Executive Management

Committees Member from outside the Board of Directors

Mr Abdullah Alenzi

Audit Committee

Current position	Previous positions	Qualifications	Experience
Chief Audit Executive – stc Group	Senior Manager at SAMBA Financial Group Held the following positions at stc, – General Manager, Network and Information Systems Audit – General Manager, Investment and Operational Audit	Executive Masters of Business Adminstration, King Fahd University of Petroleum & Minerals, the KSA.	25 years of experience in multiple domains such as: Governance and Risk Management Information Technology

Mr Fahad Alghamdi

Nomination and Remuneration Committee

Current positions	Previous positions	Qualifications	Experience
NRC Member – solutions by stc General Manager – stc Business Units Audit Committee Member – Saudi Investment Bank Audit Committee Member– Alahli Capital Audit Committee Member – NADEC Audit Committee Member – SEERA Group NRC Member – AQALAT by stc	Held the following position at stc – General Manager, HR Planning and Organizational Development – Director, Workforce Planning – Manager, Customer Relationship Management – HR Shared Services – HR specialist, Rewards and Performance Management Held the following positions at Samba Fin. Group, – Account Manager, Corporate Services Unit – Group Customer Services Unit, Key Account	Bachelor’s degree in Marketing, King Fahd University of Petroleum & Minerals, the KSA.	Over 20 years of HR experience in industries such as: ICT (information and Communication Technology) Finance

Name of companies inside and outside the Kingdom in which a Board Member is a member of their current or previous Board or Management

Names of companies in which a Board Member is a member of their current Board or a Management	Inside/ outside the Kingdom	Legal entity (Listed Joint Stock Company Unlisted Joint Stock Company/Limited Liability Company Government/ Non-profit organization)	Names of companies in which a Board Member was a member of their previous Board or a Management	Inside/ outside the Kingdom	Legal entity (Listed Joint Stock Company/Unlisted Joint Stock Company/Limited Liability Company Government/ Non-profit organization)
Mr Riyadh Saeed Muawad
Specialized by stc	Inside	Limited Liability Company	Kuwait Telecom Company (stc Kuwait)	Outside	Listed Joint Stock Company (Kuwait)
stc	Inside	Listed Joint Stock Company	Cisco	Inside	Limited Liability Company
			CA Technologies	Outside	Listed Joint Stock Company (USA)
			National Technology Company (Bugshan Group)	Inside	Limited Liability Company
Mr Haithem Mohammed Alfaraj
Sirar by stc	Inside	Limited Liability Company	Specialized by stc	Inside	Limited Liability Company
Telecommunications Tower Co. (TAWAL)	Inside	Limited Liability Company	Etihad Etisalat Company (Mobily)	Inside	Listed Joint Stock Company
stc	Inside	Listed Joint Stock Company	Aramco	Inside	Listed Joint Stock Company
			Lucent Technologies	Outside	Merged with Alcatel to form Alcatel-Lucent
Mr Emad Oudah Aloudah
stc	Inside	Listed Joint Stock Company	stc Channels	Inside	Limited Liability Company
Arabian Satellite Communications Organization (Arabsat)	Inside	Limited Liability Company	Aqalat	Inside	Limited Liability Company
			stc spacelized	Inside	Limited Liability Company
			NUPCO	Inside	Limited Liability Company
			Saudi Research and Marketing Group	Inside	Listed Joint Stock Company
			Saudi Information Technology Company (SITE)	Inside	Limited Liability Company
			Oracle	Outside	Limited Liability Company
			Saudi Central Bank	Inside	Government
Mr Omar Abdulaziz Alshabibi
stc Gulf Investment Holding	Inside	Limited Liability Company	stc Pay	Inside	A closed Joint Stock Company
Telecom Commercial Investment Company Limited	Inside	Limited Liability Company	Safayer Company	Inside	Limited Liability Company
stc	Inside	Listed Joint Stock Company
Mr Mathad Faisal Alajmi
stc	Inside	Listed Joint Stock Company	Saudi Iron and Steel Company (Hadeed)	Inside	A closed Joint Stock Company
Intigral	Inside	Limited Liability Company	Saudi Basic Industries Corp (SABIC)	Inside	Listed Joint Stock Company
			Gulf Petrochemicals and Chemicals Association (GPCA)	Outside	A closed Joint Stock Company
			King and Spalding	Outside	International Law Firm
			Freshfields	Outside	International Law Firm
Mohammed Abdullah Alabbadi
stc	Inside	Listed Joint Stock Company	stc Pay	Inside	A closed Joint Stock Company
Saudi Volunteer Organization (Takatuf)	Inside	Non-profit Organization	Aqalat	Inside	Limited Liability Company
Specialized by stc	Inside	Limited Liability Company	Cisco	Inside	Limited Liability Company
Mr Mohammad Abdullah Alaseeri
Municipal and Rural Affairs and Housing	Inside	Government	Traveler Security Center	Inside	Government
			Ministry of Education	Inside	Government
			National Information Center	Inside	Government
Mr Abdulatif Ali Alseif
Sabeen Investment Company	Inside	A closed Joint Stock Company	King Abdullah Humanitarian Foundation	Inside	Non-profit Organization
Arabian Cement Company (ACC)	Inside	Listed Joint Stock Company	Raidah Investment Company	Inside	A closed Joint Stock Company
Alothaim Investment Company	Inside	A closed Joint Stock Company	HSBC	Inside	A Closed Joint Stock Company
National Petrochemical Company (Petrochem)	Inside	Listed Joint Stock Company
Wisayah Global Investment Company	Inside	Limited Liability Company
Al Rajhi Bank	Inside	Listed Joint Stock Company
Riva Investment Company	Inside	Limited Liability Company
Alnahdi Medical Company	Inside	A closed Joint Stock Company
Mr Fahad Suleiman Alamoud
Visa and Travel Solutions (TASHIR)	Inside	Limited Liability Company	Sehati	Inside	Limited Liability Company
			Saudi Technology and Security Comprehensive Control Company (Tahakom)	Inside	Limited Liability Company
			Ministry of Transport	Inside	Government
			Ministry of Foreign Affairs	Inside	Government

Board of Directors meetings and the attendance record of each meeting held during 2021

	Name	Meetings
		1st Meeting (24 Jan 2021)	2nd Meeting (15 Feb 2021)	3rd Meeting (29 Apr 2021)	4th Meeting (11 Aug 2021)	5th Meeting (03 Nov 2021)	6th Meeting (14 Nov 2021)
1.	Mr Riyadh Muawad
2.	Mr Haithem Alfaraj
3.	Mr Emad Aloudah
4.	Mr Mohammed Alabbadi
5.	Mr Mathad Alajmi
6.	Mr Omar Alshabibi
7.	Mr Fahad Alamoud
8.	Mr Abdulatif Alseif
9.	Mr Mohammad Alaseeri

Date of the latest General Assembly Meeting for the Company was 01 June 2021.

General Assembly Meetings held during the fiscal year and Board Members who attended them

	Name	Meetings
		1st Meeting (26 Jan 2021)	2nd Meeting (16 Feb 2021)	3rd Meeting (01 Jun 2021)
1.	Mr Riyadh Muawad
2.	Mr Haithem Alfaraj
3.	Mr Emad Alaoudah
4.	Mr Mohammed Alabbadi
5.	Mr Mathad Alajmi
6.	Mr Omar Alshabibi
7.	Mr Fahad Alamoud
8.	Mr Abdulatif Alseif
9.	Mr Mohammad Alaseeri
	Audit Committee Member
1.	Mr Abdullah Alenaze

Procedures taken by the Board to inform its members, especialy the non-Executives of shareholders’ suggestions and remarks on the Company and its performance

The Investor Relations team, which reports to the CFO directly was established during the year. The main objective of the department is to act as a mediator between the Company, the investment community, and capital market regulators. We aim to enable further accessibility between shareholders and various stakeholders within the Company through various methods. Investor Relations is responsible for all communications with investors and shareholders, and reports to the Board by providing an update about shareholder activities and remarks periodically. Our stakeholders’ views are of paramount importance to us. Shareholder feedback is always considered and incorporated into our department’s strategies for long-term value creation. We ensure that we provide our investors with the maximum information possible by giving access to various disclosures through the Investor Relations section of the website, quarterly disclosures, and annual reports.

During the year ending 31 December 2021, the Company did not receive any written proposals or notes from any of the shareholders.

Board Committees

In accordance with the Corporate Governance Regulations issued by the Capital Market Authority and the Companies Law, the Company has prepared a charter for the Audit Committee, the Nomination and Remuneration Committee, and the Executive Committee, as these charters include the rules for the members of the committee, their term of membership, and their duties. All those charters and regulations were approved by the Board of Directors and the General Assembly of shareholders, as per the Company’s by-laws. solutions by stc has three committees as follows:

Audit Committee

The Audit Committee consists of four (4) members appointed pursuant to an Ordinary General Assembly resolution dated 26 January 2021 and ending 21 December 2025.

The duties and responsibilities of this Committee include the oversight of the internal audit tasks and reports, the implementation of corrective measures for the observations contained therein, and recommending to the Board of Directors the appointment of Company’s External Auditor and his scope of work and annual fees, and reviewing the Company’s interim and annual financial statements before submitting them to the Board of Directors. The Committee’s responsibilities also include evaluating and ensuring that an effective internal control system is in place and prepared on a sound basis and providing oversight on governance and risk management. During the year, the Audit Committee reviewed the quarterly financial statements and the annual financial statements and recommended recommended the approval of the Board of Directors. The Committee met with the External Auditor to ensure that the Financial Statements have been prepared in accordance with the accounting standards and that there are no important or material observations on the financial statements. The Audit Committee also discussed the Internal Auditors’ Report, which did not contain material observations.

The Committee is composed of four members and held five meetings during the year 2021, as shown in the following table:

	Name	Nature of Membership	Meetings
			1st Meeting (15 Feb 2021)	2nd Meeting (07 Apr 2021)	3rd Meeting (21 Apr 2021)	4th Meeting (05 Aug 2021)	5th Meeting (19 Oct 2021)
1.	Mr Abdullatif Alseif	Chairman
2.	Mr Mathad Alajmi	Member
3.	Mr Omar Alshabibi	Member
4.	Mr Abdullah Alenzi	Member

Nomination and Remuneration Committee

The Nomination and Remuneration Committee consists of four (4) members appointed pursuant to a Board resolution dated 24 January 2021.

The main purpose of this Committee is to make recommendations to the Board of Directors with regard to nominations to the membership of the Board, its subcommittees and Executive Management in accordance with the approved policies and standards, provided that no person may be nominated if previously convicted of a felony involving moral turpitude; undertaking the annual review of the skill requirements for the Board of Directors; preparing the description of skills and qualifications required for Board membership including determination of the time that the Board Member should dedicate to the business of the Board; and determination of the compensation and remuneration of Board Members, its subcommittees and Executive Management.

The Committee also reviews the structure and formation of the Board, makes recommendations concerning changes that can be made and identifies the weaknesses and strengths of the Board with recommendations on how to address them to serve the interests of the Company. On an annual basis, the Committee ensures the independence of the independent members and that there are no conflicts of interest if the member holds membership to the Board of Directors of another Company. It develops clear policies for the compensation and remuneration of Board members and senior executives, taking into consideration performance-related standards. Lastly, the Committee prepares periodic and annual reports on the Committee’s activities and the annual disclosure report according to the by-laws. These reports are presented to the Board of Directors.

The Committee is also responsible for assisting the Board of Directors in developing and reviewing the organizational structure of the Company.

The Committee is composed of four members and held three meetings during the year 2021, as shown in the following table:

	Name	Nature of Membership	Meetings
			1st Meeting (27 Apr 2021)	2nd Meeting (30 Jun 2021)	3rd Meeting (19 Sep 2021)
1.	Mr Fahad Alamoud	Chairman
2.	Mr Fahad Alghamdi	Member
3.	Mr Omar Alshabibi	Member
4.	Mr Mohammed Alabbadi	Member

Executive Committee

The Executive Committee consists of five (5) members appointed pursuant to a Board resolution dated 24 January 2021.

The Company’s Executive Committee was appointed by the Board of Directors to exercise all functions entrusted thereto and reports to and maintains direct communication channels with the Board of Directors. It may not amend any resolution issued by the Board. Pursuant to the relevant laws and regulations, the responsibilities of the Executive Committee include the following:

• Engaging in and supervising the development of the Company’s strategic plan and evaluating the proposals submitted by the Executive Management on the Company’s vision, mission, strategic themes, goals and strategic and financial initiatives, and submitting them to the Board for approval.
• Overseeing the preparation of the Company’s annual budget, reviewing proposals submitted by the Executive Management, and submitting recommendations to the Board on the approval of the annual budget.
• Reviewing the financial and strategic performance reports related to monitoring the implementation of strategic plans and initiatives, and submitting its recommendations to the Board.
• Examining strategic and important issues and projects with a significant financial impact, and submitting them to the Board for approval.
• Reviewing the corporate social responsibility policy, media plan and sports sponsorships, and submitting its recommendations to the Board.
• Reviewing programs for social work initiatives and submitting its recommendations to the Board.

The Committee is composed of five members and held four meetings
during the year 2021, as shown in the following table:

	Name	Nature of Membership	Meetings
			1st Meeting (29 Apr 2021)	2nd Meeting (11 Aug 2021)	3rd Meeting (03 Nov 2021)	4th Meeting (14 Nov 2021)
1.	Mr Riyadh Muawad	Chairman
2.	Mr Haithem Alfaraj	Member
3.	Mr Mohammed Alaseeri	Member
4.	Mr Emad Alaoudah	Member
5.	Mr Mohammed Alabbadi	Member

Disclosure of the remuneration policy for members of the Board of Directors, members of the committees and the Executive Management:

1. Board and its Committee Members’ remuneration

1.1 The remuneration of the Board member shall be a fixed amount, in addition in addition to an allowance given for attending meetings.

1.2 The Board may determine a remuneration for members/member of the Board for their membership in the Board’s Standing Committees.

1.3 The remunerations that the Board of Directors’ member receives shall be fair and coordinates with the member’s competencies as well as the activities and the responsibilities that the Board Member undertakes in addition to the the specified goals for the Board of Directors that must be achieved during the fiscal year.

1.4 The remuneration payment shall be stopped or retrieved if it turns out that it was approved based on inaccurate information presented by a member of the Board.

1.5 The remuneration shall be based on the number of meetings that the member attends.

1.6 The remunerations of the members of the Board and its Standing Committees shall be in accordance with the relevant laws and regulations.

1.7 In all cases, the overall amount that the member of the Board receives from remunerations shall not exceed SAR. 500,000 annually, in accordance with rules prescribed by the Competent Authority.

1.8 The member deserves a remuneration for any additional work, or executive, technical, administrative, or advisory positions assigned to him/her in the Company. This is in addition to the remuneration that such member deserves as a Board member and shall be verified in accordance with Article 20 (c) (8) of the CMA Corporate Governance Regulations and related action as per the Company’s conflict of interest policy, Ministry of Communication Companies Law and the Company’s by-laws.

Board Members’ remuneration

Members of Board of Directors	Fixed remunerations						Variable remunerations
	Specific amount	Allowance for attending Board meetings	In-kind benefits	Remunerations for technical managerial and consultative work	Remunerations of the chairman	Total	Percentage of the profits	Periodic remunerations	Short-term incentive plans	Long-term incentive plans	Granted shares	Total	End of Service Rewards	Grand Total	Expenses Allowances
First: Independent Members
Mr Fahad Alamuod	300,000	30,000				330,000								330,000
Mr Abdullatif Alseif	300,000	30,000				330,000								330,000
Mr Mohammed Alaseeri	300,000	30,000				330,000								330,000
Total	900,000	90,000				990,000								990,000
Second: Non-executive Members
Mr Riyadh Muawad	375,000	30,000				405,000								405,000
Mr Haithem Alfaraj	300,000	30,000				330,000								330,000
Mr Emad Alaoudah	300,000	30,000				330,000								330,000
Mr Mohammed Alabbadi	300,000	30,000				330,000								330,000
Mr Mathad Alajmi	300,000	30,000				330,000								330,000
Mr Omar Alshabibi	300,000	30,000				330,000								330,000
Total	1,875,000	180,000				2,055,000								2,055,000

Senior Executives’ remuneration

1.1 The annual remuneration for the Chief Executive Officer shall be determined upon his/her achievement of the financial and strategic goals and others according to the Company’s policies.

1.2 The annual remuneration for the Chief Executive Officer shall be calculated after the publication of the financial statements according to the approved policy of the Company.

1.3 The annual remuneration for the Executive Management in the Company shall be calculated according to the policy and the mechanism for the approved annual remuneration in the Company.

1.4 The specified salaries and advantages for the Executive Management shall be determined to include (the base salary and advantages and allowances) according to the Executive Incentive Policy.

Remunerations of the Top Five Senior Executives (including the CEO and the CFO in 2021)*

	Fixed remuneration			Variable remunerations
Senior Execu- tives	Salaries and allowances (SAR)	In kind benefits (SAR)	Total (SAR)	Periodic remune- rations (SAR)	Profit (SAR)	Short- term incentive plans (SAR)	Long- term incentive plans (SAR)	Equity grants (SAR)	Total (SAR)	End of service rewards (SAR)	Total remune- ration for execu- tives in the Board (SAR)	Grand total (SAR)
Total	10,347,534.25	877,120.39	11,224,654.64	4,855,731.23		8,316,929.20						24,397,315.07

(*) The Company complied with the disclosure of components of the Senior Executive’s remuneration on aggregate, in line with the requirements of subparagraph (b) of paragraph (4) of article (93) of the Corporate Governance Regulations issued by the Capital Market Authority. But to protect the interests of the Company, its shareholders and employees, and to avoid any damage that may occur as a result of disclosing the detailed Senior Executives Remuneration by position, the Company did not disclose the details as per Appendix (1) of the Corporate Governance Regulations

Committee Members’ remuneration

Committee Members	Fixed remuneration (except attending sessions) (SAR)	Allowances for attending sessions (SAR)	Total (SAR)
Audit Committee
Mr Abdullah Alenzi	100,000	25,000	125,000
Mr Mathid Alajmi	100,000	25,000	125,000
Mr Omar Shabibi	100,000	25,000	125,000
Mr Abdullatif Al-Seif	100,000	25,000	125,000
Total	400,000	100,000	500,000
NRC committee
Mr Fahad Alghamdi	60,000	15,000	75,000
Mr Mohammed Alabbadi	–	15,000	15,000
Mr Fahad Alamuod	–	15,000	15,000
Mr Omar Shabibi	–	15,000	15,000
Total	60.000	60,000	120,000
Executive Committee
Mr Riyadh Muawad		20,000	20,000
Mr Haitham Alfaraj		20,000	20,000
Mr Mohammed Alaseeri		20,000	20,000
Mr Emad Alaoudah		20,000	20,000
Mr Mohammed Alabbadi		20,000	20,000
Total		100,000	100,000

Adherence to Corporate Governance Regulations issued by the Capital Market Authority:

The following section highlights provisions of the corporate governance regulations issued by the Capital Market Authority which have not been implemented along with their justifications:

Article No.	Article text	Implementation status	Justification
Article 46	(3) Competing Rules and Standards Policy.	Implemented	The Competing Rules and Standards Policy is in place, implemented, and will be approved by the General Assembly
Article 70	Composition of the Risk Management Committee	Not Implemented	A dedicated risk management committee has not been established based on the optional article issued by CMA. However, its main mandates were incorporated as part of the Audit Committee responsibilities
Article 71	Competencies of the Risk Management Committee	Not Implemented	A dedicated risk management committee has not been established based on the optional article issued by CMA. However, its main mandates were incorporated as part of the Audit Committee responsibilities
Article 72	Meetings of the Risk Management Committee	Not Implemented	A dedicated risk management committee has not been established based on the optional article issued by CMA. However, its main mandates were incorporated as part of the Audit Committee responsibilities
Article 85	Employee Incentives (3) establishing social organizations for the benefit of the Company’s employees.	Not Implemented	This is an optional article
Article 87	Social Responsibility	Not Implemented	The policy is in place, just needs to be approved by the General Assembly.
Article 95	Formation of a Corporate Governance Committee	Not Implemented	A dedicated corporate governance committee has not been established based on the optional article issued by CMA. However, significant governance oversights mandates were incorporated as part of the Audit Committee responsibilities

Internal Audit

Results of the annual review of the effectiveness of internal control procedures

The Internal Audit Division carried out planned audits in accordance with the Audit Committee’s approved plan to evaluate, objectively and independently, the adequacy and effectiveness of the Internal Control Systems beside a quarterly review of the financial statements. Additionally, internal audit provides advisory services to add value, improve operations, and achieve main strategic objectives.

Throughout 2021, internal audit regularly issued audit progress reports to the Audit Committee covering the audit plan progress, the results of audit engagements and overall views of Internal Control Systems, and reporting on other audit activities. In addition, internal audit continued to pursue the Assurance Transformation Strategy, with impactful outcomes.

The three strategic pillars of the Internal Audit Division are Expanding Digital Audit Services, Combined Assurance and Collaboration with other Assurance Providers, and Project Assurance Audit Services. This enabled internal audit to conduct proactive, innovative, and collaborative audits with notable influence on Governance, Risk Management, and Internal Controls across solutions. The Internal Audit Division also focuses on human capabilities. It remains a top priority; attracting, retaining, and developing talents and equipping them with the required skills and qualifications is essential to perform the audit activities effectively.

The executed internal audit activities have resulted in no material observations affecting solutions by stc’s ability to continue carrying out its work or achieving its strategic objectives.

Internal Control

The Audit Committee oversees the compliance, risk management, internal audit, and external audit, which regularly review the adequacy and effectiveness of the internal control system and procedures to provide a continuous assessment of the system and its effectiveness. This is part of the objectives of the Board to obtain reasonable assurance about the soundness of the design of solutions by stc internal control system and its effectiveness. During the fiscal year 2021, the Audit Committee held 5 meetings and discussed many topics falling under its competencies, such as reviewing financial statements, as well as strategic and organizational affairs, human resources and procurement, and IT systems, among other issues relevant to solutions by stc businesses. This is during the presence of the Executive Management and the Internal Audit.

In this regard, the Audit Committee has reached reasonable assurance on the effectiveness and efficiency of the internal control systems; in addition, the committee has not found that there are material observations on the performance of internal control system that would affect the integrity and fairness of the financial statements issued by the Company, and the internal control systems associated with the critical business processes in the Company are effective in monitoring and reducing the risks associated.

Sanctions, penalties, preventive measures, or precautionary restrictions imposed on
the Company

Sanction/Penalty/ Precautionary procedure/ Preventive measure	Reasons for violation	Imposing authority	Amount SAR	Measures undertaken to remedy and avoid such non-compliance in the future
Penalty	Non-conformance with certain SMS Service Terms and Conditions	CITC - Communications and Information Technology Commission	50,000	Development of an optimized service operating model while maintaining strong alignment with the regulator will empower the organization to further enhance its conformance levels.

Affiliate companies

Affiliate name	Capital	Company’s ownership percentage	Main scope of business	Country of operation	Country of incorporation
stcs for IT	SAR. 262,500 (USD. 70,000)	100%	The principal activities of the subsidiary are concentrated in the information technology and communication industry domain. The products of the subsidiary involve design and development of electronics and data centers, outsourcing activities, software, application and database development, technological education, and digitization activities.	Egypt	Egypt
SANAD	SAR. 5,000,000	100%	Management and Manpower Services	Kingdom of Saudi Arabia	Kingdom of Saudi Arabia

It should be noted that no debt instruments in the form of Sukuk or bonds were issued for the aforementioned companies.

The Company’s Dividend Distribution Policy

As per the article number (48) of the Company’s by-law provided the annual net profits shall be distributed as follows:

1. Ten percent (10%) of the net profits shall be set aside to form a statutory reserve of the Company. Such setting aside may be discontinued by the Ordinary General Assembly when the said reserve totals thirty percent (30%) of the Company’s paid-up capital.

2. The Ordinary General Assembly may, upon the proposal of the Board of Directors, set aside 5% of the net profits to form consensual reserve to be allocated for certain purposes specified by the General Assembly.

3. The Ordinary General Assembly may form other reserves at the portion that would serve the Company’s best interest or would ensure distributing constant profits, as much as possible, amongst shareholders. Besides,
the Ordinary General Assembly may allocate a certain amount from the net profits to establish social institutions for the Company employees or to support existing social institutions.

4. Out of the balance of the profits, if any, there shall be paid to the shareholders an initial payment of not less than ten percent (10%) of the paid-up capital.

5. Subject to provisions in Article (22) hereof, and Article (76) of Companies Law, the remaining amount shall be paid as compensation to the Board of Directors, provided that entitlement of such remuneration shall be in proportion to the number of sessions the member has attended.

6. The Company may distribute interim profits to its shareholders on a biannual or quarterly basis as per a decision passed by the Board of Directors if the Company’s financial position allows to do so and the liquidity is available as per the controls and requirements set by the competent authority.

	Dividends distributed during the year
Ratio (of paid-up capital)	33%
Total amount (SAR)	400,000,000

The Board of Directors recommended in its meeting held on 14 Rajab 1443H (corresponding to 15 February 2022) to distribute dividends of SAR 4 per share, totaling to SAR 475.2 million subject to General Assembly approval.

Company ownership

The following is the substantial shareholder who directly owns more than 5% of the Company’s capital as of
31 December 2021:

Shareholder name	Number of shares at the beginning of the year	Ownership percentage at the beginning of the year	Number of shares at the end of the year	Ownership percentage at the end of the year	Share changes	Percentage change
stc	116,400,000	97%	94,800,000	79%	(21,600,000)	-18%
Telecom Commercial Investment Company Limited	3,600,000	3%	–	–	(3,600,000)	-3%
solutions by stc Treasury shares	–	–	1,200,000	1%	1,200,000	1%
Public	–	–	24,000,000	20%	24,000,000	20%

Declaration: Regarding the declaration of movements in major shareholders’ ownership in accordance with Listing Rules, the Company confirms that it has not received any written notification during 2021 from its major shareholder indicating any changes or movement in their ownership percentages. The disclosed information is based on the Saudi Stock Exchange (Tadawul) records on 31 December 2021.

There is no ownership of shares in the company belonging to the Board, committees members, senior executives and their spouses and children in the company’s debt instruments or any of its subsidiaries.

Requests of the Company’s shareholders registry

Number of the Company’s requests of shareholders registry	Request date	Request reasons
1	29 September 2021	IPO correction
2	3 October 2021	IPO correction
3	14 October 2021	Internal Management Use
4	14 October 2021	Internal Management Use
5	2 December 2021	Internal Management Use
6	2 December 2021	Internal Management Use

Transactions between the Company and any related party

No.	Name of related party	Type of related party	Contract/Agreement	Duration	Value SAR ‘000
1	Kuwait Telecommunication Company (KSC) dba stc Kuwait	stc Subsidiaries	Costa Coffee Contract (End Point)	2 years	799
2	stc	Parent Company	Master Purchase Service Agreement for Alibaba Cloud DC Fitout and Additional Facility Requirements	3 years	53,660
3	stc	Parent Company	Framework Contract for 5G Ph2 - Cisco EPC Expansion	1.6 years	4,313
4	stc	Parent Company	Framework Contract for CS DFIR Technologies Renewal 2021 (CON-20-518)	1.6 years	2,900
5	Kuwait Telecommunication Company (KSC) dba stc Kuwait	stc Subsidiaries	Costa Coffee Contract (Cyber)	2.3 years	7,427
6	stc	Parent Company	Contract Amendment CS Threat Intelligence Renewal (CON-21-352)	1 year	7,000
7	stc	Parent Company	Framework Contract for stc Network MSP and TSS	3 years	23,921
8	stc	Parent Company	BULK SMS Agreement	2 years	132,000
9	stc	Parent Company	Framework Contract for GI FW Phase 2: Part 1 and Part 2	2 years	22,200
10	stc	Parent Company	Framework Contract for Wireless Network Improvement and Expansion 2021 - 5G3 GI	2 years	11,355
11	stc	Parent Company	Framework Contract for STCOPS Extension	1 year	26,900
12	stc	Parent Company	Framework Contract for MS for OSS - Hardware Support	2 years	4,291
13	stc	Parent Company	Framework Contract for Centralized Storage Units Managed Services	2 years	33,521
14	stc	Parent Company	Framework Contract for Operational and Technical Support for VAS Server	2 years	10,579
15	stc	Parent Company	Framework Contract for Servers and Data Network Support Agreements	2 years	49,306
16	Telecommunication Towers Co. Ltd. (TAWAL)	stc Subsidiaries	Managed Services Contract Amendment #02 (CON-21-022)	1 year	0.00
17	stc	Parent Company	NEOM - Telco Park Prefab Office and Data Center - Agreement	1 year	55,877
18	stc	Parent Company	NEOM - Telco Park Digital Platform Agreement	1 year	44,946
19	stc	Parent Company	NEOM - Telco Park Network, Service and Application Agreement	1 year	63,727
20	stc	Parent Company	NEOM - Telco Park Civil and Office Furniture Agreement	1 year	36,789
21	stc	Parent Company	Framework Contract for Centralized Server and Storage 2021	2 years	74,265
22	stc	Parent Company	Framework Contract for CBU BI and Analytics Enablement	1 year	10,800
23	stc	Parent Company	Framework Contract for Operation and Technical Managed Service for stc IT Components	2 years	139,972
24	stc	Parent Company	Framework Contract for IPMPLS, IGW and Transport Expansion 2021 - 5G3	2 years	12,600
25	stc	Parent Company	Framework Contract for IPMPLS, IGW and Transport Expansion 2021 - IPv4 2021	2 years	3,993
26	stc	Parent Company	Framework Contract for DCN Expansion and Tech Refresh- 2021	2 years	16,000
27	stc	Parent Company	Framework Contract for Managed Operation and Maintenance Services Contract for (Telco Cloud)	3 years	34,810
28	stc	Parent Company	Framework Contract for SW AG License Renewal	1 year	7,000
29	stc	Parent Company	Framework Contract for IPMPLS, IGW and Transport Expansion 2021-DNS 2021	2 years	7,805
30	stc	Parent Company	Framework Contract for Wireless Network Improvement and Expansion 2021 - 5G3 DNS	2 years	12,081
31	stc	Parent Company	stc National Roaming Agreement	1 year	8,607
32	stc	Parent Company	stc Special Services Agreement	1 year	1,195
33	stc	Parent Company	Framework Contract for Other Licenses Renewal 2021	1 year	21,624
34	stc	Parent Company	Framework Contract for 5G Ph2 - LBS 5G SA Enhancement	1.3 year	13,500
35	stc	Parent Company	Framework Contract for CS Telecom Monitoring Enhancements	1 year	2,000
36	stc	Parent Company	Framework Contract for CS Java project	1 year	2,642
37	stc	Parent Company	Framework Contract for Solutions SSL VPN Project	2.3 years	3,884
38	stc	Parent Company	Framework Contract for Software Compliance and License Optimization	1 year	2,480
39	stc	Parent Company	Framework Contract for Telco Cloud Staging Environment Expansion	2 years	7,854
40	stc	Parent Company	Frame Agreement – Captive	5.1 years	0.00
41	stc	Parent Company	Framework Contract for New CMP Integration with Core Network – IPMPLS	2 years	241
42	stc	Parent Company	Framework Contract for Machine Talk Integration and Daweiyat MPLS Integration	2 years	964
43	stc	Parent Company	Contract Amendment 01 (CON-21-381)	2 years	10,451
44	stc	Parent Company	Framework Contract for DC Facility of MENA Program – IPMPLS	2 years	2,109
45	stc	Parent Company	Framework Contract for IPMPLS, IGW and Transport Expansion 2021	2 years	34,048
46	stc	Parent Company	Framework Contract for Cloud Partnerships	5.1 years	33,979
47	stc	Parent Company	Framework Contract for IPMPLS 2021	2 years	81,919
48	stc	Parent Company	Framework Contract for Wireless Network Improvement and Expansion 2021 - 5G3 IGW	2 years	64,032
49	stc	Parent Company	Framework Contract for Wireless Network Improvement and Expansion 2021 - 5G3 IPMPLS	2 years	36,878
50	stc	Parent Company	Contract Amendment #01 (CON-21-374)	2.6 years	9,871
51	stc	Parent Company	Framework Contract for Wirefilter Expansion	1 year	37,097
52	stc	Parent Company	Framework Contract for Data as a Service Platform	1 year	5,283
53	stc	Parent Company	Framework Contract for CEM CCEX insights and Platform 2020	1.4 years	3,638
54	Public elecommunication Company (stc Specialized)	stc Subsidiaries	SOC Contract Renewal	1 year	791
55	stc	Parent Company	Framework Contract for NMS Modernization and DR1	2 years	4,644

Interests of Related Parties (Board of Directors and Executive Management):

During 2021 the Company has not conducted any business or contracts in which there was a substantial interest for the members of the Board of Directors and Executive Management or any person related to any of them.

Zakat, taxes, fees, and other charges

Description	2021		Brief description
	Paid amount (SAR)	Outstanding amount until the end of the annual financial period
Zakat	51,978,119	–	Paid during the year
Taxes	562,703	–	Paid during the year
GOSI	145,768,619	–	Paid during the year
Government fees	25,490,802	–	Visas, passports, and labor office fees – Paid during the year

Treasury shares maintained by the Company

Number of Treasury shares maintained by the Company	Value (SAR)	Maintenance date	Utilization details	Purpose of keeping the shares as Treasury shares
1,200,000	181,200,000	29 September 2021	No Utilization	Employee incentive program

Note: Treasury shares maintenance date is date at which solutions by stc purchased 1,200,000 of its own shares from stc at a cost of
SAR. 151 per share for cash consideration of SAR. 181,200,000.

solutions by stc’s Board of Directors and General Assembly approved the purchase of 1,200,000 shares that involved solution by stc buying back shares from its parent company stc to be retained as treasury shares and utilized as part of employees’ rewards and under different schemes and special terms\conditions that contribute towards attracting and retaining talents in addition to nurturing instead of elevating a healthy culture.

Solutions by stc utilized 184,250 shares from treasury shares in 2021 as celebratory grant to active employees on 30 September 2021
that vests on the 1st year anniversary from the grant date where the award of shares ceases to be conditional, i.e. the right to the shares passes from the company to the participant.

The objective of the celebratory grant is to:

i. Celebrate the success of IPO of the company with the employees.

ii. Recognize employees’ commitment and contribution.

iii. Share the rewards of the company’s success and profitable performance with the employees.

iv. Align the interests of the Company’s employees with those of its shareholders

The remaining treasury shares will be utilized in other share-based reward plans such as Long Term Incentive Plan (LTIP) for employees whose contributions are essential to the growth and success of solutions by stc, to attract and retain qualified individuals and to further align the interests of such employees with the shareholders of the company.

solutions management clarifications during the year 2021:

a. There were no debt instruments issued by the Company.

b. There were no debt instruments issued by the Company to its subsidiaries.

c. There were no debt instruments for the Company, and no interests, contractual documents, or subscription rights owned by Board Directors, Executive Management or their relatives in its shares or any of its subsidiaries.

d. The Company did not issue or grant any debt instruments convertible to shares, contractual-based securities, option rights, subscription right notes, or similar rights.

e. The Company did not issue any bonds, and therefore the Company did not redeem, buy, or cancel any recoverable debt instruments.

f. There is no arrangement or agreement under which one of the shareholders of the Company waived any rights
in profits.

g. There is no arrangement or agreement under which one of the board of directors or executive member of the Company waived any rights in profits.

h. Consolidated financial statements were prepared in accordance with international financial standards and in accordance with the Company’s by-laws and Articles of Association with respect to the preparation and publishing of financial statements.

i. The Company does not have any conversion or subscription rights under any convertible debt instrument, contractually based securities, warrants, or similar rights; both issued or granted.

j. There were no differences from the standards approved by the Saudi Organization for Certified Public Accountants (SOCPA), which are the IFRS Standards.

k. There were no comments received by the shareholders regarding the Company and its performance.

l. The External Auditor’s Report doesn’t contain any reservations on the relevant annual financial statements.

m. There were no arrangements or recommendations by the Board to change the Company’s External Auditor.

n. There was no recommendation to appoint an Internal Auditor for the Company, as it already has an Internal Audit Division.

o. There were no contradiction between the Audit Committee and the resolutions of the Board of Directors, or the Board’s refusal to take them into account regarding the appointment and dismissal of the Company’s Auditor, determining his fees and evaluating his performance or appointing the Internal Auditor.

The Board of Directors’ declarations includes the following:

a. The accounting records were properly and correctly prepared.

b. The internal control system was properly designed and effectively implemented.

c. There was no doubt about the Company’s ability to continue the business.

Conclusion

After thanking Allah Almighty, the Board of Directors would like to thank the Custodian of the Two Holy Mosques King Salman Bin Abdulaziz Al Saud, HRH Crown Prince Mohammed Bin Salman Bin Abdulaziz Al Saud, and our wise Government for the support, care, and encouragement they have given solutions in its quest to improve its performance and services.

The Board also expresses its gratitude and appreciation to solutions clients and shareholders for their trust, and to solutions employees for their dedication and diligence in the performance of their work. The Board confirms its commitment to develop solutions’ services to meet the requirements of its clients, realize shareholders’ aspirations, achieve its social objectives, and sustain the leadership position of solutions in the region’s Information Technology sector.