PASHA_BANK ANNUAL REPORT 2021

General Information Financial Information and Risk Management Review Information on Management and Corporate Governance Principles The duties and members of the committees are determined by the Board and announced to the public on the PASHA Bank corporate website as well as in its Annual Report. Information on the committees set up under the Board of Directors is provided below. The Board Committees have carried out activities effectively and in full conformity with laws, and documented and kept the records of all activities they conducted in the fiscal period. Audit Committee The Audit Committee was established to supervise on behalf of the Board of Directors the effectiveness and adequacy of the internal systems of the Bank; the operation of these systems, and the accounting and reporting systems within the framework of the Law and related regulations, and the reliability and integrity of the information produced; to establish the audit and control process that will guarantee ICAAP’s adequacy and accuracy; to make the necessary preliminary evaluations in the selection by the Board of Directors of independent auditing firms and rating, appraisal and support service organizations; to monitor regularly the activities of the institutions selected and contracted by the Board; to ensure the pursuance and coordination of the internal audit activities in a consolidated manner of the subsidiaries subject to consolidation pursuant to the regulations that come into force on the basis of law; and to fulfil the duties specified within the Banking and Capital Markets legislation. The present structure of the Audit Committee is given below: Name‑Surname Committee Position Furkan Evranos * Chairperson Kamala Nuriyeva Member * Furkan Evranos was appointed as the Chairperson of Audit Committee replacing Ebru Oğan Knottnerus in accordance with the Board Resolution dated 25 May 2021. The Audit Committee convenes as required by business needs, and at least quarterly. Board of Directors’ Evaluation of Committee Effectiveness The structure, duties, powers and responsibilities of the Audit Committee have been determined in accordance with the provisions of the Regulation on Internal Systems and the Internal Capital Adequacy Assessment Process of Banks that were published in the Official Gazette No. 29057 dated 11 July 2014 and other relevant legislation, and laid out in writing by the Audit Committee Regulation. The working principles of the Audit Committee are posted on the corporate website. The Audit Committee presented the results of its activities within their responsibilities and its evaluation of activities of units under internal systems to the Board of Directors within the activity report prepared for the period of six months. In 2021, the Audit Committee held 14 meetings with full attendance and passed a total of 32 decisions either in meetings or on the basis of file reviews. The meetings were held to discuss and decide on the risk assessment report prepared by the Internal Audit Unit and annual audit plan prepared based thereupon, internal audit reports within the scope of the audit plan; validation and review reports for the ICAAP report dated 31 December 2020; internal audit, technical adequacy, risk analysis and annual review reports for support services providers; annual assessment reports for appraisal firms; designation of the independent audit firm and the services to be procured, the activities and independence of the independent auditor; independently audited financial reports that have been drawn up in accordance with the BRSA regulations and IFRS; management declaration studies; action plans in response to the findings from the penetration tests and information systems audit report; intra‑group transactions report; changes in internal regulations for the units under Internal Systems. Evaluations Regarding the Activities of the Board of Directors and the Committees