Board of Directors Report. Distinguished Shareholders, May peace be upon you,

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2 of Directors Report Distinguished Shareholders, May peace be upon you, The of Directors is pleased to share with you this annual report, which highlights the activities of the Bank for the fiscal year ended December 31,. The Bank has achieved good results during the Fiscal Year, through growth in key financial indicators resulting from the Bank's business expansion and increase of customers, thereby maintaining its market leadership, especially in the Retail Sector. In, the Bank has recorded SR 9,11 million in net profits with an increase of 1% compared to 016; and equity has increased to SR 56 billion with an increase of 7.3% compared to 016. Moreover, total assets has increased to SR 343 billion with an increase of 1%. In addition, total financing assets has increased to SR 34 billion with an increase of 3.8%, and customers balances have increased to SR 73 billion with an increase of 0.%. Further, ROA and ROE have reached.7% and 16.9% respectively and share profit has reached SR 5.61 in. We are proud of being one of the largest Islamic Banks in of Saudi Arabia and Middle East. The bank s activity represented in banking and investment business for itself or others inside and outside the based on Banking Control Law and all other applicable laws in KSA. The Bank is characterized by offering a wide range of banking products and services which are appropriate to retail and corporate sectors which are compliant to Islamic Sharia principals. Locally, Al Rajhi Bank has the biggest network of branches totaling 599 branch across the kingdom, backed by the biggest ATM network totaling 4,794 machine. Furthermore, the Bank has a large customer base inside and outside KSA. The Bank has four affiliates inside KSA, namely: Al Rajhi Capital, Al Rajhi Takaful, Al Rajhi Services and Al Rajhi Real Estate Development. Globally, the Bank operates in three countries, setting a pioneering experience for the Saudi Banking Sector, where it owns an affiliate named Al Rajhi Bank Malaysia with 18 branches, in addition to seven branches in Jordan and two branches in Kuwait. The Bank continues focusing on enhancing its pioneering position in the banking sector locally and internationally through providing the best banking services and products that meet the expectations of all customers. The Bank also continues in its efforts of developing and updating the Information and communication systems aiming towards becoming a pioneer bank in electronic services in order to provide the best services for all customers of the Bank.

3 1) Description of main activities of ARB and its subsidiaries: Description of main activities of ARB: Retail Corporate Treasury Other Total Type of Activity Retail sector includes deposits of retail customers, credit facilities, debit current account (overdraft) and banking services and remittances fees Corporate sector includes deposits of corporate, major customers, corporate credit facilities and debit current accounts (overdraft). Treasury sector includes treasury services, Murabaha with SAMA and international trading portfolio. (in thousand SAR) Activity Revenues Percentage 11,838,379 %74,309,486 %15 1,306,737 %8 450,5 %3 15,904,584 %100 Description of main activities of ARB s subsidiaries: Al Rajhi Bank Malaysia Al Rajhi Capital Al Rajhi Takaful Agency Al Rajhi Development Co. Ltd. Type of Activity An Islamic Bank licensed under Islamic Financial Services Law issued in 013, incorporated and practices its business in Malaysia. A closed joint-stock, registered in KSA to work as a main agent and/ or provide financial brokerage services, insurance, management, consultancy, arrangements and keeping. A limited liability, registered in KSA to work as an agent to practice insurance brokerage activities according to agency agreement with Al Rajhi Cooperative Insurance. A limited liability registered in KSA to support real estate finance programs of ARB by transferring and keeping real estate ownership documents in its name on behalf of the bank, collect revenues of selling some properties sold by the bank, provide consultancies in real estate and engineering field, register real estate contracts and supervising real estate valuation. (in thousand SAR) Activity Percentage Revenues 190,35 450,5 9,705 0,174 %1. %.8 %0.1 %0.1 Al Rajhi Services Co. A limited liability registered in KSA to provide recruitment services. 169,61 %1.1 3

4 ) Summary for ARB s assets and liabilities and business results during the last five financial years. Financial Results Comparison: (in thousand SAR) Description Revenues 15,904,854 15,341,380 13,745,775 13,666,974 Revenues Costs (551,587) (58,357) (99,438) (395,198) Total Profit 15,353,67 14,813,03 13,446,337 13,71,776 Net Profit 9,10,76 8,15,960 7,130,075 6,836, ,845,037 (465,633) 13,379,404 7,437,987 Assets and Liabilities Comparison: Description Current Assets Non-current Assets Total Assets Current Liabilities Non-current Liabilities Total Liabilities 31,418,63 311,698,66 343,116,59 8,786,598 78,579,01 87,365, ,505,953 97,05, ,711,818 6,54,840 81,510,105 87,764,945 3) Discrepancies in operational results for the previous year results: Description Sales / Revenues Sales / Revenues Cost Total Profit Operational Revenues Other Operational Expenses Other Operational (Loss) Profit 15,904,854 (551,587) 15,353,67 (5,36,551) 10,116, ,699,36 86,90,3 315,619,648 6,600,79 6,379,865 68,980, ,341,380 (58,357) 14,813,03 (5,007,55) 9,805, ,098,399 55,613, ,711,555 7,603,077 58,1,84 65,815, ,970,66 49,900,419 79,870,685 6,144,148 35,8,8 41,37,970 (in thousand SAR) Changes (+) or (-) Change % 563,474 % ,30 540,44 99,96 310,948 % 4.40 % 3.65 % 0.00 % 4.58 % ) Geographical analysis for total revenues of ARB and its subsidiaries: (in thousand SAR) Geographical Analysis for Total Revenues of ARB Year of Saudi Arabia Kuwait Jordan Total 14,889,415 59,15 116,687 15,065,7 Geographical Analysis for Total Revenues of ARB s Subsidiaries Year of Saudi Arabia East Asia 649, ,35 - There are no loans on the Bank or its subsidiaries (whether payable on demand or others) Total 839,68 4

5 5) Comparison of SME Financial Results: Financial data of SME During the current year: Data (as of 31 December ) Finances awarded to small, medium, and micro enterprises Finances awarded to small, medium, and micro enterprises as a percentage of total finance Finances number Finance request number Finances number guaranteed by Kafalah program Finances Total guaranteed by Kafalah program Micro Small 1,104 % , (in million SAR) Medium 4,15 % ,971 1, Total 5,8 %.19 7,886, The competent team of SME has a portfolio with total amount of SAR.7 Bn (share of micro and small enterprises is 1 Bn Saudi Riyal, while medium enterprises share is SAR 1.7 Bn). Medium enterprises teams, affiliated to CBG, handle other transactions of portfolio. Financial data of SME during the previous year: Data (as of 31 December 016) Finances awarded to small, medium, and micro enterprises Finances awarded to small, medium, and micro enterprises as a percentage of total finance Finances number Finance requests number Finances number guaranteed by Kafalah program Finances Total guaranteed by Kafalah program Micro Small 1,51 % , Medium 3,379 % 1.5, Total 4,819 %.0 3, ) Applicable Accounting Standards: The Bank prepares its unified financial statements in accordance with international accounting standards based on circular of CMA no. (978/4) regarding applying international accounting standards. In addition, the Bank prepares its financial statements in compliance with Banking Control Law, Corporate Law in KSA and the Bank s Articles of Association. 7) ARB Subsidiaries: Subsidiary Name Al Rajhi Bank Malaysia Capital Ownership % 1,051,714,300 % 100 Al Rajhi Capital 500,000,000 % 100 Al Rajhi Takaful Agency,000,000 % 99 Type of Activity An Islamic Bank licensed under Islamic Financial Services Law issued in 013, incorporated and practices its business in Malaysia. A closed joint-stock, registered in KSA to work as a main agent and/ or provide financial brokerage services, insurance, management, consultancy, arrangements and keeping. A limited liability, registered in KSA to work as an agent to practice insurance brokerage activities according to agency agreement with Al Rajhi Cooperative Insurance. Country (place of operation) Malaysia KSA KSA Country (place of foundation) Malaysia KSA KSA 5

6 Subsidiary Name Al Rajhi Development Ltd. Capital 1,000,000 Ownership % % 100 Type of Activity A limited liability registered in KSA to support real estate finance programs of ARB by transferring and keeping real estate ownership documents in its name on behalf of the bank, collect revenues of selling some properties sold by the bank, provide consultancies in real estate and engineering field, register real estate contracts and supervising real estate valuation. Country (place of operation) KSA Country (place of foundation) KSA Al Rajhi Services Co. 500,000 % 100 A limited liability registered in KSA to provide recruitment services. KSA KSA 8) ARB s Policy in Distribution of Shares Dividend: The Bank distributes the specified annual net profits, after deduction of all general expenses and other costs and arranging the necessary provisions to confront doubtful debts, investment losses and urgent commitments for which the of Directors evaluates the risk level under the Banking Control Law and Saudi Arabian Monetary Authority (SAMA) directions as follows: a. The due Zakat amounts scheduled to be paid by shareholders are calculated and the bank pays such amounts to competent parties. b. The Bank transfers not less than 5% of the remaining net profits to the following year after deducting the Zakat of the statutory reserve to ensure that the mentioned reserve becomes equal - at least - to the paid capital. c. Of the remaining profits, not less than 5% of the paid capital after deducting the statutory reserves and Zakat to be distributed to shareholders according to recommendations of the of Directors and decisions of the General Assembly. If the percentage left from the profits due to shareholders is insufficient to pay the above-mentioned percentage, the shareholders may not claim to pay it during the next year(s) and the General Assembly may not decide to distribute a percentage of profit greater than the one proposed by the of Directors. d. After allocating the amounts mentioned in items (a), (b) and (c); the remaining amount will be used according to the recommendation of the of Directors and the decision of the General Assembly. Profits Distributed During the Year 1/07/ Percentage %15 Total,437,500 Percentage of Profits to be Distributed at the End of the Year %5 4,06,500 Total Profits %40 6,500,000 6

7 # Name 1 9) of Directors s: Abdullah bin Sulaiman Al Rajhi s ship ExCom Current Positions Previous Positions Qualifications Experiences Chairman of the and Chairman of ExCom - Al Rajhi Bank Chairman of the - Al Rajhi for Cooperative Insurance Chairman of the - Farabi Petrochemicals Chairman of the - Al Rajhi Holding Group Chairman of the - Al Rajhi Capital Chairman of the - Fursan Travel & Tourism Since 1979 at Al Rajhi Bank: Deputy GM of Financial Affairs. Deputy GM of Investment and Foreign Relations Senior Deputy GM. GM Chief Executive Officer Managing Director + Chief Executive Officer + ExCom Vice Chairman of the + ExCom Bachelor of Business Administratio n - King Abdulaziz University 1979 Contributed to the conversion of Al Rajhi Exchange and Trade into a Public joint stock and held many leading positions in ARB for more than 35 years until he currently becomes the Chairman of BoD. Salah bin Ali Aba Alkhail ExCom Governance, ExCom and Chairman of Governance - Al Rajhi Bank - Al Rajhi Capital Partner and Chairman of the - National Veterinary Chairman & Office owner - Salah Abalkhail Consulting Engineers Chairman of the - Salah Abalkhail & Co. Information Technology Since 197 at Norconsult Telematics : Project Engineer Assistant Project Engineer Project Manager Associate Consultant for the 's projects. of Engineering - Ministry of Commerce Bachelor of Electrical Engineering- University of Arizona 197 Working in the field of advisory and investment for more than forty years. He assumed the position of of Al Rajhi Bank, since the first tenure, and served as a of many committees. 3 Abdulaziz bin Khaled Al Ghefaily ExCom Nominations and Compensations - ExCom - of Nominations and Compensations - Al Rajhi Bank - Al Rajhi Capital - Savola Group - Herfy Food Services - Panda Retail Worked since 1981 until 016 at General Organization for Social Insurance GOSI - Industrialization & Energy Services Riyadh Hotels and Entertainment Co. - Saudi Industries Development - Tabuk Agriculture Development (TADCO) - National Medical Care. Bachelor of Economics King Saud University Master's Degree in Economics from Western Illinois University USA 1990 Working in the field of financial investment for more than twenty five years. 7

8 # Name 4 Bader Bin Mohamed Al Rajhi s ship Current Positions Previous Positions Qualifications Experiences - Al Rajhi Bank Managing Director and Vice Chairman - Mohammed Abdulaziz Al Rajhi & Sons Investment (MARS) Chairman of Rajhi Steel Industries Co. Ltd. (Rajhi Steel) Chairman of the - Global Beverage Chairman of the - Al-Jazirah Home Appliance Co. Ltd. Chairman of the - Falcon Plastic Products. Held several leading positions in areas of management, industry and real estate investment. He has served as a of boards of directors of joint-stock companies. High School Has an experience for more than twenty-five years, Mr. Bader has held several leading positions in areas of management, industry and real estate investment and served as a of boards of directors of many joint-stock companies. 5 Khaled bin Abdulrahman Al Qwaiz Nominations and Compensations Risk Management (BRMC) - of Nominations and Compensations - Chairman of BRMC - Al Rajhi Bank and ExCom - ACWA Holding, Audit and Chairman of the Nominations and Compensations Swicorp and Chairman of Audit - Riyadh Cables Group and Chairman of Nominations and Compensations - Saudi Tabreed - EMCOR Facilities Services Managing Director - ACWA Holding Chief Executive Officer - Astra Industrial Group GM -Corporate Banking Group in the Central Region - SAMBA Group. GM- Credit Group - Arab National Bank Manager of Financial and Administrative Affairs Sector - National Cooperative Insurance Head of Loan Team - Saudi Industrial Development Fund Bachelor of Urban Planning - University Washington- USA of Has more than 30 years of experience in the banking, financial, and industrial field, during which he held many banking leading positions in many local banks, in the field of retail, wholesale sector, risk and insurance. 6 Alaa bin Shakib Al Jabri ExCom Risk Management (BRMC) Nominations and Compensations, ExCom and of BRMC and Chairman of Nominations and Compensations - Al Rajhi Bank - Construction Products Holding - Rolaco Group + Chief Executive Officer - Medical and Pharmaceutical Services SIMAH - Higher Education Fund - Saudi Travelers Cheques - Arab International Bank Tunisia Head of Risk Group SABB GM of Western Region SABB GM - Gulf International Bank Director of International Business - National Commercial Bank Deputy CEO - Gulf International Bank Corporate Banking Manager - Saudi Investment Bank Bachelor of BA- American University in Beirut Master of BA- Enseed, France Has a professional experience for more than 30 years, in the banking and financial areas, during which he held many banking leading positions in many local and international banks. 8

9 # Name 7 Ibrahim bin Fahad Al Ghefaily s ship Governance Current Positions Previous Positions Qualifications Experiences and of Governance - Al Rajhi Bank - Jiwar Real Estate Management, Marketing and Development Head of Arriyada Financial Consulting Center. Alinma Bank Deputy General Manager of Banking and Development - Al Rajhi Bank Associate Professor at Faculty of Economics, King Abdulaziz University Vice Dean of Faculty of Economics, King Abdulaziz University Assistant Professor, Faculty of Economics, King Abdulaziz University Vice Dean of Faculty of Economics, King Abdulaziz University of the Graduate Studies, Faculty of Economics, King Abdulaziz University Financial Advisor of King Abdulaziz Endowment Project in Makkah Bachelor of Public Administratio n - King Abdulaziz University Master of Public Administratio n - California State University Ph.D in Philosophy- Florida State University 1981 Practiced academic work for 10 years and has experience in Islamic Banking sector for 10 years. In 00, he established Arriyada Financial Consulting Center and performed several studies and Islamic Financing Structuring for projects, the most prominent one is Abraj AlBait in Makkah. He has participated and presided various Islamic Financing conferences inside and outside the. 8 Amin bin Fahad Al Shiddi Audit and Compliance and Chairman of Audit and Compliance - Al Rajhi Bank. - VIVA - Kuwait Telecom. - Deutsche Gulf Finance. - Oger Telecom. - Solutions - Advanced Sale Limited - Arab Submarine Cables - Aqalat - Viva Bahrain Bachelor of Accounting, King Saud University Master Degree in Accounting, University of Missouri, USA CMA, SOCPA, CPA Has more than 5 years of experience in the fields of financial, investment, consulting and supervisory fields. He has served as a of boards of many local and international companies in various sectors and has ship in several professional, Commercial and consulting committees. 9 Hamza bin Othman Khushaim ExCom Risk Management (BRMC) - of ExCom and BRMC - Al Rajhi Bank and of Remuneration and Compensations - Dallah Healthcare Holding Director of International Investment Department - Hassana Investment of the Saudi Investor Association Certified of the Association of Financial Analysts USA Hedge Fund Portfolio Manager KAUST Endowment. Hedge Fund Manager Portfolio - Investment Management - Treasury - Saudi Aramco Co. Financial Analyst - Investment Management - Treasury - Saudi Aramco Co. Bachelor of Finance, Michigan State University Master Degree in Business Administrati on University of Michigan in Ann Arbor CFA Has 1 years of experience in investment. 9

10 # Name Raid bin Abdullah Al Tamimi Abdullatif bin Ali Al Seif s ship Governance Nominations and Compensations Audit and Compliance Current Positions Previous Positions Qualifications Experiences - of Governance - of Nomination and Compensations - Al Rajhi Bank - Al Rajhi for Cooperative Insurance - Waseel Electronic Information Transfer - Najm for Insurance Services - of Audit and Compliance - Al Rajhi Bank - HSBC Saudi Arabia - Arabian Cement Executive Director - Vision Combined Limited Portfolios Advisor for Investment Affairs - Public Pension Agency Since 1996 in Cooperative Insurance : Chief Executive Officer Senior Deputy CEO Technical Affairs Deputy CEO - Medical Insurance and Takaful Insurance GM of Human Resources and Administration Affairs Deputy Head and Head of Investment - King Abdullah Foundation Director of Portfolio Management - Masik Head of Portfolio Management, Investment Management Division Saudi Aramco Co. Portfolio Manager - KAUST Investment Management Financial Analyst Saudi Aramco Co. Bachelor of Medical Science, University of Wales, UK Has many training courses from international leading institutes such as Enseed, IMD, LBS, etc. Bachelor of Business Administratio n Boston University Master Degree in Business Administratio n - Boston University Master of Economics - Boston University CPA, CFA Has management experience for more than 0 years. Last leading position was the CEO of Tawuniya the Largest Insurance in MENA area. He currently serves as and committee in many listed and unlisted companies. Has more than 16 years of experience in investment. He serves on several boards and committees in many companies. 10) BoD Meetings: Name First Meeting 1// Second Meeting 19/3/ Third Meeting 15/5/ Number of Meetings: (7) Fourth Meeting 1/8/ Fifth meeting /10/ Sixth Meeting 1/11/ Seventh Meeting 18/1/ 1 Abdullah bin Sulaiman Al Rajhi Salah bin Ali Aba Alkhail 3 Abdulaziz bin Khaled Al Ghefaily 4 Bader bin Mohamed Al Rajhi 5 Khaled bin Abdulrahman Al Qwaiz 6 Alaa bin Shakib Al Jabri 7 Mohamed bin Abdullah Al Rajhi 8 Sulaiman bin Saleh Al Rajhi Their ship ended at the end of the ninth 9 Saeed bin Omar Al Essaie tenor on November 13, 10 Ali bin Saleh Al Barrak 11 Moaid bin Issa Al Qurtas 1 Ibrahim Fahad Al-Ghefaily 13 Amin bin Fahad Al Shiddi Their ship started with the tenth tenor on November 14 Hamza bin Othman Khushaim 14, 15 Raid bin Abdullah Al-Tamimi 16 Abdullatif bin Ali Al Seif 10

11 11) s s (Non- ): # Name 1 3 Abdullah bin Ali Al Maneef Farraj Bin Mansour Abuthnain Walid bin Abdullah Tmairak s ships Audit and Compliance Audit and Compliance Audit and Compliance Current Positions Previous Positions Qualifications Experiences of Audit Al Rajhi Bank of Shura Council of the Arab Parliament of Audit - Al Rajhi Bank - Astra Industrial Group of Petrochem of Audit - Almarai of Audit - Al Rajhi Bank of Audit - Ewaan Global Residential of Advisory of College of Management and Economics - King Abdulaziz University Tmairak is a Chartered Accountant Chief Executive Officer - Al Muneef Financial and Management Consultancy Office Advisor - National Guard Director General of Finance and Administration Affairs - National Guard Head of Accounting Department, King Saud University Associate Professor of Accounting Department, King Saud University Executive Director of Financial and Administrative Affairs - King Faisal Specialist Hospital Head of Accounting Association, King Saud University Assistant Professor of Accounting Department, King Saud University Lecturer at Accounting Department, King Saud University Director of Loan Department - Industrial Development Fund of the Project Loan - Industrial Development Fund of the Industrial Projects Performance Audit - Industrial Development Fund Senior Vice President of Finance and Investment - National Industrialization (Tasnee) Arthur Andersen & Co Ernst & Young Bachelor of Accounting - King Saud University Master Degree in Accounting - University of Southern California, USA PhD in Accounting - University of South Carolina, USA Bachelor of Industrial Management - University of Wisconsin Milwaukee Bachelor of Accounting - King Abdulaziz University Fellowship of SOCPA Held many academic, leading and advisory positions in financial and management fields. Held many leading positions in the Saudi Industrial Development Fund. Has more than 5 years of experience in accounting, auditing and economy. 11

12 1) Executive Management: No. Name Current Positions Previous Positions Qualifications Experiences 1 Stephano Paulo Bertamini CEO CEO Master Degree 31 years (Standard Chartered Bank) Finance and International Banking Business Abdullah Ali Alkhalifa CFO CFO Master Degree 7 years (ANB) Accounting 3 Christopher M. Macleen CRO CRO Bachelor Degree 34 years (West Bank) Accounting 4 Waleed Abdullah Almuqbil COO CFO PhD Accounting & 0 years (ARB) Auditing 5 Saleh Abdullah Alzumaie GM RBG GM RBG (Acting) Bachelor Degree 7 years (ARB) English Language 6 Majed Abdulrahman Alqwaiz GM CBG GM CBS Bachelor Degree 3 years (SABB) Finance Accounting 7 Abdulrahman Abdullah Alfadda GM Treasury GM Treasury & Investment (SAIB) Bachelor Degree Electrical Engineering 1 years 8 Abdullah Sulaiman Alnami CCO Deputy CORO (Riyad Bank) Master Degree Management and Business 9 Khalid Fahad Alhozaim CHRO GM HR (Acting) (ARB) Bachelor Degree Computer Engineering 10 Omar Abdullah Alsaab CGLO Legal Advisor Master Degree (Alfaisliah Holding Corporate Laws and Group) Finance 11 Mohammed Ali Hawwash CIA CIA (Investment Bank Jordan) 1 Hisham Ahmed Alabdali Executive Director SME 13 Ahmed Mohammed Anwar CIO Mohammed 14 Majed Saleh Al Rajhi Head of Private Banking & Affluent 15 Waleed Mohammed Almouh CISO CSSIBO (ARB) Deputy CCBSO (Riyad Bank) Deputy CIO (ARB) Regional Manager Medium Enterprises Central Region (ARB) Bachelor Degree Accounting Bachelor Degree Management Sciences Bachelor Degree Economy Bachelor Degree Finance Master Degree Computer 3 years 18 years 16 years 3 years 9 years 9 years 1 years 17 years 1

13 13) Names of companies inside/outside the, where the is a of its current and previous boards or one of its directors: Name Names of companies where the is a of its current boards or one of its directors. Inside/ outside Legal Entity (Listed Joint Stock / Unlisted Joint Stock / Limited Liability) Names of companies, in which the is a of its previous boards or one of its previous directors Inside/outsid e Legal Entity (Listed Joint Stock / Unlisted joint Stock / Limited Liability) Abdullah bin Sulaiman Al Rajhi Salah bin Ali Aba Alkhail Abdulaziz bin Khaled Al Ghefaily Bader Bin Mohamed Al Rajhi Al Rajhi Bank Al Rajhi for Cooperative Insurance Farabi Petrochemicals Al Rajhi Holding Group Rajhi Capital Fursan Travel & Tourism Al Rajhi Bank Al Rajhi Capital National Veterinary Abalkhail Consulting Engineers Salah Aba Alkhail & Co. Information Technology Al Rajhi Bank Al Rajhi Capital Savola Group Herfy Food Panda Retail Al Rajhi Bank Mohammed Abdulaziz Al-Rajhi & Sons Investment Rajhi Steel Industries Limited Global Beverage Al-Jazirah Home Appliance, Ltd. Falcon Plastic Products. Inside the Inside the Inside the Inside the Listed joint stock Listed joint stock Unlisted Unlisted Unlisted Limited liability Listed joint stock Unlisted Unlisted Limited liability Limited liability Listed joint stock Unlisted Listed joint stock Unlisted Unlisted Listed joint stock Limited liability Limited liability Limited liability Limited liability Al Rajhi Bank (CEO) Industrialization & Energy Services (TAQA) Dur Hospitality Saudi Industries Development Tabuk Agriculture Development National Medical Care Inside Inside the the Listed joint stock Unlisted Unlisted Unlisted Listed joint stock Listed joint stock 13

14 Name Names of companies where the is a of its current boards or one of its directors. Inside/ outside Legal Entity (Listed Joint Stock / Unlisted Joint Stock / Limited Liability) Names of companies, in which the is a of its previous boards or one of its previous directors Inside/outsid e Legal Entity (Listed Joint Stock / Unlisted joint Stock / Limited Liability) Khaled bin Abdulrahma n Al Qwaiz Al Rajhi Bank ACWA Holding Swicorp Riyadh Cables Group Inside the Listed joint stock Unlisted Unlisted Unlisted ACWA Holding ASTRA Industrial Group Samba Financial Group Arab National Bank Inside the Unlisted Listed joint stock Listed joint stock Listed joint stock Alaa bin Shakib Al Jabri Ibrahim Fahad Al Ghefaily Amin bin Fahad Al Shiddi Hamza bin Othman Khushaim Raid bin Abdullah Al Tamimi Abdullatif bin Ali Al Seif Al Rajhi Bank Construction Products Holding Rolaco Group Medical and Pharmaceutical Services Al Rajhi Bank Jiwar Real Estate Management, Marketing and Development Al Rajhi Bank VIVA - Kuwait Telecom. Deutsche Gulf Finance. Oger Telecom. Al Rajhi Bank Dallah Healthcare Holding Hassana Investment Al Rajhi Bank Al Rajhi for Cooperative Insurance Waseel Electronic Information Transfer Najm for Insurance Services Al Rajhi Bank HSBC Saudi Arabia Arabian Cement Vision Combined Limited Inside the Inside the Inside and outside the Inside the Inside the Inside the Listed joint stock Unlisted Unlisted Unlisted Listed joint stock Unlisted Listed joint stock Unlisted Unlisted Unlisted Listed joint stock Listed joint stock Unlisted Listed joint stock Listed joint stock Unlisted Unlisted Listed joint stock Unlisted Listed joint stock Limited liability SABB SABB Gulf International Bank Alinma Bank Al Rajhi Bank STC Solutions Advanced Sale Limited Arab Submarine Cables Aqalat Viva Bahrain For Cooperative Insurance "Tawuniya" MASIK KAUST Investment Management Co. Inside outside Inside Inside outside Inside Inside outside and the the and the the and the Listed joint stock Listed joint stock Unlisted Listed Joint stock Listed Joint stock Unlisted Unlisted Unlisted Unlisted Unlisted Listed joint stock Unlisted Unlisted 14

15 14) Composition of the of Directors and classification of its s as follows: Executive -Non-Executive - Independent : Sr. Name ship Classification (Executive/ Non-Executive/ Independent) 1 Abdullah bin Sulaiman Al Rajhi Non-Executive Salah bin Ali Aba Alkhail Non-Executive 3 Abdulaziz bin Khaled Al Ghefaily Non-Executive 4 Bader bin Mohamed Al Rajhi Non-Executive 5 Khaled bin Abdulrahman Al Qwaiz Non-Executive 6 Alaa bin Shakib Al Jabiri Independent 7 Ibrahim bin Fahad Al Ghofaily Independent 8 Amin bin Fahad Al Shiddi Non-Executive 9 Hamza bin Othman Khushaim Non-Executive 10 Raid bin Abdullah Al Tamimi Independent 11 Abdullatif bin Ali Al Seif Independent 15) Actions taken by BoD to provide its s with suggestions and remarks of shareholders on the Bank and its performance: ARB registers shareholders suggestions provided through General Assembly and notify Chairman of any suggestions to be presented at the next meeting. In addition, there is an address published on the bank and Tadawul websites dedicated to receive comments and suggestions of shareholders which are delivered directly to Secretary which present the same to. 16) A brief description of ARB s' competences and functions: A- Executive : The Executive, headed by Chairman of the of Directors, carries out all the functions and authorities the Bank entrusts it with, including: assuming the responsibility for all businesses of Al Rajhi Bank, taking the quick decisions with respect to urgent matters and issues related to the business of the Bank. Also, ExCom will be responsible for approving all credit facilities exceeding the authorities of Credit, approving the real estate guarantees documented for default facilities, approving the contracts exceeding the powers of the committees operating in the Bank and CEO within limits of the approved budget and within powers determined by of Directors. The held 14 meetings in as follows: 15

16 Meeting No. Date Abdullah bin Sulaiman Al Rajhi Chairman Salah bin Ali Aba Alkhail Abdulaziz bin Khaled Al Ghefaily Name Alaa bin Shakib Al Jabri Moaid bin Issa Al- Qurtas Hamza bin Othman Khushaim 1 11/1/ 1// 3 19/3/ 4 17/4/ His ship 5 15/5/ started with the tenth 6 1/6/ tenor on November 7 1/6/ 14, 8 5/7/ 9 1/8/ 10 1/10/ 11 /10/ 1 10/1/ His ship ended at the end of the ninth 13 18/1/ tenor on November 14 6/1/ 13, B- Nominations and Compensations : The main purpose of Nominations and Compensations include recommending the selection of s, s s, and senior executives to of Directors, preparing description of abilities and qualifications required for BoD ship, assessing the effectiveness and efficiency of BoD and High Management, compliance of the Bank with the internal incentives schemes, and rules of incentives practices issued by SAMA, principles and criteria of compensations, in the way best achieves the interests of depositors, shareholders and Bank's strategic objectives. The held two meetings during as follows: Meeting No. Date Ali bin Saleh Al Barrak Chairman Abdulaziz bin Khaled Al Ghefaily Khaled bin Abdulrahman Al Qwaiz Name Saeed bin Omar Al Issaie 1 0/8/ 10/1/ His ship ended at the end of the ninth session on November, 13 His ship ended at the end of the ninth tenor on November, 13 Alaa bin Shakib Al Jabri Chairman His ship started with the tenth tenor on November, 14 Raid bin Abdullah Al Tamimi His ship started with the tenth tenor on November 14, 16

17 C- Governance : The main purpose of Governance includes the annual review of of Directors structure and committees, and governance framework in the Bank, updating policies related to BoD and s, Bank's governance and conflict of interests, supporting and maintaining the application of the highest standards of corporate governance issued by SAMA and Corporate Governance Regulations issued by CMA, in addition to following up the application of Governance manual and its appendixes, Bank's matrix of authorities, and following up the works of management committees. The held two meetings during as follows: Meeting no. Date Salah bin Ali Aba Alkhail Chairman Ali bin Saleh Al Barrak Name Alaa bin Shakib Al Jabri 1 7// 16/8/ His ship ended His ship in the at the end of the ninth committee ended at the tenor on November 13, end of the ninth tenor on November 13, Ibrahim Fahad Al Ghefaily His ship started with the tenth tenor on November 14, Raid bin Abdullah Al Tamimi His ship started with the tenth tenor on November 14, D- Audit and Compliance : Audit and Compliance plays a key role in supporting of Directors in having effective oversight on the operational activities of financial reports, adequacy and efficiency of the Internal Control environment, supervising the operational activities of Internal Audit Group, ensuring its effectiveness in executing roles and responsibilities assigned by of Directors. Additionally, it recommends for the selection of external auditors. Also, the ensures the independence and effectiveness of Internal Audit Group, approves the internal audit annual plan, reviews issued Internal Audit reports including ARB management level of implementation of audit recommendations. In addition, The ensures the adequacy and effectiveness of the operational activities of Compliance Group including level of compliance with its policy and manual, approves compliance annual program, reviews Compliance Group periodical and annual reports, ensures implementation of weaknesses identified by Compliance Group. Furthermore, the reviews periodical minutes of meetings related to Compliance and reports issued by regulators. The held six meetings during as follows: Name Meeting No. Date Moaid bin Issa Al Qurtas Chairman Mohamed bin Abdullah Al Rajhi Sultan bin Mohammed Sultan Farraj bin Mansour Abuthnin Walid bin Abdullah Tmairak 1 5// Amin bin Fahad Al Shiddi Chairman Abdullatif bin Ali Al Seif Abdullah bin Ali Almaneef 8// 3 16/3/ 4 19/4/ 5 6/7/ 6 17/10/ His ship ended at the end of the ninth tenor on November 13, His ship ended at the end of the ninth tenor on November 13, His ship ended at the end of the ninth tenor on November 13, His shi p started with the tenth tenor on November, 14 His ship started with the tenth tenor on November 14, His ship started with the tenth tenor on November 14, 17

18 E- Risk : This committee was formed after the election of BoD in the current tenure. The purpose of BRMC is to assist of Directors in maintaining oversight responsibility for activities and resolutions related to management of risks in credit, operational risks, business, market, investment and financial businesses and reputation. Additionally, it includes the provision of consultation to BoD with respect to the risk appetite and risk strategy, Internal Capital Adequacy Assessment Process (ICAAP), credit & provisions policy, liquidity policy framework, dealing with finance and liquidity limits. The committee is also responsible for approving losses arising out of (banking operations, fraud, system errors and compensation of customers) that falls beyond the powers of Risk Management. The held five meetings during as follows: Name Meeting No. Date Alaa bin Shakib Al Jabri Chairman / Ali Bin Saleh Al Barrak Bader Bin Mohamed Al Rajhi Khaled bin Abdulrahman Al Qwaiz Chairman Hamza bin Othman Khushaim 1 13// 0/3/ 3 1/6/ 4 19/10/ His ship started as chairman with the tenth tenor on November 14, His ship started with the tenth tenor on November 14, 5 17/1/ His ship ended at the end of the ninth tenor on November 13, His ship ended at the end of the ninth tenor on November 13, 17) The methods used by to evaluate BoD, s and their s performance: Governance evaluate performance of, s and s via specific surveys on three different levels. Evaluation is conducted based on BoD terms of reference specified in ARB s Governance Manual. Evaluation of s and Audit and Compliance is conducted based on its approved charters. Evaluation of and committee s is conducted by the himself. After that, Governance raise the annual assessment report to of Directors to be approved. Finally, a copy of the final report is provided to Nominations and Compensations. 18) The remunerations of BoD, s and Executive Management s: A) Summary of significant items of Policy for remunerations of BoD and s and Executive Management s. 1- of Directors Remunerations and Compensations: ARB s s will receive a fixed annual remuneration of SAR 400,000 for their ship in ARB s of Directors and their participation in its activities. 18

19 will receive an attendance fee of SAR 5,000 for his attendance of each meeting either personally or through electronic remote channels. ARB shall compensate s for their actual expenses paid to attend the meetings including travelling and accommodation expenses. - Remunerations and Compensations of BoD s for their ship in s: ARB s s will not receive an additional remuneration for their ship in ARB s committees as the annual remuneration will include any other remuneration paid for the director for his participation in any. will receive an attendance fee of SAR 5,000 for his attendance of each either personally or through electronic remote channels. ARB shall compensate s for their actual expenses paid to attend the s meetings including travelling and accommodation expenses. 3- Remunerations and Compensations of Audit and Compliance s: ARB s Audit and Compliance committee s, either from inside or outside the, will receive a fixed annual remuneration of SAR 150,000 for their ship in the and his participation in its activities provided that annual remuneration for Audit and Compliance from inside the shall not exceed the annual limits set by Policy for Remuneration and Compensation approved by ARB s General Assembly. Audit and Compliance s will receive an attendance fee of SAR 5,000 for his attendance of each meeting either personally or through electronic remote channels. ARB shall compensate s for their actual expenses paid to attend the meetings including travelling and accommodation expenses. 4- Granting shares: ARB does not grant shares as a remunerations for any, and Audit Compliance s. 5- Allocation and Payment Mechanisms for Remunerations and Compensations: Remuneration and compensations for s and Non- s will be allocated annually based on recommendation from Nomination and Compensation and approval of, amounts will then be presented to the next General Assembly meeting for ratification. Remuneration can vary to reflect the Director s experience, independence and number of attended meetings among other criteria. Attendance fees are paid annually to directors based on their attendance sheets for, s, and Audit and Compliance meetings. Payments are done through bank transfers, cheques, or any other methods, and Directors are informed of details through relevant departments. Remuneration and Compensations paid to directors should not exceed SAR 500,000 annually, payment of any additional due amounts will be stopped, total amounts paid to directors should not exceed 5% of total net profits. 19

20 6- Remunerations and Compensations of Senior Executives: The role of the of Directors includes, but not limited to, the following: The of Directors is responsible for approving the overall design and oversight of all aspects of the Remuneration system and shall not delegate this responsibility to management. Despite the establishment of the Nomination & Compensation, the of Directors shall be ultimately responsible for promoting effective governance and sound Remuneration practices. The of Directors shall review and, if satisfied, approve the Remuneration Policy and any of its subsequent revision/ updates, on the recommendation of the Nomination & Compensation, taking into account, inter-alia, the Rules on Compensation Practices of May 010 and any future updates or revisions, issued by Saudi Arabian Monetary Agency (SAMA). The of Directors shall review and, if satisfied, approve the recommendations of the Nomination & Compensation regarding the level of remuneration of the key executives. The Key executives for this purpose will include senior managers and all those executives whose appointments is subject to no objection by SAMA or other regulators. The of Directors shall ensure that the management has put in place elaborate systems and procedures and an effective oversight mechanism to ensure compliance of the SAMA Rules on Compensation Practices and the FSB Principles and Standards. 7- Structure of remunerations and compensations granted to senior executives: The Remuneration structures for various levels of employees should be designed to promote effective risk management and achieve Remuneration and Compensation objectives. The mix of forms of Remuneration should vary depending on the employees position and role, and may include cash, equity and other forms of compensation. The proportion of fixed and variable components of Remuneration for different business lines may be determined taking into account the nature and level of responsibilities of an employee, business area in which he/she is working, and the overall philosophy of the Remuneration Policy of the bank. The bank should ensure that the total variable remuneration does not limit its ability to strengthen the capital base. The Remuneration structure of employees working in control functions such as risk management, compliance, internal control, etc. should be designed to ensure objectivity and independence of these functions. In this regard, it should be ensured that performance management and determination of remuneration of such employees are not dealt with by any person working in/ associated with the business areas monitored by them. The determination of the bonus pool should take into account the overall performance of the bank whereas its distribution to individual employees should be based on performance of the employees as well as that of the business unit or division in which he/ she is working. There should, however, be no guaranteed minimum bonuses and similar other payments, other than an employee s salary, that are not based on performance. The bank may as part of the Remuneration Policy, provide deferment of a reasonable proportion of performance bonus with a minimum vesting period of not less than three (3) years. The proportion of the bonus to be deferred and the vesting period should be determined based on the nature of the business, its risks and the activities of the concerned employee. 0

21 Where the Remuneration Policy provides for payment of a part of the compensation in shares, it should also lay down the criteria to be used for determining the value for allocation of shares. Furthermore, the payouts in shares should be subject to an appropriate share retention policy. Joining bonuses are not permitted, unless clearly aligned with long-term value creation and prudent risk taking. Any such payments should be related to performance achieved over time and designed in a way that does not reward failure. Joining bonuses should be at least linked to successful completion of probation period and where possible, deferring the joining bonuses, on terms similar to the deferred bonuses foregone from the previous. The Bank should demand from their employees that they commit themselves not to use personal hedging strategies or remunerations- and liability-related insurance to undermine the risk alignment effects embedded in their remuneration and compensation arrangements. The Bank confirms that there are no material deviations between granted remunerations and applicable remunerations policy. # B) Remunerations and Compensations paid to s of BoD, committees, Audit and Compliance in : Name Mohammed bin Abdullah Al Rajhi (ex-) Sulaiman bin Saleh Al Rajhi (ex-) Saeed bin Omar Alessaie (ex-) Moaid Essa Alqurtas (ex-) Ali bin Saleh Albarrak (ex-) Sultan bin Mohammed Alsultan (ex-) No BoD Amount 10,000 0,000 0,000 5,000 5,000 Audit and Compliance No. Amount ,000 30,000 30,000 No. 11 ExCom Amount 55,000 Nominations & Compensation s No. Amount 1 1 5,000 5,000 Governance No. Amount 10,000 Risk No. 4 Amount 0,000 Annual Remuneration 477, , , , , ,74 Total 50, ,397 37, , , ,74 Total after applying the policy 500, ,397 37, , , ,74 7 Abdullah bin Sulaiman Al Rajhi 7 35, , , , ,000 8 Saleh bin Ali Aba Alkhail 7 35, ,000 10, , , ,000 9 Abdulaziz bin Khalid Alghefaily 7 35, ,000 10, , , , Khalid bin Abdulrahman Alqwaiz 6 30,000 10, , , , , Bader bin Mohammed Al Rajhi 6 30, , , , , Alaa bin Shaikab Aljabri Ibrahim bin Fahad Alghefaily (new ) Raid bin Abdullah Al Tamimi (New ) Hamza bin Othman Khoshaim (New ) Amin bin Fahad Al Sheddi (New ) Abdullatif bin Ali Al Seif (New ) Abdullah bin Ali Almaneef (New ) Waleed bin Abdullah Tmairak Farraj bin Mansour Abuthnain Total ,000 10,000 10,000 10,000 10,000 10, , ,000 5,000 5,000 5,000 35, , ,000 15, , ,000 5,000 40, ,000 30, ,000 5,000 70, ,000 51,507 51,507 51,507 70,8 70,8 19, , ,000 5,143,88 540,000 61,507 66,507 81,507 85,8 85,8 4, , ,000 6,13,88 500,000 61,507 66,507 81,507 85,8 85,8 4, , ,000 5,96,945 1

22 C) Remunerations and compensations paid to five senior executives who have received highest remunerations from the including CEO and CFO in. Description Salaries and Compensations Allowances Periodic and Annual Rewards Incentives Schemes Any other in-kind compensations or benefits paid annually or monthly Total Five senior executives (CEO & CFO included) 8,819,666 4,718,404 30,571,63 44,109,70 19) Any penalty, precautionary measure, or precautionary legal binding imposed on the Bank by CMA or any other supervisory, regulatory, judicial authority. - There is no fine imposed by CMA. - Fines imposed by SAMA: Violation Violation of SAMA supervisory instructions Violation of SAMA instructions related to customer protection Violation of SAMA instructions related to due-diligence Violation of SAMA instructions related to service level of ATMs and POSs Violation of SAMA instructions related to due diligence in AML and TF Number of Resolutions Fiscal Year Total Amount of Fines in Saudi Riyal 15,864,000 10,000 7,377 10,000 - Fines imposed by Ministry of Municipal and Rural Affairs: Violation Increase of building area percentage for ATMs, lack of setbacks, visible advertising posters on branches facades and ATMs and non-existence of licenses for some bank s locations. Fiscal Year Total Amount of Fines in Saudi Riyal,044,500

23 0) Results of annual audit on effectiveness of internal control procedures in the Bank, and BACC opinion on adequacy of internal control system: Internal Control: The Bank s management is responsible for developing and maintaining an adequate internal control system supervised directly by. The system has been developed to efficiently handle risks which may hinder achieving the Bank s strategic targets. ARB s Management has adopted an integrated and adequate internal control system meeting SAMA requirements. Adequacy of ARB s internal control system are represented in the following: The bank has set up a general framework of governance, through which, the appropriate control can be imposed at the level of the bank. This framework determines the roles and responsibilities entrusted to all levels, including the of Directors, committees and other management committees. The bank has a series of policies and procedures that govern its business which are subject to regular updates and reviews to verify their sufficiency and adequacy for bank s activities. Most of the Bank s operations are executed automatically through a sophisticated electronic system, which minimize errors and mitigate fraud opportunities. All activities in general and major important decisions are supervised through committees created for this purpose and to ensure the sound conduct of business and protect the safety and quality of the Bank s assets. The bank has departments specialized in evaluating/monitoring controls, including Internal Audit, Compliance, Anti-Fraud and various Risk Management Departments. Existence of Audit and Compliance supervising the internal and external auditors, thereby enhancing their independence. This provides regular and periodic reports about the activities of the units and activities subject to auditing. Regular supervision of the efficiency and adequacy of the Internal Control System based on an annual plan approved by the Audit and Compliance. Aspects of Internal Control are regularly supervised by the external auditors and reviews done by SAMA. Annual Review of Adequacy of Internal Control Procedures: in, ARB exerted its best efforts to ensure adequacy of internal control system procedures to comply with requirements of internal control issued by SAMA. in addition, reviews of internal control system efficiency in have provided reasonable assurance on the adequacy of internal control process and existence of necessary procedures to determine and handle high risks in ARB as well as its proper application which resulted in non-existence of essential weaknesses affecting adequacy of internal control environment. Based on the assessment of the general framework of the internal controls, the bank, in general, has an adequate internal control system which is supervised periodically. Based on the results of internal control procedures adequacy assessment and continuous assessment of control processes applied by the management during the year, Audit and Compliance concludes that the current internal control system in ARB is sufficient, working properly and regularly supervised. In addition, the management is continuously keen to enhance internal control system. There is no conflict between recommendations of Audit and Compliance and BoD regarding appointment, termination, determination of fees and assessment of ARB external auditors. 3