MUSTER. PDF1-16 DOGAN 2004

Transcription

Do¤an Holding Annual Report 2004
SUMMARY BALANCE SHEETS
SEGMENT ANALYSIS OF FINANCIAL RESULTS
ASSETS
As of December 31, 2004
ENERGY
3,660
8.1 %
6.1 %
40.7 %
FINANCE
916
MEDIA
968
OTHER
200
25.1 %
REVENUES (US$ Million)
11.2 %
8.8 %
FINANCE
58
MEDIA
67
ENERGY
80
OTHER
39
Total Non-Current Assets 40.7 %
Cash and Cash Equivalents 8.8 %
Securities 11.2 %
Banking Loans - Current 25.1 %
Trade Receivables 6.1 %
Other Current Assets 8.1 %
OPERATING PROFIT (US$ Million)
LIABILITIES AND SHAREHOLDERS’ EQUITY
FINANCE
6,499
17.6 %
OTHER
3,119
37.2 %
MEDIA
1,441
8.3 %
ENERGY
1,541
TOTAL ASSETS* (US$ Million)
16.8 %
4.4 %
9.7 % 6.0 %
Deposits 37.2 %
Trade Payables 4.4 %
Other Current Liabilities 6.0 %
Total Non-Current Liabilities 9.7 %
Total Shareholders’ Equity 16.8 %
Minority Interest 8.3 %
Short-Term Bank Borrowings 17.6 %
MEDIA
70
FINANCE
55
ENERGY
26
CAPITAL EXPENDITURES (US$ Million)
* AMOUNT TO BE DEDUCTED FROM THE TOTAL AS INTER SEGMENT
ELIMINATIONS IS US$ 3,845 MILLION.
OTHER
15
CONSOLIDATED FINANCIAL HIGHLIGHTS
SUMMARY INCOME STATEMENTS
(US$ million)
REVENUE
Non-Banking and Financial Services
Banking and Financial Services
OPERATING EXPENSE
OPERATING PROFIT
NET INCOME
CONTENTS
01
02
04
06
08
12
16
17
25
35
41
51
55
83
87
99
The Do¤an Group
Performance of Shares
The Do¤an Group in Brief
Message from the Chairman
Message from the CEO
Board of Directors
Corporate Governance & Sustainability
Holding Functions
Banking and Insurance
Energy
Industry and Trade
Tourism
Media
Social Responsibility
Principles of Corporate Governance Compliance Report
Consolidated Financial Statements at
31 December 2004 Together with Auditor’s Report
2004
2003
2002
5,744
4,462
3,451
4,828
3,617
2,758
916
845
693
(5,421)
(4,099)
(3,242)
(4,638)
(3,499)
(2,687)
(783)
(600)
(555)
244
240
125
186
9
18
58
231
107
178
275
58
CONSOLIDATED FINANCIAL HIGHLIGHTS
SUMMARY BALANCE SHEETS
(US$ million)
2004
2003
2002
5,198
3,953
2,935
Cash and Cash Equivalents
764
700
543
Securities
986
787
554
2,195
1,667
1,199
Trade Receivables
538
382
242
Other Current Assets
715
417
397
3,556
2,585
1,975
969
842
686
2,587
1,743
1,289
TOTAL ASSETS
8,754
6,538
4,910
TOTAL CURRENT LIABILITIES
5,717
3,966
3,155
Short-Term Bank Borrowings
1,545
1,070
872
Deposits
3,262
2,294
1,899
Trade Payables
388
230
105
Other Current Liabilities
522
372
279
TOTAL NON-CURRENT LIABILITIES
842
931
855
Long-Term Bank Borrowings
569
772
700
Other Non-Current Liabilities
273
159
155
1,469
1,102
558
726
539
342
8,754
6,538
4,910
TOTAL CURRENT ASSETS
Banking Loans - Current
TOTAL NON-CURRENT ASSETS
Property, Plant and Equipment
Other Non-Current Assets
TOTAL SHAREHOLDERS’ EQUITY
MINORITY INTEREST
TOTAL LIABILITIES, MINORITY INTEREST AND SHAREHOLDERS’ EQUITY
THE DO⁄AN GROUP
DO⁄AN HOLDING
BANKING AND INSURANCE
BANKING
D›flbank
D›flbank Malta Limited
BROKERAGE AND INVESTMENT BANKING
Mirroring trends in the new economy, the Holding is mainly focused on providing
services. The Holding Company has an interest in five primary business areas:
finance, energy distribution, media, tourism as well as industry and trade.
DO⁄AN YAYIN HOLDING
NEWSPAPERS
Hürriyet
Milliyet
Radikal
Posta
Fanatik
Fanatik Basket
Gözcü
Referans
(Previously Finansal Forum)
Turkish Daily News
D›fl Yat›r›m
D›fl Portföy
INSURANCE
Ray Sigorta
Do¤an Emeklilik
MAGAZINE AND BOOKS
Do¤an Burda Rizzoli
Do¤an Books
Do¤an Egmont Publishing
DPP
BROADCASTING AND PRODUCTION
(Previously Do¤an Hayat Sigorta)
TELEVISION CHANNELS
LEASING
Kanal D
CNN TÜRK
Euro D
D›fl Leasing
FACTORING
D›fl Factoring
CABLE TV CHANNELS
Dream TV
Fenerbahçe TV**
Befliktafl TV**
RADIO STATIONS
ENERGY
PO Oil Financing
PO Petrofinance
Cyprus Turkish Oil (Kipet)
Petrol Ofisi
Erk Oil Investments
Petrol Ofisi International Trading
INDUSTRY AND TRADE
Çelik Halat
Ditafl
Do¤an Organic Products
Hürriyet Pazarlama
Milpa
Do¤an Otomobilcilik
TOURISM
Milta Turizm
Milta Bodrum Marina
Majesty Club Kemer Beach Holiday Village
Club Milta Holiday Village
Ifl›l Tur
Do¤an Air
Radyo D
CNN TÜRK Radio
Radyo Foreks
TV PRODUCTION
ANS Production
DIGITAL WORLD
Do¤an Online
Ultra Cable TV
Hürriyet Internet
DISTRIBUTION AND RETAILING
Yaysat-Do¤an Da¤›t›m
D&R
PRINTING
Do¤an Printing Centers
Do¤an Ofset
SUPPORT SERVICES
Do¤an News Agency
Do¤an Factoring
PRESENCE IN EUROPE
DYH International
MUSIC
Do¤an Music Company
** TECHNICAL SERVICES OF THESE CHANNELS ARE PROVIDED BY THE DHY BROADCASTING
NETWORK.
PERFORMANCE OF SHARES
STOCK PERFORMANCE
Do¤an Holding
D›flbank
Petrol Ofisi
Milpa
Ray Sigorta
Ditafl Do¤an
Çelik Halat
Do¤an Yay›n Holding
Hürriyet
Do¤an Gazetecilik
Dec. 31, 2003 Closing Price
Dec. 29, 2004 Closing Price
YTL
US$
YTL
US$
Change (YTL)
Change (US$)
2.14
1.19
4.30
1.35
0.67
39.75
2.03
2.94
2.83
2.54
2.55
1.53
0.85
3.08
0.97
0.48
28.48
1.45
2.11
2.03
1.82
1.82
2.86
2.54
4.48
1.28
1.13
65.50
2.35
3.32
3.14
2.60
4.14
2.13
1.89
3.34
0.95
0.84
48.79
1.75
2.47
2.34
1.94
3.08
%33.86
%113.74
%4.07
-%5.49
%67.98
%64.78
%15.76
%12.96
%10.88
%2.27
%62.47
%39.18
%122.23
%8.21
-%1.73
%74.65
%71.33
%20.36
%17.45
%15.28
%6.34
%68.93
Dec. 31, 2003
Dec. 29, 2004
Publicly-Held Shares*
Foreign Share
Publicly-Held Shares*
Foreign Share
Change in Foreign Share (%)
%34.29
%34.00
%5.15
%34.50
%36.44
%49.06
%37.56
%20.06
%33.37
%24.86
%15.07
%17.55
%6.47
%0.48
%3.54
%0.00
%0.00
%0.00
%73.00
%83.50
%12.50
%44.20
%34.29
%35.00
%5.15
%34.50
%27.01
%49.06
%37.56
%30.06
%40.00
%24.86
%15.07
%32.38
%15.49
%0.52
%0.60
%0.00
%0.00
%0.00
%81.20
%86.80
%15.70
%73.20
%84.50
%139.41
%8.33
-%82.94
%11.34
%3.89
%26.12
%65.72
Do¤an Holding
D›flbank
Petrol Ofisi
Milpa
Ray Sigorta
Ditafl Do¤an
Çelik Halat
Do¤an Yay›n Holding
Hürriyet
Do¤an Gazetecilik
* FIGURES USED TO CALCULATE THE ISE INDEX ON THE RELEVANT DAY HAVE BEEN USED TO CALCULATE PUBLIC SHAREHOLDING.
2
DO⁄AN HOLDING ANNUAL REPORT 2004
The performance of Do¤an Group shares on the ISE was generally positive in
2004. Although the high returns in 2003 slowed down share performance in
2004 to some extent, positive returns in real terms were achieved in general.
Especially striking were the YTL and US$ returns in D›flbank, followed by Ray
Sigorta, Ditafl Do¤an and Do¤an Burda Rizzoli.
regard. By the end of 2004, foreign investors held 81.20% of the publicly-traded
shares of DYH, and 86.80% of those of Hürriyet Gazetecilik. The share of foreign
investors in most subsidiaries, including DOHOL, increased in 2004 in general.
The most striking examples were, in descending order, D›flbank (139.41%), Do¤an
Holding (84.50%) and Do¤an Burda Rizzoli (65.72%).
Public shareholding in Do¤an Group companies is above ISE averages. In a
secondary offering in 2004, public shareholding in DYH rose to 30.06%.
While DOHOL share performance paralleled the ISE-100 index in 2004, the
performance of D›flbank, Ray Sigorta, Ditafl Do¤an and Do¤an Burda Rizzoli
shares was better than the performance of the index.
The share of foreign investors in DOHOL and the public subsidiaries listed on the
ISE is significantly high. Especially DYH and Hürriyet lead the ISE in this
32,3
1.554,8
1.129,4
17,6
12,0
358,7
MARKET CAPITALIZATION (MILLIONS US$)
FOREIGNERS' SECURITIES CUSTODY ACCOUNTS (%)
2004
2003
2002
2001
2004
6,1
2003
2002
2001
397,3
THE DO⁄AN GROUP IN BRIEF
Established in the 1950s, Do¤an Holding
ranks among Turkey’s top five conglomerates.
Do¤an Holding was listed as the 1313th
largest company in “The Forbes Global 2000” index.
04
As one of the foremost corporate contributors to national wealth
through diligent taxpaying and philanthropic activities, the
Group has consistently been ranked among the top corporate
taxpayers.
T
here are common fundamentals in all successful companies today irrespective
of their line of business: prudence in managing risk while maintaining sustainable
growth, creation of value for all stakeholders, responsibility as a corporate citizen
and concern for the sustainability of society and the environment. These universal
guidelines are the basic reasons for Do¤an Holding’s success in today’s fast changing
and intensely competitive world.
Tracing its beginning to the 1950s, Do¤an Holding now ranks among Turkey’s top
five conglomerates. The small trading house started growing in the post-World War
II era when Turkey initiated industrialization and modernization of its long neglected
economy. One of the competencies of the Holding is investing in vital sectors of the
economy - helping the country and itself to prosper. Mirroring trends in the new
economy, lately, the Holding has shifted its focus to providing services. The Holding
Company has an interest in five primary business areas: finance, energy distribution,
media, tourism as well as industry and trade.
Keen on sharing economic benefits with society, 34% of Do¤an Holding shares are
publicly held while Adilbey Holding and the Do¤an Family jointly maintain a 66%
interest. This ownership structure reflects the highest percentage of publicly traded
stock of any group in Turkey. In addition to Do¤an Holding, ten other Group Companies
are listed and traded on the Istanbul Stock Exchange (ISE). These currently include
Do¤an Yay›n Holding, D›flbank, Ray Sigorta, Milpa, Çelik Halat, Ditafl, Hürriyet,
Milliyet, Petrol Ofisi and Do¤an Burda Rizzoli.
Do¤an Holding takes pride in being one of the very first business groups to adopt
principles of sound corporate governance - long before they became legal requirements
of the Capital Markets Board in Turkey.
As one of the foremost corporate contributors to national wealth through diligent
taxpaying and philanthropic activities, the Group has consistently been ranked among
the top corporate taxpayers. The Ayd›n Do¤an Foundation has spent in excess of US$
10 million for social and cultural programs to date.
With an energetic and highly motivated top management team, Do¤an Holding looks
confidently to a future where it becomes a major regional player within Europe,
Central Asia and the Middle East.
MESSAGE FROM THE CHAIRMAN
AYDIN DO⁄AN
We will continue to adhere to the principles
of corporate governance that have always
provided us with clear-cut guidance.
06
As international business standards dictate, we abide
by the rules of corporate governance as we go about our
routine business. We are fully aware that a company may
only succeed in the long-term and sustain its state of affairs
if it is capable of raising funds both from routine operations
and from investors when further expansion is needed.
D
ear shareholders, colleagues and business partners,
Frequent terrorist hits, especially in Iraq, and regional upheavals threaten global stability
in the Middle East and West and Central Asia. Adding to these, uncertainties concerning the
value of the dollar and the euro continue to be the sources of market volatility. The French and
Dutch people’s no vote in the referendum for the EU constitution will definitely have long term
implications on the euro as well as on the EU itself.
The past year saw a sharply declining US dollar and volatility in oil prices but in the final
analysis, the global economy has considerably improved. Supported by strong financial results
and high profit, the revival of business investment is expected to continue in the USA and will
hopefully resume in Europe. At the same time, consumer spending will increase after the recent
retreat of oil prices to more tolerable levels. As job creation progressively escalates and monetary
conditions remain favorable, there is reason to expect global economies to retain the momentum
of recovery over the next two or three years.
The tension between China and Japan concerning the revived memories of reprehensible misbehavior
of Japanese soldiers in China during the Second World War caused some social unrest in major
cities across China in April of 2005. This could have impaired relations between China and Japan
but thanks to wisdom adopted by both sides, the problems were alleviated. Both of these countries
are major players in the global economy. In China, activity accelerated during the third quarter
of 2004 following a desired slowdown in the first half of the year. Japan scored an impressive
comeback with regard to exports resulting in a recovery of investment, employment and consumption.
However, from a global standpoint, uncertainty still remains as to whether Europe will play a
strong supportive role in this worldwide trend by promoting domestic demand.
At home, driven by buoyant private business investment and household consumption in 2004,
the GDP reached a spectacular annual growth rate of 9.9%. It is likely to slow down to a more
sustainable pace of about 6% in 2005 and 2006, with exports and domestic demand remaining
robust. We expect that monetary and fiscal policies will be strictly adhered to while the ambitious
structural reform agenda will be carefully implemented as domestic and international confidence
continues to grow. Gains from this growth should be allocated to reduce public debt to improve
fiscal sustainability and rein in the growing current account deficit.
A strong appreciation of the euro, in the context of worsening external trade imbalances, will
not have a major impact on the Turkish economy. Many exporters have already converted into
euro or have hedged themselves against further declines in the dollar. The weak dollar will
actually help Turkey decrease external debt while the dollar-savers regain confidence in their
own currency, assisting in the fight against the chronic inflation that has plagued the country
for decades. The timing for the introduction of the new Turkish lira (YTL) could not have been
more appropriate. Apart from making calculations easier, the YTL will instill all economic
players with confidence in the local currency and help bring inflation down to one-digit figures.
Another major item on the agenda for some time has been the EU accession talks as an
overwhelming majority of the Turkish people wish to join the EU as soon as possible. We believe
Turkey has achieved much on the road to compliance with EU legislation and standards and
now is the time for the EU to show its sincerity by keeping the negotiation period short for
Turkey's full membership. When Turkey becomes an EU member state, possibly before 2015,
both sides of this partnership will gain economic and political benefit. I believe that the real
benefit for the Turkish people lie not in full membership but more in the actions taken to achieve
greater democracy, a powerful legal structure and equitable social standards.
Certainly, the world has become a place where technology and globalization work hand-in-hand
to narrow differences and remove obstacles between economies and cultures. It is not possible
for Turkey to alienate herself completely from a potential shortage in the oil industry of a Latin
American country. Similarly, markets in Latin American countries were obviously affected by
the consecutive crises that we experienced in Turkey during 2000 and 2001. We need to play
by global rules and be competitive in both domestic and global markets, only then will Turkey
attract more direct foreign capital, resolve its capital deficiency problems and become a stronger
player in the world economy.
One way to bring in direct capital is by forming international alliances and partnerships with
leading companies around the globe. Any major multinational planning to contribute to the
high-potential of the Turkish economy must have a competent local partner to effectively launch
its products and services. As Do¤an Holding, we have chosen to grow by international partnerships
and strategic alliances.
We have set an example in this regard for other Turkish businesses. We sold a majority stake
in D›flbank and its affiliated financial institutions to Fortis Bank. This milestone transaction
is an evidence of the prospering Turkish economy where major players around the globe would
now like to take a part. The proceeds we shall raise in the sale of these companies will again
be invested in our existing businesses to turn us into a global player.
As international business standards dictate, we abide by the rules of corporate governance as
we go about our routine business. We are fully aware that a company may only succeed in the
long-term and sustain its state of affairs if it is capable of raising funds both from routine
operations and from investors when further expansion is needed.
This will be possible if we strictly implement the four principles of good corporate governance:
accountability, responsibility, transparency and fairness. These values create the trust between
every stakeholder and all economic institutions.
Turkey has a relatively young and growing population when compared to many of the EU
member states. This is an important strategic advantage for EU companies seeking a market
for their products and services outside their native countries. As the composition of the population
shifts from rural to urban areas, the need for education exponentially rises, sometimes beyond
the reach of governmental budgets. We believe it is our responsibility to assist in the education
of Turkey's youth by building schools and other training institutions. We also think that organizing
cultural and artistic affairs are important because they contribute to the intellectual wealth
of Turkish citizens. For this purpose, we have organized the Ayd›n Do¤an International Cartoon
Competition and the Ayd›n Do¤an Awards, which have become annual events of long standing.
As we continue to invest in Turkey's future, creating value for the Company and all stakeholders,
fulfilling philanthropic obligations have become as important as ever.
I would like to express my gratitude once again to all members of our family – our stakeholders,
business partners and employees. As we look forward to a more prosperous future full of even
greater achievement, we believe that new synergy will develop to maintain our Group's position
at the forefront of the Turkish business community.
Ayd›n Do¤an Chairman
MESSAGE FROM THE CEO
TUFAN DARBAZ
Parallel to the country’s impressive economic
developments, Do¤an Holding has found a series of
successes in its profitability, productivity and especially
the attainment of strategic goals during 2004.
08
As a consequence of our achievements, the market value of
Do¤an Holding stocks traded on the Istanbul Stock Exchange
has increased 39% since the beginning of the year.
V
alued shareholders, partners and associates,
I would like to present to you with a brief overview of the year 2004 for Turkey,
and then share with you the highlights of Do¤an Holding’s operations for the year.
The year 2004 will undoubtedly be remembered as a period during which crucial steps
have been taken and very significant developments have transpired. Thanks to the
implementation of bold reform policies during this period, the Turkish economy has
left behind its crisis-stricken past and has entered a period of sound and stable growth.
The economy continues to grow and inflation is on the decline; the budget deficit,
although increasing in nominal terms, is decreasing as a percentage of the country’s
total economic output. Tourism and export revenues are expected to reach record
levels by the end of the year. Turkey’s economic decision makers have closely adhered
to IMF guidelines especially in relation to the primary deficit and will presumably
continue to do so; thereby they will avoid instigating uncertainty in national and
international markets. At present, all economic indicators, except the current account
deficit and unemployment, fare favorably and are under control.
In a developing country such as Turkey, the main goal of a commercial enterprise
should not be to merely grow, but rather to attain sustainable and profitable growth.
The key to such growth is to maximize productivity in every single operation we carry
out and to implement smart and flexible financing strategies. In this regard, our
subsidiaries have increased their operational productivity and have also rendered their
finances more sound and flexible. These results give us more confidence and optimism
regarding the future.
As a consequence of our achievements, the market value of Do¤an Holding stocks traded
on the Istanbul Stock Exchange has increased 39% since the beginning of the year.
Our Group is subdivided into three strategic business units: financial services, assembled
under D›flbank recently sold to Fortis, at a price in line with the achievenments of the
bank; energy distribution, carried out by Petrol Ofisi; and media, grouped under Do¤an
Yay›n Holding. All three of the aforementioned strategic business lines have performed
remarkably well during 2004.
Highlights of the Energy Group in 2004
The first of the Copenhagen Criteria, which concerns political and social issues, has
been implemented with the completion of necessary legal reforms. On December 17th,
with the wide support of all sectors of the civil society, Turkey has obtained a date
to commence accession talks with the European Union.
December 17th ought to be understood not as the end but rather the beginning of an
extensive reform process on the road to EU membership. In this regard, Turkey may
consider itself having passed a critical threshold, and yet, EU membership talks will
certainly constitute a challenging process. In the period ahead, along with the country’s
political and technical decision makers, the private sector, too, must prepare itself
for change. For example, as far as Do¤an Holding is concerned, we are currently
scrutinizing the legal framework and directives concerning the economic sectors in
which we operate and our preparations will continue throughout the negotiation
process with the EU. Structural reforms, as prescribed by the IMF and supported by
the EU, will help to further stimulate Turkey’s economy and create a favorable
environment for foreign investment.
Parallel to the country’s impressive economic developments, Do¤an Holding has found
a series of successes in its profitability, productivity and especially the attainment
of strategic goals during 2004. The year has been very positive for our companies,
in line with our previous expectations. Many of our companies have even surpassed
their aggressive performance projections for 2004. Our subsidiaries have outperformed
the Turkish economy, increasing their market shares in their respective sectors as
well as their overall profitability.
• In 2004, Petrol Ofisi has maintained a market leadership position in all its business
segments, due to a set of efficient operating principles, additions to its product
lines and investment in infrastructure and new stations.
• In 2004, the market share of Petrol Ofisi reached 25.6% in gasoline, 35.8% in
diesel, 71.5% in aviation sales, 39.0% in black products and 31.9% in lubricants.
• Petrol Ofisi has increased its net sales, and has simultaneously prolonged its debt
maturity and continued to reduce its net financial debt.
• Petrol Ofisi which controls 31% of the total storage capacity of energy distribution
companies in Turkey, has continued its investments in 2004.
• ERK Oil Investments Inc., founded in order to efficiently respond to developments
in the fuel oil sector related to the recent regulations included in the new “Fuel
Oil Market Law”, has increased the number of its stations to 428. This company
aims to attain its target of 800 stations and a 2.5% market share in a period of
three years.
• As the law stipulates that all real and legal persons active in the areas of fuel oil
dealership, refinery, distribution, bunkering and transport must obtain a license,
Petrol Ofisi has made a collective application in the name of all its dealers.
• Presumably, the liberalization of prices and imports introduced by the new Fuel
Oil Market Law will have a beneficial effect on Petrol Ofisi’s performance, since
the company enjoys a wide nationwide network of more than 3,600 dealers, which
will allow it to efficiently capitalize on its strong logistics network and competitive
structure.
MESSAGE FROM THE CEO
Highlights of the Financial Services Group in 2004
• D›flbank, on its 40th anniversary, ranks among Turkey’s top 10 and the world’s
top 500 banks in total assets.
• Having become a full-service financial services group with 5,000 employees and
US$ 5.2 billion in total assets as a result of the radical transformation program
initiated five years ago, D›flbank has continued to grow, consolidate its financial
operations and provide increasing support to manufacturing industries in year
2004.
• Including all its financial services subsidiaries, D›flbank is the sixth largest bank
in terms of the range of its network: with 170 branches throughout the country,
it has successfully implemented a sound growth strategy in commercial as well
as small business banking.
• Practically in a class of its own in Turkey being comprised solely of financial
services subsidiaries, D›flbank receives among the highest scores from credit rating
agencies in terms of its financial strength.
• Having distributed a total of 1.2 million credit cards, D›flbank has one of the
fastest growing customer bases in credit card uptake and usage.
• D›flbank is one of the most important players in regards to Turkey’s foreign trade
volume; the total number of D›flbank customers approaches 1.5 million.
10
Do¤an Holding continues its efforts to spread its efficient
corporate governance perspective to the whole of Turkey.
As always, transparency, accountability and fairness constitute
the main pillars of our institutional structure.
Highlights of the Media Group in 2004
Our Targets and Prospects for 2005
• In terms of advertising revenues, which constitute the bulk of income for most
media companies, the year 2004 has been very favorable, due to overall economic
growth and a decrease in interest rates. As leaders of their sectors, the Do¤an
Yay›n Holding companies have significantly benefited from this development.
With regards to 2005, I would like once again to underscore our resoluteness in
attaining our growth, profitability and productivity targets, achieving our strategic
goals and surpassing our 2004 performance.
• Taking into consideration that the upcoming negotiation process with the EU will
stimulate a more sound and stable economic environment, we expect that the
advertising market will grow considerably and that this growth will favor the
performance of our media companies.
• In its fifth year, the continuing success of CNN Turk serves as a shining example
for other foreign partnerships in the sector to emulate.
• As a provider of internet, portal and e-business services to individual and corporate
customers, Do¤an Online has obtained a Long Distance Telecommunication Services
License and has launched operations in the telecommunications sector in 2004.
In 2004, apart from these achievements of our subsidiaries, there has been one other
noteworthy development, which we consider as the fruition of our determination to
live up to our social responsibilities. The Organic Farm Project of Do¤an Holding was
placed among the top 10 best practice cases in the EU-wide “Corporate Social
Responsibility” campaign, which was organized by The Enterprise Directorate-General
of the European Commission. This project complements perfectly the new leadership
role Do¤an Holding has taken in sustainable development. As with Do¤an Organic
Products in Kelkit, we are championing a world in which there is a fair, equitable
and responsible sharing of all world resources, while maintaining economic, social
and environmental sustainability.
Do¤an Holding continues its efforts to spread its efficient corporate governance
perspective to the whole of Turkey. As always, transparency, accountability and
fairness constitute the main pillars of our institutional structure. The principle of
openness continues to guide all our operations, as we enhance the channels of access
to our corporation. Encouraging all our employees to increase their performance and
productivity is another major goal. Our performance centered approach will bear
abundant fruit from the next year onwards. Our vision for 2005 is a productive and
successful Do¤an Holding with a global focus.
• As well as undertaking new operations that should result in synergies with our
existing businesses, we aim to fully exploit opportunities at hand, by increasing
productivity, deploying state-of-the-art technology and differentiating ourselves
in terms of commitment to efficiency and quality.
• In every sector in which we are engaged, we structure our activities around a
customer-centered approach. This “customer first” vision is complemented with
the strategy of assisting those of our companies with market leadership positions
to fortify their dominance and to help those with the potential of becoming a
market leader to fully realize their potential.
• The Do¤an Group will continue to closely monitor all privatization projects in the
coming period. Among the forthcoming privatizations, we are most interested in
the privatization of the National Lottery Administration, which is in line with our
present operations and thus is likely to create considerable synergy if realized.
• We are also looking forward to extending our activities and know-how beyond our
national borders.
As we build all our operations around constructive motivation and open lines of
communication between our shareholders, business partners and employees, Do¤an
Holding will continue to prosper in all of its business lines. I would like to take this
opportunity to extend my gratitude to all we owe much of our success to. Your support
and endorsement will continue to be the driving force behind our future achievements.
Tufan Darbaz
CEO
BOARD OF DIRECTORS
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AYDIN DO⁄AN
Born in 1936, Mr. Ayd›n Do¤an attended Istanbul Economy and Commerce Academy where he became
the Student Community Leader owing to his leadership qualities.
In 1958, while still in school, he founded his own company. He established a transportation company
but kept active in other businesses related to passenger and commercial vehicles as well as construction
equipment. Mr. Do¤an also founded a number of other enterprises dealing in agricultural products and
wholesale of pharmaceuticals before 1970.
Mr. Do¤an founded his first industrial company in 1974 and joined both the Assembly and the
Administrative Board of Istanbul Chamber of Commerce. In the years that followed, he served as a
board member in the Turkish Union of Chambers and Exchanges.
Mr. Do¤an became a publisher with the acquisition of the daily newspaper Milliyet in 1979. Today,
he is the most senior newspaper owner in Turkey. Between 1986 and 1996, he served as the head of
the Association of Turkish Newspaper Publishers. At the WAN (World Association of Newspapers)
meeting held in Tokyo in 1998, Mr. Do¤an was elected the first Turkish board member. He was awarded
the Turkey State Outstanding Service Medal in 1999. Currently, he serves as one of the vice-presidents
in the Executive Committee of WAN.
BOARD OF DIRECTORS
Since 1977, Mr. Do¤an has topped the highest taxpayers list registered with the Istanbul Chamber of
Commerce. He strongly believes in private sector involvement in national and regional development and
has initiated cultural and educational projects with the establishment of the Ayd›n Do¤an Foundation
in 1996. To date, eight schools have been built and named after him and family members. 01
AYDIN DO⁄AN
CHAIRMAN
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‹MRE BARMANBEK
DEPUTY CHAIRPERSON
03
Dr. VURAL AKIfiIK
DEPUTY CHAIRPERSON
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TUFAN DARBAZ
CEO & MEMBER
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MEHMET AL‹ YALÇINDA⁄
MEMBER
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ARZUHAN YALÇINDA⁄
MEMBER
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VUSLAT DO⁄AN SABANCI
MEMBER
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HANZADE DO⁄AN
MEMBER
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AL‹ RIZA TEMURO⁄LU
MEMBER
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TAYFUN BAYAZIT
MEMBER
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TAYLAN B‹LGEL
MEMBER
‹MRE BARMANBEK
Born in 1942, ‹mre Barmanbek graduated from Ankara University, School of Political Science with a
BSc. degree in Economics and Finance. Her career began in 1963 at the Ministry of Finance, as an
assistant tax auditor in the Board of Accountancy Specialists, followed by a promotion in 1966 to
Accountancy Specialist. She accepted a position with the State Planning Organization as a State Planning
Specialist. After a successful year at SPO, Barmanbek resumed the position of Accountancy Specialist
within the Ministry of Finance until 1975. She also acted as a member for the Tax Appeals Commission.
In 1977, Barmanbek resigned from her post in Ankara and started to pursue her career in private
sector. Barmanbek assumed the Financial Director position in Do¤us Akü Industry Inc., a joint venture
company founded by the Koç and the Do¤an Group. She then rose to the General Manager position in
the Company. ‹mre Barmanbek was later appointed as the Financial Coordinator for Do¤an Holding
and became the CFO in 1988. She continued to serve in the Company as the CEO and Executive Member
of the Board. Due to her dynamic management style and her ability to create added value, she received
the “Best Female Manager of the Year” award in by the daily newspaper Dünya in 2001.
In 2002 the prestigious Fortune Magazine International Edition recognized her as the 33rd “Most
Powerful Woman in Business” in Turkey. In 2003 and 2004, she was acknowledged as the 21st and
22nd “Most Powerful Woman in Business” by the same magazine, respectively.
She currently is a member of Turkish Industrialists and Businessmen's Association (TÜS‹AD). Since
2003, she has been Deputy Chairperson to the Board of Directors and Member of the Executive Board
for Do¤an Holding; she also serves on the boards of several group companies.
Dr. VURAL AKIfiIK
Dr. Vural Ak›fl›k completed his high-school education at Robert College, Istanbul. He earned a B.Sc.
in Economics and a M.Sc. in Mathematics from the Middle East Technical University. He received his
Ph.D. in Mathematical Statistics from the University of California at Berkeley. Dr. Ak›fl›k taught at
the Middle East Technical University and University of California, Berkeley before joining Pamukbank
in 1976.
In 1984, he became the CEO of Interbank. Founding Turkish Merchant Bank (TMB) in 1988, the first
investment bank in Turkey, in partnership with Bankers Trust Company, Türkiye ‹fl Bankas› and D›flbank,
he served as its founding shareholder, Chairman and CEO until 1997. After selling his shares in TMB
to Bankers Trust Company, he was appointed the CEO of D›flbank.
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In 2001, he was invited to join the State Banks Administration as Chairman with the specific mission
to restructure state-owned banks. After the successful completion of organizational and financial
restructuring, Dr. Ak›fl›k returned to D›flbank where he continued as the Chairman of the Board. At
present, he is also the Deputy Chairman of Petrol Ofisi, the largest oil distribution company in Turkey,
and the Deputy Chairperson and Member of the Executive Committee at Do¤an Holding.
He has served on the boards of Baflak Sigorta, Lafarge Cement Turkey and SYB (Turkish Industrial
Investment Bank). He acted as the Chairman for Ray Sigorta and Do¤an Hayat. He is also on the Board
of Alarko Holding.
BOARD OF DIRECTORS
VUSLAT DO⁄AN SABANCI
Dr. Ak›fl›k is the Chairperson for the Turkish-US Business Council, High Advisory Council member for
the Turkish Industrialists and Businessmen's Association (TUSIAD), Board Member of Turkish Economic
and Social Studies Foundation (TESEV), Executive Board member of Malatya Educational Foundation
and Founding Member of Istanbul Educational Foundation.
Born in 1971, Vuslat Do¤an Sabanc› graduated from Bilkent University with a degree in Economics.
She continued her education at Columbia University in New York, where she received a Master’s degree
in International Media and Communications. Vuslat Do¤an Sabanc› worked in the editorial management
department of The New York Times newspaper for one year. Following this, she worked for The Wall
Street Journal in the formation of the Asian Business World News Channel and the Journal’s Latin
American Edition. In 1996 she joined the Hürriyet Newspaper as Vice President in charge of advertising.
Three years later she was promoted to the position of Group President of Marketing Operations, where
her responsibilities included marketing, sales, human resources, and IT operations.
TUFAN DARBAZ
Tufan Darbaz graduated from Bosphorus University with a degree in Business Management in 1978.
He completed his graduate studies in Business Strategy at Strathclyde University in Scotland.
Today she continues to serve as Hürriyet’s CEO and as a member of the Board of Directors. In addition
to strategic planning and business development, she is also responsible for the newspaper’s administrative
operations.
He started his professional life in STFA, later joining the Sabanc› Group. During his 18 years with the
Group, he served on several boards, formed and led strategic departments finally becoming the President
of Strategy and New Business Development Group.
Vuslat Do¤an Sabanc› is also a member of the International Press Institute’s Board of Directors.
He joined Do¤an Holding in 2001 as Deputy CEO and has held the CEO position at the Do¤an Holding
since the beginning of 2003. He currently serves on the boards of several Do¤an Holding companies
including D›flbank and Petrol Ofisi.
Mr. Darbaz is also an active participant in civil society. He is a founder and a board member of the
Corporate Governance Association of Turkey, Bosphorus University and Robert College Businessmen’s
and Executives’ Association and a member of Turkish Industrialists and Businessmen’s Association
(TÜS‹AD), Turkish Textile Producers Association, Alumni Organization of Bosphorus University, to
name a few.
MEHMET AL‹ YALÇINDA⁄
Born in Istanbul in 1964, Mehmet Ali Yalç›nda¤ graduated from ACL with high honors in 1989.
In 1990, he joined Do¤an D›fl Ticaret, which manages all foreign procurement for the Do¤an Group.
A year later, Mr. Yalç›nda¤ was appointed to the Executive Committee of Do¤an Holding and in
1992 joined the daily Milliyet as Assistant General Manager. After becoming Vice President of the
newspaper in 1994, he founded the Simge Group and launched five new brands in the Turkish daily
newspaper market. The same year, Do¤an Group acquired Turkey’s largest newspaper, Hürriyet. In
1996, the media companies within the Group merged under the umbrella of Do¤an Yay›n Holding
with Mr. Yalç›nda¤ assuming the position of Vice President. Working to create areas of synergy to
serve all publishing companies within Do¤an Yay›n Holding, he was appointed President of the
Executive Board in 1999. At the beginning of 1998, Mr. Yalç›nda¤ organized road shows all over
the country to introduce the Group, and managed the IPO of the Holding Company. As Group Executive
Committee President, he worked to develop the corporate identities of all the affiliated companies
and, pursuing foreign partnerships, formed the book publishing division of Do¤an Egmont (1996),
the magazine Group in partnership with Burda and Rizzoli (1998), and formed CNN Türk (1999)
in partnership with CNN. Following the seperation of the book and magazine companies into two
entities, he established the D&R chain of stores.
HANZADE DO⁄AN
Hanzade Do¤an graduated from the London School of Economics in 1995 with a BS degree in Economics,
and earned her MBA in 1999 from Columbia University. Now responsible for DYH’s strategic planning,
Ms. Do¤an is a Vice President of the Executive Committee. During the course of her studies at Columbia
University, she was an active member of the Media Management Association, the Venture Capital Club,
and Columbia Women in Business. Ms. Do¤an was also a prizewinner in Columbia’s Business Plan
Competition for new ventures.
Her professional career includes media management training at Daily Express in London in 1993 and
summer internship at the Interbank Division of the Central Bank of Turkey in Ankara in 1994. Between
1995 and 1996, Ms. Do¤an worked as a financial analyst at Goldman Sachs International in London,
in the Communications, Media and Technology Group, where she gained experience in acquisitions and
mergers. In 1996, Ms. Do¤an joined DYH as senior strategist and led the Hürriyet joint venture project
with Bertelsmann, working through the sale of a minority stake (25%) of DYH Magazine group to
Rizzoli. In 1999, she served as founder and CEO of Do¤an Online, a venture which quickly became one
of Turkey’s leading ISPs. In February 2002, Hanzade Do¤an was appointed Chairman of the Board
of Do¤an Online, and in September 2002, became a Vice President at DYH. She currently serves as
the CEO of Do¤an Newspaper Publishing.
AL‹ RIZA TEMURO⁄LU
Born in 1945, Ali R›za Temuro¤lu graduated from the Political Sciences Faculty of Ankara University
in 1966. He started his professional career as an Assistant Auditor in the Ministry of Finance’s Tax
Auditor Board in 1967 and was then promoted to full auditor. Before joining Do¤an Holding, he served
in Turkish Industrial Development Bank (TSKB) as a Financial Analyst from 1974 to 1979.
After a brief spell as Administrative and Commercial Affairs Manager in Do¤an Newspaper Publishing,
he was assigned as the Assistant General Manager in the same company. From 1993 on, he served as
Assistant Financial Coordinator, General Secretary, and Advisor. He currently is a Board Member in
Do¤an Holding.
ARZUHAN YALÇINDA⁄
TAYFUN BAYAZIT
After graduating from Saint Michel High School and earning a degree in Sociology from Bosphorus
University, Arzuhan Yalç›nda¤ received her MBA in England and began her professional career in 1990.
Tayfun Bayaz›t was born in 1957. He earned his BS degree from S. Illinois University Mechanical
Engineering Department in 1980, to be followed by his MBA degree from Columbia University Finance
and International Relations Departments in 1983.
From 1990 to 1992, Ms. Yalç›nda¤ worked at Milpa A.fi. and initiated a mail order business in
cooperation with the German firm Quelle. Between 1993 and 1995, she took part in the establishment
of Alternatifbank and served on the board of the Bank. Ms. Yalç›nda¤ managed the Finance Department
at the Milliyet Magazine Group from 1995 to 1996. She currently serves as the President of Do¤an
TV&Radio Executive Board and as a Member of the Board of Do¤an Holding.
In 1999, Ms. Yalç›nda¤ launched efforts to establish a joint news network between CNN International
and Do¤an Yay›n Holding, the first example of such an initiative in Turkey. The project became
operational in 2000 when CNN TÜRK was formally established jointly with the AOL Time Warner
Group.
Ms. Yalç›nda¤ also serves as a Board Member on the following organizations: the Turkish Industrialists
and Businessmen’s Association (TÜS‹AD), the Turkish-American Businessmen’s Association (TABA),
the Turkish Education Volunteers Foundation (TEGV), the Turkish Female Entrepreneurs Association
(KAG‹DER) and the Third Sector Foundation of Turkey (TÜSEV). She is one of the founders of the
Ayd›n Do¤an Foundation, where she currently serves as a Board Member.
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Bayaz›t started his professional career at Citibank and has worked in various senior executive positions
within the Çukurova Group companies for 13 years, such as Yap› Kredi (Senior Executive Vice President),
Interbank (CEO) and Banque de Commerce et de Placements SA (Switzerland-President & CEO).
He was appointed as the Do¤an Holding Deputy Chairman in 1999 and in April 2001 he assumed the
CEO position in D›flbank. Bayaz›t, appointed as the Chairman of the Bank in 2003, also serves as the
chairman of various D›flbank subsidiaries, such as Ray Sigorta, Do¤an Emeklilik, D›fl Yat›r›m, D›fl
Portföy Yönetimi, D›fl Faktoring, D›fl Leasing, and D›flbank Malta.
Bayaz›t is currently the Head of Banking Working Group within the Turkish Industrialists and
Businessmen’s Association (TÜS‹AD), a member of the Corporate Governance Association Board and
Private Sector Volunteers Association.
TAYLAN B‹LGEL
Born in Ankara in 1942, Taylan Bilgel graduated from Ankara College in 1963 and went on to
complete his education at the Academy of Economics and Commercial Sciences in Ankara. Graduating
in 1971, he began his professional career as the owner and manager of the Gül Palas Hotel in Ankara.
Since 1983, he has been the Chairman of the Board of Directors of Anadolu Otomotiv, of which he
is the founder.
EXECUTIVE COMMITEE
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EXECUTIVE COMMITEE
AYDIN DO⁄AN
CHAIRMAN OF THE EXECUTIVE COMMITEE
HANZADE DO⁄AN
MEMBER OF THE EXECUTIVE COMMITEE
‹MRE BARMANBEK
DR. VURAL AKIfiIK
TUFAN DARBAZ
MEMBER OF THE EXECUTIVE COMMITEE AND CEO
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CORPORATE GOVERNANCE & SUSTAINABILITY
Do¤an Holding has long believed that good corporate governance
is the glue that holds together an efficient and robust economy,
which in turn generates real value for all participants. We are
committed to maintaining our leadership position in corporate
governance in Turkey.
To a degree, the global economy continues to recover from the gross ethical lapses
in business uncovered in recent years. Enron, Tyco and Worldcom in the US and
Parmalat in Europe are textbook examples of corporate malfeasance on a massive
scale.
Unfortunately, some Turkish companies were found to be no better. In particular, the
country’s financial institutions showed a serious lack of integrity. This resulted not
only in the collapse of the numerous enterprises directed involved, but it also acted
as a drag on the nation’s overall economy, stifling its true growth potential.
Out of the corporate ashes in the US and elsewhere came a new regulatory framework,
increased oversight and a renewed focus on corporate governance. Do¤an Holding
long ago assumed a leading role in Turkey in this realm, and many companies here
have more recently followed suit adopting principles of good corporate governance
for the first time in many cases.
This however was merely the first phase of a long evolutionary process. Turkish
businesses have passed the theoretical phase, and are now firmly into the execution
phase of developing sound foundations in good corporate governance.
Aware of the need to bring together a group of like-minded people who wanted to
create an interest in the principles of good corporate governance, the CEO of Do¤an
Holding and several top management members were instrumental in the establishment
of the Corporate Governance Association of Turkey (COGAT). Founded in early 2003,
COGAT - whose mission is to establish, develop and assist with the dissemination and
adoption of corporate governance best practices in Turkey both in private and public
institutions - now has nearly 200 active members.
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In addition to its well-attended annual summit most recently held in September 2004,
COGAT sponsors bi-monthly meetings for its membership featuring panel discussions
with corporate governance experts from Turkey and abroad.
As an extension of good corporate governance principles, top level management also
took part in the establishment of Business Council for Sustainability DevelopmentTurkey affiliated with the United Nations. Several Do¤an Holding executives are
active participants in the movement and one sits on the board of the association.
The equitable division of world resources and leaving resources for the use of viable
future genarations is a cause that has deeply resounded within Do¤an Holding coupled
with the ethical requirements of the corporate governance movement.
Do¤an Holding has long believed that good corporate governance and sustainability
is the glue that holds together an efficient and robust economy, generating real value
for all participants in turn. We are committed to maintaining our leadership position
in these two important issues in Turkey.
The four principles of corporate governance - accountability, responsibility, transparency
and fairness - create the trust between each and every stakeholder and economic
institutions. In the long run, this is what contributes to rising living standards and
higher purchasing power for citizens and the revitalization of the economy.
Do¤an Holding is proud to serve social and econmic causes as an activist and role
model in Turkey.
HOLDING FUNCTIONS
REHA MÜSTECAPLIO⁄LU AUDIT GROUP PRESIDENT
THE INTERNAL AUDIT GROUP
The internal audit function at Do¤an Holding oversees the
compliance of all activities to laws and regulations as well as
the policies of the corporation.
Recently, the market value of a company has tended to be highly dependent on how
successfully it has adopted and implemented sound corporate governance principles.
The internal audit function plays an imperative and indivisible role in the execution
of these principles, the core of which emphasizes fairness, transparency and
accountability. This function has an important role in the reliability and integrity of
financial and operational information.
The internal audit function at Do¤an Holding oversees the compliance of all activities
to laws and regulations as well as the policies of the corporation. Furthermore, by
monitoring the implementation of adopted procedures, internal audit ensures that the
internal control mechanism of each company in the Holding is effective.
The Internal Audit Department also conducts operational audits and contributes to
process development, thus helping to ensure efficiency, cost savings and effectiveness
in all Do¤an Holding ventures, leading to increased market value.
Finally, by implementing the contemporary risk-based-audit approach and carrying
out risk analysis of companies systematically, the internal audit function contributes
to the improvement of risk management by identifying and evaluating risks in Do¤an
Holding companies.
HOLDING FUNCTIONS
THE STRATEGY GROUP
The Strategy Group at Do¤an Holding consists of two departments:
Strategy and Business Development, and Information Technology.
The key objective of the Strategy Group is to define the vision of
the Company, and to support it with action plans.
The Strategy Group at Do¤an Holding consists of two departments: Strategy
and Business Development, and Information Technology. The key objective of the
Strategy Group is to define the vision of the Company, and to support it with action
plans.
The work of the Strategy and Business Development Department facilitates the initial
assessment of commercial and social projects and formulates strategies during the
implementation stage. The Department also incorporates the task of life stage
management for Holding businesses. The degree of change taking place in every
industry today is dramatic. Whether it is in such areas as improvement orientation,
restructuring, re-strategizing, operational quality enhancement or others, each of
these involve major changes which, if badly managed, can produce catastrophic results.
Although risk is inevitable in the process of change, a significant amount of anxiety
and distress can be avoided by having a solid plan beforehand. Therefore, the Holding’s
efforts serve to assist its subsidiaries in successfully managing major change and
diversification processes. Within this framework, the Department’s practice supports
the analysis of long and medium range projects such as technology investments,
strategic partnerships, as well as divestitures, privatization projects, acquisitions and
mergers.
The complementary nature of the conglomerate’s activities is strengthened through
the integration of its Information Technology Department into several inter-organizational
operations. The effective usage of IT empowers management in assessing and evaluating
business opportunities while positioning the Holding at the cutting edge through
significant achievements in operations and application development. The overall
process within the Holding is carried out by the implementation of tailored, stateof-the-art application software some of which are generated by the Department’s
programmers.
With rapidly increasing globalization and competition within all industries becoming
fiercer by the minute, the Strategy Group plays an integral role in keeping Do¤an
Holding ahead of the curve. Without the strong strategic underpinning of its business
units, and its well-integrated world class IT infrastructure, Do¤an Holding would not
be the success it is today. As importantly, the Holding’s Strategy Group helps guide
the conglomerate to an even more successful tomorrow.
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YAHYA ÜZD‹YEN STRATEGY GROUP PRESIDENT
HOLDING FUNCTIONS
AHMET KARACAH‹SARLI FINANCIAL AFFAIRS GROUP PRESIDENT
THE FINANCE GROUP
The Finance Group regularly utilizes debt and capital markets
instruments to obtain low cost long-term financing to foster
the Holding’s organic growth and realize its acquisition strategies.
Efficient financial planning and resource allocation are imperative in a large organization
as Do¤an Holding. Managing cash flow and determining the appropriate debt structure
for the Holding’s companies requires free flow of information and deft coordination with
the Finance Group. The efficient intra-Holding flow of financial information depends
upon a well-developed MIS while a highly trained professional staff analyzes and acts
upon the data for the benefit of the Holding.
The Finance Group regularly utilizes debt and capital markets instruments to invest
surplus cash, to obtain low cost long-term financing to foster the Holding’s organic
growth and realize its acquisition strategies. Thus, Do¤an Holding is able to boost
its competitive position both domestically and abroad.
Institutional investors, Do¤an Holding’s largest source of long-term capital, tend to
concentrate their stock holdings in entities with whose financial position they are
most familiar and confident. In order to keep these investors current and well-informed,
it is essential to provide them with regular and timely financial reports, as well as a
convenient forum for their analysts to obtain information and receive answers to all
of their questions. In an era of shrinking margins, CEOs have fewer resources, time
and staff available to perform the function of investor relations. Hence, Do¤an
Holding’s Investor Relations Department allocates a considerable amount of time and
energy to information sharing.
It is the aim of the Investor Relations Department to achieve an appropriate valuation
of Holding stocks within the capital market.
The Department has set out to gain lasting stockholder trust and increase transparency
while avoiding any informational irregularities and reducing share price volatility.
Do¤an Holding works toward these objectives through continuous, open and targeted
dialogue with all capital market participants. With regard to capital market professionals,
the focus is on fund managers, investment funds, pension funds and insurance analysts,
as well as banks and brokerages and their sales and research teams. In accordance with
the Holding’s objectives, management uses all available communication tools, including
financial reports, analyst meetings, road shows and conferences. The Holding’s IR
website, where the same information is made available to all target groups simultaneously,
is particularly important in this respect.
Constant risk assessment and management across the Holding’s companies is another
vital function of the Finance Group. Regular enhancement of the intra-Holding MIS
data collection and financial reporting works to further improve decision-making and
financial controls, both critical to Do¤an Holding’s risk management success and in
turn its market value.
With newly enacted, stricter regulations governing corporations, and themselves under
increased scrutiny, regulatory compliance is as important today as it has ever been
in corporate history. The Holding’s Finance Group works to ensure that all pertinent
regulations are followed to the fullest extent in all its financial activities.
Good corporate governance and institutional transparency are vital to forging, and
maintaining, strong relationships with all the Holding’s constituents and to ultimately
maximizing its market value. All important adherence to the Holding’s Corporate
Governance Principles falls under the domain of the Finance Group. Timely disclosure
and presentation of the Holding’s financial information to its clients, investors and
other stakeholders is yet another of the prime activities of the Group.
Do¤an Holding is determined to having a set of sound corporate governance practices
not simply to meet regulatory requirements, but to provide for the effective oversight
and management of the Company. The Holding firmly believes that accountability
and transparency in return enhances value for all of its clients, shareholders and
stakeholders.
HOLDING FUNCTIONS
CORPORATE COMMUNICATIONS AND HUMAN RESOURCES
‹PEK ‹LTER DIRECTOR OF CORPORATE COMMUNICATIONS AND
HUMAN RESOURCES
We understand that corporate communications is not just about
getting messages out, but rather we must support the overarching
strategic goals of Do¤an Holding. Corporate Communications is
always trying to find ways in which we can add value to the Holding.
Communications can be a competitive advantage in today’s world,
and we strive to make it so for Do¤an Holding.
Traditionally considered among the “softer” functional areas, Corporate Communications
and Human Resources today are recognized as strategic key elements for the success
of the modern-day corporation. In the absence of an effective communications function
and optimal human assets management, an organization’s full potential value cannot
be realized.
Building and maintaining trust and loyalty between Do¤an Holding and its myriad
stakeholders - investors, customers, shareholders, employees, suppliers, neighbors,
NGOs - is the most important task of Corporate Communications. This can only be
achieved through ongoing two-way communications between all parties.
Our aim is to facilitate, manage and monitor the communications process. We
constantly measure and track the perceptions of Do¤an Holding within the marketplace.
By doing so, we are given valuable insight that helps us to determine the content and
volume of the information we disseminate about the Holding. However, it is not
simply a matter of extending channels or volume of information, but rather Corporate
Communications works to help achieve the overall business strategy of the Holding.
We also consider internal communications as a vital part of the task. The proliferation
of information today, namely an onslaught of internal memoranda, newsletters,
voicemails, emails and intranets, are time consuming to already busy employees and
have the potential to confuse. We work to link different elements of communications
so it all adds up to a coherent whole, rather than simply individual parts that ultimately
become muddled.
In addition, the Holding’s all-important corporate identity is managed across multiple
media channels. In a world where the typical consumer is exposed to as many as
3,000 brand messages in a single day, maintaining a clear articulation of the Holding’s
corporate identity to all stakeholders is paramount. Staying on message about Do¤an
Holding’s brand identity and corporate values is especially vital in today’s media
cacophony and has a direct bearing on the Company’s market value. As a media
conglomerate, it is doubly important that our corporate communications function
reflects the same level of sophistication as our media properties.
The Department works as an information center internally as well. We follow global
and national social, political, economic, environmental and cultural trends that will
help shape the long term strategy of the Holding. Executive level management is
involved in the issues that may have a global impact.
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We understand that corporate communications is not just about getting messages
out, but rather we must support the overarching strategic goals of Do¤an Holding.
Corporate Communications is always trying to find ways in which we can add value
to the Holding. Communications can be a competitive advantage in today’s world,
and we strive to make it so for Do¤an Holding.
Do¤an Holding’s most important asset is its people, without which it would not be
the success it is today. Human Resources is at the heart of the organization, and the
future of the Holding hinges upon an effectively run Department.
Human Resources is charged with identifying, recruiting, training and ultimately
collaborating with the very best graduates and management training candidates. Our
HR specialists work to help each Do¤an Holding employee fully realize his or her
talents, skills and potential. In addition, we facilitate linking an individual’s personal
qualifications and capabilities with the Holding’s targeted business strategies.
Starting from their very first day on the job, the recruitment and training process
identifies the strengths and skills of employees, providing the Holding with fresh
perspectives and engendering dynamism within the workplace. The HR Department
uses metrics, evaluations and employee reviews to create an accurate appraisal of the
workforce and to guide individuals toward a sustainable and rewarding career path.
We believe that a committed workforce and effective teamwork are only achieved
through people who genuinely feel valued and needed. Our progressive corporate
policies, coupled with personal and professional development programs for employees,
actively support these goals.
With a highly competent and motivated employee base, Do¤an Holding’s productivity
and efficiency are optimized, thus enhancing operations and market value. Human
Resources works tirelessly to make Do¤an Holding’s people assets a competitive
advantage, and a point of differentiation from its competitors.
HOLDING FUNCTIONS
SELMA UYGUÇ DIRECTOR OF LEGAL DIVISION
LEGAL DEPARTMENT
As a multinational conglomerate, Do¤an Holding
companies conduct business across borders every day.
As such, the Legal Division offers advice on legal matters
that involve the Holding and its wholly-owned subsidiaries
in Turkey and elsewhere.
As a multinational conglomerate, Do¤an Holding companies conduct business across
borders every day. As such, the Legal Division offers advice on legal matters that
involve the Holding and its wholly-owned subsidiaries in Turkey and elsewhere.
In this capacity, we play an active role in all commercial activities and transactions
of Do¤an Holding enterprises. Our main responsibility is to ensure that all these
business activities and transactions comply with the law and all regulatory requirements.
However, we do not limit ourselves to this minimum threshold. Along with the
foundation of Corparate Governance compliance, the Legal Division endeavors to
ensure the implementation of the strict ethical principles, quality standards, transparency
spelled out in the corporate governance guidelines of Do¤an Holding to the fullest
extent, both within the Group and vis-à-vis third parties.
In doing this, we particularly focus on:
• Taking legal measures to protect the interests of the Company against third
parties and to prevent disputes; ensuring that contracts to be executed and
documents to be issued are compatible with this principle;
• Providing the necessary legal advice and documents to the departments of the
Company and its wholly-owned subsidiaries upon their request, and offering
prompt advice on transactions that could have legal, regulatory and financial
consequences;
• Responding to the queries of Executive Management regarding the line of activity
of the Holding and its investments and offering counsel in this regard.
An all important function in today’s global business environment, Do¤an Holding’s
Legal Division strives to steer the Company and its affiliated enterprises through a
complex patchwork of legal, regulatory and internal corporate governance guidelines.
Thus, the Holding is permitted to achieve its maximum level of operational efficiency
and optimal market value while meeting, and oftentimes exceeding, prescribed legal,
regulatory and ethical strictures.
01 BANKING AND INSURANCE
02 ENERGY
03 INDUSTRY AND TRADE
04 TOURISM
05 MEDIA
06 SOCIAL RESPONSIBILITY
DO⁄AN HOLDING
In every sector in which we are engaged, we structure our activities
around a customer-centered approach.
This “customer first” vision is complemented with the strategy of
assisting those of our companies with market leadership positions
to fortify their dominance and to help those with the potential of
becoming a market leader to fully realize their potential.
23
01
The Do¤an Financial Services Group is one of the
strongest banking and financial groups in Turkey.
The Group’s member companies benefit from sound
risk management practices, a strong capital base,
deployment of state-of-the-art information technology
and a highly qualified staff.
25
01
DIfiBANK FINANCIAL HIGHLIGHTS*
BALANCE SHEET (TL Billion)
2004
2003
LOANS
3,576,125
2,834,134
DEPOSITS
3,978,690
3,707,121
FUNDS BORROWED FROM BANKS
2,372,549
1,461,193
945,383
1,012,313
7,723,567
6,569,203
382,349
328,801
NET INTEREST INCOME AFTER FOREIGN EXCHANGE GAINS & LOSSES 373,717
333,616
NET INCOME BEFORE TAXATION & MONETARY LOSS
53,094
341,797
NET INCOME / (LOSS)
10,994
306,440
16.8%
21.36%
SHAREHOLDERS’ EQUITY
TOTAL ASSETS
INCOME STATEMENT (TL Billion)
NET INTEREST INCOME
CAPITAL ADEQUACY RATIO
SHAREHOLDER STRUCTURE (%)
2004
2003
DO⁄AN fi‹RKETLER GRUBU HOLDING A.fi.
62.37
62.37
DIfiBANK EMPLOYEE PENSION FUND
10.10
16.56
DIfiBANK SECURITY FOUNDATION
OTHER SHAREHOLDERS
TOTAL
6.51
21.03
21.07
100.00
100.00
RATINGS
MOODY’S
Bank Deposits: B2
Financial Strength: D+ (one of the highest among Turkish banks)
FITCHRATINGS
Individual: D (one of the highest among Turkish banks)
Foreign Currency L/T: B+, Foreign Currency S/T: B
National: A- (Tur)
CAPITAL INTELLIGENCE
Domestic Strength: BBB (one of the highest among Turkish banks)
Foreign Currency L/T: B, S/T: B
* Financial figures are extracts from the audited, consolidated and inflation adjusted financial statements of D›flbank A.fi. and its subsidiaries (except for leasing and factoring)
26
D›flbank owes its high asset quality to long-established,
DO⁄AN FINANCIAL SERVICES GROUP
market-proven lending policies. Well-positioned in the
The Do¤an Financial Services Group is one of the strongest banking and financial
groups in Turkey. The Group’s member companies benefit from sound risk management
practices, a strong capital base, deployment of state-of-the-art information technology
and a highly qualified staff.
market with a strong capital base and high ratings from
international agencies, D›flbank has ready access to ample
funding resources available at favorable terms for its corporate
lending practice.
D›flbank is the flagship company of the Do¤an Financial Services Group. In addition
to banking, the Group consists of leasing, factoring, insurance and brokerage companies.
D›flbank has a subsidiary bank in Malta and a branch office in Bahrain.
The diversification of D›flbank’s activities resulted from a strategic decision taken in
2001. It was decided to transform the Bank into a financial hub through which a
more comprehensive range of products and services could be offered to targeted
customer segments. This integration has created important competitive advantages
for all the institutions within the Financial Services Group while simultaneously
generating significant economies of scale.
The subsidiaries operating under the umbrella of the Do¤an Financial Services Group
enable D›flbank to reach more customers. At the same time, the Bank’s international
operations contribute toward its goal of becoming a global player in financial markets
while significantly enhancing its credibility.
COMPANIES
DIfiBANK*
D›flbank is a successful and financially sound banking institution offering services
within four strategic lines of business: Corporate, Commercial, Small Business and
Retail Banking. In addition, D›flbank offers Wealth Management services. In these
principal segments, D›flbank serves a nationwide customer base through an advanced
distribution network which includes branches, ATMs, web portals, a call center in
addition to alternative distribution channels.
History
D›flbank was founded in 1964 as a joint venture between Türkiye ‹fl Bankas›, the
largest private commercial bank in Turkey, and Bank of America, under the name
Turkish-American Foreign Trade Bank. Since 1994, Do¤an Holding has held a majority
stake in the Bank. At the end of 2004, 35% of D›flbank’s shares were publicly traded
on the Istanbul Stock Exchange.
Excellent Services to Different Segments of the Corporate World
D›flbank owes its high asset quality to long-established, market-proven lending policies.
Well-positioned in the market with a strong capital base and high ratings from
international agencies, D›flbank has ready access to ample funding resources available
at favorable terms for its corporate lending practice. A customer-oriented approach
combined with a highly-skilled marketing team enables the development of tailormade solutions for corporate and commercial clients while small businesses are served
with more standardized products. There are numerous D›flbank corporate branches
specialized in providing more sophisticated corporate banking products and services.
Other highly accessible delivery channels make transactions as easy as possible for
all corporate segments irrespective of size.
D›flbank excels in making fast and accurate credit decisions by utilizing scorecards.
The centralization of complex transactions and the application of IT tools in the
execution of routine banking transactions facilitate the everyday business of the Bank.
D›flbank closely follows changing market conditions and develops new banking
applications that support different business segments. The Bank’s cash management
products relieve businesses from the burden of payments and collections, allowing
them to concentrate more on their core business activities.
* Sold to Fortis Group in July 2005
01
D›flbank derives its name from foreign trade and is a well-recognized expert in
conducting international trade operations. Every international transaction is subject
to a thorough cost and profit analysis for discerning, price-conscious corporate clients.
Low funding costs and effective use of resources give D›flbank a competitive edge in
credit marketing and banking services.
Well-diversified Customer Portfolio
D›flbank’s corporate, commercial and small business customer portfolios are well diversified
without any significant concentration in any specific industry. Companies engaged in all
forms of trade, whether wholesale or retail, domestic or foreign, are the most frequently
represented group in the customer portfolio. Because the Bank operates in a fast growing
emerging market, companies in the construction and cement industries are also well
represented in D›flbank’s customer base. These sectors have great potential for sustainable
growth and maintaining their medium-term leading positions in the economy.
D›flbank plans to further concentrate on foreign trade deals and maintain its position
as one of Turkey’s leading banks specialized in international trade. Industries that
D›flbank will focus on in the near future are those that have the greatest export
potential, namely iron and steel, food and beverage and automotive sectors.
Corporate Banking - Excellent Services to Top-tier Companies
The Corporate Banking Group caters to the financial needs of large-scale domestic
or multi-national companies in Turkey. The Corporate Banking Group serves companies
with minimum annual sales of US$ 50 million. Target clients for the Corporate
Banking Group include leading companies engaged in international trade, industrial
companies that export their products and construction companies that take part in
large-scale infrastructure projects.
Commercial Banking - Swift Banking Services to Medium-Size Companies
In the area of commercial banking, D›flbank distinguishes itself with its customercentered approach in which tailored products are developed to cater to the specific
needs of the client. All products and services delivered are of the highest quality and
aim to create a satisfied and loyal customer base. Experienced client representatives
operating through the branch network report to a central unit at the Head Office, where
information flowing in from different regions of the country is consolidated. In D›flbank’s
CRM approach, this information is then used to improve the quality of customer service
and develop new products to create competitive advantages for the Bank.
Small Business Banking - Untapped Potential across the Country
D›flbank has taken a firm step into project finance, and envisions
the financing of large-scale infrastructure projects that will
dominate the construction sector in the future.
Recognizing the immense potential in small business banking, D›flbank spun this segment
off from its commercial business and formed the Small Business Banking Group in
2003. D›flbank calls small businesses ‘Dynamic Entrepreneurs.’ The Bank is fully
equipped with products, services and tools specifically developed to meet the particular
requirements of these entrepreneurs with activities spanning several business areas.
Project Finance - Raising Funding for Infrastructure Development
D›flbank has taken a firm step into project finance, and envisions the financing of
large-scale infrastructure projects that will dominate the construction sector in the
future. Although project financing requires long-term engagement of funds, these
funds are under Turkish Treasury guarantee and offer attractive terms.
Cash Management
28
Provision of cash management services increases amounts held in deposit accounts and
offers the Bank a source of low cost funding. Also providing fee income and cost savings,
cash management services increase loyalty among corporate clientele and enable crossselling opportunities. Handling collections and payments within a customer segment
help build supply-chain systems that place D›flbank at the focal point of trade relations.
D›flbank launched a comprehensive study to analyze the life
stages of its customers and to identify their banking needs at
each life phase. New banking products are continuously
developed to cater to different customer needs starting from
Close monitoring of trading profit and loss as well as efficient VAR management has
helped D›flbank Treasury exceed profit and volume targets by comfortable margins,
while keeping prudent trading practices intact. The results it has achieved in trading
demonstrate D›flbank’s objective, which is to be one of the major players in the market.
D›flbank is one of the 10 Primary Dealers in the domestic debt market, favorably
contributing to the high increase in fixed income trading volume.
their teenage years to retirement.
International Recognition
D›flbank’s international recognition is on the rise as its international business volume
expands, its ratings from agencies improve and its financial position strengthens.
D›flbank is well known in international markets for its high degree of transparency in
disclosing all financial and non-financial information to investors, correspondent banks
and rating agencies, earning the highest ratings in the Turkish banking industry.
In the July 2004 issue of The Banker’s list of the world’s top 1,000 banks, D›flbank
was designated as Turkey’s eighth and the world’s 491st largest bank, moving up 149
places from the previous year, based upon 2003 year-end financials. D›flbank was
presented as one of the fastest growing in the world ranking scale.
Retail Banking - An Evolving Market Environment
Ever since the financial crisis of 2001, the banking environment in Turkey has
experienced rapid changes on all fronts, especially in retail business lines. Now
deprived of lucrative gains from trading government securities, banks are again
pursuing basic banking activities to bolster their bottom lines. Faced with non-payment
from corporate customers during the crisis, banks for the most part have shifted their
focus back to the consumer. As a result, credit cards and consumer credits were the
most popular banking products in 2004.
To increase credit card turnover despite stagnant market conditions, installment
credit cards and sales campaigns in cooperation with major retailers were aggressively
launched. Turkey’s rapidly growing young population offers many opportunities for
multi-specialist banks, especially in the creation of new retail banking products and
services that will penetrate more deeply into this up-and-coming market segment.
D›flbank’s Approach to Retail Banking
D›flbank launched a comprehensive study to analyze the life stages of its customers and
to identify their banking needs at each life phase. New banking products are continuously
developed to cater to different customer needs starting from their teenage years to
retirement. This strategy encompasses a customer-focused approach in which the Bank
has revamped basic retail banking products to suit the different life stages of its
customers. Additionally, D›flbank has developed CRM models that closely monitor
certain customer behaviors, allowing the Bank to utilize models to offer relevant
products to selected segments.
With an emphasis on retail banking, D›flbank aims to develop a stable revenue stream
through a widespread retail customer portfolio. To differentiate its retail products
and services from other banks, D›flbank aims to create products that make customers
feel their specific needs are being personally addressed. D›flbank aims for sustainable
profit, multiple revenue streams and a loyal customer base in its retail banking
activities.
Treasury
D›flbank’s strong competence in its treasury related activities is a result of its highly
qualified staff, extensive experience in trading treasury products, sound risk management
practices and a technologically advanced trading and information infrastructure. In
addition, the Bank’s position as a successful Primary Dealer in the domestic debt
market contributes to its solid performance in this area.
In 2005, Moody’s confirmed D›flbank’s financial strength rating as D+, the highest
among Turkish banks. In 2004, FitchRatings assigned a financial strength rating of D,
while Capital Intelligence confirmed the Bank’s financial strength with a rating of BBB.
Investor Relations
Taking a responsible and proactive approach in dealing with stakeholders, along with
pioneering a totally new banking concept, D›flbank established the Investor Relations
Department.
D›flbank believes that the investor relations (IR) function is a strategic management
responsibility that integrates finance, communications, marketing and securities laws
compliance to enable the most effective two-way communications between a company,
the financial community and other constituencies. This can also be viewed as a full
compliance approach towards D›flbank’s belief in corporate governance.
IR responds to all inquiries from shareholders duly and accurately, in accordance
with objectivity principles and ensures two-way ongoing communication between
management and shareholders.
Risk Management
At D›flbank, risk management is a multi-layered process that extends well beyond
existing methodologies and tools. The Bank has adopted an integrated risk management
approach in which strategy and bank-wide activities all interact with the risk assessment
process. At the center of our integrated risk management approach is a set of highly
sophisticated mathematical quantification tools and techniques that are used to meet
the needs of the Turkish business environment. The philosophy behind the adoption
of such techniques at D›flbank is to establish an effective control framework that is
able to identify and manage individual as well as aggregate risk appropriately. Such
an approach enables the Bank to apply a consistent policy to all types of risk for the
purposes of identification, measurement and management.
Information Technology
As success in modern banking relies heavily on a well designed and efficient IT
infrastructure, D›flbank has invested continuously in this area and developed a network
of IT-based processes to reach a wider customer base.
Employing a dynamic and well-trained team of IT professionals, D›flbank meets the
majority of its applications software needs in-house, using its rapid development
capability. The IT Department immediately responds to the needs of all units within
the Bank, offering solutions that incorporate state-of-the-art hardware and software.
01
Human Resources
The main objective of the Human Resources Department is to make D›flbank the
most preferred workplace for industry professionals while fostering employee loyalty
and satisfaction. Vacant positions are usually filled from within the organization.
When employment from within the company’s ranks is not possible, outside sources
are used.
With its year 2000 five-year strategic plan to become one of
the five largest investment banks in Turkey in terms of market
share, financial strength and quality of services provided, D›fl
Yat›r›m continued to make major strides in 2004 on the way to
reaching its targets.
D›flbank offers an attractive workplace for graduates of top local and foreign
universities; university graduates make up approximately 77% of the current
workforce. Effective training programs, constant monitoring of employee satisfaction
and a relaxed yet challenging work environment make D›flbank a preferred employer
in Turkey. Frequently monitored and measured, employee motivation and satisfaction
are high at D›flbank as demonstrated by the low employee turnover. Effective
training programs help to create a common language and distinct corporate culture
within the organization.
Do¤an Financial Services Group employs a staff of 4,479, of whom 1,504 work
at the Head Office, 2,340 in the branches and 635 in the subsidiaries. The average
employee age is just under 30 years.
DIfiBANK MALTA LIMITED
The Do¤an Financial Services Group recognized the commercial potential of Malta
in 1998 when it established D›flbank Malta Limited as its first overseas venture.
The island’s strategic location in the middle of the Mediterranean has made it a
natural business center where modern-day financial regulations and operations are
in effect.
With Malta becoming a member of the European Union in 2004, D›flbank Malta
will be the stepping-stone for the Do¤an Financial Services Group into the EU. The
establishment of D›flbank Malta conforms to Turkey’s political and macroeconomic
targets and the Group’s expansion plans in the EU.
D›flbank Malta provides traditional banking products to a select high net worth
clientele. The Bank, offering sophisticated trade finance services to international
customers, concentrates on developing new business lines by capitalizing on its
advanced IT infrastructure and geographic position at the center of global markets.
DIfi YATIRIM
With its year 2000 five-year strategic plan to become one of the five largest investment
banks in Turkey in terms of market share, financial strength and quality of services
provided, D›fl Yat›r›m continued to make major strides in 2004 on the way to reaching
its targets.
At the end of 2004, a market share of 2.9% in equity brokerage ranked the Company
10th among all brokerage houses in Turkey. Notably, this was achieved with a bad
debt ratio of zero. Total shareholders’ equity increased by 10% and reached YTL
36,275,673 as of end of the year.
During 2003, all D›fl Yat›r›m branches were equipped with remote access facilities
to the Istanbul Stock Exchange (ISE) trading floor. As a result, the share of electronic
orders remitted to the ISE increased to 45% among all trading orders processed by
D›fl Yat›r›m during the year.
D›fl Yat›r›m mutual funds, handled by D›fl Asset Management-a wholly owned subsidiary
of D›fl Yat›r›m-continued its successful performance during 2004. Both the B-Type
Money Market Fund and the B-Type Fixed Income Fund ranked first among the
country’s top 35 funds. D›fl Asset Management managed seven mutual funds and
seven pension funds of Do¤an Pension Fund during 2004.
30
In 2004, the number of active D›fl Factoring clients increased
DIfi PORTFÖY
by 86% while funds in use rose by 76%. These results were
D›fl Portföy, an asset management company, was founded in July 2002. D›fl Yat›r›m
owns 99.6% of the company, which offers mutual funds and pension fund management
services to corporate and retail clients. Total mutual funds assets under management
reached US$ 134 million by the end of June 2004, up from US$ 104 million in 2003.
This level gave the company a market share of 0.74%. D›fl Portföy currently manages
four D›flbank mutual funds and three D›fl Yat›r›m mutual funds. In addition to mutual
funds, D›fl Portföy also manages seven Do¤an Emeklilik pension funds which totaled
US$ 9.6 million by end of year 2004.
achieved without any bad debts or problem cases.
D›fl Portföy also offers private, individualized portfolio management services to
institutional and private investors, with about US$ 27 million under management.
D›fl Portföy’s approach to customer service is characterized by a commitment to
building a long-term client relationship. The company strives for excellence in portfolio
management to be achieved by combining investment performance and risk management
with high-quality client service
DIfi FACTORING
Brokerage Activities
In 2004, total equity trading volume on the ISE stood at US$ 295.5 billion while
D›fl Yat›r›m’s trading volume increased by 41% over 2003, reaching US$ 8.3 billion.
This volume, achieved with 26,000 customers, generated a 2.9% market share and
US$ 5 million in brokerage commissions. Thanks to sound risk management, no bad
debts or any other problematic issues materialized.
The number of customers investing through D›fl Yat›r›m’s Internet site increased by
26% and reached 9,500. Additionally, the number of D›fl Yat›r›m customers utilizing
stock exchange data services on the renewed investment portal www.yatirimyap.com
increased to 16,500 with 11 million hits year to date. Through cooperation with
Dogan Online, D›fl Yat›r›m customers receive real-time stock exchange information,
trade online and have unlimited Internet access.
Asset Management
The mutual funds managed by D›fl Asset Management reached a market value of US$
134 million by year-end 2004, recording high annual net gains once again. In terms
of performance within their respective groups, both the B-Type Money Market Fund
and the B-Type Fixed Income Fund ranked first among Turkey’s top 35 funds.
Discretionary asset management services are provided to 10 select customers whose
individual portfolios total US$ 27 million. In addition to the seven mutual funds, D›fl
Asset Management managed seven pension funds of Do¤an Pension Fund.
D›fl Factoring provides factoring services that complement the short-term
commercial lending and trade finance activities of its parent Bank’s nationwide
branch network. D›fl Factoring has been a member of Factors Chain International
(FCI) since 1997.
In 2004, the number of active D›fl Factoring clients increased by 86% while funds
in use rose by 76%. These results were achieved without any bad debts or problem
cases. To accommodate increasing business volume, shareholders’ equity was raised
to US$ 9 million, an increase of 50% over the previous year.
To promote its export-factoring business, the Company worked to achieve synergies
with D›flbank branches; visits were made to selected branches located in areas with
export potential. Like its parent D›flbank, D›fl Factoring also targets "dynamic
entrepreneurs" in its marketing activities.
At the end of 2004, the total turnover of D›fl Factoring reached US$ 440 million with
export factoring’s share amounting to US$ 40 million. The Company enjoyed a market
share of approximately 5% in domestic factoring and 1% in export factoring conducted
in Turkey. D›fl Factoring ranked fifth among members of the local Factoring Association
in terms of total turnover.
Major factoring clients are primarily involved in food processing, textiles, chemicals,
paper and paper products and spare parts manufacturing.
According to IAS-based financial results, total factoring receivables were YTL 91
million at the end of 2004 while income from factoring operations reached YTL 17.5
million. Total assets stood at YTL 93.5 million at the end of the year.
DIfi LEASING
Corporate Finance
During 2004, D›fl Yat›r›m’s Corporate Finance team provided financial advisory
services to a major information technology company for a US$ 8.5 million financing
transaction with the International Finance Corporation. Furthermore, buy side advisory
services were provided to a major food manufacturer.
D›fl Yat›r›m participated in the Desa, Türk Traktör, and Do¤ufl Otomotiv Initial Public
Offerings (IPOs) as a syndicate member, accounting for 4-6% of the local retail book.
Furthermore, D›fl Yat›r›m participated in the Turkish Airlines Secondary Public
Offering as Co-Lead Manager, and the PO Oil Financing Ltd. bond offering as CoLead Manager.
D›fl Leasing serves clients throughout Turkey by providing alternative medium to longterm financing solutions. Supported by the branches of D›flbank, which has a 99%
stake in the Company, D›fl Leasing takes maximum advantage of the synergy resulting
from this association with D›flbank and Do¤an Holding.
In Turkey, total leasing transaction volume increased 32% to US$ 2.9 billion in
2004. Fifteen leasing companies executed 86% of the total business volume. In 2004,
D›fl Leasing achieved a business volume of US$ 142 million with 1,002 contracts and
realized US$ 123 million of this amount. D›fl Leasing is one of the top ten leasing
companies in Turkey with a 4.2% market share.
About 51% of D›fl Leasing’s business originates from D›flbank branches while direct
marketing generates the remaining 49%. The Company had 1,609 active clients at
the end of 2004. Outstanding leasing receivables is denominated in US$ (31%),
01
Euro (50%) and Turkish Lira (19%). D›fl Leasing does not extend loans to any one
company, sector or product that would exceed 20% of its total portfolio. This year
construction machinery and car leasing, both commercial and passenger, were targeted
with particular emphasis on forklifts of all sizes. Asset quality is a prime consideration
as the Company pursues a conservative credit policy.
Total external funding reached US$ 116 million at the end of 2004. This year, D›fl
Leasing obtained a US$ 20 million loan from the World Bank through TSKB, a
private investment and development bank in Turkey. D›fl Leasing used this credit line,
called EFIL II, to serve customers that are exporters.
Currently, Do¤an Emeklilik employs a well-educated and dynamic
Total lease receivables reached YTL 157 million at the end of 2004, up from YTL
123 million in 2003 as a result of increased business volume. Shareholders’ equity
stood at YTL 16 million and total assets at YTL 180 million at the end of the year.
direct sales team of 180. The Company serves its clientele
DO⁄AN EMEKLILIK (PRIVATE PENSION COMPANY)
through D›flbank’s branch network and a total of 55 of its own
agencies - 31 private pension, 20 life insurance and four combined
agencies - located across the country.
Do¤an Hayat started operations in January 1998 in life and health insurance. The
Company launched pension fund activities in December 2003 under its new name
Do¤an Emeklilik (Do¤an Private Pension Company) after obtaining its license in
August of that year.
The Company largely completed its restructuring in late 2003 and has been involved
in pension fund management since March 2004. Close co-operation with D›flbank is
foreseen in marketing pension fund products within a bancassurance model. The
advertising campaign that began in December 2003 has played a significant role in
creating brand recognition among target clientele.
Currently, Do¤an Emeklilik employs a well-educated and dynamic direct sales team
of 180. The Company serves its clientele through D›flbank’s branch network and a
total of 55 of its own agencies - 31 private pension, 20 life insurance and four
combined agencies - located across the country. The Head Office was relocated to
Tekfen Tower in February 2004 and the number of headquarters personnel has
increased to 238.
Do¤an Emeklilik’s strategic goals include increasing brand awareness for its pension
fund products and raising its market share to 10% from its current level of 5%, in
terms of customers served across all segments. Creating loyalty and building longterm relationships among clientele, improving operational efficiency while increasing
premium income and enhancing sales effectiveness are other strategic targets that
drive Do¤an Emeklilik.
New and innovative insurance products such as education insurance and life insurance
with selective coverage have been launched to help the Company increase its market
share.
Life Insurance Activities
In 2004, Turkey’s life insurance business recorded a total premium income of US$
621 million. Do¤an Emeklilik achieved a 40% increase in its premium income for
the year, reaching US$ 14 million. Of the Company’s total premium income, 18%
was generated from first time sales and 82% from policy renewals. The breakdown
of sources of life insurance premium income was as follows: 35% from pension funds,
59% from D›flbank’s branches and direct sales and 6% from agencies.
In terms of life insurance premium generation capacity, Do¤an Emeklilik had a market
share of 1.6% at the end of 2004. With this small increase in market share, Do¤an
Emeklilik again ranked as the 12th largest life insurance company in Turkey.
32
Pension Fund Activities
Advertising campaigns will continue throughout 2005 to raise awareness of pension
funds and to attract potential participants. Total advertising expenses are expected
to reach US$ 2.5 million for 2005. Furthermore, innovative products - such as a
Pension Plan with no management fee, which aims to provide participants with higher
earnings and lower fees - have been developed to better meet customer needs.
As a new name in the market, with a successful track record, Do¤an Emeklilik aims
to gain a significant market share in this fast developing business segment. The ability
of Do¤an Emeklilik to leverage its association with the Do¤an Group and its financial
institutions, especially its parent D›flbank, will assist greatly in its efforts. Bancassurance
will take a significant role in the pension funds business as it is restructured through
the joint efforts of D›flbank and Do¤an Emeklilik.
RAY S‹GORTA
Ray Sigorta was chartered in 1958 in participation with predominantly state-owned
transportation enterprises. The Company operated primarily within the transportation
industry and gained valuable experience in that area. Do¤an Holding acquired the
majority of Ray Sigorta’s shares from the Privatization Administration in 1992. In
2001, Ray Sigorta shares were transferred to D›flbank, making it the major shareholder.
Currently, Ray Sigorta is a public company listed on the Istanbul Stock Exchange.
Operating under its mission statement, which targets sustainable growth and profitability
by pursuing rational pricing policies and continually augmenting its market share,
Ray Sigorta achieved an overall market share of 4.3% in 2004 within a sector
comprised of 28 non-life insurance companies.
Ray Sigorta, operating through D›flbank branches in addition to 497 agencies of its
own, generated insurance premium revenues of TL 168.8 trillion in 2004. Presently,
the Company serves approximately 750,000 individual policyholders in various business
segments.
Highlights
Operating under its mission statement, which targets sustainable
growth and profitability by pursuing rational pricing policies
and continually augmenting its market share, Ray Sigorta
achieved an overall market share of 4.3% in 2004 within a sector
comprised of 28 non-life insurance companies.
• Widely recognized in the international reinsurance sector
• Has one of the highest premium collection ratios in the marketplace
• High ratio enables Ray Sigorta to maintain an investment portfolio of liquid
financial assets
• Consistently follows a precise cancellation policy regarding late payment of
premium installments
• All premiums booked represent collectible amounts
• Made a name for itself in the industry by settling all claims timely and efficiently
Along with a careful new agency selection process, close ties with Do¤an Holding
form the basis of the strategy to increase market share and attain further growth.
The medium-term strategy of Ray Sigorta rests on its target of maintaining its position
as one of the strongest insurance companies in the marketplace capable of collecting
premiums on time, creating additional funds for new investments.
02
ENERGY
Petrol Ofisi aims to remain the number one fuel distribution
company in terms of customer preferences while maintaining
leadership in the fuel distribution sector through adopting
dynamic and effective management principles, respecting
social and environmental sustainability and safeguarding
the interests of its stakeholders in all its activities.
35
02
ENERGY
Consequently, with the most extensive network and highest
storage capacity in Turkey, Petrol Ofisi has strategically
positioned itself to take advantage of deregulation by using its
purchasing power to get better sales terms from suppliers.
PETROL OF‹S‹
Field of Activity
Petrol Ofisi is a petroleum products distribution company operating through a wide
network of stations, terminals and facilities throughout Turkey. The Company plans
to become a global energy company by entering into alternative energy markets. The
Company meets the petroleum product needs of motorists as well as public and private
enterprises. It purchases, imports, exports and holds in reserve petroleum products
and manufactures various types of lubricants.
Highlights
• Very well-known and well-established brand name
• Providing service through 3,300 branded gas stations, six regional offices, two
lubricant blending plants, aviation services at 26 airports, nine terminals, two fuel
depots, one refinery liaison office and three lubricant depots
• The strongest logistics network with the largest warehousing capacity
• Possessor of a wholly owned international trading subsidiary
• A large workforce of approximately 1,000 employees.
• An effective and extensive marketing network
• Strong management team with extensive experience
• Strong financial performance
• High EBITDA margins
• Low elasticity of demand
PETROL OF‹S‹ MARKET SHARES AS OF NOVEMBER 2004
36
UNLEADED GASOLINE (ULG)
22.7%
PREMIUM GASOLINE (PMG)
33.2%
TOTAL GASOLINE
25.6%
KEROSENE
52.5%
DIESEL
35.8%
JET A-1
70.9%
TOTAL WHITE PRODUCTS
33.5%
HEATING OIL
56.4%
FUEL OIL 6
35.9%
TOTAL BLACK PRODUCTS
39.0%
LPG
21.8%
History
Petrol Ofisi was founded in 1941 as a state-owned concern to meet the petroleum
product needs of motorists as well as public and private enterprises through purchasing,
importing and stockpiling of petroleum products in various parts of the country.
In 1983, the Company was incorporated and placed under the authority of the
Privatization Administration for full privatization in 1990. In 2000, Petrol Ofisi
became one of Turkey’s largest privatizations, with 51% of its shares purchased for
US$ 1,260 billion by ‹fl-Do¤an Petrol Yat›r›mlar› A.fi., the Joint Venture Group
comprised of Türkiye ‹fl Bankas› and Do¤an Holding.
At the time of its privatization, in July 2000, the Company’s market share dropped
to an all time low of 19.2% and 28.8% for gasoline and diesel, respectively. To further
complicate the situation, the 2001 economic crisis had an adverse impact on the
entire economy including the fuel distribution sector, where the decline in consumer
spending translated into a decrease in the demand for fuel. During that time, the
management team worked hard to establish a customer and value driven organization
while aggressively cutting costs. The number of employees was drastically cut from
3,838 to slightly above 1,000. In an effort to improve the perception of the Company
by the public, new products were launched, effective monitoring mechanisms were
set in place and the overall efficiency of the dealer network was increased significantly.
The average sales per station increased substantially, from 600 cubic meters in 2000
to 1,416 cubic meters in 2004. Petrol Ofisi also began to focus entirely on its core
business and sold its non-core assets.
The years 2003 and 2004 saw radical changes take place in the industry. The new
Petroleum Law that was introduced in December 2003 and also the related secondary
legislation, will be in effect beginning from January 1, 2005.
Consequently, with the most extensive network and highest storage capacity in Turkey,
Petrol Ofisi has strategically positioned itself to take advantage of deregulation by
using its purchasing power to get better sales terms from suppliers.
SHAREHOLDER STRUCTURE
DO⁄AN fi‹RKETLER GRUBU HOLD‹NG A.fi.
47.42%
TÜRK‹YE ‹fi BANKASI A.fi.
39.33%
CAM‹fi YATIRIM HOLD‹NG A.fi.
4.05%
CAM‹fi MADENC‹L‹K A.fi.
4.05%
DO⁄AN ENERJ‹ YATIRIMLARI SAN. VE T‹C. A.fi.
FREE FLOAT
TOTAL
0.000008%
5.15%
100.00%
Vision, Mission and Targets
Petrol Ofisi aims to remain the number one fuel distribution company in terms of customer
preferences while maintaining leadership in the fuel distribution sector through adopting
dynamic and effective management principles, respecting social and environmental
sustainability and safeguarding the interests of its stakeholders in all its activities.
To achieve its vision, Petrol Ofisi plans to:
• Improve its retail station network
• Enhance retail efficiency
• Target potential growth markets by developing products with high profit margins
and performance
• Strengthen dealer loyalty
• Expand its customer portfolio in industrial sales
• Reduce costs across the entire organization
02
ENERGY
Assessment of 2004 Results
In 2004, Petrol Ofisi achieved net sales of TL 1,036 trillion, yielding a net profit of
TL 249 trillion for the year. Earnings per share decreased from TL 1.013 million in
2003 to TL 0.721 million in 2004. After the end of the Iraq war, Petrol Ofisi began selling unleaded gasoline, diesel fuel
and kerosene to Iraq. In addition, correctly identifying opportunities in the region,
Petrol Ofisi moved in and starting from May 2003 sold Iraq a total of 850,000 tons
of products.
Following privatization, Petrol Ofisi increased its exports of lubricants. In 2004, it
exported a total of 7,200 tons to 22 countries. Through its international oil trading
company, PO International Oil Trading Ltd., third-party sales began taking off in 2003.
As the leading oil distribution company in Turkey, Petrol Ofisi
will continue to seek opportunities abroad not only to increase
exports but also to expand its network and enter into new
business lines.
Lubricants
Petrol Ofisi produces a variety of lubricants at its two lubricant blending facilities.
Paraffin-based motor oil, hydraulic fluids and industrial oils are produced at the
Alia¤a plant, while a wider range of oils and lubricants, including grease, are produced
at the Derince plant.
Petrol Ofisi has an annual lube oil production capacity of 170,000 tons, of which
110,000 tons (including 10,000 tons of grease) are manufactured at the Derince
factory and 60,000 tons are produced at the Alia¤a plant. The Derince plant has the
distinction of possessing the largest and most modern can and drum-filling machinery
in Turkey.
While the lubricant market in Turkey grew by approximately 5% from 2000 to 2004,
Petrol Ofisi continued to focus on its product mix and profitability optimization. In
2004, Petrol Ofisi, maintained its strong market lead, keeping its 32% market share,
while selling 107,500 metric tons of lubricants.
Petrol Ofisi continued to expand its product range and introduced 31 new products
in 2004.
Work is ongoing towards obtaining quality approval certifications from Original
Equipment Manufacturers (OEM); in 2004, 44 OEM approvals were obtained.
Introducing Differentiated Products
Demand for unleaded gasoline in Turkey is expected to grow as a result of the
introduction of EU fuel specifications. Petrol Ofisi introduced its own brand of unleaded
gasoline, Protech, in July 2001 and its own brand of enriched diesel, Prodizel, in
November. In April 2001, the auto-LPG brand, Petrogaz, was launched. In June
2004, Petrol Ofisi introduced new brands for 98 octane unleaded gasoline and low
sulphur diesel for new generation cars, Protech 98 Plus and Prodiesel Europlus
respectively. PO also has an exclusive agreement with Ethyl for the procurement of
the environmentally friendly diesel additive Greenburn, which provides better combustion
and better performance.
International Cooperation
As the leading oil distribution company in Turkey, Petrol Ofisi will continue to seek
opportunities abroad not only to increase exports but also to expand its network and
enter into new business lines. Turkey’s unique location, positioned between the world’s
largest oil and gas reserves in the Middle East and major energy consumers in Western
Europe, will certainly contribute to the goal of becoming an integrated energy company
in the near future. The ultimate goal of the Company is to become the leading petroleum
products distributor in the region.
38
Petrol Ofisi is a strong advocate of sound corporate governance
Petrol Ofisi International Trading
principles and follows the best practices and standards accepted
Petrol Ofisi International Oil Trading Limited is a wholly owned subsidiary of Petrol
Ofisi A.fi. The Company is active in oil trading and logistics predominantly in the
Mediterranean region.
around the world.
Petrol Ofisi International Trading supplies Petrol Ofisi A.fi. with a wide range of
products, provides financing and manages the oil price risk exposure of the group.
The Company also has developed a significant level of trading activity with other
parties and is actively pursuing sourcing, supply and processing opportunities outside
of Turkey with the aim of becoming one of the leading oil trading companies in the
region.
The diverse backgrounds of company employees, who are experts in physical oil
trading, hedging, shipping and quality assurance, add strength to the Company.
PO Oil Financing Ltd.
A private financing company, PO Oil Financing was established in mid-2004 in the
Cayman Islands for issuing bonds to investors in international markets.
PO Petrofinance N.V.
Staffing
Petrofinance was established in 2002 in the Netherlands for generating funds, loan
acquisition, and crediting activities.
Petrol Ofisi employs a total staff of 1,012 with an average age of 36. Approximately
45.27% of staff hold university and post-graduate degrees.
Cyprus Turkish Oil Ltd. (Kipet)
To anticipate changes in the needs of its employees and to meet all their requirements,
Petrol Ofisi has taken some major steps. The Company utilizes a Competency Based
Integrated Human Resources System for a high-performance workplace. Additionally,
a Career Planning System complementing a Performance Enhancement System has
also been implemented.
Focus on Quality and Principles of Corporate Governance
As a strong advocate of quality, the Lubricants Division has earned the ISO 9001:2000
Quality Management Certificate. In addition, the Lubricants Division was audited
and certified by DQS (the German certification body) and the TSE (Turkish Standards
Institute) in May 2003 for compliance with ISO 9001:2000 prerequisites.
Both the Lubricants Division and the Logistics Division are currently working together
toward attainment of the ISO 14001 Environmental Management System Certificate
and the OHSAS 18801 Work Safety and Labor Health Certificate.
Petrol Ofisi is a strong advocate of sound corporate governance principles and follows
the best practices and standards accepted around the world. These include regular
monthly board meetings, a well-established and functioning Internal Risk Department,
the quarterly implementation of an independent audit and an Internal Audit Committee
working to adhere to Capital Markets Board regulations.
Erk
In June 2003, Petrol Ofisi established Erk Petrol, launching its second brand on the
market. The primary mission of this Company is to work with stations with lower
sales potential and help them manage their capacities more efficiently. Petrol Ofisi
expects Erk Petrol to capture a 3% market share rapidly and become one of the
leading brands in the marketplace. The objective of the Company is to reach 800
stations in three years and become the seventh largest firm in the sector. By the end
of 2004, Erk Petrol signed 440 distributorship agreements; 140 stations were
redesigned according to corporate identity specifications.
Kipet was founded on December 1974 to meet the demand for liquid fuel in the
Turkish Republic of Northern Cyprus.
Kipet imports the liquid fuel - which it markets, sells, and distributes - from Tüprafl
while it imports mineral oil from Petrol Ofisi. The freight service for the imported
goods is also provided by Petrol Ofisi.
Petrol Ofisi owns 52% of the Company’s shares while the Turkish House of
Representatives Consolidated Fund (Development Fund) owns the remaining 48%.
Located on its 50 acre property in Kalecik Facilities, the Company owns nine liquid
fuel tanks with a storage capacity of 12,700 tons and two LPG spherical tanks with
a capacity of 2,000 tons. An additional facility is operational in Ercan Airport for
Jet A1 fuel supply services.
Kipet has maintained its market leader status in the Turkish Republic of Northern
Cyprus in 2004. Total sales, in metric tons, for each product category follows:
PRODUCT CATEGORY
TOTAL SALES IN M. TONS
GASOLINE SUPER
18,617
UNLEADED GASOLINE SUPER
17,735
DIESEL OIL
69,210
EURO DIESEL
650
KEROSENE
606
JET A 1
LPG
MINERAL OIL
7,919
16,475
759
Currently operating through 77 service stations, the Company has begun renovations
in eleven of them in accordance with the Company’s new institutional identity.
The renovation investments will continue in 2005.
03
INDUSTRY AND TRADE
AHMET ÇA⁄LAR INDUSTRY AND TRADE GROUP PRESIDENT
Similar to other business divisions within the Holding,
the Industry and Trade Group seeks to create value as it
contributes to the Holding’s overall market value through
outstanding business performance; simultaneously
communicating this performance to investors.
41
03
INDUSTRY AND TRADE
The Industry and Trade Group has also recorded a significant
advancement in export sales as a result of focused efforts of
both companies in export markets as mentioned in related
company sections. The Group is also currently exploring
investment opportunities in international markets.
INDUSTRY AND TRADE
Similar to other business divisions within the Holding, the Industry and Trade Group
seeks to create value as it contributes to the Holding’s overall market value through
outstanding business performance; simultaneously communicating this performance
to investors. In 2004, business performance showed sustainable growth and profitability,
a strong balance sheet, healthy cash flow and solid management practices. With
regard to synergy created within Do¤an Holding in the development of mass marketing
projects, marketing companies are cooperating with other divisions within Do¤an
Holding, in particular with DYH’s media companies.
A strong and sustainable business performance can only be achieved through the
implementation of good corporate governance principles and a continuous upgrading
of human capital in companies within the division. Customer focus in all business
undertakings, management development, strategic market management and a global
outlook in business activities are other vital, strategic elements for business success.
Following the completion of the strategic plan for Çelik Halat, an investment program
has been initiated for capacity and productivity increases as well as product
rationalization. In 2004, the Ditafl strategic plan was also completed and implementation
begun. The Industry and Trade Group has also recorded a significant advancement
in export sales as a result of focused efforts of both companies in export markets as
mentioned in related company sections. The Group is also currently exploring investment
opportunities in international markets.
At Do¤an Organic Products, the Holding is in the process of integrating the venture
with the Eastern Anatolian Development Project of the United Nations Development
Project (UNDP), creating a link to potential new organic produce business opportunities
in the region. Do¤an Organic was also selected as one of the best ten social responsibility
projects by the European Commission.
In its marketing companies, Milpa and Hürriyet Pazarlama, management has made
progress in expanding into new areas such as real estate development and marketing,
as well as improving the general performance of both of these businesses.
Do¤an Otomobilcilik A.fi saw solid sales growth in 2004, after the prolonged crisis
of the past several years in the automotive market, and improved its operating results.
42
History
Originally established in 1962 as a joint venture between private sector companies
as well as some state-owned industrial enterprises, Çelik Halat was privatized in
1990. Following the privatization process, a majority of the shares were acquired by
Do¤an Holding in 1997.
Vision
Çelik Halat aims to:
• Become one of the world’s top 10 steel wire and wire products manufacturers
• Become globally competitive by focusing on Total Quality Management
• Constantly seek opportunities for further growth by reviewing and monitoring
developments in its field
Mission
Çelik Halat’s mission is to:
•
•
•
•
ÇELIK HALAT
Provide satisfactory and sustainable profit for shareholders
Continuously increase performance by following modern production and product technology
Maintain its high success rate in the competitive world market
Ensure that all its employees contribute to quality, cost savings and customer satisfaction
Field of Activity
Targets
In its early years Çelik Halat produced steel rope, galvanized wire, monotron and
spring wire. Later, with additional investments, the Company included concrete
wire/strand and bead wire into its product mix.
In line with its corporate vision and mission statements, Çelik Halat targets:
Highlights
• Delivering high value-added products and services for customers
• Excelling in customer satisfaction
• Developing its Quality Management System with the cooperation of the employees
• Extensive customer portfolio made up of well-known companies
• Forty-two years of experience and strong brand recognition
• ISO 9000:2000 Quality Assurance Certificate obtained from TSE as well as
international certification bodies such as API, LLOYD’S, DNV and AJA
• A large base of alternative suppliers
• A strategic location, enabling easy access for customers and suppliers
• Products that address the needs of different sectors
• Production flexibility
• Self-sufficiency in semi-finished goods
Evaluation of 2004 Financial Results
In 2004, Çelik Halat increased production by 10% to 41,065 tons, up from 37,382
tons in 2003. At the same time, sales increased by 37% to TL 64,851 billion, a
substantial growth over its TL 47,330 billion revenue the previous year.
In 2004, operational profit was TL 7,445 billion, profit before tax was TL 6,337
billion and net profit for the year was TL 4,115 billion.
Exports in 2004 amounted to EURO 10,371,000. Along with the employment
opportunities provided by the Company, Çelik Halat is a significant contributor to
the Turkish economy.
52.44%
Staffing
DITAfi DO⁄AN A.fi.
10.00%
FREE FLOAT
37.56%
Çelik Halat employs a total staff of 381, 12% of whom are university graduates.
Average work experience of the staff is ten years. Time spent for in-house training
was 22 hours per employee in 2004.
TOTAL
• Strong market shares:
Steel rope
Bead wire
Spring wire
Concrete strand
Monotron and galvanized wire
• Total customer-care
• Meticulous after-sales service
• Experienced and technically competent staff
• Superb laboratory test facilities
100.00%
COMPARISON OF BASIC FINANCIAL RATIOS
60%
55%
25%
85%
10%
2004
2003
CURRENT RATIO
1.74
1.94
ACID-TEST RATIO
1.38
1.46
EQUITY/DEBT RATIO
57%
52%
LEVERAGE RATIO
47%
51%
EQUITY/TOTAL ASSETS
48%
48%
RECEIVABLE TURNOVER
73 DAYS 91 DAYS
INVENTORY TURNOVER
39 DAYS 59 DAYS
03
INDUSTRY AND TRADE
Focus on Quality
Since 1993, Quality Management Systems have been in effect at Çelik Halat. The
Company has the ISO 9000:2000 Quality Assurance Certificate from TSE in addition
to DNV, AJA, API and Lloyd’s certificates.
In addition, Çelik Halat is among the 26 companies globally authorized to use the
API monogram on its steel rope products. Currently, Çelik Halat is in the process of
obtaining an environmental protection certificate ISO 14001.
Çelik Halat also collaborates with universities, research institutions and machinery
manufacturers to keep abreast of technological developments and closely follows all
related publications worldwide.
Plans for the Future
Originally established in 1972 by Turkish workers in Germany,
Ditafl grew rapidly and gathered many well-known companies
in its shareholder structure.
Çelik Halat plans for further growth in the next five years by increasing manufacturing
efficiencies and improving profitability to reach 50,000 tons/year production and
sales revenue of EURO 60 million.
The Company aims to maintain its strong brand image and leadership in the marketplace.
Processes to cut costs will be implemented and additional training for employees will
be provided at all levels to enhance efficiency. Quality improvement is a continuous
process at Çelik Halat along with ensuring work safety and environmental protection.
D‹TAfi
Field of Activity
Ditafl is the largest manufacturer of automotive suspension and steering parts in Turkey,
supplying rod ends, ball joints and drag links for Turkish and global automotive brands.
Highlights
•
•
•
•
•
•
•
•
•
•
•
Supplier to OEM, OES and IAM segments of the automotive business
32 years of experience and strong brand recognition
Largest supplier of drag links for Turkish automotive manufacturers
25% market share in Turkey
Highly experienced and well-trained personnel
Flexibility in the manufacturing processes enable rapid deliveries
Design capability meeting customer needs
Prototype testing facilities
New investments in machinery and equipment
A strong sales network of 30 wholesaler companies
A wide product range containing 1,400 different products
DO⁄AN fi‹RKETLER GRUBU HOLDING A.fi.
50.93%
N‹⁄DE PROVINCIAL ADMINISTRATION
0.22%
MINORITY SHAREHOLDERS
0.92%
FREE FLOAT
47.93%
TOTAL
100.00%
History
44
Originally established in 1972 by Turkish workers in Germany, Ditafl grew rapidly
and gathered many well-known companies in its shareholder structure. In 1990, 62%
of the Company’s shares were purchased by Do¤an Holding. In the following years,
some minority shares were sold on the Istanbul Stock Exchange, making Ditafl a
publicly listed and traded company.
In 2004, Ditafl achieved net sales revenue of TL 36,150 billion,
Focus on Quality
a 45% increase over 2003. This revenue resulted in a net profit
The famous blue product box has become synonymous with the Ditafl brand in the
marketplace. Ditafl has been accredited with the following licenses and certifications
that ensure quality and proficiency:
of TL 4,988 billion for the Company, which had posted a profit
of TL 3,915 billion the previous year.
•
•
•
•
•
•
Rod Ends TSE – TS Compliance Certificate (TS 5476)
Ball Joints TSE – TS Compliance Certificate (TS 9444)
Proficiency in Manufacturing License
ISO 9001:2000 Quality System Certificate
Koç Group Quality System Proficiency Certificate (A Grade)
ISO/TS 16949 Automotive Suppliers’ Quality System
A project is underway to acquire the ISO 14001 Certificate by the end of the year 2005.
Total sales of US$ 33 million are projected for 2005, with exports of US$ 13.5
million. By 2010, the Company has set a goal for total sales of US$ 63 million, with
a production level of 10 million units.
DO⁄AN OTOMOB‹LC‹L‹K
Field of Activity
Ditafl aims to increase its production capacity threefold while maintaining top product
quality, reasonable prices and customer satisfaction.
Do¤an Otomobilcilik operates as a 3S distributor for Ford in the Kad›köy district of
Istanbul. It has received numerous awards for successful performance from Ford
Otosan, the manufacturer of Ford vehicles in Turkey.
To achieve this, the Company will:
Highlights
• Make Ditafl a global supplier of automobile manufacturers
• Position Ditafl to become the preferred brand in the replacement market
• Create satisfied employees and customers
Ditafl will:
•
•
•
•
•
Commit itself to continuous improvement
Reinforce communication between employees and management
Strengthen its leadership position in the market
Maintain professional management structure
Adhere to good corporate governance principles
•
•
•
•
•
•
•
•
•
31 years of experience in the market
Strong market reputation
Experienced sales and after-sales service staff
Loyal customer base
High potential for fleet sales
Strong media support
Suitable premises for handling large servicing volume
Excellent technological infrastructure to service all types of vehicles
Strong market shares:
• 45,233 Ford passenger cars
• 63,661 Ford commercial vehicles
• Share in total Ford Sales 2.4%
Assessment of 2004 Operations
History
In 2004, Ditafl achieved net sales revenue of TL 36,150 billion, a 45% increase over
2003. This revenue resulted in a net profit of TL 4,988 billion for the Company, which
had posted a profit of TL 3,915 billion the previous year. In 2004, Ditafl was a direct
contributor to the Turkish economy with regard to paid taxes totaling TL 4,000 billion
and a gross added value of TL 19,335 billion.
Established in 1963 by Ayd›n Do¤an, Do¤an Otomobilcilik became a limited liability
company in 1974. Current shareholders are Do¤an Holding, with a share of 99.76%
and private individuals including Ayd›n Do¤an and other family members.
In the year 2004, Ditafl’ production grew by 41%. For this period, exports increased
124%, to US$ 11.67 million. Thirty-five percent of export sales were to OEM
companies. For the after market, Ditafl sold goods to 43 customers on five continents
in 21 countries. Net sales of the year 2004 amounted to US$ 27 million.
It is the vision of Do¤an Otomobilcilik to maintain the trust of shareholders and
become the most admired company in the sector. The Company stresses the importance
of information sharing and experience, as well as emphasizing its social responsibilities.
Staffing
Ditafl employs a total staff of 535, of whom 56 are university graduates. Average
experience of the staff stands at about six years for the management team and 2.3
years for other employees. The average number of job-training hours per employee
increased to 6.5 by the end of 2004, compared to 4 hours per person for 2003.
To achieve this goal, Do¤an Otomobilcilik has structured itself to deliver the highest
quality sales and after-sales services to its customers, helping to build an excellent
brand image for Do¤an Oto and Ford in the marketplace. It strives to improve
collaboration with stakeholders by establishing effective lines of communication,
offering all parties a nice experience.
In a continuous effort to create and maintain a totally satisfied clientele, Do¤an
Otomobilcilik aims to improve its quality of service by adhering to Total Quality
Management guidelines. The Company strives to regularly exceed customer expectations,
while simultaneously maintaining a highly motivated and satisfied workforce.
03
INDUSTRY AND TRADE
Assessment of 2004 Activities
In 2004, Do¤an Otomobilcilik achieved growth in all key areas. It sold 2,204 vehicles
and increased net sales by 62%, reaching a total of TL 65 billion. The Company paid
TL 2.8 trillion in value added tax and TL 500 billion in income tax withholdings for
the year.
Staffing
plans to migrate some of its activities to the Internet in an
Do¤an Otomobilcilik employs a highly qualified staff of 108, excluding interns.
Eighteen staff members possess university or post-graduate degrees. The Company
places importance on training and offers its personnel career and personal development
opportunities. It is an equal opportunity workplace, with programs implemented to
boost motivation, efficiency and team spirit. Performance is evaluated at certain
intervals and successful employees are rewarded with both monetary and non-monetary
benefits. There are frequent get-togethers and retreats to further enhance the warm
and friendly atmosphere within the Company.
effort to serve customers more efficiently and develop closer
Adherence to Quality and Corporate Governance
Do¤an Otomobilcilik closely follows global IT developments,
adopting relevant technologies for its business line. The Company
relationships with them.
As a Do¤an Holding company, Do¤an Otomobilcilik strictly adheres to the corporate
governance principles its parent company has set forth. These guidelines cover all
major operations of the Company, defining and setting rules for decision-making, risk
management, corporate communications, employment, social responsibility and audit
mechanisms.
Currently, the Company is in the process of obtaining the ISO 9001 Quality Assurance
Certificate. The Company fully abides by the principles of Ford Otosan’s progressive
and strict environmental guidelines.
Do¤an Otomobilcilik closely follows global IT developments, adopting relevant
technologies for its business line. The Company plans to migrate some of its activities
to the Internet in an effort to serve customers more efficiently and develop closer
relationships with them.
Looking ahead to the next ten years, Do¤an Otomobilcilik plans to take full command
of sales regarding Ford branded vehicles. As the Company continues to foster its sales
and marketing efforts, it also seeks to improve after-sales activities and increase its
market share both in the region and throughout the country. Do¤an Otomobilcilik will
also continue to closely follow market trends and take advantage of changing market
conditions to create new business opportunities in order to boost brand recognition
and increase profitability.
M‹LPA
Field of Activity
Milpa is a company mainly involved in the marketing of moderate to high value
products such as computers, cars and recently real estate. The Company specializes
in marketing campaigns that provide financing for durable household goods and other
big ticket items aimed at the mass market. Recently, the Company has expanded its
portfolio of goods to include televisions, audio and video systems, passenger cars,
minibuses, computers, mobile phones, air conditioning units and real estate.
46
Milpa has created a loyal and satisfied customer base through
the sale of high quality merchandise at favorable terms and
conditions, coupled with excellent customer service.
Milpa’s targets include introducing its products to high net worth consumers and
offering more Do¤an Holding products in its portfolio to boost profitability. To reach
those targets, Milpa will:
• Expand its product portfolio and add new suppliers
•
•
•
•
Increase its involvement in real estate sales
Assist in the marketing efforts of Do¤an Holding companies
Organize targeted sales campaigns in addition to those for the mass market
Organize training programs to enhance the sales skills of its personnel and distributors
Operations
Milpa is a pioneering company in targeted sales campaigns and has received extensive
media support from Do¤an Media Group channels. The Company has achieved a particularly
high volume of sales for Fiat passenger cars. Since 1994, 10% of all Fiat cars were sold
through Milpa campaigns. This percentage decreased to about 5% for a few years following
1994, until the same sales levels were restored in 1998. Years 2001 and 2002 were
stagnant in car sales due to the period of economic uncertainty in Turkey, but since the
beginning of 2003, passenger car sales have picked up once again.
Highlights
• Strong brand
• Strong customer trust
• A 26-year history in the market
• A pioneer in mass marketing
• Extensive experience in automotive sales campaigns
• The first marketing company to be awarded the ISO 9002 Quality Assurance
Certificate
• Many pioneering initiatives: first campaign for used cars, first campaign sales with
bank credits, first sales via the Internet, first sales with delivery at a later date, first
catalog sales
• First company to initiate sales of real estate through mass marketing
In 2003, in yet another pioneering venture, Milpa began to sell real estate through
media campaigns. Milpa is also about to complete construction of a shopping center
which will consist of 502 separate units by 2006.
Staffing
Milpa had a staff of 45 in 2004; nearly half hold university degrees.
Milpa will continue employing state-of-the-art IT infrastructure when designing and
implementing sales campaigns. This will ensure continued accuracy and speed in all
of its sales channel activities, including planning, procurement and delivery of goods
to the consumers.
HÜRR‹YET PAZARLAMA
Field of Activity
DO⁄AN FAMILY
65.00%
0.05%
FREE FLOAT
34.50%
TOTAL
100.00%
Hürriyet Pazarlama, which sells automobiles and motorcycles by different makers,
is a marketing company operating in collaboration with media outlets. It capitalizes
on the strength and synergy created between the Company and the Do¤an Media
Group as it establishes strong business alliances to reach potential customers with
products in high demand.
Highlights
History and Shareholders
Milpa was established in 1980 to meet the growing demand for campaign sales
programs. Milpa opened its first branch office in Ankara, followed shortly by offices
in Izmir and Adana.
Milpa went public in 1994; its shares are listed and traded on the Istanbul Stock
Exchange. Following a capital increase in 1985, Milpa became a Do¤an Holding
Company.
• A respectable, trustworthy and robust company
• Strong brand recognition and competitive advantage gained through Hürriyet,
Turkey’s most respected newspaper
• The trust-based relationship between clients and the Company
Hürriyet Pazarlama was established in 1995. After a capital increase in 2003, the
shareholding structure changed to the current structure reflected below.
HÜRR‹YET GAZETEC‹L‹K
Milpa has created a loyal and satisfied customer base through the sale of high quality
merchandise at favorable terms and conditions, coupled with excellent customer
service. Goods that make up the portfolio are reviewed constantly to adapt to everchanging customer wants and needs, while new methods to achieve timely deliveries
are continuously pursued. Since its inception, Milpa has targeted to become the
market leader in its field. Having achieved this goal, the Company is relentless in its
efforts to maintain its dominant market position.
96.072%
AD‹LBEY HOLDING
2.143%
ORTADO⁄U OTOMOB‹LC‹L‹K
1.643%
AYDIN DO⁄AN
0.071%
M‹LPA A.fi.
0.071%
TOTAL
100.00%
03
INDUSTRY AND TRADE
Do¤an Organic continues its wide-scale efforts to train its
contract farmers with respect to the production of organic feed
plants, dairy livestock and organic milk.
Hürriyet Pazarlama works to develop an effective and efficient marketing strategy
in collaboration with various media channels by using the strength and synergy created
between the Company and the Media Group.
Its mission is to establish strong business alliances and to reach potential customers
with suitable products, offer them favorable financial solutions while keeping its
client-focused marketing approach.
To achieve its vision and mission, Hürriyet Pazarlama seeks to strengthen ties with
customers and expand its market presence.
Staffing
Hürriyet Pazarlama employs a highly competent staff of 21, whose average age is
36. Of these, 12% possess university or post-graduate degrees, while the rest are high
school graduates. Most of the staff began working at the Company within the first
two years after operations began, thus employee turnover is very low.
IT Investments
Technology investments aimed to further improve the Company’s IT infrastructure
have recently been initiated. External consulting firms are employed to affect longterm strategic initiatives and to build a customer relationship management (CRM)
database.
Hürriyet Pazarlama seeks ongoing enhancement of its strong market position in the
future by further increasing sales and improving the quality of its customer service.
The Company aims to raise the level of customer satisfaction by providing improved
training for its personnel and investing in state-of-the-art technology.
DO⁄AN ORGANIC PRODUCTS
Field of Activity
48
Do¤an Organic Products is involved in organic dairy livestock and milk production.
After obtaining organic certification in the second half of 2005, Do¤an Organic will
have the largest organic dairy production capacity in Europe.
Do¤an Organic continues its wide-scale efforts to train its contract farmers with
respect to the production of organic feed plants, dairy livestock and organic milk.
Organic feed plants fields have been expanded, and the farm income and government
tax receipts have increased. The Company plans to pursue aggressive growth in
productivity. The economic impact of the operations is expected to be significant.
• Maintain high business ethics and fair distribution of know-how and financial
rewards
• Confirm that a high value-added business line can be created in organic farming
in Turkey through joint efforts with local farmers and that this can be accomplished
by adhering to principles of environmental and social responsibility
• Leave an unpolluted environment for future generations
Highlights
Focus on Quality
•
•
•
•
•
•
•
First of its kind in Turkish agri-business
Pioneering position in a fast-growing sector
Largest capacity of any organic dairy breeding and production facility in Europe
Selected as one of the 10 best socially responsible projects in Europe
Use of the latest technology available
State-of-the-art research and development capabilities
At the forefront of global trends advocating organic produce
History
Do¤an Organic was established in April 2002 for the production of organic dairy
livestock and milk. With a social mission to create added value through production
on contract basis and assist economic development in the region, the Company
completed the first stage of its investment in October 2003.
Do¤an Holding is the largest shareholder in the Company with a 98% stake, followed by
Hürriyet S›nai Ürünler Paz. San. ve Tic. A.fi., Milta Turizm ‹fll. A.fi., Do¤an Otomobilcilik
Tic. ve San. A.fi. and Do¤an Telekomünikasyon Tic. A.fi. holding equal shares.
Due to the nature of its products, it is imperative that Do¤an Organic Products employ
strict quality measures to ensure basic organic standards. To acquire certification for
organic products, the Company has invested in IT systems that will help in recording
and monitoring all production processes, ensuring global standards in terms of input
and output. These systems represent pioneering initiatives in Turkey’s agricultural
sector. Caring for the environment is a top priority of the Company.
Do¤an Organic Products is currently retaining consultancy services to attain certification
for HACCP. After this accreditation, the Company will also work toward acquiring
ISO 9001 Quality Assurance Certificate.
As a part of Do¤an Holding, the Company accepts and maintains the business
philosophies and regulations of business conduct of its parent organization.
Staffing
Do¤an Organic Products employs a staff of 49, of whom 22% are university graduates,
8% vocational college graduates and 18% high school graduates. Forty-three employees
are Kelkit residents; the average age of the staff is 29 years.
Do¤an Organic Products aims to make the greater Kelkit region a center for organic
farming, in particular for livestock and milk production. The company is structured
to become the leader in organic feed and livestock production by focusing on quality,
efficiency and sustainability, while protecting the natural environment.
In addition to their experience in organic agricultural methods, the Company’s staff
is also experienced in local production processes. Working for a pioneering company
has created a strong sense of teamwork among staff members, who have received
extensive in-house technical and hands-on training. Staff training is conducted on an
on-going basis.
As a further goal, the company conducts continuous research and development on
production to processing techniques to eventually become a technology provider.
Do¤an Organic Products aims to:
• Help grow healthy generations of livestock fed on organic products with chemicalfree certification
• Share the value created with farmers, suppliers and employees
Do¤an Organic Products has launched an extensive program to improve the quality
of its organic milk and meat production over the next three years. Organic milk
production will start by 2005 and will be marketed domestically. Do¤an Organic also
aims to make the Kelkit region a center for livestock breeding and organic milk
production by employing contracted farmers.
04
TOURISM
SEMA I. DO⁄AN TOURISM GROUP PRESIDENT
Despite negative global events in 2004,
Milta’s activities generated more than US$ 24.5 million in
direct spending and US$ 1.4 million in taxes with a direct
payroll of more than US$ 2.9 million for the year.
51
04
TOURISM
MILTA
Field of Activity
Milta is involved in tourism services that include a hotel, two holiday villages and a
marina as well as travel agency operations. It is a leading company in Turkey with
wide-ranging activities.
Milta is committed to drawing more visitors to Turkey,
Highlights
delivering a high level of customer service and satisfaction for
• One of Turkey’s leading and financially stable tourism enterprises
• Strong reputation, credibility and customer focus gained through healthy investment
and management performance
• Competitive advantages in terms of service, product quality, customer satisfaction
and trust
• Strong synergy created with other Holding companies in areas such as advertising,
finance and insurance
each guest, increasing per capita visitor spending and creating
more jobs for the community as well as higher business potential
for the country.
Initially founded in 1982, Milta assumed its present status in 2001, following several
name changes and finally merging with Karada Turizm and Milta Travel Agency.
Milta’s vision is to become one of the country’s leading tourism companies by
integrating all aspects of the travel industry under one roof.
Milta is committed to drawing more visitors to Turkey, delivering a high level of customer
service and satisfaction for each guest, increasing per capita visitor spending and creating
more jobs for the community as well as higher business potential for the country.
While further improving its existing services, Milta’s ultimate goal is to extend its
operations beyond its current boundaries. The Company is embracing diversified
tourism businesses as part of the economic development initiative. To achieve this,
the Company identifies and capitalizes on the right investment opportunities, establishes
sound methods and strategies for future development efforts and devises programs
for new concepts and attractions.
Assessment of Financial Results in 2004
Despite negative global events in 2004, Milta’s activities generated more than US$
24.5 million in direct spending and US$ 1.4 million in taxes with a direct payroll
of more than US$ 2.9 million for the year. The total impact of the contribution of
the Company to the Turkish economy is estimated to be around US$ 38 million
annually. Milta’s tourism revenue is expected to exceed US$ 28 million in 2005
Market Position
The Antalya and Mu¤la regions, where the Company’s assets are located, are taken
as a basis to assess the market position of Milta.
Current
• Total number of beds in the region (investment + operationally licensed): 334,000
• Total number of beds owned/operated by Milta: 1,400
• Milta’s tourism revenue: US$ 24.5 million
SHAREHOLDER STRUCTUR
OTHER SHAREHOLDERS
TOTAL
52
95.44%
4.56%
100.00%
2005 and Beyond
DO⁄AN AIR
Turkey has planned and declared its full intention to increase the number of incoming
travelers to 20 million bringing US$ 18 billion in revenue by the year 2006 and 30
million visitors estimated to generate US$ 30 billion in revenue by the year 2010.
To keep pace with these targets and increase its market share to a corresponding
level, Milta aims to:
Established towards the end of the year 2000, with an initial aim to provide air-taxi
services, Do¤an Air is run by an expert management team with many years of
experience in the aviation industry. The first aircraft of the Company was a Dassault
Falcon 2000, a wide-fuselage aircraft which has been in service since March 2002.
Dassault Falcon 2000 has a ten passenger capacity. With its excellent capability of
flying with single refueling stops, the aircraft quickly and easily can fly to numerous
destinations in the world.
• Revamp/refurbish its existing facilities
• Expand its current of line of business through new acquisitions and mergers
• Explore and exploit new opportunities and areas of growth.
Current Operations and Plans for the Future
• Milta has a seven-year management contract with the German-based international
tour operator Öger Tours GmbH to operate its Kemer holiday village.
• Club Milta Bodrum offers a wide variety of hospitality services to customers through
leading international tour operators.
• Milta Bodrum Marina is pursuing cooperation and joint venture initiatives with
marinas in Greece and Israel to promote and increase the volume of yacht tourism
along the Eastern Mediterranean coast.
• Milta Ifl›l Tur Travel Agency is taking a more active approach towards incoming
tour operations. As part of its medium to long-term strategy, Ifl›ltur will establish
associate agencies in Germany, France, Russia and Scandinavian countries either
through direct investments or partnerships and joint ventures.
Through its close relationships with international intermediaries based on its timelines
and reliability, Do¤an Air organizes flights to countless destinations across the world
including Australia and the United States while providing superior comfort and highly
reliable technological safety for its customers.
The Istanbul based company keeps and maintains its air craft in a hangar at Atatürk
Airport. Do¤an Air further plans to expand its fleet with new aircraft purchases based
on the changing needs of its customers and regional requirements.
The Company’s revenues reached US$ 3 million in 2004 for 581 flight hours, 38%
of which were flown for inter-company and 62% for extra-company services.
All Milta holiday villages and marinas participate in the Foundation for Environmental
Education (FEE) program and have been awarded the Blue Flag, an eco-label presented
to beaches and marinas that practice good environmental management.
Milta has upgraded its IT infrastructure its facilities and management with state-ofthe-art technology in various areas, including marine technology, boat handling,
digital TV and music distribution in hotel rooms, on-line booking systems, car pool
surveillance systems and advanced telephony communications systems.
Staffing
Milta has a staff of 397, made up of permanent and seasonal employees. University
and equivalent school graduates make up 16% of the total workforce.
Milta’s vision in human resources essentially focuses on the importance of understanding
and merging company, management and employee needs to increase efficiency,
productivity and profitability.
Corporate Governance
Milta is committed to becoming a workplace of choice, with strict policies of integrity
and ethics. Everyone at Milta is required to carry out their duties in accordance with
policies set forth in relevant company policy directives and must conform to all
applicable laws and regulations.
The corporate governance principles outline the broad aspects of legal and ethical
business conduct under which Milta operates. Every person who works for the Company,
its affiliates, or subsidiaries is expected to understand and comply with the provisions
of these principles.
NET SALES (US$)
YEARS
HEAD OFFICE*
IfiILTUR TRAVEL AGENCY
M‹LTA MARINA CLUB
M‹LTA BODRUM
TOTAL
2003
2,063,916
6,739,132
4,767,591
3,694,954
17,265,593
2004
2,452,571
12,070,415
5,351,755
4,592,334
24,467,075
16
44
11
20
29
CHANGE (%)
05
MEDIA
Do¤an Yay›n Holding (DYH) is Turkey’s leading
media and entertainment conglomerate. It operates in
TV and radio broadcasting and print and online media.
DYH is uniquely positioned in the Turkish media industry
to inform and entertain as well as connect people in
innovative ways that enrich their lives.
55
05
MEDIA
DO⁄AN YAYIN HOLDING AND ITS PARTICIPATIONS
DO⁄AN FAMILY
2.40%
THE AYDIN DO⁄AN FOUNDATION
0.71%
FREE FLOAT
TOTAL
56
66.80%
30.06%
100.00%
The business model adopted by DYH foresees two main divisions
within the Holding to better accommodate its ever-expanding
and diversifying activities: content producers and service
providers.
DO⁄AN YAYIN HOLDING AND ITS PARTICIPATIONS
Magazines Addressing Diverse Topics
Do¤an Yay›n Holding (DYH) is Turkey’s leading media and entertainment conglomerate.
It operates in TV and radio broadcasting and print and online media. DYH is uniquely
positioned in the Turkish media industry to inform and entertain as well as connect
people in innovative ways that enrich their lives.
Publishing a total of 23 magazines, Do¤an Burda Rizzoli (DBR) is also engaged in
import and distribution of some of the world’s leading newspapers and periodicals.
DBR represents another international partnership for DYH, with Burda of Germany
and Rizzoli of Italy. Both are among the leading media companies in Europe.
Do¤an Yay›n Holding, Hürriyet, Milliyet and Do¤an Burda Rizzoli stocks are publicly
traded on the Istanbul Stock Exchange.
Bestsellers
A Unique Business Model
With a global and national outlook, Do¤an Books publishes about 20% of the bestselling titles in Turkey. A joint venture between DYH and Egmont of Denmark, Do¤an
Egmont Publications is the leading publisher of books for children and young teens.
The business model adopted by DYH foresees two main divisions within the Holding
to better accommodate its ever-expanding and diversifying activities: content producers
and service providers.
International Reach in Music
DYH’s content producers include its newspapers, magazines, book publishers, TV
channels, radio stations and music company. Service providers include distribution,
retail, production, cable TV, Internet, printing and advertising sales companies as
well as a factoring company.
Do¤an Music Company has a licensing agreement with Bertelsmann Music International
Service GmbH, a subsidiary of one of the world’s largest media conglomerates,
Bertelsmann AG. With the support of BMG, Do¤an Music has been able to enter the
international music industry while introducing its own artists globally.
Quality in Printing and Unmatched Distribution Capability
Convergence and Synergy
Operating under the guiding principle of convergence, significant synergies result
between DYH’s companies. Many of the Holding’s businesses are leaders in their
respective sectors and markets. Do¤an Yay›n Holding, Hürriyet, Milliyet and Do¤an
Burda Rizzoli are all publicly traded entities.
Newspaper Publishing-The Core Business Activity
Newspaper publishing has traditionally been the core business activity of DYH. Eight
newspapers including Hürriyet, Milliyet, Radikal, Posta, Fanatik, Referans and Gözcü
and more recently the Turkish Daily News - the country’s premier English-language
newspaper - form the backbone of DYH’s print media business.
DYH has a key market position in the distribution of print media in Turkey due to
the size, reach and efficiency of Yaysat. Do¤an Ofset is an internationally competitive
printing company offering high standards of print and quality service.
The Internet - Around the World in an Instant
As Turkey’s largest content producer, DYH prioritizes investments in Internet and
cable TV that enhance, integrate and expand upon its existing activities. The Holding
is planning to achieve even more widespread synergy among its units, in terms of
coupling content and connection. DYH has assembled a broad spectrum of portals
within Do¤an Online, Turkey’s largest Internet company.
Retailing Books and Music
Top Rated TV Channels
Kanal D ranks among the top television channels in Turkey. CNN TÜRK, another TV
channel under the DYH umbrella, is a joint venture between DYH and Time Warner.
CNN TÜRK is the only national CNN-affiliated local language 24-hour news channel
controlled and operated outside of Atlanta, Georgia.
The D&R Music and Bookstore chain utilizes a range of sales channels - from shops
in prime locations to the D&R virtual store on the Internet – to reach consumers.
05
MEDIA
NEWSPAPERS
With an average daily circulation of 4.1 million, Turkey’s newspapers continue to be
a sought after venue by advertisers. With eight daily papers, Do¤an Yay›n Holding
commands a 40% market share of circulation in Turkish newspaper media.
HÜRR‹YET
Field of Activity
Turkey’s long-time top selling newspaper Hürriyet is also one of the top selling nonEuropean newspapers in Europe.
Highlights
For more than 50 years, the name Hürriyet has been synonymous
with freedom of speech and objectivity in journalism. True to
this reputation, Hürriyet has assembled a distinguished group
of journalists, editors and columnists with diverse opinions and
perspectives covering a wide range of political views.
•
•
•
•
•
•
Turkey’s number one newspaper
More than 50 years of market presence
A distinguished group of writers with diverse opinions and perspectives
40% market share in total newspaper advertising revenue
Strong financial position
One of the few companies outside the financial sector to receive regular credit
ratings
• A leader in electronic publishing
• The first company to publish its corporate governance principles and legally change
its bylaws
History and Market Position
For more than 50 years, the name Hürriyet has been synonymous with freedom of
speech and objectivity in journalism. True to this reputation, Hürriyet has assembled
a distinguished group of journalists, editors and columnists with diverse opinions and
perspectives covering a wide range of political views. The newspaper’s high quality
content has made it Turkey’s most widely read daily paper. Reflecting the highest of
Turkey’s democratic and social ideals, Hürriyet is the readers’ first choice for its
editorials, clear and concise coverage of politics, the economy, business, sports,
entertainment and the arts.
Hürriyet’s primary goal is to maintain its policy of fair, unbiased and independent
coverage of current local and global affairs. With a reputation for superior standards
in journalism coupled with current, accurate and objective reporting, Hürriyet has
long been the primary reference guide for the nation’s influential opinion leaders and
decision-makers.
Hürriyet is Turkey’s first internationally recognized newspaper and continues to be the
best-known media company in the country. Hürriyet’s reputation extends beyond Turkey
it has one of the highest circulations among non-European newspapers in Europe.
Financial Assessment
Directed toward exceeding the expectations of its readers, Hürriyet provides a
compelling, highly effective and well-targeted medium for its advertisers. As a result,
Hürriyet maintains the strongest financial position of any newspaper in Turkey.
Hürriyet is the undisputed market leader in Turkey, with a 40% market share in terms
of total newspaper advertising revenue and a 12% market share in terms of total
circulation. Over 52% of Hürriyet readers are members of Turkey’s high-income
group, 70% of whom are regular readers; 68% of the readership have university or
post-graduate degrees. In 2004, Hürriyet commanded a 14.5% share of the total
advertising revenue in Turkey.
58
Hürriyet is one of the few companies outside the financial sector to receive a credit
rating from Fitch Ratings. Hürriyet is also highly regarded by the international
investment community: over 82% of the newspaper’s free float (33% of total shares)
on the ISE is controlled by international investors.
Efficiency gains achieved by the centralization of procurements, printing facilities
and distribution channels; application of standard accounting systems throughout
sister companies; and utilization of a centralized management information system
under the umbrella of DYH are expected to result in further improvements in the
Company’s profitability.
Readers have come to trust that Milliyet has a strong sense of social responsibility about
everything it does, not only in terms of journalism but also in its promotional campaigns.
Milliyet adheres strictly to its journalistic principles and high ethical standards.
In 2004, Hürriyet’s average daily circulation was 460,000; with regards to both daily
average net sales and advertising revenue, Hürriyet was the sector leader in Turkey.
Milliyet is part of the daily lives of its readers, publishing at least one supplement
for each day of the week:
In 2004, Hürriyet’s turnover was YTL 473 million, with a net profit of YTL 27 million
and a paid-in capital of YTL 416.7 million.
Comprehensive Supplements
Milliyet Business: Targets the business community with news and special in-depth
reports on a range of business topics and issues.
Leader in Electronic Publishing
In 2004, Hürriyet’s website (www.hurriyet.com.tr) was visited by an average of
230,000 online readers daily, making it one of Turkey’s most visited news portals.
Headlines are refreshed throughout the day, with its breaking news and market
information among the most visited areas of the site.
In a project completed during 2004, Hürriyet digitally scanned each and every one
of its past issues, starting with its first publication on 1 May 1948, to the present
day. During 2005, this archive will be made available on the Internet, enabling online
access and search of the news as reported by Hürriyet since its inception.
Milliyet Kariyerim: Developments in career planning, job search information, human
resources issues and related topics reach readers each Sunday.
Milliyet Ev: Information about and current trends in real estate and home life, design
and décor.
Milliyet Otomobil: Information about automobiles and motorcycles for automotive
aficionados.
Arabam.com: The resource of choice for those interested in previously owned
automobiles.
Milliyet Rehber: An entertainment and lifestyle guide featuring information on film,
music, dining, theater, concerts and other entertainment as well as a TV program guide.
Milliyet Cumartesi - Pazar: Weekend guide featuring a range of subjects including
fashion, travel, literature, the arts, interviews, puzzles and much more.
Milliyet Vitrin: The only weekly advertising supplement containing thousands of quality
classified ads and articles on every subject from real estate to vehicles, education to
employment.
Salsa: Weekly supplement which includes information about popular culture and
events targeting younger adult readers.
Miço: Offers educational entertainment for children.
Teknoça¤: The latest news about the hottest products and innovations from the world
of technology and mobile communications.
Milliyet Sanat: Furnishing information on culture and the arts since 1972.
M‹LL‹YET
Field of Activity
Milliyet is one of the four best-selling newspapers in Turkey, favored by well-educated
individuals and key opinion leaders from all fields.
Highlights
•
•
•
•
•
More than 50 years of market presence
The newspaper most often used as a reference and quoted by key opinion leaders
At least one supplement for every weekday
One of the four best-selling newspapers in Turkey
Most visited online news portal in the country
Founded in 1950, Milliyet is still the undisputed champion for “Reliability in the
Press.” It is the first and only newspaper in Turkey that was founded on international
principles of publishing incorporating high ethical standards. With its specialized
contributors and well-respected columnists, it has become a newspaper often referred
to and quoted by key opinion leaders in all fields.
Milliyet’s main objective is to retain the trust of readers as Turkey’s most reliable
daily source of news and culture and to maintain its high credibility in the eyes of its
readership with its high quality standards.
Milliyet’s 2004 annual revenue reached US$ 69 million. In 2004, Milliyet’s major
sources of revenue were from sales (30%) and advertising (70%).
Leading Online News Portal
In November 1996, Milliyet became the first newspaper in Turkey to launch its own
website (milliyet.com.tr). Today, the Milliyet site enjoys a daily average of 250,000
visitors and 5 million page views, making it Turkey’s most visited news site.
05
MEDIA
RAD‹KAL
Field of Activity
Radikal is a niche market newspaper targeting well-educated urban readers with a
current and intellectual editorial slant.
Highlights
Founded in 1996, Radikal, as its name suggests, brought new
• Fills a niche for innovative, independent and intellectual editorial commentary for
urban readers
• A market share of 1.8% in total newspaper sales
• An advertising share of 2% in total print media
• One of the most visited newspaper internet portals
ideas and concepts to the Turkish newspaper world. Along with
extensive coverage of the economy, foreign affairs and politics,
business, culture and the arts, the newspaper also features
articles by some of the country’s most respected academics.
Founded in 1996, Radikal, as its name suggests, brought new ideas and concepts to
the Turkish newspaper world. Along with extensive coverage of the economy, foreign
affairs and politics, business, culture and the arts, the newspaper also features articles
by some of the country’s most respected academics. Radikal closely follows current
global news and includes important editorials from around the world.
Radikal’s readers are young, well-educated, middle-to-high-income earners. The
newspaper’s primary objectives are to increase its market share of total newspaper
sales and help foster a more intellectual climate in Turkey.
In 2004, Radikal’s major sources of revenue were derived from advertising and sales,
contributing 66% and 34% respectively.
Online Presence
Radikal Online (www.radikal.com.tr) was launched in 1997 to reach a broader
audience. Today, Radikal’s website is one of the most frequently visited newspaper
sites in the country. The newspaper’s other portal, Sanal Alem, allows the user to
keep in touch with the latest developments in information technology.
POSTA
Field of Activity
The best-selling newspaper of its kind in Turkey, Posta is a mass market newspaper
appealing to both urban and rural readers, men and women. It has an a easy-to-read
style and is priced competitively to make it the choice of many readers.
Highlights
•
•
•
•
•
Most loyal readership
High circulation
Broad readership
Easy to read
Low price
In the past ten years, Posta has gained its own loyal readership and has become the
highest selling newspaper in the country. The newspaper emphasizes the human
dimension and uses a positive approach in its reporting. Posta addresses Turkey’s
urban and rural population and appeals equally to both men and women. Its readership
consists of middle to upper income wage earners. Posta is positioned to become one
of the best performing newspapers in the country in coming years.
60
In the past ten years, Posta has gained its own loyal readership
GÖZCÜ
and has become the highest selling newspaper in the country.
Field of Activity
The newspaper emphasizes the human dimension and uses a
Gözcü is one of Turkey’s highly successful mass-market newspapers concentrating on
brief news and human-interest articles at an affordable price.
positive approach in its reporting.
Highlights
• One of the country’s most successful mass-market newspapers
• Provides news briefs and human-interest features at a fairly low price
Providing easy-to-read news and human-interest articles at an affordable price, Gözcü
is one of the country’s most successful mass-market newspapers. Following its launch
in 1996, Gözcü has continued to provide accurate news from a popular perspective,
sharing in the joys and sorrows of its readers.
Gözcü targets a lower socio-economic segment in an effort to raise awareness of
current events within the general public. Parallel to this objective, Gözcü does not
deviate from its fully secular and objective perspective. It seeks to ensure that the
most important news stories of the day are brought to readers objectively and in a
straightforward manner.
REFERANS
Examining Posta’s major sources of revenue in 2004, 56% of the total was derived
from sales and 44% came from advertising. The newspaper’s primary financial
objective is to increase its share of the newspaper advertising market.
Referans is one of Turkey’s top two daily economic and finance newspapers.
Highlights
FANAT‹K
Field of Activity
• Successor to Finansal Forum
• Strong editorial leadership, eight years of experience in finance reporting
Fanatik is a pioneering sports-only newspaper with an emphasis on soccer.
History
Highlights
Referans is a daily newspaper devoted to economic, business and financial news. Every
day Referans provides its readers with objective and accurate reporting of local and
international developments in business, finance and the economy. Its mission is to
interpret European Union developments and to respond to the need for news and
information about this comprehensive change. Referans is considered to be the
successor to Finansal Forum, which was founded in 1996.
•
•
•
•
The first daily sports newspaper in the country
Loyal readership
Pioneering in high standards in sports media
Presence on the web
Founded in 1995, Fanatik was the first daily sports newspaper in the country. It was
not long after its debut that Fanatik gained a staunchly loyal readership among young
males. The newspaper is also widely read by Turkish expatriates.
One of two economic and financial dailies in Turkey, Referans enables its readers to
monitor global events and developments in Turkish, which accounts for the newspaper’s
success.
Target Audience
Fanatik brought high standards to the sports media. It is the only newspaper that has
earned an international fair play award with its “Fan-etik” (Fan-ethics) page.
Fanatik provides its readers with quality sports news with a focus on Turkey’s four major
soccer teams. The newspaper also appeals to the horse racing community with a daily
four-page supplement. Online readers can reach Fanatik via its website at www.fanatik.com.tr.
With its high quality daily reporting, Referans targets professionals, business executives,
upper level officers and academics - in essence today’s decision makers.
TURKISH DAILY NEWS
Field of Activity
The Turkish Daily News is one of Turkey’s two English language daily newspapers.
Fanatik’s major source of revenue in 2004 was derived from sales (83%) and
advertising (17%).
FANAT‹K BASKET
Launched in 1996, Fanatik Basket is a weekly newspaper highlighting Turkish and
foreign professional and amateur basketball teams. While satisfying the requirements
for comprehensive coverage of basketball news, Fanatik is also distinguished by its
superior visual design and the quality of its photography. While providing comprehensive
coverage of basketball news, Fanatik is also distinguished by its superior visual design
and the high quality of its photography.
Highlights
• Serves the expatriate community
• 60% of its readers are foreign nationals and 40% are highly educated Turkish
citizens
• Rich content in political, economic, social and cultural events
05
MEDIA
The Turkish Daily News has served as Turkey’s only English language daily since
March 1960. Turkish Daily News joined the DYH family in January 2001.
The Turkish Daily News is the leading source of local news for foreign nationals living
in Turkey. According to market studies, 80% of its highly educated Turkish readers
are university graduates.
Rich Content
The Turkish Daily News has undergone a renewal process in order to present its
readers with a more active and dynamic newspaper. The paper’s liberal approach has
earned international praise and respect. Meanwhile it has become the natural choice
for local and international news for foreign residents, as well as for highly educated
Turks.
The Turkish Daily News covers major political, economic, social and cultural events
while providing its readers with an extensive mix of local and international news. Its
exclusive stories, interviews and analyses on foreign policy issues have earned it the
reputation as the world’s window into Turkey.
Opinion columns from business leaders, academics, politicians and other high-level
officials help to round out the paper’s already rich content. Its sports section has
won much praise from leading sports writers of other major Turkish language
dailies.
The Turkish Daily News covers major political, economic, social
and cultural events while providing its readers with an extensive
mix of local and international news. Its exclusive stories,
interviews and analyses on foreign policy issues have earned it
Web Presence
Based in Ankara, The Turkish Daily News’ electronic edition (www.TurkishDailyNews.com.tr)
receives about 80,000 online visitors per day. Many make use of the paper’s archives on
the Internet for a fee. Work is ongoing to further develop the paper’s web site.
the reputation as the world’s window into Turkey.
BROADCASTING AND PRODUCTION
Television
Television is the primary source of entertainment for the majority of Turkish households.
In 2002 Turkey topped the global list with an average daily TV viewing rate of nearly
five hours (298 minutes) per adult. Research has shown that for 97% of Turkish
citizens, television is also their main source for news.
The Turkish Daily News covers major political, economic, social
and cultural events while providing its readers with an extensive
mix of local and international news. Its exclusive stories,
interviews and analyses on foreign policy issues have earned it
This is the result of the TV revolution experienced in Turkey in the early 1990s when
the state monopoly of Turkish airwaves came to an end, giving rise to the emergence
of private broadcasters. After little more than a decade, Turkish viewers today can
select from among five government-sponsored channels as well as 14 nationwide, 15
regional and 202 local privately owned television channels. Cable TV distribution
networks have become available in twenty major cities offering 44 to 60 channels,
while the satellite platform offers nearly 100 Turkish language channels.
the reputation as the world’s window into Turkey.
ATV, Show TV and Star are the nation’s most popular television channels along
with Kanal D under DYH management since 1995. These four television channels
capture 60% of the national audience every night and enjoy 72% of TV advertising
income.
In October 1999, DYH and Time Warner launched CNN TÜRK-the first joint venture
in the Turkish broadcasting industry.
In 2002 another DYH TV channel, Dream TV, a 24-hour music channel, established
itself in this new genre and became very popular with younger audiences- an important
strategic step in a country such as Turkey where nearly 50% of the population is
below 25 years of age.
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The quality and reputation of its news anchors and commentators
set Kanal D’s nightly news apart from the competition. Kanal
D draws from its own news team as well as from the resources
of Do¤an News Agency (Do¤an Haber Ajans›-DHA) for
comprehensive and analytical reporting.
DYH, as Turkey’s largest content provider, has taken important steps toward the
development of its new media business. The Group’s Internet branch, Do¤an Online,
aims to have the widest selection of portals - B2C, B2B and C2C - and become the
country’s largest ISP. As a Group, DYH is capable of achieving widespread
synergies, in terms of content and connection, between its Internet and digital
production units.
TV CHANNELS
KANAL D
Field of Activity
Kanal D is among Turkey’s top-rated TV channels for all day viewing, commanding
a 29% share of all TV advertising income for Turkey in 2004.
Highlights
•
•
•
•
Radio
Turkey currently has 365 national radio stations as well as hundreds more local radio
stations.
DYH is a leader in Turkey’s developing radio sector with three different stations, each
targeting different segments of the population. With competition among the stations
increasing annually, DYH stations maintain their leading positions in the sector.
Thanks to the strong synergies created between DYH companies, each station has
achieved a respected place in its particular area. DYH radio stations further enrich
social and cultural life in Turkey by sponsoring and/or organizing a variety of art
festivals and charity fundraisers.
Turkey’s top channel for all-day viewing
The leader in TV advertising, capturing 29% of total television ad revenues
Received the “World Quality Commitment International Star” award in 2004
The first TV channel in Turkey to broadcast live over its website
Market Position
Kanal D reflects Turkey’s vision with its contemporary, innovative and creative
approach to TV broadcasting. This high performance has not only earned Kanal D
the most preferred TV channel status, but has also moved Kanal D forward in the
international arena.
With quality programs targeting a wide range of viewers, Kanal D has become one
of Turkey’s favorite channels. In 2004 with its meticulously prepared portfolio of
high quality new programs, locally produced series, a majority of first-run films from
Turkish and foreign cinema, game shows, entertainment and children’s shows, Kanal
D maintained its top viewer ratings in Turkey.
Production
DYH entered film production after obtaining the majority shares of ANS, a small
production company. This small company rapidly developed into a thriving business
that produced programs for DYH’s own channels as well as for other national
channels. ANS achieved unprecedented success with the feature length film production
of its popular television series Asmali Konak, breaking all previous box office
records.
Digital World
DYH prioritizes investments in business areas that build synergy with existing activities
and focuses directly on the customer. These naturally include the Internet and cable
television.
Turkish demographics show that nearly 50% of the population is less than 25 years
of age. This makes them potential Internet users. Seeing this as an opportunity for
growth, many large Turkish corporations expanded into the ISP business in 1999 and
2000. Today, these same companies constitute the majority of the nearly 45 Internet
service providers currently operating in the country.
In terms of e-commerce, Internet banking is by far the most popular application. Per
capita e-commerce spending was approximately US$ 110 at the end of 2003 with
online advertising totaling approximately US$ 5 million for the same period.
Cable television offers the opportunity for both Internet connection and digital television
at the same time. Although some cable providers offer limited Internet services, both
the cost of cable modems and their usage fees are currently quite high.
Kanal D’s success is reflected in its financial health as well. A leader in TV advertising,
in 2004 Kanal D captured 29% of Turkey’s total television ad revenues. This compares
favorably with the previous year’s share of 26%.
Wide Coverage in Broadcasting
Kanal D’s daytime programming is designed for homemakers and children, offering
them a variety of Turkish films, soap operas, cartoons and live music performances.
Foreign films complement news programs and locally produced television series. Its
emphasis on locally produced programs has created high viewer ratings and a loyal
audience.
Prime time news bulletins and extended news programs, investigative reporting and
“Meet the Press” type panel discussions, along with game shows like “Vault” and
“Pop Idol” have further increased Kanal D’s strong position.
The quality and reputation of its news anchors and commentators set Kanal D’s nightly
news apart from the competition. Kanal D draws from its own news team as well as
from the resources of Do¤an News Agency (Do¤an Haber Ajans›-DHA) for comprehensive
and analytical reporting.
On weekends and holidays, Kanal D presents family entertainment featuring popular
foreign TV series, Turkish and foreign movies, sports and musical programs.
Extensive sports coverage and popular entertainment programming also puts
Kanal D in the lead.
05
MEDIA
International Recognition
In 2000, Kanal D was chosen from among 150 channels broadcasting over Eutelsat to
receive the International Hot Bird Award. Kanal D, together with BBC Prime, was
named the most successful channel of the year for the quality and content of its broadcasts.
In May 2003, Kanal D was awarded by BID (Business Initiative Directions) in Geneva
for the success of the QC 100 Total Quality management models it has implemented.
In 2004, Kanal D’s success in the international arena was once again recognized with
the achievement of the “World Quality Commitment International Star” award.
Emphasis on Technology
In 2000, Kanal D was given the International Hot Bird Award
from among 150 channels broadcasting over Eutelsat. Kanal D,
together with BBC Prime, was named the most successful
channel of the year for the quality and content of its broadcasts.
Kanal D is the first TV channel in Turkey to transmit live broadcasts over its website
(www.kanald.com.tr).
In 2003, Kanal D moved to its new Headquarters, shared with CNN TÜRK and ANS
Production, generating synergy in technology that will reduce in-house production
costs while facilitating better quality broadcasts. Investments currently underway in
digital archiving and IT network upgrades will save time and money and further
increase work efficiency in the near future.
CNN TÜRK
Field of Activity
CNN TÜRK is a 24-hour news channel and Turkey’s first and only television channel
to have an international media partner.
Highlights
• The only national CNN-branded local language 24-hour news channel controlled
and operated outside Atlanta
• Turkey’s first and only television channel to have an international media partner
• The leading news channel in Turkey
• High technical outreach and reliability
• A 5% share of the TV advertising market
• Shares facilities with other DYH television channels, creating synergy between
similar operations
CNN TÜRK, established in 1999, is a joint venture between DYH and Time Warner.
It is the only national CNN-branded local language 24 hour news channel controlled
and operated outside Atlanta. It is Turkey’s first and only television channel to have
an international media partner.
Optimizing on both local resources from DYH and the extensive news gathering ability
of the world’s news leader CNN, CNN TÜRK has brought a new dimension to national
news programming. In addition to international news coverage, CNN TÜRK provides
reliable, objective, credible, up-to-the-minute local news and information through
programs produced by experienced and well-trained Turkish professionals.
CNN TÜRK maintains its unparalleled reputation in covering breaking news 24 hours
a day, seven days a week, through the resources of its new headquarters at Istanbul
Do¤an TV Center, its Ankara bureau, and with the support of reporters in Athens,
Berlin, Brussels, Paris, Rome, London, Nicosia, Moscow, New York and Washington.
New Markets, New Distribution Channels
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Equipped with the latest technology and distributed via both land and cable and by
satellite, CNN TÜRK reaches a potential audience of over 40 million across Turkey.
In October 2004, CNN TÜRK began to broadcast in the Netherlands, its first venture
outside Turkey, making it the country’s primary source of news for the Turkish
community in the Netherlands.
Considered as a model by its partners for new business ventures,
News Bulletins
CNN TÜRK has developed and grown despite national and global
celebration of its fifth year of operation, CNN TÜRK continues
CNN TÜRK’s trademark news bulletins are broadcast on the half-hour, 24 hours a
day. Through extensive local news gathering resources and its access to CNN’s 42
bureaus and more than 900 affiliates worldwide, CNN TÜRK offers up-to-the-minute,
in-depth news coverage utilizing contemporary broadcasting technology.
to move forward in achieving its goal of innovation.
Financial News
crises. Proving its success in television news broadcasting in
Financial news is a key component of CNN TÜRK’s programming. The financial news
content of CNN TÜRK is comprised of coverage of local and international business,
financial markets and daily economic developments from an objective global perspective.
Sports News
Sports news is broadcast every hour featuring the latest highlights, game results and
news from the local and international sports arenas.
Weather Reports
One of the essential components of CNN TÜRK broadcasting, its weather reports
provide both national and international forecasts. Every half hour, a network of local
and international weather forecasting stations provide data for weather reports that
are broadcast using state-of-the-art 3-D animation.
One of CNN TÜRK’s long-standing goals has been to reach Turkic-speaking audiences
in Central Asian and other European countries through operators of cable networks.
The US has shown considerable interest in receiving Turkish language broadcasts
from CNN TÜRK as well. CNN TÜRK’s investment along these lines in the Netherlands
is only the first step in the achievement of this goal of ever expanding distribution.
CNN TÜRK News Group brought CNN TÜRK Radio into being in July 2003. Broadcasting
from Istanbul on the FM frequency 92.5, CNN TÜRK Radio provides its audience with
reliable, credible, objective and up-to-the-minute 24-hour news coverage.
Considered as a model by its partners for new business ventures, CNN TÜRK has
developed and grown despite national and global crises. Proving its success in television
news broadcasting in celebration of its fifth year of operation, CNN TÜRK continues
to move forward in achieving its goal of innovation. CNN TÜRK Mobile and CNN TÜRK
Inflight were inaugurated last spring, and cnnturk.com was introduced in May 2004.
Programs
CNN TÜRK offers feature programming that complements its news content. Talk
shows and feature programs that bring the most popular issues in Turkey and the
world to the discussion table are hosted by widely recognized and trusted professionals.
A series of informative programs offer viewers information and news on a variety of
topics ranging from fashion to technology.
Documentaries
Documentary programming reflects a major strength of CNN TÜRK. These documentaries
cover a wide range of national or international issues from Iraq to Israel, Chechnya
to Afghanistan, Syria to Korea. Documentaries are most often produced in-house or
by leading Turkish journalists who are experts in the area of documentaries.
Financial Strengths
CNN TÜRK Inflight enables its audience to follow the news on international flights.
Thanks to this groundbreaking agreement between Turkish Airlines and a Turkish
news channel, news from both CNN TÜRK and CNN International get to be broadcast
on flights abroad.
In March 2004, CNN TURK Mobile inaugurated a voice news portal that enables
cellular telephone users to hear the latest developments. Breaking news is also
announced to subscribers by SMS messages.
CNN TÜRK News Group’s latest step forward was taken in May 2004 with a joint
venture that resulted in cnnturk.com. A site for all speakers of Turkish, cnnturk.com
offers news on a range of subjects including politics, finance, sports, fashion, technology
and the arts by means of feature folders along with up-to-the-minute coverage of
breaking news.
Content Rich News Programs
As a result of the quality, high technical outreach and reliability it has maintained
in the fifth year of its operations, CNN TÜRK attracts the most important national
and international advertisers. Despite global and domestic crises like the ‹zmit
earthquake and successive economic crises in Turkey, the September 11th terrorist
attacks and the war in Iraq, CNN TÜRK was able to keep moving forward. Today,
CNN TÜRK holds a 5% share of the TV advertising market.
In 2003, CNN TÜRK moved its studios and offices to a new state-of-the-art television
center where facilities are shared with other DYH television channels, creating a synergy
between similar operations to further improve its efficiency and financial strength.
EURO D
Euro D began broadcasting in Germany in 1996 providing Turkish expatriates with
a chance to keep in touch with events in Turkey. Through Euro D, Turkish communities
in Europe are able to access the latest in news, cultural and social affairs in their
adoptive country.
CNN TÜRK has gained a worldwide reputation for its coverage of national and global
events. With a strong sense of social responsibility that prevails in its programming,
CNN TÜRK also prepares special feature programs in partnership with non-governmental
organizations.
Germany’s official media research organization, Gesellschaft für
Kommunikationsforschung, named Euro D the best rated privately owned TV channel
for Turkish viewers.
In addition to twice hourly news bulletins plus financial news and sports programming,
CNN TÜRK also caters to a variety of interests from fashion, history, literature, arts
and culture to the latest trends in technology, music and movies.
The channel, highly regarded by Turks outside their home country, reaches the entire
continent through its Türksat link and broadcasts via major cable operators in Europe,
North America and Australasia.
05
MEDIA
CABLE TV CHANNELS
FENERBAHÇE TV
The Fenerbahçe Sports Club has leased Fenerbahçe TV from DYH, with technical
support provided by the DYH broadcast network. Fenerbahçe TV broadcasts via the
national cable network and the Türksat 2A satellite, and will go digital in the near
future.
BEfi‹KTAfi TV
supports the Ministry of Education in its book campaigns, the
Newly founded by the Befliktafl Sports Club, the channel is leased from DYH with
technical support provided by the DYH broadcast network. Befliktafl TV broadcasts
via the digital platform and Türksat 2A satellite, and is expected to move to national
cable distribution in the near future.
TEMA Foundation with its plant-a-tree campaigns as well as
DREAM TV
In keeping with its mission to be socially responsible, Radyo D
numerous other social and charitable events organized by aid
organizations.
Hosted by popular VJs, Dream TV presents music programming with the latest video
clips and concerts of local and internationally renowned musicians as well as feature
programs from the worlds of theatre, cinema, fashion and technology. Dream TV
attracts the attention of advertisers with its ‘dare to be different’ approach and its
distinctive audience.
RADIO STATIONS
RADYO D
Radyo D was established in 1993 to broadcast from a digital platform at world-class
standards. It was one of the first radio stations in Turkey to obtain a national
broadcasting license. Radyo D ranks first among its peers with quality programming
concentrating on Turkish pop music, news and commentaries. Radyo D has attracted
an audience from diverse demographic groups and has captured a 14% share of radio
advertising in the country.
Radyo D broadcasts nationally from a total of 63 centers, reaching listeners across
the country. Listeners can also tune in digitally via satellite from across the entire
country. Radyo D utilizes cutting edge digital broadcasting technology and the world’s
most advanced automation systems
In keeping with its mission to be socially responsible, Radyo D supports the Ministry
of Education in its book campaigns, the TEMA Foundation with its plant-a-tree
campaigns as well as numerous other social and charitable events organized by aid
organizations.
RADYO FOREKS
Radyo Foreks, broadcasting on a digital platform, was Turkey’s first news radio
station. It went on the air in 1993, and until 1999, worked in partnership with
the BBC. In 2001, Radio Foreks joined forces with Deutsche Welle, with added
credibility of its news broadcasts. The station plays foreign music between its 63
daily news programs that highlight the latest financial and economic developments.
As the first news radio station in Turkey, Radyo Foreks is an indispensable source
of continuous information for businessmen across the country. Radyo Foreks
broadcasts out of Istanbul and Ankara but can be accessed from the entire
European continent and the Turkic Republics in Central Asia via the Türksat 1C
satellite and the Internet.
66
Radio Foreks has received numerous awards and has made significant cultural
and social contributions through its support of the arts, culture and science.
Embarking on its adventure with a creative and dynamic vision,
an infrastructure of the highest technical standards and an
The vision of ANS Production is to reach a larger audience through the creation of
original content. ANS’s mission is to maintain its leadership and pioneering position
and create content that will give it a definitive competitive edge in both domestic and
global markets.
innovative and forward-thinking staff, ANS is raising the bar
and the quality of Turkish television viewing.
To achieve these goals, ANS Production plans to:
•
•
•
•
•
Increase creativity
Deliver to a larger audience via different distribution channels
Produce Turkish movies for global markets
Play a leading role in film distribution directed toward domestic and global markets
Penetrate global markets by forming joint partnerships for film and series productions
with Russian, Greek and other European firms
Market Position
CNN TÜRK RADIO
CNN TÜRK Radio is the audio broadcasting organization founded by the joint venture
of Do¤an Medya Grubu and Time Warner. CNN TÜRK Radio reaches listeners 24
hours a day with credible, reliable and objective news reporting.
CNN TÜRK Radio presents its listeners with a wide array of programming that
includes up-to-the-minute news reporting, special feature programs with Turkey’s
most experienced journalists, expert guests commenting on news developments,
weather and traffic reports, along with coverage of fashion, culture and the arts,
ANS Production is a market leader in almost all its segments which include TV
programs, drama, entertainment shows, commercials, films and music clips as well
as film trading and post-production activities. In the past 12 years, ANS has produced
over 5,500 hours of miscellaneous content, a level that no other production company
in Turkey has even approached. In the same period, it produced more than 1,800
commercials and 100 large-budget films.
ANS Production intends to strengthen its position in the commercial production
market and become one of the leading players with regard to supplying and distributing
foreign films over the next three years.
In the second half of 2004, alongside the successful commercials it produces within
the DYH Group, ANS International began to extend its advertising services beyond
the Company and successfully completed its first project with a commercial for Boyner
Holding. Its goal for 2005 is to significantly increase the proportion of work produced
for customers outside the DYH Group.
technology, health, music and cinema.
PRODUCTION
ANS PRODUCTION
Field of Activity
ANS Production is a provider of visual content and video projects. It has recently
entered into movie production and plans to expand through international
The Company also plans to lead in film production in terms of the number of films
produced, sales revenue and the number of viewers. ANS also plans to co-produce a
number of films each year in association with foreign producers and venture into
merchandising, sponsorships and product.
Distributing both in-house and third party productions, ANS currently licenses or
represents materials from Dreamworks, Myriad Films, Content Films, Senator Films,
LionsGate Films, Overseas aka: First Look Media, Icon Ent, Brooklyn Films, Capitol
Films and Hanway Films.
collaborations.
Highlights
Embarking on its adventure with a creative and dynamic vision, an infrastructure of
the highest technical standards and an innovative and forward-thinking staff, ANS
is raising the bar and the quality of Turkish television viewing.
• Experience and competence in developing new concepts
• Adaptability and flexibility
DIGITAL MEDIA
• Ability to create advantages and cost savings by utilizing resources that maximize
performance
• Dynamism and superb IT infrastructure
DYH prioritizes investments in business areas that create synergy with existing
activities and focus on the customer. These areas include the Internet and cable
television.
• A competent staff with a full range of state-of-the-art equipment
• Synergy created with DYH
• Strong financial and PR support from DYH
The beginnings of ANS Production go back to 1982 when two prominent producers,
Abdullah O¤uz and Burak Duruman, joined forces in New York. In 1992, these two
became partners and established ANS. In 1998, DYH acquired a 70% stake of ANS
Production.
The demographics of Turkey are such that more than 50% of the population is under
the age of 25, and thus potential ISP target users. Therefore it was not surprising
to see that many large Turkish corporations expanded into the ISP market in 1999
and 2000. They continue to constitute the majority of the nearly 45 ISPs currently
operating in the country.
While media players have immediately established portals, large corporations plan
to be active in e-commerce and ISP markets. DYH saw the Internet as an alternative
media opportunity and established Do¤an Online (DOL) in 1999.
05
MEDIA
DO⁄AN ONLINE
Field of Activity
Do¤an Online is one of Turkey’s foremost Internet service providers with extensive
operations in e-business solutions, digital content and telecommunication services for
both individuals and corporate customers.
Since its inception, Do¤an Online has contributed significantly to Turkey’s rapid
transition into the Internet age by following the latest global technological developments
and introducing the most recent applications to Turkish Internet users. In this respect,
the Company is continuing to provide an excellent Internet access infrastructure as
well as value-added content services. Do¤an Online is Turkey’s second largest Internet
service provider.
Do¤an Online serves a large clientele with Internet access, e-trade, content provision
and advertising services. The Company plans to diversify into media-related and
entertainment services, also becoming a key player in these sectors.
Highlights
•
•
•
•
•
•
•
•
Strong brand recognition
Rich content and variety of sub-brands
Powerful distribution network
Stable pricing policy
Part of Turkey’s largest media group
Effective customer support and after-sales services
21% of the ISP subscription market
Unique products and services:
• Turkey’s first personalized browser
• Twice as fast Internet access
DO⁄AN YAYIN HOLD‹NG A.fi.
60%
INDIVIDUAL SHAREHOLDERS
40%
TOTAL
100%
History
Do¤an Online serves a large clientele with Internet access,
e-trade, content provision and advertising services. The Company
plans to diversify into media-related and entertainment services,
also becoming a key player in these sectors.
Established in 1999, Do¤an ‹letiflim Telekomünikasyon Elektronik Servis Hizmetleri
Turizm ve Yay›nc›l›k A.fi. (Do¤an Online) is currently one of Turkey’s two leading
ISPs providing digital content, e-business solutions and telecommunication
services to both individuals and corporate customers. The Company delivers its
services with the latest cutting-edge technology and at the highest global quality
standards.
Do¤an Online aims to be Turkey’s leading Internet access, content provider and ebusiness company.
Its mission is to provide value-added digital products and services to individuals to
make their lives easier and richer.
To achieve its vision and mission, Do¤an Online plans to help raise Internet usage and
to provide Internet users with easy, functional and value-added products.
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Simultaneously, the Company aims further expansion in markets where it is already
the leader and maintains its position while increasing its market share.
DOL has more than 200,000 individual subscribers and controls
Staffing
21% of the dial-up market. As opposed to other ISPs affected
Do¤an Online employs a qualified staff of 340, with a median age of 26 years.
adversely by Turk Telekom’s aggressive sales strategy, the
number of DOL subscribers continued to increase in 2004.
Do¤an Online offers its employees a rewarding career. It promotes creative and flexible
thinking, teamwork and continuous personal and professional development.
Do¤an Online will continue seeking strategic alliances on a global scale to enhance
and expand the scope and quality of its services.
Do¤an Online will increase its presence in ICT (Information Technology, Content and
Telecommunications) taking advantage of the latest developments in Internet technologies.
To achieve this, the Company will increase the number of its dial-up customers, develop
new content on various platforms, use its infrastructure more effectively in telecom
operations and expand its market for e-business opportunities. This expansion into new
areas of business notwithstanding, Do¤an Online pledges not to compromise on quality
and customer satisfaction that are synonymous with its current success.
In its quest to achieve the highest quality standards, the Company is currently working
toward the ISO 9001-2000 Quality Management Certificate.
Market Position
DOL has more than 200,000 individual subscribers and controls 21% of the dial-up
market. As opposed to other ISPs affected adversely by Turk Telekom’s aggressive sales
strategy, the number of DOL subscribers continued to increase in 2004. The increase
in new subscribers was 45% higher than the level of 2003, while the number of visitors
rose by 25% to 2 million daily, generating more than 350 million page views per month.
Combined with e-commerce and advertising sales revenue, DOL’s corporate ISP
services and corporate portal solutions have made a significant contribution to the
Company’s overall profitability.
DOL’s individual access and portal brand e-kolay.net is measured periodically.
According to the results of the latest research, e-kolay.net’s brand awareness and
preferred status have increased considerably.
Already an industry leader in ISP services and content, DOL launched a first for
Turkey in 2003 - a personalized browser for its subscribers. Soon afterwards, a new
service that allowed users to access the Internet at least two times faster than regular
dial-up connections was launched - the “Twice as Fast Internet Program” – and this
service gave e-kolay.net an important competitive advantage. In 2004 DOL continued
to fulfill its mission of innovation and creativity by presenting another first in Turkey
- the “e-kolay.net Security Packet” - for the use of individual subscribers.
Turkish Internet users visit DOL portals frequently due to the high quality and diverse
topics and services they offer. Specifically, bigpara.com for individual investors,
fanatik for soccer fanatics, arabam.com for second-hand automobile sales and
hepsiburada.com for online shopping are among the most visited DOL portals.
In June 2004, Turkey’s first online marketplace, pazaryerim.com, was launched by
DOL. The market leader in online shopping is hepsiburada.com, which has a 40%
share of Turkey’s e-commerce market.
Apart from advertising revenue from portals in the DOL domain, DYH newspapers
and magazines have Internet sites whose advertising sales have been realized by
Medyanet, which has Turkey’s highest page display capacity as an Internet sales
network. Medyanet performs advertising sales and marketing for its 38 portals, and
has a market share of almost 40%.
With the experience gained as an Internet service provider to corporate and individual
customers, e-kolay.net has become Turkey’s leading provider of service and content,
and has transferred this expertise to sound and data communication services in the
field of telecommunications. DOL’s e-kolay.net obtained an A Group license to operate
as a Long Distance Telephone Service provider and has begun operations.
In addition to its individual and corporate ISP business and large content provider
services, e-commerce and advertising sales, DOL is prepared to make investments in
broad-band technology as soon as Turk Telekom undergoes privatization in 2005,
further strengthening its market leader position.
ULTRA CABLE TV
Field of Activity
Ultra Cable TV is one Turkey’s six cable operators providing cable television and
high-speed Internet access services directly to homes and businesses.
Highlights
• One of six cable operators in Turkey
• An equal share joint venture between Do¤an and Koç Holding companies
• Provides cable television and high-speed Internet access services directly to homes
and businesses
• Over 200,000 subscribers
Ultra Cable TV, one of the six cable operators in Turkey, was founded in 1997 as a
joint venture between Do¤an, Siemens and Koç Holdings. Currently, the Company is
a 50/50 joint venture between Do¤an and Koç Holding companies.
The Company’s mission is to invest in, implement and operate cable TV systems on
cutting-edge technology to provide value-added services including telephone, Internet,
data, digital TV and other interactive services over cable systems as well as to become
a multiple system operator (MSO). Ultra Cable TV constructs cable infrastructure
and provides cable television and high-speed Internet access services directly to homes
and businesses via broadband hybrid fiber coax (HFC) networks.
Market Position
In 1997, Türk Telekom out-sourced cable TV services in 21 provinces on a revenuesharing basis. Ultra Cable TV won tenders for 11 provinces providing 55 Turkish and
foreign TV channels. In 1998, Türk Telekom transferred all its obligations regarding
infrastructure modernization, capacity increase and maintenance for nine metropolitan
areas to the six cable TV operators on a revenue-sharing basis. Today, Ultra Cable TV
operates in the highly populated Anatolian part of Istanbul. Ultra Cable TV has over
219,000 subscribers out of a total of over 436,000 potential customers in the region.
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MEDIA
HÜRR‹YET INTERNET
Field of Activity
Hürriyet Internet is a news portal operator and has the backing of Turkey’s leading
newspaper, Hürriyet, with regard to content provision.
Highlights
Today, with almost 1.8 million visitors per month and
approximately 60 million searchable pages in the database,
hurriyetim.com.tr is the number one Turkish language electronic
publishing medium in both Europe and Turkey. It is the first
reference point for up-to-date current events from Turkey and
• Operator of the hurriyetim.com.tr news and yenibir.com.tr HR portals
• Leader in the Internet news business since its inception in 1997, in terms of number
of visitors and revenue
• Holds a 20% market share in the Online Human Resources market
• Competitive advantage as an Internet news portal gained through entering the
market early in 1997
• Seven years of Internet journalism experience
• Strong brand recognition as an extension of the Hürriyet newspaper which has 56
years of brand value
• A strong team of reporters and news resources
around the world.
Established in January 1997, Hürriyet Internet (hurriyetim.com.tr) was one of the
first online newspapers in Turkey. During this time, it evolved from being the
Internet version of Hürriyet newspaper to a news portal operating continuously on
a 24-hour basis as of October 2000. In January 2001, hurriyetim.com.tr became
part of an independent company, Hürriyet Internet Hizmetleri ve Tic. A.fi. However,
the Internet version of the Hürriyet newspaper can still be reached through
hurriyetim.com.tr.
Today, with almost 1.8 million visitors per month and approximately 60 million
searchable pages in the database, hurriyetim.com.tr is the number one Turkish language
electronic publishing medium in both Europe and Turkey. It is the first reference point
for up-to-date current events from Turkey and around the world.
IT Investments
The Company has successfully invested in state-of-the-art technology to:
• Update and upgrade programs used in Internet publishing
• Enhance its hardware in view of performance needs
• Develop progressive applications that use cutting edge technology
The primary aim of Hürriyet Internet is to deliver the latest news developments in
Turkey and the world to readers instantly, 24 hours a day, seven days a week.
With this vision, the Company aims to:
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Maintain and strengthen its leadership position among news portals
Carry the strong aspects of Hürriyet newspaper to the Internet
Gain the largest share in the Internet advertising market
Activate the subscription system by increasing personalization and ensuring more
interactivity
• Become the main news portal of Europe first, then on a global scale, by forming
stable partnerships
Staffing
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Hürriyet Internet employs a highly qualified staff of 30 with an equal male to female
ratio; average age is 31 years. The majority of its staff possesses university and postgraduate degrees. The remaining are graduates of technical or regular high schools.
DBR is the undisputed market leader in both circulation and
Vision and Mission
advertising. In June 2004, with the successful launching of
Capitalizing on its market position, DBR’s vision is to maintain and enhance its
leadership in magazine publishing and increase its influence. In addition DBR strives
to strengthen its current portfolio of magazines while developing new profit centers
clustered around its core competencies.
Hello! the Company has further strengthened its leadership
position.
Strategic Alliances
Burda Medien Group has shares and investments in various enterprises, primarily in
France, Italy, the Far East and Eastern Europe. Burda Medien mainly engages in
magazine publishing, and is one of the foremost media companies in Germany.
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To renew the hurriyetim.com.tr content administration infrastructure in 2004
To create a more easily accessible content
To develop and implement groundbreaking, creative Internet publishing methods
To develop interactive tools and increase their usage
MAGAZINES AND BOOKS
DO⁄AN BURDA RIZZOLI
Field of Activity
Do¤an Burda Rizzoli is Turkey’s foremost magazine publisher with strong international
partners and strategic alliances. Many of its magazines are market leaders in terms
of circulation and advertisement revenue.
An importer and distributor of numerous international magazines in Turkey, DBR is
currently looking into opportunities to grant licenses to overseas publishers for selected
DBR magazines.
Market Position
DBR currently produces a total of 22 magazines, of which five are published weekly
while the remainder are monthlies. These magazines cover a range of categories that
include youth, women and fashion, news, special interests, the economy, information
technology, interior decoration, travel and geography.
DBR is the undisputed market leader in both circulation and advertising. In June
2004, with the successful launching of Hello! the Company has further strengthened
its leadership position.
In terms of circulation, DBR magazines have captured 36% of the market, while its
advertising revenue comprises 43%.
Highlights
• Publishes 22 magazines, eight of which are published under foreign titles through
licensing agreements
• Strong international partners and strategic alliances
• Market leader in magazine advertising
• The leading importer of foreign magazines
History
Do¤an Burda Rizzoli Dergi Yay›nc›l›k ve Pazarlama A.fi. (DBR) was initially established
in 1988 under the Hürgüç name. In 1998, it became a joint venture between DYH
and Burda RCS International Holding GmbH, composed of the German Burda GmbH
and the Italian Rizzoli Corriera della Sera.
The following year, it purchased AD Yay›nc›l›k A.fi. Following a name change to its
present designation in March 2000, the Company went public and became listed on
the Istanbul Stock Exchange. In July 2004 Burda Group purchased the shares of the
RCS Group.
DBR currently publishes 22 magazines, eight of which are foreign titles through
licensing agreements. They cover a range of categories that include youth, women,
news, special interests, the economy, information technology, interior decoration and
geography. Many of these publications are market leaders in terms of circulation and
advertisement revenue. Currently, DBR has licensing agreements with some of the
world’s leading names in puldishing:
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Axel Springer Verlag AG
Verlag Aenne Burda GmbH & Co.
Gruner + Jahr AG & Co.
IPC Magazines Limited
Hachette Filipacchi Presse S.A.
Gruner + Jahr / Mondadori S.p.A.
Cote Maison S.A.
Meine Familie & Ich Verlag GmbH
On the strengths of the specific content of its magazines, DBR founded its Conference
Division. In the span of two years, DBR Conference has made its mark successfully
staging a variety of conferences. In addition, for the second year running it has
organized the ADesign Fair - Istanbul International Design Meeting.
Taking into consideration the widespread global developments in digital publishing,
DBR has founded DBR Digital, an internet-based service company.
DBR, in addition to its publishing operations, is engaged in the import and distribution
of some of the world’s leading newspapers and periodicals.
At the beginning of 2004, DBR moved to its new location in Hürriyet Media Towers,
enabling it to increase its cooperation with other DYH companies and to further
leverage the Group’s synergies.
Corporate Governance
DBR started developing its corporate governance principles, which comply with the
best practices already implemented around the world and in DYH; it also conforms
to regulations employed by the Capital Markets Board.
DBR’s plans for the future include increasing sales and advertising revenue by
augmenting its brand portfolio, launching a number of either original magazine titles
or existing ones through licensing agreements, promoting magazine subscriptions,
importing new titles and maps, organizing conferences and trade fairs centered around
existing brands, looking for ways of selling domestic magazine titles to overseas
markets and making magazine publishing a preferred career platform for young and
talented people.
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MEDIA
DO⁄AN BOOKS
Field of Activity
Do¤an Books is a pioneering publishing house commanding a 25% share of bestsellers.
It has strong international collaborations that keep up with the latest trends in publishing.
Highlights
Since its inception, Do¤an Books has taken major strides to
become the new leader in Turkish publishing and number one
choice for the Turkish literati. Operating under institutional
guidelines which reflect global standards, Do¤an Books is a
pioneer in publishing.
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Pioneering role in the publishing sector
Emphasis on quality in all aspects of publishing
A 25% share in bestsellers
A trustworthy business partner for foreign publishing houses
Award-winning publications
Simultaneous publishing of the latest international books
Strong advocacy of intellectual property rights and adherence to ethical business
practices
• Offering books that cover a wide spectrum of interests for literature fans
• A respected organization directed by a team of professionals
Do¤an Kitapç›l›k A.fi. (Do¤an Books) started operations in 1998 after the merging
of a number of book publishing companies operating under DYH. Currently, the largest
shareholder in Do¤an Books is DYH, with 51% of the shares.
Since its inception, Do¤an Books has taken major strides to become the new leader
in Turkish publishing and number one choice for the Turkish literati. Operating under
institutional guidelines which reflect global standards, Do¤an Books is a pioneer in
publishing. The Company places special focus on author and book selection, editing,
translation and proofing as well as on the highest quality standards in book design,
paper and print.
In 2004, Do¤an Books published 100 new books and reprinted 400 more. It also
captured the limelight when it reached its goal of printing and sale of one million books.
Do¤an Books believes it has two major missions. The first is to bring select works of
world literature to Turkish readers as they become available globally without
compromising quality. The second mission is to introduce the reading public to books
of current Turkish authors, while also reprinting the works of the greatest names in
Turkish literary history. By offering best selling books, Do¤an Books aims to be the
best known publishing house in Turkey for both local and foreign titles.
Competitive Advantages over its Peers
Trustworthiness: The Company follows trends in world literature closely and establishes
direct links with foreign publishing houses and agencies. It is the first choice for
foreign publishing houses in Turkey.
Emphasis on High Quality: Do¤an Books’ publications are easily differentiated from
those of its peers by a pronounced difference in design, print and paper quality.
Respect for Intellectual Property and Copyrights: Do¤an Books abides strictly by sound
corporate governance principles and as such respects the intellectual property rights
of its writers and its commitments to writers and all business partners. All endeavors
of Do¤an Books are transparent and professional.
Effective Marketing: Being part of DYH provides Do¤an Books with numerous means
and channels of marketing and publicity.
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Established Market Presence: Do¤an Books has established good relationships with
publishing organizations. The Company is frequently consulted by local and foreign
organizations in matters relating to the Turkish cultural environment and publishing
market.
Do¤an Egmont magazines reach over 9,000 sales points utilizing
Assessment of Operations
Yaysat’s extensive distribution system, and its books are offered
The Company operates in two main areas: magazines and books for children and
teenagers.
for sale in over 1,000 locations.
Do¤an Egmont became the preferred publisher of products designed for the 3-14 year
old age group, with 54% of the market share (newspaper promotions excepted) for
this group and 35% of the market share for illustrated books.
Every month the Company produces 12 magazines and 25 new books targeting
3-14 year olds acting as a third party publisher in conjunction with Panini in the
creation of special projects, such as the design of promotional items for children and
teenagers. These items include European and World Cup Championship stickers and
Harry Potter stickers and cards.
Do¤an Egmont magazines reach over 9,000 sales points utilizing Yaysat’s
extensive distribution system, and its books are offered for sale in over 1,000
locations. Apart from bookstores and stationery shops, chains like D&R, Toys‘R
Us, Migros and Carrefour are among the retailers that are a part of the distribution
network.
DO⁄AN EGMONT PUBLISHING
Field of Activity
Do¤an Egmont is the country’s most preferred publishing company for adolescents. It
is the sole licensed publisher of Walt Disney books and magazines in Turkey and also
publishes licensed magazines and books from other internationally well-known publishers.
Strong international licensing agreements and third party publishing experience,
along with products and services of the highest quality, ensure Do¤an Egmont’s longterm competitive edge toward market leadership.
In addition to magazine and book businesses, Do¤an Egmont is closely monitoring
new trends in TV and is investing in television tie-in publications.
Synergy with Other Companies
Highlights
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Strong international licenses
High service quality
Synergy with Do¤an Yay›n Holding companies
Established good reputation in the marketplace
Dynamic and dedicated staff
Experience in third party publishing
Flexibility in adapting to rapid changes
High quality standards
Strong overall market share of 54%
Industry-wide recognition for its expertise in marketing and distribution through
Yaysat-Do¤an Da¤›t›m
• Presence at 9,000 sales points
As a Turkish-Danish joint venture company, Do¤an Egmont has a multicultural
structure, adopting a well-balanced mix of management principles from both of its
shareholders.
Do¤an Egmont works very closely with its shareholder companies. Drawing on the
considerable expertise of its investors, coupled with its low employee turnover, the
Company creates advantages in controlling costs and increasing efficiency.
As the country’s leading publisher for children and adolescents, the Company has
been granted exclusive rights to represent Walt Disney products in Turkey. In addition
to Disney books and magazines, Do¤an Egmont has acquired licenses from various
well-known publishers, such as Warner Bros, BBC, Mattel, Harper Collins, Dami and
Panini and has also secured the publishing rights of well-known local brands such as
Fenerbahçe, Galatasaray, Befliktafl, Kanal D and ANS.
History
DPP
Do¤an Egmont Publishing was established in 1996 as a joint venture between the
Danish Media Group Egmont Foundation and Do¤an Yay›n Holding. Do¤an Egmont
is the sole licensed publisher of Walt Disney books and magazines in Turkey. Within
the target group for 3-14-year-olds, it is the country’s most preferred publishing
company. In addition to Disney products, Do¤an Egmont also holds licensed product
rights of a variety of well-known companies, such as Warner Bros., For Dummies,
BBC, Mattel, Harper Collins and Panini.
Do¤an Egmont’s vision is to become a world-class publishing company employing the
highest quality standards. On its way to achieving this goal, the Company aims to open
a window in children’s minds by emphasizing entertainment, education, social values
and personal responsibility. To fulfill this mission, Do¤an Egmont strives to maintain
its leading position in the marketplace in children’s books and to expand its book and
magazine businesses with new products at the same time targeting new readers.
Field of Activity
DPP is a company specialized in magazine distribution planning and marketing. It
utilizes all available high-end technological means in its activities.
Highlights
• DPP is the only Do¤an Yay›n Holding company which specializes in magazine
planning and marketing.
• DPP is the only company that can plan on an end-seller basis utilizing state-of-theart software patented by the Company.
• DPP has full control of the marketplace through an effective sales team utilizing
all the high-end technological means available, including WAP phones and palm
computers.
• The Company has an astounding market share of 67%.
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MEDIA
History and Shareholder Structure
Established in August 2002, Dergi Pazarlama Planlama ve Ticaret A.fi. (DPP) is one
of the newest companies within Do¤an Yay›n Holding. It is the first and only company
within DYH with an international shareholder in media distribution.
DPP is involved in distribution management, marketing and planning services of all
magazines published and/or imported by DYH companies as well as the magazines
published by customer publishers.
Shareholders include Do¤an Yay›n Holding, BRIH Burda RCS International GmbH
and Yaysat-Do¤an Da¤›t›m.
Market Position
By the end of 2004, DPP had successfully handled the marketing and distribution of
over 331 publishers. Today it remains the first and only company solely devoted to
planning and marketing company in Turkey with a market share of 67%.
DPP uses all technological means available to gather and process real time market
information on the spot. The inventory of large-scale outlets is monitored closely and
necessary action is taken promptly to ensure seamless service. In an effort to enhance
operational and reporting efficiency, DPP will adopt SAP applications in collaboration
with Yaysat-Do¤an Da¤›t›m, another Do¤an Yay›n Holding company.
A pioneering company in the magazine and foreign publication market, DPP carefully
analyzes developments and sales trends and plans using IT-based tools employed by
expert professional staff. DPP first determines the most appropriate sales points for
magazines and foreign publications, and then undertakes the most suitable distribution
planning, providing display visibility and availability that are constantly monitored
at sales points by well-trained experts.
DPP’s portfolio is composed of 708 Turkish and 488 foreign language magazines and
newspapers imported from various countries, a total of 1,196 publications. Its product
portfolio consists of 28 daily newspapers, 122 weekly papers, 57 bi-weekly papers
and 438 monthly magazines. In addition, it contains 551 publications that are
published at bi-monthly or less frequent intervals. In short, DPP is responsible for
the distribution and planning of approximately 7.8 million units per month.
DPP delivers its publications to sales points daily through the highly developed logistics
and distribution network of Yaysat. A total of 232 wholesalers and 22,586 newspaper
vendors link them to the ultimate consumers. DPP has recently developed a sales channel
of chain markets, with a resulting sales increase of 30% for certain magazines. DPP
magazines are now sold in 1,088 chain outlets belonging to 70 different companies.
DPP’s annual sales turnover in 2003 was US$ 47.2 million, which reached a total
of US$ 61.2 million in 2004 with an increase of 30%.
DPP serves up-to-date information needs in Turkey by furnishing magazines from a
variety of publishing houses. The Company emphasizes the effective and efficient use
of human resources and up-to-date technology. Striving for complete customer
satisfaction, DPP wants to become a multinational leader in magazine marketing and
planning while using all high-end technological means available for its line of business.
In an effort to achieve its vision, the Company aims to create an optimal combination
of profitability, a low product return ratio and the highest net sales figure.
DPP adheres strictly to its corporate values in all of its activities:
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Treating all customers as business partners
Investing in the development of the magazine market
Competing with others in the spirit of fair play
Forming a culture of information sharing
The uncontested leader in magazine planning and distribution,
DPP is highly regarded in the sector as the first company with
foreign partnerships as well as its high levels of strategic
planning. Among DPP’s goals for the future, its greatest priority
is to maintain customer satisfaction and service at the
highest levels.
DPP targets:
• Delivering the best planning and marketing services to enable its business partners
to achieve maximum sales growth
• Developing new sales channels and methodologies
• Keeping returns at a minimum but availability at a maximum, thus enabling partners
to lower costs
• Continually expanding its portfolio of magazines and enhancing services
Yaysat Yay›n Sat›fl Pazarlama ve Da¤›t›m A.fi. (Yaysat) was founded in 1992 by
Do¤an Holding and ‹hlas Holding in a joint partnership after the liquidation of the
Gameda Company.
The uncontested leader in magazine planning and distribution, DPP is highly regarded
in the sector as the first company with foreign partnerships as well as its high levels
of strategic planning. Among DPP’s goals for the future, its greatest priority is to
maintain customer satisfaction and service at the highest levels.
The primary aim of DPP for the coming years is to maintain its market share at
around 70% and expand its foreign magazines portfolio as well as sales income. The
Company also plans to expand into neighboring Turkic language markets and capitalize
on those markets via the Internet.
Staffing
Do¤an Da¤›t›m Sat›fl ve Pazarlama A.fi. (Do¤an Da¤›t›m) was established in 2001.
In keeping with a clear delineation of duties between the two companies, Yaysat is
responsible for distribution and logistics activities while Do¤an Da¤›t›m handles
marketing and financial functions.
Yaysat-Do¤an Da¤›t›m is the leader in the sector in Turkey and intends to become a
global leader with its ability to fulfill the needs of media groups and their customers.
In line with this vision, it continuously looks to find new ways to improve the quality
of its operations.
The mission of Yaysat-Do¤an Da¤›t›m is to distribute a wide variety of publications
to readers at the right time, at the right place.
DPP is a contemporary and challenging work environment. The Company encourages
its employees to be creative and to participate in the management process. Employees
are expected to be aware of the Company’s corporate responsibilities and find ways
and means to further those responsibilities.
Yaysat-Do¤an Da¤›t›m also targets leadership in book distribution and in the marketing
of telephone cards. Yaysat is aiming for an annual turnover of US$ 75 million in nonmedia products within the next three years. The Company has plans to increase the
number of Yaysat Shops to 500 and Yaysat Points-of-Sale (POS) to 50,000 within
the same time frame.
DISTRIBUTION AND RETAILING
Operations
YAYSAT-DO⁄AN DA⁄ITIM
Yaysat-Do¤an Da¤›t›m fulfills an important mission in Turkey by distributing more
than 40 newspapers and 1,500 magazines all over the country. Its market share in
print media distribution is over 60%, by far the largest share of any company in the
sector.
Field of Activity
Yaysat-Do¤an Da¤›t›m is a printed materials distribution company, dealing mainly
with newspapers and magazines. It employs a large fleet of trucks to deliver on time
all around the country.
Highlights
• Yaysat delivers newspapers and other printed material to the farthest regions of
Turkey daily
• Regional offices in Istanbul, Ankara, Izmir, Adana, Trabzon and Antalya provide
a competitive edge with regard to reach, transportation and planning
• The Company is well ahead of its peers in terms of HR and IT
• The Company creates competitive advantages through the use of latest technology
Yaysat-Do¤an Da¤›t›m is equipped to make distribution planning at the Point-of-Sale
level. It works online on a B2B platform shared with its distributors through a capacity
comparable to a mid-size bank’s transaction volume and has plans to further increase
and enhance its IT-based operations with additional infrastructure investments. YaysatDo¤an Da¤›t›m also operates in the distribution of non-media products, mainly
including GSM cards, cassettes, toys, stickers, Internet service packages, and candy.
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MEDIA
Market Position
Yaysat achieved significant growth in the marketplace during 2004 due to a gain of
an extensive number of non-group customers. Today, it has a commanding market
share of more than 60%.
There are two nationwide companies, which distribute media products in Turkey.
Together they distribute a total of 59 different newspapers; of these, Yaysat distributes
41 (22 national and 19 local). Daily newspaper circulation in Turkey is approximately
4.1 million copies; out of this Yaysat’s market share of newspaper circulation is 63%.
Yaysat distributes over 1,500 magazines and its market share for magazine circulation
is 65%.
Reaching 232 primary distributors in Turkey and Northern Cyprus, with 25,800 sales
points in low season and 27,500 in high season, Yaysat is capable of reaching any
point within its network within a maximum of 24 hours.
In 2004, Yaysat successfully distributed a total of 1.356 billion newspapers, magazines
and other non-media products within Turkey and Northern Cyprus
IT Investments
For Yaysat, keeping pace with new technology means balancing cost and performance.
In order to reach equilibrium between investment costs and output performance,
Yaysat regularly invests in consultancy services from some of the world’s leading
companies in the sector as well as some well-known local IT companies.
In addition, approximately 3% of the IT budget is reserved for professional training
in software, systems and network engineering. In an effort to improve its Management
Information System (MIS), Yaysat implemented SAP software project, which became
operational in mid-2004.
Competitive Advantages
Yaysat-Do¤an Da¤›t›m’s outstanding IT investments have led to great competitive
advantages:
Reaching 232 primary distributors in Turkey and Northern
Cyprus, with 25,800 sales points in low season and 27,500 in
high season, Yaysat is capable of reaching any point within its
network within a maximum of 24 hours.
• B2B Platform-Enables Yaysat-Do¤an Da¤›t›m to reach all its distributors and sales
points instantly in order to share distribution, planning and financial data. This
instant communication opportunity with the distributors also saves time and money.
• Demantra Software-This innovative software works on the Oracle database platform
and calculates sales forecasts at the end of a process called Engine. During this
procedure, sales trends, sales results of the previous or the same day, seasonal
characteristics and special events such as political and sports events and promotions
that affect sales are all taken into consideration.
• Spart Software-This user-friendly software also works on the Oracle database
platform, which enables a direct connection to the web. It facilitates the preparation
of detailed sales forecasts and analyses.
• A computer-aided central sales and distribution planning system, unique both in
Turkey and the world, makes presentation of printing house reporting and daily
sales estimations possible for clients.
Social Activities
Volunteers from Yaysat-Do¤an Da¤›t›m in collaboration with P.S.V.A. (Private Sector
Volunteers Association) regularly participate in projects to protect the environment
and support education.
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Yaysat-Do¤an Da¤›t›m has distributed schoolbooks and other supplies for children.
In addition, a computer laboratory was set up by Yaysat-Do¤an Da¤›t›m in a Had›mköy
school. To help prevent car accidents, Yaysat-Do¤an Da¤›t›m has been supporting the
‘Drive Safely Keep Headlights on during the Day’ campaign for four years.
With its wide range of products, high service quality and
Targets include:
excellent store locations, D&R is constantly targeting maximum
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customer satisfaction by employing customer relationship
management (CRM) tools and advanced marketing
methodologies.
Further increasing the number of products on offer
Opening new stores
Developing marketing strategies that reflect consumer preferences
Utilizing all possible media to reach consumers
Increasing brand loyalty and customer satisfaction
Seeking ways of opening up international markets and becoming the first address
for all international inquiries
Market Position
Following a period of slow growth during Turkey’s financially troubled years, D&R
opened eight new stores in various locations around the country in 2004. By the end
of the year, D&R had 35 stores across nine locations in Turkey.
Capitalizing on its excellent reputation, D&R maintained its leadership in the
marketplace in terms of concept and volume of operations with more than 60,000
products on display in its stores. Products include books, films, CDs, DVDs and a wide
selection of electronic equipment.
Yaysat-Do¤an Da¤›t›m is currently in touch with a company from Hong Kong to
establish chain stores. The Company is in negotiation with a Spanish company for the
distribution of their products in the Turkish market. Yaysat-Do¤an Da¤›t›m also aims
to market its newspaper and magazine sales planning software program to other
printing and publishing establishments, especially markets in China and the Far East.
Aware of the power of globalization, the Company earnestly seeks to increase its
relationships with foreign companies.
In an effort to tap the expanding cultural products market potential in Turkey, D&R
utilizes different sales channels, from spacious multi-floor stores in prime locations
in major urban areas to the D&R virtual store on the Internet.
Staffing
Among D&R’s human resource policies, the talent pool application receives top priority.
In this regard, Head Office and store personnel have separate labor pools. Head Office
personnel are chosen among young people with an engineering background, whereas
store employees are recruited from university graduates with diverse backgrounds who
seek a career in retailing. All new recruits are given in-house and on-the-job training.
IT-Driven Job Processes
D&R
Field of Activity
At D&R, all job processes have been designed by using the latest information technology,
enabling greater efficiency and speed that make it possible for the Company to launch
customer loyalty programs through data mining and data warehousing applications.
D&R operates as Turkey’s first and the largest chain of music and bookstores.
Future Plans
Highlights
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•
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35 stores in nine geographical locations in Turkey
More than 60,000 products on display in stores
Multi-floor stores in prime locations
Highly popular D&R virtual store on the Internet
Strong brand awareness
A young and dynamic customer base
Strong financials
With its wide range of products, high service quality and excellent store locations,
D&R is constantly targeting maximum customer satisfaction by employing customer
relationship management (CRM) tools and advanced marketing methodologies. In
the coming years, it aims to expand its market share as Turkey’s leading chain of
music and bookstores by opening more stores across the country.
PRINTING
DO⁄AN PRINTING CENTERS
History
Field of Activity
Established in November 1996 as a joint venture between DYH and the Raks Group,
D&R is involved in the retailing of cultural and entertainment products through a
network of stores in major locations across the country. In 1999, DYH increased its
shareholder percentage to 99.9%.
Do¤an Printing Centers, located in six major cities across Turkey, are involved in
printing large numbers of periodicals and eight daily newspapers for DYH companies.
In terms of capacity, DPC in Istanbul is the largest printing facility in Turkey and
the second largest in Europe.
Highlights
The vision of D&R is to deliver the largest possible variety of products in the most
convenient, financially sound and eye-catching manner, without compromising the
quality of products and service, while keeping its excellent reputation.
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•
•
•
•
D&R has chosen to build the largest, best structured sales, service and distribution
organization in Turkey’s entertainment sector.
Gathers the leading printing facilities in Turkey under one umbrella
Over 240,000 tons of paper printed annually
Clear focus on printing
Coordination of paper purchasing and storage of all DYH newspapers
Using the latest Computer-to-Plate (CTP) technology, to feed pages from editorial
to printing
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MEDIA
History
Do¤an Printing Centers (DPCs) mainly publish eight daily newspapers and periodicals
for DYH companies. These centers joined forces for the first time in February 1996
when the separate printing facilities of Hürriyet and Milliyet in Trabzon were merged
and consequently renamed. Later, all DYH printing facilities located in Ankara, Izmir,
Antalya, Adana and Istanbul were brought under the umbrella of DPC.
Focus on Printing
The DPC located in Istanbul, with an enclosed space of 17,000
square meters, is the largest printing facility in Turkey and the
second largest in Europe in terms of capacity.
With the merger of the Hürriyet and Milliyet printing facilities, DYH achieved the
most efficient and cost-effective production and printing solutions for an ever-increasing
number of publications. The establishment of DPCs relieved the Holding newspapers
from the burdens of production, printing and distribution, allowing them to concentrate
on journalism. Using modern production management techniques to increase efficiency,
these centers concentrate on what they do best - printing. Creating synergy among
DYH newspapers, these centers coordinate paper purchasing and stockpiling for all
Holding newspapers, ensuring even further cost savings.
Aiming to achieve sustainable change, high flexibility, quality and effectiveness, with
annual paper usage of over 240,000 tons, DPCs are the leading printing facilities in
Turkey and among the best in the newspaper industry worldwide.
DPC in Istanbul-The Largest Printing Facility in Turkey
The DPC located in Istanbul, with an enclosed space of 17,000 square meters,
is the largest printing facility in Turkey and the second largest in Europe in terms
of capacity. The facility has a pair of Man Colorman and three Goss HT-70
printing machines. The Man Colorman machinery has a capacity of 85,000
newspapers per hour each with 40 color pages for a total of 64 pages. Man Presses
are also connected to the Muller Martini insertion system, the latest technology
for this function. The facility is also equipped with state-of-the-art Computer-toPlate (CTP) technology to feed pages from editorial to printing without further
handling.
DO⁄AN OFSET
Field of Activity
Do¤an Ofset is a large-scale printing house offering outstanding quality in the production
of magazines, inserts, brochures, catalogs, newspapers, directories and books. In
addition to its domestic customers, Do¤an Ofset also serves its customers effectively
in a number of foreign countries.
Highlights
• Internationally competitive printing company
• Technologically advanced machinery offering world-standard quality
• The first printing company in Turkey to earn the ISO 9001:2000 Quality Assurance
Certificate
• ISO 14001 Environmental Protection Program Certificate
History
Do¤an Ofset, established in 1970, is an internationally competitive printing company
offering outstanding quality. The Company is also engaged in a variety of related
services. Foreseeing the future in heat-set web offset technology, Do¤an Ofset installed
the first heat-set offset web press in its facilities as early as 1976.
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The acquisition of Do¤an Ofset by DYH in 1994 gave life to the commercial printing
industry. Do¤an Ofset is equipped with heat-set web and sheet-fed offset presses for
the production of magazines, inserts, brochures, catalogs, newspapers, directories
and books.
In addition to its domestic customers, Do¤an Ofset also serves
Highlights
its customers successfully in the Ukraine, Russia, Romania,
• Extensive representation across Turkey and in neighboring countries
• Strives to become the best live news broadcaster in the region
• Cooperation with internationally known agencies-Associated Press, Reuters and
Sipa Press
• Represented in 17 countries outside Turkey
• The first news agency in the region to utilize videophone technology
• Received more than 50 awards from diverse organizations during 2004
Bulgaria, Hungary, Latvia and the United Kingdom. There are
plans underway to further increase the Company’s exports to
15% of its annual sales volume.
Extensive Geographical Coverage and High Processing Volume
DHA is made up of 34 regional bureaus and 600 reporters that provide news items
to DYH’s newspapers and television channels. Along with its extensive representation
across the country, DHA is also able to monitor developments in neighboring
countries.
On average, DHA processes 6,000 news articles, 11,000 photographs and 3,000
television news reports per month and disseminates them electronically. As part of
its mid to long-term expansion plans, DHA has invested in seven customized vehicles
equipped with digital cameras and satellite telephones, operating in Turkey and major
world cities.
A Focus on Technology
As part of its ongoing investment program, Do¤an Ofset continuously invests in new
machinery to keep up with technological developments in printing. Its new heat-set
web offset press machines (M600B24 and M850C) have increased annual production
capacity to one billion signatures. Its finishing line adds extended facilities to serve
global and local customers offering higher quality products with speed and flexibility.
The Company’s machinery line ensures quality, capacity and low labor costs, which
have earned Do¤an Ofset a fundamental competitive advantage in the European market.
Quality and Continuous Improvement
Do¤an Ofset remains committed to quality and improvement. Do¤an Ofset was the first
printing company in Turkey to earn the prestigious ISO 9001:2000 Quality Assurance
Certificate. The Company actively implements the Total Quality Management System.
Do¤an Ofset has also earned the ISO 14001 Environmental Protection Program
Certificate. These certificates ensure Do¤an Ofset’s continued commitment to quality
and environment carrying the Company to the forefront of the printing industry.
Market Position
In addition to its domestic customers, Do¤an Ofset also serves its customers successfully
in the Ukraine, Russia, Romania, Bulgaria, Hungary, Latvia and the United Kingdom.
There are plans underway to further increase the Company’s exports to 15% of its
annual sales volume.
The ultimate goal of DHA is to capitalize on its competitive edge in technology to
become the best live news broadcast operation in the region. It aims to be recognized
as the main regional news service provider by major international TV channels and
publishers. Strategic plans are structured to dominate the market within the coming
five years.
International Cooperation
DHA cooperates with internationally well-known newsgathering services such as the
Associated Press, Reuters and Sipa Press to distribute important news and visuals
to the worldwide subscribers of these agencies. Outside Turkey, DHA is represented
in 17 countries.
Achievements
In 2004, DHA received more than 50 awards from diverse organizations, making the
year another one filled with major accomplishments. Over the year, more than 100
breaking news stories were first broadcast live through an intermediary of DHA. The
first news agency to use video telephone technology, DHA was the first to broadcast
the fall of Kirkuk and the incidents in Telafer.
DO⁄AN FACTORING
Field of Activity
With high print capacity and quality, broad service coverage, web and sheet-fed
printing capability, a new machinery line, a large customer base, a young workforce
and a finely tuned distribution organization, Do¤an Ofset is on track to become an
international center for printing in the 21st century.
SUPPORT SERVICES
DO⁄AN NEWS AGENCY
Field of Activity
Do¤an News Agency (Do¤an Haber Ajans›-DHA) is a content provider specializing
in news photography, as well as video and audio news coverage.
Do¤an Factoring is an in-house factoring company specialized in managing media
receivables of the DYH companies. It provides collection services as well as favorable
financing terms enabling clients to focus on their core activities.
Highlights
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A leading position within the factoring industry since 2001
Among the top ten factoring companies in Turkey with respect to annual turnover
Strong equity capable of funding factoring activities
Competitive advantage gained through unique processes, strong organizational
structure and original applications
• Activities supported by the use of the latest banking techniques and IT tools
• Competent and knowledgeable staff
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MEDIA
Hürriyet is not only the leading Turkish newspaper in Europe,
but also one of the best selling foreign newspapers on the
continent. The pages of Hürriyet are transmitted daily from
In addition to summary reports indicating advertising targets and sales reports for
all publication companies within the group, every month Collection Status Reports
and Advertising Oversight Reports are issued. These reports enable Do¤an Factoring
to monitor every stage of the collection process, from job order to collection and final
payment. Do¤an Factoring also offers its customers the option of monitoring their
accounts online via the Internet.
Istanbul to Frankfurt, where they are copied onto plates using
Within the scope of collection services, Do¤an Factoring ensures the optimum utilization
of funds by extending cash management services to clients.
CTP technology.
Because Do¤an Factoring is engaged in the collection of advertising revenue and other
receivables from DYH companies, it strives to provide uniform business practices
within the Holding, enabling common action against defaulting customers, controlling
the collection process and determining commercial policies with regard to advertising
groups.
The primary task of Do¤an Factoring is to serve companies within Do¤an Yay›n
Holding. Through its factoring services, the commercial risks of these companies are
eliminated and financial support is provided in the form of advance payments against
advertising receivables.
In June 2001, the Company revised its mission of simply acting as the collection
agent for Do¤an Yay›n Holding companies and expanded its activities beyond
that scope. The Company now handles all receivables for the companies within
DYH.
Additionally, since June 2002, all advertisement control activities have been centralized
at Do¤an Factoring. Since then, the Company has also assumed the task of invoice
generation and supervision of printed media advertisements to ensure that they are
in line with preset prices and criteria.
History and Shareholder Structure
Established in 1999, Do¤an Factoring is currently one of the top ten factoring
companies in Turkey. Initially it was a subsidiary of D›fl Factoring, and from its
inception until mid-2001 it was a relatively small operation. However, in June 2001,
the Company became a subsidiary of DYH and has since restructured to assume a
leading position in the factoring business.
Do¤an fiirketler Grubu Holding A.fi., one of the founding shareholders of the Company,
transferred its shares to Do¤an Yay›n Holding A.fi. Today, its shareholders are Do¤an
Yay›n Holding A.fi. with a 93.88% stake, Hürriyet Gazetecilik ve Matbaac›l›k A.fi
with 5% and the rest held by other companies within DYH.
On its journey toward achieving its vision to become one of the top companies in the
factoring industry with respect to turnover and profitability, Do¤an Factoring seeks
to utilize DYH synergy to further expand and improve its current activities.
In coming years, Do¤an Factoring plans to:
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Increase its equity base in terms of US dollars
Develop a centralized collection platform
Maintain efficiency and profitability in all its operations
Generate a larger funding base to finance its clients
Improve existing early-warning systems and the content of its monitoring reports
PRESENCE IN EUROPE
Strong Financial Position
DYH INTERNATIONAL
Over the last three years, Do¤an Factoring made a tremendous leap and became one
of the leading factoring companies in Turkey. Today, the Company is able to fund all
of its activities through equity capital.
Value-Added Services
In addition to collection services, Do¤an Factoring is also involved in other service
aspects of the factoring business such as credit investigation and trade receivables
accounting. Through in-depth risk analysis concerning trade receivables, the Company
is largely instrumental in avoiding any possible payment defaults, thus raising the
asset quality of the companies served.
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Field of Activity
DYH International handles a large portion of DYH’s publications and broadcast
operations that are targeted to the Turkish expatriate community in Europe.
Highlights
• Handles a large portion of DYH’s publications and broadcast operations in Europe
• Hürriyet is one of the highest selling foreign newspapers in Europe
• Hürriyet is the most popular Turkish daily newspaper in Germany with a market
share of 73.37%
• Hürriyet A.fi.-Germany Branch is also a contract printer for European titles like
the English finance newspaper The Business, the German newspaper Sportwelt and
the Turkish paper Cumhuriyet.
In October 2001, DMC completed a licensing deal with Bertelsmann
Worldwide Distribution
Music International Service GmbH, which has over 200 music
Together with the distribution network of Axel-Springer, Hürriyet has extended its
lead in the market to become the only Turkish newspaper on display at over 30,000
outlets worldwide, reaching Turkish nationals in 23 countries - from the United
Kingdom, Hungary, Norway and Spain to the US and Canada.
labels in more than 50 countries and is part of one of the largest
media conglomerates worldwide - Bertelsmann AG.
MUSIC
DO⁄AN MUSIC COMPANY
Field of Activity
History
DYH International was established in 1999 to operate as DYH’s gateway to Europe.
Cooperation
Together with DYH International, DYH has successfully realized many joint ventures
and business collaborations across Europe with major media groups.
Market Position
Headquartered in Mörfelden-Walldorf near Frankfurt, Germany, DYH International
plays a key role in the development of DYH’s business relationships and interaction
with some of Europe’s leading media companies.
DYH International has extended DYH’s European market leader status through
newspapers such as Hürriyet, Milliyet and Fanatik. Statistics released by Aw Vertriebs
GmbH shows that Turkey’s leading newspaper Hürriyet is also the most popular among
the Turkish daily newspapers sold in Germany with a market share of 73.37%.
As a result of the success of these publications, DMG International has a 75% share
of the advertising turnover for the ethnic Turkish market in Germany.
Do¤an Music Company is a music production and distribution company, bringing
together the media, entertainment, communications and IT industries. It has a licensing
agreement with Bertelsmann Music International Service GmbH, a powerhouse in
the worldwide music industry.
Highlights
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Vocal advocate for intellectual property rights
Licensing agreement with Bertelsmann Music Group (BMG)
Leading names in Turkish music on contract
A strong promotional platform for international artists in Turkey
Support of BMG in the international music industry
Dedication to creating new brands and scouting new talents
History
Do¤an Music Company (DMC) was established in 2000 as part of DYH’s initiative
to follow global trends that bring together media, entertainment, communications
and IT.
State-of-the-Art Printing Facilities in Germany
DMC has acquired the copyright for many works of music as well as other intellectual
property rights of performers. The Company has been working with the leading names
in the Turkish music scene.
Hürriyet is not only the leading Turkish newspaper in Europe, but also one of the best
selling foreign newspapers on the continent. The pages of Hürriyet are transmitted daily
from Istanbul to Frankfurt, where they are copied onto plates using CTP technology.
Cooperation with Bertelsmann Music
The publication of Hürriyet is carried out in Germany by Hürriyet A.fi. – Germany
Branch, a subsidiary of Hürriyet. This Company is also a contract printer for other
European titles like The Wall Street Journal Europe, the German sports paper
Sportwelt and Cumhuriyet Newspaper.
In October 2001, DMC completed a licensing deal with Bertelsmann Music International
Service GmbH, which has over 200 music labels in more than 50 countries and is
part of one of the largest media conglomerates worldwide - Bertelsmann AG. For
over 30 years, BMG has consistently controlled a leading market share in key growth
categories such as pop, rock, dance, alternative, hip hop, jazz, classical, country and
new age music.
Hürriyet A.fi. – Germany Branch’s two modern Goss Universal 45 offset newspaper
printing machines are capable of printing 90,000 papers per hour with a maximum
of 40 pages, of which 12 are in color. The paper width is variable (between 630 mm
and 914mm), making it possible to print a wide range of products of different sizes.
Each machine is equipped with a Müller Martini Conveyor system. Newsliner insert
units, wrapping stations, feeders, counting, bundling and packaging bands complete
the modern print facility setup. The insert units make it possible to add customer
brochures, magazines, envelopes, and pre-printed newspaper sections and supplements
to the newspapers so that they all reach the consumer at the same moment.
A new production line ordered in 2004 is planned to be operational by mid-2005. It
will be capable of producing 45,000 copies per hour of a 32-page newspaper containing
16 color pages. This Goss Universal 45 offset printer will be complemented by an
independent Müller Martini distribution system.
Two Buhrs Variajet systems are in use for automatic customer addressing using the
inkjet method. The “Pick & Place” module completes the line, with a maximum
capacity of 15,000 copies per hour, adding stickers, brochures or CDs to the cover
pages of newspapers. Three loading bays permit direct loading of the bundles into
vehicles, saving valuable distribution time.
According to the terms of the agreement, BMG received the benefits of a strong
promotional platform for its international artists in Turkey. Similarly, DMC received
the support of BMG to be a part of the international music industry, presenting its
own artists to the rest of the world.
Poised to Create Additional Synergy
Featuring DMC performers, DMC seeks to create additional synergy with production
and broadcasting companies within DYH as well as Internet portals. Both DMC and
BMG are dedicated to creating new brands and discovering new talent.
DMC is preparing to undertake some major international projects in the near future
to position itself alongside leading European music and entertainment companies
until 2008. Offering its stock to the public through an IPO will also be one of DMC’s
primary objectives in this period.
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SOCIAL RESPONSIBILITY
Do¤an Holding is committed to the
social and cultural improvement of
Turkey through the
Ayd›n Do¤an Foundation.
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06
SOCIAL RESPONSIBILITY
The main focus of the Ayd›n Do¤an Foundation is education.
THE AYDIN DO⁄AN FOUNDATION
Reflecting this, the Foundation has concentrated on the building
of schools, and also providing support for universities and
research centers.
Do¤an Holding is made up of two large conglomerates, Do¤an fiirketler Grubu Holding
and Do¤an Yay›n Holding, making it one of Turkey’s largest corporations. Spanning
business areas from media to tourism and from banking to automotive, all companies
within Do¤an Holding are fully aware of their responsibility that accompanies their
position.
Do¤an Holding is committed to the social and cultural improvement of Turkey through
the Ayd›n Do¤an Foundation. The Foundation was established in April 1996 as a nonprofit organization and is dedicated to support, and where possible to improve,
education, public health, scientific research and sports. In addition, the Foundation
provides funding for media studies, encourages developments in the field of technology
and promotes cultural and social advancement.
Focus on Education
The main focus of the Ayd›n Do¤an Foundation is education. Reflecting this, the
Foundation has concentrated on the building of schools, and also providing support
for universities and research centers. Thus far, the Foundation has donated six
elementary schools to the Ministry of Education: Sema Ifl›l Do¤an Elementary School
(Gümüflhane), Kelkit ‹rfani-Yaflar Do¤an High School (Gümüflhane), Milliyet High
School (Erzincan), Hürriyet Tourism and Hotel Management High School (Erzincan),
Ayd›n Do¤an Communications High School (Istanbul) and Ayd›n Do¤an Science and
Art Center (Afyon).
The Foundation constructed a vocational college in Kelkit and in September 2003
transferred the operation and administration of the school to Erzurum Atatürk
University. This technical college is the first training institution in Turkey that offers
courses and internships in organic agriculture.
The Foundation also finances the construction of sports complexes. A sports complex
in Gümüflhane was built and handed over to the city administration in 2002.
Support to Media and Related Industries
Turkey has long been a country capable of taking full advantage of developments in
the information sector. Up-to-date technology is used in both the preparation and the
production of newspapers and magazines and radio and television programming. The
Ayd›n Do¤an Foundation is dedicated to develop, encourage, educate, train and support
people involved in the fast changing media industry.
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Taking into consideration the wide range of business areas in the media in which
Do¤an Holding is involved, the Foundation attaches great importance to improving
the quality of human resources in newspapers, television, radio and other fields of
communication.
As one of Turkey’s most prestigious events in the fields of arts,
culture and the humanities, the Ayd›n Do¤an Awards, now in
their eighth year, attracts work from many artists and
researchers.
AWARDS AND COMPETITIONS
The Young Communicators Award
As part of its social and cultural activities, the Foundation organizes national and
international competitions. The Young Communicators Award, which attracts record
numbers of participants each year, is open to all Turkish university students pursuing
studies in the field of communications. Many promising young people have gained
recognition in this competition. In 2004, entrants competed for awards in the written,
visual, audio, advertising, public relations and Internet broadcasting categories.
A select jury of the most experienced and well-known journalists within Do¤an Media
Group act as a panel of judges for this competition. A special album of the winning
entries is published each year and distributed to students as a testimony to their
success. The Foundation provides scholarships and awards to first prize holders. They
are also offered internships within the Media Group.
The Communications Faculty of Aegean University has honored the Foundation’s
President, Ayd›n Do¤an, and presented him with an honorary doctorate for the support
he has offered to media studies.
The Ayd›n Do¤an Awards
As one of Turkey’s most prestigious events in the fields of arts, culture and the
humanities, the Ayd›n Do¤an Awards, now in their eighth year, attracts work from
many artists and researchers. The first award was given to the famous novelist, Adalet
A¤ao¤lu. Subsequent award winners include Prof. Dr. Do¤an Kuban and Prof. Dr.
Emre Kongar, two of the country’s leading experts in the area of social and human
sciences. Ara Güler, an internationally prominent Turkish photographer, was the
recipient of the Visual Arts Award in the competition’s third year.
In 2000, the award was presented to the great poet, Melih Cevdet Anday. Prof. Dr.
‹lber Ortayl› received the award for his contribution in the history category in 2001.
In 2002, the winner of the Classical Music Award was the Ankara State Conservatory.
Recipients of the Archaeology Award in 2003 were Ord. Prof. Dr. Sedat Alp and
Prof. Dr. Altan Çilingiro¤lu. The 2004 Turkish Folk Music Award went to Yücel
Paflmakç› for his lifetime achievement and research in folk music.
Building such an atmosphere requires a common language-the language of humor.
It is with this goal in mind that the Foundation has organized the Ayd›n Do¤an
International Cartoon Competition. This Competition has now completed its 21st year
as a firmly established event in the international arena. In 2004, more than 1,052
artists from 82 countries, from diverse ethnic and cultural backgrounds and varied
world perspectives participated in the Ayd›n Do¤an International Cartoon Competition.
Their work is published, as has become customary, in a special album.
Cash prizes are given to the winners in the first three categories; 12 competitors also
receive Honorable Mention awards. The Ceremony that was customarily held every
year at the Museum of Art and Sculpture in Ankara was transferred to the Museum
of Islamic Arts in Istanbul. Winning entries are placed on exhibit during the ceremony.
At the request of the Ministry of Foreign Affairs, the body of work is exhibited not
only in Turkey, but also in other countries. The Foundation has sent the exhibition
to the Republic of Moldova, the People’s Republic of China, the Turkish Republic of
Northern Cyprus and Japan. The exhibitions are prime examples of how different
nationalities can meet on common ground and bridge cultural diversity.
The China Pictorial Agency requested rights to translate, publish and market an
assortment of some of the cartoons submitted for the Competition.
The Foundation plans to build a cartoon museum in Istanbul. When completed, this
cartoon museum will bear the name of the President of the Foundation, Ayd›n Do¤an.
International Collaborations
Shimonoseki City Art Museum held an exhibition honoring the 75th anniversary of
the Foundation of the Turkish Republic; a special album was published by the museum
for this exhibition. The collaboration between the Foundation and the Shimonoseki
City Art Museum constitute another example of the growing cultural relationship
between Turkey and Japan. In 2003, the Foundation held another exhibition in
Shibuya, Tokyo.
National and International Convocations
Ayd›n Do¤an International Cartoon Competition
In today’s world, where violence and discrimination continue to threaten global
stability, tolerance is more important than ever. Do¤an Holding firmly believes that
it is the responsibility of each individual to promote tolerance, to ensure a society
that fosters mutual respect and understanding. At the heart of this is a society that
allows different opinions and different beliefs to thrive; a society where tolerance and
common sense are the foundations of daily life.
The Foundation is also well known as an organizer of national and international
conferences, conventions, seminars and public forums. These activities attempt to find
solutions to problems in economic, social, cultural and scientific fields. The results
are used to initiate new research projects in these areas and published. Books on
media studies are published by the Foundation as well.
CORPORATE GOVERNANCE
DOGAN GROUP OF COMPANIES INC.
PRINCIPLES OF CORPORATE GOVERNANCE
COMPLIANCE REPORT
MAY 2005
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CONTENTS
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PAGE
1. DECLARATION OF COMPLIANCE WITH PRINCIPLES OF CORPORATE GOVERNANCE
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CHAPTER I – STAKEHOLDERS
2. Stakeholder Relations Unit
3. Exercise of the Right to Information by Shareholders
4. General Meeting Information
5. Right to Vote and Minority Rights
6. Distribution of Dividends and Timing of Distribution
7. Transfer of Shares
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CHAPTER II - TRANSPARENCY AND PUBLICATION OF INFORMATION
8. Company Information Policy
9. Special Announcements
10. Company Web Site and Content
11. Real Persons Holding Shares
12. Individuals with Access to Inside Information
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CHAPTER III - BENEFICIARIES
13. Keeping Beneficiaries Informed
14. Beneficiaries’ Participation in Administration
15. Human Resources Policy
16. Customer and Supplier Relations
17. Social Responsibility
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CHAPTER IV - BOARD OF DIRECTORS
18. Structure of the Board of Directors, its Composition and Independent Members
19. Qualifications for Members of the Board of Directors
20. Mission, Vision and Strategic Goals of the Company
21. Risk Management and Internal Audit Mechanism
22. Responsibilities and Authority of Board Members and Other Administrators
23. Board of Directors’ Activities
24. Conducting Transactions with the Company and the Ban on Competition
25. Ethics Rules
26. Number, Structure and Independence of Committees Established by the Board of Directors
27. Financial Rights Accorded the Board of Directors
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1.
DECLARATION OF COMPLIANCE WITH PRINCIPLES OF CORPORATE GOVERNANCE
Do¤an Holding has embraced the concepts of fairness, transparency, accountability and responsibility and intends to fully adhere
to these Principles of Corporate Governance. The completion of ongoing pursuits regarding the Principles of Corporate Governance,
the rules of ethical conduct and company bylaws is in progress.
No conflict of interest has arisen among interest holders due to principles that have yet to be implemented.
Details on the implementation of these principles in the operating cycle ending Dec. 31, 2004 are included in the appendix.
Tufan Darbaz
Member Plenipotentiary and CEO
CHAPTER I - STAKEHOLDERS
2.5. In 2004 stakeholders’ demands vis-à-vis shares were fulfilled without delay.
2.
2.6. In meeting such demands, compliance with the law and Company bylaws is
strictly maintained. No written or verbal complaints or administrative or
legal investigations involving the utilization of shareholder’s rights were
recorded against the Company in 2004.
Stakeholder Relations Unit
2.1. Shareholding rights are exercised in accordance with the relevant legislation,
Company bylaws and other inter-company rules. All necessary steps have
been taken to ensure the ability to exercise these rights.
2.2. The Stakeholder Relations Unit has been introduced to monitor relations
between stakeholders and the Company and to ensure that stakeholders
receive information on the company. The unit is tasked with the following:
a) Ensuring the clarity, security and timeliness of stakeholder records;
b) Responding to stakeholder questions concerning the Company while
ensuring that information released does not constitute a trade secret or
privileged information;
c) Ensuring that General Meetings are held in accordance with relevant
legislation, company bylaws and other inter-company rules;
d) Preparing documents for use by stakeholders at General Meetings;
e) Maintaining records of votes and disclosing such results to stakeholders;
f) Monitoring a wide range of issues including legislation as well as
determining the Company’s Information Policy;
g) Ensuring that financial activities are carried out; and
h) Ensuring that investor relations activities are conducted.
The Stakeholder Relations Unit will be linked functionally to the Corporate
Governance Committee and administratively to the CFO in 2005.
2.3. Representatives from the Financial Affairs, Legal and Budgeting and Finance
divisions operate under the CFO’s oversight within the Stakeholder Relations
Unit.
2.4. The Unit responded to over 500 requests for information and questions
originating directly or indirectly with stakeholders in 2004. All questions
were answered with the exception of information identified as trade secrets.
The relevant documents and information were delivered to stakeholders in
line with the principle of fairness.
Moreover, employing a proactive approach with stakeholders, the Stakeholder
Relations Unit communicates administrative messages and strategies to
stakeholders through regular meetings. Accordingly, two informational
meetings were held with investors and representatives of organizations
reporting on Company activities in financial markets.
In order to inform institutional investors domiciled overseas, three visits
were paid to investors in the institutional investment centers of London and
New York, enabling institutional investors to meet with Company
administrators face-to-face.
Moreover, the CEO informs the public of annual and six-month results in
the Company’s annual reports and on its Web sites.
Stakeholders are provided Company information in English and Turkish at
www.doganholding.com.tr in the Investor Relations section.
90
3.
Exercise of the Right to Information by Shareholders
3.1. No distinction is made among stakeholders as regards the exercise of the
right to information.
3.2. Over 500 requests for information were received either directly or indirectly
from stakeholders in 2004 primarily concerning financial and strategic
developments announced by the Company. All information requests from
stakeholders were fulfilled without delay.
3.3. Financial information, news and presentations are published on the Company’s
Web sites. Stakeholders submitting requests for information are directed
to the Company Web site where information and documentation are equally
presented for the use of stakeholders.
3.4. Although not stipulated by Company bylaws, a special auditor can be
assigned to conduct audits only upon the request of stakeholders holding
more than a 5 percent stake in the Company. However, no demand for a
special auditor has been submitted to the Company.
4.
General Meeting Information
4.1. The Company’s ordinary General Meeting for 2003 was held on July 9,
2004, and an extraordinary General Meeting on amendments to Company
bylaws was held on Dec. 21, 2004. Invitations to the meetings were published,
as stipulated by the bylaws, in Milliyet newspaper and in the Turkish Trade
Registry Gazette. In addition, invitations from the Board of Directors were
delivered to stakeholders holding registered shares in accordance with
Turkish commercial law within the time stipulated.
4.2. The method of holding general meetings ensure maximum stakeholder
attendance.
4.3. General Meetings are conducted in line with the principle of fairness so as
to cause the least uncertainty and cost for participants.
4.4. The ordinary General Meeting was held at a downtown Istanbul hotel to
facilitate the attendance of stakeholders.
4.5. Shareholders are not required to register their names on shareholders’ lists
within any specific time frame prior to attendance at meetings.
4.6. Documents prepared for the ordinary General Meeting, the 2003 Annual
Report, internal audits and the Board of Directors’ actions regarding 2003
activities were made available to stakeholders 15 days prior to the meeting.
The Stakeholder Relations Unit responded to questions from stakeholders
following the issuance of invitations.
4.7. The agenda is presented in a clear and concise manner so as to be easily
understood by stakeholders, with the opportunity to voice their opinions and
ask questions.
4.8. The Board responded to stakeholders’ questions on agenda issues at the
ordinary and extraordinary General Meetings.
4.9. Although stakeholders put forward no proposals at the ordinary General
Meetings, the minutes indicate dissent over the Board of Directors’
authorization of choice of auditor, choice of an independent auditing
institution, bonds, the determination of export conditions and the establishment
of joint ventures with companies conducting similar types of business. These
opposing comments were all entered into the General Meeting minutes.
5.7. Cumulative voting is not addressed in the bylaws.
5.8. Since no two Company stakeholders are involved in a mutual
partnership, a vote has not been held at the General Meeting on the issue
of partnerships.
5.9. Although the bylaws permit the trading of dividend shares, there is no
instance of the issuance of any dividend shares.
6.
Distribution of Dividends and Timing of Distribution
6.1. No advantage accrues to any individual in the distribution of dividends.
4.10. At the extraordinary General Meeting, dissent voiced over an increase of
the upper limit of the Company’s registered capital and over amendments
to the bylaws was entered into the General Meeting minutes.
4.11. A system of open voting was employed at General Meetings.
4.12. The quorum at General Meetings requires the attendance of shareholders
together holding at least 50 percent of the Company’s capital. Attendees
at the ordinary General Meeting held 66.7 percent of capital and those at
the extraordinary General Meeting held 67 percent.
4.13. General Meeting minutes are held at Company headquarters and were
delivered via fax to stakeholders upon demand.
4.14. While the General Meeting was attended by Company staff, shareholders
and an independent auditing firm, other interest holders and the media were
not in attendance.
4.15. There are no articles in the Company bylaws stipulating that decisions
concerning Company reorganization or the purchase, sale or rental of a
significant amount of property should be made at the General Meeting.
5.
Voting Rights and Minority Rights
5.1. In an attempt to avoid difficulties in the exercising of the right to vote, the
Company seeks to facilitate the exercise of this right in the easiest, simplest
and most appropriate way.
6.2. The Do¤an Group of Companies Inc. engages in dividend distribution in
accordance with the Turkish Commercial Law and rates determined by the
Capital Markets Board (CMB) and the General Meeting within the specified
time period.
Accordingly:
Net profit can be calculated by deducting all Company expenditures,
amortization, paid premiums and bonuses that have been paid or are to be
realized, and accrued taxes along with other financial obligations from total
income.
After the losses (if any) from previous years and the amounts determined
by the Capital Markets Board are deducted from net income, reserves set
at 5% by the Turkish Commercial Law and other relevant regulations and
the principle revenue share at the rate and amount determined by the Capital
Markets Board are allocated.
The General Meeting is authorized to determine, in accordance with the
dividend distribution policy of the Company, whether the remainder is to
be considered money held in reserve or distributed.
One-tenth of the amount obtained by reducing the 5 percent of capital from
the funds to be distributed among shareholders and other persons having
a share in profits will be considered money in reserve as determined by
Paragraph 3 of the second section of Article 466 of the Turkish Commercial
Law.
5.2. There is no privilege accorded to any share.
5.3. Every share carries the right to one vote in the Company.
5.4. Regulations do not allow the stakeholder to vote at a specified time following
the date of acquisition.
5.5. No article in the Company bylaws prohibits an individual from voting as
the representative of a stakeholder, even though the individual himself does
not own any shares.
5.6. The stakeholders made no proposals demanding representation of minority
shares in Company administration.
According to the law, unless the required amount of funds is reserved, or
unless the primary profit share to be distributed to the shareholders in
the form of cash and/or shares is distributed, no decision on transferring
profits to the next year or paying dividends to preferred shareholders or
to other shareholders, members of the board or employees can be made.
6.3. Although the Company has no dividend distribution policy other than that
published in the bylaws, the Board of Directors will bear in mind the sensitive
balance between the growth of the Company and the expectations of the
stakeholders.
6.4. It is also explained in independent auditor’s reports and financial statements
sent to the Istanbul Stock Exchange (ISE) that the distribution of dividends
is carried out in accordance with the Turkish Trade Law and Capital Markets
Board legislation.
7.
8.4. Members of the Board of Directors, administrators and stakeholders holding
5 percent of capital either directly or indirectly must disclose transactions
made on the financial instruments of the Company in accordance with
Capital Markets legislation.
8.5. Consolidated financial statements for 2004 and accompanying footnotes
in accordance with the IFRS are independently audited in accordance with
international auditing standards and are then published.
Transfer of Shares
7.1. The Company bylaws contain no article limiting the transfer of shares.
7.2. The stock registry is of fundamental importance in the determination of the
holders of registered shares. Stock registry recordings are carried out by
decision of the Board of Directors.
8.6. The 2004 Annual Report was prepared in compliance with Capital Markets
legislation and Capital Markets Board regulations and principles.
9.
7.3. All stakeholders including minority and foreigner shareholders are treated
equally.
Special Announcements
9.1. The Company abides by Capital Markets legislation, CMB and ISE regulations,
and CMB principles.
9.2. The Company issued 40 special announcements in 2004.
CHAPTER II - TRANSPARENCY AND PUBLICATION OF INFORMATION
8.
No additional statements were required by the CMB or the ISE in addition
to statements already issued by the Company. The Company did not issue
any delayed special announcements.
Company Information Policy
8.1. The aim of the Company’s Information Policy is to ensure the fast, accurate
and reliable disclosure of financial and non-financial information related
to the Company with the exception of information that is classified as trade
secrets.
8.2. In order to fulfill this goal, the Company holds informational meetings in
addition to issuing Special Announcements. The meetings are held with the
participation of investors, analysts and the media.
In conjunction with this, the CEO and members of the Board of Directors
and other top executives of the Holding attend these meetings to make
presentations. In addition, Company reports are published on the Company’s
Web site.
9.3. The Company has determined and announced the individuals authorized to
issue special announcements.
9.4. The Company has no further responsibility to inform the public since the
Company has no shares listed on foreign stock exchanges.
10. Company Web Site and Content
10.1. The Company’s Web site, www.doganholding.com.tr, has actively been
instrumental in informing the public.
10.2. Periodic financial statements, independent auditor’s reports and annual
reports have been published on the Web site as required by the applicable
CMB legislation, Number XI, 25.
8.3. The Financial Affairs Group is tasked with informing the public and monitoring all related issues associated with this task. Those authorized to disseminate
the Company’s Information Policy are:
Name
Title
Tel
E-mail
Ahmet ‹. Karacahisarl›
Financial Affairs Group Head
(216) 556 93 44
[email protected]
Cem Kölemeno¤lu
Budgeting and Finance Division Head
(216) 556 93 44
[email protected]
Cengaver Y›ld›zgöz
Budgeting and Finance Specialist
(216) 556 92 73
[email protected]
In responding to questions from various interest holders the balance of equal opportunity is maintained and is considered to be of the utmost importance.
92
10.3. An English-language version of the documents and information is also
available for the convenience of foreign investors.
General Meeting agendas, statements reflecting increases in the Company’s
capital, dividend statements, minutes of Board of Directors’ meetings
that could influence the value of financial instruments, buy and sell
transactions carried out by members of the Board of Directors and other
administrators, codes of ethics. Documentation regarding these items
is currently being drafted and will be released upon completion of the
necessary procedures.
10.4. Information provided on the Web site is as follows:
a) Institutional
- Organizational structure
- Board of Directors (Board of Directors, auditing committee, executives)
- Mission statement (mission and fundamental values)
- Corporate Governance (Declaration of Compliance with the Principles
of Corporate Governance)
- Shareholder structure
- Access (communication and transportation information)
b) Sectors
- Affiliates and subsidiaries
- Group company Web sites
c) News
- Press reports
- Interviews
d) Human Resources
- Mission
- Online CVs
- Employment statistics
c) Although there is no "Frequently Asked Questions" section on the Web
site, those wanting to obtain more information can contact the CEO of
the company 24 hours a day by e-mail at [email protected]
in the Customer Relations section. Responses are provided to all questions
submitted to the addresses provided by questioners in accordance with
the principle of equality.
10.6. The Web site is listed on the Company’s letterhead stationery.
11. Real Persons Holding Shares
11.1. Amendments to the capital structure and/or administration of the Company
are announced to the public in accordance with Capital Markets legislation
and CMB regulations.
11.2. The shareholder structure of the Company as of Dec. 31, 2004 was as follows:
e) Investor Relations
- Stock profile (Performance of the Holding and its publicly traded
subsidiaries and the corporate structure of the Holding, affiliates and
subsidiary shares)
- Financials (Audited financial statements and independent auditor’s
reports)
- Presentations and reports (Financial performance and strategy
presentations and reports published by intermediaries)
- Annual reports: (Current and past annual reports)
- List of analysts (Names of analysts responsible for the Company in
intermediary institutions)
- Communication (Contact numbers for the Stakeholder Relations Unit)
Stakeholders
f) Activities
- Social responsibilities
- Ayd›n Do¤an Foundation
Total Share Capital
g) Customer Relations
- CEO’s office, 24/7 access information
Share Capital (YTL)
Share %
Adilbey Holding A.fi. *
382,349,868
52.00%
‹MKB
252,131,806
34.29%
Ayd›n Do¤an
86,106,341
11.71%
Ifl›l Do¤an
12,092,273
1.64%
Ayd›n Do¤an Vakf›
1,404,264
0.20%
Arzuhan Yalç›nda¤
300,914
0.04%
Vuslat D. Sabanc›
300,914
0.04%
Hanzade V. Do¤an
300,914
0.04%
Y. Begümhan D. Faralyal›
300,914
0.04%
735,288,208
100%
* The shareholder structure of the company’s main shareholder, Adilbey Holding
A.fi., as of Dec. 31, 2004 was as follows:
Stakeholders
Share Capital (YTL)
Share %
Ayd›n Do¤an
70,720,000
26.0%
Ifl›l Do¤an
40,256,000
14.8%
40,256,000
14.8%
a) Information related to privileged shares; there are no privileged
stakeholders.
Vuslat D. Sabanc›
40,256,000
14.8%
Hanzade V. Do¤an
40,256,000
14.8%
b) Commercial registry information, Company bylaws, special announcements,
explanatory statements and public offering circulars, the proxy form,
Y. Begümhan D. Faralyal›
40,256,000
14.8%
Total Share Capital
272,000,000
100%
10.5. Information not included on the Web site and the reasons for its exclusion
are as follows:
11.3. It is to the knowledge of the Company that stakeholders have not entered
into any contractual voting agreement on matters pertaining to the Company.
CHAPTER III - BENEFICIARIES
13. Keeping Beneficiaries Informed
12. Individuals with Access to Inside Information
12.1. The chairman of the Board of Directors and its members, auditors, the
Stakeholder Relations Unit, top executives of the holdings and other persons
who have access to inside information are prohibited from revealing knowledge
that could be used to the advantage of third parties.
Persons with access to inside information:
Chairman
‹mre Barmanbek
Deputy Chairperson
Vural Ak›fl›k
Deputy Chairperson
Tufan Darbaz
14. Beneficiaries’ Participation in Administration
Member Plenipotentiary and CEO
Member
Vuslat Do¤an Sabanc›
Member
Hanzade Do¤an
Member
Mehmet Ali Yalç›nda¤
Member
Tayfun Bayaz›t
Member
Taylan Bilgel
Member
Ertu¤rul Tuncer
Member
Sema Do¤an
Tourism Group President
Yahya Üzdiyen
Strategy Group President
Reha Müstecapl›o¤lu
Audit Group President
Ahmet ‹zzet Karacahisarl›
Ahmet Ça¤lar
Financial Affairs Group President
Industry Group President
Cem Kölemeno¤lu
14.1. A continuous communication between the Company and its beneficiaries is
maintained to assess demands conveyed to the Company and to find solutions
to problems.
14.2. No regulation addresses the participation of beneficiaries in the Company’s
administration..
14.3. Employees are kept apprised of the general activities of the Company, and
their suggestions are evaluated via the intranet Web site.
15. Human Resources Policy
15.1. The basic principles of the Company’s human resources policy can be
summarized as follows:
Head of Budgeting and Finance Division
Yener fienok
Head of Fiscal Division
Selma Uyguç
Head of Legal Division
Head of Corporate Communications and Human Resources
Ali R›za Karakullukçu
Accounting and Administrative Affairs Manager
Hande Özer
Financial Control Manager
Cengaver Y›ld›zgöz
Budgeting and Finance Specialist
Memduh Coflkuner
Company Auditor
Cem Soylu
Company Auditor
Mustafa ‹bifla¤ao¤lu
Certified Financial Consultant
Bayram Ali Karakan
Certified Financial Consultant
Arzu Karakad›o¤lu
Secretary of the Board of Directors
Esra Dinleriz
Elvan Ataol Çiftçi
Hülya Yataas›
Binnur Tunçözcan
Independent Auditors
a) There is no discrimination based on race, ethnic origin, nationality or
sex in the Company’s human resources policy. People, who are regarded
as equal, are afforded equal opportunity under equal working conditions.
Remuneration is based on employee performance.
Audit Group Manager
Alper Alt›ok
94
13.2. The beneficiaries of the Company--shareholders, investors, financial institutions
and suppliers--can access Company information via the Web site along with
presentations and details of informational meetings.
13.3. The Company also has an intranet site that is only accessible by employees.
Ayd›n Do¤an
‹pek ‹lter
13.1. As is explained in detail in the first chapter of this report, stakeholders and
investors are kept informed in accordance with Capital Markets legislation
and CMB regulations.
Secretary to the Financial and Affairs Group President
Auditors and Authorized Individuals
b) Company administrators are selected from among candidates proven to
possess the necessary professional qualifications.
c) Employees are given the opportunity to work in a healthy and secure
work environment and are afforded career advancement opportunities.
15.2. The human resources unit of the Company has been carrying out its work
in accordance with the principles mentioned above. The details of the
Company’s human resources policy will be included in the ethics rules that
are to be published.
15.3. The Company maintains its relations with its employees through its Human
Resources Division. A system of appointing employee representatives to
conduct employee relations with the Company does not exist.
15.4. No complaints of discrimination have been filed by employees of the Company.
16. Customer and Supplier Relations
16.1. The actual activity of the Company is to invest in and form partnerships in
its main areas of involvement of finance, media, energy, telecommunications,
tourism, industry and commerce. The Group also provides finance, project
development, organization, marketing, administrative consulting and internal
auditing services to its subsidiaries. Since the Company is a holding, its
customers and suppliers generally consist of business partners.
16.2. In addition to meeting the needs of our business partners, the services
provided them are designed to create value for the Group’s companies.
Services are provided to business partners in accordance with market prices.
The Foundation built a vocational college in Kelkit and in September
2003 transferred it to Erzurum Atatürk University on September 28,
2003. This vocational college has the distinction to be the first such
institution in Turkey to offer courses and internships in organic agriculture
as well as more mainstream courses like accounting, electric- electronic
and software programming. Graduates of the school will be able to find
internships and permanent work at the Do¤an Organic Farming Project.
The Foundations is well aware of the need for foreign language education
and in both the Vocational College and Ayd›n Do¤an Communications
High School, students are taught English.
The Foundation also supports education for the gifted through Afyon
Ayd›n Do¤an Science and Arts Center.
17. Social Responsibility
17.1. The Company is determined to protect natural resources and prevent pollution
of the environment while carrying out its various activities.
17.2. Within the context of corporate social responsibility, the Company has
invested in Do¤an Organic Products in Gümüflhane, which has been recognized
for its contributions to and pioneering activities in organic agriculture. The
project, friendly to natural resources and highly observant of environmental
principles and animal rights, contributes significantly to the development
of the region with its "contractual farming" project. This investment is
considered to be a leading regional development project in Turkey.
17.3. Do¤an Holding, cognizant of its social responsibilities, participates in joint
projects with nongovernmental organizations either through its subsidiaries
or by means of organizations operating within the Holding. The Company
encourages and promotes volunteerism and social responsibility.
17.4. The Holding provides support for the development of our country through
the activities of the Ayd›n Do¤an Foundation:
a) The Ayd›n Do¤an Foundation was established in April 1996 as a
tax-exempt non-profit organization. The Foundation mainly concentrates
on developments and improvements in education, public health, scientific
research, sports and economy. It is also dedicated to supporting media
activities, encouraging technological development and promoting cultural
and social advancement.
b) The main concern of the Ayd›n Do¤an Foundation is education. As a
reflection of this, the Foundation has concentrated on the building of
schools as well as on providing support for universities and research
centers. Thus far, the Foundation has donated six elementary schools to
the Ministry of Education: Sema Ifl›l Do¤an Elementary School
(Gümüflhane); Kelkit ‹rfani-Yaflar Do¤an High School (Gümüflhane);
Milliyet High School (Erzincan); Hürriyet Tourism & Hotel Management
High School (Erzincan); Ayd›n Do¤an Communications High School
(‹stanbul); and the Ayd›n Do¤an Science and Art Center (Afyon).
c) The Foundation also finances the construction of sports complexes. A
sports complex in Gümüflhane, namely Gümüflhane Ayd›n Do¤an Sports
Hall, was built and turned over to the Directorate for Youth and Sports
in 2002.
d) Galatasaray University Ayd›n Do¤an Auditorium (Istanbul), the Turkish
Sport Columnists Association’s Ayd›n Do¤an Education Center (Istanbul),
the Journalists’ Association’s Ayd›n Do¤an Culture and Art Gallery
(Ankara), the Ankara University Medical School’s Ayd›n Do¤an Geriatrics
Clinic (Ankara) and the Kalender Metin Do¤an Food Center (Kelkit) are
among the assets created for society at large by the Ayd›n Do¤an
Foundation.
e) As part of its social and cultural activities, the Ayd›n Do¤an Foundation
sponsors national and international competitions and contests such as
the Young Communicators Award, the Ayd›n Do¤an Awards and the
Ayd›n Do¤an International Cartoon Competition.
f) The Foundation is also well known as an organizer of national and
international conferences, conventions, seminars and public forums.
These activities attempt to find solutions to problems in the economic,
social, cultural and scientific realms, while the results are used to initiate
new research projects and publications in these areas. Books on media
activities are published by the Foundation as well. The Foundation also
provides educational materials (books, computers, and the like) for
various educational institutions in Turkey.
The Ayd›n Do¤an Foundation was named the Most Successful Foundation
of the Year in 2001.
17.5. Do¤an Holding is among the founders of the Corporate Governance Association
(KYD), which fosters the achievement of high performance and competitiveness
in Turkish companies and promotes the creation of added value for
stakeholders. It is also a member of the Business Council for Sustainable
Development-Turkey (TBCSD), which devises models focusing on the
individual in regions of the country that are in need of development. Moreover,
it aims to contribute to civil society by means of the Private Sector Volunteers
Association, of which it is a member.
CHAPTER IV - BOARD OF DIRECTORS
d) Are sufficiently competent to read and analyze financial statements and
reports;
18. Structure of the Board of Directors, its Composition and Independent Members
18.1. There are eight non-executive, two independent and one executive members
on the Board of Directors.
f) Have never been convicted of violating regulations; and
g) Are able to attend board meetings.
18.2. Members of the Company’s Board of Directors:
Member
Ayd›n Do¤an
‹mre BARMANBEK
Position
Chairman
Deputy Chairperson
Executive/Nonexecutive/Independent
Non-executive
Non-executive
Vural AKIfiIK
Deputy Chairperson
Independent
Member Plenipotentiary, CEO
Executive
Arzuhan YALÇINDA⁄
Member
Non-executive
Vuslat SABANCI
Member
Non-executive
Hanzade DO⁄AN
Member
Non-executive
Mehmet Ali YALÇINDA⁄
Member
Non-executive
Tayfun BAYAZIT
Member
Non-executive
Taylan B‹LGEL
Member
Independent
Ali R›za TEMURO⁄LU (*)
Member
Non-executive
Tufan DARBAZ
e) Are knowledgeable regarding the legal regulations to which the Company
is subject;
(*) Resigned his membership on 04/01/2005 and was replaced by Ertu¤rul Tuncer.
18.3. The duties of Chairman of the Board of Directors and CEO are accorded
to two separate persons in this Company.
18.4. Company bylaws stipulate that members of the Board of Directors be limited
to a three-year term in office. Members are elected at the annual General
Meeting.
18.5. Some of the members of the Board of Directors also sit on the Board of
Directors of subsidiary companies.
18.6. Brief biographies of the members of the Board of Directors are published
on the Company’s Web site and Annual Report.
20. Mission, Vision and Strategic Goals of the Company
20.1. Our mission is to create value for our stakeholders, business partners,
employees and country through transforming new opportunities into successes.
Balanced and sustainable growth along with satisfactory profit are the
cornerstones of this mission. The mission of the Company has been published
on its Web site.
20.2. The strategic goals determined by the top management of the Company in
accordance with the plans of the Company are presented to the approval
of the Board of Directors prior to authorization.
20.3. The Board of Directors, through monthly meetings, assesses whether the
Company has reached previously determined goals. The results of Company
activities and its performance are evaluated in detailed reports.
21. Risk Management and the Internal Audit Mechanism
21.1. The task of internal auditing is currently being carried out by the Audit
Group, which operates under the CEO.
The main task of the Audit Group is to protect the interests and rights of
stakeholders in the Do¤an Group of Companies Holding Inc. and its
subsidiaries by taking measures against risks within and without the Company.
It is also tasked with investigating and auditing activities and transactions
carried out in accordance with decisions made by the Board of Directors
for compliance with the plans, budget, regulations and directions and with
legislation and accounting principles.
19. Qualifications for Members of the Board of Directors
19.1. The qualifications of the Members of the Board of Directors are in compliance
with the Capital Market Board’s Principles of Corporate Governance as
enumerated in Articles 3.1.1., 3.1.2. and 3.1.5. of Chapter IV.
19.2. Although there are no articles specifying qualifications for members of the
Board of Directors, the Company strives to ensure that Board members:
a) Hold a college degree;
b) Possess competence and a high level of knowledge;
c) Are experienced and informed in the fields in which the Company is active;
96
The Audit Group carries out its tasks in accordance with International
Auditing Standards.
21.2. The Audit Group identifies risks inherent in the activities of the Holding
and its subsidiaries in an effort to contribute to the development of risk
management and control systems and monitors the efficiency of the
organizations’ risk management.
The Audit Group submits reports on financial and operational risks to the
Board of Directors from data gathered through its audits. The Board of
Directors also assesses risk and takes appropriate measures.
21.3. Since it is a holding company, the primary risks involve financial matters
and the fiscal performance of its business partners. The management of
financial risk is performed by the Financial Affairs Group. In addition to
the financial risks of business partners, operational risks are also monitored
by group divisions and the CEO.
21.4. In addition, regulations which form a significant part of the internal audit
system have been drafted and put into effect.
au)
av)
aw)
ax)
22. Responsibilities and Authority of Board Members and Other Administrators
22.1. According to the Company bylaws, the Board of Directors manages and
represents the company. The limit of authority of those authorized to
represent the company and to collect its revenues is published in the
appropriate forums by the Board of Directors.
22.2. The authority to perform management tasks and representative authority
can be assigned wholly or partially to individual members of the Board of
Directors by the mandates of the General Meeting or by the Board of
Directors.
22.3. The Board of Directors can appoint a CEO to carry out the management
of the Company whose duration on the job may exceed theirs.
ay)
az)
ba)
whether or not the Company met its goals and taking measures to
prevent a reoccurrence of past problems;
Ensuring that activities of the Company are in compliance with Company
bylaws, internal rules and policies implemented;
Ensuring that financial statements comply with relevant legislation
and international accounting standards;
Determination of the Company’s approach to stakeholders and to public
relations; playing a leadership role to solve potential problems among
stakeholders;
Calling the General Meeting and ensuring those meetings are held in
accordance with the law and the bylaws;
Determination of the annual activity reports that are presented to the
General Meeting;
Monitoring of implementation of General Meeting decisions; and
Determination of executive and consultative committees to be formed
within the Company structure.
23. Board of Directors’ Activities
23.1. The Board of Directors convenes when necessary, but is required to hold
monthly meetings.
23.2. All decisions made by the Board of Directors are recorded in the registry
book.
22.4. The tasks of Board of Directors are as follows:
aa)
ab)
ac)
ad)
ae)
af)
ag)
ah)
ai)
aj)
ak)
al)
am)
an)
ao)
ap)
aq)
ar)
as)
at)
Determining the Company’s institutional philosophy and mission;
Approval of the Company’s vision, targets and strategies;
Exiting a certain sector and entering others;
Establishment of and participation in companies as well as their
purchase, sale, merging or closing down; participation in and withdrawal
from partnerships;
Buying and selling of real estate;
Approval of salary and bonus policies;
Approval of dividend distribution policies;
Allocation, increase or reduction of capital;
Approval of borrowing policy;
Approval of rules of ethics governing companies and employees;
Approval of communication and information policies;
Formation of administrative units and termination of their activities;
Ensuring the performance of administrative and financial auditing;
Approval of administrative activity procedures;
Approval of a consolidated budget;
Approval of subsidiaries’ budgets and the monitoring and assessment
of their performance;
Definition of authority and its delegation;
Election of the CEO and assessment of his or her performance;
Determination of the annual business plan and the approval of staff
and budget and decisions impacting them;
Monitoring the Company’s past performance and activities to determine
23.3. In accordance with Article 2.17.4 of Chapter IV of the CMB Principles of
Corporate Governance, the members of the Board of Directors are called
upon to attend meetings on the following topics:
a) Determination of fields of activity and approval of business and financial
plans;
b) The call for a General Meeting and organization of the meeting;
c) Determination of the annual report that will be disclosed at the General
Meeting;
d) Election of the Chairman and Deputy Chairperson of the Board of
Directors and the appointment of new members;
e) Formation of administrative units or termination of their activities;
f) Appointing or removing a CEO from the office;
g) Formation of committees;
h) Merging, divesting and restructuring of the Company;
i) Determination of dividend policy and determination of dividends to be
paid; and
j) Determination of increases and reductions in capital.
23.4. The Board customarily meets at Company headquarters but can convene
in another venue upon a decision of the Board of Directors.
23.5. The members of the Board of Directors are assured to access any type of
information to carry out their tasks. Issues to be discussed at Board meetings
are conveyed to members prior to each meeting along with the agenda.
23.6. The ordinary agenda of the Board of Directors is as follows:
a)
b)
c)
d)
e)
f)
g)
Reading of the minutes of the previous meeting;
Information on actions taken at the previous meeting;
Economic developments;
Legal developments;
Company performance;
Financial condition of the Company; and
General assessment.
26. Number, Structure and Independence of Committees Established by the Board
of Directors
26.1. The Company has established an Audit Committee to ensure that the Board
of Directors successfully performs its tasks in accordance with Capital
Markets Board legislation.
26.2. Members of the Audit Group Division:
Taylan Bilgel:
Moreover, in the presence of the circumstances described below, such issues will
also be on the Board’s agenda:
a)
b)
c)
d)
e)
f)
g)
h)
Developments in investment projects;
Approval or rejection of investments;
Changes in the market value of assets;
Personnel salary policy;
Evaluation of audits;
Discussions of the annual budget and business plan;
Determining fiscal policy; and
Determining dividend distribution policy.
Member of the Board of Directors, independent member
Ertu¤rul Tuncer: Member of the Board of Directors, non-executive member
26.3. Audit Committee members possess qualifications enabling them to perform
their duties and were selected from among the non-executive members of
the Board who are not also members plenipotentiary.
26.4. The Audit Committee conducts its activities regularly in accordance with
Capital Markets legislation and the Capital Market Board’s Principles of
Corporate Governance. In conjunction with this, in 2004:
a) The Company’s annual/interim financial statement and footnotes and
23.7. The Legal Affairs Division serves as Secretariat to the Board of Directors.
23.8. Since all decisions made by the Board of Directors have been the result of
a unanimous vote, there has been no need to vote on differing proposals
offered by members at the meetings. In addition, no questions were raised
by members that required note in the registry.
independent auditor’s reports were all examined prior to public release;
and
b) Independent auditor’s contracts with the Company and its subsidiaries
and on shares to be publicly traded on the Istanbul Stock Exchange were
all examined.
23.9. The members of the Board of Directors have no privileged voting rights
including the right to veto.
26.5. The Audit Committee holds meetings at least four times a year and presents
its decisions to the Board of Directors in written format.
23.10. Board of Directors’ travel/meeting costs, special demands of their work
and similar expenses are funded by the general budget without limitation.
26.6. The Audit Committee is acting within the limits of its authority and
responsibilities and advises the Board of Directors. However, final decisions
are made by the Board of Directors.
24. Conducting Transactions for the Company and the Ban on Competition
The required permission is granted by the General Meeting for members of the
Board of Directors to carry out transactions specified in Articles 334 and 335
of the Turkish Commercial Law, except for the those expressly prohibited by the
same law.
27. Financial Rights Accorded the Board of Directors
27.1. According to the Company bylaws, financial remuneration to be paid the
Board of Directors as compensation for their services is to be determined
at the General Meeting.
25. Ethics Rules
The Company has formulated its code of ethics and it will be published.
27.2. The performance of the Company is taken into consideration in determining
the financial rights to be accorded to Board of Directors.
27.3. Members of the Board of Directors do not receive loans from the Company
either in cash or in any other form. They are also not authorized to offer
any guarantee in favor of or co-sign along with any member.
98
CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2004
TOGETHER WITH AUDITOR’S REPORT
99
Başaran Nas Serbest Muhasebeci
Mali Müşavirlik A.Ş.
a member of
PricewaterhouseCoopers
BJK Plaza, Süleyman Seba Caddesi
No: 48 B Blok Kat 9 Akaretler
Beşiktaş 34357 İstanbul-Turkey
www.pwc.com/tr
Telephone +90 (212) 326 60 60
Facsimile +90 (212) 326 60 50
AUDITOR’S REPORT
To the Board of Directors of
Do¤an fiirketler Grubu Holding A.fi.
1. We have audited the accompanying consolidated balance sheet of Do¤an fiirketler Grubu Holding A.fi. ("Do¤an Holding") at 31 December 2004 and the related consolidated
statement of income and of cash flows for the year then ended, all expressed in New Turkish lira in the equivalent purchasing power of the Turkish lira as at 31 December
2004. These consolidated financial statements are the responsibility of Do¤an Holding's management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audit.
2. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material audit misstatement. An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
3. As explained in Note 33, following a resolution of the Tax Supreme Court in favour of Türk D›fl Ticaret Bankas› A.fi. ("D›flbank") in 2003, D›flbank acquired the right to
deduct accumulated losses amounting to YTL364.501 thousand from the corporate tax base for 2002 and for subsequent periods, in accordance with Corporate Tax Law
article 14/7. In accordance with the resolution, D›flbank deducted a portion of accumulated losses amounting to YTL144.824 thousand from its corporate tax base in 2003.
At 31 December 2004, D›flbank recognized part of deferred tax assets of YTL34.834 thousand on carried forward losses of YTL116.112 thousand in the accompanying
consolidated financial statements. However, without taking into consideration the resolution of the Tax Supreme Court in favour of D›flbank, the Tax Office sent a tax
notification to D›flbank expressing that the deduction of these accumulated losses from the corporate tax base for the fourth quarter of 2003 was not acceptable;
recalculated the advance corporate tax liability of YTL15.510 thousand and levied a fine of YTL16.131 thousand. D›flbank filed its advance tax declaration, with
reservations upon this action of the Tax Office, for the first quarter of 2004 presenting the amount of accumulated losses but without deducting it from the corporate tax
base and paid a total of YTL13.371 billion in advance corporate taxes. In that respect, D›flbank has filed a counter action against the Tax Office, and legal proceedings are
now in progress. The Tax Office, however, refunded the advance taxes in respect of the entire year of 2003, accepting the decree by the Tax Supreme Court. No provision
for any liability that may occur due to the above tax case has been made in the accompanying consolidated financial statements and the possibility of utilising the unused
portion of tax losses has not been clarified.
4. As discussed in Note 9, at 31 December 2004 D›flbank followed the local regulations as specified by the Banking Regulation and Supervision Agency and classified credit
card receivables of YTL102.607 thousand in the 3rd, 4th and 5th receivable groups as non-performing, of YTL78.722 thousand in 2nd receivable group as closely
monitored loans and receivables respectively and recognized YTL64.827 thousand of specific provision for loan losses based on the provisioning matrix as stipulated in the
local regulations by which provisions are set aside by the banks in Turkey in the accompanying consolidated financial statements. However, had the impairment loss on the
credit card receivables portfolio been measured in accordance with International Accounting Standards ("IAS") 39 "Financial Instruments", an estimated additional
provision of YTL38.500 thousand (approximately YTL24.000 thousand with Do¤an Holding ownership interest) would be recognized in the accompanying consolidated
financial statements at 31 December 2004.
5. In our opinion, the consolidated financial statements mentioned in the first paragraph, excluding the effects of the matters described in the 3rd and 4th paragraphs on the
consolidated financial statements, present fairly, in all material respects, the financial position of Do¤an fiirketler Grubu Holding A.fi. at 31 December 2004 and the
consolidated results of its operations and its consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards ("IFRS").
Without qualifying our opinion we draw attention to the following matters:
6. As explained in Note 24, Petrol Ofisi A.fi. ("POAfi"), one of the Joint Ventures of Do¤an Holding, pursuant to Tax Law No.5024, the provisions of the related legislation
promulgated by the Republic of Turkey Ministry of Finance and Circular No.17 on Tax Procedural Law related to Inflation Adjustment Applications dated 24 March 2005,
classified the statutory goodwill as a balancing and temporary account, and thus the Company did not apply inflation accounting thereto. This application was resulted in a
deduction of YTL76 million (approximately YTL36 million with Do¤an Holding ownership interest) in the taxes on income of the Company. As of the preparation date of
the consolidated financial statements, there is uncertainty as to whether the profit or loss resulting from the inflation related to the statutory goodwill should be considered
as a positive or negative difference as stated in the General Communiqué 67 of Corporate Tax Law.
7. The consolidated financial statements include the accounts of the parent company, its Subsidiaries and Joint Ventures (Note 3). Subsidiaries are companies in which Do¤an
Holding has the power to control the financial and operating policies for the benefit of Do¤an Holding through the exercise of voting power relating to shares held by Do¤an
Holding and its Subsidiaries together with voting power which Do¤an Holding effectively exercises relating to shares held by Do¤an family members (the "control basis") or
through the actual exercise of dominant influence. Joint Ventures are companies in respect of which there are contractual arrangements through which an economic activity
is undertaken subject to joint control by Do¤an Holding and its Subsidiaries and one or more other parties. In effect the Do¤an family members allow Do¤an Holding to
exercise the voting power in respect of their shares held in these companies. In the consolidated financial statements the shares held by Do¤an family members are treated
as minority interest.
8. As explained in Note 2.d to the consolidated financial statements, US dollar ("USD") amounts shown in the accompanying consolidated financial statements have been
included solely for the convenience of the reader and are translated from New Turkish lira ("YTL"), as a matter of arithmetic computation only, at the Central Bank of the
Republic of Turkey official TL exchange rate of YTL1,3421=USD1,00 for purchases of USD on 31 December 2004. Thus, US dollar amounts do not form a part of the
consolidated financial statements prepared in accordance with International Financial Reporting Standards as at 31 December 2004. Such translations should not be
construed as a representation that the YTL amounts have been or could be converted into USD at this or any other rate.
Baflaran Nas Serbest Muhasebeci
Mali Müflavirlik Anonim fiirketi
a member of
PricewaterhouseCoopers
Haluk Yalç›n, SMMM
Istanbul, 8 April 2005
CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2004
CONTENTS
CONSOLIDATED BALANCE SHEETS
PAGE
102-103
CONSOLIDATED STATEMENTS OF INCOME
104
CONSOLIDATED STATEMENTS OF CASH FLOWS
105
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
106
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
107
NOTE 1
NOTE 2
NOTE 3
NOTE 4
NOTE 5
NOTE 6
NOTE 7
NOTE 8
NOTE 9
NOTE 10
NOTE 11
NOTE 12
NOTE 13
NOTE 14
NOTE 15
NOTE 16
NOTE 17
NOTE 18
NOTE 19
NOTE 20
NOTE 21
NOTE 22
NOTE 23
NOTE 24
NOTE 25
NOTE 26
NOTE 27
NOTE 28
NOTE 29
NOTE 30
NOTE 31
NOTE 32
NOTE 33
NOTE 34
107
110
111
114
123
127
128
132
132
134
135
135
137
138
138
139
140
140
142
143
144
144
145
145
147
148
149
150
151
152
153
155
156
159
ORGANIZATION AND NATURE OF OPERATIONS
BASIS OF PRESENTATION OF FINANCIAL STATEMENTS
GROUP ACCOUNTING
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SEGMENTAL INFORMATION
CASH AND CASH EQUIVALENTS
INVESTMENTS
RESERVE DEPOSITS WITH THE CENTRAL BANK OF TURKEY
ORIGINATED LOANS
DERIVATIVE FINANCIAL INSTRUMENTS
TRADE RECEIVABLES
TRANSACTIONS AND BALANCES WITH RELATED PARTIES
INVENTORIES
OTHER CURRENT ASSETS
INVESTMENT PROPERTIES
PROPERTY, PLANT AND EQUIPMENT
INTANGIBLE ASSETS
BANK BORROWINGS, EUROBOND AND MURABAHA SYNDICATION
BANKING AND CUSTOMER DEPOSITS
TRADE PAYABLES
INSURANCE TECHNICAL RESERVES
OTHER CURRENT LIABILITIES
OTHER NON-CURRENT LIABILITIES
TAXATION ON INCOME
RESERVE FOR EMPLOYMENT TERMINATION BENEFITS
SHARE CAPITAL
RETAINED EARNINGS AND LEGAL RESERVES
CASH USED IN OPERATIONS
FINANCIAL (EXPENSES)/INCOME, NET
OTHER OPERATING EXPENSES, NET
FOREIGN CURRENCY POSITION
SIGNIFICANT ACQUISITIONS AND LEGAL MERGERS
COMMITMENTS AND CONTINGENT LIABILITIES
SUBSEQUENT EVENTS
CONSOLIDATED BALANCE SHEETS AT 31 DECEMBER 2004 AND 2003
(Amounts expressed in New Turkish lira (YTL) in terms of the purchasing power of Turkish lira at 31 December 2004 unless otherwise indicated.)
Notes
2004
USD (*)
2004
2003
6
764.185.567
1.025.613.450
1.108.469.740
7
7
7
8
9
10
11
12
13
14
321.221.365
430.663.954
233.897.624
344.273.878
2.194.767.160
16.650.156
537.859.300
1.761.154
226.396.646
126.114.069
431.111.194
577.994.093
313.914.001
462.049.972
2.945.597.006
22.346.175
721.860.966
2.363.645
303.846.938
169.257.692
614.027.557
602.642.032
34.425.257
260.925.234
2.268.347.750
9.069.651
622.166.896
8.634.847
219.751.247
149.646.615
5.197.790.873
6.975.955.132
5.898.106.826
629.835.076
243.488.622
5.684.555
4.443.410
414.678.306
40.641.194
968.578.519
1.096.893.995
10.802.256
141.223.146
845.301.656
326.786.080
7.629.241
5.963.500
556.539.754
54.544.547
1.299.929.230
1.472.141.431
14.497.708
189.535.584
954.495.540
3.529.790
393.878.345
45.692.022
1.326.708.400
1.588.182.759
14.310.613
205.789.114
Total non-current assets
3.556.269.079
4.772.868.731
4.532.586.583
Total assets
8.754.059.952
11.748.823.863
10.430.693.409
ASSETS
Current assets:
Cash and cash equivalents
Investments:
- trading securities
- available-for-sale
- held-to-maturity
Reserve deposits with the Central Bank of Turkey
Originated loans
Derivative financial instruments
Trade receivables
Due from related parties
Inventories
Other current assets
Total current assets
Non-current assets:
Investments:
- available-for-sale
- held-to-maturity
Trade receivables
Inventories
Originated loans
Investment properties, net
Property, plant and equipment, net
Intangible assets, net
Other non-current assets
Deferred tax assets
7
7
11
13
9
15
16
17
24
(*) As explained in the Note 2.d to the consolidated financial statements, USD amounts shown in these consolidated financial statements have been included solely for the
convenience of the reader and are translated from YTL, as a matter of arithmetic computation only, at the Central Bank of the Republic of Turkey official TL exchange rate.
Thus, USD amounts do not form a part of the consolidated financial statements prepared in accordance with International Financial Reporting Standards as at 31 December
2004.
The accompanying notes form an integral part of these consolidated financial statements.
102
Notes
2004
USD (*)
2004
2003
18
19
10
20
12
18
21
22
24
1.545.154.652
3.262.180.599
9.943.166
388.417.907
4.122.188
9.846.295
59.875.649
423.554.622
14.303.150
2.073.752.058
4.378.172.582
13.344.723
521.295.673
5.532.388
13.214.712
80.359.109
568.452.658
19.196.257
1.700.089.740
3.645.378.180
897.061
366.239.907
15.647.966
62.771.351
507.039.898
19.097.906
5.717.398.228
7.673.320.160
6.317.162.009
569.110.199
33.212.130
82.307.336
34.012.065
42.513.047
22.393.910
19.840.605
5.846.213
32.778.630
763.802.799
44.574.000
110.464.675
45.647.592
57.056.762
30.054.866
26.628.076
7.846.202
43.992.199
1.227.177.569
36.961.958
42.423.871
20.603.196
22.360.241
126.818.589
30.766.794
842.014.135
1.130.067.171
1.507.112.218
6.559.412.363
8.803.387.331
7.824.274.227
LIABILITIES, MINORITY INTERESTS
AND SHAREHOLDERS' EQUITY
Current liabilities:
Bank borrowings
Deposits
Trade payables
Due to related parties
Murabaha syndication
Insurance technical reserves
Other current liabilities
Taxes on income
Total current liabilities
Non-current liabilities:
Bank borrowings
Deposits
Eurobond
Trade payables
Reserve for employment termination benefits
Other non-current liabilities
Deferred tax liabilities
18
19
18
18
20
25
21
23
24
Total non-current liabilities
Total liabilities
Minority interest
- Dogan family members
- Other
5.g
5.g
59.910.709
666.090.539
80.406.163
893.960.114
84.827.226
771.058.210
Minority interest
5.g
726.001.248
974.366.277
855.885.436
Shareholders' equity
Share capital
Adjustment to share capital
26
26
547.863.950
599.608.995
735.288.208
804.735.232
588.230.567
813.259.940
1.147.472.945
1.540.023.440
1.401.490.507
550.175
(31.605.565)
352.228.786
738.390
(42.417.829)
472.726.254
4.886.491
(23.668.533)
367.825.281
Total shareholders' equity
1.468.646.341
1.971.070.255
1.750.533.746
Total liabilities, minority interest
and shareholders' equity
8.754.059.952
11.748.823.863
10.430.693.409
Total paid-in capital
Share premium
Translation reserve
Retained earnings
Commitments and contingent liabilities
2.c
27
33
These consolidated financial statements as at and for the year ended 31 December 2004 have been approved and signed on its behalf by the Board of Directors on 8 April
2005.
CONSOLIDATED STATEMENTS OF INCOME FOR THE YEARS ENDED 31 DECEMBER 2004 AND 2003
Revenues:
Non-banking and non-financial services
Banking and financial services
Operating expenses:
Notes
2004
USD (*)
2004
2003
5.c
5.c
4.828.060.064
915.517.550
6.479.739.412
1.228.716.104
5.746.709.383
1.342.544.851
5.743.577.614
7.708.455.516
7.089.254.234
(4.638.270.992)
(783.311.038)
(6.225.023.498)
(1.051.281.744)
(5.560.007.503)
(954.132.580)
(5.421.582.030)
(7.276.305.242)
(6.514.140.083)
(3.974.889)
(74.498.201)
(5.334.698)
(99.984.036)
(171.847.213)
(21.887.739)
(78.473.090)
(105.318.734)
(193.734.952)
185.814.183
57.708.311
249.381.216
77.450.324
14.854.667
366.524.532
243.522.494
326.831.540
381.379.199
(15.805.569)
39.154.021
(21.212.654)
52.548.611
91.933.890
211.750.229
266.870.946
358.167.497
685.063.318
(62.390.421)
(83.734.184)
(109.642.657)
204.480.525
274.433.313
575.420.661
1.127.059
(27.315.501)
(26.188.442)
1.512.626
(36.660.134)
(35.147.508)
(11.319.392)
(127.720.908)
(139.040.300)
178.292.083
239.285.805
436.380.361
5.c
5.c
Other operating expenses, net:
5.c and 30
5.c and 30
Operating profit:
Financial (expenses)/income, net
Gain on net monetary position
29
Income before minority interest and taxation on income
Taxation on income
24
Income before minority interest
Minority interest
- Dogan family members
- Other
Net income
Weighted average number of shares with face value of YTL1 each
4
735.288.208
735.288.208
644.875.292
Basic and diluted earnings per share in USD/YTL
4
0,24
0,33
0,68
2004.
104
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED 31 DECEMBER 2004 AND 2003
2004
USD (*)
2004
2003
266.870.946
358.167.497
685.063.318
(301.014.271)
671.010.392
(396.453.894)
(44.646.561)
(2.805.164)
(403.991.253)
900.563.047
(532.080.771)
(59.920.150)
(3.764.810)
(685.185.739)
649.542.523
(497.353.447)
(91.953.777)
(5.907.292)
192.961.448
258.973.560
54.205.586
(136.467.270)
(5.113.658)
(24.573.517)
23.332.526
(387.807.913)
(88.785.839)
(14.556.938)
177.523.878
68.575.652
(141.827.524)
(183.152.723)
(6.863.040)
(32.980.117)
31.314.583
(520.477.000)
(119.159.475)
(19.536.866)
238.254.796
92.035.382
(190.346.720)
(206.893.683)
(3.424.797)
(42.222.014)
61.560.336
(405.639.336)
(8.581.416)
8.976.756
46.342.740
(115.784.886)
(529.700.603)
(710.911.180)
(665.666.300)
12.315.488
(19.866.446)
246.717.792
(345.260.985)
43.858.359
82.307.336
10.902.981
(108.110.269)
281.032.301
16.528.616
(26.662.757)
331.119.949
(463.374.768)
58.862.304
110.464.675
14.632.891
(145.094.792)
377.173.451
3.685.068
(398.747)
(106.248.238)
(257.189.000)
(22.739.092)
159.031.796
738.391
(309.691.580)
415.537.642
Net cash from/(used in) financing activities
203.896.557
273.649.569
(117.273.760)
Net decrease in cash and cash equivalents
(132.842.598)
(178.288.051)
(728.734.474)
Notes
Cash flows from operating activities
Net income before taxation and minority interest
Adjustments to reconcile net income to net cash from operating activities:
Cash used in operations
Finance segment interest received
Finance segment interest paid
Taxes paid
Employment termination benefits paid
28
25
Net cash from operating activities
Cash flows from investing activities:
Purchase of property, plant and equipment
Purchase of investment property
Purchase of intangible assets
Proceeds from sale of property, plant and equipment and other non-current assets
Increase in available-for-sale investments
Change in other non-current assets and liabilities
Acquisition of subsidiaries
Proceeds from disposal of subsidiaries
Non-finance segment interest received
Inflation effect on investing activities
16
15
17
32
Net cash used in investing activities
Cash flows from financing activities:
Proceeds of issuance of share capital to minority interests
Dividends paid to minority interests
Net increase/(decrease) in short-term borrowings
Net decrease in long-term borrowings
Net increase in Murabaha syndication
Net increase in Eurobond
Net increase/(decrease) in long-term trade payables
Proceeds from issuance of share capital
Proceeds from changes in share premium
Non-finance segment interest paid
Inflation effect on financing activities
5.g
5.g
Inflation effect on cash and cash equivalents
Cash and cash equivalents at the beginning of year
6
(88.249.319)
770.768.525
(118.439.411)
1.034.448.437
(227.524.798)
1.990.707.709
Cash and cash equivalents at the end of year
6
549.676.608
737.720.975
1.034.448.437
Cash and cash equivalents amounting to YTL218.349.161 (2003: YTL69.060.490) are unavailable for use at 31 December 2004 (Note 6).
2004.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
FOR THE YEARS ENDED 31 DECEMBER 2004 AND 2003
Share
capital
Adjustment to
share capital
Share
premium
Translation
reserve
Retained
earnings/
(Accumulated
deficit)
At 31 December 2002
452.485.051
789.973.660
4.148.101
3.027.147
(68.555.080)
1.181.078.879
Currency translation differences
Increase in share capital
Net income for the year
135.745.516
-
23.286.280
-
738.390
-
(26.695.680)
-
436.380.361
(26.695.680)
159.770.186
436.380.361
At 31 December 2003
588.230.567
813.259.940
4.886.491
(23.668.533)
367.825.281
1.750.533.746
Transfers
147.057.641
-
(8.524.708)
-
(4.148.101)
-
(18.749.296)
-
(134.384.832)
239.285.805
(18.749.296)
239.285.805
At 31 December 2004
735.288.208
804.735.232
738.390
(42.417.829)
472.726.254
1.971.070.255
106
Total
shareholders’
equity
NOTES TO THE CONSOLIDATED FINANCAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2004 and 2003
NOTE 1 - ORGANIZATION AND NATURE OF OPERATIONS
Do¤an fiirketler Grubu Holding A.fi. ("Do¤an Holding" or the "Holding") was established on 22 October 1980 as a corporation to coordinate the activities of and liaise between
companies operating in different fields including media, finance, energy, telecommunications, tourism, manufacturing and marketing and is registered in Turkey. Do¤an
Holding also provides financial and managerial advisory and internal audit services to its Subsidiaries and Joint Ventures operating in these fields.
Do¤an Holding is registered with the Capital Markets Board ("CMB") and its shares have been quoted on the Istanbul Stock Exchange ("ISE") since 21 June 1993. At 31
December 2004, the shares quoted on the ISE represent 34,29% of the total shares. At 31 December 2004, the principal shareholders and their respective shareholdings in
the Holding are as follows (Note 26):
%
Do¤an family and companies owned by Do¤an family
Listed on ISE
65,52
34,29
0,19
100,00
The address of the registered office is as follows:
Oymac› Sokak No: 51
34662 Altunizade-Istanbul
The majority of Do¤an Holding is organized in Turkey, in four main business segments:
•
•
•
•
Finance
Media
Energy
Other
Other operations mainly comprise of trade, tourism, telecommunications, manufacturing and construction, none of which is of a sufficient size to be reported separately.
Do¤an Holding has the following subsidiaries (the "Subsidiaries"). The nature of the business of the Subsidiaries is as follows:
Name
Nature of business
Türk D›fl Ticaret Bankas› A.fi. ("D›flbank")
D›fl Ticaret Faktoring A.fi. ("D›fl Faktoring")
D›fl Ticaret Finansal Kiralama A.fi. ("D›fl Leasing")
D›fl Yat›r›m Menkul De¤erler A.fi. ("D›fl Yat›r›m")
D›fl Portföy Yönetimi ("D›fl Portföy")
D›fl Holding Malta Limited ("D›fl Holding Malta")
D›flbank Malta Ltd. ("D›flbank Malta")
D›fl Globus Malta ("D›fl Globus")
Ray Sigorta A.fi. ("Ray Sigorta")
Do¤an Emeklilik A.fi. ("Do¤an Emeklilik")
D›fl Holding Nederland B.V. ("D›fl Holding B.V.")
Do¤an Faktoring Hizmetleri A.fi. ("Do¤an Faktoring")
Hürriyet Gazetecilik ve Matbaac›l›k A.fi. ("Hürriyet")
Do¤an Gazetecilik A.fi. ("Do¤an Gazetecilik")
Yaysat Yay›n Sat›fl Pazarlama ve Da¤›t›m A.fi. ("Yaysat")
DYG ‹lan ve Reklam Hizmetleri A.fi. ("DYG ‹lan")
Do¤an Ofset Yay›nc›l›k ve Matbaac›l›k A.fi. ("Do¤an Ofset")
Do¤an Kitapç›l›k A.fi. ("Do¤an Kitapç›l›k")
Do¤an Haber Ajans› A.fi. ("Do¤an Haber")
Banking
Factoring
Leasing
Brokerage and fund management
Portfolio Management
Banking
Banking
Banking
Insurance
Insurance
Banking
Factoring
Newspaper publishing
Distribution
Advertising
Book publishing
News agency
Segment
Finance
Finance
Finance
Finance
Finance
Finance
Finance
Finance
Finance
Finance
Finance
Finance
Media
Media
Media
Media
Media
Media
Media
108
Name
Nature of business
Do¤an Bas›m ve Da¤›t›m ‹flleri A.fi. ("Do¤an Bas›m")
Milliyet Haber Ajans› A.fi. ("Milliyet Haber")
GPS Film Prodüksiyon A.fi. ("GPS Film")
Do¤an Prodüksiyon ve Ticaret A.fi. ("Do¤an Prodüksiyon")
ANS Uluslararas› Yap›m Yay›n Reklamc›l›k A.fi. ("ANS")
Do¤an ‹letiflim Telekomünikasyon Elektronik Servis Hizmetleri Turizm ve Yay›nc›l›k A.fi. ("Do¤an Online")
Do¤an Media International GmbH ("Do¤an Media")
D Finans ‹nternet Bilgi Hizmetleri ve Ticaret A.fi. ("D Finans")
Do¤an Müzik Yap›m ve Ticaret A.fi. ("DMC")
D Market Elektronik Hizmetler ve Ticaret A.fi. ("D Market")
Hürriyet Gazetecilik ve Matbaac›l›k A.fi. Zweigniderlassung Deutschland ("Hürriyet Zweigniderlassung")
Do¤an Daily News Gazetecilik ve Matbaac›l›k A.fi. ("Do¤an Daily News")
Do¤an Da¤›t›m Sat›fl ve Pazarlama A.fi. ("Do¤an Da¤›t›m")
Milliyet ‹nternet Hizmetleri ve Ticaret A.fi. ("Milliyet ‹nternet")
Milliyet Verlags und Handels GmbH ("Milliyet Verlags")
Do¤an Telekomunikasyon Ticaret A.fi. ("Do¤an Telekom")
DTV Haber ve Görsel Yay›nc›l›k A.fi. ("Kanal D")
Do¤an TV ve Radyo Yay›nc›l›k A.fi. ("Do¤an TV")
Hür-Bim Görsel Yay›nc›l›k A.fi. ("Hürbim")
Alp Görsel Yay›nc›l›k A.fi. ("Alp Görsel")
Bravo Televizyon Yay›nc›l›k Yap›mc›l›k Sanayi ve Ticaret A.fi. ("Bravo TV")
Fun Televizyon Yay›nc›l›k Yap›mc›l›k Sanayi ve Ticaret A.fi. ("Fun TV")
Galaksi Radyo Televizyon Yay›nc›l›k Yap›mc›l›k Sanayi ve Ticaret A.fi. ("Galaksi Radyo")
Foreks Yay›nc›l›k ve Reklamc›l›k A.fi. ("Hür FM")
Ifl›l Televizyon Yay›nc›l›k Yap›mc›l›k Sanayi ve Ticaret A.fi. ("Ifl›l TV")
Kanalspor Televizyon ve Radyo Yay›nc›l›k A.fi. ("Kanalspor")
Milenyum Televizyon Yay›nc›l›k ve Yap›mc›l›k A.fi. ("Milenyum TV")
Radyo Kulübü Uluslararas› Programlar A.fi. ("D Radyo")
Hürriyet Radyo Prodüksiyon ve Yay›n A.fi. ("Radyo Foreks")
Tempo Televizyon Yay›nc›l›k Yap›mc›l›k Sanayi ve Ticaret A.fi. ("Tempo TV")
TV 2000 Televizyon Yay›nc›l›k Yap›mc›l›k Sanayi ve Ticaret A.fi. ("TV 2000")
DS Servis ve ‹dari Hizmetler ve Ticaret A.fi. ("DS Servis")
Hürriyet ‹nternet Hizmetleri ve Ticaret A.fi. ("Hürriyet ‹nternet")
Egeser Servis ve ‹dari Hizmetler ve Ticaret A.fi. ("Egeser")
Hür Servis Sosyal Hizmetler ve Ticaret A.fi. ("Hürservis")
Hür Medya ‹lanc›l›k ve Reklamc›l›k Ticaret A.fi. ("Hürmedya")
Do¤an Müzik Kitap Ma¤azac›l›k Pazarlama A.fi. ("DMK")
Birmafl Birleflik Televizyon Reklam Pazarlama A.fi. ("Birmafl")
Birpa Birleflik Reklam Pazarlama A.fi. ("Birpa")
Milpa Ticari ve S›nai Ürünler Pazarlama Sanayi ve Ticaret A.fi. ("Milpa")
Hürriyet Ticari ve S›nai Ürünler Pazarlama Sanayi ve Ticaret A.fi. ("Hürriyet Pazarlama")
Milanur ‹nflaat Pazarlama Turizm Sanayi ve Ticaret Limited fiirketi ("Milanur")
Do¤an Otomobilcilik Ticaret ve Sanayi A.fi. ("Do¤an Oto")
Do¤an Havac›l›k Sanayi ve Ticaret A.fi. ("Do¤an Havac›l›k")
Do¤an Yay›n Holding A.fi. ("Do¤an Yay›n")
Çelik Halat ve Tel Sanayi A.fi. ("Çelik Halat")
Ditafl Do¤an Yedek Parça ‹malat ve Teknik A.fi. ("Ditafl Do¤an")
Milta Turizm ‹flletmeleri A.fi. ("Milta Turizm")
Do¤an Karton Sanayi ve Ticaret A.fi. ("Do¤an Karton")
CH Investments B.V.
CH UK Limited
Entralle Handels GmbH
3D Güvenlik Sistemleri ve Organizasyon Ticaret A.fi. ("3D Güvenlik")
Administrative services
News agency
TV broadcasting
TV broadcasting
TV broadcasting
Internet service provider
Internet services
Music and entertainment
Internet services
Newspaper printing
Distribution
Internet services
Communications
TV broadcasting
Investment
Information technology
TV broadcasting
TV broadcasting
TV broadcasting
Radio broadcasting
TV broadcasting
TV broadcasting
TV broadcasting
TV broadcasting
Radio broadcasting
Radio broadcasting
TV broadcasting
TV broadcasting
Administrative service
Internet services
Retail
Advertising
Retail
Trading
Marketing
Construction
Trading
Aviation
Investment
Production
Production
Tourism
Production
Investment
Investment
Trading
Service
Segment
Media
Media
Media
Media
Media
Media
Media
Media
Media
Media
Media
Media
Media
Media
Media
Media
Media
Media
Media
Media
Media
Media
Media
Media
Media
Media
Media
Media
Media
Media
Media
Media
Media
Media
Media
Media
Media
Media
Media
Other
Other
Other
Other
Other
Other
Other
Other
Other
Other
Other
Other
Other
Other
Name
Nature of business
Segment
Do¤an Organik Ürünler Sanayi ve Ticaret A.fi. ("Do¤an Organik")
CH Bulgaria ("CH Bulgaria")
Do¤an Elektronik Arac›l›k Hizmetleri Sat›fl Pazarlama Ve Yay›nc›l›k A.fi. ("D Elektronik")
Sat›fl Noktalar› A.fi. ("Sat›fl Noktalar›")
Do¤an Müzayedecilik Sat›fl Ve Pazarlama A.fi. ("Do¤an Müzayedecilik")
Do¤an D›fl Ticaret ve Mümessillik A.fi. ("Do¤an D›fl Ticaret")
Orta Anadolu Otomotiv A.fi. ("Orta Anadolu Otomotiv")
D Tek Bilgi ve ‹letiflim Sistemleri A.fi. ("D Tek")
‹sedafl ‹stanbul Elektrik Da¤›t›m Sanayi ve Ticaret A.fi. ("‹sedafl")
Zigana Elektrik Da¤›t›m Sanayi ve Ticaret A.fi. ("Zigana")
Çelik Enerji Üretim A.fi. ("Çelik Enerji")
Agriculture
Production
Marketing
Distribution and marketing
Marketing
Importation and exportation
Automotive
Information technology
Energy
Energy
Energy
Other
Other
Other
Other
Other
Other
Other
Other
Energy
Energy
Energy
The number of employees of the Holding at 31 December 2004 is 14.694 (2003: 11.426).
For the purposes of the segmental information in these consolidated financial statements, Do¤an Holding’s separate financial statements have been included in the "other"
segment (Note 5).
All the Subsidiaries are registered in Turkey except for D›fl Holding Malta, D›fl Globus and D›flbank Malta in Malta, D›fl Holding B.V. in the Netherlands, CH Bulgaria in
Bulgaria, Hürriyet Zweigniderlassung, Milliyet Verlags, Entralle Handels GmbH and Do¤an Media in Germany, CH Investments B.V. and CH UK Limited in the United
Kingdom.
However, as the sales and the purchases of the Group are made and the assets of the Group are located mainly in Turkey, no geographic segmental information is considered
necessary.
Do¤an Holding has the following Joint Ventures (the "Joint Ventures"). All Joint Ventures are registered in Turkey. The nature of the businesses and for the purpose of the
accompanying consolidated financial statements, the respective business segments of the Joint Ventures and Joint Venture Partners are as follows:
Name
Do¤an Burda Rizolli Dergi Yay›nc›l›k ve Pazarlama A.fi. ("DBR")
Do¤an ve Egmont Yay›nc›l›k ve Yap›mc›l›k Ticaret A.fi. ("Do¤an Egmont")
Ultra Kablolu Televizyon ve Telekomünikasyon Sanayi ve Ticaret A.fi ("Ultra Kablo")
Digital Hizmetler Pazarlama A.fi. ("Digital Hizmetler")
Süper Kanal Televizyon Video Radyo Bas›n Yap›m Yay›n
Tan›t›m ve Haber Hizmetleri A.fi. ("Süper Kanal")
Eko Televizyon Yay›nc›l›k A.fi. ("CNN Türk")
Dergi Pazarlama Planlama ve Ticaret A.fi. ("Dergi Pazarlama")
Petrol Ofisi A.fi. ("POAfi") (*)
Ça¤dafl Pazarlama Sistemleri A.fi. ("Ça¤dafl Pazarlama")
Nature of
business
Segment
Joint venture
partner
Publishing
Telecommunications
Telecommunications
Media
Media
Media
Media
Burda GmbH
Egmont
Koç Holding A.fi.
Çukurova Holding A.fi.
TV broadcasting
TV broadcasting
Advertising
Distribution of
petroleum products
Trading
Media
Media
Media
Erler Film A.fi.
Turner Broadcasting Int.
Burda RCS Int. GmbH
Energy
Other
T. ‹fl Bankas› A.fi.
RT. Exports LLC- LBO
Acquisitions 2001 Ltd.
(*) POAfi has a 52% share in K›br›s Türk Petrolleri Ltd. ("Kipet"), a 100% share in Petrol Ofisi International Oil Trading Ltd. ("PO International"), a 100% share in PO
Petrofinance N.V. ("Petrofinance") and a 99,96% share in Erk Petrol Yat›r›mlar› A.fi. ("Erk Petrol"). Kipet was established in 1975 in the Turkish Republic of Northern
Cyprus and its primary operation is the distribution of fuel. Lysa Investments Ltd. was founded in the Bahamas in 2001 in order to trade petroleum products; its name was
changed to Petrol Ofisi International Oil Trading Ltd. ("PO International") in 2003. PO Petrofinance N.V. ("Petrofinance") was founded in the Netherlands in 2002 in order to
generate funds, borrow money and grant loans. Erk Petrol, which was established on 21 May 2003 is engaged in the supply and marketing of fuel from domestic and foreign
markets, the organization of distribution and storing, the additional sales of refinery subsidiary products, the production of all types of grease and lubricants and their byproducts, blending, the establishing of blending and production facilities, whole- and retail sales, import and export. PO Oil Financing was founded in the Cayman Islands in
2004 for the generation of funds and the taking out and granting of loans.
NOTE 2 - BASIS OF PRESENTATION OF FINANCIAL STATEMENTS
a) New Turkish lira financial statements
The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS"), including the International Accounting
Standards ("IAS") and Interpretations issued by the International Accounting Standards Board ("IASB"). Do¤an Holding and its Subsidiaries and Joint Ventures registered in
Turkey maintain their books of account and prepare their statutory financial statements ("Statutory Financial Statements") in YTL in accordance with the Turkish Commercial
Code (the "TCC"), tax legislation, the Uniform Chart of Accounts issued by the Ministry of Finance, applicable Turkish insurance laws for insurance companies, Banking law
and accounting principles promulgated by the Banking Regulation and Supervising Agency for banks and for listed companies and accounting principles issued by the CMB of
Turkey ("CMB Principles"). The foreign Subsidiaries maintain their books of account in accordance with the laws and regulations in force in the countries in which they are
registered. These consolidated financial statements are based on the statutory records, with the required adjustments and reclassifications reflected for the purpose of fair
presentation in accordance with IFRS (including the restatement for changes in the general purchasing power of the Turkish lira).
International Accounting Standard 29 ("IAS 29"), "Financial Reporting in Hyperinflationary Economies", requires that financial statements prepared in the currency of a
hyperinflationary economy be stated in terms of the measuring unit current at the balance sheet date, and that corresponding figures for previous periods be restated in the
same terms. Characteristics that necessitate the application of IAS 29 are as follows: the general population prefers to keep its wealth in non-monetary assets and in a
relatively stable currency; sales and purchases on credit take place at prices that compensate for the expected loss of purchasing power during the credit period even if the
period is short; interest rates, wages and prices are linked to a price index; and cumulative three-year inflation rates approach or exceed 100%. The restatement was
calculated by means of conversion factors derived from the Turkish nationwide wholesale price index ("WPI") published by the State Institute of Statistics ("SIS").
Such indices and conversion factors used to restate the financial statements at 31 December are given below:
Dates
31 December 2004
31 December 2003
31 December 2002
Index
Conversion factors
Cumulative three-year
inflation rates
8.403,8
7.382,1
6.478,8
1,000
1,138
1,297
69,7%
181,1%
227,3%
The main procedures for the aforementioned restatement are as follows:
- Financial statements prepared in the currency of a hyperinflationary economy are stated in terms of the measuring unit current at the balance sheet date, and corresponding
figures for previous years are restated in the same terms.
- Monetary assets and liabilities that are carried at amounts current at the balance sheet date are not restated because they are already expressed in terms of the monetary
unit current at the balance sheet date.
- Non-monetary assets and liabilities, which are not carried at amounts current at the balance sheet date and components of shareholders' equity, are restated by applying the
relevant conversion factors.
- Comparative financial statements are restated using general inflation indices at the currency purchasing power at the latest balance sheet date.
- All items in the consolidated statements of income are restated by applying the relevant (monthly) conversion factors.
- The effect of inflation on the net monetary liability position of Do¤an Holding, the Subsidiaries and Joint Ventures is included in the consolidated statements of income as
gain on net monetary position.
b) New Turkish lira
Through the enactment of the Law numbered 5083 concerning the "Currency of the Republic of Turkey" in the Official Gazette dated 30 January 2004, the New Turkish lira
("YTL") and the New Kurufl ("YKr") have been introduced as the new currencies of the Republic of Turkey, effective from 1 January 2005. The hundredth part of the YTL is the
YKr (1 YTL=100YKr). When the prior currency, Turkish lira ("TL"), values are converted into the YTL, one million TL (1.000.000 TL) is equivalent to one YTL (1 YTL).
Accordingly, currency of the Republic of Turkey is simplified by removing six zeroes from the TL.
110
All references made to Turkish lira or Lira in laws, other legislation, administrative transactions, court decisions, legal transactions, negotiable instruments and other
documents that produce legal effects as well as payment and exchange instruments shall be considered to have been made to YTL at the conversion rate indicated as above.
Consequently, effective from 1 January 2005, the YTL replaces the TL as a unit of account in the keeping and presenting of the books, accounts and financial statements.
As stated in the announcement of the Capital Markets Board dated 30 November 2004, financial statements of the period ending 31 December 2004, including the prior
period financial data to be used for comparison purposes, are demonstrated in YTL. Prior period financial statements are presented in YTL currency for comparative purposes
only.
c) Translation of foreign Subsidiaries’ financial statements
Financial statements of the foreign Subsidiaries are maintained in accordance with the laws and regulations in force in the countries in which they are registered, with the
required adjustments and reclassifications reflected for the purpose of fair presentation in accordance with IFRS. The assets and liabilities of foreign Subsidiaries and
associated companies are translated into Turkish lira using the relevant foreign exchange rates prevailing at the period-end. The results of the foreign Subsidiaries and
Associates are translated into Turkish lira using average exchange rate for the period and then restated in accordance with IFRS. Exchange differences arising on
retranslation of the opening net assets of foreign Subsidiaries and Associates arising from using period-end and average exchange rates are included in the shareholders’ equity
as translation reserve.
d) US dollar convenience translation
US dollar ("USD") amounts shown in these consolidated financial statements have been included solely for the convenience of the reader and are translated from New Turkish
lira ("YTL"), as a matter of arithmetic computation only, at the Central Bank of the Republic of Turkey official TL exchange rate of YTL1,3421=USD1,00 for purchases of
USD on 31 December 2004. Thus, US dollar amounts do not form a part of the consolidated financial statements prepared in accordance with International Financial
Reporting Standards as at 31 December 2004. Such translations should not be construed as a representation that the YTL amounts have been or could be converted into USD
at this or any other rate.
NOTE 3 - GROUP ACCOUNTING
(a) These consolidated financial statements include the accounts of the parent company, Do¤an Holding, its Subsidiaries and its Joint Ventures (collectively referred to as the
"Group") on the basis set out in sections (a) to (e) below. The financial statements of the companies included in the consolidation are based on the accounting principles
and presentation basis applied by the Group in accordance with IFRS.
(b) Subsidiaries are companies in which Do¤an Holding has the power to control the financial and operating policies for the benefit of Do¤an Holding either (a) through the
power to exercise more than 50% of voting rights relating to shares in the companies as a result of shares owned directly and indirectly by itself and/or by certain Do¤an
family members and companies whereby Do¤an Holding exercises control over the voting rights of (but does not have the economic benefit of) the shares held by them; or
(b) although not having the power to exercise more than 50% of the voting rights, through the exercise of actual dominant influence over the financial and operating
policies. Proportion of ownership interest represents the effective shareholding of the Group through the shares held directly by Do¤an Holding and indirectly by its
Subsidiaries.
The table below sets out all Subsidiaries included in the scope of consolidation and shows their shareholding structure at 31 December 2004 and 2003:
Company name
D›flbank
D›fl Faktoring
D›fl Leasing
D›fl Yat›r›m
D›fl Portföy
D›fl Holding Malta
D›flbank Malta
D›fl Globus
Ray Sigorta
Proportion of
voting power held
by Do¤an Holding and
its Subsidiaries (%)
2004
2003
62,37%
100,00%
100,00%
100,00%
100,00%
100,00%
100,00%
99,93%
67,32%
62,37%
100,00%
100,00%
100,00%
100,00%
100,00%
100,00%
100,00%
67,32%
Proportion of
voting power held
by Do¤an family
members (%)
2004
2003
4,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
4,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
Total
proportion of
voting
power held (%)
2004
2003
66,37%
100,00%
100,00%
100,00%
100,00%
100,00%
100,00%
99,93%
67,32%
66,37%
100,00%
100,00%
100,00%
100,00%
100,00%
100,00%
100,00%
67,32%
Total
proportion of
ownership
interest (%)
2004
2003
62,37%
61,35%
62,36%
62,37%
62,37%
62,37%
62,37%
62,33%
41,99%
62,37%
61,31%
62,36%
62,37%
62,37%
62,37%
62,37%
62,37%
41,99%
Proportion of
voting power held
2004
2003
Company name
Do¤an Emeklilik
D›fl Holding B.V.
Do¤an Faktoring
Hürriyet
Do¤an Gazetecilik
Yaysat
DYG ‹lan
Do¤an Ofset
Do¤an Kitapç›l›k
Do¤an Haber
Do¤an Bas›m
Milliyet Haber
GPS Film(3)
Do¤an Prodüksiyon
ANS
Do¤an Online
Do¤an Media
D Finans
DMC
D Market
Hürriyet Zweigniderlassung
Do¤an Daily News
Do¤an Da¤›t›m
Milliyet ‹nternet (4)
Milliyet Verlags
Do¤an Telekom
Kanal D
Do¤an TV
Hürbim
Alp Görsel
Bravo TV
Fun TV
Galaksi Radyo
Hür FM
Ifl›l TV
Kanalspor
Milenyum TV
D Radyo
Radyo Foreks
Tempo TV
TV 2000
DS Servis
Hürriyet ‹nternet
Egeser
Hürservis
Hürmedya
DMK
Birmafl
Birpa
112
100,00%
100,00%
100,00%
60,00%
79,76%
75,00%
100,00%
99,89%
99,90%
90,61%
100,00%
100,00%
100,00%
63,00%
70,00%
60,00%
97,66%
99,92%
99,17%
89,97%
100,00%
94,25%
100,00%
100,00%
99,03%
96,00%
93,76%
100,00%
99,92%
100,00%
99,60%
99,07%
99,07%
100,00%
99,06%
99,06%
99,94%
99,89%
99,89%
99,06%
99,06%
100,00%
100,00%
100,00%
100,00%
100,00%
99,98%
100,00%
64,94%
100,00%
100,00%
100,00%
66,63%
79,76%
75,00%
100,00%
99,89%
99,90%
89,13%
100,00%
100,00%
100,00%
63,00%
70,00%
59,99%
97,66%
99,92%
99,17%
89,97%
100,00%
94,25%
100,00%
100,00%
99,03%
96,00%
88,86%
100,00%
99,92%
98,75%
99,60%
99,07%
99,07%
95,60%
99,06%
99,06%
99,06%
99,89%
99,89%
99,06%
99,06%
100,00%
100,00%
100,00%
100,00%
100,00%
99,98%
100,00%
64,94%
Proportion of
voting power held
by Do¤an family
members (%)
2004
2003
0,00%
0,00%
0,00%
0,00%
0,67%
0,00%
0,00%
0,00%
0,10%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
40,00%
2,34%
0,08%
0,02%
0,00%
0,00%
0,00%
0,00%
0,00%
0,97%
4,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
35,06%
0,00%
0,00%
0,00%
0,00%
0,67%
0,00%
0,00%
0,00%
0,10%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
40,00%
2,34%
0,08%
0,02%
0,00%
0,00%
0,00%
0,00%
0,00%
0,97%
4,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
35,06%
Total
proportion of
voting
power held (%)
2004
2003
100,00%
100,00%
100,00%
60,00%
80,43%
75,00%
100,00%
99,89%
100,00%
90,61%
100,00%
100,00%
100,00%
63,00%
70,00%
100,00%
100,00%
100,00%
99,19%
89,97%
100,00%
94,25%
100,00%
100,00%
100,00%
100,00%
93,76%
100,00%
99,92%
100,00%
99,60%
99,07%
99,07%
100,00%
99,06%
99,06%
99,94%
99,89%
99,89%
99,06%
99,06%
100,00%
100,00%
100,00%
100,00%
100,00%
99,98%
100,00%
100,00%
100,00%
100,00%
100,00%
66,63%
80,43%
75,00%
100,00%
99,89%
100,00%
89,13%
100,00%
100,00%
100,00%
63,00%
70,00%
99,99%
100,00%
100,00%
99,19%
89,97%
100,00%
94,25%
100,00%
100,00%
100,00%
100,00%
88,86%
100,00%
99,92%
98,75%
99,60%
99,07%
99,07%
95,60%
99,06%
99,06%
99,06%
99,89%
99,89%
99,06%
99,06%
100,00%
100,00%
100,00%
100,00%
100,00%
99,98%
100,00%
100,00%
Total
proportion of
ownership
interest (%)
2004
2003
58,80%
62,37%
65,79%
40,08%
53,28%
43,42%
54,70%
52,07%
53,67%
47,21%
40,08%
59,13%
40,08%
29,36%
46,76%
40,08%
53,50%
40,05%
66,25%
36,06%
40,08%
62,96%
66,79%
54,22%
64,44%
58,48%
62,63%
66,80%
66,75%
66,80%
66,54%
66,18%
66,18%
66,75%
66,18%
66,18%
66,76%
66,73%
66,73%
66,18%
66,18%
40,08%
40,08%
40,08%
40,08%
40,08%
66,79%
66,70%
43,38%
58,80%
62,37%
75,73%
51,17%
57,20%
51,19%
64,16%
62,65%
64,19%
55,84%
51,17%
67,35%
51,16%
35,89%
53,76%
46,07%
63,75%
46,04%
76,16%
41,45%
51,17%
72,38%
76,78%
62,74%
70,73%
66,03%
68,06%
76,80%
76,74%
75,84%
76,49%
76,08%
76,08%
73,42%
76,08%
76,08%
76,08%
76,72%
76,72%
76,08%
76,08%
51,17%
51,17%
51,17%
51,17%
51,17%
76,79%
76,49%
49,87%
Company name
Milpa
Hürriyet Pazarlama
Milanur
Do¤an Oto
Do¤an Havac›l›k
Do¤an Yay›n
Çelik Halat
Ditafl Do¤an
Milta Turizm
Do¤an Karton(4)
D Elektronik(1)
Sat›fl Noktalar›(1)
Do¤an Müzayedecilik(1)
Do¤an D›fl Ticaret(2)
Orta Anadolu Otomotiv(2)
CH Investment B.V (4)
CH UK Limited (4)
Entrallee Handels GmbH (4)
3D Güvenlik (4)
Do¤an Organik
CH Bulgaria
D Tek(4)
‹sedafl
Zigana
Çelik Enerji
Proportion of
voting power held
2004
2003
65,00%
96,14%
99,99%
99,76%
100,00%
66,80%
62,44%
50,94%
95,46%
65,00%
96,00%
67,00%
96,00%
100,00%
85,00%
100,00%
100,00%
95,48%
99,00%
100,00%
100,00%
99,60%
40,00%
65,00%
99,75%
65,00%
93,25%
99,99%
99,65%
100,00%
76,80%
62,44%
55,71%
95,46%
65,00%
100,00%
100,00%
95,48%
98,80%
100,00%
100,00%
99,60%
40,00%
65,00%
99,00%
Proportion of
voting power held
by Do¤an family
members (%)
2004
2003
0,50%
3,86%
0,01%
0,24%
0,00%
3,14%
0,00%
0,00%
2,34%
35,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
4,52%
0,00%
0,00%
0,00%
0,00%
5,00%
4,99%
0,00%
0,50%
6,75%
0,01%
0,35%
0,00%
3,15%
0,00%
0,00%
2,34%
35,00%
0,00%
0,00%
4,52%
0,00%
0,00%
0,00%
0,00%
5,00%
4,99%
0,00%
Total
proportion of
voting
power held (%)
2004
2003
65,50%
100,00%
100,00%
100,00%
100,00%
69,94%
62,44%
50,94%
97,80%
100,00%
96,00%
67,00%
96,00%
100,00%
85,00%
100,00%
100,00%
100,00%
99,00%
100,00%
100,00%
99,60%
45,00%
69,99%
99,75%
65,50%
100,00%
100,00%
100,00%
100,00%
79,95%
62,44%
55,71%
97,80%
100,00%
100,00%
100,00%
100,00%
98,80%
100,00%
100,00%
99,60%
45,00%
69,99%
99,00%
Total
proportion of
ownership
interest (%)
2004
2003
65,00%
38,55%
65,00%
99,76%
82,29%
66,80%
57,53%
50,94%
95,46%
65,00%
38,48%
44,76%
38,48%
66,34%
32,77%
57,53%
57,53%
62,06%
61,75%
99,48%
57,53%
64,74%
40,00%
65,00%
57,49%
65,00%
47,73%
65,00%
99,65%
84,78%
76,80%
58,01%
55,71%
95,36%
65,00%
58,01%
58,01%
62,06%
61,62%
99,54%
52,43%
64,74%
40,00%
65,00%
51,90%
(1) These Subsidiaries of the Group were established in 2004.
(2) These Subsidiaries of the Group were acquired in 2004 (Note 32).
(3) The registered name of Hürriyet TV Film Prodüksiyon A.fi. was changed as GPS Film Prodüksiyon A.fi. in 2004.
(4) These Subsidiaries of Do¤an Holding have been excluded from the scope of consolidation on the grounds of materiality.
The balance sheets and the statements of income of the Subsidiaries are consolidated on a line-by-line basis and the carrying value of the investment held by Do¤an Holding
and its Subsidiaries is eliminated against the related shareholders' equity. Intercompany transactions and balances between Do¤an Holding and its Subsidiaries are eliminated
on consolidation. The cost of, and the dividends arising from, shares held by Do¤an Holding in its Subsidiaries are eliminated from shareholders' equity and income for the
year, respectively.
Subsidiaries are consolidated from the date on which control is transferred to the Group and they are no longer consolidated from the date that control ceases. Accounting
policies for Subsidiaries have been changed to ensure consistency with the policies adopted by the Group, where necessary.
c) Joint Ventures are companies in respect of which there are contractual arrangements through which an economic activity is undertaken subject to joint control by Do¤an
Holding and one or more other parties. Do¤an Holding exercises such joint control through the power to exercise voting rights relating to shares in the companies as a result
of shares owned directly and indirectly by itself and/or by certain Do¤an family members and companies whereby Do¤an Holding exercises control over the voting rights of (but
does not have the economic benefit of) the shares held by them. The Group’s interest in Joint Ventures is accounted for by way of proportionate consolidation. By this method,
the Group includes its share of assets, liabilities, income and expenditure of each Joint Venture in the relevant components of the financial statements.
The table below sets out all Joint Ventures included in the scope of consolidation and shows their shareholding structure at 31 December 2004 and 2003:
Company name
DBR
Do¤an Egmont
Ultra Kablo
Digital Hizmetler
Süper Kanal
CNN Türk
Dergi Pazarlama
Ça¤dafl Pazarlama (*)
POAfi
Proportion of
voting power held
2004
2003
40,72%
50,00%
50,00%
50,00%
49,00%
78,03%
46,00%
50,00%
47,42%
40,72%
50,00%
50,00%
50,00%
49,00%
77,99%
46,00%
50,00%
47,42%
Proportion of
voting power held
by Do¤an family
members (%)
2004
2003
2,02%
0,00%
0,00%
0,00%
0,00%
0,00%
10,00%
0,00%
0,00%
2,02%
0,00%
0,00%
0,00%
0,00%
0,00%
10,00%
0,00%
0,00%
Total
proportion of
voting
power held (%)
2004
2003
42,74%
50,00%
50,00%
50,00%
49,00%
78,03%
56,00%
50,00%
47,42%
42,74%
50,00%
50,00%
50,00%
49,00%
77,99%
56,00%
50,00%
47,42%
Total
proportion of
ownership
interest (%)
2004
2003
27,20%
33,40%
33,40%
27,32%
32,73%
52,12%
21,38%
32,54%
47,42%
31,27%
38,40%
38,40%
32,57%
37,63%
59,89%
25,08%
32,59%
47,42%
(*) This Joint Venture of Do¤an Holding was established in 2003 and has been excluded from the scope of consolidation on the grounds of materiality.
d) Available-for-sale equity investments in which the Group, together with Do¤an family members, has an interest below 20%, or above 20% over which the Holding does not
exercise a significant influence, or which are immaterial and that do not have quoted market price in active markets and whose fair values cannot be measured reliably, are
carried at cost and restated to the equivalent purchasing power at 31 December 2004 less any provision for diminution in value (Note 7).
Available-for-sale equity investments in which the Group, together with Do¤an family members, has an interest below 20% or over which the Holding does not exercise a
significant influence and that have quoted market prices in active markets and whose fair values can be measured reliably are carried at fair value.
e) Results of Subsidiaries are included or excluded from their effective dates of acquisition and disposal, respectively.
The minority shareholders' share in the net assets and results for the year for Subsidiaries are separately classified in the consolidated balance sheets and statements of income
as minority interest.
Certain Do¤an family members and companies controlled by them who are shareholders of Do¤an Holding have interests in the share capital of certain Subsidiaries. In the
consolidated financial statements, their interests are treated as minority interest and are not included in the Group's net assets and profits attributable to shareholders of
Do¤an Holding.
NOTE 4 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting policies for Subsidiaries and Joint Ventures have been changed to ensure consistency with the policies adopted by the Group, where necessary. The significant
accounting policies, other than Group accounting which is described in Note 3, followed in the preparation of these consolidated financial statements are summarized below:
A. Related parties
For the purpose of these consolidated financial statements, shareholders, key management personnel and Board members, in each case together with their families and
companies controlled by or affiliated with them and joint ventures are considered and referred to as related parties. A number of transactions are entered into with related
parties in the normal course of business. These transactions have been priced predominantly at market rates (Note 12).
B. Investments
The Group classifies its investments in debt and equity securities as trading, held-to-maturity and available-for-sale.
"Trading investments" are either acquired for generating a profit from short-term fluctuations in price or dealer’s margin, or are securities included in a portfolio in which a
pattern of short-term profit making exists. Trading securities are initially recognized at cost of purchase including the transaction costs. Trading securities are subsequently remeasured at fair value. All related realized and unrealized gains and losses are included in "revenues" for the Subsidiaries in the finance segment and in the "financial income"
for companies in non-finance segments. Dividends received are recognized as dividend income in the consolidated statement of income.
114
Debt securities with fixed maturity, where management has both the intent and the ability to hold to the maturity excluding the financial assets classified as originated loans
and advances to customers, are classified as "held-to-maturity investments". Held-to-maturity investments are initially recognized at cost and subsequently are carried at
amortized cost using the effective yield method.
Investment securities intended to be held for an indefinite period of time, which may be sold in response to needs for liquidity or changes in interest rates, exchange rates or
equity prices, or client’s servicing activity are classified as "available-for-sale". These are included in non-current assets unless management has the intention of holding these
investments for less than 12 months from the balance sheet date, or unless they will need to be sold to raise operating capital, in which case they are included in current
assets. The appropriate classification of investments is determined at the time of the purchase and re-evaluated by management on a regular basis.
Available-for-sale equity investments in which the Group, together with Do¤an family members, has an interest below 20%, or above 20% over which the Holding does not
exercise a significant influence, or which are immaterial and that do not have quoted market price in active markets and whose fair values cannot be measured reliably, are
carried at cost and restated to the equivalent purchasing power at 31 December 2004 less any provision for diminution in value.
All purchases and sales of investments for the finance sector are recognized on the delivery date and for all purchases and sales in the other sectors, on the trade date.
C. Sale and repurchase agreements
Securities sold subject to linked repurchase agreements ("repos") in, the finance segment are retained in the financial statements as investments and a counterparty liability is
included in amounts due to other banks or customer deposits as appropriate (Note 19). The difference between sales and repurchase prices is treated as interest and amortized
over the life of repo agreements using the effective yield method.
Securities purchased under agreements to resell ("reverse repos") are recorded as due from other banks (Note 6). The difference between sales and repurchase prices is treated
as interest and amortized over the life of reverse repo agreements using the effective yield method.
D. Trade receivables and provision for doubtful receivables
Trade receivables that are created by the Group by way of providing goods or services directly to a debtor are carried at amortized cost. Trade receivables that deferred
financial income is netted-off and calculated by discounting amounts that will be collected of trade receivables recorded in the original invoice value in the subsequent periods
using the effective yield method. Short duration receivables with no stated interest rate are measured at original invoice amount unless the effect of imputing interest is
significant (Note 11).
A credit risk provision for trade receivables is established if there is objective evidence that the Group will not be able to collect all amounts due. The amount of the provision
is the difference between the carrying amount and the recoverable amount, being the present value of all cash flows, including amounts recoverable from guarantees and
collateral, discounted based on the original effective interest rate of the originated receivables at inception.
If the amount of the impairment subsequently decreases due to an event occurring after the write-down, the release of the provision is credited to other income.
E. Loans and advances to customers originated by the Group and provisions for loan impairment
Loans originated by the Group by providing money directly to the borrower are categorized as loans originated by the Group and are carried at amortized cost, less any
provision for loan losses.
i) Loans and advances to customers
All loans and advances are recognized when cash is advanced to borrowers.
A credit risk provision for loan impairment is established if there is objective evidence that the Group will not be able to collect all the amounts due. The amount of the
provision for impaired loans and loans under legal follow-up is the difference between the carrying amount and the recoverable amount, being the net present value of expected
cash flows, including amounts recoverable from guarantees and collateral, discounted at the original effective interest rate of loans (Note 9).
The provision for loan impairment also covers losses where there is objective evidence that probable losses are present in components of the loan portfolio at the balance sheet
date. These have been estimated based upon historical patterns of losses in each component, the internal credit risk rating of the borrowers and the current economic climate
in which the borrowers operate. The level of provision is also based on applicable banking regulations.
The movement in provision is charged against the income for the year. When a loan is deemed uncollectible, it is written-off against the related provision for impairment. The
loan is written-off after all the necessary legal proceedings have been completed and the amount of the loan loss is finally determined. Subsequent recoveries are credited to
the income statement if previously written-off.
ii) Debt securities
Debt securities issued by the Undersecretariat of Treasury of Republic of Turkey and originated by the Group at original issuance by transferring the funds directly to the
borrower, are categorized as loans originated by the Group and are carried at amortized cost using the effective yield method, less any provision for impairment.
F. Factoring receivables
Factoring receivables that are created by way of providing money directly to third parties are recorded net of provisions and are carried at amortized cost. The level of the
provision is based on management’s evaluation of the portfolio including such factors as the volume and character of receivables, past pattern of losses and general economic
conditions. The movement in provision made during the year is charged against the income for the year. Receivables that cannot be recovered are written-off and charged
against the provision for losses. These receivables are written-off after all the necessary legal proceedings have been completed and the amount of the loss is finally
determined. Recoveries of amounts previously provided for are treated as a reduction of the charge for provision for factoring receivables for the year (Note 9).
G. Inventories
Inventories are valued at the lower of cost or net realizable value, restated to equivalent purchasing power at 31 December 2004. Cost elements included in inventory are
materials, labour and an appropriate amount of factory overheads. Cost of inventories is determined on the weighted average basis. Net realizable value is the estimate of the
selling price in the ordinary course of business, less the costs of completion and selling expenses (Note 13).
H. Investment properties
Buildings and land held to earn rentals or for capital appreciation or both, rather than for use in the production or supply of goods or services, or for administrative purposes
or sale in the ordinary course of business, are classified as investment property. Investment properties are carried at cost and restated to the equivalent purchasing power at
31 December 2004 less accumulated depreciation. Investment properties (except land) are depreciated on a straight-line basis. Depreciation is calculated on the values of
investment properties, which are restated to the equivalent purchasing power at 31 December 2004 (Note 15). The depreciation periods for investment property, which
approximate the economic useful lives of such assets, are 50 years.
Investment properties are reviewed for impairment losses whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An
impairment loss is recognized for the amount by which the carrying amount of the asset exceeds its recoverable amount, which is the higher of asset net selling price or value
in use.
I. Property, plant and equipment
Property, plant and equipment is carried at cost and restated to the equivalent purchasing power at 31 December 2004 less accumulated depreciation, in these consolidated
financial statements. Property, plant and equipment are depreciated on a straight-line basis. Depreciation is calculated on the values of property, plant and equipment, which
are restated to the equivalent purchasing power at 31 December 2004 (Note 16).
The depreciation periods for property, plant and equipment, which approximate the economic useful lives of such assets, are as follows:
Land improvements
Buildings
Machinery and equipment
Motor vehicles
Furniture and fixtures
Leasehold improvements
Other fixed assets
5 - 50 years
4 - 50 years
3 - 15 years
3 - 10 years
4 - 15 years
3 - 25 years
5 - 50 years
Property, plant and equipment is reviewed for impairment losses whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An
impairment loss is recognized for the amount by which the carrying amount of the asset exceeds its recoverable amount, which is the higher of asset net selling price or value
in use.
Gains or losses on disposals of property, plant and equipment with respect to their restated amounts are included in the related income and expense accounts, as appropriate.
116
J. Leases
i) The Group as the lessee
Financial Lease
Leases of property, plant and equipment, where the Group has substantially all the risks and rewards of ownership, are classified as finance leases. Finance leases are
capitalized at the inception of the lease at the lower of the fair value of the leased property or the present value of the minimum lease payments under "property, plant and
equipment"; payables resulting from the financial lease are recorded at "financial lease obligations". Property, plant and equipment acquired under finance leases is depreciated
over the useful life of the asset. Financial lease obligations are recorded in the consolidated financial statements at the purchase cost of related property, plant and equipment.
Lease payments are treated as comprising capital and interest elements. The capital element is treated as reducing the capitalized obligation under the lease and the interest
element is charged to the statement of income.
Operational Lease
Leases where a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases
(net of any incentives received from the lessor) are charged to the income statement on a straight-line basis over the period of the lease.
ii) The Group as the lessor
Financial Lease
When assets are sold under a finance lease, the present value of the lease payments is recognized as a receivable. The difference between the gross receivable and the present
value of the receivable is recognized as unearned finance income. The lease income, which is the total unearned finance income at the transaction date, is recognized over the
term of the lease using the net investment method, which reflects a constant periodic rate of return.
Operational Lease
Under operational leasing, assets subject to leasing agreements are recorded as property, plant and equipment and the income obtained is charged to the consolidated income
statement in equal portions over the period of the lease. Leasing income (net of any incentives received from the lessee) is charged to the income statement on a straight-line
basis over the period of the lease.
K. Goodwill / Negative goodwill and amortization
Goodwill and negative goodwill arising on consolidation, which represent the difference between the purchase consideration and the attributable share of the Group in the fair
value of the underlying net assets of the company acquired, are capitalised and amortized using the straight-line method over the useful life, until 31 December 2004 if the
acquisition is before 31 March 2004. Within the context of IFRS 3 - "Business Combinations" amortisation accounting is not applied for goodwill related to the acquisitions
after 31 March 2004, and the carrying value of goodwill is reviewed annually and adjusted for permanent impairment where it is considered necessary (Note 17). Negative
goodwill related to the acquisitions after 31 March 2004 is accounted for as income in the related period. In accordance with IFRS 3, goodwill associated with the
transactions before 31 March 2004 will not be amortized starting from the beginning of the first annual period beginning on or after 31 March 2004 (1 January 2005) and it
will be reviewed annually for impairment.
L. Intangible assets
Intangible assets other than goodwill comprise of acquired intellectual property, trademarks and other identified rights. They are recorded at acquisition cost and restated to
the equivalent purchasing power at 31 December 2004 and amortized on a straight-line basis over their estimated economic lives of 5 to 20 years from date of acquisition and
recorded in "other operating expenses" in the consolidated statement of income. The right of marina usage held by the Subsidiary, Milta Turizm, is amortized in 49 years in
accordance with the agreement signed with Privatization Administration (Note 17).
Programme rights are initially recognized at acquisition cost or production cost when the Group controls, in substance, the respective assets and the risks and rewards
attached to them (Note 17).
Programme rights include both in-house productions and co-productions, whether in progress or scheduled for transmission and are stated at the lower of cost and net
realizable value. Consumption is based on the expected number of transmissions over the life of the contract, in order to balance the cost of consumption with the benefits
received. The rates of consumption applied for broadcasting rights are the following:
-
Soap operas, in-house productions, domestic series, game shows, music shows, children’s programmes, sport programmes and other events and documentaries are fully
consumed upon the first transmission and the current period charge is included as cost of sales in the consolidated statement of income.
-
Foreign movies, foreign series and domestic films are recognized at the acquisition cost of the broadcasting right and they are amortized upon the number of
transmissions over the life of the contract.
Intangible assets are reviewed for impairment losses whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment
loss is recognized for the amount by which the carrying amount of the asset exceeds its recoverable amount, which is the higher of asset net selling price or value in use.
M. Programme stocks
Programme stocks involve internal/external productions that have been produced but not yet broadcasted. Current programme stocks are recognized at acquisition or
production cost and restated to the equivalent purchasing power at 31 December 2004 and are not subject to amortization. These programmes are fully amortized upon the
first transmission and charged as cost of sales in the consolidated statement of income (Note 14).
N. Deferred income taxes
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts
in the financial statements. Currently enacted tax rates are used to determine deferred income tax.
The principal temporary differences arise from the differences between the carrying amount and the tax bases of property, plant and equipment, intangible assets, inventory
and leasing receivables, provision for employment termination benefits and tax losses carried forward.
Deferred tax liabilities are recognized for all taxable temporary differences, where deferred tax assets resulting from deductible temporary differences are recognized to the
extent that it is probable that future taxable profit will be available against which the deductible temporary difference can be utilized.
Deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxation authority and deferred tax assets and liabilities are offset accordingly (Note 24).
O. Provisions
Provisions are recognized when the Group has a present legal or constructive obligation or a result of past events, it is probable that on outflow of resources embodying
economic benefits will be required to settle the obligation, and a reliable estimate of the amount of the obligation can be made.
P. Borrowings
Borrowings are recognized initially at proceeds received, net of transaction costs incurred. Bank borrowings are subsequently stated at amortized cost using the effective yield
method; any difference between the proceeds and redemption value is recognized in the consolidated statement of income over the period of the borrowings.
R. Eurobonds
Eurobonds are recognized initially at fair value, being their issue proceeds net of transaction costs incurred. Eurobonds are subsequently stated at amortized cost using the
effective yield method; any difference between the proceeds and redemption value is recognized in the consolidated income statement over the period of the Eurobonds.
S. Murabaha syndication
Murabaha syndication, a type of stock purchase on a term basis, is recognized initially at proceeds received, net of transaction costs incurred. Bank borrowings are
subsequently stated at amortized cost using the effective yield method; any difference between the proceeds and redemption value is recognized in the consolidated income
statement over the period of the Murabaha syndication.
118
T. Insurance reserves
Life assurance provision
The Subsidiaries dealing in life assurance are required to establish benefit reserves which on aggregate must be sufficient to provide for future guaranteed benefits as they
become due. The life assurance provision is based on the level of premiums (as adjusted by commission), and administrative expenses and risk premiums that are computed on
the basis of worldwide actuarial mortality assumptions applicable for Turkish insurance companies as approved by the Insurance Supervisory Office. The life assurance
provision also takes account of the net rate of return on investments. These provisions are accounted for in the consolidated financial statements based on the approved tariffs.
Life mathematical reserves are calculated on the life policies in force at period-end and life profit share reserves are calculated for the collections made from the life insurance
policies in the period. Subsidiaries allocate the income generated from the life policies with a saving clause, based on the number of funds and income from the funds.
Claims and claim provisions
The claims provision is the total estimated ultimate cost of settling all claims arising from events which have occurred up to the end of the accounting period. Claims provision
is determined in accordance with expert reporting or first evaluation of insure and experts.
Incurred but not reported claims (IBNR) are also provided for under claim provisions.
Unearned premiums reserve
Unearned premiums set aside to provide for the period of risk extending beyond the date of the balance sheets, calculated on accrued premium on a daily basis for the policies
in force.
U. Employment termination benefits
Employment termination benefits represent the present value of the estimated total reserve of the future probable obligation of the Group arising from the retirement of the
employees calculated in accordance with the Turkish Labour Law and Press Labour Laws for the companies in the media segment (Note 25).
V. Share capital and dividends
Ordinary shares are classified as equity. Pro-rata capital increases to existing shareholders are accounted for at par value as approved. Dividends on ordinary shares are
recognized in equity in the period in which they are declared.
Y. Revenue recognition
Finance
Banking
Interest income and expenses are recognized in the income statement on an accrual basis. When loans and advances to customers are considered doubtful of collection by
management, they are written down to their recoverable amount, and interest income is thereafter recognized based at the rate of interest that was used to discount the future
cash flows for the purpose of measuring the recoverable amount. Interest income includes coupons earned on fixed income investment securities and amortized discount and
premium on treasury bills and government bonds.
Fee and commission income and expenses on banking services are recorded as income or expense at the time of affecting the transactions to which they relate.
Insurance
Life insurance:
Premium income represents premiums on policies written during the year, net of cancellations for the life, health and personal accident branches.
Non-life insurance:
Premium income represents premiums on policies written during the year, net of cancellations.
Non-finance
Revenues are recognized on an accrual basis at the time deliveries or acceptances are made, the amount of the revenue can be measured reliably and it is probable that the
economic benefits associated with the transaction will flow to the Group, at the fair value of consideration received or receivable. Net sales represent the invoiced value of
goods shipped less sales returns and commission, excluding sales taxes. When the arrangement effectively constitutes a financing transaction, the fair value of the
consideration is determined by discounting all future receipts using an imputed rate of interest. The difference between the fair value and the nominal amount of the
consideration is recognized as interest income on a time proportion basis that takes into account the effective yield on the asset.
Z. Research and development costs
Research and development costs are recognized as an expense in the consolidated statement of income in the period in which they are incurred.
i. Borrowing costs
Borrowing costs are charged to the consolidated statement of income as they are incurred and recognized initially at the proceeds received, net of transaction costs incurred.
In subsequent periods, borrowings are stated at amortized cost using the effective yield method; any difference between proceeds (net of transaction costs) and the redemption
value is recognized in the consolidated statement of income over the period of the borrowings.
ii. Barter agreements
When goods or services are exchanged or swapped for goods or services which are of a similar nature and value, the exchange is not regarded as a transaction which generates
revenue. When goods are sold or services are rendered in exchange for dissimilar goods or services, the exchange is regarded as a transaction which generates revenue. The
revenue is measured at the fair value of the goods or services received, adjusted by the amount of any cash or cash equivalents transferred.
iii. Cash and cash equivalents
Cash and cash equivalents include cash and amounts due from banks, and highly liquid investments with maturity periods of less than three months.
iv. Derivative financial instruments
Derivative financial instruments, including forward foreign exchange contracts, currency and interest rate swap instruments and other derivative financial instruments are
initially recognized in the balance sheet at cost (including transaction costs) and subsequently are remeasured at their fair value. All derivative financial instruments are
classified as held-for-trading. Certain derivative transactions, while providing effective economic hedges under the Group’s risk management position, do not qualify for hedge
accounting under the specific rules in IAS 39 and are therefore treated as derivatives held-for-trading with fair value gains and losses reported in the consolidated statement
of income. Fair values are obtained from quoted market prices and discounted cash flow models as appropriate. Fair values of over-the-counter forward foreign exchange
contracts are determined based on the comparison of the original forward rate with the forward rate calculated by reference to market interest rates of the related currency
for the remaining period of the contract, discounted to 31 December. All derivatives are carried as assets when the fair value is positive and as liabilities when the fair value is
negative.
Forward foreign exchange contracts and currency swap contracts are valued at quoted market prices or discounted cash flow models as appropriate. Derivatives are carried as
assets when the fair value is positive and as liabilities when the fair value is negative.
Changes in the fair value of derivatives held-for-trading are included in net trading income.
v. Financial instruments and financial risk management
The Group's activities expose it to a variety of financial risks, including the effects of changes in debt and equity market prices, foreign currency exchange rates and interest
rates. The Group's overall risk management programme focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the financial
performance of the Group.
Risk management is carried out by individual Subsidiaries and Joint Ventures under policies approved by their Board of Directors.
120
Currency risk
Foreign currency denominated assets and liabilities, together with purchase and sale commitments, give rise to foreign exchange exposures.
Finance
Market volatility is closely monitored and by preparing scenario analysis, the probable loss which is likely to occur at the time of the realization of the worst scenario is
forecasted. Daily currency movements and their impact on the current position are evaluated and presented to the management. Trading portfolio limits are determined on
daily basis. Both the daily Value at Risk ("VaR") reports, and scenario analysis performed at certain periods are used to assess the risks faced. Foreign currency risk is
assessed within this framework and monitored for breaches of the pre-determined limits.
Non-finance
The Group is exposed to foreign exchange risk through the impact of rate changes in the translation of foreign currency denominated liabilities to local currency. These risks
are monitored and limited by the analysis of the foreign currency position.
Interest rate risk
The Group is exposed to interest rate risk through the impact of rate changes on interest bearing liabilities and assets.
Finance
These exposures are managed on a portfolio basis by using natural hedges that arise from offsetting interest rate sensitive assets and liabilities. Special emphasis is given to
providing a balance between the duration of assets and liabilities. Duration, gap and sensitivity analyses are the main methods used to manage the risks. Furthermore, various
simulation techniques are employed in order to analyse the effects of market volatilities.
Non-finance
These exposures are managed by using natural hedges that arise from offsetting interest rate sensitive assets and liabilities.
Funding risk
Finance
To minimize this risk, cash flows on specific dates are identified. Hence, the risk is determined and precautions are held. Therefore, periodic gap reports and flows in
maturities are used as a reference to keep the specified liquidity risks within a pre-specified range.
Non-finance
The ability to fund the existing and prospective debt requirements is managed by maintaining the availability of adequate committed funding lines from high quality lenders.
Credit risk
Ownership of financial assets involves the risk that counterparties may be unable to meet the terms of their agreements.
Finance
Customers’ financial structure, morality, credit reports, credit needs, Bank’s lending policies and economic conjuncture are taken into consideration in credit limit allocation.
The loans extended to debtor companies and Groups are monitored on a weekly basis based on the following dimensions: New Turkish lira/Foreign Currency; Cash/Non-cash;
Line of Business (corporate, commercial, SME, Consumer); Financial (Banks and Subsidiaries)/Non-financial; sector; maturity; rating; concentration; and loan type.
Non-finance
These risks are monitored by limiting the aggregate risk to any individual counterparty. The credit risk is generally highly diversified due to the large number of entities
comprising the customer bases.
Fair value of financial instruments
Fair value is the amount at which a financial instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation, and is
best evidenced by a quoted market price, if one exists.
The estimated fair values of financial instruments have been determined by the Group, using available market information and appropriate valuation methodologies. However,
judgement is necessarily required to interpret market data to estimate the fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts
the Group could realise in a current market exchange.
The following methods and assumptions are used in the estimation of the fair value of the financial instruments for which it is practicable to estimate fair value:
Monetary assets
The fair values of balances denominated in foreign currencies, which are translated at year-end exchange rates, are considered to approximate carrying value.
The fair values of certain financial assets carried at cost, including cash and cash equivalents are considered to approximate their respective carrying values due to their shortterm nature.
Originated loans are carried at amortized cost, less any provision for loan losses. The fair values of originated loans are considered to approximate their amortized cost
calculated based on the market interest rates.
The carrying values of trade receivables along with the related allowances for uncollectibility are estimated to be their fair values.
The values of trading securities, available-for-sale securities and held-to-maturity securities, which have been determined by reference to market value, are considered to
approximate fair values.
Monetary liabilities
The fair value of customer deposits, funds borrowed and other monetary liabilities are considered to approximate their respective carrying values due to their short-term
nature.
Long-term borrowings which, in principle, are at variable rates and denominated in foreign currencies are translated at year-end exchange rates; accordingly their carrying
values approximate their fair values.
vi. Earnings per share
Earnings per share disclosed in the consolidated statement of income are determined by dividing net income by the weighted average number of shares outstanding during the
year concerned.
In Turkey, companies can increase their share capital by making a pro-rata distribution of shares ("bonus shares") to existing shareholders from retained earnings. For the
purpose of earnings per share computations, the weighted average number of shares in existence during the year has been adjusted in respect of bonus share issued without a
corresponding change in resources, by giving them retroactive effect for the year in which they were issued and each earlier year, as if the event had occurred at the beginning
of the earliest period reported.
Net income
Weighted average number of shares with face value of YTL1 each
Earnings per share (YTL)
There was no difference between basic and diluted earnings per share for any class of shares in any of the periods.
122
2004
2003
239.285.805
735.288.208
0,33
436.380.361
644.875.292
0,68
vii. Comparatives
Comparative figures are reclassified, where necessary, to conform to changes in presentation in the current year so that the reclassification will result in a more appropriate
presentation of events or transactions.
viii. Offsetting
Financial assets and liabilities are offset and the net amount reported in the consolidated balance sheet when there is a legally enforceable right to set-off the recognized
amounts and there is an intention to settle on a net basis, or realise the asset and settle the liability simultaneously.
NOTE 5 - SEGMENTAL INFORMATION
a) External Revenues
Finance
Media
Energy
Other
2004
2003
1.228.716.104
1.297.947.003
4.912.893.972
268.898.437
1.342.544.851
1.057.079.590
4.519.295.292
170.334.501
7.708.455.516
7.089.254.234
2004
2003
77.450.324
90.448.145
106.996.635
51.936.436
366.524.532
8.329.841
110.877.920
(104.353.094)
326.831.540
381.379.199
b) Operating profit/(loss)
Finance
Media
Energy
Other
c) Segmental analysis for the year ended at 31 December 2004
Finance
Media
Energy
Other
Inter
Segment
Elimination
External revenues
Intra segment revenues
Inter segment revenues
1.228.716.104
40.527.040
13.659.585
1.297.947.003
668.282.174
12.178.125
4.912.893.972
2.263.888
268.898.437
27.954.373
231.463.999
-
7.708.455.516
736.763.587
259.565.597
Combined revenues
1.282.902.729
1.978.407.302
4.915.157.860
528.316.809
-
8.704.784.700
Combined cost of sales
(683.945.204)
(1.566.442.617)
(4.645.700.153)
(454.366.063)
-
(7.350.454.037)
Revenues
Cost of sales
1.242.375.689
(643.418.164)
1.310.125.128
(987.701.365)
4.915.157.860
(4.645.700.153)
500.362.436 (259.565.597)
(429.291.039) 226.010.835
7.708.455.516
(6.480.099.886)
Gross profit
598.957.525
322.423.763
269.457.707
71.071.397
(33.554.762)
1.228.355.630
(442.196.398)
(103.952.848)
(215.794.608)
(37.768.602)
(114.816.037)
(47.654.478)
(70.484.563)
87.837.051
47.086.250
(3.779.857)
(796.205.356)
(105.318.734)
Operating profit before inter segment elimination
52.808.279
68.860.553
106.987.192
88.423.885
9.751.631
326.831.540
Profit elimination due to inter segment elimination
24.642.045
21.587.592
9.443
(36.487.449)
(9.751.631)
-
Operating profit after inter segment elimination
77.450.324
90.448.145
106.996.635
51.936.436
-
326.831.540
Total
Selling, distribution and administrative expenses
Other operating expenses - net
Total
c) Segmental analysis for the year ended at 31 December 2003
Finance
Media
Energy
Other
Inter
Segment
Elimination
External revenues
Intra segment revenues
Inter segment revenues
1.342.544.851
16.362.309
35.139.866
1.057.079.590
518.399.860
11.378.155
4.519.295.292
806.555
170.334.501
2.475.807
30.765.058
-
7.089.254.234
537.237.976
78.089.634
Combined revenues
1.394.047.026
1.586.857.605
4.520.101.847
203.575.366
-
7.704.581.844
Combined cost of sales
(632.470.747)
(1.275.729.576)
(4.266.636.069)
(158.566.890)
-
(6.333.403.282)
Revenues
Cost of sales
1.377.684.717
(620.160.012)
1.068.457.745
(812.303.976)
4.520.101.847
(4.266.636.068)
201.099.559
(157.312.521)
(78.089.634)
55.420.290
7.089.254.234
(5.800.992.287)
Gross profit
757.524.705
256.153.769
253.465.779
43.787.038
(22.669.344)
1.288.261.947
(383.274.153)
(23.418.102)
(191.533.450)
(63.466.940)
(100.475.478)
(43.165.140)
(63.750.316)
(61.858.620)
25.885.601
(1.826.150)
(713.147.796)
(193.734.952)
350.832.450
1.153.379
109.825.161
(81.821.898)
1.390.107
381.379.199
15.692.082
7.176.462
1.052.759
(22.531.196)
(1.390.107)
-
366.524.532
8.329.841
110.877.920
(104.353.094)
-
381.379.199
Selling, distribution and administrative expenses
Other operating expenses - net
Operating profit/(loss) before inter segment elimination
Profit elimination due to inter segment elimination
Operating profit/(loss) after inter segment elimination
124
d) Segment assets employed
2004
2003
8.721.689.122
1.933.025.436
2.067.885.354
4.186.564.241
7.294.061.798
1.815.141.377
2.090.586.041
4.071.536.292
Total combined
16.909.164.153
15.271.325.508
Less: segment elimination
(5.160.340.290)
(4.840.632.099)
Total assets as per these consolidated financial statements
11.748.823.863
10.430.693.409
Finance
Media
Energy
Other
1.377.164.474
1.325.128.384
952.384.982
3.531.037.583
1.435.737.478
1.209.521.060
835.934.714
3.082.172.347
Total combined
7.185.715.423
6.563.365.599
(5.214.645.168)
(4.812.831.853)
1.971.070.255
1.750.533.746
974.366.277
855.885.436
2.945.436.532
2.606.419.182
Total assets
Finance
Media
Energy
Other
Net assets
Less: segment elimination
Shareholders' equity
Minority interest
Total net assets as per these consolidated financial statements
e) Capital expenditures for property, plant and equipment, intangible assets and investment properties and depreciation and amortization charge
2004
2003
73.952.330
94.479.677
34.800.996
19.762.877
63.113.705
87.943.594
44.786.847
56.696.348
222.995.880
252.540.494
Finance
Media
Energy
Other
67.226.224
103.244.750
34.726.560
17.007.333
83.157.658
125.140.846
27.278.519
29.718.526
Total
222.204.867
265.295.549
Capital expenditures
Finance
Media
Energy
Other
Total
Depreciation and amortization charge
Goodwill and amortization of goodwill have not been included in capital expenditures and depreciation charge.
f) Interest in Joint Ventures
Aggregate amounts of current assets, non-current assets, current liabilities, non-current liabilities and net income related to Joint Ventures, which are proportionately
consolidated as explained under Note 3.c in these consolidated financial statements, are as follows on a combined basis:
2004
2003
Current assets
Non-current assets
637.047.452
1.496.470.032
528.245.638
1.634.239.557
Total assets
2.133.517.484
2.162.485.195
752.640.115
399.046.535
981.830.834
694.073.612
594.165.590
874.245.993
2.133.517.484
2.162.485.195
2004
2003
4.978.393.352
283.959.975
110.271.941
4.584.274.706
269.580.806
68.920.381
Current liabilities
Non-current liabilities
Shareholders’ equity
Total liabilities and shareholders' equity
Revenues
Gross profit
Net income
g) Minority interest
Do¤an family
2004
Other
Total
Do¤an family
2003
Other
Total
23.247.804
5.928.565
51.229.794
424.674.507
348.597.224
570.414
120.117.969
447.922.311
354.525.789
570.414
171.347.763
26.737.096
8.781.663
49.308.467
366.087.350
373.691.753
1.003.765
30.275.342
392.824.446
382.473.416
1.003.765
79.583.809
80.406.163
893.960.114
974.366.277
84.827.226
771.058.210
855.885.436
2004
2003
1 January
Translation reserve
Increase in share capital
Disposal of Subsidiaries
Payment of dividends
Increase in minority interest due to additional Subsidiaries
Other movements
Net income
855.885.436
(11.250.564)
16.528.616
108.520.360
(26.662.757)
1.568.765
(5.371.087)
35.147.508
725.199.732
(14.589.607)
3.685.068
(19.662.340)
(398.747)
24.187.721
(1.576.691)
139.040.300
31 December
974.366.277
855.885.436
Media
Finance
Energy
Other
Changes in minority interest during 2004 and 2003 are as follows:
126
h) Non-cash expenses
Significant non-cash expenses included in segment results are as follows:
Amortization of goodwill
Provision for loan losses
Interest expense accrual
Impairment of property, plant and equipment
Impairment of intangible assets
Impairment of investment property
Provision for doubtful receivables
Provision for lawsuits
Provision for non-cash loan losses
Provision for impairment of programme stocks
Provision for net realizable value
Amortization of goodwill
Provision for loan losses
Interest expense accrual
Impairment of intangible assets
Impairment of investment property
Provision for non-cash loan losses
Finance
Media
2004
Energy
Other
Total
77.808.651
94.331.000
13.000.000
7.911.241
6.467.000
5.719.000
-
19.539.013
3.753.104
4.090.729
1.950.966
4.636.958
4.620.717
6.750.082
737.784
137.968
69.248.276
9.758.057
2.053.082
5.604.951
-
7.909.610
689.393
1.859.619
707.752
9.701.122
45.788
794.413
88.787.289
77.808.651
115.751.771
13.689.393
5.950.348
1.950.966
15.309.033
19.926.790
13.262.870
5.719.000
737.784
932.381
205.236.892
46.217.321
86.664.366
21.707.697
359.826.276
Finance
Media
2003
Energy
Other
Total
15.681.969
62.496.012
2.963.061
1.047.000
7.266.000
-
18.820.436
4.166.757
18.758.791
4.142.061
6.658.536
2.002.000
1.411.228
69.248.276
23.560.000
1.945.631
-
11.429.041
24.256.801
733.676
5.122.810
760.108
88.068.712
15.681.969
101.651.810
24.256.801
18.758.791
9.784.429
11.781.346
3.049.000
7.266.000
2.171.336
89.454.042
55.959.809
94.753.907
42.302.436
282.470.194
NOTE 6 - CASH AND CASH EQUIVALENTS
The breakdown of cash and cash equivalents at 31 December 2004 and 2003 are as follows:
Cash
Banks
- demand deposits
- time deposits
- blocked bank accounts
- reverse repurchase agreements
Placements with banks
Interbank money market placements
Finance
2004
Other
Total
Finance
2003
Other
Total
60.721.480
1.056.876
61.778.356
58.021.985
1.346.618
59.368.603
4.760.576
9.537.088
216.346.872
13.230.000
513.184.598
-
17.322.062
184.908.119
2.002.289
2.543.490
-
22.082.638
194.445.207
218.349.161
15.773.490
513.184.598
-
15.925.727
73.517.815
51.378.453
6.724.540
90.039.617
610.642.042
39.476.111
136.799.532
17.682.037
6.915.263
-
55.401.838
210.317.347
69.060.490
13.639.803
90.039.617
610.642.042
817.780.614
207.832.836
1.025.613.450
906.250.179
202.219.561
1.108.469.740
At 31 December 2004, interest rates for local currency time deposits are between 17% and 29% (2003: 23-45%), and interest rates for foreign currency time deposits are
between 1% and 7% (2003: 0,25-8%). At 31 December 2004, the amount of reverse repurchase agreements is YTL15.773.490 (2003: YTL13.639.803). These are all shortterm with periods of less than three months with interest rates between 18% and 25% (2003: 15-26%).
At 31 December 2004 interest rates for placements with other banks ranged between 21% and 24% for local currency placements (2003: 26-27%), and 2% and 7% (2003:
0,5-3,5%) for foreign currency placements.
At 31 December 2004, there are no interbank money market placements in local currency or denominated in foreign currency (2003: At 31 December 2003, interest rate for
interbank money market placements ranged between 26% and 27% for local currency and between 0,5% and 7,5% for foreign currency).
As of 31 December 2004, Subsidiaries in the finance segment pledged placements amounting to YTL209.250.000 (2003: YTL47.881.203) against credit default swaps
entered into between the Subsidiaries in the finance segment and Citigroup Global Markets Limited, Lehman Brothers International, Barclays London, Merrill Lynch and
Commerzbank Frankfurt maturing between 1 July 2005 and 13 October 2009.
At 31 December 2004, YTL2.002.289 (2003: YTL17.682.037) of the deposits have been provided to collateralise the bank borrowings obtained by the Group and the related
parties.
At 31 December 2004, Subsidiaries in the insurance segment have deposit investments amounting to YTL7.096.872 (2003: YTL3.497.250) in a blocked account with a state
bank in favour of the Undersecretariat of Treasury as required by Insurance Supervisory Law No: 7397.
Cash and cash equivalents included in the consolidated statements of cash flows for the year ended
31 December 2004 and 2003 are as follows:
Cash and amounts due from banks (excluding accrued interest)
2004
2003
2002
737.720.975
1.034.448.437
1.990.707.709
NOTE 7 - INVESTMENTS
a) Trading Securities
The breakdown of trading securities at 31 December 2004 and 2003 is as follows:
Government bonds
Treasury bills
Corporate bonds
Equity stocks
Eurobonds
Other
Finance
2004
Other
Total
Finance
2003
Other
Total
230.894.736
83.016.333
2.154.402
1.514.069
39.970.938
7.757.551
25.092.672
31.470.388
6.470.157
2.769.948
-
255.987.408
114.486.721
2.154.402
7.984.226
42.740.886
7.757.551
509.420.244
39.292.272
15.402.655
1.846.332
111.164
59.184
23.985.948
20.897.517
3.012.241
-
509.479.428
63.278.220
15.402.655
22.743.849
3.012.241
111.164
365.308.029
65.803.165
431.111.194
566.072.667
47.954.890
614.027.557
The Group holds trading securities amounting to YTL336.697.308 in local currency (2003: YTL521.361.370) and YTL94.413.886 in foreign currency (2003:
YTL92.666.187).
There are no blocked trading securities held by the Group in the non-finance segment at 31 December 2004 (2003: YTL25.480.839).
At 31 December 2004, there are no corporate bonds held by the Subsidiaries in the finance segment pledged against a Credit Default Swap (2003: YTL15.402.655).
Treasury bills amounting to YTL278.000 are pledged for operational requirements in IMKB Takas ve Saklama Bankas›.
At 31 December 2004, included in trading securities pledged under repurchase agreements with customers are discounted government bonds denominated in local currency
amounting to YTL15.566.000 (2003: YTL193.243.799) and listed equity shares of the Bank's major shareholder, Do¤an Holding, amounting to YTL429.000.
At 31 December 2004, the net unrealised gain on trading securities amounted to YTL6.253.000 (2003: YTL72.513.068).
128
The interest rates for treasury bills and government bonds held at 31 December 2004 for local currency are between 17% and 29% (2003: 22-36%), and for foreign currency
between 3% and 11% (2003: 4-11%).
Equity stocks of the Subsidiaries and Joint Ventures held by the Group classified under trading securities at 31 December 2004 and 2003 are as follows:
POAfi
D›flbank
Ray Sigorta
Do¤an Yay›n
Do¤an Gazetecilik
DBR
Hürriyet
2004
2003
3.860.174
3.219.383
136.030
-
4.133.423
1.542.533
131.121
4.092.362
1.731.510
790.051
8.199.913
7.215.587
20.620.913
b) Securities available-for-sale:
Debt Securities:
Government bonds
Eurobonds
Treasury bills
U.S. Government bonds
Corporate bonds
Other
Finance
2004
Other
Total
Finance
2003
Other
Total
930.372.051
263.157.441
155.919.117
53.121.883
1.195.601
-
930.372.051
263.157.441
155.919.117
53.121.883
1.195.601
866.146.766
597.358.420
25.715.371
48.132.790
2.195.978
-
866.146.766
597.358.420
25.715.371
48.132.790
2.195.978
1.403.766.093
-
1.403.766.093
1.539.549.325
-
1.539.549.325
Finance
2004
Other
Total
Finance
2003
Other
Total
8.738.880
6.502.075
4.288.701
8.738.880
10.790.776
5.347.658
6.916.646
5.323.943
5.347.658
12.240.589
15.240.955
4.288.701
19.529.656
12.264.304
5.323.943
17.588.247
1.419.007.048
4.288.701
1.423.295.749
1.551.813.629
5.323.943
1.557.137.572
Equity securities:
Listed
Unlisted
Total securities available-for-sale
Debt securities are comprised of discount and coupon government bonds, treasury bills and Eurobonds issued by the Undersecretariat of Treasury of the Republic of Turkey.
Interest rates for treasury bills and government bonds held at 31 December 2004 vary between 20% and 28% (2003: 25-36%) for local currency securities, and between 5%
and 11% for foreign currency securities and Eurobonds (2003: 8-12%).
At 31 December 2004, investment securities available-for-sale amounting to YTL23.318.000 (2003: YTL20.936.639) have been pledged by a government bank in favour of
the Undersecretariat of the Treasury for the legal requirements of the Group’s insurance companies.
At 31 December 2004, the net unrealised gain on investment securities available-for-sale amounts to YTL153.787.000 (2003: YTL194.904.728).
Equity stocks classified under securities available-for-sale at 31 December 2004 and 2003 are as follows:
2004
Name of the company
Listed:
Türkiye S›nai Kalk›nma Bankas› A.fi ("TSKB")
Anadolu Hayat Sigorta A.fi.
2003
YTL
%
YTL
%
4.778.880
3.960.000
3
1
3.635.541
1.712.117
3
1
8.738.880
Unlisted:
‹MKB Takas Bank A.fi.
Aks Televizyon Reklamc›l›k ve Filmcilik Sanayi ve Ticaret A.fi.
Çelik Enerji
Cam Elyaf Sanayi A.fi.
D Tek Bilgi ve ‹letiflim ‹fllemleri A.fi. (*)
Bankalararas› Kredi Kartlar› Merkezi
Other
5.347.658
3.811.881
2.922.593
1.965.400
528.592
724.794
837.516
2
9
1
100
2
-
3.811.881
2.922.593
559.519
1.965.400
1.596.833
724.794
659.569
10.790.776
12.240.589
19.529.656
17.588.247
2
9
99
1
100
2
-
(*) This Subsidiary of Do¤an Holding has not been consolidated due to grounds of materiality.
Available-for-sale equity investments that do not have a quoted market value and whose fair values can not be reliably measured are stated at their restated costs less any
impairment.
For the listed equity investments, TSKB and Anadolu Hayat Sigorta A.fi., fair value is determined by reference to the Istanbul Stock Exchange quoted bid price at 31
December 2004.
c) Securities held-to-maturity:
The breakdown of securities held-to-maturity at 31 December 2004 and 2003 is as follows:
Government bonds
Treasury bills
Eurobonds
Corporate bonds
Finance
2004
Other
Total
Finance
2003
Other
Total
452.884.919
9.923.054
157.362.285
20.529.823
-
452.884.919
9.923.054
157.362.285
20.529.823
16.866.749
16.000.928
1.557.580
-
18.424.329
16.000.928
640.700.081
-
640.700.081
32.867.677
1.557.580
34.425.257
At 31 December 2004, investment securities held-to-maturity amounting to YTL17.539.848 (2003: YTL14.770.771) have been pledged by a government bank in favour of
the Undersecretariat of the Treasury for the legal requirements of the Group’s insurance companies.
At 31 December 2004, corporate bonds of Subsidiaries in the finance segment with a carrying value of YTL66.635.000 consists of bonds issued by Lehman Brothers
International and Citigroup Global Markets Limited maturing between 2006 and 2009 and pledged against credit default swap transactions (2003: YTL16.000.928).
At 31 December 2004, YTL433.061.000 (2003: YTL108.754.000) of local currency government bonds and treasury bills of investment securities have been pledged under
repurchase agreements with customers by the Group.
130
Included in Eurobonds are YTL26.815.000 of Eurobonds issued by the Ministry of Finance of the Russian Federation pledged against a total return swap transaction between
the Group and foreign bank maturing in 2009 and subject to a repurchase agreement with the same counterparty of a YTL21.179.000 portion of the Eurobond, with the
maturity date of the swap transaction.
At 31 December 2004, available-for-sale and held-to-maturity investments amounting to YTL375.811.000 (2003: YTL149.297.000) have been pledged to third parties
namely, CBRT for legal requirements and ‹stanbul Menkul K›ymetler Borsas› Takas ve Saklama Bankas› A.fi. ("‹MKB Takas Bank A.fi.") as a guarantee for stock exchange
and money market operations from investments securities. YTL23.293.000 of Eurobonds has been pledged against repo transactions from investments securities. Government
bonds amounting to YTL407.581.000 have been pledged by one of the Subsidiaries of D›flbank in CBRT against the funding it has obtained from D›flbank, one of the
Subsidiaries of the Group.
The comparison of the fair values of government bonds, treasury bills and corporate bonds in the investment portfolio classified as held-to-maturity with the carrying values is
as follows:
Government bonds and treasury bills
Eurobonds
Corporate bonds
Carrying value
31 December 2004
Fair value
31 December 2003
Carrying value
Fair value
462.807.973
157.362.285
20.529.823
474.848.000
172.735.824
21.197.000
18.424.329
16.000.928
18.431.104
16.001.259
640.700.081
668.780.824
34.425.257
34.432.363
Interest rate for government bonds and treasury bills held to maturity at 31 December 2004 vary between 24% and 26% (2003: 29-55%).
Interest rates for corporate bonds at 31 December 2004 vary between 2,78% and 6,75% (2003: 2,78%).
At 31 December 2004, the net unrealised gain on investment securities held-to-maturity amounts to YTL41.227.000 (2003: YTL8.058.750).
The breakdown of debt securities, classified as investment securities available-for-sale and held-to-maturity, as per their maturities at 31 December 2004 and 2003 are as
follows:
2004
2003
13.847.034
8.445.175
869.615.885
1.152.558.080
67.595.750
54.175.674
515.295.865
936.907.293
2.044.466.174
1.573.974.582
2004
2003
34.425.257
20.825.000
Additions
Transfer from available-for-sale
Redemptions
Translation difference
Monetary gain
513.357.824
134.499.000
(12.727.000)
(21.735.000)
(7.120.000)
40.491.257
(23.622.000)
(3.269.000)
31 December
640.700.081
34.425.257
1-30 days
31-90 days
91 days - 1 year
Over 1 year
The movement of held-to-maturity securities for the years ending at 31 December 2004 and 2003 is as follows:
1 January
NOTE 8 - RESERVE DEPOSITS WITH THE CENTRAL BANK OF TURKEY
Reserve deposits
2004
2003
462.049.972
260.925.234
According to the regulations of the CBT, banks are required to maintain reserve deposits equivalent to a certain portion of their customer deposits, other than Interbank
deposits, based on the type of deposits (foreign currency or YTL), at different percentages ranging from 6% to 11% (2003: 6% to 11%). These funds are not available to
finance the day-to-day operations of the Subsidiaries in the finance segment.
NOTE 9 - ORIGINATED LOANS
2004
2003
2.945.597.006
556.539.754
2.268.347.750
393.878.345
3.502.136.760
2.662.226.095
1.448.180.547
998.613.000
120.156.241
1.226.518.214
823.253.875
86.899.943
150.177.304
132.319.014
21.590.000
90.519.727
48.895.160
54.087.732
2.829.236.819
2.371.973.938
Retail:
Credit cards
Other consumer loans
350.346.000
215.464.066
205.727.683
64.128.529
Total retail loans
565.810.066
269.856.212
3.395.046.885
2.641.830.150
Loans under legal follow-up
Other impaired loans
161.787.846
93.250.265
93.157.832
10.868.696
Total impaired loans
255.038.111
104.026.528
Total gross loans and advances
3.650.084.996
2.745.856.678
Less: Provision for loan losses
(147.948.236)
(83.630.583)
Net loans and advances to customers
3.502.136.760
2.662.226.095
Short-term originated loans
Long-term originated loans
Corporate and commercial loans:
Commercial and industrial loans
Export loans
Investment loans
Investment in direct finance leases
- net of unearned finance income
Originated loans to the Undersecretariat of the Treasury of the
Prime Ministry of the Republic of Turkey
Factoring receivables
Total corporate and commercial loans
Originated loans include funds transferred at issuance date for the treasury bills issued by the Undersecretariat of Treasury for the Government of Republic of Turkey.
At 31 December 2004, interest rates vary between 2% and 4,5% (2003: 3,5-7,5%) per annum for foreign currency loans and 18% and 25% (2003: 20-45%) per annum for
Turkish lira loans.
132
At 31 December 2004, the Group followed the local regulations as specified by the Banking Regulation and Supervision Agency and classified credit card receivables of
YTL102.607.000 in the 3rd, 4th and 5th receivable groups as non-performing, of YTL78.722.000 in 2nd receivable group as closely monitored loans and receivables
respectively and recognized YTL64.827.000 of specific provision for loan losses based on the provisioning matrix as stipulated in the local regulation by which provisions are
set aside by the banks in Turkey in these consolidated financial statements. However, had the impairment loss on the credit card receivables portfolio been measured in
accordance with IAS 39, an estimated additional provision of YTL38.500.000 (approximately YTL24.000.000 with the Holding’s ownership interest) would be recognized in
the accompanying consolidated financial statements at 31 December 2004.
The loans and advances to customers according to maturity are as follows:
2004
1-30 days
31-90 days
91 days - 1 year
Over 1 year
908.872.368
733.417.000
1.303.307.638
556.539.754
3.502.136.760
The banking loans in 1-30 days maturity includes demand and impaired loans amounting to YTL13.040.000.
Movement in provisions for loan losses is as follows:
2004
Balance at 1 January
Loan impairment expense for the period
Recoveries of amounts previously provided
Monetary gain
83.630.583
88.580.651
(10.772.000)
(13.490.998)
Balance at 31 December
147.948.236
The loans and advances to customers include finance lease receivables, as shown below:
2004
2003
Gross investment in finance leases
Less: Unearned finance income
171.010.304
(20.833.000)
147.399.430
(15.080.416)
Net investment in finance leases
150.177.304
132.319.014
2004
2003
80.612.000
56.603.000
11.551.000
1.411.304
85.257.229
37.313.414
9.569.410
178.961
-
150.177.304
132.319.014
The maturity analysis of net investment in finance leases as of 31 December 2004 and 2003 is as follows:
2004
2005
2006
2007
2008
Economic sector risk concentrations for the performing loan portfolio are as follows:
2004
Consumer loans and credit cards
Textiles
Wholesale and retail trade
Construction and cement
Financial institutions
Food and beverage
Metal processing
Media
Medicine, chemicals and dyes
Non-metal mine processing
Automotive
Tourism
Other production
Durable goods
Agriculture
Originated loans to the Undersecretariat of the
Treasury of the Prime Ministry of the Republic of Turkey
Oil and gas
Other
2003
YTL
%
YTL
%
565.810.000
422.793.000
317.663.962
300.375.000
230.102.000
216.210.000
155.388.000
145.441.406
122.804.000
117.097.000
109.071.000
107.838.000
102.526.940
99.545.000
57.310.000
49.828.358
17
12
9
9
7
6
5
4
4
3
3
3
3
3
2
1
269.856.211
393.666.851
386.119.035
227.005.534
204.673.876
240.894.873
134.694.571
104.183.551
84.205.584
71.412.000
42.151.000
63.667.651
64.930.349
64.221.000
50.320.949
60.058.410
10
15
15
9
8
9
5
4
3
3
2
2
2
2
2
2
21.590.000
13.537.152
240.116.067
1
1
7
48.895.160
67.206.421
63.667.124
2
3
2
3.395.046.885
100
2.641.830.150
100
Notional amount
Assets
Liabilities
247.782.000
384.334.000
141.527.063
202.500.000
122.381.000
324.000.000
2.035.000
8.929.000
236.929
224.000
1.557
10.919.689
(1.721.000)
(10.676.581)
(117.595)
(812.000)
(1.547)
(16.000)
1.422.524.063
22.346.175
(13.344.723)
114.747.115
379.302.004
19.277.705
633.015.751
1.427.556
7.642.095
-
(648.890)
(105.871)
(142.300)
-
1.146.342.575
9.069.651
(897.061)
NOTE 10 - DERIVATIVE FINANCIAL INSTRUMENTS
The Group utilises the following derivative instruments for non-hedging purposes:
Fair values
2004
Foreign exchange derivatives
Currency swaps
Currency futures
Interest rate swaps
Foreign currency options
Credit default swaps
Total derivative assets/(liabilities)
2003
Foreign exchange derivatives
Currency swaps
Currency futures
Interest rate option
Total derivative assets/(liabilities)
Although certain derivative transactions provide effective economic hedges under the Group’s risk management position, they do not qualify for hedge accounting under the
specific rules in IAS 39 and are therefore treated as derivatives held-to-maturity.
134
NOTE 11 - TRADE RECEIVABLES
2004
2003
544.699.191
216.693.638
5.961.232
484.251.717
159.415.509
7.673.569
767.354.061
651.340.795
(45.493.095)
(29.173.899)
721.860.966
622.166.896
3.307.464
4.321.777
2.867.739
662.051
7.629.241
3.529.790
Short-term trade receivables:
Trade receivables - net of unearned finance income
Notes receivables - net of unearned finance income
Other
Less: Provision for doubtful receivables
Long-term trade receivables:
Trade receivables - net of unearned finance income
Notes receivables - net of unearned finance income
Movement of the provisions for doubtful receivables in 2004 is as follows:
1 January 2004
29.173.899
Provisions reserved in 2004
Collections
Monetary gain
22.609.274
(2.682.484)
(3.607.594)
31 December 2004
45.493.095
NOTE 12 - TRANSACTIONS AND BALANCES WITH RELATED PARTIES
i) Amounts due from and due to related parties:
Due from related parties:
D Yap› ve ‹nflaat Sanayi ve Ticaret A.fi. ("D Yap›")
Alo Teledünya A.fi. ("Alo Teledünya")
Do¤an D›fl Ticaret (*)
Other
Due to related parties:
D Yap›
Adilbey Holding A.fi. ("Adilbey Holding")
Ça¤dafl Pazarlama
Other
2004
2003
1.513.490
342.762
507.393
663.427
369.899
6.118.502
1.483.019
2.363.645
8.634.847
2004
2003
5.003.568
55.652
473.168
7.223.677
1.111.154
3.781.162
390.472
3.141.501
5.532.388
15.647.966
(*) Due to the fact that Do¤an D›fl Ticaret is consolidated on a line-by-line basis at 31 December 2004, Do¤an D›fl Ticaret balances and transactions are excluded from related
parties.
ii) Transactions with related parties:
Major purchases from related parties for the years ended 31 December 2004 and 2003 are as follows:
Service and product purchases:
D Yap›
Adilbey Holding
Other
2004
2003
6.637.129
1.914.805
401.459
12.739.486
141.166
175.272.627
1.895.019
8.953.393
190.048.298
2004
2003
-
575.558
2.745
5.160
-
583.463
2004
2003
7.225.146
467.053
224.103
282.839
14.396.304
44.878
201.527
2.523.255
1.213.611
8.199.141
18.379.575
2004
2003
18.762
12.086
-
13.172
30.848
13.172
Property, plant and equipment purchases:
Ortado¤u Otomotiv Ticaret A.fi. ("Ortado¤u Otomotiv")
Other
Sales to related parties, net of sales discounts and returns, for the years ended 31 December 2004 and 2003 are as follows:
Service and product sales:
Adilbey Holding
Ortado¤u Otomotiv
D Yap›
Other
Property, plant and equipment sales:
Ça¤dafl Pazarlama
Adilbey Holding
D Yap›
parties.
136
Other transactions with related parties for the years ended 31 December 2004 and 2003 are as follows:
Interest expense - finance:
2004
2003
Do¤an family
D›flbank Emekli Sand›¤›
Adilbey Holding
Other
(11.229.248)
(8.199.130)
(1.411.396)
(1.331.474)
(881.197)
(6.319.008)
(1.248.363)
Interest Expense
(22.171.248)
(8.448.568)
2004
2003
Adilbey Holding
Other, net
2.240.689
218.990
45.012
491.434
Interest Income
2.459.679
536.446
2004
2003
D Yap›
Adilbey Holding
(299.293)
(116.126)
-
(193.793)
(2.122.270)
Interest Expense
(415.419)
(2.316.063)
Interest income/(expense) - net
2.044.260
(1.779.617)
Interest income/(expense) - non-finance:
parties.
NOTE 13 - INVENTORIES
2004
2003
236.602.686
23.617.620
7.856.941
12.377.779
10.395.836
26.129.621
157.860.437
25.928.499
5.940.335
12.711.674
12.491.674
17.967.643
316.980.483
232.900.262
(13.133.545)
(13.149.015)
303.846.938
219.751.247
Short-term inventories:
Finished goods and merchandise
Raw materials and supplies
Semi-finished goods
Promotion stocks
Spares, supplies and advances
Other inventories
Other inventories mainly consist of fuels and lubricants in transit.
2004
2003
5.963.500
-
5.963.500
-
Long-term inventories:
Construction-in-progress inventories
Long-term construction-in-progress inventories are the restated costs of the construction at Istanbul Beylikdüzü at 31 December 2004; mainly the rough construction work,
infrastructure, isolation and environment arrangement incurred in accordance with the construction agreement signed with D Yap› at 25 June 2004.
NOTE 14 - OTHER CURRENT ASSETS
Prepaid expenses
Special Consumption Tax exemption (*)
Prepaid taxes and funds
Advances given
Receivables from other banks
Value Added Tax ("VAT") receivable
Deferred acquisition costs
Lawsuit and court expenses receivable
Programme stocks
Income accruals
Other
Impairment for programme stocks
2004
2003
23.667.642
20.776.442
17.817.311
15.004.021
14.534.726
14.313.557
14.121.000
6.132.255
3.951.200
1.308.880
38.368.442
22.202.593
16.936.892
33.638.138
11.669.514
10.082.477
7.362.664
10.632.637
2.683.945
3.622.791
1.817.927
28.997.037
169.995.476
149.646.615
(737.784)
-
169.257.692
149.646.615
(*) On deliveries made to certain military institutions, embassies and petroleum searching companies, Special Consumption Tax exemption to be used through the purchases
from Tüprafl has been obtained. At 31 December 2004, the amount reflected in these consolidated financial statements corresponds to the exemptions sent to Tüprafl but not
used as of the date of these consolidated financial statements.
NOTE 15 - INVESTMENT PROPERTIES
1 January 2004
Additions
Disposals
Transfers
Impairment (*)
31 December 2004
37.779.397
9.005.075
5.166.041
1.696.999
(797.967)
(398)
(2.176.637)
-
6.293.359
(938.573)
46.264.193
9.763.103
46.784.472
6.863.040
(798.365)
(2.176.637)
5.354.786
56.027.296
1.092.450
390.549
(250)
-
-
1.482.749
1.092.450
390.549
(250)
-
-
1.482.749
Cost:
Land and land improvements
Buildings
Accumulated depreciation:
Buildings
Net book value
45.692.022
54.544.547
(*) The amount of impairment losses accounted for investment properties at 31 December 2003 is YTL18.758.791. At 31 December 2004, in accordance with the expertise
reports prepared by certified real estate valuation companies, the fair value of the investment properties were found to have increased by YTL7.305.752. Since the increase in
the fair value of the investment properties does not exceed the impairment loss accounted for in the year 2003, the increase is accounted for in other operating income in the
consolidated financial statements at 31 December 2004 (Note 30). Additionally, in accordance with the reports of the certified real estate valuation companies, the additional
provision for impairment of investment properties amounts to YTL1.950.966 (Note 30). At 31 December 2004, the net amount of movements related to impairment is
YTL5.354.786.
138
NOTE 16 - PROPERTY, PLANT AND EQUIPMENT
Movement for property, plant and equipment and related depreciation for the year ended 31 December 2004 is as follows:
1 January 2004
Additions
Acquisitions (*)
189.750.920
498.892.041
1.112.919.250
89.210.042
487.100.839
207.296.368
111.017.471
17.829.876
9.268.660
16.131.492
32.153.343
8.427.816
32.422.007
29.051.959
12.609.519
43.087.927
12.595.540
305.568
214.863
1.499.217
2.566
(200.538)
(2.891.424)
(8.037.377)
(7.618.272)
(20.041.064)
(12.676.206)
(7.304.619)
(360.897)
2.714.016.807
183.152.723
14.617.754
(59.130.397)
15.675.508
88.059.515
720.024.180
30.541.266
389.620.400
110.712.579
32.674.959
3.395.673
12.909.189
62.802.073
9.825.013
37.307.334
30.649.769
27.879.558
229.918
139.236
17.649
540.396
-
(25.456)
(308.549)
(7.292.032)
(6.040.512)
(9.758.541)
(10.460.710)
(2.896.436)
1.387.308.407
184.768.609
927.199
(36.782.236)
Impairment
Currency
translation
differences
(70.000)
(342.701)
(8.832.692)
(4.444.000)
-
(562.382) 202.627.474
(1.205.470) 523.940.590
(2.589.794) 1.147.979.141
(1.198)
90.491.592
(125.782) 493.052.385
- 222.716.662
- 141.275.865
(10.043)
13.304.122
915.006 (13.689.393)
(4.494.669) 2.835.387.831
Disposals Transfers (**)
31 December
2004
Cost:
Buildings
Motor vehicles
Leasehold improvement
Other fixed assets
Construction in progress
4.370.814
488.411
13.570.852
258.341
1.029.860
3.488.541
24.953.494
(47.245.307)
Accumulated depreciation:
Buildings
Motor vehicles
Leasehold improvement
Other fixed assets
Net book value
1.326.708.400
-
-
(121.270)
(556.044)
(380)
(85.684)
-
19.045.725
100.768.803
775.117.413
34.343.036
417.623.905
130.901.638
57.658.081
-
(763.378) 1.535.458.601
1.299.929.230
(*) Balances of Do¤an D›fl Ticaret and Orta Anadolu Otomotiv at the date of their acquisitions are included in the "Acquisitions" column of the movement schedule.
(**) Transfers of the property, plant and equipment with a net amount of YTL915.006 is related with investment properties (Note 15) and intangible assets (Note 16)
amounting to YTL2.176.637 and YTL1.261.631 respectively.
Machinery and equipment, furniture and fixtures, motor vehicles and leasehold improvements include finance leased assets amounting to YTL43.348.308, YTL105.991.471,
YTL1.942.688 and YTL2.240.451 respectively at 31 December 2004. The accumulated depreciation related to finance leased assets amounts to YTL111.074.949 at 31
December 2004.
At 31 December 2004, mortgages on property, plant and equipment amount to YTL132.582.663 (2003: YTL150.577.142).
NOTE 17 - INTANGIBLE ASSETS
Movement for intangible assets and related amortization for the year ended 31 December 2004 is as follows:
Cost
Accumulated amortization
Net book value
1 January 2004
Additions
Disposals
Transfers (*)
Impairment
207.854.209
(114.357.649)
32.980.117
(37.045.709)
(8.318.857)
4.874.172
1.261.631
-
(4.090.729)
-
Currency
Translation
Differences
(98.203) 229.588.168
79.338 (146.449.848)
93.496.560
Goodwill (Note 32)
1.936.772.430
(435.283.757)
Net book value
1.501.488.673
31 December
2004
83.138.320
12.650.626
(89.267.652)
(31.887.142)
4.200.336
-
(1.859.619)
-
- 1.915.676.295
- (520.351.073)
1.395.325.222
Negative goodwill (Note 32)
(7.700.916)
898.442
Net book value
(6.802.474)
(6.322.111)
1.588.182.759
1.472.141.431
Total net book value
480.363
-
-
-
-
(7.700.916)
1.378.805
(*) Transfers amounting to YTL1.261.631 have been made from property, plant and equipment to intangible assets.
NOTE 18 - BANK BORROWINGS, EUROBOND AND MURABAHA SYNDICATION
Breakdown of bank borrowings at 31 December 2004 and 2003 is as follows:
YTL
2004
Foreign
Currency
YTL
2003
Foreign
Currency
Total
Total
22.363.213
545.330.000
922.976.536
545.330.000
945.339.749
50.805.841
319.208.019
600.437.320
319.208.019
651.243.161
22.363.213
1.468.306.536
1.490.669.749
50.805.841
919.645.339
970.451.180
64.101.000
34.714.000
27.119.000
90.929.000
91.220.000
125.643.000
66.635.244
7.714.950
52.463.457
10.026.925
119.098.701
17.741.875
98.815.000
118.048.000
216.863.000
74.350.194
62.490.382
136.840.576
121.178.213
1.586.354.536
1.707.532.749
125.156.035
982.135.721
1.107.291.756
18.787.878
243.344.279
262.132.157
38.677.915
451.786.788
490.464.703
-
104.087.152
104.087.152
7.325.566
95.007.715
102.333.281
18.787.878
347.431.431
366.219.309
46.003.481
546.794.503
592.797.984
139.966.091
1.933.785.967
2.073.752.058
171.159.516
1.528.930.224
1.700.089.740
Short-term bank borrowings
Finance segment
Foreign institutions and banks
Syndication loan
Other
Domestic banks
Türk Eximbank
Other
Total short-term
bank borrowings-finance segment
Non-finance segments
Bank borrowings
Short-term portion of
long-term borrowings
Total short-term
bank borrowingsNon-finance segments
Total short-term bank borrowings
140
YTL
2004
Foreign
Currency
YTL
2003
Foreign
Currency
Total
Total
Finance Segment
Foreign institutions and banks
Türk Eximbank
Other
-
137.382.464
25.729.000
137.382.464
25.729.000
-
217.270.816
17.225.340
-
217.270.816
17.225.340
-
Total long-term bank borrowingsfinance segments
-
163.111.464
163.111.464
-
234.496.156
234.496.156
Non-finance segments
Bank borrowings
187.176
600.504.159
600.691.335
13.264.431
979.416.982
992.681.413
Total long-term bank borrowingsnon-finance segments
187.176
600.504.159
600.691.335
13.264.431
979.416.982
992.681.413
Total long-term bank borrowings
187.176
763.615.623
763.802.799
13.264.431
1.213.913.138
1.227.177.569
Long-term bank borrowings
A syndicated credit facility obtained on 9 August 2004 in the amount of YTL545.330.000 (2003: YTL319.208.019) with an interest rate of annual LIBOR plus of 0,60%
(2003: Libor+0,85%) and maturity date of 8 August 2005, was provided by 60 international banks including ING Bank N.V. as the leader of the consortium.
The redemption schedules of long-term borrowings at 31 December 2004 and 2003 are summarised below:
2005
2006
2007 and after
Finance
2004
Non-finance
Total
Finance
2003
Non-finance
Total
115.076.888
48.034.576
280.967.218
319.724.117
396.044.106
367.758.693
75.468.804
151.680.245
7.347.107
610.334.670
260.636.637
121.710.106
685.803.474
412.316.882
129.057.213
163.111.464
600.691.335
763.802.799
234.496.156
992.681.413
1.227.177.569
As of 31 December 2004, interest rates for local currency finance segment bank borrowings are between 17% and 24% (2003: 20-30%), and for foreign currency finance
segment bank borrowings 1% to 7% (2003: 1-6%); for local currency non-finance segment bank borrowings 0% to 32% (2003: 0-58%), and for foreign currency non-finance
segment bank borrowings 3% to 13% (2003: 1-12%).
Eurobond
The issue and sale procedures of Eurobond performed by PO Oil Financing Limited, a subsidiary of POAfi, were completed by 22 July 2004 and the Eurobond issued with a
nominal value of USD175.000.000 (USD82.993.039 with the Holding’s ownership interest) are registered at Luxembourg Stock Exchange. The Eurobond issued have a
maturity of five years; beginning on 22 July 2004 and maturing on 22 July 2009. The Eurobond has a fixed interest rate of 9,75% and the interest will be paid semi-annually.
At 31 December 2004, the amortized cost of the bonds held outside the Group calculated using the effective yield method amounts to YTL110.464.675 with the Holding’s
ownership interest.
POAfi signed a murabaha syndication agreement at 15 July 2004 for an amount of USD92.500.000 (USD43.867.749 with the Holding’s ownership interest), at which Citi
Islamic Bank E.C, and Kuveyt Türk Evkaf Finans Kurumu A.fi. participated and Citi Islamic Investment Bank E.C was also the agent. The murabaha syndication has a fixed
interest rate and a maturity date of 14 July 2006. The effective fixed interest rate is 6,89%. At 31 December 2004, the short-term and the long-term portions of the
murabaha syndication amounts to YTL27.864.682 (YTL13.214.712 with the Holding’s ownership interest) and YTL96.252.995 (YTL45.647.592 with the Holding’s
ownership interest), respectively.
The redemption schedule of murabaha syndication (with the Holding’s ownership interest) is summarized below:
31 December 2004
(USD)
2005
2006
9.748.389
34.119.360
43.867.749
NOTE 19 - BANKING AND CUSTOMER DEPOSITS
The breakdown of banking deposits according to type and maturity at 31 December 2004 and 2003 is as follows:
Bank deposits
Customer deposits
Short-term
2004
Long-term
Total
Short-term
2003
Long-term
Total
485.734.000
3.892.438.582
21.170.000
23.404.000
506.904.000
3.915.842.582
119.405.150
3.525.973.030
36.961.958
119.405.150
3.562.934.988
4.378.172.582
44.574.000
4.422.746.582
3.645.378.180
36.961.958
3.682.340.138
Demand/Current
2004
Term
Total
Demand/Current
2003
Term
Total
396.000
30.109.000
5.651.000
396.000
35.760.000
154.823
38.006.701
2.807.300
18.896.340
2.962.123
56.903.041
-
90.066.000
90.066.000
-
-
-
30.505.000
95.717.000
126.222.000
38.161.524
21.703.640
59.865.164
48.000
146.000
3.755.000
56.879.000
3.803.000
57.025.000
2.288.339
54.643
9.138.210
48.058.794
11.426.549
48.113.437
-
319.854.000
319.854.000
-
-
-
194.000
380.488.000
380.682.000
2.342.982
57.197.004
59.539.986
30.699.000
476.205.000
506.904.000
40.504.506
78.900.644
119.405.150
Foreign currency:
Domestic banks
Foreign banks
Funds deposited under
repurchase agreements
Turkish lira:
Domestic banks
Foreign banks
Funds deposited under
Total bank deposits
At 31 December 2004, interest rates for foreign currency time deposits are between 2,68% and 3,75% (2003: 2,5-5%), and interest rates for local currency time deposits are
between 21,5% and 23% (2003: 25-35%).
142
The breakdown of customer deposits according to type and maturity at 31 December 2004 and 2003 is as follows:
Foreign currency:
Saving deposits
Commercial deposits
Turkish lira:
Saving deposits
Commercial deposits
Securities deposited under
Total customer deposits
Demand/Current
2004
Term
Total
Demand/Current
2003
Term
Total
156.915.464
268.349.746
929.311.000
654.702.982
1.086.226.464
923.052.728
161.308.130
206.781.178
999.382.331
420.264.841
1.160.690.461
627.046.019
425.265.210
1.584.013.982
2.009.279.192
368.089.308
1.419.647.172
1.787.736.480
77.267.000
168.607.062
1.207.434.000
417.005.449
1.284.701.000
585.612.511
48.749.564
136.497.349
813.583.969
398.440.168
862.333.533
534.937.517
-
36.249.879
36.249.879
-
377.927.458
377.927.458
245.874.062
1.660.689.328
1.906.563.390
185.246.913
1.589.951.595
1.775.198.508
671.139.272
3.244.703.310
3.915.842.582
553.336.221
3.009.598.767
3.562.934.988
The breakdown of customer deposits according to type and maturity at 31 December 2004 and 2003 is as follows:
Demand
1-30 days
31-90 days
91 days - 1 year
Over 1 year
2004
2003
701.838.272
2.772.702.310
430.584.000
473.048.000
44.574.000
593.840.727
2.380.935.228
374.621.907
295.980.318
36.961.958
4.422.746.582
3.682.340.138
At 31 December 2004, interest rates for foreign currency time deposits are between 2,5% and 6,75% (2003: 2,5-5%), and interest rates for local currency time deposits are
between 17% and 29,5% (2003: 25-35%).
NOTE 20 - TRADE PAYABLES
Short-term trade payables:
2004
2003
Trade accounts payable - net of unincurred credit finance charges
Notes payable - net of unincurred credit finance charges
Other
510.633.680
8.533.725
2.128.268
358.986.562
6.340.013
913.332
Short-term trade payables
521.295.673
366.239.907
Long-term trade payables
57.056.762
42.423.871
Long-term payables to suppliers relate to the purchase of machinery and equipment.
The redemption schedule of long-term payables is summarized below:
Year
2004
2003
32.983.939
24.072.823
15.598.562
10.200.509
16.624.800
57.056.762
42.423.871
2004
2003
Unearned premiums reserve - net of reinsurance
Claim provisions - net of reinsurance
Deferred commission income
48.034.537
27.268.137
5.056.435
37.903.575
20.699.598
4.168.178
Insurance technical reserves - current
80.359.109
62.771.351
Life assurance provision
26.628.076
22.360.241
Insurance technical reserves - non-current
26.628.076
22.360.241
2004
2003
167.309.539
76.111.000
50.256.239
39.260.567
38.148.000
22.431.097
18.769.953
17.880.000
11.000.000
10.457.000
8.260.810
6.240.902
1.139.815
101.187.736
135.723.620
58.645.935
47.310.103
39.974.109
30.898.517
7.919.029
35.966.684
14.102.660
5.880.986
9.404.126
3.428.159
15.871.853
101.914.117
568.452.658
507.039.898
2005
2006
2007 and after
NOTE 21 - INSURANCE TECHNICAL RESERVES
NOTE 22 - OTHER CURRENT LIABILITIES
Taxes and withholdings payables
Blocked merchant accounts
Fuel purchase certificates (**)
Payables to Privatization Administration ("PA") (*)
Cheques at clearing
Import transfers and payment orders
Provision for credit related commitments (Note 33)
Personnel expenses
Blocked cheques and deposits
Compensation to be paid
Advances received
Provision for expenses
Other
(*) Whereas the payment of the remaining amount resulting from the debt from ‹fl Do¤an’s purchase of 25,8% of POAfi shares from the PA in relation to the decision of
Privatization High Council ("PHC") numbered 2003/50, has to be made according to the agreement signed on 18 September 2003 between PA and POAfi, additional to the
agreement dated 31 July 2002 concerning the sales of shares, since Ankara 10. ‹dare Court has decided the cancellation of the decision of PHC in the lawsuit which POAfi
did not take part in, although POAfi has no legal liability, it has been decided that YTL83.615.325 (YTL39.654.218 with Do¤an Holding ownership interest) will be paid
upon the PA’s notification dated 1 April 2004 and numbered B.02.1.Ö‹B.0.19.00/3003, with a precaution note attached stating "each and every demand, legal proceeding and
refund rights are reserved". The payment was made by POAfi on 26 April 2004. Accordingly, POAfi will pay the remaining amount in accordance with the original agreement
signed on 31 July 2002.
(**) Fuel purchase certificates are issued and given to certain customers for future consumption. At 31 December 2004, the certificates shown in current liabilities are the
certificates issued but not used as of the balance sheet date.
144
NOTE 23 - OTHER NON-CURRENT LIABILITIES
2004
2003
5.847.971
1.954.769
43.462
119.922.327
5.588.869
1.231.068
76.325
7.846.202
126.818.589
2004
2003
Corporation and income taxes currently payable
Deferred tax assets - net
19.196.257
(145.543.385)
19.097.906
(175.022.320)
Total
(126.347.128)
(155.924.414)
Payables to privatization administration
Deposits and guarantees received
Finance lease obligations
Other
NOTE 24 - TAXATION ON INCOME
Turkish tax legislation does not permit a parent company and its subsidiaries to file a consolidated tax return. Therefore, provisions for taxes, as reflected in the consolidated
financial statements, have been calculated on a separate-entity basis.
Corporation tax is payable at a rate of 33% on the total income of the Company after adjusting for certain disallowable expenses, exempt income and investment and other
allowances for the year 2004. No further tax is payable unless the profit is distributed. Corporation tax rate on the total income will be 30% for the upcoming years.
In accordance with Tax Law No. "5024 Law Related to Changes in Tax Procedural Law, Income Tax Law and Corporate Tax Law" that was published in the Official Gazette
on 30 December 2003 to amend the tax base for non-monetary assets and liabilities, effective from 1 January 2004, income and corporate taxpayers will prepare the
statutory financial statements by adjusting the non-monetary assets and liabilities for the changes in the general purchasing power of the Turkish lira. Corporate taxpayers are
obliged to prepare the opening balance sheets restated for inflation at 31 December 2003. Corporate taxpayers submitted their opening balance sheets restated for inflation at
31 December 2003 in accordance with the General Communiqué on Tax Procedural Law No. 328 ("Communiqué") dated 28 February 2004.
Dividends paid to non-resident corporations, which have a place of business in Turkey, or resident corporations are not subject to withholding tax. Otherwise, dividends paid
are subject to withholding tax at the rate of 10%. An increase in capital via issuing bonus shares is not considered as a profit distribution and thus does not incur withholding
tax.
Corporations are required to pay advance corporation tax quarterly at a rate of 33% (2003: 30%) on their corporate income. Advance tax is payable by the 17th of the
second month following each calendar quarter end. Advance tax paid by corporations is credited against the annual corporation tax liability. The balance of the advance tax
paid may be refunded or offset against other liabilities to the government.
Exception for participation share and property sales profit which took part in Corporation Tax Law temporary articles 28 and 29 has been ended. However, this arrangement
has been added to Corporation Tax Law article 8 as permanent exception with 5281 numbered law dating from 1 January 2005.
Capital gains derived from the sale of equity investments and immovable held for not less than two years are tax exempt until 31 December 2004, if such gains are added to
paid-in capital in the year in which they are sold.
Capital expenditures, with some exceptions, over YTL 6.000 (2003:YTL 5.000; 2005: YTL 10.000) are eligible for an investment incentive allowance of 40%, which is
deductible from taxable income prior to calculation of the corporate income tax, without the requirement of an investment incentive certificate; the amount of allowance is not
subject to withholding tax. Investment allowances utilised within the scope of investment incentive certificates granted prior to 24 April 2003 are subject to withholding tax at
the rate of 19,8%, irrespective of profit distribution.
Under the Turkish taxation system, tax losses can be carried forward to offset against future taxable income for up to 5 years. Tax losses cannot be carried back to offset
profits from previous periods.
In Turkey, there is no procedure for a final and definitive agreement on tax assessments. Companies file their tax returns within the 15th of the fourth month following the
close of the financial year to which they relate. Tax returns are open for 5 years from the beginning of the year that follows the date of filing, during which time the tax
authorities have the right to audit tax returns, and the related accounting records on which they are based, and may issue re-assessments based on their findings.
Provision for taxes for the years ended 31 December 2004 and 2003 are summarised as follows:
2004
2003
- Current
- Deferred
(54.421.795)
(29.312.389)
(45.039.931)
(64.602.726)
Taxes on income
(83.734.184)
(109.642.657)
Deferred taxes
Do¤an Holding, its Subsidiaries and Joint Ventures, calculate deferred tax assets and liabilities based on temporary differences between the IFRS financials and financials
prepared according to Turkish tax legislation. In substance, differences arise from the differences in accounting periods for the recognition of income and expenses, in
accordance with IFRS and tax legislation.
Deferred income taxes are calculated on temporary differences that are expected to be realised or settled based on the taxable income in fiscal year 2004 under the liability
method using a principal tax rate of 30% (2003: 33% for the temporary differences that were expected to be realized or settled in 2004 and 30% for all other temporary
differences).
POAfi booked the legal merger which took place 2002 in the scope of the Tax Law No.5024 as statutory goodwill in the amount of YTL1.925 million in the financial
statements restated for inflation ("statutory financial statements"), classified it as a balancing account which is neither an asset nor a liability in nature in accordance with the
relevant legislation provisions, and did not apply inflation accounting thereto. In this context, it was assessed that the impact in reference to the statutory goodwill in the year
ended at 31 December 2004 was a tax deductible item; accordingly the tax base of POAfi decreased in the amount of YTL253 million. POAfi treated the statutory goodwill as
a non-monetary item while calculating deferred taxes from carry forward tax losses in the interim consolidated financial statements in order to reflect the related tax burden
in the consolidated financial statements. However, following the Circular No.17 on Tax Procedural Law, related to Inflation Adjustment Application dated 24 March 2005
issued by the Ministry of Finance, which requires a statutory goodwill which is neither an asset or a liability in nature is a temporary account and therefore should not be
subject to inflation accounting, POAfi changed its treatment in the interim consolidated financial statements. This application resulted in an increase of YTL76 million
(approximately YTL36 million with the Holding’s ownership interest) in the deferred tax assets of POAfi, and a decrease in the same amount in the taxes on income.
The breakdown of cumulative temporary differences and deferred tax assets/liabilities provided at 31 December 2004 and 2003, using enacted tax rates, are as follows:
Cumulative temporary
differences
2004
2003
2004
2003
Net difference between the tax base and the
carrying value of property, plant and equipment,
intangible assets and inventories
Financial assets valuation differences
Other
140.609.670
799.892
23.895.910
75.637.425
81.638.214
32.339.403
(42.529.791)
(239.968)
(7.333.483)
(24.960.352)
(26.940.611)
(10.672.003)
165.305.472
189.615.042
(50.103.242)
(62.572.966)
Tax losses carried forward
Provision for loan losses and
factoring receivables
Reserve for employment
termination benefits
Other
439.399.482
605.809.691
128.919.947
199.917.198
48.991.388
32.479.529
14.697.415
10.718.245
30.054.866
25.205.339
120.074.958
20.603.196
6.714.033
69.677.604
8.953.361
7.561.601
35.514.303
6.483.947
2.215.632
18.260.264
Deferred tax assets
663.726.033
735.284.053
195.646.627
237.595.286
145.543.385
175.022.320
Deferred tax assets, net
146
Deferred tax
assets/(liabilities)
Due to the fact that "Subsidiaries" and "Joint Ventures", which are independent taxpayers, have represented the net amount of deferred tax assets and liabilities in their
financial statements in accordance with IFRS; the effects of the mentioned net-offs have been reflected to the consolidated financial statements of the Holding. Temporary
differences and deferred tax assets/liabilities mentioned above have been prepared according to their gross amounts.
The Holding did not recognize the deferred tax assets as of 31 December 2004 for the tax losses carried forward amounting to YTL117.063.607 (2003: YTL155.223.912) as
there is an uncertainty about the future taxable profit that will be available against which these deferred tax assets can be utilised.
Movements for net deferred taxes for the year ended 31 December 2004 and 2003 are as follows:
2004
2003
1 January
Charge for the year
Acquisitions (*)
175.022.320
(29.312.389)
(166.546)
239.625.046
(64.602.726)
-
31 December
145.543.385
175.022.320
(*) Balances of Do¤an D›fl Ticaret and Orta Anadolu Otomotiv at the date of their acquisitions are included in "Acquisitions".
NOTE 25 - RESERVE FOR EMPLOYMENT TERMINATION BENEFITS
There are no agreements for pension commitments other than the legal requirement as explained below:
Under the Turkish Labour Law, the Holding is required to pay termination benefits to each employee who has completed one year of service and who achieves the retirement
age (58 for women and 60 for men), whose employment is terminated without due cause, is called up for military service or who dies. Since the legislation was changed on 8
September 1999 there are certain transitional provisions relating to length of service prior to retirement.The amount as of 31 December 2004 payable consists of one month’s
salary limited to a maximum of YTL1.574,74 (2003: YTL1.389,95) for each year of service at 31 December 2004.
In addition, according to the Press sector regulations, companies should make payments to personnel who work for a minimum of 5 years and whose employment is terminated
without due cause. The maximum payable amount is 30 days’ salary for each year.
The liability is not funded, as there is no funding requirement.
The provision has been calculated by estimating the present value of the future probable obligation of the Holding arising from the retirement of the employees.
IFRS requires actuarial valuation methods to be developed to estimate the Group’s obligation under defined benefit plans. Accordingly the following actuarial assumptions
have been used in the calculation of the total liability.
Discount rate
Turnover rate to estimate the probability of retirement
2004
2003
5,45%
94%
6%
94%
The principal assumption is that the maximum liability for each year of service will increase in line with inflation. Thus, the discount rate applied represents the expected real
rate after adjusting for the anticipated effects of future inflation As the maximum liability is revised semi-annually, the maximum amount of YTL1.648,90 at 1 January 2005
will be taken into consideration in calculating the reserve for employment termination benefit (1 January 2004: YTL1.485,43).
Movements in the reserve for employment termination benefits during the years ended 31 December 2004 and 2003 are as follows:
2004
2003
1 January
Acquisitions(*)
Charge for the period
Disposals
Monetary gain
20.603.196
180.678
15.309.033
(3.764.810)
(2.273.231)
20.007.191
9.784.429
(5.907.292)
(3.281.132)
31 December
30.054.866
20.603.196
(*) Balances of Do¤an D›fl Ticaret and Orta Anadolu Otomotiv at the date of their acquisitions are included in "Acquisitions".
NOTE 26 - SHARE CAPITAL
Do¤an Holding adopted the registered share capital system available to companies registered with the CMB and set a limit on its registered share capital representing
registered type shares with a nominal value of TL10.000. Do¤an Holding’s authorised, historical and paid-in share capital at 31 December 2004 and 2003 are as follows:
Limit on registered share capital (historical)
Share capital
2004
YTL
2003
YTL
2.000.000.000
735.288.208
600.000.000
588.230.567
The Board of Directors of Do¤an Holding decided to increase the limit on the registered share capital to YTL2.000.000.000. This increase has been approved by CMB on 22
October 2004.
The shareholder structure of the Holding at 31 December 2004 and 2003 is summarised as follows:
Share%
2004
Share%
2003
Adilbey Holding
Ayd›n Do¤an
Ifl›l Do¤an
Vuslat Do¤an Sabanc›
Hanzade V. Do¤an
Y. Begümhan Do¤an
52,00
11,71
1,64
0,04
0,04
0,04
0,04
382.349.868
86.106.341
12.092.273
300.914
300.914
300.914
300.914
52,00
11,71
1,64
0,04
0,04
0,04
0,04
305.879.895
68.885.073
9.673.818
240.731
240.731
240.731
240.731
Total Do¤an family and companies
owned by Do¤an family
65,52
481.752.138
65,52
385.401.710
Istanbul Stock Exchange
34,29
0,19
252.131.806
1.404.264
34,29
0,19
201.705.446
1.123.411
100,00
735.288.208
100,00
588.230.567
Adjustment to share capital
Total share capital
804.735.232
813.259.940
1.540.023.440
1.401.490.507
Adjustment to share capital represents the restatement effect of cash contributions to share capital at year-end equivalent purchasing power.
148
The analysis of shares in accordance with their nature is as follows:
Shareholders
Do¤an family and companies owned by Do¤an family members
Do¤an family and companies owned by Do¤an family members and the foundation
Other shareholders
Other shareholders
Units of shares
YTL
Nature of shares
134.600
483.021.801
125.400
252.006.407
134.600
483.021.801
125.400
252.006.407
Registered
Bearer
Registered
Bearer
735.288.208
735.288.208
NOTE 27 - RETAINED EARNINGS AND LEGAL RESERVES
Retained earnings as per the statutory financial statements, other than legal reserves, are available for distribution subject to the legal reserve requirement referred to below:
Legal reserves consist of first and second reserves, appropriated in accordance with the Turkish Commercial Code (TCC). The TCC stipulates that the first legal reserve is
appropriated out of statutory profits at the rate of 5% per annum, until the total reserve reaches 20% of the Holding's paid-in share capital. The second legal reserve is
appropriated at the rate of 10% per annum of all cash distributions in excess of 5% of the paid-in share capital. Under the TCC, legal reserves can only be used to offset
losses and are not available for any other usage unless they exceed 50% of paid-in share capital.
Public companies distribute dividends according to CMB regulations as follows:
In accordance with the Communiqué No: XI-25 Section 15 paragraph 399, the accumulated deficit amounts arising from the first application of inflation adjustment, in line
with CMB’s profit distribution regulations, are considered to be deductive when computing the distributable profit. The accumulated deficit will first be netted-off from net
income and retained earnings, and the remaining amount of deficit from extraordinary reserves, legal reserves and shareholders’ equity restatement differences.
In accordance with Communiqué XI/25, effective from 1 January 2004, companies are obliged to distribute at least 30% of their distributable profit arising from 2004
activity, which is calculated based on the financial statements prepared in accordance with IFRS. Based on the decision of the General Assembly, the distribution of a
minimum of 30% of the distributable profit can be made as cash or as bonus shares or as a combination of a certain percentage of cash and bonus shares. The income of the
Subsidiaries, Joint Ventures and Associated companies of the Holding will not be taken into consideration in the calculation of dividends of the Parent Company, if they have
not declared dividends in their general assemblies.
For the purposes of profit distribution in accordance with related CMB regulations, items of statutory shareholders’ equity such as "Share Capital, Share Premium, Legal
Reserves, Other Reserves, Special Reserves and Extraordinary Reserves" are presented at their historical amounts. The differences between the inflated and historical amounts
of these items are presented in shareholders’ equity as a total restatement difference.
The restatement difference of shareholders’ equity can only be netted-off against prior years’ losses and used as an internal source of capital increase where extraordinary
reserves can be netted-off against prior years’ losses, distribution of bonus shares and dividends to shareholders.
According to the Communiqué XI/25 explained above, the Holding’s shareholders’ equity breakdown is as follows:
2004
2003
Share capital
Share premium
Legal reserves
Extraordinary reserves
Other reserves
Cost increase fund
Restatement difference of shareholders’ equity
Prior years’ losses
735.288.208
630.275
7.915.090
82.871.964
5.587.343
1.128.199.721
(42.417.829)
239.285.805
(186.290.322)
588.230.567
1.056.658
7.915.090
94.233.648
11.257.445
108.306
1.166.730.390
(23.668.533)
436.380.361
(531.710.186)
Total shareholders’ equity
1.971.070.255
1.750.533.746
The details of the differences arising between the inflated and historical amounts of statutory shareholders’ equity items presented above are as follows:
31 December 2004
Restated
amount
Restatement
difference
Historical
amount
735.288.208
630.275
7.915.090
82.871.964
5.587.343
-
1.540.023.440
738.390
35.370.794
330.090.503
54.269.474
-
804.735.232
108.115
27.455.704
247.218.539
48.682.131
-
588.230.567
1.056.658
7.915.090
94.233.648
11.257.445
108.306
1.401.490.507
4.886.491
35.370.797
375.345.663
52.043.000
395.646
813.259.940
3.829.833
27.455.707
281.112.015
40.785.555
287.340
832.292.880
1.960.492.601
1.128.199.721
702.801.714
1.869.532.104
1.166.730.390
Historical
amount
Share capital
Share premium
Legal reserves
Extraordinary reserves
Other reserves
Cost increase fund
31 December 2003
Restated
Restatement
amount
difference
In accordance with the CMB regulation dated 25 February 2005 Communiqué 7/242, when calculating the net distributable consolidated profit, the net profit of Subsidiaries
that have not agreed in the general assembly to distribute dividends over the current year profits, will be deducted from the net consolidated profit.
NOTE 28 - CASH USED IN OPERATIONS
Adjustments for:
Depreciation and amortisation (Notes 15, 16 and 17)
Net interest income
Translation reserve
Profit from the sales of property, plant and equipment
Valuation difference of derivative financial instruments
Provision for loan losses, net
Provision for net realizable value (Note 13)
Gain on sales of Subsidiaries, net (Note 30)
Unrealized loss on investments
Impairment of investment properties, net (Note 15)
Impairment of programme stocks (Note 14)
Provision for lawsuits (Note 30)
Other provisions
Impairment on property plant and equipment and intangible assets (Notes 16 and 17)
Inflation effect on non-operating activities and income taxes
Change in finance-segment working capital (excluding the effects of acquisitions and disposals):
Increase/(decrease) in trading, available-for-sale and held-to-maturity investments, net
(Increase)/decrease in reserve deposits with the Central Bank of Turkey, net
Increase in originated loans, net
Increase in placements with banks
Increase in trade receivables, net
Decrease/(increase) in due from related parties, net
Decrease/(increase) in banking and customer deposits, net
Increase in trade payables, net
Increase in due to related parties, net
Increase in insurance technical reserve, net
Change in other current assets/liabilities, net
150
2004
2003
310.992.156
13.216.480
(344.042.194)
(26.249.704)
(4.723.622)
(828.862)
83.527.651
(15.470)
(102.051.048)
138.654.279
(5.354.786)
737.784
13.262.870
30.263.531
19.639.741
(68.387.320)
353.364.260
6.503.297
(147.520.320)
(34.808.381)
(3.652.308)
(3.080.534)
(5.363.549)
11.800.957
24.693.285
18.758.791
3.049.000
(3.453.466)
24.256.801
(72.227.958)
57.605.157
172.319.875
141.960.597
(201.124.738)
(926.941.058)
(200.329.417)
(56.155.326)
4.115.781
793.752.804
6.319.961
38.672.929
21.855.592
17.655.885
(572.219.742)
73.527.821
(151.069.844)
(26.543.017)
(4.639.308)
(331.091.461)
10.728.942
99.385.911
12.678.596
(21.644.527)
(360.216.990)
(910.886.629)
2004
2003
(16.485.513)
(74.868.891)
(45.454.610)
15.984.999
(77.175.548)
136.298.240
(48.788.508)
8.074.082
(18.073.682)
(71.883.104)
27.930.828
(39.193.089)
133.939.291
(118.729.015)
139.389.786
(101.379.420)
53.381.015
(403.991.253)
(685.185.739)
2004
2003
47.333.058
28.356.687
25.646.060
14.583.033
4.473.231
2.490.724
36.978.923
258.658.425
6.268.565
27.176.352
17.489.249
16.936.515
122.882.793
363.508.029
Financial expenses:
Interest expense on short-term and long-term borrowings
Due date difference on credit purchases
Other
(128.287.553)
(6.545.790)
(9.262.104)
(258.762.806)
(1.523.334)
(11.287.999)
Financial expenses
(144.095.447)
(271.574.139)
(21.212.654)
91.933.890
Changes in non-finance-segment working capital (excluding the effects of acquisitions and disposals):
Increase in trading, available-for-sale and held-to-maturity investments, net
Increase in bank deposits, net
Increase in trade receivables, net
Increase in due from related parties, net
Increase in inventories, net
Increase in trade payables, net
Decrease in due to related parties, net
Change in other current assets/liabilities, net
Cash used in operations
NOTE 29 - FINANCIAL (EXPENSES)/INCOME, NET
Financial income and expenses for the years ended 31 December 2004 and 2003 are as follows:
Financial income:
Interest income on banks deposits
Foreign exchange gain, net
Amortized cost valuation income
Interest income on trading and investment securities
Due date difference on credit sales
Other interest and commission
Financial income
Financial (expenses)/income, net
Financial (expenses)/income is related with the sectors other than banking.
NOTE 30 - OTHER OPERATING EXPENSES, NET
Other operating income and expenses for the years ended 31 December 2004 and 2003 are as follows:
Other operating income:
Gain on sales of Subsidiaries
Services income
Rent income
Cancellation of provision for the impairment of investment property (Note 15)
Ship operating services income, net
Commission income
Other operating expenses:
Amortisation of goodwill (Note 17)
Provision for loan losses (Note 9)
Transport expenses
Penalties
Impairment of property, plant and equipment (Note 16)
Impairment losses on credit related commitments
Impairment of intangible assets (Note 17)
Impairment of investment properties (Note 15)
Loss from sales of Subsidiary
Other, net
Other operating expenses, net
152
2004
2003
102.051.048
37.483.174
14.007.893
7.305.752
5.786.866
4.891.190
4.455.292
5.973.359
2.615.328
10.804.654
5.958.597
171.525.923
29.807.230
(88.787.289)
(77.808.651)
(24.612.741)
(19.926.790)
(14.387.747)
(13.689.393)
(13.262.870)
(5.719.000)
(5.950.348)
(1.950.966)
(10.748.862)
(88.068.712)
(15.681.969)
(23.200.731)
(11.781.346)
(805.593)
(3.049.000)
(7.266.000)
(24.256.801)
(18.758.791)
(29.148.577)
(1.524.662)
(276.844.657)
(223.542.182)
(105.318.734)
(193.734.952)
NOTE 31 - FOREIGN CURRENCY POSITION
Assets and liabilities denominated in foreign currency held by the Group at 31 December 2004 and 2003 are as follows:
2004
US$
EURO
Other
Total
Assets:
Cash and cash equivalents and reserve deposits
with the Central Bank of Turkey
Financial assets:
- available-for-sale and held-to-maturity
Originated loans
Trade receivables and due from related parties
Inventories
Property, plant and equipment - net
856.600.070
156.074.542
37.278.463
1.049.953.075
81.894.938
732.414.334
1.407.817.166
11.771.000
68.696.546
19.483
12.476.703
38.000
305.485
12.518.948
40.950.000
416.843.525
18.000
19.011.307
1.196.441
4.168.873
42.775.000
678
1.195.000
17.250.000
122.000
602.129
9.610
205.000
-
94.413.886
774.559.334
1.841.910.691
11.911.000
88.309.982
1.225.534
16.850.576
42.813.000
306.163
Total assets
3.172.033.725
693.557.314
56.662.202
3.922.253.241
Bank borrowings
Deposits
Trade payables and due to related parties
Taxes on income
Bond
Long-term trade payables
1.807.923.994
1.491.396.446
1.192.000
295.704.206
73.124.994
3.364.000
645.403.480
110.464.675
58.862.304
309.321
5.904.478
207.000
122.028.568
588.112.746
16.000
39.337.771
4.821.168
114.593.535
5.226
2.016.082
-
3.833.405
55.992.000
85.000
7.405.104
514.000
3.618.608
18.351
-
1.933.785.967
2.135.501.192
1.293.000
342.447.081
78.460.162
3.364.000
763.615.623
110.464.675
58.862.304
314.547
7.938.911
207.000
Total liabilities
4.493.856.898
870.931.096
71.466.468
5.436.254.462
(1.321.823.173)
(177.373.782)
(14.804.266)
(1.514.001.221)
58.561.000
7.420.000
4.215.000
70.196.000
Liabilities:
Net foreign currency position
Off-balance sheet derivative instruments net position
2003
US$
EURO
Other
Total
Assets:
Cash and cash equivalents and reserve deposits
with the Central Bank of Turkey
Financial assets:
- available-for-sale and held-to-maturity
Originated loans
Trade receivables and due from related parties
Property, plant and equipment - net
Intangible assets - net
Deferred tax assets
616.692.512
22.033.781
11.548.455
650.274.748
81.494.809
731.263.710
1.268.261.924
7.492.966
127.298.773
10.616.230
114.979
343.623
171.899
11.171.378
40.440.604
309.067.497
6.562.967
2.238.098
46.427.641
436.168
30.478
-
488.375
9.872.225
744.514
246.882
251.581
-
92.666.187
772.192.689
1.587.201.646
8.237.480
134.108.622
13.105.909
46.542.620
436.168
374.101
171.899
Total assets
2.843.751.425
438.408.612
23.152.032
3.305.312.069
Bank borrowings
Deposits
Trade payables and due to related parties
Taxes on income
1.320.443.207
1.282.164.563
685.318
166.052.640
60.984.718
6.064.269
1.103.440.061
309.320
47.597
206.323.464
520.732.962
1.138
21.837.342
19.383.277
107.702.002
5.225
-
2.163.553
44.704.119
1.138
8.098.573
4.663.394
2.771.075
-
1.528.930.224
1.847.601.644
687.594
195.988.555
85.031.389
6.064.269
1.213.913.138
314.545
47.597
Total liabilities
3.940.191.693
875.985.410
62.401.852
4.878.578.955
(1.096.440.268)
(437.576.798)
(39.249.820)
(1.573.266.886)
(184.760.600)
178.064.636
28.850.531
22.154.567
Liabilities:
Net foreign currency position
Off-balance sheet derivative instruments net position
At 31 December 2004, assets and liabilities denominated in foreign currency were translated into Turkish lira using a foreign exchange rate of YTL1.3421 = US$ 1 and
YTL1.8268 = Euro 1 (2003: YTL1.395835 = US$ 1 and YTL1.745072 = Euro 1).
154
NOTE 32 - SIGNIFICANT ACQUISITIONS AND LEGAL MERGERS
Acquisitions:
The Group has acquired 66,41% of the shares of Do¤an D›fl Ticaret for YTL20.180.047 and therefore goodwill amounting to YTL10.791.007 has emerged.
The Group has acquired 35,30% of the shares of Orta Anadolu Otomotiv for YTL11.666.789 and therefore goodwill amounting to YTL1.859.619 has emerged.
2004
Total cash consideration
Less: net assets acquired at fair value
31.846.835
(19.196.209)
Goodwill (Note 17)
12.650.626
Cash and cash equivalents
12.309.969
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Less: Minority interest
55.136.472
13.692.331
(59.898.403)
(475.395)
(1.568.765)
Fair value of net assets
19.196.209
Goodwill (Note 17)
12.650.626
Total cash consideration
Less: Cash and cash equivalents in Subsidiaries acquired
Cash outflow on acquisition
31.846.835
(12.309.969)
19.536.866
Disposals:
Do¤an Holding sold 30.000 million shares of its Subsidiary, Do¤an Yay›n, amounting to a nominal value of YTL30.000.000 out of the total nominal share capital of
YTL300.093.885 to Deutsche Bank A.G. on 22 January 2004 for a total consideration of YTL159.723.776 in the Wholesale Market of ISE, the share of Do¤an Holding in
Do¤an Yay›n decreased from 76,80% to 66,80% and accordingly, a similar decrease has been realised in the Subsidiaries and Joint Ventures of Do¤an Yay›n (Note 3). The
total net assets sold amounted to YTL98.873.337 and accordingly, a gain of YTL60.850.439 has been reflected in "Other operating income" in the consolidated statement of
income for the year ended 31 December 2004 (Note 30).
The shares of the Subsidiary Hürriyet, amounting to a total nominal value of YTL 27.615.244 have been sold to foreign investors on 4 November 2004 for an amount of
YTL78.531.019. After this sale transaction, the interest of the Group in Hürriyet decreased from 66,63% to 60%. The net asset of Hürriyet that was disposed of amounted to
YTL37.330.410 and the Group recognized a gain of YTL 41.200.609. This gain was included in "Other operating income" in these consolidated financial statements (Note 30).
2003
Holding does not have any material acquisition in the year ended 31 December 2003.
NOTE 33 - COMMITMENTS AND CONTINGENT LIABILITIES
Commitments and contingencies, from which the management does not anticipate any significant losses or liabilities are summarised below:
2004
2003
211.895.522
179.999.071
80.482.299
-
266.904.032
142.233.577
23.272.533
25.480.838
472.376.892
457.890.980
Guarantees and commitments given - non-finance:
a. Commitments given:
Subsidiary shares given as guarantee
Letters of guarantee
Guarantee notes
Blocked equity stocks
The Group has provided bail and mortgages to third parties in the amount of YTL959.449.289 (2003: YTL1.133.139.260) and YTL132.582.663 (2003: YTL150.577.142)
respectively with respect to bank borrowings obtained.
b. Barter Agreements:
The Group, as a common practice in the media segment, entered into Barter agreements. These agreements involve the exchange of goods or services without cash collections
or payments.
At 31 December 2004 and 2003, major barter agreements are as follows:
Subsidiaries and Joint Ventures
Kanal D
Hürriyet
Do¤an Gazetecilik
DBR
Do¤an Prodüksiyon
Do¤an Daily News
Subsidiaries and Joint Ventures
Kanal D
Do¤an Gazetecilik
Hürriyet
DBR
Do¤an Daily News
Do¤an Prodüksiyon
156
2004
Amounts Issued
2003
Amounts Issued
9.261.000
3.026.336
1.070.561
233.508
-
1.751.678
8.813.553
2.859.000
707.756
3.839.372
32.326
13.591.405
18.003.685
2004
Amounts Received
2003
Amounts Received
5.903.000
1.677.297
1.409.000
247.572
-
4.157.341
2.021.375
8.701.920
362.591
39.635
346.870
9.236.869
15.629.732
c. Court cases:
Law cases against the Group amount to YTL94.834.251 at 31 December 2004 (2003: YTL115.303.437).
Compensation to be paid amounting to YTL8.260.810 (2003: YTL9.404.126) represents the compensation and its related interest that has been collected from the defendant
in connection with a case handed over by the Supreme Court to the local court for a second hearing. The case had not commenced as of the balance sheet date, and therefore
POAfi included such an amount as compensation to be paid in the consolidated financial statements due to the uncertain outcome.
Following the conclusion of the case in favour of Türk D›fl Ticaret Bankas› A.fi. ("D›flbank"), one of the Subsidiaries of Do¤an Holding in the finance segment, in 2003
concerning the issue of deducting the accumulated losses from the income of 2002 and the following period, in accordance with Corporate Tax Law article 14/7, and the
discernment of the case later by the Ministry of Finance, the case was concluded in favour of D›flbank by the Council of State. Within this framework, D›flbank acquired the
right to deduct to the accumulated loss amounting to YTL364.501.000. D›flbank deducted a portion of accumulated losses amounting to YTL144.824 from its corporate tax
base in 2003. In addition, D›flbank carried deferred tax assets of YTL34.834.000 on this carried forward loss in the consolidated financial statements at 31 December 2004,
based on the corporate tax base in 2004 of YTL116.112.000. In the subsequent period, the Ministry of Finance applied for a rectification of the Tax Supreme Court’s
resolution. Furthermore, the tax office sent a tax notification dated 20 April 2004 to D›flbank expressing that the deduction of the portion of the accumulated losses
amounting to YTL144.824.000 from the corporate tax base for the period of 2003/4 was not acceptable; the corporate tax liability was therefore YTL15.510.000 and a fine
of YTL16.131.000 was levied. D›flbank has filed a counter action. In addition, D›flbank filed its advance tax declaration, with reservations, for the first quarter of 2004
presenting the amount of accumulated losses but without deducting it from the corporate tax base; D›flbank paid a total of YTL13.371.000 in tax. The legal proceedings are
now in progress and there is no provision in the financial statements of D›flbank regarding this case.
Guarantees and commitments given - finance:
In the banking segment, the normal course of banking activities requires the undertaking of various commitments and it incurs certain contingent liabilities that are not
presented in the accompanying financial statements, including letters of guarantee, acceptance credits, letters of credit and off-balance sheet derivative instruments. The
management does not expect any material losses as a result of these transactions. The following is a summary of significant commitments and contingent liabilities at 31
December 2004 and 2003.
a. Credit related commitments:
The primary purpose of these instruments is to ensure that funds are available to a customer as required. Guarantees and standby letters of credit, which represent irrevocable
assurances that the bank will make payments in the event that a customer cannot meet its obligations to third parties, carry the same credit risk as loans. Documentary and
commercial letters of credit, which are written undertakings by the companies in the finance segment on behalf of a customer authorising a third party to draw drafts on the
Group up to a stipulated amount under specific terms and conditions, are collateralised by the underlying shipments of goods to which they relate and therefore have
significantly less risk.
Cash requirements under guarantees and standby letters of credit are considerably less than the amount of the commitment because the Group does not generally expect the
third party to draw funds under the agreement.
The total outstanding contractual amount of commitments to extend credit does not necessarily represent future cash requirements, since many of these commitments will
expire or terminate without being funded.
The following table shows the outstanding credit related commitments of the companies in finance segment as at 31 December 2004 and 2003:
Letters of guarantee
- Foreign currency
- Turkish lira
Letters of credit
Acceptance credits
Other commitments and contingencies
Less: Provision for credit related commitments
2004
2003
749.457.000
474.715.000
517.495.000
70.311.000
95.124.000
810.927.254
425.032.764
598.739.776
75.021.853
225.416.624
1.907.102.000
2.135.138.271
(17.880.000)
(14.102.660)
1.889.222.000
2.121.035.611
The economic sector risk concentration for outstanding credit related commitments of companies in the finance segment is as follows:
Construction and cement
Metal processing
Wholesale and retail trade
Textiles
Durable goods
Oil and gas
Financial institutions
Food and beverage
Pharmaceuticals, chemicals and dyes
Tourism
Automotive
Media and telecommunications
Agriculture
Other
2004
%
2003
%
417.105.000
320.057.000
169.687.000
152.546.000
96.569.000
95.653.000
93.975.000
57.867.000
45.390.000
42.540.000
36.957.000
17.643.000
12.192.000
348.921.000
22
17
9
8
5
5
5
3
2
2
2
1
1
18
496.591.751
289.496.015
193.311.923
130.871.606
35.745.502
245.119.087
183.935.237
45.923.138
68.087.782
9.998.319
59.310.706
97.053.316
25.347.990
254.345.899
23
14
9
6
2
11
9
2
3
3
5
2
11
1.907.102.000
100
2.135.138.271
100
Maturities of commitments and contingencies are less than one year except for certain amounts of letters of credits which are indefinite.
b. Fiduciary activities:
The Bank Subsidiary of the Group provides custody services to third parties which involve the Group making allocation and purchase and sale decisions. Those assets held in a
fiduciary capacity are not included in these consolidated financial statements. At the balance sheet date the Group has custody accounts amounting to YTL4.926.811.000
(2003: YTL2.561.982.461).
c. Commitments under derivative financial instruments:
The breakdown of forward and spot currency purchase/sale transactions at 31 December 2004 and 2003 are as follows:
US$
EURO
2004
Other
YTL
Total
Forward currency purchases
Currency swap purchases
Interest rate swap purchases
Future purchases
Option purchases
36.624.000
126.463.000
101.250.000
41.595.000
24.904.000
32.012.000
21.777.000
11.515.000
7.440.000
14.559.000
7.395.000
-
47.990.000
46.148.000
24.807.000
124.066.000
187.170.000
101.250.000
70.767.000
61.226.000
Total
330.836.000
65.304.000
29.394.000
118.945.000
544.479.000
Forward currency sales
Currency swap sales
Interest rate swap sales
Future sales
Option sales
61.585.000
50.894.000
101.250.000
33.375.000
25.171.000
24.604.000
21.777.000
11.503.000
4.578.000
4.993.000
15.608.000
-
32.949.000
141.277.000
24.481.000
123.716.000
197.164.000
101.250.000
70.760.000
61.155.000
Total
272.275.000
57.884.000
25.179.000
198.707.000
554.045.000
58.561.000
7.420.000
4.215.000
(79.762.000)
(9.566.000)
Off-balance sheet derivative
instruments net position
158
US$
EURO
2003
Other
YTL
Total
Forward currency purchases
Currency swap purchases
Future purchases
Option purchases
17.212.545
6.775.771
315.488.859
21.523.572
165.020.528
2.767.456
2.038.035
4.306.576
29.133.993
186.698
-
14.725.234
-
57.767.927
194.154.521
9.729.925
317.526.894
Total
339.477.175
191.349.591
33.627.267
14.725.234
579.179.267
Forward currency sales
Currency swap sales
Future sales
Option sales
20.733.797
185.147.482
2.867.636
315.488.860
9.511.150
3.773.805
-
1.870.395
2.906.341
-
24.863.846
-
56.979.188
185.147.482
9.547.782
315.488.860
Total
524.237.775
13.284.955
4.776.736
24.863.846
567.163.312
(184.760.600)
178.064.636
28.850.531
(10.138.612)
12.015.955
Off-balance sheet derivative
instruments net position
NOTE 34 - SUBSEQUENT EVENTS
a) 3,37% shares of POAfi a Joint Venture of the Holding, with a nominal value of YTL11.638.221 were sold to 9 different foreign corporations with a price of YTL4,50 per
share amounting to YTL52.371.995 in total on the Wholesale Market of the ISE as of 9 February 2005.
b) According to the local and international developments in the banking sector, the Holding has decided to investigate the possibilities: including a joint venture, partnership
or share transfer of D›flbank. The Holding has requested to finalize the work of international banks, which make evaluations of such possibilities related to the Holding’s
investigations, and requested their offers, as at the preparation date of these financial statements.
c) At the Board of Directors meeting of Do¤an Holding and POAfi dated 27 December 2004, it was decided that Do¤an Holding and POAfi would participate in Petrol Ofisi
Gaz ‹letim A.fi., with a share of 0,2% and 99% respectively; and Petrol Ofisi Alternatif Yak›tlar Toptan Sat›fl A.fi., with a share of 0,08% and 99.6% respectively. The
former company was established with capital of YTL500.000 for the purpose of performing the activities of transmission, filling, transportation and delivery in the
natural gas market domestically and abroad; and the latter was established with capital of YTL1.250.000 for the purpose of supplying all types of domestic or imported
products to the natural gas market.
Do¤an fiirketler Grubu Holding A.fi.
Oymac› Sokak, No: 51
Altunizade 34662 Istanbul, TURKEY
Phone: +90 216 556 90 00
Fax: +90 216 556 93 98
www.doganholding.com.tr

MUSTER. PDF1-16 DOGAN 2004

Transcription

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