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Company 6-21
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34-37
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1.1 Summary Info1.2 Capital and Shareholding Structure1.3 Board of Directors, Auditing Board and Auditing Committee1.4 Management Team1.5 Historical Background
Message from the Chairman
Financial Statements and Notes
Independent Audit Report
Operation
Sector of Operation
2.1 Turkish IT Sector2.2 Sub-segments of the IT Sector2.3 Growth of the IT Sector
Subsidiaries
3.1 Datagate Bilgisayar Malzemeleri Tic. A.Ş3.2 Neteks İletişim Ürünleri Dağıtım A.Ş.3.3 İnfin Bilgisayar Ticaret A.Ş.3.4 Teklos Teknoloji Lojistik A.Ş.
Contents
2015 Annual Report
2015 Annual Report
4
İstanbul, 16.05.2016
Dear Stakeholders;
Welcome to the General Assembly,
Last year, important advancements both in the world and in our country has taken place. Although being a year in
which two general elections took place, our company Index Computer, located within the Index Group, has made
the most profit of our 27-year history. Index Computer’s net profit in 2015 increased by 78% compared to the pre-
vious year, becoming 44.9 million YTL. 2023 technology lane in Europe aims to be the first in a group of five large
buildings, we renew our IT infrastructure investments in group companies, from start to finish. In this context, we
also completed our transition to SAP. This and other investments we have prepared together with our future-proof
our infrastructure.
The construction of the Seba Office Boulevard Project, which we have implemented with the Seba Building part-
5
2015 Annual Report
nership, is progressing rapidly. More than half from the total m2 has been sold. The conclusion of this project will
produce a result in which all our investors will be kept extremely happy.
We have many important plans for the subsequent periods, especially in IOT technology world that is the object
of the internet or ‘connected devices’. In addition, we aim to reach high growth in the mobile space with new in-
vestments and expansion of value-added solutions for this year, wearable technologies, cloud and our activities.
Our devotion to the Index Group motto “profitable, efficient, and growing”, which has been our guide for many
years, will continue. With our policy to have a growing profitable and efficient structure, we intend to continue our
leadership in the coming years. Our investments with changing our digital infrastructure, we have established a
very solid foundation. Therefore, the profits of our investments from 2015 will be more fruitful this year.
Due to our successful investments in 2015 and the good performance we have shown, we enter 2016 with greater
hope in effect. I sincerely believe that this will be a year information technology in the segments will show growth.
In short, I would like to welcome you to some of the figures from the financial statements for the year 2015:
As Index Computer;
• Accordingtotheresultsofend-year2015,theconsolidatednetsaleshaveincreasedby53%becoming
3 billion and 385 million YTL from 206 million YTL.
• Grossprofitof103millionYTLin2014,hasincreasedto153millionYTLwitharateof49%.
• Netsalesratioofoperatingexpensesof2,20%in2014hasdeclinedto1.81%in2015.
• Operatingprofitrosefrom58.5millionYTLto90.9millionYTLwitharateof55%.
• Theconsolidatednetprofitof25.2millionYTLin2014,roseto44.9millionYTLby78%.
• The2016goalwassetto4billionwith18%growth.
Index Computer was ranked 59th among Turkey’s largest 500 companies in Fortune 500, a magazine prepared by
Fortune Turkey which evaluates the companies operating in our country every year under different categories such
as profitability, growth rate, size and worth, in July 2015 according to 2014 results.
I would like to thank all our employees who contributed to our success in our financial results and our business
partners and suppliers and our valuable stakeholders.
Erol Bilecik
Chairman of the Board
6
01 THE COMPANY
2015 Annual Report
7
1.1 Highlights
• İndeksBilgisayarSistemleriMühendislikSanayiveTicaretA.Ş.,whichwasfoundedin1989tooperateinthecomputerfield,hasbecameacompanydistributingabout200worldwidebran-dsandcooperatingwithover7.500businesspartners,holdingtheleadershippositionofthesectorforalongtime.ItispubliclytradingatIstanbulStockExchangesince2004.
• İndeksactingasaholdingcompanyhas6affiliatesandsubsidiaries,eachofwhichoperatesindifferentfieldsoftechnologyproducts.Thefollowingcompaniesareincludedintheconsoli-datedfinancialstatementsofİndeks.Theproductgroupsofsuchcompaniesareshowninthefollowingtable:
Product Groups by Company
INDEKS DATAGATE ARTIM TEKLOS Datagate International FZE
Indeks International FZE
PC Smart Phone Computer Logistic and Transportation
PC PC
Notebooks Sim Card Software Notebooks NotebooksPrinters GSM Line Computer Spare
PartsServers Servers
Servers TabletPeripherals AccessoriesSoftware Physical TL Credit
(For prepaid phones)
Major Distributorships By Main Product Groups
PC OEMPrinters &
PeripheralsSoftware Smart Devices
Storage & Medium Size
SystemsAcer Airties APC Adobe Apple HPApple AOC Canon IBM Samsung IBMAsus Asus Epson Microsoft HTC Seagate Dell Intel Fujitsu Oracle LG WDFujitsu Kingstone HP Symantec SonyHP LG IBM Tivoli HuwaiIBM Seagate Oki CasperLenovo WD LenovoToshiba Asus
Vestel
Majordistributorshipsundertakenbymainproductgroupsareshownbelow:
2015 Annual Report
8
c) Changes in the Share Price throughout the Year:
İNDEKSinISE:HavingheldanIPOinJune2004,ourcompany’ssharesaretradedinIstanbulStockExchange(ISE)nationalmarketunderthecodeof“INDES”.TheISE-100indexopenedat85.448in2015,closedat71.727on31.12.2015withthedecreaseof19%.
TheTRL/USDexchangerateopenedat2,3269atthebeginningoftheyear,hadsomefluctuationsduringtheyearandclosedtheyearat2,9076USDdevaluedby25%withintheyear.
Theyear-endvalueof1sharewasTRL6,29, whereasitsvaluewas 5,26atthebeginningoftheyear.Accordingtotheclosingvalueonthelasttransactiondayoftheyear,thevalueofourCom-panyisTRL 352.240.000.
d) Awards achieved & Distributorships Undertaken in 2015
Company Date Description
Cisco Award-Neteks 29.05.2015Our subsidiary Neteks achieved Cisco Award for its superior performance in distribution in 2015.
Apple watch Disty Contract 23.07.2015Our company signed distribution agreement with Apple to distirbute Apple Watch products in Turkey.
Awards-HP 23.10.2015 Our company achieved award of the best distribütör by largest volume.
f) Data on Financial Structure:
(*) The figures in quarterly financial accounts have been taken into concideration in the calculation of averages.
LIQUIDITY RATIOS 31.12.2015 31.12.2014Current Ratio 1,13 1,14Liquidity Ratio 0,95 0,94
OPERATING RATIOS (*) 31.12.2015 31.12.2014Receivables Turnover 62 72Payables Turnover 67 80Inventory Turnover 21 24
PROFATIBILITY RATIOS 31.12.2015 31.12.2014Gross Profit Margin 4,5% 4,7%Operating Profit Margin 2,7% 2,7%Net Profit Margin 1,3% 1,1%Shareholder’s Equity Profatibility 2,0% 1,7%
2015 Annual Report
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1.2 Capital and Shareholding Structure
ShareholdingstructureofourCompanyisasfollows:
TheupperlimitofauthorizedcapitalofourCompanywasdeterminedasTRL75.000.000anditssharecapital issuedasof31.12.2009 isTRL56.000.000.Covering theallmaximumaut-horizedcapital,i.e.TRL75.000.000,fromtheprofitof2006,anapplicationismadetoCapitalMarketsBoard(CBM)ofTurkeyforissuingshareswithnominalvalueofTRL1.000.000forthecapital increasefromTRL55.000.000toTRL56.000.000andtheapplicationwasapprovedwiththeresolutionofCBMwithno.25/699of28.06.2007.Thecapitalincreasewasregisteredon10.07.2007andannouncedontheTurkishTradeRegisterGazettewithno.6852of16July2007.
Ourcompany’scapitalofTRL56.000.000iscomposedofGroupAregisteredsharesinvalueofTRL318,18andGroupBbearersharesTRL55.999.681,82.
GroupAshareholdersareauthorisedtodeterminehalfplusoneoftheboardmembersandtoreceive5%oftheremainingprofitafterthefirstissuereservefundsandfirstdividend.
FINANCIAL STRUCTURE RATIOS 31.12.2015 31.12.2014Shareholder’s Equity /Total Liabilities 15% 16%Short Term Liabilities / Total Liabilities 80% 80%Long Term Liabilities / Total Liabilities 5% 4%Bank Loans / Total Liabilities 27% 15%
Shareholder’s Name Country Shares %Number of
SharesAmount of
SharesNevres Erol Bilecik T.C. 36,26% 20.306.266 20.306.266Alfanor 13131 AS Norveç 25,70% 14.391.387 14.391.387Public Offer T.C. 38,04% 21.302.347 21.302.347TOTAL 56.000.000 56.000.000
1.3 Board of Directors, Auditing Board, Auditing Committee and Corporate Governance Committee
Board Members
IntheGeneralAssemblyheldon22.05.2012,MembersoftheBoardofDirectorswereelec-tedfordurationofthreeyears,andtheirdutiesandpowersweredeterminedpursuanttotheCompany’sArticlesofAssociationandtherelevantprovisionsoftheTurkishCommercialCode.ResolutionsoftheGeneralAssemblywerepublishedintheTurkishTradeRegisterGazettewithno.8840of12June2015.
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Members of the Auditing Committee
Corporate Governance Committee
Early Risk Detection Committee
Name & Surname Title Term of OfficeNevres Erol Bilecik Chairman 3 YearsSalih Baş Vice Chairman 3 YearsAtilla Kayalıoğlu Board Member 3 YearsAyşe İnci Bilecik Board Member 3 YearsHalil Duman Board Member 3 YearsTomasz Janusz Czechowicz Board Member 3 YearsUlrich Kottmann Board Member 3 YearsBerrin Önder Independent Board Member 3 YearsSedat Sami Ömeroğlu Independent Board Member 3 Years
Name & Surname TitleBerrin Önder Chairman of the CommitteeSedat Sami Ömeroğlu Committee Member
Name & Surname TitleBerrin Önder Chairman of the CommitteeUlrich Kottmann Committee MemberNaim Saraç Committee MemberTuba Bilecik Committee Member
Name & Surname Title
Berrin ÖnderChairman of the Committee
(Independent Member)Salih Baş MemberUlrich Kottmann Member
1.5 Board of Directors
TheBoardofDirectorsofthecompanyconsistsoffivemembers.CurriculumVitaeoftheBoardMembersaregivenbelow.
Nevres Erol Bilecik,Chairman of the Board of Directors:ErolBilecikwasbornin1962andgradu-atedfromIstanbulTechnicalUniversity,DepartmentofComputerEngineering.ErolBilecik,whoestablishedİndeksA.Ş.in1989,actsasthechairmanofthefollowingsubsidiariesofIndex,besi-desourcompany:DespecBilgisayarPazarlamaveTicaretA.Ş.,DatagateBilgisayarMalzemeleriTicaretA.Ş.,NeteksİletişimÜrünleriDağıtımA.Ş.,NeotechTeknolojikÜrünlerDağıtımA.Ş.,DesbilTeknolojikÜrünlerTicaretAŞ.,HomendElektrikliCihazlarSan.VeTicaretAŞ.,İnfinBilgisayarTica-retA.Ş.andTeklosTeknolojiLojistikHizmetleriAŞ.Moreover,betweentheyears2002and2005,
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hepresidedTUBISAD(Turkish Informatics IndustryAssociation)established in1974, theoldestcivil societyorganisation in the ICTsector,membersofwhicharecompanies realising95%ofthetotaltransactionvolumeoftheTurkishICTsector.ErolBilecikismarriedwithtwochildrenandspeaksEnglish.
Salih Baş,Deputy Chairman: SalihBaşwasbornin1965,andgraduatedfromAnadoluUniver-sity,DepartmentofBusinessAdministration.HehasbeenworkingforIndexGroupsince1990.In2003,whilehewasactingastheAssistantGeneralManager-Finance&AccountingforİndeksBilgisayarSistemleriMühendislikSanayiveTicaretA.Ş.,hewasappointedastheGeneralMana-gerandViceChairmanoftheBoardofDirectorsofDatagateBilgisayarMalzemeleriTicaretA.Ş..HecurrenactsastheDeputyChairmanforthecompanies,İndeksBilgisayarSistemleriMühen-dislikSanayiveTicaretAŞ.,TeklosTeknolojiLojistikHizmetleriAŞ.,HomendElektrikliCihazlarSan.VeTicaretAŞ.,İnfinBilgisayarTicaretA.Ş.andDesbilTeknolojikÜrünlerTicaretA.Ş.,andasoneofthemembersoftheBoardofDirectorsforthecompaniesDespecBilgisayarPazarlamaveTicaretAŞ.,NeotechTeknolojikÜrünlerDağıtımA.Ş.andNeteksİletişimÜrünleriDağıtımA.Ş.SalihBaşismarriedwithonechildandspeaksEnglish.
Atilla Kayalıoğlu, General Manager, Board Member:AtillaKayalıoğluwasbornin1952,andgradu-atedfromBoğaziçiUniversity,DepartmentofMechanicalEngineeringin1974;followingthathereceivedamastersdegree fromSyracuseUniversity,Departmentof IndustrialEngineering.HecarriedoutseveraldutiesinIBMTurkbetweentheyears1980-1999;andin1999,whenhewastheGlobalServicesManagerheleftIBMTurkandjoinedIndex.KayalıoğluactsasaBoardMem-berandGeneralManagerofİndeksBilgisayarSistemleriMühendislikSanayiveTicaretA.Ş.;healsoactsasaBoardMemberofthecompaniesofNeteksİletişimÜrünleriDağıtımA.Ş.,DatagateBilgisayarMalzemeleriTicaretAŞ.,İnfinBilgisayarTicaretA.Ş.andTeklosTeknolojiLojistikHizmet-leriAŞ..AtillaKayalıoğluismarriedwithtwochildrenandspeaksEnglish.
Ayşe İnci Bilecik,Board Member,ComputerEngineer:Ayşe İnciBilecikwasborn in1964andgraduatedfromIstanbulTechnicalUniversity,DepartmentofComputerEngineering.ShealsoactsasaBoardMemberofDesbilTeknolojikÜrünlerTicaretA.Ş.,beingasubsidiaryofIndex.BeingoneofthefoundingpartnersofİndeksBilgisayarfoundedin1989,AyşeİnciBilecikusedtoworkasanengineerspecializedinsoftwareintheICTsectorforlongyears.AyşeİnciBilecikismarriedwithtwochildrenandspeaksEnglish.
Halil Duman, Board Member:HalilDumanwasbornin1965,andgraduatedfromMarmaraUni-versity,DepartmentofBusinessAdministration.Hecarriedoutseveralduties inYücelen İnşaatA.Ş.betweentheyears1987and2000;andin2000,whenhewastheManagerofFinance,heleftYücelenİnşaatandjoinedIndexasFinanceDirector.DumanactsasamemberoftheBoardofDirectorsofİndeksBilgisayarSistemleriMühendislikSanayiveTicaretA.Ş.,andalsoactsasaBoardMemberofDatagateBilgisayarMalzemeleriTicaretAŞ.,NeteksİletişimÜrünleriDağıtımAŞ.,TeklosTeknolojiLojistikHizmetleriAŞ.,NeotechTeknolojikÜrünlerDağıtımAŞ.,DespecBilgisayarPazarlamaveTicaretAŞ.,DesbilTeknolojikÜrünlerTicaretA.Ş.HomendElektrikliCihazlarSan.veTicaretAŞ.,İnfinBilgisayarTicaretA.Ş.veAlkımBilgisayarAŞ,andactsasAssistantGeneralManager-FinanceofİndeksBilgisayarSistemleriMühendislikSanayiveTicaretA.Ş.HalilDumanismarriedwithtwochildren.
Tomasz Janusz Gzechowicz,Board Member:AgraduateofWroclawUniversityofTechnology,WarsawSchoolofEconomicsandExecutiveMBAat theUniversityofMinnesota. Intheyears
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1990-1998Co-founder andCEOof JTTComputerSA,whichhebuild into a leadingCentralEuropeanPC-assemblyanddistributionoperationswithUSD100M+revenue.FromMay1998FounderandManagingPartnerofMCIGroup.AfteracquisitionoffundingthrowIPOontheWar-sawStockExchangein2001thevalueofMCI’sinvestmentportfoliogrewfromUSD8MtomorethanUSD350M.MCIGroupspecializesinalternativeassetsmanagementwithafocusonprivateequityinvestmentsacrossCentralEasternEurope,DACHcountries,CIScountriesandTurkeyinfollowingsectors:TMT,e-commerce,fintech,bigdata, IT/consumerelectronics, financialServi-ces.TomaszCzechowiczisalaureateofnumerousprestigiousawards:TheTOPManageroftheYear2007prizeforMr.Tomasz.
CzechowiczisunexceptionableproofthathissuccessfullyaccomplishedstrategywithintheMCIGroupmakeshimoneofthemosteffectivemanagersofinnovativeeconomyintheregionofNewEurope.Alreadyin2001,hisexceptionalfeelingforthemarket,pofessionalism,visionandbusi-nessefficacycausedtheWorldEconomicForumtoawardMr.TomaszCzechowiczwiththetitleofGlobalLeaderforTomorrow.In2000chosenoneoftheTOP-10mostinfluentialpeopleintheEuropeanInternetbyEuropeanEditionofBusinessWeek.
Ulrich Kottmann,Board Member:UlrichKottmann-graduatedinacombinedstudyin“Enginee-ringandBusinessAdministration”fromtheUniversityofAppliedSciencesEsslingen,Germanyin1983.Hestartedhisprofessionalcareer1983–1986intheFinancedepartmentofComputervi-sionProduktionGmbH.From1986to1996atCompaqComputerEMEAHQinMunichinvariousmanagementfunctionsinFinance,ControllingandStrategicPlanningforageographicregionwithrevenuesofapprox.500MioUS$.ManagementmemberoftheBusinessDevelopmentGroupofCompaqandactivelyinvolvedinpioneeringvariousmarketentries,theroll-outofover15subsidi-ariesinEurope,AfricaandtheMiddleEastandmanagingfastandhighgrowthbusinessexpan-sion.Fromtheearly90’sManagementmemberoftheGrouptodevelopthebusinessinCentralEasternEurope.From1996to2000freelanceconsultantmainlyworkingonBusinessDevelop-mentandStrategyprojectsforvariousinternationalITvendorsinCentralEasternEurope.In2000foundationofProcess4ES.A(togetherwithMCIManagementS.A.).inWarsawandmanagingthecompanyuntilMarch2008.In2005thecompanywassuccessfullysoldtoupdatesoftwareAG(LocatedinViennaandlistedonFrankfurtStockExchange).ActivitiesincludedvarioushighprofilestrategyprojectswithintheITindustry,projectmanagementforover100countriesduringthePostMergerIntegrationPhaseoftwoNASDAQlistedGlobalITcompanies,developmentofconsultingservicesrelatedtobusinessprocessmanagementandimplementationofenterpriseclassCRMsoftware.SinceMarch2009amemberandsinceJan2010ChairmanoftheSupervisoryBoardofABCDataS.A.(listedonWarsawStockExchange)aleadingDistributorofITandConsumerElectronicsinPolandandCentralEasternEurope.
Berrin Önder, Independent Board Member: ShewasborninKayseri,in1967.AftergraduationfromKayseriCollage,shegraduatedfromMiddleEastTechnicalUniversity,IndustrialEngineeringDepartment.ShehasdoneherMBAinStateUniversityofWestGeorgia.ShestartedherProfessi-onalcareerinTürkpetrolHoldingA.Ş..Later,sheworkedforGarantiInvestmentBankinCorporateFinanceDepartment,ascountrymanagerforCaspianInvestmentBank,asGeneralManagerforRaymondJamesYatırımMnekulDeğerlerA.Ş.andAkYatırımMenkulDeğerlerA.Ş.,ascountrymanagerforClairmontGobalTurkey.Since2010,sheisactingasshareholderandBoardMem-berforLogosAssetManagement.Shewasspecialisedinfunddevelopment,InvestmentBankingandRealEstatedevelopment.Sheholds3rdlevelCapitalMarketBoardLicense.Sheismember
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ofHighAdvisoryCommitteeinDaruşşafakaUnion.SheisalsoBoardMemberinKayseriCharityUnion.Since2015,sheisourIndependentBoardMember.
Sedat Sami Ömeroğlu, Hewasborninİstanbul,in1956.HegraduatedfromYıldızTechnicalUni-versityin1982,DepartmentofElectricEngineering.AsElectric-ElectronicEngineer,hebecameoneofthefirstengineerswhodealthwithComputersince1980.Aftergraduation,heworkedfortwo technologycompaniesas technicalserviceengineerandexecutivemanager. In1995,heestablishedhisowncompanynamelyEndüstriyelveBilimselTestTeknolojileri,Ar-GeveİleriOto-masyonMühendisliğiSan.veTic.A.Ş.(shortlyE3TAM)thatoperateinartificialvisionandforwardautomation engineering in the basic of computer based test and control systems. E3TAM asthepilotinusageofcomputersintheindustryforcontrolpurposes,hasthetitleofthefirstSMEcompanythatconductsresearchinartificialvision,robotvisiontechnologiesbesidesexecutionofmanyindustrialandscientificprojectsinbothdomesticallyandinternationally.HewasoneofthefoundersinIndustrialAutomationIndustrialistsAssociation–ENOSADthatconductspracticesinIndustrialAutomationfieldin2004.SedatSamiÖmeroğluisthe4thtermpresidentofENOSADsinceMay2011.Heismarriedandhasadaughter.
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Public O�er431 Million $ Revenue
163 Million $ Revenue
111 Million $ Revenue
59 Million $ Revenue
4 Million $ Revenue
563 Million $ Revenue
630 Million $ Revenue
787 Million $ Revenue
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1.6 Historical Background
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İndeksBilgisayarSistemleriMühendislikSanayiveTicaretA.Ş.wasfoundedon10.07.1989tooperateinthecomputersector.TheCompanywastransformedintoajointstockcompanyinApril2000.Thehe-adquartersoftheCompany, inwhichGreece-basedPouliadisGroupparticipatedinAugust2000, is inIstanbul.TheCompanyoperatesintheInformationTechnologies(“IT”)sectoranddealswiththepurchase,sales,technicalandsoftwaresupportofcomputers,computersuppliesanddatatransmissionequipment.
The Companymade a distributorship agreement with 3M, being an American company operating inTurkey,for3Mmagneticmediumproductsin1989.TheCompanyincreaseditsmarketshareinthe3Mmagneticproductsmarketfrom1,2%to55%inoneyear.Itachievedaturnoverof875thousandUSDwithonlyastaffof6in1989.Inthenextyear,in1990,itmadeaturnoverof1.380thousandUSDwithastaffof19.Itranked82ndamongtheTurkishITcompaniesin1990.
In1991itmadeacontractwiththeItaliancompanynamedOlivettitoactasthe“AuthorisedSeller”ofOli-vettiPCproducts.Inthesameyear,itincreasedthenumberofstaffto36andmadeaturnoverof2.188thousandUSDin1991.Itranked45th,rising37stepsintherankingoftheTurkishITcompanies.
TheCompanysetupAnkarabranchasitsfirstbranchin1992andstartedmorepermanentactivitiesintheCentralAnatoliaRegion.In1992thenumberofitsstaffincreasedto49anditsturnoverto3.7millionUSD.Itranked30th,rising15stepsintherankingoftheTurkishITcompanies,in1992.
Itclimbedtotherankof20thamongtheTurkishITcompanieswithitsturnoverof9.2millionUSDandstaffof56in1993.
In1994, ithasbecometheTurkishDistributorofHPconsumables,APCUninterruptedPowerSuppliesandSiemensNixdorfPCproducts.Then,itbecamethe19thbiggestITcompanyoftheTurkishmarket.In1994itachievedaturnoverof11.3millionUSDwithitsstaffof61.
ItfoundeditsİzmirbranchinApril1995andsigned“BusinessPartner”contractwithIBMinMay.Justinthesecondhalfofthesameyear,i.e.attheendof1995,itwasgranted“IBMPCBusinessPartnerAward”byIBMduetoitsachievementsasabusinesspartner.Withitssignificant‘channel’activitiesinthesameyear,İndekswon“TheMostActiveDistributorAward”ofINTERPRO,whichisconsideredvaluablebythesector.Itachievedaturnoverof15.9millionUSDwithitsstaffof62in1995.Thereafter,ithasbecomethe16thbiggestITCompanyinthesector.
In1996,IBMchangedthedistributionmodel inPCsalesorganizationandadoptedthe“distributorship”model.Thus,İNDEKShasbecomethefirstTurkishcompanythatmadeadistributorshipcontractwithIBM.Itmade4.127unitsofIBMPCin8daysinAprilofthesameyear,whichwasfirstinthemarket.Bytheendofyear,İndeksreachedtheturnoverof38.7millionUSDwithastaffof70andranked9thbyclimbing7stepsmoreintherankingoftheTurkishITcompanies.ItwasdeservedtoreceivethetiTRLeof“TheMostActiveComputerCompany”oncemorein1996,justlikein1995.
In1997,İndekshasbecomethe8thbiggestITCompanyinTurkey,withaturnoverof58.6millionUSDandastaffof75.
TheCompanymade a distributorship agreement for Lotus & IBMSoftware products, thereby startingdistributionofsoftwarein1998.Inthesameyear,itmadeadistributorshipagreementwithHPA.Ş.fordistributionofhardwareproducts.Inthesameyear,itmadeanewagreementwithIBMandbecamethedistributorofAS/400,beingoneofthemostimportantvalue-addedproductsofTurkey.Towardstheendofthatyear,İndeksmadeadistributorshipagreementwithKingston.In1998,theCompanywon“TheMost
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ActiveITCompanyAward”againafter1995and1996andbecametheonlyITcompanythatachievedtowinthesameawardthirdtimes.InNovember 1998,the“SuppliesDepartment”ofİndeksBilgisayarwasreorganisedasanindependentcompanyandbecame“DESPECTürkiye”withajointinvestmentwithVonDorpDespecGroup,whichwasthe“Number1”initsfieldinEurope.Withitsturnoverof89.4millionUSDwithastaffof131in1998,İndeksclimbedanother2stepsintherankingofTurkishITrankingandbecamethe6thBiggestTurkishITCompany.
In1999,İndeksmadedistributorshipagreementswithmanysignificantproductssuchasCisco,Microsoft,Xerox,IBMPosandEscort;andits“logisticscentre”startedoperationsinJuneofthesameyear.“İndeksLogisticsCentre”,whichissituatedonanareaof2,500sqmandequippedwithhighlyfunctionaltechno-logy,wasoneofthemostimportantinvestmentsofİndeksincanal.TheCompanyreachedtheturnoverof111millionUSDwithastaffof155in1999.
On12April2000,thecompanytransformedfromaLimitedLiabilityCompanyintoaJointStockCompany.InAugust2000,PouliadisandAssociateSocieteAnonymeIndustrialandCommercialofHighTechnologySystemsS.A.(‘PouliadisS.A.’)acquired50%ofİNDEKSBilgisayarwhichtherebybecameacompanywithforeignshareholder. Inthesameyear, İndeksmadeanagreementfordistributorshipofEpsonproductsandaddedEpsonproducts to its increasinglygrowingrangeofproducts. İndeksBilgisayarachievedaturnoverof163millionUSDbytheendof2000.
In2001,theCompanymadeadistributorshipagreementwithCOMPAQ.Withthisagreement, İNDEKSblazedatrailbeingtheonlydistributordealingwithIBM,HPandCOMPAQPCproducts.Inthesameyear,İndeksalsomadedistributorshipagreementsforNovel,SonyandMicrosoftOEMproducts.TheCompanycontinueditsinvestmentsinspiteoftheeconomiccrisisin2001andinMarchofthesameyear,itacquired50.5%ofDatagateBilgisayarMalzemeleriTicaretAŞ.(DATAGATE),whichisaleadingcompanyinCompu-terparts/OEMsector,therebyboostingthemoraleofthesector.Inthesameperiod,itacquired70%ofNeteksİletişimÜrünleriDağıtımA.Ş.(NETEKS),whichisoneofthehighlyexperienceddistributioncompa-niesinnetwork,andcontinueditsgrowthinspiteofthecrisis.IntheTurkeyTop500ICTCompaniesRan-kingperformedbyInterproMedyaA.Ş.in2001,ourcompanyranked1stinthecategoryof“ITHardwareIncomes”,2ndinthecategoryof“TurkishITCompanies”and11thinthegeneralrangingoftheICTSector.In2002,OkiprintersandToshibanotebookandserverproductswere included in the İndeks rangeofproducts.
InJuly2002,allcompaniesofthegrouprelocatedtoitscurrentthree-storeybuildingwithanindoorareaof10.000sqmintheaddressofCendereYolu,No:23Kağıthane.TheturnoveroftheCompanyin2002was189millionUSD.
ProductswithFujitsuSiemensandNecbrandswereaddedtotheproductportfoliooftheCompanyin2003.Further,theshareofİndeksinDATAGATE,ofwhich50.5%shareswereacquiredbyİndeksin2001,therebybeinganaffiliateoftheCompany,wasincreasedto85%.TheconsolidatedturnoveroftheCom-panywasrealizedas323millionUSDasoftheendof2003.
15.34%oftheİndeksBilgisayarshareswasofferedtopubliconISEviaacapitalincreasethroughrightsissueafter restricting theexecutionofpre-emptive rightsofexistingshareholders,on 24.06.2004. TheCompanymadedistributorshipcontractswithKingmaxandAsus formemoryandbareboneproducts,respectively,in2004andstartedtodistributesuchproducts.Inthesameyear,İndeksBilgisayarA.Ş.wasawardedISO9001:2000certificate.
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On02.02.2005, inaccordancewith the resolutionof theBoardofDirectorsdated02.02.2005, İndeksacquired 80% of Neotech Teknolojik Ürünler Dağıtım Anonim Şirketi for wholesale trade of consumerelectronicsandcommunicationproductsasanew fieldofoperationof theCompany. InMarch2005,theRegisteredCapitalSystemwasadopted,anditsmaximumregisteredcapitalwasapprovedasTRL75.000.000.InMay2005,theissuedcapitalofİndekswasincreasedfromTRL17.600.000to45.000.000.InSeptember2005,theCompanymadeanexclusivedistributorshipagreementwithTPVTechnologyLi-mited,whichmanufactures19,5%ofthemonitorsintheglobalmarketandhasrealisedaturnoverof4billionUSDin2004,fordistributionofAOCbrandedLCD,CRTMonitor,PlasmaMonitorandLCDTVpro-ductsinTurkey.AccordingtotheTop500TurkishICTCompaniesreportissuedbyInterproon27.05.2005for2004,ourCompanyranked1stinthecategoriesofNotebooks,DesktopPCs,PrintSystems,Servers,DataBackupandStorageUnits,OfficeSoftwareandOEMand8thintheturnover-basedgeneralrankingofTurkey,inwhichTurkTelekomranked1st.Withtheseresults,İndeksBilgisayarachievedtobetheonlylocalcomputercompanyintheTopTen.
InFebruary2006,30.30%ofthesharesofthesecondbiggestcompanyofthegroupandasubsidiaryofİndeksBilgisayar,namelyDatagateBilgisayarMalzemeleriTicaretA.Ş.,wasofferedtopublicinFebruary2006.ofwasofferedtopubliconISEviaacapitalincreasethroughrightsissueafterrestrictingtheexe-cutionofpre-emptiverightsofexistingshareholders.BegantobetradedonISEon10.02.2006Thus,2companiesofthegrouphavebeenofferedtopublicandbeguntobetradedonISE.PartnershipshareofİndeksBilgisayardecreasedfrom85%to59.2%withthepublicofferingofDatagate.TheissuedcapitalofİndeksBilgisayarwasincreasedfromTRL45.000.000toTRL55.000.000inMay2006.TRL8.718.703outoftheamountofincrease,i.e.TRL10.000.000,iscoveredfromtheprofitoftheperiodof2005andtheremainingTRL1.281.297fromextraordinaryreserves.İndekshasexecutedoneofthemostimportantandgreatestinvestmentsinICTsectorbypurchasingKaradenizOrmeA.S.,whichisfoundedona39.761m2landandhaving18.969m2indoorarea,inordertobeusedasalogisticscentre.ThetradenameofKaradenizOrmeAShasbeenchangedintoTeklosTeknolojiLojistikHizmetlerA.Ş.anditsfieldofactivityhasbeencustomizedtobeabletoworkonthelogisticsservices.Theheadofficeofthecompanymovedtoitsnewlocationon26.10.2006.EVOS(EffectiveEfficientOperationalResult-Oriented)ERPSystemde-velopedbyİndeksA.Ş.in2006wasstartedtobeusedbyİndeksGroupCompanieson01.01.2007.EVOSProjectwasdevelopedbytheSoftwareEngineersGroupofİndeksA.Ş.withinaperiodof9months.OurCompanyanditssubsidiariesincludedintheconsolidatedfinancialstatementsmadedistributorshipag-reementswithCanonforprinter,faxandscannerproducts,withWesternDigitalCorporationforharddiskproducts,withPanasonicforconsumerelectronics,withViewsonicformonitorproductsandwithSonyVaiofornotebookproducts.Accordingtothe2005TurkeyTop500ICTCompaniesreportissuedInterproin2006,İndeksBilgisayar,withitsturnoverof758.634(thousandTRL),againranked1stinthecategoryofcompaniessellingonlycomputers,likein2004.Withthisresult,theCompanykeptitsspecialplaceastheonlylocalcomputercompanyintheTopTen.Moreover,itwasrankedthebiggestcompanyinthecategoryofmarketswithrespecttotheincomesfromServer,PrintSystems,OEM,OperatingSystem,OfficeSoftwareandE-Tradesales.
İndeksBilgisayaranditssubsidiariesmadedistributorshipcontractswithPhilipsformonitorsandPCpe-ripherals,Asusfornotebookproducts,AppleIMCforApplebrandproducts,TrendMicroforsoftwarepro-ductsforinternetsecurityandviruses,NokiaforE-seriesproducts,LGElectronicsfornotebookproductsin2007.TheissuedcapitaloftheCompanywasincreasedfromTRL55.000.000toTRL56.000.000inJuly2007.Theamountofincrease,i.e.TRL1.000.000,iscoveredfromtheprofitoftheperiodof2006.
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On24.07.2007, İndeksBilgisayarand itssubsidiaryDatagateBilgisayarA.Şsold50%of theirshares inNeteksİletişimÜrünleriDağıtımA.Ş.,anaffiliateofİndeksBilgisayar,toWestconGroupEurepeanOperationLimited,oneoftheleadingglobalcompaniesinitsfield.Ofthe50%sharessold,26%and24%wereprovi-dedbyİndeksBilgisayarSistemleriMühendislikSanayiveTicaretA.ŞandDatagateBilgisayarMalzemeleriTicaretA.Ş.,respectively.Followingsuchsale,NeteksbecomeaJVofwhichsharesareheldbyİndeksBilgisayarA.Ş.andWestconGroupon50%-50%basis. Itwas the first time thatwith thisagreement,WestconGroupmadeaninvestmentinTurkeyunderapartnership;untilthen,itwasoperatingonlywithitsfullyownedsubsidiariesin19countriesaroundtheworld.
Accordingtothe2007TurkeyTop500ICTCompaniesRankingperformedbyInterproMedyaA.Ş.,ourcompanyrankedseventh,onestephigherthanthepreviousyear,inthegeneralrankingbasedonturnoverachievedin2006amongthecompaniesincludingtelephoneoperatorsandmobilephonesellers.Ontheotherhand,itrankedfirstwithitssalesincomeof901.778(thousandTRL),likethepreviousyears,inthecategoryofcompaniessellingonlycomputers.Further,itrankedfirstinnineICTcategories.Thecategoriesinwhich İndeksBilgisayar rankedfirstare thePortablecomputerwholesale traderanddistributor,Databackupandstoragehardware,Server,Printsystemswholesaletraderanddistributor,Datacommunicationhardware,OEMproducts,Operatingsystem,OfficesoftwarewholesaletraderanddistributorandE-trade.
In2008,İndeksBilgisayarmadeadistributorshipagreementwithLG,whichisoneofthemostvaluablebrandsoftheworld,fornotebooks,consumerproductsandmonitorsandwithAsustekforAsusbrandedserverproducts.Inthesameyear,Neotech,beingasubsidiaryofİndeksBilgisayar,andDatagatewereappointedasthedistributorsofWacomandBelkinproducts,respectively.OurCompanyrankedsixth,onestephigherthanthepreviousyear,inthegeneralrankingbasedonsalesmadein2007amongthefirst500ICTcompaniesincludingtelephoneoperatorsandmobilephonesellersinTurkey.Ontheotherhand,ourCompanyranked1stwithasalesrevenueofTRL1.022.919thousandTRL,likethepreviousyears,inthecategoryofcompaniessellingonlycomputers.Further,itrankedfirstineightICTcategories.
In 2009,İndeksBilgisayarmadedistributorshipagreementswithIomegaandDellandasupplycontractwithBestBuy.ThecontractsmadebyNeotechA.Ş.,asubsidiaryofİndeksBilgisayar,forAppleandAirtiesproductsweretransferredtoİndeksBilgisayarasaresultofthesegmentadjustmentsinthisyear.Inthesameperiod,Neteks,a50%affiliateofİndeksBilgisayar,madedistributorshipagreementswithJuniper,IBM ISSandAvaya. On theotherhand,DatagateA.Ş.madeadistributorshipagreementwithFujitsuSiemens.İndeksBilgisayarranked7thamongtheTurkeyTop500ICTCompanieswithitssalesincomeof927.893thousandTRLintheturnover-basedgeneralrankingasdeterminedbyInterpromedyaA.Ş.Intheanalysisofthegeneralrankingresults,İndeksBilgisayarranked1st,asthepreviousyears,amongthecompaniesdealingwithcomputertradeonly.Further,itrankedfirstinsixICTcategories.Further,DatagateBilgisayarMalzemeleriTic.A.Ş.,whichisa59%subsidiaryofİndeksBilgisayar,rankedfirstinthecategoryof“OEM(computerparts)”incomesandNeteksİletişimDağıtımÜrünleriA.Ş.,whichisa50%subsidiaryofİndeksBilgisayar,rankedfirstinthecategoryof“DataCommunicationHardware”.
In 2010, ourlogisticcompanycalledTeklosA.Ş.achievedthecontractofTurkishTelecomforstorageanddistributionoftheproductswhichwillbeprovidedtothecustomersofTurkishTelecom.İndeksBilgisayarranked7thamongtheTurkeyTop500ICTCompanieswithitssalesincomeofTRL1.087.422inthetur-nover-basedgeneralrankingasdeterminedbyInterpromedyaA.Ş.Intheanalysisofthegeneralrankingresults,İndeksBilgisayarranked1st,asthepreviousyears,amongthecompaniesdealingwithcomputertradeonly.Further,itrankedfirstinsixdifferentICTcategories.ThesearePersonalcomputer,Mobile,Prin-
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tingsystems,databackupandstorage,monitor,operatingsystemsandB2BE-Trade.Further,DatagateBilgisayarMalzemeleriTic.A.Ş.,whichisa59%subsidiaryofİndeksBilgisayar,rankedfirstinthecategoryof“OEM(computerparts)”incomesandNeteksİletişimDağıtımÜrünleriA.Ş.,whichisa50%subsidiaryofİndeksBilgisayar,rankedfirstinthecategoryof“DataCommunicationHardware”.Furthermore,IndekshasstartednegotiationswithCanonEurasiaLtdforthedistributionofcameras,videocamcordersproductsandtheiraccessoriesinTurkeyasCanonisoneofthebiggestproducerofthesetypesofproductsintheworld.Oursubsidiary,NeteksA.ŞachievedthedistributoroftheyearawardorganizedbyCiscoSystemsin2009.IndeksachievedthemostefficientbusinesspartnerawardwhichwasorganizedbyLenovoinChinain2009.Inaddition,IndekshasbeenawardedthedistributoroftheyearorganizedbyIBMTurkLtdinIstanbul.
In2011,inparalleltoourbusinessplansandtargets,ourcompanyacquired%51ofArtımBilişimÇözümveDağıtımA.Ş.thatprovidesdistributionofvalueaddedsolutionsandsuppliessparepartsinITsector.Forthistransaction,780.000USDwasinvested.
OursubsidiaryNeotechTeknolojikÜrünlerDağıtımA.Ş.signedanagreementwithCanonEurasiaLtdtodistributeCanonbrandedcameras&videocamerasandaccessoriesinTurkey.
Inthemeeting(businesspartnersoftheyear)heldon02.02.2011andorganizedbyIBM,theyearof2010wasreviewed.Ourcompanyhasbeenawardedasthe“Distributorof2010”.
InthemeetingorganizedbyHewlettPackardTurkeyinIstanbul,ourcompanyhasbeenawardedasha-vingthebiggestbusinessvolumeinPSG(personalsystemsgroup)productgroupinDistributorCategorybetween4distributorsbyconsideringparameterssuchasrevenuemadeinthisproductgroup,superiorlogisticservicesgiven,creatingsuccessinthesalesofallHPbrandedproductsinTurkey.
İndeksBilgisayar ranked7thamong theTurkeyTop500 ICTCompanies in the turnover-basedgeneralrankingasdeterminedby InterpromedyaA.Ş.Prizewasgiven toourcompanyon27.06.2011,MondayeveninginİstanbulTechnicalUniversity’sMaslakCampus.
OursubsidiaryNeotechTeknolojikÜrünlerDağıtımA.Ş.signedanagreementwithHTCCorporation todistributeHTCbrandedsmartphones,TabletPCandaccessoriesinTurkey.
OurcompanywasappointedastheonlydistributorofOffice365productsbyMicrosoftTurkeyandEuro-petogether.Theseproductsincludespecificationsofe-mail,MicrosoftOffice,combinedmessagingandfilesharing…etc.
In2012,OurcompanyestablishedacompanycalledIndeksInternationalFZEinSharjahAirportInternati-onalFreeZoneinUAEtooperatemainlyinMiddleEastandAfricainIT.Ourcompanyinis%100ownerof Indeks InternationalFZEwithpaidupcapitalamountof150.000AED.Theprocedure regarding theestablishmentwascompletedon09.05.2012.
Ourcompanypurchased%55ofAlkımBilgisayarSanayiveTicaretA.Şthatprovidesaftersalesservicesfor leading ITbrandsof theWorld intheaccordancewithour longtermstrategictargetsandbusinessplansregardingincreaseofprofitability.3.000.000USDwaspaidforthistransaction.Asitwasestablishedin1996,itprovidesvalueaddedservice,maintenance,fixingservicesofmanybrandsfirstlyHewlettPa-ckard.ThecompanyprovidesguaranteeincludedandexcludedsolutionswiththeservicepointslocatedinIstanbul,Ankara,İzmir.
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İndeksBilgisayarranked8thamongtheTurkeyTop500ICTCompanieswithitssalesincomeof1.513.546(000TRL)intheturnover-basedgeneralrankingin2011asdeterminedbyInterpromedyaA.Ş.Intheanaly-sisofthegeneralrankingresults, İndeksBilgisayarranked1st,asthepreviousyears,amongthecom-paniesdealingwithcomputertradeonly.Besides,itwasranked1stcompanyinsoftwareandhardwaredistributor.Further,itrankedfirstinsixdifferentICTcategories.Thesearedatabackupandstorage,server,Tabletandmobilepc,TabletandmobilepcdistributionandB2BE-Trade.Further,NeteksİletişimDağıtımÜrünleriA.Ş.,whichisa50%subsidiaryofİndeksBilgisayar,rankedfirstinthecategoryof“NetworkandDataCommunicationHardware”.
İndeksBilgisayarSistemleriMühendislikveTicaretA.ŞsignedacontractwithAppleEuropeLtdtodistribu-teiPad,Mac,iPodanditsaccessoriesinTurkey.WepredictthatAppleBrandwillbeverystrategicvalueforourcompany’sfutureasthisbrandmaderevolutioninITandTelecomWorldwithitsdesigned,producedtechnologyandproductsparticularlyinenduserline.OurcompanytargetstodistributeAppleProductsin81citiesinTurkeywithmorethan8000dealerchannels.Byaddingthesehighconsumerdemandedproductstoourproductportfolio,itwillmakehugecontributiontoourgrowth.Theamountoftherevenuewillbeapproximately250millionTRLinourcompany’srevenue.Apple Inc.anditssubsidiariesdesign,produceandmarketmobilecommunicationandmediaappliances,personalcomputerandmobiledigitalmusicplayer.Besides,forthoseproducts,itproducesandsalessoftware,service,peripherals,networksolutions,digitalcontentsandapplicationbelongesthirdparties.ItsproductsandservicesincludesiPho-ne,iPad,Mac,iPod,AppleTV,consumerandprofessionalsoftwareapplicationsportfolio,ios,MacOSXoperatingsystems,, iCloudandmanyaccessories,servicesandsupportsolutions.Besides,thecom-panysalesdigitalcontentsandapplicationswithchannelofiTunesStore,AppStore,iBookstoreandMacAppStore.Applewasestablishedin1977anditsheadofficeisinCalifornia,USA.
Indekshasbeenawardedon20.12.2012thedistributoroftheyearregardingFinishGoodslicenceca-tegoryorganizedbyMicrosoftTurkey in Istanbul.Thisawardwasgiven in revenue,growth,numberofdealersmadepurchasingfromthedistributor,efficiencycategories.
OurChairmanNevresErolBilecikwasauthorizedbyourDirectors’Board toconduct issuessuch thesales,revenueorconstructionareasharingbaseagreementswithconstructioncompaniesorlanddeve-lopment,constructionlicenceforthelandattheaddressofŞişliprovinceAyazağaMah.CendereyoluNo:9thatisownedbyour99,99%oursubsidiaryTeklosTeknolojiLojistikHizmetleriA.ŞandwhereTeklosTeknolojiLojistikHizmetleriA.Şmanagesinventoryandlogisticfacilitiesfor IndexGroup. Inaddition,asourcompany’sheadofficelocatedinthisareaanditsinventoryandlogisticmanagementisdoneinthislocation,makingplanstomove,forthisaim,purchasingnewrealestates,developingprojectsontheserealestates,licenceandconstructionoperations.
Ourcompany’s55%subsidiaryAlkımBilgisayarSanayiveTicaretA.Şwassoldandtransferedaswholewithpurchasingamountof3.000.000USDtoFeridunSabahwhomourcompanyusedtopurchasefrompreviosly.
In2013,
OurcompanysignedadistributioncontractwithCanonwhichisoneofthebiggestphotocopyandprinterproducers.OurcompanysignedfinalagreementwithSebaconstructioncompanytodevelopthe landwhichwaspreviouslyannouncedtostockmarket.According to thisagreement,ourcompanyexpects88,5millionUSDincludingVATfromthesaleoftheprojectwhichwillbedevelopedonourlandbySebaconstructioncompany.OurcompanysignedanagreementwithEulerHermes InsuranceCompany to
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insureitsreceivablesonApril2013.Thisisvalidfor2years.İndeksBilgisayarranked9thamongtheTurkeyTop500ICTCompanieswithitssalesincomeof1.412.201
(000TRL)intheturnover-basedgeneralrankingin2012asdeterminedbyInterpromedyaA.Ş.Intheanaly-sisofthegeneralrankingresults, İndeksBilgisayarranked1st,asthepreviousyears,amongthecom-paniesdealingwithcomputertradeonly.Besides,itwasranked1stcompanyinsoftwareandhardwaredistributor.Further,itrankedfirstinfourdifferentICTcategories.OurcompanysignedanagreementwithAppleforthedistributionofAppleiphoneproductswhichwillmakesignificantcontributiontoourgrowth.
In2014,
OursubsidiaryNeteksachievedCiscoAwardforitssuperiorperformanceindistributionin2013.
Inaddition,oursubsidiaryDatagatesigneddistributionagreementwithAVEAGSMOperatortodistirbuteTelecomproductstosouthernregionofTurkey.
OurcompanyIndekssignedanagreementwithLenovotodistributeLenevoSmartPhonestononTelcochannelinTurkey.Ouryearlysalesexpectartionis100mioTRLfromthisdsitributioncontract.
İndeksBilgisayarSistemleriMühendislikveTicaretA.ŞsignedacontractwithACER,AOCandFujitsutodistributedesktop,laptop,monitör,server,datastorageandperipheralsinTurkey
In2015,
OursubsidiaryNeteksachievedCiscoAwardforitssuperiorperformanceindistributionin2015.Also,OurcompanysigneddistributionagreementwithAppletodistirbuteAppleWatchproductsinTurkey.Indeksachievedawardofthebestdistribütörbylargestvolume.
22
02 SECTOR OF OPERATION
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2.1 IT Sector2.1.1 Turkish IT SectorTheusageofcomputersinTurkeystartedintheendofthe1980’s.Althoughtherewasaveryrapiddevelopmentinthesectorbetweentheyearsof1990and1995,usageofcomputerswerelimitedtomostlyfinancialsector,governmentalunits,bigbusinessesanduniversities.Inthesecondhalfofthe1990’s,theincreaseintheusageofcomputersmadetheITsectoroneofthemostrapidlygrowingsectorsinTurkey.AccordingtothedataissuedbyInternationalDataCorporation(“IDC”),theTurkishInformationandCommunicationTechnologies(“IT”)sectorachievedacompoundan-nualgrowthrate(“CAGR”)of20%between1997and2000.In2000,theTurkishITsectorhasrea-cheditsgreatestbusinessvolumethusfarwith2.3billionUSD,whereasthatfigurereducedto1.2billionUSDwith49%recessionin2001becauseoftheeconomicalcrisisthatwasencounteredintheendof2000andthepostponementofthedemandofITinvestmentsbypublicandprivatesectors.Thefiguresachievedin2000wereagaincaughtonlyin2004,withabusinessvolumeof2.4millionUSD.Inotherwords,ittook4yearstoeliminatetheeffectsofthecrises.However,oneshouldalsoconsiderthatoneofthecausesoftheshrinkageofthebusinessvolumewasthecontinuouslypricereductionofproducts,whichisthestructuralfeatureoftheITIndustry.
Accordingto IDC’sresearch, ITmarketachievedgrowth from2009to2010with10,4%, from2010to2011with8,1%andfrom2011to2012with15%,from2012to2013with%7.In2015,sectorfacedwith%0,5shrinkagebecauseofhighpenetrationofsmartphones.
Turkish IT Market Business Volume (Mio $)
(mio
USD
)
CAGR ( 12-19T ): %2,4
IT Sector Business Volume
% Growth
8000
7000
6000
5000
4000
3000
2000
1000
02012 2013 2014 2015 E 2016 E 2017 E 2018 E 2019 E
5.5416.112 6.261 6.352 6.544 6.721
5.9466.447
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
Accordingtothe2015TurkeyITExpendituresResearchconductedbyIDC,theTurkishITmarketisexpectedtohavea2,4%compoundannualgrowthrate(CAGR)intheperiodbetween2012and2019F,reaching6,7billionUSDin2019.ITinvestmentdemandsdeferredinthe2001crisisperiodhavebeenstartedtoberealizedwiththeappearanceoftheincreasingstableoutlookoftheeconomyandtheseinvestmentexpenditureshavebeenoneofthemostpowerfuldynamicsofthemarketinthefirst5yearsfollowing2001.Newinvestmentsthatincreasedaftermergerand
Source: IDC 2015
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acquisitionoperationsinallsectors,beginninginthefinanceandtelecommunicationsectorsandspreadtoothersectorsfrom2005on,technologyreplacementinvestments,increasedITinvest-mentmadebythegovernmentaspartofe-governmentprojects,increaseintheinternetusageratesandfinally,inthenumberoftheuserswhofollowuptherapidlydevelopingtechnologybe-camethedrivingforcesofthemarketbetween2005and2008.Althoughthefirstquarterof2008startedveryfavourably,thesectorstartedtoloseitsstrengthduetothesuitbroughttocloseAKP,aslowdownwasexperiencedinthethirdquarterwhennotsomanynegativeresultswereobser-ved.However,withthelastquarter,thesectorwasaffectedbytheglobalfinancialcrisisthatstar-tedatthebeginningofOctober,andthus,thequarterwasclosedwithadouble-digitshrinkage.2009wasexperiencedasayearwhenthewoundsofthecrisiswerebandaged;theeffectsofthecrisisinthefirstquarterdiminishedwiththeeffectoftheVATcutappliedfor6months,includingthesecondandthirdquarters,andpositivegrowthwasrecordedinthefourthquarter.In2010,ITsectorachievedquitegradualgrowthafterconstitutionalreferendumparticularlystaticsummerseason.In2011,particularlyinthesecondhalfoftheyear,ITsectorwasaffectednegativelybycurrencyfluctuationssourcedbydebtcrisisofEuropeanCountries.
Ontheotherhand,iftheshareoftheend-usersinthemarketismonitoredintheperiodbetween1995and2005,itwouldbeclearlyseenthatthemarketstructurehaschangedconsiderably.
Changes in the Market Share of End Users
It isestimatedthat therateof thenumberofPCinoperatingstatustothetotalpopulationhasincreasedfrom8%to27%intheperiodbetween1995andendof2010,andthattherateoftheinternetusers to thetotalpopulationhas increasedfrom10%to37%in thesameperiod.ThisindicatesthatPCownershipandinternetusageratesincreasedover3timesinthelast15years.PCownershipandinternetusagerateshaveincreasedby67%and40%,respectivelyinthelast5years.ComparingtothecountrydatapublishedbyITUabove,itisclearthatTurkeyisfarbelowthedevelopedcountrieswithrespecttothePCownershipandinternetusersrateandthatthereisalongdistancetobecoveredinthisfield.ThePCandinternetpenetrationinTurkeybetween
Source: IDC 2015
2014
16%
9%
12%
15%
48%
2015
16%
8%
11%
15%
50%
2016 E
15%
8%
11%
16%
50%
2013
18%
9%
13%
14%
46%
1995
38%
30%
20%
5%
7%
2012
17%
11%
14%
14%
44%
2011
18%
11%
15%
14%
42%
2010
17%
13%
16%
14%
40%
2009
18%
14%
16%
14%
38%
2000
25%
35%
23%
7%
10%
2005
22%
25%
25%
10%
18%
Public Institutions
Finance Sector
Private Sector ( Corporate )
SMEs
Individual User
1995
2000
2005
2009
2010
2011
2012
2013
2014 16% 9% 12% 15% 48%
2015
2016 E
16%
15%
8%
8%
11%
11%
15%
16%
50%
50%
18% 9% 14% 46%
17%
7%
7%
11% 14% 14% 44%
18% 11% 15% 14% 42%
17% 13% 16% 14% 40%
18% 14% 16% 14% 38%
38% 30% 20% 5%
22%
25% 35% 23%
25% 25% 10%
10%
18%
13%
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2005and2017Fhasdevelopedasshowninthefollowinggraphics.
Trends in Internet & PC Penetrations
Accordingtotheresultsof“HouseholdsITUsageResearch”publishedbytheTurkishStatisticalInstitute(TÜİK)inApril2016statedwithbelowchart.
Theagegroupinwhichtherateofcomputerandinternetusageishighestis16-24.Theseratesarehigherinmenthanwomeninallagegroups.Byeducationallevel,thepopulationwhousethecomputerandinternetmostaregraduatesoffirstdegreeandhighereducationlevels.
Accordingtothereportresults,PCandinternetusagerateshaveincreasedby2%and4%,res-pectivelyintheperiodbetween2014and2015.
Comparison of computer and internet usage on area based (Rural & Urban) (%)
(2014-2015)
Computer Usage Rate Change
InternetUsage Rate Change
2014 2015 % 2014 2015 %
Computer and Internet Users Turkey53,5 54,8 2% 53,8 55,9 4%
In the last three months (January-March 2012)
Turkey 46,9 46,5 -1% 48,5 51,6 6%
Between three months and one year Turkey3,0 3,4 15% 2,6 2,1 -16%
Over 1 year Turkey3,6 4,9 35% 2,7 2,2 -21%
Never used Turkey46,5 45,2 -3% 46,5 44,1 -5%
Source:TUIK2014,2015
Source : IDC 2015
80%
70%
60%
50%
40%
30%
20%
10%
0%
25%
2005 2011 2012 2013 2014 2015 2016 T 2017 E
44%
52%58% 60%
65%68%
75%
2005 2011 2012 2013 2014 2015 2016 T 2017 E
15%
34%40%
46%50%
53%57%
60%70%
60%
50%
40%
30%
20%
10%
0%
Internet Penetration PC / Tablet Penetration
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Computer and internet usage
2.1.2. IT Market Comparison in the World and TurkeyAccordingtoIDC’sreportregardinggrowthratesbetweencountries,thehighestshrinkageratefrom2014to2015wasseeninRussiawith-39%andrespectivelyTurkeyandUkrainewith-35%,Egyptwith-31%.ThemainreasonforTurkishmarketdecreasewastheincreaseinmobilephoneusage.
World IT Market – Country Based PC Market Growth Analysis 2014-2015 (Quantity)
Source: TUIK 2015
Source: IDC 2015
Computer Usage Internet Usage
53,5
54,0
54,5
55,0
52,0
52,5
53,0
55,5
56,0
56,5
2014 2015
Countries Russia Turkey Saudi Arabia South Africa UAE Israel Ukraine Egypt Croatia Slovenia
2014 7,907 2,823 1,841 1,707 1,623 773 1,117 674 259 176
2015 4,851 1,836 1,604 1,549 1,395 812 731 467 231 158
Growth % -39% -35% -13% -9% -14% 5% -35% -31% -11% -10%
Dünya BT Pazarı - Ülkeler Arası PC Pazarı Büyüme Analizi 2014-2015 (Adet)
10.000
5.000
0
20142015
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2.2 Sub-segments of the ICT SectorTurkishITsectorisessentiallyseparatedintothreemaingroups,namelyhardware,softwareandITservices.Accordingto theTurkeyresultspublishedby IDC in2015, thebusinessvolumeofthe Turkish Information andCommunication Technologies (IT)market reached 5,4 billionUSDin2012.Thesamereportshowsthattheshareofthe“Hardware”,“Software”and“ITServices”sub-segmentsinthetotalmarketare66,1%,11,7%and22,2%,respectively.ThisindicatesthattheTurkishITsectorhasgotastructurewhere“hardware”ispredominantwithrespecttoincomecreated.
Source: IDC 2015
IT Sector Segments (xm$) 2012 2013 2014 2015E 2016E 2017E 2018E 2019E
Total IT 5,541 $ 5,946 $ 6,447 $ 6,112 $ 6,261 $ 6,352 $ 6,544 $ 6, 721 $
Service 1,038 $ 1,180 $ 1,361 $ 1,358 $ 1,396 $ 1, 483 $ 1,610 $ 1,720 $
Software 592 $ 636 $ 689 $ 713 $ 746 $ 789 $ 842 $ 904 $
Hardware 3, 911 $ 4,130 $ 4,397 $ 4,042 $ 4,119 $ 4,079 $ 4,092 $ 4,098 $
Server 202 $ 197 $ 215 $ 270 $ 285 $ 257 $ 262 $ 266 $
PC 1,997 $ 1,806 $ 1,804 $ 1,490 $ 1,707 $ 1,648 $ 1,608 $ 1,557 $
Tablet 402 $ 768 $ 902 $ 740 $ 529 $ 527 $ 534 $ 547 $
Data Storage 139 $ 159 $ 175 $ 214 $ 221 $ 235 $ 247 $ 256 $
Printers & Peripherals 448 $ 487 $ 572 $ 593 $ 628 $ 650 $ 666 $ 684 $
Network & Telco Units 723 $ 713 $ 729 $ 735 $ 750 $ 762 $ 775 $ 788 $
Source: IDC 2015
15.000
10.000
5.000
2014
2015
0
Countries Germany UK France Italy Spain Poland Holland Turkey Switzerland Belgium Czech Republici
Norway Austria Romania Portugal Greece Ireland
2014 12,946 10,908 9,376 4,542 3,616 3,063 2,896 2,823 1,653 1,593 1,191 1,265 1,036 781 772 746 529
2015 10,251 9,904 8,091 4,114 3,631 2,835 2,490 1,836 1,438 1,325 1,043 1,006 899 765 740 602 522
Growth % -21% -9% -14% -9% 0% -7% -14% -35% -13% -17% -12% -20% -13% -2% -4% -19% -1%
2015 Annual Report
28
IT Sector Segments (x m $ ) 2012 2013 2014 2015E 2016E 2017E 2018E 2019E
Hardware 3,911 $ 4,130 $ 4,397 $ 4,042 $ 4,119 $ 4,079 $ 4,092 $ 4,098 $
Software 592 $ 636 $ 689 $ 713 $ 746 $ 789 $ 842 $ 904 $
Service 1,038 $ 1,180 $ 1,361 $ 1,358 $ 1,396 $ 1,483 $ 1,610 $ 1,720 $
Total IT 5,541 $ 5,946 $ 6,447 $ 6,112 $ 6,261 $ 6,352 $ 6,544 $ 6,721 $
Growth % - 7.3 % 8.4 % -5.2 % 2.4 % 1.4 % 3.0 % 2.7 %
Growth in Segments 2012 2013 2014 2015E 2016E 2017E 2018E 2019E
Hardware - 5.6 % 6.5 % -8.1 % 1.9 % -1.0 % 0.3 % 0.1 %
Software - 7.4 % 8.4 % 3.4 % 4.7 % 5.8 % 6.7 % 7.4 %
Service - 13.6 % 15.4 % -0.3 % 2.8 % 6.2 % 8.6 % 6.8 %
% in Segments 2012 2013 2014 2015E 2016E 2017E 2018E 2019E
Hardware 70.6 % 69.5 % 68.2 % 66.1 % 65.8 % 64.2 % 62.5 % 61.0 %
Software 10.7 % 10.7 % 10.7 % 11.7 % 11.9 % 12.4 % 12.9 % 13.4 %
Service 18.7 % 19.8 % 21.1 % 22.2 % 22.3 % 23.4 % 24.6 % 25.6 %
Smart Phone Market in Turkey (x m $) 2012 2013 2014 2015E 2016E 2017E 2018E 2019E
Smart Phone 2,042 $ 3,425 $ 4,691 $ 6,477 $ 6,159 $ 5,728 $ 5,346 $ 5,051 $
Growth % - 67.8 % 37.0 % 37.4 % -4.5 % -7.0 % -6.7 % -5.5 %
Turkish IT Market 2012-2019F (Mio US$)
2012 2013 2014 2015E 2016E 2017E 2018E 2019E
Total IT & Telecom Market 16,734 $ 19,761 $ 23,856 $ 25,810 $ 26,071 $ 25,980 $ 25,876 $ 25,685 $
Growth % - 18,1 % 20,7 % 8,2 % 1,0 % -0,3 % -0,4 % -0,7 %
IT % 33,1 % 30,1 % 27,0 % 23,7 % 24,0 % 24,4 % 25,3 % 26,2%
Accordingtothe2015TurkeyITExpendituresSurveyconductedbyIDC,theTurkishITmarketisexpectedtohavea2,4%compoundannualgrowthrate(CAGR)intheperiodbetween2012and2019F,reaching6,7billionUSDin2019.Theseestimatesarebasedontheanticipatedgrowthrates,investmentsanticipatedtobemadebycompaniesrapidlyastheyweredeferredduetothecrisesof2001and2008,effectsofITexpendituresincurredbythepublicsectorfore-transfor-mationprojectsonITconsumption,increaseduseofITineducation,anticipatedincreasedrateoftheuseofinternetandmobiletechnologiesandreplacementinvestmentstobecausedbynewtechnologies.Contributionofsmartphoneproductswillbemuchhighertosectorgrowthin2016.
2.2.1 Hardware MarketHardwaremarketinTurkishITsectoristhesub-segmenthavingthebiggestshareregardingthesalesamountsof1999–2009,withtheratioschangingbetween57%and74%.Thehardwaresectordidnotachievegrowthfrom2015to2014.
Source: IDC 2015
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29
Growth Rates & Targets of Hardware Expenditures in IT Sector, 2012-2019F (Mio USD,%)
2.2.1.1 PC Market: Thehardwaresub-groupconsistingofDesktopPCs,portablePCs(“LaptopPCs”,“Notebooks”),ServersandPeripherals ismonitored via thesalesdata inPCmarketwhich represent a verysignificantportionof the totalsales.Accordingly, totalsalesof thePCmarketwere realizedas2,823,121 in 2014, whereas such total number (both notebook and desktop) decreased to1.836.747unitswithanshrinkageof35%in2015.
However, when the sales in the PCmarket are considered by quantity excluding the servermarket, it is noticed thatportablePCshavegainedmajority in thismarket for the first time in2009.Beginningfromtheyear2004,supplyingportablePCswithhighperformance,increasedmobilitypossibilitywiththeirlighterstructureandaffordablepricestotheconsumershasenabledsignificant increases in their sales,and finally,salesofportablePCshavesurpassed thoseofdesktopPCsin2009.
The developments at PCmarket are closely related with the ongoing projects in public andeducational sectors. The stable growth in demand of the consumers is also considered asanothersignificantfactoronthisissue.ThegrowingretailchainsandfinancialopportunitiesofferedtotheconsumersbythesechainshavebeenthemostimportantdrivingforcesforthePCsales.Besides,noticingthebenefitsofmobilecomputingsystemsbythecorporatecompaniesisseenasanotherimportantreasonforthegrowth.Atthispoint,onemayclearlyseefromthenmarketsalesfiguresthatthedemandbythesmallandlargeenterprisesseekingproductivityforportablePCsasanimportantpartofmobiledatasystemshasincreased.
Source: IDC 2015
(mio
USD
)
IT Sector Business Volume
CAGR ( 12-19T ): %2,4
-10%
-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
4400
4500
4300
4200
4100
4000
3900
3800
3700
36002012 2013 2014 2015 E 2016 E 2017 E 2018 E 2019 E
3.911
4.042
4.119
4.079
4.092 4.0984.130
4.397
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30
Turkish IT Market on Main Form Based 2014 – 2015
Besidestheproducerswhichhaveinternationalbrands,aconsiderablepartofhardwareproduc-tionbothinsideandoutsidethecountryisperformedwiththemaincomponentsthatareobtainedfrom theglobalcomputerpartssuppliersbybigandsmall-sizedcompanies.Over time, thesefactorshavetransformedthehardwareproductmarketandtheespeciallyPCmarketintoalowaddedvaluestructureinwhichthecompetitionishighlysensitivetotheprice.
2.2.2 Software MarketThesizeofthesoftwaresub-groupincreasedfromUSD276millionin1999toUSD377.3millionin2000.However,inthe2001crisis,justlikeinhardwaresector,softwaresectordecreasedtoUSD172.3millionwithshrinkageofabout54%andvolumebecame215millionUSDin2002.AccordingtoIDC’s,itisexpectedITSectorsoftwaremarkettoachieveCompoundAnnualGrowthRateof5,4%between2012and2019Fandreach904millionUSD.
Asoftheendof2010,theshareofthesoftwaresub-groupintheentireITmarketintermsofthetotal turnover isatvery low levels incomparisonwithEuropeandAmericawith13,3%share,mainlybecauseofpiratedusages.MicrosoftOffice,beingacommonlyusedprogram,isthemostpiratedprogram.ThelawswhichwereenactedbytheTurkishParliamentin1995forpurposeofensuringtheprotectionoftheregistrationrightsdecreasedthepiratedusagerate.Accordingtotheestimationsofourcompany,while70%ofthesoftwareisillegallyusedinTurkey,thisrateisaround35%intheUSA.
Because the operating system software is purchased as incorporated into the computer, itspiratedusageislessthanothersoftware.Theregistrationrightlawshadinfluenceonthecustom
Source:IDC2015
Desktop
927,382547,602
Mobile PC
1,895,7391,289,145
Total
1,811,8611,836,747
20142015
-41% -32% -35%Growth
Mobile PC
Desktop ■ 2013 ■ 2014 33%33% 30%
67% 70%
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suppliersusingpiratedproductsmostfrequently.Mostofthecustomsuppliersusethelicensedoperatingsystemsoftwareatpresent.
IT Sector Software Expenditures Growth Figures and Growth Targets, 2012-2019F (Mio USD,%)
(mio
USD
)
IT Sector Business Volume
CAGR ( 12-19T ): %2,4
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%1000
800
600
400
200
02012 2013 2014 2015 E 2016 E 2017 E 2018 E 2019 E
592$
713$ 746$ 789$842$
904$
636$689$
2.2.3 IT Services MarketContrary to the hardware and software sub-sectors, IT Services sub-sector s the constant and necessary services relating to the existing IT investments periodically and leasing services. In the 2001 crisis, the Turkish IT Services Market decreased to 288.2 million USD with a decrease of 39% comparing to the previous year. The volume of the Turkish IT Services Market grew faster than the total market in 2002, reaching 403.5 million USD, and the share of the IT Services in the total market increased to a record level of 28.1% in the same year. However, in spite of the pressure of the crisis that deepened in the last quarter of 2008 on the consumption tendencies, the market was realized at 881 million USD in 2009 and achieved 18,6 % growth rate when compared to 2008.
The share of the IT Services in the total market was 17,8 % in 2009, which increased to 18,6 in 2010. In 2011, this rate became 19 %. However, it is expected that this share will increase due to the needs that may arise during the integration of newer technology sys-tems on the existing systems and outsourcing of IT operations by big companies –banks in particular. The Compound Annual Growth Rate between 2012 and 2019F is expected to be 6,5 % and reach 1,720 billion USD.
Source:IDC2015
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IT Sector IT Services Growth Figures and Growth Targets, 2012-2019F (Mio USD,%)
Source: IDC 2015
İndeks Bilgisayar in the ICT Sector:
InTurkey,Top500 ICTCompaniesRankingperformedeveryyearby InterproMedyaA.Ş.,ourcompany rankedsixth in thegeneral rankingbasedon turnoverachieved in2014among thecompaniesincludingtelephoneoperatorsandmobilephonesellers.Ontheotherhand,itrankedfirst,likethepreviousyears,inthecategoryofcompaniessellingonlycomputers.Further,itrankedfirstinsevenITcategories.
2014 Top ICT Companies Revenue Range (Sales Revenue)2014 Range Company USD (mio)
1 Turk Telecom 6.2052 Turkcell 5.4943 Vodafone 3.4324 Teknosa 1.2225 Gen-pa 1.0796 Indeks Computer 1.0067 KVK Teknoloji 9268 Brighstar 7689 Penta Teknoloji 61810 Hewlett-Packard 590
(mio
USD
)
CAGR ( 12-19T ): %2,4
IT Sector Business Volume
2012 2013 2014 2015 E 2016 E 2017 E 2018 E 2019 E-2%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
1.038$1.180$
1.361$ 1.358$ 1.396$1.483$
1.610$1.720$
500
2000
1000
1500
0
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Important Events in the IT Sector in 2015:
ImportanteventsthatoccurredintheTurkishITSectorin2015arelistedbelow:
1.Inparticular,widespreadofTabletsandSmartPhonesaffectedthesalesofmobile
anddesktopPCs.
2.Robotterms.
3.Cloudimplementations(GoogleDrive,Mega,Dropbox)
4.3DPrintingsystems
5.Smartwhitegoods
6.Wearabletechnologies
7.Socialmediaincommunication
34
03 SUBSIDIARIES
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3. Subsidiaries
ThefinancialstatementsofDatagateBilgisayarMalzemeleriA.Ş.,ArtımBilişimÇözümveDağitımA.Ş.andTeklosTeknolojiLojistikHizmetleriA.Ş.areconsolidatedbyfullconsolidationmethodandthoseofNeteksİletişimÜrünleriDağıtımA.Ş.byproportionalconsolidationmethod.Thefinancialstatementsof İnfinBilgisayarTicaretA.Ş.andNeteksDışTicaretLtdŞtiarenot includedintheconsolidationbecausetheir lowvolumesofoperationarenot likelytobeofsignificanceforthefinancialstatements.
3.1. Datagate Bilgisayar Malzemeleri Tic. A. Ş.
DatagatebecameadistributorofAVEAGSMOperator.Inthiscontex,itdistributessmartphoneofInternationalandlocalphoneproducers,tablet,simcards,physicalTLcredit(forprepaidphones)andaccessories.
Thepartnershipstartedwiththeacquisitionof50.5%sharesofDatagateBilgisayarMalzemeleriA.Şby İndeksBilgisayarA.Ş. in2001 reached85.00%withanadditionalacquisitionof34.5%bythesamecompanyinNovember2003.PartnershipshareofİndeksBilgisayardecreasedto59.24%withthepublicofferingofDatagateinFebruary2006.
InFebruary2006,thesharesofDatagateBilgisayarMalzemeleriTic.A.Ş.wereofferedtopublicsuccessfully,restrictingthepreferentialrightsoftheexistingshareholders,andbeguntobetradedintheNewEconomyMarketofIstanbulStockExchange.Itscapital,whichwasTRL1,550,000before public offering, has increased to TRL6,600,000 following thepublic offering.With thepublicoffering,thecapitalofDatagateBilgisayarMalzemeleriTic.A.Ş.wasincreasedfromTRL6.600.000toTRL10.000.000in2007,coveringTRL1.910.004fromtheprofitoftheperiod in2006andTRL1.489.996fromtheSharePremiums.Themainproductgroupsandbrandsdistri-butedbyDatagatearelistedbelow:
Group BrandsTelephone Apple, Samsung, Nokia, Sony, HTC, LG, Huawei, Vestel, General Mobile, ZTE, Avea Tablet Apple, Samsung, Casper, Asus, Router ZTEAccessories Apple, Samsung, LG
Name of Subsidiary Percentage of Share Issued CapitalDatagate Bilgisayar Malzemeleri A.Ş 59,24% 10.000.000 TRL Neteks İletişim Ürünleri Dağ. A.Ş. 50,00% 1.100.000 TRL Artım Bilişim Çözüm ve Dağitım A.Ş. 51,00% 1.210.000 TRLİnfin Bilgisayar Ticaret A.Ş. 99,80% 50.000 TRL Neteks Dış Ticaret Ltd. Şti. (*) 49,50% 5.000 TRLTeklos Teknoloji Lojistik A.Ş 99,99% 5.000.000 TRL(*) Neteks Dış Ticaret Ltd. Şti is a 99% owned subsidiary of Neteks İletişim Ürünleri Dağıtım A.Ş.
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3.2. Neteks İletişim Ürünleri Dağıtım A.Ş.
Netekswasestablishedtoprovidenetworkandcommunicationproductstothemarketthroughitsretailersandbusinesspartnersasadistributorcompanyin1996.Netekshastriedtoprovidecompletenetworksolutionstobusinesspartnersbyaccommodatingthemostexperiencedna-mesintheirfieldsinTurkey.BesidesthecorporatenetworkssystemsanditscomponentsofthecompaniessuchasCisco,NortelNetworks,3Com,HP,JuniperandAvocent,NeteksA.S.alsodistributescorporate telephoneswitchboardsystemsofNortelNetworksandAvaya,structuralcableproductsofHSC,Corning,PanduitandGünko,networksecuritysolutionsofCheckPoint,TrendMicroandIBMISS.
ThemainproductgroupsandbrandsdistributedbyNeteksarelistedbelow:
Product Group BrandsCorporate Network Systems Cisco System, Nortel Networks, 3ComCorporate Telephone Switchboard Systems
HP, Avocent, Nortel Networks, Avaya
Structured Cabling Solutions Corning, HCS, PanduitNetwork Security Solutions Check Point, Trend Micro, F5
70%and24%oftheshareofNetekswereacquiredbyİndeksandDatagateA.Ş.,respectively,in2001.In2007,6%ofNeteksA.Ş.’sshareswhichareheldbyothershareholderswereacquiredbyIndeksA.Ş.atUS$374.000.Ourcompanykept50%ofsharesforitselfandsold26%toWest-conGroupEuropeanOperationLimitedatUS$1.820.000.Accordingtotheagreementsignedbetweentheparties,24%ofthesharesofNeteksİletişimÜrünleriDağıtımA.Ş.heldbyDatagateBilgisayarA.Ş,asa59,24%affiliateofİndeksBilgisayarA.Ş.andlistedinIstanbulStockExchange,weresoldtoWestconGroupEuropeanOperationLimitedatUS$1.680.000.
Ofthe50%sharessold,26%and24%wereprovidedbyİndeksBilgisayarSistemleriMühendislikSanayiveTicaretA.ŞandDatagateBilgisayarMalzemeleriTicaretA.Ş.,respectively. İndeksBil-gisayarA.Ş.andWestconGrouphavehad50-50%ofthesharesofNeteksA.Şafterthesaleofshares.
3.3. Artım Bilişim Çözüm ve Dağitım A.Ş
ArtımBilişimA.Şwasestablishedin2003inIstanbultobevalueaddeddistributorforchannelbusinesspartners.It intendstobetheleaderfirminthecategorythatitoperatesforproductsandservices.ItcontinuesprovidingneedsofITworldwithits2branchesinAnkaraandİzmir.Since2011,itwillcontinuedeliveringitsallsolutionstoitscustomerundertheexcellenceofIndexGroup.
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Product Group BrandsOracle Solutions OracleSecurity & Printing Solutions Sentinel, Pcounter, Safecom, Follow Me, TroyDocument Management Solutions
Form Port, Smart Printer, Welp, XPress, Nuance Smart Office Scan, Nuance Scan Flow Store, Nuance eCopy PDF Pro Office
Special Solutions TowerTray, Stick and go, P2M, Winsert, Cluster Que, Bardimm, Fax Manager, TroyService Spare Parts Solutions
Hp, Sun Oracle, Dell, Fujitsu, Lenovo
OTVT Solutions Intermec
3.4. İnfin Bilgisayar Ticaret A.Ş.
İnfinBilgisayarTicaretAnonimŞirketiwasestablishedin2001tohelptheretailerswiththeirsalesandexportoperationswithintheframeworkofinvestmentoperationsunderincentivecertificates.
Duetothefactthatitsbiggestpartofpurchaseandsalesofthecompanywasarisenoutofthecompaniesincludedinthefinancialstatements,anditsbusinessvolumewassolowthatdoesnotmakeanyimpactonthefinancialstatements,thiscompanyisleftoutofthesaidstatements.
3.5. Teklos Teknoloji Lojistik A. Ş
ThiscompanywasfoundedunderthenameofKaradenizÖrmeSanayiA.Ş.tooperateintextilesectoron03.01.1973.InMarch2006,İndekshasexecutedanimportantandgreatestinvestmentinITsectorbypurchasingKaradenizOrmeA.S.,whichisfoundedona39,761squaremeterslandandhaving18,969squaremetersindoorarea,inordertobeusedasalogisticsheadqu-arters.ThetradenameofKaradenizOrmeAShasbeenchangedintoTeklosTeknolojiLojistikHizmetlerA.Ş.anditsfieldofactivityhasbeenchangedtoaslogisticsservices.TeklossignedarevenuesharingagreementwithSebaConstructiontodevelopluxuryofficesontheland.Ac-cordingtotheagreement,%40,5incomefromthesaleofdevelopedofficesprojectbelongtoTeklosandthiswillberealiseduntilmay2017.Tekloscontinueitsoperationson23.500metersquareclosedareainTuzla/Şekerpınar(Anatolianside).
TeklosTeknolojiLojistikHizmetlerA.Ş.isprovidinglogisticservicestothecompaniesoperatingintheITsector.
38
04 OPERATION
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4. Operation
ThesupplyanddistributionstructureofIndeksBilgisayarA.Ş.isshownasfollows:
1.Structure of Product Supply and Distribution:
Indeksoperatesasamaindistributor(“broadlinedistributor”)inITindustry.ItbuysITproductsfromsuppliersatcertainpricesandmaturityperiodsandsubsequentlysellstheproductstothesaleschannelsthatwillsellthemtotheenduser.Thecompanydoesnotplantodevelopasalesstru-cturethatwillincludedirectsalestotheenduserinthenearfuture.
1.1.Suppliers:
Thehardwareandsoftwaresuppliersofthecompanyaregroupedintotwocategories.
• GlobalbrandsthatoperateinTurkey:(APPLE,IBM,HP,LENOVO,INTEL,SEAGATE,CA-NON,OKI,SYMANTEC,MICROSOFT,APC,FUJITSUSIEMENS,EPSON,TOSHIBA,SONY,ASUS).Asthisisthenatureofthebusiness,theseglobalcompaniespreferworkingwithdist-ributorswhicharelessinnumbersinsteadofhandlingdistribution,
• GlobalbrandsthatdonotoperateinTurkey:(KINGSTON,NEC,VIEWSONIC,WESTERNDIGITAL)ThesecompanieshavenotsetupofficesinTurkeyyet.However,thesecompaniesconducttheirimports,salesandmarketingactivitiesthroughthedealershipofdistributors.•
1.2.Distribution Channel:
Asadistributioncompany,Indeksbuystheproductsfromsuppliers.Furthermore,itresellsthemtothesaleschannelswhichselltotheenduser.ThestructureofdistributionchannelswhichIn-dekssellstoandwhichsellITproductstotheenduserinTurkeyissummarisedbelow:
Supplier Supplier Supplier Supplier Supplier Supplier
İNDEKS BİLGİSAYAR A.Ș.
System Integrators
Value AddedDealers Channel
Regular Dealers Retail Channel
Retail Chains
RegularShops E-Commerce
END USER
40
2015 Annual Report
1.2.1. Solution Provider Dealers Channel (System Integrators)
Withrespecttothenumberofpeopletheyemploy,companiesinthischannelhaveatleast100employees.Theyareamong the relativelyoldcompanies in the industry. Theenduser thesecompaniestargetissolelythebigcorporatecustomers.Theyhaveexperienceintheindustryandhaveespeciallyhighservice,salesandproductrecognitioncapabilities.Themaintargetofthecompaniesinthischannelistoadaptnewtechnologiestocorporatecustomers.
Thenumbersofthesecompaniesarenotmorethan100alloverTurkeyatthemoment.
1.2.2. Value Added Dealers:
Withrespecttothenumberofpeopletheyemploy,companiesinthischannelhave25-100emp-loyees.Thesecompaniesaremorelimitedwithrespecttocapitalbutthankstotheiryounganddynamicstructures,theyareabletomakequickdecisionsandoperateonlowmarginsbykeepingcostsdown.Theirtargetgroupismultinationalcompaniesandcorporatecustomerswithgenerallyonelocation.
Distributorssupportthesecompanieswithrespecttofinance,logistics,andproductinformation.Thesecompaniesdonothaveanintensiverelationshipwiththemanufacturers.Thenumbersofthesecompaniesaremorethan500alloverTurkey.
1.2.3. Regular Dealers (Classic):
Theseareprettysmallcompanieswithastaffof5to25.Theydonothavetheirownuniqueso-lutions.TheirtargetisSMEsandthehomemarket.Theynumberatleast4.000to5.000andarethebiggestgroupintheITindustry.
Thesecompaniescarryouttheiroperationsfullywithdistributorcompanyresources.TheirsalesaremoredirectedtowardsOEMproductsandperipheralsthanbrandedproducts.
1.2.4. Retail Channel
Intherecentyears,RetailChainsdiversifiedandreachedhugetransactionvolumewiththereasonofinvestmentsmadebylocalchainsshopsandtheinvestmentalsomadebyinternationalchainsinthiscategory.Furthermore,FoodChainShopsandDowryShopsincreasedtheirbusinessvo-lume.MajorityofhomemarketneedsisprovidedbyabovementionedchainshopsinTurkey.ForIndeks,thereare3typesofretailgroups:
i. Retail Chains:
TheretailchainsarebiggroupshavingmorethanonestoreunderthesamebrandsuchasTek-nosa,Bimeks,Vatan,Gold,MediaMarkt,Darty,Electroworld,BestBuyTeknolojiks,NT,Yalçınlar,Evkur,Metro,Migros,Real,Carrefour,Tesco/Kipa.Themainfunctionofsomegroupsofthisca-tegoryiscomputer,whilesomeofthemsuchfoodmarketsanddowryshopsarechainsdealingwithcomputerasasecondarybusiness.
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41
ii. Regular Computer Stores (Classic):
Thesestoresaresmallcompanieswheretheownerofthestoreandafewsalesrepresentativesworkandtheyoperatewithlimitedresources.Theyaretotallyfocusedoncomputers.
iii. E-Retail:
Thischannel isbasedonvirtualmarketswhichopenvirtualstoresandoperate in the internetmedium.Duetothewidespreadusageoftheinternetintherecentyears,thenumberofthecom-paniesoperatinginthischannel is increasinglygrowing.ThecompaniessuchasHepsiburada,e-storearetheexamplesofthistypeofchannel.
2.Logistic
Indeksmakessalesanddistribution via its323employeesandmore than7000dealerswithcompaniesincludedintoconsolidationinitsfinancialstatementsto81provincesofTurkeyfromitslogisticcentresinIstanbul,AnkaraandIzmir.
Thebranchoffices inAnkaraandİzmirestablishedin1992and1995,respectively,operateas“districtoffices”.Havingtheirownlogistic,sales,accounting,finance,currentaccountsandcusto-merservicesdepartments,theyareresponsibleforsalestothedealersanddevelopmentofthesaleschannelsintheircities.AnkaraofficeisresponsibleforthedistrictAnkara,CentralAnatoliaandEasternAnatoliaRegions,İzmirOfficefortheDistrictIzmir,WesternAnatoliaandAegeanRe-gions.TheareasnotincludedtheforegoingshallbeundertheresponsibilityoftheheadquartersinIstanbul.
IndekshasexecutedoneofthemostimportantandgreatestinvestmentsinITsectorbypurcha-singKaradenizOrmeA.Ş.,whichisfoundedona39,761squaremeterslandandhaving18,969squaremetersclosedarea,inordertobeusedasalogisticsheadquarters.ThetradenameofKaradenizOrmeA.Ş.hasbeenchangedintoTeklosTeknolojiLojistikHizmetlerA.Ş.anditsfieldofactivityhasbeencustomizedtobeabletoworkonthelogisticsservices.TeklosTeknolojiLojistikHizmetlerA.Ş. isprovidinglogisticservicestothegroupcompaniesandothercompaniesin ITsectoraswell.Theheadofficeofthecompanymovedtoitsnewlocationon26.10.2006.
TeklossignedarevenuesharingagreementwithSebaConstructiontodevelopluxuryofficesontheland.Accordingtotheagreement,%40,5incomefromthesaleofdevelopedofficesprojectbelongtoTeklosandthiswillberealiseduntilmay2017.Tekloscontinueitsoperationson23.500metersquareclosedareainTuzla/Şekerpınar(Anatolianside).
IndekshasalsodistrictwarehousesinAnkaraandIzmir.
3. Invoicing and Collection
IndeksmakessalestoalmostallcompaniesdealingwithcomputerandITproducts.
Thiskindofdealers,whichareestimatedasnumberabout5,000intotalinTurkey,areconsideredRegularDealer(ClassicDealers).
CreditCommittee:
42
CreditclaimsofthedealersaresubmittedtotheCreditcommitteethatdoesmeetingseveryweekonaregularbasisforthispurpose.ThesemeetingareorganizedwithheadedofCFO(AssistantGeneralManagerresponsibleforFinancialandOperationalAffairs),AssistantCFO,FinanceMa-nager,Credit&RiskManagerandSalesManagersofrelatedcustomers.
4. Technical Support and Customer Service
TheCompanydoesnotprovideaftersaleservice.Instead,itdirectsitscustomerstothecom-paniesofeachproductauthorisedtoprovideservice.Itisbecausethesuppliersprefertheirownsolutionpartnertoprovideservicetotheenduser.
5. Marketing and Sales
DuetothestructureoftheITindustry,thetechnologiesandpricesoftheproductsthat Indeksdistributesaresubjecttofrequentchangesandimprovements.Therefore,anefficientandeffe-ctive inventorymanagementandrateof inventoryturnovermaymakesignificant impactontheoperationalperformanceofcompanies.
Consideringthedynamicstructureoftheindustry,Indeksassignsoneproductmanagerforeachgroupofproduct.Theproductmanagershavethemissionofunderstandingtherequirementsofthesalesgroupswithdifferingtargetsandobjectivesarecomprehendedbetterandtherefore,theCompanyprovidesbetterservicetosuchgroups,followingupthemarketandtechnologytrends,executingthemarketingactivites.
Exchangeofinformationwithcustomersareprovidedviaweb,e-mailandfax.
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44
06 INDEPENDENT AUDIT REPORT
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INDEPENDENT AUDIT REPORT To The Board of Directors of İndeks Bilgisayar Sistemleri Mühendislik Sanayi ve Ticaret Anonim Şirketi
Report on the Consolitated Financial Statements
We have audited the accompanying consolidated financial statements of İndeks Bilgisayar Sistemleri Mühendislik Sanayi ve Ticaret Anonim Şirketi, its subsidiaries (together with “Group”) which comprise the consolidated balance sheets at December 31, 2015 and the consolidated income statement, consolidated statement of changes in shareholders’ equity and consolidated statement of cash flows for the years then ended, and a summary of significant accounting policies and other explanatory notes.
Management’s Responsibility for the Consolitated Financial Statements
The Group’s management is responsible for the preparation and fair presentation of these consolidated fınancial statements in accordance with the Turkish Accounting Standards (“TAS”) published by the Public Oversight Accounting and Auditing Standards Authority (“POA”) and for such internal controls as management determines is necessary to enable the preparation of consolidated fînancial statements that are free from material misstatement, whether due to error and/or fraud.
Auditor’s Responsibility for the Consolitated Financial Statements
Our responsibility is to express an opinion on these consolitated financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.
Our audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolitated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolitated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the consolitated financial statements 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 entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the accompanying consolidated fınancial statements present fairly the fınancial position of İndeks Bilgisayar Sistemleri Mühendislik Sanayi ve Ticaret Anonim Şirketi and its subsidiaries as of 31 December 2015 and its consolitated fınancial performance and consolitated cash flows for the year then ended in accordance with the Turkish Accounting / Financial Reporting Standards (“IAS / IFRS”) framework.
Other Responsibilities Arising From Regulatory Requirements
In accordance with subparagraph 4 of Article 398 of the Turkish Commercial Code (“TCC”) No:6102; auditor’s report on the early risk identification system and comitee has been submitted to the company’s Board of Directors on March 9, 2016.
In accordance with subparagraph 4 of Article 398 of the “TCC”; no significiant matter has come to our attention that causes us to believe that the Group’s bookkeeping activities for the period January 1 – December 31, 2015 is not in compliance with the code and provisions of the Group’s articles of association in relation financial reporting.
In accordance with subparagraph 4 of Article 398 of the “TCC”; the board of directors provided us the necessary explanations and submitted required documents within the contex of audit.
GÜRELİ YEMİNLİ MALİ MÜŞAVİRLİK VE BAĞIMSIZ DENETİM HİZMETLERİ A.Ş.An Independent Member of BAKER TILLY INTERNATIONAL
Dr. Hakkı DEDECertified Public AccountantIstanbul, March 9, 2016
46
07 FINANCIAL STATEMENTS AND FOOTNOTES
2015 Annual Report
47
FINANCIAL STATEMENTS AND FOOTNOTES
BALANCE SHEET (TL)
ASSETS Notes Audited31 December 2015
Audited31 December 2014
Current Assets 1.257.203.521 962.107.748
Cash and Cash Equivalents 6 136.763.531 111.965.405
Financial Investments 7 - -
Trade Receivables 10 881.469.750 636.440.126
- Receivables from Related Parties 10-37 2.410.177 2.612.603
- Other 10 879.059.573 633.827.523
Other Receivables 11 682.586 860.472
- Receivables from Related Parties 11-37 346.748 274.998
- Other 11 335.838 585.474
Derivative Financial Instruments 12 - 165.039
Inventories 13 206.642.916 170.285.057
Prepaid Expenses 15 8.502.277 7.263.191
Assets Relating to Current Period Tax 25 - 2.366
Other Current Assets 26 23.142.461 35.126.092
Non-Current Assets 129.511.471 97.629.742 Financial Investments 7 63.605 63.605
Trade Receivables 10 67.085.142 43.872.812
- Receivables from Related Parties 10-37 - -
- Other 10 67.085.142 43.872.812
Other Receivables 11 51.685 51.685
- Receivables from Related Parties 11-37 - -
- Other 11 51.685 51.685
Investments Evaluated by Equity Method 16 10.193.899 9.053.260
Investment Properties 17 30.571.138 30.597.609
Tangible Fixed Assets 18 6.840.916 8.472.157
Intangible Fixed Assets 19 5.233.861 2.274.424
- Goodwill 19 1.897.699 1.897.699
-Other 19 3.336.162 376.725
Deferred Tax Assets 35 9.471.225 3.244.190
Total Assets 1.386.714.992 1.059.737.490
The accompanying notes are integral parts of the financial statements.
INDEKS BILGISAYAR SISTEMLERI MUHENDISLIK SANAYI VE TICARET A.Ş. CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2015
2015 Annual Report
48
BALANCE SHEET (TL)
The accompanying notes are integral parts of the financial statements.
LIABILITIES Note Audited31 December 2015
Audited31 December 2015
Short-Term Liabilities 1.108.294.894 843.017.116 Short-Term Borrowings 8 58.684.728 42.252.403
Short-Term Portion of Long-Term Borrowing 8 196.577.011 49.349.734
Other Financial Liabilities 9 - -
Trade Payables 10 719.866.860 683.603.073
-Trade Payables to Related Parties 10-37 162.404 15.896
-Other 10 719.704.456 683.587.177
Liabilities in the Scope of Employee Benefits 20 485.108 566.066
Other Payables 11 6.811.278 3.969.207
-Other Payables to Related Parties 11-37 - -
-Other Payables to Non-Related Parties 11 6.811.278 3.969.207
Derivative Financial Instruments 12 165.962 -
Deferred Earnings 15 81.772.126 29.854.926
Current Period Profit Tax Liability 35 5.598.029 5.619.205
Short-Term Provisions 22 38.333.792 27.802.502
-Other Short-Term Provisions 22 38.333.792 27.802.502
Other Short-Term Liabilities 26 - -
Long-Term Liabilities 70.580.673 44.797.076 Long-Term Borrowings 8 67.160.341 41.804.265
Long-Term Provisions Regarding Employee Benefits 24 3.293.817 2.783.123
Deferred Tax Liabilities 35 126.515 209.688
SHAREHOLDER’S EQUITY 207.839.425 171.923.298
Shareholders’ Equity Related to Parent Company 27 178.642.621 152.798.427 Paid-in Capital 56.000.000 56.000.000
Share Capital Adjustments 1.064.323 1.064.323
Withdrawn Shares (-) (634.290) (634.290)
Share Premiums - -
Non-Reclassification to profit or loss Accumulated Other
Comprehensive Income or Expenses(374.350) (198.766)
- Defined Benefit Plans and Measurement Revaluation Gains /
Losses(374.350) (198.766)
Reclassification to profit or loss Accumulated Other Comprehensive
Income or Expenses11.404.396 9.065.695
- Foreign Currency Translation Differences 11.404.396 9.065.695
- Hedging 12 - -
Restricted Reserves Assorted from Profit 12.605.752 9.957.469
Previous Years’ Profit/(Loss) 53.656.587 52.370.539
Net Profit/(Loss) for the Period 44.920.203 25.173.457
Non-Controlling Interests 27 29.196.804 19.124.871
TOTAL LIABILITIES 1.386.714.992 1.059.737.490
2015 Annual Report
49
COMPREHENSIVE INCOME STATEMENT (TL)
CONTINUED OPERATIONS Note
Audited
January 1, 2015-
December 31, 2015
Audited
January 1, 2014-
December 31, 2014
Sales 28 3.384.690.880 2.206.019.328
Cost of Sales (-) 28 (3.231.879.393) (2.103.438.874)
GROSS PROFIT 152.811.487 102.580.454General Administrative Expenses (-) 29 (30.868.074) (29.292.476)
Marketing, Sales and Distribution Expenses(-) 29 (30.272.070) (19.283.597)
Other Operating Income 31 97.669.633 88.177.079
Other Operating Expenses (-) 31 (98.408.039) (83.649.695)
OPERATING PROFIT 90.932.937 58.531.765
Share in Profit / (Loss) of Investments Evaluated According to Equity Method (975.527) 767.290
Income from Investing Operations 32 49.929 8.829
Expenses from Investing Operations (-) 32 - (17.941)
OPERATING PROFIT/(LOSS) BEFORE FINANCIAL EXPENSES 90.007.339 59.289.943Financial Income 33 17.584.771 797.947
Financial Expenses (-) 33 (38.260.479) (22.584.911)
CONTINUED OPERATIONS PROFIT BEFORE TAXATION 69.331.631 37.502.979Continued Operations Tax Income / (Expense) (14.182.218) (7.751.532)- Tax Income / (Expense) for the Period 35 (20.447.333) (9.692.518)
- Deferred Tax Income / (Expense) 35 6.265.115 1.940.986
Distribution of Profit / (Loss) of the Period 55.149.413 29.751.447Non-Controlling Interest 10.229.210 4.577.990
Parent Company Share 44.920.203 25.173.457
Earnings / (Loss) Per Share 36 0,802146 0,449526OTHER COMPREHENSIVE INCOME: 2.005.840 169.947Items Not To Be Reclassified in Profit / Loss (180.375) (1.958)Actuarial Gains and Losses from Retirement Plans (175.584) (7.898)
Minority Actuarial Gains and Losses (4.791) 5.940
Items To Be Reclassified in Profit / Loss 2.186.215 171.905
Foreign Currency Exchange Differences 2.186.215 171.905
Cash Flow Hedge Gains / Losses 12-27 - -
Distribution of Other Comprehensive Income 57.155.253 29.921.394Non-Controlling Interest 10.071.933 4.277.169
Parent Company Share 47.083.320 25.644.225
The accompanying notes are integral parts of the financial statements.
2015 Annual Report
50
NoteAudited
January 1, 2015-December 31, 2015
AuditedJanuary 1, 2014-
December 31, 2014
A) CASH FLOW PROVIDED FROM OPERATIONS (118.723.145) (25.383.676)
Period Profit/(Loss) 55.149.413 29.751.447
Corrections Regarding Period Profit/Loss Reconciliations 64.331.137 47.753.573
Corrections Regarding Depreciation and Amortization 17-18-19 2.559.592 2.346.456
Profit (+) / Loss from Sale of Fixed Assets 18-19 (49.929) 17.941
Increase in Termination Indemnity Provision (+) 24 1.120.870 1.098.568
Termination Indemnity Payments (-) 24 (835.644) (986.133)
Receivables Rediscount Amount (+) 10 16.431.583 10.980.568
Increase (+) / Decrease (-) in Provision for Debts 22 10.531.290 8.425.796
Prediscount on Debts (-) 10 (3.721.260) (143.883)
Provision for Doubtful Receivables for Current Period (+) 10 1.890.484 570.489
Provision for Nullified Doubtful Receivables (-) 10 (61.657) (286.722)
Provision for Decrease in Value of Inventories (+) 13 2.096.206 396.009
Interest Expenses (+) 31-33 71.062.558 40.398.408
Interest Income (-) 31-33 (50.875.174) (22.815.456)
Tax Income / Expenses(-) 14.182.218 7.751.532
Operational Income Before Changes in Working Capital: (281.951.425) (105.140.871)
Corrections Relating to Changes in Inventory 13 (38.454.065) (23.997.558)
Increase in Trade Receivables /Other Receivables (-) 10-11 (286.324.478) (244.627.984)
Increase in Financial Assets Ready for Sale (-) - -
Increase in Trade Payables /Other Payables (-) 10-11 42.827.118 163.484.671
Cash Inflow Provided/(Used) From Operating Activities: (162.470.875) (27.635.851)
Increase (-) / Decrease (+) in Other Current Assets 26 11.983.631 (1.801.636)
Cash Assets from Consolidation - -
Decreases in Other Liabilities (-) / Increase (+) 26 - -
Other Changes (+) / (-) 52.232.608 9.548.505
Tax Payments (-) (20.468.509) (5.494.694)
B) NET CASH USED IN INVESTMENT OPERATIONS (3.811.388) (8.516.565)
Net Tangible Assets Purchases (-) - -
Investment property (-) 17 - (128.713)
Cash Inflow from sale of Tangible and Intangible Assets 18-19 80.567 101.397
Purchase of Assets from Financial Lease (-) 18-19 (711.735) (2.556.292)
Cash Outflow from sale of Tangible and Intangible Assets 18-19 (3.180.220) (5.932.957)
C) CASH FLOW RELATING TO FINANCIAL ACTIVITIES 147.329.173 71.501.007
Change in Short Term Financial Liabilities (+) 8 163.659.602 54.071.390
Change in Long Term Financial Liabilities (+) 8 25.356.076 38.151.891
Dividends Payments (-) (21.239.126) (3.126.257)
Interest Payment (-) (20.447.379) (17.596.017)
Hedging - -
NET INCREASE / DECREASE OF CASH AND CASH EQUİVALENTS
BEFORE THE EFFECT OF FOREİGN CURRENCY TRANSLATİONS24.794.640 37.600.766
NET INCREASE / DECREASE OF CASH AND CASH EQUIVALENTS 24.794.640 37.600.766
D. BEGINNING BALANCE of CASH and CASH EQUIVALENTS 6 111.958.593 74.357.827
ENDING BALANCE of CASH and CASH EQUIVALENTS 6 136.753.233 111.958.593
STATEMENT OF CASHFLOWS (TL)
The accompanying notes are integral parts of the financial statements.
2015 Annual Report
51
STA
TE
ME
NT
S O
F C
HA
NG
ES
IN S
HA
RE
HO
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RS
’ EQ
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TL)
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The
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otes
are
inte
gral
par
ts o
f the
con
solid
ated
fina
ncia
l sta
tem
ents
.
2015 Annual Report
52
1 ORGANIZATION AND BUSINESS SEGMENT
İndeksBilgisayarSistemleriMühendislikSanayiveTicaretAnonimŞirketiwasestablishedin1989and theactivitiesof theGrouparecomprisedof tradeofall kindsof “InformationTechnology”productsforthepurposeofwholesaletrading.TheCompanyisregisteredtotheCapitalMarketsBoardofTurkeysinceJune2004and15,34%oftheCompany’ssharesaretradedonIstanbulStockExchange.
DetailsregardingtoGroup’ssubsidiaries,whicharesubjecttoconsolidation,areasfollows:
DetailsregardingtoCompany’sjointventures,whicharesubjecttoconsolidation,areasfollows:
ThefinancialstatementsofDatagateBilgisayarMalzemeleriA.Ş.,NeotechTeknolojikÜrünlerDağ.A.Ş., Teklos Teknoloji Lojistik Hizmetleri A.Ş., Artım BilişimÇözüm veDağıtım A.Ş. and İndeksInternationalFZEareconsolidatedaccordingto“thefullconsolidationmethod”.Thefinancialsta-tementsofNeteks İletişimÜrünleriDağıtımA.Ş. isconsolidatedaccordingto“theproportionateconsolidationmethod”.
Company NameField Of
OperationsCapital
% of Direct Ownership
% of Indirect
Ownership
Datagate Bilgisayar Malzemeleri A.Ş. (Datagate )
Purchasing and Selling of Computer and Equipment
10.000.000 59,24 59,24
Neotech Teknolojik Ürünler Dağ. A.Ş. (Neotech)
Purchasing and Selling of Home Electronic Products
1.000.000 80,00 80,00
Teklos Teknoloji Lojistik Hizmetleri A.Ş. (Teklos)
Logistics 5.000.000 99,99 99,99
Artım Bilişim Çözüm ve Dağıtım A.Ş. (Artım) Purchasing and Selling of Spare Parts of IT Products
1.210.000 51,00 51,00
İndeks International FZE (*) (Indeks FZE)Purchasing and Selling of Computer and Equipment
150.000 BAEDirhemi
100 100
Datagate International FZE (***) (Datagate FZE)
Purchasing and Selling of Computer and Equipment
150.000 BAEDirhemi
- 59,24
Company NameField Of
OperationsCapital
% of Direct Ownership
% of Indirect
Ownership
Neteks İletişim Ürünleri Dağıtım A.Ş. (Neteks)
Purchasing and Selling Network
Products1.100.000 50,00 50,00
2015 Annual Report
53
ThemainshareholdersoftheCompanyareNevresErolBilecik(%36,26).Theaveragenumberofemployeesfortheyear2015is325.(2014:330).Allofthepersonnelcarryoutadministrativeduties.
TheCompany’s official address registered in TradeRegistry isMerkezMahallesi ErsevenSo-kakNo:8/1Kağıthane, İstanbul.TheCompany’sheadoffice is in Istanbuland ithasbranchesinAnkara, İzmir,Diyarbakır.TheGroup’s logisticaloperationsareconductedbyTeklosTeknolojiLojistikHizmetleriA.Ş. intheadressofCumhuriyetMahallesiYahyakaptanCaddesiNo:10AD:2Çayırova/KOCAELİ.
2 BASIS OF PRESENTATION
2.01 Basis of Presentation
TheGroupmaintainsitsbooksofaccountsandstatutoryfinancialstatementsinaccordancewithTurkishCommercialCodeandaccountingprinciplesdeterminedintaxlegislations.SerialII-14.1“CommuniquéOnThePrinciplesOfFinancialReportingInCapitalMarkets”,whichwaspublishedinOfficialGazettedated13June2013andnumbered28676,supersededtheCapitalMarketsBoard(“CMB”)“CommuniquéOnThePrinciplesOfFinancialReportingInCapitalMarkets”
TheGroup’s financial positionandoperation results areexpressed inTurkishLira. The interimfinancialstatementsarepreparedinaccordancewithTurkishAccountingStandards/TurkishFi-nancialReportingStandards(“TAS/TFRS”)issuedbyPublicOversightAccountingAndAuditingStandardsAuthority(“POA”)
TheGroup’sconsolidilatedfinancialstatementsbetweenthedatesof1January-31December2015areapprovedby theboardof thedirectorson thedateof 9March2015.TheGeneralassemblyandtherelevantlegalentitieshavetheauthoritytochangetheseconsolitatedfinancialstatements
TheGroup’sfinancialstatementsarepresentedwithenvironmentinwhichtheGroupitsfunctionalcurrencythatisthecurrencyoftheprimaryeconomicoperates.AccordinglytheGroup’sfinancialpositionandoperationresultsareexpressedinTurkishLira.
Asthedateof31December2015,thecurrencyofnon-monetaryitemsinpreparedfinancialsta-tementsareacceptedasUSDuntil30June2013.ThetransactionsafterthisdateaccountedasTLduetochangeinfunctionalcurrencyUSDtoTL.
2.02 Dealing with the Inflation Effects in Hyper-Inflationary Periods
Accordingtothedecision,datedMarch17,2005withNo:11/367,madebytheCapitalMarketBoard,theinflationaccountinghasbeennolongereffectiveasof2005andtheaccompanyingconsolidatedfinancialstatementshasnotbeenadjustedsinceJanuary1,2005.Nonmonetaryvalues,whichareintheaccompanyingconsolidatedfinancialstatements,existwithvaluedasofDecember31,2004inaccordancewithInternationalAccountingStandardsNo.29“FinancialReportingonHyper-InflationistEconomies”.
2015 Annual Report
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2.03 Consolidation Principles
Subsidiariesarethecompanies,whosesharesareheldbytheGroupdirectlyorindirectlythroughsharesofothercompanies.Asaresult,theGroupwithorwithoutover50%ofvotingright,hasthepowerandauthoritytodirectandcontrolthemanagementandpoliciesofthesubsidiarycom-panieswhetherthroughtheownershipofvotingsecurities,bycontractorotherwise.
BalanceSheet and Income statements of the subsidiaries are consolidated according to “fullconsolidationmethod”andbook valueandcapital of theGroup’ssubsidiaryareadjustedac-cordingly.TransactionsandbalancesbetweentheGroupandSubsidiariesareeliminatedduringconsolidation.
Minorityinterestsshowminorityshareholders’shareinthesubsidiaries’assetsandresultofopera-tionsfortherelatedperiod.ThesedetailsaretobeexpressedseparatelyinconsolidatedBalanceSheetandIncomeStatement.
Iflossesrelatedtominorityinterestareoverbenefitsfromsharesofasubsidiaryandifthereisnoboundingliabilitytotheminorities,ingeneral,theselossesrelatedwiththeminoritiesresultagainsttobenefitsoftheminorities.
CompaniesundercommoncontroloftheGrouparedescribedasJointManagingCompanies.TheGrouphassignificantimpactonfinancialandoperatingpoliciesofthesecompanies.
Thecurrentsharesinthesubsidiariesareasfollows:
DetailsregardingtoGroup’sjointventures,whicharesubjecttoconsolidationbyequitymethod,areasfollows:
Company Name Field Of Operations Capital% of Direct Ownership
% of Indirect
Ownership
Datagate Bilgisayar Malzemeleri A.Ş.Purchasing and Selling of Computer and Equipment
10.000.000 59,24 59,24
Neotech Teknolojik Ürünler Dağ. A.Ş. Purchasing and Selling of Home Electronic Products
1.000.000 80,00 80,00
Teklos Teknoloji Lojistik Hizmetleri A.Ş. Logistics 5.000.000 99,99 99,99
İnfin Bilgisayar Ticaret A.Ş.Purchasing and Selling of Computer and Equipment
50.000 99,80 99,80
Artım Bilişim Çözüm ve Dağıtım A.Ş.Purchasing and Selling of Spare Parts of IT
Products 1.210.000 51,00 51,00
İndeks International FZE (Indeks FZE)Purchasing and Selling of Computer and Equipment
150.000 BAEDirhemi
100 100
Datagate International FZE (Datagate FZE)Purchasing and Selling
of Computer and Equipment
150.000 BAEDirhemi
- 59,24
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Acquisitionsofbusinessesareaccountedforusingtheequitymethod.Theconsiderationtrans-ferredinabusinesscombinationismeasuredatfairvalue,whichiscalculatedasthesumoftheacquisition-datefairvaluesoftheassetstransferredbytheGroup,liabilitiesincurredbytheGrouptotheformerownersoftheacquireeandtheequityinterestsissuedbytheGroupinexchangeforcontroloftheacquiree.Acquisition-relatedcostsaregenerallyrecognizedinprofitorlossasincurred.
IftheGroup’slosswhichiscomingfromsubsidiaries’lossisgreaterthanorequaltothegroup’stotalshareonsubsidiaries,bookvalueonsubsidiariesarezeroized(therebyincludeslongterminvestments)andifthereisnotanycommitmentoranypaymentinsteadofthesubsidiary,insuchcases,extralossesarenotaccountedanymore.
Goodwill is theexcessofpurchasepriceoverthefairmarketvalueofacompany’s identifiableassetsandliabilities.Goodwillisincludedininvestment’sbookvalueandbeexaminedintermsofimpairmentasapartoftheinvestment.Ifdefinableassets,liabilitiesandcontingentliabilities’fairvalueisoverthepurchaseorsaleprice,theexcessisaccountedasprofitorlossfortheperioddirectly.
ThefinancialstatementsofDatagateBilgisayarMalzemeleriA.Ş.,NeotechTeknolojikÜrünlerDağ.A.Ş.,TeklosTeknolojiLojistikHizmetleriA.Ş.,ArtımBilişimÇözümveDağıtımA.Ş.andİndeksIn-ternationalFZEareconsolidatedforusingdirectconsolidationmethod,thefinancialstatementsofNeteksİletişimÜrünleriDağıtımA.Ş.isconsolidatedbyusingpartialconsolidationmethod.
Affiliatecompanies’balancesheetsandincomestatmentareconsolidatedbyusingfullconsolida-temethodandthebookvalueandtheshareholdersequityoftheaffiliatecompaniesownedbytheGroupismutuallyclarified.LikewiseinsidegrouptransactionsandtheirbalancesoftheGroupandsubsidiariesduringtheconsolidationwereeliminatedmutually.
Minorityinterestsshowminorityshareholders’equityinthesubsidiaries’assetsandresultofope-rations for the relatedperiod. Thesedetails are expressedseparately in consolidatedbalancesheetandProfit/LossStatement.Iflossesrelatedtominorityinterestareoverbenefitsfromsharesofasubsidiaryandifthereisnoboundingliabilitytotheminorities,ingeneral,theselossesrelatedwiththeminoritiescanresultagainsttobenefitsofthemainshareholders.
Financial Information of Companies which are not Consolidated
Parentandsubsidiarycompanieswhicharenotsubjectedtoconsolidationandthesubsidiaryrelatedwithmanagement,auditing,andcapitalareasfollows:
Company Name Field Of Operations Capital% of Direct Ownership
% of Indirect
Ownership
Neteks İletişim ürünleri Dağıtım A.Ş.Purchasing and Selling
Network Products1.100.000 50,00 50,00
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İnfinBilgisayarTicaretA.Ş.andNeteksDışTicaretLimitedŞirketiwerenotconsolidated to thefact that theyareboth insignificantanddonothavematerialeffecton theGroup’sconsolida-tedfinancialstatements.Thesesubsidiariesareclassifiedasfinancialassetsavailableforsaleinconsolidatedfinancialstatements.ThesummaryfinancialinformationofmentionedcompaniesisdisclosesinNote:7.
Comparisonbetweenfinancialoutcomesofcompanieswhicharenotsubjectedtoconsolida-tionandfinancialoutcomesofconsolidatedfinancialstatementsasofDecember31,2015isasfollows;
Significant part of items,which are located in total asset and sales, are eliminatedduring theconsolidationeven though thesecompaniesaresubjected toconsolidation.Consideredothermatterswhenmentionedcompaniesareexcludedfromtheconsolidation,areasfollows;
Thesecompanieshavenotgotsignificantassetsandliabilitieswhichareoutofbalancesheet.Moreoverthesecompanieshavenotgotsignificantassetssuchasfixedassetsetc.
Onthelightsofabovegivendataallthesecompanieswerenotsubjectedtoconsolidationduetoallquantitativeandqualitativeevaluationsandonthe lightsofabovegivendata indicatethatthesecompaniesdonoteffecttofinancialoutcomessignificantly.
2.04 Comparative Information and Adjustment of the Previous Period Financial Sta-tements
Thecomparativefinancialstatementshavebeenpresentedtoenabletoperformthefinancialposi-tionandtheperformancetrendanalysis.Allnecessaryadjustmentsaremadeinpreviousfinancialstatementstopresentconsistentandcomparativefinancialstatements,ifrequired.
2.05 Offsetting
The financialassetsand liabilities in the financialstatementsareoffsetandthenetamount re-ported in thebalancesheet,where there isa legallyenforceableright tooffset therecognizedamounts,andthereisanintentiontosettleonanetbasisorrealizetheassetandsettletheliabilitysimultaneously.
Financial Outcomes of 2015 Total AssetTotal
EquityNet Sales
Period Income
Companies which are not subjected to consolidation
2.161.269 415.211 11.727.331 747.818
Consolidated Financial Statements 1.386.714.992 207.839.425 3.384.690.880 44.920.203% 0,16% 0,20% 0,35% 1,66%
SubsidiaryParticipation
Rate %OpeningAmout
Translation Differences
31 December
2015İnfin Bilgisayar Ticaret A.Ş. 99,8 63.605 - 63.605Total 63.605 - 63.605
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2.06 Changes in Accounting Policies
Thechangestothecurrentaccountingpoliciescanbeperformedifitisnecessaryorthechangeswillprovidemoreappropriateandreliablepresentationofthetransactionsandeventsrelatedtothefinancialposition,performanceandthecashflowoftheGroupthataffectthefinancialstatementsoftheGroup.Ifthechangesinaccountingpoliciesaffectsthepriorperiods,policyisappliedtothepriorperiodfinancialstatementsasifitisappliedbefore.
2.07 Changes in Accounting Estimates and Errors
Accounting estimates aremade based on reliable information and using appropriate estimati-onmethods.However,ifneworadditionalinformationbecomesavailableorthecircumstances,whichtheinitialestimatesbasedon,change,thentheestimatesarereviewedandrevised,ifne-cessary.Ifthechangeintheaccountingestimatesisonlyrelatedtoasoleperiod,thenonlythatperiod’sfinancialstatementsareadjusted.Ontheotherhand,iftheamendmentsarerelatedtothecurrentaswellastheforthcomingperiods,thenbothcurrentandforthcomingperiods’financialstatementsareadjusted.
Ininstanceswheretheaccountingestimatesaffectbothcurrentandforthcomingperiods,thendescriptionandmonetaryvalueof theestimate isdisclosed in thenotes to the financialstate-ments.However; if theeffect of the accountingestimate to the financial statement cannotbedetermined,thenitisnotdisclosedinthenotestothefinancialstatements.TheGroupisapplyingtheaccountingestimatestodeterminethedoubtfulreceivables,thevaluedecreaseinfixedassetsandinventory,theusefullivesofthefixedassets,contingentliabilities,actuarialassumptionsfortheterminationindemnities,etc.Theexplanationregardingthechangesinaccountingestimatesappliedinthecurrentaredisclosedintherelatedpartsofthenotestothefinancialstatements.
IAS21TheEffectsofChangesinForeignExchangeRatesStandarddefinesthatfunctionalcur-rency is thecurrencyof theprimary economicenvironment inwhich theentity operates. Theprimaryeconomicenvironmentinwhichanentityoperatesisnormallytheoneinwhichitprimarilygeneratesandexpendscash.Anentityconsidersthefollowingfactorsindeterminingitsfunctionalcurrency:thecurrencythatmainlyinfluencessalespricesforgoodsandservices(thiswilloftenbethecurrencyinwhichsalespricesforitsgoodsandservicesaredenominatedandsettled);andofthecountrywhosecompetitiveforcesandregulationsmainlydeterminethesalespricesofitsgoodsandservicesandthecurrencythatmainlyinfluenceslabor,materialandothercostsofprovidinggoodsorservices(thiswilloftenbethecurrencyinwhichsuchcostsaredenominatedandsettled).TheGroupmanagementreviewsaccountingestimationsaboutfunctionalcurrencyandaccountingpoliciesineveryperiod.Accordingtotheevaluationmadeinthiscontextthecur-rentperiodrealizationsandfuturerealizationstheGrouphaschangeditsfunctionalcurrencytotheTLasofJuly1,2013.
2.08 Summary of Significant Accounting Policies
2.08.01 Income
TheGrouprecognizesincomeaccordingtotheaccrualbasis,whentheGroupreasonablydeter-minestheincomeandeconomicbenefitisprobable.Group’sincomemainlyconsistsofsalesofcomputerandcomputerequipmentsasPC,laptop,electronichomeproducts,networking
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products,etc.Allthesalesareoperatedviadealersandtherearenotanydirectsalestoendcus-tomers.Netsalesarecalculatedbydeductingsalesreturnandsalesdiscountsfromtotalsales.
Revenuefromthesaleofgoodsisrecognizedwhenallthefollowingconditionsaregratified:
• Thesignificantrisksandtheownershipofthegoodsaretransferredtothebuyer;
• TheGrouprefrainsthemanagerialcontroloverthegoodsandtheeffectivecontroloverthegoodssold;
• Therevenuecanbemeasuredreasonably;
• Itisprobablethatthetheeconomicbenefitsrelatedtotransactionwillflowtotheentitiy;
• Thecostsincurredorwillbeincurredinconjuctionwiththetransactioncanbemeasuredreliably.
ThemostoftheproductssoldbytheGrouphasforeignorigin.Thepurchasesaremadefromforeign companies, offices of foreign companies in Turkey or domestic companies in Turkey.Dependingupontherealizationofthetargetsgivenbythedomesticorforeigncompanies;asetofpaymentsarereceivedoroffsettingtheaccountsunderthenameof“rebate”,“risturn”,“sellout”,or“bonus”.Thementionedamountsarerecognisedascreditnoteincomeaccrualsinthebalancesheetdependingupontherealizationofthetargetsandconditionsgivenbythesellers.Thedocumentspreparedbysellersunderthenameof“rebate”,“risturn”,“sellout”,“bonus”,and“creditnote”(orInvoicespreparedbytheGroup)iscollectedoroffsetted.Creditnotesobtainedfrominventoriesarediscountedfromcostofinventories.Theremainingbalanceisrecognisedas“OtherSales”inthesalesoftheGroup.
Interestrevenueisaccuredonatimebasis,byreferencetotheprincipaloutstandingandattheeffectiveinterestrateapplicaple,whichistheratethatdiscountstheestimatedfuturecashreceiptsthroughtheexpectedlifeofthefinancialassettothatasset’snetcarryingamount.
Whenthereissignificantamountofcostoffinancingincludedinthesales,thefairvalueisdetermi-nedbydiscoutingallprobablefuturecashflowswiththeyieldrate,whichisembeddedinthecostoffinancing.Thedifferencesbetweenthefairvalueandthenominalvalueisrecordedasinterestincomeaccordingtotheaccrualbasis.
2.08.02 Inventories
Inventoriesarestatedeitheratthelowerofacquisitioncostornetrealizablevalue.Group’sinven-toriesconsistofcomputerandcomputerequipmentslikePC,laptop,electronicalhomeproducts,networkproducts,etc.
TheinventorycostingmethodusedbytheGroupis“FirstinFirstout(FIFO)”.Netrealizablevalueistheestimatedsellingpriceintheordinarycourseofbusinesslesstheestimatedcostsofcomple-tionandtheestimatedcostsnecessarytomakethesale.
2.08.03 Tangible Fixed Assets
ForAssetsacquiredinandafter2005,thetangibleassetsarereflectedtotheconsolidatedfinan-cialstatementsbydeductingtheiraccumulateddepreciationfromtheircost.Forassetsthatwere
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acquiredbeforeJanuary01,2005,thetangiblefixedassetsarepresentedontheconsolidatedfinancialstatementsbasedontheircostvalue,whichisadjustedaccordingtotheinflationaryeffe-ctsasofDecember31,2004.Depreciationiscalculatedusingthestraight-linemethodbasedontheireconomiclives.Thefollowingrates,determinedinaccordancewiththeeconomiclivesofthefixedassets,areusedincalculationofdepreciation.
Landsarenotsubjecttodepreciationsincetheyhaveunlimitedusefullives.
Tangiblefixedassetsarereviewedintermsof impairmentforeachbalancesheetperiod. Ifthecarryingvalueofa tangible fixedasset ismorethan itsexpectednet realizablevalue, thenthecarryingvalueisreducedtoitsnetrealizablevaluebymakingthenecessaryprovisions.Thereisnoprovisionfordecreaseinvalueoftangiblefixedassets.
Theprofitandlossarisenfromfixedassetsalesaredeterminedbycomparingthenetbookvaluewiththesalespriceandtheresultisaddedtotheoperatingprofitorloss.
Maintenanceandrepairexpensesareaccountedasexpenseattheirrealizationdate.Ifthema-intenanceandrepairexpensesclearlyimprovetheeconomicvalueorperformanceoftherelatedassetthentheyarecapitalized.
2.08.04 Intangible Assets
IntangibleAssetscontainsacquiredassetsbysalessuchascomputersoftwareprogramsandcomputersoftwarelicences.Thereisnointangibleassetscreatedwithinthestructureofbusi-ness.
IntangibleassetsacquiredbeforeJanuary1,2005arecarriedathistoricalcostincludinginflatio-naryeffectsasatDecember31,2004,however,purchasesafterJanuary1,2005arecarriedattheirhistoricalcostlessaccumulatedamortizationandimpairment.
Intangibleassetsaredepreciatedonastraight-linebasisovertheirexpectedusefullivesinfiveandtenyear’speriod.
Theestimateduseful lifeandamortizationmethodare reviewedat theendofeachannual re-portingperiod,withtheeffectofanychangesinestimatebeingaccountedforonaprospectivebasis.Ifthenetvalueofanintangibleassetismorethantherecoverablevalue,thenetvalueoftheintangibleassetisdecreasedtorecoverablevaluebymakingprovisions.Thereisnoprovisionforthevaluedecreaseinintangibleassets.
Type December 31, 2015 Rate (%) December 31, 2014 Rate (%)Land Improvements 10 10Buildings 2 2Machinery, Plant and Equipment 10-25 10-25Motor Vehicles 10-25 10-25Furniture and Fixtures 10-33 10-33Leasehold Improvements 10-33 10-33
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2.08.05 Impairment of Assets
Assetssuchasgoodwillwhichhasinfinitelifearenotsubjectedtoamortization.Impairmenttestisappliedfortheseassetsforeachyear.Assetsthataresubjecttoamortizationarereviewedforimpairmentwhenevereventsorchangesincircumstancesindicatethatthecarryingamountmaynotberecoverable.Animpairmentlossisrecognizedfortheamountbywhichtheasset’scarryingamountexceedsitsrecoverableamount.Therecoverableamountisthehigherofanasset’sfairvaluelesscoststosellandvalueinuse.Forthepurposesofassessingimpairment,assetsaregroupedatthelowestlevelsforwhichthereareseparatelyidentifiablecashflows.Non-financialassetsexceptgoodwillthatsufferedimpairmentarereviewedforpossiblereversalofimpairmentateachreportingdate.
AccordingtotheGroupManagement’sassessment;Thereisnosuchasituationthatmaycauseimpairmentfortangible,intangibleassetsandinvestmentproperties.Theseassets’netbookva-luehasbeenpredictedthatthementionedassets’marketvaluesareovertheirnetbookvalues.Theremainingassetsexceptfrommentionedassetsconsistofvehiclesandfurniture&fixturesforadministrativepurposes.Theseassets’ insurancevaluesandreplacementvaluesareovertheirbookvalues.
2.08.06 Research and Development Expenses
None.
2.08.07 Borrowings Costs
Theborrowingcostsarerecognizedasexpensewhentheyare incurred.Borrowingcoststhataredirectlyattributabletotheacquisition,constructionorproductionofaqualifyingassetshallbecapitalizedaspartofthecostofthatasset.Thecapitalizationofborrowingcostsaspartofthecostofaqualifyingassetshallcommence,whenexpendituresandborrowingcostsfortheassetareincurred,continuesuntilthatassetbecomesavailableforsale.Expendituresonaqualifyingassetincludeonlythoseexpendituresthathaveresultedinpaymentsofcash,transfersofotherassetsortheassumptionofinterest-bearingliabilities.Therearenocapitalizedborrowingcostsincurrentperiodrelatedtoqualifyingassets.
2.08.08 Financial Instruments
(i) Financial Assets
Investmentsarerecognizedandderecognizedontransactiondatewherethepurchaseandsalesofaninvestmentisunderacontract,termsofwhichrequiredeliveryoftheinvestmentwithinthetimeframeestablishedbythemarketconcernedandareinitiallymeasuredatfairvalue,netoftran-sactioncostsexceptforthosefinancialassetsclassifiedasfairvaluethroughprofitorlosswhichareinitiallymeasuredatfairvalue.
Financialassetsareclassifiedas“financialassets,whosefairvaluedifferencesarereflectedtotheprofitorloss”,“financialassetsheldtothematurity”,“financialassetsavailablefor-sale”and“loansandreceivables.”
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Prevailing Interest Method;
Prevailinginterestmethodistheassessmentoffinancialassetwiththeiramortizedcostandal-locationof interest incometotherelevantperiod.Prevailinginterestrateisaratethatdiscountstheestimatedcashflowofthefinancialinstrumentsfortheexpectedlifeorwhereappropriatesashorterperiod.
Incomerelatedtofinancialassets,exceptthe“financialassets,whosefairvaluedifferencesarereflectedtotheprofitorloss”,iscalculatedbyusingtheprevailinginterestrate.
a) Financial Assets Whose Fair Value Differences Are Reflected to the Profit or Loss
“Financialassetswhosefairvaluedifferencesarereflectedtotheprofitorloss”,arethefinancialassetsthatareheldfortradingpurposes.Ifafinancialassetisacquiredfortradingpurposes,itisclassifiedinthiscategory.Also,derivativeinstruments,whicharenotexemptfromfinancialrisk,arealsoclassifiedas“Financialassetswhosefairvaluedifferencesarereflectedtotheprofitorloss”.Thesefinancialassetsareclassifiedascurrentassets.
b) Financial Assets Which Will Be Held to the Maturity
Debtinstruments,whichtheGrouphastheintentionandcapabilitytoholdtomaturity,and/orhavefixedordeterminablepaymentarrangement,areclassifiedas“InvestmentsHeldtotheMaturity”.Financialassetthatwillbeheldtothematurity,arerecordedafterdeductingtheimpairmentfromthecostbasis,whichhasbeenamortizedwithprevailinginterestmethod.Allrelevantincomeiscalculatedusingtheprevailinginterestmethod.
c) Financial Assets Available-For-Sale
Financialassets,whichare“Available-for-Sale”,areeitherfinancialassets,whichwillnotbeheldtomaturityorfinancialassets,whicharenotheldfortradingpurposes.FinancialassetsAvailab-le-for-Salearerecordedwiththeirfairvalueiftheirfairvaluecanbedeterminedreliably.Marketablesecuritiesareshownattheircostbasisunlesstheirfairvaluecanbereliablymeasuredorhaveanactivetradingmarket.Profitor losspertainingtothefinancialassetsAvailable-for-Sale isnotrecordedontheincomestatement.Thefluctuationinthefairvalueoftheseassetsisshowninthestatementofshareholders’equity.Wheretheinvestmentisdisposedofor isdeterminedtobeimpaired,thecumulativegainorlosspreviouslyrecognizedisincludedinprofitorlossfortheperiod.ProvisionsrecordedintheincomestatementpertainingtotheimpairmentoffinancialassetAvailable-for-Salecannotbereversedfromtheincomestatementinfutureperiods.
Except equity instruments classified as available-for-sale, if impairment lossdecreases in nextperiodandifthereindecreasingcanberelatedtoaneventoccurredaftertheaccountingofimpa-irmentloss,impairmentlossaccountedbeforecanbecancelledinincomestatement.
d) Loans and Receivables
Tradereceivables,otherreceivables,andloansareinitiallyrecognizedattheirfairvalue.Subsequ-ently,receivablesandloansaremeasuredatamortizedcostusingtheeffectiveinterestmethod.Inthecaseofinterestonloansandreceivablesnegligible,registeredvalueofloanandreceivablesisacceptedasfairvalue.
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Impairment of financial assets
Financialassets,otherthanthoseatfairvaluethroughprofitorloss,areassessedforindicationofimpairmentateachbalancesheetdate.Financialassetsareimpaired,wherethereisobjectiveevidencethat,asaresultofoneormoreeventsthatoccurredaftertheinitialrecognitionofthefinancialasset,theestimatedfuturecashflowsoftheinvestmenthavebeenimpacted.Forfinan-cialassetscarriedatamortizedcost,theamountoftheimpairmentisthedifferencebetweentheasset’scarryingamountandthepresentvalueofestimatedfuturecashflows,discountedattheoriginaleffectiveinterestrate.
Thecarryingamountofthefinancialassetisreducedwiththeimpairmentlossdirectlyforallfinan-cialassetswiththeexceptionoftradereceivables,wherethecarryingamountisreducedthroughtheuseofanallowanceaccount.Whenatradereceivableisuncollectible,itiswrittenoffagainsttheallowanceaccount.Subsequent recoveriesof amountspreviouslywrittenoff are reversedagainst theallowanceaccount.Changes in thecarryingamountof theallowanceaccountarerecognizedinprofitorloss.
Withtheexceptionofavailableforsaleequityinstruments,if,inasubsequentperiod,theamountoftheimpairmentlossdecreasesandthedecreasecanberelatedobjectivelytoaneventoccur-ringaftertheimpairmentwasrecognized,thepreviouslyrecognizedimpairmentlossisreversedthroughprofitorlosstotheextentthatthecarryingamountoftheinvestmentatthedatetheimpa-irmentisreverseddoesnotexceedwhattheamortizedcostwouldhavebeenhadtheimpairmentnotbeenrecognized.
With respect toavailable-for-saleequitysecurities,any increase in fair valuesubsequent toanimpairmentlossisrecognizeddirectlyinequity.
Cash and Cash Equivalents
Cashandcashequivalentsarecash,demanddepositandothershort-termhighlyliquidinvest-ments,whichtheirmaturitiesarethreemonthsor lessfromthedateasofacquisition, thatarereadilyconvertibletoaknownamountofcashandaresubjecttoaninsignificantriskofchangesinvalue.
(ii) Financial Liabilities
Financialliabilitiesandequityinstrumentsareclassifiedaccordingtothecontractualagreementsenteredintoandthedefinitionoffinancial liabilityandequityinstrument.AnequityinstrumentisanycontractthatevidencesaresidualinterestintheassetsoftheGroupafterdeductingalltheliabilities.Accountingpoliciesdeterminedforthefinancial liabilitiesandthefinancial instrumentsbasedonequityareexplainedbelow.
Financialliabilitiesareclassifiedaseither“financialliabilitieswhosefairvaluedifferencesarerefle-ctedtotheprofit/loss”orotherfinancialliabilities.
a) Financial Liabilities Whose Fair Value Differences Are Reflected to the Profit /Loss
“Financialliabilitieswhosefairvaluedifferencesarereflectedtotheprofit/loss”arerecordedwiththeirfairvalueandarere-evaluatedattheendofeachbalancesheetdate.Changesinfairvalues
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arerecordedontheincomestatement.Netearningsand/orlossesrecordedontheincomesta-tementalsoincludeinterestpaymentsmadeforthisfinancialliability.
b) Other Financial Liabilities
Otherfinancialliabilitiesareinitiallyrecognisedwiththeirfairvaluesfreefromtransactioncosts.
Otherfinancialliabilitiesarerecognisedovertheiramortizedcostsusingtheeffectiveinterestmet-hod andwith interest costs calculated over effective interest rate in subsequent periods. Theeffectiveinterestmethodisthecalculationoftheamortizedcostsofthefinancialliabilitiesandthedistributionoftherelatedinterestexpensestorelatedperiods.
(iii) Derivative Financial Instruments
TheGrouphasagreementinforeigncurrencyfuturesmarkets.Derivativefinancialinstrumentsarerecognisedwithitsmarketvalueonthedateofderivativecontractssignedandre-assessedwithitsmarketvalue.
Thedifferencesbetweentheacquisitioncostsandfairvaluesofforwardagreementsarerecordedinequityand/orincomestatementinaccordancewiththepracticesofIAS39hedgeaccountingasofperiodends.
Thegainorlossrealizedfromtheincreaseordecreaseinthefairvalueofthederivativeinstru-mentswhichdonotmeettheconditionsforhedgeaccountingisrecognisedinprofitorloss.
The fair value isdeterminedby theappropriateoneofpossiblevalidmarketvalues,otherwisediscountedcashflowsandoptionpricingmodels.Thederivativeswithpositivefairvalueisrecog-nisedasanassetandwithnegativefairvalueisrecognisedasaliabilityunderthebalancesheet.(Note: 12)
2.08.09 Effects of Currency Fluctuations
Alltransactions,denominatedinforeigncurrencies,areconvertedintoTLbytheexchangerateru-lingatthetransactiondate.AllforeigncurrencydenominatedmonetaryassetsandliabilitiesstatedatthebalancesheetareconvertedintoTLbytheexchangeraterulingatthebalancesheetdate.Foreignexchangegainsand/orlossesasaresultoftheconversionsarerecordedintheincomestatement.Groupusessameforeigncurrencyintheirsalesandpurchasetransaction.ThereforeGroupdoesnotcontainimportantcurrencyrisk.
2.08.10 Earnings per Share
Earningspershareintheincomestatementarecalculatedbydividingnetincomebytheweightedaveragenumberofcommonsharesoutstandingfortheperiod.InTurkey,companiesareallowedtoincreasetheirsharecapitalbydistributing“bonusshares”fromretainedearnings.Thesebonussharesaredeemedasissuedshareswhilecalculatingthenetearningspershare.Accordingly,theretrospectiveeffectforthosesharedistributionsistakenintoconsiderationindeterminingtheweighted-averagenumberofsharesoutstandingusedinthiscomputation.
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2.08.11 Subsequent Events
Subsequenteventscoveralleventsthatoccurbetweenthebalancesheetdateandthepublica-tiondateofthefinancialstatements.Ifthereissubstantialevidencethatthesubsequenteventsexistedorariseafter thebalancesheetdate, theseeventsaredisclosedandexplained in thenotestothefinancialstatements.
2.08.12 Provisions, Contingent Liabilities and Assets
Aprovisionisrecognizedwhenanentityhasapresentobligation(legalorconstructive)asaresultofapastevent;itisprobablethatanoutflowofresourcesembodyingeconomicbenefitswillberequiredtosettletheobligation;andreliableestimatecanbemadeoftheamountoftheobligationWheretheeffectofthetimevalueofmoneyismaterial,theamountofaprovisionisthepresentvalueoftheexpendituresexpectedtoberequiredtosettletheobligation.Thediscountrate(orrates) isapre-tax rate (or rates) that reflect(s)currentmarketassessmentsof the timevalueofmoneyandtherisksspecifictotheliability.Theincreaseinprovisionsarisenfromtimedifferencesisrecordedasinterestexpenseincaseofdiscounting.Futureeventsthatmayaffecttheamountrequiredtosettleanobligationshallbereflectedintheamountofaprovisionwherethereissuf-ficientobjectiveevidencethattheywilloccur.Theamountrecognizedasaprovisionisthebestestimateoftheconsiderationrequiredtosettlethepresentobligationatthebalancesheetdate,takingintoaccounttherisksanduncertaintiessurroundingtheobligation.
Contingentliabilitiesandassetsarenotreflectedtoconsolidatedfinancialstatementsbutdisc-losedinthenotestotheconsolidatedfinancialstatements.Theentityrecognizesaprovisionforthepartoftheobligation,forwhichanoutflowofresourcesembodyingeconomicbenefits isprobable,exceptintheextremelyrarecircumstanceswherenoreliableestimatecanbemade.
2.08.13 Leasing Operations
The Group as Lessee
Financial Leases
Financialleasesaredescribedwhichthelessorretainsalltherisksandbenefitspertainingtothegoods.Financialleasesaretakenintotheaccountsaccordingtolowercurrentmarketvalueorminimumleasepayments.
Theliabilityarisingfromafinancialleasingtransactionisseparatedintointerestpayableandprin-cipaldebt inorder todeterminea fixed interest rateon the remainingbalance.Thecostsandexpensesincurredattheinitialacquisitionofthefixedassetsubjecttofinancialleasingareaddedtothecost.Thefixedassetsobtainedthroughfinancialleasingaresubjecttodepreciationovertheirestimatedusefullives.
InformationofnetbookvalueofGroup’sassets,whicharesubjecttolease,statedonNote:18.InformationrelatedwithGroup’sfinancialleasingdebtstatedonNote: 8.
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Operating Leases
Leaseagreementsinwhichthelessorretainsalltherisksandbenefitsrelatingtothegoodaredescribedasoperationalleasing.Leasepaymentsmadeforanoperationalleasingarerecordedasexpenseaccordingtonormalmethodthroughouttheleaseterm.
The Group as Lessor
Operating Leases
TheGrouppresentsassetssubjecttooperatingleasesintheirbalancesheetaccordingtothenatureoftheasset.Leaseincomefromoperatingleasesisrecognizedasincomeaccordingtothenormalmethod.Theinitialdirectcostsincurredduringoperationalleasingarereflectedtoincomestatementasexpense.Group’sLeaseagreementsasalessor,arerelatedwithleasingtosmallpartofthemainbuildingwhereGroup’soperating,toothernon-consolidatedcompaniesandtoanothercompanywhichisnotincludetheGroup,asaofficeandstore.
2.08.14 Related Party Disclosures
Thepartners’oftheCompany,Company’sBoardofDirectors,Company’smanagementperson-nel,Company’sotherdirectors,closefamilymembersinthechargeoftheCompany,andothercompaniesdirectlyorindirectlycontrolledbytheCompanyareconsideredasrelatedparties.ThetransactionswithrelatedpartiesaredisclosedintheNote: 37.
2.08.15 Government Grants and Assistance
None.
2.08.16 Investment Property
InvestmentpropertiesarerecognisedaccordingtothefollowingprincipleasofDecember31,2015andDecember31,2014.
RealEstatesheldtoearnrentincomeareclassifiedasInvestmentPropertiesandtheyarerecog-nisedattheircostvaluelessaccumulateddepreciationandaccumulatedimpairments.Thecostarisingfromthechangeorimprovementofapartofrealestateisaddedtocostofthatrealestateifthegenerallyacceptedconditionsaremet.However,dailymaintenanceexpensesarenotaddedtomentionedcostoftherealestate.
Intangibleassetsaredepreciatedonastraight-linebasisovertheirexpectedusefullivesandthedepreciationrateis%2perannum.
Iftheinvestmentpropertyisoutofuseorsold,theyareremovedfromthebalancesheetandthegainorlossfromsaleofinvestmentpropertyisrecognisedundertheincomestatement.
2.08.17 Taxation and Deferred Tax
Incometaxexpenserepresentsthesumofthetaxcurrentlypayableanddeferredtax.
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Current tax
Thetaxcurrentlypayableisbasedontaxableprofitfortheyear.Taxableprofitdiffersfromprofitasreportedintheincomestatementbecauseitexcludesitemsofincomeorexpensethataretaxableordeductibleinotheryearsanditfurtherexcludesitemsthatarenevertaxableordeductible.TheGroup’sliabilityforcurrenttaxiscalculatedusingtaxratesthathavebeenenactedorsubstantivelyenactedbythebalancesheetdate.
Deferred tax
Deferredtaxisrecognizedondifferencesbetweenthecarryingamountsofassetsandliabilitiesinthefinancialstatementsandthecorrespondingtaxbaseswhichisusedinthecomputationoftaxableprofit,andisaccountedforusingthebalancesheetliabilitymethod.Deferredtaxliabilitiesaregenerallyrecognizedforalltaxabletemporarydifferencesanddeferredtaxassetsarerecogni-zedforalldeductibletemporarydifferencestotheextentthatitisprobablethattaxableprofitswillbeavailableagainstwhichthosedeductibletemporarydifferencescanbeutilized.Suchassetsandliabilitiesarenotrecognizedifthetemporarydifferencearisesfromgoodwillorfromtheinitialrecognition(otherthaninabusinesscombination)ofotherassetsandliabilitiesinatransactionthataffectsneitherthetaxableprofitnortheaccountingprofit.
Deferred tax liabilitiesare recognized for taxable temporarydifferencesassociatedwith invest-mentsinsubsidiariesandassociates,andinterestsinjointventures,exceptwheretheGroupisabletocontrolthereversalofthetemporarydifferenceanditisprobablethatthetemporarydiffe-rencewillnotreverseintheforeseeablefuture.Deferredtaxassetsarisingfromdeductibletempo-rarydifferencesassociatedwithsuchinvestmentsandinterestsareonlyrecognizedtotheextentthatitisprobablethattherewillbesufficienttaxableprofitsagainstwhichtoutilizethebenefitsofthetemporarydifferencesandtheyareexpectedtoreverseintheforeseeablefuture.
Thecarryingamountofdeferredtaxassetsisreviewedateachbalancesheetdateandreducedtotheextentthatitisnolongerprobablethatsufficienttaxableprofitswillbeavailabletoallowallorpartoftheassettoberecovered.
Deferredtaxassetsandliabilitiesaremeasuredatthetaxratesthatareexpectedtoapplyintheperiodinwhichtheliabilityissettledortheassetrealized,basedontaxrates(andtaxlaws)thathavebeenenactedorsubstantivelyenactedby thebalancesheetdate.ThemeasurementofdeferredtaxliabilitiesandassetsreflectsthetaxconsequencesthatwouldfollowfromthemannerinwhichtheGroupexpects,atthereportingdate,torecoverorsettlethecarryingamountofitsassetsandliabilities.
Deferred taxassetsand liabilitiesareoffsetwhen there isa legallyenforceable right tosetoffcurrenttaxassetsagainstcurrenttaxliabilitiesandwhentheyrelatetoincometaxesleviedbythesametaxationauthorityandtheGroupintendstosettleitscurrenttaxassetsandliabilitiesonanetbasis.
Current and deferred tax for the period
Currentanddeferredtaxarerecognizedasanexpenseorincometotheincomestatement,ex-ceptwhentheyrelatetoitemscreditedordebiteddirectlytoequity,inwhichcasethetaxisalso
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recognizeddirectlyintheequity,orwheretheyarisefromtheinitialaccountingforabusinesscom-bination.Inthecaseofabusinesscombination,thetaxeffectistakenintoaccountincalculatinggoodwillordeterminingtheexcessoftheacquirer’sinterestinthenetfairvalueoftheacquirer’sidentifiableassets,liabilitiesandcontingentliabilitiesovercost.
Taxesstatedinfinancialstatementsincludethecurrenttaxanddeferredtaxesfortheperiod.TheGroupcalculatescurrentperiodtaxanddeferredtaxovertheperiodresults.
Offsetting Tax Income and Liabilities
Corporatetaxpayablesareoffsetwithprepaidquarterlyadvancecorporatetaxpaymentsduetothefactthatthesepaymentsareinfactcorporatetaxpayments.Deferredtaxassetsandliabilitiesarealsooffset.
2.08.18 Retirement Pay
AccordingtoTurkishLaborLaw,employeeterminationbenefit isreflectedinthefinancialstate-ments,whentheterminationindemnitiesaredeserved.SuchpaymentsareconsideredasbeingpartofdefinedretirementbenefitplanasperIASNo.19“EmployeeBenefits”.
Terminationindemnityliabilityisreflectedtothefinancialstatementswiththeamountcalculatedforvalueatbalancesheetdateoflumppensioninthenextyearsbydiscountingbyadequateinterestrate.Interestcostaddedtothelumppensionexpenseisshownasinterestexpenseintheresultsofoperations.
2.08.19 Statement of Cash Flow
Cashandcashequivalentsarestatedattheirfairvaluesinthebalancesheet.Thecashandcashequivalentscomprisescashinhand,bankdepositsandhighlyliquidinvestments.
Oncashflowstatement, theGroupclassifiesperiod’scashflowsas investmentand financingactivities.CashinflowprovidedfromoperatingactivitiesdenotescashinflowprovidedfrommainactivitiesoftheGroup.
Cashflowconcernedwithinvestmentactivitiesshowscashusedandprovidedfrominvestmentactivities(assetinvestmentsandfinancialinvestments).
Cashflowconcernedwithfinancialactivitiesrepresentssourcesusedfromfinancialactivitiesandpay-backofthesefunds.
2.08.20 Income Accruals
ThemostoftheproductssoldbytheGrouphasforeignorigin.Thepurchasesaremadefromforeigncompanies,officesofforeigncompaniesinTurkeyordomesticcompaniesinTurkey.De-pendingupontherealizationofthetargetsgivenbythedomesticorforeigncompanies;asetofpaymentsarereceivedoroffsettingtheaccountsunderthenameof“rebate”,“risturn”,“sellout”,or“bonus”.Thementionedamountsarerecognisedascreditnoteincomeaccrualsinthebalancesheetdependingupontherealizationofthetargetsandconditionsgivenbythesellers.
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Thedocumentspreparedbysellersunderthenameof“rebate”,“risturn”,“sellout”,“bonus”,and“creditnote”(orInvoicespreparedbytheGroup)iscollectedoroffset.
2.08.21 Provisions for Warranty
TheGroupisadistributorofinformationtechnologyproductsinTurkey.Thewarrantiesofthepro-ductssoldareprovidedbythecompaniesassignedbytheproducers.TheproductssubmittedtoCompany forwarrantyarereceivedfromdealersandtheseproductsaresent toproducersorcompaniesassignedbytheproducersforrepairmentandmaintenance.Aftertherepairandmaintenance,ifthereisaneedtochangeorgiveanewproducttocustomerswithinthescopeofthewarranty,theamountoftheproductsareinvoicedtoproducercompanies.TheGrouphasnoliabilityofprovisionsforwarranty.
2.09 New and Revised Turkish Financial Reporting Standards
New effective standards, revisions and comments as of January 1, 2015 are below:
Theaccountingpoliciesadopted infinancial tablesoftheperiodendingasofDecember31,2015hasbeenappliedasofJanuary1,2015coherentlywiththenewandrevisedeffectivestandardsandthecommentsusedinpreviousyearsexcepttheonesbyIFRIC.Thesestandar-dsandcommentshadnoeffectonfinancialsituationandperformanceofGroup..
• IAS 19 Plans of Identified Benefits: Employee Benefits (Revision): The revisionexplains thatcompaniesmayrecognizethecontributionsinvestedbyextractingtheservicecostintheyeartheservicesaregiveninsteadofextendingsuchcontributionstoserviceperiodsifthecontribu-tionsinvestedareindependentfromthenumberofyearsinwhichtheservicesaregiven.Thisrevisiondidnothaveanyeffectsonthefinancialtables.Therevisionshallbeappliedretrospec-tively,asofJuly1,2014andtheannualaccountingperiodsstartingafterwards.
Annual Improvements – 2010-2012 Period
TheannualimprovementsidentifiedbelowareeffectivefortheaccountingperiodsstartingafterJuly1,2014.
• IFRS 2 “Share-based Payment” (Revision): Thedefinitionsabouttheprovisionsforprogresspaymenthavebeenchangedandperformanceprovisionsandserviceprovisionshavebeenidentifiedtosolvetheproblems.Therevisionshallbeappliedretrospectively.Therevisionhadnoeffectonthefinancialtables.
• IFRS 3 “Business Combinations” (Revision): ConditionalcostwhichisnotclassifiedasequitycapitalinabusinesscombinationisrecognizedasprofitorlossintheupcomingperiodsbyfairvaluemeasurementnomatterifitisincludedinIFRS9FinancialInstrumentsornot.Therevisionhadnoeffectonfinancialtables.
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• IFRS 8 “Operational Segment” (Revision): Operationalsegmentsincludeprovisionsrelatedtocombiningthestandardconsistentlywithmainprincipals,andconformitybetweenoperationalassetsandtotalassets.Therevisionhadnoeffectonfinancialtables.
• IAS 16 “Property, Plant, and Equipment” and IAS 38 “Intangible Assets” (Revision): Thewayinwhichthereassessmentisdonehasbeenclarified.Therevisionhadnoeffectonthefinancialtables.
• IAS 24 “Related-Party Disclosures” (Revision): Revisionhasclarifiedthattheexecutivecom-panythatprovidesservicesaskeymanagementpersonnelisapartythatissubjectedtocom-pany’srelatedpartyexplanations.Therevisionshallbeappliedretrospectively.
Annual Improvements – 2011- 2013 Period
• IFRS 3 “Business Combinations” (Revision): IthasbeenclarifiedthatjointagreementsarealsoincludedinIFRS3besidesbusinesscombinationsandthisexceptionisapplicablebyrecogni-zingthefinancialtablesofjointagreements.Therevisionhadnoeffectsonthefinancialtables.
• IFRS 13 “Decision Justifications for Fair Value Measurement”: Ithasbeenexplainedthatport-folioexceptioncanbeappliednotonlytofinancialassessmentandfinancialobligationsbutalsotootheragreementsincludedinIAS39.Therevisionhadnoeffectsonfinancialtables.
• IAS 40 “Investment Property” (Revision): ItclarifiesthemutualrelationshipbetweenIFRS3andIAS40inclassificationofpropertyasinvestmentpropertyandpropertyusedbyitsowner.Therevisionhadnoeffectsonfinancialtables.
Issued but non-effective standards and the standards which are not put into effect earlier :
Thestandardsandrevisionsthathavebeenissuedasofthedatewhenthefinancialtableswereconfirmedbuthaven’tbeenputintoeffectyetforthecurrentreportingperiodandhavenotbeenputintoeffectearlierbyGruparebelow.Unlessindicatedotherwise,afterthenewstandardsandcommentsareputintoeffect,Grupisgoingtomakethenecessaryrevisionsinawaythatwillaffectitsfinancialtablesandfootnotes.
• IFRS 9 Financial Instruments (Classification and Explanation)
ItseffecthasbeenpostponeduntilJanuary1,2018.Therevisionshallaffecttheclassificationandmeasurementsoffinancialassets,andthemeasurementsoffinancialcommitmentswhichismeasuredbyreflectingthefairvalueontheprofitorloss.Earlierapplicationispermitted.Thepossibleeffectsonfinancialtablesarebeingevaluated.
• IFRS 11 Obtaining Shares in Joint Activities (Revision)
Ithasbeenrevisedtobeaguideforshareobtainingaccountinginjointactivitieswhoseoperati-onconstitutesabusiness.Therevisionsshallbeappliedtotheannualaccountingperiodswhi-chareafterJanuary1,2016prospectively.Therevisionshallhavenoeffectsonfinancialtables.
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• IAS 16 and IAS 38 Acceptable Depreciation and Clarification of Depreciation Methods (Revision):
The revisionshas forbidden thedepreciationaccounting for financial tangiblepropertiesandlimitedtheuseofdepreciationaccountingbasedonrevenuefornon-financialtangiblesignifi-cantly.TherevisionsshallbeappliedtotheannualaccountingperiodswhichareafterJanuary1,2016prospectively.Therevisionshallhavenoeffectsonfinancialtables.
• Sales or contributions of assets between an investor and its associate or joint venture (IFRS 10, IAS 28- Revisions) :
Therevisionsareabouttherelationshipsofconsolidationandequitycapitalmethodapplicati-ons.ItisabouttheaccountingperiodswhichareafterJanuary1,2016.Earliereffectispermit-ted.Noeffectsbytherevisionsonthefinancialtablesareexpected.
• Equity Capital Management in Individual Financial Tables (IAS 27- Revisions):
Therevisionspermitsthattheequitycapitalmanagementisusedinindividualfinancialtables.ItregardstotheaccountingperiodswhichareafterJanuary1,2016anditshallbeappliedret-rospectively.Noeffectsbytherevisionsonthefinancialtablesareexpected.
• IFRS 14 Regulatory Deferral Accounts:
AccordingtoIFRSDefermentAccountBasedonRegulation,IFRS14RegulatoryDeferralAc-countspermitsanentitywhichisafirst-timeadopterofTurkishFinancialReportingStandardstocontinuetorecognize,withsomelimitedchanges,for‘regulatorydeferralaccountbalances’inaccordancewithitspreviousgenerallyacceptedaccountingstandards,bothoninitialadoptionofIFRSandinsubsequentfinancialstatements.IFRS14causedsomechangesinrelatedpartsofIFRS1standards.Earliereffectispermitted.Noeffectsbytherevisionsonthefinancialtablesareexpected.
• Presentation of Financial Statements (IAS 1- Revisions):
Itclarifies the requirementsprovided in IAS1. Itconcerns theaccountingperiodswhichareafterJanuary1,2016andearliereffectispermitted.Noeffectsbytherevisionsonthefinancialtablesareexpected.
• Investment entities : Application of Consolidation Exemption (IFRS 10, IFRS 12 and IAS 28 – Re-visions):
Asaresultoftherevision,itispermittedthatinterferenceinvestmententitiesareconsolidated.ItisabouttheaccountingperiodswhichareafterJanuary1,2016anditshallbeappliedpros-pectively.Noeffectsbytherevisionsonthefinancialtablesareexpected.
• Agriculture: Bearer plants (IAS 16 and IAS 41 Revisions)
The bearer plants have been extracted from IAS 41 “Agricultural Operations” standard andincludedtoIAS16“FinancialTangibleAssets”standardforthemeasurementandexplanationnecessitiesofthebearerplants.Therefore,acompanymaymeasurethebearerplantsasits
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cost.However, thegoodsonbearerplantsshallbecontinuedtobemeasuredbyextractingsalescostsfromtheirfairvalue.TherevisionsshallbevalidfortheannualaccountingperiodswhichareafterJanuary1,2016andtheyshallbeappliedprospectively.Earlyapplicationofthestandardispermitted.Noeffectsbytherevisionsonthefinancialtablesareexpected.
Annual Improvements – 2012-2014 Period
• IFRS 5 “Non-current Assets Held for Sale and Discontinued Operations” (Revision):
Itgivesannotationsregardingthecaseswheretangibleassetsheldforsaleareclassifiedasanassetheldfordistributiontoownersortheotherwayaroundandthecaseswheretheassetsarestoppedbeingheld fordistribution toowners.The revisionsshallbevalid for theannualaccountingperiodswhichareafterJanuary1,2016andtheyshallbeappliedprospectivelyandearlyapplicationofthestandardispermitted.
• IFRS 7 “Financial Instruments: Explanations” (Revision):
Itgivesadditionalinformationtoclarifyifaserviceagreementiscontinuationoftransferredas-setsandnettingininterimfinancialreports.Therevisionsshallbevalidfortheannualaccoun-tingperiodswhichareafterJanuary1,2016andtheyshallbeappliedprospectivelyandearlyapplicationofthestandardispermitted.
• IAS 34 “Interim Financial Reporting” (Revisions):
Itclarifiestheexplanation‘inanothersegmentininterimfinancialreporting’.ItshallbevalidfortheannualaccountingperiodswhichareafterJanuary1,2016andtheyshallbeappliedpros-pectivelyandearlyapplicationofthestandardispermitted.
• IAS 19 “Employee Benefits” (Revision):
Ioutlinesthatthemarketdepthofhighqualitycorporatebillsshallbeevaluatedinthecurrencyofthecountrythedebthasbeencarriedto,ratherthancurrencyofthecountrythedebtexists.It shallbevalid for theannualaccountingperiodswhichareafterJanuary1,2016and theyshallbeappliedprospectivelyandearlyapplicationofthestandardispermitted.Summaryofthenewandcorrectedstandards,revisionsandcommentsissuedbyInternationalAccountingStandardsInstitution(“UMSK”)buthavenotbeenissuedbyPublicOversightAccountingandAuditingStandardsAuthority(“KGK”):
• IFRS 15 “Revenue from Contracts with Customers”:
IASBhaspublishedIFRS15RevenuefromContractswithCustomersstandardinMay,2014.Thenewfive-stepmodelinthestandardexplainsthenecessitiesrelatedtorevenuerecognitionandmeasurement.Thestandardconstitutesamodelforrecognitionandmeasurementofthesalesofsomenon-financialassets(forexamplefinancialtangibleassetoutlet)whichshallbeappliedtorevenuefromcustomersandwhicharenotrelatedtousualoperationsofacompany.IFRS15shallbeappliedtotheannualaccountingperiodswhichcomeafterJanuary1,2018.Earlyapplicationshallbepossible.Itispossibleeffectsonfinancialtablesarebeingevaluated.
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• IFRS 9 “Financial Instruments” (Final Standard):
ThisstandardisareplacementofIAS39standardwhichwasaboutclassificationandmeasu-rementofassetsandobligations.IFRS9presentstwomodelsrelatedtodepreciatedvalueandfairvalue.Whilealloftheequityinstrumentsaremeasuredbyitsfairvalue,debtinstrumentsaremeasuredbydepreciatedvalue if thecontractualcashrevenueiscollectedbytheCompanyandthiscashrevenueincludesthe interestandthecapital.Fortheobligations,thestandardmaintainsmanyapplicationsincludingdepreciatedcostmanagementanddisintegrationofem-beddedderivatives.ItshallbeappliedonJanuary1,2018ortotheannualaccountingperiodswhichcomeafterJanuary1,2018.Itispossibleeffectsonfinancialtablesarebeingevaluated.
• IFRS 16 “Leases”:
IAS17,IFRSComment4,IASComment15andIASComment27shallbeabolishedwiththestandardissuedinJanuary,2016beingputintoeffect.IFRS16shallbeappliedtotheaccoun-tingperiodsstartingonJanuary1,2019and theaccountingperiodscomingafter thisdate.Earlyapplicationispermitted.ThecompanychoosingtheearlyapplicationhavetoapplyIFRS15standardearly,too.Itispossibleeffectsonfinancialtablesarebeingevaluated.
3 BUSINESS COMBINATIONS
Current Year
None.
Previous Period
None.
4 BUSINESS PARTNERSHIPS
TheCompany’sjointmanagingcompanyNeteksİletişimÜrünleriDağıtımA.Ş.isrecognisedac-cordingtotheequityconsolidationmethod.Thesummaryfinancialinformationofmentionedcom-panyisasfollows.
Financial Statement Item December 31, 2015 December 31, 2014
Current Assets 147.492.938 106.158.657
Non-current Assets 469.809 331.957
Total Assets 147.962.747 106.490.614 Short-term Liabilities 128.707.827 89.539.793
Long-term Liabilities 100.673 77.853
Shareholders’ Equity 19.154.247 16.872.968
Total Shareholders’ Equity 147.962.747 106.490.614
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5 REPORTING FINANCIAL INFORMATION BY SEGMENTS AND
GEOGRAPHIC AREAS
Grouphasreporteditsfinancialinformationbyinformationtechnologiesandlogistics.InformationtechnologiesconsistofsaleofcomputeranditscomponentssuchasPC,notebook,electronicalhomeproducts,networkingproducts,etc.Thegrossprofit/lossinformationofoperationsasofperiod’sendsareasfollows;
January 1-December 31, 2015
January 1 - December 31, 2014
6 CASH AND CASH EQUIVALENTS
CashandCashEquivalentsareasfollows:
Financial Statement ItemJanuary 1, 2015
December 31, 2015
January 1, 2014
December 31, 2014
Sales 320.926.487 240.561.029
Gross Profit 15.671.665 13.632.647
Operating Profit 11.013.474 9.080.445Net Profit (1.951.051) 1.534.580
Income Statements Information Technologies Telecom Logistics Total Elimination Consolidated
Non Interdepartmental Revenue
2.302.154.024 1.077.380.498 5.156.358 3.384.690.880 - 3.384.690.880
Interdepartmental Revenue
- - 23.142.790 23.142.790 (23.142.790) -
Sales Revenue 2.302.154.024 1.077.380.498 28.299.148 3.407.833.670 (23.142.790) 3.384.690.880
Cost of Sales (-) (2.191.468.395) (1.040.009.690) (401.308) (3.231.879.393) - (3.231.879.393)
Gross Profit / Loss 110.685.630 37.370.808 27.897.839 175.954.277 (23.142.790) 152.811.487
Income Statements Information Technologies Telecom Logistics Total Elimination Consolidated
Non Interdepartmental Revenue
1.901.678.269 300.169.328 4.171.730 2.206.019.328 - 2.206.019.328
Interdepartmental Revenue
- - 11.606.656 11.606.656 (11.606.656) -
Sales Revenue 1.901.678.269 300.169.328 15.778.387 2.217.625.984 (11.606.656) 2.206.019.328
Cost of Sales (-) (1.813.411.290) (288.423.609) (1.603.975) (2.103.438.874) - (2.103.438.874)
Gross Profit / Loss 88.266.979 11.745.719 14.174.412 114.187.110 (11.606.656) 102.580.454
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Maturitiesofcreditcardslipsare1or3daysforthecurrentandpriorperiod.
Maturityofreverserepotransactionswere1dayandinterestincomeof10.298TLwasaccrued.ReverserepotransactioncurrencywasmadeinTL,USDandEUROandinterestrateofreverserepotransactionsforUSDwere%0,21-0,72,forTLis%4,25–8,93andforEUROis%0,60asofDecember31,2015.
Maturityofreverserepotransactionswere1-3daysandinterestincomeof6.812TLwasaccrued.Reverserepotransactioncurrencywasmade inTLandUSDand interestrateofreverserepotransactionsforUSDwere%0,72-0,77andforTLis%3,29–8,84asofDecember31,2014.
TherearenoliensandblockedamountsoncashandcashequivalentsasofDecember31,2015(December31,2014:None.)
CashandcashequivalentshavebeenindicatedasaccruedinterestincomedeductedfromcashandequivalentsinGroup’scashflowstatements.
7 FINANCIAL ASSETS & INVESTMENTS
Short- Term Financial Assets & Investments
None.
Long –Term Financial Assets & Investments
AlllongtermfinancialinvestmentsareconsistofFinancialAssetsReadyforSale.
DetailsofFinancialAssetsAvailableforSaleareasfollows:
December 31, 2015 December 31, 2014Shares 63.605 - Quoted Companies’ Shares - - -Unlisted Companies’ Shares 63.605 63.605Total 63.605 63.605
Account Name December 31, 2015 December 31, 2014Cash and Equivalents 136.763.531 111.965.405Accrued Interest Income (-) (10.298) (6.812)Total 136.753.233 111.958.593
Account Name December 31, 2015 December 31, 2014Cash 170.304 75.124 Bank (Demand Deposits) 12.467.815 10.018.424 Financial Assets held until Maturity (Reverse Repo) 123.616.698 101.128.147 Credit card slips 508.714 743.710 Total 136.763.531 111.965.405
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Unlistedshareinvestmentsareasfollows;
Summaryoffinancialinformationrelatedtounlistedshareinvestments;
December 31, 2015
December 31, 2014
8 SHORT-TERM AND LONG-TERM LIABILITIES AND SHORT-TERM PORTIONS OF LONG-TERM LIABILITIES
Short-Termfinancialliabilitiesareasfollows:
Theshort-termportionoflong-termliabilitiesasoftheendofperiodisasfollows:
December 31, 2015 December 31, 2014
Company Name Share Amount RateCompany
NameShare Amount
İnfin A.Ş. 63.605 99,80 63.605 99,80Total 63.605 63.605
Company Name
Total AssetTotal
LiabilitiesTotal Equity Net Sales
Profit for the period
İnfin A.Ş. 3.627.236 3.959.843 (332.607) 12.277.224 (228.130)Total 3.627.236 3.959.843 (332.607) 12.277.224 (228.130)
Company Name
Total AssetTotal
LiabilitiesTotal Equity Net Sales
Profit for the period
İnfin A.Ş. 2.161.269 1.746.058 415.211 11.727.331 747.818Total 2.161.269 1.746.058 415.211 11.727.331 747.818
Account NameDecember 31,
2015 December 31,
2014Short.Por.Long-Term Liab. 196.577.011 49.349.734Total 196.577.011 49.349.734
Account NameDecember 31,
2015December 31,
2014Bank Loans 57.637.870 41.281.153 Financial Lease Payables 1.140.059 1.196.434 Interest Payables Of Deffered Lease Cost (-) (93.201) (225.184)Total 58.684.728 42.252.403
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OurassociatedpartnerDatagateBilgisayarMalzemeleriTicaretA.Ş.’s4.040TLfromtheirshorttermcreditsand196.577.011TLfromtheirshorttermpartoftheirlongtermcreditshavebeenusedfor12,24and36monthscontractcampaigncellphones’financing.AllthesecreditsareundertheguaranteeofAveaİletişimHizmetleriA.Ş.AtthesametimeAveaİletişimHizmetleriA.Şcollectsreceivablesofdevices fromtheirsubscribers.Ourcompanyusecredit forassignthereceivableswhichariseasaresultofourdevicesalestofinancialcorporations.Requiredbytheassignment,capitalandamountofinterestofthecredithavebeenpaidbyAveaİletişimHizmetleriA.Şatit’smaturity.
ThetransferredreceivableswhicharecollectedbyAveaİletişimHizmetleriarereceivedthroughthedispositionandtheirrevocabletothefactoringfirmsasfromOctober2015.Accordingtothedispositionconditions,theamountofloan’sandfactoring’sprincipalandinterestsarepaidbyAveaİletişimHizmetleriattheirmaturity.
ThedetailsoftheLongTermBankLoansfortheyearsendedareasfollows:
OurassociatedpartnerDatagateBilgisayarMalzemeleriTicaretA.Ş’sall longtermcreditshavebeenusedfor12,24and36monthscontractcampaigncellphones’financing.AllthesecreditsareundertheguaranteeofAveaİletişimHizmetleriA.Ş.AtthesametimeAveaİletişimHizmetleriA.Şcollectsreceivablesofdevicesfromtheirsubscribers.Ourcompanyusecreditforassignthereceivableswhichariseasaresultofourdevicesalestofinancialcorporations.Requiredbytheassignment,capitalandamountofinteresthavebeenpaidbyAveaİletişimHizmetleriA.Şatit’smaturity.
ThedetailsoftheShortTermBankLoansareasfollows:
December 31, 2015
TypeForeign Currency
AmountAmount in TL Annual Interest Rate
(%)Short Term Loans Faizsiz -11,32-16,01TLLoans 15.081.961 15,10-15,11TLFinancialLeasePayables
975.114 5,87
EURFinancialLeasePayables
22.578 71.744
USDLoans 14.636.095 42.555.909 1,6-8,10Total Loans 58.684.728
Account NameDecember 31,
2015 December 31,
2014Bank Loans 67.085.140 40.905.768 Financial Lease Payables 76.331 992.178 Interest Payables Of Deffered Lease Cost (-) (1.130) (93.681)Total 67.160.341 41.804.265
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December 31, 2014
Detailsoftheshort-termportionoflong-termliabilitiesasoftheendofperiodisasfollows:
December 31, 2015
December 31, 2014
ThedetailsoftheLongTermBankLoansareasfollows:
December 31, 2015
TypeForeign Currency
AmountAmount
in TLAnnual Interest Rate
(%)TLLoans 196.577.011 11,48-16,44Total Loans 196.577.011
TypeForeign Currency
AmountAmount
in TLAnnual Interest Rate
(%)Long Term LoansTLLoans 67.085.141 11,55-16,19TLLeasePayables 75.200 15,11Total Loans 67.160.341
TypeForeign Currency
AmountAmount
in TLAnnual Interest Rate
(%)Short Term LoansTLLoans 10.434.112 Faizsiz -10,80-16,09TLFinancialLeasePayables
256.700 16,09-16,10
USDLoans 13.610.587 31.561.591 1,61Total Loans 42.252.403
TypeForeign Currency
AmountAmount
in TLAnnual Interest Rate
(%)TLLoans - 45.879.996 10,8-11,40USDLoans 1.496.286 3.469.738 8,13Total Loans 49.349.734
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December 31, 2014
MaturityInformationofBankLoansLiabilitiesisasfollows;
9 OTHER FINANCIAL LIABILITIES
None.
10 TRADE RECEIVABLES AND PAYABLES
Short-Termtradereceivablesareasfollows:
OurassociatedpartnerDatagateBilgisyarMalzemeleriTicaretA.Ş.’s215.611.566TL’(31Decem-ber201453.099.118TL)fromtheirshorttermpartoftheassignedreceivablesareusedforsales12,24and36monthsforwardcommitmentcampaignsthroughthesubsidiariesofAveaİletişimHizmetleri A.Ş and thesemobile devices receivables are under the guarantee of Avea İletişim
Account NameDecember 31,
2015December 31,
2014Trade Receivables 696.331.515 476.066.722 Due from Related Parties (Note:37) 2.410.177 2.612.603 Other Receivables 693.921.338 473.454.119 -Other Receivables 478.309.772 420.355.001 -Assigned Receivables 215.611.566 53.099.118Notes Receivables 204.944.767 167.705.809Rediscount on Receivables (-) (19.806.532) (7.332.405)Doubtful Receivables 11.218.666 9.389.839Provision for Doubtful Receivables (-) (11.218.666) (9.389.839)Total 881.469.750 636.440.126
31 December 2015 31 December 20140-12 months 58.684.728 42.252.4033-12 months 67.160.341 49.349.73412-60months 322.422.080 41.804.265Total 322.422.080 133.406.402
TypeForeign Currency
AmountAmount
in TLAnnual Interest Rate
(%)Long Term LoansTLLoans 40.080.362 10,8-11,40TLLeasePayables 898.498 16,09-16,10USDLoans 355.947 825.405 8,13Total Loans 41.804.265
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HizmetleriA.Ş.AtthesametimeAveaİletişimHizmetleriA.Şcollectsreceivablesofdevicesfromtheirsubscribers.Ourcompanyuse196.581.051TL(31December201446.018.137TL)partofcreditforassignthereceivableswhichariseasaresultofourdevicesalestofinancialcorporati-ons.Requiredbytheassignment,capitalandamountofinteresthavebeenpaidbyAveaİletişimHizmetleriA.Şatit’smaturity.
ThetransferredreceivableswhicharecollectedbyAveaİletişimHizmetleriarereceivedthroughthedispositionandtheirrevocabletothefactoringfirmsasfromOctober2015.Accordingtothedispositionconditions,theamountofloan’sandfactoring’sprincipalandinterestsarepaidbyAveaİletişimHizmetleriattheirmaturity.
Short-termassignedreceivablesmaturitiesareasfollows:
Long-Termtradereceivablesareasfollows:
OurassociatedpartnerDatagateBilgisyarMalzemeleriTicaretA.Ş.’s79.655.935TL(31Decem-ber201452.486.149TL)fromtheirlongtermpartoftheassignedreceivablesareusedforsales12,24and36monthsforwardcommitmentcampaignsthroughthesubsidiariesofAveaİletişimHizmetleriA.ŞandthesemobiledevicesreceivablesareundertheguaranteeofAveaİletişimHiz-metleriA.Ş.67.085.142TL(31December201443.872.812TL)ofthisamount,aspartofthesamecampaign,isassignedtobanksasassignofthecreditsthatbeenusedupbythecompany.
Ourcompanyusecreditforassignthereceivableswhichariseasaresultofourdevicesalestofinancialcorporations.Requiredbytheassignment,capitalandamountofinteresthavebeenpaidbyAveaİletişimHizmetleriA.Şatit’smaturity.
ThetransferredreceivableswhicharecollectedbyAveaİletişimHizmetleriarereceivedthroughthedispositionandtheirrevocabletothefactoringfirmsasfromOctober2015.Accordingtothedispositionconditions,theamountofloan’sandfactoring’sprincipalandinterestsarepaidbyAveaİletişimHizmetleriattheirmaturity.
Termstructureoftheshorttermdispositionsareasfollows;
Account NameDecember 31,
2015 December 31,
2014Trade Receivables 79.655.935 52.486.149 Due from Related Parties - - Other Receivables 79.655.935 52.486.149Rediscount on Assigned Receivables (-) (12.570.793) (8.613.337)Total 67.085.142 43.872.812
Assigned Receivables December 31, 2015 December 31, 2014 0-3 month 54.181.963 13.290.6273-12 month 161.429.603 39.808.491Total 215.611.566 53.099.118
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Asthedateof31December2015,295.267.501TLamount,aspointoutaboveisthepartof881.469.750TLshorttermand67.085.142TLlongtermonthebrinkoftotalamountof948.554.892TLreceivables,isundertheguaranteeofAveaİletişimHizmetleriA.Şandtheassurancewastakenfromcustomersof thegroupfor46.524.462TLreceivables.340.782.598TLof theremainingreceivableswhichis606.762.929TLarewithinthescopeofEulerHermes’assurance.
As the date of 31December 2014, 105.585.267 TL amount , as point out above is the partof 636.440.126 TL short term and 43.872.812 TL long term on the brink of total amount of680.312.938TLreceivables,isundertheguaranteeofAveaİletişimHizmetleriA.Şandtheassuran-cewastakenfromcustomersofthegroupforreceivablesamountof52.021.681TL.278.417.075TLoftherestofreceivablesarewithinthescopeofEulerHermes’assurance.Theinformationsabout“thequalificationsandlevelofrisksattradereceivablescanbefoundinNote:38.
CompanyandEulerHermescompanyhaveagreedtoinsuranceuponCompany’straderecei-vableswithinthebordersofTurkey.Thedetailsareherinbelow;
-Policyisbetween01March2015-31March2016,anditispreparedannually.
-AllthedamagessubjecttopolicyareshowninUSD.
-Warrantratioisdeterminedby%90ofthecreditlimitdemandedtradereceivables.
The movement of Doubtful Receivables is as follows:
Maturity analysis of trade receivable overdue that is not assessed for impairment is as follows;
Explanationsconcerning thenature risk and level of riskof trade receivables aredisclosed inNote:38
December 31, 2015 December 31, 2014 Up to 3 Months 3.347.413 3.379.126 Between 3- 12 Months 36.821 46.492 Total 3.384.234 3.425.618
Assigned Receivables 31 December 2015 31 December 2014 12-36 month 79.655.935 52.486.149Total 79.655.935 52.486.149
January 1, 2015 December 31, 2015
January 1, 2014 December 31, 2014
Opening Balance (9.389.839) (9.106.072)Collections in current period (+) 61.657 286.722Exchange Difference - -Period Expenses (-) (1.890.484) (570.489)Period-end Balance (11.218.666) (9.389.839)
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DetailsofTradepayablesfortheyearendedareasfollows:
Therearenotanylong-termtradepayablesfortheyearsendedDecember31,2015andDecem-ber31,2014.
AverageMaturityofTradereceivablesandpayablesareunderthreemonths.ThetradereceivablesandpayablesinTLwerediscountedusingthecompoundinterestratespecifiedinGovernmentBonds.ReceivablesandpayablesinUSDandEUROarediscountedusingLiborandEuroLiborratesrespectivelyTL%11,0USD%1,1780andEURO%0,05929.(December31,2014RatesTL%8,4,USD%0,62880,EURO%0,29357)
11 OTHER RECEIVABLES AND PAYABLES
Short-termotherreceivablesareasfollows:
Long-termotherreceivablesareasfollows:
Explanationsconcerning thenature risk and level of riskof trade receivables aredisclosed inNote:38
Short-termotherpayablesfortheyearsendedareasfollows:
Account Name December 31, 2015 December 31, 2014Suppliers 644.547.088 643.609.275 Other Suppliers 644.384.684 643.593.379 Due to Related Suppliers (Note:37) 162.404 15.896Notes Payable 84.541.440 45.494.206Rediscount on Payable (-) (9.221.668) (5.500.408)Total 719.866.860 683.603.073
Account Name December 31, 2015 December 31, 2014Deposits and Guarantees Given 51.685 51.685Total 51.685 51.685
Account Name December 31, 2015 December 31, 2014Deposits and Guarantees Given 14.105 13.145 Other Receivables 100.728 352.101 Due From Personnel 221.005 220.228Non-commercial Receivables Due From Related Parties (Note:37)
346.748 274.998
Total 682.586 860.472
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12 FINANCIAL INSTRUMENTS
FinancialInstrumentsfoundinCurrentAssets
TheGroupasofDecember31,2014hasmadea4.464.564USD foreigncurrencypurchaseagreement.Alloftheamount’smaturityis0-3months.ThefairvalueoftheseagreementsasofDecember31,2014is10.187.838TLandthevaluationdifferenceof165.039TLhasbeenwrittenasincome.
DerivativeFinancialInstrumentsfoundinShort-TermLiabilities;
TheGroupasofDecember31,2015hasmadea11.115.416USDforeigncurrencypurchaseagreement.Alloftheamount’smaturityis0-3months.ThefairvalueoftheseagreementsasofDecember31,2015is32.485.146TLandthevaluationdifferenceof165.962TLhasbeenwrittenasexpense.
13 INVENTORIES
Inventoriesfortheperiodsendedareasfollows:
Inventorieswhoseinvoicesarereceivedatanearlierdatethantheirphysicalentryinthewarehou-sesareclassifiedundertheaccount“GoodsinTransit”
Account Name December 31, 2015 December 31, 2014Taxes, Duties Payable and Other Fiscal Liabilities 6.799.671 3.959.351Non-commercial Payables Due to Related Parties (Note:37) - -Other 11.607 9.856Total 6.811.278 3.969.207
Account Name December 31, 2015 December 31, 2014Ticari Mallar 180.751.779 148.680.625Yoldaki Mallar 31.191.599 24.808.688Stok Değer Düşüklüğü Karşılığı (-) (5.300.462) (3.204.256)Toplam 206.642.916 170.285.057
Account Name December 31, 2015 December 31, 2014Derivative Financial Instruments Receivables - 165.039 Total - 165.039
Account Name December 31, 2015 December 31, 2014Derivative Financial Instruments Payables 165.962 -Total 165.962 -
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TheMovementsinProvisionforDecreaseinValueofInventories
Theprovision fordecrease invalueofstocks iscalculatedwith increasingpercentages for thegoodswaiting in the inventorymore than3monthsdependingupon increase in the inventoryturnoverrate.
AsofDecember31,2015,17.232.190TLoftheinventoriesispresentedwiththeirnetrealizablevalueandtheremainingbalanceispresentedwiththeircostinthefinancialstatements.(AsofDe-cember31,2014,14.327.425TLoftheinventoriesispresentedwiththeirnetrealizablevalueandtheremainingbalanceispresentedwiththeircostinthefinancialstatements.)
Thereisnoinventorygivenasaguaranteeforaliability.
TotalAmountofInsurancesonAssetsisdisclosedinNote:22.
Theinformationrelatedtoinventoriesrecognisedasexpenseinthecurrentperiodisdisclosedin
Note:28.
14 BIOLOGICAL ASSETS
None.
15 PREPAID EXPENSES AND DEFERRED INCOME
Short-Term:
PrepaidExpensesasofDecember31,2015andDecember31,2014areasfollows:
Explanation December 31, 2015 December 31, 2014Cost 22.532.652 17.531.681 Provision for Decrease in value of Inventories (5.300.462) ( 3.204.256) Net Realizable Value (a) 17.232.190 14.327.425 Inventory presented with its cost value (b) 189.410.726 155.957.632 Total Inventories (a+b) 206.642.916 170.285.057
01 January 2015 31 December 2015
01 January 2014 31 December 2014
Opening Balance (-) (3.204.256) (2.826.065)Translation Differences - 17.818Provision for the Period(-) (2.096.206) (396.009)Period-End Balance (5.300.462) (3.204.256)
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DeferredIncomeareasfollows:
Asthedateof31December2015,58.585.837TLamountoftheadvancesoriginatedfrompro-pertysalesadvancesofTeklosTeknolojiLojistikHizmetleriA.Ş.Theamountof5.299.995TLisalsooriginatedfromreceivedadvancesforunitsalesofDatagateBilgisayarMalzemeleriA.Ş.
Asthedateof31December2014,16.793.450TLamountoftheadvancesoriginatedfrompro-pertysalesadvancesofTeklosTeknolojiLojistikHizmetleriA.Ş.Theamountof2.503.995TLisalsooriginatedfromreceivedadvancesforunitsalesofDatagateBilgisayarMalzemeleriA.Ş.
Amounts thathavebeen invoicedhowevernotdeliveredarerecorded in the“incomefromfol-lowingmonths”account.ThisisbecausetheIAS18requirements(delivery,transferofrisk,etc)havenotbeenfulfilled.
16 INVESTMENTS EVALUATED BY EQUITY METHOD
Investmentsaccounted forusing theEquityMethodhavebeenshownbelow through theFairValueMovementScheduleasfollows:
InformationregardingInvestmentsaccountedforusingtheEquityMethodcanbefoundinNote:4.
Account Name December 31, 2015 December 31, 2014Work Advances Received 68.714.203 22.841.331Income Relating to Future Mon. 13.057.923 7.013.595Total 81.772.126 29.854.926
Company Name Participation Rate December 31, 2015 December 31, 2014Neteks 50 10.193.899 9.053.260Total 10.193.899 9.053.260
December 31, 2015 December 31, 2014January 1 Opening 9.053.260 7.611.172Share from Period Profit (975.527) 767.290Foreign Currency Translation Differences 2.116.166 674.798December 31 Closing 10.193.899 9.053.260
Account Name December 31, 2015 December 31, 2014Prepaid Expenses for Following Mon. 3.965.920 1.644.983Work Advances Given 4.536.357 5.618.208Total 8.502.277 7.263.191
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17 INVESTMENT PROPERTIES
December 31, 2015
Cost
Accumulated Depreciation
TeklosA.Ş,3landownersandcontractorfirmSebaİnşaatA.Şhaveagreedonrevenuesharingproportions%40,5,%6and%53,5respectively.
- Time of completion has determined 36 months as from permit date and the deadline is19.01.2018.
-Projectisallaboutworkplace;constructon24.651m2land,totalconstructionareais106.330m2,sellablelandareais62.362m2andtheprojectismadeupof204independentpartsintotal.
-Withreceivingthebuildinglicense,ourassociatedpartnerTeklosA.Ş’sestimatedgain(includesVAT)iscalculatedover90millionsUSDapproximately.
-“Buildinglicense’’hastakenfromSarıyerMunicipalityonthedateof19.01.2015.
Byyear31December2015,thispropertyisstartedtobeclassifiedasinvestmentpropertywithresignationdesolately to the construction firm for thepurposeof construction.Previously, thispropertyisclassifiedastangibleassetsbecauseitisusedforcompanyactivities.Itisinfinancialstatementwithpropertyamountandthebookvalueis27.757.030TL.Therest2.814.107TLofpropertieswithbookvaluearecomposedofacquisitionofpropertiesfromreceivablesonthepartofsubsidiariesinİstanbulandTekirdağ.TheGroupassumesthattheresidualcostofbuildingsinTekirdağisclosetotheirmarketvalue.
Hesap Adı January 1, 2015 Amortization DisposalsTransfer
(*)December
31, 2015 Land Improvements (44.297) - - - (44.297)Buildings (5.032.910) (26.471) - - (5.059.381)Total (5.077.207) (26.471) - - (5.103.678)Net Value 30.597.609 30.571.138
Account NameJanuary 1,
2015Purchases Disposals Transfer (*) 31 Aralık 2015
Arsa ve Araziler 19.434.414 - - - 19.434.414 Yer Altı Yer Üstü 44.297 - - - 44.297 Binalar 16.196.105 - - - 16.196.105 Toplam 35.674.816 - - - 35.674.816
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Theinformationsaboutredemptionanddepreciationexpenses’accountedaccomptsareplacedinNote:30-31.
Theinformationsoftheinvestmentproperties’depreciationratiosandtheirmethodsareplacedinNote:2.08.16.
Rentalincomeoftheinvestmentpropertiesincurrentperiodisnon-available.
Theexpensesofinvestmentpropertiesareaccountedfromwithinoperationalexpenses.(Note:31)
Everymortgage,limitationsandexegesiscanbefoundinNote:22.Apartformthatthereisnolimi-tationovertheliquidityofpropertiesandusageofcashwhichcomefromrevenues.AssurancesonassetvalueareplacedinNote:22.
December 31, 2014
Cost
Accumulated Depreciation
18 TANGIBLE FIXED ASSETS
TheFixedAssetsdetailsfortheyearsendedareasfollows
December 31, 2015
Cost Value
Account NameJanuary 1,
2014Purchases Disposals Transfer
December 31, 2014
Arsa ve Araziler 1.571.150 - - 17.863.264 19.434.414Yer Altı ve Yer Üstü - - - 44.297 44.297Binalar 1.194.802 128.713 - 14.872.590 16.196.105Toplam 2.765.952 128.713 - 32.780.151 35.674.816
Account NameJanuary 1,
2014Amortization Disposals Transfer
December 31, 2014
Land Improvements - - - (44.297) (44.297)Buildings (28.266) (25.825) - (4.978.819) (5.032.910)Total (28.266) (25.825) - (5.023.116) (5.077.207)Net Value 2.737.686 30.597.609
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Accumulated Depreciation
December 31, 2014
Cost Value
Account NameJanuary 1,
2014Additions Sales (-)
Foreign Exchange
Translation Differences
TransferDecember 31, 2014
Lands and parcels 17.863.263 - - - (17.863.263) - Land Improvements 44.297 - - - (44.297) - Buildings 14.616.569 256.018 - - (14.872.587) - Machinery, Plants&Equipments
1.546.552 2.544.041 (33.927) (22) - 4.056.644
Motor Vehicles 2.690.547 229.388 (114.893) (819) - 2.804.223Furniture & Fixtures 6.057.426 709.994 (100.183) (5.179) - 6.662.058Leasehold improvements
305.706 4.506.471 - (69) - 4.812.108
Total 43.124.360 8.245.912 (249.003) (6.089) (32.780.147) 18.335.033
Account NameJanuary 1,
2015Additions
Disposals (-)
TransferDecember 31,
2015Machinery, Plants&Equipments
4.056.644 - - - 4.056.644
Motor Vehicles 2.804.223 31.340 (101.152) - 2.734.411Furniture & Fixtures 6.662.058 584.341 (13.603) - 7.232.796Leasehold improvements 4.812.108 267.807 (1.700) - 5.078.215Total 18.335.033 883.488 (116.455) - 19.102.066
Account NameJanuary 1,
2015Amortization
Disposals (-)
TransferDecember 31,
2015Machinery, Plants&Equipments
(1.905.934) (480.911) - - (2.386.845)
Motor Vehicles (2.013.650) (354.516) 84.262 - (2.283.904)Furniture & Fixtures (5.098.134) (692.757) 1.498 - (5.789.393)Leasehold improvements
(845.158) (955.907) 57 - (1.801.008)
Total (9.862.876) (2.484.091) 85.817 - (12.261.150)Net Value 8.472.157 6.840.916
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Accumulated Depreciation
Other Information
ThedepreciationandamortizationexpensesarerecognisedundertheoperationalexpensesTheAmountofmortgageonbuildingswhicharestatedinassetsis1.133.299USDTotalAmountofInsurancesonAssetsisdisclosedinNote:22.
19 INTANGIBLE FIXED ASSETS
December 31, 2015
Cost Value
Accumulated Depreciation
Account NameJanuary 1,
2014Amortization Disposals (-)
Foreign Exchange
Translation Differences
TransferDecember 31, 2014
Land Improvements (44.297) - - - 44.297 -Buildings (4.842.259) (136.560) - - 4.978.819 -Machinery, Plants&Equipments
(1.519.200) (412.765) 26.010 21 - (1.905.934)
Motor Vehicles (1.623.247) (427.707) 36.414 890 - (2.013.650)Furniture & Fixtures (4.491.487) (678.971) 67.240 5.084 - (5.098.134)Leasehold improvements
(198.297) (646.928) - 67 - (845.158)
Total (12.718.787) (2.302.931) 129.664 6.062 5.023.116 (9.862.876)Net Value 30.405.573 8.472.157
Account Name January 1, 2015 Additions Disposals (-)December 31,
2015Rights 916.407 3.008.467 - 3.924.874Other Intangible Fıxed Assets
130.810 - - 130.810
Total 1.047.217 3.008.467 - 4.055.684
Account Name January 1, 2015 Amortization Disposals (-) December 31, 2015
Rights (670.492) (49.030) - (719.522)Total (670.492) (49.030) - (719.522)Net Value 376.725 3.336.162
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Other intangibleassetsconsistofartobjects.Theyarenotsubjecttodepreciationduetotheirindefiniteusefullife.
December 31, 2014
Cost Value
Accumulated Depreciation
Otherintangibleassetsconsistofartobjects.Theyarenotsubjecttodepreciationduetotheirindefiniteusefullife.
Thedepreciationandamortizationexpensesarerecognisedundertheoperationalexpenses.
Thegoodwillamount,whichisalsotheopeningbalance,isrelatedtoDatagateBilgisayarA.Ş.,oneoftheparticipationsoftheCompany.Thegoodwillamountisreviewedatleastoncean-nually.ThelastevaluationofDatagatewasmadeonDecember31,2014andnoimpairment
Account NameJanuary 1,
2014Additions Disposals (-)
Foreign Exchange
Translation Differences
December 31, 2014
Rights 674.306 243.338 - (1.237) 916.407Other Intangible Fıxed Assets
130.810 - - - 130.810
Total 805.116 243.338 - (1.237) 1.047.217
Account NameJanuary 1,
2014Amortization
Disposals (-)
Foreign Exchange
Translation Differences
December 31, 2014
Haklar (654.049) (17.700) - 1.257 (670.492)Toplam (654.049) (17.700) - 1.257 (670.492)Net Değer 151.067 376.725
Goodwill December 31, 2015 December 31, 2014
Opening Balance 1.897.699 1.897.699Additions - -Disposals/ Sales - -Translation Difference - -Closing balance 1.897.699 1.897.699
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wasdetermined.TherewasnotanyimpairmentforthegoodwillasofDecember31,2015.Thegoodwillamountforthiscompanyisreviewedateachbalancesheetdate.Duringreviewofgo-odwill,thepresentvalueofthecashamounts,whichareobtainedbythementionedcompany,iscalculated.
20 LIABILITIES IN THE SCOPE OF EMPLOYEE BENEFITS
TheLiabilitiesintheScopeofEmployeeBenefitsfortheperiodsendedDecember31,2015and
December31,2014areasfollows:
21 GOVERNMENT GRANT AND ASSISTANCE
None.
22 PROVISIONS, CONTINGENT ASSETS AND LIABILITIES
Account Name December 31, 2015 December 31, 2014Payables to Employees 248 131.630SGK Payable 484.860 434.436Total 485.108 566.066
Account Name December 31, 2015 December 31, 2014Provisions for Price Differences 37.441.935 25.566.310 Provisions for TT Net Campaign - 342.197 Provision for Litigations 891.857 1.893.995 Total 38.333.792 27.802.502
December 31, 2015Provision for Litigations
Price Differences
Provisions for TT Net Campaign
Total
As of January 1 1.893.995 25.566.310 342.197 27.802.502Additions (24.386) 37.441.935 - 37.417.549Payments / Offsetting - (25.566.310) (342.197) (25.908.507)Terminated Provisions (977.752) - - (977.752)As of December 31, 2015 891.857 37.441.935 - 38.333.792
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TherewasanagreementmadebetweenTTNetA.Ş.,İndeksBilgisayarA.Ş.andDatagateBilgi-sayarA.Ş.forthe4thComputerCampaign.Withthisagreement,somekindofproductssalesaremadewithtermsof24-36monthsbetweenduringApril2011-April2012.TTNetprovisionamountconsistofsalespremiumsandcommisisonswhichwillbepaidtovendorandTTNet.
Pricedifferenceinvoicesaretakenfromcustomersfortheproductssoldindifferentpricesfrompreviousperiodandprovisionsaremadeforthem.Alsotargetshavebeengiventocustomersinordertoincreasethesalesandturnoverpremium,creditnote,pricedifference,etc.invoicesaretakenfromcustomersintheeventoftargetsachievedbythecustomersandprovisionsaremadeforthem.
ii) Contingent Assets and Liabilities;
December 31, 2015
AsofDecember31,2015,forthelawsuitsinitiatedagainstGroup,provisionamountTL891.857isreflectedtothefinancialstatements.Almostalloftheprovisionsforlitigationsconsistofcustomlawsuits.
December 31, 2014
AsofDecember31,2014,forthelawsuitsinitiatedagainstGroup,provisionamountTL1.893.995isreflectedtothefinancialstatements.Almostalloftheprovisionsforlitigationsconsistofcustomlawsuits.
iii) Contingent Liabilities and Commitments:
December 31, 2015
December 31, 2014Provision for Litigations
Price Differences
Provisions for TT Net Campaign
Total
As of January 1 1.798.788 13.684.473 3.893.445 19.376.706Additions 246.544 25.566.310 - 25.812.854Payments / Offsetting - (13.684.473) (3.551.248) (17.235.721)Terminated Provisions (151.337) - - (151.337)As of December 31, 2014 1.893.995 25.566.310 342.197 27.802.502
TL USD EUROBailment Given 149.349.126 7.550.000 -Guarantee Letters given 128.635.400 9.265.000 1.400.000 Total 277.984.526 16.815.000 1.400.000
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December 31, 2014
Guaranteelettersaregiventosomepublicinstitutions,domesticandforeignsellerswhichGrouppurchasefrom.Theyaretheguaranteeofliabilitiesobtainedfrompurchaseofgoods.Thereisnocashout-flowrelatedwiththeguaranteelettersduetotheliabilitiesarepaidontheirmaturity.
iv) Total Insurance Coverage on Assets;
December 31, 2015
AdditionalinformationsrelatedtradereceivablesinsuranceareenclosedinNote:10.
December 31, 2014
TL USD EUROBailment Given 79.367.376 5.000.000 -Guarantee Letters given 68.965.943 11.715.000 2.300.000 Total 148.333.319 16.715.000 2.300.000
Type of Insured Assets USD TL Trade goods 111.291.962 -Vehicles - 2.481.342 Plants machinery and equipment 6.480.874 -Total 117.772.836 2.481.342
Type of Insured Assets USD TL Trade goods 91.082.501 - Vehicles - 2.528.285 Plants machinery and equipment 6.477.770 - Total 97.560.271 2.528.285
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v ) The ratio of Mortgages and Guarantees Given to Shareholders’ Equity is as fol-lows;
AmountsstatedintheabovetablearetheamountsinTLattheendoftheperiod.
TheratioofMortgagesandGuaranteesGiventoShareholders’Equityis0%.(0%asofDecem-ber31,2014)
23 COMMITMENTS
None.
24 EMPLOYEE BENEFITS
Mortgages & Guarantees Given by the Group
December 31, 2015
December 31, 2015
December 31, 2014
December 31, 2014
Foreign
Currency
Amount
TL Amount
Foreign
Currency
Amount
TL Amount
A. Total amount of M&G Given on behalf of the Group - 160.022.954 - 102.619.467
Guarantee Letter (USD) 9.265.000 26.938.914 11.715.000 27.165.914
Guarantee Letter (EURO) 1.400.000 4.448.640 2.300.000 6.487.610
Guarantee Letter (TL) 128.635.400 128.635.400 68.965.943 68.965.943
Guarantee notes and cheques(TL)
Lien
Mortgage(USD)
B. Total amount of M&G Given on behalf of the Subsidiaries and
Affiliated Companies subject to full consolidation- 171.301.506 - 90.961.876
Bailment (USD) 7.550.000 21.952.380 5.000.000 11.594.500
Bailment (EURO) - - - -
Bailment (TL) 149.349.126 149.349.126 79.367.376 79.367.376
C. Total Amount of M&G Given on behalf of the third person
liability in order to sustain usual business activities.- - - -
D. Total Amount of other M&G Given - - - -
i. Total Amount of M&G Given on behalf of main shareholder - - - -
ii. Total Amount of M&G Given on behalf of other affiliated
companies which cannot be classified under section B and C.- - - -
iii. Total Amount of M&G Given on behalf of the third person
that cannot be classified under section C.- - - -
Total - 331.324.460 - 193.581.343
Account Name December 31, 2015 December 31, 2014Provision for Employment Termination 3.293.817 2.783.123Total 3.293.817 2.783.123
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Under theTurkishLaborLaw, theGroup is required topayemployee terminationbenefits to
each employee, who has entitled to receive provisions for employee termination benefits in
accordancewiththeeffectivelaws.AdditionallytheCompanyisrequiredtopayemployeewho
has the right of severance with termination indemnity. The maximum employee termination
benefitpayableasofJanuary1,2016isTL4.092,53(December31,2014:TL3.541,37)and
takenintoconsiderationinthecalculationsoftheGroup’sprovisionforterminationindemnities.
Terminationindemnitypayableiscalculatedbyforecastingthepresentvalueofcurrentlywor-kingemployee’spossiblefutureliabilities.IAS19(“EmployeeTerminationBenefits”)predictstobuildupGroup’sliabilitieswithusingactuarialvaluationtechniquesincontextofdefinedbenefitplans.Accordingtothesepredictions,actuarialassumptionsusedincalculationoftotalliabilitiesareasfollows.
Theprincipalassumptionisthatthemaximumliabilityforeachyearofservicewill increaseinlinewiththeinflation.Therefore,thediscountrateappliedrepresentstheexpectedrealrateafteradjustingfortheanticipatedeffectsoffutureinflation.Consequently,inthefinancialstatementsdatedasofDecember31,2015,theprovisionwascalculatedbyestimatingthepresentvalueofthefutureprobableobligationoftheGrouparisingfromtheretirementoftheemployees.Theprovisionsatthebalancesheetdateshavebeencalculatedassuminganannualinflationrateof6,5%andadiscountrateof10,5%.Withthattherealdiscountrateof3,76%(December31,2014:3,77%)wasusedinthecomputation.Theseexpectationsarereviewedeverybalancesheetperiodandrevisedifrequired.
Asthedate31December2015,Theprobabilityofmakenotprovisioninrelationtobenefitob-ligationisapproximately%97,22.(31December2014:%97,17)
Provisionexpenseforterminationindemnitiesisrecognisedundertheoperationalexpenses.
AccordingtotheregulationunderIAS19releasedonJanuary1,2013actuariallossesandgainsaretoberecordedunderothercomprehensiveincomeinShareholder’sEquity.
TheactuarialgainsexpensedinthecurrentperiodareTL225.468Theportionofdeferredtax
January 1, 2015December 31, 2015
January 1, 2014December 31, 2014
January 1 2.783.123 2.682.494Service Cost 391.527 243.113Actuarial Profit 225.468 2.448Interest Cost 278.312 268.249Nullifed Provisions - (14.255)Difference Between Previous Period Provision and Current Period Termination Indemnity Paid
451.031 587.207
Payments (-) (835.644) (986.133)Closing Balance 3.293.817 2.783.123
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incomethatrelatestothisexpensehasalsobeenrecordedsimilarlyinothercomprehensiveinco-me,asaresult,othercomprehensiveexpenseisTL180.375.
Previousterm,theamountof2.448TLisaccountedasactuarialgain.Asaresultofdeferredtaxincomewhichisrelatedtothisamountisaccountedasthesameasactuarialgainandthenewcomprehensiveincomebecame1.958TLbecauseofthistransaction.
TherecordedaccountsforthecurrentperiodTerminationIndemnityProvisionExpenses(Income)areasfollows:
25 ASSETS AND LIABILITIES RELATED TO CURRENT PERIOD TAX
Theassetsandliabilitiesrelatedtothecurrentperiodtaxareasfollows:
26 OTHER ASSETS AND LIABILITIES
OtherCurrentAssetsfortheyearsended,areasfollows:
January 1, 2015December 31, 2015
January 1, 2014December 31, 2014
General and Administrative Expenses (1.120.870) (1.098.568)Other Real Operating Expenses - - Income/ (Expense) Recorded in Profit and Loss (1.120.870) (1.098.568)Actuarial Losses (*) Recorded in Other Comprehensive Income (225.468) (2.448)Total Period Expense/ (Income) (1.346.338) (1.101.017)
January 1, 2015December 31, 2015
January 1, 2014December 31, 2014
Actuarial Losses Recorded in Other Comprehensive Income (225.468) (2.448)Tax Effect % 20 45.093 490Amount (180.375) (1.958)Minority Actuarial Gain 4.791 (5.940)Net Amount (175.584) (7.898)
Account Name December 31, 2015 December 31, 2014Prepaid Taxes (Temporary Taxes to be Refunded) - 2.366Total - 2.366
Account Name December 31, 2015 December 31, 2014Credit Note Income Accrual 22.931.348 28.922.641Deferred VAT 119.514 6.031.764Advances Given For Purchases 91.599 171.687Total 23.142.461 35.126.092
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27 SHAREHOLDERS’ EQUITY
i) Minority Shares / Minority Shares Profit / (Loss)
ii) Capital / Share Capital / Elimination Adjustments
ThesharecapitaloftheCompanyis56.000.000TLandthesharecapitalconsistof56.000.000per-shareswhicheachof1nominalvalue.ThepaidincapitaloftheCompany,whichis56.000.000TL,consistsofAGroupsharesissuedtothenameaspaid-incapitalis318,18TL,BGroupsha-resissuedtothebearaspaid-incapitalis55.999.681,82TL.AGroupofshareholdershavetherightstoappointonemoreofthehalfmemberoftheExecutiveBoard.Afterthe initialdividendisgivenfromthedistributionofprofit,AgroupShareholdershasalsotherightstoget%5oftheremainingpart.
TheCompanyaccepts theRegisteredSharecapitalSystemwith theJanuary20,2014datedpermissionofCapitalMarketBoardanddetermined theRegisteredShareCapitalceiling raisefrom75.000.000TLtoTL150.000.000.ThedecisionacceptedatRegularMeetingShareholdersoftheGroupdatedMay9,2014.ThepermissionoftheRegisteredShareCapitalceilingbelongstobetween2014-2018years.
ThesharecapitalshownintheconsolidatedbalancesheetisthesharecapitaloftheCompany.Theamountsofsharecapitalofthesubsidiariesandthesubsidiaryaccountareeliminatedmu-tually.
TheultimatecontrollingpartyoftheGroupisNevresErolBilecikandhisfamilymembers.
December 31, 2015 December 31, 2014
ShareholderShare
Percentage%
Share Amount
Share Percentage
%
Share Amount
Nevres Erol Bilecik % 35,93 20.120.551 % 35,93 20.120.551Alfanor 13131 AS % 20,00 11.200.000 % 20,00 11.200.000Public Shares % 41,70 23.351.994 % 41,70 23.351.994Other % 2,37 1.327.455 % 2,37 1.327.455Total % 100 56.000.000 % 100 56.000.000
Account Name December 31, 2015 December 31, 2014Minority Shares 29.196.804 19.124.871Total 29.196.804 19.124.871
Account NameJanuary 1, 2015
December 31, 2015January 1, 2014
December 31, 2014Opening 19.124.871 14.847.702Minority Shares Profit - (Loss) 10.229.210 4.577.990Foreign Exchange Translation Differences (152.486) (306.761)Actuarial Gains/Losses from Retirement Plans (4.791) 5.940Total 29.196.804 19.124.871
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iii) Capital Reserves
None.
iv) Accumulated Other Comprehensive Income or (Expense) not to be Reclassified in
Profit or Loss
TheanalysisAccumulatedOtherComprehensiveIncomeor(Expense)nottobeReclassifiedinProfitorLossareasfollows:
v) Accumulated Other Comprehensive Income or (Expense) to be Reclassified in Pro-
fit or Loss
TheForeignCurrencyExchangeDifferencesMovementScheduleisasfollows:
vi) Restricted Reserves from Profit
Restrictedreservesfromprofitsconsistoflegalreserves.
Thelegalreservesconsistoffirstandsecondlegalreserves,appropriatedinaccordancewiththeTurkishCommercialCode(TCC).TheTCCstipulatesthatthefirstlegalreserveisappropriatedoutofhistoricalstatutoryprofitsattherateof5%perannum,untilthetotalreservereaches20%oftheCompany’shistoricalpaid-insharecapital.Thesecondlegalreserveisappropriatedattherateof10%perannumofallcashdistributionsinexcessof5%ofthehistoricalpaid-insharecapital.UnderTCC,the legal reservesarenotavailable fordistributionunlesstheyexceed50%of thehistoricalpaid-insharecapitalbutmaybeusedtooffsetlossesintheeventthathistoricalgeneralreserveisexhausted.
Account Name 31 December 2015 31 December 2014January 1 Opening (198.766) (190.868)Actuarial Gains and (Losses) (Note:24) (225.468) (2.448)Tax Effect (Note:24, Note:35) 45.093 490Minority Share Actuarial Gains 4.791 (5.940)Actuarial Gains and Losses (Net) (374.350) (198.766)Revaluation Gains and Losses (374.350) (198.766)Other Gains and Losses - -Accumulated Other Comprehensive Income or (Expense) not to be Reclassified in Profit or Loss
(374.350) (198.766)
Account Name 31 December 2015 31 December 2014January 1 Opening 9.065.695 8.587.029Additions/Disposals 2.338.701 478.666End of Period Balance 11.404.396 9.065.695
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vii) Previous Years’ Profits / (Losses)
Profitsofpreviousyearsconsistofextraordinaryreserves,miscellaneousinflationdifferencesandprofitsofotherpreviousyears.InaccordancewiththeCMB’sdecisionnumbered7/242datedonFebruary25,2005;iftheamountofnetdistributableprofitbasedontheCMB’srequirementontheminimumprofitdistributionarrangements,whichiscomputedoverthenetprofitdeterminedbasedontheCMB’sregulations,doesnotexceedthenetdistributableprofitinthestatutoryaccounts,thewholeamountshouldbedistributed,otherwise;alldistributableamountinthestatutoryac-countsaredistributed.However,noprofitdistributionwouldbemadeifanyfinancialstatementspreparedinaccordancewiththeCMBoranystatutoryaccountscarryingnetlossfortheperiod.
Shareholders’Equityasofperiodsendedisasfollows:
Thenumberofwithdrawnsharesare162.402andthiswithrawntransactionoccuredin2013.
InthefinancialstatementspreparedaccordingtothestandardsoftheCMB,theGroup’scurrentperiodprofitwas53.656.587TL.TheCompany’sdistributableprofit instatutoryfinancialstate-ments for current period is 21.204.478 TLCompany’s distributable dividend (includes currentperiodprofit/loss)frompreviousperiodprofitsislimitedwiththisamount.Inflationadjustmentsonsharecapitalandrealestate’ssalesprofits,whichareheldinfundtobeaddedtothesharecapital,werenottakenintoconsiderationduringcalculationoftotaldistributableprofit.
Account Name December 31, 2015 December 31, 2014Share capital 56.000.000 56.000.000Capital Conversion Differences 1.064.323 1.064.323Withdrawn Shares (-) (634.290) (634.290)Other Comprehensive Income/Expense not to be Reclassified in Profit/Loss
(374.350) (198.766)
- Revaluation Gains/Losses (374.350) (198.766)Other Comprehensive Income/Expense to be Reclassified in Profit/Loss
11.404.396 9.065.695
- Hedging (Not:9) - - - Foreign Currency Translation Differences 11.404.396 9.065.695Restricted Reserves From Profit 12.605.752 9.957.469-Legal Reserves 11.458.702 8.810.419 - Profit from sale of affiliates except from Corporate Tax 1.147.050 1.147.050Previous Years’ Profits 53.656.587 52.370.539Net Period Loss/ Profit 44.920.203 25.173.457Parent Company Shareholders' Equity 178.642.621 152.798.427Minority Shares 29.196.804 19.124.871Total Shareholders’ Equity 207.839.425 171.923.298
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28 SALES AND COST OF SALES
SalesandcostofsalesdetailswhichbelongtwelvemonthsaccountingperiodoftheGroupareasfollows:
29 RESEARCH AND DEVELOPMENT, MARKETING, SALES & DIST-RIBUTION EXPENSES
Account NameJanuary 1, 2015
December 31, 2015January 1, 2014
December 31, 2014Domestic Sales 3.436.720.003 2.245.404.631 Foreign Sales 8.358.011 5.548.828 Other Sales 57.707.854 42.858.273 Sales Returns (-) (82.607.468) (62.705.256)Sales Discounts (-) (30.217.362) (20.252.020)Other Discounts (-) (5.270.158) (4.835.128)Net Sales 3.384.690.880 2.206.019.328 Cost of Sales (-) (3.231.879.393) (2.103.438.874)Gross Profit / (Loss) 152.811.487 102.580.454
Account NameJanuary 1, 2015
December 31, 2015
January 1, 2014December 31,
2014General Administrative Expenses (-) (30.868.074) (29.292.476)Marketing, Selling and Distribution Expenses (-) (30.272.070) (19.283.597)Total Operating Expenses (61.140.144) (48.576.073)
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30 EXPENSES RELATED TO THEIR NATURE
ExpensesRelatedtoTheirNatureoftheGroupasareasfollows:
Depreciationandamortisationexpensesandpersonnelexpensesarerecognisedinoperational
expenses.
31 OTHER OPERATING INCOME / EXPENSE
Account NameJanuary 1, 2015
December 31, 2015
January 1, 2014December 31,
2014Marketing, Selling and Distribution Expenses and General Administrative Expenses(-)
(61.140.144) (48.576.073)
- Personnel Expenses (32.716.923) (24.271.625) - Logistic and storage expenses (4.839.609) (4.466.015) - Depreciation expenses (2.559.107) (1.709.892) - Rental Expense (5.766.651) (4.947.357) - Communication Expense (324.769) (402.595) - Travelling Expenses (546.643) (694.834)- Transportation Expenses (1.064.368) (1.036.690) - Consultancy and Audit Expenses (828.911) (732.501) - Insurance Expenses (4.989.863) (3.199.044) - Advertisement Expense (597.260) (890.251)- Taxes, Duties, Charges Expenses (352.826) (1.217.130)- Provisions for termination indemnities expenses (1.120.869) (1.098.568) - Other Expenses (5.432.345) (3.909.571)Total Operating Expenses (61.140.144) (48.576.073)
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OtheroperatingIncome/Expensewhichbelongtwelvemonthsaccountingperiod,oftheGroupareasfollows:
32 INCOME/EXPENSES FROM INVESTMENT OPERATIONS
Financialincomefortheperiodsendedisasfollows:
33 FINANCIAL INCOME/ EXPENSES
FinancialIncomesandexpensesoftheGroupareasfollows:
Account NameJanuary 1, 2015
December 31, 2015
January 1, 2014December 31,
2014Other Income from Operations 97.669.633 88.177.079 Nullified Doubtful Receivables Provisions 1.041.156 - Insurance Claim Income 203.757 - Eliminated Interest from Sales 46.931.289 22.017.509 Current Period Accrued Income 9.221.669 5.500.410 Prior Period Rediscount Cancellation 4.331.755 4.965.175 Foreign exchange differences Income (trade receivables and payables)
35.290.885 55.417.032
Other Income and Profits 649.122 276.953Operating from the Other Expenses (-) (98.408.039) (83.649.695) Interest Eliminated from Purchases (40.641.027) (19.469.977) Current Period Rediscount Expenses (7.673.723) (4.331.755) Prior Period Rediscount Cancellation (5.501.940) (5.356.526) Foreign currency exchange losses (trade receivables and payables)
(43.911.360) (53.936.320)
Other Expenses and Losses (-) (679.989) (555.117)Other Income/Expense (net) (738.406) 4.527.384
Account NameJanuary 1, 2015
December 31, 2015
January 1, 2014December 31,
2014Inome from Investment Operatiıns 49.929 8.829Profit from Fixed Asset Sales 49.929 8.829Investment Operatiıns Expense (-) - (17.941)Other Income/Expense (Net) 49.929 (9.112)
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TherearenocapitalizedfinancialexpensesofCompanyforcurrentperiod.
34 FIXED ASSETS HELD FOR SALE PURPOSES AND DISCONTI-NUED OPERATIONS
None.
35 TAX ASSETS AND LIABILITIES
TheCompany’staxincome/(expense)arecomposedofcurrentperiod’scorporatetaxexpenseanddeferredtaxincome/(expense).
ThetaxassetsandliabilitiesoftheCompanyareasfollows:
i) Provision for Current Period Tax
CompaniescalculatetheirtemporarytaxesontheirquarterlyfinancialprofitsinTurkey.Corporateincomeasofthetemporarytaxperiods,temporarytaxrateof20%overthecorporateincomewascalculatedandprepaidtaxesdeductedfromtaxationonincome.
Account NameDecember 31,
2015December 31,
2014Provision for Current Period Tax (20.447.333) (9.692.518)Deferred Tax Income / (Expense) 6.265.115 1.940.986Total Tax Income / (Expense) (14.182.218) (7.751.532)
Account Name January 1, 20151 Ocak-
31 Aralık 2014Bank and Interest Expenses December 31, 2015 January 1, 2014Foreign Exchange Translation Expense December 31, 2014 (1.656.480)Total Financial Expenses (38.260.479) (22.584.911)
Account Name December 31, 2015 December 31, 2014Provision for Current Period Tax 20.447.333 9.692.518Prepaid Taxes (-) (14.849.304) (4.073.313)Total Net Tax Payable 5.598.029 5.619.205
Account NameJanuary 1, 2015
December 31, 2015
January 1, 2014December 31,
2014Interest Income December 31, 2015 797.947Foreign Exchange Translation Income 13.640.886 - Total Financial Income 17.584.771 797.947
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AccordingtoTurkishCorporateTaxLaw,lossescanbecarriedforwardtooffsetthefuturetaxableincomeforamaximumperiodof5years.Ontheotherhand,suchlossescannotbecarriedbacktooffsetprioyears’profits.
AccordingtoCorporateTaxLaw’sArticle:24,thecorporatetaxisimposedbythetaxpayer’staxreturns.Thereisnoprosedureforafinalanddefinitiveagreementontaxassessments.Annualcorporatetaxreturnsaresubmitteduntilthe25thofAprilfollowingtheclosingoftheaccountingyear.Moreover,thetaxauthoritieshavetherighttoexaminethetaxreturnsandtherelatedac-countingrecordswithinfiveyears.
IncomeWithholdingTax:
Inadditiontocorporatetax,Groupshouldalsocalculateincomewithholdingtaxonanydividendsandincomedistributed,exceptforresidentcompaniesinTurkeyreceivingdividendsfromresidentcompaniesinTurkeyandTurkishbranchesofforeigncompanies.Therateofwithholdingtaxhasbeenincreasedfrom10%to15%upontheCabinetdecisionNo:2006/10731,whichwaspublis-hedinOfficialGazetteonJuly23,2006.
ii) Deferred Tax
Thedeferredtaxassetandtaxliabilityisbasedonthetemporarydifferences,whicharisebetweenthe financialstatementspreparedaccording toCMB’saccountingstandardsandstatutory taxfinancialstatements.ThesedifferencesusuallyduetotherecognitionofrevenueandexpensesindifferentreportingperiodsfortheCMBstandardsandtaxpurposes.
Account Name
Dec. 31, 2015Accumulated
Temporary Differences
Dec. 31, 2015Deferred
Tax Assets / (Liabilities)
Dec. 31, 2014Accumulated
Temporary Differences
Dec. 31, 2014Deferred
Tax Assets / (Liabilities)
Fixed Assets (1.881.615) (376.323) (2.068.425) (413.685)Rediscount Expense 46.383.306 9.276.661 15.227.186 3.045.437 Provision for Termination Indemnity
3.293.817 658.763 2.783.123 556.625
Provision for Value Decrease in Inventories
5.300.462 1.060.092 3.204.256 640.850
Rediscount Income (8.092.708) (1.618.542) (4.785.172) (957.034)Derivatives 165.962 33.192 (165.039) (33.008)Other 1.554.326 310.867 976.583 195.317 Deferred Tax Asset / Liability 9.344.710
3.034.502
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Thetaxprovisionreconciliationforthe12-monthperiodisasfollows:
36 NET EARNINGS PER SHARE
Earningspershareintheincomestatementarecalculatedbydividingnetincomebytheweightedaveragenumberofcommonsharesoutstandingfortheperiod.Company’searningspersharearecalculatedfortheperiodsareasfollows:
December 31, 2015
December 31, 2014
Deferred Tax Asset / Liability at the beginning of the period 3.034.502 1.095.814
Minority Actuarial Gains and Losses 43.895 1.975Foreign Currency Translation Differences 1.198 (1.485)Deferred Tax Income / (Expense) - (2.788)Hedging Fund 6.265.115 1.940.986Deferred Tax Asset / Liability at the end of the period - -Deferred Tax Asset / Liability at the end of the period 9.344.710 3.034.502
January 1, 2015December 31, 2015
January 1, 2014December 31, 2014
Net Profit For The Period / (Loss) 44.920.203 25.173.457Weighted Average Number of Common Shares Outstanding 56.000.000 56.000.000Earnings / (Loss) per Share 0,802146 0,449526 Corresponding to the Preference Shares Gain 7.058,93 3.955,85The earnings attributable to Common Shares 0,762043 0,427052
Account NameDecember 31,
2015December 31,
2014Deferred Tax Receivables 9.471.225 3.244.190Deferred Tax Payables (-) (126.515) (209.688)Deferred Tax Recei./Payable. 9.344.710 3.034.502
Reconciliation of Tax ProvisionJanuary 1, 2015
December 31, 2015 January 1, 2014
December 31, 2014 Profits obtained from continuing operations 69.331.631 37.502.979Income tax rate %20 (13.866.326) (7.500.596)Tax effect: - --The effect of equity items due to foreign currency translation (437.243) (34.381)- Non-Deductible Income/Expenses 121.351 (216.555)Income Statement Tax Provision Expense (14.182.218) (7.751.532)
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37 EXPLANATIONS OF RELATED PARTIES
a) Receivables and Payables of Related Parties:
January 1, 2015– December 31, 2015
January 1, 2014– December 31, 2014
Therearenoguaranteesormortgagesfortherelatedpartyreceivablesorpayables.Thereisnoprovisionmadefordoubtfulreceivablesfortherelatedpartyreceivables.İnfinA.Ş.isthesubsidiarywhichisnotincludedintheconsolidation,NeteksDışTicaretA.Ş.istheaffiliateevaluatedbyequitymethod,Desbil,DespecandHomendareotherrelatedparties.
Therelatedpartybalancesgenerallyconsistfromtradetransactions.Butinsomeconditionstherearecashusagesbetweentherelatedparties.Thebalancesconsistfromnon-tradetransactionsareclassifiedasnon-tradereceivablesorpayablesinthefinancialstatements.Interestiscalcu-latedforthebalancesandinvoicedquarterly.AsofDecember31,2015theinterestrateforUSDis%3,5EURis%3,5andTLis%14.(December31,2014USDis%2,5EURis%2,5andTLis%10)
December 31, 2014Receivables Liabilities
Commercial Non-Commercial Commercial Non-Commercial Shareholders - - - -Neteks A.Ş. 441.785 - 7.673 -Homend A.Ş. 104 5.763 8.039 -Desbil A.Ş. 27.945 269.235 - -İnfin A.Ş. 1.824.045 - - -Neteks Dış Tic. - - 27 -Despec A.Ş. 318.724 - 157 -Total 2.612.603 274.998 15.896 -
December 31, 2015Receivables Liabilities
Commercial Non-Commercial Commercial Non-Commercial Shareholders - - - -Neteks A.Ş. 731.992 - 9.822 -Homend A.Ş. 8.007 1.927 209 -Desbil A.Ş. 49.368 344.821 - -İnfin A.Ş. 1.109.903 - 152.373 -Neteks Dış Tic. 265 - - -Despec A.Ş. 510.642 - - -Total 2.410.177 346.748 162.404 -
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b) Purchases from Related Parties and Purchases from Related Parties:
January 1, 2015– December 31, 2015
January 1, 2014– December 31, 2014
Sales to Related PartiesGoods and
Service SalesCost
Allocation
Interest and Foreign Exchange Income
Total Expense/ Purchases
Desbil A.Ş. - 343 62.298 62.641 Despec A.Ş. 2.148.550 2.063.151 46.521 4.258.222 Homend A.Ş. 61.762 251.398 5.581 318.741 İnfin A.Ş. 6.671.322 36.161 187.646 6.895.129 Neteks A.Ş. 1.228.054 5.953.386 251.478 7.432.918 TOTAL 10.109.688 8.304.439 553.524 18.967.651
Purchases From Related PartiesGoods and
Service SalesCost
Allocation
Interest and Foreign Exchange Income
Total Expense/ Purchases
Desbil A.Ş. - - 18.591 18.591 Despec A.Ş. 892.764 123.860 39.837 1.056.461 Homend A.Ş. 50.294 62.065 1.562 113.921 İnfin A.Ş. 272.072 414.899 1.122.052 1.809.023 Neteks A.Ş. 503.268 57.094 375.039 935.401 TOTAL 1.718.398 657.918 1.557.081 3.933.397
Sales to Related PartiesGoods and
Service SalesCost
Allocation
Interest and Foreign Exchange Income
Total Expense/ Purchases
Desbil A.Ş. - - 116.626 116.626 Despec A.Ş. 3.029.824 1.359.166 91.275 4.480.265 Homend A.Ş. 26.354 20.337 1.026 47.717 İnfin A.Ş. 7.444.487 - 400.627 7.845.114 Neteks Dış Ltd.Şti. - 254 - 254 Neteks A.Ş. 238.661 4.985.073 422.060 5.645.794 TOTAL 10.739.326 6.364.830 1.031.614 18.135.770
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c) Benefits and wages provided to Management Staff
BenefitsandwagesprovidedtoManagementStaffcontainwagesofgeneralmanagerandvicegeneralmanagers.
38 NATURE AND LEVEL OF RISKS ARISING OUT OF FINANCIAL INSTRUMENTS
(a) Capital Risk Management
TheGroup,whiletryingtomaintainthecontinuityofitsactivitiesincapitalmanagementononehand,aimstoincreaseitsprofitabilitybyusingthebalancebetweendebtsandresourcesontheotherhand.ThecapitalstructureoftheGroupconsistsofdebtscontainingthecreditsexplainedinnote8,cashandcashequivalentsexplainedinnote6andresourceitemscontainingrespectivelyissuedcapital,capitalreserves,profitreservesandprofitsofpreviousyearsexplainedinnote27.
Risks,associatedwitheachcapitalclass,andthecapitalcostareevaluatedbytheseniorma-nagement.Itisaimedthatthecapitalstructurewillbestabilizedbymeansofnewborrowingsorrepayingtheexistingdebtsaswellasdividendpaymentsandnewshareissuancesbasedontheseniormanagementevaluations.
TheGroupfollowsthecapitalbyusingdebt/totalcapitalrate.Thisrate isfoundbydividingthenetdebtbytotalcapital.Thenetdebtiscalculatedbyexcludingthecashandcashequivalentamountsfromthetotaldebtamount(includingcredits,leasingandcommercialdebtsasindicatedinthebalancesheet).Totalcapital iscalculatedasresourcesplusnetdebtas indicated inthebalancesheet.
Purchases From Related PartiesGoods and
Service SalesCost
Allocation
Interest and Foreign Exchange Income
Total Expense/ Purchases
Desbil A.Ş. - - 34.295 34.295 Despec A.Ş. 637.133 207.302 49.214 893.649 Homend A.Ş. 47.879 7.732 2.431 58.042 İnfin A.Ş. 3.818.971 - 370.908 4.189.879 Neteks A.Ş. 486.339 306.433 268.747 1.061.519 TOTAL 4.990.322 521.467 725.595 6.237.384
Account NameJanuary 1, 2015–
December 31, 2015 January 1, 2014–
December 31, 2014Short term benefits provided to employees 5.703.696 3.633.231Employment Termination Benefits - -Other long term benefits - -Total 5.703.696 3.633.231
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GeneralstrategyoftheGroupbasedonresourcesisnotdifferentfromthepreviousyears.
(b) Important Accounting Policies
TheCompany’s importantaccountingpoliciesrelating to financial instrumentsarepresented intheNote2.
(c) Risks Exposed
Becauseofitsoperations,theGroupisexposedtofinancialrisksrelatedtoexchangeratesandinterestrates.TheGroupasitholdsthefinancialinstrumentsalsocarrytheriskofotherpartynotmeetingtherequirementsoftheagreement.MarketrisksseenatthelevelofGrouparemeasuredaccordingtothesensitivityanalysisprinciple.MarketrisksfacedbytheCompanyincurrentperiodortheprocessofundertakingthefacedrisksortheprocessofthemeasureoffacedriskswasnotchangedaccordingtopreviousyear.
(c1) Foreign currency risk management
Transactions in foreign currencies expose theGroup to foreign currency risk. This riskmainlyarisesfromfluctuationofforeigncurrencyusedinconversionofforeignassetsandliabilitiesintoTurkishLira.Foreigncurrencyriskarisesasaresultoftradingtransactionsinthefutureandthedifferencebetweentheassetsandliabilitiesrecognized.
TheCompanyismainlyexposedtoforeigncurrencyriskduetodeposits,receivablesandpayab-les
December 31, 2015 December
31, 2014Total Debt 1.178.875.567 887.814.192 Minus (-) Cash and Equivalent (136.763.531) (111.965.405)Net Debt 1.042.112.036 775.848.787 Total Shareholder’s Equity 207.839.425 171.923.298 Total Share capital 1.249.951.461 947.772.085 Rate % (Net Debt / Total Share Capital) 83,37% 81,86%
2015 Annual Report
109
Tabl
e of
For
eign
Exc
hang
e Po
siti
onCu
rren
t Per
iod
Prev
ious
Per
iod
TL V
alue
USD
EURO
TL V
alue
USD
EURO
1. T
rade
Rec
eiva
bles
3
06.5
44.3
33
1
04.3
64.9
76
973
.290
3
01.8
72.2
12
129
.503
.650
5
55.2
51
2a. M
onet
ary
Fina
ncia
l Ass
ets
86.8
92.4
21
2
9.69
6.57
6
1
72.0
34
74.
508.
170
31.
818.
951
256
.392
2b. N
on-M
onet
ary
Fina
ncia
l Ass
ets
-
-
-
-
-
-
3. O
ther
9.8
27.8
07
3.3
78.1
52
1
.729
1
0.96
9.85
4 4
.730
.628
-
4. C
urre
nt A
sset
s To
tal (
1+2+
3)
403
.264
.560
137
.439
.704
1.1
47.0
53
387
.350
.236
1
66.0
53.2
29
811
.643
5. T
rade
Rec
eiva
bles
-
-
-
-
-
-
6a. M
onet
ary
Fina
ncia
l Ass
ets
-
-
-
-
-
-
6b. N
on-M
onet
ary
Fina
ncia
l Ass
ets
-
-
-
-
-
-
7. O
ther
-
-
-
-
-
-
8. F
ixed
Ass
ets
Tota
l (5+
6+7)
-
-
-
-
-
-
9. T
otal
Ass
ets
(4+
8)
403
.264
.560
137
.439
.704
1.1
47.0
53
38
7.35
0.23
6
1
66.0
53.2
29
8
11.6
43
10. T
rade
Pay
able
s
(276
.351
.083
)
(93.
225.
015)
(1
.664
.788
)
(
349.
188.
499)
(
149.
994.
008)
(4
84.7
71)
11. F
inan
cial L
iabi
lities
(
42.6
26.6
57)
(1
4.63
5.95
2)
(
22.3
95)
(3
5.03
1.32
9)
(1
5.10
6.87
4)
-
12a.
Oth
er M
onet
ary
Liab
ilitie
s
(11
.965
.028
)
(4
.114.
447)
(586
)
(10.
034.
730)
(4.
327.
367)
-
12b.
Oth
er N
on-M
onet
ary
Liab
ilitie
s
-
-
-
-
-
-
13. T
otal
Sho
rt T
erm
Lia
bilit
ies
(10+
11+1
2)
(330
.942
.767
)
(111
.975
.414
)
(1.6
87.7
69)
(394
.254
.558
)
(16
9.42
8.24
9)
(484
.771
)
14. T
rade
Pay
able
s
-
-
-
-
-
-
15. F
inan
cial L
iabi
lities
-
-
-
(82
5.40
5)
(
355.
947)
-
16a.
Oth
er M
onet
ary
Liab
ilitie
s
-
-
-
-
-
-
16b.
Oth
er N
on-M
onet
ary
Liab
ilitie
s
-
-
-
-
-
-
17. T
otal
Lon
g Te
rm L
iabi
litie
s (1
4+15
+16)
-
-
-
(82
5.40
5)
(
355.
947)
-
18. T
otal
Lia
bilit
ies
(13+
17)
(3
30.9
42.7
67)
(1
11.9
75.4
14)
(1
.687
.769
)
(3
95.0
79.9
63)
(
169.
784.
196)
(4
84.7
71)
19. N
et A
sset
/ (Li
abili
ty) P
ositi
on o
f Der
ivat
ive
Inst
rum
ents
off
the
Bala
nce
Shee
t (19
a-19
b)
(32
.319
.183
)
(11.
115.
416)
-
(1
0.18
7.83
8) (4
.393
.392
) -
19a.
Tot
al Am
ount
of H
edge
d As
sets
-
-
-
- -
-
19b.
Tot
al Am
ount
of H
edge
d Li
abilit
ies
32.3
19.1
83
1
1.115
.416
-
10.1
87.8
38 4
.393
.392
-
20. N
et F
orei
gn E
xcha
nge
Asse
t / (L
iabi
lity)
Pos
ition
(9-1
8+19
)
40
.002
.610
14.
348.
875
(540
.716
) (1
7.91
7.56
5) (8
.124
.359
)32
6.87
2
21. M
onet
ary
Item
s N
et F
orei
gn E
xcha
nge
Asse
t / (l
iabi
lity)
pos
ition
(1+
2a+
5+6a
-10-
11-1
2a-1
4-15
-16a
)
72
.321
.793
25.
464.
291
(540
.716
) (1
8.69
9.58
1) (8
.461
.595
) 3
26.8
72
22. T
otal
Fai
r Val
ue o
f Fin
anci
al In
stru
men
ts U
sed
for t
he F
orei
gn E
xcha
nge
Hedg
e
--
-
23. T
he A
mou
nt o
f Hed
ged
part
of F
orei
gn E
xcha
nge
Asse
ts
(32
.485
.145
)
(11.
172.
495)
-
(1
0.35
2.87
7) (1
1.95
0.38
0) -
23. T
he A
mou
nt o
f Hed
ged
part
of F
orei
gn E
xcha
nge
Liab
ilitie
s
-
-
-
-
-
-
23. E
xpor
t
8
.358
.011
-
-
18.0
41.1
64 -
-
24. I
mpo
rt
229
.941
.180
-
-
431.
627.
478
-
-
2015 Annual Report
110
CRED
IT T
YPES
INCU
RRED
IN R
ESPE
CT O
FFIN
AN
CIA
L IN
STRU
MEN
T TY
PES
CURR
ENT
PERI
OD
Rece
ivab
les
Foot
Not
eBa
nk D
epos
its
and
Repo
sFo
otN
ote
Trad
e Re
ceiv
able
sO
ther
Rec
eiva
bles
Rela
ted
Part
yO
ther
Rela
ted
Part
yO
ther
Max
imum
cre
dit r
isk
incu
rred
as
of th
e da
te o
f rep
ortin
g (A
+B+
C+D+
E) (*
)2.
612.
603
633.
827.
523
274.
998
44.5
09.9
71
111.
146.
571
-
The
part
of m
axim
um ri
sk s
ecur
ed b
y gu
aran
tee
etc.
- 33
0.43
8.75
6-
-
A. N
et b
ook
valu
e of
fina
ncia
l ass
ets
whi
ch a
re u
ndue
or w
hich
did
not
dec
line
in v
alue
(2)
2.61
2.60
363
0.40
1.90
527
4.99
844
.509
.971
10-1
1 1
11.1
46.5
716
B. N
et b
ook
valu
e of
ass
ets,
ove
rdue
but
did
not
dec
line
in v
alue
. (6)
-
2.85
4.42
6-
-10
-11
-6
- The
par
t sec
ured
by
guar
ante
e et
c.
-
57
1.19
2-
--
C. N
et b
ook
valu
es o
f ass
ets
decl
ined
in v
alue
(4)
-57
1.19
2-
-10-11
-6
- O
verd
ue (g
ross
boo
k va
lue)
-
-
-
-
-
-
Dec
line
in v
alue
(-)
-
9.38
9.83
9
-
-
10-1
1
-
6
-
The
part
of n
et v
alue
sec
ured
by
guar
ante
e et
c.-
(9.3
89.8
39)
--
10-11
-6
- U
ndue
(gro
ss b
ook
valu
e)-
-10-11
-6
-
Dec
line
in v
alue
(-)
-
-
-
-
10-1
1
-
6
-
The
part
of n
et v
alue
sec
ured
by
guar
ante
e et
c.10-11
-6
D. E
lem
ents
con
tain
ing
cred
it ris
k of
f the
bal
ance
she
et (5
)10-11
-6
PREV
IOUS
PER
IOD
Rece
ivab
les
Foot
Not
eBa
nk D
epos
its
and
Repo
sFo
otN
ote
Trad
e Re
ceiv
able
sO
ther
Rec
eiva
bles
Rela
ted
Part
yO
ther
Rela
ted
Part
yO
ther
Max
imum
cre
dit r
isk
incu
rred
as
of th
e da
te o
f rep
ortin
g (A
+B+
C+D+
E) (*
)2.
350.
908
444.
953.
219
579.
095
264.
944
73
.470
.493
- T
he p
art o
f max
imum
risk
sec
ured
by
guar
ante
e et
c.-
223.914.676
- -
A. N
et b
ook
valu
e of
fina
ncia
l ass
ets
whi
ch a
re u
ndue
or w
hich
did
not
dec
line
in v
alue
(2)
2.35
0.90
8 44
1.52
8.59
257
9.09
5 26
4.94
4 10
-11
73
.470
.493
6
B. N
et b
ook
valu
e of
ass
ets,
ove
rdue
but
did
not
dec
line
in v
alue
. (6)
-
2.94
9.10
0 -
-10
-11
-6
- The
par
t sec
ured
by
guar
ante
e et
c.
-
47
5.52
7 -
--
C. N
et b
ook
valu
es o
f ass
ets
decl
ined
in v
alue
(4)
-475.527
--
10-11
-6
- O
verd
ue (g
ross
boo
k va
lue)
-
-
-
-
-
-
Dec
line
in v
alue
(-)
-
9.10
6.07
2
-
-
10-1
1
-
6
-
The
part
of n
et v
alue
sec
ured
by
guar
ante
e et
c.-
(9.106.072)
--
10-11
-6
- U
ndue
(gro
ss b
ook
valu
e)-
-10-11
-6
-
Dec
line
in v
alue
(-)
-
-
-
-
10-1
1
-
6
-
The
part
of n
et v
alue
sec
ured
by
guar
ante
e et
c.10-11
-6
D. E
lem
ents
con
tain
ing
cred
it ris
k of
f the
bal
ance
she
et (5
)10-11
-6
c2 )
Cre
dit
Ris
k an
d M
anag
emen
t
(*) D
urin
g th
e as
sess
men
t, th
e el
emen
ts s
uch
as g
uara
ntee
s re
ceiv
ed w
hich
can
incr
ease
the
cre
dib
ility
are
not
take
n in
to c
onsi
der
atio
n.
2015 Annual Report
111
(c3) Management of interest rate risk
Group’sfixed interest financial instruments liabilitiesarestated inNote:8.Group’sfixed interestassets(depositetc.)arestatedinNote:6.
Ifthereisa%1increaseonTLinterestrateandothervariablesarefixedasofDecember31,2015,profitbeforetaxwillbelesswiththeamountof1.988.054TL.(December31,2014:TL322.783)ImportantpartofGroup’sfinancialassetsandliabilitieswithfixedinterestrateareshort-term.Con-sequently the financialassetsand liabilitieswith fixed interest rateare taken intoconsideration.Thereisnointerestrateriskifonlyfinancialassetsandliabilitieswithfloatingratearetakenintoconsideration.
(c4) Liquidity risk management
TheGrouptriestomanagetheliquidityriskbymaintainingthecontinuationofsufficientfundsandloanreservesbymeansofmatchingthefinancialinstrumentsandtermsofliabilitiesbyfollowingthecashflowregularly.
Liquidity Risk Tables
Prudentliquidityriskmanagementsignifiesmaintainingsufficientcash,theutilityoffundsourcesbysufficientcredittransactionsandtheabilitytocloseoutmarketpositions.
Riskofexistingorfuturepossibledebtrequirementsbeingfundableismanagedbymaintainingthecontinuationofavailabilityofsufficientnumbersandhighqualitycreditproviders.
Thetablebelowindicatesthetermdivisionsofderivativeandnon-derivativefinancialliabilitiesoftheGroupinTLcurrency.
Table of Interest Position Current Period Previous PeriodFixed Interest Financial InstrumentsFinancial Assets 123.616.698 101.128.147Financial Liabilities 322.422.080 133.406.402Floating Rate Financial InstrumentsFinancial Assets - -Financial Liabilities - -
Contract Terms Defter DeğeriSözleşme
Uyarınca Nakit Çıkışlar Toplamı
3 Aydan Kısa 3-12 ay arası 1-5 yıl arası 5 yıldan uzun
Non-derivative Financial Liabilities
1.049.100.217 1.083.194.702 847.085.152 156.365.994 79.743.556 -
Bank Loans 321.300.021 346.134.428 110.900.185 155.578.308 79.655.935 - Debt Instrument Issue - - - - - - Financial Lease Liabilities 1.122.059 1.160.469 285.162 787.686 87.621 - Trade Payables 719.866.859 729.088.527 729.088.527 - Other Payables 6.811.278 6.811.278 6.811.278 - Other - - - - - -
2015 Annual Report
112
(*)Theamountof forward transactionsconsistsof 11.115.416USDtoTL. In liabilitycalculation,derivativecashoutflowiscalculatedusingexchangeratesvalidattheendofterm.DerivativecashinflowiscalculatedusingtheexchangeratevalidonDecember31,2015.Actualprofitorlosswillariseattheendofterm.
December 31, 2014
(*)Theamountofforwardtransactionsconsistsof4.464.564USD.Inliabilitycalculation,derivativecashoutflowiscalculatedusingexchangeratesvalidattheendofterm.DerivativecashinflowiscalculatedusingtheexchangeratevalidonDecember31,2014.Actualprofitorlosswillariseattheendofterm.
Contract Terms Book Value
Cash Outflows Total As Per the
Agreement
Less than 3 Months 3-12 Months 1-5 Years More than 5
Years
Derivative Financial Liabilities
165.039 126.130 126.130 - - -
Derivative Cash Inflows 10.352.877 10.352.877 10.352.877 - - -Derivative Cash Outflows (10.187.838) (10.226.747) (10.226.747) - - -
Contract Terms Book Value
Cash Outflows Total As Per the
Agreement
Less than 3 Months 3-12 Months 1-5 Years More than 5
Years
Derivative Financial Liabilities
(165.962) (440.675) (440.675) - - -
Derivative Cash Inflows 32.319.184 32.319.184 32.319.184 - - -Derivative Cash Outflows (32.485.146) (32.759.859) (32.759.859) - - -
Contract Terms Book Value
Cash Outflows Total As Per the
Agreement
Less than 3 Months 3-12 Months 1-5 Years More than
5 Years
Non-derivative Financial Liabilities
820.978.682 837.662.610 747.526.700 40.159.334 49.976.576
Bank Loans 131.536.655 142.401.805 54.191.450 39.371.648 48.838.707 -Debt Instrument Issue - - - - - -Financial Lease Liabilities 1.869.747 2.188.117 262.562 787.686 1.137.869 -Trade Payables 683.603.073 689.103.481 689.103.481 - - -Other Payables 3.969.207 3.969.207 3.969.207 - - -Other - - - - - -
2015 Annual Report
113
c5 Analyses of other Risks
Risks Related to Financial Instruments, Stocks Etc.
Grouphasnostocksorsimilarmarketablesecuritiesevaluatedbyfairvalueinthecurrentperiod.
39 FINANCIAL INSTRUMENTS (DECLARATIONS WITHIN THE CONTEXT OF FAIR VALUE AND HEDGING)
Aims at financial risk management
ThefinancedepartmentoftheGroupisresponsibleformaintainingtheaccesstofinancialmar-ketsregularlyandobservingandmanagingthefinancialrisksincurredinrelationwiththeactivitiesoftheGroup.Thesaidrisksincludemarketrisk(includingforeignexchangerisk,fairinterestrateriskandpricerisk),creditrisk,liquidityriskandcashreceivingrisk.
Fair Value of Financial Instruments
Fairvalueistheamountforwhichafinancialinstrumentcouldbeexchangedexceptcompulsorysaleorliquidationprocessbetweenwillingpartiesanditisdeterminedwithitsmarketvalueifthereisaquotedprice.
TheGrouphasdeterminedtheestimatedvaluesoffinancialinstrumentsbytakingintoconside-rationthepresentmarketinformationandpropervaluationmethods.Butdeterminationofmarketinformationandestimationoffairvaluerequireinterpretationanddiscernment.Consequentlytheestimationspresentedarenotalwaystheindicatorsofthevaluescouldberealizedfromacurrentmarkettransaction.
Themethodsandassumptionsusedforthedeterminationofthefairvalueofthefinancialinstru-mentsareasfollows;
Monetary Assets
BalancesdenominatedinforeigncurrenciesareconvertedintoTurkishLirabytheexchangeraterulingatthebalancesheetdate.Itispredictedthatthesebalancesareconsideredtoapproximatetotheirnetbookvalue.
Financialinstrumentsinwhichcashandcashequivalentsareincludedarecarriedbytheircostvalueanditispredictedthattheirnetbookvalueareconsideredtoapproximatetotheirfairvaluesduetotheirshort-termmaturity.
Itispredictedthatthenetbookvalueoftradereceivableswithprovisionsmadefordoubtfulrece-ivablespresenttheirfairvalues.
2015 Annual Report
114
Monetary Liabilities
BalancesdenominatedinforeigncurrenciesareconvertedintoTurkishLirabytheexchangeraterulingatthebalancesheetdate.Itispredictedthatthesebalancesareconsideredtoapproximatetotheirnetbookvalue.
Itispredictedthatnetbookvalueofbankloansandothermonetaryliabilitiesareconsideredtoapproximatetheirfairvaluesduetotheirshort-termmaturity.
Itispredictedthatthenetbookvalueoftradepayablespresenttheirfairvaluesduetotheirshort-termmaturity.
Fair Value Assessment:
TheGrouphasappliedtheamendmentsinIFRS7relatedwiththefinancialinstrumentsevaluatedbyfairvalueinthebalancesheeteffectivefromthedateofJanuary1,2009.Theamendmentinfairvaluecalculationsisdisclosedinaccordancewiththestepsofhierarchyforfairvaluementionedbelow;
Level1:Quotedpricesinactivemarketsforidenticalassetsandliabilities.
Level2:InputsotherthanquotedpricesincludedwithinLevel1thatareobservablefortheassetorliability,eitherdirectly(i.e.asprices)orindirectly(i.e.derivedfromprices).
Level3:Inputsfortheassetorliabilitythatisnotbasedonobservablemarketdata.
ItispredictedthatnetbookvalueofforeigncurrencybalanceswhichareconvertedtoTLattheendoftheyearareconsideredtoapproximatetotheirfairvalues.
TheGrouppresentsitsfinancialinvestmentswiththeirfairvaluesinthefinancialstatementsasofDecember31,2015andDecember31,2014.(Level2)(Note:7)
Itisacceptedthatthediscountednetbookvalueoffinancialassetssuchascashandcashequ-ivalentspresenttheirfairvaluesduetotheirshort-termmaturity.
Tradereceivablesandpayablesaremeasuredattheirdiscountedcostusingtheeffectiveinterestmethodanditisacceptedthatthenetbookvalueofthesebalancesareconsideredtoapproxi-matetheirfairvalues.
40 SUBSEQUENT EVENTS
None.
41 OTHER ISSUES
None.