PASHA BANK ANNUAL REPOT 2024

SECTION THREE EXPLANATIONS ON ACCOUNTING POLICIES I. BASIS OF PRESENTATION The unconsolidated financial statements are prepared in accordance with the “Regulation on the Principles and Procedures Regarding Banks’ Accounting Applications and Safeguarding of Documents” The unconsolidated financial statements are prepared within the scope of the “Regulation on Accounting Applications for Banks and Safeguarding of Documents” related with Banking Act numbered 5411 published in the Official Gazette no.26333 dated 1 November 2006 and in accordance with the regulations, communiqués, interpretations and legislations related to accounting and financial reporting principles published by the Banking Regulation and Supervision Agency (“BRSA”), and in case where a specific regulation is not made by BRSA, “Turkish Accounting Standards” (“TAS”) and “Turkish Financial Reporting Standards” (“TFRS”) and related appendices and interpretations put into effect by Public Oversight Accounting and Auditing Standards Authority (“POA”). The format and content of the publicly announced unconsolidated financial statements and notes to these statements have been prepared in accordance with the “Communiqué on Publicly Announced Financial Statements, Explanations and Notes to These Financial Statements” and “Communiqué On Disclosures About Risk Management To Be Announced To Public By Banks” and amendments to this Communiqué. The Bank maintains its books in Turkish Lira in accordance with the Banking Act, Turkish Commercial Code and Turkish Tax Legislation. The unconsolidated financial statements have been prepared in TL, under the historical cost convention except for the financial assets and liabilities carried at fair value. With its announcement dated 23 November 2023, the POA declared that entities applying Turkish Financial Reporting Standards must prepare their financial statements for annual reporting periods ending on or after 31 December 2023 in accordance with the Financial Reporting in Hyperinflationary Economies Standard (“TAS 29”). However, it was also stated that regulatory and supervisory authorities specific to certain sectors may determine different transition dates for the implementation of TAS 29. In response to POA’s announcement, the BRSA, with its decision numbered 10744 dated 12 December 2023, resolved that banks as well as financial leasing, factoring, financing, savings financing, and asset management companies shall not apply the inflation adjustment required by TAS 29 in their financial statements dated 31 December 2023. Subsequently, with its decision numbered 10825 dated 11 January 2024, the BRSA decided that such entities would adopt inflation accounting starting from 1 January 2025. However, with a further decision numbered 11021 dated 5 December 2024, the BRSA announced that inflation accounting would not be applied in the year 2025. Accordingly, the Bank did not apply inflation accounting under TAS 29 in its financial statements for the period ended 31 December 2024. Accounting policies and valuation principles used in the preparation of the financial statements The accounting policies and valuation principles applied in the preparation of unconsolidated financial statements, are determined and applied in accordance with regulations, communiqués, explanations and circulars on accounting and financial reporting principles published by the BRSA, and in case where there is no special regulation made by the BRSA, in accordance with principles in the context of TAS and TFRS, are consistent with the accounting policies applied in prior period. Aforementioned accounting policies and valuation principles are explained in below. 142 PASHA Yatırım Bankası A.Ş. (Amounts are expressed in thousands of Turkish Lira (“TL”) unless otherwise stated.) (Convenience translation of publicly announced financial statements originally issued in Turkish) Notes to the Unconsolidated Financial Statements As of and for the Year Ended 31 December 2024 PASHA Bank 2024 Annual Report