1
LOKMAN HEKİM ENGÜRÜSAĞ SAĞLIK, TURİZM,
EĞİTİM HİZMETLERİ VE İNŞAAT TAAHHÜT A.Ş.
CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD
1 JANUARY – 30 JUNE 2018
TOGETHER WITH THE AUDITOR’S REVIEW REPORT
(CONVENIENCE TRANSLATION INTO ENGLISH OF THE CONSOLIDATED FINANCIAL STATEMENTS
TOGETHER WITH THE INDEPENDENT AUDITOR’S REVIEW REPORT ORIGINALLY ISSUED IN TURKISH)
2
LOKMAN HEKİM ENGÜRÜSAĞ SAĞLIK, TURİZM,
EĞİTİM HİZMETLERİ VE İNŞAAT TAAHHÜT A.Ş.
CONSOLIDATED FINANCIAL STATEMENTS FOR THE INTERIM PERIOD
1 JANUARY – 30 JUNE 2018 TOGETHER WITH THE AUDITOR’S REVIEW REPORT
To The Board of Directors of
Lokman Hekim Engürüsağ Sağlık, Turizm, Eğitim Hizmetleri ve İnşaat Taahhüt A.Ş.
Introduction
We have reviewed the accompanying statement of financial position of Lokman Hekim Engürüsağ
Sağlık, Turizm, Eğitim Hizmetleri ve İnşaat Taahhüt A.Ş. (the “Group” or the “Company”), as at
30 June 2018, the consolidated statement of income, the consolidated statement of other
comprehensive income, changes in equity, consolidated cash flows and other explanatory notes
for the three-month period then ended. The management of the Group is responsible for the
preparation and fair presentation of this condensed consolidated interim financial information in
accordance with Turkish Accounting Standard 34 (“IAS 34”) “Interim Financial Reporting”. Our
responsibility is to express a conclusion on this condensed consolidated interim financial
information based on our review.
Scope of Review
We conducted our review in accordance with International Standard on Review Engagements
2410, “Review of Interim Financial Information Performed by the Independent Auditor of the
Entity”. A review of interim financial information consist of making inquiries, primarily of persons
responsible for financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit conducted in accordance with
International Standards on Auditing and consequently does not enable us to obtain assurance
that we would become aware of all significant matters that might be identified in an audit.
Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the
accompanying interim consolidated financial information as at 30 June 2018 is not prepared, in
all material respects, in accordance with IAS 34, “Interim Financial Reporting”.
17 August 2018, Ankara
Vezin Bağımsız Denetim A.Ş.
Member Firm of HLB International
Harun AKTAŞ, CPA
Auditor in Charge
3
TABLE OF CONTENTS
CONSOLIDATED STATEMENT OF FINANCIAL POSITION...................................................4-5
CONSOLIDATED STATEMENT OF INCOME.......................................................................6
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDER’S EQUITY..............................7
CONSOLIDATED STATEMENT OF CASH FLOW STATEMENT.................................................8
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS...............................................9-51
LOKMAN HEKİM ENGÜRÜSAĞ SAĞLIK, TURİZM, EĞİTİM HİZMETLERİ VE İNŞAAT TAAHHÜT A.Ş.
Consolidated Statement of Financial Position at 30 June 2018
(Amounts are expressed in Turkish Lira (TRY) unless otherwise stated.)
4
Notes
30 June 2018
31 December 2017
ASSETS
Current Assets 95,583,297 83,267,354
Cash and Cash Equivalents [4] 2,293,323 1,957,355
Trade Receivables 60,442,759 58,766,734
- Related Parties [31] 1,581,326 2,923,110
- Other [6] 58,861,433 55,843,624
Other Receivables [7] 70,189 284,812
Inventories [8] 17,630,052 13,013,651
Prepaid Expenses [19] 12,770,978 5,690,157
Assets Related to Current Period Tax [18] 365,529 988,797
Other Current Assets [17] 2,010,467 2,565,848
Non-Current Assets 164,451,018 148,560,823
Other Receivables [7] 254,941 112,177
Biological Assets [9] 16,176,967 13,991,900
Investment Property 6,400,000 6,400,000
Tangible Assets [10] 94,032,133 89,998,909
- Tangible Assets Acquired Through Financial Leasing
9,539,878
10,334,138
- Other Tangible Assets
84,492,255
79,664,771
Intangible Assets 25,402,610 25,277,631
- Goodwill [13] 1,848,336 1,848,336
- Other Intangible Assets [11] 23,554,274 23,429,295
Prepaid Expenses [19] 10,627,264 1,303,293
- Related Parties 10,419,627 861,792
- Other 207,637 441,501
Deferred Tax Assets [29] 11,557,103 11,476,913
Total Assets 260,034,315 231,828,177
LOKMAN HEKİM ENGÜRÜSAĞ SAĞLIK, TURİZM, EĞİTİM HİZMETLERİ VE İNŞAAT TAAHÜT A.Ş.
Consolidated Statement at Financial Position at 30 June 2018
(Amounts are expressed in Turkish Lira (TRY) unless otherwise stated.)
5
LIABILITIES
Notes
30 June 2018
31 December 2017
Short-Term Liabilities 108,383,240 82,888,695
Short-Term Borrowings [5] 31,735,001 12,282,647
Short-Term Portions of the Long Term Borrowings
[5]
17,630,774
18,432,537
Trade Payables 40,577,919 31,956,548
- Related Parties [31] 4,339,895 949,561
- Other [6] 36,238,024 31,006,987
Payables Related to Employee Benefits [20] 9,549,501 9,218,816
Other Liabilities 99,700 184,126
- Related Parties [31] 5,040 4,300
- Other [7] 94,660 179,826
Deferred Income [19] 144,370 453,563
Period Profit Tax Liability [29] 858,037 1,140,357
Short-Term Provisions [14] 365,586 365,586
Other Short-Term Liabilities [17] 7,422,352 8,854,515
Long-Term Liabilities 71,653,803 70,816,619
Long-Term Borrowings [5] 45,893,554 42,769,731
Deferred Income [19] 1,976,921 2,071,921
Long Term Provisions 4,300,797 3,709,217
- Provision for Employee Benefits [16] 4,300,797 3,709,217
Liabilities Related to Current Period Tax [18] 19,482,531 22,265,750
Equity [21] 79,997,272 78,122,863
Equity Holders of the Parent 61,882,457 60,481,078
Paid-In Share Capital 24,000,000 24,000,000
Repurchased Shares (-) (6,849,934) (4,619,179)
Accumulated Other Comprehensive Revenues And Expenses not to be Reclassified to Profit or Loss
19,475,232
20,134,469
- Measurement of Revaluation Gains / (Losses) 22,522,283 22,522,283
- Gains / (Losses) on Remeasurement of Defined Benefit Plans
(3,047,051)
(2,387,814)
Accumulated Other Comprehensive Revenues And Expenses to be Reclassified to Profit or Loss
(390,239)
(247,337)
- Currency Translation Difference (390,239) (247,337)
Restricted Reserves 10,197,288 7,036,533
Prior Years’ Profits / Losses 11,015,837 7,882,990
Net Profit (Loss) for the Period 4,434,273 6,293,602
Non-Controlling Shares 18,114,815 17,641,785
Total Liabilities and Equity
260,034,315
231,828,177
LOKMAN HEKİM ENGÜRÜSAĞ SAĞLIK, TURİZM, EĞİTİM HİZMETLERİ VE İNŞAAT TAAHÜT A.Ş.
Consolidated Statement of Income for the period 1 January – 30 June 2018
(Amounts are expressed in Turkish Lira (TRY) unless otherwise stated.)
6
Notes
1 January 30 June
2018
1 April 30 June
2018
1 January 30 June
2017
1 April 30 June
2017
Income Statement
Revenue [22] 136,913,630 68,292,863 116,838,696 56,854,945
Cost of Sales (-)
[22] (117,450,434) (60,158,727) (104,989,119)
(53,256,059)
Gross Profit (Loss) 19,463,196 8,134,136 11,849,577 3,598,886
General Administrative Expenses (-) [23] (4,566,492) (2,452,106) (3,706,006) (1,838,681)
Marketing, Sales and Distribution Expenses (-) [23] (1,391,025) (630,791) (1,685,563) (906,102)
Other Operating Income [24] 191,635 38,738 349,076 224,585
Other Operating Expenses (-)
[25] (558,690) (158,740) (1,171,158)
(591,320)
Operating Profit (Loss) 13,138,624 4,931,237 5,635,926 487,368
Income From Investment Activities
[26] 276,458 154,602 249,523
140,135
Operating Profit (Loss) Before Financial Expenses
13,415,082 5,085,839 5,885,449
627,503
Financial Income [27] 2,939,912 654,735 2,023,814 72,165
Financial Expenses (-)
[29] (8,272,127) (3,635,641) (5,343,350)
(2,168,160)
Profit (Loss) Before Tax 8,082,867 2,104,933 2,565,913 (1,468,492)
Tax Income (Expenses) [29] (725,564) 863,784 2,336,203 2,158,202
Period Tax Expense (619,815) (282,772) (537,932) 33,591
Deferred Tax Income (Expense)
(105,749) 1,146,556 2,874,135
2,124,611
Net Profit (Loss) for the Period
7,357,303 2,968,717 4,902,116
689,710
Distribution of Profit (Loss) 7,357,303 2,968,717 4,902,116 689,710
Non-Controlling Shares 2,923,030 1,082,584 3,179,187 1,441,375
Parent Company Shares 4,434,273 1,886,133 1,722,929 (751,665)
Earnings Per Share [30] 0.184761 0.078589 0.071789 (0.031319)
Other Comprehensive Income Statement 1 January
30 June 2018
1 April
30 June 2018
1 January 30 June
2017
1 April 30 June
2017
Net Profit (Loss) for the Period 7,357,303 2,968,717 4,902,116
689,710
Items not to be Reclassified to Profit or Loss
[21] (659,237) (425,907) (199,498)
(197,930)
- Gains/Losses on Remeasurement of Defined Benefit Plans
(845,176) (546,035) (154,686)
(247,415)
Tax Income/Expenses 185,939 120,128 (44,812) 49,485
Items to be Reclassified to Profit or Loss (142,902) (219,316) (5,912) (74,733)
Currency Translation Differences (142,902) (219,316) (5,912) (74,733)
Other Comprehensive Income (After Tax) (802,139) (645,223) (205,410) (272,663)
Total Comprehensive Income 6,555,164 2,323,494 4,696,706
417,047
Distribution of Total Comprehensive Income 6,555,164 2,323,494 4,696,706 417,017
Non-Controlling Shares 2,923,030 1,082,584 3,179,187 1,441,375
Equity Holders of the Parent 3,632,134 1,240,910 1,517,519 (1,024,328)
LOKMAN HEKİM ENGÜRÜSAĞ SAĞLIK, TURİZM, EĞİTİM HİZMETLERİ VE İNŞAAT TAAHÜT A.Ş.
Consolidated Statement of Changes in Shareholder’s Equity for the period 1 January – 30 June 2018
(Amounts are expressed in Turkish Lira (TRY) unless otherwise stated.)
7
Other Comprehensive
Income/Expenses not to be
Reclassified to Profit or Loss
Other Comprehensive
Income/Expenses
to be Reclassified
to Profit or Loss
Retained Earnings
Notes Paid-In Share
Capital
Repurchased
Shares (-)
Tangible
Assets Revaluation
Increase/
(Decrease)
Gains/ (Losses)
on Remeasurement
of Defined
Benefit Plans
Currency
Translation
Differences
Restricted
Reserves Prior Years’
Profits/Losses
Net Profit/Loss
for the
Period
Non-
controlling
Shares
Total
1 January 2017 [22] 24,000,000 (3,022,141) 26,427,590 (1,312,039) 206,703 4,497,027 4,383,102 7,113,164 13,830,104 76,123,510
Adjustment related to Prior Years 10,879 593,677 (219,541) (604,556) (219,541)
Transfers 586,995 6,306,628 (6,893,623) -
Currency Translation Differences (5,912) (5,912)
Gains/(Losses) on Remeasurement
ofDefined Benefit Plans (154,686) (154,686)
Tangible Assets Revaluation
Increase/(Decrease) -
Tax Income/Expense (44,812) (44,812)
Repurchased Shares (459,220) 459,220 (459,220) (459,220)
Cash Dividend Distribution (2,450,000) (2,450,000)
Non-controlling Shares -
Net Profit/Loss for the Period 1,722,929 3,179,187 4,902,116
30 June 2017 24,000,000 (3,481,361) 26,427,590 (1,511,537) 211,670 5,543,242 10,824,187 1,722,929 13,954,735 77,691,455
1 January 2018 [22] 24,000,000 (4,619,179) 22,522,283 (2,387,814) (247,337) 7,036,533 7,882,990 6,293,602 17,641,785 78,122,863
Transfers 930,000 5,363,602 (6,293,602) -
Currency Translation Differences (142,902) (142,902)
Gains/(Losses) on Remeasurement
of Defined Benefit Plans (845,176) (845,176)
Tangible Assets Revaluation Increase/(Decrease)
-
Tax Income/Expense 185,939 185,939
Repurchased Shares (2,230,755) 2,230,755 (2,230,755) (2,230,755)
Cash Dividend Distribution (2,450,000)
Non-controlling Shares (2,450,000) -
Net Profit/Loss for the Period 4,434,273 2,923,030 7,357,303
30 June 2018 24,000,000 (6,849,934) 22,522,283 (3,047,051) (390,239) 10,197,288 11,015,837 4,434,273 18,114,815 79,997,272
LOKMAN HEKİM ENGÜRÜSAĞ SAĞLIK, TURİZM, EĞİTİM HİZMETLERİ VE İNŞAAT TAAHÜT A.Ş.
Consolidated Statement of Cash Flow for the period 1 January – 30 June 2018
(Amounts are expressed in Turkish Lira (TRY) unless otherwise stated.)
8
Notes
1 January 30 June
2018
1 January 30 June
2017
A. Cash Flows From Operating Activities (11,113,830) (1,821,403)
Profit (Loss) for the Period 4,434,273 1,722,929
Adjustments to Reconcile Net Profit (Loss) for the Period 4,634,248 385,452
Adjustments to Depreciation and Amortization Expense [10-11] 4,588,763 4,489,640
Adjustments to Impairment (Cancellation) 98,612 398,932
- Adjustments to Impairment (Cancellation) in Receivables [6] 98,612 398,932
Adjustments to Provisions 591,580 123,800
- Adjustments to (Cancellation) Provisions related with Employee Benefits
[20] 591,580 123,800
Adjustments to Unrealized Currency Translation Diffirences [21] (142,902) (5,912)
Adjustments to Tax (Income) Expenses [29] (80,190) (2,829,323)
Other Adjustments Related to Non-Cash Items [17] (421,615) (1,791,685)
Changes in Working Capital (17,732,351) (1,479,784)
Adjustments to Decrease (Increase) in Trade Receivables (1,353,022) (2,042,932)
- Adjustments to Decrease (Increase) in Trade Receivables from Related Parties
[31] 1,341,784 (617,417)
- Adjustments to Decrease (Increase) in Trade Receivables from Third Parties
[7] (2,694,806) (1,425,515)
Adjustments to Decrease (Increase) in Other Receivables related with Operations
71,859 361,342
- Adjustments to Decrease (Increase) in Other Receivables from Related Parties related with Operations
[33] 220,132 369,920
- Adjustments to Decrease (Increase) in Other Receivables from Third Parties related with Operations
[7] (148,273) (8,578)
Adjustments to Decrease (Increase) in Stocks [8] (6,801,468) (1,208,114)
Adjustments to Decrease (Increase) in Prepaid Expenses [19] (16,638,656) (1,916,888)
Adjustments to Increase (Decrease) in Trade Payables 8,651,385 (4,309,372)
- Increase (Decrease) in Trade Payables to the Related Parties [31] 3,390,334 (9,502)
- Increase (Decrease) in Trade Payables to the Third Parties [6] 5,261,051 (4,299,870)
Increase (Decrease) in Payables related to Employee Benefit [20] 330,685 (1,714,347)
Increase (Decrease) in Other Payables related with Operations (84,426) 32,475
- Increase (Decrease) in Other Payables to the Related Parties related with Operations
[31] 740 (1)
- Increase (Decrease) in Other Payables to the Third Parties related with Operations
[7] (85,166) 32,476
Increase (Decrease) in Deferred Income [29] (309,193) (65,404)
Other Adjustments to Other Increase (Decrease) in Working Capital (1,599,515) 9,383,456
- Decrease (Increase) in Other Assets related with Operations 1,412,513 1,250,548
- Increase (Decrease) in Other Liabilities related with Operations (3,012,028) 8,132,908
Cash Flows from Operations (8,663,830) 628,597
Paid Dividends (2,450,000) (2,450,000)
B. Cash Flows from Investing Activities (8,705,926) (8,021,342)
Cash Outflows from Acquiring Tangible-Intangible Assets [10,11] (8,705,926) (8,021,342)
C. Cash Flows from Financing Activities 20,155,724 9,986,246
Cash Inflows from Borrowings [4] 89,793,679 82,681,533
- Cash Inflows from Loans 89,793,679 82,681,533
Cash Outflows from Repayments of Borrowings [4] (69,637,955) (72,695,287)
- Cash Outflows from Loan Repayments (69,637,955) (72,695,287)
Net Increase (Decrease) on Cash and Cash Equivalents Before the
Effect of Currency Translation Differences 335,968 143,501
D. Effect of Currency Translation Differences on Cash and Cash Equivalents
- -
Net Increase (Decrease) on Cash and Cash Equivalents 335,968 143,501
E. Cash and Cash Equivalents at the Beginning of the Period [4] 1,957,355 793,820
F. Cash and Cash Equivalents at the End of the Period(A+B+C+D+E) [4] 2,293,323 937,321
LOKMAN HEKİM ENGÜRÜSAĞ SAĞLIK, TURİZM, EĞİTİM HİZMETLERİ VE İNŞAAT TAAHÜT A.Ş.
Notes to the Consolidated Financial Statements for the Period 1 January – 30 June 2018
(Amounts are expressed in Turkish Lira (TRY) unless otherwise stated.)
9
1. COMPANY’S ORGANIZATION AND MAIN ACTIVITY
Lokman Hekim Engürüsağ Sağlık, Turizm, Eğitim Hizmetleri ve İnşaat Taahhüt A.Ş. (“Parent
Company”, “Group”, or “Company”) was established in Ankara in 1996. Firstly, it started to operate
sale of medical stuff and procurement of medical equipment.
Company amended the main contract in the meeting which was conducted on 23 May 2010 after
the 2009 Ordinary General Assembly Meeting. Company’s tittle of “Engürüsağ Sağlık, Turizm, Eğitim
Hizmetleri ve İnşaat Taahhüt A.Ş.” has been changed as “Lokman Hekim Engürüsağ Sağlık, Turizm,
Eğitim Hizmetleri ve İnşaat Taahhüt A.Ş.” relying on this amendment.
Company’s recorded address is General Tevfik Sağlam Caddesi No: 119 Etlik/Ankara.
Main partnership capital and partnership structure is;
30 June 2018 31 December 2017
Amount (TRY) % Amount (TRY) %
A Category 193,208 0.81 193,208 0.81
B Category 23,806,792 99.19 23,806,792 99.19
Total 24,000,000 100 24,000,000 100
A category shares are registered and cannot be sold in the stock exchange market. They cannot be
transferred partially to 3rd parties. A category shareholder has priority for sale of shares relying on
real value (the value which is set jointly between parties). In the situation of conflict, revaluation
of share will be made during a month by independent auditing firm which is jointly decided. At the
transfers of a category share, in the situation that there is one or more than one A category
shareholder which will take over, shares are transferred equally. When there is no A category
shareholder to take over A category shares which are settled its value, shareholder is free to sell
his shares to 3rd parties over its settled value.
Affairs and management of the Company are conducted by board of directors consisted of minimum
7 or 9 people which are elected by General Board. If board of directors will consist of 7 people
elected by General Board, 5 of them; and if board of directors will consist of 9 people, 6 of them
will be elected by General Board between candidates jointly nominated by shareholders who have
more than 51 percent of A category shares.
There is no granted privilege to B category shares.
Subsidiaries which are in the group, are subjected to consolidation, are direct, and sphere of
activities of these subsidiaries with its rate of share are like below;
Company
Principle Activity
Participation Rate (%)
30 June
2018
31 December
2017
Lokman Hekim Van Sağlık Hizmetleri ve İnşaat Taahhüt A.Ş.
Healthcare
51
51
Hay Süt ve Süt Ürünleri Hayvancılık Gıda
İth. İhr. A.Ş.
Livestock,
Dairy
73.62
73.62
Engürüsağ Genel Ticaret Ltd. Şti. (Erbil)
Healthcare
95
95
Lokman Hekim Tıp Merkezleri A.Ş.* Healthcare 100 100
(*) The Company has 49% of the shares owned by the company and 66% of the management
representation and 100% of the profit share. Therefore, the company have been included into
financial statements by fully consolidation method.
LOKMAN HEKİM ENGÜRÜSAĞ SAĞLIK, TURİZM, EĞİTİM HİZMETLERİ VE İNŞAAT TAAHÜT A.Ş.
Notes to the Consolidated Financial Statements for the Period 1 January – 30 June 2018
(Amounts are expressed in Turkish Lira (TRY) unless otherwise stated.)
10
Lokman Hekim Etlik Hospital
In Etlik district in Ankara, five-storey hospital building that has 2,900 m² of indoor area has been rented
for 15 years in 1999 and rental contract have been extended 5+5 years in 2014. There are 2 operating
rooms, 2 delivery rooms, 3 newborn intensive care incubators, 3 intensive care beds, 31 inpatient beds
with a total capacity of 37 beds.
The company has purchased the independent sections on the side of the hospital to grow the hospital,
and the projecting and rebuilding works have been started with-in the year 2017 and this additional
section is planned to bring into service in 2019.
The hospital has TUV-CERT ISO 9001:2008 Certificate of Quality Management System and it supports
the project of Baby-Friendly Hospital which is conducted by UNICEF and Ministry of Health. In this scope,
hospital has Certificate of Baby-Friendly Hospital.
Lokman Hekim Ankara Hospital
Hospital building that has 8 floors and 17,500 m² indoor areas in Sincan district in Ankara, is The Group’s
own asset. The hospital has 6 full-fledged operation rooms and one heliport for air ambulance. The
hospital has 51 intensive care rooms, 6 intensive care units for cardiology department, 1 coronary room
with 4 beds and 21 newborn intensive care incubators and 134 patient beds with a total capacity of 216
beds.
The hospital has a Baby-Friendly Hospital certificate from a project of UNICEF and Ministry of Health.
Lokman Hekim Akay Hospital
In Çankaya, Ankara, the 11-storey hospital built on 18,000 m² total area was rented for 15 years and
started its operation in 1 August 2016. The hospital has a total bed capacity of 126 beds, including 3
beds internal intensive care, 4 beds coronary intensive care, 3 beds surgical intensive care, 6 newborn
intensive care incubators, 9 beds KVC intensive care units and 101 patient beds.
Lokman Hekim Akay Hospital supports TQCSI ISO 9001: 2008 Quality Management System Standards
document and Ministry of Health and Baby Friendly Hospital Project carried out by UNICEF and has Baby
Friendly Hospital certificate.
Lokman Hekim Van Hospital
In Van city center the 9-storey hospital building with 12,500 m² indoor area, the hospital has 5 fully-
fledged operating rooms, 16 internal intensive care beds, 15 surgical intensive care beds, 5 beds for
intensive care for cardiology department, 17 coronary rooms, 64 newborn intensive care incubators and
99 patient beds with a total capacity of 216 beds.
Lokman Hekim Hayat Hospital
In the center of Van, there are 2 operating rooms, 13 beds medical and surgical intensive care units,
26 newborn intensive care units and 30 patient beds in a 5-storey hospital which is installed in a closed
area of approximately 4,500 m² and has a total capacity of 69 beds.
Engürüsağ General Trading Limited Company
The center was established to provide imaging and diagnostic facilities in Erbil, Iraq in 2013.The group
has 95% percent of the shares and titled as co-founder. The company operates in an indoor area of
approximately 2,000 m² which includes radiology and laboratory units located in the center.
Hay Süt ve Süt Ürünleri Hayvancılık Gıda İth. İhr. A.Ş.
73.62% of the shares were owned by The Company established in the Haymana district of Ankara on
23 August 2007 with a capital of TRY 1,000,000. On 29 March 2011 the company's capital was increased
to TRY 2,100,000. Hay Süt produces milk at European standards.
LOKMAN HEKİM ENGÜRÜSAĞ SAĞLIK, TURİZM, EĞİTİM HİZMETLERİ VE İNŞAAT TAAHÜT A.Ş.
Notes to the Consolidated Financial Statements for the Period 1 January – 30 June 2018
(Amounts are expressed in Turkish Lira (TRY) unless otherwise stated.)
11
Lokman Hekim Demet Tıp Merkezleri A.Ş.
It has been established in the Demetevler district of Yenimahalle in Ankara with a capital of TRY 50,000
on 12 April 2016 to provide a closed area of 2,400 m², outpatient treatment and health services.
Licensing and furnishing studies of the Lokman Hekim Demet Medical Center were completed and patient
admission started on 11 October 2016.
According to the Regulations Regarding Private Health Establishments Diagnosed and Treated Out of
the Company, the share of the company's capital has been limited to 49%. Preemtive right with (49%)
Group A shares that The Company have as founder shareholder and (51%) shares that was paid in the
course of establishment; The Company’s share rate is 100%. The absolute amount of profit share
belongs to The Company.
Laboratories
The laboratories located in the hospitals are members of the ONEWORLD ACCURACY and the reliability
of the laboratory instruments and the measurement results are regularly checked with the External
Quality Control Programs.
Medical Units
Anesthesia and Reanimation, Nutrition and Diet, Brain and Neurosurgery, Radiology, Child Care and
Pediatric, Child Neurology, Dermatology, Physical Med and Rehabilitation, Gastroenterology, General
Surgery, Pulmonology, Hematology, Eye Diseases, Internal Diseases, Gynecological Diseases and
Delivery, Cardiology, Cardiovascular Surgery, Otorhinolaryngology, Neurology, Nephrology Orthopedics
and Traumatology, Urology, Endocrinology, Psychiatry, Pediatric Surgery, Plastic Reconstructive and
Aesthetic Surgery, Emergency Medicine, Biochemistry, Microbiology, Infectious Diseases, Pathology,
Interventional Radiology, Medical Oncology.
Personnel
Position 30 June 2018
31 December 2017
Doctor 270 263
Health Services 838 791
Health Support Services 470 446
Management Support Services 446 402
Management 108 106
Veterinary and Laborers 14 14
Total 2,146 2,022
2. PRINCIPALS REGARDING TO THE PRESENTATION OF FINANCIAL STATEMENTS
2.1. Main Principles Regarding to the Presentation
2.1.1 Legal Books and Financial Statements
Within the scope of standards as IAS/IFRS respectively; Turkish Accounting Standards and Turkish
Financial Reporting System, Public Oversight, Accounting and Auditing Standards Authority (“POA”),
5411 numbered Banking Law, Turkish Capital Markets Board of Turkey (“CMB”) 6362 numbered
Capital Markets Law and with 5684 numbered Insurance Law and also 4683 numbered Individual
Retirement and Investment Law are published on 20 May 2013, on Official Journal in 28652.
According to the Principles of Financial Reporting in Capital Markets Notification (II-14.1) of Capital
Markets Board of Turkey (“CMB”), financial market institutions, with exclusion of exported capital
market tools, the transactions in the stock market of investment funds and partnership, housing
finance and asset finance funds, has to prepare its financial statement appropriately to the
IAS/IFRS.
LOKMAN HEKİM ENGÜRÜSAĞ SAĞLIK, TURİZM, EĞİTİM HİZMETLERİ VE İNŞAAT TAAHÜT A.Ş.
Notes to the Consolidated Financial Statements for the Period 1 January – 30 June 2018
(Amounts are expressed in Turkish Lira (TRY) unless otherwise stated.)
12
In the number of the meeting 20/670 of Capital Markets Board of Turkey (“CMB”), the number of
notification II-14.1 for the financial market institutions, with exclusion of exported capital market
tools, the transactions in the stock market of investment funds and partnership, housing finance
and asset finance funds after the interim periods of 31 March 2013, the methods came into force.
This methods announced in the weekly newsletter at the date 07 June 2013 and in the number of
2013/19. The company prepares its consolidated financial statements after 30 June 2013 according
to these standards.
CMB, with its resolution dated 17 March 2005, announced that all publicly traded entities operating
in Turkey was not obliged to apply inflationary accounting effective from 1 January 2005. In
accordance with this resolution, IAS 29 “Financial Reporting in Hyperinflationary Economies” is not
applied to the consolidated financial statements since 1 January 2005.
The Group prepares its Financial Statements in according to Turkish Commercial Code (“TCC”) and
Ministry of Finance Standards and used the currency is Turkish Lira(s).
The consolidated financial statements are prepared in accordance with the historical cost basis
records for the purpose of fair presentation in accordance with Turkish Accounting Standards and
Turkish Financial Reporting System (IAS/IFRS).
2.1.2 Principles of Consolidation;
Company
Principle Activity
Participation Rate (%)
30 June 2018
31 December
2017
Lokman Hekim Van Sağlık Hizmetleri ve İnşaat Taahhüt A.Ş.
Healthcare
51
51
Hay Süt ve Süt Ürünleri Hayvancılık Gıda
İth. İhr. A.Ş.
Livestock,
Dairy
73.62
73.62
Engürüsağ Genel Ticaret Ltd. Şti. (Erbil)
Healthcare
95
95
Lokman Hekim Tıp Merkezleri A.Ş.* Healthcare 100 100
(*) Preemtive right with (49%) Group A shares that The Company have as founder shareholder and
(51%) shares that was paid in the course of establishment; The Company’s share rate is 100%. The
absolute amount of profit share belongs to The Company. All the companies above are consolidated
in accordance with the principles below.
Consolidation Method
• Consolidated balance sheets and income statement items of the partnerships are consolidated
through adding up to each other. Book values of the shares owned by Main Partnership in
consolidated subsidiaries are set off from the shareholders’ equity accounts of the subsidiary.
• Receivables and payables, sale of good and services and income and loss items resulting
from the transactions between the partnerships from each other which are within the scope of
consolidation are set off.
• Tangible and intangible assets purchased between the partnerships which are subject to
consolidation method are presented in the consolidated balance sheet through their costs of
acquisition after the necessary adjustments are made.
• The amounts equal to the external shares of main partnership and subsidiaries are deducted
from all shareholders’ equity items, including the paid/issued capitals of the subsidiaries which
are within the scope of consolidation, and are presented as “Non-controlling Interests” before
the shareholders’ equity account group in the balance sheet.
LOKMAN HEKİM ENGÜRÜSAĞ SAĞLIK, TURİZM, EĞİTİM HİZMETLERİ VE İNŞAAT TAAHÜT A.Ş.
Notes to the Consolidated Financial Statements for the Period 1 January – 30 June 2018
(Amounts are expressed in Turkish Lira (TRY) unless otherwise stated.)
13
• Cost of acquisition of shares in the capital of subsidiary by main partnership as of the date
when the partnership within the scope of consolidation become subsidiary and just for the one
time for the following share purchases, is set off from the value in the shareholders’ equity in
the re-valued balance sheet of the subsidiary based on the fair value as of the purchase date.
• Acquisition of the Group is accounted through purchase method. In this method, acquisition
is registered based on cost. The group, starting from the acquisition date, includes the operation
results of the company which is acquired in its income statement and also presents each
definable asset and liability of the acquired company as well as the goodwill or negative goodwill
aroused as result of the acquisition in the balance sheet as of this date.
2.1.3. Functional Currency
Functional currency of the Group is Turkish Lira (TRY) and attached consolidated financial statements
and notes to consolidated financial statements are presented in Turkish Lira (TRY).
2.1.4. Declaration of Conformity
Attached financial statements of Group have been confirmed by the Board of Directors of the Company
as of 14 August 2018. The right to change the attached consolidated financial statements belongs to
the General Assembly of the Company or legal authorities.
2.1.5. Netting / Set Off
Financial assets and liabilities are presented at their net values in cases of a required legal right, related
assets and liabilities are intended to be netted or acquisition of assets are followed by the performing of
the liabilities.
2.1.6. Financial Statement of Partnerships Operating in Foreign Countries
Financial statements of partnerships and subsidiaries in foreign countries are prepared in accordance
with the host countries’ standards and law. The accounting principles of the Group are adjusted
according to these laws and standards.
If the currencies of the Group companies are different from reporting currency, then the translation
method is below;
All the assets and liabilities are translated with the exchange rate on the date of balance sheet.
Revenues and expenses are translated with the exchange rate on the date of balance sheet and
the difference of translation is stated in the comprehensive income statement.
2.1.7. New and Revised Turkish Accounting / Financial Reporting Standards
The Group applied new and revised standards which are published by Public Oversight Authority (“POA”)
in the current period and related to its field of business.
(a) New Standards, Amendments and Interpretations Applicable as at 1 January 2017
IAS 7 “Statement of Cash Flows” (Amendments)
Amendments to IAS 7, ‘Statement of cash flows’; on disclosure initiative effective from annual periods
beginning on or after 1 January 2017. These amendments introduce an additional disclosure that will
enable users of financial statements to evaluate changes in liabilities arising from financing activities.
LOKMAN HEKİM ENGÜRÜSAĞ SAĞLIK, TURİZM, EĞİTİM HİZMETLERİ VE İNŞAAT TAAHÜT A.Ş.
Notes to the Consolidated Financial Statements for the Period 1 January – 30 June 2018
(Amounts are expressed in Turkish Lira (TRY) unless otherwise stated.)
14
IAS 12 “Income Taxes: Recognition of Deferred Tax Assets for Unrealised
Losses” (Amendments)
Amendments to IAS 12, effective from annual periods beginning on or after 1 January 2017. The
amendments clarify the accounting for deferred tax where an asset is measured at fair value and that
fair value is below the asset’s tax base. It also clarify certain other aspects of accounting for deferred
tax assets. These amendments will be not effective on the Company’s financial position or its
performance.
Annual improvements for the period 2014-2016; Effective for annual reporting periods beginning on or
after January 1, 2018. These changes includes;
- 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. Amendments to IFRS1, effective from annual
periods beginning on or after 1 January 2018.
- IFRS 12, ‘Disclosure of interests in other entities’; regarding clarification of the scope of the
standard. These amendments should be applied retrospectively for annual periods beginning on or
after 1 January 2017. This amendment clarifies that the disclosures requirement of IFRS 12 are
applicable to interest in entities classified as held for sale except for summarized financial
information.
- IFRS 28, ‘Investments in Associates and Joint Ventures’; The amendment enable when an
investment in an associate or a joint venture is held by, or is held indirectly through, an entity that
is a venture capital organization, or a mutual fund, unit trust and similar entities including
investment-linked insurance funds, the entity may elect to measure that investment at fair value
through profit or loss in accordance with IFRS 9.
(b) Standards Issued but not yet Effective
Standards, interpretations and amendments to existing standards that are issued but not yet effective
up to the date of issuance of the consolidated financial statements are as follows. The Group will make
the necessary changes if not indicated otherwise, which will be affecting the consolidated financial
statements and disclosures, after the new standards and interpretations become in effect.
IFRS 15 - Revenue from Contracts with Customers
The standard replaces existing IFRS guidance and introduces a new control-based revenue recognition
model for contracts with customers. In the new standard, total consideration measured will be the
amount to which the Company expects to be entitled, rather than fair value and new guidance have
been introduced on separating goods and services in a contract and recognizing revenue over time. The
standard is effective for annual periods beginning on or after 1 January 2018, with early adoption
permitted. These amendments will be not effective on the Company’s financial position or its
performance.
IFRS 9 - Financial Instruments
The final version of IFRS 9 brings together all three aspects of the accounting for financial instruments
project: classification and measurement, impairment and hedge accounting. IFRS 9 is built on a logical,
single classification and measurement approach for financial assets that reflects the business model in
which they are managed and their cash flow characteristics. Built upon this is a forward-looking expected
credit loss model that will result in more timely recognition of loan losses and is a single model that is
applicable to all financial instruments subject to impairment accounting. In addition, IFRS 9 addresses
the so-called ‘own credit’ issue, whereby banks and others book gains through profit or loss as a result
of the value of their own debt falling due to a decrease in credit worthiness when they have elected to
measure that debt at fair value.
LOKMAN HEKİM ENGÜRÜSAĞ SAĞLIK, TURİZM, EĞİTİM HİZMETLERİ VE İNŞAAT TAAHÜT A.Ş.
Notes to the Consolidated Financial Statements for the Period 1 January – 30 June 2018
(Amounts are expressed in Turkish Lira (TRY) unless otherwise stated.)
15
The Standard also includes an improved hedge accounting model to better link the economics of risk
management with its accounting treatment. IFRS 9 is effective for annual periods beginning on or after
January 1, 2018, with early application permitted by applying all requirements of the standard.
Alternatively, entities may elect to early apply only the requirements for the presentation of gains and
losses on financial liabilities designated as FVTPL without applying the other requirements in the
standard. The Group does not expect that these amendments will have significant impact on the
consolidated financial position or performance of the Group.
IFRS 4 - Insurance Contracts (Amendments)
Amendments to IFRS 4, ‘Insurance contracts’ regarding the implementation of IFRS 9, ‘Financial
Instruments’; effective from annual periods beginning on or after 1 January 2018. These amendments
introduce two approaches: an overlay approach and a deferral approach. The Group does not expect
that these amendments will have significant impact on the consolidated financial position or performance
of the Group.
IFRIC 22 - Foreign Currency Transactions and Advance Consideration
The amendments clarifies the accounting for transactions that include the receipt or payment of advance
consideration in a foreign currency. The Interpretation covers foreign currency transactions when an
entity recognizes a non-monetary asset or non-monetary liability arising from the payment or receipt
of advance consideration before the entity recognizes the related asset, expense or income. The date
of the transaction, for the purpose of determining the exchange rate, is the date of initial recognition of
the non-monetary prepayment asset or deferred income liability. If there are multiple payments or
receipts in advance, a date of transaction is established for each payment or receipt. The amendment
is effective for annual reporting periods beginning on or after 1 January 2018 with earlier application is
permitted. The Group does not expect that these amendments will have significant impact on the
consolidated financial position or performance of the Group.
IFRS 2 - Share-Based Payment
IFRS 2 Share-Based Payment has been amended to improving consistency and resolve some long-
standing ambiguities in share-based payment accounting. The amendments cover three accounting
areas:
i) measurement of cash-settled share-based payments
ii) classification of share-based payments settled net of tax withholdings
iii) accounting for modification of a share-based payment from cash-settled to equity-settled
The amendments are effective for periods beginning on or after 1 January 2018, with earlier application
permitted. The Group does not expect that these amendments will have significant impact on the
consolidated financial position or performance of the Group.
IAS 28 Investments in Associates and Joint Venture (Amendments)
Amendment to IAS 28, ‘Investments in associates and joint venture’; effective from annual periods
beginning on or after 1 January 2019. These amendments clarify that companies account for long-term
interests in associate or joint venture to which the equity method is not applied using IFRS 9. These
amendments will be not effective on the Company’s financial position or its performance.
LOKMAN HEKİM ENGÜRÜSAĞ SAĞLIK, TURİZM, EĞİTİM HİZMETLERİ VE İNŞAAT TAAHÜT A.Ş.
Notes to the Consolidated Financial Statements for the Period 1 January – 30 June 2018
(Amounts are expressed in Turkish Lira (TRY) unless otherwise stated.)
16
IAS 40 Investment Property (Amendments)
Amendment to IAS 40, ‘Investment Property’ relating to transfers of investment property; effective from
annual periods beginning on or after 1 January 2018. These amendments clarify that to transfer to, or
from, investment properties there must be a change in use. To conclude if a property has changed use
there should be an assessment of whether the property meets the definition. This change must be
supported by evidence.
IFRS - 10 and IAS 28: Sale or Contribution of Assets between an Investor and its
Associate or Joint Venture (Amendments)
In December 2017, the POA postponed the effective date of this amendment indefinitely pending the
outcome of its research project on the equity method of accounting. Early application of the amendments
is still permitted.
(c) The New Standards, Amendments and Interpretations that are Issued by The
International Accounting Standards Board (IASB) but not Issued by (“POA”)
IASB issued Annual Improvements to IFRSs - 2015–2017 Cycle. The amendments are effective as of 1
January 2019. Earlier application is permitted. The Group will make the necessary changes after
adjustments are made from POA.
Annual Improvements to IFRS’s 2015-2017 Cycle
- IFRS 3 “Business Combinations” and IFRS 11 “Joint Arrangements” — IFRS 3 and IFRS 11 are
amended to clarify how a company accounts for increasing its interest in a joint operation that meets
the definition of a business. If a party obtains control, then the transaction is a business combination
achieved in stages and the acquiring party re-measures the previously held interest at fair value. If a
party maintains (or obtains) joint control, then the previously held interest is not re-measured.
- IAS 12 “Income Taxes” — IAS 12 is amended to clarify that all income tax consequences of dividends
(including payments on financial instruments classified as equity) are recognized consistently with the
transactions that generated the distributable profits – i.e. in profit or loss, other comprehensive income
or equity.
- IAS 23 “Borrowing Costs” — IAS 23 is amended to clarify that the general borrowings pool used to
calculate eligible borrowing costs excludes only borrowings that specifically finance qualifying assets
that are still under development or construction. Borrowings that were intended to specifically finance
qualifying assets that are now ready for their intended use or sale – or any non-qualifying assets – are
included in that general pool.
These amendments will be not effective on the Company’s financial position or its performance.
Changes and Mistakes in the Accounting Policies
An enterprise can only changes its accounting policies only in case of following conditions and apply
backwards;
Required by a standard or an interpretation
If it is in a character which provides a more appropriate and trustable way to present the effects of
the transactions and events on the financial statement, performance or cash flow of the enterprise
Parties who use the financial statements should have the opportunity to compare the financial
statements throughout the time in order to find out the trends of the financial position, performance
and cash flow. Therefore, as long as a change in an accounting policy does not meet one of the criteria
described above, same accounting policies should be used in every period and financial period. Financial
cost for inventories have not been calculated for this period. Necessary adjustments have been
made on prior periods’ financial statements.
LOKMAN HEKİM ENGÜRÜSAĞ SAĞLIK, TURİZM, EĞİTİM HİZMETLERİ VE İNŞAAT TAAHÜT A.Ş.
Notes to the Consolidated Financial Statements for the Period 1 January – 30 June 2018
(Amounts are expressed in Turkish Lira (TRY) unless otherwise stated.)
17
Comparative Information and Restatement of Prior Period Financial Statements
The accompanying financial statements is presented in comparison with the previous year in order to
identify the Group's financial condition, trends in performance and cash flows. In terms of comparative
information to conform to presentation in the current period financial statements are reclassified, where
necessary, and describes important differences.
2.2. Summary of Important Accounting Policies
2.2.1. Revenue;
Revenue means – in exchange of the health services provided – invoice amount of the invoiced services,
the amount to be invoiced for the performed but not invoiced services and the amount calculated based
on the completion level for not invoiced but still continuing services, less returns and discounts.
In case an uncertainty arises to collect a revenue amount which was presented in the financial
statements, uncollectable or the amount which becomes impossible to collect be considered as cost in
the financial statements rather than adjusting the first registered revenue.
2.2.2. Inventories;
Costs of inventories are compromise of cost of all purchases, conversion costs and other costs burdened
to perform the current position and condition of the inventories. For the inventory purchases with interim
payments, the differences between the cash value and future value are recognized as finance costs in
the period it occurred.
Inventory method is weighted average cost method.
Inventories are valued with the lowest of cost and net realizable value. Net realizable value is the value
expected sales value under normal conditions less the total of expected costs of completion and expected
sales costs in order to perform the sale.
It is assumed that the production activities would be at normal capacity on the distribution of fixed
general production costs to conversion costs. Normal capacity is the expected average production
amount under normal conditions within one or a few periods or sessions considering the loss of capacity
due to the planned repair and maintenance works. If the real production level is close to the normal
capacity, then this capacity is considered as normal capacity. If the actual production level is
continuously below from the pre-determined normal capacity, then the normal capacity is accepted as
realized actual capacity and all the fixed production costs add into the production costs of services.
The Company's actual capacity in Ankara Hospital of Sincan continued for periods, and has been
accepted as the normal capacity and this capacity calculations were made accordingly. Therefore,
the cost of an idle capacity has not been occurred.
2.2.3. Biological Assets
Biological assets are recognized initially at cost. They are valued at fair value at the end of each
reporting period. In cases where fair value cannot be calculated or determined clearly, so-called
biological asset is re-valued through its cost less all related accumulated depreciation and accumulated
provisions for loss. Gains or losses on the values are linked with the period profit or loss.
2.2.4. Tangible Assets
Tangible assets which are expected to be used within the company for more than one year are registered
with their costs at the time of purchase. In the following periods, revaluation method for lands and
buildings are revaluated based on the method for cost of other tangible assets. Costs of other tangible
assets which were purchased prior to 01 January 2005 are costs which are adjusted for inflation effects.
LOKMAN HEKİM ENGÜRÜSAĞ SAĞLIK, TURİZM, EĞİTİM HİZMETLERİ VE İNŞAAT TAAHÜT A.Ş.
Notes to the Consolidated Financial Statements for the Period 1 January – 30 June 2018
(Amounts are expressed in Turkish Lira (TRY) unless otherwise stated.)
18
The group used pro rata depreciation for tangible assets according to normal depreciation method. When
the Group determines the depreciation lives for its tangible assets, it considers the useful life of the
asset.
Costs of tangible assets which are purchased through leasing are the costs less the interest and foreign
exchange difference. Interests and foreign exchange differences are registered as financial costs in the
relevant period.
Group’s beneficial life for tangible assets are;
Buildings 50 Years
Machinery, plants and equipment 5 – 20 Years
Vehicles 5 Years
Fixtures 2 – 20 Years
Assets Purchased Through Leasing 5 – 20 Years
Other intangible assets 5 – 20 Years
2.2.5. Intangible Assets
Intangible assets which are expected to be used within the company for more than one year are
registered with its costs at the time of purchase. They are re-valued based on the cost model in the
following periods. Cost of Intangible assets which were purchased prior to 01 January 2005 are costs
which are adjusted for the inflation effect.
“Doctor Staff and Medical Licence Fee” is reported in Intangible assets as Rights for Lokman Hekim
Akay Hospital, Lokman Hekim Demet Hospital, Lokman Hekim Van Hospital and Lokman Hekim
Hayat Hospital,
According to the issued change in the Official Journal in 11 July 2013, transfer of staff and license
is allowed with article 6 of Private Hospital Regulation.
The Group takes the useful lives of the assets into consideration when determining the depreciation
lives of the Intangible assets. The Group determined useful lives for its Intangible assets 3 to 15 years.
2.2.6. Goodwill
Purchase price burdened related to the purchase of a company is distributed to the identifiable assets,
liabilities and conditional liabilities at the time of purchase of the purchased company. The difference
between purchase price and fair value of the identifiable assets, liabilities and conditional liabilities of
the purchased company is registered as goodwill in the consolidated financial statements. In the
mergers, assets, Intangible assets and conditional liabilities which are not stated in the financial
statements of the purchased company/enterprise but can be separated from the goodwill are reflected
to the consolidated financial statements with their fair values. Goodwill in the financial statements of
purchased company is not considered as identifiable assets.
In case of the buyers’ share of the fair values of the purchased identifiable assets, liabilities and
conditional liabilities exceeds the purchase price, then the difference is linked with the consolidated
income statement. In case any value decline in the goodwill amount, its effect is reflected to the period
results. Testing for the value decline at the same time every year to determine whether there is a value
decline in the goodwill amount or not.
Legal mergers among the enterprises which are under the control of the Group are considered within
the scope of UFRS 3. Therefore, no goodwill is calculated in such mergers. Moreover, transactions
occurred during legal mergers are subject to adjustment process during the preparation of consolidated
financial statements.
LOKMAN HEKİM ENGÜRÜSAĞ SAĞLIK, TURİZM, EĞİTİM HİZMETLERİ VE İNŞAAT TAAHÜT A.Ş.
Notes to the Consolidated Financial Statements for the Period 1 January – 30 June 2018
(Amounts are expressed in Turkish Lira (TRY) unless otherwise stated.)
19
2.2.7. Decline in the Values of Assets
According to IAS 36 – Decline in the Values of Assets standard, book values of tangible and intangible
assets and their recoverable values can be compared if it is deemed necessary due to domestic and
international economic indications. If it is forecasted that the book value of the asset exceeds the
recoverable value, then it is accepted that there is decline in the value of the asset.
Recoverable value is the lesser of the exercise price and market price. Forecasted decline in the value
is registered as loss at the term in which it is determined.
2.2.8. Financial Instruments
a) Cash and Cash Equivalents
Cash on hand of the Group consists of cash and bank deposits. Cash equivalents consist of receivables
from credit card. Bank deposit balances of foreign currencies are re-valued from the foreign exchange
rate of T.R. Central Bank at the date of balance sheet. Current values of the cash in the balance sheet
and deposits in the bank and receivables from credit card are the fair value of these assets.
b) Trade Receivables and Payables
Trade receivables and payables resulting from providing a service to a customer by the Group or
purchasing a good or service from a supplier are presented after clarified from deferred financing
revenues and costs.
It is assumed that the discounted values of trade receivables and provision for doubtful receivables are
equivalent to the fair values of the assets.
The group, in case there is an objective proof that the collecting is impossible, makes provisions for
doubtful receivables. The amount of this provision is registered value of the receivable less the
guarantees and warrantees.
Following making a provision for the doubtful receivables, in case all or a portion of the doubtful
receivable is not collected, the collected amount is written off from doubtful receivables and registered
as other revenues.
c) Other Receivables, Payables and Liabilities
Registered based on accrual basis and it is assumed that the registered values are equivalent to fair
values.
2.2.9. Benefits for Employees / Termination Indemnity
According to applicable Labor Law, the company shall pay a termination indemnity not less than 30 days
for each year for the employee who is fired from the company except those fired due to bad behaviors.
For this reason, the company has to estimate the total cost to be paid and discount the estimated
payments so that find the net present value. Therefore, the company reports its total liability at the
date of balance sheet which is discounted to net present value.
It is assumed that man who has worked 25 years and woman who has worked 20 years would be retired
and termination indemnity would be paid at that time. Accordingly, the company tries to find out the
expected termination indemnity liability which it would pay at the time of retirement or firing its
employees in the future. Net present value of the portion of the termination indemnity right hold by the
employee at the date of balance sheet within this total liability which is expected to be paid is registered
into the balance sheet as provision for termination indemnity. It is assumed that ratio of the number of
employees who were fired or leave the company in the previous periods without getting any termination
indemnity to the total number of employees would be the same in the following periods and total liability
is declined at this rate.
LOKMAN HEKİM ENGÜRÜSAĞ SAĞLIK, TURİZM, EĞİTİM HİZMETLERİ VE İNŞAAT TAAHÜT A.Ş.
Notes to the Consolidated Financial Statements for the Period 1 January – 30 June 2018
(Amounts are expressed in Turkish Lira (TRY) unless otherwise stated.)
20
The difference of the total termination indemnity between the two periods is distributed to cost of
interest, cost of service for the current period and actuarial income / loss. Cost of interest is the cost of
use of the liability in the previous period’s balance sheet during the period and equals to the liability
amount at the beginning of the period for the employees who are still working multiplied by discount
rate used in that year.
The cost of service for the current period is the portion of the termination indemnity at the time of it is
going to be paid which the employees get the right for termination indemnity for their services at the
time of balance sheet through discount rate. All other differences are reflected to actuarial income and
loss. Actuarial income / loss, cost of interest and cost of services for the current period are presented
in the comprehensive income statement.
Except from the wages, bonuses and other social benefits provided to employees, there is not any
contribution plan to be paid after the retirement or resigning period.
2.2.10. Taxation
Tax payable in the attached financial statements is consist of tax provision for the current period and
deferred tax. The provision for the liabilities regarding to the corporate tax to be resulted from the
activities in the current period is set based on the legal tax rates at the time of balance sheet. Deferred
tax asset/liability is the difference between account value and tax value (timing difference). Current tax
rate is considered on the calculation of deferred tax asset.
Deferred tax liability is presented in the financial statements for all taxable or deductible provisional
differences but deferred tax asset is presented in the financial statements provided that there are
taxable profits are possible from which the deductible provisional differences can be set off. Net deferred
tax assets resulting from the timing differences are reduced at the rate of the tax deductions provided
that it is not certain that they can be used in the following years according to the information on hand.
2.2.11. Related Parties
Parallel to the aim of these financial statements, related parties are considered and defined as the
companies which are linked to the shareholders, important managerial employees and board members,
their families and controlled by them or related to them, subsidiary and partnerships and minority
partners of the affiliates.
Shareholders, major managers of these companies and members of the board of the Company and their
families are also considered as related parties. Transactions made with the related parties are generally
in accordance with the market conditions. Key managerial employees are also defined as the related
parties of the company.
2.2.12. Costs of Borrowing
Bank loans with interest are registered at their net amounts after deducting the cost of borrowing.
Revenues or costs which are arising at the time of amortization or registration of the liabilities are linked
to income statement. Costs of borrowings are also registered based on accruals even if the maturities
have not become due yet at the time they arise.
2.2.13. Earnings (Loss) Per Share
Earnings (Loss) per share are calculated through net profit or loss of the period divided by the weighted
average of the number of common shares in the current period.
In Turkey, companies can increase their owners’ equity by distributing accumulated profits arise from
inflation adjustments with shares (free) to their existing stockholders.
LOKMAN HEKİM ENGÜRÜSAĞ SAĞLIK, TURİZM, EĞİTİM HİZMETLERİ VE İNŞAAT TAAHÜT A.Ş.
Notes to the Consolidated Financial Statements for the Period 1 January – 30 June 2018
(Amounts are expressed in Turkish Lira (TRY) unless otherwise stated.)
21
2.2.14. Events after the Balance Sheet Date
In case there are some events after the balance sheet date which requires adjustment entries, these
amounts in the financial statements are adjusted according to the new situation; but in case there are
events after the balance sheet date which does not require any adjustment entry, there are explanations
in the related period if the events are important.
2.2.15. Provisions, Conditional Liabilities and Conditional Assets
Provisions;
Provisions are the accruals provided that there would be a liability (legal or structural liability) resulting
from the events happened in the past, and it is probable that this liability will cause a decline in the
asset items and the liability amount can be determined reliably. Accured provisions are reviewed in
every balance sheet period and revised in order to reflect the current expectations.
Conditional Liabilities and Conditional Assets;
Transactions which cause commitment and conditional liability mean the conditions which are linked to
the result of one or more than one event that may happened in the future. Therefore, since some
transactions have possible damage, risk and uncertainty in the future, they are defined as items out of
balance sheet. In case there is a forecast for possible obligations or losses to be occurred in the future,
these liabilities are considered as costs and debt for the Company. However, income and profits which
are probable to occur in the future are presented in the financial statements.
2.2.16. Assets and Liabilities In terms of Foreign Currency
Assets in the balance sheet in terms of foreign currencies are converted to Turkish Lira based from
buying rate of foreign exchange and liabilities from selling rate of foreign exchange published by T.R.
Central Bank. Transactions with foreign currencies within the period are converted to Turkish Lira from
the actual rates at the date of transaction. Foreign exchange gains and losses arising from these
transactions are presented in the income statements. Rates used in the financial statements in 30 June
2018 and 31 December 2017 reports are as follows;
2.2.17. Important Accounting Review, Forecast and Assumptions
Preparation of financial statements requires management to apply policies and make decisions, forecasts
and assumptions which affect the assets, liabilities, incomes and losses which are reported. Real
outcomes may be different from these forecasts.
Forecasts and assumptions which are the basis of the forecasts should be revised all the time.
Important forecasts and assumptions used by the Company during the preparation of the financial
statements are as follows;
Useful lives of tangible and intangible assets
Discount rates used for trade receivables and payables
Provision rates for the receivables from Social Security Institutions (“SSI”)
Regarding to the employee benefits, retirement term, increase rate, discount rate, rate for not to
get any termination indemnity
Rates used for deferred tax calculation
Estimated operation results related to coming years as long as goodwill is based on the
impairment test
Income accurals arising from ongoing patient cares and progress payments
30 June 2018 31 December 2017
Buying Selling Buying Selling
USD 4.5607 4.5690 3.7719 3.7787
EUR 5.3092 5.3188 4.5155 4.5237
LOKMAN HEKİM ENGÜRÜSAĞ SAĞLIK, TURİZM, EĞİTİM HİZMETLERİ VE İNŞAAT TAAHÜT A.Ş.
Notes to the Consolidated Financial Statements for the Period 1 January – 30 June 2018
(Amounts are expressed in Turkish Lira (TRY) unless otherwise stated.)
22
3. OPERATION SEGMENT
Details of sales and receivables are calculated based on its sources such as hospitals, customers,
kind of treatment.
During first half of the year 2018 and same period of 2017, details of service sales based on The
Group’s each medical unit are as follows;
Service Sales/Hospitals 1 January - 30 June 2018
1 January - 30 June 2017
Amount % Amount %
Etlik Hospital Service Sales 17,505,592 13 14,888,006 13
Ankara Hospital Service Sales 40,328,763 31 33,273,061 29
Van Hospital Service Sales 28,589,433 22 28,041,342 25
Hayat Hospital Service Sales 9,982,380 8 8,157,579 7
Irbil Diagnostic Center Service Sales 1,254,749 1 1,642,267 2
Akay Hospital Service Sales 30,886,190 23 26,070,985 23
Demet Medical Center Service Sales 3,501,835 2 1,259,657 1
Total Sales 132,048,942 100 113,332,897 100
The summary of sales to Social Security Institution (SSI) and other sales are as follows;
Service Sales/Institution 1 January - 30 June
2018
1 January - 30 June
2017 Amount % Amount %
Sales to SSI* 65,222,429 49 62,987,760 56
Other Sales 66,826,513 51 50,345,137 44
Total Sales 132,048,942 100 113,332,897 100
As of 30 June 2018, details of trade receivables from Social Security Institution (SSI) and other
receivables are as follows;
Trade Receivables/Institution 30 June 2018 31 December 2017
Amount % Amount %
Receivables from SSI* 41,596,425 69 41,377,716 71
Other Receivables 18,846,334 31 17,389,018 29
Total 60,442,759 100 58,766,734 100
(*) Major customer of The Group is Social Security Institution (SSI).
Sales details based on treatment kind are as follows;
1 January - 30 June 2018 1 January - 30 June 2017
Number of
Patient Net Sales (%) Number of
Patient Net Sales (%)
Outpatient 535,361 59,379,971 45 486,932 48,417,457 43
Inpatient 31,319 72,668,971 55 29,680 64,915,440 57
Total 566,680 132,048,942 100 516,612 113,332,897 100
LOKMAN HEKİM ENGÜRÜSAĞ SAĞLIK, TURİZM, EĞİTİM HİZMETLERİ VE İNŞAAT TAAHÜT A.Ş.
Notes to the Consolidated Financial Statements for the Period 1 January – 30 June 2018
(Amounts are expressed in Turkish Lira (TRY) unless otherwise stated.)
23
4. CASH AND CASH EQUIVALENTS
The position of cash and cash equivalents as of end of the period is as follows;
30 June 2018
31 December 2017
Cash 549,391 506,949
Banks 1,743,932 1,450,406
Total 2,293,323 1,957,355
5. FINANCIAL LIABILITIES
The summary of short-term liabilities as of balance sheet date is as follows;
Short-Term Financial Liabilities 30 June
2018
31 December
2017
Short-Term Borrowings 29,280,663 9,613,490
Short-Term Portion of Long-Term Borrowings 17,630,774 18,432,537
Financial Leasing Debts 2,454,338 2,669,157
- Financial Leasing Debts 2,993,130 3,389,436
- Deferred Interest Cost (538,792) (720,279)
Total 49,365,775 30,715,184
The summary of long-term financial liabilities is as follows;
Long-Term Financial Liabilities 30 June 2018
31 December 2017
Long-Term Borrowings 43,641,304 39,336,037
Financial Leasing Debts 2,252,250 3,433,694
- Financial Leasing Debts 2,572,864 3,980,744
- Deferred Interest Cost (320,614) (547,050)
Total 45,893,554 42,769,731
Redemption schedule of bank borrowings is as follows;
Bank Borrowings 30 June
2018
31 December 2017
0 - 3 Months 8,736,378 4,780,769
3 - 12 Months 38,175,059 23,565,257
1 - 5 Years 37,917,606 34,701,609
More Than 5 Years 5,723,698 4,334,427
Total 90,552,741 67,382,062
Redemption schedule of financial leasings is as follows;
Financial Leasing 30 June 2018
31 December 2017
0 - 3 Months 709,044 724,533
3 - 12 Months 1,745,294 1,944,624
1 - 5 Years 2,252,250 3,433,694
Total 4,706,588 6,102,851
Mortgage amounting to TRY 102,665,001 has been given for bank borrowings.
(31 December 2017: TRY 92,935,001).
LOKMAN HEKİM ENGÜRÜSAĞ SAĞLIK, TURİZM, EĞİTİM HİZMETLERİ VE İNŞAAT TAAHÜT A.Ş.
Notes to the Consolidated Financial Statements for the Period 1 January – 30 June 2018
(Amounts are expressed in Turkish Lira (TRY) unless otherwise stated.)
24
6. TRADE RECEIVABLES AND TRADE PAYABLES
The summary of trade receivables as of end of the periods is as follows;
30 June 2018
31 December 2017
Trade Receivables 49,681,446 47,081,601
Notes Receivables 18,362 34,615
Rediscounts on Receivables (1,199,131) (1,205,643)
Doubtful Trade Receivables 2,703,803 2,605,191
Provision for Doubtful Trade Receivables (2,703,803) (2,605,191)
Credit Card Receivables 593,091 587,001
Trade Receivables from Related Parties 1,581,326 2,923,110
Income Accruals* 9,767,665 9,346,050
Total 60,442,759 58,766,734
(*) The total amount of income accruals is arising from ongoing patient cares.
The interest rate used for discounting receivables is 17% Average maturity for credit card
receivables is 40 days.
Transactions related to doubtful trade receivables with-in the period are as follows;
Doubtful Trade Receivables 30 June 2018
31 December 2017
Beginning of the Period 2,605,191 903,571
Worthless Receivables, Collections/Cancelation (300,910) (698,039)
Additions with-in the Period 399,522 2,399,659
End of the Period 2,703,803 2,605,191
Details of trade receivables from Social Security Institution (SSI) and others are as follows;
Trade Receivables/Institution 30 June 2018 31 December 2017
Amount % Amount %
Receivables from SSI* 41,596,425 69 41,377,716 71
Other Receivables 18,846,334 31 17,389,018 29
Total 60,442,759 100 58,766,734 100
(*) Major customer of The Group is Social Security Institution (SSI).
The summary of trade payables as of end of the periods is as follows;
30 June 2018
31 December 2017
Trade Payables 15,481,873 13,276,061
Notes Payables* 21,138,907 17,921,683
Rediscount on Payables (976,492) (1,030,920)
Other Trade Payables 279,775 496,188
Trade Payables to Related Parties 4,339,895 949,561
Expense Accruals 313,961 343,975
Total 40,577,919 31,956,548
The interest rate used for discounting payables is 17%.
(*) The amount of TRY 6,137,035 included in notes payables is composed of notes with 31 July
2018 maturity related to Akay Hospital (31 December 2017: TRY 6,137,035).
LOKMAN HEKİM ENGÜRÜSAĞ SAĞLIK, TURİZM, EĞİTİM HİZMETLERİ VE İNŞAAT TAAHÜT A.Ş.
Notes to the Consolidated Financial Statements for the Period 1 January – 30 June 2018
(Amounts are expressed in Turkish Lira (TRY) unless otherwise stated.)
25
7. OTHER RECEIVABLES AND OTHER PAYABLES
The Group’s other short-term receivables are as follows;
Other Short-Term Receivables
30 June 2018
31 December 2017
Deposits and Guarantees Given 60,793 55,284
Other Receivables 9,396 229,528
Total 70,189 284,812
Other long-term receivables are consist of deposits and guarantees given;
Other Long-Term Receivables
30 June
2018
31 December
2017
Deposits and Guarantees Given 254,941 112,177
Total 254,941 112,177
Other payables of The Group are short-term;
Other Payables
30 June 2018
31 December 2017
Due to Shareholders 5,040 4,300
Other Payables 94,660 179,826
Total 99,700 184,126
8. INVENTORIES
30 June 2018
31 December 2017
Medical Inventories 13,293,221 8,118,840
Feed Stocks 3,761,913 4,232,704
Other Stocks 574,918 662,107
Total 17,630,052 13,013,651
9. BIOLOGICAL ASSETS
Biological Assets
30 June 2018
31 December 2017
Book Value 15,343,729 12,927,962
Changes in the Fair Value 833,238 1,063,938
Total 16,176,967 13,991,900
Biological assets are recognized initially at cost. They are valued at fair value at the end of each
reporting period. The fair value of milk and fattening animals increased by TRY 444,539 in the
current period (31 December 2017: TRY 1,063,938).
As of 30 June 2018, the number of biological assets of the company is 1,406 (31 December 2017:
1,555).
The total amount of insurance on biological assets is TRY 1,867,500
(31 December 2017: TRY 4,008,000)
LOKMAN HEKİM ENGÜRÜSAĞ SAĞLIK, TURİZM, EĞİTİM HİZMETLERİ VE İNŞAAT TAAHÜT A.Ş.
Notes to the Consolidated Financial Statements for the Period 1 January – 30 June 2018
(Amounts are expressed in Turkish Lira (TRY) unless otherwise stated.)
26
10. TANGIBLE ASSETS
Changes in the tangible assets during first half of the year are as follows;
Tangible Assets
1 January
2018 Additions
Classification
Disposals
30 June
2018
Lands 11,262,750 - - - 11,262,750
Buildings 33,675,197 350,130 - - 34,025,327
Machinery, Equipment and Installations 18,847,421 2,393,938 - (1,622) 21,239,737
Vehicles 724,771 - - - 724,771
Furniture and Fittings 29,474,476 1,058,882 - (45,598) 30,487,760
Assets Acquired Through Financial Leases 19,516,618 - - - 19,516,618
Special Costs 8,460,935 521,336 - - 8,982,271
Other Tangible Assets 2,039,125 17,923 - - 2,057,048
Construction in Progress 7,003,502 4,251,074 - - 11,254,576
Total 131,004,795 8,593,283 - (47,220) 139,550,858
Accumulated Depreciation
1 January
2018
Depreciation
Expense Classification
Disposals
30 June
2018
Buildings (697,911) (355,107) - - (1,053,018)
Machinery, Equipment and Installations (8,224,436) (884,082) - - (9,108,518)
Vehicles (328,159) (58,204) - - (386,363)
Furniture and Fittings (18,171,662) (1,795,533) - 41,040 (19,926,155)
Assets Acquired Through Financial Leases (9,182,479) (794,260) - - (9,976,739)
Special Costs (3,622,887) (537,168) - - (4,160,055)
Other Tangible Assets (778,352) (129,525) - - (907,877)
Total (41,005,886) (4,553,879) - 41,040 (45,518,725)
Net 89,998,909 94,032,133
LOKMAN HEKİM ENGÜRÜSAĞ SAĞLIK, TURİZM, EĞİTİM HİZMETLERİ VE İNŞAAT TAAHÜT A.Ş.
Notes to the Consolidated Financial Statements for the Period 1 January – 30 June 2018
(Amounts are expressed in Turkish Lira (TRY) unless otherwise stated.)
27
Changes in the tangible assets with-in the 2017 are as follows;
Tangible Assets
1 January 2017
Additions
Classification
Disposals
31 December 2017
Lands 6,343,750 1,194,000 3,725,000 - 11,262,750
Buildings 36,986,250 413,947 (3,725,000) - 33,675,197
Machinery, Equipment and Installations 15,707,538 3,147,883 - (8,000) 18,847,421
Vehicles 602,315 244,660 - (122,204) 724,771
Furniture and Fittings 26,979,087 2,503,938 - (8,549) 29,474,476
Assets Acquired Through Financial Leases 14,709,430 4,807,188 - - 19,516,618
Special Costs 6,743,670 1,717,265 - - 8,460,935
Other Tangible Assets 2,001,628 37,497 - - 2,039,125
Construction in Progress 406,268 6,597,234 - - 7,003,502
Total 110,479,936 20,663,612 - (138,753) 131,004,795
Accumulated Depreciation
1 January 2017
Depreciation Expense
Classification
Disposals
31 December 2017
Buildings - (697,911) - - (697,911)
Machinery, Equipment and Installations (6,704,623) (1,527,413) - 7,600 (8,224,436)
Vehicles (341,357) (80,319) - 93,517 (328,159)
Furniture and Fittings (14,528,996) (3,642,881) - 215 (18,171,662)
Assets Acquired Through Financial Leases (7,613,878) (1,568,601) - - (9,182,479)
Special Costs (2,410,544) (1,212,343) - - (3,622,887)
Other Tangible Assets (515,622) (262,730) - - (778,352)
Total (32,115,020) (8,992,198) - 101,332 (41,005,886)
Net 78,364,916 89,998,909
The total insurance amount on tangible assets is TRY 203,755,000 (31 December 2017: TRY 136,030,500).
LOKMAN HEKİM ENGÜRÜSAĞ SAĞLIK, TURİZM, EĞİTİM HİZMETLERİ VE İNŞAAT TAAHÜT A.Ş.
Notes to the Consolidated Financial Statements for the Period 1 January – 30 June 2018
(Amounts are expressed in Turkish Lira (TRY) unless otherwise stated.)
28
11. INTANGIBLE ASSETS
Changes in intangible assets during the period are as follows;
Intangible Assets
1 January 2018
Additions
Disposals / Classification
30 June 2018
Rights 325,072 199,535 (39,670) 484,935
Doctor Staff and Medical Licence Fee 23,138,881 - - 23,138,881
Total 23,463,953 199,535 (39,670) 23,623,816
Accumulated Depreciation
1 January
2018
Depreciation
Expense
Disposals /
Classification
30 June
2018
Rights (34,658) (34,884) - (69,542)
Total (34,658) (34,884) - (69,542)
Net 23,429,295 23,554,274
Changes which have been realized in the year 2017 are as follos;
Intangible Assets
1 January 2017
Additions
Disposals / Classification
31 December 2017
Rights 492,165 111,912 (279,005) 325,072
Doctor Staff and Medical Licence Fee 23,138,881 - - 23,138,881
Total 23,631,046 111,912 (279,005) 23,463,953
Accumulated Depreciation
1 January 2017
Depreciation Expense
Disposals / Classification
31 December 2017
Rights (8,532) (26,126) - (34,658)
Total (8,532) (26,126) - (34,658)
Net 23,622,514 23,429,295
12. INVESTMENT PROPERTY
1 January 2018
Revaluation
Classification
Disposals
30 June 2018
Buildings 6,400,000 - - - 6,400,000
Total 6,400,000 - - - 6,400,000
1 January 2017
Revaluation
Classification
Disposals
31 December 2017
Buildings 6,400,000 - - - 6,400,000
Total 6,400,000 - - - 6,400,000
Invesment properties consist of several blocks which are rented to The Council of Higher Education.
The Company has assessed investment property at its fair value based revaluation report dated 5 January 2017,
and have made necessary adjustments on the prior period’s financial statements.
LOKMAN HEKİM ENGÜRÜSAĞ SAĞLIK, TURİZM, EĞİTİM HİZMETLERİ VE İNŞAAT TAAHÜT A.Ş.
Notes to the Consolidated Financial Statements for the Period 1 January – 30 June 2018
(Amounts are expressed in Turkish Lira (TRY) unless otherwise stated.)
29
13. GOODWILL
30 June
2018
31 December
2017
Goodwill
1,848,336
1,848,336
Total 1,848,336
1,848,336
Goodwill resulting from the acquisition of 37.83% of the shares of Hay Süt A.Ş. by the Company on
30 December 2011.
14. PROVISIONS, CONDINGENT ASSETS AND LIABILITIES
Lawsuits and Provisions;
Lawsuits and Provisions – 30 June 2018 Amount Provision
Lawsuits to be Filed by The Group and Enforcement Proceedings
12,868,243
-
Lawsuits to be Filed Against to The Group Related to Labor Payments
384,556
(365,586)
Lawsuits and Provisions – 31 December 2017
Amount Provision
Lawsuits be Filed by The Group and Enforcement Proceedings
8,660,062
-
Lawsuits be Filed Against to The Group Related to Labor Payments
365,586
(365,586)
As of 30 June 2018, 516 lawsuits have been filed in favor of The Group with total amount of TRY
12,868,243. 159 lawsuits have been filed against to The Group and total amount of labor cases was
TRY 384,556 (31 December 2017: 528 lawsuits have been filed in favor of The Group with total
amount of TRY 8,660,062 and 117 lawsuits have been filed against to The Group and total amount
of labor cases was TRY 365,586).
Contingent Liabilities of The Group as of 30 June 2018 and 31 December 2017 are as follows;
Type
Given To 30 June
2018 31 December
2017
Mortgages Given (Loan) Banks (*) 102,665,001 92,935,001
Checks of Collaterals Given Banks 9,200,000 9,200,000
Letter of Collaterals Given Courts 1,360,671 1,006,454
Letter of Collaterals Given
The Council of Higher Education(**)
1.000.000 -
Letter of Collaterals Given Subscription Procedures 762,884 762,884
Letter of Collaterals Given PPP Hospital Projects 223,000 -
Letter of Collaterals Given Puplic Tenders 218,793 193,423
Total 115,430,349 104,097,762
(*) Consist of real estates given to banks as mortgages which TRY 7,600,000 of the real estates
belongs to shareholder and TRY 20,000,000 of which belongs to related parties.
(**) The letter is given to The Council of Higher Education on behalf of T.R. Lokman Hekim
University.
LOKMAN HEKİM ENGÜRÜSAĞ SAĞLIK, TURİZM, EĞİTİM HİZMETLERİ VE İNŞAAT TAAHÜT A.Ş.
Notes to the Consolidated Financial Statements for the Period 1 January – 30 June 2018
(Amounts are expressed in Turkish Lira (TRY) unless otherwise stated.)
30
Contingent Assets;
Type Received From 30 June
2018 31 December
2017
Checks of Collaterals Received Customer 1,829,119 1,829,119
Checks of Collaterals Received Customer 147,810 € 147,810 €
Letter of Collaterals Received Customer 352,000 260,000
TRY Equivalent 2,965,872 2,756,556
15. COMMITMENTS
The summary of collaterals, pledges, mortgages (“CPM”) are as follows;
30 June
2018
31 December
2017
A. CPM's Given On Behalf of Company's Own Legal Entity 112,095,869 100,846,282
B. CPM's Given On Behalf of the Consolidated Companies 3,334,480 3,251,480
C. CPM's Given for Continuation of Its Activities On Behalf of Third Parties
- -
D. Total Amount of Other CPM's - -
- Total Amount of CPM's Given On Behalf of the Majority Shareholder
- -
- Total Amount of CPM's Given On Behalf of Group Companies Which are not In Scope of B and C.
- -
- Total Amount of CPM's Given On Behalf of Third Parties Which are not In Scope of C.
- -
Total 115,430,349 104,097,762
There is a cross-surety in behalf of each consolidated Company for bank credit and there are
personal sureties of Mustafa Sarıoğlu (Chairman of the Board), Mehmet Altuğ (Member of the
Board), Celil Göçer (Member of the Board) for all bank loans and financial leasings.
16. BENEFITS PROVIDED TO EMPLOYEES
30 June 2018 31 December
2017
Provisions for Termination Indemnity 3,580,852 3,210,619
Provisions for Days Off 719,945 498,598
Total 4,300,797 3,709,217
The Group assumes that the men will leave their jobs after working 25 years and women after 20
years. It is assumed as of the balance sheet date, the termination indemnity will increase by 15%
annually (increase on wages of employee) until the date of retirement (31 December 2017: %5).
Thus, when an employee is retired, The Group calculate the portion of his termination indemnity
that corresponds to the seniority at the time of the balance sheet date. The annual upper limit
for the termination indemnity is TRY 5,434.42 (31 December 2017: TRY 5,001.76).
Assumptions used in the calculation of termination indemnity are as follows;
30 June
2018
31 December
2017
Working Period
Female:20 years
Female:20 years
Male:25 years Male:25 years
Increase of Wage
15%
10%
Turnover Rate without Receiving Termination Indemnity 66%
63%
Discount Rate
18%
13%
LOKMAN HEKİM ENGÜRÜSAĞ SAĞLIK, TURİZM, EĞİTİM HİZMETLERİ VE İNŞAAT TAAHÜT A.Ş.
Notes to the Consolidated Financial Statements for the Period 1 January – 30 June 2018
(Amounts are expressed in Turkish Lira (TRY) unless otherwise stated.)
31
Transactions with-in the period related to termination indemnity are as follows;
Provisions for Termination Indemnity 30 June 2018
31 December
2017
Beginning of the Period 1,687,700 886,490
Payments (604,934) (897,403)
Interest Cost 200,363 82,074
Period Expense 266,631 290,222
Actuarial Gain / Loss 845,176 1,326,317
End of the Period 2,394,937 1,687,700
Termination Indemnity Liability associated with Akay Hospital*
1,185,916 1,522,919
Total 3,580,852 3,210,619
(*) It states liabilities that taken over during the acquisition process of Akay Hospital dated 28 July
2016. The Company had paid TRY 337,004 to the Akay Hospital personnels with-in the current period.
(31 December 2017: TRY 423,018)
Actuarial income and losses have been reported under the Shareholder’s Equity.
Provisions for Days Off;
According to the applicable Code of Labor in Turkey, in case a labor agreement is terminated for
any reason, the company has to pay wages for the annual days off which the employee did not take
to the employee or his/her legal representatives at the time of termination.
In-period activities for days off are given as below;
Provisions for Days Off 30 June 2018
31 December
2017
Beginning of the Period 498,598 488,389
Additions with-in the Period 221,347 10,209
End of the Period 719,945 498,598
17. OTHER CURRENT ASSETS / OTHER SHORT-TERM LIABILITIES
The Group’s other current assets as of end of the periods are as follows;
Other Current Assets 30 June
2018 31 December
2017
Deferred VAT 1,047,146 1,207,424
Work Advances 934,044 1,293,030
Advances given to Personnel 29,277 65,394
Total 2,010,467 2,565,848
LOKMAN HEKİM ENGÜRÜSAĞ SAĞLIK, TURİZM, EĞİTİM HİZMETLERİ VE İNŞAAT TAAHÜT A.Ş.
Notes to the Consolidated Financial Statements for the Period 1 January – 30 June 2018
(Amounts are expressed in Turkish Lira (TRY) unless otherwise stated.)
32
Major part of other short-term liabilities consist of taxes and funds payable;
Other Short-Term Liabilities
30 June 2018
31 December 2017
Taxes and Funds Payable* 7,287,710 7,968,317
Deferred Social Security Premiums - 678,837
Compulsory P.P.S. Checkoff 58,371 54,819
Income from Salary Contracts Promotions for the Following Months
76,271
152,542
Total 7,422,352 8,854,515
(*) The part of TRY 5,566,437 amount of the Deferred or Restructed Taxes were deferred tax
liabilities due to being declared a coercive cause by the Revenue Administration Department due to
the earthquake that occurred in Van province on 23 November 2011. The reported amount of TRY
5,566,437 as long-term tax liabilities has been classified as current tax and funds payable in the
current period (31 December 2017: TRY 5,566,437).
18. ASSETS / LIABILITIES RELATED TO CURRENT PERIOD TAX
Assets related to current period tax as of end of the periods are as follows;
Assets Related Current Period Tax 30 June 2018
31 December 2017
Prepaid Tax and Funds (Short-term) 365,529 988,797
Total 365,529 988,797
Liabilities related to current period tax consist of deferred, restructed tax payables;
Liabilities Related Current Period Tax 30 June 2018 31 December 2017
Deferred or Restructed Taxes (Long-term) 19,482,531 22,265,750
Total 19,482,531 22,265,750
(*) The part of TRY 5,566,437 amount of the Deferred or Restructed Taxes were deferred tax
liabilities due to being declared a coercive cause by the Revenue Administration Department due to
the earthquake that occurred in Van province on 23 November 2011. The reported amount of TRY
5,566,437 as long-term tax liabilities has been classified as current tax and funds payable in the
current period (31 December 2017: TRY 5,566,437).
19. PREPAID EXPENSES AND DEFERRED REVENUES
The summary of short-term prepaid expenses is as follows;
Prepaid Expenses 30 June 2018
31 December 2017
Advances Given to Suppliers 11,631,204 3,750,375
Prepaid Expenses for the Following Months 1,139,774 1,939,782
Total 12,770,978 5,690,157
LOKMAN HEKİM ENGÜRÜSAĞ SAĞLIK, TURİZM, EĞİTİM HİZMETLERİ VE İNŞAAT TAAHÜT A.Ş.
Notes to the Consolidated Financial Statements for the Period 1 January – 30 June 2018
(Amounts are expressed in Turkish Lira (TRY) unless otherwise stated.)
33
Long-term prepaid expenses are as follows;
Prepaid Expenses (Long-Term)
30 June 2018
31 December 2017
Expenses for the Following Years 207,637 441,501
Related Party Expenses* 10,419,627 861,792
Total 10,627,264 1,303,293
It has been detailed in Note – 31 “Related Party Disclosures”.
Shor-term deferred income consist of received advances;
Deferred Income
30 June 2018
31 December 2017
Advances Received 144,370 453,563
Total 144,370 453,563
As of 30 June 2018, major part of long-term deferred income consists of received advances;
Deferred Income (Long-Term) 30 June
2018 31 December
2017
Income from Salary Contracts Promotion for the Following Years
38,135 38,135
Advances Received 1,938,786
2,033,786
Total 1,976,921 2,071,921
20. PAYABLES UNDER EMPLOYEE BENEFITS
The summary of payables under employee benefits is as follows,
Payables Under Employee Benefits 30 June 2018
31 December 2017
Wage Accruals 5,587,042 5,217,364
Social Security Premiums Payable 3,962,459 4,001,452
Total 9,549,501 9,218,816
21. SHAREHOLDER’S EQUITY
Capital;
30 June
2018 31 December
2017
Capital
24,000,000 24,000,000
Paid Capital
24,000,000 24,000,000
The Company has increased the registered capital ceiling from TRY 100,000,000 to TRY 200,000,000 to
be effective between the years 2015-2019.
Repurchased Shares;
30 June 2018
31 December 2017
Repurchased Shares (-) (6,849,934) (4,619,179)
Total (6,849,934) (4,619,179)
LOKMAN HEKİM ENGÜRÜSAĞ SAĞLIK, TURİZM, EĞİTİM HİZMETLERİ VE İNŞAAT TAAHÜT A.Ş.
Notes to the Consolidated Financial Statements for the Period 1 January – 30 June 2018
(Amounts are expressed in Turkish Lira (TRY) unless otherwise stated.)
34
The second repurchasing program carried out in order to to ensure price stability of the shares was
approved in the General Assembly Meeting date 1 June 2018. Upper price limit for the repurchasing
shares is TRY 15, in addition to this The Company is able to repurchase shares until it reach to 10%
limit of the total capital which is amount of TRY 2,400,000 included prior repurchases. Within the
scope of program, Lokman Hekim Van Sağlık Hizmetleri İnşaat Taahhüt ve Ticaret A.Ş. is one of the
subsidiaries that is able to repurchase shares. The management of The Company have been
authorized to repurchase shares for three years.
The Company has sold 430,000 shares with a nominal value to Lokman Hekim Van A.Ş. with the
price TRY 7.06 per share as of 13 April 2018. After the sale, the current share situation of The
Company as of the date of the report together with the other repurchases of the Company and its
subsidiaries are stated below.
Number of shares owned by Lokman Hekim Engürüsağ A.Ş. / Share in Capital (%):1,352,849/5.64
Number of shares owned by Lokman Hekim Van A.Ş. / Share in Capital (%) : 534,733/2.23
Total Purchases Under the Repurchase Program / Share in Capital (%) :1,887,582/7.86
Share Premiums;
Share premiums consist of cash inflows resulting from the sale of shares at market prices. These
premiums are shown under equity and can not be distributed. However, it can be used for future
capital increases.
Revaluation Funds;
Revaluation Funds 30 June
2018 31 December
2017
Revaluation Fund from Tangible Assets 25,305,936 25,305,936
Deferred Tax Effect (2,783,653) (2,783,653)
Total 22,522,283 22,522,283
Revaluation fund related to tangible assets includes value increases arising from the lands and
buildings which are demonstrated at their fair value. The net deferred tax effect is calculated as
11% after the assumption that the 50% exemption right stated in Article 5 of the Corporate Tax
Law was used in the calculation of deferred tax effect of value increases.
The Company has revaluated buildings and buildings reported in tangible assets in accordance with the
report dated 5 January 2017 prepared by D Gayrimenkul Değerleme ve Danışmanlık A.Ş., an
independent real estate appraisal company licensed by the CMB, which is not related to the Company.
The management of the company thinks that the revaluation company has occupational accumulation
related to the subject and has updated information about the class and place of the land and buildings.
Defined Benefit Plans Re-measurement Gains / Losses (Actuarial Gain/Loss);
Defined Benefit Plans Re-measurement Gains/(Losses)
30 June 2018
31 December 2017
Beginning of the Period (2,387,814) (1,312,039)
Additions with-in the Period (845,176) (1,326,565)
Deferred Tax Effect 185,939 250,790
Total (3,047,051) (2,387,814)
LOKMAN HEKİM ENGÜRÜSAĞ SAĞLIK, TURİZM, EĞİTİM HİZMETLERİ VE İNŞAAT TAAHÜT A.Ş.
Notes to the Consolidated Financial Statements for the Period 1 January – 30 June 2018
(Amounts are expressed in Turkish Lira (TRY) unless otherwise stated.)
35
A total severance pay burden between the two periods, interest expense in the current period
service cost and actuarial gains / losses are divided into sections. Interest cost of the previous fiscal
year and the cost of the use of the balance sheet or in the period of the obligation to those who
continue to work for the amount of the liability at the beginning of the period, multiplied by the
amount of the discount rate used in that year. Current service cost in the current accounting period
of the severance pay they deserve to be paid for work of employees in the amount of the discount
rate, expected to reach the part resulting from the balance sheet day. Other than that the
differences reflect the actuarial gains and losses. Actuarial gains / losses recognized in equity and
current service cost and interest cost is recognized in the statement of comprehensive income.
Currency Translation Differences;
The Group's functional currency is the Turkish Lira. Iraq one of the Group companies Engürüsağ
General Trading Co., Ltd. Sti. (Erbil) which operates in Iraq prepares its financial statements in U.S.
dollars. Related company's financial statements are translated into the functional currency. Financial
statements have been exchanged into Turkish Lira in accordance with the International Accounting
Standards (IAS) No. 21, "The Effects of Changes in Foreign Exchange Rates”.
Currency Translation Differences 30 June 2018
31 December 2017
Beginning of the Period (247,337) 217,582
Additions with-in the Period (142,902) (464,919)
Total (390,239) (247,337)
In terms of translation; asset items, payables, shareholders' equity are translated to the functional
currency with rates of the balance sheet date. Income and expenses are translated with rates of
transaction date.
Legal Reserves;
Restricted Reserves 30 June 2018
31 December 2017
Legal Reserves at the Begining of the Period 7,036,533 4,497,027
Legal Reserves allocated from Prior Years’ Profit
930,000 942,468
Legal Reserves allocated from Repurchased Shares
2,230,755 1,597,038
Total 10,197,288 7,036,533
The amount of TRY 6,849,934 of the restricted reserves consists of repurchased shares
(31 December 2017: TRY 4,619,179).
In accordance with the Turkish Commercial Code, companies are required to assign legal reserves
before profit appropriations. The legal reserve consists of first and second legal reserves, allocated
in accordance with the Turkish Commercial Code. The first legal reserve is allocated from last
period’s statutory profits at the rate of 5% per annum until the total reserve reaches 1/5 of the
paid-in share capital (not indexed to the inflation). The second legal reserve is allocated after the
first legal reserve and dividends, at the rate of 10% per annum of all cash dividend distributions.
Prior years’ profit/loss;
Prior years’ profit is TRY 11,015,837 (31 December 2017: TRY 7,882,990).
LOKMAN HEKİM ENGÜRÜSAĞ SAĞLIK, TURİZM, EĞİTİM HİZMETLERİ VE İNŞAAT TAAHÜT A.Ş.
Notes to the Consolidated Financial Statements for the Period 1 January – 30 June 2018
(Amounts are expressed in Turkish Lira (TRY) unless otherwise stated.)
36
Non-controlling Shares;
Non-controlling Shares 30 June 2018
31 December 2017
Non-controlling Shares in Equity 1,412,673 1,412,673
Non-controlling Shares in Prior Years' Profit 16,229,112 2,327,277
Non-controlling Shares in Period’s Profit/Loss 2,923,030 16,351,835
Cash Dividend Distribution (2,450,000) (2,450,000)
Total 18,114,115 17,641,785
22. SALES AND COST OF SALES
Details of sales and costs of sales during the first half of the years 2018 and 2017;
Sales
1 January
30 June 2018
1 January
30 June 2017
Sales of Healthcare Service 132,048,942 113,332,897
Sales of Biological Assets and Milk* 4,155,452 3,505,799
Sales of Real Estates ond Office 709,236 -
Total 136,913,630 116,838,696
Cost of Sales
Costs of Healthcare Service Sales (115,110,123) (102,235,153)
Costs of Biological Assets and Milk Sales (2,340,311) (2,753,966)
Total (117,450,434) (104,989,119)
Gross Profit 19,495,942 11,849,577
(*) Biological assets are recognized initially at cost. They are valued at fair value at the end of each
reporting period. The fair value of milk and fattening animals increased by TRY 444,539 in the current
period (31 December 2017: TRY 1,063,938).
Costs of sales based on its type are as follows;
Cost of Sales
1 January
30 June 2018
1 January
30 June 2017
Expenses related to Salaries (71,081,597) (62,442,175)
Raw Material and Supplies (27,918,642) (26,749,603)
Depreciation and Amortization Expenses (4.521.852) (4,378,919)
Energy, Fuel and Water etc. Expenses (3.979.752) (3,138,919)
Maintenance, Service Expenses (2,334,959) (2,087,440)
Rental Expenses (5,409,668) (4,385,099)
Entertainment Expenses (235,980) (158,584)
Communication, Textile Expenses and Fixed Assets recognized as Expense
(892,587) (708,137)
Other (1,075,397) (940,243)
Total (117,450,434) (104,989,119)
LOKMAN HEKİM ENGÜRÜSAĞ SAĞLIK, TURİZM, EĞİTİM HİZMETLERİ VE İNŞAAT TAAHÜT A.Ş.
Notes to the Consolidated Financial Statements for the Period 1 January – 30 June 2018
(Amounts are expressed in Turkish Lira (TRY) unless otherwise stated.)
37
23. MARKETING, SALES AND DISTRIBUTION EXPENSES, GENERAL ADMINISTRATIVE
EXPENSES
The summary of general administriarive expenses and marketing, sales and distribution expenses
realized with-in first half of the years are as follows;
1 January
30 June 2018
1 January
30 June 2017
General Administrative Expenses (4,566,492) (3,706,006)
Marketing, Sales and Distribution Expenses (1,391,025) (1,685,563)
Total (5,957,517) (5,391,569)
General administrative expenses based on its type are as follows;
General Administrative Expenses
1 January
30 June
2018
1 January
30 June
2017
Expenses related to Salaries (3,171,364) (2,182,158)
Representation, Travel and Transportation Expenses
(203,983) (165,875)
Consultancy, Advisory, Litigation Execution and Notary Expenses
(591,605) (728,176)
Energy, Fuel and Water etc. Expenses (68,290) (50,430)
Maintenance, Service Expenses (18,489) (15,401)
Rental Expenses (234,388) (179,035)
Communication Expenses (4,770) (15,094)
Depreciation Expenses (66,911) (110,721)
General Assembly Expenses (27,081) (20,434)
Other Expenses (48,977) (48,089)
Taxes, Charges, Dutuies Payable (130,634) (190,593)
Total (4,566,492) (3,706,006)
Marketing, sales and distribution expenses based on its type are as follows;
Marketing, Sales and Distribution Expenses
1 January
30 June 2018
1 January
30 June 2017
Advertising Expenses (694,906) (646,911)
Personnel Expenses (132,309) (311,253)
Rental Expenses (39,330) (90,388)
Travel and Representation Expenses (96,983) (130,728)
Commission Expenses (276,245) (458,284)
Other Expenses (151,252) (47,999)
Total (1,391,025) (1,685,563)
LOKMAN HEKİM ENGÜRÜSAĞ SAĞLIK, TURİZM, EĞİTİM HİZMETLERİ VE İNŞAAT TAAHÜT A.Ş.
Notes to the Consolidated Financial Statements for the Period 1 January – 30 June 2018
(Amounts are expressed in Turkish Lira (TRY) unless otherwise stated.)
38
24. OTHER INCOME
The summary of other income is as follows;
Other Income
1 January
30 June 2018
1 January
30 June 2017
Provisions No Longer Required 7,039 1,100
Income from Salary Contracts 76,271 108,885
Gain on Sale of Non-current Assets 25,232 182,823
Electricity Sales Revenue 1,540 -
Other 81,553 56,268
Total 191,635 349,076
25. OTHER EXPENSES
The summary of other expenses is as follows;
Other Expenses
1 January
30 June 2018
1 January
30 June 2017
Provision Expenses (11,061) (797,705)
Grants and Donations (29,000) (125,125)
Taxes and Other Penalties (141,554) (65,954)
Expenses related to Prior Periods (43,909) (32,622)
Other (333,166) (149,752)
Total (558,690) (1,171,158)
26. INCOME (EXPENSE) FROM INVESTING ACTIVITIES
Income from investing activities consists of rental income;
Income From Investing Activities
1 January
30 June 2018
1 January
30 June 2017
Rental Income 276,458 249,523
Total 276,458 249,523
27. FINANCIAL INCOME
The summary of financial income of the Group during first half of the 2018 with respect to same
period of 2017 are as follows;
Financial Income
1 January
30 June
2018
1 January
30 June
2017
Interest Income 691,154 261,563
Foreign Exchange Gains 81,171 33,851
Rediscount Interest Income 2,167,587 1,728,400
Total 2,939,912 2,023,814
LOKMAN HEKİM ENGÜRÜSAĞ SAĞLIK, TURİZM, EĞİTİM HİZMETLERİ VE İNŞAAT TAAHÜT A.Ş.
Notes to the Consolidated Financial Statements for the Period 1 January – 30 June 2018
(Amounts are expressed in Turkish Lira (TRY) unless otherwise stated.)
39
28. FINANCIAL EXPENSES
The summary of financial expenses are as follows;
Financial Expenses
1 January 30 June
2018
1 January
30 June 2017
Foreign Exchange Losses (24,025) (76,682)
Rediscount Interest Expenses (1,713,346) (1,893,893)
Interest Expenses (6,534,756) (3,372,775)
Total (8,272,127) (5,343,350)
29. TAX REVENUE / EXPENSE
Corporate Tax;
The rate of corporate tax is 22% (31 December 2017: 20%) which is calculated on legal tax base
that is the commercial income of the companies plus non-deductible costs which are not allowed
according to tax regulations less the exemptions which are allowed according to tax codes.
There is withholding on the dividend payments and this withholding liability is accrued in the
dividend payment period. Dividend payments made to limited liable tax payer institutions which
gain income through a company in Turkey or permanent agent and corporations resides in Turkey
are subject to withholding tax at a rate of 15%.
Double Taxation Agreements are also taken into consideration on the determination of withholding
rates on the dividend payments made to limited liable tax payers and real persons. Contribution of
previous years’ profits to capital are not considered as dividend payment, therefore not subject to
withholding tax.
Rules regarding to transfer pricing are set under Article 13 of Corporate Tax Law, section “Hidden
dividend distribution through transfer pricing”. General communiqué on the hidden dividend
distribution through transfer pricing dated 18 November 2007 includes regulations about the
implementation. If a tax payer interacts with a related party through selling / buying of goods or
services and prices cannot be determined in such a way that independent of both parties and each
no has control on the other, then related profits are considered to be distributed in a hidden way
through transfer pricing. Such hidden dividend distributions can not be deducted from corporate tax
calculation. According to Turkish tax regulations, financial losses can be carried forward for 5 years
in order to be written off from the future corporate profits. However, financial losses cannot be
written off from prior years’ profits.
There is not any procedure like reaching a mutual agreement with the tax office for the taxes to be
paid in Turkey. Corporate tax declarations are submitted in 4 months following end of financial year.
Tax authorities can inspect the tax declarations and related documents for 5 consecutive years and
make necessary adjustments based on the findings;
Tax income / expense is as follows:
Tax Income/Expense for the Period
1 January
30 June 2018
1 January
30 June 2017
Tax Expense for the Period (619,815) (537,932)
Deferred Tax Income/Expense (105,749) 2,874,135
Net (725,564) 2,336,203
LOKMAN HEKİM ENGÜRÜSAĞ SAĞLIK, TURİZM, EĞİTİM HİZMETLERİ VE İNŞAAT TAAHÜT A.Ş.
Notes to the Consolidated Financial Statements for the Period 1 January – 30 June 2018
(Amounts are expressed in Turkish Lira (TRY) unless otherwise stated.)
40
Income tax liability for the period is as follows;
Income Tax Liability of the Period 30 June 2018 31 December 2017
Provisions for Income Taxes and Other Legal Liabilities
858,037 1,140,357
Prepaid Taxes and Funds on Profit for the Period
- -
Total 858,037 1,140,357
Contribution to Investment and Reduced Corparate Tax;
Corporate Tax Law Article 32 / A of the application with the reduced corporate tax came into practice
on 28 February 2009. The promotion of investment since 2009 has started on a different system
than before. These systems are based on the 2009/15199 and 2012/3305 are described by the
Decisions of the Council of Ministers.
Reduced corporate tax investments to be made with the application of the proceeds from the
contribution amount until it reach the reduced corporate tax rate of taxation is intended. These
investments contribute to the system by determining the rate and amount of investment gains in
the amount of the contribution is based on the principle of less taxation. Defined contribution
amount for each investment until the reduced corporate tax rate by applying the tax to be charged
in the amount of the contribution of the investment is promoted.
Contribution to investment amount reduced corporate tax to be applied for collection with the
foregone tax through investments amount to be covered by the state. The investment contribution
rate is represented by the division of total contribution amount by the total investment incentive.
Reduced corporate tax contribution amount will be applied until it reaches to amount of contribution
investment. Therefore, reduction in corporate tax practice is not limited to a certain period.
Deferred Tax;
30 June 2018
Temporary
Differences
Tax
Assets
Tax
Liabilities
Reduced Corporation Tax - 14,012,866 -
Revaluation Differences of Biological Assets 782,895 172,237 -
Revaluation Fund of Investment Property
2,912,579
-
640,767
Revaluation Increases from Non-Current Assets*
25,305,936
-
2,783,653
Value Adjustments of Non-Current Assets**
9,886,168
-
2,118,757
Doctor Payroll Premiums 313,961 69,071 -
Provisions for Benefits Provided to Employees 4,300,797 946,176 -
Provisions for Receivables 2,194,761 481,209 -
Financial Loss 5,631,544 1,238,939 -
Rediscounts on Receivables 1,093,498 240,570 -
Rediscounts on Payables 971,650 - 213,762
Provisions for Lawsuits 365,586 80,429 -
Currency Translation Differences and Interest Accruals
329,906
72,545
-
Total
17,314,042 5,756,939
Net
11,557,103
LOKMAN HEKİM ENGÜRÜSAĞ SAĞLIK, TURİZM, EĞİTİM HİZMETLERİ VE İNŞAAT TAAHÜT A.Ş.
Notes to the Consolidated Financial Statements for the Period 1 January – 30 June 2018
(Amounts are expressed in Turkish Lira (TRY) unless otherwise stated.)
41
Details of deferred tax as of 31 December 2017 are as follows;
31 December 2017
Temporary
Differences Tax Assets
Tax
Liabilities
Reduced Corporation Tax - 12,647,644 -
Revaluation Differences of Biological Assets 93,939 - 20,667
Revaluation Fund of Investment Property 2,912,579 - 640,767
Revaluation Increases from Non-Current
Assets* 25,305,936
-
2,783,653
Value Adjustments of Non-Current Assets** 4,022,658 - 834,142
Inventory Adjustments 698,181 153,600 -
Doctor Payroll Premiums 293,981 64,676 -
Provisions for Benefits Provided to Employees 3,709,217 816,028 -
Provisions for Receivables 2,402,728 528,601 -
Financial Loss 6,249,342 1,374,855 -
Rediscounts on Receivables 1,146,919 252,322 -
Rediscounts on Payables 1,030,261 - 226,658
Provisions for Lawsuits 365,586 80,429 -
Currency Translation Differences and Interest Accruals
293,842
64,645
-
Total
15,982,800 4,505,887
Net
11,476,913
(*) Company made the calculation of deferred tax of appreciation which occurred after the result of
revaluation of land and buildings with assumption of getting benefit from the exception at the rate of
50% which is indicated in Article 5 in Corporate Tax Law (31 December 2017: 50%). Conditions for
getting benefit from this exception are like below;
Real Estates will be in company’s asset minimum for 2 years.
Profits arising from sales of Real Estates will be held in a private fund account at liabilities
during 5 years.
Sale price will be collected at the end of following the second year after sale is made.
(**) This amount is net adjustment over the other intangible assets separated from intangible assets
that revaluation made for it (value adjustment which is made over its amortizations because of
calculation of amortization according to its cost and useful life) and effect of deferred tax is considered
as 22%.
According to Turkish Tax Law, 50% of the profit arising from sales of fixed assets that held by the
Company minimum for 2 years is exempted from tax. (31 December 2017:75%) Under this condition,
net tax effect is calculated as 11%. The Company have used the actual rate (50%) when calculate the
deferred tax.
30. EARNINGS PER SHARE
1 January
30 June 2018
1 January
30 June 2017
Net Profit for the Period (Parent Shares) 4,434,273 1,722,929
Number of Shares 24,000,000 24,000,000
Earnings / Loss per share 0.184761 0.071789
LOKMAN HEKİM ENGÜRÜSAĞ SAĞLIK, TURİZM, EĞİTİM HİZMETLERİ VE İNŞAAT TAAHÜT A.Ş.
Notes to the Consolidated Financial Statements for the Period 1 January – 30 June 2018
(Amounts are expressed in Turkish Lira (TRY) unless otherwise stated.)
42
31. RELATED PARTY DISCLOSURES
According to IAS 24 – “Related Party Disclosures”; shareholders, key management personnel and Board of
Directors members, their close family members and the legal entities over which these related parties
exercise control and significant influence are considered and expressed as “related parties”.The summary
of balances and transactions between the Group and related parties is as follows;
Receivables from Related Parties 30 June 2018 31 December 2017
Commercial
Non Commercial
Commercial
Non Commercial
Van Divan Sağlık Eğitim Turizm San. Tic. A.Ş.
1,555,008
-
2,765,202
-
Safi Sağlık Sanayi Ticaret A.Ş. 26,318 - - -
Pozitron Sağlık Hiz. San. ve Tic. Ltd. Şti. - - 72,234 -
Pek Sağlık Hizm. San. ve Tic. Ltd. Şti. - - 24,626 -
Koç Medikal Tıb. Mal. Tic. Ltd. Şti. - - 61,048 -
Total 1,581,326 - 2,923,110 -
Payables to related parties are as follows;
Payables to Related Parties 30 June 2018 31 December 2017
Commercial
Non Commercial
Commercial
Non Commercial
Lokman Hekim Tıbbi Hizmetler Ltd.Şti. 969,856 - 501,751 -
Medisina Grup Sağ. Dan. Eğt. İnş. Tem. Tic. Ltd. Şti.
97,880
-
138,347
-
Necip Sağlık Hizm. San. ve Tic. Ltd. Şti. 31,472 - 27,857 -
Afşar Matbaacılık Ofset ve Tipo Tesisleri 22,138 - - -
Pek Sağlık Hizm. San. ve Tic. Ltd. Şti. 60,133 - - -
Koç Medikal Tıb. Mal. Tic. Ltd. Şti. 111,763 - - -
Bilgen İnşaat Tic. Ltd. Şti. 2,911,120 - - -
Özdemir İnş. Taah. Turz. San. İç ve Dış Ltd. Şti.
13,452
-
-
-
Pozitron Sağlık Hiz. San. ve Tic. Ltd. Şti. 39,744 - - -
Safi Sağlık Sanayi Ticaret A.Ş. - - 209,984 -
Üst Yönetim Kadrosuna Yöneticilik, Mesleki ve Diğer Faaliyetlerden Borçlar
16,934
5,040
39,810
4,300
Diğer 65,403 - - -
Total 4,339,895 5,040 949,561 4,300
NET 4,344,935 953,861
As of 30 June 2018, prepaid expenses to related parties consist of advance payments in the scope of
affiliation between The Company and T.R. Lokman Hekim University;
30 June 2018 2018
31 December 2017
Prepaid Expenses to Related Parties
Commercial Non
Commercial Commercial
Non
Commercial
Sevgi Vakfı 1,930,426
- 861,792
-
T.R. Lokman Hekim University 8,489,201 - - -
Total 10,419,627 -
861,792 -
LOKMAN HEKİM ENGÜRÜSAĞ SAĞLIK, TURİZM, EĞİTİM HİZMETLERİ VE İNŞAAT TAAHÜT A.Ş.
Notes to the Consolidated Financial Statements for the Period 1 January – 30 June 2018
(Amounts are expressed in Turkish Lira (TRY) unless otherwise stated.)
43
Income and expenses arising from related parties are as follows;
Income/Expense 1 January - 30 June 2018 1 January - 30 June 2017
Income Expense
Income Expense
Afşar Matbaacılık Ofset ve Tipo Tes.(Muhlis Afşar)
- -
- (53,712)
Akgül Grup Gıda Tem. Turz. Rek.
Dan Tic. Ltd. Şti. 123,186 (6,161)
97,300 (13,177)
Koç Medikal Tıb. Mal. Tic. Ltd. Şti. 24,593 (205,313)
3,600 (14,339)
Medisina Grup Sağ. Dan. Eğt. İnş. Tem. Tic. Ltd. Şti.
- (181,626) - (165,459)
Necip Sağlık Hizm. San. ve Tic. Ltd. Şti. - (171,416) - -
Pek Sağlık Hizm. San. ve Tic. Ltd.
Şti. - (338,423) - -
Lokman Hekim Tıbbi Hizmetler Tic. Ltd. Şti.
- (2,374,525)
- (1,828,730)
Özdemir İnş. Taah. Müh. Turz. Nak. Mak. San. Tic. Ltd. Şti
- (65,780)
- (58,260)
Şekerciler Gıda Tic. Ltd. Şti. - -
- (2,395)
Pozitron Sağlık Hiz. San. ve Tic. Ltd. Şti.
- (751,316)
- (627,893)
Üst Yönetim Kadrosuna Yöneticilik, Mesleki ve Diğer Faaliyetlerden Gelir/Giderler
684 (511,996) - (800,550)
Total 148,463 (4,606,556)
100,900 (3,564,515)
NET
(4,458,093)
(3,463,615)
Expenses related to benefits provided to key managers are in the “Benefits Provided for the Executive
Management”.
LOKMAN HEKİM ENGÜRÜSAĞ SAĞLIK, TURİZM, EĞİTİM HİZMETLERİ VE İNŞAAT TAAHÜT A.Ş.
Notes to the Consolidated Financial Statements for the Period 1 January – 30 June 2018
(Amounts are expressed in Turkish Lira (TRY) unless otherwise stated.)
44
32. LEVELS AND CHARACTERISTICS OF RISKS ARISING FROM FINANCIAL INSTRUMENTS
Credit Risk: The Company’s credit risk can arise from its trade receivables. Company management evaluates its trade receivables considering
past experiences and current economic situation. Company management does not envision additional risk about trade receivables .
30 June 2018
Receivables
Bank
Deposits Other
Trade Receivables Other Receivables
Related
Parties Other
Related
Parties Other
The Maximum Amount of Exposure to Credit Risk as of Reporting
Date (A+B) 1,581,326 58,861,433 - 325,130 1,743,932 549,391
- The Amount of Maximum Risk that Have Been Secured
with Collaterals, etc. - - - - - -
A. Net Book Value of Financial Assets that are neither Past Due Nor
Impaired 1,581,326 58,861,433 - 325,130 1,743,932 549,391
B. Net Book Value of Impaired Assets - - - - - -
- Overdue (Gross Book Value) - 2,703,803 - - - -
- Impairment (-) - (2,703,803) - - - -
31 December 2017
Receivables
Bank
Deposits Other
Trade Receivables Other Receivables
Related
Parties Other
Related
Parties Other
The Maximum Amount of Exposure to Credit Risk as of Reporting
Date (A+B) 2,923,110 55,843,624 - 369,389 1,450,406 506,949
- The Amount of Maximum Risk that Have Been Secured
with Collaterals, etc. - - - - - -
A. Net Book Value of Financial Assets that are neither Past Due Nor
Impaired 2,923,110 55,843,624 - 369,389 1,450,406 506,949
B. Net Book Value of Impaired Assets - - - - - -
- Overdue (Gross Book Value) - 2,605,191 - - - -
- Impairment (-) - (2,605,191) - - - -
LOKMAN HEKİM ENGÜRÜSAĞ SAĞLIK, TURİZM, EĞİTİM HİZMETLERİ VE İNŞAAT TAAHÜT A.Ş.
Notes to the Consolidated Financial Statements for the Period 1 January – 30 June 2018
(Amounts are expressed in Turkish Lira (TRY) unless otherwise stated.)
45
Liquidity Risk: Liquidity risk comprises the risks arising from the inability to fund the increase in the assets, the inability to cover the liabilities due
and the operations performed in illiquid markets. In the framework of liquidity risk management, funding sources are being diversified and sufficient
cash and cash equivalents are held. Statement that demonstrates the company’s current and previous liquidity risk is below.
30 June 2018
Contractual Maturities Book Value
Total Cash Outflow
According to Contract
(VI=I+II+III+IV+V)
Less than
3 Months (I)
3-12
Months (II)
1-5
Years (III)
More than
5 Years (IV)
On Demand
Non-Derivative Financial Liabilities
Financial Liabilities 95,259,329 109,247,629 7,881,939 44,388,804 50,295,545 6,681,341 -
Financial Leasing Liabilities 4,706,588 5,540,100 850,863 2,116,373 2,572,864 - -
Expected Maturities Book Value Total Cash Outflow
Expected (V=I+II+III+IV)
Less than 3 Months
(I)
3-12 Months
(II)
1-5 Years (III)
More than 5 Years
(IV)
On Demand
Non-Derivative Financial Liabilities
Trade Payables 40,577,919 41,554,911 36,620,780 4,933,631 - - -
Other Payables 99,700 99,700 99,700 - - - -
Tax Liabilities on Period's Profit 858,037 858,037 - 858,037 - - -
Debt Provisions 365,586 365,586 - - - - 365,586
Other Liabilities 7,422,352 7,422,352 2,226,706 5,195,646 - - -
Provisions Related to Employee Benefits 4,300,797 4,300,797 - - - - 4,300,797
LOKMAN HEKİM ENGÜRÜSAĞ SAĞLIK, TURİZM, EĞİTİM HİZMETLERİ VE İNŞAAT TAAHÜT A.Ş.
Notes to the Consolidated Financial Statements for the Period 1 January – 30 June 2018
(Amounts are expressed in Turkish Lira (TRY) unless otherwise stated.)
46
As of 31 December 2017, The Company’s liquidity risk is as follows;
31 December 2017
Contractual Maturities Book Value
Total Cash Outflow According to
Contract
(VI=I+II+III+IV+V)
Less than 3 Months
(I)
3-12 Months
(II)
1-5 Years (III)
More than 5 Years
(IV)
On Demand
Non-Derivative Financial Liabilities
Financial Liabilities 67,382,064 78,096,382 5,640,952 26,987,630 40,689,050 4,778,749 -
Financial Leasing Liabilities 6,102,851 7,275,714 876,691 2,418,280 3,980,743 - -
Expected Maturities Book Value
Total Cash Outflow
Expected (V=I+II+III+IV)
Less than
3 Months (I)
3-12
Months (II)
1-5
Years (III)
More than
5 Years (IV)
On
Demand
Non-Derivative Financial Liabilities
Trade Payables 31,956,548 32,987,468 24,634,293 8,353,175 - - -
Other Payables 184,126 184,126 184,126 - - - -
Tax Liabilities on Period's Profit 1,140,357 1,140,357 - 1,140,357 - - -
Debt Provisions 365,586 365,586 - - - - 365,586
Other Liabilities 8,854,515 8,854,515 2,589,135 6,265,380 - - -
Provisions Related to Employee Benefits 3,709,217 3,709,217 - - - - 3,709,217
LOKMAN HEKİM ENGÜRÜSAĞ SAĞLIK, TURİZM, EĞİTİM HİZMETLERİ VE İNŞAAT TAAHÜT A.Ş.
Notes to the Consolidated Financial Statements for the period 1 January – 30 June 2018
(Amounts are expressed in Turkish Lira (TRY) unless otherwise stated.)
47
Currency Risk:
Foreign Currency Position Table
30 June 2018
TRY Equivalent (Functional
Currency)
USD EUR
1. Trade Receivables 1,534,522 310,758 22,084
2a. Monetary Financial Assets (Cash, Bank
Accounts Included Etc.) 233,736 51,200 43
2b. Non-Monetary Financial Assets - - -
3. Other 892,903 195,782 -
4. Current Assets (1 +2 +3) 2,661,161 557,740 22,127
5. Trade Receivables - - -
6a. Monetary Financial Assets - - -
6b. Non-Monetary Financial Assets - - -
7. Other - - -
8. Non-Current Assets (5 +6 +7) - - -
9. Total Assets (4 +8) 2,661,161 557,740 22,127
10. Trade Payables 62,320 2,227 9,825
11. Financial Liabilities - - -
12a. Other Monetary Liabilities 26,756 5,180 590
12b. Other Non-Monetary Liabilities - - -
13. Short-Term Liabilities (10+11+12) 89,076 7,407 10,415
14. Trade Payables - - -
15. Financial Liabilities - - -
16 A. Other Monetary Liabilities - - -
16 B. Other Non-Monetary Liabilities - - -
17. Long-Term Liabilities (14+15+16) - - -
18. Total Liabilities (13 +17) 89,076 7,407 10,415
19. Off-Balance Sheet Foreign Currency
Derivative Instruments Net Asset /
(Liability) Position (19a-19b)
- - -
19a. Active-Balance Sheet Foreign
Currency Derivative Assets - - -
19b. Off-Balance Sheet Foreign Currency
Derivative Assets - - -
20. Net Foreign Currency Asset /
(Liability) Position (9-18+19) 2,572,085 550,333 11,712
21. Monetary Accounts Net Foreign
Currency Asset / (Liability) Position
(1+2a+5+6a-10-11-12a-14-15-16a)
1,679,181 354,551 11,712
22. Fair Value Of Financial Instruments
Used To Manage Foreign Currency
Position
- - -
23. Amount Of Hedged Foreign Currency
Assets - - -
24. Amount Of Currency Hedged
Liabilities - - -
25. Export - - -
26. Import - - -
LOKMAN HEKİM ENGÜRÜSAĞ SAĞLIK, TURİZM, EĞİTİM HİZMETLERİ VE İNŞAAT TAAHÜT A.Ş.
Notes to the Consolidated Financial Statements for the Period 1 January – 30 June 2018
(Amounts are expressed in Turkish Lira (TRY) unless otherwise stated.)
48
As of 31 December 2017;
Foreign Currency Position Table
31 December 2017
TRY Equivalent
(Functional
Currency)
USD EUR
1. Trade Receivables 1,038,131 258,415 14,044
2a. Monetary Financial Assets (Cash, Bank
Accounts Included Etc.) 4,526 1,200 -
2b. Non-Monetary Financial Assets - - -
3. Other 615,026 163,032 19
4. Current Assets (1 +2 +3) 1,657,683 422,647 14,063
5. Trade Receivables - - -
6a. Monetary Financial Assets - - -
6b. Non-Monetary Financial Assets - - -
7. Other - - -
8. Non-Current Assets (5 +6 +7) - - -
9. Total Assets (4 +8) 1,657,683 422,647 14,063
10. Trade Payables 41,114 6,774 3,447
11. Financial Liabilities - - -
12a. Other Monetary Liabilities - - -
12b. Other Non-Monetary Liabilities 53,257 14,119 -
13. Short-Term Liabilities (10+11+12) 94,371 20,894 3,447
14. Trade Payables - - -
15. Financial Liabilities - - -
16 A. Other Monetary Liabilities - - -
16 B. Other Non-Monetary Liabilities - - -
17. Long-Term Liabilities (14+15+16) - - -
18. Total Liabilities (13 +17) 94,371 20,894 3,447
19. Off-Balance Sheet Foreign Currency
Derivative Instruments Net Asset /
(Liability) Position (19a-19b)
- - -
19a. Active-Balance Sheet Foreign
Currency Derivative Assets - - -
19b. Off-Balance Sheet Foreign Currency
Derivative Assets - - -
20. Net Foreign Currency Asset /
(Liability) Position (9-18+19) 1,563,312 401,753 10,616
21. Monetary Accounts Net Foreign
Currency Asset / (Liability) Position
(1+2a+5+6a-10-11-12a-14-15-16a)
1,001,543 252,841 10,597
22. Fair Value Of Financial Instruments
Used To Manage Foreign Currency
Position
- - -
23. Amount Of Hedged Foreign Currency
Assets - - -
24. Amount Of Currency Hedged
Liabilities - - -
25. Export - - -
26. Import - - -
LOKMAN HEKİM ENGÜRÜSAĞ SAĞLIK, TURİZM, EĞİTİM HİZMETLERİ VE İNŞAAT TAAHÜT A.Ş.
Notes to the Consolidated Financial Statements for the Period 1 January – 30 June 2018
(Amounts are expressed in Turkish Lira (TRY) unless otherwise stated.)
49
Sensitivity Analysis:
Sensitivity analysis have been made in order to indicate the base scenario that as of 30 June
2018 and 31 December 2017, 10% depreciation and appreciation of the Turkish Lira against the
exchange rate and assuming that all the variables, including the interest rates, are fixed.
30 June 2018 Gain / Loss
Foreign Exchange
Appreciation
Foreign Exchange
Depreciation
In case +/-10% Fluctuation of USD Rate
1- U.S. Dollar Net Asset / Liability 250,990 (250,990)
2- Hedged Portion From U.S. Dollar Risk (-) - -
3- U.S. Dollar Net Effect (1 +2) 250,990 (250,990)
In case +/-10% Fluctuation of EURO Rate
4- EURO Net Asset / Liability 6,218 (6,218)
5- Hedged Portion From EURO Risk (-) - -
6- EURO Net Effect (4+5) 6,218 (6,218)
TOTAL (3+6) 257,208 (257,208)
As of 31 December 2017;
31 December 2017 Gain / Loss
Foreign Exchange
Appreciation
Foreign Exchange
Depreciation
In case +/-10% Fluctuation of USD Rate
1- U.S. Dollar Net Asset / Liability 151,537 (151,537)
2- Hedged Portion From U.S. Dollar Risk (-) - -
3- U.S. Dollar Net Effect (1 +2) 151,537 (151,537)
In case +/-10% Fluctuation of EURO Rate
4- EURO Net Asset / Liability 4,794 (4,794)
5- Hedged Portion From EURO Risk (-) - -
6- EURO Net Effect (4+5) 4,794 (4,794)
TOTAL (3+6) 156,331 (156,331)
LOKMAN HEKİM ENGÜRÜSAĞ SAĞLIK, TURİZM, EĞİTİM HİZMETLERİ VE İNŞAAT TAAHÜT A.Ş.
Notes to the Consolidated Financial Statements for the Period 1 January – 30 June 2018
(Amounts are expressed in Turkish Lira (TRY) unless otherwise stated.)
50
33. NOTES TO CASH FLOW STATEMENT
Cash flow statement have been presented with consolidated financial statements.
Cash-Flow Items Begining of
the Period
Genereting
Cash Flow
Non-
Generating
Cash Flow*
End of the
Period
Short-Term Borrowings 28,046,027 7,648,830 11,216,580 46,911,437
Long-Term Borrowings 39,336,037 13,868,486 (9,573,219) 43,641,304
Security Issuance - - - -
Financial Leasing Payables
(Short-Term)
2,669,157 (1,371,592) 1,156,773 2,454,338
Financial Leasing Payables
(Long-Term)
3,433,694 - (1,181,444) 2,252,250
(*) Interest accruals and fair value diffirences have been reported in this column.
34. FINANCIAL INSTRUMENTS- EXPLONATIONS ON THE FAIR VALUE AND
FINANCIAL RISK MANAGEMENT
Fair Value Of Financial Instruments
Fair value is the amount which can be measurable with closest market price that can be obtained in
a sale process except forced sale or liquidation in which there are applicants for both selling and
buying. The estimated fair values of financial instruments have been determined using available
market information by the Group, using appropriate valuation methodologies. However, judgment is
necessarily required to interpret market data to determine the estimated fair value. While the
management of the Group has used available market information in estimating the fair values, the
market information may not be fully reflective of the value that could be realized in the current
circumstances. The following methods and assumptions are used for the determination of fair values
of financial instruments:
Fair values of cash and cash equivalents, including accrued interest, and other financial assets are
assumed to approximate their carrying amounts due to their short-term maturity and being subject
to insignificant credit risk. Fair values of trade receivables net of doubtful receivables are assumed
to approximate their carrying amounts.
Fair Value Hierarchy Table
The group classifies the fair value measurement of each class of financial instruments according to
the source, using the three-level hierarchy, as follows:
Level 1: Market price valuation techniques for the determined financial instruments traded in markets
(unadjusted)
Level 2: Other valuation techniques includes direct or indirect observable inputs
Level 3: Valuation techniques does not contains observable market inputs
LOKMAN HEKİM ENGÜRÜSAĞ SAĞLIK, TURİZM, EĞİTİM HİZMETLERİ VE İNŞAAT TAAHÜT A.Ş.
Notes to the Consolidated Financial Statements for the Period 1 January – 30 June 2018
(Amounts are expressed in Turkish Lira (TRY) unless otherwise stated.)
51
30 June 2018 Seviye 1 Seviye 2 Seviye 3
Valuation Inputs to Fair Value
Biological Assets - - 16,176,967
Land and Buildings - - 45,288,077
Goodwill - - 1,848,336
Doctor Staff and Medical Licence Fee - - 23,138,881
Investment Property - - 6,400,000
As of 31 December 2017;
31 December 2017 Seviye 1 Seviye 2 Seviye 3
Valuation Inputs to Fair Value
Biological Assets - - 13,991,900
Land and Buildings - - 44,937,947
Goodwill - - 1,848,336
Doctor Staff and Medical Licence Fee - - 23,138,881
Investment Property - - 6,400,000
35. SUBSEQUENT EVENTS
An operating contract is signed with Ankara Bilkent City Hospital under PM&R project for 5 years.
At the meeting of the Board of Directors of the Company dated 13 July, 2018, The Company has
decided to sell the In Vitro Fertilization Center License which was included in Lokman Hekim Akay
Hospital License with a total amount of of TRY 1,4 million + VAT which equals to TRY 1,6 million (TRY
900,000 cash and check for TRY 700,000, which has average maturity of 5 months). On the basis of
more efficient use of the hospital structure and intensive purchasing demands, a profit of TRY 1,1
million was generated from sales of the unit.
Elazığ City Hospital started patient admission on 1 August 2018 with-in the scope of PM&R project.
With-in the scope of the Company's Repurchase Program, The Company has sold 9,550 shares with
a nominal value of TRY 637,551 to Lokman Hekim Van A.Ş. in the price range of TRY 5.38 – 5.46 per
share as of 2 August, 2018. After the sale, the current share information as of the date of the report
together with the other repurchases of the Company and its subsidiaries are stated below.
Number of shares owned by Lokman Hekim Engürüsağ A.Ş. / Share in Capital (%) : 1,352,849/5.64
Number of shares owned by Lokman Hekim Van A.Ş. / Share in Capital (%) : 534,733/2.23
Total Purchases Under the Repurchase Program / Share in Capital (%) :1,887,582/7.86
As a result of the changes in Medical Enforcement Declaration (MED), the service charges of
cardiology, cardiovascular surgery, tumor surgeon, childbirth have been increased ranging from 75%
to 225% and the service charges of laboratory and radiology operations have been discounted
approximately 5%. The long-awaited change in MED is expected to affect positively the Group's
activities, particularly in Akay, Ankara and Van Hospitals where the price increases are more effective.