Yalla : 2023 Environmental, Social and Governance Report

YALLA GROUP LIMITED

(NYSE: YALA)

www.yalla.com	2023

ENVIRONMENTAL, SOCIAL & GOVERNANCE REPORT

2023 Environmental,

Social and Governance Report

10	Responsible Governance
12	Corporate Governance
18	ESG Governance

26	Environment
28	Yalla's Response to Climate Change

30 Green Office

32 Trust

34	Information Security

1. Supply Chain Management
2. Intellectual Property

CONTENTS

2	About this Report
4	About Yalla Group
8	Letter from Our CEO
9	Letter from Our President

42 Our People

44 Rational Recruitment and Management

46 Diversity, Equality and Inclusion

1. Employee Care
2. Employee Development
3. Our Community

52	Yalla Community
55	Community Engagement

57 Appendix

1. Appendix 1
2. Appendix 2
3. Appendix 3

2	2023 Environmental,	About this Report	About Yalla Group
Social and Governance Report

ABOUT THIS REPORT

Yalla Group Limited ("Yalla", the "Company" or "we") is proud to present our third Environmental, Social and Governance Report (the "Report") for the year 2023 to highlight our corporate vision beyond financial achievements.

This report aims to offer stakeholders a clear, transparent, and comprehensive review of our sustainability performance. The content of the Report has been defined through a meticulous materiality process involving all stakeholders, which is explained in detail in the body of the Report.

The Report has been prepared in

accordance with the Global Reporting

Initiative (GRI) Standards.

GRI

ACCORDANCE

Some disclosures showcase performance

across the years 2023 and 2022,

highlighting significant developments.

COMPARABLE

DATA

The Report covers our environmental, social, and governance performance for the year 2023. We have published the Report on a yearly basis since 2021.

YEAR

Responsible Governance

Environment

Trust

Our People

Our Community

Appendix

3

For any comments or suggestions related to the Report, please contact us via email at [e-mail]. We look forward to receiving your valuable input.

The Report also aligns with the United Nations Sustainable Development Goals (SDGs) and Task Force on Climate-Related Financial Disclosures (TCFD) framework.

ALIGNMENTS

Unless otherwise stated, all monetary values in the Report are expressed in U.S. dollars.

MONETARY

VALUES

Readers and all stakeholders can find the English and Arabic versions of the Report at our official website (https://www.yalla.com/).

CONTACT

POINT

4	2023 Environmental,	About this Report	About Yalla Group	Responsible Governance	Environment	Trust	Our People	Our Community	Appendix	5
Social and Governance Report

ABOUT YALLA GROUP

Mission

Provide localized online social networking and entertainment activities

Vision

Build the largest destination for online social networking and entertainment activities in MENA1

Values

Multicultural Understanding, Useer First, Simple, and Target

Yalla Group Limited is the largest MENA-based online social networking and gaming company, in terms of revenues in 2022.

We operate two flagship mobile applications, Yalla, a voice-centric group chat platform, and Yalla Ludo, a casual gaming application featuring online versions of board games, popular in MENA, with in-game voice chat and localized Majlis functionality.

Building on the success of Yalla and Yalla Ludo, we continue to add engaging new content, creating a regionally focused, integrated ecosystem dedicated to fulfilling MENA users' evolving online social networking and gaming needs.

Through its holding subsidiary, Yalla Game Limited, we have expanded our capabilities in mid-core and hard-core games in the MENA region, leveraging our local expertise to bring innovative gaming content to users.

In addition, our growing Yalla ecosystem includes YallaChat, an IM product tailored for Arabic users, and casual games such as Yalla Baloot and 101 Okey Yalla, developed to sustain vibrant local gaming communities in MENA. We are also exploring outside of MENA with Yalla Parchis, a Ludo game designed for the South American markets.

Our mobile applications deliver a seamless experience that fosters a sense of loyalty and belonging, establishing highly devoted and engaged user communities through close attention to detail and localized appeal that profoundly resonates with users.

1 MENA refers to the Middle East and North Africa region, including Algeria, Bahrain, Djibouti, Egypt, Iraq, Jordan, Kuwait, Lebanon, Libya, Malta, Morocco, Oman, Qatar, Saudi Arabia, Syria, Tunisia, United Arab Emirates, Western Sahara, Yemen and others, in total 21 countries. Data source: The World Bank & Wikipedia.

6	2023 Environmental,	About this Report	About Yalla Group	Responsible Governance	Environment	Trust	Our People	Our Community	Appendix	7
Social and Governance Report

Our Integrated Ecosystem

Social

Casual Games

Yalla

Voice-centric group chatting

YallaChat	Yalla Ludo
IM product tailored for Arabic users	MENA casual games + social networking

WeMuslim
Supports Muslim users in observing their customs	101 Okey Yalla
	Turkish board game

Mid-Hard Core Games
Merge Kingdoms	Yalla Baloot & Hand
Saudi Arabian card game
SLG hard-core game

Age of Legends	Yalla Parchis
RPG hard-core game
	South American Ludo

More to come

8	2023 Environmental,	About this Report	About Yalla Group	Responsible Governance	Environment	Trust	Our People	Our Community	Appendix	9
Social and Governance Report

LETTER FROM OUR CEO

LETTER FROM OUR PRESIDENT

Welcome

to Yalla Group's

2023

Environmental,

Social,

I

am pleased to

present

Yalla

Group's

2023

ESG

report.

This report is

and

Governance (ESG) Report.

an integral part

of our

ongoing dialogue with stakeholders.

It is my pleasure to

present Yalla Group's 2023

As the largest Middle

East and

North Africa (MENA)

As the largest Middle East and

North Africa

In terms of governance, we have

strengthened our

Environmental, Social, and Governance Report,

based online social

networking

and gaming

(MENA) based online social networking and

risk management framework and

implemented

"showcasing our performance across economic,

company, our multinational

corporation thrives on

"gaming company, we are deeply conscious of the

rigorous ethical standards. We've

taken several steps

social, governance, and environmental practices for

the strength of its diverse workforce hailing from

impact our operations have on both society and

to nurture talent in the MENA region, providing

the year 2023.

more than 13 different nations.

the environment. This is the third year that we

equal opportunities and career development for

present the ESG report, which is a testament to our

all employees regardless of their background. This

2023 was a year filled with changes and

This rich tapestry of cultures underpins our

unwavering commitment to sustainable growth and

report highlights our progress towards fair business

opportunities. As a global enterprise, Yalla faced a

corporate ethos, fostering an inclusive environment

responsible corporate citizenship.

conduct, and active engagement with stakeholders

complex and dynamic international environment

where respect for diversity is woven into the fabric

to ensure that our decisions serve the long-term

with many moving parts. Nevertheless, we forged

of our daily operations. We firmly believe that our

In this year's ESG report, we have refined our focus

interests of our shareholders, employees, and

ahead with our core business strategies and capped

ability to harness this cultural wealth empowers us

and priorities around Environmental, Social, and

society at large.

the year with robust results.

to innovate, adapt, and connect with our user base

Governance factors. We have also developed clear

more effectively.

plans, partnered with stakeholders, and acted to

The challenges posed by the evolving digital

Since our successful listing on the New York Stock

operate our businesses in increasingly responsible

landscape and action necessitate continuous

Exchange in 2020, we have been steadfast in our

I'm also proud to share that, thanks to our

ways. Our aim is not only to minimize our ecological

improvement and innovation. Our 2023 ESG

commitment to high-quality growth that is not only

sustainable development and robust financial

footprint but also to lead by example, inspiring

report underscores our unwavering dedication

commercially viable but also socially responsible and

performance, Yalla Group was recognized by Fortune

others within our industry to follow suit.

to these imperatives. It encapsulates not just our

environmentally sustainable.

magazine as one of 2023's top 500 Arab companies

achievements but also the roadmap ahead, as we

according to the Fortune 500 Arabia list.

On the social front, we have invested significantly

strive to set new benchmarks in sustainable business

Over the past year, we have intensified our efforts

in promoting digital literacy, responsible gaming,

practices within our sector.

towards sustainability. In August, for example,

We look forward to your continued support and trust

and ensuring user privacy and security. Our teams

Yalla Group established a Sustainable Account

as we journey together, and take this opportunity to

are dedicated to creating safe digital spaces where

We believe we are well-positioned to capture the

for Cash Management with Standard Chartered,

renew our invitation to all stakeholders to continue

users can interact, learn, and engage without fear

potential growth opportunities in the MENA region,

one of the world's leading international banks.

to engage with us on our open and ongoing

or prejudice. Moreover, we will continue to promote

and we look forward to delivering value to all our

Deposits in Sustainable Accounts are referenced

sustainability conversation and welcome everyone's

the sustainable development of Yalla Group and the

stakeholders as we strive to achieve our mission.

against Standard Chartered's sustainable projects,

feedback.

local communities and seize the opportunities for

addressing some of the world's gravest long-term

digital transformation in the MENA region.

Best regards,

sustainability threats.

Best regards,

Saifi ISMAIL

Tao YANG,

Director and President

Founder, Chairman, and Chief Executive Officer

RESPONSIBLE GOVERNANCE

At Yalla Group, we always uphold the highest ethical business standards and operate in strict compliance with laws and regulations, which serve as the cornerstone of our governance. We place the interests of stakeholders as our top priority and incorporate ESG principles into our ESG governance and corporate governance processes. Our commitment to sustainable development drives us to improve our governance practices continually.

12	2023 Environmental,	About this Report	About Yalla Group
Social and Governance Report

CORPORATE GOVERNANCE

GOVERNANCE MECHANISM

BOARD AND BOARD COMMITTEES

Responsible Governance

Environment

Trust

Our People

Our Community

Appendix

13

The functions and powers of our board of directors include, among others:

We are a Cayman Islands holding company and conduct our operations mainly through operating subsidiaries in the United Arab Emirates and China. We strictly abide by the applicable laws and regulations of the countries and regions we operate in.

At the same time, as the first UAE technology company listed on the New York Stock Exchange (NYSE), we also comply with the U.S. Securities and Exchange Commission (SEC) regulatory requirements and the NYSE for listed companies.

Our board of directors currently consists of seven directors, including four independent directors and three executive directors. The independent directors make up more than half of the total number of directors on the board, serving as a crucial check and balance mechanism to safeguard the interests of shareholders and our company as a whole.

We recognize and appreciate the importance of having a board of directors that is made up of individuals with diverse backgrounds and experiences. Our directors bring professional expertise and industry experience from various fields, such as finance, information technology, and communication, to formulate and implement company decisions.

formulating and overseeing the	establishing appropriate	implementing strong accounting
implementation of the group's	risk management policies to	and financial reporting systems,
goals, mission, strategies,	prevent, address, and respond	as well as adequate internal
policies, and business plan;	to risks;	controls;

formulating annual financial	supervising the process of
budget and monitoring the
nominating and electing	appointing senior executives;
operational and financial
board members;
performance;
	creating and sanctioning policies	monitoring the effectiveness
providing timely and accurate	of the compensation structure
related to corporate social
disclosure and communication to	and ensuring that employees'
responsibility and corporate
all relevant stakeholders;	interests are properly
governance measures;
	coordinated.
Board Changes in 2023		Board Committees
The board of directors remained unchanged	Our board of directors has established the Audit
during 2023. The stability of the board ensures the	Committee, the Compensation Committee, and the
effectiveness of corporate governance.		Nominating and Corporate Governance Committee.

Below is a summary of our Committee and Membership structure.

	Compensation	Nominating and
Audit Committee	Corporate Governance
Committee
	Committee

Tao Yang

Saifi Ismail

Jianfeng Xu

Saeed Al Hamli

Independent Director

Mohamed Al Ghanim

Independent Director

David Cui

Independent Director

Lili Xu

Independent Director

Chair Member

14	2023 Environmental,	About this Report	About Yalla Group
Social and Governance Report

Audit Committee

The Audit Committee provides independent and objective oversight of financial reporting, internal controls, and audit processes. The Audit Committee is responsible for, among other things:

Responsible Governance

Environment

Trust

Our People

Our Community

Appendix

15

Nominating and Corporate Governance Committee

The nominating and corporate governance committee exercises general oversight with respect to the governance of the board of directors, including the selection and nomination of board members, as well as overseeing corporate governance practices. By fulfilling its responsibilities, the committee contributes to our company's long- term success and sustainability. The nominating and corporate governance committee is responsible for, among

selecting the independent auditor;

reviewing and discussing with Management and the independent auditors the Company's

other things:

reviewing the experience and qualifications of the senior members of the independent auditors' team

obtaining and reviewing a statement from the independent auditors

setting clear hiring policies for employees and former employees of the independent auditors

reviewing with the independent auditors any

interim and annual audited financial statements

reviewing with Management and the independent auditors major issues regarding accounting principles and financial statement presentations

discussing earnings press releases with Management

assessing the skills, qualifications, and independence of current and potential board members;

establishing a transparent and effective process for board nominations;

overseeing regular evaluations of the board's performance and effectiveness;

developing and reviewing the Company's corporate governance policies and practices;

reviewing stockholder proposals and proposed responses.

audit problems or difficulties the independent auditors may have encountered in the course of its audit work, and Management's responses

discussing with the independent auditors any communications between the audit team and the independent auditors' national office regarding auditing or accounting issues that the engagement presented

discussing with the independent auditors any accounting adjustments that were noted or proposed by the independent auditors but were

conducting an appropriate review of all proposed related-party transactions, including proposed amendments to existing related party transactions

regularly reporting to the Board on the Committee's activities, and its conclusions with respect to the independent auditors, and make appropriate recommendations to the Board

RISK MANAGEMENT

Adequate risk management and effective internal monitoring systems are significant in achieving our strategic objectives. We have established a risk management and internal control organizational structure under the supervision and guidance of the board of directors to ensure that our company comprehensively understands and effectively manages its business risks.

Risk Management System

"passed on"

The ultimate responsibility for risk management and internal control rests with the board of directors;

The Internal Audit and Compliance team at Yalla is responsible for identifying and evaluating both internal and external risks associated with the Company and its various departments.

Compensation Committee

The Compensation Committee oversees and makes decisions related to the compensation and benefits of executives and directors. Our compensation committee is responsible for, among other things:

The Audit Committee provides guidance and supervision for establishing and implementing the internal audit system;

Meanwhile, the management team focuses on enhancing risk control initiatives to bolster the Company's overall risk management capabilities.

developing and reviewing our compensation policies, guidelines, and practices;

Reviewing and approving the compensation packages for our directors, top executives, and key management personnel;

evaluating and approving the design and effectiveness of incentive programs, such as stock option plans, performance-based bonuses, and other equity-based compensation;

monitoring the implementation and effectiveness of the Company's compensation programs, conducting periodic assessments of executive performance and compensation, and providing recommendations for improvement as needed;

reviewing and approving compensation-related disclosures in regulatory filings.

Risk Assessment Process

The Internal Audit and Compliance team conducts thorough risk assessments to identify potential risks and discuss corresponding control measures with relevant departments. Based on the findings from these assessments, the team drafts the scope and contents of the annual work plan and then approved by the Audit Committee.

Furthermore, the team is responsible for preparing annual work report, reporting to both the Audit Committee and Senior Management. These plans and reports outline the key

areas that need to be concerned about and provide insights into the overall findings and recommendations.

16	2023 Environmental,	About this Report	About Yalla Group
Social and Governance Report

CODE OF BUSINESS CONDUCT AND ETHICS

We place great importance on complying with all legal requirements and maintaining a culture of honesty and self- discipline as the cornerstone of our business. We aim to incorporate ethical principles into every aspect of our commercial operations, internally and externally, to establish a transparent and upright business environment.

Our Code applies to every employee at every level of Yalla Group, our directors, officers, and subsidiaries. Consultants, contractors, and others who work on behalf of Yalla Group are expected to conduct themselves in a manner consistent with the principles articulated in this Code. The Code provides standards for professional and ethical behavior, as well as articulates acceptable and unacceptable conduct and practices in internal and external dealings regarding:

Compliance with laws, regulations and policies	Accuracy of financial reports and other public
	communications
Conflicts of interest
	Prohibition of insider trading
Corporate opportunities

Responsible Governance

Environment

Trust

Our People

Our Community

Appendix

17

To make employees understand and apply the Code to their daily tasks, we conduct the Ethics and Compliance Training Program periodically. Continued training and monitoring ensure that personnel remain current on and adhere to the Code.

We are committed to enforcing the Code and promoting a culture of ethical behavior by creating a safe and secure environment for employees to report ethical concerns. Monitoring and reporting mechanisms have been established, including utilizing a third-party reporting system, ensuring confidentiality, providing anonymous reporting channels, and guarding against retaliation, all of which provide effective communication channels that protect the anonymity of employees reporting issues.

SUSTAINABLE PROCUREMENT

We consider sustainability aspects in procurement decisions and select suppliers transparently and fairly.

We have established and managed the integrity of our supply chain across three key aspects.

		Public communications and prevention of
Corporate assets and confidential information		selective disclosure
Competition and fair dealing		Environment
Gifts and entertainment		Harassment and discrimination
Company records
		For Yalla Group's Code of Business Conduct
		and Ethics, please visit:
		https://ir.yalla.com/Corporate-Governance

Implementation and enforcement of the Code

The Code has been adopted and overseen by the Board of Directors to promote honest, legal, and ethical conduct in all our business endeavors and transactions. All directors, officers, and employees of Yalla Group and its subsidiaries are responsible for and expected to comply with this Code and with the highest standards of business conduct and ethics.

Copies of the Code have been distributed to all directors, officers, and employees to inform them of the mandates and policies of the Company under the Code. All directors, officers, and employees are trained annually on this Code. Any director, officer, or employee who violates the Code shall be subject to disciplinary action without prejudice to any civil or criminal proceedings that the Company or appropriate regulators may file for violating existing laws.

A director, officer, or employee who becomes aware of any violation of the Code shall immediately notify the Board, in case of a director, or the immediate supervisor or the Compliance team in case of officers and employees. The Board and the Compliance team shall take all the necessary action to investigate any reported violations.

System Establishment

We formulated the System for the Management of Commercial Procurement, putting forward explicit requirements regarding procurement discipline, including measures that prohibit kickbacks and bribes, and ensure that employees actively avoid establishing any economic relationships with suppliers. We have also segregated employee duties in the procurement management process, to establish a system in which each position performs its own duties, has its own responsibilities, and mutually restricts other positions.

Process Control

The Management System described above strictly subjects all aspects of the procurement process to decentralized management, including request approval, order application approval, contract approval, and purchase acceptance, among other processes. In addition, employees at different levels in different departments are responsible for matters that correspond to their respective fields.

Contract Constraints

We have incorporated anti-commercial bribery clauses into our contracts to restrict unfair commercial competition, and at the same time, we have set up an open mailbox to accept any feedback from our partners.

We state the email address of our compliance team ([e-mail]) in all critical contracts and declare that if any party or any employee detects any behavior that could be considered commercial bribery by applicable laws and regulations, they are required to report the matter to this email address or take other legal measures according to the specific situation.

In 2023, we strictly complied with the legal and regulatory requirements related to anti-corruption, and no significant legal cases were raised involving corruption.