Halk Gayrimenkul Yatirim Ortakligi : 30.06.2022 - Solo Independent Auditor’s Report

HALK GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş.

UNCONSOLIDATED FINANCIAL STATEMENTS AS OF 30 JUNE 2022 AND INDEPENDENT AUDITOR'S REVIEW REPORT

(CONVENIENCE TRANSLATION OF FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH)

(CONVENIENCE TRANSLATION OF THE REVIEW REPORT ON

INTERIM FINANCIAL INFORMATION ORIGINALLY ISSUED IN TURKISH)

REPORT ON REVIEW OF INTERIM

FINANCIAL STATEMENTS

To the General Assembly of Halk Gayrimenkul Yatırım Ortaklığı A.Ş.

Introduction

We have reviewed the accompanying financial statements of Halk Gayrimenkul Yatırım Ortaklığı A.Ş. which comprise the statement of financial position as at 30 June 2022, and the statement of profit or loss and other comprehensive income, statement of changes in equity, statement of cash flows for the six- months period then ended and a summary of significant accounting policies and other explanatory notes. The Company management is responsible for the preparation and presentation of this consolidated interim financial information in accordance with Turkish Financial Reporting Standards (TFRS). Our responsibility is to express a conclusion on this consolidated interim financial information based on our review.

Scope of Review

We conducted our review in accordance with Independent Auditing Standard on Review Engagements (ISRE) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity". A review of consolidated interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters and applying analytical and other review procedures. A review of interim consolidated financial information is substantially less in scope than an audit conducted in accordance with Independent Auditing Standards and consequently the review of consolidated interim financial information does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, has come to our attention that causes us to believe that the accompanying consolidated interim financial information is not prepared, in all material respects, in accordance with Turkish Financial Reporting Standards (TFRS).

Other Matters

As detailed in Note 28, we draw attention to the following matters from which the Parent Bank ("Bank") can be affected:

On 15 October 2019, the United States ("USA") New York Southern District Attorney's Office filed a lawsuit against the Bank in the Southern District Court of New York ("District Court") for violation of Iran sanctions. Criminal case pending before the District Court is pending due to appeal filed by the Bank under the "Foreign State Immunity Act (FSIA)". The Bank's appeal process to the U.S. Supreme Court continues.

In addition, a civil lawsuit was filed against the Parent Bank on 27 March 2020 with a claim for compensation by plaintiffs in the U.S. New York Southern District Court "on the grounds that they (plaintiffs) could not satisfy their judgments from Iran due to violations of sanctions". The District Court dismissed the case. The complainants filed an appeal against the court decision before the Second Appeal, and the process continues.

At this stage, the Parent Bank's Management state that there is no penalty, compensation, sanction or other measure arising from the ongoing criminal and civil lawsuits against the Parent Bank. There is an uncertainty with respect to any decisions by the US authorities that may adversely affect the financial position of the Parent Bank. No provision has been made in the accompanying consolidated financial statements related to these matters. Our opinion is not modified in respect of these matters.

Additional paragraph for convenience translation to English

In the accompanying interim condensed consolidated financial statements, the accounting principles described in Note 2 (defined as Turkish Accounting Standards/Turkish Financial Reporting Standards) differ from International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board with respect to the application of inflation accounting. Accordingly, the accompanying interim condensed consolidated financial statements are not intended to present the financial position and results of operations in accordance with IFRS.

DRT BAĞIMSIZ DENETİM VE SERBEST MUHASEBECİ MALİ MÜŞAVİRLİK A.Ş.

Member of DELOITTE TOUCHE TOHMATSU LIMITED

Zere Gaye Şentürk

Partner

Istanbul, 12 August 2022

INDEX		PAGE
UNCONSOLIDATED STATEMENT OF FINANCIAL POSITION	1-2
UNCONSOLIDATED STATEMENT OF PROFIT OR LOSS AND
OTHER COMPREHENSIVE INCOME	3
UNCONSOLIDATED STATEMENT OF CHANGES IN EQUITY	4
UNCONSOLIDATED STATEMENT OF CASH FLOWS	5
NOTES TO THE UNCONSOLIDATED FINANCIAL STATEMENTS	6-68
NOTE 1	ORGANIZATION AND OPERATIONS OF THE COMPANY	6-7
NOTE 2	BASIS OF PRESENTATION OF THE FINANCIAL STATEMENTS	7-28
NOTE 3	INTERESTS IN OTHER ENTITIES	29-30
NOTE 4	RELATED PARTY DISCLOSURES	30-32
NOTE 5	TRADE RECEIVABLES AND TRADE PAYABLES	33-34
NOTE 6	INVENTORIES	34-35
NOTE 7	PREPAID EXPENSES AND DEFERRED INCOME	35-36
NOTE 8	LIABILITIES ARISING FROM CUSTOMER CONTRACTS ……………………	36
NOTE 9	INVESTMENT PROPERTIES	37-40
NOTE 10	PROPERTY, PLANT AND EQUIPMENT	41
NOTE 11	INTANGIBLE ASSETS	42
NOTE 12	PROVISIONS, CONTINGENT ASSETS AND LIABILITIES	42-46
NOTE 13	EMPLOYEE BENEFITS	47-48
NOTE 14	OTHER ASSETS AND LIABILITIES	48
NOTE 15	SHARE CAPITAL, RESERVES VE OTHER EQUITY ITEMS	49-51
NOTE 16	REVENUE AND COST OF SALES	52
NOTE 17	EXPENSES BY NATURE	52
NOTE 18	GENERAL ADMINISTRATIVE EXPENSES, MARKETING AND SALES EXPENSES	53
NOTE 19	OTHER INCOME AND EXPENSES FROM OPERATING ACTIVITIES	53-54
NOTE 20	FINANCE EXPENSES	54
NOTE 21	INCOME TAXES	54
NOTE 22	EARNINGS PER SHARE	54
NOTE 23	FINANCIAL INSTRUMENTS ……………………………………………………………	55-56
NOTE 24	NATURE AND LEVEL OF RISKS ARISING FROM FINANCIAL INSTRUMENTS	57-62
NOTE 25	FINANCIAL INSTRUMENTS (FAIR VALUE DISCLOSURES)	63
NOTE 26	EVENTS AFTER THE REPORTING PERIOD	63
NOTE 27	NOTES ON THE STATEMENT OF CASH FLOWS	63
NOTE 28	DISCLOSURE OF OTHER MATTERS THAT MAY AFFECT FINANCIAL
	STATEMENTS SIGNIFICANTLY OR IS NECESSARY FOR FINANCIAL
	STATEMENTS TO BE CLEAR, INTERPRETABLE AND COMPREHENSIBLE	64-65
NOTE 29	FEES FOR SERVICES RECEIVED FROM THE INDEPENDENT
	AUDIT FIRM…………………………………………………………………………………	65
NOTE 30	FINANCIAL INVESTMENTS……………………………………………………………….	66
APPENDIX 1CONTROL OF COMPLIANCE WITH RESRICTION ON THE PORTFOLIO……………. 66-68

HALK GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş.

REVIEWED UNCONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2022

(All amounts expressed in Turkish Lira (TL).)
			Reviewed		Audited
			30 June		31 December
	Notes	2022	2021
ASSETS
Current Assets		710,397,699	272,725,275
Cash and Cash Equivalents	27	359,442,471	52,795,894
Trade Receivables	5	3,323,860	1,811,138
Trade Receivables from Related Parties	4	-	60
Trade Receivables from Third Parties		3,323,860	1,811,078
Inventories	6	285,295,954	176,833,096
Prepaid Expenses	7	1,861,415	734,112
Prepaid Expenses to Third Parties		1,861,415	734,112
Current Tax Assets		682,344	733,745
Other Current Assets	14	59,791,655	39,817,290
Other Current Assets from Third Parties		59,791,655	39,817,290
Non-Current Assets		8,576,436,628	4,294,745,095
Trade Receivables	5	6,570	244,980
Trade Receivables From Third Parties		6,570	244,980
Financial Investments	30	15,000,000	15,000,000
Investment Property	9	8,488,510,007	4,127,257,500
Property, Plant and Equipment	10	4,971,262	3,917,083
Intangible Assets	11	1,366,980	769,895
Other Intangible Assets		1,366,980	769,895
Prepaid Expenses	7	66,581,809	83,469,889
Prepaid Expenses to Related Parties		1,861,415	561,536
Prepaid Expenses to Third Parties		64,720,394	82,908,353
Other Non-Current Assets	14	-	64,085,748
Other Non-Current Assets to Related Parties			-		64,085,748
TOTAL ASSETS		9,286,834,327	4,567,470,370

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

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