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ASELSAN ELEKTRONİK SANAYİ VE TİCARET A.Ş.

Annual / Quarterly Financial Statement Feb 25, 2025

5891_rns_2025-02-25_5dae61a5-1173-4235-b752-850fe72ebe49.pdf

Annual / Quarterly Financial Statement

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(Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish)

ASELSAN ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ AND ITS SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2024 WITH INDEPENDENT AUDITORS' REPORT THEREON

25 February 2025 This report contains independent audit report comprising consolidated financial statements and footnotes comprising 97 pages.

Key Audit Matters How the Matter is Handled
Over Time Revenue - Accounting of Revenue Recognised Our audit procedures included, in addition to
others, the following;
An important part of Group's revenue is Controlling the terms of the contract in accordance
generated from construction contracts which are with the criteria of over time accounting
recognised over time. Revenue recognised over Cross-check of the amounts subject to revenue
time is mainly due to contracts made with the calculation with contracts,
Presidency of Defense Industry. The Group Controlling monthly changes of variables that
recognises revenue over-time if any of the directly affect revenue such as profitability on
following conditions is met: project basis,
a) The customer simultaneously receives and Analytical review of the accuracy of expected loss
consumes the benefits as the entity performs provision,
b) The customer controls the asset as the entity Performing control tests and test of details for
creates or enhances it, contract cost,
c) Group's performance does not create an asset
for which the entity has an use; and alternative
there is a right to payment for performance to date
Questioning the annual changes of over-time
revenue and related costs.
Due to the fact that over-time revenue is one of
the Group's core business volume and size
indicators, implementation of related accounting
standards is complex and includes management
estimates and judgements, this issue has been
considered to be a key audit matter.
Accounting policies and amounts of the revenue

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS OF 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

Audited
Note 31 December 31 December
References 2024 2023
ASSETS
Current Assets 106.118.918 105.228.911
Cash and Cash Equivalents 3 16.637.264 9.543.479
Trade Receivables 6 28.355.434 29.732.106
From Related Parties 5 12.644.260 13.060.339
From Third Parties 15.711.174 16.671.767
Other Receivables 7 2.485.446 2.382.979
From Third Parties 2.485.446 2.382.979
Inventories 9 43.471.734 46.455.849
Prepaid Expenses 10 12.212.061 13.127.239
From Related Parties 5 1.912.275 2.259.250
From Third Parties 10.299.786 10.867.989
Other Current Assets 18 2.956.979 3.987.259
Non-Current Assets 136.678.593 112.173.590
Financial Investments 30 8.089.405 8.545.473
Trade Receivables 6 54.978.938 45.637.177
From Related Parties 5 40.140.620 34.501.820
From Third Parties 14.838.318 11.135.357
Other Receivables 7 11.898 10.509
From Third Parties 11.898 10.509
Equity Accounted Investments 8 1.332.264 1.241.418
Property, Plant and Equipment 11 37.409.042 34.260.777
Intangible Assets 12 21.831.379 17.538.788
Prepaid Expenses 10 3.738.690 3.550.807
From Related Parties 5 1.326.936 2.067.242
From Third Parties 2.411.754 1.483.565
Deferred Tax Assets 28 8.148.087 1.037.507
Other Non-Current Assets 18 1.138.890 351.134
TOTAL ASSETS 242.797.511 217.402.501

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS OF 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

Audited
Note 31 December 31 December
References 2024 2023
LIABILITIES
Current Liabilities 69.761.393 72.447.236
Short-term Financial Liabilities 31 13.564.768 16.879.955
Short-term Portion of Long-term Financial Liabilities 31 9.270.807 10.275.255
Trade Payables 6 19.760.534 21.460.577
To Related Parties 5 2.458.623 4.623.976
To Third Parties 17.301.911 16.836.601
Employee Benefit Obligations 17 3.540.568 1.739.276
Other Payables 7 548.563 493.835
To Related Parties 5 340.357 385.415
To Third Parties 208.206 108.420
Government Grants and Incentives 13 66.034 82.979
Deferred Income 10 13.004.540 12.834.333
To Related Parties 5 6.068.288 3.751.393
To Third Parties 6.936.252 9.082.940
Short-term Provisions 9.970.620 8.666.195
For Employee Benefits 17 3.057.915 2.306.821
Other 15 6.912.705 6.359.374
Other Current Liabilities 18 34.959 14.831
Non-Current Liabilities 31.676.969 17.352.761
Long-term Financial Liabilities 31 9.726.747 1.630.905
Trade Payables 6 -- 109.007
To Third Parties -- 109.007
Other Payables 7 19.300 52.909
To Third Parties 19.300 52.909
Deferred Income 10 11.828.502 8.530.942
To Related Parties 5 7.004.192 5.288.866
To Third Parties 4.824.310 3.242.076
Long-term Provisions 10.062.241 7.021.956
Long-term Provisions for Employee Benefits 17 1.051.359 1.535.147
Other 15 9.010.882 5.486.809
Other Non-Current Liabilities 18 40.179 7.042

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS OF 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.

Audited
Note 31 December 31 December
References 2024 2023
EQUITY 141.359.149 127.602.504
Equity Attributable to Equity Holders of the Parent 140.298.941 126.058.597
Share Capital 19 4.560.000 4.560.000
Inflation Adjustments on Share Capital Differences 19 24.199.143 24.199.143
Share Premiums 21.004.764 21.004.764
Other Comprehensive Income / (Expense) that will not be
Reclassified to Profit or (Loss) 3.316.985 3.177.453
Gain on Revaluation of Property, Plant and Equipment 4.594.565 4.194.687
Gain/ Loss on Remeasurement of Defined Benefit Plans (1.277.580) (1.017.234)
Other Cumulative Comprehensive Income / (Expense) will be
Reclassified to Profit/Loss (606.702) 81.229
Gain (Loss) on Financial Assets That Fair Value Difference
Reflect in Other Comprehensive income (489.897) --
Cumulative Translation Adjustments (116.805) 81.229
Restricted Reserves 19 5.078.387 5.027.387
Retained Earnings 67.447.621 57.482.723
Net Profit for the Year 15.298.743 10.525.898
Non-Controlling Interests 1.060.208 1.543.907
TOTAL LIABILITIES AND EQUITY 242.797.511 217.402.501

CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS and OTHER COMPREHENSIVE INCOME FOR THE TWELVE-MONTH PERIOD ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

Audited
1 January 1 January
Note 31 December 31 December
References 2024 2023
PROFIT OR LOSS
Revenue 20 120.205.594 106.252.343
Cost of Sales (-) 20 (82.047.403) (77.224.731)
GROSS PROFIT 38.158.191 29.027.612
General Administrative Expenses (-) 21 (5.275.649) (4.891.203)
Marketing Expenses (-) 21 (2.629.612) (2.088.462)
Research and Development Expenses (-) 21 (3.318.260) (3.819.905)
Other Operating Income 22 17.478.735 48.391.368
Other Operating Expenses (-) 22 (17.097.770) (30.562.625)
OPERATING PROFIT 27.315.635 36.056.785
Income From Investing Activities 23 85.101 49.539
Shares of Profit of Equity Accounted Investees 8 (57.994) (2.127)
OPERATING PROFIT BEFORE FINANCIAL EXPENSE 27.342.742 36.104.197
Financial Income 24 1.768.193 1.706.117
Financial Expense (-) 25 (6.975.655) (12.753.697)
Monetary Gain/(Loss) 26 (13.869.427) (14.647.438)
PROFIT BEFORE TAX FROM CONTINUING OPERATIONS 8.265.853 10.409.179
Tax Income from Continuing Operations 6.956.866 237.695
- Current Corporate Tax Expense(-) 28 (54.072) (1.630.375)
- Deferred Tax Income 28 7.010.938 1.868.070
PROFIT FOR THE PERIOD FROM CONTINUING
OPERATIONS 15.222.719 10.646.874
Profit for the Period Attributable to 15.222.719 10.646.874
Non-Controlling Interest (76.024) 120.976
Owners of the Company 29 15.298.743 10.525.898
15.222.719 10.646.874
Earnings for per 100 Shares (in full kuruş) 29 335,50 230,83

CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS and OTHER COMPREHENSIVE INCOME FOR THE TWELVE-MONTH PERIOD ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

Audited
1 January- 1 January
Note 31 December 31 December
References 2024 2023
PROFIT FOR THE YEAR 15.222.719 10.646.874
OTHER COMPREHENSIVE INCOME
Items that will not to be Reclassified Subsequently in Profit
or Loss 139.532 3.154.767
Gain on Remeasurement of Defined Benefit Plans 17 (347.128) (329.033)
Gain on Revaluation of Property, Plant and Equipment 27 457.003 3.887.476
Deferred Tax Expense 27-28 29.657 (403.676)
Items that may be Reclassified Subsequently to Profit or
Loss (687.931) (1.958.213)
Gain (Loss) on Financial Assets That Fair Value Difference
Reflect in Other Comprehensive income 27 (559.882) (1.669.946)
Cumulative Translation Adjustments 27 (198.034) (392.639)
Deferred Tax Expense 27-28 69.985 104.372
OTHER COMPREHENSIVE INCOME (548.399) 1.196.554
TOTAL COMPREHENSIVE INCOME 14.674.320 11.843.428
Total Comprehensive Income Attributable to
Non-Controlling Interest (76.024) 120.976
Owners of the Company 14.750.344 11.722.452
14.674.320 11.843.428

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

Other Comprehensive Income /
Expense that will not to be
Reclassified Subsequently to
Profit or Loss
Other Comprehensive Income
/ Expense that may not to be
Reclassified Subsequently to
Profit or Loss
Retained Earnings
Inflation Share Gain (Loss)
on Financial
Assets That
Fair Value
Difference
Reflect in
Equity
Share Adjustments
on Share
Issuance
Premiums/
Revaluation Remeasurement
of Defined
Other
Comprehensi
Translation Restricted Retained Net
Profit/(Loss)
Attributable to
Owners of the
Non
Controlling
Capital Capital (Discounts) Reserves Benefit Plans ve income Reserves Reserves Earnings for the Year Company Interests Equity
Balance as of 1 January 2023 2.280.000 21.829.459 21.004.764 793.145 (770.459) 1.565.574 473.868 4.944.924 61.315.577 1.850.881 115.287.733 1.378.981 116.666.714
Transfers -- -- -- -- -- -- -- 82.463 816.830 (899.293) -- -- --
Capital Increase 2.280.000 2.369.684 -- -- -- -- -- -- (4.649.684) -- -- -- --
Total Comprehensive Income -- -- -- 3.401.542 (246.775) (1.565.574) (392.639) -- -- 10.525.898 11.722.452 120.976 11.843.428
Consolidation Effect of Share
Change in Establishment -- -- -- -- -- -- -- -- -- -- -- 43.950 43.950
Dividends -- -- -- -- -- -- -- -- (951.588) (951.588) -- (951.588)
Balance as of 31 December
2023 (Closing Balance) 4.560.000 24.199.143 21.004.764 4.194.687 (1.017.234) -- 81.229 5.027.387 57.482.723 10.525.898 126.058.597 1.543.907 127.602.504
Balance as of 1 January 2024 4.560.000 24.199.143 21.004.764 4.194.687 (1.017.234) -- 81.229 5.027.387 57.482.723 10.525.898 126.058.597 1.543.907 127.602.504
Transfers -- -- -- -- -- -- -- 51.000 9.964.898 (10.015.898) -- -- --
Capital Increase -- -- -- -- -- -- -- -- -- -- -- -- --
Total Comprehensive Income -- -- -- 399.878 (260.346) (489.897) (198.034) -- -- 15.298.743 14.750.344 (76.024) 14.674.320
Consolidation Effect of Share
Change in Establishment -- -- -- -- -- -- -- -- -- -- -- (407.675) (407.675)
Dividends -- -- -- -- -- -- -- -- -- (510.000) (510.000) -- (510.000)
Balance as of 31 December
2024 (Closing Balance) 4.560.000 24.199.143 21.004.764 4.594.565 (1.277.580) (489.897) (116.805) 5.078.387 67.447.621 15.298.743 140.298.941 1.060.208 141.359.149

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

Audited
1 January 1 January
Note
References
31 December
2024
31 December
2023
A.Cash Flows from Operating Activities 21.417.440 12.091.527
Profit for the Period 15.222.719 10.646.873
Adjustments to Reconcile Profit for the Period 21.161.401 21.735.275
- Adjustments for Depreciation and Amortization Expense 11-12 3.299.534 4.912.003
- Adjustments for Impairment Loss (Reversal of Impairment Loss) (133.649) (58.841)
Adjustments for Impairment Loss (Reversal of Impairment Loss) of Receivables 6 (44.197) 4.358
Adjustments for Impairment Loss (Reversal of Impairment Loss) of Inventories 9 (89.452) (63.199)
-Adjustments for Provisions 13.007.987 6.299.828
Adjustments for (Reversal of) Provisions Related with Employee Benefits 17 1.944.867 1.891.380
Adjustments for (Reversal of) Lawsuit and/or Penalty Provisions 15 6.422.662 1.743.833
Adjustments for (Reversal of) Warranty Provisions 15 4.021.428 3.007.541
Adjustments for (Reversal of) Other Provisions 15 619.030 (342.926)
-Adjustments for Interest (Income) Expenses (353.238) 448.845
Adjustments for Interest Income 22-24 (1.057.804) (1.226.172)
Adjustments for Interest Expense
- Adjustments for Retained Profit of Equity Accounted Investees
22-25
8
704.566
57.994
1.675.017
2.127
- Adjustments for Tax (Income)/Expenses 27 (6.956.866) (237.695)
-Other Adjustments for which Cash Effects are Investing or Financing Cash Flow 9.846.966 6.812.374
-Other Adjustments to Reconcile Profit (Loss) 2.392.673 3.556.634
Changes in Working Capital (10.724.390) (16.036.032)
- Decrease (Increase) in Trade Receivables 2.216.579 (27.186.075)
- Decrease (Increase) in Other Receivables Related with Operations (103.856) (902.593)
- Decrease (Increase) in Inventories 3.444.884 (5.988.068)
- Decrease (Increase) in Prepaid Expenses 10 806.634 (1.738.790)
- Increase (Decrease) in Trade Payables (798.165) 8.536.700
- Increase (Decrease) in Employee Benefit Obligations 1.801.292 819.238
-Adjustments for Stage of Completion of Construction or Service Contracts in
Progress (14.090.356) (2.487.925)
- Increase (Decrease) in Other Operating Payables (319.238) (645.952)
- Increase (Decrease) in Government Grants and Subsidies (16.945) (83.206)
- Increase (Decrease) in Deferred Income 6.716.086 2.206.059
- Adjustments Related to Monetary Gain/ Losses (10.736.934) 12.300.198
- Other Increase (Decrease) in Working Capital 355.629 (865.618)
Cash Flows From Operations 25.659.730 16.346.116
Payments Related with Provisions for Employee Benefits
Payments Related with Other Provisions
17
15
(843.751)
(3.344.467)
(472.990)
(2.150.791)
Income Taxes Refund (Paid) (54.072) (1.630.808)
B.Cash Flows From Investing Activities (21.347.846) (16.865.758)
Proceeds from Sales of Property, Plant, Equipment and Intangible Assets 664.391 444.283
Purchase of Property, Plant and Equipment 11 (6.027.026) (7.640.660)
Purchase of Intangible Assets 12 (15.271.921) (10.330.984)
Dividends Received 23 44.750 22.219
Other Cash Outflows (758.040) 639.384
C.Cash Flows From Financing Activities 10.017.341 5.993.544
Proceeds from Borrowings 34.580.193 28.177.107
Repayments of Borrowings (24.393.209) (21.867.034)
Dividends Paid 19 (169.643) (316.529)
NET INCREASE/DECREASE IN CASH AND CASH EQUIVALENTS BEFORE
EFFECT OF EXCHANGE RATE CHANGES (A+B+C) 10.086.935 1.219.313
D. EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS (46.776) 104.903
E. MONETARY GAİN/LOSS EFFECT ON CASH AND CASH EQUİVALENTS (2.933.450) (5.318.384)
NET INCREASE/DECREASE IN CASH AND CASH EQUIVALENTS (A+B+C+D+E) 7.106.709 (3.994.168)
F.CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD 9.530.555 13.524.723
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD (A+B+C+D+E+F) 3 16.637.264 9.530.555

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

1. ORGANIZATION AND OPERATIONS OF THE GROUP

ASELSAN Elektronik Sanayi ve Ticaret Anonim Şirketi ("the Company") was established in order to engage principally in research, development, engineering, production, tests, assembly, integration and sales, after sales support, consultancy and trading activities, to provide and conduct all sorts of activities for project preparation, engineering, consultancy, service providing, training, contracting, construction, publishing, trading, operation and internet services regarding various software, equipment, system, tools, material and platforms in the fields of electrical, electronics, microwave, electro-optics, guidance, computer, data processing, encryption, security, mechanics, chemistry and related areas within the army, navy, air force and aerospace applications to all institutions, organizations, companies and individual consumers.

The Company was established at the end of 1975 as a corporation by Turkish Land Forces Foundation. The Company commenced its production activities in Macunköy Facilities in early 1979.

As of the reporting date, the Company has been organized under five divisions under the Vice Presidential Sector with regard to investment and production requirements of projects. These divisions comprise Communication and Information Technologies Vice Presidency (''HBT''), Radar and Electronic Warfare Systems Vice Presidency (''REHİS''), Defence Systems Technologies Vice Presidency (''SST'') and Microelectronics, Guidance & Electro-Optics Vice Presidency (''MGEO'') and Transportation, Security, Energy, Automation and Medical Systems Vice Presidency (''UGES'').

In addition to the Vice Presidencies above, the Company organization also includes five Vice Presidencies to fulfil the planning, monitoring and analyzing functions: Financial Management Vice Presidency, Corporate Management Vice Presidency, Technology and Strategy Management Vice Presidency, Business Development and Marketing Vice Presidency, Supply Chain Management Vice Presidency and Malatya Campus Directorate. In addition to these, there are also Legal Affairs and Office of the Private Secretary.

The Internal Audit Department and Board of Directors Planning and Coordination Management have been established under the Board of Directors.

The Company maintains production and engineering operations in Ankara, Macunköy, Akyurt and Gölbaşı campuses and engineering operations in METU Teknokent, Hacettepe Teknokent, Teknopark İstanbul, Gebze Technology Development Zone, Aselsan Temelli Campus and Aselsan Malatya Campus. Headquarters is located in Ankara Macunköy.

Turkish Armed Forces Foundation ("TSKGV") is the main shareholder of the Company which holds 74,20 percent of the capital and maintains control of the Company. TSKGV was established on 17 June 1987 with the law number 3388, in order to manufacture or import guns, equipment and appliances needed for Turkish Armed Forces.

The Company is registered to Capital Markets Board of Türkiye ("CMB") and its shares have been quoted in Borsa İstanbul Anonim Şirketi ("BIST") since 1990. As of 31 December 2024, 25,80 percent of the Company's shares are publicly traded (31 December 2023: 25,80 percent) (Note 19).

The Company's trade registry address is Mehmet Akif Ersoy Mahallesi İstiklal Marşı Caddesi No:16 06200 Yenimahalle/Ankara. The average number of personnel employed by the Group as of 31 December 2024 is 12.014 (31 December 2023: 11.550).

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

1. ORGANIZATION AND OPERATIONS OF THE GROUP (continued)

The Company's consolidated subsidiaries are ASELSAN Baku ("ASELSAN Baku"), Aselsan Sivas Hassas Optik San. Tic. A.Ş. (" ASELSAN Optik"), Mikroelektronik Ar-Ge Tasarım ve Ticaret Ltd. Co. ("Mikro AR-GE"), ASELSANNET Elektronik ve Haberleşme Sistemleri Sanayi Ticaret İnşaat ve Taahhüt Ltd. Co. ("ASELSANNET"), Aselsan Konya Silah Sistemleri Anonim Şirketi ("ASELSAN Konya"), ASELSAN Malaysia Sdn. Bhd. ("ASELSAN Malaysia"), BITES Savunma Havacılık ve Uzay Teknolojileri Yazılım A.Ş. ("BITES"), Aselsan Global Dış Ticaret ve Pazarlama A.Ş. ("ASELSAN Global"), ASELSAN UKRAINE LLC. ("ASELSAN Ukrayna"), ASELSAN Latin Amerika SpA ("ASELSAN Latin Amerika") and ASELSAN Technologies Limited ("ASELSAN UAE"). They are collectively referred as the "Group" in the accompanying notes.

The Company has five branch offices; Aselsan Elektronik Sanayi ve Ticaret Anonim Şirketi EP Co. (''ASELSAN South Africa''), ASELSAN Balkans (''ASELSAN Balkans''), ASELSAN Kıbrıs İleri Araştırma Merkezi ("ASELSAN N.Cyprus"), ASELSAN Elektronik Sanayi ve Ticaret A.Ş. Katar ("ASELSAN Qatar") and ASELSAN Elektronik Sanayi ve Ticaret A.Ş. Poland ("ASELSAN Poland) located in Republic of South Africa, Macedonia, Turkish Republic of Northern Cyprus ("TRNC"), Qatar and Poland, respectively. The branches are also included in the consolidated financial statements.

2. BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS

2.1 The Basis of Presentation

Statement of Compliance to TFRS

The accompanying consolidated financial statements are prepared in accordance with the requirements of CMB Communiqué Serial II, No: 14.1 "Basis of Financial Reporting in Capital Markets" ("Communiqué"), which were published in the Official Gazette No: 28676 on 13 June 2013 and in accordance with the Turkish Financial Reporting Standards ("TFRS") and Interpretations that have been put into effect by the Public Oversight Accounting and Auditing Standards Authority ("POA").

The consolidated financial statements has been presented with examples of Financial Statement by the POA. All reports have suited the TFRS formats.

The consolidated financial statements are prepared according to historical cost accounting except for the revaluation of land and financial instruments.

Approval of the Consolidated Financial Statements

These consolidated financial statements have been approved for issue by the Board of Directors with the resolution number 1259 on 25 February 2025. There is no authority other than General Assembly and legal entities has the right to amend the consolidated financial statements.

Functional Currency

The individual financialstatements of each Group entity are presented in the currency of the primary economic environment ("Functional Currency") in which the entity operates. The Company's reporting currency is Turkish Lira (''TL''). For the purpose of the consolidated financial statements, the results and financial position of each entity are expressed in TL, which is the functional, and presentation currency of the Company for the consolidated financial statements. Amounts are expressed in thousands of TL or Foreign Currency unless otherwise stated. Kuruş, Turkish Currency subunit and 1 TL is equal to 100 Kuruş.

Preparation of Financial Statements in Hyperinflationary Periods

With the decision taken on 17 March 2005, the CMB has announced that, effective from 1 January 2005, the application of inflation accounting is no longer required for companies operating in Türkiye and preparing their financial statements in accordance with CMB Accounting Standards and therefore the preparation and presentation of financial statements in accordance with International Accounting Standard 29 "Financial Reporting in Hyperinflationary Economies" is no longer required.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

2. BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (continued)

2.1 The Basis of Presentation (continued)

Preparation of Financial Statements in Hyperinflationary Periods (continued)

On 23 November 2023, Public Oversight Accounting and Auditing Standards Authority ("POA") announced the application of inflation accounting in Türkiye and according to the announcement, financial statements of entities applying TFRS for the annual reporting period ending on or after 31 December 2023 should be presented as adjusted for the effects of inflation in accordance with the related accounting principles in TAS 29. As of the date of these financial statements, inflation adjustment has been made in accordance with TAS 29 while preparing the financial statements dated 31 December 2023 and 31 December 2024.

IAS 29 requires that financial statements prepared in the currency of a hyperinflationary economy be stated in terms of the measuring unit current at the balance sheet date and that corresponding figures for previous periods be restated in the same terms using the general price index. One of the conditions that require the application of TAS 29 is a three-year cumulative inflation rate of approximately 100% or more. In Türkiye, based on the consumer price index ("CPI") published by the Turkish Statistical Institute ("TURKSTAT"), the cumulative rate was 291% for the three-year period ended 31 December 2024 (31 December 2023: %268).

TAS 29 should also be applied if there are signs of hyperinflation, such as the public keeping their savings predominantly in foreign currencies, prices of goods and services being determined in foreign currencies, interest rates, wages and prices being linked to general price indices, and prices being determined with a maturity difference to compensate for losses in purchasing power, including shortterm transactions, although there is no increase in price indices at the level mentioned above.

Adjustments for inflation have been calculated based on the coefficients calculated using the Consumer Price Index in Türkiye published by the Turkish Statistical Institute. As of 31 December 2024, the indices and coefficients used in the restatement of the accompanying financial statements are as follows:

Period Index Correction Coefficient
31 Aralık 2024 2.684,55 1
31 Aralık 2023 1.859,38 1,44379
31 Aralık 2022 1.128,45 2,37897

The main lines of TAS 29 indexation transactions are as follows:

As of the balance sheet date, all items other than those stated in terms of current purchasing power are restated by using the relevant consumer price index coefficients. Prior year amounts are restated in the same way.

Financial statements of previous reporting periods have been restated to reflect the current purchasing power of money at the latest balance sheet date. The current period restatement factor has been applied to the prior period financial statements.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

2. BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (continued)

2.2 The Basis of Presentation (continued)

Monetary assets and liabilities are not restated because they are expressed in terms of the purchasing power of money at the balance sheet date. Monetary items are cash and items to be received or paid in cash.

Non-monetary assets and liabilities are restated by reflecting the changes in the general price index from the date of acquisition or initial recognition to the balance sheet date in their acquisition costs and accumulated amortization amounts. Accordingly, property, plant and equipment, intangible assets, right-of-use assets and similar assets are restated to their acquisition values, which do not exceed their market values.

Depreciation has been restated in a similar manner. Amounts included in shareholders' equity have been restated by applying the consumer price indices for the periods in which such amounts were contributed to or arose within the Company.

All items in the income statement, except for the effects of non-monetary items in the balance sheet on the income statement, have been restated by applying the multiples calculated over the periods when the income and expense accounts were initially recognized in the financial statements.

The gain or loss arising on the net monetary position as a result of general inflation is the difference between the restatement adjustments to non-monetary assets, equity items and income statement accounts. This gain or loss on the net monetary position is included in net profit.

All items presented in the statement of cash flows are restated for the effects of inflation in the measuring unit current at the end of the reporting period. The effect of inflation on cash flows from operating, investing and financial activities is attributed to the related item and the monetary gain or loss on cash and cash equivalents is presented separately.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

2. BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (continued)

2.3 The Basis of Presentation (continued)

Basis of Consolidation

Subsidiaries:

The details of the subsidiaries of the Group are as follows:

Group's proportion of ownership
and voting power held (%)
Subsidiaries Location Functional
Currency
31 December
2024
31 December
2023
Main Activity
ASELSANNET Türkiye TL 100 100 Communication
systems
ASELSAN Baku Azerbaijan AZN 100 100 Marketing and sales of
the group products
ASELSAN Global Türkiye TL 100 100 Export
ASELSAN Optik Türkiye TL 80 80 Sensitive optic
technologies
Mikro AR-GE Türkiye TL 85 85 Microelectronic R&D
projects
ASELSAN Malaysia Malaysia MYR 100 100 Remote controlled
weapon systems
ASELSAN Konya Türkiye TL 51 51 Weapon and weapon
systems
BITES Türkiye TL 100 100 Defense, Aerospace,
Space Technologies,
Software
ASELSAN Ukraine Ukraine UAH 100 100 Marketing and sales of
the group products
ASELSAN Latin
Amerika
Chile CLP 100 -- Marketing and
business development
ASELSAN UAE BAE AED 100 100 Marketing and
business development

The consolidated financial statements include the financial statements of the Company and its subsidiaries. Control is achieved when the Company:

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

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

Even though the Company has voting rights less than a majority, if it has ability to manage the operation of the investee unintentionally, then the Group assess that it has control over that investee.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

2. BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (continued)

2.1 The Basis of Presentation (continued)

Basis of Consolidation (continued)

Subsidiaries (continued):

The Company considers all relevant facts and circumstances in assessing whether or not the Company's voting rights in an investee are sufficient to give it power, including:

  • comparison of voting rights of the Group and the others,
  • potential voting rights held by the Group, and others,
  • rights arising from contractual arrangements; and

• any additional facts and circumstances that indicate the Group has, or does have, the current ability to direct the relevant activities at the time that decisions need to be made (including voting patterns at previous shareholders' meeting).

The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until the date on which control ceases. Income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated statement of profit or loss and other comprehensive income from the date the Company gains control until the date when the Company ceases to control the subsidiary.

Each item of profit or loss and other comprehensive income are attributed to the owners of the Company and to the non-controlling interests. Total comprehensive income of subsidiaries is attributed to the owners of the Company and to the non-controlling interests even if results in the non-controlling interests having a deficit balance.

When necessary, adjustments are made to the financial statements of subsidiaries to align with the Group accounting policies and the Group's accounting policies.

All intragroup balances, equity, income and expenses, profits and losses and cash flows relating to transactions between members of the Group are eliminated during consolidation.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

2. BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (continued)

2.1 The Basis of Presentation (continued)

Basis of Consolidation (continued)

Joint Ventures

The details of the Group's interests in joint ventures as of 31 December 2024 and 2023 are as follows:

Group's proportion of
ownership and voting power
held (%)
Joint Ventures Principal Activity Country of
establishment
and operation
31 December
2024
31 December
2023
Mikro Nano Teknolojileri Sanayi
ve Ticaret Anonim Şirketi
(''ASELSAN Bilkent'')
Production of micro and nano sized devices
which contains semi-conductive and similar
technological materials
Türkiye 50 50
International Golden Group
("IGG") ASELSAN Integrated
Systems LLC ("IGG ASELSAN")
Manufacturing, testing, maintenance-repair
and marketing of remote control system
United Arab
Emirates
49 49
Kazakhstan ASELSAN Engineering
LLP ("ASELSAN Kazakhstan")
Manufacturing,
development
and
maintenance repair of electronic devices and
systems
Kazakhstan 49 49
ASELSAN Middle East PSC
("ASELSAN Jordan")
Production, sales and technical maintenance
service of electronic and electro-optic devices
and systems
Jordan 49 49
TÜYAR Mikroelektronik Sanayi ve
Ticaret Anonim Şirketi ("TÜYAR")
Production of micro and nano-sized devices
containing semiconductor
Türkiye 51 51
BARQ QSTP LLC. ("BARQ QSTP
LLC.")
Command and control systems, thermal and
night vision camera, crypto, remote-controlled
weapon systems
Qatar 48 48
Teknohab Teknoloji Geliştirme
Bölgesi Yönetici Anonim Şirketi
("TEKNOHAB")
Manage
and
operate
the
technology
development zone
Türkiye 13 13
EHSİM Elektronik Harp Sistemleri
Müh. Tic. A.Ş.("EHSİM")
Electronic warfare systems, tactical command
and control systems & decoy target systems
Türkiye 50 50
TR Eğitim ve Teknoloji A.Ş.
("TR Eğitim")
Human Resources Studies, consultancy and
training activities, certification activities,
training software activities, publishing
activities
Türkiye 35 35
İstanbul Finans ve Teknoloji
Merkezi ("İFTÜ")
To establish infrastructure activities for the
development of the financial technology
ecosystem
Türkiye 44 44
Adıyaman Kablo ve Konnektör
A.Ş. ("Adıyaman Kablo")
Production, design and sale of cables,
connectors, cabling and similar products and
technologies
Türkiye 15 --
ULAK Haberleşme A.Ş. ("ULAK") Design, development and engineering
activities of broadband communication devices
and mobile communication systems
Türkiye 51 51

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

2. BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (continued)

2.1 The Basis of Presentation (continued)

Basis of Consolidation (continued)

Joint Ventures (continued):

A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the joint arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require unanimous consent of the parties sharing control.

The Group's joint ventures; EHSİM established in 1998, IGG ASELSAN and ASELSAN Kazakhstan established in 2011, ASELSAN Jordan established in 2012 and ASELSAN Bilkent established in 2014, TÜYAR and ULAK established in 2017, TEKNOHAB established in 2018, TR Eğitim established in 2019, İFTÜ established in 2022, and Adıyaman Kablo established in 2024 were included in the condensed consolidated financial statements by using the equity method. Since BARQ QSTP LLC is at micro level, there is no material consolidation effect on the Group's financial statements.

2.2 Comparative Information and Restatement of Prior Period Consolidated Financial Statements

In order to determine the financial position and performance trends, the Group's consolidated financial statements are presented comparatively with the corresponding figures. For the purpose of having consistency with the current term's presentation of consolidated financial statements, comparative information is reclassified and significant differences are explained if necessary.

2.3 Accounting Policies, Changes in Accounting Estimates and Errors

Significant changes in accounting policies and errors are applied retrospectively and prior period financial statements are restated, changes in accounting estimates are reflected to the financial in current period profit/loss.

When change in estimate in accounting policies are related with only one period, changes are applied on the current period but if the estimated changes are for the following periods, changes are applied both on the current and following periods prospectively.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

2. BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (continued)

2.4 New and Revised Turkish Accounting Standards

The accounting policies adopted in preparation of the consolidated financial statements as at 31 December 2024 are consistent with those of the previous financial year, except for the adoption of new and amended TFRS and TFRS interpretations effective as of 1 January 2024 and thereafter. The effects of these standards and interpretations on the Group's financial position and performance have been disclosed in the related paragraphs.

a) The new standards, amendments and interpretations which are effective as at 1 January 2024 are as follows:

Amendments to TAS 1 – Non-Current Liabilities with Covenants

The amendments set out in 'Non-current Liabilities with Covenants (Amendments to TAS 1)' state that at the reporting date, the entity doesn't need to consider covenants to be complied with in the future, when considering the classification of the debt as current or non-current. Instead, the entity should disclose information about these covenants in the notes to the financial statements. With these changes, aims to help investors understand the risk that such debt could become repayable early and therefore, has improved the information being provided on the long-term debt.

The amendments are applicable for annual reporting periods beginning on or after 1 January 2024, with early application permitted. The amendments did not have a significant impact on the consolidated financial position and performance of the Group.

Amendments to TFRS 16 – Lease Liability in a Sale and Leaseback

In January 2023, POA issued amendments to TFRS 16. The amendments specify the requirements that a seller-lessee uses in measuring the lease liability arising in a sale and leaseback transaction, to ensure the seller-lessee does not recognise any amount of the gain or loss that relates to the right of use it retains. In applying requirements of TFRS 16 under "Subsequent measurement of the lease liability" heading after the commencement date in a sale and leaseback transaction, the seller lessee determines 'lease payments' or 'revised lease payments' in such a way that the seller-lessee would not recognise any amount of the gain or loss that relates to the right of use retained by the sellerlessee. The amendments do not prescribe specific measurement requirements for lease liabilities arising from a leaseback. The initial measurement of the lease liability arising from a leaseback may result in a seller-lessee determining 'lease payments' that are different from the general definition of lease payments in TFRS 16. The seller-lessee will need to develop and apply an accounting policy that results in information that is relevant and reliable in accordance with TAS 8.

A seller-lessee applies the amendments to annual reporting periods beginning on or after 1 January 2024. Earlier application is permitted. A seller-lessee applies the amendments retrospectively in accordance with TAS 8 to sale and leaseback transactions entered into after the date of initial application of TFRS 16. The amendments did not have a significant impact on the consolidated financial position and performance of the Group.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

2. BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (continued)

2.4 New and Revised Turkish Accounting Standards (continued)

a) The new standards, amendments and interpretations which are effective as at 1 January 2024 are as follows (continued)

Amendments to TMS 7 and TFRS 7 – Supplier Finance Arrangements

On 19 September 2023, POA issued amendments to TMS 7 and TFRS 7 Supplier Finance Arrangements.

With these amandements, companies are expected to disclose the following regarding supplier finance agreements:

  • The terms and conditions of the arrangements,
  • The carrying amounts, and associated line items presented in the entity's statement of financial position, of the financial liabilities that are part of a supplier finance arrangement. The carrying amounts, and associated line items, of the financial liabilities for which suppliers have already received payment from the finance providers,
  • The range of payment due dates,
  • Liquidity risk disclosures.

The amendments are applicable for annual reporting periods beginning on or after 1 January 2024, with early application permitted. The amendments did not have a significant impact on the consolidated financial position and performance of the Group.

Amendments to TMS 12 Income Taxes – International Tax Reform Pillar Two Model Rules

On 19 September 2023, POA issued amendments to Amendments to TMS 12 Income Taxes - International Tax Reform Pillar Two Model Rules.

With amendments to the International Tax Reform Pillar Two Model Rules, to provide a better understanding of a company's income tax exposure resulting from the Pillar Two Model, additional disclosure obligations have been imposed on companies. As an exception to the requirements in TMS 12, an entity shall neither recognise nor disclose information about deferred tax assets and liabilities related to Pillar Two income taxes.

The exception which are recognized in International Tax Reform Pillar Two Model Rules are applicable immediately however, companies must make disclosures for annual reporting periods beginning on 1 January 2024. The amendments did not have a significant impact on the consolidated financial position and performance of the Group.

b) Standards Issued But Not Yet Effective and Not Early Adopted as of 31 December 2024

Amendments to IAS 21 - Lack of Exchangeability;

Effective from annual periods beginning on or after 1 January 2025. An entity is impacted by the amendments when it has a transaction or an operation in a foreign currency that is not exchangeable into another currency at a measurement date for a specified purpose. A currency is exchangeable when there is an ability to obtain the other currency (with a normal administrative delay), and the transaction would take place through a market or exchange mechanism that creates enforceable rights and obligations. The Group is assessing the potential impact on its consolidated financial statements resulting from the amendments of IAS 21.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

2. BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (continued)

2.4 New and Revised Turkish Accounting Standards (continued)

b) Standards Issued But Not Yet Effective and Not Early Adopted as of 31 December 2024 (continued)

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. The Group is assessing the potential impact on its consolidated financial statements resulting from IFRS S1.

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. The Group is assessing the potential impact on its consolidated financial statements resulting from IFRS S2.

c) The new amendments that are issued by the International Accounting Standards Board (IASB) but not issued by POA

The following amendments which are issued by IASB but not yet adapted/issued by POA. Therefore, they do not constitute part of TFRS. The Group will make the necessary changes to its consolidated financial statements after the amendments are issued and become effective under TFRS.

IFRS 18 Presentation and Disclosure in Financial Statements;

Effective from annual periods beginning on or after 1 January 2027. This is the new standard on presentation and disclosure in financial statements, with a focus on updates to the statement of profit or loss. The key new concepts introduced in IFRS 18 relate to:

  • The structure of the statement of profit or loss;

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

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

IFRS 19 Subsidiaries without Public Accountability: Disclosures;

Effective from annual periods beginning on or after 1 January 2027. Earlier application is permitted. This new standard works alongside other IFRS Accounting Standards. An eligible subsidiary applies the requirements in other IFRS Accounting Standards except for the disclosure requirements and instead applies the reduced disclosure requirements in IFRS 19. IFRS 19's reduced disclosure requirements balance the information needs of the users of eligible subsidiaries' financial statements with cost savings for preparers. IFRS 19 is a voluntary standard for eligible subsidiaries. A subsidiary is eligible if:

  • It does not have public accountability; and

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

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

2. BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (continued)

2.5 Summary of Significant Accounting Policies

Related Parties

A related party is a person or entity that is related to the entity that is preparing its financial statements (referred to as the 'reporting entity').

(a) A person or a close member of that person's family is related to a reporting entity if that person:

(i) has control or joint control over the reporting entity;

(ii) has significant influence over the reporting entity;

(iii) is a member of the key management personnel of the reporting entity or of a parent of the reporting entity.

(b) An entity is related to a reporting entity if any of the following conditions applies:

(i) The entity and the reporting entity are members of the same group (which means that each parent, subsidiary and fellow subsidiary is related to the others).

(ii) One entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group of which the other entity is a member).

(iii) Both entities are joint ventures of the same third party.

(iv) One entity is a joint venture of a third entity and the other entity is an associate of the third entity.

(v) The entity is a post-employment defined benefit plan for the benefit of employees of either the reporting entity or an entity related to the reporting entity. If the reporting entity is itself such a plan, the sponsoring employers are also related to the reporting entity.

(vi) The entity is controlled or jointly controlled by a person identified in (a).

(vii) A person identified in (a) (i) has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the entity).

Transaction with related party is a transfer of resources, services or liabilities between the reporting entity and the related party, disregarding it is with or without a value.

Revenue

TFRS 15 establishes a comprehensive framework for determining whether, how much and when revenue is recognised.

It replaces existing revenue recognition guidance, including TAS 18 Revenue, TAS 11 Construction Contracts and TFRYK 13 Customer Loyalty Programmes.

General model for revenue recognition

TFRS 15 requires revenue recognition for all contracts with customers to follow the five-step approach to revenue recognition.

Step 1: Identifying the contract with customers

A contract exists only if it is legally enforceable, the collection of the consideration is probable, the rights to goods and services and payment terms can be identified, the contract has commercial substance; and the contract is approved and the parties are committed to their obligations.

If either contracts were negotiated as a single commercial package, or consideration in one contract depends on the other contract or goods or services (or some of the goods or services) are a single performance obligation the Group accounts the contracts as a single contract.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

2. BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (continued)

2.5 Summary of Significant Accounting Policies (continued)

Step 2: Identifying the performance obligations

Group defines 'performance obligation' as a unit of account for revenue recognition. The Group assesses the goods or services promised in a contract with a customer and identifies as a performance obligation either a good or service that is distinct; or a series of distinct goods or services that are substantially the same and have the same pattern of transfer to the customer. A contract may contain promises to deliver a series of distinct goods or services that are substantially the same. At contract inception, an entity determines whether the series of goods or services is a single performance obligation.

Step 3: Determining the transaction price

In order to determine the transaction price, the Group assesses how much consideration it expects to be entitled to by fulfilling the contract. In arriving at the assessment, the Group considers variable elements of consideration, as well as the existence of a significant financing component.

Significant financing component

The Group revises the promised amount of consideration for the effect of a significant financing component to the amount that reflects what the cash selling price of the promised good or service.

As a practical expedient, the Group does not adjust the transaction price for the effects of a significant financing component if, at contract inception, the entity expects the period between customer payment and the transfer of goods or services to be one year or less. In cases where advance for the services are received and the payment scheme is broadly aligned with the Group's performance throughout the period, the Group concludes that the period between performance and payment is never more than 12 months, therefore the expedient is applied.

Variable consideration

The Group identifies items such as price concessions, incentives, performance bonuses, completion bonuses, price adjustment clauses, penalties, discounts, credits, or similar items may result in variable consideration if there is any in a customer contract.

Step 4: Allocating the transaction price to performance obligations

If distinct goods or services are delivered under a single arrangement, then the consideration is allocated based on relative stand-alone selling prices of the distinct goods or services (performance obligations). If directly observable stand-alone selling prices are not available, the total consideration in the service contracts is allocated based on their expected cost plus a margin.

Step 5: Revenue Recognition

The Group recognises revenue over-time if any of the following conditions is met:

  • customer simultaneously receives and consumes the benefits as the entity performs, or
  • the customer controls the asset as the entity creates or enhances it, or
  • Group's performance does not create an asset for which the entity has an use; and alternative there is a right to payment for performance to date.

For each performance obligation that is satisfied over time, an entity selects a single measure of progress, which depicts the transfer of control of the goods or services to the customer. The Group uses a method that measures the work performed reliably. The Group uses cost incurred to measure the progress towards to completion of the project where the input method is used and uses units transferred to measure the progress towards to completion of the project where the output method is used. If a performance obligation is not satisfied over time, then the Group recognise revenue at the point in time at which it transfers control of the good or service to the customer.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

2. BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (continued)

2.5 Summary of Significant Accounting Policies (continued)

The Group recognises a provision in accordance with TAS 37 "Provisions, Contingent Liabilities and Contingent Assets" when the unavoidable costs of meeting the obligations under a contract exceed the economic benefits.

Contract modifications

The Group recognises a contract modification as a separate contract if the modification results in a promise to deliver additional goods or services that are distinct and an increase in the price of the contract by an amount of consideration that reflects the entity's stand-alone selling price of those goods or services adjusted to reflect the circumstances of the contract.

If the goods or services are distinct, then the entity accounts for the modification as if it were a termination of the existing contract and the creation of a new contract.

If the modification to the contract does not add distinct goods or services, then the entity accounts for it on a combined basis with the original contract, as if the additional goods or services were part of the initial contract.

Dividend and interest income

Dividend income from investments is recognized when the shareholder's right to receive payment has been established (provided that it is probable that the economic benefits will flow to the Group and the amount of income can be measured reliably).

Interest income from a financial asset is recognized when it is probable that the economic benefits will flow to the Group and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset's net carrying amount on initial recognition.

The Rental Income

The rental income is charged to the statement of profit or loss on a straight line method bases over the period of the lease.

Inventories

Inventories are stated at the lower of cost and net realizable value. Inventories are valued on the basis of the project according to the weighted average method. Net realizable value represents the estimated selling price less all estimated costs of completion and costs necessary to realize sales. When the net realizable value of inventory is less than cost, the inventory is written down to the net realizable value and the expense is included in statement of profit or loss in the period the writedown or loss occurred. When the circumstances that previously caused inventories to be written down below cost no longer exist or when there is clear evidence of an increase in net realizable value because of changed economic circumstances, the amount of the write-down is reversed. The reversal amount is limited to the amount of the original write-down.

Property, Plant and Equipment

Land held for use in the production or supply of goods or services, or for administrative purposes, are stated in the consolidated statement of financial position at their revalued amounts, being the fair value at the date of revaluation, less any subsequent accumulated impairment losses.

Revaluations are performed with sufficient regularity such that the carrying amounts do not differ materially from those that would be determined using fair values at the end of each reporting period.

Any increase in the fair value arising on the revaluation of such land is recognized in gain on revaluation of property.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

2. BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (continued)

2.5 Summary of Significant Accounting Policies (continued)

Property, Plant and Equipment (continued)

A decrease in the carrying amount arising on the revaluation of such land is recognized in profit or loss to the extent that it exceeds the balance in the accumulated in the equity, if any, held in the properties revaluation reserve relating to a previous revaluation of that asset.

On the subsequent sale or retirement of a revalued property, the attributable revaluation surplus remaining in the properties revaluation reserve inequity is transferred directly to retained earnings.

Land is not depreciated. Property, plant and equipment other than lands are carried at cost less accumulated depreciation and any accumulated impairment losses.

Properties in the course of construction for production, rental or administrative purposes, or for purposes not yet determined, are carried at cost, less any recognized impairment loss. Borrowing cost is capitalized when the assets took a substantial period of time to get ready for their intended use or sale.

These assets are classified to property, plant, and equipment when the assets are completed and ready for their intended use. Depreciation of these assets, on the same basis as other property assets, commences when the assets are ready for their intended use.

Depreciation is charged as to write off the cost of assets, other than land and properties under construction, over their estimated useful lives, using the straight-line method. The estimated useful lives, residual values and depreciation method are reviewed at each year end, with the effect of any changes in estimate accounted for on a prospective basis.

Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets. If the ownership of the finance lease is not obvious at the end of the leasing period, it is depreciated over their expected useful lives or, where shorter, the term of the relevant lease.

The gain or loss arising on the disposal or retirement of an item of Property, Plant and Equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in profit or loss.

The maintenance and repair expenses arising from changing any part of the fixed assets can be realized if the economic benefit of the asset is increased. All other expenses are recognized in the expense accounts in the consolidated profit and loss when they are realized.

The useful lives of Property, Plant and Equipment are as follows:

Useful life
5-50 years
7-25 years
2-35 years
3-7 years
2-50 years
2-11 years
2-20 years

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

2. BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (continued)

2.5 Summary of Significant Accounting Policies (continued)

Intangible Assets

Intangible assets acquired

Intangible assets acquired are recognized at cost less accumulated amortization and accumulated impairment losses. Amortization is charged on a straight-line basis over their estimated useful lives. The estimated useful life and amortization methods are reviewed at the end of each annual reporting period, with the effect of any changes in accounting estimates for on a prospective basis.

Trademarks and Licenses

Acquired licenses are shown at historical cost. Licenses have a finite useful life and are carried at cost less accumulated amortization. Amortization is calculated using the straight-line method to allocate the cost of licenses over their estimated useful lives.

Computer software

Acquired computer software licenses are capitalized on the basis of the costs incurred to acquire and bring to use the specific software. These costs are amortized over their estimated useful lives.

Right-of-use assets

The Group reflects the non-cancellable operating leases over one year, which include the right to control the use of the asset defined in the contract, as a right-of-use asset in the accounting records. The right of use is calculated by discounting the lease payments to their present value over the interest rate stated in the contract, either explicitly or secretly. Right-of-use asset is amortized over the lease term.

Internally generated intangible assets – Research and Development

Expenditure on research activities is recognized as an expense in the period in which it is incurred.

An internally-generated intangible asset arising from development (or from the development phase of an internal project) is recognized if, and only if, all of the following have been demonstrated:

• The technical feasibility of completing the intangible asset so that it will be available for use or sale,

  • The intention to complete the intangible asset and use or sell it,
  • The ability to use or sell the intangible asset,
  • How the intangible asset will generate probable future economic benefits,

• The availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and

• The ability to measure reliably the expenditure attributable to the intangible asset during its development.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

2. BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (continued)

2.5 Summary of Significant Accounting Policies (continued)

Intangible Assets (continued)

Internally generated intangible assets – R&D expenditure (continued)

The amount initially recognized for internally-generated intangible assets is the sum of expenditure incurred from the date when the intangible asset first meets the recognition criteria listed above. Where no internally-generated intangible asset can be recognized, development expenditure is charged to profit or loss in the period in which it is incurred.

Subsequent to initial recognition, internally-generated intangible assets are reported at cost less accumulated amortization and accumulated impairment losses, on the same basis as intangible assets acquired separately.

The useful lives of the intangible assets are as follows:

Useful life
Rights 1-15 years
Computer software 2-3 years
Development expenditures 1-5 years

Borrowing Cost

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

When the Group borrows funds specifically for the purpose of the qualifying assets, the amount of borrowing costs eligible for capitalization is the actual borrowing costs incurred on that borrowing during the period less any investment income on the temporary investment of those borrowings.

Financial Instruments

TFRS 9 Financial Instruments sets out requirements for recognising and measuring financial assets, financial liabilities and some contracts to buy or sell non-financial items. This standard replaces TAS 39 Financial Instruments: Recognition and Measurement.

i. Classification – Financial assets

TFRS 9 contains a new classification and measurement approach for financial assets that reflects the business model in which assets are managed and their cash flow characteristics.

TFRS 9 contains three principal classification categories for financial assets: measured at amortised cost, Fair Value Through Other Comprehensive Income ("FVOCI") and Fair Value Through Profit or Loss ("FVTPL"). The standard eliminates the existing TAS 39 categories of held to maturity, loans and receivables and available for sale. Financial investments classified as "Available for Sale Financial Assets" in accordance with TAS 39 are classified as FVOCI in accordance with TFRS 9.

Under TFRS 9, derivatives embedded in contracts where the host is a financial asset in the scope of the standard are never bifurcated. Instead, the hybrid financial instrument as a whole is assessed for classification. The Group does not have any embedded derivatives as of reporting date.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

2. BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (continued)

2.5 Summary of Significant Accounting Policies (continued)

Financial Instruments (continued)

ii. Impairment – Financial assets and contract assets

TFRS 9 replaces the 'incurred loss' model in TAS 39 with a forward-looking 'expected credit loss' (ECL) model. This requires considerable judgement about how changes in economic factors affect ECLs, which is determined on a probability-weighted basis.

The new impairment model applies to financial assets measured at amortised cost or FVOCI, except for investments in equity instruments, and to contract assets.

Under TFRS 9, loss allowances are measured on either of the following bases:

  • 12-month ECLs: these are ECLs that result from possible default events within the 12 months after the reporting date; and
  • lifetime ECLs: these are ECLs that result from all possible default events over the expected life of a financial instrument.

Lifetime ECL measurement (simplified approach) is always applied to trade receivables and contract assets without a significant financing component.

iii. Classification – Financial liabilities

TFRS 9 largely retains the existing requirements in TAS 39 for the classification of financial liabilities.

However, under TAS 39 all fair value changes of liabilities designated as at FVTPL are recognised in profit or loss, whereas under TFRS 9 these fair value changes are generally presented as follows:

The amount of change in the fair value that is attributable to changes in the credit risk of the liability is presented in OCI; and the remaining amount of change in the fair value is presented in profit or loss.

The Group has not identified any liability for the fair value recognized in profit or loss and has no objective purpose.

iv. Hedge accounting

When initially applying TFRS 9, the Group may choose as its accounting policy to continue to apply the hedge accounting requirements of TAS 39 instead of the requirements in TFRS 9. During selection of the accounting policies, TFRS 9 gives option of continuing with TAS 39 hedge accounting principles and deferring hedge accounting rules in accordance with TFRS 9. The Group does not apply hedge accounting.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

2. BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (continued)

2.5 Summary of Significant Accounting Policies (continued)

Capital

Common Stocks

Common stocks are classified as equity. Incremental costs that can be directly attributable to the issue of ordinary shares are recognised as a deduction from equity considering the tax effect.

Leasing

Leasing- the group as lessor

The Group recognizes the contracts that include the right to control the use of an asset, the transfer of it for a specified period and for a certain price, as lease agreements and accounts for the relevant contractual rights as "right-of-use asset".

The right-of-use asset includes the initial measurement amount of the lease liability, all lease incentives and discounts related to the lease, all direct costs incurred and all costs related to dismantling / moving the defined asset. The Group applies the short-term lease registration exemption for assets that have a lease term of twelve months or less from the start date and do not have a purchase option.

The Group depreciates the right-of-use asset based on the lease term and values it at cost.

The lease obligation, on the other hand, is measured over the present value of unrealized lease payments at the actual start date. Lease payments are discounted using the implied interest rate, if any, otherwise the lessee's alternative borrowing interest rate.

Foreign Currency Transactions

Foreign currency transactions and balances

The financial statements of each Group entity are presented in the currency of the primary economic environment in which the entity operates as its "functional currency". For the purpose of the consolidated financial statements, the operational results and financial position of each entity are expressed in TL, which is the functional currency of the Company, and the presentation for consolidated financial statements.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

2. BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (continued)

2.6 Summary of Significant Accounting Policies (continued)

Foreign Currency Transactions (continued)

Foreign currency transactions and balances (continued)

In preparing the financial statements of the individual entities, transactions in foreign currencies (other than TL) are recorded at the rates of exchange prevailing on the dates of the transactions. At each balance sheet date, monetary items (including advances) denominated in foreign currencies are retranslated at the rates prevailing on the balance sheet date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

Exchange differences are accounted for the period in profit or loss in which they are incurred except for the following cases:

  • Exchange differences which relate to assets under construction for future productive use, which are included in the cost of those assets where they are regarded as an adjustment to interest costs on foreign currency borrowings;
  • Exchange differences on transactions entered into in order to hedge certain foreign currency risks (see below for hedging accounting policies); and
  • Exchange differences on monetary items receivable from or payable to a foreign operation for which settlement is neither planned nor likely to occur, which form part of the net investment in a foreign operation, and which are recognized in the foreign currency translation reserve and recognized in profit or loss on disposal of the net investment.

Earnings per Share

Earnings per share, disclosed in the consolidated statement of profit or loss, are determined by dividing the net income attributable to equity holders of the parent by the weighted average number of shares outstanding during the period concerned.

In Türkiye, companies can increase their share capital by distributing "bonus shares" to shareholders from retained earnings. In computing earnings per share, such "bonus share" distributions are assessed as issued shares. Accordingly, the weighted average number of shares is computed by taking into consideration of the retrospective effects of the share distributions.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

2. BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (continued)

2.5 Summary of Significant Accounting Policies (continued)

Events After the Reporting Period

Events after the reporting periods include all events that take place between the balance sheet date and the date of authorization for the release of the financial statements, although the events occurred after the announcements related to the net profit/loss or even after the public disclosure of other selective financial information.

In the case that events occur requiring an adjustment, the Group adjusts the amount recognized in its consolidated financial statements to reflect the adjustments after the balance sheet date.

Provisions, Contingent Liabilities and Contingent Assets

Provisions are recognized when the Group has a present obligation as a result of a past event, and it is probable that the Group will be required to settle that obligation, and a reliable estimate can be made for the amount of the obligation.

The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the balance sheet date, taking into account the risks and uncertainties related with the obligation.

Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognized as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

2. BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (continued)

2.5 Summary of Significant Accounting Policies (continued)

Operating Segments

Operations of the Company are technical system design, development, production and after-sales services for various products for defense industry. One kind of operating segment has occurred in consequence of similarities between methods that are used for products, quality of services and processes, client's type and class, and distribution or presentation of products. It is not required to disclose segment reporting for the consolidated subsidiaries, since revenue profit/loss and assets are below 10 percent of consolidated amounts.

Government Grants and Incentives

Government grants are not recognized until there is reasonable assurance that the Group will comply with the conditions attaching to them and that the grants will be received.

Government grants are recognized in profit or loss on a systematic basis over the periods in which the Group recognizes as expenses the related costs for which the grants are intended to compensate. Specifically, government grants whose primary condition is that the Group should purchase, construct or otherwise acquire non-current assets are recognized as deferred revenue in the consolidated statement of financial position and transferred to profit or loss on a systematic and rational basis over the useful lives of the related assets.

Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Group with no future related costs are recognized in profit or loss in the period in which they become receivable.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

2. BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (continued)

2.5 Summary of Significant Accounting Policies (continued)

Taxes Calculated on the Basis of the Company's Earnings

Turkish tax legislation does not permit a parent company and its subsidiary to file a consolidated tax return. Therefore, provisions for taxes, as reflected in the accompanying consolidated financial statements, have been calculated on a separate-entity basis.

Income tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the statement of profit or loss because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.

Deferred tax

Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax liabilities are recognized for all taxable temporary differences and deferred tax assets are recognized for deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be used. Deferred tax assets and liabilities are not recognized if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries and associates, and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognized to the extent that it is probable that future taxable profits will be available against which they can be used.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

2. BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (continued)

2.5 Summary of Significant Accounting Policies (continued)

Taxes Calculated on the Basis of the Company's Earnings (continued)

Deferred tax (continued)

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the balance sheet date. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.

Current and deferred tax for the period

Tax, provided that it is not related with a transaction directly recognized in equity, is classified in the statement of profit or loss. Otherwise, tax is recognized under equity.

Employee Benefits

Termination and retirement benefits

Under Turkish law and union agreements, lump sum payments are made to employees retiring or involuntarily leaving the Group. Such payments are considered as being part of defined retirement benefit plan as per TAS 19 "Employee Benefits" ("TAS 19").

The retirement benefit obligation recognized in the consolidated financial statements represents the present value of the defined benefit obligation.

The actuarial gains and losses are recognized in other comprehensive income.

Dividend and bonus plans

The Group recognizes a liability and an expense for bonuses and dividend, based on a formula that takes into consideration the profit attributable to the Company's shareholders after certain adjustments. The Group recognizes a provision where contractually obliged or where there is a past practice that has created a constructive obligation.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

2. BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (continued)

2.5 Summary of Significant Accounting Policies (continued)

Employee Benefits (continued)

Statement of Cash Flows

Current period statement of cash flows is categorized and reported as operating, investing and financing.

Offsetting

Financial assets and financial liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Group currently has a legally enforceable right to offset the amounts and intends either to settle them on a net basis or to realize the asset and settle the liability simultaneously.

Non-Current Assets Held for Sale

Non-current assets are classified as "assets held for sale" when their carrying amount is to be recovered principally through a sale transaction and a sale is considered highly probable. They are stated at the lower of carrying amount and fair value less costs to sell. The assets can be a part of the Entity, disposal group as a single fixed asset.

2.6 Critical Accounting Judgments and Estimates

Critical judgments in applying the Group's accounting policies

In the process of applying the accounting policies, which are described in note 2.5, management has made the following judgments that have the most significant effect on the amounts recognized in the financial statements:

Deferred tax

Deferred tax assets and liabilities are recorded using substantially enacted tax rates for the effect of temporary differences between book and tax bases of assets and liabilities. Currently, there are deferred tax assets resulting from operating loss carry-forwards and deductible temporary differences, all of which could reduce taxable income in the future. Based on available evidence, both positive and negative, it is determined whether it is probable that all or a portion of the deferred tax assets will be realized.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

2. BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (continued)

2.6 Critical Accounting Judgments and Estimates (continued)

Critical judgments in applying the Group's accounting policies (continued)

Deferred tax (continued)

The main factors which are considered include future earnings potential; cumulative losses in recent years; history of loss carry-forwards and other tax assets expiring; the carry-forward period associated with the deferred tax assets; future reversals of existing taxable temporary differences; tax-planning strategies that would, if necessary, be implemented, and the nature of the income that can be used to realize the deferred tax asset. If based on the weight of all available evidence, it is the Group's belief that taxable profit will not be available sufficient to utilize some portion of these deferred tax assets, then provision is set for some portion of or all of the deferred tax assets (Note 28).

Liabilities with respect to employee benefits

The Group makes various assumptions on discount, inflation rate, wage increase rate, the probability of quitting voluntarily for calculating provisions for employee benefits and retirement pays (Note 17).

Useful lives of tangible and intangible assets

The Group amortizes the non-current assets based on the useful lives of those assets stated in the accounting policies (Note 11-12).

Escalation

As of the reporting dates, the amounts of the projects subject to escalation are calculated with respect to the provisions of the contracts and estimated in accordance with TFRS 15 "Revenue from Contracts with Customers".

Provision for guarantee expenses

The Group calculates provision, according to the budgeted estimations for specific parts of the sales under the scope of warranty that needs specific guarantee calculations, and according to the realizations in previous years for the remaining part of the sales (Note 15).

Development Expenses

As of reporting dates, the Management assess the recoverability of the expenses regarding the Group's development activities. These expenses are started to be amortized with respect to their useful lives when their development phases are completed and it becomes probable that there is an associated economic benefit. When the development phase is completed and no economic benefit is foreseen, the related expenses are recognized in consolidated income statement (Note 12).

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

3. CASH AND CASH EQUIVALENTS

31 December 31 December
2024 2023
Cash 1.064 1.304
Bank
-
Time deposit
15.436.603 9.126.661
-
Demand deposit
1.050.160 394.898
Other 149.437 7.692
Cash and cash equivalents on the cash flow statement 16.637.264 9.530.555
Interest income accruals -- 12.924
16.637.264 9.543.479

As of 31 December 2024, the Group has time deposits denominated in foreign currencies with maturities on January 2025 (31 December 2023: January 2024), with the interest rates between 0,50 percent and 3 percent (31 December 2023: 2,50 percent and 3,50 percent) amounting to TL 1.873.089 (31 December 2023: TL 2.929.097) in several banks.

As of 31 December 2024, the Group has time deposits denominated in TL terms with maturities on January 2025 (31 December 2023: January 2024) with the interest rates between 48,50 percent and 49,25 percent (31 December 2023: 41,50 percent and 42,00 percent) amounting to TL 13.563.514 (31 December 2023: TL 6.197.564) in several banks.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

4. INTERESTS IN OTHER ENTITIES

a) Subsidiaries

Details of the Group's material subsidiaries as of 31 December are as follows:

Group's proportion of ownership
and voting power held (%)
Subsidiaries Location Functional
Currency
31 December
2024
31 December
2023
Main Activity
ASELSANNET Türkiye TL 100 100 Communication systems
ASELSAN Baku Azerbaijan AZN 100 100 Marketing and sales of
the group products
ASELSAN Global Türkiye TL 100 100 Export
ASELSAN Optik Türkiye TL 80 80 Sensitive optic
technologies
Mikro AR-GE Türkiye TL 85 85 Microelectronic R&D
projects
ASELSAN Malaysia Malaysia MYR 100 100 Remote controlled
weapon systems
ASELSAN Konya Türkiye TL 51 51 Weapon and weapon
systems
BITES Türkiye TL 100 100 Defense, Aerospace,
Space Technologies,
Software
ASELSAN Ukraine Ukraine UAH 100 100 Marketing and sales of
the group products
ASELSAN Latin
Amerika
Chile CLP 100 -- Marketing and business
development
ASELSAN UAE BAE AED 100 100 Marketing and business
development

Composition of the Group

Explained in Note 1.

Change in the Group's ownership interest in a subsidiary:

Change in the Group's subsidiaries ownership is explained in Note 2.1

b) Joint Ventures

Where a Group entity undertakes its activities under joint venture arrangements directly, the Group's share of jointly controlled assets and any liabilities incurred jointly with other ventures are recognized in the financial statements of the relevant entity and classified according to their nature. Liabilities and expenses incurred directly in respect of interests in jointly controlled assets are accounted for on an accrual basis. Income from the sale or use of the Group's share of the output of jointly controlled assets, and its share of joint venture expenses, are recognized when it is probable that the economic benefits associated with the transactions will flow to/from the Group and their amount can be measured reliably.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

5. RELATED PARTY DISCLOSURES

Transactions between the Company and its subsidiaries which are related parties of the Company have been eliminated on consolidation, therefore have not been disclosed in this note.

The trade receivables from related parties generally arise from sales activities with maturitie of 1 year.

The trade payables to related parties generally arise from the purchase activities with maturities of 1-4 months.

Total amount of salaries and other short-term benefits paid for key management for the period ended 31 December 2024 is approximately TL 368.485 (The vast majority consists of paid wages and benefits.) (31 December 2023: TL 385.968).

The details of transactions between the Group and other related parties are disclosed in the following pages.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

5. RELATED PARTY DISCLOSURES (continued)

31 December 2024
Receivables Payables
Short-term Long-term Short-term Long-term
Prepaid Other Prepaid Deferred
Balances with related parties Trading Expenses Receivables Trading Expenses Trading Income Other Payables1 Trading Deferred Income
Main shareholder
TSKGV -- -- -- -- -- -- -- 340.357 -- --
Main shareholder's subsidiaries and associates
Hava Elektronik San. ve Tic. Anonim Şirketi (''HAVELSAN'') 51.907 540.715 -- 14.818 207.112 845.770 6 -- -- 643.486
HAVELSAN Teknoloji Radar San. ve Tic. Anonim Şirketi ("HTR") 41.186 223.300 -- -- 51.535 527.150 11.851 -- -- --
İşbir Elektrik Sanayii Anonim Şirketi ("İŞBİR") -- 187.410 -- -- 42.099 77.256 -- -- --
NETAŞ Telekomünikasyon Anonim Şirketi ("NETAŞ") -- 8.204 -- -- 18.527 42.308 -- -- --
Savunma Teknolojileri Mühendislik ve Ticaret Anonim Şirketi
("STM") 137.819 20.725 -- 745.830 -- 18.321 -- -- 632.133
Tusaş Motor Sanayii Anonim Şirketi ("TEI") 43.853 -- -- -- -- -- -- --
Türk Havacılık ve Uzay Sanayi ve Ticaret Anonim Şirketi ("TUSAŞ") 4.035.731 -- -- 2.310.786 -- 14.134 359.211 -- -- --
Financial Instruments
ASPİLSAN Enerji Sanayi ve Ticaret Anonim Şirketi ("ASPİLSAN") -- 23.766 -- -- 4.826 19.164 4.697 -- -- --
Roket Sanayi ve Ticaret Anonim Şirketi ("ROKETSAN") 3.750.514 75.052 -- 393.294 830.853 464.670 516.322 -- -- 262.645
Joint ventures and its related parties
ASELSAN Bİlkent Mikro Nano -- 245.937 -- -- 73.482 88.244 -- -- -- --
İhsan Doğramacı Bilkent Üniversitesi -- 6.221 -- -- -- 37 -- -- -- --
IGG 21.670 -- -- 3.038 -- -- 2.334 -- -- --
IGG ASELSAN 6.065 36.380 -- -- 3.627 24.227 -- -- -- --
ASELSAN Kazakhstan 298.626 -- -- 59.682 -- 288 1.381 -- -- --
ASELSAN Jordan 123.051 -- -- -- -- 26.057 348 -- -- 5.513
TÜBİTAK BİLGEM -- 84.949 -- -- 13.886 100.892 -- -- -- --
TÜBİTAK-UME -- 2.494 -- -- -- 3 -- -- -- --
TÜBİTAK BİLİMSEL TEKNOLOJİK ARAŞTIRMA 9.858 45.597 -- 307.947 1.283 3.729 5.515 -- -- 13.795
TÜBİTAK SAGE Savunma Sanayii 30.027 196.544 -- 9.707 77.070 154.584 1.020 -- -- --
Savunma Sanayi Başkanlığı ("SSB") 3.161.285 -- -- 36.295.518 -- -- 4.766.811 -- -- 5.430.149
SSTEK 3 -- -- -- -- -- 398.792 -- -- 16.471
ULAK 932.665 2.374 -- -- -- 3.266 -- -- -- --
TÜYAR 52.128 -- -- -- -- -- -- -- --
EHSİM -- 160.479 -- -- 2.636 48.523 -- -- -- --
Shares offered to the public -- -- -- -- -- -- -- -- -- --
12.644.260 1.912.275 -- 40.140.620 1.326.936 2.458.623 6.068.288 340.357 -- 7.004.192

1 All other short term payable is 2023 divident payments.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

5. RELATED PARTY DISCLOSURES (continued)

31 December 2023
Receivables Payables
Short-term Long-term Short-term Long-term
Prepaid Other Prepaid Deferred
Balances with related parties Trading Expenses Receivables Trading Expenses Trading Income Other Payables1 Trading Deferred Income
Main shareholder
TSKGV 167 -- -- -- -- -- -- 385.415 -- --
Main shareholder's subsidiaries and associates
Hava Elektronik San. ve Tic. Anonim Şirketi (''HAVELSAN'') 116.452 421.410 -- 22.687 63.943 586.764 -- -- -- --
HAVELSAN Teknoloji Radar San. ve Tic. Anonim Şirketi ("HTR") 12.886 294.752 -- -- 6.333 253.536 1.617 -- -- 819
İşbir Elektrik Sanayii Anonim Şirketi ("İŞBİR") -- 318.045 -- -- -- 112.324 -- -- -- --
NETAŞ Telekomünikasyon Anonim Şirketi ("NETAŞ") -- 51.569 -- -- 15.880 269.207 -- -- -- --
Savunma Teknolojileri Mühendislik ve Ticaret Anonim Şirketi
("STM") 784.615 28.986 -- 558.567 -- 36.619 -- -- -- 280.753
Türk Havacılık ve Uzay Sanayi ve Ticaret Anonim Şirketi ("TUSAŞ") 2.528.965 -- -- 2.482.978 -- 1.047 192.372 -- -- 223.090
Financial Instruments
ASPİLSAN Enerji Sanayi ve Ticaret Anonim Şirketi ("ASPİLSAN") 711 58.843 -- -- -- 110.339 6.782 -- -- --
Roket Sanayi ve Ticaret Anonim Şirketi ("ROKETSAN") 2.941.545 214.329 -- 437.769 1.842.572 2.548.053 352.052 -- -- 103.116
Joint ventures and its related parties
ASELSAN Bİlkent Mikro Nano -- 284.481 -- -- 31.119 137.534 -- -- -- --
İhsan Doğramacı Bilkent Üniversitesi 43 7.713 -- -- -- 19.079 -- -- -- --
IGG 372.279 -- -- 6.116 -- -- -- -- -- --
IGG ASELSAN 49.701 37.498 -- -- 5.236 30.697 -- -- -- --
ASELSAN Kazakhstan 556.015 -- -- -- -- 347 64 -- -- 24
ASELSAN Jordan 204.544 -- -- -- -- 52.997 8.211 -- -- --
TÜBİTAK BİLGEM -- 111.869 -- -- 14.780 84.184 -- -- -- --
TÜBİTAK-UME -- 976 -- -- -- 780 -- -- -- --
TÜBİTAK BİLİMSEL TEKNOLOJİK ARAŞTIRMA 43.321 11.184 -- 237.341 2.079 18.386 31.867 -- -- 18.263
TÜBİTAK SAGE Savunma Sanayii 15.851 401.633 -- -- 64.004 311.873 7.147 -- -- --
Savunma Sanayi Başkanlığı ("SSB") 5.433.244 -- -- 30.756.362 -- -- 2.937.718 -- -- 4.196.213
SSTEK -- -- -- -- -- -- 213.563 -- -- 466.588
EHSİM -- 15.962 -- -- 21.296 38.594 -- -- -- --
DASAL -- -- -- -- -- 11.392 -- -- -- --
TR Eğitim -- -- -- -- -- 224 -- -- -- --
Shares offered to the public -- -- -- -- -- -- -- -- -- --
13.060.339 2.259.250 -- 34.501.820 2.067.242 4.623.976 3.751.393 385.415 -- 5.288.866

1 All other short term payable is 2022 divident payments.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

5. RELATED PARTY DISCLOSURES (continued)

1 January 1 January
31 December 31 December
2024 2023
Transactions with related parties Purchases Purchases
Main Shareholder
TSKGV 2.105 3.388
Main shareholder's subsidiaries and associates
NETAŞ 152.112 393.838
STM 47.290 47.160
İŞBİR 322.818 409.055
HTR 1.210.471 535.555
TUSAŞ 28.120 23.812
HAVELSAN 1.091.204 432.375
Financial Instruments
ROKETSAN 58.231 3.542.013
ASPİLSAN 171.293 164.092
Joint ventures and its related parties
İHSAN DOĞRAMACI BİLKENT ÜNİVERSİTESİ 2.094 35.470
TÜBİTAK BİLGEM 207.945 185.979
IGG 200.974 --
TÜBİTAK BİLİMSEL TEKNOLOJİK ARAŞTIRMA 7.052 --
TÜBİTAK UME 2.973 3.019
TÜBİTAK SAGE SAVUNMA SANAYİİ 580.378 399.562
SSTEK 777 235
4.085.837 6.175.553

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

5. RELATED PARTY DISCLOSURES (continued)

1 January 1 January
31 December 31 December
2024 2023
Transactions with related parties Sales Sales
Main Shareholder
TSKGV 565 27.315
Main shareholder's subsidiaries and associates
TUSAŞ 11.170.655 14.676.122
STM 1.149.117 4.038.933
HAVELSAN 157.946 201.227
HTR 62.973 36.640
İŞBİR -- 6.801
TEI 115.027 --
Financial Instruments
ROKETSAN 2.422.052 3.627.938
ASPİLSAN 2.241 2.704
Joint ventures and its related parties
İHSAN DOĞRAMACI BİLKENT ÜNİVERSİTESİ -- 112
TÜBİTAK BİLİMSEL TEKNOLOJİK ARAŞTIRMA 5.660 37.511
TÜBİTAK SAGE SAVUNMA SANAYİİ 14.473 32.516
SSB 64.151.578 83.159.805
SSTEK 5.108.001 303.569
84.360.288 106.151.193

Transactions with related parties are generally related to the purchases and sales of goods and services related to projects under TFRS 15 "Revenue from Contracts with Customers".

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

6. TRADE RECEIVABLES AND PAYABLES

a) Trade receivables

Details of the Group's trade receivables are as follows:

Short-term trade receivables 31 December
2024
31 December
2023
Trade receivables 15.661.995 16.615.916
Trade receivables from related parties (Note 5) 12.644.260 13.060.339
Notes receivable 40.681 35.611
Other receivable 8.498 20.240
Doubtful trade receivables 32.291 76.488
Allowance for doubtful trade receivables (-) (32.291) (76.488)
28.355.434 29.732.106
Long-term trade receivables 31 December
2024
31 December
2023
Unbilled receivables from contracts with customers 14.074.580 10.207.858
Trade receivables
Unbilled receivables from contracts with customers
763.738 927.499
-Related party (Note 5) 40.140.620 34.498.080
Trade receivables from related parties (Note 5) -- 3.740
54.978.938 45.637.177

The movement for the Group's allowance for doubtful receivables is as follows:

31 December
2024
31 December
2023
Opening balance 76.488 72.130
Provision for the period (20.686) 32.713
Monetary gain/(loss) (23.511) (28.355)
Closing balance 32.291 76.488

The sectorial distribution of trade receivables is as follows:

31 December
2024
31 December
2023
Public sector 46.875.565 43.214.700
Private sector 30.298.329 22.747.613
Receivables from companies operating abroad 6.160.478 9.406.970
Total receivables 83.334.372 75.369.283

Receivables from public sector represent the receivables are due from the Presidency of Defense Industry and other public entities. The Group's operations are based on contracts and no other collaterals are obtained from the customers.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

6. TRADE RECEIVABLES AND PAYABLES (continued)

b) Trade payables

Details of The Group's trade payables are as follows:

31 December 31 December
Short-term trade payables 2024 2023
Trade payables 15.763.624 14.929.454
Due to related parties (Note 5) 2.458.623 4.623.976
Notes payable 1.124.644 1.565.332
Other trade payables 413.643 341.815
19.760.534 21.460.577
31 December 31 December
Long-term trade payables 2024 2023
Other trade payables -- 8.797
Notes payables -- 100.210
-- 109.007

7. OTHER RECEIVABLES AND PAYABLES

a) Other receivables

31 December 31 December
Short-term other receivables 2024 2023
Receivables from tax office1 1.926.488 1.928.750
Deposits and guarantees given 15.196 19.168
Other2 543.762 435.061
2.485.446 2.382.979
31 December 31 December
Long-term other receivables 2024 2023
Deposits and guarantees given 11.898 10.509
b)
Other payables
31 December 31 December
Short-term other payables 2024 2023
Short-term other payables 134.053 66.354
Deposits and guarantees received 57.784 19.144
Leasing liabilities 16.369 22.922
Short-term other payables to related parties (Note 5) 340.357 385.415
548.563 493.835
31 December 31 December
Long-term other payables 2024 2023
Deposits and guarantees received 7.053 8.619
Other payables
Leasing Liabilities
5.291
6.956
16.216
28.074

1 Mainly comprises Value Added Tax (VAT) returns and are expected to be offseted in the following periods.

2 Consists of R&D Center social security premium incentive and R&D Center income tax exceptions.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

8. EQUITY ACCOUNTED INVESTMENTS

The Group's financial information for its shareholdings consolidated with equity method , that are not presented,according to the Group's ownership rates are as below:

Ownership Current Non-current Total Short-term Long-term Total
31
December
2024
Rate (%) Assets Assets Assets Liabilities Liabilities Liabilities
ASELSAN KAZAKHSTAN 49 466.015 435.388 901.403 380.685 30.430 411.115
ASELSAN JORDAN 49 249.422 125.433 374.855 148.325 19.843 168.168
IGG ASELSAN 49 156.783 257 157.040 40.108 5.416 45.524
ASELSAN BİLKENT 50 263.410 1.060.904 1.324.314 67.215 515.549 582.764
TEKNOHAB 13 210.187 28.138 238.325 1.689 -- 1.689
EHSİM 50 467.896 25.787 493.683 89.777 209.218 298.995
TÜYAR 51 62.113 46.377 108.490 51.867 -- 51.867
TR EĞİTİM 35 68.334 66.008 134.342 1.975 -- 1.975
ADIYAMAN KABLO 15 162.131 305 162.436 4.075 -- 4.075
ULAK 51 1.342.915 2.206.758 3.549.672 1.440.702 1.457.585 2.898.286
İSTANBUL FİNANS 44 11.507 786 12.293 11.775 -- 11.775
3.460.713 3.996.141 7.456.853 2.238.193 2.238.041 4.476.233

Ownership Group Share
31
December
2024
Rate (%) Revenue Expenses Net Profit/(Loss) of Net Assets Group Share of Profit/(Loss)
ASELSAN KAZAKHSTAN 49 460.660 (416.101) 44.559 240.240 21.834
ASELSAN JORDAN 49 59.633 (105.232) (45.599) 101.276 (22.344)
IGG ASELSAN 49 32.495 (48.707) (16.212) 54.644 (7.944)
ASELSAN BİLKENT 50 768.318 (743.953) 24.365 370.775 12.182
BARQ QSTP LLC. 48 -- -- -- 5.730 --
TEKNOHAB 13 88.711 (17.601) 71.110 30.857 9.273
EHSİM 50 392.805 (337.135) 55.670 97.344 27.835
DASAL1 -- -- -- -- -- (6.951)
TÜYAR 51 12.122 (14.095) (1.973) 28.878 (1.006)
TR EĞİTİM 35 95.516 (81.872) 13.644 46.329 4.775
ADIYAMAN KABLO 15 27.290 (9.275) 18.016 23.754 2.702
ULAK 51 975.008 (1.136.100) (161.092) 332.207 (82.157)
İSTANBUL FİNANS 44 8.543 (44.978) (36.435) 230 (16.193)
2.921.101 (2.955.049) (33.947) 1.332.264 (57.994)

1 %49 of Dasal shares was transferred on 25 October 2024.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

8. EQUITY ACCOUNTED INVESTMENTS (continued)

Ownership Current Non-current Total Short-term Long-term Total
31 December 2023 Rate (%) Assets Assets Assets Liabilities Liabilities Liabilities
ASELSAN KAZAKHSTAN 49 578.845 638.552 1.217.397 559.994 37.739 597.733
ASELSAN JORDAN 49 366.101 162.845 528.946 181.659 40.169 221.828
IGG ASELSAN 49 188.665 387 189.052 29.944 3.520 33.464
ASELSAN BİLKENT 50 744.261 1.002.619 1.746.880 337.192 692.502 1.029.694
TEKNOHAB 13 179.654 26.822 206.476 40.950 -- 40.950
EHSİM 50 527.783 41.653 569.436 148.144 358.156 506.300
DASAL 49 152.074 353.567 505.641 52.286 -- 52.286
TÜYAR 51 28.542 42.145 70.687 12.089 -- 12.089
TR EĞİTİM 35 118.449 4.795 123.244 4.521 -- 4.521
İSTANBUL FİNANS 44 8.514 1.395 9.909 1.913 7.996 9.909
2.892.888 2.274.780 5.167.668 1.368.692 1.140.082 2.508.774
Ownership Group Share Group Share of
31 December 2023 Rate (%) Revenue Expenses Net Profit/(Loss) of Net Assets Profit/(Loss)
ASELSAN KAZAKHSTAN 49 283.805 (290.266) (6.461) 303.636 (3.166)
ASELSAN JORDAN 49 192.726 (195.870) (3.144) 150.488 (1.541)
IGG ASELSAN 49 76.090 (55.701) 20.389 76.237 9.991
ASELSAN
BİLKENT
50 837.786 (870.003) (32.217) 358.592 (16.109)
BARQ QSTP LLC. 48 -- -- -- 5.730 --
TEKNOHAB 13 31.736 (16.657) 15.079 21.585 1.966
EHSİM 50 534.195 (535.597) (1.402) 31.568 (701)
DASAL 49 57.433 (69.445) (12.012) 222.144 (5.886)
TÜYAR 51 9.515 (6.334) 3.181 29.885 1.622
TR EĞİTİM 35 143.387 (75.583) 67.804 41.553 23.731
İSTANBUL FİNANS 44 3.497 (30.580) (27.083) -- (12.034)
2.170.170 (2.146.036) 24.134 1.241.418 (2.127)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

9. INVENTORIES

31 December 31 December
2024 2023
Raw materials 25.620.024 26.647.066
Work in progress 12.551.533 13.305.250
Goods in transit 1 20.921 2.503.701
Finished goods 1.549.822 3.126.662
Other inventories 2.742.552 239.030
Trade goods 1.007.804 744.514
Allowance for impairment on inventories (-) (20.922) (110.374)
43.471.734 46.455.849

The Group provides an allowance for impairment on inventories when the inventories net realizable values are lower than their costs or when they are determined as slow-moving inventories.

The Group has identified raw material, work-in progress and finished goods inventories below net realizable value within the current year.

Impaired inventory movements for the period ended in 31 December are as follows:

2024 2023
Opening balance 110.374 173.573
Provisions no longer required (215.433) (72.483)
Provision for the period 125.981 9.284
Closing balance 20.922 110.374

1 Goods in transit includes the goods for which significant risks and rewards of ownership has been transferred to the Group due to their shipping terms.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

10. PREPAID EXPENSES AND DEFERRED INCOME

Short-term prepaid expenses 31 December
2024
31 December
2023
Order advances given for inventory purchases
Short-term order advances given to related
7.862.381 8.243.041
parties for inventory purchases (Note 5) 1.912.275 2.259.250
Work advances 708.610 459.144
Prepaid expenses 1.728.795 2.165.804
12.212.061 13.127.239
31 December 31 December
Long-term prepaid expenses 2024 2023
Long-term order advances given to related
parties for inventory purchases (Note 5) 1.326.936 2.067.242
Order advances given for inventory purchases 1.341.982 204.072
Order advances given for fixed assets purchases 475.634 396.295
Prepaid expenses 594.138 883.198
3.738.690 3.550.807
31 December 31 December
Short-term deferred income 2024 2023
Order advances received 3.693.874 3.933.661
Order advances received from related parties
(Note 5) 6.068.288 3.751.393
Deffered income 3.242.378 5.149.279
13.004.540 12.834.333

Short-term order advances received comprises advances received from 77 customers (31 December 2023: 73 customers) of which first 10 customers constitutes 98 percent of the total (31 December 2023: 98 percent).

31 December 31 December
Long-term deferred income 2024 2023
Order advances received 4.433.855 2.922.829
Order advances received from related parties
(Note 5) 7.004.192 5.288.866
Deferred income 390.455 319.247
11.828.502 8.530.942

Long-term order advances received comprises advances received from 51 customers (31 December 2023: 47 customers) of which the first 10 customers constitutes 88 percent of the total (31 December 2023: 93 percent).

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

11. PROPERTY, PLANT AND EQUIPMENT

Machinery
Land and Furniture Other fixed Leasehold Financial Construction
Land improvements Buildings equipment Vehicles and fixtures assets1 improvements leasing2 in progress3 Total
Cost and revaluation
Opening balance as of 1 January 2024 6.959.216 517.161 8.752.365 20.851.765 499.994 6.481.783 2.635.161 2.668.282 321.972 8.524.265 58.211.964
Additions4 -- 283 99.301 1.902.711 125.030 636.864 44 37.400 174 3.352.613 6.154.420
Revaluation fund 457.003 -- -- -- -- -- -- -- -- -- 457.003
Disposals -- (56.028) (64.536) (852.700) (12.405) (1.002.755) (55.606) (65.855) (2.172) (75.046) (2.187.103)
Transfers -- 72.228 4.240.904 97.644 -- -- 194.750 -- -- (4.605.526) --
Closing balance as of 31 December 2024 7.416.219 533.644 13.028.034 21.999.420 612.619 6.115.892 2.774.349 2.639.827 319.974 7.196.306 62.636.284
Accumulated depreciation
Opening balance as of 1 January 2024 -- 338.390 2.432.899 13.102.657 97.464 4.989.363 1.875.894 899.728 214.792 -- 23.951.187
Charge for the period -- 21.115 271.371 1.328.279 98.542 608.355 221.474 148.881 52.455 -- 2.750.472
Disposals -- (56.647) (87.316) (733.426) (6.936) (573.241) (16.851) -- -- -- (1.474.417)
Transfers -- -- -- -- -- -- -- -- -- -- --
Closing balance as of 31 December 2024 -- 302.858 2.616.954 13.697.510 189.070 5.024.477 2.080.517 1.048.609 267.247 -- 25.227.242
Net book value as of 31 December 2024 7.416.219 230.786 10.411.080 8.301.910 423.549 1.091.415 693.832 1.591.218 52.727 7.196.306 37.409.042

1 All of the net book value of other fixed assets consists of mold models manufactured by the Group.

2 As of 31 December 2024 and 31 December 2023, Group has two land that leased for 49 years and 46 years and motor-vehicle rentals.

3 Includes of investments in molds, models, devices and construction works.

4 TL 127.394 of additions are free of charge investment income.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

11. PROPERTY, PLANT AND EQUIPMENT (continued)

Machinery
Land and Furniture Other fixed Leasehold Financial Construction
Land improvements Buildings equipment Vehicles and fixtures assets1 improvements leasing2 in progress3 Total
Cost and revaluation
Opening balance as of 1 January 2023 3.071.740 474.533 6.068.427 18.149.300 103.944 5.734.025 2.229.823 2.427.735 252.806 8.878.303 47.390.636
Additions4 -- 31.258 613.616 2.906.504 397.109 867.805 4.032 239.790 69.166 2.573.369 7.702.649
Revaluation fund 3.887.476 -- -- -- -- -- -- -- -- -- 3.887.476
Disposals -- (371) -- (329.529) (1.059) (120.047) (36.616) -- -- (281.175) (768.797)
Transfers -- 11.741 2.070.322 125.490 -- -- 437.922 757 -- (2.646.232) --
Closing balance as of 31 December 2023 6.959.216 517.161 8.752.365 20.851.765 499.994 6.481.783 2.635.161 2.668.282 321.972 8.524.265 58.211.964
Accumulated
depreciation
Opening balance as of 1 January 2023 -- 303.447 2.205.384 11.931.455 51.859 3.891.140 1.431.951 745.906 185.065 -- 20.746.207
Charge for the period -- 35.307 227.515 1.407.037 46.664 1.217.362 445.983 180.892 29.727 -- 3.590.487
Disposals -- (364) -- (235.835) (1.059) (119.139) (2.040) (27.070) -- -- (385.507)
Transfers -- -- -- -- -- -- -- -- -- -- --
Closing balance as of 31 December 2023 -- 338.390 2.432.899 13.102.657 97.464 4.989.363 1.875.894 899.728 214.792 -- 23.951.187
Net book value as of 31 December 2023 6.959.216 178.771 6.319.466 7.749.108 402.530 1.492.420 759.267 1.768.554 107.180 8.524.265 34.260.777

1 All of the net book value of other fixed assets consists of mold models manufactured by the Group.

2 As of December 31,2023 and December 31,2022, Group has two land that leased for 49 years and 46 years and motor-vehicle rentals.

3 Includes of investments in molds, models, devices and construction works.

4 TL 134.376 of additions are free of charge investment income.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

11. PROPERTY, PLANT AND EQUIPMENT (continued)

The details of the depreciation expenses with respect to the plant, property and equipment is as follows:

31 December 31 December
2024 2023
Cost of sales 1.704.248 2.279.850
General administrative expenses 753.907 988.346
Inventories 281.709 316.882
Marketing expenses 10.608 5.409
2.750.472 3.590.487

There is no collateral, pledges, and mortgages on tangible assets as of 31 December 2024 and 2023.

There is no capitalized interest expense as of 31 December 2024 and 2023.

Fair value measurement of the Group's land

The lands owned by the Group are revalued and presented at fair value as of 31 December 2024. The fair value of the lands owned by the Group is revalued on 24 December 2024 by Lal Gayrimenkul Değerleme ve Müşavirlik Anonim Şirketi ("Lal Değerleme"), an independent appraisal company. Lal Değerleme is authorized by the CMB and provides real estate appraisal services in accordance with the capital market legislation. The fair value of the lands is determined according to "Market Value Approach (Equivalent Comparison Method)". Gains resulting from revaluation are recognized under "Gain on Revaluation of Property" in other comprehensive income.

In accordance with TFRS 13 "Fair Value Measurement" standard, since measurement techniques do not include observable market inputs, fair values of the lands are considered as level 3 in respect of fair value hierarchy.

Change in Revaluation 2024
Opening balance as of 1 January 2024: 6.959.216
Appreciation (Other Comprehensive Income) 457.003
Depreciation (Profit / Loss) --
TOTAL 7.416.219

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

11. PROPERTY, PLANT AND EQUIPMENT (continued)

Fair value measurement of the Group's land and buildings (continued)

Details of the Group's lands and information regarding fair value hierarchy are as follows:

Fair value as of reporting date
31 December Level 1 Level 2 Level 3
2024 TL TL TL
Macunköy 3.774.330 -- -- 3.774.330
Akyurt 1.020.485 -- -- 1.020.485
Gölbaşı 7.953 -- -- 7.953
Oğulbey 395.757 -- -- 395.757
Gölbek 2.820 -- -- 2.820
Temelli 2.214.034 -- -- 2.214.034
Denizli 840 -- -- 840
7.416.219 -- -- 7.416.219
Fair value as of reporting date
31 December Level 1 Level 2 Level 3
2023 TL TL TL
Macunköy 3.385.596 -- -- 3.385.596
Akyurt 997.535 -- -- 997.535
Gölbaşı 7.218 -- -- 7.218
Oğulbey 361.114 -- -- 361.114
Gölbek 2.397 -- -- 2.397
Temelli 2.204.519 -- -- 2.204.519

The fair value level action table as of 31 December 2024 are as follows:

Fair Value Level as of Reporting Date
Level 1
Level 2
Level 3
TL TL TL
1 January 2024 -- -- 6.959.216
Additions (Net) -- -- 457.003
31 December 2024 -- -- 7.416.219

Denizli 837 -- -- 837

6.959.216 -- -- 6.959.216

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

12. INTANGIBLE ASSETS

Rights costs assets1 Total
1.268.557 24.341.838 3.580.784 29.191.179
88.685 14.976.686 206.550 15.271.921
(119.282) (10.125.621) (300.141) (10.545.044)
-- -- -- --
1.237.960 29.192.903 3.487.193 33.918.056
11.652.391
920.379
(28.947) (155.641) (301.505) (486.093)
12.086.677
372.554 21.154.321 304.504 21.831.379
858.249
36.104
865.406
Development
7.516.811
677.412
8.038.582
Other
intangible
3.277.331
206.863
3.182.689

1Other intangible assets include licences related to computer software and right of usage assets.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

12. INTANGIBLE ASSETS (continued)

Other
Development intangible
Rights costs assets1 Total
Cost
Opening balance as of 1 January
2023 1.001.003 18.693.664 3.402.571 23.097.238
Additions 295.529 9.764.337 271.118 10.330.984
Disposals (27.975) (4.116.163) (92.905) (4.237.043)
Transfers -- -- -- --
Closing balance as of 31
December 2023 1.268.557 24.341.838 3.580.784 29.191.179
Accumulated Amortization
Opening balance as of 1 January
2023 837.295 6.075.582 3.001.015 9.913.892
Charge for the period 41.357 1.441.229 325.616 1.808.202
Disposals (20.403) -- (49.300) (69.703)
Closing balance as of 31
December 2023 858.249 7.516.811 3.277.331 11.652.391
Net book value as of 31
December 2023 410.308 16.825.027 303.453 17.538.788

The details of amortization expenses regarding intangible assets is as follows:

31 December 31 December
2024 2023
Research and development expenses 677.413 1.190.475
Cost of sales 76.720 382.742
Inventories 89.608 169.804
Marketing expenses 195 3.690
General administrative expenses 76.443 61.491
920.379 1.808.202

1Other intangible assets include licences related to computer software and right of usage assets.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

13. GOVERNMENT GRANTS AND INCENTIVES

The deferred incentive income shown under consolidated statement of financial position is as follows:

31 December 31 December
2024 2023
Current government grants and incentives 66.034 82.979

As part of the Decision on Government Incentives on Investments, there are 11 investment incentives taken from Ministry of Treasury anf Finance. The incentives allow VAT exemption and customs tax exemption. VAT exemption is applied in both domestic and international purchases while customs tax exemption is applied for international purchases.

In Corporate Tax Calculation, no tax payable is calculated because of R&D deduction and deductions due to investment incentive certificates cannot be applied. For this reason, no deferred tax effect is calculated for the temporary differences arising from investment incentives.

Government grants show the unearned proportion of the grant after the costs related with the completed parts of the projects are deducted from the grants taken by the Group for the ongoing projects that was obtained as of the reporting date.

The incentive obtained consists of the incentives that are accrued in accordance with TÜBİTAK's R&D recognition letter prepared with respect to the Group's ongoing projects.

The Group obtains capital support from "Support and Price Stabilization Fund" of Central Bank of Türkiye via Ministry of Trade's consent. The Scientific and Technological Research Council of Türkiye ("TÜBİTAK") and Technology Development Foundation of Türkiye ("TTGV") act as intermediary in accordance with Communiqué No:98/10 published by the Money-Loans and Coordination Board.

In accordance with Law on Technology Development Zones numbered 4691, Group utilizes withholding income tax incentive, social security premium incentive and stamp tax exceptions. Such incentives are utilized through not paying withholding income tax incentive, social security premium incentive and stamp tax exceptions calculated based on research and development and software personnel payroll. Income generated in accordance with law on Technology Development Zones numbered 4691 is exempt from corporate income tax until 31 December 2028.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

13. GOVERNMENT GRANTS AND INCENTIVES (continued)

The research and development expenditure deduction rate used as a tax benefit has been increased from 40 percent to 100 percent in accordance with the amended article 10 of the Tax Law numbered 5520, the amended article 89 of Law numbered 193 and 5746 with respect to the Support of Research and Development Activities. The aforementioned law was enacted of April 2008 after its issue in the Official Gazette dated 12 March 2008, numbered 26814. In accordance to the Law regarding the Incentive of Research and Development Activities numbered 6676 published on Official Gazettes numbered 29636 on 26 February 2016 and The Law Regarding the Amendments on Delegated Legislation, the content of the law and incentives has been broadened and additional exceptions has been given. Research and development expenditure may be used as a tax deduction in the determination of the taxable income. If taxable income levels are not sufficient to absorb all available tax deductions, any unused research and development tax deduction is allowed to be carried forward to the next tax period. The remaining amount from previous year is increased according to revaluation ratio defined at Tax Procedure Law. According to the item No. 8 of the related law, all the costs related with research and development can be subjected to deduction until 31 December 2028.

14. BORROWING COSTS

As of 31 December 2024, there is no material borrowing cost regarding the qualifiying assets. (31 December 2023: None).

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

15. PROVISIONS, CONTINGENT ASSETS AND LIABILITIES

a) Provisions

31 December 31 December
Other short-term provisions 2024 2023
Provision for warranties1 3.940.906 4.020.457
Provision for onerous contracts 218.200 312.095
Provision for delay penalties2 1.915.570 1.736.951
Sales commission 114.715 6.869
Provision for legal cases 54.616 52.537
Provision for cost expenses 646.966 214.350
Other 21.732 16.115
6.912.705 6.359.374

The movement of the provision for warranties is as follows:

1 January- 1 January
31 December 31 December
2024 2023
Opening balance 4.020.457 4.738.848
Provision during the period 4.021.427 3.034.652
Realized during the period (2.865.181) (1.863.070)
Monetary gain/(loss) (1.235.797) (1.889.973)
Closing balance 3.940.906 4.020.457

The movement of the provision for onerous contracts is as follows:

1 January- 1 January
31 December 31 December
2024 2023
Opening balance 312.095 666.399
Provision reversed during the period 2.036 (92.339)
Monetary gain/(loss) (95.931) (261.965)
Closing balance 218.200 312.095

1 The Group's provision for warranty is based on sales under warranty are estimated in accordance with historical data. Provision for warranty is calculated by using warranty rate included in the contract as long as the invoice issued throughout the life of the Contract

2 Provision for delay penalties and fines are calculated in accordance with interest rates mentioned in the agreement for defaulet and within the client's knowledge.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

15. PROVISIONS, CONTINGENT ASSETS AND LIABILITIES (continued)

a) Provisions (continued)

The movement of the provision for delay penalties is as follows:

1 January
31 December
1 January
31 December
2024 2023
Opening balance 1.736.951 3.099.164
Provision during the period 1.828.355 1.147.629
Realized during the period (479.286) (287.721)
Provision reversed during the period (636.551) (1.003.825)
Monetary gain/(loss) (533.899) (1.218.296)
Closing balance 1.915.570 1.736.951

The movement of the provision for legal cases is as follows:

1 January- 1 January
31 December 31 December
2024 2023
Opening balance 52.537 79.232
Provision during the period 31.479 20.087
Realized during the period (13.252) (15.635)
Monetary gain/(loss) (16.148) (31.147)
Closing balance 54.616 52.537
31 December 31 December
Other long-term provisions 2024 2023
Provision for delay penalties 503.017 482.305
Provision for onerous contracts 8.507.865 5.004.504
9.010.882 5.486.809

The movement of the provision for delay penalties is as follows:

1 January 1 January
31 December 31 December
2024 2023
Opening balance 482.305 794.709
Provision during the period 168.961 --
Monetary gain/(loss) (148.249) (312.404)
Closing balance 503.017 482.305

The movement of the provision for onerous contacts is as follows:

1 January- 1 January
31 December 31 December
2024 2023
Opening balance 5.004.503 5.464.840
Provision during the period 5.041.633 1.687.917
Monetary gain/(loss) (1.538.271) (2.148.253)
Closing balance 8.507.865 5.004.504

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

PROVISION, CONTINGENT ASSET AND LIABILITIES (continued)

b) Legal cases

There has not been any final judicial decision against the Group due to the responsibility related with work accidents within 2024.

As of the dates 31 December 2024 and 31 December 2023, according to the declarations written by the legal counselors, the lawsuits and legal executions in favor of and against the Group are as follows:

Description 2024 2023
a) Ongoing lawsuits filed by the Group 42.865 57.058
b) Execution proceedings carried out by the
Group 746.897 959.986
c) Ongoing lawsuits filed against the Group 54.616 42.006
d) Executions against the Group 19.169 21.081
e) Lawsuits finalized against the Group within the
period 7.059 12.791
f) Lawsuits finalized in favor of the Group within
the period 4.954 9.983
  • a) Ongoing lawsuits filed by the Group are comprised of lawsuits for patents, trademarks and lawsuits filed by the Group due to the disagreements related to previous lawsuits. These lawsuits will not be recognised in the financial statements until they are finalized.
  • b) Execution of proceedings carried out by the Group are comprised of lawsuits that would result in favor of the Group that will be recognised as revenue under "Other Operating Income" line when they are collected.
  • c) The Company made provisions for all lawsuits filed against the Group and recognised as "Provisions" in the statement of financial positon and "Other Operating Expense" in the statement of profit or loss and other comprehensive income.
  • d) Executions against the Group are not included in Financial Statements.
  • e) Lawsuits finalized against the Group are recognised in the statement of profit or loss to the extent that the amount differs from the amount previously provided. Amounts in excess of the amount previously provided are recognised under 'Other Operating Expense' when the penalty is paid.
  • f) Lawsuits finalized in favor of the Group are recognised in statement of profit or loss and other comprehensive income under "Other Operating Income" line when the final judgement is determined.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

16. COMMITMENTS AND CONTINGENCIES

a) Guarantees received

31 December
2024
31 December
2023
Letters of guarantees received from the suppliers 9.776.102 13.059.691
Collaterals received from the customers 676.618 866.086
Letters of guarantees received from the customers 44.708 38.473
Collaterals received from the suppliers 1.386.122 1.439.950
Letters of guarantees received from the suppliers 470.987 43.666
Letters of guarantees received from the customers 2.000 --
12.356.537 15.447.866

b) Collaterals / Pledges / Mortgages ("CPM") given

The collaterals/pledges/mortgages ("CPM") given by the Group as of 31 December 2024 and 31 December 2023 is as follows:

In accordance with the terms of the Patrol and Anti-Submarine Warfare Ship Projects ("MİLGEM"), the Company is a guarantor if HAVELSAN cannot be able to fulfill the obligations in this project of an amount of USD 294.402.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

16. COMMITMENTS AND CONTINGENCIES (continued)

c) Guarantees given (continued)

31 December 2024 TL Equivalent TL USD EURO ROL Qatar Rial
A. Total amount of CPM given on behalf of the legal
entity
-Collateral 15.671.947 2.159.177 278.011 100.387 4.004 250
-Pledge -- -- -- -- -- --
-Mortgage -- -- -- -- -- --
B. Total amount of CPM given on behalf of the
subsidiaries included in full consolidation
-Collateral 146.972 -- -- 4.000 -- --
-Pledge -- -- -- -- -- --
-Mortgage -- -- -- -- -- --
C. Total amount of CPM given to maintain operations
and collect payables from third parties
-Collateral -- -- -- -- -- --
-Pledge -- -- -- -- -- --
-Mortgage -- -- -- -- -- --
D. Total amount of other CPM given
i. Total Amount of CPM on behalf of the main partner
-Collateral -- -- -- -- -- --
-Pledge -- -- -- -- -- --
-Mortgage -- -- -- -- -- --
ii. Total amount of CPM given on behalf of other
1
group companies that do not cover B and C
-Collateral 44.734 -- 1.270 -- -- --
-Pledge -- -- -- -- -- --
-Mortgage -- -- -- -- -- --
iii. Total amount of CPM on behalf of third parties
that do not cover
-Collateral -- -- -- -- -- --
-Pledge -- -- -- -- -- --
-Mortgage -- -- -- -- -- --
Total 15.863.653 2.159.177 279.281 104.387 4.004 250

The Group is responsible as joint guarantor for the portion amounting to EURO 2,5 Million of investment credit amounting to EURO 5 Million which will be used by ASELSAN Optik , the Group's joint venture.

1 The ratio of the other CPM given by the Group to equity as of 31 December 2024 is 0,03 percent. TL 44.734 is the collateral amount pertaing to guarantee letter given on behalf of the entity's joint venture ASELSAN Bilkent.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

16. COMMITMENTS AND CONTINGENCIES (continued)

c) Guarantees given (continued)

31 December 2023 TL Equivalent TL USD EURO ROL Qatar Rial
A. Total amount of CPM given on behalf of the legal
entity
-Collateral 22.024.907 1.968.929 304.953 149.406 6.952 535
-Pledge -- -- -- -- -- --
-Mortgage -- -- -- -- -- --
B. Total amount of CPM given on behalf of the
subsidiaries included in full consolidation
-Collateral 188.120 -- -- 4.000 -- --
-Pledge -- -- -- -- -- --
-Mortgage -- -- -- -- -- --
C. Total amount of CPM given to maintain operations
and collect payables from third parties
-Collateral -- -- -- -- -- --
-Pledge -- -- -- -- -- --
-Mortgage -- -- -- -- -- --
D. Total amount of other CPM given
i. Total Amount of CPM on behalf of the main partner
-Collateral -- -- -- -- -- --
-Pledge -- -- -- -- -- --
-Mortgage -- -- -- -- -- --
ii. Total amount of CPM given on behalf of
other
1
group companies that do not cover B and C
-Collateral 90.105 -- 2.120 -- -- --
-Pledge -- -- -- -- -- --
-Mortgage -- -- -- -- -- --
iii. Total amount of CPM on behalf of third parties
that do not cover
-Collateral -- -- -- -- -- --
-Pledge -- -- -- -- -- --
-Mortgage -- -- -- -- -- --
Total 22.303.132 1.968.929 307.073 153.406 6.952 535

The Group is responsible as joint guarantor for the portion amounting to EURO 2,5 Million of investment credit amounting to EURO 5 Million which will be used by ASELSAN Optik , the Group's joint venture.

1 The ratio of the other CPM given by the Group to equity as of 31 December 2023 is 0,07 percent. TL 90.105 is the collateral amount pertaing to guarantee letter given on behalf of the entity's joint venture ASELSAN Bilkent.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

17. EMPLOYEE BENEFITS

a) Obligations for employee benefits

31 December 2024 31 December 2023
Social security premiums payable 1.559.059 773.007
Taxes and funds payable 786.883 444.575
Due to personnel 1.194.626 521.694
3.540.568 1.739.276

b) Short-term provisions for employee benefits

31 December 2024 31 December 2023
Provision for vacation pay and overtime 1.134.076 1.013.031
Bonus provision 1.923.839 1.293.790
3.057.915 2.306.821

As of 31 December the movement of the provision for vacation pay and overtime is as follows:

2024 2023
Opening balance 1.013.031 669.375
Provision for the period 945.342 863.461
Provision paid during the period (397.634) (211.676)
Provision realized during the period (115.354) (44.996)
Monetary gain/(loss) (311.309) (263.133)
Closing balance 1.134.076 1.013.031

c) Long-term provisions for employee benefits

31 December 2024 31 December 2023
Provision for severance pay 1.051.359 1.535.147
1.051.359 1.535.147

As of 31 December the movement of severance and retirement pays are as follows:

2024 2023
Opening balance 1.535.147 1.378.368
Service cost 60.724 183.016
Interest cost 26.347 25.551
Actuarial gains/(loss) 347.128 329.033
Payments (446.117) (156.658)
Monetary gain/(loss) (471.870) (224.163)
Closing balance 1.051.359 1.535.147

Provision for severance pay:

In accordance with the Labor Law Legislations, the Group is obliged to make legal severance indemnity payments to entitled employees whose employment has been terminated. Furthermore, with regard to Social Security Law numbered 506 dated 6 March 1981, number 2422 dated 25 August 1999 and law numbered 4447, article 60 denotes the legal obligation to make severance payments to all employees who are entitled to indemnity by the date of leave of employment.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

17. EMPLOYEE BENEFITS (continued)

Provision for severance pay (continued)

Certain provisions regarding services before retirement, has been annulled on 23 May 2002 during the revision of the related law. As of 31 December 2024 severance payments are calculated on the basis of 30 days' pay, limited to a ceiling of TL 41.828,421 (31 December 2023: 35.058,58 TL 1 )

As of 1 January 2024, the ceiling for the severance payments is TL 46.655,43. 1

The liability is not funded, as there is no funding requirement. The provision has been calculated by estimating the present value of the future probable obligation of the Group arising from the retirement of employees. TAS 19 ("Employee Benefits") requires actuarial valuation methods to be developed to estimate the entity's obligation under defined benefit plans.

Accordingly, the following actuarial assumptions were used in the calculation of the total liability:

31 December 2024
(%)
31 December 2023
(%)
Interest rate 24,90 25,50
Inflation rate 21,05 21,70
Discount ratio 3,18 3,12
Estimation of probability of retirement ratio 94 94

1 Tutar tam TL olarak gösterilmiştir.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

18. OTHER ASSETS AND LIABILITIES

a) Other current assets

31 December 2024 31 December 2023
VAT carried forward 1 1.760.513 2.262.580
Other VAT 1.083.029 1.557.646
Other 2 113.437 167.033
2.956.979 3.987.259

b) Other non-current assets

31 December 2024 31 December 2023
VAT carried forward22 956.769 121.624
Prepaid taxes and funds 166.238 194.035
Other 2 15.883 35.475
1.138.890 351.134

c) Other short-term liabilities

31 December 2024 31 December 2023
Taxes and funds payable 6.499 9.036
Other 2 28.460 5.795
34.959 14.831

d) Other long-term liabilities

31 December 2024 31 December 2023
Other 40.179 7.042
40.179 7.042

1 Taxpayers (Contractor/the Group) who deliver goods and provides services to the Natural Security Institutions (such as MOD and UDI) are to be approved by purchasers (contacting authority) in terms of content and nature accordingly. Value Added Tax (VAT) is exempted as of 1 March 2009 in accordance with General Declaration on Value Added Tax with the Serial Number 112 in the Official Gazette as of 12 February 2009. These amounts usually are not collected, but they are offset with other tax liabilities.

2 Mainly comprises of other assets and liabilities of consolidated subsidiaries.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

19. SHARE CAPITAL, RESERVES AND OTHER EQUITY ITEMS

Capital
Shareholders Share (%) 31 December 2024 Share (%) 31 December 2023
TSKGV 74,20 3.383.302 74,20 3.383.302
Publicly held 25,80 1.176.698 25,80 1.176.698
Nominal capital 100 4.560.000 100 4.560.000
Share capital adjustment 24.199.143 24.199.143
Inflation adjusted capital 28.759.143 28.759.143

The Group's nominal capital is TL 4.560.000 comprising 4.560.000.000 shares each of which is TL 1. A total of 2.421.818.182 of the shares constitutes "Group A" and 2.138.181.818 of the shares constitutes "Group B" shares. All of the shares are nominative. "Group A" shares are privileged nominative shares and 6 Members of the Board of Directors are assigned from the holders of nominative "Group A" type shareholders or from the ones nominated by "Group A" type shareholders. Moreover, the Board of Directors shall be authorized in matters regarding issuing preferred shares or issuing shares above the nominal values. Regarding capital increases by restricting preemptive rights, the shares to be issued shall be "Group B". In accordance with the CMB's legislation, other Members of the Board of Directors, not including elected Independent Members of the Board of Directors, are assigned from nominative "Group A" shareholders or elected from among candidate nominated by "Group A" shareholders.

Restricted reserves

In accordance with Capital Markets Board's Communique Serial II No:19.1 "Share of Profit", effective as of 1 February 2014, and with regard to the Turkish Commercial Code ("TCC"), legal reserves in publicly held companies will be generated by 5 percent of income until it reaches 20 percent of paid-in share capital. After the 5 percent of the dividend is paid to shareholders, 10 percent of the total distributed to shareholders and employees can be added in the other legal reserve. Under the TCC, the legal reserves can be used only to offset losses for the going concern of the company or to prevent unemployment as long as the amount does not exceed 50 percent of the paid-in capital.

Retained Earnings

Accumulated profits apart from net profit for the year and extraordinary reserves which is accumulated profit by nature are shown under retained earnings.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

19. SHARE CAPITAL, RESERVES AND OTHER EQUITY ITEMS (continued)

Retained Earnings (continued)

Profit distribution

Publicly traded companies perform dividend distribution in accordance with Capital Markets Board's Communique Serial II No: 19.1 "Share of Profit", effective as of 1 February 2014.

Shareholders, distribute dividend with general assembly decision, within the context of profit distribution policies set by general assembly and related regulations. As part of the communique, no specific minimum distribution ratio is indicated. Companies pay dividend as defined in their articles of association or dividend distribution policies.

As a result of the 49th Ordinary General Assembly Meeting of the Company held on 14 June 2024; of the net profit for the period obtained from its activities in 2023;

  • In accordance with Article 519/(1) of the Turkish Commercial Code, General Legal Reserves amounting to TL 456.000.000,- is going to be allocated,

  • Out of net distributable profit to the shareholders for the period, calculated in the framework of the dividend distribution regulations and decisions of the Capital Markets Board, gross, TL 510.000.000,- (Kuruş 11,184211 per share of TL 1 and 11,184211% on the basis of the capital) (net TL 459.000.000,- Kuruş 10,06579 per share of TL 1 and 10,06579% on the basis of the capital) shall be distributed in the form of cash,

  • In accordance with Article 519/2 of the Turkish Commercial Code, General Legal Reserves amounting to TL 28.200.000,- is going to be allocated,

  • The remaining profit is going to be allocated as Extraordinary Legal Reserves,

and distribution of the cash dividends to the shareholders is decided to be distributed as of 25 November 2024.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

20. REVENUE AND COST OF SALES

a) Revenue 1 January-
31 December
2024
1 January
31 December
2023
Domestic sales 103.962.192 97.019.960
Export sales 17.146.335 9.344.425
Other revenues 316.811 167.810
Sales returns (-) (1.206.503) (270.825)
Sales discounts (-) (13.241) (9.027)
120.205.594 106.252.343
1 January - 1 January -
Revenue Recognized Regarding Performance 31 December 31 December
Obligation 2024 2023
Over time 86.457.705 78.019.094
Point in time 33.747.889 28.233.249
120.205.594 106.252.343
1 January- 1 January
31 December 31 December
b) Cost of sales(-) 2024 2023
Cost of raw materials and supplies 58.751.228 57.833.274
Cost of merchandise goods sold 2.865.346 418.462
Cost of services sold 18.360.647 11.349.630
Cost of other sales 2.070.182 7.623.365
82.047.403 77.224.731

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

21. GENERAL ADMINISTRATIVE EXPENSES, MARKETING EXPENSES, RESEARCH AND DEVELOPMENT EXPENSES

1 January - 1 January -
31 December 31 December
2024 2023
General administrative expenses (-) 5.275.649 4.891.203
Marketing expenses (-) 2.629.612 2.088.462
Research and development expenses (-) 3.318.260 3.819.905
11.223.521 10.799.570
1 January - 1 January -
31 December 31 December
a) General administrative expenses (-) 2024 2023
Personnel expenses 3.515.516 2.870.217
Depreciation and amortization expenses 830.350 1.049.837
Service procurement 205.087 121.293
Rent expenses 96.283 61.985
Travel expenses 93.046 75.855
Insurance expenses 83.069 45.387
Expertise and consultancy expenses 73.385 49.021
Personnel transportation expenses 50.279 38.010
Legal expenses 39.186 22.400
Electricity expenses 39.086 62.795
IT repair and maintenance expenses 37.492 19.546
Cleaning service expenses 23.703 30.372
Subscription and publication expenses 23.693 23.007
Course and seminar expenses 12.753 26.667
Property and environmental cleaning tax 10.866 7.539
Personnel meal expenses 8.153 24.143
Water expenses 2.212 2.684
Vehicle purchase expenses 857 33.224
Other 130.633 327.221
5.275.649 4.891.203

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

21. GENERAL ADMINISTRATIVE EXPENSES, MARKETING EXPENSES, RESEARCH AND DEVELOPMENT EXPENSES (continued)

1 January 1 January
31 December 31 December
b)
Marketing expenses (-)
2024 2023
Personnel expenses 969.831 477.850
Subcontractor service expenses 444.592 718.655
Exhibition expenses 418.994 241.628
Travel expenses 191.843 147.747
Shipping and delivery expenses 110.884 40.379
Commission expenses 80.732 108.737
Samples expenses 42.601 31.841
Sponsorship expenses 41.645 69.419
Representation expenses 35.954 14.265
Stamp duty expenses 33.034 10.290
Rent expenses 28.086 15.285
Advertising expenses 27.067 29.681
Packaging expenses 25.608 23.772
Expertise and consultancy expenses 20.012 27.933
Meal expenses 17.403 12.091
Depreciation and amortization expenses 10.803 9.099
Security service 6.648 3.758
Other 123.875 106.032
2.629.612 2.088.462
1 January
31 December
1 January
31 December
c)
Research and development expenses (-)
2024 2023
Personnel expenses 2.311.851 2.375.951
Depreciation and amortization expenses 677.413 1.190.475
Equipment costs 310.958 249.108
Other 18.038 4.371
3.318.260 3.819.905

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

22. OTHER OPERATING INCOME AND EXPENSES

a) Other operating income

1 January- 1 January
31 December 31 December
2024 2023
Foreign currency exchange gains 15.495.532 46.758.339
Rediscounted interest income 1.339.581 1.185.522
Granted fixed assets income1 127.394 134.476
Other income 516.228 313.031
17.478.735 48.391.368

b)Other operating expenses (-)

1 January-
31 December
1 January
31 December
2024 2023
Foreign currency exchange losses (-) 15.239.093 28.273.090
Rediscounted interest expense (-) 704.566 1.675.017
Other expense and losses (-) 1.154.111 614.518
17.097.770 30.562.625

23. INCOME FROM INVESTING ACTIVITIES

1 January- 1 January
31 December 31 December
2024 2023
Gain/(loss) on sales profit of marketable securities 21.979 17.503
Dividend income 44.750 22.219
Gain/(loss) on sales profit of fixed assets 18.372 9.817
85.101 49.539

24. FINANCIAL INCOME

1 January- 1 January
31 December 31 December
2024 2023
Interest income 979.039 685.779
Foreign currency exchange gains from bank loans 789.154 1.020.338
1.768.193 1.706.117

1 Granted fixed assets income comprises of fixed assets donated by public bodies and utilized within the scope of research projects conducted with universities. Subsequent to the completion of these projects, the subject matter fixed assets have been incorporated to the Group without any charge.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

25. FINANCIAL EXPENSES

1 January
31 December
2024
1 January
31 December
2023
Foreign currency exchange losses from bank loans (-) 3.266.816 9.957.016
Interest cost related with employee benefits (-) 26.347 25.551
Interest cost of borrowings (-) 3.682.492 2.771.130
6.975.655 12.753.697
GAIN/(LOSS) ON NET MONETARY POSITION
Non-monetary items
Net Monetary Gain/ (Losses) 31 December 2024
Balance Sheet Items (11.092.286)
Inventories 2.789.273
Prepaid expenses 4.696.212
Property, plant and equipment 9.269.919
Intangible assets 6.495.544
Equity accounted investments and financial investments 3.830.146
Deferred income 57.217
Share capital (8.839.910)
Share premiums (6.456.379)
Other comprehensive income / (expense) that will not be reclassified
to profit or (loss) (972.181)
Restricted reserves (1.519.129)
Retained earnings (20.442.998)
Statement of Profit or Loss Items (2.777.141)
Revenue (10.680.060)
Cost of sales (-) 6.851.569
General administrative expenses (-) 428.155
Marketing expenses (-) 249.006
Research and development expenses (-) 165.038
Other operating ıncome (2.684.582)
Other operating expenses (-) 2.069.591
Income from investing activities (6.187)
Financial income (127.668)
Financial expense (-) 957.997
Net Monetary Gain/ (Losses) (13.869.427)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

27. ANALYSIS OF OTHER COMPREHENSIVE INCOME ITEMS

31 December
2024
31 December
2023
Gain from revaluation of financial assets that fair value
reflect in other comprehensive income (489.897) --
Revaluation of property 4.594.565 4.194.687
Cumulative Translation Adjustments (116.805) 81.229
Loss on remeasurement of defined benefit plans (1.277.580) (1.017.234)
2.710.283 3.258.682
1 January 1 January
Gain from revaluation of financial assets that fair value 31 December 31 December
reflect in other comprehensive income: 2024 2023
Opening balance -- 1.565.574
Gain from revaluation of financial assets that fair value
reflect in other comprehensive income (559.882) (1.669.946)
Deferred tax liability arising from revaluation 69.985 104.372
Closing balance (489.897) --

Gain from revaluation of financial assets that fair value reflect in other comprehensive income arises due to revaluation of financial investments. When available for sale financial assets are sold, any related amount included in revaluation reserve is transferred to profit or loss.

1 January 1 January
31 December 31 December
Revaluation of property 2024 2023
Opening balance (Previously reported) 4.194.687 793.145
Increase arising from revaluation of property 457.003 3.887.476
Current period value increase deferred tax effect (57.125) (485.934)
Closing balance 4.594.565 4.194.687

Revaluation of property increase arises from revaluation of the lands. On the subsequent sale or retirement of a revalued property, the attributable revaluation surplus remaining in the properties revaluation reserve is transferred directly to retained earnings.

The fair value of the lands owned by the Group is revalued on 24 December 2024 by Lal Gayrimenkul Değerleme ve Müşavirlik Anonim Şirketi ("Lal Değerleme"), an independent appraisal company.

1 January 1 January
31 December 31 December
Foreign currency exchange differences: 2024 2023
Opening balance 81.229 473.868
Currency differences from net asset currency
translation
investent in foreign operations (198.034) (392.639)
Closing balance (116.805) 81.229

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

27. ANALYSIS OF OTHER COMPREHENSIVE INCOME ITEMS (continued)

1 January 1 January
Gain/Loss on remeasurement of defined benefit 31 December 31 December
plans 2024 2023
Opening balance (1.017.234) (770.459)
Gain/Loss on remeasurement of defined benefit plans (347.128) (246.775)
Deferred tax on gain/loss on remeasurement of
defined benefit plans 86.782 --
Closing balance (1.277.580) (1.017.234)

28. INCOME TAXES

Corporate tax liabilities: 31 December 2024 31 December 2023
Current corporate tax provision 54.072 1.630.375
Less: Prepaid taxes and funds (54.072) (1.630.375)
-- --
1 January 1 January
31 December 31 December
Tax income: 2024 2023
Current corporate tax (expense) (54.072) (1.630.375)
Deferred tax income / (expense) 7.010.938 1.868.070
6.956.866 237.695

1 January-31 December 2024

Tax effects related to components of other
comprehensive income
Amount
before tax
Tax
income/expense
Net of tax
amount
Defined benefit plan revaluation gains/losses
Revaluation of property
(347.128)
457.003
86.782
(57.125)
(260.346)
399.878
Cumulative Currency Translation Adjustments (198.034) -- (198.034)
Gain from revaluation of financial assets that
fair value reflect in other comprehensive
income (559.882) 69.985 (489.897)
Other comprehensive income in the period (648.041) 99.642 (548.399)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

28. INCOME TAXES (continued)

1 January-31 December 2023
Tax effects related to components of other
comprehensive income
Amount
before tax
Tax
income/expense
Net of tax
amount
Defined benefit plan revaluation gains/losses (329.033) 82.258 (246.775)
Revaluation of property 3.887.476 (485.934) 3.401.542
Cumulative Currency Translation Adjustments (392.639) -- (392.639)
Gain from revaluation of financial assets that fair
value reflect in other comprehensive income
(1.669.946) 104.372 (1.565.574)
Other comprehensive income in the period 1.495.858 (299.304) 1.196.554
1 January 1 January
31 December 31 December
Tax recognized directly in equity 2024 2023
Deferred tax:
- Revaluation of property (57.125) (485.934)
- Gain from revaluation of financial assets that
fair value reflect in other comprehensive income 69.985 104.372
- Actuarial gain/loss 86.782 82.258
Deferred tax recognized directly in equity 99.642 (299.304)

Corporate tax

The Group is subject to Turkish corporate taxes. The corporate income tax is declared until the relevant accounting period-end's following fourth month, twenty-fifth day's evening and it is batch paid until the end of the related month. In accordance with the tax legislation, quarterly 25 percent (31 December 2023: 25 percent) on profits of advance tax is being calculated and paid. The amounts paid in this way are deducted by the tax on annual earning.

In accordance with the tax legislation in Türkiye, financial losses could be carried forward for a maximum of five years that the year they appeared. Besides, tax returns and the related accounting records may be reviewed within five years by the tax administration.

Provision is made in the accompanying consolidated financial statements for the estimated change based on the Group's results for the year. Turkish tax legislation does not permit a parent company and its subsidiary to file a consolidated tax return. Therefore, provisions for taxes, as reflected in the accompanying consolidated financial statements, have been calculated on a separate entity bases.

Corporate tax rate that will be accrued based on rate able profit of the company is calculated on a basis by including disallowed deductions written of as expense when determining commercial profit with excluding tax-exempt profits and other discounts (also previous year losses and investments allowances used, if preferred)

The tax rate in 2024 is 25 percent (31 December 2023: 25 percent).

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

28. INCOME TAXES (continued)

Deferred Tax

The Group recognizes deferred tax assets and liabilities based upon temporary differences arising from its financial statements as reported for TFRS purposes and its statutory tax financial statements. These differences usually result in the recognition of revenue and expenses in different reporting periods for TFRS and tax purposes and the differences are given below.

In Türkiye, the corporate tax rate is 25 percent as of 31 December 2024 (2023: 25 percent). The corporate tax rate is applied to the net corporate income resulting from the addition of expenses that are not allowed to be deducted in accordance with the tax laws to the commercial income of the institutions, and the exemptions and deductions included in the tax laws.

company and its subsidiaries to file a consolidated tax return. Therefore, provision for taxes, as reflected in the consolidated financial statements, has been calculated on a separate-entity basis.

The dividend income (excluding the participation certificates of investment funds and profit shares derived from the share certificates of investment trusts) derived by entities from the participation in the capital of another resident entity is exempt from corporate tax. Furthermore, 75 percent of the income derived by entities from the sale of participation shares and real estates (immovable property) preferential rights, founders' shares and redeemed shares which are carried in assets at least for two years is exempt from corporate tax as of 31 December 2024. However, according to the amendments by Law numbered 7061, this rate is reduced from 75 percent to 50 percent with regard to immovable properties and tax declarations starting from 2019 will be calculated using 50 percent for immovable properties. In order to be able to benefit from the exemption, the relevant income should be kept under a fund account in the liabilities and should not be withdrawn from the enterprise for 5 years. The sales amount should be collected by the end of the second calendar year following the year of sale.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

28. INCOME TAXES (continued)

Deferred Tax (continued)

The details of deferred tax assets and liabilities of the Group are as follows:

Deferred Tax Assets/Liabilities: 31 December 2024 31 December 2023
Discount on receivables 171.731 321.931
Adjustment to costs and provision for expected losses
of construction contracts 18.033.173 11.705.753
Capitalized research-development expense 28.679 1.717
Allowance for impairment on inventories (35.284) 9.866
Provision for delay penalties 327.358 604.647 554.814
Provision for warranties 970.135 1.009.223
Provision for severance pay 254.852 279.885
Provision for annual leave 764.239 359.670
Provision for doubtful receivables 289 294
Other 31.865 21.714
Accumulated research and development incentive 8.769.035 4.172.020
Discount on payables (62.960) (56.080)
Adjustment of progress payments for long- term
construction projects (20.346.671) (13.475.111)
Depreciation of fixed assets / amortization of
intangible assets 2.229.245 363.225
Fixed assets revaluation fund (543.059) (485.934)
Gain on revaluation of available for sale financial
assets 241.493 171.508
Monetary gain/(loss) (2.946.352) (3.911.464)
Other (16.970) (5.524)
Deferred tax assets 29.117.748 15.060.157
Deferred tax liabilities (20.969.661) (14.022.650)
Deferred tax assets – net 8.148.087 1.037.507

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

28. INCOME TAXES (continued)

Deferred tax (continued)

1 January- 1 January
31 December 31 December
Movement of deferred tax 2024 2023
assets/(liabilities):
Opening balance as of 1 January 1.037.507 (531.259)
Charged to statement of profit or loss 7.010.938 1.868.070
Charged to equity 99.642 (299.304)
8.148.087 1.037.507
Effective Effective
Tax 1 January Tax 1 January
Rate 31 December Rate 31 December
Tax reconciliations: (%) 2024 (%) 2023
Profit before tax from continuing
operations 22.135.280 25.056.617
Income tax rate %25 %25
Tax at the domestic income tax rate 25 5.533.820 25 6.264.154
Tax effects of:
- revenue that is exempt from taxation
- expenses that are not deductible in
(2) (459.389) (1) (198.919)
determining taxable profit
- R&D incentives and other income
4 935.387 4 1.028.556
exempt from taxation (76) (16.813.565) (43) (10.697.734)
- monetary gaion/(loss) 17 3.847.957 13 3.303.101
- effect of other adjustments (0,0) (1.076) (0,3) 63.147
Tax (income) / expense recognized in
profit or loss (31) (6.956.866) (1) (237.695)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

29. EARNINGS PER SHARE

Earnings per share is calculated by dividing profit or loss attributable to ordinary equity holders of the parent entity by the weighted average number of ordinary shares outstanding during the period. The Group does not have diluted shares.

For the years ended 31 December 2024 and 2023, earnings per share calculations are as follows:

1 January- 1 January
31 December 31 December
2024 2023
Number of shares outstanding (in
thousands) 4.560.000 4.560.000
Net profit – TL 15.298.743 10.525.898
Earnings per 100 shares 335,50 230,83
Diluted earnings per 100 shares 335,50 230,83

30. FINANCIAL INVESTMENTS

Financial Investments

Non-Current Financial Investments

31 December 2024 31 December 2023
a) Available for sale financial
investments 7.874.499 8.434.381
b) Financial investments valued at cost
that do not have a quoted market
value 214.906 111.092
8.089.405 8.545.473

a) Fair Value Difference Reflect in Other Comprehensive income

31 December 2024 31 December 2023
Fair value difference reflect in other
comprehensive income that are not
traded in an active market 8.089.405 8.545.473
8.089.405 8.545.473

ROKETSAN which is Group's equity investment is revalued and stated at fair value. As of 31 December 2024, the revaluation was performed by Oyak Yatırım Menkul Değerler Anonim Şirketi which is an independent valuation company. The fair value was determined according to "Discounted Cash Flow" and "Similar Company Comparison" methodologies. Discount ratio used in "Discounted Cash Flow"method is 11,15 percent (31 December 2023: 12,10 percent).

Company Name Ratio(%) 31 December 2024 Ratio (%) 31 December 2023
ROKETSAN 14,897 7.874.499 14,897 8.434.381

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

30. FINANCIAL INVESTMENTS (continued)

a) Available for sale financial investments (continued)

Financial Investments (continued)

Roketsan shares, shown under available for sale financial investments, are reported on the third level in the fair value hierarchy (Note 33).

b) Financial investments valued at cost that do not have a quoted market value

The Group's equity investment and participation rate and the amount shown in financial investments are as follows:

Company Name Ratio
(%)
31 December
2024
Ratio
(%)
31 December
2023
Girişim Sermayesi Yatırım Fonu 186.908 90.613
ASPİLSAN 1 27.998 1 20.479
214.906 111.092

The above available-for-sale equity investment amounting to TL 214.906 (31 December 2023: TL 111.092) does not have a quoted market value and the fair value cannot be reliably measured due to a wide range of reasonable fair value estimates is significant and the probabilities of the various estimates cannot be reasonably assessed. For this reason they are stated at cost less provision for diminution in value, if any.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

31. FINANCIAL LIABILITIES

Financial Liabilities

31 December 31 December
2024 2023
Short-term financial liabilities Unsecured loan 13.504.216 15.982.672
Other short-term financial liabilities Unsecured loan 60.552 897.283
Current portion of long-term financial
liabilities Unsecured loan 9.270.807 10.275.255
Total short-term financial liabilities 22.835.575 27.155.210
Other long-term financial liabilities Unsecured loan 9.726.747 1.630.905
Total long-term financial liabilities 9.726.747 1.630.905
Total financial liabilities 32.562.322 28.786.115

As of 31 December 2024, TL 3.306.861 of the financial debts included in short-term borrowings consists of EUR Rediscount Foreign Currency Loans, which have maturity dates due between May 2025 and December 2025 and the interest rates between 4,29 percent and 4,42 percent. As of 31 December 2024, TL 4.960.292 of the financial debts included in short-term borrowings consists of EUR Spot Loans, which have maturity dates due between January 2025 and November 2025 and the interest rates between 4,30 percent and 5,95 percent. As of 31 December 2024, TL 4.839.193 of financial debts within short-term borrowings consist of USD Spot Loans, which have maturity dates due between February 2025 and August 2025 and the interest rate is between 5,70 percent and 6,75 percent. As of 31 December 2024, TL 35.000 of financial debts within short-term borrowings consist of TL Rediscount Foreign Currency Loans, which have maturity dates due between April 2025 and the interest rates 26,93 percent. As of 31 December 2024, TL 362.870 of financial debts within short-term borrowings consist of TL investment loans, which have maturity dates due between November 2025 and the interest rates 49 percent.

As of 31 December 2024, there are TL 6.613.722 EUR Spot Loans within the short-term borrowings, which have maturity dates due between July 2025 and October 2025, and the interest rates between 4,99 percent and 5,00 percent. As of 31 December 2024, there are TL 2.657.085 USD Spot Loans within the short-term borrowings, which have maturity dates due between February 2025 and August 2025, and the interest rates between 5,25 percent and 5,99 percent.

As of 31 December 2024, TL 60.552 of other short-term financial liabilities were taken within the scope of investment credit, which have maturity dates due November 2025, and the interest rates 49 percent.

As of 31 December 2024, TL 4.115.205 of the financial debts included in the long-term borrowings consists of EUR Spot Loans, which have maturity dates due February 2026 and the interest rates between 4,75 and 5,10 percent. As of 31 December 2024, TL 5.425.392 of the financial debts included in the long-term borrowings consists of USD Spot Loans, which have maturity dates due January 2026 and the interest rates 5,85 percent.

As of 31 December 2024, TL 186.150 of financial debts included in the long-term borrowings were taken within the scope of investment credit, which have maturity dates due December 2026 and the interest rate is between 9 percent and 17,50 percent.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

31. FINANCIAL LIABILITIES (continued)

Financial Liabilities (continued)

As of 31 December 2023, TL 6.748.265 of the financial debts included in short-term borrowings consists of EUR Rediscount Foreign Currency Loans, which have maturity dates due between January 2024 and December 2024 and the interest rates between 4,39 percent and 6,50 percent. As of 31 December 2023, TL 2.251.180 of financial debts within short-term borrowings consist of USD Rediscount Foreign Currency Loans, which have maturity dates due between January 2024 and October 2024 and the interest rate is between 6,95 percent and 7,92 percent. As of 31 December 2023, TL 6.983.227 of financial debts within short-term borrowings consist of TL Rediscount Foreign Currency Loans, which have maturity dates due between May 2024 and November 2024 and the interest rates between 14 percent and 27,50 percent.

As of 31 December 2023, there are TL 3.934.827 Rediscount EUR Loans within the short-term borrowings, which have maturity dates due between July 2024 and September 2024, and the interest rates between 8,85 percent and 9,10 percent. As of 31 December 2023, there are TL 5.618.535 Rediscount USD Loans within the short-term borrowings, which have maturity dates due between January 2024 and October 2024, and the interest rates between 7,20 percent and 9,00 percent. As of 31 December 2023, TL 721.893 of financial debts within short-term borrowings consist of TL Rediscount Foreign Currency Loans, which have maturity dates due between October 2024 and November 2024 and the interest rates 10,50 percent. As of 31 December 2023, TL 808.045 of remaining short-term financial debts consist of credit card debts with a maturity of 45 days with 1,00 percent interest rate to pay social security payments. As of 31 December 2023, TL 89.238 of current portion of long-term financial liabilities were taken within the scope of investment credit, which have maturity dates due March 2024, and the interest rates 15 percent.

As of 31 December 2023, TL 337.181 of the financial debts included in the long-term borrowings consists of EUR Rediscount Foreign Currency Loans, which have maturity dates due March 2025 and the interest rate varies according to EURIBOR. As of 31 December 2023, TL 1.293.724 of financial debts included in the long-term borrowings were taken within the scope of investment credit, which have maturity dates due October 2025 and the interest rate is between 21 percent and 24 percent.

31 December 2024
Currency Weighted average
interest rate (%)
Short-term Long-term
Euro 4,92% 14.904.972 4.121.869
TL 26,93% 726.358 209.058
USD 5,83% 7.204.245 5.395.820
22.835.575 9.726.747
31 December 2023
Currency Weighted average
interest rate (%)
Short-term Long-term
Euro 6,12% 10.961.984 392.621
TL 23,78% 8.621.229 1.238.284
USD 7,96% 7.571.997 --
27.155.210 1.630.905

Bank Loans

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

31. FINANCIAL LIABILITIES (continued)

Financial Liabilities (continued)

The breakdown of the loan repayments with respect to their maturities is as follows:

31 December 2024 31 December 2023
Within 1 year 22.835.575 27.155.210
Between 1-2 years 9.726.747 1.630.905
32.562.322 28.786.115

32. NATURE AND LEVEL OF RISKS RELATED TO FINANCIAL INSTRUMENTS

a) Capital risk management

The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximizing the return through the optimization of the debt and equity balance. The capital structure of the Group consists of debt, which includes the borrowings as explained Note 31, cash and cash equivalents and equity attributable to equity holders of the parent, comprising issued capital, reserves and retained earnings. The Group's board of directors review capital structure regularly in the meetings. The risks that are associated with every equity item together with the Group's cost of capital are evaluated by the board of directors. Based on the recommendations of the board, the Group aims to balance its overall capital structure through the payment of dividends.

Net debt and share capital as of 31 December 2024 and 2023 is as follows:

31 December 2024 31 December 2023
Total financial liabilities 32.562.322 28.786.115
Less: Cash and cash equivalents (16.636.200) (9.542.175)
Net debt (asset) 15.926.122 12.243.940
Total equity 141.359.149 127.602.504
Net debt/total equity 11% 15%

b) Financial Risk Factors:

It refers to the risks arising from the financial structure and financial preferences of the Group. Exchange rate, liquidity and interest rate risks are some risks under this heading. The Group's overall risk management program focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the Group's financial performance.

ASELSAN's Enterprise Risk Management Policy aims; to take proper actions against uncertainties that threaten the existence of the Company and to protect corporate identity and stakeholders' interest at all conditions. Risk management is an integrated element of Corporate Management. The information gathered within the scope of risk management activities in ASELSAN is integrated into decision making mechanisms. The "top-down" and "bottom-up" approach is being applied into Enterprise Risk Management activities together. Risks, which are significant enough to affect ASELSAN's achievement of its targets, are identified, evaluated, monitored and reported along with the risk responses and precautions to be taken. At ASELSAN; The Enterprise Risk Management process is regularly reviewed and improved. ASELSAN's employees and business processes are at the center of the Enterprise Risk Management System. Group's finance department identifies and evaluates financial risks and use tools to reduce risks by working in cooperation with the group's operating units.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

32. NATURE AND LEVEL OF RISKS RELATED TO FINANCIAL INSTRUMENTS (continued) Credit Risk

Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss to the Group. The Group is mainly working with public sector and obtaining advance payments where appropriate, both from public sector and private sector entities.

The Group management does not foresee significant credit risk. Additionally, receivables are monitored regularly to minimize the collection risk.

Carrying values of the financial assets reflect the maximum exposure to credit risk. The credit risks as of reporting date is as follows:

31 December 2024 Receivables
Trade Receivables Other Receivables
Related Third Related Third Bank
party party party Party Deposits Other
Maximum net credit
risk as of the reporting
date (A+B+C+D)1 52.784.880 30.549.492 -- 2.497.344 16.486.763 149.437
- The part of maximum
risk under guarantee
with collateral etc.2 -- 44.708 -- -- -- --
A. Net book value of
financial assets that are
neither past due nor
impaired 52.784.880 13.047.652 -- 2.497.344 16.486.763 149.437
B. Net book value of
financial assets that are
past due but not
impaired -- 17.501.840 -- -- -- --
C. Net book value of
impaired assets -- -- -- -- -- --
- Overdue (gross
carrying amount) -- 32.291 -- -- -- --
- Impairment (-) -- (32.291) -- -- -- --
- The part of net value
under guarantee with
collateral etc. -- -- -- -- -- --
- Undue (gross carrying
amount) -- -- -- -- -- --
- Impairment (-) -- -- -- -- -- --
- The part of net value
under guarantee with
collateral etc. -- -- -- -- -- --
D. Factors that include
off balance sheet credit
risks

1 While determining the amount, components which provide increase on credit reliability, like guarantees received are not taken into consideration.

2 The guarantees consist of the letters of guarantees, collaterals, checks and mortgages.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

32. NATURE AND LEVEL OF RISKS RELATED TO FINANCIAL INSTRUMENTS (continued)

Credit risk (continued)

Carrying values of the financial assets reflect the maximum exposure to credit risk. The credit risks as of reporting date is as follows:

31 December 2023 Receivables
Trade Receivables Other Receivables
Related Third Related Third Bank
party party party party Deposits Other
Maximum net credit
risk as of the reporting
date (A+B+C+D)1 47.562.159 27.807.124 -- 2.393.488 9.534.485 7.690
- The part of maximum
risk under guarantee
with collateral etc.2 -- 38.473 -- -- -- --
A. Net book value of
financial assets that are
neither past due nor
impaired 47.562.159 8.216.341 -- 2.393.488 9.534.485 7.690
B. Net book value of
financial assets that are
past due but not
impaired -- 19.590.783 -- -- -- --
C. Net book value of
impaired assets -- -- -- -- -- --
- Overdue (gross
carrying amount) -- 76.488 -- -- -- --
- Impairment (-) -- (76.488) -- -- -- --
- The part of net value
under guarantee with
collateral etc. -- -- -- -- -- --
- Undue (gross carrying
amount) -- -- -- -- -- --
- Impairment (-) -- -- -- -- -- --
- The part of net value
under guarantee with
collateral etc. -- -- -- -- -- --
D. Factors that include
off balance sheet credit
risks -- -- -- -- -- --

1 While determining the amount, components which provide increase on credit reliability, like guarantees received are not taken into consideration.

2 The guarantees consist of the letters of guarantees, collaterals, checks and mortgages.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

32. NATURE AND LEVEL OF RISKS RELATED TO FINANCIAL INSTRUMENTS (continued)

Credit Risk (continued)

The aging of the overdue receivables is as follows:

31 December 31 December
2024 2023
Overdue by 1-30 days 2.135.527 4.103.803
Overdue by 1-3 months 2.742.176 3.807.479
Overdue by 3-12 months 3.840.259 7.927.290
Overdue by 12 months 8.783.878 3.752.211
Total receivables 17.501.840 19.590.783

No collateral has been received for the overdue receivables.

Management has assessed its aged receivables and does not expect any collection problem arising from its aged receivables.

Liquidity risk

Board of directors has built an appropriate liquidity risk management framework for the management of the Group's short, medium and long-term funding and liquidity management requirements. ASELSAN eliminates the liquidity risk, which is known as the risk arising from default and inability to fund the the assets, it monitors forecasted and actual cash flows regularly and ensures the continuity of adequate funds and credit lines by matching the maturity of financial assets and liabilities. In order to manage the interest rate risk arising from changes in assets and / or liabilities as a result of fluctuations in interest rates in the future, it conducts transactions with fixed interest rates and uses financial derivative instruments when necessary.

The following tables detail the Group's remaining contractual maturity for its non-derivative financial liabilities. The tables have been drawn up based on the undiscounted cash flows of nonderivative financial liabilities based on the earliest payment date. The table includes both interest and principal cash flows. When receivables and payables are not constant, amounts are determined in accordance with interest rates generated from return rates as of the reporting date.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

32. NATURE AND LEVEL OF RISKS RELATED TO FINANCIAL INSTRUMENTS (continued)

Liquidity Risk (continued)

The maturities of the financial liabilities determined with respect to the contracts including the expected interest payments as of 31 December 2024 is as follows:

Contractual Maturity Analysis Carrying value Total cash outflow according to
contract (I+II+III+IV)
Less than 3
Months (I)
3-12
Months (II)
1-5 Years (III) More than 5
Years (IV)
Non-derivative financial
instruments -- -- -- -- -- --
Financial liabilities 32.562.322 32.562.322 13.564.768 9.270.807 9.726.747 --
Expected Maturity Carrying value Total cash outflow according to
contract (I+II+III+IV)
Less than 3
Months (I)
3-12
Months (II)
1-5 Years (III) More than 5
Years (IV)
Non-derivative financial
instruments -- -- -- -- -- --
Trade payables 19.760.534 20.012.374 11.866.890 8.145.484 -- --
Other payables 567.863 567.863 548.563 -- 19.300 --

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

32. NATURE AND LEVEL OF RISKS RELATED TO FINANCIAL INSTRUMENTS (continued)

Liquidity Risk (continued)

The maturities of the financial liabilities determined with respect to the contracts including the expected interest payments as of 31 December 2023 is as follows:

Contractual Maturity Analysis Carrying value Total cash outflow according to
contract (I+II+III+IV)
Less than 3
Months (I)
3-12
Months (II)
1-5 Years (III) More than 5
Years (IV)
Non-derivative financial
instruments -- -- -- -- -- --
Financial liabilities 28.786.115 28.786.115 3.320.364 23.834.846 1.630.905 --
Expected Maturity Carrying value Total cash outflow according to
contract (I+II+III+IV)
Less than 3
Months (I)
3-12
Months (II)
1-5 Years (III) More than 5
Years (IV)
Non-derivative financial
instruments -- -- -- -- -- --
Trade payables 21.569.584 21.802.433 21.645.325 48.101 109.007 --
Other payables 546.744 546.745 493.836 -- 52.909 --

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

32. NATURE AND LEVEL OF RISKS RELATED TO FINANCIAL INSTRUMENTS (continued)

Market risk management

The Group's activities, as detailed below, expose primarily to the financial risks from changes in foreign currency exchange rates and interest rates.

Market risk exposures are evaluated by sensitivity analysis, and stress scenario analysis.

There has been no change to the Group's exposure to market risks or the manner in which it manages and measures the risk in the current year compared to prior year.

Foreign currency risk management

The exchange rate risk, which is any kind of change that may occur in assets and / or liabilities as a result of exchange rate fluctuations in the future, ASELSAN aims to minimize the effect of exchange rate fluctuations by keeping the long and short foreign exchange position at a minimum level. The balance sheet methods have been used in managing the exchange rate risk. Implementations such as; making use of foreign exchange denominated loans in line with the company's export volume, matching the contract currency with the currency of the costs of the project, and signing the subcontractor contracts in line with the main contract currency are used.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

32. NATURE AND LEVEL OF RISKS RELATED TO FINANCIAL INSTRUMENTS (continued)

FOREIGN EXCHANGE POSITION
TL Equivalent TL equivalent by TL equivalent by
(Functional USD using closing EURO using closing Other1
31 December 2024 currency) rates rates
1. Trade receivables 17.676.413 417.340 14.723.890 80.371 2.952.523 --
2a. Monetary financial assets (including cash,
bank) 1.939.052 40.218 1.418.901 13.668 502.123 18.028
2b. Non-
monetary financial assets
8.499.120 91.482 3.227.505 50.194 1.843.948 99.688
3. Other 12.865 84 2.961 263 9.641 263
4. Current assets (1+2+3) 28.127.450 549.124 19.373.257 144.496 5.308.235 117.979
5. Trade receivables 45.446.341 551.044 19.441.007 707.894 26.005.334 --
6a. Monetary trade receivables -- -- -- -- -- --
6b. Non-monetary trade receivables 387.906 692 24.408 1.951 71.675 13.726
7. Other 218.247 5.206 183.674 938 34.473 100
8. Long-term assets (5+6+7) 46.052.494 556.942 19.649.089 710.783 26.111.482 13.826
9. Total assets (4+8) 74.179.944 1.106.066 39.022.346 855.279 31.419.717 131.805
10. Trade payables 8.207.075 168.203 5.944.949 54.030 1.988.433 273.693
11. Financial liabilities 22.109.217 203.833 7.204.245 405.000 14.904.972 --
12a. Other monetary financial liabilities 479.042 13.500 477.142 52 1.900 --
12b. Other non-monetary financial liabilities 3.736.761 201.682 7.128.186 28.223 1.038.679 --
13. Current liabilities (10+11+12) 34.532.095 587.218 20.754.522 487.305 17.933.984 273.693
14. Trade payables -- -- -- -- -- --
15. Financial liabilities 9.517.689 152.667 5.395.820 112.000 4.121.869 --
16a. Other monetary financial liabilities 6.998 132 4.661 64 2.337 --
16b. Other non-monetary financial liabilities 4.639.174 191.363 6.763.492 27.991 1.030.148 --
17. Non-current liabilities (14+15+16) 14.163.861 344.162 12.163.973 140.055 5.154.354 --

1 Comprises of the currencies CAD, CHF, GBP, JPY, AUD, DKK, ZAR, AED, PHP, SAR.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

32. NATURE AND LEVEL OF RISKS RELATED TO FINANCIAL INSTRUMENTS (continued)

FOREIGN EXCHANGE POSITION
31 December 2024 TL Equivalent
(Functional
currency)
USD TL equivalent by
using closing
rates
EURO TL equivalent by
using closing
rates
Other
18. Total liabilities (13+17) 48.695.956 931.380 32.918.495 627.360 23.088.338 273.693
19. Net asset/liability position of off
balance sheet derivative financial
instruments (19a-19b)
19a. Hedged total financial assets
--
--
--
--
--
--
--
--
--
--
--
--
19b. Hedged total financial liabilities -- -- -- -- -- --
20. Net foreign currency asset/liability (9-
18+19)
25.483.988 174.686 6.103.851 227.919 8.331.379 (141.888)
21. Net foreign currency asset / liability
position of monetary items (1+2a+5+6a-10-
11-12a-14-15-16a) 24.741.785 470.267 16.556.981 230.787 8.440.469 (255.665)
22. Fair value of derivative financial
instruments used in foreign currency hedge
-- -- -- -- -- --
23. Hedged foreign currency assets -- -- -- -- -- --
24. Hedged foreign currency liabilities -- -- -- -- -- --
25. Exports 17.146.335 182.178 3.213.478 146.554 3.258.660 10.674.197
26. Imports 20.030.581 378.920 13.347.149 142.582 5.238.859 1.444.573

Accompanying foreign exchange position which was prepared in accordance with TAS is different from the foreign exchange position of the financial statement which is prepared according to General Communiqué on Accounting System Application (GCASA). The difference is mainly due to the adjustments and classifications which are related with TFRS 15 .

"For TL functional currency" calculations regarding "Other non-monetary assets" and "Other non-monetary liabilities" presented under foreign currency position, advances received are considered with regard to historic values therefore "TL equivalent of currency as at balance sheet date" differentiate.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

32. NATURE AND LEVEL OF RISKS RELATED TO FINANCIAL INSTRUMENTS (continued)

FOREIGN EXCHANGE POSITION
TL Equivalent TL equivalent by TL equivalent by
(Functional USD using closing EURO using closing Other1
31 December 2023 currency) rates rates
1. Trade receivables 20.065.627 357.159 15.180.152 103.881 4.885.475 --
2a. Monetary financial assets (including cash,
bank) 3.022.375 53.431 2.270.939 15.509 729.397 22.039
2b. Non-
monetary financial assets
7.420.692 54.252 2.305.837 40.888 1.922.969 96.872
3. Other 5.403 109 4.650 8 377 376
4. Current assets (1+2+3) 30.514.097 464.951 19.761.578 160.286 7.538.218 119.287
5. Trade receivables 35.354.184 451.020 19.169.489 344.137 16.184.695 --
6a. Monetary trade receivables -- -- -- -- -- --
6b. Non-monetary trade receivables 1.578.525 2.176 92.495 24.114 1.134.097 16.785
7. Other 46.229 590 25.067 326 15.331 5.831
8. Long-term assets (5+6+7) 36.978.938 453.786 19.287.051 368.577 17.334.123 22.616
9. Total assets (4+8) 67.493.035 918.737 39.048.629 528.863 24.872.341 141.903
10. Trade payables 9.580.225 111.244 4.736.666 96.208 4.532.791 310.768
11. Financial liabilities 18.533.981 177.833 7.571.997 232.667 10.961.984 --
12a. Other monetary financial liabilities 61.290 645 27.455 119 5.608 28.227
12b. Other non-monetary financial liabilities 11.665.331 203.199 8.652.068 133.213 6.276.268 --
13. Current liabilities (10+11+12) 39.840.827 492.921 20.988.186 462.207 21.776.651 338.995
14. Trade payables -- -- -- -- -- --
15. Financial liabilities 392.621 -- -- 8.333 392.621 --
16a. Other monetary financial liabilities 5.535 130 5.535 -- -- --
16b. Other non-monetary financial liabilities 2.439.259 141.717 6.034.194 75.659 3.564.635 --
17. Non-current liabilities (14+15+16) 2.837.415 141.847 6.039.729 83.992 3.957.256 --

1 Comprises of the currencies CAD, CHF, GBP, JPY, AUD, DKK, ZAR, AED, PHP, SAR.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

32. NATURE AND LEVEL OF RISKS RELATED TO FINANCIAL INSTRUMENTS (continued)

FOREIGN EXCHANGE POSITION
TL Equivalent
(Functional
USD TL equivalent by
using closing
EURO TL equivalent by
using closing
Other
31 December 2023 currency) rates rates
18. Total liabilities (13+17) 42.678.242 634.768 27.027.915 546.199 25.733.907 338.995
19. Net asset/liability position of off
balance sheet derivative financial
instruments (19a-19b) -- -- -- -- -- --
19a. Hedged total financial assets -- -- -- -- -- --
19b. Hedged total financial liabilities -- -- -- -- -- --
20. Net foreign currency asset/liability (9-
18+19) 24.814.793 283.969 12.020.714 (17.336) (861.566) (197.092)
21. Net foreign currency asset / liability
position of monetary items (1+2a+5+6a-10-
11-12a-14-15-16a) 29.868.534 571.758 24.278.927 126.200 5.906.563 (316.956)
22. Fair value of derivative financial
instruments used in foreign currency hedge -- -- -- -- -- --
23. Hedged foreign currency assets -- -- -- -- -- --
24. Hedged foreign currency liabilities -- -- -- -- -- --
25. Exports 9.344.425 127.833 4.639.613 125.518 4.704.812 --
26. Imports 24.503.652 347.796 14.782.200 161.502 7.595.393 2.126.059

Accompanying foreign exchange position which was prepared in accordance with TAS is different from the foreign exchange position of the financial statement which is prepared according to General Communiqué on Accounting System Application (GCASA). The difference is mainly due to the adjustments and classifications which are related with TFRS 15.

"For TL functional currency" calculations regarding "Other non-monetary assets" and "Other non-monetary liabilities" presented under foreign currency position, advances received are considered with regard to historic values therefore "TL equivalent of currency as at balance sheet date" differentiate.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

32. NATURE AND LEVEL OF RISKS RELATED TO FINANCIAL INSTRUMENTS (continued)

Foreign currency sensitivity

The Group is exposed to foreign currency risk with respect to USD and EURO.

The following table details the Group's sensitivity to a 10 percent increase and decrease in foreign exchange rates. 10 percent is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management's assessment of the possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and present 10 percent change in foreign currency rates. This analysis does not include Group companies' balance sheet items which have functional currency other than TL. The effects of 10 percent changes in foreign currency rate on financial statements is as follows;

Foreign currency sensitivity table
31 December 2024
Profit/Loss Equity1
Appreciation Depreciation Appreciation Depreciation
of foreign of foreign of foreign of foreign
currency currency currency currency
Change of USD against TL by 10%:
1- USD denominated net
assets/(liabilities) 1.655.698 (1.655.698) 1.655.698 (1.655.698)
2- Hedged amount against
USD risk (-) -- -- -- --
3- Net effect of USD (1+2) 1.655.698 (1.655.698) 1.655.698 (1.655.698)
Change of EURO against TL by 10%:
4- EURO denominated net
assets/(liabilities) 844.047 (844.047) 844.047 (844.047)
5- Hedged amount against
EURO risk (-) -- -- -- --
6- Net effect of EURO (4+5) 844.047 (844.047) 844.047 (844.047)
Change of other currencies against TL by 10%:
7- Other currencies
denominated net assets/
(liabilities) (25.566) 25.566 (25.566) 25.566
8- Hedged amount against
other currencies risk (-) -- -- -- --
9- Net effect of other
currencies (7+8) (25.566) 25.566 (25.566) 25.566

1 Comprises of profit/loss effect.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

32. NATURE AND LEVEL OF RISKS RELATED TO FINANCIAL INSTRUMENTS (continued)

Foreign currency sensitivity (continued)

Foreign currency sensitivity table
31 December 2023
Profit/Loss Equity1
Appreciation Depreciation Appreciation Depreciation
of foreign of foreign of foreign of foreign
currency currency currency currency
Change of USD against TL by 10%:
1- USD denominated net
assets/(liabilities) 2.427.892 (2.427.892) 2.427.892 (2.427.892)
2- Hedged amount against
USD risk (-) -- -- -- --
3- Net effect of USD (1+2) 2.427.892 (2.427.892) 2.427.892 (2.427.892)
Change of EURO against TL by 10%:
4- EURO denominated net
assets/(liabilities) 590.656 (590.656) 590.656 (590.656)
5- Hedged amount against
EURO risk (-) -- -- -- --
6- Net effect of EURO (4+5) 590.656 (590.656) 590.656 (590.656)
Change of other currencies against TL by 10%:
7- Other currencies
denominated net assets/
(liabilities) (31.695) 31.695 (31.695) 31.695
8- Hedged amount against
other currencies risk (-) -- -- -- --
9- Net effect of other
currencies (7+8) (31.695) 31.695 (31.695) 31.695

Interest rate risk management

As of 31 December 2024 and 31 December 2023, since all of the loans obtained by the Group are fixed-rate loans, the Group is not exposed to significant interest rate risk.

As of 31 December 2024, the Group does not have interest bearing financial assets, therefore there is no exposure to interest risk (31 December 2023: None).

Price risk

The Group usually enters into fixed price contracts, therefore, is not exposed to any major price risk.

Hierarchy of fair value

As of 31 December 2024 and 31 December 2023, the Group's financial assets at their fair values are as in the following page:

1 Comprises of profit/loss effect.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

33. FINANCIAL INSTRUMENTS FAIR VALUE DISCLOSURES AND EXPLANATIONS ON HEDGE ACCOUNTING

Financial assets at fair Financial assets at Financial assets at fair Financial liabilities at
31 December 2024 value P/L amortized cost value through OCI amortized cost Carrying value Note
Financial assets
Cash and cash equivalents -- 16.637.264 -- -- 16.637.264 3
Financial investments 214.906 -- 7.874.499 -- 8.089.405 30
Equity accounted investments 1.332.264 -- -- -- 1.332.264 8
Trade receivables -- 83.334.372 -- -- 83.334.372 6
Financial liabilities
Borrowings -- -- -- 32.562.322 32.562.322 31
Trade payables -- -- -- 19.760.534 19.760.534 6
Other payables -- -- -- 567.863 567.863 7

Financial assets at fair Financial assets at Financial assets at fair Financial liabilities at
31 December 2023 value P/L amortized cost value through OCI amortized cost Carrying value Note
Financial assets
Cash and cash equivalents -- 9.543.479 -- -- 9.543.479 3
Financial investments 111.092 -- 8.434.381 -- 8.545.473 30
Equity accounted investments 1.241.418 -- -- -- 1.241.418 8
Trade receivables -- 75.369.283 -- -- 75.369.283 6
Financial liabilities
Borrowings -- -- -- 28.786.115 28.786.115 31
Trade payables -- -- -- 21.569.584 21.569.584 6
Other payables -- -- -- 546.744 546.744 7

The Group's management assesses that the carrying value reflects the fair value of financial instruments. Related financial assets are presented at cost after deducting impairment allowance if any.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

33. FINANCIAL INSTRUMENTS FAIR VALUE DISCLOSURES AND EXPLANATIONS ON HEDGE ACCOUNTING (continued)

The fair values of financial assets and financial liabilities are determined as follows:

  • Level 1: The fair value of financial assets and financial liabilities with standard terms and conditions and traded on active liquid markets are determined with reference to quoted market prices;
  • Level 2: The fair value of other financial assets and financial liabilities are determined in accordance with data which can be observed by directly or indirectly and which excludes the registered prices described in Level 1 ; and
  • Level 3: The fair value of the financial assets and financial liabilities are determined where there is no observable market data.

Fair value hierarchy of financial assets that are measured at fair value:

ROKETSAN has presented under Group's financial assets that fair value reflect in other comprehensive income as of 31 December 2024. The fair value of ROKETSAN as of 31 December 2024 is TL 7.874.499 and was determined according to "Discounted Cash Flow", "Similar Company Comparison" and "Realized Company Mergers and Acquisitions" methodologies and its fair value hierarchy is Level 3.

Reconciliation of the Group's assets and liabilities that are measured at Level 3 fair value are presented as follow:

z
Available for sale financial assets
31 December 2024 31 December 2023
Marketable Marketable
Equity Shares Equity Shares
Opening balance 8.434.381 10.132.056
Total gain/loss
- transferred to other comprehensive
income (559.882) (1.669.946)
- - impairment -- (27.729)
Capital increase -- --
Closing balance 7.874.499 8.434.381

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

33. FINANCIAL INSTRUMENTS FAIR VALUE DISCLOSURES AND EXPLANATIONS ON HEDGE ACCOUNTING (continued)

31 December 2024 Fair value level as of reporting date
Level 1 Level 2 Level 3
TL TL TL
Financial Investments -- -- 7.874.499
-- -- 7.874.499
31 December 2023 Fair value level as of reporting date
Level 1 Level 2 Level 3
TL TL TL
Financial Investments -- -- 8.434.381
-- -- 8.434.381

The movement of the fair value level as of 31 December 2024 is as follows:

Fair value level as of reporting date

Level 1
TL
Level 2
TL
Level 3
TL
1 January 2024 -- -- 8.434.381
Additions -- -- (559.882)
31 December 2024 -- -- 7.874.499

34. EXPLANATIONS RELATED TO THE STATEMENT OF CASH FLOW

Reconciliation of the movements related to cash flows from financing activities and liabilities

Non-cash movements 31
December
2024
31
December
2023
Cash
Movements
Additions Exchange
rate
change
Other
Financial Liabilities
(Note 31)
Total liabilities arising
28.786.115 9.670.044 470.235 2.484.129 (8.848.201) 32.562.322
from financing activities 28.786.115 9.670.044 470.235 2.484.129 (8.848.201) 32.562.322

The table above represents the changes in the cash amounts related to "Proceeds from Borrowings" and "Repayments from Borrowings" which are presented under cash flows from financing activities.

35. FEES FOR SERVICES RENDERED FROM INDEPENDENT AUDIT FIRMS

For the period ended on 31 December 2024, fee for independent audit is TL 1.280 of the Group (31 December 2023: TL 715).

For the period ended on 31 December 2024, there is no different services rendered from the independent audit firms except fee for independent audit of the Group.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

(Amounts are expressed in Thousand Turkish Lira ("TL") in terms of the purchasing power of the TL at 31 December 2024, unless otherwise indicated.)

36. EVENTS AFTER THE REPORTING PERIOD

After the reporting period, the Group have signed contracts amounting to USD 414 Million.

The Microelectronics Guidance and Electro-Optics (MGEO) Vice Presidency has been restructured into two Vice Presidencies, namely "Avionics and Guidance Systems Vice Presidency" and "Microelectronics and Electro-Optics Vice Presidency," to support the company's growth strategies, enhance focus on high technology, and further elevate the global capabilities achieved in developing game-changing technologies.

Murat KARATAŞ, the Vice President of Microelectronics Guidance and Electro-Optics (MGEO), has been appointed as the Vice President of Avionics and Guidance Systems (AGS); İsmail ÖZSARAÇ, the Director of Electro-Optical Design at MGEO, has been appointed as the Vice President of the Microelectronics and Electro-Optical Systems (MEOS).

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