VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
CONVENIENCE TRANSLATION INTO ENGLISH OF CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD
1 JANUARY- 30 JUNE 2020 (TOGETHER WITH INDEPENDENT AUDITOR'S LIMITED REVIEW REPORT)
(ORIGINALLY ISSUED IN TURKISH)
VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD 1 JANUARY - 30 JUNE 2020
CONTENTS | PAGE |
CONDENSED CONSOLIDATED INTERIM BALANCE SHEETS ................................................................... | 1-5 |
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF PROFIT OR LOSS AND | |
OTHER COMPREHENSIVE INCOME............................................................................................................................ | 6-7 |
bbCONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN | |
SHAREHOLDERS' EQUITY............................................................................................................................................... | 8 |
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS......................................... | 9-11 |
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD 1 JANUARY - 30 JUNE 2020
NOTE 1 | GROUP'S ORGANISATION AND NATURE OF OPERATIONS............................................................... | 12-13 |
NOTE 2 | BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS........................... | 13-34 |
NOTE 3 | INTERESTS IN OTHER ENTITIES......................................................................................................................... | 35-36 |
NOTE 4 | SEGMENT REPORTING............................................................................................................................................... | 37-38 |
NOTE 5 | CASH AND CASH EQUIVALENTS.......................................................................................................................... | 39 |
NOTE 6 | FINANCIAL ASSETS....................................................................................................................................................... | 39-40 |
NOTE 7 | FINANCIAL LIABILITIES............................................................................................................................................ | 40-42 |
NOTE 8 | RELATED PARTY DISCLOSURES.......................................................................................................................... | 43-46 |
NOTE 9 | TRADE RECEIVABLES AND PAYABLES........................................................................................................... | 46-47 |
NOTE 10 | OTHER RECEIVABLES................................................................................................................................................. | 48 |
NOTE 11 | INVENTORIES................................................................................................................................................................... | 48-49 |
NOTE 12 | PREPAID EXPENSES..................................................................................................................................................... | 49 |
NOTE 13 | INVESTMENTS RECOGNIZED BY EQUITY PICKUP METHOD........................................................... | 50-51 |
NOTE 14 | PROPERTY, PLANT AND EQUIPMENT............................................................................................................. | 52-54 |
NOTE 15 | RIGHT OF USE ASSETS................................................................................................................................................ | 55 |
NOTE 16 | INTANGIBLE ASSETS................................................................................................................................................... | 56-57 |
NOTE 17 | PROVISIONS, CONTINGENT ASSETS AND LIABILITIES........................................................................ | 57-60 |
NOTE 18 | COMMITMENTS.............................................................................................................................................................. | 60 |
NOTE 19 | EMPLOYEE BENEFITS................................................................................................................................................. | 61-62 |
NOTE 20 | OTHER ASSETS AND LIABILITIES....................................................................................................................... | 62-63 |
NOTE 21 | CAPITAL, RESERVES AND OTHER EQUITY ITEMS .................................................................................. | 63-65 |
NOTE 22 | SALES ..................................................................................................................................................................................... | 66 |
NOTE 23 | EXPENSES BY NATURE.............................................................................................................................................. | 66 |
NOTE 24 | GENERAL ADMINISTRATIVE EXPENSES, MARKETING EXPENSES, RESEARCH | |
AND DEVELOPMENT EXPENSES......................................................................................................................... | 67 | |
NOTE 25 | OTHER INCOME AND EXPENSES FROM OPERATING ACTIVITIES............................................... | 68 |
NOTE 26 | FINANCIAL INCOME AND FINANCIAL EXPENSES................................................................................... | 69 |
NOTE 27 | TAXES ON INCOME (INCLUDING DEFERRED TAX ASSETS AND LIABILITIES).................... | 69-73 |
NOTE 28 | EARNINGS / (LOSS) PER SHARE.......................................................................................................................... | 73 |
NOTE 29 | DERIVATIVE INSTRUMENTS ................................................................................................................................. | 74 |
NOTE 30 | FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT............................................ | 74-78 |
NOTE 31 | SUBSEQUENT EVENTS............................................................................................................................................... | 78 |
NOTE 32 | OTHER MATTERS THAT MAY AFFECT THE FINANCIAL STATEMENTS OR TO BE | |
EXPLAINED FOR THE FINANCIAL STATEMENTS TO BE INTERPRETABLE AND EXPLAINABLE ............ | 79 |
1
VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
CONDENSED CONSOLIDATED INTERIM BALANCE SHEETS AS OF 30 JUNE 2020 AND 31 DECEMBER 2019
(Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
Reviewed | Audited | ||
Footnotes | 30 June 2020 | 31 December 2019 | |
ASSETS | |||
CURRENT ASSETS | |||
Cash and Cash Equivalents | 5 | 2.530.458 | 2.394.334 |
Trade Receivables | 3.875.997 | 3.372.832 | |
Trade Receivables Due from Related Parties | 8 | 62.943 | 55.810 |
Trade Receivables Due from Third Parties | 9 | 3.813.054 | 3.317.022 |
Other Receivables | 1.102.168 | 800.384 | |
Other Receivables Due from Related Parties | 8, 10 | 780.285 | 550.383 |
Other Receivables Due from Third Parties | 10 | 321.883 | 250.001 |
Derivative Financial Assets | 50.171 | 45.487 | |
Derivative Financial Assets Held for Trading | 29 | 28.005 | 42.291 |
Derivative Financial Assets Held for Hedging | 29 | 22.166 | 3.196 |
Inventories | 11 | 2.972.911 | 2.833.115 |
Prepaid Expense | 12 | 122.008 | 89.674 |
Current Tax Assets | 27 | - | 7.259 |
Other Current Assets | 20 | 45.748 | 65.496 |
TOTAL CURRENT ASSETS | 10.699.461 | 9.608.581 |
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
2
VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
CONDENSED CONSOLIDATED INTERIM BALANCE SHEETS AS OF 30 JUNE 2020 AND 31 DECEMBER 2019
(Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
Reviewed | Audited | ||
Footnotes | 30 June 2020 | 31 December 2019 | |
NON-CURRENT ASSETS | |||
Financial Investments | 6 | 75.921 | 69.941 |
Investments in subsidiaries, joint ventures | |||
and associates | 13 | 893.138 | 974.192 |
Trade Receivables | 9 | 43.245 | 67.595 |
Other Receivables | 4.829.775 | 3.986.552 | |
Other Receivables Due from Related Parties | 8 | 4.822.997 | 3.981.045 |
Other Receivables Due from Third Parties | 10 | 6.778 | 5.507 |
Property, Plant and Equipments | 3.312.184 | 3.452.328 | |
Land and Premises | 14 | 602.546 | 635.564 |
Land Improvements | 14 | 120.893 | 125.506 |
Buildings | 14 | 1.364.679 | 1.428.183 |
Machinery and Equipments | 14 | 1.144.383 | 1.115.091 |
Vehicles | 14 | 2.747 | 2.705 |
Fixtures and Fittings | 14 | 42.591 | 78.708 |
Leasehold Improvements | 14 | 868 | 12.276 |
Construction in Progress | 14 | 33.477 | 54.295 |
Right of Use Assets | 15 | 190.758 | 163.776 |
Intangible Assets and Goodwill | 857.721 | 815.521 | |
Goodwill | 197.793 | 197.793 | |
Other Rights | 16 | 15.618 | 15.779 |
Capitalized Development Costs | 16 | 573.693 | 528.242 |
Other Intangible Assets | 16 | 70.617 | 73.707 |
Prepayments | 12 | 98.054 | 73.496 |
Deferred Tax Asset | 27 | 328.615 | 230.498 |
Other Non-current Assets | 20 | 10.603 | 9.925 |
TOTAL NON-CURRENT ASSETS | 10.640.014 | 9.843.824 | |
TOTAL ASSETS | 21.339.475 | 19.452.405 | |
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
3
VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
CONDENSED CONSOLIDATED INTERIM BALANCE SHEETS AS OF 30 JUNE 2020 AND 31 DECEMBER 2019
(Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
Reviewed | Audited | ||
Footnotes | 30 June 2020 | 31 December 2019 | |
LIABILITIES | |||
CURRENT LIABILITIES | |||
Current Borrowings | 5.166.222 | 5.830.835 | |
Current Borrowings from Related Parties | 10.652 | 7.368 | |
Lease Liabilities | 7, 8 | 10.652 | 7.368 |
Current Borrowings from Third Parties | 5.155.570 | 5.823.467 | |
Bank Loans | 7 | 5.078.967 | 5.766.814 |
Lease Liabilities | 7 | 76.603 | 56.653 |
Current Portion of Non-current Borrowings | 1.819.367 | 1.411.361 | |
Current Portion of Non-current Borrowings from | |||
Third Parties | 1.819.367 | 1.411.361 | |
Bank Loans | 7 | 1.819.367 | 1.411.361 |
Trade Payables | 6.412.064 | 6.127.709 | |
Trade Payables to Related Parties | 8 | 5.491 | 7.830 |
Trade Payables to Third Parties | 9 | 6.406.573 | 6.119.879 |
Payables Related to Employee Benefit | 19 | 173.422 | 200.055 |
Other Payables | 78.267 | 56.799 | |
Other Payables to Related Parties | 8 | 64.728 | 56.195 |
Other Payables to Third Parties | 13.539 | 604 | |
Derivative Financial Liabilities | 38.580 | 52.592 | |
Derivative Financial Liabilities Held for Trading | 29 | 4.093 | 42.532 |
Derivative Financial Liabilities Held for Hedging | 29 | 34.487 | 10.060 |
Current Tax Liabilities | 27 | 2.239 | - |
Current Provisions | 17 | 580.230 | 582.081 |
Other Current Liabilities | 20 | 489.179 | 391.043 |
TOTAL CURRENT LIABILITIES | 14.759.570 | 14.652.475 |
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
4
VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
CONDENSED CONSOLIDATED INTERIM BALANCE SHEETS AS OF 30 JUNE 2020 AND 31 DECEMBER 2019
(Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
Reviewed | Audited | ||
Footnotes | 30 June 2020 | 31 December 2019 | |
NON-CURRENT LIABILITIES | |||
Long Term Borrowings | 1.492.396 | 568.081 | |
Long Term Borrowings from Related Parties | 21.599 | 15.759 | |
Lease Liabilities | 7,8 | 21.599 | 15.759 |
Long Term Borrowings from Third Parties | 1.470.797 | 552.322 | |
Bank Loans | 7 | 1.375.957 | 456.424 |
Lease Liabilities | 7 | 94.840 | 95.898 |
Trade Payables | 9 | 506 | 6.747 |
Non-current Provisions | 217.012 | 201.953 | |
Non-current Provisions for Employee Benefits | 19 | 168.917 | 156.116 |
Other Non-current Provisions | 17 | 48.095 | 45.837 |
Deferred Tax Liabilities | 27 | 259.856 | 233.589 |
Other Non-current Liabilities | 803 | 9.649 | |
TOTAL NON-CURRENT LIABILITIES | 1.970.573 | 1.020.019 | |
TOTAL LIABILITIES | 16.730.143 | 15.672.494 |
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
5
VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
CONDENSED CONSOLIDATED INTERIM BALANCE SHEETS AS OF 30 JUNE 2020 AND 31 DECEMBER 2019
(Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
Reviewed | Audited | ||
Footnotes | 30 June 2020 | 31 December 2019 | |
EQUITY | |||
Equity Attributable to Owners of Parent | 4.447.359 | 3.690.656 | |
Paid-in Capital | 21 | 335.456 | 335.456 |
Inflation Adjustments on Capital | 688.315 | 688.315 | |
Share Premium (Discount) | 100.897 | 103.776 | |
Other Accumulated Comprehensive Income (Loss) that will | |||
not be Reclassified in Profit or Loss | 1.211.187 | 1.275.275 | |
Gains (Losses) on Revaluation and Remeasurement | 1.211.187 | 1.275.275 | |
Increases (Decreases) on Revaluation of | |||
Property, Plant and Equipment | 21 | 1.251.946 | 1.310.274 |
Gains (Losses) on Remeasurements of Defined | |||
Benefit Plans | (40.759) | (34.999) | |
Other Accumulated Comprehensive Income (Loss) that will | |||
be Reclassified in Profit or Loss | 504.604 | 406.591 | |
Exchange Differences on Translation | 500.191 | 406.932 | |
Gains (Losses) on Hedge | (2.529) | (4.662) | |
Gains (Losses) on Cash Flow Hedges | (2.529) | (4.662) | |
Gains (Losses) on Revaluation and Reclassification | 6.942 | 4.321 | |
Gains (Losses) on Remeasurement | |||
and/or Reclassification of | |||
Available-for-sale Financial Assets | 21 | 6.942 | 4.321 |
Restricted Reserves Appropriated from Profits | 67.443 | 67.179 | |
Legal Reserves | 21 | 67.443 | 67.179 |
Retained Earnings/Accumulated Losses | 21 | 939.366 | 490.017 |
Current Period Net Profit Or Loss | 600.091 | 324.047 | |
Non-controlling Interests | 161.973 | 89.255 | |
TOTAL EQUITY | 4.609.332 | 3.779.911 | |
TOTAL LIABILITIES AND EQUITY | 21.339.475 | 19.452.405 | |
Consolidated financial statements for the period 1 January - 30 June 2020, were approved by the Board of Directors of Vestel Elektronik Sanayi ve Ticaret A.Ş. on 19 August 2020.
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
6
VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
CONDENSED CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE INTERIM PERIODS 1 JANUARY - 30 JUNE 2020 AND 2019
(Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
Reviewed | Reviewed | |||
1 January - | 1 January - | 1 April - | 1 April - | |
30 June | 30 June | 30 June | 30 June | |
2020 | 2019 | 2020 | 2019 | |
PROFIT OR LOSS | ||||
Revenue | 8.354.599 | 7.825.967 | 4.423.797 | 4.263.434 |
Cost of Sales | (6.042.107) | (5.789.879) | (3.230.516) | (3.036.989) |
GROSS PROFIT (LOSS) | 2.312.492 | 2.036.088 | 1.193.281 | 1.226.445 |
General Administrative Expenses | (206.115) | (198.214) | (95.102) | (87.858) |
Marketing Expenses | (968.264) | (871.841) | (482.469) | (465.863) |
Research and Development Expense | (130.328) | (123.022) | (65.371) | (64.470) |
Other Income from Operating Activities | 551.922 | 717.697 | 223.462 | 391.794 |
Other Expenses from Operating Activities | (1.103.722) | (1.028.852) | (445.531) | (425.335) |
PROFIT (LOSS) FROM OPERATIONS | 455.985 | 531.856 | 328.270 | 574.713 |
Share of Profit (Loss) from Equity Accounted İnvestees for Using | ||||
Equity Method | (118.294) | (129.230) | (47.289) | (49.222) |
PROFIT (LOSS) BEFORE FINANCING INCOME (EXPENSE) | 337.691 | 402.626 | 280.981 | 525.491 |
Finance Income | 1.526.180 | 1.340.922 | 623.379 | 591.228 |
Finance Costs | (1.297.767) | (1.718.768) | (610.102) | (832.904) |
PROFIT (LOSS) FROM CONTINUING OPERATIONS | 566.104 | 24.780 | 294.258 | 283.815 |
Tax (Expense) Income, Continuing Operations | 60.034 | 26.155 | 95.406 | 37.392 |
Current Period Tax (Expense) Income | (4.356) | (4.456) | (929) | (3.026) |
Deferred Tax (Expense) Income | 64.390 | 30.611 | 96.335 | 40.418 |
PROFIT (LOSS) FROM CONTINUING OPERATIONS | 626.138 | 50.935 | 389.664 | 321.207 |
PROFIT (LOSS) FOR THE PERİOD | 626.138 | 50.935 | 389.664 | 321.207 |
Profit (loss), attributable to | ||||
Non-controlling Interests | 26.047 | 15.457 | 19.622 | 11.309 |
Owners of Parent | 600.091 | 35.478 | 370.042 | 309.898 |
Earnings per 100 share with a Kr 1 of Par Value (TL) | 1,79 | 0,11 | 1,10 | 0,92 |
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
7
VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
CONDENSED CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE INTERIM PERIODS 1 JANUARY - 30 JUNE 2020 AND 2019
(Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
1 January - | 1 January - | 1 April - | 1 April - | |
30 June | 30 June | 30 June | 30 June | |
2020 | 2019 | 2020 | 2019 | |
OTHER COMPREHENSIVE INCOME | ||||
Other Comprehensive Income that will | ||||
not be Reclassified to Profit or Loss | (6.323) | (2.865) | (4.548) | (459) |
Gains (Losses) on Remeasurements of Defined Benefit Plans | (7.904) | (3.581) | (5.685) | (573) |
Taxes Relating to Components of Other Comprehensive Income | ||||
that will not be Reclassified to Profit or Loss | 1.581 | 716 | 1.137 | 114 |
Taxes Relating to Remeasurements of Defined Benefit Plans | 1.581 | 716 | 1.137 | 114 |
Other Comprehensive Income that will | ||||
be Reclassified to Profit or Loss | 98.013 | 124.527 | 62.016 | 19.624 |
Exchange Differences on Translation | 93.259 | 119.215 | 75.380 | 35.552 |
Gains (losses) on Remeasuring Available-for-sale Financial Assets | 3.360 | (400) | 6.800 | (481) |
Other Comprehensive Income (Loss) Related with Cash Flow Hedges | 2.735 | 7.210 | (23.933) | (19.940) |
Gains (Losses) on Cash Flow Hedges | 2.735 | 7.210 | (23.933) | (19.940) |
Taxes Relating to Components of Other Comprehensive Income | ||||
that will be Reclassified to Profit or Loss | (1.341) | (1.498) | 3.769 | 4.493 |
Taxes Relating to Gains (Losses) on Remeasuring or | ||||
Reclassification Adjustments on Available-for-sale Financial Assets | (739) | 88 | (1.496) | 106 |
Taxes Relating to Cash Flow Hedges | (602) | (1.586) | 5.265 | 4.387 |
OTHER COMPREHENSIVE INCOME | 91.690 | 121.662 | 57.468 | 19.165 |
TOTAL COMPREHENSIVE INCOME | 717.828 | 172.597 | 447.132 | 340.372 |
Total Comprehensive Income Attributable to | ||||
Non-controlling Interests | 25.217 | 15.430 | 18.773 | 11.196 |
Owners of Parent | 692.611 | 157.167 | 428.359 | 329.176 |
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
8
VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY FOR THE INTERIM PERIODS 1 JANUARY - 30 JUNE 2020 AND 2019 (Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
Other | Gains | |||||||||||||||||||
Accumulat- | (Losses) on | Other | ||||||||||||||||||
ed | Remeasur- | Accumulat- | ||||||||||||||||||
Increases | Gains | Comprehen | ing and/or | Gains | ed | |||||||||||||||
(Decreases) | (Losses) on | Gains | sive Income | Reclassificat | (Losses) | Comprehens | ||||||||||||||
on | Remeasure- | (Losses) | That Will | Exchange | ion of | on | ive Income | Restricted | Equity | |||||||||||
Inflation | Share | Revaluation | ments of | Revaluation | Not Be | Difference | Reserve | Available- | Revaluat | That Will Be | Reserves | Prior | attribut- | Non- | ||||||
Adjustme | Premium | of Property, | Defined | s and | Reclassified | s on | Of Gains | for-sale | ion and | Reclassified | Appropria | Years' | able to | controll- | ||||||
Issued | nts on | or | Plant and | Benefit | Remeasure | In Profit Or | Translatio | Cash Flow | or Losses | Financial | Reclassif | In Profit Or | ted From | Profits or | Net Profit or | Retained | owners of | ing | ||
Capital | Capital | Discounts | Equipment | Plans | ments | Loss | n | Hedges | on Hedge | Assets | ication | Loss | Profits | Losses | Loss | Earnings | parent | interests | Equity | |
Previous Period | ||||||||||||||||||||
1 January -30 June 2019 | ||||||||||||||||||||
Beginning of Period | 335.456 | 688.315 | 103.776 | 1.338.777 | (19.907) | 1.318.870 | 1.318.870 | 262.586 | (10.521) | (10.521) | 1.965 | 1.965 | 254.030 | 48.821 | 108.719 | 371.153 | 479.872 | 3.229.140 | 89.115 | 3.318.255 |
Transfers | - | - | - | - | - | - | - | - | - | - | - | - | - | 18.270 | 352.883 | (371.153) | (18.270) | - | - | - |
Total Comprehensive Income (Loss) | - | - | - | (14.152) | (2.831) | (16.983) | (16.983) | 119.215 | 5.617 | 5.617 | (312) | (312) | 124.520 | - | 14.152 | 35.478 | 49.630 | 157.167 | 15.430 | 172.597 |
Profit (Loss) | - | - | - | (14.152) | - | (14.152) | (14.152) | - | - | - | - | - | - | - | 14.152 | 35.478 | 49.630 | 35.478 | 15.457 | 50.935 |
Other Comprehensive Income (Loss) | - | - | - | - | (2.831) | (2.831) | (2.831) | 119.215 | 5.617 | 5.617 | (312) | (312) | 124.520 | - | - | - | - | 121.689 | (27) | 121.662 |
Dividends Paid | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | (27.345) | (27.345) |
End of Period | 335.456 | 688.315 | 103.776 | 1.324.625 | (22.738) | 1.301.887 | 1.301.887 | 381.801 | (4.904) | (4.904) | 1.653 | 1.653 | 378.550 | 67.091 | 475.754 | 35.478 | 511.232 | 3.386.307 | 77.200 | 3.463.507 |
Current Period | ||||||||||||||||||||
1 January -30 June 2020 | ||||||||||||||||||||
Opening Balance | 335.456 | 688.315 | 103.776 | 1.310.274 | (34.999) | 1.275.275 | 1.275.275 | 406.932 | (4.662) | (4.662) | 4.321 | 4.321 | 406.591 | 67.179 | 490.017 | 324.047 | 814.064 | 3.690.656 | 89.255 | 3.779.911 |
Transfers | - | - | - | (47.735) | - | (47.735) | (47.735) | - | - | - | - | - | - | 264 | 371.518 | (324.047) | 47.471 | - | - | - |
Total Comprehensive | ||||||||||||||||||||
Income (Loss) | - | - | - | - | (6.165) | (6.165) | (6.165) | 93.259 | 2.133 | 2.133 | 2.621 | 2.621 | 98.013 | - | - | 600.091 | 600.091 | 691.939 | 25.889 | 717.828 |
Profit (Loss) | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | 600.091 | 600.091 | 600.091 | 26.047 | 626.138 |
Other Comprehensive Income (Loss) | - | - | - | - | (6.165) | (6.165) | (6.165) | 93.259 | 2.133 | 2.133 | 2.621 | 2.621 | 98.013 | - | - | - | - | 91.848 | (158) | 91.690 |
Transactions with | ||||||||||||||||||||
noncontrolling interests | - | - | (2.879) | (10.593) | 405 | (10.188) | (10.188) | - | - | - | - | - | - | - | 77.831 | - | 77.831 | 64.764 | 46.829 | 111.593 |
Closing Balance | 335.456 | 688.315 | 100.897 | 1.251.946 | (40.759) | 1.211.187 | 1.211.187 | 500.191 | (2.529) | (2.529) | 6.942 | 6.942 | 504.604 | 67.443 | 939.366 | 600.091 | 1.539.457 | 4.447.359 | 161.973 | 4.609.332 |
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
9
VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE INTERIM PERIODS 1 JANUARY - 30 JUNE 2020 AND 2019
(Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
Reviewed | Reviewed | ||
1 January - | 1 January - | ||
30 June | 30 June | ||
Footnotes | 2020 | 2019 | |
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES | 1.061.841 | 1.171.575 | |
Profit (Loss) | 626.138 | 50.935 | |
Profit (Loss) from Continuing Operations | 626.138 | 50.935 | |
Adjustments to Reconcile Profit (Loss) | 843.187 | 1.418.407 | |
Adjustments for Depreciation and Amortisation Expense | 14,15,16 | 340.188 | 299.236 |
Adjustments for Impairment Loss | |||
(Reversal of Impairment Loss) | 21.594 | 35.240 | |
Adjustments for Impairment Loss | |||
(Reversal of Impairment Loss) of Receivables | 9 | 10.591 | 27.010 |
Adjustments for Impairment Loss | |||
(Reversal of Impairment Loss) of Inventories | 11 | 11.003 | 8.230 |
Adjustments for Provisions | 15.733 | (62.990) | |
Adjustments for (Reversal of) Provisions Related with | |||
Employee Benefits | 19 | 15.326 | 13.582 |
Adjustments for (Reversal of) Lawsuit and/or | |||
Penalty Provisions | 17 | 2.702 | (23.285) |
Adjustments for (Reversal of) Warranty Provisions | 17 | 25.564 | (1.585) |
Adjustments for (Reversal of) Other Provisions | 17 | (27.859) | (51.702) |
Adjustments for Interest (Income) Expenses | 198.822 | 263.319 | |
Adjustments for Interest Income | 26 | (232.904) | (291.008) |
Adjustments for Interest Expense | 26 | 431.726 | 554.327 |
Adjustments for Unrealised Foreign | |||
Exchange Losses (Gains) | 7 | 222.899 | 228.235 |
Adjustments for Fair Value Losses (Gains) | (15.961) | (146.458) | |
Adjustments for Fair Value (Gains) Losses on | |||
Derivative Financial Instruments | (15.961) | (146.458) | |
Adjustments for Undistributed Profits of Investments Accounted | |||
for Using Equity Method | 118.294 | 129.230 | |
Adjustments for Tax (Income) Expenses | (60.034) | (26.155) | |
Adjustments for Losses (Gains) on Disposal of | |||
Non-Current Assets | (54.412) | (1.725) | |
Adjustments for Losses (Gains) Arised from | |||
Sale of Tangible Assets | (54.412) | (1.725) | |
Other Adjustments to Reconcile Profit (Loss) | 5 | 56.064 | 700.475 |
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
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VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE INTERIM PERIODS 1 JANUARY - 30 JUNE 2020 AND 2019
(Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
Reviewed | Reviewed | ||
1 January - | 1 January - | ||
30 June | 30 June | ||
Footnotes | 2020 | 2019 | |
Changes in Working Capital | (401.593) | (282.636) | |
Decrease (Increase) in Financial Investments | 6 | (5.980) | (81) |
Adjustments for Decrease (Increase) in Trade Accounts Receivable | (489.406) | 357.655 | |
Decrease (Increase) in Trade Accounts Receivables from | |||
Related Parties | (7.133) | (5.182) | |
Decrease (Increase) in Trade Accounts Receivables from | |||
Third Parties | (482.273) | 362.837 | |
Adjustments for Decrease (Increase) in Other Receivables | |||
Related with Operations | (73.153) | 7.040 | |
Decrease (Increase) in Other Third Party Receivables Related | |||
with Operations | (73.153) | 7.040 | |
Adjustments for Decrease (Increase) in Inventories | 11 | (156.197) | (289.283) |
Decrease (Increase) in Prepaid Expenses | (56.892) | (65.477) | |
Adjustments for Increase (Decrease) in Trade Accounts Payable | 278.114 | (299.095) | |
Increase (Decrease) in Trade Accounts Payables to | |||
Related Parties | (2.339) | 4.677 | |
Increase (Decrease) in Trade Accounts Payables to Third | |||
Parties | 280.453 | (303.772) | |
Increase (Decrease) in Employee Benefit Liabilities | 19 | (26.633) | 28.305 |
Adjustments for Increase (Decrease) in Other | |||
Operating Payables | 12.935 | 4.816 | |
Increase (Decrease) in Other Operating Payables to Third | |||
Parties | 12.935 | 4.816 | |
Other Adjustments for Other Increase (Decrease) in | |||
Working Capital | 115.619 | (26.516) | |
Decrease (Increase) in Other Assets Related | |||
with Operations | 26.329 | (43.334) | |
Increase (Decrease) in Other Payables Related | |||
with Operations | 89.290 | 16.818 | |
Cash Flows from (used in) Operations | 1.067.732 | 1.186.706 | |
Payments Related with Provisions for Employee Benefits | 19 | (10.429) | (9.608) |
Income Taxes Refund (Paid) | 27 | 4.538 | (5.523) |
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
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VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE INTERIM PERIODS 1 JANUARY - 30 JUNE 2020 AND 2019
(Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
Reviewed | Reviewed | ||
1 January - | 1 January - | ||
30 June | 30 June | ||
Footnotes | 2020 | 2019 | |
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES | (1.148.744) | (1.258.691) | |
Cash Outflows Arising from Purchase of Shares or Capital | |||
Increase of Associates and/or Joint Ventures | 6 | - | (14.786) |
Proceeds from Sales of Property, Plant, Equipment and | |||
Intangible Assets | 298.868 | 3.601 | |
Proceeds from Sales of Property, Plant and Equipment | 298.868 | 3.601 | |
Purchase of Property, Plant, Equipment and | |||
Intangible Assets | (375.758) | (294.329) | |
Purchase of Property, Plant and Equipment | 14 | (259.310) | (206.980) |
Purchase of Intangible Assets | 16 | (116.448) | (87.349) |
Cash Advances and Loans Made to Third Parties | (1.071.854) | (953.177) | |
Cash Advances and Loans Made to Related Parties | 8 | (1.071.854) | (953.177) |
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES | 225.446 | 128.864 | |
Proceeds from Borrowings | 3.746.293 | 2.371.024 | |
Proceeds from Loans | 7 | 3.746.293 | 2.371.024 |
Repayments of Borrowings | (3.322.174) | (1.870.852) | |
Loan Repayments | 7 | (3.321.116) | (1.868.217) |
Cash Outflows from Other Financial Liabilities | (1.058) | (2.635) | |
Increase in Other Payables to Related Parties | 8.533 | 4.675 | |
Payments of Lease Liabilities | 7 | (10.458) | (34.954) |
Dividends Paid | - | (27.345) | |
Interest Paid | (429.652) | (604.692) | |
Interest Received | 232.904 | 291.008 | |
NET INCREASE (DECREASE) IN CASH AND CASH | |||
EQUIVALENTS BEFORE EFFECT OF EXCHANGE RATE CHANGES | 138.543 | 41.748 | |
Effect of Exchange Rate Changes on Cash and | |||
Cash Equivalents | 53.645 | 23.764 | |
NET INCREASE (DECREASE) IN CASH AND CASH | |||
EQUIVALENTS | 192.188 | 65.512 | |
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE | |||
PERIOD | 5 | 2.283.040 | 2.278.962 |
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD | 2.475.228 | 2.344.474 |
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
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VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD 1 JANUARY - 30 JUNE 2020
(Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
NOTE 1 - GROUP'S ORGANISATION AND NATURE OF OPERATIONS
Vestel Elektronik Sanayi ve Ticaret Anonim Şirketi ("Vestel Elektronik" or "the Company") and its subsidiaries (together "the Group"), mainly produce and sell a range of brown goods and white goods. The Company's head office is located at Levent 199, Büyükdere Caddesi No: 199, 34394 Şişli / Istanbul. The Group's production facilities are located in Manisa Organized Industrial Zone, İzmir Aegean Free Zone and Russia.
The ultimate controller of the Company is Zorlu Family.
Vestel Elektronik is registered to Capital Market Board ("CMB") and its shares have been quoted to Borsa Istanbul ("BİST") since 1990. As of 30 June 2020, 35,59 % of the Company's shares are publicly traded (2019: 35,59%).
As of 30 June 2020 the number of personnel employed at Group is 16.672 (31 December 2019: 16.775).
The Company's subsidiaries and associates are as follows:
Subsidiaries | Country | Nature of operations |
Vestel Beyaz Eşya Sanayi ve Ticaret A.Ş. | Turkey | Production |
Vestel Komünikasyon Sanayi ve Ticaret A.Ş. | Turkey | Sales |
Vestel Ticaret A.Ş. | Turkey | Sales |
Vestel CIS Ltd. | Russia | Sales |
Vestel Electronica SRL | Romania | Sales |
Vestel Iberia SL | Spain | Sales |
Vestel France SA | France | Sales |
Vestel Holland BV | Holland | Sales |
Vestel Germany GmbH | Germany | Sales |
Cabot Communications Ltd. | UK | Software |
Vestel Benelux BV | Holland | Sales |
Vestel UK Ltd. | UK | Sales |
Vestek Elektronik Araştırma Geliştirme A.Ş. | Turkey | Software |
Vestel Trade Ltd. | Russia | Sales |
Vestel Electronics Shanghai Trading Co. Ltd | China | Service |
Intertechnika LLC | Russia | Service |
Vestel Central Asia LLP | Kazakhstan | Sales |
Vestel Ventures Ar-ge A.Ş. | Turkey | Service |
Vestel Poland sp. z.o.o. | Poland | Sales |
Vestel Polska Technology Center sp. z o.o. | Poland | Sales |
Vestel Electronics Gulf DMC | UAE | Sales |
Vest Batarya Sistemleri A.Ş. | Turkey | Production |
(*) OY Vestel Scadinavia AB of which Vestel Ticaret A.Ş. is 100% shareholder was liquidated on 10 February, 2020.
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VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD 1 JANUARY - 30 JUNE 2020
(Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
NOTE 1 - GROUP'S ORGANISATION AND NATURE OF OPERATIONS (Cont'd) | ||
Investments | Country | Nature of operations |
Vestel Savunma Sanayi A.Ş. | Turkey | Production/ Sales |
Aydın Yazılım Elektronik ve Sanayi A.Ş. | Turkey | Software |
Meta Nikel Kobalt Madencilik San. ve Tic. A.Ş | Turkey | Mining |
Türkiye'nin Otomobili Girişim Grubu Sanayi ve Ticaret A.Ş | Turkey | Automotive |
NOTE 2 - BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS
2.1 Basis of presentation 2.1.1 Statement of compliance
The accompanying condensed consolidated interim financial statements are prepared in accordance with the Communiqué Serial II, No: 14.1, "Principals of Financial Reporting in Capital Markets" published in the Official Gazette numbered 28676 on 13 June 2013. According to the article 5 of the Communiqué, consolidated financial statements are prepared in accordance with Turkish Accounting Standards / Turkish Financial Reporting Standards ("TAS" / "TFRS") and its addendum and interpretations ("IFRIC") issued by the Public Oversight Accounting and Auditing Standards Authority ("POAASA") Turkish Accounting Standards Board.
The Company and its subsidiaries operating in Turkey maintains its accounting records and prepares its statutory financial statements in accordance with the Turkish Commercial Code ("TCC"), tax legislation and the uniform chart of accounts issued by the Ministry of Finance. The condensed consolidated interim financial statements, except for land, buildings and land improvements and the financial assets and liabilities presented with their fair values, are prepared based on historical costs in TL.
The Group prepared its condensed consolidated interim financial statements for the period ended 30 June 2020 in accordance with ("TAS") 34 "Interim Financial Reporting" in the framework of the Communiqué Serial II, No: 14.1, and its related announcement. The condensed consolidated interim financial statements and its accompanying notes are presented in compliance with the format recommended by CMB including its mandatory information.
In compliance with the TAS 34, entities have preference in presenting their interim financial statements whether full set or condensed. In this framework, the Group preferred to present condensed interim financial statements.
The Group's condensed consolidated interim financial statements do not include all disclosure and notes that should be included at year-end financial statements. Therefore the condensed interim financial statements should be read together with the year-end financial statements.
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VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD 1 JANUARY - 30 JUNE 2020
(Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
NOTE 2 - BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (Cont'd)
2.1.1 Statement of compliance (Cont'd)
Consolidated subsidiaries operating in foreign countries have prepared their financial statements in accordance with the laws and regulations of the countries in which they operate with the required adjustments and reclassifications reflected in accordance with CMB Financial Reporting Standards. These financial statements are based on the statutory records which are maintained under historical cost conversion, with the required adjustments and reclassifications reflected for the purpose of fair presentation in accordance with the TAS/TFRS.
With the decision taken on 17 March 2005, the CMB announced that, effective from 1 January 2005, the application of inflation accounting is no longer required for the companies operating in Turkey and preparing their financial statements in accordance with CMB Financial Reporting Standards. Accordingly, TAS 29, "Financial Reporting in Hyperinflationary Economies" issued by the IASB, has not been applied in the financial statements for the accounting year commencing from 1 January 2005.
2.1.2 Currency used
- Functional and presentation currency
Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates ("functional currency"). The condensed consolidated interim financial statements are prepared and presented in Turkish Lira ("TL"), which is the functional currency of the parent company.
- Transactions and balances
Transactions in foreign currencies have been translated into functional currency at the exchange rates prevailing at the date of the transaction. Exchange gains or losses arising from the settlement and translation of monetary assets and liabilities denominated in foreign currency at the exchange rates prevailing at the balance sheet dates are included in consolidated comprehensive income, except for the effective portion of foreign currency hedge of cash flow and net investment which are included under shareholders' equity.
- Translation of financial statements of subsidiaries operating in foreign countries
Assets and liabilities of subsidiaries operating in foreign countries are translated into TL at the exchange rates prevailing at the balance sheet dates. Comprehensive income items of those subsidiaries are translated into TL using average exchange rates for the period (if the average exchange rates for the period do not reasonably reflect the exchange rate fluctuations, transactions are translated using the exchange rates prevailing at the date of the transaction).
Exchange differences arising from using average and balance sheet date rates are included in "currency translation differences" under the shareholders' equity.
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VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD 1 JANUARY - 30 JUNE 2020
(Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
NOTE 2 - BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (Cont'd)
2.1.2 Currency used (Cont'd)
The balance sheet date rates and average rates used for translation of income statement items for the related periods are as follows:
Period End: | 30 June 2020 31 December 2019 | |
Turkish Lira/EUR | 0,1297 | 0,1504 |
Turkish Lira/GBP | 0,1186 | 0,1286 |
Turkish Lira/RUB | 10,2849 | 10,469 |
Turkish Lira/PLN | 0,5784 | 0,6398 |
Türk Lirası/ USD | 0,1462 | 0,1683 |
Türk Lirası/ KZT | 59,1017 | 64,2674 |
1 January - | 1 January - | |
Average: | 30 June 2020 | 30 June 2019 |
Turkish Lira/EUR | 0,1404 | 0,1578 |
Turkish Lira/GBP | 0,1229 | 0,1380 |
Turkish Lira/RUB | 10,7794 | 11,6944 |
Turkish Lira/PLN | 0,6191 | 0,6768 |
Türk Lirası/ USD | 0,1547 | 0,1782 |
Türk Lirası/ KZT | 59,0884 | 65,7284 |
2.1.3 Basis of consolidation
The consolidated financial statements include the accounts of the Company, and its subsidiaries from the date on which the control is transferred to the Group until the date that the control ceases. The financial statements of the companies included in the scope of consolidation have been prepared as of the date of the consolidated financial statements and have been prepared in accordance with CMB Financial Reporting Standards by applying uniform accounting policies and presentation.
a) Subsidiaries
The Group has control over an entity when it has existing rights that give it the current ability to direct the relevant activities, i.e. the activities that significantly affect the entity's returns. On the other hand, the Group controls an entity when it is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.
In order to be consistent with accounting policies accepted by the Group, accounting policies of the subsidiaries are modified where necessary.
The balance sheet and statement of income of the subsidiaries are consolidated on a line-by-line basis and all material intercompany payable /receivable balances and sales / purchase transactions are eliminated. The carrying value of the investment held by Vestel Elektronik and its subsidiaries is eliminated against the related shareholders' equity.
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VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD 1 JANUARY - 30 JUNE 2020
(Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
NOTE 2 - BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (Cont'd)
2.1.3 Basis of consolidation(Cont'd) a) Subsidiaries(Cont'd)
The non-controlling share in the net assets and results of subsidiaries for the period are separately classified as "non-controlling interest" in the condensed consolidated statements of comprehensive income and the condensed consolidated statements of changes in shareholders' equity.
As of the balance sheet date, consolidated companies and the proportion of ownership interest of Vestel Elektronik in these subsidiaries are disclosed in note 3.
Financial assets in which the Group has direct or indirect voting rights equal to or above 50% which are immaterial to the Group financial results or over which a significant influence is not exercised by the Group are carried at cost less any provisions for impairment.
b) Investments in associates
Investments in associates are accounted for by the equity method and are initially recognized at cost. These are entities in which the Group has an interest which is more than 20% and less than 50% of the voting rights or over which a significant influence is exercised. Unrealized gains on transactions between the Group and its associate are eliminated to the extent of the Group's interest in the associates, whereas unrealized losses are eliminated unless they do not address any impairment of the asset transferred. Net increase or decrease in the net asset of associates is included in the consolidated statements of comprehensive income in regards with the Group's share.
The Group ceases to account the associate using the equity method if it loses the significant influence or the net investment in the associate becomes nil, unless it has entered to a liability or a commitment. After the Group's interest in the associates becomes nil, additional losses are provided for, and a liability recognized, only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate. If the associate subsequently reports profits, the Group resumes including its share of those profits only after its share of the profits equals the share of net losses not recognized.
Since Vestel Savunma and Aydın Yazılım has net liability position as of 30 June 2020 and 2019, carrying value of those investment in associates accounted for by equity method is resulted as nil in the consolidated balance sheets.
The Group's voting rights and effective ownership rates in Vestel Savunma and Aydın Yazılım are
35% and 21% respectively (31 December 2019: 35%, 21%).
The carrying amounts of the investments accounted for using the equity method are reviewed whether there is any indication of impairment at each reporting date. If such an indicator exists, the recoverable amount of the asset is estimated.
The recoverable amount of the investments accounted for using the equity method refers to the higher of value-in-use or fair value less cost to sell. Value-in-use is the present value of future cash flows expected to be generated from an asset or cash generating unit.
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VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD 1 JANUARY - 30 JUNE 2020
(Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
NOTE 2 - BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (Cont'd)
2.1.3 Basis of consolidation(Cont'd) b) Investments in associates(Cont'd)
If the carrying amount of the investments accounted for using the equity method exceeds the recoverable amount, the impairment is accounted for. Impairments are recognized in profit and loss accounts. Impairments are recorded in the statement of profit or loss and other comprehensive income. In investments accounted for using the equity method, impairments allocated in previous periods are re-evaluated in each reporting period in the event that impairment decreases or there are indicators that impairment is not valid. Impairment is reversed in case of changes in the estimates used when determining recoverable amount. The increase in the carrying amount of the investments due to the reversal of the impairment loss is accounted in such a way that it does not exceed the carrying amount determined if the impairment loss has not been included in the consolidated financial statements in the previous years.
2.2 Comparatives
Consolidated financial statements of the Group have been prepared comparatively with the preceding financial period, in order to enable determination of trends in financial position and performance. Comparative figures are reclassified, where necessary, to conform to changes in presentation in the consolidated financial statements.
2.3 Restatement and errors in the accounting estimates
Major changes in accounting policies are applied retrospectively and any major accounting errors that have been detected are corrected and the financial statements of the previous period are restated. Changes in accounting policies resulting from the initial implementation of a new standard, if any, are implemented retrospectively or prospectively in accordance with the transition provisions. If the changes in accounting estimates only apply to one period, then they are applied in the current period in which the change occurred; if the changes also apply to future periods, they are applied in both the period of change and in the future periods, prospectively.
2.4. Amendments in Turkish Financial Reporting Standards
a) Standards issued but not yet effective and not early adopted as at 30 June 2020
A number of new standards, interpretations of and amendments to existing standards are not effective at reporting date and earlier application is permitted; however the Group has not early adopted are as follows.
Classification of Liabilities as Current or Non-current (Amendments to TAS 1)
On 23 January 2020, IASB issued Classification of Liabilities as Current or Non-Currentwhich amends TAS 1 Presentation of Financial Statements to clarify its requirements for the presentation of liabilities in the statement of financial position which is issued by POA on 12 March 2020.
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VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD 1 JANUARY - 30 JUNE 2020
(Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
NOTE 2 - BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (Cont'd)
2.4. Amendments in Turkish Financial Reporting Standards(Cont'd)
The amendments clarify one of the criteria in TAS 1 for classifying a liability as non-current-that is, the requirement for an entity to have the right to defer settlement of the liability for at least 12 months after the reporting period.
The amendments include:
- Specifying that an entity's right to defer settlement must exist at the end of the reporting period;
- Clarifying that classification is unaffected by management's intentions or expectations about whether the entity will exercise its right to defer settlement;
- Clarifying how lending conditions affect classification; and
- Clarifying requirements for classifying liabilities an entity will or may settle by issuing its own equity instruments.
The Group shall apply retrospectively these amendments for annual periods beginning on or after 1 January 2022 with earlier application permitted. However, the amendment published on 15 July 2020, IASB decided to defer the effective date of TAS 1 until 1 January 2023.
The Group does not expect that application of these amendments to TAS 1 will have significant impact on its consolidated financial statements.
Covid-19 related rent concession (Amendments to TFRS 16)
In May 2020, IASB issued Covid-19 related rent concession which amends TFRS 16 Leases which is issued by POA on 5 June 2020 (Amendments to TFRS 16).
The amendments allow lessees not to account for rent concessions as lease modifications if they arise as a direct consequence of COVID-19.
The practical expedient will only apply if:
- the revised consideration is substantially the same or less than the original consideration;
- the reduction in lease payments relates to payments due on or before 30 June 2021
- no other substantive changes have been made to the terms of the lease.
No practical expedient is provided for lessors. Lessors are required to continue to assess if the rent concessions are lease modifications and account for them accordingly.
The Group shall apply these amendments for annual periods beginning on or after 1 June 2020 with earlier application permitted.
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VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD 1 JANUARY - 30 JUNE 2020
(Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
NOTE 2 - BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (Cont'd)
Amendments are effective on 1 January 2020
Changes that have become effective and have been adopted for annual periods beginning on or after 1 January 2022.
The changes that become effective as of January 1, 2020 are as follows:
1-) The revised Conceptual Framework (Version 2018)
2-) Amendments to TFRS 3 - Definition of a Business
The application of the amendment in TFRS 3 did not have a significant impact on the [consolidated] financial statements of the Group
3-) Amendments to TAS 1 and TAS 8 - Definition of Material
The application of the amendment to TAS 1 and TAS 8 does not have a significant impact on the [consolidated] financial statements of the Group.
4-) Interest Rate Benchmark Reform (Amendments to TFRS 9, TAS 39 and TFRS 7)
The application of this amendment is not expected to have a significant impact on the consolidated financial statements of the Group.
The new standards, amendments and interpretations that are issued by the International Accounting Standards Board (IASB) but not issued by POA
Reference to the Conceptual Framework (Amendments to IFRS 3)
In May 2020, IASB issued Reference to the Conceptual Framework, which made amendments to IFRS 3 Business Combinations.
The amendments updated IFRS 3 by replacing a reference to an old version of the Board's Conceptual Framework for Financial Reporting with a reference to the latest version, which was issued in March 2018.
The Group shall apply these amendments for annual periods beginning on or after 1 January 2022 with earlier application permitted.
Property, Plant and Equipment-Proceeds before Intended Use (Amendments to IAS 16)
In May 2020, IASB issued Property, Plant and Equipment-Proceeds before Intended Use, which made amendments to IAS 16 Property, Plant and Equipment. The amendments prohibit a company from deducting from the cost of property, plant and equipment amounts received from selling items produced while the company is preparing the asset for its intended use. Instead, a company will recognise such sales proceeds and related cost in profit or loss.
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VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD 1 JANUARY - 30 JUNE 2020
(Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
NOTE 2 - BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (Cont'd)
The amendments improve transparency and consistency by clarifying the accounting requirements-specifically, the amendments prohibit a company from deducting from the cost of property, plant and equipment amounts received from selling items produced while the company is preparing the asset for its intended use. Instead, a company will recognise such sales proceeds and related cost in profit or loss.
The Group shall apply these amendments for annual periods beginning on or after 1 January 2022 with earlier application permitted.
Onerous Contracts-Cost of Fulfilling a Contract (Amendments to IAS 37)
In May 2020, IASB issued Onerous Contracts-Cost of Fulfilling a Contract, which made amendments to IAS 37 Provisions, Contingent Liabilities and Contingent Assets.
The amendments specify which costs an entity includes in determining the cost of fulfilling a contract for the purpose of assessing whether the contract is onerous.
IASB developed amendments to IAS 37 to clarify that for the purpose of assessing whether a contract is onerous, the cost of fulfilling the contract includes both the incremental costs of fulfilling that contract and an allocation of other costs that relate directly to fulfilling contracts.
The Group shall apply these amendments for annual periods beginning on or after 1 January 2022 with earlier application permitted.
Annual Improvements to IFRS Standards 2018-2020
Improvements to IFRSs
IASB issued Annual Improvements to IFRSs - 2018-2020 Cycle for applicable standards in May 2020. The amendments are effective as of 1 January 2022. Earlier application is permitted. The Group does not expect that application of these improvements to IFRSs will have significant impact on its consolidated financial statements.
IFRS 1 First-time Adoption of International Financial Reporting Standards
This amendment simplifies the application of IFRS 1 for a subsidiary that becomes a first-time adopter of IFRS Standards later than its parent - i.e. if a subsidiary adopts IFRS Standards later than its parent and applies IFRS 1.D16 (a), then a subsidiary may elect to measure cumulative translation differences for all foreign operations at amounts included in the consolidated financial statements of the parent, based on the parent's date of transition to IFRS Standards. This amendment will ease transition to IFRS Standards for subsidiaries applying this optional exemption by i)reducing undue costs; and ii) avoiding the need to maintain parallel sets of accounting records.
IFRS 9 Financial Instruments
This amendment clarifies that - for the purpose of performing the ''10 per cent test' for derecognition of financial liabilities - in determining those fees paid net of fees received, a borrower includes only fees paid or received between the borrower and the lender, including fees paid or received by either the borrower or lender on the other's behalf.
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VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD 1 JANUARY - 30 JUNE 2020
(Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
NOTE 2 - BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (Cont'd)
IFRS 16 Leases, Illustrative Example 13
The amendment removes the illustration of payments from the lessor relating to leasehold improvements. As currently drafted, this example is not clear as to why such payments are not a lease incentive. It will help to remove the potential for confusion in identifying lease incentives in a common real estate fact pattern.
2.5 Summary of significant accounting policies 2.5.1 Revenue recognition
Group recognizes revenue in accordance with TFRS 15 "Revenue from contracts with customers" standard by applying the following five step model:
- Identification of customer contracts
- Identification of performance obligations
- Determination of transaction price in the contract
- Allocation of price to performance obligations
- Recognition of revenue when the performance obligations are fulfilled.
Revenue from sale of goods is recognized when all the following conditions are satisfied:
- The parties to the contract have approved the contract (in writing, orally or in accordance with other customary business practices) and are committed to perform their respective obligations,
- Group can identify each party's rights regarding the goods or services to be transferred,
- Group can identify the payment terms for the goods or services to be transferred,
- The contract has commercial substance,
- It is probable that Group will collect the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer. In evaluating whether collectability of an amount of consideration is probable, an entity shall consider only the customer's ability and intention to pay that amount of consideration when it is due.
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VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD 1 JANUARY - 30 JUNE 2020
(Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
NOTE 2 - BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (Cont'd)
Revenue from sale of goods
Group recognizes revenue based on the production and sale of white goods, consumer electronics, air conditioners and home appliance. Revenue is recognized when the control of the goods is transferred to the customer. In addition, Group provides legal warranty commitment to its customers depending on the type of goods and the location of sale between 1-3 years. These legal warranty commitments are mandatory by regulations, have not a separate price apart from the good and are not separately sold. Therefore, they are not treated as a separate good or service apart from the sale of good.
2.5.2 Inventories
Inventories are stated at the lower of cost and net realizable value. Costs, including an appropriate portion of fixed and variable overhead expenses, are assigned to inventories held by the method most appropriate to the particular class of inventory. Group uses moving weighted average method for costing.
When the net realizable value of inventory is less than cost, the inventory is written down to the net realizable value and the expense is included in statement of income in the period the write-down or loss occurred.
When the circumstances that previously caused inventories to be written down below cost no longer exist or when there is clear evidence of an increase in net realizable value because of changed economic circumstances, the amount of the write-down is reversed. The reversal amount is limited to the amount of the original write-down.
2.5.3 Property, plant and equipment
Land, land improvements and buildings are stated at fair value, based on valuations performed as at 31 December 2018 by professional independent valuer approved by CMB and registered in CMB "Real Estate Appraisal Companies", Çelen Kurumsal Gayrimenkul Değerleme ve Danışmanlık A.Ş.
Any accumulated depreciation at the date of revaluation is eliminated against the gross carrying amount of the relevant asset, and the net amount is the revalued amount of the asset.
Property, plant and equipment except for land, land improvements and buildings acquired before 1 January 2005 are carried at cost in the equivalent purchasing power of TL as at 31 December 2004 and items acquired after 1 January 2005 are carried at cost, less accumulated amortization and impairment losses, if any.
Any revaluation increase arising on the revaluation of such land, land improvements and buildings is credited in equity to the revaluation reserve, except to the extent that it reverses a revaluation decrease for the same asset previously recognized in profit or loss, in which case the increase is credited to profit or loss to the extent of the decrease previously charged. A decrease in carrying amount arising on the revaluation of such land, land improvements and buildings is charged to profit or loss to the extent that it exceeds the balance, if any, held in the properties revaluation reserve relating to a previous revaluation of that asset. Depreciation on revalued land improvements and buildings is charged to profit or loss.
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VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD 1 JANUARY - 30 JUNE 2020
(Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
NOTE 2 - BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (Cont'd)
Each period, the difference between depreciation based on the revalued carrying amount of the asset (the depreciation charged to the statements of comprehensive income) and the depreciation based on the asset's original cost is transferred from revaluation reserves to the retained earnings.
Land is not depreciated. Plant and equipment are carried at cost less accumulated depreciation and any accumulated impairment losses.
Depreciation is charged so as to write off the cost or valuation of assets, other than land and properties under construction, over their estimated useful lives, using the straight-line method. The estimated useful lives, residual values and depreciation method are reviewed at each year end, with the effect of any changes in estimate accounted for on a prospective basis.
Property, plant and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use.
Gains or losses on disposals of property, plant and equipment are determined by reference to their carrying amounts and are included in the related income and expense accounts, as appropriate. On the disposal of revalued assets, amounts in the revaluation reserve relating to that asset are transferred to the retained earnings.
Subsequent costs such as repairs and maintenance or part replacement of plant and equipment are included in the asset's carrying value or recognized as separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the company. All other costs are charged to the statements of comprehensive income during the financial period in which they are incurred.
Leases
The Group - as a lessee
At inception of a contract, the Group assesses whether a contract is, or contains a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset. The Group assess whether:
- The contract involved the use of an identified asset - this may be specified explicitly or implicitly.
- The asset should be physically distinct or represent substantially all of the capacity of a physically distinct asset, If the supplier has a substantive substitution right, the asset is not identified.
- The Group has the right to obtain substantially all of the economic benefits from the use of an asset throughout the period of use; and
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VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD 1 JANUARY - 30 JUNE 2020
(Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
NOTE 2 - BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (Cont'd)
- The Group has the right to direct use of the asset, The Group concludes to have the right of use, when it is predetermined how and for what purpose the Group will use the asset. The Group has the right to direct use of asset if either:
- The Group has the right to operate (or to have the right to direct others to operate) the asset over its useful life and the lessor does not have the rights to change the terms to operate or;
- The Group designed the asset (or the specific features) in a way that predetermines how and for what purpose it is used
At inception or on reassessment of a contract that contains a lease component, the Group allocates the consideration in the contract to each lease component on the basis of their relative stand-alone prices.
The group rents various buildings, warehouses, forklifts and machinery equipment. Rental contracts are generally made for 5 years for machinery and equipment, and for fixed periods for warehouses, usually between 2 and 10 years.
Lease Liability
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date. Lease liabilities are discounted to present value by using the interest rate implicit in the lease if readily determined or with the Group's incremental borrowing rate.
Lease payments included in the measurement of the lease liability comprise the following:
- Fixed payments, including in-substance fixed payments;
- Variable lease payments that depend on an index or a rate, initially measured using the index or rate as the commencement date.
- The exercise price under a purchase option that the Group is reasonably certain to exercise, lease payments in an optional renewable period if the Group is reasonably certain to exercise an extension option. and penalties for early termination of a lease unless the Group is reasonably certain to terminate early.
After initial recognition, the lease liability is measured:
- Increasing the carrying amount to reflect interest on lease liability,
- Reducing the carrying amount to reflect the lease payments made and
- Remeasuring the carrying amount to reflect any reassessment or lease modifications or to reflect revised in-substance fixed lease payments.
The duration of the contracts, which constitute the lease obligation of the company, varies between 1 - 10 years.
The Group - as a lessor
The Group's activities as a lessor are not material.
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VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD 1 JANUARY - 30 JUNE 2020
(Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
NOTE 2 - BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (Cont'd)
Right of use assets:
The cost of the right-of-use asset comprises:
- the amount of the initial measurement of the lease liability,
- any lease payments made at or before the commencement date, less any lease incentives received,
- any initial direct costs incurred by the Group
To apply the cost model, the Group measures the right-of-use asset at cost less any accumulated depreciation and any accumulated impairment losses and adjusted for any remeasurement of the lease liability. The Group applies the depreciation requirements in TAS 16 Property, Plant and Equipment in depreciating the right-of-use asset.
2.5.4 Intangible assets
a) Research and development costs
Research costs are recognized as expense in the period in which they are incurred. Intangible assets arising from development (or from the development phase of an internal project) are recognized as intangible assets when the following criteria are met;
- It is technically feasible to complete the intangible asset so that it will be available for use;
- Management intends to complete the intangible asset and use or sell it;
- There is an ability to use or sell the intangible asset;
- It can be demonstrated how the intangible asset will generate probable future economic benefits;
- Adequate technical, financial and other resources to complete the development and to use or sell the intangible asset are available; and
- The expenditure attributable to the intangible asset during its development can be reliably measured.
In other cases, development costs are expensed as incurred. Development costs previously recognized as an expense are not recognized as an asset in a subsequent period. In cases where it is difficult to separate the research phase from the development phase in a project, the entire project is treated as research and expensed immediately.
b) Rights and other intangible assets
Rights and other intangible assets consist of acquired computer software, computer software development costs and other identifiable rights. Rights and other intangible assets are recognized at their acquisition costs and are amortized on a straight line basis over their expected useful lives which are less than fifteen years.
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VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD 1 JANUARY - 30 JUNE 2020
(Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
NOTE 2 - BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (Cont'd)
c) Goodwill
Goodwill arising on acquisition is the excess of the cost of acquisition over the Group's interest in the fair value of the identifiable assets and liabilities recognized. Within the scope of TFRS 3 "Business Combinations", beginning from 1 January 2005 the Group has stopped amortizing goodwill. Goodwill recognized on acquisitions before 31 December 2004 was being amortized until 31 December 2004 on a straight line basis over their useful lives not to exceed twenty years.
Goodwill is tested for impairment annually or more frequently when there is an indication of impairment. Goodwill arising on acquisitions measured at cost less any impairment losses.
Impairment losses calculated on goodwill cannot be reversed in the statement of income even if the impairment ceases to exist in the following periods. Goodwill is linked to cash generating units during the impairment test.
In case the consideration transferred in a business combination includes any contingent considerations, the Group recognizes the acquisition date fair value of the contingent consideration as part of the consideration transferred. During the measurement period, contingent considerations recognized at the acquisition date fair value are retrospectively adjusted when necessary. The measurement period is the period after the acquisition date during which the acquirer may adjust the provisional amounts recognized for a business combination. This period shall not exceed one year from the acquisition date.
If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the acquirer shall report in its financial statements provisional amounts for the items for which the accounting is incomplete. The provisional amounts are adjusted during the measurement period or additional assets or liabilities are recognized to reflect new information obtained about facts and circumstances that existed as of the acquisition date and, if known, would have resulted in the recognition of those assets and liabilities as of that date.
2.5.5 Financial instruments a) Financial assets
The Group recognizes its financial assets in three categories: financial assets that are recognized at amortized cost, whose fair value is reflected in profit or loss, and whose fair value is reflected in the other comprehensive income. Classification is made on the basis of the business model determined according to the purpose of benefiting from financial assets and the expected cash flows. The Group classifies its financial assets on the date of purchase.
Financial assets carried at amortized cost
Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest, whose payments are fixed or predetermined, which are not actively traded and which are not derivative instruments are measured at amortized cost.
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VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD 1 JANUARY - 30 JUNE 2020
(Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
NOTE 2 - BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (Cont'd)
2.5.5 Financial instruments(Cont'd)
The Group's financial assets carried at amortized cost comprise "trade receivables" and "cash and cash equivalents" in the statement of financial position.
Group has applied simplified approach and used impairment matrix for the calculation of impairment on its receivables carried at amortized cost, since they do not comprise of any significant finance component. In accordance with this method, if any provision to the trade receivables as a result of a specific event, Group measures expected credit loss from these receivables by the life-time expected credit loss. The calculation of expected loss is performed based on the past experience of the Group and its expectations for the future indications.
Financial assets carried at fair value
Assets that are held by the Group for collection of contractual cash flows and for selling the financial assets are measured at their far value.
Impairment of financial assets
Impairment of the financial and contractual assets measured by using "expected credit loss model" . The impairment model applies for amortized financial and contractual assets.
Group has preferred to apply "simplified approach" for the recognition of impairment losses on trade receivables, carried at amortized cost and that do not comprise of any significant finance component (those with maturity less than 12 months). In accordance with the simplified approach, Group measures the loss allowances regarding its trade receivables at an amount equal to "lifetime expected credit losses" except incurred credit losses in which trade receivables are already impaired for a specific reason.
b) Financial liabilities
Financial liabilities are measured initially at fair value. Transaction costs which are directly related to the financial liability are added to the fair value.
c) Derivative financial instruments and hedge accounting
Derivatives are initially recognized at fair value on the date a derivative contract is entered into and are subsequently remeasured at their fair value.
The derivative instruments of the Group mainly consist of foreign exchange forward contracts. These derivative transactions which are treated as derivatives held for trading in the financial statements under risk accounting, do not generally qualify for hedge accounting under the specific rules. The fair value changes for these derivatives are recognised in the profit or loss statement.
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VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD 1 JANUARY - 30 JUNE 2020
(Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
NOTE 2 - BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (Cont'd)
The hedging transactions of the Group that qualify for hedge accounting are accounted regarding to TFRS 9. As TFRS 9 does not change the general principles of how an entity accounts for effective hedges, applying the hedging requirements of TFRS 9 will not have a significant impact on Group's financial statements.
Cash flow hedges:
As long as a cash flow hedge meets the qualifying criteria, the hedging relationship shall be accounted for as follows:
- the separate component of equity associated with the hedged item (cash flow hedge reserve) is adjusted to the lower of the following (in absolute amounts):
- the cumulative gain or loss on the hedging instrument from inception of the hedge; and (ii) the cumulative change in fair value (present value) of the hedged item (i.e. the present value of the cumulative change in the hedged expected future cash flows) from inception of the hedge.
- the portion of the gain or loss on the hedging instrument that is determined to be an effective hedge shall be recognised in other comprehensive income.
- any remaining gain or loss on the hedging instrument is hedge ineffectiveness that shall be recognised in profit or loss.
2.5.6 Foreign currency transactions
Transactions in foreign currencies during the period are recorded at the rates of exchange prevailing on the dates of the transactions. Monetary items denominated in foreign currencies are translated to TL at the rates prevailing on the balance sheet date. Exchange differences on foreign currency denominated monetary assets and liabilities are recognized in profit or loss in the period in which they arise except for the effective portion of the foreign currency hedge of net investments in foreign operations. Monetary items which are denominated in foreign currency and measured with historical costs are translated using the exchange rates at the dates of initial transactions.
For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group's foreign operations are expressed in TL using exchange rates prevailing on the balance sheet date. Income and expense items are translated at the average exchange rates for the period, unless exchange rates fluctuated significantly during that period. Exchange differences arising are recognized in other comprehensive income and in equity.
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VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD 1 JANUARY - 30 JUNE 2020
(Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
NOTE 2 - BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (Cont'd)
On the disposal of a foreign operation, all of the exchange differences accumulated in equity in respect of that operation attributable to the owners of the company are reclassified to profit or loss.
2.5.7 Provisions, contingent assets and liabilities
Provisions are recognized when the Group has a present obligation as a result of a past event, and it is probable that the Group will be required to settle that obligation, and a reliable estimate can be made of the amount of the obligation.
Possible assets or obligations that arise from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain events not wholly within the control of the Group are not included in the consolidated financial statements and treated as contingent assets or liabilities.
2.5.8 Warranty and assembly expenses provision
Warranty expenses include repair and maintenance expenses of products sold and labor and material costs of authorized services for products under the scope of warranty terms without any charge to the customers. Based on estimations using past statistical information, warranty expense provision is recognized for the products sold with warranty terms in the period, for possible repair and maintenance expenses to be incurred during the warranty period.
Based on estimations using past statistical information, assembly expenses provision is recognized for products sold during the period but not yet installed in the sites of the end customers, against the cost of free of charge installments.
2.5.9 Related parties
Shareholders, key management personnel and board members, their close family members and companies controlled, jointly controlled or significantly influenced by them and Zorlu Holding Group companies are considered and referred to as related parties.
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VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD 1 JANUARY - 30 JUNE 2020
(Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
NOTE 2 - BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (Cont'd)
2.5.10 Taxation on income
Tax expense for the period comprises current and deferred tax. Tax is recognized in the income statement, except to the extent that it relates to items directly recognized in equity. In that case, tax is recognized in shareholders' equity.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.
Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases which is used in the computation of taxable profit. Deferred tax liabilities are generally recognized for all taxable temporary differences and deferred tax assets are recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized.
Investment incentives that are conducive to payment of corporate taxes at reduced rates are subject to deferred tax calculation when there is reasonable assurance that the Group will benefit from the related incentive.
Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries and associates, and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognized to the extent that it is probable that there will be sufficient taxable profits against which to utilize the benefits of the temporary differences and they are expected to reverse in the foreseeable future.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.
31
VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD 1 JANUARY - 30 JUNE 2020
(Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
NOTE 2 - BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (Cont'd)
2.5.11 Employee benefits
Employment termination benefits, as required by the Turkish Labor Law and the laws applicable in the countries where the subsidiaries operate, represent the estimated present value of the total reserve of the future probable obligation of the Group arising in case of the retirement of the employees. According to Turkish Labor Law and other laws applicable in Turkey, the Group is obliged to pay employment termination benefits to all personnel in cases of termination of employment without due cause, call for military service, be retired or death upon the completion of a minimum one year service. Employment termination benefits are considered as being part of defined retirement benefit plan as per TAS 19. All actuarial gains and losses are recognized in consolidated statements of income.
The effects of the significant forecasts used in employment termination benefits provision calculations have been recognized as actuarial gains and losses and they have been explained in the relevant note.
2.5.12 Government grants
Government grants, including non-monetary grants at fair value, are recognized in consolidated financial statements when there is reasonable assurance that the entity will comply with the conditions attaching to them, and the grants will be received.
Incentives for research and development activities are recognized in consolidated financial statements when they are authorized by the related institutions.
2.5.13 Earnings per share
Earnings per share disclosed in the consolidated statement of income is determined by dividing consolidated net income attributable to equity holder of the parent by the weighted average number of such shares outstanding during the year concerned.
2.5.14 Statement of cash flows
In the consolidated statement of cash flows, cash flows are classified into three categories as operating, investment and financing activities. Cash flows from operating activities are those resulting from the Group's production and sales activities. Cash flows from investment activities indicate cash inflows and outflows resulting from property, plant and equipments and financial investments. Cash flows from financing activities indicate the resources used in financing activities and the repayment of these resources. Cash and cash equivalents comprise of cash in hand accounts, bank deposits and short-term, highly liquid investments that are readily convertible to known amounts of cash with maturities equal or less than three months.
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VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD 1 JANUARY - 30 JUNE 2020
(Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
NOTE 2 - BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (Cont'd)
2.5.15 Segment reporting
Operating segments are identified on the same basis as financial information is reported internally to the Group's chief operating decision maker. The Group Board of Directors has been identified as the Group's chief operating decision maker who is responsible for allocating resources between segments and assessing their performances. The Group management determines operating segments by reference to the reports reviewed by the Board of Directors to make strategical decisions.
The Group management evaluates the operational results at industrial and geographical level. An operating segment is a component of an entity that engages in business activities from which it may earn revenues and incur expenses.
Group's operations are reported under three industrial segments:
- Television and electronic devices
- White goods
- Other
Group's operations are reported under three geographical segments:
- Turkey
- Europe
- Other
2.5.16 Offsetting
All items with significant amounts and nature, even with similar characteristics, are presented separately in the financial statements. Insignificant amounts are grouped and presented by means of items having similar substance and function. When the nature of transactions and events necessitate offsetting, presentation of these transactions and events over their net amounts or recognition of the assets after deducting the related impairment are not considered as a violation of the rule of non-offsetting. As a result of the transactions in the normal course of business, revenue other than sales are presented as net if the nature of the transaction or the event qualify for offsetting.
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VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD 1 JANUARY - 30 JUNE 2020
(Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
NOTE 2 - BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (Cont'd)
2.5.17 Events after the balance sheet date
Events after the balance sheet date, announcements related to net profit or even declared after other selective financial information has been publicly announced, include all events that take place between the balance sheet date and the date when balance sheet was authorized for issue.
In the case that events require a correction to be made occur subsequent to the balance sheet date, the Group makes the necessary corrections to the financial statements. Moreover, the events that occur subsequent to the balance sheet date and that do not require a correction to be made are disclosed in accompanying notes, where the decisions of the users of financial statements are affected.
2.5.18 Going Concern
The Group prepared consolidated financial statements in accordance with the going concern assumption.
2.6. Critical accounting estimates and judgments
Preparation of consolidated financial statements requires the use of estimates and assumptions that may affect the amount of assets and liabilities recognized as of the balance sheet date, disclosures of contingent assets and liabilities and the amount of revenue and expenses reported. Although these estimates and assumptions rely on the Group management's best knowledge about current events and transactions, actual outcomes may differ from those estimates and assumptions. Significant estimates of the Group management are as follows:
- Revaluation of land, buildings and land improvements:
Land, land improvements and buildings are stated at fair value, based on valuations performed at 31 December 2018 by professional independent valuer Çelen Kurumsal Gayrimenkul Değerleme ve Danışmanlık A.Ş. (Note 14).
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VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD 1 JANUARY - 30 JUNE 2020
(Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
NOTE 2 - BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (Cont'd)
As there were no recent similar buying/selling transactions nearby, revaluations of land were based on the method of reference comparison whereas revaluations of buildings and land improvements and machinery and equipment were based on the method of cost approach and based on the following valuation techniques and assumptions:
- Revaluations of land were based on the method of reference comparison whereas revaluations of buildings and land improvements were based on the method of cost approach, considering existing utilization of the aforementioned property, plant and equipments are consistent to the highest and best use approach.
- In the market reference comparison method, current market information was utilized, taking into consideration the comparable property in the market in recent past in the region, price adjustment was made within the framework of criteria that could affect market conditions, and accordingly an average m2 sale value was determined for the lands subject to the valuation. The similar pieces of land found were compared in terms of location, size, settlement status, physical conditions, real estate marketing firms were consulted for up-to-date valuation of the estate market, also, current information and experience of the professional valuation company was utilized.
- In the cost approach method, fair value of the buildings and land improvements was calculated by considering recent re-construction costs and related depreciation. In the cost approach method, above explained market reference comparison method was used in calculation of the land value, one of the components.
The carrying values of land, land improvements and buildings do not necessarily reflect the amounts that would result from the outcome of a sales transaction between independent parties.
As of initial recognition and as of balance sheet date, the Group performs impairment assessment for buildings and land improvements of which valuations are based on cost approach, accordance with the TAS 36 "Impairment of Assets", and no impairment indicator is identified.
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VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD 1 JANUARY - 30 JUNE 2020
(Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
NOTE 3 - INTERESTS IN OTHER ENTITIES
Subsidiaries:
As of 30 June 2020 and 31 December 2019 the Group's significant subsidiaries are as follows:
30 June 2020 | 31 December 2019 | |||
Voting | Effective | Voting | Effective | |
Consolidated subsidiaries | rights | ownership | rights | ownership |
Vestel Beyaz Eşya Sanayi ve Ticaret A.Ş. (*) | 92,5 | 92,5 | 95,2 | 95,2 |
Vestel Komünikasyon Sanayi ve Ticaret A.Ş. | 100 | 100 | 100 | 100 |
Vestel Ticaret A.Ş. | 100 | 100 | 100 | 100 |
Vestel CIS Ltd. | 100 | 100 | 100 | 100 |
Vestel Iberia SL | 100 | 100 | 100 | 100 |
Vestel France SA | 100 | 100 | 100 | 100 |
Vestel Holland BV | 100 | 100 | 100 | 100 |
Vestel Germany GmbH | 100 | 100 | 100 | 100 |
Cabot Communications Ltd. | 90,8 | 90,8 | 90,8 | 90,8 |
Vestel Benelux BV | 100 | 100 | 100 | 100 |
Vestel UK Ltd. | 100 | 100 | 100 | 100 |
Vestek Elektronik Araştırma Geliştirme A.Ş. | 100 | 100 | 100 | 100 |
Vestel Trade Ltd. | 100 | 100 | 100 | 100 |
OY Vestel Scandinavia AB | 100 | 100 | 100 | 100 |
Intertechnika LLC | 99,9 | 99,9 | 99,9 | 99,9 |
Vestel Central Asia LLP | 100 | 100 | 100 | 100 |
Vestel Poland sp. z.o.o. | 100 | 100 | 100 | 100 |
Vestel Polska Technology Center sp. z o.o. | 100 | 100 | 100 | 100 |
- Vestel Elektronik Sanayi ve Ticaret A.Ş. sold 5,000,000 Vestel Beyaz Eşya Sanayi ve Ticaret A.Ş. shares on Borsa Istanbul on 29 June 2020. Following the transaction, Vestel Elektronik Sanayi ve
Ticaret A.Ş.'s share in Vestel Beyaz Eşya declined to 92.54%.
Financial information of Vestel Beyaz Eşya Sanayi ve Ticaret A.Ş. which is not wholly owned by the
Group and has significant non-controlling interests is as follows.
30 June 2020 31 December 2019
Accumulated non-controlling interests | 166.460 | 94.414 |
Comprehensive income attributable to | ||
non-controlling interests | 25.217 | 27.485 |
The financial statements of the subsidiary is adjusted to include the effects of revaluation of land,
buildings and land improvements in accordance with the Group's accounting policies applied in
preparation of the consolidated financial statements.
36
VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD 1 JANUARY - 30 JUNE 2020
(Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
NOTE 3 - INTERESTS IN OTHER ENTITIES (Cont'd)
Condensed balance sheet:
30 June 2020 31 December 2019
Current assets | 3.422.875 | 3.167.744 |
Non-current assets | 1.940.963 | 1.816.058 |
Current liabilities | (2.962.520) | (2.991.718) |
Non-current liabilities | (255.500) | (185.856) |
Net assets | 2.145.818 | 1.806.228 |
Condensed statement of comprehensive income: | ||
1 January - | 1 January - | |
30 June | 30 June | |
2020 | 2019 | |
Net sales | 3.510.378 | 3.203.318 |
Income / (loss) before tax | 348.425 | 314.404 |
Tax benefit / (expense) | 2.295 | 3.957 |
Net income / (loss) for the period | 350.720 | 318.361 |
Total comprehensive income | 339.590 | 317.801 |
Condensed statement of cash flows: | ||
Operating activities: | ||
Changes in working capital | (343.736) | (132.930) |
Net cash provided by operating activities | 183.004 | 246.443 |
Investing activities: | ||
Net cash used in investing activities | 11.089 | 8.522 |
Financing activities: | ||
Proceeds from bank borrowings | 573.242 | 751.446 |
Repayment of bank borrowings | (603.536) | (524.349) |
Other payables to related parties | - | 566.828 |
Net cash (used in) / provided by financing activities | (119.216) | (319.580) |
Cash and cash equivalents at the beginning of the period | 82.287 | 103.283 |
Cash and cash equivalents at the end of the period | 157.164 | 34.662 |
The financial information of Company's 50% associate META which is accounted for using the equity method, is disclosed in note 13.
Other financial information of Group's subsidiaries are not presented on the grounds of materiality.
37
VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD 1 JANUARY - 30 JUNE 2020
(Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
NOTE 4 - SEGMENT REPORTING
Operating segments are identified on the same basis as financial information is reported internally to the Group's chief operating decision maker. The Group Board of Directors has been identified as the Group's chief operating decision maker who is responsible for allocating resources between segments and assessing their performances. The Group management determines operating segments by reference to the reports reviewed by the Board of Directors to make strategical decisions.
Considering the fact that the Group's risks and rate of returns are dissimilar between product types and between geographical areas, The Group management uses industrial segments as primary reporting format and geographical segments as secondary reporting format.
Industrial segments
Television and | |||
electronic | |||
devices | White goods | Total | |
1 January -30 June 2020 | |||
Revenue | 3.653.861 | 4.700.738 | 8.354.599 |
Cost of sales | (2.771.781) | (3.270.326) | (6.042.107) |
Gross profit | 882.080 | 1.430.412 | 2.312.492 |
Depreciation and amortization | 164.417 | 175.771 | 340.188 |
1 January -30 June 2019 | |||
Revenue | 3.738.362 | 4.087.605 | 7.825.967 |
Cost of sales | (2.765.497) | (3.024.382) | (5.789.879) |
Gross profit | 972.865 | 1.063.223 | 2.036.088 |
Depreciation and amortization | 153.171 | 146.065 | 299.236 |
1 April -30 June 2020 | |||
Revenue | 1.933.954 | 2.489.843 | 4.423.797 |
Cost of sales | (1.513.675) | (1.716.841) | (3.230.516) |
Gross profit | 420.279 | 773.002 | 1.193.281 |
Depreciation and amortization | 79.030 | 114.559 | 193.589 |
38
VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD 1 JANUARY - 30 JUNE 2020
(Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
NOTE 4 - SEGMENT REPORTING (Cont'd)
Television and | |||
electronic | |||
devices | White goods | Total | |
1 April -30 June 2019 | |||
Revenue | 1.946.135 | 2.317.299 | 4.263.434 |
Cost of sales | (1.410.119) | (1.626.870) | (3.036.989) |
Gross profit | 536.016 | 690.429 | 1.226.445 |
Depreciation and amortization | 83.020 | 68.204 | 151.224 |
Capital expenditure | |||
Television and | |||
electronic | |||
devices | White goods | Total | |
1 January -30 June 2020 | 200.782 | 174.976 | 375.758 |
1 January -30 June 2019 | 139.346 | 154.983 | 294.329 |
Geographical segments:
1 January - | 1 January - | 1 April - | 1 April - | ||
30 June | 30 June | 30 June | 30 June | ||
Segment revenue | 2020 | 2019 | 2020 | 2019 | |
Turkey | 2.702.051 | 1.941.445 | 1.587.015 | 1.125.770 | |
Europe | 5.876.792 | 5.757.232 | 3.109.095 | 3.028.473 | |
Other | 510.200 | 717.704 | 139.287 | 423.332 | |
Gross segment sales | 9.089.043 | 8.416.381 | 4.835.397 | 4.577.575 | |
Discounts (-) | (734.444) | (590.414) | (411.600) | (314.141) | |
Net sales | 8.354.599 | 7.825.967 | 4.423.797 | 4.263.434 | |
The amount of export for the | period 1 January - 30 June | 2020 is TL 6.386.992 thousand |
(1 January - 30 June 2019: TL 6.474.936 thousand). Export sales are denominated in EUR, USD and other
currencies as 63,7%, 27,5%, and 8,8% of total exports respectively. (1 January - 30 June 2019: 64,7% EUR, 26,2 % USD, 9,1 % other)
The carrying value of segment assets and costs incurred in order to obtain these assets are not separately disclosed since significant portion of assets of the Group are located in Turkey.
39
VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD 1 JANUARY - 30 JUNE 2020
(Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
NOTE 5 - CASH AND CASH EQUIVALENTS
30 June 2020 31 December 2019
Cash | 1.870 | 1.618 |
Bank deposits | 2.344.480 | 2.167.320 |
- Demand deposits | 2.318.474 | 2.104.712 |
- Time deposits | 26.006 | 62.608 |
Cheques and notes | 72.570 | 93.401 |
Other | 56.308 | 20.701 |
Blocked deposits | 55.230 | 111.294 |
Cash and cash equivalents | 2.530.458 | 2.394.334 |
Effective interest rates(%) | ||
30 June 2020 31 December 2019 | ||
USD | - | 1,00 |
EUR | 4,00 | 0,00 |
PLN | 7,50 | 8,93 |
KZT | - | 9,50 |
As of 30 June 2020 and 31 December 2019 the Group's time deposits have an average maturity of less than 3 months.
NOTE 6 - FINANCIAL ASSETS
Ownership(%) | Amount | ||||
30 June 31 December | 30 June 31 December | ||||
Country | 2020 | 2019 | 2020 | 2019 | |
Financial assets available for sale: | |||||
Zorlu Enerji Elektrik Üretim A.Ş. | Turkey | < 1 | < 1 | 13.337 | 13.337 |
Tursoft A.Ş. | Turkey | 7 | 7 | 11 | 11 |
Zorlu Endüstriyel Enerji A.Ş. | Turkey | 1 | 1 | 51 | 51 |
İzmir Teknoloji Geliştirme A.Ş. | Turkey | 5 | 5 | 11 | 11 |
Other | Turkey | - | - | 200 | 200 |
13.610 | 13.610 |
40
VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD 1 JANUARY - 30 JUNE 2020
(Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
NOTE 6 - FINANCIAL ASSETS (Cont'd)
Ownership(%) | Amount | ||||
30 June | 31 December | 30 June | 31 December | ||
Non-consolidated subsidiaries : | Country | 2020 | 2019 | 2020 | 2019 |
Vestel Ventures Ar-ge A.Ş. | Turkey | 100,00 | 100,00 | 60.095 | 54.115 |
Vestel Electronics Gulf DMC | UAE | 100,00 | 100,00 | 1.409 | 1.409 |
Vestel Electronica SRL | Romania | 100,00 | 100,00 | 1.778 | 1.778 |
Vestel Electronics Shanghai | |||||
Trading Co. Ltd | China | 100,00 | 100,00 | 751 | 751 |
Vest Batarya Sistemleri A.Ş. | Turkey | 100,00 | 100,00 | 50 | 50 |
Other | 100,00 | 100,00 | 6 | 6 |
64.089 | 58.109 | |
Impairment of subsidiaries (-) | ||
Vestel Electronica SRL | (1.778) | (1.778) |
62.311 | 56.331 | |
NOTE 7 - FINANCIAL LIABILITIES
30 June 2020 | 31 December 2019 | |
Short term financial liabilities | ||
Short term bank loans | 5.078.967 | 5.766.814 |
Short term portion of long term bank loans | 1.819.367 | 1.411.361 |
Short term lease liabilities | 87.255 | 64.021 |
6.985.589 | 7.242.196 | |
Long term financial liabilities | ||
Long term bank loans | 1.375.957 | 456.424 |
Long term lease liabilities | 116.439 | 111.657 |
1.492.396 | 568.081 |
41
VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD 1 JANUARY - 30 JUNE 2020
(Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
NOTE 7 - FINANCIAL LIABILITIES (Cont'd)
Details of the Group's short term bank loans are given below:
30 June 2020 | 31 December 2019 | |||||
Weighted | Weighted | |||||
average of | average of | |||||
effective interest | Original | TL | effective interest | Original | ||
Currency | rates per annum | currency | Equivalent | rates per annum | currency | TL Equivalent |
- USD | 0,03 | 240.384 | 1.644.757 | 0,04 | 231.736 | 1.376.559 |
- EUR | 0,02 | 196.222 | 1.512.515 | 0,03 | 214.139 | 1.424.156 |
- TL | 0,13 | 1.921.695 | 1.921.695 | 0,20 | 2.966.099 | 2.966.099 |
5.078.967 | 5.766.814 | |||||
Details of the Group's long term bank loans are given below:
30 June 2020 | 31 December 2019 | |||||
Weighted | Weighted | |||||
average of | average of | |||||
effective interest | Original | TL | effective interest | Original | ||
Currency | rates per annum | currency | Equivalent | rates per annum | currency | TL Equivalent |
- USD | 0,06 | 51.514 | 352.472 | 0,07 | 62.298 | 370.065 |
- EUR | 0,06 | 11.180 | 86.177 | 0,05 | 18.681 | 124.239 |
- TL | 0,16 | 1.380.718 | 1.380.718 | 0,26 | 917.057 | 917.057 |
Short term portion | 1.819.367 | 1.411.361 | ||||
- USD | 0,05 | 33.126 | 226.655 | 0,09 | 41.054 | 243.871 |
- EUR | 0,06 | 13.740 | 105.914 | 0,06 | 18.619 | 123.825 |
- TL | 0,16 | 1.043.388 | 1.043.388 | 0,17 | 88.728 | 88.728 |
Long term portion | 1.375.957 | 456.424 | ||||
3.195.324 | 1.867.785 | |||||
Total amount of Group's floating bank loans is TL 1.716.402 thousand (31 December 2019: TL 480.738 thousand).
42
VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD 1 JANUARY - 30 JUNE 2020
(Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
NOTE 7 - FINANCIAL LIABILITIES (Cont'd)
The maturity schedule of Group's long term bank loans is given below:
Uzun vadeli finansal borçların ödeme planı | 30 June 2020 | 31 December 2019 |
One to two years | 1.262.742 | 269.599 |
Two to three years | 94.718 | 162.200 |
Three to four years | 13.201 | 14.045 |
Four years and over | 5.296 | 10.580 |
1.375.957 | 456.424 |
The analysis of Group's bank loans in terms of periods remaining to contractual re-pricing dates is as follows:
30 June 2020 31 December 2019
6 months or less | 1.716.402 | 480.738 |
1.716.402480.738
Guarantees given for the bank loans obtained are presented in note 17.
Fair values of short term bank borrowings are considered to approximate their carrying values due to immateriality of discounting. Fair values are determined using average effective annual interest rates. Long term bank borrowings are stated at amortized cost using effective interest rate method and their fair values are considered to approximate their carrying values since loans usually have a re-pricing period of six months.
As of 30 June 2020 and 2019, the Group's net financial debt reconciliation is shown below:
30 June 2020 | 30 June 2019 | |
Net financial debt as of 1 January | 5.527.237 | 4.898.069 |
Cash inflows from loans | 3.746.293 | 2.371.024 |
Cash outflows from loan payments | (3.321.116) | (2.017.942) |
Payments of lease liabilities | (10.458) | 145.529 |
Unrealized Fx gain/loss | 222.899 | 228.235 |
Accrued interest | 287.846 | 84.054 |
Change in cash and cash equivalents | (192.188) | (65.512) |
Net financial debt at the end of the period | 6.260.513 | 5.643.457 |
43
VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD 1 JANUARY - 30 JUNE 2020
(Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
NOTE 8 - RELATED PARTY DISCLOSURES
- Short term trade receivables from related parties
30 June 2020 31 December 2019
Vestel Central Asia | 6.200 | - |
Vestel Electronica S.R.L. (3) | 16.138 | 19.255 |
Zorluteks Tekstil Sanayi ve Ticaret A.Ş. | 371 | 3.415 |
Vestel Electronics Gulf DMCC . (3) | 21.256 | 15.812 |
Other related parties | 18.978 | 17.328 |
62.943 | 55.810 | |
b) Short term trade payables to related parties | ||
30 June 2020 | 31 December 2019 | |
Vestel Electronics Shanghai Trading Co. Ltd. (3) | 2.177 | 2.072 |
ABH Turizm Temsilcilik ve Ticaret A.Ş. (1) | 605 | 3.094 |
Other related parties | 2.709 | 2.664 |
5.491 | 7.830 | |
c) Other short term receivables from related parties | ||
30 June 2020 | 31 December 2019 | |
Zorlu Holding A.Ş. (2) | 547.379 | 376.015 |
Vestel Ventures A.Ş (3) | 174.218 | 148.579 |
Türkiyenin Otomobil Girişim | ||
Grubu Sanayi ve Ticaret A.Ş. (3) | 57.950 | 25.650 |
Other related parties | 738 | 139 |
780.285 | 550.383 | |
(1) Zorlu Holding Group Company, (2) Parent (3) Subsidiary
44
VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD 1 JANUARY - 30 JUNE 2020
(Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
NOTE 8 - RELATED PARTY DISCLOSURES (Cont'd) d) Other long term receivables from related parties
30 June 2020 31 December 2019
Zorlu Holding A.Ş. (2) | 1.787.633 | 1.647.724 |
Vestel Savunma Sanayi A.Ş. (3) | 1.880.091 | 1.470.762 |
Meta Nikel Kobalt Madencilik Sanayi Ve Ticaret A. Ş. (3) | 1.155.273 | 862.559 |
4.822.997 | 3.981.045 | |
As of 30 June 2020, the annual average effective interest rate of other receivables in USD is 7%, average effective interest rate of other receivables in EUR is 5%,average effective interest rate of other receivables in TL is 15% (31 December 2019: USD 7%, TL 21%).
e) Other payables to related parties
30 June 2020 31 December 2019
Zorlu Family (2) | 64.728 | 56.195 |
f) Lease liabilities to related parties | ||
30 June 2020 31 December 2019 | ||
Zorlu Gayrimenkul Geliştirme ve Yatırım A.Ş.(1) | 28.206 | 22.943 |
Zorlu Yapı Yatırım A.Ş.(1) | 4.045 | 184 |
32.251 | 23.127 | |
g) Transactions with related parties
1 January - | 1 January - | 1 April - | 1 April - | |
30 June | 30 June | 30 June | 30 June | |
2020 | 2019 | 2020 | 2019 | |
Sales | ||||
Vestel Electronica S.R.L. (3) | 14.177 | 19.349 | 6.459 | 10.044 |
Zorluteks Tekstil Sanayi ve Ticaret A.Ş. (1) | 1.757 | 2.663 | 609 | 938 |
Vestel Electronics Gulf DMCC . (3) | 21.669 | 20.378 | 9.417 | 13.800 |
Other related parties | 2.052 | 1.644 | 1.012 | 1.111 |
39.655 | 44.034 | 17.497 | 25.893 | |
(1) Zorlu Holding Group Company, (2) Parent (3) Subsidiary |
45
VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD 1 JANUARY - 30 JUNE 2020
(Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
NOTE 8 - RELATED PARTY DISCLOSURES (Cont'd)
1 January - | 1 January - | 1 April - | 1 April - | |
30 June | 30 June | 30 June | 30 June | |
2020 | 2019 | 2020 | 2019 | |
Operating expenses | ||||
ABH Turizm Temsilcilik ve Ticaret A.Ş. (1) | 6.108 | 11.138 | 155 | 6.072 |
Zorlu Holding A.Ş. (2) | 30.636 | 19.671 | 14.362 | 9.759 |
Zorlu Gayrimenkul Gel. ve Yat. A.Ş. (1) | 6.342 | 5.445 | 3.076 | 2.685 |
Zorlu Air Havacılık A.Ş. (1) | 1.699 | 2.820 | 670 | 1.541 |
Other related parties | 3.660 | 4.429 | 2.073 | 2.957 |
48.445 | 43.503 | 20.336 | 23.014 | |
Financial income | ||||
Zorlu Holding A.Ş. (2) | 387.596 | 391.224 | 155.837 | 110.433 |
Vestel Savunma Sanayi A.Ş. (3) | 209.186 | 109.839 | 90.935 | 53.595 |
Other related parties | 199.241 | 12.034 | 199.241 | 6.222 |
796.023 | 513.097 | 446.013 | 170.250 | |
Financial expense | ||||
Zorlu Holding A.Ş. (2) | 396 | - | 266 | - |
Other related parties | 2.942 | 301 | 1.522 | 31 |
3.338 | 301 | 1.788 | 31 | |
(1) Zorlu Holding Group Company, (2) Parent (3) Subsidiary
46
VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD 1 JANUARY - 30 JUNE 2020
(Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
NOTE 8 - RELATED PARTY DISCLOSURES (Cont'd)
- Guarantees received from and given to related parties are disclosed in note 17.
ı) Compensation paid to key management including directors, the Chairman and members of Board of Directors, general managers and assistant general managers
Compensation paid to key management for the six months period ended 30 June 2020 is TL 19.442 thousand (1 January - 30 June 2019: TL 9.872 thousand).
NOTE 9 - TRADE RECEIVABLES AND PAYABLES
30 June 2020 31 December 2019
Short term trade receivables | ||
Trade receivables | ||
- Related parties (note 8) | 62.943 | 55.810 |
- Other parties | 3.505.771 | 3.084.681 |
Cheques and notes receivables | 336.443 | 261.793 |
Other | 163.475 | 146.437 |
4.068.632 | 3.548.721 | |
Unearned interest expense (-) | ||
- Related parties (note 8) | - | - |
- Other parties | (16.632) | (10.966) |
Allowance for doubtful receivables (-) | (176.003) | (164.923) |
Total short term trade receivables | 3.875.997 | 3.372.832 |
Long term trade receivables | ||
Cheques and notes receivables | 46.616 | 77.527 |
Unearned interest expense (-) | (3.371) | (9.932) |
Total long term trade receivables | 43.245 | 67.595 |
The Group provides allowance for doubtful receivables based on historical experience.
47
VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD 1 JANUARY - 30 JUNE 2020
(Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
NOTE 9 - TRADE RECEIVABLES AND PAYABLES (Cont'd)
1 January - | 1 January - | |
30 June 2020 | 30 June 2019 | |
Opening balance, 1 January | 164.923 | 118.450 |
Current year additions | 10.591 | 27.010 |
Provisions no longer required | (3.480) | (3.283) |
Currency translation differences | 3.969 | 1.931 |
Balance at 30 June | 176.003 | 144.108 |
30 June 2020 31 December 2019 | ||
Short term trade payables | ||
Trade payables | ||
- Related parties (note 8) | 5.491 | 7.830 |
- Other parties | 6.413.592 | 6.116.995 |
Notes payables | ||
- Other parties | 13 | 59 |
Other | 3.551 | 3.491 |
6.422.647 | 6.128.375 | |
Unearned interest income (-) | ||
- Other parties | (10.583) | (666) |
Total short term trade payables | 6.412.064 | 6.127.709 |
Long term trade payables | ||
Trade payables | ||
- Other parties | 506 | 6.747 |
Total long term trade payables | 506 | 6.747 |
48
VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD 1 JANUARY - 30 JUNE 2020
(Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
NOTE 10 - OTHER RECEIVABLES
30 June 2020 31 December 2019
Short term other receivables | ||
Receivables from official institutions | 238.334 | 187.448 |
Receivables from related parties (note 8) | 780.285 | 550.383 |
Deposits and guarantees given | 77.790 | 59.075 |
Other | 95.400 | 92.854 |
1.191.809 | 889.760 | |
Allowance for doubtful receivables (-) | (89.641) | (89.376) |
1.102.168 | 800.384 | |
Long term other receivables | ||
Deposits and guarantees given | 6.778 | 5.507 |
Receivables from related parties (note 8) | 4.822.997 | 3.981.045 |
Other | 8.278 | 8.278 |
4.838.053 | 3.994.830 | |
Allowance for doubtful receivables (-) | (8.278) | (8.278) |
4.829.775 | 3.986.552 | |
The Group provides allowance for doubtful receivables. | ||
NOTE 11 - INVENTORIES | ||
30 June 2020 31 December 2019 | ||
Raw materials | 1.586.476 | 1.115.649 |
Work in process | 124.263 | 94.662 |
Finished goods | 1.178.952 | 1.520.401 |
Merchandise | 147.351 | 155.044 |
Other | 10.139 | 5.228 |
3.047.181 | 2.890.984 | |
Provision for impairment on inventories (-) | (74.270) | (57.869) |
2.972.911 | 2.833.115 | |
Cost of the inventory included in the consolidated statement of comprehensive income in the period 1 January - 30 June 2020 is TL 5.157.275 thousand (2019: TL 5.064.636 thousand).
49
VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD 1 JANUARY - 30 JUNE 2020
(Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
NOTE 11 - INVENTORIES (Cont'd)
As of 30 June 2020 the Group does not have inventories pledged as security for liabilities (31 December 2019: None)
Allocation of provision for impairment on inventories in terms of inventory type is as follows:
30 June 2020 31 December 2019
Raw materials | 27.322 | 21.005 |
Finished goods and merchandise | 46.948 | 36.864 |
74.270 | 57.869 |
Movement of provision for impairment on inventories is as follows:
1 January - | 1 January - | |
30 June 2020 | 30 June 2019 | |
Opening balance, 1 January | 57.869 | 32.801 |
Current year additions | 18.058 | 16.289 |
Realised due to sale of inventory | (7.055) | (8.059) |
Currency translation differences | 5.398 | 4.497 |
Balance at 30 June | 74.270 | 45.528 |
NOTE 12 - PREPAID EXPENSES | ||
30 June 2020 31 December 2019 | ||
Prepaid expenses in current assets | ||
Order advances given | 27.615 | 29.423 |
Prepaid expenses | 85.982 | 56.664 |
Business advances given | 8.411 | 3.587 |
122.008 | 89.674 | |
Prepaid expenses in non-current assets | ||
Advances given for fixed asset purchases | 80.555 | 64.471 |
Prepaid expenses | 17.499 | 9.025 |
98.054 | 73.496 |
50
VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD 1 JANUARY - 30 JUNE 2020
(Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
NOTE 13 - INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD
30 June 2020 | 31 December 2019 | |||
% | Amount | % | Amount | |
Subsidiaries | ||||
Meta Nikel Kobalt Madencilik San. ve Tic. A.Ş. | 50% | 885.778 | 50% | 961.272 |
Türkiyenin Otomobil Girişim Grubu Sanayi ve | ||||
Ticaret A.Ş. | 19% | 7.360 | 19% | 12.920 |
893.138 | 974.192 | |||
As on 29 June 2018, pursuant to the Group's goal to diversify its lines of business and achieve profitable growth by investing in new-generation technologies, in order to secure the supply of nickel sulphate and cobalt sulphate compounds, which are critical raw materials for the production of EV batteries, of Meta Nikel Kobalt Madencilik Sanayi ve Ticaret A.Ş. ("META"), which is a Zorlu Holding A.Ş. subsidiary and is involved in nickel-cobalt mining. The Group has purchased 916.335.000 shares (each with a nominal value of TL1 and representing 50% of the Group's share capital) from Ahmet Nazif Zorlu, Olgun Zorlu, Mehmet Emre Zorlu, Selen Zorlu Melik, Meta Madencilik Enerji Turizm Danışmanlık Sanayi ve Ticaret A.Ş. and Zorlu Holding AŞ, for a total consideration of US$250 mn. The acquisition value is in accordance with the valuation range of US$447,2 million and US$572 million stated in June 29, 2018 the independent appraisal report prepared by Ernst & Young Advisory Services, which is licensed by the Capital Markets Board.
META was founded in 2000 to undertake nickel mining in Turkey, has been operating under Zorlu Group since 2007. The Group's nickel cobalt mining facility in Gördes, Manisa was commissioned at the end of 2014. The facility has a production capacity of 10.000 tons of nickel content and 550 tons of cobalt content per annum. Besides Gördes, META also has a licensed field in Eskişehir and undertakes surveying activities in various regions of Turkey. Currently, META produces nickel-cobalt hydroxide (MHP), which is an intermediate product, and plans to undertake an investment for the production of nickel sulfate and cobalt corbonat compounds, which are critical for Li-ion battery production in the upcoming period.
Within the framework of Turkey's Automobile Project, following the work undertaken by the Joint Initiative Group, to which Group's controlling shareholder, Zorlu Holding AŞ was a party, Vestel Elektronik Sanayi ve Ticaret AŞ decided has participated with a 19% share in "Türkiye'nin Otomobili Girişim Grubu Sanayi ve Ticaret A.Ş.", which is planned to be established to produce mainly electric passenger cars and carry out supporting activities. In this respect, the Shareholders Agreement and Articles of Association have been signed on 31 May 2018. Establishment of the new Group is completed on 28 June 2018.
The Group's voting rights and effective ownership rates in Vestel Savunma and Aydın Yazılım are 35% and 21% respectively (31 December 2019: 35%, 21%).
51
VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD 1 JANUARY - 30 JUNE 2020
(Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
NOTE 13 - INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD (Cont'd)
The movements of META, which is an investment accounted for using the equity method during the period 1 January - 30 June is as follows:
1 January - | 1 January - | |
30 June 2020 | 30 June 2019 | |
Balance at 1 January | 961.272 | 1.131.130 |
Shares from profit / loss | (112.694) | (129.230) |
Shares from other comprehensive | ||
income / expense | 37.200 | 40.446 |
Balance at 31 March | 885.778 | 1.042.346 |
Condensed financial statement informations of META is given below:
30 June 2020 31 December 2019
Total Assets | 3.988.361 | 3.482.654 |
Total Liability | (3.550.998) | (2.894.281) |
Net assets | 437.363 | 588.373 |
1 January - | 1 January - | |
30 June 2020 | 30 June 2019 | |
Net sales | 184.667 | 75.069 |
Income / (loss) before tax | (141.848) | (242.211) |
Tax benefit / (expense) | (83.541) | (16.250) |
Net income / (loss) for the period | (225.388) | (258.461) |
Total comprehensive income | (150.988) | (177.569) |
52
VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD 1 JANUARY - 30 JUNE 2020 (Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
NOTE 14 - PROPERTY, PLANT AND EQUIPMENT
Currency | ||||||
1 January | translation | 30 June | ||||
2020 | Additions | Disposals | differences | Transfers | 2020 | |
Cost or revaluation | ||||||
Land | 635.564 | - | (29.941) | (3.077) | - | 602.546 |
Land improvements | 132.438 | 341 | (2.773) | 4.892 | - | 134.898 |
Buildings | 1.489.078 | 5.389 | (137.883) | 71.968 | 4.169 | 1.432.721 |
Leasehold improvements | 156.981 | 1.155 | - | 1.962 | 55 | 160.153 |
Plant and machinery | 3.168.798 | 215.080 | (101.781) | 54.622 | 36.406 | 3.373.125 |
Motor vehicles | 7.546 | 664 | (2.106) | 1.476 | - | 7.580 |
Furniture and fixtures | 427.429 | 13.106 | (11.405) | 10.525 | 6.788 | 446.443 |
Other tangible assets | 849 | - | - | - | - | 849 |
Construction in progress | 54.295 | 23.575 | (40) | 184 | (44.537) | 33.477 |
6.072.978 | 259.310 | (285.929) | 142.552 | 2.881 | 6.191.792 | |
Accumulated depreciation | ||||||
Land improvements | 6.932 | 491 | (955) | 7.537 | - | 14.005 |
Buildings | 60.895 | 20.104 | (45.192) | 32.235 | - | 68.042 |
Leasehold improvements | 144.705 | 6.808 | - | 7.772 | - | 159.285 |
Plant and machinery | 2.053.707 | 182.731 | (20.038) | 12.342 | - | 2.228.742 |
Motor vehicles | 4.841 | 581 | (1.967) | 1.378 | - | 4.833 |
Furniture and fixtures | 348.721 | 19.500 | (9.400) | 43.477 | 1.554 | 403.852 |
Other tangible assets | 849 | - | - | - | - | 849 |
2.620.650 | 230.215 | (77.552) | 104.741 | 1.554 | 2.879.608 | |
Net book value | 3.452.328 | 3.312.184 | ||||
53
VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD 1 JANUARY - 30 JUNE 2020 (Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
NOTE 14 - PROPERTY, PLANT AND EQUIPMENT (Cont'd)
Currency | ||||||
1 January | translation | 30 June | ||||
2019 | Additions | Disposals | differences | Transfers | 2019 | |
Cost or revaluation | ||||||
Land | 625.381 | - | - | 8.852 | - | 634.233 |
Land improvements | 126.962 | 177 | - | 4.339 | - | 131.478 |
Buildings | 1.407.645 | 6.912 | (862) | 56.261 | 1.906 | 1.471.862 |
Leasehold improvements | 154.233 | 573 | (1.000) | 416 | 402 | 154.624 |
Plant and machinery | 2.756.625 | 153.541 | (18.351) | 27.505 | 21.643 | 2.940.963 |
Motor vehicles | 7.725 | 330 | (613) | 300 | - | 7.742 |
Furniture and fixtures | 407.792 | 8.222 | (4.636) | 3.304 | 909 | 415.591 |
Other tangible assets | 849 | - | - | - | - | 849 |
Construction in progress | 39.874 | 37.225 | - | 3 | (24.945) | 52.157 |
5.527.086 | 206.980 | (25.462) | 100.980 | (85) | 5.809.499 | |
Accumulated depreciation | ||||||
Land improvements | - | 2.948 | - | 755 | - | 3.703 |
Buildings | - | 24.225 | (140) | 12.644 | - | 36.729 |
Leasehold improvements | 129.113 | 8.478 | (755) | 243 | - | 137.079 |
Plant and machinery | 1.744.385 | 156.864 | (18.242) | 21.008 | - | 1.904.015 |
Motor vehicles | 4.546 | 543 | (515) | 295 | - | 4.869 |
Furniture and fixtures | 313.486 | 19.450 | (4.503) | 2.942 | - | 331.375 |
Other tangible assets | 849 | - | - | - | - | 849 |
2.192.379 | 212.508 | (24.155) | 37.887 | - | 2.418.619 | |
Net book value | 3.334.707 | 3.390.880 | ||||
54
VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD 1 JANUARY - 30 JUNE 2020
(Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
NOTE 14 - PROPERTY, PLANT AND EQUIPMENT (Cont'd)
Additions to property, plant and equipment in the period 1 January - 30 June 2020 mainly consist of machinery and equipment investments made to television and electronic devices factory, first and second refrigerator, cooker, dishwasher, washing machine and tumbler drier factories.
As of 30 June 2020 the Group does not have property, plant and equipment pledged (2019: None)
Useful lives of property, plant and equipment is as follows:
Useful life | ||
Land improvements | 5 | - 35 years |
Buildings | 25 | - 50 years |
Leasehold improvements | 3 | - 10 years |
Plant and machinery | 2 | - 25 years |
Motor vehicles | 5 | - 10 years |
Furniture and fixtures | 5 | - 14 years |
Allocation of current year depreciation and amortization expenses is as follows:
1 January - | 1 January - | |
30 June | 30 June | |
2020 | 2019 | |
Cost of sales | 201.812 | 170.700 |
Research and development expenses | 83.128 | 72.249 |
Marketing, selling and distribution expenses | 37.972 | 36.077 |
General administrative expenses | 14.569 | 17.156 |
Other operating expense (idle capacity depreciation expense) | 2.707 | 3.054 |
340.188 | 299.236 | |
55
VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD 1 JANUARY - 30 JUNE 2020
(Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
NOTE 15 - RIGHT OF USE ASSETS
1 January | Effect of change in | 30 June | ||
2020 accounting policies Additions | 2020 | |||
Cost | ||||
Land and buildings | 141.468 | - | 59.815 | 201.283 |
Machinery | 66.316 | - | 1.454 | 67.770 |
Motor vehicles | 15.271 | - | 3.409 | 18.680 |
223.055 | - | 64.678 | 287.733 | |
Accumulated amortization | ||||
Land and buildings | 37.068 | - | 24.864 | 61.932 |
Machinery | 15.765 | - | 9.633 | 25.398 |
Motor vehicles | 6.446 | - | 3.199 | 9.645 |
59.279 | - | 37.696 | 96.975 | |
Net book value | 163.776 | - | - | 190.758 |
1 January | Effect of change in | 30 June | ||
2019 accounting policies Additions | 2019 | |||
Cost | ||||
Land and buildings | - | 119.364 | - | 119.364 |
Machinery | - | 34.612 | - | 34.612 |
Motor vehicles | - | 13.836 | - | 13.836 |
- | 167.812 | - | 167.812 | |
Accumulated amortization | ||||
Land and buildings | - | - | 15.746 | 15.746 |
Machinery | - | - | 4.693 | 4.693 |
Motor vehicles | - | - | 3.252 | 3.252 |
- | - | 23.691 | 23.691 | |
Net book value | - | 167.812 | - | 144.121 |
56
VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD 1 JANUARY - 30 JUNE 2020
(Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
NOTE 16 - INTANGIBLE ASSETS
Currency | ||||||
1 January | translation | 30 June | ||||
2020 Additions Disposals differences Transfers | 2020 | |||||
Cost | ||||||
Rights | 70.878 | 30 | - | 1.083 | (2.881) | 69.110 |
Development cost | 1.169.884 | 112.239 | (111) | 82 | - | 1.282.094 |
Other intangible assets | 180.684 | 4.179 | (37.507) | 20.309 | - | 167.665 |
1.421.446 | 116.448 | (37.618) | 21.474 | (2.881) | 1.518.869 | |
Accumulated amortization | ||||||
Rights | 55.099 | 1.184 | - | (1.237) | (1.554) | 53.492 |
Development cost | 641.642 | 66.759 | - | - | - | 708.401 |
Other intangible assets | 106.977 | 4.334 | (35.033) | 20.770 | - | 97.048 |
803.718 | 72.277 | (35.033) | 19.533 | (1.554) | 858.941 | |
Net book value | 617.728 | 659.928 | ||||
Currency | ||||||
1 January | translation | 30 June | ||||
2019 Additions Disposals differences Transfers | 2019 | |||||
Cost | ||||||
Rights | 70.832 | 24 | (716) | 455 | - | 70.595 |
Development cost | 975.596 | 84.574 | (114) | - | - | 1.060.056 |
Other intangible assets | 167.259 | 2.751 | (455) | 3.848 | 85 | 173.488 |
1.213.687 | 87.349 | (1.285) | 4.303 | 85 | 1.304.139 | |
Accumulated amortization | ||||||
Rights | 52.070 | 1.609 | (716) | 438 | - | 53.401 |
Development cost | 527.517 | 56.977 | - | - | - | 584.494 |
Other intangible assets | 93.503 | 5.106 | - | 3.324 | - | 101.933 |
673.090 | 63.692 | (716) | 3.762 | - | 739.828 | |
Net book value | 540.597 | 564.311 | ||||
57
VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD 1 JANUARY - 30 JUNE 2020
(Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
NOTE 16 - INTANGIBLE ASSETS(Cont'd)
Development costs, incurred by the Group on development projects relating to television and electronic devices, refrigerators, split air conditioners, washing machines, cookers and dish washers are capitalized as intangible assets when it is probable that costs will be recovered through future commercial activity and only if the cost can be measured reliably.
Useful lives of intangible assets are as follows:
Useful life | ||
Rights | 2 - 15 | years |
Development cost | 2 - 10 | years |
Other | 2 - 15 | years |
NOTE 17 - PROVISIONS, CONTINGENT ASSETS AND LIABILITIES
a) Provisions
30 June 2020 31 December 2019
Short term provisions | ||
Warranty and assembly provision | 289.666 | 266.042 |
Other provisions | 262.953 | 291.130 |
Provision for lawsuit risks | 27.611 | 24.909 |
580.230 | 582.081 | |
Long term provisions | ||
Warranty and assembly provision | 44.818 | 42.878 |
Other provisions | 3.277 | 2.959 |
48.095 | 45.837 |
With reference to Group management's and legal advisors' assessments, no provision is provided for those cases that are expected to be finalized in favor of the Group. As of 30 June 2020, the amount of provision provided for the cases for which the probability of losing the case is assessed to be high by the Group management and legal advisors is TL 27.611 thousand (31 December 2019: TL 24.909 thousand).
58
VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD 1 JANUARY - 30 JUNE 2020
(Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
NOTE 17 - PROVISIONS, CONTINGENT ASSETS AND LIABILITIES (Cont'd)
As of 30 June movements of warranty and assembly provisions are as follows:
1 January - | 1 January - | |
30 June 2020 | 30 June 2019 | |
Opening balance, 1 January | 308.920 | 297.326 |
Current year additions (Note 23) | 192.701 | 178.321 |
Provisions no longer required | (167.137) | (179.906) |
Balance at 30 June | 334.484 | 295.741 |
b) Waste Electrical and Electronic Equipment Directive
Legal regulation prepared in conformity with European Union Waste Electrical and Electronic Equipment Directive ("WEEE") has been effective in Turkey since 2012. The Directive set collection, recycling and recovery targets for all types of electrical and electronic goods upon manufacturers. The Group fulfills these obligations.
c) Guarantees received by the Group
Guarantee letters, collaterals, cheques and notes received
30 June 2020 31 December 2019
Guarantee letters | 567.302 | 550.767 |
Cheques and notes | 9.859 | 387.751 |
Collaterals and pledges | 1.393.133 | 1.407.870 |
1.970.294 | 2.346.388 |
Vestel Beyaz Eşya Sanayi ve Ticaret A.Ş. and Vestel Ticaret A.Ş. has given collaterals to various banks on behalf of the Company for its forward contracts and loans utilized.
59
VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD 1 JANUARY - 30 JUNE 2020
(Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
NOTE 17 - PROVISIONS, CONTINGENT ASSETS AND LIABILITIES (Cont'd)
- Collaterals, pledges and mortgages ("CPM's") given by the Group
USD | EUR | |||
CPM's given by the Group | ('000) | ('000) | TL | TL Equivalent |
30 June 2020 | ||||
A. CPM's given on behalf of its own legal entity | 5.290 | 27.891 | 82.115 | 333.299 |
B. CPM's given on behalf of fully consolidated | ||||
subsidiaries (*) | 1.903.578 | 240.764 | 2.981.184 | 17.861.700 |
C. CPM's given on behalf of third parties for | ||||
ordinary course of business | - | - | - | - |
D. Total amount of other CPM's given | 31.695 | - | 26.592 | 243.456 |
i. Total amount of CPM's given on behalf of the | ||||
parent company | - | - | - | - |
- Total amount of CPM's given to on behalf of other group companies which are not in scope of B
and C. | 31.695 | - | 26.592 | 243.456 |
iii.Total amount of CPM's given on behalf of third | ||||
parties which are not in scope of C. | - | - | - | - |
Total | 1.940.563 | 268.655 | 3.089.891 | 18.438.455 |
(*)Fully consolidated subsidiaries have given collaterals to various financial institutions on behalf of each other for their forward contracts and for the total amount of loans utilized.
60
VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD 1 JANUARY - 30 JUNE 2020
(Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
NOTE 17 - PROVISIONS, CONTINGENT ASSETS AND LIABILITIES (Cont'd)
USD | EUR | |||
CPM's given by the Group | ('000) | ('000) | TL | TL Equivalent |
31 December 2019 | ||||
A. CPM's given on behalf of its own legal entity | 5.993 | 22.493 | 196.638 | 381.833 |
B. CPM's given on behalf of fully consolidated | ||||
subsidiaries | 1.918.972 | 239.495 | 2.900.583 | 15.892.446 |
C. CPM's given on behalf of third parties for | ||||
ordinary course of business | - | - | - | - |
D. Total amount of other CPM's given | 36.437 | - | 22.001 | 238.444 |
i. Total amount of CPM's given on behalf of the | ||||
parent company | - | - | - | - |
- Total amount of CPM's given to on behalf of other group companies which are not in scope of B
and C. | 36.437 | - | 22.001 | 238.444 |
iii.Total amount of CPM's given on behalf of third | ||||
parties which are not in scope of C. | - | - | - | - |
Total | 1.961.402 | 261.988 | 3.119.222 | 16.512.723 |
As of 30 June 2020 proportion of | other CPM's given by | the Group | to its equity is | 5% |
(31 December 2019: 6%). |
NOTE 18 - COMMITMENTS
As of the balance sheet date the Group has committed to realize exports amounting to 980.888 thousand USD (31 December 2019: 1.041.140 thousand USD) due to the export and investment incentive certificates obtained.
As of 30 June 2020 the Group has forward foreign currency purchase contract that amounts to USD 807.292 thousand, EUR 207.374 thousand, GBP 13.686 thousand, PLN 26.680 thousand, RON 1.412 thousand and TL 981.364 thousand against forward foreign currency sales contract that amounts to USD 373.438 thousand , EUR 341.508 thousand, GBP 64.429 thousand, RUB 1.255.420 thousand, RON 11.681 thousand, PLN 26.314 thousand, SEK 9.447 thousand, CHF 250.139 and TL 498.708 thousand. (31 December 2019: USD 857.412 thousand, EUR 334.503 thousand, GBP 52.928 thousand, PLN 40.850 thousand, RON 4.270 thousand, RUB 30.750 thousand and TL 1.489.514 thousand against forward foreign currency purchase contract; USD 616.000 thousand, EUR 309.307 thousand, GBP 118.911 thousand, RUB 1.381.929 thousand, RON 8.669 thousand, PLN 133.695 thousand, SEK 9.447 thousand, CHF 249.707 and TL 748.328 thousand against forward foreign currency sales contract).
61
VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD 1 JANUARY - 30 JUNE 2020
(Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
NOTE 19 - EMPLOYEE BENEFITS
Liabilities for employee benefits:
30 June 2020 31 December 2019
Due to personnel | 76.570 | 91.078 |
Social security payables | 96.852 | 108.977 |
173.422 | 200.055 | |
Long term provisions for employee benefits: | ||
30 June 2020 31 December 2019 | ||
Provision for employment termination benefits | 168.917 | 156.116 |
Under Turkish law, the Group is required to pay employment termination benefits to each employee whose employment is terminated without due cause. In addition, under the existing Social Security Law No.506, clause No. 60, amended by the Labor Laws dated 6 March 1981, No.2422 and 25 August 1999, No.4447, the Group is also required to pay termination benefits to each employee who has earned the right to retire by receiving termination indemnities.
The amount payable is the equivalent of one month's salary for each year of service and is limited to a maximum of 6.730,15 TL/year as of 30 June 2020 (31 December 2019: 6.379,86 TL/year).
Provision for employment termination benefits is not subject to any funding.
The provision is calculated by estimating the present value of the future obligation of the Group arising from retirement of employees. TAS 19 ("Employee Benefits") requires actuarial valuation methods to be developed to estimate the enterprise's obligation under defined employee plans. Accordingly actuarial assumptions were used in the calculation of the total liability which are described below:
62
VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD 1 JANUARY - 30 JUNE 2020
(Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
NOTE 19 - EMPLOYEE BENEFITS (Cont'd)
The principal assumption is that the maximum liability for each year of service will increase in line with inflation. Thus, the discount rate applied represents the expected real rate after adjusting for the anticipated effects of future inflation. An expected inflation rate and appropriate discount rate should both be determined, the net of these being real discount rate. Consequently in the accompanying financial statements as of 30 June 2020, the provision is calculated by estimating the present value of the future obligation of the Group arising from retirement of employees. As of 30 June 2020 provision is calculated based on real discount rate of 5,21% (31 December 2019: 5,21%) assuming 7% annual inflation rate and 12,21% discount rate.
The movement in the provision for employment termination benefit is as follows:
1 January - | 1 January - | |
30 June 2020 | 30 June 2019 | |
Balance at 1 January | 156.116 | 111.100 |
Increase during the year | 5.607 | 4.524 |
Payments during the year | (10.429) | (9.608) |
Actuarial (gain) /loss | 7.904 | 3.581 |
Interest expense | 9.719 | 9.058 |
Balance at 30 June | 168.917 | 118.655 |
NOTE 20 - OTHER ASSETS AND LIABILITIES | ||
30 June 2020 31 December 2019 | ||
Other current assets | ||
VAT carried forward | 8.748 | 9.588 |
Rebates from suppliers and incentives income accurals | 19.398 | 23.194 |
Other | 17.602 | 32.714 |
45.748 | 65.496 | |
Other non - current assets | ||
Assets held for sale | 10.603 | 9.925 |
10.603 | 9.925 |
63
VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD 1 JANUARY - 30 JUNE 2020
(Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
NOTE 20 - OTHER ASSETS AND LIABILITIES (Cont'd)
30 June 2020 31 December 2019
Other current liabilities | ||
Advances received | 176.796 | 108.124 |
Tax payables | 79.622 | 83.479 |
Other | 232.761 | 199.440 |
489.179 | 391.043 | |
NOTE 21 - CAPITAL, RESERVES AND OTHER EQUITY ITEMS | ||
a) Paid in capital | ||
30 June 2020 31 December 2019 | ||
Shares of par value Kr 1 each | ||
limit on registered share capital | 1.000.000 | 1.000.000 |
Issued share capital | 335.456 | 335.456 |
As of 30 June 2020 and 31 December 2019 the shareholding structures are as follows:
Shareholding | Amount | |||
30 June 31 December | 30 June 31 December | |||
2020 | 2019 | 2020 | 2019 | |
Zorlu Holding A.Ş. | 64,41% | 64,41% | 216.054 | 216.054 |
Shares held by public | ||||
Other shareholders | 28,37% | 26,34% | 95.154 | 88.359 |
Zorlu Holding A.Ş. | 7,23% | 9,25% | 24.248 | 31.043 |
100% | 100% | 335.456 | 335.456 | |
b) Adjustment to share capital
Adjustment to share capital (restated to 31 December 2004 purchasing power of money) is the difference between restated share capital and historical share capital.
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VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD 1 JANUARY - 30 JUNE 2020
(Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
NOTE 21 - CAPITAL, RESERVES AND OTHER EQUITY ITEMS (Cont'd)
c) Share premium
Share premium account refers the difference between par value of the company's shares and the amount the company received for newly issued shares. The share premium account is disclosed under equity as a separate line item and may not be distributed. It may be used in capital increase.
d) Legal reserves
The legal reserves consist of first and second legal reserves appropriated in accordance with the Turkish Commercial Code ("TCC"). The first legal reserve is appropriated out of the statutory profits at the rate of 5%, until the total reserve reaches a maximum of 20% of the Company's share capital. The second legal reserve is appropriated at the rate of 10% of all distributions in excess of 5% of the Company's share capital. Under TCC, the legal reserves can only be used to offset losses and are not available for any other usage unless they exceed 50% of paid in share capital
30 June 2020 31 December 2019
Legal reserves | 67.443 | 67.179 |
e) Revaluation reserve | ||
30 June 2020 31 December 2019 | ||
Fair value gains on financial assets | 6.942 | 4.321 |
Revaluation of property, plant and equipment | 1.251.946 | 1.310.274 |
1.258.888 | 1.314.595 | |
f) Accumulated deficit | ||
30 June 2020 31 December 2019 | ||
Extraordinary reserves | 512.541 | 512.541 |
Previous year's loss | 307.107 | (142.242) |
Other inflation adjustment of share capital | 119.718 | 119.718 |
939.366 | 490.017 | |
65
VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD 1 JANUARY - 30 JUNE 2020
(Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
NOTE 21 - CAPITAL, RESERVES AND OTHER EQUITY ITEMS (Cont'd)
g) Dividend distribution
For quoted companies dividends are distributed in accordance with the Communiqué Serial II -19.1 on "Principals Regarding Distribution of Interim Dividends" issued by the CMB effective from 1 February 2014.
Companies distribute dividends in accordance with their dividend payment policies settled and dividend payment decision taken in general assembly and in conformity with relevant legislations. The communiqué does not state a minimum dividend rate. Companies distribute dividends in accordance with the method defined in their dividend policy or articles of association. Additionally, dividend can be distributed in fixed or variable installments and dividend advances can be paid over the profit on interim financial statements.
Unless the general reserves that has to be appropriated in accordance with TCC or the dividend to shareholders as determined in the articles of association or dividend policy are set aside; no decision can be taken to set aside other reserves, to transfer reserves to the subsequent year or to distribute dividends to holders of usufruct right certificates, to board of directors members or to employees; and no dividend can be distributed to those unless the determined dividend to shareholders is paid in cash.
On the other hand, in accordance with the Articles of Association of the Company, the net period income is allocated after deducting the accumulated losses from the previous years, if any, as follows:
- As per Article 519 of the Turkish Commercial Code, 5% is allocated to a general legal reserve.
- A dividend is allocated from the remaining amount, at the rate determined by the General Assembly over an amount to be found after the addition of a donation, which is made in line with the Turkish Commercial Code and Capital Market Legislation.
- After the deductions above, the General Assembly has the right to decide how to allocate the dividend to members of the board of directors and officers, employees and workers, foundations established with various purposes, and similar persons and corporations.
- After the amounts stated in paragraph (a), (b) and (c) are deducted from the net period profit, the General Assembly is authorized to allocate the remaining amount as a second dividend or to allocate the remaining amount to its own reserve as per Article 521 of the Turkish Commercial Code.
- One tenth of the amount obtained after a dividend of 5% of the paid in capital and other legal reserve are deducted from the amount that is agreed to be allocated to the shareholders and other persons participating to the profit is added to the general legal reserve as per paragraph (c) of the second clause of article 519 of the Turkish Commercial Code.
66
VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD 1 JANUARY - 30 JUNE 2020
(Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
NOTE 22 - SALES
1 January - | 1 January - | 1 April - | 1 April - | |
30 June | 30 June | 30 June | 30 June | |
2020 | 2019 | 2020 | 2019 | |
Domestic sales | 2.702.051 | 1.941.445 | 1.587.015 | 1.125.770 |
Overseas sales | 6.386.992 | 6.474.936 | 3.248.382 | 3.451.805 |
Gross sales | 9.089.043 | 8.416.381 | 4.835.397 | 4.577.575 |
Sales discounts (-) | (734.444) | (590.414) | (411.600) | (314.141) |
Net sales | 8.354.599 | 7.825.967 | 4.423.797 | 4.263.434 |
Cost of sales | (6.042.107) | (5.789.879) | (3.230.516) | (3.036.989) |
Gross profit | 2.312.492 | 2.036.088 | 1.193.281 | 1.226.445 |
NOTE 23 - EXPENSES BY NATURE | ||||
1 January - | 1 January - | 1 April - | 1 April - | |
30 June | 30 June | 30 June | 30 June | |
2020 | 2019 | 2020 | 2019 | |
Raw materials, supplies and | ||||
finished goods | 4.837.734 | 5.263.675 | 2.475.571 | 2.772.243 |
Changes in finished goods, work in | ||||
process, trade goods | 319.541 | (199.039) | 281.518 | (81.846) |
Personnel expenses | 701.060 | 604.973 | 363.485 | 323.125 |
Depreciation and amortization | 337.481 | 296.182 | 192.206 | 150.021 |
warehouse expenses | 353.288 | 312.135 | 188.674 | 172.088 |
Warranty and assembly expenses | 192.701 | 178.321 | 103.786 | 94.810 |
Advertising expenses | 96.567 | 82.602 | 47.670 | 38.335 |
Other | 508.442 | 444.107 | 220.548 | 186.404 |
7.346.814 | 6.982.956 | 3.873.458 | 3.655.180 | |
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VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD 1 JANUARY - 30 JUNE 2020
(Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
NOTE 24 - GENERAL ADMINISTRATIVE EXPENSES, MARKETING EXPENSES, RESEARCH AND DEVELOPMENT EXPENSES
a) General administrative expenses:
1 January - | 1 January - | 1 April - | 1 April - | |
30 June | 30 June | 30 June | 30 June | |
2020 | 2019 | 2020 | 2019 | |
Personnel expenses | 75.444 | 69.130 | 35.961 | 37.339 |
Depreciation and amortization | 14.569 | 17.156 | 7.661 | 9.179 |
Consultancy expenses | 34.359 | 17.875 | 12.958 | 9.305 |
Information technology expenses | 20.884 | 19.214 | 10.967 | 9.474 |
Rent and office expenses | 13.720 | 17.046 | 5.847 | 8.169 |
Tax and duties | 7.174 | 7.518 | 3.162 | 3.861 |
Insurance expenses | 4.864 | 5.915 | 2.312 | 3.244 |
Travelling expenses | 2.562 | 3.972 | 838 | 2.172 |
Benefits and services provided externally | 943 | 923 | (49) | 414 |
Other | 31.596 | 39.465 | 15.445 | 4.701 |
206.115 | 198.214 | 95.102 | 87.858 | |
b) Marketing expenses: | ||||
Export, transportation, warehouse expenses | 332.017 | 290.243 | 177.496 | 159.290 |
Depreciation and amortization | 37.972 | 36.077 | 15.816 | 26.561 |
Warranty and assembly expenses | 192.701 | 178.321 | 103.786 | 94.810 |
Personnel expenses | 176.571 | 159.436 | 89.555 | 86.876 |
Advertising expenses | 86.675 | 74.843 | 43.409 | 33.805 |
Other | 142.328 | 132.921 | 52.407 | 64.521 |
968.264 | 871.841 | 482.469 | 465.863 | |
c) Research and development expenses: | ||||
Personnel expenses | 20.459 | 17.212 | 9.391 | 8.885 |
Depreciation and amortization | 83.128 | 72.249 | 42.840 | 36.990 |
Travelling expenses | 2.000 | 3.483 | 131 | 1.849 |
Other | 24.741 | 30.078 | 13.009 | 16.746 |
130.328 | 123.022 | 65.371 | 64.470 | |
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VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD 1 JANUARY - 30 JUNE 2020
(Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
NOTE 25 - OTHER INCOME AND EXPENSE FROM OPERATING ACTIVITIES a) Other income from operating activities:
1 January - | 1 January - | 1 April - | 1 April - | |
30 June | 30 June | 30 June | 30 June | |
2020 | 2019 | 2020 | 2019 | |
Credit finance gains arising from | ||||
trading activities | 27.383 | 46.004 | 4.755 | 30.855 |
Foreign exchange gains arising | ||||
from trading activities | 382.516 | 568.779 | 172.793 | 296.079 |
Reversals of provisions | 3.449 | 24.431 | 1.887 | 23.970 |
Other income | 138.574 | 78.483 | 44.027 | 40.890 |
551.922 | 717.697 | 223.462 | 391.794 | |
b) Other expense from operating activities: | ||||
Debit finance charges arising from | ||||
trading activities | 27.691 | 104.405 | 17.500 | 46.014 |
Foreign exchange expenses arising | ||||
from trading activities | 979.869 | 762.812 | 373.974 | 286.292 |
Provision expenses | 22.344 | 26.210 | 20.005 | 14.163 |
Other expenses | 73.818 | 135.425 | 34.052 | 78.866 |
1.103.722 | 1.028.852 | 445.531 | 425.335 | |
69
VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD 1 JANUARY - 30 JUNE 2020
(Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
NOTE 26 - FINANCIAL INCOME AND FINANCIAL EXPENSE a) Financial income:
1 January - | 1 January - | 1 April - | 1 April - | |
30 June | 30 June | 30 June | 30 June | |
2020 | 2019 | 2020 | 2019 | |
Foreign exchange gains | 908.009 | 499.544 | 344.479 | 244.720 |
Gains on derivative financial instruments | 385.267 | 550.370 | 155.531 | 198.982 |
Interest income | 232.904 | 291.008 | 123.369 | 147.526 |
1.526.180 | 1.340.922 | 623.379 | 591.228 | |
b) Financial expense: | ||||
1 January - | 1 January - | 1 April - | 1 April - | |
30 June | 30 June | 30 June | 30 June | |
2020 | 2019 | 2020 | 2019 | |
Foreign exchange losses | 447.175 | 440.546 | 180.268 | 290.984 |
Losses on derivative financial instruments | 416.558 | 715.395 | 180.817 | 245.510 |
Interest and commision expense | 431.726 | 554.327 | 248.565 | 288.087 |
Other finance expenses | 2.308 | 8.500 | 452 | 8.323 |
1.297.767 | 1.718.768 | 610.102 | 832.904 | |
NOTE 27 - TAXES ON INCOME (INCLUDING DEFERRED TAX ASSETS AND LIABILITIES)
30 June 2020 31 December 2019
Corporation and income taxes | 4.960 | 10.182 |
Prepaid taxes (-) | (2.721) | (17.441) |
Current income tax liabilities - net | 2.239 | (7.259) |
Deferred tax liabilities | (259.856) | (233.589) |
Deferred tax assets | 328.615 | 230.498 |
68.759 | (3.091) |
Turkish Tax Legislation does not permit a parent company its subsidiaries and investments in associates to file a consolidated tax return. Therefore, tax liabilities as reflected in these consolidated financial statements have been calculated on a separate entity basis for the fully consolidated subsidiaries.
70
VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD 1 JANUARY - 30 JUNE 2020
(Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
NOTE 27 - TAXES ON INCOME (INCLUDING DEFERRED TAX ASSETS AND LIABILITIES) (Cont'd)
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 other exempt income. In addition to corporate taxes, companies should also calculate income withholding taxes on any dividends distributed at the rate of % 15, except for companies receiving dividends who are resident companies in Turkey. Undistributed dividends incorporated in share capital are not subject to income withholding taxes.
In Turkey, advance tax returns are filed on a quarterly basis at the rate of 22%, until the 14th day of the following month and paid until the 17th day. Advance tax returns files within the year are offset against corporate income tax calculated over the annual taxable corporate income.
According to the Corporate Tax Law, 50% of the capital gains arising from the sale of tangible assets and 75% of the earning from investments in equity shares owned for at least two years are exempted from corporate tax on the condition that such gains are reflected in the equity.
Under the Turkish taxation system, tax losses can be carried forward to be offset against future taxable income for up to five years. Tax losses cannot be carried back.
There is no procedure for a final and definitive agreement on tax assessments. Tax returns are filed between 1-25 April following the close of the accounting year to which they relate. Tax authorities may however examine such returns and the underlying accounting records and may revise assessment within five years.
For the years 2006-2017, corporate tax rate in Turkey is 20%. In accordance with the regulation numbered 7061, published in Official Gazette on 5 December 2017, corporate tax rate for the years 2018, 2019 and 2020 has increased from 20% to 22%. Therefore, deferred tax assets and liabilities as of 30 June 2020 are calculated with 22% tax rate for the temporary differences which will be realized in 2020, and with 20% tax for those which will be realized after 2021 and onwards.
Russian Federation
In Russia, corporate tax rate applicable is 20% (2019: 20%). Under the Russian Federation taxation system, tax losses can be carried forward to be offset against future taxable income for up to ten years. There are no restrictions on the amounts subject to net off. On the other hand, tax, currency and customs legislations are subject to various interpretations and changes which can occurs frequently in Russian Federation. Management's interpretation for such legislation, which is applied to the Company's operations and activities, can be interpreted by regional and federal authorities in different ways.
71
VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD 1 JANUARY - 30 JUNE 2020
(Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
NOTE 27 - TAXES ON INCOME (INCLUDING DEFERRED TAX ASSETS AND LIABILITIES) (Cont'd)
The events of the recent past in Russian Federation, shows that risk could be possible on approval of operations and activities, which approved in the past may not be approved in the future as a result of reviews by the tax authorities on legislation. According to a review by the tax inspection authorities, without exceptional circumstances, tax inspection covers three years prior to the final inspection. Under certain circumstances, such views may cover longer periods.
As of 1 January - 30 June 2020 and 2019 tax benefit in the consolidated statement of income is as follows:
1 January - | 1 January - | |
30 June 2020 | 30 June 2019 | |
Current period tax expense | (4.356) | (4.456) |
Deferred tax benefit | 64.390 | 30.611 |
Total tax (expense) / benefit | 60.034 | 26.155 |
Due to modernization, plant extension and investments incentive documents in Manisa Organized Industrial Zone, the Group has reduced rate of corporate tax advantage.
Deferred tax assets and liabilities
The Group recognizes deferred tax assets and liabilities based upon temporary differences arising between their financial statements prepared in accordance with CMB Communiqué II, No. 14.1 and their statutory financial statements. These temporary differences usually result from the recognition of revenue and expenses in different reporting periods for the Communiqué and tax purposes.
As of 30 June 2020, the Group has not recognized deferred tax assets arising from its investment incentive certificate, in accordance with conservatism principle of accounting.
72
VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD 1 JANUARY - 30 JUNE 2020
(Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
NOTE 27 - TAXES ON INCOME (INCLUDING DEFERRED TAX ASSETS AND LIABILITIES) (Cont'd)
The breakdown of cumulative temporary differences and the resulting deferred tax assets and liabilities provided using principal tax rate as of the balance sheet dates is as follows:
Cumulative temporary | ||||
differences | Deferred tax | |||
30 June | 31 December | 30 June | 31 December | |
2020 | 2019 | 2020 | 2019 | |
Deferred tax assets | ||||
Employment termination benefits | (168.917) | (151.080) | 33.783 | 30.216 |
Warranty provision | (100.850) | (108.750) | 22.187 | 23.925 |
Provision for doubtful receivables | (90.723) | (177.777) | 19.959 | 39.111 |
Unearned interest expense | - | (21.082) | - | 4.638 |
Net difference between book values | ||||
and tax bases of tangible and | ||||
intangible assets | (25.050) | - | 5.010 | - |
Provision for impairment on | ||||
inventories | (18.059) | (16.291) | 3.973 | 3.578 |
Derivative financial instruments | (38.582) | (7.105) | 7.716 | 1.556 |
Carryforward tax losses | ||||
and R&D incentives | (730.955) | (607.600) | 146.191 | 121.520 |
Other | (408.164) | (179.755) | 89.796 | 39.546 |
328.615 | 264.090 | |||
Deferred tax liabilites | ||||
Income accruals of derivative | ||||
transactions | 50.171 | - | (11.038) | - |
Useful life and valuation differences on | ||||
property, plant and equipment and | ||||
intangible assets | - | 71.025 | - | (14.205) |
Revaluation of tangible fixed assets | 1.216.250 | 1.091.436 | (243.250) | (251.322) |
Other | 25.309 | 7.518 | (5.568) | (1.654) |
(259.856) | (267.181) | |||
Deferred tax assets / (liabilites) - net | 68.759 | (3.091) | ||
73
VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD 1 JANUARY - 30 JUNE 2020
(Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
NOTE 27 - TAXES ON INCOME (INCLUDING DEFERRED TAX ASSETS AND LIABILITIES) (Cont'd)
The movement of net deferred tax assets and liabilities is as follows:
1 January - | 1 January - | ||
30 June 2020 | 30 June 2019 | ||
Opening balance, 1 January | (3.091) | (54.287) | |
Tax benefit recognized in income statement | 64.390 | 30.611 | |
Recognized in shareholders' equity | 240 | (782) | |
Currency translation differences | 7.220 | (1.538) | |
Deferred tax (liabilities) / assets | |||
at the end of the period, net | 68.759 | (25.996) | |
NOTE 28 - EARNINGS / (LOSS) PER SHARE | |||
1 January - | 1 January - | ||
30 June | 30 June | ||
2020 | 2019 | ||
Net income / (loss) attributable to equity holders | |||
of the parent | 600.091 | 35.478 | |
Weighted number of ordinary shares with a Kr 1 of par | |||
value (hundred shares) | 33.546.000 | 33.546.000 | |
Earnings per share | 1,79 | 0,11 | |
74
VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD 1 JANUARY - 30 JUNE 2020
(Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
NOTE 29 - DERIVATIVE INSTRUMENTS
30 June 2020 | 31 December 2019 | |||
Fair Value | Fair Value | |||
Contract | Assets / | Contract | Assets / | |
amount | (Liabilities) | amount | (Liabilities) | |
Derivative financial assets: | ||||
Held for trading | ||||
Forward foreign currency transactions | 4.708.048 | 28.005 | 4.349.967 | 42.291 |
Cash flow hedge | ||||
Forward foreign currency transactions | 855.705 | 22.166 | 250.574 | 3.196 |
Derivative financial liabilities: | ||||
Held for trading | ||||
Forward foreign currency transactions | 443.288 | (4.093) | 3.702.635 | (42.532) |
Cash flow hedge | ||||
Forward foreign currency transactions | 2.260.066 | (34.487) | 988.469 | (10.060) |
8.267.107 | 11.591 | 9.291.645 | (7.105) | |
NOTE 30 - FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT
Foreign currency risk:
The Group is exposed to exchange rate risk due to its foreign currency denominated transactions. The main principle of foreign currency risk management is to maintain foreign exchange position at the level that minimizes the impact of foreign exchange fluctuations.
Derivative instruments are used in foreign currency risk management where necessary. In this respect the Group mainly prefers using foreign exchange forward contracts.
75
VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD 1 JANUARY - 30 JUNE 2020
(Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
NOTE 30 - FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (Cont'd)
Other (TL | ||||
30 June 2020 | USD | EUR | Equivalent) | TL Equivalent |
1. Trade receivables | 80.417 | 78.816 | - | 1.157.759 |
2a. Monetary financial assets (including | ||||
cash and cash equivalents) | 23.293 | 22.759 | 1.807.170 | 2.141.976 |
2b. Non-monetary financial assets | - | - | - | - |
3. Other | 112.487 | 46.856 | - | 1.130.834 |
4. Current assets (1+2+3) | 216.197 | 148.431 | 1.807.170 | 4.430.569 |
5. Trade receivables | - | - | - | - |
6a. Monetary financial assets | - | - | - | - |
6b. Non-monetary financial assets | 501 | 5.093 | - | 42.686 |
7. Other | 601.729 | - | - | 4.117.150 |
8. Non-current assets (5+6+7) | 602.230 | 5.093 | - | 4.159.836 |
9. Total assets (4+8) | 818.427 | 153.524 | 1.807.170 | 8.590.405 |
10. Trade payables | 636.809 | 109.830 | 16.248 | 5.220.014 |
11. Financial liabilities | 291.899 | 129.401 | - | 2.994.681 |
12a. Other monetary liabilities | 3.073 | 1.379 | 11.282 | 42.938 |
12b. Other non-monetary liabilities | - | - | - | - |
13. Current liabilities (10+11+12) | 931.781 | 240.610 | 27.530 | 8.257.633 |
14. Trade payables | - | - | - | - |
15. Financial liabilities | 33.126 | 13.740 | - | 332.569 |
16a. Other monetary liabilities | - | - | - | - |
16b. Other non-monetary liabilities | - | - | - | - |
17. Non-current liabilities (14+15+16) | 33.126 | 13.740 | - | 332.569 |
18. Total liabilities (13+17) | 964.907 | 254.350 | 27.530 | 8.590.202 |
19. Off-balance sheet derivative instruments | ||||
net asset / (liability) position (19a+19b) | 433.854 | (134.134) | (22.528) | 1.912.057 |
19a. Hedged total assets | 807.292 | 207.374 | 48.359 | 7.170.493 |
19b. Hedged total liabilities | (373.438) | (341.508) | (70.887) | (5.258.436) |
20. Net foreign currency asset/ (liability) | ||||
position (9-18+19) | 287.374 | (234.960) | 1.757.112 | 1.912.260 |
21. Net foreign currency monetary asset/ | ||||
(liability) position | ||||
(=1+2a+5+6a-10-11-12a-14-15-16a) | (861.197) | (152.775) | 1.779.640 | (5.290.467) |
22. Fair value of financial instruments used | ||||
in foreign currency hedging | - | - | - | 11.591 |
23. Export | 243.299 | 513.241 | 495.083 | 6.386.992 |
24. Import | 444.923 | 73.174 | 2.065 | 3.370.726 |
76
VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD 1 JANUARY - 30 JUNE 2020
(Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
NOTE 30 - FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (Cont'd)
Other (TL | ||||
31 December 2019 | USD | EUR | Equivalent) | TL Equivalent |
1. Trade receivables | 120.347 | 166.085 | 454.618 | 2.274.068 |
2a. Monetary financial assets (including | ||||
cash and cash equivalents) | 62.236 | 21.927 | 1.525.566 | 2.041.088 |
2b. Non-monetary financial assets | - | - | - | - |
3. Other | 96.936 | - | - | 575.819 |
4. Current assets (1+2+3) | 279.519 | 188.012 | 1.980.184 | 4.890.975 |
5. Trade receivables | - | - | - | - |
6a. Monetary financial assets | - | - | - | - |
6b. Non-monetary financial assets | 1.936 | 4.031 | - | 38.309 |
7. Other | 514.071 | 117 | - | 3.054.463 |
8. Non-current assets (5+6+7) | 516.007 | 4.148 | - | 3.092.772 |
9. Total assets (4+8) | 795.526 | 192.160 | 1.980.184 | 7.983.747 |
10. Trade payables | 757.779 | 128.994 | 12.612 | 5.371.858 |
11. Financial liabilities | 294.035 | 154.820 | - | 2.776.272 |
12a. Other monetary liabilities | 9.461 | 2 | 5.537 | 61.751 |
12b. Other non-monetary liabilities | - | - | - | - |
13. Current liabilities (10+11+12) | 1.061.275 | 283.816 | 18.149 | 8.209.881 |
14. Trade payables | - | 905 | - | 6.019 |
15. Financial liabilities | 41.054 | 18.619 | - | 367.696 |
16a. Other monetary liabilities | - | - | - | - |
16b. Other non-monetary liabilities | - | - | - | - |
17. Non-current liabilities (14+15+16) | 41.054 | 19.524 | - | 373.715 |
18. Total liabilities (13+17) | 1.102.329 | 303.340 | 18.149 | 8.583.596 |
19. Off-balance sheet derivative instruments | ||||
net asset / (liability) position (19a+19b) | 241.412 | 25.196 | (2.320.891) | (719.287) |
19a. Hedged total assets | 857.412 | 334.503 | 484.285 | 7.802.129 |
19b. Hedged total liabilities | (616.000) | (309.307) | (2.805.176) | (8.521.416) |
20. Net foreign currency asset/ (liability) | ||||
position (9-18+19) | (65.391) | (85.984) | (358.856) | (1.319.136) |
21. Net foreign currency monetary asset/ | ||||
(liability) position | ||||
(=1+2a+5+6a-10-11-12a-14-15-16a) | (919.746) | (115.328) | 1.962.035 | (4.268.440) |
22. Fair value of financial instruments used | ||||
in foreign currency hedging | - | - | - | (7.105) |
23. Export | 647.153 | 1.207.925 | 1.261.120 | 14.363.541 |
24. Import | 1.095.309 | 196.440 | 2.217 | 7.462.087 |
77
VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD 1 JANUARY - 30 JUNE 2020
(Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
NOTE 30 - FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (Cont'd)
As of 30 June 2020 and 31 December 2019 sensitivity analysis of foreign exchange rates is presented in below tables. Secured portions include impact of off-balance sheet derivative instruments.
Gain / Loss | Equity | |||
Foreign | Foreign | Foreign | Foreign | |
exchange | exchange | exchange | exchange | |
30 June 2020 | appreciation | depreciation | appreciation | depreciation |
+/- 10% fluctuation of USD rate: | ||||
USD net asset / liability | (589.248) | 589.248 | (589.248) | 589.248 |
Secured portion from USD risk (-) | 70.814 | (70.814) | 294.960 | (294.960) |
USD net effect | (518.434) | 518.434 | (294.288) | 294.288 |
+/- 10% fluctuation of EUR rate: | ||||
EUR net asset / liability | (117.762) | 117.762 | (117.762) | 117.762 |
Secured portion from EUR risk (-) | 40.968 | (40.968) | (103.987) | 103.987 |
EUR net effect | (76.794) | 76.794 | (221.749) | 221.749 |
+/- 10% fluctuation of other currency | ||||
rates: | ||||
Other currencies net asset / liability | 177.964 | (177.964) | 177.964 | (177.964) |
risk (-) | (206.440) | 206.440 | (245.264) | 245.264 |
Other currency net effect | (28.476) | 28.476 | (67.300) | 67.300 |
78
VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD 1 JANUARY - 30 JUNE 2020
(Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
NOTE 30 - FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (Cont'd)
Gain / Loss | Equity | |||
Foreign | Foreign | Foreign | Foreign | |
exchange | exchange | exchange | exchange | |
31 December 2019 | appreciation | depreciation | appreciation | depreciation |
+/- 10% fluctuation of USD rate: | ||||
USD net asset / liability | (546.347) | 546.347 | (546.347) | 546.347 |
Secured portion from USD risk (-) | 89.603 | (89.603) | 141.573 | (141.573) |
USD net effect | (456.744) | 456.744 | (404.774) | 404.774 |
+/- 10% fluctuation of EUR rate: | ||||
EUR net asset / liability | (76.700) | 76.700 | (76.700) | 76.700 |
Secured portion from EUR risk (-) | 61.738 | (61.738) | 15.948 | (15.948) |
EUR net effect | (14.962) | 14.962 | (60.752) | 60.752 |
+/- 10% fluctuation of other currency | ||||
rates: | ||||
Other currencies net asset / liability | 196.204 | (196.204) | 196.204 | (196.204) |
risk (-) | (246.481) | 246.481 | (246.481) | 246.481 |
Other currency net effect | (50.277) | 50.277 | (50.277) | 50.277 |
NOTE 31 - SUBSEQUENT EVENTS
None.
79
VESTEL ELEKTRONİK SANAYİ VE TİCARET ANONİM ŞİRKETİ
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD 1 JANUARY - 30 JUNE 2020
(Amounts expressed in thousands of Turkish Lira ("TL") unless otherwise indicated.)
NOTE 32- OTHER MATTERS THAT MAY AFFECT THE FINANCIAL STATEMENTS OR TO BE EXPLAINED FOR THE FINANCIAL STATEMENTS TO BE INTERPRETABLE AND EXPLAINABLE
The necessary actions were taken by the management to minimize the possible effects of the COVID-19 pandemic on the Group's activities and financial status, which occurred in China at the end of 2019 and influenced the whole world. In order to avoid disruptions in the production processes, the raw material procurement processes were similar to the pre-pandemic period, considering the condition of the countries where the raw material was supplied. Production was suspended for a week during the peak of the pandemic.
With the start of normalization process in the countries where the Group exports goods, the desired level of demand is reached and it has contributed positively to the Group's financial stability. While preparing the interim financial statements dated 30 June 2020, the Group re-evaluated the effects of the COVID-19 pandemic and the estimates and assumptions used in the financials. Impairments that may occur in Group's assets have been tested and no impairment has been identified.
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Vestel Elektronik Sanayi Ve Ticaret AS published this content on 19 August 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 21 August 2020 08:45:00 UTC