Ziraat Bank gives great importance to complying with the law, to transparency, to ethical conduct, and to accountability and it carries out all of its operations in line with such principles.

Ziraat Bank believes that full compliance with corporate governance rules and laws is what guarantees sustainable economic performance and ethical and fair competition and that this is the most fundamental means of balancing and developing stakeholders’ interests.

For Ziraat Bank, how goals are achieved is just as important as achieving the goals themselves.

Every Ziraat employee is expected to be mindful of the law and to act ethically and honestly in every decision that is taken and in every action that is performed in the Bank’s name. This simple rule is equally applicable to everyone from members of the Board of Directors to junior clerks on duty in Turkey’s remotest town.

Ziraat Bank’s corporate governance structure
The Ziraat Bank Board of Directors consists of nine members. This number is deemed to be sufficient to permit the effective organization and conduct of the board’s activities. The duties of board chairman and of bank general manager are performed by different individuals.

For information about the members of the Ziraat Bank Board of Directors, please see pages 64-67 of the Bank’s 2013 annual report.

The general manager has full authority and responsibility for the management and coordination of Ziraat Bank’s day-to-day business in the broadest sense. The Bank has ten assistant general managers, each one of whom is responsible for the conduct of designated duties. Ziraat Bank’s senior management consists of its general manager and its assistant general managers.

For information about the members of Ziraat Bank’s senior management, please see pages 68-71 of the Bank’s 2013 annual report.

Ziraat Bank is a state-owned bank. There are no ultimate controlling shareholders.

There are four committees charged with specific activities at Ziraat Bank.
These four committees, which have been set up by Ziraat Bank in accordance with the requirements of the Turkish Commercial Code, the Banking Act, and other applicable laws, regulations, and administrative provisions, consist of the Credit Committee, the Audit Committee, the Corporate Governance Committee, and the Remuneration Committee. The Board of Directors is authorized to set up other committees if needed or if deemed to be necessary.

For information about the committees set up at Ziraat Bank, please see page 76 of the Bank’s 2013 annual report.

Internal audit, internal control, and risk management at Ziraat Bank
Internal audit, internal control, and risk management functions at Ziraat Bank are carried out by the Board of Inspectors and by the Internal Control and Risk Management Group. Although these two bodies work in coordination, their duties, responsibilities, and organizational structures are completely independent of each other. Their purview encompasses all bank branches and units as well as subsidiaries and affiliates that are subject to the Bank’s oversight with the aims of ensuring that:

• Banking activities are conducted precisely and securely
• Long-term profitability targets are fulfilled
• Financial and administrative reporting is reliable
• The effects of risks capable of adversely impacting on the Bank’s reputation and financial stability are minimized.

The Ziraat Bank Board of Inspectors employs a staff of 167 bank inspectors to carry out its operations in line with internationally accepted internal auditing standards.

Internal control functions at Ziraat Bank are structured in such a way as to encompass the activities of all domestic and international branches, regional departments, and headquarters units as required by government regulations governing banks’ internal systems.

Internal control functions at all the Bank’s foreign branches are carried out in line with annual internal control plans that are approved by the Audit Committee.

The compliance oversight functions mandated under article 18 of Regulations Concerning The Internal Systems Of Banks are also carried out as part of internal control, at which time all activities carried out or planned by the Bank and new banking transactions and products are reviewed to determine that they are in compliance with applicable laws, regulations, and administrative provisions, with the Bank’s internal policies and rules, and with generally-accepted banking practices.

Risk management at Ziraat Bank
In the conduct of its risk management activities, Ziraat Bank’s fundamental approach is to foster a risk culture throughout the Bank and to ensure that risk management functions are as close as possible to best practices by making ongoing improvements in both systems and human resources quality.

Risk management activities are conducted under the main headings of:

• Credit risk,
• Market risk,
• Operational risk and
• Balance sheet risk (interest rate risks and liquidity risks incurred on bank accounts).

The ultimate goal of all risk management activities is to achieve compliance with internationally-accepted best practices.

For information about internal audit, internal control, and risk management functions at Ziraat Bank, please see pages 78-80 of the Bank’s 2013 annual report.

Prevention of money-laundering and terrorism-financing at Ziraat Bank
Ziraat Bank’s efforts to prevent money-laundering and the financing of terrorism are conducted in accordance with policies that are publicly disclosed on the Bank’s website and also in compliance with the requirements of law. The Bank is committed to preventing its products and services from being used to launder money and/or to finance terrorism and it fulfills this commitment by ensuring that its management and personnel comply fully and strictly with mandated standards.

The Audit Committee is charged with the conduct of the compliance program formulated pursuant to Regulations Concerning Compliance Programs For Obligations Pertaining To The Prevention Of Money-Laundering And Terrorism-Financing and with the fulfillment of statutorily mandated duties, authorities, and responsibilities related to such issues.

Conducting all of its operations within the framework of the “Know Your Customer” principle, Ziraat Bank regards, as two fundamental objectives, both establishing the identities of customers and of those acting on their behalf and ensuring that all required records are maintained in full.

Policies in effect at Ziraat Bank
Policies approved and put into effect by the Ziraat Bank Board of Directors are of great importance from the standpoint of the functioning of the Bank’s corporate governance structure.

Disclosure Policy
http://www.ziraatbank.com.tr/en/InvestorRelations/Documents/DisclosurePolicy.pdf

Prevention of Money-Laundering and Terrorism-Financing Policy
http://www.ziraatbank.com.tr/en/OurBank/InvestorRelations/Documents/AMLPolicy.pdf

The following issues have been integrated into the Bank’s HR regulations, which are accessible to all personnel through the Ziraat Bank intranet:

• Human Resources
• Pricing
• Compensation
• Prevention of Bribery & Corruption.

Ziraat Bank’s Environment Policy has been formulated as a component of its Sustainability Policy.

Ziraat Bank Investor Relations Unit
The Ziraat Bank Investor Relations Unit is responsible for managing relations with shareholders in the event that a public offering takes place and also for satisfying the transparency requirements mandated by laws and regulations. This unit is ready to play an effective role in the protection and exercise of shareholder rights, including but not limited to their right of access to information and their right of inspection. Although Ziraat Bank has yet to undertake a public offering, it has already committed itself to behaving as a company that has.

Located at www.ziraatbank.com.tr, Ziraat Bank’s corporate website plays an important role in keeping the public informed with the most current news and information. Although Ziraat Bank is not now a publicly-traded company, it already satisfies many of the requirements of corporate governance principles. Information and documents concerning such matters are published on its website in the Turkish and English languages. Such documentation covers a broad range of issues from trade registration details to the Bank’s existing partnership and management structure, from its articles of association to material event disclosures, and from its financial statements to its annual reports.