KARSAN OTOMOTİV SANAYİİ VE TİCARET A. Ş. AND ITSSUBSIDIARIESCONDENSED CONSOLIDATED INTERIM FINANCIAL
STATEMENTS OF 1 JANUARY - 30 SEPTEMBER 2023

TABLE OF CONTENTSCONSOLIDATED FINANCIAL STATEMENTS

PAGE
1-2

CONSOLIDATED PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME STATEMENT

3

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

4CONSOLIDATED STATEMENT OF CASH FLOWS

5

FOOTNOTES ON CONSOLIDATED FINANCIAL STATEMENTS

6-39

FOOTNOTE 1
FOOTNOTE 2
FOOTNOTE 3

ORGANIZATION AND OPERATIONS OF THE GROUPBASIS OF PRESENTATION OF THE FINANCIAL STATEMENTS
NEW AND REVISED ACCOUNTING STANDARDS IN TURKEY

6-7
7-8
9

FOOTNOTE 4FOOTNOTE 5FOOTNOTE 6FOOTNOTE 7
FOOTNOTE 8FOOTNOTE 9
FOOTNOTE 10
FOOTNOTE 11
FOOTNOTE 12
FOOTNOTE 13
FOOTNOTE 14
FOOTNOTE 15
FOOTNOTE 16
FOOTNOTE 17
FOOTNOTE 18
FOOTNOTE 19
FOOTNOTE 20
FOOTNOTE 21
FOOTNOTE 22

SIGNIFICANT ACCOUNTING ASSESSMENT, ESTIMATION AND ASSUMPTIONSSEGMENT REPORTING
RELATED PARTY DISCLOSURESTRADE RECEIVABLES AND PAYABLESINVENTORIESPROPERTY, PLANT AND EQUIPMENTINTANGIBLE ASSESTSPREPAID EXPENSES AND DEFERRED INCOME
BORROWINGSPROVISIONS, CONTINGENT ASSETS AND LIABILITIESCOMMITMENTSATHER ASSETS AND LIABILITIESREVENUE AND COST OF SALESOTHER INCOME AND EXPENSES FROM OPERATING ACTIVITIESINCOME TAXES (INCLUDING DEFERRED TAX ASSETS AND LIABILITIES)EARNINGS/(LOSS) PER SHARE
NATURE AND LEVEL OF RISKS ARISING FROM FINANCIAL INSTRUMENTS
FINANCIAL INSTRUMENTS
EVENTS AFTER THE REPORTING PERIOD

10-11
12
13-16
16-18
18
19-21
22
23
24-25
25
26-27
28
28-29
29-30
30-33
33
34-37
38
39

KARSAN OTOMOTİV SANAYİİ VE TİCARET A.Ş. AND ITS SUBSIDIARIESCONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS AS OF 30
SEPTEMBER 2023
(All amounts are expressed in thousand Turkish Lira (TL) unless otherwise stated)

Footnote
References
ASSETS
Current Assets
Cash and cash equivalents
Financial Investments Trade
Receivables
Trade Receivables From Related Parties
Trade Receivables From Third Parties

6
7

Receivables from Finance Sector Operations
Receivables from Financial Sector Operations from Third Parties
Other Receivables
Other Receivables From Third Parties Derivative
Instruments
Inventories
Prepaid Expenses
Assets Related to Current Period Tax
Other Current Assets

7

8
11
18
15

Property, Plant and Equipment
Financial Investments
Trade Receivables
Trade Receivables From Third Parties
Receivables from Finance Sector Operations
Receivables from Financial Sector Operations from Third Parties
Derivative Instruments
Property, Plant and Equipment
Right-of-Use Assets
Intangible Assets
Goodwill
Other Intangible Assets

7
7
9

10
11
18
15

Prepaid Expenses
Deferred Tax Asset
Other Property, Plant and Equipment
TOTAL ASSETS

Current
Period Not
Independently
Audited
30 September
2023

Prior
PeriodIndependently
Audited31 December
2022

4.055.643
206.591127.325
1.642.198
546
1.641.652
109.440
109.440239.034
239.034
25.614
1.132.609
300.973
1.941
269.918

3.255.933
44.731
107.8391.627.455
702
1.626.753
70.45070.450137.917137.917109.054867.328134.791
1.677
154.691

4.006.480
325.033
319.200
319.200
172.2312.827.299
15.810286.72210.645276.077
32.89327.19597
8.062.123

3.045.150
167.093
197.363
197.363282.044282.04435.7001.788.922
21.153318.463
10.645307.818
8.397
172.667
53.3486.301.083

The accompanying notes form an integral part of these consolidated financial statements
1

KARSAN OTOMOTİV SANAYİİ VE TİCARET A.Ş. ITS SUBSIDIARIESCONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS AS OF 30 SEPTEMBER 2023
(All amounts are expressed in thousand Turkish Lira (TL) unless otherwise stated)

Footnote
References
LIABILITIES AND EQUITY
Short Term Liabilities
Short Term Borrowings
Short-Term Portions of Long-Term Borrowings
Short Term Payables From Leasing Transactions
Trade Payables
Trade Receivables To Related Parties
Trade Receivables To Third Parties

12
12

6
7

Payables Related to Employee Benefits
Other Payables
Other Receivables To Third Parties
Derivative Instruments
Deferred Incomes
Period Income Tax Liability

6
11

Short-Term Provisions
Short-Term Provisions Related to Employee
Benefits
Other Short-Term Provisions
Other Short-Term Liabilities

13
15

Long Term Liabilities
Long Term Borrowings
Long Term Payables From Leasing Transactions
Derivative Instruments
Long Term Provisions
Long-Term Provisions Related to Employee
Benefits
Other Long-Term Provisions
Deferred Incomes

12

13
11

EQUITY
Equity Attributable to Owners of the Company
Paid-in Capital
Adjustments to Share Capital
Additional Equity Contribution to Equity Due To Business
Combinations Share Premiums/Discounts
Other Accumulated Comprehensive Income or Expenses
That Will Not Be Reclassified Subsequently to Profit or Loss
Gains on Revaluation and Remeasurement Losses on Remeasurement of
DefinedBenefit Plans
Other Comprehensive Income or Expenses That Will be
Reclassified Subsequently to Profit or Loss
Foreign Currency Translation Differences
Change Resulting from the Fair Value Measurement of Financial
Investments
Hedging Gains/Losses Restricted Reserves
Appropriated from Profit Prior Years
LossesNet Profit for The Year
Non-Controlling Interests
TOTAL LIABILITIES AND EQUITY

Prior
PeriodIndependently
Audited
30 September
2023

Prior
PeriodIndependently
Audited31 December
2022

4.575.778
2.329.623
430.324
15.035817.350
95.875721.475
70.545444.765444.7657.458
246.693192.105

3.610.534
1.984.354
469.8179.721
960.34448.184912.160
36.108-24.794167.31121.88013.32968.71729.675

1.137.573
790.129
11.334289.353

891.455643.498
16.250215.670

176.673112.680
46.757131.66484.00616.0372.348.772
2.319.802900.000
22.5865.305
6.779

1.799.094
1.768.812
900.000
22.5865.305
6.779

1.632.264

1.116.835

1.723.006

1.162.497(90.742)(45.662)(87.680)(114.542)

57.442

11.256(39.548)(105.574)
1.519(169.670)
8.699
28.9708.062.123(39.548)(86.250)1.519(295.216)
125.54630.2826.301.083

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

2

36.7251.744
82.046KARSAN OTOMOTİV SANAYİİ VE TİCARET A.Ş. AND ITS SUBSIDIARIESCONSOLIDATED CONDENSED STATEMENT OF PROFIT OR LOSS AND OTHERCOMPREHENSIVE INCOME FOR THE PERIOD 1 JANUARY - 30 SEPTEMBER 2023
(All amounts are expressed in thousand Turkish Lira (TL) unless otherwise stated)

Footnote
References
Revenue
Cost of Sales (-)
Gross Profit from Business Activities

16
16

Gross Profit from Finance Sector Activities

16

GROSS PROFIT
General Adm.Expenses (-)
Marketing Expenses (-)
Research and Development Expenses (-)
Other Income from Operating Activities (-)

17

Other Expenses from Operating Activities (-)

17

OPERATING PROFIT

Not
Independe
ntly
Audited 1
January-30
September
2023

Not
Independently
Audited
1 July-30
September
2023

Not
Independently Audited 1
January30
September
2022

Not
Independently
Audited
1 July-30
September

3.685.352(2.703.631)
981.7211.263.297(930.960)
332.337

1.733.836(1.318.932)
414.904

664.186(550.797)
113.389152.73922.176--

1.134.460

354.513414.904

113.389(74.746)(143.614)(4.032)
127.414(15.898)
243.637(90.355)(167.178)(5.273)
192.444(6.157)338.385(35.767)(65.483)(1.925)77.454(2.981)84.687(12.423)

22.1004.195(176.287)(330.359)(8.868)604.866(31.015)
1.192.797

Income from Investing Activities

20.127OPERATING PROFIT BEFORE FINANCE EXPENSES

1.212.924

Finance Expenses (-)(1.302.437)

PROFIT/(LOSS) BEFORE TAX(89.513)

Tax Income/(Expense)

91.945Period Tax (Expense)
Deferred Tax Income/(Expense)
PROFIT/(LOSS) FOR THE YEAR

91.945
2.432

18

Non-Controlling Interests
Parent Company Shares
Earnings Per Share (kr) (per share)

19

OTHER COMPREHENSIVE INCOME/(EXPENSES):
Items That Will Not be Reclassified Subsuquently to Profit or Loss
Revaluation Fund of Tangible Fixed Assets
Tax Effect of Revaluation Fund of Tangible Fixed Assets Loss on
Remeasurement of Defined Benefit Plans
Tax Effect of Loss on Remeasurement of Defined Benefit Plans Items
That Will be Reclassified Subsuquently to Profit or LossTax Effect of Gains from the Fair Value Measurement of
Financial Investments
Foreign Curr. Conversion Diff.
Hedging Losses
Tax Effect of Hedging Losses
Other Comprehensive Income/(Expenses)

9(6.267)
8.699
0,010

515.429622.788(62.279)(60.108)
15.02826.82746.151(25.765)6.441
542.256

231.214360.485

88.882(353.013)(420.494)(149.170)(121.799)(60.009)(60.288)

49.88396.21765.60449.883(71.916)(1.780)97.99736.208233
65.371
5.316(6.127)(65.789)(0,080)17.35518.853
0,021

3.170
2.146
0,002

560.509622.788(62.279)
20.305763.670848.522(84.852)(18.057)

763.670848.522(84.852)

12.442(39.609)9.110
745.613781.82113.889(10.955)
2.520
769.124774.440781.82117.355764.466

774.440
3.170
771.270

TOTAL COMPREHENSIVE INCOME

544.688438
3.200
22.223(5.556)580.814508.898

Total Compr. Income Attributable To:

544.6884.955
539.733

508.8982.458
506.440

Non-Controlling Interests
Owners of the Company

18

2022

The accompanying notes form an integral partof these consolidated financial statements
3

5.454

KARSAN OTOMOTİV SANAYİİ VE TİCARET A. Ş. AND ITS SUBSIDIARIESCONSOLIDATED CONDENSED STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD 1 JANUARY – 30 SEPTEMBER 2023
(All amounts are expressed in thousand Turkish Lira (TL) unless otherwise stated)
Accumulated Other
Comprehensive Income andExpenses That Will Not Be
Reclassified to Profit or Loss

Paid-in
CapitalBalance as of 1 January 2022 (Beginning of the Period)

Accumulated Profits

AdjustmentsAdditional Share
Gains/Loss on
Gains/Loss Foreign
Gains on Fair Hedging
to Share
EquityPremiums/Di Revaluation and on
Currency Value
Gains/Losses
CapitalContributio scounts
Remeasurement Accumulated Translation Measurementn toRemeasurem Differences of Financial
Business
Investments
ent
Combinatioof Definedns
Benefits
Plans

900.000

22.586

5.305

6.779

Transfers---

Total Comprehensive Income/(Expenses)

-

-

-

Balance as of 30 September 2022 (End of the Period)

900.000

22.586

Balance as of 1 January 2023 (Beginning of the Period)

900.000

Transfers

Other Comprehensive Income/(Expense)
Profit for the Period
Balance as of 31 March 2023 (End of the Period)

Accumulated Other
Comprehensive Income andExpenses That Will Be
Reclassified to Profit or Loss

398.827(7.104)---763.670

5.305

6.779

1.162.497

22.586

5.305

6.779

-

-

-

-

-

-

-

-

-

-

-

560.509(45.080)

46.186900.000

22.586

5.305

6.779

1.723.006(90.742)35.305

1.162.497(3.410)(39.548)---

12.442(7.104)(45.662)

-

1.128

-

-

375

-

(30.449)-9.032(39.548)(30.449)1.503

11.256(39.548)(86.250)

1.519

-

-

(105.574)

1.519

The accompanying notes form an integral part of these consolidated
financial statements
4(393.718)

98.893989.738

98.518 (98.893)

4.155

993.893

-

-

-

-

(18.853)764.466

17.355781.821(295.200)(18.853)1.754.204

21.5101.775.714(295.216)

125.546

1.768.812

295.216(125.546)

-

8.699

550.990(1.312)549.678

8.699

2.319.802

28.9702.348.772(19.324)(39.548)

Net Profit Equity
NonEquıties
(Loss) for Attributable Controlling
to ParentInterests
The
PeriodRestricted
Prior
Reserves
Years'
AppropriatedLosses
from Profit(169.670)

30.282-

1.799.094-

KARSAN OTOMOTİV SANAYİİ VE TİCARET A. Ş. AND ITS SUBSIDIARIESCONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS FOR THE PERIOD 1 JANUARY – 30
SEPTEMBER 2023
(All amounts are expressed in thousand Turkish Lira (TL) unless otherwise stated)

CASH FLOWS FROM OPERATING ACIVITIESProfit (Loss) for the Period
Profit for the Period From the Continuing Operations
Adjustments Related to Reconciliation of Net Loss of The Period- Adjustments Related to Depreciation and Amortization Expense- Adjustments Related to Impairment/Reversal- Adjustments Related to Impairment on Receivables- Adjustments Related to Other Impairment- Adjustments Related To Provisions- Adjustments Related To Provision For Employee Benefits- Adjustments Related To Other Provisions- Adjustments Related To Interest (Income) and Expenses- Adjustments Related To Interest Income- Adjustments Related To Interest Expense- Adjustments Related to Unrealized Exchange Differences- Adjustments Related To Fair Value Losses- Adjustments Related To Fair Value Gains- Adjustments Related To Tax Expenses
Changes in Working Capital- Adjustments Related to Increase in Trade Receivables- Decrease in Trade Receivables From Related Parties- Increase in Trade Receivables From Third Parties- Adjustments Related to (Increase)/Decrease in Inventories- Decrease in Other Assets Related to Operations- Adjustments Related to Increase/(Decrease) in Trade Payables- Decrease in Trade Payables to Related Parties- Increase/(Decrease) in Trade Payables to Third Parties- Decrease in Other Liabilities Related to Operations

Current
Period Not
Independently Audited
Footnote
1 JanuaryReference 30 September
2023
743.282
2.432

Prior
Period Not
Independently
Audited
1 January30 September 2022

1.214.209
107.4783.8453.845
352.01737.799314.218172.991(20.127)
193.118
829.746(138.454)(138.454)(113.414)

698.578
66.561
6.657
5.738
919
262.02358.721203.302224.807(27.632)
252.439246.448(11.701)(96.217)252.216(178.775)
156
178..619(265.281)(265.112)(142.994)
47.461(190.685)
242.396(528.839)
204.987(256)(204.731)(642.514)
57.481270.970
11.932259.038(9.789)964.4259.181

205.947
18.460(41.433)(1.941)(186.950)(14.558)(1.602)(111.335)(376.270)(414.987)(280.506)

9-10
7

8

Cash Flows Generated from Operations- Interest Received- Payments Made for Provisions for Employee Benefits- Tax Payments- Other Cash Outflows

18

CASH FLOWS FROM INVESTING ACTIVITIES- Cash Outflows From Tangible Assets

9(226.129)- Cash Outflows From Intangible Assets

10

96.91236.2087.644-- Interest Received- Advances Given(157.785)

9.172(143.653)

CASH FLOWS FROM FINANCING ACTIVITIES- Cash Inflows from Capital Advances- Cash Inflows from Borrowings- Cash Outflows from Borrowings- Cash Outflows Related to Debt Payments Arising from Rental Agreements- Cash Outflows from Repayments of Issued Debt Instruments- Interest Paid
- Other Cash Flows (Outflows)(218.597)

240.0234.640.148(4.632.017)
12.254(42.800)(231.868)
35.6861.554.448(1.110.227)(1.262)(29.700)(234.510)
61.274NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS BEFORETHE EFFECT OF FOREIGN CURRENCY TRANSLATION DIFFERENCES

148.415(78.052)

Foreign Currency Translation Differences Effect On Cash and Cash Equivalents

13.44517.770NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS

161.860(60.282)

CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD

44.731206.591103.06142.779CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD

The accompanying notes form an integral part ofthese consolidated financial statements
7
5

KARSAN OTOMOTİV SANAYİİ VE TİCARET A. Ş. AND ITS SUBSIDIARIESFOOTNOTES ON CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR A SIX-MONTH PERIOD ENDED 30 SEPTEMBER 2023
(All amounts are expressed in thousand Turkish Lira (TL) unless otherwise)
stated)1.

ORGANIZATION AND OPERATIONS OF THE GROUP
Karsan Otomotiv Sanayii ve Ticaret A.Ş. (“the Company”) s incorporated in Bursa, Turkey. The address of theCompany is Hasanağa Organize Sanayi Bölgesi (HOSAB), Sanayi Caddesi No:53 16280, Nilüfer-Bursa.
Related group: Kıraça Holding A.Ş.
Registered stock exchange: Borsa İstanbul Yıldız Pazar
The Company has been established to build any kind of vehicle assembly and bodywork facilities, purchasing thealready established facilities, participating in the same, importing vehicles for bodywork manufacturing andproducing and selling any kind of vehicle bodywork in Turkey. The activities of the Company are to produce,
import and export motor vehicles to various automotive brands. Moreover, the Company provides industrial
services to the automotive main and sub-industry.
As of 30 September 2023, the average personnel number of the Group is 2.130 (31 December 2022: 1.354).
The immediate parent and ultimate controlling party of the Group is Kıraça Holding A.Ş.
The details about the Group’s subsidiaries, associates and joint ventures are below:

Name of Company

Place ofincorporation andoperation

Karsan İç ve Dış Ticaret A.Ş.
Karsan USA LLC (*)
Karsan Europe S.R.L.
Hervouet Corporate Industry (HCI) (***)
Hervouet Corporate Lease (HCL)

Sales and marketing
Sales and marketing
Sales and marketing
Sales and marketing
Sales and marketing

Functional
currency

Turkish Lira
US Dollar
Euro
Euro
Euro

Proportion of ownershipinterest and voting power heldby the Group (%)
31 September
31December
2023
2022

100%
100%
100%
50%
50%

100%
100%
100%
50%
50%

(*) The Company founded a company on 26 April 2010, based in New York, US, with the trade name Karsan USA
LLC that is wholly owned by the Karsan Otomotiv and does not require a capital transfer during foundation
process, in order to participate in tenders to be held by local authorities in US, regarding the project of a taxi
model. There was no capital transfer to the Company and as the Company is inactive, has not been included inconsolidated financial statements.

(**) The Company, within the framework of the objective of increasing the competitiveness and efficiency in theforeign markets, in order to increase its market share in France and participate in public tenders, acquired 2,400
shares of TL 4,515 (EUR 700,000) nominal value, with a 50% share in the capital of the French distributor
Hervouet Corporate Industry. The first capital payment of TL 2,653 (EUR 400,000) was made on 17 June 2019
and the second capital payment of TL 1,863 (EUR 300,000) was made on 31 July 2019.

6

KARSAN OTOMOTİV SANAYİİ VE TİCARET A. Ş. AND ITS SUBSIDIARIESFOOTNOTES ON CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR A SIX-MONTH PERIOD ENDED 30 SEPTEMBER 2023
(All amounts are expressed in thousand Turkish Lira (TL) unless otherwise)
stated)1.

ORGANIZATION AND OPERATIONS OF THE GROUP (CONT’D)

Functional currency
Proportion of ownership interest andvoting power held by the Group (%)
Name of company
Place of incorporation Functional
30 September
31 December
currency
2023
2022
and operation
Karsan Otomotiv Sanayi Mamülleri
Distributor
Turkish6.43%
6.43%
Pazarlama A.Ş. (“Karsan Pazarlama”) (*)
Lira

Dividend to be paid:
Public companies processes their dividend distributions according to the II-19.1 numbered CMB, which became
effective on or after 1 February 2014.
Shareholders distribute their dividends within the frame of dividend distribution policies determined by general
assembly and according to the related regulations by the approval of general assembly. Within the mentioned
regulation, minimum rate of distribution is not determined. Companies distribute their dividends according to thepredetermined terms in their articles of incorporation or dividend distribution policies.

Approval of the consolidated financial statements:
Board of Directors has approved the consolidated financial statements and delegated authority for publishing it on
8 November 2023. General Assembly has the authority to modify the consolidated financial statements.
2.

BASIS OF PRESENTATION OF THE CONSOLIDATED FINANCIAL STATEMENTS
Basis of Presentation
Statement of Compliance in TFRS
The accompanying financial statements are prepared in accordance with the requirements of Capital Markets Board(“CMB”) Communiqué Serial II, No: 14.1 “Basis of Financial Reporting in Capital Markets” (“Communiqué”),
which was published in the Official Gazette No:28676 on 13 June 2013, and the Turkish Financial ReportingStandards and interpretations (“TFRS”) that have been put into effect by the Public Oversight Accounting and
Auditing Standards Authority (“POA”) under Article 5 of the Communiqué are taken as a basis.
In addition, the financial statements are presented in accordance with the formats specified in the “Announcement
on TFRS Taxonomy” published by POA on 4 October 2022 and the Financial Statement Examples and User Guide
published by CMB.
The financial statements are prepared on the historical cost basis, except for the presentation of derivative financial
instruments at their fair value and the revaluation of property, plant and equipment. Historical cost is generally
based on the fair value of the consideration given in exchange for assets.
The Group has prepared its consolidated interim financial statements as of 30 September 2023 by choosing
summary presentation in accordance with TAS 34 "Interim Financial Statements" standard, and the disclosuresand notes required to be included in the annual consolidated financial statements prepared in accordance withTFRS are summarized or not included in accordance with TAS 34.
7

KARSAN OTOMOTİV SANAYİİ VE TİCARET A. Ş. AND ITS SUBSIDIARIESFOOTNOTES ON CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR A SIX-MONTH PERIOD ENDED 30 SEPTEMBER 2023
(All amounts are expressed in thousand Turkish Lira (TL) unless otherwise)
stated)2.

BASIS OF PRESENTATION OF THE CONSOLIDATED FINANCIAL (cont’d)Statement of Compliance in TFRS (Cont’d)
The attached condensed consolidated financial statements should be read together with the independently
audited consolidated financial statements as of 31 December 2022 and their accompanying notes. The interim
financial results are not indicative of the year-end results alone.
The company continued to apply the same accounting policies and accounting estimation methods as stated in
its independently audited consolidated financial statements dated 31 December 2022.
Currency Used
The individual financial statements of each Group entity are presented in the currency of the primary economic
environment in which the entity operates (its functional currency). The operating results and financial positionof each entity are expressed in TL, which is the functional currency of the Group, and the presentation currency
for the consolidated financial statements.
Comparative Information and Adjustment of Prior Period Consolidated Financial Statements
The consolidated financial statements of the Group have been prepared comparatively with the prior period inorder to give information about financial position and performance. In order to maintain consistency withcurrent year consolidated financial statements, comparative information is reclassed and significant changes
are disclosed if necessary. In the current period, the Group has not made any reclassifications in the prior period
financial statements.
Going Concern Assumption
The consolidated financial statements have been prepared on a going concern basis, with the assumption that
the Group will benefit from its assets and fulfill its obligations in the next year and in the natural course of its
activities.
As of 30 September 2023, the Group has a prior years’ loss amounting to TL 160,971 (31 December 2022:
TL 169,670 profit), including the net profit for the current period, and as of the same date, its current liabilities
exceeded its current assets by TL 520,135. As of 30 September 2023, the Group has an Operating Profit of TL
1,192,797 and a net profit of TL 2,432. The Group Management expects an increase in the main operating
profitability with the scale to be formed from the growth in the revenue in the budget and estimation studies
for 2023 and anticipates that this level will create a cash inflow to close the current working capital deficit. For
these reasons, the Group management does not foresee a risk to the net working capital regarding the going
concern of the entity.
Adjustment of Financial Statements during High Inflation Periods
In accordance with the CMB's Decision dated 17 March 2005 and numbered 11/367, inflation accounting
practice has been discontinued, effective from 1 January 2005, for companies operating in Turkey andpreparing their financial statements in accordance with the provisions of the CMB Communiqué. Accordingly,
as of 1 January 2005, the "Financial Reporting in Hyperinflationary Economies" Standard ("TMS29")
published by the POA No. 29 has not been implemented.
On 20 January 2022, the Public Oversight Authority made a statement regarding the Implementation of
Financial Reporting in Hyperinflationary Economies within the Scope of Turkish Financial ReportingStandards, Financial Reporting Standard for Large and Medium-Sized Enterprises. Accordingly, it has beenstated that there is no need for enterprises that implement TFRS to make any adjustments within the scope ofTAS 29 in their financial statements for 2021. As of 30 September 2023, no new statement was made by the
POA within the scope of TAS 29, and no inflation adjustment was made in accordance with TMS 29 while
preparing the condensed consolidated financial statements dated 30 September 2023

8

KARSAN OTOMOTİV SANAYİİ VE TİCARET A. Ş. AND ITS SUBSIDIARIESFOOTNOTES ON CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR A SIX-MONTH PERIOD ENDED 30 SEPTEMBER 2023
(All amounts are expressed in thousand Turkish Lira (TL) unless otherwise)
stated)3.

NEW AND REVISED ACCOUNTING STANDARDS IN TURKEY
The accounting policies adopted during the preparation of financial statements for the accounting period ending
as of 30 September 2023 are applied consistently with those used during the previous year except for new andchanged Turkish Accounting Standards (“TAS”)/Turkish Financial Reporting Standards (“TFRS”) and
TAS/TFRS Comments valid as of 1 January 2023, which are summarized below. The effects of these standards
and comments on the Company’s financial situation end performance are explained in the related paragraphs.
a) New Standard, Amendments and Comments Effective as of 1 January 2023:
Narrow changes in TAS 1, Application Statement 2 and TAS 8
Effective for annual reporting periods beginning on or after 1 January 2023. These changes are intended to
improve accounting policy disclosures and help financial statement users distinguish between changes inaccounting estimates and changes in accounting policies.
TAS 12, Amendment to deferred tax on assets and liabilities arising from a single transaction
Effective for annual reporting periods beginning on or after 1 January 2023. These amendments require
deferred tax recognition on transactions that result in equal amounts of taxable and deductible temporary
differences when first recognized by companies.
Amendment to TAS 12, International tax reform – Column two model rules;
The deferred tax exemption and the announcement of the exemption came into effect. Other disclosure
requirements apply to annual accounting periods beginning on or after 1 January 2023. These amendments
provide companies with a temporary exemption from accounting for deferred taxes resulting from internationaltax reform by the Organization for Economic Cooperation and Development. The changes also include
targeted disclosure requirements for affected companies.
b) Standards Published as of 30 September 2023, But Not Enforced and Not Early Implemented:
TAS 1, Amendment to long-term obligations, which are contractual terms,
Effective for annual reporting periods beginning on or after 1 January 2024. These changes clarify how
conditions that an entity must comply with within twelve months of the reporting period affect the classificationof a liability.
TFRS 16, Sale and leaseback transactions,
Effective for annual reporting periods beginning on or after 1 January 2024. These changes include the saleand leaseback requirements in TFRS 16 that describe how an entity accounts for a sale and leaseback
transaction after the transaction date. Sales and leaseback transactions where some or all of the lease payments
consist of variable lease payments that are not tied to an index or rate are likely to be affected.
Changes regarding supplier financing agreements in TAS 7 and TFRS 7,
Effective for annual reporting periods beginning on or after 1 January 2024. These changes require disclosure
to increase transparency about the effects of supplier financing agreements on businesses' liabilities, cash flows,
and liquidity risks. Disclosure requirements are the IASB's (International Accounting Standards Board)
response to investors' concerns that some companies’ supplier financing agreements are not clear enough,hindering investor analysis.

9

KARSAN OTOMOTİV SANAYİİ VE TİCARET A. Ş. AND ITS SUBSIDIARIESFOOTNOTES ON CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR A SIX-MONTH PERIOD ENDED 30 SEPTEMBER 2023
(All amounts are expressed in thousand Turkish Lira (TL) unless otherwise)
stated)4.

SIGNIFICANT ACCOUNTING ASSESSMENT, ESTIMATION AND ASSUMPTIONS
The critical judgements taken by the Group while applying its accounting policies(a)Judgements in determining the timing of satisfaction of performance obligations

While making the assessments, the Management considers the detailed conditions specified in TFRS 15
regarding the fulfillment of performance obligations and the recognition of the allocated transaction costs asrevenue, especially whether the control regarding the goods and services has passed to the customer.
(b)

Useful lives of property, plant and equipment and intangible assets

Property, plant and equipment and intangible assets (excluding lands) are presented with their net value lessthe accumulated depreciation and impairment, if any. Depreciation is allocated using a straight-line method
based on the useful lives of the property, plant and equipment. Useful lives are based on management's best
estimates, reviewed at each balance sheet date and adjusted if necessary.
(c)

Provisions

Provisions are allocated when the Group has a present legal or constructive obligation as a result of past events,
an outflow of resources will likely be required to settle the obligation, and the amount to be paid can be
estimated in a reliable manner. The Group considers the realization rates in the past and in the period when
determining the provision estimates.
(d)Available financial losses

The Group recognizes deferred tax assets and liabilities for temporary timing differences arising from thedifferences between its tax base financial statements and its financial statements prepared in accordance with
TFRS. The Group has deferred tax assets consisting of unused tax losses and other deductible temporary
differences that can be deducted from the future profits. While recognizing said deferred tax assets, the Group
has taken into account the future profit projections and the expiry dates of the losses incurred in the current
periods. In cases where the final tax results related to this subject are different from the amounts recorded at
the beginning, these differences may affect the income tax and deferred tax assets and liabilities in the periods
in which they are determined.
(e)Provision for doubtful receivable

For the doubtful trade receivables, the Group allocates a provision for the receivables which are overdue andfor which the possibility of collection is expected to decrease, based on the past experience of non-collection.
(f)

Investments in progress and capitalized development costs

As of 30 September 2022, investments in progress amounting to TL 634,914 (31 December 2022: TL 416,756)
consist of property, plan and equipment and intangible asset investments related to projects the investments ofwhich are still ongoing. After the completion of said projects, they will be capitalized and expensed throughdepreciation. In addition, the Group has development expenses related to the projects capitalized underintangible
assetsamountingtoTL
473,103(31
December
2022:
224,551 TL). Investments in progress and development costs, which do not provide economic benefits, arededucted from the asset by deducting them as expenses during the period. In line with their best estimations,
the Group management anticipates that the economic benefit from the investments will be higher than theirbook values.
10

KARSAN OTOMOTİV SANAYİİ VE TİCARET A. Ş. AND ITS SUBSIDIARIESFOOTNOTES ON CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR A SIX-MONTH PERIOD ENDED 30 SEPTEMBER 2023
(All amounts are expressed in thousand Turkish Lira (TL) unless otherwise)
stated)4.

SIGNIFICANT ACCOUNTING ASSESSMENT, ESTIMATION AND ASSUMPTIONS (CONT’D)
The critical judgements taken by the Group while applying its accounting policies (cont’d)(g)Capitalization of borrowing costs

The Group capitalizes borrowing costs that are directly attributable to the production of qualifying assets.
(h)Impairment of Inventory

Impairment of inventory is determined within the framework of the Group's accounting policy and is
calculated by evaluating the inactive waiting times and possible value losses of the inventories.
(i)

Investment allowance, R&D allowance and Allowance of interest of cash capital increase

The Group capitalizes the R&D expenditures it has made within the scope of the law numbered 5746 in its
legal books. As of 30 September 2023, it carries the R&D deduction amounting to TL 434,164 into the next
years. As of 30 September 2023, TL 108,541 was transferred to the consolidated financial statements as adeferred tax asset.
The Group's earnings from investments subject to incentive certificate are subject to corporate tax at reduced
rates starting from the accounting period in which the investment is partially or fully operational until the solid
amount of the investment is reached. In this context, as of 30 September 2023, the Company has a tax
advantage of TL 374,408 that it can benefit from in the future. As of 30 September 2023, TL 114,568 wastransferred to the consolidated financial statements as a deferred tax asset.
(j)Calculation of Provision for Loss

When measuring the expected provision for loss, the Group uses reasonable and supportable forward-looking
information based on assumptions about different future economic conditions and how these conditions willaffect each other. The loss given default is an estimate of a loss in default. It is based on the difference between
the receivables the lender expects to collect and the contractual cash flows, taking into account the cash flows
from the collateral and credit enhancements. The probability of default is an important input in measuring the
expected credit losses. The probability of default is an estimate of the probability of default in a given time
period, and the calculation thereof includes historical data, assumptions and expectations in the future
conditions.
(k)Control over HCI

Since the Group has 50% shares of HCI, HCI is defined as a subsidiary of the Group in Note 1. Based on theagreements signed between the Group and the other investors, the Group has the power to change and appoint
members of the board of directors that will enable HCI to manage its activities. Therefore, the Groupmanagement has found that the Group has the power to manage the company’s activities alone, and therefore
the Group has control over the HCI.
(l) Impairment of goodwill
The Group subjected the goodwill amount to an impairment test every year. The recoverable amounts of cash
generating units are determined according to the value calculations in use. These calculations require
estimation.

11

KARSAN OTOMOTİV SANAYİİ VE TİCARET A. Ş. AND ITS SUBSIDIARIESFOOTNOTES ON CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR A SIX-MONTH PERIOD ENDED 30 SEPTEMBER 2023
(All amounts are expressed in thousand Turkish Lira (TL) unless otherwise)
stated)5.

SEGMENT REPORTING

A reporting segment is an industrial or geographical segment, the segment information of which should be
declared. Industrial segments are segments that differ from the other segments of the Group in terms of providing
a particular good or service or a group of related goods or services, or in terms of risk and benefit. Geographicalsegments are segments of the Group, which provide goods or services in a particular economic environment anddiffer in terms of risk and benefit from the other segments operating in another economic environment. Informationon the operating segments based on the Group's internal reporting is as follows:

TurkeyItaly
FranceRomania
Luxemburg
United States
Spain
Bulgaria
IsraelPortugal
Switzerland
Belgium
GreeceCanadaPolandGermany
Hungary
UkraineLithuania
Other (**)

1 January30 September
2023

1 January30 September
2022

2.489.256
287.524950.563
20.224

246.718
234.208
163.019130.463
77.89571.00562.82032.462
15.46511.953
5.554
1.047
1.000
942
543
451
425
5.161

119.094
181.015
268.970
49.42445.15547.05916.295
11.11513.107
11.815

3.838.091

1.733.836(**) The other is Slovakia, Austria, Croatia and Japan. (2022: Includes Slovakia, Bulgaria, Ukraine, Lithuania,
Spain, Greece, Poland, Hungary and Switzerland).
The main field of activity of the Group is the production of automotive and similar vehicles and spare parts, andthere are four operating segments that contain the information that the Group Management evaluates theperformance and uses to decide on the resource allocation. These operating segments of the Group are Karsan
branded products, where the reporting is made on commercial vehicles produced under its own brand, industrial
and spare parts sales where the reporting is made on spare parts, tractor cabins and catophoresis operations, andother branded sales where the reporting is made on commercial vehicles produced for the other brands. During anevaluation of the segments’ performances made on a regular basis, the main operating profit or loss is taken into
account, but the distribution of other expenses and income items from the main activities is not performed. Mostof the Group's assets and liabilities are located in Turkey. In addition, since a periodical information about assets
and liabilities was not provided to the competent decision-making authority, the reporting of assets and liabilities
according to segments was not made. The Group management examines its financial data over the financial
statements prepared in accordance with TFRS.

12

KARSAN OTOMOTİV SANAYİİ VE TİCARET A. Ş. AND ITS SUBSIDIARIESFOOTNOTES ON CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR A SIX-MONTH PERIOD ENDED 30 SEPTEMBER 2023
(All amounts are expressed in thousand Turkish Lira (TL) unless otherwise)
stated)6.

RELATED PARTY DISCLOSURESThe transactions between the Company and its subsidiaries, which are related parties of the Company, are notdisclosed in this note as they are eliminated during consolidation.
The trade receivables from the related parties generally arise from the sales transactions and their approximate
maturity is 75 days.
The trade payables to the related parties generally arise from the purchase transactions and have anapproximate maturity of 75 days.
The details of the transactions between the Group and other related parties are explained below.
31 September 2023
Receivables

Debts

Debts

Short-term

Short-term

Short-term
Non-

Balances with related parties

Commercial

Kıraça Holding A.Ş.
Karsan Otomotiv Sanayi Mamülleri Pazarlama A.Ş.
Karland Otomotiv A.Ş.
Sirena Marine Denizcilik ve Ticaret A.Ş.
Kök Ziraat Turizm San. ve Tic. A.Ş.
Kırsan Turizm ve Otomotiv San. ve Tic. A.Ş.
Kar İnşaat Taahhüt San. ve Tic. A.Ş.

(444.765)-

546(95,875)(444,765)

Commercial

Kıraça Holding A.Ş.
Karsan Otomotiv Sanayi Mamülleri Pazarlama A.Ş.
Karland Otomotiv A.Ş.
Sirena Marine Denizcilik ve Ticaret A.Ş.
Kök Ziraat Turizm San. ve Tic. A.Ş.
Kırsan Turizm ve Otomotiv San. ve Tic. A.Ş.
Kar İnşaat Taahhüt San. ve Tic. A.Ş.

13

Commercial(70,453)
(641)
(353)
(12,573)(9,207)(2,593)(55)

Receivabe
Short-term
Balances with related parties

Commercial

539
7
-

31 December 2022
Debts
Short-term

Debts
Short-term

Commercial

Non-Commercial702-(8.523)(866)(32.700)(3.744)(2.309)(42)702(48.184)-

KARSAN OTOMOTİV SANAYİİ VE TİCARET A. Ş. AND ITS SUBSIDIARIESFOOTNOTES ON CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR A SIX-MONTH PERIODENDED 30 SEPTEMBER 2023
(All amounts are expressed in thousand Turkish Lira (TL) unless otherwise stated)

6.

RELATED PARTY DISCLOSURES (continued)
1 January - 31 March 2023
Other
Income/Received
Transactions with Related Parties

Kıraça Holding A.Ş.
Kırsan Turizm ve Otomotiv San.ve Tic. A.Ş.
Karsan Otomotiv Pazarlama Ticaret A.Ş.
Karland Otomotiv A.Ş.
Kök Ziraat Turizm San. ve Tic. A.Ş.
Kar İnşaat Taahhüt San. Ve Tic. A. Ş
Sirena Marine Denizcilik ve Ticaret A.Ş.

Procurement ofservices

Purchases

Sales

Interests Given Interests

Rental Expense(Expense)(24,893)(15,241)(13)(820)(2,866)
(11)
-

(95)
(26,134)

1,641
-

-

(54.845)-(1.006)(4.638)-(13)-(43,844)(26,229)1,641-(54.845)(5.644)(13)

1 July- 30 September 2023
Transactions with Related Parties

Kıraça Holding A.Ş.
Kırsan Turizm ve Otomotiv San.ve Tic. A.Ş.
Karsan Otomotiv Pazarlama Ticaret A.Ş.
Karland Otomotiv A.Ş.
Kök Ziraat Turizm San. ve Tic. A.Ş.
Kar İnşaat Taahhüt San. Ve Tic. A. Ş
Sirena Marine Denizcilik ve Ticaret A.Ş.

Procurement ofservices

Purchases(11.174)(7.488)(327)(1.038)-(55)(7.661)(20.027)(7.716)

16

Sales

Interests

Given Interests

Rental Expense(Expense)

444
-

-

(29.723)-(2.044)
-

-

444

-

(29.723)(2.044)-KARSAN OTOMOTİV SANAYİİ VE TİCARET A. Ş. AND ITS SUBSIDIARIESFOOTNOTES ON CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR A SIX-MONTH PERIODENDED 30 SEPTEMBER 2023
(All amounts are expressed in thousand Turkish Lira (TL) unless otherwise stated)

6.

RELATED PARTY DISCLOSURES (continued)
1 January - 31 September 2022
Other
Income/Received
Transactions with Related Parties

Kıraça Holding A.Ş.
Kırsan Turizm ve Otomotiv San.ve Tic. A.Ş.
Karland Otomotiv A.Ş.
Kök Ziraat Turizm San. ve Tic. A.Ş.
Kar İnşaat Taahhüt San. Ve Tic. A. Ş
Sirena Marine Denizcilik ve Ticaret A.Ş.
Karsan Otomotiv Sanayi Mamülleri Pazarlama A.Ş.

Procurement ofservices

Purchases

Sales

Interests Given Interests

Rental Expense-(Expense)(9,256)(7,811)(405)(1,496)-(106)(17,783)
(823)

2.553
- 8
-

-

(435)
-

(3.317)
-

(19)
137

(18,968)(18,712)

2,561

-

(435)

(3.317)

118

Interests

Given Interests

1 July- 30 September 2023
Transactions with Related Parties

Kıraça Holding A.Ş.
Kırsan Turizm ve Otomotiv San.ve Tic. A.Ş.
Karland Otomotiv A.Ş.
Kök Ziraat Turizm San. ve Tic. A.Ş.
Kar İnşaat Taahhüt San. Ve Tic. A. Ş
Sirena Marine Denizcilik ve Ticaret A.Ş.
Karsan Otomotiv Sanayi Mamülleri Pazarlama A.Ş.

Procurement ofservices

Purchases(3.405)(1.460)
(306)
(638)
-

(17)
(7.462)
(26)

945
-

-

(435)
-

(3.317)
-

(19)
137

(7.505)

945

-

(435)

(3.317)118(5.809)17

Sales

Rental Expense(Expense)

KARSAN OTOMOTİV SANAYİİ VE TİCARET A. Ş. AND ITS SUBSIDIARIESILLUSTRATIVE FOOTNOTES ON CONDENSED CONSOLIDATED FINANCIAL TABLESAS OF 31 MARCH 2023
(All amounts are expressed in thousand Turkish Lira (TL) unless otherwise
stated)6.

RELATED PARTY DISCLOSURES (continued)
The Group receives the information systems, human resources, financing and other consultancy services from Kıraça
Holding.
The Group supplies some interior cladding, etc. for the production of minibuses, midibuses and buses and molds
and equipment for these parts from the company Sirena Marine.
The Group pays monthly rent to Kök Ziraat A.Ş. for the office in Istanbul. The expenses such as security, naturalgas, maintenance and repair, cleaning and other common expenses of said office are invoiced monthly by Kök
Ziraat A.Ş. In addition, the factory building in Bursa Organized Industrial Zone was rented from Kök Ziraat A.Ş.
Benefits for the senior executives:
The Company’s senior management team consists of the members of the Board of Directors, the Executive Boardand the Company’s general manager and assistants. The benefits provided to the senior executives include thebenefits such as wages, premiums, health insurance and transportation. The benefits provided to senior executives
during the period are as follows:

1 January-

1 July-1 January-

30 September
2023

30 September
2023

30 March 2022 September 2022

Fees and other short-term benefits

7.

1 July-31

29.671

9.967

8.281

2.795

29.617

9.967

8.281

2.795

TRADE RECEIVABLES AND PAYABLESa)

Trade Receivables:

The details of the Group’s trade receivables as of the balance sheet date are as follows:
31 September
2023

31 December
2022

Short-term trade receivables
Trade receivables
Notes receivable

1.627.394
11.622

1.695.402
170

546

702

Income accruals

96.42421.124

Provision for doubtful trade receivables (-)(50.033)(56.961)

Expected loss provision (-)(43.755)(32.982)

1.642.198

1.627.455

Trade receivables from related parties (Footnote:6)18

KARSAN OTOMOTİV SANAYİİ VE TİCARET A. Ş. AND ITS SUBSIDIARIESILLUSTRATIVE FOOTNOTES ON CONDENSED CONSOLIDATED FINANCIAL TABLESAS OF 31 MARCH 2023
(All amounts are expressed in thousand Turkish Lira (TL) unless otherwise
stated)7.

TRADE RECEIVABLES AND PAYABLES (continued)

Long-term trade receivables
Trade receivables

31 March
30 September
2023
2023

31 December

51.413-

197.363

51.413

197.3632022

The trade receivables consist of the receivables from the customers for the products sold or services rendered in
the normal course of business. The trade receivables consist of the short-term trade receivables with a maturity of
30 - 60 days in general, and the receivables from the municipalities with a maturity of more than 1 year. The Groupholds its trade receivables to collect the contractual cash flows and therefore measures at amortized cost using theeffective interest method.

311March
1 JanuaryJanuary30
September
30 September
2023
2022
2023

Movement of expected loss provision(32.982)
51.413(13.645)

Period cost

(32.982)(10.773)-

Closing balance(43.755)(13.645)

Opening balance restated as of January 1

The Group measures the impairment for its trade receivables based on the lifetime expected credit losses. The
expected credit losses on the trade receivables are estimated using a provision matrix created by looking at thecustomers’ past defaults, analyzing their current financial position, and taking into account the general economic
conditions of the industry in which the relevant customer operates and conditions at the reporting date.
In the current period, there has been no significant change in the estimates and assumptions of the management.
The standard maturity applied by the Group to its trade receivables is between 30 and 60 days (31 December 2022:
30 to 60 days).
The provision for the doubtful receivables reserved for the trade receivables has been determined based on the pastexperience of uncollectibility. For the doubtful receivables in foreign currency, the accrued exchange differences
are included in the provisions, and the same amount is reflected in the foreign exchange income and expenses.
The movement table of the Group’s provision for the doubtful trade receivables is as follows:
31 March
1 January- 1 January30September
30 September
2023
2022
2023

Movements of provision for the doubtful receivables (-)(56.961)
51.413(43.839)

Period cost (Footnote:17)(32.982)(6.928)(5.738)

Closing balance(50.033)(49.577)

Opening balance

19

KARSAN OTOMOTİV SANAYİİ VE TİCARET A. Ş. AND ITS SUBSIDIARIESILLUSTRATIVE FOOTNOTES ON CONDENSED CONSOLIDATED FINANCIAL TABLESAS OF 31 MARCH 2023
(All amounts are expressed in thousand Turkish Lira (TL) unless otherwise
stated)RECEIVABLES AND PAYABLES (continued)
7. TRADEb) Trade Payables:
The details of the Group’s trade payables as of the balance sheet date are as follows:
30 September
Short-term trade payables
Trade payables
Trade receivables to related parties (Footnote:6)

31 December

2023

2022

(721.475)(95.875)(912.160)(48.184)(817.350)(960.344)

The average payment term for the Group’s trade payables is 90-120 days (31 December 2022: 90-120 days).
The Group has the financial risk management policies implemented to ensure that all its debts are paid within thelending period.
8.

INVENTORIES
30 September

Raw material and material
Semi-finished products

2023

31
December
2022

610.520231.690453.430181.503

Finished products

67.79269.805Trade goods

155.393134.555

Goods in transit

73.07933.900

Provision for inventory impairment (-)(5.865)(5.865)1.132.609

867.328

For the 1 January – 30 September 2023 accounting period, TL 1.288.976 (1 January – 30 September 2022: TL
1.017.914) of the Group’s cost of sold goods account is related to the raw material and material consumption.
As a result of its evaluation of stock movement processes, the Group has not identified any issues that require
reserving additional provisions in the accounting period of 1 January - 30 September 2023. (31 December 2022:
TL 5,865)
Movement of provision for inventory impairment

1 January30 September
2023

1 January30 September
2022

Opening balance
Period cost

(5.865)-(5.369)(919)

Closing balance(5.865)(6.288)20

KARSAN OTOMOTİV SANAYİİ VE TİCARET A. Ş. AND ITS SUBSIDIARIESILLUSTRATIVE FOOTNOTES ON CONDENSED CONSOLIDATED FINANCIAL TABLES AS OF 31 MARCH 2023
(All amounts are expressed in thousand Turkish Lira (TL) unless otherwise stated)

9.
PROPERTY, PLANT AND
EQUIPMENTLand
and plots

Undergrodand overland
plants

Bıildings

Plantmachinerand devices

Vehicles

321.681
1.345
2.220

12.7209.020(7.727)36.565
3.112

14.013

Privarecosts

Ongoing
investments (*)

3.129
(71)

416.756
220.798(2.641)2.116.295
1.092.233(8.146)(25)
22.84636.9463.058

634.914

3..223.203

Fixtures

Total

Cost Value
Opening balance as of January 1, 2023
Purchases

941.675466.325

16.443

Transfer
Disposal
Foreign Currency Conversion Differences

367.326
391.633
73(25)

Closing balance as of March 31, 2023

1.408.000

Accumulated Depreciation
Opening balance as of January 1, 2023
Period cost

16.41812.801759.032

338.047-(10.265) (62.081)(457) (55.247)(216.965)(9.084)(3.831)(2.668)(33.285)
(670)

(946)
(40)

-

(327.373)(68.531)

Closing balance as of September 30, 2023-

(10.722) (117.328)(226.049)(6.499)(33.955)(1.350)-(395.904)

Net book value as of September 30, 2023

1.408.000

111.998

7.514

15.7671.708

634.9142.827.299

5.695

641.703

21

KARSAN OTOMOTİV SANAYİİ VE TİCARET A. Ş. AND ITS SUBSIDIARIESILLUSTRATIVE FOOTNOTES ON CONDENSED CONSOLIDATED FINANCIAL TABLES AS OF 31 MARCH 2023
(All amounts are expressed in thousand Turkish Lira (TL) unless otherwise stated)

9.

PROPERTY, PLANT AND EQUIPMENT (continued)Landand plots

Undergroundand overland
plantsCost Value
Opening balance as of 1 January 2022
Purchases
Revaluation Fund
Foreign Currency Conversion Differences
Closing balance as of 30 September 2022

262.540–679.135–
941.675

Accumulated Depreciation
Opening balance as of 1 January 2022
Period cost
Foreign Currency Conversion Differences
Closing balance as of 30 September 2022
Net book value as of 30 September 2022

Privatecosts

Ongoing
investments(*)

36.47445
20
36.539

3.129
3.129

253.054275.959529.013

1.047.377
284.132
848.5223.913
2.183.944(3.135)(468)(2)(3.605)(31.820)(1.200)(5)(33.025)

(407)
(411)
–
(818)

-

(283.314)(27.558)(268)(311.140)

9.107

3.514

2.311

529.0131.872.804

Buildings

Plantmachinery andequipment

Vehicles

16.41816.418182.482
4.934
169.3872.417
359.220283.423351
1.464
285.238

9.857
2.843
12
12.712-(9.701)(423)(10.124)(32.488)(16.388)(235)(49.111)(205.763)(8.668)(26)(214.457)

941.675

6.294

310.10970.781

22

Fixtures

Total

KARSAN OTOMOTİV SANAYİİ VE TİCARET A. Ş. AND ITS SUBSIDIARIESILLUSTRATIVE FOOTNOTES ON CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS AS OF 31 MARCH 2023
(All amounts are expressed in thousand Turkish Lira (TL) unless otherwise
stated)9.

PROPERTY, PLANT AND EQUIPMENT (CONT’D)
The depreciation periods of the tangible assets are as follows:
Economic Life
5-25 years
7-50 years
1-25 years
4-5 years
3-20 years
5 years

Underground and overland plants
Buildings
Plant, machinery and devices
VehiclesFixtures
Private costs
Fair value measurements of the Group's land and buildings

The Group’s land and buildings are stated at their revalued amounts, being the fair value at the date ofrevaluation, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.
The fair value measurements of the Group’s land and buildings as of 30 September 2023 were performed by
Vakıf Gayrimenkul Değerleme A.Ş., independent valuers not related to the Group. Vakıf GayrimenkulDeğerleme A.Ş., which is authorized by CMB provides real estate valuation services in accordance with thecapital markets legislation, and they have appropriate qualifications and recent experience in the valuation ofproperties in the relevant locations.
The fair value of the lands owned has been determined according to the precedent comparison approach.
As of 30 September 2023, the information on the land and buildings owned by the Group and the fair value
hierarchy for related assets are shown in the following table:

Akçalar ve Nilüfer
Land
Building

30 September 2023
1.408.00
611.00Akçalar ve Nilüfer
Land
Building

31 December 2022
941.675
305.245

Fair value level as of reporting date
1. Level TL
2. Level TL
3. Level TL
1.408.00
622.00Fair value level as of reporting date
1. Level TL-

2. Level TL
941.675
305.245

3. Level TL-

The Group’s land and buildings were revaluated by independent experts on 30 September 2023. Revaluations
were performed based on current market conditions. Revaluations fund which have been offset deferred tax
are presented in the other comprehensive income statement.

23

KARSAN OTOMOTİV SANAYİİ VE TİCARET A. Ş. AND ITS SUBSIDIARIESILLUSTRATIVE FOOTNOTES ON CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS AS OF 31 MARCH 2023
(All amounts are expressed in thousand Turkish Lira (TL) unless otherwise
stated)10. INTANGIBLE ASSESTSCapitalized
development costs

Total

Cost Value

RightsOpening balance as of 1 January 2023

113.143473.076586.219

Disposal
Transfers(7.644)-(7.644)321
14.502120.32227
473.103348
14.502593.425

Period cost

(29.876)(6.178)(248.525)(32.769)(278.401)(38.947)

Closing balance as of 30 September 2023

(36.054)(281.294)(317.348)

Net book value as of 30 September 2023

84.268191.807276.077

Cost Value

RightsCapitalized
development costs

Total

Opening balance as of 1 January 2022
Foreign Currency Conversion Differences
Closing balance as of 30 September 2022

102.455
1.683
104.138

467.978467.978570.433
1.683
572.116

Accumulated Amortization
Opening balance as of 1 January 2022
Period cost
Closing balance as of 30 September2022(18.276)(6.406)(24.682)(205.092)(32.597)(237.689)(223.367)(39.003)(262.370)

Net book value as of 30 September 2022

79.456230.289309.746

Foreign Currency Conversion Differences
Closing balance as of 30 September 2023
Accumulated Amortization
Opening balance as of 1 January 2023
Foreign Currency Conversion Differences

The amortization periods of the rights and capitalized development costs in intangible assets are 1-20 years and2-15 years, respectively.

24

KARSAN OTOMOTİV SANAYİİ VE TİCARET A. Ş. AND ITS SUBSIDIARIESFOOTNOTES ON CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR A NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2023
(All amounts are expressed in thousand Turkish Lira (TL) unless otherwise)
)ted)

11.

PREPAID EXPENSES DEFERRED INCOME
Short-Term Prepaid Expenses
Order advances for the stock purchase
Expenses for the next monthLong-Term Prepaid Expenses
Order advances for the non-current asset purchase
Expenses for the next years

Short-Term Deferred IncomesReceived order advances
Income for the next months

Long-Term Deferred Incomes
Income for the next years

24

30 September
2023
286.32231 December
2022

14.6519.034

300.973134.791

30 September
2023-

31 December
2022

125.757

8.397

32.893-32.8938.397

30 September
2023
203.389

31 December
2022

43.304

11.677

246.69336.72530 September
2023
46.75731 December
2022
16.03746.75716.03725.048KARSAN OTOMOTİV SANAYİİ VE TİCARET A. Ş. AND ITS SUBSIDIARIESFOOTNOTES ON CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR A NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2023
(All amounts are expressed in thousand Turkish Lira (TL) unless otherwise)
)ted)

12.

BORROWINGSThe details of the financial liabilities shown at their amortized values are as follows:
Financial Debts
Short-Term Bank Loans
Short-Term Part of the Long-Term Bank Loans
Bonds, Principal Debt, Installments and Interest
Factoring Payables

Long-Term Bank Credits

30 September
2023
2.097.898
430.324-

31 December
2022
1.744.211
469.81744.113231.725

196.030

2.759.947

2.454.171

790.129643.498790.129643.489

3.550.076

3.097.669

30 September 2023

Weighted average
Currency

effective interest rate

TL
EURO

17,57%
9,07%

Weighted average
Currency

effective interest rate

TL
EURO
USD

22,96%
7,72%
14,7%

25

Short-termLong-term

552.549
1.975.673

36.561753.5682.528.222

790.129

31 December 2022
Short-termLong-term

578.594
1.607.336
28.09839.584603.914-2.214.028

643.498

KARSAN OTOMOTİV SANAYİİ VE TİCARET A. Ş. AND ITS SUBSIDIARIESFOOTNOTES ON CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR A NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2023
(All amounts are expressed in thousand Turkish Lira (TL) unless otherwise)
)ted)

12.

BORROWINGS (continued)
The maturities of bank loans are as follows::

Payable within 1 year
Payable within 1-2 years
Payable within 2-3 years
Payable within 3-4 years
Payable within 4-5 years
Payable 5 years and longer term

13.

30 September
2023

31 December
2022

2.601.875
102.69365.74744.419503.617-2.214.028
276.691
144.365
129.409
93.033-3.318.351

2.857.526

PROVISIONS, CONTINGENT ASSETS AND LIABILITIES

30 September

31 December

Short-term provisions

2023

2022

Warranty expense provision (i)Collective labor agreement provision (ii)
Sales Commissions Given (iii)
Sales discounts provision (iv)
Lawsuit provision (v)Other

85.91717.30034.96011.4363.269
14.429167.31154.8541.217
2.484
10.16268.71730 September
2023

31 December
2022

112.680

84.006112.680

84.006Long-term provisions
Warranty expense provision (i)

(i)

(iii)

The Group provides the warranty service for the vehicles it sells with a guarantee commitment, after thedate of sale, for periods varying according to the vehicle models.
Provision for salary differences for the year 2023 of the Collective Labor Agreement expiring as of
September 2023.
Provision for sales commissions given by the Group to its distributors.

(iv)

It consists of the price difference discounts applied by the Group to the dealers.

(v)

These are the provisions set aside by the Group for the various litigation risks.

(ii)

26

KARSAN OTOMOTİV SANAYİİ VE TİCARET A. Ş. AND ITS SUBSIDIARIESFOOTNOTES ON CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR A NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2023
(All amounts are expressed in thousand Turkish Lira (TL) unless otherwise)
)ted)

14.

COMMITMENTS
Collateral-Pledge-Mortgages (“CPM”)
As of 30 September 2023 and 31 December 2022, the tables of the Group’s collateral/pledge/mortgage position are
as follows:
TL
equivalent

Turkishlira

USDollarEURO

2.004.228
758.671
8.629

90.794120.000-

4.000-

61.34722.000
297

8.887
-

4.000
-

-

-Collateral-Pledge-Mortgage
C. Total Amount of CPMs Given by Other 3rd Parties for the
Purpose of Ordinary Commercial Activities-Collateral
1.170-Pledge-Mortgage
D. Total Amount of Other CPMs Given
i. Total Amount of CPMs Given in Favor of the Parent Shareholder-Collateral-Pledge-Mortgageii. Total Amount of CPMs Given in Favor of Other Group
Companies that are not in the Scope of Articles B and C-Collateral-Pledge-Mortgageiii. Total Amount of CPMs Given in Favor of 3rd Parties thatare not in the Scope of Article C-Collateral-Pledge-Mortgage
Total
2.812.698

-

-

-

-

-

-

-

-

-

-

-

79
-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

210.946

4.400

83.644

8.887

4.000

79

30 September 2023
A. Total Amount of CPMs Given on behalf of its Own Legal
Entity-Collateral-Mortgage-Bill guarantee-Letter of credit
B. Total Amount of CPMs Given in Favor of Partnerships Included

RON

HUF

BGN

in Full Consolidation

The ratio of other CPMs given by the Group to the Group's equity is 0% as of 30 September 2023 (31December 2022: 0%).
As of 30 September 2023, the mortgage consists of letters of guarantee amounting to TL 90.946, USD 4.400,
RON 8.887, HUF 4.000 and EURO 61.347 given to the customs offices, tax offices and other public institutions,a letter of credit which has been opened for the purchase of the raw materials and materials amounting to EURO297 EURO, but the actual import of which has not been realized, and mortgages on land and buildings in theamount of TL 120.000 TL and EURO 22.000 given within the scope of the long-term loans.

Letters and checks of guarantee received
Direct debiting system

27

30 September
2023

31 December
2022

63.20724.15370.73514.88987.36085.624KARSAN OTOMOTİV SANAYİİ VE TİCARET A. Ş. AND ITS SUBSIDIARIESFOOTNOTES ON CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR A NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2023
(All amounts are expressed in thousand Turkish Lira (TL) unless otherwise)
)ted)

14.

COMMITMENTS (continued)
Collateral-Pledge-Mortgages (“CPM”) (continued)

December 31, 2022

TL
equivalent

Turkish US Dollar
liraEURO RON

BGN

HUF

A. Total Amount of CPMs Given on behalf of its Own
Legal Entity-Collateral
2.091.936-Mortgage
558.568-Surety-Letter of credit
23.608
B. Total Amount of CPMs Given in Favor of Partnerships
IncludedinFull Consolidation-Collateral
99.655-Pledge-Mortgage
C. Total Amount of CPMs Given by Other 3rd Parties for
the Purpose of Ordinary Commercial Activities-Collateral
801-Pledge-Mortgage
D. Total Amount of Other CPMs Given
i. Total Amount of CPMs Given in Favor of the Parent Shareholder-Collateral-Pledge-Mortgageii. Total Amount of CPMs Given in Favor of Other Group
Companies that are not in the Scope of Articles B and C-Collateral-Pledge-Mortgageiii. Total Amount of CPMs Given in Favor of 3rd Parties
that are not in the Scope of Article C
Collaterl-Pledge-Mortgage
2.774.568
Total

28

108.019120.000-

5.020-

92.80922.000
1.184

9.911
-

-

4.000
-

-

-

4.999
-

-

-

-

-

-

-

-

79
-

-

-

-

-

-

-

-

-

-

-

-

-

-

228.0195.020

120.992

9.911

79

4.000

KARSAN OTOMOTİV SANAYİİ VE TİCARET A. Ş. AND ITS SUBSIDIARIESFOOTNOTES ON CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR A NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2023
(All amounts are expressed in thousand Turkish Lira (TL) unless otherwise)
)ted)

15.

ATHER ASSETS AND LIABILITIESOther Current Assets
Deferred VAT
Miscellaneous Other Current Assets

Other property, plant and equipment

31 December
2022

254.489
15.429140.897
13.794296.918

154.691

30 September
2023

31 December
2022
-

97

Deposits and guarantees given
VAT to be Deducted in Future Years

53.348Other Short-Term Liabilities
Taxes and funds payable
Miscellaneous other debts and liabilities

16.

30 September
2023

97

53.34830 September
2023
21.269611
21.88031 December
2022
28.381
1.294
29.675

1 January30 September
2022

1 July30 September
2022

REVENUE AND COST OF SALESa) SalesDomestic Sales
Overseas Sales
Other incomes
Sales returns (-)
Sales discounts (-)

1 January30 September
2023

1 July30 September
2023

1.877.509
1.889.132
87.753579.396700.255
43.8861.364.341
460.0928.386

483.614191.7641.069()(137.024)(32.018)
3.685.352(50.988)(9.252)
1.263.297(85.389)(13.594)
1.733.836(9.235)(2.976)664.18629

KARSAN OTOMOTİV SANAYİİ VE TİCARET A. Ş. AND ITS SUBSIDIARIESFOOTNOTES ON CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR A NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2023
(All amounts are expressed in thousand Turkish Lira (TL) unless otherwise)
)ted)

16.
REVENUE AND COST OF SALES(continued)

1 January30
September2023

1 July1January30-30
September Septembe
r
2023
2022

1 July30
September
2022(1.288.976)(350.932)(363.674)
67.50949.35614.677(359.744)(471.847)-(417.557)(226.568)(262.692)
92.81577.529840
192.897(388.224)-(1.017.914) (98.074)(152.756)(49.409)84.16056.841(119.233)(21.628)(919)(276.472)(2.703.631)(930.960)(1.318.932)(550.797)b) Cost of Sales
Raw material and material expenses
Direct labor costs
General production expenses
Depreciation and amortization expenses (Footnote 9-10)
Change in stocks of semi-finished products
Change in stocks of finished products
Cost of merchandise soldCost of service provided
Change of inventory impairment (Footnote 9)c) Revenues from the finance sector

1 January- 1 July-3030September
September 2023
2023

Gross profit from finance sector activities (*)(37.061)(57.710)(13.786)(86.803)19.622(86.207)(12.380)-

1 January1 July30
30 September
September
2022
2022

152.739 22.176
152.739 22.176--(*) represents earned financial leasing income.

17.

OTHER INCOME AND EXPENSES FROM OPERATING ACTIVITIESThe details of other income from the main operations for the years ended on 30 September 2023 and 2022 are as
follows:
1 January30 September
2023

1 July30
September
2023

1 January30 September
2022

Foreign exchange income from activities

499.238

81.526155.364

69.250

Incentive incomes
Delay interest income from commercial activities
Other

40.8309.181
55.617604.866

28.1089.181
8.599
127.41418.46018.620192.444

5.898
2.306
77.45430

1 July31 September
2022

KARSAN OTOMOTİV SANAYİİ VE TİCARET A. Ş. AND ITS SUBSIDIARIESFOOTNOTES ON CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR A NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2023
(All amounts are expressed in thousand Turkish Lira (TL) unless otherwise))ted)

17. OTHER INCOME AND EXPENSES FROM OPERATING ACTIVITIES (CONT’D)
The details of other expenses from the main operations for the years ended on 30 September 2023 and 2022 are as
follows:

Delay interest expense fromcommercial activities
Provision for doubtful receivable(Footnote 6)
Other

18.

1 January-30
September2023

1 July-30
September
2023

1 January-30
September2022

1 July-30
September
2022(15.893)(110)(15.893)

(470)
-

-

(15.122)105(5.687)(2.981)(31.015)(15.898)(6.157)(2.981)

INCOME TAXES (INCLUDING DEFERRED TAX ASSETS AND LIABILITIES)

Short-Term Assets Related to Current Period Tax

30 September
2023

30 September
2022

1.941

1.677

-

(1.744)

1.941

(67)

Other prepaid taxes and funds
Period income tax liability

The tax expense consists of:
1 January-30
September2023

1 July-30
September
2023

Deferred Tax Asset

91.945

Total tax income

91.945The tax expense consists of:

1 January-30
September2022

1 July-30
September
2022

49.88396.21765.60449.88396.21765.604

Corporation Tax
The Group is subject to corporate tax valid in Turkey. The necessary provisions have been made in the attachedfinancial statements for the estimated tax liabilities of the Group regarding the current period operating results.
Turkish tax legislation does not allow the parent company to file a tax return on the consolidated financial
statements of its subsidiaries. For this reason, the tax liabilities reflected in these consolidated financial
statements have been calculated separately for all companies included in the scope of consolidation.
The corporate tax rate to be accrued on the taxable corporate income is calculated over the remaining tax baseafter adding the non-deductible expenses from the tax base in the determination of the commercial profit anddeducting the tax-exempt earnings, non-taxable incomes and other discounts (if any, the previous year losses
and preferably the investment discounts used).
The corporate tax rate applied in Turkey in 2023 is 25% (2022: 23%).

31

KARSAN OTOMOTİV SANAYİİ VE TİCARET A. Ş. AND ITS SUBSIDIARIESFOOTNOTES ON CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR A NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2023
(All amounts are expressed in thousand Turkish Lira (TL) unless otherwise)
)ted)

18.
INCOME TAXES (INCLUDING DEFERRED TAX ASSETS AND LIABILITIES) (continued)
Corporation Tax (continued)

On 15 July 2023, with the “Law on Additional Motor Vehicles Tax and Amendments to Certain Laws and Decree Law No.
375 for the Compensation of Economic Losses Caused by the Earthquakes that occurred on 6 February 2023” published in
the Official Gazette, the corporate tax rate was increased from 20% to 25%. Accordingly, provision for corporate tax anddeferred tax have been calculated based on the corporate tax rate valid in the related year.
The Law No. 7061 on “Amending Some Tax Laws and Some Other Laws” was published in the Official Gazette no. 30261
on December 5, 2017. With Article 89 of this Law, the amendments are made to Article 5 of the Corporate Tax Law titled“Exceptions”. With the subparagraph (a) of the first paragraph of the article, the exemption of 75% applied to the earnings
arising from the sale of the immovables in the assets of the corporates for two full years has been reduced to 50%. This
regulation entered into force as of 5 December 2017.
In accordance with the decision on the amendment of the decision on Government Grants in Investment No. 2017/9917
published in the Official Gazette dated 22 February 2017 and numbered 29987, based on Decision no. 2012/3305 andprevious decisions, within the scope of the investment incentive certificates issued for manufacturing sector (“US-97 Code:15-37”), for the investment expenditures between 1 January 2017 and 31 December 2017, the investment contribution rates
to be applied in the contribution to the tax reductions within the scope of regional, large-scale and strategic incentive
applications shall be applied, without any action on the incentive certificate, by adding 15 points to the contribution rate ofinvestment which is effective in each region and to provide the corporate tax or income tax reduction to be as 100% in all
regions and the rate of the investment contribution amount to be applied to the earnings of the investor from other activities
during the investment period to be 100%.

Tax Advantages Obtained under the Investment Incentive System:

R&D Incentives
The Company capitalizes the R&D expenditures it has made within the scope of the law numbered 5746 in its legal books.
As of 30 September 2023, it carries the R&D deduction amounting to TL 434,164 into the next years. As of 30 September
2023, TL 108,541 was transferred to the consolidated financial statements as a deferred tax asset.

Investment Incentives
The Company's earnings from investments subject to incentive certificate are subject to corporate tax at reduced rates
starting from the accounting period in which the investment is partially or fully operational until the solid amount of theinvestment is reached. In this context, as of 30.09.2023, the Company has a tax advantage of TL 374,408 that it can benefit
from in the future. As of 30.09.2023, TL 114,568 was transferred to the consolidated financial statements as a deferred tax
asset.

32

KARSAN OTOMOTİV SANAYİİ VE TİCARET A. Ş. AND ITS SUBSIDIARIESFOOTNOTES ON CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR A NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2023
(All amounts are expressed in thousand Turkish Lira (TL) unless otherwise)
)ted)

18.

INCOME TAXES (INCLUDING DEFERRED TAX ASSETS AND LIABILITIES) (continued)
Deferred Tax

The Group recognizes the deferred tax assets and liabilities for temporary timing differences arising from thedifferences between the tax base legal financial statements and the financial statements prepared in accordancewith TFRS. These differences are generally due to the fact that some income and expense items take place indifferent periods in the tax base financial statements and the financial statements prepared in accordance with
TFRS, and these differences are stated below.
The tax rate used in the calculation of the deferred tax assets and liabilities is 20% (2022: 23%) over the temporary
timing differences that are expected to reverse in 2023, and 20% (2022: 23%) over the temporary timing differencesthat are expected to reverse after 2023.
The subsidiaries with the deferred tax assets are not netted off with the subsidiaries with the deferred tax liabilities
and are shown separately, since the businesses in Turkey cannot declare the consolidated tax returns.

30 September
2023

31 December
2022

58.58613.895

Revaluation and differences on depreciation of property, plant andequipment / amortization of other intangible assets(386.750)(135.807)

Investment incentive
Income accruals
Derivative instruments
Warranty expense provision
Severance pay provisions
Deferred tax assets arising from cash capital increase
Impact of stock adjustments
Adjustments for bonds
Lawsuit provision
Permission and fee provision
Provision for sales discounts
Adjustments to trade receivables
Hedge accounting adjustments
Other

223.110(22.545)(57.595)
82.70431.72349.244(3.216)
6.198
18.54227.164-173.855(1.412)(31.076)
27.77226.33339.396
4.398
263
497
2.666
243
21.46421.5638.617

27.195172.667

Deferred tax assets / (liabilities):
Deductible financial losses

As of 30 September 2023, the Group has an accumulated tax loss of TL 243,817 (31 December 2022: TL 69,475).
Within the framework of the five-year projections made by the Group management regarding whether it will bepossible to obtain the taxable profit before the accumulated tax losses expire or not, the deferred tax assets of TL
243,817 (31 December 2022: TL 69,475) are reflected in the financial statements for the deferred tax losses of TL
60,954 (31 December 2022: TL 13,815), which it considers likely to be reused.
33

KARSAN OTOMOTİV SANAYİİ VE TİCARET A. Ş. AND ITS SUBSIDIARIESFOOTNOTES ON CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR A NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2023
(All amounts are expressed in thousand Turkish Lira (TL) unless otherwise)
)ted)

18.

INCOME TAXES (INCLUDING DEFERRED TAX ASSETS AND LIABILITIES) (continued)
Deferred Tax (continued)
31
December
2022

30 September
2023
expire in 2023
expire in 2024
expire in 2025
expire in 2026
expire in 2027

33.105
1.148
6.594
68.53833.105
1.148
6.594
28.628109.38569.475

As of 30 September 2023, the movement of the deferred tax assets / (liabilities) for the year ended is given below:
30 September
2023

31
December
2022

Opening balance restated as of January 1

172.667

97.334

Recognized in the profit or loss statement

91.945128.982(243.858)(53.649)

Change occurring due to share-based transactions

6.441

-

Closing balance as of September 30

27.195172.667

Movement of the deferred tax asset / (liability):

Recognized under equity

19.

EARNINGS / (LOSS) PER SHARE

The weighted average of Group shares for the periods ended on 30 September 2023 and 2022 and calculations of 1
full TL equivalent earnings per share are as follows (assuming that the cash increases do not include bonus
shares):1 January-1 July-30
30 SeptemberSeptember
2023 2023
Weighted average number of shares outstanding

90.000.000.000

1 January30September2023

1 January31 March
2022

90.000.000.000

90.000.000.000

90.000.000.000

Net profit for the period of the parent (one thousand TL)

8.699(65.789)

18.853,000

2.146

Earnings per share (kr) (per share)

0,010(0,073)

0,021

0,002

34

KARSAN OTOMOTİV SANAYİİ VE TİCARET A. Ş. AND ITS SUBSIDIARIESFOOTNOTES ON CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR A NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2023
(All amounts are expressed in thousand Turkish Lira (TL) unless otherwise)
)ted)

20.

NATURE AND LEVEL OF RISKS ARISING FROM FINANCIAL INSTRUMENTS
Market risk management
Due to its activities, the Group is exposed to the financial risks related to the changes in foreign exchange rates
and interest rates.
Market risks encountered at the group level are measured on the basis of the sensitivity analysis.
In the current period, there has been no change in the market risk to which the Group is exposed or the method ofhandling the risks encountered or the method used to measure these risks compared to the previous year.

Currency risk management
The transactions in foreign currencies cause an exchange rate risk. The currency risk is managed with the forward
foreign exchange purchase/sell contracts based on the approved policies.
The distribution of the Group’s monetary and non-monetary assets in foreign currency and monetary and nonmonetary liabilities as of the balance sheet date is as follows:
30 September 2023
TL Equivalent(Functional
currency)

US Dollar

EURO

RON

GBP

Other

1. Trade Receivable

1.576.887

4.928

49.051

3.053

2

9

2a. Monetary Financial Assets

318.547591

10.346

-

59

1

-

-

-

-

-

-

2b. Non-Monetary Financial Assets
3. Other
4. CURRENT ASSETS

5.400
1.900.834

-

186

-

-

-

5.519

59.583

3.053

61

10

5. Trade Receivables

-

-

-

-

-

-

6a. Monetary Financial Assets

-

-

-

-

-

-

6b. Non-Monetary Financial Assets

-

-

-

-

-

-

6.908
6.908

-

238
238

-

-

-

1.907.742

5.519

59.821

3.053

61

10

10. Trade Payables

556.954958

13.334

4.121

51

37

11. Financial Liabilities

2.080.032-

71.521

-

-

-

2.030

-

70

-

-

-

2.639.016

958

84.925

4.121

51

37

14. Trade Payables

-

-

-

-

-

-

15. Financial Liabilities--

25.761---16a. Other Monetary Liabilities

-

-

-

-

-

-

16b. Other Non-Monetary Liabilities
17. LONG-TERM LIABILITIES--

25.761---

7. Other
8. PROPERTY, PLANT AND EQUIPMENT
9. TOTAL ASSETS

12a. Other Monetary Liabilities
12b. Other Non-Monetary Liabilities
13. SHORT-TERM LIABILITIES

18. TOTAL LIABILITIES

2.639.016

958

110.686

4.121

51

37

20. Net foreign currency asset liability position (9-18+19)(731.274)

4.561(50.865)(1.068)10(27)

21. Monetary items net foreign currency asset / liability position(1+2a+5+6a-10-11-12a-14-15-16a)(743.582)

4.561(51.289)(1.068)10(27)

23. Amount of the hedged portion of the foreign currency assets

1.914.730-

68.837---

25. Export

2.035.401

5.036

80.870---26. Import

983.5422.666

29..591

-

193

6

35

KARSAN OTOMOTİV SANAYİİ VE TİCARET A. Ş. AND ITS SUBSIDIARIESFOOTNOTES ON CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR A NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2023
(All amounts are expressed in thousand Turkish Lira (TL) unless otherwise)
)ted)

20.

NATURE AND LEVEL OF THR RISKS ARISING FROM THE FINANCIAL INSTRUMENTS(continued) Currency risk management (continued)
31 December 2022
TL Equivalent(Functional
currency)

USD

EURO

RON

GBP

Other

1. Trade Receivable

1.241.218

323

53.35542.448-107

2a. Monetary Financial Assets

30.654

22

1.488

133

1

-

2b. Non-Monetary Financial Assets

-

-

-

-

-

3. Other

70.450

-

3.534

-

-

-

4. CURRENT ASSETS

1.342.322

345

42.58142.581

1

107

5. Trade Receivables

125.498

-

6.295

-

-

-

-

-

-

-

-

-

6a. Monetary Financial Assets

-

-

-

-

-

-

7. Other
8. PROPERTY, PLANT AND EQUIPMENT

282.044407.542-

14.14820.444---

9. TOTAL ASSETS

1.749.864

345

42.58142.581

1

107

10. Trade Payables

483.5072.554

21.510

296

8

1.822

11. Financial Liabilities

1.635.434

1.500

80.484

-

-

-

-

-

-

-

-

-

2.118.941

4.054

296

296

8

1.822

-

-

-

-

-

-

603.914-30.240

-

-

-

-

-

-

-

-

-

16b. Other Non-Monetary Liabilities
17. LONG-TERM LIABILITIES

603.914-30.240---18. TOTAL LIABILITIES

2.722.855

4.054

132.234

296

8

1.822

20. Net foreign currency asset liability position (9-18+19)(972.991)(3.708)(53.413)42.285(6)(1.715)

21. Monetary items net foreign currency asset / liability position(1+2a+5+6a-10-11-12a-14-15-16a)(1.325.485)(3.708)(71.095)

42.285(6)(1.715)

23. Amount of the hedged portion of the foreign currency assets

1.415.196-

70.991---

25. Export

1.718.989

6

84.35335.473-4.793

26. Import

837.100

6.305

41.311

-

200

8.226

6b. Non-Monetary Financial Assets

12a. Other Monetary Liabilities
12b. Other Non-Monetary Liabilities
13. SHORT-TERM LIABILITIES
14. Trade Payables
15. Financial Liabilities
16a. Other Monetary Liabilities

Sensitivity to currency risk
The Group is exposed to the currency risk mainly in USD and EURO.
The table below shows the Group’s sensitivity to 10% increase or decrease in USD and EURO exchange rates.
The 10% rate is the rate used when reporting the currency risk within the Group to the senior managers, and thesaid rate represents the possible change expected by the management in the foreign exchange rates. The sensitivity
analysis includes only outstanding foreign currency denominated monetary items at year-end and shows the effectsof 10% change in foreign currency exchange rates at the end of the year. This analysis includes the foreign
borrowings, as well as non-functional currency loans of borrower and creditor parties, which are used for foreign
operations within the Group. A positive value represents an increase in profit/loss and other equity items.
The Group management is of the opinion that the sensitivity analysis does not fully express the foreign currency
risk since the currency risk analysis at the end of the year does not reflect the currency risk that occurred during
the year.
36

KARSAN OTOMOTİV SANAYİİ VE TİCARET A. Ş. AND ITS SUBSIDIARIESFOOTNOTES ON CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR A NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2023
(All amounts are expressed in thousand Turkish Lira (TL) unless otherwise))ted)

20. NATURE AND LEVEL OF THR RISKS ARISING FROM THE FINANCIAL INSTRUMENTS(continued) Currency risk management (continued)

30 September 2023
Profit / loss

Equities

Appreciationof foreign
currency

Depreciationof foreign
currency

Appreciationof foreign
currency

Depreciationof foreign
currency

12.487(12.487)

12.487(12.487)

-

-

-

-

12.487(12.487)

12.487(12.487)

4 - EURO net asset / liability(147.664)

147.664(147.664)

147.664

5- The portion hedged against the EURO risk (-)

191.128(191.128)191.128(191.128)

6- EURO net effect (4+5)

43.464(43.464)

43.464(43.464)

(620)

620

(620)

620

In case of 10% appreciation of USD against TL
1 - USD net asset / liability
2- The portion hedged against the USD risk (-)
3- USD net effect (1 +2)
In case of 10% appreciation of EURO against TL

In case of 10% appreciation of RON against TL
7 - RON currency net asset / liability
8- The portion hedged against the RON exchange rate risk ()9- RON Currency Assets net effect (7 +8)

-

-

-

-

(620)

620

(620)

620

33

(33)

33

(33)

In case of 10% appreciation of GBP against TL
10 - GBP currency net asset / liability
11- The portion hedged against the GBP exchange rate risk(-)
12- GBP Currency Assets net effect (10 +11)

-

-

-

-

33

(33)

33

(33)

(80)

80

(80)

80

In case of 10% appreciation of Other against TL
13 - Other currency net asset / liability
14- The portion hedged against the Other exchange rate risk(-)
15- Other Currency Assets net effect (13 +14)
TOTAL (3 + 6 + 9 + 12 + 15)

-

-

-

-

(80)

80

(80)

80

55.284(55.284)

55.284(55.284)37

KARSAN OTOMOTİV SANAYİİ VE TİCARET A. Ş. AND ITS SUBSIDIARIESFOOTNOTES ON CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR A NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2023
(All amounts are expressed in thousand Turkish Lira (TL) unless otherwise))ted)

31 December 2022
Profit / loss

Equities

Appreciationof foreign
currency

Depreciation offoreigncurrency

Appreciation offoreign currency

Depreciation offoreign currency(6.933)6.933(6.933)6.933(6.933)6.933(6.933)

6.933

In case of 10% appreciation of USD against TL
1 - USD net asset / liability
2- The portion hedged against the USD risk (-)
3- USD net effect (1 +2)
In case of 10% appreciation of EURO against TL
4 - EURO net asset / liability(106.478)

106.478(106.478)

106.478

5- The portion hedged against the EURO risk (-)

141.520(141.520)

141.520(141.520)

6- EURO net effect (4+5)

35.042(35.042)35.042(35.042)(16.940)

16.940In case of 10% appreciation of RON against TL
7 - RON currency net asset / liability

16.9408- The portion hedged against the RON exchange rate risk (-)
9- RON Currency Assets net effect (7 +8)--(16.940)--

16.940(16.940)

16.940(16.940)

(13)

13

193

(193)

(13)

13

193

(193)

(3.465)3.465(3.434)

3.434

15- Other Currency Assets net effect (13 +14)

(3.465)3.465(3.434)

3.434

TOTAL (3 + 6 + 9 + 12 + 15)

41.571(41.571)

41.808(41.808)

In case of 10% appreciation of GBP against TL
10 - GBP currency net asset / liability
11- The portion hedged against the GBP exchange rate risk (-)
12- GBP Currency Assets net effect (10 +11)
In case of 10% appreciation of Other against TL
13 - Other currency net asset / liability
14- The portion hedged against the Other exchange rate risk (-)

38

KARSAN OTOMOTİV SANAYİİ VE TİCARET A. Ş. AND ITS SUBSIDIARIESFOOTNOTES ON CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR A NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2023
(All amounts are expressed in thousand Turkish Lira (TL) unless otherwise))ted)

21. FINANCIAL INSTRUMENTS

30 September 2023
Financial assets
Cash and cash equivalents
Trade receivables
Trade receivables from relatedparties
Financial leasing receivables
Financial investments
Other receivables
Derivative instruments

Financial
Amounts at fair value Amounts at fairassets shown atvalue through othercomprehensive
amortized value income
through profit orloss
206.591
1.641.652
546
428.640
127.325
239.034--

Financial liabilities
Financial debts
Payables from leasingtransactions
Trade payables
Receivables to related parties
Other liabilities

Book value--

206.591
1.641.652
546
428.640207.675
239.034
197.845---(3.550.076)(3.550.076)

12

-

-

-

(15.035)(721.475)(95.875)(21.880)(15.035)(721.475)(95.875)(21.880)7
6
15

Amounts at fairvalue throughprofit or loss

Financia
l liabilities shownat amortized value

Book valueNote44.7311.824.116
702
352.494--44.7311.824.116
702
352.494366
5
718.855137.917-86.743-

169.334
144.754-274.932
137.917144.75430
829

Financial liabilities
Financial debts

-

-

-

(3.097.669)(3.097.669)

30

Payables from leasing transactions
Trade payables
Receivables to related parties
Other liabilities

-

-

-

(25.971)(912.160)(48.184)(29.675)(25.971)(912.160)(48.184)(29.675)

13
6
5
18

Financial assets
Cash and cash equivalents
Trade receivables
Trade receivables from relatedparties leasing receivables
Financial
Financial investments
Other receivables
Derivative instruments

Note

80.350197.845

Amounts at fairvalue throughothercomprehensive
income-31 December 2022

Financia
l assets shown atamortized value

Financialliabilities shown atamortized value

39

7
6

KARSAN OTOMOTİV SANAYİİ VE TİCARET A. Ş. AND ITS SUBSIDIARIESFOOTNOTES ON CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR A NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2023
(All amounts are expressed in thousand Turkish Lira (TL) unless otherwise))ted)

22. EVENTS AFTER THE REPORTING PERIOD•

On 04.10.2023, our company announced the bookbuilding notification dated October 4-5, 2023 in the PDP
for the issue of commercial papers with a nominal value of 150.000.000 TL, 364-day maturity and quarterly
coupon payments, to be issued to the qualified investors.

•

On 06.10.2023, our company announced the special event disclosure regarding the Completion of Issue of
the Commercial Paper in an amount of TL 350 Million in the PDP.

•

On 12.10.2023, our company announced the Real Estate Valuation Report prepared by Vakıf GayrimenkulDeğerleme A.Ş. in the PDP.

•

On 16.10.2023, our company announced the special event disclosure for the Senior Management Change in the PDP.

•

On 17.10.2023, our company revised and announced in the PDP the Company General Information form
with the change for the senior management.

•

On 03.11.2023, our company announced the Expansion of our Distributorship Agreement for the USA in the
PDP.

40