PASHA_BANK ANNUAL REPORT 2021

(Amounts are expressed in thousands of Turkish Lira (“TL”) unless otherwise stated.) (Convenience Translation of Publicly Announced Financial Statements Originally Issued in Turkish, See Note I of Section Three) PASHA Yatırım Bank A.Ş. Notes to Unconsolidated Financial Statements At 31 December 2021 General Information Remarks on Financial Information and Risk Management Information on Management and Corporate Governance Practices EXPLANATIONS ON ACCOUNTING POLICIES (Continued) XXIII. EXPLANATIONS ON EARNINGS PER SHARE Earnings per share are calculated by dividing net profit for the year to the weighted average number of shares outstanding during the period concerned. Earnings per share disclosed in the income statement are calculated by dividing net profit for the year to the weighted average capital outstanding during the period concerned. In Turkey, companies can increase their share capital by making a pro-rata distribution of shares (“bonus shares”) to existing shareholders from retained earnings. For the purpose of earnings per share computations, the weighted average number of shares outstanding during the year has been adjusted in respect to bonus shares issued without a corresponding change in resources by giving them a retroactive effect for the year in which they were issued and for each earlier period. Where the number of outstanding shares increase due to distribution of bonus shares after the balance sheet date but before the release of the financial statements, earnings per share computations are performed based on the revised average number of shares. XXIV. EXPLANATIONS ON RELATED PARTIES Parties defined in Article 49 of the Banking Law No.5411, Bank’s senior management and Board Members are deemed as related parties. XXV. EXPLANATIONS ON CASH AND CASH EQUIVALENTS For the purposes of the preparation of statement of cash flows, “Cash” includes cash, effectives, and cash in transit, purchased cheques and demand deposits including balances with the Central Bank; and “Cash equivalents” include interbank money market placements and time deposits at banks with original maturity periods of less than three months. XXVI. EXPLANATIONS ON SEGMENT REPORTING Information on operational fields which are determined in accordance with the Bank’s organizational and internal reporting structure and the requirements of “Turkish Financial Reporting Standards on Segment Reporting” (“TFRS 8”) is disclosed in Section Four. XXVII. RECLASSIFICATIONS In order to be consistent with the presentation of current period financial statements, there are certain reclassifications. XXVIII. EXPLANATIONS ON OTHER MATTERS None. SECTION FOUR INFORMATION RELATED TO UNCONSOLIDATED FINANCIAL POSITION AND RISK MANAGEMENT I. INFORMATION ABOUT SHAREHOLDERS’ EQUITY ITEMS Equity capital amount and capital adequacy standard ratio is calculated in accordance with the “Regulation on Measurement and Assessment of Capital Adequacy Ratios of Banks” and “Regulation on Equities of Banks”. The current period equity amount of the Bank is TL 646,135 (31 December 2020 -TL 584,574) while its capital adequacy standard ratio is 17.39% (31 December 2020 - 26.34%) as of 31 December 2021. The capital adequacy ratio of the Bank is far beyond the minimum rate determined by the related legislation.