Remuneration provided to members of the Governing Bodies and Senior Management; Non-Competition Covenant:

The total value of rights and material benefits provided to members of the board of directors and of the senior management in 2016 amounted to TL 10,047,000. The total value of cash and non-cash benefits consisting of allowances, travel, accommodation and representation expenses and of insurance and similar guarantees provided to the Board of Directors amounted to TL 1,112,000; the sum provided to members of the Senior Management amounted to TL 1,018,000.

Duty of Loyalty Report:

It has been concluded that, within the situations and the conditions in the best of our knowledge at the time of the transaction or at the time of the countermeasure taken-or-avoided, in all the transactions made in 2016 between Türkiye Finans Participation Bank Inc. and the controlling partner, affiliates of the controlling partner, and affiliates of Türkiye Finans Participation Bank Inc., there was admissable substitution, and there were no countermeasures taken-or-avoided that might cause loss to the company, and in this regard, there were no transactions or countermeasures that necessitate balancing.

Special Audits, Public Authority Audits:

In accordance with the relevant legislation to which our Bank is subject, regular inspections are carried out in our Bank by supervisory authorities such as the BRSA, the Ministry of Finance and the Central Bank of Turkey. Also the Bank was subject to the audit conducted under the scope of Law on Consumer Protection Numbered 6502 and its sub-regulations during 2016. There were no shareholder requests for special audits during 2016.

Administrative and Judicial Sanctions:

No judicial or administrative rulings and/or investigations of sanction were applied against the company or the members of the board of directors in association with any practices contravening the provisions of the legislation.

In 2016, a total administrative penalty of TL 161,000 was imposed by regulatory and supervisory authorities against the Bank.

Investments and Incentives:

In 2016, our Bank invested in total TL 415.6 million, TL 53.7 million of which is intangible fixed asset and TL 361.8 million is tangible fixed asset. Most of the investment of tangible fixed asset was made for New Headquarter building located in Ümraniye/İstanbul.

The grant of TL 275,000 was obtained for our R&D activities carried out under the leadership of TÜBİTAK (The Scientific and Technological Research Council of Turkey). Within this scope, a total investment of TL 550,000 was undertaken and our activities continue on a project basis.

Charitable Assistance and Donations:

No donations and grants were provided in 2016.

Shares that the Bank has acquired in itself:

There are no shares which the Bank has acquired in itself.

Information on Laws Suits Filed Against the Bank, Which May Affect the Financial Status and Operations of the Bank and Their Possible Results:

No lawsuit that may affect the financial status and operations of the Bank was filed against the Bank in 2016.

Highlights Occurred after Annual Period:

On 2 February 2017, Fitch Ratings -an international credit rating agency- after it has lowered Turkey’s credit rating one step below, has also downgraded the Bank’s long-term foreign and local currency credit rating from “BBB” to “BBB-”. Besides, the agency revised Türkiye Finans’ outlook from negative to stable.