BIRLESIM_2021_ANNUAL REPORT

BİRLEŞİM MÜHENDİSLİK 2021 ANNUAL REPORT 170 Birleşim Mühendislik Isıtma Soğutma Havalandırma Sanayi Ticaret A.Ş. and Its Subsidiary (All amounts expressed in Turkish Lira (“TL”)) Notes to the Consolidated Financial Statements For the Year Ended 31 December 2021 2. BASIS OF PRESENTATION OF THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) (k) Summary of significant accounting policies and assessment methods (continued) Employee benefits Severence (Retirement) payments: Under the Turkish law and union agreements, lump sum payments are made to employees retiring or involuntarily leaving the Group. Such payments are considered as defined retirement benefit plan in accordance with the revised TAS 19 “Employee Benefits” (“TAS 19). The retirement benefit obligation recognised in the balance sheet represents the net present value of the total defined benefit obligation due to retirement of all employees. Actuarial gains and losses are recognized in other comprehensive income. Cash Flow Statement In the cash flow statement, cash flows for the period are classified and reported on the basis of principal, investment and financing activities. Cash flows from operating activities represent cash flows from mechanical and electrical installation and machinery rental activities of the Group. Cash flows from investing activities represent the cash flows that the Group uses and receives from its investing activities. Cash flows from financing activities show the resources used by the Group in financing activities and the repayments of these resources. Liquid assets, cash, demand deposits and other highly liquid short-term investments with maturities of 3 months or less from the date of purchase, which can be immediately converted into cash and do not carry the risk of significant changes in value. Capital and dividends Ordinary shares are classified as equity. Dividends on ordinary shares are recognized in equity in the period in which they are declared. Events after the reporting period The Group updates disclosures that relate to conditions that existed at the end of the reporting period to reflect any new information that is received after the reporting period about those conditions. Non-adjusting events should be disclosed if they are of material importance. Earnings/(loss) per share Earnings/(loss) per share is calculated by dividing the net profit or loss for the period attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period.Companies in Turkey can increase their share capital through distributing shares (bonus shares) from Prior years’ income and differences arising from inflation adjustment in changes in equity to their current shareholders on a pro rata basis. When calculating profit/(loss) per share, these bonus shares are recognized as issued shares. Therefore, the weighted average of shares used in the calculation of profit/(loss) per share is derived through retroactive application with respect to bonus shares.