The remuneration of the members of the Board of Directors is determined by the General Meeting of Shareholders in accordance with Article 62.1.13 of the Company Law of Mongolia, Article 29.2.9 of the Banking Law of Mongolia, Article 13.1.8 of the Charter of Transport Development Bank, and Clause 12 of the Board of Directors Operating Procedures.

Board Structure, Composition, Operating Principles, Director Independence Criteria, and Oversight and Approval of Major and Conflict-of-Interest Transactions:

The Board of Directors of TransBank comprises seven members, including independent directors. The Board is chaired by Mr. B. Erdenebayar, with Ms. R. Bazarmaa, Mr. B. Munkhbayar, Ms. D. Ashidmaa, and Mr. T. Baasanjav serving as directors. Ms. B. Oyuntsatsral and Mr. Ch. Zorigtbaatar serve as Independent Directors.

The Board comprises highly qualified professionals with extensive experience in Mongolia’s banking and financial sectors. Board members are elected annually at the Bank’s Annual General Meeting of Shareholders. The independence of Board members is governed by the Bank’s Board of Directors Operating Procedures and the contractual agreements entered into with individual directors. The Board conducts its activities in compliance with applicable laws and regulations of Mongolia, as well as the rules, regulations, and guidelines approved by the Bank of Mongolia. Its operations are further governed by the Charter of TransBank, approved by the General Meeting of Shareholders, and the Board of Directors Operating Procedures, approved by the Board.

Composition, Operations, Responsibilities, Authority, and Reporting Framework of Board Committees:

Committees of the Board of Directors

Pursuant to Articles 81.1 and 81.2 of the Company Law of Mongolia, the Board of Directors has established four standing committees: the Audit Committee, Risk Management Committee, Human Resources and Remuneration Committee, and Nomination Committee. In accordance with Article 81.2 of the Company Law of Mongolia, which stipulates that the board of directors of a joint-stock company must establish audit, remuneration, and nomination committees, with independent directors constituting at least two-thirds of the membership of each such committee, the Bank maintains the relevant committee structures and governance arrangements. Each committee operates in accordance with its respective operating procedures approved by the Board of Directors and is responsible for supporting the Board in the effective discharge of its duties and responsibilities.

The composition of the committees under the Board of Directors is presented below.

• Audit Committee

The Audit Committee consists of three members, including two Independent Directors. The Committee meets quarterly, holding more than four meetings annually, and reports to the Board of Directors at least once a year. The Audit Committee is responsible for reviewing the Bank’s financial reporting processes, the effectiveness of its internal control systems, audit activities, compliance with applicable laws and regulations, and risk management practices. Based on its assessments, the Committee provides recommendations to the Board of Directors. The Committee is also responsible for safeguarding the independence of both internal and external auditors and facilitating effective cooperation among the Board of Directors, the Bank’s management, and internal and external auditors.

• Risk Management Committee

The Risk Management Committee consists of seven members, including two Independent Directors. The Committee meets quarterly, holding more than four meetings annually, and reports regularly to the Board of Directors. The Risk Management Committee is responsible for overseeing and supporting the adequacy and effectiveness of measures implemented by the Bank’s executive management to identify, assess, monitor, and manage credit risk, market risk, liquidity risk, operational risk, legal risk, reputational risk, and other relevant risk categories. Through its oversight activities, the Committee supports the Board of Directors in ensuring that the Bank maintains an appropriate and effective risk management framework.

• Human Resources and Remuneration Committee

The Human Resources and Remuneration Committee consists of two members, including one Independent Director. The Committee meets once every quarter and reports to the Board of Directors at least annually. The Committee assists the Board of Directors in ensuring that the Bank’s executive management and Board-level committees comprise individuals with the appropriate qualifications, professional knowledge, competencies, and experience. It oversees the suitability of senior executives for their respective positions, conducts annual performance evaluations of executive management, and submits recommendations to the Board regarding appointments, removals from office, and dismissals. Furthermore, the Committee provides advice to the Board of Directors on matters relating to sound corporate governance and supports the Bank’s long-term business sustainability and development.

• Nomination Committee

The Nomination Committee consists of two members, including one Independent Director, and convenes meetings as necessary. The Committee assists the Board of Directors in fulfilling its responsibilities to shareholders, investors, and relevant regulatory and supervisory authorities. Its primary responsibilities include identifying, evaluating, and recommending highly qualified candidates for appointment to the Board of Directors and the position of Chief Executive Officer. In addition, the Committee provides advice, recommendations, and relevant information to support succession planning for the Board of Directors and the Chief Executive Officer, thereby contributing to the Bank’s long-term institutional stability and sustainable development.