Halk Gayrimenkul Yatirim Ortakligi : 31.03.2022 - Solo Independent Auditor’s Report

HALK GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş.

FINANCIAL STATEMENTS

AS OF 31 MARCH 2022 AND INDEPENDENT AUDITOR'S REPORT

(CONVENIENCE TRANSLATION OF THE REPORT AND THE FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH)

(CONVENIENCE TRANSLATION OF THE INDEPENDENT AUDITOR'S REPORT

ORIGINALLY ISSUED IN TURKISH)

INDEPENDENT AUDITOR'S REPORT ON REVIEW OF

INTERIM FINANCIAL INFORMATION

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

Introduction

We have reviewed the accompanying statement of financial position of Halk Gayrimenkul Yatırım Ortaklığı A.Ş. (the "Company") as at 31 March 2022 and the related statements of profit or loss and other comprehensive income, changes in equity and cash flows for the three-month period then ended, and a summary of significant accounting policies and other explanatory notes. The Company management is responsible for the preparation and fair presentation of this interim financial information in accordance with the Turkish Financial Reporting Standards ("TFRSs"). Our responsibility is to express a conclusion on this interim financial information based on our review.

Scope of Review

We conducted our review in accordance with the Independent Auditing Standard (IAS) on Review Engagements 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity". A review of interim financial information consists of making inquiries, primarily of persons responsible for financial reporting process, and applying analytical and other review procedures. A review of interim financial information is substantially less in scope than an independent audit conducted in accordance with Independent Auditing Standards and the objective of which is to express an opinion on the financial statements. Consequently, a review of the interim financial information does not provide assurance that the audit firm will be aware of all significant matters which would have been identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the accompanying financial information is not prepared, in all material respects, in accordance with Turkish Financial Reporting Standards (TFRSs).

Other Matters

As detailed in Note 28, we draw attention to the following issues that may affect the Parent Bank ("the Bank"):

On 15 October 2019, a lawsuit was filed against the Parent Bank by the New York Southern District Attorney General of the United States ("US") Department of Justice for violation of Iranian sanctions and in the New York Southern District Court ("District Court"). The criminal case in the District Court is pending due to an appeal by the Bank within the scope of the "Foreign State Immunity Act (FSIA)". The Bank's appeal process to the US Supreme Court is ongoing.

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

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

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

Member of DELOITTE TOUCHE TOHMATSU LIMITED

Zere Gaye Şentürk

Partner

İstanbul, 12 May 2022

INDEX		PAGE
STATEMENT OF FINANCIAL POSITION	1-2
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME	3
STATEMENT OF CHANGES IN EQUITY	4
STATEMENT OF CASH FLOWS	5
NOTES TO THE FINANCIAL STATEMENTS	5-73
NOTE 1	ORGANIZATION AND OPERATIONS OF THE COMPANY	5-6
NOTE 2	BASIS OF PRESENTATION OF THE FINANCIAL STATEMENTS	7-28
NOTE 3	INTERESTS IN OTHER ENTITIES	29-30
NOTE 4	RELATED PARTY DISCLOSURES	31-33
NOTE 5	TRADE RECEIVABLES AND TRADE PAYABLES	34-35
NOTE 6	INVENTORIES	35-36
NOTE 7	PREPAID EXPENSES AND DEFERRED INCOME	37
NOTE 8	LIABILITIES ARISING FROM CUSTOMER CONTRACTS ……………………	37
NOTE 9	INVESTMENT PROPERTIES	38-41
NOTE 10	PROPERTY, PLANT AND EQUIPMENT	42
NOTE 11	INTANGIBLE ASSETS	43
NOTE 12	PROVISIONS, CONTINGENT ASSETS AND LIABILITIES	43-48
NOTE 13	EMPLOYEE BENEFITS	49-50
NOTE 14	OTHER ASSETS AND LIABILITIES	50-51
NOTE 15	SHARE CAPITAL, RESERVES AND OTHER EQUITY ITEMS	51-53
NOTE 16	REVENUE AND COST OF SALES	53
NOTE 17	EXPENSES BY NATURE	54
NOTE 18	GENERAL ADMINISTRATIVE EXPENSES, MARKETING AND SALES EXPENSES	54-55
NOTE 19	OTHER INCOME AND EXPENSES FROM OPERATING ACTIVITIES	55-56
NOTE 20	FINANCE EXPENSES	56
NOTE 21	INCOME TAXES	56
NOTE 22	EARNINGS PER SHARE	56
NOTE 23	FINANCIAL INSTRUMENTS ……………………………………………………………	57-58
NOTE 24	NATURE AND LEVEL OF RISKS ARISING FROM FINANCIAL INSTRUMENTS… . 59-66
NOTE 25	FINANCIAL INSTRUMENTS (FAIR VALUE DISCLOSURES)	66-67
NOTE 26	EVENTS AFTER THE REPORTING PERIOD	67
NOTE 27	NOTES ON STATEMENT OF CASH FLOWS	67-68
NOTE 28	OTHER MATTERS THAT MAY HAVE A MATERIAL EFFECT ON, OR BE
	EXPLAINED FOR THE CLEAR UNDERSTANDING OF THE FINANCIAL
	STATEMENTS	68-69
NOTE 29	FEES FOR SERVICES RECEIVED FROM INDEPENDENT AUDIT FIRM….…………	70
NOTE 30	FINANCIAL INVESTMENTS……………………………………………………………..	71
APPENDIX 1 CONTROL OF COMPLIANCE WITH RESTRICTIONS ON THE PORTFOLIO	71-73

HALK GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş.

REVIEWED STATEMENT OF FINANCIAL POSITION

AS AT 31 MARCH 2022

(Amounts expressed in Turkish Lira (TL))

		Re vie we d	Audite d
		31 March	31 December
	Notes	2022	2021
ASSETS
Current Assets		789,719,325	272,725,275
Cash and Cash Equivalents	27	487,839,767	52,795,894
Trade Receivables	5	3,535,823	1,811,138
Trade Receivables from Related Parties	4	60	60
Trade Receivables from Third Parties		3,535,763	1,811,078
Inventory	6	222,769,414	176,833,096
Prepaid Expenses	7	1,149,936	734,112
Prepaid Expenses to Third Parties		1,149,936	734,112
Current Tax Assets		898,601	733,745
Other Current Assets	14	73,525,784	39,817,290
Other Current Assets from Third Parties		73,525,784	39,817,290
Non-Current Assets		4,592,934,867	4,294,745,095
Trade Receivables	5	106,571	244,980
Trade Receivables From Third Parties		106,571	244,980
Financial Investments	30	15,000,000	15,000,000
Investment Property	9	4,434,393,228	4,127,257,500
Property, Plant and Equipment	10	4,756,536	3,917,083
Intangible Assets	11	780,448	769,895
Other Intangible Assets		780,448	769,895
Prepaid Expenses	7	73,812,336	83,469,889
Prepaid Expenses to Related Parties		812,717	561,536
Prepaid Expenses to Third Parties		72,999,619	82,908,353
Other Non-Current Assets	14	64,085,748	64,085,748
Other Non-Current Assets to Related Parties		64,085,748	64,085,748
TOTAL ASSETS		5,382,654,192	4,567,470,370

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

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