Haci Ömer Sabanci : Convenience Translation Into English Of Condensed Consolidated Financial Statements For The Interim Period 1 January - 30 December 2022

HACI ÖMER SABANCI HOLDİNG A.Ş.

CONVENIENCE TRANSLATION INTO ENGLISH OF CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2022 TOGETHER WITH INDEPENDENT AUDITOR'S REPORT

(ORIGINALLY ISSUED IN TURKISH)

CONVENIENCE TRANSLATION INTO ENGLISH OF

INDEPENDENT AUDITOR'S REPORT

ORIGINALLY ISSUED IN TURKISH

INDEPENDENT AUDITOR'S REPORT

To the General Assembly of Hacı Ömer Sabancı Holding A.Ş.

1. Audit of the consolidated financial statements

1. Our opinion

We have audited the accompanying consolidated financial statements of Hacı Ömer Sabancı Holding A.Ş. (the "Company") and its subsidiaries (collectively referred to as the "Group") which comprise the consolidated balance sheet as at 31 December 2022, the consolidated statement of profit or loss, the consolidated statement of other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended and notes to the consolidated financial statements comprising a summary of significant accounting policies.

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Group as at 31 December 2022, and its financial performance and its cash flows for the year then ended in accordance with Turkish Financial Reporting Standards ("TFRS").

2. Basis for opinion

Our audit was conducted in accordance with the Standards on Independent Auditing (the "SIA") that are part of Turkish Standards on Auditing issued by the Public Oversight Accounting and Auditing Standards Authority (the "POA"). Our responsibilities under these standards are further described in the "Auditor's Responsibilities for the Audit of the Consolidated Financial Statements" section of our report. We hereby declare that we are independent of the Group in accordance with the Ethical Rules for Independent Auditors (including Independence Standards) (the "Ethical Rules") and the ethical requirements regarding independent audit in regulations issued by POA that are relevant to our audit of the financial statements. We have also fulfilled our other ethical responsibilities in accordance with the Ethical Rules and regulations. We believe that the audit evidence we have obtained during the independent audit provides a sufficient and appropriate basis for our opinion.

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T: [phone], F: [phone], www.pwc.com.tr

Mersis Numaramız: 0-1460-0224-0500015

3. Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. Key audit matters were addressed in the context of our independent audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key Audit Matters	How the key audit matter was addressed in
	the audit
Impairment of receivables from finance
sector operations in accordance with TFRS 9
(Note 33)
The Group has total provision for impairment of	Within our audit procedures, we assessed policies
TRY 22 billion with respect to receivables from	and procedures together with the overall
finance sector operations of TRY 629 billion which	governance established by the Group with respect to
represent a significant portion of the Group's total	classification of loans and lease receivables and
assets in its consolidated financial statements as at	estimation of impairment in line with the TFRS 9.
31 December 2022.	We have tested the design and operating
	effectiveness of controls implemented by the Group
TFRS 9 is a complex accounting standard which	in line with its governance, policies and procedures.
requires considerable judgement and interpretation.
These judgements are key in the development of the	Together with our modelling specialists, we have
financial models built to measure the expected	evaluated and tested the methodologies used in
credit losses on loans recorded at amortized cost. In	building impairment models in line with the
addition, the operation of the models requires large	requirement of TFRS 9 and the Group's policies for
data inputs that are generated through more than	the significant portfolio of loans. We have tested
one system and the accuracy and completeness of	model calculations through re-performance
the data are key in the determination of expected	together with our modelling specialists on a sample
credit losses on loans. Impairment allowances are	basis. We have independently assessed together
calculated on a collective basis for portfolios of	with our related specialists methodologies used in
receivables from finance sector operations of a	the models in respect to segmentation, use of
similar nature and on individual basis for significant	macroeconomic expectations, life time expected
loans taking into account Management's best	credit losses, losses given default.
estimate at the balance sheet date and historical
losses incurred. The uncertainties arising from these
impacts have been evaluated by the management in
their judgements and estimations.

Our audit was focused on this area due to existence of complex estimates and information used in the impairment assessment such as developing macroeconomic scenarios and their weightings, historical loss experiences; the significance of the loan balances; the appropriateness of classification of loans and lease receivables as per their credit risk (staging) in accordance with applicable regulation and the importance of determination of the associated impairment allowances. Timely and correctly identification of state default and the level of judgements and estimations made by the management have significant impacts on the amount of impairment provisions for loans. Therefore, this area is considered as a key audit matter.

We have carried loan review on a selected sample of receivables from finance sector operations with the objective to identify whether the classification of loans is performed appropriately in accordance with the applicable regulation, whether the loss event had occurred and whether the provision for impairment has been recognized in a timely manner within the TFRS 9 framework.

In addition, for non-performing receivables from finance sector operations and other significant loans that are subject to individual assessment based on the Group policies, we have evaluated the appropriateness of specific impairment provision with supportable input. Based on our discussions with the Group management, we have evaluated and challenged whether the key assumptions and other judgements, underlying the estimation of impairment were reasonable.

We have reviewed the appropriateness and sufficiency of disclosures made in the financial statements of the Group with respect to receivables from finance sector operations and related impairment provision.

Key Audit Matters	How the key audit matter was addressed in
	the audit
Valuation of Pension Fund Obligations
(Note 2.3.20)
The Group has accounted for provision amounting	Within our audit we tested on a sample basis the
to TRY 935 million for Pension Fund Liabilities in	accuracy of the employee data supplied by the
the accompanying consolidated financial statements	Group management to the external consulting firm
as at 31 December 2022.	for the purpose of evaluation pension obligation. In
	addition, we have verified the existence and values
The Group's Personnel Pension Fund Foundation	of the Pension Fund assets.
("Pension Fund") is established in accordance with
the Social Security Law numbered 506 article No 20	Through use of actuarial specialists, we assessed the
and is within the scope of Funds to be transferred to	reasonableness of assumptions and evaluation
the Social Security Institution (SSI). The President	made by the external actuaries in the calculation of
of the Republic of Turkey is authorized to determine	the liability.
the transfer date. The total obligation of the fund is
estimated using separate methods and assumption	In addition to the above procedures, we evaluated
for benefits to be transferred and for non-	the adequacy of the disclosures made with respect
transferrable benefits. The valuations of the pension	to Pension Fund in the accompanying consolidated
obligations require significant judgement and	financial statements.
technical expertise in choosing appropriate
assumptions. The Group's management uses
external actuarial consulting firm for the purpose of
valuations of pension obligations. The reason we
focused on this area during our audit is; uncertainty
of the transfer date, the importance of the actuarial
and economic assumptions such as technical
interest rate determined by the law, salary
increases, demographic assumptions used in the
valuation of pension obligations with respect to
social benefits and the significant impact that may
arise from the possible change in the assumptions
used in the evaluation of pension fund liabilities.