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ÜLKER BİSKÜVİ SANAYİ A.Ş. Interim / Quarterly Report 2021

Nov 4, 2021

5974_rns_2021-11-04_5b0e2788-1823-45f8-8d52-f7197a579b15.pdf

Interim / Quarterly Report

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ÜLKER BİSKÜVİ SANAYİ A.Ş. AND ITS SUBSIDIARIES

CONVENIENCE TRANSLATION INTO ENGLISH OF CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD 1 JANUARY – 30 SEPTEMBER 2021 (ORIGINALLY ISSUED IN TURKISH)

CONVENIENCE TRANSLATION INTO ENGLISH OF CONDENSED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH ÜLKER BİSKÜVİ SANAYİ A.Ş. AND ITS SUBSIDIARIES CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE INTERIM PERIOD 1 JANUARY - 30 SEPTEMBER 2021

CONTENTS PAGE(S)
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION.................................................
1-2
CONDENSED CONSOLIDATED STATEMENTS OF PROFIT OR LOSS ........................................................
3
CONDENSED CONSOLIDATED STATEMENTS OF OTHER COMPREHENSIVE INCOME .....................
4
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY ............
5-6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW .................................................................
7-8
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ...........................................
9-53
NOTE 1 ORGANIZATION AND OPERATIONS OF THE GROUP ...............................................................
9-10
NOTE 2 BASIS OF PRESENTATION OF FINANCIAL STATEMENTS .......................................................
10-20
NOTE 3 BUSINESS COMBINATIONS ...........................................................................................................
21
NOTE 4 SEGMENTAL INFORMATION .........................................................................................................
22
NOTE 5 CASH AND CASH EQUIVALENTS .................................................................................................
23
NOTE 6 FINANCIAL INVESTMENTS ............................................................................................................
23-24
NOTE 7 FINANCIAL LIABILITIES.................................................................................................................
24-26
NOTE 8 TRADE RECEIVABLES AND PAYABLES......................................................................................
27
NOTE 9 OTHER RECEIVABLES AND PAYABLES......................................................................................
27-28
NOTE 10 DERIVATIVE INSTRUMENTS .........................................................................................................
28
NOTE 11 INVENTORIES....................................................... .............................................................................
29
NOTE 12 INVESTMENT PROPERTIES ............................................................................................................
29
NOTE 13 TANGIBLE ASSETS ..........................................................................................................................
30-32
NOTE 14 GOODWILL ........................................................................................................................................
32
NOTE 15 INTANGIBLE ASSETS ......................................................................................................................
33-34
NOTE 16 OTHER PROVISIONS, CONTINGENT ASSETS AND LIABILITIES ............................................
34-35
NOTE 17 REVENUE AND COST OF SALES ...................................................................................................
35
NOTE 18 EXPENSES BY NATURE ..................................................................................................................
36
NOTE 19 FINANCIAL INCOME........................................................................................................................
37
NOTE 20 FINANCIAL EXPENSES ....................................................................................................................
37
NOTE 21 TAX ASSET AND LIABILITIES .......................................................................................................
37-41
NOTE 22 EARNINGS PER SHARE ...................................................................................................................
41
NOTE 23 BALANCES AND TRANSACTIONS WITH RELATED PARTIES .................................................
42-46
NOTE 24 NATURE AND LEVEL OF RISKS DERIVED FROM FINANCIAL INSTRUMENTS ...................
47-50
NOTE 25 FINANCIAL INSTRUMENTS ...........................................................................................................
50-52
NOTE 26 EVENTS AFTER THE BALANCE SHEET DATE ............................................................................
53

CONVENIENCE TRANSLATION INTO ENGLISH OF CONDENSED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH ÜLKER BİSKÜVİ SANAYİ A.Ş. AND ITS SUBSIDIARIES

INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS OF 30 SEPTEMBER 2021, 31 DECEMBER 2020 AND 31 DECEMBER 2019

(Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise stated.)

ASSETS
Current Assets
Cash and Cash Equivalents
Financial Investments
Trade Receivables
- Due From Related Parties
- Other Trade Receivables
Other Receivables
- Due From Related Parties
- Other Receivables
Derivative Instruments
Inventories
Prepaid Expenses
- Other Prepaid Expenses
Current Income Tax Assets
Other Current Assets
Non-Current Assets
Financial Investments
Other Receivables
- Other Receivables
Investment Properties
Tangible Assets
Intangible Assets
- Goodwill
- Other Intangible Assets
Prepaid Expenses
Deferred Tax Asset
TOTAL ASSETS		 Notes
5
6
8-23
8
9-23
9
10
11
6
9
12
13
14
15
21		 Unaudited
Current
Period
30 September
2021
13.852.909
2.862.609
4.277.960
2.357.206
1.284.907
564.981
44.171
-
2.028.702
198.159
74.053
160.161
5.033.462
978.106
-
-
2.943.696
594.683
434.733
42.216
40.028
18.886.371		 Restated(*)
Unaudited
Previous
Period
31 December
2020
14.701.119
3.835.520
3.639.474
2.040.146
1.051.854
2.163.423
51.313
37.340
1.695.858
87.760
8.356
90.075
4.790.555
978.106
369
26.145
2.846.826
496.196
363.782
48.664
30.467
19.491.674		 Restated(*)
Unaudited
Previous
Period
31 December
2019
9.451.352
2.045.073
3.057.459
2.160.033
279.799
401.969
38.081
364.291
909.952
113.980
4.583
76.132
4.206.117
946.029
460
21.155
2.514.964
388.047
292.501
7.650
35.311
13.657.469

(*) Restatement effects have been explained in Note 2.

1

The accompanying notes form an integral part of these consolidated financial statements.

CONVENIENCE TRANSLATION INTO ENGLISH OF CONDENSED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH ÜLKER BİSKÜVİ SANAYİ A.Ş. AND ITS SUBSIDIARIES

INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS OF 30 SEPTEMBER 2021, 31 DECEMBER 2020 AND 31 DECEMBER 2019

(Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise stated.)

LIABILITIES
Current Liabilities
Short Term Financial Liabilities
Short Term Portion of Long-Term Financial Liabilities
Trade Payables
- Due To Related Parties
- Other Trade Payables
Employee Benefit Related Liabilities
Other Payables
- Due to Related Parties
- Other Payables
Derivative Instruments
Deferred Revenue
Current Income Tax Liabilities
Short Term Provisions
- Short Term Provisions for Employee Benefits
- Other Short Term Provisions
Other Current Liabilities
Non-Current Liabilities
Long Term Financial Liabilities
Long Term Provisions
- Long Term Provisions for Employee Benefits
Deferred Tax Liabilities
SHAREHOLDERS’ EQUITY
Equity Attributable To Equity Holders’ of the Parent
Share Capital
Inflation Adjustments to Share Capital
Effect of Business Combinations Under Common Control
Other Comprehensive Income/Expense not to be
Reclassified to Profit or Loss
- Increases on Revaluation of Plant, Property and Equipment
- Actuarial Losses on Post-Employment Termination Benefit
Obligation
- Gains from Financial Assets Measured at Fair
Value through Other Comprehensive Income
- Other Gains
Other Comprehensive Income/Expense to be
Reclassified to Profit or Loss
- Currency Translation Differences
- Cash Flow Hedges
Restricted Reserves
Retained Earnings
Net Profit for the Period
Non-Controlling Interests
TOTAL LIABILITIES AND EQUITY		 Notes
7
7
8-23
8
9-23
9
10
21
7
21

 Unaudited
Current
Period
30 September
2021
4.209.866
723.568
1.452.933
321.535
1.049.637
67.553
557
7.873
1.566
50.739
114.442
92.150
238.753
88.560
10.962.464
10.558.359
275.296
128.809
3.714.041
2.800.809
342.000
108.056
(4.196.733)
786.128
(41.020)
459.069
-
147.334
(851)
157.537
4.384.635
654.654
913.232
18.886.371		 Restated(*)
Unaudited
Previous
Period
31 December
2020
3.230.685
287.953
1.134.997
276.004
999.406
55.028
120
5.411
1.892
77.384
85.888
90.690
166.658
49.254
9.444.296
9.058.346

228.105
157.845
6.816.693
6.036.780
342.000
108.056
(460.419)
850.738
(37.870)
459.069
-
22.444
(1.400)
131.587
3.541.181
1.081.394
779.913
19.491.674		 Restated(*)
Unaudited
Previous
Period
31 December
2019
7.122.623
348.712
5.424.980
240.165
744.865
49.571
104
5.297
-
15.507
71.298
78.280
104.874
38.970
1.337.118
967.342
174.595
195.181
5.197.728
4.674.825
342.000
108.056
(460.419)
671.995
(29.004)
422.738
817.879
(57.006)
3.695
131.587
1.558.259
1.165.045
522.903
13.657.469

(*) Restatement effects have been explained in Note 2.

2

The accompanying notes form an integral part of these consolidated financial statements.

CONVENIENCE TRANSLATION INTO ENGLISH OF CONDENSED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH ÜLKER BİSKÜVİ SANAYİ A.Ş. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF PROFIT OR LOSS FOR THE INTERIM PERIODS ENDED 30 SEPTEMBER 2021 AND 2020

(Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise stated.)

Revenue
Cost of Sales
GROSS PROFIT
General Administrative Expenses
Marketing, Sales and Distribution Expenses
Research and Development Expenses
Other Operating Income
Other Operating Expenses
OPERATING PROFIT
Income from Investment Activities
Expenses from Investment Activities
OPERATING PROFIT BEFORE FINANCIAL
INCOME AND EXPENSES
Financial Income
Financial Expenses
PROFIT BEFORE TAX
Tax Expense
Corporate Tax Expense
Deferred Tax Income
PROFIT FOR THE PERIOD
Distribution of the Profit for the Period
Non-Controlling Interest
Equity Holders of the Parent
Earnings Per Share		 Notes
17
17
18
18
18
19
20
21
21
22		 Unaudited
Current
Period
1 January -
30September 2021
8.418.957
(6.041.077)
2.377.880
(242.968)
(780.580)
(27.070)
200.454
(227.837)
1.299.879
2.227.413
(16.775)
3.510.517
453.477
(2.920.628)
1.043.366
(270.123)
(309.068)
38.945
773.243
118.589
654.654
1,91		 Unaudited
Current
Period
1 July -
30September 2021
2.976.133
(2.171.949)
804.184
(82.105)
(270.405)
(8.310)
13.302
(7.361)
449.305
(105.996)
(15.004)
328.305
448.195
(737.170)
39.330
(6.126)
(16.480)
10.354
33.204
30.747
2.457
0,01		 Restated (*)
Unaudited
Previous
Period
1 January -
30September 2020
6.976.612
(4.864.280)
2.112.332
(195.877)
(671.055)
(16.702)
246.971
(163.189)
1.312.480
2.306.725
(116.556)
3.502.649
250.892
(2.738.080)
1.015.461
(194.490)
(299.353)
104.863
820.971
139.438
681.533
1,99		 Restated (*)
Unaudited
Previous
Period
1 July -
30September 2020
2.291.160
(1.616.082)
675.078
(66.977)
(211.264)
(5.586)
96.870
(55.232)
432.889
1.219.779
129.387
1.782.055
34.263
(1.444.391)
371.927
(73.585)
(96.689)
23.104
298.342
50.258
248.084
0,73

(*) Restatement effects have been explained in Note 2.

3

The accompanying notes form an integral part of these consolidated financial statements.

CONVENIENCE TRANSLATION INTO ENGLISH OF CONDENSED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH ÜLKER BİSKÜVİ SANAYİ A.Ş. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME FOR THE INTERIM PERIOD ENDED 30 SEPTEMBER 2021 AND 2020

(Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise stated.)

PROFIT FOR THE PERIOD
Other Comprehensive Income
Not to be Reclassified To Profit or Loss
Actuarial Loss on Post-Employment
Termination Benefit Obligation
Gains from Financial Assets Measured at Fair Value
Through Other Comprehensive Income
Deferred Tax for the Items That Will not be
Reclassified to Profit or Loss
Actuarial Loss on Post-Employment Termination, Tax Effect
Gains from Financial Assets Measured at Fair Value
Through Other Comprehensive Income, Tax Effect
Items to be Reclassified to Profit or Loss
Currency Translation Differences
Cash Flow Hedges
Deferred Tax For The Items That Will be
Reclassified to Profit or Loss
Cash Flow Hedges, Tax Effect
OTHER COMPREHENSIVE INCOME
TOTAL COMPREHENSIVE INCOME
Distribution of total comprehensive income
Non-Controlling Interests
Equity Holders of the Parent		 Unaudited
Current
Period
1 January -
30September 2021
773.243
(3.388)
(4.235)
-
847
-
213.098
212.549
615
(66)
209.710
982.953
206.010
776.943		 Unaudited
Current
Period
1 July -
30September 2021
33.204
(310)
(387)
-
77
-
4.929
4.903
34
(8)
4.619
37.823
42.071
(4.248)		 Restated (*)
Unaudited
Previous
Period
1 January -
30September 2020
820.971
146.730
(5.372)
162.016
1.074
(10.988)
189.784
194.637
(6.222)
1.369
336.514
1.157.485
243.834
913.651		 Restated (*)
Unaudited
Previous
Period
1 July -
30September 2020
298.342
(2.101)
(2.632)
-
531
-
139.214
139.563
(448)
99
137.113
435.455
108.947
326.508

(*) Restatement effects have been explained in Note 2.

4

The accompanying notes form an integral part of these consolidated financial statements.

CONVENIENCE TRANSLATION INTO ENGLISH OF CONDENSED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH ÜLKER BİSKÜVİ SANAYİ A.Ş. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY FOR THE INTERIM PERIODS ENDED 30 SEPTEMBER 2021 AND 2020

(Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise stated.)


Share
Capital
Inflation
Adjustments
to Share
Capital
Effect of Business
Combinations
Under Common
Control		 Accumulated Other
Comprehensive Income To
Be Reclassified To Profit
And Loss		 Accumulated Other Comprehensive Income Not To Be Reclassified
To Profit And Loss		 Accumulated Other Comprehensive Income Not To Be Reclassified
To Profit And Loss
As of 1 January 2020
(Previously Reported)
342.000
108.056
(485.419)		 (57.006)
3.695
647.779
(26.435)
422.738
817.879
131.587		 996.503
1.509.952
4.411.329
522.903
4.934.232
Transactions Under
Common Control
-
-
25.000		 -
-
24.216
(2.569)
-
-
-		 168.542
48.307
263.496
-
263.496
As of 1 January 2020
(Restated)
342.000
108.056
(460.419)		 (57.006)
3.695
671.995
(29.004)
422.738
817.879
131.587		 1.165.045
1.558.259
4.674.825
522.903
5.197.728
Transfer
-
-
-
Total Comprehensive
Income
-
-
-		 -
-
-
-
-
(817.879)
-
90.009
(4.853)
-
(4.066)
151.028
-
-		 (1.165.045)
1.982.924
-
-
-
681.533
-
913.651
243.834
1.157.485
As of 30 September 2020
342.000
108.056
(460.419)		 33.003
(1.158)
671.995
(33.070)
573.766
-
131.587		 681.533
3.541.183
5.588.476
766.737
6.355.213

5

The accompanying notes form an integral part of these consolidated financial statements.

CONVENIENCE TRANSLATION INTO ENGLISH OF CONDENSED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH ÜLKER BİSKÜVİ SANAYİ A.Ş. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY FOR THE INTERIM PERIODS ENDED 30 SEPTEMBER 2021 AND 2020

(Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise stated.)

Share
Capital
Inflation
Adjustments
to Share
Capital
Effect of Business
Combinations
Under Common
Control		 Accumulated Other
Comprehensive Income To
Be Reclassified To Profit
And Loss		 Accumulated Other Comprehensive Income Not To Be
Reclassified To Profit And Loss		 Accumulated Other Comprehensive Income Not To Be
Reclassified To Profit And Loss
As of 1 January 2021
(Previously Reported)		 342.000
108.056
(485.419)		 22.444
(1.400)
812.025
(35.463)
459.069
-
131.587		 1.016.415
3.324.334
5.693.648
779.913
6.473.561
Transactions Under
CommonControl		 -
-
25.000		 -
-
38.713
(2.407)
-
-
-		 64.979
216.847
343.132
-
343.132
As of 1 January 2021
(Restated)		 342.000
108.056
(460.419)		 22.444
(1.400)
850.738
(37.870)
459.069
-
131.587		 1.081.394
3.541.181
6.036.780
779.913
6.816.693
Transfer
Total Comprehensive
Income
Transactions Under
Common Control
Dividend Paid(*)		 -
-
-
-
-
-
-
-
(3.736.314)
-
-
-		 -
-
(64.610)
-
-
-
25.950
124.890
549
-
(3.150)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-		 (1.081.394)
1.120.054
-
-
-
654.654
-
776.943
206.010
982.953
-
-
(3.736.314)
-
(3.736.314)
-
(276.600)
(276.600)
(72.691)
(349.291)
As of 30 September 2021 342.000
108.056
(4.196.733)		 147.334
(851)
786.128
(41.020)
459.069
-
157.537		 654.654
4.384.635
2.800.809
913.232
3.714.041

(*) At the Ordinary General Assembly Meeting for the year 2020 held on April 26, 2021; it was decided that a gross amount of TL 276,600,000 from the profit for the period would be distributed and paid in cash, and the dividend had been distributed beginning from May 25, 2021. Food Manufacturers’ Company, one of the Group's subsidiaries, decided to pay a dividend of TL 146,722,501 at the Board Meeting dated January 5, 2021 and paid all in cash as of August 25, 2021. TL 66.025.125 portion of the related amount was accounted under non-controlling interests.

6

The accompanying notes form an integral part of these consolidated financial statements.

CONVENIENCE TRANSLATION INTO ENGLISH OF CONDENSED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH ÜLKER BİSKÜVİ SANAYİ A.Ş. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE PERIODS ENDED 30 SEPTEMBER 2021AND 2020

(Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise stated.)

Notes
CASH FLOWS FROM OPERATING ACTIVITIES
Net profit for the period
Adjustments to Reconcile Net Profit
Adjustment for Depreciation and Amortization Expenses
Depreciation expenses of tangible assets
13
Amortization expenses of intangible assets
15
Adjustment For Impairment Loss (Reversal)
Provision for doubtful receivables
8
Adjustment for Impairment Loss (Reversal) of Other
Financial Investments
Value increase in financial investments
Adjustment for impairment loss of inventories
11
Adjustment for Provisions
Adjustments for Provisions (Cancelled) Related with
Employee Benefits
Provision for employment benefits
Provision for unused vacation
Provision for premium
Adjustments for Provisions (Cancelled) Lawsuits
Adjustments for Other Provisions
Change in other provisions (net)
Adjustments for Dividend Income
Adjustments for Interest Income and Expense
Adjustments for Interest Income
Interest income
Adjustments for Interest Expense
Rediscount interest expense
Interest expense
20
Adjustments for Tax Expenses
21
Adjustments for Losses/(Gains) on Disposals of
Non-Current Assets
Adjustments for gains arised from sale of
tangible assets
Adjustments for Investing and Financing Cash Flow
Change in foreign currency of financial liabilities (net)
Change in foreign currency from investing activities (net)
Commission expenses and financial service income (net)
Other Adjustments to Reconcile Profit/(Loss)
Rent income
Net operating cash flows provided before changes in working capital		 Unaudited
Current Period
1 January -
30September 2021
773.243
164.189
4.300
(1.484)
(124.336)
3.714
69.835
21.977
41.014
3.202
132.760
(45)
(352.973)
-
587.557
270.123
(3.723)
1.849.634
(1.720.309)
29.960
(9.252)
1.739.386		 Restated(*)
Unaudited
Previous Period
1 January -
30September 2020
820.971
143.816
1.997
1.375
(86.201)
6.561
48.416
23.190
40.840
76
147.711
(64)
(157.640)
190
296.014
194.490
(1.277)
2.161.631
(1.938.389)
29.543
(6.598)
1.726.652

(*) Restatement effects have been explained in Note 2.

7

The accompanying notes form an integral part of these consolidated financial statements.

CONVENIENCE TRANSLATION INTO ENGLISH OF CONDENSED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH ÜLKER BİSKÜVİ SANAYİ A.Ş. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE PERIODS ENDED 30 SEPTEMBER 2021AND 2020

(Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise stated.)

Changes in Working Capital
Increase in trade receivables
Increase in trade receivables from related parties
Increase in inventories
(Increase)/ Decrease in other receivables and other current assets
Decrease in trade payables
Increase in trade payables to related parties
Decrease in other payables and liabilities
Net cash generated from operations
Payments Related With Provisions For Employee Benefits
Employment termination benefit paid
Unused vacation paid
Performance premium paid
Lawsuits Provision Paid
Taxes Paid
Collections From Doubtful Trade Receivables
Net cash generated from operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sales of tangible and intangible assets
Proceeds from sales of investment properties
Cash outflows from purchase of tangible assets
Cash outflows from purchase of intangible assets
Changes in non-trade receivables from related parties
Dividends received
Interest received
Other advances given and payables
Repayment of other advances given
Rent income
Cash outflows from purchase of subsidiary
Proceeds from purchase of other businesses or
share of funds or debt instruments
Net cash (used in)/generated from investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Cash inflow from borrowings
Repayments of borrowings
Cash inflow from derivate instruments
Dividend paid
Commission paid
Interest paid
Change in non-trade payables to related parties
Net cash (used in)/generated from financing activities
NET CHANGE IN CASH AND CASH EQUIVALENTS
THE EFFECT OF FOREIGN EXCHANGE RATE
CHANGE ON CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS AT THE
BEGINNING OF THE PERIOD
CASH AND CASH EQUIVALENTS AT THE
END OF THE PERIOD		 Notes
8
12
15
3
5
5		 Unaudited
Current Period
1 January -
30September 2021
(148.411)
(317.060)
(263.792)
(159.525)
(41.605)
45.531
(86.680)
767.844
(41.644)
(16.350)
(53.832)
(1.125)
(346.211)
626
309.308
91.898
26.145
(216.142)
(536)
1.818.442
45
352.973
-
6.448
9.252
(3.736.314)
423.664
(1.224.125)
1.183.493
(937.099)
47.165
(349.291)
(29.960)
(486.687)
437
(571.942)
(1.486.759)
513.848
3.835.520
2.862.609		 Restated(*)
Unaudited
Previous Period
1 January -
30September 2020
(239.197)
(164.333)
(761.881)
145.044
(94.439)
48.333
(29.850)
630.329
(20.721)
(17.247)
(49.865)
(479)
(249.490)
131
292.658
3.559
-
(101.350)
(2.308)
(1.679.474)
64
157.640
(9.721)
-
6.598
-
1.667.334
42.342
3.549.816
(3.357.035)
500.271
-
(29.543)
(205.039)
566
459.036
794.036
698.916
2.045.073
3.538.025

(*) Restatement effects have been explained in Note 2.

8

The accompanying notes form an integral part of these consolidated financial statements.

CONVENIENCE TRANSLATION INTO ENGLISH OF CONDENSED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH ÜLKER BİSKÜVİ SANAYİ A.Ş. AND ITS SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD ENDED 30 SEPTEMBER 2021

(Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise stated.)

1. ORGANIZATION AND OPERATIONS OF THE GROUP

Ülker Bisküvi Sanayi A.Ş. (“the Company”) and its subsidiaries (all together “the Group”), comprises of the parent Ülker Bisküvi Sanayi A.Ş. (“the Company”) and fifteen subsidiaries in which the Company owns the majority share of the capital or which are controlled by the Company (2020: Fifteen).

Ülker Bisküvi Sanayi A.Ş. was established in 1944. The Company’s core business activities are manufacturing of biscuits, chocolate, chocolate coated biscuits, wafers and cakes.

Ülker Bisküvi Sanayi A.Ş. which is registered at the Capital Market Board, merged under its own title with Anadolu Gıda Sanayi A.Ş., whose shares have been quoted on Borsa Istanbul since 30 October 1996, as of 31 December 2003.

The headquarter of Ülker Bisküvi Sanayi A.Ş. is located Kısıklı Mah. Ferah Cad. No:1 Büyük Çamlıca Üsküdar/Istanbul.

As of 30 September 2021, the total number of people employed by the Group is 9.186, which contains 1.552 employees who worked as subcontractors (31 December 2020: 9.591, subcontractor: 1.488).

The main shareholder and controlling party of the Group is pladis Foods Limited. The ultimate parent of the Group is Yıldız Holding A.Ş.. pladis Foods Limited is subsidiary of Yıldız Holding A.Ş. with shares of 100%. Yıldız Holding A.Ş. is managed by Ülker Family.

As of 30 September 2021 and 31 December 2020, the names and percentages of the shareholders holding more than 5% of the Company’s share capital are as follow:

30 September 2021
31		 December 2020
Name of shareholders Share
Percentage
Share		 Percentage
pladis Foods Limited 174.420
51,00%
174.420		 51,00%
Ülker Family Members and Yıldız
Holding A.Ş. 25.580
7,48%
25.580		 7,48%
Other 142.000
41,52%
142.000		 41,52%
342.000
%100,00
342.000		 %100,00

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CONVENIENCE TRANSLATION INTO ENGLISH OF CONDENSED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH ÜLKER BİSKÜVİ SANAYİ A.Ş. AND ITS SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD ENDED 30 SEPTEMBER 2021

(Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise stated.)

1. ORGANIZATION AND OPERATIONS OF THE GROUP (Continued)

As of 30 September 2021 and 31 December 2020, the details of the subsidiaries under consolidation in terms of direct and effective share of ownership and principal business activities are as follows:


Subsidairies		 30 September 2021
31 December 2020
Ratio of
Ratio of
Ratio of
Ratio of
Direct
Effective
Direct
Effective
Nature of
Ownership Ownership Ownership Ownership
Operation
Biskot Bisküvi Gıda Sanayi ve Ticaret A.Ş.
Ülker Çikolata Sanayi A.Ş.
Atlas Gıda Pazarlama Sanayi ve Ticaret A.Ş.
Reform Gıda Paz. San. ve Tic. A.Ş.
UI Egypt B.V.
Hi-Food for Advanced Food Industries
Sabourne Investments Ltd
Food Manufacturers’ Company
Hamle Company Ltd LLP
Ulker Star LLC
UI Mena BV
Amir Global Trading FZE
Ulker for Trading and Marketing
International Biscuits Company
Önem Gıda Sanayi ve Ticaret A.Ş.(*)		 73,9%
73,9%
73,9%
73,9%
Manufacturing
91,7%
91,7%
91,7%
91,7%
Manufacturing

100,0%
100,0%
100,0%
100,0%
Trading
100,0%
100,0%
100,0%
100,0%
Trading
51,0%
51,0%
51,0%
51,0%
Investing
-
51,4%
-
51,4%
Manufacturing/Sales
100,0%
100,0%
100,0%
100,0%
Investing
-
55,0%
-
55,0%
Manufacturing/Sales
100,0%
100,0%
100,0%
100,0%
Manufacturing/Sales
-
99,0%
-
99,0%
Sales
100,0%
100,0%
100,0%
100,0%
Investing
-
100,0%
-
100,0%
Sales
-
99,8%
-
99,8%
Sales
100,0%
100,0%
100,0%
100,0%
Manufacturing/Sales
100,0%
100,0%
100,0%
100,0%
Manufacturing/Sales

(*) The Group purchased 100% shares of Önem Gıda Sanayi ve Ticaret A.Ş. that was 100% owned by Yıldız Holding A.Ş. by the amount of TL 3.736.314 thousands on 27 August 2021.

Approval of Financial Statements:

The Board of Directors has approved the financial statements and given authorization for the issuance on 4 November 2021. The General Assembly has the authority to amend the consolidated financial statements.

2. BASIS OF PRESENTATION OF FINANCIAL STATEMENTS

2.1 Basis of the Presentation:

Principles for Preparation of Financial Statements and Significant Accounting Policies

The accompanying consolidated financial statements are prepared in accordance with Communiqué Serial II, No:14.1, “Principles of Financial Reporting in Capital Markets” (“the Communiqué”) published in the Official Gazette numbered 28676 on 13 June 2013. According to Article 5 of the Communiqué, consolidated financial statements are prepared in accordance with the Turkish Accounting Standards (“TAS”) issued by Public Oversight Accounting and Auditing Standards Authority (“POA”). TAS contains Turkish Accounting Standards, Turkish Financial Reporting Standards (“TFRS”) and its addendum and interpretations. In addition, it has been presented in accordance with the TAS taxonomy published by the POA with the decision number 30 on June 2, 2016 and subsequently announced to the public on 15 April 2019, together with the changes in TFRS-15 Revenue from Contracts with Customers and TFRS-16 Leases standards.

The consolidated financial statements of the Group are prepared as per the CMB announcement of 7 June 2013 relating to financial statements presentations.

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD ENDED 30 SEPTEMBER 2021

(Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise stated.)

2. BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued)

2.1 Basis of the Presentation (Continued)

Principles for Preparation of Financial Statements and Significant Accounting Policies (Continued)

In accordance with the CMB resolution issued on 17 March 2005, listed companies operating in Turkey are not subject to inflation accounting effective from 1 January 2005. Therefore, the consolidated financial statements of the Group have been prepared accordingly.

The Company and Subsidiaries in Turkey maintain their books of accounts and prepare their statutory financial statements in accordance with the Turkish Commercial Code (“TCC”), tax legislation, the Uniform Chart of Accounts issued by the Ministry of Finance and principles issued by CMB. The foreign subsidiaries maintain their books of account in accordance with the laws and regulations in force in the countries in which they are registered. These consolidated financial statements have been prepared under historical cost conventions except for land, buildings, financial assets and financial liabilities which are carried at fair value. The consolidated financial statements are based on the statutory records, which are maintained under historical cost conventions.

In accordance with the TAS, the entities are allowed to prepare a complete or condensed set of interim financial statements in accordance with TAS 34, “Interim Financial Reporting”. In this respect, the Group preferred to present its interim condensed consolidated financial statements. The Group’s interim condensed consolidated financial statement does not include all disclosures and notes that should be included at year-end financial statements. Therefore, the interim condensed consolidated financial statements should be examined together with the 31 December 2020 year-end financial statements.

Functional and Presentation Currency

Financial statements of each subsidiary of the Group are presented in the currency of the primary economic environment in which the entities operate (its functional currency). The results and financial position of each subsidiary are expressed in Turkish Lira, which is the presentation currency of the Group.

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD ENDED 30 SEPTEMBER 2021

(Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise stated.)

2. BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued)

2.2 New and Revised International Financial Reporting Standards

The Group has applied the standards which are relevant to its operations from the standards, amendments and interpretaitions applicable from 1 January 2021.

Standards, amendments and interpretations applicable as at 30 September 2021:

Amendments to TFRS 9, TAS 39, TFRS 7, TFRS 4 and TFRS 16:

In December 2020, the POA issued Interest Rate Benchmark Reform – Phase 2, Amendments to TFRS 9, TAS 39, TFRS 7, TFRS 4 and TFRS 16 to provide temporary reliefs which address the financial reporting effects when an interbank offering rate (IBOR) is replaced with an alternative nearly risk-free rate (RFR), amending the followings. The amendments are effective for periods beginning on or after 1 January 2021. Earlier application is permitted and must be disclosed. The Group is in the process of assessing the impact of the amendments on the consolidated financial position and performance of the Group.

Standards and amendments published as of September 30, 2021 but not yet put into effect:

TFRS 10 and TAS 28: Sale or Contribution of Assets between an Investor and its Associate or Joint Venture - In December 2017, POA postponed the effective date of this amendment indefinitely pending the outcome of its research project on the equity method of accounting. The Group will wait until the final amendment to assess the impacts of the changes.

TFRS 17 - TFRS 17 will become effective for annual reporting periods beginning on or after 1 January 2023. The amendment will not have an impact on the financial position or performance of the Group.

TAS 1- Classification of Liabilities as Current and Non-Current Liabilities - The amendments issued to TAS 1 which are effective for periods beginning on or after 1 January 2023, clarify the criteria for the classification of a liability as either current or non-current. The Group is in the process of assessing the impact of the amendments on the consolidated financial position and performance of the Group.

TFRS 3 Reference to the Conceptual Framework - The amendments issued to TFRS 3 which are effective for periods beginning on or after 1 January 2022 and must be applied prospectively. The Group is in the process of assessing the impact of the amendments on the consolidated financial position and performance of the Group.

TAS 16 – Proceeds before intended use; The amendments issued to TAS 16 which are effective for periods beginning on or after 1 January 2022. The Group is in the process of assessing the impact of the amendments on financial position or performance of the Group.

TAS 37 – Onerous contracts – Costs of Fulfilling a Contract; The amendments issued to TAS 37 which are effective for periods beginning on or after 1 January 2022. The Group is in the process of assessing the impact of the amendments on financial position or performance of the Group.

TFRS 16 - Covid-19-Related Rent Concessions and Covid-19-Related Rent Concessions beyond 30 June 2021- In June 2020, the POA issued amendments to TFRS 16 Leases to provide relief to lessees from applying TFRS 16 guidance on lease modifications to rent concessions arising a direct consequence of the Covid-19 pandemic. In April 7, 2021, POA extended the exemption to include concessions that cause a decrease in lease payments whose maturity expired on or before June 30, 2022.

The Group is in the process of assessing the impact of the standards, amendments and improvements on financial position or performance of the Group.

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD ENDED 30 SEPTEMBER 2021

(Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise stated.)

2. BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued)

2.2 New and Revised International Financial Reporting Standards (Continued)

Standards and amendments published as of September 30, 2021 but not yet put into effect (Continued)

Amendments to IAS 8 - Definition of Accounting Estimates

In February 2021, the Board issued amendments to IAS 8, in which it introduces a new definition of ‘accounting estimates’. The amendments issued to IAS 8 are effective for annual periods beginning on or after 1 January 2023. The amendments clarify the distinction between changes in accounting estimates and changes in accounting policies and the correction of errors.

Amendments to IAS 1 and IFRS Practice Statement 2 - Disclosure of Accounting Policies

In February 2021, the Board issued amendments to IAS 1 and IFRS Practice Statement 2 Making Materiality Judgements, in which it provides guidance and examples to help entities apply materiality judgements to accounting policy disclosures. The amendments issued to IAS 1 are effective for annual periods beginning on or after 1 January 2023.

Amendments to TAS 12 – Deferred Tax related to Assets and Liabilities arising from a Single Transaction

In May 2021, the Board issued amendments to IAS 12, which narrow the scope of the initial recognition exception under IAS 12, so that it no longer applies to transactions that give rise to equal taxable and deductible temporary differences. The amendments issued to IAS 12 are effective for annual periods beginning on or after 1 January 2023. The amendments clarify that where payments that settle a liability are deductible for tax purposes, it is a matter of judgement (having considered the applicable tax law) whether such deductions are attributable for tax purposes to the liability recognised in the financial statements (and interest expense) or to the related asset component (and interest expense). This judgement is important in determining whether any temporary differences exist on initial recognition of the asset and liability.

Annual Improvements – 2018–2020 Cycle

In July 2020, the POA issued Annual Improvements to TFRS Standards 2018–2020 Cycle, amending the followings:

TFRS 1 First-time Adoption of International Financial Reporting Standards – Subsidiary as a first-time adopter: The amendment permits a subsidiary tto measure cumulative translation differences using the amounts reported by the parent. The amendment is also applied to an associate or joint venture.

TFRS 9 Financial Instruments – Fees in the “10 per cent test” for derecognition of financial liabilities: The amendment clarifies the fees that an entity includes when assessing whether the terms of a new or modified financial liability are substantially different from the terms of the original financial liability. These fees include only those paid or received between the borrower and the lender, including fees paid or received by either borrower or lender on the other’s behalf.

TAS 41 Agriculture – Taxation in fair value measurements: The amendment removes the requirement in paragraph 22 of TAS 41 that entities exclude cash flows for taxation when measuring fair value of assets within the scope of TAS 41.

Improvements are effective for annual reporting periods beginning on or after 1 January 2022. Earlier application is permitted for all.

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD ENDED 30 SEPTEMBER 2021

(Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise stated.)

2. BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued)

2.3 Significant Changes Regarding Current Period

The necessary actions were taken by the Group management to minimize the possible effects of COVID-19, which affects the whole world, on the operations and financial position of the Group. Meanwhile, actions were taken by the Group to minimize the increase in investment expenditures, operational expenses and inventories, and the cash management strategy is reviewed to strengthen the liquidity position. No significant impact has been observed on the financial position or the performance of the Group due to the Covid 19 Pandemic.

While the Group preparing the consolidated financial statements dated 30 September 2021, the Group evaluated the possible effects of the COVID-19 pandemic on the consolidated financial statements and reviewed the estimates and assumptions used in the preparation of the consolidated financial statements. In this context, possible impairments in the financial assets, inventories, tangible assets, goodwill and brands in the consolidated financial statements of 30 September 2020 is analysed and the necessary changes is reflected in the consolidated financial statements.

2.4 Changes in the Accounting Policies:

Comparative Information and Restatement of Prior Period Consolidated Financial Statements:

Accounting policy changes are applied retrospectively and the previous year financial statements are rearranged.

In order to allow the determination of financial position and performance, the Group's condensed consolidated financial statements are prepared in comparison with the previous period. In order to comply with the presentation of condensed consolidated financial statements the current period when deemed necessary, comparative information is reclassified, and material differences are presented. The Group has made some reclassifications in order to conform to current period financial statements for prior periods.

As per the principle related to “Accounting for business combinations under common control” the Public Oversight Accounting and Auditing Standards Authority issued in the Official Gazette dated 21 July 2013, business combinations under common control shall be accounted through restating previous periods’ financial statements via the pooling of interest method. In this case, with the acquisition of Önem Gıda Sanayi ve Ticaret A.Ş. (Note:3) the Group restated its consolidated balance sheets as at 31 December 2019 and 2020 and restated the consolidated income statement, consolidated other comprehensive income statement, consolidated statement of changes in shareholders’equity and cash flows for the period then ended at 30 September 2020.

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD ENDED 30 SEPTEMBER 2021

  • (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise stated.)

2. BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued)

2.4 Changes in the Accounting Policies (Continued):

Comparative Information and Restatement of Prior Period Consolidated Financial Statements (Continued):

Effect of the restatements are shown below.

ASSETS
Current Assets
Cash and Cash Equivalents
Financial Investments
Trade Receivables
Other Receivables
Derivative Instruments
Inventories		 Effects of
Reported
Restatement
Restated
Previous Period
with
Previous Period
31 December 2020
Eliminations
31 December 2020
13.262.885
1.438.234
14.701.119
3.824.320
11.200
3.835.520
3.639.474
-
3.639.474
2.879.687
212.313
3.092.000
1.755.896
458.840
2.214.736
-
37.340
37.340
871.480
824.378
1.695.858
Prepaid Expenses 197.681
(109.921)
87.760

Current Income Tax Assets		 8.356
-
8.356
Other Current Assets 85.991
4.084
90.075
Non-Current Assets
Financial Investments
Other Receivables
Investment Properties
Tangible Assets
Intangible Assets
Prepaid Expenses
Deferred Tax Assets
TOTAL ASSETS		 4.629.619
160.936
4.790.555
978.106
-
978.106
369
-
369
26.145
-
26.145
2.687.913
158.913
2.846.826
859.404
574
859.978
48.439
225
48.664
29.243
1.224
30.467
17.892.504
1.599.170
19.491.674

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD ENDED 30 SEPTEMBER 2021

(Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise stated.)

2. BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued)

2.4 Changes in the Accounting Policies (Continued):

Comparative Information and Restatement of Prior Period Consolidated Financial Statements (Continued):

Effects of
Reported Restatement Restated
Previous Period with Previous Period
LIABILITIES 31 December 2020 Eliminations 31 December 2020
Current Liabilities 2.453.876 776.809 3.230.685
Short Term Financial Liabilities 11.408 276.545 287.953
Short Term Portion of Long Term Financial Liabilities 768.723 366.274 1.134.997
Trade Payables 1.202.259 73.151 1.275.410
Employee Benefit Related Liabilities 49.874 5.154 55.028
Other Payables 3.752 1.779 5.531
Derivative Instruments 1.892 - 1.892
Deferred Revenue 40.556 36.828 77.384
Current Income Tax Liabilities 84.647 1.241 85.888
Short Term Provisions 243.948 13.400 257.348
Other Current Liabilities 46.817 2.437 49.254
Non-Current Liabilities 8.965.067 479.229 9.444.296
Long Term Financial Liabilities 8.607.951 450.395 9.058.346
Long Term Provisions 211.021 17.084 228.105
Deferred Tax Liabilities 146.095 11.750 157.845
Shareholders’ Equity 6.473.561 343.132 6.816.693
Equity Attributable To Equity
Holders’ of the Parent 5.693.648 343.132 6.036.780
Share Capital 342.000 - 342.000
Inflation Adjustments to Share Capital 108.056 - 108.056
Effect of Business Combinations Under
Common Control (485.419) 25.000 (460.419)
Other Comprehensive Income/Expense not
to be Reclassified to Profit and Loss
- Increases on Revaluation of Tangible Asset 812.025 38.713 850.738
- Actuarial Loss on Post Employment
Termination Benefit Obligation (35.463) (2.407) (37.870)
- Gains from Financial Assets Measured at Fair
Value through Other Comprehensive Income 459.069 - 459.069
Other Comprehensive Income/Expense
to be Reclassified to Profit and Loss
- Currency Translation Adjustments 22.444 - 22.444
- Cash Flow Hedges (1.400) - (1.400)
Restricted Reserves 131.587 - 131.587
Retained Earnings 3.324.334 216.847 3.541.181
Net Profit for the Period 1.016.415 64.979 1.081.394
Non-Controlling Interest 779.913 - 779.913
TOTAL LIABILITIES AND EQUITY 17.892.504 1.599.170 19.491.674

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD ENDED 30 SEPTEMBER 2021

(Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise stated.)

2. BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued)

2.4 Changes in the Accounting Policies (Continued):

Comparative Information and Restatement of Prior Period Consolidated Financial Statements (Continued):

ASSETS
Current Assets
Cash and Cash Equivalents
Financial Investments
Trade Receivables
Other Receivables
Derivative Instruments
Inventories		 Effects of
Reported
Restatement
Restated
Previous Period
with
Previous Period
31 December 2019
Eliminations
31 December 2019
8.720.108
731.244
9.451.352
2.027.599
17.474
2.045.073
3.057.459
-
3.057.459
2.365.802
74.030
2.439.832
152.902
287.148
440.050
358.919
5.372
364.291
592.698
317.254
909.952
Prepaid Expenses 84.491
29.489
113.980

Current Income Tax Assets		 4.583
-
4.583
Other Current Assets 75.655
477
76.132
Non-Current Assets
Financial Investments
Other Receivables
Investment Properties
Tangible Assets
Intangible Assets
Prepaid Expenses
Deferred Tax Assets
TOTAL ASSETS
4.071.644
134.473
4.206.117
946.029
-
946.029
460
-
460
21.155
-
21.155
2.383.177
131.787
2.514.964
680.235
313
680.548
7.602
48
7.650
32.986
2.325
35.311
12.791.752
865.717
13.657.469

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD ENDED 30 SEPTEMBER 2021

(Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise stated.)

2. BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued)

2.4 Changes in the Accounting Policies (Continued):

Comparative Information and Restatement of Prior Period Consolidated Financial Statements (Continued)

Effects of
Reported Restatement Restated
Previous Period with Previous Period
LIABITILITIES 31 December 2019 Eliminations 31 December 2019
Current Liabilities 6.800.011 322.612 7.122.623
Short Term Financial Liabilities 150.764 197.948 348.712
Short Term Portion of Long Term Financial Liabilities 5.088.239 336.741 5.424.980
Trade Payables 1.224.598 (239.568) 985.030
Employee Benefit Related Liabilities 44.822 4.749 49.571
Other Payables 5.107 294 5.401
Deferred Revenue 11.854 3.653 15.507
Current Income Tax Liabilities 68.967 2.331 71.298
Short Term Provisions 169.697 13.457 183.154
Other Current Liabilities 35.963 3.007 38.970
Non-Current Liabilities 1.057.509 279.609 1.337.118
Long Term Financial Liabilities 701.318 266.024 967.342
Long Term Provisions 161.010 13.585 174.595
Deferred Tax Liabilities 195.181 - 195.181
Shareholders’ Equity 4.934.232 263.496 5.197.728
Equity Attributable To Equity
Holders’ of the Parent 4.411.329 263.496 4.674.825
Share Capital 342.000 - 342.000
Inflation Adjustments to Share Capital 108.056 - 108.056
Effect of Business Combinations Under
Common Control (485.419) 25.000 (460.419)
Other Comprehensive Income/Expense not
to be Reclassified to Profit and Loss
- Increases on Revaluation of Tangible Asset 647.779 24.216 671.995
- Actuarial Loss on Post Employment
Termination Benefit Obligation (26.435) (2.569) (29.004)
- Gains from Financial Assets Measured at Fair
Value through Other Comprehensive Income 422.738 - 422.738
- Other Gains 817.879 - 817.879
Other Comprehensive Income/Expense
to be Reclassified to Profit and Loss
- Currency Translation Adjustments (57.006) - (57.006)
- Cash Flow Hedges 3.695 - 3.695
Restricted Reserves 131.587 - 131.587
Retained Earnings 1.509.952 48.307 1.558.259
Net Profit for the Period 996.503 168.542 1.165.045
Non-Controlling Interest 522.903 - 522.903
TOTAL LIABILITIES AND EQUITY 12.791.752 865.717 13.657.469

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CONVENIENCE TRANSLATION INTO ENGLISH OF CONDENSED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH ÜLKER BİSKÜVİ SANAYİ A.Ş. AND ITS SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD ENDED 30 SEPTEMBER 2021

(Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise stated.)

2. BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued)

2.4 Changes in the Accounting Policies (Continued):

Comparative Information and Restatement of Prior Period Consolidated Financial Statements (Continued)

Revenue
Cost of Sales
GROSS PROFIT
General Administrative Expenses
Marketing, Sales and Distribution Expenses
Research and Development Expenses
Other Operating Income
Other Operating Expenses
OPERATING PROFIT
Income from Investment Activities
Expenses from Investment Activities
OPERATING PROFIT BEFORE
FINANCIAL INCOME AND EXPENSES
Financial Income
Financial Expenses
PROFIT BEFORE TAX
Tax Expense
Corporate Tax Expense
Deferred Tax Income
PROFIT FOR THE PERIOD		 Reported
Effects of
Restated
Previous Period
Restatement
Previous Period
1 January -
30 September 2020
with
Eliminations
1 January -
30 September 2020
6.749.566
227.046
6.976.612
(4.824.006)
(40.274)
(4.864.280)
1.925.560
186.772
2.112.332
(194.105)
(1.772)
(195.877)
(669.781)
(1.274)
(671.055)
(16.753)
51
(16.702)
171.986
74.985
246.971
(88.783)
(74.406)
(163.189)
1.128.124
184.356
1.312.480
2.250.165
56.560
2.306.725
(114.608)
(1.948)
(116.556)
3.263.681
238.968
3.502.649
227.277
23.615
250.892
(2.413.472)
(324.608)
(2.738.080)
1.077.486
(62.025)
1.015.461
(208.673)
14.183
(194.490)
(299.353)
-
(299.353)
90.680
14.183
104.863
868.813
(47.842)
820.971

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CONVENIENCE TRANSLATION INTO ENGLISH OF CONDENSED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH ÜLKER BİSKÜVİ SANAYİ A.Ş. AND ITS SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD ENDED 30 SEPTEMBER 2021

(Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise stated.)

2. BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued)

2.4 Changes in the Accounting Policies (Continued):

Comparative Information and Restatement of Prior Period Consolidated Financial Statements (Continued)

PROFIT FOR THE PERIOD
Other Comprehensive Income Not to be Reclassified To Profit or Loss
Actuarial Loss on Post-Employment Termination Benefit Obligation
Gains from Financial Assets Measured at Fair Value Through Other Comprehensive Income
Deferred Tax for the Items That Will not be Reclassified in Profit or Loss
Actuarial Gain on Post-Employment Termination Benefit Obligation, Tax Effect
Gains from Financial Assets Measured at Fair Value Through Other Comprehensive Income Tax Effect
Items to be Reclassified to Profit or Loss
Currency Translation Differences
Cash Flow Hedges
Deferred Tax For The Items That Will be Reclassified to Profit or Loss
Cash Flow Hedges, Tax Effect
OTHER COMPREHENSIVE INCOME
TOTAL COMPREHENSIVE INCOME
Distribution of total comprehensive income
Non-Controlling Interests
Equity Holders of the Parent		 Reported
Effects of
Restated
Previous Period
Restatement
Previous Period
1 January -
30 September 2020
with
Eliminations
1 January -
30 September 2020
868.813
(47.842)
820.971
146.547
183
146.730
(5.601)
229
(5.372)
162.016
-
162.016
1.120
(46)
1.074
(10.988)
-
(10.988)
189.784
-
189.784
194.637
-
194.637
(6.222)
-
(6.222)
1.369
-
1.369
336.331
183
336.514
1.205.144
(47.659)
1.157.485
1.205.144
(47.659)
1.157.485
243.834
-
243.834
961.310
(47.659)
913.651

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CONVENIENCE TRANSLATION INTO ENGLISH OF CONDENSED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH ÜLKER BİSKÜVİ SANAYİ A.Ş. AND ITS SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD ENDED 30 SEPTEMBER 2021

(Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise stated.)

3. BUSINESS COMBINATIONS

The Group purchased 100% shares of Önem Gıda Sanayi ve Ticaret A.Ş. that was 100% owned by Yıldız Holding A.Ş. by the amount of TL 3.736.314 thousands on 27 August 2021. The transaction is considered as “Transactions Under Common Control” and accounted in the shareholder’s equity. The net asset acquired and the effects of transaction in equity are presented as follows:

Net Assets within theScope ofConsolidation
Current Assets
Cash and cash equivalents
Trade receivables
Other receivables
Inventories
Other current assets
Non-Current Assets
Other receivables
Tangible and intangible assets (Net)
Other non-current assets
Current Liabilities
Financial liabilities
Trade payables
Other current liabilities
Non-Current Liabilities
Financial liabilities
Other non-current liabilities
Net Assets Added into the Scope of Consolidation
Total share of the Group ownership
The portion of the net assets to the Group
Non-Capital equity items
Cash paid for the acquisition
Net Equity Impact from the Acquisition of Subsidiary		 31 July 2021
Asset/(Liability)
191.971
403.636
484.002
1.053.242
117.208
516
173.553
1.813
(1.393.178)
(145.312)
(105.853)
(401.056)
(21.142)
359.400
100%
359.400
334.400
(3.736.314)
(3.711.314)

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CONVENIENCE TRANSLATION INTO ENGLISH OF CONDENSED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH ÜLKER BİSKÜVİ SANAYİ A.Ş. AND ITS SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD ENDED 30 SEPTEMBER 2021

(Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise stated.)

4. SEGMENTAL INFORMATION

The Group’s core business activities are manufacturing and marketing of biscuit, chocolate coated biscuit, wafer, cake and chocolate. The reports reviewed routinely by the decision makers of the Group comprise consolidated financial information of Ülker Bisküvi Sanayi A.Ş. and its subsidiaries. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the board of directors that makes strategic decisions. The Group management has determined the operating segments based on the reports reviewed by the board of directors that are used to make strategic decisions. The board of directors review segmental analysis on gross profit and operational profit.

The Group follows its operations with domestic (local operations of Turkish companies in Turkey) and international basis in accordance with TFRS 8. The information for 1 January – 30 September 2021 and 1 January – 30 September 2020 as follows:

Revenue
Gross Profit
Operating Profit ()
EBITDA ()
EBITDA/Revenue
Investment Expenses
Revenue
Gross Profit
Operating Profit ()
EBITDA (**)
EBITDA/Revenue
Investment Expenses		 Domestic
5.148.731
1.229.828
777.977
855.013
16,6%
168.066
Domestic
4.179.196
1.065.832
692.702
762.507
18,2%
72.951		 Foreign
3.270.226
1.148.052
549.285
640.738
19,6%
35.226
Foreign
2.797.416
1.046.500
535.996
612.004
21,9%
20.811		 1 January -
30September 2021
8.418.957
2.377.880
1.327.262
1.495.751
17,8%
203.292
1 January -
30September 2020
6.976.612
2.112.332
1.228.698
1.374.511
19,7%
93.762

(*) Operating profit before other income/expense.

(**) EBITDA (Earnings before interest, tax, depreciation and amortization) is calculated by adding back the non-cash expenses of depreciation and amortization to a Group's operating income. EBITDA is not a measure of performance identified in TFRS, thus it may not be a tool for comparison for firms.

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CONVENIENCE TRANSLATION INTO ENGLISH OF CONDENSED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH ÜLKER BİSKÜVİ SANAYİ A.Ş. AND ITS SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD ENDED 30 SEPTEMBER 2021

(Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise stated.)

5. CASH AND CASH EQUIVALENTS

Cash on hand
Demand deposits
Time deposits
Impairment provision
Details of time deposits are shown below:		 30September 2021
1.338
1.002.217
1.876.563
(17.509)
2.862.609		 31 December 2020
438
668.739
3.183.073
(16.730)
3.835.520		 31 December 2019
180
345.501
1.706.413
(7.021)
2.045.073
Currency Type
Annual Weighted Average
Effective Interest Rate(%)		 Currency Type
Annual Weighted Average
Effective Interest Rate(%)		 Maturity 30September 2021
348.733
370.187
1.094.334
38.497
18.847
1.876.563
31 December 2020
402.295
572.512
2.130.646
53.377
24.243
3.183.073
31 December 2019
TL
18,35%
EUR
0,36%
USD
1,04%
EGP
7,50%
KZT
10,00%
Currency Type
Annual Weighted Average
Effective Interest Rate(%)		 October 2021
October 2021
October 2021
October 2021
October 2021
Maturity
TL
17,47%
EUR
2,23%
USD
1,07%
EGP
8,64%
KZT
10,00%
Currency Type
Annual Weighted Average
Effective Interest Rate(%)		 January 2021
January 2021
January 2021
January 2021
January 2021
Maturity
TL
EUR
USD
GBP
EGP
KZT
6. FINANCIAL INVESTMENTS
Short Term Financial Investments:
Financial Assets Measured at Fair Value
through Profit or Loss (*)		 11,08%
0,05%
2,69%
0,15%
11,01%
10,00%
30September 2021
4.277.960
4.277.960		 January 2020
January 2020
January 2020
January 2020
January 2020
January 2020
31 December 2020		 224.765
31.520
1.399.347
5.217
21.925
23.640
1.706.413
31 December 2019
3.639.474 3.057.459
3.639.474 3.057.459

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CONVENIENCE TRANSLATION INTO ENGLISH OF CONDENSED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH ÜLKER BİSKÜVİ SANAYİ A.Ş. AND ITS SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD ENDED 30 SEPTEMBER 2021

(Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise stated.)

6. FINANCIAL INVESTMENTS (Continued)

Long Term Financial Investments:
30September 2021
31 December 2020
31
Financial Assets Measured at Fair Value
through Profit or Loss ()
978.106
978.106
978.106
978.106
Long Term Financial Assets Measured at
Fair Value through Other Comprehensive Income
30 September
2021
31 December
2020
G New, Inc
273.122
273.122
Godiva Belgium BVBA
704.784
704.784
Other
200
200
978.106
978.106**		 31 December 2019
946.029
946.029
31 December
2019
312.171
633.658
200
946.029

(*) TL 4.264.769 thousands of short-term financial investments consist of liquid mutual funds with a maturity of less than 3 months (31 December 2020: TL 3.585.984 thousands)

(**) Equity investments that the Group does not have a significant influence are classified as financial assets measured at fair value through other comprehensive income as at 30 September 2021 amounting to TL 459.069 thousand have been presented under shareholder’s equity.

7. FINANCIAL LIABILITIES

Short term liabilities
Short term portion of long-term liabilities
Long term liabilities
Short Term Liabilities :
Bank loans
Other Short Term Liabilities:
Letters of credit
Short Term Portion of Long-Term Liabilities
Bank loans
Issued debt instruments (*)
Financial lease liabilities		 30September 2021
723.568
1.452.933
10.558.359
12.734.860
30 September 2021
33.250
33.250
30September 2021
690.318
690.318
30September 2021
1.037.494
392.536
22.903
1.452.933		 31 December 2020
287.953
1.134.997
9.058.346
10.481.296
31 December 2020
11.408
11.408
31 December 2020
276.545
276.545
31 December 2020
797.418
318.467
19.112
1.134.997		 31 December 2019
348.712
5.424.980
967.342
6.741.034
31 December 2019
66.436
66.436
31 December 2019
282.276
282.276
31 December 2019
5.411.155
-
13.825
5.424.980

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CONVENIENCE TRANSLATION INTO ENGLISH OF CONDENSED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH ÜLKER BİSKÜVİ SANAYİ A.Ş. AND ITS SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD ENDED 30 SEPTEMBER 2021

(Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise stated.)

7. FINANCIAL LIABILITIES (Continued)

30September 2021
5.019.260
5.525.557
13.542
10.558.359		 31 December 2020
4.547.705
4.479.922
30.719
9.058.346		 31 December 2019
918.514
-
48.828
967.342

The group has used a syndication loan in 20 April 2020. Details of Group’s syndication loans are as follows: Syndication loan consists of two credit tranches which are USD 110.000.000 and EUR 243.938.528. 7 international banks joined to the syndication. Effective interest rate for both credit tranches are Euribor + 2.95% for EUR, Libor + 3.10% for USD and the maturity date is 20 April 2023. In addition to the syndicated loan, the Group has received a EUR 75.000.000 EBRD loan dated 20 April 2020. The interest rate of the related EBRD loan is Euribor + 2.95% and the maturity date is 20 April 2023. The principal repayments of loan tranches must pay interest every six months, at the end of maturity.

(*) The Group has issued USD 650.000.000 bond on the Irish Stock Exchange (Euronext Dublin) on October 30, 2020, with a 5-year maturity, coupon payment every 6 months, principal and coupon payments at the end of the maturity, with an annual fixed interest rate of 6.95%.

The covenants which belong to syndicated loan are as follows:

a) Leverage: The ratio of the consolidated net debt at balance sheet date to the last twelve months consolidated EBITDA (Earnings before interest, tax, depreciation and amortization) in the valid period should not be over 3,50 to 1.

b) Interest Coverage: Consolidated interest coverage ratio of the Group should be at least 2 to 1.

In the current period ended September 30, 2021; the consolidated financial statements of the Group comply with the covenants of the syndication loan agreement.

Liabilities:

30 September 2021

Currency Type
Maturity
TL
October 2021-April 2023
USD
October 2021-October 2025
EUR
October 2021-May 2023
EGP
October 2021-September 2023
KZT
October 2021-January 2026
31 December 2020		 Maturity Effective
Weighted Average
Interest Rate (%)
27,30%
6,43%
3,16%
8,00%
11,92%		 Short
Term
22.903
425.161
1.578.934
34.596
114.907
2.176.501		 Long
term
13.542
6.476.403
3.837.768
9.423
221.223

27,30%
6,43%
3,16%
8,00%
11,92%
10.558.359
Currency Type
Maturity
TL
January 2021-April 2023
USD
April 2021-October 2025
EUR
April 2021-May 2023
EGP
January 2021-September 2023
KZT
January 2021-January 2026		 Maturity Effective
Weighted Average
Interest Rate (%)
27,30%
6,40%
3,17%
8,00%
11,59%		 Short
Term
19.112
345.280
960.782
11.408
86.368
1.422.950		 Long
term
30.729
5.254.470
3.529.264
7.827
236.056

27,30%
6,40%
3,17%
8,00%
11,59%
9.058.346

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD ENDED 30 SEPTEMBER 2021

(Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise stated.)

7. FINANCIAL LIABILITIES (Continued)

Liabilities (Continued)

31 December 2019

Currency Type
Maturity
TL
January 2020-April 2023
USD
January 2020-November 2020
EUR
February 2020-May 2023
KZT
January 2020-January 2026
SAR
January 2020-July 2020		 Maturity Effective
Weighted Average
Interest Rate (%)
18,72%
4,92%
3,15%
10,00%
4,00%		 Effective
Weighted Average
Interest Rate (%)
18,72%
4,92%
3,15%
10,00%
4,00%		 Short
Term
13.825
1.539.388
4.204.392
6.379
9.708
5.773.692		 Long
term
48.828
-
645.491
273.023
-

18,72%
4,92%
3,15%
10,00%
4,00%
967.342

Repayment terms of bank loans and issued debt are as follows:

30 September
2021
to be paid within 1 year
1.463.280
to be paid within 1-2 years
5.138.031
to be paid within 2-3 years
444.739
to be paid within 3-4 years
386.787
to be paid within 4-5 years
4.575.260
Above 5 years
-
12.008.097
Short Term Portion of Long Term
Financial Lease Liabilities
30 September
2021
Financial lease liabilities
30.013
Future finance charges on leasing (-)
(7.110)
22.903
Long Term Financial Lease Liabilities
30 September
2021
Financial lease liabilities
14.651
Future finance charges on leasing (-)
(1.109)
13.542
The maturity detail of the financial lease liabilities is as follows:
30 September
2021
to be paid within 1 year
22.903
to be paid within 1-2 years
13.542
to be paid within 2-3 years
-
to be paid within 3-4 years
-
36.445		 31 December
2020
1.127.293
1.153.881
3.866.831
309.008
3.688.853
9.054
10.154.920
31 December
2020
30.285
(11.173)
19.112
31 December
2020
36.613
(5.894)
30.719
31 December
2020
19.112
26.567
4.152
-
**49.831 **		 31 December
2019
5.477.591
539.109
215.508
98.892
52.004
13.001
6.396.105
31 December
2019
29.282
(15.457)
13.825
31 December
2019
65.895
(17.067)
48.828
31 December
2019
13.825
18.108
23.720
7.000
62.653

The maturity detail of the financial lease liabilities is as follows :

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CONVENIENCE TRANSLATION INTO ENGLISH OF CONDENSED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH ÜLKER BİSKÜVİ SANAYİ A.Ş. AND ITS SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD ENDED 30 SEPTEMBER 2021

(Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise stated.)

8. TRADE RECEIVABLES AND PAYABLES

Short Term Due from Related Parties
Due from related parties (Note 23)
Other Trade Receivables
Trade receivables
Notes receivables
Provision for doubtful receivables
Total Short-Term Trade Receivables		 30 September
2021
2.357.206
2.357.206
1.296.542
296
(11.931)
1.284.907
3.642.113		 31 December
2020
2.040.146
2.040.146
1.063.964
231
(12.341)
1.051.854
3.092.000		 31 December
2019
2.160.033
2.160.033
290.454
249
(10.904)
279.799
2.439.832

The movement of the allowance for doubtful receivables as of 30 September 2021 and 2020 is as follows:

Opening balance
Current period charge
Cancelled provision
Currency translation differences
Collections
Ending Balance
Short Term Trade Payables
Due to related parties (Note 23)
Trade payables
. OTHER RECEIVABLES AND PAYABLES
Other Receivables
Due from related parties (Note 23)
Short term other receivables
Other Short-Term Receivables
Deposits and guarantees given
VAT receivables
Receivables from personnel
Other		 30 September
2021
321.535
1.049.637
1.371.172
30 September
2021
564.981
44.171
609.152
30 September
2021		 1 January -
30 September
2021
(12.341)
(606)
2.090
(1.700)
626
(11.931)
31 December
2020
276.004
999.406
1.275.410
31 December
2020
2.163.423
51.313
2.214.736
31 December
2020		 1 January -
30 September
2020
(10.904)
(1.400)
25
(3.566)
131
(15.714)
31 December
2019
240.165
744.865
985.030
31 December
2019
401.969
38.081
440.050
31 December
2019
23.300
11.937
1.962
6.972		 23.686
23.567
1.328
2.732		 18.929
16.995
1.568
589
44.171 51.313 38.081

9. OTHER RECEIVABLES AND PAYABLES

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD ENDED 30 SEPTEMBER 2021

(Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise stated.)

9. OTHER RECEIVABLES AND PAYABLES (Continued)

Other Long-Term Receivables
Deposits and guarantees given
Other Payables
Due to related parties (Note 23)
Other short-term payables
Other Short-Term Payables
Deposits and guarantees received
Other short-term payables		 30 September
2021
-
-
30 September
2021
557
7.873
8.430
30 September
2021
172
7.701
7.873		 31 December
2020
369
369
31 December
2020
120
5.411
5.531
31 December
2020
122
5.289
5.411		 31 December
2019
460
460
31 December
2019
104
5.297
5.401
31 December
2019
123
5.174
**5.297 **

10. DERIVATIVE INSTRUMENTS

In April 20, 2020, the group carried out Fixed Interest Rate Swaps consisting of a total of us USD 33,000,000 in order to protect against interest rate risk in parallel with the payment plan of a USD 110,000,000 tranche of a 3-year term and variable interest syndicated loan that it used. In addition to that, in 3 April 2018 and 21 May 2019 the Group received a loan amounting to EUR 40,000,000 and EUR 50,000,000 with 2-year term and variable interest. The Group entered into a cross currency fixed interest rate swap contracts amounting to TL 94,150,000 and TL 218,750,000 to manage its exposure to interest rate and foreign currency fluctuations, and the swap contracts was ended in April 2020 and May 2021. Moreover, As date of 20 April 2017, the Group received syndication loans which are USD 136.000.000 and EUR 225.144.922 respectively. Principal payments of the loans are repaid at maturity with semi-annual interest payments in parallel with repayment schedule, the Group entered into a cross currency fixed interest rate swap contracts amounting to USD 116.000.000 and EUR 30.000.000, respectively to manage its exposure to interest rate and foreign currency fluctuations.The Group entered into fixed interest rate swap contracts amounting to USD 33.000.000 in order to hedge the interest rate risk in line with the repayment schedule of the USD 110,000,000 tranches of 3-year term and floating rate syndication loan received as of 20 April 2020.

Derivative instruments as of 30 September 2021, 31 December 2020 and 2019 are as follows:

30 September 2021 30 September 2021 31 December 2020 31 December 2020 31 December 2019 31 December 2019
Contract Contract Contract
Amount Fair Value Amount Fair Value Amount Fair Value
Riskten korunma amaçlı
Cross Currency Fixed Interest
Rate Swap - - 94.150 37.340 746.882 364.291
Fixed Interest Rate Swap 292.991 (1.566) 242.237 (1.892) - -
Total Asset/(Liabilities) 292.991 (1.566) 336.387 35.448 746.882 364.291

28

CONVENIENCE TRANSLATION INTO ENGLISH OF CONDENSED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH ÜLKER BİSKÜVİ SANAYİ A.Ş. AND ITS SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD ENDED 30 SEPTEMBER 2021

(Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise stated.)

11. INVENTORIES

Details of inventory are as follows:

Raw materials
Work in progress
Finished goods
Trade goods
Other inventories
Allowance for impairment on inventory (-)		 30 September
2021
1.429.046
73.956
436.094
32.646
87.214
(30.254)
2.028.702		 31 December
2020
1.141.999
41.442
438.107
32.905
71.215
(29.810)
1.695.858		 31 December
2019
465.998
37.767
297.591
31.160
95.465
(18.029)
909.952

Inventories are presented on the cost values and provision has been made for the impaired inventories.

The movement of allowance for impairment on inventory for the periods ended on 30 September 2021 and 2020 are below;

Opening balance
Charge for the period
Reversal of provision
Currency translation differences
Closing balance		 1 January -
30September 2021
(29.810)
(3.714)
6.484
(3.214)
(30.254)		 1 January -
30September 2020
(18.029)
(6.561)
827
(2.170)
(25.933)

12. INVESTMENT PROPERTIES

Opening balance
Disposal
Closing balance		 1 January -
30September 2021
26.145
(26.145)
-		 1 January -
30September 2020
21.155
-
21.155

The rent income earned by the Group from its investment properties amounts to TL 246 thousand (30 September 2020: TL 1.080 thousand) as of 30 September 2021. Direct operating expenses arising from the investment properties in the current period amounting to TL 20 thousand (30 September 2020: TL 89 thousand ).

29

CONVENIENCE TRANSLATION INTO ENGLISH OF CONDENSED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH ÜLKER BİSKÜVİ SANAYİ A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD ENDED 30 SEPTEMBER 2021

(Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise stated.)

13. TANGIBLE ASSETS

Movement of tangible assets between 1 January 2021 and 30 September 2021 is as follows:

Cost
Land
Buildings
Machinery, plant and equipment
Vehicles
Furniture and fixture
Leasehold improvements
Other tangible assets
Construction in progress
Accumulated Depreciation
Buildings
Machinery, plant and equipment
Vehicles
Furniture and fixture
Leasehold improvements
Other tangible assets
Net Book Value		 1 January
2021
Additions
Disposal
Transfer
Currency
Translation
Differences		 30 September
2021
857.540
-
(49.750)
-
7.319
1.227.958
3.544
(42.848)
4.126
55.830
2.668.920
21.903
(21.908)
37.383
207.162
13.622
92
(1.190)
-
1.543
145.823
5.719
(3.947)
5.179
12.894
54.170
609
(2.621)
56
46
32
-
-
-
-
67.043
170.889
(709)
(46.744)
9.043		 815.109
1.248.610
2.913.460
14.067
165.668
52.260
32
199.522
5.035.108
202.756
(122.973)
-
**293.837 **		 5.408.728
1 January
2021
Charge for
theperiod
Disposal
Transfer
Currency
Translation
Differences		 30 September
2021
(635.450)
(23.132)
16.563
(774)
(24.487)
(1.405.321)
(125.783)
11.880
774
(112.774)
(10.593)
(1.218)
901
-
(1.351)
(101.209)
(10.303)
3.000
-
(8.708)
(35.681)
(3.749)
2.454
-
(39)
(28)
(4)
-
-
-		 (667.280)
(1.631.224)
(12.261)
(117.220)
(37.015)
(32)
(2.188.282)
(164.189)
34.798
-
(147.359)		 (2.465.032)
2.846.826
2.943.696

From depreciation and amortization expenses, TL 158.868 thousand (30 September 2020: TL 137.392 thousand) is included in cost of goods sold, TL 351 thousand (30 September 2020: TL 267 thousand) is included in research and development expenses, TL 4.128 thousand (30 September 2020: TL 3.621 thousand) is included in marketing and selling expenses, TL 5.142 thousand (30 September 2020: TL 4.533 thousand) is included in general and administrative expenses. In the nine-month period ending as of 30 September 2021, there is no fixed asset acquired through financial leasing by the Group. There is not any mortgage or collateral on tangible assets as of 30 September 2021.

30

CONVENIENCE TRANSLATION INTO ENGLISH OF CONDENSED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH ÜLKER BİSKÜVİ SANAYİ A.Ş. AND ITS SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD ENDED 30 SEPTEMBER 2021

(Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise stated.)

13. TANGIBLE ASSETS (Continued)

Movement of tangible assets between 1 January 2020 and 30 September 2020 is as follows:

Cost
Land
Buildings
Machinery, plant and equipment
Vehicles
Furniture and fixture
Leasehold improvements
Other tangible assets
Construction in progress
Accumulated Depreciation
Buildings
Machinery, plant and equipment
Vehicles
Furniture and fixture
Leasehold improvements
Other tangible assets
Net Book Value		 1 January
2020
Additions
Disposal
Transfer
Currency
Translation
Differences		 30 September
2020
768.817
-
-
(37)
8.591
847.433
8.690
-
2.210
64.624
2.328.660
21.037
(3.462)
58.458
231.244
13.489
7
(322)
-
2.140
119.425
4.829
(966)
3.990
13.384
52.042
275
(11)
(13)
85
986
20
-
-
307
66.409
56.596
(991)
(64.637)
5.097		 777.371
922.957
2.635.937
15.314
140.662
52.378
1.313
62.474
4.197.261
91.454
(5.752)
(29)
325.472		 4.608.406
1 January
2020
Charge for
theperiod
Disposal
Transfer
Currency
Translation
Differences		 30 September
2020
(388.501)
(18.532)
-
-
(26.729)
(1.168.284)
(112.478)
2.234
-
(118.739)
(9.810)
(1.098)
322
-
(1.888)
(84.303)
(7.593)
911
-
(9.562)
(30.291)
(4.016)
3
-
(37)
(1.108)
(99)
-
-
248		 (433.762)
(1.397.267)
(12.474)
(100.547)
(34.341)
(959)
(1.682.297)
(143.816)
3.470
-
(156.707)		 (1.979.350)
2.514.964
2.629.056

In the nine-month period ending as of 30 September 2020, there is no fixed asset acquired through financial leasing by the Group.

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CONVENIENCE TRANSLATION INTO ENGLISH OF CONDENSED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH ÜLKER BİSKÜVİ SANAYİ A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD ENDED 30 SEPTEMBER 2021

(Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise stated.)

13. TANGIBLE ASSETS (Continued)

The estimated useful lives of tangible assets are as follow:

Buildings
Machinery, plant and equipment
Vehicles
Other tangible assets
Furniture and fixtures
Leasehold Improvements		 Useful Life
25 – 50years
4 – 20years
4 – 10years
4 – 10years
3 – 10years
Duringrentperiod

The Group has chosen the revaluation model from the applicatio methods in TMS 16 regarding the represenation of the lands and buildings with their fair values. Land and buildings were revalued with “compare with similar” technique on 29 January 2021. The revaluation was performed by Nova Taşınmaz Değerleme ve Danışmanlık A.Ş. authorized by Capital Markets Board. Properties were accounted on 31 December 2020 financial statements based on their fair values. The frequency of revaluations is related with the changes on the market values of the properties. Revaluation is performed if there is significant change at the fair value. If not, properties are only subject to periodical revaluation. The Group has assessed that there is no significant change in the fair value of land and buildings in the current period.

14. GOODWILL

Opening balance
Currency translation differences
Closing balance
Goodwill details are as follows:		 1 January -
30 September 2021
496.196
98.487
594.683		 1 January -
30 September 2020
388.047
112.495
500.542
Company
UI Mena B.V.
IBC		 30 September 2021
572.040
22.643
594.683		 31 December 2020
477.303
18.893
496.196		 31 December 2019
373.272
14.775
388.047

UI Mena B.V.

Yıldız Holding A.Ş. acquired United Biscuit Group as of 3 November 2014. Goodwill accounted at Yıldız Holding’s financial statement related with UI MENA operations is accounted in Ülker Bisküvi’s consolidated financial statements by restating prior years.

International Biscuits Company

Yıldız Holding A.Ş. acquired United Biscuit Group as of 3 November 2014. Goodwill accounted at Yıldız Holding’s financial statements related with IBC acquisition is accounted in Ülker Bisküvi’s consolidated financial statement by restating prior years.

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CONVENIENCE TRANSLATION INTO ENGLISH OF CONDENSED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH ÜLKER BİSKÜVİ SANAYİ A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD ENDED 30 SEPTEMBER 2021

(Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise stated.)

15. INTANGIBLE ASSETS

Movements of intangible assets between 1 January 2021 - 30 September 2021 are as follows:

Cost
Rights ()
Other intangible assets
Accumulated Amortization
Rights
Other intangible assets
Net Book Value*		 1January 2021
Addition
Currency Translation
Differences
30 September
2021
373.597
378
76.941
450.916
9.569
158
1.107
10.834
383.166
536
78.048
461.750
1January 2021
Charge for
theperiod
Currency Translation
Differences
30 September
2021
(14.418)
(2.485)
(2.763)
(19.666)
(4.966)
(1.815)
(570)
(7.351)
(19.384)
(4.300)
(3.333)
(27.017)
363.782
434.733

Movements of intangible assets between 1 January 2020 - 30 September 2020 are as follows:

Cost
Rights (*)
Other intangible assets		 1January 2020
Addition
Transfer
Currency
Translation
Differences
30 September
2020
299.979
1.573
-
91.810
393.362
6.456
735
29
1.040
8.260
306.435
2.308
29
92.850
401.622
Accumulated Amortization
Rights
Other intangible assets
Net Book Value		 1January 2020
Addition
Transfer
Currency
Translation
Differences
30 September
2020
(11.130)
(776)
-
(2.995)
(14.901)
(2.804)
(1.221)
-
(241)
(4.266)
(13.934)
(1.997)
-
(3.236)
(19.167)
292.501
382.455

(*) As of 30 September 2021 Rights contain reacquired rights related with Saudi distribution agreements of Group’s products in Saudi Arabia amounting to TL 353.258 thousand (30 September 2020: TL 310.665 thousand), the remaining amount of TL 71.505 thousand (30 September 2020: TL 60.185 thousand) contains the rights of Rana brand. Reacquired rights are not subject to depreciation and has indefinite useful life. Impairment test is applied every year or more frequently when there is any indicator that impairment may ocur. There is not any impairment as of 30 September 2021.

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CONVENIENCE TRANSLATION INTO ENGLISH OF CONDENSED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH ÜLKER BİSKÜVİ SANAYİ A.Ş. AND ITS SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD ENDED 30 SEPTEMBER 2021

(Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise stated.)

15. INTANGIBLE ASSETS (Continued)

The intangible assets are amortized on a straight-line basis over their estimated useful lives.

Useful Life Rights 2 years – Indefinite Life Other intangible assets 2 – 12 years

16. OTHER PROVISIONS, CONTINGENT ASSETS AND LIABILITIES

Guarantees Given

(Balances denominated in foreign currencies have been presented in their original currencies.)

A) CPM’s given in the name of own
legal personality ()
B) CPM’s given on behalf of the fully
consolidated companies
C) CPM’s given on behalf of
third parties for ordinary
course of business
D) Total amount of other CPM’s given
i. Total amount of CPM’s given on
behalf of the majority shareholder ()
ii. Total amount of CPM’s given on
behalf of the group companies which
are not in scope of B and C
iii. Total amount of CPM’s given on
behalf of third parties which are not in
scope of C
Total*		 30 September 2021
TL
ABD Doları
Avro
238.378
25.737
-
-
- 179.100
-
-
-

-
-
-
-
-
-
-
-
-
238.378
25.737 179.100		 31 December 2020
TL
ABD Doları
Avro
869.018
95.304
-
-
-
178.950
-
-
-
-
-
-
-
-
-
-
-
-
869.018
95.304
178.950

(*) Non-cash risk amounting to TL 92 million and USD 6.2 million.

(**) The ratio of other collaterals, pledges and mortgages given by the equity holders of the parent is zero as of 30 September 2021 (31 December 2020: zero).

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CONVENIENCE TRANSLATION INTO ENGLISH OF CONDENSED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH ÜLKER BİSKÜVİ SANAYİ A.Ş. AND ITS SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD ENDED 30 SEPTEMBER 2021

(Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise stated.)

16. OTHER PROVISIONS, CONTINGENT ASSETS AND LIABILITIES (Continued)

Guarantees Given (continued)

The Company’s ultimate parent company Yıldız Holding A.Ş. and some Yıldız Holding Group entities including Ülker Bisküvi’s subsidiaries entered into syndicated loan agreement with some of the “creditors” of Yıldız Holding A.Ş. and Yıldız Holding Group entities.

The cash balance of Ülker Bisküvi’s subsidiaries with an amunt of TL 592,7 million, EUR 10,1 million, and USD 19,5 million, and non-cash bank guarantees amounting to TL 140,1 million, USD 57 million and EUR 383 thousands were transferred to the level of Yıldız Holding A.Ş. with syndication as of 8 June 2018. The Group’s total debt has not increased as a result of the syndicated loan. Ülker Bisküvi’s subsidiaries became guarantors of Yıldız Holding A.Ş. as of the date of using the loan limited to their existing total bank loan risk exposure.

17. REVENUE AND COST OF SALES

The detail of operating income is as follows:

Domestic sales ()
Export sales
Sales returns and discounts(-)
Sales Income (net)
Cost of goods sold
Cost of trade goods sold
Cost of sales
Gross Profit*		 1 January -
30 September
2021
9.156.368
1.719.332
(2.456.743)
8.418.957
(5.934.055)
(107.022)
(6.041.077)
2.377.880		 1 July -
30 September
2021
3.247.036
606.210
(877.113)
2.976.133
(2.130.176)
(41.773)
(2.171.949)
804.184		 1 January -
30 September
2020
7.549.272
1.447.797
(2.020.457)
6.976.612
(4.700.340)
(163.940)
(4.864.280)
2.112.332		 1 July -
30 September
2020
2.467.788
499.339
(675.967)
2.291.160
(1.569.563)
(46.519)
(1.616.082)
675.078

(*) Presents domestic sales in Turkey and in countries where abroad subsidiaries are located.

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CONVENIENCE TRANSLATION INTO ENGLISH OF CONDENSED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH ÜLKER BİSKÜVİ SANAYİ A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD ENDED 30 SEPTEMBER 2021

(Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise stated.)

18. EXPENSES BY NATURE

The detail of operating expenses is as follow:

General Administrative
Expenses
Personnel expenses
Operating expenses
Consultancy expenses
Depreciation and amortization
expenses
Other
Marketing Expenses
Marketing operating expenses
Personnel expenses
Rent expenses
Depreciation and amortization
expenses
Other
Research Expenses
Personnel expenses
Materials used
Depreciation and amortization
expenses
Other		 1 January -
30 September
2021
(109.921)
(76.733)
(29.814)
(5.142)
(21.358)
(242.968)
(597.651)
(133.332)
(18.692)
(4.128)
(26.777)
(780.580)
(14.829)
(4.885)
(351)
(7.005)
(27.070)		 1 July -
30 September
2021
(37.991)
(25.373)
(9.751)
(107)
(8.883)
(82.105)
(213.425)
(43.311)
(5.998)
(1.829)
(5.842)
(270.405)
(4.809)
(1.856)
(120)
(1.525)
(8.310)		 1 January -
30 September
2020
(92.564)
(62.715)
(18.814)
(4.533)
(17.251)
(195.877)
(512.203)
(115.869)
(16.497)
(3.621)
(22.865)
(671.055)
(10.281)
(1.581)
(267)
(4.573)
(16.702)		 1 July -
30 September
2020
(31.400)
(14.756)
(9.568)
(1.550)
(9.703)
(66.977)
(155.973)
(40.599)
(5.885)
(1.300)
(7.507)
(211.264)
(3.112)
(905)
(89)
(1.480)
(5.586)

36

CONVENIENCE TRANSLATION INTO ENGLISH OF CONDENSED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH ÜLKER BİSKÜVİ SANAYİ A.Ş. AND ITS SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD ENDED 30 SEPTEMBER 2021

(Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise stated.)

19. FINANCIAL INCOME

Foreign exchange gains
Other
0. FINANCIAL EXPENSE
Foreign exchange losses from
financing
Interest expenses
Other		 1 January -
30 September
2021
448.317
5.160
453.477
1 January -
30 September
2021
(2.297.951)
(587.557)
(35.120)
(2.920.628)		 1 July -
30 September
2021
446.804
1.391
448.195
1 July -
30 September
2021
(545.917)
(181.875)
(9.378)
(737.170)		 1 January -
30 September
2020
241.883
9.009
250.892
1 January -
30 September
2020
(2.403.514)
(296.014)
(38.552)
(2.738.080)		 1 July -
30 September
2020
29.838
4.425
34.263
1 July -
30 September
2020
(1.335.518)
(100.586)
(8.287)
(1.444.391)

20. FINANCIAL EXPENSE

21. TAX ASSET AND LIABILITIES

The Group accounts deferred tax assets and liabilities for temporary timing differences rooted from differences between legal financial statements and financial statements prepared in accordance with TFRS. The differences in question are caused generally by the fact that some profit and loss accounts come up in different periods in legal financial statements and financial statements prepared in accordance with TFRS. These differences are specified below.

Turkish tax legislation does not permit a parent company and its subsidiary to file a consolidated tax return. Therefore, deferred tax positions of the firms with deferred tax assets is not netted against those with deferred tax liabilities and reflected on a separate-entity basis.

The corporate tax rate was increased from 20% to 22% for the years 2018, 2019 and 2020 within the scope of the “Law on Amendments to Certain Tax Laws and Some Other Laws” numbered 7061, which was published in the Official Gazette dated 5 December 2017. Within the scope of the law, calculation of deferred tax assets and liabilities in the financial statements as of 31 December 2018 with a tax rate of 22% for the part of the temporary differences that would have tax effects in 2018, 2019 and 2020; and with a tax rate of 23% in 2022 and 20% in following years, it was evaluated according to the level of significance. At the same time, the exemption to be applied over the capital gains obtained by corporate taxpayers from the sale of their real estates that they have held for at least two years was reduced from 75% to 50% with the regulation published in the Official Gazette dated 5 December 2017.

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CONVENIENCE TRANSLATION INTO ENGLISH OF CONDENSED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH ÜLKER BİSKÜVİ SANAYİ A.Ş. AND ITS SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD ENDED 30 SEPTEMBER 2021

(Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise stated.)

21. TAX ASSET AND LIABILITIES (Continued)

The Law No. 7316 on the Law on Collection Procedure of Public Claims and Amending Some Laws in Turkey was published in the Official Gazette dated April 22, 2021 and numbered 31462. With this law amendment, 25% tax rate will be taken into account for the period of 1 January-30 September 2021. Although the provisional tax periods are quarterly; since three, six, nine and twelve-month financial statements are taken as basis in the calculation of the income to be declared, taxation will be made by considering the 25% rate over the cumulative corporate tax base of 2021 for the whole year. For the year 2022, taxation will be made by considering the rate of 23% over the corporate tax base.

The rate applied in the calculation of deferred tax assets and liabilities for entities in Turkey is 25% (2020: 22%), for entities in Saudi Arabia and Kazakhstan is 20% (2020: 20%), for entities in Egypt is 22,5% (2020: 22,5%), for the entity in Kyrgyzstan 10% (2020: 10%), and for the entity in the United Arab Emirates is zero (2020: Zero)

Deferred tax bases :

Indexation and useful life differences of tangible
and intangible assets
Financial investments valuation differences
Investment properties valuation differences
Provisions for employee termination benefits
Previous year losses
Provision of doubtful receivables
Provision for unused vacation
Impairment on inventories
Profit elimination on inventories
Provision for lawsuits
Derivative instruments
Other		 30 September
2021
-
-
-
(199.968)
(115.497)
(30.069)
(26.060)
(15.745)
(12.654)
(9.277)
(1.566)
(83.223)
(494.059)		 31 December
2020
-
-
-
(168.215)
(83.719)
(32.842)
(25.285)
(15.927)
(22.545)
(7.200)
-
(20.718)
(376.451)		 31 December
2019
-
-
-
(137.312)
(75.059)
(18.492)
(20.994)
(15.224)
(19.275)
(8.158)
-
(17.758)
(312.272)		 30 September
2021
1.344.680
4.927
-
-
-
-
-
-
-
-
-
63.201
1.412.808		 31 December
2020
1.383.247
4.890
22.164
-
-
-
-
-
-
-
32.226
120.165
1.562.692		 31 December
2019
1.143.780
89.868
17.174
-
-
-
-
-
-
-
364.291
21.151
1.636.264

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CONVENIENCE TRANSLATION INTO ENGLISH OF CONDENSED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH ÜLKER BİSKÜVİ SANAYİ A.Ş. AND ITS SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD ENDED 30 SEPTEMBER 2021

(Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise stated.)

21. TAX ASSET AND LIABILITIES (Continued)

Deferred tax calculated over the tax bases ;

Indexation and useful life differences of tangible
and intangible assets
Financial investments valuation differences
Investment properties valuation differences
Provisions for employee termination benefits
Previous year losses
Investment incentives
Provision of doubtful receivables
Provision for unused vacation
Impairment on inventories
Profit elimination on inventories
Provision for lawsuits
Derivative instruments
Other		 30 September
2021
-
-
-
(39.994)
(23.479)
(1.106)
(7.517)
(6.515)
(3.936)
(3.163)
(2.319)
(392)
(20.806)
(109.227)		 31 December
2020
-
-
-
(33.643)
(16.744)
(13.993)
(6.568)
(5.057)
(3.185)
(4.509)
(1.440)
-
(4.144)
(89.283)		 31 December
2019
-
-
-
(27.462)
(15.348)
(21.115)
(4.068)
(4.619)
(3.349)
(4.240)
(1.795)
-
(3.906)
(85.902)		 30 September
2021
181.962
246
-
-
-
-
-
-
-
-
-
-
15.800
198.008		 31 December

2020
183.077
245
2.216
-
-
-
-
-
-
-
-
7.090
24.033
216.661		 31 December
2019
154.765
4.493
1.717
-
-
-
-
-
-
-
-
80.144
4.653
245.772

39

CONVENIENCE TRANSLATION INTO ENGLISH OF CONDENSED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH ÜLKER BİSKÜVİ SANAYİ A.Ş. AND ITS SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD ENDED 30 SEPTEMBER 2021

(Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise stated.)

21. TAX ASSET AND LIABILITIES (Continued)

Deferred Tax Liability Movement:

Opening balance
Taxes netted from funds recognised under equity
Currency translation differences
Deferred tax income		 1 January -
30September 2021
127.378
(781)
1.129
(38.945)
88.781		 1 January -
30September 2020
159.870
8.545
3.673
(104.863)
67.225

As of 30 September 2021, the Group calculated deferred tax assets of TL 115.497 thousand for deductible tax losses in the consolidated financial statements for the current year (31 December 2020: TL 83.719 thousand and 31 December 2019: TL 73.059 thousand). The maturities of these losses are as follows:

2025
2026
Total		 30September 2021
100.319
15.178
115.497		 31 December 2020
83.719
-
83.719		 31 December 2019
75.059
-
75.059

Corporate tax

The Company and its Turkish subsidiaries are subject to Turkish corporate taxes. Provision is made in the accompanying financial statements for the estimated charge based on the Group’s results for the period.

Corporate tax is applied on taxable corporate income, which is calculated from the statutory accounting profit by adding back non-deductible expenses, and by deducting dividends received from resident companies, other exempt income and investment incentives utilized.

The tax rate as of 30 September 2021 is 25% (2020: 22%).

In Turkey, advance tax returns are filed on a quarterly basis. The advance corporate income tax rate is 25% in 2021 (2020: 22%).

Losses are allowed to be carried five years maximum to be deducted from the taxable profit of the following years. However, losses occurred cannot be deducted from the profit occurred in the prior year’s retroactively.

In Turkey, there is no procedure for a final and definitive agreement on tax assessments. Companies file their tax returns between 1st-25th of April following the close of the accounting year to which they relate. The companies with special accounting periods, file their tax returns between 1st-25th of fourth month after fiscal year end. Tax authorities may, however, examine such returns and the underlying accounting records and may revise assessments within five years.

In Turkey, the tax legislation does not permit 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.

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD ENDED 30 SEPTEMBER 2021

(Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise stated.)

21. TAX ASSET AND LIABILITIES (Continued)

In Egypt, the Group's subsidiaries, Hi Food for Advanced Food Industries and Ulker for Trading and marketing, operate, “the corporate tax rate is 22.5% (2020: 22.5%). In Saudi Arabia, where Food Manufacturers’ Company and International Biscuits Company operate, “the corporate tax rate is 20% (2020: 20%).

The corporate tax rate is 20% (2020: 20%) in Kazakhstan, where one of the Group's subsidiaries, Hamle Company Ltd LLP, operates.

In Kyrgyzstan, where Ulker Star LLC, one of the Group's subsidiaries, operates, the corporate tax rate is 10% (2020: 10%).

Amir Global Trading FZE, one of the Group's subsidiaries, is exempt from corporate tax in the United Arab Emirates (2020: exempt).

Income withholding tax

In addition to corporate taxes, companies should also calculate income withholding taxes and funds surcharge on any dividends distributed, except for companies receiving dividends who are Turkish residents and Turkish branches of foreign companies. Income withholding tax applied in between 24 April 2003 – 22 July 2006 was 10% and commencing from 22 July 2006, this rate has been changed to 15% upon the Council of Ministers’ Resolution No: 2006/10731. Undistributed dividends incorporated in share capital are not subject to income withholding tax.

Provision for taxation as of 30 September 2021, 31 December 2020 and 31 December 2019 is as follows:

Total corporate tax provision
Prepaid taxes and funds
Taxation in the balance sheet
Current period corporate tax expense
Deferred tax income
Tax expense in the income statement		 30 September
2021
31 December
2020
31 December
2019
(309.068)
(354.315)
(284.328)
194.626
268.427
213.030
(114.442)
(85.888)
(71.298)
1 January -
30September 2021
1 January -
30September 2020
309.068
299.353
(38.945)
(104.863)
270.123
194.490		 30 September
2021
31 December
2020
31 December
2019
(309.068)
(354.315)
(284.328)
194.626
268.427
213.030
(114.442)
(85.888)
(71.298)
1 January -
30September 2021
1 January -
30September 2020
309.068
299.353
(38.945)
(104.863)
270.123
194.490
299.353
(104.863)
194.490

22. EARNINGS PER SHARE

A summary of the Group’s weighted average number of shares outstanding as of 30 September 2021 and 2020 and computation of earnings per share set out here are as follows:

Weighted average number of common stock outstanding
Net profit
Basic Earnings per Share		 1 January -
30September 2021
34.200.000
654.654
1,91		 1 January -
30September 2020
34.200.000
681.533
1,99

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CONVENIENCE TRANSLATION INTO ENGLISH OF CONDENSED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH ÜLKER BİSKÜVİ SANAYİ A.Ş. AND ITS SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD ENDED 30 SEPTEMBER 2021

(Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise stated.)

23. BALANCES AND TRANSACTIONS WITH RELATED PARTIES

The detail of receivables from related parties is as follows:

Trade receivables
Non-trade receivables		 30September 2021
2.357.206
564.981
**2.922.187 **		 31 December 2020
2.040.146
2.163.423
4.203.569		 31 December 2019
2.160.033
401.969
**2.562.002 **

The detail of trade and non-trade receivables is as follows:

Principle Shareholder
Yıldız Holding A.Ş.
Other Companies Controlled by the Principle Shareholder
Horizon Hızlı Tük. Ür. Paz. Sat. ve Tic. A.Ş.
Pasifik Tük. Ürün. Satış ve Ticaret A.Ş.
Yeni Teközel Markalı Ürünler Dağıtım Hizmetleri A.Ş.
G2M Eksper Satış ve Dağıtım Hizmetleri A.Ş.
United Biscuits (UK) Ltd.
Other
Other Related Parties
İstanbul Gıda Dış Tic. A.Ş.		 30September 2021
Trade
Non-Trade
-
564.981
1.219.045
-
793.465
-
146.937
-
107.197
-
8.019
-
82.543
-
-
-
2.357.206
564.981		 31 December 2020
Trade
Non-Trade
-
2.163.423
1.021.940
-
742.654
-
121.684
-
100.643
-
5.607
-
47.618
-
-
-
2.040.146
2.163.423		 31 December 2019
Trade
Non-Trade
-
286.350
903.178
-
586.179
-
159.475
-
88.545
-
2.850
-
46.617
115.619
373.189
-
2.160.033
401.969

The Group's trade receivables from related parties mainly arise from sales to Horizon Hızlı Tüketim Ürünleri Pazarlama Satış ve Tic. A.Ş. and Pasifik Tük. Ürün. Satış ve Ticaret A.Ş.

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD ENDED 30 SEPTEMBER 2021

(Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise stated.)

23. BALANCES AND TRANSACTIONS WITH RELATED PARTIES (Continued)

The detail of payables to related parties is as follows:

Trade payables
Non-trade payables		 30September 2021
321.535
557
**322.092 **		 31 December 2020
276.004
120
276.124		 31 December 2019
240.165
104
240.269

The detail of trade and non-trade payables to related parties is as follows:

Principal Shareholder
Yıldız Holding A.Ş.
Other Companies Controlled by the Principle Shareholder
Besler Gıda ve Kimya San. ve Tic. A.Ş.
United Biscuits (UK) Ltd.
pladis Foods Limited
Marsa Yağ San. ve Tic. A.Ş.
Adapazarı Şeker Fabrikası A.Ş.
CCC Gıda San. ve Tic. A.Ş.
Other
Other Related Parties
İstanbul Gıda Dış Tic. A.Ş.		 30September 2021
Trade
Non-Trade
142.219
-
46.909
-
33.379
-
7.490
557
4.495
-
251
-
234
-
86.558
-
-
-
321.535
557		 31 December 2020
Trade
Non-Trade
113.313
-
50.866
-
41.889
120
866
-
5.190
-
37.163
-
283
-
26.434
-
-
-
276.004
120		 31 December 2019
Trade
Non-Trade
96.125
-
23.813
-
7.925
-
4.491
-
2.409
-
8.268
-
564
-
23.512
-
73.058
104
240.165
104

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD ENDED 30 SEPTEMBER 2021

(Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise stated.)

23. BALANCES AND TRANSACTIONS WITH RELATED PARTIES (Continued)

The detail of purchases from and sales to related parties is as follows:

Other Companies Controlled by the Principle Shareholder
Besler Gıda ve Kimya San. ve Tic. A.Ş.
United Biscuits (UK) Ltd.
Marsa Yağ San. ve Tic. A.Ş.
Adapazarı Şeker Fabrikası A.Ş.
PNS Pendik Nişasta San. A.Ş.
G2M Eksper Satış ve Dağıtım Hizmetleri A.Ş.
Horizon Hızlı Tük. Ür. Paz. Sat. ve Tic. A.Ş.
Pasifik Tüketim Ürünleri Satış ve Tic. A.Ş.
Yeni Teközel Markalı Ürünler Dağıtım Hizmetleri A.Ş.
Other
Other Related Parties
İstanbul Gıda Dış Tic. A.Ş.		 1 January - 30
September 2021
Purchases
Sales

403.812
631
90.779
6.128
74.732
410
55.880
-
21.006
-
577
204.505
-
2.729.339
-
1.738.423
-
249.943
25.340
115.061
-
-
672.126
5.044.440		 1 July -
30September 2021
Purchases
Sales

152.094
172
26.836
2.400
27.760
108
-
-
3.665
-
23
70.252
-
1.037.591
-
554.364
-
94.527
4.036
45.279
-
-
214.414
1.804.693		 1 January - 30
September 2020
Purchases
Sales

296.241
676
77.100
7.333
67.002
343
3.011
-
26.911
-
-
143.331
4
2.357.542
-
1.366.448
-
192.780
29.597
44.253
115.401
634.605
615.267
4.747.311		 1 July -
30September 2020
Purchases
Sales
101.802
201
25.502
3.092
24.225
343
3.011
-
6.029
-
-
47.794
-
790.857
-
412.725
-
60.185
9.500
10.899
-
-
170.069
1.326.096

The Group mainly acquires raw materials from Besler Gıda ve Kimya Sanayi ve Ticaret A.Ş, which produces vegetable oil and margarine and Pendik Nişasta San. A.Ş. The major part of selling is made to Horizon Hızlı Tüketim Ürünleri Pazarlama Satış ve Tic. A.Ş. and Pasifik Tük. Ürün. Satış ve Ticaret A.Ş. who performs sales and distribution operations in Turkey.

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(Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise stated.)

23. BALANCES AND TRANSACTIONS WITH RELATED PARTIES (Continued)

The detail of income and expenses pertaining to interest, rent and services arising from transactions with related parties is as follows:

For the nine months period ended 30 September 2021:

Principle Shareholder
Yıldız Holding A.Ş.
Other Companies Controlled by the
Principle Shareholder
pladis Foods Limited
Horizon Hızlı Tük. Ür. Paz. Sat. ve Tic. A.Ş.
Pasifik Tüketim Ürünleri Satış ve Tic. A.Ş.
United Biscuits (UK) Ltd.
İzsal Gayrimenkul Geliştirme A.Ş.
Other		 Rent
Service
Interest and
Foreign Exchange
Income/(Expense)
Income/(Expense)
Income/(Expense)
Net
Net
Net
(276)
(203.407)
260.011
-
(97.337)
(858)
-
(20.072)
87.828
52
(13.474)
40.875
5
(16.921)
(896)
(3.213)
(1.348)
-
1.465
(11.831)
(7.657)
(1.967)
(364.390)
379.303

For the three months between 1 July - 30 September 2021 periods:

Principle Shareholder
Yıldız Holding A.Ş.
Other Companies Controlled by the
Principle Shareholder
pladis Foods Limited
Horizon Hızlı Tük. Ür. Paz. Sat. ve Tic. A.Ş.
Pasifik Tüketim Ürünleri Satış ve Tic. A.Ş.
United Biscuits (UK) Ltd.
İzsal Gayrimenkul Geliştirme A.Ş.
Other		 Rent
Service
Interest and
Foreign Exchange
Income/(Expense)
Income/(Expense)
Income/(Expense)
Net
Net
Net
(104)
(71.462)
(97.076)
-
(32.395)
(609)
-
(7.299)
28.844
17
(4.319)
14.637
-
(3.108)
119
(1.439)
1.544
-
902
(3.258)
(4.253)
(624)
(120.297)
(58.338)

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CONVENIENCE TRANSLATION INTO ENGLISH OF CONDENSED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH ÜLKER BİSKÜVİ SANAYİ A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD ENDED 30 SEPTEMBER 2021

(Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise stated.)

23. BALANCES AND TRANSACTIONS WITH RELATED PARTIES (Continued)

The detail of income and expenses pertaining to interest, rent and services arising from transactions with related parties is as follows:

For the nine months period ended 30 September 2020:

Principle Shareholder
Yıldız Holding A.Ş.
Other Companies Controlled by the
Principle Shareholder
Horizon Hızlı Tük. Ür. Paz. Sat. ve Tic. A.Ş.
Pasifik Tüketim Ürünleri Satış ve Tic. A.Ş.
United Biscuits (UK) Ltd.
İzsal Gayrimenkul Geliştirme A.Ş.
CCC Gıda San. ve Tic. A.Ş.
Other
Other Related Parties
İstanbul Gıda Dış Tic. A.Ş.		 Rent
Service
Interest and
Foreign Exchange
Income/(Expense)
Income/(Expense)
Income/(Expense)
Net
Net
Net
(617)
(167.643)
306.926
-
(13.335)
37.850
51
(9.638)
16.514
3
(7.608)
952
(2.164)
(3.616)
-
(632)
(985)
-
1.096
(78.844)
(10.276)
-
926
85.758
(2.263)
(280.743)
437.724

For the three months between 1 July - 30 September 2020 periods:

Principle Shareholder
Yıldız Holding A.Ş.
Other Companies Controlled by the
Principle Shareholder
Horizon Hızlı Tük. Ür. Paz. Sat. ve Tic. A.Ş.
Pasifik Tüketim Ürünleri Satış ve Tic. A.Ş.
United Biscuits (UK) Ltd.
İzsal Gayrimenkul Geliştirme A.Ş.
CCC Gıda San. ve Tic. A.Ş.
Other		 Rent
Income/(Expense)
Net
(374)
-
15
3
(760)
(206)
348
**(974) **		 Service
Interest and Foreign
Exchange
Income/(Expense)
Income/(Expense)
Net
Net
(56.945)
291.203
(6.592)
13.066
(4.195)
6.475
(2.475)
610
(1.223)
-
(333)
-
(2.357)
(3.771)
(74.120)
307.583

Benefits provided to members of BOD and key management personnel:

Fees and other short-term benefits 30September 2021
46.424
46.424		 30September 2020
40.459
40.459

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CONVENIENCE TRANSLATION INTO ENGLISH OF CONDENSED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH ÜLKER BİSKÜVİ SANAYİ A.Ş. AND ITS SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD ENDED 30 SEPTEMBER 2021

(Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise stated.)

24. NATURE AND LEVEL OF RISKS DERIVED FROM FINANCIAL INSTRUMENTS

Foreign currency risk management

Transactions in foreign currencies expose the Group to foreign currency risk.

This risk mainly arises from fluctuation of foreign currency used in conversion of foreign assets and liabilities into Turkish Lira. Foreign currency risk arises as a result of trading transactions in the future and the difference between the assets and liabilities recognized. In this regard, the Group manages this risk with a method of netting foreign currency denominated assets and liabilities. The management reviews the foreign currency open position and provides measures when needed. The group mainly faces USD, EUR, GBP and CHF currency risks .

The foreign currency denominated assets and liabilities of monetary and non-monetary items are as follows:

The foreign currency denominated assets and liabilities of monetary and non-monetary items are as follows: The foreign currency denominated assets and liabilities of monetary and non-monetary items are as follows: The foreign currency denominated assets and liabilities of monetary and non-monetary items are as follows: The foreign currency denominated assets and liabilities of monetary and non-monetary items are as follows: The foreign currency denominated assets and liabilities of monetary and non-monetary items are as follows:
30 September 2021
TL USD EUR GBP CHF
1. Trade Receivables
892.966
91.926
5.229
1.928
-
2a. Monetary Financial Assets
7.159.817
762.972
36.790
567
34
2b. Non-Monetary Financial Assets
-
-
-
-
-
3. Other
139.035
752
12.830
20
6
4. CURRENT ASSETS
8.191.818
855.650
54.849
2.515
40
5. Trade Receivables
-
-
-
-
-
6a. Monetary Financial Assets
-
-
-
-
-
6b. Non-Monetary Financial Assets
-
-
-
-
-
7. Other
-
-
-
-
-
8. NON-CURRENT ASSETS
-
-
-
-
-
9. TOTAL ASSETS
8.191.818
855.650
54.849
2.515
40
10. Trade Payables
257.715
11.250
13.181
1.743
146
11. Financial Liabilities
2.004.095
47.887
153.394
-
-
12a. Other Monetary Financial Liabilities
1.417
17
123
-
-
12b. Other Non-monetary Financial Liabilities
1.733
143
45
-
-
13. CURRENT LIABILITIES
2.264.960
59.297
166.743
1.743
146
14. Trade Payables
-
-
-
-
-
15. Financial Liabilities
10.314.171
729.448
372.841
-
-
16a. Other Monetary Financial Liabilities
-
-
-
-
-
16b. Other Non-Monetary Financial Liabilities
-
-
-
-
-
17. NON-CURRENT LIABILITIES
10.314.171
729.448
372.841
-
-
18. TOTAL LIABILITIES
12.579.131
788.745
539.584
1.743
146
19. Net Assets of Off Statement of
-
-
-
-
-
Financial Position (19a-19b)
19a. Net Assets of Off Statement of
Financial Position
-
-
-
-
-
19b. Net Liabilities of Off Statement of
Financial Position
-
-
-
-
-
20. Net Foreign Currency Asset /
(Liability) Position (9-18+19)
(4.387.313)
66.905
(484.735)
772
(106)
21. Monetary Items Net Foreign Currency
Asset / (Liability) Position
(1+2a+5+6a-10-11-12a-14-15-16a)
(4.524.615)
66.296
(497.520)
752
(112)
22. Total Fair Value of Financial
Instruments Used to Hedge the Foreign
Currency Position
-
-
-
-
-

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD ENDED 30 SEPTEMBER 2021

(Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise stated.)

24. NATURE AND LEVEL OF RISKS DERIVED FROM FINANCIAL INSTRUMENTS (Continued)

Foreign Currency Risk Management (Continued)

31 December 2020 31 December 2020 31 December 2020 31 December 2020 31 December 2020
TL USD EUR GBP CHF
1. Trade Receivables
678.224
63.163
21.474
2.126
-
2a. Monetary Financial Assets
8.977.614
1.143.477
64.569
172
70
2b. Non-Monetary Financial Assets
-
-
-
-
-
3. Other
15.941
1.206
591
25
183
4. CURRENT ASSETS
9.671.779
1.207.846
86.634
2.323
253
5. Trade Receivables
-
-
-
-
-
6a. Monetary Financial Assets
-
-
-
-
-
6b. Non-Monetary Financial Assets
-
-
-
-
-
7. Other
-
-
-
-
-
8. NON-CURRENT ASSETS
-
-
-
-
-
9. TOTAL ASSETS
9.671.779
1.207.846
86.634
2.323
253
10. Trade Payables
197.536
13.124
9.408
1.448
248
11. Financial Liabilities
1.306.065
47.038
106.660
-
-
12a. Other Monetary Financial Liabilities
1.980
120
122
-
-
12b. Other Non-monetary Financial Liabilities
3.737
395
93
-
-
13. CURRENT LIABILITIES
1.509.318
60.677
116.283
1.448
248
14. Trade Payables
-
-
-
-
-
15. Financial Liabilities
8.783.738
715.819
391.797
-
-
16a. Other Monetary Financial Liabilities
-
-
-
-
-
16b. Other Non-monetary Financial Liabilities
-
-
-
-
-
17. NON-CURRENT LIABILITIES
8.783.738
715.819
391.797
-
-
18. TOTAL LIABILITIES
10.293.056
776.496
508.080
1.448
248
19. Net Assets of Off Statement of
135.119
-
15.000
-
-
Financial Position (19a-19b)
19a. Net Assets of Off Statement of
Financial Position
-
-
-
-
-
19b. Net Liabilities of Off Statement of
Financial Position
(135.119)
-
(15.000)
-
-
20. Net Foreign Currency Asset /
(Liability) Position (9-18+19)
(486.158)
431.350
(406.446)
875
5
21. Monetary Items Net Foreign Currency
Asset / (Liability) Position
(1+2a+5+6a-10-11-12a-14-15-16a)
(633.481)
430.539
(421.944)
850
(178)
22. Total Fair Value of Financial
Instruments Used to Hedge the Foreign
Currency Position
37.340
-
4.145
-
-

48

CONVENIENCE TRANSLATION INTO ENGLISH OF CONDENSED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH ÜLKER BİSKÜVİ SANAYİ A.Ş. AND ITS SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD ENDED 30 SEPTEMBER 2021

(Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise stated.)

24. NATURE AND LEVEL OF RISKS DERIVED FROM FINANCIAL INSTRUMENTS (Continued)

Foreign Currency Risk Management (Continued)

31 December 2019 31 December 2019 31 December 2019 31 December 2019 31 December 2019
TL USD EUR GBP CHF
1. Trade Receivables
423.270
55.995
10.286
2.860
-
2a. Monetary Financial Assets
5.402.240
902.474
5.276
796
14
2b. Non-Monetary Financial Assets
-
-
-
-
-
3. Other
67.077
276
9.815
20
1
4. CURRENT ASSETS
5.892.587
958.745
25.377
3.676
15
5. Trade Receivables
-
-
-
-
-
6a. Monetary Financial Assets
-
-
-
-
-
6b. Non-Monetary Financial Assets
-
-
-
-
-
7. Other
-
-
-
-
-
8. NON-CURRENT ASSETS
-
-
-
-
-
9. TOTAL ASSETS
5.892.587
958.745
25.377
3.676
15
10. Trade Payables
121.571
11.259
6.835
917
345
11. Financial Liabilities
5.743.781
259.148
632.182
-
-
12a. Other Monetary Financial Liabilities
7.871
1.186
123
1
-
12b. Other Non-monetary Financial Liabilities
2.867
393
80
-
-
13. CURRENT LIABILITIES
5.876.090
271.986
639.220
918
345
14. Trade Payables
-
-
-
-
-
15. Financial Liabilities
645.494
-
97.058
-
-
16a. Other Monetary Financial Liabilities
-
-
-
-
-
16b. Other Non-monetary Financial Liabilities
-
-
-
-
-
17. NON-CURRENT LIABILITIES
645.494
-
97.058
-
-
18. TOTAL LIABILITIES
6.521.584
271.986
736.278
918
345
19. Net Assets of Off Statement of
1.499.055
116.000
65.000
-
-
Financial Position (19a-19b)
19a. Net Assets of Off Statement of
Financial Position
-
-
-
-
-
19b. Net Liabilities of Off Statement of
Financial Position
(1.499.055)
(116.000)
(65.000)
-
-
20. Net Foreign Currency Asset /
(Liability) Position (9-18+19)
870.058
802.759
(645.901)
2.758
(330)
21. Monetary Items Net Foreign Currency
Asset / (Liability) Position
(1+2a+5+6a-10-11-12a-14-15-16a)
(693.207)
686.876
(720.636)
2.738
(331)
22. Total Fair Value of Financial
Instruments Used to Hedge the Foreign
Currency Position
481.526
46.403
13.060
-
-

The Group’s export and import balances in the periods of 30 September 2021 and 2020 are as follows:

Total exports
Total imports		 1 January -
30 September 2021
1.719.332
1.545.211		 1 January -
30 September 2020
1.447.797
1.515.973

49

CONVENIENCE TRANSLATION INTO ENGLISH OF CONDENSED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH ÜLKER BİSKÜVİ SANAYİ A.Ş. AND ITS SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD ENDED 30 SEPTEMBER 2021

(Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise stated.)

24. NATURE AND LEVEL OF RISKS DERIVED FROM FINANCIAL INSTRUMENTS (Continued)

Foreign Currency Risk Management (Continued)

The Group is exposed to foreign exchange risk arising primarily from USD and EUR. The table below shows, the foreign currency sensitivity of the Group arising from 10% change in US dollar and EUR rates. The rate used as 10% is a fair benchmark for the Group as it is limited to capital commitment threshold. This rate is the anticipated rate change of the Group’s senior management. Sensitivity analysis includes only the monetary items in foreign currency at period end and shows the effect of 10% increase in USD and in EUR foreign currency rates. Negative value implies the effect of 10% increase in USD and in EUR foreign currency rates against TL on the decrease in the net profit.

30September 2021 30September 2021 30September 2021 30September 2020 30September 2020 30September 2020
Income / Expense Income / Expense
Appreciation Depreciation Appreciation Depreciation

of foreign
currency

of foreign
currency
of foreign
currency
of foreign
currency
575.952
-
575.952
(639.674)
-
(639.674)
(63.722)
In case of 10% appreciation of USD against TL
1 - US Dollar net asset / liability 58.861
-
58.861		 (58.861)
-		 (575.952)

2- Part of hedged from US

Dollar risk(-)		 -
3-US Dollar net effect(1 +2) (58.861) (575.952)
In case of 10% appreciation of EUR against TL

4 -Euro net asset / liability
(512.112)
-
(512.112)
(453.251)		 512.112
-		 639.674

5 - Part of hedged from Euro

risk(-)		 -
6- Euro net effect(4+5) 512.112 639.674
Total (3 + 6) 453.251
63.722

25. FINANCIAL INSTRUMENTS

Fair Value of Financial Assets

Fair value measurements by level of the following fair value measurement hierarchy is as follows:

  • Level 1: Quoted prices in active markets for identical assets or liabilities.

  • Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices).

  • Level 3: Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs).

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CONVENIENCE TRANSLATION INTO ENGLISH OF CONDENSED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH ÜLKER BİSKÜVİ SANAYİ A.Ş. AND ITS SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD ENDED 30 SEPTEMBER 2021

(Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise stated.)

25. FINANCIAL INSTRUMENTS (Continued)

The classification of the Group’s financial assets and liabilities at fair value is as follows:

Financial assets
Financial assets at fair value through
profit and loss
- Available for sale
Financial assets at fair value through
other comprehensive income statement
- Shares
Total
Financial liabilities
Financial liabilities at fair value through
other comprehensive income statement
- Derivative instruments
Total
Financial assets
Financial assets at fair value through
profit and loss
- Available for sale
Financial assets at fair value through
other comprehensive income statement
- Shares
- Derivative instruments
Total
Financial liabilities
Financial liabilities at fair value through
other comprehensive income statement
- Derivative instruments
Total		 30 September
2021
4.278.160
977.906
5.256.066
1.566
1.566
31 December
2020
3.639.674
977.906
37.340
4.654.920
1.892
1.892		 Fair value hierarchy
as of reporting date		 Fair value hierarchy
as of reporting date		 Fair value hierarchy
as of reporting date
Level 1
Level 2
Level 3
TL
TL
TL
934
4.264.769
12.457
-
-
977.906
934
4.264.769
990.363
-
1.566
-
-
1.566
-
Fair value hierarchy
as of reporting date		 Level 3
TL
12.457
977.906
990.363
-
-
Level 1
TL
49.044
-
-
49.044
-
-		 Level 2
TL
3.585.948
-
37.340
3.623.288
1.892
1.892		 Level 3
TL
4.682
977.906
-
982.588
-
-

51

CONVENIENCE TRANSLATION INTO ENGLISH OF CONDENSED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH ÜLKER BİSKÜVİ SANAYİ A.Ş. AND ITS SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD ENDED 30 SEPTEMBER 2021

(Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise stated.)

25. FINANCIAL INSTRUMENTS (Continue)

The classification of the Group’s financial assets and liabilities at fair value is as follows (Continue):

Financial assets
Financial assets at fair value through
profit and loss
- Available for sale
Financial assets at fair value through
other comprehensive income statement
- Shares
- Derivative instruments
Total		 31 December
2019
3.057.659
945.829
364.291
4.367.779		 Fair value hierarchy
as of reporting date		 Fair value hierarchy
as of reporting date		 Fair value hierarchy
as of reporting date
Level 1
TL
806
-
-
806		 Level 2
TL
3.053.379
-
364.291
3.417.670		 Level 3
TL
3.474
945.829
-
949.303

The carrying value of fixed-rate Eurobonds (Note 6) with a total nominal value of USD 650,000,000 issued by the Company to be traded in Dublin Euronext is TL 376.982 thousand below their fair value based on registered prices in active markets (Level 1).

52

CONVENIENCE TRANSLATION INTO ENGLISH OF CONDENSED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH ÜLKER BİSKÜVİ SANAYİ A.Ş. AND ITS SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD ENDED 30 SEPTEMBER 2021

(Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise stated.)

26. EVENTS AFTER THE BALANCE SHEET DATE

As of the balance sheet date, the impact assessment process of the effects of “the Revaluation of Immovable Properties” published in the Law No. 7326 and the General Communique on the Tax Procedure Law No. 530 continues.

53

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