Leadership: Statement by the Chairman Board of Directors

Dmitry Orlov
Chairman of the Board of Directors
Bank Vozrozhdenie

Dear Shareholders

In times of escalating risks of economic crises anda deteriorating economic environment, the field of Russian corporate governance – undoubtedly involving rapidly developing and dynamic interactions of companies’, shareholders’ and investors’ interests – continues to gain importance. One cannot be insensitive to the equally dynamic nature of the tendencies and priorities of these interactions – changing to reflect the expansion of stakeholder interestsand market requirements, as well as to increased regulatory oversight. The quality of company management and compliance with the interests of all stakeholders take precedence in times as these. Strategic planning issueshave gained significance in 2013, due to the negative macroeconomic trends. In this environment of economic uncertainty regarding the credit quality of both corporateand individual borrowers, issues of risk management have maintained their importance.

In 2013, the work of our Board of Directors was focused ona range of issues, including improving the decision making processes by the management bodies, strengthening control over compliance by all the employees of the Bank withthe legislative requirements, regulating procedures for counteracting the improper use of insider information and market manipulation, raising the level of transparency ofthe Bank, and also on improving the systems of risk management and internal control. An important corporate governance change in 2013 has been the reassignment of authority between the different management bodies, designed to increase the involvement of the Board of Directors inthe Bank management processes.

Due to the strengthening role of the Board of Directors and its increased involvement in strategic planning and controllingof the activities of the management bodies, the Articles of Association were amended to redefine the competenciesof the Board of Directors on matters relating to definingthe criteria, limits and powers for conducting a range of banking operations, and primarily those bearing significant credit risk. Beyond this, the authority of the Board of Directors was expanded to enable it to determine the procedures forthe approval of a range of transactions, includingthose with real estate.

To make interaction with management and internal divisions of the Bank more effective, a new edition of the Regulations on accountability of Bank Vozrozhdenie management bodies to the Board of Directors was approved. This document was redrafted to define the preparation terms and the structureof the reports provided to the Board of Directors on issuesof financial and economic activity, risk management, and development of corporate governance practices. Furthermore, the regulation establishes procedures for reporting onthe implementation of internal control guidelines and programmes of implementation of internal control procedures for the purposes of counteracting the legalization of criminal proceeds and financing of terrorism, the implementationof internal control in order to counter the misuse of insider information and market manipulation, and analysis ofthe results of the reviews conducted by the Bank of Russiain the internal divisions of the Bank.

We are regularly supplied with information about best practices in the sphere of corporate governance applied by leading Russian and foreign companies. In October, the Board of Directors was provided with information on best practices in banking supervision as recommended by the Basel Committee, relating to the definition of issues inthe competence of the Board of Directors. In 2014, in orderto improve the quality of corporate governance, in the courseof our meetings, we plan to adjust the strategy of the Bank. Besides this, we will pay particular attention to improvingthe systems of risk management and motivation of employees, to strengthening internal controls and enhancing the level of the Bank’s transparency. As part of our regular work, the Board will consider matters concerning the General Meeting of the Shareholders and its organisation, reports on the work of the Audit Committee and Human Resources and Compensation Committee, as well as define the work plan of the Board for the following year.

We assess the level of corporate governance of the Bankand conduct a self-assessment of the work of the Boardof Directors on an annual basis, and as a result ofsuch assessment we develop and approve plans forthe enhancement of corporate governance practices.We believe, that the experience of the members of the Board of Directors, gained over significant time worked in different industries, as well as our combined efforts will enableBank Vozrozhdenie to successfully sail through this difficult, in economic terms, year, while outperforming on the set goals and creating value for our shareholders.

Dmitry Orlov
Chairman of the Board of Directors

Composition of the Board
of Directors of Bank Vozrozhdenie

  • Dmitry L. Orlov
  • Alexander. V. Dolgopolov
  • Lyudmila A. Goncharova
  • Nikolay S. Zatsepin
  • Oleg I. Lapushkin
  • Vladimir G. Malinin
  • Sergey N. Malinin
  • Otar L. Margania
  • Nikita S. Mikhalkov
  • Vladimir G. Panskov
  • Yuri V. Poletaev
  • Mukhadin A. Eskindarov

Composition of the Management
Board of Bank Vozrozhdenie

  • Alexander. V. Dolgopolov
  • Alexander A. Bolvinov
  • Lyudmila A. Goncharova
  • Mark M. Nakhmanovich
  • Andrey A. Shalimov
  • Rushan A. Abdullin
  • Tatyana L. Bondareva
  • Evgeniy V. Dmitriev
  • Alexey A. Ivanov
  • Sergey N. Malinin
  • Mikhail A. Semko