SOCIAL REPORT 2007
Content
Introduction 5
1. Foreword by the Chairman 8
2. General Information on OAO AK BARS BANK 12 Geography of OAO AK BARS BANK 13
3. Corporate Management Structure 16
4. OAO AK BARS BANK in its Development 20 Corporate Social Responsibility 20 Social and Labor Policy 22 Staff Policy and Characteristics 22 Guarantee of the Employees’ Labor Rights 24 Staff Training and Advanced Training 25 Social and Labor Protection 28 Corporate Culture 32
5. Charity 36 Participation of the Bank in Protection and Support of Children and Young People 38 Participation in Intellectual and Spiritual Life 40 Support by the Bank of Socially-disadvantaged People 42 Health Improvement 44 The Bank’s Contribution to Environment Protection 46
Conclusion 47
SOCIAL REPORT
Introduction
AK BARS Joint-Stock Commercial Bank (Open Joint- Stock Company) presents a social report. This is the first edition of its kind. Its purpose is to inform the interested parties of the principles, objectives, practical results and perspectives of the corporate social policy and charitable activities of AK BARS Bank.
The present document corresponds to the policy of international commercial companies, which actively cooperate with their shareholders, investors, clients, employees, state authorities and the general public. As the social reporting in AK BARS Bank is currently in the stage of development, we present only the most significant results of the Bank’s activities in 2005-2007. The social report of the Bank contains consolidated information regarding the corporate social and charity policies of the Bank. This work will be ongoing and developed.
SOCIAL REPORT 5 «OJSC AK BARS Bank is focused on formation of favorable environment around its points of presence, and this is one of the most crucial instruments of tne Bank's participation in the life of the society». 1 1Foreword by the Chairman Foreword by the Chairman
Dear friends!
Any company goes through certain stages in its development. At the stage of creation and development, objectives and principles are set up, the potential is growing. As goals are achieved, new and more ambitious goals appear, the horizons broaden and new opportunities emerge.
Today AK BARS Bank is a major corporation with five thousand employees. The Bank is working in many regions of the Russian Federation and impacts the social and economic processes in and outside the Republic of Tatarstan.
The activities of the Bank are closely connected with the interests and needs of modern Russian society. It’s intended to enhance the level of life and create comfortable living conditions. One of the AK BARS Bank’s objectives is to create favorable social conditions for its employees, which is one of the main tools of the Bank’s participation in the social life of the country.
We at AK BARS Bank realize that a successful business cannot and should not be restricted only to the business sphere, financial criteria and brand popularity. Obviously, there is also a question of social responsibility, which in our understanding is not restricted only to excellent performance and payment of taxes.
8 Within AK BARS Bank social responsibility means responsibility to our employees, steady improvement of the corporate management and providing for the most important needs of the Bank’s staff. Outside the Bank this includes social activities, charity and sponsorship, which form an integral part of the Bank’s activities, and financial aid to those who really need it. AK BARS Bank is also concerned with environment protection. The Bank is a constant participant in environmental projects for protection and preservation of fauna and the restoration and development of the ecosystems in the regions.
The idea of a social report is based on the necessity for voluntary collective action, which will lead us to a new level of civil responsibility. In other words, the commercial sector in cooperation with social structures helps to create business with a “human face”. This is one of the Bank’s visions. That’s why social and charitable activities are one of the most important objectives, which reflects that the Bank is ready to assume long- term social responsibility.
Chairman of the Board of Directors, OAO AK BARS BANK R.R.Musin, Chairman of the Management, OAO AK BARS BANK R.Kh. Minnegaliev
SOCIAL REPORT 9 OJSC AK BARS Bank has been operating in the Russian financial market since 1993. Over this period the Bank has been recording stable growth of its basic financial indicators and has proven that the selected development strategy and business principles of its activity are sound. The Bank has been operating in 24 subjects of the Russian Federation, and as of 01.01.2008. its branch net accounts for 37 branches, 114 outlets, 131 operational stand alone cash desks, 1 subsidiary bank with 8 branches. 2 General Information on General2 Information on OAO AK BARS OAO AK BARS BANK BANK
OAO AK BARS BANK has been working in the Russian Corporate business is one of the priorities in the Bank's financial market since 1993. The Bank has shown a development. The volume of the legal entities credit stable financial growth and has proven that its selected portfolio as of January 1st, 2008 comprised 93.1 billion strategy and business principles are sound. rubles. The Bank has a wide experience in providing services to the leading companies in the region and Currently the Bank's share is 38.9% and 58.3% of the participates in projects vital to the Tatarstan economy. capital of all the banks in the Republic of Tatarstan. In the rating of the Russian Federation Banks as of October Retail banking is also an important sector of the 1st, 2007, OAO AK BARS BANK is 14th according banking services with great potential. The retail banking to its equity and 20th – according to its assets. The services include credits, deposits, money transfers, authorized capital of the Bank as of January 1st, 2008 payments, currency exchange, safety deposit boxes, comprised 19.2 billion rubles and its assets – 156 transactions with precious metals and over 50 types billion rubles. of other services. The volume of the credit portfolio of individuals as of January 1st, 2008 comprised Recently the Bank has been actively attempting to 19.5 billion rubles. The amount of attracted funds is establish itself as a major bank on the federal level 91.165 billion rubles. and has been expanding in the regions of the Russian Federation. The network of the Bank as of January 1st, The Bank is also increasing its presence in the stock 2008 consists of 37 branches, 113 additional offices, market. In 2007 the Bank issued its own bonds for 250 131 operating cash desks and 1 subsidiary bank with million US dollars. Moreover, credits of international 8 branches. AK BARS Bank is working in 24 regions of financial establishments for 100 million US dollars the Russian Federation and is intending to continue were received by the Bank. covering regional markets. The activities of subsidiary companies and structures AK BARS Bank is a universal bank and is equally under AK BARS brand name have contributed to the developing its corporate, retail and investment sectors. Bank’s success.
12 Geography of OAO AK BARS BANK (map of the Bank's branches)
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SOCIAL REPORT 13 For complying with the world standards and increasing the efficiency of its economic and social activity AK BARS Bank is working on improving its corporate governance system. 3 3Corporate Management Structure Corporate Management Structure
To comply with the world standards and increase the for achieving the Bank’s objectives and approved a efficiency of the economic and social activities, in 2007 number of documents regulating the activities of the the Bank continued improvement of the corporate Bank, including: management system. Particular attention has been paid • Code of Ethics of the Bank, which stipulates the to improving the corporate procedures and inner legal key principles and rules of corporate behavior and framework, inner control system, risk management, business ethics; and transparency of the Bank’s activities. • Regulation on avoidance of conflict of interests for protection of the interests of the Bank’s The Board of Directors plays the key role regarding shareholders and clients and determining the the strategy and improvement of the corporate Bank’s policy for avoidance of interest conflicts; management of the Bank. • Regulations on transactions with the parties In 2007 the Annual General Meeting of Shareholders connected with the Bank, developed for elected 11 new members of the Board of Directors. enhancement of the risk control and regulating In view of objectivity of resolutions and balance of transactions with the connected parties; interests, 3 independent directors were introduced to • Regulation on the dividend policy establishing the the Board of Directors. These are Ruben Karlenovich procedure of calculation and payment of dividends Vardanyan (Chairman of the Board of Directors of Troyka by the Bank; Dialogue Group of Companies), Andrey Vladimirovich • Regulation on holding tender for an auditing Vernikov (Professor, State University – Higher School company for mandatory annual audit of the Bank of Economy), Sarah Carry (Senior Partner, Squire, regulating the procedure of such tender. Sanders& Dempsey L.L.P., Washington), Yuriy Lvovich Moreover, the plan for improvement of the corporate Levin (Managing Director, Member of the Board of management system provides for approval in the first Directors of B.V. Murray&Co., Inc), Sergey Viktorovich half of 2008 by the Board of Directors of the Corporate Shibaev (Chairman of the Board of Directors of Kafa Management Code, a set of rules for a higher level of Capital, Toronto, Canada). management activities and control, business culture For development of the corporate management and ethic rules. system, in 2007 the Board of Directors adopted a plan
16 In 2007 the earlier established Committees of the Board of Directors continued their work. These Committees are consultative and advisory bodies which deal with detailed development of the most important issues for the Bank's success. The Committees cooperate with the managing and control bodies of the Bank as well as its auditors and develop professional recommendations for the Board of Directors. The following Committees of the Board of Directors are functioning in the Bank: on strategy, audit, risks, staff and remuneration.
SOCIAL REPORT 17 AK BARS Bank is dynamically developing company, which realizes the importance of creating its own traditions. For creating positive environment and favorable atmosphere the Bank arranges events aimed at formation of the staff commitment to the goals of the Bank. 4 OAO4 AK BARS BANK in its Development Corporate Social Responsibility
Corporate social responsibility in the modern meaning segment and middle class as its target retail segment. of this term is a voluntary contribution of business to The Bank is constantly developing new products and social, economic and ecological spheres of society, programs for these target groups. The Bank's services which is directly connected with the principal activities are intended for the clients, the principal objectives of the company and is outside the minimum established of which are to minimize the time and expenses for by the current laws. their activities with the Bank, get the most convenient services and spend more time with their families. The goals of AK BARS Bank’s corporate social Such clients have high expectations in relation to the responsibility are the promotion of social progress, banking system and the Bank is striving to meet these the enhancement of life quality, the stable social and expectations. economic development of the regions with the Bank’s presence through improvement of the quality of the The nature of AK BARS Bank's client services shall provided services, corporate social responsibility and be more individualized and specialized than in other responsibility for society as a whole. financial institutions, which base their services on mass standardized technologies. AK BARS Bank is trying to The responsibility for the quality of services is closely make its services as easy for the clients as shopping in related to the clients’ needs. AK BARS Bank is striving a supermarket, but with a higher level of comfort. Client to be a leading bank in meeting its clients’ demands. In service is one the Bank's key priorities. practice this resulted in approval of special documents: standards for “Services and provision of information Inner corporate social responsibility means on retail products of OAO AK BARS BANK”, “Services responsibility for the Bank’s staff, including creation of and provision of information to the clients through a favorable climate to enhance team spirit and provide telephone and Internet-resources by the Calling possibilities for career growth. Centre”, Decree on the general requirements for the business ethics of OAO AK BARS Bank’s staff, which Corporate social responsibility is not a new contain the general principles of client servicing, staff phenomenon for AK BARS Bank. It has been constantly etiquette and communication standards. improving over the years. Procedures for interaction with the staff, local communities and state authorities The Bank has defined its priority client niche – small in the regions have been developed. The system of and medium size enterprises as its target corporate social investment distribution has been enhanced. The
20 control mechanism of such procedures efficiency is being implemented.
AK BARS Bank firmly believes that social responsibility cannot be just an addition to business. Social responsibility is an integral part of any business.
SOCIAL REPORT 21 OAO4 AK BARS BANK in its Development Social and Labor Policy
Staff Policy and Characteristics Gender composition of the staff The official number of AK BARS Bank’s staff as of January 1st, 2008 comprised 4,926 people. The 29% MALE gender and age composition of the staff is as follows: over 70% of the Bank’s staff are women. The average age of the Bank's employees is 30 years and young people represent about 40% of the staff.
The staff of the Bank's Head office consists of over 71% FEMALE 1,200 people.
The Bank is a huge social mechanism with its inner laws, rules of interaction and perspectives. In achieving Age of the Staff
its professional objectives the Bank relies on qualified 2500
employees, which are not only capable of executing 2000 decisions, but are also actively participating in their 1500 development. Dynamic and creative approaches by 1000 employees are an important condition for the Bank's 500
growth and development. Thus, the staff policy of Number of employees 0 OAO AK BARS BANK is aimed at creating conditions Up to 29 From 30 From 40 From 50 From 60 years Age years to 39 years to 49 years to 59 years and older for enhancing employees’ creativity through favorable remuneration and social benefits. In September 2006 the Committee of Directors of the Bank approved the regulation «Staff Policy of OAO AK BARS BANK», which • Organization Development Department; stipulates the procedure of staff management and • Human Resources Department; basic priorities of the Bank’s staff policy. • Department of Staff Recruitment and Training. The dynamics of the staff growth in 2005-2007 In view of the Bank’s staff and social policy realization, illustrates the rate of the Bank’s growth and its the staff is managed by three departments under general expansion in the regions. Within two years the number management of the Human Resources Director: of the Bank’s staff increased by over 47%.
22 Number of Staff in Categories in 2007 Number of Staff The analysis of the Bank’s staff in various departments 6000 5000 has shown that the major part of the Bank’s employees 4000 are banking experts. The share of supporting staff is 3000 2000 38%. As an example, in developed banks the share of 1000 such employees comprises on average 37%. 0 2005 2006 2007
For improvement of the staff policy, the Bank is widely using advanced technologies and international experience of human resources management. In 2007 Personnel Structure AK BARS Bank started the process of development Supporting staff 38% and implementation of a number of staff policies and procedures for regulation of numerous processes in Experts 46% this sphere, creation of conditions for the staff potential Managers 15% strengthening and realization of the current and Top managers 1% strategic development plans. The human resources 0% 10% 20% 30% 40% 50% management policy concerning the planning of human resources need and their selection has been modified. The staff management policy is intended for the most efficient use of the Bank's staff potential, which in the long-term shall form an integrated corporate environment bringing together the interest of the Bank with those of its employees and providing for understanding by the staff of the Bank's goals and objectives as well as contribute to the corporate culture development.
The draft of the Staff strategy of the Bank is currently in the stage of approval. It includes staff procedures, a concept and procedures for remuneration and benefits.
SOCIAL REPORT 23 OAO4 AK BARS BANK Guarantee of the Employees’ Labor in its Development Rights
Compliance with the labor rights prescribed by Russian The Board of the Bank serves as a guarantor for equal law and international legal regulations is an integral part opportunities. If necessary the employees of the Bank of AK BARS Bank's social policy. The Bank regulates its may refer to the management, human resources and activities in compliance with the principles proclaimed legal department in relation to any issues. by the UN Declaration of Human Rights, the Labor Code of the Russian Federation and collective agreements. Each employee of the Bank is entitled for an annual paid The Bank has approved the Regulation on the business leave. Female employees of the Bank get maternity and etiquette for OAO AK BARS BANK employees, which child-care leaves. The Bank does not permit mandatory states the rules of interaction between the Bank and overtime work for its employees. Being hired, any its employees. employee is informed of the work schedule, for the contract may provide for irregular working hours or shift The staff of AK BARS Bank consists of men and labor. The employees of the Bank receive remuneration women of different nationalities, ages and educational or compensatory leaves for overtime in compliance with backgrounds. However, upon staff selection the only the Labor Code of the Russian Federation. criteria taken into account are professional qualities and a willingness to share the Bank' values. Each The Bank strictly complies with the Russian laws in employee is provided with equal opportunities for relation to child labor and Convention No.138 of the realization of his/her creative potential at all stages International Labor Organization, according to which the of career development. The Bank complies with minimum age of employment cannot be less than the all legal acts (both laws of the Russian Federation age of obligatory schooling completion. and international documents) providing for equal opportunities and eliminating discrimination towards any staff members.
The Bank’s employees of different ages successfully realize their potential. Some of them have over 10 years experience. Thus, Chief Accountant of OAO AK BARS BANK A.K. Bayazitov has been working in the Bank since the day of its establishment.
24 Staff Training and Advanced Training
The Bank is trying to achieve the optimum conditions The priority in staff training is the organization and for staff development and maximum realization of holding of trainings for development of management their intellectual and professional potential. The funds and corporate competence in compliance with the used for training and advanced training of the Bank’s established model of the Bank. employees are considered necessary and reasonable investments. The Bank’s employees participated in 113 seminars, 54 courses, 37 conferences, 8 forums and 25 trainings. AK BARS Bank has established the system of staff training corresponding to its objectives. It promotes AK BARS Bank does not only cooperate with various development of professional skills, increase in labor educational establishments and business schools, but productivity and understanding of the corporate goals it has also established its own Training Centre, which by the employees. The advanced training also includes organizes and holds trainings for the employees of the courses in modern technologies and specialized head office and branches of the Bank. courses. The training system of the Bank covers all employees, including the management. In 2007 the Bank implemented the distance learning system. The transfer of most seminars and courses to The training is effected in compliance with the plans the distance basis system allowed for increase in the providing for complex and balance coverage of current number of trained staff without interruption of their and future objectives. In 2007 expenses for the Bank’s work as well as reduction of expenses on staff training staff training comprised 13,757,692 rubles, which with the same quality. included: ДThe Bank is constantly developing its distant learning Seminars and advanced training 71,1% system by increasing the number of courses and Conferences 15,3% establishing an integrated distance training system – a Forums 3,3% corporate university. The main objective of this system Trainings 10,3% is advanced training of the Bank’s employees with The total number of trained staff is 753 employees. the use of advanced information technologies. At the educational web-portal employees can find electronic courses and tests as well as professional polls. It provides for the Bank’s employees in other regions
SOCIAL REPORT 25 OAO4 AK BARS BANK in its Development Staff Training and Advanced Training
access to useful educational materials to be used them In the remuneration system development the Bank for self-development. The distance learning system is governs its activities on the basis of justice and widely used for staff professional testing. competitive advantages. The Bank is approaching labor remuneration and its timely payment with a Within the front-office training of the Bank, 24 trainings great responsibility. Therefore, a number of regulatory “Effective Communication with Clients” were held with documents were passed in the Bank, including 204 participants. “Regulation on bonus payments to OAO AK BARS Bank’s employees according to the results of monthly work” One of the trends within the staff training system and “Regulation on bonus payments to OAO AK BARS is advanced and management skills training of the BANK employees according to key efficiency criteria”. Bank’s management. Five managers of the Bank are currently enrolled in the MBA program. 748 top and In view of improvement of labor remuneration system, middle-class managers of the Bank participated in 76 the Human Resources Department of OAO AK BARS trainings in “Operational Management”, “Competence BANK has developed and is implementing a system Evaluation”, etc. of staff efficiency management, including bonus payments to the Bank’s management according to the All innovations (implemented and planned) have the key efficiency criteria and general system of planning same objective – to increase the interest of the Bank’s and evaluation of achievements (attestation), which employees in the results of their work, motivate them for consists of the staff efficiency evaluation by the the work process optimization and create a climate of objective management method and evaluation of their mutually beneficial cooperation and career progress. competence.
The policy in labor remuneration has an important The system of bonus payments according to the impact on the staff motivation and competitive key efficiency criteria is an innovation in the labor advantages of the company in the labor market. AK remuneration system. The key efficiency criteria BARS Bank is implementing a system approach taking influence the bonus amount paid to the employees into account the business strategy of the Company and according to the quality of their work. The objectives of objective market conditions. The current remuneration this innovation include in particular: and bonus system in the Bank is aimed at stimulating • rational balance of salaries for employees in various work efficiency and achieving estimated targets. positions;
26 • increase of the employees’ interest in the results of The structure of the remuneration package their work; • competitive salary corresponding to the changing 39% 2% PREMIUMS market conditions. SOCIAL AND PACKAGE BONUSES The system will cover all corporate levels and branches of the Bank. 59% SALARY
SOCIAL REPORT 27 OAO4 AK BARS BANK in its Development Social and Labor Protection
In view of development of the integrated social policy The Regulation describes in detail the procedure of and enhancement of the employees’ social protection, such guaranteed provisions and the opportunities the Regulation on Social Support of OAO AK BARS available to the Bank’s staff. BANK employees’ has been effective in the Bank since 2003. The compliance with this regulation is achieved The major share of payments falls for social payments. through the activities of three funds: In 2007 the Bank paid 7.5 mln. rubles as welfare • Social Protection Fund; assistance to people celebrating jubilees, birth of • Incentive Compensation Fund; children, weddings, child care and extraordinary • Corporate Development Fund. events.
The expenses of the above-mentioned Funds in The health care for the employees of the Bank and their 2005–2007 comprised over 121 million rubles. families is also an important part of the Bank’s policy. In The Regulation on Social Support defines the principal 2007 the Bank spent 2 million rubles on health care. types of social guarantees for the Bank’s employees, including: • incentive payments; • heath care; • sport, physical development and health improvement, vacation; • living conditions improvement; • non-state pension coverage; • guaranteed social payments; • compensation package.
28 Labor Protection The medical examination of the Bank’s employees is carried out not only by general practitioners but also by Labor safety and health protection for the employees is specialized doctors (mammologists, manual therapists, certainly one of the Bank’s priorities. In 2007 expenses ultrasonic examination experts, etc.). in this sphere comprised over 7 million rubles. Labor safety in the Bank is provided through the following: According to the medical examination results, the • sanitary, therapeutic and organizational Bank’s employees may be eligible for treatment at arrangements; health resorts at the expense of the Bank. The expenses • training of the staff in safety regulations and labor of the Bank on voluntary medical insurance provided protection; by SK AK BARS Med comprised over 12 million rubles. • daily monitoring; In case of medical contra-indications, employees may • individual and collective protective equipment. be transferred to any positions without the influence of harmful factors. As a preemptive measure against Individual Protective Equipment for the Staff flue, vaccinations are given to the Bank’s employees annually. The experience shows that this significantly The Bank’s employees are provided in due time with reduces the flue cases among the Bank’s staff. In 2007 the necessary individual and collective protective the expenses on health improvement of the employees’ equipment, special clothes and footwear in compliance children comprised 2 million rubles, including 1 million with the time of their activities. Air ionizers are installed rubles for stays in health improvement camps and 1 in the areas where there is a lot of office equipment. million rubles as a compensation of a part of Mother and Child program cost. Therapeutic and Preventive Measures
The Bank regularly takes therapeutic and preventive measures prescribed by the Russian laws and recom- mended by medical and preventive treatment estab- lishments. Every staff member has a medical exami- nation upon employment. The Bank arranges regular medical examinations for its employees. Thus, in 2007 over 3,000 staff member had a medical examination.
SOCIAL REPORT 29 OAO4 AK BARS BANK in its Development Labor Protection
Safety and Labor Protection Monitoring According to the Federal Law “On radiation safety of population” and requirements of the Central Bank of The Committee for Labor Protection has been established the RF, the operational cash desks and safety deposits with representatives of management and employees of the Banks are equipped with devices for radiation on parity basis. Its objectives include development of control of banknotes, which are included in the state the program for prevention of occupational traumatism register of measuring instruments. The premises for and diseases. The Committee considers suggestions temporary storage of cash assets are also examined. for organizational, technical, sanitary and preventive measures and their introduction in the annual plan The records of all occupational accidents are kept for labor protection and improvement of working by the Bank. Each case is carefully investigated and conditions. registered in the accident register in each of the Bank’s branches. When the accident investigation Particular attention is paid in the Bank to workplace is completed, measures for avoiding of its repeated arrangement. The testing laboratory of the Bank occurrence are developed. The statistics shows a regularly measures harmful factors at workplaces. stable decline in the number of accidents upon growth In compliance with the Federal Law “On sanitary and of the total number of the Bank’s staff and the Bank’s epidemiological conditions” the Bank has developed a territorial expansion. control system for compliance with sanitary rules and sanitary antiepidemic measures. The Labor Protection Service carries annual examinations of workplaces and issues instructions for elimination of the discovered violations and compliance with the labor protection requirements.
Accidents in 2005– 2007 2005 2006 2007
Total number of employees 3331 3869 4926
Number of accidents 6 3 5
Rate of accidents 0,18% 0,07% 0,10%
30 Social conditions In view of the general awareness of the safety rules, the data bank of safety rules has been created and it is The buildings of the head office and branches of the available to all the employees of the Bank. The databank Bank are equipped with social infrastructure objects, contains the current orders and instructions of the Bank including canteens, buffets, cloakrooms, shower as well as normative and technical documentation of rooms, rest areas and gyms. the Russian Federation in labor safety.
Training in Safety and Labor Protection The Bank is planning to certify its system of labor protection and occupational safety for compliance Safety of production processes is significantly influenced with the International Standard OHSAS-18001 by personality factors. Thus, particular attention is or the National Standard GOST R 12.006-2002. paid at the Bank to training staff in safety rules and OHSAS-18001 Standard “System of health and safety motivation for compliance therewith. AK BARS Bank management” prescribes establishment of the health arranges trainings for the employees responsible for and safety management system as a component part certain departments in safety rules, which is a pre- of the company’s general management system. GOST requisite for the decline in production traumatism. In R 12.006-2002 “System of labor safety regulations. 2006-2007 over 100 of the Bank’s employees were General requirements to the management of labor trained and tested in safety rules at the educational safety in a company” almost completely complies with centers by the Ministry of Labor. Other managers and OHSAS-18001. department heads were tested by the Bank’s committee for testing of safety rules awareness.
Each prospective employer of the Bank has an introductory training in the safety rules office as well as initial training and afterwards (at least once every six months) instructions on safety rules are given to all employees in their workplaces. Moreover, all employees are instructed in safety regulations prior to spring and fall volunteer clean-ups (subbotnik).
SOCIAL REPORT 31 OAO4 AK BARS BANK in its Development Corporate Culture
AK BARS Bank is a dynamically developing company, play with teams. The staff members greatly enjoyed the which realizes the importance of establishing its own celebration and hope that the Day of the Head Office traditions. For creation of a positive environment Employees will become one of the Bank’s traditions. and favorable atmosphere to unite the employees with common values, various events are held aimed The corporate New Year’s celebration of 2007/08 was at unification of the staff, its involvement with the held in the form of Kazan film festival “Beluy Bars”. The activities, goals and objectives of the Bank. Bank’s employees completed in four mini feature films of different genres and the “film festival” jury awarded In 2007 the photo contest for the employees and prizes in the following nominations: “Best film”, “Best contest of children’s drawings were held. The goal of actor”, “Best actress” and “Best supporting actor”. the photo contest was to encourage the creative spirit of the Bank’s employees, thus only the Bank’s staff members could participate in it. The children of the Bank’s employees took part in the drawing contest. The contest committee was happy to discover many talented children. The best works were used for interior decoration of the Bank’s head office.
The corporate web-portal is designed for improvement of internal communication system. It covers the major events within the Bank and allows the employees to express and discuss their concerns.
The Bank’s employees participate in department and all-bank sporting events, primarily bowling and foosball contests.
On July 14th, 2007 for the first time the Bank had a grandiose celebration of the Day of the Head Office Employees. The day was celebrated with a dynamic role-
32 SOCIAL REPORT 33 Financial and organizational support of social and cultural projects, as well as charitable contributions in favor of public organizations, medical and children's establishments are the Bank's daily work in the sphere of corporate social responsibility. 5 5Charity Charity
AK BARS Bank is a commercial establishment, which The following trends of the charitable and sponsorship accepts its social responsibilities and is striving to activities have been formed and are developed by the be a good corporate citizen. AK BARS Bank has been Bank: supporting sponsorship and charity over the years of its existence. Financial and organization support of Assistance to socially disadvantaged and disabled social and cultural projects, charitable contributions people (individual and group support). This trend to nonprofit organizations, medical and children represents the activities connected with consideration establishments is a part of the Bank’s daily activities of applications concerning treatment of serious relating to social corporate responsibility. diseases, acquisition of essentials for people in reduced circumstances. The Bank receives plenty The Bank informs the public of its activities in this of such application. Each and every one of them is sphere and applies well-defined and transparent carefully considered by the Charity and Sponsorship corporate criteria and procedures of project selection. Committee. In 2003 the Committee for Charity and Sponsorship was established in the Bank. The committee considers Patronage of orphanages and senior centers. applications by citizens and companies, take decision Currently two orphanages (Vysokogorskiy and on assistance and sponsorship, defines the Bank’s Elabuzhskiy) and the Nizhnekamsk board and care priorities. facility are under the Bank’s patronage. The Bank’s management regularly visits children and elderly The Social Committee was established, which considers people in these establishments, events are held, gifts the interior social policy issues and applications from are given, the wishes of children and elderly people are the Bank’s employees. granted, applications for repairs and improvement by The increase of the range of the Bank’s interests in administration are financed. this sphere is well illustrated with figures. The amount of charitable help and sponsorship is constantly Environmental projects. The Snow Leopard, after which increasing: the Bank is called, is under the Bank’s patronage. The in 2005 – 31.119 mln. rubles; Bank sponsors the maintenance of snow leopards in in 2006 – 65.727 mln. rubles; the Kazan Zoo. Since 2006 financing is also provided in 2007 – 99.105 mln. rubles. for snow leopards maintenance in the Saint-Petersburg Zoo. Moreover, the Baltasinskiy State Forest Preserve
36 and the Nurlat Stud Farm get financial support from the Sports events, sponsorship of sports clubs and Bank. organizations, support for talented sportsmen. Professional sport in Tatarstan is highly developed. Assistance to confession communities. Applications The Bank has a wide experience in sponsorship and from religious organizations are also considered by the cooperation with the major sports clubs of the Republic Bank. The Bank was one of the numerous sponsors of (Basketball club UNICS, Hockey club Ak Bars). The the Kul Sharif Mosque construction and restoration of Bank is a permanent sponsor of the Judo Federation the Annunciation cathedral in the Kremlin. The Koran of RT. Wrestling, table tennis, pools, equestrian and readers contest in Kazan is also sponsored by the Bank. motor racing sports clubs receive financial assistance The Bank regularly provides assets for restoration of from the Bank. religious buildings both within and outside Tatarstan. Assistance to state and municipal educational Support of artistic and cultural programs, contests, establishments, celebrations and ceremonies. This scholarship program, sponsorship of educational support is basically manifested in provision of funds establishments. AK BARS Bank also participates in for equipment for state establishments and holding of varied cultural life within and outside Tatarstan. The various events, including official state holidays (Victory Bank sponsors various music festivals, art contest, Day, Day of the Republic, Sabantuy) and events within events for young people. The Bank has a scholarship certain establishments. The financial participation of program, in which scholarships are provided to bright the Bank makes the holidays brighter. students, which showed their talents in educational, scientific and public activities. Moreover, the Bank regularly responds to various applications for support from educational institutions of various levels (kindergartens, schools and colleges). The goal of the Bank is to encourage children and young people aspire to new goals, to encourage their attempts to reach the unreachable through hard work, diligence and discipline.
SOCIAL REPORT 37 Participation of the Bank in Protection 5Charity and Support of Children and Young People
Support of children and young people is one of the and financial law, banking system development, oldest and most respected charities. Happiness you feel innovation activities, human capital assets and post- when you see smiles of children unwrapping their gifts industrial strategy of Russia, information technologies. or having their dreams come true, is truly unmatched. The Bank sees this assistance as vital and is actively The scholarship holders have their internship in the developing it. The scale of financial support provided by Bank and may later become the Bank’s employees. the Bank in this sphere is growing annually. Two out of six scholarship holders of 2006/2007 have already been employed by the Bank. The intention of The oldest tradition of the Bank is presents to all the Bank is to hold this contest for students all over first-grade pupils in Tatarstan for the Knowledge Day. Russia. Since 1997 the Bank has been giving all first-grade pupils books for learning the state languages of the The Bank provides support to cultural and sports Republic of Tatarstan. The employees of the Bank activities of the young generation. The Bank sponsors present colorful books with puzzle, poems and stories children sports establishments, supports young to pupils. In 2007 51 thousand schoolchildren all over performers and talented youth. the Republic received these gifts. The main ceremony took place in the Bolshe-Kaibitskoy secondary school, The main objective of AK BARS Bank in its activities for where the books were presented by the Chairman of supporting children and young people is to show to the the Board of AK BARS Robert Minnegaliev. young generation that hard work and persistence are rewarded. The most important thing is to aspire to the Another tradition is a contest for personal scholarships new and progressive, stick to the set goals and believe from AK BARS Bank, which has been held since 2003. in success. The scholarship is granted for prominent results in education and science. The scale of the contest is annually increasing. In 2006/2007 there were six scholarship holders and all of them were from Kazan. In 2007/2008 scholarships were granted to fifteen students from different cities of Tatarstan and there were five applicants for each scholarship. The research works by the current scholarship holders cover banking
38 SOCIAL REPORT 39 5Charity Participation in Intellectual and Spiritual Life
The Bank’s activities in this sphere include the Bank’s The contest was started in June 2007 and will be own contest projects and the sponsorship of religious completed in March 2008. and state establishments. Another joint project of the Bank and Ak Bars Gallery The Bank holds two contests to encourage and develop is the exhibition Art Collection of AK BARS Bank in the creativity – a journalistic contest and an artistic cities of the Republic of Tatarstan. Its opening took contest. place on September 28th, 2007. The Art Collection is a new project of AK BARS Bank, which was launched The journalistic contest in 2007 was the fifth contest of for promotion of artistic work in the cities of Tatarstan. this kind. Journalists from print and electronic media of Art galleries and exhibition halls will house artwork and any level, which cover the activities of AK BARS Bank, graphic art from the corporate collection of the Bank. can participate in this contest. This is a social project available to everyone irrespective There are four nominations: of financial status, education, cultural and social • for a number of television presentations; background for the entry to this exhibition is free. • for a number of articles in printed media; • for a number of Internet publications; Elabuga for its 1,000th anniversary, the celebration of • for the best camerawork. which was held in August 2007, received another gift from the Bank. The Bank financed the creation and The main objective of the contest is to attract journalists for installation of a monument to the Bulgar Khan Ibragim cooperation with the Bank, to promote high professional on the bank of the Kama river next to the cultural and skills and balanced approach to representation of the historic area “Chertovo Gorodishshe”. Bank’s activities in mass media. Cooperation with religious establishments is another The art contest for the best presentation of the Snow important trend of AK BARS Bank activities. We realize Leopard is held for the first time. Its main objective the importance of spiritual inheritance, promotion of is to attract the pubic attention to art and apply the traditional religious beliefs, which are deeply rooted in creative potential of Tatarstan artists for creation of the our culture. By this we mean restoration and promotion works representing the state symbol of the Republic of of cooperation between various confession groups, Tatarstan, AK BARS Bank and OOO AK BARS Gallery. tolerance and peacefulness, which is impossible
40 without support for their representatives both within of the Board. During 2004-2006 the total amount of and outside the Republic. financial assistance to the Russian Islam University comprised 2.707 million rubles. On the whole, in 2006 For hundreds of years representatives of various the total amount of donations to religious establishments ethnic groups and religions have been living side by comprised 1.314 million rubles, in 2007 – 250 side in Tatarstan. The Bank is attempting to provide thousand. equal financial assistance to various religious establishments, to support events for promotion of Secular holidays are not left out either. The celebration tolerance and communication of various confessions. of Sabantuy is annually sponsored by the Bank. In 2005 This is extremely important in the modern world when over 1.903 mln. rubles, in 2006 – 1.4 mln. rubles, in people are influenced by new forms of fundamentalism, 2007 – 1.739 mln. rubles was donated for this holiday extremism and other destroying ideologies. celebration. Sabantuy is a very special holiday, reflecting the values of the Tatar national culture in all regions with AK BARS Bank was one of the sponsors of the Kul Tatar population, thus the Bank sponsors its celebration Sharif Mosque construction as well as reconstruction of in all regions with its presence. the Annunciation Cathedral for the Kazan millennium. The Bank regularly provides funds for construction and The celebration of the Republic Day (August 30th), New reconstruction of mosques and cathedrals both in and Year’s Day and many other holidays are sponsored by outside the Republic of Tatarstan. the Bank. The total sum of sponsor assistance in 2005 comprised 1.41 mln. rubles, in 2006 – 1.271 mln. The Bank is a sponsor of the annual contest of Koran rubles, in 2007 – 8.811 mln. rubles. readers held by the Eniler mosque of the Kazan Mukhtasibat of the Spiritual Directorate of Muslims in the Republic of Tatarstan.
The Russian Islam University receives constant financial support from the Bank. The Chairman of the Committee of Directors of OAO AK BARS BANK Robert Musin is a member of the Board of Trustees of this University. The Chairman of the Board Robert Minnegaliev is a member
SOCIAL REPORT 41 5Charity Support by the Bank of Socially-disadvantaged People
In everyone’s life there may be times when it is Of course, applications from other educational impossible to do without the assistance of others, establishments (kindergartens, schools and colleges) including financial assistance. In view of this, the Bank are also considered by the Bank. Thus, in September is providing support to those who find themselves in 2007 kindergarten No.282 for children with visual a difficult situation, primarily to orphan children and impairment received equipment for laser treatment of elderly people. Assistance to them is at the heart of the amblyopia and heterotrophy as a gift from the Bank. Bank’s activities in this sphere. Support is also provided to the Kazan State University, Kazan State Financial and Economic University, AK BARS Bank is providing regular assistance to numerous schools and kindergartens in Kazan and the Vysokogorskiy and Elabuzhskiy orphanages. Such regions of the Republic. assistance is expressed in various forms – cash assets for current needs, presents for children, educational materials, celebrations and cultural events, upgrading of facilities.
In 2007 the water tower of the Vysokogorskiy orphanage was repaired and all children in the Elabuzhskiy orphanage received school uniforms for the new school year. Most often assistance is provided to these establishments in the form of computers, furniture and other things necessary for their day-to-day functioning. In 2008 the Elabuzhskiy orphanage received 10 computer and 10 printing-scanning devices as a gift from the Bank. And most importantly, the Bank’s management pays regular visits to the children.
Such assistance brings about a special feeling, a feeling of involvement with the true principles of humanity and happiness that the Bank is able to help and support those who really need it.
42 The other group of population in need of assistance On the whole, the amount of charitable help to is elderly people. Under the auspices of the Bank individuals (the major part of which was used for is the Nizhnekamsk board and care facility and the treatment and medical needs) in 2005 comprised 981 rehabilitation centre in Krasnaya Kadka settlement of the thousand rubles, in 2006 – 997 thousand rubles, in Nizhnekamsk region. Annually on the Day of the Elderly, 2007 – 1.557 million rubles. programs financed by the Bank are held in Nizhnekamsk and other cities. In 2006 the Nizhnekamsk board and The Bank closely cooperates with the Charity Com- care facility received 68.4 thousand rubles and in 2007 mittee of the Republic of Tatarstan and participates in – 70 thousand rubles for the Day of the Elderly as a gift discussion of its current issues. The Chairman of the from the Bank. Board of the Bank Robert Minnegaliev is a member of the Charity Committee. Just as any other major establishment, the Bank receives numerous applications from citizens for sponsorship and donations. The Bank is trying to provide assistance to those who urgently need it.
First and foremost the Bank provides assistance for treatment of serious diseases such as leukemia, diabetes, birth defects or serious traumas as a result of accidents.
Regular support is provided by the Bank for acquisition of costly healthcare products and medical equipment. Even well-off families cannot afford some modern treatment methods. They require help from charitable funds and establishments.
Another group of applicants are those who found themselves in financial trouble.
SOCIAL REPORT 43 5Charity Health Improvement
Sports events represent a major share in the charitable the silver medal in the championship of Russia. The activities of the Bank. Tatarstan is famous for its Bank’s management and employees were glad they developed sports infrastructure including a number of had something to do with this victory. sports clubs showing excellent performance in football, hockey, basketball, volleyball, water polo, ice hockey In the current season (2007/2008) the Bank is the with the ball, grass hockey, etc. official financial sponsor of the two-time champion, winner of multiple silver and bronze awards in the AK BARS Bank participates in popularization of sport championship of Russia – Ak Bars hockey club. Along and supports its development in and outside the with a number of other companies, the Bank provides Republic of Tatarstan. The range of sports events financial assistance to Ak Bars hockey club and supported by the Bank is wide – from children’s sports acquires an opportunity to promote the brand name of schools and small tournaments to major sports clubs AK BARS Bank among its numerous fans. representing Tatarstan in major championships of the country. Regular assistance is provided to MUP Nurlat Stud Farm, the centre of horse breeding of Tatarstan. It’s a The activities for sports support reached a large scale well-known fact that equestrian sport is very popular in in 2006. The Bank provided sponsor assistance to Tatarstan and AK BARS Bank makes a solid contribution the Judo Federation of the Republic of Tatarstan, the to it development. Table Tennis Federation of the Republic of Tatarstan, the Federation of the Tatar-Bashkir National Wrestling The main project of AK BARS Bank in 2007 is the AK of the Republic of Tatarstan, the Chess Federation BARS Centre of Wrestling. The construction costs of the Republic of Tatarstan as well as other sports comprise 40.1 mln. rubles. The Centre will provide establishments. The total amount of financial aid facilities for classes at the international level and house comprised 4.114 million rubles. Many amateur and major international tournaments. The opening of the professional sports tournaments (including junior Centre, which is planned for the third quarter of 2008, tournaments) would have been impossible without AK will be marked with the international judo tournament for BARS Bank’s financial support. the prizes of AK BARS Bank.
In the season of 2006/2007 AK BARS Bank was the official sponsor of UNICS basketball club, which won
44 SOCIAL REPORT 45 5Charity The Bank’s Contribution to Environment Protection
It is a well-known fact that over the recent years the For its 10th anniversary in 2003 the Bank arranged ecological situation has significantly deteriorated. The the project “New Alley for the City”. Trees were planted active development of industry, power generation and on the waste land between the head office of the many other factors result in air pollution, depletion Bank and the building of the Kazan Power Engineering of natural resources, extinction of rare species and University. incidence rate growth. In many countries ecological problems are solved at the international and government In 2005 and 2006 the Bank provided assistance to the levels. AK BARS Bank also makes its contribution to State Complex Forest Preserve “Baltasinskiy” for its environment protection. The Bank is developing and maintenance and ecosystem preservation. implementing ecological programs and projects.
The snow leopard is one of the extinct species introduced in the Red Book of the International Union for Conservation of Nature and Natural Resources. All snow leopards kept in zoos around the world are registered in the international genealogical book. The snow leopard, after which AK BARS Bank is named, has been under the Bank’s protection and guardianship for many years. The main expenditure item in this respect is maintenance of the snow leopards in the Kazan Zoological and Botanical Garden. The Bank provides for the whole range of activities for the leopards’ maintenance, current repairs of the compound built with the Bank’s financial assistance, treatment and preventive measures for the animals. For several years similar assistance has been provided to the Saint- Petersburg Zoo. Another good tradition is celebration of the Snow Leopard Day for Kazan children to commemorate the Bank’s birthday.
46 Conclusion
The business success of any company primarily depends on the welfare of society. This has become obvious for major Russian businesses oriented on long-term and successful activities. Establishment of strong positions in the national and world economy through competitive advantages and responsible business policies is a priority objective of Russian businesses in order to create a basis for the stable economic development of the country.
High public expectations make AK BARS strive for effective ways of cooperation with all interested parties that means higher transparency of the Bank’s activities and providing information to the general public. AK BARS Bank understands and accepts modern business trends.
But you should never stop for it’s important to aspire for implementation of the international standards for social responsibility management. In this respect a special program has been developed by the UN. The Bank will have to bring its standards in compliance with this program. The Bank’s further plans are to implement the generally accepted rules of social reporting and increase its social responsibility on the national level.
SOCIAL REPORT 47 Дизайн-студия «МИАН», г. КАЗАНЬ,ТЕЛ. (843) 292 33 76