PASHA_BANK_ANNUAL REPORT 2022

XXI. EXPLANATIONS ON GOVERNMENT INCENTIVES 142 XXII. EXPLANATIONS ON PROFIT RESERVES AND PROFIT DISTRIBUTION 142 XXIII. EXPLANATIONS ON EARNINGS PER SHARE 142 XXIV. EXPLANATIONS ON CASH AND CASH EQUIVALENTS 143 XXV. EXPLANATIONS ON SEGMENT REPORTING 143 XXVI. RECLASSIFICATIONS 143 XXVII. EXPLANATIONS ON OTHER MATTERS 143 SECTION FOUR INFORMATION RELATED TO UNCONSOLIDATED FINANCIAL POSITION AND RISK MANAGEMENT I. INFORMATION ABOUT SHAREHOLDERS’ EQUITY ITEMS 143 II. EXPLANATIONS ON CREDIT RISK 149 III. EXPLANATIONS ON CURRENCY RISK 165 IV. EXPLANATIONS ON INTEREST RATE RISK 167 V. EXPLANATIONS ON EQUITY POSITION RISK 172 VI. EXPLANATIONS ON LIQUIDTY RISK and LIQUIDITY COVERAGE RATIO 172 VII. EXPLANATIONS ON LEVERAGE RATIO 182 VIII. EXPLANATIONS ON THE RISK MANAGEMENT 183 IX. EXPLANATIONS ON THE PRESENTATION OF FINANCIAL ASSETS AND LIABILITIES AT THEIR FAIR VALUES 205 X. EXPLANATIONS ON THE ACTIVITIES CARRIED OUT ON BEHALF AND ACCOUNT OF OTHER PERSONS 208 XI. EXPLANATIONS ON OPERATING SEGMENTS 208 SECTION FIVE EXPLANATIONS AND NOTES RELATED TO UNCONSOLIDATED FINANCIAL STATEMENTS I. EXPLANATIONS AND NOTES RELATED TO ASSETS 209 II. EXPLANATIONS AND NOTES RELATED TO LIABILITIES 225 III. EXPLANATIONS AND NOTES RELATED TO OFF-BALANCE SHEET ACCOUNTS 230 IV. EXPLANATIONS AND NOTES RELATED TO INCOME STATEMENT 233 VI. EXPLANATIONS AND NOTES RELATED TO STATEMENT OF CASH FLOWS 239 VII . EXPLANATIONS AND NOTES RELATED TO THE BANK’S RISK GROUP 240 VIII. EXPLANATIONS AND NOTES RELATED TO THE DOMESTIC, FOREIGN, OFF-SHORE BRANCHES AND FOREIGN REPRESENTATIVES OF THE BANK 243 SECTION SIX OTHER EXPLANATIONS AND NOTES I. OTHER EXPLANATIONS RELATED TO OPERATIONS OF THE BANK 243 SECTION SEVEN EXPLANATIONS ON INDEPENDENT AUDITOR’S INTERIM REPORT I. EXPLANATIONS ON INDEPENDENT AUDITOR’S INTERIM REPORT 244 II. EXPLANATIONS AND NOTES PREPARED BY INDEPENDENT AUDITOR 244 General Information Financial Information and Risk Management Review Information on Management and Corporate Governance Principles 117 PASHA Bank 2022 Annual Report