Emlak Konut Gayrimenkul Yatirim Ortakligi : CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD 1 JANUARY – 31 MARCH 2024

EMLAK KONUT GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş. AND ITS SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

FOR INTERIM PERIOD 1 JANUARY - 31 MARCH 2024 AND INDEPENDENT AUDITOR'S REPORT

(CONVENIENCE TRANSLATION OF

THE FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH)

INDEX	PAGE
INTERIM CONDENSED CONSOLIDATED STANDALONE STATEMENT OF FINANCIAL POSITION …………………	1-2
INTERIM CONDENSED CONSOLIDATED STANDALONE STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME………………………………………………………………………………………	3
INTERIM CONDENSED CONSOLIDATED STANDALONE STATEMENT OF CHANGES IN EQUITY…………………	4
INTERIM CONDENSED CONSOLIDATED STANDALONE STATEMENT OF CASH FLOWS……………………………	5
NOTES TO THE INTERIM CONDENSED CONSOLIDATED STANDALONE FINANCIAL STATEMENTS………………	6-44

NOTE 1	ORGANIZATION AND OPERATION OF THE COMPANY……………………………………………………….
NOTE 2	BASIS OF PRESENTATION OF THE STANDALONE FINANCIAL STATEMENTS…………………………………………………
NOTE 3	ACCOUNTING POLICIES…
NOTE 4	CASH AND CASH EQUIVALENTS…………………………………………………………………………………………..
NOTE 5	FINANCIAL LIABILITIES……………………………………………………………………………………………………………..
NOTE 6	TRADE RECEIVABLES AND PAYABLES …………………………………………………………………………………..
NOTE 7	OTHER RECEIVABLES AND PAYABLES…………………………………………………………………………………..
NOTE 8	INVENTORIES………………………………………………………………………………………………………..
NOTE 9	INVESTMENT PROPERTIES …………………………………………………………………………………..
NOTE 10	PROPERTY, PLANT AND EQUIPMENT………………………………………………………………………………
NOTE 11	INTANGIBLE ASSETS…………………………………………………………………………………..…………………………………
NOTE 12	PROVISIONS, CONTINGENT ASSETS AND LIABILITIES……………………………………………………………………………
NOTE 13	EMPLOYEE BENEFITS…………………………………………………………………………………..………………………………
NOTE 14	OTHER ASSETS……………………………………………………………………………………………………………..
NOTE 15	DEFERRED INCOME AND PREPAID EXPENSES…………………………………………………………………….
NOTE 16	SHAREHOLDERS' EQUITY……………………………………………………………………………………………….
NOTE 17	REVENUE AND COST OF SALES…………………………………………………………………………………..
NOTE 18	GENERAL ADMINISTRATIVE EXPENSES, MARKETING EXPENSES………………………………………………………………
NOTE 19	EXPENSE BY NATURE…………………………………………………………………………………..………………………………
NOTE 20	OTHER INCOME / EXPENSES FROM OPERATING ACTIVITIES ……………………………………………………………………
NOTE 21	FINANCIAL INCOME / EXPENSES…………………………………………………………………………………..
NOTE 22	TAX ASSETS AND LIABILITIES …………………………………………………………………………………..
NOTE 23	EARNING PER SHARE……………………………………………………………………………………
NOTE 24	RELATED PARTY DISCLOSURES…………………………………………………………………………………..
NOTE 25	COMMITMENTS…………………………………………………………………………………………………………..
NOTE 26	EVENTS AFTER THE REPORTING PERIOD…………………………………………………………………………………..

ADDITIONAL NOTE CONTROL OF COMPLIANCE WITH THE PORTFOLIO LIMITATIONS………………………………………………………………

6-7

8-12

13-14

15

16

17-18

18

19-23

23-24

25

26

26-29

30

31

31

32-33

33

34

35

35-36

36

37-39

39

40-42

43

43

44

EMLAK KONUT GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş.

AND ITS SUBSIDIARIES

INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS OF 31 MARCH 2024

(Amounts expressed in thousands of Turkish Lira	("TRY") in terms of	the purchasing power	of TRY as of
31 March 2024, unless otherwise stated.)
			Unaudited	Audited
			31 March	31 December
		Notes	2024	2023
	ASSETS
	Current assets		130,074,089	131,010,852
	Cash and cash equivalents	4	5,108,255	18,256,792
	Trade receivables	6	6,390,197	9,097,619
	Trade receivables due from related parties	24	2,802,042.00	4,333,685
	Trade receivables due from third parties		3,588,155	4,763,934
	Other receivables		485,825	1,133,409
	Other receivables due from related parties	24	62,560	82,401.00
	Other receivables due from third parties	7	423,265	1,051,008
	Inventories	8	100,032,541	95,800,691
	Prepaid expenses		15,858,498	4,099,452
	Prepaid expenses to related parties	24	12,118,562	-
	Prepaid expenses to third parties	15	3,739,936	4,099,452
	Other current assets	14	2,193,189	2,617,343
	Current tax assets	22	5,584	5,546
	Non-current assets		7,143,955	8,771,939
	Trade receivables	6	3,605,779	5,199,843
	Trade receivables due from third parties		3,605,779	5,199,843
	Other receivables	7	23,222	27,535
	Other receivables due from third parties		23,222	27,535
	Investments accounted for using equity method		3,470	1,555
	Investment properties	9	2,101,667	2,147,518
	Right-of-use assets		4,852	5,583
	Property, plant and equipment	10	1,325,760	1,303,329
	Intangible assets		79,205	69,880
	Deferred tax assets	22	-	16,696
	Total assets		137,218,044	139,782,791

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

1

EMLAK KONUT GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş.

AND ITS SUBSIDIARIES

INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS OF 31 MARCH 2024

(Amounts expressed in thousands of Turkish Lira	("TRY") in terms of	the purchasing power	of TRY as of
31 March 2024, unless otherwise stated.)
			Unaudited	Audited
			31 March	31 December
		Notes	2024	2023
	LIABILITIES AND EQUITY
	Current liabilities		69,795,710	71,600,625
	Short-term borrowings	5	841,325	1,208,497
	Short-term portions of long-term borrowings	5	2,286,087	2,511,502
	Lease liabilities	5	944	1,086
	Bank Loans	5	2,285,143	2,510,416
	Trade payables	6	2,947,829	4,684,117
	Trade payables due to related parties	24	218,210	-
	Trade payables due to third parties	6	2,729,619	4,684,117
	Other payables	7	1,682,005	1,353,583
	Other payables to related parties	24	602	690
	Other payables to third parties		1,681,403	1,352,893
	Deferred income	15	61,670,093	61,419,421
	Deferred income from related parties	24	3,594,990	4,046,814
	Deferred income from third parties		58,075,103	57,372,607
	Short-term provisions		368,371	423,505
	Short-term provisions for employee benefits	13	102,215	121,250
	Other short-term provisions	12	266,156	302,255
	Non-current liabilities		1,489,329	2,330,802
	Long-term borrowings	5	597,626	1,460,122
	Long-term borrowings from related parties		5,640	6,490
	Lease liabilities		5,640	6,490
	Bank Loans	5	591,986	1,453,632
	Trade payables	6	369,086	425,165
	Trade payables due to third parties		369,086	425,165
	Other payables	7	301,311	242,254
	Other payables to third parties		301,311	242,254
	Deferred income	15	56,378	64,034
	Deferred income from third parties		56,378	64,034
	Long-term provisions		142,505	139,227
	Long-term provisions for employee benefits	13	142,505	139,227
	Deferred tax liability	22	22,423	0
	Shareholders' equity		65,933,005	65,851,364
	Total equity attributable to equity holders of the Company	65,933,005	65,851,364
	Paid-in capital	16	3,800,000	3,800,000
	Adjustment to share capital		40,076,884	40,076,884
	Treasury shares (-)		(51,522)	(51,522)
	Share premium (discounts)		23,056,326	23,056,326
	Other equity reserves		(1,386,070)	(1,386,070)
	Restricted reserves appropriated from profit		6,921,820	6,921,820
	Retained earnings		(6,566,074)	(1,878,021)
	Net (loss) / profit for the year		81,641	(4,688,053)
	Non-controlling interests		-	-
	Total liabilities and equity		137,218,044	139,782,791

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

2

EMLAK KONUT GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş. AND ITS SUBSIDIARIES

INTERIM CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 MARCH 2024 AND 2023

(Amounts expressed in thousands of Turkish	Lira	("TRY") in terms	of the purchasing	power of TRY as of
31 March 2024, unless otherwise stated.)
				Unaudited	Unaudited
				1 January-	1 January-
			Notes	31 March 2024	31 March 2023
	Revenue		17	2,254,884	9,196,216
	Cost of sales (-)		17	(1,314,969)	(7,395,486)
	Gross profit			939,915	1,800,730
	General administrative expenses (-)		18	(543,314)	(1,851,414)
	Marketing expenses (-)		18	(85,326)	(102,757)
	Other income from operating activities		20	697,978	318,576
	Other expenses from operating activities (-)		20	(130,210)	(1,857,439)
	Operating profit			879,043	(1,692,304)
	Income from investing activities			-	-
	Operating profit before financial			879,043	(1,692,304)
	income / (expense)
	Financial income		21	1,040,065	462,484
	Financial expenses (-)		21	(400,814)	(464,914)
	Monetary gain/(loss)			(1,397,534)	(1,497,356)
	Profit from continuing operations, before tax		120,760	(3,192,089)
	Tax (expense)/income from continuing operations	(39,119)	(22,903)
	Current period tax expense		22	-	-
	Deferred tax income		22	(39,119)	(22,903)
	Net (loss) / profit for the period			81,641	(3,214,992)
	Profit for the period is attributable to:
	Non-controlling interests			-	-
	Owners of the Company			81,641	(3,214,992)
	Total comprehensive (loss) / income	for	the	81,641	(3,214,992)
	period
	Total comprehensive income is attributable to:
	Non-controlling interests			-	-
	Owners of the Company			81,641	(3,214,992)
	Earnings per share			0.0002	(0.0082)

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

3

EMLAK KONUT GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş. VE BAĞLI ORTAKLIKLARI

INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 1 JANUARY - 31 MARCH 2024 AND 2023

(Amounts expressed in thousands of Turkish Lira ("TRY") in terms of the purchasing power of TRY as of 31 March 2024, unless otherwise stated.)

									Other Accumulated
									Comprehensive
									Income and Expense
									not to be Reclassified to
									Profit or Loss	Retained Earnings
				Adjustment to		Share	Other estricted reserves	Gain/Loss on		Net profit	Equity
			Share	Share	Treasury	premium/	Equity	appropriated	remeasurement of	Retained	for the	attributable controlling	Total
			capital	capital	shares (-)	discounts	Reserves	from profit	defined benefit plans	earnings	period	to the parent	interests	equity
1 January 2023			3,800,000	40,076,884	(2,602,035)	23,056,326	-	6,750,279	-	(1,308,024)	1,041,395	70,814,825	-	70,814,825
Transfers			-	-	-	-	-	170,367	-	871,028	(1,041,395)	-	-	-
(Increase)/decrease due	to	share	-	-	(340,563)	-	51,029	-	-	-	-	(289,534)	-	(289,534)
repurchase transactions(*)
Dividend			-	-	-	-	-	-	-	(1,465,163)	-	(1,465,163)	-	(1,465,163)
Total comprehensive income		-	-	-	-	-	-	-	-	(3,214,993)	(3,214,993)	-	(3,214,993)
31 March 2023			3,800,000	40,076,884	(2,942,598)	23,056,326	51,029	6,920,646	-	(1,902,159)	(3,214,993)	65,845,135	-	65,845,135
1 January 2024			3,800,000	40,076,884	(51,522)	23,056,326	(1,386,070)	6,921,820	-	(1,878,021)	(4,688,053)	65,851,364	-	65,851,364
Transfers			-	-	-	-	-	-	-	(4,688,053)	4,688,053	-	-	-
Total comprehensive			-	-	-	-	-	-	-	-	81,641	81,641	-	81,641
income/(expense)
31 March 2024			3,800,000	40,076,884	(51,522)	23,056,326	(1,386,070)	6,921,820	-	(6,566,074)	81,641	65,933,005	-	65,933,005

(*) As of 31 March 2023, it shows the effect of purchase/sale considering the orders matched during the period for the shares repurchased.

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

4

EMLAK KONUT GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş. AND ITS SUBSIDIARIES

INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED 1 JANUARY 31 MARCH 2024 AND 2023

(Amounts expressed in thousands of Turkish Lira ("TRY") in terms	of the purchasing power of	TRY as of
31 March 2024, unless otherwise stated.)
		Unaudited	Unaudited
		1 January-	1 January-
	Notes	31 March 2024	31 March 2023
Cash flows from operating activities
Profit for the period		81,641	(3,214,992)
Adjustments related to reconcile of net profit for the period
Adjustments related to depreciation and amortization expenses	9,10, 11	77,680	51,406
Adjustments related to tax expense (income)	22	39,119	22,903
Adjustments related to (reversal of) impairments (net)		220,189	861,305
Adjustments related to (reversal of) impairment of inventories (net)	8, 17	220,189	861,305
Adjustments related to provisions		(7,914)	203,701
Adjustments related to (reversal of) provisions for employee benefits		(2,398)	42,120
Adjustments related to (reversal of) provision for lawsuit and/or penalty	12, 17	7,760	161,361
Adjustments related to (reversal of) provisions for possible risks	17	(13,276)	220
Adjustments for interest (income) and expenses		(865,683)	(315,091)
Adjustments for interest income	20, 21	(1,208,493)	(740,948)
Adjustments for interest expense	20, 21	342,810	425,857
Adjustments related to (gain) loss on disposal of property		-	1,207,091
Monetary gain / loss		2,520,543	1,207,091
Net cash from operations before changes in assets and liabilities		2,065,575	(1,183,677)
Changes in net working capital:
Adjustments related to (increase)/decrease in trade receivable		2,638,627	(80,671)
Decrease/(increase) in trade receivables from related parties		1,027,123	-
Decrease/(Increase) in trade receivables from third parties		1,611,504	(80,671)
Adjustments related to decrease/(increase) in inventories		(4,452,039)	193,540
Adjustments related to increase/(decrease) in trade payables		(924,486)	(1,576,274)
Increase/(decrease) in trade payables to related parties		504,622	(1,343,463)
Increase/(decrease) in trade payables to third parties		(1,429,108)	(232,811)
Adjustments related to decrease/(increase) in other receivables related to operations		(10,735,862)	(882,378)
Adjustments related to increase/(decrease) in other payables related to operations		886,702	7,029,640
Adjustments related to other increase/(decrease) in working capital		(76,629)	(298,243)
Net cash flows from operating activities
Interest received		124,230	124,830
Payments related to provisions for employee benefits		(5,875)	(7,395)
Cash flows from operating activities		(10,479,757)	3,319,372
Purchases of investment properties, property, plant and equipment and intangible assets	9, 10	(63,586)	(50,237)
Cash flows from investing activities		(63,586)	(50,237)
Payments to acquire entity's shares or other equtiy instruments		-	(289,534)
Proceeds from Borrowings		828,689	4,208,890
Proceeds from Loans		-	2,280,773
Proceeds from Issue of Debt Instruments		828,689	1,928,117
Repayments of borrowings		(1,586,166)	(1,599,539)
Loan Repayments		(627,528)	(565,101)
Payments of Issued Debt Instruments		(958,638)	(1,034,438)
Interest paid		(255,712)	(441,848)
Dividends paid		-	(1,465,163)
Interest received		761,471	458,159
Cash flow from financing activities		(251,718)	870,965
Inflation impact on cash and cash equivalents		(2,239,904)	(1,311,705)
Net increase (decrease) in cash and cash equivalents		(13,034,965)	2,828,395
Cash and cash equivalents at the beginning of the period	4	17,109,529	10,019,470
Cash and cash equivalents at the end of the period	4	4,074,564	12,847,865

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

5

EMLAK KONUT GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş. AND ITS SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2024

(Amounts expressed in thousands of	Turkish Lira ("TRY") in terms of the purchasing power of TRY as of
31 March 2024, unless otherwise stated.)

NOTE 1 - ORGANIZATION AND OPERATION OF THE GROUP

Emlak Konut Gayrimenkul Yatırım Ortaklığı A.Ş. ("Emlak Konut GYO" or the "Group") was established on 26 December 1990 as a subsidiary of Türkiye Emlak Bankası A.Ş. The Group is governed by its articles of association, and is also subject to the terms of the decree law about Public Finances Enterprises No. 233, in accordance with the statute of Türkiye Emlak Bankası A.Ş. The Group has been registered and started its activities on 6 March 1991. The Group's articles of association were revised on 19 May 2001 and it became an entity subject to the Turkish Commercial Code No. 4603.

The Company was transformed into a Real Estate Investment Company with Senior Planning Committee Decree No. 99/T-29, dated 4 August 1999, and according to Statutory Decree No. 588, dated 29 December 1999. According to Permission No. 298, dated 20 June 2002, granted by the Capital Markets Board ("CMB") regarding transformation of the Company into a Real Estate Investment Company and permission No. 5320, dated 25 June 2002, from the Republic of Turkey Ministry of Industry and Trade and amendment draft for the articles of association of the Company was submitted for the approval of the Board and the amendment draft was approved at the Ordinary General Shareholders Committee meeting of the Company convened on 22 July 2002, changing the articles of association accordingly.

The articles of association of the Company were certified by Istanbul Trade Registry Office on 29 July 2002 and entered into force after being published in Trade Registry Gazette dated 1 August 2002. As the result of the General Shareholders committee meeting of the Company convened on 28 February 2006, the title of the Company "Emlak Gayrimenkul Yatırım Ortaklığı A.Ş." was changed to "Emlak Konut Gayrimenkul Yatırım Ortaklığı A.Ş."

By the decision of the Board of Directors of Istanbul Stock Exchange Market on 26 November 2010, 25% portion of the Company's class B shares with a nominal value of TRY625,000 has been trading on the stock exchange since 2 December 2010.

The registered address of the Group is Barbaros Mah. Mor Sümbül Sok. No: 7/2 B (Batı Ataşehir) Ataşehir - İstanbul. As of 31 March 2024, the number of employees of the Group is 1,123 (31 December 2023 - 1,142).

The objective and operating activity of the Company is coordinating and executing real estate property projects mostly housing, besides, commercial units, educational units, social facilities, and all related aspects, controlling and building audit services of the ongoing projects, marketing and selling the finished housing. Due to statutory obligation to be in compliance with the Real Estate Investment Companies decrees and related CMB communiqués, The Company cannot be a part of construction business, but only can organize it by auctioning between the contractors.

The consolidated financial statements on 31 March 2024 have been approved by the Board of Directors on 14 June 2024.

The ultimate parent and ultimate controlling party of the Group is T.C. Toplu Konut İdaresi Başkanlığı (the Housing Development Administration of Turkey, "TOKİ"). TOKİ is a state institution under the control of Republic of Turkey Ministry of Enviroment Urbanisation and Climate Change.

Emlak Konut GYO will be referred to as the "Group" with its subsidiaries and interests in joint ventures.

6

EMLAK KONUT GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş.

AND ITS SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2024

(Amounts expressed in thousands of	Turkish Lira ("TRY") in terms of the purchasing power of TRY as of
31 March 2023, unless otherwise stated.)

NOTE 1 - ORGANIZATION AND OPERATION OF THE GROUP (Continued)

Subsidiaries

Subsidiaries of Emlak Konut GYO operate in Turkey and their main operations are as follows:

Subsidiaries				Main Operations
Emlak Planlama, İnşaat, Proje Yönetimi ve Tic. A.Ş. ("EPP")		Real Estate Investments
Emlak Konut Asansör Sistemleri Sanayi ve Ticaret A.Ş.		Production, Sales and Marketing
	31 March 2024		31 December 2023
	Direct and		Effective	Direct and	Effective
	indirect	ownership rate	indirect	ownership rate
	ownership rate		(%)	ownership rate	(%)
Emlak Planlama İnşaat Proje Yönetimi ve Ticaret A.Ş.	100		100	100	100
Emlak Konut Asansör Sistemleri Sanayi ve Ticaret A.Ş.	100		100	100	100

Shares in Joint Operations

Shares in Joint Operations of Emlak Konut GYO operate in Turkey and their main operations are as follows:

Shares in Joint Operations			Main Operations
Dap Yapı İnşaat Sanayi ve Ticaret A.Ş. ve Eltes İnşaat Tesisat
Sanayi ve Ticaret A.Ş.Ortak Girişimi -
Emlak Konut GYO A.Ş. (" İstmarina AVM Adi Ortaklığı")	Shopping Mall and Office Management
Büyükyalı Tesis Yönetimi A.Ş		Shopping Mall and Office Management
	31 March 2024	31 December 2023
	Direct and		Direct and
	indirect	Effective	indirect	Effective
	ownership rate	ownership rate	ownership rate	ownership rate
	(%)	(%)	(%)	(%)
Merkez Cadde Yönetim A.Ş.	30	30	30	30
İstmarina AVM Adi Ortaklığı	40	40	40	40
Büyükyalı Tesis Yönetimi A.Ş.	37	37	37	37

7

EMLAK KONUT GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş. AND ITS SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2024

(Amounts expressed in thousands of	Turkish Lira ("TRY") in terms of the purchasing power of TRY as of
31 March 2023, unless otherwise stated.)

NOTE 2 - BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS

2.1. Basis of Presentation

The accompanying standalone financial statements of the Company have been prepared in accordance with the communiqué numbered II-14,1 "Communiqué on the Principles of Financial Reporting In Capital Markets" ("the Communiqué") which is published on Official Gazette numbered 28676 dated 13 June 2013 and Turkish Financial Reporting Standards and appendices and interpretations related to them adopted by the Public Oversight Accounting and Auditing Standards Authority ("POA") have been taken as basis. TFRS is updated through communiqués in order to comply with the changes in the Turkish Financial Reporting Standards (TFRS).

The interim condensed consolidated financial statements are presented in accordance with the formats specified in the "Communiqué on TFRS Taxonomy" published by the POA on 15 April 2019 and the Illustrations of Financial Statements and Application Guidance published by the CMB.

The Group maintains its books of account and prepares its statutory financial statements in accordance with the principals issued by CMB, the Turkish Commercial Code ("TCC"), tax legislation and the Uniform Chart of Accounts issued by the Ministry of Finance. The consolidated financial statements have been prepared on the basis of historical cost, with the necessary adjsutments and classifications reflected in the statutory records in accordance with TFRS.

Basis of Consolidation

The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company and its subsidiaries. Control is achieved when the Company:

• has the ability to use its power to affect its returns
• is exposed, or has rights, to variable returns from its involvement with the investee; and
• has the ability to use its power to affect its returns

The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above.

When the Company has less than a majority of the voting rights of an investee, it has power over the investee when the voting rights are sufficient to give it the practical ability to direct the relevant activities of the investee unilaterally. The Company considers all relevant facts and circumstances in assessing whether or not the Company's voting rights in an investee are sufficient to give it power, including:

• The size of the Company's holding of voting rights relative to the size and dispersion of holdings of the other vote holders;
• Potential voting rights held by the Company, other vote holders or other parties;
• Rights arising from other contractual arrangements

Any additional facts and circumstances that indicate that the Company has, or does not have, the current ability to direct the relevant activities at the time that decisions need to be made, including voting patterns at previous shareholders' meetings.

8