PASHA BANK ENG 20

Working Principles of Board Committees The Committees act within the powers and duties assigned to them according to the Committee regulations approved by the Board of Directors. Committee members are appointed for three-year terms, but not more than twice consecutively. Committee activities are carried out via working meetings convening members. Provisions of the applicable legislation and the working principles set forth by the Board of Directors apply in determining the meeting schedules for Committees. Where possible, committee meetings are held in alignment with the timing of Board meetings. Where deemed necessary, and provided it is of consultative nature, the executives of the Bank and managers in charge of relevant functions from the controlling shareholders’ organizations may attend the meetings in order to present opinion and information on the agenda items upon the invitation of the Committee. Meetings follow an agenda. The agenda is prepared in a way to cover the tasks assigned by law to the Committees. The agenda shall cover, at a minimum, the following matters: · For the Audit Committee, supervision of the accounting system, disclosure of financial information to the public, functioning and effectiveness of the independent audit and internal systems; · For the Risk Committee, early detection and management of internal and external risks which may jeopardize the Bank’s operations, and review of risk management systems, and operational limits with risk appetite statement; · For the Corporate Governance Committee, monitoring and improvement of compliance with corporate governance principles, supervision of the unit in charge of relations with shareholders and the investor relations function, evaluations on the structure and efficiency of the Board of Directors, and recommendations to the Board of Directors on these matters; · For the HR and Remuneration Committee, recommendations on remuneration principles for Board Members and senior managers by taking into account the Bank’s long-term objectives, and recommendations on establishing benchmarks that may be used for remuneration purposes in association with the performance of the Bank and Board Members Information and documentation regarding the agenda are prepared and shared with the members in a reasonable and timely manner prior to the meeting. Committees may seek the opinions of independent expert persons or entities in order to perform their respective tasks. A quorum must be present for committee meetings to be legally held. Committee decisions are taken with the majority of the members present at the meeting. If votes are equal, the vote of the Committee Chair shall be decisive. Matters discussed and decisions taken in the meeting are written in the minutes of meeting by the secretary and signed by the members. Committees present a quarterly report to the Board of Directors on how they fulfill their responsibilities; and submit to the Board for approval the matters they tackle within the powers assigned to them depending on the nature of such matters. Annual Report 2020 PASHA Bank Information on Management and Corporate Governance Practices 47