A Wonderful World - Zain

Zain Saudi ArabiaSustainability Report 2010A Wonderful World

Contents2 CEO Message4 Zain Saudi Arabia Corporate Profile6 Our Stakeholders8 Our Sustainability Framework10 Our 2010 Sustainability Performance12 Delighting Customers18 Pioneering Networks22 Creating a Dynamic Team28 Building Partnerships32 Developing Communities36 Improving the Environment40 Adopting Best Practice44 Our 2011 Sustainability CommitmentsZain Saudi Arabia Corporate OfficeKing Fahad Highway, PO Box 295814, Riyadh 11351Kingdom of Saudi ArabiaTel: +966 59 0000 959csr@sa.zain.comwww.sa.zain.com46 Appendix A : Scope of the Report47 Appendix B : AcronymsAppendix C : Glossary48 Appendix D : GRI Index49 Appendix E : GRI Statement andGRI Application Level CheckInteract with us on:At Zain Saudi Arabia we have made the commitment to implement sustainabilitymanagement and transparent reporting. With this baseline Sustainability Reportfor 2010, we aim to open a constructive and engaging dialogue with all ourstakeholders on the subject of our sustainability ambitions, performance, and theoverall sustainable development of the Kingdom of Saudi Arabia.This report sets out what sustainability means to us and presents our frameworkand baseline performance since establishment, from an environmental, socialand economic perspective. Comparable data is provided for 2008, 2009 and2010 as available.This report has been prepared using the most internationally recognized andcomprehensive sustainability reporting guidelines – the Global ReportingInitiative (GRI) G3.We have self-declared this report to have achieved a GRILevel B, demonstrating the level of disclosure achieved. The GRI has checkedand approved our declaration level.As one of our valued stakeholders, we hope that you will join our dialogue byproviding your comments on our sustainability webpage, or by contacting oursustainability team at the Zain Saudi Arabia corporate office in Riyadh.

CEO MessageIntegrity, Trust, InnovationWe believe that mobile communications is one of the mosttransformative and enabling technologies of our lifetime. It holds vastpotential to support, and in some cases accelerate, economic, socialand environmental development through the provision of uniquesolutions across all sectors of society.With the world facing a new and shifting reality, the concept ofsustainable development is rapidly being identified as a new modelfor long-term prosperity and growth.Zain has a unique opportunity in its early development as the thirdentrant to the Saudi market to help contribute to the sustainabledevelopment of the nation, in line with King Abdullah’s vision.By driving market innovation, we hope to enable more people andorganizations to harness and benefit from the power of mobiletelecommunications. With the ongoing fulfillment of our stakeholders’expectations, and through continuous open communication, we aim todemonstrate the highest levels of integrity and build a new level of trustin the delivery of a better future.For this reason, we view sustainability as synonymous with our brandpromise ‘A Wonderful World’. As we come to better understand theneeds of all our stakeholders, we will be able to deliver greater valueto them and build further value for our shareholders.This baseline report is the first step to reaching a new level of managementexcellence by embedding sustainability management into our corebusiness operations. As a summary of our performance to date, thisreport will provide a platform for annual reporting to you, our stakeholders,on the development and successful implementation of our sustainabilitystrategy and action plan.I offer sincere gratitude to the Custodian of the Two Holy Mosques,King Abdullah Bin Abdulaziz Al-Saud, HRH Prince Sultan Bin AbdulazizAl-Saud, HRH Prince Naif Bin Abdulaziz Al-Saud, and all GovernmentMinisters. Their enlightened leadership has made an invaluablecontribution to the economic and social development of the Kingdomof Saudi Arabia.Finally, I take this opportunity to praise the good work of all ouremployees and partners for the achievements of 2010. We hope youenjoy this report and we look forward to engaging with you on itscontent and delivery of our commitments.Dr. Saad Al Barrak2 | Zain Saudi Arabia 3 | Sustainability Report 2010

Corporate profileSaudi Arabia’s Newest Operator2007JanuaryMobilelicenceawarded2008AugustZainSaudi Arabialaunches2008OctoberOver1 millionsubscribers2009DecemberOver5 millionsubscribers2010JanuaryCommencesLargest LTEtrail in theregion2010DecemberOver8 millionsubscribersSaudi Arabia’s Telecommunications MarketSaudi Arabia is the largest telecommunications marketin the Gulf Cooperation Council (GCC) region, withSR 52.5 billion total revenues in 2009, out of whichup to 74% was attributable to mobile services.SIM penetration as reported by the Communicationand Information Technology Commission (CITC)stood at 167% on 31st December 2010, with mobilesubscriptions increasing approximately 23% to 45.3million in 2010.Mobile Service Market Growth(Subscriptions 2001-2010)2010200920082007200620056.3 45.36.1 38.75.5 30.54.8 23.628.436.011344.813851.6 186167Mobile Telecommunications Company Saudi Arabia(Zain Saudi Arabia) launched its commercial operationson August 26, 2008, a year after it was awarded its licenseas the Kingdom’s third mobile voice and data operator.The company has been one of the most successful newentrants in the global telecommunications market andhas developed a strong customer base against thebackdrop of a highly penetrated market.In 2010, Zain Saudi Arabia’s share capital consisted of1.4 billion shares distributed amongst 10 organizationsand a public shareholding of 630 million shares. Furtherdetails are available in the Zain Saudi Arabia AnnualFinancial Report on the website www.sa.zain.com.MissionTo become the telecommunications operator of choice in Saudi Arabia with an approachbased on market segmentation and innovation.VisionA Wonderful World.ValuesRadiance: leading the way with imagination and vision, bringing joy, color, and richness to ourbusiness environment.Heart: living our lives with courage and resolve, engaging our spirit and touching emotions.Belonging: leveraging the fellowship and community spirit that knows no territorial boundaries.PrinciplesZain Saudi Arabia has a clear set of ten principles upon which the business operates: Trust,Openness, Fairness, Quality, Speed, Devolution, Innovation, Tolerance, Leadership Nurturingand Teamwork.ServicesZain Saudi Arabia offers a number of core telecommunications services to individuals,business and government. These include:Voice, SMS and MMS – The foundation of mobile communications that can be accessedthrough a mobile handset.Zain Saudi Arabia in 2010MarketVoiceSMS Broadband Multimedia SMS shortshare Customers traffic messages subscribers downloads code requests18% 8.3 million 9 billion 632 million 250,000 1.3 million 3.6 millionOur Economic ImpactZain Saudi Arabia has achieved sustainable positive growth as evidence in the financial andcommercial indicators of 2010. However, the breakeven point is yet to be accomplished andis expected to be achieved in the year 2014, demonstrating the long-term commitment andcontinued investment in the Kingdom by the company’s shareholders.2009 2010Revenue (USD) 801,080,533 1,582,498,667Benefits to employees (USD) 25,832,000 26,853,067Contribution to Governmental fee (USD) 54,493,600 157,015,200Distribution to the community (USD) 1,951,629 5,083,461Cost of revenue (USD) 567,206,933 907,712,533Association and MembershipsZain Saudi Arabia is a member of the Arab Sustainability Leadership Group (ASLG) – theregion’s foremost network of sustainability management and reporting leaders.Zain as a group has also joined and shown support for the:20042003Broadband – High-speed mobile broadband that can be accessed on a mobile handset,computer or any other internet enabled technology, through a USB dongle or Wi-Fi device.• GSMA Mobile Alliance Against Child Sexual Abuse Content• GSMA Mobile Privacy Principles2002200112Value Added Services – Such as mobile downloads (Islamic content, news, sports, musicand videos), mobile TV, ring-back tones and SMS short codes.Pre-paid subscriptions Post-paid subscriptionsTotal subscriptions Mobile penetration (%)Source: Figures reported by mobile service providers4 | Zain Saudi Arabia 5 | Sustainability Report 2010

OurStakeholders CustomersHow We Approach SustainabilityMapping out Zain Saudi Arabia’s stakeholders andtheir expectations has informed our approach tosustainability and development of a longer-termsustainability strategy.Stakeholders How we engage Stakeholders’ expectations• Call centre operators• 24/7 interactive Voice Response (IVR)• In-person shop assistants available during opening hours• Alternative communication channels including the website, social media,email, fax and SMS• Our online customer self service portal available 24/7 to all customersEmployees • ASK HR function and employee call center available during office hours• Employee self service section and intranet available 24/7• E-mail• SMS• Post and Fax• Affordable prices and tariffs that also demonstrate Zain values• Nationwide coverage• Availability and high quality of network service• Continued development and innovation in services including high speed internet• Ease and clarity of billing• Information security and data protection• Fast and efficient complaint resolution and high quality customer care• Stable and secure employment• Living the Zain values• Competitive remuneration package• Ongoing training and development• Clear career progression• Dynamic, safe and inclusive working environmentBusiness Partners • Contracts and agreements• HR Business Partners (HR BP) program• Quarterly engagement surveysCommunity • Daily direct marketing• Zain Saudi Arabia website: www.sa.zain.com• Ongoing community investment programs (including Mashroee Zainand Shabab Tahmouh)• Sponsorship of sports and eventsThe Environment • Building and maintaining the network• Energy, material, and resource consumptionInvestors • Quarterly investor reports• Annual Financial Reports• Ongoing investor meetings and road shows• Long-term, secure and financially rewarding contracts and relationships• Prompt payment upon delivery• Digital inclusion, additional choice and innovation in the mobile marketplace• Increased competitiveness of the telecommunications sector• Integrity, trustworthiness and a growing economic contribution• The health and safety of mobile technology, especially electromagnetic fields• Little or no noise and visual pollution from mobile masts and base stations• Investment in the local community• Ongoing reductions of GHG emissions• Minimum use of finite resources• Protection of ecological systems• Strong economic performance and return on investment• Strong corporate governance and compliance with all rules and regulations• Ongoing demonstration of business and management excellenceGovernment andRegulatory Bodies• Mandatory quarterly reporting• Ongoing sector meetings• Daily interaction with CITC and other government /regulatory representatives• Ongoing sector development and innovation, advancing services to society• An open, fair and competitive telecommunications sector• Compliance with national laws6 | Zain Saudi Arabia 7 | Sustainability Report 2010

Our SustainabilityFrameworkDelightingCustomersOur commitment to sustainability is based on three central outcomes:IntegrityHolding true to our values and ethics as a company,conducting business as a fair competitor that bringschoice, innovation, improved pricing and great qualityto the market.TrustBuilding mutually beneficial relationships and confidencebased on safe, responsible, reliable and on-timeoperational performance, earning a high level oftrust from all our stakeholders.InnovationLeading the deployment of innovative products andservices that add significant value to individuals,businesses and government alike.The three central outcomes are surrounded by seven sustainability focus areas, whichcreate the framework for reporting, as well as our internal sustainability strategy.Delighting CustomersProvide the most advanced platform, together with next generation mobile technology toenable individual, business and government customers to live, conduct business, and provideservices in a secure and supportive environment, within Saudi Arabia and overseas.Pioneering NetworksMaintain and constantly develop our network, offering the most advanced technology tocustomers across Saudi Arabia in a responsible and sustainable manner.Creating a Dynamic TeamBe recognized as an employer of choice in Saudi Arabia through the creation of a dynamic,vibrant, safe and engaging work environment that is aligned to the ten principles of Zain,reflecting our corporate values.Building PartnershipsCreate long-term business relationships that deliver mutual growth and prosperity basedon the Zain values.Developing CommunitiesHarness the power of our products and services to create both direct and indirect positiveimpacts on the communities we serve.Improving the EnvironmentReduce our own environmental impact, while providing advanced solutions to helpreduce our suppliers’ and customers’ impact, and the impact of the ICT sector as a whole,by pioneering solutions for a low carbon society.Adopting Best PracticeConduct business in a responsible and transparent manner, holding ourselves accountableto our investors and the wider group of stakeholders as a way of improving performance.Improving theAdoptingBest PracticeEnvironmentDevelopingCommunitiesIntegrityTrustInnovationBuildingPartnershipsPioneeringNetworksCreating a DynamicTeam8 | Zain Saudi Arabia 9 | Sustainability Report 2010

Our 2010 SustainabilityPerformanceSustainability ManagementThe creation of this baseline report and development of an internal sustainability strategy has been driven by theCorporate Social Responsibility (CSR) department within Zain Saudi Arabia. This will evolve in 2011 as we work toembed sustainability management across the organization and further engage with stakeholders on the subject ofcreating a more sustainable Saudi Arabia.In 2011, Zain Saudi Arabia commits to the creation of a sustainability function that will work to implement thesustainability strategy across all areas of the organization.Delighting Customers (Key Perfomance Indicators) 2008 2009 2010Number of customers 2,000,000 5,232,000 8,393,000Number of mobile broadband customers – 91,000 250,000Maximum speed of broadband (Mbps) – 7.2 14.4Number of innovative M2M connections – – New IndicatorMobile TV accessed – 328,330 337,005Ring-back tones downloads – 1,045,876 1,288,503Ring-back tones subscriptions – 1,100,345 2,234,639Short code requests – 2,903,186 3,634,315First call resolution (%) – 97% 98%Pioneering Networks (Key Perfomance Indicators) 2008 2009 2010Number of sites 1,590 2,480 3,367Number of LTE enabled sites – – 300CITC 3G population coverage obligation (%) 50.95% 61.07% 65.00%3G population coverage (%) 59.30% 69.04% 71.45%Number of sites shared 144 396 483Number of reduced noise generators 500 900 1300Creating a Dynamic Team (Key Perfomance Indicators) 2008 2009 2010Number of employees 375 420 626Employee engagement index (out of 5) – – 3.87Employee turnover rate (%) 6.9% 12.6% 7.2%Saudization rate (%) 56.6% 56.0% 61.3%Average hours of training per employee 20 48 49Female employment rate (%) – – New IndicatorBuilding Partnerships (Key Perfomance Indicators) 2008 2009 2010Number of strategic business partners 10 11 12Combined number of employees within strategic business partners 180 986 918Strategic business partner employees somewhat engaged (%) (*Q4 of 2009, **Q2 of 2010) – 59%* 64%**Developing Communities (Key Perfomance Indicators) 2008 2009 2010Community investment expenditure (SAR) – 1,951,629 5,083,461Number of CSR initiatives aligned to core services – – 2Number of women involved in Mashroee Zain 10 33 40Number of youth involved in Shabab Tamouh – – 36Improving the Environment (Key Perfomance Indicators) 2008 2009 2010Total electricity usage (KwH) – 70,647 87,891Electricity per employee (KwH) – 172 140Total water usage (liters) – 5,571,000 13,619,000Water per employee (liters) – 13,588 21,756Emissions from electricity usage (kg) – 57,648 71,719Emissions per employee (kg) – 140 114Mobile recharges through electronic methods (%) – 5% 22%Customers using e–billing – – New IndicatorAdopting Best Practice (Key Perfomance Indicators) 2008 2009 2010GRI level of sustainability report – – BSustainability report commitments achieved (%) – – New IndicatorNumber of formal stakeholder sustainability engagements – – New Indicator10 | Zain Saudi Arabia 11 | Sustainability Report 2010

DelightingCustomersDelightingCustomersOur Ambition: Provide the most advanced platform, togetherwith next generation mobile technology to enable individual,business and government customers to live, conduct business,and provide services in a secure and supportive environment,within Saudi Arabia and overseas.AdoptingBest PracticePioneeringNetworksImproving theEnvironmentIntegrityTrustInnovationCreating a DynamicTeamDevelopingCommunitiesBuildingPartnerships12 | Zain Saudi Arabia 13 | Sustainability Report 2010

DelightingCustomersRapid Expansion (customer numbers)2011 target201020095.2 million2008 2 million8.3 million10 millionZain Add-ons This service allows businessesto start with Zain’s competitive basic package,customize it by selecting only the relevantadd-ons and features according to theirbusiness needs, adapted to their employees’use. This provides greater choice and helpscompanies to eliminate unnecessary costs.The range of add-ons currently includes:Business Private Network – for communicating between employeesBusiness to Business Private Network – for employees and fiveselected companiesGlobal Advantage – 30% discount on international callsBusiness Best – monthly commitment, no fees and free Global AdvantageOn-Net SMS – 350 texts for a low monthly feeLaunch Package (1+1)One month paid by the customer,the next month paid by Zain.Zain Time Package35% discount during your favoritetime: morning, evening or night.Mazaya PackageA post paid plan withtailored benefitsWeekend PackageOffers 2 Riyals for every Riyalconsumed over the weekend.10/10 Package10 Riyal day-long bonus creditif customer consumes 10 Riyalsthat day.International PackageUp to 50% permanent discounton two international numbers andadditional services.Connecting PeopleThe most powerful way to enable customers is through facilitating connections betweenindividuals, families, friends and businesses in a tailored and cost-effective manner withinthe Kingdom and internationally.Greater Choice and Innovation for ConsumersAs the third entrant to Saudi Arabia’s mobile voice and data market, Zain has adopted a strategyto offer innovative and value-for-money packages that target previously underserved segmentsand to offer greater choice and value.Leveraging extensive regional experience and significant brand value from its Saudi launch in2008, Zain has offered many innovative packages for the first time in the Kingdom. The focuson service innovation has helped the company to rapidly establish a solid base of customersthat continues to expand and achieve the corporate targets set for the next five years.In 2011, Zain Saudi Arabia commits to launching five new innovative packages that increaseaccess to mobile telecommunications and enable more connections. These will include:Zain Super – the only package offering customers their choice of discount on local andinternational calling.Toon Package – the only package introduced specifically for children ensuring use of mobiletelecommunications services in a safe and secure manner, with a full range of parental control.It is the only line in the Kingdom to provide free Spacetoon content including videos, sounds,ring tones and edutainment.RoamingZain Saudi Arabia’s aim is to ensure customers are not only enabled within the Kingdom, butoverseas, allowing them to connect with family, friends, and do business while traveling. Thecompany has rapidly established international partnerships with over 440 operators world-widethat ensure customers may use their mobile phones while traveling overseas to over 160 countries.Zain also provides customers with a large range of in-air roaming options covering 11 airlines,and counting, allowing them to remain in contact while flying.The ONE Network – World’s First Borderless NetworkLaunched in 2008, the ONE Network is the world’s first borderless mobile service, offeringexcellent rates without high roaming charges while traveling in any ONE Network country.Benefits include the facility to receive calls with the most attractive rates, make calls at localrates, recharge with local recharge cards, and call their home country’s Customer Care centerfree of charge. This excellent product is another way in which Zain enables customers toconnect across borders. Countries included are Jordan, Bahrain, Iraq, Sudan, Nigeria, Uganda,Burkina Faso, the Republic of Congo, the Democratic Republic of Congo, Gabon, Chad,Tanzania, Kenya, and Malawi.Enabling Business and GovernmentZain Saudi Arabia provides solutions that enable businesses and government to perform andinnovate within their sectors.Greater Choice and Innovation for BusinessesIn line with its vision and values, the company provides a set of standard packages for businesscustomers, and aims to build innovative, tailored and customizable solutions that suit theneeds of enterprises, of all sizes and in all sectors.Zain Saudi Arabia brought greater choice to the market by allowing business owners to benefitfrom a range of features that include:• Dedicated customer care – business call center, service specialist and self-service portal.• The ONE Network – connection to the world’s first borderless network.• BlackBerry – voice and data offers for BlackBerry users to help create a mobile office solution.• Private numbering and short codes – private company numbering plans and short codedialing systems.• Hybrid lines – post-paid and prepaid hybrid SIM cards.• Cost control – spending limits, calling rates, split calls and ‘on your time features’.Zain GateAn innovative solution that helps businesses save up to 40% on their fixed-to-mobile calls.Customers’ fixed-to-fixed calls are still carried by their fixed service provider, while fixed-to-mobilecalls are ‘converted’ into Zain mobile-to-mobile calls at a lower tariff. Zain Gate is helpingbusinesses reduce costs, while allowing Zain to access a proportion of the fixed market.New Smart Office Products in Association with GoogleIn 2011, Zain Saudi Arabia commits to launching a new smart office product for businesscustomers offering a unique bundle of Google applications, voice, SMS, and mobile broadband.With this ‘office in a box’, business customers will gain all the functionality of Google Apps,together with the best prices from Zain increase productivity, collaboration, communicationand effectiveness, while reducing IT and telecommunications costs. A regional first, thisproduct is another illustration of Zain’s commitment to providing greater choice and innovationto the Saudi market.M2M InnovationMachine-to-Machine (M2M) data transfer services are growing rapidly in application and usageas more and more hardware devices and software applications are developed worldwide. Atpresent, Zain Saudi Arabia offers data SIM Card Solutions for businesses to manage their fleetor team, track logistics and stock, conduct security surveillance, and conduct on-site datacollection.M2M data transfer has the potential to transform whole sectors – in particular the utilitiessector – with the emergence of smart grids, as well as the security, healthcare, governmentand retail sectors.The emergence of M2M highlights the need for stakeholder collaboration for large-scalesector-based innovations. In 2011, Zain Saudi Arabia commits to conduct a series of pilotprograms with organizations and government entities to develop new solutions for the waywe work, deliver education and healthcare, conduct commerce, and tackle climate change.The Power of Mobile BroadbandThe rapid development and deployment of wireless broadband technology is allowing morepeople across the world to gain access to the internet, enabling them to connect, interact,collaborate, engage, transact, be informed and inform in new and innovative ways throughtheir mobile phones or other mobile internet devices.14 | Zain Saudi Arabia 15 | Sustainability Report 2010

Mobile Broadband2011 Target20102009250,00014.491,0007.2Mobile broadband customers1,000,00075Maximum speed of broadband (Mbps)Content and Entertainment 2009 2010 2011 TargetEntertainment downloads 158,116 41,392 53,170Mobile TV accessed 328,330 337,005 457,978Ring-back tone downloads 1,045,876 1,288,503 2,670,704Ring-back tone subscriptions 1,100,345 2,234,639 2,508,174Information channel subscriptions 77,378 158,288 155,319Short code requests 2,903,186 3,634,315 5,459,556Call Center in Numbers 2008 2009 2010 2011 TargetNumber of call center calls 19,055,851 77,821,434 86,163,039 –Average speed of answer (sec) 106.00 52.25 50.42 30First call resolution – 97% 98% >98%The Kingdom’s Broadband PotentialBroadband penetration in Saudi Arabia stood at around 16% of the population in 2010, withbroadband house penetration at 41.6%. Overall internet penetration is expected to reach 41%of the population by the end of 2010. (Source: CITC ICT Indicators in KSA 2010. www.citc.gov.sa.) Wireless broadband has seen the greatest growth as the easiest, fastest and cheapesttechnology to deploy, used on mobile phones, computers and through mobile broadbanddevices such as USB dongles or 3G routers.It is predicted that the Kingdom will become a regional leader in the provision of mobilebroadband services, as mobile phone penetration exceeded 180% in 2010, and as operatorscompete to provide the fastest, widest reaching coverage in the Arab World’s largest country,in terms of geographical size, with the largest population in the GCC region.Zain Saudi Arabia Mobile BroadbandZain recognizes the power that mobile broadband has to enable customers, be theyindividuals, organizations or government. Mobile broadband will help revolutionize multiplesectors such as entertainment, education, health and energy, while acting as a foundationfor rapidly growing business norms such as cloud computing and teleconferencing. Moreinformation regarding the company’s commitment to innovation is available in the ‘EnablingBusiness and Government’ section on page 15.For the individual, the company offers a range of value-for-money mobile broadbandpackages, as well as innovative mobile broadband devices such as USB dongles and Zain-Fi,enabling customers to access high speed internet on their mobile phones and computersanywhere, without the need for an ADSL fixed line.Zain-Fi – A Personal Wireless Broadband NetworkZain Saudi Arabia is the first operator to introduce the concept of pocket-sized devices thatallow individuals to create a wireless broadband internet network anytime and anywhere, atthe cost of only one mobile subscription. A minimum of five people are able connect to theinternet simultaneously through the device, with speeds of up to 7.2 mega bits per second(Mbps), providing easy access to broadband on the move.As a major area of focus, Zain Saudi Arabia has made significant investments in its mobilebroadband network and services. This investment has yielded rapid growth in the number ofbroadband subscribers in 2010, with forecasts for significant growth in 2011, helping to tacklethe Kingdom’s low internet penetration.Zain DelightIn 2011, Zain Saudi Arabia commits to launching Zain Delight, the world’s first mobilebroadband prepaid internet service. Consumers will gain access to high-speed mobilebroadband with no package expiry, no renewal charge, no monthly bills and no long-termcommitment – just internet charged per MB. This unique service will help bring mobilebroadband to everyone, providing customers with unbeatable prices per MB, together withfreedom and control over their internet expenses.Pioneering Long Term Evolution (LTE)Zain Saudi Arabia is conducting the largest LTE network trail in the world, with the aim ofcreating one of the largest wireless broadband internet networks in the region with speedsof up to 100 Mbps. This initiative will help to rapidly increase internet penetration, whileproviding more customers access to faster and more reliable wireless internet service. Furtherinformation regarding our LTE ambitions is available in the ‘Pioneering Networks’ section onpage 22.Content and EntertainmentZain offers a range of online content and entertainment that can be received or subscribedto by text message, downloaded online or downloaded directly through handsets.Content and entertainment is grouped into themes such as sport, children, religion, world, andlifestyle. It currently includes downloads (music, games, themes, wallpaper, greetings tonesand screen savers), mobile TV (news, series and movies), ring-back tones (download andsubscription available), information channel subscriptions (news, events and informationdirectly to your handset), and short codes (text 2 TV, Facebook, Twitter, etc).The company will continue to offer a wide range of unique and value-added content andentertainment. Also, in 2011, Zain Saudi Arabia commits to research the feasibility anddemand for ‘green’ content, raising environmental awareness and empowering people to takeaction on the environment.Customer CareWithin a short period of time, the company built a reputation for high standards of customercare and a dedication to ensuring a positive Zain experience for every customer.Zain Saudi Arabia interacts with customers through traditional channels such as call centersand shops. In 2010, the company also launched a range of alternative channels that provedpopular with customers. These include web (self-care portal, Facebook, YouTube, Twitter), SMS(balance enquiry, enquiry about complaints, increasing limit, etc), IVR (detailed bill, roamingprices, increasing limit etc), and email.In addition to these features, Zain’s Network Department has a customer care function thatdirectly receives network-related complaints on coverage, quality and reliability. It also dealswith credit control and collection. Adding a human feel to this function ensures a seamlesscustomer interface.Call CenterThe number of calls to Zain Saudi Arabia’s call center continues to rise, although at a decreasingrate to the growth in customers. To ensure good customer service we continue to reducethe time it takes for a call to be answered, hitting 50.42 seconds in 2010 with a target of30 seconds in 2011. The percentage of questions and concerns raised by customers that aredirectly resolved in the first call hit 98% in 2010.Web Selfcare PortalThis was launched in November 2009, enabling customers to manage their subscriptionsthrough the website. A study conducted at the beginning of 2009 showed that competitors’web portals had too many features, without a proper focus on the user experience. Zain SaudiArabia decided to launch a portal with priority given to the most important services forcustomers, focusing on a pleasant user experience. Feedback has been extremely positive andwe continue to develop the Selfcare portal, accommodating all the feedback and suggestionsreceived from customers.In 2011, Zain Saudi Arabia commits to gather and publish customer satisfaction results andsuggestions, together with our response and systematic management of customer feedback.Information SecurityInformation security is one of the most important factors in building trust and demonstratingintegrity. To ensure the protection of data and information, the company has created anInformation Security Policy and ensures its enforcement on a day-to-day basis across theorganization.Information Security PolicyZain Saudi Arabia is committed to serve as a leading provider of telecommunications servicesto its stakeholders inside and outside the Kingdom. The company approved its policystatement to set a clear corporate direction and commitment to information securitythroughout the organization, ensuring business continuity and customer satisfaction.Zain is committed to continually ensuring that:• confidentiality, integrity, and availability of information is secured and maintained• regulatory and legislative requirements are met• Business Continuity Plans are produced, tested, and maintained• information security awareness is delivered to all staff• any cases of information security breach is reported and investigatedThe company will continually strive to review and improve the Information Security Policy on aperiodic basis. The policy is the responsibility of every member of the organization, includingcontractors, suppliers, and service providers.ISO CertificationDemonstrating the company’s commitment to the highest standards in internal and externalinformation system management and security, Zain Saudi Arabia has two ISO certifications:• ISO 27001 – Information Security Management System• ISO 20000 – IT Service Management SystemThese international recognitions of our IT and information security management systems helpto ensure that customer data is kept safe and protected at all times.16 | Zain Saudi Arabia 17 | Sustainability Report 2010

PioneeringNetworksOur Ambition: Maintain and constantly develop our network,offering the most advanced technology to customers acrossSaudi Arabia in a responsible and sustainable manner.AdoptingBest PracticeDelightingCustomersPioneeringNetworksImproving theEnvironmentIntegrityTrustInnovationCreating a DynamicTeamDevelopingCommunitiesBuildingPartnerships18 | Zain Saudi Arabia 19 | Sustainability Report 2010

PioneeringNetworksWhat is Infrastructure Sharing?Infrastructure sharing can take a number offorms including site, network and spectrumsharing, national roaming and towercompanies. This is sometimes adopted byregulators to encourage competition andboost the performance of operators.Benefits include:• reducing operators’ investment requirements by sharing network development costs• offering new sources of revenue for incumbent operators• shifting operators’ focus towards service innovation, instead of network deployment• increasing access by expanding to less dense areas and meeting Universal Service Obligations and targets• reducing negative environmental impacts as a result of less network build-up• optimizing the use of scarce resources, particularly the right of wayOur Physical Network 2008 2009 2010Total number of sites 1,590 2,480 3,367Number of 2G sites 1,590 2,480 3,367Number of 3G sites 1,067 1,579 2,000Number of LTE sites New sites New sites 300 trialsCoverage 2008 2009 2010CITC 2G population coverage obligation 63.89% 70.95% 80.30%2G population coverage (%) 70.15% 83.10% 88.26%CITC 3G population coverage obligation (%) 50.95% 61.07% 65.00%3G population coverage (%) 59.3% 69.04% 71.45%Reliability 2008 2009 2010Radio availability (%) 98.4% 98.88% 99.21%Drop call rate (%) 0.76% 0.63% 0.58%Site Sharing In Numbers 2008 2009 2010Total number of shared sites 144 396 483Shared sites – Zain on other operators 144 396 479Shared sites – other operators on Zain 0 0 4Noise and Visual Pollution 2008 2009 2010Number of sites with reduced noise generators 500 900 1,300Number of ‘palm tree’ sites New sites 5 15Physical NetworkDuring the first three years of operation, Zain Saudi Arabia’s focus has been the rapiddeployment of a wide reaching and high quality network, covering the Arab region’s largestcountry. This challenge was compounded by an obligation to the regulator (CITC) onpopulation coverage, a condition for receiving the Kingdom’s third mobile operator license.This challenge was overcome in two ways: through the development of a comprehensive andmodern physical 2G, 3G and HSPA network that is easily scalable and upgradable, allowing forsignificant growth in the number of subscribers and ongoing evolution in mobile technology;and by pioneering the concept of site and infrastructure sharing in the Kingdom.In 2010, Zain Saudi Arabia launched the world’s largest trial of Long Term Evolution (LTE)technology capable of revolutionizing mobile broadband to deliver speeds of up to 150 Mbpsto handsets. With 300 LTE sites, commercial testing is due to begin as soon as the companyreceives approval from the regulator and the technology becomes widely available for use onhandsets and other mobile devices.In 2011, Zain Saudi Arabia commits to enhance our mobile broadband services with the introductionof 3G voice and HSPA of up to 42 Mbps covering 11 cities. The company will also start workingon a fiber optic network that will provide even faster and more reliable services in the future.Coverage and ReliabilityIn 2008 the company recognized that wide reaching coverage and a high quality network wereintegral to the successful launch of its services. Significant investments and innovative infrastructuresharing partnerships were made to rapidly cover a large proportion of the population with highquality mobile voice and broadband services.CoverageThe virtual network covered more than 400 cities and 50 highways in 2010, exceeding allpopulation coverage obligations set by the CITC on both 2G and 3G services. This has been aconsistent achievement since launch, demonstrating the speed and commitment the companyhas to develop its network.Universal Coverage – Reaching Remote AreasIn 2010, Zain Saudi Arabia was awarded a contract from the CITC’s Universal Service Fund forthe provision of voice and internet services to remote areas in the Kingdom. This will involvethe roll out of over 500 new sites to bring coverage to remote areas not currently served byany of the Kingdom’s three operators.ReliabilityTo ensure the provision of a high quality service to all customers, the network features severallevels of protection to ensure continuous and consistently high quality network service througha wide variety of conditions.Continuing investment in modern technology ensures an ever improving radio availability rateand decreasing drop call rate, ensuring Zain Saudi Arabia comfortably outperforms the CITCstandards of

Creating a DynamicTeamOur Ambition: Be recognized as an employer of choice inSaudi Arabia through the creation of a dynamic, vibrant, safeand engaging work environment that is aligned to the tenprinciples of Zain, reflecting our corporate values.DelightingCustomersAdoptingBest PracticePioneeringNetworksImproving theEnvironmentIntegrityTrustInnovationCreating a DynamicTeamDevelopingCommunitiesBuildingPartnerships22 | Zain Saudi Arabia 23 | Sustainability Report 2010

Creating aDynamic TeamFull-time Employees by Level 2008 2009 2010 2011 TargetSenior management positions 15 15 32 37Middle management positions 55 73 97 114Team members 305 332 497 579Total 375 420 626 730Employee Engagement Survey Results (out of 5)Employee engagement indexJob designOrganizational healthManagerial excellenceExtrinsic rewardsWorkplace readinessOther drivers3.87 53.9553.423.59553.1953.623.6355HR Innovation ASK HR is a function within the HR Departmentresponsible for responding to employee enquiries. It ensuresemployees receive timely and accurate responses, providing liveresponses, guidance and support. As a unique innovation theASK HR function also works to provide support to the employeesof our strategic business partners, as discussed on page 31.Employee Turnover 2008 2009 2010Total employee turnover 26 53 45Total employee turnover (%) 6.9% 12.6% 7.2%Turnover by levelSenior management 3 6 3Senior management (%) 20% 40% 9%Middle management 6 14 7Middle management (%) 11% 19% 7%Team member turnover 17 33 35Team member turnover (%) 6% 10% 7%Turnover by genderFemale turnover – – New indicatorFemale turnover (%) – – New indicatorMale turnover 26 53 45Male turnover (%) 6.9% 12.6% 7.2%Turnover by age group18-30 12 20 2218-30 (%) 6% 11% 7%31-40 7 23 1831-40 (%) 5% 12% 7%41-50 6 7 441-50 (%) 20% 21% 8%51-60 1 3 151-60 (%) 9% 27% 7%Living our ValuesThe Zain vision, values and culture are a major contributor to the attraction and retention ofhigh quality talent. Zain is well known regionally for living its core brand values, which areradiance, heart and belonging. These powerful brand values have helped to create demandto join Zain Saudi Arabia – in 2008, queues formed outside the corporate office in Riyadhupon launch. Since then, the company has worked hard to live up to this brand promise byembedding the values, principles and culture of Zain across the organization.The Human Resources (HR) team of 27 employees handles a variety of functions aimed ateffectively managing the company’s human capital, improving the effectiveness of individualsand teams, and fostering a healthy and productive professional environment. Zain aims toestablish optimum working conditions that provide all employees with the opportunity forpersonal and professional development and fair compensation, while working in an ethical,equitable, and dynamic environment.Zain Saudi Arabia’s HR work is governed by a range of clear manuals that detail HR policy andprocedures, all of which are aligned to the laws and regulations of Saudi Labor Law, and furtherdeveloped based on the Zain values and principles. As a result, we have set ambitious targetsin all areas, especially with regard to the employment of Saudi nationals. To aid this, Zain hasdeveloped the HR Pioneer Program to build the capacity of nationals. This program is beingrolled out across the organization.In addition, the HR Department oversees outsourcing activities and acts as an HR consultantfor other departments within Zain to support them in their strategy regarding contractors andbusiness partners. For further details, refer to the ‘Building Partnerships’ section on page 31.The HR Department also handles governmental relations regarding labor laws and regulations,registering expatriates, and deals with the travel requirements of Zain employees.Employee ProfileIn 2010, the workforce consisted of 626 full-time permanent contract employees, continuingits year-on-year growth since launch. Zain Saudi Arabia has no part-time temporary contractemployees or casual labor. However the company relies on a large amount of contracted labordue to its outsourcing model. For further details regarding outsourced labor, refer to the‘Building Partnerships’ section on page 31.Employee Engagement and RetentionAs a way of ensuring employee engagement and satisfaction, the HR Department has put inplace a comprehensive range of two-way communications channels, measurement and trackingsystems and a clear open door policy between employees at all levels. The Human ResourcesContact Center (HR CC), part of the HR Shared Services organization, is designed to respondto enquiries regarding HR policy and procedure.HR CC interacts with Zain employees via e-mail, the HR portal, web requests through theintranet self service section, live chat, phone, SMS, fax and post.Tracking Employee EngagementZain Saudi Arabia conducts an annual employee engagement survey that covers multipleelements of engagement and satisfaction including job design, organizational health,managerial excellence, extrinsic rewards, workplace readiness and areas for improvement.In 2010, the results of the survey highlighted a number of areas for improvement, as well assome successful employee engagement points. The Sales Department has a consistentlyhigh engagement rating across multiple functions and drivers. Directors and managers alsoscore highly on engagement. Areas that require the most attention include the Finance andNetworks departments.Results of these annual surveys are presented to senior management, as well as relevantdepartmental managers, to ensure they take action to improve levels of employeeengagement and satisfaction.Employee TurnoverEmployee turnover is often a clear indicator of overall work environment and employeesatisfaction. In 2010, our turnover rate stood at 7.2%, a reduction from 12.6% in 2009, makingus one of the top private sector performers in Saudi Arabia. Zain aims to continue reducing thisfigure to below 5%, while continuing to expand.Remuneration and BenefitsZain Saudi Arabia offers all employees highly competitive packages that reflect their levelof qualification and skill, and set well above the local minimum wage. Competitiveness ismaintained using ongoing market-based pay studies to ensure the company remains anemployer of choice.Benefits provided to full-time employees include:• airline tickets for expatriates• holidays (including marriage, compassionate, exam, maternity and paternity)• handset allowances• mobile lines (data and voice) for employees and their families• education allowances• connect devices• medical insurance for employees and their families• subsidized gym membership• all benefit plans as per the General Organization for Social Insurance (GOSI) and Labor laws• severance packages24 | Zain Saudi Arabia 25 | Sustainability Report 2010

Creating aDynamic Team2008 2009 2010 2011 target56.6% 56.0% 61.3% 68.2%Saudi nationals ExpatriatesGovernment mandatedSaudization rate forcommunications sectorof 500-2,999 employeesRed 0-9%Yellow 10-29%Green 30-74%Excellent >75%Human Resource Development Fund In 2011, Zain Saudi Arabiacommits to finalize an agreement with the Human ResourceDevelopment Fund to take Saudi university graduates into a 32-weektraining program. Upon completion, qualified candidates will beoffered employment by Zain Saudi Arabia. This program aims toincrease the company’s female employment rate and Saudization rate.Training 2008 2009 2010Total number of training (hours) 7,362 19,957 30,924Average hours of training per employee 20 48 49Total cost of training as a % of OPEX 0.03% 0.08% 0.26%Average cost of training per employee (SAR) 2,500 3,000 4,180Average hours of training per employee by employee categorySenior managers 6 9 13Middle management 3 5 6Team members 3 4 13Diversity 2010 2011 TargetFemale N/A 9Female employment rate (%) N/A 1.23Male N/A 721Female participation in management positionsFemales in middle management positions N/A 1Females in senior management positions N/A 0Age Diversification 2008 2009 2010 2011 TargetTotal workforce by age group (%)18-30 (%) 52 43.8 47.1 50.331-40 (%) 37.07 45.5 42.7 41.141-50 (%) 8 8.1 7.8 6.351-60 (%) 2.93 2.6 2.4 2.3Health and Safety 2008 2009 2010 2011 TargetEmployee injuries 0 1 0 0Employee fatalities 0 0 0 0SaudizationZain Saudi Arabia recognizes the importance of the national policy to encourage the employmentof Saudi nationals. Saudization benefits the local and national economy, while bringing directvalue to Zain by harnessing local talent that understands the culture and market of the Kingdom.Demonstrating this priority, as part of the bid for the third mobile telecommunications license,Zain committed to achieve a Saudization rate of 81% by the year 2012, putting the companyinto the ‘Excellent’ category as defined by the Ministry of Labor.In 2010, the company’s Saudization rate increased from 56% to 61.3%, demonstrating thetangible results of a number of initiatives. However, it is recognized that more will need to bedone in order to accelerate the recruitment of nationals in order to reach the 81% target by 2012.As the company enters its third year and the employee base settles, Zain hopes to targetfresh Saudi graduates as a major source of future employees, while promoting from within asexperienced positions become available. As a result, all vacancies are advertised internally asa first step. If a vacancy is not filled internally, then the position is advertised externally withpriority given to qualified Saudi applicants.Development and LeadershipOngoing training and development is the foundation of creating a dynamic, innovative and loyalworkforce. Zain Saudi Arabia invests heavily in the development of employees, ensuring thattraining programs contribute to employees’ personal and professional development. The overallaim of the company’s training programs is to enhance capacity by providing the most advancedleadership training, while investing in developing the next generation of Saudi leadership.Development Needs IdentificationDevelopment needs are identified by line managers in collaboration with the HR Department,with 100% of employees receiving regular performance and career development reviews asof November 2010. The company’s target is to maintain this level as it continues to grow at arapid pace.TrainingZain Saudi Arabia conducts two types of training: commercial training managed by thedepartments with oversight from the HR Department; and tailored programs, as well asgeneral Zain training managed by the HR Department.In 2010, five main training programs were implemented, all of which were developed internally.These included:• Zain Way to the Market – helps all employees to understand the business and its brand.• Service Excellence – designed for in-source and out-source Customer Care and Sales staff,this program focuses on enhancing the quality of service delivery.• CIDP Certification – a tailored program that helps HR Department members developessential HR skills. It provides the inputs needed to be more effective at work and addsvalue to their HR functions.• Leadership Development Program – designed for Chief Officers, this program consistsof six leadership-based elements, each of which is tackled over a one-month period.• Fresh Graduates Pioneers Program – for fresh graduates, this program provides the toolsand insights needed to accelerate new employees’ careers.2010 was a unique year in the provision of a large amount of basic training to all employees. Thecost of training is expected to reduce in future due to an increase in internal training capacity. In2011, Zain Saudi Arabia commits to provide three new employee training programs in responseto needs highlighted by our employee performance and career development reviews.Equal Opportunities and Human RightsEquality and respect for human rights are central to Zain’s principles and values. The companydoes not tolerate discrimination and continues to actively embed a culture of respect andnon-discrimination across all levels of the organization.DiversityThe Zain team represents a young and vibrant organization that is rapidly evolving. In 2010,the company implemented all necessary governmental requirements for hiring women, andwe are now actively recruiting qualified females. Zain Saudi Arabia will hire about nine femaleemployees by the end of 2011, representing 1.23% of the workforce.As part of our commitment to providing equal opportunities, the male to female salary ratiois 1:1 for all positions. Zain also continues to work with its partners in the employment anddevelopment of women.Human RightsZain Saudi Arabia is in full compliance with all laws and regulations of the Kingdom of SaudiArabia. These cover areas like abolition of child labor and the prevention of forced andcompulsory labor. The Saudi Labor Law allows the formation of trade unions within organizationswith over 100 employees, with a maximum of nine members.Grievance and escalation procedures are in place for reporting incidents of discriminationand any other kind of personal or professional conflicts and human rights abuses. These arecurrently resolved within the concerned departments, in collaboration with relevant membersof the HR Department. To date, the company has received no formal complaints regardingdiscrimination or human rights abuses.Health and SafetyThe HR and Facilities departments work together to ensure the health and safety of allemployees. This includes the provision of full medical insurance for employees and theirfamilies, as well as the maintenance of a healthy and safe environment in all company offices.To date, Zain Saudi Arabia has had no incidents of employee fatalities and one recordedemployee injury. This occurred in 2009, a car accident while an employee was driving homefrom work. The company aims to maintain its record of zero injuries and fatalities in the future.26 | Zain Saudi Arabia 27 | Sustainability Report 2010

BuildingPartnershipsOur Ambition: Create long-term business relationships thatdeliver mutual growth and prosperity based on the Zain values.AdoptingDelightingCustomersBest PracticePioneeringNetworksImproving theEnvironmentIntegrityTrustInnovationCreating a DynamicTeamDevelopingCommunitiesBuildingPartnershipsBuildingPartnerships28 | Zain Saudi Arabia 29 | Sustainability Report 2010

BuildingPartnershipsGroundbreaking Alliance with Google In 2011 Zain Saudi Arabia willsign an exclusive agreement with Google Enterprise, the first of itskind in the Middle East. In association with Google, Zain will offerbusiness customers in Saudi Arabia access to a range of innovativeapplications and software, as well as customized business packagesthat improve productivity while reducing operational costs.The Supply Chain 2008 2009 2010Suppliers and vendors 583 211 228HR Business Partners 2008 2009 2010 2011 TargetStrategic business partners 10 11 12 15Combined number of employeesfrom strategic business partners 180 986 918 1,107Number of HR business partners 3 5 5 8Strategic Business Partners’ EngagementQ3 2009Q4 2009Q2 101028%18%38%41%Engaged Somewhat engaged Not engaged21%23%53%41%36%The Zain Saudi Arabia Supply ChainZain Saudi Arabia sits at a pivotal point in the supply chain that works to deliver a seamlessmobile telecommunications service to the people of Saudi Arabia. The company works togetherwith 228 suppliers and 12 strategic business partners that in turn support a chain that extendsacross the Kingdom and internationally.Organizations that Zain works with directly can be divided into two categories: vendorsand suppliers; and strategic business partners. The latter take responsibility for certain coreoperations, such as:• sales• deployment and maintenance of the physical network• customer careThe company recognizes the moral responsibility – as well as the commercial imperative – toensure that vendors, suppliers and strategic business partners operate to the highest standardsof excellence. This includes fair treatment of employees, adherence with quality standards andregulations, and implementation of efficient production, which often leads to cost andenvironmental savings.To ensure the high performance and integration of its strategic business partners, Zain SaudiArabia has developed a unique interaction model that brings strategic business partners closerto Zain through their Human Resources. At present, there is no system in place to analyze thesustainability performance of suppliers and strategic business partners, and the company doesnot fully embed sustainability criteria into its selection or contracting process.For further information on working with business partners in the safe and environmentallyfriendlydeployment of Zain’s network, refer to the ‘Pioneering Networks’ and ‘Improving theEnvironment’ sections on pages 21 and 39 respectively. The company also works with certainsuppliers to develop products and services that help customers reduce their environmentalimpact – for more information see page 39.Building Strategic Business PartnershipsZain Saudi Arabia’s strategic business partners are crucial to organizational success. Zain hasdeveloped a unique program to ensure that these organizations and their employees are notjust contractors, but part of the Zain family. This helps to ensure high quality and mutuallybeneficial long-term partnerships.This is achieved through the deployment of Human Resource Business Partners (HR BP), whichact as an interface between Zain and the strategic business partners’ 1,811 employees to integratethem into Zain’s culture, values and principles.The responsibilities of HR BP include:• acting as an internal HR advisor to business partners’ management teams• providing advice and expertise to team managers in the development and management ofemployees (for example in professional evolution, help with professional projects and recruiting)• managing social relationsIn 2011, Zain Saudi Arabia commits to include a wider range of environmental, health andsafety (EHS) issues into our terms of engagement with strategic business partners.Strategic Business Partners’ EngagementZain Saudi Arabia conducts quarterly strategic business partner employee engagement surveysas a key measure of success in the deployment of the HR BPs. Results of the survey haveconsistently improved quarter-by-quarter. In the second quarter of 2010, around 41% of strategicbusiness partner employees felt engaged and part of the Zain family, with 23% somewhatengaged and 36% not engaged. This represented a marked improvement from 2009.Zain Human Resources Interface with Strategic Business PartnersZain HRDepartment (SSE)Learning & Development HR & Managers/ Partner 1Total RewardShared ServiceExpertise (SSE)• Network of experts withfunctional reporting to theprocess owner (HRD).• Most objectives are set bythe process owner basedon business needsAdvisory and support forstrategic partnersHR & Managers/ Partner 2Human ResourcesTalent Management Business Partners(HR BP)HR & Managers/ Partner 3HR DevelopmentHR & Managers/ Partner 4HR Administration HR & Managers/ Partner 5End users / managersand employees30 | Zain Saudi Arabia 31 | Sustainability Report 2010

DevelopingCommunitiesOur Ambition: Harness the power of our products andservices to create both direct and indirect positive impactson the communities we serve.DelightingCustomersAdoptingBest PracticePioneeringNetworksImproving theEnvironmentIntegrityTrustInnovationCreating a DynamicTeamDevelopingCommunitiesBuildingPartnerships32 | Zain Saudi Arabia 33 | Sustainability Report 2010

DevelopingCommunitiesCSR in Numbers 2009 2010 2011 TargetCommunity investment (USD) 1,951,629 5,083,461 6,000,000Number of CSR initiatives aligned to coreproducts and services – 2 4Mashroee Zain 2008 2009 2010Number of women involved 10 33 72Zain Saudi Arabia investment (SAR) 50,000 175,000 17,000,000Revenues 2,600,000 8,800,000 875,000Shabab Tamouh 2008 2009 2010 2011 TargetNumber of members – – 36 80Budget (SAR) – – 50,000 1,000,000Members subsequently recruited %New indicatorMembers subsequently recruited by Zain %New indicatorMashroee Zain Women such as Fatima in Jeddahhave thrived in this program. Fatima took theopportunity to learn about the telecoms industry,and now it has become her main source of income.Fatima says “This has done so much for my children and me. Aside from financial stability,it has taught my children that, by focusing on studies and hard work, anything is possible.”Community Development, Engagement and InvestmentZain Saudi Arabia’s operations, and even more so its products and services, have the potentialto enable the creation of a more sustainable Saudi Arabia from an economic, social, andenvironmental perspective. In the long-term, the company’s Corporate Social Responsibility(CSR) function seeks to implement a comprehensive community development, engagement,and investment strategy aligned with Zain’s corporate objectives, utilizing its products andservices wherever possible.The company has initiated a range of CSR activities including: donations of time, money,products and services; internal and external awareness campaigns through SMS; participationin and sponsoring of events; and a number of strategic collaborative community initiativestargeting areas such as female entrepreneurship and youth development.In recognition of Zain Saudi Arabia’s innovative approach, it received the 2010 Kind KhalidAward for Responsible Competitiveness for Best Smart Philanthropy.The company’s CSR activities in 2010 encompassed six areas:1. Female Entrepreneurship2. Youth Development3. Supporting Saudi Society4. Enhancing Education5. Employee Engagement (internal CSR)6. The EnvironmentEnsuring the avoidance of harm in the development and use of products and services is also akey priority. For information on network health and safety and electromagnetic radiation, referto the ‘Pioneering Networks’ section on page 21. For information regarding efforts to ensurechild safety through the development of a children’s package with parental control, refer to the‘Delighting Customers’ section on page 14.Female Entrepreneurship – Mashroee ZainWith the purpose of empowering Saudi women and enhancing their contribution to thecommunity, Zain Saudi Arabia pioneered the social entrepreneurship program Mashroee Zain.Mashroee means ‘my project’, and Zain means ‘beautiful, good, or highly regarded’.This program was launched in cooperation with Azyan Telecom in 2009 to give women theopportunity to develop on a personal and professional level by offering an entrepreneurialexperience in the telecommunications sector. From the outset, members are supported withtools and resources to start their own enterprise selling Zain products and services.Mashroee Zain has a profound and ever growing impact as it not only creates newopportunities for women, but also contributes directly to Zain Saudi Arabia’s commercialsuccess by increasing market penetration in an underserved market segment. The project isexpected to break even in 2011, making it self-sufficient with longer-term potential for revenuegeneration, securing the continued growth and development of such a unique scheme.Supporting Saudi SocietyBeyond the strategic and community development projects such as Mashroee Zain andShabab Tamouh, the company continues to seek contribution opportunities that align with theZain values and benefit Saudi society.In 2010, Zain Saudi Arabia sponsored and participated in a number of events and campaigns,including:• kelana (kidney failure) through the 5060 campaign• drug control event• Disabled Children Association through the 5050 campaignThe company also hosted a number of events and projects during the Holy Month of Ramadanand Al Hajj season, for the third year running. The Iftar Sa’em Project was held duringRamadan, with free meals offered for people fasting, in addition to children’s activities duringEid Al Fitr.Education initiatives include:• lectures on the subject of mobile commerce to King Saud University students, sharing theZain case study with them• telecommunications presentations to students of King Khalid University, Abha on the WorldTelecom Day• hosting students from the Communication College in our NOC, and for summer trainingYouth Development – Shabab TamouhShabab Tamouh, meaning ‘ambitious youth’, is a strategic business initiative launched in 2010 asa response to rising graduate unemployment in the Kingdom. The program’s objectives are toinspire and prepare university students for their professional careers. It offers opportunities toexperience first-hand modern business practices through a structured curriculum, while openingcommunication channels between students and the job market. The company also hopes thatthe program will have a longer-term impact on the quality of graduates that Zain employs.Shabab Tamouh students engage in a number of activities that include:• philanthropic and community activities – events include an event on Orphan Day, a 3-daycampaign for blood donations in Asser Hospital in collaboration with the World Blood DonationDay, hosting support for members of the Saudi Hearing Impairment Organization during theWorld Cup, participation in the Iftar Ramadan project, hospital visits during Eid Al Adha, andworkshops and training covering themes like business, motivation and telecommunications.• summer training• assisting in the Zain Saudi Arabia Annual General Meeting• knowledge and experience sharing by hosting students in the Network Operation Center(NOC) and promotional functions• organizing visits to the Network Operation Center (NOC), sales and promotional functionsAl HajjDuring Al Hajj season, Zain graciously received Prince Khalid Alfaisal’s appreciation for its HajjSMS awareness campaign, and provided telecommunication solutions (SIMs and rechargecards) to King Abdullah’s Hajj guests.Other initiatives include signing an agreement to support Prince Salman’s Charitable Housingprojects, presenting CSR programs at the Al-Janadria Festival, and supporting the SaudiArabian Soccer League. As additional support to the local community, the company presentsgifts in hand-made boxes made by Saudi women.Enhancing EducationZain Saudi Arabia endeavors to share its competencies and utilize its position in the Kingdomfor the purpose of knowledge sharing and youth empowerment. The company hasimplemented a number of initiatives targeting youth education, specifically related to thetelecommunications sector.Employee Engagement (Internal CSR)The company is in the early stages of developing and implementing an internal CSR program,and is committed to increasing employee engagement and satisfaction by involving them inCSR activities.In 2010, employees participated in various initiatives that included:• visits to Kelana Centers and awareness campaigns about kidney failure• visit to the Riyadh International Book Fair with members of the Saudi HearingImpairment Organization• visits to hospitals during Eid Al Adha, with gifts presented to patients and hospital staff• blood donations• participation in International Poverty DayThe EnvironmentZain Saudi Arabia participated in two environmental awareness campaigns in 2010: the WaterSaving Campaign through a workplace promotion and sending SMSs to customers; and theEnvironmental Awareness Campaign on World Environment Day. Other activities includedparticipation in Earth Hour and sponsoring the Jubail Corrosion Event.Further details of Zain’s environmental impact and commitment can be found in the ‘Improvingthe Environment’ section on page 38.The aim for Shabab Tamouh is to enroll 40 students annually over the next three to five years.34 | Zain Saudi Arabia 35 | Sustainability Report 2010

Improving theEnvironmentOur Ambition: Reduce our own environmental impact, whileproviding advanced solutions to help reduce our suppliers’ andcustomers’ impact, and the impact of the ICT sector as a whole,by pioneering solutions for a low carbon society.DelightingCustomersAdoptingBest PracticePioneeringNetworksImproving theEnvironmentIntegrityTrustInnovationCreating a DynamicTeamDevelopingCommunitiesBuildingPartnerships36 | Zain Saudi Arabia 37 | Sustainability Report 2010

Improving theEnvironmentE-top up and E-billing We already offer customers the opportunity to recharge theirbalance electronically, reducing the need for scratch card creation and distribution.E-billing is another simple solution that helps to save money, as well as the printingand distribution of monthly bills for post-paid customers. In 2011, Zain Saudi Arabiacommits to launch an e-billing service that rewards customers for choosing this faster,more flexible and environmentally friendly billing method.22%of mobile recharges in 2010 were madethrough electronic, paperless methods,up from 5% in 2009.Areas of ImpactOurSuppliersFacilities Network DistributionOur OperationsOurCustomersEnergy Consumption 2008 2009 2010Total electricity usage (KwH) – 70,647 87,891Electricity per employee (KwH) – 172 140Electricity per $ of revenue (KwH) – 0.000088 0.000056Total energy consumption (GJ) – 254 316GHG Emissions 2008 2009 2010Emissions from electricity usage (kg) – 57,648 71,719Emissions per employee (kg) – 140 114Emission per $ of revenue (kg) – 0.000019 0.000012Water Consumption 2008 2009 2010Total water usage (liters) – 5,571,000 13,619,000Water per employee (liters) – 13,588 21,756Water per $ of revenue (liters) – 0.0019 0.0023Our Direct and Indirect Environmental ImpactZain Saudi Arabia is in the process of developing an environmental management systemthat will ensure the integrated measurement and management of the company’s total directand indirect environment impact. The management system will include the measurement ofperformance and set a clear action plan to reduce the environmental impact of our internaloperations, our suppliers’ impact, and support customers to do the same.In 2010, measurement systems and performance within each area of impact varied. Forthis reason, in 2011 Zain Saudi Arabia commits to develop and implement an integratedenvironmental management system that will generate baseline data to be published in our2011 Sustainability Report.Our SuppliersThe company works with its suppliers in the production of more environmentally friendly productsand services to be offered to end-users. In the majority of cases, this has led to cost as well asenvironmental efficiencies. Examples include:• introducing recyclable scratch cards, eliminating all plastic scratch cards• procuring roll-up banners made from recycled materialsIn 2011, Zain Saudi Arabia commits to investigate the potential for converting all plastic bagsto paper, and halving the size of SIM card packaging, reducing waste and distribution emissions.At present, the company does not track the environmental impact of its suppliers and theirproduction. This is something Zain Saudi Arabia will look to implement in coming years asa way of reducing costs and the environmental impact of both suppliers and the company.Our OperationsZain Saudi Arabia’s operations account for the large majority of its direct environmental impact.This comprises facilities which house employees, the physical network which delivers our virtualservice, and the distribution of physical products such as top-up cards, SIM cards, handsetsand mobile broadband devices.As a result of various energy saving initiatives such as shutting down PCs and turning off lightsat night, in 2010 overall electricity usage per employee and per dollar of revenue decreased,despite a 50% increase in the number of employees. However, overall electricity usageincreased by 24% in 2010.In 2011, Zain Saudi Arabia commits to measure the company’s direct energy (fuel)consumption, and achieve a 5% reduction in indirect energy consumption.GHG emissions were calculated by applying the GHG protocol to the indirect energyconsumption data, leading to the same trend mentioned above with regards to an overallincrease in emissions, yet a decrease in per employee and per dollar of revenue emissions.In 2011, Zain Saudi Arabia commits to include direct energy consumption as part of theGHG emissions calculations.In 2010, water consumption from the municipal water system rose by 144%, with a 60%increase in consumption per employee and a 24% increase in consumption per dollar ofrevenue. In 2011 Zain Saudi Arabia commits to implement various water saving initiatives(including installation of water-saving devices) and educate employees on the importanceof this issue.NetworkAt present the company does not track data relating to the environmental impact of deployingand running its physical network. Although these functions are outsourced, in 2011 Zain SaudiArabia commits to work with partners to collect and analyze environmental data coveringenergy usage, oil spills and the biodiversity impact of the company’s network.In 2010, a pilot was conducted to equip a number of sites with software that automaticallyswitches off or powers down transmission, when the number of users in proximity of the siteis low. This initiative helps to reduce the cost of running base stations, while reducing energyconsumption and emissions.In 2011, Zain Saudi Arabia commits to pilot the use of hybrid generators, renewable energyand solar cell base stations to power Zain Saudi Arabia’s network.DistributionDistribution of physical products such as top-up cards, SIM cards, handsets and mobilebroadband devices is mostly managed by an external partner. At present, the companydoes not track the environmental impact created as a result of distribution.In 2011, Zain Saudi Arabia commits to work with business partners to collect and analyzeenvironmental data related to energy consumption and emissions generated as a result ofdistribution.Our CustomersZain Saudi Arabia has the ability to help customers reduce their environmental impact in twoways. The first is by providing solutions that help to dematerialize functions and their use ofthe company’s services. The second is by tackling the growing issue of e-waste, as millions ofhandsets and other electronic products are discarded every year.DematerializationBy increasing the speed, reliability and coverage of mobile broadband, Zain Saudi Arabiaopens up new opportunities for business customers to reduce their environmental impact.This can include:• conducting high quality video-conference calling across the Kingdom, reducing the needfor business meeting flights• implementation of cloud computing, which means that businesses can have a powerfulIT system with a higher degree of flexibility, yet with significantly less onsite hardware andpower usage. Zain Saudi Arabia will launch a cloud computing product in 2011E-wasteThe company sells a limited number of handsets directly to customers. As the tool throughwhich its services are received and enjoyed, Zain recognizes the need to ensure theresponsible disposal of the millions of handsets discarded every year.In 2011, Zain Saudi Arabia commits to provide channels for the collection of old mobilephones, in partnership with experienced regional e-waste handlers.FacilitiesSince the beginning of 2009, the company has tracked its indirect energy (electricity) andwater consumption at four of its facilities located in Riyadh, Jeddah and Dammam. Using thisinformation, baseline GHG emissions have also been calculated (see table).38 | Zain Saudi Arabia 39 | Sustainability Report 2010

AdoptingBest PracticeOur Ambition: Conduct business in a responsible andtransparent manner, holding ourselves accountable to ourinvestors and the wider group of stakeholders as a way ofimproving performance.AdoptingDelightingCustomersBest PracticePioneeringNetworksImproving theEnvironmentIntegrityTrustInnovationCreating a DynamicTeamDevelopingCommunitiesBuildingPartnerships40 | Zain Saudi Arabia 41 | Sustainability Report 2010

AdoptingBest PracticeExecutive Management Structure 2010Chief Financial OfficerNabil YounanManaging Director and Chief Executive OfficerDr. Saad Hamad Al-BarrakHuman Resources DirectorRamzi AbughazalehChief Operating OfficerAhmed Jaber AlfaifiStrategy and Business Development OfficerHesham EI MetainyChief Marketing OfficerChet GalpinChief Sales OfficerMajed Sultan AlhashiliInternal Audit Zain Saudi Arabia conducts an annual internalaudit in accordance with standards defined by the Institute ofInternal Auditors.The key areas of audit for 2010 included:• procurement and inventory management process• network planning and roll-out process• customer care management process• HR, training and payroll management process• roaming and interconnect process• fixed assets and capital expenditure (CAPEX) management process• security and controls over operating systems for prepaid and charging applications• security and controls over rating, charging systems and rate setups• logical access controls over Enterprise Resource Planning (ERP) and support systems• logical access controls over post-paid applications• review of operations and security at data centerGovernanceZain Saudi Arabia’s strong governance practices emphasize integrity and accountability,helping to build investor confidence and trust. The company adheres to all corporategovernance regulations issued by the Capital Market Authority (CMA).Board of DirectorsAt the end of 2010, Zain Saudi Arabia’s Board consisted of nine members, including the CEOwho is the only executive director. Three changes to the Board representation were proposedand accepted during 2010:1. Sheikh Khalifah Ali Alkhaifah Al-Sabah replaced Dr. Marwan Ibrahim Jaber Al-Ahmadion 8th May 20102. Mr. Khaled Sulaiman Al-Omar replaced Mr. Khaled Abdullah Fahad Al-Hajeri on 8th August 20103. Mr. Barrak Al-Sabeeh replaced Mr. Asaad Ahmad Al-Banwan on 1st October 2010No Board member has any interests in the contracts that have been concluded by Zain SaudiArabia since it was established.At the end of 2010, the company’s Board of Directors comprised the following members:HRH Prince Hussam Bin Saud Bin Abdul Aziz Chairman, Non-Executive DirectorBarrak Al-SabeehNon-Executive DirectorDr. Saad Hamad Al-BarrakManaging Director and Chief Executive OfficerKhaled Sulaiman Al-OmarNon-Executive DirectorSheikh Khalifah Ali Alkhaifah Al-Sabah Non-Executive DirectorAbdullah Ibrahim Al-RakhisNon-Executive DirectorHH Prince Nayef Bin SultanBin Mohammed Bin Saud Al Kabeer Independent / Non-Executive DirectorFahad Ibrahim Al DeghaitherIndependent / Non-Executive DirectorDr. Faisal Bin Hamad Bin Abdullah Al-Sugair Independent / Non-Executive DirectorFor further information regarding Board members, refer to the Zain Saudi Arabia website atwww.sa.zain.com.Governance CommitteesIn 2009, the General Assembly (GA) approved the rules for selecting committee members,the terms of membership, the committees’ terms of reference and their procedures.Executive CommitteeNominated members: Dr. Saad Hamad Al-Barrak, HH Prince Nayef Bin Sultan Bin MohammedBin Saud Al Kabeer, Abdullah Ibrahim Al-Rakhis and Dr. Faisal Al-Sugair.Duties and responsibilities: recommending objectives and strategy for the company in thedevelopment of its business, keeping in mind the interests of its shareholders, customers,employees and other stakeholders; agreeing on policy guidelines for business divisions basedon the strategy approved by the Board; monitoring the successful execution of the Company’sbusiness plan (as approved by the Board) and monitoring the business divisions’ objectivesand budgets to ensure that they fall within the company’s targets (as approved by the Board).In addition, the Committee reviews the organizational structure of the company and makesrecommendations for change; ensures the control, co-ordination and monitoring within theCompany of risk and internal controls; ensures compliance with relevant legislation and regulations;and safeguards the integrity of management information and financial reporting systems.The Committee is also responsible for identifying and executing new business opportunitiesoutside the current core activities, including geographic diversification, examining all tradeinvestments, divestments and major capital expenditure proposals and the recommendationto the Board of those which are material either by nature or cost, optimizing the allocationand adequacy of the company’s resources, and reviewing and ensuring the implementationof company policies. The committee met five times during 2010.Audit CommitteeNominated members: HRH Prince Hussam Bin Saud Bin Abdul Aziz, Fahad Ibrahim AlDeghaither and one more member to be nominated during the next Board meeting.Duties and responsibilities: supervising the company’s Internal Audit Division in order to verifyits efficiency in performing the functions assigned to it by the Board; reviewing the internalaudit system and preparing a written report with its opinion and recommendations; reviewingthe internal audit reports and setting corrective actions; submitting recommendations tothe Board regarding the appointment or renewal of the independent external auditors anddetermining their fees; and following up on the performance of accountants and approvingtheir fees.In addition, the Committee reviews the audit plan with the external auditor and gives remarkson the same; reviews the remarks of the external auditor on the financial statements andfollows-up on actions taken; reviews the interim and annual financial statements beforesubmission to the Board, and gives its opinion and recommendations on the same; andreviews the company’s accounting policies and provides opinions and recommendationson the same. The Committee met four times during 2010.Nomination and Compensation CommitteeNominated members: Dr. Saad Hamad Al-Barrak, Abdullah Ibrahim Al-Rakhis, HH Prince NayefBin Sultan Bin Mohammed Bin Saud Al Kabeer, Fahad Ibrahim Al Deghaither and one moremember to be nominated during the next Board meeting.Duties and responsibilities: recommending individuals for membership of the Board; conductingan annual review of the skills required for Board membership; identifying the strengths andweaknesses of the Board; and establishing clear policies with respect to the remuneration ofBoard members and senior executives of the company. The committee did not meet in 2010.Executive Management StructureThe company’s management team comprises the Chief Executive Officer (an executive director onthe Board) and four Chiefs responsible for Operations, Finance, Marketing and Sales. The companyalso has a Strategy and Business Development Officer and a Human Resources Director.Accountability and TransparencyZain Saudi Arabia is currently held accountable by its shareholders through publishing anannual report, interim updates and the Annual General Meeting (AGM). Zain has also takenpart in several road shows locally, regionally and internationally to assist investors in theevaluation of the Company’s future performance. The Zain Saudi Arabia Corporate DisclosurePolicy available on our website also ensures the company maintains full, true and plain publicdisclosure of all material information in a timely manner.With the creation and distribution of this sustainability report, Zain Saudi Arabia is extendingits level of accountability to include all of its stakeholders, providing information regardingthe management approach, performance and commitment towards economic, social, andenvironmental issues. In 2011, Zain Saudi Arabia commits produce an online sustainabilityreport that achieves a GRI level A for disclosure of data and information.The majority of audit findings for the above areas have been implemented and executed by ZainSaudi Arabia management and verified by the internal audit during the follow-up testing process.The Finance and Accounting department in Zain Saudi Arabia ensures the timely release ofAnnual Financial Reports, which are externally audited by Price Waterhouse Coopers (PwC) andadhere to Saudi Accounting Standards, as well as International Financial Reporting Standards.ComplianceDuring the period covered by this report, the Capital Market Authority imposed a financialfine on the MD and CEO for violation of Article 5, Section A of the CMA’s Market ConductRegulations. The company is also appealing against a CITC charge regarding non-compliancewith regulatory guidelines. The outcome is still pending on this issue.Other than the above, no other punishments or preventive restrictions of legal force wereimposed on the company by the CMA or any other supervisory, regulatory, or judiciary body.42 | Zain Saudi Arabia 43 | Sustainability Report 2010

Our 2011 SustainabilityCommitmentsDelighting Customers• Launch five new innovative packages that increase access to mobile telecommunications and enable more connections.• Launch a new smart office product for business customers offering a unique bundle of Google applications, voice, SMS, and mobile broadband.• Conduct a series of pilot programs with organizations and government entities to develop new solutions for the way we work, deliver education and healthcare,conduct commerce, and tackle climate change.• Launch Zain Delight, the world’s first mobile broadband prepaid internet service.• Research the feasibility and demand for ‘green’ content, raising environmental awareness and empowering people to take action on the environment.• Gather and publish customer satisfaction results and suggestions, together with our response and systematic management of customer feedback.Pioneering Networks• Enhance our mobile broadband services with the introduction of 3G voice and HSPA of up to 42 Mbps covering 11 cities.• Track the health and safety performance of business partners, providing guidance and tools that help to ensure zero fatalities.Creating a Dynamic Team• Finalize an agreement with the Human Resource Development Fund to take Saudi university graduates into a 32-week training program.• Provide three new employee training programs in response to needs highlighted by our employee performance and career development reviews.Building Partnerships• Include a wider range of environmental, health and safety (EHS) issues into our terms of engagement with strategic business partners.• Start tracking the strategic business partners’ EHS performance.Developing Communities• Create a cross-function sustainability team to implement Zain Saudi Arabia’s sustainability strategy across all areas of operation.• Begin development of a comprehensive community development, engagement and investment strategy, aligned to our corporate objectives.Improving the Environment• Develop and implement an integrated environmental management system that will generate baseline data to be published in our 2011 Sustainability Report.• Investigate the potential for converting all plastic bags to paper, and halving the size of SIM card packaging, reducing waste and distribution emissions.• Measure the company’s direct energy (fuel) consumption, and achieve a 5% reduction in indirect energy consumption.• Include direct energy consumption as part of the GHG emissions calculations.• Implement various water saving initiatives (including installation of water-saving devices) and educate employees on the importance of this issue.• Work with partners to collect and analyze environmental data covering energy usage, oil spills and the biodiversity impact of the company’s network.• Pilot the use of hybrid generators, renewable energy and solar cell base stations to power Zain Saudi Arabia’s network.• Work with business partners to collect and analyze environmental data related to energy consumption and emissions generated as a result of distribution.• Launch an e-billing service that rewards customers for choosing this faster, more flexible and environmentally friendly billing method.• Provide channels for the collection of old mobile phones, in partnership with experienced regional e-waste handlers.Adopting Best Practice• Produce an online sustainability report that achieves a GRI level A for disclosure of data and information.44 | Zain Saudi Arabia 45 | Sustainability Report 2010

Appendix A:Scope of the ReportAppendix B:AcronymsAppendix C:GlossaryDefining Report ContentThe data in this report represents our performance for the year 2010 ending 31st December2010. Data covers economic, social, and environmental aspects of our business.Determining our Key Priority Issues – Within this report, we have followed a systematicprocess in order to define our key priority issues, taking into consideration the principles fordefining report content. The process resulted in defining sustainability issues across a numberof our key business functions, and affecting some of our most prominent stakeholders. Thus,the presentation of our sustainability priority issues is informed by our sustainability strategy.There is no prioritization in the presentation of sustainability issues throughout the report,however, within each section; priority sustainability issues are highlighted with key performanceindicators drawn with appropriate targets to guide our progress in sustainability performance.Materiality – We believe that this report covers all material issues and topics (includingindicators) that reflect the organization’s economic, social, and environmental impacts, andthat are of highest importance to our stakeholders. Those include main issues raised by ourstakeholders, issues raised by our peers, and standards and guidelines including the GRI G3guidelines for sustainability reporting.Stakeholder Inclusiveness – We believe that we have outlined all of our key stakeholders, howwe engage with them, their expectations and key priority issues, our understanding of theirissues, and how we have responded to their expectations. Stakeholder selection and mappingwas conducted by the company’s CSR Department in consultation with all internaldepartments.Sustainability Context – We considered our sustainability context taking into account thenational context of the Kingdom of Saudi Arabia, the regional context, and the global andinternational sustainability context. The industry and sector specific realities have beenconsidered as well. In some instances, different priorities along these contexts have beenpointed out, as we try to address those priorities from multiple perspectives.Ensuring QualityBalance – We believe this report presents a balanced account of our positive sustainabilityperformance and of areas requiring further efforts and development in the future.Comparability – We have followed the GRI Indicator Protocols throughout the report tofacilitate comparison between our report and other industry peers and companies. Comparabledata from the years 2008 and 2009 (year ending 31st of December) have been provided.Accuracy – We have aimed for maximum accuracy. It has been indicated wherever dataestimations or limitations to accuracy exist.Clarity – We have included introductory information about sustainability wherever relevantto aid the reader’s understanding of the concept and the report’s content.Assurance – This report will not be assured by a third party.Reporting Boundaries and LimitationsBoundaries – This report represents the baseline sustainability report for Zain Saudi Arabiaincluding available information on its operations in the Kingdom of Saudi Arabia. Whereinformation was available, data from 2008 and 2009 was included.Limitations – As a baseline sustainability report, we recognize that this report has limitations,and so have set out a number of commitments throughout the report to overcome thoselimitations. We have only reported on information we believe to be accurate, thus, we did notinclude estimates in the report, unless clearly indicated.Data Measurement Techniques – All information included in the report is, to the best of ourknowledge, accurate and represent the data currently available at Zain SA. As a relatively neworganization we continue to implement a wide range of measurement systems in order to fullycapture our organizational and sustainability related performance.Outsourced Operations – Information relating to our outsourced operations has not beenreported on in this baseline report. Outsourced operations include our network deploymentcontractors, sales and distribution functions, and our suppliers. We intend to report on thoseareas in our 2011 report.Acronym2G3GBoardCEOCFOCITCCMACMOCOOCSOCSREMFGCCGSMHRHR BPHR CCHSPAICTITIVRKSALTEM2MMBMbpsMDNOCPCsPwCSARSIMSMSTVUSBDefinitionSecond Generation Wireless Telephone TechnologyThird Generation Mobile Telephone TechnologyBoard of DirectorsChief Executive OfficerChief Financial OfficerThe Communication and Information Technology CommissionCapital Market AuthorityChief Marketing OfficerChief Operating OfficerChief Sales OfficerCorporate Social ResponsibilityElectromagnetic FieldGulf Cooperation CouncilGlobal System for Mobile CommunicationsHuman ResourcesHuman Resource Business PartnersHuman Resources Contact CenterHigh Speed Packet AccessInformation and Communications TechnologyInformation TechnologyInteractive Voice ResponseKingdom of Saudi ArabiaLong Term EvolutionMachine-to-Machine TechnologiesMegabyteMegabits per secondManaging DirectorNetwork Operation CenterPersonal ComputersPrice Waterhouse CoopersSaudi RiyalSubscriber Identity ModuleShort Message ServiceTelevisionUniversal Serial BusTermGeneral Organizationfor Social Insurance(GOSI)Global ReportingInitiative (GRI)GRI G3 GuidelinesIEEE StandardsInternationalCommission onNon-Ionizing RadiationProtection (ICNIRP)SustainabilitySustainabilityManagementSustainabilityReportingUniversal ServiceObligationDefinitionA semi-state body in the Kingdom of Saudi Arabia that implementsthe provisions of the Social Insurance Law and follows-up theprocess of achieving the compulsory insurance coverage, collectingcontributions from employers and paying benefits to eligiblecontributors or their family members.A network-based organization that pioneered the world’s mostwidely used sustainability reporting framework. GRI’s core goalsinclude the mainstreaming of disclosure on environmental, socialand governance performance.A set of guidelines for sustainability reporting developed by the GlobalReporting Initiative and based on the GRI’s Sustainability Framework– the most widely used common framework for sustainability reporting.The world’s largest professional association dedicated to advancingtechnological innovation and excellence for the benefit of humanity.It also provides a wide range of quality publications and standardsthat make the exchange of technical knowledge and informationpossible among technology professionals.A body of independent scientific experts brought to bear onaddressing the important issues of possible adverse effects onhuman health of exposure to non-ionizing radiation.The definition is derived from the definition of Sustainable Development:development that meets the needs of the present without compromisingthe ability of future generations to meet their own needs.The integrated management of economic, social, and environmentalperformance.The practice of publicly reporting to stakeholders, on an ongoing basis,the organization’s economic, environmental and social performanceincluding the issues most relevant to all of its key stakeholders.The Universal Service Obligation is an obligation, which can be imposedupon the dominant telecom operator (usually the incumbent). Thisobligation includes a demand to meet any request for provision of aparticular telecom service to anybody within the country. The purpose ofhaving such an obligation is to ensure national coverage of a particulartelecom service also in remote rural areas, where provision of telecomservice may become less profitable.46 | Zain Saudi Arabia 47 | Sustainability Report 2010

Appendix D:GRI IndexAppendix E:GRI Statement and GRI Application Level CheckGRIPage(s)STANDARD DISCLOSURE1.1 21.2 7, 8 and 92.1 42.2 42.3 4, 5 and 42 – no subsidiaries2.4 02.5 4 and 462.6 42.7 4 and 52.8 52.9 None2.10 343.1 463.2 Not applicable – first report3.3 46 – Annual3.4 03.5 463.6 463.7 463.8 463.9 463.10 Not applicable – first report3.11 Not applicable – first report3.12 483.13 464.1 42 And 434.2 42GRI4.3 424.4 434.5 43Page(s)4.6 42 and 434.7 434.8 8 and 94.9 42 and 434.10 42 and 434.11 8, 9 and 214.12 54.13 54.14 74.15 464.16 74.17 7,8 and 9 – Our sustainabilityframework and sustainability focusareas were created to response totopics and concerns raised by ourstakeholders. The report structure isbased on the seven focus areas anddeals with the priority issues of ourstakeholders within each section.Overall Management Approach disclosure– Economic (5)EC1 5EC3 25EC5 25EC7 26EC8 34 and 35GRIPage(s)Overall Management Approach disclosure– Environment (36, 38 and 39)EN4 38 – Saudi Electricity Company(approx. 56% oil, 44% natural gas)EN5 38 and 39EN6 38 and 39EN7 38 and 39EN8 38 and 39EN12 38 and 39EN16 38 – Calculated for electricityconsumption based on emissionsfactors for the Saudi Arabian Electricitygrid collated and published by theUS Department of Energy (DOE).EN23 39 – Managed by business partnerand not yet measuredEN26 38EN27 38 and 39 – 0%EN28 43 – No fines receivedEN29 39Overall Management Approach disclosure– Labor (22, 24 and 27)LA1 24LA2 24 and 26LA3 25 – 100% Full time employeesLA4 There are no trade unions in theKingdom of Saudi ArabiaLA5 Minimum of 30 days as per SaudiLabor LawLA7 27GRIPage(s)LA10 26 and 27LA11 26 and 27LA12 26LA13 26, 27 and 42LA14 27Overall Management Approach disclosure– Human Rights (27)HR1 30 – NoneHR2 30 – NoneHR4 27HR5 There are no trade unions inthe Kingdom of Saudi ArabiaHR6 27HR7 27Overall Management Approach disclosure– Society (32 and 34)SO1 21 and 34SO7 43SO8 43Overall Management Approach disclosure– Product Responsibility (17, 21 and 39)PR1 21PR2 43 – NonePR3 As per Saudi lawPR4 43 – NonePR6 As per Saudi lawPR7 43 – NonePR9 43 – NoneFully covered indicatorPartially covered indicatorStandard DisclosuresReportApplication LevelG3 ProfileDisclosuresG3 ManagementApproachDisclosureG3 PerformanceIndicators &SectorSupplementPerformanceIndicatorsOUTPUT OUTPUT OUTPUTCReport on:1.12.1-2.103.1-3.8, 3.10-3.124.1-4.4, 4.14-4.15Not RequiredReport on a minimumof 10 PerformanceIndicators, including atleast one from each of:Economic, Social andEnvironmental.C+ B B+ A A+Report Externally AssuredReport on all criterialisted for Level C plus:1.23.9, 3.134.5-4.13, 4.16-4.17Management ApproachDisclosures for eachIndicator CategoryReport on a minimumof 20 PerformanceIndicators, at least onefrom each of Economic,Environmental, Humanright, Labor Society,Product Responsibility.Report Externally AssuredSame as requirementfor Level BManagement ApproachDisclosures for eachIndicator CategoryReport on eachcore G3 and SectorSupplement* Indicatorwith due regard to theMateriality Principleby either: a) reportingon the Indicator or b)explaining the reasonfor its omission.*Sector supplement in final versionReport Externally Assured48 | Zain Saudi ArabiaDesigned and produced by Origin Communications Group

Zain Saudi Arabia Corporate OfficeKing Fahad Highway, PO Box 295814, Riyadh 11351Kingdom of Saudi ArabiaTel: +966 59 0000 959csr@sa.zain.comwww.sa.zain.comInteract with us on: