Halk Gayrimenkul Yatirim Ortakligi AsBIST: HLGYO

31.12.2023 - Solo Independent Auditor’s Report

Nov 14, 2024 at 6:22 AM UTC · Issued by Halk Gayrimenkul Yatirim Ortakligi AS

HALK GAYRİMENKUL YATIRIM

ORTAKLIĞI A.Ş.

UNCONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2023 AND INDEPENDENT AUDITOR'S REPORT

(CONVENIENCE TRANSLATION OF FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH)

INDEX		PAGE
UNCONSOLIDATED STATEMENT OF FINANCIAL POSITION	1-3
UNCONSOLIDATED STATEMENT OF PROFIT OR LOSS AND
OTHER COMPREHENSIVE INCOME	4
UNCONSOLIDATED STATEMENT OF CHANGES IN EQUITY	5
UNCONSOLIDATED STATEMENT OF CASH FLOWS	6
NOTES TO THE UNCONSOLIDATED FINANCIAL STATEMENTS
1.	ORGANIZATION AND OPERATIONS OF THE COMPANY	7
2.	BASIS OF PRESENTATION OF THE FINANCIAL STATEMENTS	9
3.	INTERESTS IN OTHER ENTITIES	30
4.	RELATED PARTY DISCLOSURES	32
5.	TRADE RECEIVABLES AND TRADE PAYABLES	35
6.	INVENTORIES	36
7.	PREPAID EXPENSES AND DEFERRED INCOME	37
8.	LIABILITIES ARISING FROM CUSTOMER CONTRACTS	38
9.	INVESTMENT PROPERTIES	39
10.	PROPERTY, PLANT AND EQUIPMENT	44
11.	INTANGIBLE ASSETS	46
12.	PROVISIONS, CONTINGENT ASSETS AND LIABILITIES	47
13.	EMPLOYEE BENEFITS	55
14.	OTHER ASSETS AND LIABILITIES	56
15.	SHARE CAPITAL, RESERVES VE OTHER EQUITY ITEMS	57
16.	REVENUE AND COST OF SALES	61
17.	EXPENSES BY NATURE	62
18.	GENERAL ADMINISTRATIVE EXPENSES, MARKETING AND SALES EXPENSES	63
19.	OTHER INCOME AND EXPENSES FROM OPERATING ACTIVITIES	65
20.	FINANCE EXPENSES	65
21.	INCOME TAXES	65
22.	EARNINGS PER SHARE	66
23.	FINANCIAL INSTRUMENTS	66
24.	NATURE AND LEVEL OF RISKS ARISING FROM FINANCIAL INSTRUMENTS	68
25.	FINANCIAL INSTRUMENTS (FAIR VALUE DISCLOSURES)	75

26. EVENTS AFTER THE REPORTING PERIOD ………..………………………………………….…...76

27.

NOTES ON THE STATEMENT OF CASH FLOWS

28. DISCLOSURE OF OTHER MATTERS THAT MAY AFFECT FINANCIAL STATEMENTS

SIGNIFICANTLY OR IS NECESSARY FOR FINANCIAL STATEMENTS TO BE CLEAR,
INTERPRETABLE AND COMPREHENSIBLE	77

29. FINANCIAL INVESTMENTS………………………………………………………………………….79

APPENDIX 1CONTROL OF COMPLIANCE WITH RESRICTION ON THE PORTFOLIO

HALK GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş.

AUDITED STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2023

(Amounts expressed in thousands of Turkish Lira (TL) in terms of the purchasing power of the Turkish Lira (TL) as at 31 December 2023, unless otherwise stated.)

			Restated
		Audited	Audited
		31 December	31 December
	Notes	2023	2022
ASSETS
Current Assets		2,037,154,202	1,551,068,038
Cash and Cash Equivalents	27	64,665,139	169,465,833
Trade Receivables	5	21,698,017	12,395,152
Trade Receivables from Related Parties	4	19,250,000	-
Trade Receivables from Third Parties		2,448,017	12,395,152
Inventories	6	1,580,106,743	994,230,043
Prepaid Expenses	7	21,232,491	5,909,404
Prepaid Expenses to Third Parties		21,232,491	5,909,404
Current Tax Assets		613,696	1,428,956
Other Current Assets	14	348,838,114	367,638,648
Other Current Assets from Third Parties		348,838,114	367,638,648
Non-Current Assets		24,476,939,624	22,012,200,302
Financial Investments	29	226,779,528	226,779,528
Investments in associates, joint ventures and subsidiaries	29	226,779,528	226,779,528
Investment Properties	9	24,153,683,893	21,334,678,234
Property, Plant and Equipment	10	13,401,171	14,570,617
Intangible Assets	11	4,395,752	4,535,396
Other Intangible Assets		4,395,752	4,535,396
Prepaid Expenses	7	78,679,280	431,636,526
Prepaid Expenses to Related Parties	4	6,364,554	3,130,430
Prepaid Expenses to Third Parties		72,314,724	428,506,096
TOTAL ASSETS		26,514,093,826	23,563,268,339

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

HALK GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş.

AUDITED STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2023

(Amounts expressed in thousands of Turkish Lira (TL) in terms of the purchasing power of the Turkish Lira (TL) as at 31 December 2023, unless otherwise stated.)

	Notes
Current Liabilities
Short-Term Borrowings	23
Short-Term Borrowings from Related Parties	4
Short-Term Borrowings from Third Parties
Short-Term Portion of Long-Term Borrowings	23
Short-Term Portion of Long-Term
Borrowings from Related Parties	4
Trade Payables	5
Trade Payables to Related Parties	4
Trade Payables to Third Parties
Liabilities Arising from Customer Contracts	8
Deferred Income to Related Parties	4
Contractual Liabilities Arising from Sales of Goods and Services
Short-Term Provisions
Short-Term Portion of Provisions Related to
Employee Benefits	13
Other Short-Term Provisions	12
Other Current Liabilities	14
Other Current Liabilities to Third Parties
Non-Current Liabilities
Long-Term Borrowings	23
Long-Term Borrowings from Related Parties	4
Long-Term Borrowings from Third Parties
Trade Payables	5
Trade Payables to Related Parties	4
Liabilities Arising from Customer Contracts	8
Deferred Income to Related Parties	4
Deferred Income to Third Parties
Long-Term Provisions	13
Long-Term Provisions Related to
Employee Benefits

	Restated
Audited	Audited
31 December	31 December
2023	2022
3,357,989,079	3,181,792,894
1,111,933,520	1,181,090,322
1,110,368,898	1,179,581,194
1,564,622	1,509,128
556,268,104	33,182,011
556,268,104	33,182,011
111,255,727	624,812,230
-	45,198
111,255,727	624,767,032
1,456,772,275	1,146,576,533
435,426,186	346,023,300
1,021,346,089	800,553,233
12,567,480	10,539,320
10,134,481	9,406,527
2,432,999	1,132,794
109,191,972	185,592,478
109,191,972	185,592,478
3,078,627,903	2,857,736,166
1,877,632,311	1,461,631,698
1,876,793,650	1,459,354,931
838,662	2,276,767

140,057,050
140,057,050
1,195,729,616 1,251,154,297

1,195,729,616	1,251,154,297
-	-
5,265,976	4,893,122
5,265,976	4,893,122

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

HALK GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş.

AUDITED STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2023

(Amounts expressed in thousands of Turkish Lira (TL) in terms of the purchasing power of the Turkish Lira (TL) as at 31 December 2023, unless otherwise stated.)

			Restated
		Audited	Audited
		31 December	31 December
	Notes	2023	2022
EQUITY		20,077,476,844	17,523,739,279
Paid-in Capital	15	1,645,000,000	1,570,000,000
Capital Adjustment Differences	15	7,832,593,919	7,827,517,457
Treasury Shares (-)	15	(39,390,720)	(33,160,263)
Share Premiums/Discounts		461,875,993	483,426,770
Accumulated Other Comprehensive Income or Expenses that will		1,307,567	(1,993,903)
not be Reclassified to Profit or Loss

- Gains on Remeasurement of Defined Benefit Plans		1,307,567	(1,993,903)
Restricted Reserves Appropriated from Profit	15	446,479,934	439,534,349
Prior Years' Profit or Losses		7,155,823,202	222,191,281
Net Profit or Loss for the Period		2,573,786,950	7,016,223,589
TOTAL LIABILITIES AND EQUITY		26,514,093,826	23,563,268,339

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

HALK GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş.

AUDITED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE PERIOD 1 JANUARY - 31 DECEMBER 2023

(Amounts expressed in thousands of Turkish Lira (TL) in terms of the purchasing power of the Turkish Lira (TL) as at 31 December 2023, unless otherwise stated.)

			Restated
		Audited	Audited
		1 January-	1 January-
		31 December	31 December
	Notes	2023	2022
Revenue	16	1,384,266,549	298,257,253
Cost of Sales (-)	16	(869,228,367)	(73,938,111)
Gross Profit (Loss) from Trading Activities		515,038,182	224,319,142
GROSS PROFIT/LOSS		515,038,182	224,319,142
General Administrative Expenses (-)	18	(122,801,506)	(69,838,364)
Marketing Expenses (-)	18	(30,079,682)	(12,841,891)
Other Income from Operating Activities	19	2,235,891,478	6,373,117,691
Other Expenses from Operating Activities (-)	19	(23,497,629)	(77,778,773)
OPERATING PROFIT (LOSS)		2,574,550,841	6,436,977,805
OPERATING PROFIT (LOSS) BEFORE
FINANCE INCOME (EXPENSE)		2,574,550,841	6,436,977,805
Finance Expenses (-)	20	(574,715,030)	(81,040,049)
Net Monetary Position Gains/(Losses)		573,951,139	660,285,833
PROFIT (LOSS) BEFORE TAX FROM
CONTINUING OPERATIONS		2,573,786,950	7,016,223,589
PROFIT FOR THE PERIOD		2,573,786,950	7,016,223,589
PROFIT (LOSS) FOR THE PERIOD		2,573,786,950	7,016,223,589
Distribution of Profit/Loss for the Period
Parent Company Shares Earnings per Share		1.5646	4.2652
Gain on Remeasurement of Defined
Benefit Plans		2,517,657	(1,271,094)
TOTAL COMPREHENSIVE INCOME (EXPENSE)		2,576,304,607	7,014,952,495

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

HALK GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş.

AUDITED STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD 1 JANUARY - 31 DECEMBER 2023

(Amounts expressed in thousands of Turkish Lira (TL) in terms of the purchasing power of the Turkish Lira (TL) as at 31 December 2023, unless otherwise stated.)

						Accumulated Other
						Comprehensive Income or
						Expenses that will not be
						Reclassified to Profit or
						Loss		Retained Earnings
							Restricted
					Share	Accumulated Gains/Losses	Reserves
			Capital Adjustment	Treasury	Premiums /	on Remeasurement of	Appropriated from	Prior Years' Profit	Net Profit / Loss
	Notes	Paid-in Capital	Differences	Shares	Discounts	Defined Benefit Plans	Profit	/ Losses	for the Period	Equity
Balances as of 1 January 2022	15	1,020,000,000	7,533,679,222	(28,756,004)	260,556,938	100,516	253,172,025	222,191,281	-	9,260,943,979
Total Comprehensive Income		-	-	-	222,869,832	(2,094,420)	186,362,323	-	7,016,223,589	7,423,361,325
Capital Increase	15	550,000,000	293,838,235	(4,404,259)	-	-	-	-	-	839,433,976
Balances as of 31 December 2022	15	1,570,000,000	7,827,517,457	(33,160,263)	483,426,770	(1,993,903)	439,534,349	222,191,281	7,016,223,589	17,523,739,279
Balances as of 1 January 2023	15	1,570,000,000	7,827,517,457	(33,160,263)	483,426,770	(1,993,903)	439,534,349	222,191,281	7,016,223,589	17,523,739,279
Transfers		-	-	-	-	-	-	7,016,223,589	(7,016,223,589)	-
Total Comprehensive Income		-	-	-	(21,550,778)	3,301,471	6,945,585	(82,591,667)	2,573,786,950	2,479,891,561
Increase/Decrease Due to Share Repurchase Transactions	15	-	-	(4,434,528)	-	-	-	-	-	(4,434,528)
Capital Increase	15	75,000,000	5,076,462	(1,795,929)	-	-	-	-	-	78,280,533
Balances as of 31 December 2023	15	1,645,000,000	7,832,593,919	(39,390,720)	461,875,993	1,307,567	446,479,934	7,155,823,202	2,573,786,950	20,077,476,845

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

HALK GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş.

AUDITED STATEMENT OF CASH FLOWS

FOR THE PERIOD 1 JANUARY - 31 DECEMBER 2023

(Amounts expressed in thousands of Turkish Lira (TL) in terms of the purchasing power of the Turkish Lira (TL) as at 31 December 2023, unless otherwise stated.)

		Restated
	Audited	Audited
	1 January-	1 January-
	31 December	31 December
Notes	2023	2022
A. Cash Flows From Operating Activities
Profit for the Period	2,573,786,950	7,016,223,589
Adjustments Related to Reconciliation of Net Profit for the Period

- Adjustments Related to Depreciation and Amortization Expenses	10-11
- Adjustments Related to Provisions	5-12-13
- Adjustments Related to Interest Income and Expenses	16-20-27
- Adjustments Related to Fair Value Losses/Gains	9
- Adjustments Related to Gains/Losses on Disposal of Non-Current
Assets	10-11
- Adjustments Related to Gains/Losses on Disposal of
Investment Properties	16.1-16.2
Changes in working capital
- Adjustments Related to (Increase) / Decrease in Inventories	6

Adjustments Related to (Increase) / Decrease in Trade Receivables
Adjustments Related to (Increase) / Decrease in Prepaid Expenses
Adjustments Related to (Increase) / Decrease in Other Assets
Adjustments Related to Increase / (Decrease) in Trade Payables
Adjustments Related to Increase/Decrease in Deferred Income
Adjustments Related to Increase / (Decrease) in Other Liabilities

Cash Flows Generated from Operations
Interest Received
B. Cash Flows from Investing Activities
Cash Outflows from Acquisition of Property, Plant
and Equipment and Intangible Assets	10-11
Cash Outflows from Investment
Property Investments	9
Cash Inflows from Sale of
Investment Properties	9
C. Cash Flows from Financing Activities
Cash Inflows from Borrowing
Cash Outflows Related to Debt Payments
Cash Outflows Related to Debt Payments
from Financial Leasing Contracts
Cash Inflows from Capital Increase
Dividends Paid
Interest Paid
NET INCREASE/DECREASE IN CASH AND
CASH EQUIVALENTS (A+B+C)
D. CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD
INFLATION EFFECT ON CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD
(A+B+C+D)	27

6,106,806	8,822,972
2,620,962	6,594,355
545,222,570	(40,305,485)
(2,210,683,328)	(6,294,383,745)
-
14,733	-
50,666,556	27,183,750
(585,876,700)	(817,328,004)
(9,522,037)	(8,531,086)
337,634,161	(353,341,929)
19,615,795	(476,210,349)
(653,613,553)	628,270,723
254,771,061	1,397,679,525
(328,747,105)	253,150,903
1,996,871	1,347,825,219
12,270,837	40,305,485
14,267,708	1,388,130,704
(4,812,459)	(8,321,426)
(1,440,706,095)	(3,816,079,194)
832,383,764	49,659,109
(613,134,789)	(3,774,741,511)
2,455,550,000	5,237,539,256
(2,016,251,429)	(3,570,218,596)
(56,494,617)	-
78,280,533	839,433,976
(6,230,457)	(4,404,259)
(70,446,063)	(33,115,824)
384,407,967	2,469,234,553
(214,459,114)	82,623,746
169,351,561	52,795,894
109,694,087	33,931,921
64,586,534	169,351,561

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

HALK GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş.

NOTES TO THE AUDITED FINANCIAL STATEMENTS

AS OF 31 DECEMBER 2023

(Amounts expressed in thousands of Turkish Lira (TL) in terms of the purchasing power of the Turkish Lira (TL) as at 31 December 2023, unless otherwise stated.)

1. ORGANIZATION AND OPERATIONS OF THE COMPANY

The main activity of Halk Gayrimenkul Yatırım Ortaklığı A.Ş (the "Company") is to invest in properties, property projects, rights on properties, property related capital market instruments and portfolio including other rights and assets as deem appropriate by the Capital Markets Board of Turkey ("CMB") The Company, its joint operations and its subsidiary will be described as ("Group") in this report (see also Note 2.1 and Note 3). In accordance with the relevant articles of the CMB's Communiqué on the Principles of Real Estate Investment Trusts, the main objective of the Company is to invest in properties, property projects, property rights and capital market instruments.

The operations of the Company, its portfolio management policies and limitations are consistent with the regulatory requirements of the CMB. Investment property portfolio of the Company consists of lands and rental properties which are used as bank branches and bank headquarter. The Company obtained its license to operate by the CMB's approval dated 24 September 2010 and numbered 9546, and registered in the CMB. The registered capital ceiling of the Company is TL 7,500,000,000. (The registered capital ceiling before 22 August 2023 is TL 2,500,000,000.). On 21 September 2023, the capital of the Company was increased to TL 1,645,000,000 with a capital increase of TL 75,000,000.

The headquarter of the Company is registered in Barbaros Mah. Begonya Sk. WBC İş Merkezi No:2H Ataşehir / İstanbul'dur.

As of 31 December 2023, the number of personnel employed in the Company is 43 (31 December 2022: 45)

The Company is a subsidiary of Türkiye Halk Bankası A.Ş ("Halkbank") and was registered on 18 October 2010. With the amendment dated 31 December 2009 made by the CMB the Communiqué on the Principles of Real Estate Investment Trusts, it is obligatory that the shares of trusts representing a minimum 25% of their capital be issued within three months of either the establishment of the investment trust or the related amendment to the articles of association being registered with the Trade Registry, are offered to public and that they apply to the CMB with the request that all shares to be registered.

The Company has applied to the CMB on 29 August 2012 to increase the issued capital from TL 477,000,000 to TL 662,500,000 within TL 1,500,000,000 registered capital ceiling (The registered capital ceiling as of 2 September 2020 is TL 2,500,000,000.), by initial public offering of the increase of TL 185,500,000 B group bearer shares. The application was approved in accordance with the CMB's decision numbered 4/97 on 8 February 2013. During 13-15 February 2013, TL 185,500,000 B group shares offered to public by restricting the preemptive rights of the existing shareholders. After the collection of the investors demand, the Company's shares started to be traded on İstanbul Stock Exchange with HLGYO title as of 22 February 2013.

The Company's application to the Capital Markets Board regarding the increase of its issued capital from TL 1,020,000,000 by 50% to TL 1,530,000,000, all in cash, within the registered capital ceiling of TL 2,500,000,000, was approved at the meeting of the Market Board dated 24 February 2022 No. 10-282 and announced in the Capital Markets Bulletin dated 24 February 2022 No. 2022/10. Bearer shares with a nominal value of TL 510,000,000 were made available for 15 days between 2 March 2022 and 16 March 2022, in accordance with the principles stated in the prospectus. The new form of Article 8 of the Articles of Association titled "Capital and Shares" regarding the increase of the Company's capital to TL 1,570,000,000,000 was approved by the Capital Markets Board on 18 May 2022. The new form of Article 8 of the Articles of Association, titled "Capital and Shares", regarding the increase of the Company's capital to TL 1,645,000,000, was approved by the Capital Markets Board on 14 September 2023.

HALK GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş.

NOTES TO THE AUDITED FINANCIAL STATEMENTS

AS OF 31 DECEMBER 2023

(Amounts expressed in thousands of Turkish Lira (TL) in terms of the purchasing power of the Turkish Lira (TL) as at 31 December 2023, unless otherwise stated.)

1. ORGANIZATION AND OPERATIONS OF THE COMPANY (cont'd)

Capital increase details are given below:

Date	Share Capital	Capitalisation	Increase value	Funds
18	October 2010	477,000,000	Rights Issue	-	Funding Capital
15	August 2012	662,500,000	Rights Isseu	185,500,000	Public Offering
20	June 2013	673,638,704	Bonus Issue	11,138,704	Prior Years' Profit
5 June 2014	697,900,000	Bonus Issue	24,261,296	Prior Years' Profit
11	June 2015	743,000,000	Bonus Issue	45,100,000	Prior Years' Profit
25	May 2016	790,000,000	Bonus Issue	47,000,000	Prior Years' Profit
15	August 2017	820,000,000	Bonus Issue	30,000,000	Prior Years' Profit
8 August 2018	858,000,000	Bonus Issue	38,000,000	Prior Years' Profit
17	June 2019	928,000,000	Bonus Issue	70,000,000	Prior Years' Profit
20	August 2020	970,000,000	Bonus Issue	42,000,000	Prior Years' Profit
20	May 2021	1,020,000,000	Bonus Issue	50,000,000	Prior Years' Profit
25	March 2022	1,530,000,000	Rights Issue	510,000,000	Bonus Cash
18	May 2022	1,570,000,000	Bonus Issue	40,000,000	Prior Years' Profit
15	September 2023	1,645,000,000	Bonus Issue	75,000,000	Prior Years' Profit

On 4 September 2014, the Company has signed a Joint Operation Agreement with Vakıf Gayrimenkul Yatırım Ortaklığı A.Ş. for developing a real estate project.

On 14 April 2016, the Company has signed Joint Operation Agreement with Er Konut İnş. Taah. İnş. Malz. Nak. ve Mad. Tic. ve San. A.Ş. for developing a real estate project.

On 24 August 2017, the Company has signed a Joint Operation Agreement with Teknik Yapı Teknik Yapılar San.ve Tic. A.Ş. for developing a real estate project.

The Company established Halk Yapı Projeleri Geliştirme A.Ş. to develop all kinds of real estate projects on 15 December 2020. The entire capital of the company established belongs to Halk GYO.

The details of the Company's subsidiary and shares in joint operations are as follows:

Subsidiary	Type of activity	Main activity fields
Halk Yapı Projeleri Geliştirme A.Ş.	Construction	Real Estate Construction
Shares in joint operations	Type of activity	Main activity fields
Halk GYO-Vakıf GYO Joint Venture	Construction	Real Estate Construction
Halk GYO-Erkonut Joint Venture	Construction	Real Estate Construction
Teknik Yapı-Halk GYO Joint Venture	Construction	Real Estate Construction

Approval of unconsolidated financial statements:

The Board of Directors has approved the financial statements and delegated authority for publishing it on 17 May 2024. The General Assembly has the authority to modify the financial statements.

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