JOINT STOCK COMMERCIAL BANK AK BARS(Open Joint-Stock Company) AK BARS BANK

APPROVED BYThe Decision of the Management Board of

JSC AK BARS BANKdd. “__”_______

Protocol No ________

Corporate Social Responsibility ReportJSC AK BARS BANK - 2014

Kazan2015

Оглавление

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1. The address of the management of the Bank................................................................................4

2. General information on JSC AK BARS Bank.............................................................................4

3. Principles and structure of corporate management.....................................................................5

4. Human resources management of the Bank.................................................................................9

4.1. Social responsibility regulations of labor and employment matters.........................................10

4.1.1. The Staff structure of AK BARS Bank.............................................................................10

4.1.2. Payment policy and staff motivation.................................................................................12

4.1.3. Non-financial staff motivation...........................................................................................13

4.1.4. Corporate values................................................................................................................14

4.1.5. Employment and labor law................................................................................................15

4.1.6. Training and professional development.............................................................................15

4.1.7. Staff assessment of the Bank.............................................................................................17

4.1.8. Employee benefits of the Bank..........................................................................................18

4.2. Quality of working conditions and life of employees..............................................................19

4.2.1. Sport, recreation organization, culture and health events..................................................19

4.2.2. Employee benefits for families..........................................................................................20

4.2.3. Support of elderly people and unemployed pensioners.....................................................20

4.3. Development of education and sciences...............................................................................20

5. Labor protection............................................................................................................................21

6. Socially responsible participation of the Bank in Public Life...................................................23

6.1. Commission on sponsor support and charity............................................................................23

6.2. Support of Educational Institutions..........................................................................................23

6.3. Support to children with limited physical capacities and to the children with difficult life situations..........................................................................................................................................24

6.4. Social protection of senior citizens, help to socially unprotected groups of the population, and to disabled people............................................................................................................................25

6.5. Public health improvement.......................................................................................................25

6.6. Support of gifted children and young adults............................................................................26

6.7. Work with state institutions particularly concerning the implementation of socially oriented projects and development of mass culture.......................................................................................27

6.8. Environmental protection.........................................................................................................27

6.9. Support of art and cultural programs........................................................................................27

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7. Report of AK BARS SOZIDANIE Charitable Foundation......................................................27

IntroductionDear friends!

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Social responsibility has been an important factor for the dynamic development of JSC AK BARS Bank for many years. In 2014 the Bank activity was performed while taking into account the interests of society, clients, and employees. In the current Corporate Social Responsibility Report the consolidated information on the noncommercial policy of AK BARS Bank considering the solutions for the social and economic problems of the State is revealed. Among the socially significant projects of 2014, many traditional and new initiatives of the Bank were successfully implemented. We are convinced that the role of corporate social responsibility has increased in the activity of one of the largest credit institutions and has become even more productive and of a larger scale.

1. The address of the management of the BankFor seven years in a row we examine the activity of AK BARS Bank in the aspect of corporate

social responsibility, showing a commitment to the advanced standards for information transparency and responsiveness to the expectations and problems of the modern Russian society. We hope that the report will be interesting and useful as a picture of the unique practice of long-term and effective interaction of business with the State and society in the solving of significant social tasks.

An important role in the formation of business reputation related to the reinforcement of partners’ trust and clients’ loyalty in AK BARS Bank is conducted by a noncommercial business component. In 2014, despite the difficulties in the financial market of Russia, corporate social responsibility had remained an integral part of our company’s activity, and success in this area was still considered as one of the most important criteria for our assessment of overall performance.

We are sure that AK BARS Bank moves in the correct direction. In the last year a lot of work was done. In 2015 the Bank will continue to develop the programs and projects within our corporate social responsibility for achieving more positive results for the benefit of society and the country.

Best regards, The Chairman of the Board of Directors of JSC AK BARS Bank Sorokin V.U.The Chairman of the Board of Directors of JSC AK BARS Bank Minnegaliyev R. H.

2. General information on JSC AK BARS BankThe AK BARS joint stock bank (Open joint stock Company) was registered with the Central

Bank of the Russian Federation in 1993. The Bank has proven itself as a reliable financial institution enjoying unconditional trust within the subjects of economic activity and society.

AK BARS Bank is one of the twenty largest financial institutions in Russia. The Bank has taken19th place by the size of its own capital and 19th place by the size of its assets as of January 1, 2015. The Bank provides services for over 2,9 million individuals and 62 thousand corporate clients. 32 branches, 242 additional offices, 93 operational cash desks, 13 operational offices, and 1 mobile unit of cash operations form the regional network of the Bank.

For JSC AK BARS Bank the following business positions remain a high priority: corporate, retail and investment business, and private banking. Among the corporate clients there are large oil and gas and petrochemical complex, engineering, telecommunications, energy, construction, chemical, motor transportation, trade enterprises, and agro-industrial complex and other companies.

The bank provides a complex of financial services to its corporate clients: cash management services, loan servicing, issuing bank guarantees, operations with plastic cards, implementation of international operations and currency exchange regulation, concluding bank deposit agreements, securities trading, management of money and securities, brokerages and trust operations, online trading, and many other services.

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Retail business is the most important business position of the Bank. JSC AK BARS Bank offers to its private clients a high-quality complex of bank services providing the greatest possible set of high-quality and high-reliability financial services. All client categories are able to use such services as credits, mortgage, deposits, settlement and cash operations, bank cards, operations with precious metals, and the system of remote bank services such as “AK BARS Online”, “Text Banking”, etc.

The main task of the work with the Bank’s clients is forming a long-term partnership on the ground of an individual approach.

The Corporate Social Responsibility Report of the Bank is a public instrument for informing shareholders, partners, clients, and employees on the realization of the strategic development plans for economic stability and the social well-being of employees and the general public.

3. Principles and structure of corporate managementJSC AK BARS Bank considers corporate management effectiveness one of the most

important conditions for ensuring a stable and sustainable development of business.Guided by the interests of shareholders, creditors, clients, business partners, and contractors,

JSC AK BARS Bank conducts a constant monitoring of activity compliance to the terms and conditions of corporate management of JSC AK BARS Bank. The terms and conditions are published on the Bank official website, www.akbars.ru (<http://www.akbars.ru>), and on the Interfax news agency website, available to everybody.

According to the principles of information and financial transparency, the Bank reveals full and reliable information in a timely manner, including its financial situation, economic indicators, and ownership structure, thus providing shareholders and investors with the ability to make reasonable decisions.

Based on the principles of responsibility and legality, the Bank strictly observes the generally accepted rules of international law, the laws of the Russian Federation, and legal acts corresponding to them. The Bank also bears the responsibility before shareholders - for the results of its activity, before clients - for the quality of providing banking services, before business partners - for the appropriate execution of its duties.

Due to the principles of justice, the Bank provides an equal attitude towards all shareholders, regardless of their share in authorized capital, and gives them opportunities for effective protection of their rights and legitimate interests.

The Bank understands that the improvement of corporate management is an important task necessary for ensuring stability and successful work in financial markets, the maintenance of high standards of corporate management, and business ethics necessary for successfully conducting business. Development and introduction of new internal standards in corporate management can become one of the methods for such improvement, therefore in 2014 AK BARS Bank has constantly worked on compliance of internal procedures and rules for the numerous alterations in Russian legislation regarding corporate management. Besides, the Bank continued to apply advanced standards of corporate management in its activity, paying special attention to the increase of the transparency level of corporate procedures and the strengthening of the Board of Directors’ role in its strategic and control functions.

Due to generally accepted practices, the Board of Directors carried out an annual assessment of the corporate management conditions of the Bank (related issues were considered at the Meeting of February 25, 2015). With its results, plans for the elimination of problems it revealed were developed.

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The corporate management of AK BARS Bank keeps the appropriate balance of governing bodies, defines and delineates the responsibilities of shareholders and the Board of Directors, and manages the current Bank activity conducted by the Bank’s executive bodies.

Shareholders, capital structureThe General Shareholder Meeting is the supreme managing body of AK BARS Bank. It

makes decisions on the main matters of Bank activity. Carrying out the General Shareholder Meeting gives an opportunity for the Bank to inform shareholders on its activity, achievements, and plans, and enables shareholders to discuss and make decisions on the most important matters of the Bank activity at least once a year.

The bank provides shareholders with a real ability to implement their rights as its members, giving them an opportunity to receive full and reliable information about the financial situation of the Company, and the results of its activity, management, principal shareholders, and the essential facts affecting the financial and economic activity of the Company. In May 2014 the Annual General Shareholder Meeting was held. Wherein the issues related to the approval of annual accounting reports, allocation of profit, payment of dividends, modification of the Charter and internal documents of the Bank, approval of interested-party transactions and other issues were considered. Also, an Auditor of the Bank was approved, and new members of the Board of Directors and Board of Internal Auditors were elected.

The execution of decisions made by the General Shareholder Meeting is under constant control of the Bank’s governing bodies. The relationship between the Company and its shareholders is being formed on the principles of direct constructive dialogue based on unconditional observance of the Russian legislation, and maximum compliance to international standards and the common world practice. The position of the Bank owners is coordinated by their representatives participating in the activity of the Board of Directors and General Shareholder Meetings.

The Bank aspires to transparency of its activity and provides equal and timely access for shareholders and investors with information about the Company, thereby protecting their rights, together with the property interests and business reputation of the Bank.

Authorized capital stock of JSC AK BARS Bank is formed in the amount of 28 215 396 326 rubles and divided into 28 215 396 326 ordinary registered uncertified shares with 1 (One) ruble par value each.

The bank publicly reveals the information on all essential events and facts affecting its activity and any capable of affecting the cost of Bank securities, including information on the ownership structure (final beneficiaries).

The information about the owners of the Bank, structure and participation of the shareholders of the Bank, owning not less than 1 percent of its authorized capital, is published on the official website of JSC AK BARS Bank. The information on the ownership structure of the Bank is available on the Bank website as a scheme of interrelations and the list of legal entities and natural persons having control and significant influence over the Bank, as well as information on the major shareholders of the Bank, is available to everybody.

Activity of the Board of Directors and its CommitteesThe Board of Directors is elected for a certain term by the General Shareholder Meeting and

performs general management of Bank activity during the period between Annual General Shareholder Meetings, and has large power and bears responsibility for the proper execution of its duties.

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In 2014 the structure of the Board of Directors consisting of 11 people was chosen by the Annual General Shareholder Meeting. Four independent directors are included in the Board of Directors structure to ensure the objectivity of the decisions made, maintaining the balance of interest of all interested parties.

The Board of Directors, within the responsibility it is obliged to bear for Bank activity in general, actively uses its powers for solving matters of business strategy and risk management, and financial stability and corporate management, and exercise an effective control of the executive bodies activity, respecting the interests of shareholders within all operations of the Bank, etc. For the maximum compliance to international standards and increase of efficiency of economic and social activity in 2014 the Board of Directors paid considerable attention to matters of improvement of corporate procedures and its internal regulatory base, systems of internal control and risk management, and an increase of information transparency of the Bank for all interested parties.

In December 2013 the Board of Directors approved the annual business plan (budget) of JSC AK BARS Bank for 2014, and during 2014 regularly heard reports of the Management Board in the course of its realization, thus the Board of Directors prioritized the main objective of the preservation at a high level of the indicators characterizing the stability of Bank activity. The reports of the Internal Control Service on the results of Bank activity inspection and also the reports of the Bank Inspector of JSC AK BARS Bank, who is a professional participant in the securities market, were constantly heard at the Board of Directors meetings.

The Board of Directors has paid significant attention to the work done for the improvement of internal documents of the Bank. Thus, during 2014 the Board of Directors approved the Regulations "On Internal Audit Service of JSC AK BARS Bank", "On Internal Control Service of JSC AK BARS Bank", a new edition of Terms and Conditions of the Corporate Management of JSC AK BARS Bank, and also alterations in Regulations: "On limit policies of JSC AK BARS Bank", "On transactions with legal entities and natural persons related to JSC AK BARS Bank, interested-party transactions and major transactions", "On compliance policy of JSC AK BARS Bank" (Appendix No. 1 "Anti-corruption policy of JSC AK BARS Bank" is approved).

Committees of the Board of DirectorsIn 2014 Committees of the Board of Directors continued their work (on audits, on staff and

emoluments, on risks, on strategy). Within their competence the Committees closely interacted with management and supervisory bodies of the Bank, auditors, and consultants.

Audit CommitteeFour Board Directors are the members of the Audit Committee, two of them are independent.

An Independent Director of the Committee is Shibayev Sergey Viktorovich.The activity of the Audit Committee in 2014 was based on the approved work plan, in

compliance with the functions assigned to the Committee, and generally accepted practice of work organization for Audit Committees. The attention of the Committee was concentrated on realization of the events directed towards improvement of effectiveness for the system of internal control, and control of financial and economic Bank activities. During the reporting period the Committee regularly considered the plan and reports of the work of the Internal Control Service of the Bank, including the information on the main revealed violations, mistakes, and drawbacks of the Bank’s activity, and also on the actions taken for carrying out of the recommendations regarding those violations and their elimination. The Audit Committee members continued the generally accepted practice of active interaction with the external auditors of the Bank, inviting them to meetings and discussing with them preparatory procedure and the stages of audit inspections, which allowed them to have full and reliable information on the processing of the audit of financial statements of the

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Bank. The Committee continuously exercised control of the independency of carrying out an audit of The Bank’s financial statements.

Human Resources and Compensation CommitteeFour Board Directors are the members of the Human Resources and Compensation

Committee. The Chairman of the Committee (the Non-Executive Director) is Avanesyan Igor Grigoryevich.

In 2014 the activity of the Human Resources and Compensation Committee was concentrated on matters of analysis of overall performance of the staff and staff costs in the context of the transformations of the Bank organizational structure conducted under the Effectiveness Improvement Project. The matters related to the monitoring of employee turnover were under the constant attention and control of the Committee members. The Committee members initiated reformation of the staff motivation system of JSC AK BARS Bank by forming the new operational model of the Bank. Within a year the Committee also considered questions concerning the main direction of the Bank strategy in the field of region-wise remuneration of labor, implementation of the Staff Reserve program, and also implementation of the work plan for translation of corporate values of JSC AK BARS Bank.

Risk CommitteeFive Board Directors are the members of the Risk Committee, two of them are independent.

The Chairman of Committee (the Independent Director) is Levin Yury Lvovich.In 2014 considerable attention of the Risk Committee was paid to control of the progress in

the realization of the joint project with JSC PricewaterhouseCoopers consultants for improvement of efficiency of the Bank activity regarding risk management and the introduction of the international approaches in compliance with Basel requirements. The Committee considered the key indicators of the Bank activity at the application of the basic Basel principles and requirements to control the system of risk management, and also the data on working capital calculation according to the basic Basel principles and requirements.

In the reporting year the Risk Committee paid considerable attention to the situation of Bank liquidity, measures for ensuring it, and also quality analysis of assets and liabilities.

Strategy CommitteeIn practice, the absence in the structure of the Board of Directors of the Russian companies

of Strategic Planning Committees suggests a weak strategic orientation of the Board of Directors and a lack of a clear delimitation of functions and responsibilities between their members. The Board of Directors of AK BARS Bank pays primary attention to the development strategy.

Four Board Directors are the members of the Strategy Committee. The Head of the Committee is the Chairman of the Board of Directors (non-executive director) - Sorokin Valery Yuryevich.

Under the constant attention of the Strategy Committee in 2014 was the project for the improvement of effectiveness of Bank activity. The realization of which yielded the stage-by-stage reformation of the operating model aimed at the achievement of optimal business volumes at lower costs. Besides, the Committee regularly heard reports of the Management Board on the progress and implementation of the Bank budget and the main directions of development of JSC AK BARS Bank for 2012 - 2015. Among the highest priority questions considered by the Committee in 2014 there appeared questions about the activity of corporate and retail business blocks. In particular, the Committee members approved the key tasks and events of development of retail and corporate business for 2014, and also paid considerable attention to the development of the Bank’s major projects such as implementation of the accelerated program for loan servicing of small and medium-scale businesses, Online banking, and the Universal Electronic Card project.

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4. Human resources management of the BankThe structure and quality of human resources and qualification and competence of

employees have a decisive impact on the productivity and efficiency of the Bank. The main efforts in staff policy are directed towards selection and staff development, and an

increase in the level of staff interest in the results of their work by implementing the effective systems of individual motivation.

In 2014 under the project of work efficiency improvement in human resources management, the key events realized in the following directions were specified:

Organizational adjustments; Staff motivation; Staff training and development; Development of organizational culture.

Organizational adjustments The organizational structure of the Head office and territorial network during the year of 2014

underwent modifications due to the realization of the main initiatives within the Bank efficiency improvement project:

modifications in organizational and functional model of the Client Service Department, the Treasury, and establishment of cash operations at the Management head office;

transformation of a branch network due to the introduction of new office designs and changes of operating model;

events on centralization of functions of hiring and HR administration for optimization of the process of HR record management;

centralization of IT function of a territorial network; modifications in operating model of optimization and centralization of payment transactions

of legal entities, financial monitoring, accounting of internal operations, and obligatory reporting. The main ideology for the realization of initiatives under the Bank efficiency improvement

project is the reduction of the amount of provided functions in a branch network as a result of the centralization of middle, back office, and support on the basis of the new operating block - the Unified Service Center.

Results of realization of initiatives: reduction of the number of involved staff in a network from 48% to 20%, concentration of attention on sales and development of Bank activity in regions; and improvement of productivity and quality of work by standardization and simplification of business processes at the Unified Service Center and Calculations and Information Center.

According to the current projects, planned for 2014, work on the reorganization and functionality of the Head office for business positioning was carried out. As a result, an average staff number of territorial networks were reduced to 643.5, 47.5 of which were under the branch network transformation.

Motivation - realization of new motivation system for the territorial network front staff, the Unified Service Center, and AK BARS Persona Finance House.

Staff training and development - annual implementation of the complex education plan for all staff categories, containing programs for adaptive training, professional development, development of business qualities, corporate and management competencies, and teaching customer service standards. A program of training conducted in 2014 was related to the implementation of the Bank efficiency improvement project. The training was focused on the improvement of

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competencies of the branch network staff directly connected with the sale of retail and corporate banking products.

Organizational culture means implementation of programs to support the "Preferred Employer".

The competent domestic social policy provides the Bank staff with high quality educational, medical, and cultural services and implements the veteran support program. Thus, the business actually forms new social standards, which are then accepted by society. This not only improves the Company image, but also promotes the development and support of favorable social values.

4.1. Social responsibility regulations of labor and employment matters.JSC AK BARS Bank cares about the prosperity and social security of the staff and their

families. In the system of social responsibility regulations of labor and employment of the Bank are guided by accumulated proprietary experience, and also by the international standards in the field of corporate social responsibility.

The social policy of JSC AK BARS Bank is realized according to the approved normative documents, such as "Regulation on the social responsibility of JSC AK BARS Bank" where the obligations for social responsibility, regulations of labor and employment, improvement of quality of working conditions and life of the staff and their families, and also development of education and sciences are specified.

Regulation on employee benefits of JSC AK BARS Bank guarantees employees conditions for the full realization of their abilities and professional skills, and also social compensation.

Within the conducted work on employee benefits the Bank provides the following types of benefits:

• Employee benefits;• Wellness benefits;• Business benefits.Employee benefits are related to granting various dividends to employees or paying for their

services and include the stimulating, guaranteed social payments and discount programs.Wellness benefits are related to payment to employees for their services and granting

dividends to support and maintain their performance in the workplace, and improve their quality of life.

Business benefits are related to convenience of work and aimed at supporting an employees’ focus on their work.

4.1.1. The Staff structure of AK BARS BankThe average number of the bank employees amounted to 6 225 people in 2014. 59,6% of

them (3710 people) are the territorial network employees, 14,6% (908 people) are the employees of the Unified Service Center, and 25,8% (1607 people) of the Head Office.

The majority of the staff in 2014 was employed at the front office – 51%. Their functions excluded middle and back office guidance. Staff employed at auxiliary departments - 26%, Specialists of the middle office – 8%, of the back office - 15% .

Distribution of employees over the divisions

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51%

15%

8%26%

Front office employeesBack office employeesMiddle office employeesSupport unit employees

Gender and age structure of the staff in 2014: share of women - 79%, share of men - 21%.

Men Women

21%

79%

The Bank in order to develop business and increase the staff numbers attracts young specialists and university graduates for work and cooperates with high profile institutes throughout Russia, which is embodied in the age structure of the staff. In 2014 the number of employees under 29 years made 46% of the total number of the Bank employees. 30-39 years - 30%.

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Under 29 30-39 40-49 50-59 60 and older

46%

30%

15%

8%

1%

4.1.2. Payment policy and staff motivationAK BARS Bank considers remuneration of labor as a component of the integrated system of

material and non-material stimulus of the staff, which allows maintaining its ability to compete, and attracting and retaining qualified employees. The system of basic remuneration of labor adopted in 2008 for setting of official salaries allows the control of expenditures related to remuneration of labor by using clear rules of official salary adjustment within the limits defined for each position.

The bank traces the situation in the labor market by participating in all national reviews, which allows consideration of the cost of Bank employees in the labor market, adjusting remuneration depending on the qualifications and overall performance of the employee.

Adjustments in remuneration of labor are performed both by the official salary of the staff, and in salary bonuses for personal productivity.

Bonuses paid for work resultsThe front office providing services for natural persons and legal entities, the Unified Service

Center, and AK BARS Persona Finance house.

Front office providing services for natural persons and legal entitiesFor the improvement of sales efficiency in 2014 the individual system of staff motivation

was introduced in the front office providing services for natural persons and legal entities, which was directed by an individual assessment of each employee’s performance.

Unified Service CenterIn 2014 the staff motivation system was introduced in the Unified Service Center. Depending

on the department type the individual system of staff motivation or bonus payment for the productivity of a structural subdivision was provided.

The system of staff motivation for the telemarketing group of the Contact Center of the Unified Service Center was introduced to increase Bank product sales by the effective organization

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of work on communication and customer attraction by the means of electronic communication channels. The main purpose of the introduced motivation system was the increase in number of productive calls and improvement of their quality.

AK BARS Persona Finance HouseIn 2014 the staff motivation system was introduced in departments providing services for

important clients of AK BARS Persona Finance House. The main purpose of the introduced motivation system was providing bonuses for individual work results, stimulation of sales, and quality improvement of the services provided for important clients.

The motivation system, introduced in 2014, showed its efficiency and resulted in quality improvement and quantity increase of the Bank product’s sales.

4.1.3. Non-financial staff motivationThe non-financial staff motivation provides strong stimulus for work effectiveness and has a

great influence on a positive image of the employer. The corporate events, held for development and maintenance of organizational culture, helps

to bring employees together, creating a favorable atmosphere in the company to strengthen the team spirit of the employees.

One of the most important factors of non-financial motivation in the Bank is Incentive compensation and recognition of employees’ achievements. In 2014 6 employees of the Bank were recommended for state decorations, and 95 employees were awarded with internal awards of the Bank for long, productive labor and achievements in solving issues occurring in the workplace.

The Bank continues to use such multipurpose tools as carrying out corporate competitions for motivation and increasing employees’ loyalty to the Bank.

In 2014 the children’s creativity competition, traditional for the Bank, on the "Features of the National Culture" topic dedicated to the year of culture in Russia was held. 235 employees’ children presented over 300 hand-made works done in various styles for the competition, including plasticine, laces, wood, beads, etc. Following the results of the competition, winners in 3 age categories were defined and awarded, and all participants received gifts from the Bank in the form of developing games.

In 2014 a number of professional competitions were introduced. Since the second quarter of 2014, and now on a regular basis, the competition of Heads of additional offices aimed at their and their employees’ motivation for more productive work is held.

Corporate events are an important part of organizational culture and a promoter of corporate values.

Corporate events bring employees together and allow them to be on the same page. It is a unique opportunity to meet colleagues so called “without ties”, in an informal atmosphere and to learn about people from the other side. Therefore, carrying out corporate holidays for AK BARS Bank employees yields a good tradition.

In autumn of 2014 a complex set of sport exercises for 2320 employees was held for the realization of health improvement and sport projects in the Bank. The complex of physical exercises included push-ups, pull-ups, shuttle run, and crunches. In general, all employees had sufficient physical conditions for their age. 24 employees who showed the best results in their age category were awarded sport shop gift certificates.

Under the strategic sessions of 2014 the team building events for directors of the Bank branches and their deputies were organized. In the first quarter of 2015 heads participated in the

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intellectual game "What? Where? When?", Valentina Golubeva - the expert of the same name club of the city of Moscow acted as the host of the game. In the fourth quarter a quest in the historic center of the city, "In search of treasures", was organized for heads of the Bank branch network.

Besides, in 2014 for particular structural departments of the Head Office and Unified Service Center corporate nature trips for the organization of informal communication between employees were organized. For instance, in September of 2014 the staff of the department of telephone verification and registration of credit requests participated in a “rope course” to develop team building in the workplace.

Together with the "AK BARS - Creation" Fund in order to provide charitable support in March 2014 the "Present Life - Become a Donor" program was organized. Under the program the Bank staff donated blood and donated the money they received to charity, to help a boy named Vasilyev Sergey suffering from leucosis.

In 2014 the work on career development and horizontal rotation programs was continued, allowing the Bank staff to occupy even more interesting professional positions and gain a wide range of business experience. In the personnel reserve program the basic principle of AK BARS Bank – the harmony of interests- is observed; after all, new “familiar” positions in the Bank for the employee are convenient and favorable, and the Bank, on the other hand, improves its own employees’ qualifications by developing their professional skills and knowledge.

Within the work performed in 2014 principal attention was paid to the development of skills of new Heads appointed to their positions from a personnel reserve under the formation of the Unified Service Center in 2013. Training of 85 Heads was aimed at the development of management competence for the correct assignment of tasks and control over their execution, and at staff motivation and team building in the workplace.

4.1.4. Corporate valuesThe mutual corporate values are the values which develop trust and unite the company staff.

In AK BARS Bank such values are the face of the staff, which is being recognized in all spheres of its activity.

The key principles and rules of corporate behavior and ethics of JSC AK BARS Bank are regulated by the Terms and Conditions of ethics accepted by the Bank. Corporate values, which are the cornerstone of the corporate spirit of AK BARS Bank, are based on 20 years of experience and follow the unified culture of business.

In the Bank purposeful work on broadcasting corporate values through projects of training and development, and also means of internal and external PR, is conducted. So, for translation of corporate values, the portal of information defining the main behavior standards and guidelines for the organizational culture of the Bank is used.

In 2014 seven articles on the main and brightest life events of the Bank were placed. Those articles included main behavior standards and guidelines for organizational culture of the Bank: a series of articles devoted to modifications of the motivation system of the territorial network’s front office staff: "An award for result" and "The bonus results of the 1st quarter", "Results of the half-year period of 2014", the article devoted to modifications in training system: "Training - a basis of the Bank efficiency", "What is good for a swindler, for the bank - revocation of license", "Summing up the results and specifying the objectives …", and " The Bank staff under modernization of the Bank structure".

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4.1.5. Employment and labor law The Bank activity, aimed at protecting the principles of equal rights and opportunities for all

employees in the sphere of labor and preventing of any forms of discrimination and forced labor, promotes professional and personal development of the employees. These principles are defined in local regulations of the Bank in the sphere of human resource management which are accepted in accordance with the requirements of the international and Russian legislation.

In accordance with "Regulation on staff recruitment", the Bank observes the equal rights and opportunities for applicants for the consideration of their applications and their hiring for the job. Other local regulations oversee the equality of labor law and personal freedom when carrying out a procedure of assessment, promotion, emolument, and training of employees.

4.1.6. Training and professional developmentIn the Bank the continuous system of training is built to support staff qualifications at the

level of the current and prospective needs of business and constant updating of theoretical and practical knowledge of managers and experts.

Training at the Bank includes: • external training of managers and specialists of the Bank Head Office by professional

programs, seminars, forums, and conferences; • training of managers and experts of a territorial network with involvement of external

providers of educational services in a corporate format; • internal training using a corporate format with transfer of knowledge from managers of

various departments of the Bank to the other staff of the Head office or a territorial network;• internal training of employees through implementation of proprietary training programs by

the Assessment and Development Center. Programs for Staff training and development in 2014 involved the staff of all structural

departments of the Bank: employees of branch networks, Unified Service Center, and Head office. In total 3 750 employees were trained in 2014. 375 employees of the Head Office participated in external training events: seminars, conferences, and forums.

Implementation of the training and professional development programs for employees, which started in 2013 under the project for an increase of efficiency of the Bank, continued in 2014.

Effectiveness improvement projectUnder the realization of the Effectiveness improvement project at the beginning of 2014, the

product and skill training of the selling staff of the branch network front office related to the transition of branches to a new operating model was performed. Product training was provided by the staff of the Staff Recruitment and Training Department. Skill training was provided by the outside training companies selected in the terms of competition from different regions of the Russian Federation according to the programs developed by the Assessment and Development Center of Staff Recruitment and Training Department.

For professional development of corporate business employees, the training programs for the branch network’s corporate block employees were implemented. Trainings on cold calls, techniques for negotiation, and selling corporate products for client managers of medium and small-scale businesses, and training on cross-sales for employees providing cash management services for legal entities were conducted by the external company. In total 26 trainings were provided and 440 employees were trained: 120 client managers of medium and small-scale businesses and 320 employees providing cash management services for legal entities.

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3 educational sessions for 94 heads of the retail business department of a branch network on the transfer of a training technique to the employees were held.

After completion of education sessions, the heads participated in education sessions and the employees of Staff Recruitment and Training Department realized these programs for specialists of work with clients, operators-cashiers, employees for retail business development, and heads of additional offices of branches. 60 trainings for 612 work with client specialists, and also a cycle of trainings on sales and cross-sales of the Bank retail products for 1050 operators-cashiers and 33 trainings on target models of sales for 205 employees of a branch network were provided.

In 2014 professional development programs for the Bank heads through development of administrative competences were realized:

- the modular two-stage program of training for 75 heads of the Unified Service Center by “Expeditious Management” program was conducted;

- administrative trainings for department heads of the corporate block of a branch network were provided;

- administrative trainings on motivation and coaching for department heads of the retail business of a branch network are realized.

Also, due to modifications in the business process in the third quarter of 2014, the programs of training on work with past-due indebtedness of legal entities for the staff of the Head office, Unified Service Center, and branches were realized. Under the project of centralization of personnel office-work, the training for secretaries of a branch network was provided.

Five-day internal adaptation programs "School of a Verifier" and "School of an Underwriter" with a final assessment were implemented. They were successfully completed by 42 recently hired employees.

Training in the current activityFor the purpose of solving the current problems of the Bank, the emphasis was still placed on

the internal training of employees, which is due to a number of advantages of this type of training, such as the adaptability of internal programs for Bank specifics, prompt response of the training events to changes in the external and internal environment, and dedication of training programs to achieving the strategic objectives of the Bank.

The adaptations of training programs were implemented under the internal training system. Adaptation programs are primarily focused on reduction of operational risks and control of the probation period of the Bank staff recently accepted or transferred to a new position. An adaptation of the Bank staff is conducted in an internal and remote format. During the year of 2014 the intramural adaptation programs for the specialists of the front office of a territorial network were conducted.

The practice, performed since 2009, on carrying out the introductory seminars ("Welcome-training") at the Head office and branch network has continued. For 511 recently hired employees of the Head office and Unified Service Center 18 similar training programs were conducted for the whole year. Introductory seminars in the form of a webinar for recently hired employees of a branch network were held for the first time. Eight webinars were conducted in total.

Strategic sessions for the Heads related with business operations of the branches were held. During such sessions the participants got familiar with strategic business challenges, prospective plans for the year, and innovations in standard documentation, and product line and business processes, and they analyzed and discussed relevant problems and matters. Three strategic sessions were organized and held during the year of 2014.

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In the first quarter of 2014, after the subsidiary bank Naratbank joined as the Saratov branch, comprehensive programs of training for the staff of the new branch’s front office on product line, business processes, work in ABC, and instruments for banking product sales were conducted.

In 2014 the Retail Business Department started a new project called "Without turns". The purpose of the project is transfer of client flow of the Bank to self-service devices. For implementation of this project in the fourth quarter of 2014, 14 consultants of the Kazan, Nizhnekamsk, and Naberezhnye Chelny branches were trained.

For the purpose of skill level maintenance, sufficient functions for effective execution, and the continuous updating of theoretical and practical knowledge of employees, the strategic sessions for linear employees and Department Heads of the branch network were held. In total 119 employees were trained.

Also in 2014 the comprehensive programs of training for the branch network employees engaged in loan servicing of small business were realized: questions about monitoring the limits of loan servicing, credit analysis, and loan demand were considered.

Innovative technologies in trainingIn 2014 in the Bank the Internal Trainers Institute was established, in which two regional

trainers for the Naberezhnye Chelny, Nizhnekamsk, Yelabuga and Northwest, Moscow, and Nizhny Novgorod branches were accepted. Establishment of the Internal Trainers Institute allowed taking the training system the Bank to a higher and more effective level.

Under implementation of the project on Bank efficiency improvement, the system of mentoring in workplaces for the front staff was put into place, which allowed for the new employee to enter his position faster, and for the Bank to reduce operational risks in the first days of work for new employees.

The introduction and use of a two-day educational session format for the transfer of a technique for carrying out the training events became one of the innovations of training. This format allowed training a large number of employees of a branch network by the technique developed by the Bank using internal forces - resources of Department Heads at minimum material costs.

4.1.7. Staff assessment of the BankEvaluation of the staff work of the company is an important component of management

control of the Company staff. In 2014 the evaluation procedures were undergone by 1145 employees of the Unified Service Center and the branch network.

More than one thousand employees were certified by the testing system, assessment interviews, and more complex techniques of qualification assessment, thus proving the compliance to qualifications for the position held.

For the first time, selective certification of 100 employees of the Unified Service Center was conducted to strengthen the control of Heads and the development of self-control of the Bank employees, whose functional duties are related to a high level of operational risks,

Traditionally for the purpose of control of execution of customer service standards for natural persons, quarterly activities for assessment of the work quality of the employees of a branch network’s front office are carried out by the “A Mysterious Visitor” method.

In total 274 service points, including 471 employees working in the field of service and consultation with natural persons on deposit, credit products, and debit cards were examined. Assessment of legal entities’ service level in branches is realized through the "A mysterious visitor" internal examination at 165 bank offices, and also using phone calls for employee communication in the second half of 2014.

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The results of 2014 revealed positive tendencies in the quality improvement of the services provided legal entities and the work of client’s specialists for natural persons.

4.1.8. Employee benefits of the BankThe most important part of the social policy of the Bank is Employee benefits. Such benefits

cover all employees of the Bank Head office and regional departments irrespective of position, status, and length of employment.

Corporate Employee benefits are divided by social, vital, and business benefits.Employee benefits are connected with granting advantages to employees or service

payments for using personal means, time, and efforts. Employee benefits of the Bank include:• stimulus payments (paying bonuses on the ground of key indicators of efficiency, pay raise

for a long length of service in the Bank, retirement benefits)• guaranteed social payments (incentive payments for families, emergency assistance

payments); • discount programs (granting discounts for the Bank staff on the use of products and

services of the Bank and its subsidiaries: preferential loans, discounts on products of the subsidiaries, discounts on products and services of the companies - partners of the Bank, etc.).

Providing discount programs allows the Bank staff to use the products and services of the Bank and its subsidiaries on profitable terms. The Bank staff can participate in loyalty program in the following directions:

• products and services of the Bank;• products and services of subsidiaries;• products and services of companies - partners of the Bank.The loyalty program of the Bank is being developed constantly and realized by the Bank for

the most in demand banking services: loans (mortgage, consumer loans, car loans, credit card loans), cash management services, and other products and services.

Preferential loans (mortgage and consumer loans, car loans for new and used cars, credit card loans) provide advantages to the Bank staff, including a simplified process of obtaining loans, excluding or reducing of the charges for performing bank operations, shorter duration of document consideration, fewer application forms, no income confirmation, etc.

Under the loyalty program for the products and services of the subsidiaries, the Bank staff and members of their families are able to obtain special conditions for the services of subsidiaries on property insurance (transport, housing, civil liability before third parties), life and health insurance (accidents), medical assistance, and other services of subsidiaries.

Under the loyalty program for the products and services of the company partners of the Bank, the Bank staff is able to get their products and services on profitable terms.

Wellness benefits of the Bank include sport activities, physical culture and health improvement, recreation and, gifts. To support the maintenance and development of healthy lifestyle, the Bank:

• organizes tournaments for different types of sport (A sports contest for the Bank employees, mini-soccer tournament, competitions in volleyball, hockey, tennis, etc.);

• conducts physical culture and health activities and develops popular sports among employees and members of their families, providing them an access to sport infrastructures, and organizing trainings and competitions for the Bank employees;

• provides the Bank staff with reduced price gym memberships and tickets for sport events;• organizes routine events, according to approved expenses in the budget, aimed at

prevention of diseases and early detection and prevention of development of serious diseases

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affecting the Bank staff, and also vaccination of employees of the Bank that allows a reduction in incidence of illness of Bank employees during the epidemic rise;

• provides financial support in terms of ticket compensation for health resorts and children’s health improvement camps for the children of the Bank employees.

The bank pays material incentives to employees for holidays and anniversaries, conducts corporate events and festive events, and provides gifts for children of employees and unemployed pensioners of the Bank.

Business benefits are provided to the employees of the particular official categories or for business needs. The business benefits of the Bank include:

• the centralized providing of company vehicles, covering taxi fares for night shift employees;

• cell phone fee payment;• organization of training, professional retraining, and professional development, including

external training (seminars, courses, conferences, educational programs, training, Presidential educational program, MVA, etc.) and internal training of the Bank staff.

Thus, a properly built and effectively realized system of assurances allows the Bank to regulate responsibly the matters of labor and employment, to improve the quality of working conditions and life of employees and their families, and also provides the Bank with highly professional and loyal staff.

4.2. Quality of working conditions and life of employeesIn order to guarantee high efficiency labor in the Bank, workplace conditions of employees

should meet the most modern requirements. The modernized, comfortable workplace promotes an increase in working capacity and develops the potential of each employee. The bank observes all requirements for organization of a workplace of employees both at the time of opening of a new location, and during its operation.

Besides, employment policies and procedures managing the process of hiring and dismissal of employees, basic rights and duties, hours of operation, resting time, Incentive compensation and penalties, and other regulatory matters of labor relations were approved in the Bank.

Considering the interests of consumers of retail services and the standardization the territorial network activity, the Bank introduced the "Operating mode of JSC AK BARS Bank Customer Service in the Territorial Departments Providing Retail Services" Standard. This document orders working hours of territorial departments and establish their uniform operating mode, thus increasing the recognition of the AK BARS Bank brand.

4.2.1. Sport, recreation organization, culture and health eventsIt is well-known that the concepts of "Company Success" and "Corporate Holidays" are

interconnected. Joint rest helps to bring employees together, gives them the chance to know each other, to find common interests, and sometimes to reveal personal qualities in a non-standard situation. Corporate holidays promote the creation of a favorable atmosphere in the collective, and relieve the stress and tension of employees.

Sport is also an excellent method of supporting the corporate spirit. Especially team sport helps to unite separate members of the collective, to teach them to work in harmony.

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4.2.2. Employee benefits for families The management of the Bank takes care not only of its employees, but also of their families,

providing them a package of benefits and assurances.In 2014 employees of the Bank received the following types of social payments:Guaranteed social payments - 13,4 million roubles:• entering into a legal marriage for the first time;• at the birth (adoption) of a child; • monthly payments for unemployed mothers - to the employees of the Bank having children

from 1,5 to 3 years old;• in respect of death of close relatives (parents, children, husband or wife); • in respect of an anniversary;• in respect of old-age retirement;• according to the decision of the commission on social issues;• financial support to the employee's relatives in case of his death.• reimbursement of tickets to children health improvement facilities. Payments for support of motherhood and childhood - 1,3 million roubles:• reimbursement of tickets to children health improvement facilities. • reimbursement of "Mother and child" tickets.

4.2.3. Support of elderly people and unemployed pensionersConsidering the socially vulnerable position of unemployed pensioners, AK BARS Bank

implements a purposeful support policy for pensioners and conducts systematic programs of help. Throughout 2014 in gratitude for their valuable labor our pensioners received from the Bank payments for their main anniversaries and old-age retirement. On the International Day of Older Persons the unemployed pensioners traditionally meet for a festive event with tea drinking and presentation of gifts.

4.3. Development of education and sciences During 2014 the main programs directed for the involvement of young specialists, and also

positioning among students of the highest profile and specialized secondary educational institutions of a positive image of JSC AK BARS BANK as a potential employer were realized.

On September 4, 2014 the awarding of «JSC AK BARS BANK Grants " program winners took place. 10 students received honorable diplomas and bank cards with grant funds added. More than 100 students from 20 cities of the Republic of Tatarstan and Russia participated in the competition: Kazan, Naberezhnye Chelny, Almetyevsk, Orenburg, Chelyabinsk, Krasnodar, Ulyanovsk, Nizhny Novgorod, Krasnoyarsk, Leninogorsk, Ufa, Samara, Tyumen, St. Petersburg, Rostov, Volgograd, Joshkar-Ola, Omsk, Kemerovo, and Yekaterinburg. 26 students entered the second round by the results of a competitive works assessment. They were later interviewed by the grants commission consisting of the Heads of the Bank’s structural departments.

In 2014 cooperation with the Kazan (Volga-Region) Federal University on the joint project "Business school JSC AK BARS BANK" was continued. The project’s purpose is in a short time to train qualified specialists in the Loan Servicing of Legal Entities program. In total four groups consisting of 29 students were chosen and trained. The employment of 28 students at the Corporate Business Management Department of the Unified Service Center became a result of this educational work and vocational training.

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In addition, visits to "Vacancy Fairs" were conducted for the implementation of the strategic HR initiative of AK BARS Bank aimed at the attraction of young prospective students for possible subsequent employment on a regular basis:

• 17.04.2014 - Vacancy Fair for the students of KAI Institute "Spring-2014", 4 th and 5th

year students are participated;• 16.05.2014 - the Seminar of employers in Kazan Bank School;• 19.05.2014 - "Open Day" in Kazan Bank School;• 20.05.2014 – Vacancy Fair for Kazan Bank School graduates.• 17.06.2014 - Participation in diploma defense of Kazan Federal University for

bachelors/experts/masters of bank management. To create a personnel reserve for the future, AK BARS Bank actively attracts students for

externship and pre-graduation practice. The Kazan Federal University and Kazan Business School educational institutions are the first priority. In the academic year of 2014 the number of trainees at the Head office was 72 students.

In the Bank territorial network 30 students have accomplished practical training.

5. Labor protectionWorking conditions have a huge influence on efficiency and economic results for the

organizations of any ownership form. The health of the staff as a main productive force, and the level of their life and all-round development depend on the policy of labor protection. JSC AK BARS BANK sets tasks in the field of labor protection decision which provide a maximum level of safety at work of its employees.

For the implementation of continuous improvement of activities for labor protection, JSC AK BARS BANK is endeavoring to correspond to international standards: OHSAS 18001:2007 "Systems of management of professional safety and health. Requirements", OHSAS 18002:2008 "OHSAS18001 User Guide", and also to the requirements of federal laws and other regulations.

In 2014 on the basis of the structure offered by the auditing company PricewaterhouseCoopers, reorganization of the Security service of labor of the Bank in accordance with the current legislation of the Russian Federation was conducted.

Every year at the Bank a schedule of events for the improvement of working conditions is approved and funding for labor protection in the amount of not less than 0,2% of the total expenditures of the Bank is provided. For schedule creation, working conditions in workplaces in two directions were previously examined: production control and special assessment of working conditions. So, 3707 workplaces passed production control last year, for the special assessment of working conditions - 283 workplaces. As requested by the Federal service on customers' rights protection and human well-being surveillance, unscheduled sanitary and epidemiologic inspection of ventilation and conditioning systems and laboratory researches of air on the content of harmful chemicals were conducted. To correspond to existing standards of sanitary legislation, control of illumination of workplaces and timely replacement of bulbs and lamps were carried out.

All employees of the Bank in due time are trained on labor protection and examined on labor protection requirements in the order established under the current legislation of the Russian Federation.

New employees and employees being transferred to other work are instructed on labor protection and trained on safe methods and methods of work performance. During the reporting period, external special training on labor protection of 40 heads and experts and the subsequent examination was conducted. In 2014 the video "Induction for Labor Protection", used for the

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induction of new employees regardless of their education or length of service by current profession or in their current position, was updated.

Familiarization of employees with the requirements of labor protection is carried out by electronic access to the Labor Protection database of IBM Lotus Notes, access to which is available for all employees using PCs.

The employees working in harmful working conditions and also at the works connected with vehicle traffic have to undergo preliminary medical examination (for new employees) and periodic medical examinations to determine the suitability of these employees for work and prevention of occupational diseases. Employees involved in catering undergo the above mentioned medical examinations for public health protection and prevention of the emergence and distribution of diseases. At the identification of medical contraindications employees are sent for additional inspection at the Bank’s expense.

Drivers pass a medical examination every day; for that purpose a health post is located in the Head office building. Reception is conducted by a therapist of the highest qualification category and a nurse of the highest qualification category. In the health post emergency medical services, medical procedures, examination, and consultations are carried out as well.

Such events allow an estimation of the dynamics of employees’ health condition and to reveal and fix emerging problems in time. In 2014 932 people underwent periodic medical examinations and 1015 – preliminary examinations upon entering employment. All employees were provided with the opportunity to undergo a photoroentgenography.

Sanitary posts are located in all buildings of the Bank for first-aid treatment in case of emergency.

The employees working in harmful working conditions, under special temperature conditions, and in pollution are provided with special clothing, shoes, and other forms of individual protection, detergents, and disinfectants in accordance with established norms of the Bank. In total 702 employees were provided with such protective means.

To provide optimal working conditions and sustaining the Bank image in compliance with the Brand Book of JSC AK BARS BANK, AK BARS Persona Finance house employees and some other experts are provided with official uniforms. In total 70 employees were provided with such uniforms.

Two industrial accidents occurred in 2014. In the first case the employee fell down because of a strong hurricane while outside of Bank property and suffered a left shin fracture. In the second case the employee violated traffic regulations, and as a result a road accident occurred; two employees died, and one person suffered severe injuries. 0,06 percent of the average staff number have suffered operational injuries.

Operational injuries (2014)Average staff number, persons 6 225

Number of injured, persons 4% of operational injuries 0,06

All operated buildings and constructions of the Bank are subject togeneral technical inspections twice a year for development of suggestions for improvement of the technical operation of buildings, and for the quality of all repair works.

According to the approved Plan in 2014 expenditures on labor protection events amounted to approximately 26 million rubles.

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During the reporting period, Work Safety Service of the Bank received more than 3000 addresses from employees. The specialists of the Service gave detailed consultation in accordance with the current legislation on labor protection to each address.

6. Socially responsible participation of the Bank in Public LifeAK BARS Bank holds the opinion that business has to serve the public. Therefore, our

production, organizing, financial, economic, and public work is closely related to charity. For many years the Bank provided charity support to natural persons, organizations, government institutions, public, and ecological organizations. A special attention is paid to help children with severe health problems.

The total amount of social investments of JSC AK BARS the BANK in the reporting period was more than 200 million rubles.

Many charitable initiatives of the Bank are targeted and implemented together with the AK BARS CREATION Charity foundation.

6.1. Commission on sponsor support and charityAK BARS Bank receives thousands of letters requesting help and support during the year.

The geography and subject of addresses are so different and require joint consideration and decision-making. For over 12 years the Commission of Sponsored Help and Charity, which enables carrying out philanthropic activity systematically, modernly and effectively, has successfully functioned in the Bank.

The Commission of Sponsor Help and Charity develops effective policy of the Bank in the sphere of charity activity: it works with the addresses of citizens and organizations, makes decisions on the rendering of assistance, and specifies the main development directions for this activity.

The Commission consisted of the Chief Accountant of the Bank, the Head of Advertising and Public Relations Departments, the Deputy Director of Risks Department, and the Head of Regional Business Department. The Chairman of the Commission is the Vice Chairman of the Management Board of JSC AK BARS BANK, Gubaidulin I.E. The decision on the rendering of assistance is made jointly in the presence of quorum by a majority vote of the Commission members attended the meeting. Meetings are held if required, but at least once a month, control of execution of the decisions made is exercised by the Commission’s Secretary who is not participating in the voting.

6.2. Support of Educational InstitutionsProgressiveness, innovation, and activeness are only some of the qualities which the younger

generation has to possess to be competitive. Today's pupils and students will lead the large multinational corporations and research centers tomorrow, move forward the national economy, and represent it on the international scene. But only on one condition, if the education system is modern and effective. Therefore, one of the most important directions of charitable support of AK BARS Bank is in educational institutions.

The bank traditionally provides support to all educational system components - to kindergartens, schools, and higher education institutions. By this support various events of scientific, professional, educational format are held, material and technical resources are being renewed, and rural schools and kindergartens are being built and repaired. So, in 2014 such support was provided by the Bank to kindergarten "Lebedushka" of the Tukayevsky region of the Republic

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of Tatarstan by carrying out restoration works, and to the teachers of the Kamsko-Ustyinsky region of the Republic of Tatarstan who received an opportunity to increase their professional level.

"Gift to the first grader"Among the numerous social projects of AK BARS Bank, the annual event "Gift to the First

Grader" holds a specific place. The event covers tens of thousands of children throughout Russia and bears an important mission – teaching younger generation to be tolerant, ad love their country, native culture, and language.

"The gift to the first grader" is a book and a computer game for studying of the two state languages of the Republic of Tatarstan: Russian and Tatar. A unique edition is annually developed by the leading methodologists, artists, and animators from the city of Kazan and Russia, and it helps the child to plunge into language atmosphere by creating fascinating plots without duplicating the training program. In 2014 a book and an interactive CD titled "Barsik and City of Professions" in The Knowledge Day were received by 50 thousand children from Tatarstan and other regions of Russia with a high percentage of Tatar-speaking population.

6.3. Support to children with limited physical capacities and to the children with difficult life situations

The complexity and scale of the tasks related to providing favorable conditions for the development and activity of orphan children, children without parental support, and also children from large and lower-income families requires wide public support. Therefore, one of the most important tasks of charity work for AK BARS Bank is the creation of better conditions for the children with difficult life situations. Together with AK BARS SOZIDANIE Charitable Foundation we annually finance the projects aimed at supporting seriously ill children, disabled people, and children without parental support.

Assistance to child care social institutionsSince 2008 the Yelabuga orphanage has been under the patronage of AK BARS Bank. The

bank not only gives systematic targeted financial assistance to children, but also actively participates in education and support of future citizens and reveals young talents among them. So, in 2014 the children of the Yelabuga orphanage by the financial assistance of the Bank participated in and showed good results in competitions of the republican, Russian, and international levels.

"Help to prepare for school" The charity event "Help to prepare for school" is carried out in Tatarstan at the initiative of

the President of the Republic. Under this event the children in difficult life situations received help for preparation for a new academic year. In 2014 through the donations provided by AK BARS Bank, children from low-income and unfortunate families of the Zainsky, Tukayevsky, Tetyushsky, and Kamsko-Ustyinsky regions of Tatarstan came to school on September 1st with new school bags behind their shoulders, and in a comfortable school uniform and footwear for receiving a necessary bundle of knowledge.

6.4. Social protection of senior citizens, help to socially unprotected groups of the population, and to disabled people

Change of the social status of old people and the place of the disabled person in society connected with the termination or limitation of labor and public work creates serious problems for

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senior citizens and disabled people. Often they are locked within four walls with no work opportunities and a decreasing number of contacts. Many of them are not able to manage their lives independently. All these people require support on a regular basis. For this reason, for many years the Arsky nursing home, with 50 residents living in it now, has been under the patronage of JSC AK BARS BANK and AK BARS SOZIDANIE charitable foundation. Every year in the International Day of Older Persons all the residents traditionally receive grocery sets from AK BARS Bank. Besides, in 2014 for residents of the patronized nursing home the sensory room was provided. The room not only helps to achieve relaxation, but also helps activate various functions of the central nervous system.

Under celebration of the International Day of Older Persons through the support of AK BARS Bank, AK BARS SOZIDANIE charitable foundation together with the Veteran’s House of the Nizhnekamsk municipal area held charity events, where veterans and lonely senior citizens of Nizhnekamsk and the Nizhnekamsk municipal area were presented with grocery sets.

The Victory DayThe Victory Day is extremely important and a very significant date reminding us of our

brothers in arms, and their absolute courage and heroism. Coordination of authority efforts of all levels, public institutions, and public organizations in a joint implementation of a wide complex of the legal, organizational, and practical actions associated with this holiday is perceived as a tribute of deep respect for their great feats and serves as an important guideline in the patriotic education of the younger generation. AK BARS Bank cannot be excluded from these events and always offers its help for carrying out them out. Thus, in 2014 with the financial participation of the Bank, solemn holidays in honor of the Victory Day were carried out in the Nizhny Novgorod Region, Kazan, and many municipal regions of the Republic of Tatarstan.

6.5. Public health improvementHealth is a state of wellbeing not only physical, but also spiritual, and even social. That is

why the protection and strengthening of the health of the population, extension of the period of active aging and life expectancy of people is one of the main ultimate goals of the state. That explains the large amount of investments allocated by AK BARS Bank for the Strengthening of Public Health programs under charitable activity of the Bank. Thus, the Bank has a comprehensive approach to the solution of this problem, which is allocating of funds both for treatment of people, and for promotion of a healthy lifestyle and sport among children and young adults.

Financing of treatment of seriously ill patients Financial assistance to seriously ill patients is our sincere attempt to provide a free aid to

people who need a serious and expensive medical treatment. We would like the financial aid provided by AK BARS Bank to become a powerful and productive contribution to the long and difficult process of their recovery. We are trying to provide help to each person asking as for it, regardless for their age or social status. Our priorities are, primarily, children and also people in need.

It should be noted that the Bank staff never remains indifferent to a request for financing of treatment of children as well. So, by the funds raised from the staff of JSC AK BARS BANK, Mukhametzyanov Jasmin and Ibragimova Landysh got a chance for recovery. The girls were

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suffering from a serious illness, but today they receive a medical treatment and take modern medicines.

Besides, for several years among the Bank staff a tradition exists of conducting weeks of the donor. In 2014 our employees not only willingly donated blood, but also took active part in a charitable action to save the life of a child suffering from cancer.

Support of sport and healthy lifestyleFor development and promoting of sport in Russia, AK BARS Bank supports children's,

amateur, and professional sport clubs and federations, assists in the organization and holding of competitions of various levels, encourages young athletes, and participates in programs directed at promotion of a healthy lifestyle and physical culture.

AK BARS Bank carries out long-term and short-term sport sponsorship projects. In 2014 the Bank traditionally was the general sponsor of UNIKS basketball club, the general financial partner of football club "Rubin", and hockey clubs "Ak Bars" and "Neftehimik".

Besides, in the reporting period the Bank rendered assistance in the organization of a number of sporting events. So, financial assistance for Federation of judo of RT was provided for holding an annual republican tournament for children and young adults in judo - "Healthy children - happy future". For the encouragement of talented young judoists the Children's festival of combat sports was held by the Children's single combat and judo sport club of RT through the financial assistance of the Bank.

Preservation and strengthening of water sport traditions in 2014 were promoted by the help of the Bank to the Powerboating Sports Federation of RT in acquisition of the sport motor-boat for participation in the championships of Russia and Europe. For promoting football among youth and improvement of the sport skills of young football players, the Bank helped to carry out the IX International Youth Football Tournament in the city of Nizhnekamsk. An autocross competition was held in the city of Bugulma last year with the help of the Bank. Also sponsor support to the "Development of Youth Sports School "Volna" charitable foundation was provided for promotion of a healthy lifestyle among youth.

6.6. Support of gifted children and young adultsAK BARS Bank pays special attention to the support of talented children and young adults. In 2014 the Bank traditionally supported the "50 best innovative ideas for the Republic of

Tatarstan" competition among young scientists. 10 authors of the best innovative works got monetary awards from AK BARS Bank.

Besides, in 2014 children's creative collectives "Schastlivoe Detstvo" and "Assorti" were provided with financial assistance from the Bank.

As of today, the "Business school", established by the Bank together with the Kazan (Volga) Federal University for selection of the most talented students, their training, and further employment, functions successfully.

For over ten years the BANK has not lost its popularity and competition for grants of JSC AK BARS. In 2014 deserved grants during the whole academic year were provided to the 10 best students.

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6.7. Work with state institutions particularly concerning the implementation of socially oriented projects and development of mass culture

The development of economy, infrastructure, and culture, and social wellbeing of citizens is hard to imagine without the participation of business, and in some cases it is not possible at all. Therefore, the question of creation of an effective alliance between the authorities and businesses for the solution of socially significant tasks has become most topical.

The bank allocates financial assistance for support of national projects, carrying out sporting and cultural events, construction and reconstruction of social institutions, implementation of charity programs, and others. So, in 2014 the Bank allocated funds to the Aktanyshsky region of the Republic of Tatarstan for holding a meeting of leaders, to the Kamsko-Ustyinsky region of the Republic of Tatarstan for honoring the best families of RT, and to Chuteevsky rural recreation center for the acquisition of musical equipment and tennis tables.

Besides, such large events in the regions of the Republic of Tatarstan and the cities of Russia as City Day, Sabantuy, and New Year's celebrations are always organized and held through the financial participation of AK BARS Bank.

6.8. Environmental protectionSupport of programs aimed at environment protection is another direction of socially

responsible activity of AK BARS Bank. Providing support of the Kazan zoological and botanic garden in the exhibition and management of a snow leopard takes a special place among the ecological projects receiving financial assistance from the Bank. The Bank, which bears the name of this amazing and rare animal which is also a state symbol of the Republic of Tatarstan and a symbol of the Olympic Games in Sochi in 2014, could not help but take part in this initiative. The management of the snow leopard is under the full material security of AK BARS Bank for many years. Today Tamerlan is a pearl and a pride of the Kazan zoological and botanic garden and the entire Republic of Tatarstan.

6.9. Support of art and cultural programsAK BARS Bank considers it important to implement programs for preservation of cultural

heritage and to popularize art events. To support art projects, the Bank promotes the preservation of cultural continuity of different generations in multinational Russia. In 2014 the Bank supported the Organizing committees of the contest of female beauty, motherhood, and family "Nechkebil", a children's beauty contest "Little Princesses of Tatarstan - 2014", the Russian-Italian BELLA literary award, and the Kryashens public organization for carrying out the holiday Pitrau and the Chuvash National Congress.

7. Report of AK BARS SOZIDANIE Charitable FoundationAK BARS SOZIDANIE Charitable Foundation is a non-profit organization registered in

October 2006, which is engaged in the support of citizens seeking help in the territory of the Republic of Tatarstan. The main activities of the Foundation are socialization of the children with limited physical capacities, preservation and recovery of health of a younger generation, support of gifted children and talented young adults, and social protection of lonely senior citizens.

Since 2007 the Foundation actively cooperates with the Republican Council for Charity Matters.

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Every day the report on funds received goes to the Council, and the statistical and analytical report is quarterly provided. For 2014 under republican social projects, philanthropists have transferred the amount of 79 790 416,71 rub: from legal entities - 34 024 615,47 rub, from natural persons - 45 765 801,24 rub.

Under the declared republican charity event "Big Family", whose purpose is providing assistance to families raising 7 or more children, among which are adopted and disabled children, six families of the Republic of Tatarstan were presented Lada Largus cars.

In the light of the latest events in Ukraine, certain citizens and the RT enterprises took the initiative to provide assistance to the Crimea multinational citizens involved in a very difficult situation. In this regard, in the Republic the charitable event "Support for Crimea Residents" was declared. For the reporting period the amount of 69 273 570,91 rub, from legal entities - 25 239 060,77 rub and natural persons - 44 034 510,14 rub, was raised.

In September 2014 in Kazan, the competition "Pearl of Tatarstan" in which 10 girls of 18-30 years old with disabilities from all over the Republic participated, was held for the first time.

During the preparation for competition the representatives of model businesses of Tatarstan worked with participants, conducting master classes for children with disabilities, and photo shoots in national clothing were also conducted. The winner, who was entitled "the Pearl of Tatarstan", became not only a symbol of will and goodness, but also acquired the right to participate at the All-Russian competition "Ms. Civilization- 2015". During the reporting period 408 000 rub were raised for holding this competition.

For the celebration of Mother's Day, in the capital city of the Republic mothers with many children were honored and awarded a medal "Ana Dany - Maternal Glory" which became a good tradition in the Republic of Tatarstan. Rustam Minnikhanov handed the medals "Ana Dany - Maternal Glory" to nine mothers with many children. Besides, during the event three large families of Tatarstan received the keys of cars acquired by the Foundation under the republican campaign "Big Family".

On December 20, 2014 residents and guests of the capital could participate in the charity fair "Winter Imagination" organized in the territory of Agro-industrial park "Kazan". During the event more than 400 products of creative arts and crafts made by the hands of orphan children, disabled children, senior citizens, and pupils of preschool and additional education establishments of the Republic of Tatarstan were presented.

The organizers of New Year's fair were the Republican Council for Charity Matters, the Ministry of Education and Science of the Republic of Tatarstan, the Ministry of Labor, Employment and Social Welfare of the Republic of Tatarstan, the Ministry of Youth and Sports of the Republic of Tatarstan, Executive Committee of Kazan, JSC Agro-industrial Park Kazan, and AK BARS SOZIDANIE Charitable Foundation.

All funds raised from the sale of goods in the amount of 118 500 rubles the AK BARS SOZIDANIE Charitable Foundation allocated to the second phase of the hospice construction for patients over 18 years old suffering from serious progressive oncological diseases.

Own projectsFor the reporting period the Foundation raised funds in the amount of 60 339 432,87 rub

(among them JSC AK BARS BANK - 14 215 867,60 rub, JSC AIKB Tatfondbank - 15 241 867,00 rub, other legal entities - 24 244 729,67 rub, natural persons - 6 636 968,60 rub) under the following social projects:

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"CREATE GOOD" (providing targeted assistance to children with severe health problems, and support of the social institutions working with children with disabilities)

Serious illnesses lasting for years and quite often resulting in disability have a strong impact on the sick child. The time period of an incurable disease has a strong impact on the identity of the child, his inner world, relations with other people, on the quality of his life, etc. As the identity of the child is only being formed, he can be more strongly affected by the disease than an adult.

For these reasons the main activity of AK BARS SOZIDANIE Charitable Foundation is providing assistance to children with severe health problems and their integration into society under the CREATE GOOD program.

During 2014, The Foundation provided assistance to 166 children with severe health problems during their treatment, carrying out operations in the rehabilitation centers and medical institutions of the cities of Kazan, Moscow, St. Petersburg, Joshkar-Ola, Chelyabinsk, and also in the clinics of the Crimea, Israel, Germany, China, Spain, the Czech Republic, etc.

AK BARS SOZIDANIE Charitable Foundation conducts active work with the volunteers. The Foundation together with students of Kazan State Medical University, Institute of Economics, Management and Law, and Kazan State Technical University held charitable events "Let’s Help Angela" and "We give flowers - we save life" for the purpose of assistance to children with severe health problems - to Kadirova Adelina for the diagnosis of cerebral spastic infantile paralysis and to Petrova Ulyana suffering from renal failure. At the moment both girls underwent necessary treatment and rehabilitation procedures and feel much better.

Volunteers of the Foundation took an active part during the All-Russian voluntary action "Spring Week of Kindness". Students of Kazan State Medical University and pedagogical group "Impuls" organized a collection of toys which were donated to pupils of specialized institutions.

Besides, on May 15, 2014 on International Family Day the AK BARS SOZIDANIE Charitable Foundation together with partners and volunteers visited a specialized Children's home. Children at first watched the performance carried out by volunteers, and then participated in vigorous morning exercises. After warming up, kids together with adults learned to mold different figures from plasticine, to draw animals and plants, and also played active and development games. During a rest hour volunteers were engaged in beautification of the territory of the social institution. At the end of Volunteer Day each child was presented a toy.

By the strong support of the staff of JSC AK BARS BANK and JSC AIKB Tatfondbank Mukhametzyanov Jasmin and Ibragimova Landysh got a chance for recovery.

For Yasmina an oncological disease was revealed in July, 2014. In this situation the girl could be helped only by the doctors of foreign clinics where she had to undergo high-intensity chemotherapy, and operations for tumor removal and transplantation of bone marrow. At the moment thanks to the raised funds Yasmina together with her mother is taking a chemotherapy course in Moscow, after which the girl will be operated on.

In the case of Ibragimovoy Landysh employees of the above mentioned banks raised over 200 000 rub in acquisition of the vital medicine Everolimus which helps the child to fight against tuberous sclerosis.

Residents of Kazan also participate in fund raising. The Foundation actively cooperates with the Europe Plus Kazan radio station on promotion of charity number 7715. Thanks to charitable people who sent text messages with the word "CHANCE", the Foundation for the reporting period succeeded in helping seven children who received medical treatment with positive results.

Zaripova Camilla is one of the children in ward of the Foundation. She underwent treatment in the Medical center "Sakura" (Chelyabinsk). Before rehabilitation the 6-year-old girl could not sit

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independently and walk , now she learned to take her first steps and to hold her back straight which for her was a huge break.

On June 1, 2014, in the International Children's Day at Olimp stadium, AK BARS SOZIDANIE Charitable Foundation and the Ministry of Informatization and Communications of the Republic of Tatarstan together with the Kazan football amateur league organized a benefit match in support of children with disabilities. Thanks to this event four-year-old Gataullina Gulnaz had an opportunity to complete her next course of treatment.

On July 8, 2014, in the International Day of Family, the charity festival of lovers was held by the Center of Family "Kazan". That evening everyone made a contribution to Hadeev Fannur's health improvement (9 years old, Laishevo region of Republic of Tatarstan). His diagnosis: cerebral affection.

The boy suffers from terrible headaches; doctors more than once rescued him from death. Continuous losses of consciousness and spasms prevent Fannur from growing and developing properly. The boy is on homeschooling, and has finished the second grade, but is eager to attend regular school lessons together with his peers, to play on breaks, and to not know what a headache is at all.

The only way – an operation doctors have agreed to make in St. Petersburg. However, the cost of operation was very heavy for the family - 400 000, 00 rub. During the above-mentioned event over 130 000, 00 rub were collected in order to support Fannur's operation.

Carrying out events dedicated to a decade of disabled people has become traditional for the Foundation. So, on December 10, 2014 the Foundation invited children who received help in the form of payment for treatment and rehabilitation in the expiring year. Such events sets one to thinking about the most important value of each person - health, and teaching healthy people to help those who were less lucky than we are; after all we do not realize how many abilities we have been given: to walk on two feet, to talk, to see this wonderful world in all its colors, to hear, to smell.

In addition to that, the Kazan IT-Park hosted the annual Christmas charity fair of school business companies, organized by the non-governmental organization Kazan center "Achievement of the Young", the Ministry of Economics of Republic of Tatarstan, “AK BARS SOZIDANIE” Charity Foundation, and Kazan IT park.

About 20 school companies from different cities and regions of the Republic of Tatarstan have presented their own products at the fair. Grade 5-11 pupils offered visitors handmade products: photo frames from chipboard decorated with buttons, self-made candles, dolls, soft toys and Christmas tree decorations, knitted scarfs made using the technique of dry felting, wicker baskets, and many other things. Kids were ready to give from 45 up to 100 percent of their revenue.

As told by Lyalya Bikchentayeva, the Executive director of the Kazan center "Achievement of the Young", that fair for children is an opportunity to try themselves in business and to understand whether they want to be engaged in it in the future. Here they get skills for the organization of production and sales, and learn to work in a team.

Profits gained by young businessmen in the amount of 42 000, 00 rub were transferred for Habirov Bulat and Amineva Venera's treatment.

Unfortunately, single events cannot result in positive and steady effects. In order to provide gratuitous services to families in a tight life situation, the Fund carries out systemic work:

1) Monitoring of activities of the Children's day center of medical rehabilitation of children with congenital diseases of CNS on the basis of State Autonomous health Care Institution "Republican Children's Psychoneurological Sanatorium". So far in 110 children of the age range of 2 to 14 undergo rehabilitation courses. According to the director of the sanatorium, children with the

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best dynamics may have two and even three courses of treatment using the best equipment in the republic on a charity basis.

2) During a year tens of children are engaged in gratuitous therapeutic horseback riding in the Center of hippotherapy "Mutual understanding", which works at the base of the Municipal Culture institution “The Kazan zoological and botanic garden". This method of auxiliary treatment is effective in different degrees for children with disorders of the musculoskeletal system and some mental abnormalities.

On June 22, 2014 in the territory of the Kazan zoological and botanic garden an opening ceremony of the indoor arena of the rehabilitation and health improvement center “Mutual understanding” was held. The arena will allow children to be engaged in their favorite medical horseback riding without interruption.

As of today, considering the created comfortable conditions (existence of an indoor arena, quantity of horses, qualified instructors), children attend rehabilitation courses throughout the year at no cost (2 sets of 5 groups). The complex of classes with one child consists of a 30 minute training cycle (carrying out didactic games for development of thinking, continuous speech, fine motor skills, etc.) and 30 minutes of hippotherapy a day.

Besides that, the Foundation together with volunteers works on construction of a timbered guest house of 100 sq. m. This room will be used for changing clothes before and after hippotherapy session, as a waiting room between sessions, a place to drink hot tea during autumn and spring periods, and as a lounge after sessions. For children who have to spend most of their time in their apartment, carrying out classes of sociocultural rehabilitation in such room can result in increasing its productivity.

3) the organization of creative workshops on bases of Kazan rehabilitation centers (Computer design studio, potter's and family workshops, etc.);

4) search and support of the talented "gifted" children showing interest in culture and art; 5) preparations for entering educational institutions. For the purpose of socialization of seriously ill children the Foundation has participated in

the preparation and organization of professional skills competition “The best by profession” among graduates of correctional schools of the Republic of Tatarstan which this year was held in Nizhnekamsk.

During the competition participants could show their skills in the sewing, joinery, and plastering professional fields. The best experts in this area estimated the skills and abilities of the children and revealed the nine most talented ones, who were awarded guaranteed budgetary places for education in State Budget Educational Institution of Elementary professional education Technical School No. 63 of Nizhnekamsk city.

During the reporting period support has been provided to the following social and health care institutions of the Republic of Tatarstan:

- Purchase of video equipment for the lounge of Rehabilitation center “April”;- Purchase of medical equipment for the State Health Care Institution “Republican Children's

Home Specialized”;- Equipping of the sensory environmental room for State Autonomous Institution for Social

Services “Complex Center for Public Social Services “Care” of the Ministry of Labour, Employment, and Social Care of the Republic of Tatarstan in the Alkeevsk district;

- Purchase of educational materials for Municipal Budget Educational Institution “Evening general education school No. 34”;

- Purchase of gift certificates (for disabled children) for the “Window to Hope” Charity Foundation;

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- Supply and installation of air-conditioners for State Autonomous Institution for Social Services “Derbyshki children's foster home for mentally retarded children”.

During the reporting period for the implementation of the “CREATE GOOD” project the Foundation has received funds in the amount of 44 818 245,47 rub, among them JSC AK BARS Bank had transferred 2 785 310,00 rub, JSC “AIKB “Tatfondbank” - 14 414 917,00 rub, other legal entities - 22 545 266,67 rub, and individuals - 5 072 751,80 rub. The cost of assistance provided by the Foundation in 2014 is equal to 45 268 599,38 rub.

The comparative table on the CREATE GOOD project

Beneficiaries 2012 2013 2014children (qty) 105 139 166social institutions (qty) 26 23 24Provided financial assistance in millions of rubles. 18,5 21,4 45,3

Raised funds, million rubles. 19,5 24,2 44,8among themfrom AK BARS BANK 4,4 2,8 2,8from JSC AIKB Tatfondbank 7,7 7,4 14,4from others legal entities and natural persons 7,4 14,0 27,6

"We are together!" (socialization of the children in tight life situations)Social phenomenons such as orphan-hood are rather widespread. More than 100 thousand

orphans live in foster homes, although 80% of them do have parents, which do not wish to take charge of their children.

In recent years careful attention has been paid to the support of children left without parental support by both government authorities and institutions of human services, and civil society as well.

JSC AK BARS BANK and the AK BARS SOZIDANIE Charitable Foundation have patronized the orphanage of the Yelabuga municipal region of RT for several years. The Foundation takes the most active part in socialization of the children of the patronized educational institution and in problem solving for the orphanage.

The VII Republican festival of identity and talents - "Little princesses of Tatarstan-2014" took place in Kazan in "Korston" Hotel and Entertainment Centre on May 25. children of the Yelabuga orphanage - Yulya Grechneva and Alina Akparsova - also took part in this festival of beauty and exceptional children.

At the end of September Yulia Grechneva represented the Republic of Tatarstan and the Russian Federation at the International festival of harmony, beauty, and talents – “Little Miss World 2014” (Little Miss World 2014) which took place in Antalya (Turkey).

Representatives from more than 30 countries, among them - Bulgaria, Nepal, America, Germany, etc. participated in the competition. In order to receive the highest title, besides fashionable dresses and a fashion parade, it was necessary to defend a social project and to present their own country in a presentation in three languages - English, Russian, and Native; and to show the national costume and culinary dishes prepared with their own hands. Yulia excellently coped with all tasks, and her project for the protection of homeless pets had great success with the Jury. According to the results of competition this resident of the Yelabuga orphanage received the title “Little Ms. Continent – 2014”.

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Besides that, the Foundation does not forget about the aesthetic education of inmates and systemically provides art therapy which develops senses, and the ability to experience, estimate, judge, and understand beauty. Due to art classes children become more open, learn to subtly respond to occurring events, and, above all, have self-expression.

Despite the continued participation in life of inmates of the patronized orphanage, the Foundation does not forget about other children in tight life situations.

In this regard AK BARS SOZIDANIE annually provides support for the Republican personal and team championships of cross-country skiing among residents of orphanages and boarding schools (foster homes) and children left without parental care. The sports festival has taken place on the basis of the year-round country recreation camp “Polyanka” (Glade) of the VIII type Menzelinsk special (correctional) boarding school (foster home) and was dedicated to the XXII Winter Olympic Games in Sochi.

In March, with the financial support of JSC «AIKB Tatfondbank», the Foundation sent 10 orphan children to be spectators at the XI Paralympic Winter Games in Sochi 2014. Children visited opening and closing ceremonies, and alpine skiing, biathlon, cross-country skiing, sledge hockey, and curling competitions as well.

The Annual District competitions of Arts and Crafts "We live like one family by the coasts of the Volga River", held within the district project "RETURN the CHILDHOOD", traditionally takes an outstanding place in Volga Federal District orphanage residents’ lives.

In 2014 winners of the previous year’s competition - inmates of VIII type Menzelinsk special (correctional) boarding school (foster home) and State correctional educational institution “Special (correctional) orphanage of Bogorodsk of Nizhny Novgorod region” visited the Art school "MASTER-CLASS" (Moscow). The children were very impressed by the trip and the experience gained, which they promised to use when creating new works of arts and crafts.

The next awards ceremony for winners of the competition in 2014 was held on October 29 in the National Museum of the Republic of Tatarstan. Nearly 400 creative works of residents of foster homes and children left without parental care from 14 regions of the Volga Federal District were submitted to the competition. The most active part was taken by children from the Saratov, Kirov, and Ulyanovsk regions, and from the Republics of Tatarstan, Bashkortostan, and Mordovia as well. This year the set of works of felting technique (felt), leather art, and the technique of patchwork was been presented at the competition for the first time.

124 children became winners of the 2014 year’s competition. They received diplomas and prizes with parting words by the Assistant to the President of the Republic of Tatarstan for social policy Fazleeva L.R.; Deputy head of the department of social development of the Cabinet of Ministers of the Republic of Tatarstan Khabibulin A.R.; andDeputy minister of Education and Science of the Republic of Tatarstan Giniatullina S.V.

Besides that, children traditionally in this year as well have had the opportunity to attend interesting master-classes from skilled teachers of Russia. This time they attended classes of Vazhenin Leonid Petrovich, the teacher of Timiryazevsk children's school of arts of Moscow – giving a master class called "Plasticity of paper" and Mazhirina Elena Vladimirovna, the scholar of the International program "New Names", the International Humanitarian Foundation "Knowledge", and "National Fancy Crafts of Russia" Associations - "Gzhel".

As a part of the decade of elderly people the AK BARS SOZIDANIE invited 35 elderly custodians of juveniles together with them to a charity event "A meeting of generations". Grandmothers and grandfathers acting as parents of foster children could share experiences, remember songs of their youth, and in the evening go to a performance in the Tatar state drama and

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comedy theater of K. Tinchurin. Also, every participant received a certificate for the purchase of grocery sets, provided by the Foundation.

At the beginning of December in the republic, the annual charity event "Fir-tree of Desires" directed towards fulfillment of New Year desires of the children in tight life situations was started. "The AK BARS SOZIDANIE" took the most active part in the campaign and fulfilled the New Year's dreams of children from the State budget special (correctional) educational institution "VIII type Menzelinsk special (correctional) general education boarding school" for orphan children and children with health disabilities left without parental care of the Menzelinsk city of Republic of Tatarstan (137 children), State special (correctional) educational institution "VIII type Toygeldinsk special (correctional) general education boarding school" of the Muslyumovo municipal region of the Republic of Tatarstan (79 children), State budget special (correctional) educational institution "VIII type Taktalachuk special (correctional) general education boarding school" of the Aktanysh municipal region of the RT (58 children), Public Healthcare Institution «Kazan Children's Psychoneurological Sanatorium No. 2» (105 children), a social orphan asylum for children and teenagers "Family" of the Bavly municipal region of the Republic of Tatarstan (28 children), and State Institution for Social Services “Derbyshki children's foster home for mentally retarded children” (219 children).

The amount of money spent for the implementation of the project "We are together!" for 2014 equals 2 243 386,51 rub.

"Planet of ZOZh" (popularization of sport and promotion of Healthy Lifestyle)The AK BARS SOZIDANIE Charitable Foundation takes the most active part in promotion

of a healthy lifestyle, therefore very many sport events are held with its participation.For the purpose of increasing the physical activity of children and youth and development of

skills for a positive attitude towards life by the British Charitable Foundation "Charities Aid Foundation" (CAF) together with its Russian branch (CAF Russia) with financial support of “Coca-Cola Foundation”, two sites for street fitness (workout) were built on the basis of Children's and youth sports school "Strela" (“Arrow”), “Basco” sport complex, and Municipal budget educational institution "Gymnasium No. 8" of the Sovetsky district of Kazan city.The formal opening of the complex took place in Gymnasium No. 8 celebrating the 45th anniversary this year, and was attended by the head of programs of the CAF Charitable Foundation (Moscow) Andrey Pechnikov, the head of the "Workout" federation of the Moscow region Maxim Neverov, and the head of the Division on Health issues, Sport, and Healthy Lifestyle of the Cabinet of Ministers of the RT Guzel Shakirova.

The cost of one complex is 950 400, 00 rub. Street fitness allows engaging the stationary sports equipment at the site in a public place for free and at a convenient time for the exerciser. This trend is based on physical exercises with body weight on the basis of general exercises on the horizontal bars, parallel bars, wall bars, climbing frames, and other metal structures that are suitable for training in almost any weather conditions.

The plan is to open such sites in all the cities of Russia. Organizers of the event say that their goal si to see weights in hands of each citizen instead of cigarettes and alcohol.

AK BARS SOZIDANIE Charitable Foundation acted as the regional partner of the project in the Republic of Tatarstan. The Foundation, in its turn, provided the school with office equipment in honor of its 45th anniversary.

In addition to that, in 2014 JSC AK BARS Bank financially supported the following events:

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- Organization of a trip of the UNICS Basketball club to Valencia (Spain) for TOP-32 Euro cup matches;

- Purchase of a powerboat for Federation of powerboat sport of the Republic of Tatarstan for participation in the upcoming Russian and European championships;

- Carrying out the IX International football tournament among young men in Nizhnekamsk city;

- Organization of the Children's festival of combat sports together with Children's sports club of single combats and judo of the Republic of Tatarstan.

- Carrying out autocross competitions in Bugulma city;- Helping the Federation of judo of the Republic of Tatarstan in carrying out "Healthy

children - the happy future" event.The amount of money spent for the implementation of this project within the reporting

period equals 4 664 211, 55 rub.

"Young talents" (identification and stimulation of abilities of gifted children, talented youth; assistance to the educational institutions having experience with working with young talents)

The AK BARS SOZIDANIE Charitable Foundation realizes the “Young Talents” project focused on supporting gifted children and talented youth.

At the beginning of 2014 in connection with this project for the purpose of participation in the cultural program of the Olympic Games the Foundation supported the student of the variety show department of the Small Academy of Arts Molkova Masha - the finalist for the Open public competition of creative teams - participants of the cultural program of the XXII Olympic Winter Games and the XI Paralympic Winter Games in Sochi 2014. Also the Foundation organized Valiullina Aygul's trip to Alma-Aty (Kazakhstan) for participation in the XVI International competition of children's crafts "Boztorgay".

Every year the Foundation assists its patronized creative teams. Thus, during the reporting period the Foundation devoted funds to the dance studio "Assorti" (Assortment) for production of dance clothing and for the choreographic ensemble "Happy Childhood" for carrying out events dedicated to the 35th anniversary of the ensemble.

During summer holidays the Foundation has once again sent two children for training in the NOU "Moscow Center of Continuous Mathematical Education". And at the beginning of the academic year support was given to Vokhidov Komil for participation in the Russian championship of ballroom dancing.

From October 8 to November 20, 2014 in the Republic of Tatarstan a competition of information and social videos "The Child in the World of Rights" founded by the Commissioner for children rights (Ombudsman) in the Republic of Tatarstan, the Ministry of Education and Science of the Republic of Tatarstan, the Ministry of Youth Affairs and Sport of the Republic of Tatarstan, the Ministry of Justice of the Republic of Tatarstan, and the Republican agency for press and mass communications "Tatmedia" was held.

Competition is held to promote the United Nations convention of the rights of the child, information and legal education of children and youth, stimulation of their social and legal activity, as well as promotion of positively directed, socially useful creative activity of the younger generation in the sphere of raising legal awareness and legal culture.

The competition presented the submitted videos showing the content of one or several fundamental rights of the child according to the Convention of the UN of the rights of the child.

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In 2014 the Foundation acted as one of organizers of this competition and as a result of this 20 winners were awarded monetary rewards from the AK BARS SOZIDANIE to continue working in the field of social advertising.

In addition to that, the Foundation:- paid the participating fee for the participation of one of students of Municipal autonomous

educational institution "N.I. Lobachevsky Lyceum of Kazan Federal University" in a session of school publishers of Russia held by the Autonomous Non-Commercial Organization The Center of innovative technologies “Orbita” (Orbit) (Moscow);

- purchased musical equipment for Chuteevsky SDK of the Kaybitsi municipal region of the Republic of Tatarstan;

- provided the winners and prize-winners of the All-Russian school subjects competitions and regional stages within the “Star Circle” Festival with memorable certificates;

- sent children to attend the “Balaganchik on Bulak” drama school of recreation summer camp;

- honored teachers on the International Teachers' Day together with the Charitable Foundation "Nadezhda" (Hope) of the Kamskoe-Ustye region.

The amount of money spent for the implementation of the Young Talents project in 2014 equals 1 180 333, 00 rub

"In a big family" (promoting of family institution, targeted support of low-income large families)

The AK BARS SOZIDANIE Charitable Foundation every year pays more attention to problems of large and needy families and actively participates in many charity events focused on the support of families of this category.

In order to provide psychological and educational assistance for 15 foster families of Kazan city having an adopted child, the first grade school student Foundation developed the project “Family is important, family is complicated, but it’s impossible to have a happy life living alone!”.

The project was realized from November 2013 to June 2014. During activities within the framework of the project an improvement of emotional climate in a family as well as the general condition of children and parents was noted. Parents examined Fundamentals of age psychology, and competence of legal matters increased. According to responses of class teachers, progress of adopted children at school in separate subjects was increased, a confidence in the own abilities appeared, their level of anxiety decreased, their circle of contacts widened, and friends were made easier as well. Another positive moment is that the progress of the children has increased since they learned to do their homework together in a game form, and to be interested in the progress of each other. Parents were provided with a textbook of methodics "Psychology of development: normal and pathological", which contains such sections as: the general regularities of mental development of the child based on age categories, psychopathology symptoms, and tests and active family games, which will help to correct the behavior of adults and children in the future. Besides that, students of the Institute of pedagogics and psychology of Kazan (Volga region) Federal University were actively involved in volunteer movement and had a good practice of working with first grade school students.

In order to create favorable conditions for family rest, the atmosphere of romanticism, and comfort in the park "Black Lake", the AK BARS SOZIDANIE Charitable Foundation together with Initiative group "Maksimum" declared the campaign "Avenue of Reconciliation".

The committee of external improvement of the Executive committee of Kazan gave the consent to the installation of 20 benches in “Black Lake” park. Besides that within this campaign

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citizens of Kazan were involved in process of classing up the territory of park, several campaigns of cleaning the park were carried out, and the gala concert was organized. "The avenue of reconciliation" became the decoration of our city and is still an excellent place for walking and recreation for citizens and guests of the capital.

Besides that, in a good traditional manner due to financial support of JSC AK BARS Bank the national holiday called "Sabantuy" takes place in municipal areas of the republic and regions of Russia, including playgrounds entertaining children from needy families. In the current year the Foundation helped to organize a Sabantuy holiday in 43 municipal areas of the republic, 7 districts of Kazan, and 15 regions of the Russian Federation.

Before the start of new academic year in the framework of the republican campaign "Help to get ready to school" the Foundation organized a holiday for 30 orphan children from foster homes under the care of elderly custodians, which took place in the amusement park "Kyrlay".

Kids rode on the Ferris wheel and merry-go-rounds and visited various attractions, received gifts from organizers, and together with their families had dinner in open-air cafe.

Besides, under the republican campaign "Help to get ready to school" the Foundation has allocated funds for the purchase of the complete set of school packs for children from low-income families from the Zainsk, Kamskoe-Ustye, Tukay, and Tetyushi municipal areas.

Mother's Day in our country is a very young holiday which is celebrated on the last Sunday of November. On this day the AK BARS SOZIDANIE Charitable foundation organized an event for 20 mothers of Kazan who are raising seriously ill children.

If a family has a seriously ill child, the mother has to take care of him 24 hours a day. Care of such a child is daily, monotonous, exhausting work. Very often due to an inability to withstand psychological stress the father leaves the family. A seriously ill daughter or son cannot be sent to kindergarten, school, and summer camp. In such a case the mother cannot always work properly, and, therefore, it is hard for her to employ a nanny. Of course, a grandmother or the neighbor can sometimes sit with the child, so the mother can go shop. However she, like any other woman, needs some space to relax as well.

In honor of Mother's Day the Foundation has prepared a separate program for mothers and children. While children were having fun with animators and drew beautiful postcards, made different animals from balloons, climbed in a labyrinth, and constructed meccano sets; mothers discussed with each other problems faced by women raising "special" children.

Also the Foundation allocated Funds to:- carrying out the renovation of a roof of the Pre-school educational institution "Lebedushka"

of the Tukay area;- organization of participation of a large family in the All-Russian competition of art work

"Assembly of the replacing families";- carrying out the City Day celebration and the organization of New Year celebrations in

municipal areas of the republic.The amount of money spent for the implementation of the project equals 6 932 478, 20 rub.

"The sun shines to all!" (assistance to lonely senior citizens)Old age in real life is often a period when help and support is really necessary to survive.

With this purpose, the AK BARS SOZIDANIE Charitable Foundation realized the project "The sun shines to all!".

Since 2008, JSC AK BARS Bank and Foundation patronize the Arsk care home for elderly and disabled people, which became a home for about 50 lonely citizens of the republic.

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During the reporting period of 2014, within the framework of the project for creation of a positive emotional background and overcoming disturbances in the emotional and strong-willed sphere for residents of the patronized care home, the sensory environment room was purchased, which helps not only to promote relaxation, but also allows intensification of various functions of the central nervous system.

Besides that, the Foundation holds quarterly meetings with the management and residents of a care home considering questions concerning the organization of living conditions, care, and social and medical services.

Traditionally within the celebration of the Victory in the Great Patriotic War, veterans of municipal regions of the Republic of Tatarstan received help for carrying out events dedicated to the 69th anniversary of the Victory.

During the decade of elderly people the Foundation together with the House of veterans of the Nizhnekamsk municipal area held charity events for veterans and lonely elderly citizens of the Nizhnekamsk and Nizhnekamsk municipal area, in which the participants received grocery sets.

Besides that, the Foundation visited the patronized Arsk care home for elderly and disabled people. During this meeting with the management and residents of the care home discussions of important problems of social establishment and ways to solve them were held primarily considering questions concerning the organization of living conditions, care, and social and medical services.

Also within the framework of the “Accessible Environment” project the Foundation helped to set up a ramp for the disabled people of group I, living in the Saby municipal region of the Republic of Tatarstan.

The amount of money spent for the implementation of the project equals 620 172, 00 rub.

Other projects of AK BARS SOZIDANIE Charitable FoundationThe AK BARS SOZIDANIE Charitable Foundation together with initiative groups makes a

feasible contribution to protection of our “younger brothers” and to education of the humane attitude of society towards homeless pets. Together with the initiative groups, the Foundation organizes campaigns to collecting donations for assistance in reconstruction of nurseries in the Republic of Tatarstan.

For exhibiting means and care of snow leopards (Uncia uncia), the Foundation for several years with the financial support of JSC AK BARS Bank has provided charitable assistance to the Municipal Culture institution “The Kazan zoological and botanic garden".

From June 12 to June 15, 2014 with assistance of the President of the Republic of Tatarstan in Kazan the VII International practical conference "White nights of fundraising: searching for funds for development of people, organizations, and territories" was held. The event was organized by the Center of Development of non-profit organizations and AK BARS SOZIDANIE Charitable Foundation.

More than 200 fundraisers gathered in one place to exchange experiences. Members from different cities (and even countries) could not only supplement their professional knowledge, but also share opinions on tendencies, generalize the existing experience, find new contacts, and gain the emotions and inspiration that are so necessary for success in such a difficult task.

In October, 2014 the AK BARS SOZIDANIE Charitable Foundation together with the initiative group has announced the charity event "Life to our faithful friend", aimed at supporting the kennel and nursery for dogs in Stolbishi. The campaign unites people who are not indifferent to lives

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of homeless pets, and takes confident steps in the protection of our “younger brothers” and the education of the humane attitude of society towards them.

At present time the nursery needs help in the support and treatment of cared for pets as this institution exists only at its own expense and the modest donations of citizens.

For several years the Foundation according to the Resolution of Cabinet of Ministers of the Republic of Tatarstan is a member of an expert commission of the Republican competition “Public Initiative” and supports social institutions and public organizations.

Within the framework of this competition in 2014 the Foundation has awarded grants to the State Institution for Social Services “Comprehensive social services center “Shafkat” (Mercy) in the Sarmanovo municipal area, the State Institution for Social Services “Comprehensive social services center “Rodnik” (Spring) in the Tyulyachi municipal area, the State Institution for Social Services “The Bavly care home for elderly and disabled people” and the State Institution for Social Services “Comprehensive social services center “Zabota” (Care) in the Novosheshminsk municipal area for the implementation of projects aimed at improving the quality of life and labor adaptation of the elderly generation.

The amount of money spent for the implementation of other projects equals 811 156, 70 rub.

Work of AK BARS SOZIDANIE Charitable Foundation on petitions of citizens One of the key activities of the Charitable Foundation is to work on the consideration of the

matters and petitions received from individuals and legal entities. When studying letters received from citizens the Foundation sends inquiries to social security authorities and healthcare and education institutions for the purpose of confirmation of reliability of the facts specified in every letter.

During the reporting period the Foundation received 461 letters with requests for assistance at its email address. A positive decision was made on 343 appeals, 46 were refused, 45 are under consideration, and 27 letters were not considered due to lack of necessary documents.

Results of the activities of AK BARS SOZIDANIE Charitable Foundation for the reporting period:

1) Winner of the republican competition "Philanthropist of the Year";2) The Foundation volunteer Karnaukhova Ekaterina received the diploma of the II

degree of Republican competition of leaders and heads of children's and youth public associations "The Leader of the Year - 2014".

3) The AK BARS SOZIDANIE Charitable Foundation was included in the Book of Winners of the All-Russian Award "Partnership" published by the Coordination center for the organization, development, and promotion of voluntary blood donation of the Civic chamber of the Russian Federation.

4) The winner of the Fifth competition of social and cultural projects founded by JSC “RITEK” and “LUKOIL” Charitable Foundation in the Republic of Tatarstan.

5) The owner of a grant of Competition of socially oriented non-profit organizations in the Republic of Tatarstan for the right of receiving subsidies from the budget of the Republic of Tatarstan.

6) The Foundation is the curator of the “Workout: project conducted by the British Charitable Foundation "Charities Aid Foundation" (CAF) in the territory of the Republic of Tatarstan.

7) Winner of Competition of the Resource center of Non-Profit Organizations City Educational Centre "Replication of the best Practices of Socially Oriented Non-Profit Organizations - 2014".

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***AK BARS Bank is one of the largest financial institutions in Russia. Millions of clients trust

us as a reliable member of the banking market providing high quality, innovative, and affordable services. To justify this trust, AK BARS Bank conducts large-scale and socially significant systemic activity. Social activity covers all spheres of life and activity of the region’s citizens, which allows the achievement of the consecutive improvement of many key social and economic indicators. Summing up the results of the socially responsible participation of the Bank in public life, in December 2014 the Ministry of Labor, Employment, and Social Services of the Republic of Tatarstan recognized the significant contribution of the credit organization, awarding first place in the nomination "For Participation in Territory Social Problem Solving and Development of Corporate Charity" within the framework of the All-Russian competition "Russian Organization with High Social Efficiency" at a republican stage.

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