CONVENIENCE TRANSLATION INTO ENGLISH OF INDEPENDENT AUDITOR’S REPORT ON THE BOARD OF DIRECTORS’ ANNUAL REPORT ORIGINALLY ISSUED IN TURKISH
To the General Assembly of Ziraat Katılım Bankası A.Ş.
Qualified Opinion
We have audited the annual report of Ziraat Katılım Bankası A.Ş. (“the Bank”) for the period between 1 January 2019 and 31 December 2019, since we have audited the complete set financial statements for this period.
In our opinion, except for the effects of the matter described in the Basis For Qualified Opinion section of Independent Auditor’s Reports dated 20 February 2020 the consolidated financial information included in the annual report and the analysis of the Board of Directors by using the information included in the audited consolidated financial statements regarding the position of the Bank are consistent, in all material respects, with the audited complete set of consolidated financial statements and information obtained during the audit and provides a fair presentation.
Basis for Qualified Opinion
As described in the Basis For Qualified Opinion section of Independent Auditor’s Report on the complete set of audited financial statements of the Bank for the period between 1 January 2019 and 31 December 2019 dated 20 February 2020; the complete set of consolidated financial statements of the Bank as at 31 December 2019 include a general provision of total of TL 80.000 thousand, of which TL 30.000 thousand had been recognized as expense in prior period, and TL 50.000 thousand was recognized as expense in current period, which is provided by the Bank management for the possible effects of the negative circumstances which may arise in the economy or market conditions.
We conducted our audit in accordance with “Regulation on Independent Audit of the Banks” published in the Official Gazette No.29314 dated 2 April 2015 by Banking Regulation and Supervision Agency (“BRSA Auditing Regulation”) and Standards on Auditing which is a component of the Turkish Auditing Standards published by the Public Oversight Accounting and Auditing Standards Authority (“POA”) (“Standards on Auditing issued by POA”). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Annual Report section of our report. We declare that we are independent of the Bank in accordance with the Code of Ethics for Auditors issued by POA (POA’s Code of Ethics) and the ethical requirements in the regulations issued by POA that are relevant to audit of financial statements, and we have fulfilled our other ethical responsibilities in accordance with the POA’s Code of Ethics and regulations. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion.
Auditor’s Opinion on Complete Set of Consolidated Financial Statements
We have expressed a qualified opinion on the complete set of consolidated financial statements of the Bank for the period between 1 January 2019 and 31 December 2019 on 20 February 2020.
Board of Directors’ Responsibility for the Annual Report
In accordance with the Articles 514 and 516 of the Turkish Commercial Code numbered 6102 (“TCC”) and Regulation on the Principles and Procedures Concerning the Preparation of and Publishing Annual Reports by the Bank (“Regulation”) published in the Official Gazette dated 1 November 2006 and Numbered 26333, the Bank’s management is responsible for the following regarding the annual report:
a) The Bank’s management prepares its annual report within the first three months following the date of statement of financial position and submits it to the general assembly.
b) The Bank’s management prepares its annual report in such a way that it reflects the operations of the year and the consolidated financial position of the Bank accurately, completely, directly, true and fairly in all respects. In this report, the financial position is assessed in accordance with the Bank’s consolidated financial statements. The annual report shall also clearly indicates the details about the Bank’s development and risks that might be encountered. The assessment of the Board of Directors on these matters is included in the report.
c) The annual report also includes the matters below:
- Significant events occurred in the Company after the reporting period,
- The Bank’s research and development activities.
- Financial benefits such as wages, premiums and bonuses paid to board members and key management personnel, appropriations, travel, accommodation and representation expenses, benefits in cash and kind, insurance and similar guarantees.
When preparing the annual report, the Board of Directors also considers the secondary legislation arrangements issued by the Ministry of Trade and related institutions.
Auditor’s Responsibility for the Audit of the Annual Report
Our objective is to express an opinion on whether the consolidated financial information included in the annual report in accordance with the TCC and the Regulation, and analysis of the Board of Directors by using the information included in the audited consolidated financial statements regarding the position of the Bank are consistent with the audited consolidated financial statements of the Bank and the information obtained during the audit and give a true and fair view and form a report that includes this opinion.
We conducted our audit in accordance with BRSA Auditing Regulation and Standards on Auditing issued by POA. Those standards require compliance with ethical requirements and planning of audit to obtain reasonable assurance on whether the consolidated financial information included in the annual report and analysis of the Board of Directors by using the information included in the audited consolidated financial statements regarding the position of the Bank are consistent with the consolidated financial statements and the information obtained during the audit and provides a fair presentation.
20 February 2020
İstanbul, Turkey
