Selçuk Ecza Deposu Ticaret ve Sanayi : 31.12.2022 Consolidated Financial Statements Audited

SELÇUK ECZA DEPOSU TİCARET VE SANAYİ A.Ş.

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 01.01.-31.12.2022 TOGETHER WITH NOTES

(Translated into English from the report originally issued in Turkish)

(CONVENIENCE TRANSLATION OF INDEPENDENT AUDITOR'S REPORT

ORIGINALLY ISSUED IN TURKISH)

INDEPENDENT AUDITOR'S REPORT

To the Board of Directors

Selçuk Ecza Deposu Ticaret ve Sanayi A.Ş.

A. Audit of the Consolidated Financial Statements

Opinion

We have audited the consolidated financial statements of Selçuk Ecza Deposu Ticaret ve Sanayi A.Ş. ("the Company") and its subsidiaries ("the Group"), which comprise the consolidated statement of financial position as at December 31, 2022, and the consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

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

Basis for Opinion

We conducted our audit in accordance with standards on auditing issued by the Capital Markets Board of Turkey and the Auditing Standards published by the Public Oversight Accounting and Auditing Standards Authority. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the Code of Ethics published by the Public Oversight Accounting and Auditing Standards Authority. We have fulfilled our other ethical responsibilities in accordance with the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

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. These matters were addressed in the context of our 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 Matter is Handled
Recoverability of trade receivables	We performed the following procedures in
	relation to recoverability of trade receivables:
As of 31.12.2022, trade receivables amounting
to TL 13.985.649.117 consist of 64,76% of its	- Guarantees received, credit limits, sales and
total assets of the Group.	collection processes regarding the Group's trade
	receivables has been evaluated.
Trade receivables consist of lots customers with
low balances. The Group Management constitute	- Guarantees received of trade receivables and
credit limits for each customer and receives	content of guarantees received were checked with
various guarantees for these limits.	sampling method.
Impairment for trade receivables are recognised	- The aging of the trade receivables were audited,
in accordance with TFRS 9 Financial	and it was inquired with the management whether
Instruments Standard as a result of estimates	the litigation process has started for the overdue
made by taking into account the guarantees	and non performing receivables.
received from customers, past collection
performance of customers, current sectoral and	- Subsequent collections tests carried out with
economic situation and aging analysis of	sampling method.
receivables balances. The outcome of such
estimates is very sensitive to changes in market	- Compliance with the policy of the provisions on
conditions.	a sampling basis was tested in order to evaluate
	the suitability of the lawsuits filed by the Group
Due to the estimations required in the	for overdue, non-performing receivables and the
recoverability evaluation of trade receivables,	provision for impairment calculated and allocated
the issue of existence and collectibility of trade	for these by obtaining a litigation report from the
receivables is considered as a key audit matter.	Group's legal advisors.
The accounting policies of the Group regarding	- The appropriateness of the bad debt estimates of
the accounting of trade receivables and the	the group management has been evaluated.
significant accounting evaluations, estimates,
assumptions and amounts are stated in Note 2.8	- Testing trade receivables balances by obtaining
and Note 6.	confirmation letters from customers with sampling
	method.
	- In addition, we evaluated the adequacy of the
	explanations in the notes of the consolidated
	financial statements regarding the key audit matter
	within the scope of TFRSs.

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with TFRS, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Group's financial reporting process.

Auditor's Responsibilities for the Audit of the Consolidated Financial Statements

In ındependent audit, the responsibilities of us as independent auditors are as follows:

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Auditing Standards published by the Public Oversight Accounting and Auditing Standards Authority will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with the Auditing Standards published by the Public Oversight Accounting and Auditing Standards Authority, we exercise professional judgment and maintain professional skepticism throughout the audit.

We also:

• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion (The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.).
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

Auditor's Responsibilities for the Audit of the Consolidated Financial Statements (continued)

• Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Group to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.