PASHA BANK ENG 20

The Credit Committee, Audit Committee, Corporate Governance Committee, Human Resources and Remuneration Committee, Strategy and Budget Committee, and Risk Management Committee were established under the Board of Directors while fulfilling its duties and responsibilities, to take decisions in their own areas of responsibility in accordance with the powers granted by the Board of Directors, and to carry out the supervision and audit of the Bank’s policies, processes, and practices on behalf of the Board of Directors. 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 Committees of the Board 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 maintenance 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 Ebru Oğan Knottnerus Chairperson Kamala Nuriyeva Member 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 submitted to the Board of Directors the results of the activities under its responsibility and its assessments regarding the activities of the units under internal systems in quarterly activity reports in the first half of the year, and in the six-month activity report issued due to the amended Committee regulations in the second half of the year. In 2020, the Audit Committee held 12 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 2019; 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; fraud risk management program and related regulations; activities of the internal audit department, and the performance management policy for the chairperson and members of the audit committee. Annual Report 2020 PASHA Bank Information on Management and Corporate Governance Practices 49