CONVENIENCE TRANSLATION INTO ENGLISH OF CONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH

Transcription

1 CONVENIENCE TRANSLATION INTO ENGLISH OF CONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH ANADOLU EFES BİRACILIK VE MALT SANAYİİ ANONİM ŞİRKETİ CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS AS OF JUNE 30, TOGETHER WITH INDEPENDENT AUDITOR S REVIEW REPORT

2

3

4 TABLE OF CONTENTS Page Consolidated Interim Statement of Financial Position Consolidated Interim Income Statement... 3 Consolidated Interim Statement of Other Comprehensive Income... 4 Consolidated Interim Statement of Changes in Equity... 5 Consolidated Interim Statement of Cash Flows... 6 Condensed Notes to the Consolidated Interim Financial Statements Note 1 Group s Organization and Nature of Activities Note 2 Basis of Presentation of Consolidated Interim Financial Statements Note 3 Segment Reporting Note 4 Cash and Cash Equivalents Note 5 Short and Long Term Borrowings Note 6 Derivative Instruments Note 7 Other Receivables and Payables Note 8 Investment in Associates Note 9 Investment Properties Note 10 Property, Plant and Equipment Note 11 Other Intangible Assets Note 12 Goodwill Note 13 Equity Note 14 Commitments and Contingencies Note 15 Prepaid Expenses and Deferred Income Note 16 Other Assets and Liabilities Note 17 Other Operating Income / Expenses Note 18 Income / Expense from Investing Activities Note 19 Finance Income / Expense Note 20 Tax Assets and Liabilities Note 21 Earnings per Share Note 22 Distribution of Earnings Note 23 Related Party Balances and Transactions Note 24 Nature and Level of Risks Arising from Financial Instruments Note 25 Financial Instruments Note 26 Explanatory Information on Statement of Cash Flows Note 27 Events after Reporting Period... 35

5 CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION AS AT JUNE 30, Reviewed Audited ASSETS Notes June 30, December 31, Cash and Cash Equivalents Financial Investments Trade Receivables Trade Receivables Due from Related Parties Trade Receivables Due from Third Parties Other Receivables Other Receivables from Third Parties Derivative Financial Assets Inventories Prepaid Expenses Current Tax Assets Other Current Assets Other Current Assets from Related Parties Other Current Assets from Third Parties Current Assets Financial Investments Trade Receivables Trade Receivables Due from Third Parties Other Receivables Other Receivables from Third Parties Investments in Subsidiaries, Joint Ventures and Associates Investment Property Property, Plant and Equipment Intangible Assets Goodwill Other Intangible Assets Prepaid Expenses Deferred Tax Asset Other Non-Current Assets Non-Current Assets TOTAL ASSETS The accompanying notes form an integral part of these condensed consolidated interim financial statements. (1)

6 CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION AS AT JUNE 30, Reviewed Audited LIABILITIES Notes June 30, December 31, Current Borrowings Current Portion of Non-Current Borrowings Trade Payables Trade Payables to Related Parties Trade Payables to Third Parties Employee Benefit Obligations Other Payables Other Payables to Third Parties Derivative Financial Liabilities 6-65 Deferred Income Current Tax Liabilities Current Provisions Current Provisions for Employee Benefits Other Current Provisions Other Current Liabilities Current Liabilities Long-Term Borrowings Trade Payables Trade Payables to Third Parties Other Payables Other Payables to Third Parties Deferred Income Non-Current Provision Non-Current Provision for Employee Benefits Deferred Tax Liabilities Other Non-Current Liabilities Non-Current Liabilities Equity Attributable to Equity Holders of the Parent Issued Capital Inflation Adjustment on Capital Share Premium (Discount) Put Option Revaluation Fund Related with Non-controlling Interests Other Accumulated Comprehensive Income (Loss) that will not be Reclassified in Profit or Loss 13 (23.417) (20.249) -Revaluation and Remeasurement Gain/Loss (23.417) (20.249) Other Accumulated Comprehensive Income (Loss) that will be Reclassified in Profit or Loss Translation Differences Gains (Losses) on Hedge Restricted Reserves Appropriated from Profits Other Reserves 13 ( ) ( ) Prior Years Profits or Losses Current Period Net Profit or Losses (70.795) Non-Controlling Interests Total Equity TOTAL LIABILITIES The accompanying notes form an integral part of these condensed consolidated interim financial statements. (2)

7 CONSOLIDATED INTERIM INCOME STATEMENT FOR THE SIX-MONTH PERIOD ENDED JUNE 30, Reviewed Reviewed Notes Revenue Cost of Sales ( ) ( ) ( ) ( ) GROSS PROFIT (LOSS) General Administrative Expenses ( ) ( ) ( ) ( ) Sales, Distribution and Marketing Expenses ( ) ( ) ( ) ( ) Other Income from Operating Activities Other Expenses from Operating Activities 17 ( ) ( ) (87.677) (40.897) PROFIT (LOSS) FROM OPERATING ACTIVITIES Investment Activity Income Investment Activity Expenses 18 (8.986) (4.248) (10.703) (8.258) Income/ (Loss) from Associates 8 (10.432) (8.738) (6.823) (3.398) PROFIT (LOSS) BEFORE FINANCING INCOME (EXPENSE) Finance Income Finance Expenses 19 ( ) ( ) ( ) ( ) PROFIT (LOSS) FROM CONTINUING OPERATIONS Tax (Expense) Income, Continuing Operations ( ) (69.612) (95.923) (66.735) - Current Period Tax (Expense) Income (91.599) (45.709) (75.740) (51.969) - Deferred Tax Income (Expense) (16.707) (23.903) (20.183) (14.766) PROFIT/(LOSS) Profit/(Loss) Attributable to - Non-Controlling Interest Owners of Parent Earnings / (Loss) Per Share (Full TRL) 21 0,1523 0,2957 0,3921 0,2903 The accompanying notes form an integral part of these condensed consolidated interim financial statements. (3)

8 CONSOLIDATED INTERIM STATEMENT OF OTHER COMPREHENSIVE INCOME FOR THE SIX-MONTH PERIOD ENDED JUNE 30, Reviewed Reviewed PROFIT/(LOSS) OTHER COMPREHENSIVE INCOME Other Comprehensive Income that will not be Reclassified to Profit or Loss (3.168) (2.904) (1.618) (1.381) Gains (Losses) on Remeasurements Defined Benefit Plans (3.960) (3.630) (2.022) (1.726) Taxes Relating to Components of Other Comprehensive Income that will not be Reclassified to Other Profit or Loss - Deferred Tax Income (Expense) Other Comprehensive Income that will be Reclassified to Profit or Loss ( ) Translation Differences ( ) Other Comprehensive Income (Loss) on Cash Flow Hedge (41.814) (42.633) (15.198) (1.322) Taxes Relating to Components of Other Comprehensive Income that will be Reclassified to Other Profit or Loss Deferred Tax Income (Expense) OTHER COMPREHENSIVE INCOME (LOSS) ( ) TOTAL COMPREHENSIVE INCOME (LOSS) ( ) Total Comprehensive Income Attributable to - Non-Controlling Interest (17.436) Owners of Parent ( ) The accompanying notes form an integral part of these condensed consolidated interim financial statements. (4)

9 CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY FOR THE SIX-MONTH PERIOD ENDED JUNE 30, Issued Capital Inflation Adjustment on Capital Share Premium/ Discount Put Option Revaluation Fund Related with Noncontrolling Interests Other Accumulated Comprehensive Income that will not be reclassified in Profit or Loss Revaluation and Remeasurement Gain/ (Loss) (**) Other Accumulated Comprehensive Income that will be reclassified in Profit or Loss Translation Differences Gains (Losses) on Hedge Restricted Reserves Appropria ted from Profits Other Reserves Retained Earnings Prior Years Profits or Losses Current Period Net Profit or Loss Equity Attributable to Equity Holders of the Parent Beginning Balances (15.128) ( ) ( ) Non- Controlling Interests Total Equity Previous period (1 January ) Transfers ( ) Total Comprehensıve Income (Loss) (1.618) (23.791) Profit (Loss) Other Comprehensive Income (Loss) (1.618) (23.791) (21.040) Dividends ( ) - ( ) (14.957) ( ) Increase (Decrease) from Other Changes (*) (50) - Ending Balances (16.746) ( ) Current Period (1 January ) Beginning Balances (20.249) ( ) (70.795) Transfers - - (8.686) (76.616) Total Comprehensıve Income (Loss) (3.168) (18.899) Profit (Loss) Other Comprehensive Income (Loss) (3.168) (18.899) (17.687) Dividends - - (86.864) (58.202) - ( ) (24.929) ( ) Increase (Decrease) from Other Changes (*) (1.275) (1.275) Ending Balances (23.417) ( ) (*) Non-controlling interest share put option liability. (**) Gains (Losses) on Remeasurements of Defined Benefit Plans. The accompanying notes form an integral part of these condensed consolidated interim financial statements. (5)

10 CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS FOR THE SIX-MONTH PERIOD ENDED JUNE 30, Reviewed 1 January- 1 January- Notes June 30, June 30, CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES Profit/ (Loss) for the period Adjustments to Reconcile Profit (Loss) Adjustments for Depreciation and Amortization Expense Adjustments for Impairment Loss / (Reversal) Adjustments for Provisions Adjustments for Interest (Income) Expenses Adjustments for Unrealised Foreign Exchange Losses (Gains) (66.626) Adjustments for Fair Value (Gains) Losses on Derivative Financial Instruments Adjustments for Undistributed Profits of Investments Accounted for Using Equity Method Adjustments for Tax (Income) Expenses Other Adjustments for Non-Cash Items Adjustments for Losses (gains) on Disposal of Non-Current Assets 18 (4.833) (12.889) Other Adjustments to Reconcile Profit (loss) Changes in Working Capital ( ) ( ) Adjustments for Decrease (Increase) in Accounts Receivables ( ) ( ) Adjustments for Decrease (Increase) in Other Receivables Related with Operations (79.774) Adjustments for Decrease (Increase) in Inventories ( ) (55.206) Adjustments for increase (decrease) in Trade Accounts Payable Adjustments for increase (decrease) in Other Operating Payables Cash Flows from (used in) Operations Payments Related with Provisions for Employee Benefits (20.414) (17.264) Income Taxes (Paid) Return (14.663) (26.471) CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES ( ) ( ) Cash Outflows Arising From Purchase of Shares or Capital Increase of Associates and/or Joint Ventures 8 (17.845) (14.075) Proceeds from Sales of Property, Plant, Equipment and Intangible Assets Cash Outflows Arising from Purchase of Property, Plant, Equipment and Intangible Assets 26 ( ) ( ) CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES ( ) ( ) Proceeds from Borrowings Repayments of Borrowings ( ) ( ) Income (Loss) from Cash Flow Hedge (43.095) (24.480) Dividends Paid 22 ( ) ( ) Interest Paid ( ) ( ) Interest Received Other inflows (outflows) of cash NET (DECREASE) / INCREASE IN CASH AND CASH EQUIVALENTS BEFORE CURRENCY TRANSLATION DIFFERENCES ( ) Effect Of Translation Differences On Cash and Cash Equivalents (34.555) 957 NET (DECREASE) / INCREASE IN CASH AND CASH EQUIVALENTS (15.472) ( ) CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD The accompanying notes form an integral part of these condensed consolidated interim financial statements. (6)

11 AS AT JUNE 30, NOTE 1. GROUP S ORGANIZATION AND NATURE OF ACTIVITIES General Anadolu Efes Biracılık ve Malt Sanayii A.Ş. (Anadolu Efes, the Company) was established in İstanbul in Certain shares of Anadolu Efes are listed on the Borsa İstanbul (BIST). The registered office of the Company is located at the address Bahçelievler Mahallesi Şehit İbrahim Koparır Caddesi No: 4 Bahçelievler İstanbul. The Company, its subsidiaries and joint ventures will be referred to as the Group. The average number of permanent personnel employed in the Group is (December 31, ). The condensed consolidated financial statements of the Group approved by the Board of Directors of the Company and signed by the Chief Financial Officer, Onur Çevikel and Finance Director, Burhan Tanık were issued on August 8,. General Assembly and specified regulatory bodies have the right to make amendments to statutory financial statements after issue. Nature of Activities of the Group The operations of the Group consist of production, bottling, selling and distribution of beer under a number of trademarks and also production, bottling, selling and distribution of sparkling and still beverages with The Coca- Cola Company trademark. The Group owns and operates fourteen breweries (three in Turkey, six in Russia and five in other countries), six malt production facilities (two in Turkey, four in Russia) and also ten facilities in Turkey, fifteen facilities in other countries for sparkling and still beverages production. The Group also has joint control over Anadolu Etap Penkon Gıda ve Tarım Ürünleri San. ve Tic. A.Ş. (Anadolu Etap), which undertakes production and sales of fruit juice concentrates and purees and fresh fruit sales in Turkey and Syrian Soft Drink Sales & Dist. LLC (SSDSD), which undertakes distribution and sales of sparkling and still beverages in Syria. List of Shareholders As of June 30, and December 31,, the composition of shareholders and their respective percentage of ownership can be summarized as follows: June 30, December 31, Amount (%) Amount (%) Yazıcılar Holding A.Ş , ,61 Özilhan Sınai Yatırım A.Ş , ,48 Anadolu Endüstri Holding A.Ş. (AEH) , ,96 AB Inbev Harmony Ltd. (1) , ,00 Publicly traded and other , , , ,00 Capital structure of AEH, the shareholder of the Company, comprises of Yazıcılar Holding A.Ş. (68%) and Özilhan Sınai Yatırım A.Ş. (32%); consequently, as of June 30, Yazıcılar Holding A.Ş. and Özilhan Sınai Yatırım A.Ş. together with AB Inbev Harmony Ltd. represent directly and indirectly more than half of the voting rights of the Company according to the shareholder agreement. (1) As of June 30,, SABMiller Harmony Ltd. has changed its name to AB Inbev Harmony Ltd.. (7)

12 AS AT JUNE 30, NOTE 1. GROUP S ORGANIZATION AND NATURE OF ACTIVITIES (continued) List of Subsidiaries The subsidiaries included in the consolidation and their effective shareholding rates at June 30, and December 31, are as follows: Subsidiary Country Principal Activity Segment Effective Shareholding And Voting Rights % June 30, December 31, Efes Breweries International N.V. (EBI) The Netherlands Facilitating foreign investments in breweries International Beer 100,00 100,00 JSC Moscow-Efes Brewery (Efes Moscow) Russia Production and marketing beer International Beer 100,00 100,00 LLC Vostok Solod (1) Russia Production of malt International Beer 100,00 100,00 JSC FE Efes Kazakhstan Brewery (Efes Kazakhstan) Kazakhstan Production and marketing of beer International Beer 100,00 100,00 International Beers Trading LLP (IBT) Kazakhstan Marketing of beer International Beer 100,00 100,00 Efes Vitanta Moldova Brewery S.A. (Efes Moldova) Moldova Production of beer and low alcoholic drinks International Beer 96,85 96,85 Euro-Asien Brauerein Holding GmbH (Euro-Asien) Germany Investment company of EBI International Beer 100,00 100,00 JSC Lomisi (Efes Georgia) Georgia Production, marketing and sales of beer and carbonated soft drinks International Beer 100,00 100,00 PJSC Efes Ukraine (Efes Ukraine) Ukraine Production and marketing of beer International Beer 99,94 99,94 Efes Trade BY FLLC (Efes Belarus) Belarus Market development International Beer 100,00 100,00 LLC Efes Solod (1) Russia Production of malt International Beer 100,00 100,00 LLC Efes Ukraine Ukraine Selling and distribution of beer International Beer 100,00 100,00 Efes Pazarlama ve Dağıtım Ticaret A.Ş. (Ef-Pa) (2) Turkey Marketing and distribution company of the Group Turkey Beer 100,00 100,00 Cypex Co. Ltd. (Cypex) Northern Cyprus Marketing and distribution of beer Other 99,99 99,99 Anadolu Efes Technical and Management The Netherlands Consultancy N.V. (AETMC) (4) Providing technical assistance Antilles Other 100,00 100,00 Efes Holland Technical Management Consultancy B.V. (EHTMC) The Netherlands Leasing of intellectual property and similar products Other 100,00 100,00 Efes Deutschland GmbH (Efes Germany) Germany Marketing and distribution of beer Other 100,00 100,00 Coca-Cola İçecek A.Ş. (CCİ) (3) Turkey Production of Coca-Cola products Soft Drinks 50,26 50,26 Coca-Cola Satış ve Dağıtım A.Ş. (CCSD) Turkey Distribution and selling of Coca-Cola, Doğadan and Mahmudiye Soft Drinks products 50,25 50,25 Mahmudiye Kaynak Suyu Ltd. Şti. (Mahmudiye) Turkey Filling and selling of natural spring water Soft Drinks 50,26 50,26 J.V. Coca-Cola Almaty Bottlers LLP (Almaty CC) Kazakhstan Production, distribution and selling of and distribution of Coca Soft Drinks Cola products 50,26 50,26 Tonus Turkish-Kazakh Joint Venture LLP (Tonus) Kazakhstan Investment company of CCİ Soft Drinks 50,26 50,26 Azerbaijan Coca-Cola Bottlers LLC (Azerbaijan CC) Azerbaijan Production, distribution and selling of Coca Cola products Soft Drinks 50,19 50,19 Coca-Cola Bishkek Bottlers CJSC (Bishkek CC) Krygyzstan Production, distribution and selling of Coca Cola products Soft Drinks 50,26 50,26 CCI International Holland B.V. (CCI Holland) The Netherlands Investment company of CCİ Soft Drinks 50,26 50,26 CC for Beverage Industry Limited (CCBL) Iraq Production, distribution and selling of Coca Cola products Soft Drinks 50,26 50,26 The Coca-Cola Bottling Company of Jordan Ltd. Soft Drinks Jordan Production, distribution and selling of Coca Cola products (Jordan CC) 45,23 45,23 Coca-Cola Beverages Pakistan Ltd (CCBPL) Pakistan Production, distribution and selling of Coca Cola products Soft Drinks 24,96 24,96 Turkmenistan Coca-Cola Bottlers Ltd. Soft Drinks Turkmenistan Production, distribution and selling of Coca Cola products (Turkmenistan CC) 29,90 29,90 Waha Beverages B.V. The Netherlands Investment company of CCİ Soft Drinks 40,22 40,22 Al Waha for Soft Drinks, Juices, Mineral Water, Plastics, and Plastic Caps Production LLC (Al Waha) Iraq Production, distribution and selling of Coca Cola products Soft Drinks 40,22 40,22 Coca-Cola Beverages Tajikistan LLC Soft Drinks Tajikistan Production, distribution and selling of Coca Cola products (Coca Cola Tacikistan) 50,26 50,26 Joint Ventures Country Principal Activity Segment Effective Shareholding And Voting Rights % June 30, December 31, Anadolu Etap Penkon Gıda ve Tarım Ürünleri San. ve Tic. A.Ş. (Anadolu Etap) Turkey Sales of fruit juice concentrates and purees and fresh fruit sales Other 33,33 33,33 Syrian Soft Drink Sales & Dist. LLC (SSDSD) Syrian Distribution and sales of Coca-Cola products Soft Drinks r 25,13 25,13 (1) Subsidiaries of Efes Moscow. (2) The Company s beer operations in Turkey form the Turkey Beer Operations together with Ef-Pa. (3) Shares of CCİ are currently traded on BIST. (4) As of June 30,, AETMC adopted a plan of liquidation. (8)

13 AS AT JUNE 30, NOTE 1. GROUP S ORGANIZATION AND NATURE OF ACTIVITIES (continued) Work Environments and Economic Conditions of Subsidiaries and Joint Ventures in Foreign Countries Certain countries, in which consolidated subsidiaries and joint ventures operate, have undergone substantial political and economic changes in recent years. Accordingly, such markets do not possess well-developed business infrastructures and the Group s operations in such countries might carry risks, which are not typically associated with those in more developed markets. Uncertainties regarding the political, legal, tax and/or regulatory environment, including the potential for adverse changes in any of these factors, could significantly affect the commercial activities of subsidiaries and joint ventures. The Group management assessed the effects of deterioration in macroeconomic conditions in Ukraine, devaluation of Ukrainian Hryvnia, ongoing political instability in Ukraine, and military operations in the region. Consequently, the Group management did not anticipate any impairment related with the carrying value of International Beer in consolidated interim financial statements. NOTE 2. BASIS OF PRESENTATION OF CONSOLIDATED INTERIM FINANCIAL STATEMENTS 2.1 Basis of Preparation and Presentation of Consolidated Interim Financial Statements The Group companies, which operate in Turkey, keep their accounting books and their statutory financial statements in Turkish Lira in accordance with the Generally Accepted Accounting Principles in Turkey accepted by the Capital Markets Board (CMB), Turkish Commercial Code, Tax Legislation and the Uniform Chart of Accounts issued by the Ministry of Finance. The foreign subsidiaries and joint ventures keep their accounting books and statutory financial statements in their local currencies and in accordance with the rules and regulations of the countries in which they operate. The consolidated financial statements are based on the statutory financial statements of the Group s subsidiaries and joint ventures and presented in TRL in accordance with CMB Financial Reporting Standards with certain adjustments and reclassifications for the purpose of fair presentation. Such adjustments are primarily related to application of consolidation accounting, accounting for business combinations, accounting for deferred taxes on temporary differences, accounting for employment termination benefits on an actuarial basis and accruals for various expenses. Except for the financial assets and liabilities carried from their fair values and assets and liabilities included in business combinations application, financial statements are prepared on historical cost basis. In accordance with the CMB's "Communiqué on Financial Reporting in Capital Market" Numbered II-14.1 (Communiqué), promulgated in the Official Gazette numbered dated June 13, 2013, listed companies are required to prepare their financial statements in conformity with Turkey Accounting/Financial Reporting Standards (TAS/TFRS) as prescribed in the CMB Communiqué. The financial statements and explanatory notes are presented using the compulsory standard formats as published by the Communiqué. In the scope of "Communiqué, the Group has prepared condensed consolidated interim financial statements for the period ended June 30, in accordance with TAS 34, Interim Financial Reporting. The financial statements and explanatory notes are presented using the compulsory standard formats as published by the Communiqué. In accordance with the TAS, the entities are allowed to prepare a complete or condensed set of interim financial statements in accordance with TAS 34, Interim Financial Reporting. In this respect, the Group has preferred to prepare condensed consolidated financial statements in the interim periods. Furthermore, in accordance with the Communiqué and announcements regarding the explanations of the Communiqué, guarantee pledge mortgage table, foreign currency position table and total export and total import amounts are presented in the condensed consolidated financial statement disclosures (Note 14, 24). (9)

14 AS AT JUNE 30, NOTE 2. BASIS OF PRESENTATION OF CONSOLIDATED INTERIM FINANCIAL STATEMENTS (continued) 2.2 Functional and Reporting Functional and reporting currency of the Company and its subsidiaries, joint ventures located in Turkey is Turkish Lira. Changes in Functional and Reporting In accordance with IAS 21 The Effects of Changes in Foreign Exchange Rates, the Group changed the functional currency of the foreign subsidiaries and joint venture of soft drink operations from US Dollars ("USD") to the foreign subsidiaries' and joint ventures' local currencies effective from January 1, ; by considering the multinational structure of foreign operations and realization of most of their operations and by assessing the currency of the primary economic environment of foreign operations, currency that influences sales prices for goods and services, currency in which receipts from operating activities are usually retained, currency that mainly influences costs and other expenses for providing goods and services, Group has been applied the change in functional currency prospectively with effect from 1 January, in accordance with the requirements of IFRS and the relevant Accounting Standards. This change is not materially impacting the financial position or performance of the Group retrospectively. All assets and liabilities are converted into the new functional currency using the exchange rate at the date of the change. Non-monetary assets and liabilities are accounted with their book values. Subsidiary / Joint Venture Local Functional June 30, December 31, EBI EURO United States Dollar (USD) USD Efes Moscow Russian Ruble (RUR) RUR RUR Efes Kazakhstan Kazakh Tenge (KZT) KZT KZT Efes Moldova Moldovan Leu (MDL) MDL MDL Efes Georgia Georgian Lari (GEL) GEL GEL Efes Ukraine Ukraine Hryvnya (UAH) UAH UAH AETMC EURO EURO EURO EHTMC EURO EURO EURO Efes Germany EURO EURO EURO Almaty CC Kazakh Tenge (KZT) KZT USD Tonus Kazakh Tenge (KZT) KZT USD Azerbaijan CC Azerbaijani Manat (AZM) AZM USD Turkmenistan CC Turkmenistan Manat (TMT) TMT USD Bishkek CC Kyrgyz Som (KGS) KGS USD TCCBCJ Jordan Dinar (JOD) JOD USD CCBIL Iraqi Dinar (IQD) IQD USD SSDSD Syrian Pound (SYP) SYP USD CCBPL Pakistan Rupee (PKR) PKR PKR CCI Holland EURO USD USD Waha B.V. EURO USD USD Al Waha Iraqi Dinar (IQD) IQD USD Tacikistan CC Tajikistani Somoni (TJS) TJS USD (10)

15 AS AT JUNE 30, NOTE 2. BASIS OF PRESENTATION OF CONSOLIDATED INTERIM FINANCIAL STATEMENTS (continued) 2.2 Seasonality of Operations Due to higher soft drink consumption during the summer season, the condensed consolidated interim financial results may include the effects of the seasonal variations. Therefore, the results of business operations for the first six months up to June 30, may not necessarily constitute an indicator for the results to be expected for the overall fiscal year. 2.3 Significant Accounting Estimates and Decisions Preparation of consolidated financial statements requires management to make estimations and assumptions which may affect the reported amounts of assets and liabilities as of the statement of financial position date, the disclosure of contingent assets and liabilities and the reported amounts of income and expenses during the financial period. The accounting assessments, estimates and assumptions are reviewed considering past experiences, other factors and reasonable expectations about future events under current conditions. Although the estimations and assumptions are based on the best estimates of the management s existing incidents and operations, they may differ from the actual results. 2.4 Changes in Accounting Policies The condensed consolidated interim financial statements of the Group for the period ended June 30, have been prepared in accordance with the accounting policies consistent with the accounting policies used in the preparation of annual consolidated financial statements for the year ended December 31,. Accordingly, these condensed consolidated interim financial statements should be read in conjunction with the annual consolidated financial statements for the year ended December 31,. Adoption of new and revised International Financial Reporting Standards Standards, amendments and interpretations applicable as at : Amendments to IAS 7 Statement of cash flows on disclosure initiative, effective from annual periods beginning on or after 1 January. 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. The amendments on the recognition of deferred tax assets for unrealised losses clarify how to account for deferred tax assets related to debt instruements measured at fair value. Annual improvements 2014 ; 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. (11)

16 AS AT JUNE 30, NOTE 2. BASIS OF PRESENTATION OF CONSOLIDATED INTERIM FINANCIAL STATEMENTS (continued) 2.4 Changes in Accounting Policies (continued) Adoption of new and revised International Financial Reporting Standards (continued) Standards, amendments and interpretations effective after : Amendments to IFRS 10 and IAS 28, Sale or Contribution of Assets between an Investor and its Associate or Joint Venture clarifies the treatment of the sale or contribution of assets from an investor to its associate or joint venture. 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 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 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 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. Amendment to IFRS 15, Revenue from contracts with customers, effective from annual periods begining on or after 1 January 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. 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 recognise 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. At the very least, the new accounting model for lessees is expected to impact negotiations between lessors and lessees. 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. (12)

17 AS AT JUNE 30, NOTE 2. BASIS OF PRESENTATION OF CONSOLIDATED INTERIM FINANCIAL STATEMENTS (continued) 2.4 Changes in Accounting Policies (continued) Adoption of new and revised International Financial Reporting Standards (continued) Standards, amendments and interpretations effective after (continued) Amendments to IFRS 4, Insurance contracts regarding the implementation of IFRS 9, Financial Instruments, effective from annual periods beginning on or after 1 January These amendments introduce two approaches: an overlay approach and a deferral approach. The amended standard will: give all companies that issue insurance contracts the option to recognize in other comprehensive income, rather than profit or loss, the volatility that could arise when IFRS 9 is applied before the new insurance contracts standard is issued; and give companies whose activities are predominantly connected with insurance an optional temporary exemption from applying IFRS 9 until The entities that defer the application of IFRS 9 will continue to apply the existing financial instruments standard IAS 39. Amendment to IAS 40, Investment property relating to transfers of investment property, effective from annual periods beginning on or after 1 January 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 ; 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 IAS 28, Investments in associates and joint ventures regarding measuring an associate or joint venture at fair value effective 1 January IFRIC 22, Foreign currency transactions and advance consideration, effective from annual periods beginning on or after 1 January 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. IFRS 17, Insurance contracts, effective from annual periods beginning on or after 1 January This standard replaces IFRS 4, which currently permits a wide variety of practices in accounting for insurance contracts. IFRS 17 will fundamentally change the accounting by all entities that issue insurance contracts and investment contracts with discretionary participation features. IFRIC 23 Uncertainty over Income Tax Treatments This interpretation addresses the determination of taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates, when there is uncertainty over income tax treatments under IAS 12. It specifically considers: Whether tax treatments should be considered collectively Assumptions for taxation authorities' examinations The determination of taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates The effect of changes in facts and circumstances. The Group is in the process of assessing the impact of the amendments on financial position or performance of the Group. (13)

18 AS AT JUNE 30, NOTE 3. SEGMENT REPORTING The management monitors the operating results of its three business units separately for the purpose of making decisions about the resource allocation and performance assessment. The three operating segments are Turkey Beer Operations (Turkey Beer), International Beer Operations (International Beer) and Soft Drinks Operations (Soft Drinks). Segment performance is evaluated based on profit from operations before depreciation, amortization and non-cash expenses (EBITDA). EBITDA has been determined as the optimum indicator by the Group management for the evaluation of the performance of the operating segments by considering the comparability with the entities in the same business. The Group's segment reporting in accordance with IFRS 8 is disclosed as follows: Turkey Beer International Beer Soft Drinks Other (2) and Eliminations Total January 1 June 30, Revenues Inter-segment revenues (9.628) (315) (49) - (9.992) Total Revenues EBITDA (21.701) Profit / (loss) for the period (3.387) (41.002) Capital expenditures (20) April 1 June 30, Revenues Inter-segment revenues (5.843) (242) (27) - (6.112) Total Revenues EBITDA (10.352) Profit / (loss) for the period (23.901) Capital expenditures (21) Turkey Beer International Beer Soft Drinks Other (2) and Eliminations Total January 1 June 30, Revenues Inter-segment revenues (7.356) (297) (60) - (7.713) Total Revenues EBITDA (1) (22.172) Profit / (loss) for the period (36.999) Capital expenditures April 1 June 30, Revenues Inter-segment revenues (4.554) (202) (23) - (4.779) Total Revenues EBITDA (1) (11.638) Profit / (loss) for the period (19.461) Capital expenditures (774) (1) EBITDA calculation of CCI is revised in compliance with the CMB s communique No. II (2) Includes other subsidiaries and headquarter expenses included in the consolidation of the Group. (14)

19 AS AT JUNE 30, NOTE 3. SEGMENT REPORTING (continued) Turkey Beer International Beer Soft Drinks Other (1) and Eliminations Total June 30, Segment assets Segment liabilities Investment in associates December 31, Segment assets Segment liabilities Investment in associates (1) Includes other subsidiaries included in the consolidation of the Group. Reconciliation of EBITDA to the consolidated Profit/Loss from Continuing Operations and its components as of June 30, and are as follows: EBITDA Depreciation and amortization expenses ( ) ( ) ( ) ( ) Provision for retirement pay liability (10.957) (5.478) (9.068) (4.535) Provision for vacation pay liability (11.509) (3.122) (12.376) (4.839) Foreign exchange gain/(loss) from operating activities (6.048) (7.259) (2.869) Rediscount interest income/(expense) from operating activities (1.256) (1.242) (849) (1.004) Other (1.727) (786) (2.122) (889) PROFIT (LOSS) FROM OPERATING ACTIVITIES Investment Activity Income Investment Activity Expenses (-) (8.986) (4.248) (10.703) (8.258) Income/(Loss) from Associates (10.432) (8.738) (6.823) (3.398) PROFIT (LOSS) BEFORE FINANCING INCOME (EXPENSE) Finance Income Finance Expenses ( ) ( ) ( ) ( ) PROFIT (LOSS) FROM CONTINUING OPERATIONS (15)

20 AS AT JUNE 30, NOTE 4. CASH AND CASH EQUIVALENTS June 30, December 31, Cash on hand Bank accounts - Time deposits Demand deposits Other Cash and cash equivalents in cash flow statement Interest income accrual As of June 30,, annual interest rates of the TRL denominated time deposits vary between 13,75% and 14,50% (December 31, - 6,50% - 11,50%) and annual interest rates of the US Dollars (USD) and, Euro (EURO), and other currency denominated time deposits vary between 0,2% and 10,00% (December 31, annual interest rates of the US Dollars (USD) and, Euro (EURO), and other currency time deposits vary between 0,1% - 14,15%). As of June 30,, there is no cash deposit pledged as collateral by the Group (December 31, None). As of June 30,, other item contains credit card receivables amounting to TRL (December 31, TRY110). As of June 30,, the Group has designated its bank deposits amounting to TRL , equivalent of thousand USD , thousand EURO for the future raw material purchases, operational and interest expense related payments in the scope of hedge accounting (December 31, TRL , equivalent of thousand USD , thousand EURO21.062, and thousand Russian Ruble (RUR) ). (16)

21 AS AT JUNE 30, NOTE 5. SHORT AND LONG TERM BORROWINGS As of June 30,, total borrowings consist of principal (finance lease obligations included) amounting to TRL (December 31, TRL ) and interest expense accrual amounting to TRL (December 31, TRL32.517). As of June 30, and December 31,, total amount of borrowings and the effective interest rates are as follows: June 30, December 31, Short-term Amount Fixed rate Floating rate Amount Fixed rate Floating rate Borrowings TRL denominated borrowings ,33% - 16,28% Foreign currency denominated borrowings (USD) Libor + 1,00% Foreign currency denominated borrowings (EURO) ,00% - 3,15% ,00% Euribor + 2,75% Foreign currency denominated borrowings (Other) ,88% Kibor + 0,05% - Kibor+ 0,50% ,88% Kibor + 0,25% - Kibor+ 0,50% Short-term portion of long term borrowings Foreign currency denominated borrowings (USD) ,38% - 4,75% ,38% - 4,75% Libor + 2,00% Foreign currency denominated borrowings (EURO) ,80% Euribor + 0,80% - Euribor + 2,00% Euribor + 0,80% - Euribor + 2,35% Foreign currency denominated borrowings (Other) ,00% ,00% Long-term Borrowings Foreign currency denominated borrowings (USD) ,38% - 4,75% ,38% - 4,75% Libor + 2,00% Foreign currency denominated borrowings (EURO) ,80% Euribor + 1,50% - Euribor + 1,75% Euribor + 0,80% - Euribor + 2,35% Foreign currency denominated borrowings (Other) ,00% ,00% (17)

22 AS AT JUNE 30, NOTE 5. SHORT AND LONG TERM BORROWINGS (continued) Repayments of long-term borrowings are scheduled as follows: June 30, December 31, Between 1-2 years Between 2-3 years Between 3-4 years Between 4-5 years years and more NOTE 6. DERIVATIVE INSTRUMENTS As of June 30,, the Company has 3 aluminum swap transactions with a total nominal amount of TRL6.524 (December 31, TRL12.379) for tones. The total of these aluminum swap contracts are designated as hedging instruments in cash flow hedges related to forecasted cash flow for the vhigh probability purchases of can exposed to commodity price risk. As of June 30,, CCİ has 4 option transactions in which CCI acquired the right to purchase tonnes of aluminum at USD1.650 per tonne to hedge its financial risk arising from the cash flows between and 2018 can purchases (December 31, - 4 option transactions for the right to purchase tonnes of aluminum at USD1.650 per tonne). As of June 30, the Group has 1 forward purchase contract with a total nominal amount of TRL (December 31, 1 forward purchase contract nominal amount of TRL17.596). This forward contract is designated as hedging instruments in cash flow hedges related to forecasted cash flow for the highly probable purchases of raw materials exposed to foreign currency risk. The effective portion of change is in fair value of derivative instruments designated as hedging instruments in cash flow hedges is recognized in the consolidated statement of comprehensive income. June 30, December 31, Fair Value Nominal Asset / Value (Liability) Nominal Value Fair Value Asset/ (Liability) Commodity swap contracts Forward contracts (18)

23 AS AT JUNE 30, NOTE 7. OTHER RECEIVABLES AND PAYABLES a) Other Current Receivables June 30, December 31, Receivables from tax office Due from personnel Deposits and guarantees given Other b) Other Non-Current Receivables June 30, December 31, Deposits and guarantees given Other c) Other Current Payables June 30, December 31, Taxes other than on income Deposits and guarantees taken Other d) Other Non-Current Payables As of June 30,, other non-current payables consists of deposits and guarantees taken amounting to TRL (December 31, TRL ). NOT 8. INVESTMENTS IN ASSOCIATES June 30, December 31, Ownership Amount Ownership Amount Anadolu Etap %33, %33, SSDSD (1) %25,13 - %25, Relating to investment in associates, Total assets and liabilities as of June 30, and December 31, and profit/(loss) for the period of as of June 30, and June 30, are as follows: Anadolu Etap SSDSD June 30, December 31, June 30, December 31, Total Assets Total Liabilities Net Assets (1.005) (908) Anadolu Etap SSDSD June 30, June 30, June 30, June 30, Group s Share of Loss for the period (10.329) (6.436) (103) (387) (1) SSDSD, which has been accounted by using equity method in CCI financial statements, is accounted as investment in associates in Group s financial statements. (19)

24 AS AT JUNE 30, NOT 8. INVESTMENTS IN ASSOCIATES (continued) For the six month periods ended June 30, and, the movement of investments in associates are as follows: Balance at January Income / Loss from associates (10.432) (6.823) Other Capital Increase (1) Balance at June (1) Capital increase provided to Anadolu Etap. NOT 9. INVESTMENT PROPERTIES For the six-month periods ended June 30, and, movements of the investment property are as follows: Net Book Value 1 January Additions Depreciation of Addition Disposals, net translation differences, net Transfers, net (*) Net Book Value Current period Land and land improvements (44) Buildings (1.766) Construction in progress (1.766) (44) Net Book Value 1 January Additions Depreciation of Addition Disposals, net translation differences, net Transfers, net (*) Net Book Value Previous period Land and land improvements Buildings (1.249) (520) (42) Construction in progress (1.249) (520) (20)