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Mavi Giyim Sanayi ve Ticaret

Anonim Şirketi and

Its Subsidiaries

Consolidated Financial Statements

As At and For The Year Ended

31 January 2018

With Independent Auditor’s Report on

Consolidated Financial Statements Thereon

14 March 2018

This report includes 2 pages of independent auditor’s report and

76 pages of consolidated financial statements together with their

explanatory notes.

Mavi Giyim Sanayi ve Ticaret Anonim Şirketi and

Its Subsidiaries

Table of Contents

Independent Auditor’s Report

Consolidated Statement of Financial Position

Consolidated Statement of Profit or Loss and Other Comprehensive Income

Consolidated Statement of Changes in Equity

Consolidated Statement of Cash Flows

Notes to the Consolidated Financial Statements

Mavi Giyim Sanayi ve Ticaret Anonim Şirketi and Its Subsidiaries

Consolidated Statements of Financial Position

As at 31 January 2018 (Amounts are expressed in thousands of Turkish Lira (“TL”), unless otherwise stated.)

1

Notes

Audited

31 January 2018

Audited

Restated (1)

31 January 2017

ASSETS

Current assets

Cash and cash equivalents 4 266,280 158,056

Trade receivables 7 112,996 109,381

- Due from related parties 6 -- 4,059

- Due from third parties 112,996 105,322

Other receivables 8 24,187 21,491

- Due from third parties 24,187 21,491

Derivatives 29 848 7,336

Inventories 9 320,351 287,844

Prepayments 10 23,358 20,388

Current tax asset 27 183 5,287

Other current assets 17 13,176 15,597

Total current assets 761,379 625,380

Non-current assets

Other receivables 8 2,981 2,014

- Due from third parties 2,981 2,014

Prepayments 10 106 68

Property and equipment 11 156,033 136,579

Intangible assets 12 47,900 55,551

Goodwill 13 99,699 100,472

Deferred tax assets 27 7,145 6,746

Total non-current assets 313,864 301,430

TOTAL ASSETS 1,075,243 926,810

(1)See Note 2.3

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

Mavi Giyim Sanayi ve Ticaret Anonim Şirketi and Its Subsidiaries

Consolidated Statements of Financial Position (continued)

As at 31 January 2018 (Amounts are expressed in thousands of Turkish Lira (“TL”), unless otherwise stated.)

2

Notes

Audited

31 January

2018

Audited

Restated (1)

31 January 2017

LIABILITIES

Current liabilities

Loans and borrowings 5 309,099 230,814

Trade payables 7 366,455 299,515

- Due to related parties 6 122,672 108,740

- Due to third parties 7 243,783 190,775

Payables to employees 16 18,081 14,849

Other payables 8 13,619 86,721

- Due to related parties 6 7,420 76,365

- Due to third parties 6,199 10,356

Derivatives 235 --

Current tax liabilities 27 4,476 203

Provisions 14 9,767 10,630

- Provisions for employee benefits 2,359 2,159

- Other provisions 7,408 8,471

Deferred revenue 10 14,566 11,985

Other current liabilities 17 5,879 9,746

Total current liabilities 742,177 664,463

Non-current liabilities

Loans and borrowings 5 68,736

105,209

Provisions 14 4,741 3,151

- Provisions for employee benefits 4,741 3,151

Deferred revenue 10 641 119

Deferred tax liabilities 27 11,767 13,398

Total non-current liabilities 85,885 121,877

TOTAL LIABILITIES 828,062 786,340

EQUITY

Equity attributable to owners of the Company

Share capital 18 49,657 49,657

Reserves 2,491 (16,749)

Retained earnings 197,588 115,797

Equity attributable to owners of the Company 249,736 148,705

Non-controlling interests (2,555) (8,235)

Total equity 247,181 140,470

TOTAL EQUITY AND LIABILITIES 1,075,243 926,810

(1)See Note 2.3

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

Mavi Giyim Sanayi ve Ticaret Anonim Şirketi and Its Subsidiaries

Consolidated Statements of Profit or Loss and Other Comprehensive Income

For the year ended 31 January 2018 (Amounts are expressed in thousands of Turkish Lira (“TL”), unless otherwise stated.)

3

Notes

Audited 1 February 2017 –

31 January 2018

Restated (1) 1 February 2016 –

31 January 2017

Revenue 19 1,781,656 1,307,934

Cost of sales 20 (875,313) (640,915)

Gross profit 906,343 667,019

Administrative expenses 21 (100,317) (76,670)

Selling and marketing expenses 21 (594,042) (448,336)

Research and development expenses 22 (23,058) (18,657)

Other income 23 2,544 1,924

Other expenses 23 (1,279) (1,601)

Operating profit 190,191 123,680

Finance income 25 4,092 15,311

Finance cost 26 (82,042) (70,531)

Net finance costs (77,950) (55,220)

Profit before tax 112,241 68,461

Income tax expense (22,239) (16,647)

- Tax expense 27 (23,936) (15,524)

- Deferred tax income/(expenses) 27 1,697 (1,123)

Profit 90,002 51,813

Profit attributable to:

Owners of the Company 85,871 50,064

Non-controlling interests 4,131 1,749

Other comprehensive income

Items that will not be reclassified to profit or loss

Remeasurement of defined benefit liability 15 (877) (313)

- Related tax 193 63

Items that are or may be reclassified to profit or loss

Foreign operations - foreign currency translation differences 16,737 436

Cash flow hedging reserves 841 --

- Related tax (185) --

Other comprehensive income net of tax 16,709 186

Total comprehensive income attributable to:

Owners of the Company 101,031 53,111

Non-controlling interests 5,680 (1,112)

Total comprehensive income 106,711 51,999

Earnings per share 28

Basic earnings per share 28 1.7293 1.0082

Diluted earnings per share 28 1.7293 1.0082

Earnings before interest, tax, depreciation and

amortization (EBITDA) 36 252,084 170,209

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

Mavi Giyim Sanayi ve Ticaret Anonim Şirketi and Its Subsidiaries

Consolidated Statement of Changes In Equity

For the year ended 31 January 2018 (Amounts are expressed in thousands of Turkish Lira (“TL”), unless otherwise stated.)

4

Other comprehensive

income not to be

reclassified to profit

or loss

Other comprehensive income

to be reclassified to profit or

loss Retained earnings

Share

capital

Legal

reserves

Purchase of

share of

entities

under

common

control

Remeasu

rements

of

defined

benefit

liability

Other

reserves

Foreign

currency

translation

reserve

Hedging

reserve

Retained

earnings Net profit

Total

NCI Total equity

Balance as at 1

February 2016

49,657

14,819

(35,757)

(4,211)

(4,080) 6,855

--

34,889

33,453

95,625

-- 95,625

Transfers

--

2,608

-

-

--

-- --

--

30,845

(33,453)

--

-- --

Acquisition of

subsidiary with NCI

--

--

-

-

--

-- --

--

(1)

-

-

(1)

(7,123) (7,124)

Total comprehensive

income

--

--

-

-

(250)

-- 3,297

--

--

50,064

53,111

(1,112) 51,999

Total balance as at 31

January 2017

49,657

17,427

(35,757)

(4,461)

(4,080) 10,152

--

65,733

50,064

148,735

(8,235) 140,500

Balance as at 1

February 2017 49,657 17,427 (35,757) (4,461) (4,080) 10,152 -- 65,733 50,064 148,735 (8,235) 140,500

Impact of correction of

errors (1) (30) (30) (30)

Restated balance as at

1 February 2017 49,657 17,427 (35,757) (4,461) (4,080) 10,122 -- 65,733 50,064 148,705 (8,235) 140,470

Profit 85,871 85,871 4,131 90,002

Other comprehensive

in