PASHA BANK ENG 20

With respect to the principle numbered 2.1.2; information about the real persons who own more than 5% of the issued capital is not published on the corporate web page. With respect to the principle numbered 3.3.1.; there is no official succession plan for the key posts. However, ongoing effort has been made to develop an official succession plan for the key posts and it is aimed to complete actions taken over the course of 2021 With respect to the principle numbered 3.3.8.; there is no union organization among the Bank’s employees and the Bank does not have an action plan for such arrangement in this regards. With respect to the principle numbered 4.2.8.; The limit of the directors’ and officers’ liability insurance does not exceed 25% of the paid-up capital of the Bank, and no explanation has been made in this regard at the PDP. With respect to the principle numbered 4.3.9.; There is not yet a target rate and target time determined for the ratio of female members in the Board of Directors. As of reporting date there are two female members in the Bank’s Board of Directors, nevertheless three female members have been standing until August 12, 2020. With respect to the principle numbered 4.5.3.; an independent board member has chaired the Human Resources and Remuneration Committee until August 12, 2020, but as a result of the resignation of the relevant member on this date, no independent member has been elected to chair the Committee. On the other hand, the role of chair of the committees other than the Human Resources and Remuneration Committee have been conducted by independent non-executive directors. With respect to the principle numbered 4.5.5.; Assignment to the Board of Directors’ committees is carried out in line with the relevant legislation, taking into consideration the accumulated knowledge and experience of the members of the Board of Directors and some members of the Board of Directors are assigned to more than one committee. However, members assigned to more than one committee ensure communication between committees involved in related issues and increase cooperation opportunities. With respect to the principle numbered 4.6.5.; The remuneration and other benefits provided to the Board Members and senior executive directors are disclosed to the public through the annual report. However, the payments made are disclosed to the public on a collective basis in parallel to market practice, rather than an individual basis. Explanations about the activities of the Committee in charge of audit and the outcome of its meetings are included under the section “Information On Management and Corporate Governance Practices” of the Annual Report and functioning and effectiveness of the internal systems organization are included under the heading “Audit Committee’s Assessments on the Operation of Internal Systems” of the Annual Report. RESPONSIBILITIES OF THE BOARD OF DIRECTORS AND THEIR ACTIVITIES IN THE REPORTING PERIOD Board of Directors’ Activities in 2020 Board of Directors defines the Bank’s strategies, related business goals and risk limits for three-year periods based on Strategy and Budget Committee’s suggestions. In 2020, the Board of Directors discussed and resolved the issues on related with the activities summarized below: “The responsibilities assigned to the Board of Directors within the framework of the provisions of the Communiqué on Internal Systems and Internal Capital Adequacy Assessment Process of Banks, risk management and credit policies and methodologies, improvements on the internal credit risk rating model, updates on the risk appetite limits, Risk Appetite Statement and related Operational Limits, new and updated policies and regulations of the Bank, independent audit reports in accordance with BRSA regulations and International Financial Reporting Standards, loan allocation, financial restructuring and procurement requests under the authority of the Board of Directors, the Bank’s strategy plan for the period of 2021-2023, the budget for the next fiscal year and its monthly financial performance, domestic issuance conditions for debt instruments, asset finance fund establishments, corporate governance practices, changes in the Bank’s organizational structure, distribution of duties in the Board of Directors and its Committees, top management appointments, promotion and personal benefits of Bank’s employees, authority levels of employees who will be granted signature authorities or changes Corporate Governance Compliance Report and Information Form 68 Annual Report 2020 PASHA Bank Information on Management and Corporate Governance Practices