HİTİT BİLGİSAYAR HİZMETLERİ A.Ş.

Quarterly Report • Nov 8, 2024

HİTİT BİLGİSAYAR HİZMETLERİ A. Ş. AND ITS SUBSIDIARY

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE MONTHS PERIOD ENDED 30 SEPTEMBER 2024

(CONVENIENCE TRANSLATION OF THE REPORT AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH)

	CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
	CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
	CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
	NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 3	CASH AND CASH EQUIVALENTS
NOTE 4	SEGMENT REPORTING 12
NOTE 5	RELATED PARTY DISCLOSURES
NOTE 8	PROPERTY, PLANT AND EQUIPMENT
NOTE 9	INTANGIBLE ASSETS…………… 17
NOTE 10	COMMITMENTS…………… 18
NOTE 11	FINANCIAL INSTURMENTS
NOTE 13	SHAREHOLDER'S EQUITY……… 22-23
NOTE 14	REVENUE AND COST OF SALES……… 23-24
NOTE 16	OTHER OPERATING INCOME AND EXPENSES…………………………………………………………… 26
NOTE 17	INCOME FROM FINANCIAL INVESTING ACTIVITIES……………………………………………………………
NOTE 18	FINANCE INCOME AND EXPENSES…………………………………………………………… 27
NOTE 19	OTHER COMPREHENSIVE INCOME ANALYSIS……………………………………………………………
NOTE 21	FINANCIAL INSTRUMENTS (FAIR VALUE DISCLOSURES AND EXPLANATION ON HEDGE
	ACCOUNTING)
NOTE 22	EARNINGS PER SHARE 31

HİTİT BİLGİSAYAR HİZMETLERİ A.Ş. AND ITS SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS OF 30 SEPTEMBER 2024

(All amounts are expressed in Turkish Lira (TL), unless otherwise is stated.)

		Not Audited	Audited
		Current	Prior
ASSETS		Period	Period
		30 September	31 December
CURRENT ASSETS	Notes	2024	2023
Cash and cash equivalents	3	339,618,596	218,438,892
Financial investments	11	119,574,417	246,873,455
Trade receivables	5,6	301,201,251	184,377,893
- Related party trade receivables	5	33,912,112	22,104,526
- Other trade receivables	6	267,289,139	162,273,367
Prepaid expenses	7	110,799,998	60,735,864
Current income tax assets		7,615,944	-
Other current assets	12	32,684,198	31,241,084
Total Current Assets		911,494,404	741,667,188
NON CURRENT ASSETS
Property, plant and equipment	8	133,508,376	151,840,116
Intangible assets	9	1,257,537,542	759,708,182
Prepaid expenses	7	86,239,736	66,180,135
Deferred tax assets		23,687,344	8,618,504
Other non current assets	12	2,108,984	1,801,471
Total Non-Current Assets		1,503,081,982	988,148,408
TOTAL ASSETS		2,414,576,386	1,729,815,596

HİTİT BİLGİSAYAR HİZMETLERİ A.Ş. AND ITS SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS OF 30 SEPTEMBER 2024

(All amounts are expressed in Turkish Lira (TL), unless otherwise is stated.)

		Not Audited	Audited
		Current	Prior
LIABILITIES AND EQUITY		Period	Period
		30 September	31 December
CURRENT LIABILITIES	Notes	2024	2023
Trade payables	6	76,083,415	70,993,281
Bank loans	11	160,145,480	-
Lease liabilities	11	5,339,118	-
Current tax liabilities		5,842,539	5,115,447
Deferred income	7	36,926,326	27,743,826
Employee benefit obligations		20,236,005	22,439,386
Short term provisions		43,414,196	22,238,558
- Short term provision for employee benefits		43,414,196	22,238,558
Other current liabilities	12	2,131,914	3,484,807
Total Current Liabilities		350,118,993	152,015,305
NON CURRENT LIABILITIES
Lease liabilities	11	19,131,815	-
Deferred Income	7	92,900,291	70,038,983
Long-term provisions		13,270,237	10,570,669
- Long term provision for employee benefits		13,270,237	10,570,669
Total Non-Current Liabilities		125,302,343	80,609,652
EQUITY
Share capital	13	127,500,000	127,500,000
Share premiums on capital stock	13	263,039,827	263,039,827
Adjustment to share capital	13	117,442	117,442
Legal reserves	13	25,580,347	12,506,162
Other Accumulated Comprehensive Loss that will
not be subsequently reclassified to profit or loss		1,136,687,526	886,801,753
-Actuarial loss on defined retirement benefit plans,
net of taxes		( 1,900,376)	( 1,900,376)
-Currency translation difference	13	1,138,587,902	888,702,129
Net Profit		192,078,638	132,168,362
Retained earnings		194,151,270	75,057,093
Total Equity		1,939,155,050	1,497,190,639
TOTAL LIABILITIES AND EQUITY		2,414,576,386	1,729,815,596

HİTİT BİLGİSAYAR HİZMETLERİ A.Ş. AND ITS SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE PERIOD 1 JANUARY-30 SEPTEMBER 2024

(All amounts are expressed in Turkish Lira (TL), unless otherwise is stated.)

		Not Audited Current Period	Not Audited Prior Period	Not Audited Current Period	Not Audited Prior Period
		1 January 30 September	1 January 30 September	1 July 30 September	1 July 30 September
	Notes	2024	2023	2024	2023
Revenue	14	781,845,759	423,189,278	303,050,955	175,564,709
Cost of sales (-) Gross profit	14	(428,326,515) 353,519,244	(216,944,633) 206,244,645	(167,294,315) 135,756,640	(91,400,746) 84,163,963
	15
Marketing and sales expenses (-) General administrative expenses (-)	15	(77,686,740) (121,262,766)	(50,104,018) (61,341,887)	(33,482,088) (43,898,435)	(20,464,362) (25,553,449)
Other operating income	16	34,788,599	41,441,335	7,273,578	22,220,077
Other operating expenses (-)	16	(27,264,881)	(36,399,976)	(9,301,822)	(21,664,707)
Operating profit		162,093,456	99,840,099	56,347,873	38,701,522
Income from financial investing activities	17	40,773,835	61,308,430	19,987,641	18,795,387
Profit before finance expense		202,867,291	161,148,529	76,335,514	57,496,909
Finance expenses (-)	18	(19,784,586)	(41,929,430)	(6,956,460)	(11,074,975)
Finance income	18	1,906,611	2,441,292	1,563,499	600,957
Profit before tax		184,989,316	121,660,391	70,942,553	47,022,891
Income tax income		7,089,322	(35,063,361)	(3,231,492)	(7,230,409)
Current tax expense (-)		(5,842,539)	(38,688,451)	(5,842,539)	(7,776,341)
Deferred tax expense (-)		12,931,861	3,625,090	2,611,047	545,932
NET PROFIT FOR THE YEAR		192,078,638	86,597,030	67,711,061	39,792,482
Distribution of Net Profit
Owners of the Company/parent	22	192,078,638	86,597,030	67,711,061	39,792,482
Basic earnings per share		1.5065	0.6792	0.5311	0.3121
OTHER COMPREHENSIVE INCOME / (EXPENSE)
Items that will not be reclassified to profit or loss		249,885,773	420,365,080	72,690,671	75,751,499
Currency translation difference	19	249,885,773	420,365,080	72,690,671	75,751,499
OTHER COMPREHENSIVE INCOME / (EXPENSE)		249,885,773	420,365,080	72,690,671	75,751,499
TOTAL COMPREHENSIVE INCOME		441,964,411	506,962,110	140,401,732	115,543,981

HİTİT BİLGİSAYAR HİZMETLERİ A.Ş. AND ITS SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD ENDED 30 SEPTEMBER 2024

(All amounts are expressed in Turkish Lira (TL), unless otherwise is stated.)

						Other accumulated comprehensive loss that will not be subsequently reclassified to profit or loss
	Note	Share Capital	Share premiums on capital stock	Adjustment to share capital	Legal Reserves	Actuarial Gain / (Loss)	Currency translation difference	Retained earnings	Net Profit for the Period	Total Equity
Balances as of 1 January 2023	13	127,500,000	292,429,353	117,442	2,808,433	(2,462,005)	362,770,478	26,210,031	58,544,791	867,918,523
Transfers		-	-	-	9,697,729	-	-	48,847,062	(58,544,791)	-
Profit for the year		-	-	-	-	-	-	-	86,597,030	86,597,030
Total comprehensive income		-	-	-	-	-	420,365,080	-	-	420,365,080
Due to other changes increase / (decrease) (*)		-	(29,389,526)	-	-	-	-	-	-	(29,389,526)
Balances as of 30 September 2023	13	127,500,000	263,039,827	117,442	12,506,162	( 2,462,005)	783,135,558	75,057,093	86,597,030	1,345,491,107
Balances as of 1 January 2024	13	127,500,000	263,039,827	117,442	12,506,162	(1,900,376)	888,702,129	75,057,093	132,168,362	1,497,190,639
Transfers		-	-	-	13,074,185	-	-	119,094,177	(132,168,362)	-
Profit for the year		-	-	-	-	-	-	-	192,078,638	192,078,638
Total comprehensive income		-	-	-	-	-	249,885,773	-	-	249,885,773
Balances as of 30 September 2024	13	127,500,000	263,039,827	117,442	25,580,347	( 1,900,376)	1,138,587,902	194,151,270	192,078,638	1,939,155,050

(*) Under the special additional taxes stipulated by Article 10, Clause 27 of Law No. 7440, published in the Official Gazette on March 12, 2023; the additional tax amounting to TL 29,389,526, calculated based on the "Issue Premiums" recorded under Equity, which exceeds the portion of the nominal capital in relation to some of the shares issued through capital increase with issue premiums for trading on the Borsa Istanbul (BIST Istanbul) in 2022, has been reported by offsetting it from the "Issue Premiums" account that directly affects the emergence of the tax.

HİTİT BİLGİSAYAR HİZMETLERİ A.Ş. AND ITS SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE PERIOD ENDED 30 SEPTEMBER 2024

(All amounts are expressed in Turkish Lira (TL), unless otherwise is stated.)

		Not Audited	Not Audited
		Current	Prior
		Period	Period
		1 January-	1 January
		30 September	30 September
Cash Flows from Operating Activities	Notes	2024	2023
Profit for the Period		192,078,638	86,597,030
Adjustments related to tax expenses		( 7,089,322)	35,063,361
Adjustments related to provision for employment termination benefits		2,925,953	839,326
Adjustments related to provision for doubtful receivable		69,580	47,327
Adjustments related to provision for unused vacation		18,055,053	6,251,016
Adjustments related to interest income and expense	17, 18	( 20,772,618)	( 458,882)
Adjustments related to unrealized foreign exchange differences		86,062,816	( 6,843,745)
Adjustments related with fair value expense (income) of financial assets	17	( 16,116,933)	( 60,638,415)
Depreciation and amortization of non-current assets	8, 9	143,381,911	67,885,752
Other non-cash adjustments		2,473,702	2,061,219
		401,068,780	130,803,989
Changes in working capital
Adjustments related to increase in trade receivables	5,6	( 118,395,841)	( 79,832,506)
Adjustments related to increase in prepaid expenses	7	( 42,251,775)	( 10,771,832)
Adjustments related to increase in other current / non-current assets	12	( 1,750,627)	( 3,358,761)
Adjustments related to decrease in trade payables	6	5,090,134	3,362,516
Adjustments related to increase / (decrease) in deferred income	7	1,698,146	107,215
Adjustments related to increase / (decrease) in other liabilities		( 6,072,980)	20,820,947
Cash generated from operations		239,385,837	61,131,568
Income taxes paid		( 7,622,585)	( 56,291,934)
Unused vacation paid		( 1,403,364)	( 943,626)
Employment termination benefits paid		( 1,964,852)	( 2,254,934)
Net cash flows from operating activities		228,395,036	1,641,074
Cash flows from investing activities
Cash genereated from disposal of property, plant and equipment	8	-	31,751
Payments for purchases of property, plant and equipment	8	( 70,113,984)	( 25,932,391)
Payments for purchases of intangible assets	9	( 363,854,237)	( 137,159,254)
Interest received		49,086,172	61,666,973
Cash inflows from the sale of shares or debt instruments of other businesses or
funds		-	95,289,622
Other cash inflow		181,193,910	340,053,805
Other cash outflow		( 50,802,410)	( 302,675,950)
Net cash flows from investing activities		( 254,490,549)	31,274,556
Cash flows from financing activities
Proceeds from borrowings		160,000,000	-
Borrowings paid		-	( 23,777,875)
Lease borrowings paid		2,161,558	( 27,716,090)
Interest paid		( 43,031,896)	( 845,768)
Net cash flows from financing activities		119,129,662	( 52,339,733)
INCREASE IN CASH AND CASH EQUIVALENTS		93,034,149	( 19,424,103)
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR	3	218,438,892	57,136,078
Currency translation differences effect on cash and cash equivalents		28,145,555	20,210,908
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR	3	339,618,596	57,922,883

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF 30 SEPTEMBER 2024

(All amounts are expressed in Turkish Lira (TL), unless otherwise is stated.)

1. ORGANISATION AND OPERATIONS OF THE GROUP

Hitit Bilgisayar Hizmetleri A.Ş. ("the Company" or "Hitit Bilgisayar") was established in 1994. The Company's Subsidiary Hitit Saas Turizm Servisleri A.Ş. (collectively the "Group") was established in 2021, HITIT TECH LAB-ISB (SMC-Private) in 2023, Hitit PK Seyahat Acente Dağıtım Sistemleri A.Ş. established in 2024, together referred to as the "Group". The Group's main field of activity is to develop software solutions for airlines, travel companies and airports, carry operations to provide these as a service, to host and to sell.

The registered office of the Company is Reşitpaşa Mah. Katar Cad. No: 4/1 Arı Teknokent 2 – A Blok İç Kapı No: 601 Maslak / Sarıyer / İstanbul.

As of 30 September 2024, personnel number of the Group is 400 (31 December 2023: 390).

The Group's business segments in continuing operations and reporting details in accordance with geographic segments are presented on Note 4.

Subsidiary of Group:

Hitit Saas Turizm Servisleri A.Ş.

The company was established under 100% ownership of Hitit Bilgisayar Hizmetleri A.Ş., in order to sell and widespread the tickets, hotels, car rentals, airport transfers, insurances and other non-ticket travel products, additional services through Hitit Bilgisayar Hizmetleri A.Ş.'s agency network in the global market, registered and announced on 09.11.2021.

HITIT TECH LAB-ISB (SMC-Private) Limited

The software development company HITIT TECH LAB-ISB (SMC-Private) Limited was established at Securities and Exchange Commission of Pakistan - SECP, company's shares representing the capital are fully owned by Hitit Bilgisayar Hizmetleri A.Ş., in order to create value in technology field in Pakistan.

Hitit PK Seyahat Acente Dağıtım Sistemleri A.Ş.

The company "Hitit PK Seyahat Acente Dağıtım Sistemleri A.Ş." was established under the 100% ownership of Hitit Bilgisayar Hizmetleri A.Ş., headquartered in Turkey/Istanbul in order to support agency distribution services in the Pakistan market, promote and marketing Pakistan-based travel content worldwide through Hitit ADS, within this framework, to facilitate the daily activities of Hitit ADS users such as travel agencies, corporate travel and similar. The company was registered and announced at the Istanbul Trade Registry Office as of 5 January 2024.

Approval of consolidated financial statements:

Board of Directors has approved the consolidated financial statements and delegated authority for publishing it on 8 November 2024. General Assembly has the authority to modify the consolidated financial statements.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF 30 SEPTEMBER 2024

(All amounts are expressed in Turkish Lira (TL), unless otherwise is stated.)

2. BASIS OF PRESENTATION OF FINANCIAL STATEMENTS

2.1 Basis of Presentation

Financial reporting standards applied

The consolidated financial statements are prepared in accordance with Communiqué Serial II, No:14.1, "Principles of Financial Reporting in Capital Markets" (the "Communiqué") published in the Official Gazette numbered 28676 on 13 September 2013. According to Article 5 of the Communiqué, the consolidated financial statements are prepared in accordance with the Turkish Financial Reporting Standards ("TFRS") issued by Public Oversight Accounting and Auditing Standards Authority ("POA").

The Group has prepared the condensed financial statements and its notes for the interim period ended 30 September 2024 in accordance with TAS 34 "Interim Financial Reporting". These condensed consolidated interim financial statements do not include all notes of the type normally included in annual financial statements and therefore, these interim financial statements are to be read in conjunction with the annual financial statements for the year ended 31 December 2023.

In addition, the financial statements are presented in accordance with the formats determined in the "Announcement on TFRS Taxonomy" published by the POA on 3 July 2024 and the Financial Statement Examples and User Guide published by the CMB.

Basis of preparation

The consolidated financial statements have been prepared on the historical cost basis except for certain financial instruments that are measured at fair values. Historical cost is generally based on the fair value of the consideration given in exchange for assets.

The consolidated financial statements have been prepared on a going concern basis, with the assumption that the Group will benefit from its assets and fulfill its liabilities in the subsequent year and in the natural process of its business operations.

Functional and Presentation Currency

The functional currency of the Group has been determined as USD Dollar in accordance with Turkish Accounting Standard No. 21 ("TAS 21") "The Effects of Changes in Foreign Exchange Rates", since purchases and sales are mostly based on USD Dollar. The presentation currency of the financial statement is TL.

The Group's client portfolio is mainly consists of foreign clients. Parallel to this, a significant portion of the revenues are in US Dollars. The Group's increasing export volume, its growth strategies on the global platforms and its competitive environment have made the USD (US Dollar) the effective currency in reflecting the basic economic environment in which the Group is positioned. Within this frame, the Group management has determined the functional currency to be USD as of 1 January 2020, as a result of these effects on the economic environment and activities, since USD has also been used in decision-making, budget follow-up and management reporting by the group management.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF 30 SEPTEMBER 2024

(All amounts are expressed in Turkish Lira (TL), unless otherwise is stated.)

2. BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (cont'd)

2.1 Basis of Presentation (cont'd)

Presentation Currency Translation

According to TAS 21 ("The Effects of Changes in Foreign Exchange Rates") financial statements, that are prepared in USD for the Group have been translated in TL as the following method:

• In the consolidated financial statement position dated 30 September 2024, assets and liabilities have been converted into TL with the foreign exchange buying rates announced by The Central Bank of Turkish Republic as of 30 September 2024 which is 34.1210 TL=1 USD.
• Consolidated statement of profit or loss for the period ended 30 September 2024, have been converted into TL with the exchange rates of the nine-month average of January - September 2024 which is 32.2128 TL=1 USD.
• All exchange differences resulting from translation to TL presentation currency are shown in statement of other comprehensive income as of foreign currency translation differences.

Basis of Consolidation

The detail of the Company's subsidiary at 30 September 2024 and 31 December 2023 are as follows:

			Share in equity of the Group (%)
Subsidiaries	Country of incorporation	Currency	30 September 2024	31 December 2023
Hitit Saas Turizm Servisleri A.Ş.	Turkey	US Dollar	100	100
HITIT TECH LAB-ISB (SMC-Private) Limited	Pakistan	US Dollar	100	100
Hitit PK Seyahat Acente Dağıtım Sistemleri A.Ş.	Turkey	US Dollar	100	-

The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company and its subsidiaries. Control is achieved when the Company:

• has power over the investee;
• is exposed, or has rights, to variable returns from its involvement with the investee and
• has the ability to use its power to affect its returns.

The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above.

When the Company has less than a majority of the voting rights of an investee, it has power over the investee when the voting rights are sufficient to give it the practical ability to direct the relevant activities of the investee unilaterally. The Company considers all relevant facts and circumstances in assessing whether or not the Group's voting rights in an investee are sufficient to give it power, including:

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF 30 SEPTEMBER 2024

(All amounts are expressed in Turkish Lira (TL), unless otherwise is stated.)

2. BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (cont'd)

2.1 Basis of Presentation (cont'd)

Basis of Consolidation (cont'd)

• The size of the Company's holding of voting rights relative to the size and dispersion of holdings of the other vote holders;
• Potential voting rights held by the Company or other shareholders;
• Rights arising from other contractual arrangements; and
• Any additional facts and circumstances that indicate that the Company has, or does not have, the current ability to direct the relevant activities at the time that decisions need to be made, including voting patterns at previous shareholders' meetings.

Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company loses control of the subsidiary.

Offsetting

A financial asset or liability can be offset and the net amount shown on the balance sheet only if the entity has a legal right to offset the recognized amounts and intends to settle on a net basis or to realize the asset and settle the liability simultaneously.

2.2 Changes in Accounting Policies

Significant changes in accounting policies are implemented retroactively and financial statements for previous period are restated. There are no significant changes to accounting policies of the Group in the current period.

2.3 Changes and Errors in Accounting Estimates

Changes in accounting estimates are applied only in the period changes were made if they are only related to the current period. Nevertheless, they are applied both in the current period and in the future periods if they are related to multiple periods. Significant accounting errors are corrected retroactively and financial statements for previous periods are restated. There are no significant changes in estimates in the current period.

2.4 New and Revised Turkish Financial Reporting Standards

• a) Standards, amendments, and interpretations applicable as of 30 September 2024:
• Amendment to IAS 1 – Non-current liabilities with covenants; effective from annual periods beginning on or after 1 January 2024. These amendments clarify how conditions with which an entity must comply within twelve months after the reporting period affect the classification of a liability. The amendments also aim to improve information an entity provides related to liabilities subject to these conditions.
• Amendment to IFRS 16 – Leases on sale and leaseback; effective from annual periods beginning on or after 1 January 2024. These amendments include requirements for sale and leaseback transactions in IFRS 16 to explain how an entity accounts for a sale and leaseback after the date of the transaction. Sale and leaseback transactions where some or all the lease payments are variable lease payments that do not depend on an index or rate are most likely to be impacted.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF 30 SEPTEMBER 2024

(All amounts are expressed in Turkish Lira (TL), unless otherwise is stated.)

2. BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (cont'd)

2.4 New and Revised Turkish Financial Reporting Standards (cont'd)

• a) Standards, amendments, and interpretations applicable as of 30 September 2024: (cont'd)
• Amendments to IAS 7 and IFRS 7 on Supplier finance arrangements; effective from annual periods beginning on or after 1 January 2024. These amendments require disclosures to enhance the transparency of supplier finance arrangements and their effects on a company's liabilities, cash flows and exposure to liquidity risk. The disclosure requirements are the IASB's response to investors' concerns that some companies' supplier finance arrangements are not sufficiently visible, hindering investors' analysis.
• IFRS S1, 'General requirements for disclosure of sustainability-related financial information; effective from annual periods beginning on or after 1 January 2024. This standard includes the core framework for the disclosure of material information about sustainabilityrelated risks and opportunities across an entity's value chain.
• IFRS S2, 'Climate-related disclosures'; effective from annual periods beginning on or after 1 January 2024. This is the first thematic standard issued that sets out requirements for entities to disclose information about climate-related risks and opportunities.
• b) Standards, amendments, and interpretations that are issued but not effective as of 30 September 2024:
• IFRS 17, 'Insurance Contracts'; effective from annual periods beginning on or after 1 January 2023. This standard replaces IFRS 4, which permitted a wide variety of practices in accounting for insurance contracts. IFRS 17 will fundamentally change the accounting by all entities that issue insurance contracts.
• Amendments to IAS 21 - Lack of Exchangeability; effective from annual periods beginning on or after 1 January 2025. An entity is impacted by the amendments when it has a transaction or an operation in a foreign currency that is not exchangeable into another currency at a measurement date for a specified purpose. A currency is exchangeable when there is an ability to obtain the other currency (with a normal administrative delay), and the transaction would take place through a market or exchange mechanism that creates enforceable rights and obligations.
• Amendment to IFRS 9 and IFRS 7 - Classification and Measurement of Financial Instruments; effective from annual reporting periods beginning on or after 1 January 2026 ( early adoption is available) These amendments:

• clarify the requirements for the timing of recognition and derecognition of some financial assets and liabilities, with a new exception for some financial liabilities settled through an electronic cash transfer system;

• clarify and add further guidance for assessing whether a financial asset meets the solely payments of principal and interest (SPPI) criterion;

• add new disclosures for certain instruments with contractual terms that can change cash flows (such as some instruments with features linked to the achievement of environment, social and governance (ESG) targets); and

• make updates to the disclosures for equity instruments designated at Fair Value through Other Comprehensive Income (FVOCI).

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF 30 SEPTEMBER 2024

(All amounts are expressed in Turkish Lira (TL), unless otherwise is stated.)

2. BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (cont'd)

2.4 New and Revised Turkish Financial Reporting Standards (cont'd)

• b) Standards, amendments, and interpretations that are issued but not effective as of 30 September 2024: (cont'd)
• IFRS 18 Presentation and Disclosure in Financial Statements; effective from annual periods beginning on or after 1 January 2027. This is the new standard on presentation and disclosure in financial statements, with a focus on updates to the statement of profit or loss. The key new concepts introduced in IFRS 18 relate to:

• the structure of the statement of profit or loss;

• required disclosures in the financial statements for certain profit or loss performance measures that are reported outside an entity's financial statements (that is, management defined performance measures); and

• enhanced principles on aggregation and disaggregation which apply to the primary financial statements and notes in general.

●IFRS 19 Subsidiaries without Public Accountability: Disclosures; effective from annual periods beginning on or after 1 January 2027. Earlier application is permitted. This new standard works alongside other IFRS Accounting Standards. An eligible subsidiary applies the requirements in other IFRS Accounting Standards except for the disclosure requirements and instead applies the reduced disclosure requirements in IFRS 19. IFRS 19's reduced disclosure requirements balance the information needs of the users of eligible subsidiaries' financial statements with cost savings for preparers. IFRS 19 is a voluntary standard for eligible subsidiaries. A subsidiary is eligible if:

• it does not have public accountability; and

• it has an ultimate or intermediate parent that produces consolidated financial statements available for public use that comply with IFRS Accounting Standards.

3. CASH AND CASH EQUIVALENTS

	30 September 2024	31 December 2023
Cash on hand	676,346	634,776
Cash at banks	338,942,250	217,804,116
Demand deposits	36,279,952	16,289,897
Time deposits	302,662,298	201,514,219
	339,618,596	218,438,892

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF 30 SEPTEMBER 2024

(All amounts are expressed in Turkish Lira (TL), unless otherwise is stated.)

3. CASH AND CASH EQUIVALENTS (cont'd)

	Effective Interest
Time Deposits	Rate	Maturity Date	30 September 2024
US Dollar (TL denominated)	0,01%	1.10.2024	64,829,900
TL	47,00%	31.10.2024	63,500,000
TL	49,00%	21.03.2025	50,500,000
TL	49,00%	25.03.2025	43,500,000
TL	49,00%	14.03.2025	18,500,000
TL	50,00%	7.03.2025	17,500,000
TL	49,00%	1.10.2024	15,650,000
EUR (TL denominated)	0,01%	1.10.2024	7,634,280
TL	39,89%	1.10.2024	6,180,000
TL	38,00%	1.10.2024	5,775,000
TL	50,00%	28.02.2025	5,000,000
US Dollar (TL denominated)	2,24%	1.10.2024	3,208,118
TL	31,41%	1.10.2024	750,000
TL	14,96%	1.10.2024	135,000
			302,662,298
	Effective Interest
Time Deposits	Rate	Maturity Date	31 December 2023
US Dollar (TL denominated)	0,01%	2.01.2024	62,703,366
US Dollar (TL denominated)	4,00%	27.06.2024	58,876,400
US Dollar (TL denominated)	4,00%	28.03.2024	58,876,400
US Dollar (TL denominated)	2,5%	2.01.2024	2,821,142
TL	30,00%	2.01.2024	11,785,001
TL	13,00%	2.01.2024	100,000
EUR (TL denominated)	0,01%	2.01.2024	6,351,910
			201,514,219

Explanations about the nature and level of risks related to cash and cash equivalents are provided in Note 20. As of 30 September 2024, the Group do not have any worth of restricted cash (31 December 2023: None).

4. SEGMENT REPORTING

The Group is managed as a single reporting unit that develop software solutions for the travel industry, especially for airlines, tour operators and airports, providing them as a service, additional development, maintenance and operating activities. The Group's Chief Operating Decision Maker is the Board of Directors. The resource utilization decisions are made from single center by considering all service categories as a whole. The objective in making resource utilization decisions is to maximize consolidated financial results, rather than highlight specific regions or categories. All other assets and liabilities have been associated with the Group's only integrated reporting section.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF 30 SEPTEMBER 2024

(All amounts are expressed in Turkish Lira (TL), unless otherwise is stated.)

5. RELATED PARTY DISCLOSURES

The receivables from related parties arise from: development and maintenance services and hosting and database management services, their maturity is 30 days (31 December 2023: 30 days) on average and bear no interest. The payables to related parties arise mainly from consultancy services, their maturity is 30 days on average and bear no interest.

The details of the transactions between the Group and other related parties are as follows.

	Trade Receivables
	Current	Current
Balances with Related Parties	30 September 2024	31 December 2023
Shareholders
Pegasus Hava Taşımacılığı A.Ş.	31,487,784	17,750,663
Others
Amadeus Bilgi Teknolojisi Hizmetleri A.Ş.	2,424,328	4,353,863
	33,912,112	22,104,526

The transactions with related parties for the nine-months periods ended 30 September 2024 and 30 September 2023 are as follows:

	1 January -	1 January -	1 July -	1 July -
	30 September 2024	30 September 2023	30 September 2024	30 September 2023
Transactions with Related Parties	Sales	Sales	Sales	Sales
Pegasus Hava Taşımacılığı A.Ş.	189,204,691	111,278,107	71,120,415	42,461,623
Amadeus Bilgi Teknolojisi Hizmetleri A.Ş.	23,889,009	23,574,684	6,604,108	9,364,302
	213,093,700	134,852,791	77,724,523	51,825,925

Benefits provided to key personnel:

The Executives of the Group consist of members of its board of directors, assistant general managers and directors. The benefits provided to the Executives include salary, bonus, private health insurance, and transportation. The benefits provided to Executives in the period are as follows:

	1 January-	1 January-	1 July-	1 July
	30 September	30 September	30 September	30 September
	2024	2023	2024	2023
Salaries and other short term benefits	27,348,178	15,252,632	10,308,923	6,372,086
Other long term benefits	27,348,178	- 15,252,632	10,308,923	- 6,372,086

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF 30 SEPTEMBER 2024

(All amounts are expressed in Turkish Lira (TL), unless otherwise is stated.)

6. TRADE RECEIVABLES AND PAYABLES

a) Trade Receivables

The details of the Group's trade receivables as of reporting date are as follows:

	30 September	31 December
	2024	2023
Current trade receivables
Trade receivables	253,490,709	151,133,687
Trade receivables from related parties (Note: 5)	33,912,112	22,104,526
Income accruals	24,881,306	20,650,073
Expected credit loss (-)	(11,082,876)	(9,510,393)
	301,201,251	184,377,893

Trade receivables are amounts due from customers for services performed in the ordinary course of business. The average maturity of trade receivables is 84 days (31 December 2023: 80 days) and classified as a current trade receivables.

b) Trade Payables

Details of the Group's trade payables as of the reporting date are as follows:

	30 September	31 December
	2024	2023
Short term trade payables
Trade payables to service providers	66,606,068	62,355,524
Expense accruals	9,477,347	8,637,757
	76,083,415	70,993,281

As of 30 September 2024, average maturity of the Group's trade payables is 46 days (31 December 2023: 57 days).

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF 30 SEPTEMBER 2024

(All amounts are expressed in Turkish Lira (TL), unless otherwise is stated.)

7. PREPAID EXPENSES AND DEFERRED INCOME

	30 September	31 December
	2024	2023
Short-term prepaid expenses
Prepaid loan interest expenses	39,381,352	-
Deferred implementation expenses	33,472,530	25,018,555
Prepaid software support expenses	24,721,100	18,807,385
Prepaid marketing and sales expenses	8,223,309	5,504,456
Prepaid insurance expenses	1,828,681	7,374,943
Order advances given	811,329	2,108,423
Business advances given	696,171	542,840
Other prepaid expenses	1,665,526	1,379,262
	110,799,998	60,735,864
	30 September	31 December
	2024	2023
Long-term prepaid expenses
Deferred implementation expenses	84,225,505	64,807,520
Prepaid software support expenses	2,013,636	1,325,774
Other prepaid expenses	595	46,841
	86,239,736	66,180,135
	30 September	31 December
	2024	2023
Short-term deferred income
Deferred implementation income	35,466,630	26,577,749
Other deferred Income	1,459,696	1,166,077
	36,926,326	27,743,826
	30 September	31 December
	2024	2023
Long-term deferred income
Deferred implementation income	91,489,729	70,032,948
Other deferred Income	1,410,562	6,035
	92,900,291	70,038,983

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF 30 SEPTEMBER 2024

(All amounts are expressed in Turkish Lira (TL), unless otherwise is stated.)

8. PROPERTY, PLANT AND EQUIPMENT

	Furnitures &	Leasehold	Construction in
	Fixtures	improvements	progress	Total
Cost Value
Opening balance as of 1 January 2024	109,892,742	6,990,689	88,577,483	205,460,914
Additions with financial leasing	25,202,628	-	-	25,202,628
Additions	59,144,559	295,746	10,673,679	70,113,984
Transfers	-	-	(107,599,739)	(107,599,739)
Foreign currency translation difference	22,477,385	1,129,544	8,348,577	31,955,506
Closing balance as of 30 September 2024	216,717,314	8,415,979	-	225,133,293
Accumulated Depreciation
Opening balance as of 1 January 2024	(49,276,603)	(4,344,195)	-	(53,620,798)
Charge of the year	(27,017,037)	(809,121)	-	(27,826,158)
Foreign currency translation difference	(9,438,990)	(738,971)	-	(10,177,961)
Closing balance as of 30 September 2024	(85,732,630)	(5,892,287)	-	(91,624,917)
Carrying value as of 30 September 2024	130,984,684	2,523,692	-	133,508,376
	Furnitures &	Leasehold	Construction in
	Fixtures	improvements	progress	Total
Cost Value
Opening balance as of 1 January 2023	43,585,251	3,786,593	43,172,860	90,544,704
Additions	15,526,248	97,003	10,309,140	25,932,391
Disposals	(31,751)	-	-	(31,751)
Foreign currency translation difference	23,879,373	1,780,315	22,466,386	48,126,074
Closing balance as of 30 September 2023	82,959,121	5,663,911	75,948,386	164,571,418
Accumulated Depreciation
Opening balance as of 1 January 2023	(21,192,223)	(2,223,172)	-	(23,415,395)
Charge of the year	(8,388,493)	(467,488)	-	(8,855,981)
Disposals	31,751	-	-	31,751
Foreign currency translation difference	(11,804,608)	(1,141,969)	-	(12,946,577)
Closing balance as of 30 September 2023	(41,353,573)	(3,832,629)	-	(45,186,202)
Carrying value as of 30 September 2023	41,605,548	1,831,282	75,948,386	119,385,216

There are no mortgage on property, plant and equipment (31 December 2023 : None).

Useful lives of property and equipment are as follows:

	Useful Life
Furnitures & Fixtures	4 Years
Leasehold improvements	5 Years
Construction in progress	15 Years

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF 30 SEPTEMBER 2024

(All amounts are expressed in Turkish Lira (TL), unless otherwise is stated.)

9. INTANGIBLE ASSETS

Rights	Developed software	software
			Total
	1,022,069,311	14,389,480	1,143,620,109
	331,006,363	86,587	363,854,237
-	-	107,599,739	107,599,739
	182,190,805	8,668,018	209,845,904
	1,535,266,479	130,743,824	1,824,919,989
	(313,062,010)	(13,049,925)	(383,911,927)
	(95,530,280)	(1,322,013)	(115,555,753)
	(55,458,428)	(2,165,316)	(67,914,767)
	(464,050,718)	(16,537,254)	(567,382,447)
	1,071,215,761	114,206,570	1,257,537,542
	Developed	Purchased
Rights	software	software	Total
	490,101,141	9,046,107	565,338,370
	135,547,184	-	137,159,254
	259,402,223	4,198,549	294,701,685
	885,050,548	13,244,656	997,199,309
	(141,975,313)	(7,629,243)	(175,286,409)
	(48,583,723)	(590,216)	(59,061,522)
	(77,340,207)	(3,680,015)	(95,269,234)
	(267,899,243)	(11,899,474)	(329,617,165)
	617,151,305	1,345,182	667,582,144
	107,161,318 32,761,287 18,987,081 158,909,686 (57,799,992) (18,703,460) (10,291,023) (86,794,475) 72,115,211 66,191,122 1,612,070 31,100,913 98,904,105 (25,681,853) (9,887,583) (14,249,012) (49,818,448) 49,085,657

TL 95,530,280 of depreciation and amortization expense for the current period (30 September 2023: TL 48,583,723 ) has been charged in "Cost of sales," TL 47,851,631 of depreciation and amortization expense for the current period has been charged in "general administrative expenses" (30 September 2023: TL 19,302,029 ).

Useful lives of intangible assets are as follows:

Useful Life
10 Years
3-15 Years
3 Years

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF 30 SEPTEMBER 2024

(All amounts are expressed in Turkish Lira (TL), unless otherwise is stated.)

10. COMMITMENTS

Collaterals-Pledges-Mortgages("CPM")

The details of the CPMs given by the Group as of 30 September 2024 and 31 December 2023 is as follows:

CPMs given by the Group:	30 September 2024		31 December 2023
	TL equivalent	USD	EUR	TL	TL equivalent	USD	EUR	TL
A. Total amounts of CPM given on behalf of its own legal entity	315,147,773	2,788,540	-	220,000,000	81,293,589	2,761,500	-	-
-Collateral	315,147,773	2,788,540	-	220,000,000	81,293,589	2,761,500	-	-
B. Total amounts of CPM given on behalf of subsidiaries that are included in full consolidation	-	-	-	-	-	-	-	-
-Collateral C. Total amounts of CPM given in order	-	-	-	-	-	-	-	-
to guarantee third parties debts for routine trade operations	-	-	-	-	-	-	-	-
-Collateral	-	-	-	-	-	-	-	-
D. Total amounts of other CPM given
i. Total amount of CPM given on behalf of the Parent	-	-	-	-	-	-	-	-
-Collateral	-	-	-	-	-	-	-	-
ii. Total amount of CPM given on behalf of other group companies not covered in B and C	-	-	-	-	-	-	-	-
-Collateral	-	-	-	-	-	-	-	-
iii. Total amount of CPM given on behalf of third parties not covered in C	-	-	-	-	-	-	-	-
-Collateral	-	-	-	-	-	-	-	-
TOTAL	315,147,773	2,788,540	-	220,000,000	81,293,589	2,761,500	-	-

11. FINANCIAL INSTRUMENTS

Financial Investments

The details of the Group's short term financial investments as of 30 September 2024 and 31 December 2023 is as follows:

Short-Term	30 September 2024	31 December 2023
Financial investments measured at amortized cost Exchange rate protected time deposit converted from FX	114,836,716	97,056,921 145,902,431
Venture capital investment fund	- 4,737,701	3,914,103
	119,574,417	246,873,455

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF 30 SEPTEMBER 2024

(All amounts are expressed in Turkish Lira (TL), unless otherwise is stated.)

11. FINANCIAL INSTRUMENTS (cont'd)

Financial Investments (cont'd)

Financial investments at fair value through profit or loss

As of 30 September 2024, the Group do not have any exchange rate protected time deposits. 31 December 2023 is as follows:

	31 December 2023
	Nominal Value	Interest Accrual	Fair Value
Exchange Rate Protected Time Deposit Converted from FX	130,391,500	15,510,931	145,902,431
	130,391,500	15,510,931	145,902,431

The annual interest rates for Exchange rate protected time deposit converted from FX are 30%, 34%, 35% and 36% as of 31 December 2023.

Financial investments measured at amortized cost

Security Issuer	30 September 2024	31 December 2023
TC Hazine Müsteşarlığı	114,836,716	97,056,921
	114,836,716	97,056,921

Financial investments measured at amortized cost have has an active market and market prices (according to dirty prices) are as follows:

Security Issuer	30 September 2024	31 December 2023
TC Hazine Müsteşarlığı	115,001,527	98,500,470
	115,001,527	98,500,470

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF 30 SEPTEMBER 2024

(All amounts are expressed in Turkish Lira (TL), unless otherwise is stated.)

11. FINANCIAL INSTRUMENTS (cont'd)

Financial investments measured at amortized cost (cont'd)

The coupon interest rates and call dates of the financial investments in TL and US Dollars that are measured by their amortized costs and continues as of the reporting date are as follows.

		Coupon Interest Rate
Security Issuer	ISIN Code	(%)	FX Rate	Asset Value	Call Date
TC Hazine Müsteşarlığı	US900123CW86	7,60%	US Dollar	114,836,716 114,836,716	14.11.2024
		Coupon Interest Rate
Security Issuer	ISIN Code	(%)	FX Rate	Asset Value	Call Date
TC Hazine Müsteşarlığı	US900123CW86	7,60%	US Dollar	97,056,921 97,056,921	14.11.2024
Financial Liabilities
			30 September		31 December
				2024	2023
The borrowings
a) Bank Borrowings			160,145,480		-
b) Lease Liabilities			24,470,933		-
			184,616,413		-
The borrowings are repayable as follows:
			30 September		31 December
				2024	2023
To be paid within 1 year			160,145,480		-
			160,145,480		-
a) Bank Loans
		Weighted Average		30 September 2024
Currency Type		Effective Interest Rate	Current		Non-current
TL		26,93%	160,145,480		-
			160,145,480		-

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF 30 SEPTEMBER 2024

(All amounts are expressed in Turkish Lira (TL), unless otherwise is stated.)

11. FINANCIAL INSTRUMENTS (cont'd)

Financial Liabilities (cont'd)

b) Lease Liabilities

As of September 30, 2024, the total lease liabilities in US Dollars amount to TL 24,470,933, with a weighted average interest rate of 5,47% (December 31, 2023: None)

				Present value of minimum
	Minimum lease payments		lease payments
	30 September 2024	31 December 2023	30 September 2024	31 December 2023
Amounts payable under	25,808,988	-	24,470,933	-
Within one year	5,631,057	-	5,339,118	-
In the second to fifth years inclusive	20,177,931	-	19,131,815	-
Less : Future finance charges	(1,338,055)	-	- -	-
Present value of finance lease obligations	24,470,933	-	24,470,933	-
Less: Amounts due to settlement within twelve months (shown under current liabilities)			(5,339,118)	-
			19,131,815	-

12. OTHER ASSETS AND LIABILITIES

	30 September	31 December
	2024	2023
Other current assets
VAT carried forward	30,688,666	28,827,799
Deposits and guarateees given	495,983	307,659
Other current assets	1,499,549	2,105,626
	32,684,198	31,241,084
	30 September	31 December
	2024	2023
Other non current assets
Deposits and guarateees given	2,098,134	1,801,471
Other non current assets	10,850	-
	2,108,984	1,801,471
	30 September	31 December
	2024	2023
Other current liabilities
Advances received	1,339,147	3,125,513
Other current liabilities	792,767	359,294
	2,131,914	3,484,807

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF 30 SEPTEMBER 2024

(All amounts are expressed in Turkish Lira (TL), unless otherwise is stated.)

13. SHAREHOLDER'S EQUITY

Capital

The capital structure as of 30 September 2024 is as follows:

		30 September		31 December
Shareholders	%	2024	%	2023
Pegasus Hava Taşımacılığı A.Ş. (*)	36,82%	46,939,893	36,82%	46,939,893
Fatma Nur Gökman (**)	23,19%	29,572,131	23,19%	29,572,131
Dilek Ovacık	4,71%	6,000,000	4,71%	6,000,000
Hakan Ünlü	4,34%	5,538,462	4,34%	5,538,462
Özkan Dülger	4,34%	5,538,462	4,34%	5,538,462
Publicly Held (***)	26,597%	33,911,052	26,597%	33,911,052
Dilek Ovacık	0,080%	102,186	0,080%	102,186
Hakan Ünlü	0,074%	94,326	0,074%	94,326
Özkan Dülger	0,074%	94,326	0,074%	94,326
Other	26,369%	33,620,214	26,369%	33,620,214
Nominal Capital	100%	127,500,000	100%	127,500,000
Inflation Adjustment		117,442		117,442
Adjusted Capital		127,617,442		127,617,442

(*) Including 786,047 public shares.

(**) Including 495,209 public shares.

(***) Representing shares in circulation.

As of 30 September 2024, the Group's capital consists of 127,500,000 ordinary shares (31 December 2023: 127,500,000 ordinary shares). Nominal value of each share is TL 1 (31 December 2023: TL 1).

Within the framework of the resolution of our Company's Board of Directors dated August 1, 2024, numbered 2024/17, it was decided to increase the Company's issued capital to TL 300,000,000 by adding TL 172,500,000 to the existing issued capital of TL 127,500,000, fully covered by the share premium account as recorded in the financial statements, within the registered capital ceiling of TL 300,000,000. An application was submitted to the Capital Markets Board on August 28, 2024, for the approval of the issuance certificate for shares with a nominal value of TL 172,500,000 and for the approval of an amendment to Article 6, titled "Capital and Types of Shares," of our Company's Articles of Association.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF 30 SEPTEMBER 2024

(All amounts are expressed in Turkish Lira (TL), unless otherwise is stated.)

13. SHAREHOLDER'S EQUITY (cont'd)

Share premiums on capital stock

	30 September 2024	31 December 2023
Share premiums on capital stock	263,039,827	263,039,827
	263,039,827	263,039,827
Restricted profit reserves
	30 September 2024	31 December 2023
Legal reserves	25,580,347	12,506,162
	25,580,347	12,506,162

14. REVENUE AND COST OF SALES

Revenue From Customer Agreements

The Group derives its revenue from the transfer of services over time.

	1 January- 30 September 2024	1 January- 30 September 2023	1 July- 30 September 2024	1 July 30 September 2023
Domestic Sales	300,588,934	122,498,721	113,168,883	45,472,636
Foreign Sales	521,160,653	325,028,428	198,715,653	137,280,865
Discounts and Other Adjustments	(39,903,828)	(24,337,870)	(8,833,581)	(7,188,791)
Revenue	781,845,759	423,189,278	303,050,955	175,564,709
Costs	(428,326,515)	(216,944,633)	(167,294,315)	(91,400,746)
Gross Profit	353,519,244	206,244,645	135,756,640	84,163,963

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF 30 SEPTEMBER 2024

(All amounts are expressed in Turkish Lira (TL), unless otherwise is stated.)

14. REVENUE AND COST OF SALES (cont'd)

Revenue

	1 January- 30 September 2024	1 January- 30 September 2023	1 July- 30 September 2024	1 July 30 September 2023
Application use fee revenue	402,550,476	221,888,480	164,189,391	96,256,048
Application use and development revenue	146,709,880	84,805,911	57,880,175	32,551,087
Infrastructure revenue	112,221,954	41,458,352	40,544,163	16,867,169
Maintenance revenue	63,228,927	50,924,311	22,985,021	20,908,437
Implementation and Integration revenue	43,023,094	18,321,851	13,697,661	7,091,473
License revenue	8,961,698	4,715,476	1,382,876	1,807,915
Other	5,149,730	1,074,897	2,371,668	82,580
	781,845,759	423,189,278	303,050,955	175,564,709

The Group disaggregates revenues into revenues from application use fee revenue, maintenance revenue, additional developments, infrastructure revenue, implementation and integration revenue and other in accordance with TFRS 15 "Revenue from contracts with customers". Besides, the Group recognized over the period, "Implementation and integration revenue" of its disaggregated revenues. Installation revenues are recorded by spreading over the contract periods in line with the agreements made with the customers, and the revenues of the following years are accounted as deferred income.

Cost of Sales

	1 January-	1 January-	1 July-	1 July
	30 September	30 September	30 September	30 September
	2024	2023	2024	2023
Personnel expenses	(159,909,042)	(97,622,548)	(62,124,876)	(39,549,134)
Software support expenses	(135,553,653)	(58,184,595)	(49,277,849)	(25,865,110)
Amortization expenses (Note: 8,9)	(95,530,280)	(48,583,723)	(35,830,431)	(20,738,117)
Travel and accommodation expenses	(14,596,747)	(7,270,454)	(6,032,871)	(3,263,537)
Conference, event and training expenses	(13,118,147)	(1,531,773)	(10,241,728)	(638,286)
Consultancy expenses	(8,507,304)	(2,767,352)	(3,496,754)	(929,237)
Representation expenses	(95,736)	(189,286)	(66,930)	(110,494)
Other	(1,015,606)	(794,902)	(222,876)	(306,831)
	(428,326,515)	(216,944,633)	(167,294,315)	(91,400,746)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF 30 SEPTEMBER 2024

(All amounts are expressed in Turkish Lira (TL), unless otherwise is stated.)

15. GENERAL ADMINISTRATIVE EXPENSES AND MARKETING/ SALES EXPENSES

Marketing and Sales Expenses

	1 January- 30 September 2024	1 January- 30 September 2023	1 July- 30 September 2024	1 July 30 September 2023
Personnel expenses	(33,869,923)	(17,414,149)	(12,602,115)	(7,228,856)
Sales premium expenses	(17,490,197)	(13,788,195)	(7,553,936)	(5,771,585)
Conference, event and training expenses	(9,294,101)	(1,612,623)	(5,983,446)	(1,599,798)
Advertising, marketing and sales expenses	(8,712,596)	(9,413,315)	(3,652,141)	(3,209,389)
Consultancy expenses	(2,831,956)	(3,270,447)	(1,649,746)	(701,066)
Rent expenses (*)	(2,692,958)	(1,133,857)	(1,038,388)	(529,986)
Travel and accomodation expenses	(733,196)	(2,575,717)	(167,438)	(1,052,233)
Other	(2,061,813)	(895,715)	(834,878)	(371,449)
	(77,686,740)	(50,104,018)	(33,482,088)	(20,464,362)

General Administrative Expenses

	1 January-	1 January-	1 July-	1 July
	30 September	30 September	30 September	30 September
	2024	2023	2024	2023
Depreciation and amortization expenses (Note: 8, 9)	(47,851,631)	(19,302,029)	(18,661,004)	(7,952,106)
Personnel expenses	(35,893,982)	(17,797,581)	(13,577,050)	(7,820,754)
Rent expenses (*)	(8,037,158)	(2,871,202)	(283,574)	(989,578)
Consultancy expenses	(7,847,747)	(3,547,785)	(3,977,272)	(1,425,386)
Insurance expenses	(5,981,691)	(3,896,933)	(1,987,117)	(1,517,821)
Office expenses	(3,700,252)	(2,544,255)	(1,505,856)	(944,120)
Conference, event and training expenses	(2,709,419)	(3,000,222)	(1,028,728)	(2,222,514)
Software support expenses	(2,258,890)	(1,266,776)	(867,458)	(478,126)
Taxes and fees expenses	(1,598,818)	(2,322,309)	(591,370)	(352,775)
Representation expenses	(155,652)	(144,552)	(60,706)	(49,447)
Doubtful receivable allowance expense	(69,580)	(47,327)	(24,097)	(19,259)
Other	(5,157,946)	(4,600,916)	(1,334,203)	(1,781,563)
	(121,262,766)	(61,341,887)	(43,898,435)	(25,553,449)

(*) All the durations of lease agreements are less than a year, thus they are not within the scope of IFRS 16.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF 30 SEPTEMBER 2024

(All amounts are expressed in Turkish Lira (TL), unless otherwise is stated.)

16. OTHER OPERATING INCOME AND EXPENSES

For the nine-months period ending 30 September 2024 and 30 September 2023, detail of other operating income is as follows:

Other income from operating activities

	1 January- 30 September 2024	1 January- 2023	1 July- 30 September 30 September 2024	1 July 30 September 2023
Government incentives (*)	16,009,532	9,181,660	3,713,816	2,316,759
Foreign exchange gain	13,500,835	29,707,949	2,971,558	19,289,175
Previous year income	2,753,912	631,346	53,637	66,538
Other	2,524,320	1,920,380	534,567	547,605
	34,788,599	41,441,335	7,273,578	22,220,077

(*) These are the incentive incomes utilized within the scope of the E-Turquality (Stars of informatic).

Other expenses from operating activities

For the nine-months period ending 30 September 2024 and 30 September 2023 detail of other operating expenses is as follows:

	1 January-	1 January-	1 July-	1 July
	30 September	30 September	30 September	30 September
	2024	2023	2024	2023
Foreign exchange loss	(26,685,953)	(36,090,843)	(9,104,319)	(21,586,122)
Other	(578,928)	(309,133)	(197,503)	(78,585)
	(27,264,881)	(36,399,976)	(9,301,822)	(21,664,707)

17. INCOME FROM FINANCIAL INVESTING ACTIVITIES

	1 January- 30 September 2024	1 January- 30 September 2023	1 July- 30 September 2024	1 July 30 September 2023
Interest revenue	24,656,902	670,015	17,398,874	271,300
Fair value gain from financial investment	16,116,933	60,638,415	2,588,767	18,524,087
	40,773,835	61,308,430	19,987,641	18,795,387

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF 30 SEPTEMBER 2024

(All amounts are expressed in Turkish Lira (TL), unless otherwise is stated.)

18. FINANCE INCOME AND EXPENSES

Finance Expenses

	1 January- 30 September 2024	1 January- 30 September 2023	1 July- 30 September 2024	1 July 30 September 2023
Foreign exchange losses	(12,461,651)	(41,471,558)	(321,265)	(10,935,878)
Interest expense on bank loans	(3,884,284)	(211,133)	(3,884,284)	(22,251)
Commission expenses for letter of guarantee	(3,418,809)	(243,327)	(2,742,029)	(113,692)
Other	(19,842)	(3,412)	(8,882)	(3,154)
	(19,784,586)	(41,929,430)	(6,956,460)	(11,074,975)

Finance Income

	1 January- 30 September 2024	1 January- 30 September 2023	1 July- 30 September 2024	1 July 30 September 2023
Foreign exchange gain	1,906,611	2,441,292	1,563,499	600,957
	1,906,611	2,441,292	1,563,499	600,957

19. OTHER COMPREHENSIVE INCOME ANALYSIS

	1 January-	1 January-	1 July-	1 July
	30 September	30 September	30 September	30 September
	2024	2023	2024	2023
Foreign currency translation fund	249,885,773	420,365,080	72,690,671	75,751,499
	249,885,773	420,365,080	72,690,671	75,751,499
Currency Translation Fund	1 January-	1 January-	1 July-	1 July
	30 September	30 September	30 September	30 September
	2024	2023	2024	2023
Balance at the beginning of the period	888,702,129	362,770,478	1,065,897,231	707,384,059
Balance during the period	249,885,773	420,365,080	72,690,671	75,751,499
Balance at the end of the period	1,138,587,902	783,135,558	1,138,587,902	783,135,558

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF 30 SEPTEMBER 2024

(All amounts are expressed in Turkish Lira (TL), unless otherwise is stated.)

20. NATURE AND LEVEL OF RISKS DERIVING FROM FINANCIAL INSTRUMENTS

a) Capital risk management

The Group manages its capital to ensure that entities in the Group will be able to continue as going concerns while maximizing the return to stakeholders through the optimization of the debt and equity balance.

The Group, in order to maintain or reorganize capital structure, can issue new shares and sell assets to decrease borrowing. The Group monitors capital on the basis of the net debt / equity ratio. This ratio is found by dividing net debt to total capital.

As of 30 September 2024 and 31 December 2023, the group monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt divided by total capital. Net debt is calculated as total borrowings less cash and cash equivalents and short-term financial investments is as follows:

	1 January- 30 September 2024	1 January 31 December 2023
Financial Liabilities (Note: 11)	184,616,413	-
Less: Cash and Cash equivalents and Financial Investments	(459,193,013)	(465,312,347)
Net Debt	(274,576,600)	(465,312,347)
Total Equity	1,939,155,050	1,497,190,639
Total Shareholder's Equity (Note: 13)	127,500,000	127,500,000
	(2.15)	(3.65)

b) Financial Risk Factors

The main risks arising from the Group's financial instruments can be identified as credit risk. The Group management reviews and agrees policies for managing each of these risks. The Group also monitors the market price risk arising from all financial instruments.

b.1)Foreign currency risk management

The Group has determined the functional currency as US Dollars in accordance with TAS 21 "Effects of Changes in Exchange Rates", since purchases and sales are mostly based on US Dollars. The impact of foreign currency changes on the financial performance of the Goup decreases resulted from that the purchases and sales and respective trade receivables and trade payables are based on US Dollars.

Transactions denominated in foreign currencies result in foreign currency risk. The carrying amounts of the Group's foreign currency denominated monetary assets and monetary liabilities at the reporting period are as follows:

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF 30 SEPTEMBER 2024

(All amounts are expressed in Turkish Lira (TL), unless otherwise is stated.)

20. NATURE AND LEVEL OF RISKS DERIVING FROM FINANCIAL INSTRUMENTS (con't)

b) Financial Risk Factors (cont'd)

b.1) Foreign currency risk management (cont'd)

			Total
30 September 2024	TL	EURO	TL Equivalent
Bank deposits	232,327,094	245,274	241,689,546
Financial investments	4,737,701	-	4,737,701
Trade receivables	30,253,810	1,282,919	79,224,624
Bank borrowings	(160,000,000)	-	(160,000,000)
Trade and other payables	(33,522,267)	(185,247)	(40,593,404)
Other	18,050,314	490,881	36,787,929
Net foreign currency position	91,846,652	1,833,827	161,846,396
			Total
31 December 2023	TL	EURO	TL Equivalent
Bank deposits	14,578,201	426,948	28,485,562
Financial investments (*)	149,816,534	-	149,816,534
Trade receivables	24,798,252	587,484	43,934,897
Trade and other payables	(15,603,253)	(131,246)	(19,878,447)
Other	(15,303,362)	217,462	(8,219,777)
Net foreign currency position	158,286,372	1,100,648	194,138,769

(*) Financial invesments consist of TL 145,902,431 portion in USD and EUR indexed Exchange rate protected time deposit converted from FX account.

Foreign currency sensitivity analysis

The Group is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to TL and EUR.

The following table details the Group's sensitivity to a 10% appreciation and depreciation in TL and EUR against TL. 10% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management's assessment of the possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 10% change in foreign currency rates. The sensitivity analysis includes external loans as well as loans to foreign operations within the Group where the denomination of the loan is in a currency other than the currency of the lender or the borrower. A positive number below indicates an increase in profit/loss or equity.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF 30 SEPTEMBER 2024

(All amounts are expressed in Turkish Lira (TL), unless otherwise is stated.)

20. NATURE AND LEVEL OF RISKS DERIVING FROM FINANCIAL INSTRUMENTS (con't)

b) Financial risk factors (cont'd)

b.1) Foreign currency risk management (cont'd)

Currency risk sensitivity

	Income/Loss		Equity
	Foreign exchange	Foreign exchange	Foreign exchange	Foreign exchange
	appreciation	depreciation	appreciation	depreciation
10% change in TL exchange rate accross USD
1 - TL Net asset/(liability) position	7,738,136	(6,331,202)	-	-
2- TL Hedge amount (-)	-	-	-	-
3- TL net efffect (1 +2)	7,738,136	(6,331,202)	-	-
10% change in EUR exchange rate accross USD
4 - EUR Net asset/(liability) position	6,434,341	(5,264,461)	-	-
5- EUR Hedge amount (-)	-	-	-	-
6- EUR net effect (4+5)	6,434,341	(5,264,461)	-	-
TOTAL (3 + 6)	14,172,477	(11,595,663)	-	-
	31 December 2023
	Income/Loss		Equity
	Foreign exchange	Foreign exchange	Foreign exchange	Foreign exchange
	appreciation	depreciation	appreciation	depreciation
10% change in TL exchange rate accross USD
1 - TL Net asset/(liability) position	18,934,534	(15,491,892)	-	-
2- TL Hedge amount (-)	-	-	-	-
3- TL net efffect (1 +2)	18,934,534	(15,491,892)	-	-
10% change in EUR exchange rate accross USD
4 - EUR Net asset/(liability) position	3,401,569	(2,783,102)	-	-
5- EUR Hedge amount (-)	-	-	-	-
6- EUR net effect (4+5)	3,401,569	(2,783,102)	-	-
TOTAL (3 + 6)	22,336,103	(18,274,994)	-	-

30 September 2024

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF 30 SEPTEMBER 2024

(All amounts are expressed in Turkish Lira (TL), unless otherwise is stated.)

21. FINANCIAL INSTRUMENTS (FAIR VALUE DISCLOSURES AND EXPLANATION ON HEDGE ACCOUNTING)

30 September 2024	Financial assets at amortized cost	Financial liabilities at amortized cost	Carrying value	Note
Financial assets
Cash and cash equivalents	339,618,596	-	339,618,596	3
Financial investments	119,574,417	-	119,574,417	11
Trade receivables (including related parties)	301,201,251	-	301,201,251	6
Financial liabilities
Bank loans	-	160,145,480	160,145,480	11
Trade payables (including related parties)	-	76,083,415	76,083,415	6
Lease liabilities	-	24,470,933	24,470,933	11
	Financial assets	Financial liabilities
31 December 2023	at amortized cost	at amortized cost	Carrying value	Note
Financial assets
Cash and cash equivalents	218,438,892	-	218,438,892	3
Financial investments	246,873,455	-	246,873,455	11
Trade receivables (including related parties)	184,377,893	-	184,377,893	6
Financial liabilities
Trade payables (including related parties)	-	70,993,281	70,993,281	6

22. EARNINGS PER SHARE

	1 January-	1 January-	1 July-	1 July
	30 September	30 September	30 September	30 September
Earnings per share	2024	2023	2024	2023
Weighted average number of ordinary shares outstanding
during the period (in full)	127,500,000	127,500,000	127,500,000	127,500,000
Net profit for the period attributable to the parent company's shareholders	192,078,638	86,597,030	67,711,061	39,792,482
Diluted earnings per share	1.5065	0.6792	0.5311	0.3121

23. EVENTS AFTER REPORTING PERIOD

None identified.