ÇUHADAROĞLU METAL SANAYİ VE PAZARLAMA A.Ş. AND ITS …€¦ · CONVENIENCE TRANSLATION INTO...
Transcript of ÇUHADAROĞLU METAL SANAYİ VE PAZARLAMA A.Ş. AND ITS …€¦ · CONVENIENCE TRANSLATION INTO...
ÇUHADAROĞLU METAL SANAYİ VE PAZARLAMA A.Ş. AND ITS
SUBSIDIARY
CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE YEAR
ENDED DECEMBER 31, 2019 TOGETHER WITH INDEPENDENT
AUDITORS’ REPORT
(Convenience translation of the independent auditors’ report and consolidated financial
statements originally issued in Turkish)
CONVENIENCE TRANSLATION INTO ENGLISH OF INDEPENDENT AUDITOR’S REPORT
ORIGINALLY ISSUED IN TURKISH
INDEPENDENT AUDITOR’S REPORT
To the Board of Directors of Çuhadaroğlu Metal Sanayi ve Pazarlama A.Ş.
1) Opinion
We have audited the accompanying consolidated financial statements of Çuhadaroğlu Metal Sanayi ve
Pazarlama A.Ş (the “Company”) and its subsidiary (collectively referred to as the “Group”), which
comprise the consolidated statement of financial position as at 31 December 2019 and the consolidated
statement of profit or loss, consolidated statement of other comprehensive income, consolidated statement
of changes in equity and consolidated statement of cash flows for the year then ended and the notes to the
consolidated financial statements and a summary of significant accounting policies and consolidated
financial statement notes.
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial
position of the Group as at 31 December 2019, and its financial performance and its cash flows for the
year then ended in accordance with Turkish Financial Reporting Standards (“TFRS”).
2) Basis For Opinion
Our audit was conducted in accordance with the Standards on Independent Auditing (the “SIA”) that are
part of Turkish Standards on Auditing issued by the Public Oversight Accounting and Auditing Standards
Authority (the “POA”). Our responsibilities under these standards are further described in the “Auditor’s
Responsibilities for the Audit of the Consolidated Financial Statements” section of our report. We hereby
declare that we are independent of the Group in accordance with the Ethical Rules for Independent
Auditors (the “Ethical Rules”) and the ethical requirements regarding independent audit in regulations
issued by POA that are relevant to our audit of the financial statements. We have also fulfilled our other
ethical responsibilities in accordance with the Ethical Rules and regulations. We believe that the audit
evidence we have obtained during the independent audit provides a sufficient and appropriate basis for
our opinion.
3) Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the consolidated financial statements of the current period. Key audit matters were addressed in
the context of our independent audit of the consolidated financial statements as a whole, and in forming
our opinion thereon, and we do not provide a separate opinion on these matters.
.
Key Audit Matters How our audit addressed the key audit matter
Trade Receivables
Explanations on the Group’s trade receivables are
included in Note 9. Trade Receivables consist of
28% of the Company’s total assets in financial
statements as of 31 December 2019. The risk of
material misstatement of completeness and
assestment of the regarding component is
considered as a significant risk due to vast number
of subaccounts and transactions which compose
the regarding component.
Within the scope of our audit work, the procedures
we have taken to address the risk of material
misstatement include the following:
Group’s trade receivables balances have
been tested by sending letters of
confirmation after sampling process,
Compliance of invoices issued by the
Group with the accounting records have
been controlled by sampling of issued
invoices,
Compliance of the collection of Group’s
trade receivables within the related fiscal
year with the accounting records have
been controlled by procuring payment
receipts,
Group’s rediscount and trade receivables
turnover rate works have been controlled,
Group’s doubtful receivables components
have been reviewed and tested to
determine whether there are any doubtful
receivables except the regarding
components,
Currency valuations on Group’s foreign
currency receiavbles have been controlled.
Inventories
Explanations on the Group’s inventories are
included in Note 12. Company’s inventories
possess a significant value as they consist of 28%
of company’s total assets in the financial
statements as of 31 December 2019. This, makes
the efforts to control the group’s stocktaking
process, whether the stock costs have been
calculated accurately and to determine whether
there are worthless inventories,important.The risk
of material misstatement of placing inventories in
financial statements and completeness and
assestment of the regarding component is
considered as a significant risk.
Within the scope of our audit work, the procedures
we have taken to address the risk of material
misstatement include the following:
The physical presence, unrecorded exits,
storage conditions, usability of inventories
have been controlled during the year-end
stocktaking process that was observed by
us,
Representing of sales and deliveries in
legal books have been controlled by
comparing sales invoices in accounting
records with related delivery notes,
Previous and current periods’ inventories’
amounts have been compared to control
whether adjustments for inactive
inventories components have been
represented in financial statements.
The representing of impairments regarding
finished goods and trade goods in financial
statements have been controlled by
comparing the unit prices in company’s
inventory with the unit prices in
company’s sales invoices.
The representing of impairments regarding
raw material components in financial
statements have been controlled by
comparing the unit prices in company’s
inventory with the unit prices in
company’s purchase invoices.
4) Responsibilities of Management and Those Charged with Governance for the Consolidated
Financial Statements
The Group management is responsible for the preparation and fair presentation of the consolidated
financial statements in accordance with TFRS, and for such internal control as management determines is
necessary to enable the preparation of consolidated financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Group’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless management either intends to liquidate the Group or to
cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Group’s financial reporting process.
5) Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Responsibilities of independent auditors in an independent audit are as follows:
Our aim is to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an independent auditor’s report that
includes our opinion. Reasonable assurance expressed as a result of an independent audit conducted in
accordance with SIA is a high level of assurance but does not guarantee that a material misstatement will
always be detected. Misstatements can arise from fraud or error. Misstatements are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of these consolidated financial statements.
As part of an independent audit conducted in accordance with SIA, we exercise professional judgment
and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement in the consolidated financial statements, whether
due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. (The risk of not detecting
a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal
control.)
Assess the internal control relevant to the audit in order to design audit procedures that are appropriate
in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis, based on the audit
evidence obtained, whether a material uncertainty exists related to events or conditions that may cast
significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in
the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion.
Our conclusions are based on the audit evidence obtained up to the date of our independent auditor’s
report. However, future events or conditions may cause the Group to cease to continue as a going
concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements,
including the disclosures, and whether the consolidated financial statements represent the underlying
transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the consolidated financial statements. We
are responsible for the direction, supervision and performance of the group audit. We remain solely
responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope
and timing of the audit and significant audit findings, including any significant deficiencies in internal
control that we identify during our audit.
We have reported to those responsible for senior management that we comply with ethical requirements
for independence. In addition, we have communicated all relations and other issues that may be
considered to have an impact on independence, and any relevant measures, to those charged with
governance.
From the matters communicated with those charged with governance, we determine those matters that
were of most significance in the audit of the consolidated financial statements of the current period and
are therefore the key audit matters. We describe these matters in our auditor’s report unless law or
regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we
determine that a matter should not be communicated in our report because the adverse consequences of
doing so would reasonably be expected to outweigh the public interest benefits of such communication
Other Responsibilities Arising From Regulatory Requirements
Auditors’ report on Risk Management and Risk Committee prepared in accordance with paragraph 4
of Article 398 of Turkish Commercial Code (“TCC”) 6102 is submitted to the Board of Directors of
the Company on 09 March 2020
1) According to subparagraph 4 of Article 402 of Turkish Commercial Code (“TCC”) no significant
matter has come to our attention to believe that the Company’s bookkeeping activities concerning
the period from 1 January to 31 December 2019 period are not in compliance with the TCC and
provisions of the Company’s articles of association related to financial reporting
2) In accordance with subparagraph 4, Article 402 of the TCC, the Board of Directors submitted to
us the necessary explanations and provided required documents within the context of audit.
.
The responsible auditor who conducted and finalized this independent audit is Atilla Zaimoğlu.
AC İSTANBUL ULUSLARARASI BAĞIMSIZ DENETİM VE SMMM A.Ş.
Atilla ZAİMOĞLU, SMMM
Sorumlu Denetçi
İstanbul, 09 March 2020
NOTES Current Period Previous Period
31.12.2019 31.12.2018
ASSETS
Current Assets 212.356.396 235.736.331
Cash and Cash Equivalents 6 18.807.158 63.801.291
Trade Receivables 83.773.637 67.677.763
-Trade Receivables From Related Parties 9, 38 4.213 -
-Trade Receivables From Unrelated Parties 9 83.769.424 67.677.763
Other Receivables 3.660.411 637.727
- Other Receivables From Related Parties 10, 38 40.775 10.998
- Other Receivables From Third Parties 10 3.619.636 626.729
Receivables from Ongoing Construction Contract 3.219.348 27.117.692
Contractual Assets Arising From Construction in Progress and Contracting Activities 14 3.219.348 27.117.692
Inventories 12 85.586.294 60.241.441
Prepaid Expenses 13.490.602 13.213.722
- Prepaid Expenses to Unrelated Parties 13 13.490.602 13.213.722
Current Tax Assets 36 166.933 223.354
Other Current Assets 3.652.013 2.823.341
- Other Current Assets from Unrelated Parties 27 3.652.013 2.823.341
Non-Current Assets 90.349.951 91.278.906
Investment Property 16 510.000 510.000
Tangible Fixed Assets 17 61.978.200 63.693.994
Right of use assets 20, 38 18.396.896 21.024.896
Intangible Fixed Assets 18 3.153.438 953.971
Prepaid Expenses 44.201 77.574
- Prepaid Expenses to Unrelated Parties 13 44.201 77.574
Deferred Tax Assets 36 1.622.975 -
Non-Current Assets Related to Period Tax 36 4.644.241 5.018.471
TOTAL ASSETS 302.706.347 327.015.237
ÇUHADAROĞLU METAL SANAYİ VE PAZARLAMA A.Ş. AND ITS SUBSIDIARY
(All Amounts, if not stated otherwise, expressed in Turkish Lira “TL”)
The accompanying accounting policies and explanatory notes are an integral part of these consolidated statements
CONVENIENCE TRANSLATION INTO ENGLISH OF CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS OF 31 DECEMBER 2019
Audited
ÇUHADAROĞLU METAL SANAYİ VE PAZARLAMA A.Ş. AND ITS SUBSIDIARY
(All Amounts, if not stated otherwise, expressed in Turkish Lira “TL”)
CONVENIENCE TRANSLATION INTO ENGLISH OF CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS OF 31 DECEMBER 2019
Audited
NOTES Current Period Previous Period
31.12.2019 31.12.2018
LIABILITIES
Short-Term Liabilities 138.116.769 169.063.262
Short-Term Borrowings 8 9.181.440 8.871.429
Short-Term Portion of Long-Term Borrowings 8 - 2.437.723
Trade Payables 34.433.888 30.175.472
-Trade Payables to Related Parties 9, 38 29.984 -
- Trade Payables to Unrelated Parties 9 34.403.904 30.175.472
Liabilities From Employee Benefits 26 3.618.387 2.816.262
Other Payables 1.364.128 1.159.424
- Other Payables to Unrelated Parties 10 1.364.128 1.159.424
Liabilities from Ongoing Construction Contract 3.122.240 -
Contractual Liabilities Arising from Construction in Progress and Contracting Activities 14 3.122.240 -
Deferred Income (Except Ongoing Construction Contracts) 13 81.112.308 119.815.731
- Deferred Income From Unrelated Parties 81.112.308 119.815.731
Tax Liability of the Period 36 1.487.319 668.563
Short Term Provisions 3.797.059 3.118.658
- Short Term Provisions for Employee Benefits 26 2.452.951 1.947.550
- Other Short-Term Provisions 24 1.344.108 1.171.108
Long Term Liabilities 4.190.342 4.817.240
Long-Term Borrowings 8 - 1.205.600
Long-Term Provisions 4.190.342 2.640.506
- Long Term Provisions for Employee Benefits 26 4.190.342 2.640.506
Deferred Tax Liabilities 36 - 971.134
EQUITY 160.399.236 153.134.735
Shareholders' Equity 154.844.721 144.441.985
Paid-in Capital 28 71.250.000 71.250.000
Share Premium (Discount) 28 6.649.019 6.649.019
Other Comprehensive Income or Expenses not to be Reclassified on Profit or Loss 15.340.286 16.266.646
Gains (Losses) on Revaluation and Remeasurement 15.340.286 16.266.646
- Revaluation Gain / (Loss) on Tangible Assets 28 17.591.537 17.591.537
- Defined Benefit Plans Remeasurement Gains / (Losses) 28 (2.251.251) (1.324.891)
Restricted Reserves Appropriated from Profits 18.694.408 18.131.949
-Legal Reserves 28 18.694.408 18.131.949
Retained Earnings/(Losses) 28 31.581.912 32.683.453
Net Profit /(Loss) for the period 37 11.329.096 (539.082)
Non-controlling Shares 28 5.554.515 8.692.750
TOTAL LIABILITIES AND EQUITY 302.706.347 327.015.237
The accompanying accounting policies and explanatory notes are an integral part of these consolidated statements
NOTES
Current Period Previous Period
01.01.-31.12.2019 01.01.-31.12.2018
PROFIT (LOSS)
Revenue 29 351.652.702 275.612.157
Cost of Sales (-) 29 (296.815.113) (239.258.342)
GROSS PROFIT/LOSS FROM COMMERCIAL ACTIVITIES 54.837.589 36.353.815
GROSS PROFIT/LOSS 54.837.589 36.353.815
General Administrative Expense (-) 30 (18.451.356) (16.263.529)
Marketing Expense (-) 30 (26.010.157) (20.564.936)
Research and Development Expense (-) 30 (158.065) (2.367.784)
Other Operating Income 32 47.489.554 62.369.164
Other Operating Expense (-) 32 (44.183.071) (57.380.757)
OPERATING PROFIT/LOSS 13.524.494 2.145.973
Income from Investing Activities 33 874.925 200.041
Expenses from Investment Activities - -
OPERATING PROFIT/LOSS BEFORE FINANCING INCOME AND EXPENSES 14.399.419 2.346.014
Financing Income 34 367.420 4.595.255
Financing Expenses (-) 34 (4.246.346) (11.311.770)
ONGOING ACTIVITIES PROFIT/LOSS BEFORE TAX 10.520.493 (4.370.501)
Tax Income/(Expense) From Ongoing Activities (2.245.575) (688.868)
-Tax For Period 36 (4.587.081) (1.948.348)
-Deferred Tax Income/ (Expense) 36 2.341.506 1.259.480
ONGOING ACTIVITIES PROFIT/LOSS 8.274.918 (5.059.369)
DISCONTINUED OPERATIONS PERIOD PROFIT/LOSS - -
PROFIT/ (LOSS) FOR THE PERIOD 8.274.918 (5.059.369)
Distribution of the Profit / (Loss) for the Year:
Non-controlling Shares 28 (3.054.178) (4.520.287)
Parent Company Shares 37 11.329.096 (539.082)
Earnings Per Share
- Earnings Per Share from Ongoing Activities 37 0,159 (0,008)
CONVENIENCE TRANSLATION INTO ENGLISH OF CONSOLIDATED INCOME STATEMENT FOR THE PERIOD 01.01-31.12. 2019
PROFIT/ (LOSS) FOR THE PERIOD 8.274.918 (5.059.369)
OTHER COMPREHENSIVE INCOME
Items not to be reclassified to profit or loss (1.010.412) (344.670)
Defined Benefit Plans Remeasurement Gains / (Losses) 26 (1.263.015) (430.837)
Taxes on Other Comprehensive Income or Expenses not to be Reclassified on Profit or Loss 252.603 86.167
Deferred Tax Income (Expense) 36 252.603 86.167
OTHER COMPREHENSIVE INCOME (EXPENSE) (1.010.412) (344.670)
TOTAL COMPREHENSIVE INCOME 7.264.506 (5.404.039)
Appropriation of period income
Non-Controlling Interests (3.138.230) (4.545.913)
Parent Company Share 10.402.736 (858.126)
The accompanying accounting policies and explanatory notes are an integral part of these consolidated statements
ÇUHADAROĞLU METAL SANAYİ VE PAZARLAMA A.Ş. AND ITS SUBSIDIARY
CONVENIENCE TRANSLATION INTO ENGLISH OF CONSOLIDATED INCOME STATEMENT FOR THE PERIOD 01.01-31.12. 2019
ÇUHADAROĞLU METAL SANAYİ VE PAZARLAMA A.Ş. AND ITS SUBSIDIARY
(All Amounts, if not stated otherwise, expressed in Turkish Lira “TL”)
Audited
ÇUHADAROĞLU METAL SANAYİ VE PAZARLAMA A.Ş. AND ITS SUBSIDIARY
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD 01.01 - 31.12.2019
Shareholder's Equity
Non-Controlling
Shares Equity
Paid-in Capital
Share Premium /
Discount
Other comprehensive income items not to be
reclassified to profit or loss Restricted Reserves Retained Earnings
Revaluation and Remeasurements
Gain / (Loss)
Profit / Loss from Previous
Years
Net Period Profit /
(Loss)
NotesRevaluation Gain / (Loss) on
Tangible Assets
Identified Benefit Plans Remeasurement
Gains/(Losses)
PREVIOUS PERIOD
Balances as of January 1, 2018 (opening) 28 71.250.000 6.649.019 17.591.537 (1.005.847) 16.585.690 16.585.690 16.668.519 27.423.544 10.796.548 38.220.092 149.373.320 13.254.208 162.627.528
Amendments to mandatory changes in accounting policies - - - - - - - (181.956) - (181.956) (181.956) (15.545) (197.501)
TFRS 9 impact due to policy change, net (181.956) (181.956) (181.956) (15.545) (197.501)
Amount After Adjustments 71.250.000 6.649.019 17.591.537 (1.005.847) 16.585.690 16.585.690 16.668.519 27.241.588 10.796.548 38.038.136 149.191.364 13.238.663 162.430.027
Transfers - - - - - - 1.463.430 9.333.118 (10.796.548) (1.463.430) - - -
Total Comprehensive Income 37 - - - (319.044) (319.044) (319.044) - - - - (319.044) (4.545.913) (4.864.957)
Period Profit (Loss) - - (539.082) (539.082) (539.082) - (539.082)
Dividens - - - - - - - (3.891.253) - (3.891.253) (3.891.253) - (3.891.253)
Balance as of December 31, 2018 (closing) 28 71.250.000 6.649.019 17.591.537 (1.324.891) 16.266.646 16.266.646 18.131.949 32.683.453 (539.082) 32.144.371 144.441.985 8.692.750 153.134.735
CURRENT PERIOD
Balances as of January 1, 2019 (opening) 28 71.250.000 6.649.019 17.591.537 (1.324.891) 16.266.646 16.266.646 18.131.949 32.683.453 (539.082) 32.144.371 144.441.985 8.692.750 153.134.735
Transfers - - - - - - 562.459 (1.101.541) 539.082 (562.459) - - -
Total Comprehensive Income 37 - - - (926.360) (926.360) (926.360) - - - - (926.360) (3.138.235) (4.064.595)
Period Profit (Loss) - - - - - - - - 11.329.096 11.329.096 11.329.096 - 11.329.096
Balance as of December 31, 2019 (closing) 28 71.250.000 6.649.019 17.591.537 (2.251.251) 15.340.286 15.340.286 18.694.408 31.581.912 11.329.096 42.911.008 154.844.721 5.554.515 160.399.236
Audited
(All Amounts, if not stated otherwise, expressed in Turkish Lira “TL”)
The accompanying accounting policies and explanatory notes are an integral part of these consolidated statements
Notes Current Period Previous Period
01.01.-31.12.2019 01.01.-31.12.2018
A.CASHFLOWS FROM OPERATING ACTIVITIES (32.549.112) 37.865.879
Profit/(Loss) for the period 11.329.096 (539.082)
Period Profit (Loss) from Ongoing Activities 37 11.329.096 (539.082)
Adjustments to Reconcile Net Profit/(Loss) 5.192.795 (162.452)
Adjustments for Depreciation and Amortisation Expense 9.998.484 9.237.240
Adjustments for Provisions 294.716 (1.874.028)
- Adjustments for (Reversal of) Provisions Related with Employee Benefits 26 1.128.877 888.850
- Adjustments for (Reversal of) Other Provisions 32 (834.161) (2.762.878)
Adjustments for Interest (Income) Expenses (457.359) 205.019
- Adjustments for Interest Income 9 (1.302.347) (1.291.535)
-Adjustments for Interest Expense 9 844.988 1.496.554
Adjustments for Tax (Income) Expenses, 36 (1.504.811) (3.709.313)
Other Adjustments for Non-Cash Items 17 - 524.543
Other Adjustments to Reconcile Profit (Loss) 28 (3.138.235) (4.545.913)
Changes in Working Capital (48.402.440) 43.105.217
Adjustments for Increase (Decrease) in Trade Receivables (16.106.701) 5.295.536
- Change in Receivables from Related Parties 9, 38 (4.213) -
-Change in Receivables from Third Parties 9 (16.102.488) 5.295.536
Adjustments for Increase (Decrease) in Other Receivables (3.022.684) (561.170)
-Change in Other Receivables from Related Parties 10, 38 (29.777) (6.236)
-Change in Other Receivables from Third Parties 10 (2.992.907) (554.934)
Adjustments for Increase (Decrease) in Receivables Arising from Customer Contracts 14 23.898.344 (3.475.806)
Adjustments for Increase (Decrease) in Inventories 12 (25.344.853) (13.428.354)
Increase / Decrease in Prepaid Expenses 13 (243.507) (7.610.937)
Adjustments for Increase (Decrease) in Trade Payables 5.560.763 (13.471.934)
-Change in Trade Payables Due to Related Parties 9, 38 29.984 -
-Change in Trade Payables Due to Third Parties 9 5.530.779 (13.471.934)
Increase / Decrease in Employee Benefit Liabilities 26 802.125 (1.157.809)
Adjustments for Increase (Decrease) in Liabilities Arising from Customer Contracts 14 3.122.240 -
Adjustments for Increase (Decrease) in Other Payables 10,38 204.704 (29.646)
- Change in Other Payables Due to Third Parties 204.704 (29.646)
Increase / Decrease in Deferred Income(Except Liabilities Arising from Customer Contracts) 13 (38.703.423) 77.230.229
Adjustments for Increase (Decrease) in Working Capital 1.430.552 315.108
- Increase / Decrease in Other Assets Related to Activities 1.257.552 -
-Increase / Decrease in Other Liabilities Related to Activities 24 173.000 315.108
Cash Flows from Operating Activities (31.880.549) 42.403.683
Dividend Payments - (3.891.253)
Tax Payments / Refunds (668.563) (646.551)
B. CASH FLOW FROM INVESTING ACTIVITIES (9.111.709) (10.276.725)
Proceeds from Tangible and Intangible Asset Sales (+) 1.842.336 9.761
-Proceeds from Sale of Tangible Assets 17 1.842.336 9.761
Cash Outflows from Tangible and Intangible Asset Purchases (10.954.045) (10.286.486)
- Purchases of Tangible Assets 17 (8.159.463) (9.893.572)
- Purchases of Intangible Assets 18 (2.794.582) (392.914)
C.CASH FLOWS FROM FINANCING ACTIVITIES (3.333.312) 6.162.300
Proceeds from Borrowings 8 (3.333.312) 6.162.300
-Proceeds from Loans (3.333.312) 6.162.300
NET INCREASE/ (DECREASE) IN CASH AND CASH EQUIVALENTSBEFORE CURRENCY
TRANSLATION DIFFERENCES (A+B+C) (44.994.133) 33.751.454
D. EFFECTS OF UNREALIZED EXCHANGE LOSS/ (GAIN)ON CASH AND CASH EQUIVALENTS - -
NET DECREASE/(INCREASE) IN CASH ANDCASH EQUIVALENTS (A+B+C+D) (44.994.133) 33.751.454
E. CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD 6 63.801.291 30.049.837
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD (A+B+C+D+E) 6 18.807.158 63.801.291
ÇUHADAROĞLU METAL SANAYİ VE PAZARLAMA A.Ş. AND ITS SUBSIDIARY
The accompanying accounting policies and explanatory notes are an integral part of these consolidated statements
(All Amounts, if not stated otherwise, expressed in Turkish Lira “TL”)
CONVENIENCE TRANSLATION INTO ENGLISH OF CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE PERIOD 01.01 - 31.12.2019
Audited
ÇUHADAROĞLU METAL SANAYİ VE PAZARLAMA A.Ş. AND IT’S SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE
YEAR ENDED DECEMBER 31, 2019 (Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated)
CONTENTS
1. ORGANISATION AND ACTIVITIES .............................................................................................................. 1
2. BASIS OF PRESENTATION OF THE FINANCIAL STATEMENTS ............................................................. 1
3. BUSINESS COMBINATIONS ......................................................................................................................... 24
4. SHARES IN OTHER ENTERPRISES ............................................................................................................. 24
5. SEGMENT REPORTING ................................................................................................................................. 24
6. CASH AND CASH EQUIVALENTS .............................................................................................................. 28
7. FINANCIAL INVESTMENTS ......................................................................................................................... 29
8. FINANCIAL BORROWINGS .......................................................................................................................... 29
9. TRADE RECEIVABLES AND PAYABLES .................................................................................................. 31
10. OTHER RECEIVABLES AND PAYABLES................................................................................................. 32
11. DERIVATIVE FINANCIAL INSTRUMENTS ............................................................................................. 33
12. INVENTORIES ............................................................................................................................................... 33
13. PREPAID EXPENSES AND DEFERRED REVENUES ............................................................................... 34
14. CONSTRUCTION CONTRACTS.................................................................................................................. 34
15. INVESTMENTS ACCOUNTED WITH EQUITY METHOD ...................................................................... 35
16. INVESTMENT PROPERTIES ....................................................................................................................... 35
17. TANGIBLE FIXED ASSETS ......................................................................................................................... 35
18. INTANGIBLE FIXED ASSETS ..................................................................................................................... 38
19. GOODWILL .................................................................................................................................................... 39
20. RIGHT OF USE ASSETS ............................................................................................................................... 39
21. IMPAIRMENT OF ASSETS .......................................................................................................................... 39
22. GOVERNMENT GRANTS ............................................................................................................................ 39
23. BORROWING COSTS ................................................................................................................................... 40
24. PROVISIONS, CONTINGENT ASSETS AND LIABILITIES ..................................................................... 40
25. COMMITMENTS ........................................................................................................................................... 43
26. EMPLOYEE BENEFITS ................................................................................................................................ 43
27. OTHER ASSETS AND LIABILITIES ........................................................................................................... 44
28. CAPITAL, RESERVES AND OTHER EQUITY COMPONENTS............................................................... 45
29. REVENUE ...................................................................................................................................................... 46
30. GENERAL ADMINISTRATIVE EXPENSES,MARKETING EXPENSES,RESEARCH AND
DEVELOPMENT EXPENSES ............................................................................................................................. 47
31. EXPENSES BY NATURE .............................................................................................................................. 49
32. OTHER INCOME AND EXPENSES FROM OPERATING ACTIVITIES .................................................. 50
33. INCOME AND EXPENSES FROM INVESTING ACTIVITIES ................................................................. 50
34. FINANCIAL INCOME AND EXPENSES .................................................................................................... 51
35. NON-CURRENT ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS ............................ 51
36. INCOME TAXES ........................................................................................................................................... 51
37. EARNINGS PER SHARE............................................................................................................................... 54
38. RELATED PARTY DISCLOSURES ............................................................................................................. 54
39. QUALITIES AND LEVEL OF RISKS FROM FINANCIAL INSTRUMENTS ........................................... 57
40. FINANCIAL INSTRUMENTS (FAIR VALUE OF FINANCIAL RISK MANAGEMENT
DISCLOSURES) ................................................................................................................................................... 66
41. POST BALANCE SHEET EVENTS .............................................................................................................. 67
42. DISCLOSURE OF OTHER MATTERS ........................................................................................................ 67
ÇUHADAROĞLU METAL SANAYİ VE PAZARLAMA A.Ş. AND IT’S SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE
YEAR ENDED DECEMBER 31, 2019 (Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated)
1
1. ORGANISATION AND ACTIVITIES
Çuhadaroğlu Metal Sanayi ve Pazarlama A.Ş. (“Company”) was established in İstanbul, Turkey. Company’s
Head Office is located in Yakuplu Mah. Hürriyet Bulvarı No:6-8 34524 Beylikdüzü / İstanbul.
The Company and its subsidiary (the "Group") operate in all manner of aluminum profiles, facades, doors and
windows, architectural applications fields.
The company shares have been traded on Istanbul Stock Exchange (ISE) since 18.02.2016, and as of 31
December 2019, % 25,96 of shares are in circulation according to Central Registry Agency (CRA) records.
(Note 28).
As of 31 December 2019, 610 people has been employed by the Group. (31.12.2018: 644)
The ultimate parent and controlling party of Group is Çuhadaroğlu Family.
Companies included in full consolidation;
Company Name
Nature of
Business
Field of
Operations
Establishment
Place
Çuhadaroğlu Alüminyum Sanayi ve
Ticaret A.Ş. (*)
Aluminum-
Commitment
Service
Turkey
(*) The company has been obtained the shares of Çuhadaroğlu Aliminyum in 2012 in consequence
of merging with Çuhadaroğlu Holding A.Ş.
2. BASIS OF THE PRESENTATION OF THE FINANCIAL STATEMENTS
A. Basic Standards of Presentation
Basis of Presentation of the Consolidated Financial Statements
The consolidated financial statements of the Group have been prepared in accordance with the Turkish
Accounting Standards/Turkish Financial Reporting Standards, (“TAS/TFRS”) and interpretations as adopted in
line with international standards by the Public Oversight Accounting and Auditing Standards Authority of
Turkey (“POA”) in line with the communiqué numbered II-14.1 “Communiqué on the Principles of Financial
Reporting In Capital Markets” (“the Communiqué”) announced by the Capital Markets Board of Turkey
(“CMB”) on June 13, 2013 which is published on Official Gazette numbered 28676. TAS/TFRS are updated in
harmony with the changes and updates in International Financial and Accounting Standards (“IFRS”) by the
communiqués announced by the POA.
In accordance with article 5th of the CMB Accounting Standards, companies should apply Turkish Accounting
Standards/Turkish Financial Reporting Standards (“TAS/TFRS”) and interpretations regarding these standards
as adopted by the Public Oversight Accounting and Auditing Standards Authority (“POA”).
The Company maintaines its books of accounts and prepare its statutory consolidated financial statements in
Turkish Lira (TL) in accordance with financial legislations and Uniform Chart Of Accounts (UCA) adopted by
the Ministry of Finance.
The consolidated financial statements are based on the statutory records, with adjustments and reclassifications
for the purpose of fair presentation in accordance with the Accounting Standards of the POA and are presented
in TL.
In order to prepare financial statements in accordance with TFRSs, certain assumptions affecting notes to the
financial statements and critical accounting estimations related to assets, liabilities, contingent assets and
contingent liabilities are required to be used.
.
ÇUHADAROĞLU METAL SANAYİ VE PAZARLAMA A.Ş. AND IT’S SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE
YEAR ENDED DECEMBER 31, 2019 (Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated)
2
2. BASIS OF PRESENTATION OF THE FINANCIAL STATEMENTS (continued)
A. Basic Standards of Presentation (continued)
Basis of Presentation of the Consolidated Financial Statements (continued)
Although these estimations are made upon the best afford of the management by interpreting the cyclical
circumstances, actual results may differ from the forecasts. Issues that are complex and needs further
interpretation, which might have a critical impact on financial statements. There is no change in judgements and
critical accounting estimates used in interim condensed consolidated financial statements as of 31 December
2019.
There are not any seasonal and cyclical changes that affect the Group’s activities significantly.
Financial statements, except for the revaluation of financial instruments, lands and buildings have been prepared
on the historical cost basis..
Preparation of Financial Statements in Hyperinflationary Periods
Based on CMB’s resolution No: 11/367 issued on 17 March 2005, companies operating in Turkey and preparing
their financial statements in accordance with the POA Accounting Standards, are not subject to inflation
accounting effective from 1 January 2005. Therefore, starting from January 2005, TAS 29 “Financial Reporting
in Hyperinflationary Economies” is not applied in the accompanying consolidated financial statements.
Comparative information, changes in accounting policies and restatement of prior period financial
statements
In order to allow the determination of financial position and performance of the Group,consolidated financial
statements of the current period are prepared comparatively with prior period consolidated financial statements.
In order to comply with the presentation of the consolidated financial statements for the period necessary,
comparative figures are reclassified.
- The Group has made some classifications in previous period consolidated financial statements to conform
with the presentation of the current period consolidated financial tables. The nature of the classification, reason
and amounts are as follows:
- In compliance with the remaining rent period, rent amount of TL 18.396.896 which had been classified as
“Prepaid Expense”in previous period financial statements, has been reclassified as “Right of Use Asset” in
current period financial statements.
Going Concern
The consolidated financial statements including the accounts of the group have been prepared assuming that the
Group will continue as a going concern on the basis that the entity will be able to realize its assets and discharge
its liabilities in the normal course of business
Netting / Offsetting
Financial assets and liabilities are reported with their net values in the consolidated balance sheet in case they
are legally entitled to be netted or paid net or recoverable or the realization of the liability and the realization of
the asset can happen simultaneously
.
ÇUHADAROĞLU METAL SANAYİ VE PAZARLAMA A.Ş. AND IT’S SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE
YEAR ENDED DECEMBER 31, 2019 (Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated)
3
2. BASIS OF PRESENTATION OF THE FINANCIAL STATEMENTS (continued)
A. Basic Standards of Presentation (continued)
New and amended standards and interpretations
The accounting policies adopted in preparation of the consolidated financial statements as at December 31, 2019
are consistent with those of the previous financial year, except for the adoption of new and amended TFRS and
IFRIC interpretations effective as of January 1, 2019. The effects of these standards and interpretations on the
Group’s financial position and performance have been disclosed in the related paragraphs
i) The new standards, amendments and interpretations which are effective as at January 1, 2019 are as
follows:
TFRS 16 Leases
CIn April 2018, POA has published a new standard, TFRS 16 'Leases'. The new standard brings most leases on-
balance sheet for lessees under a single model, eliminating the distinction between operating and finance leases.
Lessor accounting however remains largely unchanged and the distinction between operating and finance leases
is retained. TFRS 16 supersedes TAS 17 'Leases' and related interpretations and is effective for periods
beginning on or after January 1, 2019, with earlier adoption permitted.
Lessees have recognition exemptions to applying this standard in case of short-term leases (i.e., leases with a
lease term of 12 months or less) and leases of ’low-value’ assets (e.g., personal computers, office equipment,
etc.). At the commencement date of a lease, a lessee measures the lease liability at the present value of the lease
payments that are not paid at that date (i.e., the lease liability), at the same date recognizes an asset representing
the right to use the underlying asset (i.e., the right-of-use asset) and depreciates it during the lease term. The
lease payments shall be discounted using the interest rate implicit in the lease, if that rate can be readily
determined. If that rate cannot be readily determined, the lessee shall use the lessee’s incremental borrowing
rate. Lessees are required to recognize the interest expense on the lease liability and the depreciation expense on
the right-of-use asset separately.
Lessees are required to remeasure the lease liability upon the occurrence of certain events (e.g. a change in the
lease term, a change in future lease payments resulting from a change in an index or rate used to determine those
payments). Under these circumstances, the lessee recognizes the amount of the remeasurement of the lease
liability as an adjustment to the right-of-use asset.
The regarding new standard’s influence on the Group’s financial status and performance has been explained in
section 2C.
Amendments to TAS 28 “Investments in Associates and Joint Ventures” (Amendments)
In December 2017, POA issued amendments to TAS 28 Investments in Associates and Joint Ventures. The
amendments clarify that a company applies TFRS 9 Financial Instruments to long-term interests in an associate
or joint venture that form part of the net investment in the associate or joint venture. TFRS 9 Financial
Instruments excludes interests in associates and joint ventures accounted for in accordance with TAS 28
Investments in Associates and Joint Ventures. In this amendment, POA clarified that the exclusion in TFRS 9
applies only to interests a company accounts for using the equity method. A company applies TFRS 9 to other
interests in associates and joint ventures, including long-term interests to which the equity method is not applied
and that, in substance, form part of the net investment in those associates and joint ventures. These amendments
are applied for annual periods beginning on or after 1 January 2019. The amendments did not have a significant
impact on the financial position or performance of the Group.
ÇUHADAROĞLU METAL SANAYİ VE PAZARLAMA A.Ş. AND IT’S SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE
YEAR ENDED DECEMBER 31, 2019 (Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated)
4
2. BASIS OF PRESENTATION OF THE FINANCIAL STATEMENTS (continued)
A. Basic Standards of Presentation (continued)
New and amended standards and interpretations(continued)
TFRIC 23 Uncertainty over Income Tax Treatments
The interpretation clarifies how to apply the recognition and measurement requirements in “TAS 12 Income
Taxes” when there is uncertainty over income tax treatments.
When there is uncertainty over income tax treatments, the interpretation addresses:
(a) whether an entity considers uncertain tax treatments separately;
(b) the assumptions an entity makes about the examination of tax treatments by taxation authorities;
(c) how an entity determines taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax
rates; and
(d) how an entity considers changes in facts and circumstances.
The interpretation is effective for annual reporting periods beginning on or after 1 January 2019. The
interpretation did not have a significant impact on the financial position or performance of the Group.
Annual Improvements – 2015–2017 Cycle
In January 2019, POA issued Annual Improvements to TFRS Standards 2015–2017 Cycle, amending the
following standards:
• TFRS 3 Business Combinations and TFRS 11 Joint Arrangements — The amendments to TFRS 3 clarify that
when an entity obtains control of a business that is a joint operation, it remeasures previously held interests in
that business. The amendments to TFRS 11 clarify that when an entity obtains joint control of a business that is
a joint operation, the entity does not remeasure previously held interests in that business.
• TAS 12 Income Taxes — The amendments clarify that all income tax consequences of dividends (i.e.
distribution of profits) should be recognised in profit or loss, regardless of how the tax arises.
• TAS 23 Borrowing Costs — The amendments clarify that if any specific borrowing remains outstanding after
the related asset is ready for its intended use or sale, that borrowing becomes part of the funds that an entity
borrows generally when calculating the capitalization rate on general borrowings. The amendments are effective
from annual periods beginning on or after 1 January 2019. The amendments did not have a significant impact on
the financial position or performance of the Group.
Plan Amendment, Curtailment or Settlement (Amendments to TAS 19)
In January 2019, the POA published Amendments to TAS 19 “Plan Amendment, Curtailment or Settlement”
The amendments require entities to use updated actuarial assumptions to determine current service cost and net
interest for the remainder of the annual reporting period after a plan amendment, curtailment or settlement
occurs. These amendments are applied for annual periods beginning on or after 1 January 2019.
ÇUHADAROĞLU METAL SANAYİ VE PAZARLAMA A.Ş. AND IT’S SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE
YEAR ENDED DECEMBER 31, 2019 (Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated)
5
2. BASIS OF PRESENTATION OF THE FINANCIAL STATEMENTS (continued)
A. Basic Standards of Presentation (continued)
New and amended standards and interpretations (continued)
Prepayment Features with Negative Compensation (Amendments to TFRS 9)
The POA issued minor amendments to TFRS 9 Financial Instruments to enable companies to measure some
prepayable financial assets at amortized cost.
Applying TFRS 9, a company would measure a financial asset with so-called negative compensation at fair
value through profit or loss. Applying the amendments, if a specific condition is met, entities will be able to
measure at amortized cost some prepayable financial assets with so-called negative compensation.
These amendments are applied for annual periods beginning on or after 1 January 2019. The amendments are
not applicable for the Group and did not have an impact on the financial position or performance of the Group.
ii) Standards issued as of 31 December 2019 but not yet effective and not early adopted
Standards, interpretations and amendments to existing standards that are issued but not yet effective up to the
date of issuance of the interim consolidated financial statements, are as follows. The Group will make the
necessary changes if not indicated otherwise, which will be affecting the consolidated financial statements and
disclosures, when the new standards and interpretations become effective.
TFRS 10 and TAS 28: Sale or Contribution of Assets between an Investor and its Associate or Joint
Venture (Amendments)
In December 2017, POA postponed the effective date of this amendment indefinitely pending the outcome of its
research project on the equity method of accounting. Early application of the amendments is still permitted. The
Group will wait until the final amendment to assess the impacts of the changes.
TFRS 17 - The new Standard for insurance contracts
The PAO issued TFRS 17 in February 2019, a comprehensive new accounting standard for insurance contracts
covering recognition and measurement, presentation and disclosure. TFRS 17 model combines a current balance
sheet measurement of insurance contract liabilities with the recognition of profit over the period that services are
provided. TFRS 17 will become effective for annual reporting periods beginning on or after 1 January 2021;
early application is permitted. The standard is not applicable for the Group and will not have an impact on the
financial position or performance of the Group.
Definition of a Business (Amendments to TFRS 3)
In May 2019, the PAO issued amendments to the definition of a business in TFRS 3 Business Combinations.
The amendments are intended to assist entities to determine whether a transaction should be accounted for as a
business combination or as an asset acquisition.
The amendments:
- clarify the minimum requirements for a business;
- remove the assessment of whether market participants are capable of replacing any missing elements;
ÇUHADAROĞLU METAL SANAYİ VE PAZARLAMA A.Ş. AND IT’S SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE
YEAR ENDED DECEMBER 31, 2019 (Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated)
6
2. BASIS OF PRESENTATION OF THE FINANCIAL STATEMENTS (continued)
A. Basic Standards of Presentation (continued)
New and amended standards and interpretations (continued)
Definition of a Business (Amendments to TFRS 3) (continued)
- add guidance to help entities assess whether an acquired process is substantive;
- narrow the definitions of a business and of outputs; and
- introduce an optional fair value concentration test.
The amendments to TFRS 3 are effective for annual reporting periods beginning on or after 1 January 2020 and
apply prospectively. Earlier application is permitted. The Group is assessing the amendment’s probable
influence on the Group’s financial status and performance.
Definition of Material (Amendments to TAS 1 and TAS 8)
In June 2019, the PAO issued amendments to TAS 1 Presentation of Financial Statements and “TAS 8
Accounting Policies, Changes in Accounting Estimates and Errors” to align the definition of ‘material’ across
the standards and to clarify certain aspects of the definition. The new definition states that, ’Information is
material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that the
primary users of general purpose financial statements make on the basis of those financial statements, which
provide financial information about a specific reporting entity. The amendments clarify that materiality will
depend on the nature or magnitude of information, or both. An entity will need to assess whether the
information, either individually or in combination with other information, is material in the context of the
financial statements.
The amendments to TAS 1 and TAS 8 are required to be applied for annual periods beginning on or after 1
January 2020. The amendments must be applied prospectively and earlier application is permitted. The Group is
assessing the amendments’ probable influence on the Group’s financial status and performance.
Amendments to TFRS 9, TAS 39 and TFRS 7- Interest Rate Benchmark Reform
The amendments issued to TFRS 9 and TAS 39 which are effective for periods beginning on or after January 1,
2020 provide certain reliefs for four fundamental matters in connection with interest rate benchmark reform.
These reliefs are related to hedge accounting as follows:
- Highly probable requirement
- Prospective Assessments
- Retrospective Assessments
- Separately identifiable risk components
Reliefs used as a result of amendments in TFRS 9 and TAS 39 is aimed to be disclosed in financial statements
based on the amendments made in TFRS 7.
iii) The new standards, amendments and interpretations that are issued by the International Accounting
Standards Board (IASB) but not issued by Public Oversight Authority (POA)
On January 23, 2020, the IASB issued amendments to “IAS 1 Presentation of Financial Statements”. The
amendments issued to IAS 1 which are effective for periods beginning on or after 1 January 2022, clarify the
criteria
ÇUHADAROĞLU METAL SANAYİ VE PAZARLAMA A.Ş. AND IT’S SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE
YEAR ENDED DECEMBER 31, 2019 (Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated)
7
2. BASIS OF PRESENTATION OF THE FINANCIAL STATEMENTS (continued)
A.Basic Standards of Presentation (continued
New and amended standards and interpretations (continued)
Amendments to TFRS 9, TAS 39 and TFRS 7- Interest Rate Benchmark Reform (continued)
iii) The new standards, amendments and interpretations that are issued by the International Accounting
Standards Board (IASB) but not issued by Public Oversight Authority (POA) (continued)
for the classification of a liability as either current or non-current. Amendments must be applied retrospectively
in accordance with IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors. Early application
is permitted.. The Group is assessing the amendments’ probable influence on the Group’s financial status and
performance.
Consolidation Principles
The consolidated financial statements include the accounts of the parent company, its subsidiary on the basis set
out in sections below. Control is obtained by controlling over the activities of an entity's financial and operating
policies in order to benefit from those activities.
Subsidiary
Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed, or has rights
or has variable returns from its involvement with the entity and has the ability to affect those returns through its
power over the entity. Financial statements of subsidiaries are included in the consolidated financial statements
since the date on which control obtained.
In order to be consistent with accounting policies accepted by the Group, accounting policies of the subsidiaries
are modified where necessary. Total comprehensive income is transferred to the parent shareholders and non-
controlling interests even if the situation will result in a reverse balance in non-controlling interests.
As of 31 December 2018, direct and indirect participation rate of subsidiaries subject to consolidation are as
follows:
Subsidiaries Location Main Activity
Functional
Currency 31.12.2019 31.12.2018
Çuhadaroğlu Alüminyum
Sanayi ve Ticaret A.Ş. Turkey
Aluminum -
Commitment Turkish Lira 66,54 66,54
Effective Share Rate in
Capital%
Elimination Transactions On the Consolidation
Unrealized Income and Expenses arise from intragroup transactions, intragroup transactions and intragroup
balances erase mutually while preperation of consolidated financial statements. Profits and Losses arise from
transactions between parent and subsidiaries subject to consolidation offsets as far as parent’s share on
subsidiary.
Full Consolidation Method::
The Company’s and its subsidiaries’ paid-in capital and balance sheet items were collected. The collection
process, the consolidation of the subsidiaries' receivables and payables decreased from each other.
ÇUHADAROĞLU METAL SANAYİ VE PAZARLAMA A.Ş. AND IT’S SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE
YEAR ENDED DECEMBER 31, 2019 (Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated)
8
2. BASIS OF PRESENTATION OF THE FINANCIAL STATEMENTS (continued)
A.Basic Standards of Presentation (continued)
Consolidation Principles (continued)
Elimination Transactions On the Consolidation (continued)
- The consolidated balance sheet of the Company's paid in capital and paid-in capital of subsidiary are not
included in the consolidated balance sheet.
- Income statement items of the company and its subsidiaries are collected separately and during the collection,
the sale amounts of the sales to one another of partnerships subject to consolidation method, have been
deducted from total sales and cost of goods sold amounts. The profit arising from purchase-sale of goods
between partnerships subject to consolidation method have been deducted from inventories and added to cost of
goods sold while loss amount have been added to inventories and deducted from cost of goods sold in the
consolidated financial statements. The portion of the net profit or loss of the subsidiary within the scope of
consolidation, hitting the shares other than the subsidiary,has been reported in the account group “Non-
controlling Shares” after net consolidated period profit.
- Corrections have been made to make financial stetments of subsidiaries compatible with other group
companies’ accounting principles, where necessary.
Principles of Preparaion of Consolidated Balance Sheet and Income Statement
- The Company's and its subsidiary’s income statements are separately collected and consolidation of the
process of collecting the goods and services subject to the sales of companies that they have made to each other,
the total sales amounts and reduced the cost of goods sold. Consolidation of subsidiary’s stocks, profit from the
trading of goods between these partnerships on the consolidated financial statements, inventories added by
subtracting the cost of goods sold, cost of goods sold if the damage has been reduced by adding to inventories.
Formed due to the consolidation of subsidiary's income and expenses related to transactions with each other,
mutual accounts have been eliminated.
- The net profit or loss of consolidated subsidiaries other than the shares of companies subject to the portion that
corresponds to the consolidation method, the consolidated net profit for the "Minority Interests" group name is
shown.
- Adjustment has been made on subsidiary’s financial statement to bring in compliance with accounting policies
used by intragroup companies under necessity.
B. Changes in Accounting Policies
- TFRS 16 Leases
The company has applied TFRS 16 as of 1 January 2019. The company has changed its accounting policy As it
is explained below.
The Company , benefitting all simplifying terms at transition has used the modified retrospective approach
resulting in determination of right of use assets and lease liability in equal amounts. Accordingly, the
comparative information within the scope of TAS 17 and regarding interpretations have not been restated for
2018. Details of changes in accounting policies have been explained below.
ÇUHADAROĞLU METAL SANAYİ VE PAZARLAMA A.Ş. AND IT’S SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE
YEAR ENDED DECEMBER 31, 2019 (Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated)
9
2. BASIS OF PRESENTATION OF THE FINANCIAL STATEMENTS (continued)
B. Changes in Accounting Policies (continued)
Definition of Lease
At first, the Company has determined whether the contract included a lease at the beginning of the contract.
The company assesses whether the contract includes a lease in terms of TFRIC 4. According to TFRS 16 a
contract is accepted as a lease should it gives the right of control of the use of an identified asset for a period of
time.
During transition to TFRS 16 The Company preferred to apply the amendment without reassessing whether the
contracts meet the ‘lease’ definition in the simplified approach, regarding which transactions are classified as
leases. The contracts which do not include lease in terms of TAS 17 and TFRIC 4 have not been reassessed to
determine whether they include a lease process Therefore, lease definition within TFRS 16 have been applied
only to contracts made or amended on 01 January 2019 or later.
As a lessee,
The Group leases realties.
As a lessee, the company despite having classified lease as operating lease or financial lease depending on the
assessment of whether risks and benefits of possessing the asset have been transferred, before, have included
right of use assets and financial liabilities in the financial statements for most of the lease operations according
to TFRS 16 . In other words lease transactions are represented in the statement of financial position.
Significant Accounting Policies and Transition
The building used by the Group as a lessee was built on the land owned by the Group partners with building
costs covered by the Group. According to the contract concluded between the parties, the asset subject to lease
has been leased to the Group for a long time, lease amounts have been decided to be granted by deducting
construction costs perodically from lease amounts. For this reason, no lease liability has been reflected in
financial statements as of the date the lease virtually started.
In compliance with the remaining lease period, lease amount of TL 18.396.896 which had been classified as
“Prepaid Expense”in previous period financial statements, has been reclassified as “Right of Use Asset” in
current period financial statements. The right of use asset is initially calculated at cost and subsequently
deducting accumulated depreciation and impairment losses.
C. Changes in Accounting Estimates and Errors
The preparation of consolidated financial statements requires management to affect the reported amounts of
assets and liabilities in the balance sheet at the date of the possible liabilities and commitments and the amounts
of revenue and expenses during the reporting period required to make certain assumptions and estimates. These
estimates and assumptions are based on management's best knowledge of current events and transactions despite
the actual results may vary.
Changes in accounting estimates, if only for one period, changes are made in the current period, if they relate to
future periods, as well as in the period of change in future periods, are applied prospectively. There has not been
any significant change in accounting estimates within the current year.
Significant accounting errors are applied retrospectively and prior period financial statements are restated.
ÇUHADAROĞLU METAL SANAYİ VE PAZARLAMA A.Ş. AND IT’S SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE
YEAR ENDED DECEMBER 31, 2019 (Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated)
10
2. BASIS OF PRESENTATION OF THE FINANCIAL STATEMENTS (continued)
D. Summary of Significant Accounting Policies
Revenue
Sale of Goods Revenue from the sale of goods is recognized when all of the following conditions are met:
- The Group transfers all important risks and gains related to property to the buyer
- The Group does not have an ongoing administrative involvement associated with the property and no effective
control over the goods sold
- Reliable measurement of income amount,
- It is probable that the economic benefits associated with the transaction will flow to the business, and
- Reliable measurement of costs arising from or to be caused by the transaction.
Presentation of service The income obtained from the service delivery contract is accounted according to the completion stage of the
contract. The stage of completion of the contract is determined as follows:
- Aluminum commitment projects are accounted according to the completion stage. The stage of completion is
determined as the ratio of the time elapsed as of the balance sheet date to the estimated total time for the
completion of the commitment,
- The service fees included in the prices of the goods sold are accounted for according to the total cost of the
service offered for the goods sold, taking into account the number of services provided in previous goods sales, and
- Revenues from contracts that depend on the time spent are accounted for at contract charges as working hours
and direct expenses occur.
Construction contract activities
Contract income and expenses are recorded as income and expense item when the return of the construction
contract can be accurately estimated. Contract revenues are reflected in the financial statements in accordance
with the method of completion ratio of the contract. The ratio of total contract expenditures incurred as of the
period, to the total estimated cost of the contract indicates the percentage of completion of the contract. This
ratio is used to reflect the portion of the total income of the contract corresponding to the current period in the
financial statements.
Income arising from cost plus profit type contracts are reflected in the records with the profit margin calculated
over the resulting cost.
Construction contract costs include indirect costs such as all initial material - material and direct labor costs,
indirect labor related to contract performance, materials, repairs and depreciation costs. Sales and general
administrative expenses are charged as soon as they occur. Expense provisions for estimated losses in
incomplete contracts are allocated in the periods when these losses are detected. Changes in business
performance, business conditions, and contractual provisions and estimated profitability due to final agreement
arrangements can result in cost and income revisions. These revisions are reflected in the consolidated financial
statements in the period determined. Profit incentives are included in income when their realization is
reasonably guaranteed.
ÇUHADAROĞLU METAL SANAYİ VE PAZARLAMA A.Ş. AND IT’S SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE
YEAR ENDED DECEMBER 31, 2019 (Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated)
11
2. BASIS OF PRESENTATION OF THE FINANCIAL STATEMENTS (continued)
D.Summary of Significant Accounting Policies (continued)
Revenue (continued)
Construction contract activities (continued)
Contractual assets arising from ongoing construction and commitment works indicate how much the income
amount reflected in consolidated financial statements exceed the amount of invoices issued, contractual liabilities
arising from ongoing construction commitment works indicate how much the amount of invoices issued exceed
the income amount reflected in consolidated financial statements.
Lease Income
Lease income from real estates is accounted in line with the linear method throughout the relevant lease
agreement..
Dividend and Interest Income
Dividend income from stock investments is journalised when the shareholders are entitled to receive dividends (as
long as it is possible for the Group to obtain economic benefits and to measure revenue reliably).
Interest income from financial assets is recorded as long as it is possible for the Group to obtain economic
benefits and to measure revenue reliably. Interest income is accrued in the relevant period in proportion to the
remaining principal balance and the effective interest rate, which reduces the estimated cash inflows to be
obtained from the financial asset during the expected life to the book value of that asset.
Inventories
It is the component that shows assets that are held for sale in the normal course of business, that are being
produced for sale or that are found in the form of items and materials to be used in the production process or
service delivery. Advances given for purchases are classified in prepaid expenses until the relevant stock is
recognised.
Inventories are stated at the lower of cost and net realizable value. Cost of Inventories; includes all purchasing
costs, conversion costs and other costs incurred to bring stocks to their current state and position. Conversion
costs of inventories include costs directly related to production, such as direct labor costs. These costs also
include the amounts distributed systematically from the fixed and variable general production costs incurred in
the conversion of the raw material and supplies into finished product.
Net realizable value is obtained by deducting the total of the estimated completion cost and the estimated costs
that must be incurred in order to realize the sale, from the estimated sales price occurring in the ordinary
commercial activity. Inventories cannot be monitored in the financial statements at a price higher than the
amount expected to be obtained as a result of their use or sale. When the net realizable value of the inventories
falls below their cost, the inventories are reduced to their net realizable value and reflected to the income
statement in the year when the impairment occurs.
In cases where the conditions leading to the reduction of inventories to net realizable value have expired or there
has been an increase in net realizable value due to changing economic conditions, the provision for impairment
is canceled. The canceled amount is limited by the amount of impairment previously reserved (Note 12).
The Group uses the moving average cost method to calculate the cost of inventories.
ÇUHADAROĞLU METAL SANAYİ VE PAZARLAMA A.Ş. AND IT’S SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE
YEAR ENDED DECEMBER 31, 2019 (Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated)
12
2. BASIS OF PRESENTATION OF THE FINANCIAL STATEMENTS (continued)
D.Summary of Significant Accounting Policies (continued)
Tangible Fixed Assets
The physical items of the Group, which are used for the production or supply of goods and services, to be leased
to others (for non-real estate assets) or to be used for administrative purposes, are stated with their cost values
within
the framework of the cost model. Cost value of the tangible asset; The purchase price consists of, import taxes, non-refundable taxes and charges
to make the tangible fixed asset ready for use.
Expenditures such as repair and maintenance after the use of the tangible fixed asset are reported in the income
statement as an expense in the period they occur.
If the expenditures provide an economic increase in the future use of the related tangible fixed asset, these
expenditures are added to the cost of the asset.
Leasehold Improvements include the expenditures made for the leased real estate, and in cases where the useful
life is longer than the term of the lease, it is depreciated over the useful lives during the lease period. Depreciation is separated from the date on which the tangible assets are ready for use. Depreciation is continued
to be reserved in the period when the relevant assets are idle. Economic lifetime and depreciation method are regularly reviewed, accordingly, it is checked whether the
method and the depreciation period are in line with the economic benefits to be obtained from the related asset
and correction is made when necessary (Note 17).
Revaluation Model
Land and buildings that are kept in use for the production or supply of goods or services or for administrative
purposes are expressed in revalued amounts. The revalued amount is determined by deducting the accumulated
depreciation and accumulated depredation that occurs in the periods after the fair value determined on the
revaluation date. Revaluations are carried out at regular intervals in a way that the book value does not differ
significantly from the fair value that will be determined at the balance sheet date. Buildings reported in tangible
assets are shown over their revalued amount.
The fair value of the buildings was determined by an independent valuation company licensed by the Capital
Markets Board. The revalued amount is calculated from the fair value at the revaluation date by deducting
subsequent accumulated depreciation and subsequent accumulated impairment losses. Increases in revalued
value are reported in equity.
If an asset's book value increased as a result of revaluation, this increase is accounted for in other
comprehensive income and it is collected under the name of revaluation increase in direct equity account group.
However, a revaluation appreciation is recognized as income to the extent that it reverses the revaluation
purchase of the same asset previously associated with profit or loss.
If the carrying amount of an asset has decreased as a result of revaluation, this decrease is recognized as an
expense. However, this decrease is accounted within the scope of all types of receivable balances in revaluation
surplus related to this asset in other comprehensive income. This decrease in other comprehensive income
reduces the amount accumulated in equity under the heading of revaluation surplus (Note 17).
The depreciation of the revaluated buildings is included in the income statement. When the revaluated property
is sold or withdrawn, the remaining balance in the revaluation fund is transferred directly to undistributed
profits. No transfer is made from the revaluation fund to undistributed profits, unless the asset is derecognised.
ÇUHADAROĞLU METAL SANAYİ VE PAZARLAMA A.Ş. AND IT’S SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE
YEAR ENDED DECEMBER 31, 2019 (Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated)
13
2. BASIS OF PRESENTATION OF THE FINANCIAL STATEMENTS (continued)
D.Summary of Significant Accounting Policies (continued)
Tangible Fixed Assets (continued)
Revaluation Model(continued)
Assets that are under construction for leasing or administrative purposes or for other purposes not already
determined are reported by deducting the impairment loss, if any, from their cost values. Legal fees are included in the cost. Such assets, like the depreciation method used for other fixed assets, are
subject to depreciation when they are ready for use.
Cost Method
Vehicles, fixtures and other property, plant and equipment that are reported in tangible fixed assets are carried at
cost less accumulated depreciation and accumulated impairment losses.
Rental or administrative purposes, or for purposes not yet determined the course of construction assets are
carried at cost less any recognized impairment loss. The cost of legal fees are also included. Such assets, the
depreciation method used for other fixed assets, as well as when they are ready for use are depreciated.
Land and construction in progress, except for the cost of tangible fixed assets to their estimated useful lives are
amortized using the straight-line method. The estimated useful lives, residual values and depreciation method
are reviewed at each year for the possible effects of changes in estimates if a change in estimate being accounted
for on a prospective basis.
The gain or loss arising from the disposal of property, plant and equipment or the removal of a property, plant
and equipment from service is determined as the difference between the sales proceeds and the carrying amount
of the asset and is included in the income statement.
The economic life and depreciation method is regularly monitored and accordingly the method and the
depreciation rate are considered to be in line with the economic benefits to be gained from the related asset.
Intangible Fixed Assets
Purchased intangible assets
Purchased intangible assets are carried at cost less accumulated amortization and accumulated impairment losses.
These assets are amortized using the straight-line method based on their expected useful lives. The estimated
useful life and amortization method are reviewed at the end of each annual reporting period and the changes in the
estimates are accounted for on a prospective basis.
Development Costs
Project costs related to the development of new products or testing and design of developed products are considered as intangible assets if the project can be successfully applied commercially and technologically and the costs can be determined reliably. Other development and research costs are recorded as expense when realized. Development expense recorded in the previous period cannot be activated in the next period. Activated development expenses are amortized by applying the straight line method in 2-10 years after the commercial production of the product begins.
Computer Software
Purchased computer software is capitalized on the basis of costs incurred during the purchase and at the time of
purchase until ready for use.
ÇUHADAROĞLU METAL SANAYİ VE PAZARLAMA A.Ş. AND IT’S SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE
YEAR ENDED DECEMBER 31, 2019 (Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated)
14
2. BASIS OF PRESENTATION OF THE FINANCIAL STATEMENTS (continued)
D.Summary of Significant Accounting Policies (continued)
Intangible Fixed Assets (continued)
Derecognition of Intangible Assets
If an intangible asset is disposed of or if no future economic benefits are expected to be derived from its use or
sale, it will be excluded from the balance sheet. Any gain or loss arising from the derecognition of an intangible
asset is calculated as the difference between the net proceeds from disposal of assets and the book values, if any.
This difference is recognized in profit or loss when the asset is excluded from the balance sheet.
Investment Property
Investment property, rental income and / or capital appreciation is held in order to obtain the cost of the initial
values and are measured at cost, including transaction. Subsequent to initial recognition, investment property,
which reflects market conditions at the reporting date are measured at fair value.
Investment properties derecognised if they are sold or become unusable and it is determined that there will be no
future economic benefits from their sale. The retirement or disposal of an investment property and the profit /
loss is included in the income statement in the period.
Fair Value Method
The group, after the initial recognition process, has chosen the fair value model and all investment property have
been measured with fair value model (Note 16).
Gain or loss from the change in fair value of investment property is included in profit or loss within the period
of formation.
Transfers are made when there is a change in use of the investment property. Monitored on the basis of the fair
value of investment property, owner occupied property is a transfer to the transfer, the deemed cost for
subsequent accounting, the fair value of the aforementioned property at the date of change in use. Owner-
occupied property, will be shown on the basis of the fair value of an investment property in the event of
conversion, the company, up to the date of change in use " Property Plant And Equipment" applies the
accounting policies applied.
Right of Use Asset
The right to use asset is first accounted for using the cost method and includes:
a) Amount of the initial measurement of the lease liability,
b) Any lease payments made at or before the commencement date, less any lease incentives received
c) Any initial direct costs incurred by the Group and
d) An estimate of costs to be incurred by the lessee for restoring the underlying asset to the condition
required by the terms and conditions of the lease (unless those costs are incurred to produce inventories).
ÇUHADAROĞLU METAL SANAYİ VE PAZARLAMA A.Ş. AND IT’S SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE
YEAR ENDED DECEMBER 31, 2019 (Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated)
15
2. BASIS OF PRESENTATION OF THE FINANCIAL STATEMENTS (continued)
D.Summary of Significant Accounting Policies (continued)
Investment Property (continued)
Right of Use Asset (continued)
The Group re-measures the right of use asset:
a) After netting-off depreciation and reducing impairment losses from right of use asset
b Adjusted for certain re-measurements of the lease liability recognized at the present value.
The Group applies TAS16 “Property, Plant and Equipment” to amortize the right of use asset and to asses for
any impairment..
To determine whether the right of use asset is impaired and to recognize any impairment loss, IAS 36 applies
the "Impairment of Assets" standard
Lease Liabilities
The Group measures the lease liabilities at the present value of the lease payments that are not paid at the
commencement date.
The lease payments included in the measurement of the lease liability at the date of the lease actually consist of
the following payments to be made for the right to use the underlying asset during the lease period and which
have not been paid on the date the lease actually started.:
a) Fixed payments,
(b) Variable lease payments that depend on an index or a rate, initially measured using the index or rate as the commencement date,
(c) Amounts expected to be paid by the Group within the scope of residual value commitments
(d) The exercise price under a purchase option that the Group is reasonably certain to exercise,
(e) Penalties for early termination of a lease unless the Company is reasonably certain to terminate early. Variable lease payments that do not depend on an index or rate are recorded as expenses in the period when the event or condition that triggered the payment occurred.
The Group determines the revised discount rate for the remainder of the lease term as this rate if the implicit
interest rate in the lease can be easily determined.; if it cannot be determined easily, the Group determines the
alternative borrowing interest rate on the date of re-evaluation.
The Group measures the lease liability after the lease actually starts as follows:
(a) Increases the carrying amount to reflect interest on lease liability and,
(b) Reduces the carrying amount to reflect the lease payments made. In addition to that, remeasures the carrying
amount to reflect any reassessment or lease modifications or to reflect revised in-substance fixed lease payment.
Impairment of Assets
Assets that have an indefinite useful life such as goodwill are not subject to amortization. These assets are tested
for impairment annually. As for redeemable assets,impairment test is conducted in cases when book value
cannot be regained. If the carrying amount exceeds the recoverable amount of the asset provision is recognized
for the impairment. The recoverable amount is fair value less costs to sell or value in use is the one obtained.
For purposes
ÇUHADAROĞLU METAL SANAYİ VE PAZARLAMA A.Ş. AND IT’S SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE
YEAR ENDED DECEMBER 31, 2019 (Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated)
16
2. BASIS OF PRESENTATION OF THE FINANCIAL STATEMENTS (continued)
D.Summary of Significant Accounting Policies (continued)
Impairment of Assets (continued)
of assessing impairment, assets are grouped at the lowest level of identifiable cash flows (cash-generating units).
Non-financial assets other than goodwill that suffered impairment are reviewed for possible reversal of the
impairment at each reporting date.
Borrowing Costs
Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset
which requires substantial period of time to get ready for its intended use or sale shall be capitalized over the
cost of the asset. Other borrowing costs shall be recognized as an expense in the period it incurs.
Related Parties
The related parties of the Group include organizations that can directly or indirectly control or significantly
influence the other party through shareholding, contractual rights, family relations or similar means.
In the accompanying consolidated financial statements, the Group's shareholders and the companies owned by
these shareholders and their key management personnel and other companies known to be related are defined
as related parties.
In the presence of one of the following criteria, the party is considered associated with the Group:
i) through one or more intermediaries of that party, directly or indirectly:
- Controls the Group,or is controlled by the Group;
- Is under common control with, the Group (this includes parents, subsidiaries and fellow subsidiaries);
- Has an interest in the Group that gives it significant influence over the Group; or has joint control over the
Group;
ii) The party is an associate of the Group;
iii) The party is a joint venture in which the Group is a venture;
iv) The party is member of the key management personnel of the Group or its parent;
v) The party is a close member of the family of any individual referred to in (i) or (iv);
vi) the party is an entity that is controlled, jointly controlled or significantly influenced by, or for which
significant voting power in such entity resides with, directly or indirectly, any individual referred to in (iv)
or (v); or
vii) The party has a post-employment benefit plan for the benefit of employee of the Group, or of an entity
that is a related party of the Group.
The transaction with the related parties is the transfer of the resources, services or liabilities between the related
parties regardless of whether or not they are paid (Note 38).
Financial Assets
Financial assets that are bought and sold in the normal way are recorded or issued at the transaction date.
The Company classifies financial assets as the ones measured by reflecting the change in fair value to
comprehensive income or reflecting fair value to profit or loss with respect to (a) Business model used to
manage financial assets (b) Amortized cost of the financial asset based on contractual cash flows of the asset.
When an entity changes the business model, it uses only for the management of financial assets, it reclassifies
all financial assets affected by this change. Reclassification of financial assets is applied prospectively from
the
ÇUHADAROĞLU METAL SANAYİ VE PAZARLAMA A.Ş. AND IT’S SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE
YEAR ENDED DECEMBER 31, 2019 (Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated)
17
2. BASIS OF PRESENTATION OF THE FINANCIAL STATEMENTS (continued)
D.Summary of Significant Accounting Policies (continued)
Financial Assets (continued)
reclassification date. In such cases, no adjustments are made to earnings, losses (including impairment gains or
losses) or interests previously included in the financial statements.
Classification of Financial Assets
Financial assets meeting the following conditions are measured over their amortized costs:
• retaining the financial asset under a business model aimed at collecting contractual cash flows; and
• contractual conditions related to financial assets lead to cash flows that only include interest payments
arising from principal and principal balance on certain dates.
Financial assets that meet the following conditions are measured by reflecting the fair value change to other
comprehensive income:
• holding the financial asset under a business model that aims to collect contractual cash flows and sell the
financial asset; and
• contractual conditions related to financial assets lead to cash flows that only include interest payments
arising from principal and principal balance at certain dates.
If a financial asset is not measured at amortized cost or by reflecting fair value change in other comprehensive
income, fair value change is measured by reflecting profit or loss. For the first time in the financial statements, the Company may make an irreversible preference for the
subsequent changes in fair value of its investment in equity instruments that are not held for commercial
purposes in other comprehensive income.
(i) Amortised Cost and Effective Interest Method
Interest income for financial assets that are shown at amortized cost is calculated using the effective interest
method. The effective interest method is the method of calculating the amortized cost of a debt instrument and
distributing the interest income to the relevant period. This income is calculated by applying the effective
interest rate to the gross book value of the financial asset, except for:
a) Financial assets with credit-impairment when purchased or created. For such financial assets, the entity
applies the effective interest rate corrected according to credit to the amortized cost of the financial
asset, since it is included in the financial statements for the first time.
b) Financial assets that are not financial assets with credit-impairment when purchased or created, but
subsequently became financial assets with credit-impairment. For such financial assets, the entity applies
the effective interest rate to the amortized cost of the asset in subsequent reporting periods.
Interest income is accounted by using the effective interest method for debt instruments reflected in other
comprehensive income, amortized costs and fair value change in subsequent recognition.
Interest income is recognized in profit or loss and is shown in the item "financing income - interest income".
(ii) Financial assets with fair value reflected on profit or loss
ÇUHADAROĞLU METAL SANAYİ VE PAZARLAMA A.Ş. AND IT’S SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE
YEAR ENDED DECEMBER 31, 2019 (Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated)
18
2. BASIS OF PRESENTATION OF THE FINANCIAL STATEMENTS (continued)
D.Summary of Significant Accounting Policies (continued)
Financial Assets (continued)
Classification of Financial Assets (continued)
Are measured on amortized cost or financial assets that do not meet the criterion of fair value through other
comprehensive income are measured by reflecting fair value change to profit or loss.
Financial assets whose fair value change is reflected to profit or loss are measured at their fair values at the end
of each period and all fair value changes are accounted in profit or loss, unless relevant financial assets are part
of hedging transactions.
Foreign Exchange Gain or Loss
The book value of financial assets in foreign currency is determined by the relevant foreign currency and is
converted at the current exchange rate at the end of each reporting period. Especially,
• for financial assets that are shown at amortized cost an that are not part of a defined hedging transaction,
currency differences are recognized in profit or loss;
• foreign exchange differences calculated on the amortized costs of borrowing instruments that are not part of
a defined hedging transaction, measured at fair value through other comprehensive income, are recognized in
the period profit or loss. All other foreign exchange differences are recognized in other comprehensive
income;
• foreign exchange differences related to financial assets that are not part of a defined hedging transaction,
measured at fair value through profit or loss, are recognized in profit or loss for the period ; and
• foreign exchange differences of equity instruments measured at fair value through other comprehensive
income are recognized in other comprehensive income.
Impairment of Financial Assets
The Company reserves impairment in its financial statements for borrowing instruments, lease receivables, trade
receivables, assets arising from contracts with customers as well as expected credit losses related to investments
in financial collateral agreements, which are shown at amortized costs or measured at fair value through other
comprehensive income. Expected credit loss amount is updated to reflect the changes in credit risk since the
related financial asset is first included in the financial statements in each reporting period. The Company calculates the impairment provisions equal to the expected credit loss for the life of the related
financial assets, by making use of the simplified approach for commercial receivables, assets arising from
contracts with customers and lease receivables that are not important financial assets.
The Company recognizes lifetime expected credit losses for all other financial instruments since the first
recognition, if there has been a significant increase in credit risk. However, if the credit risk of the financial
instrument has not increased significantly since initial recognition, the Company recognises provision for the
loss, as much as the expected credit loss amount of 12 months for that financial instrument.
Measurement and Recognition of Expected Credit Losses
Measurement of expected credit losses is a function of probability of default, loss in default (eg loss of default if
there is default, and amount subject to risk in default. The probability of default and assessment of loss in
default is based on historical data, corrected with forward-looking information. The amount of financial assets
subject to risk in case of default is reflected on the gross book value of the related assets at the reporting date.
ÇUHADAROĞLU METAL SANAYİ VE PAZARLAMA A.Ş. AND IT’S SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE
YEAR ENDED DECEMBER 31, 2019 (Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated)
19
2. BASIS OF PRESENTATION OF THE FINANCIAL STATEMENTS (continued)
D.Summary of Significant Accounting Policies (continued)
Financial Assets (continued)
Measurement and Recognition of Expected Credit Losses (continued)
The expected credit loss of financial assets is the present value calculated over initial effective interest rate of
the difference between all of the cash flows to be realised as they are due and all of the cash flows the Company
expects to collect.
Derecognition of Financial Assets
The Company excludes the financial asset from the financial statement only when the contractual rights related
to the cash flows arising from the financial asset expire or when it transfers any risks and returns arising from
the financial asset and ownership of the financial asset to another enterprise.
When a financial asset measured at amortized cost is excluded from the financial statement, the difference
between the book value of the asset and the amount collected and to be collected is recognized in profit or loss.
In addition, in the exclusion of a debt instrument whose fair value change is reflected in other comprehensive
income, the total gain or loss previously accumulated in the revaluation fund for the relevant vehicle is
reclassified in profit or loss. In the event that an equity instrument that the Company prefers to measure by
reflecting the fair value change to other comprehensive income in the initial recognition, the total gain or loss
accumulated in the revaluation fund is not recognized in the profit or loss, but directly transferred to the
accumulated profits.
Financial Liabilities
The entity measures its financial liability at fair value for the first time when it is included in the financial
statements. At the first measurement of liabilities other than those whose fair value changes are reflected to
profit or loss, transaction costs that can be directly associated with their acquisition or issuance are also added to
the fair value.The entity classifies all its financial liabilities other than the following as measured from its
amortized cost in subsequent recognition.:
a. Financial liabilities at fair value through profit or loss: These liabilities are measured at fair value in
subsequent recognition, including derivatives.
b. Financial liabilities arising if the transfer of financial assets does not meet the derecognition conditions or
if the ongoing relationship approach is applied: In the event that the company continues to present an
asset in the financial statement to the extent of its ongoing relationship, it also reflects a related liability in
the financial statement. The transferred asset and the related liability are measured to reflect the rights and
obligations that the business continues to hold.Liability related to the transferred asset is measured in the
same manner as the net book value of the transferred asset.
c. Contingent consideration in the financial statements by the acquirer in a business combination where
TFRS 3 is applied: After being included in the financial statements for the first time, fair value changes in such
contingent consideration are measured by reflecting the profit or loss.
The entity does not reclassify any financial obligations.
Derecognition of Financial Liabilities
The Company's financial liabilities are excluded from the financial statements only when the Company's
liabilities are eliminated, canceled or expired. The difference between the carrying amount of the financial
liability excluded
ÇUHADAROĞLU METAL SANAYİ VE PAZARLAMA A.Ş. AND IT’S SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE
YEAR ENDED DECEMBER 31, 2019 (Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated)
20
2. BASIS OF PRESENTATION OF THE FINANCIAL STATEMENTS (continued)
D.Summary of Significant Accounting Policies (continued)
Financial Liabilities (continued)
Derecognition of Financial Liabilities (continued)
from the financial statement and the amount paid or to be paid, including the transferred non-cash assets or
liabilities assumed, is recognized in profit or loss.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, demand deposits with original maturities of 3 months from
the date of acquisition is less than 3 months, the risk of significant value change readily convertible to cash and
other short-term highly liquid investments (Note 6). Bank deposits with a maturity of more than 3 months and
less than 1 year are classified under short-term financial investments.
Trade Receivables
Trade receivables are accounted for at amortized cost in the financial statements.
Trade receivables that are created as a result of providing products or services to the buyer are recognized at
amortized cost using the effective interest method. Short-term receivables with no stated interest rate are
measured at the original invoice amount unless the effect of imputing interest is significant. A simplified
approach (is applied for the impairment of trade receivables, which are recognized at amortized cost in the
financial statements and which do not include a significant financing component (less than one year). In cases
where the trade receivables are not impaired due to certain reasons (except for the realized impairment losses),
the provisions for losses related to trade receivables are measured by an amount equal to the expected credit
losses. In case of collecting all or part of the receivable amount that is impaired following the provision for
impairment, the collected amount is deducted from the main activities to other income by deducting the amount
deducted from the provision for impairment. Income / expense related to commercial transactions and foreign
exchange gains / losses are accounted for under the other operating income / expenses in the consolidated
statement of profit or loss.
Trade Payables
Trade payables are payments to be made arising from the purchase of goods and services from suppliers within
the ordinary course of business. Trade payables are recognized initially at fair value and subsequently measured
at amortized cost using the effective interest method (Note 9)
Foreign currency transactions
The financial statements of the company were presented in the currency (functional currency unit) valid in the
basic economic environment in which it operates.
The Company's financial status and operating results are expressed in TL, which is the Company's current
currency and the presentation unit for the financial statements. During the preparation of the Company's financial statements, transactions in foreign currency (currencies other
than TL) are recorded based on the exchange rates at the date of the transaction.. Foreign currency indexed
monetary assets and liabilities in the balance sheet are converted into Turkish Lira by using the exchange rates
valid on the balance sheet date. Non-monetary items recognised in foreign currency that are monitored with their
fair value are converted into TL, based on the exchange rates on the date the fair value is determined. Non-
monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.
ÇUHADAROĞLU METAL SANAYİ VE PAZARLAMA A.Ş. AND IT’S SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE
YEAR ENDED DECEMBER 31, 2019 (Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated)
21
2. BASIS OF PRESENTATION OF THE FINANCIAL STATEMENTS (continued)
D.Summary of Significant Accounting Policies (continued)
Foreign currency transactions (continued)
Foreign exchange differences are recognized in profit or loss in the period they occur except for the following
situations:
- Exchange differences, which are related to assets being built for future use and which are considered as a
correction item to interest costs on debts denominated in foreign currency and included in the cost of such assets.,
- Exchange differences arising from transactions carried out to provide financial protection against risks arising
from foreign currency,
-
- Foreign exchange differences arising from foreign debt and receivables arising from foreign operations, which
are part of the net investment in foreign activity, accounted for in the reserve reserves and associated with profit or
loss in the sale of net investment, without intention to pay or probability.
Earnings Per Share
Earnings per share Earnings / loss amount, profit / loss, earnings per share from continuing operations / loss
amount, the continuing operations profit / loss for the period of time in the Company's shares is calculated by
dividing the weighted average number of common shares.
In Turkey, companies can increase their capital by "bonus shares" that they distributed to existing shareholders
from retained earnings. This type of "bonus share" distributions, earnings per share, are regarded as issued
shares. Accordingly, the weighted average number of shares used in the calculations, giving retroactive effect to
the stock in question is taken into consideration.
In the calculation of earnings per share, there are no preferred stock or potential shares with dilution effect that
will require to make the necessary corrections to the of, or None (Note 37).
Events after the Balance Sheet Date
Events after the balance sheet date are defined as, events that occur in favor or against the Company between
the approval date of the publication of the consolidated financial statements and the balance sheet date.
Whether to make a correction, according to the two types of situations can be identified:
- Adjusting events after the balance sheet, showing evidence of conditions that existed at the reporting date on
situations in which the conditions,
- About the events that are indicative of conditions that arose after the balance sheet date (non-adjusting events
after the balance sheet)
Adjusting events after balance sheet date have been recognized in the accompanying consolidated financial
statements of the Group, and non-adjusting events indicated in the balance sheet notes (Note 41).
ÇUHADAROĞLU METAL SANAYİ VE PAZARLAMA A.Ş. AND IT’S SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE
YEAR ENDED DECEMBER 31, 2019 (Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated)
22
2. BASIS OF PRESENTATION OF THE FINANCIAL STATEMENTS (continued)
D.Summary of Significant Accounting Policies (continued)
Provisions, Contingent Liabilities and Contingent Assets
Provisions
If there is a present legal or constructive obligation as a result of past events, and resources embodying
economic benefits to settle the obligation and it is probable that they kept the company is expected to have a
safe manner in the event of liability, provisions should be recognized in the consolidated financial statements.
The provisions are calculated by the Company's management with the most realistic estimates of the
expenditure required to settle the obligation at the balance sheet date, and are discounted to present value where
the effect is material.
Contingent Liabilities
Obligations under this group, within the control of the entity arising from past events, and the presence of one or
more uncertain future events on the realization of the non-existence, will be confirmed as the assessed liabilities.
Contingent liabilities are not included in the consolidated financial statements. Because, to settle the obligation,
Provisions, Contingent Liabilities and Contingent Assets (continued)
there are no possibility of an outflow of resources of embodying economic benefits or the amount of obligation
can not be measured with sufficient reliability. Contenget Liabilities are indicated in notes to the consolidated
financial statements unless the Too far from the entity of resources of embodying economic benefits are likely
to come out from entity (Note 24).
Contingent Assets
The Group within the control of the entity arising from past events, and the presence of one or more uncertain
events, which will be confirmed by the realization of assets, is considered as a contingent asset. If an inflow of
resources embodying economic benefits is not certain contingent assets described in the notes to the
consolidated financial statements..
The amount to be collected in cases where all or part of the economic benefits used to pay for the provision
amount is expected to be covered by third parties, is recognized and reported as an asset if the reimbursement of
this amount is certain and is calculated reliably.
Segment reporting
The reportable segment is an industrial segment or geographic segment where segment information must be
disclosed. Industrial segments are departments that have different characteristics from other departments of the
Group in terms of providing a certain good or service or a group of related goods or services, or in terms of risk
and benefit.
Government Grants
Government grants, are recognized in financial statements at fair value when there is reasonable assurance that
the entity will comply with the conditions attaching to them, and the grants will be received. (Note 22).
Government grants relating to costs are deferred and recognized in the income statement over the period
necessary to match them with the costs that they are intended to compensate.
Government grants relating to property, plant and equipment are included in non-current liabilities as deferred
government grants and are credited to the income statement on a straight- line basis over the expected lives of
the related assets.
ÇUHADAROĞLU METAL SANAYİ VE PAZARLAMA A.Ş. AND IT’S SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE
YEAR ENDED DECEMBER 31, 2019 (Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated)
23
2. BASIS OF PRESENTATION OF THE FINANCIAL STATEMENTS (continued)
D.Summary of Significant Accounting Policies (continued)
Taxation on Income
The tax expense for the year comprises current and deferred tax. Tax is recognized in the statement of profit or
loss, except to the extent that it relates to items recognized directly in equity. In such case, the tax is also
recognized in shareholders’ equity. (Note 36).
The current income tax charge is calculated in accordance with the tax laws enacted or substantively enacted at
the balance sheet date in the countries where the subsidiaries of the Group operate.
Deferred income tax is provided in full, using the liability method, on all temporary differences arising
between the tax bases of assets and liabilities and their carrying values in the consolidated financial
statements. However, except for business combinations, deferred tax assets or liabilities are not included in
the financial statements if assets and liabilities that do not affect both commercial and financial profit or loss
are included in the financial statements for the first time.
Deferred tax assets and liabilities are calculated over the tax rates expected to be applied in the period when
the tax asset is to be realized or the liability will be performed, taking into account the tax rates and tax
legislation that are in force or effective as of the reporting period.
The main temporary differences arise from the difference between the registered values of the tangible fixed
assets and tax values, tax deductions and exemptions that are not deductible / taxable, and unused.
Deferred tax liabilities are recognized for all taxable temporary differences, whereas deferred tax assets
resulting from deductible temporary differences are calculated to the extent that it is probable that future
taxable profit will be available against which the deductible temporary difference can be utilized.
Deferred tax assets and liabilities are offset against each other if the same country is subject to tax legislation and there is a legally enforceable right to offset current tax assets against current tax liabilities.
Employee Benefits and Severance Pay
Employment termination benefits, as required by the Turkish Labor Law and the laws applicable in the
countries where the subsidiaries operate, represent the estimated present value of the total reserve of the future
probable obligation of the Company arising in case of the retirement of the employees, termination of
employment without due cause, call for military service, be retired or death upon the completion of a
minimum one year service. Provision which is allocated by using defined benefit pension's current value is
calculated by using prescribed liability method. Actuarial gains and losses are recognized as other
comprehensive income or loss in shareholders’ equity in the period in which they arise (Note 26).
Reporting of cash flows
The Group organizes the cash flow statements to inform the users of the financial statements about the changes
in the net assets, the financial structure and the ability to direct the amount and timing of the cash flows
according to changing conditions. In the cash flow statement, cash flows for the period are classified and
reported based on operating, investment and financing activities.
Cash flows from operating activities are those resulting from the Group’s main activities. Cash flows from
investment activities indicate cash inflows and outflows resulting from property, plant and equipments and
financial investments. Cash flows from financing activities indicate the resources used in financing activities and
the repayment of these resources.
Cash and cash equivalents comprise of cash in hand accounts, bank deposits and short-term, highly liquid
investments that are readily convertible to known amounts of cash with maturities equal or less than three months.
ÇUHADAROĞLU METAL SANAYİ VE PAZARLAMA A.Ş. AND IT’S SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE
YEAR ENDED DECEMBER 31, 2019 (Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated)
24
2. BASIS OF PRESENTATION OF THE FINANCIAL STATEMENTS (continued)
Dividends
Ordinary shares, are classified as equity. Dividends payable are declared as an element of profit in the period are
reflected as liabilities in the financial statements
E. Evaluation of Significant Accounting Estimates and Assumptions
The preparation of consolidated financial statements requires management to affect the reported amounts of assets
and liabilities in the balance sheet at the date of the possible liabilities and commitments and the amounts of
revenue and expenses during the reporting period required to make certain assumptions and estimates. These
estimates and
assumptions are based on management's best knowledge of current events and transactions despite the actual
results may vary. Estimates are revised regularly and any necessary corrections are made and are reflected in the
income statement in the periods.
The key assumptions concerning the future, and other key sources of estimation uncertainty at the balance sheet
date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities
within the next financial year, are discussed below:
a) Severance pay provision calculates under actuerial estimations (discount rate, future salary increases and
employee leave rate)
b) Doubtful receivable provisions reflects future loss of possible uncollectible receivable amounts as at
balance sheet date.While the determination impariement of receivables, past performans of third party
receivables, market credibilities and performanses from balance sheet date until the confirmation of
financial statements taking into consideration.
c) While the determination provision for lawsuits, Company’s legal advisor’s and Company Management’s
opinions regarding possibility of lose lawsuits and liabilities in case of lose took into
consodiration.Company Managament determine lawsuit provision according to best estimations.
d) The Company Management have made important assumptions in accordance with the experience of its
technical team in determining the useful economic lives of tangible and intangible assets.
3. BUSINESS COMBINATIONS
None (31.12.2018: None).
4. SHARES IN OTHER ENTERPRISES
Subsidiaries Main Activity Location 31.12.2019 31.12.2018
Çuhadaroğlu Alüminyum
Sanayi ve Ticaret A.Ş.
Aluminum -
Commitment İstanbul 66,54% 66,54%
Effective Share Rate in Capital%
5. SEGMENT REPORTING
By the chief operating decision-making authority determined the operating segments based on internal reports
that are regularly reviewed.
The competent authority to decide the Group, to make decisions about resources to be allocated to
departments and divisions in order to evaluate the performance and results of operations on a product basis
ÇUHADAROĞLU METAL SANAYİ VE PAZARLAMA A.Ş. AND IT’S SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE
YEAR ENDED DECEMBER 31, 2019 (Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated)
25
5. SEGMENT REPORTING (continued)
and examines the basis of geographical distribution. The distribution of the Group's product lines are as
follows: Aluminium profiles and door and window manufacturing (“Metal Profile”), facades and architectural
applications (“Aluminum Commitment”).
Informations on operating segments of the Group are as follows:
ÇUHADAROĞLU METAL SANAYİ VE PAZARLAMA A.Ş. AND IT’S SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE
YEAR ENDED DECEMBER 31, 2019 (Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated)
26
5. SEGMENT REPORTING (continued)
31.12.2019 Metal Aluminium Commitment
Consolidation
Adjustments Total
Revenue 235.211.592 138.869.844 (22.428.734) 351.652.702
Cost of Salesi (-) (187.947.448) (130.290.145) 21.422.480 (296.815.113)
Gross Profit 47.264.144 8.579.699 (1.006.254) 54.837.589
General Administrative
Expense (-) (9.280.508) (9.171.041) 193 (18.451.356)
Marketing Expense (-) (25.134.775) (999.481) 124.099 (26.010.157)
Research and Development
Expense (-) (158.065) - - (158.065)
Other Operating Income 20.284.254 27.205.300 - 47.489.554
Other Operating Expense (-) (10.314.862) (33.895.502) 27.293 (44.183.071)
Operating Profit/Loss 22.660.188 (8.281.025) (854.669) 13.524.494
Income From Investing
Activities 1.028.302 678.223 (831.600) 874.925
Expense From Investing
Activities (-) - - - - Operating Profit/(Loss) Before
Financing Income
And Expenses23.688.490 (7.602.802) (1.686.269) 14.399.419
Financing Income 13.000 354.420 - 367.420
Financing Expenses (-) (255.389) (3.990.957) - (4.246.346)
ONGOING ACTIVITIES
PROFIT/LOSS
BEFORE TAX
23.446.101 (11.239.339) (1.686.269) 10.520.493
Tax Income/(Expense) From
Ongoing Activities
-Tax For Period (4.587.081) - - (4.587.081)
-Deferred Tax Income/
(Expense) 230.028 2.111.478 - 2.341.506
PROFIT/ (LOSS) FOR THE
PERIOD 19.089.048 (9.127.861) (1.686.269) 8.274.918
Investment Expenditures
Property, Plant and Equipment 3.917.863 4.242.759 (1.159) 8.159.463
Intangible Fixed Assets 2.785.251 9.331 - 2.794.582
Depreciation Expenses (6.608.964) (2.794.405) - (9.403.369)
Redemption (410.145) (184.970) - (595.115)
Other Details
-Assets Total 223.978.402 137.298.048 (58.570.103) 302.706.347
- Liabilities Total 223.978.402 137.298.048 (58.570.103) 302.706.347
ÇUHADAROĞLU METAL SANAYİ VE PAZARLAMA A.Ş. AND IT’S SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE
YEAR ENDED DECEMBER 31, 2019 (Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated)
27
5. SEGMENT REPORTING (continued)
31.12.2018 Metal
Aluminium
Commitment
Consolidation
Adjustments Total
Revenue 158.114.711 139.153.238 (21.655.792) 275.612.157
Cost of Salesi (-) (126.726.142) (135.269.462) 22.737.262 (239.258.342)
Gross Profit 31.388.569 3.883.776 1.081.470 36.353.815
General Administrative Expense (-)(8.576.451) (7.775.362) 88.284 (16.263.529)
Marketing Expense (-) (19.332.739) (1.232.197) - (20.564.936)
Research and Development Expense (-)(2.367.784) - - (2.367.784)
Other Operating Income 26.791.304 35.946.518 (368.658) 62.369.164
Other Operating Expense (-) (15.854.814) (41.894.603) 368.660 (57.380.757)
Operating Profit/Loss 12.048.085 (11.071.868) 1.169.756 2.145.973
Income From Investing Activities758.021 198.020 (756.000) 200.041
Expense From Investing Activities (-) - - - -
Operating Profit/(Loss) Before Financing
Income
And Expenses12.806.106 (10.873.848) 413.756 2.346.014
Financing Income 3.512.975 1.082.280 - 4.595.255
Financing Expenses (-) (7.739.157) (3.572.613) - (11.311.770)
ONGOING ACTIVITIES PROFIT/LOSS
BEFORE TAX
8.579.924 (13.364.181) 413.756 (4.370.501)
Tax Income/(Expense) From Ongoing
Activities
-Tax For Period (1.948.348) - - (1.948.348)
-Deferred Tax Income/ (Expense) 1.404.827 (145.347) - 1.259.480
PROFIT/ (LOSS) FOR THE PERIOD8.036.403 (13.509.528) 413.756 (5.059.369)
Investment Expenditures
Property, Plant and Equipment 7.242.760 2.651.490 (678) 9.893.572
Intangible Fixed Assets 213.847 179.067 - 392.914
Depreciation Expenses (6.258.978) (2.533.750) - (8.792.728)
Redemption (235.988) (208.524) - (444.512)
Other Details
-Assets Total 210.982.934 171.276.293 (55.243.991) 327.015.236
- Liabilities Total 210.982.934 171.276.293 (55.243.991) 327.015.236
ÇUHADAROĞLU METAL SANAYİ VE PAZARLAMA A.Ş. AND IT’S SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE
YEAR ENDED DECEMBER 31, 2019 (Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated)
28
5. SEGMENT REPORTING (continued)
Segment information related to customers constitutes more than 10% of the Group’s revenue within the periods
between 01.01.-31.12.2019 and 01.01.-31.12.2018 are as follows :
01.01.- 31.12.2019
Operation Segment Activity
Amount in Gross
Revenue
Share in Gross
Revenue
Aluminium Commitment Project Commitment 41.562.743 30%
Aluminium Commitment Project Commitment 36.775.199 26%
Aluminium Commitment Project Commitment 18.493.677 13%
Aluminium Commitment Project Commitment 17.771.718 13%
Aluminium Commitment Project Commitment 13.661.406 10%
01.01.- 31.12.2018
Operation Segment Activity
Amount in Gross
Revenue
Share in Gross
Revenue
Aluminium Commitment Project Commitment 48.778.508 35%
Aluminium Commitment Project Commitment 28.968.816 21%
Aluminium Commitment Project Commitment 24.734.465 18%
Aluminium Commitment Project Commitment 10.866.066 8%
6. CASH AND CASH EQUIVALENTS
31.12.2019 31.12.2018
Cash 60.521 65.711
Banks
-Demand Deposits 4.670.507 3.235.367
Time Deposits (Maturity less than 3 Months) 14.076.130 60.455.843
Other Cash and Cash Equivalents - 44.370
Total 18.807.158 63.801.291
31.12.2019 31.12.2018
TL Deposit 3.239.975 3.173.733
USD Deposit 11.237.682 58.650.324
EURO Deposit 4.268.980 1.867.153
Total 18.746.637 63.691.210
As of 31.12.2019 and 31.12.2018, details of time deposit are as follows:
Currency Interest Rate (%) Maturity 31.12.2019
TL 8,00 02.01.2020 2.900.000
USD 0,50 - 1,50 02.01.2020 - 13.01.2020 11.176.130
Time Deposits Total 14.076.130
ÇUHADAROĞLU METAL SANAYİ VE PAZARLAMA A.Ş. AND IT’S SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE
YEAR ENDED DECEMBER 31, 2019 (Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated)
29
6. CASH AND CASH EQUIVALENTS (continued)
Currency Interest Rate (%) Maturity 31.12.2018
TL 20,00 - 23,00 02.01.2019 2.681.551
USD 3,25-4,50 02.01.2019 - 21.01.2019 57.774.292
Time Deposits Total 60.455.843
There is not any blocked amount in bank accounts of the company. (31.12.2018 : None).
Information on the nature and level of risks in cash and cash equivalents disclosed in the note 39.
7. FINANCIAL INVESTMENTS
Short-Term Financial Investments
None (31.12.2018:None).
Long-Term Financial Investments
None (31.12.2018:None).
8. FINANCIAL BORROWINGS
Financial Borrowings
Weighted Effective
Interest Rate (%) 31.12.2019
Weighted Effective
Interest Rate (%) 31.12.2018
a) Bank Loans 0 - 3 9.179.294 1,25-6,84 12.513.469
b) Credit Cards - 2.146 - 1.283
Total 9.181.440 12.514.752
a) Bank Loans:
Currency
Average Interest
Rate (%)
Short Term
Short-Term Portion of Long
Term Loans
Long Term
TL - 1.167.316 - -
EUR 1,40 - 3,00 8.011.978 - -
Total 9.179.294 - -
31.12.2019
Currency
Average Interest
Rate (%) Short Term
Short-Term Portion of Long
Term Loans
Long Term
USD 3,95 1.329.234 - -
EUR 1,25 - 3,00 7.540.912 2.437.723 1.205.600
Total 8.870.146 2.437.723 1.205.600
31.12.2018
ÇUHADAROĞLU METAL SANAYİ VE PAZARLAMA A.Ş. AND IT’S SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE
YEAR ENDED DECEMBER 31, 2019 (Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated)
30
8. FINANCIAL BORROWINGS (continued)
31.12.2019 31.12.2018
Payable within one year 9.179.294 11.307.869
Payable within 1 - 2 years - 1.205.600
Payable within 2 - 3 years - -
Payable within 3 - 4 years - -
Payable within 4 - 5 years - -
Total 9.179.294 12.513.469
The fair value of short-and long-term debt is equal to the book value due to the effect of discounting is
immaterial.
ÇUHADAROĞLU METAL SANAYİ VE PAZARLAMA A.Ş. AND IT’S SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE
YEAR ENDED DECEMBER 31, 2019 (Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated)
31
9. TRADE RECEIVABLES AND PAYABLES
a) Trade Receivables:
As of balance sheet date, the details of Group's trade receivables are as follows:
Short Term Trade Receivables 31.12.2019 31.12.2018
Customers (*) 62.949.191 29.585.397
Notes Receivables and Postdated Checks (*) 10.934.337 29.809.270
Less: Unrealized Finance Income (436.817) (1.084.012)
Other Trade Receivables 10.252.715 9.369.102
Doubtful Trade Receivables (**) 10.278.700 7.732.195
Less: Provisions for Dobtful Trade Receivables (10.278.700) (7.732.195)
Income Accruals 69.998 (1.994)
Trade Receivables from Related Parties (Not 38) (*) 4.213 -
Total 83.773.637 67.677.763
As of 31.12.2019 the weighted avarage of interest rate respectivly 10,67 % and 1,91 % and 0,00 % used to
calculate unearned finance income for short-term trade receivables in term of TL, USD and EUR and weighted
avarage maturity is 73 days. (2018: 57 days).).
(*)Detail of maturities for short-term trade receivables and notes receivables are as follows:
Customers and Notes Receivables 31.12.2019 31.12.2018
1-3 Months 65.712.754 49.773.196
3-6 Months 7.670.774 6.880.187
6-9 Months 500.000 2.740.296
9-12 Months - 988
Total 73.883.528 59.394.667
Group has been received amounting to TL 13.416.585 colleteral for undued trade receivables. (31.12.2018: TL
6.868.392).
(**) Movement of the Group’s doubtful trade receivables provision table is as follow:
Doubtful Trade Receivables 31.12.2019 31.12.2018
Beginning Of Period 7.732.195 7.528.246
Term Expense 2.526.519 1.808.897
Currency Valuation 292.759 121.430
Minus: Canceled in the Period (272.773) (1.726.378)
End of Period 10.278.700 7.732.195
ÇUHADAROĞLU METAL SANAYİ VE PAZARLAMA A.Ş. AND IT’S SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE
YEAR ENDED DECEMBER 31, 2019 (Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated)
32
9. TRADE RECEIVABLES AND PAYABLES (continued)
Long Term Trade Receivables
None (31.12.2018: None).
The nature and level of risks of Trade payables are described in Note 39.
.
b) Trade Payables:
As of balance sheet date, the details of Group's trade payables are as follows:
Short Term Trade Payables 31.12.2019 31.12.2018
Suppliers (*) 30.780.067 23.700.336
Notes Payables (*) 3.842.172 6.883.307
Less: Unrealized Financing Expense (218.335) (408.171)
Subtotal 34.403.904 30.175.472
Trade Payables to Related Parties 29.984 -
Total 34.433.888 30.175.472
As of 31.12.2019 the weighted avarage of interest rate respectivly 10,67 % and 1,83 % and 0,00 % used to
calculate unearned finance expense for short-term trade payables in term of TL, USD and EUR and weighted
avarage maturity is 54 days. (2018: 42 days, TL % 22.92, USD % 2,49, EUR% 0,00).
(*) The maturity details of sellers' and debt securities are as follows:
Suppliers and Notes Payables 31.12.2019 31.12.2018
0-6 Months 34.652.223 30.583.643
6-9 Months - -
9-12 Months - -
Total 34.652.223 30.583.643
Long-Term Trade Payables
None (31.12.2018: None).
The nature and level of risks of Trade payables are described in Note 39
10. OTHER RECEIVABLES AND PAYABLES
Short-Term Other Receivables 31.12.2019 31.12.2018
Deposits and Guarantees Given 1.025.593 352.318
Due from Personnel 43.963 42.877
Other Miscellaneous Receivables 2.550.080 231.534
Subtotal 3.619.636 626.729
Due from Shareholders (Note 38) 40.775 10.998
Total 3.660.411 637.727
ÇUHADAROĞLU METAL SANAYİ VE PAZARLAMA A.Ş. AND IT’S SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE
YEAR ENDED DECEMBER 31, 2019 (Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated)
33
10. OTHER RECEIVABLES AND PAYABLES (continued)
As of 31 December 2019, there is no provision doubtful receivables for other receivables. (31.12.2018: None).
(**) Movement of the Group’s doubtful other receivables provision table is as follows::
Provision For Doubtful Trade Receivables 31.12.2019 31.12.2018
Beginning of Period - 3.619
Less: Cancelled within the Period - (3.619)
End of Period - -
Long-Term Other Receivables
None (31.12.2018: None).
Short-Term Other Payables 31.12.2019 31.12.2018
Taxes and Funds Payable 1.341.041 1.143.147
Other Payables 23.087 16.277
Total 1.364.128 1.159.424
Long-Term Other Payables
None (31.12.2018: None).
11. DERIVATIVE FINANCIAL INSTRUMENTS
None (31.12.2018: None).
12. INVENTORIES
31.12.2019 31.12.2018
Raw Materials 41.213.568 31.632.749
Semi-Manufactured 115.288 107.637
Finished Goods 35.875.522 17.136.716
Inventories Related to Project Commitments 1.123.247 3.829.825
Merchandise 7.286.728 7.666.072
Other Inventories 460.618 267.473
Provision for Inventories (488.677) (399.031)
Total 85.586.294 60.241.441
As of 31 December 2019, there is amounting to TL 21.389.660 insurance coverage for inventories. (31.12.2018:
TL 28.365.000).
As of 31 December 2019, there is not any inventory pledged as collateral for the loans (31.12.2018: None).
.
ÇUHADAROĞLU METAL SANAYİ VE PAZARLAMA A.Ş. AND IT’S SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE
YEAR ENDED DECEMBER 31, 2019 (Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated)
34
13. PREPAID EXPENSES AND DEFERRED REVENUES
Short-Term Prepaid Expenses 31.12.2019 31.12.2018
Advances Given for Inventories 1.175.256 10.953.916
Other Advances Given 391.838 26.697
Advances Given for Services 11.402.337 1.589.740
Prepaid Expenses for Future Months 521.171 643.369
Total 13.490.602 13.213.722
Long-Term Prepaid Expenses 31.12.2019 31.12.2018
Prepaid Expenses for Future Years 44.201 77.574
Total 44.201 77.574
Short-Term Deferred Income 31.12.2019 31.12.2018
Advances Received 81.112.308 119.815.731
Total 81.112.308 119.815.731
Long-Term Deferred Income
None (31.12.2018:None).
14. CONSTRUCTION CONTRACTS
31.12.2019 31.12.2018
Assets Related to Ongoing Construction Contracts 3.219.348 27.117.692
Total 3.219.348 27.117.692
The details of the assets related to the ongoing construction contracts are as follows:
31.12.2019 31.12.2018
Assets Related to Ongoing Construction Contracts
- Assets related to domestic construction contracts - -
- Unearned assets for domestic construction contracts (*) 3.219.348 27.117.692
(*) Unearned assets in order to obtain reasonable assurance that the Company will fulfill the necessary
conditions are formed, which may be taken out of the fair value of the consolidated financial statements on an
accrual basis.
.
31.12.2019 31.12.2018
Liabilities Related to Ongoing Construction Contracts 3.122.240 -
Total 3.122.240 -
The details of the liabilities related to the ongoing construction contracts are as follows:
31.12.2019 31.12.2018
Liabilities Related to Ongoing Construction Contracts
-Progress billing amounts related to ongoing construction contracts - -
- Amounts invoiced in excess related to ongoing construction contracts 3.122.240 -
Total 3.122.240 -
ÇUHADAROĞLU METAL SANAYİ VE PAZARLAMA A.Ş. AND IT’S SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE
YEAR ENDED DECEMBER 31, 2019 (Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated)
35
15. INVESTMENTS ACCOUNTED WITH EQUITY METHOD
None (31.12.2018:None).
16. INVESTMENT PROPERTIES
01.01.2019 31.12.2019
Cost Value
Opening
Balance
Increase in
Value Closing Balance
Land 510.000 - 510.000
Investment Property 510.000 - 510.000
01.01.2018 31.12.2018
Cost Value Opening BalanceIncrease in
ValueClosing Balance
Land 510.000 - 510.000
Investment Property 510.000 - 510.000
The fair value of investment properties of the Group is determined by independent valuation company Ekspertur
Gayrimenkul Değerleme ve Danışmanlık A.Ş. on 24 December 2017. The valuation company is authorized by
Capital Board of Turkey and it offers real estate valuation services under the legislation of capital market and it
has sufficient experience and qualifications for the fair value valuation of the regions concerned. The fair value
of the lands owned are determined by comparative approach which reflects current market trading prices for
similar real estates.
ÇUHADAROĞLU METAL SANAYİ VE PAZARLAMA A.Ş. AND IT’S SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE YEAR ENDED DECEMBER 31, 2019 (Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated)
36
17. TANGIBLE FIXED ASSETS
31.12.2019
Cost Value
Underground and
Overland Plants Buildings
Plants Machinery
and
Equipment
Vehicles Fixtures
Leasehold
Improvements
Ongoing
Investments
Total
Opening Balance 45.710 30.881.194 73.440.194 4.674.886 5.658.575 15.400.823 190.989 130.292.371
Purchases - - 2.341.514 2.308.237 745.280 187.411 2.577.021 8.159.463
Disposals - - (575.273) (1.209.365) (26.698) - (31.000) (1.842.336)
Transfers - - 33.440 156.477 - 739.776 (929.693) -
Closing Balance 45.710 30.881.194 75.239.875 5.930.235 6.377.157 16.328.010 1.807.317 136.609.498
Accumulated Amortisation
Opening Balance (40.031) (6.736.154) (46.538.205) (3.519.852) (3.123.635) (6.640.500) - (66.598.377)
Period Expense (2.782) (537.141) (5.052.661) (897.402) (927.084) (1.986.299) - (9.403.369)
Disposals - - 344.158 1.013.759 12.531 - - 1.370.448
Closing Balance (42.813) (7.273.295) (51.246.708) (3.403.495) (4.038.188) (8.626.799) - (74.631.298)
Tangible Fixes Assets, net
2.897 23.607.899 23.993.167 2.526.740 2.338.969 7.701.211 1.807.317 61.978.200
As of 31 December 2019, there is amounting to TL 100.655.810 insurance covarage on tangible fixed assets. (31.12.2018: TL 102.001.552)
ÇUHADAROĞLU METAL SANAYİ VE PAZARLAMA A.Ş. AND IT’S SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE YEAR ENDED DECEMBER 31, 2019 (Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated)
37
17. TANGIBLE FIXED ASSETS (continued)
Cost Value
Underground and
Overland Plants
Buildings
Plants Machinery
and
Equipment
Vehicles Fixtures
Leasehold
Improvements
Ongoing
Investments
Total
Opening Balance 45.710 30.881.194 68.303.196 4.912.478 5.111.804 8.025.932 4.046.353 121.326.667
Purchases - - 5.044.794 81.846 557.232 102.522 4.107.178 9.893.572
Disposals - - - (319.438) (10.461) - (524.543) (854.442)
Transfers - - 92.204 - - 7.272.369 (7.437.999) (73.426)
Closing Balance 45.710 30.881.194 73.440.194 4.674.886 5.658.575 15.400.823 190.989 130.292.371
Accumulated Amortisation
Opening Balance (33.569) (6.161.194) (41.618.844) (3.148.403) (2.227.547) (4.936.230) - (58.125.787)
Period Expense (6.462) (574.960) (4.919.361) (690.887) (896.788) (1.704.270) - (8.792.728)
Disposals - - - 319.438 700 - - 320.138
Closing Balance (40.031) (6.736.154) (46.538.205) (3.519.852) (3.123.635) (6.640.500) - (66.598.377)
Tangible Fixes Assets, net 5.679 24.145.040 26.901.989 1.155.034 2.534.940 8.760.323 190.989 63.693.994
31.12.2018
As of 31.12.2019 and 31.12.2018, there is not any property, plant and equipment purchased with financial leasing.
The fair value of buildings of the Group is determined by independent valuation company Rehber Gayrimenkul Değerleme ve Danışmanlık A.Ş. on 09 February
2018. The valuation company is authorized by Capital Board of Turkey and it offers real estate valuation services under the legislation of capital market and it has
sufficient experience and qualifications for the fair value valuation of the regions concerned. The fair value of the lands owned are determined by comparative
approach which reflects current market trading prices for similar real estates.
ÇUHADAROĞLU METAL SANAYİ VE PAZARLAMA A.Ş. AND IT’S SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE
YEAR ENDED DECEMBER 31, 2019 (Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated)
38
17. TANGIBLE FIXED ASSETS (continued)
Economic lifes of the tangible fixed assets are as follows :
Economic Life
Underground and Overland Plants 7-20 Years
Buildings 50 Years
Plants Machinery and Equipment 3-14 Years
Vehicles 4-10 Years
Fixtures 3-14 Years
Leasehold Improvements 5-14 Years
Total depreciation expenses for the current period is amounting to TL 9.403.369 (31.12.2018: TL 8.792.728).
Amounting to TL 7.023.279 (31.12.2018: TL 6.622.779) of this amount is included in cost of goods sold (Note
29), amounting to TL 1.321.198 (31.12.2018: TL 1.414.034) is included in marketing expenses, amounting to
TL 1.058.892 (31.12.2018: TL 633.622) is included in general aministrative expenses,amounting included in
research and development expenses : None (31.12.2018: TL 122.292) (Note 30).
18. INTANGIBLE FIXED ASSETS
Cost Value Rights
Research and
Development
Other Intangible
Fixed Assets
Total
Opening Balance 3.004.325 - 493.138 3.497.463
Purchases 1.154.944 1.624.215 15.423 2.794.582
Transfers from Construction in Progress
- - - -
Closing Balance 4.159.269 1.624.215 508.561 6.292.045
Accumulated Amortisation and Depletion
Expenses
Opening Balance (2.287.587) - (255.905) (2.543.492)
Period Expense (313.436) (158.065) (123.614) (595.115)
Closing Balance (2.601.023) (158.065) (379.519) (3.138.607)
Intangible Fixed Assets, net 1.558.246 129.042 3.153.438
31.12.2019
Cost Value Rights
Research and
Development
Other Intangible
Fixed Assets
Total
Opening Balance 2.677.374 - 373.265 3.050.639
Purchases 321.891 - 71.023 392.914
Çıkışlar 5.060 - 48.850 53.910
Closing Balance 3.004.325 493.138 3.497.463
Accumulated Amortisation and Depletion
Expenses
Opening Balance (1.965.033) - (133.947) (2.098.980)
Period Expense (322.554) - (121.958) (444.512)
Closing Balance (2.287.587) - (255.905) (2.543.492)
Intangible Fixed Assets, net 716.738 - 237.233 953.971
31.12.2018
ÇUHADAROĞLU METAL SANAYİ VE PAZARLAMA A.Ş. AND IT’S SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE
YEAR ENDED DECEMBER 31, 2019 (Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated)
39
18. INTANGIBLE FIXED ASSETS (continued)
Economic life of intangible fixed assets are as follows;:
Economic Life
Rights 3-15 years
Other Intangible Fixed Assets 5 years
Total redemption expenses for the current period is TL 595.115 (31.12.2018: TL 444.512). Amounting to TL
232.182 of this amount is included in cost of goods sold (Note 29) (31.12.2018: TL 277.128), amounting to TL
68.456 is included in marketing expenses (31.12.2018: TL 71.923), amounting to TL 136.412 is included in
general administrative expenses (31.12.2018 : TL 95.461),amounting to TL 158.065 is included in research and
development expenses) (Note 30).
19. GOODWILL
None. (31.12.2018: None.)
20. RIGHT OF USE ASSETS
Cost Value Factory Building Total Factory Building Total
TFRS 16 Opening Effect 26.280.000 26.280.000 26.280.000 26.280.000
Purchases - - - -
Closing Balance 26.280.000 26.280.000 26.280.000 26.280.000
Accumulated Amortisation
Opening Balance (5.255.104) (5.255.104) (2.627.104) (2.627.104)
Period Expense (2.628.000) (2.628.000) (2.628.000) (2.628.000)
Disposals - - - -
Closing Balance (7.883.104) (7.883.104) (5.255.104) (5.255.104)
Tangible Fixes Assets, net 18.396.896 18.396.896 21.024.896 21.024.896
01.01. - 31.12.2019 01.01. - 31.12.2018
The Total of current period depreciation expenses is TL 2.628.000 (31.12.2018: TL 2.628.000).
21. IMPAIRMENT OF ASSETS
31.12.2019 31.12.2018
Provision for Doubtful Trade Receivables (Note 9) 10.278.700 7.732.195
Provision for Inventory Impairement (Note 12) 488.677 399.031
Total 10.767.377 8.131.226
22. GOVERNMENT GRANTS
Incentive Details 31.12.2019 31.12.2018
Fair Incentive 288.728 216.223
Tübitak R&D Incentive 239.925 108.746
Market Research Incentive 22.153 10.356
Total 550.806 335.325
Government grants are shown under other income from operating activities (Note 32).
ÇUHADAROĞLU METAL SANAYİ VE PAZARLAMA A.Ş. AND IT’S SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE
YEAR ENDED DECEMBER 31, 2019 (Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated)
40
23. BORROWING COSTS
There is not any borrowing costs that directly related to construction, production or obtaining a featured asset.
(31.12.2018: None).
24. PROVISIONS, CONTINGENT ASSETS AND LIABILITIES
Short Term Debt Provisions 31.12.2019 31.12.2018
Provisions for Lawsuits 1.344.108 1.171.108
Total 1.344.108 1.171.108
Contingent Assets and Liabilities
Number Amount Number Amount
Ongoing Lawsuits in favor of Company 6 27.368.693 6 10.129.604
Lawsuits and Execution Proceedings in favor of
Company
43 16.347.395 26 4.690.331
Ongoing Lawsuits against Company 32 2.857.908 22 3.077.908
31.12.2019 31.12.2018
The Group has a contract as the subcontractor of projects Inistanbul Topkapı Phase 1-2-dated 24.10.2016 and
Phase 3-4 dated 08.02.2018 whose main contractors are İş Gayrimenkul Yatırım Ortaklığı A.Ş and Timur
Gayrimenkul Geliştirme Yapı ve Yatırım A.Ş. (“Timur”) with Sera Yapı Endüstrisi ve Ticaret A.Ş. (“Sera
Yapı”) who is the subcontractor of the project. Phases 1-2 are completed, Significant parts of phases 3-4 have
come to an end, related to this project, execution proceedings have been initiated against Sera Yapı in 2019
regarding the Group's receivables from Sera Yapı and total amount of USD 744.505 and TL 3.889.213 included
in the attached tables. By signing a protocol between Sera Yapı, Timur and the Group on 01.10.2019,
contracting parties have agreed that all of the receivables of the Group' from Sera Yapı and some of their
receivables not yet due will be undertaken by Timur, and some of them will be paid in cash and some by real
estate delivery. Some of the mentioned receivables have been collected, and as of 31.12.2019 the total amount
of current and collateral receivables that have not been collected yet is TL 7.988.047.
Regarding the amount of the receivable in question, in the scope of the protocol dated 01.10.2019 TL 4.000.000
have been collected, in the event that the collection of the balance part cannot be realized, Timur Gayrimenkul
Geliştirme Yapı ve Yatırım A.Ş. debt claims will be replaced action of debt. Since the Group Management
thinks that the receivable will be collected until 30.06.2020, no provision has been provided for these
receivables in the accompanying financial statements.
Collateral, Pledges, Mortgages, Bail
As of 31 December 2019 and 31 December 2018, the Group's collateral / pledge / mortgage and bail position are
as follows:
31.12.2019
USD EURO TL TL Equivalent
Guarantee Letters Received 1.419.038 326.451 14.787.579 25.388.044
Collateral Bill Received 20.149 - 4.548.151 4.667.840
Guarantee Checks Received - - 3.633.918 3.633.918
Mortgages - - 5.090.000 5.090.000
Total 1.439.187 326.451 28.059.648 38.779.802
ÇUHADAROĞLU METAL SANAYİ VE PAZARLAMA A.Ş. AND IT’S SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE
YEAR ENDED DECEMBER 31, 2019 (Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated)
41
24. PROVISIONS, CONTINGENT ASSETS AND LIABILITIES (continued)
31.12.2018
USD EURO TL TL Equivalent
Guarantee Letters Received 1.239.722 1.213.707 8.222.222 22.060.501
Collateral Bill Received 20.149 134.762 4.782.367 5.700.714
Guarantee Checks Received 277.595 - 5.116.021 6.576.421
Mortgages - - 3.350.000 3.350.000
Total 1.537.466 1.348.469 21.470.610 37.687.636
31.12.2019
CPMB's given by the Company (Collaterals,
Pledges, Mortgages, Bails) TL Equivalent USD EUR TL
A) CPMB’s given for Company’s own legal
personality 206.559.109
18.160.314
6.377.353 56.269.988
B) CPMB’s given on behalf of fully
consolidated companies
-
-
-
-
C) CPMB’s given on behalf of third parties for
ordinary course of business - - - -
D) CPMB's given within the scope of
Corporate Governance Communiqué's 12/2
clause - - - -
E) Total amount of other CPMB's - - - -
i) Total amount of CPMB's given on behalf of
majority shareholder - - - -
ii)Total amount of CPMB’s given on behalf of
other Group companies which are not in scope
of B and C - - - -
iii) Total amount of CPMB’s given on behalf
of third parties which are not in scope of C - - - -
Total 206.559.109
18.160.314 6.377.353
56.269.988
ÇUHADAROĞLU METAL SANAYİ VE PAZARLAMA A.Ş. AND IT’S SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE
YEAR ENDED DECEMBER 31, 2019 (Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated)
42
24. PROVISIONS, CONTINGENT ASSETS AND LIABILITIES (continued)
31.12.2018
CPMB's given by the Company (Collaterals,
Pledges, Mortgages, Bails) TL Equivalent USD EUR TL
A) CPMB’s given for Company’s own legal
personality 175.503.955 19.873.068 9.855.503 11.544.760
B) CPMB’s given on behalf of fully consolidated
companies - - - -
C) CPMB’s given on behalf of third parties for
ordinary course of business - - - -
D) CPMB's given within the scope of Corporate
Governance Communiqué's 12/2 clause
E) Total amount of other CPMB's
i) Total amount of CPMB's given on behalf of
majority shareholder - - - -
ii)Total amount of CPMB’s given on behalf of
other Group companies which are not in scope of
B and C - - - -
iii) Total amount of CPMB’s given on behalf of
third parties which are not in scope of C - - - -
Total 175.503.955 19.873.068 9.855.503 11.544.760
Other CPMB’s given by the Group ratio to Group’s equity is equal to % 0. (31.12.2018: % 0).
As of 31.12.2019 and 31.12.2018, the details of CPMB’s are as below;.
Collaterals 166.439.109 18.160.314 6.377.353 16.149.988
Mortgage 40.000.000 - - 40.000.000
Notes 120.000 - - 120.000
Total 206.559.109 18.160.314 6.377.353 56.269.988
USD EUR
Total
TL Equivalent
TLCollateral, Pledges, Mortgages, Bail
31.12.2019
ÇUHADAROĞLU METAL SANAYİ VE PAZARLAMA A.Ş. AND IT’S SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE
YEAR ENDED DECEMBER 31, 2019 (Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated)
43
24. PROVISIONS, CONTINGENT ASSETS AND LIABILITIES (continued)
Collaterals 170.944.878 19.304.079 9.615.675 11.424.760
Notes 120.000 - - 120.000
Cheque 4.439.077 568.989 239.828 -
Total 175.503.955 19.873.068 9.855.503 11.544.760
Total
TL Equivalent
USD
31.12.2018
EUR TLCollateral, Pledges, Mortgages, Bail
25. COMMITMENTS
None (31.12.2018: None).
26. EMPLOYEE BENEFITS
Short-Term Provisions Related to Employee Benefits 31.12.2019 31.12.2018
Unused Vacation Provision 2.452.951 1.947.550
Total 2.452.951 1.947.550
Long-Term Provisions Related to Employee Benefits 31.12.2019 31.12.2018
Severance Pay Provision 4.190.342 2.640.506
Total 4.190.342 2.640.506
Liabilities Related to Employee Benefits 31.12.2019 31.12.2018
Payables to Personnel 2.314.332 1.751.482
Social Security Premiums Payable 1.304.055 1.064.780
Total 3.618.387 2.816.262
Under the Turkish Legislations, the Company is required to pay termination benefits to each employee who has
completed one year of service and whose employment is terminated without due cause, is called up for military
service, dies or who retires after completing 25 years of service for men and reaches the retirement age 20 years
for woman (58 for women and 60 for men).
Retirement pay liability is not subject to any kind of funding legally. Provision for retirement pay liability is
calculated by estimating the present value of probable liability amount arising due to retirement of employees.
IAS 19 (“Employee Benefits”) stipulates the development of Company’s liabilities by using actuarial valuation
methods under defined benefit plans:
As at balance sheet date provisions calculated according to assumption % 7,00 expected salary increasing rate
and % 11,50 discount rate and about %4,21 real discount rate and retiring assumption as follows (31 December
2018: respectively % 9,30 % 15,20 and % 5,40)
31.12.2019 31.12.2018
Annual Discount Rate (%) 4,21 5,40
Possibility of Retirement (%) 93,64 89,8
ÇUHADAROĞLU METAL SANAYİ VE PAZARLAMA A.Ş. AND IT’S SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE
YEAR ENDED DECEMBER 31, 2019 (Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated)
44
26. EMPLOYEE BENEFITS (continued)
The main assumption, the maximum liability for each year of service will only grow in line with inflation.
Therefore, the discount rate applied represents the expected real rate after adjusting for the effects of future
inflation. Therefore, as of 31 December 2019 the accompanying financial statements provisions for the future
probably obligation arising from the retirement of employees is calculated by estimating the present value.
Severance pay ceiling amounting to TL 6.380 (31.12.2018: TL 5.434) used on calculation of retirement
pay provision with the effective from 01 July 2019.
The movement of provision for severance pay are as follows:
1 January- 31 December
2019
1 January-31
December 2018
Provision as at 1st January 2.640.506 1.936.995
Service Cost 591.534 599.077
Interest Cost 142.534 77.117
Severance Pay Cancelled (447.247) (403.520)
Defined Benefit Plans Remeasurement Gain / Loss (*) 1.263.015 430.837
Total Provision at the End of Period 4.190.342 2.640.506
(*) As at 31 December 2019, defined benefit plans remeasurement gain and losses amounting to TL 1.263.015
(31.12.2018: TL 430.837) is recognized in other comprehensive income statement.
The amounting to TL 285.821 (31.12.2018: TL 329.391) is included in general administrative expenses and
amounting to TL 448.247 (31.12.2018: TL 346.803) is included in the cost of goods produced
27. OTHER ASSETS AND LIABILITIES
Other Current Assets 31.12.2019 31.12.2018
Deferred VAT 2.911.486 2.438.096
Other VAT 643.521 292.545
Work Advances 97.006 83.059
Employee Advances - 9.641
Total 3.652.013 2.823.341
Other Fixed Assets 31.12.2019 31.12.2018
Future Expenses 44.201 77.574
Total 44.201 77.574
Other Short-Term Liabilities
None. (31.12.2018: None).
Other Long-Term Liabilities
None. (31.12.2018: None)
ÇUHADAROĞLU METAL SANAYİ VE PAZARLAMA A.Ş. AND IT’S SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE
YEAR ENDED DECEMBER 31, 2019 (Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated)
45
28. CAPITAL, RESERVES AND OTHER EQUITY COMPONENTS
a) Capital
As of 31 December 2019 and 31 December 2018, Company’s capital structure are as follows:
Shareholders Share Amount TL Share Rate Share Amount TL Share Rate
Murat Ruhi Çuhadaroğlu 23.082.917 32,40 23.082.917 32,40
Halil Nejat Çuhadaroğlu 23.082.917 32,40 23.082.917 32,40
Public section (*) 18.500.000 25,96 18.500.000 25,96
Sevim Çuhadaroğlu 6.584.166 9,24 6.584.166 9,24
Capital 71.250.000 100,00 71.250.000 100,00
Distinction from Share Capital - -
Paid-in Capital 71.250.000 100,00 71.250.000 100,00
31.12.2019 31.12.2018
(*) Group’s publicly traded portion of equity are being traded in BIST (Istanbul Stock Exchange)
The Company is subject to authorized capital system and the equity ceiling is TL 300.000.000.
Company’s paid in capital is amounting to TL 71.250.000. (31.12.2018: TL 71.250.000) Capital consist of
71.250.000 registered shares and each share has TL 1 nominal value and 6.200.000 pcs. of shares are
nominative A Group and 65.050.000 pcs. of shares are nominative B Group shares.
In general and extraordinary general meetings of the company, each of the group B shareholders are entitled to
vote 1 (one) and A group of shareholders are entitled to vote 15 (fifteen) except for the selection of board
members of each A group of shareholders.
If the board of directors consist of 5 members, 2 of them, if 6 or 7 members 3 of them, if 8 or 9 members 4 of
them are selected from the candidates nominated by A group of registered shares.
b)Share Premium / Discount 31.12.2019 31.12.2018
Share Premium / Discount 6.649.019 6.649.019
c) Other Comprehense Income or Expenses not to be Reclassified
to Profit or Loss 31.12.2019 31.12.2018
Defined Benefit Plans Re-measurement Gains / (Losses) (2.251.251) (1.324.891)
Revaluation and Classification Gains / (Losses) 17.591.537 17.591.537
Total 15.340.286 16.266.646
d) Restricted Reserves 31.12.2019 31.12.2018
Legal Reserves 18.694.408 18.131.949
Total 18.694.408 18.131.949
e) Retained Earnings/(Losses) 31.12.2019 31.12.2018
Extraordinary Reserves 88.713.649 78.026.925
Retained Earnings/(Losses) (57.131.737) (45.343.472)
Total 31.581.912 32.683.453
ÇUHADAROĞLU METAL SANAYİ VE PAZARLAMA A.Ş. AND IT’S SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE
YEAR ENDED DECEMBER 31, 2019 (Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated)
46
28. CAPITAL, RESERVES AND OTHER EQUITY COMPONENTS (continued)
f) Non-controlling Shares 31.12.2019 31.12.2018
Balance as at 1st January 8.692.750 13.254.208
Additions (84.057) (25.626)
TFRS 9 correction effect - (15.545)
Profit / (Loss) from Consolidated Participations (3.054.178) (4.520.287)
Total 5.554.515 8.692.750
Dividend Distribution
Listed companies distribute dividend in accordance with the Communiqué No, II-19.1 issued by the CMB
which is effective from February 1, 2014.
Companies distribute dividends in accordance with their dividend payment policies settled and dividend
payment decision taken in general assembly and also in conformity with relevant legislations. The communiqué
does not constitute a minimum dividend rate. Companies distribute dividend in accordance with the method
defined in their dividend policy or articles of incorporation. In addition, dividend can be distributed by fixed or
variable instalments and advance dividend can be paid in accordance with profit on interim financial statements
of the Company..
In accordance with the Turkish Commercial Code (TCC), unless the required reserves and the dividend for
shareholders as determined in the article of association or in the dividend distribution policy of the company are
set aside, no decision may be made to set aside other reserves, to transfer profits to the subsequent year or to
distribute dividends to the holders of usufruct right certificates, to the members of the board of directors or to
the employees; and no dividend can be distributed to these persons unless the determined dividend for
shareholders is paid in cash.
Equity inflation adjustment differences and registered values of extraordinary reserves can be used in bonus
capital increase, cash profit distribution or loss deduction. However, equity inflation adjustment differences will
be subject to corporate tax if used in cash profit distribution.
29. REVENUE
Sales Income (Net) 01.01.-31.12.2019 01.01.-31.12.2018
Aluminium Domestic Project Sales 100.269.595 120.908.373
Aluminium Overseas Project Sales 35.651.704 23.008.630
Aluminium Profile Sales 210.375.892 124.369.025
Accessory Sales 21.647.154 21.136.891
Interax Automatic Door Sales 11.167.379 7.894.088
Aluminum Joinery Sales 1.147.006 365.962
Scrap Sales 475.844 348.622
Interwall Sales 2.882.284 -
Other Sales 3.854.683 1.174.896
Total Revenue 387.471.541 299.206.487
Sales Return (-) (1.563.331) (886.908)
Sales Discounts (-) (34.255.508) (22.707.422)
Sales Income, Net 351.652.702 275.612.157
ÇUHADAROĞLU METAL SANAYİ VE PAZARLAMA A.Ş. AND IT’S SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE
YEAR ENDED DECEMBER 31, 2019 (Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated)
47
29. REVENUE (continued)
Cost of Sales (-) 01.01.-31.12.2019 01.01.-31.12.2018
Cost of Aluminium Project (127.881.837) (137.937.546)
Cost of Accessory (13.431.648) (12.046.595)
Cost of Aluminium Profile (131.185.362) (71.254.933)
Depreciation Expenses (5.993.592) (6.622.779)
Redemption Expenses (232.182) (656.346)
Cost of Aliminium Joinery (1.209.476) (350.915)
Unused Vacation Provision Expenses (244.202) (260.883)
Severance Pay Expenses (354.934) (346.803)
Automatic Door Cost (12.650.840) (8.959.679)
Cost of Interwall (2.953.633) -
Other Expenses (677.407) (821.863)
Cost of Sales (296.815.113) (239.258.342)
Gross Income / (Loss) 54.837.589 36.353.815
30. GENERAL ADMINISTRATIVE EXPENSES, MARKETING EXPENSES, RESEARCH AND
DEVELOPMENT EXPENSES
01.01.-31.12.2019 01.01.-31.12.2018
General Administartion Expenses (-) 18.451.356 16.263.529
Marketing Expenses (-) 26.010.157 20.564.936
Research and Development Expenses (-) 158.065 2.367.784
Total 44.619.578 39.196.249
General Administartion Expenses (-) 01.01.-31.12.2019 01.01.-31.12.2018
Personnel Expenses 10.998.136 9.562.039
Depreciation Expenses 1.058.892 634.022
Consultancy Expenses 704.149 846.273
Attendance Fee Expenses 653.732 745.777
Vehicle Rent Expenses 609.550 451.301
Rent Expenses 551.290 418.377
Travel and Accomodation Expenses 342.580 247.062
Severance Pay Provision Expenses 379.134 329.391
Unused Vacation Provision Expenses 261.199 243.500
Redemption Expenses 136.412 422.018
Other Expenses 2.756.282 2.363.769
Total 18.451.356 16.263.529
ÇUHADAROĞLU METAL SANAYİ VE PAZARLAMA A.Ş. AND IT’S SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE
YEAR ENDED DECEMBER 31, 2019 (Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated)
48
30. GENERAL ADMINISTRATIVE EXPENSES, MARKETING EXPENSES, RESEARCH AND
DEVELOPMENT EXPENSES (continued)
Marketing Expenses (-) 01.01.-31.12.2019 01.01.-31.12.2018
Personnel Expenses 10.228.253 10.727.355
Transportation Expenses 4.298.278 1.805.719
Depreciation Expenses 1.321.198 1.414.034
Exhibition and Fair Expenses 1.124.745 975.102
Travel and Accommodation Expenses 1.198.447 791.064
Commission Expenses 960.653 38.508
Rent Expenses 947.431 810.127
Sample Expenses 761.978 218.896
Export Expenses 682.211 381.441
Advertising and Promotion Expenses 509.915 451.058
Consultancy Expenses 182.798 289.534
Maintenance and Repair Expenses 266.508 284.639
Vehicle Rent Expenses 367.395 277.388
Vehicle Gasoline Expenses 301.443 273.673
Vehicle Expenses 285.453 243.726
Subscription/Contribution Expenses 109.740 228.878
Electricty, Water and Heating Expenses 323.375 213.443
Representation and Hospitaly Expenses 166.540 121.058
Redemption Expenses 68.456 96.923
Other Expenses 1.905.340 922.372
Total 26.010.157 20.564.936
Research and Development Expenses (-) 01.01.-31.12.2019 01.01.-31.12.2018
Depreciation Expenses 158.065 122.292
R&D Expenses - 330.257
Personnel Expenses - 1.264.166
Mould Expenses - 256.765
Consultancy Expenses - 124.469
Sample Expenses - 61.835
Redemption Expenses - 41.009
Rent Expenses - 35.990
Vehicle Rent Expenses - 23.667
Maintenance and Repair Expenses - 16.510
Transportaion Expenses - 16.080
Insurance Expenses - 13.987
Other Expenses - 60.757
Total 158.065 2.367.784
ÇUHADAROĞLU METAL SANAYİ VE PAZARLAMA A.Ş. AND IT’S SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE
YEAR ENDED DECEMBER 31, 2019 (Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated)
49
31. EXPENSES BY NATURE
Depreciation Expenses 01.01.-31.12.2019 01.01.-31.12.2018
Cost Of Sales 7.023.279 6.622.779
General Administration Expenses 1.058.892 634.022
Marketing Expenses 1.321.198 1.414.034
Research and Development Expenses - 122.292
Total 9.403.369 8.793.128
Redemption Expenses 01.01.-31.12.2019 01.01.-31.12.2018
Cost Of Sales 232.182 277.128
General Administration Expenses 136.412 95.461
Marketing Expenses 68.456 71.923
Research and Development Expenses 158.065 -
Total 595.115 444.512
Personnel Expenses 01.01.-31.12.2019 01.01.-31.12.2018
Salary and Wages 38.777.351 37.541.087
Social Security Expenses 6.335.527 5.722.292
Severance Pay Expenses 977.156 346.803
Unused Vacation Provision Expenses 505.401 260.883
Other Social Benefits 6.404.659 4.950.231
Total 53.000.094 48.821.296
ÇUHADAROĞLU METAL SANAYİ VE PAZARLAMA A.Ş. AND IT’S SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE
YEAR ENDED DECEMBER 31, 2019 (Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated)
50
32. OTHER INCOME AND EXPENSES FROM OPERATING ACTIVITIES
Other Income From Operating Activities 01.01.-31.12.2019 01.01.-31.12.2018
Exchange Difference Income 29.798.762 38.227.184
Unrealized Finance Income 1.302.347 1.291.535
Provisions No Longer Required 834.161 2.762.878
Price Difference Income 1.839.471 338.742
Late Charge Income 3.323.794 12.410.696
Interest Income 1.402.277 515.962
Insurance, Freight Income 4.596.357 2.497.993
Government Incentives and Grants 550.806 335.325
Other Income and Profit 3.841.579 3.988.849
Total 47.489.554 62.369.164
Other Expenses From Operating Activities 01.01.-31.12.2019 01.01.-31.12.2018
Exchange Difference Expense (-) (30.905.119) (41.743.196)
Unrealized Finance Expense (-) (844.988) (1.496.554)
Doubtful Receivable Provision Expense (-) (3.070.305) (2.599.141)
Lawsuit Provision Expense (-) (128.000) (380.108)
Late Charge Expense (-) (4.619.004) (10.742.404)
Lawsuit Expense (-) - (49.426)
Price Difference Expenses (-) (1.575.373) (418.445)
Other Expenses and Losses (-) (3.040.282) 48.517
Total (44.183.071) (57.380.757)
33. INCOME AND EXPENSES FROM INVESTING ACTIVITIES
Income from Investing Activities 01.01.-31.12.2019 01.01.-31.12.2018
Rent Income 2.518 -
Income from Fixed Assets Sales 872.407 200.041
Total 874.925 200.041
Expenses from Investing Activities
None (31.12.2018: None).
ÇUHADAROĞLU METAL SANAYİ VE PAZARLAMA A.Ş. AND IT’S SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE
YEAR ENDED DECEMBER 31, 2019 (Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated)
51
34. FINANCIAL INCOME AND EXPENSES
Financial Income 01.01.-31.12.2019 01.01.-31.12.2018
Exchange Difference Income from Bank Deposits 367.420 4.595.255
Total 367.420 4.595.255
Financial Expenses(-) 01.01.-31.12.2019 01.01.-31.12.2018
Loan Interest Expenses (-) (24.623) (200.311)
Interest and Commission Expense (-) (46.791) (22.306)
Exchange Difference Expense from Bank Deposits (-) (87.575) (7.319.922)
Project Financing Expense (-) (3.990.957) (3.572.613)
Other Financing Expense (-) (96.400) (196.618)
Total (4.246.346) (11.311.770)
35. NON-CURRENT ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS
None (31.12.2018: None).
36. INCOME TAXES
Current Assets Related to Period Tax 31.12.2019 31.12.2018
Prepaid Taxes and Funds 166.933 223.354
Non-Current Assets Related to Period Tax 31.12.2019 31.12.2018
Prepaid Taxes and Funds 4.644.241 5.018.471
Period Profit Tax Liability 31.12.2019 31.12.2018
Current Period Tax Liabilities 4.587.081 1.948.348
Less: Prepaid Taxes and Funds (3.099.762) (1.279.785)
Current Period Tax Liabilities 1.487.319 668.563
Tax Provision 31.12.2019 31.12.2018
Current Period Corporate Tax Provision (-) (4.587.081) (1.948.348)
Deferred Tax Provision Income / (Expense) 2.341.506 1.259.480
Total (2.245.575) (688.868)
Corporate Tax
The Group is subject to Turkish corporate tax. The estimated tax liabilities of the Group's results for the period
is recognized in the accompanying consolidated financial statements.
The corporate tax rate on taxable profit will be accrued after deduction of expense in determining accounting
profit and tax-exempt, non-deductible expenses, gains and other non-taxable income deductions (prior year
losses and investment incentives) on taxable income
The effective tax rate on 2019 is %22. (2018: %22).
The tax legislation provides for a temporary tax (prepaid tax) of 22% (22% in 2018) to be calculated and paid
based on earnings generated for each quarter. The amounts thus calculated and paid are offset against the final
tax liability for the year.Losses could be deducted from taxable profit within maximum 5 years. However could
not be deducted from previous year profits.
ÇUHADAROĞLU METAL SANAYİ VE PAZARLAMA A.Ş. AND IT’S SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE
YEAR ENDED DECEMBER 31, 2019 (Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated)
52
36. INCOME TAXES (continued)
Corporate Tax (continued)
According to the Corporate Tax Law, financial losses shown on the declaration can be deducted from the
corporate tax base of the period not exceeding 5 years. However financial losses cannot be carried back.
As stated in Article 91 of the Law No. 7061 published on the Official Gazette dated 5 December 2017,
numbered 7061, "Amendments to Certain Tax Laws and Other Certain Other Laws", pursuant to provisional
article 10 added to the Tax Act No.5520, the rate of 20% in the first paragraph shall be applied as 22% for the
corporate earnings of the taxation periods of the institutions in 2018, 2019 and 2020 (for the accounting periods
starting in the related year for the institutions appointed for the special accounting period).
In Turkey, there is not any certain consensus related to tax assessment. Companies prepares corporate tax
declerations until 1-25 April of following year. Tax declerations and legal accounting books could be
investigated and changed by Tax Office within 5 years.
Income Tax Withholding
In addition to corporate taxes, their share of the profit from the distribution of dividends in the event of the
company's income in the statements, including non-resident institutions and branches of foreign companies in
Turkey on any dividends distributed, except for the calculation of income tax withholding is required. Income
tax 24 April 2003 - 22 July 2006 was 10% in all companies. This rate is from 22 July 2006 2006/10731 15% by
the Council of Ministers. Undistributed dividends incorporated in share capital are not subject to income tax
withholding.
A reconciliation of income tax expense in the period are as follows:
31.12.2019 31.12.2018
Profit / (Loss) before Tax 10.520.493 (4.370.501)
Taxable Profit / (Loss) 10.520.493 (4.370.501)
Corporate Tax Rate (2019: % 22, 2018: % 22) 22% 22%
Calculated Tax (2.314.508) 961.510
Nonallowable Charges (2019: % 22, 2018: % 22) (57.599) (51.151)
Other 126.532 (1.599.227)
Total (2.245.575) (688.868)
Deferred Tax
Deferred tax is accounted for using the liability method in respect of temporary differences arising from
differences between the carrying amounts of assets and liabilities in the financial statements and the
corresponding tax basis used in the computation of taxable (statutory) profit.Deferred tax is calculated using tax
rates that have been enacted in the period in which assets acquired and/or liabilities carried out and included in
the statement of income as income or expense.
The tax rate used in the calculation of deferred tax assets and liabilities is 22% for the taxable income to be
realized between 2018 and 2020 and 20% for the following (31 December 2018: 2018-2020 22%), 20% for the
following).
ÇUHADAROĞLU METAL SANAYİ VE PAZARLAMA A.Ş. AND IT’S SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE
YEAR ENDED DECEMBER 31, 2019 (Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated)
53
36. INCOME TAXES (continued)
Deferred Tax (continued)
31.12.2019 31.12.2018 31.12.2019 31.12.2018
Deferred Tax Assets
Doubtful Receivables Provision 3.060.888 967.663 673.396 212.886
Book Value and Tax Basis Difference of Tangible
and Intangible Assets 438.463 433.339 87.693 86.668
Severance Pay Adjustment 4.190.342 2.640.506 838.069 528.101
Unused Vacation Provision 2.452.951 1.947.550 539.650 428.461
Loan Interest Accruals - 497 - 109
Unearned Interest Income 436.817 1.084.012 96.100 238.483
Cost Adjustment of Long Term Construction
Projects 220.893.910 88.725.347 48.596.660 19.519.576
Inventories Impairement 488.677 399.031 107.509 87.787
Lawsuit Provision 1.344.108 1.171.108 295.704 257.644
Other Adjustment 370 3.242 81 713
Total 233.306.526 97.372.295 51.234.862 21.360.428
Deferred Tax Liabilities
Increase on Revaluation (19.546.152) (19.546.152) (1.954.615) (1.954.615)
Book Value and Tax Basis Difference of Tangible
and Intangible Assets (9.840.900) (9.671.995) (1.631.468) (1.597.687)
Unerned Interest Expense (218.335) (408.171) (48.034) (89.798)
Income Adjustment of Long Term Construction
Projects (208.987.693) (84.954.599) (45.977.292) (18.690.012)
Other Adjustment (2.172) 2.502 (478) 550
Total (238.595.252) (114.578.415) (49.611.887) (22.331.562)
Deferred Tax Assets/(Liabilities), net (5.288.726) (17.206.120) 1.622.975 (971.134)
Deferred Tax Expense/(Income) 2.594.109 1.401.352
Included to Actuarial (Gain) / Loss Fund (252.603) (86.167)
Accounting Policy Change - (55.704)Deferred Tax Income/(Expense) for the Period 2.341.506 1.259.481
Deferred Tax
Temporary Differences Assets /(Liabilities)
Deferred tax movement table:
31.12.2019 31.12.2018
Reported as of January 1 (971.134) (2.372.487)
Change of Accounting Policy - 55.705
Revised January 1 (971.134) (2.316.782)
Debt / (Receivable) Record in Current Period Income Statement 2.341.506 1.259.480
Defined Benefit Plans Recalculation Earnings / Losses 252.603 86.167
End of Term 1.622.975 (971.134)
ÇUHADAROĞLU METAL SANAYİ VE PAZARLAMA A.Ş. AND IT’S SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE
YEAR ENDED DECEMBER 31, 2019 (Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated)
54
37. EARNINGS PER SHARE
01.01.-31.12.2019 01.01.-31.12.2018
Period Profit / (Loss) , Net 11.329.096 (539.082)
Weighted Average Number of Shares 71.250.000 71.250.000
Profit / (Loss) Per Share from Operating Activities 0,159 (0,008)
Diluted Profit / (Loss) Per Share from Operating Activities 0,159 (0,008)
38. RELATED PARTY DISCLOSURES
Transactions between subsidiaries and Company have been eliminated on consolidation and does not disclosed
in this note..
Details of transactions between the Group and other related parties are disclosed below.
ÇUHADAROĞLU METAL SANAYİ VE PAZARLAMA A.Ş. AND IT’S SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE YEAR ENDED DECEMBER 31, 2019 (Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated)
55
38. RELATED PARTY DISCLOSURES (continued)
Long Term Long Term
Balances with related parties
Non
Trade
Non
Trade
Trade
Non
Trade
Non
Trade
Related Parties
Çuhadaroğlu Yapı Taahhüt San. ve Tic. A.Ş. 4.213 - 29.984 - -
Shareholders
Murat Ruhi Çuhadaroğlu 40.775 9.198.448 - 10.998 10.512.448
Halil Nejat Çuhadaroğlu - 9.198.448 - - 10.512.448
Total 44.988 18.396.896 29.984 10.998 21.024.896
31.12.2018
Receivables Right of Use Assets
Short Term
31.12.2019
Receivables Right of Use Assets Payables
Short Term Short Term
(*) Group built a factory building over the land owned by Murat Ruhi Çuhadaroğlu and Halil Nejat Çuhadaroğlu, which are partners of the Group, according to
"Rent Equity Construction Contract" signed in 2014 and the protocol prepared in addition to this contract in 2016. The construction cost is to be met by Group and to
offset the lease cost payable over the fair value for a period of 10 years after completion of the construction. The factory building was completed in 2016 and
classified as prepaid expenses to related parties by being billed to shareholders.
ÇUHADAROĞLU METAL SANAYİ VE PAZARLAMA A.Ş. AND IT’S SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE YEAR ENDED DECEMBER 31, 2019 (Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated)
56
38. RELATED PARTY DISCLOSURES (continued)
Details of transactions between the Group and other related parties for the periods 01.01.- 31.12.2019 and 01.01.- 31.12.2018 between are disclosed as below:
Transaction between related parties
Purchase of
Services Sales of Services Purchase of Services Sales of Services
Related Parties
Çuhadaroğlu Yapı Taahhüt San. ve Tic. A.Ş. 148.995 3.683 138.600 1.251
Shareholders
Murat Ruhi Çuhadaroğlu - 45.660 - 31.598
Related Person
Kenan Aracı - - - 1.540
Total 148.995 49.343 138.600 34.389
01 January - 31 December 2019 01 January - 31 December 2018
ÇUHADAROĞLU METAL SANAYİ VE PAZARLAMA A.Ş. AND IT’S SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE
YEAR ENDED DECEMBER 31, 2019 (Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated)
57
38. RELATED PARTY DISCLOSURES (continued)
The Group’s senior managers are Chairman and Board and Board Members, general manager and vice general
manager. For the period 1 January – 31 December 2019 and 1 January – 31 December 2018, benefits provided
to top management s are as follows::
Benefits to Key Management Personnel 01.01-31.12.2019 01.01-31.12.2018
Benefits to Top Management 3.334.138 3.036.542
Total 3.334.138 3.036.542
39. QUALITIES AND LEVEL OF RISKS FROM FINANCIAL INSTRUMENTS
a) Equity Risk Method
The aims of Group are to be beneficial for all shareholders and maintaining the best capital combination to
reduce capital cost and keeping on entitiy when managing the capital. The Group's capital risk management,
calculating as disclosed in note 8 and 10 including loans, debts, and, respectively, of cash and cash equivalents
as disclosed in note 6 , paid-in capital, defined benefit plans, re-measurement gains / losses, capital reserves,
profit reserves and retained earnings / (loss) comprising shareholders' equity are taken into account and as
disclosed in note 28.
Group capital cost and each risks regarding capital evaulate by executives.According to the evaulate company
aim to equalise the capital structure by borrowing, redemption, dividend payment and issuance of shares.
The Group uses Liabilities / Equity rate while they follow capital sufficiency. This rate is found by net liabilities
divided by total equity. Net liabilities is counted by cash and cash equivalents minus total liabilities which
appears in balance sheet.
As of 31 December 2019 and 31 December 2018, equity rate to debts are as follows:
31.12.2019 31.12.2018
Total Payables 142.307.111 173.880.502
Less: Cash and Cash Equivalents (18.807.158) (63.801.291)
Net Debt 123.499.953 110.079.211
Total Eqıity 160.399.236 153.134.735
Debt/ Equity Ratio 0,77 0,72
Group management aims to achieve higher profitability and equity levels to manage the amount of existing
debt..
The current period capital risk management strategy of the Group does not differ compared to previous period.
b) Financial Risk Factors
The Group’s activities expose it to a variety of financial risks: market risk (including currency risk, fair
value interest rate risk, cash flow interest rate risk and price risk), credit risk and liquidity risk. The
Company’s overall risk management program focuses on the unpredictability of financial markets and
seeks to minimise potential adverse effects on the Group’s financial performance.
ÇUHADAROĞLU METAL SANAYİ VE PAZARLAMA A.Ş. AND IT’S SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE
YEAR ENDED DECEMBER 31, 2019 (Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated)
58
39. QUALITIES AND LEVEL OF RISKS FROM FINANCIAL INSTRUMENTS
b) Financial Risk Factors (continued)
b.1) Credit Risk
Financial losses due to Group’s receivables and financial assets which result from not implementing agreement
clauses related to financial assets by a customer or other party constitutes credit risk. Group try to decrease
credit risk by making operations with confidential parties and attain enough collateral.
Trade receivables contain lots of customers rathered on different sector and geographical area. Credit
consideration making over Custumer’s trade receivables permanently.
ÇUHADAROĞLU METAL SANAYİ VE PAZARLAMA A.Ş. AND IT’S SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE YEAR ENDED DECEMBER 31, 2019 (Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated)
59
39. QUALITIES AND LEVEL OF RISKS FROM FINANCIAL INSTRUMENTS (continued)
Cash and Cash
Equivalents
31.12.2019
Current Period
The maximum amount of exposure to credit risk at the end of the reporting
(A+B+C+D) (1)
- Total receivable that have been secured with collaterals, other credit - 13.416.585 - - - 13.416.585
A. Net book value of financial assets neither
overdue nor impaired (2)
4.213 83.769.424 40.775 3.619.636 18.746.637 106.180.685
B. Net Book Value of financial assets that are past due as at the end of reporting
period but not impaired
- - - - - -
C. Net Book Value of financial assets that are impaired (3) - - - - - -
- Overdue (gross book value) - 10.278.700 - - - 10.278.700
- Impairement (-) - (10.278.700) - - - (10.278.700)
- Net value guaranteed with collateral etc. - - - - - -
- Not overdue (gross book value) - - - - - -
- Impairement (-) - - - - - -
- Net value guaranteed with collateral etc. - - - - - -
D. Off balance sheet credit risk amount - - - - - -
18.746.637 3.619.636 106.180.685
Other PartiesBank Deposits
Receivables
Trade Receivables Other Receivables
4.213 83.769.424 40.775
TOTAL
Related Parties Other Parties Related Parties
ÇUHADAROĞLU METAL SANAYİ VE PAZARLAMA A.Ş. AND IT’S SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE YEAR ENDED DECEMBER 31, 2019 (Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated)
60
39. QUALITIES AND LEVEL OF RISKS FROM FINANCIAL INSTRUMENTS (continued)
Cash and Cash
Equivalents
31.12.2018
Previous Period
The maximum amount of exposure to credit risk at the end of the reporting
(A+B+C+D) (1)
- Total receivable that have been secured with collaterals, other credit - 6.868.392 - - - 6.868.392
A. Net book value of financial assets neither
overdue nor impaired (2)
- 67.677.763 10.998 626.729 63.691.210 132.006.700
B. Net Book Value of financial assets that are past due as at the end of reporting
period but not impaired
- - - - - -
C. Net Book Value of financial assets that are impaired (3) - - - - - -
- Overdue (gross book value) - 7.732.195 - - - 7.732.195
- Impairement (-) - (7.732.195) - - - (7.732.195)
- Net value guaranteed with collateral etc. - - - - - -
- Not overdue (gross book value) - - - - - -
- Impairement (-) - - - - - -
- Net value guaranteed with collateral etc. - - - - - -
D. Off balance sheet credit risk amount - - - - - -
626.729 10.998
Receivables
132.006.700
Trade Receivables Other Receivables
- 63.691.210 67.677.763
TOTAL
Bank DepositsRelated Parties Other Parties Related Parties Other Parties
(1) It was not considered collaterals taken which is raising credit reliability when the amounts was determined.
(2) All of the trade receivables are receivables from clients. The Group management predicted that It would not be encountered any problem regarding Collection of Receivables because of considering
their past experiences.
(3) The impairment test, the Group's customers, which is one of receivables determined by the management of doubtful receivables have been made in the framework of policy
ÇUHADAROĞLU METAL SANAYİ VE PAZARLAMA A.Ş. AND IT’S SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE
YEAR ENDED DECEMBER 31, 2019 (Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated)
61
39. QUALITIES AND LEVEL OF RISKS FROM FINANCIAL INSTRUMENTS (continued)
b) Financial Risk Factors (continued)
b.2) Liquidity Risk Management
Liquidity risk is that an entity will be unable to meet its net funding requirements The Group’s objective is to
maintain a balance between current assets and liabilities through close monitoring of payment plans and cash
projections. The Group manages short, medium and long term funding and liquidity management requirements
by maintaining adequate reserves, banking facilities and reserve borrowing facilities by continuously monitoring
forecast and actual cash flows and matching the maturity profile of financial assets and liabilities.
The table below summarizes the maturity profile of the Group’s financial liabilities based on contractual
payments. The Group does not have any derivative liabilities..
Tables related liquidity risk are as follows:
Book Value Up to 3 months (I) 3 to 12
months (II)
1 to 5 years (III Over 5 years
(IV)
Demand
Bank Loans 9.179.294 9.179.294 1.167.316 8.011.978 - - -
Trade Payables 34.433.888 34.433.888 27.967.245 6.466.643 - - -
Other Payables 1.364.128 1.364.128 1.341.041 23.087 - - -
- -
Terms According to Agreements
Non-derivative financial
liabilities44.977.310 44.977.310 30.475.602 14.501.708
Total Cash
Outflows According
to the Contracts
(=I+II+III+IV)
31.12.2019
-
Book Value Up to 3 months
(I)
3 to 12 months
(II)
1 to 5 years (III Over 5 years
(IV)
Demand
Bank Loans 12.513.469 12.513.469 6.028.000 5.279.869 1.205.600 - -
Trade Payables 30.175.472 30.175.472 24.183.367 5.992.105 - - -
Other Payables 1.159.423 1.159.423 1.143.147 16.276 - - -
1.205.600 -
Terms According to Agreements
Non-derivative financial
liabilities43.848.364 43.848.364 31.354.514 11.288.250 -
31.12.2018
Total Cash
Outflows
According to the
Contracts
(=I+II+III+IV)
ÇUHADAROĞLU METAL SANAYİ VE PAZARLAMA A.Ş. AND IT’S SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE
YEAR ENDED DECEMBER 31, 2019 (Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated)
62
39. QUALITIES AND LEVEL OF RISKS FROM FINANCIAL INSTRUMENTS (continued)
b) Financial Risk Factors (continued)
b.3) Market Risk Management
The market risk is the risk that the fair value or future cash flows of a financial instrument will flactuate because
of changes in market prices. Market risk comprises three types of risk; currency risk, interest rate risk and other
price risk.
In the current year, the Group's exposure to market risk or exposure risk management and assessment, has not
changed compared to the previous year.
.
b.3.1) Foreign Exchange Risk Management
Foreign currency transactions expose the Group to foreign currency risk. These risks are monitored and limited
by the analysis of foreign currency position.
The group's foreign currency denominated monetary and non-monetary assets and liabilities as of the date of the
balance sheet are as follows:
1. Trade Receivables 49.803.139 3.949.915 3.959.371 - 1.849
2a. Monetary Financial Assets 15.503.633 1.891.292 641.894 - -
2b. Non-Monetary Financial Assets 9.886.320 1.020.163 574.871 400 -
3. Other 8.016.804 250.863 980.986 321 -
4. Current Assets (1+2+3) 83.209.895 7.112.233 6.157.121 720 1.849
5. Non-Monetary Financial Assets - - - - -
6. Other - - - - -
7. Fixed Assets (5+6) - - - - -
8. Total Assets (4+6) 83.209.895 7.112.233 6.157.121 720 1.849
9. Trade Payables 10.126.322 1.191.099 458.749 - -
10. Financial Liabilities 8.011.978 - 1.204.700 - -
11a. Other Monetary Liabilities - - - - -
11b. Other Non-Monetary Liabilities 80.392.161 11.857.586 1.496.967 - -
12. Short-Term Liabilities (9+10+11) 98.530.460 13.048.685 3.160.416 - -
13. Financial Liabilities - - - - -
14. Long-Term Liabilities (13) - - - - -
15. Total Liabilities (12+14) 98.530.461 13.048.685 3.160.416 - -
16. Net Foreign Currency Assets /
(Liability)
Position (8-15
(15.320.566) (5.936.452) 2.996.705 720 1.849
17. Monetary Items Net Foreign
Currency
Asset / (Liability) Position
47.160.812 4.650.108 2.937.816 - 1.849
Euro Gbp AUD
31.12.2019
TL Equivalent
(Functional
Currency USD
ÇUHADAROĞLU METAL SANAYİ VE PAZARLAMA A.Ş. AND IT’S SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE
YEAR ENDED DECEMBER 31, 2019 (Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated)
63
39. QUALITIES AND LEVEL OF RISKS FROM FINANCIAL INSTRUMENTS (continued)
b) Financial Risk Factors (continued)
b.3) Market Risk Management (continued)
b.3.1) Foreign Exchange Risk Management (continued)
1. Trade Receivables 31.086.988 1.962.135 3.444.657
2a. Monetary Financial Assets 60.521.659 11.148.394 310.397
2b. Non-Monetary Financial Assets 9.426.655 901.887 776.695
3. Other 7.417.017 813.293 520.631
4. Current Assets (1+2+3) 108.452.319 14.825.709 5.052.380
5. Non-Monetary Financial Assets - - -
6. Other - - -
7. Fixed Assets (5+6) - - -
8. Total Assets (4+6) 108.452.319 14.825.709 5.052.380
9. Trade Payables 9.754.717 934.270 802.856
10. Financial Liabilities 11.261.425 250.000 1.650.000
11a. Other Monetary Liabilities - - -
11b. Other Non-Monetary Liabilities 109.084.095 15.086.358 4.929.707
12. Short-Term Liabilities (9+10+11) 130.100.236 16.270.628 7.382.563
13. Financial Liabilities 1.205.600 - 200.000
14. Long-Term Liabilities (13) 1.205.600 - 200.000
15. Total Liabilities (12+14) 131.305.837 16.270.628 7.582.563
16. Net Foreign Currency Assets / (Liability)
Position (8-15
(22.853.517) (1.444.919) (2.530.183)
17. Monetary Items Net Foreign Currency
Asset / (Liability) Position
69.386.907 11.926.259 1.102.198
TL Equivalent
(Functional Currency
31.12.2018
USD Euro
The Group is exposed to foreign exchange risk arising primarily with respect to transactions denominated in USD and EURO.
The following table details the Company’s sensitivity to a 10% increase and decrease in the TL against USD
and Euro. 10% is used in the reporting of currency risk to the key management and it represents the
management’s expectation on the potential exchange rate fluctuations. Sensitivity analysis can only made on the
year-end outstanding foreign currency denominated monetary items and it shows the year-end effects of the
10% of exchange currency fluctuation on the related items..
ÇUHADAROĞLU METAL SANAYİ VE PAZARLAMA A.Ş. AND IT’S SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE
YEAR ENDED DECEMBER 31, 2019 (Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated)
64
39. QUALITIES AND LEVEL OF RISKS FROM FINANCIAL INSTRUMENTS (continued)
b) Financial Risk Factors (continued)
b.3) Market Risk Management (continued)
b.3.1) Foreign Exchange Risk Management (continued)
Equity Equity
Foreign Foreign Foreign Foreign
currency
appreciation
currency
depreciation
currency
appreciation
currency
depreciation
1- U S Dollar net assets / liabilities (3.526.371) 3.526.371 - -
2- U S Dollar Hedged (-) - - - -
3- USD Dollar Net Effect (1+2) (3.526.371) 3.526.371 - -
4- EUR net assets / liabilities 1.992.989 (1.992.989) - -
5- EUR Hedged (-) - - - -
6- EUR Net Effect (4+5) 1.992.989 (1.992.989) - -
7- AUD net assets / liabilities 766 (766) -
8- AUD Hedged (-) - - -
9- AUD Net Effect (4+5) 766 (766) -
10- GBP net assets / liabilities 560 (560) - -
11- GBP Hedged (-) - - - -
12- GBP Net Effect (4+5) 560 (560) - -
TOTAL (3+6+9+12) (1.532.057) 1.532.057 - -
10% change in AUD against TL:
Exchange Rate Sensitivity Analysis Table
31.12.2019
10% change in USD against TL:
10% change in GBP against TL:
Profit/Loss
10% change in EUR against TL:
Equity Equity
Foreign Foreign Foreign Foreign
currency
appreciation
currency
depreciation
currency
appreciation
currency
depreciation
1- U S Dollar net assets / liabilities (760.157) 760.157 - -
2- U S Dollar Hedged (-) - - - -
3- USD Dollar Net Effect (1+2) (760.157) 760.157 - -
4- EUR net assets / liabilities (1.525.194) 1.525.194 - -
5- EUR Hedged (-) - - - -
6- EUR Net Effect (4+5) (1.525.194) 1.525.194 - -
TOTAL (3+6) (2.285.352) 2.285.352 - -
10% change in USD against TL:
10% change in EUR against TL:
Profit/Loss
Exchange Rate Sensitivity Analysis Table
31.12.2018
ÇUHADAROĞLU METAL SANAYİ VE PAZARLAMA A.Ş. AND IT’S SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE
YEAR ENDED DECEMBER 31, 2019 (Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated)
65
39. QUALITIES AND LEVEL OF RISKS FROM FINANCIAL INSTRUMENTS (continued)
b) Financial Risk Factors (continued)
b.3) Market Risk Management (continued)
b.3.1) Foreign Exchange Risk Management (continued)
The Group does not hedge its foreign exchange liabilities arising from operations through the use of derivative
financial instruments.
b.3.2) Interest Rate Risk Management
The value of a financial instrument will fluctuate as a result of changes in market prices. The Company’s
interest rate risk is primarily attributable to its borrowings. The interest-bearing financial liabilities have variable
interest rates, whereas the interest bearing financial assets have a fixed interest rate and future cash flows
associated with these financial instruments will not fluctuate in amount. The Company is subject to interest risk
due to financial liabilities and finance lease obligations. Policy of the Company is to manage this risk through
fixed and variable rates borrowings..
As of 31.12.2019 and 31.12.2018, Group’s interest position table is as follows:
31.12.2019 31.12.2018
Financial assets fair value differences reflected to profit / loss - -
Financial Assets Cash and Cash Equivalents 14.076.130 60.455.843
9.181.440 12.514.752
- -
- -
Floating-rate financial instruments
Financial Assets
Financial Liabilities
Interest Position Table
Fixed Rate Financial Instruments
Financial Liabilities
As at 31.12.2019, Group does not exposed to interest rate risk because does not has any variable interested financial instrument. (31.12.2018: None).
ÇUHADAROĞLU METAL SANAYİ VE PAZARLAMA A.Ş. AND IT’S SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE YEAR ENDED DECEMBER 31, 2019 (Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated)
66
40. FINANCIAL INSTRUMENTS (FAIR VALUE OF FINANCIAL RISK MANAGEMENT DISCLOSURES)
31 December 2019
Financial Assets
Cash and Cash Equivalents - - 18.807.158 18.807.158 6
Trade Receivables - - 83.773.637 83.773.637 9, 38
Financial Liabilities
Financial Payables - - 9.181.440 9.181.440 8
Trade Payables - - 34.433.888 34.433.888 9, 38
31 Aralık 2018
Financial Assets
Cash and Cash Equivalents - - 63.801.291 63.801.291 6
Trade Receivables - - 67.677.763 67.677.763 9, 38
Financial Liabilities
Financial Payables - - 12.514.752 12.514.752 8
Trade Payables - - 30.175.472 30.175.472 9, 38
Fair Value Differences measured by
reflecting in other comprehensive
income
Fair Value Differences
measured by reflecting
through P/L
Fair Value Differences measured
at amortised cost Book Value Notes
Group management thinks that the recorded values of financial instruments reflect their reasonable values.
ÇUHADAROĞLU METAL SANAYİ VE PAZARLAMA A.Ş. AND IT’S SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE
YEAR ENDED DECEMBER 31, 2019 (Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated)
67
40. FINANCIAL INSTRUMENTS (FAIR VALUE OF FINANCIAL RISK MANAGEMENT
DISCLOSURES (continued)
Financial Instrument fair values are determined as follows;
First Level: Financial Instruments valuated with market values of the similar instruments which traded on
active market.
Second Level: Financial Instruments valuated with data uses to find price which observable directly or
indirectly on the market in addition to first level.
Third Level: Financial Instruments valuated with data which not based on data uses to find fair value of the
instruments on the market..
There are no financial instruments that are shown at their fair values.
41. POST BALANCE SHEET EVENTS
None.
42. DISCLOSURE OF OTHER MATTERS
None (31.12.2018: None).