Compliance Opinions

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INDEPENDENT AUDITOR’S REPORT ON THE ANNUAL REPORT OF THE BOARD OF DIRECTORS

Türkiye Vakıflar Bankası T.A.O. General Assembly

1) Qualified Opinion

We have audited the annual report of Türkiye Vakıflar Bankası T.A.O. (the ‘’Bank’’) and its subsidiaries (collectively referred to as the “Group’’) for the period of 1 January 2021 – 31 December 2021.

In our opinion, except for the point mentioned in the section of the Basis for Qualified Opinion, the consolidated and unconsolidated financial information provided in the annual report of the Board of Directors and the discussions made by the Board of Directors on the situation of the Group are presented fairly and consistent, in all material respects, with the audited full set consolidated and unconsolidated financial statements and the information we obtained during the audit.

2) Basis for Qualified Opinion

As we reported in our auditor’s opinion dated February 14, 2022, on the Bank’s and the Group’s financial statements for the accounting period of January 1 - December 31, 2021, the financial statements of the Bank and the Group, prepared as of December 31, 2021, include a free provision of TL 1,772,000 Thousand (TL 700,000 Thousand was allocated in the past years and TL 1,072,000 Thousand in the current period), which does not meet the accounting criteria of TAS 37 “Provisions, Contingent Liabilities and Contingent Assets,” was allocated by the Bank’s management due to the possible effects of negative developments that may occur in the economy and markets.

We conducted our independent audit in accordance with ‘’Regulation on Independent Audit of Banks’’ published in the Official Gazette no. 29314 dated 2 April 2015 published by BRSA (“BRSA Audit Regulation”) and Independent Auditing Standards (“IAS”) which are part of the Turkish Auditing Standards as issued by the Public Oversight Accounting and Auditing Standards Authority of Turkey (“POA”). Our responsibilities under these Standards are detailed in the “Independent Auditor’s Responsibilities for the Independent Audit of the Financial Statements” section of our report. We declare that we are independent of the Bank by the Code of Ethics for Independent Auditors (“Code of Ethics”) issued by POA and ethical provisions stated in the regulation of independent auditing of 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 is sufficient and appropriate to provide a basis for our qualified opinion.

3) Auditor’s Opinion for the Full Set Consolidated and Unconsolidated Financial Statements

We expressed a qualified opinion on the Group’s and Bank’s complete set of consolidated and unconsolidated financial statements for the reporting period January 1, 2021 - December 31, 2021, in our audit report dated February 14, 2022.

4) The Responsibility of the Board of Directors on the Annual Report

In accordance with Articles 514 and 516 of the Turkish Commercial Code 6102 ("TCC") and communique on ‘Principles and procedures set out by the regulations on preparation and issuance of annual reports of Banks’, the management of the Group is responsible for the following items:

  • To prepare the annual report within the first three months following the balance sheet date and submit it to the general assembly;
  • To prepare the annual report to reflect the Group’s operations in that year and the consolidated financial position in a true, complete, straightforward, fair, and proper manner in all respects. In this report, the financial position is assessed according to the consolidated and unconsolidated financial statements. Also in the report, developments and possible risks that the Group may encounter are indicated. The assessments of the Board of Directors in regards to these matters are also included in the report.
  • The annual report also includes the following matters:
  • Subsequent events occurred within the Group after the end of the fiscal year which have significance,
  • The research and development activities of the Group,
  • Compensation including salaries and bonuses paid to Board Members and Senior Managers; and other benefits such as allowances, travel, accommodation and representation expenses, cash and in-kind benefits, insurance, and similar assurances.
  • Other matters prescribed in the communique on “Principles and procedures set out by the regulations on preparation and issuance of annual reports of Banks” published in official gazette no.26333 dated November 1, 2006.

When preparing the annual report, the Board of Directors also considers the secondary legislation regulations issued by the Ministry of Trade and related institutions.

5) Responsibilities of the Independent Auditor on the Independent Audit of the Annual Report

Our aim is to express an opinion, based on the independent audit we have performed on the annual report in accordance with provisions of the Turkish Commercial Code and the “Regulation on the Procedures and Principles for the Preparation and Publication of the Annual Reports by Banks” published in official gazette no.26333 dated November 1, 2006, ‘’Regulation on Accounting Applications for Banks Safeguarding of Documents’’ published in the Official Gazette no.26333 dated 1 November 2006 and other regulations on accounting records of Banks published by Banking Regulation and Supervision Agency (“BRSA”), circulars, interpretations published by BRSA and ‘’BRSA Accounting and Financial Reporting Legislation’’ which includes the provisions of Turkish Financial Reporting Standards (“TFRS”) for the matters which are not regulated by these regulations, on whether the consolidated and unconsolidated financial information provided in this annual report and the discussions of the Board of Directors are presented fairly and consistent with the Group’s audited consolidated and unconsolidated financial statements and to prepare a report including our opinion.

The independent audit we have performed is conducted in accordance with IAS and BRSA Independent Audit Regulation. These standards require compliance with ethical provisions and the independent audit to be planned and performed to obtain reasonable assurance on whether the consolidated and unconsolidated financial information provided in the annual report and the discussions of the Board of Directors are free from material misstatement and consistent with the consolidated and unconsolidated financial statements.

The name of the engagement partner who supervised and concluded this audit is Damla Harman.

Güney Bağımsız Denetim ve Serbest Muhasebeci Mali Müşavirlik Anonim Şirketi

A member firm of Ernst & Young Global Limited

Damla Harman, Certified Public Accountant

Partner

March 2, 2022

Istanbul, Turkey