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Important Events

03 Jan 2016

According to the provisions of the Bucharest Stock Exchange Corporate Governance Code, BRD - Groupe Société Générale S.A. informs the investors that:

Since 2012, the bank has adopted and applies, on a voluntarily basis, the provisions of Corporate Governance Code of the Bucharest Stock Exchange (BSE) and reports annually the compliance with its provisions. The internal governance of BRD - Groupe Société Générale S.A. is lined up with that of the parent company, Société Générale.

The compliance with the Code provisions has been an ongoing objective and the stage where the Bank stands today are a response to these efforts.
Most of the provisions of the Code are fulfilled by BRD. Therefore, according to the Code, we submit to the investors the current situation with those few provisions from the Code that are in process to be implemented.

PROVISION

REASON FOR SUCH DEVIATION /THE MEASURE THAT BANK INTENDS TO TAKE

Section A – Responsibilities

A.4.

…

Not less than two non-executive members of the Board of Directors or Supervisory Board should be independent, in the case of Premium Tier Companies.

…

On December 31, 2015, BRD - Groupe Societe Generale SA has on the Board of Directors only one independent member.

In order to nomination and to designate one additional independent member in the Board of Directors, the Bank Board of Directors called the OGSM on January, 7, 2016.

A.5. A Board member’s other relatively permanent professional commitments and engagements, including executive and non-executive Board positions in companies and not-for-profit institutions, should be disclosed to shareholders and to potential investors before appointment and during his/her mandate.

The relevant information regarding the professional qualification of the candidates for the position of Director/Independent Director are discloses to shareholders and to potential investors, on the institutional website on sections https://www.brd.ro/en/about-brd/news/latest-news and https://www.brd.ro/en/about-brd/shareholders-and-investors/gms.

A detaliled presentation of the information regarding the professional commitments and engagements of the members of the Board of Directors, including executive and non-executive Board positions in companies and not-for-profit institutions, will be reflected in the Annual report of the Board of Directors on December 31,2016, on Chapter Corporate Governance.

A.6. Any member of the Board should submit to the Board, information on any relationship with a shareholder who holds directly or indirectly, shares representing more than 5% of all voting rights. This obligation concerns any kind of relationship which may affect the position of the member on issues decided by the Board.

The internal Regulation of organization and functioning of the management body established for the members of the Board of directors the obligation to declare any situation which could place them in a conflict of interest and to abstain when the Council takes decisions that could affect their position.

The Chapter Corporate Governance on Annual report of the Board of Directors on December 31,2016, will include an extract from the afiliation statements of the members of the Board of Directors.

A.11.

...

The majority of the members of the nomination committee should be independent.

On 2014, BRD’s Board of Directors set up a Nomination Committee formed of non-executives members of the Board.

Section B - Risk management and internal control system

B.1…... In the case of Premium Tier companies, the audit committee should be composed of at least three members and the majority of the audit committee should be independent.

On, December 31, 2015, the BRD - Groupe Societe Generale SA’s Audit Committee has three non-executive members of the Board of Directors and the President is an independent member of the Board.

A decision regarding the modification of the composition of the Audit Committee will be discussed by the Board of Directors depending on the decisions that will be adopted in the Ordinary General Meeting of Shareholders on January 07, 2016.

B.5. The audit committee should review conflicts of interests in transactions of the company and its subsidiaries with related parties.

BRD’s internal Regulation on the organization, functioning and powers of the Audit Committee will be updated in this respect.

B.10. The Board should adopt a policy ensuring that any transaction of the company with any of the companies with which it has close relations, that is equal to or more than 5% of the net assets of the company (as stated in the latest financial report), should be approved by the Board following an obligatory opinion of the Board’s audit committee, and fairly disclosed to the shareholders and potential investors, to the extent that such transactions fall under the category of events subject to disclosure requirements.

According to the Bank’s internal regulations, the power to approve the transactions with the related party lies with the Board of Directors.

The necessity to exist an opinion of the Audit Committee on such transactions will generate consequent updating of the internal regulations.

If such transactions are included in the category of events subject to reporting requirements, the transactions will be disclosed to shareholders / investors.

Section C - Fair rewards and motivation

C.1. The company should publish a remuneration policy on its website and include in its annual report a remuneration statement on the implementation of this policy during the annual period under review.

The remuneration policy should be formulated in such a way that allows stakeholders to understand the principles and rationale behind the remuneration of the members of the Board and the CEO, as well as of the members of the Management Board in two-tier board systems. It should describe the remuneration governance and decision-making process, detail the components of executive remuneration (i.e. salaries, annual bonus, long term stock-linked incentives, benefits in kind, pensions, and others) and describe each component’s purpose, principles and assumptions (including the general performance criteria related to any form of variable remuneration). In addition, the remuneration policy should disclose the duration of the executive’s contract and their notice period and eventual compensation for revocation without cause.

The remuneration report should present the implementation of the remuneration policy vis-à-vis the persons identified in the remuneration policy during the annual period under review.

Any essential change of the remuneration policy should be published on the corporate website in a timely fashion.

The Bank has a remuneration policy, reviewed and approved annually by the Board.

The relevant information regarding the remuneration policy of the Bank vis-à-vis the Management Body and also to the persons identified, will be disclosed to shareholders and investors on the Corporate Governance Chapter of the Annual Report of the Board of Directors on December,31,2016.

Section D - Building value through investors’ relations

D.1. The company should have an Investor Relations function - indicated, by person (s) responsible or an organizational unit, to the general public. In addition to information required by legal provisions, the company should include on its corporate website a dedicated Investor Relations section, both in Romanian and English, with all relevant information of interest for investors, including: …..

D.1.2. Professional CVs of the members of its governing bodies, a Board member’s other professional commitments, including executive and non-executive Board positions in companies and not-for-profit institutions;

…..

The relevant information regarding the professional qualification of the members of the Board of Directors are disclose to shareholders and to potential investors, on the institutional website on section https://www.brd.ro/en/about-brd/news/latest-news.

D.2. A company should have an annual cash distribution or dividend policy, proposed by the CEO or the Management Board and adopted by the Board, as a set of directions the company intends to follow regarding the distribution of net profit. The annual cash distribution or dividend policy principles should be published on the corporate website.

On December 31, 2015, the Bank had not an annual cash distribution or dividend policy.

For the year 2016, BRD intends to adopt such a policy and to publish in on the institutional website.

D.3. A company should have adopted a policy with respect to forecasts, whether they are distributed or not. Forecasts means the quantified conclusions of studies aimed at determining the total impact of a list of factors related to a future period (so called assumptions): by nature such a task is based upon a high level of uncertainty, with results sometimes significantly differing from forecasts initially presented. The policy should provide for the frequency, period envisaged, and content of forecasts. Forecasts, if published, may only be part of annual, semi-annual or quarterly reports. The forecast policy should be published on the corporate website.

On December 31, 2015, the Bank did not have a policy with respect to forecasts.

For 2016, in order to comply with this provision, BRD intends to adopt such a policy and to publish it on the institutional website, untill the end of 2016.

D.4. The rules of general meetings of shareholders should not restrict the participation of shareholders in general meetings and the exercising of their rights. Amendments of the rules should take effect, at the earliest, as of the next general meeting of shareholders.

For the 2016, the Bank will analyze the possibility to enable its shareholders participating in general meetings, aiming at using electronic communication means through (a) live broadcast of general meetings and/or (b) live bilateral communication and to provide for an electronic voting system at general meetings, including remote electronic voting.

D.7. Any professional, consultant, expert or financial analyst may participate in the shareholders’ meeting upon prior invitation from the Chairman of the Board. Accredited journalists may also participate in the general meeting of shareholders, unless the Chairman of the Board decides otherwise.

The procedures on the organization of the GSM will include specific reference regarding the participation of the specialists, consultants or analysts to GSM, and will be submitted to shareholders approval in April 2016.

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Important Events