Legal Proceedings Report • May 23, 2024
Legal Proceedings Report
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Report Of Audit Committee on the Utilisation of the Funds Obtained from the Public Offering
Prepared in accordance with Article 33 of the Capital Markets Board's Equity Communiqué No. VII-128.1.
May 23, 2024
This report has been prepared in accordance with Article 33 of the Capital Markets Board's Communiqué on Shares numbered VII.128-1 ("Communiqué") and includes assessments and determinations on whether the funds obtained from the capital increase have been utilized as specified.
Paragraph 1 of Article 33 of the Capital Markets Board's Communiqué on Shares No. VII-128.1 stipulates that: "In the public offering of the shares of non-publicly traded corporations through capital increase and in capital increases through rights issues to be made by publicly traded corporations whose shares are traded on the stock exchange, it is obligatory to prepare a report on the purposes for which the funds to be obtained from the capital increase will be used, and this report must be resolved by the board of directors and sent and disclosed to the public during the application to be made to the Board for the approval of the prospectus or issue document. Regarding whether the funds obtained from the capital increase are used as specified, publicly held corporations are required to prepare a report within ten business days following the announcement of the first two financial statements containing the results of the capital increase, which are publicly disclosed after the commencement of trading of their shares on the stock exchange, and publicly held corporations whose shares are traded on the stock exchange are required to publish the said report on ,the website of the corporation and on PDP. This obligation is fulfilled by the audit committee within the corporation. For the companies which are not obliged to establish an audit committee, this obligation is fulfilled by the board of directors."
This Report has been prepared by the Audit Committee following the announcement of the financial statement dated 31.12.2023, which is the third financial statement following the public offering.
After the public offering, the fund usage report was published for two periods following the publication of the financial results of 30.06.2023 and 30.09.2023, but since the fund obtained from the IPO was transferred to the company after 30.06.2023, the report in question was published for the third time following the financial results of 31.12.2023.
Within the framework of the Prospectus approved by the Company's Capital Markets Board meeting dated 13.07.2023 and numbered 38/789;
As the capital with a nominal value of TL 109,390,465.00 was issued due to the increase of the Company's issued capital of TL 405,388,195.51 within the registered capital ceiling of TL 1,000,000,000 to TL 514,778,660.51 by completely restricting the pre-emptive rights of the existing partners, a gross public offering income of TL 2,734,761,625 and a net income of TL 2,641,617,218, after public offering-related expenses, were obtained.
Within the framework of the Prospectus approved by the Company's Capital Markets Board meeting dated 13.07.2023 and numbered 38/789, and the Report on the Use of the Funds Obtained from the Capital Increase, which was disclosed to the public; details of the planned usage areas of the fund amounting to TL 2,641,617,218 TL are as follows:
The Company plans to invest in 2 additional new production lines within the existing slabsinterflex factory in Çan location in order to produce slab-sinterflex in different sizes and thicknesses, with an amount corresponding to approximately 50% of the fund obtained as a result of the capital increase.
With the investment to be made in the first planned production line, 6-10-20 mm thick slab sheets with dimensions of 60x120, 120x120, 120x240, 120x280 will be produced, and in the second production line, 12mm-20mm thick slab sheets with dimensions of 160x320, 80x320 will be produced. Since it will be built within the existing slab-sinterflex factory, there will be no need for a building investment from scratch, and the line will be installed inside the building. In addition, it is planned to install a new energy-efficient machine and invest in a digital glazing line for the existing slab-sinterflex factory.
As of May 23, 2024, the publish date of this report, an expenditure of TL 28,958,522 was made for the Slab-Sinterflex product group from the fund provided by the IPO.
The company plans to make recycling and sustainability investments with 15% of the fund it has obtained.
In this context, it is planned to make an investment that will enable the treatment sludge generated in the treatment plant to be used in mass production with screw transportation and Blunger (sludge opener) system investment. In addition, it plans to invest in the establishment of a system that will save natural gas by using Granite, Sinterfleks, SSG baked shard recycling and waste hot air resulting from firing in kilns in drying units.
As of May 23, 2024, the publish date of this report, the total expenditures made in the field of sustainability were TL 58,664,340.
The company plans to invest in the bathroom business line with 5% of the fund it has obtained.
In this sense, the Company plans to invest in 2 new chamber ovens, 1 drying oven, 1 glazing robot and 2 pressure benches for the production of toilets in the sanitary ware factory in Semedeli.
As of May 23, 2024, the publish date of this report, a total of TL 49,394,023 was spent in the bathroom business line, in line with the prospectus.
The company plans to expand its existing line in the production of composite glazes, the main ingredient of which is frit, by purchasing silos and weighing mats, with 4% of the funds it obtained.
Additionally, it plans to purchase a device called Nost to be used in frit furnaces. The main working principle of this device is to increase the combustion efficiency in furnaces by increasing the amount of oxygen and thus reduce the energy cost.
As of May 23, 2024, the publish date of this report, there has been no expenditure in this area.
The company aims to grow by financing local production facilities that it will establish in Middle East or Central Asia, acquire or become partners in whole or in part, and foreign investments, with a portion corresponding to 6% of the public offering proceeds.
In line with this strategy, the Company has spent, as of May 23, 2024, a total of TL 129,785,646 for the purchase of 49% of the shares representing the capital of Al-Sadaf Porcelain Company, headquartered in Baghdad, Iraq, in December 2023 and for investments in production in the factory in Kirkuk.
The company planned to reduce financial indebtedness by paying off existing bank loans with 20% of the funds it planned to obtain from the public offering.
As of May 23, 2024, the publish date of this report, the total bank loan closed with 20% of the fund obtained, in accordance with the prospectus, was TL 528,323,443.
As of May 23, 2024, the publish date of this report, out of net IPO proceeding of 2.641.617.218 TL, a total of TL 795.125.973 was used for reducing financial indebtness and investments detailed above, and the remaining balance of TL 1.846.491.245 sits in risk-free banking products in TL.
| Places of Use of Funds Obtained from Capital Increas |
Planned (TL) |
Share (%) |
Realised (TL) |
Share (%) |
Remaining Balance (TL) |
|---|---|---|---|---|---|
| 1. Domestic Investments | 1.954.796.742 | %74,0 | 137.016.885 | %5,2 | 1.817.779.857 |
| - Slab-Sinterflex |
|||||
| Investment | 1.320.808.609 | %50,0 | 28.958.522 | %1,1 | 1.291.850.087 |
| - Sustainability |
396.242.583 | %15,0 | 58.664.340 | %2,2 | 337.578.243 |
| Investment | |||||
| - Bathroom Investment |
132.080.861 | %5,0 | 49.394.023 | %1,9 | 82.686.838 |
| - Frit Investment |
105.664.689 | %4,0 | 0 | %0,0 | 105.664.689 |
| 2. Investments Abroad | 158.497.033 | %6,0 | 129.785.646 | %4,9 | 28.711.387 |
| 3. Reducing Financial | 528.323.443 | %20,0 | 528.323.443 | %20,0 | 0 |
| Indebtedness | |||||
| Total Fund | 2.641.617.218 | %100,0 | 795.125.973 | %30,1 | 1.846.491.245 |
It is submitted for the information of the public and our investors.
Kaleseramik, Çanakkale Kalebodur Seramik Sanayi A.Ş.
Audit Committee
Cengiz SOLAKOĞLU Fahri Okan BÖKE
Chairman Member
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