Sphera Franchise S A : Auditor Report H2 2021 - art. 108 Law 24/2017 (R)

To:

%856$'(9$/25,%8&85(н7,6$

$8725,7$7($'(6835$9(*+(5(),1$1&,$5Ă

CURRENT REPORT 04/2022

According to Law no. 24/2017 regarding issuers of financial instruments and market operations, ASF Regulation no. 5/2018 regarding the issuers of financial instruments and market operations and/or Rulebook of the Bucharest Stock Exchange Market Operator.

Date of report	31.01.2022
Name of the Company	Sphera Franchise Group SA
Registered Office	Bucharest, Romania
Address	Calea 'RUREDQ܊LORUQUnd floor, Bucharest sector 1
Phone / Fax	[phone] / [phone]
Email	[e-mail]
Registration nr. with Trade Registry	J40/7126/2017
Fiscal Code	RO 37586457
Subscribed and paid share capital	581,990,100 RON
Total number of shares	38,799,340
Symbol	SFG
Market where securities are traded	Bucharest Stock Exchange, Main Segment, Premium
	Category

Important events to be reported:Publication of the Auditor Report regarding transactions in 2nd semester of 2021 reported according to art. 108 from Law no. 24/2017

The management of Sphera Franchise Group SA WKH ³Company´ informs the investors about the availability of the Independent Limited Assurance Report on the information included in the current reports issued by the Company in accordance with the requirements of Law 24/2017, with all subsequent changes and clarifications, and with the provisions of the ASF Regulation no. 5/2018, prepared by the Ernst & Young Assurance Services SRL.

The report covers the second semester of 2021, and it is attached to this current report.

CHIEF EXECUTIVE OFFICER	CHIEF FINANCIAL OFFICER
Calin Ionescu	Valentin Budes

Ernst & Young Assurance Services SRL	Tel: [phone]
Bucharest Tower Center Building, 21st Floor	Fax: [phone]
15-17 Ion Mihalache Blvd., District 1	[e-mail]
011171 Bucharest, Romania	ey.com

Independent Li mi ted Assurance Report on the i nformati on i ncl uded in the current reports i ssued by the Company i n accordance wi th requi rements of Law 24 / 2017, wi th all subsequent changes and cl ari fi cations, and wi th the provi sions FSA Regul ation no. 5 / 2018

To the Board of Directors of the Sphera Franchi se Group S. A .

Purpose of the report

We were engaged by the Sphera Franchise Group SA (herei nafter " the Company") to report based on the requi rements of Law 24/ 2017 for issuers of fi nanci al i nstruments and market operati ons, wi th all subsequent changes and cl ari fications (herei nafter referred to as " Law 24/ 2017" ) on the i nformation i ncluded i n the attached current reports (dated 23 September 2021, 5 November 2021 and 25 January 2022) (herei nafter '' Reporti ng Schedul es'') that have been prepared by the Company i n accordance wi th the requi rements of Law 24 / 2017 and with the provisions of Regulation no. 5 / 2018 of Fi nanci al Supervisory Authori ty (" FSA " ) reported to Fi nancial Supervisory Authori ty (" FSA ") and to Bucharest Stock Exchange (" BVB") for the period 1 Jul y 2021 - 31 December 2021 i n the form of a li mi ted assurance conclusion.

Speci fi c Purpose

Our report is i ntended sol el y for the purpose speci fied i n the fi rst paragraph above and for the Company, BVB and FSA i nformati on and will not be used for any other purpose. Our report must not be considered appropri ate for use by any other party willing to rel y on our work, other than the Company for any purpose and i n any context.

Any party other than the Company who obtai ns access to our report or a copy of i t and chooses to rel y on i t (or part of i t) will do so taki ng thei r own responsibility. We performed our engagement to be abl e to report those matters that we must report i n a li mi ted assurance report, and not for any other purposes. The current report refers onl y to the Reporti ng Schedul es and should not be associ ated wi th the Company's fi nanci al statements or other reports of the Company, i ndi viduall y or taken as a whol e .

Responsi bili ti es of the Management of the Company

The Company's management is responsibl e for the preparation of the Reporti ng Schedul es and performi ng the transactions reported i n accordance wi th the requi rements of the Law 24 / 2017 and of FSA Regul ation no. 5 /2018 , wi th subsequent changes and cl ari ficati ons. In particul ar, the Company's management is responsibl e for i nternal controls bei ng designed, i mpl emented and mai ntai ned to prevent the preparation of the Reporti ng Schedul es from bei ng materi all y misstated, due to fraud or error.

In addi tion, the Company's management is responsibl e for ensuri ng that the supporti ng documents underl yi ng the preparation of the current Reporti ng Schedul es, as well as the evidence provided to the audi tor is compl ete, accurate and j usti fi ed.

The English version of the li mi ted assurance report on the information included in the c urrent reports issued by the Company in accordanc e wi th requi rements of Law 24/20 1 7 and Regul ati on no. 5 /20 18 represents a transla tion of the original li mited assurance report issued in Romanian

l anguage.

Page 2

Audi tor' s Responsi bili ti es

We conducted our li mi ted assurance engagement i n accordance wi th International Assurance Standards, particularl y ISAE 3000 (revised) "International Standard on Assurance Engagements Other than Audi ts or Reviews of Historic al Financial Information" . These standards requi re that we compl y wi th ethi cal standards and pl an and perform our assurance engagement to obtai n li mi ted assurance about the Reporti ng Schedul es.

We appl y International Standard on Quali ty Control 1 (ISQC 1), and accordi ngl y, we mai ntai n a robust system of quali ty control , i ncl udi ng polici es and procedures documenti ng compli ance wi th rel evant ethical and professional standards and requi rements from the applicabl e l aws or regul ations.

We compl y wi th the i ndependence and other ethical requi rements of the International Code of Ethics for Professional Accountants (i ncludi ng Internati onal Independence Standards) as issued by the

International Ethics Standards Board for Accountants (" IESBA Code"), which establishes the fundamental pri ncipl es of i ntegri ty, obj ectivi ty, professional competence and due care, confidenti ali ty and professional behavior.

The procedures sel ected depend on the audi tor's j udgment and our understandi ng of the transactions i ncluded i n the Reporti ng Schedul es and of other ci rcumstances of the engagement, as well as our consideration of areas where materi al misstatements may occur. In obtai ni ng an understandi ng of the reported transactions i ncl uded i n the Reporti ng Schedul es, we considered the process applied by the Company to concl ude the transactions and to prepare and present the Reporti ng Schedul es i n accordance wi th the requi rements of Law 24 / 2017 and FSA Regul ation no. 5 / 2018 i n order to design audi t procedures that are appropri ate i n these ci rcumstances, but not for the purpose of expressi ng an opi ni on on the effecti veness of the Company's i nternal control rel ated to concl udi ng the reported transactions or preparation and presentation of the attached Reporti ng Schedul es.

The procedures i nclude, i n particul ar, i nqui ry of the personnel responsibl e for financial reporting and risk management and addi tional procedures ai med at obtai ni ng evidence about the i nformation

i ncluded i n the Reporti ng Schedul es.

The nature, ti mi ng and extent of procedures performed i n a li mi ted assurance engagement is li mi ted compared wi th that necessary in a reasonabl e assurance engagement. Consequentl y, the l evel of assurance obtai ned i n a limi ted assurance engagement is considerabl y lower as compared to the one obtai ned i n a reasonabl e assurance engagement.

In respect of the Reporti ng Schedul es of the Company, i n order to assess correctness and j usti fication of the transactions reported, we have performed the foll owi ng procedures:

1. We have obtai ned the attached Reporti ng Schedul es from the Company for the current period and the detail of the transactions i ncluded i n these Reporti ng Schedul es.
2. We observed i f the approvi ng persons of the Reporti ng Schedul es are the authorised representati ves of the Company and we have requested the authori zed signatures schedul e.

The English version of the li mi ted assurance report on the information included in the c urrent reports issued by the Company in accordanc e wi th requi rements of Law 24/20 1 7 and FSA Regul ation no. 5/2 018 represents a translation of the or iginal limi ted assurance report issued i n Romanian l anguage.

Page 3

1. For the transactions i ncl uded i n the Reporti ng Schedules, we have considered i f the details
   i ncluded of the Reporti ng Schedul es are consistent, in all materi al respects, with i nformation as per signed contracts/contractual documentation presented to us and that the presented documents have been signed by representati ves of the Company that are i ndicated i n the authori zed signature schedul e provided to us. As applicabl e, i n performi ng our procedures we have compared i nformation i ncluded i n the Reporti ng Schedul es to the contract / contractual documentation for consistency of details on: the parti es which signed the supporti ng documentation; the date when documentation was signed and i ts nature; the description of the type of goods/services as i ndicated i n the documentation; the actual or esti mated total val ue of the contract / contractual documentation, and, as applicabl e , the guarantees constituted and the stipul ated penal ti es, the terms and the method of payment; as well as the rel ated contractual condi ti ons.
2. For the reported transacti ons we have compared details disclosed i n the attached Reporti ng Schedul es for consistency wi th the i nformation obtai ned by us based on the i nqui ri es made to the management and other responsibl e personnel wi thi n the Company and based on other documents attached to the contracts, as applicabl e .
3. For the reported transacti ons, to the extent that there is a market price avail abl e for the goods deli vered or services rendered between the Company and i ts rel ated parti es, we have discussed wi th the Company's management the basis for the price determi nation and considered i f, to the extent applicabl e , the prices agreed are consistent wi th those applied i n the contracts signed wi th thi rd (other) parti es, where si mil ar goods or services could be provided, and i f the related contracts are approved by the Board of Di rectors or Supervisory Board.

To the extent that no market prices are avail abl e, we have anal yzed i f the respecti ve transactions have been performed based on the Company's i nternal procedures for price determination and i f the rel ated contracts are approved by the Board of Di rectors or Supervisory Board of the Company i n accordance wi th i ts i nternal procedures.

Our procedures have been performed, as described above, onl y on the transacti ons i ncluded i n the attached Reporti ng Schedules, that are referri ng to the peri od 1 Jul y 2 02 1 - 3 1 December 2 02 1 . We have not performed any procedures to veri fy whether the Reporti ng Schedul es i ncl ude all the transactions that the Company has to report accordi ng to Law 24 / 2017 for the current period.

Conclusi on

We formed our concl usion on the basis and considering the matters presented i n the current li mi ted assurance report. Based on the procedures performed as described above and evidence obtai ned, nothi ng has come to our attenti on that causes us to beli eve that:

1. The i nformation i ncl uded i n the Reporti ng Schedul es attached is not, i n all materi al respects, i n accordance wi th the documents provided to us by the Company.
2. The details i ncl uded i n the attached Reporti ng Schedul es are not, i n all materi al respects, consistent wi th the requi rements of Law 24/ 2017 and FSA Regul ation no. 5/ 2018 regardi ng the parti es which signed the supporti ng documentation; the date when documentation was signed and i ts nature; the description of the type of goods/services as i ndicated i n the documentation; the actual or esti mated total val ue of the contract / agreement documentation, and, as applicabl e , the guarantees consti tuted and the stipul ated penal ti es, the terms and the method of payment; as well as the rel ated contractual condi tions.

The English version of the li mi ted assurance report on the information included in the c urrent reports issued by the Company in accordanc e wi th requi rements of Law 24/20 1 7 and FSA Regul ation no. 5/2 018 represents a translation of the or iginal limi ted assurance report issued i n Romanian l anguage.

Page 4

1. The contracts rel ated to the reported transactions were not properl y authori zed by representati ves of the Company and were not approved by the Board of Di rectors or Supervisory Board in li ne wi th the Company's i nternal procedures.
2. The prices have not been established by mutual agreement between the parti es i n accordance wi th the type of goods/services and also by consideri ng other terms and condi tions
   menti oned, as applicabl e, i n the agreements between the parti es and, respecti vel y, were not determined i n accordance wi th the cri teri a mentioned at poi nt 5) from the list of procedures detail ed above.

On behal f of,

Ernst & Young Assurance Servi ces SRL

Ali na Di mitri u

Partner

28 January 2022

Bucharest, Romani a

Attachment

1. Reporti ng Schedul es

The English version of the li mi ted assurance report on the information included in the c urrent reports issued by the Company in accordanc e wi th requi rements of Law 24/20 1 7 and FSA Regul ation no. 5/2 018 represents a translation of the or iginal limi ted assurance report issued i n Romanian l anguage.