TURKCELL ILETISIM HIZMETLERI AS
|
|
CONDENSED
CONSOLIDATED
INTERIM
STATEMENT OF PROFIT OR LOSS
|
For the six months ended 30 June 2017
|
(Amounts expressed in thousands of Turkish Liras unless otherwise stated. Currencies other than Turkish Liras are expressed in thousands unless otherwise stated.)
|
|
|
|
|
|
Six months ended
|
|
|
Three months ended
|
|
|
|
Note
|
|
|
30 June
2017
|
|
|
30 June
2016
|
|
|
30 June
2017
|
|
|
30 June
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
4
|
|
|
|
8,111,536
|
|
|
|
6,551,595
|
|
|
|
4,174,904
|
|
|
|
3,328,560
|
|
Revenue from financial services
|
|
|
|
|
|
|
257,084
|
|
|
|
31,877
|
|
|
|
141,114
|
|
|
|
29,530
|
|
Total revenue
|
|
|
|
|
|
|
8,368,620
|
|
|
|
6,583,472
|
|
|
|
4,316,018
|
|
|
|
3,358,090
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue
|
|
|
|
|
|
|
(5,268,211
|
)
|
|
|
(4,250,570
|
)
|
|
|
(2,710,357
|
)
|
|
|
(2,232,144
|
)
|
Cost of revenue from financial services
|
|
|
|
|
|
|
(132,362
|
)
|
|
|
(5,090
|
)
|
|
|
(73,579
|
)
|
|
|
(4,746
|
)
|
Total cost of revenue
|
|
|
|
|
|
|
(5,400,573
|
)
|
|
|
(4,255,660
|
)
|
|
|
(2,783,936
|
)
|
|
|
(2,236,890
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit from non-financial services
|
|
|
|
|
|
|
2,843,325
|
|
|
|
2,301,025
|
|
|
|
1,464,547
|
|
|
|
1,096,416
|
|
Gross profit from financial services
|
|
|
|
|
|
|
124,722
|
|
|
|
26,787
|
|
|
|
67,535
|
|
|
|
24,784
|
|
Gross profit
|
|
|
|
|
|
|
2,968,047
|
|
|
|
2,327,812
|
|
|
|
1,532,082
|
|
|
|
1,121,200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
|
|
|
|
|
|
|
32,091
|
|
|
|
45,352
|
|
|
|
(2,887
|
)
|
|
|
39,347
|
|
Selling and marketing expenses
|
|
|
|
|
|
|
(972,930
|
)
|
|
|
(964,412
|
)
|
|
|
(508,314
|
)
|
|
|
(483,164
|
)
|
Administrative expenses
|
|
|
|
|
|
|
(383,603
|
)
|
|
|
(354,475
|
)
|
|
|
(183,771
|
)
|
|
|
(175,803
|
)
|
Other expenses
|
|
|
|
|
|
|
(65,226
|
)
|
|
|
(42,668
|
)
|
|
|
(33,936
|
)
|
|
|
(25,559
|
)
|
Operating profit
|
|
|
|
|
|
|
1,578,379
|
|
|
|
1,011,609
|
|
|
|
803,174
|
|
|
|
476,021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance income
|
|
|
6
|
|
|
|
443,419
|
|
|
|
383,706
|
|
|
|
241,925
|
|
|
|
162,459
|
|
Finance costs
|
|
|
6
|
|
|
|
(494,204
|
)
|
|
|
(195,671
|
)
|
|
|
(146,120
|
)
|
|
|
(140,671
|
)
|
Net finance income / (cost)
|
|
|
|
|
|
|
(50,785
|
)
|
|
|
188,035
|
|
|
|
95,805
|
|
|
|
21,788
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit before income tax
|
|
|
|
|
|
|
1,527,594
|
|
|
|
1,199,644
|
|
|
|
898,979
|
|
|
|
497,809
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
|
|
|
7
|
|
|
|
(341,157
|
)
|
|
|
(205,685
|
)
|
|
|
(183,943
|
)
|
|
|
(62,251
|
)
|
Profit from continuing operations
|
|
|
|
|
|
|
1,186,437
|
|
|
|
993,959
|
|
|
|
715,036
|
|
|
|
435,558
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit/ (loss) from discontinued operations
|
|
|
|
|
|
|
-
|
|
|
|
7,301
|
|
|
|
-
|
|
|
|
(7,879
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit for the period
|
|
|
|
|
|
|
1,186,437
|
|
|
|
1,001,260
|
|
|
|
715,036
|
|
|
|
427,679
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit attributable to:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Owners of Turkcell Iletisim Hizmetleri AS
|
|
|
|
|
|
|
1,162,645
|
|
|
|
978,804
|
|
|
|
704,073
|
|
|
|
416,086
|
|
Non-controlling interest (*)
|
|
|
|
|
|
|
23,792
|
|
|
|
22,456
|
|
|
|
10,963
|
|
|
|
11,593
|
|
Profit for the period
|
|
|
|
|
|
|
1,186,437
|
|
|
|
1,001,260
|
|
|
|
715,036
|
|
|
|
427,679
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per shares (in full TL)
|
|
|
|
|
|
|
0.53
|
|
|
|
0.45
|
|
|
|
0.32
|
|
|
|
0.19
|
|
Basic earnings per share for profit from continuing operations attributable to the owners of Turkcell Iletisim Hizmetleri AS (in full TL)
|
|
|
|
|
|
|
0.53
|
|
|
|
0.44
|
|
|
|
0.32
|
|
|
|
0.19
|
|
Basic earnings/ (loss) per share for profit from discontinued operations attributable to the owners of Turkcell Iletisim Hizmetleri AS (in full TL)
|
|
|
|
|
|
|
-
|
|
|
|
0.003
|
|
|
|
-
|
|
|
|
(0.004
|
)
|
(*)
Profit attributable to non-controlling interests solely derives from continuing operations.
The accompanying notes on page 7 to 34 are an integral part of these condensed consolidated interim financial statements.
TURKCELL ILETISIM HIZMETLERI AS AND ITS SUBSIDIARIES
|
|
CONDENSED INTERIM CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
|
For the six months ended 30 June 2017
|
(Amounts expressed in thousands of Turkish Liras unless otherwise indicated except share amounts)
|
|
|
Six months ended
|
|
|
Three months ended
|
|
|
|
30 June 2017
|
|
|
30 June 2016
|
|
|
30 June 2017
|
|
|
30 June 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit for the period
|
|
|
1,186,437
|
|
|
|
1,001,260
|
|
|
|
715,036
|
|
|
|
427,679
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income / (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Items that will not be reclassified to profit or loss:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Remeasurements of employee termination benefits
|
|
|
-
|
|
|
|
(973
|
)
|
|
|
-
|
|
|
|
(86
|
)
|
Income tax relating to remeasurements of employee termination benefits
|
|
|
-
|
|
|
|
216
|
|
|
|
-
|
|
|
|
33
|
|
|
|
|
-
|
|
|
|
(757
|
)
|
|
|
-
|
|
|
|
(53
|
)
|
Items that will or may be reclassified
to profit or loss:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchange differences on translation of foreign operations
|
|
|
25,253
|
|
|
|
(20,335
|
)
|
|
|
(12,026
|
)
|
|
|
34,446
|
|
Exchange differences arising from discontinued operations
|
|
|
(3,457
|
)
|
|
|
8,244
|
|
|
|
(37,567
|
)
|
|
|
20,115
|
|
Income tax relating to these items
|
|
|
(40,546
|
)
|
|
|
(3,018
|
)
|
|
|
(5,321
|
)
|
|
|
(1,418
|
)
|
|
|
|
(18,750
|
)
|
|
|
(15,109
|
)
|
|
|
(54,914
|
)
|
|
|
53,143
|
|
Other comprehensive income / (loss) for the period,
net of tax
|
|
|
(18,750
|
)
|
|
|
(15,866
|
)
|
|
|
(54,914
|
)
|
|
|
53,090
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income / (loss) for the period
|
|
|
1,167,687
|
|
|
|
985,394
|
|
|
|
660,122
|
|
|
|
480,769
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income / (loss) attributable to:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Owners of Turkcell Iletisim Hizmetleri A.S
|
|
|
1,140,952
|
|
|
|
962,921
|
|
|
|
648,985
|
|
|
|
470,751
|
|
Non-controlling interest
|
|
|
26,735
|
|
|
|
22,473
|
|
|
|
11,137
|
|
|
|
10,018
|
|
|
|
|
1,167,687
|
|
|
|
985,394
|
|
|
|
660,122
|
|
|
|
480,769
|
|
Total comprehensive income / (loss) attributable to the owners of Turkcell Iletisim Hizmetleri AS arises from:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
|
1,149,227
|
|
|
|
954,599
|
|
|
|
682,014
|
|
|
|
466,893
|
|
Discontinued operations
|
|
|
(8,275
|
)
|
|
|
8,322
|
|
|
|
(33,029
|
)
|
|
|
3,858
|
|
|
|
|
1,140,952
|
|
|
|
962,921
|
|
|
|
648,985
|
|
|
|
470,751
|
|
The accompanying notes on page 7 to 34 are an integral part of these condensed consolidated interim financial statements.
TURKCELL ILETISIM HIZMETLERI AS
|
|
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY
|
For the six months ended 30 June 2017
|
(Amounts expressed in thousands of Turkish Liras unless otherwise stated. Currencies other than Turkish Liras are expressed in thousands unless otherwise stated.)
|
Attributable to equity holders of the Company
|
|
Share Capital
|
|
|
Treasury Shares
|
|
|
Additional Paid-in Capital
|
|
|
Share Premium
|
|
|
Legal Reserve (*)
|
|
|
Reserve for Non-Controlling Interest Put Option (*)
|
|
|
Remeasurements of Employee
Termination Benefits
|
|
|
Foreign Currency Translation Reserve (*)
|
|
|
Retained
Earnings
|
|
|
Total
|
|
|
Non-Controlling Interests
|
|
|
Total
Equity
|
|
Balance at 1 January 2016
|
|
|
2,200,000
|
|
|
|
-
|
|
|
|
35,026
|
|
|
|
269
|
|
|
|
1,211,352
|
|
|
|
(489,065
|
)
|
|
|
(14,320
|
)
|
|
|
138,824
|
|
|
|
11,272,731
|
|
|
|
14,354,817
|
|
|
|
64,085
|
|
|
|
14,418,902
|
|
Total comprehensive income/(loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit for the period
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
978,804
|
|
|
|
978,804
|
|
|
|
22,456
|
|
|
|
1,001,260
|
|
Other comprehensive income/(loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation differences
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
3,050
|
|
|
|
-
|
|
|
|
(18,176
|
)
|
|
|
-
|
|
|
|
(15,126
|
)
|
|
|
17
|
|
|
|
(15,109
|
)
|
Remeasurements of employee termination benefit
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(757
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(757
|
)
|
|
|
-
|
|
|
|
(757
|
)
|
Total other comprehensive income/(loss), net of income tax
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
3,050
|
|
|
|
(757
|
)
|
|
|
(18,176
|
)
|
|
|
-
|
|
|
|
(15,883
|
)
|
|
|
17
|
|
|
|
(15,866
|
)
|
Total comprehensive income/(loss)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
3,050
|
|
|
|
(757
|
)
|
|
|
(18,176
|
)
|
|
|
978,804
|
|
|
|
962,921
|
|
|
|
22,473
|
|
|
|
985,394
|
|
Transfer from legal reserves
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(17,919
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
17,919
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Dividends paid
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(35,683
|
)
|
|
|
(35,683
|
)
|
Change in fair value of non-controlling interest
|
|
|
-
|
|
|
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(9,000
|
)
|
|
|
(9,000
|
)
|
Change in reserve for non-controlling interest put option
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(9,807
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(9,807
|
)
|
|
|
-
|
|
|
|
(9,807
|
)
|
Balance at 30 June 2016
|
|
|
2,200,000
|
|
|
|
-
|
|
|
|
35,026
|
|
|
|
269
|
|
|
|
1,193,433
|
|
|
|
(495,822
|
)
|
|
|
(15,077
|
)
|
|
|
120,648
|
|
|
|
12,269,454
|
|
|
|
15,307,931
|
|
|
|
41,875
|
|
|
|
15,349,806
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at 1 January 2017
|
|
|
2,200,000
|
|
|
|
(65,607
|
)
|
|
|
35,026
|
|
|
|
269
|
|
|
|
1,195,204
|
|
|
|
(494,197
|
)
|
|
|
(41,786
|
)
|
|
|
401,889
|
|
|
|
12,780,967
|
|
|
|
16,011,765
|
|
|
|
56,632
|
|
|
|
16,068,397
|
|
Total comprehensive income/(loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit for the period
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,162,645
|
|
|
|
1,162,645
|
|
|
|
23,792
|
|
|
|
1,186,437
|
|
Other comprehensive income/(loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation differences
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,195
|
|
|
|
-
|
|
|
|
(23,888
|
)
|
|
|
-
|
|
|
|
(21,693
|
)
|
|
|
2,943
|
|
|
|
(18,750
|
)
|
Total other comprehensive income/(loss), net of income tax
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,195
|
|
|
|
-
|
|
|
|
(23,888
|
)
|
|
|
-
|
|
|
|
(21,693
|
)
|
|
|
2,943
|
|
|
|
(18,750
|
)
|
Total comprehensive income/(loss)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,195
|
|
|
|
-
|
|
|
|
(23,888
|
)
|
|
|
1,162,645
|
|
|
|
1,140,952
|
|
|
|
26,735
|
|
|
|
1,167,687
|
|
Transfer to legal reserves
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
355,277
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(355,277
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Dividends paid (Note 11)
|
|
|
-
|
|
|
|
9,294
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(3,000,000
|
)
|
|
|
(2,990,706
|
)
|
|
|
(44,228
|
)
|
|
|
(3,034,934
|
)
|
Balance at 30 June 2017
|
|
|
2,200,000
|
|
|
|
(56,313
|
)
|
|
|
35,026
|
|
|
|
269
|
|
|
|
1,550,481
|
|
|
|
(492,002
|
)
|
|
|
(41,786
|
)
|
|
|
378,001
|
|
|
|
10,588,335
|
|
|
|
14,162,011
|
|
|
|
39,139
|
|
|
|
14,201,150
|
|
(*) Included in Reserves in the condensed consolidated interim statement of financial position.
The accompanying notes on page 7 to 34 are an integral part of these condensed consolidated interim financial statements.
TURKCELL ILETISIM HIZMETLERI AS
|
|
|
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS
|
For the six months ended 30 June 2017
|
(Amounts expressed in thousands of Turkish Liras unless otherwise stated. Currencies other than Turkish Liras are expressed in thousands unless otherwise stated.)
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended
30 June
|
|
|
|
Note
|
|
|
2017
|
|
|
2016
|
|
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
|
Profit before income tax from
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
|
|
|
|
1,186,437
|
|
|
|
993,959
|
|
Discontinued operations
|
|
|
|
|
|
-
|
|
|
|
7,301
|
|
Profit before income tax including discontinued operations
|
|
|
|
|
|
1,186,437
|
|
|
|
1,001,260
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments for:
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and impairment of fixed assets and investment property
|
|
|
|
|
|
714,976
|
|
|
|
606,817
|
|
Amortization of intangible assets
|
|
|
9
|
|
|
|
530,417
|
|
|
|
415,081
|
|
Net finance (income) expense
|
|
|
|
|
|
|
65,688
|
|
|
|
(98,867
|
)
|
Fair value gains on derivative financial instruments
|
|
|
|
|
|
|
(119,604
|
)
|
|
|
(41,198
|
)
|
Income tax expense
|
|
|
|
|
|
|
341,157
|
|
|
|
205,685
|
|
(Gain) on sale of property, plant and equipment
|
|
|
|
|
|
|
(9,855
|
)
|
|
|
(8,224
|
)
|
Unrealized foreign exchange (loss)/ gain on operating assets
|
|
|
|
|
|
|
326,571
|
|
|
|
(3,094
|
)
|
Provisions
|
|
|
|
|
|
|
93,577
|
|
|
|
72,775
|
|
Share of profit of discontinued operations
|
|
|
|
|
|
|
-
|
|
|
|
(7,301
|
)
|
Deferred revenue
|
|
|
|
|
|
|
174,574
|
|
|
|
8,355
|
|
|
|
|
|
|
|
|
3,303,938
|
|
|
|
2,151,289
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in trade receivables
|
|
|
|
|
|
|
463,737
|
|
|
|
382,380
|
|
Change in due from related parties
|
|
|
|
|
|
|
2,083
|
|
|
|
5,083
|
|
Change in receivables from financial operations
|
|
|
|
|
|
|
(1,056,707
|
)
|
|
|
(1,002,983
|
)
|
Change in inventories
|
|
|
|
|
|
|
(10,827
|
)
|
|
|
(38,518
|
)
|
Change in other current assets
|
|
|
|
|
|
|
(646,640
|
)
|
|
|
(86,931
|
)
|
Change in other non-current assets
|
|
|
|
|
|
|
991
|
|
|
|
74,985
|
|
Change in due to related parties
|
|
|
|
|
|
|
1,936,201
|
|
|
|
(132
|
)
|
Change in trade and other payables
|
|
|
|
|
|
|
(3,478,867
|
)
|
|
|
(1,891,907
|
)
|
Change in other non-current liabilities
|
|
|
|
|
|
|
841
|
|
|
|
(88
|
)
|
Change in employee benefits
|
|
|
|
|
|
|
17,126
|
|
|
|
15,934
|
|
Change in other working capital
|
|
|
|
|
|
|
(65,687
|
)
|
|
|
(51,076
|
)
|
|
|
|
|
|
|
|
466,189
|
|
|
|
(441,964
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest paid
|
|
|
|
|
|
|
(351,876
|
)
|
|
|
(95,161
|
)
|
Income tax paid
|
|
|
|
|
|
|
(224,385
|
)
|
|
|
(18,905
|
)
|
Net cash (used in) operating activities
|
|
|
|
|
|
|
(110,072
|
)
|
|
|
(556,030
|
)
|
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition of property, plant and equipment
|
|
|
8
|
|
|
|
(910,510
|
)
|
|
|
(1,323,160
|
)
|
Acquisition of intangible assets
|
|
|
9
|
|
|
|
(433,735
|
)
|
|
|
(247,518
|
)
|
Proceeds from sale of property, plant and equipment and intangible assets
|
|
|
|
|
|
|
41,227
|
|
|
|
19,518
|
|
Proceeds from derivative financial instruments
|
|
|
|
|
|
|
-
|
|
|
|
1,144
|
|
Change in advance paid for property, plant and equipment advances
|
|
|
|
|
|
|
1,245
|
|
|
|
(652,893
|
)
|
Change in held to maturity investments
|
|
|
|
|
|
|
(4,723
|
)
|
|
|
-
|
|
Interest received
|
|
|
|
|
|
|
299,462
|
|
|
|
321,029
|
|
Net cash used in investing activities
|
|
|
|
|
|
|
(1,007,034
|
)
|
|
|
(1,881,880
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from issuance of loans and borrowings
|
|
|
|
|
|
|
9,666,015
|
|
|
|
3,502,645
|
|
Proceeds from issuance of bonds
|
|
|
|
|
|
|
179,272
|
|
|
|
-
|
|
Repayment of borrowings
|
|
|
|
|
|
|
(8,639,793
|
)
|
|
|
(356,312
|
)
|
Repayment of bonds
|
|
|
|
|
|
|
(237,865
|
)
|
|
|
-
|
|
Dividends paid to shareholders
|
|
|
|
|
|
|
(933,997
|
)
|
|
|
(35,683
|
)
|
Dividends paid to non-controlling interest
|
|
|
|
|
|
|
(44,228
|
)
|
|
|
-
|
|
Dividends received for treasury shares
|
|
|
|
|
|
|
3,098
|
|
|
|
-
|
|
Capital decrease in subsidiaries
|
|
|
|
|
|
|
-
|
|
|
|
(9,000
|
)
|
Decrease in cash collateral related to loans
|
|
|
|
|
|
|
-
|
|
|
|
240,775
|
|
Net cash generated by/ (used in) financing activities
|
|
|
|
|
|
|
(7,498
|
)
|
|
|
3,342,425
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase/ (decrease) in cash and cash equivalents
|
|
|
|
|
|
|
(1,124,604
|
)
|
|
|
904,515
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at 1 January
|
|
|
|
|
|
|
6,052,352
|
|
|
|
2,918,796
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effects of foreign exchange rate fluctuations on cash and cash equivalents
|
|
|
|
|
|
|
66,771
|
|
|
|
(53,895
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at 30 June
|
|
|
|
|
|
|
4,994,519
|
|
|
|
3,769,416
|
|
The accompanying notes on page 7 to 34 are an integral part of these condensed consolidated interim financial statements.
TURKCELL ILETISIM HIZMETLERI AS
|
|
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
|
As at and for the six months ended 30 June 2017
|
(Amounts expressed in thousands of Turkish Liras unless otherwise stated. Currencies other than Turkish Liras are
expressed in thousands unless otherwise stated.)
|
Notes to the condensed consolidated interim financial statements
|
Page
|
1. Reporting entity
|
7
|
2. Basis of preparation
|
8
|
3. Significant accounting policies
|
9
|
4. Segment information
|
12
|
5. Seasonality of operations
|
15
|
6. Finance income and costs
|
15
|
7. Income tax expense
|
15
|
8. Property, plant and equipment
|
16
|
9. Intangible assets
|
17
|
10. Asset held for sale and discontinued operation
|
18
|
11. Equity
|
18
|
12. Borrowings
|
19
|
13. Financial instruments
|
21
|
14. Guarantees and purchase obligations
|
26
|
15. Commitments and contingencies
|
27
|
16. Related parties
|
31
|
17. Subsidiaries
|
33
|
18. Subsequent events
|
34
|
TURKCELL ILETISIM HIZMETLERI AS
|
|
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
|
As at and for the six months ended 30 June 2017
|
(Amounts expressed in thousands of Turkish Liras unless otherwise stated. Currencies other than Turkish Liras are
expressed in thousands unless otherwise stated.)
|
Turkcell Iletisim Hizmetleri Anonim Sirketi (the “Company” or “Turkcell”) was incorporated in Turkey on 5 October 1993 and commenced its operations in 1994. The address of the Company’s registered office is Maltepe Aydinevler Mahallesi Inonu Caddesi No: 20, Kucukyali Ofispark / Istanbul.
The Company operates under a 25-year GSM license granted in and effective from April 1998, a 20-year 3G license granted in and effective from April 2009 and a 13-year 4.5G license granted in August 2015 and effective from April 2016. The Company’s shares are listed on
Borsa Istanbul A.Ş. (
“BIST”) and New York Stock Exchange (“NYSE”).
The condensed consolidated interim financial statements of the Company as at and for the six months ended 30 June 2017 comprise the Company and its subsidiaries (together referred to as the “Group”) and the Group’s interest in an associate.
These condensed consolidated interim financial statements were approved for issue on 27 July 2017.
The Company sold financial loans amounting to TLY 87,
589 to Aktif Yatırım Bankası A.Ş. Turkcell Varlık Finansmanı Fund (
“Fund”
) founded by Aktif Yatırım Bankası A.Ş. on 14 April 2017 in order to create funds for issuance of Asset Backed Securities (
“ABS”) which will be issued by the Fund in a structure where Turkcell Finansman will act as the source organization. The Company transferred its contractual rights to receive cash flows from the financial loans that have been sold to the Fund resulting in de-recognition of the related assets from its consolidated financial statements. Moreover, the Company did not consolidate the Fund since the activities of the Fund are not controlled by the Company and the Fund has been defined as a structured entity.
Within the scope of the Decree Law No. 683 announced on 23 January 2017, the Company has applied to pay Euro denominated 4.5G license obligation in Turkish Liras converted at the buying exchange rate announced by the Central Bank of the Republic of Turkey on 2 January 2017.
The last instalment of 4.5G license payable amounting to TL 1,534,702 was paid on 26 April 2017.
The Company and the Ministry of Transport, Maritime Affairs and Communications, Directorate General of Communications signed a contract to continue the contract to establish and operate mobile communication infrastructure and operation in uncovered areas, (Phase 1) until 31 December 2018 and to add mobile broadband services to the existing infrastructure providing GSM services under Universal Service Law and to operate the new and existing networks together.
Mobile broadband services will be added to the existing infrastructure established in accordance with Phase 1 in 1,799 rural locations. The new and the existing infrastructure will be operated together. As of 30 June 2017, the Company has recognized TL 86,604 revenue from its operations related to this contract.
During the period the Group transferred
its building located in Istanbul, Tepebası
from investment property to property, plant and equipment since the asset it is not held to earn rental income or for capital appreciation (Note 8).
TURKCELL ILETISIM HIZMETLERI AS
|
|
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
|
As at and for the six months ended 30 June 2017
|
(Amounts expressed in thousands of Turkish Liras unless otherwise stated. Currencies other than Turkish Liras are
expressed in thousands unless otherwise stated.)
|
1.
|
Reporting entity (continued)
|
As at 23 October 2015, the Company signed a loan agreement package with China Development Bank (“CDB”) for an amount up to EUR 500,000 with 2 years availability period to refinance the Group’s existing loans and for an amount up to EUR 750,000 with 3 years availability period to finance the Group’s procurements from China in relation to infrastructure investments. The total loan package has 10 years final maturity starting from availability period starting date with 3 years grace period and will be paid back in equal instalments. The annual interest rate of the loan is EURIBOR + 2.2%. As at 26 October 2015, the Company utilized EUR 500,000 under this agreement. As at 5 April 2017, the Company utilized an additional EUR 60,000, which will mature on 22 April 2026, under this agreement in relation to Turkcell Superonline infrastructure investments (Note 12).
The sale process of Turkcell Finansman’s 179-day debt securities with a nominal amount of TL 150,000, maturity date of 25 August 2017 and an annual simple interest of 11.8% to qualified investors within Turkey, without public placement was completed on 27 February 2017 (Note 12).
The 174-day debt securities of Turkcell Finansman A.S. with a nominal value of TL 250,000, that was issued to qualified investors without a public offering, was redeemed on 8 June 2017 (Note 12).
On 25 May 2017, the Company’s General Assembly has approved a dividend distribution for the years ended from 2010 to 2016 amounting to TL 3,000,000 (equivalent to $841,633 as at 25 May 2017, date of Ordinary General Assembly Meeting). This represents a gross cash dividend of full TL 1.3636364 (equivalent to full $0.3825604 as at 25 May 2017, date of Ordinary General Assembly Meeting) per share. The dividend will be paid in three instalments on 15 June, 15 September and 15 December 2017 to the shareholders. First instalment was paid during the six month period ended 30 June 2017 amounting to TL 933,997. The Company has paid TL 1,000,000 in total including withholding tax which have been paid in July 2017 (Note 11).
As at 30 June 2017, the Company sold their debt securities issued with a total nominal value of USD 10,000 comprising portion of the debt securities issued previously added to its portfolio, USD 18,000 within the scope of the Board of Director’s buy-back decision dated 27 July 2016 (Note 12).
On 6 July 2017, the Company acquired a land located in Istanbul Kartal for a consideration of TL 116,230, payment of which was made during the six month period ended 30 June 2017 and recognized in other non-current asset as advances given for fixed assets in condensed consolidated interim financial statements.
These condensed consolidated interim financial statements for the six months ended 30 June 2017 have been prepared in accordance with IAS 34 Interim Financial Reporting.
These condensed consolidated interim financial statements do not include all the notes of the type normally included in annual financial statements. Accordingly, these condensed consolidated interim financial statements are to be read in conjunction with the annual consolidated financial statements for the year ended 31 December 2016 and any public announcements made by the Company during the interim reporting period.
The accounting policies, presentation and methods of computation are consistent with those of the previous financial year and corresponding interim reporting period, except for the adoption of new accounting policies for transactions occurred during the six months ended 30 June 2017 as set out in Note 3.
TURKCELL ILETISIM HIZMETLERI AS
|
|
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
|
As at and for the six months ended 30 June 2017
|
(Amounts expressed in thousands of Turkish Liras unless otherwise stated. Currencies other than Turkish Liras are
expressed in thousands unless otherwise stated.)
|
3.
|
Significant accounting policies
|
When the Group sells goods or services as a principal, revenue and operating costs are recorded on a gross basis. When the Group sells goods or services as an agent, revenue and operating costs are recorded on a net basis, representing the net margin earned. Whether the Group is considered to be acting as principal or agent in the transaction depends on management’s analysis of both the legal form and substance of the agreement between the Group and its business partners; such judgements impact the amount of reported revenue and operating costs but do not impact reported assets, liabilities or cash flows. Since the Company acts as principal in relation to the agreement signed with the Ministry of Transport, Maritime Affairs and Communications, Directorate General of Communications (Note 1), revenue and operating costs are reported on a gross basis in these condensed consolidated interim financial statements.
New standards and interpretations
i)
|
Standards, amendments and interpretations effective as at 30 June 2017
|
|
-
|
Amendments to IAS 7, ‘Statement of cash flows’
on disclosure initiative, effective from annual periods beginning on or after 1 January 2017. These amendments introduce an additional disclosure that will enable users of financial statements to evaluate changes in liabilities arising from financing activities. The amendment is part of the IASB’s Disclosure Initiative, which continues to explore how financial statement disclosure can be improved.
|
|
-
|
Amendments IAS 12, ‘Income Taxes’
, effective from annual periods beginning on or after 1 January 2017. The amendments on the recognition of deferred tax assets for unrealised losses clarify how to account for deferred tax assets related to debt instruments measured at fair value.
|
ii)
|
Standards, amendments and interpretations effective after 30 June 2017
|
|
-
|
Amendments to IFRS 2, ‘Share based payments’
on clarifying how to account for certain types of share-based payment transactions, effective from annual periods beginning on or after 1 January 2018. This amendment clarifies the measurement basis for cash-settled, share-based payments and the accounting for modifications that change an award from cash-settled to equity-settled. It also introduces an exception to the principles in IFRS 2 that will require an award to be treated as if it was wholly equity-settled, where an employer is obliged to withhold an amount for the employee’s tax obligation associated with a share-based payment and pay that amount to the tax authority.
|
|
-
|
IFRS 9, ‘Financial instruments’
, effective from annual periods beginning on or after 1 January 2018. This standard replaces the guidance in IAS 39. It includes requirements on the classification and measurement of financial assets and liabilities; it also includes an expected credit losses model that replaces the current incurred loss impairment model.
|
|
-
|
IFRS 15, ‘Revenue from contracts with customers’
, effective from annual periods beginning on or after 1 January 2018. IFRS 15, ‘Revenue from contracts with customers’ is a converged standard from the IASB and FASB on revenue recognition. The standard will improve the financial reporting of revenue and improve comparability of the top line in financial statements globally.
|
TURKCELL ILETISIM HIZMETLERI AS
|
|
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
|
As at and for the six months ended 30 June 2017
|
(Amounts expressed in thousands of Turkish Liras unless otherwise stated. Currencies other than Turkish Liras are
expressed in thousands unless otherwise stated.)
|
3.
|
Significant accounting policies (continued)
|
New standards and interpretations (continued)
ii)
|
Standards, amendments and interpretations effective after 30 June 2017
|
|
-
|
Amendment to IFRS 15, ‘Revenue from contracts with customers’
, effective from annual periods beginning on or after 1 January 2018. These amendments comprise clarifications of the guidance on identifying performance obligations, accounting for licences of intellectual property and the principal versus agent assessment (gross versus net revenue presentation). New and amended illustrative examples have been added for each of those areas of guidance. The IASB has also included additional practical expedients related to transition to the new revenue standard.
|
The Company is continuing to analyze the effects of the IFRS 15 implementation on financial statements, accounting processes and internal controls but a reliable estimate of the quantitative effects will be possible once the project has been completed. The main effect on the Company’s consolidated financial statements from implementation of the standard will relate to identification of separate performance obligations, the determination of standalone selling prices and its relative allocation. These are not expected to change the total revenue recognized, but may change the timing of revenue recognition. The Company currently performs fair value allocation of the identified elements for bundled packages that combine multiple goods and services based on their respective fair values as well as capitalization and recognition of expenses for customer acquisition costs over the customer retention period; therefore no material impact is expected with respect to these areas as result of the adoption of the standard. The Company plans to adopt the modified retrospective approach so that contracts that are not completed by 1 January 2018 will be accounted for as if they have been recognized in accordance with IFRS 15 from the very beginning. The cumulative effect arising from the transaction will be recognized as an adjustment to the opening balance of Equity in the year of initial application. Prior period comperative financial statements will not be restated.
|
-
|
IFRS 16, ‘Leases’
, effective from annual periods beginning on or after 1 January 2019 with earlier application permitted if IFRS 15, ‘Revenue from Contracts with Customers’, is also applied. This standard replaces the current guidance in IAS 17 and is a far-reaching change in accounting by lessees in particular. Under IAS 17, lessees were required to make a distinction between a finance lease (on balance sheet) and an operating lease (off balance sheet). IFRS 16 now requires lessees to recognize a lease liability reflecting future lease payments and a ‘right-of-use asset’ for virtually all lease contracts. The IASB has included an optional exemption for certain short-term leases and leases of low-value assets; however, this exemption can only be applied by lessees. For lessors, the accounting stays almost the same. However, as the IASB has updated the guidance on the definition of a lease (as well as the guidance on the combination and separation of contracts), lessors will also be affected by the new standard. Under IFRS 16, a contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
|
Company expects that IFRS 16 will affect the recognition of operating lease contracts. Nevertheless, the Company has not yet fully determined the effects of the lease contracts on the financial statements in the consolidated financial statements. The Company is planning to implement IFRS 16 on 1 January 2019.
TURKCELL ILETISIM HIZMETLERI AS
|
|
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
|
As at and for the six months ended 30 June 2017
|
(Amounts expressed in thousands of Turkish Liras unless otherwise stated. Currencies other than Turkish Liras are
expressed in thousands unless otherwise stated.)
|
3.
|
Significant accounting policies (continued)
|
New standards and interpretations (continued)
ii)
|
Standards, amendments and interpretations effective after 30 June 2017
|
|
-
|
Amendment to IAS 40, Investment property’
relating to transfers of investment property, effective from annual periods beginning on or after 1 January 2018. These amendments clarify that to transfer to, or from, investment properties there must be a change in use. To conclude if a property has changed use there should be an assessment of whether the property meets the definition. This change must be supported by evidence.
|
|
-
|
Annual improvements 2014-2016;
|
|
·
|
IFRS 1,” First-time adoption of IFRS”
, regarding the deletion of short-term exemptions for first-time adopters regarding IFRS 7, IAS 19, and IFRS 10 effective 1 January 2018.
|
|
·
|
IAS 28,”Investments in associates and joint ventures”
regarding measuring an associate or joint venture at fair value effective 1 January 2018.
|
|
·
|
IFRS 12,”Disclosure of interests in other entities”
regarding clarification of the scope of the standard. These amendments should be applied retrospectively for annual periods beginning on or after 1 January 2017.
|
|
-
|
IFRIC 22, “Foreign currency transactions and advance consideration”
, effective from annual periods beginning on or after 1 January 2018. This IFRIC addresses foreign currency transactions or parts of transactions where there is consideration that is denominated or priced in a foreign currency. The interpretation provides guidance for when a single payment/receipt is made as well as for situations where multiple payments/receipts are made. The guidance aims to reduce diversity in practice.
|
TURKCELL ILETISIM HIZMETLERI AS
|
|
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
|
As at and for the six months ended 30 June 2017
|
(Amounts expressed in thousands of Turkish Liras unless otherwise stated. Currencies other than Turkish Liras are
expressed in thousands unless otherwise stated.)
|
The Group has two main reportable segments in accordance with its integrated communication and technology services strategy as Turkcell Turkey, and Turkcell International. Some of these strategic segments offer the same types of services, however they are managed separately because they operate in different geographical locations and are affected by different economic conditions.
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker function is carried out by the Board of Directors, however the Board of Directors may transfer the authorities, other than recognized by the law, to the Chief Executive Officer and other directors.
Turkcell Turkey reportable segment includes the operations of Turkcell, Turkcell Superonline Iletisim Hizmetleri A.S.(“Turkcell Superonline”), Turkcell Satis ve Dagitim Hizmetleri A.S. (“Turkcell Satis”), group call center operations of Global Bilgi Pazarlama Danisma ve Cagri Servisi Hizmetleri A.S. (“Turkcell Global Bilgi”), Turktell Bilisim Servisleri A.S. (“Turktell”), Turkcell Teknoloji Arastirma ve Gelistirme A.S. (“Turkcell Teknoloji”), Kule Hizmet ve Isletmecilik A.S. (“Global Tower”), Rehberlik Hizmetleri Servisi A.S. (“Rehberlik”), Turkcell Odeme Hizmetleri A.S. (“Turkcell Odeme”) and Turkcell Gayrimenkul Hizmetleri A.S. (“Turkcell Gayrimenkul”). Turkcell International reportable segment includes the operations of Kibris Mobile Telekomunikasyon Limited Sirketi (“Kibris Telekom”), East Asian Consortium B.V. (“Eastasia”), LLC lifecell (“lifecell”), Lifecell Ventures Coöperatief U.A (“Lifecell Ventures”), Beltel Telekomunikasyon Hizmetleri A.S. (“Beltel”), CJSC Belarusian Telecommunications Network (“Belarusian Telecom”), LLC UkrTower (“UkrTower”), LLC Global Bilgi (“Global LLC”), Turkcell Europe GmbH (“Turkcell Europe”), Lifetech LLC (“Lifetech”), Beltower LLC (“Beltower”) and Fintur Holdings B.V. (“Fintur”). The operations of these legal entities aggregated into one reportable segment as the nature of services are similar and most of them share similar economic characteristics. Other reportable segment mainly comprises the information and entertainment services in Turkey and Azerbaijan, non-group call center operations of Turkcell Global Bilgi, Turkcell Finansman AS (“TFS”) and
Turkcell Enerji Cozumleri ve Elektrik Satıs Ticaret A.S
(“Turkcell Enerji”).
Information regarding the operations of each reportable segment is included below. Adjusted EBITDA is used to measure performance as management believes that such information is the most relevant in evaluating the results of certain segments relative to other entities that operate within these industries. Adjusted EBITDA definition includes revenue, direct cost of revenues excluding depreciation and amortization, selling and marketing expenses and administrative expenses.
Adjusted EBITDA is not a financial measure defined by International Financial Reporting Standards as a measurement of financial performance and may not be comparable to other similarly-titled indicators used by other companies. Reconciliation of Adjusted EBITDA to consolidated profit for the period is provided in the accompanying notes.
TURKCELL ILETISIM HIZMETLERI AS
|
|
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
|
As at and for the six months ended 30 June 2017
|
(Amounts expressed in thousands of Turkish Liras unless otherwise stated. Currencies other than Turkish Liras are
expressed in thousands unless otherwise stated.)
|
4.
|
Segment Information (continued)
|
|
Six months ended 30 June
|
|
|
Turkcell Turkey
|
|
Turkcell International
|
|
Other
|
|
Intersegment Eliminations
|
|
Consolidated
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total segment revenue
|
|
|
7,365,586
|
|
|
|
5,935,720
|
|
|
|
505,852
|
|
|
|
400,658
|
|
|
|
529,552
|
|
|
|
262,896
|
|
|
|
(32,370
|
)
|
|
|
(15,802
|
)
|
|
|
8,368,620
|
|
|
|
6,583,472
|
|
Inter-segment revenue
|
|
|
(15,839
|
)
|
|
|
(7,813
|
)
|
|
|
(16,527
|
)
|
|
|
(7,883
|
)
|
|
|
(4
|
)
|
|
|
(106
|
)
|
|
|
32,370
|
|
|
|
15,802
|
|
|
|
-
|
|
|
|
-
|
|
Revenues from external customers
|
|
|
7,349,747
|
|
|
|
5,927,907
|
|
|
|
489,325
|
|
|
|
392,775
|
|
|
|
529,548
|
|
|
|
262,790
|
|
|
|
-
|
|
|
|
-
|
|
|
|
8,368,620
|
|
|
|
6,583,472
|
|
Adjusted EBITDA
|
|
|
2,567,094
|
|
|
|
1,839,233
|
|
|
|
126,338
|
|
|
|
106,580
|
|
|
|
165,145
|
|
|
|
84,449
|
|
|
|
(1,670
|
)
|
|
|
561
|
|
|
|
2,856,907
|
|
|
|
2,030,823
|
|
|
|
Three months ended 30 June
|
|
|
|
Turkcell Turkey
|
|
|
Turkcell International
|
|
|
Other
|
|
|
Intersegment Eliminations
|
|
|
Consolidated
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total segment revenue
|
|
|
3,802,892
|
|
|
|
3,008,205
|
|
|
|
257,805
|
|
|
|
203,761
|
|
|
|
273,249
|
|
|
|
155,811
|
|
|
|
(17,928
|
)
|
|
|
(9,687
|
)
|
|
|
4,316,018
|
|
|
|
3,358,090
|
|
Inter-segment revenue
|
|
|
(8,545
|
)
|
|
|
(4,766
|
)
|
|
|
(9,388
|
)
|
|
|
(4,819
|
)
|
|
|
5
|
|
|
|
(102
|
)
|
|
|
17,928
|
|
|
|
9,687
|
|
|
|
-
|
|
|
|
-
|
|
Revenues from external customers
|
|
|
3,794,347
|
|
|
|
3,003,439
|
|
|
|
248,417
|
|
|
|
198,942
|
|
|
|
273,254
|
|
|
|
155,709
|
|
|
|
-
|
|
|
|
-
|
|
|
|
4,316,018
|
|
|
|
3,358,090
|
|
Adjusted EBITDA
|
|
|
1,297,927
|
|
|
|
923,137
|
|
|
|
66,002
|
|
|
|
53,025
|
|
|
|
93,687
|
|
|
|
53,144
|
|
|
|
(587
|
)
|
|
|
10
|
|
|
|
1,457,029
|
|
|
|
1,029,316
|
|
TURKCELL ILETISIM HIZMETLERI AS
|
|
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
|
As at and for the six months ended 30 June 2017
|
(Amounts expressed in thousands of Turkish Liras unless otherwise stated. Currencies other than Turkish Liras are
expressed in thousands unless otherwise stated.)
|
4.
|
Segment Information (continued)
|
|
|
Six months ended
|
|
|
Three months ended
|
|
|
|
30 June 2017
|
|
|
30 June 2016
|
|
|
30 June 2017
|
|
|
30 June 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit for the period
|
|
|
1,186,437
|
|
|
|
1,001,260
|
|
|
|
715,036
|
|
|
|
427,679
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add(Less):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit/(loss) from discontinued operations
|
|
|
-
|
|
|
|
(7,301
|
)
|
|
|
-
|
|
|
|
7,879
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit from continuing operations
|
|
|
1,186,437
|
|
|
|
993,959
|
|
|
|
715,036
|
|
|
|
435,558
|
|
Income tax expense
|
|
|
341,157
|
|
|
|
205,685
|
|
|
|
183,943
|
|
|
|
62,251
|
|
Finance income
|
|
|
(443,419
|
)
|
|
|
(383,706
|
)
|
|
|
(241,925
|
)
|
|
|
(162,459
|
)
|
Finance costs
|
|
|
494,204
|
|
|
|
195,671
|
|
|
|
146,120
|
|
|
|
140,671
|
|
Other income
|
|
|
(32,091
|
)
|
|
|
(45,352
|
)
|
|
|
2,887
|
|
|
|
(39,347
|
)
|
Other expenses
|
|
|
65,226
|
|
|
|
42,668
|
|
|
|
33,936
|
|
|
|
25,559
|
|
Depreciation and amortization
|
|
|
1,245,393
|
|
|
|
1,021,898
|
|
|
|
617,032
|
|
|
|
567,083
|
|
Consolidated adjusted EBITDA
|
|
|
2,856,907
|
|
|
|
2,030,823
|
|
|
|
1,457,029
|
|
|
|
1,029,316
|
|
TURKCELL ILETISIM HIZMETLERI AS
|
|
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
|
As at and for the six months ended 30 June 2017
|
(Amounts expressed in thousands of Turkish Liras unless otherwise stated. Currencies other than Turkish Liras are
expressed in thousands unless otherwise stated.)
|
5.
|
Seasonality of operations
|
The Turkish mobile communications market is affected by seasonal peaks and troughs. Historically, the effects of seasonality on mobile communications usage had positively influenced the Company’s results in the second and third quarters of the fiscal year and negatively influenced the results in the first and fourth quarters of the fiscal year. Recently, however, due to changing market dynamics, such as the Information Technologies and Communications Authority
(
“ICTA”)’s intervention in tariffs and increasing competition in the Turkish telecommunications market, the effects of seasonality on the Company’s subscribers’ mobile communications usage has decreased. National and religious holidays in Turkey also affect the Company’s operational results.
6.
|
Finance income and costs
|
Net finance income/ (costs) amounts to TL (50,785), TL 188,035, TL 95,805 and TL 21,788 for the six and three months ended 30 June 2017 and 2016, respectively.
Finance income for the six months ended 30 June 2017 is mainly attributable to interest income from contracted handset sales
, changes in fair value of derivative financial instruments, interest income on bank deposits and discount interest income on dividends payable.
Finance costs for the six months ended 30 June 2017 is mainly attributable to financing costs of borrowings and derivative financial instruments.
Net foreign exchange losses mainly include foreign exchange losses on borrowings amounting to TL 281,660 and foreign exchange gains on bonds issued amounting to TL 3,145, respectively whereas the Company recognized foreign exchange gains amounting to TL 73,516 from its operations.
Income tax expense is recognized based on management’s estimate of the weighted average effective annual income tax rate expected for the full financial year. The estimated average annual tax rate used for the six months ended 30 June 2017 is 22%, compared to 17% for the six months ended 30 June 2016. The increase in effective tax rate is resulted from the differences between estimations in previous year’s and current period’s tax deductions and exemptions.
Effective tax rates for the three months ended 30 June 2017 and 2016 are 20% and 13% respectively.
TURKCELL ILETISIM HIZMETLERI AS
|
|
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
|
As at and for the six months ended 30 June 2017
|
(Amounts expressed in thousands of Turkish Liras unless otherwise stated. Currencies other than Turkish Liras are
expressed in thousands unless otherwise stated.)
|
8.
|
Property, plant and equipment
|
Cost
|
|
Balance as at 1
January
2017
|
|
|
Additions
|
|
|
Disposals
|
|
|
Transfers
|
|
|
Impairment expenses/ (reversals)
|
|
|
Effects of movements in exchange rates
|
|
|
Transfer from Investment Property
|
|
|
Balance as at
30
June 2017
|
|
Network infrastructure (All operational)
|
|
|
13,897,308
|
|
|
|
176,777
|
|
|
|
(211,541
|
)
|
|
|
624,338
|
|
|
|
-
|
|
|
|
65,223
|
|
|
|
-
|
|
|
|
14,552,105
|
|
Land and buildings
|
|
|
519,702
|
|
|
|
15,469
|
|
|
|
-
|
|
|
|
7,276
|
|
|
|
-
|
|
|
|
593
|
|
|
|
64,594
|
|
|
|
607,634
|
|
Equipment, fixtures and fittings
|
|
|
617,732
|
|
|
|
38,056
|
|
|
|
(7,496
|
)
|
|
|
1,120
|
|
|
|
-
|
|
|
|
900
|
|
|
|
-
|
|
|
|
650,312
|
|
Motor vehicles
|
|
|
34,136
|
|
|
|
2,307
|
|
|
|
(1,306
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
87
|
|
|
|
-
|
|
|
|
35,224
|
|
Leasehold improvements
|
|
|
311,761
|
|
|
|
1,785
|
|
|
|
(4,688
|
)
|
|
|
340
|
|
|
|
-
|
|
|
|
181
|
|
|
|
-
|
|
|
|
309,379
|
|
Construction in progress
|
|
|
566,523
|
|
|
|
694,165
|
|
|
|
-
|
|
|
|
(633,074
|
)
|
|
|
-
|
|
|
|
2,761
|
|
|
|
-
|
|
|
|
630,375
|
|
Total
|
|
|
15,947,162
|
|
|
|
928,559
|
|
|
|
(225,031
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
69,745
|
|
|
|
64,594
|
|
|
|
16,785,029
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated depreciation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Network infrastructure (All operational)
|
|
|
6,843,580
|
|
|
|
652,885
|
|
|
|
(184,464
|
)
|
|
|
-
|
|
|
|
9,736
|
|
|
|
47,649
|
|
|
|
-
|
|
|
|
7,369,386
|
|
Land and buildings
|
|
|
159,351
|
|
|
|
10,919
|
|
|
|
-
|
|
|
|
-
|
|
|
|
244
|
|
|
|
305
|
|
|
|
22,366
|
|
|
|
193,185
|
|
Equipment, fixtures and fittings
|
|
|
497,606
|
|
|
|
25,032
|
|
|
|
(4,145
|
)
|
|
|
-
|
|
|
|
22
|
|
|
|
715
|
|
|
|
-
|
|
|
|
519,230
|
|
Motor vehicles
|
|
|
30,252
|
|
|
|
1,011
|
|
|
|
(1,255
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
103
|
|
|
|
-
|
|
|
|
30,111
|
|
Leasehold improvements
|
|
|
220,668
|
|
|
|
13,806
|
|
|
|
(4,064
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
217
|
|
|
|
-
|
|
|
|
230,627
|
|
Total
|
|
|
7,751,457
|
|
|
|
703,653
|
|
|
|
(193,928
|
)
|
|
|
-
|
|
|
|
10,002
|
|
|
|
48,989
|
|
|
|
22,366
|
|
|
|
8,342,539
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total property, plant and equipment
|
|
|
8,195,705
|
|
|
|
224,906
|
|
|
|
(31,103
|
)
|
|
|
-
|
|
|
|
(10,002
|
)
|
|
|
20,756
|
|
|
|
42,228
|
|
|
|
8,442,490
|
|
Depreciation expenses for the six and three months ended 30 June 2017 were TL 713,655 and TL 349,014 respectively including impairment losses and recognized in direct cost of revenues.
The impaired network
infrastructure
mainly consists of damaged or technologically inadequate mobile and fixed line infrastructure investments.
Impairment losses on property, plant and equipment for the six and three months ended 30 June 2017 amounted to TL 10,002 and TL 3,743 respectively and are included in depreciation expense.
TURKCELL ILETISIM HIZMETLERI AS
|
|
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
|
As at and for the six months ended 30 June 2017
|
(Amounts expressed in thousands of Turkish Liras unless otherwise stated. Currencies other than Turkish Liras are
expressed in thousands unless otherwise stated.)
|
Cost
|
|
Balance at 1 January 2017
|
|
|
Additions
|
|
|
Disposals
|
|
|
Transfers
|
|
|
Impairment
|
|
|
Effects of movements in exchange rates
|
|
|
Balance at
30 June 2017
|
|
GSM and other telecommunication operating licenses
|
|
|
8,039,431
|
|
|
|
1,122
|
|
|
|
-
|
|
|
|
69,921
|
|
|
|
-
|
|
|
|
18,926
|
|
|
|
8,129,400
|
|
Computer software
|
|
|
6,076,405
|
|
|
|
168,519
|
|
|
|
(6,155
|
)
|
|
|
232,663
|
|
|
|
-
|
|
|
|
5,603
|
|
|
|
6,477,035
|
|
Transmission lines
|
|
|
71,602
|
|
|
|
85
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
71,687
|
|
Central betting system operating right
|
|
|
11,981
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
11,981
|
|
Indefeasible right of usage
|
|
|
46,017
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
46,017
|
|
Brand name
|
|
|
7,040
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
7,040
|
|
Customer base
|
|
|
15,512
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
15,512
|
|
Goodwill
|
|
|
32,834
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
32,834
|
|
Other
|
|
|
38,321
|
|
|
|
2,579
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
40,900
|
|
Construction in progress
|
|
|
142,875
|
|
|
|
261,430
|
|
|
|
-
|
|
|
|
(302,584
|
)
|
|
|
-
|
|
|
|
2,650
|
|
|
|
104,371
|
|
Total
|
|
|
14,482,018
|
|
|
|
433,735
|
|
|
|
(6,155
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
27,179
|
|
|
|
14,936,777
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated amortization
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GSM and other telecommunication operating licenses
|
|
|
1,878,895
|
|
|
|
268,358
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
10,728
|
|
|
|
2,157,981
|
|
Computer software
|
|
|
4,237,996
|
|
|
|
252,964
|
|
|
|
(5,886
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
3,780
|
|
|
|
4,488,854
|
|
Transmission lines
|
|
|
58,203
|
|
|
|
1,759
|
|
|
|
-
|
|
|
|
-
|
|
|
|
767
|
|
|
|
-
|
|
|
|
60,729
|
|
Central betting system operating right
|
|
|
10,588
|
|
|
|
457
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
11,045
|
|
Indefeasible right of usage
|
|
|
18,785
|
|
|
|
1,690
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
20,475
|
|
Brand name
|
|
|
5,808
|
|
|
|
352
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
6,160
|
|
Customer base
|
|
|
11,286
|
|
|
|
269
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
11,555
|
|
Other
|
|
|
24,468
|
|
|
|
3,801
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
28,269
|
|
Total
|
|
|
6,246,029
|
|
|
|
529,650
|
|
|
|
(5,886
|
)
|
|
|
-
|
|
|
|
767
|
|
|
|
14,508
|
|
|
|
6,785,068
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total intangible assets
|
|
|
8,235,989
|
|
|
|
(95,915
|
)
|
|
|
(269
|
)
|
|
|
-
|
|
|
|
(767
|
)
|
|
|
12,671
|
|
|
|
8,151,709
|
|
Amortization expense on intangible assets other than goodwill for the six and three months ended 30 June 2017 amounted to TL 530,417 and TL 267,357, respectively including impairment losses and are recognized in cost of revenues.
Impairment losses on intangible assets for the six and three months ended 30 June 2017 amounted to TL 767 and TL 171 respectively and recognized in amortization expense.
Computer software includes internally generated capitalized software development costs that meet the definition of an intangible asset. The amount of internally generated computer software is TL 66,306 and TL 33,955 respectively, for the six months and three months ended 30 June 2017.
Research expenditure related to internally generated software capitalized for the six and three months ended 30 June 2017 amounting to TL 16,330 and TL 8,509, respectively and are recognized in cost of revenue.
TURKCELL ILETISIM HIZMETLERI AS
|
|
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
|
As at and for the six months ended 30 June 2017
|
(Amounts expressed in thousands of Turkish Liras unless otherwise stated. Currencies other than Turkish Liras are
expressed in thousands unless otherwise stated.)
|
10.
|
Asset held for sale and discontinued operations
|
In 2016, the Group has committed to plan to exit from Fintur operations in relevant jurisdictions and initiated an active program to locate a buyer for its associate. In this regard, Fintur has been classified as held for sale and reported as discontinued operation starting from 1 October 2016.
Equity accounting for Fintur ceased starting from 1 October 2016, and in accordance with IFRS 5, Fintur has been measured at the lower of carrying amount and fair value less costs to sell. Comparative period in the condensed consolidated interim statement of profit or loss and other comprehensive income and the condensed consolidated interim statement of cash flows are restated to reflect the classification of Fintur as discontinued operation.
Dividends
Turkcell:
On 25 May 2017, the Company’s General Assembly has approved a dividend distribution for the years ended from 2010 to 2016 amounting to TL 3,000,000 (equivalent to $841,633 as at 25 May 2017, date of Ordinary General Assembly Meeting), This represents
a gross cash dividend of full TL 1.3636364 (equivalent to full $0.3825604
as at 25 May 2017, date of Ordinary General Assembly Meeting) per share. The dividend will be paid in three instalments on 15 June, 15 September and 15 December 2017 to the shareholders. First installment was paid
during the six month period ended 30 June 2017
amounting to TL 933,997.
The Company will pay TL 1,000,000 in total including withholding tax which have been paid in July 2017.
Azerinteltek:
According to resolution of the General Assembly Meeting of Azerinteltek held in 13 February 2017, Board of Directors decided to pay dividend amounting to AZN 3,778 (equivalent to TL 8,003 as at
30 June 2017) from the profit realized for the fourth quarter of 2016. Dividend payments were completed in 2017.
According to resolution of the General Assembly Meeting of Azerinteltek held in 27 April 2017, Board of Directors decided to pay advance dividend amounting to AZN 3,098 (equivalent to TL 6,489 as at 30 June 2017) from the profit realized for the first quarter of 2017. Dividend payments were completed in 2017.
Inteltek:
According to the resolution of the General Assembly Meeting of Inteltek held on 31 March 2017, General Assembly resolved to pay dividend amounting to TL 63,528 from the profit realized in 2016 (remaining amount after deducting advance dividends for the period of January-June 2016 amounting to TL 20,455) and dividend from legal reserves which exceeds legal limit mentioned under the Law amounting to TL 11,585 until 31 December 2017. Dividend payments were completed in 2017.
|
|
|
30 June
2017
|
|
31 December
2016
|
|
Non-current liabilities
|
|
|
|
|
|
|
Unsecured bank loans
|
|
5,491,941
|
|
5,300,756
|
|
|
Secured bank loans
|
|
2,915
|
|
3,580
|
|
|
Finance lease liabilities
|
|
42,750
|
|
41,539
|
|
|
Debt securities issued
|
|
1,617,948
|
|
1,589,227
|
|
|
|
|
7,155,554
|
|
6,935,102
|
|
Current liabilities
|
|
|
|
|
|
|
Unsecured bank loans
|
|
2,680,296
|
|
1,581,135
|
|
|
Current portion of long-term unsecured bank loans
|
|
1,107,561
|
|
922,867
|
|
|
Current portion of long-term secured bank loans
|
|
2,005
|
|
2,054
|
|
|
Current portion of long-term finance lease liabilities
|
|
8,498
|
|
6,575
|
|
|
Current portion of long-term debt securities issued
|
|
96,078
|
|
94,473
|
|
|
Debt securities issued
|
|
147,430
|
|
238,956
|
|
|
|
|
4,041,868
|
|
2,846,060
|
|
TURKCELL ILETISIM HIZMETLERI AS
|
|
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
|
As at and for the six months ended 30 June 2017
|
(Amounts expressed in thousands of Turkish Liras unless otherwise stated. Currencies other than Turkish Liras are
expressed in thousands unless otherwise stated.)
|
12.
|
Borrowings (continued)
|
Terms and conditions of outstanding loans are as follows:
|
|
|
|
|
30 June 2017
|
|
31 December 2016
|
|
Currency
|
|
Interest rate type
|
|
Nominal interest
rate
|
|
Payment Period
|
|
Carrying amount
|
|
Nominal interest
rate
|
|
Payment Period
|
|
Carrying amount
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unsecured bank loans
|
USD
|
|
Floating
|
|
Libor+1.3%-Libor+2.0%
|
|
2017-2020
|
|
1,929,235
|
|
Libor+2.0%-Libor+2.6%
|
|
2017-2020
|
|
1,984,533
|
Unsecured bank loans
|
EUR
|
|
Floating
|
|
Euribor+1.2%-Euribor+2.2%
|
|
2017-2026
|
|
4,553,366
|
|
Euribor+1.2%-Euribor+2.2%
|
|
2017-2025
|
|
3,593,110
|
Unsecured bank loans
|
TL
|
|
Fixed
|
|
10.4%-13.8%
|
|
2017-2019
|
|
2,264,269
|
|
10.4%-12.6%
|
|
2017-2018
|
|
1,819,944
|
Unsecured bank loans
|
UAH
|
|
Fixed
|
|
11.5%-14%
|
|
2017
|
|
532,928
|
|
13.5%-18.6%
|
|
2017
|
|
407,171
|
Secured bank loans (*)
|
BYN
|
|
Fixed
|
|
12-16%
|
|
2017-2020
|
|
4,920
|
|
12%-16%
|
|
2017-2020
|
|
5,634
|
Debt securities issued
|
USD
|
|
Fixed
|
|
5.8%
|
|
2017-2025
|
|
1,714,026
|
|
5.8%
|
|
2017-2025
|
|
1,683,700
|
Debt securities issued
|
TL
|
|
Fixed
|
|
11.8%
|
|
2017
|
|
147,430
|
|
10.7%
|
|
2017
|
|
238,956
|
Finance lease liabilities
|
EUR
|
|
Fixed
|
|
3.4%
|
|
2018-2024
|
|
45,322
|
|
3.4%
|
|
2017-2024
|
|
48,034
|
Finance lease liabilities
|
USD
|
|
Fixed
|
|
18%-28%
|
|
2017-2018
|
|
44
|
|
18%-28%
|
|
2017-2018
|
|
80
|
Finance lease liabilities
|
TL
|
|
Fixed
|
|
27.5%-27.7%
|
|
2017-2020
|
|
5,882
|
|
-
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
11,197,422
|
|
|
|
|
|
9,781,162
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(*)
|
Secured by the Government of the Republic of Belarus.
|
TURKCELL ILETISIM HIZMETLERI AS
|
|
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
|
As at and for the six months ended 30 June 2017
|
(Amounts expressed in thousands of Turkish Liras unless otherwise stated. Currencies other than Turkish Liras are
expressed in thousands unless otherwise stated.)
|
13.
|
Financial instruments
|
Impairment losses
Movement in the provision for impairment of trade receivables and due from related parties that are assessed for impairment collectively for the six months ended 30 June 2017 is as follows:
|
|
30 June
2017
|
|
Opening balance
|
|
|
964,311
|
|
Impairment loss recognized
|
|
|
197,077
|
|
Collections
|
|
|
(116,195
|
)
|
Effect of exchange differences
|
|
|
1,134
|
|
Amounts written-off
|
|
|
(3,354
|
)
|
Closing balance
|
|
|
1,042,973
|
|
The provision for impairment with respect to due from related parties is TL 150 as at
30 June 2017.
Movement in the provision for impairment of receivables from financial services that are assessed for impairment collectively for the six months ended 30 June 2017 is as follows:
|
|
30 June
2017
|
|
Opening balance
|
|
|
10,170
|
|
Impairment loss recognized
|
|
|
18,599
|
|
Collections
|
|
|
(5,905
|
)
|
Closing balance
|
|
|
22,864
|
|
TURKCELL ILETISIM HIZMETLERI AS
|
|
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
|
As at and for the six months ended 30 June 2017
|
(Amounts expressed in thousands of Turkish Liras unless otherwise stated. Currencies other than Turkish Liras are
expressed in thousands unless otherwise stated.)
|
13.
|
Financial instruments (continued)
|
Exposure to currency risk
The Group’s exposure to foreign currency risk based on notional amounts is as follows:
|
|
31 December 2016
|
|
|
|
USD
|
|
|
EUR
|
|
Foreign currency denominated assets
|
|
|
|
|
|
|
Other non-current assets
|
|
|
244
|
|
|
|
2,131
|
|
Due from related parties-current
|
|
|
1,210
|
|
|
|
388
|
|
Trade receivables and accrued income
|
|
|
14,178
|
|
|
|
61,841
|
|
Other current assets
|
|
|
19,929
|
|
|
|
7,144
|
|
Cash and cash equivalents
|
|
|
807,372
|
|
|
|
378,057
|
|
|
|
|
842,933
|
|
|
|
449,561
|
|
Foreign currency denominated liabilities
|
|
|
|
|
|
Loans and borrowings-non current
|
|
|
(483,910
|
)
|
|
|
(959,482
|
)
|
Debt securities issued-non- current
|
|
|
(451,588
|
)
|
|
|
-
|
|
Other non-current liabilities
|
|
|
(99,273
|
)
|
|
|
-
|
|
Loans and borrowings-current
|
|
|
(80,029
|
)
|
|
|
(21,985
|
)
|
Debt securities issued-current
|
|
|
(26,845
|
)
|
|
|
-
|
|
Trade and other payables-current
|
|
|
(175,083
|
)
|
|
|
(425,992
|
)
|
Due to related parties
|
|
|
(398
|
)
|
|
|
(334
|
)
|
|
|
|
(1,317,126
|
)
|
|
|
(1,407,793
|
)
|
Exposure related to derivative instruments
|
|
|
|
|
|
|
|
|
Participating cross currency swap contracts
|
|
|
250,000
|
|
|
|
500,000
|
|
Currency swap contracts
|
|
|
7,960
|
|
|
|
25,000
|
|
Currency forward contracts
|
|
|
(30,071
|
)
|
|
|
-
|
|
Net exposure
|
|
|
(246,304
|
)
|
|
|
(433,232
|
)
|
|
|
|
|
|
|
|
|
|
|
|
30 June 2017
|
|
|
|
USD
|
|
|
EUR
|
|
Foreign currency denominated assets
|
|
|
|
|
|
|
|
|
Other non-current assets
|
|
|
72
|
|
|
|
2,131
|
|
Due from related parties-current
|
|
|
584
|
|
|
|
195
|
|
Trade receivables and accrued income
|
|
|
25,043
|
|
|
|
58,259
|
|
Other current assets
|
|
|
50,715
|
|
|
|
12,462
|
|
Cash and cash equivalents
|
|
|
857,211
|
|
|
|
241,012
|
|
|
|
|
933,625
|
|
|
|
314,059
|
|
Foreign currency denominated liabilities
|
|
|
|
|
|
Loans and borrowings-non current
|
|
|
(452,234
|
)
|
|
|
(969,631
|
)
|
Debt securities issued-non- current
|
|
|
(461,335
|
)
|
|
|
-
|
|
Other non-current liabilities
|
|
|
(103,703
|
)
|
|
|
-
|
|
Loans and borrowings-current
|
|
|
(97,870
|
)
|
|
|
(179,179
|
)
|
Debt securities issued-current
|
|
|
(27,396
|
)
|
|
|
-
|
|
Trade and other payables-current
|
|
|
(130,477
|
)
|
|
|
(25,074
|
)
|
Due to related parties
|
|
|
(471
|
)
|
|
|
(185
|
)
|
|
|
|
(1,273,486
|
)
|
|
|
(1,174,069
|
)
|
|
|
|
|
|
|
|
|
|
Exposure related to derivative instruments
|
|
|
|
|
|
|
|
|
Participating cross currency swap contracts
|
|
|
293,000
|
|
|
|
545,000
|
|
Currency swap contracts
|
|
|
60,483
|
|
|
|
83,250
|
|
Net exposure
|
|
|
13,622
|
|
|
|
(231,760
|
)
|
TURKCELL ILETISIM HIZMETLERI AS
|
|
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
|
As at and for the six months ended 30 June 2017
|
(Amounts expressed in thousands of Turkish Liras unless otherwise stated. Currencies other than Turkish Liras are
expressed in thousands unless otherwise stated.)
|
13.
|
Financial instruments (continued)
|
Exposure to currency risk (continued)
The following significant exchange rates are applied during the period:
|
|
Average Rate
|
|
|
Closing Rate
|
|
|
|
30 June
|
|
|
30 June
|
|
|
30 June
|
|
|
31 December
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
USD/TL
|
|
|
3.6145
|
|
|
|
2.8969
|
|
|
|
3.5071
|
|
|
|
3.5192
|
|
EUR/TL
|
|
|
3.9180
|
|
|
|
3.2232
|
|
|
|
4.0030
|
|
|
|
3.7099
|
|
USD/BYN (*)
|
|
|
1.8948
|
|
|
|
20,125
|
|
|
|
1.9336
|
|
|
|
1.9585
|
|
USD/UAH
|
|
|
26.7830
|
|
|
|
25.5340
|
|
|
|
26.0990
|
|
|
|
27.1909
|
|
(*) The official currency of the Republic of Belarus has redenominated on 1 July 2016. As a result,
BYR 10,000 has become BYN 1 starting from 1 July 2016.
Sensitivity analysis
The basis for the sensitivity analysis to measure foreign exchange risk is an aggregate corporate-level currency exposure. The aggregate foreign exchange exposure is composed of all assets and liabilities denominated in foreign currencies. The analysis excludes net foreign currency investments.
10% strengthening of the TL, UAH, BYN against the following currencies as at 30 June 2017 and
31 December 2016 would have increased / (decreased) profit or loss before by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant.
|
|
Profit or loss
|
|
|
|
30 June
2017
|
|
|
31 December
2016
|
|
|
|
|
|
|
|
|
USD
|
|
|
(4,777
|
)
|
|
|
86,679
|
|
EUR
|
|
|
92,774
|
|
|
|
160,725
|
|
10% weakening of the TL, UAH, BYN against the following currencies as at 30 June 2017 and
31 December 2016 would have increased / (decreased) profit or loss before tax by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant.
|
|
Profit or loss
|
|
|
|
30 June
2017
|
|
|
31 December
2016
|
|
|
|
|
|
|
|
|
USD
|
|
|
4,777
|
|
|
|
(86,679
|
)
|
EUR
|
|
|
(92,774
|
)
|
|
|
(160,725
|
)
|
TURKCELL ILETISIM HIZMETLERI AS
|
|
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
|
As at and for the six months ended 30 June 2017
|
(Amounts expressed in thousands of Turkish Liras unless otherwise stated. Currencies other than Turkish Liras are
expressed in thousands unless otherwise stated.)
|
13.
|
Financial instruments (continued)
|
Fair values
To provide an indication about the reliability of the inputs used in determining fair value, the Group classifies its financial instruments into the three levels prescribed under the accounting standards. An explanation of each level is as follows:
• Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;
• Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and
• Level 3 inputs are unobservable inputs for the asset or liability.
The following table presents the Group’s financial assets and financial liabilities measured and recognised at fair value at 30 June 2017 and 31 December 2016 on a recurring basis:
|
Fair values
|
|
30 June
2017
|
|
31 December
2016
|
|
Fair Value hierarchy
|
|
Valuation Techniques
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Currency swap contracts
|
5,033
|
|
611
|
|
Level 2
|
|
Pricing models based on discounted cash flow analysis using the observable yield curve
|
Participating cross currency swap contracts (*)
|
495,950
|
|
382,054
|
|
Level 3
|
|
Pricing models based on discounted cash flow analysis using the unobservable yield curve
|
Currency forward contracts
|
-
|
|
(1,286)
|
|
Level 2
|
|
Pricing models based on period end foreign currency rates.
|
Consideration payable in relation to acquisition of Belarusian Telecom (**)
|
(310,336)
|
|
(295,062)
|
|
Level 3
|
|
Net present value
|
There were no transfers between levels during the period.
The Group did not measure any financial assets or financial liabilities at fair value on a non-recurring basis as at 30 June 2017.
TURKCELL ILETISIM HIZMETLERI AS
|
|
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
|
As at and for the six months ended 30 June 2017
|
(Amounts expressed in thousands of Turkish Liras unless otherwise stated. Currencies other than Turkish Liras are
expressed in thousands unless otherwise stated.)
|
13.
|
Financial instruments (continued)
|
Fair values (continued)
(*)
|
Participating cross currency swap contracts include EUR-TL interest and currency swap contracts, EUR put and call options, amounting to nominal value of EUR 500,000 and also USD-TL interest and currency swap contracts and put and call options amounting to nominal value of USD 250,000 in total. The EUR-TL participating cross currency swap contracts, which are EUR 100,000, EUR 150,000 and EUR 250,000, was combined into one contract as of 26 May 2017 and the maturity of the contracts was extended to 23 October 2025. Additionally, cross currency swap contracts include EUR-TL interest and participating cross currency swap contracts nominal value of EUR 45,000 and USD-TL interest and currency swap contracts amounting to nominal value of USD 43,000 in total. Regarding these contracts, TL 49,177 accrual of interest expense and TL 9,491 accrual of interest income has been reflected to condensed consolidated interim financial statements as at 30 June 2017 (31 December 2016: TL 40,367 and TL 8,220 respectively). Since bid-ask spread is unobservable input; in valuation of participating cross currency swap contracts, prices in bid- ask price range which were considered the most appropriate were used instead of mid prices. If mid prices were used in the valuation the fair value of participating cross currency swap contracts would have been TL 49,323 lower as at 30 June 2017 (31 December 2016: TL 23,291).
|
(**)
|
Discount rate of 4.5% was used for the present value calculation of the consideration payable in relation to acquisition of Belarusian Telecom as at 30 June 2017 (31 December 2016: 5.6%). Company management expects consideration to be paid with an amount of USD 100,000 during the first quarter of 2020 (31 December 2016: the first quarter of 2020).
|
The following table presents the changes in level 3 instruments for the six months ended 30 June 2017:
Participating cross currency swap contracts:
|
|
30 June
2017
|
|
Opening balance
|
|
|
382,054
|
|
Total gains or losses:
|
|
|
|
|
in profit or loss
|
|
|
113,896
|
|
Closing balance
|
|
|
495,950
|
|
Consideration payable in relation to acquisition of Belarusian Telecom:
|
|
30 June
2017
|
|
Opening balance
|
|
|
(295,062
|
)
|
Total gains or losses:
|
|
|
|
|
in profit or loss
|
|
|
(15,274
|
)
|
Closing balance
|
|
|
(310,336
|
)
|
TURKCELL ILETISIM HIZMETLERI AS
|
|
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
|
As at and for the six months ended 30 June 2017
|
(Amounts expressed in thousands of Turkish Liras unless otherwise stated. Currencies other than Turkish Liras are
expressed in thousands unless otherwise stated.)
|
13.
|
Financial instruments (continued)
|
Fair values (continued)
Valuation inputs and relationships to fair value
The following table summarizes the quantitative information about the significant unobservable inputs used in level 3 fair value measurement of contingent consideration.
|
|
Fair value at
|
|
|
|
Inputs
|
|
|
|
|
30
June 2017
|
|
31 December 2016
|
|
Unobservable
Inputs
|
|
30 June 2017
|
31 December 2016
|
|
Relationship of unobservable inputs to fair value
|
|
|
|
|
|
|
|
|
|
|
|
|
Contingent consideration
|
|
310,336
|
|
295,062
|
|
Risk-adjusted discount rate
|
|
4.5%
|
5.6%
|
|
A change in the discount rate by 100 bps would increase / decrease FV by
TL (8,029) and TL 8,323 respectively.
|
|
|
|
|
|
|
Expected settlement date
|
|
first quarter of 2020
|
first quarter of 2020
|
|
If expected settlement date changes by 1 year FV would increase / decrease by TL (13,483) and TL 14,135 respectively.
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying amounts of financial assets and financial liabilities measured at amortized cost are a reasonable approximation of their fair values.
14.
|
Guarantees and purchase obligations
|
As at 30 June 2017, outstanding purchase commitments with respect to the acquisition of property, plant and equipment, inventory and purchase of sponsorship, rent and advertisement services amounted to TL 694,567 (31 December 2016: TL 915,868). Realizations for these commitments are going to be made within 5 year period.
As at 30 June 2017, the Group is contingently liable in respect of bank letters of guarantee obtained from banks given to customs authorities, private companies and other public organizations, provided guarantees to private companies and financial guarantees to subsidiaries totaling to TL 3,054,685 as at 31 December 2016 (31 December 2016: TL 2,370,723).
As at 30 June 2017, the Company’s commitments regarding lifecell’s 3G license purchases amounted to UAH 218,325 (equivalent to TL 29,337 as at 30 June 2017).
TURKCELL ILETISIM HIZMETLERI AS
|
|
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
|
As at and for the six months ended 30 June 2017
|
(Amounts expressed in thousands of Turkish Liras unless otherwise stated. Currencies other than Turkish Liras are
expressed in thousands unless otherwise stated.)
|
15.
|
Commitments and Contingencies
|
15.1
|
Dispute on Treasury Share Amounts
|
According to the 2G and 3G Concession Agreements, The Company is obliged to pay each month 15% of its monthly gross sales; with the exception of the interest for late payment of the amounts charged to its subscribers and of the indirect taxes, fiscal obligations such as fees and duties and the invoiced amounts recorded in the accounts to the Treasury as treasury share. The Company is obliged to pay 90% of this share to Treasury and 10% of the remaining as the universal services share to the Ministry of Transport, Maritime Affairs and Communications. The Company is also obliged to pay once a year 0.35% of its gross sale as the Authority contribution share.
The Undersecretariat of Treasury alleged that Company made deficient treasury payments in the past and sent requests for payment and BTK requested penalty fee over the alleged underpaid treasury share amounts. The Company objected to these claims and initiated legal processes which are still pending. The maximum loss of the Company, excluding the interest for late payment arising from these disputes, for 2G Concession Agreement and 3G Concession Agreement could be TL 425,893 and TL 49,634, respectively.
Based on the management opinion, an outflow of resources embodying economic benefits to settle the obligation is deemed to be less than probable, thus, no provision is recognized in the condensed consolidated interim financial statements as at and for the period ended 30 June 2017 (31 December 2016: None).
15.2
|
Dispute on Special Communication Tax
|
Large Tax Payers Office levied Special Communication Tax (SCT) and tax penalty on the Company amounting to TL 527,639 in total, of which SCT amounting to TL 211,056 and penalty amounting to TL 316,583 based on the claim stated on Tax Investigation Reports prepared for the years 2008-2012, that the Company should pay Special Communication Tax over the prepaid card sales made by the distributors. The Company filed 60 lawsuits in the Tax Courts for the cancellation of each tax and tax penalty claim. In some of the cases, The Court decided in favour of The Company, in some of the cases, The Court decided partially in favour of the Company, in some of the cases, The Court decided in favour of the Tax Office. The parties appealed the decisions regarding the parts against them.
The Large Tax Payers Office has collected TL 80,355 (TL 77,480 and TL 2,875 overdue interest) calculated for the parts against the Company for the assessment of the SCT for the year 2011 by offsetting the receivables of the Company from Public Administrations. No provision for the aforementioned amount is recognized in the condensed consolidated interim financial statements so that it was shown in other receivables.
TURKCELL ILETISIM HIZMETLERI AS
|
|
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
|
As at and for the six months ended 30 June 2017
|
(Amounts expressed in thousands of Turkish Liras unless otherwise stated. Currencies other than Turkish Liras are
expressed in thousands unless otherwise stated.)
|
15.
|
Commitments and Contingencies (continued)
|
15.2
|
Dispute on Special Communication Tax (continued)
|
As per the Law no. 6736, the Company filed applications for the restructuring of penalties and interest on the SCT regarding the dispute on the tax amount for the years 2008, 2009, 2010, 2011 and 2012. Tax Office rejected the application for the year 2011; accepted the other restructuring applications for the years 2008, 2009, 2010, 2012 and the Company paid the restructuring amount of TL 117,058. Within this scope the Company submitted the waiver petition to the Tax Office for the cases related with the restructuring SCT amount. The Council of State decided that there is no need to grant a decision regarding the appeal process by the reason of waiver. On the other hand, Tax Office rejected the application for the restructuring of the SCT regarding the dispute on the tax amount for the year 2011. The Company filed a case for the stay of execution and cancellation of aforementioned rejection act of Tax Office for the year 2011. The Court rejected the Company’s stay of execution request. The Company objected to the decision. The case is pending.
On the other hand, the appeal process is pending in the cases filed for the cancellation of the fined tax assessment prepared for the year 2011.
Limited tax investigation has been performed for the year 2013, regarding the aforementioned case and no notification has been received regarding the result of the investigation by the Company.
Based on the probable payment including interest in case of restructuring the SCT for the year 2013 as per the Law no. 6736, the Company accrued provisions in the condensed consolidated interim financial statements as at and for the period ended 30 June 2017 amounting to TL 14,866 (31 December 2016: TL 14,866).
15.3
|
Investigation initiated by ICTA on subscription numbers and radio utilization and usage fees
|
ICTA commenced in-depth investigations, against the GSM operators, on the accuracy of the subscriber numbers report for the terms, 2004-2009, 2010-2011, 2012, 2013 and 2014 which are the key input for the calculation and payment of radio utilization and usage fees. As a result of the investigations, ICTA imposed 4 separate administrative fines to the Company amounting TL 11.240 in total and decided to warn the Company. The administrative fines were paid within 1 month following the notification of the decision of ICTA, with 25% discount. The Company filed lawsuits for the cancellation of aforementioned administrative fines and ICTA’s administrative acts implied on the Company for the collection of the radio utilization and a usage fee which was claimed to have been paid deficiently. The cases are pending.
TURKCELL ILETISIM HIZMETLERI AS
|
|
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
|
As at and for the six months ended 30 June 2017
|
(Amounts expressed in thousands of Turkish Liras unless otherwise stated. Currencies other than Turkish Liras are
expressed in thousands unless otherwise stated.)
|
15.
|
Commitments and Contingencies (continued)
|
15.3
|
Investigation initiated by ICTA on subscription numbers and radio utilization and usage fees (continued)
|
ICTA filed 4 lawsuits on 13 October 2014, 23 December 2014, 3 March 2015 and 11 April 2016 for the collection of the total amount of TL 113,353. The amount which was alleged that the Company paid deficiently by the ICTA decision took upon the investigation for the periods 2004 – 2009, 2010 – 2011, and 2012 on the radio utilization and usage fees, with its accrued interest, which will be calculated. The Courts decided to take expert report for the cases dated 13 October 2014, 23 December 2014 and 3 March 2015. The Courts decided to consolidate the lawsuits filed by ICTA on 13 October 2014 and 23 December 2014. The expert report has been notified to the Company, for the case dated 13 October 2014 and the consolidated case dated 23 December 2014. The expert committee has requested additional information and documents from the parties with this report. The Company submitted its objections and declarations against the expert report and the Court decided to take an additional expert report. The expert committee submitted their additional report to the Court. The additional expert report is in favor of the Company. For the case dated 3 March 2015, the expert report has been notified to the Company. The expert committee has requested additional information and documents from the parties with this report. The Parties submitted their objections and declarations against the expert report and the Court decided to take an additional expert report. The cases are pending.
Based on the management opinion, an outflow of resources embodying economic benefits is deemed to be less than probable, thus, no provision is recognized in the condensed consolidated interim financial statements as at and for the period ended 30 June 2017 (31 December 2016: None).
15.4
|
Disputes regarding the Law on the Protection of Competition
|
With the decision dated 6 June 2011 and numbered 230 established on the grounds of the investigation initiated by the Competition Board on the grounds that the Company violated the competitive environment through abusing its dominant position in the Turkish mobile market and infringements of Article 4 and 6 of the Law No. 4054, it was decided to apply administrative fine amounting to TL 91,942 on the Company. A lawsuit was filed in the Council of State for the stay of execution and the cancellation of the execution of Article 4 and 6 by the Company. The case is still pending.
On 8 March 2012, payment order has been sent to the Company by the Tax Office. The Company filed a lawsuit for the stay of execution and cancellation of the payment order on 13 March 2012. The Court accepted the lawsuit and cancelled the payment order. Tax Office appealed the decision. The Company replied the appeal request. Appeal process is still pending.
Dogan Dagitim Satis Pazarlama Odeme Aracilik ve Tahsilat Sistemleri A.S. filed a lawsuit against the Company on 5 June 2012 claiming TL 110,484 together with up to 3 times of the loss amount to be determined by the court for its material damages by reserving its rights for surpluses allegedly on the ground that the Company caused that damage by its applications to its sub-distributors which constituted a violation of the law no. 4054 and that violation was proved by the Competition Board decision in which the Board imposed TL 91,942 administrative fine to the Company. The case is still pending.
TURKCELL ILETISIM HIZMETLERI AS
|
|
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
|
As at and for the six months ended 30 June 2017
|
(Amounts expressed in thousands of Turkish Liras unless otherwise stated. Currencies other than Turkish Liras are
expressed in thousands unless otherwise stated.)
|
15.
|
Commitments and Contingencies (continued)
|
15.4
|
Disputes regarding the Law on the Protection of Competition (continued)
|
Mobiltel İletisim Hizmetleri Sanayi ve Ticaret A.S. filed a lawsuit against the Company on 17 August 2012 claiming TL 500 together with up to 3 times of the loss amount to be determined by the
court for its material damages by reserving its rights for surpluses allegedly on the ground that the Company gives exclusive competence to its sub-dealers and that violation was proved by the Competition Board decision in which the Board imposed TL 91,942 administrative fine to the Company and that Mobiltel was not able to sale any product to the sub-dealers which were given exclusive competence by the Company. The Court decided to take expert report in the case. The lawsuit is pending.
Pamuk Elektronik whose dealership agreement was terminated initiated a lawsuit with a claim of a compensation three times of its alleged damages due to the Company’s actions falling within the scope of the Competition Board’s administrative monetary fine in the amount of TL 91,942 and also with a compensation claim in the amount of TL 2,100 due to the alleged unjust termination of the agreement. The Court decided to reject the lawsuit with the reason that the dispute must be solved with arbitration procedure because of the term in the agreement. The decision was finalized by satisfying the appeal process and correction of the decision process. Subsequently, Pamuk Elektronik initiated an arbitration case against the Company with a compensation claim in the amount of TL 1.100. The case is pending.
Based on the management opinion, an outflow of resources embodying economic benefits is deemed to be less than probable, thus, no provision is recognized in the condensed consolidated interim financial statements as at and for the period ended 30 June 2017 (31 December 2016: None).
15.5
|
Other ongoing lawsuits
|
Within condensed consolidated interim financial statements prepared as of 30 June 2017, obligations which are related to following ongoing disputes have been evaluated.
Based on the management opinion, an outflow of resources embodying economic benefits is deemed to be less than probable, thus, no provision is recognized in the condensed consolidated interim financial statements as at and for the period ended 30 June 2017 (31 December 2016: None).
Subject
|
Anticipated maximum risk
(excluding accrued interest)
|
Provision
|
Disputes related with ICTA
|
22,544
|
-
|
TURKCELL ILETISIM HIZMETLERI AS
|
|
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
|
As at and for the six months ended 30 June 2017
|
(Amounts expressed in thousands of Turkish Liras unless otherwise stated. Currencies other than Turkish Liras are
expressed in thousands unless otherwise stated.)
|
Transactions with key management personnel:
Key management personnel comprise the Group’s key management executive officers and members of board of directors.
As at 30 June 2017 and 2016, none of the Group’s executive officers has outstanding loans due to the Group.
In addition to their salaries, the Group also provides non-cash benefits to executive officers and contributes to a post-employment defined plan on their behalf. The Group is required to contribute a specified percentage of payroll costs to the retirement benefit scheme to fund the benefits.
Total compensation provided to key management personnel for the six and three months ended 30 June 2017 and 2016 are TL 26,481, TL 27,999, TL 13,657 and TL 16,093 respectively
a
s listed below;
|
|
Six months ended
|
|
|
Three months ended
|
|
|
|
30 June 2017
|
|
|
30 June 2016
|
|
|
30 June 2017
|
|
|
30 June 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term benefits
|
|
|
25,120
|
|
|
|
23,813
|
|
|
|
12,934
|
|
|
|
12,929
|
|
Termination benefits
|
|
|
1,129
|
|
|
|
4,020
|
|
|
|
592
|
|
|
|
3,077
|
|
Long-term benefits
|
|
|
232
|
|
|
|
166
|
|
|
|
131
|
|
|
|
87
|
|
|
|
|
26,481
|
|
|
|
27,999
|
|
|
|
13,657
|
|
|
|
16,093
|
|
Transactions with related parties
|
|
|
|
Six months ended
|
|
|
Three months ended
|
|
Revenues from related parties
|
|
30 June 2017
|
|
|
30 June 2016
|
|
|
30 June 2017
|
|
|
30 June 2016
|
|
Sales to
Kyivstar GSM JSC (“Kyivstar”)
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecommunications services
|
|
|
11,541
|
|
|
|
13,244
|
|
|
|
6,285
|
|
|
|
6,821
|
|
Sales to Teliasonera International Carrier AB (“Telia”)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecommunications services
|
|
|
4,329
|
|
|
|
5,188
|
|
|
|
1,979
|
|
|
|
3,076
|
|
Sales to VimpelCom (BVI) Ltd. (“Vimpelcom”)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecommunications services
|
|
|
3,650
|
|
|
|
13,691
|
|
|
|
2,164
|
|
|
|
6,220
|
|
Sales to PJSC MegaFon (“Megafon”)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecommunications services
|
|
|
2,199
|
|
|
|
6,273
|
|
|
|
1,225
|
|
|
|
1,595
|
|
Sales to Azercell Telekom MMC (“Azercell”)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecommunications services
|
|
|
562
|
|
|
|
1,193
|
|
|
|
286
|
|
|
|
604
|
|
Sales to Krea Icerik Hizmetleri ve Produksiyon AS (“Krea”) (*)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Call center, fixed line services, rent and interest charges
|
|
|
-
|
|
|
|
2,217
|
|
|
|
-
|
|
|
|
1,096
|
|
Sales to Millenicom Telekomunikasyon AS (“Millenicom”) (**)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecommunications services
|
|
|
-
|
|
|
|
997
|
|
|
|
-
|
|
|
|
-
|
|
Sales to other related parties
|
|
|
2,390
|
|
|
|
5,133
|
|
|
|
1,420
|
|
|
|
3,840
|
|
|
|
|
24,671
|
|
|
|
47,936
|
|
|
|
13,359
|
|
|
|
23,252
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TURKCELL ILETISIM HIZMETLERI AS
|
|
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
|
As at and for the six months ended 30 June 2017
|
(Amounts expressed in thousands of Turkish Liras unless otherwise stated. Currencies other than Turkish Liras are
expressed in thousands unless otherwise stated.)
|
16.
|
Related parties (continued)
|
Transactions with related parties (continued)
|
|
Six months ended
|
|
|
Three months ended
|
|
Related party expenses
|
|
30 June 2017
|
|
|
30 June 2016
|
|
|
30 June 2017
|
|
|
30 June 2016
|
|
Charges from Kyivstar
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecommunications services
|
|
|
18,017
|
|
|
|
20,278
|
|
|
|
9,671
|
|
|
|
10,488
|
|
Charges from Hobim Bilgi Islem Hizmetleri AS (“Hobim”)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Invoicing and archiving services
|
|
|
16,993
|
|
|
|
15,133
|
|
|
|
8,868
|
|
|
|
8,586
|
|
Charges from Vimpelcom
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecommunications services
|
|
|
3,222
|
|
|
|
1,102
|
|
|
|
2,129
|
|
|
|
562
|
|
Charges from Telia
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecommunications services
|
|
|
2,654
|
|
|
|
742
|
|
|
|
2,336
|
|
|
|
(139
|
)
|
Charges from Megafon
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecommunications services
|
|
|
2,044
|
|
|
|
1,131
|
|
|
|
1,364
|
|
|
|
508
|
|
Charges from Azercell
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecommunications services
|
|
|
341
|
|
|
|
258
|
|
|
|
183
|
|
|
|
246
|
|
Charges from Krea (*)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Digital television broadcasting services
|
|
|
-
|
|
|
|
5,975
|
|
|
|
-
|
|
|
|
2,987
|
|
Charges from Millenicom (**)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecommunications services
|
|
|
-
|
|
|
|
180
|
|
|
|
-
|
|
|
|
-
|
|
Charges from other related parties
|
|
|
4,504
|
|
|
|
4,645
|
|
|
|
2,341
|
|
|
|
2,599
|
|
|
|
|
47,775
|
|
|
|
49,444
|
|
|
|
26,892
|
|
|
|
25,837
|
|
(*)
Revenues and expenses from Krea include transactions until 26 August 2016.
(**)
Revenues and expenses from Millenicom include transactions until 21 January 2016.
TURKCELL ILETISIM HIZMETLERI AS
|
|
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
|
As at and for the six months ended 30 June 2017
|
(Amounts expressed in thousands of Turkish Liras unless otherwise stated. Currencies other than Turkish Liras are
expressed in thousands unless otherwise stated.)
|
Subsidiaries of the Company as at 30 June 2017 and 31 December 2016 are as follows:
|
|
|
Effective Ownership Interest
|
|
|
|
|
|
Subsidiaries
|
Country of
|
|
30 June
|
31 December
|
Name
|
Incorporation
|
Business
|
2017 (%)
|
2016 (%)
|
Kibris Telekom
|
Turkish Republic of Northern Cyprus
|
Telecommunications
|
100
|
100
|
Turkcell Global Bilgi
|
Turkey
|
Customer relations management
|
100
|
100
|
Turktell
|
Turkey
|
Information technology, value
added GSM services investments
|
100
|
100
|
Turkcell Superonline
|
Turkey
|
Telecommunications and content services
|
100
|
100
|
Turkcell Satis
|
Turkey
|
Sales and delivery
|
100
|
100
|
Eastasia
|
Netherlands
|
Telecommunications investments
|
100
|
100
|
Turkcell Teknoloji
|
Turkey
|
Research and development
|
100
|
100
|
Global Tower
|
Turkey
|
Telecommunications infrastructure
business
|
100
|
100
|
Financell
|
Netherlands
|
Financing business
|
100
|
100
|
Rehberlik
|
Turkey
|
Directory Assistance
|
100
|
100
|
Lifecell Ventures
|
Netherlands
|
Telecommunications investments
|
100
|
100
|
Beltel
|
Turkey
|
Telecommunications investments
|
100
|
100
|
Turkcell Gayrimenkul
|
Turkey
|
Property investments
|
100
|
100
|
Global LLC
|
Ukraine
|
Customer relations management
|
100
|
100
|
UkrTower
|
Ukraine
|
Telecommunications infrastructure
business
|
100
|
100
|
Turkcell Europe
|
Germany
|
Telecommunications
|
100
|
100
|
Turkcell Odeme
|
Turkey
|
Payment services
|
100
|
100
|
Lifecell
|
Ukraine
|
Telecommunications
|
100
|
100
|
TFS
|
Turkey
|
Consumer financing services
|
100
|
100
|
Beltower
|
Republic of Belarus
|
Telecommunications Infrastructure business
|
100
|
100
|
Belarusian Telecom
|
Republic of Belarus
|
Telecommunications
|
80
|
80
|
Lifetech
|
Republic of Belarus
|
Research and development
|
78
|
78
|
Inteltek
|
Turkey
|
Information and Entertainment Services
|
55
|
55
|
Azerinteltek
|
Azerbaijan
|
Information and Entertainment Services
|
28
|
28
|
Turkcell Enerji
(1)
|
Turkey
|
Electricity energy trade and wholesale and retail electricity sales
|
100
|
-
|
(1)
|
Turkcell Enerji, that will be engaged in electricity energy trade, wholesale sales and retail sales was incorporated on 20 February 2017. The Company is a wholly owned subsidiary of Turktell and has obtained its electricity supply license upon approval from Energy Market Regulatory Authority (“EMRA”) as at 11 May 2017.
|
TURKCELL ILETISIM HIZMETLERI AS
|
|
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
|
As at and for the six months ended 30 June 2017
|
(Amounts expressed in thousands of Turkish Liras unless otherwise stated. Currencies other than Turkish Liras are
expressed in thousands unless otherwise stated.)
|
Turkcell Odeme operating under “Paycell” brand has been authorized by the Banking Regulation and Supervision Agency (“BRSA”) to operate as an “electronic money institution” and to provide intermediation service for invoice payments. The decision was published in the Official Gazette on
22 July 2017.
As at 24 July 2017, the Company sold their debt securities issued with a total nominal value of
USD 3,000, comprising portion of the debt securities issued previously added to its portfolio,
USD 18,000 within the scope of the Board of Director’s buy-back decision dated 27 July 2016.