(Convenience translation of consolidated financial statements originally issued in Turkish)
Polisan Holding A.Ş.
Consolidated financial statements for the period 1 January - 31 December 2024 together with independent auditors' report
CONVENIENCE TRANSLATION INTO ENGLISH OF
INDEPENDENT AUDITOR'S REPORT ORIGINALLY ISSUED IN TURKISH
INDEPENDENT AUDITOR'S REPORT
To the General Assembly of Polisan Holding A.Ş.
A. Audit of the consolidated financial statements
1. Our opinion
We have audited the accompanying consolidated financial statements of Polisan Holding A.Ş. (the "Company") and its subsidiaries (collectively referred to as the "Group") which comprise the consolidated statement of financial position as at 31 December 2024, the consolidated statement of profit or loss, the consolidated statement of other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended and notes to the consolidated financial statements comprising a summary of significant accounting policies.
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Group as at 31 December 2024, and its financial performance and its cash flows for the year then ended in accordance with Turkish Financial Reporting Standards ("TFRS").
2.
Basis for opinion
Our audit was conducted in accordance with the Standards on Independent Auditing (the "SIA") that are part of Turkish Standards on Auditing adopted within the framework of the regulations of the Capital Markets Board and issued by the Public Oversight Accounting and Auditing Standards Authority (the
"POA"). Our responsibilities under these standards are further described in the "Auditor's Responsibilities for the Audit of the Consolidated Financial Statements" section of our report. We hereby declare that we are independent of the Group in accordance with the Ethical Rules for Independent Auditors (including
Independence Standards) (the "Ethical Rules") the ethical requirements regarding independent audit in regulations issued by the POA; the regulations of the Capital Markets Board; and other relevant legislation are relevant to our audit of the financial statements. We have also fulfilled our other ethical responsibilities in accordance with the Ethical Rules and regulations. We believe that the audit evidence we have obtained during the independent audit provides a sufficient and appropriate basis for our opinion.
3.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. Key audit matters were addressed in the context of our independent audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
PwC Bağımsız Denetim ve Serbest Muhasebeci Mali Müşavirlik A.Ş.
Kılıçali Paşa Mah. Meclis-i Mebusan Cad. No:8 İç Kapı No:301 Beyoğlu/İstanbul
T: +90 212 326 6060, F: +90 212 326 6050,www.pwc.com.tr Mersis Numaramız: 0-1460-0224-0500015
Key Audit Matters | How the key audit matter was addressed in the audit |
Valuation studies to determine the fair values of investment properties | |
Investment properties with a carrying value of TL 4,352,875,754 that have a significant share in the Group's total assets as of 31 December 2024; consists of land, office and commercial units. The accounting policy adopted by the Group management in the accounting of the said investment properties is the fair value method, the details of which are explained in Notes 2 and 13, and the fair values of these assets are determined by an independent valuation firm accredited by the Capital Markets Board and the Group management's evaluations. It is then taken as the basis for carrying value in the balance sheet. In determining the fair values of investment properties, methods such as market value comparison and discounted cash flow are used, and these methods include inputs based on important assumptions such as real discount and inflation that may cause changes during the fair value determination. fair values; market conditions are directly affected by factors such as the detailed characteristics of each real estate. The study on the determination of the fair value of investment properties has been determined as a key audit matter, since the book value of investment properties constitutes a significant part of the Group's total assets, as well as the subjective nature of valuations, important assumptions and judgments. | During our audit, the following audit procedures were applied regarding the fair value of investment properties.
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Inputs such as rental income, duration of lease
the valuation reports and whether the footnote
Key Audit Matters | How the key audit matter was addressed in the audit |
Application of TAS 29 - Financial Reporting in Hyperinflationary Economies | |
As described in Note 2, TAS 29 "Financial reporting in hyperinflationary economies" is effective for the Group. TAS 29 requires financial statements to be restated into the current purchasing power at the end of the reporting period. Therefore, transactions in 2024 and non-monetary balances at the end of the period were restated to reflect a price index that is current at the balance sheet date as of 31 December 2024. The implementation of TAS 29 leads to a change in several of the Group's control activities pervasively related to financial reporting and the impact of TAS 29 is reliant upon a number of key judgements such as the relevant line items in the cost of sales and cash flow were restated on a quarterly average basis depending on the level of fluctuation of the underlying transactions and rate of inflation. The preparation of financial statements using a current purchasing power approach requires a complex series of procedures and reconciliations to ensure accurate results. We considered the application of TAS 29 to be a key audit matter due to judgement applied in the restatement, high degree of complexity in calculation and the risk of the data used in the restatement being incomplete or inaccurate. |
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comparing them with recognised practices and
4.
Responsibilities of management and those charged with governance for the consolidated financial statements
The Group management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with TFRS, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Group's financial reporting process.
5.
Auditor's responsibilities for the audit of the consolidated financial statements
Responsibilities of independent auditors in an independent audit are as follows:
Our aim is to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an independent auditor's report that includes our opinion. Reasonable assurance expressed as a result of an independent audit conducted in accordance with SIA is a high level of assurance but does not guarantee that a material misstatement will always be detected. Misstatements can arise from fraud or error. Misstatements are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.
As part of an independent audit conducted in accordance with SIA, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement in the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Assess the internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
• Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our independent auditor's report. However, future events or conditions may cause the
Group to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
• Plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the financial information of the entities or business units within the Group as a basis for forming an opinion on the consolidated financial statements. We are responsible for the direction, supervision and review of the audit work performed for purposes of the Group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence. We also communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards actions taken to eliminate threats or safeguards applied.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
B. Other responsibilities arising from regulatory requirements
1. No matter has come to our attention that is significant according to subparagraph 4 of Article 402 of
Turkish Commercial Code ("TCC") No. 6102 and that causes us to believe that the Company's
bookkeeping activities concerning the period from 1 January to 31 December 2024 period are not in compliance with the TCC and provisions of the Company's articles of association related to financial
reporting.
2. In accordance with subparagraph 4 of Article 402 of the TCC, the Board of Directors submitted the necessary explanations to us and provided the documents required within the context of our audit.
3. In accordance with subparagraph 4 of Article 398 of the TCC, the auditor's report on the early risk identification system and committee was submitted to the Company's Board of Directors on
7 March 2025.
PwC Bağımsız Denetim ve
Serbest Muhasebeci Mali Müşavirlik A.Ş.
Baki Erdal, SMMM
Independent Auditor
Istanbul, 7 March 2025
CONTENTS | Pages |
CONSOLIDATED STATEMENT OF FINANCIAL POSITION ...................................................... | 1-2 |
CONSOLIDATED STATEMENT OF PROFIT OR LOSS ............................................................. | 3 |
CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME .............................. | 4 |
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY ...................... | 5 |
CONSOLIDATED STATEMENT OF CASH FLOW ...................................................................... | 6 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ................................................ | 7-76 |
Note 1.Group's organisation and nature of operations ........................................................................ 7
Note 2.Basis of presentation of consolidated financial statements ...................................................... 9
Note 3.Segment reporting .................................................................................................................. 30
Note 4.Cash and cash equivalents ..................................................................................................... 33
Note 5.Financial borrowings ............................................................................................................... 33
Note 6.Trade receivable and payables ............................................................................................... 36
Note 7. Other receivable and payables .............................................................................................. 37
Note 8.Inventories .............................................................................................................................. 38
Note 9.Prepaid expenses and deferred income ................................................................................. 38
Note 10.Current income tax assets .................................................................................................... 39
Note 11.Investments accounted using the equity method ................................................................. 39
Note 12. Investment properties .......................................................................................................... 41
Note 13.Right of use asset ................................................................................................................. 43
Note 14.Property, plant and equipment .............................................................................................. 44
Note 15.Intangible assets ................................................................................................................... 46
Note 16.Provisions for employee benefits, contingent assets and liabilities ......................................... 477
Note 17.Government incentive and grants ......................................................................................... 50
Note 18.Employee benefits ................................................................................................................ 51
Note 19.Other assets and liabilities .................................................................................................... 53
Note 20.Capital, reserves and other equity items .............................................................................. 54
Note 21.Revenue and cost of sales ................................................................................................... 56
Note 22.General administrative, marketing, research and development expenses .......................... 57
Note 23.Expenses by nature .............................................................................................................. 59
Note 24.Other income and expenses from operations ....................................................................... 59
Note 25.Income and expenses from investment activities ................................................................. 60
Note 26.Financial income and expenses ........................................................................................... 61
Note 27. Net monetary position gains/(losses) .................................................................................. 61
Note 28.Income taxes (including deferred tax assets and liabilities) ................................................. 62
Note 29.Derrivative instruments ....................................................................................................... 626
Note 30.Earnings per share ............................................................................................................... 66
Note 31.Related party disclosuress .................................................................................................... 66
Note 32.Nature and level of risk derived from financial instruments .................................................. 68
Note 33.Financial instruments (Fair value and hedge accounting disclosures) ............................... 755
Note 34.Subsequent events ............................................................................................................... 76
Note 35.Fees for services received from independent audit firm ....................................................... 76
(Convenience translation of consolidated financial statements originally issued in Turkish)
Polisan Holding A.Ş.
Consolidated statement of financial position as of 31 December 2024
(Amounts expressed in thousands of Turkish Lira ("TRY") in terms of purchasing power of the TRY at 31 December 2024 unless otherwise indicated.)
Current period | Prior period | ||
Audited | Audited | ||
Assets | Notes | 31 December 2024 | 31 December 2023 |
Current assets | 2,639,515,422 | 3,007,758,465 | |
Cash and cash equivalents | 4 | 509,127,217 | 606,840,090 |
Trade receivables | 6 | 1,249,689,134 | 1,388,930,164 |
- Trade receivables from related parties | 31 | 11,537,022 | 43,397,961 |
- Trade receivables from third parties | 1,238,152,112 | 1,345,532,203 | |
Other receivables | 7 | 35,400,234 | 99,996,870 |
- Other receivables from third parties | 35,400,234 | 99,996,870 | |
Inventories | 8 | 472,367,639 | 418,918,177 |
Derivative assets | 29 | - | 18,232 |
Prepaid expenses | 9 | 40,123,963 | 142,208,582 |
Current income tax assets | 10 | 861,578 | 34,276,151 |
Other current assets | 19 | 201,197,016 | 316,570,199 |
Subtotal | 2,508,766,781 | 3,007,758,465 | |
Fixed assets classified as held for sale | 130,748,641 | - | |
Non-current assets | 16,815,450,568 | 17,115,160,798 | |
Other receivables | 7 | 1,012,578 | 1,404,759 |
- Other receivables from third parties | 1,012,578 | 1,404,759 | |
Investments accounted using the equity method | 11 | 4,079,983,545 | 4,635,597,633 |
Investment properties | 12 | 4,352,875,754 | 4,282,095,331 |
Tangible assets | 14 | 7,116,359,177 | 6,955,527,738 |
Right of use assets | 13 | 423,822,771 | 384,351,082 |
Intangible assets | 15 | 25,139,233 | 19,932,993 |
Prepaid expenses | 9 | 404,225,583 | 435,216,999 |
Deferred tax assets | 28 | 412,031,927 | 401,034,263 |
Total assets | 19,454,965,990 | 20,122,919,263 |
The consolidated financial statements for the period 1 January-31 December 2024 were approved and authorized for issue by the Board of Directors on 7 March 2025. The General Assembly has the authority to amend the consolidated financial statements.
The accompanying notes are an integral part of these financial statements.
(1)
(Convenience translation of consolidated financial statements originally issued in Turkish)
Polisan Holding A.Ş.
Consolidated statement of financial position as of 31 December 2024
(Amounts expressed in thousands of Turkish Lira ("TRY") in terms of purchasing power of the TRY at 31 December 2024 unless otherwise indicated.)
Liabilities | |||
Current liabilities | |||
Short-term borrowings | |||
Short-term portion of long-term borrowings | |||
Derivative liabilities | |||
Trade payables | 6 | 1,029,471,395 | 1,409,769,077 |
- Trade payables to related parties | 31 | 345,373 | 5,223,631 |
- Trade payables to third parties | 1,029,126,022 | 1,404,545,446 | |
Employee benefit obligations | 18 | 43,436,459 | 44,572,053 |
Other payables | 7 | 20,598,604 | 18,012,527 |
- Other payables to third parties | 20,598,604 | 18,012,527 | |
Current income tax liabilities | 28 | 22,838,785 | 83,456,704 |
Short term provisions | 86,480,838 | 47,721,686 | |
- Short term provisions for employee benefits | 18 | 82,478,150 | 43,820,641 |
- Other short term provisions | 16 | 4,002,688 | 3,901,045 |
Other current liabilities | 19 | 64,532,543 | 77,369,945 |
Non-current liabilities | 1,167,042,679 | 1,154,253,814 | |
Long-term borrowings | 5 | 113,881,821 | 407,408,963 |
Long-term provisions | 18 | 78,085,326 | 55,010,496 |
- Provisions for employee termination benefits | 78,085,326 | 55,010,496 | |
Deferred tax liabilities | 28 | 975,075,532 | 691,834,355 |
Equity | 15,434,191,576 | 16,257,753,075 | |
Equity holders of the parent | |||
Paid-in share capital | 20 | 758,500,000 | 758,500,000 |
Adjustment to share capital | 20 | 8,028,539,690 | 8,028,539,690 |
Share premium/discounts | 20 | 180,758,391 | 180,758,391 |
Other comprehensive income/expense not to be reclassified to | |||
profit or loss | 877,396,924 | 922,020,008 | |
- Revaluation and measurement gain / loss | 877,396,924 | 922,020,008 | |
Defined benefit plans re-measurement gain / (loss) | (162,970,242) | (118,347,158) | |
Revaluation increase related to tangible assets | 1,040,367,166 | 1,040,367,166 | |
Other comprehensive income or expense to be reclassified to | |||
profit/(loss) | (269,925,249) | (231,154,657) | |
- Currency translation differences | (269,925,249) | (231,154,657) | |
- Hedge reserves | - | - | |
Restricted reserves | 20 | 600,156,680 | 600,156,680 |
Retained earnings | 5,892,032,898 | 4,919,341,044 | |
Profit for the period | (633,267,758) | 1,079,591,919 | |
Total liabilities | 19,454,965,990 | 20,122,919,263 |
5529
2,853,731,735 | 2,710,912,374 |
1,351,151,567 235,221,544 - | 514,127,752 514,623,493 1,259,137 |
Current period | Prior period | |
Audited | Audited | |
31 December | 31 December | |
Notes | 2024 | 2023 |
The accompanying notes are an integral part of these financial statements.
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