Post on 06-May-2018
2014 ANNUAL REPORT
TRAKYA CAM SANAYİİ A.Ş.
CONTENTS
01 TRAKYA CAM IN BRIEF
02 FINANCIAL INDICATORS
04 TRAKYA CAM PRODUCTION PLANTS
06 BOARD OF DIRECTORS
07 EXECUTIVES
08 TO OUR SHAREHOLDERS
1 1 ACTIVITIES IN 2014
19 CONSOLIDATED FINANCIAL STATEMENTS WITH INDEPENDENT AUDITOR’S REPORT
98 DISTRIBUTION OF 2014 PROFIT
99 CORPORATE GOVERNANCE PRINCIPLES COMPLIANCE REPORT
116 AGENDA OF THE ORDINARY GENERAL ASSEMBLY
117 DRAFT AMENDMENTS TO THE ARTICLES OF ASSOCIATION
121 CAPITAL INCREASE, CHANGES TO THE ARTICLES OF ASSOCIATION AND
PROFIT DISTRIBUTION IN THE FISCAL YEAR 2014
122 INDEPENDENT AUDITOR’S REPORT ON THE BOARD OF DIRECTORS’ ANNUAL REPORT
124 DIRECTORY
Founded in 1978 as a subsidiary of Türkiye Şişe ve Cam Fabrikaları A.Ş., Trakya Cam Sanayii A.Ş. carries out the activities of the Şişecam Group in the field of flat glass and it is the 6th largest in the world and 3rd largest in Europe in terms of production capacity. With its plant inaugurated in 1981, Trakya Cam became the first company across a broad region spanning from Eastern Europe and Balkans to the Middle East and North Africa to use the modern float technology in production. Since then, the Company has been a pioneer in the development of flat glass both in Turkey and in the region, introducing many firsts to the industry.
Today, Trakya Cam carries out its production activities with a total of ten float lines in four main segments:
• Architectural glass (flat glass, patterned glass, mirror, laminated glass and coated glass)
• Automotive glass and glass for other vehicles, encapsulated glass
• Solar glass•Home appliances glass
In the second half of the 2000s, Trakya Cam adopted multi-focus production approach in line with its vision of regional leadership, and expanded its activities beyond the borders of Turkey for the first time and founded Trakya Glass Bulgaria EAD in Bulgaria in 2006. Having thus set up its first float line in the Balkans, Trakya Cam
then launched a mirror line and home appliances glass production line, followed by the Bulgaria Automotive Glass Plant in 2010, and its laminated and coated glass lines in 2013. Meanwhile the Company also continued to grow in the domestic market by setting up two more float lines and one coated glass line in Yenişehir, Bursa in 2007, and established a strategic partnership in 2009 to develop its flat glass activities in Egypt and Russia, undertaking a joint venture with Saint-Gobain, one of the leading players in the global flat glass industry.
The latest investments of Trakya Cam included the establishment of a joint venture in flat glass in 2013 by taking over 50% stake in HNG Float Glass Limited (HNG) in India, and the acquisition of Richard Fritz Holding in Europe. In 2014, the Company launched one float line each in Polatlı, Turkey, and jointly established a float line in Alabuga, Russia in partnership with Saint-Gobain. Regarding automotive glass investments, two new facilities went into operation in Russia and Romania.
As a major glass supplier for the construction, automotive, energy and home appliance industries with its manufacturing activities in nine different countries, its strong partnerships and expanding product range, the Company currently pursues operations in line with its vision spelled out as “being a fast growing global flat glass company with its strong brands and innovative solutions”.
TRAKYA CAM IN BRIEF
FINANCIAL INDICATORS
Summary Consolidated Balance Sheet 2013 2014Mio TRY Mio USD Mio TRY Mio USD
Current Assets 1,483 695 1,860 802Non-Current Assets 2,402 1,125 2,524 1,088Total Assets 3,885 1,820 4,384 1,890Short 1 90 38490
Trakya Lüleburgaz PlantTurkey
Trakya Mersin PlantTurkey
Trakya Autoglass PlantTurkey
Trakya Polatlı PlantTurkey
Trakya Yenişehir PlantTurkey
Trakya Glass Bulgaria EAD Bulgaria
Richard Fritz, MalackySlovakia
Glass Corp S.A. Romania
Trakya Glass Rus AORussian Federation
Automotive Glass Alliance Rus AO Russian Federation
Richard Fritz, AszodHungary
Richard Fritz, AurachGermany
Richard Fritz, BesigheimGermany
HNG Float Glass LimitedIndia
Saint-Gobain Glass Egypt Egypt
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BOARD OF DIRECTORSDr. Reha AkçakayaChairman(52) Reha Akçakaya graduated with a B.Sc. and M.Sc. in mechanical engineering from Boğaziçi University, and a second M.Sc. degree in glass science and technology from Alfred University in the U.S.A. He was awarded a Ph.D. in engineering management from Marmara University, before going on to complete an Advanced Management Program at the Harvard Business School in 2013. Having worked as a research assistant at the Boğaziçi University between 1985 and 1988, Mr. Akçakaya joined the Flat Glass Group in 1988. After holding various managerial positions, he has been serving as the Executive Vice President Flat Glass Business since January 2nd, 2014.
Nihat ÖzdemirVice Chairman(55) Nihat Özdemir graduated with a degree from the Middle East Technical University, Faculty of Administrative Sciences. He began his career as an assistant auditor trainee at İşbank in 1981. After holding various managerial positions at İşbank, Özdemir was appointed as the Gebze Corporate Branch Manager in February 2013, a position he still holds. Pursuant to the CMB Corporate Governance Principles, Nihat Özdemir is a non-executive, non-independent member of the Board.
Beyza GençMember (1)
(37) Beyza Genç graduated with a degree in business administration from the Middle East Technical University in 1999, and started her career in the field of audit at Deloitte Touche Yeminli Mali Müşavirlik A.Ş. She completed an MBA from the Boğaziçi University in 2004, where she is currently pursuing studies on a doctorate dissertation in finance. She completed the Harvard Business School General Management Program in 2012. Beyza Genç joined Trakya Cam Sanayii A.Ş. in 2002, where she functioned at various levels. She has been working as the Finance Director of the Flat Glass Group since June 2014. Pursuant to the CMB Corporate Governance Principles, Mrs. Genç, who holds an executive position, is a non-independent member.
Zeynep Hansu UçarMember (2)
(43) Zeynep Hansu Uçar graduated with a degree in business administration from the Faculty of Economic and Administrative Sciences at the Middle East Technical University. She began her career as an assistant investment specialist in the Subsidiaries Division of İşbank in 1994, where she later held several managerial positions responsible for various group companies. She has been serving as the Subsidiaries Division Unit Manager since 2007. Having functioned as a Board member and auditor at various companies of İşbank since 2004 and of Şişecam Group affiliated to Türkiye Şişe ve Cam Fabrikaları A.Ş. since 2010, she was appointed as a member of the Board of Directors of Trakya Cam Sanayii A.Ş. on August 2nd, 2010, as well as a member on the Company’s Early Risk Detection Committee and Corporate Governance Committee. Ms. / Mrs. Uçar has also held a seat on the boards of Kültür Yayınları İş Türk A.Ş. since 22 July, 2010, Camiş Yatırım Holding A.Ş. since March 27th, 2012, Avea İletişim Hizmetleri A.Ş. since October 9th, 2012, İş Faktoring A.Ş. since July 29th, 2013 and İş Finansal Kiralama A.Ş. since July 30th, 2013.
TRAKYA CAM SANAYİİ 2014 ANNUAL REPORT6
Prof. Dr. A. Murat DemircioğluIndependent Member (3) (67) Prof. Atilla Murat Demircioğlu is a graduate of the İstanbul University Faculty of Law and completed a second Bachelor’s degree and a doctorate degree from the Faculty of Law at Bern University. He became an Associate Professor and subsequently a Professor in Labor and Social Security Law. He has served as a faculty member and director at various universities. The author of several books, articles, research papers and publications, Demircioğlu served as a Member of the Editorial Board of the Ministry of Culture’s Encyclopedia of Trade Unions, Board Member at Hamburg Turkish-European Research Institute, and Deputy Chairman at the Society for Japanese Studies. He was an advisor to the Minister of Labor and Social Security, Honorary Consultant to T.R.N.C. Government, Member of the Audit Board and of the Board of Directors at Turkish Airlines, Legal Advisor to the Istanbul Chamber of Commerce and Advisor to the Istanbul 2010 European Capital of Culture Agency. In 2014, he was elected as the President of Alexander Von Humboldt Alumni Association of Turkey, and as moderator of the Istanbul Chamber of Commerce Business Life Issues Commission. Demircioğlu is an independent Board member pursuant to the CMB Corporate Governance Principles, and he does not have any affiliation with Trakya Cam and/or its related parties.
Halit Bozkurt AranIndependent Member (4)
(68) Halit Bozkurt Aran graduated from the Faculty of Political Sciences at Ankara University in 1971 and began his professional career at the Ministry of Foreign Affairs in 1973. Aran served as Vice Consul at Salzburg Consulate General, First Secretary at the Kuala Lumpur Embassy, and Undersecretary at the Washington Embassy. He was appointed as the Consul General in Dusseldorf, and as Ambassador to Pakistan and Iran. He functioned as Permanent Delegate of Turkey to UNESCO in Paris, and to the World Trade Organization (WTO) in Geneva. At the WTO, Ambassador Aran also chaired the Trade Policy Review Body, the Committee on Trade and Environment, and the Working Committee on the Accession of Belarus. Following his post as the Deputy Director General for Political Affairs for European Countries at the head office, Aran also worked as the General Director for Bilateral Economic Affairs and General Director for Middle East Political Relations. Functioning as the Director of the TEPAV Center for Multilateral Trade Studies established in August 2012, Bozkurt Aran is also a member of The Bretton Woods Committee. He is an independent Board member pursuant to the CMB Corporate Governance Principles, and he does not have any affiliation with Trakya Cam and/or its related parties.
EXECUTIVES
Reha Akçakaya Executive Vice President Flat Glass BusinessGökhan Atikkan Basic Glass Production DirectorGökçen Tural Automotive Glass DirectorHaluk Sarıaltın Marketing and Sales DirectorBeyza Genç Financial DirectorM. Haluk Güreren Development DirectorÖzlem Vergon (5) Planning DirectorMahmut Temiz Human Resources DirectorSelma Öner Supply Chain DirectorThomas Dueckers Fritz Holding GmbH Managing DirectorSerkan Şahin Trakya Yenişehir Cam Sanayii A.Ş. Plant ManagerKaan Ertaş Trakya Cam Sanayii A.Ş. Trakya Plant ManagerGüral Savaştürk Trakya Cam Sanayii A.Ş. Mersin Plant ManagerSedat Çavuşlar Automotive Glass Plant ManagerZeki Budak Trakya Polatlı Cam Sanayii A.Ş. Plant ManagerA. Alper Can Trakya Glass Bulgaria EAD Flat Glass Plant ManagerMuhsin Miroğlu Trakya Glass Bulgaria EAD Automotive and Home Appliances Plant ManagerBeytullah Şahin Trakya Glass Rus ZAO General Manager Çağatay Suner Romania Glass Corp SA General ManagerGürcan Gürçay Automotive Glass Alliance Rus ZAO General Manager
(1) Member of Corporate Governance Committee(2) Member of Corporate Governance Committee and member of Early Risk Detection Committee (3) Head of Corporate Governance Committee, Head of Early Risk Detection Committee, Head of Audit Committee(4) Member of Corporate Governance Committee, Member of Early Risk Detection Committee, Member of Audit Committee(5) Altuğ Özeren has been appointed to succeed Özlem Vergon who has been appointed as Chief Strategy Officer of Şişecam Holding effective January 13th, 2015.
Members of the Board of Directors have been appointed to serve for a term from 17 May 2012 until 23 March 2015, and their powers have been determined by the provisions of the Turkish Commercial Code and the Company’s Articles of Association.
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Dear Shareholders,
Trakya Cam, a subsidiary of Türkiye Şişe ve Cam Fabrikaları A.Ş. engaged in the production of flat glass, maintained its powerful claim through its robust manufacturing infrastructure coupled with a broadening product range that is constantly being updated and upgraded, not just in Turkey but also in other regions where the Company is active. The Company has unwaveringly maintained its goal of creating value for its customers, employees, shareholders and all of its stakeholders in its 37th year in operation, and has achieved this by supplying products manufactured using the latest state-of-the-art technology to the global market under a customer and market oriented approach.
A deceleration in the global economy in 2014Although 2014 brought some relief from the stagnation that began in the global economy in 2012, growth fell short of the predictions, particularly due to the impact of economic and political developments in the second half of the year. While the U.S. and the U.K. emerged from economic stagnation, the recovery in the economies of Europe - a major market for our Company - fell short of expectations. Economic growth lost pace in emerging economies, particularly in China, while the Russian economy - the world’s eighth largest economy and of tremendous significance by virtue of its potential - was hit hard by the economic sanctions imposed against the country following its 2014 intervention in Crimea and by the plunge in oil prices, sending the country’s economy into recession. In Ukraine, on the other hand, the economy virtually ground to a halt, depleting foreign currency reserves, whereas gas supplies became an issue of concern not just in Ukraine, but also for Europe and Turkey.
Economic growth in Turkey lost pace in 2014 and is estimated to have been realized below 3% in light of the various developments including the Fed’s actions, the slowdown in Europe and China, turmoil and conflicts in Russia and Ukraine, Iraq and Syria, political developments, elections and plunging oil prices. Against such a backdrop, an improvement in the rate of economic growth toward 5% - which would be necessary to ensure rapid development in 2015 and beyond - would appear to be somewhat ambitious.
YoY growth in flat glass production Despite the economic slowdown, added-value products and
productivity measures brought vigor to the glass industry during 2014. The ongoing strength in demand for flat glass, and from the domestic construction sector in particular, set the stage for an increase in production on a YoY basis. Growth continued in various areas of the economy, including in the automotive, tourism, retail, white goods and household consumption segments, though remaining subdued. Although imports of glass increased, there was some improvement in the exports to imports coverage and foreign trade deficit. Despite the fall of the Turkish Lira against the US dollar, Turkey remained an attractive market with its low energy and labor costs, and glass imports continued to grow. Specific expectations in the sector include ensuring continuity in energy and ensuring uninterrupted supply at competitive costs for industrialists, stepping up the transition to value-added products through a greater number of R&D and innovation incentives, and acknowledging international investments as a force to drive efficiency in the economy, which should therefore be encouraged.
A strong claim in all product groups, successfully reflected to profitabilityDespite a limited recovery compared to the previous year, Trakya Cam maintained its strong claim in all product groups and successfully reflected this to its profitability thanks to its market and customer oriented sales and marketing activities, the cost-reduction initiatives implemented across the entire Group, the expansion in production infrastructure and its enhanced product range. This was achieved on the back of efficient utilization of the operating capital and a product range that is quickly evolving in favor of value-added products.
In keeping with these goals, the Company allocated more resources to enhance environmental and occupational safety performance, with a focus on reducing consumption of raw material and energy in all production processes. While improvements were undertaken to this end at existing plants, new designs and practices intended to minimize energy consumption in new investments have also been rolled out in the Flat Glass Group plants.
A sustainable growth strategy…In line with its strategy of sustainable growth, the Şişecam Group works to achieve constant economic, environmental and social improvement, and to create value for all of our stakeholders. With a view to communicating the impact and performance within
TO OUR SHAREHOLDERS
TRAKYA CAM SANAYİİ 2014 ANNUAL REPORT8
this context, the first Şişecam Sustainability Report covering the Group’s domestic operations was prepared in 2014. Trakya Cam’s initiatives in relation to sustainability have also been addressed in this report.
In accordance with its approach to sustainability, Trakya Cam has drawn up initiatives which are mindful of human life, protecting the environment and sensitivity when it comes to saving resources and energy. The Company allocated more resources to enhancing its environmental performance and occupational safety, and was focused on reducing consumption of raw materials and energy in all of its production processes. The Company carried out improvements to its existing plants and also introduced measures and practices to minimize energy use at its new investments. Working on alternative energy resources, Trakya Cam aims to establish waste heat recovery units (similar to the waste heat recovery unit built at its Yenişehir Plant) in all of its plants.
Trakya Cam derives cost savings not only in its manufacturing activities, but also reduces its total costs by improving its processes and code of conduct. Based on the importance that the Company attaches to the management of operating capital, projects are conducted which will bring efficient management to the entire supply chain.
Four new products introduced by Trakya Cam, the solution partner for all its customers The Company developed float glass products available in two different shades, offering solar control and aesthetic uses for the architectural glass market, temperable low-e glass for houses, schools, hospitals and shopping malls where security and heat insulation are priorities, and privacy glass for the automotive industry.
R&D processes are underway with the aim of bringing high-performance, high-quality products for the housing, white goods and automotive sectors through the high-performance anti-reflective coating project for the PV market. The Group allocated significant R&D resources for all of these product development activities.
Operating in a wide region extending from Germany to IndiaWith its facilities that entered operation in 2014, the Company expanded the region from which it produces, which now includes
nine countries stretching from Germany to India. Having started manufacturing in 2014, the Polatlı Plant boasts the largest flat glass furnace in Turkey and the surrounding region with an annual capacity of 290,000 tonnes. The flat glass line, the investment of which was completed in 2014 in the Alabuga area of Russia, commenced commercial production in June, and sales were started from the plant. There has been an increase in the number of customers and an improvement in customer loyalty through efficient marketing and sales activities, and the Company’s turnover and profitability targets have been successfully met. Two new automotive glass facilities were inaugurated, which will offer service in Russia and Romania.
Maintaining its ambitious growth and profitability targets for 2015Trakya Cam will maintain its ambitious growth and profitability targets for 2015, and will bring one mirror line into operation in addition to its existing float line in Russia, and a second flat glass line in Bulgaria. The autoglass facilities in Romania and Russia, whose investments have now been finalized, will also enter operation. Our Company increased its coated glass product diversity in 2014 and it aims to introduce new products to the market in 2015.
Dear Shareholders,
Trakya Cam’s unwavering target is to build on its brand equityIn the periods ahead, Trakya Cam will adhere to its inviolable targets which include expanding its production activities and geographical presence in a sustainable manner, maximizing customer satisfaction through high-quality service and quality product diversity based on an approach that places customers at the heart of what it does, producing solutions for matters related to energy and the environment through new products and technologies, increasing profitability and productivity on the back of accurate organizational structure and building on its brand equity in parallel with all of these activities and initiatives.
We owe a debt of gratitude first and foremost to our employees, who represent the Company’s most valuable asset and which are instrumental in enabling these targets to be met, and to our esteemed shareholders, customers, suppliers and Group companies.
Trakya Cam Board of Directors
TO MEET ITS VISION IS TO GROW RAPIDLY AS A FLAT GLASS COMPANY WITH A GLOBAL REACH, BACKED BY
STRONG BRANDS AND INNOVATIVE SOLUTIONS, TRAKYA CAM MAINTAINS ITS AMBITIOUS CLAIM THROUGH ROBUST
MANUFACTURING INFRASTRUCTURE COUPLED WITH A DIVERSIFYING PRODUCT RANGE WHICH IS CONSTANTLY
BEING UPDATED AND UPGRADED - NOT JUST IN TURKEY, BUT ALSO IN OTHER REGIONS WHERE THE COMPANY IS
ACTIVE.
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9COUNTRIESPRODUCTION IN
29%INCREASE IN SALES REVENUESIN THE BASIC GLASS PRODUCTS
LARGEST FLAT GLASS MANUFACTURER
IN EUROPE3rdIN THE WORLD6th
AND
TRAKYA CAM SANAYİİ 2014 ANNUAL REPORT10
AN OVERVIEW OF 2014
The fluctuations in flat glass consumption were reflected to the supply - demand balance. In 2014, the negative effects of global economic stagnation on Europe lessened and country economies demonstrated limited economic growth. The European construction industry, which had contracted by 21% in the past seven years, posted growth for the first time in 2014 and expanded by 1%. Following a 4% contraction in 2013, the housing construction segment is estimated to have remained unchanged in 2014. On the other hand, the supply-demand balance could not be fully achieved, since the expected increase in flat glass consumption failed to materialize. The oversupply, coupled with the increased stock pressure resulting from the political turmoil in Russia and the Middle East, limited the price increases throughout the year.
Russia underwent an economically turbulent year due to sanctions imposed against it on account of the Ukraine crisis; the steep devaluation of the Ruble against the US dollar, and the decrease in oil prices. The uncertainties in the economy slowed down the construction sector, along with all the other industries. Prices had been hit by the low consumption in the sector, but entered a recovery process with the effect of decreasing supply towards the end of the year.
Plummeting oil prices, which compounded the political turmoil in the Middle East and North Africa, constrained economic growth in this region. In view of the slowdown in the construction sector and consumption, this region is still considered to be lagging behind its potential and may only become an attractive market in the medium term.
Hindered by the economic and political challenges in surrounding markets, the growth of the Turkish economy lost pace in 2014. That said, Turkey once again emerged as the strongest economy in the region in relative terms, notching up the highest growth rate in 2014.
A year of growth for the Turkish construction sector A major consumer of flat glass in our country, the construction sector demonstrated 3.8% growth in the first half of the year. Following the relative contraction in the third quarter, the sector is anticipated to have closed the year with a growth rate of 3-4%. On the other hand, an increase of 39% was observed in the number of building permits, whereas number of occupancy permits increased by 17% in the first three quarters of 2014. While growth in the construction sector was led by the construction of private sector buildings, urban renewal projects were another driving force for the sector. Meanwhile, other sectors either grew below their anticipated levels or suffered a contraction due to the governmental measures adopted to curb domestic demand.
There was a total expansion of 6% in the automotive market in EU and EFTA countries in 2014. Exports remained the driver of growth in the automotive industry.
The overall market for motor vehicles in Turkey contracted by 10% YoY to 807,000 vehicles in 2014. However, increased exports in the automotive made compensated for the contraction in the domestic market, and there was an overall increase in production. Turkey’s total automotive exports grew
by 7% to reach 885,000 vehicles in 2014. Production of motor vehicles, on the other hand, posted 4% YoY growth to be realized at 1.2 million vehicles.
Growth in the production of household appliances The fortunes of the European household appliances sector in 2014 can be split into two distinct periods; stagnation in the first half of the year, remaining at its 2013 level, but an increase in production in the second half of the year with an annual rate of growth of 2-3%. Production in the Turkish household appliances sector increased by 3% YoY. According to the cumulative data for December released by the White Goods Manufacturers’ Association of Turkey, of the two segments served by the Flat Glass Group, refrigerator production was down by 8%, whereas production of ovens increased by 10%. 2014 HIGHLIGHTS FOR THE FLAT GLASS GROUP
Trakya Cam continued to assert its presence as a strong player in all product groups and increased its profitability in 2014.Trakya Cam remained a powerful player in all product groups in 2014, which offered mixed fortunes for the world markets, with the Company enjoying a relative recovery despite regional differences on the back of its increased production capability and wider product range, which the Company successfully reflected to its profitability.
The key drivers behind this success included market- and customer-oriented sales and marketing activities, cost saving initiatives implemented across the entire Group, efficient utilization of working capital and the product range, the composition of which has been shifting towards value-added products.
Trakya Cam unwaveringly pursued and completed investments for growth at its existing locations and penetrating new regions. On another front, the Company also took concrete steps to enhance joint ventures and acquisitions instituted previously in various geographical regions in line with its goal of inorganic growth.
Trakya Cam constantly backs its growth with added-value product range, customer-oriented strong organizational structure, increased productivity in all processes, simplified work processes through integrated information technology, and efficient decision-making mechanisms.
Sector highlights…Trakya Cam increased its total sales revenues of architectural glass by 29% YoY in 2014 with the contribution of value-added products.
International sales were carried out considering profitability, depending on available capacity. Despite the negative developments in the markets, Trakya Cam increased its international architectural glass sales by 42% YoY in TRY terms.
Trakya Cam continued to adhere to a competitive policy in order to preserve and expand its existing sales channels in Bulgaria and Romania, its primary markets in Europe. The Company fulfilled the quality product demands through the laminated
ACTIVITIES IN 2014
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and coated glass lines that entered operation in Bulgaria in 2013, and thus increased its share of value-added products within total sales.
Offering solar control, energy savings and opacity depending on the intended purpose for windows, coated glass products have an important place in the flat glass sector. Trakya Cam established itself as an active player in the commercial buildings market, notably with its new temperable coated glass range.
In 2014, Trakya Cam expanded its portfolio of new customers with the contribution of offices opened in Poland, Hungary and Croatia to secure market penetration.
Sales from the new float line in the Republic of Tatarstan, Russia started at the end of June. Efficient marketing and sales activities served to increase the number of customers, and the sales performance was maintained at a consistent level despite the negative market conditions in the region.
Capacity availability was taken into account in sales to the Middle East region, yet sales increased on a YoY basis. New coated products and other value-added products have been shipped to this market.
International sales increased, and significant progress was achieved, particularly in sales to more distant regions when compared with 2013.
India’s economic growth, which had averaged 6.5% in the 2012-2014 period, lost some momentum during 2014, but growth is expected to gain momentum from 2015 onwards with the elimination of political uncertainty in the country following the general elections. The construction sector, which is developing
in parallel with the national economy, is set to maintain its performance driven by a rapidly growing population, a large housing gap and an increased supply of commercial buildings, which will in turn positively impact the flat glass market in the periods ahead.
Consumption grew in the Turkish flat glass market. Having pursued a customer- and market-oriented approach, Trakya Cam increased its architectural glass sales in Turkey by 23% in TRY terms.
Continuing its ambitious growth in the automotive glass segment through its activities in auto glass facilities in Turkey and Bulgaria, Trakya Cam captured a higher share of the new vehicle projects recently initiated in the Turkish and European markets, and increased its sales by 16% YoY in 2014.
Supplying products to the new projects being undertaken by Toyota, Hyundai and Ford in Turkey and Spain, Trakya Cam completed the infrastructure preparations aimed at the new projects it will launch in 2015. The Company, which has finalized its auto glass facility investments in Romania and Russia, is expanding its customer and product portfolios within the framework of the ongoing integration with Richard Fritz, and is in the process of negotiating new projects.
Due to global warming and the worldwide constraints in energy resources, products that have a high energy efficiency and are compatible with the advancing technology have begun to emerge as a key area of development in the white goods industry. In this sense, glass products have acquired functionality in terms of energy efficiency, in addition to their visual applications.
TRAKYA CAM SANAYİİ 2014 ANNUAL REPORT12
Remaining a powerful supplier in the household appliances sector, Trakya Cam was able to expand its appliance glass sales by 13% in TRY terms in 2014.
2014 saw marked expansion in the market for solar energy glass, which was triggered mainly by the unlicensed electricity generation limit that was increased from 500 KW to 1 MW by the Energy Market Regulatory Authority (EMRA), and the higher number of solar panel manufacturers in Turkey. As a result, sales of solar energy glass boomed by 53% in revenue terms.
Another key event was the antidumping investigation conducted by the European Commission regarding solar glass imports from China. The investigation, which was concluded in June, resulted in a decision to impose an anti-dumping duty of between 17% to 42% on solar energy glass imported from China for a period of five years. Thanks to this decision, Trakya Cam anticipates an increase in its sales to the European market in 2015.
TRY 431 mn of investment undertaken by Flat Glass Group in 2014While sustaining its growth in the Turkish market, Trakya Cam unwaveringly pursued its investments and initiatives in new markets during 2014.
Following the establishment of a coated glass facility and one laminated line in Bulgaria, a partnership was established with
HNG Float Limited in India, while the company acquired the Richard Fritz company in Germany. These steps were part of an expansion program which was brought to completion in 2013. Trakya Cam continued to pursue its investments in 2014, and completed a substantial portion of the investments it had embarked upon. In this context, Trakya Cam brought its seventh float line in Turkey into operation in the Polatlı Organized Industrial Site in Ankara, which represents its fourth production location in the Turkish market. The facility boasts Turkey’s highest-capacity furnace with a capacity of approximately 1,000 tonnes/day, and is also one of only a few such furnaces in the world. A float line was brought into operation in Alabuga, Russia, in which Trakya Cam holds a 70% stake and Saint-Gobain a 30% stake.
Trakya Cam, which is set to continue its growth in 2015, is planning to launch a mirror line in addition to the float line investment being carried out in partnership with Saint-Gobain in Russia, as well as a second float line in Bulgaria. In line with its goal of becoming a solid supplier of automotive glass by creating new capacities that will satisfy demand for auto glass in the targeted markets in 2015, the Company opened two new auto glass facilities in Romania and Russia, the investments of which have been finalized.
With the support of coated glass investments finalized in 2013, Trakya Cam increased the diversity of its coated glass products in 2014. The target is to introduce new products to the market in 2015.
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and heated rear windows in 2014. In addition, productivity was optimized through Six Sigma projects, and numerous cost-saving projects were introduced with the primary aim of reducing energy costs. Trakya Cam aims to broaden the coverage of Six Sigma projects in the period ahead.
During 2014, technical studies were carried out to establish the areas where the glass-related requirements of Richard Fritz - the Group’s new member, which is leading player in terms of technology in the manufacture of encapsulated glass in the main automotive industry - overlap with the competencies and production capacity of Trakya Cam, and to develop a suitable supply plan. The ultimate goal is to enhance joint projects. From this standpoint, the target is set for 2015 to be a year in which the synergy and integration between Richard Fritz Holding and Trakya Cam can be capitalized on more efficiently.
Four new products introduced in 2014The product developments included float glass with solar control and decorative functions available in two different colors for the architectural glass market, temperable low-e coated glass for homes, schools, hospitals and shopping malls where security is a priority, and privacy glass for the automotive industry.
Privacy glass is a float glass product used in motor vehicles for protection against light and sun, preventing visibility from the outside due to its translucency, and ensuring energy saving due to its low solar penetration. R&TD processes are underway to develop high-performance, high-reflection coatings for the PV market, and high-performance specialty products for architectural applications, household appliances and automotive industries.
Trakya Cam also continues the development of coated glass products with different specifications, to be used as raw material for appliance glasses. Development work for automotive glass, on the other hand, is focused on hydrophobic (water repellant) and oleophobic (anti-smudging) glass manufacturing. Another highlight of 2014 was the shipment of the first samples using lead-free solder alloy to customers.Within the scope of efforts to manufacture athermic (infrared) and UV (ultraviolet)-resistant automotive glasses, Trakya Cam initiated trial production of athermic windshield glass in Bulgaria.
Improving production capabilities with new initiativesTrakya Cam continued to respond to its customers’ needs in 2014 on the back of its broader product portfolio and concept of high quality.
In 2014, Polatlı and Russia plants - two new investments undertaken by Trakya Cam, began production at full capacity. A second float line was also established in the Bulgaria plant, with a mirror line added to the Russia plant, which were then prepared for production. One float line in the Mersin plant, which had completed its operational life, was stopped in December for cold repair.
Within the framework of the sustainability approach embraced by the Group, Trakya Cam also authored initiatives that observe human life, environmental protection, and sensitivity of resources and energy saving. The Company stepped up its funding allocated to enhancing environmental and occupational safety performance, while an emphasis was placed on reducing raw material and energy consumption in all production processes. In addition to the improvements realized at existing plants, Trakya Cam introduced designs and implementations that will minimize energy use in its new investments. These initiatives have been introduced at all of the facilities in the Flat Glass Group in Turkey, Bulgaria, Russia and India, and the Company aims to expand the use of its award-winning conversion units, already generating electricity from waste heat at the Trakya Cam Yenişehir plant, to all of its plants.
Trakya Cam’s efforts to secure cost savings are not limited to production activities, but also cover processes and business conduct. Attaching importance to working capital management, the Company executed projects encompassing efficient management of the entire supply chain.
Trakya Cam realized the production of laminated doors, which were manufactured for the first time in the auto glass segment,
TRAKYA CAM SANAYİİ 2014 ANNUAL REPORT14
By adding high added-value new products to its portfolio, Trakya Cam aims to win more top-segment, strategically important projects, and to gain increased share in the European automotive market.
A focus on maximizing benefit when structuring marketing communication activitiesTrakya Cam pursued a customer and market oriented approach in 2014, and carried out efficient product and channel management; the Company unwaveringly pursued product and brand communication activities.
While regular advertising and publicity activities were carried out for insulating glass products during 2014, a combination of environmentally oriented, value-added, energy-saving products, and project-based solution partnership services served to enhance customer loyalty. Coated glass products with various performance options were introduced to the market, widening product diversity, while Trakya Cam products became part of numerous projects both in and outside Turkey, thanks to the glass solution offers backed by project technical services, with popularity among architects, investors and all decision-makers.
The 40th anniversary events organized for Isıcam, Turkey’s one and only heat insulating glass brand, were instrumental in achieving increased product and brand awareness and loyalty.
Thanks to the technical marketing communications held with decision-makers of public institutions within the scope of communication activities, application of coated glass has now become standard in schools affiliated with the Ministry of Education, while security glass products started to be used in prisons under the Ministry of Justice. Activities previously carried out by municipalities enabled the use of high-quality products that provide good heat insulation and energy savings in urban renewal projects.
OUTLOOK FOR 2015 AND TARGETS OF THE FLAT GLASS GROUP
Following the acquisition and partnership steps it has brought to completion in the past two years, Trakya Cam aims to finalize its ongoing investments and put them into operation in in 2015. Once these investments are completed, Trakya Cam will be a company operating with 11 float lines, and eight manufacturing facilities serving the automotive industry throughout nine countries.
As a global player that places the customer at the heart of everything it does, Trakya Cam aims to pursue its activities in the areas of high-quality service, high quality product diversity and energy and the environment in 2015, while contributing to the optimal use of resources and to sustainability.
FLAT GLASS BRANDSTRC Helio clear®
TRC Helio extra clear®
TRC Helio®
Isıcam®
Isıcam Sinerji®
Isıcam Konfor® Isıcam Sinerji® TIsıcam Konfor® TIsıcam Sinerji® 3+Isıcam Konfor® 3+TRC EcothermTRC EcosolTRC Tentesol®
TRC Tentesol T®
TRC Aura ReflektaTRC Lameks®
TRC Lameks extra clear®
TRC Acoustic Lameks®
TRC Duracam®
TRC Elit GlassTRC Deco classic®
TRC Deco wired®
TRC Helio mattTRC Flotal®
TRC Flotal® extra clearTRC Flotal® ETRC Gökkuşağı®
TRC Durasolar® P+
AUTOMOTIVE BRANDSDuracam®
Lameks®
Toflex®
Toglas®
Fritz®
15
HUMAN RESOURCESThe companies comprising the Flat Glass Group employed 5,908 people in total at the end of 2014, of which 1,728 were receiving a monthly salary and 4,176 were paid on an hourly basis.
The Flat Glass Group Human Resources Department pursues its activities with the aim of supporting the Group’s targets and strategies for achieving sustainable growth both in and outside Turkey in conformity with Şişecam Group’s principles and guidelines. The Group focuses on implementing processes by creating HR systems in cooperation with the Human Resources Department, and on creating a sustainable competitive advantage through its competent human resources and by constantly improving processes.
Human Resources activities are directed towards devising and improving the processes for recruiting and retaining individuals with the right talents who share the Group’s values, while also being aimed at establishing a high-performance culture across the Group, training and developing employees who are deemed to possess expertise in their respective fields and acting as role models with their knowledge and experience. Employees are rewarded, and a fair and consistent remuneration system is implemented in line with the extent of the business, the employee’s contribution to the business, their knowledge/skills, competencies and performance.
The laws and regulations in force are adhered to, and the interests of the employer and the employees are observed in the execution of all HR practices, and specifically in;• recruitment,• training, • performance management, • optimum staffing analysis, • reorganization efforts, • remuneration, and • career management and succession systems.In view of the Company’s globalizing corporate culture, the developmental activities needed by its human resources are carried out in line with a success-oriented performance and constant improvement concept. Furthermore, domestic and international training and development programs are implemented to further build on potential leadership, expert human resources and international management competence.In 2014, the Flat Glass Group worked in line with the human resources practices and integration efforts aimed at its
investments abroad. Local salary benchmarking was undertaken for the Group’s Trakya Glass Rus and Automotive Glass Alliance Rus companies in Russia, the Glasscorp SA company in Romania, and Trakya Glass Bulgaria EAD, upon which the remuneration structure was formulated and recruitment processes were carried out.
HR activities were carried out by Trakya Cam and the Richard Fritz company operating in Germany, Slovakia and Hungary, and the integration plan determined in conjunction with company executives was implemented. The executives at Fritz were informed within the scope of cultural integration, and preparatory work for “We Are Part of the Şişecam Family” initiative, conducted in cooperation with the Şişecam Group Human Resources Division, was completed. The initiatives will be introduced to Fritz workplaces in 2015.
INDUSTRIAL RELATIONS - OCCUPATIONAL HEALTH AND SAFETYIn keeping with Şişecam’s policies, the Group’s primary purpose with respect to industrial relations is to enhance competitiveness and productivity by developing industrial relations in a balanced and sound manner. The vision espoused in relation to industrial relations is spelled out as guaranteeing permanent labor peace based on trust and dialogue in workplaces by working with the trade unions, and conducting projects aimed at making occupational health and safety more efficient in accordance with the “People First” philosophy.
Through work aligned with the Group’s Industrial Relations policies and strategies, the Flat Glass Group provides oral and written feedback regarding the implementation of the provisions of laws, regulations and collective bargaining agreements at the Group’s workplaces, and thus produces solutions for the problems Group companies may face in their industrial relations. The meetings organized with the HR managers at the Group plants serve to ensure close monitoring of implementations that are revised according to current legislation, while constant communication facilitates evaluation of developments in industrial relations and the problems in practice, and guaranteeing uniformity of practices across the Group.
Relations with trade unions are carried out by paying due regard to the preservation of labor harmony and continuity of manufacturing within the framework of collective bargaining agreements and in accordance with the applicable laws and legislation.
TRAKYA CAM SANAYİİ 2014 ANNUAL REPORT16
The 24th Term Collective Bargaining Agreement covering the period from 1 January, 2014 to 31 December, 2016 was concluded on 28 August 2014 with the Kristal-İş Trade Union for four of the Company’s workplaces; the Trakya Plant, Mersin Plant and Autoglass Plant, and the Yenişehir Plant of the Company’s subsidiary, Trakya Yenişehir Cam Sanayii A.Ş.
The negotiations for the 1st term collective bargaining agreement that will cover a period of three years from 1 January, 2014 to 31 December, 2016, which were carried out with the Kristal İş Trade Union and which were held at Trakya Polatlı Cam San. A.Ş. resulted in a mutual agreement being reached on 5 December, 2014.
The expired collective bargaining agreements in force at the Group’s workplaces operating abroad have been renewed based on the negotiations held in view of the characteristics of the respective countries and the Group’s interests.
The Collective Bargaining Agreement covering the period from 1 July, 2014 to 30 June, 2015 were concluded on 13 June, 2014 with the Podkrepa Trade Union organized at our Trakya Glass Bulgaria EAD company established in Bulgaria.
The Collective Bargaining Agreement covering the period from 1 October, 2014 to 31 December, 2016 were concluded on 19 December, 2014 with the Glasscorp Trade Union held at Glasscorp SA, established in Romania.
The Fritz-Besigheim Plant was closed down smoothly with respect to industrial relations.
The Flat Glass Group Human Resources Department, which is in constant contact and coordination with the Group’s Industrial Relations Department, ensures that all operations and activities in the Group’s industrial establishments are carried out in healthy and safe working environments and that all workplaces are audited in this respect in accordance with national and international norms. Necessary regulatory activities are undertaken and required training programs are offered pursuant to Occupational Health and Safety Law, and events are organized to propagate a culture of occupational health and safety. Efforts are spent continually to remedy any aspects deemed to be deficient and to improve safe working conditions. The coordination of occupational health and safety-related activities at the industrial workplaces under the Flat Glass Group, and observation, measurement and analyses continued during 2014.
With its previous revision having taken place in 2010, the Occupational Health and Safety Policy was revised in 2014, and it was published for use at all domestic and overseas workplaces affiliated to the Group. As part of the occupational health and safety observations and measurements, OHS measurements and observations were performed at the Trakya Yenişehir Cam San. A.Ş. Yenişehir Plant, the Trakya Cam San. A.Ş. Trakya Plant, the Autoglass Plant and the Polatlı Plant affiliated to the Group, and the resulting reports were shared with relevant units in 2014.
In keeping with the corporate values, the Flat Glass Group does not discriminate on the basis of race, religion, language or sex; it respects diversity and differences, and requires strict adherence to the Şişecam Code of Ethics in all work processes.
17
RISK MANAGEMENT AND INTERNAL CONTROL SYSTEM
Corporate StructureThe “Early Detection of Risk Committee” and the “Audit Committee”, set up under the Board of Directors, are responsible for handling the Company’s risk management and internal audit activities. Committee meetings are held regularly to discuss the predetermined agenda items. Decisions passed and proposals presented in the meetings are recorded, and regularly reported to the Board of Directors. The Board of Directors closely monitors the risk management and internal audit activities carried out across the Company via the committees, and provides the necessary guidance.
The global crisis that has been ongoing since 2008, coupled with the geopolitical risks that have become tangible in geographies where the Company operates, promoted the environment of uncertainty to its highest extent. This uncertainty environment, combined with the competition that got fiercer with the efforts to get a share from contracting markets, increasing customer expectations, tightened regulatory requirements and developments in corporate governance, added to the sensitivity of risk perceptions of all stakeholders. This situation led to a stricter questioning of the efficiency of risk management and internal audit processes during 2014. Risk Management and Internal Audit functions at the Şişecam Group were separated and organized under distinct divisions in order to devote greater concentration to the management of these two topics making up the key components of Corporate Governance.
Risk management and internal audit activities are being carried out with the aim of providing the maximum risk assurance to stakeholders, protecting the tangible and intangible assets of
the Company, minimizing the losses caused by uncertainties and maximizing benefit from potential opportunities. During the course of these activities, communication between the internal audit and risk management functions is maintained at the maximum level and the activities are directed toward the goal of supporting the decision-making process and increasing management efficiency.
Risk ManagementAt the Group, risk management activities are carried out with a holistic and proactive approach based on enterprise risk management principles. The risk catalogues prepared are periodically updated with the participation of the employees and the risks are ranked according to their importance. By taking the risk appetite of the Board of Directors into account, with regard to analyzed risks, the strategies to be implemented are established and the necessary measures are taken.
These risk management activities are not only limited to financial and strategic risks, but also cover operational risks such as production, sales, occupational health and safety, emergency management and information technologies.
Internal AuditThe objectives of the internal audit activities, which have been carried out within the Group for many years within an established and corporate structure, are to assist the healthy development of the Group’s companies, to ensure uniformity in practices, and to assure execution of efficient, constructive and productive controls and timely implementation of corrective actions to guarantee that all activities are performed in compliance with the legislation. The results of the risk management activities are also used in internal audit activities, which are carried out in accordance with the annual audit program, and in the preparation of the audit program, meaning that “risk-based audit” practices are implemented.
TRAKYA CAM SANAYİİ 2014 ANNUAL REPORT18
TRAKYA CAM SANAYİİ A.Ş. CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD FROM JANUARY 1, 2014 TO DECEMBER 31, 2014 WITH INDEPENDENT AUDITOR’S REPORT
20 TRAKYA CAM SANAYİİ 2014 ANNUAL REPORT
CONVENIENCE TRANSLATION INTO ENGLISH OF INDEPENDENT AUDITOR’S REPORTORIGINALLY ISSUED IN TURKISH
INDEPENDENT AUDITOR’S REPORT
To the Board of Directors of Trakya Cam Sanayii A.Ş.;Report on the Consolidated Financial Statements
1.WehaveauditedtheaccompanyingconsolidatedfinancialstatementsofTrakyaCamSanayiiA.Ş.(the“Company”)anditsSubsidiaries(collectively referred toas the “Group”),whichcomprise theconsolidatedstatementof financialpositionasat31December2014andtheconsolidatedstatementofprofitorloss,consolidatedstatementofothercomprehensiveincome,consolidatedstatementofchangesinequityandconsolidatedstatementofcashflowsfortheperiodthenendedandasummaryofsignificantaccountingpoliciesand other explanatory notes.
Management’s Responsibility for the Consolidated Financial Statements
2.The Group’s management is responsible for the preparation and fair presentation of these consolidated financial statements inaccordancewithTurkishAccountingStandardsandforsuchinternalcontrolasmanagementdeterminesisnecessarytoenablethepreparationofconsolidatedfinancialstatementsthatarefreefrommaterialmisstatement,whetherduetofraudorerror.
Independent Auditor’s Responsibility
3.Ourresponsibilityistoexpressanopinionontheseconsolidatedfinancialstatementsbasedonouraudit.OurauditwasconductedinaccordancewithstandardsonauditingissuedbytheCapitalMarketsBoardofTurkeyandIndependentAuditingStandardsthatpartofTurkishStandardsonAuditingissuedbythePublicOversightAccountingandAuditingStandardsAuthority.Thosestandardsrequirethatethicalrequirementsarecompliedwithandthattheauditisplannedandperformedtoobtainreasonableassurancewhethertheconsolidated financial statements are free from material misstatement.
An independent audit involves performing procedures to obtain evidence about the amounts and disclosures in the consolidatedfinancialstatements.Theproceduresselecteddependonindependentauditor’sprofessionaljudgment,includingtheassessmentoftherisksofmaterialmisstatementoftheconsolidatedfinancialstatements,whetherduetoerrororfraud.Inmakingthoseriskassessments,theindependentauditorconsidersinternalcontrolrelevanttotheentity’spreparationandfairpresentationoftheconsolidatedfinancialstatementsinordertodesignauditproceduresthatareappropriateinthecircumstances,butnotforthepurposeofexpressinganopinion on the effectiveness of the entity’s internal control. An independent audit includes also evaluating the appropriateness ofaccountingpoliciesusedandthereasonablenessofaccountingestimatesmadebymanagement,aswellasevaluatingtheoverallpresentation of the consolidated financial statements.
Webelievethattheindependentauditevidencewehaveobtainedduringourauditissufficientandappropriatetoprovideabasisforour audit opinion.
21
Opinion
4.Inouropinion,theconsolidatedfinancialstatementspresentfairly,inallmaterialrespects,thefinancialpositionofTrakyaCamSanayiiA.Ş. and its Subsidiaries as at 31 December 2014 and their financial performance and cash flows for the period then ended inaccordancewithTurkishAccountingStandards.
Other Responsibilities Arising From Regulatory Requirements
5.Inaccordancewithsubparagraph4ofArticle398oftheTurkishCommercialCode(“TCC”)No:6102;auditor’sreportontheearlyriskidentificationsystemandcommitteehasbeensubmittedtotheCompany’sBoardofDirectorson27February2015.
6.Inaccordancewithsubparagraph4ofArticle402oftheTCC;nosignificantmatterhascometoourattentionthatcausesustobelievethat theCompany’sbookkeepingactivities for theperiod1January -31December2014 isnot incompliancewith thecodeandprovisionsoftheCompany’sarticlesofassociationinrelationtofinancialreporting.
7.Inaccordancewithsubparagraph4ofArticle402oftheTCC;theBoardofDirectorssubmittedtousthenecessaryexplanationsandprovidedrequireddocumentswithinthecontextofaudit.
BaşaranNasBağımsızDenetimve
SerbestMuhasebeciMaliMüşavirlikA.Ş.
amemberof
PricewaterhouseCoopers
GökhanYüksel,SMMM
Partner
Istanbul,27February2015
22 TRAKYA CAM SANAYİİ 2014 ANNUAL REPORT
TRAKYA CAM SANAYİİ A.Ş. Convenience Translation Into English of Consolidated Financial Statements Originally Issued In Turkish (Note 2.8)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AT 31 DECEMBER 2014 AND 2013(Amounts are expressed in Turkish Lira (“TRY”) unless otherwise indicated.)
ASSETS Notes31 December
201431 December
2013
Current Assets 1.859.827.014 1.482.943.622Cash and cash equivalents 6 1.126.878.527 805.530.347Tradereceivables 10,37 317.432.715 332.064.441
- Due from related parties 37 1.983.358 9.130.568- Other trade receivables 10 315.449.357 322.933.873
Otherreceivables 11,37 19.438.722 41.200.819- Due from related parties 37 15.175.108 35.541.122- Other receivables 11 4.263.614 5.659.697
Inventories 13 320.377.048 239.525.886Prepaidexpenses 14 21.726.569 17.755.749Othercurrentassets 26 47.319.897 39.939.692
1.853.173.478 1.476.016.934Assets held for sale 34 6.653.536 6.926.688
Non - Current Assets 2.523.918.995 2.402.129.066Financialassets 7 219.278.575 158.747.713Otherreceivables 11 791.083 865.507Investmentsinassociatesandjointventures 16 617.439.457 599.847.755Tangibleassets 18 1.522.980.021 1.490.735.645Intangibleassets 19,20 42.700.491 49.126.062
- Goodwill 20 20.258.514 21.148.520- Other intangible assets 19 22.441.977 27.977.542
Prepaidexpenses 14 38.275.452 62.609.203Deferredtaxassets 35 82.453.916 40.197.181
TOTAL ASSETS 4.383.746.009 3.885.072.688
23
TRAKYA CAM SANAYİİ A.Ş. Convenience Translation Into English of Consolidated Financial Statements Originally Issued In Turkish (Note 2.8)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AT 31 DECEMBER 2014 AND 2013(Amounts are expressed in Turkish Lira (“TRY”) unless otherwise indicated.)
LIABILITIES Notes31 December
201431 December
2013
Current Liabilities 713.708.813 518.457.308Shorttermborrowings 8 133.789.755 83.589.014Shorttermportionoflongtermborrowings 8 132.398.867 94.542.017Tradepayables 10,37 177.844.570 168.980.784
- Due to related parties 37 36.633.020 35.775.633- Other trade payables 10 141.211.550 133.205.151
OtherPayables 11,37 176.251.207 63.852.737- Due to related parties 37 169.200.124 54.042.548- Other payables 11 7.051.083 9.810.189
Deferredincome 14 7.457.311 13.472.586Currentincometaxliabilities 35 19.320.575 19.566.324Short term provisions 22,24 38.265.733 43.749.813
- Provisions for employee benefits 24 1.380.496 1.088.618- Other short term provisions 22 36.885.237 42.661.195
Othercurrentliabilities 26 28.380.795 30.704.033
Non - Current Liabilities 1.132.936.011 1.034.497.455Longtermborrowings 8 975.860.084 922.273.376OtherPayables 11 103.919 1.312.534Deferredincome 14 39.290.985 -Long term provisions 24 54.781.311 56.619.859Deferredtaxliabilities 35 62.899.712 54.291.686
EQUITY 27 2.537.101.185 2.332.117.925Shareholders’ Equity 27 2.332.305.486 2.147.644.833Paid-insharecapital 739.000.000 710.000.000Adjustmenttosharecapital 5.576.528 5.576.528Share premium 22.703 22.703Othercomprehensiveincome/expensenottobereclassifiedtoprofitorloss 51.303.214 47.337.535
- Gain on revaluation and remeasurement 53.974.897 53.974.897- Funds for actuarial gain/(loss) on employee termination benefits (2.671.683) (6.637.362)
Othercomprehensiveincome/expensetobereclassifiedtoprofitorloss 198.793.368 272.327.509- Currency translation differences 20.535.520 182.173.376- Financial asset revaluation fund 178.257.848 90.154.133
Restricted reserves 127.750.662 123.067.922Retained earnings 926.629.896 872.118.925Netprofitfortheyear 283.229.115 117.193.711
Non - controlling interest 27 204.795.699 184.473.092
TOTAL LIABILITIES AND EQUITY 4.383.746.009 3.885.072.688
24 TRAKYA CAM SANAYİİ 2014 ANNUAL REPORT
TRAKYA CAM SANAYİİ A.Ş. Convenience Translation Into English of Consolidated Financial Statements Originally Issued In Turkish (Note 2.8)
Notes
1 January -31 December
2014
1 January -31 December
2013Revenue 28 2.018.617.608 1.488.093.721Costofsales(-) 28 (1.452.339.208) (1.066.143.736)
Gross profit from trading activities 566.278.400 421.949.985
Generalandadministrativeexpenses(-) 29 (167.079.190) (146.722.025)Marketingexpenses(-) 29 (208.483.006) (150.296.217)Researchanddevelopmentexpenses(-) 29 (18.453.814) (15.073.235)Otheroperatingincome 31 88.282.255 72.601.483Otheroperatingexpenses(-) 31 (31.832.477) (24.995.853)Investmentsinassociatesandjointventures 16 1.471.524 (5.257.958)
Operating profit 230.183.692 152.206.180Incomefrominvestingactivities 32 140.719.968 10.111.492Expensesfrominvestingactivities(-) 32 (4.752.877) (3.111.643)
Operating profit before financial income and expense 366.150.783 159.206.029
Financialincome 33 430.378.643 600.548.767Financialexpenses(-) 33 (480.057.410) (606.976.586)
Profit before tax from continued operations 316.472.016 152.778.210
Tax expense from continuing operations 35 (20.359.950) (28.134.315)Taxes on income 35 (60.295.037) (40.045.710)Deferredtaxincome 35 39.935.087 11.911.395
Profit for the year 296.112.066 124.643.895
Attributable to: -Noncontrollinginterest 27 12.882.951 7.450.184
- Equity holders of the parent 27 283.229.115 117.193.711
Earnings per share 36 0,3833 0,1586
CONSOLIDATED STATEMENTS OF INCOME FOR THE YEARS ENDED 31 DECEMBER 2014 AND 2013(Amounts are expressed in Turkish Lira (“TRY”) unless otherwise indicated.)
25
TRAKYA CAM SANAYİİ A.Ş. Convenience Translation Into English of Consolidated Financial Statements Originally Issued In Turkish (Note 2.8)
Notes
1 January-31 December
2014
1 January-31 December
2013Profit for the period 296.112.066 124.643.895
Other comprehensive income
Items not to be reclassified to profit 27 3.965.679 -
Shareofothercomprehensiveincomeitemsnottobereclassifiedtoprofitorlossattributabletoinvestmentsaccounted 4.957.099 -Deferredtaxgainloss (991.420) -
Items to be reclassified to profit or loss 27 (73.037.025) 155.220.339
Currency translation differences (161.140.740) 138.530.457Gainsonrevaluationofavailablefor sale financial assets 92.740.753 17.568.297Deferredtaxgainloss (4.637.038) (878.415)
Other Comprehensive Income (69.071.346) 155.220.339
Total Comprehensive Income 227.040.720 279.864.234Attributable toNon-controllinginterest 13.380.067 22.125.438
Equity holders of parent 213.660.653 257.738.796Earnings per share 36 0,2891 0,3488
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED 31 DECEMBER 2014 AND 2013(Amounts are expressed in Turkish Lira (“TRY”) unless otherwise indicated.)
26 TRAKYA CAM SANAYİİ 2014 ANNUAL REPORT
Oth
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--
--
--
13.461.008
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(75.656.305)
--
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e-
--
--
123.855.203
16.689.882
--
117.193.711
257.738.796
22.125.438
279.864.234
CapitalIncrease
16.320.000
--
--
--
-(16.320.000)
--
79.084.420
79.084.420
Dividentpaid
--
--
--
--
(16.550.000)
-(16.550.000)
(6.315.750)
(22.865.750)
Increases/(decreases)due
tochangesinownership
rateofsubsidiariesthatdo
not r
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t in
cont
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--
--
--
-(25.137)
-(25.137)
(14.110.200)
(14.135.337)
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710.
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922
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7.64
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-3.965.679
(161.637.856)
88.103.715
--
283.229.115
213.660.653
13.380.067
227.040.720
CapitalIncrease
29.000.000
--
--
--
-(29.000.000)
--
15.363.540
15.363.540
Dividentpaid
--
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(29.000.000)
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(8.421.000)
(37.421.000)
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185
Note27setsoutdisclosuresforthechangesintheequity.
CON
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27
TRAKYA CAM SANAYİİ A.Ş. Convenience Translation Into English of Consolidated Financial Statements Originally Issued In Turkish (Note 2.8)
Notes
1 January-31 December
2014
1 January-31 December
2013
A. CASH FLOWS FROM OPERATING ACTIVITIES 269.048.776 296.168.671
Net profit for the period 27 296.112.066 124.643.895
Adjustments to reconcile net profit to net cash provided by operating activities 87.562.927 164.637.332-Depreciationandamortization 18,19 150.622.974 109.382.987-Adjustmentsforimpairments/reversals 10,11,13 5.613.911 2.260.182-Changesinprovisions 22,24 3.747.961 19.815.560-Interestincomeandexpenses 8,31,33 20.259.062 8.038.648-Unrealizedexchangeloss/(gain) 31,33 24.904.771 (1.061.008)-Incomefromassociates(net) 16 (1.471.524) 5.257.958-Currentincometaxaccrual 35 20.359.950 28.134.315-Lossesfromsalesoftangibleassets 31,32 (129.382.965) (2.246.899)-Dividendincome 32 (6.584.126) (4.752.950)-Changesinotherincomeaccruals 26 (507.087) (191.461)
Changes in net working capital 5.181.441 57.815.818-Increases/decreasesininventories 13 (83.756.976) (13.467.283)-Increases/decreasesintradereceivables 10,37 11.017.559 (5.942.155)-Increases/decreasesinotherreceivables 11,37 6.826.542 7.962.871-Increases/decreasesintradepayables 10,37 9.136.777 52.615.577-Increases/decreasesinotherpayables 11,14,26,37 106.383.195 (748.441)-Otherincreases/decreasesinnetworkingcapital 14,26 (44.425.656) 24.321.937-Cashflowfromsalesofassetsheldforsale 32,34 - (6.926.688)
Cash flows from operating activities 388.856.434 347.097.045
-Interestpaid 8,31,33,37 (67.681.273) (29.229.062)-Interestreceived 31,33,37 14.388.612 11.025.963-Currentincometaxpaid 35 (60.540.786) (27.800.915)-Employmentterminationbenefitspaid 24 (5.974.211) (4.924.360)
CONSOLIDATED CASH FLOWS STATEMENTSFOR THE YEARS ENDED 31 DECEMBER 2014 AND 2013(Amounts are expressed in Turkish Lira (“TRY”) unless otherwise indicated.)
28 TRAKYA CAM SANAYİİ 2014 ANNUAL REPORT
TRAKYA CAM SANAYİİ A.Ş. Convenience Translation Into English of Consolidated Financial Statements Originally Issued In Turkish (Note 2.8)
Notes
1 January-31 December
2014
1 January-31 December
2013
B. CASH FLOWS FROM INVESTING ACTIVITIES (158.097.134) (651.248.774)-Acquisitionofadditionalsharesoffinancialassets 3 - 9.773.254-Cashinflowsfromthesaleofsharesinotherentitiesorfundsordebtinstruments 7,16 161.949.397 (116.979.829)-Proceedsfromsaleoftangibleandintangibleassets 18,19,32 9.120.166 10.781.202-Purchasesoftangibleandintangibleassets 18,19 (417.553.049) (613.364.460)-Advancesgiven 14 (101.191.139) (65.224.947)-Proceedsfromadvancesgiven 14 164.126.060 100.727.364-Dividendsreceivedfromassociates 16,32 7.782.436 5.785.850-Interestreceived 6,33 19.866.796 16.178.581-Othercashinflows/outflows 3,10,11,26 (2.197.801) 1.074.211
C. CASH FLOWS FROM FINANCING ACTIVITIES 157.157.986 707.516.237-Proceedsfromfinancialborrowings 8 360.944.281 753.014.008-Repaymentsoffinancialborrowings 8 (180.221.871) (91.265.244)-Financialleasespaid 8 (1.506.964) (10.451.197)-Dividendspaid 27 (37.421.000) (22.865.750)-Capitalcontributionofnon-controllinginterests 27 15.363.540 79.084.420
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS BEFORE CURRENCY TRANSLATION DIFFERENCES (A+B+C) 268.109.628 352.436.134
D. EFFECTS OF UNREALIZED EXCHANGE LOSS/(GAIN) ON CASH AND CASH EQUIVALENTS 53.742.531 154.211.863-Effectofchangeintheexchangeratesoncashandcashequivalents 31,33 49.474.976 136.245.430-Effectofcurrencytranslationdifference 27 4.267.555 17.966.433
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS (A+B+C+D) 321.852.159 506.647.997
E. CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR 6 804.571.321 297.923.324
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR (A+B+C+D+E) 6 1.126.423.480 804.571.321
CONSOLIDATED CASH FLOWS STATEMENTSFOR THE YEARS ENDED 31 DECEMBER 2014 AND 2013(Amounts are expressed in Turkish Lira (“TRY”) unless otherwise indicated.)
29
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED 31 DECEMBER 2014 AND 2013(Amounts are expressed in Turkish Lira (“TRY”) unless otherwise indicated.)
TRAKYA CAM SANAYİİ A.Ş. Convenience Translation Into English of Consolidated Financial Statements Originally Issued In Turkish (Note 2.8)
1. GROUP’S ORGANISATION AND NATURE OF OPERATIONS
TrakyaCamGroup (the “Group”) consistsof aholdingcompany,TrakyaCamSanayiiA.Ş. (“Company”) and16 subsidiaries, 3 jointmanagingcompaniesand3jointventures.
TrakyaCamSanayiiA.Ş.wasestablishedon17January1978andstartedproductionin1981.TheCompanyisasubsidiaryofTürkiyeŞişeveCamFabrikalarıA.Ş.Group(“ŞişecamHolding”)whichisunderthecontrolofTürkiyeİşBankasıA.Ş.TheCompanyproducesandsellsbasic flatglass,patternedglass,mirror,automotiveglass, temperedglass, laminatedglass,coatedglass,processedglassandglasswareinitsproductionfacilitiesatKırklareli(Lüleburgaz),Mersin(Tarsus),Bursa(Yenişehir).TherearealsooverseasfactoriesatBulgaria (Targovishte),Germany(BesigheimandAurach),Slovakia (Malacky),Hungary (Aszod),Romania (Buzau),Egypt (Sukhna)andIndia(Halol).
ThesharesoftheCompanyhavebeenpubliclytradedontheIstanbulStockExchange(“ISE”)since5November1990.
The Head Office and the Shareholder Structure of the Company
TheshareholderstructureoftheCompanyispresentedinNote27andthecontactinformationisasbelow:
İşKuleleriKule3,4.Levent34330,Beşiktaş/Istanbul/Turkey
Phone: +902123505050
Fax : +902123505080
http : //www.trakyacam.com.tr
Trade register Information of the Company
TheCompanyisregisteredinTurkeywitharegisternumberof151415.
Details of the number of personnel are as follows:
31 December
201431 December
2013Personnelchargedbymonthlypay 1.728 1.496Personnelchargedbyhour 4.180 3.899
Total 5.908 5.395
Totalpersonneldiscussedincludes1.317personnelofTrakyaGlassBulgariaEADfloarglassoperationsandHNGFloatGlassLimited(2013:1.225employees).
30 TRAKYA CAM SANAYİİ 2014 ANNUAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED 31 DECEMBER 2014 AND 2013(Amounts are expressed in Turkish Lira (“TRY”) unless otherwise indicated.)
TRAKYA CAM SANAYİİ A.Ş. Convenience Translation Into English of Consolidated Financial Statements Originally Issued In Turkish (Note 2.8)
Consolidated subsidiaries, joint ventures and associates:
Thesubsidiaries, jointventuresandassociatesof theGroup, theircountryof incorporation,natureofbusinessandtheproportionofownershipinterestandtheeffectiveinterestoftheCompanyinthesesubsidiariesareasfollows.
Subsidiaries:
Company Name Nature of business Country of incorporationTrakyaYenişehirCamSanayiiA.Ş. ProductionandSaleofFlat,Coatedand
LaminatedGlassTurkey
TrakyaPolatlıCamSanayiiA.Ş. ProductionandSaleofFlatGlass TurkeyTrakyaInvestmentB.V. FinanceandInvestmentCompany NetherlandsTrakyaGlassRusAO(*) ProductionandSaleofFlatGlass RussiaTRSGGlassHoldingB.V. FinanceandInvestmentCompany NetherlandsTRSGAutoglassHoldingB.V. FinanceandInvestmentCompany NetherlandsAutomotiveGlassAllianceRusAO(*) AutomotiveGlassCompany RussiaGlasscorpS.A ProductionandSaleofAutomotiveGlassand
HomeAppliancesGlassRomania
TrakyaGlassRusTradingOOO ImportandSaleServices RussiaAutomotiveGlassAllianceRusTradingOOO ImportandSaleServices RussiaFritzHoldingGMBH Commercial Activity GermanyRFspol,s.r.o. ProductionandSaleofGlassEncapsulation,
PlasticProcessSlovakia
RichardFritzPrototype+SparePartsGmbH ProductionandSaleofGlassEncapsulation GermanyRichardFritzKft ProductionandSaleofGlassEncapsulation Hungary
(*)ThelegaltitleofTrakyaGlassRusZAOwaschangedasTrakyaGlassRusAO;AutomotiveGlassAllianceRusZAOwaschangedasAutomotiveGlassAllianceRuzAOon11December2014.
Jointly Managing Companies:
Company Name Nature of business Country of incorporation
TrakyaCamInvestmentB.V. FinanceandInvestment NetherlandsTrakyaGlassBulgariaEAD ProductionandSaleofFlatGlass,Mirror,
AutomotiveGlass,HomeAppliancesGlassBulgaria
HNGFloatGlassLimited ProductionandSaleofFlatGlass India
31
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED 31 DECEMBER 2014 AND 2013(Amounts are expressed in Turkish Lira (“TRY”) unless otherwise indicated.)
TRAKYA CAM SANAYİİ A.Ş. Convenience Translation Into English of Consolidated Financial Statements Originally Issued In Turkish (Note 2.8)
Subsidiaries:
Company Name Nature of business Country of incorporationÇayırovaCamSan.A.Ş. Commercial Activity (*) TurkeyCamişElektrikÜretimA.Ş. ProductionandSaleofElectricity TurkeySaintGobainGlassEgypt ProductionandSaleFlatGlass Egypt
(*)ÇayırovaCamSanA.Ş.isacompanythatleasespropertiesitownstotheGroupcompaniesandithasnoproductionandsalesactivity.
The subsidiaries, joint ventures and associates of theGroup their proportion of ownership interest and the effective interest of theCompanyinthesesubsidiariesareasfollows:
Subsidiaries:
31 December 2014
31 December 2013
Company NameDirect and Indirect ownership ratio %
Effective ownership ratio %
Direct and Indirect ownership ratio %
Effective ownership ratio %
TrakyaYenişehirCamSanayiiA.Ş. 85,00 85,00 85,00 85,00TrakyaPolatlıCamSanayiiA.Ş. 85,00 84,90 85,00 84,90TrakyaInvestmentB.V. 100,00 100,00 100,00 100,00TrakyaGlassRusAO(***) 100,00 70,00 100,00 70,00TRSGGlassHoldingB.V. 70,00 70,00 70,00 70,00TRSGAutoglassHoldingB.V. 100,00 100,00 100,00 100,00AutomotiveGlassAllianceRusAO(***) 100,00 100,00 100,00 100,00GlassCorpS.A 90,00 90,00 90,00 90,00TrakyaGlassRusTradingOOO 100,00 70,00 100,00 70,00AutomotiveGlassAllianceRusTradingOOO 100,00 100,00 100,00 100,00FritzHoldingGMBH 100,00 100,00 100,00 100,00RFspol,s.r.o. 100,00 100,00 100,00 100,00RichardFritzPrototype+SparePartsGmbH 100,00 100,00 100,00 100,00RichardFritzKft 100,00 100,00 100,00 100,00RichardFritz,Inc.(**) - - 100,00 100,00FritzBeteiligungsGmbH(**) - - 100,00 100,00RichardFritzGmbH&Co.KG(**) - - 100,00 100,00TrakyaGlassKuban(*) - - 100,00 100,00
(*)TrakyaGlassKubanOOOthathasnooperationshasbeenliquidatedon14January2014.(**)MergedwithFritzHoldingGmbhon21September2014.(***)ThelegaltitleofTrakyaGlassRusZAOwaschangedasTrakyaGlassRusAO;AutomotiveGlassAllianceRusZAOwaschangedasAutomotiveGlassAllianceRuzAOon11December2014.
32 TRAKYA CAM SANAYİİ 2014 ANNUAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED 31 DECEMBER 2014 AND 2013(Amounts are expressed in Turkish Lira (“TRY”) unless otherwise indicated.)
TRAKYA CAM SANAYİİ A.Ş. Convenience Translation Into English of Consolidated Financial Statements Originally Issued In Turkish (Note 2.8)
Joint ventures
31 December 2014 31 December 2013
Company Name
Direct and indirect
ownership (%)Effective
ownership (%)
Direct and indirect
ownership (%)Effective
ownership (%)TrakyaCamInvestmentB.V.(*) 70,00 70,00 70,00 70,00TrakyaGlassBulgariaEAD(*) 70,00 70,00 70,00 70,00HNGFloatGlassLimited 50,00 50,00 50,00 50,00
(*)TheCompanyhasglasswareproductionsoperatedbyGlasswareGroup.TrakyaGlassLogisticsEAD,jointventureoftheGroupoperatesin logisticsector,100%ofshareswereholdbyTrakyaGlassBulgariaEAD,anotherjointventureoftheGrouphasceaseditsoperationsandmergedwithTrakyaGlassBulgariaEADat12September2013.
Subsidiaries
31 December 2014 31 December 2013
Company Name
Direct and indirect
ownership (%)Effective
ownership (%)
Direct and indirect
ownership (%)Effective
ownership (%)ÇayırovaCamSan.A.Ş. 28,10 28,10 28,10 28,10CamişElektrikÜretimA.Ş. 34,40 34,40 34,40 34,40SaintGobainGlassEgyptS.A.E 30,00 30,00 30,82 30,82
2. BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS
2.1. Basis of Presentation
Theaccompanyingconsolidated financialstatementsareprepared inaccordancewithCommuniquéSerial II,No:14.1, “PrinciplesofFinancialReportinginCapitalMarkets”(“theCommuniqué”)publishedintheOfficialGazettenumbered28676on13June2013.AccordingtoArticle5oftheCommuniqué,consolidatedfinancialstatementsarepreparedinaccordancewiththeTurkishAccountingStandardsissued by PublicOversight Accounting and Auditing Standards Authority (“POAASA”). TAS contains Turkish Accounting Standards,TurkishFinancialReportingStandards(“TFRS”)anditsaddendumandinterpretations(“IFRIC”).
IncompliancewiththeTAS34,entitieshavepreferenceinpresentingtheirinterimconsolidatedfinancialstatementswhetherfullsetorcondensed.Inthisframework,Grouppreferredtopresentitsinterimconsolidatedfinancialstatementsinfullset.ThefinancialstatementsoftheconsolidatedfinancialstatementsoftheGrouparepreparedaspertheCMBannouncementof7June2013relatingtofinancialstatementspresentations.Comparativefiguresarereclassified,wherenecessary,toconformtochangesinthepresentationofthecurrentyear’sconsolidatedfinancialstatements.
Inaccordancewith theCMB’s resolutionNo:11/367 issuedon17March2005,companiesoperating inTurkeywhichprepare theirfinancialstatements inaccordancewiththeCMBAccountingStandards(includingtheapplicationof IFRS)arenotsubjectto inflationaccountingeffectivefrom1January2005.Therefore,asof1January2005,IAS29“FinancialReportinginHyperinflationaryEconomies”isnotappliedintheaccompanyingconsolidatedfinancialstatements.Hyperinflationimpactonthepaid-incapitaloftheCompanywasaccountedforin“adjustmentstosharecapital”undershareholders’equity.
TheCompany(anditssubsidiariesandJointVenturesregisteredinTurkey)maintainsitsaccountingrecordsandpreparesitsstatutoryfinancial statements inaccordancewith theTurkishCommercialCode (the “TCC”), tax legislationand theuniformchartofaccountsissuedbytheMinistryofFinance.Subsidiaries,jointventuresandassociatesoperatinginforeigncountrieshavepreparedtheirstatutoryfinancialstatementsinaccordancewiththelawsandregulationsofthecountryinwhichtheyoperate.Theinterimconsolidatedfinancialstatements,exceptforthefinancialassetandliabilitiespresentedwiththeirfairvalues,aremaintainedunderhistoricalcostconversioninTRY.Theseinterimconsolidatedfinancialstatementsarebasedonthestatutoryrecords,whicharemaintainedunderhistoricalcostconversion,withtherequiredadjustmentsandreclassificationsreflectedforthepurposeoffairpresentationinaccordancewiththeTAS/TFRS.
PresentationandFunctionalCurrency
TheindividualfinancialstatementsofeachentityoftheGroup,arepresentedinthecurrencyoftheprimaryeconomicenvironmentinwhich theentityoperates (its functionalcurrency).For thepurposeof theconsolidated financialstatements, the resultsand financialpositionofeachentityareexpressedinTurkishLira(“TRY”),whichisthefunctionalandpresentationcurrencyoftheGroup.
33
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED 31 DECEMBER 2014 AND 2013(Amounts are expressed in Turkish Lira (“TRY”) unless otherwise indicated.)
TRAKYA CAM SANAYİİ A.Ş. Convenience Translation Into English of Consolidated Financial Statements Originally Issued In Turkish (Note 2.8)
PresentationofFinancialStatementsinHyperinflationaryPeriods
Inaccordancewith theCMB’s resolutionNo:11/367 issuedon17March2005,companiesoperating inTurkeywhichprepare theirfinancialstatements inaccordancewiththeCMBAccountingStandards(includingtheapplicationof IFRS)arenotsubjectto inflationaccountingeffectivefrom1January2005.Therefore,asof1January2005,IAS29“FinancialReportinginHyperinflationaryEconomies”isnotappliedintheaccompanyingconsolidatedfinancialstatements.Hyperinflationimpactonthepaid-incapitaloftheCompanywasaccountedforin“adjustmentstosharecapital”undershareholders’equity.
GoingConcern
Theconsolidatedfinancialstatementsincludingtheaccountsoftheparentcompany,itssubsidiaries,jointventuresandassociateshavebeenpreparedassumingthattheGroupwillcontinueasagoingconcernonthebasisthattheentitywillbeabletorealizeitsassetsanddischargeitsliabilitiesinthenormalcourseofbusiness.
Comparative information and correction of prior period financial statements
TheconsolidatedfinancialstatementsoftheGroupincludecomparativefinancialinformationtoenablethedeterminationofthefinancialpositionandperformance.Comparativefiguresarereclassified,wherenecessary,toconformtochangesinpresentationinthecurrentyear consolidated financial statements.
InaccordancewiththedecisiontakenintheCMBmeetingnumbered20/670heldon7June2013,andincompliantwiththeannouncementrelatedtotheformatoffinancialstatementsanditsaccompanyingnotes,comparativefigureshavebeenreclassifiedtoconformtothechanges in presentation in the current period.
TheGrouprestateditspriorperiods’consolidatedfinancialstatementsinaccordancewiththeamendmentsinIAS19“EmployeeBenefits”andIFRS11“JointArrangements”,whichareeffectivefrom1January2013.TheamendmentprovidestransitionreviewinIFRS10,11and12limitingtherequirementtoprovideadjustedcomparativeperiod.
TheImpactofAmendmentinIAS19“EmployeeBenefits
InaccordancewiththeamendmentintheStandard,whichiseffectivefrom1January2013,theactuarialgain/(loss)relatedtoemployeebenefitsarerequiredtobeaccountedforothercomprehensiveincome.
TheGroupaccountedtheactuarialgain/(loss)relatedtoemployeebenefitsforunderconsolidatedincomestatementuntil31December2012.TheGroupappliedtheamendmentStandardretrospectivelyinaccordancewiththerelatedchangesintheaccountingpoliciesandtheactuarialgain/(loss)disclosedintherelateddisclosureshavebeenreversedfromtheconsolidatedincomestatementandaccountedfor under other comprehensive income.
TheImpactofIFRS-11“JointArrangements”
Effectivefrom1January2013,thisstandardinvalidatedtheapplicationofIAS31“InterestinJointVentures”Thestandardsplitsthejointarrangementsintotwocategoriesasjointventuresandjointoperationsanditrequiresjointventurestobeaccountedforasassociates.
TheGroup’sinterestsinJointVentureswereaccountedforbywayof70%proportionateconsolidationasof31December2012.TheGroup’s JointVentures areTrakyaCam InvestmentB.V. andTrakyaGlassBulgariaEAD. In accordancewith the amendment in thestandard,theconsolidatedfinancialstatementswererestatedretrospectively.
Inaccordancewiththeamendmentinthisstandard,thedisclosuresof“RelatedPartyDisclosures”,“FinancialInstrumentsandFinancialRiskManagement”and“FinancialInstruments(FairValueandHedgeAccounting)”wererestatedretrospectively.
FinancialStatementsofForeignSubsidiariesandJointVentures
Financialstatementsofsubsidiaries,associatesand jointventuresoperating in foreigncountriesareprepared inaccordancewiththelegislation of the country inwhich they operate and assets and liabilities in financial statements prepared according to theGroup’saccountingpoliciesaretranslatedintoTRYfromtheforeignexchangerateatthebalancesheetdatewhereasincomeandexpensesaretranslatedintoTRYattheaverageforeignexchangerate.Exchangedifferencesarisingfromthetranslationoftheopeningnetassetsof foreign undertakings and differences between the average and balance sheet date rates are included in the currency translationdifferencesundershareholders’equity.
34 TRAKYA CAM SANAYİİ 2014 ANNUAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED 31 DECEMBER 2014 AND 2013(Amounts are expressed in Turkish Lira (“TRY”) unless otherwise indicated.)
TRAKYA CAM SANAYİİ A.Ş. Convenience Translation Into English of Consolidated Financial Statements Originally Issued In Turkish (Note 2.8)
ForeigncurrenciesandexchangeratesofthecountrieswhereasignificantportionoftheGroup’sforeignoperationsareperformedaresummarizedbelow:
31 December 2014 31 December 2013Currency Period End Period Average Period End Period AverageEuro 2,82070 2,90423 2,93650 2,52904BulgarianLev 1,44220 1,48491 1,50141 1,29308RussianRuble 0,04024 0,05756 0,06478 0,05935NewRumanianLeu 0,62601 0,64973 0,65397 0,56879EgyptianPounds 0,32661 0,30884 0,30915 0,27721IndianRupee 0,03662 0,03582 0,03448 0,03249HungarianForint 0,00896 0,00941 0,00989 0,00852
ConsolidationPrinciples
Theconsolidatedfinancialstatementsincludetheaccountsoftheparentcompanyonthebasissetoutinsectionsbelow.Thefinancialstatementsof thecompanies included in thescopeofconsolidationhavebeenpreparedasof thedateof theconsolidatedfinancialstatementsandhavebeenpreparedinaccordancewithCMBFinancialReportingStandardsapplyinguniformaccountingpoliciesandpresentation.Theresultsofsubsidiariesandjointventuresareincludedorexcludedfromtheireffectivedatesofacquisitionordisposalrespectively.
Subsidiaries
Controlisobtainedbycontrollingovertheactivitiesofanentity’sfinancialandoperatingpoliciesinordertobenefitfromthoseactivities.
Subsidiariesarecompaniesoverwhichtheparentcompanyhascapabilitytocontrolthefinancialandoperatingpoliciesforthebenefitofparentcompany,either(a)throughthepowertoexercisemorethan50%ofthevotingrightsrelatingtosharesinthecompaniesowneddirectlyandindirectlybyitself;or(b)althoughnothavingthepowertoexercisemorethan50%ofthevotingrights,otherwisehavingthepowertoexercisecontroloverthefinancialandoperatingpolicies.Theexistenceandeffectofpotentialvotingrightsthatarecurrentlyexercisableorconvertibleareconsideredwhenassessingwhetherthegroupcontrolsanotherentity.
ThetableinNote1setsoutallSubsidiariesincludedinthescopeofconsolidationandshowstheownershipandeffectiveinterestratesasat31December2014and31December2013.
SubsidiariesareconsolidatedfromthedateonwhichthecontrolistransferredtotheGroupandarenolongerconsolidatedfromthedatethatcontrolceases.Wherenecessary,accountingpoliciesforsubsidiarieshavebeenchangedtoensureconsistencywiththepoliciesadoptedbytheGroup.
TheresultofoperationsofSubsidiariesandJointVenturesareincludedorexcludedintheseconsolidatedfinancialstatementssubsequentto the date of acquisition or date of sale respectively.
Thebalancesheetsandthestatementsincomeofthesubsidiariesareconsolidatedonline-by-linebasisandthecarryingvalueoftheinvestmentheldbytheCompanyanditssubsidiariesiseliminatedagainsttherelatedequity.IntercompanytransactionsandbalancesbetweentheCompanyanditssubsidiariesareeliminatedduringtheconsolidation.Thecostof,andthedividendsarisingfrom,sharesheldbytheCompanyinitsSubsidiariesareeliminatedfromequityandincomefortheperiod,respectively.
Thenon-controllingshareholders’shareinthenetassetsandresultsofSubsidiariesfortheyearareseparatelyclassifiedasnon-controllinginterest in theconsolidatedbalancesheetsandstatementsof income.Thenon-controlling interestsconsistofshares fromthe initialbusinesscombinationsandthenon-controllingsharesfromthechangesinequityafterthebusinesscombinationsdate.Whenthelossesapplicabletothenon-controllingportionexceedthenon-controllinginterestintheequityofthesubsidiary,theexcesslossandthefurtherlossesapplicabletothenon-controllingarechargedagainstthenon-controllinginterest(Note2.5).
35
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED 31 DECEMBER 2014 AND 2013(Amounts are expressed in Turkish Lira (“TRY”) unless otherwise indicated.)
TRAKYA CAM SANAYİİ A.Ş. Convenience Translation Into English of Consolidated Financial Statements Originally Issued In Turkish (Note 2.8)
JointVentures
JointVenturesarecompaniesinrespectofwhichtherearecontractualarrangementsthroughwhichaneconomicactivityisundertakensubjecttojointcontrolbytheCompanyandoneormoreotherparties.TheCompanyexercisessuchjointcontrolthroughthepowertoexercisevotingrightsrelatingtoshares inthecompaniesasaresultofownership interestdirectlyandindirectlyheldby itself.ThetableinNote1setsoutallJointVenturesincludedinthescopeofconsolidationandshowstheirownershipandeffectiveinterestsasof31December2014and31December2013.JointVenturesareaccountedforunderequityaccountingmethod.
Associates
AssociatesarecompaniesinwhichtheGrouphastheinterestthatismorethan20%andlessthan50%oftheordinarysharecapitalheldforthelong-termandoverwhichasignificantinfluenceisexercised.Equitymethodisusedforaccountingofassociates
Unrealizedgainsontransactionsbetweenthegroupanditsassociatesareeliminatedtotheextentofthegroup’sinterestintheassociates.Whenthegroup’sshareoflossesinanassociateequalsorexceedsitsinterestintheassociate,includinganyotherunsecuredreceivablesorthesignificantinfluenceceasestheGroupdoesnotcontinuetoapplytheequitymethod,unlessithasincurredobligationsormadepaymentsonbehalfoftheassociate.Subsequenttothedateofthecaesuraofthesignificantinfluencetheinvestmentiscarriedeitheratfairvaluewhenthefairvaluescanbemeasuredreliablyorotherwiseatcostwhenthefairvaluescannotbereliablymeasured.
Available-for-SaleInvestments
Available-for-saleinvestments,inwhichtheGrouphascontrollinginterestsequaltoorabove20%,oroverwhichareeitherimmaterialorwhereasignificantinfluenceisnotexercisedbytheGroup,thatdonothavequotedmarketpricesinactivemarketsandwhosefairvaluescannotbereliablymeasuredarecarriedatcostlessanyprovisionforimpairment.
Available-for-saleinvestments,inwhichtheGrouphastheintereststhatisbelow20%orinwhichasignificantinfluenceisnotexercisedbytheGroup,thathavequotedmarketpricesinactivemarketsandwhosefairvaluescanbereliablymeasured,arecarriedtothefinancialstatements at their fair value.
2.2 Statement of Compliance to IAS/TAS
TheGrouppreparedtheaccompanyingconsolidatedfinancialstatementsasof31December2014inaccordancewithCommuniquéSerial II,No:14.1and the relatedannouncements.Theaccompanyingconsolidated financialstatementsandexplanatorynotesweredisclosedincompliantwithreportingformatsrecommendedbyCMB,includingthecompulsoryexplanations.
2.3 Significant Changes in Accounting Policies
Materialchangesinaccountingpoliciesarecorrected,retrospectively;byrestatingthepriorperiods’consolidatedfinancialstatements.Theaccountingpoliciesusedinthepreparationoftheseconsolidatedfinancialstatementsfortheperiodended31December2014areconsistentwiththoseusedinthepreparationoffinancialstatementsfortheyearended31December2013.
2.4 Restatement and Errors in the Accounting Policies and Estimates
Theeffectofchangesinaccountingestimatesaffectingthecurrentperiodisrecognizedinthecurrentperiod;theeffectofchangesinaccountingestimatesaffectingcurrentandfutureperiodsisrecognizedinthecurrentandfutureperiods.Theaccountingestimatesusedinthepreparationoftheseconsolidatedfinancialstatementsfortheperiodended31December2014areconsistentwiththoseusedinthepreparationoffinancialstatementsfortheyearended31December2013.
Materialchangesinaccountingpoliciesormaterialerrorsarecorrected,retrospectivelybyrestatingthepriorperiodconsolidatedfinancialstatements.
36 TRAKYA CAM SANAYİİ 2014 ANNUAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED 31 DECEMBER 2014 AND 2013(Amounts are expressed in Turkish Lira (“TRY”) unless otherwise indicated.)
TRAKYA CAM SANAYİİ A.Ş. Convenience Translation Into English of Consolidated Financial Statements Originally Issued In Turkish (Note 2.8)
2.5 Amendments in International Financial Reporting Standards (“TFRS”)
TheGrouphasappliednewstandards,amendmentsand interpretations toexistingstandardspublishedby IASBand IFRICthatareeffectiveasat1January2014andarerelevanttotheGroup’soperations.TherearenorelevantamendmentsorinterpretationsfortheGroupwhichhavebeenenforcedasof1January2014andininterimperiodssubsequentto31December2014.
a. The new standards, amendments and interpretations which are effective for the financial statements as of 31 December 2014:
• AmendmenttoIAS32,‘Financialinstruments:Presentation’,onoffsettingfinancialassetsandfinancialliabilities,effectivefromannualperiodsbeginningonorafter1January2014.ThisamendmentupdatestheapplicationguidanceinIAS32,‘Financial instruments:Presentation’,toclarifysomeoftherequirementsforoffsettingfinancialassetsandfinancialliabilitiesonthebalancesheet.
• AmendmentstoIAS36,‘Impairmentofassets’,effectivefromannualperiodsbeginningonorafter1January2014.Theseamendmentsaddressthedisclosureofinformationabouttherecoverableamountofimpairedassetsifthatamountisbasedonfairvaluelesscostsof disposal.
• Amendment to IAS 39 ‘Financial instruments: Recognition andmeasurement’, on novation of derivatives and hedge accounting,effective fromannualperiodsbeginningonorafter1January2014.Thesenarrow-scopeamendmentsallowhedgeaccounting tocontinueinasituationwhereaderivative,whichhasbeendesignatedasahedginginstrument
• IFRIC21,‘Levies’,effectivefromannualperiodsbeginningonorafter1January2014.ThisinterpretationisonIAS37,‘Provisions,contingentliabilitiesandcontingentassets’.IAS37setsoutcriteriafortherecognitionofaliability,oneofwhichistherequirementfortheentitytohaveapresentobligationasaresultofapastevent(knownasanobligatingevent).Theinterpretationclarifiesthattheobligatingeventthatgivesrisetoaliabilitytopayalevyistheactivitydescribedintherelevantlegislationthattriggersthepaymentofthe levy.
• AmendmentstoIFRS10,‘Consolidatedfinancialstatements’,IFRS12andIAS27forinvestmententities,effectivefromannualperiodsbeginningonorafter1January2014.Theseamendmentsmeanthatmanyfundsandsimilarentitieswillbeexemptfromconsolidatingmostoftheirsubsidiaries.Instead,theywillmeasurethematfairvaluethroughprofitorloss.Theamendmentsgiveanexceptiontoentitiesthatmeetan‘investmententity’definitionandwhichdisplayparticularcharacteristics.ChangeshavealsobeenmadeIFRS12to introduce disclosures that an investment entity needs to make.
b. New IFRS standards, amendments and IFRICs effective after 1 January 2015
• Annualimprovements2012;effectivefromannualperiodsbeginningonorafter1July2014.Theseamendmentsincludechangesfromthe2010-12cycleoftheannualimprovementsproject,thataffect7standards:
• IFRS2,‘Share-basedpayment’
• IFRS3,‘BusinessCombinations’
• IFRS8,‘Operatingsegments’
• IFRS13,‘Fairvaluemeasurement’
• IAS16,‘Property,plantandequipment’andIAS38,‘Intangibleassets’
• ConsequentialamendmentstoIFRS9,‘Financialinstruments’,IAS37,‘Provisions,contingentliabilitiesandcontingentassets’,
• IAS39,Financialinstruments-Recognitionandmeasurement’
• Annualimprovements2013;effectivefromannualperiodsbeginningonorafter1July2014.Theseamendmentsincludechangesfromthe2011-2013cycleoftheannualimprovementsproject,thataffect4standards:
• IFRS1,‘Firsttimeadoption”
• IFRS3,‘Businesscombinations’
• IFRS13,‘Fairvaluemeasurement
• IAS40,‘Investmentproperty
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED 31 DECEMBER 2014 AND 2013(Amounts are expressed in Turkish Lira (“TRY”) unless otherwise indicated.)
TRAKYA CAM SANAYİİ A.Ş. Convenience Translation Into English of Consolidated Financial Statements Originally Issued In Turkish (Note 2.8)
• IFRS14 ‘Regulatorydeferral accounts’,effective fromannualperiodsbeginningonorafter1January2016. IFRS14, ‘Regulatorydeferralaccounts’permits first-timeadopters tocontinue to recogniseamounts related to rate regulation inaccordancewith theirpreviousGAAPrequirementswhentheyadoptIFRS.However,toenhancecomparabilitywithentitiesthatalreadyapplyIFRSanddonotrecognisesuchamounts,thestandardrequiresthattheeffectofrateregulationmustbepresentedseparatelyfromotheritems.
• AmendmenttoIFRS11,‘Jointarrangements’onacquisitionofaninterestinajointoperation,effectivefromannualperiodsbeginningonorafter1January2016.Thisamendmentaddsnewguidanceonhowtoaccountfortheacquisitionofaninterestinajointoperationthatconstitutesabusiness.Theamendmentsspecifytheappropriateaccountingtreatmentforsuchacquisitions.
• IFRS15 ‘Revenue fromcontractswith customers’, effective fromannual periodsbeginningonor after 1 January2017. IFRS15,‘Revenuefromcontractswithcustomers’isaconvergedstandardfromtheIASBandFASBonrevenuerecognition.Thestandardwillimprovethefinancialreportingofrevenueandimprovecomparabilityofthetoplineinfinancialstatementsglobally.
• IFRS9‘Financialinstruments’,effectivefromannualperiodsbeginningonorafter1January2018.ThisstandardreplacestheguidanceinIAS39.Itincludesrequirementsontheclassificationandmeasurementoffinancialassetsandliabilities;italsoincludesanexpectedcredit losses model that replaces the current incurred loss impairment model.
• AmendmenttoIAS16,‘Property,plantandequipment’andIAS38,‘Intangibleassets’,ondepreciationandamortisation,effectivefromannualperiodsbeginningonorafter1January2016.InthisamendmenttheIASBhasclarifiedthattheuseofrevenuebasedmethodstocalculatethedepreciationofanassetisnotappropriatebecauserevenuegeneratedbyanactivitythatincludestheuseofanassetgenerallyreflectsfactorsotherthantheconsumptionoftheeconomicbenefitsembodiedintheasset.TheIASBhasalsoclarifiedthatrevenueisgenerallypresumedtobeaninappropriatebasisformeasuringtheconsumptionoftheeconomicbenefitsembodiedinanintangibleasset.
• AmendmenttoIAS19regardingdefinedbenefitplans,effectivefromannualperiodsbeginningonorafter1July2014.Thesenarrowscopeamendmentsapplytocontributionsfromemployeesorthirdpartiestodefinedbenefitplans.Theobjectiveoftheamendmentsistosimplifytheaccountingforcontributionsthatareindependentofthenumberofyearsofemployeeservice,forexample,employeecontributionsthatarecalculatedaccordingtoafixedpercentageofsalary.
• Annualimprovements2014,effectivefromannualperiodsbeginningonorafter1January2016.Thesesetofamendmentsimpacts4standards:
• IFRS5,‘Non-currentassetsheldforsaleanddiscontinuedoperations’regardingmethodsofdisposal.
• IFRS7,‘Financialinstruments:Disclosures’,(withconsequentialamendmentstoIFRS1)regardingservicingcontracts.
• IAS19,‘Employeebenefits’regardingdiscountrates.
• IAS34,‘Interimfinancialreporting’regardingdisclosureofinformation.
TheGroupwillevaluatetheeffectoftheaforementionedchangeswithinitsoperationsandapplychangesstartingfromeffectivedate.ItisexpectedthattheapplicationofthestandardsandtheinterpretationsexceptfortheonestheimpactsofwhichweredisclosedabovewillnothaveasignificanteffectontheconsolidatedfinancialstatementsoftheGroup.
38 TRAKYA CAM SANAYİİ 2014 ANNUAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED 31 DECEMBER 2014 AND 2013(Amounts are expressed in Turkish Lira (“TRY”) unless otherwise indicated.)
TRAKYA CAM SANAYİİ A.Ş. Convenience Translation Into English of Consolidated Financial Statements Originally Issued In Turkish (Note 2.8)
2.6 Summary of Significant Accounting Policies
Revenue recognition
Revenuesarerecognizedonanaccrualbasisatthefairvaluesincurredortobeincurredwhenthegoodsaredelivered,therisksandrewardsofownershipofthegoodsaretransferred,whentheamountofrevenuecanbereliablymeasuredandit isprobablethatthefutureeconomicbenefitsassociatedwiththetransactionwillflowtotheentity.Netsalesrepresentthefairvalueofgoodsshippedlesssalesdiscountsandreturns.Whenthearrangementeffectivelyconstitutesafinancingtransaction,thefairvalueoftheconsiderationisdeterminedbydiscountingall futurereceiptsusinganimputedrateof interest.Thedifferencebetweenthefairvalueandthenominalamountoftheconsiderationisrecognizedintheperiodonanaccrualbasisasfinancialincome(Note28,31).
SaleofGoods
Revenuefromsaleofgoodsisrecognizedwhenallthefollowingconditionsaresatisfied:
• TheGrouphastransferredtothebuyerthesignificantrisksandrewardsofownershipofthegoods,
• TheGroupretainsneithercontinuingmanagerialinvolvementtothedegreeusuallyassociatedwithownershipnoreffectivecontroloverthegoodssold,
• Theamountofrevenuecanbemeasuredreliably,
• ItisprobablethattheeconomicbenefitsassociatedwiththetransactionwillflowtotheGroup,and
• Thecostsincurredortobeincurredinrespectofthetransactioncanbemeasuredreliably.
Interestincome
Interestincomeisaccruedusingtheeffectiveinterestmethodwhichbringstheremainingprincipalamountandexpectedfuturecashflowstothenetbookvalueoftherelateddepositduringtheexpectedlifeofthedeposit.
Dividendincome
DividendincomeisrecognizedbytheGroupatthedatetherighttocollectthedividendisrealized.Dividendpayablesarerecognizedasaresultofprofitdistributionintheperiodtheyaredeclared.
Inventory
Inventoriesare valuedat the lowerof costornet realizable value.Costelements included in inventoriesarematerials, laborandanappropriateamountforfactoryoverheads.Thecostofborrowingsisnotincludedinthecostsofinventories.Thecostofinventoriesisdeterminedontheweightedaveragebasisforeachpurchase.Netrealizablevalueistheestimatedsellingpriceintheordinarycourseofbusiness,lessthecostsofcompletionandsellingexpenses.Inventoriesconsistofrawmaterial,semi-finishedgoods,finishedgoods,commercialgoodsandotherstocks(Note13).
Property, plant and equipment
Property,plantandequipmentarecarriedatacquisitioncost,lessanyaccumulateddepreciationandimpairmentlosses.
Assetsinthecourseofconstructionforrentaloradministrativepurposes,orforpurposesnotyetdetermined,arecarriedatcost,lessanyrecognizedimpairmentloss.Costincludesprofessionalfees.Forassetsthatneedconsiderabletimetobereadyforsaleoruse,borrowingcostsarecapitalizedinaccordancewiththeGroup’saccountingpolicy.Asitisfortheotherfixedassets,suchassetsaredepreciatedwhentheassetsarereadyfortheirintendeduse.
Costamountsofproperty,plantandequipmentassetsexcludinglandandconstructioninprogressaresubjecttoamortizationbyusingthestraight-linemethodinaccordancewiththeirexpectedusefullife.Thereisnodepreciationallocatedforlandsduetoindefiniteusefullives.Expectedusefullife,residualvalueandamortizationmethodareevaluatedeveryyearfortheprobableeffectsofchangesarisingintheexpectationsandareaccountedforprospectively(Note18)
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED 31 DECEMBER 2014 AND 2013(Amounts are expressed in Turkish Lira (“TRY”) unless otherwise indicated.)
TRAKYA CAM SANAYİİ A.Ş. Convenience Translation Into English of Consolidated Financial Statements Originally Issued In Turkish (Note 2.8)
Leasedassetsaresubjecttosimilaramortizationprocedures,aswiththeothertangibleassetsontheshorteroftherelatedleasingperiodand economic life of the asset.
Thedepreciationperiodsforproperty,plantandequipment,whichapproximatetheeconomicusefullivesofsuchassets,areasfollows
Useful LifeBuildings 10-50yearLand improvements 8-50yearMachineryandequipment 3-15yearMotorVehicles 3-15yearFurnitureandFixtures 2-15yearOthertangibleassets 4-10year
Property,plantandequipmentarereviewedforimpairmentlosseswhenevereventsorchangesincircumstancesindicatethatthecarryingamountmaynotberecoverable.Animpairmentlossisrecognizedfortheamountbywhichthecarryingamountoftheassetexceedsitsrecoverableamount,whichisthehigherofassetnetsellingpriceorvalueinuse.Therecoverableamountoftheproperty,plantandequipmentisthehigheroffuturenetcashflowsfromtheutilizationofthisproperty,plantandequipmentorfairvaluelesscosttosell.
Coststopropertyplantandequipmentareincludedintheasset’scarryingamountorrecognizedasaseparateassetasappropriate,onlywhenitisprobablethatfutureeconomicbenefitsassociatedwiththeitemwillflowtotheGroupandthecostoftheitemcanbemeasuredreliably.Allotherrepairsandmaintenancearechargedtotheincomestatementsduringthefinancialperiodinwhichtheywereincurred.
Gains or losses on disposals of property, plant and equipment are determined by comparing proceedswith their restated carryingamountsandareincludedintherelatedincomeandexpenseaccounts,asappropriate.
Intangible assets
Intangible assets acquired
Intangibleassetsacquiredseparatelyarecarriedatcost,lessaccumulatedamortizationandanyaccumulatedimpairmentlosses.Amortizationischargedonastraight-linebasisovertheirestimatedusefullives.Estimatedusefullifeandamortizationmethodarereviewedattheendofeachannualreportingperiod,withtheeffectofanychangesintheestimatebeingaccountedforonaprospectivebasis.Purchasecostsareincludedintherelatedassetsandareamortizedatbetween3and5yearsbasedontheireconomiclives(Note19).
Computer software’s
Acquiredcomputersoftwarelicensesarecapitalizedonthebasisofthecostsincurredtoacquireandbringtousethespecificsoftware.Thesecostsareamortizedovertheirestimatedusefullives(3-5years).Costsassociatedwithdevelopingormaintainingcomputersoftwareprogramsarerecognizedasanexpenseasincurred.CoststhataredirectlyassociatedwiththedevelopmentofidentifiableanduniquesoftwareproductscontrolledbytheGroup,andthatwillprobablygenerateeconomicbenefitsexceedingcostsbeyondoneyear,arerecognizedasintangibleassets.Costsincludesoftwaredevelopmentemployeecostsandanappropriateportionofrelevantoverheads.Computersoftwaredevelopmentcostsrecognizedasassetsareamortizedovertheirestimatedusefullives(notexceeding5years)(Note19).
Customer Relationships
Thecustomerrelationshipsandcontractsacquiredinabusinesscombinationareaccountedforatfairvalueatthedateoftransaction.Contractedcustomer relationshipsareamortizedby thestraight-linemethod inaccordancewith theirexpecteduseful lives (3years)andcarriedatcostlessaccumulatedamortization.Whenanindicationofimpairmentexists,theGroupcomparesthecarryingamountoftheintangibleassetwithitsnetrealizablevaluewhichisthehigherofvalueinuseorfairvaluelesscoststosell.Animpairmentlossisrecognizedimmediatelyinthecomprehensivestatementofincome.
40 TRAKYA CAM SANAYİİ 2014 ANNUAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED 31 DECEMBER 2014 AND 2013(Amounts are expressed in Turkish Lira (“TRY”) unless otherwise indicated.)
TRAKYA CAM SANAYİİ A.Ş. Convenience Translation Into English of Consolidated Financial Statements Originally Issued In Turkish (Note 2.8)
Investments Properties
Landandbuildingsthoseareheldforlongtermrentalyieldsorvalueincreaseorboth,ratherthanintheproductionofsupplyofgoodsandservicesoradministrativepurposesorforthesaleintheordinarycourseofbusinessareclassifiedas“Investmentproperty”.Investmentpropertiesareaccountedforusingthefairvaluemodelatthefinancialstatements.Ifanowner-occupiedpropertybecomesaninvestmentpropertythatwillbecarriedatfairvalue,anentityshallapplyIAS16“Property,PlantandEquipment”uptothedateofchangeinuse.TheentitytreatsanydifferenceatthatdatebetweenthecarryingamountofthepropertyinaccordancewithIAS16anditsfairvalueasarevaluationinaccordancewithIAS16andrevaluationdifferencesareaccountedforunderequity.FairvalueofinvestmentpropertyhasbeencalculatedattheendofeachyearbytheindependentvaluationfirmsthathaverelatedCMBlicensesandrequiredprofessionalexperience(Note17).Insubsequentperiods,profitorlossduetotherevaluationoffairvalueofinvestmentpropertyareaccountedforundercurrentperiod’sprofitorloss.
Impairment of Assets
ThecarryingamountsoftheGroup’sassetsotherthangoodwillarereviewedateachbalancesheetdatetodeterminewhetherthereisanyindicationofimpairment.Whenanindicationofimpairmentexists,theGroupcomparesthecarryingamountoftheassetwithitsnetrealizablevaluewhichisthehigherofvalueinuseorfairvaluelesscoststosell.Impairmentexistsifthecarryingvalueofanassetoracashgeneratingunitisgreaterthanitsrecoverableamountwhichisthehigherofvalueinuseorfairvaluelesscoststosell.Animpairmentloss is recognised immediately in the comprehensive statement of income.
Theincreaseincarryingvalueoftheassets(oracashgeneratedunit)duetothereversalofrecognisedimpairmentlossshallnotexceedthecarryingamountoftheasset(netofamortizationamount)incasewheretheimpairmentlosswasreflectedintheconsolidatedfinancialstatements in prior periods. Such a reversal is accounted for in the comprehensive statement of income.
Assets Classified as Held for Sale
Non-currentassetareclassifiedasassetsheldforsalewhentheircarryingamountistoberecoveredprincipallythroughasaletransactionandasaleisconsideredhighlyprobable.Assetsareclassifiedasassetsheldforsalewhentheircarryingamountisconsideredtoberecoveredprincipallythroughasaletransactioninsteadofusage.Theassetscanbeabusinessunit,salesgrouporaseparatetangibleasset.Thesaleofassetsheldforsaleisexpectedtobesettledwithin12monthsaftertheendofbalancesheetdate.Variouseventsorcircumstancescanextendthecompletiontimemorethanoneyear.Ifthereisnosufficientevidencesupportingthatthedelayisbeyondthecontrolofentityandsalesplanofsalestransactionoftheasset(ordisposalassetgroup)continues;thedelaydoesnotpreventtheclassificationofassets(ordisposalassetgroup)asassetsheldforsale.
Non-currentassetsareclassifiedasassetsheldforsaleandstatedatthelowerofcarryingamountorfairvalue.Iffairvalueisbelowthecarryingvalueofasset,therelatedimpairmentisaccountedforexpenseinconsolidatedincomestatement.
Financial Leasing
a)TheGroupasthelessee:
Financial Leasing:
Leasingofproperty,plantandequipmentwheretheGrouphassubstantiallyalltherisksandrewardsofownershipareclassifiedasfinanceleasing.Financeleasedarecapitalisedattheinceptionoftheleaseatthelowerofthefairvalueoftheleasedpropertyorthepresentvalueoftheminimumleasepayments.Financialcostsofleasingaredistributedovertheleaseperiodwithafixedinterestrate.Theproperty,plantandequipmentacquiredunderfinancialleasesaredepreciatedovertheusefullivesoftheassets.Ifthereisadecreaseinthevalueoftheproperty,plantandequipmentunderfinancialleasing,theGroupprovidesimpairment.Theforeignexchangeandinterestexpensesrelatedwithfinancialleasinghavebeenrecordedintheincomestatement.Leasepaymentshavebeendeductedfromleasingdebts.
b)TheGroupasthelessor
Operating leases:
Assetsleasedoutunderoperatingleases,excludinglandandinvestmentproperties,areincludedinproperty,plantandequipmentintheconsolidatedbalancesheet.Theyaredepreciatedovertheirexpectedusefullivesonabasisconsistentwithsimilarownedproperty,plantandequipment.Rentalincomeisrecognizedintheconsolidatedstatementofincomeonastraight-linebasisovertheleaseterm.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED 31 DECEMBER 2014 AND 2013(Amounts are expressed in Turkish Lira (“TRY”) unless otherwise indicated.)
TRAKYA CAM SANAYİİ A.Ş. Convenience Translation Into English of Consolidated Financial Statements Originally Issued In Turkish (Note 2.8)
c)TheGroupasthelessee
Operating leases:
Leaseswhereasignificantportionoftherisksandrewardsofownershipareretainedbythelessorareclassifiedasoperatingleases.Paymentsmadeunderoperatingleases(netofanyincentivesreceivedfromthelessor)arechargedtothestatementof incomeonastraight-linebasisovertheperiodofthelease.
Borrowing costs
Borrowingsarerecognizedinitiallyattheproceedsreceived,netoftransactioncostsincurred.Borrowingsaresubsequentlystatedatamortizedcostusingtheeffectiveyieldmethod;anydifferencebetweenproceeds,netoftransactioncosts,andtheredemptionvalueisrecognizedinthestatementofincomeovertheperiodoftheborrowings(Note8and33).
In case of foreign exchange income in the financing activities, the related income is deducted from the total of capitalized financialexpenses.
Borrowingcoststhataredirectlyattributabletotheacquisition,constructionorproductionofaqualifyingassetarecapitalizedaspartofthecostofthatassetintheperiodinwhichtheassetispreparedforitsintendeduseorsale.Allotherborrowingcostsarerecognizedintheprofitorlossintheperiodinwhichtheyareincurred.
Foreignexchangedifferencesrelatingtoborrowings,totheextentthattheyareregardedasanadjustmentto interestcosts,arealsocapitalized.Thegainsandlossesthatareanadjustmenttointerestcostsincludetheinterestratedifferentialbetweenborrowingcoststhatwouldbeincurrediftheentityborrowedfundsinitsfunctionalcurrency,andborrowingcostsactuallyincurredonforeigncurrencyborrowings.
Related Party
Forthepurposeoftheseconsolidatedfinancialstatements,shareholders,keymanagementpersonnel(generalmanagers,headofgroup,vicegeneralmanagers, viceheadofgroupand factorymanagers) andBoardmembers, in eachcase togetherwith thecompaniescontrolledby/oraffiliatedwiththem,associatedcompaniesandothercompanieswithintheGroupareconsideredandreferredtoasrelatedparties(Note37).
Offsetting
All itemswith significant amountsandnature, evenwith similar characteristics, arepresented separately in the financial statements.Insignificantamountsaregroupedandpresentedbymeansofitemshavingsimilarsubstanceandfunction.Whenthenatureoftransactionsandeventsnecessitateoffsetting,presentationofthesetransactionsandeventsovertheirnetamountsorrecognitionoftheassetsafterdeductingtherelatedimpairmentarenotconsideredasaviolationoftheruleofnon-offsetting.
Financial Instruments
Classification
Thegroupclassifiesitsfinancialassetsinthefollowingcategories:loansandreceivables,available-for-salefinancialassetsandheldtomaturityfinancialassets.Theclassificationdependsonthepurposeforwhichthefinancialassetswereacquired.Managementdeterminesthe classification of its financial assets at initial recognition.
Receivables
Loansandreceivablesarenon-derivativefinancialassetswithfixedordeterminablepaymentsthatarenotquotedinanactivemarket.Theyareincludedincurrentassets,exceptformaturitiesgreaterthan12monthsafterthebalancesheetdate.Thosewithmaturitiesgreaterthan12monthsareclassifiedasnon-currentassets.Thegroup’sloansandreceivablesareclassifiedas“tradeandotherreceivables”inthebalancesheet(Note10,Note11).
Available-for-salefinancialassets
Available-for-salefinancialassetsarenon-derivativefinancialassetsthatareeitherdesignatedinthiscategoryornotclassifiedinanyoftheothercategories.Theyareincludedinnon-currentassetsunlessmanagementintendstodisposeoftherelatedinvestmentswithin12monthsofthebalancesheetdate(Note7).
42 TRAKYA CAM SANAYİİ 2014 ANNUAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED 31 DECEMBER 2014 AND 2013(Amounts are expressed in Turkish Lira (“TRY”) unless otherwise indicated.)
TRAKYA CAM SANAYİİ A.Ş. Convenience Translation Into English of Consolidated Financial Statements Originally Issued In Turkish (Note 2.8)
Heldtomaturityfinancialassets
Debtsecuritieswithfixedmaturities,wheremanagementhasboththeintentandtheabilitytoholdtothematurityexcludingthefinancialassetsclassifiedasoriginated loansandadvancestocustomersareclassifiedas“held-to-maturity financialassets”.Held-to-maturityfinancialassetsarecarriedatamortizedcostusingtheeffectiveyieldmethod(Not7).
Recognition and measurement
Regularpurchasesandsalesoffinancialassetsarerecognizedonthetradedate-thedateonwhichthegroupcommitstopurchaseor sell the asset. Investments are initially recognized at fair value plus transaction costs for all financial assets. Financial assets arederecognizedwhen the rights to receivecash flows from the investmentshaveexpiredorhavebeen transferredand thegrouphastransferredsubstantiallyallrisksandrewardsofownership.Available-for-salefinancialassetsaresubsequentlycarriedatfairvalue.Loansandreceivablesarecarriedatamortizedcostusingtheeffectiveinterestmethod.
Loansandreceivablesarecarriedatamortizedcostusingtheeffectiveyieldmethod.
Changesinthefairvalueofmonetarysecuritiesdenominatedinaforeigncurrencyandclassifiedasavailableforsaleareanalyzedfortranslationdifferencesresultingfromchangesinamortizedcostofthesecurityandotherchangesinthecarryingamountofthesecurity.The translation differences onmonetary securities are recognized in the income statement; translation differences on non-monetarysecuritiesarerecognizedinequity.Changesinthefairvalueofmonetaryandnon-monetarysecuritiesclassifiedasavailableforsalearerecognizedinequity.Held-for-tradingderivativefinancial instrumentsareinitiallyrecognizedintheconsolidatedfinancialstatementsatcostandaresubsequentlymeasuredattheirfairvalue.Changesinthefairvaluesofheld-for-tradingderivativefinancialinstrumentsareincludedintheconsolidatedstatementsofincome.Dividendsonavailable-forsaleequityinstrumentsarerecognizedinthestatementofincomeaspartoffinancialincomewhentheGroup’srighttoreceivepaymentsisestablished.Thefairvaluesofquotedinvestmentsarebasedoncurrentbidprices.Ifthemarketforafinancialassetisnotactive(andforunlistedsecurities),thegroupestablishesfairvaluebyusingvaluationtechniques.Theseincludetheuseofrecentarm’slengthtransactions,referencetootherinstrumentsthataresubstantiallythesame,discountedcashflowanalysis,andoptionpricingmodels.Ifthemarketforafinancialassetisnotactiveandthefairvalueofthefinancialassetcannotbemeasuredreliably,aforementionedfinancialassetsareaccountedforcostminusimpairmentintheconsolidatedfinancial statements.
Thegroupassessesateachbalancesheetdatewhetherthereisobjectiveevidencethatafinancialassetoragroupoffinancialassetsisimpaired.Inthecaseofequitysecuritiesclassifiedasavailableforsale,asignificantorprolongeddeclineinthefairvalueofthesecuritybelowitscost isconsideredasanindicatorthatthesecuritiesare impaired. Ifanysuchevidenceexistsforavailable-for-salefinancialassets,thecumulativeloss-measuredasthedifferencebetweentheacquisitioncostandthecurrentfairvalue, lessanyimpairmentlossonthatfinancialassetpreviouslyrecognizedinprofitorloss-isremovedfromequityandrecognizedinthestatementofincome.Impairmentlossesrecognizedinthestatementofincomeonequityinstrumentsarenotreversedthroughthestatementofincome.
Trade Receivable
Trade receivables that are created byway of providing goods or services directly to a debtor are carried at amortized cost. Tradereceivables,netofunearnedfinancialincome,aremeasuredatamortizedcost,usingtheeffectiveinterestratemethod,lesstheunearnedfinancialincome.Shortdurationreceivableswithnostatedinterestratearemeasuredattheoriginalinvoiceamountunlesstheeffectofimputing interest is significant.
AdoubtfulreceivableprovisionfortradereceivablesisestablishedifthereisobjectiveevidencethattheGroupwillnotbeabletocollectallamountsdue.Theamountofprovisionisthedifferencebetweenthecarryingamountandtherecoverableamount,beingthepresentvalueofallcashflows,includingamountsrecoverablefromguaranteesandcollateral,discountedbasedontheoriginaleffectiveinterestrateoftheoriginatedreceivablesatinception.
Iftheamountoftheimpairmentsubsequentlydecreasesduetoaneventoccurringafterthewrite-down,thereleaseoftheprovisioniscreditedtootherincome(Note10).
Cash and cash equivalents
Cashandcashequivalentsincludescashinhand,depositsheldatcallwithbanks,othershort-termhighlyliquidinvestmentswithoriginalmaturitiesofthreemonthsorless,andbankoverdrafts(Note6).Bankdepositswithoriginalmaturitiesofmorethanthreemonthsareclassifiedundershort-termfinancialinvestments(Note7).
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED 31 DECEMBER 2014 AND 2013(Amounts are expressed in Turkish Lira (“TRY”) unless otherwise indicated.)
TRAKYA CAM SANAYİİ A.Ş. Convenience Translation Into English of Consolidated Financial Statements Originally Issued In Turkish (Note 2.8)
Financial liabilities
Financialliabilitiesareinitiallymeasuredatfairvalueincludingthetransactioncostswhicharedirectlyattributable.
Financialliabilitiesareclassifiedasequityinstrumentsandotherfinancialliabilities.
Equity instruments
Financialliabilitiesrelatedtonon-controllingshareputoptionsarereflectedinthefinancialstatementsinconformitywiththeirdiscountedvalueofthemownredemptionplan.Thediscountedvalueofthefinancialliabilitywhichisthesubjectoftheputoptionisestimatedtobethefairvalueofthefinancialasset.
Otherfinancialliabilities
Other financial liabilities are subsequentlymeasured at amortized cost using the effective interestmethodplus the interest expenserecognizedonaneffectiveyieldbasis(Note8).
Theeffective interestmethodcalculates theamortizedcostofa financial liabilityandofallocating interestexpenseover the relevantperiod.Theeffectiveinterestratediscountstheestimatedfuturecashpaymentsthroughtheexpectedlifeofthefinancialliability,or,whereappropriate,ashorterperiod
Trade payables
Tradepayablesarepaymentstobemadearisingfromthepurchaseofgoodsandservicesfromsupplierswithintheordinarycourseofbusiness.Tradepayablesarerecognizedinitiallyatfairvalueandsubsequentlymeasuredatamortizedcostusingtheeffectiveinterestmethod(Note10).
Business combinations and Goodwill
Abusinesscombination is thebringingtogetherofseparateentitiesorbusiness intoonereportingentity.BusinesscombinationsareaccountedforusingthepurchasemethodinthescopeofIFRS3(Note3)
Thecostofabusinesscombinationisthefairvalue,atthedateofexchange,ofassetsgiven,liabilitiesincurredorassumed,andequityinstrumentsissuedbytheacquirer, inexchangeforcontroloftheacquiredbusinessandinaddition,anycostsdirectlyattributabletothebusinesscombination.Thecostof thebusinesscombinationat thedateof theacquisition isadjusted ifabusinesscombinationcontractincludesclausesthatenableadjustmentstothecostofbusinesscombinationdependingoneventsafteracquisitiondate,andtheadjustmentismeasurablemoreprobablethannot.Costsoftheacquisitionarerecognizedintherelatedperiod.Anyexcessofthecostofacquisitionovertheacquirer’sinterestinthenetfairvalueoftheacquirer’sidentifiableassets,liabilitiesandcontingentliabilitiesisaccounted forasgoodwill in theconsolidated financialstatements. Ineachacquisition, thenon-controllingsharesof theacquiredcompanyareaccountedforonthebasisoftheshareofthenetassetsoftheacquiredcompany.Thecarryingvalueofgoodwillisreviewedannuallyatthesametimeforimpairmentandtheimpairmentprovision,ifany,isimmediatelyrecognizedintheconsolidatedstatementsofincome.LegalmergersarisingbetweencompaniescontrolledbytheGrouparenotconsideredwithinthescopeofIFRS3.Consequently,nogoodwillisrecognisedinthesetransactions.Similarly,theeffectsofalltransactionsbetweenthelegallymergedenterprises,whetheroccurringbeforeorafterthelegalmerger,arecorrectedinthepreparationoftheconsolidatedfinancialstatements.
LegalmergersarisingbetweencompaniescontrolledbytheGrouparenotconsideredwithinthescopeof IFRS3.Consequently,nogoodwillisrecognizedinthesetransactions.
Transactionswithnon-controllinginterest
TheGroupappliesapolicyoftreatingtransactionswithnon-controllinginterestsastransactionswithequityownersoftheGroup.Forpurchasesfromnon-controllinginterests,thedifferencebetweenanyconsiderationpaidandtherelevantshareacquiredofthecarryingvalueofnetassetsofthesubsidiaryisdeductedfromequity.Gainsorlossesondisposalstonon-controllinginterestsarealsorecordedinequity.Fordisposalstonon-controllinginterests,differencesbetweenanyproceedsreceivedandtherelevantshareofnon-controllinginterests are also recorded in equity.
44 TRAKYA CAM SANAYİİ 2014 ANNUAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED 31 DECEMBER 2014 AND 2013(Amounts are expressed in Turkish Lira (“TRY”) unless otherwise indicated.)
TRAKYA CAM SANAYİİ A.Ş. Convenience Translation Into English of Consolidated Financial Statements Originally Issued In Turkish (Note 2.8)
Foreign Currency Transactions
TheindividualfinancialstatementsofeachGroupentityarepresentedinthecurrencyoftheprimaryeconomicenvironmentinwhichtheentityoperates (its functionalcurrency).For thepurposeof theconsolidatedfinancialstatements, theresultsandfinancialpositionofeachentityareexpressedinTurkishLira(“TRY”),whichisthefunctionalcurrencyoftheCompany,andthepresentationcurrencyfortheconsolidated financial statements.
Inpreparingthefinancialstatementsoftheindividualentities,transactionsincurrenciesotherthanfunctionalcurrenciesarerecordedattheratesofexchangeprevailingonthedatesofthetransactions.Ateachbalancesheetdate,monetaryitemsdenominatedinforeigncurrenciesareretranslatedattheratesprevailingonthebalancesheetdate.
Non-monetaryitemscarriedatfairvaluethataredenominatedinforeigncurrenciesareretranslatedattheratesprevailingonthedatewhen the fairvaluewasdetermined.Non-monetary items thataremeasured in termsofhistoricalcost ina foreigncurrencyarenotretranslated.
Forthepurposeofpresentingconsolidatedfinancialstatements,theassetsandliabilitiesoftheGroup’sforeignoperationsareexpressedinTRYusingexchangeratesprevailingatthebalancesheetdate.Incomeandexpenseitemsaretranslatedattheaverageexchangeratesfortheperiod,unlessexchangeratesfluctuatesignificantlyduringthatperiod,inwhichcasetheexchangeratesatthedatesofthetransactionsareused.Exchangedifferencesarising,ifany,areclassifiedasequityandtransferredtotheGroup’stranslationdifferences.Suchexchangedifferencesarerecognizedinprofitorlossintheperiodinwhichtheforeignoperationisdisposedof.
Goodwillandfairvalueadjustmentsarisingontheacquisitionofaforeignoperationaretreatedasassetsand liabilitiesoftheforeignoperation and translated at closing rates.
Earnings Per Share
Earnings per share disclosed in the accompanying consolidated statement of income is determined by dividing net income by theweightedaveragenumberofsharescirculatingduringtheyearconcerned.
InTurkey,companiescanraisetheirsharecapitalbydistributing“BonusShares”toshareholdersfromretainedearnings.Incomputingearningspershare,such“bonusshare”distributionsareassessedasissuedshares.Accordingly,theretrospectiveeffectforthosesharedistributions is taken intoconsideration indeterminingtheweighted-averagenumberofsharesoutstandingused in thiscomputation(Note36).
Events After the Reporting Period
TheGroupadjuststheamountsrecognizedinitsfinancialstatementstoreflectadjustingeventsoccurringafterthebalancesheetdate.Ifnon-adjustingeventsafterthebalancesheetdatehavematerialinfluenceontheeconomicdecisionsofusersofthefinancialstatements,they are disclosed in the notes to the consolidated financial statements.
Provisions, Contingent Assets and Liabilities
ProvisionsarerecognizedwhentheGrouphasapresentobligationasaresultofapastevent,anditisprobablethattheGroupwillberequiredtosettlethatobligation,andareliableestimatecanbemadeoftheamountoftheobligation.
Theamountrecognizedasaprovisionisthebestestimateoftheconsiderationrequiredtosettlethepresentobligationatthebalancesheetdateconsideringtherisksanduncertaintiessurroundingtheobligation.
Wheretheeffectofthetimevalueofmoneyismaterial,theamountofprovisionshallbethepresentvalueoftheexpendituresexpectedtoberequiredtosettletheobligation.Thediscountratereflectscurrentmarketassessmentsofthetimevalueofmoneyandtherisksspecifictotheliability.Thediscountrateshallbeapre-taxrateandshallnotreflectrisksforwhichfuturecashflowestimateshavebeenadjusted.
Whensomeoralloftheeconomicbenefitsrequiredtosettleaprovisionareexpectedtoberecoveredfromathirdparty,thereceivableisrecognizedasanassetifitisvirtuallycertainthatreimbursementwillbereceivedandtheamountofthereceivablecanbemeasuredreliably(Note22).
45
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED 31 DECEMBER 2014 AND 2013(Amounts are expressed in Turkish Lira (“TRY”) unless otherwise indicated.)
TRAKYA CAM SANAYİİ A.Ş. Convenience Translation Into English of Consolidated Financial Statements Originally Issued In Turkish (Note 2.8)
Onerous contracts
AcontractisconsideredonerouswhentheunavoidablecostsofmeetingtheobligationsunderthecontractexceedtheeconomicbenefitsexpectedtobereceivedbytheGroup.
Presentobligationsarisingunderonerouscontractsaremeasuredandrecognizedasaprovision
Possibleassetsorobligationsthatarisefrompasteventsandwhoseexistencewillbeconfirmedonlybytheoccurrenceornon-occurrenceofoneormoreuncertainfutureeventsnotwhollywithinthecontroloftheGrouparenotincludedintheconsolidatedfinancialstatementsandtreatedascontingentassetsorliabilities(Note15).
Segment reporting
The Group has two business segments determined by the management based on the information available for the evaluation ofperformancesandtheallocationofresources.Thesesegmentsaremanagedseparatelybecausetheyareaffectedbytheeconomicalconditionsandgeographicalpositionsintermsofrisksandreturns.TheGroupmanagementhasdeterminedgrossprofitasthemostsuitablemethodforassessingthesegmentalperformance(Note5).
OperatingsegmentsarereportedinamannerconsistentwiththereportingprovidedtotheGroup’schiefoperatingdecision-maker.TheGroup’schiefoperatingdecision-makerisresponsibleforallocatingresourcesandassessingperformanceoftheoperatingsegments.Asthesectorsmergedunder“Other”donotmeettherequiredquantitativethresholdstobeareportablesegment,thesehavebeenmergedfor the purpose of segment reporting.
Areportablesegmentisabusinesssegmentorageographicalsegmentidentifiedbasedontheforegoingdefinitionsforwhichsegmentinformationisrequiredtobedisclosed.Abusinesssegmentorgeographicalsegmentshouldbeidentifiedasareportablesegmentifamajorityofitsrevenueisearnedfromsalestoexternalcustomersanditsrevenuefromsalestoexternalcustomersandfromtransactionswithothersegmentsis10%ormoreofthetotalrevenue,externalandinternal,ofallsegments;oritssegmentresult,whetherprofitorloss,is10%ormoreofthecombinedresultofallsegmentsinprofitorthecombinedresultofallsegmentsinloss,whicheveristhegreaterinabsoluteamount;oritsassetsare10%ormoreofthetotalassetsofallsegments.
Operatingsegmentsthatdonotmeetanyofthequantitativethresholdslistedabove,maystillbeconsideredreportable,andseparatelydisclosed,ifthemanagementbelievesthattheinformationaboutthesegmentwouldbeusefultotheusersofthefinancialstatements.
TheGroupclassifieditsoperationsintotwooperationaldivisionsformanagementaccountingpurposeswhichconstitutethebasisforthesegmentreporting(Note5).TheBasicGlasscategorycontainsflatglass,coated,laminated,mirrorandprojectglass.TheOtherGlasscategorycontainsautomotiveglass,energyglass,whitegoodsglassandglasswarecategoryoftheforeignJointVentures.
Government grants
GrantsfromthegovernmentarerecognizedatfairvaluewherethereisareasonableassurancethatthegrantwillbereceivedandtheGroupwillcomplywithalltherequiredconditions(Note21).
Governmentgrantsrelatedtocostsareaccountedasincomeonaconsistentbasisovertherelatedperiodswiththecosts.
Governmentgrantsrelatingtoproperty,plantandequipmentareincludedinnon-currentliabilitiesasdeferredgovernmentgrantsandarecreditedtothestatementsofincomeonastraight-linebasisovertheexpectedlivesoftherelatedassets.
46 TRAKYA CAM SANAYİİ 2014 ANNUAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED 31 DECEMBER 2014 AND 2013(Amounts are expressed in Turkish Lira (“TRY”) unless otherwise indicated.)
TRAKYA CAM SANAYİİ A.Ş. Convenience Translation Into English of Consolidated Financial Statements Originally Issued In Turkish (Note 2.8)
Current and deferred income tax
Thetaxexpensefortheyearcomprisescurrentanddeferredtax.Taxisrecognizedinthestatementofincome,excepttotheextentthatitrelatestoitemsrecognizeddirectlyinequity(Note35).Insuchcase,thetaxisrecognizedinshareholders’equity.
ThecurrentyeartaxonincomeiscalculatedfortheGroup’ssubsidiaries,associatesandjointventuresconsideringthetaxlawsthatareapplicableinthecountrieswheretheyoperate.
Deferredtaxliabilityorassetisrecognizedondifferencesbetweenthecarryingamountsofassetsandliabilitiesinthefinancialstatementsandthecorrespondingtaxbaseswhichareusedinthecomputationoftaxableprofit.However,deferredincometaxisnotaccountedforifitarisesfrominitialrecognitionofanassetorliabilityinatransactionotherthanabusinesscombinationthatatthetimeofthetransactionaffectsneitheraccountingnortaxableprofitorloss.Deferredincometaxisdeterminedusingtaxratesandtaxregulationsthathavebeenenactedorsubstantiallyenactedbythebalancesheetdateandareexpectedtoapplywhentherelateddeferredincometaxassetisrealisedorthedeferredincometaxliabilityissettled.
Themaintemporarydifferencesarefromthetimedifferencesbetweencarryingamountoftangibleassetsandtheirtaxbaseamounts,theavailableexpenseaccrualsthataresubjecttotaxandtaxallowancesthatarenotutilized.
Deferredtaxliabilitiesarerecognizedforalltaxabletemporarydifferences,wheredeferredtaxassetsresultingfromdeductibletemporarydifferencesarerecognizedtotheextentthatitisprobablethatfuturetaxableprofitwillbeavailableagainstwhichthedeductibletemporarydifferencecanbeutilized.Whenthedeferredtaxassetsanddeferredtaxliabilitiesrelatetoincometaxesleviedbythesametaxationauthorityandthereisalegallyenforceablerighttosetoffcurrenttaxassetsagainstcurrenttaxliabilities,deferredtaxassetsanddeferredtaxliabilitiesareoffsetaccordingly.
When thedeferred taxassetsanddeferred tax liabilities relate to income taxes leviedby thesame taxationauthorityand there isalegallyenforceablerighttosetoffcurrenttaxassetsagainstcurrenttaxliabilities,deferredtaxassetsanddeferredtaxliabilitiesareoffsetaccordingly.
Employee benefits
Employmentterminationbenefits,asrequiredbytheTurkishLabourLawandthelawsapplicableinthecountrieswherethesubsidiariesoperate,representtheestimatedpresentvalueofthetotalreserveofthefutureprobableobligationoftheGrouparisingincaseoftheretirementoftheemployees.AccordingtoTurkishLabourLawandotherlawsapplicableinTurkey,theGroupisobligedtopayemploymentterminationbenefittoallpersonnelincasesofterminationofemploymentwithoutduecause,callformilitaryservice,retirementordeathuponthecompletionofaminimumoneyearservice.Theprovisionwhichisallocatedbyusingthedefinedbenefitpension’scurrentvalueiscalculatedbyusingtheestimated liabilitymethod.Allactuarialprofitsand lossesarerecognised in theconsolidatedstatementsofincome(Note24).
Statement of Cash Flows
TheGrouppreparesstatementsofcashflowsasanintegralpartofitsoffinancialstatementstoenablefinancialstatementanalysisaboutthechangeinitsnetassets,financialstructureandtheabilitytodirectcashflowamountsandtimingaccordingtoevolvingconditions.Cashflowsincludethosefromoperatingactivities,workingcapital,investingactivitiesandfinancingactivities.
CashflowsfromoperatingactivitiesrepresentthecashflowsgeneratedfromtheGroup’sactivities.
CashflowsrelatedtoinvestingactivitiesrepresentthecashflowsthatareusedinorprovidedfromtheinvestingactivitiesoftheGroup(fixedinvestmentsandfinancialinvestments).
CashflowsarisingfromfinancingactivitiesrepresentthecashproceedsfromthefinancingactivitiesoftheGroupandtherepaymentsofthese funds.
Dividends
DividendincomeisrecognizedbytheGroupatthedatetherighttocollectthedividendisrealized.Dividendpayablesarerecognizedasaresultofprofitdistributionintheperiodtheyaredeclared.
47
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED 31 DECEMBER 2014 AND 2013(Amounts are expressed in Turkish Lira (“TRY”) unless otherwise indicated.)
TRAKYA CAM SANAYİİ A.Ş. Convenience Translation Into English of Consolidated Financial Statements Originally Issued In Turkish (Note 2.8)
2.7 Significant Accounting Estimates and Assumptions
Thepreparationofconsolidated financialstatements requiresestimatesandassumptions tobemaderegarding theamounts for theassetsandliabilitiesatthebalancesheetdate,andexplanationsforthecontingentassetsandliabilitiesaswellastheamountsofincomeandexpenses realized in the reportingperiod.TheGroupmakesestimatesandassumptionsconcerning the future.Theaccountingestimatesandassumptions,bydefinition,maynotbeequaltotherelatedactualresults.Theestimatesandassumptionsthatmaycauseamaterialadjustmenttothecarryingamountsof
TheGrouprecognizesdeferredtaxassetsand liabilitiesbasedupontemporarydifferencesarisingbetweentheir financialstatementspreparedinaccordancewithCMBFinancialReportingStandardsandtheirstatutoryfinancialstatements.ThesetemporarydifferencesusuallyresultintherecognitionofrevenueandexpensesindifferentreportingperiodsforCMBFinancialReportingStandardsandtaxpurposes.Deferredincometaxisnotaccountedforifitarisesfrominitialrecognitionofanassetorliabilityinatransactionotherthanabusinesscombination thatat the timeof the transactionaffectsneitheranaccountingnor taxableprofit/(loss).The fullyorpartiallyrecoverableamountofdeferredtaxassetsareestimatedunderavailablecircumstances.Thefutureincomeprojections,currentperiodlosses,unusedlossesandexpirationdatesofothertaxassetsandtaxplanningstrategiesthatcanbeusedwhennecessaryareconsideredduring the evaluation of estimations.
AsaresultoftheassessmentofGroupManagement,adeferredincometaxassetamountingtoTRY9.996.341(31December2013:TRY4.993.786)resultsfromtemporarydifferencesasof31December2014thatarearisingfromthetaxallowancesandcanbeusedaslongasthetaxallowancescontinue.TheGroupisentitledwithcorporatetaxallowancesinaccordancewithCorporateTaxLawNo.5520,article32/A.Asof31December2014,theamountofcorporatetaxallowancesrelatedtotemporarydifferencesandthatcanbeutilizedduringtheperiodofcorporatetaxallowancerightisTRY59.395.671(31December2013:TRY19.141.501)(Note35).
TheGroup’sassociateÇayırovaSanayiA.Ş.hasclassifiedÇayırovaproperty located inGebze,Kocaeli, as investmentpropertyduetotheterminationofoperationaluseasof31December2012.ThefairvalueofthepropertyisdeterminedasTRY217.707.575,asof31December2012.Revaluationgains,relatedtotheGroup’sshare,amountingtoTRY53,974,897,includingthedeferredtax,determinedasaresultofvaluationreportsoftwoseparateCMBlicensedvaluationfirms,isaccountedforunder“Revaluationfunds”(Notes27).
PaşabahçeCamSanayiA.Ş.,(“Paşabahçe”)isoneoftheGroup’sunquotedavailableforsalefinancialassets(ofwhichtheGroupowns6,62%).SincethefairvalueofPaşabahçevariessignificantlyandcannotbedeterminedreliably,itiscarriedatcostlessimpairment,if any.ThecarryingvalueofPaşabahçe isassessed for impairmentby theGroupmanagementbasedonanalysiswithcomparativemultipliersandbenchmarkstudies.ComparativemultipliersbasedonEBITDAandothermeasuresareused.Asaresultofthisanalysis,noimpairmentisidentifiedintheinvestmentinPaşabahçe.
48 TRAKYA CAM SANAYİİ 2014 ANNUAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED 31 DECEMBER 2014 AND 2013(Amounts are expressed in Turkish Lira (“TRY”) unless otherwise indicated.)
TRAKYA CAM SANAYİİ A.Ş. Convenience Translation Into English of Consolidated Financial Statements Originally Issued In Turkish (Note 2.8)
3. BUSINESS COMBINATIONS
TheGroupacquired100%ofsharesofFritzHoldingGmbH.,forapurchaseconsiderationofEuro3.000.000on31May2013.TheGroupaimedtogainalargeshareofmarketinGermanyandsupportingitstargetofproductionandsaleofglassencapsulation.
Net Book Value Fair ValueAssetsCurrent Assets 85.143.491 81.771.537Cash and cash equivalent 17.035.654 17.035.654Tradereceivables 28.226.588 28.339.337Inventories 28.849.160 24.278.203Prepaidexpenses 737.085 737.085Othercurrentaassets 10.295.004 4.454.571Assets held for sale - 6.926.687
Non - current Assets 66.009.653 69.880.207Tangibleassets 65.200.883 48.593.144Intangibleassets 808.770 21.287.063
Total Assets 151.153.144 151.651.744
LiabilitiesCurrent Liabilities 89.703.794 135.508.629Shorttermborrowings 340.432 340.432Tradepayables 23.530.927 22.769.319Otherpayables 62.339.717 62.339.717Short term provisions - 35.237.174Othercurrentliabilities 3.492.718 14.821.987
Non - Current Liabilities 29.441.748 12.402.977Longtermborrowings 6.745.131 6.927.018Otherpayables 22.017.454 -Long term provisions 679.163 1.454.403Deferredtaxliabilities - 4.021.556
Total Liabilities 119.145.542 147.911.606
Total Net Assets 32.007.602 3.740.138
Total cash paid 7.262.400
Cash and cash equivalents acquired (17.035.654)
Net cash outflow / (inflow) (9.773.254)Goodwill 3.522.262
Currency translation difference 750.344
Goodwill as of 31 December 2013 4.272.606
49
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED 31 DECEMBER 2014 AND 2013(Amounts are expressed in Turkish Lira (“TRY”) unless otherwise indicated.)
TRAKYA CAM SANAYİİ A.Ş. Convenience Translation Into English of Consolidated Financial Statements Originally Issued In Turkish (Note 2.8)
4. INTEREST IN OTHER ENTITES
TheGroupaccounteditsinterestsinJointVenturesforbywayof70%proportionateconsolidationuntil31December2012.
Effective from 1 January 2013, IFRS 11 “Joint Arrangements invalidated the application of IAS 31 “Interests in Joint Ventures. TheStandard splits the joint arrangements into twocategories as joint operationsand joint venturesand it requires joint ventures tobeaccounted for as associate.
TheGroup’sJointVenturesofTrakyaCamInvestmentB.V,TrakyaGlassBulgariaEAD,wererestatedbybeingaccountedforasassociateinaccordancewithIAS28“InvestmentsinAssociates”.ThedisclosuresrelatedtothesecompaniespresentedinNote16.
5. SEGMENT REPORTING
TheGrouphasadoptedIFRS8startingfrom1January2009andhasidentifiedrelevantoperatingsegmentsbasedoninternalreportsaboutthecomponentsoftheGroupthatareregularlyreviewedbythechiefoperatingdecisionmakeroftheGroup,identifiedastheboardofdirectors.
Thechiefoperatingdecisionmakerreviewsresultsandoperationsonaproductlinesegmentbasisaswellasonageographicsegmentbasisinordertomonitorperformanceandtoallocateresources.ProductlinesegmentsoftheGrouparedefinedinthefollowingcategories:basicglassandotherglass.GeographicsegmentsoftheGrouparedefinedinthefollowingregions:Turkeyandabroad
The Group management assesses the performance of the operating segments based on the measure of operating income. Themeasurementbasisexcludestheeffectsofnon-recurringexpensesfromtheoperatingincome.Themeasurementbasisalsoexcludestheshareinresultofassociatesandjointventures.Interestincomeandexpensesarenotallocatedtosegments,asthistypeofactivityisdrivenbythecentralfinancefunctionoftheGroup.
TheGroupreviewsitsproductlinesegmentsonthebasisofgrossprofit,andoperatingprofit,purchasesoftangiblefixedandintangibleassetsanddepreciationandamortizationoftangiblefixedandintangibleassets.Researchanddevelopmentexpenses,financialincomeandexpenses,andtaxexpense/incomearenotallocatedtosegments.
Totalassetsandliabilitiesofoperatingsegmentsarenotreportedsincesuchamountsarenotregularlyprovidedtothechiefoperatingdecision maker.
50 TRAKYA CAM SANAYİİ 2014 ANNUAL REPORT
NO
TES
TO T
HE
CON
SOLI
DATE
D F
INA
NCI
AL
STAT
EMEN
TSFO
R TH
E YE
ARS
EN
DED
31 D
ECEM
BER
2014
AN
D 2
013
(Am
ount
s ar
e ex
pres
sed
in T
urki
sh L
ira (“
TRY”
) unl
ess
othe
rwise
indi
cate
d.)
TRAK
YA C
AM S
AN
AYİİ
A.Ş.
Co
nven
ienc
e Tr
ansla
tion
Into
Eng
lish
of C
onso
lidat
ed F
inan
cial
Sta
tem
ents
Orig
inal
ly Is
sued
In T
urki
sh (N
ote
2.8)
a. O
pera
tiona
l Seg
men
ts
1 Ja
nuar
y - 3
1 D
ecem
ber 2
014
Basi
c gl
ass
Oth
er g
lass
Tota
lC
onso
lidat
ion
elim
inat
ions
Con
solid
ated
Rev
enue
1.218.268.856
809.263.899
2.027.532.755
(8.915.147)
2.018.617.608
Cos
t of s
ales
(771.994.082)
(689.701.376)
(1.461.695.458)
9.356.250
(1.452.339.208)
Gro
ss p
rofit
446.
274.
774
119.
562.
523
565.
837.
297
441.
103
566.
278.
400
Operatingexpenses
(301.176.636)
(103.070.808)
(404.247.444)
10.231.434
(394.016.010)
Otheroperatingincomes
45.133.342
32.306.999
77.440.341
10.841.914
88.282.255
Otheroperatingexpenses
(8.086.719)
(26.654.968)
(34.741.687)
2.909.210
(31.832.477)
Incomefromassociates
1.471.524
-1.471.524
-1.471.524
Ope
ratin
g pr
ofit
183.
616.
285
22.1
43.7
4620
5.76
0.03
124
.423
.661
230.
183.
692
Purchasesoftangibleandintangiblefixedasset
226.263.934
208.331.694
434.595.628
-434.595.628
Depreciationandam
ortizationonfixedassets
(118.381.437)
(32.241.537)
(150.622.974)
-(150.622.974)
1 Ja
nuar
y - 3
1 D
ecem
ber 2
013
Basi
c gl
ass
Oth
er g
lass
Tota
lC
onso
lidat
ion
elim
inat
ions
Con
solid
ated
Rev
enue
947.291.857
554.380.537
1.501.672.394
(13.578.673)
1.488.093.721
Cos
t of s
ales
(631.134.567)
(445.894.405)
(1.077.028.972)
10.885.236
(1.066.143.736)
Gro
ss p
rofit
316.
157.
290
108.
486.
132
424.
643.
422
(2.6
93.4
37)
421.
949.
985
Operatingexpenses
(243.921.447)
(71.926.546)
(315.847.993)
3.756.516
(312.091.477)
Otheroperatingincomes
64.454.063
19.458.676
83.912.739
(11.311.256)
72.601.483
Otheroperatingexpenses
(31.799.072)
(6.697.528)
(38.496.600)
13.500.747
(24.995.853)
Incomefromassociates
(5.257.958)
-(5.257.958)
-(5.257.958)
Ope
ratin
g pr
ofit
99.6
32.8
7649
.320
.734
148.
953.
610
3.25
2.57
015
2.20
6.18
0Purchasesoftangibleandintangiblefixedasset
483.562.848
129.801.612
613.364.460
-613.364.460
Depreciationandam
ortizationonfixedassets
(85.450.489)
(23.932.498)
(109.382.987)
-(109.382.987)
51
NO
TES
TO T
HE
CON
SOLI
DATE
D F
INA
NCI
AL
STAT
EMEN
TSFO
R TH
E YE
ARS
EN
DED
31 D
ECEM
BER
2014
AN
D 2
013
(Am
ount
s ar
e ex
pres
sed
in T
urki
sh L
ira (“
TRY”
) unl
ess
othe
rwise
indi
cate
d.)
TRAK
YA C
AM S
AN
AYİİ
A.Ş.
Co
nven
ienc
e Tr
ansla
tion
Into
Eng
lish
of C
onso
lidat
ed F
inan
cial
Sta
tem
ents
Orig
inal
ly Is
sued
In T
urki
sh (N
ote
2.8)
b. G
eogr
aphi
cal S
egm
ents
1 Ja
nuar
y -3
1 D
ecem
ber 2
014
Turk
eyEu
rope
Oth
erTo
tal
Con
solid
atio
nel
imin
atio
nsC
onso
lidat
ed
Rev
enue
1.523.372.515
471.939.297
32.220.944
2.027.532.756
(8.915.148)
2.018.617.608
Cos
t of s
ales
(1.024.822.629)
(398.311.427)
(38.561.403)
(1.461.695.459)
9.356.251
(1.452.339.208)
Gro
ss p
rofit
498.
549.
886
73.6
27.8
70(6
.340
.459
)56
5.83
7.29
744
1.10
356
6.27
8.40
0Operatingexpenses
(313.071.268)
(71.113.229)
(20.062.947)
(404.247.444)
10.231.434
(394.016.010)
Otheroperatingincomes
62.604.523
14.655.012
180.807
77.440.342
10.841.913
88.282.255
Otheroperatingexpenses
(26.684.374)
(4.558.502)
(3.498.811)
(34.741.687)
2.909.210
(31.832.477)
Incomefromassociates
1.471.524
--
1.471.524
-1.471.524
Ope
ratin
g pr
ofit
222.
870.
291
12.6
11.1
51(2
9.72
1.41
0)20
5.76
0.03
224
.423
.660
230.
183.
692
Purchasesoftangibleandintangiblefixedasset
157.086.908
140.705.399
136.803.321
434.595.628
-434.595.628
Depreciationandam
ortizationonfixedassets
(129.637.243)
(12.859.102)
(8.126.629)
(150.622.974)
-(150.622.974)
1 Ja
nuar
y -3
1 D
ecem
ber 2
013
Turk
eyEu
rope
Oth
erTo
tal
Con
solid
atio
nel
imin
atio
nsC
onso
lidat
ed
Rev
enue
1.237.330.284
261.509.447
2.832.663
1.501.672.394
(13.578.673)
1.488.093.721
Cos
t of s
ales
(875.617.974)
(198.490.958)
(2.920.039)
(1.077.028.971)
10.885.235
(1.066.143.736)
Gro
ss p
rofit
361.
712.
310
63.0
18.4
89(8
7.37
6)42
4.64
3.42
3(2
.693
.438
)42
1.94
9.98
5Operatingexpenses
(256.375.212)
(46.826.500)
(12.646.281)
(315.847.993)
3.756.516
(312.091.477)
Otheroperatingincomes
71.171.066
11.148.284
1.593.388
83.912.738
(11.311.255)
72.601.483
Otheroperatingexpenses
(35.843.822)
(2.537.876)
(114.902)
(38.496.600)
13.500.747
(24.995.853)
Incomefromassociates
(5.257.958)
--
(5.257.958)
-(5.257.958)
Ope
ratin
g pr
ofit
135.
406.
384
24.8
02.3
97(1
1.25
5.17
1)14
8.95
3.61
03.
252.
570
152.
206.
180
Purchasesoftangibleandintangiblefixedasset
228.620.903
6.923.425
377.820.132
613.364.460
-613.364.460
Depreciationandam
ortizationonfixedassets
(101.577.383)
(7.647.327)
(158.277)
(109.382.987)
-(109.382.987)
52 TRAKYA CAM SANAYİİ 2014 ANNUAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED 31 DECEMBER 2014 AND 2013(Amounts are expressed in Turkish Lira (“TRY”) unless otherwise indicated.)
TRAKYA CAM SANAYİİ A.Ş. Convenience Translation Into English of Consolidated Financial Statements Originally Issued In Turkish (Note 2.8)
6. CASH AND CASH EQUIVALENTS
31 December
201431 December
2013Cash 2.128 7.520Cashinbanks 1.126.876.399 805.522.827- Demand deposits 64.385.578 89.557.690- Time deposits 1.062.490.821 715.965.137
1.126.878.527 805.530.347
Time deposits
CurrencyInterest rate(%) Maturity
31 December2014
31 December 2013
EUR 1,65-1,70 January2015 336.648.369 103.440.737USD 1,95-2,05 January2015 724.663.103 612.524.400Other 1.179.349 -
1.062.490.821 715.965.137
Cashandcashequivalentsasof31December2014and31December2013presentedintheconsolidatedstatementsofcashflowsareasfollows:
31 December
201431 December
2013Cash and cash equivalents 1.126.878.527 805.530.347Less:Interestaccrual (455.047) (959.026)
1.126.423.480 804.571.321
NatureandthelevelofriskrelatedtocashandcashequivalentsareexplainedinNote38.
7. FINANCIAL ASSETS
a) Short term financial investments
None(2013:None).
b) Long term financial investments
Available for sale financial assets31 December
201431 December
2013Financialinvestmentsnottradedinanactivemarket 50 31.424.475Financialinvestmentscarriedatmarketprice 219.278.525 127.323.238
219.278.575 158.747.713
Movementsofavailableforsalefinancialassetsduringtheperiodareasbelow:
1 January - 31 December
2014
1 January -31 December
20131January 158.747.713 166.312.130Disposals (32.209.891) (25.132.714)Changes in fair value financial assets (*) 92.740.753 17.568.297
219.278.575 158.747.713(*)TheamountisrelatedtothefairvaluechangesofSodaSanayiiA.Ş.shares.
53
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED 31 DECEMBER 2014 AND 2013(Amounts are expressed in Turkish Lira (“TRY”) unless otherwise indicated.)
TRAKYA CAM SANAYİİ A.Ş. Convenience Translation Into English of Consolidated Financial Statements Originally Issued In Turkish (Note 2.8)
Financial investments carried at market price Share %31 December
2014 Share %31 December
2013SodaSanayiiA.Ş. 10,19 219.278.525 10,72 127.323.238
Financial investments not traded in an active market Share %
31 December2014 Share %
31 December 2013
PaşabahçeCamSan.veTic.A.Ş. 6,22 - 7,11 31.424.425CamişMadencilikA.Ş. <1 50 <1 50
50 31.424.475
8. FINANCIAL LIABILITIES
Current financial liabilities31 December
201431 December
2013Shorttermborrowings 133.789.755 83.589.014
Short term portion of long term borrowings31 December
201431 December
2013Shorttermportionoflongtermborrowingsandinterests 109.561.369 49.680.195Duetorelatedparties(Not37) 22.837.498 44.659.741Liabilitiesforfinancialleasing - 202.081
132.398.867 94.542.017Total short term financial liabilities 266.188.622 178.131.031
Non - current financial liabilities31 December
201431 December
2013Longtermportionoflongtermborrowings 395.956.491 365.144.212Duetorelatedparties(Not37) 576.185.337 551.936.633Liabilitiesforfinancialleasing 3.718.256 5.192.531
Total long -term financial liabilities 975.860.084 922.273.376
Total financial liabilities 1.242.048.706 1.100.404.407
Repricing periods for loans31 December
201431 December
20133monthsandshorter 419.814.719 327.810.0753-12months 240.648.146 234.685.786
660.462.865 562.495.861
ThedebtamountingTRY577.867.585thatTheGroupborrowedfromT.ŞişeveCamFabrikalarıwillbepaidwithequalinstallmentseverysixmonths.In2014,financialleasingliabilitiesamountingTRY3.718.256willbepaidwithequalinstallmentseverysixmonths.
Theimpactofdiscountingisnotsignificantduetogiveninterestratesforshort-termloansandtheircarryingvaluesapproximatetheirfairvalues.Thefairvaluesaredeterminedusingtheweightedaverageeffectiveannual interestrates.The long-termfinancial liabilitiesaregenerallysubjecttoreprisingwithinthreeandsixmonthperiodsandalargeamountofthoseliabilitiesconsistsofforeigncurrencydenominatedloans.Therefore,itisexpectedthatthecarryingvalueofthefinancialliabilitiesthatarecalculatedbyeffectiveinterestratemethod approximate to their fair values.
54 TRAKYA CAM SANAYİİ 2014 ANNUAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED 31 DECEMBER 2014 AND 2013(Amounts are expressed in Turkish Lira (“TRY”) unless otherwise indicated.)
TRAKYA CAM SANAYİİ A.Ş. Convenience Translation Into English of Consolidated Financial Statements Originally Issued In Turkish (Note 2.8)
Shortandlong-termbankborrowingsaresummarizedasbelow:
Bank Borrowings Capital Interest Commission Total1January 560.229.738 3.472.738 (1.206.614) 562.495.862Currency translation differences (81.163.577) (1.193.031) - (82.356.608)Foreignexchangeloss (4.410.391) - - (4.410.391)Additions-accrualsfortheperiod 360.944.281 33.944.040 - 394.888.321Payments-reversalsfortheperiod (180.221.871) (30.181.531) 249.083 (210.154.319)
31 December 2014 655.378.180 6.042.216 (957.531) 660.462.865
Bonds issued Capital InterestDiscounts on
Bonds Commission Total1January 533.575.000 3.281.733 (3.032.619) (1.310.180) 532.513.934Foreignexchangegain 46.150.000 - - - 46.150.000Additions-accrualsfortheperiod - 21.685.213 - - 21.685.213Payments-reversalsfortheperiod - (23.080.514) 394.768 204.184 (22.481.562)
31 December 2014 579.725.000 1.886.432 (2.637.851) (1.105.996) 577.867.585
Financial leases Principal Interest (-) Total1January 5.394.612 - 5.394.612Currency translation differences (169.392) - (169.392)Additions-accrualsfortheperiod - 178.138 178.138Payments-reversalsfortheperiod (1.506.964) (178.138) (1.685.102)
31 December 2014 3.718.256 - 3.718.256
Bank Borrowings Capital Interest Commission Total1January 240.708.439 955.503 - 241.663.942Impactofacquisitionofsubsidiary 1.580.298 - - 1.580.298Currency translation differences 18.830.689 108.291 - 18.938.980Foreignexchangegain 78.145.034 - - 78.145.034Additions-accrualsfortheperiod 310.762.117 13.783.562 (1.455.698) 323.089.981Payments-reversalsfortheperiod (89.797.046) (11.374.412) 249.084 (100.922.375)
31 December 2013 560.229.531 3.472.944 (1.206.614) 562.495.861
Bonds issued Capital InterestDiscount on
bonds Commission Total1January - - - - -Foreignexchangegain 85.125.000 - - - 85.125.000Additions-accrualsfortheperiod 448.450.000 14.069.295 (3.296.108) (1.446.303) 457.776.884Payments-reversalsfortheperiod - (10.787.562) 263.488 136.123 (10.387.951)
31 December 2013 533.575.000 3.281.734 (3.032.620) (1.310.180) 532.513.933
Financial leases Principal Interest (-) Total1January 9.664.771 - 9.664.771Impactofacquisitionofsubsidiary 5.687.152 - 5.687.152Currency translation differences 786.426 - 786.426Additions-accrualsfortheperiod - 2.645.067 2.645.067Payments-reversalsfortheperiod (10.743.737) (2.645.067) (13.388.804)
31 December 2013 5.394.612 - 5.394.612
55
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED 31 DECEMBER 2014 AND 2013(Amounts are expressed in Turkish Lira (“TRY”) unless otherwise indicated.)
TRAKYA CAM SANAYİİ A.Ş. Convenience Translation Into English of Consolidated Financial Statements Originally Issued In Turkish (Note 2.8)
Shortandlong-termbankborrowingsaresummarizedasbelow:
31 December 2014
Currency Interest rate (%) (*) Short - term Long - termUSD Libor+2,00-3,75 36.035.366 591.688.237EUR Euroribor+0,08-3,75 154.874.273 293.358.747TRYandothers - 75.278.983 90.813.100
266.188.622 975.860.084
31 December 2013
Currency Interest rate (%) (*) Short - term Long - termUSD Libor+2,00-3,75 34.453.291 575.742.122EUR Euroribor+0,08-3,75 136.329.332 266.802.669TRYandothers - 7.348.408 79.728.585
178.131.031 922.273.376(*)TheweightedaverageinterestrateforEURisEuribor+2,12%forUSDisLibor+2,55%.
Theredemptionscheduleoffinancialliabilitiesisasfollows:
Repayment maturities of financial liabilities31 December
201431 December
2013Upto1year 266.188.622 178.131.031Between1-2years 136.730.890 116.956.799Between2-3years 100.438.698 83.605.443Between3-4years 76.874.323 45.840.121Between4-5years 52.650.297 42.359.666Exceed 5 years 609.165.876 633.511.347
1.242.048.706 1.100.404.407
9. OTHER FINANCIAL LIABILITIES
None(2013:None).
10. TRADE RECEIVABLES AND PAYABLES
Trade receivables
Short - term trade receivables31 December
201431 December
2013Tradereceivables 312.646.485 322.159.244Notesreceivables 9.273.602 5.169.387Receivablesfromrelatedparties(Note37) 1.983.358 9.130.568Allowancefordoubtfulreceivables(-) (6.470.730) (4.394.758)
317.432.715 332.064.441
Domesticsalestermforflatglassareeitherinadvanceoraverage90daysmaturity.Averagedomesticsalestermforflatglassproductsis90days(2013:90days).Foroverduepayments,2%interestischargedonamonthlybasis(2013:1.5%).
Averagesalestermforautoglassandglasswareproductsis45days(2013:45days).
Foreignsalestermforflatglassiseitherinadvanceoraverage45daysmaturity.
56 TRAKYA CAM SANAYİİ 2014 ANNUAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED 31 DECEMBER 2014 AND 2013(Amounts are expressed in Turkish Lira (“TRY”) unless otherwise indicated.)
TRAKYA CAM SANAYİİ A.Ş. Convenience Translation Into English of Consolidated Financial Statements Originally Issued In Turkish (Note 2.8)
TheGrouphasallocatedallowance for itsdoubtful receivables.Allowance fordoubtful receivables isdeterminedby referring topastdefaultexperience.Indeterminingtherecoverabilityofatradereceivable,theGroupconsidersanychangeinthecreditqualityofthetradereceivablefromthedatecreditwasinitiallygrantedtothereportingdate.TheGrouphasnosignificantconcentrationofcreditrisk,withexposurespreadoveralargenumberofcounterpartiesandcustomers.Accordingly,themanagementbelievesthatnofurthercreditprovisionisrequiredinexcessoftheallowancefordoubtfuldebts.
TRY 59.812.924 portion of trade receivable is related to the sales that the companies subsidiary Şisecam Dış Ticaret A.Ş.(2013:TRY66.395.870).
Themovementintheallowancefordoubtfulreceivableisasfollows:
1 January -31 December
2014
1 January -31 December
20131January (4.394.758) (2.247.136)Charge for the period (2.082.009) (2.120.675)Currency translation difference 5.894 (26.947)Collections 143 -
(6.470.730) (4.394.758)
TheGroupholdsthefollowingcollateralsfortradereceivables:
31 December
201431 December
2013Letters of guarantees 80.822.531 118.535.218Notesreceivablesandchequesreceived 18.385.528 13.571.597Mortgages 9.330.000 8.796.713DirectDebitingSystem(DBS) 34.874.756 21.487.731
143.412.815 162.391.259
Asof31December2014TRY50.501.956 (31December2013:TRY55.610.032)of tradereceivableamountwaspastduebutnotimpaired. This is related to various independent customerswith no recent history of default. The aging analysis of trade receivableamountsisasfollows:
31 December
201431 December
20131-30daysoverdue 32.837.815 21.717.3671-3monthsoverdue 12.485.176 16.831.9683-12monthsoverdue 5.178.965 15.109.5191-5yearsoverdue - 1.951.179
Total overdue receivables 50.501.956 55.610.033The part under guarantee with collateral, etc. 14.478.238 16.369.805
Trade Payables
Short term trade payables31 December
201431 December
2013Tradepayables 141.211.550 133.205.151Duetorelatedparties(Not37) 36.633.020 35.775.633
177.844.570 168.980.784
Averagecredittermforpurchasesofgoodsisonemonth.TheGrouphasfinancialriskmanagementpoliciestoensurethatallliabilitiesarepaidwithincreditterms.
57
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED 31 DECEMBER 2014 AND 2013(Amounts are expressed in Turkish Lira (“TRY”) unless otherwise indicated.)
TRAKYA CAM SANAYİİ A.Ş. Convenience Translation Into English of Consolidated Financial Statements Originally Issued In Turkish (Note 2.8)
11. OTHER RECEIVABLES AND PAYABLES
Other current receivables31 December
201431 December
2013Duefromrelatedparties(Note37) 15.175.108 35.541.122Duefrompersonnel 677.270 708.530Depositsandguaranteesgiven 699.247 547.170Otherreceivables 2.887.097 4.403.997
19.438.722 41.200.819
Long - term other receivables31 December
201431 December
2013Depositsandguaranteesgiven 791.083 865.507
Other current payables31 December
201431 December
2013Duetorelatedparties(Note37) 169.200.124 54.042.548Duetopersonnel 6.089.127 5.484.000Depositsandguaranteesreceived 129.478 85.066Otherpayables 832.478 4.241.123
176.251.207 63.852.737
Other non - current payables31 December
201431 December
2013Depositsandguaranteestaken 103.919 1.312.534
12. DERIVATIVE INSTRUMENTS
None(2013:None).
13. INVENTORIES
31 December
201431 December
2013Finishedgoods 197.904.523 124.020.520Rawmaterials 65.971.084 51.448.351Trade goods 10.353.726 6.911.574Work in process 9.152.232 23.332.599Operatingsupplies 12.840.757 9.546.437Otherinventories 29.735.358 27.133.492Provisionforimpairmentofinventory(-) (5.580.632) (2.867.087)
320.377.048 239.525.886
1 January -31 December
2014
1 January -31 December
20131January (2.867.087) (2.761.670)Currency translation difference 626.088 (12.764)Provisionrealisedduringtheperiod (3.531.902) (139.507)Provisionusedduringtheperiod 192.269 46.854
(5.580.632) (2.867.087)
58 TRAKYA CAM SANAYİİ 2014 ANNUAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED 31 DECEMBER 2014 AND 2013(Amounts are expressed in Turkish Lira (“TRY”) unless otherwise indicated.)
TRAKYA CAM SANAYİİ A.Ş. Convenience Translation Into English of Consolidated Financial Statements Originally Issued In Turkish (Note 2.8)
14. PREPAID EXPENSES AND DEFERRED INCOME
Prepaid expenses in current assets31 December
201431 December
2013Orderadvancesgivenforinventories 19.273.520 16.628.992Prepaidexpensesforthefollowingmonths 2.453.049 1.126.757
21.726.569 17.755.749
Prepaid expenses in non-current assets31 December
201431 December
2013Advancesgivenfortangibleandintangibleassets 27.631.444 56.932.511Prepaidexpensesforthefollowingyears 10.644.008 5.676.692
38.275.452 62.609.203
Short term deferred income31 December
201431 December
2013Orderadvancesreceived 7.081.679 10.919.208DeferredIncome 375.632 2.553.378
7.457.311 13.472.586
Non - current deferred income31 December
201431 December
2013Deferredincome(*) 39.290.985 -
(*)TheamountconsistsofthegovernmentincentiveprovidedbytheRomaniagovernmenttoGlasscorpSA.
15. CONSTRUCTION CONTRACTS
None(2013:None).
16. JOINT VENTURES AND ASSOCIATES
NetassetvaluesofJointVenturesandassociatesaccountedforunderequityaccountingmethodrepresentedinthebalancesheetoftheassociatesareasfollows:
Joint Ventures31 December
201431 December
2013TrakyaCamInvestmentBV 150.915.642 156.107.138TrakyaGlassBulgariaEAD 135.335.437 141.492.854HNGFloatGlassLimited 127.799.491 120.384.040
414.050.570 417.984.032
Associates31 December
201431 December
2013CamişElektrikÜretimA.Ş. 20.588.107 18.853.174SaintGobainGlassEgyptS.A.E 99.501.745 80.056.213ÇayırovaCamSanayiiA.Ş 83.299.035 82.954.336
203.388.887 181.863.723617.439.457 599.847.755
59
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED 31 DECEMBER 2014 AND 2013(Amounts are expressed in Turkish Lira (“TRY”) unless otherwise indicated.)
TRAKYA CAM SANAYİİ A.Ş. Convenience Translation Into English of Consolidated Financial Statements Originally Issued In Turkish (Note 2.8)
Movementsoftheinvestmentsaccountedforunderequityaccountingmethodduringtheyearareasbelow:
31 December
201431 December
20131January 599.847.755 388.671.125TheeffectoftherestructuringoftheGroup 14.935.555 142.112.543Profit/(loss)fortheperiodfromassociates(net) 1.471.524 (5.257.958)Dividendincomefromassociates (1.198.310) (1.032.900)Currency translation differences 2.382.933 75.354.945
617.439.457 599.847.755
Thesummaryofthefinancialstatementsofassociatesisasfollows:
Trakya Cam Investment BV 31 December 2014
31 December 2013
Current assets 204.257 24.729Non-currentassets 216.333.832 225.215.123
Total Assets 216.538.089 225.239.852
Currentliabilities 944.315 2.229.653Non-currentliabilities - -
Total Liabilities 944.315 2.229.653
Net Assets (including goodwill) 215.593.774 223.010.199
Group share -Directandindirectownershipratio(%) 70,00 70,00-Effectiveownershipratio(%) 70,00 70,00
Group share in net assets (including goodwill) 150.915.642 156.107.138
1 January -31 December
2014
1 January -31 December
2013Revenue - -
Net loss from continuing operations (95.544) (128.903)Othercomprehensiveincomeloss (7.320.881) 44.421.219Total comprehensive loss (7.416.425) 44.292.316
The Group’s share in loss from continuing operations (66.881) (90.232)
60 TRAKYA CAM SANAYİİ 2014 ANNUAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED 31 DECEMBER 2014 AND 2013(Amounts are expressed in Turkish Lira (“TRY”) unless otherwise indicated.)
TRAKYA CAM SANAYİİ A.Ş. Convenience Translation Into English of Consolidated Financial Statements Originally Issued In Turkish (Note 2.8)
Trakya Glass Bulgaria EAD 31 December 2014
31 December 2013
Current assets 230.897.753 187.972.107- Cash and cash equivalents 37.566.770 24.131.944Non-currentassets 788.310.532 763.373.800
Total Assets 1.019.208.285 951.345.907
Currentliabilities 237.154.807 153.558.843- Short term financial liabilities 175.587.974 50.533.546Non-currentliabilities 372.345.475 370.401.251- Long term financial liabilities 367.602.818 364.897.603
Total Liabilities 609.500.282 523.960.094
Net Assets (including goodwill) 409.708.003 427.385.813Net assets after investment-capital elimination (Including goodwill) 193.336.338 202.132.648
Group share - --Directandindirectownershipratio(%) 70,00 70,00-Effectiveownershipratio(%) 70,00 70,00
Group share in net assets (including goodwill) 135.335.437 141.492.854
1 January -31 December
2014
1 January -31 December
2013Revenue 528.972.725 375.617.029Interestincome 221.035 2.172.076Interestexpense (8.062.309) (3.109.338)Depreciationexpense (70.490.886) (42.984.084)Tax 528.324 559.339
Net loss from continuing operations (821.580) (1.302.719)Net loss from continuing operations after consolidation adjustments (821.580) (1.096.650)Othercomprehensiveincome (7.974.731) 82.818.572Total comprehensive income (8.796.311) 81.515.853
The Group’s share in profit/(loss) from continuing operations (575.106) (767.654)(*)TrakyaGlassLogisticsEAD,jointventureoftheGroupoperatesinlogisticsector,100%ofshareswereholdbyTrakyaGlassBulgariaEAD,anotherjointventureoftheGrouphasceaseditsoperationsandmergedwithTrakyaGlassBulgariaEADat12September2013.TheGrouppresentedthecombinedfinancialinformationthetwojointventuresfortheperiodendedSeptember2013toenablethedeterminationofthefinancialpositionandperformance.
61
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED 31 DECEMBER 2014 AND 2013(Amounts are expressed in Turkish Lira (“TRY”) unless otherwise indicated.)
TRAKYA CAM SANAYİİ A.Ş. Convenience Translation Into English of Consolidated Financial Statements Originally Issued In Turkish (Note 2.8)
Çayırova Cam Sanayii A.Ş 31 December 2014
31 December 2013
Current assets 8.725.023 7.383.993Non-currentassets 287.577.981 287.782.508
Total Assets 296.303.004 295.166.501
Currentliabilities 181.300 270.179Non-currentliabilities - -
Total Liabilities 181.300 270.179
Net Assets (including goodwill) 296.121.704 294.896.322
Group share -Directandindirectownershipratio(%) 28,13 28,13-Effectiveownershipratio(%) 28,13 28,13
Group share in net assets (including goodwill) 83.299.035 82.954.336
1 January -31 December
2014
1 January -31 December
2013Revenue - -
Net profit/(loss) from continuing operations 2.425.382 5.256.339Othercomprehensiveincome/(loss) - -Total comprehensive income/(loss) 2.425.382 5.256.339
The Group’s share in profit/(loss) from continuing operations 682.260 1.478.608Dividend distribution from retained earnings 1.200.000 -
Dividend distributed to company’s share 337.560 -
62 TRAKYA CAM SANAYİİ 2014 ANNUAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED 31 DECEMBER 2014 AND 2013(Amounts are expressed in Turkish Lira (“TRY”) unless otherwise indicated.)
TRAKYA CAM SANAYİİ A.Ş. Convenience Translation Into English of Consolidated Financial Statements Originally Issued In Turkish (Note 2.8)
Camiş Elektrik Üretim A.Ş. 31 December 2014
31 December 2013
Current assets 64.301.508 58.999.428Non-currentassets 4.241.760 5.663.671
Total Assets 68.543.268 64.663.099
Currentliabilities 8.250.012 9.453.293Non-currentliabilities 496.255 451.822
Total Liabilities 8.746.267 9.905.115
Net Assets (including goodwill) 59.797.001 54.757.984
Group share -Directandindirectownershipratio(%) 34,43 34,43-Effectiveownershipratio(%) 34,43 34,43
Group share in net assets (including goodwill) 20.588.107 18.853.174
1 January -31 December
2014
1 January -31 December
2013Revenue 49.967.575 47.013.538
Net profit/(loss) from continuing operations 7.506.236 3.326.952Othercomprehensiveincome/(loss) 32.781 -Total comprehensive income/(loss) 7.539.017 3.326.952
The Group’s share in Profit/(loss) from continuing operations 2.584.397 1.145.470Dividend distribution from retained earnings 2.500.000 3.000.000
Dividend distributed to company’s share 860.750 1.032.900
63
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED 31 DECEMBER 2014 AND 2013(Amounts are expressed in Turkish Lira (“TRY”) unless otherwise indicated.)
TRAKYA CAM SANAYİİ A.Ş. Convenience Translation Into English of Consolidated Financial Statements Originally Issued In Turkish (Note 2.8)
Saint Gobain Glass Egypt S.A.E 31 December 2014
31 December 2013
Current assets 98.157.090 66.521.780Non-currentassets 417.826.206 412.921.798
Total Assets 515.983.296 479.443.578
Currentliabilities 138.169.900 102.251.430Non-currentliabilities 46.140.912 117.399.917
Total Liabilities 184.310.812 219.651.347
Net Assets (including goodwill) 331.672.484 259.792.231
Group share -Directandindirectownershipratio(%) 30,00 30,82-Effectiveownershipratio(%) 30,00 30,82
Group share in net assets (including goodwill) 99.501.745 80.056.213
1 January -31 December
2014
1 January -31 December
2013Revenue 154.178.269 110.403.855
Net profit/(loss) from continuing operations (3.660.642) (12.066.315)Othercomprehensiveincome/(loss) 18.264.665 25.086.635
Total comprehensive income/(loss) 14.604.023 13.020.320
The Group’s share in Profit/(loss) from continuing operations (1.098.193) (3.718.292)Capital increase in the current period 57.276.230 -The Group’s share in capital increase 14.935.555 -
TheGroupmadeacapitalincreaseofEGP49.250.000toSaintGobainGlassEgyptS.A.Eon14April2014,thetotalcapitalincreaseisEGP187.000.000.Withthisacquisition,theownershiprateintheassociatedecreasedto30%from30,82%.Thecapitalincreasehasbeenmadebytheamountpaidinadvance.
64 TRAKYA CAM SANAYİİ 2014 ANNUAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED 31 DECEMBER 2014 AND 2013(Amounts are expressed in Turkish Lira (“TRY”) unless otherwise indicated.)
TRAKYA CAM SANAYİİ A.Ş. Convenience Translation Into English of Consolidated Financial Statements Originally Issued In Turkish (Note 2.8)
HNG Float Glass Limited 31 December 2014
31 December 2013
Current assets 70.697.710 54.123.256-Cashandcashequivalents 2.743.094 3.955.269-Tradereceivables 16.459.225 21.578.412Non-currentassets 364.532.695 358.332.502
Total Assets 435.230.405 412.455.758
Currentliabilities 126.853.673 154.463.504-Shorttermfinancialliabilities 95.124.303 119.138.054Non-currentliabilities 52.777.750 17.224.174-Longtermfinancialliabilities 32.212.757 14.255.273
Total Liabilities 179.631.423 171.687.678
Net Assets (including goodwill) 255.598.982 240.768.080
Group share -Directandindirectownershipratio(%) 50,00 50,00-Effectiveownershipratio(%) 50,00 50,00
Group share in net assets (including goodwill) 127.799.491 120.384.040
1 January-31 December
2014
11 June-31 December
2013Revenue 181.136.016 73.386.950
Interestincome 612.873 -Interestexpense 12.349.126 4.915.380Depreciationexpense 16.283.136 6.902.176Tax - -Net profit/(loss) from continuing operations (109.906) (6.611.715)Othercomprehensiveincome 14.940.808 14.729.872Total comprehensive income 14.830.902 8.118.157The Group’s share in profit/(loss) from continuing operations (54.953) (3.305.858)
(*)Inaccordancewithexpansionstrategyinthepotentialmarkets,theGroupacquired50%sharesoftheCompany,whichislocatedinIndiaon11June2013foraconsiderationRupee2.846.075.795(61.149.742USD).
17. INVESTMENT PROPERTIES
None(2013:None).
65
NO
TES
TO T
HE
CON
SOLI
DATE
D F
INA
NCI
AL
STAT
EMEN
TSFO
R TH
E YE
ARS
EN
DED
31 D
ECEM
BER
2014
AN
D 2
013
(Am
ount
s ar
e ex
pres
sed
in T
urki
sh L
ira (“
TRY”
) unl
ess
othe
rwise
indi
cate
d.)
TRAK
YA C
AM S
AN
AYİİ
A.Ş.
Co
nven
ienc
e Tr
ansla
tion
Into
Eng
lish
of C
onso
lidat
ed F
inan
cial
Sta
tem
ents
Orig
inal
ly Is
sued
In T
urki
sh (N
ote
2.8)
18. P
RO
PERT
Y, P
LAN
T AN
D E
QU
IPM
ENTS
Cos
tLa
ndLa
nd
impr
ovem
ents
Build
ings
Mac
hine
ry a
nd
equi
pmen
tVe
hicl
esFu
rnitu
res
and
fixtu
res
Oth
er fi
xed
asse
tsC
onst
ruct
ion
in
prog
ress
Tota
l1January
26.368.840
51.992.860
451.842.861
1.449.827.473
8.261.264
113.377.111
31.206.240
712.037.171
2.844.913.820
Cur
renc
y tr
ansl
atio
n di
ffere
nces
(745.946)
(4.542.706)
(77.605.089)
(65.099.935)
(463.698)
(1.278.409)
(1.104.953)
(106.373.077)
(257.213.813)
Add
ition
s (**)
--
645.645
7.004.271
777.317
1.203.937
369.546
421.421.300
431.422.016
Disposals
--
(471.714)
(41.038.714)
(299.043)
(7.998.691)
(2.703.943)
(295.546)
(52.807.651)
Tran
sfer
s fro
m c
onst
ruct
ion
in
prog
ress
-17.165.259
318.407.752
457.882.571
7.025.950
9.085.374
8.693.129
(818.260.035)
-
Bala
nce
at 3
1 D
ecem
ber 2
014
25.6
22.8
9464
.615
.413
692.
819.
455
1.80
8.57
5.66
615
.301
.790
114.
389.
322
36.4
60.0
1920
8.52
9.81
32.
966.
314.
372
Accu
mul
ated
dep
reci
atio
n
1January
-(31.234.186)
(157.745.969)
(1.046.267.464)
(5.719.961)
(94.723.356)
(18.487.239)
-(1.354.178.175)
Cur
renc
y tr
ansl
atio
n di
ffere
nces
-208.256
2.977.220
6.030.157
107.640
1.060.637
122.695
-10.506.605
Cha
rge
for
the
perio
d (*)
-(3.035.741)
(15.929.311)
(112.805.138)
(1.710.213)
(5.756.918)
(3.758.852)
-(142.996.173)
Disposals
--
373.188
34.383.976
294.434
7.104.218
1.177.576
-43.333.392
Bala
nce
at 3
1 D
ecem
ber 2
014
-(3
4.06
1.67
1)(1
70.3
24.8
72)
(1.1
18.6
58.4
69)
(7.0
28.1
00)
(92.
315.
419)
(20.
945.
820)
-(1
.443
.334
.351
)
Net
boo
k va
lue
as o
f 31
Dec
embe
r 201
425
.622
.894
30.5
53.7
4252
2.49
4.58
368
9.91
7.19
78.
273.
690
22.0
73.9
0315
.514
.199
208.
529.
813
1.52
2.98
0.02
1N
et b
ook
valu
e as
of
31 D
ecem
ber 2
013
26.3
68.8
4020
.758
.674
294.
096.
892
403.
560.
009
2.54
1.30
318
.653
.755
12.7
19.0
0171
2.03
7.17
11.
490.
735.
645
(*) CurrentperiodallocationofdepreciationexpenseisdisclosedinNote28andNote30.N
ofinanceleaseliabilityintheperiodpurchases.Nomortgageoverlandsandbuildingsduetobankborrow
ingsexist(2013:None).
(**)ItincludescapitalizedfinancialexpenseamountingtoTRY17.042.579.
66 TRAKYA CAM SANAYİİ 2014 ANNUAL REPORT
NO
TES
TO T
HE
CON
SOLI
DATE
D F
INA
NCI
AL
STAT
EMEN
TSFO
R TH
E YE
ARS
EN
DED
31 D
ECEM
BER
2014
AN
D 2
013
(Am
ount
s ar
e ex
pres
sed
in T
urki
sh L
ira (“
TRY”
) unl
ess
othe
rwise
indi
cate
d.)
TRAK
YA C
AM S
AN
AYİİ
A.Ş.
Co
nven
ienc
e Tr
ansla
tion
Into
Eng
lish
of C
onso
lidat
ed F
inan
cial
Sta
tem
ents
Orig
inal
ly Is
sued
In T
urki
sh (N
ote
2.8)
Cos
tLa
ndLa
nd
impr
ovem
ents
Build
ings
Mac
hine
ry a
nd
equi
pmen
tVe
hicl
esFu
rnitu
res
and
fixtu
res
Oth
er fi
xed
asse
tsC
onst
ruct
ion
in
prog
ress
Tota
l1January
11.179.349
51.796.884
381.609.717
1.303.526.904
6.919.219
80.291.450
18.057.976
130.041.194
1.983.422.693
Cur
renc
y tr
ansl
atio
n di
ffere
nces
3.344.185
-13.862.819
21.238.395
250.089
5.333.703
584.501
44.708.440
89.322.132
The
effe
ct o
f acq
uisi
tion
of
subsidiary
11.845.306
-53.875.398
90.513.458
489.860
24.696.715
2.494.252
1.398.747
185.313.736
Add
ition
s-
-534.934
2.831.999
427.493
1.157.323
335.406
605.628.413
610.915.568
Disposals
-(147.174)
(854.188)
(16.404.576)
(116.782)
(4.461.236)
(1.157.045)
(919.308)
(24.060.309)
Tran
sfer
s fro
m c
onst
ruct
ion
in
prog
ress
-343.150
2.814.181
48.121.293
291.385
6.359.156
10.891.150
(68.820.315)
-
Bala
nce
at 3
1 D
ecem
ber 2
013
26.3
68.8
4051
.992
.860
451.
842.
861
1.44
9.82
7.47
38.
261.
264
113.
377.
111
31.2
06.2
4071
2.03
7.17
12.
844.
913.
820
Accu
mul
ated
dep
reci
atio
n
1January
-(28.985.036)
(99.562.717)
(878.500.421)
(4.560.406)
(68.261.292)
(14.059.501)
-(1.093.929.373)
Cur
renc
y tr
ansl
atio
n di
ffere
nces
--
(8.647.837)
(16.644.016)
(166.306)
(4.719.554)
(460.324)
-(30.638.037)
The
effe
ct o
f acq
uisi
tion
of
subsidiary
--
(38.963.246)
(73.418.424)
(414.126)
(21.881.790)
(2.043.005)
-(136.720.591)
Cha
rge
for
the
perio
d (*)
-(2.295.755)
(10.594.289)
(88.216.162)
(695.905)
(4.317.628)
(2.299.230)
-(108.418.969)
Disposals
-46.605
22.120
10.511.559
116.782
4.456.908
374.821
-15.528.795
Bala
nce
at 3
1 D
ecem
ber 2
013
-(3
1.23
4.18
6)(1
57.7
45.9
69)
(1.0
46.2
67.4
64)
(5.7
19.9
61)
(94.
723.
356)
(18.
487.
239)
-(1
.354
.178
.175
)N
et b
ook
valu
e as
of
31 D
ecem
ber 2
013
26.3
68.8
4020
.758
.674
294.
096.
892
403.
560.
009
2.54
1.30
318
.653
.755
12.7
19.0
0171
2.03
7.17
11.
490.
735.
645
Net
boo
k va
lue
as o
f 31
Dec
embe
r 201
211
.179
.349
22.8
11.8
4828
2.04
7.00
042
5.02
6.48
32.
358.
813
12.0
30.1
583.
998.
475
130.
041.
194
889.
493.
320
(*) AllocationofdepreciationexpenseisdisclosedinNote28andNote30.
67
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED 31 DECEMBER 2014 AND 2013(Amounts are expressed in Turkish Lira (“TRY”) unless otherwise indicated.)
TRAKYA CAM SANAYİİ A.Ş. Convenience Translation Into English of Consolidated Financial Statements Originally Issued In Turkish (Note 2.8)
19. INTANGIBLE ASSETS
Cost Rights (*) Others Total1January 53.997.467 3.069.763 57.067.230Currency translation differences (2.130.435) (84.678) (2.215.113)Additions 2.714.691 458.921 3.173.612Disposals (68.377) (2.355) (70.732)
Balance at 31 December 2014 54.513.346 3.441.651 57.954.997
Accumulated depreciation 1January (27.581.013) (1.508.675) (29.089.688)Currency translation differences 1.076.419 60.387 1.136.806Charge for the period (7.274.815) (351.986) (7.626.801)Disposals 66.663 - 66.663
Balance at 31 December 2014 (33.712.746) (1.800.274) (35.513.020)
Net book value as of 31 December 2014 20.800.600 1.641.377 22.441.977
Net book value as of 31 December 2013 26.416.454 1.561.088 27.977.542(*)RightsaremainlycomposedofcustomerrelationsacquiredinrelatedofacquiringFritzHoldingGMBH(TRY19.247.308)andaccountedforthefairvalue.
Cost Rights Others Total1January 6.548.600 6.618 6.555.218Currency translation differences 8.171.638 309.899 8.481.537Theeffectofacquisitionofsubsidiary 38.221.885 1.362.487 39.584.372Additions 1.055.344 1.393.548 2.448.892Disposals - (2.789) (2.789)
Balance at 31 December 2013 53.997.467 3.069.763 57.067.230
Accumulated depreciation Rights Others Total1January (5.852.067) (3.887) (5.855.954)Currency translation differences (3.725.678) (246.728) (3.972.406)Theeffectofacquisitionofsubsidiary (17.214.769) (1.082.541) (18.297.310)Charge for the period (*) (788.499) (175.519) (964.018)Disposals - - -
Balance at 31 December 2014 (27.581.013) (1.508.675) (29.089.688)
Net book value as of 31 December 2014 26.416.454 1.561.088 27.977.542
Net book value as of 31 December 2013 696.533 2.731 699.264(*)AllocationofdepreciationexpenseisdisclosedinNote28andNote30.
68 TRAKYA CAM SANAYİİ 2014 ANNUAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED 31 DECEMBER 2014 AND 2013(Amounts are expressed in Turkish Lira (“TRY”) unless otherwise indicated.)
TRAKYA CAM SANAYİİ A.Ş. Convenience Translation Into English of Consolidated Financial Statements Originally Issued In Turkish (Note 2.8)
20. GOODWILL
1 January -31 December
2014
1 January -31 December
20131January 21.148.520 13.573.346Acquisition impact for the period - 3.522.264Currency translation differences (890.006) 4.052.910
20.258.514 21.148.520
31 December
201431 December
2013FritzHoldingGmbH 4.104.119 4.272.606GlasscorpS.A. 16.154.395 16.875.914
20.258.514 21.148.520
21. GOVERNMENT GRANTS AND INCENTIVES
AnagreementforgovernmentincentivewassignedbetweenGlasscorpS.AandMinistryofEconomyandEnergyonbehalfoftheRepublicofRomaniaunder“RegulationofInvestmentIncentiveandImplementation”ofRomaniaand“GovernmentIncentiveLegislation”ofEuropeanUnion.
Exportsandotherforeigncurrencydenominatedoperations,withinthescopeofthestandardsdeterminedbytheMinistryofFinanceandUndersecretariesofForeignTrade,areexemptfromstamptaxandfees.GovernmentgrantsarepaidtosupportparticipatingininternationalfairsinaccordancewiththeDecisionNo:2004/11oftheMoneyCreditandCoordinationCommitteeissuedat16December2004.
22. PROVISIONS, CONTINGENT ASSETS AND LIABILITIES
Provisions
Short term provisions31 December
201431 December
2013Provisionforlitigation 13.142.663 4.113.223Provisionforoutsourcedservices 146.870 7.464Provisionforpersonnelallowance 20.633.537 34.182.331Bonusprovisions 858.307 4.072.271Other 2.103.860 285.906
36.885.237 42.661.195
Asof31December2014,GroupmanagementtookadvicefromlegalconsultantsaboutthelawsuitsfiledagainsttheGroup,calculateditspotentialfuturecashoutflowasTRY13.142.663(2013:TRY4.113.223)andsetasideaprovisionforthisamount.Theprovisionamountwasrecognisedundergeneralmanagementexpenses.
69
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED 31 DECEMBER 2014 AND 2013(Amounts are expressed in Turkish Lira (“TRY”) unless otherwise indicated.)
TRAKYA CAM SANAYİİ A.Ş. Convenience Translation Into English of Consolidated Financial Statements Originally Issued In Turkish (Note 2.8)
Collaterals,pledgesandmortgages“CPM”givenbytheCompanyasof31December2014and31December2013areasfollows:
31 December
201431 December
2013Letters of guarantees given 23.668.104 16.872.115Promissorynotesandsecuritiesgiven 1.202.723.728 708.290.516Other 3.545.063 20.371.591
1.229.936.895 745.534.222
31 December 2014
The CPMs given by the CompanyTRY
Equivalent USD EUR OtherA. CPM’sgiveninthenameofitsownlegalpersonality(*) 47.495.643 7.840.000 8.000.000 6.749.867
B. CPM’sgivenonbehalfofthefullyconsolidatedcompanies 281.923.212 3.632.727 51.699.290 127.671.094
C. CPM’sgivenonbehalfofthirdpartiesforordinarycourseofbusiness - - - -
D.TotalamountofotherCPM’sgiven 900.518.040 250.000.000 113.728.167 -
i. TotalamountofCPM’sgivenonbehalfofthemajorityshareholder (*) 579.725.000 250.000.000 - -
ii. TotalamountofCPM’sgivenonbehalfofthegroupcompanieswhicharenotinscopeofBandC 320.793.040 - 113.728.167 -
iii.TotalamountofCPM’sgivenonbehalfofthirdpartieswhichare not in scope of C - - - -
Total 1.229.936.895 261.472.727 173.427.457 134.420.961
PercentageofCPM’sgivenbytheCompanytotheCompany’sequitiesis36%asof31December2014(31December2013:23%).
31 December 2013
The CPMs given by the CompanyTRY
Equivalent USD EUR OtherA. CPM’sgiveninthenameofitsownlegalpersonality 70.462.168 11.760.000 16.666.667 10.124.800
B. CPM’sgivenonbehalfofthefullyconsolidatedcompanies 141.497.054 - 23.333.334 72.978.719
C. CPM’sgivenonbehalfofthirdpartiesforordinarycourseofbusiness - - - -
D. TotalamountofotherCPM’sgiven 533.575.000 250.000.000 - -
i. TotalamountofCPM’sgivenonbehalfofthemajorityshareholder (*) 533.575.000 250.000.000 - -
iiTotalamountofCPM’sgivenonbehalfofthegroupcompanieswhicharenotinscopeofBandC - - - -
iii.TotalamountofCPM’sgivenonbehalfofthirdpartieswhichare not in scope of C - - - -
Total 745.534.222 261.760.000 40.000.001 83.103.519
70 TRAKYA CAM SANAYİİ 2014 ANNUAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED 31 DECEMBER 2014 AND 2013(Amounts are expressed in Turkish Lira (“TRY”) unless otherwise indicated.)
TRAKYA CAM SANAYİİ A.Ş. Convenience Translation Into English of Consolidated Financial Statements Originally Issued In Turkish (Note 2.8)
23. COMMITMENTS
According to agreements made with Türkiye Petrolleri Anonim Ortaklığı. A.Ş., Shell Enerji A.Ş. ve Mersin O.S.B., the Group hasa commitment to purchase290.442.870 sm3 natural gaspurchase commitment between1 January 2015 and31December 2014(31December2013:246.658.000sm3).
24. EMPLOYEE BENEFITS
Short Term31 December
201431 December
2013Unusedvacationprovision 1.380.496 1.088.618
Long Term (Provision for employment termination benefits)
UndertheTurkishLaborLaw,theGroupisrequiredtopayemploymentterminationbenefitstoeachemployeewhohasqualifiedforsuchbenefitsastheemploymentended.Also,employeeswhoareentitledtoaretirementarerequiredtobepaidretirementpayinaccordancewithLawNo:2422dated6March1981andNo:4447dated25August1999andtheamendedArticle60oftheexistingSocialInsuranceCodeNo:506.Sometransitionprovisionsrelatedtothepre-retirementservicetermwereexcludedfromthelawsincetherelatedlawwaschangedasof23May2002.
Themonthlyceilingofemployeeterminationbenefittobepaidasof1January2015isTRY3.541,37(1January2014:TRY3.438,22).
The liabilityofemployment terminationbenefits isnotsubject toany fundingas there isnoobligation.Theprovision iscalculatedbyestimatingthepresentvalueofthefutureprobableobligationoftheGrouparisingfromtheretirementoftheemployees.RevisedIAS19“EmployeeBenefits”requiresactuarialvaluationmethodstobedevelopedtoestimatetheGroup’sobligationunderthedefinedbenefitplans.Accordingly,thefollowingactuarialassumptionsareusedinthecalculationofthetotalliability:
Theprincipal assumption is thatmaximum liability for eachyearof servicewill increase in linewith inflation.Thus, thediscount rateappliedrepresentstheexpectedrealrateafteradjustingfortheanticipatedeffectsoffutureinflation.Consequently,intheaccompanyingconsolidated financial statementsasof31December2013, theprovision iscalculatedbyestimating thepresentvalueof the futureprobableobligationoftheGrouparisingfromtheretirementoftheemployees.
Provisionsatthebalancesheetdatewerecalculatedbyassuminganannualinflationrateof5.00%(31December2014:5.00%)andadiscountrateof9.49%(31December2013:8.37%),therealdiscountrateisapproximately4.28%(31December2013:3.21%).
Long Term
1 January - 31 December
2014
1 January -31 December
20131January 56.619.859 46.779.306Service costs 7.578.592 10.765.785Interestcosts 1.653.449 1.524.283Actuarial loss (5.030.911) -Acquisitionofsubsidiary - 2.229.643Currency translation differences (65.467) 245.202Paidduringtheperiod (5.974.211) (4.924.360)
54.781.311 56.619.859
25. IMPAIRMENT OF ASSETS
31 December
201431 December
2013Provisionfordoubtfulreceivables 6.470.730 4.394.758Provisionforimpairmentofinventory 5.580.632 2.867.087
12.051.362 7.261.845
71
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED 31 DECEMBER 2014 AND 2013(Amounts are expressed in Turkish Lira (“TRY”) unless otherwise indicated.)
TRAKYA CAM SANAYİİ A.Ş. Convenience Translation Into English of Consolidated Financial Statements Originally Issued In Turkish (Note 2.8)
26. OTHER ASSETS AND LIABILITIES
Other current assets31 December
201431 December
2013OtherVAT 44.845.781 36.282.747Other 2.474.116 3.656.945
47.319.897 39.939.692
Other current liabilities31 December
201431 December
2013Taxesandfundspayables 6.561.594 5.783.489Socialsecuritypremiumspayable 5.942.464 5.865.069Socialbenefitpayable 4.186.616 14.184.678Expense accruals 7.651.241 -Other 4.038.880 4.870.797
28.380.795 30.704.033
27. CAPITAL, RESERVES AND OTHER EQUITY ITEMS
Equitycomponents“Paid-inShareCapital”,“RestrictedReserves”and“SharePremiums”,areaccountedaslegalreservesinaccordancewithrelatedArticleoftheTurkishCommercialCodeandarepresentedwithinthestatutoryfinancialstatements.Thedifferences,thatarerecognizedthroughthevaluationmadeinaccordancewithCMBReportingStandardsandcannotbesubjecttodividenddistributionorcapitalincreaseasofreportingdate(suchasinflationadjustmentdifferences)andrelevanttothepaid-insharecapital,areassociatedwith“AdjustmentstoShareCapital”whichisunderpaid-insharecapitalandthedifferencesresultingfromthe“RestrictedReserves”and“SharePremiums”areassociatedwith“RetainedEarnings”.
a) Capital/Treasury Shares
Theapprovedandpaid-incapitaloftheCompanyconsistsof73.900.000.000(2013:71.000.000.000)sharesissuedonbearerwithanominalvalueofKr1(Krone)each.
31 December
201431 December
2013Registered capital ceiling 1.500.000.000 1.500.000.000Approvedandpaid-incapital 739.000.000 710.000.000
Shareholderstructureasof31December2014and31December2013isasfollows:
31 December 2014 31 December 2013
ShareholdersAmount
TRYShare
(%)Amount
TRYShare
(%)TürkiyeŞişeveCamFabrikalarıA.Ş. 512.750.995 69,38 492.629.508 69,38Publiclytraded 222.804.664 30,16 214.061.315 30,16Şişecamgroupcompanies 2.964.085 0,40 2.847.768 0,40IFC 480.256 0,06 461.409 0,06
Paid - in share capital 739.000.000 100,00 710.000.000 100,00Adjustmenttosharecapital 5.576.528 - 5.576.528 -Total share capital 744.576.528 715.576.528
It is decided in theCompany’s board of directors’meeting held on 23May2014 that theCompany’s paid in capital amounting toTRY710,000,000wasincreasedtoTRY739.000.000withintheavailableregisteredcapitalceilingbyTRY29.000.000andthecapitalincreasewouldbefromretainedearnings.Theprocedureforthecapitalincreasewascompletedbyregisteringon2July2014.
72 TRAKYA CAM SANAYİİ 2014 ANNUAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED 31 DECEMBER 2014 AND 2013(Amounts are expressed in Turkish Lira (“TRY”) unless otherwise indicated.)
TRAKYA CAM SANAYİİ A.Ş. Convenience Translation Into English of Consolidated Financial Statements Originally Issued In Turkish (Note 2.8)
Ultimate shareholders of the Company, indirectly, are as follows:
31 December 2014 31 December 2013
ShareholdersAmount
TRYShare
(%)Amount
TRYShare
(%)T.İşBankasıA.Ş.MensuplarıMunzamSosyalGüvenlikveYardımlaşmaSandığıVakfı 177.756.830 24,05 171.120.251 24,10AtatürkHisseleri(CumhuriyetHalkPartisi) 94.901.563 12,84 91.177.416 12,84Other(publiclytraded) 466.341.607 63,10 447.702.333 63,06
Total 739.000.000 100,00 710.000.000 100,00
b) Share premium
Itdeterminesthedifferencebetweenthenominalpriceandthesalespriceofthesharespubliclytraded.ItisTRY22.703asof31December2014(31December2013:TRY22.703).
c) Other Comprehensive Income not to be reclassified to profit or loss
Revaluationfundsthatareunrelatedwithincomestatementisdirectlytransferredtoequityasfollows:
Items not be reclassfied to profit and loss31 December
201431 December
2013Fixedassetsrevaluationfund 53.974.897 53.974.897Actuarialgain/lossrevaluationfund (2.671.683) (6.637.362)
51.303.214 47.337.535
Provisionforemployeeterminationbenefitsactuarialgain/lossreservefund
Theamendment in IAS-19 ‘’EmployeeBenefits’’doesnotpermit theactuarialgain/lossconsidered in thecalculationofprovision foremployeeterminationbenefitstobeaccountedforunderthestatementofincome.Thegainsandlossesarisingfromthechangesintheactuarialassumptionhavebeenaccountedforby‘’RevaluationFunds’’undertheequity
Themovementofthegain/lossonrevaluationandremeasurementisasfollows:
31 December
201431 December
2013Restated-1January2014 (6.637.362) (6.637.362)Arising during the period 5.055.222 -Minorityeffect (78.499) -Impactofdeferredtax (1.011.044) -
(2.671.683) (6.637.362)
73
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED 31 DECEMBER 2014 AND 2013(Amounts are expressed in Turkish Lira (“TRY”) unless otherwise indicated.)
TRAKYA CAM SANAYİİ A.Ş. Convenience Translation Into English of Consolidated Financial Statements Originally Issued In Turkish (Note 2.8)
d) Other Comprehensive Income to be reclassified to profit or loss
Movementsinrevaluationfundspresentedinthestatementsofcomprehensiveincomeandstatementofchangesinequity.
Currency translation differences
Itarisesfromexchangedifferencesarisingfromthetranslationoffinancialstatementsofforeignsubsidiaries,jointventuresandassociatestoreportingcurrencyofTRYandaccountedforunderequity.
TRY497.116ofthechangeinthecurrencytranslationdifferencerelatestonon-controllinginterests(31December2013:TRY14.675.254).
Revaluation fund related to financial assets
Therevaluationfundrelatedtofinancialassetsarisesfromthemeasurementofavailable-for-salefinancialassetsattheirfairvalue(Note:7). Incaseofdisposalofassetscarriedat fairvalue,thecumulativegainor lossrelatedtothatassetspreviouslyrecognized inothercomprehensiveincomewillrecycletotheprofitorlossfortheperiod.Incaseofimpairmentoffinancialassets,thecumulativegainorlosspreviouslyrecognizedinequityisincludedintheprofitorlossfortheperiod.
GainsandlossesarisingfromchangesinfairvalueofSodaSanayiA.Ş.sharestransferredtotheGroupregardingthepartialspinoffofMersinCogenerationplantownedbyCamişElektrikÜretimA.Ş.,oneoftheGroup’sassociates,hasbeenaccountedunderrevaluationfunds.
e) Restricted reserves
Retainedearningsinthestatutoryfinancialstatementscanbedistributedasdividendsotherthanjudgmentsrelatedtolegalreservesdescribedbelow.
Legal reservesconsistof firstandsecond legal reserves,calculated inaccordancewiththeTurkishCommercialCode.Thefirst legalreserveiscalculatedas5%ofthefinancialstatutoryprofitsperannumuntilthetotalreservereaches20%ofthehistoricalpaid-insharecapital.Thesecondlegalreserveiscalculatedafterthefirstlegalreserveanddividends,attherateof10%perannumofallcashdividenddistributions;however,holdingcompaniesarenotsubjecttothisapplication.
PubliclyheldcorporationsmaketheirdividenddistributionswithintheframeworksetforthinthestandardsandnotificationspublishedbyCapitalMarketsBoard.
LegalReserves“SharePremiums”inthelegalreservestatusandlegalreservesallocatedforspecificpurposes(participationsalesrevenueallocatedtoobtaintaxadvantage)otherthanprofitdistributionallocatedwithintheframeworkoftherelatedClauseofTurkishCommercialCodearereflectedastheirrecordedamounts.Withinthisscope,differencesarisingintheevaluationsmadewithintheframeworkofIFRSprinciplesandinflationadjustmentsnotsubjecttoprofitdistributionorcapital increaseasbythereportdatearerelatedwithpreviousyear’sprofits/losses.
Restricted reserves attributable to equity holders of the Parent31 December
201431 December
2013Legal reserves 127.750.662 123.067.922
f) Retained Earnings/Accumulated deficits
Priorperiods’incomeoftheGroupamountingtoTRY926.629.896isclassifiedtoretainedearningsintheconsolidatedbalancesheetasat31December2014(31December2013:TRY872.118.925).
ProfitDistribution
DividendsaredistributedaccordingtoCommuniquéSerial:II-19.1on“PrinciplesRegardingDistributionofInterimDividendsforquotedentities subject toCapitalMarketBoard Law”, principles on corporate articles anddividenddistributionpolicywhich is declaredbyCompanies.InadditiontotheCMB,itisstipulatedthatcompanieswhichhavetheobligationtoprepareconsolidatedfinancialstatements,calculatethenetdistributableprofitamountbytakingintoaccountthenetprofitsfortheperiodintheconsolidatedfinancialstatementsthatwill bepreparedandannounced to thepublic inaccordancewith theCommuniqué II-14.1 that sufficient reservesexists in theunconsolidatedstatutorybooks.
Theprofitsharesinquotedpartnershipsaredistributedtoallavailablesharedasofdistributiondate,equallyattheratesofshareswithoutconsidering the issue and acquisition dates.
74 TRAKYA CAM SANAYİİ 2014 ANNUAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED 31 DECEMBER 2014 AND 2013(Amounts are expressed in Turkish Lira (“TRY”) unless otherwise indicated.)
TRAKYA CAM SANAYİİ A.Ş. Convenience Translation Into English of Consolidated Financial Statements Originally Issued In Turkish (Note 2.8)
Reservessubjecttodistributionofdividend
TheCompany’snetdistributableprofitstatutoryaccountsandtheamountofreservessubjecttodividenddistributionasofbalancesheetdatearelistedasbelow.
31 December
201431 December
2013Netprofitfortheyear 267.526.386 93.654.801I.Legalreserves (13.376.319) (4.682.740)
Distributable profit for the year 254.150.067 88.972.061Extraordinary reserves 460.785.540 429.774.817Retained earnings 88.972.061 131.311.769
803.907.668 650.058.648
On3April2014,attheordinaryGeneralAssemblyMeetingofTrakyaCamSanayiiA.Ş.,oneofoursubsidiaries,itwasdecidedthatthecashdividendsamountingtoTRY29,000,000equalingto4,0845%ofsharecapitalandbonussharesamountingtoTRY29,000,0000equalingto4,0845%ofsharecapitalwouldbedistributedandtheremainingbalanceamountingtoTRY30.972.061,36 issettedasextraordinary reserves.
28. REVENUE AND COST OF SALES
Sales
1 January -31 December
2014
1 January -31 December
2013Sales 2.132.551.390 1.584.087.510Sales discount (106.668.201) (91.003.919)Sales returns (5.905.924) (3.829.639)Othersalesdiscounts (1.359.657) (1.160.231)
2.018.617.608 1.488.093.721
Cost of sales
1 January-31 December
2014
1 January-31 December
2013Directmaterials (986.303.011) (696.827.340)Directlabor (118.328.468) (94.203.831)Generalproduction (233.911.963) (170.509.793)Depreciation (131.066.782) (92.468.745)Changeinwork-in-progressinventories (14.180.367) 1.987.073Change in finished goods inventories 73.884.003 12.944.857
Cost of goods sold (1.409.906.588) (1.039.077.779)
Cost of traded goods sold (42.391.761) (27.065.957)Cost of services given (40.859) -
(1.452.339.208) (1.066.143.736)
75
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED 31 DECEMBER 2014 AND 2013(Amounts are expressed in Turkish Lira (“TRY”) unless otherwise indicated.)
TRAKYA CAM SANAYİİ A.Ş. Convenience Translation Into English of Consolidated Financial Statements Originally Issued In Turkish (Note 2.8)
29. GENERAL ADMINISTRATIVE EXPENSES, MARKETING EXPENSES, RESEARCH AND DEVELOPMENT EXPENSES
1 January -31 December
2014
1 January -31 December
2013Generaladministrativeexpenses (167.079.190) (146.722.025)Marketing,sellinganddistributionexpenses (208.483.006) (150.296.217)Research and development expenses (18.453.814) (15.073.235)
(394.016.010) (312.091.477)
30. EXPENSE BY NATURE
1 January -31 December
2014
1 January -31 December
2013Indirectmaterialcosts (7.730.493) (5.396.116)Employeebenefitexpenses (126.089.416) (96.053.391)Outsourcedservices (151.210.405) (122.549.056)Miscellaneousexpenses (89.429.504) (71.178.673)Depreciationandamortization (19.556.192) (16.914.241)
(394.016.010) (312.091.477)
31. OTHER OPERATING INCOME AND EXPENSES
Other Operating Income
1 January -31 December
2014
1 January -31 December
2013Gainonsalesofmouldandmaterial 2.563.999 1.810.747Service income 7.266.324 6.471.959Gainonsalesofscrap 10.339.059 2.436.712Rent income 1.224.965 2.466.952Insurancedamageindemnity 5.630.681 2.550.277Fairincentiveincome 705.664 -Terminated provisions 143 -Commission income 2.644.415 5.646.316Financeincomerelatedtooperatingactivities 49.155.010 38.468.131Priorperiodincomeandprofits 655.930 7.299.595Other 8.096.065 5.450.794
88.282.255 72.601.483
Other operating expenses
1 January -31 December
2014
1 January -31 December
2013Financingexpenserelatedtooperatingactivities (21.459.506) (17.898.143)Provisionexpenses (2.171.868) (2.120.675)Commission expenses (2.465.578) (178.237)Priorperiodexpensesandlosses (1.032.840) (1.534.946)Loss on sales of scrap (715.174) -Indemnities (1.133.389) -Other (2.854.122) (3.263.852)
(31.832.477) (24.995.853)
76 TRAKYA CAM SANAYİİ 2014 ANNUAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED 31 DECEMBER 2014 AND 2013(Amounts are expressed in Turkish Lira (“TRY”) unless otherwise indicated.)
TRAKYA CAM SANAYİİ A.Ş. Convenience Translation Into English of Consolidated Financial Statements Originally Issued In Turkish (Note 2.8)
32. INCOME AND EXPENSES FROM INVESTING ACTIVITIES
Income from Investing Activities
1 January -31 December
2014
1 January -31 December
2013Gainonsalesofmarketablesecurities 129.741.127 -DividendIncome 6.584.126 4.752.950Profitonsalesoftangibleassets 4.394.715 5.358.542
140.719.968 10.111.492
Expense from Investing Activities
1 January -31 December
2014
1 January -31 December
2013Lossonsalesoftangibleassets (4.752.877) (3.111.643)
33. FINANCIAL INCOME AND EXPENSES
Financial Income
1 January -31 December
2014
1 January -31 December
2013Foreignexchangeincome 396.627.214 572.871.573
- Cash and cash equivalents 374.861.939 476.028.964- Borrowings 15.351.122 2.865.832- Bonds issued 461.497 -- Other 5.952.656 93.976.777
Interestincome 33.751.429 27.677.194- Time deposits 19.362.817 16.651.231- Other 14.388.612 11.025.963
430.378.643 600.548.767
Financial Expenses
1 January -31 December
2014
1 January -31 December
2013Foreignexchangeexpense (425.534.088) (571.810.564)-Cash and cash equivalents (330.770.725) (339.783.535)-Borrowings (10.940.730) (81.010.866)-Bond issued (46.611.497) (85.125.000)-Other (37.211.136) (65.891.163)
Interestexpense (54.523.322) (35.166.022)-Borrowings (17.150.544) (13.482.825)-Bonds (22.284.166) (15.644.565)-Other (15.088.612) (6.038.632)
(480.057.410) (606.976.586)
77
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED 31 DECEMBER 2014 AND 2013(Amounts are expressed in Turkish Lira (“TRY”) unless otherwise indicated.)
TRAKYA CAM SANAYİİ A.Ş. Convenience Translation Into English of Consolidated Financial Statements Originally Issued In Turkish (Note 2.8)
Financial Income Expense (Net)
1 January -31 December
2014
1 January -31 December
2013Foreignexchangeexpense (28.906.874) 1.061.009-Cash and cash equivalents 44.091.214 136.245.430-Borrowings 4.410.392 (78.145.034)-Bond issued (46.150.000) (85.125.000)-Other (31.258.480) 28.085.612
Interestexpense (20.771.893) (7.488.828)-Time deposits and borrowings 2.212.273 3.168.406-Bond issued (22.284.166) (15.644.565)-Other (700.000) 4.987.331
(49.678.767) (6.427.819)
34. ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS
The Group’s subsidiary Fritz Holding GmbH plans to sell its fixed assets that has a net value amounting TRY 6.653.536 (2013:TRY6.926.688)andthatisinthecaseofimmediatesalehavingahighprobabilityforsale,areclassifiedunderassetsheldforsaleinaccordancewithIFRS5“AssetsHeldforSalesandDiscontinuedOperations”asofbalancesheetdate.
35. TAXES ON INCOME (INCLUDING DEFERRED TAX ASSETS AND LIABILITIES)
Deferred Tax Assets and Liabilities
TheGrouprecognizesdeferredtaxassetsandliabilitiesbaseduponthetemporarydifferencesbetweenfinancialstatementsasreportedinaccordancewithCMBanditstaxbaseofstatutoryfinancialstatements.ThesedifferencesusuallyresultintherecognitionofrevenueandexpenseitemsindifferentperiodsforCMBandstatutorytaxpurposes.
TurkishTaxLegislationdoesnotpermitaparentcompany,itssubsidiariesandjointventurestofileaconsolidatedtaxreturn,therefore,taxliabilities,asreflectedintheseconsolidatedfinancialstatements,havebeencalculatedonaseparate-entitybasis.Inthisrespectdeferredtaxassetsandliabilitiesofconsolidatedentitiesintheaccompanyingconsolidatedfinancialstatementsarenotoffset.
31 December
201431 December
2013Deferredtaxassets 82.453.916 40.197.181Deferredtaxliabilities(-) (62.899.712) (54.291.686)
Deferred tax liabilities (net) 19.554.204 (14.094.505)
Temporary Differences31 December
201431 December
2013Usefullifeandvaluationdifferencesontangibleandintangibleassets 256.379.726 259.197.257Carryforwardtaxlosses (95.925.795) (54.738.969)Employmentterminationbenefits (54.781.311) (56.619.859)Revaluation of inventories (7.146.585) (108.786)Investmentallowanceutilizedduringtheperiod (291.577.625) (95.707.506)Discountonreceivablesandpayables (1.656.937) (1.381.053)Provisionforlegalexposures (958.882) (4.113.223)Doubtfulreceivables (6.433.590) (4.256.790)Differencesinthevaluationoffinancialassetsavailableforsale 204.186.082 111.445.329Other (929.236) (5.234.949)
1.155.847 148.481.451
78 TRAKYA CAM SANAYİİ 2014 ANNUAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED 31 DECEMBER 2014 AND 2013(Amounts are expressed in Turkish Lira (“TRY”) unless otherwise indicated.)
TRAKYA CAM SANAYİİ A.Ş. Convenience Translation Into English of Consolidated Financial Statements Originally Issued In Turkish (Note 2.8)
Deferred Tax Assets and Liabilities31 December
201431 December
2013Usefullifeandvaluationdifferencesontangibleandintangibleassets 48.182.244 48.377.422Carryforwardtaxlosses (6.677.769) (4.993.786)Employmentterminationbenefits (10.956.262) (12.700.935)Revaluation of inventories (14.172) (21.757)Investmentallowanceutilizedduringtheperiod (58.315.525) (19.141.501)Discountonreceivablesandpayables (331.388) (276.211)Provisionforlegalexposures (191.776) (822.645)Doubtfulreceivables (1.282.134) (851.358)Differencesinthevaluationoffinancialassetsavailableforsale 10.209.304 5.572.266Other (176.726) (1.046.990)
(19.554.204) 14.094.505
Themovementofthedeferredtax(assets)/liabilitiesisasfollows:
1 January -31 December
2014
1 January -31 December
20131January 14.094.505 19.600.813Charged to the statement of income (39.935.087) (11.911.395)Charged to the equity 4.637.038 535.621Currency translation differences 1.649.340 5.869.466
(19.554.204) 14.094.505
Corporate tax
TheGroupissubjecttoTurkishcorporatetaxes.TaxlegislationinTurkeydoesnotpermitaparentcompanyanditssubsidiariestofileaconsolidatedtaxreturn.Therefore,provisionsfortaxesasreflectedintheaccompanyingconsolidatedfinancialstatementsarecalculatedonaseparate-entitybasis.
Corporate tax isappliedon taxablecorporate income,which iscalculated fromthestatutoryaccountingprofitbyaddingbacknon-deductibleexpenses,andbydeductingtherevenuesexemptedfromtax,nontaxablerevenuesandotherdiscounts(ifanypreviousyearlossesandpreferredinvestmentallowances)arededucted.
Theeffectivetaxrateis%20withthebalancesheetdate(31December2013:%20).
Theprincipaltaxrates(%)ofthetaxauthoritiesineachcountryusedtocalculatedeferredtaxesasof30December2014areasfollows:
Country Tax rate (%)Bulgaria 10,0Egypt 20,0Romania 16,0Russia (*) 2,0-20,0Germany 15,0
(*)Russia’sTatarstanregionisusedtaxrateof%2,0,intheotherregionsareusedtaxrate%20,0.
79
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED 31 DECEMBER 2014 AND 2013(Amounts are expressed in Turkish Lira (“TRY”) unless otherwise indicated.)
TRAKYA CAM SANAYİİ A.Ş. Convenience Translation Into English of Consolidated Financial Statements Originally Issued In Turkish (Note 2.8)
InTurkey,advancetaxreturnsarefiledonaquarterlybasis.20%oftemporarytaxrateisappliedduringthetaxationofcorporateincome(2013:20%).
InTurkey,thereisnoprocedureforafinalanddefinitiveagreementontaxassessments.Companiesfiletheirtaxreturnsbetween1-25April followingthecloseof theaccountingyear towhich theyrelate (Companieswithspecialaccountingperiods file their tax returnsbetween1-25of the fourthmonthsubsequent to the fiscal yearend).Taxauthoritiesmay,however,examinesuch returnsand theunderlyingaccountingrecordsandmayreviseassessmentswithinfiveyears.
Lossescanbecarriedforwardforoffsetagainstfuturetaxableincomeforupto5years(Russia10years,Romania7years,Germany10years).Lossescannotbecarriedbackforoffsetagainstprofitsfrompriorperiods.
WiththetermofnotexceedingthecompaniessubsidiaryTrakyaGlassBulgariaEAD’sinvestmentsmorethan%50whichoperationstakeplaceinBulgaria,thecompanycanbenefitfromtaxallowance.Companyhasbenefitedfromthetaxallowanceinyear2013and2012.
IncomeWithholdingTax
In addition to corporate taxes, companies should also calculate income withholding taxes and funds surcharge on any dividendsdistributed,exceptforcompaniesreceivingdividendswhoareresidentcompaniesinTurkeyandTurkishbranchesofforeigncompanies.Thisratewaschangedto15%forallCompaniesasof23July2006.Undistributeddividendsincorporatedinsharecapitalarenotsubjecttoincomewithholdingtax.
Ataxchargeof19.8%appliestoinvestmentincentivesthatwereutilizedviainvestmentincentivecertificatesthatwereobtainedbefore24April2003.Afterthisdate,40%ofinvestmentexpensesincurredwithoutanincentivecertificatecanbedeductedfromtaxablerevenue.There is no tax charge for capital expenditures qualifying for government incentive.
InvestmentIncentive
Investmentallowancesarenotapplicableafter1January2006.Ifcompanies’taxableincomesarenotsufficient,theamountofunusedinvestmentallowanceasof31December2005andtheincentiveallowancesincurredfrom1January2006onwards,canbetransferredtothefollowingyearsinordertobedeductedfromthetaxablerevenuesofthefollowingyears.
LawNo.6009publishedon1August2010allows forunused investmentallowances tobeused in futureperiodswithout limitation.However,thedeterminationofthetaxbasethatcanbeusedfor%25oftheearningsfortheperiod.20%corporatetaxiscalculatedonearningsafterdeductinginvestmentincentives.ThearrangementsmadewiththeLawNo.6009cameintoforcein1August2010tobeappliedonincomefortheyear2010.
CorporateTaxAllowancePractice
Corporate tax allowances canbe taken for regional implementation of investments and large scale investments in accordancewithDecisionNo:2009/15199oftheGovernmentSubsidiesfor Investments,andtheframeworkof5520CorporateIncomeTaxLawNo.32/A.Theseallowancesareusedtoreducetaxpayableuntil the investmentamountascalculatedbasedonan incentiverate in theincentivecertificateisreached.AnallowanceforVATandcustomtaxcanbeutilizedinaccordancewithincentivecertificatesinlinewiththe same decision.
31 December
201431 December
2013Current tax provision 60.295.037 40.045.710Prepaidtaxesandfunds(-) (40.974.462) (20.479.386)
Tax provision in the statement of the financial position 19.320.575 19.566.324
1 January -31 December
2014
1 January -31 December
2013ProvisionforCorporateTaxforcurrentperiod (60.295.037) (40.045.710)Deferredtaxincome 39.935.087 11.911.395
Tax provision in the statement of income (20.359.950) (28.134.315)
80 TRAKYA CAM SANAYİİ 2014 ANNUAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED 31 DECEMBER 2014 AND 2013(Amounts are expressed in Turkish Lira (“TRY”) unless otherwise indicated.)
TRAKYA CAM SANAYİİ A.Ş. Convenience Translation Into English of Consolidated Financial Statements Originally Issued In Turkish (Note 2.8)
Reconciliation of provision for tax
Reconciliation of provision for tax
1 January -31 December
2014
1 January -31 December
2013Profitbeforetaxationandnon-controllinginterest 316.472.016 152.778.210Effective tax rate 20,00% 20,00%
Calculated tax (63.294.403) (30.555.642)
The reconciliation of income tax provision and calculated -Nondeductibleexpenses (2.944.220) (2.927.372)-ReducedCorporateTax 39.174.024 4.054.046-Carryforwardtaxlosses 1.683.983 770.952-Theeffectofforeigncompaniessubjecttodifferenttaxrate 3.435.281 (1.619.476)-Other 1.585.385 2.143.176
Tax provision in the statement of income (20.359.950) (28.134.316)
36. EARNINGS PER SHARE
Earnings per share
1 January -31 December
2014
1 January -31 December
2013Averagenumberofsharesexistingduringtheperiod(totalvalue) 739.000.000 739.000.000Netprofitfortheperiodattributabletoequityholdersoftheparent 283.229.115 117.193.711
Earnings per share 0,3833 0,1586
Totalcomprehensiveincomeattributabletoequityholdersoftheparent 213.660.653 257.738.796
Earnings per share from total comprehensive income 0,2891 0,3488
37. RELATED PARTY TRANSACTIONS
TürkiyeŞişeveCamFabrikalarıA.Ş.isthemainshareholderoftheGroupandTürkiyeİşBankasıA.Ş.istheultimatecontrollingparty.AlltransactionsandbalancesbetweentheGroupanditsconsolidatedsubsidiariesareeliminatedonconsolidationandnotdisclosedinthisnote.
TransactionsamongtheGroupandotherrelatedpartiesaredisclosedbelow.
Deposits held from related parties31 December
201431 December
2013T.İşBankasıA.Ş.-Timedeposits 1.043.782.805 627.607.393-Demanddeposits 5.849.947 40.612.912
1.049.632.752 668.220.305İşbankAG-Timedeposits - 312.390-Demanddeposits 3.990.031 2.390
3.990.031 314.780 Total 1.053.622.783 668.535.085
Loans from related parties31 December
201431 December
2013ŞişecamHolding 21.155.250 64.082.440
81
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED 31 DECEMBER 2014 AND 2013(Amounts are expressed in Turkish Lira (“TRY”) unless otherwise indicated.)
TRAKYA CAM SANAYİİ A.Ş. Convenience Translation Into English of Consolidated Financial Statements Originally Issued In Turkish (Note 2.8)
Thenon-tradereceivablesandpayablesoftheGroupwithitsrelatedpartiesconsistoffinancialloansgiventoandreceivedfromTürkiyeŞişeveCamFabrikalarıA.Ş.anditssubsidiaries.Thesenon-tradereceivablesandpayablesdonothavematurities.InterestisaccruedusingamonthlycurrentaccountinterestratedeterminedbyTürkiyeŞişeveCamFabrikalarıA.Ş.basedonmoneymarkets.ThemonthlyinterestrateusedforDecember2014was0,90%(December2013:0,55%).
Financial liabilities to related parties31 December
201431 December
2013Şişecam(*) 577.867.585 532.513.934
(*)Theparentcompany,T.ŞişeveCamFabrikalarıA.Ş., issuedon9May20137year term, fixed interestbondsamounting toUSD500millionwiththematuritydateMay2020.The interestrateforthebondswasdeterminedas4.25%.Thecapitalpaymentofthebondwouldbemadeatmaturitydate.FundsamountingtoUSD250millionprovidedafterissuanceofthesebondstransferredtotheGroupunderthesameconditionsandtheGroupguaranteedprincipal,interestandotherpaymentsoffundtransferredfromT.ŞişeveCamFabrikalarıA.Ş.
Trade receivables from related parties31 December
201431 December
2013AsmaşAğırSanayiMakinalarıA.Ş. - 3.098.656TrakyaGlassBulgariaEAD 1.983.358 6.031.912
1.983.358 9.130.568
Other receivables from related parties31 December
201431 December
2013SaintGobainGlassEgyptS.A.E. 8.726.680 19.984.777TrakyaCamInvestmentB.V. 944.317 1.270.733TürkiyeŞişeveCamFabrikalarıA.Ş. 225.377 2.455CamişMadencilikA.Ş. 322.260 653.334ŞişecamSigortaAracılıkHizmetleriA.Ş. 600.700 845CamişElektrikÜretimA.Ş. 205.247 875.551PaşabahçeCamSanayiiveTic.A.Ş. 415.530 6.981AnadoluCamYenişehirSanayiA.Ş. 337.341 276.120AnadoluCamSanayiiA.Ş. 9.150 255.556PaşabahçeMağazalarıA.Ş. 23.598 44.884ÇayırovaCamSanayiiA.Ş. - 566SodaSanayiiA.Ş. 3.347.677 12.114.029AnadoluCamEskişehirSanayiA.Ş. - 33.815CamElyafSanayiiA.Ş. - 17.628İşMerkezleriYönetimVeİşletimA.Ş. 17.219 3.848OxyvitKimyaSanayiiVeTic.A.Ş. 12 -
15.175.108 35.541.122
82 TRAKYA CAM SANAYİİ 2014 ANNUAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED 31 DECEMBER 2014 AND 2013(Amounts are expressed in Turkish Lira (“TRY”) unless otherwise indicated.)
TRAKYA CAM SANAYİİ A.Ş. Convenience Translation Into English of Consolidated Financial Statements Originally Issued In Turkish (Note 2.8)
Trade payables to related parties31 December
201431 December
2013SodaSanayiiA.Ş. 11.751.317 11.803.769ŞişecamDışTicaretA.Ş. 8.145.698 10.673.074TrakyaGlassBulgariaEAD 2.400.302 5.969.462CamişMadencilikA.Ş. 2.490.791 79.423ÇayırovaCamSanayiiA.Ş. 7.458.900 1.817.700CamişElektrikÜretimA.Ş. 2.787.744 2.477.395ŞişecamSigortaAracılıkHizmetleriA.Ş. 1.033.154 360.221SaintGobainGlassEgyptS.A.E. 506.558 -CamişEgyptMiningLtd.Co. - -OOORuscamGlassPackagingHolding 14.412 -CamişAmbalajSanayiiA.Ş. 9.958 -CamElyafSanayiiA.Ş. 13.934 94.340İşMerkezleriYönetimVeİşletimA.Ş. 15.461 19.473PaşabahçeMağazalarıA.Ş. 2.859 1.118PaşabahçeCamSanayiiveTic.A.Ş. 1.839 75.917AnadoluCamSanayiiA.Ş. - 22.887AnadoluCamEskişehirSanayiA.Ş. 93 13.114AsmaşAğırSanayiMakinalarıA.Ş. - 2.295.301AnadoluCamInvestmentB.V. - 47.431OOORuscamHolding - 16.751OAORuscamPokrovsky - 6.477AnadoluCamYenişehirSanayiA.Ş. - 1.583Other - 197
36.633.020 35.775.633
Trade payables to related parties31 December
201431 December
2013TürkiyeŞişeveCamFabrikalarıA.Ş. 169.200.124 54.042.548
83
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED 31 DECEMBER 2014 AND 2013(Amounts are expressed in Turkish Lira (“TRY”) unless otherwise indicated.)
TRAKYA CAM SANAYİİ A.Ş. Convenience Translation Into English of Consolidated Financial Statements Originally Issued In Turkish (Note 2.8)
Interest income from related parties
1 January -31 December
2014
1 January -31 December
2013T.İşBankasıA.Ş. 17.532.129 14.262.500SodaSanayiiA.Ş. 301.300 969.662SaintGobainGlassEgyptS.A.E. 252.422 118.926TrakyaGlassBulgariaEAD 89.453 -CamişElektrikÜretimA.Ş. 35.287 23.375TrakyaCamInvestmentB.V. 13.880 12.073AnadoluCamYenişehirSanayiA.Ş. 15.720 10.899PaşabahçeCamSanayiiveTic.A.Ş. 8.314 52.220TürkiyeŞişeveCamFabrikalarıA.Ş. 5.735 3.502.721AnadoluCamSanayiiA.Ş. 4.906 21.482PaşabahçeMağazalarıA.Ş. 4.784 1.885CamişMadencilikA.Ş. 31.313 64.075AnadoluCamEskişehirSanayiA.Ş. 1.102 2.284ŞişecamDışTicaretA.Ş. 678 -CamElyafSanayiiA.Ş. 226 -ÇayırovaCamSanayiiA.Ş. - 51.751
18.297.249 19.093.853
Interest expense to related parties
1 January -31 December
2014
1 January -31 December
2013TürkiyeŞişeveCamFabrikalarıA.Ş. 12.669.765 2.100.278T.İşBankasıA.Ş. 4.502.994 1.282.064İşbankAG 463.914 -ÇayırovaCamSanayiiA.Ş. 554.528 86.728CamişMadencilikA.Ş. 404.330 158.456ŞişecamDışTicaretA.Ş. 113.238 105.405SodaSanayiiA.Ş. 99.676 15.278PaşabahçeCamSanayiiveTic.A.Ş. 17.841 7.832CamElyafSanayiiA.Ş. 1.565 5.991AnadoluCamSanayiiA.Ş. 8.157 1.803AnadoluCamEskişehirSanayiA.Ş. 1.718 416AnadoluCamYenişehirSanayiA.Ş. 206 41CamişAmbalajSanayiiA.Ş. 149 -CamişElektrikÜretimA.Ş. 1.035 52.146PaşabahçeMağazalarıA.Ş. 51 56
18.839.167 3.816.494
84 TRAKYA CAM SANAYİİ 2014 ANNUAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED 31 DECEMBER 2014 AND 2013(Amounts are expressed in Turkish Lira (“TRY”) unless otherwise indicated.)
TRAKYA CAM SANAYİİ A.Ş. Convenience Translation Into English of Consolidated Financial Statements Originally Issued In Turkish (Note 2.8)
Dividend income from related parties
1 January -31 December
2014
1 January -31 December
2013PaşabahçeCamSanayiiveTic.A.Ş. 1.654.931 1.323.945SodaSanayiiA.Ş. 4.929.195 3.429.005
6.584.126 4.752.950
Other income from related parties
1 January-31 December
2014
1 January-31 December
2013TrakyaGlassBulgariaEAD(*) 46.764.544 54.304.933PaşabahçeCamSanayiiveTic.A.Ş. 900.765 1.321.454SaintGobainGlassEgyptS.A.E. 1.094.019 259.174İşbankAG 320.657 -AnadoluCamYenişehirSanayiA.Ş. 361.687 56.340CamişMadencilikA.Ş. 202.523 404.889PaşabahçeMağazalarıA.Ş. 124.548 115.848HNGFloatGlassLimited 76.911 -ÇayırovaCamSanayiiA.Ş. 146.078 78.000AnadoluCamSanayiiA.Ş. 41.504 168.944CamişElektrikÜretimA.Ş. 20.742 19.040DenizliCamSanayiiveTic.A.Ş. 1.510 -T.İşBankasıA.Ş. - 327.800TürkiyeŞişeveCamFabrikalarıA.Ş. - 2.992
50.055.488 57.059.414(*)TheamountconsistsofsalesoftradedgoodstoTrakyaGlassBulgaria.
85
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED 31 DECEMBER 2014 AND 2013(Amounts are expressed in Turkish Lira (“TRY”) unless otherwise indicated.)
TRAKYA CAM SANAYİİ A.Ş. Convenience Translation Into English of Consolidated Financial Statements Originally Issued In Turkish (Note 2.8)
Other expenses to related parties
1 January -31 December
2014
1 January -31 December
2013SodaSanayiiA.Ş.(1) 154.507.817 109.380.906CamişMadencilikA.Ş.(2) 65.021.695 54.603.184TrakyaGlassBulgariaEAD(3) 58.781.579 41.302.212CamişElektrikÜretimA.Ş. 23.326.774 20.226.325CamişEgyptMiningLtd.Co. 9.995.749 8.831.438AnadoluAnonimTürkSigortaA.Ş. - 2.364.889İşGayrimenkulYatırımOrtaklığıA.Ş. 2.346.219 2.176.584TürkiyeŞişeveCamFabrikalarıA.Ş. 3.910.438 1.654.972ŞişecamDışTicaretA.Ş. 1.502.052 1.162.106İşMerkezleriYönetimVeİşletimA.Ş. 928.938 933.501SaintGobainGlassEgyptS.A.E. 181.790 883.956OOORuscamGlassPackagingHolding 265.341 213.207AnadoluCamSanayiiA.Ş. 139.847 130.875T.İşBankasıA.Ş. 141.970 272.058PaşabahçeCamSanayiiveTic.A.Ş. 147.344 114.770PaşabahçeMağazalarıA.Ş. 14.982 23.311CamişMenkulDeğerlerA.Ş. - 31.353CamişAmbalajSanayiiA.Ş. 7.526 6.284İşbankAG 6.739 -İşYatırımMenkulDeğerlerA.Ş. 144.213 2.407.225ÇayırovaCamSanayiiA.Ş. - 428.653AnadoluCamInvestmentB.V. - 40.850AsmaşAğırSanayiMakinalarıA.Ş. - 3.497.324OOORuscamPokrovsky - 5.934
321.371.013 250.691.917(1)ItconsistsofpurchasesofsodafromSodaSanayii.(2)ItconsistsofpurchasesofsandfromCamişMadencilik.(3)ItconsistsofpurchasesoftradegoodsfromTrakyaGlassBulgariaEAD.
Benefits provided to key management
1 January -31 December
2014
1 January -31 December
2013Parent 4.350.639 4.613.363Consolidated entities 7.997.872 2.370.407
12.348.511 6.983.770
Keymanagementpersonnelarecomposedoftopmanagement,membersofboardofdirectors,generalmanagerandgeneralmanagerassistantsandfactorydirectors.TheGroupdidnotprovidekeymanagementwithsharebasedpayments,severancepay,retirementbenefitsandotherlongtermbenefitsin2014and2013.
86 TRAKYA CAM SANAYİİ 2014 ANNUAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED 31 DECEMBER 2014 AND 2013(Amounts are expressed in Turkish Lira (“TRY”) unless otherwise indicated.)
TRAKYA CAM SANAYİİ A.Ş. Convenience Translation Into English of Consolidated Financial Statements Originally Issued In Turkish (Note 2.8)
38. FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT
a) Capital Risk Management
TheGroupmanagesitscapitaltoensurethatitwillbeabletocontinueasagoingconcernwhilemaximizingthereturntostakeholdersthroughtheoptimizationofthedebtandequitybalance.
ThecapitalstructureoftheGroupconsistsofdebt,whichincludestheborrowingsandotherdebtsdisclosedinNote8and10,cashandcashequivalentsdisclosedinNote6andequityattributabletoequityholdersoftheparent,comprisingissuedcapital,reservesandretainedearningsasdisclosedinNote27.
TheGroupcontrolsitscapitalusingthenetdebt/totalcapitalratio.Thisratioiscalculatedasnetdebtdividedbythetotalequityamount.Netdebt,totaldebtnetofcashandcashequivalents(asshowninthebalancesheetoffinancialassetsandliabilities,financialleasesandtradepayables)iscalculatedbysubtracting.
Asof31December2014and31December2013theGroup’snetdebt/totalequityratiosareasfollows:
31 December
201431 December
2013Financialliabilitiesandtradepayables 1.419.893.276 1.269.385.191Less:Cashandcashequivalents (1.126.878.527) (805.530.347)
Net Debt 293.014.749 463.854.844
Total Equity 2.537.101.185 2.332.117.925
Net debt/total equity ratio 12% 20%
TheGroup’sgeneralstrategyisinlinewithpriorperiods.
b) Factors of Financial Risk
TheGroup’sactivitiesexposeittovariousfinancialrisks,marketrisk(includingcurrencyrisk,fairvalueinterestraterisk,cashflowinterestrateriskandpricerisk),creditriskandliquidityrisk.TheGroup’soverallriskmanagementprogramfocusesontheunpredictabilityoffinancialmarketsandseekstominimizethepotentialadverseeffectsovertheGroup’sfinancialperformance.
TheGroupmanagesitsfinancialinstrumentscentrallyinaccordancewiththeGroup’sriskpoliciesviaFinancialTransactionsDepartment.TheGroup’scashinflowsandoutflowsaremonitoredbythereportspreparedonadaily,weeklyandmonthlybasisandcomparedtothemonthlyandyearlycashflowbudgets.
RiskmanagementiscarriedoutbytheRiskManagementDepartment,whichisindependentfromsteering,underthepoliciesapprovedbytheBoardofDirectors.TheGroup’sRiskManagementDepartmentidentifies,evaluatesandhedgesfinancialrisksinclosecooperationwiththeGroup’soperatingunits.TheBoardofDirectorssetsoutwrittenprinciplesforoverallriskmanagement,aswellaswrittenpoliciescoveringspecificareas,suchas; foreignexchange risk, interest rate risk,credit risk,useofderivative financial instrumentsandnon-derivativefinancialinstruments,andinvestmentofexcessliquidity.
b.1)CreditRiskManagement
Credit risk refers to the risk thatcounterpartywilldefaulton itscontractualobligations.TheGroup’smanagementmitigates this riskthroughlimitationsonthecontractsmadewithcounterpartiesandobtainingsufficientcollateralswhereappropriate.TheGroup’screditrisksmainlyarisefromitstradereceivables.TheGroupmanagesthisriskbythecreditlimitsuptotheguaranteesreceivedfromcustomers.UseofcreditlimitsismonitoredbytheGroupbytakingintoconsiderationthecustomer’sfinancialposition,pastexperiencesandotherfactorsandcustomer’scredibilityisevaluatedonaconsistentbasis.TradereceivablesareevaluatedbasedontheGroup’spoliciesandproceduresandpresentednetofdoubtfulprovisioninthefinancialstatementsaccordingly(Note10).
Tradereceivablesconsistofmanycustomersoperatinginvariousindustriesandlocations.Creditriskofthereceivablesfromcounterparties is evaluated periodically.
87
NO
TES
TO T
HE
CON
SOLI
DATE
D F
INA
NCI
AL
STAT
EMEN
TSFO
R TH
E YE
ARS
EN
DED
31 D
ECEM
BER
2014
AN
D 2
013
(Am
ount
s ar
e ex
pres
sed
in T
urki
sh L
ira (“
TRY”
) unl
ess
othe
rwise
indi
cate
d.)
TRAK
YA C
AM S
AN
AYİİ
A.Ş.
Co
nven
ienc
e Tr
ansla
tion
Into
Eng
lish
of C
onso
lidat
ed F
inan
cial
Sta
tem
ents
Orig
inal
ly Is
sued
In T
urki
sh (N
ote
2.8)
Cre
dit r
isk
of fi
nanc
ial i
nstru
men
ts
Rece
ivab
les
Trad
e re
ceiv
able
sO
ther
rece
ivab
les
Cas
h an
d ca
sh
equi
vale
nts
Der
ivat
ive
finan
cial
in
stru
men
tsRe
late
d pa
rtyTh
ird
party
Re
late
d pa
rtyTh
ird
party
Max
imum
cre
dit r
isk
expo
sed
as o
f 31
Dec
embe
r 201
4 (*)
(A+B
+C+D
+E)
1.98
3.35
831
5.44
9.35
715
.175
.108
5.05
4.69
71.
126.
876.
399
-
- Hed
ged
part
of m
axim
um ri
sk w
ith c
olla
tera
l-
(143
.412
.815
)-
--
-
A.Netbookvalueoffinancialassetsthatareneitherpastduenorim
paired
1.983.358
264.947.401
15.175.108
5.054.697
1.126.876.399
--Thepartofw
hichisunderguaranteewithcollateral
-(128.934.577)
--
--
B.Netbookvalueoffinancialassetsthatarerenegotiated,
--
--
--
otherwisethatwillbeconsideredaspastdueorimpaired
--
--
--
-Thepartofw
hichisunderguaranteewithcollateral
--
--
--
C.Netbookvalueoffinancialassetsthatarepastduebutnotim
paired
-50.501.956
--
--
-Thepartofw
hichisunderguaranteewithcollateral
-(14.478.238)
--
--
--
--
--
D.Netbookvalueofim
pairedassets
--
--
--
-Pastdue(grosscarryingam
ount)
-6.470.730
--
--
-Impairm
ent(-)
-(6.470.730)
--
--
-Thepartofnetvalueunderguaranteewithcollateral
--
--
--
-Notpastdue(grosscarryingam
ount)
--
--
--
-Impairm
ent(-)
--
--
--
-Thepartofnetvalueunderguaranteewithcollateral
--
--
--
-
E.Offbalancesheetitemswithcreditrisk
--
--
--
(*) Determinationoftheam
ountreceivedasguarantees,creditenhancementsarenottakenintoaccount
88 TRAKYA CAM SANAYİİ 2014 ANNUAL REPORT
NO
TES
TO T
HE
CON
SOLI
DATE
D F
INA
NCI
AL
STAT
EMEN
TSFO
R TH
E YE
ARS
EN
DED
31 D
ECEM
BER
2014
AN
D 2
013
(Am
ount
s ar
e ex
pres
sed
in T
urki
sh L
ira (“
TRY”
) unl
ess
othe
rwise
indi
cate
d.)
TRAK
YA C
AM S
AN
AYİİ
A.Ş.
Co
nven
ienc
e Tr
ansla
tion
Into
Eng
lish
of C
onso
lidat
ed F
inan
cial
Sta
tem
ents
Orig
inal
ly Is
sued
In T
urki
sh (N
ote
2.8)
Rece
ivab
les
Trad
e re
ceiv
able
sO
ther
rece
ivab
les
Cas
h an
d ca
sh
equi
vale
nts
Der
ivat
ive
finan
cial
in
stru
men
tsC
redi
t ris
ks e
xpos
ed th
roug
h ty
pes
of fi
nanc
ial i
nstru
men
tsRe
late
d pa
rtyTh
ird p
arty
Re
late
d pa
rtyTh
ird p
arty
Max
imum
cre
dit r
isk
expo
sed
as o
f 31
Dec
embe
r 201
3 (*) (A
+B+C
+D+E
)9.
130.
568
322.
933.
873
35.5
41.1
226.
525.
204
805.
522.
827
-- H
edge
d pa
rt of
max
imum
risk
with
col
late
ral
-(1
62.3
91.2
59)
--
--
A.Netbookvalueoffinancialassetsthatareneitherpastduenorim
paired
9.130.568
267.323.841
35.541.122
6.525.204
805.522.827
--Thepartofw
hichisunderguaranteewithcollateral
-(146.021.454)
--
--
B.Netbookvalueoffinancialassetsthatarerenegotiated,
--
--
--
otherwisethatwillbeconsideredaspastdueorimpaired
--
--
--
-Thepartofw
hichisunderguaranteewithcollateral
--
--
--
C.Netbookvalueoffinancialassetsthatarepastduebutnotim
paired
-55.610.032
--
--
-Thepartofw
hichisunderguaranteewithcollateral
-(16.369.805)
--
--
D.Netbookvalueofim
pairedassets
--
--
--
-Pastdue(grosscarryingam
ount)
-4.394.758
--
--
-Impairm
ent(-)
-(4.394.758)
--
--
-Thepartofnetvalueunderguaranteewithcollateral
--
--
--
-Notpastdue(grosscarryingam
ount)
--
--
--
-Impairm
ent(-)
--
--
--
-Thepartofnetvalueunderguaranteewithcollateral
--
--
--
E.Offbalancesheetitemswithcreditrisk
--
--
--
(*) Factorsthatincreasethecreditreliability,suchas;guaranteesreceived,arenotconsideredinthecalculation
89
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED 31 DECEMBER 2014 AND 2013(Amounts are expressed in Turkish Lira (“TRY”) unless otherwise indicated.)
TRAKYA CAM SANAYİİ A.Ş. Convenience Translation Into English of Consolidated Financial Statements Originally Issued In Turkish (Note 2.8)
Guaranteesreceivedfromthecustomersareasfollows:
31 December
201431 December
2013Letters of guarantee 80.822.531 118.535.218Securitychecksandbonds 18.385.528 13.571.597Mortgages 9.330.000 8.796.713Other 34.874.756 21.487.731
143.412.815 162.391.259
Agingofoverduereceivableswhicharenotsubjecttoimpairmentisasfollows:
31 December
201431 December
2013Overdue1-30days 32.837.815 21.717.367Overdue1-3months 12.485.176 16.831.968Overdue3-12months 5.178.965 15.109.519Overdue1-5years - 1.951.179
Total overdue receivables 50.501.956 55.610.033
The part under guarantee with collateral (-) 14.478.238 16.369.805
b.2)LiquidityRiskManagement
TheGroupmanages its liquidity risk bymaintaining adequate reserves, banking facilities and reserve borrowing facilities through aconstantmonitoringforecastandactualcashflowsandmatchingthematurityprofileofthefinancialassetsandliabilities.
Liquidity Risk Tables
Conservativeliquidityriskmanagementrequiresmaintainingadequatereservesinadditiontohavingtheabilitytoutilizeadequatelevelofcreditlinesandfundsaswellasclosingmarketpositions.
Fundingriskattributabletothecurrentandfuturepotentialborrowingneedsismanagedbyprovidingcontinuousaccesstoadequatenumberofcreditorswithhighquality
90 TRAKYA CAM SANAYİİ 2014 ANNUAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED 31 DECEMBER 2014 AND 2013(Amounts are expressed in Turkish Lira (“TRY”) unless otherwise indicated.)
TRAKYA CAM SANAYİİ A.Ş. Convenience Translation Into English of Consolidated Financial Statements Originally Issued In Turkish (Note 2.8)
The below table shows theGroup’s expectedmaturity for financial liabilities. The tables below have been drawn up based on theundiscountedcontractualmaturitiesofthefinancialassets.Interesttobepaidinfutureonfinancialliabilitiesisincludedinthetablebelow.
31 December 2014
Non-derivative financial Liabilities Carrying value
Total cash outflow in
accordance to contract (I+II+III+IV)
Less than 3 months (I)
3-12months (II) 1-5 years(III)
More than 5 years(IV)
Bankborrowings 639.307.615 648.377.234 22.474.610 199.544.056 385.585.827 40.772.741Duetorealtedparties(Note37) 599.022.835 745.483.704 8.542.042 42.730.006 102.167.500 592.044.156Financeleaseobligations 3.718.256 3.718.257 - - - 3.718.257Tradepayables 141.211.550 141.754.602 139.349.309 2.193.752 211.541 -Duetorelatedparties 205.833.144 205.833.144 205.833.144 - - -Otherpayables 7.155.002 7.155.002 7.051.083 - 103.919 -
Total Liabilities 1.596.248.402 1.752.321.943 383.250.188 244.467.814 488.068.787 636.535.154
31 December 2013
Non-derivative financial Liabilities Carrying value
Total cash outflow in
accordance to contract (I+II+III+IV)
Less than 3 months (I) 3-12months 1-5 years(III)
More than 5 years(IV)
Bankborrowings 498.413.421 530.949.553 9.261.945 132.387.790 283.872.385 105.427.433Duetorealtedparties(Note37) 596.596.374 748.023.719 6.457.951 59.206.059 114.192.379 568.167.330Financeleaseobligations 5.394.612 5.394.612 - 202.081 5.192.531 -Tradepayables 133.205.151 133.475.214 133.285.101 190.113 - -Duetorelatedparties 89.818.181 89.818.181 89.818.181 - - -Otherpayables 11.122.723 11.122.723 9.810.189 - 1.312.534 -
Total Liabilities 1.334.550.462 1.518.784.002 248.633.367 191.986.043 404.569.829 673.594.763
91
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED 31 DECEMBER 2014 AND 2013(Amounts are expressed in Turkish Lira (“TRY”) unless otherwise indicated.)
TRAKYA CAM SANAYİİ A.Ş. Convenience Translation Into English of Consolidated Financial Statements Originally Issued In Turkish (Note 2.8)
b.3)MarketRiskManagement
TheGroup’sactivitiesexposeitprimarilytothefinancialrisksofchangesinforeignexchangeratesandinterestrates.AtaGrouplevel,marketriskexposuresaremeasuredbysensitivityanalysis.Whencomparedtopriorperiods,therehasbeennochangeintheGroup’sexposuretomarketrisks,hedgingmethodsusedorthemeasurementmethodsusedforsuchrisks.
b.3.1)ForeignCurrencyRiskManagement
ForeigncurrencytransactionsexposetheGrouptoforeigncurrencyrisk.Group,itssubsidiariesandaffiliatesisavailableaccordingtothecountriesinwhichitoperatescurrenciesotherthanthefunctionalcurrenciesoftheforeigncurrencyaccepted.
Foreign Currency Position Statement for the Year End 31 December 2014
TRY equivalent USD EUR Other
1. Tradereceivables 76.628.662 6.677.139 25.042.957 1.728.0292a. Monetaryfinancialassets(includedcashandbanks
account) 1.126.027.434 313.130.564 127.776.554 39.489.6452b. Non-monetaryfinancialassets - - - -3. Other - - - -4. Current Assets (1+2+3) 1.202.656.096 319.807.703 152.819.511 41.217.6745. TradeReceivables - - - -6a. Monetaryfinancialassets - - - -6b. Non-monetaryfinancialassets - - - -7. Other - - - -8. Non-Current Assets (5+6+7) - - - -9. Total Assets (4+8) 1.202.656.096 319.807.703 152.819.511 41.217.674
10. Tradepayables 51.411.608 2.038.995 13.903.761 7.465.04611. Financialliabilities 258.745.406 15.539.853 54.906.326 67.835.76812a. Othermonetaryliabilities - - - -12b. Othernon-monetaryliabilities - - - -13. Current Liabilities (10+11+12) 310.157.014 17.578.848 68.810.087 75.300.81414. Tradepayables - - - -15. Financialliabilities 968.766.895 255.159.014 102.683.905 87.438.16716a. Othermonetaryliabilities - - - -16b. Othernon-monetaryliabilities - - - -17. Non-Current Liabilities (14+15+16) 968.766.895 255.159.014 102.683.905 87.438.16718. Total Liabilities (13+17) 1.278.923.909 272.737.862 171.493.992 162.738.981
19. Netforeigncurrencyasset/(liability)position(19a-19b) - - - -
19a. Total amount of assets hedged - - - -19b. Totalamountofliabilitieshedgedı - - - -
20. Net foreign currency position for monetary items (9+18+19) (76.267.813) 47.069.841 (18.674.481) (121.521.307)
21. Monetary items net foreign asset/liabilities position (76.267.813) 47.069.841 (18.674.481) (121.521.307)
22. Fairvalueofderivativeinstrumentsusedinforeigncurrency hedge - - - -
23. Export 300.967.427 51.343.711 62.770.609 4.849.438
24. Import 210.689.670 10.786.834 65.446.989 1.069.757
92 TRAKYA CAM SANAYİİ 2014 ANNUAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED 31 DECEMBER 2014 AND 2013(Amounts are expressed in Turkish Lira (“TRY”) unless otherwise indicated.)
TRAKYA CAM SANAYİİ A.Ş. Convenience Translation Into English of Consolidated Financial Statements Originally Issued In Turkish (Note 2.8)
Foreign Currency Position Statement for the Year End 31 December 2013
TRY equivalent USD EUR Other
1. Tradereceivables 116.020.163 10.498.103 28.580.482 1.930.8332a. Monetaryfinancialassets(includedcashandbanks
account)802.587.076 288.957.933 61.340.018 5.739.197
2b. Non-monetaryfinancialassets - - - -3. Other - - - -
4. Current Assets (1+2+3) 918.607.239 299.456.036 89.920.500 7.670.0305. TradeReceivables - - - -6a. Monetaryfinancialassets - - - -6b. Non-monetaryfinancialassets - - - -7. Other - - - -
8. Non-Current Assets (5+6+7) - - - -9. Total Assets (4+8) 918.607.239 299.456.036 89.920.500 7.670.030
10. Tradepayables 59.123.470 1.465.437 16.729.776 6.868.80111. Financialliabilities 171.180.668 16.047.983 46.425.790 9.264.04812a. Othermonetaryliabilities - - - -12b. Othernon-monetaryliabilities - - - -
13. Current Liabilities (10+11+12) 230.304.138 17.513.420 63.155.566 16.132.84914. Tradepayables - - - -15. Financialliabilities 910.330.978 269.756.886 89.089.098 72.978.71916a. Othermonetaryliabilities - - - -16b. Othernon-monetaryliabilities - - - -
17. Non-Current Liabilities (14+15+16) 910.330.978 269.756.886 89.089.098 72.978.71918. Total Liabilities (13+17) 1.140.635.116 287.270.306 152.244.664 89.111.568
19. Netforeigncurrencyasset/(liability)position(19a-19b)
- - - -
19a. Total amount of assets hedged - - - -19b. Totalamountofliabilitieshedged - - - -
20. Net foreign currency position for monetary items (9+18+19)
(222.027.877) 12.185.730 (62.324.164) (81.441.538)
21. Fair value of derivative instruments used in
foreign currency hedge(222.027.877) 12.185.730 (62.324.164) (81.441.538)
22. Fairvalueofderivativeinstrumentsusedinforeigncurrency hedge
- - - -
23. Export 231.371.789 44.195.397 56.826.786 3.607.791
24. Import 163.504.119 19.648.431 49.802.923 911.973
93
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED 31 DECEMBER 2014 AND 2013(Amounts are expressed in Turkish Lira (“TRY”) unless otherwise indicated.)
TRAKYA CAM SANAYİİ A.Ş. Convenience Translation Into English of Consolidated Financial Statements Originally Issued In Turkish (Note 2.8)
TheGroupismainlyexposedtoEURandUSDrisks.
ThetablebelowpresentstheGroup’ssensitivity toa10%deviation in foreignexchangerates (especiallyUSDandEUR).10%istherateusedbytheGroupwhengeneratingitsreportonexchangeraterisk;therelatedratestandsforthepresumedpossiblechangeintheforeigncurrencyratesbytheGroup’smanagement.Thesensitivityanalysisincludesonlyoutstandingforeigncurrencydenominatedmonetaryitemsandadjuststheirtranslationattheperiodendfora10%changeinforeigncurrencyrates.Thisanalysisincludesforeigncurrencydenominatedbank loansotherthanthefunctionalcurrencyoftheultimateuserorborrowerofthebank loans.Thepositiveamountindicatesincreaseinprofit/lossbeforetaxorequity.
Exchange Rate Risk Sensitivity
31 December 2014Profit/(Loss) Equity
Appreciation of foreign currency
Devaluation of foreign currency
Appreciation of foreign currency
Devaluation of foreign currency
AppreciationofUSDagainstTRYby10%1-USDollarsnetasset/liability 10.915.025 (10.915.025) - -2-USDriskhedgedamount(-) - - - -
3 - USD net effect (1 +2) 10.915.025 (10.915.025) - -
AppreciationofEUROagainstTRYby10%4-Euronetasset/liability (5.267.511) 5.267.511 67.337.985 (67.337.985)5-Euroriskhedgedamount(-) - - - -
6 - Euro net effect (4+5) (5.267.511) 5.267.511 67.337.985 (67.337.985)
AppreciationofothercurrenciesagainstTRYby10%7-Othercurrenciesnetasset/liability (12.152.131) 12.152.131 26.505.639 (26.505.639)8-Othercurrenciesriskhedgedamount(-) - - - -
9 - Other currencies net effect (7+8) (12.152.131) 12.152.131 26.505.639 (26.505.639)
Total (3+6+9) (6.504.617) 6.504.617 93.843.624 (93.843.624)
94 TRAKYA CAM SANAYİİ 2014 ANNUAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED 31 DECEMBER 2014 AND 2013(Amounts are expressed in Turkish Lira (“TRY”) unless otherwise indicated.)
TRAKYA CAM SANAYİİ A.Ş. Convenience Translation Into English of Consolidated Financial Statements Originally Issued In Turkish (Note 2.8)
31 December 2013Profit/(Loss) Equity
Appreciation of foreign currency
Devaluation of foreign currency
Appreciation of foreign currency
Devaluation of foreign currency
AppreciationofUSDagainstTRYby10%1-USDollarsnetasset/liability 2.600.800 (2.600.800) - -2-USDriskhedgedamount(-) - - - -
3 - USD net effect (1 +2) 2.600.800 (2.600.800) AppreciationofEUROagainstTRYby10%4-Euronetasset/liability5-Euroriskhedgedamount(-) (18.301.491) 18.301.491 64.577.029 (64.577.029)
6 - Euro net effect (4+5) - - - -
AppreciationofothercurrenciesagainstTRYby10% (18.301.491) 18.301.491 64.577.029 (64.577.029)7-Othercurrenciesnetasset/liability8-Othercurrenciesriskhedgedamount(-)
9 - Other currencies net effect (7+8) (846.282) 846.282 6.168.487 (6.168.487)AppreciationofUSDagainstTRYby10% - - - -
1-USDollarsnetasset/liability (846.282) 846.282 6.168.487 (6.168.487)
Total (3+6+9) (16.546.973) 16.546.973 70.745.516 (70.745.516)
b.3.2) Interest rate risk management
TheGroup’sexposuretointerestrateriskisrelatedtoitsfinancialliabilities.TheGroup’sfinancialliabilitiesmostlyconsistoffloatinginterestrateborrowings.BasedonthecurrentbalancesheetcompositionandanalysiscalculatedbytheGroup,iftheTRYinterestrateswereincreased/decreasedby1%andforeigncurrencyinterestrateswereincreased/decreasedby0.25%withtheassumptionofkeepingallothervariablesconstant,theeffectonnetprofit/lossfortheperiodbeforetaxationandnon-controllinginterestwoulddecrease/increasebyTRY1.316.683asof31December2014(31December2013:TRY1.197.267).
95
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED 31 DECEMBER 2014 AND 2013(Amounts are expressed in Turkish Lira (“TRY”) unless otherwise indicated.)
TRAKYA CAM SANAYİİ A.Ş. Convenience Translation Into English of Consolidated Financial Statements Originally Issued In Turkish (Note 2.8)
TheGroup’sfinancialinstrumentsthataresensitivetointerestratesareasfollows:
31 December 2014Floating interest Fixed interest
Non interest bearing Total
Financial assets - 1.400.153.341 697.716.851 2.097.870.192Cash and cash equivalents - 1.062.490.821 64.387.706 1.126.878.527Availableforsalefinancials - - 633.329.145 633.329.145Tradereceivables - 315.449.357 - 315.449.357Duefromrelatedparties - 17.158.466 - 17.158.466Otherreceivables - 5.054.697 - 5.054.697
Financial liabilities 526.673.110 1.065.197.799 4.377.493 1.596.248.402Bankborrowings 526.673.110 707.279.847 4.377.493 1.238.330.450Financialleasingliabilities - 3.718.256 - 3.718.256Tradepayables - 141.211.550 - 141.211.550Duefromrelatedparties - 205.833.144 - 205.833.144Otherpayables - 7.155.002 - 7.155.002
31 December 2013Floating interest Fixed interest
Non interest bearing Total
Financial assets - 1.090.095.904 248.312.923 1.338.408.827Cash and cash equivalents - 715.965.137 89.565.210 805.530.347Availableforsalefinancials - - 158.747.713 158.747.713Tradereceivables - 322.933.873 - 322.933.873Duefromrelatedparties - 44.671.690 - 44.671.690Otherreceivables - 6.525.204 - 6.525.204
Financial liabilities 478.906.847 852.158.025 3.485.589 1.334.550.462Bankborrowings 478.906.847 612.617.358 3.485.589 1.095.009.795Financialleasingliabilities - 5.394.612 - 5.394.612Tradepayables - 133.205.151 - 133.205.151Duefromrelatedparties - 89.818.181 - 89.818.181Otherpayables - 11.122.723 - 11.122.723
96 TRAKYA CAM SANAYİİ 2014 ANNUAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED 31 DECEMBER 2014 AND 2013(Amounts are expressed in Turkish Lira (“TRY”) unless otherwise indicated.)
TRAKYA CAM SANAYİİ A.Ş. Convenience Translation Into English of Consolidated Financial Statements Originally Issued In Turkish (Note 2.8)
b.3.3) Other price risks
TheGroupisexposedtomarketpriceriskduetoitsequityshareinvestments.Equityshareinvestmentsareheldforstrategicpurposesratherthantradingpurposes.TheGroupdoesnottradeequityshareinvestments.
Equity price sensitivity
Sensitivityanalysespresentedbelowaredeterminedbasedontheequitysharepricerisksasofthereportingdate.
Iftheequitysharespriceswereincreased/decreasedby10%withallothervariablesheldconstantasofthereportingdate:
• Netprofit/losswouldnotbeaffectedasof31December2014totheextentthatequityshareinvestmentsclassifiedasavailableforsaleassets are not disposed of or impaired.
• Theotherequityfundswouldincrease/decreasebyTRY21.927.827(AmountingtoTRY12.732.324increase/decreasein2013).Thischangeresultsfromthefairvaluechangeofequityshareinvestmentsclassifiedasavailableforsale.
39. FINANCIAL INSTRUMENTS (VALUE AND HEDGE ACCOUNTING DISCLOSURES)
31 December 2014
Financial assets and
liabilities are valued using
effective interest method
Loans and receivables
Available for sale financial
assets
At fair value through profit
or loss financial assets and
liabilitiesCarrying
value NoteFinancial assets 1.126.878.527 332.607.823 219.278.575 - 1.678.764.925 Cash and cash equivalents 1.126.878.527 - - - 1.126.878.527 6Tradereceivables - 315.449.357 - - 315.449.357 10Duefromrelatedparties - 17.158.466 - - 17.158.466 37Financialinvestments - - 219.278.575 - 219.278.575 7
Financial liabilities 1.589.093.400 - - - 1.589.093.400 Financialliabilities 1.242.048.706 - - - 1.242.048.706 8Tradepayables 141.211.550 - - - 141.211.550 10Duetorelatedparties 205.833.144 - - - 205.833.144 37
97
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED 31 DECEMBER 2014 AND 2013(Amounts are expressed in Turkish Lira (“TRY”) unless otherwise indicated.)
TRAKYA CAM SANAYİİ A.Ş. Convenience Translation Into English of Consolidated Financial Statements Originally Issued In Turkish (Note 2.8)
31 December 2013
Financial assets and
liabilities are valued using
effective interest method
Loans and receivables
Available for sale financial
assets
At fair value through profit
or loss financial assets and
liabilitiesCarrying
value NoteFinancial assets 805.530.347 367.605.563 158.747.713 - 1.331.883.623 Cash and cash equivalents 805.530.347 - - - 805.530.347 6Tradereceivables - 322.933.873 - - 322.933.873 10Duefromrelatedparties - 44.671.690 - - 44.671.690 37Financialinvestments - - 158.747.713 - 158.747.713 7
Financial liabilities 1.323.427.739 - - - 1.323.427.739 Financialliabilities 1.100.404.407 - - - 1.100.404.407 8Tradepayables 133.205.151 - - - 133.205.151 10Duetorelatedparties 89.818.181 - - - 89.818.181 37
40. EVENTS AFTER REPORTING PERIOD
None.
41. OTHER ISSUES THAT SIGNIFICANTLY AFFECT THE FINANCIAL STATEMENTS OR OTHER ISSUES REQUIRED FOR THE CLEAR UNDERSTANDING OF FINANCIAL STATEMENTS
Approval of Financial Statements
TheGroup’sconsolidatedfinancialstatementsasof31December2014andtheannualreportpreparedinaccordancewiththeCapitalMarketsBoard’sCommuniquéSerial: II-14.1 are reviewedby also considering the opinion of theAuditCommittee and it has beenconcluded that the accompanying financial statements present fairly the consolidated financial position of the Company in accordance withtheregulationsissuedbytheCapitalMarketsBoardandaccountingpoliciesappliedbytheCompany.Theaccompanyingfinancialstatements are authorized by Financial Director Beyza Genç and Accounting Manager Nihal Topçuoğlu approved for the publicannouncementbytheBoardofDirectorson27February2015.
98 TRAKYA CAM SANAYİİ 2014 ANNUAL REPORT
TRAKYA CAM SANAYİİ A.Ş.
DearShareholders,
OurCompanypostedanetprofitofTRY283,229,115onits2014operations.
Weherebypresentforyourconsiderationandapprovalthatour2014netprofitintheamountofTRY283,229,115thatdescendsinour2014consolidatedbalancesheetdrawnupaspertheCapitalMarketsBoardofTurkey(CMB)CommuniquéSerial:II-14.1onPrinciplesofFinancialReportinginCapitalMarketsbedistributedasfollowsinaccordancewiththeCMBregulationsgoverningprofitdistribution,Article25oftheCompany’sArticlesofAssociation,andtheprinciplesspecifiedinourpubliclydisclosed“DividendPolicy”:
1. Net Profit for the Period 283,229,115.00
2. FirstLegalReserves -13,376,319.28
3. SpecialFundsNotAvailableforDistribution -96,844,645.27
3. Net Distributable Profit for the Period 173,008,150.454. DonationsintheReportingPeriod 82,466.55
5. Net Distributable Profit for the Period Including Donations, Based on Which First Dividend Will Be Calculated 173,090,617.00
6. First Dividend to Shareholders-Cash 36,000,000.00-BonusShare 55,000,000.00
Total Dividends 91,000,000.007. Extraordinary Reserves 82,008,150.45
Wefurtherproposethat,outofthecurrentissuedcapital,grossdividendofTRY36,000,000correspondingto4.87145%bedistributedincash,andgrossdividendofTRY55,000,000correspondingto7.44249%bedistributedasbonusshares;thatthedateforcashdividendpayoutbesetas29May2015,andbonussharesbedistributeduponcompletionofthelegalprocess;and
ProfitfromsalesofparticipationsharesintheamountofTRY96,844,645.27,whichresultedfromthedisposalofparticipationsharesduring2014andwhichisdecidedtobeclassifiedunderaspecialfundaccountinaccordancewithArticle5/1-eoftheCorporateTaxLaw,beaddedtothecapital.
Yoursfaithfully,
RehaAkçakaya BeyzaGençChairmanoftheBoardofDirectors MemberoftheBoardofDirectors
DISTRIBUTION OF 2014 PROFIT
99
TRAKYA CAM SANAYİİ A.Ş.
SECTION I - STATEMENT OF COMPLIANCE WITH CORPORATE GOVERNANCE PRINCIPLES
WithintheframeworkofcorporategovernanceprinciplesdeterminedbyCMB“CommuniquéonCorporateGovernanceSerial:IINo:17.1,publishedintheOfficalGazettenumbered28871anddated03.01.2014;thisstatementreflectsthefollowingresponsibilitiesofofTrakyaCamSanayiiAnonimŞirketi(Company)regardingdeterminationofduties,authoritiesandresponsibilitiesoftheBoardofDirectorsandsubordinatecommitteesandmanagersandregardingshareholders,publicdisclosureandtransparencyandregulationofrelationswithstakeholders.
TrakyaCamSanayiiA.Ş.,isafloatglassmanufacturingcompanythatwasfoundedin1978asanaffiliatedcompanyofŞişecamGroup.Ithasconsistof16affiliatedcompanies,3jointmanagingcompaniesand3jointventures;anditranks6thbiggestcompanyinworldand3rdbiggestinEuropeintermsofproductioncapacityinitsindustry.Thecompanystartedproductionin1981andbecamethefirstcompanytodeploy“modernfloattechnology“throughoutNorthAmerica,Europe,SouthAmerica,Africa,theMiddleEastandAsiaandhassinceplayedapioneeringroleintheindustryandledthedevelopmentoffloatglassindustrybothinTurkeyandtheregion.
Today,thecompanyoperates10floatlinesandcoversfourbusinessunits:
• Architecturalglass(flatglass,patternedglass,mirror,laminatedglassandcoatedglass)
• Automotiveglasses,encapsulatedglassesandglassesforothertransportationvehicles
•Solar glasses
• Homeapplianceglasses
Inthesecondhalfofthe2000s,withinmulti-focusproductionapproachandregionalleadershipvision,TrakyaCamexpandeditsactivitiesbeyondTurkeyandestablishedTrakyaGlassBulgariaEAD,itsfirstfloatlineintheBalkansin2006.InvestmentsinBulgariacontinued,withsettingupamirrorglassplantandthehomeapplianceglassplant,automotiveglassplantin2010,followedbylaminatedandcoatedglassplantin2013.
Meanwhile,inordertocomplementitsstrongpositioninthedomesticmarket,thecompanyestablishedtwofloatlinesandonecoatedglasslineinYenişehirBursain2007.Reinforcingitscommitmenttocreatehighestvalueforitscustomers,employees,shareholdersandallstakeholders,TrakyaCamhastakenastrategicstepin2009,withthedecisiontojointlydevelopitsflatglassactivitieswithSaint-Gobain,whichisoneoftheleadingcompaniesoftheindustry,inEgyptandRussia.Further,TrakyaCamexpandeditsproductioncapacitybyacquiring50%ofsharesofHNGFloatGlassLimitedCompanyinIndiaandbyacquiringRichardFritzHoldingin2013.Asof2014,TrakyaCamopenedafloatlineinPolatlıandhavecreatedajointventurewithSaint-GobainforconstructionofafloatlineAlabuga,Russia.
TrakyaCamregardsthevaluesofmoderngovernanceandindustrialoperationprinciples,highlevelofinstitutionalization,focusonmarketandR&DasthekeyvaluestoensureitscurrentpositionasaglobalplayerinthemarketandtoformbasisforastrongerTrakyaCamofthefuture.Asamajorglasssupplierfortheconstruction,automotive,energyandhomeapplianceindustrieswithitsmanufacturingactivitiesinninedifferentcountries,itspartnershipsandexpandingproductrange,theCompanypreciselysatisfiescustomerneeds,andaimstofurtherstrengthenitsvision“tobeafastgrowingglobalflatglasscompanywithitsstrongbrandsandinnovativesolutions”byadoptingCorporateGovernancePrinciples.
Withinthiscontext,ourcompanyshowsutmostcaretocomplywithCapitalMarketLegislationandCapitalMarketBoard(CMB)regulationsincorporategovernanceapplications.Theprinciples,whichareappendedtotheCorporateGovernanceCommuniquéinthefiscalyearended31December2014,whicharenotyetapplied,havenotcausedanyconflictsofinterestamongstakeholderstodate.
CORPORATE GOVERNANCE COMPLIANCE REPORT
100 TRAKYA CAM SANAYİİ 2014 ANNUAL REPORT
TRAKYA CAM SANAYİİ A.Ş.
TheexplanationsregardingCorporateGovernancePrinciplescoveredintheappendixtotheCorporateGovernanceCommuniqué,whicharenon-mandatoryfortheCompany,areprovidedintherelatedsectionsofthereportfortheyearended31December2014.
Ontheotherhand,specificactivitiesimplementedduringthereportingperiodforachievingcompliancewiththeCorporateGovernancePrinciplesaresummarizedbelow.
1) Inordertoensuretheenforcementoftheobligationsarisingfromthecapitalmarketlegislationwithintheframeworkoftheregulatoryrulesandprovidemoreeffectiveperformanceofoperationsalongthatline,theCompanyadoptedacentralizedconceptandcreatedanorganizationaccordingly.Withinthiscontext,associatedoperationshavebeenmadeforthecomplianceofobligationsarisingfromthecapitalmarketlegislationtodateandcoordinatedbytheInvestorRelationsDepartmentunderthesupervisionofGroup’sChiefFinancialOfficer.
InaccordancewithCorporateGovernanceCommuniquéII-17.1Article11issuedbyCMB,theCompany’scorporateinvestorrelationsdepartmentmanagerandaresponsiblepartywereappointedandannouncedpubliclyviaKAP(PublicDisclosurePlatform)on30June2014.AdepartmentmanagerwasalsoappointedasamemberoftheCorporateGovernanceCommittee.
2) ThescopeandcontentoftheCompany’swebsitewereexpandedto improveefficiencyinaccessinginformationforshareholdersand stakeholders. Accordingly, the company’s website features investor presentations, the investor calendar, frequently askedquestions,andrelatedinformationandexplanations,whichmayaffecttheexerciseofshareholderrights,inanup-to-datemannerforshareholders.
3) AllrelatedpartytransactionsandcontentofthetransactionswerecollectivelysubmittedtotheBoardofDirectorsin2014.Throughout2014,therewerenorelatedpartytransactionsorsignificanttransactionsthatrequiredtobesubmittedtothegeneralassemblyforapproval,whichwerenotapprovedbyanindependentboardmember.
TheCompany’s2014CorporateGovernancePrinciplesComplianceReportwaspreparedintheformatspecifiedintheCMBresolutionno.2/35publishedintheWeeklyBulletinno.2014/2dated27January2014,andpresentedunderseparateheadingshereinbelow.
SECTION II - SHAREHOLDERS
2.1 Investor Relations Department
Inorder toconformwithrulesarising fromthecapitalmarket legislationwithinthe frameof theregulatoryrulesandtooperatemoreeffectively,theCompanyadoptedacentralizedstructureandcreatedanorganizationaccordingly.
TheCompanyhasbeenfulfillingallofitsobligationsarisingfromtheTurkishCommercialActandtheCapitalMarketsBoardlegislationunderthesupervision,orientationandcoordinationofthe“InvestorRelationsDepartment”,whichhasbeenconstitutedwithinthebodyofŞişecamGroupCFO, in linewiththeCorporateGovernancePrinciplesofCMB.Accordingly,TrakyaCamFinancialDirectorBeyzaGenç,andKemalTansuAkalın,whoholdsCapitalMarketActivities3LevelLicenseandCorporateGovernancewithRatingLicense,wereappointedasresponsiblepartiesinaccordancewithArticle11oftheCMB’sCommuniquéno.II-17.1onCorporateGovernanceandthismandatewasannouncedtopublicviaKAPon30June2014.
TheInvestorRelationsDepartmentplaysanactiveroleintheprotectionofshareholderrightsandinfacilitationoftheexerciseofshareholderrights,specificallyrightstoreceiveandreviewinformation.TheDepartmentismainlyresponsiblefor;
a. KeepingtherecordsofthewrittencorrespondencebetweentheinvestorsandtheCompany,andotherinformationanddocumentsinasound,safeandup-to-datemanner;
b. RespondingtowritteninformationrequestsofshareholdersabouttheCompany;
c. Ensuring that theGeneralAssemblymeetingsareheld inaccordancewithapplicable legislation,articlesofassociationandotherinternalguidelines;
d. PreparingthedocumentsthatmaybebeneficialforshareholdersattheGeneralAssemblymeetings;
e. Supervisingthefulfillmentofobligationsarisingfromthecapitalmarketlegislation,includingallaspectsofcorporategovernanceandpublicdisclosurematters.
TheDepartmentsubmitsaperiodic report to theBoardofDirectors,which includes theDepartment’sactivitiesduring the reportingperiod,investorfeedbackandopinions,andbrokeragefirms’commentsandassessmentsabouttheCompanyperiodically.
One-on-onemeetingsandconferencecallsareheldwiththeanalystsandassetmanagersofdomesticandforeignbrokeragefirmsandassetmanagementcompaniesattheCompany’sheadquarters,andtheinformationrequestsreceivedbytheDepartmentarerespondedaccordingly.ShareholderscanrequestinformationdirectlybycontactingtheInvestorRelationsDepartmentemployees,orbysendinganemailtotheDepartment’semailaddressorusingthecontactformavailableonthewebsite.Recordsofwrittenandoralinformationrequests,andoftheresponsesthereto,areregularlykeptbytheInvestorRelationsDepartment.
CORPORATE GOVERNANCE COMPLIANCE REPORT
101
TRAKYA CAM SANAYİİ A.Ş.
Information anddisclosures thatmayaffect the exerciseof shareholding rights, postedon the company’swebsite for shareholders,updating regularly. Besidesemployeesof the InvestorRelationsDepartment,AccountingManager,NihalTopçuoğlu reporting to theFinancialAffairsDirector,andGülerGürsesÖztürkandUfukYamak,BudgetandFinancialControllingSpecialists,canberesponsiblefromduties related to investor relations in case of necessity.
2.2. Exercise of the Shareholders’ Information Rights
Shareholdersarenotdiscriminatedagainstwhenusingtheirrighttoobtainandassessinformation.Eachshareholderhastherighttoobtainandreviewinformation.TheArticlesofAssociationcontainsnoprovisionsrestrictingtherighttoaccessinformation.
In 2014, investors’ and shareholders’ written and verbal requests of investors and shareholders for informationwere responded inaccordancewiththecapitalmarket legislation,CMBregulations,andresolutions,andrelated informationanddocuments,except forconfidentialinformationortradesecrets,weresharedwithinvestorsandshareholdersregardingtheequalityprinciples.
Within the frameworkof required lawsand legislation, theCompany’swebsite isusedeffectively toexpandtheshareholder rights toobtaininformationandtofacilitateproperexercisethereof.Withinthisscope,informationanddocumentsstipulatedbytheCorporateGovernancePrinciplesandregulatoryauthoritiesarepublishedbothinTurkishandEnglishforshareholdersontheCompany’swebsite,accessibleatwww.trakyacam.com.tr.
Furthermore, for thepurposeofexpandingshareholders’ right toaccess information, interviewsgiven to thepressby theCompanyofficialsandquarterlyoperatingresultspresentationsarepostedonthewebsiteunderthe“InvestorRelations”sectionfortheinformationof shareholders.
TheCompany’sArticlesofAssociationdonotgoverntherightofrequestofaspecialauditorforindividualshareholdersyet.
Norequestfortheappointmentofaspecialauditorwassubmittedtodate.
2.3 General Assembly Meetings
TheannouncementofageneralassemblymeetingismadethroughthePublicDisclosurePlatform(KAP),theElectronicGeneralAssemblySystem(EGKS),theCompany’swebsite,andtheTurkishTradeRegistryGazetteatleastthreeweekspriortothemeetingdatetoreachthemaximumnumberofshareholders.Inaddition,an“informationdocument”onagendaitemsispreparedandpubliclydisclosedpriortothegeneralassemblymeeting.AllannouncementsandnotificationsconformwiththerequirementssetoutbytheTurkishCommercialCode(TCC),capitalmarketlegislation,CMBregulationsandresolutions,andtheCompany’sArticlesofAssociation.
Theannouncementsregardingthedateandtimeofthemeeting,theexactlocationofmeeting,toavoidanyambiguity,meetingagenda,thebodyissuingtheinvitationtothemeeting,andtheaddresswheretheannualreport,financialstatements,andothergeneralassemblymeetingdocumentscouldbeexamined.Inthiscontext,theannualreport,financialreports,otherdocumentsformingthebasisforagendaitems,andtheprofitdistributionproposalweremadeavailable forreviewfromthedateof themeetingannouncement,aredisclosedpubliclyinawaythatenableseasyaccesstoshareholders,includingtheCompanyheadquartersandthewebsite.
Inadditiontothoseannouncements,thefollowingitemsarepostedunderthe“InformationDocuments”sectionofthe“GeneralAssemblyAnnouncementsandDocuments”underthe“InvestorRelations”sectionontheCompany’swebsiteatwww.trakyacam.com.tr.
a. TotalnumberofsharesandvotingrightsreflectingtheCompany’sshareholdingstructureasof thedateofdisclosure,numberofsharesrepresentingtheprivilegedsharegroupsintheCompany’scapital,andinformationonvotingrightsandthenatureofprivileges.
b. Informationthatnochangesoccurredinthemanagementand/oractivitiesoftheCompanyanditssubsidiariesinthepreviousfiscalyear,noraretheyplannedfortheupcomingfiscalperiod,whichmayhaveanimpactupontheCompany’soperations.
c. GroundsfordismissalandreplacementofBoardmembers,alongwiththecandidates’résumés,postsheldinthepasttenyears,thenatureandsignificanceoftheirrelationshipswiththeCompanyanditsrelatedparties,independencestatus,andinformationonsimilarmatters.
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Whilepreparingthegeneralassemblyagenda,separateheadingareassignedtoeachagendaitemsandagendaitemsareexpressedclearlyinordertoavoidmisinterpretations.Wordslike“other”and“various”,etc,arenotused.
AgendatopicssubmittedinwritingtoCompany’sInvestorRelationsDepartmentbyshareholders,aretakenintoconsiderationbyBoardofDirectorsintheprocessofpreparingagenda.Nosuchrequestswerereceivedduringthefiscalperiod.
Theutmostattentionispaidtoholdgeneralassemblymeetingswithoutcausinginequalityamongtheshareholdersandtoorganizethemeetingstoensurethatshareholderscanparticipateatthe lowestpossiblecost.Withinthiscontext,thetimeofageneralassemblymeetingisdeterminedbyconsideringtraffic,transportation,andsimilarexternalfactors.Electronicgeneralassemblymeetingisconsideredasanoptionthatcanincreasetheabilityofshareholderstoparticipateinthesemeetings.
Atthegeneralassemblymeeting,thechairmanensuresthatthetopicscoveredintheagendaareaddressedinanunbiasedanddetailedmanner,theyarepresentedclearlyandcomprehensibly,andtheshareholdersaregiventheopportunitytovoicetheiropinionsandasktheirquestionsunderequalconditions.Theshareholders’questionsduringageneralassemblymeeting,whicharenottradesecrets,aredirectlyrespondedtoduringthecourseofthemeeting.Ifthequestionisirrelevanttotheagendaorissocomprehensivetobeansweredforthwith,thequeryisrespondedinwritingassoonaspossiblebytheinvestorrelationsdepartment.Nosuchquestionsweresubmittedinwritingbyshareholdersatgeneralassemblymeetingin2014.
Incaseshareholderswhohavemanagementcontrol,membersoftheBoardofDirectors,managerswithadministrativeresponsibilityand/ortheirspousesorrelativesbybloodormarriageuptotheseconddegreeexecutetransactionthatmightleadtoaconflictofinterestwiththeCompanyoritssubsidiaries,and/orperformatransactionontheirownorother’sbehalfwhichfallswithinthescopeofthecommercialactivityoftheCompanyoritssubsidiaries,orbecomeapartnerwithunlimitedliabilityinanothercompanydealingwiththesamekindofcommercialactivity,suchtransactionsareincludedintheagendaasaseparateitemforpresentationofdetailedinformationatthegeneralassembly,andarerecordedintheminutesofthegeneralassemblymeeting.
ActivitiesthatthemembersoftheBoardofDirectorsengagewithinthescopeofArticles395and396oftheTurkishCommercialCodearepresentedatthegeneralshareholders’meeting.
MembersoftheBoardofDirectors,otherrelevantindividuals,officialswhowereresponsibleforpreparingthefinancialstatements,andauditorsattendthegeneralassemblymeetingsinordertoprovidenecessaryinformationonspecificmatterscoveredintheagendaandanswerquestions.
If there isasignificantchange inthemanagementandoperationsoftheCompany,publicdisclosure ismadewithintheframeofthelegislation.
TheCompany’sArticlesofAssociationwereamendedtoensurethattheCompanywilladheretotheCorporateGovernancePrinciplesconcerningtransactionsandrelatedpartytransactionsasdefinedintheCMBregulations,andprovidingguarantees,pledgesormortgagesto third parties.
Withinthisscope,inthisfiscalperiod:
SharesinthecapitalofPaşabahçeCamSanayiiveTicaretA.Ş.withatotalnominalvalueofTRY14,267,874heldintheCompany’sportfolioweresoldtotheEuropeanBankforReconstructionandDevelopment(EBRD)forEUR53,570,884.68.
TrakyaCam,solditsSodaSanayiiA.Ş.sharesworthUSD5,000,000toInternationalFinanceCorporation(IFC).
ThesetransactionswereagreeduponwiththeunanimousconsentoftheBoardofDirectors.
TheCompanyhasestablishedapolicyondonationsandgrants,whichwaspresented forapprovalat the latestGeneralAssembly.Shareholderswereinformedondonationsmadeduringthereportingperiod,andtheupperlimitofdonationsfortheupcomingperiodwasapproved.
Generalassemblymeetingsareopentothepublic,includingthemedia.OurgeneralassemblymeetingsareheldunderthesupervisionofarepresentativefromtheMinistry,whoisassignedbytheMinistryofCustomsandTrade.Thegeneralassemblymeetingminutes,whicharepostedontheCompany’scorporatewebsite,arealsomadeavailableforreviewbyshareholdersattheCompany’sheadoffice.
Informationonrelatedpartytransactionsandonguarantees,pledgesandmortgagesprovidedonthebehalfofthirdpartiesispresentedtogeneralassemblyunderadedicatedagendaitem.
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TheCompany’scorporatewebsitewww.trakyacam.com.tr,featurestheinformation-inTurkishandinEnglish-thatismandatorytobedisclosedpursuanttothelegislation,plusthefollowinginformation:businesslines,products,annualandinterimactivityreports,financialreports,corporategovernancecompliancereports,theArticlesofAssociation,traderegistryinformation,shareholdingstructure,generalassemblymeeting agendas,minutes of general assemblymeetings, lists of participants to the general assemblymeetings, sampleproxyvotingform,prospectusesandpublicofferingcirculars,codeofconduct,informationpolicy,announcementsonmergersandde-mergers,materialeventdisclosures,membersoftheBoardofDirectors, formationandoperatingprinciplesoftheBoardofDirectorscommittees, interim audit reports, donation policy, anti-bribery and anti-corruption policy, remuneration policy for senior executives,currentannouncements,investorpresentations,profitdistributionpolicyandfrequentlyaskedquestionsandtheirresponses.Withinthisscope,thecorporatewebsitepresentsinformationcoveringthelastfiveyears,ataminimum.
TheshareholdingstructureoftheCompany,specifyingthenamesofshareholdersholdingmorethan5%shareaftertheeliminationofindirectandcross-shareholdingrelationships,andtheratioandamountofsharesaredisclosedontheCompany’scorporatewebsiteandare updated quarterly.
TürkiyeŞişeveCamFabrikalarıA.Ş.holds69.38%shareintheCompany’s issuedcapitalofTRY739,000,000.TürkiyeŞişeveCamFabrikalarıA.Ş.istheCompany’sshareholderwithmanagementcontrolovertheCompany,andtherewerenoindividualshareholdersholdingmorethan5%shareinthecapitalstructureoftheshareholderwithmanagementcontrolasofthedateofthiswriting.
3.2 Annual Report
TheannualreportispreparedinsufficientdetailtogivethepubliccompleteandaccurateinformationregardingtheCompany’soperations.
Theannualreportfor2014fiscalyearhasbeenpreparedinaccordancewiththeprovisionsofthe“RegulationontheDeterminationofMinimumContentsofAnnualActivityReportsoftheCompanies”publishedbytheMinistryofCustomsandTradebasedonArticles516(3)and518oftheTurkishCommercialCode,andtocovertheminimumcontentspecifiedinArticle8oftheCMB“CommuniquéonPrinciplesofFinancialReportinginCapitalMarkets”.Theannualreporthasbeenindependentlyaudited.
Accordingly,theannualreportcontainedthefollowinginformation;
a. Thereportingperiod,thecompanyname,traderegistrynumber,contactinformation,
b. ThenamesofthechairmanandthemembersoftheBoardaswellastheheadsandmembersofcommitteeswhoservedduringthereportingperiod,
c. ThesectorsinwhichtheCompany’ssubsidiariesoperate,generalinformationontheirperformances,andthedevelopmentsduringtheyear,
d. InformationabouttheCompany’sfunctionalunits,generalexplanationsrelatedtotheiractivitiesandperformance,anddevelopmentsduringtheyear,
e. Progressoninvestments,eligibilityforandstatusofgovernmentincentives,
f. ChangestotheArticlesofAssociationinthecurrentperiodandthegroundstherefor,
g. CorporateGovernancePrinciplesComplianceReport,
h. Informationonrelatedpartytransactions,
i. Otherrelevantandbeneficialinformationthatisnotincludedinthefinancialstatements,
j. TheCompany’sorganizational,capitalandshareholdingstructures,
k. Informationonallbenefitsprovidedtostaffandworkers,andthenumberofpersonnel,
l. InformationonexternalpositionsheldbytheBoardmemberswithintheframeofthepermissiongrantedbytheGeneralAssembly,specifyingwhethertheyarein-Group/non-Grouppositions,
m. Profitdistributionpolicy,
n. KeyratiospertainingtotheCompany’sfinancialposition,profitabilityandsolvency,and
o. TheCompany’sfinancingresourcesandriskmanagementpolicies
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TheRecruitmentUnithasbeenworkingtoattractnewgraduatesandotherprofessionalsbyactivelyusingallavailablerecruitingmethodsandtechniques,andbyorganizingvariouscommunicationactivitiesatuniversitiesandsimilarinstitutions.
TheCompany’sPerformanceManagementSystemworksininteractionwiththevision,missionandstrategiesoftheGroup.TheBalancedScorecardSystem,developedbytheGroupin2010,brokendownintoindividualobjectives,andthesuccess-basedperformancecultureisbeingconvertedintosuccess-basedcorporateculture.ThefoundationofthePerformanceManagementSystemistocreatevaluefortheemployeeandtoensurethatthevaluecreatedbytheemployeeservesthedevelopmentandsustainabilitytargetsoftheCompany.
ExpectationsofemployeesandtherequirementsoftheorganizationarediscussedannuallybymeansoftheCareerDevelopmentModule,apartofthePerformanceManagementSystem.Moreover,strategiccareermapsaswellastheGroup-basedcareerandsuccessionplansaredevelopedusingdatafromthePerformanceManagementSystem.
TrakyaCamaims to add the necessary human resources for its organizationwhile preserving a high level of loyalty among currentemployees,andcreatingapositiveandcompetitiveworkingenvironment.
The remuneration management system of the Group takes into account variables such as the wages in the market, the existingremunerationstructureandpaymentability,individualperformanceandjoblevels.
TheCompanyemployeesareoffered;
• Anup-to-datecompetitivesalarypackagethatrewardssuccess,
• Aflexibleandsustainablebenefitspackagebasedonneedsandexpectations,
• Asocialstructurethatobservesabalancebetweenworkandpersonallife,
• Aproductive,collectivelyfosteredworkingenvironmentopentocommunication,and
•Well-establishedandinnovativedevelopmentandcareeropportunitiesaimedatgloballeadership.
TosupporttheCompany’scontinuedexistence,leadershipandpersonaldevelopmentprogramsfocusingonindividualsareimplemented.Inadditiontocompetencytrainingandprofessional/technicaltrainingcourses,long-termcertificationprogramsareoffered.Employeesareencouragedtoattendsummits,symposiumsandcongressesheldathomeandabroad.Programsthatsupportemployees’foreignlanguage and computer skills are offered.
In2014,severalCompanyexecutivesparticipated intheAdvancedManagementProgramandGeneralManagementProgramoftheHarvardBusinessSchool,withinthescopeoftheseniorexecutivetraininganddevelopmentprogram.
TheGroupconcludesonegroupcollectivebargainingagreementcovering fourplants,one individualworkplacecollectivebargainingagreementcoveringoneplant;ontheinternationalfront,theGroupexecutesabusinesslinecollectivebargainingagreementcoveringfourworkplacesinBulgaria,andonecollectivebargainingagreementcoveringtheGlassCorp.PlantinRomania.Thetermsofthesecollectiveagreementsrangebetweenonetothreeyears.
CoordinationmeetingsareheldwithKristal-İşTradeUnionorganizedattheworkplacesownedbytheGroup,regardingtheimplementationofcollectiveagreements,industrialrelations,andincreasingproductivity.Similarly,coordinationeffortsarecarriedoutwithtradeunionsorganizedintheworkplacesabroad.
AWorkplaceAccidentsAnalysisandCorrectiveActions&PreventiveActions(CAPA)TrackingSystemProjecthavebeencompletedandputintopracticeasofJanuary2014.Thesystem,whichcoversallworkplacesandunitsincludingthemanagementandsalescenters,systematicallytracksandcontrolsworkplaceaccidentsandisintegratedwiththeSAPsystem.Anotherpillaroftheproject,theCAPAsystemisintendedtosystematicallyandproperlyeliminateallirregularitiesresultingfromOHSAS18001,internalandexternalinspections,administrativeandsimilarreasons,whichpresentariskofworkplaceaccidents.
4.4 Code of Conduct and Social Responsibility
TheŞişecamGroupCodeofConductformulatedaroundthegeneralprinciplesofhonesty,transparency,confidentiality,impartialityandcompliancewithlawsbasedontheGroupBoardofDirectorsdecisionno.49anddated20July2010wasputintoeffect.TheCodeintroducedguidingprinciplesthatwillsteertherelationshipsofallGroupemployeeswithcustomers,suppliers,shareholdersandotherstakeholder.TheseguidelineswereupdatedaccordingtocurrentneedsbasedontheBoardofDirectorsdecisionno.33dated28March2013.TheGroup’sCodeofConductispubliclydisclosedonthecorporatewebsite.
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DECLARATION OF INDEPENDENCE
Trakya Cam Sanayii A.Ş.
To the Board of Directors
IherebydeclarethatI,asamemberoftheBoardofDirectorsofTrakyaCamSanayiiA.Ş.,stillbearthe“IndependentBoardMember”requirementswhicharedeterminedbyCommuniqués,PrincipleDecisionsandsimilar regulationsofCapitalMarketLawandCapitalMarketsBoard,andbytheArticlesofAssociationofyourCompany;thatIwillinformtheBoardofDirectorsandCapitallMarketBoardsimultaneouslythroughPublicDisclosurePlatformimmediately,incasethereareanysituationsthatruleoutaforementionedindependencetogetherwithitsreasons,andthatIwillcomplywiththeprovisionsprescribedinarticle4.3.8ofCorporateGovernancePrinciplesbyactinginlinewiththedecisionofyourAdministrativeBoard.
BestRegards,
Prof.Dr.A.MuratDemircioğlu
DECLARATION OF INDEPENDENCE
Trakya Cam Sanayii A.Ş.
To the Board of Directors
IherebydeclarethatI,asamemberoftheBoardofDirectorsofTrakyaCamSanayiiA.Ş.,stillbearthe“IndependentBoardMember”requirementswhicharedeterminedbyCommuniqués,PrincipleDecisionsandsimilar regulationsofCapitalMarketLawandCapitalMarketsBoard,andbytheArticlesofAssociationofyourCompany;thatIwillinformtheBoardofDirectorsandCapitalMarketBoardsimultaneouslythroughPublicDisclosurePlatformimmediately,incasethereareanysituationsthatruleoutaforementionedindependencetogetherwithitsreasons,andthatIwillcomplywiththeprovisionsprescribedinarticle4.3.8ofCorporateGovernancePrinciplesbyactinginlinewiththedecisionofyourAdministrativeBoard.
BestRegards,
HalitBozkurtAran
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SubsequenttoGeneralAssemblymeetings, inwhichtheBoardofDirectorsMembersareelected,ChairmanandViceChairmanaredesignatedwiththeaimofmakingdecisiononthedivisionoflabor.ThecurrentBoardofDirectorsiscomprisedof2executiveand4non-executivemembers,statedinthetablebelow.
Approvalof theGeneralAssembly is soughtunderArticles395and396of theTurkishCommercialCode, if theBoardofDirectorsmembersengageinactivitiesorengagetopartnershipofthecompaniesoperatinginactivitiesthatfallwithinthescopeofCompany’sareaofactivity,eitherontheirownoronathirdparty’saccount.
Boardmemberscanfreelyshareandexpresstheiropinions,withoutanyinfluence.PursuanttotheCorporateGovernancePrinciples,TwofemalemembersserveontheBoardofDirectors,BeyzaGençandZeynepHansuUçar.ThereisnotatargetperiodoratargetrateoffemalemembersofBoardwhichshallnotbelessthan25%,norhasapolicybeendeterminedtoattainrelatedtargetsyet.
TheCompanyhassubsidiariesandassociates.ConsideringthefactthattheparticipationoftheCompany’sBoardofDirectorsmembersalsointhemanagementofthesecompaniesisfortheinterestsoftheGroup,norestrictionshavebeenimposeduponout-of-companyresponsibilities.TheexternaldutiesheldbytheBoardmembersarestatedbelow.
Name Position External Positions Currently HeldRehaAkçakaya Chairman-FlatGlassGroupPresident ChairmanoftheBoardofTRSGAutoglassHoldingBV,
ChairmanoftheBoardofGlasscorpSA,ViceChairmanoftheBoardofTrakyaGlassBulgariaEAD,Chairmanof the Board of Automotive Glass Alliance Rus AO,Chairman of the Board of TRSG Glass Holding BV,ChairmanoftheBoardofTrakyaGlassRusAO,BoardMemberofRichardFritzHoldingGmbH,ChairmanoftheBoardofRFSPOLS.R.O.,ChairmanoftheBoardofRichardFritzKft,ViceChairmanoftheBoardofHNGFloat Glass Limited, Board Member of Saint GobainGlassEgyptS.A.E.
NihatÖzdemir ViceChairman İşbankGebzeCorporateBranchManagerZeynepHansuUçar Member,MemberofCorporateGovernance
Committee,MemberofEarlyRiskDetectionCommittee
Board Member of T. Şişe ve Cam Fab A.Ş., BoardMemberofSodaSanayiiA.Ş.,İşbankSubsidiariesUnitManager,BoardMemberofKültürYayınlarıİş-TürkLtd.Şti., Board Member of Çayırova Cam Sanayii A.Ş.,BoardMemberofPaşabahçeCamSanayiiA.Ş.,BoardMemberofPaşabahçeMağazalarıA.Ş.,ViceChairmanoftheBoardofCamElyafSanayiiA.Ş.,BoardMemberof Anadolu Cam Sanayii ve Ticaret A.Ş., AnadoluCam Sanayii ve Ticaret A.Ş. Member of CorporateGovernance Committee and of Early Risk DetectionCommittee, BoardMember of Anadolucam YenişehirSanayiiA.Ş.,BoardMemberofAnadolucamEskişehirSanayiiA.Ş.,BoardMemberofTrakyaYenişehirCamSanayii A.Ş., Board Member of Trakya Polatlı CamSanayiiA.Ş.,CamişMadencilikA.Ş.Member,ArapTürkBankasıA.Ş.Member,BoardMemberofCamişYatırımHoldingA.Ş.,ViceChairofCamElyafSanayii,BoardMember of Avea İletişim Hiz. A.Ş., Board Memberof Asmaş Ağır San. Mak. A.Ş., Board Member of İşFinansalKiralamaA.Ş.,BoardMemberofİşFaktoringA.Ş.
BeyzaGenç Member,MemberofCorporateGovernanceCommittee
BoardMemberofTrakyaYenişehirCamSanayiiA.Ş.,Board Member of Polatlı Cam Sanayii A.Ş., BoardMember of ÇayırovaCamSanayii A.Ş., TrakyaGlassBulgaria EAD Member, Glass Corp SA Member, RFSPOLS.R.OMember.
Prof.Dr.AtillaMuratDemircioğlu
IndependentMember,HeadofCorporateGovernanceCommittee,HeadofAuditCommittee,HeadofEarlyRiskDetectionCommittee
BoardMemberofYıldızTechnicalUniversity
HalitBozkurtAram IndependentMember,MemberofCorporateGovernanceCommittee,MemberofAuditCommittee,MemberofEarlyRiskDetectionCommittee
Independent BoardMember of T. Şişe ve Cam Fab.A.Ş.
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5.2. Fundamentals of Activities of Board of Directors
TheBoardofDirectorselectsaChairmanandViceChairmansubsequenttoeachgeneralassemblymeeting.However,iftheChairmanand/orViceChairmanresignfromhis/herdutyforanyreason,theBoardofDirectorswillholdanewelectionforthevacantpositions.TheViceChairmanwillpresideovertheBoardofDirectorsintheabsenceoftheChairman.IftheViceChairmanisalsoabsent,thenanymemberoftheBoardofDirectorswhoiselectedbytheboard,willtemporarilyleadthemeeting.ThedateandagendaofmeetingofBoardofDirectorsaredeterminedbytheChairman.TheViceChairmanfulfillstheseresponsibilitiesintheabsenceoftheChairman.However,themeetingdatecanalsobesetbymembersoftheBoardofDirectors.TheBoardofDirectorswillconveneasandwhennecessitatedbytheCompany’sbusinessaffairsandtransactions.However,themembersmustmeetatleastonceinamonth.
Duringthereportingperiod,thenumberofdecisionstakenbytheBoardofDirectors is44,allof thembyunanimousvotesofthosepresent.NoBoardmembersexpressedadissentingopinionagainstthedecisionstaken.Whenpassingdecisions,theBoardofDirectorsconsideredthemeetinganddecisionquorumssetforthintheTurkishCommercialCode,CapitalMarketLawandrelatedlegislation.
TheinformationanddocumentsrelatedtotopicsincludedintheBoardmeetingagendaaremadeavailableforreviewbyBoardofDirectorsmembersallowingsufficientamountoftimebeforethemeetingandensuringequalavailabilityofinformation.Priortothemeeting,BoardofDirectorsmembersmayproposetheChairmanoftheBoardchangesintheagenda.Theopinionofanymemberwhoisunabletoparticipateinthemeetingbutwhosubmitshis/heropiniontotheBoardofDirectorsinwritingispresentedtotheothermembers.EachBoardmemberhasonevotingrightintheBoardofDirectors.
AtBoardmeetings, topics included in theagendaarediscussedopenly,addressingall relevantaspects.TheChairmanof theBoardspendshis/herbesteffortstoensureactiveparticipationofnon-executivemembersintheBoardmeetings.Reasonable,detailedgroundsforthedissentingvotesofBoardmembersarerecordedtothedecisionreport.Thereasonsfordissentingvotesarepubliclydisclosed.However,nosuchpublicdisclosurewasmadein2014sincesuchanoppositionordissentingopinionwasnotexpressedinanyBoardofDirectorsmeetingheldduringthereportingperiod.
BoardmeetingsaregenerallyheldattheCompany’sheadoffice,andsignificantBoardofDirectorsdecisionsarepubliclydisclosedviaKAP(PDP),andalsopostedontheCompany’swebsite.
Authorities and responsibilitiesofBoardofDirectorsmembersareclearly set forth in theArticlesofAssociation.TheauthoritiesareexercisedinaccordancewiththeprinciplesspecifiedintheinternallegislationinlinewiththeBoardofDirectorsdecisionno.43dated09December2014pursuanttoArticles367and371oftheTurkishCommercialCode,registeredon22December2014,andpromulgatedon26December2014.TheBoardofDirectorsworksinclosecooperationwiththeInvestorRelationsDepartmentformaintainingefficientcommunicationbetweentheCompanyandshareholdersandforsettlementofpossibledisputes,andleadingtheresolutionofconflicts.
InsurancecoverageisobtainedforthepossiblelossesthattheBoardofDirectorsmembersmaycausetotheCompanyduetonegligenceoftheirduties.However,theamountofinsurancedoesnotexceed25%oftheCompany’scapital.
5.3. The Number, Structure and Independence of the Committees Established Under the Board of Directors
InordertoensureBoardOfDirectorsarefunctioningeffectivelyregardingtheirdutiesandresponsibilities,the“CorporateGovernanceCommittee”,“AuditCommittee”and“EarlyRiskIdentificationCommittee”havebeenconstitutedundertheBoard.Thefieldsofactivity,working principles, and members of these committees were determined by the Board of Directors, and publicly disclosed on theCompany’swebsite.
AllmembersoftheAuditCommitteehavebeenelectedfromindependentBoardmembers.ThechairmanoftheCorporateGovernanceandEarlyRiskDetectionCommitteesareindependentBoardmembers.TheCorporateGovernanceCommittee,theEarlyRiskDetectionCommitteeandtheAuditCommitteeareconsistoffive,threeandtwomembers,respectively.
TheChairmanandViceChairmanoftheBoarddonotserveonthecommittees.PursuanttotheCorporateGovernancePrinciples,noexecutivemembersserveonthecommittees,exceptforthe“InvestorRelationsDepartment”managerandemployeewhoareassignedtotheCorporateGovernanceCommittee.Boardmemberswhodonotqualifyasindependentmembersserveonallthreecommittees.
TheBoardofDirectorsprovidesthenecessaryresourcesandsupporttothecommitteesforthefulfillmentoftheirduties.Thecommitteesare free to invite anymanager they deem necessary to theirmeetings and seek his/her opinions. The frequency ofmeeting of thecommittees is sufficient and all of their activities are documented inwritten and recorded.Reports covering information about theiractivitiesandmeetingoutcomesarepresentedtotheBoardofDirectors.
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TheAuditCommitteeoverseestheoperationandefficiencyoftheCompany’saccountingsystem,publicdisclosureoffinancialinformation,independentaudit,internalcontrolandinternalauditsystem.TheCommitteealsodefinesthemethodsandcriteriaforthehandlingandresolutionofcomplaintsreceived inrelationtotheCompany’saccountingand internalcontrolsystemand independentaudit,aswellas forensuring thatCompanyemployeesadhere to theconfidentialityprinciple regarding theCompany’snotificationsonaccountingand independentaudit.TheAuditCommitteereports itsdeterminations inrelationto itsfieldof responsibilityandduty,alongwith itsassessmentsandsuggestionstotheBoardofDirectorsinwriting,andpresentsawrittenreporttotheBoardofDirectorscoveringitsassessmentoftheaccuracyandtruthfulnessofannualandinterimfinancialstatementstobepubliclydisclosedandtheirconformitywiththeaccountingprinciplesfollowedbytheCompany,incorporatingtheopinionsoftheCompany’smanagersresponsibleforthesesubjectsand of independent auditors.
ThemembersoftheAuditCommitteepossessthequalificationsdefinedintheCommuniquéonCorporateGovernancePrinciples.TheactivitiesoftheAuditCommitteeandtheminutesoftheirmeetingshavebeendisclosedintheannualreport.Takingintoconsiderationthecompetenceandindependencecriteriaofindependentauditors,theAuditCommitteesuggeststheauditfirmitdeemsappropriatetotheBoardofDirectors,whichthendesignatestheindependentauditorfirm.
TheCorporateGovernanceCommitteedetermineswhetherthecorporategovernanceprinciplesareimplementedacrosstheCompany,detectsthereasonsfornon-implementationanddeterminesconflictsofinterestresultingfromfailuretoachievefullcompliancewiththeseprinciples.TheCommitteesuggestsimprovementsregardingcorporategovernanceapplicationstotheBoardofDirectors.Inaddition,theCommitteeoverseestheactivitiesoftheInvestorRelationsDepartmentandtheShareholderRelationsDepartment.
TheNominationCommitteeandtheRemunerationCommitteehavenotbeenestablishedandtheresponsibilitiesofthesecommitteesareincorporatedwithintheactivitiesoftheCorporateGovernanceCommittee.ThecandidatesnominatedforindependentmembershipsoftheBoardofDirectorshavebeenevaluatedconcerningindependencecriteriaundertherelatedlegislationandtheseevaluationshavebeenreported.
Thecommittee’sdutiesincludescreatingatransparentsystemfortheidentification,assessmentandtrainingofappropriatecandidatesformembershipoftheBoardofDirectors;determiningrelevantpoliciesandstrategies;makingregularassessmentsregardingthestructureandefficiencyoftheBoardofDirectors;andmakingproposalstotheBoardofDirectorsinrelationtopossiblechangestotheseaspects.
ThewagespolicyincludingtheprinciplesofdeterminationofwagesofmanagersinvolvedintheadministrativeresponsibilitiesandthemembersofBoardofDirectorswasdefinedandannouncedtopublicontheCompany’swebsite.
TheEarlyRiskDetectionCommitteeoperates forearlierdetectionof risks thatmay threaten theCompany’sgoingconcernand thecommittee endeavor to take required measures necessary and manage the risks. The committee evaluates the risk management systems oftheGroupcompaniesandreportsonthesame.
InaccordancewithCorporateGovernancePrinciples,allmembersoftheAuditCommitteeandthechairmenofothercommitteesmustbeindependentBoardmembers,andduetohavingtwoindependentmembersontheBoardofDirectors,Boardmembersmustserveon more than one committee.
Audit Committee:
ChairmanofCommitteeProf.Dr.AtillaMuratDemircioğlu(independentmember),andmemberHalitBozkurtAran(independentmember)
Corporate Governance Committee:
ChairmanofCommitteeProf.Dr.AtillaMuratDemircioğlu(independentmember),andmembersHalitBozkurtAran(independentmember),BeyzaGenç,ZeynepHansuUçarandKemalTansuAkalın
Early Risk Detection Committee:
ChairmenofCommitteeProf.AtillaMuratDemircioğlu(independentmember),andmembersHalitBozkurtAran(independentmember)andZeynepHansuUçar
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5.4. Internal Audit and Risk Management System
TheBoardofDirectorssetuptheinternalcontrolsystemsincludingtheriskmanagement,ITandtherelevantprocessesbytakingintoconsiderationtheopinionsofthecommitteesoftheBoardofDirectors.Accordingly,theBoardofDirectorsreviewstheeffectivenessofriskmanagementandinternalauditsystemsatleastonetimeanannualbasis.
Theglobalcrisiscontinuedsince2008andthegeopoliticaldevelopmentsthat impacttheregionswhichweoperate,aggravatedtheuncertainty. This volatile environment combinedwith the fierce competition that resulted from the efforts to gainmarket share fromshrinkingmarkets,increasingcustomerexpectations,tighteninglegalregulations,andthedevelopmentsincorporategovernancehasincreasedthealready-sensitiveriskperceptionsofallshareholdersandithasledtoquestioningoftheefficiencyofriskmanagementandinternalauditprocessesduring2014.Hence,RiskManagementandInternalAuditFunctionsattheGroupwereseparatedandorganizedunderdistinctdivisionsinordertoensurethatgreaterconcentrationisdevotedtothemanagementofthesetwotopicsthatmakeupthekeycomponentsofCorporateGovernance.
Inthiscontext,theGroupadoptsaproactiveapproachagainstcurrentandpotentialrisks,andcarriesoutauditactivitieswitharisk-basedperspective,underthisstructure.
WithinŞişecamGroup’sorganizationalstructure,riskmanagementandinternalauditactivitieshavebeenstructuredundertheparentcompany.TheactivitiesaredirectlyreportedtotheBoardofDirectorsoftheparentcompanyincoordinationwiththeCEOsmanagingthecoreoperationalareas.TheminutesofregularandscheduledmeetingsheldwiththeRiskCommittee,theAuditCommitteeandtheCorporateGovernanceCommitteesetupatTrakyaCamarereportedtotheBoardsofDirectorsinaccordancewiththelegislation.
During the course of the activities carried out for the purpose of establishing a corporate structure, providing the shareholders thenecessaryassurance,protectingthetangibleandintangibleassetsoftheŞişecamGroup,itsresourcesandtheenvironment,minimizingthe lossesresulting fromuncertainties,andmaximizingthebenefit frompotentialopportunities, the interactionbetween internalauditandriskmanagementfunctionsismaximizedwiththeobjectiveofsupportingthedecision-makingprocessandincreasingmanagementefficiency.
Risk Management at the Şişecam Group
Within ŞişecamGroup, riskmanagement activities are carried out with a holistic and proactive approach based on corporate riskmanagementprinciples.TheinteractionbetweenrisksandthecharacteristicsofthecountrieswheretheGroupoperatesarealsotakenintoaccount.Becauseofthisapproach,geographicaldistributionandriskdiversificationmaybecomeasignificantadvantage,andanyrisksencounteredasspecifictoacountryand/orabusinesssegmentareintegratedwiththeriskprocessesbeforetheyrealizedinothercountriesandtheinteractionofriskswitheachotherismonitored.Thus,decisionsupportprocessesareassistedandefficientuseofresources is ensured.
All business segments,grouped regarding their riskacross theGroup, areperiodically updatedwith the involvementof theGroup’semployees,andrisksaresortedaccordingtotheirdegreeofimportance.ThestrategiestobeimplementedinrelationtoanalyzedrisksaredeterminedconcerningtheriskappetiteoftheBoardofDirectors,andnecessarymeasuresaretaken.Theseriskmanagementactivitiesarenotrestrictedtofinancialandstrategicrisks;theyalsocoveroperationalrisksinrelationtoproduction,sales,occupationalhealthandsafety,emergencymanagementandinformationtechnologies.
Internal Audit at the Şişecam Group
TheinternalauditactivitiesthathavebeenconductedatourGroupareaimedathelpingtheGroupcompaniesthrivesoundly,ensuringuniformityinpractice,guaranteeingthatallactivitiesarecarriedoutinaccordancewithinternalandexternallegislation,andcorrectivemeasuresaretakeninatimelymanner.Inlinewiththeseobjectives,auditactivitiesareundertakenonanongoingbasisattheGroup’sdomesticandabroadestablishments.
InternalauditiscarriedoutinaccordancewithperiodicauditprogramsthatareapprovedbytheBoardofDirectors.Theauditprogramsarepreparedusingtheresultsofriskmanagementactivities,meaningthatrisk-basedauditpracticesareimplemented.
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5.5. Strategic Goals of the Company
TheprocessbywhichtheCompanyestablishes,reviewsandupdatesitsstrategicgoalsstartswiththeBoardofDirectors’expressionoftheCompany’sVisioninaccordancewiththeŞişecamGroup’sMission/VisionandValues.
ThestatementoftheCompany’svisionisageneralexpressionofthepositiontheCompanyaspirestoreachinthefuture.
TheBoardofDirectorsspelledoutthepointtheGroupwishestoreachby2020asfollows:“tobeafastgrowingglobalflatglasscompanywithitsstrongbrandsandinnovativesolutions”.
Thisfirststepisfollowedbyaseriesofeffortsaimedatunderstandingtheconditionsunderwhichoperationswillbepursuedinordertofulfilltherequirementsofthevision.Group-wideanalysesprovideaframeworkthatwillguidelower-levelactivitiesthroughClarificationofStrategicThemesandPriorities,ValidationandApprovalofSeniorExecutiveTargets.
Thenextstep is theexecutionofstrategicanalysesof thefieldsofactivities thatprovide inputs for theGroupStrategicPlan.Thesestrategicanalysesmakeupaseriesofworkaimedatunderstandingtheconditionsunderwhichoperationswillbepursuedinordertofulfilltherequirementsofthevision.
TheanalysisthatisdirectedtowardstheorganizationiscarriedoutunderthenameInternalAnalyses,whereastheotheronecoveringabroadareaincludingthemarket,competition,industriesfrom/towhichinputsareprocured/supplied,differentgeographies,consumersandsuppliers,etc.iscarriedoutunderthenameExternalAnalyses.Allthesearecombinedtoproducethesetof“Opportunities/Threats/Strengths/Weaknesses”foreachbusinessline.
Followingtheanalyses,StrategicMapsarecreatedand/orupdated.AStrategicMapdeterminesthetopicstheGroupwillfocusonundertheheadingsFinance,Customers,ProcessesandIntangibleAssets,aswellasthedifferentiating(strategic)elementsthattheGroupwillexcelin.AStrategicMapisdiversifiedonthebasisofbusinesslines,thuscreatingtheroadmaptheactivitieswillfollowinthefuture.ThemapsareputintoeffectthroughtheBalancedScorecard.EachstrategydefinedonthemapislinkedtoaPerformanceIndicator,thelevelofsuccessdesiredtobereachedbythisindicator,andtheprojectsandorganizationalstructurenecessaryforthesaideffectiveness.
Inordertoincreaseitspracticability,thestrategicplan,whichhasbeenclarifiedintermsoffieldsofactivity,havebeendetailedonthebasisoftwomainfunctions(Marketing/SalesandProduction).Atthispoint,sharedservicessuchasHumanResources,ResearchandDevelopment,FinancialAffairsandParentCompanyInformationTechnologiesarelinkedtotheprocess.
TheresultingStrategicPlanistestedviafinancialprojections.Clarifiedforthelasttimewithallofitscomponents,theplanissharedwiththeexecutiveunitsin“PlanMeetings”.Havingmaturedandsupportedwithprojects,theplanisincorporatedintotheBudgetdocumentforfirstyearofenforcement.
At theendof theprocess, theplan issubmitted for theapprovalof theBoardofDirectors.Once theBoardofDirectorsmakes thecorrectionsitdeemsnecessary,theplanisputintoeffectundertheleadershipoftheGroupPresident.
TheCorporatePerformanceProgramisusedtomeasureandmonitorthesuccessofthestrategy inpractice.Theprogramprovidesopportunity for performance assessment through primarymonitoringmeetings held four times a year. Furthermore, executive unitsoverseetheperformanceoftheplanonamonthlybasisthroughtheAnnualReport(Budget)systematic,onaquarterlybasisthrough
GroupMeetings,onshort-andlong-termbasesthroughDecisionSupportUnits,ManagementInformationSystems,etc.Theyrevisestrategicprioritiesatthetimeofthenewplan,ifnecessary.AllresultsfromtheoversightarepresentedfortheinformationoftheBoardofDirectorswithintherelevantperiod.
WithinthereformulatedStrategicPlanningsystematic, thevision isa long-termtext.Allaspectsof internalandexternalanalysesarerepeatedeveryyear.TheStrategicMapisatextthatisrenewedthroughannualupdatesonceitisestablished.TheBalancedScorecardis a system that is run on an annual cycle.
Ingeneral,thevisionisrevisedonceinfiveyears,andthemissiononceintenyears.
Forscalingtheperformancefromacorporateleveldowntoemployeelevel,IndividualPerformanceManagementSystemislinkedtotheStrategicPlan.
Withinthisframework,theCompanyhasembracedthefollowingheadingsandaspectsasthekeycomponentsoftheplan:
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Withinthecontextoffinance:
• Organicandinorganicgrowth
•Effective total cost management
• Focusonvalue-addedproductstocreateaprofitableportfoliocomposition
Withinthecontextofcustomervalue:
• Beasolutionpartnerthatputscustomerandbusinesspartnersatisfactioninitsfocalpoint
• Quickconversiontohighvalue-addedproducts
Withinthecontextofprocesses:
• Haveamarket-andcustomer-orientedstructure
• Increaseproductivitythroughswift,leanandflexibleprocesses
• BeaninnovativecompanydrivenbyR&D,PDanddesignactivities
•Maintainanenvironmentalistapproachandasustainableattitudewhileachievingalloftheabove
Withinthecontextoforganizationdevelopmentandinfrastructure:
• Beacompanypreferredbythebestpeople,whichishighlycompatiblewithglobalization,populatedbycompetentemployees,andimproves employee motivation
•Exercise maximum skill in the management of information
• Createalearningcorporateculturethatespousesbestpractices,whichatthesametimedoesnotneglectitstraditions
5.6. Financial Benefits
All rights, benefits and remuneration provided to themembers of theBoard of Directors are determined each year by theGeneralAssembly,assetoutintheArticlesofAssociation.AttheCompany’s2012OrdinaryGeneralAssemblymeetingheldon5April2013,themonthlyremunerationtobepaidtothemembersoftheBoardofDirectorshavebeenfixed,whichwerethenpubliclydisclosed.TheremunerationprinciplesfortheseniorexecutivesoftheCompanyhavebeendocumented,presentedfortheinformationofshareholdersunderaseparateagendaitemattheOrdinaryGeneralAssemblyofShareholdersheldon5April2013,andpostedontheCompany’swebsite.
Neither theGroupPresident norother senior executives receive anypaymentsdirectly indexed to turnover, profitability or other keyindicators,whichcanbetechnicallyconsideredasapremium.TheGroupPresidentandotherseniorexecutivesarepaid,inadditiontocashpaymentsincludingsalaries,bonuses,andfringebenefits,asumunderthenamebonuspaymentonceayear,whichisdeterminedtakingintoconsiderationvariouscriteriaincludingthenatureandriskleveloftheCompany’soperations,themagnitudeofthestructurethatisadministeredandconducted,andthesectorinwhichtheCompanyisengaged,andiseitherincreased,orkeptunchanged,asthecasemaybe,inviewofvariousindicatorssuchasinflation,overallsalaryincreasesandtheriseintheCompany’sprofitability.Furthermore,companycarsareprovidedtotheCompany’sseniorexecutivesaspartofintangiblebenefits.
Withinthisscope,totalpaymentsmadetothemembersoftheBoardofDirectorsandseniorexecutiveswithintheframeoftheremunerationpolicyaredisclosedinthenotestothefinancialstatements.Non-disclosureofthebenefitsprovidedonthebasisofindividualshasnotledtoaconflictofinterests.
TheCompanydoesnot lendanymoneyorextendcredit to theBoardmembersandexecutives,doesnotgrantanypersonal loansthroughathirdparty,orfurnishanycollateralsuchasguaranteeintheirfavor.
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1. ElectionofthePresidingBoardandauthorizationofthePresidingBoardtosigntheGeneralAssemblymeetingminutes
2. ReadingouttheBoardofDirectors’ActivityReportregardingtheCompany’s2014operations,andthesummaryofthe IndependentAuditor’sreport
3.Examination,deliberationandratificationofthebalancesheetandincomestatementsfor2014
4. ApprovaloftheindividualselectedtosucceedtheBoardofDirectorsmemberswhoresignedduringthereportingperiod
5. AcquittalofthemembersoftheBoardofDirectors
6. ElectionofthemembersoftheBoardofDirectors
7. DeterminationoftheremunerationtobepaidtothemembersoftheBoardofDirectors
8. AuthorizingtheBoardofDirectorsmemberspursuanttoArticles395and396oftheTurkishCommercialCode(TCC)
9.Decisiononthedistributionmannerandtimingof2014profit
10.DecisiononamendingtheCompany’sArticlesofAssociationasshownintheDraftAmendmentsattachedhereto, providedthatnecessaryapprovalsshallhavebeenreceivedfromtheCapitalMarketsBoardofTurkey(CMB)andT.R. MinistryofCustomsandTrade
11.DecisiononthedesignationoftheindependentauditfirmpursuanttotheTurkishCommercialCode(TCC) andtheCMBregulations
12.Provisionofinformationtoshareholdersregardingthedonationsmadeduringthereportingperiodand determinationoftheupperlimitofdonationstobemadein2015
13.Provisionofinformationtoshareholdersregardingguarantees,pledgesandmortgagesprovidedinfavorofthirdparties
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Article 3:PURPOSE AND SCOPEThepurposeandscopeoftheCompanyareasfollows:1. Establish and develop the glass industry and other auxiliary,
secondary,complementaryandreplacementssectorsthataredirectlyorindirectlyrelatedtoit,aswellasthosethatsupply/procure inputs from/to these industries; participate in thosethatarealreadyestablished;
2. Engage in other industrial, commercial or financial activities,establish companies in these fields of activity or acquirea stake in existing companies, in order to guarantee theCompany’sprofitablegrowthanditssurvivalbydecreasingtheconcentrationofriskandtocapitalizeonitspotentialincaseswheretheeconomicconjunctureassociatedwithitsscopesorequires.
3.EstablisheconomicandsocialservicesundertheCompany.Toachieveitsobjectives,theCompanymay:1-Set up facilities and companies engaged in industrial,
commercial or financial activities in Turkey or abroad. Itmayacquirestakeinexistingones.Itmayemployforeignspecialistsorstaff,whennecessary;
2-Carry out any and all commercial, industrial and financialtransactions that are related to its fields of activity. It mayassume official or private undertakings. It may participate inthecapitalsofbanks,insurancecompaniesandotherfinancialinstitutions;
3-CarryoutthedomesticandinternationalsalestransactionsoftheCompany and its associates. To this end, itmay set upcompanies in Turkey and abroad. It may acquire a stake inthesecompanies,andopenwarehouses, stores,exhibitions,representativeoffices,etc.Itmaytakenecessaryactionforthedomesticandoverseassupply,customclearance,andstorageof raw materials, auxiliary materials, packaging materials,energy,minerals,machineryandequipment,semi- finishedproductsandfinishedproductsthatarerelatedtothefields of activities of these companies, and it may establishcompaniesthatwillengageinsuchaffairs;
4-Possessthenecessaryprivileges,licenses,trademarklicenses,patents,patentrightsandsimilarrights.ItmaytransferthemtothirdpartiesinTurkeyorabroad;
5-Possess,disposeof,let,and/orcreatelienon,realpropertiesandrealrightsforperformingtheactivitiesincludedinitsfieldsofoperation.Itmayestablishorrevokeliensonrealpropertiesownedbyothers infavoroftheCompanyor itmayholdanyrightinthem;
6-Assume construction undertakings that are related to theCompany’spurposeandscope;
7-Explore and process minerals that are directly or indirectlyassociatedwiththeCompany’spurposeandscope;
8-Establish research centers in relation to its scope. It mayparticipate in such institutions.
Article 3:PURPOSE AND SCOPEThepurposeandscopeoftheCompanyareasfollows:1. Establish and develop the glass industry and other auxiliary,
secondary,complementaryandreplacementssectorsthataredirectlyorindirectlyrelatedtoit,aswellasthosethatsupply/procure inputs from/to these industries; participate in thosethatarealreadyestablished;
2. Engage in other industrial, commercial or financial activities,establish companies in these fields of activity or acquirea stake in existing companies, in order to guarantee theCompany’sprofitablegrowthanditssurvivalbydecreasingtheconcentrationofriskandtocapitalizeonitspotentialincaseswheretheeconomicconjunctureassociatedwithitsscopesorequires.
3.EstablisheconomicandsocialservicesundertheCompany.Toachieveitsobjectives,theCompanymay:1-Set up facilities and companies engaged in industrial,
commercial or financial activities in Turkey or abroad. Itmayacquirestakeinexistingones.Itmayemployforeignspecialistsorstaff,whennecessary;
2-Carry out any and all commercial, industrial and financialtransactions that are related to its fields of activity. It mayassume official or private undertakings. It may participate inthecapitalsofbanks,insurancecompaniesandotherfinancialinstitutions;
3-CarryoutthedomesticandinternationalsalestransactionsoftheCompany and its associates. To this end, itmay set upcompanies in Turkey and abroad. It may acquire a stake inthesecompanies,andopenwarehouses, stores,exhibitions,representativeoffices,etc.Itmaytakenecessaryactionforthedomesticandoverseassupply,customclearance,andstorageof raw materials, auxiliary materials, packaging materials,energy,minerals,machineryandequipment,semi- finishedproductsandfinishedproductsthatarerelatedtothefields of activities of these companies, and it may establishcompaniesthatwillengageinsuchaffairs;
4-Possessthenecessaryprivileges,licenses,trademarklicenses,patents,patentrightsandsimilarrights.ItmaytransferthemtothirdpartiesinTurkeyorabroad;
5-Possess,disposeof,let,and/orcreatelienon,realpropertiesandrealrightsforperformingtheactivitiesincludedinitsfieldsofoperation.Itmayestablishorrevokeliensonrealpropertiesownedbyothers infavoroftheCompanyor itmayholdanyrightinthem;
6-Assume construction undertakings that are related to theCompany’spurposeandscope;
7-Explore and process minerals that are directly or indirectlyassociatedwiththeCompany’spurposeandscope;
8-Establish research centers in relation to its scope. It mayparticipate in such institutions
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9-TheCompanymayacquirestakeinexistingorfuturedomesticand/or foreign companies. It may purchase shares and/orothermarketablesecurities,providedthattheywillnotbeofthenatureofinvestmentservicesoractivities.Itmaydisposeof its existing shares (or the shares) or other marketablesecuritiesinitspossession,ortransferthemtoothers.Itmaycreate a pledge over them in favor of others or hold them in pledge.
10-The Company may carry out any and all logistics andtransportation services for itself and its Group companieswithintheframeoftheobjectiveandscopementionedabove.Tothisend,itmayfurnishthefollowingservices:a.Domesticandinternationaltransportationwithallkindsof
motorvehicles,watercraftandaircraftb.Allkindsofhandling,portoperationandcustomclearancec.Allkindsofstorage,privatebondedwarehouseoperation,
packaging and packingd.Operateasadealer,representative,agencyorbrokerand
conclude agreements in relation to the activities mentioned initems(a),(b)and(c)above
e.Purchaseorrentallkindsofmotorvehicles,watercraftandaircraftandequipmenttocarryouttheabovementionedservices;undertaketheirrepairandmaintenanceservices,andtheirtrading, includingimporting,andrepresentationof these vehicles
11- Itmayleasethemotorvehicles,watercraftandaircraftthatitownstothirdparties,andmayoperatetheminthismanner.TheCompanymayprovidesuretyshipfortheincorporation,capital increase, bank loans, bond and commercial billissuances, and other payables of the corporations in thecapitals and/or managements of which it has participateddirectly or indirectly.The Company complies with the principles set out bythe capital market legislation when furnishing guarantee,suretyship, collateral or creating lien including mortgage inits own name and in favor of third parties. The provisionsgoverning transfer of disguised profit of the capital marketlegislation are reserved.
12-TheCompanymaymakecharitabledonationswithintheframeofsocialresponsibilityandinaccordancewiththeprinciplesandproceduressetbytheCapitalMarketsBoardofTurkey(CMB).
9-TheCompanymayacquirestakeinexistingorfuturedomesticand/or foreign companies. It may purchase shares and/orothermarketablesecurities,providedthattheywillnotbeofthenatureofinvestmentservicesoractivities.Itmaydisposeof its existing shares (or the shares) or other marketablesecuritiesinitspossession,ortransferthemtoothers.Itmaycreate a pledge over them in favor of others or hold them in pledge.
10-The Company may carry out any and all logistics andtransportation services for itself and its Group companieswithintheframeoftheobjectiveandscopementionedabove.Tothisend,itmayfurnishthefollowingservices:a.Domesticandinternationaltransportationwithallkindsof
motorvehicles,watercraftandaircraftb.Allkindsofhandling,portoperationandcustomclearancec.Allkindsofstorage,privatebondedwarehouseoperation,
packaging and packingd.Operateasadealer,representative,agencyorbrokerand
conclude agreements in relation to the activities mentioned initems(a),(b)and(c)above
e.Purchaseorrentallkindsofmotorvehicles,watercraftandaircraftandequipmenttocarryouttheabovementionedservices;undertaketheirrepairandmaintenanceservices,andtheirtrading, includingimporting,andrepresentationof these vehicles
11- Itmayleasethemotorvehicles,watercraftandaircraftthatitownstothirdparties,andmayoperatetheminthismanner.TheCompanymayprovidesuretyshipfortheincorporation,capital increase, bank loans, bond and commercial billissuances, and other payables of the corporations in thecapitals and/or managements of which it has participateddirectly or indirectly.The Company complies with the principles set out bythe capital market legislation when furnishing guarantee,suretyship, collateral or creating lien including mortgage inits own name and in favor of third parties. The provisionsgoverning transfer of disguised profit of the capital marketlegislation are reserved.
12-TheCompanymaymakecharitabledonationswithintheframeofsocialresponsibilityandinaccordancewiththeprinciplesandproceduressetbytheCapitalMarketsBoardofTurkey(CMB).
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13- The Company deals with the establishment, commissioning, and letting electric energy generation facilities; electric energy generation, and sales of the electricity and/or capacity, hot water, steam, demin water, heat and other byproducts.To achieve this objective, the Company shall engage in the following activities in accordance with the legislation governing the electricity market.
a. Establish, commission, take over, let, rent all kinds of facilities to generate electric energy,
b. Sell electricity and/or capacity to legal persons holding wholesale licenses, legal persons holding retail licenses, and eligible consumers on the basis of bilateral agreements,
c. Enter into a participation relationship with existing or future transmission companies, without establishing control over the same,
d. Enter into a participation relationship with existing or future electric energy generation companies.
Article 6: CAPITAL The Company has adopted the Registered Capital System in accordance with the provisions of the Capital Market andswitchedtothissystemwiththeCMBpermissionno.825dated9September1990.RegisteredcapitaloftheCompanyisTRY1,500,000,000,dividedinto150,000,000,000registeredshareseachwithanominalvalueofTRY0.01.TheCompany’s issuedcapital isTRY739,000,000,divided into73,900,000,000 registeredshareseachwithanominal valueofTRY0.01. TRY739,000,000 that constitutes the issuedcapitalhasbeenfullypaid-inandcovered.The authorized capital permission granted by theCMB is validfor the years from 2012 through 2016 (five years). Even if theauthorized capital so permitted is not reached by the end of2016, topassacapital increasedecisionafter2016, theBoardofDirectorsmustgetauthorizationfromtheGeneralAssemblyforanewperiodoftimeupongettingpermissionfromtheCMBforthepreviouslypermittedoranewmaximumcapitalamount.Intheabsenceofthesaidauthorization,theCompanymaynotincreasethecapitalbasedonaBoardofDirectorsdecision.Thesharesrepresentingthecapitalaretrackedindematerializedformwithintheframeofdematerializationprinciples.
Article 6: CAPITAL The Company has adopted the Registered Capital System in accordance with the provisions of the Capital Market andswitchedtothissystemwiththeCMBpermissionno.825dated9September1990.RegisteredcapitaloftheCompanyisTRY1,500,000,000,dividedinto150,000,000,000bearershareseachwithanominalvalueofTRY0.01.TheCompany’s issuedcapital isTRY739,000,000,divided into73,900,000,000 bearer shares each with a nominal value ofTRY0.01. TRY739,000,000 that constitutes the issuedcapitalhasbeenfullypaid-inandcovered.The authorized capital permission granted by theCMB is validfor the years from 2012 through 2016 (five years). Even if theauthorized capital so permitted is not reached by the end of2016, topassacapital increasedecisionafter2016, theBoardofDirectorsmustgetauthorizationfromtheGeneralAssemblyforanewperiodoftimeupongettingpermissionfromtheCMBforthepreviouslypermittedoranewmaximumcapitalamount.Intheabsenceofthesaidauthorization,theCompanymaynotincreasethecapitalbasedonaBoardofDirectorsdecision.Thesharesrepresentingthecapitalaretrackedindematerializedformwithintheframeofdematerializationprinciples.
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Article 22:CHANGES TO THE ARTICLES OF ASSOCIATIONAnychanges to theseArticlesofAssociation, including capital decreases,arefinalizedandenforcedupongettingtheconsent of the Energy Market Regulatory Authority and in accordance with the provisions of the Turkish Commercial Code and theCapitalMarketLaw.Suchchangesbecomeeffectiveagainstthirdparties as of the date of their promulgation following their dulyapprovalandregistrationwiththetraderegistry.Article 32: SALES AND TRANSFER OF SHARES:Provided that necessary disclosures required by the CMB are made within the frame of material event disclosures so as to inform the investors, direct or indirect acquisition of shares representing 5% or more of the Company’s capital by a real or legal person, or share acquisitions that result in shares held by a shareholder to exceed 5% of the capital in the legal person, and/or share transfers that result in the shares held by a shareholder to fall below the above mentioned percentages are subject to the approval of the Energy Market Regulatory Authority in each instance. This provision shall remain in effect even in cases where voting rights are acquired.Even if no share transfer takes place, creation of a privilege on existing shares, revocation of an existing privilege, or issuing dividend shares are subject to the approval of the Energy Market Regulatory Authority, irrespective of percentage limits.The capital market legislation is conformed to in the transfer of share certificates traded on the stock exchange.Article 33: PROVISIONS GOVERNING MERGER: The Company may merge with other companies, together with all its assets and liabilities. Mergers take place in accordance with the applicable provisions of the Turkish Commercial Code. In the event that a legal person licensee wishes to take over all assets and liabilities of one or more legal person licensees as a whole, approval must be obtained from the CMB and the Capital Market Regulatory Authority regarding the permission for the merger, without prejudice to the provisions of the Act no. 4054 on the Protection of Competition governing mergers and acquisitions.Upon receipt of the said approval, merger formalities and procedures shall be consummated within one hundred and eighty days following the date of approval.Such a merger agreement shall not contain any provisions that will infringe the consumers’ rights and receivables, or that will eliminate the Company’s payables. Such an agreement must cover the required terms and conditions stipulated by the electricity market legislation.The provisions of the capital market legislation governing mergers are reserved.
Article 22:CHANGES TO THE ARTICLES OF ASSOCIATIONAny changes to these Articles of Association are finalized andenforced in accordance with the provisions of the TurkishCommercial Code and the Capital Market Law. Such changesbecome effective against third parties as of the date of theirpromulgation following their duly approval and registration withthe trade registry.ThisarticlehasbeenremovedfromtheArticlesofAssociation.ThisarticlehasbeenremovedfromtheArticlesofAssociation.
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Capital Increase, Changes to the Articles of Association and Dividend Distribution During the Reporting Period
IntheTrakyaCamSanayiiA.Ş.BoardofDirectorsmeetingheldon06March2014,itwasdecidedtogetapreliminarylicense/licensefortheCompanytogenerateelectricityfromwasteheat.Accordingly,uponreceiptofnecessarypermissionsfromtheCapitalMarketsBoardofTurkeyandfromtheMinistryCustomsandTrade,theamendmentof“Article 3-PurposeandScope”,“Article 6-Capital”,“Article 22-ChangestotheArticlesofAssociation”,andthesupplementof“Article 32-SalesandTransferofShares”and“Article 33 -ProvisionsGoverningMerger”totheArticlesofAssociation,inordertoachievecompliancewiththeprovisionsoftheElectricityMarketlegislationoftheEnergyMarketRegulatoryAuthority(EMRA),wereapprovedbytheshareholdersatthe2013OrdinaryGeneralAssemblyofShareholdersmeetingheldon03April2014,andwerethenregistered.
InlinewiththedecisionpassedattheOrdinaryGeneralAssemblymeetingheldon3April2014,dividendsintheamountofTRY29,000,000coveredfrom2013profit,whichcorrespondedto4.08450%ofthecurrentissuedcapital,wasdistributedincashtoshareholderson30May2014,whereasgrossdividendsintheamountofTRY29,000,000,whichcorrespondedto4.08450%ofthecurrentissuedcapital,wasdistributedtoshareholdersproratatheirshareholdingon7July2014.
ThenecessarylegalprocedureforraisingtheCompany’sissuedcapitalfromTRY710,000,000toTRY739,000,000,whichremainswithinthecurrentauthorizedcapitalofTRY1,500,000,000,andfortheamendmentof“Article6-Capital”oftheArticlesofAssociationhavebeenconsummatedandregisteredon2July2014.
Other Matters
TheConclusionsectionofthe“AffiliatedCompanyReport”drawnuppursuanttoArticle199oftheTurkishCommercialCodeisasfollows:
Inalltransactionsrealizedin2014withthecontrollingcompany,andthesubsidiariesthereof,ourCompanyadheredtotheprovisionsofthelegislationgoverningdisguisedprofitdistributionthroughtransferpricing,andnosituationsarosein2014,whichwouldhaverequiredequalizationoflossesbyreasonofthetransactionsdescribedabove.
Legal Basis of the Annual Report
TheAnnualReportoftheCompanyfor2014fiscalyearhasbeenpreparedinconformitywiththeprovisionsofthe“RegulationontheMinimumContentsofAnnualReportsofCompanies”issuedbytheMinistryofCustomsandTradebasedonArticles516(3)and518oftheTurkishCommercialCodeandoftheCMBCommuniquéonPrinciplesofFinancialReportinginCapitalMarkets.
Preparation Principles of the Annual Activity Report
Theannualreportpresentsanaccurate,complete,fairandtrueviewoftheflowoftheCompany’saffairsandtransactionsintherelevantfiscalyear,andallaspectsofitsfinancialstatus,inamannerthatalsoobservestheCompany’srightsandinterests.Theannualreportdoesnotcontainanydeceitful,exaggerated,falseormisleadingstatements.
CareistakentopreparetheannualreportinsufficientdetailtogiveshareholdersfullandaccurateaccesstoallinformationabouttheCompany’soperationsandactivities.
Approval of the Annual Activity Report
TheCompany’sannualactivityreportfor2014fiscalyearhasbeensignedandapprovedbythemembersoftheCompany’sBoardofDirectorson27February2015.
CAPITAL INCREASE, CHANGES TO THE ARTICLES OF ASSOCIATION AND DIVIDEND DISTRIBUTION DURING THE REPORTING PERIOD
122 TRAKYA CAM SANAYİİ 2014 ANNUAL REPORT
CONVENIENCE TRANSLATION INTO ENGLISH OF INDEPENDENT AUDITOR’S REPORTON THE BOARD OF DIRECTORS’ ANNUAL REPORT ORIGINALLY ISSUED IN TURKISH
To the Board of Directors of Trakya Cam Sanayii A.Ş.
Auditor’s Report on the Board of Directors’ Annual Report
1. WehaveauditedtheannualreportofTrakyaCamSanayiiA.Ş.(the“Company”)anditsSubsidiaries(collectivelyreferredtoasthe“Group”)fortheperiodended31December2014.
Board of Directors’ responsibility for the Annual Report
2. TheGroup’smanagementisresponsibleforthefairpreparationoftheannualreportanditsconsistencywiththeconsolidatedfinancialstatements in accordancewithArticle514of TurkishCommercialCode (“TCC”)No.6102andCapitalMarketsBoard’s (“CMB”)CommuniquéSerialII,No:14.1,“PrinciplesofFinancialReportinginCapitalMarkets”(the“Communiqué”)andforsuchinternalcontrolasmanagementdeterminesisnecessarytoenablethepreparationoftheannualreport.
Independent Auditor’s Responsibility
3. OurresponsibilityistoexpressanopinionontheGroup’sannualreportbasedontheindependentauditconductedpursuanttoArticle397ofTCCandtheCommuniqué,whetherornotthefinancialinformationincludedinthisannualreportisconsistentwiththeGroup’sconsolidatedfinancialstatementsthataresubjecttoindependentauditor’sreportdated27February2015andpresentedfairly.
OurindependentauditwasconductedinaccordancewithIndependentAuditingStandardsthatarepartoftheTurkishStandardson Auditing issued by the Public Oversight Accounting and Auditing Standards Authority. Those standards require that ethicalrequirementsarecompliedwithandthattheindependentauditisplannedandperformedtoobtainreasonableassurancewhetherthefinancialinformationintheannualreportisfairlypresentedandconsistentwiththeconsolidatedfinancialstatements.
Anindependentauditrequiresapplyingauditprocedurestoobtainauditevidenceonthehistoricalfinancialinformation.Theproceduresselecteddependontheprofessionaljudgementoftheindependentauditor.
Webelievethattheindependentauditevidenceswehaveobtainedduringourindependentaudit,aresufficientandappropriatetoprovideabasisforouropinion.
123
Opinion
4. Basedonouropinion,thefinancialinformationintheannualreportofBoardofDirectorsofTrakyaCamSanayiiA.Ş.isconsistentwiththeauditedconsolidatedfinancialstatementsandpresentedfairly,inallmaterialrespects.
Other Responsibilities Arising From Regulatory Requirements
5. Pursuant to subparagraph3ofArticle 402of theTCCNo. 6102,within the context of ISA570 “GoingConcern”,wehavenotencountered any significant issuewhichwe are required to be reportedwith regard to the inability of theGroup to continue itsoperationsfortheforeseeablefuture.
BaşaranNasBağımsızDenetimve
SerbestMuhasebeciMaliMüşavirlikA.Ş.
amemberof
PricewaterhouseCoopers
GökhanYüksel,SMMM
Partner
Istanbul,27February2015
124 TRAKYA CAM SANAYİİ 2014 ANNUAL REPORT
TRAKYA CAM SANAYİİ A.Ş.
Management and Sales CenterİşKuleleriKule3,343304.Levent,İstanbulTel:(0212)3505050Faks:(0212)3505080www.trakyacam.com.trwww.isicam.com.tr
Trakya Cam Sanayii A.Ş.Trakya Lüleburgaz Plant BüyükkarıştıranMevkii,P.K.9839780,Lüleburgaz,KırklareliTel:(0288)4008000Faks:(0288)4007799
Trakya Cam Sanayii A.Ş.Autoglass Plant BüyükkarıştıranMevkii,P.K.9839780,Lüleburgaz,KırklareliTel:(0288)4008531Faks:(0288)4008358
Trakya Cam Sanayii A.Ş.Mersin Plant MersinTarsusOrganizeSanayiBölgesi,AtatürkCaddesiNo:133400,AkdenizMersinTel:(0324)6764070Faks:(0288)4007799
Trakya Yenişehir Cam Sanayii A.Ş. AtatürkOrganizeSanayiiBölgesi16900,Yenişehir,BursaTel:(0224)2801205Faks:(0224)7732755
Trakya Polatlı Cam Sanayii A.Ş. PolatlıOrganizeSanayiiBölgesi,06900Polatlı,AnkaraTel:(0850)2062646Faks:(0850)2062303
Trakya Glass Bulgaria EAD Flat Glass PlantDistrict‘’Vabel’’IndustrialArea,7700Targovishte,BulgariaTel:(00359)60147801Faks:(00359)60147797
Trakya Glass Bulgaria EADProcessed Glass Plant District‘’Vabel’’IndustrialArea,7700Targovishte,BulgariaTel:(00359)60147925Faks:(00359)60147926
Trakya Glass Bulgaria EADAutomotive Glass Plant District‘’Vabel’’IndustrialArea,7700Targovishte,BulgariaTel:(00359)60147966Faks:(00359)60147972
Glass Corp S.A.1BIS,IndustriilorAlley,120068Buzau,RomaniaTel:(00407)48068766Faks:(00402)38710552
Richard Fritz Holding GmbH Gottlieb-Daimler-Str.474354Besigheim,GermanyTel:(0212)3503534Faks:(0212)3505080
Richard Fritz Holding GmbH - RF SPOL, S.R.O. Tovarenska15,Malacky90114,Slovakia Tel:(0212)3503534 Faks:(0212)3505080
Richard Fritz Holding GmbHRICHARDFRITZPROTOTYPE+SPAREPARTSGmbHGottlieb-Daimler-Str.4 74354Besigheim,GermanyTel:(0212)3503534 Faks:(0212)3505080
Richard Fritz Holding GmbHRICHARDFRITZKFT2170Aszod,PestiUt19/A,HungaryTel:(0212)3503534Faks:(0212)3505080
Trakya Glass Rus AO423600,RepublicofTatarstan,ElabugaMunicipalDistrict,SpecialEconomicZone(SEZ)“Alabuga”Sh-2Street,Building4/1,Office4002RussianFederationTel:(0212)3503534Faks:(0212)3505080
Automotive Glass Alliance Rus AO423600,RepublicofTatarstan,ElabugaMunicipalDistrict,SpecialEconomicZone(SEZ)“Alabuga”,Sh-2Street,Building4/1,Office4002RussianFederationTel:(0212)3503534 Faks:(0212)3505080
HNG Float Glass Limited2,RedCrossPlace,PostBox:2722,Kolkata700001,IndiaTel:(0212)3503534 Faks:(0212)3505080
SAINT GOBAIN GLASS EGYPT66CornishElNile,Elzahraabuilding,floorno:38,Maadi,Cairo,EgyptTel:(0212)3503534 Faks:(0212)3505080
DIRECTORY
Printed on recycled paper.
CONTENTS
01 TRAKYA CAM IN BRIEF
02 FINANCIAL INDICATORS
04 TRAKYA CAM PRODUCTION PLANTS
06 BOARD OF DIRECTORS
07 EXECUTIVES
08 TO OUR SHAREHOLDERS
1 1 ACTIVITIES IN 2014
19 CONSOLIDATED FINANCIAL STATEMENTS WITH INDEPENDENT AUDITOR’S REPORT
98 DISTRIBUTION OF 2014 PROFIT
99 CORPORATE GOVERNANCE PRINCIPLES COMPLIANCE REPORT
116 AGENDA OF THE ORDINARY GENERAL ASSEMBLY
117 DRAFT AMENDMENTS TO THE ARTICLES OF ASSOCIATION
121 CAPITAL INCREASE, CHANGES TO THE ARTICLES OF ASSOCIATION AND
PROFIT DISTRIBUTION IN THE FISCAL YEAR 2014
122 INDEPENDENT AUDITOR’S REPORT ON THE BOARD OF DIRECTORS’ ANNUAL REPORT
124 DIRECTORY