Social report Ak Bars Bank 2019 2 Contents Address of the Bank’s Management 3 Employees' labor and employment rights 22 Assistance to severely ill children, children with disabilities and children finding themselves General and advanced professional training 22 in difficult life situations 48 General Information on Ak Bars Bank 4 Personnel reserve 31 Social protection for the elderly, assistance to socially vulnerable groups and people with disabilities 49 Principles and structure Individual Development Plan (IDP) 32 of the corporate governance 5 Assistance to educational institutions Assessment of the Bank's personnel 32 and education programs of the Bank 50 Shareholders, capital structure 7 Social benefits for the Bank’s employees 33 Support for social events 51 Activities of the Board of Directors and its Committees 10 Voluntary Medical Insurance 36 Assistance to public organizations, cultural, medical institutions, etc. 51 Committees of the Board of Directors 12 Sport, recreation, cultural and recreational activities 37 Support for sports 51 Support of the elderly and retired 38 Human Resources Policy of the Bank 15 Conclusion 52 Socially responsible regulation of issues of labor Occupational Health and employment 16 and Safety Policy 39 Appendix 53 The structure of the personnel of Aк Bars Bank 17 Environmental impact management 42 Report of the AK BARS SOZIDANIE Remuneration and incentive policy for the labor 18 Charity Foundation 53 Intangible motivation of the personnel 19 Charity activities of the Bank 46 Corporate values 21 Work of the Committee on sponsorship and charity 46 3 Address of the Bank’s Management The Bank's social responsibility is based and environmental campaigns. The Bank on the best corporate governance practices strives to make the working atmosphere namely, sustainable development, smart risk as comfortable as possible by creating management, ensuring a balance of rights and an environment of labor protection, providing interests of owners, management, and other guaranteed and decent wages, services stakeholders. Ak Bars Bank always takes of voluntary medical insurance and social into account the interests of society and benefits. contributes to improving the lives of people in the areas covered by the Bank. Detailed information about all good deeds of Ak Bars Bank you will find in this report. The Bank's policy of corporate social We wish you wellbeing, stability, and responsibility is based on high moral values prosperity! such as support for neighbors, mutual help, and responsiveness. This is confirmed Chairman of the Board of Directors by the Bank's long-term charitable activity of Ak Bars Bank Dear friends! aimed at helping the least protected V. Yu. Sorokin categories of citizens. For many years, We hereby present you the twelfth Social Trends in the banking industry dictate the Bank has been supporting sports, culture, Chairman of the Management Board Report of Ak Bars Bank to provide details on new approaches to business organization education, science, and other spheres. of Ak Bars Bank the Bank's activities in the field of charity establishing relationships with clients and Z. F. Garaev and corporate social responsibility. partners. Nevertheless, large financial High moral values are tightly integrated corporations are aware of their role in society into internal corporate culture as well. The and their impact for the social and economic Bank's employees regularly take part in social processes around. events and actively participate in public 4 GENERAL INFORMATION ON AK BARS BANK The Joint-Stock Commercial of banking services both to corporate Among corporate customers, there Bank “AK BARS“ (Public Joint-Stock and individual customers. are large companies of the oil, gas, Company) was registered with the Central and petrochemical sector, machine-building, Bank of the Russian Federation and has Retail, corporate, and investment business, telecommunications, electric power, been successfully working since 1993. digital banking, private banking are priority construction, chemical, automobile transport Ak Bars Bank is a sustainable and socially fields of activities for the Bank. companies, retail enterprises, agricultural responsible financial institution. companies, and other institutions. Ak Bars Bank has a well-developed territorial Ak Bars Bank is the leading bank in Tatarstan, network. As of the end of 2019, the regional it is ranked 17th among Russian financial network comprised 228 divisions. institutions by assets at the beginning At the same time, the Bank rebranded of 2020. The Bank has been in the market 110 sales points. Furthermore, since 1993 and is represented in 27 regions the Bank expanded its network of offices of Russia. The Bank holds all types equipped for biometric data registration of banking licenses available in the Russian (Unified Biometric System project) Federation and provides more than 100 types to 131 offices during 2019. 228 131 divisions in the regional offices are equipped for biometric network data registration 5 Principles and structure of the corporate governance The corporate governance plays a key Management Board and Chairman role in the activities of Ak Bars Bank in its of the Management Board of the Bank, as successful and sustainable development, risk well as Committees of the Bank at various management, ensuring a balance of rights levels. Apart from that, the Bank's and interests of owners, management corporate governance structure ensures and other stakeholders. maintenance of an adequate balance between the management bodies, distributes powers, Organization of efficient corporate governance and differentiates general management ensures balanced management decisions, performed by shareholders and the Board timely identification, and assessment of Directors from the management of possible consequences of risk realization, of the Bank's day-to-day activities performed identification of adequate measures by its executive bodies. for risk prevention or minimization, which ultimately ensures a stable position The Bank's management bodies carry out their of the Bank in the market, as well as builds functions primarily following the principles the Bank's reputation as a reliable counterparty recommended by the Corporate Governance and financial intermediary. Code, which is based on the protection of the rights of shareholders and investors. The system of corporate governance The shareholders are entitled to participate of Ak Bars Bank is based on effective in the management of the Bank by taking interaction between all the bodies decisions on the most important issues of its management i. e. General Meeting of the Bank's activity at the General Meeting of Shareholders, Board of Directors, of Shareholders. 6 The Bank has built up an effective system a regulatory document defining fundamental and recommendations of the Bank of Russia. The process of development and improvement of corporate governance and internal principles, rules, and standards of corporate The Board of Directors assessed the Bank's of corporate governance will continue control of financial and economic activities governance. Those include protection corporate governance system as complaint in Ak Bars Bank in the future, including to protect the rights and lawful interests of rights and lawful interests of the Bank's with corporate governance standards. the analysis of the feasibility of applying new of shareholders. The Bank's management shareholders, organization of the activity practices. processes and procedures are structured of the Board of Directors and executive bodies, The Bank has also continued to develop in a way that they ensure compliance with all the fulfillment of strategic management, and update internal regulatory documents laws, rules, and regulations and create optimal coordination of risk management and internal to introduce the corporate governance conditions for making sound and responsible control, prevention and settlement of interest principles recommended by the Bank of Russia decisions. For example, the Bank's Board conflicts, information disclosure, as well as into corporate governance practice more of Directors has an Audit Committee, which, the procedure for carrying out significant thoroughly. together with the Internal Audit Service, corporate actions. assists management bodies in ensuring efficient operation of the Bank, and the Review The Bank, guided by the interests of its Committee monitors the Bank's compliance shareholders, creditors, clients, business with regulations and legality of operations. partners, and counterparties, constantly monitors the compliance of its activities Following the legislation of the Russian with the provisions of the Corporate Ak Bars Bank will continue to develop Federation, Ak Bars Bank seeks to comply Governance Code recommended with corporate governance standards under for application by the Bank of Russia. and improve corporate governance, the recommendations of the Bank of Russia and international standards. In 2019, the Board of Directors involving analysis of the feasibility of the Bank continued its assessment of applying the new practices. The Board of Directors confirms that of the corporate governance system the Bank complies with the principles of Ak Bars Bank following the methodology and recommendations of the “Corporate based on the Russian legislation on joint- Governance Code of Ak Bars Bank ”, which is stock companies, banks, and banking activities 7 Shareholders, capital structure The General