Telefónica O2 made a commitment to the principles of Good Corporate Governance already in its 2001 Annual Report; it has been making regular statements in its annual reports, concerning the progress of implementation of the principles of Good Corporate Governance in its practices. The Company has been meeting all the main criteria and observing the principles and recommendations of the Czech Code of Good Corporate Governance based on OECD Principles, which was published in 2004 (the Code). The Code is available at the website of the Ministry of Finance of the Czech Republic (www.mfcr.cz). An exception to this rule are the principles of Good Corporate Governance that are not in direct control of the Company’s governing bodies and are dependent on the decisions of its owners (in particular the criterion concerning the number of independent members of the Supervisory Board). The Board of Directors regularly oversees the good practice of Corporate Governance in subsidiaries controlled by Telefónica O2.

Organisation of Corporate Governance

The Corporate Governance model of Telefónica O2 has not incurred any significant changes in 2010 compared to the previous year. The model, as per the Articles of Association, is based on interaction between the executive Board of Directors, made up exclusively of executive managers of the Telefónica O2 Group, and the Supervisory Board. The Supervisory Board has powers to control key decision-making processes (using the mechanism of “prior standpoints” of the Supervisory Board to selected issues) and monitor other important aspects of the Company’s operation. The powers of the Supervisory Board and their discharge make a full and active use of advisory and initiative roles of the Supervisory Board’s committees. The controlling, supervisory and review function in the model of Corporate Governance in Telefónica O2 has been strengthened by the independent position of the Audit Committee. An integral part of the model is the combination of the Chief Executive Officer’s function with the function of Chairman of the Board of Directors, which the Company finds efficient and acceptable given the strong role of the Supervisory Board and the active involvement of its committees. Members of the Board of Directors are individually bound by the agreement for discharge of the office of a member and additionally they have work contracts for the work they have been hired to do, which is different from serving on the governing body.

An Ordinary General Meeting of the Company was held on 7 May 2010. The agenda of the Company’s supreme governing body comprised standard items relating to the operations of the joint-stock company, and a proposal for the amendment to the Company’s Articles of Association in order to accommodate recent changes in the legislation. A detailed overview of the conclusions of the Ordinary General Meeting is available on the Company’s website and was also published in the 2010 Half-year Report. Information about the dividends, the record and disbursement dates for the dividend payment is given in section 9 of this Annual Report. An Extraordinary General Meeting of the Company was held on 10 September 2010, which resolved to transform all common shares of the Company from bearer shares in the nominal value of CZK 100 to common registered shares. The Extraordinary General Meeting also approved an amendment to the Company’s Articles of Association which related to the change in the form of shares and the extension of the Company’s subject of business. The last material decision taken by the Extraordinary General Meeting was the granting of consent with the entering into an agreement to contribute a part of the enterprise into a wholly owned subsidiary company. Additional information and an overview of conclusions of the Extraordinary General Meeting are is available on the Company’s website.

The decision making procedure at the General Meeting is outlined in the Company’s Articles of Association (Articles 10 and 11); the Articles of Association are available on the Company’s website (see also sub-section Transparency and open information policy) and also form a part of the Rules of Procedure of the General Meeting, the key principles of which are highlighted in sub-section Shareholder relations; the sub-section Governing bodies details information on the scope of authority of the supreme governing body of the Company.

The Board of Directors held twenty meetings in 2010, thus complying with the duty to hold a minimum of twelve meetings each year. Any personnel changes in the Board of Directors in the period January-March 2010 were detailed in the 2009 Annual Report. In September 2010, the Supervisory Board discussed the resignation tendered by the Board of Directors member Jose Perdomo Lorenzo, who went on to an executive position in the parent company Telefónica, S.A. In November 2010, the Supervisory Board elected František Schneider, Director, Business Division, to fill the vacancy. At its meeting in February 2011, the Supervisory Board consented with the re-election of Martin Bek and Jakub Chytil, whose tenure in the Board of Directors was to expire in April 2011. The full list of members of the Board of Directors, including their professional résumés, and the personnel changes in the Board of Directors are given in section Board of Directors.

The decision making procedure at meetings of the Board of Directors is laid down in the Company’s Articles of Association (Articles 16-18); the activities of the Board of Directors observe the Rules of Procedure. Both documents are available on the Company’s website (see also sub-section Transparency and open information policy).

The Supervisory Board held six meeting in 2010, which was in accordance with the Company’s Articles of Association that command a minimum of four meetings during the course of a calendar year. Also this year, the Supervisory Board met regularly once in a quarter (February, April, July, November); additional (extraordinary) Supervisory Board meetings were called as needed (in May and in September prior to the General Meeting). Any personnel changes in the Supervisory Board in the first half of 2010 are detailed in the 2010 Half-year Report; they included the resignation tendered by Anselmo Enriquez Linares, which was discussed by the Supervisory Board at its extraordinary meeting held prior to the General Meeting in May 2010, and the related decision of the shareholders to elect María Eva Castillo Sanz, an Independent member of the Board of Telefónica, S.A., to fill the vacancy after Mr. Linares. At the General Meeting, the shareholders also confirmed the election of Alfonso Alonso Durán, Ángel Vilá Boix, Luis Lada Díaz and Guillermo José Fernandéz Vidal, whose tenures were to expire in June 2010, into the Supervisory Board. In September 2010, due to the death of Enrique Used Aznar, another unfilled position was created in the Supervisory Board, to which the Supervisory Board co-opted Anselmo Enriquez Linares in November 2010. In the same period, the chairmanship of the Supervisory Board also changed; Jaime Smith Basterra was replaced as Chairman of the Supervisory Board by Alfonso Alonso Durán, with María Eva Castillo Sanz elected as 1st Vice-Chairman of the governing body. In February 2011, the Supervisory Board accepted Jaime Smith Basterra’s request for release from the duties of a member of the Supervisory Board and, in a related decision, appointed Vladimír Dlouhý as substitute member of the governing body. The full list of personnel changes in the Supervisory Board in the given period, including its current personnel composition as at 15 March 2011 and professional résumés of all members of this body, is given in section Supervisory Board. The requirement of independence (introduced by the Commission Recommendation 2005/162/EC as regards the regime for the remuneration of listed companies, Annex II), meet two members, María Eva Castillo and Vladimír Dlouhý.

The decision making procedure at meetings of the Supervisory Board is laid down in the Company’s Articles of Association (Articles 22-24); the activities of the Supervisory Board observe the Rules of Procedure. Both documents are available on the Company’s website (see also sub-section Transparency and open information policy).

The Audit Committee (AC) of the Company held four meetings in 2010, which was in accordance with the Company’s Articles of Association for a minimum number of meetings during the course of a calendar year. The practice to call AC meetings on the same date as the regular meetings of the Supervisory Board has proven convenient as it lays foundations for the development of a close information exchange between these two bodies, especially in those areas in which their authority overlaps. The system allows the members of the Supervisory Board to use outcomes and conclusions from the AC meetings as a resource for the discussion of matters on the agenda of the Supervisory Board. The original personnel composition of the AC from 2009 (see the Company’s 2009 Annual Report, sub-section Organisation of Corporate Governance) incurred changes, both by the decision of the Ordinary General Meeting held in May 2010, which recalled Ángel Vilá Boix from this body and elected María Eva Castillo Sanz in his stead, and the death of the AC member Enrique Used Aznar in September 2010 (the open position left by him remained vacant). At the July meeting of the AC, María Eva Castillo Sanz was elected Vice-Chairman of the committee. Section Supervisory Board. gives a full account of all personnel changes in the Audit Committee in the given period, including its present personnel composition as at 15 March 2011 and the professional résumés of all members of this body. The requirements of independence of the audited entity and a minimum experience of three years in the practice of accounting or statutory audit stipulated in the Act on Auditors (Act No. 93/2009 Coll., implementing the Directive 2006/43/EC of the European Parliament and of the Council of 17 May 2006 on statutory audits of annual accounts and consolidated accounts, amending Council Directives 78/660/EEC and 83/349/EEC and repealing the Council Directive 84/253/EEC) have been met by María Eva Castillo Sanz, member of the AC.

The rules for the remuneration of AC members, as well as the rules governing the granting of discretionary benefits to members of governing bodies, which were approved by the Ordinary General Meeting of the Company held in 2009, remained unchanged in 2010. Both documents are available on the Company’s website (see also sub-section Transparency and open information policy). A detailed description of these rules is given in the Company’s 2009 Annual Report (sub-section Organisation of Corporate Governance). In 2010, AC members collected pecuniary income of CZK 2,041,898 and in-kind income equivalent to CZK 1,523,487 from the Company, of which CZK 321,000 was the pecuniary income for their membership in the AC and no in-kind income. The committee members did not receive any pecuniary or in-kind income from entities controlled by Telefónica O2 in 2010. In 2010, all AC members were bound to the Company by an agreement for the discharge of office of a member, which contained a non-competition covenant which applies also for the period after the office is terminated. A detailed description of the non-competition covenant from the agreement on the discharge of office of an AC member is given in the Company’s 2009 Annual Report (sub-section Organisation of Corporate Governance).

The decision making procedure at meetings of the Audit Committee is laid down in the Company’s Articles of Association (Articles 26c-26e); the activities of the Audit Committee observe the Rules of Procedure. Both documents are available on the Company’s website (see also sub-section Transparency and open information policy).

As part of performing internal controls in the area of financial reporting, the Company has implemented the key requirements of the Sarbanes-Oxley Act (SOX), which it is bound to respect – principally as a result of the fact that the shares of the parent Telefónica, S.A. are listed on the US capital markets. Twice a year the Company performs an evaluation of its internal controls in the area of financial reporting in the scope of the regulatory framework introduced by SOX Section 404, including an evaluation of the controlling mechanism in the area of the Company’s information systems that could have a potential impact on the financial statements. The audits verify the standard of the description, configuration and form of walkthrough tests and compliance tests of transactions, as well as the effectiveness of controlling mechanisms in the area of financial reporting. The audit results are discussed with the external auditor of the Company.

The audits performed in 2010 concluded that the internal controls, as applied, were of a standard which meets the SOX requirements. The quarterly declaration of the management (Chief Executive Officer and Director, Finance Division) attesting to the veracity of the information contained in the financial statements, implementation and application of effective controls, and other matters required by SOX Section 302 (including the information about any changes in the Company’s accounting policy, one-off/extraordinary or material items having an impact on the Company’s results for the quarter in question, and the overview of material reserves created by the Company in order to cover for its contingent risks and liabilities – e.g. from litigation) form an integral part of the SOX compliance procedures in the general area of Corporate Governance. The above documents are presented internally to the Board of Directors and to the Audit Committee for review and discussion.

In 2010, the internal audit and risk management function in the Company continued to be developed; the organisation of these functions (which are consolidated into one organisation unit), the line management of the Chief Executive Officer and the functional subordination of Internal Audit (in accordance with the International Standards for the Professional Practice of Internal Auditing) to the Audit Committee and the Board of Directors remained as before.

Internal Audit represents an important instrument of Corporate Governance and it provides the Company’s governing and executive bodies with independent and professional assessment of the Company’s internal control system and the situation and trends in the given area compared to current best practice, the rules and regulations in force, and work orders and instructions issued. In 2010, Internal Audit & Risk Management carried out 42 audits and controls (including the regular audit of internal controls required by SOX 404) as per the annual plan of Internal Audit or as mandated by the governing bodies and the Chief Executive Officer. In addition to performing audits and controls in Telefónica O2, the Internal Audit unit also acts as internal auditor of Telefónica O2 Slovakia and other subsidiary companies in the group of Telefónica O2 Czech Republic. The audit conclusions were used by the management to formulate actions to redress the issues identified.

Internal Audit monitors the implementation of such actions and reports to the governing bodies and the executive management. The activities of Internal Audit and its main processes are laid down in the Internal Audit Charter of Telefónica O2, which also stipulates the principle of independence of the Internal Audit function and the principle of objectiveness of internal auditors. The work of Internal Audit is monitored on a regular basis by the Audit Committee which discusses audit reports and other reporting presented by Internal Audit. The Statute of Internal Audit stipulates the Audit Committee’s participation in the preparation and approval of the annual plan of internal audits; the Audit Committee also approves the annual budget of Internal Audit and its annual performance evaluation. The director of Internal Audit & Risk Management has full access to the Audit Committee and is present for the discussion of audit reports and other outputs of Internal Audit & Risk Management at meetings of the governing bodies of the Company.

In 2010, the Company continued in the development of its risk management function and in its harmonisation with the methodology and practice in the global Telefónica Group, which creates more space for the sharing of experience and knowledge in the area of mitigation of specific risks with the parent company and other members of the Group. The risk management system covers all areas of operations of Telefónica O2, including its subsidiary Telefónica O2 Slovakia, and provides for the identification, assessment, mitigation of their impacts and further monitoring of their development. The Board of Directors and the Supervisory Board receive regular monthly reports containing information about key risks and their development over time. The Audit Committee is concerned with the risk management primarily from the point of assessing its effectiveness and adequacy (whether the key risks of the Company are adequately identified and managed); to this end, the committee receives regular reports from the Risk Management Unit of Telefónica O2 Czech Republic Group, and information about the methods used, the processes of risk management, etc. Members of the said bodies have equal and full access to the risk management reports and the risk register of Telefónica O2 and its subsidiary Telefónica O2 Slovakia.More information about risk management is given in sub-section Risk management of the Annual Report.

An electronic platform, the so-called CG Portal, is operated and continually developed in Telefónica O2 Czech Republic. It supports the exercise of powers of all governing bodies and provides for efficient administration of Corporate Governance in Telefónica O2 Czech Republic Group. The portal is available on the Company’s intranet and also remotely to users with the access privileges. This tool performs several functions; the key ones include the function for convening meetings (including the distribution of resource documents), dissemination of the latest information and regular reporting to members of governing bodies and committees between meetings. Last but not least, the CG Portal serves as a digital archive for all documents in the area of corporate governance. The portal is bi-lingual (in Czech and English), and the majority of documents in the field of corporate governance is systematically published in both languages.. The instrument confers equal access to archived and current documents and information to all members (executive and non-executive) of the relevant governing bodies, irrespective of any local or time limitations. In addition to the minutes of meetings, the system also stores internal audit reports and risk reports, information about the Telefónica O2 Czech Republic Group and its subsidiaries, etc. The portal is currently used also as a platform for supporting and administrating other activities in the general sphere of corporate governance. It is mainly the agenda of the Business Principles (including the operation of a confidential whistle-blowing channel for reporting of suspected ethical malpractices) .The results achieved in this area in 2010 are recapitulated in sub-section Business Principles.

For the sake of expedient and effective acquaintance with the Company, new members of the Board of Directors, Audit Committee, the Supervisory Board and its committees have, already upon assuming their function, a special set of comprehensive and structured Corporate Governance information and documents available to them, as well as having access to all other current and archived documents which they may require for the due discharge of their function. The information is disseminated via the CG Portal.

Telefónica O2 has a position of Company Secretary is at the executive level in the new Corporate Governance Model of Telefónica O2 formally combined with that of General Counsel (Director, Legal & Regulatory Affairs).

Shareholder relations

A strict compliance with all the statutory rights of shareholders, commitment to the principle of equal treatment of all shareholders of a similar standing, while respecting the specific statutory rights of minority shareholders belong among the key guiding principles of Corporate Governance of Telefónica O2. The majority shareholder of Telefónica O2, which is Telefónica, S.A. (see sub-section Company policy towards stakeholders), exercises its rights in Telefónica O2 through its voting rights at the Company’s General Meetings.

The Company is scrupulous about the timely and full information to all shareholders about the developments in the Company, its financial results and business plans; in doing so, the Company has always strived and managed to exceed the scope of minimum statutory disclosure. The Company uses it website as the main platform for communication (section About Us). The Company publishes regular press releases with the quarterly financial results and announces all significant events and developments.

When organising General Meetings, the Company proceeds in a way that guarantees the compliance with all the statutory conditions and with the Company’s Articles of Association, whilst observing to the maximum extent possible the requirements of the Code which concern the rights of shareholders and their fair treatment. The Company publishes the date of the General Meeting sufficiently in advance on its website; the date, time and location of the General Meeting are chosen on the merit of ready access and availability. The Rules of Procedure of the General Meeting are approved at each meeting of the governing body. The text of the Rules of Procedure has not changed in several years; during this time, the shareholders have not made any motions to amend the Rules of Procedure. The Rules of Procedure allow shareholders to participate effectively in decision-making on fundamental changes in the Company and to ask questions and seek information on matters included on the agenda of the General Meeting. The Rules of Procedure of the General Meeting contains the following main provisions:

— Shareholders can exercise their rights at the General Meeting either in person or by proxy; they can vote on the proposed items on the agenda, receive, in accordance with the Commercial Code, explanations in matters relating to the Company, or any undertakings controlled by it, as the case may be, provided the explanation is necessary for understanding the matter addressed by the General Meeting, and they also have the right in accordance with the Commercial Code to raise proposals an counterproposals. Shareholders may lodge a protest against a decision of the General Meeting and demand that it be recorded in the Minutes of the General Meeting.

— As a rule, any requests for explanation, proposals, counterproposals and protests are made by shareholders usually in writing, and filed with the information centre. Upon making the motion it must be specified whether it is a request for explanation, proposal, counterproposal or a protest. Any requests for explanation, proposals, counterproposals and protests submitted in writing must be legibly undersigned by the shareholder in question or their proxy.

— In keeping with the Commercial Code and the Company’s Articles of Association, the Board of Directors is obliged to provide an explanation upon request, in matters concerning the agenda of the General Meeting.

— At the General Meeting, a proposal by convener of the General Meeting is subjected to a vote first; if it is not passed, other proposals and counterproposals relating to the point in question are voted on, in the order in which they were submitted. As soon as a motion is passed, other counterproposals are not subjected to a vote. The Chairperson of the General Meeting is obliged to ensure that, prior to voting at the General Meeting, the shareholders are informed of all proposals and counterproposals made by shareholders in relation to the item of the agenda of the General Meeting which is put to a vote.

During both General Meetings of the Company held in 2010, the shareholders had all the necessary documents in print form, in two languages (Czech and English). All the documents for the General Meeting and other relevant documents (e.g. the Company’s Articles of Association) were available to the shareholders also at the information centre which the Company operates for its shareholders at every General Meeting. Each point on the agenda was voted on separately, after the discussion on that point had been concluded. In addition to members of the Board of Directors, the Audit Committee and of the Supervisory Board (its committees), the representatives of the Statutory Auditor were also available to take questions from shareholders throughout the General Meeting. A public notary was present for the whole duration of the General Meeting.

All motions (questions, requests for explanation, counterproposals and proposals) made by shareholders during the Ordinary General Meeting of 7 May 2010 (twenty three in total) and during the Extraordinary General Meeting of 10 September 2010 (one in total) were adequately addressed by the members of the Board of Directors and subsequently they were, together with the answers, recorded in the Minutes of the General Meeting. Shareholders did not raise any questions to the Audit Committe or Supervisory Board members, the chairpersons of the Supervisory Board committees and to representatives of the Statutory Auditor.

Transparency and open information policy

Telefónica O2 scrupulously and diligently complies with all national and community laws and the principles of the Code. In line with its mandatory duties and voluntary commitments, Telefónica O2 continually and pro-actively provides shareholders and investors with all vital information on its business, financial standing, ownership structure and governance issues. Furthermore, the Company is very scrupulous in seeing that all price-sensitive information and facts are disclosed in a full and timely manner. The Company also publishes various information beyond the scope of the disclosure duties on its website, and intends to continue its open information policy toward shareholders. The Company strives to provide the shareholders and investors with everything they may need for making qualified decisions regarding the ownership of the Company stock, and in voting at General Meetings. To this end, the Company uses various information channels and instruments, which, in 2010 included print media (Commercial Bulletin, the business daily Hospodářské noviny, annual and half-year reports, etc.), but more importantly the means of electronic communications, especially the Company website. The website (particularly the section About Us) provides investors and shareholders with all corporate documents and various information about the Company in the Czech and English languages. The Company regards the electronic platform for disseminating information as key, especially since many of its shareholders are foreign legal and natural persons; the website facilitates access to information about the Company, especially for the international institutional investors and for small shareholders. This in turn improves their opportunities for their active, effective and valid participation in the decisions relating to the matters of the Company.

The policy of transparency dictatesabout the remuneration of members of the Board of Directors and the Supervisory Board of the Company (and of the Supervisory Board committees). This matter is addressed in detail in section Rules for the remuneration of persons with executive powers in the issuer, which describes and explains the principles of the system for the remuneration of members of the Board of Directors and the Supervisory Board , and iterates other emoluments provided by the Company to these persons (a similar information concerning the members of the Audit Committee is disclosed in sub-section Organisation of Corporate Governance). The subsequent section (Other information relating to persons with executive powers) gives an account of benefits claimed in the past period (in the case of AC members, the information is given in sub-section Organisation of Corporate Governance). The Company’s website contains the current and previous versions of documents in this area (Rules for the Remuneration of Members of the Board of Directors, Rules for the Remuneration of Members of the Supervisory Board, Rules for the Remuneration of Members of the Audit Committee, Rules for Provision of Non-Claim Perquisites to Supervisory Board Members,Rules for Provision of Non-Claim Perquisites to Audit Committee Members).

In line with its Business Principles, Telefónica O2 practices zero tolerance of conflicts of interest. The procedures for the consideration and decisions in the governing bodies are aligned in a way that prevents members of the governing bodies from voting on matters which could compromise their impartiality (affiliated transactions). Potential conflicts of interests stemming from membership in the governing bodies of other companies, involvement in commercial transactions and other defined situations are subject to a regular review by the Ethics and Corporate Social Responsibility Committee (see sub-section Committees established by the governing bodies of the Company below).

The Company is scrupulous about the prevention of insider trading for unlawful personal enrichment in trading in the Company’s shares; in this respect, it is compliant with the applicable community and Czech laws, as well as with the rules adopted by the UK Financial Services Authority. The Company has adopted a strict internal policy, which sets the limits for the disposal of shares issued by the Company or by undertakings that it controls. Telefónica O2 keeps a regularly updated list of persons who would qualify as insiders in possession of such information.

Committees established by the governing bodies of the Company

The Supervisory Board committees have been an integral part of the Company’s system of Corporate Governance since 1996 and continue to play a major role in discharging the powers of the Supervisory Board. In the definition of the remit and role of the committees, the Company observes the Code and the Commission Recommendation 2005/162/EC on the role of the Supervisory Board committees of listed companies, which was amended by Recommendation 2009/38/EC from April 2009. Basic information about the committees established by the Supervisory Board is given in section Governing bodies.

The decision making procedure at meetings of the committees of the Supervisory Board is laid down in the Company’s Articles of Association (Article 26); the activities of the committees observe the Rules of Procedure. All documents are available on the Company’s website (see also sub-section Transparency and open information policy).

The Nomination and Remuneration Committee (NRC) has five members and is, as per the Company’s Articles of Association, a mandatory committee of the Supervisory Board. The committee reviews in particular all matters relating to personnel changes in the Board of Directors, the Audit Commitee, the Supervisory Board and the Supervisory Board committees. The committee also gives a standpoint on any nomination proposals for vacancies in the governing bodies of members of the Telefónica O2 Czech Republic Group. The NRC’s remit extends to reviewing the remuneration and other benefits granted to members of the Board of Directors, the Audit Committee and the Supervisory Board. The committee continually monitors and assesses the performance of members of the Board of Directors, the Audit Committee the Supervisory Board and its committees; in this respect, the NRC also it also assesses the need for and promotes further education of members of the governing bodies, in particular in professional disciplines and languages. The committee held three meetings in 2010. As at the end of the year, the committee had the following members: Jaime Smith Basterra, Chairman; Alfonso Alonso Durán, Vice-Chairman; Luis Lada Díaz, Guillermo José Fernández Vidal and María Eva Castillo Sanz, members. Jaime Smith Basterra left the NRC as a consequence of his resignation from the membership in the Supervisory Board in February 2011, and Anselmo Enriquez Linares was elected in his stead.

The Ethics and Corporate Social Responsibility Committee (ECSRC) is a voluntary committee of the Supervisory Board with six members, whilst observing the rule that a half of the ECSRC’s members are always Supervisory Board members elected by the employees, and the other half Supervisory Board members elected by the General Meeting. Every year, the committee addresses the issue of a potential conflict of interest; members of the Board of Directors, the Audit Committee, the Supervisory Board, Company’s executive management and members of the governing bodies in subsidiary companies are examined in this respect. The ECSRC regularly monitors compliance with the Company’s Business Principles, and the functioning of the confidential help facilities, and it is regularly informed about the activities undertaken as part of the Compliance Programme for the prevention of the risks of unethical conduct. Another primary area of interest for the ECSRC is the promotion of Corporate Social Responsibility. The committee held two meetings in 2010. The personnel composition of ECSRC did not change during 2010. As at the end of 2010, the ECSRC had the following members: Pavel Herštík, Chairman; Dušan Stareček, Vice Chairman; Jaime Smith Basterra, Tomáš Firbach, Luis Lada Díaz and Guillermo José Fernández Vidal, members. María Eva Castillo Sanz was elected to the committee in February 2011 to fill a vacancy left after the resignation of Jaime Smith Basterra from the Supervisory Board.

Company policy towards stakeholders

Telefónica O2 values Corporate Social Responsibility (CSR) as an integral part of its operations and business. Given the scope and volume of the Company’s CSR initiatives, the Annual Report now contains a separate section (6) dedicated to Corporate Social Responsibility.