S T A T U T E OF THE AGROINDUSTRIJSKO KOMERCIJALNA BANKA AIK BANKA A.D. NIŠ (REVIEWED TEXT)

Transcription

1 S T A T U T E OF THE AGROINDUSTRIJSKO KOMERCIJALNA BANKA AIK BANKA A.D. NIŠ (REVIEWED TEXT) I GENERAL PROVISIONS Article 1 Agroindustrijsko komercijalna banka AIK BANKA incorporated company Niš (hereinafter: Bank) was founded according to the Law on Banks and other Financial Institutions (Official Gazette of the Republic of Serbia No. 32/93 and Official Herald of the Republic of Serbia No. 72/03, 61/05 and 101/05) which is registered at the Commercial Court in Nis, Registration Insert No. Fi 7343/93 transferred to the Business Registers Agency under No. BD (Cyrillic)2946/2005 on 1 March By the Amendments to the Statute, which came in force on 7 October 2010, the compliance of the organization of the Bank and acts to the Law on Banks (Official Herald of the Republic of Serbia 107/2005 hereinafter: the Law) was conducted. By the Amendments to the Statute, which came in force on 27 May 2011, the compliance of business activities, acts and organization of the Bank to the Law on Amendments to the Law on Banks (Official Herald of the Republic of Serbia 91/2010) was conducted. By the Amendments to the Statute, which came in force on 14 May 2012, the compliance of the Statute of the Bank to the Law on Companies (Official Herald of the Republic of Serbia 36/211) and Law on Amendments to the Law on Companies (Official Herald of the Republic of Serbia No. 99/2011) - hereinafter: Law on Companies, and the registration of the Statute is done according to the Law on Registration. Article 2 The Bank has a stamp, seal and signets which contain the business name of the Bank. Parts of the Bank have stamps, seals and signets which beside the business name of the Bank contain mandatory signed and specific organizational part of the Bank and the registered office of that organizational part. By the instruction of the Executive Board of the Bank (hereinafter: the Executive Board), the content, form, size and use, safe keeping, evidence and other important issues for use of stamp, seal and signet of the Bank are regulated. Article 3 The Bank uses its business name in legal transactions (name of the Bank, legal form Stock Company, place and registered office of the Bank) in Serbian language and Latin alphabet (either as business name, or shortened business name, according to the law). Business letters and other documents (including the ones in electronic form) of the Bank addressed to third persons contain: business name or shortened business name, identification number and tax number of the Bank. II BANK ORGANIZATION AND WAY OF CONDUCTING BUSINESS Article 4 The Bank is a public shareholder company with rights, obligations and responsibilities established by Law and other Regulations, Agreement and this Statute. Article 5 Within the Bank following parts can be organized: Operation Center, subsidiaries, branches

2 and/or counters within subsidiaries and other organizational parts according to the Rulebook on Internal Organization of the Bank. The organization of the Bank and fields of business in single organizational parts of the Bank are determined by the Board of Directors by a General Act. The organization of the Bank should be brought together to meet the timely, professional and legal business performance and timely identification, measurement and assessment of risks, as well as gaining profit for the Bank through its size, number of organizational parts, number and qualification of staff, professional capacity, level of technical equipment and other. The Rulebook on Internal Organization of the Bank and Rulebook on Business Activities Organization and Systematization of the Bank determine: -the organizational structure of the Bank which provides division of duties, competence and responsibility of the employees in a way to prevent conflict of interests and provides transparent and documented process of decision making and implementation. -requirements to be fulfilled by employees when they are employed / changes of the job position, in the view of their knowledge, experience, years of working experience / as well as the description of their working duties for each particular job position, with number of workers. Article 6 Other organizational parts can be constituted within the Bank, according to the regulations and needs of the business activities of the Bank (representative offices of the Bank and other). The basic and more narrow organizational parts may be established within the Bank, like: - sectors, - independents services, - services, - departments, functions and other The organizational parts of the Bank are parts of the Bank, which don t have the property of a legal person, have their place of business, persons authorized by employment and representatives, and they perform business with third persons in the name and on behalf of the Bank. Part of the Bank with specific authorizations in payment transactions are registered (they are registered at the Register of the Business Register Agency) according to the law regulating this matter. At constitution of parts of the Bank the competent bodies are obliged to comply with the principles of organizational uniformity of the Bank, functionality, efficiency, rationality and profitability. The Decision of the Board of Directors on constitution and elimination of a specific organizational form and part of the Bank is rendered according to the Rulebook on Internal Organization of the Bank and, if necessary, is registered at the competent authority / Business Register Agency. Article 7 The Bank is obliged to inform the National Bank of Serbia about the opening of branches or other organizational forms at the territory of the Republic of Serbia within 8 days from their opening. The Bank can found or acquire a subsidiary solely in the financial field and only upon approval of the National Bank of Serbia. The Bank can open branch offices and other organizational forms abroad, as well as representative offices.

3 The opening of the organizational parts of the Bank abroad is conducted upon approval of the National Bank of Serbia. Article 8 The Bank performs business activities for the purpose of making profit. The Bank acts in legal transactions (business activities) according to the Law and Acts of the National Bank of Serbia and other regulations: in its own name and on its behalf, in its name and on behalf of other persons, in the name and on behalf of other persons. The Bank performs business activities according to the Law, the Articles of Agreement, this Statute, policies and strategies of the Bank, as well as procedures and established business policy, as not to endanger its liquidity (and solvency), capital adequacy ratio and other mandatory performance indicators of the Bank and others. III DECISION MAKING IN THE ASSEMBLY AND ISSUES DECIDED UPON BY THE ASSEMBLY Article 9 The Bank is managed by the shareholders proportional to the amount of investment in the share capital of the Bank, according to the Act of Incorporation and this Statute. Article 10 The bodies of the Bank are the Assembly, Board of Directors, Executive Board and other boards of the Bank, respectively Audit Board, Assets and Liabilities Management Board, Credit Board. The Bank can, if required (except the Boards from the paragraph above), constitute other boards, as well as other bodies according to the Act of Incorporation and this Statute. Article 11 The shareholders constitute the Assembly of the Bank. A shareholder may directly participate in the work of the Assembly, as well as represented by assignees, according to the Law. All issues related to the operating principles of the Assembly (convocation, convocation of shareholders, decision making, making of minute books) and making decisions, as well as shareholders participation in the work of the Assembly, directly or represented by assignees, will be regulated by the Rules of Procedure of the Bank s Assembly. A shareholder or assignee can inform the Bank on the given voting authorization electronically by sending a digitally signed authorization to the address skupstina@aikbanka.rs, on condition that it is to be deemed by the Bank that the authorization was received on time, if it arrives to the named address at latest before the scheduled starting time of a specific meeting. The shareholders Assembly is normally attended and participated in its work by the President of the Assembly and/or other members of the Executive Board of the Bank, members of the Board of Directors, as well as the auditor of the Bank. Article 12 Assembly of the Bank: 1) Adopts the Business Policy and the Strategy of the Bank, 2) Renders the Statute of the Bank and adopts Amendments to the Act of Incorporation and the Statute of the Bank;

4 3) Adopts the Annual Statement of the Bank and decides on use and disposition of gained profits, respectively covering of losses; 4) Decides on increase of the capital of the Bank, respectively on capital investments in another bank or other legal persons, as well as on investment amount in fixed assets of the Bank; 5) Decides on conditional increase of capital of the Bank based on conversion of the convertible bonds and warrants to shares, 6) Appoints and dismisses the President and Members of the Board of Directors of the Bank and decides on the rewards for the members of the Board of Directors; 7) Decides on status changes and termination of the Bank s activities; 8) Decides on takeover of rights and obligations of the Bank in the process of administrative management, respectively a bank for specific purposes; 9) Appoints and dismisses an external auditor; 10) Renders Rules of Procedure for its work and decides on other issues, according to the Law and this Statute; The Assembly of the Bank is not to assign the decision making from Paragraph 1 of this Article to another body of the Bank. The Bank is obliged to obtain approval for the Statute of the Bank, respectively to Amendments to the Act of Incorporation and the Statute of the Bank from the National Bank of Serbia. The Statute of the Bank, respectively Amendments to the Act of Incorporation and the Statute of the Bank cannot become effective prior to the day of rendering the Decision on approval from the previous Paragraph of this Article. Article 13 The Assembly meetings can be regularly and extraordinary (regular and extraordinary meetings of the Bank s Assembly). A representative of the National Bank of Serbia can attend the meeting of the Bank s Assembly and can address the shareholders at that meeting. The Board of Directors of the Bank is obliged to inform the National Bank of Serbia about the date and agenda of the meeting of the Bank s Assembly, within the term provided for information of the Members of the Bank s Assembly. The day of the shareholders is the day when the list of shareholders is determined who are entitled to participate in the work of the Assembly s meeting and falls on the tenth day prior to the meeting. The list of shareholders from this Paragraph is determined by the Bank, based on the excerpt of the Unique Record of the Shareholders of the Bank at the Central Depository. The shareholder from the list from the previous Paragraph, who after the Day of Shareholders assigns his shares to a third person, retains the right to participate in the work of that meeting of the Assembly, upon shares he possessed on the Day of the Shareholders. The Day of the Shareholders of a not held meeting is valid for the repeated meeting. Article 14 The regular meeting of the Assembly is once a year, at latest within six months after the end of each business year. The Board of Directors of the Bank within the period from the previous Paragraph renders a decision on the date, time and place of the regular Assembly meeting and convokes the meeting of the Assembly. The National Bank of Serbia may request certain issues to be included in the agenda of the regular Assembly meeting.

5 Article 15 In the Bank an extraordinary Assembly meeting can be convoked. By the Law and this Statute the following is closely regulated: bodies upon whose request an extraordinary Assembly meeting can be convoked and all cases are listed in which the Board of Directors must convoke (convokes) an extraordinary Assembly meeting. The National Bank of Serbia may request certain issues to be included in the agenda of the extraordinary Assembly meeting. Article 16 The Board of Directors of the Bank convokes the Assembly meeting of the shareholders of the Bank and prepares decision suggestions. As a rule, the Assembly is held at the Bank s headquarters, unless the Board of Directors decides differently. The invitation for the shareholders for the Assembly contains (specifically): the date of invitation sending, time and place of the meeting, proposal of agenda, with a clear notice which item of the agenda is proposed for the Assembly to make a decision of and quotation of the class and total number of shares to be voted upon, and the majority needed to make that decision, information on the way in which the meeting materials can be taken over, instruction on rights of the shareholders in connection to the participation in the work of the Assembly, clear and accurate information on rules for their realization (which rules must be according to the Law. The Law on Companies, the Statute of the Bank and Rules of Procedure on the work of the Assembly of the Bank), an authorization form, information on the Day of Shareholders which is to contain the minimum of data and description of the voting procedure, stipulated by the regulations of the Law on Companies and explanations that only shareholders, present on the Day of Shareholders, are entitled to participate in the work of the Assembly. In the invitation for the shareholders the Bank is not obliged to state the way of taking over the materials for the meeting, information on the Day of Shareholders, and no explanation that only shareholders present on the Day of Shareholders are entitled to participate in the work of the Assembly, in case when it states in the invitation the web sites, wherefrom the data, respectively documents can be downloaded. The invitation for the shareholders for the Assembly meeting is sent to persons who are shareholders of the Bank on the day, when the Board of Directors has made the decision on convoking the Assembly, respectively the date of the decision of the court (if the Assembly meeting is convoked upon a court request), to the addresses of the shareholders from the Unique Record of the Shareholders of the Bank and is deemed to be submitted (done) on the day of sending the registered mail to that address, respectively by electronic mail, if the shareholder has given his written consent for such deliverance, and by publishing on the web site of the Bank and the web site of the Company Register. The Bank is obliged to publish the invitation for the meeting web site of the regulated market, respectively multilateral trading platform where the shares of the Bank are included and on its web site in a way that this announcement is visible until the date of the meeting. The Bank is obliged to publish on its web site, besides the invitation for the meeting, also the total number of shares and votes on the date of publishing the invitation, including the number of shares of each class, having the right to vote upon the items of agenda of the meeting. The invitation for a regular Assembly meeting in sent latest 30 days prior to the date of the Assembly meeting, and the invitation for an extraordinary Assembly meeting is sent latest 21 days prior to the date of the Assembly meeting. At the same time as the sending of invitation, materials for the Assembly meeting are made available (previously determined by the Board of Directors of the Bank) for taking over in person

6 or by an assignee at the headquarters of the company during working hours, or from the web site of the Bank, so the shareholders can take them over as a whole. The Board of Directors is obliged to inform the National Bank of Serbia about the date and agenda of the Bank s Assembly, within a period provided for informing the members of the Bank s Assembly. The Board of Directors may decide on and discuss only the items of the agenda. The amendment of the agenda with additional items is done upon suggestion of the shareholders who owe at least 5% of the shares with votes, in writing, under the condition that other conditions and procedure regulated by the Law on Companies are fulfilled. The shareholders may vote in writing, without attending the meeting, by authorization of signature on the voting form, according to the law regulating signature authorization. The Bank may enable the participation in the work of the Assembly by electronic means, according to the Law on Companies. The shareholder who is entitled to participation in the work of the Assembly is entitled to ask the members of the Board of Directors and the Executive Board questions relating to the items of the agenda of the meeting, as well as other questions relating to the Bank. Answering to asked questions denying answers, as well as obtaining court protection in case of denied answers to asked questions, is regulated in details by the Law on Companies. Article 17 An extraordinary meeting of the Assembly may be convoked upon written request: 1. Of the Board of Directors or another body of the Bank, which is authorized to convoke an extraordinary meeting of the Assembly, regulated by the Law and other regulations, 2. Of the shareholder of the Bank with at least 10% of the Bank s shares with votes, 3. In other cases regulated by the Law. On the procedure of convoking an extraordinary meeting of the Assembly, the regulations of the Law on Companies are applied. The Board of Directors is obliged to convoke an extraordinary meeting of the shareholders Assembly of the Bank: 1) When the Bank becomes undercapitalized, 2) Upon request of the internal audit of the Bank or the Committee for Monitoring of Activities of the Bank, 3) Upon request of the National Bank of Serbia, 4) Always when deemed as necessary. For an extraordinary meeting of the Assembly, the following must be prepared and made available to the shareholders: proposal text for each decision, which making is proposed along with an explanation, text of a contract or other legal transaction, which conclusion is being proposed for approval, ballot paper, detailed description of each issue proposed for discussion, along with explanation or statement by the Board of Directors of the Bank. Article 18 Each ordinary share entitles to one vote. The Article of Agreement of the Bank determines the cases where the shareholders of priority shares are entitled to vote together with shareholders of ordinary shares. The quorum for the Assembly meeting makes the simple majority of the total number of votes, class of shares entitled to vote upon the issue in question, except in cases, where by this Statute a large majority is determined. The Assembly may decide on the issue in question only if the meeting of the Assembly is attended by or introduced shareholders possessing or representing the stated numbers of votes from paragraph above, of the class of shares entitled to vote upon that issue.

7 The quorum also includes the votes of the shareholders, who have voted in absence (in writing) or by electronic means, and neither own shares of the class in question are not considered, nor the shares of the class in question, whose entitlement is suspended. The quorum of the meeting of the Assembly is determined prior to the beginning of the work of the meeting and is to be maintained during the work duration of the Assembly. In the regular and extraordinary meeting of the Assembly the decisions are made by simple majority of votes of the present shareholders, who are entitled to vote upon an issue in question, except in cases when it is determined by this Statute to request a large majority, respectively except in case of making a decision on: status changes of the Bank and termination of business activities of the Bank, when for the performance of the Assembly and decision making 2/3 majority from the total number of shareholders entitled to vote upon the issue in question is needed. The Assembly adopts Amendments to the Rules of Procedure of the Assembly, upon the suggestion of the President of the Assembly or shareholders owning or representing at least 10% of the votes of the present shareholders. In the Law on Companies the items decisions are stated, about which the shareholder and persons connected to him are not entitled to vote in the meeting. As a rule, about all items of the agenda it is voted publicly, and the procedure of voting is stipulated by the Rules of Procedure of the Assembly, under the provision that it is allowed to determine the way (public or secret) and procedure of voting by the Decision of the Assembly only valid for the specific (that) meeting. Article 19 If the meeting of the shareholders Assembly is postponed due to lack of quorum, it can be convoked again with the same agenda, and to be held at latest 30 days and earliest 15 days from the date of the meeting not held (repeated meeting). The invitation for the repeated meeting is sent to shareholders at latest 10 days prior to the date determined for holding the repeated meeting. If the date of holding the repeated meeting is determined in advance in the invitation for the meeting not held, the repeated meeting will be held on that date, with the provision that that date (date of holding of the repeated meeting) cannot be the date falling earlier than the eighth day or later than the thirtieth day, beginning with the day of the meeting not held. The repeated regular meeting may be held even if the quorum from Article 18 of this Statute is not met, except when the agenda of the meeting includes issues for which a larger majority is determined by this Statute. The quorum for the repeated extraordinary meeting makes one third of the total number of votes of shares entitled to vote upon the issue in question, except in cases when the agenda of the meeting includes issues for which a another majority is determined by this Statute. If in the repeated meeting of the Assembly there is not a needed quorum or the meeting is not held in the stipulated term, the Board of Directors is obliged to convoke a new meeting of the Assembly In the repeated, regular or extraordinary meeting of the Assembly, the decisions are made by a simple majority of present shareholders entitled to vote upon the issue in question, which (the majority) cannot be less than one quarter of the total number of votes of the shares entitled to vote upon the issue in question, except in case when a larger majority for performance and decision making upon single issues is determined by this Statute. Article 20 The chairman of the Assembly meetings is a person chosen at the meeting of the Assembly. The President of the Assembly once elected performs this function at all following meetings

8 of the Assembly, until the election of the new President, according to the Statute and the Rules of Procedure of the performance of the Bank s Assembly. The President of the Assembly: i Proposes to the Assembly the text of the Rules of Procedure of the performance of the Bank s Assembly, - appoints the Recording Secretary and members of the voting commission and is responsible for the orderly composing of the Minutes, which he is signing within eight days from the date of the Assembly meeting and at latest within 3 following days publishes it on the web site of the Bank, with a duration of 30 days at least. The number of the voting commission members, performances which it conducts, persons who cannot be members of that commission are closely stipulated by the Law on Companies. The President of the Assembly is obliged to determine the existence of the needed majority for every decision voted for by the members, if no present shareholder is opposing. On the contrary, the President of the Assembly is obliged to ascertain for every decision voted for by the shareholders: the total number of the shareholders shares participated in voting, the percentage of the share capital which those shares represent, total number of votes for and against that decision and number of votes abstained from voting. At the latest within 3 days from the date of held meeting of the Assembly, the Bank is obliged to publish on its web site with the duration of at least 30 days the made decisions and voting results upon all items of the agenda, voted for by the shareholders. The Law on Companies stipulates in details the right to contest the decision of the Assembly, the consequences of filing a lawsuit for contesting of the Assembly s decision, consequences of the court decision terminating the Assembly s decisions. IV ISSUES DECIDED UPON BY OTHER BODIES OF THE BANK, COMPOSITION AND PROCEDURE OF DECISION MAKING OF THESE BODIES AND THE MANDATE OF THE MEMBERS OF THOSE BODIES 1. ADMINISTRATIVE BODIES OF THE BANK Article 21 The Administrative Bodies of the Bank are the Board of Directors and the Executive Board. The Law on Companies and the Law on Banks stipulate in details the prohibition of election (and cases where election is prohibited) of persons (and persons connected to them) for a representative, member of a Bank s body and other. The Law and other regulations of the National Bank of Serbia regulate in details the cases in which the National Bank of Serbia rejects the request for approval to the appointment / election of the members of the Board of Directors, respectively the Executive Board. A. Board of Directors Articles 22 The Board of Directors of the Bank consists of at least 5 (five) members, including the President, from which one third make persons independent from the Bank. The members of the Board of Directors must be elected from persons with good business reputation and corresponding education, stipulated by the National Bank of Serbia. At least three members of the Board of Directors must have adequate experience from the

9 field of finances. At least one member of the Board of Directors of the Bank must be fluent in Serbian and have his place of residence in Serbia. Article 23 The President and the other members of the Board of Directors are appointed by the Bank s Assembly for a period of 4 (four) years, with the provision that they perform the duty of President and members of the Board of Directors until entry into office of the new elected Board of Directors, upon previously obtained approval of the National Bank of Serbia and after expiration of the four year mandate. Along with the request of the previous approval to the appointment of the members of the Board of Directors, documents and data are submitted to prove the business reputation and qualification of the person proposed for the member of the Board of Directors of the Bank The members of the Board of Directors may be appointed again reelected. Candidates for members of the Board of Directors are proposed by the present Board of Directors, along with mandatory consultations with major shareholders of the Bank. The Assembly of the Bank makes the decision on dismissal of the members and the president of the Board of Directors. A member of the Board of Directors and/or President and/or the whole Board of Directors is dismissed by the decision of the Assembly at a regular meeting of the Assembly, in case of notice of business loss of the Bank except in case when it is a result of reserve covering for estimated losses, or is a result of major and unexpected macro-economic business ambience and other unforeseen situations), and the Assembly of the Bank estimates that the loss has occurred through illegal, incompetent and unknown performance of a single member of the Board of Directors or the whole Board of Directors. By breaches of duty closely listed in the Law on Companies and this Statute, a base for dismissal of members of the Board of Directors of the Bank is acquired. Every member of the Board of Directors may resign from the membership, by submitting a statement in this sense to the Board of Directors and President of the Assembly, who within the legal period informs the National Bank of Serbia The President of the Board of Directors may resign from the position of president, in which case he stays the member of the Board of Directors, but can resign from membership in the Board of Directors, in which case he ceases to be the President of the Board of Directors. The membership in the Board of Directors (of any member or the president) based on their resignation ends with the date when the Bank s Assembly relieves them from that duty. Except in above mentioned cases, the mandate of a member of the Board of Directors expires (for the president and the members) by execution of order of dismissal by the National Bank of Serbia, if he/they is/are finally convicted for a criminal offense to unconditional prison sentence or finally convicted for a criminal offense making him/them unsuitable for performing the function of a member of the Board of Directors of the Bank. The Bank is obliged to inform the National Bank of Serbia about dismissal or resignation of the member of the Board of Directors within 10 days from the date of dismissal or resignation, stating reasons thereof. A member of the Board of Directors of the Bank cannot be a member of the Executive Board of the Bank. Board of Directors of the Bank: Article Convokes meetings of the Assembly of the Bank; 2. Prepares decision proposals for the Assembly of the Bank and is responsible for implementation of those decisions;

10 3. Renders, between two meetings of the Assembly, act to conduct the business policy of the Bank; 4. Determines general business terms of the Bank and their amendments; 5. Elects and dismisses the President and the members of the Executive Board of the Bank; 6. Elects and dismisses member of the Audit Board, Credit Board, Assets and Liabilities Management Board and other boards of the Bank, as well as head of organizational unit, in whose competence is the compliance of the business activities of the Bank and internal audit; 7. Determines amounts up to which the Executive Board of the Bank can decide on placement and borrowings of the Bank above those amounts; 8. Approves previous exposure of the Bank to one person or group of connected persons over 10%, respectively for increasing of this exposure over 20% of the capital of the Bank; 9. Monitor the performance of the Executive Board of the Bank; 10. Adopts the plans and programs of internal auditing of the Bank; 11. Implements the system of internal controls in the Bank; 12. Determines the Strategy and policies for risk management, as well as Strategies of capital management of the Bank; 13. Considers the reports of internal and external auditing; 14. Adopts quarterly and yearly reports of the Executive Board of the Bank on business activities of the Bank and submits to the Assembly of the Bank the financial statement for final adoption; 15. Renders Rules of Procedure for its performance and the performance of the Executive Board; 16. Informs the National Bank of Serbia and other authorities about ascertained irregularities in the Bank s performance; 17. Determines internal organization, respectively organizational structure of the Bank which provides division of duties, competences and responsibilities of the employees, in a way preventing the conflict of interests and providing transparent and documented process of making and implementing decisions, 18. Adopts policy on wages and other revenues of the Bank s employees, 19. Performs other business activities according to this Statute. The Law on Banks and decisions of the National Bank of Serbia are in details stipulating the requirements, which should be met by persons who are potential members of the bodies, elected by the Board of Directors, appointment procedure and other. Article 25 The Board of Directors makes decisions in meetings. The meetings of the Board of Directors of the Bank are as needed, and at least once in three months. The meetings of the Board of Directors of the Bank are held in the headquarter premises of the Bank or other organizational parts of the Bank in the territory of the Republic of Serbia. The quorum for the meeting of the Board of Directors and the quorum for making decisions is the majority of total number of votes of all members of the Board of Directors. The quorum must be provided for the entire duration of the meeting of the Board of Directors. Absent members of the Board of Directors can vote in writing, when for the needs of the quorum it is deemed that they have attended the meeting. The Board of Directors may also hold its meetings in written or electronic means, by phone, telegraph, facsimile machine or by using other means of audio-visual communication, under the condition that none of its members opposes to this in writing. The Rules of Procedure of the Board of Directors closely stipulate the issues referring to

11 taking minutes at meetings of the Board of Directors, its content, signing and sending to the members of the Board of Directors. A representative of the National Bank of Serbia may attend the meeting of the Board of Directors of the Bank and address its members (when the National Bank of Serbia regards it to be necessary). The Bank is obliged to send along the annual financial report to the National Bank of Serbia, also the report on the total number of meetings of the Board of Directors of the Bank and place of their conducting. Article 26 Each member of the Board of Directors has one vote. The decisions of the Board of Directors are registered in the Book of Decisions. B) Executive Board Article 27 The members of the Executive Board of the Bank are elected by the Board of Directors of the bank upon prior obtained approval of the National Bank of Serbia. The Executive Board of the Bank has at least 2 (two) members, from whom one is the President of the Executive Board and the others are members of the Executive Board (hereinafter: other members of the Executive Board). The President and other member of the Executive Board of the Bank are elected for the period of 4 (four) years with the possibility or reelection. The members of the Executive Board must be in an employment relationship at the Bank, with indefinite time and full working hours. The members of the Executive Board of the Bank must have a good business reputation and adequate qualification stipulated by the National Bank of Serbia. At least one member of the Executive Board of the Bank must be fluent in Serbian and have his place of residence on the territory of the Republic of Serbia, and all members of the Executive Board must have their place of residence on the territory of the Republic of Serbia. A member of the Board of Directors cannot be a member of the Executive Board of the Bank. To appointment of members of the Executive Board all regulations of this Statute referring to the appointment of the members of the Board of Directors are applied accordingly. The Board of Directors makes the decision on dismissal of the Executive Board (other members of the Executive Board and the President or only some of the other members of the Executive Board or only the President) in case when the Assembly of the Bank does not adopt the annual financial report of the Bank. More detailed regulations on dismissal of the Executive Board are an integral part of the Rules of Procedure on performance of the Executive Board. The Board of Directors of the Bank also disposes the dismissed member or President of the Executive Board to other suitable business activities within the Bank and determines their earnings. The resignation to the function in the Executive Board of the Bank may be submitted to the Board of Directors by: the President and other members of the Executive Board (the whole Executive Board of the Bank), but also: only the President of the Executive Board or the president and one the other members of the Executive Board, or only some members of the other members of the Executive Board or the President and some of the members of the Executive Board, or the whole Executive Board of the Bank, keeping in mind to provide the continuity of performance of the Executive Board. The resignation can be for the function in the Executive Board or only to membership of the Executive Board. In case when the President of the Executive Board resigns from the function of the President

12 of the Executive Board of the Bank, but not from the membership of the Executive Board of the Bank, the Board of Directors of the Bank will at the first next meeting adopt the resignation and elect one of the other members of the Executive Board for President of the Executive Board, and the former president will be dismissed and disposed to the function of the other member of the Executive Board of the Bank, and this change will be registered at the Business Agency Register, according to the Law on Registration. In case when the President of the Executive Board resigns from the membership of the Executive Board of the Bank or only one member of the Executive Board resigns from the membership of the Executive Board, the Board of Directors of the Bank will at the first next meeting elect a president from the other members of the Executive Board of the Bank, and the former President or member of the Executive Board of the Bank will be dismissed from the membership of the Executive Board and start with the election procedure for one more member of the Executive Board of the Bank, keeping in mind to provide continuity of performance of the Executive Board In case of resignation of the whole Executive Board from the function in the Executive Board of the Bank (the President and other members of the Executive Board) or the President and a certain number of members, by whose resignation the total number of members would decrease to the minimum (to 2 members including the President), the resignation does not free the Executive Board of the Bank of performance of former business activities, until the adoption of resignation by the Board of Directors and to the longest to the term of 3 (three) months, in which the election procedure for the members of the Executive Board and at the same time for dismissal of the resigned members of the Executive Board from the function in the Executive Board of the Bank will be conducted. When the Board of Directors of the Bank adopts the resignation from membership of the Executive Board of the Bank submitted by: the President or any other member of the Executive Board, or only other members of the Executive Board, they will be dismissed from the membership of the Executive Board and dispose them to positions within the Bank which are adequate for their education, experience and results in former activities. Except in the above mentioned cases, the mandate of the member of the Executive Board ceases by execution of order of dismissal by the National Bank of Serbia, if he/they is/are finally convicted for a criminal offense to unconditional prison sentence or finally convicted for a criminal offense making him/them unsuitable for performing the function of a member of the Executive Board of the Bank. The Bank is obliged to inform the National Bank of Serbia about dismissal or resignation of the members of the Executive Board within 10 days from the date of dismissal or resignation, stating reasons thereof. Article 28 The Executive Board of the Bank organizes the business activities of the Bank and conducts the monitoring of the activities of the employees of the Bank. The Executive Board of the Bank: 1) Implements the decisions of the Assembly of the Bank and the Board of Directors of the Bank, 2) Provides the legitimacy of the bank activities, 3) Decides on placements and borrows of the Bank up to the amount determined by the Board of Directors of the Bank, 4) Decides on each increase of the Bank s exposure towards persons connected to Bank and informs the Board of Directors thereof, 5) Implements the business strategy of the Bank, 6) Conducts the strategy and policies for risk management, as well as strategies of capital management,

13 7) Adopts procedures for identification, measurement and assessment of risk, as well as risk management, analyses the efficiency of their implementation and informs the Board of Directors on that activities, 8) Applies procedures of monitoring of the Bank s activities, regularly assesses their quality and, if necessary, improves them according to the business policy of the Bank, 9) Provides for all employees to be familiar with regulations and other acts of the Bank, regulating their work obligations, 10) Provides security and regular monitoring of the information technology systems of the Bank, 11) Provides security and regular monitoring of the system of the treasury business activities, 12) Informs the Board of Directors on all course of actions not in accordance with the regulations and other acts of the Bank, 13) At least once during the business quarter submits to the Board of Directors a reviews of business activities, balance sheet and income statement of the Bank, 14) Informs the Board of Directors and the National Bank of Serbia without delay about each deterioration of the financial state of the Bank or an existing danger for such deterioration, as well as other facts which can significantly influence the financial state of the Bank, 15) Decides on all issues which are not within the competence of the Assembly and the Board of Directors. The Executive Board of the Bank may elect other bodies, commissions, committees and similar, if the selection and appointment is not within the competence of the Board of Directors, and in accordance with the Rulebook on Internal Organization. Article 29 The President of the Executive Board represents and represents the Bank. At concluding of legal affairs and undertaking of legal actions from the competence of the Executive Board, the President of the Executive Board is obliged to provide the signature of one member of that board (co-signature), with the provision that that persons also are obliged to state their function in the Bank along with the signature. The President of the Executive Board convokes meetings of the Executive Board and is their chairman, organizes the performance of the Executive Board and takes care about taking of minutes and archiving of decisions. By the Rules of Procedure of the Executive Board, the Board of Directors closely determines the performance of this body. The obligation of informing the Assembly of the Bank on incomes of the members of the governing bodies. Obligation on informing the Assembly of the Bank on the incomes of the managing bodies Article 30 The Assembly of the Bank at least once a year considers the written information on all salaries and benefits and other incomes of the members of the Board of Directors and the Executive Board and on all contracts between the Bank and the members of that boards and other persons connected to that members, and which consequence is material gain of that persons, as well as the proposal of the Board of Directors of the Bank on salaries, benefits and other material gain of those persons for the following year.

14 3. OTHER BOARDS OF THE BANK Article 31 The Bank establishes a Board for monitoring of the Bank s business activities (Audit Board), Credit Board and the Assets and Liabilities Management Board. The Board of Directors of the Bank may beside the Boards from paragraph 1 of this Article establish other boards. Board for monitoring of the Bank s business activities (Audit Board) Article 32 The Board for the monitoring of the Bank s business activities consists of 3 (three) members, from whom two are members of the Board of Directors of the Bank and have adequate experience in terms of the Laws from the field of finances, and at least one member must be a person, independent from the Bank. The Board for the monitoring of the Bank s business activities helps the Board of Directors in monitoring of the performances of the Executive Board of the Bank and the Bank employees. The Board for the monitoring of the Bank s business activities is obliged to: 1) Analyze financial statements and other financial reports of the Bank, which are submitted to the Board of Directors of the Bank for consideration and adoption, 2) Analyze and adopts strategies and policies of the Bank connected to risk management, strategy of capital management of the Bank, as well as the system of internal controls, submitted to the Board of Directors of the Bank for consideration and adoption, 3) Analyzes and monitors the application and adequate implementation of the adopted strategies and policies for risk management, strategy of capital management of the Bank, as well as conducting the systems of internal controls, 4) At least once a month reports to the Board of Directors about its activities and ascertained irregularities and proposes the way in which those irregularities are to be corrected, respectively advance strategies and policies for risk management, strategy for capital management of the Bank and system of conducting internal controls, 5) Upon proposal of the Board of Directors or the Executive Board of the Bank or external auditor considers investments and activities of the Bank, 6) Proposes to the Board of Directors and the Assembly of the Bank an external auditor of the Bank, 7) Considers together with the external auditor of the Bank annual auditing of financial reports of the Bank, 8) Proposes to the Board of Directors of the Bank to include certain issues connected to external and internal auditing to the agenda of the meeting of the Assembly, 9) Renders Rules of Procedure for its performance. The Board is obliged to propose to the Board of Directors relief of observed irregularities, when it estimates that the Bank s business activities are contrary to the law, another regulation, statute or other act of the Bank, or comes to this conclusion based on auditing reports, and to schedule an extraordinary meeting of the Assembly, when it ascertains that the observed irregularities may have serious consequences to the business activities of the Bank. The members of the Board for the monitoring of the Bank s business activities meet at least once a month, and at least once a quarter, at the headquarters of the Bank. Credit Boards Article 33

15 The Board of Directors of the Bank by its decision establishes especially: -the number of members of the Credit Boards of the Bank, -the election and dismissal of the members of the Credit Boards (conditions for persons elected for membership in the credit board, election period), obligations, competences and responsibilities of the members of the Credit Board and other. The Credit Boards of the Bank decide on credit applications within determined acts of the Bank - Decision on limits, and conducts other business activities determined by the acts of the Bank. Assets and Liabilities Management Board Article 34 The Assets and Liabilities Management Board: traces the exposure of the Bank to risks arising from the structure of its balance sheet assets and obligations and off-balance sheet items, proposes measure for interest risk management and liquidity management, and performs other business activities determined by the acts of the Bank and regulations of the National Bank of Serbia. The detailed operation and activities of the Assets and Liabilities Management Board is established by the Rulebook on its operation, which is adopted by the Board of Directors of the Bank. The Assets and Liabilities Management Board has at least 5 members who must have adequate experience in the field of finances and must be employed at the Bank. V RIGHTS, OBLIGATIONS AND RESPONSIBILITIES OF THE MEMBERS OF THE BOARD OF DIRECTORS AND THE EXECUTIVE BOARD AND OTHER PERSONS WITH SPECIAL AUTHORIZATIONS AND RESPONSIBILITIES Article 35 Persons with special authorizations and responsibilities in the Bank are, except the President and other members of the Executive Board of the Bank, also managers of branches and other organizational parts and organizational forms within the Bank, according to the Rulebook on Internal Organization of the Bank and members of the Bank s Boards. The Articles of Agreement, this Statute and the Rulebook on Internal Organization of the Bank are regulating in details the rights, obligations and responsibilities of persons with special authorizations. Article 36 The members of the Board of Directors and the Executive Board of the Bank and persons with special authorizations and responsibilities of the Bank have (legally provided) the right to perform business activities, determined by the Law, the decisions of the National Bank of Serbia, this Act and other acts of the Bank, and authorizations to conduct their business activities legally and scrupulously, according to the Laws and the Acts of the National Bank of Serbia and the Bank. The members of the Board of Directors and the Executive Board of the Bank obliged to submit to the Board of Directors of the Bank a statement (with data from the Law and the Decisions of the National Bank of Serbia) for the purpose of prevention of conflict of interests, within one month from entry into office, as well as afterwards (if the data change, within a month from the date of knowledge of that change). The Board of Directors is obliged to submit the data from the above paragraph to the Assembly of the Bank at least once a year. The members of the Board of Directors and the Executive Board of the Bank the Head of the Organizational Unit for Risk Management in the Bank and his deputy, Head of the organizational unit for monitoring of business activities compliance, internal auditor, managers of other organizational pats and organizational forms of the Bank, are according to the Rulebook on Internal

16 Organization of the Bank, persons who have special duties of care towards the Bank, and who in this function are: obliged to perform their business activities scrupulously, with due care and diligence and in reasonable assurance to act in the best interest of the Bank and to compensate the damage occurred by breach of duty of attention. Persons named in the above paragraph of this Article (who have special obligations towards the Bank) have the obligation to avoid conflict of interests and the obligation to respect the prohibition of competition, according to the regulations of the Law on Companies. A shareholder of the Bank can submit a claim against persons, who have special obligations towards the Bank (derivative claim), in cases, out of reason and under conditions stated in details in the Law on Companies. One or more shareholders of the Bank can submit in their own name and on behalf of the Bank a claim (derivative claim), in cases, out of reason and under conditions closely stated in the La on Companies. The Board of Directors and the Executive Board of the Bank are obliged to undertake all measures in preventing illegal and inappropriate actions and influences, which are harmful and not in the best interest of the Bank and its shareholders, and conducted by persons who have a major or control involvement in the Bank. The Board of Directors is responsible for the business activities of the Bank to be according to the law, other regulations and Acts of the National Bank of Serbia, as well as acts and other procedures established by the Bank s bodies. The Board of Directors of the Bank is responsible for establishment of a unique system of risk management in the Bank and for monitoring of that system, and is obliged to provide the Executive Board of the Bank to identify risks to which the Bank is exposed, and to conduct the control of that risks according to the approved strategies and policies and adopted and approved procedures The Board of Directors of the Bank is responsible for accuracy of all reports on business activities, state of finances and business results of the bank sent to the shareholders of the Bank, the public and the National Bank of Serbia. The Board of Directors is obliged to inform the National Bank of Serbia on the date and agenda of the meeting, in terms foreseen for information of the members of the Board of Directors of the Bank. The Board of Directors is obliged to convoke an extraordinary meeting, if the National Bank of Serbia requires so, in terms of consideration of certain issues. The members of the Executive Board of the Bank are responsible for conducting of internal control of the business activities of the Bank at all levels, according to the established control system. The Executive Board of the Bank is responsible for maintaining of liquidity and solvency of the Bank. The Executive Board is responsible for successful business activities (for achieving the business plans given by the Board of Directors). Article 37 The bodies of the Bank and all employees at the Bank conduct a range of procedures and principles as a permanent process, representing internal control, in a way based on this Statute and Decision on establishment and implementation of the system of internal control in the Bank. The Head of the organizational unit for control of business activities compliance of the Bank, id obliged to immediately inform the Executive Board and the Board for monitoring of business activities of the Bank about identified omissions referring to business activities compliance. The Head of the organizational unit, in whose competence is the internal audit, is entitled to directly address the Board of Directors, whenever he deems it to be necessary, and he is

17 authorized to propose convoking of the Board for monitoring of business activities of the Bank, whereof he informs the Board of Directors of the Bank, and if the meeting of that Board is not held, he informs the Assembly of the Bank thereof at the first following meeting. The Head of the organizational unit, in whose competence is the internal audit, is responsible for efficient, continuous, regular and quality performing the function of internal audit and efficiently implementation of the programs and operational yearly plans of that audit. VI MEASURES AND RESPONSIBILITIES OF THE BANK S BODIES FOR PROVISION OF LIQUIDITY AND SOLVENCY OF THE BANK Article 38 The Bank maintains liquidity by adjusting structure and maturity of resources and placements: 1. By effort to increase the deposit, by recapitalization and acquiring of other sources, 2. By more efficient collection of due claims, 3. By sale of short-term securities and other securities, 4. By other measures and actions. Article 39 If the conducted measures, referred to in the Paragraph 1 of this Article do not provide the liquidity of the Bank, the Bank will undertake other measures according to the regulations, namely: Borrowing from other persons, Postponing the payment term of due obligations Postponing the maturity of undue obligations, Conversion of currency to RSD and vice versa, Stopping of loan approvals and disbursements, Stopping of payment from its gyro account and accounts from the parts of the Bank, Withdrawal of placements and collection of undue obligations, Stopping of guarantee issuing and other forms of warranties, Stopping of issuing Letter of Credits and other instruments of payments Undertaking other measures for adjustment of inflow and outflow Other Boards of the Bank (Credit Board and other) and other persons must not endanger by their proceedings (actions, business activities and other) the liquidity and solvency of the Bank. VI A) RISK MANAGEMENT Article 39a The Bank identifies, measures and estimates risks to which it is exposed in its business activities and manages these risks. The Bank is obliged to form a special organizational unit, in which competence is the risk management. The risk management is adjusted to the size and organizational structure of the Bank, range of its activities and type of activities which the Bank is conducted. The bank stipulates by its acts the strategy and policies for risk management, strategy of capital management, procedures for identification, measurement and assessment of risk, as well as risk management, according to the regulations, standards and code of practice. The acts from the previous paragraph of this Article contain: 1. Provisions by which the functional and organizational separation of risk management activities and regular business activities of the Bank is provided.

18 2. Procedures of identification, measurement and risk assessment, 3. Procedures for risk management, 4. Procedures by which the control and consistent implementation of all internal acts of the Bank referring to risk management is provided. 5. Procedures for regular reporting of the Bank s bodies and the regulatory body of the risk management. VII WAY OF CONDUCTING THE INTERNAL CONTROL AND INTERNAL AUDIT OF THE BANK Internal control Article 40 By the acts rendered by the Board of Directors of the Bank, conduct the implementation and organization of the system of the internal control (in a way enabling continuous tracing and measuring of risks, which can negatively influence the achievement of established business targets - credit risks, risks of the country of debtor, currency risk, market risk, interest risk, liquidity risk, operational and other risks). The Bank is obliged to develop the system of internal controls in a way which enables a timely assessment of existing risks and new risks and risks which are not controlled, and which are out of control, as well as control of that risks, all for the purpose of decreasing the adverse influence of the risk brings to the smallest possible degree, in connection with the business activities and solvency of the Bank. Article 41 The internal control of the bank is a permanent process which includes a range of proceedings and principles are conducted by: the Bank s bodies, all employees of the Bank in the way referred to in this Statute and Act on basic organizational principles and performance of the internal control in the Bank. The Executive Board (the President) may form a special Commission for internal control. The Commission from the paragraph above consists of professional employees of the Bank and is independent in performance. Article 42 A special Commission conducts the control of business activities by direct insight in business documentation and business activities of the Bank as a whole. A special Commission of the Bank especially controls if the business activities of the Bank are conducted according to regulations, general and particular acts of the Bank and business policy of the Bank. Article 43 The special Commission of the Bank prepares a report which is sent to the organizational part of the Bank, where the control was conducted, for the purpose of informing, respectively undertaking adequate measures and relief of assessed failures and irregularities. The report on the conducted internal control, which is composed by the special Commission of the Bank, the Executive Board of the Bank sends to the Board of Directors of the Bank. Article 44 The efficient performing of the Banks activities and integration of proceedings of internal control to all activities of the Bank is enabled: 1) By establishing such organizational parts, which by its size, competence, organizational and qualification structure meet the range and type of business activities performed by the Bank;

19 2) By clear defining of tasks, competences and responsibilities of bodies and employees of the Bank, as well as way of informing about their performance and business activities within their competence; 3) By division of competences and responsibilities of the employees of the Bank, in the way which provides efficient risk control within the business activities of the Bank; 4) By implementation of adequate vertical connections (subordination ration) between the bodies and persons employed at the Bank, as well as between wider and shorter organizational parts of the Bank; 5) By implementation of adequate horizontal connections (coordination ratio) between organizational parts and persons responsible for various aspects of business activities of the Bank Article 45 The Bank has the obligation of proceedings of internal control: - Organize, conduct, develop and integrate in a way to enable continuous tracing and measurement of those risks, which can negatively influence the achievement of set business targets of the Bank, - To develop, in a way to enable timely assessment of existing and new risks, including the risks which were previously not controlled and risks out of control of the Bank (external risks), as well as such control of them, which will keep the negative influence to the business activities and solvency of the Bank to a minimum, - To integrate the proceedings of internal control to every day s activities at all organizational levels. Article 46 The bank establishes reliable information systems, including the electronic processing standardized data, available to the Bank s bodies as well as to the employees of the Bank, covering all important fields of its business activities and enable acquiring of complete, timely and accurate: Financial and other data necessary for conducting of the business activity of the Bank and rendering adequate business decisions, Data on compliance of the business activities of the Bank to regulations and acts of business policy, Data on market conditions and external events significant for making of business decisions of the Bank. The Bank also implements the total monitoring of its information systems. Article 47 The systems of internal control within the Bank are regulated by the Decision on establishment and implementation of the system of internal control in the Bank and other acts of the Bank. Compliance Function. Article 48 Compliance Function of the Bank is within the competences of a special organizational unit of the Bank. The organizational unit in which competence is the Compliance of the Bank is obliged to at least once a year identify and assess the main risks of that adjustment and propose plans for that risks management, and the Head of that organizational unit is obliged to compose a report thereof and submit it for adoption to the Executive Board, as well as to send it to the Board for tracing the business activities of the Bank. The person with special authorizations and responsibilities (Head of the organizational unit)

20 in whose competence is the adjustment control of the business activities of the Bank, is responsible for the identification and tracking of adjustment risks in the business activities of the Bank and for that risk management, which especially includes risk of sanctions of a regulatory body and financial losses, as well as reputational risk, which can occur as a consequence of omission of adjustment of business activities to the Law and other regulations, business standards, procedures in prevention of money laundering and financing of terrorism, as well as to other acts by which the business activities of the Bank are regulated. All employees of the Bank are obliged to, upon request of the employees in the organizational unit for control adjustment of business activities, at any moment, to enable the insight to documentation they possess and to give them the necessary information. The organizational unit for adjustment control of the business activities is obliged to compose a tracking program of adjustment of business activities of the Bank, which specially includes the working methodology of that organizational unit, planned activities, way and terms of composing reports, way of controlling of that adjustment, as well as the training plan of the staff. The Head of the organizational unit referred to in the paragraph 1 of this Article is appointed and dismissed by the Board of Directors of the Bank. The Head of the organizational unit from paragraph 1 of this Article and the employees of that organizational unit are independent in their performance and solely conduct business activities from the competence field of the organizational unit for adjustment control of the business activities. Function of internal audit Article 49 The internal audit in the Bank is conducted by a special organizational unit whose basic tasks towards the Board of Directors are: To give independent and impartial opinion on issues which are subject to the audit, Conduct advisory activities directed to advancement of the existing system of internal controls and business activities of the Bank, as well as To assist the Board of Directors in achieving of its goals, applying a systematic, disciplined and documented approach to valuation and advancement of the existing way of risk management, control and management of the processes. The organizational unit referred to in the paragraph 1 of this Article has at least one employee with title, stipulated by regulations from the field, whereby audit is regulated and other regulations from that field. The Bank is obliged to conduct the function of internal audit according to the regulations, which regulate the basic principles of organization and performance of the internal audit of the Bank. Article 50 The Head of the organizational unit in whose competence is the internal audit is appointed and dismissed by the Board of Directors of the Bank. The Head of the organizational unit referred to in the paragraph 1 of this Article prepares a program of internal audit and determines the methodology of its performance, and especially the manual for the performance of internal audit, way and terms of composition and submission to the competent authorities of the Bank reports on internal audit, way of tracking of recommended activities for relief of irregularities and failures assessed in the business activities of the Bank, as well as the way and responsibility for the composition, use and keeping of documents on performed activities of the internal audit according to the annual plan. The Head informs the Board of Directors on the results of the conducted audit. The employees within the organizational unit of this Article cannot perform managerial or