PASHA_BANK_ANNUAL REPORT 2022

59 PASHA Bank 2022 Annual Report General Information Information on Management and Corporate Governance Principles Financial Information and Risk Management Review The Committee conducts its operations in accordance with the Risk Management Committee Regulation came into force on 23 September 2016 and was last updated on 2 December 2022. Meetings are held at least once in each quarter and as frequent as required by the business needs. Board of Directors’ Evaluation of Committee Effectiveness The Risk Management Committee presented the results of its activities and its assessment of internal systems in quarterly activity reports. The Committee reviewed and challenged the formulation of the Risk Appetite Statement, in order to assure that it is effective in setting appropriate boundaries in respect of each Principal Risk Type and presented the calculation methodology of related criteria and their suggestions of changes in Operational Limits to the Board of Directors. It tracked a broad range of risk metrics that are reported to the Risk Management Committee periodically. During the fiscal period, Risk Management Committee held 11 meetings to discuss and evaluate the policies and procedures for risk management process, ICAAP road map, scenarios and reports, monthly risk management reports prepared by the Risk Management Department, 2022 Risk Appetite Statement and operational limits, any breaches of the identified limits, credit authority limits within operational limits, limits of financial institutions and their effects on risk appetite, stress test results, internal credit risk rating model monitoring outcomes, quarterly activity reports by the Risk Management Committee, action plan for risk health index executed Group-wide, non-performing loans and provision calculations for them, information security and information technologies risks within the context of operational risks, effects of foreign currency fluctuations on limits defined at risk appetite statement, results of macroeconomic scenario calibration related to expected credit loss and macroeconomic forecasts, possibilities of subordinated credits, mortgage product, impacts of Russia- Ukraine war on PASHA Bank portfolio, impacts of changes in credit scores of international rating agencies on PASHA Bank, individual liability insurance of Board of Directors members and senior management of the Bank for their flaws during their terms of office, default rate calculation method in accordance with IFRS 9, Model Risk Management Framework Project, documents related with business continuity and internal documents updated in accordance with annual review. Meeting Dates Number of Attending Members Type of Meeting 19/01/2022 3 Electronic 17/02/2022 3 Electronic 16/03/2022 3 Electronic 19/04/2022 2 Electronic 20/05/2022 3 Electronic 16/06/2022 2 Electronic 19/07/2022 3 Electronic 13/09/2022 2 Electronic 21/10/2022 2 Physical attendance 17/11/2022 2 Electronic 09/12/2022 3 Electronic