Quarterly Report • Apr 29, 2022
Quarterly Report
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Interim financial statements as of March 31, 2022
| Condensed statement of financial position 1-2 | |
|---|---|
| Condensed statement of profit or loss and other comprehensive income 3 | |
| Condensed statement of changes in equity 4 | |
| Condensed cash flow statement 5 | |
| Explanatory notes to the condensed financial statements 6-42 |
| Audited | |||
|---|---|---|---|
| Assets | Notes | March 31, 2022 | December 31, 2021 |
| Current assets | 9.851.715 | 9.392.439 | |
| Cash and cash equivalents | 3 | 5.093.871 | 8.885.482 |
| Financial investments | 4 | 4.068.791 | - |
| Trade receivables | |||
| - Due from third parties | 416 | 205 | |
| Other receivables | |||
| - Due from third parties | 77.246 | 54.195 | |
| Inventories | 5 | 526.910 | 426.033 |
| Prepaid expenses | 83.278 | 26.191 | |
| Other current assets | 1.203 | 333 | |
| Non-current assets | 3.295.136 | 2.710.671 | |
| Financial investments | 4 | 755.669 | 286.997 |
| Other receivables | |||
| - Due from related parties | 15 | 1.118.836 | 1.032.636 |
| - Due from third parties | 2.385 | 2.255 | |
| Right-of-use assets | 38.038 | 43.777 | |
| Investment property | 6 | 114.947 | 115.539 |
| Property, plant and equipment | 7 | 969.995 | 952.117 |
| Intangible assets | |||
| - Goodwill | 8 | 11.232 | 11.232 |
| - Other intangible assets | 8 | 3.780 | 3.979 |
| Prepaid expenses | 1.384 | 10.907 | |
| Deferred tax assets | 13 | 221.663 | 190.295 |
| Other non-current assets | 57.207 | 60.937 | |
| Total assets | 13.146.851 | 12.103.110 | |
| Audited | |||
|---|---|---|---|
| Liabilities | Notes | March 31, 2022 | December 31, 2021 |
| Current liabilities | 1.077.797 | 1.118.787 | |
| Short-term lease liabilities | |||
| - Lease liabilities | 23.266 | 20.044 | |
| Trade payables | |||
| - Due to third parties | 150.511 | 197.793 | |
| Payables related to employee benefits | 35.946 | 19.773 | |
| Other payables | |||
| - Due to related parties | 15 | 687 | 1.722 |
| - Due to third parties | 331 | 214 | |
| Deferred income | 851 | 761 | |
| Current income tax liabilities | 13 | 295.328 | 418.386 |
| Short-term provisions | |||
| - Provisions for employee benefits | 9 | 33.348 | 37.437 |
| - Other short-term provisions | 9 | 531.850 | 417.983 |
| Other current liabilities | 5.679 | 4.674 | |
| Non-current liabilities | 451.490 | 416.638 | |
| Long-term lease liabilities | |||
| - Lease liabilities | 20.324 | 28.978 | |
| Other payables | |||
| - Due to third parties | 80.423 | 71.263 | |
| Long-term provisions | |||
| - Provisions for employee benefits | 9 | 55.867 | 42.798 |
| - Other long-term provisions | 9 | 294.876 | 273.599 |
| Equity | 11.617.564 | 10.567.685 | |
| Paid-in share capital | 10 | 152.500 | 152.500 |
| Adjustment to share capital | 10 | 3.579 | 3.579 |
| Other comprehensive income / expense not to be | |||
| reclassified to profit or loss | |||
| - Actuarial gain / (loss) fund for employee benefits | (11.794) | (3.677) | |
| Restricted reserves | 10 | 137.390 | 137.390 |
| Retained earnings | 10.277.893 | 7.273.891 | |
| Net profit for the period | 1.057.996 | 3.004.002 | |
| Total liabilities and equity | 13.146.851 | 12.103.110 |
| Reviewed | |||
|---|---|---|---|
| January 1 – | January 1 – | ||
| Notes | March 31, 2022 | March 31, 2021 | |
| Revenue Cost of sales (-) |
11 11 |
1.408.745 (475.015) |
848.798 (333.859) |
| Gross profit | 933.730 | 514.939 | |
| Research and development expenses (-) | (92.321) | (58.426) | |
| Marketing, sales and distribution expenses (-) | (918) | (628) | |
| General administrative expenses (-) | (77.171) | (79.680) | |
| Other operating income | 64.244 | 31.954 | |
| Other operating expenses (-) | (46.419) | (3.444) | |
| Operating profit | 781.145 | 404.715 | |
| Income from investing activities Impairment gains (losses) and reversals of impairment |
12 | 496.865 | 423.223 |
| losses determined in accordance with TFRS 9 | (3.740) | - | |
| Operating profit before financial income and expense | 1.274.270 | 827.938 | |
| Financial income / (expenses) | - | - | |
| Profit before tax from continued operations | 1.274.270 | 827.938 | |
| Tax expense from continuing operations | (216.274) | (165.965) | |
| - Current tax expense (-) | 13 | (245.613) | (190.576) |
| - Deferred tax income / (expense) (-) | 13 | 29.339 | 24.611 |
| Net profit for the period | 1.057.996 | 661.973 | |
| Other comprehensive income /(expense) | (8.117) | (2.833) | |
| Total other comprehensive income not to be classified | |||
| to profit or loss in subsequent years | |||
| Gains / (losses) on remeasurements of defined benefit | |||
| plans | (10.146) | (3.541) | |
| Gains / (losses) on remeasurements of defined benefit | |||
| plans, tax effect | 2.029 | 708 | |
| Total comprehensive income | 1.049.879 | 659.140 | |
| Earnings per 100 share | |||
| - common stock (TL) | 14 | 6,938 | 4,341 |
(Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
| Other comprehensive income/expense not to be reclassified to profit or loss |
Retained earnings | ||||||
|---|---|---|---|---|---|---|---|
| Paid in capital |
Adjustment to capital |
Actuarial (loss) / gain fund for employment termination benefit |
Restricted reserve |
Retained earnings |
Net profit for the period |
Total equity |
|
| Balances as of January 1, 2021 | 152.500 | 3.579 | (3.728) | 137.390 | 5.463.512 | 1.810.379 | 7.563.632 |
| Net profit for the period Other comprehensive income/ (loss) |
- - |
- - |
- (2.833) |
- - |
- - |
661.973 - |
661.973 (2.833) |
| Total comprehensive income/ (loss) | - | - | (2.833) | - | - | 661.973 | 659.140 |
| Transfers | - | - | - | - | 1.810.379 | (1.810.379) | - |
| Balance as of March 31, 2021 | 152.500 | 3.579 | (6.561) | 137.390 | 7.273.891 | 661.973 | 8.222.772 |
| Balance as of January 1, 2022 | 152.500 | 3.579 | (3.677) | 137.390 | 7.273.891 | 3.004.002 | 10.567.685 |
| Net profit for the period Other comprehensive income/ (loss) |
- - |
- - |
(8.117) | - - |
- - |
1.057.996 - |
1.057.996 (8.117) |
| Total comprehensive income/ (loss) | - | - | (8.117) | - | - | 1.057.996 | 1.049.879 |
| Transfers | - | - | - | - | 3.004.002 | (3.004.002) | - |
| Balances as of March 31, 2022 | 152.500 | 3.579 | (11.794) | 137.390 | 10.277.893 | 1.057.996 | 11.617.564 |
| January 1 – January 1 – Notes March 31, 2022 March 31, 2021 A. Cash flows from operating activities 371.212 612.543 Profit for the period from the continuing operations 1.057.996 661.973 Adjustments to reconcile profit for the period Adjustments to depreciation and amortization 66.802 36.974 Adjustments for provisions 9 139.044 117.039 - Adjustments for sectoral provisions 9 152.601 96.046 - Adjustments for debt provisions 9 (11.396) 5.862 - Adjustments for provisions for employee benefits 9 (2.161) 15.131 Adjustments for recognition impairment of inventory (48.913) - Adjustments for tax expense 13 216.274 165.965 Adjustments for interest expenses 4.341 1.871 Adjustments for interest income (460.265) (244.044) |
Reviewed | ||
|---|---|---|---|
| Adjustments for loss / (gains) arising from disposal of tangible assets | - | (1) | |
| Total adjustments (82.717) 77.804 |
|||
| Decrease in trade receivables (212) (97) |
|||
| Increase in other receivables from related parties (86.213) 31.782 |
|||
| Increase in other receivables (23.164) 5.504 |
|||
| Increase in inventories 5 (51.964) (5.791) |
|||
| Increase in prepaid expenses (47.565) (10.592) |
|||
| Decrease in trade payables (47.281) (7.382) |
|||
| Increase in other payables 8.332 7.837 |
|||
| (Decrease) / increase in payables related to employee benefits 16.174 (7.268) |
|||
| (Increase) / decrease in other assets related to activities 2.745 (9.301) |
|||
| Increase in other liabilities related to activities 1.092 1.113 |
|||
| Payments for employee retirement benefits 9 (1.279) (1.716) |
|||
| Tax paid 13 (368.671) (128.806) |
|||
| Payments related to other provisions 9 (6.061) (2.517) |
|||
| Net cash from operating activities (604.067) (127.234) |
|||
| B. Cash flows from investing activities (4.174.428) 138.727 |
|||
| Cash outflows from purchase of tangible assets 6, 7 (93.252) (77.388) |
|||
| Cash outflows from purchase of intangible assets 8 (362) (2.221) |
|||
| Cash inflows from the sale of tangible and intangible assets 6, 7 15.569 3 |
|||
| Interest received 301.834 219.988 |
|||
| Changes in financial investments (4.390.636) 270 |
|||
| Cash outflows related to lease liabilities (-) (7.581) (1.925) |
|||
| C. Net cash from financing activities - - |
|||
| Net increase in cash and cash equivalents (3.803.216) 751.270 |
|||
| Cash and cash equivalents at the beginning of the year 3 8.846.843 5.897.362 |
|||
| Cash and cash equivalents at the end of the year 3 5.043.627 6.648.632 |
Notes to the condensed financial statements for the period ended March 31, 2022 (All amounts are expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
Koza Altın İşletmeleri A.Ş. ("Koza Altın" or the "Company") was established on September 6, 1989 under the name of Eurogold Madencilik A.Ş. for the operation of the gold mine in Ovacık-Bergama, İzmir. Its name was changed to Normandy Madencilik A.Ş. ("Normandy Madencilik") with regard to the purchase of all shares of Eurogold Madencilik A.Ş. by Normandy Mining Ltd.
The name of the Company was registered as Koza Altın İşletmeleri A.Ş. on August 29, 2005 after ATP İnşaat ve Ticaret A.Ş. ("ATP"), a subsidiary of Koza İpek Holding A.Ş. ("Koza İpek Holding") acquired all shares of Normandy Madencilik from Autin Investment on March 3, 2005.
As of March 31, 2022, including the stocks traded in Borsa Istanbul ("BIST"), 45.01% of the Company's shares owned by ATP and 24.99% owned by Koza İpek Holding (December 31, 2021: 45.01% owned by ATP and 24.99% by Koza İpek Holding), the Company management was transferred to the Board of Trustees, pursuant to the decision of Ankara 5th Criminal Court of Peace, dated October 26, 2015, and subsequently transferred to the Savings Deposit Insurance Fund ("SDIF") on September 22, 2016. As of March 31, 2022, shares corresponding to 30% of the Company's shares (December 31, 2021: 30%) are traded on BIST.
Within the scope of the investigations initiated throughout the country, a trustee has been appointed to the Koza Altın İşletmeleri A.Ş. management pursuant to the decision of the Ankara 5th Criminal Judgeship of Peace dated October 26, 2015.
As of this date, all the authories of the management have been transferred to the trustees appointed to the management of Koza Altın İşletmeleri A.Ş. and it has been decided to establish new management by these trustees.
With the Decree Law No. 674 on Making Some Regulations under the State of Emergency ("Decree") published on September 1, 2016, it was decided to transfer all the powers previously given to the trustees assigned to companies by the courts to the Savings Deposit Insurance Fund ("SDIF"). In this context, on September 22, 2016, it has decided to terminate all the powers given to the trustees assigned to Koza Altın İşletmeleri A.Ş. on the basis of the article 19/1 of the aforementioned Decree and transfer Koza Altın İşletmeleri A.Ş. to the SDIF.
The Company's financial statements for the years ended December 31, 2016, 2017, 2018, 2019, 2020 and 2021 have been approved by the Board of Directors with the board decisions dated April 24, 2018, April 30, 2018, February 28, 2019, February 27, 2020, March 1, 2021 and March 1, 2022 respectively and published by excluding the possible cumulative effects of the works and transactions belonging to the previous financial periods, whose judgment process continues, in accordance with the provisions of Article 401/4 of the Turkish Commercial Code No. 6102 ("TCC"). Audited financial statements for the year ended December 31, 2015 were not approved by the Board of Directors in accordance with the provisions of Article 401/4 of the TCC. Ordinary general assembly meetings of the Company for the years 2015, 2016, 2017, 2018, 2019, 2020 and 2021 as explained in detailed in Note 9, could not be carried out due to various examinations and works by the Prosecutor's Office, the Police Financial Crimes Branch and the CMB, and these financial statements of the Company could not be submitted to the approval of the General Assembly.
The main activities of the Company are operating seven mines in five regions which are Ovacık-Bergama-İzmir, Çukuralan-İzmir, Kaymaz-Eskişehir, Mastra- Gümüşhane and Himmetdede-Kayseri, searching for gold mines generally in Turkey regions and improving the mine fileds of ongoing projects.
The Company sales consist gold dore bars with a right of first refusal to domestic banks on consignment to be sold to the Central Bank of the Republic of Turkey and silver to a domestic refinery on consignment. Due to the fact that the sales are made on demand and the customer is corporate, the Company effectively manages the receivable risk, taking into account the past experiences.
The Company has established UK based Koza Ltd., which owns 100%, in order to establish abroad mining ventures on March 31, 2014. The control of Koza Ltd, which the Company was consolidated until September 11, 2015, was lost as a result of the General Assembly held on September 11, 2015. The legal process initiated by the CMB regarding loss of control pursuant to decision dated February 4, 2016 continues as of the date of this financial statements. Under condensed financial statements, the Company has presented Koza Ltd. under the "Financial Investments" account with a cost value amounting to 218.325 thousand TL (December 31, 2021: 218.325 thousand TL).
As of March 31, 2022, the number of employees is 2.624 people (December 31, 2021: 2.664).
The registered address of the Company is below: Uğur Mumcu Mahallesi, Fatih Sultan Mehmet Bulvarı, İstanbul Yolu 10. Km, No: 310, 06370, Yenimahalle - Ankara, Türkiye.
The condensed financial statements dated March 31, 2022 were approved by the Board of Directors and authorized to be published on April 29, 2022.
The Company and its subsidiaries established in Turkey, prepare its financial statements in accordance with the Turkish Commercial Code (TCC) numbered 6102, tax legislation and the Uniform Chart of Accounts published by the Ministry of Finance.
The accompanying condensed financial statements are prepared in accordance with the requirements of Capital Markets Board ("CMB") Communiqué Serial II, No: 14.1 "Basis of Financial Reporting in Capital Markets", which were published in the Resmi Gazete No:28676 on June 13, 2013. The accompanying condensed financial statements are prepared based on the Turkish Financial Reporting Standards and Interpretations ("TAS/TFRS") that have been put into effect by the Public Oversight Accounting and Auditing Standards Authority ("POA").
The condensed financial statements and notes are presented in accordance with the "2019 TAS Taxonomy" announced by the POA with the principle decision dated June 7, 2019.
The condensed consolidated financial statements are based on legal records and expressed in TL, and have been prepared by subjecting to some corrections and classification changes in order to present the Company's status according to TAS and TFRS. These adjustments generally consist of deferred taxes, provisions, depreciation of tangible assets and intangible asset amortization on economic life and pro-rata basis, and the valuation of buildings, investment properties and some financial assets.
Notes to the condensed financial statements for the period ended March 31, 2022 (All amounts are expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
Condensed financial statements are presented in TL, which is the functional and presentation currency of the Company.
Foreign currency transactions have been converted over the exchange rates valid on the dates of the transaction. Monetary assets and liabilities based on foreign currency are converted using the exchange rates valid on the date of the statement of financial position. Exchange difference income or expense arising from foreign currency-based operational transactions (trade receivables and debts) is presented under the "other income / expenses from operating activities", while the exchange difference income or expense arising from the translation of other foreign currency based monetary assets and liabilities is presented under "finance income / expenses" in the statement of profit or loss.
In the statement made by the Public Oversight, Accounting and Auditing Standards Authority on January 20, 2022, the cumulative change in the general purchasing power of the last three years according to the Consumer Price Index (CPI) is 74.41% and it has been stated that there is no need to make any adjustments within the scope of the Reporting Standard TAS 29 Financial Inflationary Economies in 2021 financial statements. In this respect, while preparing the financial statements as of 31 March2022, no inflation adjustment was made according to TAS 29.
With the "Law Amending the Tax Procedure Law and the Corporate Tax Law", which was accepted on the agenda of the Turkish Grand National Assembly on January 20, 2022, the application of inflation accounting was postponed starting from the balance sheet dated December 31, 2023.
The Company has prepared its condensed financial statements according to the going concern principle.
The Company has prepared its interim condensed financial statements for the period ending on March 31, 2022, in accordance with the CMB's Communiqué Serial: II-14.1 and its announcements clarifying this communiqué. The condensed financial statements and notes are presented in accordance with the formats recommended by CMB and including the required information.
Accounting policy changes arising from the implementation of a new TAS / TFRS for the first time are applied retrospectively or prospectively in accordance with the transition provisions of the TAS / TFRS, if any. If there is no transition requirement, significant optional changes in accounting policies or detected accounting errors are applied retrospectively and the financial statements of the previous period are restated.
Changes in accounting estimates are applied in the current period when the change is made if they are related to only one period, and if they are related to future periods, they are applied both in the period of change and prospectively.
Notes to the condensed financial statements for the period ended March 31, 2022 (All amounts are expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
The amendments did not have an impact on the financial position or performance of the the Company.
The Company is in the process of assessing the impact of the amendments on financial position or performance of the Company.
The Company is in the process of assessing the impact of the amendments / improvements on financial position or performance of the Company.
Notes to the condensed financial statements for the period ended March 31, 2022 (All amounts are expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
Interim financial statements for the period ending on March 31, 2022 have been prepared in accordance with TAS 34 standard for the preparation of interim financial statements of TAS / TFRS.
The interim financial statements for the period ending on March 31, 2022 have been prepared by applying accounting policies consistent with the accounting policies applied during the preparation of the financial statements for the year ending on December 31, 2021. Therefore, these interim financial statements should be evaluated together with the financial statements for the year ended December 31, 2021.
In the preparation of consolidated financial statements, the Company management requires the use of estimates and assumptions that may affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and the amounts of income and expenses reported during the accounting period. Accounting judgments, estimates and assumptions are continuously evaluated by considering past experience, other factors and reasonable expectations about future events under current conditions. Necessary corrections are made and presented in the profit or loss statement in the period when it realized. Although these estimates and assumptions are based on management's best knowledge of current events and transactions, actual results may differ from their assumptions.
a) Mining assets consists of mine site development costs, mining rights, mining lands, deferred stripping costs and discounted costs associated with the improvement, rehabilitation and closure of mine sites. Mining assets are accounted in the consolidated financial statements with their net book value after deducting the accumulated depreciation and permanent impairment, if any, from their acquisition costs. Mining assets start to be amortized on a production basis according to producible ore reserve with the commencement of production. The depreciation expenses of the mining assets are associated with the production costs on the basis of the relevant mining sites.
Within the scope of long-term plan studies, which are regularly updated, the Company conducts studies to determine the remaining reserves of mining assets, revising the possible effects of production-based depreciation calculations, and rehabilitation provisions within this scope.
The Company management reviews the estimates made in relation to the visible and probable mineral reserves in each balance sheet period. In certain periods, the Company management has independent professional valuation companies make valuation studies in accordance with the Australian Exploration Results, Mineral Resources and Gold Reserves 2012 Standards ("JORC") to determine the amount of visible, possible and probable mineral reserves and It is updated by or under the supervision of persons who have the competencies specified in. As of December 31, 2021, the aforementioned reserve and resource amounts were updated by the independent professional valuation Company "SRK Consulting" in line with the "JORC" standards.
Within the scope of these studies, the assumptions and methods used in determining the mineral reserves contain some uncertainties (such as gold prices, exchange rates, geographic and statistical variables), and the assumptions and methods developed in relation to the mineral reserve may change significantly depending on the availability of new information. The cost and depreciation of mining assets are adjusted prospectively based on these updates.
Notes to the condensed financial statements for the period ended March 31, 2022 (All amounts are expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
The impairment tests performed by the Company management depend on the management's estimates about the future gold prices, current market conditions, exchange rates and pre-tax discount rate together with the relevant project risk. The recoverable value of the cash-generating units is determined as the higher one from the use value of the relevant cash-generating unit or its fair value after deducting sales costs. These calculations require the use of some assumptions and estimates. Changes in assumptions and estimates based on gold prices may affect the useful life of mines, and conditions may arise that may require adjustment on the carrying values of both goodwill and related assets.
Assets are grouped as independent and smallest cash generating units. If an impairment indicator is determined, estimates and assumptions are established for the cash flows to be obtained from each cash-generating unit determined. Impairment tests of both tangible assets and goodwill contain a certain amount of uncertainty due to the estimates and assumptions used. This uncertainty arises from the amount of visible and possible workable gold reserves used, current and future predicted gold prices, discount rates, exchange rates and estimated production costs.
c) Amount of provisions reflected in consolidated financial statements regarding environmental rehabilitation, improvement of mine sites and closure of mine sites is based on the plans of the Company management and the requirements of the relevant legal regulations. Changes in the aforementioned plans and legal regulations, up-to-date market data and prices, discount rates used, changes in estimates based on mineral resources and reserves may affect provisions.
As of March31, 2022, the Company reassessed the provision amounts due to changes in discount rates, costs, production areas subject to rehabilitation and reserve lifetimes. The Company evaluates the mine rehabilitation provision annually.
Notes to the condensed financial statements for the period ended March 31, 2022 (All amounts are expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
Significant estimates and assumptions are made in determining the provision for mine rehabilitation due to the large number of factors that may affect the final liability to be paid. These factors include estimates of the scope and cost of rehabilitation activities, technological changes, changes in regulations, cost increases proportional to inflation rates and changes in net discount rates (March31, 2022: 0,20%, December 31, 2021: 0.07%). These uncertainties may cause future expenditures to differ from the amounts estimated today.
The provision amount at the reporting date represents the best estimate of the present value of future rehabilitation costs. Changes in estimated future costs are accounted in the balance sheet by increasing or decreasing the rehabilitation obligation or asset if the initial estimate was initially recognized as part of an asset measured in accordance with TAS 16 Property, plant and equipment. Any reduction in the rehabilitation obligation and hence any reduction in the rehabilitation asset cannot exceed the carried value of that asset. In case of excess, the amount exceeding the carried value is immediately taken to profit or loss.
Notes to the condensed financial statements for the period ended March 31, 2022 (All amounts are expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
| March 31, 2022 | December 31, 2021 | |
|---|---|---|
| Cash Banks |
192 | 186 |
| - Demand deposits | 1.664 | 1.674 |
| - Time deposits | 5.092.015 | 8.883.622 |
| Total | 5.093.871 | 8.885.482 |
| Less: Interest accruals | (50.244) | (38.639) |
| Cash and cash equivalents presented in the cash flow statement |
5.043.627 | 8.846.843 |
The details of the Company's time deposits as of March 31, 2022 are as follows;
| Currency | Interest rate | Maturity | Currency amount | TL Equivalent |
|---|---|---|---|---|
| TL | %14,00 - %19,00 | 1-30 Days | 5.092.015 | 5.092.015 |
| Total | 5.092.015 |
The details of the Company's time deposits as of December 31, 2021 are as follows;
| Currency | Interest rate | Maturity | Currency amount | TL Equivalent |
|---|---|---|---|---|
| TL USD |
%14,00 - %22.50 %0,75 - %1,23 |
1-30 Days 1-30 Days |
8.082.300 61.747 |
8.082.300 801.322 |
| Total | 8.883.622 |
The Company's blocked deposits of 69.033 TL have been presented under financial investments account (December 31, 2021: 68.244 TL).
The financial investments of the Company as of March 31, 2022 and December 31, 2021 are as follows;
| March 31, 2022 | December 31, 2021 | |||
|---|---|---|---|---|
| Shares in subsidiaries (*) | 218.753 | 218.753 | ||
| Blocked deposits | 69.033 | 68.244 | ||
| Financial assets measured at amortised cost | 4.536.674 | - | ||
| Total | 4.824.460 | 286.997 | ||
| Financial assets | Interest Rate | Maturity | Currency | Total Amount |
| Bond | %18,70 - %23,86 | 322 – 378 Days | TL | 4.014.466 |
| Security Bond | %17,70 - %30,89 | 32 - 581 Days | TL | 522.208 |
| Toplam | 4.536.674 |
(*) With the decisions taken at the General Assembly meeting held on September 11, 2015 and the amendment of the articles of association on the same date of Koza Ltd. which is the subsidiary of the Company with 100% share, two A Group shares each worth 1 GBP ("GBP") and the control has transferred to A Group shareholders. Pursuant to the amendment to the articles of association made as of September 11, 2015, savings regarding all operational and managerial activities of Koza Ltd., decision and approval of the articles of association, approval of liquidation transactions and share transfer transactions, etc. rights are given to directors. As a result of the mentioned changes, the Company has lost the control over Koza Ltd. and Koza Ltd. was excluded from the scope of consolidation. It has been accounted in the financial statements at cost since the date the control has ended. As of the report date, fair value measurement could not be calculated due to uncertainties arising from the ongoing legal processes about Koza Ltd.
A legal process has been initiated by the CMB with the decision dated February 4, 2016 regarding the General Assembly and the resolutions taken, in cases where the final judicial decisions regarding this decision differ from the initially recorded amounts, these differences will be accounted in the period determined.
The inventories of the Company as of March 31, 2022 and December 31, 2021 are as follows;
| March 31, 2022 | December 31, 2021 | |
|---|---|---|
| Gold and silver in the production process and gold and | ||
| silver bars | 103.739 | 144.592 |
| Ready to be processed and mined ore clusters | 160.668 | 95.046 |
| Chemicals and operating materials | 103.052 | 94.088 |
| Spare parts (*) | 159.451 | 141.220 |
| Provision for inventory impairment (-) | - | (48.913) |
| Total | 526.910 | 426.033 |
(*) Spare parts are used for the ongoing operations of the gold mines that continue their operations.
The movements of the provision for inventory impairment is as follows:
| 2022 | 2021 | |
|---|---|---|
| January 1 | 48.913 | - |
| Additions / (cancellations), net (9,15) | 27.595 | - |
| Provisions no longer required | (76.508) | - |
| Total | - | - |
The investment properties of the Company as of March 31, 2022 and 2021 are as follows;
| January 1, 2022 | Additions | Disposals | March 31, 2022 |
|---|---|---|---|
| 130.540 | - | - | 130.540 |
| 130.540 | - | - | 130.540 |
| 15.001 | 592 | - | 15.593 |
| 15.001 | 592 | - | 15.593 |
| 115.539 | 114.947 | ||
| January 1, 2021 | Additions | Disposals | March 31, 2021 |
| 130.540 | - | - | 130.540 |
| 130.540 | - | - | 130.540 |
| 12.635 | 649 | - | 13.284 |
| 12.635 | 649 | - | 13.284 |
| 117.256 | |||
| 117.905 |
Depreciation expenses are accounted under general administrative expenses.
Total rental income from investment properties is in 302 thousand TL in 2022. (2021: 861 thousand TL).
Investment properties amounting of thousand TL 89.978 in the buildings are located in United Kingdom and members of the İpek Family live in these apartments. The lease agreement has not been signed due to the current legal processes. When the legal processes are end, the necessary evaluations will be made
by the Company management in accordance with the market practices. Investment properties amounting of thousand TL 22.062 in the buildings consist of dormitory buildings in Gümüşhane and Bergama. There isn't any rental agreement. As of March 31, 2022, there are annotations placed by the General Directorate of National Real Estate on the Company's domestic real estate properties.
The property, plant and equipment of the Company as of March 31, 2022 and December 31, 2021 are as follows:
| March 31, 2022 | December 31, 2021 | |
|---|---|---|
| Mining assets Other tangible assets |
404.066 565.929 |
393.080 559.037 |
| Total | 969.995 | 952.117 |
As of March 31,2022 and December 31, 2021, mining assets consists of mining rights, mine site development costs, deferred stripping costs, mining lands, and closing and rehabilitation of mines, and the net book values of these mining assets are as follows.
| March 31, 2022 | December 31, 2021 | |
|---|---|---|
| Lands | 14.193 | 30.889 |
| Mine site development cost | 237.686 | 220.470 |
| Deferred stripping costs | 24.072 | 14.313 |
| Rehabilitation of mining facility | 67.474 | 66.764 |
| Mining rights | 60.641 | 60.644 |
| Total | 404.066 | 393.080 |
The movements of mining assets are as follows;
| January 1, 2022 | Additions | Disposals | March 31, 2022 | |
|---|---|---|---|---|
| Cost | ||||
| Lands | 73.696 | - | (15.569) | 58.127 |
| Mine site development cost | 584.884 | 30.205 | - | 615.089 |
| Deferred stripping costs | 278.899 | 15.941 | - | 294.840 |
| Rehabilitation of mining facility | 331.055 | 17.950 | - | 349.005 |
| Mining rights | 74.005 | - | - | 74.005 |
| Total | 1.342.539 | 64.096 | (15.569) | 1.391.066 |
| Accumulated depreciation | ||||
| Lands | 42.807 | 1.127 | - | 43.934 |
| Mine site development cost | 364.415 | 12.989 | - | 377.404 |
| Deferred stripping costs | 264.586 | 6.182 | - | 270.768 |
| Rehabilitation of mining facility | 264.290 | 17.241 | - | 281.531 |
| Mining rights | 13.361 | 2 | - | 13.363 |
| Total | 949.459 | 37.541 | - | 987.000 |
| Net book value | 393.080 | 404.066 |
Notes to the condensed financial statements for the period ended March 31, 2022 (All amounts are expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
| January 1, 2021 | Additions | March 31, 2021 | |
|---|---|---|---|
| Cost | |||
| Lands | 70.546 | 2.199 | 72.745 |
| Mine site development cost | 451.048 | 17.234 | 468.282 |
| Deferred stripping costs | 263.994 | 5.102 | 269.096 |
| Rehabilitation of mining facility | 231.133 | 6.547 | 237.680 |
| Mining rights | 50.765 | - | 50.765 |
| Total | 1.067.486 | 31.082 | 1.098.568 |
| Accumulated depreciation | |||
| Lands | 38.216 | 1.351 | 39.567 |
| Mine site development cost | 328.009 | 8.006 | 336.015 |
| Deferred stripping costs | 252.676 | 2.195 | 254.871 |
| Rehabilitation of mining facility | 209.015 | 3.787 | 212.802 |
| Mining rights | 13.349 | 3 | 13.352 |
| Total | 841.265 | 15.342 | 856.607 |
| Net book value | 226.221 | 241.961 |
Depreciation expenses are accounted under the cost of goods sold.
There isn't any mortgage on mining assets as of March 31, 2022 (December 31, 2021: None).
The costs of the lands, mining rights and mine site development costs of the Company, which have been fully depreciated as of March 31, 2022, but are in use, are amounting to TL 115.800. (March 31, 2021: TL 105.635).
Notes to the condensed financial statements for the period ended March 31, 2022 (All amounts are expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
Movements of other tangible assets during the period as of March 31, 2022 and 2021 are as follows;
| January 1, 2022 | Additions | Disposals | Transfers | March 31, 2022 | |
|---|---|---|---|---|---|
| Cost | |||||
| Land, buildings and land | |||||
| improvements | 331.259 | 2.836 | - | 6.227 | 340.322 |
| Machinery and equipment | 820.235 | 14.770 | - | 3.988 | 838.993 |
| Motor vehicles | 154.347 | 266 | (746) | - | 153.867 |
| Furnitures and fixtures | 84.622 | 3.520 | (11) | 274 | 88.405 |
| Construction in progress | 45.562 | 7.764 | (10.489) | 42.837 | |
| Total | 1.436.025 | 29.156 | (757) | - | 1.464.424 |
| Accumulated depreciation | |||||
| Buildings and land improvements | 170.705 | 3.778 | - | - | 174.483 |
| Machinery and equipment | 579.968 | 9.444 | - | - | 589.412 |
| Motor vehicles | 77.154 | 6.289 | (746) | - | 82.697 |
| Furnitures and fixtures | 49.161 | 2.745 | (3) | - | 51.903 |
| Total | 876.988 | 22.256 | (749) | - | 898.495 |
| Net book value | 559.037 | 565.929 |
There isn't any mortgage on other tangible assets as of March 31, 2022 (December 31, 2021: None).
As of March 31, 2022, the insurance amount on the tangible assets and inventories of the Company is TL 37.597 (March 31, 2021: TL 225.194).
The cost of other tangible assets of the Company, which have been fully depreciated as of March 31, 2022, but are in use, is amounting to TL368.152. (March 31, 2021: TL 358.732).
There are no financing expenses capitalized on property, plant and equipment.
Notes to the condensed financial statements for the period ended March 31, 2022 (All amounts are expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
| January 1, 2021 | Additions | Disposals | March 31, 2021 | |
|---|---|---|---|---|
| Cost | ||||
| Land, buildings and land improvements | 298.592 | 760 | - | 299.352 |
| Machinery and equipment | 741.627 | 13.822 | - | 755.449 |
| Motor vehicles | 101.524 | 12.189 | - | 113.713 |
| Furnitures and fixtures | 65.724 | 2.341 | (5) | 68.060 |
| Construction in progress (*) | 15.763 | 17.193 | - | 32.956 |
| Total | 1.223.230 | 46.305 | (5) | 1.269.530 |
| Accumulated depreciation | ||||
| Buildings and land improvements | 154.586 | 4.307 | - | 158.893 |
| Machinery and equipment | 540.463 | 8.939 | - | 549.402 |
| Motor vehicles | 54.717 | 4.283 | - | 59.000 |
| Furnitures and fixtures | 40.211 | 1.855 | (3) | 42.063 |
| Total | 789.977 | 19.384 | (3) | 809.358 |
| Net book value | 433.253 | 460.172 |
As of March 31, 2022, and December 31, 2021, the details of the Company's intangible assets are as follows:
| March 31, 2022 | December 31, 2021 | |
|---|---|---|
| Goodwill related to Newmont Altın purchase | 11.232 | 11.232 |
| Total | 11.232 | 11.232 |
The Company purchased 99.84% of Newmont Altın's shares in order to gain competitive advantage and create synergy by benefiting from the mining fields owned by Newmont Altın on June 28, 2010, in accordance with the "Share Purchase Agreement" with Newmont Overseas and Canmont. As of the same date, control of Newmont Altın was transferred to Koza Altın.
Koza Altın has paid 538 thousand USD and 2.462 thousand USD, which constitute part of the total purchase price of 8.500 thousand US dollars, for 99.84% Newmont Altın shares, on June 28, 2010 and July 2, 2010, respectively. The remaining 5.500 thousand USD of the purchase price, 3.000 thousand USD will be paid after the start of the Diyadin project, which is planned for at least one year after the balance sheet date, and the remaining 2.500 thousand USD will be paid one year after the second payment.
Notes to the condensed financial statements for the period ended March 31, 2022 (All amounts are expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
As of March 31, 2022, it is highly probable that a sufficient amount of visible and probable reserves will be found in the mentioned mine sites in the coming years according to the estimates of the gold price made by the management, geological and geochemical studies and expert reports. As a result of these evaluations, no impairment is expected in the goodwill arising from the acquisition of Newmont Altın as of March 31, 2022.
The details of the Company's other intangible assets as of March 31, 2022 and 2021 are as follows:
| January 1, 2022 | Additions | March 31, 2022 | |
|---|---|---|---|
| Cost | |||
| Rights | 15.717 | 362 | 16.079 |
| Total | 15.717 | 362 | 16.079 |
| Accumulated depreciation | |||
| Rights | 11.738 | 561 | 12.299 |
| Total | 11.738 | 561 | 12.299 |
| Net book value | 3.979 | 3.780 | |
| January 1, 2021 | Additions | March 31, 2021 | |
| Cost | |||
| Rights | 11.121 | 2.221 | 13.342 |
| Total | 11.121 | 2.221 | 13.342 |
| Accumulated depreciation | |||
| Rights | 10.028 | 285 | 10.313 |
| Total | 10.028 | 285 | 10.313 |
| Net book value | 1.093 | 3.029 |
As of March 31, 2022 and December 31, 2021, the details of the Company's provisions, contingent assets and liabilities are as follows:
| March 31, 2022 | December 31, 2021 | |
|---|---|---|
| State right expense provision Environmental rehabilitation, rehabilitation of mining sites |
438.819 | 320.010 |
| and mine closure provision | 60.672 | 54.218 |
| Provisions for lawsuit | 27.877 | 27.877 |
| Other provisions | 4.482 | 15.878 |
| Total | 531.850 | 417.983 |
| b) Long-term provisions |
||
| March 31, 2022 | December 31, 2021 | |
| Environmental rehabilitation, rehabilitation of mining sites | 294.876 | |
| and mine closure provision | 273.599 | |
| Total | 294.876 | 273.599 |
The movement table for environmental rehabilitation, rehabilitation of mining sites and provision for mine closure is as follows;
| 2022 | 2021 | |
|---|---|---|
| January 1 | 327.817 | 193.703 |
| Paid during the period | (6.061) | (2.517) |
| Discount effect | (628) | (385) |
| Effect of changes in estimates and assumptions | 36.079 | 194 |
| Additions / (cancellations), net | (1.659) | 25.702 |
| March 31 | 355.548 | 216.697 |
| March 31, 2022 | December 31, 2021 | |
|---|---|---|
| Provision for unused vacation Provision for personnel bonus |
23.022 10.326 |
14.558 22.879 |
| Total | 33.348 | 37.437 |
The movement of provision for unused vacation is as follows;
| 2022 | 2021 | |
|---|---|---|
| January 1 Additions / (cancellations), net |
14.558 8.464 |
10.059 2.626 |
| March 31 | 23.022 | 12.685 |
Notes to the condensed financial statements for the period ended March 31, 2022 (All amounts are expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
| March 31, 2022 | December 31, 2021 | |
|---|---|---|
| Provision for employee termination benefits | 55.867 | 42.798 |
| Total | 55.867 | 42.798 |
Under the Turkish Labour Law, the Company is required to pay employment termination benefits to each employee who has qualified for such benefits as the employment ended. Also, employees who are entitled to a retirement are required to be paid retirement pay in accordance with Law No: 2422 dated March 6, 1981 and No: 4447 dated August 25, 1999 and the amended Article 60 of the existing Social Insurance Code No: 506. Some transition provisions related to the pre-retirement service term were excluded from the law since the related law was changed as of May 23, 2002.
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 real rate net of expected effects of inflation. The severance pay ceiling is revised in every six months, and the ceiling amount of TL 10.848,59 TL (January 1, 2021: TL 7.638,96) as of April 1, 2022 was taken into consideration in the calculation of the provision for severance pay. TFRS requires actuarial valuation methods to be developed to estimate the provision for severance pay. Accordingly, the following actuarial assumptions were used in the calculation of the total liability:
| March 31, 2022 | December 31, 2021 | |
|---|---|---|
| Net discount rate | 4,17% | %4,17 |
| Turnover rate related the probability of retirement (rate of employees to remain to retirement) |
95,03% | %93,62 |
The movements of the provision for severance pay within the accounting periods of March 31, 2022 and 2021 are as follows:
| 2022 | 2021 | |
|---|---|---|
| January 1 | 42.798 | 34.384 |
| Interest cost | 2.274 | 1.117 |
| Service cost | 1.928 | 2.427 |
| Actuarial loss / (gain) | 10.146 | 3.542 |
| Severance paid | (1.279) | (1.716) |
| March 31 | 55.867 | 39.754 |
Liability of employment termination benefits is not subject to any funding as there isn't an obligation. Provision is calculated by estimating the present value of the future probable obligation of the Company arising from the retirement of the employees. TAS 19 "Employee Benefits" requires actuarial valuation methods to be developed to estimate the Company's obligation under the defined benefit plans. The following actuarial assumptions are used in the calculation of the total liability.
Notes to the condensed financial statements for the period ended March 31, 2022 (All amounts are expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
The sensitivity analysis of the important assumptions used in the calculation of the provision for employee termination benefits as of March 31, 2022 is as follows:
| Discount rate | Rate of retirement | |||
|---|---|---|---|---|
| 2022 | 100 basis point | 100 basis point | 100 basis point | 100 basis point |
| increase | decrease | increase | decrease | |
| Change in liability for severance pay |
(6.579) | 8.033 | 1.775 | (1.628) |
For the cancellation of the EIA positive decision issued for the Ovacık 3rd waste storage facility, the İzmir 3rd Administrative Court's case numbered 2017/1432 E. Was filed against the Ministry of Environment and Urbanization, and the Company intervened to the case. The court delivered a judgement of dismissal on March 12, 2020, in favor of the Company, which is open to appeal to the Council of State. It was appealed by the plaintiffs with a request for a stay of execution. As a result, with the decision dated 24.09.2020, the Council of State rejected the appeals of the plaintiffs on the merits in favor of our company, and decided to delivering the file to the local court for a procedural reason that did not affect the merits. The trial has ended and will not affect the company's operations.
For the cancellation of the EIA affirmative decision issued for the Ovacık gold mine in accordance with the provisions of the 2009/7 circular, Izmir 6th Administrative Court's case numbered 2017/1317 E. was filed against the Ministry of Environment and Urbanization and the Company intervened to the case. İzmir 6th Administrative Court rejected the case in favor of the Company in the case file numbered 2017/1317 E. The Council of State dismissed the appeal requests of the plaintiffs and decided to delivering the file to the local court for a procedural reason that did not affect the merits. In this respect, the trial continues and does not affects the activities of the Company. Therefore, the Company continues activities of production within the scope of the relevant EIA affirmative report.
The results of other lawsuits regarding the Ovacık gold mine are not such as to affect the Company's activities.
Notes to the condensed financial statements for the period ended March 31, 2022 (All amounts are expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
The Company has filed lawsuits in Eskisehir 1st Administrative Court numbered 2014/1084 E. and Eskişehir 1st Administrative Court numbered 2014/760 E. Requesting cancellation and stay of execution against the operations related to the cessation of operations in the agricultural lands of the Kaymaz gold mine located in the field bearing aregistration number of 43539 and 82567. Among these lawsuits, with respect to the lawsuit numbered 2014/760 E. İn Eskisehir 1st Administrative Court filed regarding the field with license number of İR 43539 and the lawsuit numbered 2014/1084 E. regarding the field with license number of İR 82567; the court ordered to the cancellation of proceedings subject to the case, with open appeal. Both cases were concluded in favor of the Company. Upon the appeal of the plaintiffs in both files, the Council of State ordered to suspend the execution of the court decisions. The trial proceedings are ongoing at the stage of rectification.
The Company intervened in the case along with the defendant Ministry of Environment and Urbanization which was filed for the cancellation and stay of execution of the EIA affirmative decision given regarding the 2nd Waste Storage Facility project planned to be made in the field site with the operation license number of 82567 and the dismissal of the case in favor of the company was given by the Eskişehir 1st Administrative Court, with the possibility of appeal. The plaintiffs appealed the files and the Council of State upheld both decisions of the Eskişehir 1st Administrative Court in favor of thecompany in the files numbered 2020/302 E. and 2020/350 E. of the Eskişehir 1st Administrative Court.
These lawsuits are related to the expansion of the activities in some licensed fields and / or the permits and licenses of the new areas to be operated.
A lawsuit numbered 2017/1656 E. was filed against the Ministry of Environment and Urbanization in İzmir 6th Administrative Court for the cancellation of the EIA affirmative report issued for the 3rd capacity increase Project of Çukuralan mining facility, and the Company intervened in the case. The court decided to cancel the act, which is the subject of the lawsuit, and as a result of the appeal examination by the Council of State, the decision of the local court was not correct and reversed the decision in favor of the company. While the trial was continuing at the İzmir 6th Administrative Court on the basis of the 2019/574 basis, the court decided to cancel act with the decision dated 23.02.2021. The decision has been appealed. A lawsuit has been filed in Izmir 6th Administrative Court with file 2019/1120 E. for the stay of execution and cancellation of the Environmental Impact Assessment (EIA) positive Decision given by the Ministry of Environment and Urbanization regarding the 3rd capacity increase 2009/7 project of Çukuralan Gold Mine Enterprise.Our company has been involved in the relevant case alongside the defendant Ministry. The previous case number and court of the relevant file is İzmir 3rd Administrative Court 2019/171 E. and due to its connection with the Çukuralan 3rd Capacity Increase file, the file's main record was closed by the decision of the 4th Administrative Case Division of the İzmir Regional Administrative Court and İzmir 3rd Administrative Court decided to send the file to İzmir 6th Administrative Court. While the related case was continuing with İzmir 6th Administrative Court no. 2019/1120 E., according to the decision of the court, the EIA positive decision, which was the subject of the case, was annulled and an appeal was made.At this point, according to the decision of the Council of State, it has been decided that it is not possible to apply two different EIA Positive decisions related to the same project together, since a second EIA Positive decision was made for the 2019/574 E. file regarding the project in question. It was decided by the Defendant Ministry that the EIA Positive decision, which is the subject of the case, should be accepted as implicitly withdrawn. Since it was concluded that the subject of the pending case was no longer relevant, the İzmir 6th Administrative Court decided that there was definitly no room for reversing the decision numbered 2019/574 E. In terms of the 2019/1120 E. file, it has been decided that there is no legal inaccuracy in the decision of the İzmir 6th Administrative Court regarding the cancellation of the action, which is the subject of the lawsuit, and that the appeal requests of our intervening company as well as the respondent Ministry and the respondent Ministry are rejected.
Notes to the condensed financial statements for the period ended March 31, 2022 (All amounts are expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
For the annulment of the decision given by the defendant administration that the EIA is not required, a lawsuit was filed at the Izmir 6th Administrative Court with the number 2020/1479 E for the Çukuralan Gold Mine Crushing and Screening Plant Project planned to be built by Koza Gold Operations Inc. in Çukuralan Site. The trial is ongoing. The trial are ongoing at the appeal process.
Regarding the 3rd capacity increase project of Çukuralan Gold Mine Plant planned to be carried out by our company, some plaintiffs have filed a lawsuit against the Ministry of Environment and Urbanization by some plaintiffs for the stay of execution and cancellation of the Environmental Impact Assessment (EIA) positive Decision given by the Ministry of Environment and Urbanization. A lawsuit was filed with the Administrative Court with the file numbered 2021/1407 E. and 2021/1013 E. Our company has been involved in the relevant case alongside the defendant ministry and the proceedings are still ongoing.
Currently, all of the production activities subject to court decisions regarding the Çukuralan Gold Mine Operation 3rd Capacity Increase Project, mining (production) activities continue in accordance with the relevant legislation within the scope of the new EIA Positive decision.
In the lawsuit filed for the annulment and suspension of the EIA positive decision regarding the S: 201001197 Gold and Silver Mine Project, which is planned to be made in the vicinity of Serçiler and Terziler villages in the central district of Çanakkale, the company intervenes with the Ministry of Environment and Urbanization. At the current stage, Çanakkale 1st Administrative Court decided to cancel the act subject to the lawsuit, an appeal was filed against the decision and the appeal process continues.
Legal actions has been initiated against the amendment in the main contract and establishment of privileged share as well as the board change with respect to London-based Koza Ltd., in which the Company owns 100% shares, and the legal process is ongoing before London courts. On the date of January 23, 2019, it has been decided by the 10th Commercial Court of First Instance of Ankara (case file number 2017/349 E) with an open appeal within two weeks from the notification date that 60.000.000 British Pounds shall be taken from the defendants to Koza Altın İşletmeleri A.Ş. as of September 1, 2015, together with the interest to be accrued according to the article 4 / a of the law numbered 3095. Following an appeal filed by the defendants against this court decision, the 21st Civil Chamber of Ankara Regional Court of Justice, which is the court of appeal, ordered to deem the defendants' request of appeal has not been filed for procedural reasons, with the decision numbered 2019/699 E. and 2019/1189 K. An appeal was filed by the defendants against this decision. The Court of Cassation decided to overturn the file for procedural reasons. With the additional decision of the Ankara 10th Commercial Court of First Instance, it has been decided that the appeal application of the defendants was not filed. The defendants appealed the decision. The appeal process continues.
As a result of the evaluations made by the CMB after the decision to appoint a trustee, the Company was instructed to file a liability lawsuit against previous board members for various reasons, and various liability lawsuits were filed against former managers on behalf of Ankara Commercial Courts, and the lawsuits are still pending. Lawsuits that may affect the activities of the Company are announced on the public disclosure platform in legal periods.
Notes to the condensed financial statements for the period ended March 31, 2022 (All amounts are expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
Pursuant to the decision of the 5th Criminal Court of Peace in Ankara, the management of the Company was transferred to the Board of Trustees and then to the Savings Deposit Insurance Fund ("SDIF") on September 22, 2016. The indictment issued by the Ankara Chief Public Prosecutor's Office regarding the events that led to the appointment of a trustee was accepted by the Ankara 24th High Criminal Court and their trial was initiated with the file number 2017/44 E. And the case was resolved by the court of first instance. It has been decided by the court of first instance to confiscate the Company shares that belonged to the previous board members who were judged. Until the decision is finalized, it has been decided that the above-described measure of appointing a trustee will be continued. The decision is not finalized yet. In the case file of the Ankara 24th High Criminal Court numbered 2017/44 E., it has been further ordered by the court that the actions be severed with respect to the former members of the board of directors who could not have been tried due to their nonappearance in court and that the judgement to be continued through this new file and the aforementioned measure of the appointment of trustees to be sustained until the end of the trial. The new file severed is registered in the number of 2020/20 E under the Ankara 24th High Criminal Court's jurisdiction. The trial is ongoing. The trial process continues in the case where Cafer Tekin İpek and Özlem Özdemir are accused in the case file of the Ankara 24th High Criminal Court numbered 2020/157 E.
As of March 31, 2022, the provision amount accounted for ongoing employee and other lawsuits against the Company is amounting to TL 27.877 Thousand (December 31, 2021: TL 27.877 Thousand).
The details of the letter of guarantees given by the Company as of March 31, 2022 and December 31, 2021 are as follows:
| March 31, 2022 | December 31, 2021 | |
|---|---|---|
| A. CPM's given on behalf of own legal entity | 36.124 | 51.974 |
| - Guarantee | 36.124 | 51.974 |
| - Mortgage | - | - |
| B. CPM's given in favor of partnerships which are fully consolidated | - | - |
| C. CPM's given for assurance of third parties debts in order to | ||
| conduct usual business activities | - | - |
| D. Total amount of other CPM's given | - | - |
| i. Total amount of CPM's given in favor of the parent company | - | - |
| ii. Total amount of CPM's given in favor of other group companies | ||
| which are not in scope of B and C | - | - |
| iii. Total amount of CPM's given on behalf of | ||
| third parties which are not in scope of C | - | - |
| Total | 36.124 | 51.974 |
Notes to the condensed financial statements for the period ended March 31, 2022 (All amounts are expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
The details of the Company's letter of guarantees received as of March 31, 2022 and December 31, 2021 are as follows:
| March 31, 2022 | December 31, 2021 | |
|---|---|---|
| Guarantee cheques | 984.289 | 872.253 |
| Guarantee letters | 119.432 | 107.777 |
| Security bonds | 127 | 127 |
| Total | 1.103.848 | 980.157 |
The 80% percentage of the income tax calculated on the social security employer's share and wages calculated for the Company's employees in the mine processing facility in Mastra-Gümüşhane, is covered by the Treasury within the scope of the Law No. 5084 on "Incentives for Investments and Employment and Making Amendments to Certain Laws". The Company also benefits from 5% insurance premium on employer's share incentive at all workplaces within the scope of "Social Insurance and General Health Insurance Law" numbered 5510.
As of March 31, 2022, the Company's paid-in capital is amounting to TL 152.500 Thousand (December 31, 2021: TL 152.500 Thousand) and consists of 15.250.000.000 shares with a nominal share value of 1 Kuruş (December 31, 2021: 15.250.000.000 units).
| March 31, 2022 | December 31, 2021 | ||||
|---|---|---|---|---|---|
| Share | Share | Share | Share | Share | |
| Equity | Group | Rate | amount | Rate | amount |
| ATP İnşaat ve Ticaret A.Ş. | A, B | 45,01 | 68.636 | 45,01 | 68.636 |
| Koza İpek Holding A.Ş. | A, B | 24,99 | 38.114 | 24,99 | 38.114 |
| Other | A | 30,00 | 45.750 | 30,00 | 45.750 |
| Total | 100 | 152.500 | 100 | 152.500 | |
| Capital adjustment differences | 3.579 | 3.579 | |||
| Paid-in capital | 156.079 | 156.079 |
Notes to the condensed financial statements for the period ended March 31, 2022 (All amounts are expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
The Board of Directors of the Company consists of six members and four of these six persons are elected by the general assembly from among the candidates nominated by (A) group registered shareholders, and two independent members from among the candidates nominated in the general assembly. At its meeting after each ordinary general assembly or each general assembly where members are elected, the board of directors elects a chairman and a vice chairman among the members representing the (A) group registered shareholders. Apart from this, (A) and (B) group shares do not have any other privileges. According to the decision of Ankara 5th Criminal Court of Peace dated October 26, 2015, trustees have been appointed to the Company, and a regulation has been made regarding the transfer of the powers of the trustees working in the companies that have been decided to be appointed to the SDIF by the judge or the court with the Decree No.674 on Making Some Regulations under the State of Emergency, published in the Resmi Gazete dated August 15, 2016. With the decision of Ankara 4th Criminal Judgeship dated September 6, 2016 and numbered 2016/4628 D, it was decided to terminate the duties of the trustees on the day the procedures for their trusteeship powers were completed. The board of directors was established by the SDIF with the decision of the SDIF Board dated September 22, 2016 and numbered 2016/206. For this reason, the privileges of the (A) and (B) share groups cannot be used.
Capital adjustment differences amounting to TL 3.579 Thousand (December 31, 2021: TL 3.579 Thousand), from the difference between the total amount of the Company's capital adjusted for inflation and the capital amount before the inflation correction of the Company, offsetting accumulated losses in 2006 and remaining after the transfer to the paid-in capital refers to the amount.
Public companies make their dividend distributions according to the CMB's "Dividend Communiqué" numbered II19.1, which entered into force as of February 1, 2014.
Unless the reserves that should be set aside according to the TCC and the dividend determined for the shareholders in the articles of association or in the profit distribution policy are reserved; it cannot be decided to allocate other reserves, to transfer profits to the next year, and to distribute dividends to dividend owners, members of the board of directors, company employees and persons other than shareholders, and no dividends can be distributed to these persons unless the dividend determined for shareholders is paid in cash.
The Company's restricted reserves are as follows:
| March 31, 2022 | December 31, 2021 | |
|---|---|---|
| Restricted reserves | 137.390 | 137.390 |
| Total | 137.390 | 137.390 |
According to the Turkish Commercial Code, legal reserves consist of first and second legal reserves. The TCC stipulates that the first legal reserve is appropriated out of statutory profits at the rate of 5% per annum, until the total reserve reaches 20% of the Company's paid-in share capital. The second legal reserve is 10% of the distributed profit in excess of 5% of the paid-in share capital. According to the Turkish Commercial Code, as long as the legal reserves do not exceed 50% of the paid-in capital, they can only be used to offset the losses, it is not possible to use them in any other way.
The details of the Company's revenue and cost of sales as of January 1 – March 31, 2022 and 2021 are as follows:
| January 1 – March 31, 2022 |
January 1 – March 31, 2021 |
|
|---|---|---|
| Domestic sales | 1.408.745 | 848.798 |
| Total sales | 1.408.745 | 848.798 |
| Cost of sales | (475.015) | (333.859) |
| Gross profit | 933.730 | 514.939 |
The distribution of the Company's revenues by product type as of January 1 – March 31, 2022 and 2021 are as follows:
| January 1 – March 31, 2022 |
January 1 – March 31, 2021 |
|
|---|---|---|
| Sales of gold bars Sales of silver bars Other |
1.404.260 4.483 2 |
844.633 4.165 - |
| Total | 1.408.745 | 848.798 |
| January 1 – March 31, 2022 |
January 1 – March 31, 2021 |
|
|---|---|---|
| Interest income | 460.265 | 244.044 |
| Foreign exchange income | 28.465 | 179.178 |
| Other | 8.135 | 1 |
| Total | 496.865 | 423.223 |
Notes to the condensed financial statements for the period ended March 31, 2022 (All amounts are expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
Corporate tax is applied on taxable corporate income, which is calculated from the statutory accounting profit by adding back non-deductible expenses, dividend income from domestic companies, other exempt income and investment incentives utilized.
The effective tax rate applied in 2022 is 23% (2021: 25%).
20% tax rate that is specified in the first paragraph of Article 32 of the Corporate Tax Law No. 5520 and the Law No. 7061 "Amending Some Tax Laws and Some Other Laws" adopted on November 28, 2018 will be applied as 22% for corporate earnings for the 2018, 2019 and 2020 taxation periods has been added with a provisional article. Also with the same regulation and stated in 5520 numbered Law No, 5, 75% of exemption from corporate tax rate the profits arising from the sale of real estates (immovables) which is in assets for at least two full years has been changed to 50%.
In Turkey, tax returns are filed on a quarterly basis. Corporate income tax rate applied in 2022 is 23%. Losses can be carried forward for offset against future taxable income for up to 5 years. However, losses cannot be carried back for offset against profits from previous periods.
In the deferred tax calculation for the period of 1 January-31 December 2021; Deferred tax assets or liabilities, which are included in the measurement heading of TAS-12 "Income Taxes" standard, are based on tax rates (and tax laws) that are in force as of the end of the reporting period (and tax laws), which are expected to be applied in the periods when assets are converted into income or liabilities are paid.As per the provision above; the rates 23% for short-term assets and liabilities and 22% for longterm assets and liabilities have been taken into account for 2022 in the deferred tax calculation of the Company in Turkey. There is no definite and definitive agreement procedure regarding tax assessment in Turkey.Companies prepare their tax returns between 1-25 April of the year following the closing period of the relevant year. These declarations and the accounting records based on them can be reviewed and changed by the Tax authorities within 5 years.
In addition to corporate taxes, companies should also calculate income withholding taxes and funds surcharge on any dividends distributed, except for companies receiving dividends who are Turkish residents and Turkish branches of foreign companies. Income withholding tax applied in between April 24, 2003 and July 22, 2006 is 10% and commencing from July 22, 2006, this rate changed to 15% upon the Council of Minister's' Resolution No: 2006/10731. Commencing from December 21, 2021, this rate has been changed to 10% upon the Presidential Decree numbered 31697/4936.. Undistributed dividends incorporated in share capital are not subject to income withholding tax.
Withholding tax at the rate of 19,8% is still applied to investment allowances related with investment incentive certificates obtained before April 24, 2003. No tax withholding is imposed on investment expenditures without incentive certificate after this date.
Corporate tax liabilities recognized in the balance sheet as of March 31, 2022 and December 31, 2021 are as follows:
| March 31, 2022 | December 31, 2021 | |
|---|---|---|
| Current tax expense Prepaid taxes (-) |
1.338.844 (1.043.516) |
1.093.231 (674.845) |
| Current income tax liability | 295.328 | 418.386 |
Tax expense details recognized in the income statement as of March 31, 2022 and 2021 are as follows:
| March 31, 2022 | March 31, 2021 | |
|---|---|---|
| Current tax expense Deferred tax expense / (income) |
(245.613) 29.339 |
(190.576) 24.611 |
| Total tax expense | (216.274) | (165.965) |
The Company recognizes deferred tax assets and liabilities for temporary differences arising from differences between its tax base legal financial statements and its condensed financial statements prepared in accordance with TMS / TFRS. The aforementioned differences are generally due to the fact that some income and expense items are included in different periods in the financial statements subject to tax and the condensed financial statements prepared in accordance with TMS / TFRS, and these differences are stated below. In the calculation of deferred tax assets and liabilities, the tax rates expected to be applied in the periods when assets are converted into income or debts are paid are taken into account.
| March 31, 2022 | December 31, 2021 | |||
|---|---|---|---|---|
| Cumulative | Cumulative | |||
| temporary | Deferred | temporary | Deferred | |
| differences | tax | differences | tax | |
| Tangible and intangible assets | 472.188 | 94.423 | 408.445 | 89.858 |
| State right provision | 438.819 | 100.928 | 320.010 | 73.602 |
| Employee termination benefit | 55.867 | 11.173 | 42.798 | 9.401 |
| Provision for personnel bonuses | 10.327 | 2.065 | 22.879 | 5.262 |
| Lawsuit provision | 22.426 | 4.485 | 22.426 | 5.157 |
| Provision for unused vacation | 23.022 | 4.604 | 14.558 | 3.348 |
| IFRS 9 provision | 9.105 | 1.821 | 5.365 | 1.234 |
| Provisions for doubtful receivables | 5.260 | 1.052 | 5.327 | 1.226 |
| Leasing transactions | 5.552 | 1.112 | 5.245 | 1.207 |
| Total deferred tax assets | 221.663 | 190.295 | ||
| Deferred tax assets, net | 221.663 | 190.295 |
Movement of deferred tax is as follows:
| 2022 | 2021 | |
|---|---|---|
| January 1 | 190.295 | 110.060 |
| Deferred tax expense recognized in equity Deferred tax income recognized in income statement |
2.029 29.339 |
708 24.611 |
| March 31 | 221.663 | 135.379 |
The reconciliation of the tax is as follows:
| 2022 | 2021 | |
|---|---|---|
| Profit before tax | 1.274.270 | 827.939 |
| Effective tax rate Tax calculated using effective tax rate |
23% 293.082 |
%20 165.588 |
| Temporary differences not subject to deferred tax Effect of non-deductible expenses Other |
(88.613) 13.007 (1.202) |
- 377 - |
| Current tax expense | 216.274 | 165.965 |
Earnings per share is calculated by dividing the current year net profit of the parent company by the weighted average number of shares traded throughout the year.
Companies in Turkey have right to increase its capital through the distribution of bonus shares to be met from the re-valuation fund or accumulated profits. During the calculation of earnings per share, these increases are accepted as shares distributed as dividends. Dividend distributions added to the capital are also evaluated in the same way. Therefore, while calculating the average number of shares, it is assumed that such shares are in circulation throughout the year. For this reason, the weighted average of the number of shares used in calculating the earnings per share is determined by considering the retroactive effects.
The earnings per share of the Company as of March 31, 2022 and 2021 are as follows:
| January 1 – March 31, 2022 |
January 1 – March 31, 2021 |
|
|---|---|---|
| Net profit attributable to the owners of the Company Weighted average number of share certificates |
1.057.996 15.250.000.000 |
661.973 15.250.000.000 |
| Earnings per 100 share | 6,938 | 4,341 |
| Total comprehensive income attributable to the owners of the Company | 1.049.880 | 659.140 |
| Earnings per 100 shares from total comprehensive income | 6,884 | 4,341 |
The other trade payables and other receivables of the Company consist of the payables and receivables given and received in order to meet the financing needs of the Company and its related parties during the year. Other payables and other receivables do not have a certain maturity, and the Company accrues interest on the related payables and receivables at the end of the period, using the current interest rate determined monthly, taking into account the evaluations made by the Company management and the developments in the markets. In this context, the current interest for March2022 was applied as 18,37% per year (December 31, 2021: 17,98%).
Transactions with related parties are classified according to the following groups and include all related party disclosures in this note:
The details of the transactions between the Company and other related parties are explained as below.
Other receivables of the Company from related parties as of March 31, 2022 and December 31, 2021 are as follows:
| March 31, 2022 | December 31, 2021 | |
|---|---|---|
| ATP İnşaat ve Ticaret A.Ş. (1) | 804.869 | 740.211 |
| Koza İpek Holding A.Ş(1) | 178.111 | 170.463 |
| ATP Havacılık ve Ticaret A.Ş. (2) | 101.787 | 89.669 |
| ATP Koza Gıda Tarım Hay. A.Ş. (2) | 12.655 | 11.008 |
| Other (3) | 21.414 | 21.285 |
| Total | 1.118.836 | 1.032.636 |
Other payables of the Company to related parties as of March 31, 2022 and December 31, 2021 are as follows:
| March 31, 2022 | December 31, 2021 | |
|---|---|---|
| İpek Doğal Enerji Kaynakları Araştırma ve Üretim A.Ş. (2) Other (3) |
73 614 |
1.585 137 |
| Total | 687 | 1.722 |
Notes to the condensed financial statements for the period ended March 31, 2022 (All amounts are expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
The purchases of the Company from related parties between January 1 – March 31, 2022 and 2021 are as follows;
| January 1 – March 31, 2022 | January 1 – March 31, 2021 | |||||
|---|---|---|---|---|---|---|
| Rent | Service | Other | Rent | Service | Other | |
| İpek Doğal Enerji Kaynakları Araştırma ve Üretim A.Ş. (2) |
5.615 | - | - | 2.016 | - | - |
| Other (3) | - | - | 4.776 | - | - | 457 |
| Total | 5.615 | - | 4.776 | 2.016 | 457 |
Sales of the Company to related parties between January 1 – March 31, 2022 and 2021 are as follows;
| January 1 – March 31, 2022 | January 1 – March 31, 2021 | |||||
|---|---|---|---|---|---|---|
| Interest | Service | Other | Interest | Service | Other | |
| ATP İnşaat ve Ticaret A.Ş. (1) | 15.009 | - | 3 | 12.482 | - | 3 |
| Koza İpek Holding A.Ş. (1) | 7.612 | - | 25 | 5.875 | - | 13 |
| Koza İpek Sigorta A.Ş. (2) İpek Doğal Enerji Kaynakları Araştırma ve |
- | - | 3 | - | - | - |
| Üretim A.Ş. (2) | - | - | 3 | - | - | - |
| Other (3) | 923 | - | 213 | - | - | 141 |
| Total | 23.544 | - | 247 | 18.357 | - | 157 |
c) Compensations provided to key management; The Company's key management consist of the general manager and assistant general managers. Compensations provided to senior management include benefits such as wages and bonuses. Total amount of wages and similar benefits paid to key management between January 1 – March 31, 2022 is amounting to TL 2.264 thousand. The entire amount consists of the wages. (January 1 – March 31, 2021: TL 1.104 thousand).
The main financial instruments of the Company consist of cash and short-term deposits. The main purpose of financial instruments is to provide financing for the Company's activities. Apart from these, the Company has financial instruments such as trade receivables and payables that arise as a result of its activities.
The Company is exposed to market risk, which consists of currency, cash flow and interest rate risks, capital risk, credit risk and liquidity risk, due to operations. Risk management policy is to focus on unexpected changes in the financial markets.
The management policy of financial risks should be made by the Company's senior management and commercial and financial affairs department in line with the policies and strategies approved by the Board of Directors. The Board of Directors should prepare general principles and policies for the management of currency, interest and capital risks, and closely monitor financial and operational risks (especially arising from fluctuations in gold prices). The Company does not have an Early Risk Detection Committee.
The purpose that the Company should set to manage financial risks can be summarized as follows:
The main risks arising from the financial instruments of the Company are interest rate risk, foreign currency risk, credit risk and liquidity risk. The policies of the management regarding to manage these risks are summarized below.
The risk of financial loss of the Company due to the failure of one of the parties to the financial instrument to fulfill its contractual obligation is defined as credit risk. Financial instruments of the Company that may cause a significant concentration of credit risk mainly consist of cash and cash equivalents and trade receivables. The maximum credit risk that the Company may be exposed to is up to the amounts reflected in the financial statements.
The Company has cash and cash equivalents in various financial institutions. The Company manages this risk by continuously evaluating the reliability of the financial institutions.
In order to measure the expected credit loss, the Company first grouped its trade receivables and contract assets by considering their maturity and credit risk characteristics. The expected credit loss rate for each class of other receivables and contract assets is calculated by using past credit loss experiences, current conditions and prospective macroeconomic indicators and the expected credit loss allowance is calculated by multiplying the determined rate with the totals of trade receivables and contract assets.
The Company sales consist gold dore bars with a right of first refusal to domestic banks on consignment to be sold to the Central Bank of the Republic of Turkey and silver to a domestic refinery on consignment. Due to the fact that the sales are made on demand and the customer is corporate, the Company considers that there is no significant risk of receivables.
The analysis of the Company's credit risk as of March 31, 2022 and December 31, 2021 are as follows:
| Cash and cash | |||||
|---|---|---|---|---|---|
| Trade receivables Other receivables |
equivalents | ||||
| Related | Related | Deposits in | |||
| March 31, 2021 | party | Third party | party | Third party | banks |
| Maximum credit risk exposure as of the reporting date |
|||||
| (A+B+C+D+E) * | - | 416 | 1.118.836 | 79.631 | 5.093.679 |
| Portion of the maximum risk that is guaranteed with a collateral, etc |
- | - | - | - | - |
| A. Net book value of financial assets that are not overdue or not impaired B. The book value of financial assets whose |
- | 416 | 1.118.836 | 79.631 | 5.093.679 |
| conditions have been renegotiated or that would be deemed overdue or impaired C. Net book value of assets that are overdue |
- | - | - | - | - |
| but not impaired | - | - | - | - | - |
| D. Net book values of impaired assets | - | - | - | - | - |
| Overdue (gross book value) | - | - | - | - | - |
| Impairment (-) The part of net value under |
- | 72.527 | - | - | - |
| guarantee with collateral, etc | - | (72.527) | - | - | - |
| Not due (gross book value) | - | - | - | - | - |
| Impairment (-) | - | - | - | - | - |
| The part of net value under | |||||
| guarantee with collateral, etc | - | - | - | - | - |
| E. Off-balance sheet items with credit risk | - | - | - | - | - |
(*) In determining the amount, factors that increase credit reliability, such as guarantees received, have not been taken into account.
| Cash and cash | |||||
|---|---|---|---|---|---|
| Trade receivables | Other receivables | equivalents | |||
| Related | Third | Related | Third | Deposits in | |
| December 31, 2021 | party | party | party | party | banks |
| Maximum credit risk exposure as of the reporting date |
|||||
| (A + B + C + D + E) (*) | - | 205 | 1.032.636 | 56.450 | 8.885.296 |
| Portion of the maximum risk that is guaranteed with a collateral, etc |
- | - | - | - | - |
| A. Net book value of financial assets that are not overdue or not impaired |
- | 205 | 1.032.636 | 56.450 | 8.885.296 |
| B. The book value of financial assets whose conditions have been renegotiated or that would |
|||||
| be deemed overdue or impaired C. Net book value of assets that are overdue but |
- | - | - | - | - |
| not impaired | - | - | - | - | - |
| D. Net book values of impaired assets | - | - | - | - | - |
| Overdue (gross book value) | - | - | - | - | - |
| Impairment (-) | - | 72.705 | - | - | - |
| The part of net value under | |||||
| guarantee with collateral, etc | - | (72.705) | - | - | - |
| Not due (gross book value) | - | - | - | - | - |
| Impairment (-) | - | - | - | - | - |
| The part of net value under | |||||
| guarantee with collateral, etc | - | - | - | - | - |
| E. Off-balance sheet items with credit risk | - | - | - | - | - |
(*) In determining the amount, factors that increase credit reliability, such as guarantees received, have not been taken into account.
Notes to the condensed financial statements for the period ended March 31, 2022 (All amounts are expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
Due to operations, the Company is exposed to financial risks related to changes in exchange rates and gold price. Market risks encountered by the Company are measured on the basis of sensitivity analysis. In the current year, there isn't any change in the market risk that the Company is exposed to, or the method of handling the encountered risks or the method used to measure these risks, compared to the previous year.
Transactions in foreign currency cause exchange risk. The Company controls this risk through a natural precaution that occurs by netting foreign currency assets and liabilities.
The distribution of the monetary assets and monetary liabilities of the Company in foreign currency as of the date of financial position is as follows:
| March 31, 2022 | TL Equivalent | Usd | Euro | Gbp |
|---|---|---|---|---|
| Cash and cash equivalents | 200 | 8 | 4 | 1 |
| Trade receivables | 72 | - | 3 | 1 |
| Prepaid expenses | 32.776 | 300 | 1.091 | 551 |
| Other receivables | 582.599 | 39.429 | 271 | 55 |
| Current assets | 615.647 | 39.737 | 1.369 | 608 |
| Total assets | 615.647 | 39.737 | 1.369 | 608 |
| Trade payables | 59.484 | 888 | 1.802 | 890 |
| Other payables | 80.423 | 5.491 | - | - |
| Current liabilities | 139.907 | 6.379 | 1.802 | 890 |
| Total liabilities | 139.907 | 6.379 | 1.802 | 890 |
| Net foreign currency position | 475.740 | 33.358 | (433) | (282) |
| December 31, 2021 | TL Equivalent | Usd | Euro | Gbp |
| Cash and cash equivalents | 801.703 | 61.755 | 17 | 1 |
| Trade receivables | 399 | 26 | 3 | 1 |
| Prepaid expenses | 21.734 | 212 | 623 | 564 |
| Other receivables | 514.770 | 39.286 | 272 | 54 |
| Current assets | 1.338.606 | 101.279 | 915 | 620 |
| Total assets | 1.338.606 | 101.279 | 915 | 620 |
| Trade payables | 90.992 | 912 | 4.342 | 882 |
| Other payables | 71.262 | 5.491 | - | - |
| Current liabilities | 162.254 | 6.403 | 4.342 | 882 |
| Total liabilities | 162.254 | 6.403 | 4.342 | 882 |
| Net foreign currency position | 1.176.352 | 94.876 | (3.427) | (262) |
Notes to the condensed financial statements for the period ended March 31, 2022 (All amounts are expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
The Company is exposed to currency risk mainly in US Dollars and Euro.
The table below shows the sensitivity of the Company to 10% increase and decrease in US Dollar and Euro exchange rates. The sensitivity analysis includes only open monetary items in foreign currency at the end of the period and shows the effects of the 10% exchange rate change at the end of the year. Positive value indicates an increase in profit / loss and other equity items.
| March 31, 2022 | Profit / Loss | Equity | ||
|---|---|---|---|---|
| Appreciation | Depreciation | Appreciation | Depreciation | |
| of foreign | of foreign | of foreign | of foreign | |
| currency | currency | currency | currency | |
| In case of 10% appreciation / depreciation of USD against TL | ||||
| 1- USD net asset/liability | 54.325 | (54.325) | 54.325 | (54.325) |
| 2- Portion protected from USD risk (-) | - | - | - | - |
| 3- USD net effect (1+2) | 54.325 | (54.325) | 54.325 | (54.325) |
| In case of 10% appreciation / depreciation of EUR against TL | ||||
| 4- EUR net asset/liability | (633) | 633 | (633) | 633 |
| 5- Portion protected from EUR risk (-) | - | - | - | - |
| 6-EUR net effect (4+5) | (633) | 633 | (633) | 633 |
| In case of 10% appreciation / depreciation of GBP against TL | ||||
| 7-GBP net asset/liability | (540) | 540 | (540) | 540 |
| 8- Portion protected from GBP risk (-) | - | - | - | - |
| 9-GBP Net effect (7+8) | (540) | 540 | (540) | 540 |
| Total (3+6+9) | 53.152 | (53.152) | 53.152 | (53.152) |
Notes to the condensed financial statements for the period ended March 31, 2022 (All amounts are expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
| Profit / Loss | Equity | ||||
|---|---|---|---|---|---|
| Appreciation of foreign |
Depreciation of foreign |
Appreciation of foreign |
Depreciation of | ||
| December 31, 2021 | currency | currency | currency | foreign currency | |
| In case of 10% appreciation / depreciation of USD against TL | |||||
| 1- USD net asset/liability | 139.299 | (139.299) | 139.299 | (139.299) | |
| 2- Portion protected from USD risk (-) | - | - | - | - | |
| 3- USD net effect (1+2) | 139.299 | (139.299) | 139.299 | (139.299) | |
| In case of 10% appreciation / depreciation of EUR against TL | |||||
| 4-EUR net asset/liability 5- Portion protected from EUR risk (-) |
(4.447) - |
4.447 - |
(4.447) - |
4.447 - |
|
| 6-EUR net effect (4+5) | (4.447) | 4.447 | (4.447) | 4.447 | |
| In case of 10% appreciation / depreciation of GBP against TL | |||||
| 7-GBP net asset/liability 8- Portion protected from EUR risk (-) |
(458) - |
458 - |
(458) | 458 | |
| 9-GBP net effect (7+8) | (458) | 458 | (458) | 458 | |
| Total (3+6+9) | 134.394 | (134.394) | 134.394 | (134.394) |
Price risk
The most important operational risk of the Company is the gold price risk.
The operational profitability of the Company and the cash flows it provides from its operations are affected by the changes in gold prices in the markets. I f the gold prices decrease comparing under the cash-based operational production costs of the Company and continue in this way for a certain period, the operational profitability of the Company may decrease.
The Company does not expect any change in gold prices to drop significantly in the near future. Accordingly, the Company has not used any derivative instruments to hedge the risk of falling gold prices and has not made a similar agreement.
Notes to the condensed financial statements for the period ended March 31, 2022 (All amounts are expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
While managing the capital, the Company's objectives are to maintain the most appropriate capital structure in order to benefit its shareholders and reduce the cost of capital and to ensure the continuity of the Company's activities.
In order to return capital to shareholders, the Company could maintain or reorganize its capital structure, issue new shares, and sell assets to reduce borrowing.
The Company uses the net financial debt / equity ratio to monitor the capital structure. Net debt is calculated by deducting cash and cash equivalents from the total debt amount (including loans and other payables to related parties as shown in the balance sheet).
Company management should follow the net debt / equity ratio regularly and update it when necessary. The Company does not have an Early Detection of Risk Committee.
Fair value of the financial instruments
The Company classifies the fair value measurements of the financial instruments measured at their fair values in the financial statements according to the source of the inputs of each financial instrument class, using a three-level hierarchy as follows.
Level classifications of financial assets measured at their fair values:
| March 31, 2022 | Level 1 | Level 2 | Level 3 | Total |
|---|---|---|---|---|
| Assets: | - | - | 218.753 | 218.753 |
| Measured at fair value through other comprehensive income |
- | - | 218.753 | 218.753 |
| December 31, 2021 | Level 1 | Level 2 | Level 3 | Total |
| Assets: | - | - | 218.753 | 218.753 |
| Measured at fair value through other comprehensive income |
- | - | 218.753 | 218.753 |
Not available.
Notes to the condensed financial statements for the period ended March 31, 2022 (All amounts are expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
The Company's independently audited financial statements for the years ended December 31, 2016, 2017, 2018, 2019, 2020 and 2021 the possible cumulative reflections of the business and transactions of the previous financial periods, the judgment process of which are ongoing, on the statements of the Turkish Commercial Code No.6102 ("TCC"). ") Excluding the provisions of article 401/4, it has been approved and published by the Board of Directors with the resolutions dated April 24, 2018, April 30, 2018, February 28, 2019, February 27, 2020, March 1, 2021 and March 1, 2022. respectively. Independently audited financial statements for the year ended December 31, 2015, on the other hand, were not approved by the Board of Directors in accordance with the provisions of Article 401/4 of the TCC. Ordinary general assembly meetings of the Group for the years 2015, 2016, 2017, 2018, 2019, 2020 and 2021 as explained in detail in footnote number 10, in accordance with the decision of the Ankara 5th Criminal Court of Peace, dated October 26, 2015, the management of the Group, the Board of Trustees, followed by the Board of Trustees on September 22, 2016. was transferred to the Savings Deposits Insurance Fund ("SDIF"). As of the date of the report, due to the fact that various examinations and studies are ongoing by the Prosecutor's Office, the Police Department of Financial Crimes and the CMB, the financial statements of the relevant periods were not submitted to the approval of the General Assembly.
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