corporatesocialresponsibilityreport 2013

54

Tableof Contents

Listof Tables

Listof Figures

Listof Appendices

Table 01 - Bank Audi's Membership in IndustryAssociations 14

Table 02 - Regulations to which Bank Audi GroupLebanon Subscribes 19

Table 03 - Total Number and Percentage of Employeeswho Received Training on Anti-corruptionby Category 20

Table 04 - Percentage of Senior Management atSignificant Locations of Operation forBank Audi Group Lebanon 26

Table 05 - Employee Composition by Gender andEmployee Category at Bank AudiGroup Lebanon 41

Table 06 - Employee Composition by Age Group and Employee Category at Bank AudiGroup Lebanon 42

Table 07 - Governance Body Composition by Genderand Age Group at Bank Audi 42

Table 08 - Employee Distribution by Contract Typeand Gender at Bank Audi Group Lebanon 42

Table 09 - New Employee Hires in Bank AudiGroup Lebanon 43

Table 10 - Return to Work Rates after Parental Leaveby Gender in Bank Audi Group Lebanon 46

Table 11 - Retention Rates after Parental Leaveby Gender in Bank Audi Group Lebanon 46

Table 12 - Paper Recycling between 2012 and 2013 52

Table 13 - Total Weight of Waste by Type 52

Table 14 - Bank Audi's Greenhouse Gas Emissionsbetween 2012 and 2013 53

Table 15 - Global Warming Potentials (GWP) of Common Greenhouse Gases and Refrigerants 55

Table 16 - ISO 26000 Core Subjects Reference Table 62

Table 17 - Implementation of GRI Content Index - General Standard Disclosures 63

Table 18 - Implementation of GRI Content Index - Specific Standard Disclosures 66

Table 19 - Implementation of the 10 Principlesof the UN Global Compact 67

Table 20 - Bank Audi Awards for Bank Audi GroupLebanon in 2013 69

Figure 01 - Our CSR Milestones 06

Figure 02 - Main Steps Followed in our MaterialityAssessment 09

Figure 03 - Materiality Matrix and Main Issues of Priority Concern for 2013 10

Figure 04 - Bank Audi CSR Pillars for 2013 11

Figure 05 - At end 2013 CSR at a Glance 12

Figure 06 - A Partnership Model for CSR 15

Figure 07 - CSR Committee Charter 18

Figure 08 - A Spectrum of Bank Audi's Brands,Products and Services 25

Figure 09 - Bank Audi's Kids RewardsProgram Characters 32

Figure 10 - "Be a Hero for a Day" VolunteeringProgram Examples 33

Figure 11 - A Spectrum of Community DevelopmentInitiatives 34

Figure 12 - A Rounded Employee DevelopmentProcess 38

Figure 13 - Bank Audi's EmployeeSponsorship Grants 40

Figure 14 - Employee Tenure at Bank AudiGroup Lebanon 45

Figure 15 - Government Capacity Building Programat Bank Audi 47

Figure 16 - Total GHG Emissions per Year forBank Audi 53

Figure 17 - Bank Audi's Greenhouse GasEmission Sources 54

Figure 18 - Emissions per Source in 2013 54

Figure 19 - Monthly Variation of GHG Emissionsin Bank Audi Group Lebanon 55

Figure 20 - Sources of Conversion Factors Used 56

Appendix 1 - Highlights of Code of Ethics and Conduct 71

Appendix 2 - Bank Audi CSR Policy 72

Welcome 04Introduction 06 Our Materiality Process 07Our Updated CSR Strategy for 2013 11A Partnership Model for CSR 14

The Corporate Governance Pillar 16The Economic Development Pillar 22The Community Development Pillar 28

Health 30Humanitarian and Social Initiative 31Employee Volunteerism 32Culture 34Sports 34

The Human Development Pillar 36

Training and Development 38Performance Appraisal/Management 39Talent Management 39Diversity and Equal Opportunity 40Compensation and Benefits 43Rewards System 45Occupational Health and Safety 46Educational Aid in Community 46Capacity Building 47

The Environmental Protection Pillar 50

Solid Waste 52GHG Emissions 53Energy Consumption 55Environmental Loans and Sponsorships 57Scientific Research 58

Supplementary Information 60Reporting and Ratings 62Conclusion 68Internal Audit 71

76

WelcomeStatement of the Chairman and the Chief Executive Officer

The year 2013 was another good year for Bank Audi at both business and performance levels, whereby the results fairly reflect the set strategic orientations. They underscore the Group’s leaner organisation and its capacity to seize opportunities for the development of activities and expansion in new better rated countries, ensuring added value to all stakeholders within its customers’ and shareholders’ base at large.

As in previous years, our results were achieved without compromising our commitment to Social Responsibility objectives. They were reached within a sound Governance framework (commended again by industry observers and agencies) and while upholding the highest ethical standards, maintaining environmental awareness, remaining supportive and engaged in our communities, and promoting culture.

In 2012, Bank Audi had formalised its adherence to its long lasting inherent CSR principles, and had developed a comprehensive and ambitious Corporate Social Responsibility policy founded on 4 key pillars: Sound Governance, Economic Development, Community Engagement and Human Development.

In 2013, we articulated it further, giving the environmental dimension a higher visibility and promoting it to the same pre-eminence as the other pillars. We are proud to have abided by our ambitious policy, and to have advanced on all previously launched initiatives, notably in our support to young entrepreneurs, as well as in environmental efforts, capacity building and philanthropy. Many new objectives were also set and reached, including the development of a far reaching Social and Environmental Management System, the promotion of CSR awareness at all levels of the corporation, the boosting of employee community engagement, the consolidation of our commitment to best sustainability reporting guidelines, and others.

In 2013, Bank Audi also took additional CSR-related commitments towards existing and new stakeholders, thus tying further its long term financial performance and success with its commitment to its CSR policy and objectives.

At a time where the global banking industry is under an exceptional scrutiny, where spectacular social responsibility failures (in terms of corruption, wrongdoings and unethical behaviour) have tarnished the reputation of renowned global banking leaders, and where worldwide regulators are looking at the banking industry as a key law enforcement vector, we, at Bank Audi understand more than ever before the crucial importance of being accountable for one’s acts

and of being a role model for ethical behaviour. Hence, Bank Audi’s commitment to sustain a sound financial standing and performance comes concurrently with a commitment to preserve the common interests of all our stakeholders through sound controls, risk management and governance practices, and with a commitment to be a role model, not only for ethical behaviour, but also for environmental awareness, for community engagement and support, and for the promotion of culture.

In conclusion, we wish to express our gratitude to our shareholders, customers and employees for their continuous support and for embracing with us our crucial CSR objectives.

Sincerely,

Raymond W. AudiChairman and General Manager

Samir N. HannaGroup Chief Executive Officer

98

IntroductionFounded in 1830 in Lebanon, Bank Audi has sustained its solid growth, building a strong legacy of excellence in banking. While the Bank continues to be headquartered in Lebanon, by 2013 it had successfully expanded to 12 countries located across the Near East, North Africa, GCC and Europe, including Jordan, Egypt, Turkey, Qatar, the Kingdom of Saudi Arabia (KSA), Monaco, Sudan, Syria, as well as France and Switzerland. Bank Audi is a joint stock company (“société anonyme libanaise”) with a diversified shareholder base that encompasses historical shareholders, large regional investors, and international institutional investors. The Bank offers a full range of products and services that cover principally Corporate, Commercial, Individual and Private Banking, and caters to the needs of various sectors and industries in the economy including: manufacturing, trading (wholesale and retail), construction and real estate development, hotels, apartments and restaurants, education, media services, health and social services, and individuals and high net worth customers. Some of the primary brands, products and services include a variety of accounts, loans, cards collection, in addition to assurance, insurance and investment products across regions and branches. Going forward, Bank Audi aims to position itself as a large “Levant Bank”, with Lebanon, Turkey and Egypt constituting the main development pillars by geography, and to pursue its robust financial growth strategy, building on its established track record of sustained

growth, excellent financial standing and large financial flexibility, in the context of an entrenched risk management culture and best practice corporate governance.

To date, we have managed to bolster, diversify and grow our Corporate Social Responsibility (CSR) strategy in the Lebanese context. In this respect, we are building on strong foundations from previous years, including the setting up of a stand-alone CSR unit in 2010, the establishment of a CSR Committee and a formal CSR Policy in 2012, the piloting of ISO 26000 Guidance in 2012, as well as the delineation of our four-pronged CSR strategy in 2012, revolving around four core pillars, including sound governance, economic development, community development and human development. In 2013, we are proud to continue to steer forward in relation to being a leader in CSR in the local context, by adding a menu of new worthwhile social initiatives that will be disclosed in this report, but also refining and bolstering our CSR strategy through integrating a stand-alone environmental protection pillar in 2013 to complement the mix (Figure 1). We believe that environmental stewardship is an important social issue both in the Lebanese context and globally, and we are keen to give it full and systematic attention as illustrated in the current report. The Report explains how the selection of these five pillars for 2013 is validated through an assiduous materiality exercise, consultations with internal and

external stakeholders, and close adherence to G4 reporting principles and guidelines in 2013.

Other important achievements in 2013 include the initiation of a local volunteering program, “Be a Hero for a Day”, which formally extends our long tradition of volunteerism and community service. We have also introduced a one of a kind capacity building project which makes various training and skill building modules available to the public sector, to help in sharing knowledge and nurturing public service effectiveness, efficiency and productivity. We have also gone a long way in further institutionalising CSR through the core operations of the Bank, by introducing a charter for the CSR Committee which formalises its mission, mandate and scope. Moreover and in addition to various CSR awareness sessions, we conducted an employee survey to seek feedback on CSR, and disseminated a CSR tracking sheet to core operational units, as well as to the recent integration of a required operational assessment of the presence of a CSR component in various projects. We have also initiated discussion with our various subsidiaries across the Group to harmonise CSR efforts around core materiality issues, although this is still in early phases of coordination.

In 2013, we have therefore explicitly adopted an approach to CSR that respects the triple bottom line, expressing a strong commitment to a better world and a means of measuring and reporting our performance against economic, social and environmental parameters. In this context, we are proud to constantly scrutinise and reinvigorate our CSR strategy, building on what we have done in previous years, but also forecasting future trends, encouraging efficiency and the precautionary principle, looking downstream at impacts but also upstream at causes, and taking into consideration the social and environmental realities around us, as well as the limits to the growth of our current ecosystem. The precautionary principle is in fact central to our business and risk management processes, and guides our CSR strategy across our five pillars. This has translated into a continuous learning and improvement journey, and important changes to our business model and patterns of resource use that are more restorative and inclusive and seek to make us a more sustainable business that contributes in a positive way to making the world a better place. Our approach to CSR is thus an extension of our core values which revolve around Transparency, Human Capital, Heritage, Quality, Civic Role and Innovation. It embodies important elements of partnering and collaboration, as discussed in the enclosed report, all intended to contribute to make a positive difference in the lives of people and the societywe live in.

The current document is the third edition of Bank Audi’s annual CSR Report, for the 2013 reporting period, and sits alongside the Bank’s 2013 Annual Report, with the

most recent previous report being that of 2012 which was published in September 2013. The Report will flesh out all the above advances within a discussion of Bank Audi’s revised and extended CSR strategy which revolves around our five identified CSR pillars. We are confident that the discussion that follows will not only be engaging, but will also help capture our manifold positive impacts on people, society and the environment during 2013. Hence the Report provides aggregate and detailed reporting in relation to core activities falling under each of those five pillars which are grounded in an extended materiality exercise that has helped us focus on the issues that matter the most to our business, our stakeholders and our society. This year, we have raised the bar in terms of transparency and with regard to the scope of our reporting by mapping the Report’s coverage in relation to the core subjects captured in the ISO 26000 guidance. In this respect, we were fortunate to be the first bank in Lebanon to benefit from piloting ISO 26000 and integrating its guidance in the various aspects of our strategy and reporting year after year (Table 16). Our Report, which also addresses the 10 Principles of the UN Global Compact (Table 19), is prepared “In accordance” with GRI G4 Guidelines and the Financial Services Sector Disclosures, at a "Core" application level, and features a useful guide which can serve as a roadmap to the reader (Tables 17 & 18). In this respect, we are proud to be one of the first institutions in Lebanon to adopt G4 Guidelines and stand by GRI’s vision of responsible management and transparent reporting. It is in this context that the Bank joined GRI as an Organisational Stakeholder (OS) to further assert its commitment to sustainability reporting.

Our Materiality ProcessDrawing on our strong determination to use our industry leadership and deep commitment to the communities in which we operate, we have endeavoured, in 2013, to engage in a diligent exercise to identify the significant impacts that are important to our company, our stakeholders and our society. The content of the Report reflects the aforementioned meticulous materiality exercise and its aspect boundaries.We are confident that our CSR reporting methodology continues to evolve year after year, building on extensive stakeholder consultations and a more thorough consideration of our core activities, hence systematic delineation of core material (priority) aspects for our CSR strategy, based on a better understanding of aspect boundaries, or of where our main impacts are likely to occur.

Building on the first principle of stakeholder inclusiveness, our materiality assessment has formally started with engagement in various rounds of consultations with internal and external stakeholders. Internal stakeholders include employees, Management, and shareholders, while external stakeholders include suppliers, clients, non-governmental

Figure 1 | Our CSR Milestones

2010 2011 2012 2013

Formation of the CSR Unit

Establishment of CSR Committee

Establishment of CSR Policy

Four CSR Pillars

Establishment of CSR Strategy

ISO 26000 Guidance

Five CSR Pillars

GRI G4 Guidelines

Further Institutionalisation of CSR

1110

organisations (NGOs), civil society, the media, BanqueDu Liban (BDL), the Association of Banks in Lebanon (ABL), chambers of commerce, competitors, and the Lebanese government. Internally, we used different channels to engage with our stakeholders, including e-newsletters, surveys, and various forms of customised internal communication, in addition to meetings, workshops, trainings and awareness sessions. Externally, we continue to engage with and communicate with our stakeholders through customised meetings, surveys, roundtables, workshops and conferences, in addition to the Bank’s Annual Report.

Internally, we made sure our stakeholder engagement process focused on employees, Management and shareholders, given the high stakes they have in the Bank. Externally, we leveraged feedback from our customers, the civil society and local community partners, in addition to various external experts considering their grounding and understanding of the realities of the external context. In fact, these two sets of stakeholders are our priority stakeholders across various facets of our banking and CSR activities. As described below, both sets of feedback have allowed us to define our material aspects and boundaries based on the substantive interests and expectations of our key stakeholders.

We started by reviewing various documents (e.g. business strategy documents and CSR Committee minutes). We complemented this effort with a tailored survey which was dispatched to all our employees in September 2013, to tease out material issues and areas of priority involvement from their perspective in relation to CSR. Various material issues were identified based on this survey, including the importance of diversity, inclusion, equal opportunities, as well as talent development and progressive labour relations in a broad sense through systematic attention to training and education, grievance mechanisms and occupational health and safety. Employees also pointed out the importance of nurturing the budding volunteering culture within the Bank. We also consulted with key strategy setting officials and stakeholders at Bank Audi, including the Chairman of the Board of Directors, the Group Chief Executive Officer, the Group Chief Financial Officer and Strategy Director and the General Manager for Lebanon who pointed to the need to continue to give priority attention to extensive due diligence, risk management processes, and core governance foundations based on ethical conduct, integrity and trust. This first round of feedback provided instrumental guidance in the initial phases of our materiality process.

Moreover, we touched basis this year with our various entities, as included in our consolidated Annual Report, Page 175, to harmonise our thinking in relation to our strategy, our materiality process and our envisioned pillars. Even though this entailed a fruitful process of discussion and exchange of ideas, a conscious decision was made to restrict the scope of the current report to the Lebanon entities, while giving room for this discussion with the global entities to progress and mature.

Externally, and in order to respect the principle of stakeholder inclusiveness, we referred to information from a recent customer survey conducted by Bank Audi in August 2013, which helped identify salient issues. While not specifically tailored for CSR, the survey was nevertheless instrumental in validating and confirming important CSR considerations, pertaining primarily to the financial stability and robust economic performance of the Bank. It also highlighted the importance of other considerations related to market presence and the suitability, accessibility, transparency and fair design of products. Last but not least, it shed the light on issues relevant to cost and process efficiency, trust, and data confidentiality. This feedback was crucial in underlining core CSR issues from a customer perspective, one to which the Bank must continue to give all the attention it deserves.

We also touched basis with a core set of civil society and local community partners, who we believe are instrumental in the course of our materiality process since they are more tuned to the needs and realities on the ground. On a parallel note, we conducted various rounds of meetings with various partners namely CCCL, ADR, SESOBEL, AUB, Heartbeat, KidzMondo, Bader Young Entrepreneurs, and the MIT Enterprise Forum. Based on these meetings, we identified a range of material issues from the community perspective, which we need to consider as a priority while defining our CSR strategy and Report content for 2013, including securing health and educational opportunities among the disadvantaged and various segments of vulnerable communities, promoting entrepreneurship and job opportunities, protect the environment and reduce our environmental footprint.

Moreover, we conferred two local social and economic experts who are familiar with the Lebanese context and its various intricacies. Social issues facing Lebanon were delineated accordingly, including a stagnating economy, with public debt to GDP reaching 138% of GDP in 2013, a decline in tourism and foreign investment, and soaring poverty and unemployment. We learned that 28% of the Lebanese population today is considered poor, and that unemployment is projected to reach 20%, while youth and women unemployment is projected to reach highs of 34%. It is worth mentioning that we considered this important feedback and these stark realities as we defined our Report content and aspect boundariesfor 2013.

Beyond identification of core material issues and aspect boundaries, we engaged in a process of prioritisation through which we tried to consolidate and analyse the collected feedback by various rounds of CSR Committee meetings which focused on sorting the key areas for CSR involvement in 2013 by priority. The committee also focused on mapping these issues to the GRI G4 Sustainability Reporting Guidelines. The entire materiality process is depicted in Figure 2. This process has led to the materiality matrix (Figure 3), and from there, to the five pillars that will serve as the basis for reporting for the year 2013. These pillars

were in turn shared with the Bank’s Executive Committee, as well as with Senior Management including the heads of Credit and Commercial Banking, of Risk Management, of Communications and of Human Resources. They were then validated against scope, aspect boundaries and reporting period. With the active involvement of Mr. Marc Audi, Country Manager Lebanon, the CSR Committee finally confirmed that these pillars would serve as the basis for the Generic Disclosures on Management Approach (DMA) of our bank in 2013.

The materiality exercise was instrumental in distilling the views of various stakeholder groups with whom we interact on a regular basis. As illustrated in Figure 3, this exercise has helped us flesh out the main issues that have direct and indirect relevance to our CSR strategy for 2013. This comprehensive and systematic materiality process was also useful in validating that previously identified pillars and issues are still relevant, and to integrate new emerging issues and considerations. The process adopted thus reflects the principles of materiality, stakeholder inclusiveness, sustainability, context and completeness, as clearly outlined in the G4 Guidance. Completeness is demonstrated in the fact that the five CSR pillars identified in light of this materiality exercise are comprehensive in scope and coverage. The CSR priorities are in turn anchored in an

Figure 2 | Main Steps Followed in our Materiality Assessment

1

3

2

4

Internal consultations with key stakeholders

Analysis of our business strategy

Analysis of input from our employees collectedthrough employees' survey data (survey completedin September 2013)

Consultation with Bank Audi key strategy settingrd of

Dir

Director Manager for Lebanon

Internal prioritisation of key issues within the CSRCommittee and in consultation with Bank Audi'sExecutive Committee and Top Management

ronmentalissues and their importanceMapping and reviewing these issues to the

Agr re

External review of salient issues insustainability in the local context

(survey conducted in August 2013)

Meetings and analysis of feedback fromcivil society and local community partners

Touching base with local social and economicrelation to salient issues

Validation of Disclosures on ManagementApproach (DMA) with Senior Management

Consensus and agreement on report contentand aspect boundaries which are captured

report

including heads of Credit and Commercial

and r

analysis of context, and the identification of relevant issues for our institution to address at this particular juncture. Accordingly, the Report also meets the main quality reporting principles identified through the G4 Guidance and pertaining to accuracy, timeliness, comparability, reliability and clarity.

In light of this extensive exercise, the material aspects illustrated in Figure 3 include: due diligence, ethical conduct, transparency, anti-corruption, compliance, risk management, integrity, economic performance, market presence, indirect economic impact, product portfolio, product responsibility, customer satisfaction, humanitarian, social and cultural initiatives, community health, local communities, responsible employment including diversity and equal opportunity, training, education and talent development, external human development, labour practices and grievances, in addition to environmental protection through assessment of our environmental footprint in terms of emissions, effluents and waste, and energy consumption. Given that the materiality process was restricted to the Lebanon Group level, these aspects are relevant for all Lebanese entities and the scope of the Report and aspect boundaries are primarily focused on Bank Audi Group Lebanon (Bank Audi, Bank Audi Investment Bank, Bank Audi Private Bank and A Services) although the Report

1312

Figure 3 | Materiality Matrix and Main Issues of Priority Concern for 2013

Supplier Environmental Assessment

Supplier Assesment for Impacts on Society

Child Labour

ME

DIU

M

LOW

HIG

H

MEDIUM HIGH

Transparency

Risk Management

Anti-corruption

Compliance

Energy Consumption

Responsible Employment

Local Community

Community Health

Humanitarian, Social & Cultural Initiatives

Product Portfolio

Economic Perfomance

Customer Satisfaction

Indirect Economic Impacts

Product Responsibility

Consumer Assessment for Impact on Environment

External Human Development

Training, Education & Talent Development

Integrity

Market Presence

Diversity & Equal Opportunity

Ethical ConductDue Diligence

Labour Practice & GrievancesGreenhouse Gas (GHG) Emissions

Waste

Occupational Health & Safety

HumanDevelopment

EconomicDevelopment

CommunityDevelopment

CorporateGovernance

Environmental

Consumer Assessment for Impacts on Community

Protection

Our UpdatedCSR Strategy for 2013

In light of the diligent materiality exercise described above, we have managed to cluster and identify the following five pillars which form the core of our CSR strategy for 2013. At the heart of all our operations and serving as the foundation for delivering sustainable value to our internal and external stakeholders is sound Corporate Governance (capturing material aspects pertaining to due diligence, ethical conduct, transparency, anti-corruption, risk management, compliance and integrity). Best practice Corporate Governance is what allows us to create a robust, resilient and sustainable business that inspires confidence and trust. This is why we have re-classified Corporate Governance this year as a baseline pillar which, in a way, sets the tone and provides the foundation for all our banking andCSR activities.

The second pillar is the Economic Development pillar which captures material aspects pertaining to economic performance, market presence, indirect economic impact, product portfolio, product responsibility, and customer satisfaction. Given the current stagnation in the Lebanese economy and the realities of poverty and unemployment in the local context, it was deemed important for our bank to continue to play a leading role in supporting the local economy through an array of targeted initiatives intended to stimulate entrepreneurship and to contribute to economic and social revitalisation. These various initiatives will be discussed in greater detail in the coming sections.

The third pillar is the Community Development pillar which captures material aspects pertaining to humanitarian, social and cultural initiatives, community health, and local communities. This constitutes an extension to our community work, particularly in terms of supporting worthy national charities, humanitarian and social programs, and disadvantaged communities including children, the youth and the elderly in vital social areas such as education, health, culture and sports. We acknowledge that the vitality of our business depends on the health of the community around us and we have invested ourselves in a number of initiatives which will be described in the coming sections.

will make limited reference to instances where the identified material aspects are relevant outside the institution and to specific entities, in cases where the information is available.

We will thus focus on the material aspects identified through this diligent materiality exercise considering their importance from a stakeholder perspective and their potential internal and external impacts. As with everything we do, we will endeavour to responsibly manage, measure and assess these material aspects in the context of our overall strategy, while evaluating their respective impacts. We consider this an on-going journey of discovery and continuous improvement whereby we strive for continuous refinement and adjustments year after year. This denotes our Generic

Disclosure on Management Approach (DMA). Given the extensive materiality exercise in which we engaged this year in accordance with G4 Guidelines, and the reorganisation of our CSR strategy into five pillars rather than four, there have been updates of information from the previous 2012 Report. We have also made a number of changes, compared to previous reporting periods, in the Scope and Aspect Boundaries, particularly those corresponding to the Environmental Protection pillar, as well as new aspect boundaries captured under the Economic Development, Community Development and Human Development pillars. As indicated in the next section, all material aspects identified in 2013 are captured under the respective five pillars which form the core of our CSR strategy for 2013.

The fourth pillar is the Human Development pillar which captures material aspects pertaining to responsible employment including diversity and equal opportunity, training, education and talent development, external human development, and labour practices and grievances. This pillar is related to Bank Audi being one of the largest private sector employers in Lebanon and reflects our continuing commitment to human capital, diversity and equal opportunity, talent nurturing and internal and external rewarding. Not only is internal human capital development vital for our ability to compete and differentiate ourselves; it is also important to invest in human capital development more broadly, including skills, knowledge and capacities which can enhance competitiveness at a national level. The Human Development pillar describes how we have sustained our investment in human development activities inside and outside the Bank in 2013.

The final pillar is the Environmental Protection pillar which captures material aspects pertaining to reducing our environmental footprint in terms of emissions, effluents and waste, and energy consumption. We have been sensitised to the importance of the ecosystem around us and have become conscious of the need to take active measures to account for carbon emissions and for our environmental footprint. We realise the importance of operating in an environmentally sensitive and sustainable manner, and that our operations have an environmental impact that should be monitored and minimised. Hence we have adopted active measures this year, and extended our CSR strategy to include a stand-alone Environmental Protection pillarin 2013.

These five pillars, illustrated in Figure 4, will be fleshed out with greater detail in the sections that follow. Taken together, these represent a consolidation of our most significant impacts and of the key concerns and expectations of our stakeholders. They provide the core of Bank Audi’s CSR strategy for 2013, which is closely tied to its core competence as a leading banking institution, and intimately aligned with its specific context. They also provide a platform for sustaining our efforts in CSR, within the scope of a delimited set of core material areas of intervention.

Figure 4 | Bank Audi CSR Pillars for 2013

HumanDevelopment

EconomicDevelopment

CorporateGovernance

CommunityDevelopment

EnvironmentalProtection

1514

68%

CORPORATEGOVERNANCE

ECONOMICDEVELOPMENT

COMMUNITYDEVELOPMENT

HUMANDEVELOPMENT

CSR at a glanceat end 2013

of our total employeeshave been adequately trainedon anti-corruption

2,890 employees 17,000

25,000

ISO 26000

1.7%of the GDP of Lebanon

USD 900,000in economic sponsorships

USD 2.75 million

Total contributions to our community

USD 2.6in employee training

81%of successfully trained employees

million

million

USD 9in educational programs

million

Revised Institutional Bank CreditPolicy & Procedure Manual

Contribute to economicgrowth and revitalisation

Create new jobs andemployment opportunities

Enable small businesses to thrive

Prosper local economies

Initiate volunteer program“Be a Hero for a Day”

Health, humanitarian, social,culture and sports

50 products

73 services

188 ATM

73 branches

Taxes of USD 45 million

ENVIRONMENTALPROTECTION

“Grow Green” initiative

Improve paper recycling by 62%

Introduce paperless banking

Assess carbon footprint

Drop of 4% in GHG emission

Increase environmental loans

research

Strategic partnerships

Training and development

Performance appraisal

Talent management

Diversity and equal opportunity

Educational aid in community

Government capacity building

TransparencyHuman CapitalHeritageQualityCivic RoleInnovationAccountabilityCommitment

USD 200,000in environmental contributions

Figure 5 |

1716

A Partnership Model for CSR

In 2013, we continued to embrace our work within a collaborative mode of engagement. We believe in the power of partnerships and in their effectiveness. Besides the range of trusted partners we have nurtured over time, which includes leading non-profits, foundations, associations, academic institutions, social incubators and various social initiatives in the country to leverage complementary strengths and maximise social value, we have made a special effort this year to reach out to a player that has potential in Lebanon with regard to CSR, namely the Public Sector. We have thus tailored a specific program of collaboration with the public sector, supporting internal talent enhancement. We succeeded in nurturing a range of deep, reliable and long-lasting relationships which will help us optimise our reach and impact, and cater to neglected stakeholders and communities in need. This is anchored in the context of Collaborative Value Creation (CVC) and the acknowledgement that partnerships produce enduring benefits that accrue to organisations, individuals, and society. We intend to continue leveraging the power of networks, partnerships and the coming together of perceptions of value to tackle common socialissues of relevance to our business and our community, which fall within the scope of our strategy. These include Corporate Governance, economic development, community development, human development and environmental protection.

Beyond our local partnerships, we are also keen on engaging with national, regional and international associations. These memberships are considered strategic because they help us define patterns of cooperation and exchange ideas on key banking issues on (Table 1). More specifically, these partnerships reflect our aspiration to be fully integrated within the various markets in which we operate, by offering our bank an opportunity to keep up with the latest trends, knowledge and techniques in the business. We regularly participate in workshops and gatherings organised by these associations, which help us stay tuned to the latest innovations and address relevant challenges and concerns, hence contributing to the improvement of the banking sector as a whole. Most of all, our partnering strategy has allowed us to stay abreast of best practices in the field and to constantly refine our understanding and practice of core banking areas such as governance, control, risk management and others.

Figure 6 | A Partnership Model for CSR

Bader Young Entrepreneurs

AUB

Sidon Orphan Welfare Society

MIT Enterprise

Arc En Ciel

Chronic Care center

Ayadina

USJ

IC

Kunhadi

ArabNet

Bachir Gemayel Foundation

Heartbeat

SESOBEL

Yaduna

Red Cross

LAU

ADR

CCCL

Brave Heart

Skoun

St. Georges Hospital

Table 1 - Bank Audi's Membership in Industry Associations

Membership in Associations

Association des Banques du Liban (ABL) Positions held:1. Committee for Compliance and Fighting Money Laundering:

chaired by Mr. Chahdan Jebeyli – Bank Audi Group Chief Legal & Compliance Officer.

2. Legal Committee: chaired by Dr. Georges Achi – Bank Audi Member of the Board of Directors until retirement (2012).

3. Research Studies Committee: Rapporteur: Dr. Marwan Barakat – Bank Audi Group Chief Economist and Head of Research.

Swiss Business Council – Lebanon

Arab Federation of Exchanges (formerly Union of Arab Exchanges)

World Union of Arab Bankers

Union of Arab Banks

Chamber of Commerce, Industry & Agriculture

International Chamber of Commerce – Lebanon

Union of Arab Stock Exchanges (in 2009)

1918

01CorporateGovernance

2120

Corporate Governance

Annually review the Bank’s CSR policies,programs, activities and performance

Set annual KPIs andoperational targets for CSR

Report on the Bank’s CSRinitiatives on an annual basis

Discuss, design and update theoverall CSR strategy for Bank Audi

Examine the potential of newCSR projects as proposed

Figure 7 | CSR Committee Charter

Bank Audi is one of the largest banks in Lebanon in terms of number of employees and customers, which has led us to realise that we need to contribute to the financial infrastructure necessary to a well functioning society. Our main impacts are through our relationships, products and services. As for issues of sustainability, they are at the heart of our business and closely tied to the Bank’s core operations. We are cognizant that our success depends primarily on the ability to maintain the trust of our stakeholders. This is where our Corporate Governance framework and the checks and balances we have put in place have allowed us to develop a full fledged compliance, control and risk management culture that is crucial for strengthening confidence in the various facets and operations of our bank.

Bank Audi’s Board of Directors plays an active role in keeping abreast of key developments and ensuring sound governance. The Board consists of up to 12 members (currently 10) elected by the General Assembly of shareholders for a term of 3 years. Its responsibility is to ensure strategic direction, management supervision and adequate control of the company, with the ultimate goal of increasing the long-term value of the Bank.

Our Corporate Governance Guidelines are accessible on the Bank’s website at www.banqueaudi.com

Further details of our Governance framework and the composition of the Board of Directors, including recent changes to these, are available in the Bank’s Annual Report, Page 10.

The Corporate Governance framework of Bank Audi also encompasses a number of policies, charters, and terms of reference that shape the conduct of our bank in terms of risk

Through the stewardship of our Board, the various committees we have put in place and the supporting policies and processes, we are confident to deliver the highest levels of quality and accountability to clients, shareholders and stakeholders at large. We expect our executives and employees to act with courageous integrity, to be dependable and reliable, to take the right decisions, and to be responsive to the needs of our customers, employees and communities. Governance is thus the foundation pillar that sets the tone for the quality of our interactions, services and relationships with internal and external stakeholders. Not only was it revalidated as a core CSR pillar in 2013, but it was also reclassified as a bedrock that provides the baseline standards of behaviour across the Bank’s various operating units.

Furthermore, we subscribe to a number of externally developed economic charters and principles which provide helpful guidance across various facets of our banking operations. For instance, our group Anti-Money Laundering & Combating the Financing of Terrorism Policy (AML/CFT)meets the principles and requirements set out in theAML/CFT laws and regulations of the various jurisdictions where the Group operates, which are mandatory at the local level.

supervision, compliance, audit, remuneration, evaluation, succession planning, budgeting and capital management. Particularly noteworthy is our long standing Code of Ethics and Conduct (Appendix 1) which highlights the Bank’s dedication and commitment to the highest ethical standards in business and guides the behaviour of its employees and stakeholders across its subsidiaries, branches and affiliates. Many of the principles embodied in this Code of Ethics and Conduct have been reiterated and captured in the Bank’s CSR Policy that was formally adopted in 2012 (Appendix 2) and outlines a proactive, cooperative and collaborative mode of commitment to integrate social and environmental concerns in business operations and contribute to social well-being. In 2013, we have also formalised the mandate and scope of our CSR Committee through a precise charter illustrated in Figure 7. We have also gone a long way in institutionalising CSR in the Bank’s core operations through our updated tracking sheet, in addition to an obligatory requirement within operating units’ workflow to assess whether a project has a CSR component or not.

We also integrate the recommendations of international industry groups including: The Financial Action Task Force (FATF) – Non-binding/voluntary turns to mandatory when replicated in local laws and regulations.

The European Union (Directives) – Non-binding/voluntary, mandatory for entities established in the European Union. The Basel Committee on Banking Supervision –Non-binding/voluntary. The Egmont Group – Non-binding/voluntary. The Wolfsberg Group – Non-binding/voluntary. The international standards set out by major global correspondent banks and their regulators – Some are mandatory for Bank Audi Group Lebanon as per BDL Circular 126.

Bank Audi also abides by all the Banque Du Liban’s (BDL) Banking Control Commission (BCC) and Capital Market Authority (CMA) regulations, the most important of which include the Authorisation for Lebanese Banks’ and Foreign Banks’ Branches, Corporate Governance, Banking Standards and Ratios, Operations on Financial Instruments and Business Continuity Plan (Table 2).In addition to local regulations, we also abide by the International Accounting Standards and were requested by BDL to comply with Foreign Account Tax Compliance Act (FATCA) requirements.

Table 2 - Regulations to which Bank Audi Group Lebanon Subscribes

Corporate Governance Reserve Requirements Information Technology and security

Compliance function Loans (credit limits, loan classification, related parties' transactions, bad debts and constitution of provisions, properties acquired in settlement of debts)

Electronic Banking

Audit Function Credit transparency Investments

Risk Function Business Continuity Plan Operations on Financial Instruments

Disclosure Scientific, technical and ethical qualifications required for performing certain functions in the banking and financial sectors

International Bank AccountNumber (IBAN)

Capital Adequacy Accounting Standards and Financial statements Off-balance sheet accounts

Related Party Transactions and conflicts of interests

Shareholders' equity (capital, reserves, reserves for general banking risk, other reserves, profit/loss carried forward)

Relationship between banks and financial institutions and their correspondents

Liquidity Banking Standards and Ratio Other regulations governing all areas of Banking Activities

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Corruption risk mitigation falls under the scope of the Compliance department and is controlled through KYC (Know Your Customer) and monitoring processes at Bank Audi Group Lebanon. The Compliance department is responsible for these controls and for raising awareness at employee levels. Risks related to corruption include the risk of kickback and the risk of bad reputation as a result of dealing with corrupt customers. The risk of kickback is the risk that an employee might get some retrocession from a counterparty, usually a borrower. This is a risk that we try to mitigate through the Credit Policy, but that remains nearly impossible to control in terms of following the money trail. The risk of dealing with corrupt customers may cause severe reputational and regulatory liabilities and is monitored under

the risk registry of Compliance and controlled through the KYC monitoring processes. All our contracts communicate and make reference to the anti-money laundering law promulgated by the Lebanese Central Bank. Along the same lines, all transactions are analyzed for risk of corruption. Furthermore, our anti-corruption policies and procedures have been communicated to all our governance body members and employees. It is worth noting that 62% of our governance body members (37 out of 60), 67% of front-line employees (1342 out of 2010), 79% of Middle Management (396 out of 500), and 19% of Senior Management (5 out of 26) have received training on anti-corruption. Hence, 68% of our eligible employees have been adequately trained on anti-corruption.

Table 3 - Total Number and Percentage of Employees who Received Training on Anti-Corruption by Category

Anti-corruptionTraining

Total EmployeesEligible for Training Percentage

Total 1743 2536 68%

Senior Management (Grades 22 and above) 5 26 19%

Middle Management (Grades 17 to 21 Inclusive) 396 500 79%

Employees (below Grade 17) 1342 2010 67%

Organisational Governance from an ISO 26000 Perspective

ISO 26000 has been instrumental in guiding our steps in the field of CSR and Sustainability. From an ISO 26000 perspective, Organisational Governance refers to the systems, structures and processes – whether formal or informal – by which an organisation makes business decisions including decisions pertaining to social and environmental responsibility. We are proud to make systematic progress in the field of governance as per ISO 26000 guidance year after year. In 2013, governance-related regulations and practices continued to evolve with a broadening scope, especially in Lebanon and the other countries of presence of Bank Audi Group. Accordingly, our Board continued to monitor its governance practices against best practice guidelines and applicable regulations. It also successfully carried out and drew actionable conclusions from a formal evaluation of its practices and effectiveness. Changes introduced during 2013 to the Governance framework of our Group include the adoption and/or modification of a number of policies, at both Group and country levels, notably in the areas of compliance, disclosure and social responsibility. The Board and the various committees are meticulous in carrying out their mandate of overseeing the management of the Bank. The Board is thus satisfied that, in 2013, it fully discharged all its responsibilities as mapped in its yearly rolling agenda and acted on the recommendations of its committees which also substantially discharged all of their own responsibilities.

To reiterate our commitment to the precautionary principle, our revised Institutional Bank Credit Policy & Procedure Manual (IB-CPPM) was approved by the Group Executive Committee in 2012. The IB-CPPM provides common credit principles, policies and procedures across the Group to build a strong credit culture. It governs the extension of credit to all clients within the Bank’s Corporate and Commercial Banking activities. In the same spirit, we have updated our Environmental and Social Management System (ESMS) to ensure that we are dedicated to reducing our operational footprint, actively managing environmental and social risks(i.e. responsible financing for client transactions), and promoting environmental business opportunities.

We recognise in this respect that a robust credit process is an important element in our governance framework and one that contributes to our success. One of the key objectives of risk management is to identify, measure and manage risks which have an impact on the Bank’s operations, assets, earnings and capital. To serve our customers and ensure a satisfactory return to the Bank’s ownership, we must balance the risk that we are willing to take with the

objective that we expect to achieve. No amount of interest can compensate for the loss of principle or reputation that is an important asset, the risks of which we consciously manage.

The updated credit risk management framework is based on a number of core principles that define Bank Audi’s credit culture. These principles revolve around one main issue: our overall risk appetite is approved by the Board of Directors in accordance with our capital, funding and earning capacity.

ISO 26000 guidance was also instrumental in revising our Code of Ethics and Conduct in 2012 in order to integrate an explicit statement on human rights, namely: “The Bank endorses and supports internationally recognised principles under the Universal Declaration of Human Rights which promotes a global respect for human rights and fundamental freedoms for all, without distinction of race, national or social origin, colour, gender, language or religion.”

ISO 26000 guidance also largely contributed to the Bank being more explicit about the importance of human rights when dealing with its suppliers. In this respect, we have added the following statement in all requests for quotations within our procurement contracts: “Bank Audi is entitled to favour suppliers who, through their business practices, recognise and abide by the Universal Declaration of Human Rights, are in the process of implementing eco-friendly initiatives with the planet’s best interest in mind, fight corruption and generally aspire to adopt the ISO 26000 Social Responsibility Standard’s Guidelines as part of their business strategy.”

On a parallel note, ISO 26000 guidance was helpful in revising our Health and Safety Action Plan, whereby we included the following KPIs which are currently in full implementation, namely: Emergency kits, emergency evacuation drills, emergency evacuation signs. Food and water checks (contamination risk). Joint Management-Employee Committee proactively overlooking these issues. Clear display areas, training reports and committee minutes of meeting (KPIs).

Last but not least, ISO 26000 guidance was instrumental in the instigation of our Carbon Footprint Measurement process which is reported in detail in the Environmental Protection pillar.

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02EconomicDevelopment

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Economic DevelopmentWe aim to contribute to economic growth and revitalisation by creating new jobs and employment opportunities on the one hand, and enabling small businesses to thrive and our local economies to prosper on the other hand. We acknowledge in this respect that we do not operate in a vacuum and that our success is intricately tied to the health of the economic environment around us. Accordingly, we serve as a powerful economic driver not only through the varied and multiple contributions to employment, taxes and GDP, but also through a range of well selected and tailored initiatives which serve the needs of the Lebanese context.

For example, in 2013, despite an economically challenging context, we managed to sustain positive assets growth at 15.7%, improve our risk coverage, and reinforce our distinguished financial standing across domestic banking entities. Our consolidated assets rose by USD 4.9 billion in 2013 to reach USD 36.2 billion at end-December 2013(of which USD 20.8 billion in Lebanon). This growth in assets was particularly owed to customers’ deposits which grew by 16.0% in 2013, i.e. the equivalent of USD 4.3 billion, moving from USD 26.8 billion at end December 2012to USD 31.1 billion at end-December 2013 (of which USD 19.1 billion in Lebanon).

By end-December 2013, we were able to secure USD 1.07 billion in total operating income, with total operating expenses standing at USD 600 million andour total capitalisation in terms of debts and equity atUSD 3.1 billion.

At a national level, we comply with regulatory tax policies and have paid our dues to the government in the form of taxes: USD 45 million for 2013, in addition toUSD 11.7 million in personal income taxes withheld from employees’ salaries and forwarded to the Ministry of Finance. We generate employment for 2890 employees and contribute to the Lebanese economy through payment of employee salaries (USD 81 million) and social security contributions (USD 13 million). As such, ourtotal contributions have amounted to 1.7 % of Lebanon’s GDP in 2013.

Aside from our core employment, salaries and taxes, we also serve as a powerful economic driver in the local economy through various smaller interventions and targeted programs that help stimulate entrepreneurship and job creation. We are specifically keen on extending a helping hand to small and medium-sized enterprises (SMEs) which constitute a key player in the local economy. SMEs are not only critical backbones of the Lebanese economy, but also a salient stakeholder in our bank since they constitute 60% of the total number of clients and around 13% of the total volume of transactions at end-2013. In this context, we have maintained our support to Kafalat loans which are extended to SMEs operating throughout Lebanon, with innovative start-ups or environmentally efficient initiatives in energy intensive sectors (e.g. industry, agriculture, tourism,

who also exclusively represented Lebanon at the Global Entrepreneurship Summit in Malaysia, encompasses entrepreneurial clinics, providing customised training to entrepreneurs by matching them with relevant experts, bringing together investors, consultants and students, and granting financial awards to the best emerging entrepreneurial projects. In view of the various benefits of the program, the Bank committed to support Bader with USD 200,000 in 2013.

In 2013, we continued to support the Association for the Development of Rural Capacities (ADR), particularly its programs of microfinance loans extended to the underprivileged at significantly reduced interest rates. ADR is a Lebanese non-profit organisation established in 1998. Its mission is to empower and integrate marginalised people through sustainable economic and social development. ADRseeks to improve access to training tools and financial services among these disadvantaged groups, andfacilitate support for income-generating projects. Beneficiaries are fishermen, farmers, small entrepreneurs, women and the youth from the most impoverished areas in Lebanon. In 2013, we supported ADR through contributions which helped over 365 beneficiaries, in addition to granting a credit line charging a very low interest rate to micro credit program. The average loan size through the Audi credit line for ADR beneficiaries was USD 2,175. In terms of loans, we also maintained our support to Maak Microfinance Loans, which helped 170 families across various economic sectors including farming, cattle and agriculture, tailoring, snacks, beauticians, and even school and university scholarships.

In the core economic sphere, our bank offers a diverse range of products and services which are continuously reinvigorated to meet customer needs. These reflect a total number of 98,205,129 transactions, a total of 50 products, and a total of 73 services for 2013.

crafts and technology). Interest rates are subsidised by the Central Bank and thus offer borrowers favourable conditions, with the aim of encouraging investment and production in Lebanon. Beneficiaries of Kafalat loans will accordingly enhance their production by acquiring new or used equipment, renovating or expanding a plant, purchasing raw material to finance their working capital, and cover various construction, marketing, and research and development costs.

Other initiatives that are tailored to support SMEs include the “Grow My Business” competition, launched in collaboration with the Beirut Traders Association and the MIT Enterprise Forum – Pan Arab Region. 2013 was our third year of involvement in the “Grow My Business” initiative which is intended to help a selection of Lebanese SMEs to grow to the next level by presenting their proposals to a jury composed of prominent figures and experts. The selection process went from an initially large pool of applicants to a short list of 25 semi-finalists, then a shorter one of 12 finalist teams with impressive business plans, and to one winning team whose name was announced during a press conference held on October 22, 2013 at Bank Audi Plaza, and who won the equivalent of a USD 33,167 prize to further develop their company, thus reiterating Bank Audi’s commitment to supporting SMEs despite the challenging economic situation in the country.

A similar initiative is our ongoing support to the Bader Young Entrepreneurs program which comprises three key components revolving around education (workshops) for young entrepreneurs, creating networking opportunities, and financing the best entrepreneurial ideas. In 2013, Bader launched its “Startup Cup” in the context of which over 100 applications were received, with 8 ecosystem partners on board and 27 judges selecting the top 3 ideas to grow participating startups into potential investment startups. The program also hosted Global Entrepreneurship Week Lebanon 2013 where 50 entrepreneurship activities were held in November and which gathered 1,300 attendees overall. Another noteworthy program in 2013 was “Coworking 961” which consists in a group of 10 startups attending 20 workshops and a range of events impacting on 400 entrepreneurs. The project resulted in 3 major startup investments that benefited from USD 1.1 million which contributed to their regional expansion. Bader,

In another dimension, we initiated the “Clear All the Way” campaign, an original campaign praising transparency in banking and intended to provide our customers with a series of useful tips in relation to a multitude of products and banking services. Apart from the fact that this campaign promotes transparency, one of Bank Audi’s core values, it is live proof that we also seek to enhance the financial literacy of our customers, of people in general, and of the community as a whole. In fact, it presents an opportunity to improve the sophistication of our customer base, as well as its ability to make use of our products and services and to mitigate critical financial risks. The “Transparency Banking Tips” campaign, which was produced in Arabic to cater to the needs of Lebanese locals, thus alerts customers to key or critical issues they need to be aware of when dealing with banks.

Another example of “educating” customers is the “e-gallery” which informs our cardholders about the newest payment trends and technologies, as well as various “All You Need to Know” initiatives such as “All You Need to Know about PayPass” and “All You Need to Know about chip cards”, which update cardholders on the latest features offered by their cards.

It is worth mentioning that our customers are served by managers who understand their needs. In this respect, we are proud to report an outstanding record: the percentage of Senior Managers and heads of units who are hired from local communities is nearly 100% (Table 4) for BankAudi Group Lebanon. This illustrates our unwavering commitment to the economic development of the communities in which we operate, and proves that the Bank tailors its services to the needs of local communities. Furthermore, 14% of Bank Audi branches (10 branches out of 72) and 15% of Bank Audi Automated Teller Machines “ATMs” (28 out of a total of 188) are located in remote areas.

“Grow my Business” 2013 winners receiving their prize

CurrentAccount

SpringAccount

SavingAccount

OnlinePayment

24/7 Gold& Platinum

Doctors’Loan

Audi CardsOnline

KafalatLoans

ForeignExchange

FiduciaryDeposits

BillE-Pay

PayrollAccount

OrderExecution

HomeLoans E-Gallery Insurance

ProgramsHigh Tech

Loan Advisory

Figure 8 | A Spectrum of Bank Audi's Brands,Products and Services

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Table 4 - Percentage of Senior Management at Significant Locations of Operation for Bank Audi Group Lebanon

Count Senior Management

Count SeniorManagement Hired from Local Communities

% of SeniorManagement Hired from Local Communities

Audi Investment Bank sal 3 3 100.00%

Audi Private Bank sal 9 9 100.00%

Bank Audi sal 51 50 98.04%

Average 99.35%

As for our supply chain, it involves three important players, namely our customers, our suppliers, and multilateral institutions. We recognise that our customers and depositors are the drivers of our business and we go the extra mile to give them priority attention and quality service across all banking transactions. In the case of our suppliers, we have a delicate supply chain process defined by expense managers, procurement channels, and an explicit procurement policy which outlines the rules and regulations that govern the purchasing process. All purchased goods and services should be acquired in a fair, transparent, competitive, timely and efficient manner. To make our commitment to CSR and human rights as explicit as possible, we have recently added the following statement to all supplier requests for quotations within our procurement contracts: “Bank Audi is entitled to favour suppliers who, through their business practices, recognise and abide by the Universal Declaration of Human Rights, are in the process of implementing eco-friendly initiatives with the planet’s best interest in mind, fight corruption and generally aspire to adopt the ISO 26000 Social Responsibility Standard’s Guidelines as part of their business strategy.” More broadly, we maintain good relationships with all suppliers, founded on a monitoring of historical performance, as well as product and service quality. Finally, we engage with several multilateral organisations and international financial institutions which invariably provide important guidance to the Bank and help us secure medium and long-term funding in support of small and medium-sized enterprises (SMEs) which form the backbone of the Lebanese economy. Agreements are in place with the European Investment Bank (Luxembourg), Agence Française de Développement (France), SANAD Fund for MSME (Luxembourg), Arab Trade Financing Program (UAE), and Overseas Private Investment Corporation (US), allowing the Bank to serve more than 100 SMEs for an aggregate amount of aroundUSD 300 million.

Through our various economic reports, we continue to serve as a credible source of economic information at the national and regional levels; for instance, the Lebanon Weekly

Monitor reaches 10,000 readers per issue. Moreover, we are one of the main sponsors of banking conferences in the country, including various banking and youth empowerment events: in May 2013, we gold sponsored Al Iktissad Wal Aamal’s Arab Economic Forum conference which attracted 600 participants from 32 countries. We also extended our support to Al Iktissad Wal Aamal’s Turkish Arab Forum conference in Turkey. Other sponsorships included the Union of Arab Banks’ conferences in Lebanon and in Turkey, Al Bank Wal Mustathmer’s Future Vision conference, the Beirut Arab University Center for Entrepreneurship conference, the Harvard Arab Alumni Association conference, and the conference of the Association of Banks in Lebanon. Other relevant events were our contribution to the Association of Lebanese Industrialists conference on the occasion of the National Day of the Lebanese Industry, the annual reception of the International Finance Conference (IFC) in Dubai, the annual reception of the Lebanese Franchise Association, the General Union for Chambers of Commerce, Industry and Agriculture for Arab Countries conference in Amman, the Arabnet 2013 annual event, in addition to the First Protocol Social and Economic Awards conference and ceremony. All in all, we contributed with over USD 600,000 to these events, all of which have positive spillovers on the Lebanese economy through advancing knowledge and building a more robust financial sector.

All responsible business initiatives implemented under the Economic Development pillar are an integral part of our CSR strategy and constitute an extension of the Bank’s now renowned slogan: “Grow Beyond Your Potential”. In 2013, we initiated various worthwhile initiatives which support entrepreneurship and innovation. We also established a robust partnership program which connects small businesses with entrepreneurial support mechanisms, incubators and accelerators, providing material and intellectual capital, as well as complementary competencies, with a view to cultivating small startups and businesses that help spur economic growth and job creation. Hence, via well selected collaborative programs, we are working, step by step, to positively impact the revival of the Lebanese economy.

Special Feature Story

The Spring Account, launched in 2013, is a current account that meets the needs of the vibrant youth generation between ages 18 and 23. The Spring Account gives young adults the chance to access their money anytime, anywhere, and to get a bundle of benefits, offers and discounts. This is part of a larger effort from Bank Audi to be as inclusive and friendly as possible in its banking services, and to spread a spirit of responsible banking among various segments. By catering to the specific needs of the youth, the Bank hopes to nurture responsible banking, and to develop customer loyalty and long-term relationships with its clients.

The Spring Account has recorded the following important achievements/milestones in 2013:

Current accounts opened for customers between ages 18 and 23 increased by 217% from 2012 to 2013 after the launch of the Spring Account in May 2013 (official launch in October 2013). A Facebook page was opened for the Spring Account and gathered more than 24,000 fans. 85% of “likes” are from people between ages 18 and 23. A website was created for the Spring Account and had more than 4000 registrations in 2013. Bank Audi branches located next to universities were very proactive in terms of attracting Spring Account customers. The top 10 branches in terms of sales are located next to universities. 87% of our Spring Account holders are students. Approximately 60 open door events promoting the Spring Account took place in 8 months. 80 Spring Account ambassadors were recruited between September and December 2013.

Spring Account - The Bank Account for the Youth

Youth financial literacy

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CommunityDevelopment

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JIF 2014 Photo contest by Jad Safi

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Community DevelopmentIn line with our pledge to support economic development and our efforts aiming at promoting healthy ecosystems, we have further developed and extended our Community Development pillar, targeting the areas of health, humanitarian and social support, culture and sports. Besides seeking to make a positive difference in the communities around us through a spectrum of donations and sponsorships, we rely on the valuable volunteering and fundraising efforts of our employees. We also mobilise various types of partnerships to enhance our reach and help build stronger local communities.Our total contributions to the community amounted over USD 2.75 million and are divided as such: USD 520,000 on health, USD 1.7 million on humanitarian and social, and USD 530,000 on culture.

Health

In the domain of health, we continued our long-standing partnership with the Children’s Cancer Center of Lebanon (CCCL) and were keen on supporting its mission of hope and healthy future for children in Lebanon. During 2013, we provided funds to cure almost 3 sick children with the participation of employees and clients through customer surveys and loyalty points.

We also renewed our support to Heartbeat, a humanitarian and charitable organisation with the mission to make surgical technology available to needy children to facilitate the treatment of 25 children with congenital heart problems.

We are also committed to the other partnerships we had initiated in 2012, that had proved to be beneficial

Humanitarian andSocial Initiatives

2013 also saw a renewal of our active engagement towards worthy humanitarian and social initiatives, particularly those with a clear impact on the well-being of the community or of disadvantaged groups in the community. To name a few: Hôpital Tel Chiha, the King Hussein Cancer Foundation, Hôpital St. Joseph, and various smaller community health organisations with generous donations. In 2013, we also gave our support to the Lebanese Red Cross, in addition to employee donations in lieu of Secret Santa gifts, the Amar International Charitable foundation to run a drug awareness session targeting the Bank employees’ teenager children, and Anta Akhi whose mission is to educate teenagers with Down syndrome. We also took part in Cénacle de la Lumière’s special concert to raise awareness on the harms of drug use. Furthermore, our employees participated in a blood donation campaign in 2013, whereby they channelled 62 calls for blood donations to various colleagues andtheir families.

In the same context, we adapted some of our facilities to improve the access of potentially disadvantaged people to our branches: today, our Branch Network Management is in the process of adding ramps to branches and ATMs, following Management’s firm decision to make all new branch ATM machines fully accessible to physically challenged people. In 2012, 5 branches hosting an aggregate 7% of total ATM machines were provided with disability access, and in 2013, 51 branches representing 71% of existing branches were made accessible by ramp, with their ATMs. This will continue to be an important social consideration for our bank going forward given our increasing and unwavering commitment to CSR issues and priorities across our core business operations.

Active steps were also taken to tackle various social issues like women’s and children’s rights, among others. With regard to women’s rights, we participated in the Women’s Challenge Marathon, a national marathon dedicated to women for the benefit of the National Commission for Lebanese Women, a Lebanese foundation seeking to enhance the status of women in society, with particular

to our community in general and to our fellow Lebanese citizens. In this context and like in 2012, we provided full financial support for the treatment of 5 diabetic and thalassemic children at the Chronic Care Center; we funded the Brave Heart Fundraiser events (Brave Heart is a volunteer initiative benefiting children with congenital heart disease and providing assistance to needy families), the Skoun fundraiser gala dinner (Skoun is a Lebanese NGO committed to bringing life, health and hope to drug users and their families through a sustainable treatment model), and SESOBEL, in addition to the Institut de Rééducation Audio-phonétique (IRAP) and Ahlouna through end-of-year gifts that we purchase from these organisations to help support their respective missions.

emphasis on issues related to women qualifications and women rights. We also partnered with Yaduna – Women Heart Heath Center, a non-profit organisation with a mission to empower underprivileged Lebanese and Arab women and improve their living conditions by providing quality services, raising awareness and spreading best practices. We also contributed to International Women’s Day, whereby our Retail department offered a branded photo frame to female customers and colleagues to celebrate Women’s Day.

With regard to children’s rights, we took part in a national workshop on CSR and Child Labour on October 22, 2013, which was organised by the International LabourOrganisation (ILO) in partnership with the American University of Beirut (AUB) and the Association of Lebanese Industrialists (ALI), and during which we were exposed to a variety of programs aiming at helping street children in Lebanon. Bank Audi was selected as a model case for CSR in Lebanon during the workshop. We also reached to our own employees’ children through multiple programs: on Universal Children’s Day in March 2013, we invited them to an exclusive preview at the movie theatre. On a parallel note, 72 Bank Audi employees and their children participated in the “My School Pulse” 5 Km walk to raise funds for this non-profit organisation which seeks to bring school education to hospitals, and attends to the needs of children undergoing treatment for life-threatening illnesses.

Furthermore, the “Donate your Points for a Good Cause” initiative was initiated in 2012 as an extension of the Audi Rewards Program with a view to encouraging Bank Audi cardholders to donate their points to support one of twelve national humanitarian associations such as Skoun, AFDC, Jouzour Loubnan, The Lebanese Red Cross and Balsam. The Kids Rewards Program was also launched in 2013 in order to reach out to our customers’ children. This program, the first of its kind in Lebanon and the Arab world, uses five cartoon characters (Figure 9) to raise children’s awareness on the action of giving and on donations. In this respect, 2013 saw 80,000 subscribers donate a significant amount to the various NGOs affiliated with the Audi Rewards Program.

in 2013

USD 1.7 MILLION to support social and religious organisations

> USD 530,000 to support cultural events

USD 520,000 to support medical causes

71% of existing branches made accessible by ramp

Bank Audi employees running for the Children Cancer Centre of Lebanon

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Figure 9 | Bank Audi's Kids Rewards Program Characters Figure 10 | "Be a Hero for a Day" Volunteering Program Examples

In the realm of children’s development, Bank Audi’s partnership with KidzMondo gave rise to “A Children’s World” in 2013. KidzMondo is a replica of a real city located at the heart of the Beirut Waterfront, where children play the roles of adults in preparation for the real world. Bank Audi implemented a banking branch with the objective of teaching children the importance of working, earning a living and spending wisely, as well as of introducing them to the world of banking including cash outs, deposits, saving money, and using credit cards and ATMs. This is part of a broader sustainability goal for Bank Audi, which consists in increasing financial literacy among various community segments including our current, future and potential customers. Commenting on the new initiative, the General Manager of Bank Audi Lebanon underlined the Bank’s commitment to promote financial literacy and educational opportunities in Lebanon through pioneering initiatives such as KidzMondo.

We also reached out to various local non-governmentalorganisations (NGOs) that support children and theirwell-being, including Tamanna, a non-profit association that grants the wishes of children with critical illnesses; the Phillipe Hatem Foundation whose purpose is to bring happiness to as many children as possible around the world; and Himaya, an NGO with the mission to promote a global protection of innocencein danger.

As for Maxime Chaya, the first Lebanese athlete to climb Mount Everest, Bank Audi’s Corporate Ambassador and a symbol of strength and endurance for our country, he continued to represent the Bank in various events and conferences conducted in schools and universities across the world, delivering motivational speeches to the youth.

Last but not least, we are striving to link our business processes to our community development efforts through our various business units by innovating in a range of programs which support worthy social causes. For instance, our e-Payment Solutions and Card Services department participated in 10 events, helping the collection of donation

funds of over USD 1,000,000 via our GPRS machines deployed at event premises where our employees were representing the Bank and assisting guests with their payments and addressing any inquiry they might have.

Employee Volunteerism

In 2013, we capitalised on our employees’ inherent volunteerism and took a courageous step to initiate and formalise the “Be a Hero for a Day” initiative, a local volunteering program launched in September 2013 in partnership with five NGOs, namely Ayadina, Assabil, CCCL, SOS Villages d’Enfants and ULYP (Unite Lebanon Youth Project). Through the piloting phase of this program and within three months of its inception, we tried to formally extend our tradition of volunteerism and community service, mobilising the involvement of 4 departments and 23 volunteers who contributed with over 120 hours of their time in support of various causes. Roughly speaking, our volunteers contributed to train 15 children in football at Ayadina, to storytelling and supporting library services for children at Assabil, and to providing soft training and presentation skills for the youth at ULYP. These experiences were equally rewarding toboth our employees and beneficiaries, which encouraged us to formally institutionalise and scale this volunteering program in 2014.

Bank Audi branch at KidzMondo to enhance children's financial literacy

In 2013, we also sustained our pledge to the UN Decade of Action for Road Safety, in partnership with Kunhadi, an NGO which seeks to educate the new generation on road safety. This partnership was intended to amplify the number of community pledges in the context of the “Conscientious Driver” campaign, a number which exceeded 8500 since inception. In parallel, support was maintained to various national foundations including the May Chidiac Foundation which is dedicated to research and education on media, press, democracy, and social welfare issues, and the Samir Kassir Foundation which brings together journalists and intellectuals with a passion for reviving Arab culture and protecting freedom of expression.

| 2 hours of football training every Saturday for 15 children

| IT consultations

| Audi Saturdays: Cartoon training - Storytelling - Painting - Handicraft - Cooking

| Opening the library every first Sunday of the month

| Establishing a Film Club

| Storytelling and various activities for children

| Soft training and presentations attended by 25 young participantsfor 4 consecutive Saturdays

| Entertaining in-patients: Handicraft - Show - Magician

| Board games afternoon

Ayadina

Assabil

ULYP

CCCL

SOS

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Culture

In the cultural realm, we sponsored several several key cultural initiatives including the Beiteddine Festival, Byblos Festival, Baalbeck Festival, Al Bustan Festival, Zouk Mikhael Festival, Jounieh Festival, and Batroun International Festival, in addition to various smaller events and local festivals like the Faqra Club Street Circus and Exhibition, and the Antelias Book Festival. 2013 also witnessed the annual “Prix Phénix de la Littérature” – an annual tradition

SportsAt Bank Audi, we regard sports as a crucial complement of a healthy lifestyle and a healthy community. We therefore continued supporting athletes in their passionate drive, particularly those whose potential allows them to represent Lebanon at the international level. In 2013, we extended our support to the Beirut Marathon Association for the Beirut International Marathon to “Tourisme et Sports d’Hiver Mzaar” for the Mzaar Summer Festival, and to the Lebanese Ski Federation.

As a leading player in the country’s economy, we are fully committed to promoting the wellbeing of the communities we serve. This is grounded in a holistic understanding of CSR where the social bottom line and community wellbeing are central considerations. As shown in Figure 11, our community development initiatives spread across the entire social landscape and aim at building stronger and more resilient communities. In 2013, we continued to deploy a balanced portfolio of community investment projects attending to health, social and humanitarian issues in such a way as to craft a buffer of social and coping skills while preserving heritage and culture. As illustrated, those projects cover all regions and are deployed in collaboration with trusted local partners to ensure effectiveness and reach the most vulnerable and disadvantaged community groups. In this respect, we are fully cognisant that the long-term success of our business depends on proactive community engagement and on building a sound and healthy social and cultural context around us.

consisting in rewarding francophone literature – which was awarded to writer Wajdi Mouawad for his latest novel, “Anima”. The year was also marked by the “One Blood” exhibition held at the UNESCO Palace and Zaitunay Bay after Perpignan (France), and intended to show “unity in diversity” through the art of photography focusing on blood. Total contributions to cultural happenings exceededUSD 500,000 in 2013, benefiting over 300,000 beneficiaries.

Figure 11 | A Spectrum of Community Development Initiatives

Culture

Festivals

ExhibitionsArt

Music

Humanitarian/Social

Human rights

Social aid

Social causes

Health

Sponso

rship

s of m

edica

l org

anisa

tions

Donat

ions f

or p

atien

t tre

atm

ent

Fund

raise

rs

Bank

Audi’s

Comm

unity

Develo

pmen

t

Cultural Festivals Sponsored by Bank Audi

Special Feature Story

Salma writes a letter to her deceased husband, Maher, a Martyr from the Lebanese Red Cross

My dearest Maher,

It has been eight years since your tragic accident. A day so vivid in my memory that my heart still strikes out every time I recall the incident and the fear that struck me the moment I realised the responsibility that befell on my shoulders: raising two little children on my own: Kareem and Malek who had a long road ahead of them.Little did I know that I was not alone in this journey and that a guardian angel was watching over the family. Two days after you were abruptly taken away from us, I received a call from a representative from Bank Audi asking to visit me for condolences.

During his visit, he expressed his concern for our children’s future; that was visible from his tone and questions. He inquired about their plans and aspirations. I answered with deep remorse, thinking that my children’s dreams had evaporated into thin air… Malek wants to become an engineer and Kareem aspires to join the army. To my surprise, towards the end of his visit, the representative conveyed Bank Audi’s offer to cover all of Kareem and Malek’ educational expenses.

Bank Audi granted our children full scholarships, along with a savings account that will mature by the time they reach college. The latter was a generous donation from Bank Audi, one of many that are offered to our community, instilling hope in the youth and providing them with the means to fulfil their dreams.

God has rewarded you for all the good that you have done for this country, for your passion and for your commitment, by unexpectedly blessing your family with a guardian angel that has been a strong pillar and sounding board in a difficult journey, providing both financial and spiritual support.

I am very grateful for Bank Audi and the support it has given us, and I owe my children’s success to the Bank’s benevolence and spirit of parenthood. Without them, I would not have seen my Malek be the successful engineer he is today, or my patriotic Kareem reside in the arms of his country’s army.

I know you are watching over us and safe guarding our lives with your tranquil smile.

May your soul rest in peace.

We will miss you forever,

Salma

Bank Audi Covers the Education of Red Cross Martyrs’ Children

3938

04HumanDevelopment

4140

Training and Development

We acknowledge and comprehend the importance of employee development as a vital component of our institution’s efforts to improve quality, retain talent, meet external environmental pressures relating to competition and constant change, and incorporate key advancements in technologies and work design. Accordingly, we have developed a three-tiered approach to employee development founded on training and development, continuous assessment, and coaching and mentoring(Figure 12).

Our starting point always revolves around the assumption that our employees constitute our strongest asset and hence, that employee learning and development are important priorities. In 2013, we invested around USD 2.6 million in employee training: more than 79,000 training man hours were deployed, covering a bulk of 2080 employees, almost equally split in terms of gender representation and targeting all levels of employment. Average training hours for both genders are 4.78 hours per year; average training hours per annum are 9 for Senior Managers, 4 for Middle Managers, and 4 for frontline employees.

Human Development

2012Bank Audi employees trained

2013Bank Audi employees trained

80%

81%Figure 12 | A Rounded Employee Development Process

in trainingUSD 1.2 MILLIONin 2012

in trainingUSD 2.6 MILLIONin 2013

We recognise the importance of developing human capital and cultivating talent development. In line with our 2012 strategy to be a leader in human development, we have propelled this pillar forward in 2013 to further embrace various elements of human development at the internal and external levels. Internally, we are keen to develop our human capital, considered as our most vital asset, and to invest in our employees’ well-being and skill development within a culture of continuous motivation and empowerment. Externally, we are major supporters of youth education and empowerment, and a strong believer in the promise of the youth who constitute the most important raw material for future leadership, entrepreneurship and innovation.

Implemented learning programs aim at assisting employees in upgrading their competencies and abilities in areas related to technical skills (such as banking, finance and economy, human resources, information technology, languages, legal, regulations, AML & fraud, retail and riskmanagement, as well as languages) and to soft skills (such as managerial and organisational behaviour, leadership, negotiation and conflict resolution, communication, teamwork, employee wellness, cultural development, and general management). Furthermore, we provide transition assistance programs in order to facilitate continuedemployability and the management of career endings due to retirement or termination of employment, such as the Management Development Program, Advanced Management Program, and Special Development Programs which are restricted to specific positions.

These trainings have led to a ratio of successfullytrained employees to total employees of around 81%. Inthis respect, we have developed a portfolio of in-house training schemes including the “Bank Audi Corporate Academy” which aims at nurturing skills and talent and creating a culture of performance and continuous improvement.

It is important to note that all training decisions are made based on in-depth training needs assessment at multiple levels, including the needs of the organisation, the needs required by job descriptions, and individual level needs. Accordingly, in 2013, training activities and programs were based on our annual strategic plan drawing on our mission and vision: departmental needs based on meetings with line managers and their recommendations, and individual competency-based training needs identified and compiled throughout the annual performance management process. A comprehensive assessment phase follows the training stage in order to adequately measure the results of training programs. For technical trainings, our Training and Development department runs post-course tests to ensure knowledge transfer; for soft skill trainings, feedback is collected through evaluation reports and continuous follow-up.

Performance Appraisal/ManagementAssessment constitutes another important facet of employee development at Bank Audi. Employee assessment revolves around providing feedback to employees about their communication style, skills, behaviour and performance. Our performance appraisal process is therefore developmental in content and approach. It is less intended to pass judgment and more focused on nurturing talent and potential while identifying areas for growth. The performance appraisal tools we have adapted include a description of key job responsibilities, the identification of smart business goals for the past period, and the assessment and nurturing of key competencies revolving around customer focus, communicating with impact, adaptability, self-development, teamwork and risk awareness. They also include a section identifying training and development needs, as well as goals and objectives for the coming period. This performance appraisal process applies to all Bank Audi Group Lebanon’s employees, staff, Middle Managers and Top Managers who have a yearly performance and career development review. In addition, our employees are encouraged to file complaints related to any sort of work situation that causes distress, among which concerns regarding work, working conditions and relationships with colleagues. The latter is founded on the Grievance Procedure which is at the core of the Bank’s Employee Handbook.

Talent ManagementTo nurture a pipeline of future talent, we have also established the Talent Assessment Center (TAC) in 2013. The TAC is an advanced assessment methodology that seeks to select qualified candidates based on performance inputs from multiple exercises and assessors. For example, in 2013, five TAC employees enrolled in a three-year developmental program providing them with a full scope banking experience and challenging assignments. In making this selection, we take into consideration the individual’s experience and the skills required for the various jobs within our institution. We also acknowledge that employee interactions with more experienced organisation members can significantly develop their skills and knowledge about the Bank and its operations. Accordingly, we attach great importance to mentoring and coaching processes, and to leveraging those successfully in developing our employees.

4342

Bank Audi employees benefiting from various sponsorship grants

employees certified in”Lebanese Financial Regulations”

in 2013

66

477

Figure 13 | Bank Audi's Employee Sponsorship Grants

In 2013, 66 employees were granted scholarships to pursue their education

14 granted sponsorships for higher education in local universities.

5 integrated international universities such asIE and HEC Paris, and got various degrees:Masters in Computer Business, MBA, EMBA, Executive Masters in Financial Management and Masters in Strategic Marketing.

9 were selected to enroll in banking-related studies, specialised banking studies and advanced banking studies.

36 applications were approved for specialised certifications: Diploma in International Financial Reporting, Certified Management Accountant, Foundational Financial Accounting Certificate, Certified Public Accountant, Certified Financial Accountant, Professional in Human Resources, Human Resources Business Partner, Certified Internal Audit, SAS Predictive Modeler.

2 completed their Executive Education programs at INSEAD (Management Acceleration Program) and Harvard Business School (General Management Program).

femaleemployees

maleemployees

in 2012

45%55%

femaleemployees

maleemployees

in 2013

46%54%

Another core component of employee development efforts is revealed through our support to our staff’s attainment of higher education. In 2013, we invested aroundUSD 500,000 in supporting the development of ouremployees including advanced university courses, specialised banking studies and certifications, and executive education. We are very much aware that developing employees will reflect positively on their motivation and performance, particularly when these employees apply what they have learned in their current jobs. In 2013, 66 employees benefited from the Bank’s sponsorship grants and 477 employees became certified in “Lebanese Financial Regulations”.

Diversity and Equal Opportunity

We also strive to ensure diversity and inclusion in all aspects of our employment. The composition of our workforce with respect to gender, for example, has slightly improved from 45% females vs. 55% male employees in 2012 to 46% female vs. 54% male employees in Bank Audi Group Lebanon in 2013 (1,326 female employees and 1,564 male employees across Bank Audi Lebanon). Furthermore, looking at age groups across different managerial levels, we notice that Senior Management positions are mostly occupied by older employees who have more seniority, experience, and tenure withinthe Bank.

Bank Audi GroupLebanon

Bank Audi sal

Audi Investment Bank sal

Audi Private Bank sal

A Services

% of Staff(below Grade 17)

% of Middle Managers (Grade 17 to 21 Inclusive)

% of Top Managers(Grade 22 and above)

Females

40.06 7.86 0.1240.26 10.84 0.86

47.37 15.79 10.52

11.39 16.46 2.53

76.88 0 0

26.32 0 0

24.05 45.57 0

23.12 0 0

Females FemalesMales Males Males

Table 5 - Employee Composition by Gender and Employee Category at Bank Audi Group Lebanon

Table 6 - Employee Composition by Age Group and Employee Category at Bank Audi Group Lebanon

We strive to maintain a reasonable balance with respect to the gender composition of our workforce and gender representation at multiple levels. Our commitment to ensure good gender representation in upper Management echelons is also unwavering, with women currently occupying 43% of the managerial positions available at the Bank. Thus we strive to enhance women empowerment and helping women break the glass ceiling and reaching the highest organisational levels. We realise the importance of diversity in the Bank’s day-to-day operations and in the context of its long-term strategy, and we are keen on nurturing a culture of equal opportunities in all employment aspects. By supporting diversity and inclusion, we also show our commitment to human capital in its various guises, one where employees are valued and appreciated irrespective of gender, religion, and marital/family status, thereby cultivating a healthy work environment. While we systematically try to address any barriers to female advancement, the representation of women in upper

echelons of the Bank and in key committees remains on the low side (Tables 5 & 7). We will continue to make every effort to alleviate the glass ceiling in all its aspects as part of our commitment to diversity, inclusion and equal opportunity.

Bank Audi GroupLebanon

Bank Audi sal

Audi Investment Bank sal

Audi Private Bank sal

A Services

25.49 0.16 0

26.32 0 0

19.00 3.80 0

21.32 0 0

41.08 13.83 0.29

36.84 5.26 5.26

16.46 37.97 1.26

48.95 0 0

13.75 4.71 0.69

10.53 10.53 5.26

0 20.25 1.26

29.73 0 0

<30 <30 <30>50 >50 >5030-50 30-50 30-50

% of Staff(below Grade 17)

% of Middle Managers (Grade 17 to 21 Inclusive)

% of Top Managers(Grade 22 and above)

4544

Table 7 - Governance Body Composition by Gender and Age Group at Bank Audi

Table 8 - Employee Distribution by Contract Type and Gender at Bank Audi Group Lebanon

Group Audi Lebanon

Bank Audi Group Lebanon

Unlimited employment contract (CDI)Limited employment contract (CDD)

Total Number of Employees

Gender Collective Agreement

Contract

CDD CDI

M M M Covered

1564 1326 38 1520 1288 97% 3%442890

F F F Not Covered

% %

Looking closer into the type of employment contracts signed by our employees, we notice that 1,288 females and 1,520 males were granted an unlimited employment contract (CDI), that 38 females and 44 males were granted a limited employment contract (CDD) (Table 8), and that more than 97% of employees are covered by collective agreements. Furthermore, Table 9 shows that the total number of new employee hires (194) at Bank Audi during 2013 was almost equally split between females and males.

BOD and Committees

Board of Directors -Total of 10 members

Board Group Risk Committee -Total of 3 members

Group Audit Committee -Total of 3 members

Corporate Governance andRemuneration Committee -Total of 3 members

Group Executive Committee -Total of 4 members

Gender (%) Age (%)

Males

80

100

66.7

100

100

0

0

0

0

0

20

0

33.3

0

0

0

0

0

0

0

100

100

100

100

100

<30Females 30-50 >50

Women occupy managerial positions at the Bank

Increase in employment

43%4.85%

in 2013

Table 9 - New Employee Hires in Bank Audi Group Lebanon

Human Resources Planning (HRP) is also a main driver for our functional HR activities. Accordingly, we engage in appropriate aggregate planning of employees’ supply and demand, and in succession planning which stems out of the HRP cycle and serves as a buffer to changing external and internal requirements. For example, employment has increased by 4.85% since 2012. In 2013, we also explored various new successful recruitment channels, including an on-line application system, to ensure that we are attracting the right talents at the right time, to serve the needs of our institution and clients. We also made sure to be present in job fairs hosted in various universities across Lebanon such as the American University of Beirut (AUB), the Lebanese American University (LAU), the University of Balamand, Université Saint Joseph (USJ), and the Holy Spirit University of Kaslik (USEK), among others. Furthermore, we offered Internships to university students, amounting to over USD 90,000, and catered to 460 intern requests which, in turn, feeds into our HRP cycle by helping us spot the most outstanding interns as potential future recruits.

Compensation and BenefitsAs far as employee compensation and benefits are concerned, we make it a point to be an employer of choice who offers both attractive career opportunities and fair and competitive pay rates. Salaries and benefits constitute our highest HR costs, exceeding USD 220 million in 2013 (around USD 81 million in salaries alone). We offer our employees generous pay schemes which are complemented by various significant advantages. In Bank Audi Group Lebanon, benefits include: performance bonuses, sales commissions, stock options plans, medical insurance, life insurance, scholarship insurance, work accident insurance, auto insurance, transportation allowances, family allowances, marriage allowances, child birth allowances, children education allowances, death allowances, representation allowances, food allowances, mobile allowances, as well as an infirmary and a gymnasium. In 2013, we invested more thanUSD 4 million in the tuition fees of 861 employees’ children (around USD 2500/child); we awarded 14 high achieving employees’ children with cash rewards and other prizes totalling USD 81,000 for their outstanding GPA achievement in school. These initiatives are part of our Pro-Family program which we bolstered in 2013 and which illustrates our commitment to invest in the leaders of tomorrow and in the gifted children of our owntalent pool.

Group Audi Lebanon

Bank Audi sal

Audi Investment Bank sal

Audi Private Bank sal

A Services

Total

Percentage

Gender (%)Total Number of New Hires

Age (%)

Males

79

0

5

5

89

46%

154

1

10

29

194

113

0

3

16

132

68.0%

75

1

5

24

105

54%

41

1

4

12

58

29.9%

0

0

3

1

4

2.1%

<30Females 30-50 >50

4746

As a result of our diligent efforts towards maintaining a healthy human capital management strategy, we have successfully maintained human capital turnover rate of only 3.87% in 2013 in Bank Audi Group Lebanon (as compared to 4.22% in 2012). Looking closer, we also note that the turnover rate of females (1.43%) is less than that of males (2.37%) in Bank Audi Group Lebanon, and that the age segment that witnesses the highest turnover is the one between 30 and 50 years of age (2.12%).

As illustrated in Figure 14, in terms of tenure, 62% of the Bank’s employees have a tenure of less than 10 years, and 38% of our employees have a tenure of more than 10 years, with many of them working at the Bank for 15, 20, 30 and 40 years. Thus we are doing reasonably well in terms of retaining our most valuable employees and maintaining a healthy mix of talent and a good balance between new and old blood, and fresh and veteran perspectives.

human capital turnover rate

in 2013

3.87%human capital turnover rate

4.22%in 2012

Pro-Family educational program awardees

Bank Audi employees aided with their children’s school tuition fees

for a total of

Salaries and benefits constitute our highest HR costs, exceeding

in 2013

861 USD 4 MILLION USD 220 MILLION Distribution of Tenure at Bank Audi

Rewards System

We are equally sensitive to the importance of rewarding our employees for their hard work, commitment and loyalty. On June 17, 2013, we rewarded 41 of our employees for their 25 years of service at the Bank and showed appreciation of their loyalty during the Silver Jubilee celebration held at Bank Audi Plaza. We are also keen on recognizing our top performers and best employees on a quarterly basis. In 2013, 11 employees from various branches of the Bank were elected “Top Performers in Productivity” and “Best Performers in Quality of Service” for their remarkable achievements during the fourth quarter of the year. In a similar process, the Quality Program recognises the “Best Performer” on a monthly, quarterly and annual basis. In addition, the Bank is always as generous in its end of year gifts and distributed 3,158 5g gold units to all its employees (the equivalent of USD 700,000) at end 2013. We also consider our employees as priority beneficiaries whenever

an opportunity arises. This is the case in our agricultural empowerment, whereby we purchased 2,922 10-liter gallonsof olive oil and 2,900 boxes of apples for a total ofUSD 224,000, which were distributed to employees in 2013.

At Bank Audi, we care that our employees take the time to nurture their newborns and fulfil their roles as parents in the best possible way. On that basis, we encourage all our employees to take their parental leaves and urge them to return back to work refreshed to pursue their career paths. Looking at Tables 10 and 11, we notice that out of the 104 females who took a parental leave, 98 returned back to work, which means a return to work rate of 94%, and that 97 of them are still employed 12 months after. The latter translates into an impressive post parental leave retention rate of 99%.

Figure 14 | Employee Tenure at Bank Audi Group Lebanon

0 1-5 6-10 11-15

40

35

30

25

20

15

10

5

0

34

21.5

12.9

21

11

8.7

5.54.9

6.6

3

8

65 5

3

10.3 0.2 00 0

16-20 21-25 26-30 31-35 36-40 41-45 46-50 51-55

Per

cen

t

Tenure (Years)

35.4

1

2013

2012

7

4948

Bank Audi GroupLebanon

Return to Work Rate

Retention Rate

Females

94% 100%

97%99%

Males

Bank Audi GroupLebanon

Bank Audi sal

Audi Investment Bank sal

Audi Private Bank sal

A Services

Total

Total Number ofEmployees who Took Parental Leave

Total Number ofEmployees whoReturned to Work after Parental Leave Ended

Total Number ofEmployees who Returned to Work after Parental Leave Ended and Are still Employed 12 Months after Their Return

Females

104

96 90 8988 88 86

1 1 1

1 1 1

5 5 4

2 2 2

4 4 4

2 2 2

Females

98

Females

97

Males

95

Males

95

Males

92

Table 11 - Retention Rates after Parental Leave by Gender in Bank Audi Group Lebanon

Occupational Health and SafetyWe are aware of the importance of safeguarding our employees’ safety. In 2013, Bank Audi’s Corporate Information Security & Business Continuity (CISBC) team established an informal safety committee and appointed “safety marshals” who are in the process of being trained on safety rules and procedures. We hope to institutionalise this committee by 2014. Furthermore, the Bank is eager to take and implement severe precautionary measures in response to vibration, fire, hold-up or intrusion situations. These policies, which serve against the threats and violence the Bank may be subject to, establish specific coping measures and detection systems to attend to any ofthe above-mentioned situations.

In a nutshell, we have placed human development at the heart of our CSR Strategy, confirming our commitment to diversity and inclusion, to human capital development, and to progressive employment strategies. Our continuous investment in internal talent development, through effective recruitment, selection, training and development, diversity and inclusion, compensation and benefits, and health and safety measures, has allowed us to foster a culture of high performance and continuous learning, one which differentiates our bank and helps it stay ahead of the league. This has contributed to develop a strong employer brand which attracts talent, retains employees and customers, and ultimately gives our bank a competitive edge withinthe industry.

Table 10 - Return to Work Rates after Parental Leave by Gender in Bank Audi Group Lebanon

Educational Aid in CommunityExternally, we are dedicated to invest in selective human development efforts, particularly in support of the Lebanese youth: we provide educational aid to various schools and universities across Lebanon, among which are university scholarship endowment funds amounting to over USD 480,000 to AUB, LAU and USJ. Key educational institutions also benefited from generous scholarships and donations in 2013,including La Sagesse schools (through the “Mérite Blé Vert” initiative) and Irfan School, in the form of scholarships to needy students which totalled over USD 367,000 and represented the partial or full tuition of over 300 students.

It is important to note that our doors are always open to students who want to learn more about the banking industry. In 2013, students from Azm School (Tripoli), Collège des Saints Cœurs, Sœurs de la Charité and Lycée Pilote visited our Hadath branch, and 200 students from Deutsche Schule Beirut visited our Khaldeh branch. In the same context, we always volunteer to assist in presentations and events conducted at schools and universities, which help expose students to the banking industry and expand their horizons in terms of career opportunities. Our Group e-Payment Solutions and Card Services department, for instance, made several presentations at the American University of Science and Technology (AUST).

On another note, our Corporate Social Responsibility (CSR) has built its own reputation whereby the spillover effect has been recognised as a case study within various organisations such as Notre-Dame University (within business ethics courses); at special workshops with the International Labour Organisation (ILO), in collaboration with the American University of Beirut; with the developing government of Kurdistan, its members of parliament, and other private businesses.

Capacity BuildingExternally, an additional unique human development program initiated in 2013 is the Public Sector’s Capacity Building Program which makes various training and skill building modules available to public sector’s employees, to help in sharing knowledge and nurturing public service efficiency and productivity. Inspired by JFK’s famous quote “Ask not what your country can do for you but what you can do for your country” and engineered by the head of Human Resources, the Capacity Building Program, which regularly offers Bank Audi employees in-house training courses on behavioural and soft skills, expanded to include public sector employees. Training sessions include seminars on communication, leadership, negotiation and conflict resolution skills which lie at the heart of effective public service. The purpose of this program is to forge ties with governmental stakeholders, to communicate on the importance of CSR, and to help provide value addition to public sector employees in their endeavors to improve delivery and performance.

in scholarship endowment funds and sponsorships to universities and schools

Approximatelyin 2013

USD 1 MILLION

Objectives TacticsStrategy Outcome

Enhance the effectiveness, efficiency, and productivity of public servants/officials in Lebanon.

Behavioural and soft skill training conducted in collaboration with Bank Audi’s Training department.

Capacity Building Program for Lebanese government and public service officials.

Public sector officials receive certificates.

Increasingly effective public sector management.

Motivation and empowerment amongst public sector employees.

Improve the quality of government services.

Training sessions include seminars on behavioural communication, leadership and negotiation, conflict resolution skills, Microsoft Office and English language.

Figure 15 | Government Capacity Building Program at Bank Audi

We are thus fully committed to promoting human development in its various guises both inside and outside the Bank. Human capital in its various forms is a material concern for our institution and is incorporated within its long-term organisational strategy. Our human development efforts empower individuals by providing them with the tools they need to develop their skills, competencies, leadership

and potential, and to ultimately make their way to rewarding career paths. By building a strong foundation for human capital in Lebanon, we are catering not only to our own developmental needs, but also to those of the country as a whole. Our dedication to people is strong and unwavering and intended to spur individual growth, business success and broader value for society.

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Special Feature StoryToastmasters Club at Bank AudiThe First Corporate Toastmasters Club in Lebanon

Following the Community, Sports, Music, Green, and Travel Clubs, Bank Audi has expanded its employee involvement in CSR through its newest employee club which was launched at the heart of the Bank in 2013: the Bank Audi Toastmasters Club.

Toastmasters International is a non-profit educational organisation that teaches public speaking and leadership skills through a worldwide network of meeting locations. It has a wide network of 14,350 clubs in 122 countries. Through a series of sessions conducted to improve the communication skills of its employees, Bank Audi pledged to enrich the skills of its staff and allow them to grow beyond their potential.

This newest Bank Audi club builds on the acknowledgment that communication skills are vital for career success in any professional setting. In a recent Harvard Business Review

survey, respondents rated the ability to communicate as the most important factor in making an executive promotable, even more important than ambition, education and capacity for hard work. Communication skills are also consistently ranked as crucial for managerial success and advancement, with the average business executive spending 75 to 90 percent of his/her time communicating.

The Bank Audi Toastmasters Club is intended to cultivate communication skills, which we believe are crucial for conveying ideas, working in teams, developing good relationships at work, serving customers, interviewing, listening, conducting successful meetings, accepting diversity, negotiating or mitigating conflicts, and applying effective management and leadership in the broadest sense. We hope that our employees take advantage of this latest offering to become more competitive and productive.

Toastmasters International recognising Bank Audi'sToastmasters Corporate Club as the first club in Lebanon

5352

05EnvironmentalProtection

5554

Environmental ProtectionOur commitment to safeguard the environment and minimise the negative impact of our activities on the environment sprouted in 2012 and was incorporated within the Community Development pillar in our 2012 CSR Report. We are now proud to say that our environmental protection pledge has blossomed into a stand-alone material pillar. Because we are cognisant of the importance of the environment for current and future generations, we have boosted our involvement in various aspects of internal and external environmental protection in 2013. These will be fleshed out in detail in the sections that follow.

Solid WasteWe are sensitive to the need to promote environmental protection within the Bank and to engage our stakeholders in the process. This is why we enhanced the “Grow Green” initiative, a venture aimed at collecting recyclables of solid waste such as used paper, metal, batteries and plastic waste, at the Bank’s 3 special hubs, as well as e-waste. Collected plastic bottle caps are donated to Arc En Ciel, a renowned Lebanesenon-profit organisation which seeks to create sustainable development by supporting fragile communities and integrating marginalised individuals. Arc En Ciel’s program

is dedicated to collecting plastic bottle caps, selling them at around USD 200 per ton and using the proceeds to build wheelchairs for the disabled. We also kept tracking the impact of our “Grow Green” program, saving the equivalent of 1,414 trees by third-party pulp paper recycling, and 130 Kg of plastic bottle caps used for building wheel chairs’ tires. It is worth mentioning that between 2012 and 2013, we improved our paper recycling by 62%. As of September 2013, further steps were taken to progressively convert to paperless banking throughout all our branches.

Internally, we made sure to spread awareness about the importance of environmental protection through our internal communication. In October 2013, we circulated tips to all our employees on how to increase theirenergy efficiency. These environmental guidelines sought to promote employees’ personal liability and involvement in environmental protection by being more responsible in their energy usage. We also proved our commitment to energy saving on March 23, 2013 by switching off all lights in our headquarters building for one hour in celebration ofEarth Hour.

In an effort to reduce our environmental footprint, we engaged in a milestone project to quantify and comprehend the nature and breakdown of our energy consumption and Greenhouse Gas (GHG) emissions (in CO2e) particularlyhose resulting from regular daily operations such as power

consumption (electricity purchased and generated), travel (land and flight), refrigerants and paper consumption in all Bank Audi subsidiaries in Lebanon for the year 2013. Hence, we solicited a specialised company that provides tools certified to be in conformance with GHG Protocol to conduct a comprehensive audit of our carbon footprint and help us monitor and communicate useful information to our different branches and offices. Total expenditure on this investment amounted toUSD 10,750. The study considered 2012 as a base year, i.e. the year this initiative was launched and opted to comply with the G4 Guidelines on environmental impact. Data on the area occupied by Bank Audi in Lebanon, as well as on the number of employees in each branch, was taken into account. Organisational boundaries were set by the Bank to reflect the equity share principle and to be used for operational management improvements.

GHG Emissions

Probing into our GHG emissions revealed a significant improvement trend as compared to 2012. As per our GHG inventory based on the GHG-Protocol Corporate Standard, we reported on the following seven greenhouse gases: carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulphur hexafluoride (SF6), and nitrogen trifluoride (NF3).

Results revealed that GHGs are emitted from several sources grouped into Scope 1- Own generation of power and refrigerants; Scope 2- From purchase of electricity from Electricité Du Liban (EDL) and shared generators, and from selected indirect emission sources; and Scope 3 - From paper consumption, flights undertaken for work reasons and courier services. The total GHG emissions from the Bank Audi Group Lebanon in 2013 amounted to 21,309.9 tCO2e, equivalent to 7.68 tCO2e per employee and 0.220 tCO2e per square meter when accounting for the employees and total space occupied by the Group’s respective amenities. It is important to note that this number significantly decreased between 2012 and 2013 (Figure 16).When reporting the emissions by scopes, Scope 2was responsible for 75.1% of the total GHG emissions (16,003.9 tCO2e) whereby GHG emissions from EDL electricity was the main contributor, accounting for more than 75.1 % of this scope’s value. On the other hand, Scope 1 (4,101.7 tCO2e) and Scope 3 accounted for the rest of total GHG emissions

(1,204.2 tCO2e), with 19.2% and 5.7% respectively. Flight trips for business purposes constitute the core component of Scope 3 and are responsible for 74.3% (894.9 tCO2e) of total indirect emissions in this scope. Paper consumption constitutes 17.2% (209.7 tCO2e) of Scope3’s total emissions and courier services account for8.4% (101.4 tCO2e).

Table 12 - Paper Recycling between2012 and 2013

YEAR Kilograms of PaperCollected for Recycling

2012 51,770

2013 83,192

Table 13 - Total Weight of Wasteby Type

Waste Managementper Category Kg in 2013

Donated e-waste 1,835

Dumped e-waste 6,530

Recycled paper 83,192

Recycled plastic 130

In November 2013

148electric heaters were donated to 7 NGOs: Foyers SOS, Ayadina Association, Dar Al Aytam Al Isslamiya, Bird's Nest Orphanage, Mission de Vie, Oum El Nour and Unite Lebanon Youth Project (ULYP)

In December 2013

63IT hardware pieces (1,835 Kg) were donated to Ayadina Association, Assabil, and Al Kobayat Public High School

Figure 16 | Total GHG Emissions per Year for Bank Audi

22,400

22,200

22,000

21,800

21,600

21,400

21,200

21,000

20,800 20

12

20

13

tCO

2e

Table 14 - Bank Audi’s Greenhouse Gas Emissions between 2012 and 2013

2012 2013

Total GHG emissions 22,199.8 tCO2e 21,309.9 tCO2e

GHG emissions per employee 8.0 tCO2e 7.68 tCO2e

GHG emissions per square meter 0.230 tCO2e 0.220 tCO2e

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Figure 17 | Bank Audi's Greenhouse Gas Emission Sources

Figure 18 | Emissions per Source in 2013

From Diesel consumptionin owned generators

From electricitypurchased from EDL

From employees' airreasons

From courier services

From paper consumption

From electricity purchasedfrom shared generators

Fr roleum

in Audi Group cafeterias

From refrigerants used

Scope 1 Scope 2 Scope 3

This first step and baseline information will be very useful as we strive to continue improving our environmental footprint across various facets of our operations and designing relevant and appropriate energy saving programs to increase the efficiency of electrical energy usage and combat climate change.

With respect to GHG emissions’ intensity ratio for Scopes 1, 2 and 3, it was noticed that every employee at Bank Audi Group Lebanon was responsible for 7,676.5 Kg of

17%

57%

18%

0%

4%

1%

3%

EDLOwned generatorsShared generatorsCourier servicesFlightPapersRefrigeration

CO2e in 2013, and that total emissions reached 220.5 Kg of CO2e per square meter. Comparing 2012 to 2013, there is a 4% improvement in total GHG emissions. GHG calculations were performed using well established tools and methodologies following the GHG Protocol – Corporate Standard developed by the World Resource Institute and the World Business Council for Sustainable Development (WRI, 2006b, c). Using an internationally recognised tool allows for the standardisation of procedures and calculations, which is key for quantifying and comparing emissions accurately. Moreover and when available, we applied local emissions and the most up-to-date emission factors to ensure the transparent calculation of a reliable footprint.

Energy ConsumptionExploring the energy consumption within Bank Audi Group Lebanon revealed that the total fuel (Diesel) consumption is 1,489.9 tons and that total electricity consumption is 19,185.68 MWH, with 98.3% purchased directly from EDL and the rest purchased from shared generators (0.9%) or produced by owned generators (0.8%). The cooling consumption in 2013 originated from direct Scope 1 emissions and amounted to 4,101.7 tCO2e.

Table 15 - Global Warming Potentials (GWP) of Common Greenhouse Gases and Refrigerants

Gas or Blend GWP Source

HCFC-22 1,500.0 IPCC Second Assessment Report (1995)

R-410A 1,725.0 ASHRAE Standard 34

GWPs of Common Greenhouse Gases and Refrigerants

Global warming potentials for used gases in Audi Lebanon Group.

EDLOwned generatorsShared generatorsCourier servicesFlightPapersRefrigeration

Jan.

Monthly average = 1.729.1 tCO2e

Feb. Mar. Apr.

2500

2000

1500

1000

500

0

May June July Aug. Sep. Oct. Nov. Dec.

To

nn

es o

f C

O2e

Figure 19 | Monthly Variation of GHG Emissions in Bank Audi Group Lebanon

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Calculated as per the following equation:Emissions from electricity consumption (tCO2e) = EDL consumption (kWh) x EF EDL (tCO2e /kWh) Where: EF EDL is the national grid emission factor used and advised by the Lebanese MoE whichis 0.65 tCO2e/MWh

Calculated as per the following equation:Emissions from Diesel consumption = Total amount of Diesel consumed (l) x EF Diesel (tCO2/TJ) x net

rol (TJ/Gg) x density of Diesel (Kg/l) x 10-6 Gg/KgWhere:For the calculation of CO2 emissions, the following default values determined by the IntergovernmentalPanel on Climate Change (IPCC) in 2006 were used:

rol: 43.3 TJ/GgEF Diesel (CO2 emission factor (EFCO2) of petrol): 74.8 tCO2/TJDensity of petrol: 0.85 Kg/l

Calculated as per the following equation:

(tCO2e

Where:Current is the purchased amperage (A)

TWorking hours total of monthly electrical blackouts in hoursDEF (Default Emission Factor) 1.3 tCO2e/MWhPower factor (%) 0.8

Emissions from Electricity Consumption

Emissions from Diesel Generators

Emissions from Purchase of Electricity from Shared Generators

Emissions from Air Travels

Emissions from Paper Usage

Emissions from Courrier Services

Calculated as per the following equation:Emissions fr 2e 2e. Passenger-1 x Km-1) Where:N is the number of passengers

nce

Calculated as per the following equation:Emissions from paper usage (tCO2e) = Weight (t) x EF paper (tCO2e/t paper) Where:The emission factor for paper is 1.62 tCO2e/tons of paperData on papers was provided by Audi Group Lebanon and based on consumption. Only selected types wereincluded in this audit

Calculated as per the following equation:Emissions from paper usage (tCO2e) = D (Km) x EF car Where: D is the distance travelled in Km per month

resent)0.33 tCO2e rotocol Corporate Standard recommendations

Figure 20 | Sources of Conversion Factors Used

Environmental Loanand SponsorshipsExternally, we succeeded in promoting environmental sustainability through our environmental loans, sponsorships, and for-cause or benefit sponsorships. In 2013 for instance, we extended over USD 32 million of environmental loans at preferential interest rates, all subsidised by the Central Bank of Lebanon and verified and approved by the Lebanese Center for Energy Conservation. These loans target varying nuances of environmentally friendly alterations, from renovated lighting systems to acquiring photovoltaic panels, to landscaping implementations applied in private, residential or commercial buildings. Another recent project financing benefited to Heavy Oil Distribution Company SAL (HODICO) to help it refurbish its electrical plant in Zouk, and is likely to have significant positive environmental externalities by reducing the average pollution produced by the plant in question. HODICO treated the fuel with additives, marking a significant and documented reduction in the sulphuric acid and carbon monoxide produced by the plant.

Significant efforts were also made in 2013 to support the establishment of environmentally friendly buildings in academic institutions. This is part of raising environmental awareness among the youth. For example, we extended an environmental loan of about USD 10 million to International College (IC), a prominent private academic institution in Beirut, for the implementation of a new elementary school building. The elementary school is the first school in Lebanon to be assessed according to the US Green Building Council (USGBC) LEED Schools scheme and was accordingly awarded a “Gold” certificate for its eco-friendly building and Leadership in the Energy and Environmental Design

Scheme. The LEED Schools scheme addresses issues that are at the core of the academic curriculum including waste minimisation/disposal, energy, water conservation, and a healthy living environment. Some of the main features that this building embodies and promotes include water efficiency, energy and atmosphere conservation, material recycling and resource efficiency, indoor environmental quality, and innovative design.

LEED Gold Certificate

IC Green Building

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Another example is the Khauli Building 124, a pioneer green building in Beirut which was financed by the Bank through an energy loan sponsored by the Ministry of Energy and Water, the Lebanese Center for Energy Conservation (LCEC), the UNDP, the European Union, and the Central Bank of Lebanon. The partnership between Bank Audi and Khauli 124 is a typical form of partnership between banks and developers in pursuit of a greener and more efficient environment. Khauli 124 was successfully completed in October 2013 and currently serves as a model building for energy efficiency and renewable energy utilisation. The building’s key features include a central solar system, gas step-up boilers, gas step-up generators, energy efficient VRV air-conditioning, and hi-tech green elevators.

We also provided partial sponsorship to “Achrafieh 2020”, a pioneering environmental and apolitical initiative that aims at transforming the Achrafieh district into a healthy, environmentally friendly space. The project organises “car free” days in Achrafieh, whereby streets are transformed into pedestrian-only zones for a whole day in support of eco-friendly transportation, and are animated with various activities including live shows, arts and crafts, and sports sessions. Similarly, we supported the Association for the Protection of Jabal Moussa,a biosphere reserve in Lebanon part of the UNESCO Network of Biosphere Reserves’ Man and Biosphere (MAB) program, in the purchase of containers, labels andmaterials to help with local produce, thereby sustaining over 40 needy families.

Scientific Research

In addition, we further extended our support to various universities in conducting rigorous scientific research pertaining to the environment and to air pollution. In this context, we forged ahead with a partnership initiated in 2012 with the American University of Beirut’s Department of Chemistry, which consisted in helping build laboratory capacity and contribute to the establishment of an Air Quality Assessment lab which would be the first of its kind in the country. Bank Audi’s support was also partly channelled to purchase sophisticated equipment that helps measure volatile compounds and dioxins and pushes forward with the Air Quality Monitoring Study in the Dora/Bourj Hammoud Area. The purpose of this study is to identify the nature of any hazardous air pollutants in the congested Dora area in Beirut, which may cause sickness, impaired health, or significant discomfort among workers or citizens of the community. These toxic substances might be emitted from several sources in the area, including above ground oil storage tanks, landfills, and industrial activities clustered in less than a1 Km radius of this highly populated area. The study is still in progress and is expected to produce findings relating to: 1) Some particular carcinogens in two Dora sites that could

be extrapolated to the Dora area.2) Identifying potential emission sources of these carcinogens.3) Inspiring engineers on exploring new ways to renovate

buildings and revamp ventilation systems. 4) Sound scientific basis to develop policies related to

air quality environmental regulations and waste dump practices in the area.

The total cost of this project is USD 130,000.

Special Feature Story

Through its partnership with IUCN, Bank Audi renews its commitment to the protection of the Lebanese biosphere. One of the projects we have recently embarked on jointly with the IUCN is the establishment of a community-based ecotourism system and the formulation of a National Ecotourism Strategy within a climate change context. The National Ecotourism Strategy seeks to provide an integrated management plan which will guarantee a comprehensive direction for the future of ecotourism in Lebanon through identifying relevant problems pertaining to sustainable development and recommending feasible approaches to address these issues. The project objectives include:

Enhancing feasible approaches for the promotion and development of ecotourism by engaging various stakeholders including flora and fauna experts, rural communities and tourism experts. Considering ecotourism as an empirical tool for sustainable development, management, protection and conservation of the Lebanese environment, natural resources and cultural heritage. Establishing a link between the evolving strategy and the national external challenges including economic, social, environmental, educational and resource management realities and constraints. Considering the crucial role the strategy will play in terms of promoting improved natural and cultural conservation, and mitigation of climate change.

IUCN partnership - Ecotourism Management System Project

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Supplementary Information

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Reporting and RatingsThis report complies with a number of external reporting guidance and standards. Primary among these is the ISO 26000 Social Responsibility Guidance. In 2012, Bank Audi was the first banking institution to pilot the ISO 26000 Social Responsibility Guidance in Lebanon. Accordingly, the Report addresses the seven core subjects of responsibility defined in the ISO 26000 standard (Table 16). It also addresses many guidelines and indicators set out in the Global Reporting Initiative (GRI), and is prepared “In accordance” with GRI G4 Guidelines and the Financial Services Sector Supplement, at a “Core” application level (Tables 17 and 18). GRI is an internationally recognised voluntary guideline which defines principles and indicators that companies can use to report on the triple bottom line. GRI is currently observed by over 4,000 organisations in 64 countries. The Report also complies with the principles defined by the UN Global Compact (UNGC), although we are not as of yet a formal signatory of the UNGC (Table 19).

Table 16 - ISO 26000 Core Subjects Reference Table

ISO 26000 CoreSubjects Issues Section in CSR Report

OrganisationalGovernance

CSR management and Disclosures on Management Approach (DMA) Stakeholder engagement Due diligence and ethical conduct under Corporate Governance Pillar

Human Rights[GC Principles 1-6]

Issue 1: Due diligenceIssue 2: Human rights risk situationsIssue 3: Avoidance of complicityIssue 4: Resolving grievancesIssue 5: Discrimination and vulnerable groupsIssue 6: Civil and political rightsIssue 7: Economic, social and cultural rightsIssue 8: Fundamental principles and rights at work

Revised Code of Ethics and Conduct in 2012 to integrate an explicit statement on human rights Adding a statement in all supplier requests for quotations within procurement contracts, which asserts the importance of human rights Human Rights accorded highest regard across various facets of employment relationships and contracts

Labour Practices[GC Principles 3-6]

Issue 1: Employment and employment relationshipsIssue 2: Conditions of work and social protectionIssue 3: Social dialogueIssue 4: Health and safety at workIssue 5: Human development and training in the

workplace

Progressive human resource policies Promoting diversity, inclusion and equal opportunity Work-life balance Investing in talent development and educational support of our staff and their dependents

The Environment[Principles 7-9]

Issue 1: Prevention of pollutionIssue 2: Sustainable resource useIssue 3: Climate change mitigation and adaptationIssue 4: Protection of the environment, biodiversity

and restoration of natural habitats

Environmental management Carbon footprint assessment Supporting environmental loans and various programs to minimise environmental footprint including solid waste, GHG emissions, energy consumption Support for scientific research in relation to the environment

Fair Operating Practices[GC Principles 3-10]

Issue 1: Anti-corruptionIssue 2: Responsible political involvementIssue 3: Fair competitionIssue 4: Promoting social responsibility in the value

chainIssue 5: Respect for property rights

Fair operating practices Transparent governance practices Guidelines for tracking CSR projects across branches and units and assessing if any project has a CSR component Risk management compliance and revised risk management policy

Consumer Issues Issue 1: Fair marketing, factual and unbiased information and fair contractual practices

Issue 2: Protecting consumers' health and safetyIssue 3: Sustainable consumptionIssue 4: Consumer service, support, and complaint

and dispute resolutionIssue 5: Consumer data protection and privacyIssue 6: Access to essential servicesIssue 7: Education and awareness

Anti-counterfeit measures Customer surveys “Clear all the way” campaign Increasing financial literacy among various customer segments Responsible product design and product portfolio

Our CSR activities can be classified based on the core subjects of ISO 26000 as follows:

Community Involvement and Development

Issue 1: Community involvementIssue 2: Education and cultureIssue 3: Employment creation and skills developmentIssue 4: Technology development and accessIssue 5: Wealth and income creationIssue 6: HealthIssue 7: Social investment

Various social, health, humanitarian culture and sports activities pertaining to Community Development

New employee volunteering program: “Be A Hero for a Day” Support and partnerships with well known NGOs and corporate foundations

GENERAL STANDARD DISCLOSURESTable 17 - Implementation of GRI Content Index for "In accordance" - Core - General Standard Disclosures

General StandardDisclosures Description Reference

Strategy and Analysis

G4-1 Statement from the most senior decision-maker of the organisation about the relevance of sustainability to the organisation and the organisation’s strategy for addressing sustainability

P. 4

G4-2 Provide a description of key impacts, risks, and opportunities P. 6 & AR*

Organisational Profile

G4-3 Report the name of the organisation P. 6

G4-4 Report the primary brands, products and services P. 25

G4-5 Report the location of the organisation’s headquarters AR P. 20 & website

G4-6 Report the number of countries where the organisation operates, and the names of the countries where the organisation has significant operations or that are specifically relevant to the sustainability topics covered in the Report

P. 6

G4-7 Report the nature of ownership and legal form P. 6

G4-8 Report the markets served (including geographic breakdown, sectors served, and types of customers and beneficiaries)

P. 6

G4-9 Report the scale of the organisation including:- Total number of employees- Total number of operations- Net sales (for private sector organisations) or net revenues (for public

sector organisations)- Total capitalisation broken down in terms of debt and equity (for private

sector organisations)- Quantity of products or services provided

P. 24

G4-10 a. Report the total number of employees by employment contract and gender

b. Report the total number of permanent employees by employment type and gender

c. Report the total workforce by employees, supervised workers and genderd. Report the total workforce by region and gendere. Report whether a substantial portion of the organisation’s work is

performed by workers who are legally recognised as self-employed, or by individuals other than employees or supervised workers, including employees and supervised employees of contractors

f. Report any significant variations in employment numbers (such as seasonal variations in employment in the tourism or agricultural industries)

P. 40

* AR: Annual Report

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Report Profile

G4-28 Reporting period (such as fiscal or calendar year) for information provided P. 7

G4-29 Date of most recent previous report (if any) P. 7

G4-30 Reporting cycle (such as annual, biennial) P. 7

G4-31 Provide the contact point for questions regarding the Report or its content P. 70

G4-32 a. Report the “In accordance” option the organisation has chosenb. Report the GRI Content Index for the chosen option (see Table 18)c. Report the reference to the External Assurance Report, if the Report has

been externally assured (GRI recommends the use of external assurance but it is not a requirement to be “In accordance” with the Guidelines)

P. 7 & 62

G4-33 a. Report the organisation’s policy and current practice with regard to seeking external assurance for the Report

b. If not included in the assurance report accompanying the sustainability report, report the scope and basis of any external assurance provided

c. Report the relationship between the organisation and the assurance providers

d. Report whether the highest governance body or Senior Executives are involved in seeking assurance for the organisation’s sustainability report

Applicable only for our Carbon Footprint Assessment

Governance

G4-34 Governance structure of the organisation, including committees under the highest governance body

AR P. 10

G4-38 Report the composition of the highest governance body and its committees AR P. 10

G4-39 Report whether the Chair of the highest governance body is also an executive officer*

AR P. 10

G4-48 Report the highest committee or position that formally reviews and approves the organisation's sustainability report and ensures that all material aspects are covered**

Ethics and Integrity

G4-56 Describe the organisation's values, principles, standards and norms of behaviour, such as Code of Ethics and Conduct

P. 10 & Appendix 1

General StandardDisclosures Description Reference

G4-11 Report the percentage of total employees covered by collective bargaining agreements

P. 42

G4-12 Describe the organisation’s supply chain P. 26

G4-13 Report any significant changes during the reporting period regarding the organisation’s size, structure, ownership, or its supply chain

AR P. 12

G4-14 Report whether and how the precautionary approach or principle is addressed by the organisation

P. 10 & 21

G4-15 List externally developed economic, environmental and social charters, principles or other initiatives to which the organisation subscribes or which it endorses

P. 19

G4-16 List memberships of associations (such as industry associations) and national or international advocacy organisations in which the organisation:- Holds a position on the governance body- Participates in projects or committees- Provides substantive funding beyond routine membership dues- Views membership as strategic

P. 14

G4-17 a. List all entities included in the organisation’s consolidated financial statements or equivalent documents

b. Report whether any entity included in the organisation’s consolidated financial statements or equivalent documents is not covered by the Report

AR P. 175

P. 8

G4-18 a. Explain the process for defining the Report’s content and aspect boundaries

b. Explain how the organisation has implemented the Reporting Principles for Defining Report Content

P. 7

G4-19 List all the material aspects identified in the process for defining report content

P. 8

G4-20 For each material aspect, report the aspect boundary within the organisation P. 9

G4-21 For each material aspect, report the aspect boundary outside the organisation

P. 7

G4-22 Report the effect of any restatements of information provided in previous reports, and the reasons for such restatements

P. 10

G4-23 Report significant changes from previous reporting periods in the scope and aspect boundaries

P. 10

Stakeholder Engagement

G4-24 Provide a list of stakeholder groups engaged by the organisation P. 7

G4-25 Report the basis for identification and selection of stakeholders with whom to engage

P. 8

G4-26 Report the organisation’s approach to stakeholder engagement, including frequency of engagement by type and by stakeholder group, and an indication of whether any of the engagements were undertaken specifically as part of the Report’s preparation process

P. 8

G4-27 Report key topics and concerns that have been raised through stakeholder engagement, and how the organisation has responded to those key topics and concerns, including through its reporting. Report the stakeholder groups that raised each of the key topics and concerns

P. 8

Identified Material Aspects and Boundaries

* The chair of the highest governance body is not an executive officer.** The Executive Committee.

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Table 18 - Implementation of Core GRI Content Index - Specific Standard Disclosures for the Sector

Material Aspects DMA and Indicators Omissions

Generic DMA: why the aspect is material, which impacts make this aspect material, and the evaluation of Management approach.

Generic DMA: how the organisation manages the material aspect or its impacts.

Economic Performance G4-EC1: direct economic value generated and distributed

Market Presence G4-EC6: proportion of Senior Management hired from the local community at significant locations of operation

Indirect Economic Impacts G4-EC7: development and impact of infrastructure investments and services supported

Energy G4-EN3: energy consumption within the organisation

Emissions G4-EN15: direct greenhouse gas (GHG) emissions (Scope 1)

G4-EN16: energy indirect greenhouse gas (GHG) emissions (Scope 2)

G4-EN17: other indirect greenhouse gas (GHG) emissions (Scope 3)

G4-EN18: greenhouse gas (GHG) emissions' intensity

Effluents and Waste G4-EN23: total weight of waste by type and disposal method

Overall G4-EN31: total environmental protection expenditures and investments by type

Employment G4-LA1: total number and rates of new employee hires and employee turnover by age group, gender and region

G4-LA2: benefits provided to full-time employees that are not provided to temporary or part-time employees, by significant locations of operation

G4-LA3: return to work and retention rates after parental leave, by gender

Occupational Healthand Safety

G4-LA5: percentage of total workforce represented in formal joint Management-worker health and safety committees that help monitor and advise on occupational health and safety programs

Our health andsafety committee is informal

Training and Education G4-LA9: average hours of training per year per employee by gender and by employee category

G4-LA10: programs for skills management and lifelong learning that support the continued employability of employees and assist them in managing career endings

G4-LA11: percentage of employees receiving regular performance and career development reviews, by gender and by employee category

Diversity and Equal Opportunity

G4-LA12: composition of governance bodies and breakdown of employees per employee category according to gender, age group, minority group membership, and other diversity indicators

Labour PracticesGrievance Mechanisms

G4-LA16: number of grievances about labour practices filed, addressed and resolved through formal grievance mechanisms

Number not availablefor disclosure

Specific Standard Disclosures

Material Aspects DMA and Indicators Omissions

Anti-corruption G4-SO4: communication and training on anti-corruption policies and procedures

Local Communities G4-FS13: access points in low-populated or economically disadvantaged areas by type

G4-FS14: initiatives to improve access to financial services for disadvantaged people

Product andService Labelling

DMA: initiatives to enhance financial literacy by type of beneficiary (former FS16)

Product Portfolio Organisation-wide goals regarding performance relevant to this aspect, including plans to improve implementation of policies/procedures identified in “Policies with Specific Environmental and Social Components Applied to Business Lines” (former FS1) and “Procedures for Assessing and Screening Environmental and Social Risks in Business Lines” (former FS2) and any relevant audit results

G4-FS8: monetary value of products and services designed to deliver a specific environmental benefit for each business line broken down by purpose

Audit Coverage and frequency of audits to assess implementation of environmental and social policies and risk assessment procedures (former FS9)

Financial Services Sector Indicators

Table 19 - Implementation of the 10 Principles of the UN Global Compact

Core Area Principles Examples of Implementations at Bank Audi

Human Rights Principle 1:Businesses should support and respect the protection of internationally proclaimed human rights; andPrinciple 2:Make sure that they are not complicit in human rights abuse.

- Bank Audi updated its Code of Ethics and Conduct to make explicit reference to the respect of human rights and the Universal Declaration on Human Rights (UDHR) under the principle relating to “Compliance with Laws, Rules, Regulations and International Declarations”.

- The CSR policy makes explicit reference to “contributing to alleviate challenges related to human rights high-risk situations on a case-by-case basis”.

- We added a statement in all supplier requests for quotations within procurement contracts, which asserts the importance of human rights.

- Human rights are accorded highest regard across various facets of employment relationships and contracts.

Labour Principle 3:Businesses should uphold the freedom of association and the recognition of the right to collective bargaining;Principle 4:The elimination of all forms of forced and compulsory labour;Principle 5:The effective abolition of child labour; andPrinciple 6:The elimination of discrimination in respect of employment and occupation.

- Bank Audi is a member of the Association of Banks in Lebanon (ABL) and complies with all its principles relating to labour issues.

- More than 97% of the Bank’s employees are covered by collective agreements.- Progressive labour conditions that embody respect for human rights.- Responsible employment including diversity and equal opportunity,

occupational health and safety, training education and talent development, and external human development.

- Abiding by ABL's Collective Labour Agreement (2013-14), Chapter 1, Article 5.- Abiding by the Lebanese Labour Law.- Progressive working conditions for staff, as shown in the Report.- Diversity and inclusion philosophy and practices, as shown in the Report.

Environment Principle 7:Businesses should support a precautionary approach to environmental challenges;Principle 8:Undertake initiatives to promote greater environmental responsibility; andPrinciple 9:Encourage the development and diffusion of environmentally friendly technologies.

- Carbon footprint measurement.- Precautionary approach in relation to solid waste, GHG emissions and energy

consumption.- Support to scientific research pertaining to the environment.- “Grow Green” program.- LEED program.- Environmental loans and sponsorships.- Partnership with IUCN.- Environmental awareness.

Anti-corruption Principle 10:Businesses should work against corruption in all its forms, including extortion and bribery.

- The Code of Conduct makes explicit reference to anti-corruption.- 62% of our governance body members, 67% of employees, 79% of Middle

Management, and 19% of Senior Management have been trained in relation to anti-corruption policies and procedures.

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As outlined in this report, we have made considerable progress in relation to each of these five pillars. In the area of Corporate Governance, the Report made clear how we have laid down strong foundations of ethics, conduct and integrity, and best practice governance practices and policies. We also continue to streamline our governance practices year after year and focus on important issues to deliver value to our clients. In the Economic Development pillar, we have tried to address issues resulting from the recent economic downturn, working in close collaboration with leading non-profits, to revitalise entrepreneurship and create local economic opportunities. Under the Community Development pillar, we have collaborated with key social organisations to create direct social impact in areas of greatest need. We have also continued to nurture human talent and competencies, and to outdo peers in helping talented employees and community youth grow beyond their potential. In the Environment field, we have taken active steps to strengthen our environmental protection efforts both internally and externally, and to come up with new

initiatives that will contribute to sustainable development in the broadest sense. We have also begun to coordinate efforts across the Group to ensure that we harmonise our involvement around core CSR issues that make sense to our business.

We feel proud that the activities under those five pillars cohere and complement each other, thus allowing us to create value at multiple levels and to implement our vision in the area of CSR and sustainability. We remain committed to this course of continuous innovation and improvement, and look to differentiate ourselves and to be more proactive in CSR-related issues year after year. Each of these five pillars has its specific focus; together, they cohere to make us more successful, both financially and socially, and to create new opportunities, more inclusiveness, and certainly more hope in our future. We are keen on staying the course, and on reaping and sharing the benefits of this responsible business orientation locally and across the entire group in the years to come.

ConclusionWe recognise that being a responsible company is integral to our success. Our 2013 Report has made clear that we are striving to create multiple streams of added value for our clients, shareholders, the economy, the community and the environment. Over the past two years, we have innovated and continued to update and refine our CSR strategy. Today, we feel proud of our achievements and the CSR strategy we have established, which revolves around five key pillars, namely good governance, local economic development, community development, human development and environmental protection. We consider each of these areas to be relevant and important to our business, our stakeholders and our common future. Through systematic engagement across these five interconnected CSR material areas or pillars, we make sure to attend to all dimensions of our responsibility, to add value to society, and to strengthen the fabric of trust with our stakeholders and with the communities around us.

In 2013, we were honoured by a variety of organisations for our innovative banking practices and our progressive employment policies, a few of which are captured below:

Best Bank in Lebanon 2013

Banker Middle East Industry Awards 2013

Global Finance Award 2013

Third top ranked bank overall for Investor Services across Levant & North Africa,

FTSE Global Markets 2013 Global Awards

Social Media Awards 2013

MENA Cristal Awards 2013

emall.me

Best Innovative Launch for 2013 by VISA

Sapphire (Silver) Cristal

For information about the Report, please refer to: CSR Unit

csr@banqueaudi.comBank Audi Palladium – Bab Idriss, Beirut, Lebanon

Awards and Recognition

Table 20 - Bank Audi Awards for Bank Audi Group Lebanon in 2013

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Internal AuditObjective

Review and evaluate the development of the CorporateSocial Responsibilities activities Report in line with ISO 26000 Standards, Global Reporting Initiative (GRI – G4), UN Global Compact Principles (GC principles) and best practices.

Executive Summary

Group Internal Audit conducted a review over Bank Audi’s2013 Corporate Social Responsibility (CSR) activitiesReport based on the objective outlined above.

The Bank is continually exerting efforts to enhanceCSR-related activities, and has established an operatingmechanism to ensure alignment to the InternationalStandard (ISO 26000), the Global Reporting InitiativeGuidelines (GRI-G4), Global Compact (CG principles) and best practices.

Based on our audit, nothing has come to our attention to make us believe that the information contained in the CSR Report has not been fairly presented in all material respects.

We identified opportunities to enhance the current CSRactivities as follows:

Continue to further integrate CSR across the Bank’sdecision-making processes and operations, as well as raising awareness and building competency for socialresponsibility.

Continue to engage the Bank’s employees at the various levels toward applying and promoting the Bank’s CSR principles.

Formalise the internal operating procedures to better mirror the current CSR operating environment, e.g. responsibilities,processes/sub-processes, required controls andinterdependence of the various concerned parties across the Bank, including the streamlined transmission of all CSR-related data and information.

Mahmoud MajzoubHead of Group Internal Audit

Appendix 1 - Highlights of Code of Ethics and Conduct

Code of Ethics and Conduct

Guiding Ethical Principles Commitment to honesty, integrity and trustworthinessCommitment to fair competitionAdherence to local and international standards

Fostering a Professional Conduct

Supporting a Positive Work Environment Violence and harassment free workplaceDiscrimination free workplaceAlcohol and drug free workplaceSmoke free workplace

Acting Responsibly Respect of working hoursUse of Group propertyUse of telephones, internet and emailPersonal belongingsPolitical and religious affiliationsBetting and gamblingWorkplace proper etiquetteCommunication with the media and the public

Ensuring Mutual Security Secure workplaceAccess to Group premises

Managing Information External activitiesPersonal relationshipsPersonal financesGifts and benefits

Being Good Global Citizens Involvement in social responsibilityRespect of human rights

Reporting Concerns

Investigations

Administration of the Code Violation of the CodeReview and amendments of the Code

Raising ethical issues: “All of the Group’s representatives, including directors and employees, are expected to consider compliance with ethical standards as a vital element of their responsibilities.”

Compliance with laws, rules and regulations: “It is the Group’s objective to comply with all applicable laws, rules and regulations in all localitieswhere it does business.”

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Appendix 2Bank Audi CSR Policy

Integrity and open communication in interactingwith internal and external stakeholders

Proactive, cooperative andcollaborative commitment to integratesocial and environmental concerns inbusiness operations and to contributeto the well-being of the society

Integrity in business

Human development, valuing teamworkand talent rewarding

Role model for socially responsiblebehaviour in Lebanon

by socially responsible guidelines

Minimising the negative impacts of ouractivities on the environment

Accountability for decisions and actions we take

Consciousness and corporate citizenship

Diversity and equal opportunity among all employees

Civic behaviour and sense of belonging

Promoting healthy ecosystems, social equity andgood organisational governance

Abide by ISO 26000 Guidelines

Alleviate challenges related to human rights asper the Universal Declaration of Human Rights