to guarantee the delivery of an • Audit financial policies and procedures, and effective internal control system. • Board Committees were restructured on 27/2/2016. monitor the accuracy of the annual and • Investigate the results of the internal control provisional financial reports. In addition, the procedures authorized by the Board of Directors, Committee advises on the regulations related or upon the Committee’s orders following Board to listing companies and the timings of an IPO, approval. Examine the auditor’s assessment as well as other legal requirements needed for of the internal control procedures to ensure conducting financial reports. coordination between both internal and external • Review and report to the Board of Directors auditing departments. Ensure provision of on the auditing system and the method of necessary resources to action the internal control conducting the auditing process to ensure its management system and monitor the resulting absolute independence. The Committee meets performance. the external auditor to discuss the auditing • Examine reports generated by the Internal scope, planned procedure and level of auditing Control Department and follow up on the effectiveness, as per the International Standards application of any required corrections to on Auditing (ISA). these reports. • Review the external auditor letter and • Set rules and regulations which allow the corresponding action plan, assuring the timely employees to track any potential illegalities response of the Board of Directors and Executive in the financial report of the internal control Management on clarifications and core issues. system. Accordingly, instruct an independent • Review and monitor the company’s financial investigation to evaluate any illegal actions applications, internal control, and risk alongside monitoring the company’s management activities and discuss the professional conduct.

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6. The Nomination and Remuneration Committee

6.1 Members of the Nomination and Remuneration Committee and a statement of their tasks 6.2 Statement of date and number of meetings held in 2016: Members of the nomination and the remuneration committee are: Khaled Balama (Chairman), Ziad Galadri and Mohamed Al Suwaidi. Meeting Number Date Absentees

Nomination and Remuneration Committee No. 1 29/2/2016 None

Nomination and Remuneration Committee No. 2 14/4/2016 None

Nomination and Remuneration Committee No. 3 31/5/2016 None

Nomination and Remuneration Committee No. 4 19/9/2016 None

Nomination and Remuneration Committee No. 5 27/10/2016 None Khaled Balama Nomination and Remuneration Committee No. 6 7/12/2016 None

• Board Committees were restructured on 27/2/2016.

Ziad Mohamed Galadri Al Suwaidi

Key roles and responsibilities of the Nomination for annual review. Ensure all remunerations and and Remuneration Committee include: benefits offered to the Board of Directors are • Set and review policies related to the nomination reasonable and facilitate the performance of the of the Board of Directors and the Executive company. The same applies to the remuneration Management. Ensure that the related policies enable and benefits of the Executive Management. balance between the number of male and female • Annual review of the skills and requirements board directors. Actively encourage women’s needed from the Board of Directors, creating a participation by facilitating equality programmes. list of capabilities and qualifications that denote • Organise and oversee the procedures for best practice for the Board of Directors. This nominations to the Board of Directors as per the should include the required time commitment current approved laws and regulations. that should be dedicated to the Board’s roles and • Ensure the independence of the independent responsibilities. members. If the committee discovers that the • Review the Board structure and report the condition of independence is not fulfilled by any Committee’s recommendations. Advise on the Director who claims to be independent, it shall company’s requisite for qualifications of the refer the matter to the Board of Directors, who in Executive Management team and employees in turn shall notify the affected Director by a letter order to qualify their selection. to be sent by registered mail to the Director’s • Oversee the development of human resources registered address recorded in our company’s policies and training programmes, and monitor files. This letter will detail the apparent reasons their application. for his/her lack of independence. • The Board of Directors has authorized the • Compose a set of policies for the remuneration, Nomination and Remuneration Committee to benefits and salaries of the Board of Directors look into the procedure of employment.

26 The Nomination and Remuneration Committee The Nomination and Remuneration Committee 27 Corporate governance report 2016 Corporate governance report 2016

7. The Investment Committee

7.1 Members of the Investment Committee and a statement of their tasks 7.2 Statement of date and number of meetings held in 2016: The Investment Committee members are Masood Mahmood (Chairman), Mohamed Al Suwaidi, Hana Al Rostamani, Abdullah Al Shamsi and Fadel Al Ali. Meeting Number Date Absentees

Investment Committee No. 1 4/2/2016 Homaid Al Shimmari

Investment Committee No. 2 24/4/2016 None

Investment Committee No. 3 25/5/2016 None

Investment Committee No. 4 29/6/2016 None

Investment Committee No. 5 19/9/2016 None Masood Mahmood Investment Committee No. 6 20/9/2016 Masood Mahmood Investment Committee No. 7 5/10/2016 None

Investment Committee No. 8 6/11/2016 None

Investment Committee No. 9 14/12/2016 None

• Board Committees were restructured on 27/2/2016. Mohamed Hana Abdullah Fadel Al Suwaidi Al Rostamani Al Shamsi Al Ali

Key roles and responsibilities of the This Committee also reviews our short-term and Investment Committee include: long-term strategies and provides recommendations Review and approve our company’s to the Board relating to the company’s annual investment strategy, whether relating to core budget. In addition, it reviews all of our investments or non-core business, in accordance with to ensure value for our shareholders. the approved financial authority matrix.

28 The Investment Committee The Investment Committee 29 Corporate governance report 2016 Corporate governance report 2016

8. Insider Transactions Supervision Committee 9. Internal Control

The Audit Committee has always been responsible corporate discipline standards for public joint stock 9.1 The role of the Board of Directors in Internal control system process for the supervision of ‘Insider Transactions’, as companies, the Audit Committee formed a separate internal control Internal Control is broadly defined as a process authorized by the Board of Directors in accordance committee dedicated to overseeing and policing • The Board of Directors has overall responsibility designed to provide reasonable assurance regarding with international best practices. During the year, insider transactions from the board members. for ensuring effectiveness of the Internal the achievement of objectives in the following the Committee implemented a number Control system. categories: of measures to protect our company’s data. The Auditing Committee also looks into • The Board of Directors is responsible for • Effectiveness and efficiency of operations: validating the terms of ‘The Committee of ensuring that executive management decisions Addresses our basic business objectives, Following the issuance of a resolution (7/R.M.) by Insider Transactions Supervision’, as well as are implemented to guarantee an effective including adherence to performance standards Securities and Commodities Authority (‘SCA’), implementing the ideal methodology for this new Internal Control system. This allows effective and and the safeguarding of resources. which sets out new corporate governance rules and committee to report to the Audit Committee. efficient operations, accurate financial reporting, • Reliability of financial reports: Ensures that and compliance with laws and regulations. reliable financial statements and other financial • The Audit Committee has delegated authority information are presented to the Board, and responsibility from the Board of Directors to shareholders and Executive Management. oversee the following: • Compliance with applicable laws and regulations: ° Annual review of our internal controls and This element covers laws and regulations which systems to minimise risk that may impact our company is subject to in order to avoid any our business objectives. The review process damage to reputation or fines/penalties. includes assessment of financial statements controls, operations and risk management. The internal control system aims to establish, ° Review procedures followed by our document, maintain and act consistently with management in determining, evaluating and the principles of the internal auditing policy. managing significant risks. The system applies across all departments and ° Drive our financial goals through the all activities related to corporate governance and application and implementation of risk management. appropriate and effective controls. ° Review and report the annual financial Internal control management process statements, accounting policy and practices • Our control management process ensures that to the Board. our procedures are appropriately designed ° Update changes that have occurred since and effectively applied in accordance with our the last revision pertaining to the nature and company’s annual strategic plan. This process is extent of the major risks and our ability to reviewed by the Audit Committee and approved cope with external environment changes. by the Board of Directors. ° Review the nature of the regulatory activities • The Internal Control Department produces reports that are being implemented on the risks related to efficiency of the applicable internal and internal control systems, as well as the control systems that are submitted to Executive external audit processes. Management and the Audit Committee. The reports ° Assess control system defects and prepare include relevant suggestions and recommendations for potential emergency situations that may for improving the control systems. significantly affect our financial performance. • The department is not responsible for the ° Outline and implement procedures that development or maintenance of internal control address the core control issues. systems, which fall under the responsibility of the ° Review our compliance with applicable laws authorised relevant department. and regulations. • Appointment of a compliance officer with clear and ° Review of our whistleblowing policy. independent responsibilities to monitor compliance with laws, legislations and internal procedures.

30 Internal Control 31 Corporate governance report 2016 Corporate governance report 2016

• The Internal Control department supervises our Enterprise Risk Management activities and ensures its consistency with UAE We are committed to adopting, embedding and law and all other internal and external regulations. sustaining risk management as a core competency It may also modify and update the procedures throughout the organisation. In doing so, we aim included in the compliance control system in to enhance the performance of key activities, order to ensure that we continue to meet the in an effort to protect its assets and enrich the highest applicable standards. organisation’s ability to manage uncertainty, in achieving its key corporate objectives and goals. 9.2. Name and qualifications of the Internal Control Department Head We have developed our own holistic risk management Internal Control Management is headed by Rashid Al framework, based on the global methodologies. Sheikh, a UAE National who is a member of the Audit These include the Committee of Sponsoring Committee at the Dubai Foundation for the Aviation Organizations of the Treadway Commission Industry. Rashid has over 17 years of experience in (COSO) and the International Organization for the area of financial operations including accounting, Standardization (ISO). These frameworks are internal audit, finance and banking. He held several consistent with due diligence, with commitment and positions at the Department of Financial Control of with public policies adopted by the company. the UAE government from 1998 to 2003, and holds a master’s degree in accounting from the University We deploy a corporate-wide approach to the of Miami in the United States. management of risks. Specifically, a comprehensive process is deployed to identify, analyse, evaluate and treat risks. 9.3. Name and qualifications of the Compliance Officer A systematic, structured and timely Corporate Risk The Director of Internal Control Department is Agenda is undertaken throughout the year for the responsible for monitoring compliance functions in Executive Management team to determine and the company. He is responsible for the completion of evaluate the potential exposures facing our company. the annual work plan to monitor compliance.

This ensures that risk management is closely 9.4. How internal control management aligned with the company’s strategic themes and addresses a serious issue objectives, reported to the Audit Committee and Internal control management achieves their tasks Board of Directors, and ensuring that action plans through the following five divisions: are in place to address the risks identified. The • Financial Audit Corporate Risk Management function is accountable • Operational Audit to the Audit Committee and the Board of Directors • Violations for developing, maintaining and implementing • Information Systems Audits the Corporate Risk Management framework and • Compliance communicating the key risks and recommendations for improvement on a quarterly basis. The Control department investigates serious issues through each of the five divisions according to the nature of the issue, providing the Executive Management and Audit Committee with effective recommendations and reporting on the follow up and resolution for each issue.

32 Internal Control 33 Corporate governance report 2016 Corporate governance report 2016

10. Violations

Regulatory requirement violations committed over the fiscal year ending in 31/12/2016 were as follows:

Value Value Title Date Description Actions Taken Title Date Description Actions Taken (AED) (AED)

The violation is related to The violation is related to non-compliance with the Violation Decision Non-compliance with non-compliance with the Violation Decision Hard caps have been 27/3/2016 200,000 25/5/2016 directive to implement hard 200,000 No. (2) of 2016 Directive No (1) of 2016. directive to implement hard No. (6) of 2016 implemented as requested. caps on mobile data limits. caps on mobile data limits (Directive No. 1 of 2016). Failure to comply with TRA’s Violation Decision 22/5/2016 instructions to provide Payment processed 100,000 Failure to submit information No. (5) of 2016 specific information. to TRA within the required timeframe and non-compliance du to immediately cease and Violation Decision Violation decision shared 14/8/2016 with the implementation of 200,000 desist all actions that involve: No. (10) of 2016 with relevant stakeholders. TRA’s directive regarding • Using information gained retaining Mobile Consumer’s Breach of TRA’s Mobile during the MNP process for Emirates ID copies. Number Portability marketing purposes; and/or (MNP) Instructions. TRA • Rejecting MNP porting requests Failure to provide accurate and Violation Decision Violation Decision Violation decision shared 6/7/2016 has assessed a financial for invalid reasons, where 200,000 24/8/2016 timely information during a 400,000 No. (7) of 2016 No. (12) of 2016 with relevant stakeholders. penalty in the amount of such reasons are known to be national emergency situation. Dirhams two hundred invalid at the time of rejection. Violation Decision Non compliance with the Violation decision shared 31/8/2016 400,000 thousand (AED 200,000). No. (14) of 2016 RRMC/ERMC requirements*. with relevant stakeholders. Payment of the penalty shall be made by du to TRA by the On 31/8/2016 TRA conducted an Noting that du’s team who last working day in July 2016. audit on du’s database of mobile witnessed the audit is aware customers. During the audit of TRA’s findings, TRA is TRA instructs du, by no later visit, registration violations have allowing du only until end of than 12pm on 4/8/2016 to: been identified in both consumer December to conclude relevant 1. Pay the financial penalty of and enterprise registration corrective actions. du to provide AED 200,000 within 30 for which TRA has issued its a confirmation of fulfilment calendar days from 19/7/2016. Violation Decision No (16) of of all included instructions Violation Decision 2. Refrain from invalidly 29/11/2016 2016 (VD). The VD includes: in the VD by 2/1/2017. 400,000 No. (16) of 2016 rejecting porting requests. • A financial penalty of 3. Avoid contacting any MNP AED 400,000. In case du does not comply customer (for marketing Non-compliance with TRA’s • Instructions to verify, correct, with the above, TRA will Violation Decision purposes related to mobile 20/7/2016 Mobile Number Portability 200,000 align etc. du’s database consider this non-compliance No. (9) of 2016 services) for a period of one Instructions V 1.0. of mobile customers to be a new violation and give month (measured from the (consumers and Enterprise) du until 16/1/2017 to comply, last MNP activity relevant with requirements to then until 30/1/2017, then until to the customer number). provide feedback to TRA. 13/2/2017, and so forth. 4. Close all open ports, permanently resolve du’s Not implementing TRA’s technical issue(s) resulting instructions in due date Violation Decision Business informed by in open ports and ensure its 19/12/2016 and providing conflicting 200,000 No. (17) of 2016 the Violation Decision. full compliance to the MNP information regarding MNMI regulatory framework. change of Contract.

*Registration Requirement for Mobile Consumers/Electronic Registration for Mobile Consumers.

34 Violations Violations 35 Corporate governance report 2016 Corporate governance report 2016

11. Contribution to Sustainability and Community Engagement

We continuously look at ways to promote innovation app and moved on to phase 2, whereby we and responsibility across every aspect of our committed to distribute 2,200 app licenses, 1000 of business. By proactively working towards reducing which have been distributed to various educational our environmental impact, ensuring that we foster a centers across the UAE. work environment enables growth and development, and contributing to our community, we are helping to The feedback from our partnership with BabNoor has form a happy society. been incredibly positive. Almost 88% of teachers rated the app highly in facilitating student-teacher interaction Throughout 2016, our sustainability initiatives enabled in the classroom and more than 88% of the students us to contribute to the country’s development in a with autism using BabNoor are able to easily browse structured and beneficial way. During the year ended through the app in search for what they need. 31/12/2016, we paid AED 8,750,000 for various social contribution purposes. Our Agent 055 programme continued to encourage college students to explore entrepreneurship Our Community throughout 2016. This is the first project of its kind Throughout the year we introduced a number offering an internship to expatriate students at a well of significant initiatives that strengthened our recognised company. A Social Return on Investment contribution to the UAE community. (SROI) study of the inaugural batch demonstrated a social value of AED 3 created for each dirham The Government recognised 2016 as the ‘Year invested in the programme. Student feedback also of Reading’ and we supported this initiative by showed greater inclination towards starting their own partnering with Arabic publishing company ‘Kalimat’ business, and an increased in ability in business skills. to provide a total of 11,900 books to be distributed A new batch of students were recruited for the across schools in the UAE. We also engaged in second phase in October 2016, including 3 Emirati and several volunteering activities to promote the spirit of 13 expatriate students. reading. In addition, we made donations of AED 3 million towards HH Sheikh Mohammed’s We remain a strong supporter of wellness and fitness ‘Reading Nation’ campaign and donated five exclusive in the community. du Football Champions (duFC) had mobile numbers to the ‘Reading Nation’ fundraiser a very successful 2015/2016 season that resulted in auction. The sale of these numbers resulted in one of the duFC Elite Team, Ahmad El Yamani, to train AED 2.5 million for the campaign. with Malaga CF. We also further developed our fitness platform by bringing du Tough Mudder – an 8KM We launched our first ever Public Service and 16KM mud and obstacle course designed to test Announcement (PSA) campaign, ‘Post Wisely’, physical strength, stamina, and mental grit – to the UAE. addressing the dangers of oversharing information on social media channels. We wanted to raise awareness Our Ramadan campaign – Mawaed Al Rahman of how crime can be linked to sharing information – continued to be one of our most successful online, promoting cyber safety across the community, community projects. Working alongside our staff, not only for our customers. The adverts generated including senior management, 864 of UAE’s residents almost five million views on our YouTube channel and joined in as volunteers to pack and distribute 12,300 were shared widely across on social media. boxes of essential Ramadan food ingredients to needy families across the Emirates. We also created Our association with BabNoor, an app that enables ‘Digital Fasting’, a YouTube series promoting the communication for special needs students with concept of taking a break from digital devices during communication challenges, continued to produce Ramadan. The series showcased the adventures positive improvement. In 2016, we completed phase of Emirati boy Omar Bin Haider who took on our 1 distributing 390 iPads enabled with the BabNoor challenge to ‘go offline’ between suhoor and iftaar.

36 Contribution to Sustainability and Community Engagement 37 Corporate governance report 2016 Corporate governance report 2016

12. General Information

Our People Our Customers 12.1 Performance of the company’s shares in the market in 2016: We believe that our people are at the heart of our We continued our efforts to put customers first and business, therefore, during 2016 we continued our release a range of partnership offers that benefit the Date Highest Price Lowest Price Closing Price efforts to ensure their well-being and continued entire market. For example, we signed a partnership development. As a result of this commitment, we with The Entertainer that resulted in a ‘du Entertainer 31/1/2016 5.40 5.02 5.40 secured our highest ever Gallup score for employee app’ offering exclusive deals/ discounts for premium 29/2/2016 6.06 5.41 5.93 engagement (4.4). customers. We also continued the success of du Live by bringing exclusive access to a number of exciting 31/3/2016 6.43 5.90 6.40 In line with our commitment to lifelong learning and acts to the UAE for our customers. This included a the development of a customer-centric culture, we New Year’s Eve performance from British rock band, 28/4/2016 6.69 6.13 6.45 have continued to develop our du University. Over Coldplay. du Tuesday continued with a number 31/5/2016 6.45 6.08 6.40 the past twelve months 1588 of our employees of fantastic premieres including Independence participated in courses at the University, with an Day 2, involving stars such as Will Smith and Liam 30/6/2016 6.41 6.25 6.31 average of seven days training per person. We also Hemsworth. In addition, we launched our association 31/7/2016 6.93 6.40 6.65 launched the School of Technology, an additional with Dubai Opera to provide exclusive customer arm of the University, that forms part of our strategy offers for performances including Les Miserables and 31/8/2016 6.68 6.54 6.65 to transform our business for a digital future. The Pearl Fisheries. 29/9/2016 6.64 6.50 6.50 Participant feedback from du University showed 99% satisfaction with the service offered, with 98% of Our Environment 31/10/2016 6.49 6.08 6.08 students reporting that they are able to actively apply We are proud to support the UAE Government’s their new skills within their day-to-day role. Vision 2021 regarding the clean energy mix and the 30/11/2016 6.06 5.70 5.73 National Energy Strategy’s aim for a 15% reduction 29/12/2016 6.49 5.85 6.20 We believe that volunteering positively impacts in carbon dioxide emissions by 2021. As such, we employee engagement and team building and continue to have 250 base stations running on therefore we encourage our people to participate in hybrid energy sources and have saved 11.5M of the volunteering activities that we arrange for them. diesel, equivalent reducing our carbon footprint by In 2016, our volunteering programme continued to 28,710 tonnes. grow from strength to strength, with 349 of our staff dedicating their time and skills towards bettering We installed seven new mobile network sites, fully the community. powered by solar power. Erected in Abu Dhabi Western region, the new sites have an annual diesel Our wellness initiatives continue to be a key part of saving of 180,000L, equivalent to 450 tons of our internal framework and participation reached its carbon. We plan to install four more solar mobile highest ever level. For example, 2016 saw the biggest network sites in 2017. Furthering our commitment ever participation in the Dubai Marathon with over to protecting the environment, in 2016 we rolled out 300 colleagues and family members running through our redesigned SIM card packaging, eliminating the the city, a 20% increase from 2015. We also launched use of plastic by 99%, and primarily use paper and our first ever women’s-only wellness day, attended cardboard that are recyclable. by 140 employees, over 25% of our workforce. We were also the biggest corporate team to take part in For further details about our activities and initiatives the Spartan Race, a 200-strong team. to promote sustainability, please see our 2016 sustainability report available at 31 29 31 28 31 30 31 31 29 31 30 29 du.ae/about-us/sustainability-report. Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Highest Price Lowest Price Closing Price

38 Contribution to Sustainability and Community Engagement General Information 39 Corporate governance report 2016 Corporate governance report 2016

12.2 Performance of the company’s shares, compared with the general market index and the telecom sector’s index in UAE for 2016

Performance of the company’s shares, compared with the general market index in UAE for 2016: Performance of the company’s shares, compared with the telecom sector’s index in UAE for 2016:

Date Financial Market Index The Company’s Shares Date Sector Index The Company’s Shares

31/1/2016 2,998 5.40 31/1/2016 8.33 5.40

29/2/2016 3,240 5.93 29/2/2016 9.06 5.93

31/3/2016 3,356 6.40 31/3/2016 33.52 6.40

28/4/2016 3,492 6.45 28/4/2016 36.50 6.45

31/5/2016 3,314 6.40 31/5/2016 17.70 6.40

30/6/2016 3,311 6.31 30/6/2016 9.72 6.31

31/7/2016 3,484 6.65 31/7/2016 10.24 6.65

31/8/2016 3,504 6.65 31/8/2016 10.14 6.65

29/9/2016 3,474 6.50 29/9/2016 10.26 6.50

31/10/2016 3,332 6.08 31/10/2016 19.15 6.08

30/11/2016 3,361 5.73 30/11/2016 9.58 5.73

29/12/2016 3,531 6.20 29/12/2016 38.48 6.20

8000

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0 31 29 31 28 31 30 31 31 29 31 30 29 31 29 31 28 31 30 31 31 29 31 30 29 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Financial Market Index The Company’s Shares Sector Index The Company’s Shares

40 General Information General Information 41 Corporate governance report 2016 Corporate governance report 2016

12.3 Breakdown of ownership of public shareholders as of 31/12/2016: 12.5 Statement of distribution of shareholders according to the size of the property as of 31/12/2016: Investor/Shareholder Type of Customer Number of Investors Percentage Number of The number of Percentage of Government 3 0.4617 Owner of shares shareholders owned shares stock capital Banks 7 0.3518 Less than 50,000 64,366 76,300,666 1.1207 UAE Companies 122 85.4418 From 50,000 to less than 500,000 487 78,011,584 1.7074 Individuals 96,995 12.8707 From 500,000 to less 201 263,097,382 5.7558 Sole Property 4 0.0156 than 5,000,000

Government - - More than 5,000,000 34 4,062,210,204 88.8609 GCC Countries Commercial - - 12.6 Statement of actions that have been Individuals 173 0.3148 taken to regulate shareholder relations Government - - Throughout the year, our company organised press This website, regularly updated in line with best Arabs Commercial - - and call conferences with local, regional and international practice, includes the following key tenants: media to update them on relevant developments. • Quarterly and annual financial statements Individuals 500 0.4265 As such, Osman Sultan, our Chief Executive Officer, • Board of Director’s reports Government - - is in frequent, and direct contact with journalists and • All reports related to financial results Other nationalities analysts to provide input and context regarding the and presentations with their dates Commercial - - company’s financial position. A key part of this is the • Notes of General Assembly Meetings disclosure and communication of our quarterly and • Information about our company’s share price Individuals 473 0.1225 annual results, due to our listing on the Dubai Financial along with quarterly and annual profits Market (DFM). Every quarter, we hold media calls and, • A number of mechanisms for stakeholders where relevant, press conferences to communicate to contact our IR department 12.4 Statement of shareholders who own 5% or more of the company’s capital as of 31/12/2016: our quarterly and annual results, after disclosing them to DFM. During these meetings, our CEO provides a For more information, please visit Name The number of owned shares Percentage of stock capital clear overview of our financial performance through the website: du.ae/investorrelations presentations, and a Q&A session. We also hold Emirates Investment Authority 1,808,465,899 39.56 analyst calls and meetings to discuss, in detail, the We are proud to have created a website page dedicated Mubadala Development Company PJSC 902,857,142 19.75 financial and strategic position of the company. The to Corporate Governance. In 2010, we launched this presentations are then uploaded on the company’s website in both Arabic and English and since then, Emirates International 891,428,572 19.5 website immediately after the conferences concludes. we have continued to evolve it to ensure it remains in Telecommunications Company LLC line with international regulations and best practice. In addition, our CEO, frequently participates as our key spokesperson in many local and international The Corporate Governance website hosts the conferences and we often participate in various following information: investor relations conferences, such as the Middle • Corporate Governance Reports East Investor Relations Society Annual Conference. • Corporate Governance Policies • Ownership structure and ratios Amer Kazim, our Chief Financial Officer, is our • Formation of the Board of Directors, committees dedicated Investor Relations Officer. He has and company’s structure implemented a number of IR activities to enhance • Ways of communicating with our BOD to provide our activities in this regard, such as a dedicated input, feedback and to post enquires IR website, delivered in both Arabic and English. • Details of approved dividends

42 General Information General Information 43 Corporate governance report 2016 Corporate governance report 2016

12.7 Statement of decisions presented 12.8 Statement of core events that at the General Assembly in 2016 the company experienced in 2016 and actions taken thereon 1. Signing an MoU with Dubai Smart City No specific decisions have been taken in 2. Distributing interim and special dividends du’s General Assemblies in 2016. in Q1 2016

For more information on our policies and corporate governance, as well as annual reports and sustainability reports, please visit the following link: du.ae/en/about/corporate-governance

Ahmad Bin Byat Chairman

44 General Information 45