PASHA_BANK ANNUAL REPORT 2021

117 Annual Report 2021 PASHA Bank PAGE Xxi. Explanations on government incentives 141 Xxii. Explanations on profit reserves and profit distribution 141 Xxiii. Explanations on earnings per share 142 Xxiv. Explanations on related parties 142 Xxv. Explanations on cash and cash equivalents 142 Xxvi. Explanations on segment reporting 142 Xxvii. Reclassifications 142 Xxviii. Explanations on other matters 142 SECTION FOUR INFORMATION RELATED TO UNCONSOLIDATED FINANCIAL POSITION AND RISK MANAGEMENT I. Information about shareholders’ equity items 142 Ii. Explanations on credit risk 146 Iii. Explanations on currency risk 161 Iv. Explanations on interest rate risk 163 V. Explanations on equity position risk 166 Vi. Explanations on liquidty risk and liquidity coverage ratio 166 Vii. Explanations on leverage ratio 174 Viii. Explanations on the risk management 175 Ix. Explanations on the presentation of financial assets and liabilities at their fair values 195 X. Explanations on the activities carried out on behalf and account of other persons 196 Xi. Explanations on operating segments 197 SECTION FIVE EXPLANATIONS AND NOTES RELATED TO UNCONSOLIDATED FINANCIAL STATEMENTS I. Explanations and notes related to assets 198 Ii. Explanations and notes related to liabilities 212 Iii. Explanations and notes related to off-balance sheet accounts 216 Iv. Explanations and notes related to income statement 219 V. Explanations and notes related to statement of changes in the shareholders’ equity 222 Vi. Explanations and notes related to statement of cash flows 223 Vii. Explanations and notes related to the bank’s risk group 224 Viii. Explanations and notes related to the domestic, foreign, off-shore branches and foreign representatives of the bank 226 SECTION SIX OTHER EXPLANATIONS AND NOTES I. Other explanations related to operations of the bank 226 Ii. Explanations and notes related to subsequent events 226 SECTION SEVEN EXPLANATIONS ON INDEPENDENT AUDITOR’S REPORT I. Explanations on independent auditor’s report 226 Ii. Explanations and notes prepared by independent auditor 226