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VESTEL ELEKTRONİK SANAYİ VE TİCARET A.Ş.

Annual / Quarterly Financial Statement Aug 23, 2024

5976_rns_2024-08-24_f82945ad-e1a7-4724-8e46-770634224851.pdf

Annual / Quarterly Financial Statement

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CONVENIENCE TRANSLATION INTO ENGLISH OF CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD 1 JANUARY– 30 JUNE 2024 (TOGETHER WITH INDEPENDENT AUDITOR'S LIMITED REVIEW REPORT)

(ORIGINALLY ISSUED IN TURKISH)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD 1 JANUARY – 30 JUNE 2024

CONTENTS PAGE

CONDENSED CONSOLIDATED INTERIM BALANCE SHEETS 1-4
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF PROFIT OR LOSS AND
OTHER COMPREHENSIVE INCOME 5-6
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN
SHAREHOLDERS' EQUITY 7
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS 8-10

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD 1 JANUARY – 30 JUNE 2024

NOTE 1 GROUP'S ORGANISATION AND NATURE OF OPERATIONS 11-12
NOTE 2 BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS 12-21
NOTE 3 INTERESTS IN OTHER ENTITIES 22-24
NOTE 4 SEGMENT REPORTING 25-27
NOTE 5 CASH AND CASH EQUIVALENTS 28
NOTE 6 FINANCIAL LIABILITIES 29-33
NOTE 7 RELATED PARTY DISCLOSURES 34-37
NOTE 8 TRADE RECEIVABLES AND PAYABLES 38
NOTE 9 OTHER RECEIVABLES AND PAYABLES 39
NOTE 10 INVENTORIES 40
NOTE 11 PREPAID EXPENSES 41
NOTE 12 INVESTMENTS RECOGNIZED BY EQUITY PICKUP METHOD 41-42
NOTE 13 PROPERTY, PLANT AND EQUIPMENT 43-45
NOTE 14 RIGHT OF USE ASSETS 46
NOTE 15 INTANGIBLE ASSETS 47
NOTE 16 PROVISIONS, CONTINGENT ASSETS AND LIABILITIES 48-50
NOTE 17 COMMITMENTS 50
NOTE 18 EMPLOYEE BENEFITS 51-52
NOTE 19 OTHER ASSETS AND LIABILITIES 53
NOTE 20 CAPITAL, RESERVES AND OTHER EQUITY ITEMS 53-54
NOTE 21 SALES 55
NOTE 22 OTHER INCOME AND EXPENSES FROM OPERATING ACTIVITIES 55
NOTE 23 FINANCIAL INCOME AND EXPENSES 56
NOTE 24 TAXES ON INCOME (INCLUDING DEFERRED TAX ASSETS AND LIABILITIES)……………………………………………… 56-61
NOTE 25 (LOSS) / EARNINGS PER SHARE 61
NOTE 26 DERIVATIVE INSTRUMENTS 62
NOTE 27 FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT 62-66
NOTE 28 SUBSEQUENT EVENTS 66

CONDENSED CONSOLIDATED INTERIM BALANCE SHEETS AS OF 30 JUNE 2024 AND 31 DECEMBER 2023

(Amounts expressed in thousands of Turkish Lira ("TL") in terms of the purchasing power of TL as of 30 June 2024 unless otherwise stated.)

Reviewed Audited
Notes 30 June 2024 31 December 2023
ASSETS
CURRENT ASSETS
Cash and Cash Equivalents 5 3.678.116 2.862.263
Financial Assets 44.548 44.070
Trade Receivables 20.775.635 22.235.066
Trade Receivables Due from Related Parties 7 771.189 569.466
Trade Receivables Due from Third Parties 8 20.004.446 21.665.600
Other Receivables 2.203.557 2.813.477
Other Receivables Due from Related Parties 7 977.837 1.109.281
Other Receivables Due from Third Parties 9 1.225.720 1.704.196
Derivative Financial Instruments 26 314.848 233.386
Inventories 10 31.427.268 29.326.293
Prepaid Expenses 1.504.595 1.900.847
Prepayments to Third Parties 11 1.504.595 1.900.847
Current Tax Assets 24 9.232 17.311
Other Current Assets 328.802 570.600
Other Current Assets Due from Third Parties 19 328.802 570.600
TOTAL CURRENT ASSETS 60.286.601 60.003.313
NON-CURRENT ASSETS
Financial Assets 298.932 360.804
Associates Accounted by Using the Equity Method 12 6.479.140 7.306.043
Trade Receivables 36 1.024
Trade Receivables Due from Third Parties 8 36 1.024
Other Receivables 34.771.600 35.925.412
Other Receivables Due from Related Parties 7 34.744.005 35.883.368
Other Receivables Due from Third Parties 9 27.595 42.044
Property, Plant and Equipment 13 42.714.820 43.209.822
Right of Use Assets 14 1.836.344 1.535.587
Intangible Assets 15 5.729.893 4.881.850
Prepaid Expenses 3.963.501 2.919.942
Prepayments to Related Parties 7 3.000.060 2.472.378
Prepayments to Third Parties 11 963.441 447.564
TOTAL NON-CURRENT ASSETS 95.794.266 96.140.484
TOTAL ASSETS 156.080.867 156.143.797

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

CONDENSED CONSOLIDATED INTERIM BALANCE SHEETS AS OF 30 JUNE 2024 AND 31 DECEMBER 2023

(Amounts expressed in thousands of Turkish Lira ("TL") in terms of the purchasing power of TL as of 30 June 2024 unless otherwise stated.)

Reviewed Audited
Notes 30 June 2024 31 December 2023
LIABILITIES
CURRENT LIABILITIES
Short Term Borrowings 6 28.864.185 30.014.782
Short Term Borrowings from Third Parties 28.864.185 30.014.782
Bank Loans 6 23.379.273 25.298.651
Lease Liabilities 6 261.983 288.091
Issued Debt Instruments 6 5.222.929 4.428.040
Current Portion of Long Term Borrowings 3.009.950 3.523.331
Current Portion of Long Term Borrowings from
Third Parties 3.009.950 3.523.331
Bank Loans 6 1.223.979 3.523.331
Issued Debt Instruments 6 1.785.971 -
Other Financial Liabilities 718.230 1.571.283
Trade Payables 41.576.157 52.345.835
Trade Payables to Related Parties 7 260.631 140.360
Trade Payables to Third Parties 8 41.315.526 52.205.475
Payables Related to Employee Benefits 18 1.237.651 1.138.144
Other Payables 336.079 17.670
Other Payables to Third Parties 9 336.079 17.670
Derivative Financial Liabilities 26 687.282 781.288
Deferred Revenue 2.121.621 1.338.618
Deferred Revenue from Related Parties - 5.017
Deferred Revenue from Third Parties 9 2.121.621 1.333.601
Current Tax Liabilities 24 28.126 19.544
Current Provisions 3.626.371 3.707.307
Other Current Provisions 16 3.626.371 3.707.307
Other Current Liabilities 1.881.813 3.006.802
Other Current Liabilities to Third Parties 19 1.881.813 3.006.802
TOTAL CURRENT LIABILITIES 84.087.465 97.464.604

CONDENSED CONSOLIDATED INTERIM BALANCE SHEETS AS OF 30 JUNE 2024 AND 31 DECEMBER 2023

(Amounts expressed in thousands of Turkish Lira ("TL") in terms of the purchasing power of TL as of 30 June 2024 unless otherwise stated.)

Reviewed Audited
Notes 30 June 2024 31 December 2023
NON-CURRENT LIABILITIES
Long Term Borrowings 16.998.842 3.158.581
Long Term Borrowings from Third Parties 16.998.842 3.158.581
Bank Loans 6 1.578.492 2.329.389
Lease Liabilities 6 707.317 829.192
Issued Debt Instruments 6 14.713.033 -
Other Financial Liabilities 255.755 320.587
Trade Payables 160.615 222.245
Trade Payables to Third Parties 8 160.615 222.245
Non-current Provisions 2.175.173 2.407.394
Non-current Provisions for Employee Benefits 18 1.707.150 1.971.871
Other Non-current Provisions 16 468.023 435.523
Deferred Tax Liabilities 24 2.570.164 1.587.560
Other Non-current Liabilities 12.802 16.012
Other Non-current Liabilities to Third Parties 12.802 16.012
TOTAL NON-CURRENT LIABILITIES 22.173.351 7.712.379
TOTAL LIABILITIES 106.260.816 105.176.983

CONDENSED CONSOLIDATED INTERIM BALANCE SHEETS AS OF 30 JUNE 2024 AND 31 DECEMBER 2023

(Amounts expressed in thousands of Turkish Lira ("TL") in terms of the purchasing power of TL as of 30 June 2024 unless otherwise stated.)

Reviewed Audited
Notes 30 June 2024 31 December 2023
EQUITY
Equity Attributable to Owners of Parent 43.748.886 44.959.655
Share Capital 20 335.456 335.456
Adjustments to Share Capital 19.434.932 19.434.932
Other Accumulated Comprehensive Income (Loss) that will not be Reclassified to Profit
or Loss 9.605.153 9.674.002
Gains (Losses) on Revaluation and Remeasurement 9.605.153 9.674.002
Revaluation of Property, Plant and Equipment 20 11.221.812 11.277.352
Gains (Losses) on Remeasurement of Defined Benefit Plans (1.616.659) (1.603.350)
Other Accumulated Comprehensive Income (Loss) that will be Reclassified to Profit or
Loss 1.875.182 1.877.346
Exchange Differences on Translation 1.674.790 2.007.579
Gains (Losses) on Hedge 125.464 (206.112)
Gains (Losses) on Cash Flow Hedges 125.464 (206.112)
Gains (Losses) on Revaluation and Reclassification 74.928 75.879
Financial Assets Measured of Fair Value through Other Compressive Income 20 74.928 75.879
Restricted Reserves Appropriated from Profits 1.563.166 1.563.166
Legal Reserves 20 1.563.166 1.563.166
Retained Earnings 12.130.293 10.266.569
Current Period Net Profit Or (Loss) (1.195.296) 1.808.184
Non-controlling Interests 6.071.165 6.007.159
TOTAL EQUITY 49.820.051 50.966.814
TOTAL LIABILITIES AND EQUITY 156.080.867 156.143.797

Condensed consolidated interim financial statements for the period 1 January - 30 June 2024, were approved by the Board of Directors of Vestel Elektronik Sanayi ve Ticaret A.Ş. on 23 August 2024.

VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ CONDENSED CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE INTERIM PERIODS 1 JANUARY- 30 JUNE 2024 AND 2023

(Amounts expressed in thousands of Turkish Lira ("TL") in terms of the purchasing power of TL as of 30 June 2024 unless otherwise stated.)

Reviewed Reviewed
1 January - 1 January - 1 April - 1 April -
30 June 30 June 30 June 30 June
Notes 2024 2023 2024 2023
PROFIT OR LOSS
Revenue 21 60.244.425 66.347.999 31.373.315 35.203.161
Cost of Sales 21 (46.196.474) (53.314.488) (23.958.129) (26.786.772)
GROSS PROFIT 14.047.951 13.033.511 7.415.186 8.416.389
General Administrative Expenses (1.739.664) (1.821.247) (814.631) (769.320)
Marketing Expenses (8.390.837) (8.663.289) (4.063.033) (4.780.530)
Research and Development Expense (1.158.346) (1.315.205) (499.660) (440.535)
Other Income from Operating Activities 22 1.781.870 3.244.504 832.754 2.478.345
Other Expenses from Operating Activities 22 (5.630.670) (11.788.636) (1.853.674) (10.037.101)
(LOSS) / PROFIT FROM OPERATING ACTIVITIES (1.089.696) (7.310.362) 1.016.942 (5.132.752)
Share of Net Profit of Associates Accounted for Using the Equity Method (811.171) (819.574) (613.414) (815.011)
(LOSS) / PROFIT BEFORE FINANCING INCOME (1.900.867) (8.129.936) 403.528 (5.947.763)
Finance Income 23 6.533.888 13.518.226 2.100.823 11.157.670
Finance Costs 23 (10.285.147) (13.330.566) (5.001.668) (10.286.297)
Monetary Gain / (Loss) 5.708.522 5.946.574 1.696.030 2.281.890
PROFIT BEFORE INCOME TAX 56.396 (1.995.702) (801.287) (2.794.500)
Tax (Expense) Income, Continuing Operations (1.002.164) (342.645) (159.729) 676.067
Current Tax Expense 24 (18.371) (372.636) (8.493) (54.257)
Deferred Tax Income / (Loss) 24 (983.793) 29.991 (151.236) 730.324
PROFIT FOR THE PERIOD (945.768) (2.338.347) (961.016) (2.118.433)
Profit / (loss), attributable to
Non-controlling Interests 249.528 184.902 138 3.398
Owners of Parent 25 (1.195.296) (2.523.249) (961.154) (2.121.831)
Earnings per share with a Kr 1 of Par Value (TL) 25 (0,0356) (0,0752) (0,0287) (0,0633)

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ CONDENSED CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE INTERIM PERIODS 1 JANUARY- 30 JUNE 2024 AND 2023

(Amounts expressed in thousands of Turkish Lira ("TL") in terms of the purchasing power of TL as of 30 June 2024 unless otherwise stated.)

Reviewed Reviewed
1 January - 1 January - 1 April - 1 April -
30 June 30 June 30 June 30 June
2024 2023 2024 2023
LOSS FOR THE PERIOD OTHER COMPREHENSIVE INCOME (945.768) (2.338.347) (961.016) (2.118.433)
Other Comprehensive Income that will
not be Reclassified to Profit or Loss (15.082) (230.086) (4.036) (316.764)
Gains (Losses) on Remeasurements of Defined Benefit Plans (20.109) (287.607) (5.382) (395.955)
Taxes Relating to Components of Other Comprehensive Income
that will not be Reclassified to Profit or Loss 5.027 57.521 1.346 79.191
Taxes Relating to Remeasurements of Defined Benefit Plans 5.027 57.521 1.346 79.191
Other Comprehensive Income that will
be Reclassified to Profit or Loss 81.715 936.282 (77.626) 942.670
Foreign Exchange Differences on Translation (332.789) 704.365 (270.967) 880.299
Gains (Losses) on Remeasuring or Reclassification Adjustments on Financial Assets Through
Other Comprehensive Income (1.268) (95.792) (4.069) (21.838)
Other Comprehensive Income (Loss) Related with Cash Flow Hedges 553.940 385.689 261.858 99.803
Gains (Losses) on Cash Flow Hedges 553.940 385.689 261.858 99.803
Taxes Relating to Components of Other Comprehensive Income
that will be Reclassified to Profit or Loss (138.168) (57.980) (64.448) (15.594)
Taxes Relating to Gains (Losses) on Remeasuring or Reclassification Adjustments on Financial
Assets Through Other Comprehensive Income 317 19.158 1.017 4.367
Taxes Relating to Cash Flow Hedges (138.485) (77.138) (65.465) (19.961)
OTHER COMPREHENSIVE INCOME / (EXPENSE) 66.633 706.196 (81.662) 625.906
TOTAL COMPREHENSIVE INCOME / (EXPENSE) (879.135) (1.632.151) (1.042.678) (1.492.527)
Total Comprehensive Income Attributable to
Non-controlling Interests 331.634 222.893 34.842 8.550
Owners of Parent (1.210.769) (1.855.044) (1.077.520) (1.501.077)

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY FOR THE INTERIM PERIODS 1 JANUARY – 30 JUNE 2024 AND 2023

(Amounts expressed in thousands of Turkish Lira ("TL") in terms of the purchasing power of TL as of 30 June 2024 unless otherwise stated.)

Gains (Losses)
Other on Remeasuring Other
Accumulated Financial Assets Accumulated
Increases Gains (Losses) Comprehensive Measured of Comprehensive
(Decreases) on on Remeasure Income (Loss) Gains Reserve Of Fair Value Income (Loss) Restricted
Inflation Revaluation of ment of Gains (Losses) that will not be Exchange (Losses) on Gains or through Other Gains (Losses) on that will be Reserves Prior Years' Current Equity attribut
Issued Adjustments Property, Plant Defined Revaluations and Reclassified to Differences on Cash Flow Losses on Compressive Revaluation and Reclassified to Appropriated Profits or Period Net Retained able to owners of Non-controll
Capital on Capital and Equipment Benefit Plans Remeasurements Profit or Loss Translation Hedges Hedge Income Reclassification Profit or Loss From Profits Losses Profit Or Loss Earnings parent ing interests Equity
Previous Period
1 January -30 June 2023
Opening Balance 335.456 19.434.932 3.438.846 (1.333.406) 2.105.440 2.105.440 1.472.815 (265.886) (265.886) 102.819 102.819 1.309.748 1.563.166 9.536.033 (138.874) 9.397.159 34.145.901 3.557.904 37.703.805
Transfers - - (75.251) - (75.251) (75.251) - - - - - - - (63.623) 138.874 75.251 - - -
Total Comprehensive Income (Loss) - - - (209.476) (209.476) (209.476) 704.365 249.950 249.950 (76.634) (76.634) 877.681 - - (2.523.249) (2.523.249) (1.855.044) 222.893 (1.632.151)
Profit (Loss) for the period - - - - - - - - - - - - - - (2.523.249) (2.523.249) (2.523.249) 184.902 (2.338.347)
Other Comprehensive Income (Loss) - - - (209.476) (209.476) (209.476) 704.365 249.950 249.950 (76.634) (76.634) 877.681 - - - - 668.205 37.991 706.196
Dividends Paid - - - - - - - - - - - - - - - - - (130.052) (130.052)
Transactions with non-controlling shareholders - - (324) 9.187 8.863 8.863 - (813) (813) - - (813) (21.731) 324.442 - 324.442 310.761 124.672 435.433
Closing Balance 335.456 19.434.932 3.363.271 (1.533.695) 1.829.576 1.829.576 2.177.180 (16.749) (16.749) 26.185 26.185 2.186.616 1.541.435 9.796.852 (2.523.249) 7.273.603 32.601.618 3.775.417 36.377.035
Current Period
1 January -30 June 2024 335.456 19.434.932 11.277.352,0 (1.603.350) 9.674.002 9.674.002 2.007.579 (206.112) (206.112) 75.879 75.879 1.877.346 1.563.166 10.266.569 1.808.184 12.074.753 44.959.655 6.007.159 50.966.814
Opening Balance - - (55.540) - (55.540) (55.540) - - - - - - - 1.863.724 (1.808.184) 55.540 - - -
Transfers
Total Comprehensive
- - - (13.309) (13.309) (13.309) (332.789) 331.576 331.576 (951) (951) (2.164) - - (1.195.296) (1.195.296) (1.210.769) 331.634 (879.135)
- - - - - - - - - - - - - - (1.195.296) (1.195.296) (1.195.296) 249.528 (945.768)
Profit (Loss) for the period
Other Comprehensive Income (Loss)
- - - (13.309) (13.309) (13.309) (332.789) 331.576 331.576 (951) (951) (2.164) - - - - (15.473) 82.106 66.633
Dividends Paid - - - - - - - - - - - - - - - - - (267.628) (267.628)
Closing Balance 335.456 19.434.932 11.221.812 (1.616.659) 9.605.153 9.605.153 1.674.790 125.464 125.464 74.928 74.928 1.875.182 1.563.166 12.130.293 (1.195.296) 10.934.997 43.748.886 6.071.165 49.820.051

VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE INTERIM PERIODS 1 JANUARY – 30 JUNE 2024 AND 2023

(Amounts expressed in thousands of Turkish Lira ("TL") in terms of the purchasing power of TL as of 30 June 2024 unless otherwise stated.)

Reviewed Reviewed
1 January - 1 January -
30 June 30 June
Notes 2024 2023
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES (7.116.748) 9.857.274
Profit for the Period (945.768) (2.338.347)
Profit (Loss) from Continuing Operations (945.768) (2.338.347)
Adjustments to Reconcile Profit for the Period 4.505.544 3.945.918
Adjustments for Depreciation and Amortisation Expense 13 2.910.863 3.480.212
Adjustments for Impairment Loss
(Reversal of Impairment Loss) 21.532 53.127
Adjustments for Impairement Loss
(Reversal of Impairment Loss) of Receivables 8,9 (18.659) (61.929)
Adjustments for Impairment Loss
(Reversal of Impairment Loss) of Inventories 10 40.191 115.056
Adjustments for Provisions 1.129.973 1.875.728
Adjustments for (Reversal of) Provisions Related with
Employee Benefits 18 300.406 391.066
Adjustments for (Reversal of) Lawsuit and/or
Penalty Provisions 18.706 (1.284)
Adjustments for (Reversal of) Warranty Provisions 512.440 1.330.287
Adjustments for (Reversal of) Other Provisions 298.421 155.659
Adjustments for Interest (Income) Expenses 2.485.265 1.964.534
Adjustments for Interest Income 23 (2.359.307) (1.745.571)
Adjustments for Interest Expense 23 4.844.572 3.710.105
Adjustments for Unrealised Foreign
Exchange Losses (Gains) (2.346.533) (5.346.125)
Adjustments for Fair Value Losses (Gains) 378.472 95.224
Adjustments for Fair Value (Gains) Losses on
Derivative Financial Instruments 378.472 95.224
Adjustments for Gains From Investments Accounted for Using Equity Method 811.171 819.574
Adjustments for Retained Earnings of Subsidiaries 811.171 819.574
Adjustments for Tax (Income) Expenses 1.002.164 342.645
Adjustments for Losses (Gains) on Disposal of Non-Current Assets 55.513 (19.435)
Adjustments for Losses (Gains) Arised from Sale of Tangible Assets 55.513 (19.435)
Other Adjustments to Reconcile Profit (Loss) 5 5 7
Monetary (Gain) / Loss (1.942.881) 680.427

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE INTERIM PERIODS 1 JANUARY – 30 JUNE 2024 AND 2023

(Amounts expressed in thousands of Turkish Lira ("TL") in terms of the purchasing power of TL as of 30 June 2024 unless otherwise stated.)

Reviewed Reviewed
1 January - 1 January -
30 June 30 June
Notes 2024 2023
Changes in Working Capital (10.471.375) 8.868.400
Decrease (Increase) in Financial Asset 61.394 110.285
Adjustments for Decrease (Increase) in Trade Accounts Receivable (3.145.622) (4.616.890)
Decrease (Increase) in Trade Accounts Receivables from Related Parties (337.638) (194.857)
Decrease (Increase) in Trade Accounts Receivables from Third Parties (2.807.984) (4.422.033)
Adjustments for Decrease (Increase) in Other Receivables Related with Operations 165.256 387.164
Decrease (Increase) in Other Third Party Receivables Related with Operations 165.256 387.164
Adjustments for Decrease (Increase) in Inventories (8.534.945) (8.555.750)
Decrease (Increase) in Prepaid Expenses 20.731 236.348
Adjustments for Increase (Decrease) in Trade Accounts Payable (433.255) 20.076.438
Increase (Decrease) in Trade Accounts Payables to
Related Parties 158.925 132.164
Increase (Decrease) in Trade Accounts Payables to Third Parties (592.180) 19.944.274
Increase (Decrease) in Employee Benefit Liabilities 348.960 1.089.920
Adjustments for Increase (Decrease) in Other Operating Payables 345.435 138.364
Increase (Decrease) in Other Operating Payables to Third Parties 345.435 138.364
Increase (Decrease) in Deferred Revenue 1.125.057 624.408
Other Adjustments for Other Increase (Decrease) in Working Capital (424.386) (621.887)
Decrease (Increase) in Other Assets Related with Operations 143.032 (805.983)
Increase (Decrease) in Other Payables Related with Operations (567.418) 184.096
Cash Flows from (used in) Operations (6.911.599) 10.475.971
Payments Related with Provisions for Employee Benefits 18 (186.416) (523.117)
Income Taxes Refund (Paid) 24 (18.733) (95.580)

VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE INTERIM PERIODS 1 JANUARY – 30 JUNE 2024 AND 2023

(Amounts expressed in thousands of Turkish Lira ("TL") in terms of the purchasing power of TL as of 30 June 2024 unless otherwise stated.)

Reviewed Reviewed
1 January - 1 January -
30 June 30 June
Notes 2024 2023
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES (3.785.968) (6.226.127)
Proceeds from sales of Shares Without
Change in Control of Subsidiaries or Other Businesses - 435.433
Cash Outflows Related to Purchases for
Acquisition of Control of Subsidiaries (210.539) -
Proceeds from Sales of Property, Plant, Equipment and Intangible Assets (36.345) 22.023
Proceeds from Sales of Property, Plant and Equipment (36.345) 22.023
Purchase of Property, Plant, Equipment and Intangible Assets (3.056.652) (3.576.463)
Purchase of Property, Plant and Equipment 13 (1.699.774) (2.342.269)
Purchase of Intangible Assets 15 (1.356.878) (1.234.194)
Cash Advances and Loans (482.432) (3.107.120)
Cash Advances and Loans Made to Related Parties (187.962) (3.221.565)
Cash Advances and Loans Made to Third Parties (294.470) 114.445
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES 12.286.154 (1.580.143)
Proceeds from Borrowings 6 44.943.763 17.976.274
Proceeds from Loans 25.431.113 16.284.326
Proceeds from Issued Debt Instruments 19.512.650 1.691.948
Repayments of Borrowings (27.643.727) (14.839.984)
Loan Repayments 6 (25.205.390) (13.065.910)
Issued bonds repayments 6 (1.524.000) (1.774.074)
Cash Outflows from Other Financial Liabilities (914.337) -
Changes of Lease Liabilities (147.983) (27.632)
Interest Paid (4.900.639) (4.703.174)
Interest Received 34.740 14.373
EFFECT OF MONETARY GAIN / LOSS ON CASH AND CASH EQUIVALENTS (608.996) (1.288.012)
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS BEFORE EFFECT OF EXCHANGE RATE CHANGES 774.442 762.992
Effect of Exchange Rate Changes on Cash and
Cash Equivalents 41.416 761.257
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 815.858 1.524.249
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD 5 2.862.236 3.190.609
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD 3.678.094 4.714.858

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

(Amounts expressed in thousands of Turkish Lira ("TL") in terms of the purchasing power of TL as of 30 June 2024 unless otherwise stated.)

NOTE 1 – GROUP'S ORGANISATION AND NATURE OF OPERATIONS

Vestel Elektronik Sanayi ve Ticaret Anonim Şirketi ("Vestel Elektronik" or "the Company") and its subsidiaries (together "the Group"), mainly produce and sell a range of brown goods and white goods.

The Company's head office is located at Levent 199, Büyükdere Caddesi No: 199, 34394 Şişli / Istanbul. The Group's production facilities are located in Manisa Organized Industrial Zone and İzmir Aegean Free Zone.

The ultimate controller of the Company is Zorlu Holding.

Vestel Elektronik is registered to Capital Market Board ("CMB") and its shares have been quoted to Borsa Istanbul ("BİST") since 1990. As of 30 June 2024, 47,23% of the Company's shares are publicly traded (31 December 2023: 44,31%).

As of 30 June 2024 the number of personnel employed at Group is 19.525 (31 December 2023: 19.304).

The Company's subsidiaries and associates are as follows:

Subsidiaries Country Nature of operations
Vestel Beyaz Eşya Sanayi ve Ticaret A.Ş. Turkey Production
Vestel Mobilite Sanayi ve Ticaret A.Ş. (*) Turkey Production
Vestel Ticaret A.Ş. Turkey Sales
Vestel CIS Ltd. Russia Sales
Vestel Electronica SRL Romania Sales
Vestel Holland B.V. Iberia Branch Office Spain Sales
Vestel France SA France Sales
Vestel Holland BV Holland Sales
Vestel Holland B.V. Germany Branch Office Germany Sales
Cabot Communications Ltd. UK Software
Vestel UK Ltd. UK Sales
Vestel Holland B.V. UK Branch Office UK Sales
Vestek Elektronik Araştırma Geliştirme A.Ş. Turkey Software
Vestel Trade Ltd. Russia Sales
Vestel Electronics Shanghai Trading Co. Ltd China Service
Intertechnika LLC Russia Service
Vestel Central Asia LLP Kazakhstan Sales
Vestel Ventures Ar-ge A.Ş. Turkey Service
Vestel Holland B.V. Poland Branch Office Poland Sales
Vestel Electronics Gulf DMC UAE Sales
Vestel U.S.A. United States Sales
Cylinda AB (*) Sweden Sales

(Amounts expressed in thousands of Turkish Lira ("TL") in terms of the purchasing power of TL as of 30 June 2024 unless otherwise stated.)

NOTE 1 – GROUP'S ORGANISATION AND NATURE OF OPERATIONS (Cont'd)

As of 31 May 2024, by making adjustments for financial and commercial liabilities the acquisition and transfer of all shares held by Elektroskandia Sverige AB in Cylinda AB, representing Cylinda AB's share capital of 25.000 Swedish Krona (SEK), each with nominal value of 1 Swedish Krona (SEK) totaling 25.000 shares, for a total consideration of 69.464.282 Swedish Krona (SEK) (6,08 million EUR) by Group's subsidiary, Vestel Holland B.V. through payment of the share purchase price in cash and upfront are completed on 4 June 2024.

Vestel Ticaret A.Ş, which is Group's subsidiary, transferred all of its 6.886.735 shares, each with a nominal value of 1 Turkish Lira, which is the owner of Vestel Mobility Sanayi ve Ticaret A.Ş which is Group's subsidiary, to Vestel Elektronik Sanayi ve Ticaret A.Ş for a consideration of 1.442.000 TL on 28 June 2024.

Associates Country Nature of operations
Lentatek Uzay Havacılık ve Teknoloji A.Ş. Turkey Production/ Sales
Aydın Yazılım Elektronik ve Sanayi A.Ş. Turkey Software
Meta Nikel Kobalt Madencilik San. ve Tic. A.Ş. ("Meta") Turkey Mining
Türkiye'nin Otomobili Girişim Grubu Sanayi ve Ticaret A.Ş. ("TOGG") Turkey Automotive

NOTE 2 – BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS

2.1 Basis of presentation

2.1.1 Statement of compliance

The accompanying condensed consolidated interim financial statements are prepared in accordance with the Communiqué Serial II, No: 14.1, "Principals of Financial Reporting in Capital Markets" published in the Official Gazette numbered 28676 on 13 June 2013. According to the article 5 of the Communiqué, consolidated financial statements are prepared in accordance with Turkish Accounting Standards / Turkish Financial Reporting Standards ("TAS" / "TFRS") and its addendum and interpretations ("IFRIC") issued by the Public Oversight Accounting and Auditing Standards Authority ("POAASA" or "POA") Turkish Accounting Standards Board.

The Company and its subsidiaries operating in Turkey maintains its accounting records and prepares its statutory financial statements in accordance with the Turkish Commercial Code ("TCC"), tax legislation and the uniform chart of accounts issued by the Ministry of Finance. The consolidated financial statements have been prepared in Turkish Lira on the basis of historical cost, except for land, buildings and land improvements from the tangible assets group shown at their fair value, and financial assets and liabilities shown at their fair value.

(Amounts expressed in thousands of Turkish Lira ("TL") in terms of the purchasing power of TL as of 30 June 2024 unless otherwise stated.)

NOTE 2 – BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (Cont'd)

2.1 Basis of presentation (Cont'd)

2.1.1 Statement of compliance (Cont'd)

The Group prepared its condensed consolidated interim financial statements for the period ended 30 June 2024 in accordance with ("TAS") 34 "Interim Financial Reporting" in the framework of the Communiqué Serial II, No: 14.1, and its related announcement. The condensed consolidated interim financial statements and its accompanying notes are presented in compliance with the format recommended by CMB including its mandatory information.

Enterprises are free to prepare interim financial statements as a full set or as a summary in accordance with the TAS 34 standard. In this context, the Group has chosen to prepare summary financial statements in the interim periods. The condensed consolidated interim financial statements are presented in accordance with the formats determined in the "Announcement on TFRS Taxonomy" published by the POA and in the Financial Statement Samples and User Guide published by the CMB.

The condensed consolidated interim financial statements do not include all the information required in the annual financial statements and should be read in conjunction with the Group's annual financial statements as of 31 December 2023.

Consolidated subsidiaries operating in foreign countries have prepared their financial statements in accordance with the laws and regulations of the countries in which they operate with the required adjustments and reclassifications reflected in accordance with CMB Financial Reporting Standards. These financial statements are based on the statutory records which are maintained under historical cost conversion, with the required adjustments and reclassifications reflected for the purpose of fair presentation in accordance with the TFRS.

The Group has prepared its financial statements for the year dated 31 December 2023 and ending on the same date, by applying TAS 29 "Financial Reporting in High Inflation Economies" Standard, based on the announcement made by the POA on 23 November 2023 and the "Implementation Guide on Financial Reporting in High Inflation Economies" published. In accordance with the said standard, financial statements prepared based on the currency of a hyperinflationary economy are prepared in the purchasing power of this currency at the balance sheet date, and comparative information is expressed in terms of the current measurement unit at the end of the reporting period for the purpose of comparison in the financial statements of the previous period

In accordance with the said standard, financial statements prepared based on the currency of a hyperinflationary economy are prepared in the purchasing power of this currency at the balance sheet date, and comparative information is expressed in terms of the current measurement unit at the end of the reporting period for the purpose of comparison in the financial statements of the previous period.For this reason, the group has presented its financial statements as of 30 June 2023 and 31 December 2023 on the basis of purchasing power as of 30 June 2024.

(Amounts expressed in thousands of Turkish Lira ("TL") in terms of the purchasing power of TL as of 30 June 2024 unless otherwise stated.)

NOTE 2 – BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (Cont'd)

2.1 Basis of presentation (Cont'd)

2.1.1 Statement of compliance (Cont'd)

In accordance with the CMB's decision dated 28 December 2023 and numbered 81/1820, issuers and capital market institutions subject to financial reporting regulations applying Turkish Accounting/Financial Reporting Standards shall comply with the provisions of TAS 29, starting from their annual financial reports for the accounting periods ending as of 31 December 2023. It was decided to apply inflation accounting by applying.

Rearrangements made in accordance with TAS 29 were made using the correction coefficient obtained from the Consumer Price Index in Turkey ("CPI") published by the Turkish Statistical Institute ("TURKSTAT"). As of 30 June 2024, the indices and correction coefficients used in the correction of financial statements are as follows:

Date Index Correction Coefficient Three-Year Compound
Inflation Rate
30 June 2024 2.139,29 1 324%
31 December 2023 1.859,38 1,2473 268%
30 June 2023 1.269,75 1,7160 190%

The main elements of the Group's adjustment for financial reporting purposes in high-inflation economies are as follows:

  • Current period financial statements prepared in TL are expressed in purchasing power at the balance sheet date, and amounts from previous reporting periods are also expressed by adjusting according to the purchasing power at the end of the reporting period.

  • Monetary assets and liabilities are not adjusted as they are currently expressed in current purchasing power at the balance sheet date. In cases where the inflation-adjusted values of nonmonetary items exceed the recoverable amount or net realizable value, the provisions of TAS 36 and TAS 2 were applied, respectively.

  • Non-monetary assets and liabilities and equity items that are not expressed in current purchasing power at the balance sheet date have been adjusted using the relevant adjustment coefficients.

  • All items included in the statement of comprehensive income, except for non-monetary items in the balance sheet that have an impact on the statement of comprehensive income, are indexed with coefficients calculated over the periods in which the income and expense accounts are first reflected in the financial statements.

  • The effect of inflation on the Group's net monetary asset position in the current period is recorded in the net monetary position gains/(losses) account in the consolidated income statement.

(Amounts expressed in thousands of Turkish Lira ("TL") in terms of the purchasing power of TL as of 30 June 2024 unless otherwise stated.)

NOTE 2 – BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (Cont'd)

2.1 Basis of presentation (Cont'd)

2.1.2 Currency used

i) Functional and presentation currency

Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates ("functional currency"). The condensed consolidated interim financial statements are presented in Turkish Lira ("TL"), which is the functional currency of the parent company.

ii) Transactions and balances

Transactions in foreign currencies have been translated into functional currency at the exchange rates prevailing at the date of the transaction. Exchange gains or losses arising from the settlement and translation of monetary assets and liabilities denominated in foreign currency at the exchange rates prevailing at the balance sheet dates are included in consolidated comprehensive income, except for the effective portion of foreign currency hedge of cash flow and net investment which are included under shareholders' equity.

iii) Translation of financial statements of subsidiaries operating in foreign countries

Assets and liabilities of subsidiaries operating in foreign countries are translated into TL at the exchange rates prevailing at the balance sheet dates. Comprehensive income items of those subsidiaries are translated into TL using average exchange rates for the period (if the average exchange rates for the period do not reasonably reflect the exchange rate fluctuations, transactions are translated using the exchange rates prevailing at the date of the transaction).

Exchange differences arising from using average and balance sheet date rates are included in "exchange differences on translation" under the shareholders' equity.

2.1.3 Basis of consolidation

The consolidated financial statements include the accounts of the Company and its subsidiaries from the date on which the control is transferred to the Group until the date that the control ceases. The financial statements of the companies included in the scope of consolidation have been prepared as of the date of the consolidated financial statements and have been prepared in accordance with TFRS Financial Reporting Standards by applying uniform accounting policies and presentation.

a) Subsidiaries

The Group has control over an entity when it has existing rights that give it the current ability to direct the relevant activities, i.e. the activities that significantly affect the entity's returns.

(Amounts expressed in thousands of Turkish Lira ("TL") in terms of the purchasing power of TL as of 30 June 2024 unless otherwise stated.)

NOTE 2 – BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (Cont'd)

2.1 Basis of presentation (Cont'd)

2.1.3 Basis of consolidation (Cont'd)

a) Subsidiaries (Cont'd)

On the other hand, the Group controls an entity when it is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.

In order to be consistent with accounting policies accepted by the Group, accounting policies of the subsidiaries are modified where necessary.

The balance sheet and statement of income of the subsidiaries are consolidated on a line-by-line basis and all material intercompany payable /receivable balances and sales / purchase transactions are eliminated. The carrying value of the investment held by Vestel Elektronik and its subsidiaries is eliminated against the related shareholders' equity.

The non-controlling share in the net assets and results of subsidiaries for the period are separately classified as "noncontrolling interest" in the condensed consolidated statements of comprehensive income and the condensed consolidated statements of changes in shareholders' equity.

As of the balance sheet date, consolidated companies and the proportion of ownership interest of Vestel Elektronik in these subsidiaries are disclosed in note 3.

Financial assets in which the Group has direct or indirect voting rights equal to or above 50% which are immaterial to the Group financial results or over which a significant influence is not exercised by the Group are carried at cost less any provisions for impairment.

b) Investments in associates

Investments in associates are accounted for by the equity method and are initially recognized at cost. These are entities in which the Group has an interest which is more than 20% and less than 50% of the voting rights or over which a significant influence is exercised. Unrealized gains on transactions between the Group and its associate are eliminated to the extent of the Group's interest in the associates, whereas unrealized losses are eliminated unless they do not address any impairment of the asset transferred. Net increase or decrease in the net assets of associates is included in the consolidated statements of comprehensive income in regards with the Group's share.

The Group ceases to account the associate using the equity method if it loses the significant influence or the net investment in the associate becomes nil, unless it has entered to a liability or a commitment.

(Amounts expressed in thousands of Turkish Lira ("TL") in terms of the purchasing power of TL as of 30 June 2024 unless otherwise stated.)

NOTE 2 – BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (Cont'd)

2.1 Basis of presentation (Cont'd)

2.1.3 Basis of consolidation (Cont'd)

b) Investments in associates (Cont'd)

After the Group's interest in the associates becomes nil, additional losses are provided for, and a liability recognized, only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate. If the associate subsequently reports profits, the Group resumes including its share of those profits only after its share of the profits equals the share of net losses not recognized.

The carrying amounts of the investments accounted for using the equity method are reviewed whether there is any indication of impairment at each reporting date. If such an indicator exists, the recoverable amount of the asset is estimated.

The recoverable amount of the investments accounted for using the equity method refers to the higher of valuein-use or fair value less cost to sell. Value-in-use is the present value of future cash flows expected to be generated from an asset or cash generating unit.

If the carrying amount of the investments accounted for using the equity method exceeds the recoverable amount, the impairment is accounted for. Impairments are recognized in profit and loss accounts. Impairments are recorded in the statement of profit or loss and other comprehensive income.

In investments accounted for using the equity method, impairments allocated in previous periods are reevaluated in each reporting period in the event that impairment decreases or there are indicators that impairment is not valid. Impairment is reversed in case of changes in the estimates used when determining recoverable amount. The increase in the carrying amount of the investments due to the reversal of the impairment loss is accounted in such a way that it does not exceed the carrying amount determined if the impairment loss has not been included in the consolidated financial statements in the previous years.

Financial assets in which the Group's total direct and indirect shareholding is below 20% or in which the Group does not have significant influence, traded in organized markets and whose fair value can be determined reliably are financial assets whose fair value difference is reflected in other comprehensive income in the consolidated financial statements are classified as financial assets.

Shares of shareholders with non-controlling interests in the net assets and operating results of Subsidiaries are shown as "non-controlling interests" in the consolidated statement of financial position and consolidated statement of profit or loss.

(Amounts expressed in thousands of Turkish Lira ("TL") in terms of the purchasing power of TL as of 30 June 2024 unless otherwise stated.)

NOTE 2 – BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (Cont'd)

2.1 Basis of presentation (Cont'd)

2.1.3 Basis of consolidation (Cont'd)

b) Investments in associates (Cont'd)

As of 30 June 2024, the Group's Meta Nikel Kobalt Madencilik San. ve Tic. A.Ş., Lentatek Uzay Havacılık ve Teknoloji A.Ş., Aydın Yazılım Elektronik ve Sanayi A.Ş. are recognized as zero in the consolidated balance sheet by evaluating their net asset position. (31 December 2023: Zero) The Group has no any capital completion commitment for these companies.

2.2 Netting / Offsetting

All items that are significant in terms of content and amount are shown separately in the financial statements, even if they are similar in nature. Amounts that are not material are shown by aggregating items that are similar in terms of their principles or functions. As a result of the nature of the transaction and event requiring offsetting, showing this transaction and event over their net amounts or monitoring the assets at their amounts after deducting impairment is not considered a violation of the non-offsetting rule. Income obtained by the Group as a result of transactions carried out in the normal course of business, other than the income defined in the section titled "Revenue", are shown at their net value, provided that they comply with the essence of the transaction or event.

2.3 Comparative information

Consolidated financial statements of the Group have been prepared comparatively with the preceding financial period, in order to enable determination of trends in financial position and performance. Comparative figures are reclassified, where necessary, to conform to changes in presentation in the consolidated financial statements.

2.4 Restatement and errors in the accounting estimates

Major changes in accounting policies are applied retrospectively and any major accounting errors that have been detected are corrected and the financial statements of the previous period are restated. Changes in accounting policies resulting from the initial implementation of a new standard, if any, are implemented retrospectively or prospectively in accordance with the transition provisions. If changes in accounting estimates are related to only one period, they are recognized in the period when changes are applied; if changes in estimates are related to future periods, they are recognized both in the period where the change is applied and future periods prospectively.

(Amounts expressed in thousands of Turkish Lira ("TL") in terms of the purchasing power of TL as of 30 June 2024 unless otherwise stated.)

NOTE 2 – BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (Cont'd)

2.5 Amendments in Turkish Financial Reporting Standards

a) Standards, amendments, and interpretations applicable as of 30 June 2024:

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.

Amendment to IAS 1 – Noncurrent liabilities with covenants; It is valid for annual reporting periods beginning on or after 1 January 2024. These changes clarify how the requirements that an entity must comply with within twelve months after the reporting period affect the classification of a liability. The changes also aim to improve the information the entity provides regarding obligations subject to these conditions.

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 sustainability-related 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.

On 29 December 2023, the Public Oversight Authority (POA) published a Board Decision in the Official Gazette, announcing that certain businesses will be subject to mandatory sustainability reporting starting from 1 January 2024. The companies included in the scope of the sustainability application are determined in order to identify the businesses that will be subject to sustainability reporting within the scope of the "Board Decision on the Determination of Businesses Subject to Sustainability Reporting Within the Scope of the Application of Turkey Sustainability Reporting Standards (TSRS)" dated 5 January 2024.

(Amounts expressed in thousands of Turkish Lira ("TL") in terms of the purchasing power of TL as of 30 June 2024 unless otherwise stated.)

NOTE 2 – BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (Cont'd)

2.5 Amendments in Turkish Financial Reporting Standards (Cont'd)

b) Standards, amendments, and interpretations that are issued but not effective as of 30 June 2024:

IAS 21 Lack of convertibility; effective from annual periods beginning on or after 1 January 2025. An entity is affected when it has a transaction or activity in a foreign currency that is not convertible into another currency at a particular measurement date for a particular purpose. A currency can be exchanged when the ability to obtain another currency is available (with a normal administrative delay) and the transaction occurs through a market or clearing 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).

2.6 Going concern

The Company prepared financial statements in accordance with the going concern assumption.

2.7. Summary of significant accounting policies

Summary financial statements for the interim period ending on 30 June 2024 have been prepared in accordance with the TAS 34 standard for the preparation of interim financial statements. The significant accounting policies used in preparing the summary financial statements are consistent with the accounting policies explained in detail in the financial statements dated 31 December 2023. Therefore, interim financial statements should be evaluated together with the financial statements for the year ending 31 December 2023.

(Amounts expressed in thousands of Turkish Lira ("TL") in terms of the purchasing power of TL as of 30 June 2024 unless otherwise stated.)

NOTE 2 – BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (Cont'd)

2.8. Critical accounting estimates and judgments

The frequency of revaluations is determined to ensure that the carrying amounts of the revalued items of property, plant and equipment are not materially different from their fair values at the end of the reporting period. The frequency of revaluations depends on the change in the fair value of the items of property, plant and equipment.

Where the fair value of a revalued asset is considered to be materially different from its carrying amount, the revaluation is required to be repeated and this is done for the entire asset class in which the revalued asset is included as of the same date. On the other hand, it is not considered necessary to repeat the revaluation of property, plant and equipment whose fair value changes are insignificant.

In this context, as a result of the assessments made by the Company management and received from an independent real estate appraisal firm, it is assumed that the fair values of land, buildings and land improvements determined in the valuation studies performed as of 31 December 2023 will converge to their respective fair values as of 30 June 2024 after deducting current period depreciation and the CPI change in the related interim period.

The Company management takes into consideration the guarantees received from customers, past collection performances, maturity analysis, disputes or lawsuits regarding receivables while evaluating the recoverability of trade receivables. As a result of all these evaluations, the determination of doubtful receivables and the determination of the amount of provisions allocated for these receivables also includes the assumptions and estimates of the management.

(Amounts expressed in thousands of Turkish Lira ("TL") in terms of the purchasing power of TL as of 30 June 2024 unless otherwise stated.)

NOTE 3 – INTERESTS IN OTHER ENTITIES

Subsidiaries:

As of 30 June 2024 and 31 December 2023 the Group's significant subsidiaries are as follows:

30 June 2024 31 December 2023
Functional Voting Effective Voting Effective
Consolidated subsidiaries Currency rights ownership rights ownership
Vestel Beyaz Eşya Sanayi ve Ticaret A.Ş. TL 77,3 77,3 77,3 77,3
Vestel Mobilite Sanayi ve Ticaret A.Ş. TL 100 100 100 100
Vestel Ticaret A.Ş. TL 100 100 100 100
Vestel CIS Ltd. RUB 100 100 100 100
Vestel Holland B.V. Iberia Branch Office EUR 100 100 100 100
Vestel France SA EUR 100 100 100 100
Vestel Holland B.V. EUR 100 100 100 100
Vestel Holland B.V. Germany Branch Office EUR 100 100 100 100
Cabot Communications Ltd. GBP 90,8 90,8 90,8 90,8
Vestel UK Ltd. GBP 100 100 100 100
Vestel Holland B.V. UK Branch Office GBP 100 100 100 100
Vestek Elektronik Araştırma Geliştirme A.Ş. TL 100 100 100 100
Vestel Trade Ltd. RUB 100 100 100 100
Intertechnika LLC RUB 99,9 99,9 99,9 99,9
Vestel Central Asia LLP KZN 100 100 100 100
Vestel Holland B.V. Poland Branch Office PLN 100 100 100 100
Vestel Electronics Gulf DMC AED 100 100 100 100
Vestel Electronics Shanghai Trading Co. Ltd. CNY 100 100 100 100
Vestel Electronica SRL RON 100 100 100 100
Vestel USA USD 100 100 100 100
Vestel Ventures Ar-ge A.Ş. USD 100 100 100 100
Cylinda AB SEK 100 100 - -

(Amounts expressed in thousands of Turkish Lira ("TL") in terms of the purchasing power of TL as of 30 June 2024 unless otherwise stated.)

NOTE 3 – INTERESTS IN OTHER ENTITIES (Cont'd)

Financial information of Vestel Beyaz Eşya Sanayi ve Ticaret A.Ş which is not wholly owned by the Group and has significant non-controlling interests is as follows.

30 June 2024 31 December 2023
Accumulated non-controlling interests 6.071.165 6.105.013
1 January - 1 January -
30 June 2024 30 June 2023
Comprehensive income attributable to
non-controlling interests 331.634 222.893

The financial statements of the subsidiary are adjusted to include the effects of revaluation of property, plant and equipment in accordance with the Group's accounting policies applied in preparation of the consolidated financial statements.

Condensed balance sheet:

30 June 2024 31 December 2023
Current assets 30.361.674 33.048.866
Non-current assets 31.248.187 30.458.535
Current liabilities (30.152.240) (31.447.504)
Non-current liabilities (4.677.008) (5.129.976)
Net assets 26.780.613 26.929.921

Condensed statement of comprehensive income:

1 January - 1 January -
30 June 30 June
2024 2023
Net sales 31.939.613 38.393.846
Income before tax 660.244 1.592.189
Tax benefit 8.805 251.838
Net income for the period 669.049 1.844.027
Total comprehensive income 1.031.232 1.987.305

(Amounts expressed in thousands of Turkish Lira ("TL") in terms of the purchasing power of TL as of 30 June 2024 unless otherwise stated.)

NOTE 3 – INTERESTS IN OTHER ENTITIES (Cont'd)

Condensed statement of cash flows:

1 January - 1 January -
30 June 2024 30 June 2023
Operating activities:
Changes in working capital (1.976.359) 1.298.174
Net cash provided by operating activities 950.166 2.993.666
Investing activities:
Net cash used in investing activities 376.489 (2.324.176)
Financing activities:
Proceeds from bank borrowings 3.666.836 3.893.153
Repayment of bank borrowings (2.484.395) (3.330.881)
Net cash (used in) / provided by financing activities (1.928.523) (1.237.842)
Cash and cash equivalents at the beginning of the period 909.962 1.189.505
Cash and cash equivalents at the end of the period 127.645 424.765

Other financial information of Group's subsidiaries are not presented on the grounds of materiality.

(Amounts expressed in thousands of Turkish Lira ("TL") in terms of the purchasing power of TL as of 30 June 2024 unless otherwise stated.)

NOTE 4 - SEGMENT REPORTING

Operating segments are identified on the same basis as financial information is reported internally to the Group's chief operating decision maker. The Group Board of Directors has been identified as the Group's chief operating decision maker who is responsible for allocating resources between segments and assessing their performances. The Group management determines operating segments by reference to the reports reviewed by the Board of Directors to make strategic decisions.

Considering the fact that the Group's risks and rate of returns are dissimilar between product types and between geographical areas, The Group management uses industrial segments as primary reporting format and geographical segments as secondary reporting format. Gross profitability is taken into account in the performance of the segments.

Industrial segments

Consumer and
mobility Household
electronics appliances Total
1 January -30 June 2024
Revenue 20.960.678 39.283.747 60.244.425
Cost of sales (18.044.386) (28.152.088) (46.196.474)
Gross profit 2.916.292 11.131.659 14.047.951
Depreciation and amortization 1.579.873 1.330.990 2.910.863
1 January -30 June 2023
Revenue 20.473.784 45.874.215 66.347.999
Cost of sales (17.930.253) (35.384.235) (53.314.488)
Gross profit 2.543.531 10.489.980 13.033.511
Depreciation and amortization 2.135.178 1.345.034 3.480.212

(Amounts expressed in thousands of Turkish Lira ("TL") in terms of the purchasing power of TL as of 30 June 2024 unless otherwise stated.)

NOTE 4 - SEGMENT REPORTING (Cont'd)

Consumer and
mobility Household
electronics appliances Total
1 April -30 June 2024
Revenue 11.011.535 20.361.780 31.373.315
Cost of sales (8.968.974) (14.989.155) (23.958.129)
Gross profit 2.042.561 5.372.625 7.415.186
Depreciation and amortization 611.753 605.059 1.216.812
1 April -30 June 2023
Revenue 10.913.476 24.289.685 35.203.161
Cost of sales (9.630.334) (17.156.438) (26.786.772)
Gross profit 1.283.142 7.133.247 8.416.389
Depreciation and amortization 912.369 602.144 1.514.513

Capital expenditure

Consumer and Household
mobility electronics appliances Total
1 January -30 June 2024 1.232.703 1.823.949 3.056.652
1 January -30 June 2023 1.168.759 2.407.704 3.576.463

(Amounts expressed in thousands of Turkish Lira ("TL") in terms of the purchasing power of TL as of 30 June 2024 unless otherwise stated.)

NOTE 4 - SEGMENT REPORTING (Cont'd)

Geographical segments:

1 January -
1 January -
1 April - 1 April -
30 June 30 June 30 June 30 June
2024 2023 2024 2023
Turkey 28.111.779 26.940.706 13.739.935 14.863.396
Europe 29.978.144 35.885.853 16.517.915 18.950.661
Other 7.371.027 8.816.307 3.528.958 4.163.494
Gross segment sales 65.460.950 71.642.866 33.786.808 37.977.551
Discounts (-) (5.216.525) (5.294.867) (2.413.493) (2.774.390)
Revenue 60.244.425 66.347.999 31.373.315 35.203.161

The amount of export for the period 1 January - 30 June 2024 is TL 37.349.171 (1 January – 30 June 2023: TL 44.702.160). Export sales are denominated in EUR, USD and other currencies as 72%, 19%, and 9% of total exports respectively (1 January – 30 June 2023: 72,5% EUR, 21% USD, 6,5% other).

The carrying value of segment assets and costs incurred in order to obtain these assets are not separately disclosed since significant portion of assets of the Group are located in Turkey.

(Amounts expressed in thousands of Turkish Lira ("TL") in terms of the purchasing power of TL as of 30 June 2024 unless otherwise stated.)

NOTE 5 - CASH AND CASH EQUIVALENTS

30 June 2024 31 December 2023
Cash 21.318 18.030
Bank deposits
- Demand
deposits
3.578.187 2.573.555
deposits
- Time
55 113.880
Cheques and notes 29.757 19.532
Other 48.777 137.239
3.678.094 2.862.236
Blocked deposits 22 27
Cash and cash equivalents 3.678.116 2.862.263

Effective interest rates

30 June 2024 31 December 2023
TL %35,00 %34,45

The Group has time deposits amounting to TL 55 (31 December 2023: TL 75.250 and RUB 48.500). As of 30 June 2024 and 31 December 2023 the Group's time deposits have an average maturity of less than 3 months.

The credit risks of the banks where the Group has deposits are evaluated based on independent data and no significant credit risk is expected. The fair values of cash and cash equivalents approximate their carrying values, including accrued income, at the balance sheet date.

(Amounts expressed in thousands of Turkish Lira ("TL") in terms of the purchasing power of TL as of 30 June 2024 unless otherwise stated.)

NOTE 6 – FINANCIAL LIABILITIES

30 June 2024 31 December 2023
Short term financial liabilities
Short term bank loans 23.379.273 25.298.651
Short term portion of long term bank loans 1.223.979 3.523.331
Short term portion of long term issued bonds (*) 1.785.971 -
Short term portion of long term lease liabilities 261.983 288.091
Short term issued bonds (*) 5.222.929 4.428.040
31.874.135 33.538.113
Long term financial liabilities
Long term bank loans 1.578.492 2.329.389
Long term lease liabilities 707.317 829.192
Long term issued bonds (*) 14.713.033 -
16.998.842 3.158.581

* The maturity of the commercial papers with the ISIN code TRSVSTLK2421, with a maturity of 379 days and a payment every 3 months, amounting to 460.000 TL, which was issued by the Group to qualified investors on 19 October 2023, is 31 October 2024 and the annual simple interest rate of the coupon has been determined as 56,48%.

* The maturity of the commercial papers with the ISIN code TRSVSTLK2413, with a maturity of 395 days and a quarterly payment, in the amount of 300.000 TL, which was issued to qualified investors on 3 October 2023, is 31 October 2024 and the annual simple interest rate of the coupon has been determined as 58,51%.

* The maturity of the commercial papers with the ISIN code TRFVSTL82413, with a maturity of 362 days and a quarterly payment, in the amount of 190.000 TL, which was issued to qualified investors on 25 August 2023, is 20 August 2024 and the annual simple interest rate of the coupon has been determined as 55,70% .

(Amounts expressed in thousands of Turkish Lira ("TL") in terms of the purchasing power of TL as of 30 June 2024 unless otherwise stated.)

NOTE 6 – FINANCIAL LIABILITIES (Cont'd)

* The maturity of the bond with the ISIN code TRSVSTLA2415, with a maturity of 379 days and a quarterly payment amounting to 517.000 TL, which was issued to qualified investors on 22 November 2023, is 20 August 2024 and the annual simple interest rate of the coupon has been determined as 55,63%.

* The maturity date of the bond with the ISIN code TRFVSTL92412, with a maturity of 147 days and a single coupon payment of 600.000 TL, which was issued to qualified investors on 30 April 2024, is 25 September 2024 and the annual simple interest rate of the coupon has been determined as 60%.

* The maturity date of the bond with the ISIN code TRFVSTL82421, with a maturity of 55 days and a single coupon payment of 500.000 TL, which was issued to qualified investors on 26 June 2024, is 20 August 2024 and the annual simple interest rate of the coupon has been determined as 52%.

* The maturity date of the bond with the ISIN code TRFVSTL2418, with a maturity of 167 days, a single coupon payment and an amount of 400.000 TL, which was issued to qualified investors on 5 June 2024, is 19 November 2024 and the annual simple interest rate of the coupon has been determined as 55%.

* The maturity of the bond with the ISIN code TRSVSTL22511, with a maturity of 384 days and a quarterly payment, amounting to 370.000 TL, which was issued to qualified investors on 7 February 2024, is 25 February 2025 and the annual simple interest rate of the coupon has been determined as 54,31%.

* The maturity date of the bond with the ISIN code TRSVEST92410, amounting to TL 50.000, with a maturity of 390 days, a payment every 3 months, issued to qualified investors on 24 August 2023 is 17 September 2024 and the annual simple interest rate of the coupon has been determined as 55,70%.

(Amounts expressed in thousands of Turkish Lira ("TL") in terms of the purchasing power of TL as of 30 June 2024 unless otherwise stated.)

NOTE 6 – FINANCIAL LIABILITIES (Cont'd)

* The maturity date of the bond with the ISIN code TRSVEST92428 ISIN, amounting to 260.000 TL, with a maturity of 383 days and a payment every 3 months, which was issued to qualified investors on 1 September 2023, was 17 September 2024 and the annual simple interest rate of the coupon was determined as 55,70%.

* The maturity date of the commercial papers with the ISIN code TRFVESTA2419, amounting to 556.430 TL, with a maturity of 295 days and a payment every 3 months, which was issued to qualified investors on 21 February 2024, was 11 December 2024 and the annual simple interest rate of the coupon was determined as 55,13%.

* The Group issued a bond with the ISIN code XS2817919587 with a fixed interest payment coupon every 6 months, quoted on the Irish Stock Exchange, amounting to a total of USD 500 million, USD 450 million on 6 June 2024 and USD 50 million on 15 May 2024. The maturity of the bond is 15 May 2029 and the coupon interest rate is 9,75%. Vestel Mobilite Sanayi ve Ticaret A.Ş and Vestel Ticaret A.Ş are guarantors in issued bonds.

30 June 2024 31 December 2023
Weighted
average of
effective
Original Weighted
average of
effective
Original
Currency interest currency TL Equivalent interest currency TL Equivalent
- USD %9,23 270.532 8.896.526 %10,48 317.322 11.672.960
- EUR %8,0 139.394 4.905.512 %10,12 105.507 4.294.572
- TL %30,82 8.888.053 8.888.053 %37,80 8.573.469 8.573.469
- CNY %9,19 151.392 689.182 %7,96 145.484 757.650
23.379.273 25.298.651

Details of the Group's short term bank loans are given below:

(Amounts expressed in thousands of Turkish Lira ("TL") in terms of the purchasing power of TL as of 30 June 2024 unless otherwise stated.)

NOTE 6 – FINANCIAL LIABILITIES (Cont'd)

Details of the Group's long term bank loans are given below:

30 June 2024 31 December 2023
Weighted
average of
effective
Original Weighted
average of
effective
Original
Currency interest currency TL Equivalent interest currency TL Equivalent
- USD %7,99 26.090 857.977 %11,03 28.587 1.051.597
- EUR - - - %10,96 14.190 577.592
- TL %23,84 366.002 366.002 %29,96 1.894.142 1.894.142
Short term portion 1.223.979 3.523.331
- USD %11,49 12.820 421.590 %11,21 15.690 577.170
- EUR - - - %10,96 6.135 249.720
- TL %20,65 1.156.902 1.156.902 %20,65 1.502.499 1.502.499
Long term portion 1.578.492 2.329.389
2.802.471 5.852.720

Total amount of Group's floating bank loans is TL 11.828.193 (31 December 2023: TL 15.903.392).

A significant portion of long-term loans consists of loans used within the approval of the Investment Committed Advance Loan (YTAK) with a fixed interest rate of 1.5 billion TL, originating from the Central Bank, with a total maturity of 10 years, including a grace period of 2 years for principal repayment.

The maturity schedule of Group's long term bank loans is given below:

Uzun vadeli finansal borçların ödeme planı 30 June 2024 31 December 2023
One to two years 756.972 1.228.785
Two years and more 821.520 1.100.604
1.578.492 2.329.389

(Amounts expressed in thousands of Turkish Lira ("TL") in terms of the purchasing power of TL as of 30 June 2024 unless otherwise stated.)

NOTE 6 – FINANCIAL LIABILITIES (Cont'd)

The analysis of Group's bank loans in terms of periods remaining to contractual re-pricing dates is as follows:

30 June 2024 31 December 2023
3 months or less 1.022.117 6.537.320
Between 3-6 months 2.226.642 3.867.009
Between 6-12 months 8.579.434 5.499.063
11.828.193 15.903.392

Guarantees given for the bank loans obtained are presented in note 16.

Fair values of short-term bank borrowings are considered to approximate their carrying values due to immateriality of discounting. Fair values are determined using average effective annual interest rates. Long term bank borrowings and long term issued bonds are stated at amortized cost using effective interest rate method and their fair values are considered to approximate their carrying values since loans usually have a re-pricing period of six months.

The Group has fulfilled its financial commitments arising from its borrowings as of 30 June 2024 and 2023.

As of 30 June 2024 and 2023, the Group's net financial debt reconciliation is shown below:

30 June 2024 30 June 2023
Net financial debt as of 1 January 33.834.458 40.865.947
Cash inflows from loans and issued bonds 44.943.763 17.976.274
Cash outflows from loan and bonds payments (26.729.390) (14.839.984)
Changes of lease liabilities (147.983) (27.632)
Unrealized exchange gain/loss 1.124.713 5.132.847
Changed interest (203.669) (792.698)
Change in cash and cash equivalents (815.858) (1.524.249)
Monetary gain / (loss) (6.811.151) (7.091.146)
Net financial debt at the end of the period 45.194.883 39.699.359

(Amounts expressed in thousands of Turkish Lira ("TL") in terms of the purchasing power of TL as of 30 June 2024 unless otherwise stated.)

NOTE 7 – RELATED PARTY DISCLOSURES

a) Short term trade receivables from related parties

30 June 2024 31 December 2023
ZES Dijital Ticaret A.Ş. (1) 301.289 31.371
Türkiye'nin Otomobili Girişim Grubu Sanayi ve Ticaret A.Ş. (4) 397.293 480.693
Other related parties 72.607 57.402
771.189 569.466

b) Short term trade payables to related parties

30 June 2024 31 December 2023
ABH Turizm Temsilcilik ve Ticaret A.Ş. (1) 18.160 21.824
Zorlu Holding A.Ş. (2) 80.473 50.350
Other related parties 161.998 68.186
260.631 140.360

c) Other short term receivables from related parties

30 June 2024 31 December 2023
Lentatek Uzay Havacılık ve Teknoloji A.Ş. (4) 977.837 1.109.281
977.837 1.109.281

As of 30 June 2024, the Company's interest rate of short term other receivables in USD is 9%, and in TL is 55% (31 December 2023: in USD 8% and TL 50%).

(1) Zorlu Holding Group Company, (2) Parent (3) Subsidiary (4) Associates

(Amounts expressed in thousands of Turkish Lira ("TL") in terms of the purchasing power of TL as of 30 June 2024 unless otherwise stated.)

NOTE 7 – RELATED PARTY DISCLOSURES (Cont'd)

d) Other long term receivables from related parties

30 June 2024 31 December 2023
Zorlu Holding A.Ş. (2) 12.483.803 14.134.384
Lentatek Uzay Havacılık ve Teknoloji A.Ş. (4) 12.722.297 12.547.387
Meta Nikel Kobalt Madencilik Sanayi ve Ticaret A. Ş. (4) 9.537.905 9.201.597
34.744.005 35.883.368

The Company's interest rate of other receivables in USD is 9%, and in TL is 55% (31 December 2023: in USD 8% and TL 50%).

e) Long term prepayments to related parties

30 June 2024 31 December 2023
Zorlu Enerji Elektrik Üretim A.Ş. (1) 2.438.019 2.347.168
Other 562.041 125.210
3.000.060 2.472.378

f) Transactions with related parties

1 January - 1 January -
30 June
1 April - 1 April -
30 June
30 June 30 June
2024 2023 2024
147.505
277.103
12.7470
2023
Sales
ZES Dijital Ticaret A.Ş. (1) 543.115 41.465 40.703
Türkiye'nin Otomobili Girişim Grubu Sanayi ve Ticaret A.Ş. (4) 695.028 116.449 110.732
Other related parties 30.099 29.525 14.8120
1.268.242 187.439 437.355 166.247

(1) Zorlu Holding Group Company, (2) Parent (3) Subsidiary (4) Associates

(Amounts expressed in thousands of Turkish Lira ("TL") in terms of the purchasing power of TL as of 30 June 2024 unless otherwise stated.)

NOTE 7 – RELATED PARTY DISCLOSURES (Cont'd)

f) Transactions with related parties (Cont'd)

1 January -
30 June
1 January - 1 April - 1 April -
30 June 30 June 30 June
2024 2023 2024 2023
Operating expenses
Zorlu Holding A.Ş. (2) 286.644 250.117 154.666 126.342
ABH Turizm Temsilcilik ve Ticaret A.Ş. (1) 93.034 71.390 44.099 39.955
Other related parties 73.841 89.883 37.213
0
37.376
0
453.519 411.390 235.978 203.673
1 January - 1 January - 1 April - 1 April -
30 June 30 June 30 June 30 June
2024 2023 2024 2023
Financial income
Zorlu Holding A.Ş. (2) 2.215.440 4.683.550 508.127 4.171.846
Lentatek Uzay Havacılık ve Teknoloji A.Ş. (4) 2.188.416 4.117.530 278.320 3.563.286
Meta Nikel Kobalt Madencilik Sanayi ve Ticaret A.Ş. (4) 1.557.729 2.937.603 206.928 2.565.912
Other related parties - 592.008 - 480.247
5.961.585 12.330.691 993.375 10.781.291

Financial income from related parties consists of interest income and foreign exchange differences arising from financial liabilities.

1 January - 1 January - 1 April - 1 April -
30 June
2023
30 June 30 June 30 June
2024
2024 2023
Financial expense
Other related parties 2.512 8.031 432 7.949
2.512 8.031 432 7.949

(1) Zorlu Holding Group Company, (2) Parent (3) Subsidiary (4) Associates

(Amounts expressed in thousands of Turkish Lira ("TL") in terms of the purchasing power of TL as of 30 June 2024 unless otherwise stated.)

NOTE 7 – RELATED PARTY DISCLOSURES (Cont'd)

f) Transactions with related parties (Cont'd)

1 January - 1 January - 1 April - 1 April -
30 June 30 June 30 June 30 June
2024 2023 2024 2023
Other income from operating activities
Other related parties 447.495 527.239 206.567 522.038
Other expense from operating activities
Other related parties 8.586 8.587 4.353 7.285

g) Guarantees received from and given to related parties are disclosed in note 16.

h) Compensation paid to key management including directors, the Chairman and members of Board of Directors, general managers and assistant general managers for the six months period ended 30 June 2024 is TL 103.943 (1 January - 30 June 2023: TL 123.688).

i) Financing income from related parties consists of interest income arising from loans given for financing purposes.

(Amounts expressed in thousands of Turkish Lira ("TL") in terms of the purchasing power of TL as of 30 June 2024 unless otherwise stated.)

NOTE 8 – TRADE RECEIVABLES AND PAYABLES

30 June 2024 31 December 2023
Short term trade receivables
Trade receivables
- Related parties (Note 7) 771.189 569.466
- Other parties 18.949.906 19.775.297
Cheques and notes receivables 1.268.948 2.124.097
Other 70.485 101.161
21.060.528 22.570.021
Unearned interest expense (-)
- Other parties (143.868) (177.385)
Allowance for doubtful receivables (-) (141.025) (157.570)
Total short term trade receivables 20.775.635 22.235.066
Long term trade receivables
Cheques and notes receivables 36 1.024
Total long term trade receivables 36 1.024
30 June 2024 31 December 2023
Short term trade payables
Trade payables
- Related parties (Note 7) 260.631 140.360
- Other parties 41.416.459 52.315.727
Other 1.234 7.222
41.678.324 52.463.309
Unearned interest income (-)
- Other parties (102.167) (117.474)
Total short term trade payables 41.576.157 52.345.835
Long term trade payables
Trade payables
- Other parties 160.615 222.245
Total long term trade payables 160.615 222.245

(Amounts expressed in thousands of Turkish Lira ("TL") in terms of the purchasing power of TL as of 30 June 2024 unless otherwise stated.)

NOTE 9 – OTHER RECEIVABLES AND PAYABLES

30 June 2024 31 December 2023
Short term other receivables
Receivables from public institutions 1.009.207 1.394.048
Receivables from related parties (Note 7) 977.837 1.109.281
Deposits and guarantees given 186.273 285.166
Other 30.451 25.260
2.203.768 2.813.755
Allowance for doubtful receivables (-) (211) (278)
2.203.557 2.813.477
30 June 2024 31 December 2023
Long term other receivables
Deposits and guarantees given 27.583 25.716
Receivables from related parties (Note 7) 34.744.005 35.883.368
Other 8.291 26.654
34.779.879 35.935.738
Allowance for doubtful receivables (-) (8.279) (10.326)
34.771.600 35.925.412
Short term other payables
Other payables
- Other parties 336.079 17.670
336.079 17.670
Deferred revenue
- Other parties 2.121.621 1.333.601
2.121.621 1.333.601

(Amounts expressed in thousands of Turkish Lira ("TL") in terms of the purchasing power of TL as of 30 June 2024 unless otherwise stated.)

NOTE 10 – INVENTORIES

30 June 2024 31 December 2023
Raw materials 17.603.843 14.979.702
Work in process 896.804 719.985
Finished goods 12.221.012 12.638.765
Merchandise 1.096.270 1.390.727
Other 49.218 38.259
31.867.147 29.767.438
Provision for impairment on inventories (-) (439.879) (441.145)
31.427.268 29.326.293

Cost of the inventory included in the consolidated statement of comprehensive income in the period 1 January – 30 June 2024 is TL 38.162.335 (1 January – 30 June 2023: TL 45.424.821).

As of 30 June 2024, the Group does not have inventories pledged as security for liabilities (31 December 2023: None)

Movement of provision for impairment on inventories is as follows:

1 January - 1 January -
30 June 2024 30 June 2023
Opening balance, 1 January 441.145 480.069
Current year additions 86.976 133.318
Realised due to sale of inventory (46.785) (18.262)
Currency translation differences (41.457) 30.188
Balances at 30 June 2024 439.879 625.314

(Amounts expressed in thousands of Turkish Lira ("TL") in terms of the purchasing power of TL as of 30 June 2024 unless otherwise stated.)

NOTE 11 – PREPAID EXPENSES

30 June 2024 31 December 2023
Prepaid expenses in current assets
Order advances given 698.291 1.518.429
Prepaid expenses 796.778 371.591
Business advances given 9.526 10.827
1.504.595 1.900.847
Prepaid expenses in non-current assets
Advances given for fixed asset purchases 634.373 372.190
Prepaid expenses 329.068 75.374
963.441 447.564

NOTE 12 - INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

30 June 2024 31 December 2023
% Amount % Amount
Subsidiaries
Türkiye'nin Otomobili Girişim Grubu Sanayi ve Ticaret A.Ş. %23 6.479.140 %23 7.306.043
6.479.140 7.306.043

Within the framework of Turkey's Automobile Project, following the work undertaken by the Joint Initiative Group, to which Group's controlling shareholder, Zorlu Holding AŞ was a party, Vestel Elektronik Sanayi ve Ticaret AŞ decided to participated with 19% share in "Türkiye'nin Otomobili Girişim Grubu Sanayi ve Ticaret A.Ş.", which was planned to be established to produce mainly electric passenger cars and carry out supporting activities. In this respect, the Shareholders Agreement and Articles of Association have been signed on 31 May 2018. Establishment of the new Group was completed on 28 June 2018.

(Amounts expressed in thousands of Turkish Lira ("TL") in terms of the purchasing power of TL as of 30 June 2024 unless otherwise stated.)

NOTE 12 - INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD (Cont'd)

Within the scope of the decision taken at the Annual General Meeting of TOGG which was held on 31 May 2021, the Group's stake in TOGG has reached to 23%.

The movements of TOGG, which is an investment accounted for using the equity method during the period 1 January – 30June 2024 and 2023 is as follows:

1 January - 1 January -
30 June 2024 30 June 2023
Balance at 1 January 7.306.043 4.710.345
Shares from profit / (loss) (811.171) (109.543)
Shares from other comprehensive income / (expense) (15.787) 10.298
Capital Increase 55 -
Balances at 30 June 2024 6.479.140 4.611.100

(Amounts expressed in thousands of Turkish Lira ("TL") in terms of the purchasing power of TL as of 30 June 2024 unless otherwise stated.)

NOTE 13 – PROPERTY, PLANT AND EQUIPMENT

Currency
1 January translation 30 June
2024 Additions Disposals differences Transfers 2024
17.089.096 - - - 17.078.521
538.432 - - 976 525.353
12.508.009 14.751 42.342 12.381.905
1.727.866 3.823 (127) 265 1.726.718
41.673.761 676.357 (297.682) 182.243 42.191.781
80.184 36 14 77.856
7.169.404 84.134 13.351 7.246.729
17.250 - - - - 17.250
2.214.737 920.673 (243.616) 2.882.218
83.018.739 1.699.774 (4.425) 84.128.331
40.723 13.554 - - 50.333
488.856 419.519 - 857.226
1.416.979 29.258 - 1.442.424
31.377.053 1.339.113 - 32.365.727
63.768 2.712 - 65.325
6.404.288 228.024 - 6.615.226
17.250 - - - - 17.250
39.808.917 2.032.180 - 41.413.511
43.209.822 42.714.820
(101)
(1.893)
(5.363)
(8.854)
(314.020)
(101)
(127)
(289.721)
(974)
(4.303)
(295.226)
(10.575)
(14.055)
(183.096)
(5.109)
(42.898)
(485)
(14.797)
(722)
(271.737)
(3.944)
(51.048)
(3.686)
(60.718)
(181)
(12.783)
(132.360)

(Amounts expressed in thousands of Turkish Lira ("TL") in terms of the purchasing power of TL as of 30 June 2024 unless otherwise stated.)

NOTE 13 – PROPERTY, PLANT AND EQUIPMENT (Cont'd)

Currency
1 January translation 30 June
2023 Additions Disposals differences Transfers 2023
Cost or revaluation
Land 6.565.669 - - 9.814 - 6.575.483
Land improvements 571.576 933 - 14.850 - 587.359
Buildings 10.591.287 48.116 - 238.810 35.728 10.913.941
Leasehold improvements 1.602.735 90.600 - 11.413 7.916 1.712.664
Plant and machinery 38.986.536 928.560 (299.815) 129.360 165.027 39.909.668
Motor vehicles 73.497 237 - 1.237 - 74.971
Furniture and fixtures 6.804.774 179.503 (6.651) 41.024 28.581 7.047.231
Other tangible assets 17.247 - - - - 17.247
Construction in progress 4.116.170 1.094.320 - - (240.655) 4.969.835
69.329.491 2.342.269 (306.466) 446.508 (3.403) 71.808.399
Accumulated depreciation
Land improvements 38.119 16.811 - 4.549 - 59.479
Buildings 530.736 455.307 - 73.807 - 1.059.850
Leasehold improvements 1.349.811 58.401 - 8.520 - 1.416.732
Plant and machinery 29.973.117 1.517.142 (298.598) 95.243 - 31.286.904
Motor vehicles 61.451 3.168 - 645 - 65.264
Furniture and fixtures 6.101.022 238.048 (6.399) 35.958 - 6.368.629
Other tangible assets 17.247 - - - - 17.247
38.071.503 2.288.877 (304.997) 218.722 - 40.274.105
Net book value 31.257.988 31.534.294

(Amounts expressed in thousands of Turkish Lira ("TL") in terms of the purchasing power of TL as of 30 June 2024 unless otherwise stated.)

NOTE 13 – PROPERTY, PLANT AND EQUIPMENT (Cont'd)

Allocation of current year depreciation and amortization expenses is as follows:

1 January - 1 January -
30 June 30 June
2024 2023
Cost of sales 1.564.059 2.047.464
Research and development expenses 705.193 787.797
Marketing, selling and distribution expenses 556.017 507.907
General administrative expenses 74.578 124.112
Other operating expense (idle capacity depreciation expense) 11.016 12.932
2.910.863 3.480.212
30 June 2024 Level 1 Level 2 Level 3
Tangible Assets
Lands - 17.078.521 -
Buildings and land improvements - 12.907.258 -
31 December 2023 Level 1 Level 2 Level 3
Tangible Assets
Lands - 17.089.096 -

(Amounts expressed in thousands of Turkish Lira ("TL") in terms of the purchasing power of TL as of 30 June 2024 unless otherwise stated.)

NOTE 14 – RIGHT OF USE ASSETS

1 January 30 June
2024 Additions 2024
Cost
Land and buildings 2.954.522 648.135 3.602.657
Motor vehicles 585.767 19.109 604.876
3.540.289 667.244 4.207.533
Accumulated amortization
Land and buildings 1.517.838 330.279 1.848.117
Motor vehicles 486.864 36.208 523.072
2.004.702 366.487 2.371.189
Net book value 1.535.587 1.836.344
1 January 30 June
2023 Additions 2023
Cost
Land and buildings 2.278.922 425.563 2.704.485
Motor vehicles 542.824 20.338 563.162
2.821.746 445.901 3.267.647
Accumulated amortization
Land and buildings 1.164.950 210.287 1.375.237
Motor vehicles 422.760 40.306 463.066
1.587.710 250.593 1.838.303
Net book value 1.234.036 1.429.344

(Amounts expressed in thousands of Turkish Lira ("TL") in terms of the purchasing power of TL as of 30 June 2024 unless otherwise stated.)

NOTE 15 – INTANGIBLE ASSETS

Currency
1 January translation 30 June
2024 Additions Disposals differences Transfers 2024
Cost
Rights 748.870 219 - (4.687) - 744.402
Development cost 14.902.278 1.148.919 (98.028) (11.187) - 15.941.982
Other intangible assets 2.313.161 207.740 (374) (5.462) 4.425 2.519.490
17.964.309 1.356.878 (98.402) (21.336) 4.425 19.205.874
Accumulated amortization
Rights 629.025 20.288 - (4.633) - 644.680
Development cost 10.753.608 408.857 (98.028) (10.178) - 11.054.259
Other intangible assets 1.699.826 83.051 - (5.835) - 1.777.042
13.082.459 512.196 (98.028) (20.646) - 13.475.981
Net book value 4.881.850 5.729.893
Currency
1 January translation 30 June
2023 Additions Disposals differences Transfers 2023
Cost
Rights 748.754 1.081 - 5.417 - 755.252
Development cost 13.140.418 1.142.741 - (65.164) - 14.217.995
Other intangible assets 2.149.862 90.372 (1.119) 683 3.403 2.243.201
16.039.034 1.234.194 (1.119) (59.064) 3.403 17.216.448
Accumulated amortization
Rights 600.111 20.176 - 5.438 - 625.725
Development cost 9.710.378 883.830 - (4.050) - 10.590.158
Other intangible assets 1.627.216 36.736 - 137 - 1.664.089
11.937.705 940.742 - 1.525 - 12.879.972
Net book value 4.101.329 4.336.476

Development costs incurred by the Group on development projects relating to television and electronic devices, refrigerators, split air conditioners, washing machines, cookers, drying machines and dish washers are capitalized as intangible assets.

(Amounts expressed in thousands of Turkish Lira ("TL") in terms of the purchasing power of TL as of 30 June 2024 unless otherwise stated.)

NOTE 16 – PROVISIONS, CONTINGENT ASSETS AND LIABILITIES

a) Provisions

30 June 2024 31 December 2023
Short term provisions
Warranty and assembly provision 1.548.955 1.484.680
Other provisions 1.983.482 2.127.202
Provision for lawsuit risks 93.934 95.425
3.626.371 3.707.307
Long term provisions
Warranty and assembly provision 468.023 435.523
468.023 435.523

As of 30 June 2024, the amount of provision provided for the cases for which the probability of losing the case is assessed to be high by the Group management and legal advisors is TL 93.935 (31 December 2023: TL 95.425).

b) Guarantees received by the Group

Guarantee letters, collaterals, cheques and notes received

30 June 2024 31 December 2023
Guarantee letters 4.965.429 4.554.805
Cheques and notes 2.949.472 2.577.393
Collaterals and pledges 6.407.409 5.602.356
14.322.310 12.734.554

The table above has been prepared based on the lower of the limits used or the amounts of guarantees received regarding the guarantees given by the Group.

(Amounts expressed in thousands of Turkish Lira ("TL") in terms of the purchasing power of TL as of 30 June 2024 unless otherwise stated.)

NOTE 16 – PROVISIONS, CONTINGENT ASSETS AND LIABILITIES (Cont'd)

USD EUR GBP CNY
CPMB's given by the Group ('000) ('000) ('000) ('000) TL TL Equivalent
30 June 2024
A. CPMB's given on behalf of its own legal entity 509 2.135 - 129.050 4.939.357 5.618.704
B. CPMB's given on behalf of fully consolidated
subsidiaries (*) 2.499.344 188.019 60.401 - 19.189.508 110.513.746
C. CPMB's given on behalf of third parties for
ordinary course of business - - - - - -
D. Total amount of other CPMB's given 21.248 - - - 16.854 715.601
i. Total amount of CPMB's given on behalf of the
parent company - - - - - -
ii. Total amount of CPMB's given to on behalf of
other group companies which are not in scope of
B and C. 21.248 - - - 16.854 715.601
iii.Total amount of CPMB's given on behalf of
third parties which are not in scope of C. - - - - - -
Total 2.521.101 190.154 60.401 129.050 24.145.719 116.848.051

c) Collaterals, pledges and mortgages and bails ("CPMB's") given by the Group

(*) Fully consolidated subsidiaries have given collaterals to various financial institutions on behalf of each other for their forward contracts and for the total amount of loans utilized.

The table above has been prepared based on the lower of the limits used or the amounts of guarantees given regarding the guarantees given by the Group.

(Amounts expressed in thousands of Turkish Lira ("TL") in terms of the purchasing power of TL as of 30 June 2024 unless otherwise stated.)

NOTE 16 – PROVISIONS, CONTINGENT ASSETS AND LIABILITIES (Cont'd)

USD EUR GBP CNY
CPMB's given by the Group ('000) ('000) ('000) ('000) TL TL Equivalent
31 December 2023
A. CPMB's given on behalf of its own legal entity 509 2.135 - - 3.766.245 3.871.873
B. CPMB's given on behalf of fully consolidated
subsidiaries (*) 2.182.426 148.778 60.346 - 17.639.233 106.810.538
C. CPMB's given on behalf of third parties for
ordinary course of business - - - - - -
D. Total amount of other CPMB's given 36.565 - - - 25.072 1.370.145
i. Total amount of CPMB's given on behalf of the
parent company - - - - - -
ii. Total amount of CPMB's given to on behalf of
other group companies which are not in scope of
B and C. 36.565 - - - 25.072 1.370.145
iii.Total amount of CPMB's given on behalf of
third parties which are not in scope of C. - - - - - -
Total 2.219.500 150.913 60.346 - 21.430.550 112.052.556

As of 30 June 2024, proportion of other CPMB's given by the Group to its equity is 1% (31 December 2023: 3%).

NOTE 17 – COMMITMENTS

As of the balance sheet date the Group has committed to realize exports amounting to 3.110.553 thousand USD (31 December 2023: 3.121.967 thousand USD) due to the export and investment incentive certificates obtained.

As of 30 June 2024, the Group has forward foreign currency purchase contract that amounts to, EUR 285.844 thousand , USD 851.677 thousand, GBP 95.155 thousand and PLN 18.935 thousand, against forward foreign currency sales contract that amounts to EUR 478.066 thousand, GBP 78.362 thousand, PLN 41.034 thousand, RUB 885.280 thousand, USD 412.789 thousand and TL 8.694.950. (31 December 2023: purchase contract that amounts to USD 1.068.802 thousand, EUR 227.544 thousand, GBP 135.899 thousand, PLN 21.625 thousand and CNY 156.580 thousand against forward foreign currency sales contract that amounts to USD 419.731 thousand, EUR 704.294 thousand, GBP 142.433 thousand, PLN 60.525 thousand, RUB 987.000, TL 4.029.267).

(Amounts expressed in thousands of Turkish Lira ("TL") in terms of the purchasing power of TL as of 30 June 2024 unless otherwise stated.)

NOTE 18 – EMPLOYEE BENEFITS

Liabilities for employee benefits:

30 June 2024 31 December 2023
Due to personnel 656.852 637.593
Social security payables 580.799 500.551
1.237.651 1.138.144

Long term provisions for employee benefits:

30 June 2024 31 December 2023
Provision for employment termination benefits 1.707.150 1.971.871

Under Turkish law, the Group is required to pay employment termination benefits to each employee whose employment is terminated without due cause. In addition, under the existing Social Security Law No.506, clause No. 60, amended by the Labor Laws dated 6 March 1981, No.2422 and 25 August 1999, No.4447, the Group is also required to pay termination benefits to each employee who has earned the right to retire by receiving termination indemnities.

The amount payable is the equivalent of one month's salary for each year of service and is limited to a maximum of 35.058,58 TL/year as of 30 June 2024 (31 December 2023: 23.489,83 TL/year - at 31 December 2023 purchasing power).

Provision for employment termination benefits is not subject to any funding.

The provision is calculated by estimating the present value of the future obligation of the Group arising from retirement of employees. TAS 19 ("Employee Benefits") requires actuarial valuation methods to be developed to estimate the enterprise's obligation under defined employee plans. Accordingly actuarial assumptions were used in the calculation of the total liability which are described below:

(Amounts expressed in thousands of Turkish Lira ("TL") in terms of the purchasing power of TL as of 30 June 2024 unless otherwise stated.)

NOTE 18 – EMPLOYEE BENEFITS (Cont'd)

The principal assumption is that the maximum liability for each year of service will increase in line with inflation. Thus, the discount rate applied represents the expected real rate after adjusting for the anticipated effects of future inflation. An expected inflation rate and appropriate discount rate should both be determined, the net of these being real discount rate. Consequently, in the accompanying financial statements as of 30 June 2024 the provision is calculated by estimating the present value of the future obligation of the company arising from retirement of employees. As of 30 June 2024, provision is calculated based on real discount rate of 3,72% assuming 23,60% annual inflation rate and 49,25% discount rate. (31 December 2023: 23,60% inflation rate, 49,25% real discount rate, 3,72% discount rate)

The main assumption is that the seniority ceiling for each year of service increases in line with inflation. Thus, the discount rate applied represents the actual rate adjusted for the expected effects of inflation. The maximum liability is revised every six months, the maximum amount of TL 41.828,42 effective from 1 July 2024 has been taken into consideration in the calculation of provision for employment termination benefits as of 31 December 2023 and 30 June 2024.

The movement in the provision for employment termination benefit is as follows:

1 January - 1 January -
30 June 2024 30 June 2023
Balance at 1 January 1.971.871 2.548.571
Increase during the year 124.772 292.022
Payments during the year (186.416) (523.117)
Actuarial (gain) /loss 20.109 287.607
Interest expense 175.634 99.044
Monetary gain / (loss) (398.820) (419.770)
Balance at 30 June 1.707.150 2.284.357

(Amounts expressed in thousands of Turkish Lira ("TL") in terms of the purchasing power of TL as of 30 June 2024 unless otherwise stated.)

NOTE 19 – OTHER ASSETS AND LIABILITIES

30 June 2024 31 December 2023
Other current assets
VAT carried forward 103.087 59.563
Rebates from suppliers and incentives income accruals 152.042 175.064
Other 73.673 335.973
328.802 570.600
30 June 2024 31 December 2023
Other current liabilities
Taxes payables 985.983 1.544.802
Other 895.830 1.462.000
1.881.813 3.006.802

NOTE 20 – CAPITAL, RESERVES AND OTHER EQUITY ITEMS

a) Paid in capital

30 June 2024 31 December 2023
Shares of par value Kr 1 each
limit on registered share capital 2.000.000 2.000.000
Issued share capital 335.456 335.456

As of 30 June 2024 and 31 December 2023 the shareholding structures are as follows:

Share Amount
30 June 31 December 30 June 31 December
2024 2023 2024 2023
Zorlu Holding A.Ş. %52,77 %55,69 177.019 186.815
Other shareholders (Publicly Listed) %47,23 %44,31 158.437 148.641
%100 %100 335.456 335.456

(Amounts expressed in thousands of Turkish Lira ("TL") in terms of the purchasing power of TL as of 30 June 2024 unless otherwise stated.)

NOTE 20 – CAPITAL, RESERVES AND OTHER EQUITY ITEMS (Cont'd)

b) Adjustment to share capital

Adjustment to share capital (restated to 31 December 2004 purchasing power of money) is the difference between restated share capital and historical share capital.

c) Share premium

Share premium account refers the difference between par value of the company's shares and the amount the company received for newly issued shares. The share premium account is disclosed under equity as a separate line item and may not be distributed. It may be used in capital increase.

d) Legal reserves

The legal reserves consist of first and second legal reserves appropriated in accordance with the Turkish Commercial Code ("TCC"). The first legal reserve is appropriated out of the statutory profits at the rate of 5%, until the total reserve reaches a maximum of 20% of the Company's share capital. The second legal reserve is appropriated at the rate of 10% of all distributions in excess of 5% of the Company's share capital. Under TCC, the legal reserves can only be used to offset losses and are not available for any other usage unless they exceed 50% of paid in share capital.

PPI - Indexed
Legal Records
CPI Indexed
Amounts
1.563.166 1.563.166
Differences Tracked in Past
Years Profits / Losses
19.434.932 9.476.864
1.563.166 707.466
31 December 2023
75.879
11.277.352
11.353.231
28.911.796
2.270.632
Revaluation of property, plant and equipment
30 June 2024
74.928
11.221.812
11.296.740

(Amounts expressed in thousands of Turkish Lira ("TL") in terms of the purchasing power of TL as of 30 June 2024 unless otherwise stated.)

NOTE 21 – SALES

1 January - 1 January - 1 April - 1 April -
30 June 30 June 30 June 30 June
2024 2023 2024 2023
Domestic sales 28.111.779 26.940.706 13.739.935 14.863.396
Export sales 37.349.171 44.702.160 20.046.873
-
23.114.155
-
Gross sales 65.460.950 71.642.866 33.786.808
-
37.977.551
-
Sales discounts (-) (5.216.525) (5.294.867) (2.413.493)
-
(2.774.390)
-
Net sales 60.244.425 66.347.999 31.373.315
-
35.203.161
-
Cost of sales (46.196.474) (53.314.488) (23.958.129) (26.786.772)
0
0
Gross profit 14.047.951 13.033.511 7.415.186 8.416.389

NOTE 22 – OTHER INCOME AND EXPENSE FROM OPERATING ACTIVITIES

a) Other income from operating activities:

1 January - 1 January - 1 April - 1 April -
30 June 30 June 30 June 30 June
2024 2023 2024 2023
Overdue interest charges 605.749 469.573 333.201 372.570
Foreign exchange gains arising from trading activities 746.596 2.677.144 468.717 2.100.151
Other income 429.525 97.787 30.836 5.624
1.781.870 3.244.504 832.754 2.478.345

b) Other expense from operating activities:

1 January - 1 January - 1 April - 1 April -
30 June 30 June 30 June 30 June
2024 2023 2024 2023
Interest expense on term purchases 1.100.410 597.203 557.696 325.042
Foreign exchange expenses arising from trading activities 4.140.442 10.729.359 1.131.894 9.448.125
Other expenses 389.818 462.074 164.084 263.934
5.630.670 11.788.636 1.853.674 10.037.101

(Amounts expressed in thousands of Turkish Lira ("TL") in terms of the purchasing power of TL as of 30 June 2024 unless otherwise stated.)

NOTE 23 – FINANCIAL INCOME AND FINANCIAL EXPENSE

a) Financial income:

1 January - 1 January - 1 April - 1 April -
30 June 30 June 30 June 30 June
2024 2023 2024 2023
Foreign exchange gains 3.679.146 9.894.905 632.436 9.130.583
Gains on derivative financial instruments 495.435 1.877.750 346.417 1.090.834
Interest income 2.359.307 1.745.571 1.121.970 936.253
6.533.888 13.518.226 2.100.823 11.157.670

b) Financial expense:

1 January - 1 January - 1 April - 1 April -
30 June 30 June 30 June 30 June
2024 2023 2024 2023
Foreign exchange losses 2.583.872 5.767.386 622.707 5.366.513
Losses on derivative financial instruments 1.946.169 3.230.047 1.375.872 2.345.621
Interest expense 4.844.572 3.710.105 2.523.718 2.302.939
Commission and other finance expenses 910.534 623.028 479.371
-
271.224
-
10.285.147 13.330.566 5.001.668 10.286.297

NOTE 24 – TAXES ON INCOME (INCLUDING DEFERRED TAX ASSETS AND LIABILITIES)

30 June 2024 31 December 2023
Corporation and income taxes 35.394 177.311
Prepaid taxes (-) (16.500) (175.078)
Current income tax liabilities - net 18.894 2.233
Deferred tax liabilities (2.570.164) (1.587.560)
Deferred tax liabilities - net (2.570.164) (1.587.560)

(Amounts expressed in thousands of Turkish Lira ("TL") in terms of the purchasing power of TL as of 30 June 2024 unless otherwise stated.)

NOTE 24 – TAXES ON INCOME (INCLUDING DEFERRED TAX ASSETS AND LIABILITIES) (Cont'd)

Pursuant to paragraph 1 of Article 6 of the Corporate Tax Law No. 5520, corporate tax is calculated on the net corporate income of the taxpayers for an accounting period. Pursuant to paragraph 2 of the same article, by taking into account the provisions of Income Tax Law No. 193 on commercial income, pure corporate income is calculated by adding legally unacceptable expenses to the commercial income and deducting the exempt earnings and discounts from the commercial income.

With the amendment made to Article 32 of the Corporate Tax Law No. 5520 with Article 21 of the Law No. 7456, corporate taxpayers other than banks, companies within the scope of the Law No. 6361, electronic payment and money institutions, authorized foreign exchange institutions, asset management companies, capital market institutions, insurance and reinsurance companies and pension companies are subject to corporate tax at the rate of 25% on their net corporate earnings in 2024 and the following taxation periods.

In addition to the corporate tax levied on corporate income, withholding income/corporate tax burden may arise if all or part of the profits of corporations are subject to profit distribution. By full taxpayer corporations;

  • Full taxpayer real persons,
  • For non-income and corporate taxpayers,
  • For those exempt from income tax,
  • Limited taxpayer real persons,
  • Limited taxpayers exempt from income tax,
  • Institutions exempt from corporate tax,
  • To limited taxpayer corporations or limited taxpayers exempt from corporate tax, except for those who obtain dividends through a place of business or permanent representative in Turkey,

(Amounts expressed in thousands of Turkish Lira ("TL") in terms of the purchasing power of TL as of 30 June 2024 unless otherwise stated.)

NOTE 24 – TAXES ON INCOME (INCLUDING DEFERRED TAX ASSETS AND LIABILITIES) (Cont'd)

In case of dividend distribution, 10% withholding income/corporate tax is payable. According to the Turkish tax legislation, capitalization of profit is not considered as dividend distribution.

Corporations are exempt from corporate tax on 75% of the gains arising from the sale of participation shares included in their assets for at least two full years and 25% of the gains arising from the sale of immovables included in their assets on 15 July 2023 for the same period. As of 15 July 2023, corporate tax exemption is not applied to the gains arising from the sale of immovables taken into assets.

Under Turkish tax legislation, tax losses carried forward can be carried forward to offset against future taxable income for up to 5 years. However, tax losses cannot be offset against retained earnings.

However, tax authorities may examine the accounting records within five years and the amount of tax payable may change if incorrect transactions are detected.

Earnings from the Company's investments subject to incentive certificates are subject to corporate tax at reduced rates from the accounting period in which the investment starts to be operated partially or completely until the investment contribution amount is reached.

Deferred tax assets are recognized to the extent that it is probable that future taxable income will be available against which they can be utilized. Where it is probable that taxable income will be available, deferred tax assets are recognized in respect of deductible temporary differences, tax losses and tax advantages arising from investment incentives with indefinite useful lives that allow for the payment of reduced corporate income tax.

(Amounts expressed in thousands of Turkish Lira ("TL") in terms of the purchasing power of TL as of 30 June 2024 unless otherwise stated.)

NOTE 24 – TAXES ON INCOME (INCLUDING DEFERRED TAX ASSETS AND LIABILITIES) (Cont'd)

Deferred tax assets and liabilities

For the periods 30 June 2024 and 2023, tax expenses recognized in the statement of comprehensive income are as follows;

1 January - 1 January -
30 June 2024 30 June 2023
Current period tax expense (18.371) (372.636)
Deferred tax income / (loss) (983.793) 29.991
Total tax expense (1.002.164) (342.645)

Due to modernization, plant extension and investments incentive documents in Manisa Organized Industrial Zone, the Group has reduced rate of corporate tax advantage.

The Group recognizes deferred tax assets and liabilities based upon temporary differences arising between their financial statements prepared in accordance with CMB Communiqué II, No. 14.1 and their statutory financial statements. These temporary differences usually result from the recognition of revenue and expenses in different reporting periods for the Communiqué and tax purposes.

(Amounts expressed in thousands of Turkish Lira ("TL") in terms of the purchasing power of TL as of 30 June 2024 unless otherwise stated.)

NOTE 24 – TAXES ON INCOME (INCLUDING DEFERRED TAX ASSETS AND LIABILITIES) (Cont'd)

The breakdown of cumulative temporary differences and the resulting deferred tax assets and liabilities provided using principal tax rate as of the balance sheet dates is as follows:

Cumulative
temporary differences Deferred tax
30 June 31 December 30 June 31 December
2024 2023 2024 2023
Deferred tax assets / (liabilities)
Employment termination benefits (1.707.150) (1.971.871) 426.788 492.967
Investment incentive - - 823.000 925.258
Warranty provision (2.016.978) (1.920.203) 504.245 480.051
Provision for doubtful receivables (141.025) (157.570) 35.256 39.392
Net difference between book values and tax bases of
property, plant and equipment and intangible asset 22.814.846 22.427.862 (4.607.264) (4.261.983)
Net difference between book values and tax bases of
inventories 2.516.932 2.235.838 (629.233) (558.959)
Provision for derivative instruments (372.434) (547.902) 93.109 136.976
R&D incentives - - 1.131.303 1.089.893
Other 1.389.472 (275.369) (347.368) 68.845
Deferred tax assets / (liabilities) - net (2.570.164) (1.587.560)

The Group's earnings from investments subject to incentive certificates are subject to corporate tax at reduced rates from the accounting period in which the investment starts to be operated partially or fully until the investment contribution amount is reached.

Furthermore, financial statements consist of the deferred tax effect of the temporary differences accounted by the adjustments made regarding inflation accounting together with the notification of the Corporate Tax Law dated 30 December 2023 and numbered 32415.

(Amounts expressed in thousands of Turkish Lira ("TL") in terms of the purchasing power of TL as of 30 June 2024 unless otherwise stated.)

NOTE 24 – TAXES ON INCOME (INCLUDING DEFERRED TAX ASSETS AND LIABILITIES) (Cont'd)

As of 30 June 2024, the tax advantage amounting to TL 823.000 that the Company will benefit from in the foreseeable future is reflected in the financial statements as deferred tax asset. In line with the precautionary principle of accounting and in line with the budget made by the Company, the tax advantage arising from the investment incentives that the Company expects to benefit from in the coming year has been recognized as deferred tax asset in the financial statements. However, the tax advantage amounting to TL 3.476.712 that the Company is entitled to use has not been recognized in deferred tax assets in accordance with the precautionary principle of accounting.

Total tax advantage arising from investment incentive certificate used in the current period is TL 24.965.

The Company assesses the recoverability of deferred tax assets related to investment incentives based on business models that include estimates of taxable profit. These business models include forward-looking management estimates such as sales volumes, selling prices and exchange rate expectations. As a result of the sensitivity analyses on the forward-looking use of investment incentives, it has been concluded that a 10% increase/decrease in the related estimates has no impact on the recoverability of the related deferred tax assets.

1 January - 1 January -
30 June 2024 30 June 2023
Opening balance, 1 January (1.587.560) (20.357)
Tax expense recognized in income statement (983.793) 29.991
Recognized in other comprehensive income (133.141) (459)
Currency translation differences 134.330 311.125
Deferred tax liabilities
at the end of the period, net (2.570.164) 320.300

The movement of net deferred tax assets and liabilities is as follows:

NOTE 25 – (LOSS) / EARNINGS PER SHARE

1 January - 1 January -
30 June 30 June
2024 2023
Net income / (loss) attributable to equity holders
of the parent (1.195.296) (2.523.249)
Weighted number of ordinary shares with a Kr 1 of par
value (hundred shares) 33.545.600 33.545.600
Loss per share (0,0356) (0,0752)

(Amounts expressed in thousands of Turkish Lira ("TL") in terms of the purchasing power of TL as of 30 June 2024 unless otherwise stated.)

NOTE 26 – DERIVATIVE INSTRUMENTS

30 June 2024 31 December 2023
Fair Value Fair Value
Contract Assets / Contract Assets /
amount (Liabilities) amount (Liabilities)
Derivative financial instruments:
Held for trading
Forward foreign currency transactions 6.813.803 59.443 11.409.072 173.802
Cash flow hedge
Forward foreign currency transactions 13.584.920 255.405 9.605.990 59.584
Derivative financial liabilities:
Held for trading
Forward foreign currency transactions 20.222.374 (649.342) 12.817.503 (201.132)
Cash flow hedge
Forward foreign currency transactions 1.474.758 (37.940) 22.013.334 (580.156)
42.095.855 (372.434) 55.845.899 (547.902)

NOTE 27 – FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT

Foreign currency risk:

The Group is exposed to exchange rate risk due to its foreign currency denominated transactions. The main principle of foreign currency risk management is to maintain foreign exchange position at the level that minimizes the impact of foreign exchange fluctuations.

Derivative instruments are used in foreign currency risk management where necessary. In this respect the Group mainly prefers using foreign exchange forward contracts.

(Amounts expressed in thousands of Turkish Lira ("TL") in terms of the purchasing power of TL as of 30 June 2024 unless otherwise stated.)

NOTE 27 – FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (Cont'd)

Other
USD EUR (TL
30 June 2024 (Thousand) (Thousand) Equivalent) TL Equivalent
1. Trade receivables 72.480 248.221 917.144 12.015.994
2a. Monetary financial assets (including
cash and cash equivalents) 73.702 4.778 85.985 2.673.185
2b. Non-monetary financial assets - - - -
3. Other 73.634 940 - 2.450.145
4. Current assets (1+2+3) 219.816 253.939 1.003.129 17.139.324
5. Trade receivables - - - -
6a. Monetary financial assets - - - -
6b. Non-monetary financial assets - - - -
7. Other 925.343 51 - 30.377.286
8. Non-current assets (5+6+7) 925.343 51 - 30.377.286
9. Total assets (4+8) 1.145.159 253.990 1.003.129 47.516.610
10. Trade payables 768.322 223.227 93.853 33.216.090
11. Financial liabilities 361.410 138.983 689.182 17.465.306
12a. Other monetary liabilities - 1.334 - 46.946
12b. Other non-monetary liabilities - - - -
13. Current liabilities (10+11+12) 1.129.732 363.544 783.035 50.728.342
14. Trade payables - 4.564 - 160.615
15. Financial liabilities 458.413 7.267 - 15.330.787
16a. Other monetary liabilities - - - -
16b. Other non-monetary liabilities - - - -
17. Non-current liabilities (14+15+16) 458.413 11.831 - 15.491.402
18. Total liabilities (13+17) 1.588.145 375.375 783.035 66.219.744
19. Off-balance sheet derivative instruments - - - -
net asset / (liability) position (19a+19b) (*) 438.888 (192.222) 177.586 7.777.503
19a. Hedged total assets 851.677 285.844 4.097.314 42.095.876
19b. Hedged total liabilities (412.789) (478.066) (3.919.728) (34.318.373)
20. Net foreign currency asset/ (liability)
position (9-18+19) (4.098) (313.607) 397.680 (10.925.631)
21. Net foreign currency monetary asset/
(liability) position
(=1+2a+3+5+6a+7-10-11-12a-14-15-16a) (442.986) (121.385) 220.094 (18.703.134)
22. Fair value of financial instruments used
in foreign currency hedging - - - (372.434)
23. Export 197.455 678.149 2.778.699 37.349.171
24. Import 653.822 91.921 42.921 24.778.910

(*) The net asset / (liability) positions of derivative instruments in foreign currency are included outside the statement of financial position.

(Amounts expressed in thousands of Turkish Lira ("TL") in terms of the purchasing power of TL as of 30 June 2024 unless otherwise stated.)

NOTE 27 – FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (Cont'd)

Other
USD EUR (TL TL Equivalent
31 December 2023 (Thousand) (Thousand) Equivalent) (Historic Date) TL Equivalent
1. Trade receivables 92.538 238.713 1.575.155 12.075.124 15.061.856
2a. Monetary financial assets (including - - - - -
cash and cash equivalents) 27.790 8.261 2.081 1.089.263 1.358.687
2b. Non-monetary financial assets - - - - -
3. Other 68.685 893 - 2.051.052 2.558.372
4. Current assets (1+2+3) 189.013 247.867 1.577.236 15.215.439 18.978.915
5. Trade receivables - - - - -
6a. Monetary financial assets - - - - -
6b. Non-monetary financial assets 18.643 3.115 - 650.277 811.120
7. Other 819.838 51 - 24.136.218 30.106.212
8. Non-current assets (5+6+7) 838.481 3.166 - 24.786.495 30.917.334
9. Total assets (4+8) 1.027.494 251.033 1.577.236 40.001.934 49.896.248
10. Trade payables 857.466 187.826 154.204 31.571.227 39.380.241
11. Financial liabilities 345.908 118.528 599.569 14.668.741 18.296.994
12a. Other monetary liabilities 80 1.415 - 48.528 60.531
12b. Other non-monetary liabilities - - - - -
13. Current liabilities (10+11+12) 1.203.454 307.769 753.773 46.288.497 57.737.766
14. Trade payables - 5.460 - 178.174 222.245
15. Financial liabilities 15.690 16.633 - 1.005.474 1.254.174
16a. Other monetary liabilities - - - - -
16b. Other non-monetary liabilities - - - - -
17. Non-current liabilities (14+15+16) 15.690 22.093 - 1.183.648 1.476.418
18. Total liabilities (13+17) 1.219.144 329.862 753.773 47.472.145 59.214.186
19. Off-balance sheet derivative instruments - - - - -
net asset / (liability) position (19a+19b) 649.071 (476.750) 108.175 3.692.531 4.605.863
19a. Hedged total assets 1.068.802 227.544 5.896.185 44.841.898 55.933.357
19b. Hedged total liabilities (419.731) (704.294) (5.788.010) (41.149.367) (51.327.494)
20. Net foreign currency asset/ (liability)
position (9-18+19) 457.421 (555.579) 931.638 (3.777.680) (4.712.073)
21. Net foreign currency monetary asset/
(liability) position
(=1+2a+3+5+6a+7-10-11-12a-14-15-16a) (210.293) (81.943) 823.463 (8.120.488) (10.129.056)
22. Fair value of financial instruments used
in foreign currency hedging - - - (439.254) (547.902)
23. Export 541.555 1.533.534 9.851.005 76.246.912 95.106.272
24. Import 1.404.462 207.252 542.079 39.158.737 48.844.490

(Amounts expressed in thousands of Turkish Lira ("TL") in terms of the purchasing power of TL as of 30 June 2024 unless otherwise stated.)

NOTE 27 – FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (Cont'd)

As of 30 June 2024 and 31 December 2023 sensitivity analysis of foreign exchange rates is presented in below tables. Secured portions include impact of off-balance sheet derivative instruments.

Gain / Loss Equity
Foreign
exchange
Foreign
exchange
Foreign
exchange
Foreign
exchange
30 June 2024 appreciation depreciation appreciation depreciation
+/- 10% fluctuation of USD rate:
USD net asset / liability (1.463.540) 1.463.540 (1.463.540) 1.463.540
Secured portion from USD risk (-) 407.430 (407.430) 696.637 (696.637)
USD net effect (1.056.110) 1.056.110 (766.903) 766.903
+/- 10% fluctuation of EUR rate:
EUR net asset / liability (428.781) 428.781 (428.781) 428.781
Secured portion from EUR risk (-) 260.856 (260.856) (221.405) 221.405
EUR net effect (167.925) 167.925 (650.186) 650.186
+/- 10% fluctuation of other currency rates:
Other currencies net asset / liability 22.009 (22.009) 22.009 (22.009)
Secured portion from other currency risk (-) 49.338 (49.338) 261.299 (261.299)
Other currency net effect 71.347 (71.347) 283.308 (283.308)

(Amounts expressed in thousands of Turkish Lira ("TL") in terms of the purchasing power of TL as of 30 June 2024 unless otherwise stated.)

NOTE 27 – FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (Cont'd)

Gain / Loss Equity
31 December 2023 Foreign
exchange
appreciation
Foreign
exchange
depreciation
Foreign
exchange
appreciation
Foreign
exchange
depreciation
+/- 10% fluctuation of USD rate:
USD net asset / liability (711.804) 711.804 (711.804) 711.804
Secured portion from USD risk (-) 6.490 (6.490) 925.354 (925.354)
USD net effect (705.314) 705.314 213.550 (213.550)
+/- 10% fluctuation of EUR rate:
EUR net asset / liability (322.703) 322.703 (322.703) 322.703
Secured portion from EUR risk (-) 197.849 (197.849) (1.245.924) 1.245.924
EUR net effect (124.854) 124.854 (1.568.627) 1.568.627
+/- 10% fluctuation of other currency rates:
Other currencies net asset / liability 102.714 (102.714) 102.714 (102.714)
Secured portion from other currency risk (-) 249.303 (249.303) 759.595 (759.595)
Other currency net effect 352.017 (352.017) 862.309 (862.309)

NOTE 28 – SUBSEQUENT EVENTS

None.

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