Koray Öztürk

4
Contents
Agenda Of General Assembly Dated March 31, 2015 …………………………………. 6
Opinion of the Independent Auditor regarding Annual Report ………………………… 7-8
Board Of Directors’ Statutory Annual Report …………………………………………. 9
Profit Distribution Proposal ……………………………………………………………. 16
Corporate Governance Compliance Report ……………………………………………. 22
Independent Auditor’s Report………………………………………………………….. 36
Balance Sheets …………………………………………………………………………. 40-41
Statements of Income………………………………………………………………….. . 42
Statement of Changes in Equity ……………………………………………………….. 43
Statement of Cash Flow ……………………………………………………………….. 44
Notes to the Financial Statements ……………………………………………………… 45-102
5
AGENDA
1-
Opening and Election of the Board of Presidency
2-
Entrusting the Board of Presidency with the authority to sign the minutes of the General
Meeting,
3-
Reading, discussing and approval of Board of Directors’ statutory activity report of year 2014
4-
Reading and discussing External Independent Auditing Firm’s summary report of year 2014
5-
Reading, discussing and approval of the balance sheet and income chart with respect to the
operations and accounts of the year 2014,
6-
Releasing the members of the Board of Directors with respect to the operations and accounts
in year 2014,
7-
Informing the General Assembly of the company’s profit distribution policy for year 2015 and the following years in respect of the Corporate Governance Principles,
8-
Resolving on the proposal of the Board of Directors regarding the dividend distribution of year
2014 and of previous years,
9-
Determination of the number and term of office of members of the Board of Directors, election
of the members of the Board of Directors in line with the determined number, determination of
the independent members of the Board of Directors,
10-
Determination of the remuneration to be paid to the members of the Board of Directors,
11-
Pursuant to the Turkish Commercial Code and the regulations of the Capital Markets Board;
approval of the election of the Independent Audit Company which is elected by the Board of
Directors upon the proposal of the Board Committee for Auditing to audit the operations and
accounts of the Company,
12-
Informing the Shareholders pursuant to Corporate Governance Principles, of the donations
made in 2014 by the Company with welfare purposes and determining the upper limit for the
donations to be made in 2015,
13-
Discussing and resolving on the issue of getting out of the scope of the Capital Markets Law,
14-
Informing the General Assembly in line with the Capital Market Board’s regulation, of the assurances, pledges and hypothecs given by the Company in favor of third persons and the
revenues and benefits derived,
15-
Granting authority within the scope of Corporate Governance Principles to the Shareholders
who have the managing dominance, the board members, the executives and their spouses or
relatives related by blood or affinity up to the second degree, to enter into transactions which
may cause conflict of interest with the company and its affiliates and to compete; granting
authority to the members of the Board of Directors to undertake, personally or on behalf of
others, the business falling within the scope of the Company’s purpose and subject, to be partners at other companies that undertake such business and to perform other activities and
business, within the scope of Articles 395 and 396 of the Turkish Commercial Code;
informing the General Assembly of such transactions realized within the year,
16-
Wishes
6
CONVENIENCE TRANSLATION INTO ENGLISH OF
INDEPENDENT AUDITOR’S REPORT
ON THE BOARD OF DIRECTORS’ ANNUAL REPORT
ORIGINALLY ISSUED IN TURKISH
To the Board of Directors of BSH Ev Aletleri Sanayi ve Ticaret A.Ş.
Auditor’s Report on the Board of Directors’ Annual Report
1.
We have audited the annual report of BSH Ev Aletleri Sanayi ve Ticaret A.Ş. (the “Company”) for the period ended 31 December 2014.
Board of Directors’ responsibility for the Annual Report
2.
The Company’s management is responsible for the fair preparation of the annual report and its consistency with the financial statements in accordance with Article 514 of Turkish Commercial
Code (“TCC”) No. 6102 and Capital Markets Board’s (“CMB”) Communiqué Serial II, No:14.1, “Principles of Financial Reporting in Capital Markets” (the “Communiqué”) and for such internal control as management determines is necessary to enable the preparation of the
annual report.
Independent Auditor’s Responsibility
3.
Our responsibility is to express an opinion on the Company’s annual report based on the independent audit conducted pursuant to Article 397 of TCC and the Communiqué, whether or not the financial information included in this annual report is consistent with the Company’s financial statements that are subject to independent auditor’s report dated 5 March 2015 and presented fairly.
Our independent audit was conducted in accordance with Independent Auditing Standards that
are part of the Turkish Standards on Auditing issued by the Public Oversight Accounting and
Auditing Standards Authority. Those standards require that ethical requirements are complied
with and that the independent audit is planned and performed to obtain reasonable assurance
whether the financial information in the annual report is fairly presented and consistent with the
financial statements.
An independent audit requires applying audit procedures to obtain audit evidence on the
historical financial information. The procedures selected depend on the professional judgement
of the independent auditor.
We believe that the independent audit evidences we have obtained during our independent audit,
are sufficient and appropriate to provide a basis for our opinion.Opinion
4.
Based on our opinion, the financial information in the annual report of Board of Directors of
BSH Ev Aletleri Sanayi ve Ticaret A.Ş. is consistent with the audited financial statements and presented fairly, in all material respects.
7
Other Responsibilities Arising From Regulatory Requirements
5.
Pursuant to subparagraph 3 of Article 402 of the TCC No. 6102, within the context of ISA 570
“Going Concern”, we have not encountered any significant issue which is required to be reported with regard to the inability of BSH Ev Aletleri Sanayi ve Ticaret A.Ş. to continue its operations for the foreseeable future.
Başaran Nas Bağımsız Denetim ve Serbest Muhasebeci Mali Müşavirlik A.Ş. a member of
PricewaterhouseCoopers
Adnan Akan, SMMM
Partner
Istanbul, 5 March 2015
8
BSH EV ALETLERİ SANAYİ VE TİCARET A.Ş.
ANNUAL ACTIVITY REPORT FOR THE PERIOD 01.01.2014 – 31.12.2014
1-
GENERAL INFORMATION
PERIOD OF THE REPORT
NAME OF THE COMPANY
TRADE REGISTRATION NUMBER
HEAD OFFICE ADDRESS
: 1 January 2014 – 31 December 2014
: BSH EV ALETLERİ SANAYİ VE TİCARET A.Ş.
: 128825
: Fatih Sultan Mehmet Mahallesi, Balkan Cad. No: 51, 34771,
Ümraniye/Istanbul/Turkey
Telephone: 0216 528 90 00 Fax: 0216 528 99 99
E-Mail Address: info-tr@bshg.com
BRANCH ADDRESS
: Yıldırım Beyazıt Mahallesi, BSH Caddesi, No: 72,
Çerkezköy / Tekirdağ
Telephone: 0282 748 30 00 Fax: 0282 7265396
WEBSITE ADDRESS
: www.bsh.com.tr
A-
COMPANY’S CAPITAL AND SHAREHOLDING
a)
Capital
Our Company is subject to the Registered Capital system and has a Registered Capital of TL
120,000,000 and an issued capital of TL 42,000,000. All of our share certificates issued to represent
the capital are registered to name and there are no preferential shares.
Under the Capital Market Board’s Communiqué II-23.1 on “Common Principles Regarding Important Transactions and the Right to Leave” and Article 25 of the Listing Regulation, it was decided by the
Stock Exchange Board of Directors in its meeting dated 13.02.2014 that the shares in our Company be
delisted from the Stock Exchange and permanently prohibited from trading.
The shareholders who did not respond to the call within the share purchase period under the CMB’s Communiqué II-23.1 on “Common Principles Regarding Important Transactions and the Right to Leave” have the right to apply to sell their shares for 3 years after the date of the decision made by the
Stock Exchange Board of Directors on delisting, considering that they may wish to sell their shares
after the delisting of the shares in the Company.
To enable the shares that remain after the share purchase made for the purpose of delisting to be sold
by their holders to BSH Hausgeräte GmbH within the 3-year period at the share purchase price, the
total amount corresponding to the remaining shares has been deposited by BSH Hausgeräte GmbH
into a special blocked account opened with the Clearing Bank in the name of Gedik Investment
Securities Joint-Stock Company, which has brokered the share purchase transaction and will also
broker the purchasing by BSH Hausgeräte GmbH, within this three-year period, of the delisted shares
in BSH Ev Aletleri Sanayi ve Ticaret A.Ş. At the end of 3 years from the date of the decision made by
the Stock Exchange Board of Directors on delisting, the blocked account with the Clearing Bank will
be released and BSH Hausgeräte GmbH will no longer have the obligation to purchase the shares of
applying shareholders.
9
b)
Shareholding (as of 26.02.2015)
Shareholder’s Name
BSH Hausgeräte GmbH
Other Shareholders (Public)
TOTAL
Amount of
Shares (TL)
41,978,427,.64
21,572.36
42,000,000.00
Percentage of Registered/Bearer
Shares (%)
99.95 Registered
0,05 Registered
100.00
BORGANIZATIONAL STRUCTURE, BOARD MEMBERS,SENIOR EXECUTIVES
AND PERSONNEL INFORMATIONS
a)
Organizational Structure
BSH Global Headquarters designated BSH Turkey as the new regional hub due to his globally
successful performance in the areas of production, marketing and product development. Within the
context of his new task, BSH Turkey will be responsible for the management of a wide geography
consisting of 87 countries. BSH Turkey, accordingly, will be responsible for the management of the
regions Africa, Middle East, Ukraine, Russia and Belarus.
b)
Board of Directors
Kai Gerhard SCHRICKEL
Chairman of the Board *
Hasan Özcan AYDİLEK Vice Chairman of the Board **
Ali ÇULPAN Independent Member of Board ***
Hüseyin GELİS Member of Board (Resigned as of 12.12.2014)
Norbert Wilhelm Maximilian KLEIN
Member of Board and President of the Executive Board
Markus Christian DR. SLEVOGT
Independent Member of Board ***
Michael TOEDTER
Member of Board (Resigned as of 30.06.2014)
Steven YOUNG
Member of Board (Resigned as of 15.12.2014)
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* He was appointed to the office of President which became vacant upon the resignation of Winfried
Eduard SEITZ on 17.12.2013.
** He was elected as Member in lieu of Winfried Eduard SEITZ who resigned on 17.12.2013; he was
appointed to the office of Vice President vacated by Kai Gerhard SCHRICKEL.
*** Members of the Audit Committee, the Corporate Management Committee and the Early Risk
Identification Committee.
The Board of Directors of the Company has 8 members including 2 independent members. The
Members of Board were elected in the Ordinary General Assembly meeting held on 27.05.2013, in
accordance with Articles 10 and 11 of the Articles of Association, to serve for three years until the
next ordinary general assembly meeting to be held at the end of the third year.
c)
Senior Managers of the Company (Executive Board)
Norbert Wilhelm Maximilian Klein (President of the Executive Board)
Klein, who graduated from the Faculty of Economics, Mannheim University, and started his career as
manager at Robert Bosch GmbH, has served as the President of the Executive Board (CEO) and
Member of Board at BSH Ev Aletleri Sanayi ve Ticaret A.Ş. since 2002. He is also the Chairman of the Board at BSH Home Appliances FZE.
Haluk Kaya (Member of the Executive Board)
Kaya, who graduated from the Department of Economics, Bosphorus University, and who started his
career at Procter & Gamble and then held various positions within and outside the country, held the
positions of Finance Director at Arçelik, Member of the Executive Board and CFO at Assan and
Cadbury, and Turkish CEO and Vice Chairman of the Board at the Mondi Group, in this order of
sequence. He currently serves as an Independent Member on the OMV Petrol Ofisi Board of Directors.
He was appointed as the Member of the Executive Board in Charge of Financial and Administrative
Affairs at BSH Ev Aletleri Sanayi ve Ticaret A.Ş. with effect from 1 January 2014.
Ronald Grünberg (Member of the Executive Board)
Grünberg, who graduated from the Faculty of Law, Lausanne University and who started his career in
1976 at Grünberg Ticaret A.Ş. where he rose to the position of Member of Board and General Manager, has served as the Member of the Executive Board in Charge of Marketing and Sales at BSH
Ev Aletleri Sanayi ve Ticaret A.Ş. since 2001. Currently, he also serves as Member of Board at Axa
Sigorta A.Ş., Odeon Compact Disc Müzik Sanayi A.Ş., Plaksan Plak Sanayi A.Ş., Berg Pazarlama A.Ş., Berg Yatçılık Turizm Ticaret A.Ş. and Serveks Export Servis A.Ş. Juan Ignacio Conrat Niemerg (Member of the Executive Board)
Niemerg graduated from the Faculty of Economic Engineering, Munich Technical University in 1990,
completed his PhD in Advanced Economic Engineering and Economic Sciences at the same
university, and started his career in 2001 as Gas Cooker Factory Production and Development Director
at BSH Bosch und Siemens Hausgeräte GmbH in Munich, Germany, a position he held until 2010. From 1 May 2010 to 31 January 2013, he worked as Factory Director at BSH Spain
Electrodomésticos. He performed task as as the Member of the Executive Board in Charge of Technical Affairs and Çerkezköy Manufacturing Facilities at BSH Ev Aletleri Sanayi ve Ticaret A.Ş. between February 1, 2013 – October 1, 2014.
Ralf Hubert Dr. Fuchs (Member of the Executive Board) (Appointed in lieu of Juan Ignacio Conrat
Niemerg with effect from 01.10.2014)
11
He graduated from the Faculty of Chemistry Engineering, Karlsruhe Technical University in 1989,
completed his PhD at the same university, and started his career in 1993 in Germany at NEFF GmbH
BSH Bosch und Siemens Hausgeräte GmbH, an affiliated company of BSH Group. In this order of sequence, he worked at BSH Munich between 2002-2003 as Corporate Technology Quality
Management Director, as Consumer Products Senior Vice President between 2003-2008 and as
Consumer Products Executive Vice Chairman between 2008-2014. He was appointed as the Member
of the Executive Board in Charge of Technical Affairs and Çerkezköy Manufacturing Facilities at BSH Ev Aletleri Sanayi ve Ticaret A.Ş. as of October 1, 2014.
d)
Personnel Information
As of 31.12.2014, our company employs a total of 5,769 persons including 1,974 white collars and
3,795 blue collars.
Collective employment contract that has been enacted on 15 December 2014 between Turkish Metal
Union and MESS, to which our company is a member, is in force for the period 01.09.201431.08.2017.
2FINANCIAL
MANAGERS
RIGHTS
PROVIDED
TO
THE
DIRECTORS
AND
SENIOR
The total amount of the salaries and short-term benefits provided by the company to the Directors and
Senior Managers was TL 23.815.854 including the insurance benefits and other benefits provided by
the company to its senior managers.
3-
RESEARCH AND DEVELOPMENT ACTIVITIES OF THE COMPANY
The BSH R&D Center successfully completed its sixth year of activity as of October 2014 under Law
Numbered 5746. The innovative products of the BSH Group are developed by the R&D centers which
are located mainly in Germany, China and Turkey. The R&D Centre at Çerkezköy, one of the main
components of this network, becomes increasingly more important from year to year in the worldwide
R&D activities of the BSH Group. In parallel to the R&D responsibilities, the number of R&D
personnel has also increased, reaching 188 at the end of 2014. During the year, R&D activities
continued under a total of 29 different projects. In 2014, BSH Turkey carried out one Industry R&D
Program Project (1501) and two University-Industry Collaboration Program Projects (1505) with the
support of TÜBİTAK;; and the SAN-TEZ project, a project supported by the Ministry of Science,
Industry and Technology.
4COMPANY ACTIVITIES AND IMPORTANT DEVELOPMENTS RELATING TO
THEM
a)
Investments
In 2014, a total investment expenditure of TL 155 million was carried out. TL 67 million of the
investment expenditure is under Investment Incentive Certificates, which provide for VAT Exception,
Customs Duty Exemption and Tax Relief. The main investment areas involved expansion and
modernization.
b)
The Internal Control System and Internal Audit Activities
The internal control system and internal audit are conducted by the Corporate Audit Department within
the Controlling Shareholder.The Corporate Audit Department audits all departments both under a
certain plan and randomly if necessary and reports its opinions concerning its findings to the Board of
Directors, the Executive Board and others concerned.
12
The Company’s operating results are subject to independent audit by Başaran Nas Bağımsız Denetim ve Serbest Muhasebeci Mali Müşavirlik A.Ş. (PricewaterhouseCoopers). c)
Participations
Direct Participations
Name
Shareholding
Profilo Elektrogeraete GmbH
100,00
Pro-Eks Dış Ticaret A.Ş. 0,23
Profilo Telra A.Ş. 0,16
Ak Enerji A.Ş. 0,01
It was not possible to measure the actual value of the participations reliably and they were shown at
their cost value because these financial assets are not subject to trading on an active market. Their
amount reflected in the financial statements as of the end of 2014 is TL 345,685.
There are no indirect participations.
d)
Information Concerning Own Shares Acquired by the Company
There are no such shares.
e)
Disclosures Concerning Special Audit and Public Audit Performed in the Accounting
Period
Company’s activities are regularly and periodically audited by the Corporate Auditors and external independent auditor assigned by the General Assembly. Independent auditing activities in 2014 were
conducted by Başaran Nas Bağımsız Denetim ve Serbest Muhasebeci Mali Müşavirlik A.Ş. (PricewaterhouseCoopers).
f)
Lawsuits Brought Against the Company and Capable of Affecting its Financial
Condition and Activities and Their Possible Consequences
Disclosures are made regarding this subject under the heading “Allowances, Commitments,
Contingent Assets and Liabilities” in footnote 11 to the independent auditor’s report.
g)
Administrative and Judicial Sanctions Imposed on the Company and Directors for
Practices in Breach of Legislation
None.
h)
Whether the Targets for 2014 were achieved
The targets set for 2014 were successfully reached.
i)
Information Concerning the General Assembly Meeting Held within the year
The resolutions taken by the General Assembly are executed, the ordinary General Assembly was held
on 28.03.2014. No Extraordinary General Assembly took place within the year.
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j)
Donations and Contributions and Spending under Social Responsibility Projects
Pursuant to Article 4/L of the Company’s Articles of Association, in 2014 the Company management
made donations and contributions totaling TL 11.225,93 in social assistance to associations and
foundations established for various purposes and to individuals.
k)
Affiliated Company Report under the Turkish Commercial Code
In the operating year 2014, there were no legal transactions made with our Company’s controlling shareholder and/or any of its affiliates, or by our controlling shareholder’s direction, for the benefit of the controlling shareholder or any of its affiliates. Again, there were no measures taken or omitted to
be taken in 2014 for the benefit of our controlling shareholder or any of its affiliates; for this reason,
there was nothing that would require offsetting.
5-
FINANCIAL CONDITION
The condensed financial data of the Company for the last 2 years subjected to independent audit are
presented below:
a)
Condensed Balance-Sheet (TL)
(TL)
31.12.2014
31.12.2013
1. 712.701.244
1.571.241.690
Fixed Assets
672.283.755
572.725.204
Total Assets
2.384.984.999
2.143.966.894
Short-Term Liabilities
692.874.377
613.607.594
Long-Term Liabilities
136.607.150
110.814.954
Equity
1.555.503.472
1.419.544.346
Total Resources
2.384.984.999
2.143.966.894
31.12.2014
31.12.2013
4.118.672.662
3.530.702.947
Operating Profit
308.017.215
288.880.225
Profit Before Tax
230.195.864
276.919.320
Period’s Profit
195.994.741
229.864.499
Current Assets
b)
Condensed Income Statement (TL)
(TL)
Sales Income
Our Company’s turnover in 2014 was TL 4,119 million, up by 17 % on the previous year. In this
period, our domestic turnover increased by 7 % to TL 2,077 million and our foreign turnover by 28 %
to TL 2,041 million.
The Company’s asset size is TL 2,385 million and its total short-term and long-term liabilities are TL
829 million with equity at TL 1,556 million.
The Company is not undercapitalized or insolvent and is in a healthy financial condition.
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Certain basic ratios calculated from the financial statements are presented below comparatively for
2014 and 2013.
31.12.2014
Profit Before Tax / Net Sales
31.12.2013
5.59 %
7.84 %
12.60 %
16.19 %
Current Ratio (Current Assets/Short-Term Liabilities)
2.47 %
2.56 %
Liquidity Ratio (Current Assets–Stocks/Short-Term Liabilities)
1.94 %
1.97 %
Total Borrowed Resources / Equity
0.53 %
0.51 %
Total Borrowed Resources / Total Assets
0.35 %
0.34 %
Net Period’s Profit / Total Equity
c)
Profit Distribution Policy
Our Company’s profit distribution policy is determined as follows: “Our Company aims to distribute at least 20 % of the net distributable profit including the donations to our shareholders in whole and
cash. Dividend is paid until December 30th of the relevant year in line with the legislation where the
General Assembly decides on the dividend distribution and entitles the Board of Directors for carrying
out the distribution. This profit distribution policy may be reviewed every year by the Company’s Board of Directors according to national and global economic conditions, the projects on the agenda,
and the situation of funds.”
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PROFIT DISTRIBUTION PROPOSAL
Dear Our Shareholders,
Our company prepared its financial tables pursuant to CMB Communiqué Serial, No: II-14.1 ;
“Communiqué Regarding Financial Reporting in Capital Markets. According to Article 5 of the Communiqué, financial statements are prepared in accordance with Turkish Accounting
Standards(“TAS”) issued by Public Oversight Accounting and Auditing Standards Authority (“POAASA”) As shown in our Financial Tables and income statement prepared pursuant to the Capital Markets
Board Regulations, which reflects the results of the activities in 2014 and which has been ready for the
investigation of our shareholders for twenty one days;
Our Company’s net profit in year 2014 is TL 195.994.741. As the legal ceiling is reached no first disposition legal reserve shall be allocated; net distributable profit of the year is TL 196.036.513,69
after adding up the donations of TL 41.772,69 made, within the year in line with the Capital Markets
Law and Capital Market Board’s Regulations. We propose to distribute to our shareholders in cash the gross dividend at the total amount of TL
420.000.000.- thereof TL 176.432.862,10out of profit of year 2014 and TL 243.567.137,90 out of the
extraordinary reserves on the basis of our legal records and we propose, after fulfilling the legal
requirements, to allocate the remainder as extraordinary reserve.
If our proposal is found appropriate by the General Assembly, out of our issued capital, cash dividend
at the rate of 1000 % gross and 850 % net will be distributed to our shareholders. By this way, cash
dividend payment of TL 10 gross=net per TL 1 nominal valued share will be made to our full fledged
tax payer shareholders and to our limited tax payer shareholders who receive their dividends by their
permanent representatives or business quarters; and TL 10 gross, TL 8,5 net per TL 1 nominal valued
share to our other shareholders.
We propose to grant the Board of Directors authorization to determine the payment date of dividend
provided that the dividend payment is done until 30 December 2015. We hereby put our profit
distribution proposal to your votes. We greet the General Assembly hoping for the best for our
Country and our Company in 2015.
Best Regards,
Kai Gerhard SCHRICKEL
President of Board of Directors
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d)
Assessment of the House Appliances Sector
Overall in year 2014, we see an production increase of 3 % in the six main product groups of
refrigerators, deep freezers, washing machines, dryers, dishwashers and ovens. In this category white
goods production reached 22.595.875 units in 2014 with an increase of 3 % compared to year 2013
where it was 21.940.026 units. Biggest increase was in washing machines and ovens with a rate of 10
%.
Looking at the product groups; highest production numbers was realized in refrigerators. This was
followed by washing machines with 6.307.848 units, by ovens with 4.247.037 units, by dishwashers
with 3.483.152 units, by deep freezers with 963.064 and then by dryers with 935.908 units.
The sector increased its export by 5 % compared to the previous year and realized an export of
16.903.600 units. In exports washing machines took the first place with 4.766.886 units whereas the
leader in domestic market was refrigerators with 1.907.562 units.
Nine months installment restriction for shopping with credit card brought by the Banking Regulation
and Supervision Agency had a negative effect on the business of the white goods traders who
generally realize their sales by this way. In the year 2014 domestic sales decreased by 2 % compared
to the previous year.
e)
Company Performance
BSH Turkey realized a production performance of 5.445.542 units as of end of 2014, 783.147 units
more compared to year 2013.
Looking at the sales figures, total sales, which was 6.570.444 units in 2013, reached 7.312.991 units as
of end of 2014. If we look at the sales ratios, we see that only TV and AC sales decreased by a limited
ratio and that sales ratios of coolers, washing machines, dishwashers, ovens, cookers, heater groups
and small home appliances increased considerably. The sales of washing machines showed an increase
of 19 %, sales of coolers increased by 8 %, dishwashers by 6 % and oven by 16 %. Small home
appliances this year increased its sales by 17 %. Net domestic sales which was TL 1.934.409.179 in
2013 realized as TL 2.077.189.154 in 2014. Export sales increased up to TL 2.041.483.507 as of end
of 2014; it was TL 1.596.293.768 in year 2013.
f)
The Trend and Expectations
We expect the Turkish economy to show growth around 3-4%. The overall market growth for the
white goods is estimated to be 3%. As there are elections in June we’re expecting a positive
atmosphere till June. The medium and long-term outlook for the construction sector remains optimistic
due to growing population and the rapid urban development as well as the rising incomes in Turkey.
This is a positive outlook for us for 2015.
The loss of consumer confidence is a negative factor for us. Price competition is still continuing in the
sector which is affecting us negatively. The decrease of credit card installments is a negative factor for
the whole sector.
17
g)
Production and Sales Quantities
i.
Production Quantity
The production figures for 2014 in comparison with 2013 are as follows.
2014
Number
1.229.143
1.278.375
988.275
1.109.237
840.512
5.445.542
PRODUCT CATEGORY
— Refrigerator
— Washing Machine
— Dishwasher
— Oven + Cooker
— Small House Appliances
Total
2013
Number
1.117.563
1.014.193
905.212
1.006.032
619.395
4.662.395
Change
%
10
26
9
10
36
17
Total production in the four main categories grew by 15 % on the previous year. The largest growth
took place in washing machines at 26 % and in ovens at 16 %. Total production across the board grew
by 17 % on the previous year.
ii.
Sales Quantity
The sales figures for 2014 in comparison with 2013 are as follows.
2014
PRODUCT CATEGORY
Number
— Refrigerator
1.298.983
— Washing Machine
1.390.467
— Dishwasher
1.061.420
— Oven
963.952
Total
4.714.842
2013
Number
1.206.931
1.167.495
998.136
829.021
4.201.583
Change
%
8
19
6
16
12
The total number of sales in the four main categories was 4.714.842, up by 12 % on the previous year.
Our total sales in all products grew by 11 % on the previous year.
In parallel with the expansion of the region under responsibility of BSH Turkey, total export sales in
2014 reached to 4.088.810 units.
6-
RISKS AND THE BOARD OF DIRECTORS ASSESSMENT
The financial resources of the business consist of the Company’s equity, the loans it uses, and supplier
credits.
In capital management, the Company seeks to ensure the continuity of its operations, on one hand, and
aims to increase its profit by making the most efficient use of the debt and equity balance, on the other
hand.
The Company is exposed to market risk, credit risk and liquidity risk as a result of its activities. The
Company’s risk management program generally focuses on minimizing the potential adverse effects of uncertainty in the financial markets on the Company’s financial performance. The Company uses
derivative products to protect itself from various financial risks.
Risk management is conducted by the financing department in line with policies approved by the
Board of Directors. Concerning the risk policies, the Company’s financing department defines and
evaluates financial risk and uses instruments to mitigate it in cooperation with the Company’s operating units.
18
Market risk
The Company’s activities are exposed mainly to financial risks relating to changes in the exchange
rate and in the interest rate. To keep the risks relating to the exchange rate and the interest rate under
control, the Company uses forward currency buying/selling contracts which are employed to protect
from the exchange rate risk arising from exports of products. Transactions in foreign currency result in
currency risk, which is managed through forward currency buying/selling contracts entered into on the
basis of approved policies.
Credit risk
The Company is exposed to credit risk due to its trade receivables arising from sales on credit and to
its deposits with banks.
The trade receivables are to a large extent from affiliated companies. In the management of the risk
from non-affiliated companies, action is taken on the principle of securing receivables at the highest
rate possible. The types of security used in this context are guarantee letters, property mortgages, and
cheques/notes received in security.
In risk control for unsecured receivables from customers, individual limits are determined following a
credit rating of the customer in view of the customer’s financial position and past experience and other relevant factors, and the use of the credit limits in question is continuously monitored. In the
management of financial assets, action is taken on the same credit risk management principles.
Investments are made in those instruments which have the highest liquidity, paying attention to the
credit rating of the organization with which the transaction is made.
Liquidity risk
The Board of Directors has the main responsibility for liquidity risk management. The Board has
created a suitable liquidity risk management programme for the short, medium and long-term funding
and liquidity requirements of the Company. The Company manages liquidity risk by regularly
monitoring the projected and actual cash flows and by matching the maturities of financial assets and
liabilities to ensure the continuity of sufficient funds and borrowing reserves.
7-
OTHER ISSUES
a)
Important Events after the End of the Operating Year
The Company started to transfer 3.5% license fee to the main shareholder, BSH Hausgeräte GmbH, which is calculated over sales of products manufactured from the beginning of 2008 while
negotiations for the agreement were ongoing, as per stated in each three drafts of “Advance Pricing Agreement” communicated by Turkish Ministry of Finance for completion of signing.
As a result of transfer pricing investigations of tax inspectors of Ministry of Finance for the years
2008, 2009, 2010 and 2011, although the royalty rate is specified as 3.5% in each three drafts of
agreement, the rate is accepted as 2% and for the difference over license amount corporate tax,
withholding tax and value added tax and penalties amounting to TRY106 million was incurred in
2013, as of inspection date.
The Company applied to Ministry of Finance for reconciliation. Reconciliation meeting took place on
February 26, 2015; settlement reached on the total amount of TL 8.829.276,72.
b)
Amendments to the Articles of Association within during the Period
No amendment to the Articles of Association took place within the period.
19
BSH EV ALETLERİ SANAYİ VE TİCARET A.Ş.
CORPORATE GOVERNANCE COMPLIANCE REPORT
1-
COMPLIANCE STATEMENT OF CORPORATE GOVERNANCE PRINCIPLES
Our company has given maximum importance to the principles stated in the Corporate Governance
Principles announced by Capital Market Board. Our company is aware that the way of achieving our goals
vision, mission and strategic goals passes through application of corporate governance principles.
With regard to Capital Markets Board Communiqué regarding “Corporate Governance Principles”;; all mandatory principles and large majority of the non-mandatory principles are complied with.
Main studies in corporate governance areas up until today are the studies regarding the compliance to the
CMB’s Communiqué Serial IV, No:56 implying the new regulations related to corporate governance principles and compliance to Turkish Commercial Code. All Articles of Association modifications
stipulated in the Communiqué are realized. Besides, the process of determination and public announcements of the independent board members are completed, elections are realized in line with the
regulations. Board of Directors’ Committees for Auditing, Corporate Governance and Early Inspection of Risks are set up. In addition to this, structures of the Committees for Nomination and Remuneration are
formed; their working principles are determined as to have them work under the Corporate Governance
Committee. Committees got started effectively. Policies for Remuneration of the Board Members and
Senior Executives, Aids and Donations and Information are determined and the General Assembly was
informed of the same.
Within the upcoming period, required studies will be conducted in order to comply with the principles,
taking into consideration the developments and applications in the legislation.
PART I- SHAREHOLDERS
2-
SHAREHOLDER RELATIONS DEPARTMENT
Relations with shareholders are handled by Legal Affairs Department under the member of Committee of
Managing Directors responsible for financial affairs.
Department managers are;; Banu Tüzmen, Attorney at Law, the director and İsmet Birol the Specialist.
Contact Information;
Atty. Banu Tüzmen
0216 528 94 75
banu.tuzmen@bshg.com
İsmet Birol
0216 528 94 76
ismet.birol@bshg.com
Investor Relations Fax: 0216 528 94 79
Headquarters Tel: 0 216 528 90 00
Headquarters Fax: 0 216 528 99 99
Main activities of the Unit responsible for the shareholder relations are;
a. To ensure that the records of the shareholders are kept in an accurate and reliable and up-to-date
manner,
22
b. To respond to the written information inquiries of shareholders and investors about the Company
except the inquiries related to the confidential business information of the Company which is not
disclosed;
c. To ensure that the General Assembly Meeting is conducted pursuant to the current laws and
regulations, and the Articles of Association and other internal regulations of the Company,
d. To prepare the documents that may assist the shareholders at the General Assembly Meetings
e. To keep the records of voting results and to ensure that reports on the results are sent to
shareholders
f.
To ensure that the required Public Disclosures are done in line with the relevant CMB’s Communiqué g. To monitor the changes in the Capital Markets Law and the related legislation and inform
Company’s relevant units,
h. To realize capital increase and dividend payment transactions.
Within the frame of Company’s Information Policy;; in this year the unit answered around 370-380
questions coming from the investors and analysts regarding the Company’s activities and financial performance, share price and information regarding general assembly.
3-
SHAREHOLDERS’ EXERCISE OF THEIR RIGHTS TO OBTAIN INFORMATION
In order for all shareholders to obtain information regarding our Company easily, all the information
announced to public are available to shareholders on the Company’s web-site (www.bsh.com.tr) under
“Investor Relations Part”. Shareholders Relation Department is answering the questions which are directed orally or in writing as soon as possible without any distinction and within the frame of equity
principle as long as they do not relate to trade secrets or info which has not been disclosed to public.
Request of private auditor appointment has not been regulated in the articles of association as an
individual right and no such demand has arisen within the period.
4-
GENERAL ASSEMBLY MEETINGS
Our Company’s Ordinary General Assembly of year 2013 has been held on 28.03.2014 with the presence
of the shareholders who hold company’s capital of 99,89 %. Shareholders and their proxies attended the general meeting.
Invitation to the general meeting including the agenda was made on time by publication in Turkish Trade
Registry Gazette dated 06.03.2014 and no 8522 and Dünya newspaper dated 06.03.2014, on CMB’s web site for the public disclosures to be done by the companies whose shares are not traded at BIST, on
Company’s website www.bsh.com.tr and on Merkezi Kayıt Kuruluşu A.Ş.(Central Registry Agency(CRA))’s electronic general assembly system in line with the Laws and Articles of Association. The Board of Directors’ Statutory Annual Report, the Report of the Board of Auditors, the balance sheet
and the profit/loss statement, articles of association, agenda and dividend distribution proposal of Board of
Directors were made available to the inspection of the shareholders at the registered office and on the
internet site of the Company and CMB 21 days prior to the General Meeting.
Minutes of the General Assembly dated 28.03.2014 are open for the review of the shareholders on the
internet sites of the Company, CMB and CRA.
23
5-
VOTING RIGHTS AND MINORITY RIGHTS
There is no privilege regarding voting rights. Each share gives right to one vote for the owner. There is no
article in the articles of association preventing proxy voting. There is no cross over participation. Shares of
the minority shareholders are not represented in the management. There is not any method for
accumulated voting.
6-
RIGHT FOR DIVIDEND
There is no privilege regarding dividend distribution. Dividend distribution is regulated in article 22 of the
articles of association. Dividend distribution transactions are carried out within their legal terms. Dividend
to be distributed is proposed to the General Assembly by the Board of Directors in the frame of the
regulations of CMB and TCC and finally resolved at the General Assembly.
In 2014, our Company distributed net cash dividend to our shareholders at the rate of 109,473 % gross and
93,052 % net out of the issued capital
On 31 May 2014, cash dividend payment of TL 1,09473 gross=net per TL 1 nominal valued share was
made to our full fledged tax payer shareholders and to our limited tax payer shareholders who receive
their dividends by their permanent representatives or business quarters; and TL 1,09473 gross, TL
0,93052 net per TL 1 nominal valued share to our other shareholders.
Our Company has a dividend distribution policy. This policy is stated in our Company’s activity report, corporate governance compliance report and announced to public on Company’s web-site. Our company
did not distribute profit in year 2013.
Company’s profit distribution policy was determined as “”“Our Company aims to distribute at least 20 % of the net distributable profit including the donations to our shareholders in whole and cash. Dividend is
paid until December 30th of the relevant year in line with the legislation where the General Assembly
decides on the dividend distribution and entitles the Board of Directors for carrying out the distribution.
This profit distribution policy may be reviewed every year by the Company’s Board of Directors according to national and global economic conditions, the projects on the agenda, and the situation of
funds.””” 7-
TRANSFER OF THE SHARES
There is no article in the articles of association that limits the transfer of the shares.
PART II- DISCLOSURE AND TRANSPARENCY
8-
COMPANY INFORMATION POLICY
With respect to disclosure, our Company has already determined an information policy and announced it
to public on the Company’s web-site.
1-
Objective and Scope
Company’s information policy aims to share information about the Company's performance and prospects
for future and information which are not classified as trade secrets with shareholders and other
stakeholders in an equal, impartial, complete, fair, accurate, timely, clear, and understandable manner and
to ensure a constant, effective, and transparent communication in accordance with the provisions of laws
and regulations about the capital market and generally accepted accounting principles.
24
The information policy is designed to ensure that necessary information which are not classified as trade
secrets and statements are communicated to all stakeholders, including shareholders, investors,
employees, and customers in a timely, accurate, understandable, easy, and equal manner.
Public information policy is implemented in accordance with laws and regulations of the Capital Markets
Board, regulations of the Istanbul Stock Exchange, and the principles of Corporate Governance Principles.
2-
Authorization and Responsibility
The Chief Executive Officer (CEO) has been authorized and is responsible for formulating, monitoring,
overseeing, and improving the Information Policy of BSH on behalf of the Board of Directors. In addition,
the Information Policy and modifications to the Policy will be published on the Company's website after
they have been approved by the Committee of Managing Directors and the shareholders will be informed
in the following general assembly.
The Committee of Managing Directors, Legal Affairs Directorate – Shareholders Relations Unit, and the
Corporate Communication Department are responsible for the implementation of the Information Policy.
3-
Information Methods and Tools
Information methods and tools which are used by our Company in accordance with the provisions of laws
and regulations regarding the capital markets, regulations of the Istanbul Stock Exchange (IMKB), and the
Turkish Commercial Code are as follows:
a.
Public Disclosures on Material Events Sent To IMKB
Public disclosures on material events are drawn up by the Shareholders Relations Unit and signed by a
member of the Committee of Managing Directors and the Legal Affairs Director in principle and notified
to KAP system in an electronic medium.
b.
Financial Statements and Footnotes, Independent Audit Reports, Statements, and Activity Reports
Periodically Delivered To the IMKB
BSH’s financial reports are drawn up in accordance with provisions established by the Capital Market Board and made public on a quarterly basis (in 3rd, 6th, 9th, and 12th months). Biannual and annual
reports are subject to independent auditing. Financial reports are submitted to the Board of Directors
following the Board Committee for Auditing’s affirmative opinion in accordance with regulations on the capital market before they are made public. In principle, a verification statement will be signed by the
Finance Coordinator and the Financial Affairs Director following approval by the Board of Directors and
communicated to KAP in an electronic medium.
The activity reports are drawn up in accordance with the regulations on the capital market and Corporate
Governance Principles. They are approved by the Board of Directors and then communicated to KAP in
an electronic medium and concurrently posted on the Company's website. In addition, they can be
obtained from the Company's headquarters or via mail in the form of a booklet.
c.
Notices and Announcements Published On the Turkish Trade Registration Gazette and Daily
Newspapers
Notices related to invitations to general assemblies, capital increases (prospectus and communiqués), profit distribution, will be published on the Turkish Trade Registration Gazette and daily newspapers
within the statutory period in accordance with the Turkish Commercial Code, Capital Markets Law, and
the Company's Articles of Association. Notices related to invitations to general assemblies are also posted
on the company's website so that they can be communicated to more shareholders.
25
Financial tables and reports, including the annual Activity Report, profit distribution proposal, information
documents drawn up in respect of items on the agenda of general assembly, and other documents which
are taken as a basis for the items of the agenda as well as the final text of the Articles of Association and
any amendment to the Articles of Association are available for review by the shareholders at the
Company's headquarters and website from the date of a notice of invitation to a general assembly. Forms
of proxies which will be used by shareholders who will be represented by a proxy at a general assembly
are included in the text of the related notice and made available in the company's website.
d.
Press Conferences and Press Releases Highlighted In Printed and Electronic Media
Committee of Managing Directors organizes a press conference once a year in order to share information
about routine developments related to the Company's operations. Such press releases aim to reach out to a
larger number of people who are interested in information about the company. A press release is also
issued if there has been a special development about the company except for routine issues. A public
disclosure is made first if a press release includes information which may affect the value of shares. The
Chairman of the Committee of Managing Directors is responsible for issuing a press release as a rule.
e.
Company’s Corporate Website (www.bsh.com.tr)
The Company's website is actively used for informing the public. Statements concerning developments
related to the company and public disclosures are posted on the website which has been designed in
accordance with the Capital Markets Corporate Governance Principles.
f.
Monitoring the News and Speculations about the Company, and Discussions with Investors and
Analysts Face-To-Face or Via Means of Communication Such As Telephone, Email, and Facsimile.
If any news which may affect decisions of the investors before selling or buying shares and the value of
our shares in the stock exchange appears in the media, our Company makes a public disclosure about the
accuracy of such news in accordance with the format given in the Communiqué on Public Disclosure on Material Events as soon as possible.
BSH monitors electronic and printed media daily through a media monitoring agency and reports to the
senior management. In addition, news about the company is followed by the Senior Management, Legal
Affairs Directorate – Shareholders Relations Unit, and the Corporate Communication Department through
data distribution systems for which we have subscription agreements.
4-
Criteria Used For Identifying Persons with Administrative Responsibilities
People who may have access to the insider information and have administrative responsibilities will be
determined based on the scope of information accessible to them. Managers and other employees who
have access to information about a part of the Company's affairs in connection with their respective
responsibilities are not regarded as staff members who have access to insider information. Members of
the Board of Directors, members of the Board of Auditors, chairman and members of the Committee of
the Managing Directors, Finance Coordinator, Directors, and some senior and mid-level managers who
have information about the company and its future strategies are regarded as people authorized to access
insider information.
"The List of People Who Have Access to Insider Information" is drawn up and updated by the Legal
Affairs Directorate – Shareholders Relations Unit. People who are included in the list are informed about
obligations set forth in the applicable laws and regulations and sanctions to be imposed in the event of
misuse or unauthorized distribution of such information. In addition, all kinds of precautions are taken to
prevent any unauthorized access to information as part of information security. Confidentiality agreements
concluded with third parties are among measures taken by the company.
26
All inquiries related to the implementation procedures and norms related to this policy should be
addressed to the Legal Affairs Directorate.
5-
Ensuring the Confidentiality of Information Which Requires To Be Disclosed To Public
Confidentiality of insider information will be ensured until a public disclosure on a material event
regarding the Company is made. In addition, the company's employees are required to comply with the
use of insider information. Issues related to the use of insider information have been communicated to all
employees by means of the "Business Conduct Guidelines" and all kinds of measures have been taken to
prevent the use of such information.
The company observes a "Period of Silence" until the date when the financial results are officially
announced in every period when financial results are released. People who have been authorized to make
public statements during the Period of Silence do not make any comment on the company's financial
condition or respond to inquiries from analysts and investors regarding its financial condition except for
information which have already been made public.
In that context, no BSH employee may buy or sell our shares by using information which he or she may
have obtained ex officio. The Legal Affairs Directorate informs the employees (senior and med-level
managers) about this restriction within the framework of the Company's information policy.
9-
CORPORATE WEB SITE AND ITS CONTENT
Internet address of our company is: http://www.bsh.com.tr. On our web-site under the part Investor
Relations, we work to perform fully to give part to the aspects regarding the content of the web-sites
stated in article 2.2. of Part 2 of the Capital Markets Board’s Corporate Governance Principles (Serial: IV, No:56). Some information is given in English on our web-site. Following information can be found on our
web-site:
INVESTOR RELATIONS
-COMPANY INFO
 Info Regarding Trade Registry
 Shareholders Structure
 Board of Directors/Senior Executives
 Articles of Association
-CORPORATE GOVERNANCE
 Information Policy
 Policy on Aids and Donations
 Remuneration Policy for the Board Members and Senior Executives
 Dividend Distribution Policy
 Business Conduct Guidelines/ Codes of Conduct
-CORPORATE GOVERNANCE COMPLIANCE REPORT
-ANNUAL ACTIVITY REPORT
 Activity Report in English
 Activity Report in Turkish
-PERIODICAL FINANCIAL TABLES AND REPORTS
-PUBLIC DISCLOSURES
-INFORMING DOCUMENTATION FOR GENERAL ASSEMBLY
27



General Assembly Invitation Announcement
Power of Attorney
Profit Distribution Table
-LIST OF ATTENDANCE TO GENERAL ASSEMBLY AND MEETING MINUTES
 Meeting Minutes
 List of Attendance
-ANNOUNCEMENTS REGARDING DIVIDEND DISTRIBUTION
-ANNOUNCEMENTS
10-
ACTIVITY REPORT
Company’s activity reports are being drawn up in line with the Turkish Commercial Code No 6102 and the principles set out in the Corporate Governance Principles of the Capital Markets Board.
PART III- STAKEHOLDERS
11-
DISCLOSURE TO STAKEHOLDERS
Stakeholders are informed of the matters concerning their situations in the frame of the regulations.
Workers of the company are also informed of the matters concerning their situations and general situation
of the company via the information meetings held and the company magazine published with purpose of
informing. There is the opportunity that the stakeholders can deliver the illegal and incompliant
transactions of the Company to the Corporate Governance Committee or to the Board Committee for
Auditing through the Shareholders Relations Unit. Some important announcements are made to all
employees via e-mail.
12-
PARTICIPATION OF STAKEHOLDERS IN MANAGEMENT
There is no study on participation of the interest owners in management. Rights of stakeholders are
protected by the legislation.
13-
HUMAN RESOURCES POLICY
Human Resources Policy of our company is published in HR booklet and on the intranet and
communicated at the meetings held for informing the workers.
Specialties required for the tasks are taken into consideration when hiring and manager of the hiring
department interviews with the candidate in addition to HR’s evaluation. Company tries to provide training for every worker in line with his own need and every worker is treated equally in training and
promoting. Organizational chart and task of all workers have been defined. Performances are measured
and evaluated every year provided that the criterions of performance are determined beforehand.
Company realizes Employee Satisfaction Survey periodically. Good behaviors in the frame of company’s values are promoted via “Employee of the Month” application. Furthermore at the ceremonies taking place every year, employees are given plackets according to their seniority.
14-
ETHIC RULES AND SOCIAL RESPONSIBILTY
Regional Compliance Committee is established to observe the compliance to the laws, company rules and
ethic rules within the Company.
28
We are aware of our social responsibility. Our activities wherever we operate, are in line with the laws and
the principles of the UN Global Compact regarding the human rights, working principles and protection of
the environment. Our agreements with our employees, business partners and stakeholders are within the
framework of honesty and commitment.
Our company sponsors various “social responsibility projects” and sometimes contributes directly to the social responsibility projects and associations established for the benefit of public.
PART IV- BOARD OF DIRECTORS
15-
THE STRUCTURE AND FORMATION OF THE BOARD OF DIRECTORS
Board of Directors as of 31.12.2014;
Board of Directors
Offices
Offices other than the ones within the Company
Kai Gerhard
SCHRICKEL
Hasan Özcan AYDİLEK
Chairman
Ali ÇULPAN
Independent Board
Member
Member; Chairman of
CMD (CEO)
Independent Board
Member
BSH Hausgeräte GmbH
Head of Finance Division, M&A and Insurance
Vice Chairman at Bosch Sanayi ve Ticaret A.Ş., Chairman at TÜRKBESD, Board Member at MESS, Member of Board of Auditors at TISK
2BC Law Firm founding partner
Norbert W.M.
KLEIN
Markus C.DR.
SLEVOGT
Vice Chairman
BSH-UAE Dubai Chairman of Board of Directors
SLEVGT-Consult Founding partner; of Türk Demir Döküm A.Ş. (Vaillant Group) Independent Board
Member; Hefko Minerals and Metals Shipping AG
Chairman
There are two independent members. There is no woman member among the Board members.
Norbert W. M. Klein is the chairman of the Committee of Managing Directors (CEO). No board member
except the chairman of the Committee of Managing Directors is an executive board member.
No nomination committee is formed among the board members; Board Committee for Auditing is
entrusted with the task of the nominations committee in line with the related framework principle decision
of the Capital Markets Board.
Board Committee for Auditing nominated two candidates for the independent board memberships,
assessed whether the candidates meet the independency criteria and submitted this assessment as a report
to the board for approval on 02.05.2013. The written statements of the independent board members are
obtained; no matter that eliminates the independency arose within the related period.
No specific rules or restrictions apply for the board members’ offices other than the ones within the Company.
16-
ACTIVITY PRINCIPLES OF THE BOARD OF DIRECTORS
Company Secretary has been elected in order to inform Board Members and to set up communication;
procedures and processes of invitation and attendance to the meeting are maintained by the company
secretary and a file consisting of the agenda and the evaluation of results of 3 months is delivered to the
Board members 7 days prior to the Board meeting.
29
Agenda of the Board of Directors Meeting is determined jointly by the chairman and the members of the
CMD and the Company Secretary.
As a rule, Board of Directors is convened regularly twice a year. All board members except for one
member who resigned as of 30.06.204 and two members who resigned within December attended the
meetings in 2014. The simple majority of members should be present in the session in order the Board
may start its debates. Decisions are taken by the majority of the members attending the meeting. Decisions
may be taken without holding a meeting in line with article 390/4 of Turkish Commercial Code; unless
one of the Board members calls for general debate, Board decisions could be taken by absentee ballot on a
definite subject proposed by one member. In year 2014, 17 board of directors’ decision were taken in line with article 390/4 of Turkish Commercial Code. Board of Directors took its resolutions unanimously.
There was no dissenting member.
There is no important transaction or related party transaction within 2014 which has not been approved by
the independent board members.
Members of the Board of Directors are not vested with the privilege right. All members and the chairman
have the equal voting right.
17NUMBER, STRUCTURE AND INDEPENDENCY OF THE COMMITTEES SET UP BY
THE BOARD OF DIRECTORS
Board Committee for Auditing, Corporate Governance Committee and Early Inspection of Risks
Committee were formed to ensure the fulfillment of the tasks and responsibilities of the Board of
Directors.
Talking into account the current structure of the Board of Directors, it was determined that the duties of
the Nomination Committee and the Remuneration Committee stated in the Capital Markets Board
Communiqué regarding the “Determination and Application of the Corporate Governance Principles”, be fulfilled by the Corporate Governance Committee.
Duties, working principles and members of the committees are determined by the Board of Directors and
the respective directives are published on our web-site (www.bsh.com.tr).
Chairman and member of all committees are elected from amongst the independent board members.
Committee
Chairman and Members
Independency
Markus Christian DR. SLEVOGT (Chairman) Independent
Board Committee for Auditing
Ali ÇULPAN (Member)
Independent
Ali ÇULPAN (Chairman)
Independent
Corporate Governance Committee
Markus Christian DR. SLEVOGT (Member) Independent
Markus Christian DR. SLEVOGT (Chairman) Independent
Early Inspection of Risks Committee
Ali ÇULPAN (Member)
18-
Independent
RISK MANAGEMENT AND INTERNAL AUDIT MECHANISM
Separate mechanisms are set up for risk management and internal audit. Board of Directors sets up the
internal audit system also containing the risk management and information systems and processes in order
30
to minimize the effects of the risks which may influence the Company’s stakeholders especially the shareholders.
Audit and security of the information technologies are realized within the framework of ISO 27001
(International Data Security Management Systems).
All financial risks, notably liquidity, credit, currency and stock management, are regularly monitored and
the results are submitted to the Board of Directors.
The Early Inspection of Risks Committee and the Risk Management Officers structured under Financial
Coordination give recommendations and proposals to Board of Directors and Committee of Managing
Directors regarding; early inspection, assessment, calculation of the effects and probabilities of all risks
like strategic, financial and operational risks that may affect the Company, management of these risks in
line with the risk taking profile of the Company, reporting of the same and implementations of the
measures defined related to the detected risks, taking them into account in the decision taking mechanisms
and in this respect establishing and integration of an effective internal control system.
Internal Audit Department established for an internal control mechanism, audits every department either
within a plan or when deemed necessary and reports to Committee of Managing Directors and to other
related persons and submits his opinion on the cases identified to the Committee of Managing Directors
and other relevant authorities.
19-
COMPANY’S STRATEGIC GOALS
Our VISION
“First Choice”
To be the first choice of the customers, dealers, suppliers and employees
Our MISSION
*
Our mission is to have most satisfied customers and the most demanded brands in our sales
region.
*
We make our consumers’ life easier by producing high quality home appliances with innovative
functionality. We distribute and service them through the most competitive and qualified trade and service
organizations.
*
We lead our trade partners and suppliers, in Turkey and worldwide, to success through a fair and
longsighted partnership.
*
We seek for profitable growth by providing long term value for our customers and employees as
well as for our shareholders.
*
We believe that we can achieve our goals only with well qualified, high motivated and team
oriented employees.
*
We act in a socially responsible manner and treat the environment with respect.
*
Our brands are core assets and we act to make them the most preferred in their market segments.
Our VALUES
Customer Focused
We are only able to fulfill our vision and mission by treating each other as customers. We value all our
customers and strive to understand their needs.
Creativity
Innovation is fundamental to the success of our Company. We value creativity- the ability of people to
develop new ideas, identifying opportunities, solving problems and pursuing excellence.
31
Willingness to Change
We embrace and adapt to change through an ambition to learn and try new ideas. We create a positive and
inspiring work environment by giving support and necessary tools.
Team Spirit
We help each other for joint success. And we enjoy doing so.
Proactive
We prevent possible problems before they occur. If a mistake is made we strive in a fair manner for
solutions and make sure that the same mistake will not be repeated.
Responsibility
We support professional development of our employees by giving and taking responsibility.
Fairness
Fairness is a guide for us. Our personal and business interactions are based on honesty, legality and
transparency.
Sensitive to Cultural Diversity
As a member of an international company with a global mind set, we value and manage diversity.
OUR STRATEGIC GOALS
Strategic goals are determined by the Board of Directors, followed up and assessed monthly by the
Committee of Managing Directors. The realization levels of the determined strategic goals are submitted
for the approval of the Board of Directors semi annually by the Committee of Managing Directors.
Management has determined the major goals for the upcoming 5 years as follows:




20-
Profitable growth
Improve market share
Increase Research and Development Activities
Continue and increase developing and producing environmentally friendly and energy efficient
appliances
RENUMERATION
The remunerations and all other benefits provided to the board members and senior executives, the
criterions used in determination of such and remunerations principles are published on our web-site.
In the Ordinary General Assembly dated 28.03.2014, it was resolved that a gross monthly fee of TL
4.000.- be paid to every member of the Board of Directors; all members except the independent ones
notified the Company in writing that they waived their rights for the offered honorarium for that year. No
performance based payment arrangements are not used in determination of the remuneration of the board
members. Company has not credited any of the Board Members, no member has been allowed any credit
and no guarantee was given in their favor. Stock options or company performance based payment
arrangements shall not be used in the remuneration of the independent board members.
Executive board members shall be remunerated in line with the policy determined below for the senior
executives.
A premium which shall be determined by the Board of Directors in line with the opinion of the Corporate
Governance Committee and approved by the General Assembly may be paid at the year ends to the board
members who serve in the committees to be formed within the Board taking into consideration the
contributions extended and participation to the meetings.
32
Taking into account the term of Office as of assignment and quietus dates, payments shall be effected to
the Board members in line with the principle of per diem deduction. Expenditures incurred (transportation,
telephone, insurance etc.) by the Board members ex officio, shall be reimbursed by the Company.
Remunerations payable to senior executives include the performance based remuneration besides the fixed
remuneration.
The fixed remuneration to be paid to the senior executives is determined on the basis of the role of the
individual employee, including responsibility and job complexity, performance and local market
conditions.
The performance-based remuneration is calculated in line with the existing performance evaluation
system valid for all white collar employees that take into consideration the company performance and the
individual performance.
Other benefits (such as health insurance, company cars etc.) may be provided to the senior executives
in accordance with the Company HR policy.
The remunerations and all other benefits provided to the board members and senior executives are made
public through annual activity report with minimum differentiation between board and senior executives
and shareholders are informed of the same at the General Assembly.
33
BSH EV ALETLERİ SANAYİ VE TİCARET ANONİM ŞİRKETİ
CONVENIENCE TRANSLATION INTO ENGLISH OF
FINANCIAL STATEMENTS AS AT AND
FOR THE YEAR ENDED 31 DECEMBER 2014
TOGETHER WITH INDEPENDENT AUDITOR’S REPORT
(ORIGINALLY ISSUED IN TURKISH)
36
CONVENIENCE TRANSLATION INTO ENGLISH OF
INDEPENDENT AUDITOR’S REPORT
ORIGINALLY ISSUED IN TURKISH
INDEPENDENT AUDITOR’S REPORT
To the Board of Directors of BSH Ev Aletleri Sanayi ve Ticaret A.Ş.;;
Report on the Financial Statements
1. We have audited the accompanying financial statements of BSH Ev Aletleri Sanayi ve Ticaret A.Ş.
(the “Company”), which comprise the statement of balance sheet as at 31 December 2014 and the
statement of profit or loss and other comprehensive income, statement of changes in equity and
statement of cash flows for the period then ended and a summary of significant accounting policies
and other explanatory notes.
Management’s Responsibility for the Financial Statements
2. The Company’s management is responsible for the preparation and fair presentation of these
financial statements in accordance with Turkish Accounting Standards and for such internal control
as management determines is necessary to enable the preparation of financial statements that are
free from material misstatement, whether due to fraud or error.
Independent Auditor’s Responsibility
3. Our responsibility is to express an opinion on these financial statements based on our audit. Our
audit was conducted in accordance with standards on auditing issued by the Capital Markets Board
of Turkey and Independent Auditing Standards that part of Turkish Standards on Auditing issued
by the Public Oversight Accounting and Auditing Standards Authority. Those standards require that
ethical requirements are complied with and that the audit is planned and performed to obtain
reasonable assurance whether the financial statements are free from material misstatement.
An independent audit involves performing procedures to obtain evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on independent auditor’s
professional judgment, including the assessment of the risks of material misstatement of the
financial statements, whether due to error or fraud. In making those risk assessments, the
independent auditor considers internal control relevant to the entity’s preparation and fair
presentation of the financial statements in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
entity’s internal control. An independent audit includes also evaluating the appropriateness of
accounting policies used and the reasonableness of accounting estimates made by management, as
well as evaluating the overall presentation of the financial statements.
We believe that the independent audit evidence we have obtained during our audit is sufficient and
appropriate to provide a basis for our audit opinion.
37
Opinion
4. In our opinion, the financial statements present fairly, in all material respects, the financial position
of BSH Ev Aletleri Sanayi ve Ticaret A.Ş. as at 31 December 2014 and its financial performance and
cash flows for the period then ended in accordance with Turkish Accounting Standards.
Other Responsibilities Arising FromRegulatory Requirements
5. In accordance with subparagraph 4 of Article 398 of the Turkish Commercial Code (“TCC”)
No: 6102;; auditor’s report on the early risk identification system and committee has been submitted
to the Company’s Board of Directors on 5 March 2015.
6. In accordance with subparagraph 4 of Article 402 of the TCC; no significant matter has come to our
attention that causes us to believe that the Company’s bookkeeping activities for the period
1 January - 31 December 2014 is not in compliance with the code and provisions of the Company’s
articles of association in relation to financial reporting.
7. In accordance with subparagraph 4 of Article 402 of the TCC; the Board of Directors submitted to
us the necessary explanations and provided required documents within the context of audit.
Başaran Nas Bağımsız Denetim ve
Serbest Muhasebeci Mali Müşavirlik A.Ş.
a member of
PricewaterhouseCoopers
Adnan Akan, SMMM
Partner
Istanbul, 5 March 2015
38
CONVENIENCE TRANSLATION INTO ENGLISH OF FINANCIAL
STATEMENTS ORIGINALLY ISSUED IN TURKISH
BSH EV ALETLERİ SANAYİ VE TİCARET A.Ş.
FINANCIAL STATEMENTS
FOR THE PERIOD 1 JANUARY - 31 DECEMBER 2014
CONTENTS
PAGE
BALANCE SHEETS ................................................................................................................... 40-41
STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME ...
42
STATEMENTS OF CHANGES IN EQUITY ..........................................................................
43
STATEMENTS OF CASH FLOWS..........................................................................................
44
NOTES TO THE FINANCIAL STATEMENTS ..................................................................... 45-102
NOTE 1
NOTE 2
NOTE 3
NOTE 4
NOTE 5
NOTE 6
NOTE 7
NOTE 8
NOTE 9
NOTE 10
NOTE 11
NOTE 12
NOTE 13
NOTE 14
NOTE 15
NOTE 16
NOTE 17
NOTE 18
NOTE 19
NOTE 20
NOTE 21
NOTE 22
NOTE 23
NOTE 24
NOTE 25
NOTE 26
NOTE 27
ORGANISATION AND NATURE OF OPERATIONS..........................................
45
BASIS OF PRESENTATION OF FINANCIAL STATEMENTS ........................... 45-61
CASH AND CASH EQUIVALENTS ......................................................................
61
FINANCIAL INVESTMENTS ................................................................................
62
FINANCIAL LIABILITIES....................................................... .............................. 62-63
TRADE RECEIVABLES AND PAYABLES .......................................................... 63-64
OTHER RECEIVABLES AND PAYABLES ..........................................................
65
INVENTORIES ........................................................................................................
66
PROPERTY, PLANT AND EQUIPMENT ............................................................. 67-69
INTANGIBLE ASSETS ........................................................................................... 69-70
PROVISIONS, COMMITMENTS, CONTINGENT ASSETS AND LIABILITIES
...................................................................................................................... ……… 71-74
EMPLOYEE BENEFITS .........................................................................................
75
PREPAID EXPENSES ……………... .....................................................................
76
DEFERRED INCOME .............................................................................................
76
OTHER ASSETS AND LIABILITIES ....................................................................
77
EQUITY.................................................................................................................... 78-79
REVENUE AND COST OF SALES ........................................................................
80
EXPENSES BY NATURE .......................................................................................
81
OTHER OPERATING INCOME AND EXPENSES ..............................................
82
INCOME AND EXPENSES FROM INVESTMENT ACTIVITIES .......................
82
FINANCIAL INCOME AND EXPENSE ................................................................
83
TAX ASSETS AND LIABILITIES ......................................................................... 83-86
EARNINGS PER SHARE ........................................................................................
87
RELATED PARTY DISCLOSURES ...................................................................... 88-93
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT ........ 93-101
FINANCIAL INSTRUMENTS ................................................................................
102
EVENTS AFTER BALANCE SHEET DATE.........................................................
102
39
CONVENIENCE TRANSLATION INTO ENGLISH OF FINANCIAL
STATEMENTS ORIGINALLY ISSUED IN TURKISH
BSH EV ALETLERİ SANAYİ VE TİCARET A.Ş.
BALANCE SHEETS AT 31 DECEMBER 2014 AND 2013
(Amounts expressed in Turkish Lira (“TRY”) unless otherwise stated.)
Audited
Notes
31 December
2014
31 December
2013
ASSETS
Current Assets
Cash and Cash Equivalents
Trade Receivables
- Due from Related Parties
- Trade Receivables, Other Parties
Other receivables
- Due from Third Parties
- Due from Related Parties
Inventories
Prepaid expenses
Current Income Tax Assets
Other Current Assets
Non-current Assets
Financial investments
Other receivables
- Due from Related Parties
Property, Plant and Equipment
Intangible Assets
- Other Intangible Assets
Prepaid expenses
Deferred Income Tax Assets
Other Non-current Assets
TOTAL ASSETS
40
3
1,712,701,244
17,466,883
1,571,241,690
110,258,172
24
6
166,624,739
924,039,330
115,801,632
766,870,299
24
7
8
13
22
15
713,249
1,321,077
369,128,920
6,776,135
47,110,850
179,520,061
2,020,841
1,347,810
360,266,953
2,816,347
61,579,213
150,280,423
4
672,283,755
345,685
572,725,204
345,685
24
9
327,050
598,022,065
804,002
533,868,611
10
13
22
15
560,122
55,389,173
17,370,496
269,164
652,688
23,732,991
13,240,888
80,339
2,384,984,999
2,143,966,894
CONVENIENCE TRANSLATION INTO ENGLISH OF FINANCIAL
STATEMENTS ORIGINALLY ISSUED IN TURKISH
BSH EV ALETLERİ SANAYİ VE TİCARET A.Ş.
BALANCE SHEETS AT 31 DECEMBER 2014 AND 31 DECEMBER 2013
(Amounts expressed in Turkish Lira (“TRY”) unless otherwise stated.)
Audited
31 December
2014
31 December
2013
692,874,377
613,607,594
24
5
5
30,183,000
18,154,951
15,476,077
11,946,097
15,476,077
24
6
32,269,715
405,213,968
47,599,081
351,288,761
7
14
22
2,448,061
8,082,796
36,116,726
3,572,585
6,672,859
48,485,422
12
11
15
43,217,197
64,403,593
37,308,293
136,607,150
32,951,247
68,273,480
27,341,985
110,814,954
5
2,409,000
17,885,077
14
43,453,705
32,842,892
12
11
70,655,955
20,088,490
1,555,503,472
42,000,000
150,427,940
47,259,185
12,827,800
1,419,544,346
42,000,000
150,427,940
(18,559,765)
102,458
47,414,342
1,138,123,756
195,994,741
2,384,984,999
(4,502,994)
102,458
43,026,458
958,625,985
229,864,499
2,143,966,894
Notes
LIABILITIES
Current Liabilities
Borrowings
- Due to Related Parties
- Borrowings, Due to Other Parties
Short Term Portion of Long Term Borrowings
Trade Payables
- Due to Related Parties
- Trade Payable, Due to Other Parties
Other Payables
- Other payable, Due to Other Parties
Deferred Income
Current Income Tax Liabilities
Provisions
- Short Term Provisions for
Employment Benefits
- Other Short Term Provisions
Other Current Liabilities
Non-current Liabilities
Borrowings
- Borrowings, Due to Other Parties
Other Payables
Deferred Income
Provisions
- Other Non-current Provisions for
Employment Benefits
- Other Non-current Provisions
EQUITY
Paid-in Share Capital
Inflation Adjustment to Paid-in Capital
Other Comprehensive Income/ (Losses)
Not to be Reclassified Under Profit or Losses
- Actuarial Gain/(Losses)
Arising from Employee Benefits
Share Premium
Restricted Reserves
Retained Earnings
Net Income For The Period
TOTAL LIABILITIES AND EQUITY
16
16
16
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ORIGINALLY ISSUED IN TURKISH
BSH EV ALETLERİ SANAYİ VE TİCARET A.Ş.
STATEMENTS OF COMPREHENSIVE INCOME
FOR THE PERIODS ENDED 31 DECEMBER 2014 AND 2013
(Amounts expressed in Turkish Lira (“TRY”) unless otherwise stated.)
Audited
PROFIT OR LOSS
Revenue
Cost of sales (-)
Notes
1 January31 December
2014
1 January31 December
2013
17
17
4,118,672,662
(3,242,069,340)
3,530,702,947
(2,745,568,749)
876,603,322
785,134,198
Gross Profit
Marketing expenses (-)
General administrative expenses (-)
Research and development expenses (-)
Other operating income
Other operating expense (-)
18
18
18
19
19
Operating Profit
(461,129,419)
(219,193,284)
(40,827,800)
192,578,981
(40,014,585)
308,017,215
20
20
Income from investing activities
Expense from investing activities (-)
Profit before Financing Activities
(1,343,325)
306,673,890
Financial income
Financial expense (-)
21
21
Profit from Continued Operations before Tax
Taxation on Income from Continued Operations
Taxes on income (-)
Deferred tax income
22
22
22
Profit from Continued Operations
23
Earnings per share from continued operations
Net income for the period
40,258,600
(116,736,626)
(418,235,307)
(196,859,641)
(27,472,077)
189,042,640
(42,729,588)
288,880,225
2,800,830
-
291,681,055
41,651,938
(56,413,673)
230,195,864
276,919,320
(36,116,726)
1,915,603
(34,201,123)
(48,485,422)
1,430,601
(47,054,821)
195,994,741
229,864,499
4.67
5.47
195,994,741
229,864,499
Other comprehensive income:
Items not be classified to profit or losses
Actuarial (gain) / losses arising from employee benefits
(14,056,771)
6,424,846
Other comprehensive income (net of tax)
(14,056,771)
6,424,846
Total comprehensive income
181,937,970
42
236,289,345
CONVENIENCE TRANSLATION INTO ENGLISH OF FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH
BSH EV ALETLERİ SANAYİ VE TİCARET A.Ş.
STATEMENTS OF CHANGES IN EQUITY FOR THE PERIODS ENDED 31 DECEMBER 2014 AND 2013
(Amounts expressed in Turkish Lira (“TRY”) unless otherwise stated.)
Paid-in
Note share capital
Inflation
adjustment to
paid-in capital
S hare
premium
Restricted
reserves
Other comprehensive
Income not to be
reclassified to profit or loss
Actuarial gain/ (losses)
arising from
employee benefits
42,000,000
150,427,940
102,458
43,026,458
(10,927,840)
803,674,671
154,951,314
1,183,255,001
-
-
-
-
6,424,846
154,951,314
-
(154,951,314)
229,864,499
236,289,345
42,000,000
150,427,940
102,458
43,026,458
(4,502,994)
958,625,985
229,864,499
1,419,544,346
42,000,000
150,427,940
102,458
43,026,458
(4,502,994)
958,625,985
229,864,499
1,419,544,346
-
-
-
4,387,884
-
(14,056,771)
229,864,499
(4,387,884)
(45,978,844)
-
(229,864,499)
195,994,741
(45,978,844)
181,937,970
42,000,000
150,427,940
102,458
47,414,342
(18,559,765)
1,138,123,756
195,994,741
1,555,503,472
Balances at 1 January 2013
Transfers
Total comprehensive income
Balances at 31 December 2013
16
Balances at 1 January 2014
Transfers to the accumulated profit
Transfers to the legal reserves
Dividend payment
Total comprehensive income
Balances at 31 December 2014
16
43
Retained earnings
Accumulated
Net income
profit/
(losses) for the period
Total
Equity
CONVENIENCE TRANSLATION INTO ENGLISH OF FINANCIAL STATEMENTS
ORIGINALLY ISSUED IN TURKISH
BSH EV ALETLERİ SANAYİ VE TİCARET A.Ş.
STATEMENTS OF CASH FLOWS FOR THE PERIODS ENDED
31 DECEMBER 2014 AND 2013
(Amounts expressed in Turkish Lira (“TRY”) unless otherwise stated.)
1 January 31 De ce mbe r
2014
1 January 31 De ce mbe r
2013
A. CASH FLOWS FROM OPERATING ACTIVITIES
105,909,470
252,449,541
Net income for the period
195,994,741
229,864,499
Note s
Adjustments to reconcile profit for the period:
- Income tax expense
22
34,201,123
47,054,821
- Gain/ ( Loss) from sales of tangible assets
20
1,343,325
(2,800,830)
- Provision for employment termination benefits
12
14,078,215
12,617,576
- Provision for unused vacation
12
(149,555)
703,827
- Provision for warranty costs
12
56,555,775
38,953,737
- Provision for bonuses
12
19,477,722
14,629,298
- Provision for montage expenses
11
18,668,000
17,552,449
- (Decrease) / increase in provision of sales and marketing expenses
(489,877)
478,768
- Provision for production and administration expenses
2,835,365
(797,789)
(3,205,561)
(1,268,388)
- Provision for other expenses
- Allowance for doubtful receivables
6
11,080,480
2,225,835
- Provision for impairment of inventories
8
303,433
10,203,643
- Depreciation and amortisation
9-10
- Unrealized foreign exchange (gain)/loss
- Unrealized net interest (income) /expense
95,919,324
88,808,802
4,657,332
(17,647,858)
12,314,155
2,443,183
267,589,256
213,157,074
Changes in net working capital :
Increase / (decrease) from trade receivables and due from related parties
Decrease / (increase) in inventories
(213,993,492)
44,027,845
(9,165,400)
(65,735,994)
Decrease / (increase) in other receivables and prepaid expenses
(33,804,693)
(6,639,390)
(Decrease) / increase in other current and non-current assets
(29,428,463)
(75,869,476)
Increase / (decrease) in trade payables and due to related parties
Decrease in provisions of debt
Increase / (decrease) in other payables, expense accruals and deferred income
28,859,383
46,288,010
(61,277,789)
(58,370,978)
31,128,484
8,523,897
(287,681,970)
(107,776,086)
Income tax paid
(47,110,850)
(62,278,406)
Bonus paid
(14,629,298)
(14,329,761)
Net cash used in operating activities:
Employment termination benefit paid
12
B. CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment
9
Purchase of intangible assets
10
(8,252,409)
(6,187,779)
(69,992,557)
(82,795,946)
(161,323,537)
(88,765,309)
(164,224,041)
(96,905,158)
(446,265)
(725,236)
3,346,769
8,865,085
C. CASH FLOWS FROM FINANCING ACTIVITIES
(37,377,222)
(157,524,497)
Interest paid
(75,741,658)
(23,324,319)
Proceeds from the sale of property and equipment
Interest received
12,977,417
12,353,516
Proceeds from borrowings
2,564,925,058
1,585,228,722
Repayment of borrowings
(2,493,559,195)
(1,731,782,416)
(45,978,844)
-
Dividends paid
NET INCREASE/ DECREASE IN CASH AND CASH EQ UIVALENTS
(92,791,289)
6,159,735
CASH AND CASH EQ UIVALENTS AT THE BEGINNING OF THE PERIOD
3
110,258,172
104,098,437
CASH AND CASH EQ UIVALENTS AT THE END OF THE PERIOD
3
17,466,883
110,258,172
44
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ORIGINALLY ISSUED IN TURKISH
BSH EV ALETLERİ SANAYİ VE TİCARET A.Ş.
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2014
(Amounts expressed in Turkish Lira (“TRY”) unless otherwise stated.)
1.
ORGANISATION AND NATURE OF OPERATIONS
BSH Ev Aletleri Sanayi ve Ticaret A.Ş. (“the Company”) was established in Istanbul, Turkey. The Company is engaged in the production of white durable goods, and the marketing and sale of white
durable goods, small household appliances, electronics and office equipment, and after-sale services
for the goods imported and produced. The Company manufactures, imports, and sells household
appliances under the Bosch, Siemens, Profilo and Gaggenau brands.
The Company carries out production at the BSH Home Appliances Plant located in Çerkezköy. The head-quarters of the Company are located at Çakmak Mahallesi, Balkan Street No: 51 Ümraniye/İstanbul.
The Company is a subsidiary of BSH Bosch und Siemens Hausgeräte GmbH, which is located in Germany. The principal shareholders and their respective shareholdings in the Company are presented
in Note16. The Company is still subject to Capital Market Board (“CMB”) regulations, according to
the decision from the meeting of Board of Directors of Borsa Istanbul A.Ş. (“Istanbul Stock Exchage”) as of 13 February 2014, the Company shares treated in ISE National Market were removed from ISE
quota in accordance with the request of removing from the stock market quota.
Approval of financial statements:
The financial statements prepared as of and for the period ended 31 December 2014 have been
approved and authorised for declaration on 5 March 2015 by the Board of Directors. The general
assembly and specific regulatory authorities are authorized to recast the published financial statements.
2.
BASIS OF PRESENTATION OF FINANCIAL STATEMENTS
2.1
Financial Reporting Standards
2.1.1 Preparation of Financial Statements and Accounting Standards
The accompanying financial statements are prepared in accordance with Communiqué Serial II, No:14.1, “Principles of Financial Reporting in Capital Markets” (“the Communiqué”) published in the Official Gazette numbered 28676 on 13 June 2013. According to Article 5 of the Communiqué, financial statements are prepared in accordance with the Turkish Accounting Standards issued by
Public Oversight Accounting and Auditing Standards Authority (“POA”). TAS contains Turkish Accounting Standards, Turkish Financial Reporting Standards (“TFRS”) and its addendum and interpretations (“IFRIC”).
The Company maintains their books of accounts and prepare their statutory financial statements in
accordance with the Turkish Commercial Code (“TCC”), tax legislation, the Uniform Chart of Accounts issued by the Ministry of Finance and principles issued by CMB. The financial statements
are based on the statutory records. Financial statements have been disclosed in compliant with the
reporting formats specified in illustrative financial statement and guidance published by POA.
Besides, the Company has prepared their financial statements based on the accounting policies
disclosed in the Note 2.3 for the purpose of fair presentation to statutory accounts in accordance with
the TAS.
45
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ORIGINALLY ISSUED IN TURKISH
BSH EV ALETLERİ SANAYİ VE TİCARET A.Ş.
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2014
(Amounts expressed in Turkish Lira (“TRY”) unless otherwise stated.)
2.
2.1
BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued)
Financial Reporting Standards (Continued)
Financial statements have been prepared assuming that the Company 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.
Basis of Consolidation
The Company does not have any subsidiaries consolidated to the Company’s financial statements. Profilo Elektrogerate VmbH a wholly owned subsidiary of the Company and accounted for under
Financial Assets, has not been consolidated in financial statements on the grounds of materiality.
Comparatives and restatement of prior periods’ financial statements
The financial statements of the Company include comparative financial information to enable the
determination of the trends in financial position and performance. For the purposes of effective
comparison, comparative financial statements can be reclassified when deemed necessary by the
Company, where descriptions on significant differences are disclosed. As of 31 December 2014,
comparative figures do not have any significant reclassification to conform to presentation of the
current period financial statements.
2.2
New and amended International Financial Reporting Standards
The new standards, amendments and interpretations which are effective for the financial statements as
of 31 December 2014:
- Amendment to IAS 32,‘Financial instruments:Presentation’, on offsetting financial assets and financial liabilities, effective from annual periods beginning on or after 1 January 2014. This
amendment updates the application guidance in IAS 32, ‘Financial instruments: Presentation’, to clarify some of the requirements for offsetting financial assets and financial liabilities on the balance
sheet. The Standard is not applicable for the Company and did not have any impact on the financial
position or performance of the Company.
- Amendments to IAS 36, ‘Impairment of assets’, effective from annual periods beginning on or after 1 January 2014. These amendments address the disclosure of information about the recoverable
amount of impaired assets if that amount is based on fair value less costs of disposal. The Standard is
not applicable for the Company.
- Amendment to IAS 39 ‘Financial instruments: Recognition and measurement’, on novation of derivatives and hedge accounting, effective from annual periods beginning on or after 1 January 2014.
These narrow-scope amendments allow hedge accounting to continue in a situation where a derivative,
which has been designated as a hedging instrument. The Standard is not applicable for the Company
and did not have any impact on the financial position or performance of the Company.
- IFRIC 21, ‘Levies’, effective from annual periods beginning on or after 1 January 2014. This interpretation is on IAS 37, ‘Provisions, contingent liabilities and contingent assets’. IAS 37 sets out criteria for the recognition of a liability, one of which is the requirement for the entity to have a
46
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ORIGINALLY ISSUED IN TURKISH
BSH EV ALETLERİ SANAYİ VE TİCARET A.Ş.
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2014
(Amounts expressed in Turkish Lira (“TRY”) unless otherwise stated.)
2.
2.2
BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued)
New and amended International Financial Reporting Standards (Continued)
present obligation as a result of a past event (known as an obligating event). The interpretation
clarifies that the obligating event that gives rise to a liability to pay a levy is the activity described in
the relevant legislation that triggers the payment of the levy. The Standard is not applicable for the
Company and did not have any impact on the financial position or performance of the Company.
- Amendments to IFRS 10, ‘Consolidated financial statements’, IFRS 12 and IAS 27 for investment entities, effective from annual periods beginning on or after 1 January 2014. These amendments mean
that many funds and similar entities will be exempt from consolidating most of their subsidiaries.
Instead, they will measure them at fair value through profit or loss. The amendments give an exception
to entities that meet an ‘investment entity’ definition and which display particular characteristics. Changes have also been made IFRS 12 to introduce disclosures that an investment entity needs to
make. The Standard is not applicable for the Company and did not have any impact on the financial
position or performance of the Company.
New IFRS standards, amendments and IFRICs effective after 1 January 2015
- Annual improvements 2012; effective from annual periods beginning on or after 1 July 2014. These
amendments include changes from the 2010-12 cycle of the annual improvements project, that affect 7
standards:
- IFRS 2, Share-based payment
- IFRS 3, Business Combinations
- IFRS 8, Operating segments
- IFRS 13, Fair value measurement
- IAS 16, Property, plant and equipment and IAS 38, Intangible assets
- Consequential amendments to IFRS 9, Financial instruments, IAS 37, Provisions,
contingent liabilities and contingent assets, and
- IAS 39, Financial instruments – Recognition and measurement
It is not estimated that the standard has an impact on the financial position or performance of the
Company.
- Annual improvements 2013; effective from annual periods beginning on or after 1 July 2014. These
amendments include changes from the 2011-12-13 cycle of the annual improvements project, that
affect 4 standards:
- IFRS 1, First time adoption
- IFRS 3, Business combinations
- IFRS 13, Fair value measurement
- IAS 40, Investment property’.
It is not estimated that the standard has an impact on the financial position or performance of the
Company.
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NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2014
(Amounts expressed in Turkish Lira (“TRY”) unless otherwise stated.)
2.
2.2
BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued)
New and amended International Financial Reporting Standards (Continued)
- IFRS 14 ‘Regulatory deferral accounts’, effective from annual periods beginning on or after 1 January 2016. IFRS 14, ‘Regulatory deferral accounts’ permits first–time adopters to continue to
recognise amounts related to rate regulation in accordance with their previous GAAP requirements
when they adopt IFRS. However, to enhance comparability with entities that already apply IFRS and
do not recognise such amounts, the standard requires that the effect of rate regulation must be
presented separately from other items. It is not estimated that the Standard has an impact on the
financial position or performance of the Company.
- Amendment to IFRS 11, 'Joint arrangements' on acquisition of an interest in a joint operation,
effective from annual periods beginning on or after 1 January 2016. This amendment adds new
guidance on how to account for the acquisition of an interest in a joint operation that constitutes a
business. The amendments specify the appropriate accounting treatment for such acquisitions. The
standard is not applicable for the Company and did not have any impact on the financial position or
performance of the Company.
- Amendment to IAS 16, 'Property, plant and equipment' and IAS 38, 'Intangible assets', on
depreciation and amortisation, effective from annual periods beginning on or after 1 January 2016. In
this amendment the it has clarified that the use of revenue based methods to calculate the depreciation
of an asset is not appropriate because revenue generated by an activity that includes the use of an asset
generally reflects factors other than the consumption of the economic benefits embodied in the asset. It
is also clarified that revenue is generally presumed to be an inappropriate basis for measuring the
consumption of the economic benefits embodied in an intangible asset. The standard is not applicable
for the Company and did not have any impact on the financial position or performance of the
Company.
- Amendments to IAS 27, ‘Separate financial statements’ on the equity method, effective from annual periods beginning on or after 1 January 2016. These amendments allow entities to use the equity
method to account for investments in subsidiaries, joint ventures and associates in their separate
financial statements. The standard is not applicable for the Company and did not have any impact on
the financial position or performance of the Company.
- Amendments to IFRS 10, ‘Consolidated financial statements’ and IAS 28, ‘Investments in associates and joint ventures’, effective from annual periods beginning on or after 1 January 2016. These amendments address an inconsistency between the requirements in IFRS 10 and those in IAS 28 in
dealing with the sale or contribution of assets between an investor and its associate or joint venture.
The main consequence of the amendments is that a full gain or loss is recognised when a transaction
involves a business (whether it is housed in a subsidiary or not). A partial gain or loss is recognised
when a transaction involves assets that do not constitute a business, even if these assets are housed in a
subsidiary. The standard is not applicable for the Company and did not have any impact on the
financial position or performance of the Company.
- IFRS 15 ‘Revenue from contracts with customers’, effective from annual periods beginning on or after 1 January 2017. IFRS 15, ‘Revenue from contracts with customers’ is a converged standard from the IASB and FASB on revenue recognition. The standard will improve the financial reporting of
revenue and improve comparability of the top line in financial statements globally. The standard is not
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NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2014
(Amounts expressed in Turkish Lira (“TRY”) unless otherwise stated.)
2.
2.3
BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued)
New and amended International Financial Reporting Standards (Continued)
applicable for the Company and did not have any impact on the financial position or performance of
the Company.
- IFRS 9 ‘Financial instruments’, effective from annual periods beginning on or after 1 January 2018. This standard replaces the guidance in IAS 39. It includes requirements on the classification and
measurement of financial assets and liabilities; it also includes an expected credit losses model that
replaces the current incurred loss impairment model. The standard is not applicable for the Company
and did not have any impact on the financial position or performance of the Company.
- Amendments to IAS 16 ‘Property,plant and equipment’, and IAS 41, ‘Agriculture’, regarding bearer plants, effective from annual periods beginning on or after 1 January 2016. These amendments change
the financial reporting for bearer plants, such as grape vines, rubber trees and oil palms. It has been
decided that bearer plants should be accounted for in the same way as property, plant and equipment
because their operation is similar to that of manufacturing. Consequently, the amendments include
them within the scope of IAS 16, instead of IAS 41. The produce growing on bearer plants will remain
within the scope of IAS 41. The standard is not applicable for the Company and did not have any
impact on the financial position or performance of the Company.
- Amendment to IAS 19 regarding defined benefit plans, effective from annual periods beginning on
or after 1 July 2014. These narrow scope amendments apply to contributions from employees or third
parties to defined benefit plans. The objective of the amendments is to simplify the accounting for
contributions that are independent of the number of years of employee service, for example, employee
contributions that are calculated according to a fixed percentage of salary. The standard is not
applicable for the Company and did not have any impact on the financial position or performance of
the Company.
- Amendments to IAS 16 ‘Property,plant and equipment’, and IAS 41, ‘Agriculture’, regarding bearer
plants, effective from annual periods beginning on or after 1 January 2016. These amendments change
the financial reporting for bearer plants, such as grape vines, rubber trees and oil palms. It has been
decided that bearer plants should be accounted for in the same way as property, plant and equipment
because their operation is similar to that of manufacturing. Consequently, the amendments include
them within the scope of IAS 16, instead of IAS 41. The produce growing on bearer plants will remain
within the scope of IAS 41. The standard is not applicable for the Company and did not have any
impact on the financial position or performance of the Company.
- Amendment to IAS 19 regarding defined benefit plans, effective from annual periods beginning on
or after 1 July 2014. These narrow scope amendments apply to contributions from employees or third
parties to defined benefit plans. The objective of the amendments is to simplify the accounting for
contributions that are independent of the number of years of employee service, for example, employee
contributions that are calculated according to a fixed percentage of salary. The standard is not
applicable for the Company and did not have any impact on the financial position or performance of
the Company.
- Annual improvements 2014, effective from annual periods beginning on or after 1 January 2016.
These set of amendments impacts 4 standards:
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NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2014
(Amounts expressed in Turkish Lira (“TRY”) unless otherwise stated.)
2.
2.2
BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued)
New and amended International Financial Reporting Standards (Continued)
- IFRS 5, ‘Non-current assets held for sale and discontinued operations’ regarding methods of disposal
- IFRS 7, ‘Financial instruments: Disclosures’, (with consequential amendments to IFRS 1) regarding servicing contracts
- IAS 19, ‘Employee benefits’ regarding discount rates
- IAS 34, ‘Interim financial reporting’ regarding disclosure of information
2.3
Critical Accounting Estimates and Assumptions
The preparation of financial statements necessitates the use of estimates and assumptions that affect
asset and liability amounts reported as of the balance sheet date, explanations of contingent liabilities
and assets; and income and expense amounts reported for the accounting period. Although these
estimates and assumptions are based on all management information related to the events and
transactions, actual results may differ from them. The estimates and assumptions that have a
significant risk of causing a material adjustment to the carrying amounts of assets and liabilities for the
next reporting period are outlined below:
(i)
Provisions
The amount recognised as a provision is the best estimate of the consideration required to settle the
present obligation at the balance sheet date, taking into account the risks and uncertainties surrounding
the obligation. In this context, as a result of past events, the Company recognises assembly provisions
for pending assembly services for sales, workmanship and material expenses incurred by services for
free within the scope of product warranties.
Provisions are recognised when the Company has a present legal or constructive obligation as a result
of past events, when it is probable that an outflow of resources embodying economic benefits will be
required to settle the obligation and when reliable estimate can be made of the amount of the
obligation. In this context, the Company has evaluated the law suits and court cases opened against it
at 31 December 2014 and for the ones where the Company estimates more than 50% probability of
losing them necessary provisions are accounted for in the financial statements (Note 11).
(ii)
Provision for trade receivables
The Company calculates the provision for impairment of trade receivables to cover the estimated
losses resulting from the inability of its customers’ to make required payments. The estimates used in evaluating the adequacy of the provision for impairment of trade receivables are based on the aging of
the trade receivable balances and the trend of collection performance. The Company considers that the
accounting estimate related to the provision for impairment of trade receivables is a critical accounting
estimate since it involves assumptions about future customer’ behaviour and the resulting future cash collections. If the financial condition of the customer were to be deteriorating, actual write-offs of
currently existing trade receivables may be higher than expected and may exceed the level of the
provision recognised at 31 December 2014.
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NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2014
(Amounts expressed in Turkish Lira (“TRY”) unless otherwise stated.)
2.
2.3
(iii)
BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued)
Critical Accounting Estimates and Assumptions (Continued)
Warranty provision
Warranty provisions represents, fair value of management’s best estimations related with the
amount of economic benefit outflow which is necessary for the warranty programme that company
assures for the product sold. These provisions, estimated on the basis of prior period trends on the
returns; could be change as a result of new launched products, production processes or other facts
which affect output quality.
(iv)
Other current assets
Management of the Company accounted the paid VAT amount including the interest and penalties
under other current assets since the collection is possible in the light of developments and in
accordance with the Company’s legal advisor and external legal counsels in the lawsuits and due to
the retrospective application of law and legislation provisions that entered into force at a later date
(Note 15).
2.4
Summary of Significant Accounting Policies
Revenue recognition
Revenue is recognised on an accrual basis on fair value given that it is fairly measurable and is highly
likely for the transaction to result in the inflow of economic benefits to the Company. Net sales are
achieved through subtracting discounts and commissions. If the sales transaction contains a financing
element, the fair value of the sales is measured through discounting future collections using the
effective interest method from the nominal sales value. The difference between the fair value and the
nominal value of sales is recognised as financial income for the relevant period on an accrual basis.
Sale of goods
Revenue from sale of goods is recognized when all the following conditions are satisfied:





The Company has transferred to the buyer the significant risks and rewards of ownership of the
goods,
The Company retains neither continuing managerial involvement to the degree usually
associated with ownership nor effective control over the goods sold,
The amount of revenue can be measured reliably
It is probable that the economic benefits associated with the transaction will flow to the entity
and
The costs incurred or to be incurred in respect of transactions can be measured reliably.
Rendering of services and other sales
Revenue associated with the transaction involving the rendering of services and other sales can be
recognised on an accrual basis from its fair value, given that the service has been rendered, the
defining elements of revenue have been fulfilled, the fair value of the transaction can be measured
reliably and the inflow of economic benefits to the Company are probable.
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NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2014
(Amounts expressed in Turkish Lira (“TRY”) unless otherwise stated.)
2.
2.4
BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued)
Summary of Significant Accounting Policies (Continued)
Interest revenue:
Interest revenue is accrued on a time basis, by reference to the principal sum outstanding and at the
effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts
through the expected life of the financial asset to that asset’s net carrying amount.
Inventories
Inventories are valued at the lower of cost or net realisable value less costs to sell. Cost of inventories
comprises the purchase cost and the cost of bringing inventories into their present location and
condition. Cost is determined by the monthly moving weighted average method. The cost of
borrowings is not included in the cost of inventories. Net realisable value less cost to sell is the
estimated selling price in the ordinary course of business, less the estimated cost necessary to make the
sale.
Property, plant and equipment
Property, plant and equipment are carried at cost less accumulated depreciation and any accumulated
impairment losses.
Properties in the process of construction for production, rental or administrative purposes, or for
purposes not yet determined, are carried at cost, less any recognised impairment loss. Cost includes
professional fees. Depreciation of these assets, on the same basis as other property assets, commences
when the assets are ready for their intended use.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow
to the group and the cost of the item can be measured reliably. The carrying amount of the replaced
part is derecognised. All other repairs and maintenance are charged to the income statement during the
financial period in which they are incurred.
Land is not depreciated. Depreciation on other assets is calculated using the straight-line method to
allocate their cost or revalued amounts to their residual values over their estimated useful lives.
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount.
Depreciation is charged so as to write off the cost or valuation of assets, other than land and properties
under construction, over their estimated useful lives, using the straight-line method. The estimated
useful lives, residual values and depreciation method are reviewed at each year end, with the effect of
any changes in estimate accounted for on a prospective basis.
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NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2014
(Amounts expressed in Turkish Lira (“TRY”) unless otherwise stated.)
2.
2.4
BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued)
Summary of Significant Accounting Policies (Continued)
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and
are recognised within “Other (losses)/gains – net” in the income statement.
Intangible assets
Licenses
Separately acquired licences are shown at historical cost. Licences acquired in a business combination
are recognised at fair value at the acquisition date. Licences have a finite useful life and are carried at
cost less accumulated amortisation. Amortisation is calculated using the straight-line method to
allocate the cost of licences over their estimated useful lives.
Computer software
Acquired computer software licences are capitalised on the basis of the costs incurred to acquire and
use the specific software. These costs are amortised over their estimated useful lives (one year).
Impairment of assets
At each reporting date, the Company assesses whether there is any indication that an asset other than
deferred tax asset, intangible assets with indefinite useful lives, financial assets at fair value and
goodwill may be impaired. When an indication of impairment exists, the Company estimates the
recoverable values of such assets. Impairment exists if the carrying value of an asset or a cash
generating unit is greater than its recoverable amount which is the higher of value in use or fair value
less costs to sell. Value in use is the present value of the future cash flows expected to be derived from
an asset or cash-generating unit. An impairment loss is recognised immediately in profit or loss. A
cash-generating unit is the smallest identifiable group of assets that generates cash inflows that are
largely independent of the cash flows from other assets or group of assets.
An impairment loss recognised in prior period for an asset is reversed if the subsequent increase in the
asset’s recoverable amount is caused by a specific event since the last impairment loss was recognised.
Such a reversal amount cannot be higher than the previously recognised impairment loss and shall not
exceed the carrying amount that would have been determined, net of amortisation or depreciation, had
no impairment loss been recognised for the asset in prior years. Such a reversal is recognized as
income in the financial statements.
Borrowing costs
The company applies TAS 23 revised since 1 January 2009. Borrowing costs directly attributable to
the acquisition, construction or production of qualifying assets, which are assets that necessarily take a
substantial period of time to get ready for their intended use or sale, are added to the cost of those
assets, until such time as the assets are substantially ready for their intended use or sale. Other
borrowing costs are recognized in profit or loss when they are incurred.
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NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2014
(Amounts expressed in Turkish Lira (“TRY”) unless otherwise stated.)
2.
2.4
BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued)
Summary of Significant Accounting Policies (Continued)
Offsetting
All items with significant amounts and nature, even with similar characteristics, are presented
separately in the financial statements. Insignificant amounts are grouped and presented by means of
items having similar substance and function. When the nature of transactions and events necessitate
offsetting, presentation of these transactions and events over their net amounts or recognition of the
assets after deducting the related impairment are not considered a violation of the rule of nonoffsetting. As a result of the transactions in the normal course of business, revenue other than sales are
presented as net provided that the nature of the transaction or the event will qualify for offsetting.
Credit finance income/charges
Credit finance income/charges represent imputed finance income/charges on credit sales and
purchases. Such income/charges calculated by using the effective interest method are recognised as
financial income or expenses over the period of credit sale and purchases, and included under financial
income and expenses.
Related parties
Shareholders who have control or common control on the Company’s, the companies or affiliates controlled by or affiliated to the shareholders, key management personnel and members of the board
of directors, their families, the companies or affiliates controlled by or affiliated to them are deemed
related parties in accordance with the aim of these financial statements.
Trade receivables
Trade receivables are amounts due from customers for merchandise sold or services performed in the
ordinary course of business. If collection is expected in one year or less (or in the normal operating
cycle of the business if longer), they are classified as current assets. If not, they are presented as noncurrent assets. Trade receivables are recognised initially at fair value and subsequently measured at
amortised cost using the effective interest method, less provision for impairment. A credit risk
provision for trade receivables is established if there is objective evidence that the Company will not
be able to collect all amounts due. The amount of the provision is the difference between the carrying
amount and the recoverable amount, being the present value of all cash flows, including amounts
recoverable from guarantees and collateral, discounted based on the original effective interest rate of
the originated receivables at inception. If the amount of the impairment subsequently decreases due to
an event occurring after the write-down, the release of the provision is credited to other income.
Trade payables
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary
course of business from suppliers. Trade payables are recognised initially at fair value and
subsequently measured at amortised cost using the effective interest method.
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NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2014
(Amounts expressed in Turkish Lira (“TRY”) unless otherwise stated.)
2.
2.4
BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued)
Summary of Significant Accounting Policies (Continued)
Government incentives and grants
Government incentives, including non-monetary grants at fair value, are included in the financial
statements only if there is reasonable assurance that the Company will fulfil all required conditions
and acquire the incentive.
Dividend distribution
Dividend distribution to the company’s shareholders is recognised as a liability in the company’s financial statements in the period in which the dividends are approved by the company’s shareholders.
Share premium
Share premium represents differences resulting from the sale of the Company’s subsidiaries and associates’ shares at a price exceeding the face values of those shares or differences between the face
values and the fair value of shares issued for acquired companies.
Share capital
Ordinary shares are classified as equity. Mandatorily redeemable preference shares are classified as
liabilities. Incremental costs directly attributable to the issue of new ordinary shares or options are
shown in equity as a deduction, net of tax, from the proceeds. Where any group company purchases
the company’s equity share capital, the consideration paid, including any directly attributable
incremental costs (net of income taxes) is deducted from equity attributable to the company’s equity holders until the shares are cancelled or reissued. Where such ordinary shares are subsequently
reissued, any consideration received, net of any directly attributable incremental transaction costs and
the related income tax effects, is included in equity attributable to the company’s equity holders.
Segment reporting
The Company, which is incorporated and domiciled in Turkey, has the primary operation of white
durable goods production and the marketing and sale of white durable goods, small household
appliances, electronics and office equipment, and after-sales services for goods imported and
produced. The Company’s operating segments, nature and economic characteristics of its products, nature of production processes, classification of customers in terms of risk for their products and
services and methods used to distribute their products are similar. Furthermore, the Company structure
has been organised to operate in one segment rather than separate business segments. Consequently,
the business activities of the Company are considered to be in one operating segment and the operating
results, resources to be allocated to the segment and assessment of performance are managed in this
respect.
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NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2014
(Amounts expressed in Turkish Lira (“TRY”) unless otherwise stated.)
2.
2.4
BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued)
Summary of Significant Accounting Policies (Continued)
Financial assets
a) Classification
The company classifies its financial assets in the following categories: at fair value through profit or
loss, loans and receivables, and available for sale. The classification depends on the purpose for which
the financial assets were acquired. Management determines the classification of its financial assets at
initial recognition.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are
not quoted in an active market. They are included in current assets, except for maturities greater than
12 months after the end of the reporting period. These are classified as non-current assets. The
company’s loans and receivables comprise “trade and other receivables” and “cash and cash equivalents” in the balance sheet.
Available-for-sale financial assets
Available-for-sale financial assets are non-derivatives that are either designated in this category or not
classified in any of the other categories. They are included in non-current assets unless the investment
matures or management intends to dispose of it within 12 months of the end of the reporting period.
a) Recognition and measurement
Regular purchases and sales of financial assets are recognised on the trade-date – the date on which the
group commits to purchase or sell the asset. Investments are initially recognised at fair value plus
transaction costs for all financial assets not carried at fair value through profit or loss. Financial assets
carried at fair value through profit or loss are initially recognised at fair value, and transaction costs
are expensed in the income statement. Financial assets are derecognised when the rights to receive
cash flows from the investments have expired or have been transferred and the Company has
transferred substantially all risks and rewards of ownership.
When securities classified as available for sale are sold or impaired, the accumulated fair value
adjustments recognised in equity are included in the income statement as ‘gains and losses from investment securities’.
Available-for-sale financial assets and financial assets at fair value through profit or loss are
subsequently carried at fair value.
Gains or losses arising from changes in the fair value of the ‘financial assets at fair value through profit or loss’ category are presented in the income statement within ‘other (losses)/gains - net’ in the period in which they arise.
Dividend income from financial assets at fair value through profit or loss is recognised in the income
statement as part of other income when the group’s right to receive payments is established.
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NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2014
(Amounts expressed in Turkish Lira (“TRY”) unless otherwise stated.)
2.
2.4
BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued)
Summary of Significant Accounting Policies (Continued)
b) Offsetting financial instruments
Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is
a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net
basis or realise the asset and settle the liability simultaneously.
c) Impairment of financial assets
The Company assesses at the end of each reporting period whether there is objective evidence that a
financial asset or group of financial assets is impaired. A financial asset or a group of financial assets
is impaired and impairment losses are incurred only if there is objective evidence of impairment as a
result of one or more events that occurred after the initial recognition of the asset (a “loss event”) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or
group of financial assets that can be reliably estimated.
d)
Impairment of financial assets (Continued)
The criteria that the Company uses to determine that there is objective evidence of an impairment loss
include:
•
•
•
•
•
•
(i)
(ii)
significant financial difficulty of the issuer or obligor;
a breach of contract, such as a default or delinquency in interest or principal payments;
the group, for economic or legal reasons relating to the borrower’s financial difficulty, granting to the borrower a concession that the lender would not otherwise consider;
it becomes probable that the borrower will enter bankruptcy or other financial reorganisation;
the disappearance of an active market for that financial asset because of financial difficulties; or
observable data indicating that there is a measurable decrease in the estimated future cash flows
from a portfolio of financial assets since the initial recognition of those assets, although the
decrease cannot yet be identified with the individual financial assets in the portfolio, including:
adverse changes in the payment status of borrowers in the portfolio; and
national or local economic conditions that correlate with defaults on the assets in the portfolio
The Company first assesses whether objective evidence of impairment exists.
For the loans and receivables category, the amount of the loss is measured as the difference between
the asset’s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset’s original effective interest rate. The carrying amount of the asset is reduced and the amount of the loss is recognised in the
income statement. If a loan or held to maturity investment has a variable interest rate, the discount rate
for measuring any impairment loss is the current effective interest rate determined under the contract.
As a practical expedient, the Company may measure impairment on the basis of an instrument’s fair value using an observable market price.
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NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2014
(Amounts expressed in Turkish Lira (“TRY”) unless otherwise stated.)
2.
2.4
BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued)
Summary of Significant Accounting Policies (Continued)
If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related
objectively to an event occurring after the impairment was recognised (such as an improvement in the
debtor’s credit rating), the reversal of the previously recognised impairment loss is recognised in the income statement.
Effects of Changes in Foreign Exchange Rates
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates
prevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchange
gains and losses resulting from the settlement of such transactions and from the translation at year-end
exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in
the income statement, except when deferred in other comprehensive income as qualifying cash flow
hedges and qualifying net investment hedges.
Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are
presented in the income statement within “finance income or cost”. All other foreign exchange gains
and losses are presented in the income statement within “other (losses)/gains – net”.
Changes in the fair value of monetary securities denominated in foreign currency classified as
available for sale are analysed between translation differences resulting from changes in the amortised
cost of the security and other changes in the carrying amount of the security.
Translation differences related to changes in amortised cost are recognised in profit or loss, and other
changes in carrying amount are recognised in other comprehensive income.
Translation differences on non-monetary financial assets and liabilities such as equities held at fair
value through profit or loss are recognised in profit or loss as part of the fair value gain or loss.
Translation differences on non-monetary financial assets, such as equities classified as available for
sale, are included in other comprehensive income.
Earnings per share
Earnings per share disclosed in the accompanying statement of income is determined by dividing net
income by the weighted average number of shares in existence during the year concerned.
In Turkey, companies can raise their share capital by distributing “Bonus Shares” to shareholders from retained earnings. In computing earnings per share, such “bonus share” distributions are assessed as issued shares. Accordingly, the retrospective effect for those share distributions is taken into
consideration in determining the weighted-average number of shares outstanding used in this
computation.
58
CONVENIENCE TRANSLATION INTO ENGLISH OF FINANCIAL STATEMENTS
ORIGINALLY ISSUED IN TURKISH
BSH EV ALETLERİ SANAYİ VE TİCARET A.Ş.
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2014
(Amounts expressed in Turkish Lira (“TRY”) unless otherwise stated.)
2.
2.4
BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued)
Summary of Significant Accounting Policies (Continued)
Provisions, contingent liabilities, contingent assets
Provisions are recognised when the Company has a present obligation as a result of a past event, and it
is probable that the Company will be required to settle that obligation, and a reliable estimate can be
made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the
present obligation at the balance sheet date, taking into account the risks and uncertainties surrounding
the obligation.
Where a provision is measured using the cash flows estimated to settle the present obligation, its
carrying amount is the present value of those cash flows.
When some or all of the economic benefits required to settle a provision are expected to be recovered
from a third party, the receivable is recognised as an asset if it is virtually certain that reimbursement
will be received and the amount of the receivable can be measured reliably.
Provisions are measured at the present value of the expenditures expected to be required to settle the
obligation using a pre-tax rate that reflects current market assessments of the time value of money and
the risks specific to the obligation. The increase in the provision due to passage of time is recognised
as interest expense.
Guarantees
Warranty provisions for sales that have been recognised, assembly provisions for pending assembly
services for sales that have been recognised, workmanship and material expenses incurred by services
for free within the scope of product warranties are estimated using the incurred service expenses and
prior period trends on the returns for the products for which the sales have been recognised in the
current period (Note 11).
Taxation and deferred tax
Income tax expense comprises current tax and deferred tax expenses.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as
reported in the income statement because it excludes items of income or expense that are taxable or
deductible in other years and it further excludes items that are never taxable or deductible. The
Company’s liability for current tax is calculated using tax rates that have been enacted or substantively
enacted by the balance sheet date.
59
CONVENIENCE TRANSLATION INTO ENGLISH OF FINANCIAL STATEMENTS
ORIGINALLY ISSUED IN TURKISH
BSH EV ALETLERİ SANAYİ VE TİCARET A.Ş.
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2014
(Amounts expressed in Turkish Lira (“TRY”) unless otherwise stated.)
2.
2.4
BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued)
Summary of Significant Accounting Policies (Continued)
Deferred tax
Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the
financial statements and the corresponding tax bases which is used in the computation of taxable
profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are
generally recognised for all taxable temporary differences and deferred tax assets are recognised for all
deductible temporary differences to the extent that it is probable that taxable profits will be available
against which those deductible temporary differences can be utilized. Such assets and liabilities are not
recognised if the temporary difference arises from goodwill or from the initial recognition (other than
in a business combination) of other assets and liabilities in a transaction that affects neither the taxable
profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences associated with investments in
subsidiaries and associates, and interests in joint ventures, except where the Company is able to
control the reversal of the temporary difference and it is probable that the temporary difference will
not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences
associated with such investments and interests are only recognised to the extent that it is probable that
there will be sufficient taxable profits against which to utilise the benefits of the temporary differences
and they are expected to reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the
extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of
the asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period
in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been
enacted or substantively enacted by the balance sheet date. The measurement of deferred tax liabilities
and assets reflects the tax consequences that would follow from the manner in which the Company
expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current
tax assets against current tax liabilities and when they relate to income taxes levied by the same
taxation authority and the Company intends to settle its current tax assets and liabilities on a net basis.
Current and deferred tax for the period
Current and deferred tax are recognised as an expense or income in profit or loss.
Employee benefits / Retirement pay provision
Under Turkish law and union agreements, lump sum payments are made to employees retiring or
involuntarily leaving the Company. Such payments are considered as being part of defined retirement
benefit plan as per TAS 19 (revised) “Employee Benefits” (“TAS 19”).
The retirement benefit obligation recognised in the balance sheet represents the present value of the
defined benefit obligation as adjusted for unrecognised actuarial gains and losses.
60
CONVENIENCE TRANSLATION INTO ENGLISH OF FINANCIAL STATEMENTS
ORIGINALLY ISSUED IN TURKISH
BSH EV ALETLERİ SANAYİ VE TİCARET A.Ş.
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2014
(Amounts expressed in Turkish Lira (“TRY”) unless otherwise stated.)
2.
2.4
BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued)
Summary of Significant Accounting Policies (Continued)
Statement of cash flows
Cash flows during the period are classified and reported by operating, investing and financing
activities in the cash flow statements.
Cash flows from operating activities represent the cash flows of the Company generated from retailing
activities.
Cash flows related to investing activities represent the cash flows that are used in or provided from the
investing activities of the Company (fixed investments and financial investments).
Cash flows arising from financing activities represent the cash proceeds from the financing activities
of the Company and the repayments of these funds.
Cash and cash equivalents comprise cash on hand and 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 and which are subject to an insignificant risk of changes in value.
3.
CASH AND CASH EQUIVALENTS
Cash
Banks:
Demand deposits
Time deposits less than 3 months
31 December
2014
31 December
2013
7,292
13,836
2,785,710
14,673,881
4,245,064
105,999,272
17,466,883
110,258,172
The details of other time deposits mature within three months are as of 31 December 2014 are as
follows:
Weighted average
Original
effective interest rate
31 December
currency
%
Maturity
2014
EUR
USD
1.60
1.65
2 January 2015
2 - 19 January 2015
4,537,013
10,136,868
14,673,881
Original
currency
EUR
USD
Weighted average
effective interest rate
%
Maturity
1.05
1.75
2 - 3 January 2014
2 - 30 January 2014
31 December
2013
100,304,382
5,694,890
105,999,272
61
CONVENIENCE TRANSLATION INTO ENGLISH OF FINANCIAL STATEMENTS
ORIGINALLY ISSUED IN TURKISH
BSH EV ALETLERİ SANAYİ VE TİCARET A.Ş.
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2014
(Amounts expressed in Turkish Lira (“TRY”) unless otherwise stated.)
4.
FINANCIAL INVESTMENTS
Company name
Profilo Elektrogeraete VmbH (*)
Pro-­Eks Dış Ticaret A.Ş. (**)
Profilo Telra A.Ş.
Profilo Telra A.Ş. impairment (-­)
Ak Enerji A.Ş. (**)
Share
%
100.00
0.23
0.16
0.01
31 December
2014
68,251
274,753
1,124,003
(1,124,003)
2,681
345,685
Share
%
100.00
0.23
0.16
0.01
31 December
2013
68,251
274,753
1,124,003
(1,124,003)
2,681
345,685
(*) Profilo Elektrogeraete VmbH has not been consolidated because the company's total assets
are neglectibly small and the operational volume is low and it is shown as the cost value.
(**) This financial asset's value could not be calculated as it is not traded in an active market and
it is shown as it's cost value because it doesn't have a demand from the market.
5.
FINANCIAL LIABILITIES
Currency type
TRY
Weighted average
effective interest rate
Fixed % 7,05
31 December 2014
Short term
portion of long
term
Short term
18,154,951
18,154,951
15,476,077
15,476,077
Long term
2,409,000
2,409,000
31 December 2013
Currency type
TRY
Weighted average
effective interest rate
Fixed % 6,90
Short term
Short term
portion of long
term
Long term
11,946,097
11,946,097
15,476,077
15,476,077
17,885,077
17,885,077
62
CONVENIENCE TRANSLATION INTO ENGLISH OF FINANCIAL STATEMENTS
ORIGINALLY ISSUED IN TURKISH
BSH EV ALETLERİ SANAYİ VE TİCARET A.Ş.
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2014
(Amounts expressed in Turkish Lira (“TRY”) unless otherwise stated.)
5.
FINANCIAL LIABILITIES (Continued)
The repayment schedule of borrowings are as follows:
1 year or less
1 - 2 years
2 - 3 years
31 December
2014
31 December
2013
33,631,028
2,409,000
36,040,028
27,422,174
15,476,077
2,409,000
45,307,251
The Company’s major financial borrowings are as follows:
The Company has taken a loan amounting to TRY 59.945.500 in 2007 and TRY 31.317.000 in 2008
from the European Investment Bank to finance its investment projects. The maturities of these loans
are between 2009 and 2015. All loans are guaranteed by BSH Bosch und Siemens Hausgeräte GmbH (Germany).
The fair value of bank borrowings at 31 December 2014 is TRY 35.845.330
(31 December 2013: TRY 44.878.371)
No guarantee or bond has been given from the Company to the banks for bank borrowings
(31 December 2013: TRY 675.000).
6.
TRADE RECEIVABLES AND PAYABLES
Details of trade receivables excluding due from related parties are as follows:
Short term trade receivables
Trade Receivables
Rediscount on customer current accounts (-)
Notes Receivables
Rediscount on notes receivables (-)
Allowance for doubtful receivable (-)
63
31 December
2014
31 December
2013
397,954,064
(8,284,770)
591,069,075
(19,966,301)
(36,732,738)
924,039,330
284,812,684
(5,843,139)
537,264,798
(17,910,708)
(31,453,336)
766,870,299
CONVENIENCE TRANSLATION INTO ENGLISH OF FINANCIAL STATEMENTS
ORIGINALLY ISSUED IN TURKISH
BSH EV ALETLERİ SANAYİ VE TİCARET A.Ş.
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2014
(Amounts expressed in Turkish Lira (“TRY”) unless otherwise stated.)
6.
TRADE RECEIVABLES AND PAYABLES (Continued)
Average collection days of notes receivable is 87 days (31 December 2013: 89). As of 31
December 2014 and 2013, the maturities of discounted notes receivables are as follows:
1 month
2 months
3 months
4 months
5 months
6 months and more
31 December
2014
31 December
2013
149,535,823
107,781,005
91,763,393
71,775,297
57,447,167
92,800,089
571,102,774
133,509,955
97,717,450
86,329,683
64,855,668
50,218,848
86,722,486
519,354,090
The allowance for doubtful receivables has been estimated based on past collection history of these
receivables
The movement of the allowance for doubtful receivables of the Company is as follows:
The movement of the allowance for doubtful receivables
2014
2013
Balance at the beginning of the period
Charge for the year (Note 18)
Collections
Write-offs
31,453,336
11,080,480
(5,168,084)
(632,994)
31,427,044
2,225,835
(721,143)
(1,478,400)
Balance at the end of the period
36,732,738
31,453,336
31 December
2014
31 December
2013
408,563,463
(3,354,913)
5,418
405,213,968
355,634,658
(4,364,181)
18,284
351,288,761
Details of trade payables are as follows:
Short term trade payables
Vendor current accounts
Rediscount on vendor current accounts (-)
Other payables
64
CONVENIENCE TRANSLATION INTO ENGLISH OF FINANCIAL STATEMENTS
ORIGINALLY ISSUED IN TURKISH
BSH EV ALETLERİ SANAYİ VE TİCARET A.Ş.
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2014
(Amounts expressed in Turkish Lira (“TRY”) unless otherwise stated.)
7.
OTHER RECEIVABLES AND PAYABLES
a) Other receivables from third parties
Other short-term receivables
Receivable from personnel
Deposits and guarantees given
Other
31 December
2014
31 December
2013
588,090
435,341
297,646
1,321,077
807,424
447,539
92,847
1,347,810
31 December
2014
31 December
2013
1,762,379
685,682
2,448,061
2,242,284
164,888
1,165,413
3,572,585
b) Other payables due to other parties
Other short-term payables
Deposits and guarantees received
Accrued rumeneration foundation and labour organization
Other payables
Risk management objectives and policies associated with other payables are explained in Note 25.
65
CONVENIENCE TRANSLATION INTO ENGLISH OF FINANCIAL STATEMENTS
ORIGINALLY ISSUED IN TURKISH
BSH EV ALETLERİ SANAYİ VE TİCARET A.Ş.
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2014
(Amounts expressed in Turkish Lira (“TRY”) unless otherwise stated.)
8.
INVENTORIES
Raw materials
Work in process
Finished goods
Trade goods
Goods in transit
Raw materials in transit
Allowance for impairment on inventory (-)
31 December
2014
31 December
2013
178,221,698
4,535,025
62,169,702
101,998,166
19,278,768
32,788,527
(29,862,966)
369,128,920
145,818,407
4,084,022
66,273,749
118,962,687
22,548,433
32,139,188
(29,559,533)
360,266,953
31 December
2014
31 December
2013
15,843,274
3,616,104
10,403,588
29,862,966
14,569,351
3,576,530
11,413,652
29,559,533
1 January31 December
2014
1 January31 December
2013
29,559,533
303,433
29,862,966
19,355,890
10,203,643
29,559,533
Allowance for inventories is as follows:
Raw materials
Finished goods
Trade goods
Movement of allowance for on inventories is as follows:
Opening balance
Charge for the year (*)
Closing balance
(*) The Company has recorded the impairment of stocks
10.203.643) as cost of goods sold.
amounting to TRY 303.433 (2013:
The cost of inventories recognised as expense and included in cost of sales amounted to TRY
3.193.333.324 for the period 01 January - 31 December 2014 (1 January - 31 December 2013: TRY
2.704.215.202).
66
CONVENIENCE TRANSLATION INTO ENGLISH OF FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH
BSH EV ALETLERİ SANAYİ VE TİCARET A.Ş.
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2014
(Amounts expressed in Turkish Lira (“TRY”) unless otherwise stated.)
9.
PROPERTY, PLANT AND EQUIPMENT
Lands
Cost value
1 January 2014
Opening balance
Additions
Infrastructure
and land
improvement
Buildings
Leasehold
improvements
Property, plant
and equipment
Vehicles
Furnitures and
fittings
Construction in
progress
Total
19,227,760
20,474,097
209,076,593
27,295,901
679,721,889
8,228,585
144,233,233
4,035,175
1,112,293,233
-
795,233
(6,500)
3,572,185
(2,354,495)
11,356,710
(1,114,948)
111,600,197
(10,096,885)
2,324,661
(242,416)
23,974,406
(9,732,905)
10,600,649
-
164,224,041
(23,548,149)
-
-
-
-
418,217
-
156,250
(574,467)
-
19,227,760
21,262,830
210,294,283
37,537,663
781,643,418
10,310,830
158,630,984
14,061,357
1,252,969,125
Accumulated depreciation
1 January 2014
Opening balance
Expenses
Disposals
-
(6,579,768)
(881,516)
3,340
(54,267,551)
(5,831,146)
198,354
(13,499,891)
(3,170,426)
795,833
(423,574,550)
(67,383,656)
9,687,787
(2,748,856)
(1,394,816)
112,877
(77,754,006)
(16,718,933)
8,059,864
-
(578,424,622)
(95,380,493)
18,858,055
31 December 2014
Closing balance
-
(7,457,944)
(59,900,343)
(15,874,484)
(481,270,419)
(4,030,795)
(86,413,075)
-
(654,947,060)
19,227,760
13,804,886
150,393,940
21,663,179
300,372,999
6,280,035
72,217,909
14,061,357
598,022,065
Disposals
Transfers from
construction in progress
31 December 2014
Closing balance
Net book value as of
31 December 2014
Purchases of tangible assets are generally based on the investments for new product categories and the improvement of production capacities.
67
CONVENIENCE TRANSLATION INTO ENGLISH OF FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH
BSH EV ALETLERİ SANAYİ VE TİCARET A.Ş.
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2014
(Amounts expressed in Turkish Lira (“TRY”) unless otherwise stated.)
9.
PROPERTY, PLANT AND EQUIPMENT (Continued)
Cost value
1 January 2013
Opening balance
Additions
Disposals
Transfers from
construction in progress
31 December 2013
Closing balance
Lands
Infrastructure
and land
improvement
19,133,010
200,000
(105,250)
Buildings
Leasehold
improvements
Property, plant
and equipment
Vehicles
Furnitures and
fittings
Construction in
progress
Total
17,543,208
2,930,889
-
206,226,353
6,647,986
(3,797,746)
24,548,945
4,349,199
(1,602,243)
627,938,193
60,134,562
(12,821,461)
5,863,993
2,459,155
(94,563)
132,405,981
19,661,379
(7,856,032)
8,005,687
521,988
-
1,041,665,370
96,905,158
(26,277,295)
-
-
-
-
4,470,595
-
21,905
(4,492,500)
-
19,227,760
20,474,097
209,076,593
27,295,901
679,721,889
8,228,585
144,233,233
4,035,175
1,112,293,233
-
(5,810,486)
(769,282)
-
(49,357,560)
(5,849,359)
939,368
(12,010,225)
(2,433,077)
943,411
(372,366,604)
(63,447,454)
12,239,508
(1,939,452)
(838,800)
29,396
(68,927,863)
(14,887,500)
6,061,357
-
(510,412,190)
(88,225,472)
20,213,040
-
(6,579,768)
(54,267,551)
(13,499,891)
(423,574,550)
(2,748,856)
(77,754,006)
-
(578,424,622)
19,227,760
13,894,329
154,809,042
13,796,010
256,147,339
5,479,729
66,479,227
4,035,175
533,868,611
Accumulated depreciation
1 January 2013
Opening balance
Expenses
Disposals
31 December 2013
Closing balance
Net book value as of
31 December 2013
68
CONVENIENCE TRANSLATION INTO ENGLISH OF FINANCIAL STATEMENTS
ORIGINALLY ISSUED IN TURKISH
BSH EV ALETLERİ SANAYİ VE TİCARET A.Ş.
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2014
(Amounts expressed in Turkish Lira (“TRY”) unless otherwise stated.)
9.
PROPERTY, PLANT AND EQUIPMENT (Continued)
The following useful lives are used in the calculation of amortization:
Infrastructure and land improvements
Buildings
Property, plant and equipment
Vehicles
Furnitures and fittings
Leasehold improvements
Useful Life
10-18 years
25-33 years
4-10 years
6 years
3-8 years
8 years
Depreciation expense of TRY 65.832.875 (1 January - 31 December 2013:TRY 58.923.782) has
been charged in cost of goods sold, TRY 7.292.770 (1 January - 31 December 2013:
TRY 7.525.697) in selling and marketing costs, TRY 17.927.480 (1 January - 31 December 2013:
TRY 17.566.781) in general administrative expenses, TRY 2.486.700 (1 January - 31 December
2013: TRY 2.312.350) in research and development expenses and TRY 1.840.668 (1 January - 31
December 2013: TRY 1.896.862) in finished goods inventory.
10.
INTANGIBLE ASSETS
Rights
Other
intangibles
assets
Total
Cost value
1 January 2014 opening balance
Additions
Disposals
31 December 2014 closing balance
412,945
(20,219)
392,726
3,138,666
446,265
(29,722)
3,555,209
3,551,611
446,265
(49,941)
3,947,935
Accumulated amortisation
1 January 2014 opening balance
Expenses
Disposals
31 December 2014 closing balance
(97,941)
(70,402)
20,219
(148,124)
(2,800,982)
(468,429)
29,722
(3,239,689)
(2,898,923)
(538,831)
49,941
(3,387,813)
244,602
315,520
560,122
Net book value as of 31 December 2014
69
CONVENIENCE TRANSLATION INTO ENGLISH OF FINANCIAL STATEMENTS
ORIGINALLY ISSUED IN TURKISH
BSH EV ALETLERİ SANAYİ VE TİCARET A.Ş.
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2014
(Amounts expressed in Turkish Lira (“TRY”) unless otherwise stated.)
10.
INTANGIBLE ASSETS (Continued)
Rights
Other
intangibles
assets
Total
Cost value
1 January 2013 opening balance
Additions
Disposals
31 December 2013 closing balance
113,033
300,000
(88)
412,945
2,713,430
425,236
3,138,666
2,826,463
725,236
(88)
3,551,611
Accumulated amortisation
1 January 2013 opening balance
Expenses
Disposals
31 December 2013 closing balance
(70,961)
(27,068)
88
(97,941)
(2,244,720)
(556,262)
(2,800,982)
(2,315,681)
(583,330)
88
(2,898,923)
Net book value as of 31 December 2013
315,004
337,684
652,688
Other intangible assets consist of software costs and other intangible assets costs.
The following useful lives are used in the calculation of amortisation of intangible assets :
Useful life
1-5 years
Rights and other intangible assets
Amortisation expense of TRY 371.908 (2013: TRY 389.594) has been charged in cost of goods
sold, TRY 41.199 (2013: TRY 49.759) in selling and marketing costs, TRY 101.277 (2013: TRY
116.148) in general administrative expenses, TRY 14.048 (2013: TRY 15.289) in research and
development expenses and TRY 10.399 (2013: TRY 12.540) in finished goods inventory.
70
CONVENIENCE TRANSLATION INTO ENGLISH OF FINANCIAL STATEMENTS
ORIGINALLY ISSUED IN TURKISH
BSH EV ALETLERİ SANAYİ VE TİCARET A.Ş.
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2014
(Amounts expressed in Turkish Lira (“TRY”) unless otherwise stated.)
11.
PROVISIONS, COMMITMENTS, CONTINGENT ASSETS AND LIABILITIES
a) Short term provisions
Provision for warranty expenses (i)
Provision for montage expenses (ii)
Provision for production and administration costs
Provision for marketing expenses
Other
31 December
2014
31 December
2013
32,850,859
18,668,000
7,574,982
4,631,125
678,627
64,403,593
36,976,224
17,552,449
4,739,617
5,121,002
3,884,188
68,273,480
Movements of the short term provisions as of 31 December 2014 are as follows:
Provision for Provision for
warranty
montage
expenses
expenses
Other
provisions
Total
2014
Balances at 1 January 2014
36,976,224
17,552,449
12,751,964
67,280,637
Additions
28,995,314
18,668,000
7,371,312
55,034,626
(33,120,679)
(17,552,449)
(7,238,542)
(57,911,670)
32,850,859
18,668,000
12,884,734
64,403,593
Payments / realisations
Balances at 31 December 2014
b) Long term provisions
Provision for warranty expenses (i)
Rediscount on provision for guarantee expenses (-)
Other
31 December
2014
31 December
2013
20,396,050
(634,610)
327,050
20,088,490
12,650,747
(626,949)
804,002
12,827,800
Movements of the long term provisions as of 31 December 2014 are as follows:
2014
2013
Balances at 1 January 2014
12,827,800
21,387,076
Additions
27,560,461
(20,299,771)
9,955,648
(19,318,926)
20,088,490
12,023,798
Payments / realisations
Balances at 31 December 2014
71
CONVENIENCE TRANSLATION INTO ENGLISH OF FINANCIAL STATEMENTS
ORIGINALLY ISSUED IN TURKISH
BSH EV ALETLERİ SANAYİ VE TİCARET A.Ş.
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2014
(Amounts expressed in Turkish Lira (“TRY”) unless otherwise stated.)
11.
PROVISIONS, COMMITMENTS, CONTINGENT ASSETS AND LIABILITIES (Continued)
(i)
The provision for after sales guarantee represents the present value of the managements’ best estimate of the future outflow of economic benefits that will be required under the
Company’s warranty programme for white durable goods. The estimate has been made on the
basis of historical warranty trends and may vary as a result of new goods, altered
manufacturing processes or other events affecting product
(ii)
As of 31 December 2014 the company provided a provision for the goods which were sold to
distributors which the assembling has not yet been completed as of 31 December 2014.
c) Guarantees, mortgages and pledges (“GPM”) given by the company are as follows:
A. Total amount of GPM provided by the Company on behalf of itself
B. Total amount of GPM given for the subsidiaries
and associates in the scope of consolidation
C. Total amount of GPM given for the purpose of
maintaining operating activities
D. Total other GPM's given
i. Given in the parent company's own name
ii. Given in the related parties' own name which
not included B and C
iii. Given in the third parties' own name which
not included C
31 December
2014
31 December
2013
12,308,064
10,861,761
-
-
-
-
-
-
-
-
-
-
12,308,064
10,861,761
d) There are no other GPMs given in the company's own name (2013: None).
e) The Company committed to make US dollars 369.796.309 worth of exports, as of
31 December 2014, in compliance with the Inward Processing Certificates (31 December 2013: USD
357.066.132).
f) The lawsuit filed by Telra Elektronik Sanayi ve Ticaret A.Ş. (“Telra”) against the Company, its executive directors and BSH Bosch und Siemens Hausgeräte GmbH and the countersuit filed by the Company was reached to conclusion by the Kadıköy 2nd Commercial Court of First Instance (the “Court”) on 30 May 2012. According to the judgement of the Court, the claims against two executive
directors of the Company and BSH Bosch und Siemens Hausgereate GmbH were rejected, the initial
claim for the pecuniary litigation of US dollars 20 million plus its interest was partially accepted, the
non-pecuniary claim was rejected and the counter claim of BHS Turkey amounting to US dollars 10
million with the interest accrued from the beginning of the case was accepted.
72
CONVENIENCE TRANSLATION INTO ENGLISH OF FINANCIAL STATEMENTS
ORIGINALLY ISSUED IN TURKISH
BSH EV ALETLERİ SANAYİ VE TİCARET A.Ş.
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2014
(Amounts expressed in Turkish Lira (“TRY”) unless otherwise stated.)
11.
PROVISIONS, COMMITMENTS, CONTINGENT ASSETS AND LIABILITIES (Continued)
The decision of the Court was appealed to the Supreme Court for annulment both by the Company and
Telra. According to the appeal of the Company, 19. Assembly of Civil Chambers of Supreme Court
reversed the judgment of the local court on the grounds that advertising and marketing expenses were
evaluated without insufficient investigation and court file has been issued to 9. Commercial Court of
First Instance with the number of 2013/668. The court is on expert examination instance.
The report has issued with the 3 signatures out of 5 members of the executive committee. The other
two members issued a disclaimer opinion on the grounds that they object to writing a report before
holding a meeting and reaching a consensus. The report signed by three out of five members stated
that Telra’s total loss was USD120,541,819.06 so Telra should receive a payment of USD20 million as stated in Telra's claim and the Company should receive a payment of USD12,188,073.62, USD10
million of which should be paid as is stated in its claim. The legal experts who issued the disclaimer
opinion explained the legal flaws stating that the report signed by three members includes some
significant inaccuracies and flaws and thus cannot be taken as a basis for the judgment and is not
suitable for review by the Court of Appeals. Objection to this report signed by three out of five
members of the expert committee have been done within the legal term, according to objection the
court has decided to have an additional expert report.
During the expert examination, İstanbul 10th Commercial Court of First Instance decided to the bankrupt of claimant Telra; due to the bankrupt decision, the judgment was suspended until 10 days
after the second creditors meeting. Lawsuit has been delayed to 13 May 2015 in the court on
11 February 2015.
The management and legal counsel of the Company is in the belief that that the final decision will be
in favour of the Company. Consequently, the Company has not booked any provision in financial
statements.
g) In the tax investigation report prepared as a result of the tax investigations for the years ending
2006, 2007 and 2008, it was claimed that interest paid over loans granted from foreign institutions is
subject to 10% withholding tax, and the entity should declare VAT, accordingly the Company
received a notice from the tax office for a total tax claim of TRY 29.882.211 with penalty and interest
including TRY5.562.054 is deductible from VAT. The Company filed litigation against the Tax Office
for the cancellation of such assessments however the tax court rejected the file.
Later in the juridical process, the Supreme Court decided on a stay of execution with regard to the
main VAT lawsuit. The lawsuits regarding VAT penalty were resolved in favour of the Company and
the tax authority has the right to object. In the withholding tax lawsuits, the Supreme Court quashed
the decision of the local court against the Company.
Management of the Company ,the Company’s legal advisor and external legal counsels have a
common understanding that, the case will be dismissed in the appeal process and will be resolved in
favour of the Company in the light of developments in the lawsuits and due to the retrospective
application of law and legislation provisions that entered into force at a later date. Therefore, the tax
assessment amounting to TRY24.320.157 that was paid to the Tax Office has been accounted under
other current assets (Note 15).
73
CONVENIENCE TRANSLATION INTO ENGLISH OF FINANCIAL STATEMENTS
ORIGINALLY ISSUED IN TURKISH
BSH EV ALETLERİ SANAYİ VE TİCARET A.Ş.
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2014
(Amounts expressed in Turkish Lira (“TRY”) unless otherwise stated.)
11.
PROVISIONS, COMMITMENTS, CONTINGENT ASSETS AND LIABILITIES (Continued)
h) The Company started to transfer 3.5% license fee to the main shareholder, BSH Bosch und Siemens
Hausgerate GmbH, which is calculated over sales of products manufactured from the beginning of
2008 while negotiations for the agreement were ongoing, as per stated in each three drafts of
“Advance Pricing Agreement” communicated by Turkish Ministry of Finance for completion of signing.
As a result of transfer pricing investigations of tax inspectors of Ministry of Finance for the years
2008, 2009, 2010 and 2011, although the royalty rate is specified as 3.5% in each three drafts of
agreement, the rate is accepted as 2% and for the difference over license amount corporate tax,
withholding tax and value added tax and penalties amounting to TRY106 million was incurred in
2013, as of inspection date.
The Company applied for compromise to Ministry of Finance. Compromise meeting held on
26 February 2015 and compromised on with Ministry of Finance.
Long term provisions for employment termination benefits
Under the Turkish Labor Law, the Group is required to pay employee benefits to each employee who
has qualified for such benefits as the employment ended. Also, employees entitled to a retirement are
required to be paid retirement pay in accordance with Law No: 2242 dated 6 March 1981 and No:
4447 dated 25 August 1999 and the amended Article 60 of the existing Social Insurance Code No:
506. Some transitional provisions related with retirement prerequisites have been removed due to the
amendments in the relevant law on May 23, 2002.
The amount payable consists of one month’s salary limited to a maximum of 3.438,22 TRY for each period of service as of 31 December 2014 (31 December 2013: 3.254,44 TRY). The retirement pay
provision ceiling is revised semi-annually, and 3.541,37 TRY which is effective from 1 January 2015,
is taken into consideration in the calculation of provision for employee benefits (invalided between
31 December 2013 and 1 January 2014: 3.438,22 TRY).
Liability of employee benefits is not subject to any funding as there isn’t an obligation. Provision is calculated by estimating the present value of the future probable obligation of the Group arising from
the retirement of the employees. IAS 19 “Employee Benefits” requires actuarial valuation methods to
be developed to estimate the Group’s obligation under the defined benefit plans. The following actuarial assumptions are used in the calculation of the total liability. Actuarial loss/(gain) is accounted
in the statement of comprehensive income under revaluation reserves.
The principal assumption is that the maximum liability for each year of service will increase in line
with inflation. Thus, the discount rate applied represents the expected real rate after adjusting for the
anticipated effects of future inflation. Consequently, in the accompanying consolidated financial
statements as of 31 December 2014 and 2013 the provision is calculated by estimating the present
value of the future probable obligation of the Company arising from the retirement of the employees.
Provisions at the balance sheet date were calculated as 3,90% (31 December 2013: %5,33) and
average period is calculated as 14,81 years by assuming an annual inflation rate of 5% (31 December
2013: 5%) and a discount rate of 9,10% (31 December 2013: 10,60%). The anticipated rate of
forfeitures that occurred on voluntary turnovers is considered.
74
CONVENIENCE TRANSLATION INTO ENGLISH OF FINANCIAL STATEMENTS
ORIGINALLY ISSUED IN TURKISH
BSH EV ALETLERİ SANAYİ VE TİCARET A.Ş.
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2014
(Amounts expressed in Turkish Lira (“TRY”) unless otherwise stated.)
12.
EMPLOYEE BENEFITS
Long term provisions for employment termination benefits
2014
2013
Provision at 1 January
Service cost
Actuarial loss / (gain)
Interest cost (Note 21)
Retirement payments
47,259,185
9,103,448
17,570,964
4,974,767
(8,252,409)
48,860,445
8,360,459
(8,031,057)
4,257,117
(6,187,779)
Provision at 31 December
70,655,955
47,259,185
Long term provisions for employment termination benefits (Continued)
TRY 6.126.866 of the total current provision expense (1 January-31 December 2013: TRY 5.908.904)
has been recorded under cost of goods sold, TRY 2.295.168 (1 January-31 December 2013: TRY
1.816.055) under selling and marketing expenses, and TRY 681.414 (1 January-31 December 2012:
TRY 635.500) under general administrative expenses .
Short term provisions for employment termination benefits
Bonus provision
Payable to personnel
Social security payable
Provision for unused vacation
Other
75
31 December
2014
31 December
2013
19,477,722
8,504,526
7,818,281
7,385,887
30,781
14,629,298
5,120,607
5,634,834
7,535,442
31,066
43,217,197
32,951,247
CONVENIENCE TRANSLATION INTO ENGLISH OF FINANCIAL STATEMENTS
ORIGINALLY ISSUED IN TURKISH
BSH EV ALETLERİ SANAYİ VE TİCARET A.Ş.
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2014
(Amounts expressed in Turkish Lira (“TRY”) unless otherwise stated.)
13.
PREPAID EXPENSES
Short term prepaid expenses
Prepaid expenses
Order advances given
Long term prepaid expenses
Investment advances given (*)
Prepaid expenses
31 December
2014
31 December
2013
3,535,135
3,241,000
6,776,135
477,225
2,339,122
2,816,347
31 December
2014
31 December
2013
54,980,175
408,998
55,389,173
23,192,462
540,529
23,732,991
(*) Investment advances have been given by the Company to domestic and foreign suppliers, due
to purchases of new machinaries, equipments and construct buildings for factories, located in
Çerkezköy.
14.
DEFERRED INCOME
Short term deferred income
Prepaid expenses (*)
Long term deferred income
Prepaid expenses (*)
31 December
2014
31 December
2013
8,082,796
6,672,859
31 December
2014
31 December
2013
43,453,705
32,842,892
(*) The Company records revenue from the sales of warranty certificates over the materialisation
of the period covered by the warranties. The income is related to additional warranty sales of
upcoming months and years.
76
CONVENIENCE TRANSLATION INTO ENGLISH OF FINANCIAL STATEMENTS
ORIGINALLY ISSUED IN TURKISH
BSH EV ALETLERİ SANAYİ VE TİCARET A.Ş.
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2014
(Amounts expressed in Turkish Lira (“TRY”) unless otherwise stated.)
15.
OTHER ASSETS AND LIABILITIES
Other current assets
VAT receivables
Taxes and tax penalties paid (Note 11)
Tax receivables
Advances given
Other current assets
Other non current assets
Advances given
Deposits and guarantees given
Other current liabilities
Order advances received
Taxes and funds payable
Other
77
31 December
2014
31 December
2013
126,822,800
24,320,157
23,992,335
967,230
3,417,539
179,520,061
103,813,661
24,320,157
19,575,587
875,546
1,695,472
150,280,423
31 December
2014
31 December
2013
160,001
109,163
269,164
80,339
80,339
31 December
2014
31 December
2013
19,265,264
16,464,517
1,578,512
37,308,293
11,617,200
14,609,282
1,115,503
27,341,985
CONVENIENCE TRANSLATION INTO ENGLISH OF FINANCIAL STATEMENTS
ORIGINALLY ISSUED IN TURKISH
BSH EV ALETLERİ SANAYİ VE TİCARET A.Ş.
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2014
(Amounts expressed in Turkish Lira (“TRY”) unless otherwise stated.)
16.
EQUITY
As of 31 December 2014 and 31 December 2013 the share capital held is as follows:
%
31 December
2014
%
31 December
2013
99.95
0.05
41,978,180
21,820
99.28
0.72
41,699,165
300,835
100.00
42,000,000
100.00
42,000,000
Shareholders
BSH Bosch und Siemens
Hausgeraete GmbH
("BSH-Germany" or "BSH-D")
Public quoted shares
Nominal capital
Inflation adjustment
150,427,940
150,427,940
Revised share capital
192,427,940
192,427,940
The total number of common stock shares of the Company as of 31 December 2014 is 4.2 billion
shares (2013: 4.2 billion shares) with a par value of TRY 0.01 per share (2013: TRY 0.01 per share).
a) Restricted profit reserves
Legal reserves
31 December
2014
31 December
2013
47,414,342
43,026,458
The legal reserves consist of first and second legal reserves, appropriated in accordance with the
Turkish Commercial Code. The first legal reserve is appropriated out of historical statutory profits at
the rate of 5% per annum, until the total reserve reaches 20% of the historical paid-in share capital.
The second legal reserve is appropriated after the first legal reserve and dividends, at the rate of 10%
per annum of all cash dividend distributions.
b) Retained Earnings / Accumulated Deficit
The Company has classified TRY 1.158.265.189 as extraordinary reserves in accumulated profits as of
31 December 2014 (31 December 2013: TRY 981.056.182).
c) 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.
78
CONVENIENCE TRANSLATION INTO ENGLISH OF FINANCIAL STATEMENTS
ORIGINALLY ISSUED IN TURKISH
BSH EV ALETLERİ SANAYİ VE TİCARET A.Ş.
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2014
(Amounts expressed in Turkish Lira (“TRY”) unless otherwise stated.)
16.
EQUITY (Continued)
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 installments 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.
Liabilities subject to dividend distribution:
As of the balance sheet date, the Company’s statutory net profit for the period is TRY 211.580.058
(31 December 2013: TRY 234.247.825) and the total of other resources that can be made subject to
profit distribution is TRY 1.158.265.189 (31 December 2013: TRY 981.056.182).
79
CONVENIENCE TRANSLATION INTO ENGLISH OF FINANCIAL STATEMENTS
ORIGINALLY ISSUED IN TURKISH
BSH EV ALETLERİ SANAYİ VE TİCARET A.Ş.
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2014
(Amounts expressed in Turkish Lira (“TRY”) unless otherwise stated.)
17.
REVENUE AND COST OF SALES
Sales
Domestic sales
Foreign sales
Sales returns (-)
Sales discounts (-)
1 January31 December
2014
1 January31 December
2013
2,108,146,789
2,067,297,379
(17,635,191)
(168,536,215)
3,989,272,762
1,992,922,942
1,651,787,978
(13,680,667)
(196,640,887)
3,434,389,366
Service sales
Domestic sales
Foreign sales
14,897,184
206,286
15,103,470
11,333,087
161,045
11,494,132
114,296,430
84,819,449
4,118,672,662
3,530,702,947
2,069,594,989
143,718,251
66,204,783
138,997,944
(451,003)
4,104,046
43,220,825
2,465,389,835
1,617,574,721
122,076,408
59,313,374
122,450,352
(479,283)
2,897,857
37,120,990
1,960,954,419
680,915,888
5,515,191
90,248,426
704,966,310
4,232,557
75,415,463
3,242,069,340
2,745,568,749
Other sales
Raw material and spare part sales
Total revenue
Cost of sales
Raw materials
Employee costs
Depreciation and amortisation
Production overheads
Change in work-in-process inventories
Change in finished goods
Montage expenses
Cost of merchandise sold
Cost of services given
Other cost of sales
Total cost of sales
80
CONVENIENCE TRANSLATION INTO ENGLISH OF FINANCIAL STATEMENTS
ORIGINALLY ISSUED IN TURKISH
BSH EV ALETLERİ SANAYİ VE TİCARET A.Ş.
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2014
(Amounts expressed in Turkish Lira (“TRY”) unless otherwise stated.)
18.
EXPENSES BY NATURE
Marketing expenses
General administrative expenses
Research and development expenses
1 January31 December
2014
1 January31 December
2013
461,129,419
219,193,284
40,827,800
721,150,503
418,235,307
196,859,641
27,472,077
642,567,025
136,596,560
94,889,331
87,919,087
59,333,803
7,333,969
75,056,669
461,129,419
141,527,031
76,684,000
75,044,827
58,748,205
7,575,456
58,655,788
418,235,307
97,702,158
68,335,482
18,028,757
11,080,480
24,046,407
219,193,284
99,678,956
50,369,883
17,682,929
2,225,835
26,902,038
196,859,641
21,730,078
5,769,190
2,500,748
1,528,333
9,299,451
40,827,800
14,645,934
3,794,363
2,327,639
716,935
5,987,206
27,472,077
Marketing expenses
Transportation and export costs
Advertising expenses
Staff costs
Aftersale service costs
Depreciation and amortisation
Other
General administrative expenses
Consultancy and license expenses
Staff costs
Depreciation and amortisation
Bad debt expense (Note: 6)
Other
Research and development expenses
Staff costs
Sample and testing expenses
Depreciation and amortisation
Material usage
Other
81
CONVENIENCE TRANSLATION INTO ENGLISH OF FINANCIAL STATEMENTS
ORIGINALLY ISSUED IN TURKISH
BSH EV ALETLERİ SANAYİ VE TİCARET A.Ş.
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2014
(Amounts expressed in Turkish Lira (“TRY”) unless otherwise stated.)
19.
OTHER OPERATING INCOME AND EXPENSES
Other operating income
Foreign exchange gains from operating activities
Foreign consultancy services income(*)
Transportation income
BSH-D research and development cost sharing income
Tax refunds received
Refunds of BSH-D expenses
Warranty sales income
Losses and compensations
Rent income
Other income
1 January31 December
2014
1 January31 December
2013
47,596,496
25,462,721
24,381,459
28,598,325
9,655,344
7,168,180
6,758,105
5,299,608
5,282,096
32,376,647
192,578,981
96,513,246
20,998,012
17,077,126
16,076,811
5,221,552
5,501,466
2,508,985
1,498,521
23,646,921
189,042,640
(*) The Company charges information technology expenses of BSH Group companies to BSH
Germany.
1 January31 December
2014
1 January31 December
2013
37,909,509
2,105,076
40,014,585
39,703,260
3,026,328
42,729,588
INCOME AND EXPENSES FROM INVESTMENT ACTIVITIES
1 January31 December
2014
Income from investing operations
1 January31 December
2013
Other operating expenses
Foreign exchange losses from operating activities
Other expenses
20.
Income from disposal of fixed assets
Loss from investing operations
Loss from disposal of fixed assets
82
-
2,800,830
2,800,830
1 January31 December
2014
1 January31 December
2013
1,343,325
1,343,325
-
CONVENIENCE TRANSLATION INTO ENGLISH OF FINANCIAL STATEMENTS
ORIGINALLY ISSUED IN TURKISH
BSH EV ALETLERİ SANAYİ VE TİCARET A.Ş.
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2014
(Amounts expressed in Turkish Lira (“TRY”) unless otherwise stated.)
21.
FINANCIAL INCOME AND EXPENSE
Financial Income
Rediscount income
Fair value gains on forwards contracts
Due date charges on term sales
Interest income
Financial Expenses
Fair value losses on forward contracts
Rediscount expenses
Interest expense
Due date difference on term purchases
Financial Expenses related provisions
Other expenses
22.
1 January31 December
2014
1 January31 December
2013
27,281,183
5,830,550
3,259,580
3,887,287
40,258,600
29,292,957
7,152,382
3,828,591
1,378,008
41,651,938
1 January31 December
2014
1 January31 December
2013
59,424,255
34,594,258
10,763,740
5,579,976
4,974,767
1,399,630
116,736,626
6,276,279
27,130,646
13,931,673
3,470,209
4,257,117
1,347,749
56,413,673
TAX ASSETS AND LIABILITIES
Current tax assets
Prepaid taxes
Current tax liability
Current corporate tax provision (*)
Current corporate tax provision (**)
Current corporate tax provision (***)
83
31 December
2014
31 December
2013
47,110,850
47,110,850
61,579,213
61,579,213
31 December
2014
31 December
2013
30,257,339
4,490,978
1,368,409
36,116,726
41,101,729
7,383,693
48,485,422
CONVENIENCE TRANSLATION INTO ENGLISH OF FINANCIAL STATEMENTS
ORIGINALLY ISSUED IN TURKISH
BSH EV ALETLERİ SANAYİ VE TİCARET A.Ş.
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2014
(Amounts expressed in Turkish Lira (“TRY”) unless otherwise stated.)
22.
TAX ASSETS AND LIABILITIES (Continued)
Current tax liability:
Current corporate tax provision (*)
Current corporate tax provision (**)
Current corporate tax provision (***)
Deferred tax asset
1 January31 December
2014
1 January31 December
2013
30,257,339
4,490,978
1,368,409
(1,915,603)
41,101,729
7,383,693
(1,430,601)
34,201,123
47,054,821
(*)
Represents tax expenses calculated from taxable income subject to 20% tax rate
(**)
Represents tax expenses calculated from taxable income subject to 10% tax rate.
(***)
Represents tax expenses calculated from taxable income subject to 8% tax rate
Corporate Tax
The Company is subject to Turkish corporate tax legislation. Provision is made in the accompanying
financial statements for the estimated charge based on the Company’s results for the year.
Corporate tax is applied on taxable corporate income, which is calculated from the statutory
accounting profit by adding back non-deductible expenses, and by deducting dividends received from
resident companies, other exempt income and investment incentives utilised.
The effective rate of tax in 2014 is 20% (2013: 20%).
In Turkey, advance tax returns are filed on a quarterly basis. The advance corporate income tax rate in
2014 is 20% (2013: 20%). Losses are allowed to be carried five years maximum to be deducted from
the taxable profit of the following years. Tax carry back is not allowed.
In Turkey, there is no procedure for a final and definitive agreement on tax assessments. Companies
file their tax returns between 01 and 25 April following the close of the accounting year to which they
relate. Tax authorities may, however, examine such returns and the underlying accounting records and
may revise assessments within five years.
Corporate tax rates were taken into account as 20%, as well as 10% and 8%, the rate specified by the
new law. In accordance with Article 32/A4, added to the New Corporate Tax Law via Article 9 of Law
No. 5838, in the event the earning derived from capacity expansion investment can be determined by
means of follow-up in separate accounts throughout the enterprise, the discounted rate is applied to
this earning. In the event the earning cannot be determined on an individual basis, the earning to which
the discounted rate will be applied is determined by using the ratio of the amount of expansion
investment to the total fixed asset amount (including amounts relating to ongoing investments)
registered in the assets of the company at period end.
84
CONVENIENCE TRANSLATION INTO ENGLISH OF FINANCIAL STATEMENTS
ORIGINALLY ISSUED IN TURKISH
BSH EV ALETLERİ SANAYİ VE TİCARET A.Ş.
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2014
(Amounts expressed in Turkish Lira (“TRY”) unless otherwise stated.)
22.
TAX ASSETS AND LIABILITIES (Continued)
At the time of this calculation, the book value of the fixed assets included in the company assets is
considered over their reassessed amounts. The application of the discounted rate starts in the advance
tax period in which the investment begins operation partly or fully. Based on the aforementioned law,
the Company used the 10% and 8% tax rate for the amount of the corporate tax base corresponding to
the investment allowance and 20% tax rate for the remaining portion of the tax base.
Deferred Tax
The Company recognises deferred tax assets and liabilities based upon temporary differences arising
between its financial statements prepared in compliance with TFRS and its statutory tax financial
statements. These differences usually result in the recognition of revenue and expenses in different
reporting periods for TFRS financial statements and statutory tax financial statements and are set out
below.
Deferred tax assets and liabilities are calculated at 20% (2013: 20%).
31 December
Cumulative temporary differences :
2014
Depreciation and amortisation
differences of tangible and intangible assets
Warranty provision
Provision for employment termination benefits
Change in inventories
Provision for employee premiums
Discount on receivables and payables
Provision for montage and sales expenses
Provision for doubtful receivables
Provision for unused vacations
Other
Deferred tax (assets) / liabilities:
Depreciation and amortisation
differences of tangible and intangible assets
Warranty provision
Provision for employment termination benefits
Change in inventories
Provision for employee premiums
Discount on receivables and payables
Provision for montage and sales expenses
Provision for doubtful receivables
Provision for unused vacations
Other
85
31 December
2013
144,577,423
(52,612,299)
(70,655,955)
(31,032,311)
(21,047,428)
(6,758,048)
(22,533,363)
(15,233,486)
(7,385,887)
(4,171,125)
(86,852,479)
121,255,154
(49,000,022)
(47,259,185)
(29,142,731)
(15,789,326)
(1,492,904)
(21,589,487)
(10,614,601)
(7,535,442)
(5,035,905)
(66,204,449)
31 December
2014
31 December
2013
28,915,485
(10,522,460)
(14,131,191)
(6,206,462)
(4,209,486)
(1,351,610)
(4,506,673)
(3,046,697)
(1,477,177)
(834,225)
(17,370,496)
24,251,031
(9,800,004)
(9,451,837)
(5,828,546)
(3,157,865)
(298,581)
(4,317,897)
(2,122,920)
(1,507,088)
(1,007,181)
(13,240,888)
CONVENIENCE TRANSLATION INTO ENGLISH OF FINANCIAL STATEMENTS
ORIGINALLY ISSUED IN TURKISH
BSH EV ALETLERİ SANAYİ VE TİCARET A.Ş.
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2014
(Amounts expressed in Turkish Lira (“TRY”) unless otherwise stated.)
22.
TAX ASSETS AND LIABILITIES (Continued)
The movement in deferred income tax assets and liabilities as of 31 December 2014 and 31
December 2013 are as follows:
Movements of deferred tax (assets) / liabilities:
Balances at 1 January
Amount accounted under equity
Other (i)
Tax income under profit or loss
Balances at 31 December
2014
(13,240,888)
(3,514,193)
1,300,188
(1,915,603)
(17,370,496)
2013
(13,409,602)
1,606,211
(6,896)
(1,430,601)
(13,240,888)
(i) The Company had changed temporary corporate tax liability as of 31 December 2013 and 31
December 2014 after the public announcement deadlines of 6 March 2014. The Company has
deducted the mentioned amount in the financial statements of 31 December 2013 and 31
December 2014 in deferred tax assets.
The reconciliation of tax expenses stated in income statements is as follows:
1 January31 December
2014
1 January31 December
2013
Income was applied to tax rate of 8% (*)
Income was applied to tax rate of 10% (*)
Income was applied to tax rate of 20%
17,105,116
44,909,777
168,180,971
73,836,927
203,082,393
Operating profit
230,195,864
276,919,320
%8
%10
%20
%8
%10
%20
Reconciliation of Provision for Taxes
Income tax rate 8% (*)
Income tax rate 10% (*)
Income tax rate 20%
Calculated tax
Tax effects of :
-Permanent differences
-Other expenses
-Research, development and other deductions
-Revenue exempt from taxation
39,495,581
48,000,171
776,039
(849,640)
(4,250,748)
(970,109)
1,011,290
253,471
(2,577,815)
367,704
Income tax expense recognised in profit and loss
34,201,123
47,054,821
(*) In accordance with Article 32/A4, added to the New Corporate Tax Law via Article 9 of Law No.
5838, the Company used the 8% and 10% tax rate for the amount of the corporate tax base
corresponding to the investment allowance for a tax base of TRY 62.014.893 (2013: TRY 73.467.478)
for the 2014 year end.
86
CONVENIENCE TRANSLATION INTO ENGLISH OF FINANCIAL STATEMENTS
ORIGINALLY ISSUED IN TURKISH
BSH EV ALETLERİ SANAYİ VE TİCARET A.Ş.
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2014
(Amounts expressed in Turkish Lira (“TRY”) unless otherwise stated.)
23.
EARNINGS PER SHARE
1 January31 December
2014
1 January31 December
2013
4,200,000,000
4,200,000,000
-
-
Number of shares
as at 31 December (total)
4,200,000,000
4,200,000,000
Weighted average
number of shares
4,200,000,000
4,200,000,000
195,994,741
229,864,499
4.67
5.47
Number of shares
as at 1 January (total)
New shares issued
Net income (TRY)
Earnings per share equivalent
(1 share equals to 0,01 TRY)
87
CONVENIENCE TRANSLATION INTO ENGLISH OF FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH
BSH EV ALETLERİ SANAYİ VE TİCARET A.Ş.
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2014
(Amounts expressed in Turkish Lira (“TRY”) unless otherwise stated.)
24.
RELATED PARTY DISCLOSURES
Balances with related parties
Shareholder
BSH Germany
Related parties
BSH Sprzet Gospodarstwa Domowego Sp.z o.o. (Poland)
BSH Home Appliances Corporation (USA)
BSH Electrodomesticos Espana S.A. (Spain)
BSH Ikiakes Syskeves A.B.E. (Greece)
BSH Hausgeraetewerk Nauen GmbH (Germany)
BSH Bytowıje Pribory (Russia)
BSH Zelmer PRO Sp. z o.o. (Poland)
BSH Home Appliances Ltd. (UK)
RBS Home Appliances Pvt. Ltd. (India)
BSH Home Appliances Co. Ltd. (China)
BSH Hushallsapparater (Sweden)
BSH Drives and Pumps s.r.o. (Slovakia)
BSH Hisni Aparati d.o.o. (Slovenia)
BSH Electromenager S.A.S. (France)
Other
Due from
Due to
Short term trade receivables
Short term trade payables
31 December 2014 31 December 2013 31 December 2014 31 December 2013
162,936,383
113,455,800
27,860,240
36,873,156
914,047
823,351
619,881
372,805
266,638
246,107
164,860
64,525
54,149
37,906
29,873
4,174
90,040
223,607
836,910
673,687
46,228
12,739
113,443
734
141,320
81,354
21,049
5,889
23,946
12,862
152,064
262,476
68,293
893,154
35,281
1,628,410
3,031
1,283,644
19,351
215,835
327,026
2,741,277
26,275
20,077
7,211,271
262,131
18,699
119,169
166,624,739
115,801,632
32,269,715
47,599,081
88
CONVENIENCE TRANSLATION INTO ENGLISH OF FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH
BSH EV ALETLERİ SANAYİ VE TİCARET A.Ş.
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2014
(Amounts expressed in Turkish Lira (“TRY”) unless otherwise stated.)
24.
RELATED PARTY DISCLOSURES (Continued)
Balances with related parties
Shareholder
BSH Germany
Balances with related parties
Shareholder
BSH Germany
Assets
Short term other receivables
31 December 2014 31 December 2013
713,249
2,020,841
Assets
Long term other receivables
31 December 2014 31 December 2013
327,050
89
804,002
CONVENIENCE TRANSLATION INTO ENGLISH OF FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH
BSH EV ALETLERİ SANAYİ VE TİCARET A.Ş.
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2014
(Amounts expressed in Turkish Lira (“TRY”) unless otherwise stated.)
24.
RELATED PARTY DISCLOSURES (Continued)
Balances with related parties
1 January 2014 - 31 December 2014
Purchase of
Sales of
merchandise and
merchandise and
materials
materials
Interest paid
Licence, warranty
ve service charges
Shareholder
BSH Germany
537,821,170
1,726,350,618
-
101,078,455
Related parties
BSH Drives and Pumps s.r.o. (Slovakia)
BSH Electrodomesticos Espana S.A. (Spain)
BSH Home Appliances Co. (China)
BSH Sprzet Gospodarstwa Domowego Sp.z o.o. (Poland)
BSH Ikiakes Syskeves A.B.E. (Greece)
BSH Hisni Aparati d.o.o. (Slovenia)
BSH Home Appliances Corporation (USA)
BSH Bytowije Pribory (Russia)
BSH Hushallsapparater (Sweden)
BSH Home Appliances Ltd. (UK)
BSH Huishoudapparaten B.V.- (Netherland)
BSH Electromenager S.A.S. (France)
BSH Kft. (Hungary)
BSH Elettrodomestici S.p.A. (Italy)
BSH Hausgeraete AG (Switzerland)
BSH Finance and Holding GmbH (Austria)
Other
101,603,436
8,990,378
4,410,132
1,866,276
540,856
252,275
29,914
3,135
4,161,428
16,643
2,832,234
133,505
6,202,873
5,456,907
4,677,231
2,360,610
95,184
83,879
39,528
20,119
4,924
3,369
633
2,120,311
5,265,235
-
12,079
2,054,859
18,399
1,339,076
20,269
1,941
8,279
15,622
1,158
13,990
1,444
35,765
659,679,000
1,750,398,568
5,265,235
104,601,336
90
CONVENIENCE TRANSLATION INTO ENGLISH OF FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH
BSH EV ALETLERİ SANAYİ VE TİCARET A.Ş.
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2014
(Amounts expressed in Turkish Lira (“TRY”) unless otherwise stated.)
24.
RELATED PARTY DISCLOSURES (Continued)
Balances with related parties
1 January 2013 - 31 December 2013
Purchase of
Sales of
merchandise and
merchandise and
materials
materials
Interest paid
Licence, warranty
ve service charges
Shareholder
BSH Germany
444,545,377
949,923,719
-
111,751,750
Related parties
BSH Electrodomesticos Espana S.A. (Spain)
BSH Drives and Pumps s.r.o. (Slovakia)
BSH Sprzet Gospodarstwa Domowego Sp.z o.o. (Poland)
BSH Ikiakes Syskeves A.B.E. (Greece)
BSH Home Appliances Co. (China)
BSH Hisni Aparati d.o.o. (Slovenia)
BSH Bytowije Pribory (Russia)
BSH Home Appliances Corporation (USA)
BSH Home Appliances Ltd. (UK)
BSH Electromenager S.A.S. (France)
BSH Elettrodomestici S.p.A. (Italy)
BSH Hushallsapparater (Sweden)
BSH Huishoudapparaten B.V.- (Netherland)
BSH Home Appliances Pty. Ltd. (Australia)
BSH Kft. (Hungary)
BSH Home Appliances Ltd. (Israel)
BSH Hausgeraete AG (Switzerland)
BSH Home Appliances Ltd. (New Zealand)
BSH Finance and Holding GmbH (Austria)
Other
102,305,031
80,568,870
15,685,138
747,569
480,177
392,046
386,954
38,414
1,673,977
52,302,334
11,480
27,074,646
15,932,506
122,584
212,036
529,681
55,690,638
80,325,135
59,670,385
41,151,182
35,479,999
22,721,829
8,018,982
7,180,274
7,020,537
3,237,227
2,526,994
890,593
14,735,813
-
892,263
63,008
42,419
2,644
7,692
43,060
25,468
735
58,765
646,823,553
1,370,022,761
14,735,813
112,887,804
91
CONVENIENCE TRANSLATION INTO ENGLISH OF FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH
BSH EV ALETLERİ SANAYİ VE TİCARET A.Ş.
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2014
(Amounts expressed in Turkish Lira (“TRY”) unless otherwise stated.)
24.
RELATED PARTY DISCLOSURES (Continued)
31 December 2014
Original
currency
Borrowings from related parties
BSH Finance and Holding GmbH (Austria)
Maturity
TRY
8 January 2015
Weighted
average annual
interest rate %
9.15
As of 31 December 2014, the fair value of borrowings from related parties is calculated amounting to TRY 30.001.735 (2013: None).
92
Short term
borrowings
30,183,000
30,183,000
CONVENIENCE TRANSLATION INTO ENGLISH OF FINANCIAL STATEMENTS
ORIGINALLY ISSUED IN TURKISH
BSH EV ALETLERİ SANAYİ VE TİCARET A.Ş.
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2014
(Amounts expressed in Turkish Lira (“TRY”) unless otherwise stated.)
24.
RELATED PARTY DISCLOSURES (Continued)
Compensation and remuneration of key management personnel during the period has been as follows:
Salaries and other short term benefits
25.
1 January31 December 2014
1 January31 December 2013
23,815,854
23,815,854
11,612,395
11,612,395
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT
Capital risk management
The Company manages its capital to ensure that the Company will be able to continue as a going
concern while maximising the return to stakeholders through the optimisation of the debt and equity
balance.
The capital structure of the Company consists of debt, which includes the borrowings disclosed in
Note 5 and Note 24, cash and cash equivalents and equity attributable to equity holders of the parent,
comprising issued capital, reserves and retained earnings.
As of 31 December 2014 and 31 December 2013, ratio of net debt/ (equity+net debt) are as follows:
31 December 2014 31 December 2013
Total Liabilities
Less: Cash and Cash Equivalents
Net debt
Equity
Equity+Net debt
Net debt / (Equity+net debt) ratio
829,481,527
(17,466,883)
812,014,644
1,555,503,472
2,367,518,116
34%
724,422,548
(110,258,172)
614,164,376
1,419,544,346
2,033,708,722
30%
Financial risk factors
The Company’s activities expose it to a variety of financial risks. The Company’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimize
potential adverse effects on the company’s financial performance. The Company uses derivative financial instruments to hedge certain risk exposures.
Risk management is carried out by a finance department under policies approved by the board of
directors. Company treasury identifies, evaluates and hedges financial risks in close co-operation with
the Company’s operating units. 93
CONVENIENCE TRANSLATION INTO ENGLISH OF FINANCIAL STATEMENTS
ORIGINALLY ISSUED IN TURKISH
BSH EV ALETLERİ SANAYİ VE TİCARET A.Ş.
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2014
(Amounts expressed in Turkish Lira (“TRY”) unless otherwise stated.)
25.
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (Continued)
Market risk
The Company’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates and interest rates. In order to control financial risk of foreign currency exchange rates
and interest rates emerge from exporting to foreign countries, the company uses forward foreign
exchange contracts.
In the current period, there has been no change to the Company’s exposure to market risks or the manner in which it manages and measures the risk.
Foreign currency risk management
The Company undertakes certain transactions denominated in foreign currencies. Exchange rate
exposures are managed within approved policy parameters utilizing forward foreign exchange
contracts.
The carrying amount of the Company’s foreign currency denominated monetary assets and monetary
liabilities at the reporting date is disclosed below:
As of 31 December 2014 foreign currency denominated asset and liability balances were translated
with the following exchange rates ; 2,3189 TRY = 1 US dollars and 2,8207 TRY = 1 Euro (31
December 2013: 2,1343 TRY = 1 US dollars and 2,9365 TRY = 1 Euro)
94
CONVENIENCE TRANSLATION INTO ENGLISH OF FINANCIAL STATEMENTS
ORIGINALLY ISSUED IN TURKISH
BSH EV ALETLERİ SANAYİ VE TİCARET A.Ş.
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2014
(Amounts expressed in Turkish Lira (“TRY”) unless otherwise stated.)
25.
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (Continued)
Detailed foreign currency position denominated in their original currencies
31 December 2014
TRY
USD
1. Trade receivable
2. Monetary Financial Assets
3. Other
4. Total Assets (1+2+3)
5. Trade payable
6. Financial Liabilities
7. Other Monetary Liabilities
8. Short Term Liabilities (5+6+7)
9. Long Term Financial Liabilities
155,926,251
18,098,609
3,830,124
45,801,664
4,371,412
-
17,625,686
2,822,612
1,357,863
177,854,984
50,173,076
21,806,161
115,000,428
2,522,880
18,613,656
1,087,964
25,467,870
-
117,523,308
19,701,620
25,467,870
-
10. Total Liabilities (8+9)
117,523,308
11. Net asset/liability position of
off-balance sheet derivatives
Euro
-
19,701,620
-
25,467,870
-
12. Net balance sheet foreign currency position
(4-10+11)
60,331,676
30,471,456
(3,661,709)
13. Net foreign currency position (1+2-5-6-7-9)
56,501,552
30,471,456
(5,019,572)
14. Fair value of hedged funds of
foreign currency
-
-
-
15. Hedged amount of foreign currency assets
-
-
-
16. Hedged amount of foreign currency liabilities
-
-
-
17. Export
463,368,231
133,538,710
58,929,107
18. Import
1,440,735,017
30,820,019
473,146,205
95
CONVENIENCE TRANSLATION INTO ENGLISH OF FINANCIAL STATEMENTS
ORIGINALLY ISSUED IN TURKISH
BSH EV ALETLERİ SANAYİ VE TİCARET A.Ş.
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2014
(Amounts expressed in Turkish Lira (“TRY”) unless otherwise stated.)
25.
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (Continued)
Foreign currency risk management (Continued)
Detailed foreign currency position denominated in their original currencies
31 December 2013
TRY
USD
1. Trade receivable
2. Monetary Financial Assets
3. Other
4. Total Assets (1+2+3)
5. Trade payable
6. Financial Liabilities
7. Other Monetary Liabilities
8. Short Term Liabilities (5+6+7)
9. Long Term Financial Liabilities
157,465,618
111,168,012
43,779,178
43,188,357
2,668,271
2,437,760
22,233,512
35,917,971
13,136,818
312,412,808
48,294,388
71,288,301
144,716,083
657,100
17,533,789
307,876
36,537,959
-
145,373,183
17,841,665
36,537,959
-
10. Total Liabilities (8+9)
145,373,183
11. Net asset/liability position of
off-balance sheet derivatives
Euro
-
17,841,665
36,537,959
-
-
12. Net balance sheet foreign currency position
(4-10+11)
167,039,625
30,452,723
34,750,342
13. Net foreign currency position (1+2-5-6-7-9)
123,260,447
28,014,963
21,613,524
14. Fair value of hedged funds of
foreign currency
-
-
-
15. Hedged amount of foreign currency assets
-
-
-
16. Hedged amount of foreign currency liabilities
-
-
-
17. Export
1,575,027,106
150,770,178
508,982,558
18. Import
1,673,036,305
49,232,653
622,243,941
Foreign Currency Sensitivity Analysis
The Company is exposed to foreign exchange risk arising primarily from USD and EUR.
The following table details the Company’s sensitivity to a 10% increase and decrease in the TRY against the relevant foreign currencies. 10% is the sensitivity rate used when reporting foreign
currency risk internally to key management personnel and represents management’s assessment of the possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign
currency denominated monetary items and adjusts their translation at the period end for a 10% change
in foreign currency rates. The sensitivity analysis includes external loans as well as loans to foreign
operations within the Company where the denomination of the loan is in a currency other than the
currency of the lender or the borrower. A positive number indicates an increase in profit or loss.
96
CONVENIENCE TRANSLATION INTO ENGLISH OF FINANCIAL STATEMENTS
ORIGINALLY ISSUED IN TURKISH
BSH EV ALETLERİ SANAYİ VE TİCARET A.Ş.
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2014
(Amounts expressed in Turkish Lira (“TRY”) unless otherwise stated.)
25.
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (Continued)
Foreign currency risk management (Continued)
31 December 2014
Profit / (Loss)
Foreign exchange
Foreign exchange
appreciation
depreciation
10% change in USD Exchange rate
1- US Dollar net asset/(liability)
2- Portion secured from US Dollar risk
3- US Dollar net effect
10% change in Euro Exchange rate
4 - Euro net asset/(liability)
5- Portion secured from Euro risk
6- Euro net effect
TOTAL
7,066,026
7,066,026
(7,066,026)
(7,066,026)
(1,415,871)
(1,415,871)
1,415,871
1,415,871
5,650,155
(5,650,155)
31 December 2013
Profit / (Loss)
Foreign exchange
Foreign exchange
appreciation
depreciation
10% change in USD Exchange rate
1- US Dollar net asset/(liability)
2- Portion secured from US Dollar risk
3- US Dollar net effect
5,979,234
5,979,234
(5,979,234)
(5,979,234)
10% change in Euro Exchange rate
4 - Euro net asset/(liability)
5- Portion secured from Euro risk
6- Euro net effect
6,346,811
6,346,811
(6,346,811)
(6,346,811)
TOTAL
12,326,045
(12,326,045)
97
CONVENIENCE TRANSLATION INTO ENGLISH OF FINANCIAL STATEMENTS
ORIGINALLY ISSUED IN TURKISH
BSH EV ALETLERİ SANAYİ VE TİCARET A.Ş.
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2014
(Amounts expressed in Turkish Lira (“TRY”) unless otherwise stated.)
25.
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (Continued)
Credit Risk Management
Interest rate positions of the company at 31 December 2014 and 31 December 2013 are as follows:
Financial instruments with fixed interest rates
31 December 2014 31 December 2013
Time deposits
Financial liabilities
Credit Risk Management (Continued)
14,673,881
66,223,028
105,999,272
45,307,251
The Company is affected by credit risks due to its open receivable balances with future collection
dates and time deposits.
A significant portion of the Company’s open receivable balances are with related parties. For third parties, the Company has adopted a policy of only dealing with creditworthy counterparties and
obtaining sufficient collateral where appropriate, as a means of mitigating the risk of financial loss
from defaults. These collaterals include guarantees, letters of guarantees, real estate mortgages and
cheques notes receivables.
The Company’s exposure and the credit ratings of its counterparties are continuously monitored and the aggregate value of transactions concluded is spread amongst approved counterparties. Credit exposure is
controlled by counterparty limits that are continuously reviewed and transactions are monitored in
relation to the limits.
The same credit risk management principals are used for the management of risks related to financial
assets. Investments are made to the instruments with the highest liquidity and only from institutions
with the highest indicators on credibility.
The credit risks and receivable risk details of 31 December 2014 and 31 December 2013 are as
follows:
98
CONVENIENCE TRANSLATION INTO ENGLISH OF FINANCIAL STATEMENTS
ORIGINALLY ISSUED IN TURKISH
BSH EV ALETLERİ SANAYİ VE TİCARET A.Ş.
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2014
(Amounts expressed in Turkish Lira (“TRY”) unless otherwise stated.)
25.
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (Continued)
Credit
Risk
Management
31 December 2014
(Continued)
Related Party Third parties
Deposits in
bank
Maximum exposed credit risk as of reporting date
167,665,038
925,360,407
17,459,591
-Secured portion of maximum credit risk by guarantees
etc.
A. Financial asset that are either due of impaired
145,630,019
658,436,258
875,188,421
17,459,591
B. The amount of financial assets that would otherwise
be past due or impaired whose terms have been
negotiated
22,035,019
41,834,208
-
8,337,778
45,070,516
(36,732,738)
-
C. The amount of financial assets that are impaired
- Past due ( Gross book value)
- The amount of impairment (-)
-
- The net amount that have been secured with collaterals,
other credit enhancement etc.
-
D. Off-balance sheet items having credit risk
-
517,379
-
-
31 December 2013
Maximum exposed credit risk as of reporting date
-Secured portion of maximum credit risk by guarantees
etc.
A. Financial asset that are either due of impaired
B. The amount of financial assets that would otherwise
be past due or impaired whose terms have been
negotiated
118,626,475
768,218,109
110,244,336
126,264,220
592,324,536
713,642,381
110,244,336
(7,637,745)
44,218,379
-
C. The amount of financial assets that are impaired
- Past due ( Gross book value)
-
10,357,349
41,810,685
-
- The amount of impairment (-)
-
(31,453,336)
-
- The net amount that have been secured with collaterals,
other credit enhancement etc.
-
D. Off-balance sheet items having credit risk
-
99
625,338
-
-
CONVENIENCE TRANSLATION INTO ENGLISH OF FINANCIAL STATEMENTS
ORIGINALLY ISSUED IN TURKISH
BSH EV ALETLERİ SANAYİ VE TİCARET A.Ş.
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2014
(Amounts expressed in Turkish Lira (“TRY”) unless otherwise stated.)
25.
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (Continued)
Credit Risk Management (Continued)
Aging of the receivables which are overdue but not impaired is as follows:
31 December 2014
Trade Receivables Trade Receivables
From
From
Third Parties
Related Parties
Overdue 1-30 days
23,399,241
15,588,002
Overdue 1-3 months
13,064,485
4,408,642
Overdue 3-12 months
615,345
Overdue 1-5 years
20,446,823
5,332,488
Overdue 5 years of more
24,661,687
Total
86,904,724
382,731
20,994,720
Total
38,987,243
17,473,127
21,062,168
5,715,219
24,661,687
107,899,444
None secured portion by guarantees from related parties ( 2013: None).
31 December 2013
Trade Receivables Trade Receivables
From
From
Third Parties
Related Parties
Overdue 1-30 days
29,879,492
27,461,798
Overdue 1-3 months
9,422,136
1,261,573
Overdue 3-12 months
492,177
Overdue 1-5 years
10,861,747
19,519,126
Overdue 5 years of more
16,346,563
Total
86,029,064
100
3,068,075
32,283,623
Total
57,341,290
10,683,709
11,353,924
22,587,201
16,346,563
118,312,687
CONVENIENCE TRANSLATION INTO ENGLISH OF FINANCIAL STATEMENTS
ORIGINALLY ISSUED IN TURKISH
BSH EV ALETLERİ SANAYİ VE TİCARET A.Ş.
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2014
(Amounts expressed in Turkish Lira (“TRY”) unless otherwise stated.)
25.
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (Continued)
Liquidity risk management
Ultimate responsibility for liquidity risk management rests with the board of directors, which has built
an appropriate liquidity risk management framework for the management of the Company’s short, medium and long term funding and liquidity management requirements. The Company manages
liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities by
continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial
assets and liabilities.
31 December 2014
Expected maturities
Book value
Total cash outflow per
agreement
(I+II+III)
Less than 3
months (I)
Between 3-12
months (II)
36,040,028
30,183,000
32,269,715
408,568,881
2,448,061
509,509,685
36,913,642
30,244,000
32,285,287
411,923,794
2,448,061
513,814,784
17,971,691
30,244,000
32,285,287
411,923,794
2,448,061
494,872,833
16,305,465
16,305,465
2,636,486
2,636,486
Total cash outflow per
agreement
Less than 3
Between 3-12
Between 1-5
Book value
(I+II+III)
months (I)
months (II)
45,307,251
47,599,081
355,652,942
3,572,585
452,131,859
48,103,776
47,614,653
360,017,123
3,572,585
459,308,137
11,592,255
47,614,653
360,017,123
3,572,585
422,796,616
16,328,361
16,328,361
Between 1-5
years (III) Note
Non-derivative financial liabilities
Financial liabilities
Financial liabilities to related parties
Trade payables to related parties
Trade payables
Other payables
31 December 2013
Expected maturities
5
24
24
6
7
years (III) Note
Non-derivative financial liabilities
Financial liabilities
Trade payables to related parties
Trade payables
Other payables
101
20,183,160
20,183,160
5
24
6
7
CONVENIENCE TRANSLATION INTO ENGLISH OF FINANCIAL STATEMENTS
ORIGINALLY ISSUED IN TURKISH
BSH EV ALETLERİ SANAYİ VE TİCARET A.Ş.
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2014
(Amounts expressed in Turkish Lira (“TRY”) unless otherwise stated.)
26.
FINANCIAL INSTRUMENTS
Categories of financial instruments and fair values:
31 December 2014
Financial assets
Cash and cash equivalents
Due from related parties
Trade receivables
Financial investments
Financial liabilities
Financial liabilities
Financial liabilities to related parties
Trade payables
Trade payables to related parties
31 December 2013
Financial assets
Cash and cash equivalents
Due from related parties
Trade receivables
Financial investments
Financial liabilities
Financial liabilities
Financial liabilities to related parties
Trade payables
Trade payables to related parties
27.
Financial assets at
amortised cost
Financial investments
at cost
Borrowings and
receivables
Financial liabilities
at amortised cost
Book value
Note
17,466,883
-
345,685
167,665,038
924,039,330
-
-
17,466,883
167,665,038
924,039,330
345,685
3
24
6
4
-
-
-
36,040,028
30,183,000
405,213,968
33,310,014
36,040,028
30,183,000
405,213,968
33,310,014
5
24
6
24
110,258,172
-
345,685
118,626,475
766,870,299
-
-
110,258,172
118,626,475
766,870,299
345,685
3
24
6
4
-
-
-
45,307,251
351,288,761
49,395,926
45,307,251
351,288,761
49,395,926
5
24
6
24
EVENTS AFTER BALANCE SHEET DATE
Robert Bosch GmbH, one of the shareholders of the Company in Germany, has acquired 50% of the
shares of the other shareholder Siemens AG from the main shareholder BSH Bosch und Siemens
Hausgeräte GmbH on 5 January 2015. With this acquisition, the main shareholder which was already a joint venture, will continue to their activities as a 100% subsidiary of Robert Bosch GmbH. Therefore,
after the revision in the trade register the main shareholder with the old name “BSH Bosch und Siemens Hausgeräte GmbH” will be called with the new name “BSH Hausgeräte GmbH”.
102