2000

annual report
2000
creating retail synergies
by converging different
boundaries
contents
01
02
04
06
08
Consolidated Financial Highlights
Do¤an Group in Brief
Chairman’s Message
CEO’s Statement
Board of Directors
Review of Operations
10 Do¤an fiirketler Grubu Holding
12 Financial Services
18 Energy
24 Tourism
28 Industry, Trade and Marketing
34 Telecommunications
36 Do¤an Yay›n Holding
52 Social Activities
57 Consolidated Financial Statements
at 31 December 2000 together with independent
auditor’s report
consolidated financial
highlights
Summary Balance Sheets
(US$ millions)
Total Current Assets
Cash and Banks
Marketable Securities
Banking Loans – Current
Trade Receivables
Other Current Assets
Total Non-Current Assets
Property, Plant and Equipment
Other Non-Current Assets
2000
3,263
1,215
652
573
382
441
1,171
550
621
1999
2,441
747
869
392
188
245
471
361
110
Total Assets
4,434
2,912
Total Current Liabilities
Short-Term Bank Borrowings
Banking Deposits
Customer Deposits
Trade Payables
Other Current Liabilities
Total Non-Current Liabilities
Long-Term Bank Borrowing
Other Non-Current Liabilities
Total Shareholders’ Equity
Minority Interest
Total Liabilities and Shareholders’ Equity
2000
2,712
913
345
925
215
314
794
648
146
427
501
4,434
1999
2,061
818
291
657
80
215
199
86
113
353
299
2,912
2000
2,545
1,693
85852
2,344
1,653
691
201
40
161
61
1999
1,746
759
987
1,440
699
741
306
60
2246
74
Summary Income Statements
(US$ millions)
Revenues
Non-Banking and Financial Services
Banking and Financial Services
Operating Expenses
Non-Banking and Financial Services
Banking and Financial Services
Operating Profit
Non-Banking and Financial Services
Banking and Financial Services
Net Income
Balance Sheet Composition
Assets
Liabilities and Shareholders’ Equity
Minority Interest 11%
Total Non-Current
Assets 26%
Cash
and Banks 27%
Short-Term Bank
Borrowings 20%
Total Shareholders’
Equity 10%
Banking
Deposits 8%
Trade Payables 5%
Marketable
Other Current Assets 10%
Total Non-Current
Liabilities 18%
Securities 15%
Trade Receivables 9%
Banking
Loans - Current 13%
Customer
Deposits 21%
Other Current
Liabilities 7%
Income Statement Composition
Revenues
Operating Expenses
Operating Profit
Non-Banking and
Financial Services
20%
Banking
and Financial
Services
29%
Banking
and Financial
Services
33%
Non-Banking and
Financial Services
67%
Non-Banking and
Financial Services
71%
Banking
and Financial
Services
80%
Divisional Analysis of Financial Results
External Revenues
(TL trillions)
Operating Profit
(TL trillions)
Total Assets*
(TL trillions)
Capital Expenditures
(TL trillions)
108
572
68
576
1,780
432
886
27
601
26
469
17
87
* Amount to be deducted from the total as inter segment elimination is TL 900 trillion.
2
3
4
Energy
Other
Media
Finance
Other
Energy
Trade
Media
Finance
Other
-7
Energy
Trade
Media
Finance
Other
Energy
Trade
Media
Finance
-9
Trade
142
43
do¤an group in
brief
In the 1950s, a single company engaged in general trade grew and developed into
one of the largest and most financially strong conglomerates in Turkey - the Do¤an
Group. With far-reaching vision and the ability to evolve beyond the capacity of its
peers, the Do¤an Group has become one of Turkey’s largest conglomerates, made up
of companies from media to financial services, from industry to tourism and from
telecommunications to energy.
Two holding companies presently make up the Do¤an Group: Do¤an fiirketler Grubu
Holding A.fi. (Do¤an Holding) and Do¤an Yay›n Holding A.fi. (Do¤an Yay›n Holding).
Over the years, the Do¤an Group has demonstrated a consistent pattern of growth. At
the end of 2000, the Group posted a net income of US$ 61 million from total gross
sales and revenue of US$ 2,545 million on a consolidated basis.
In addition to Do¤an Holding, ten
Do¤an Group companies are
currently listed and traded on the
Istanbul Stock Exchange (ISE)
including; Do¤an Yay›n Holding,
D›flbank, Ray Sigorta, Milpa, Çelik
Halat, Ditafl, Hürriyet, Milliyet,
Petrol Ofisi and Do¤an Burda
Rizzoli.
The involvement of Do¤an Holding in the financial services sector was strengthened
with the acquisition of D›flbank in 1994. This was followed by the establishment of
other financial companies within the Group to provide leasing, factoring, investment
banking, brokerage and insurance services. The short-term financial services of
D›flbank and D›fl Factoring are complemented by the medium- and long-term financial
services of D›fl Leasing plus the equity brokerage and investment banking services of
D›fl Yat›r›m. Over the past couple of years, the achievements of management have
been quite significant and have resulted in a more efficient and focused Bank. Placing
direct emphasis on improving the MIS has enhanced management’s ability to analyze
risk, profitability and return on capital. Moody’s Investors Service (Global Credit
Research Company) has indicated that it takes comfort from the Bank’s relatively high
liquidity levels and low repo leverage. In a volatile operating environment, D›flbank’s
defensive posture enables the Bank to remain in the game for the long-run,
effectively gaining a solid market share as others exit. High liquidity, a low repo
portfolio and a relatively low gross open foreign exchange portfolio leave D›flbank
well positioned to manage the financial crisis in Turkey.
Hürriyet and Milliyet are two of the leading newspapers in Turkey and are members
of the Do¤an Group. Additionally, the Group publishes various other newspapers and
magazines that cater to the varying tastes of the readership. As a leader in the print
media sector, the Do¤an Group also is involved with distribution, marketing and
printing - all functioning within one administrative body.
The largest media distribution company in Turkey, Yaysat, circulates approximately
95% of the country’s newspapers and magazines and has more than 393 distributors
and 22,000 points of sale in Turkey.
In the second half of 1996, Biryay was established and is as a
joint venture between Yaysat and BBD, the country’s other
major print distribution company. It distributes third-party
products in Turkey, including 40 newspapers and more than
300 magazines and books. The Group’s two magazine
subsidiaries, Hürgüç and AD Yay›nc›l›k, have become Do¤an
Magazines - now a joint venture with Burda of Germany and
Rizzoli of Italy.
An exciting endeavor of the Do¤an Group is D&R, Turkey’s
leading retailer of music, books, magazines and multimedia
products. The Company currently owns 26 stores, in addition
to it, 17 franchised stores located throughout the country.
With the acquisition of Çelik Halat in 1997, the Do¤an Group
augmented its position in the manufacturing industry. The
Company leads this sector with a wide range of strand wire
products, steel cable and a large sales potential in domestic
and international markets. The strong involvement of the
Group in the automotive sector continues with Ditafl, which
commenced production in 1979 and has been the only
company in Turkey supplying original parts to automobile
manufacturers. The Company manufactures tie-rods, torquerods and ball joints licensed by TRW of the USA.
Do¤an D›fl Ticaret oversees the purchase of raw materials for
Group companies. This Company is influential in setting
market prices of paper and iron because it has a large
purchasing and trading volume for both products.
Specializing in the sales of Tofafl and Renault passenger cars,
real estate and computers, Hürriyet Pazarlama is a leading
direct marketing organization. The Company offers attractive
payment terms and conditions to consumers.
Tourism has become an important source of income for the
Do¤an Group. Presently, the Group owns two first-class
holiday villages in prime locations on the southeastern
Mediterranean coast of Turkey. Well known international
tourism groups manage these facilities; Karada Bodrum
Marina, acquired through privatization, is operated by Do¤an
Holding.
CD-ROMs are growing in importance through their ability to
provide multimedia information including sound, animation
and video clips. Do¤an Multimedia was established in 1996
to develop CD-ROMs for the domestic market.
Do¤an Holding, together with its partner Türkiye ‹fl Bankas›
(‹flbank), acquired majority share of Petrol Ofisi A.fi. (POAfi)
via privatization for a total of US$ 1,260 million.
POAfi maintained its lead position in terms of market share
for sales of white and black products, lubricant and A-1 jet
fuel. At the end of December 2000, POAfi had achieved a
market share of 31.9% for white products, 59.7% for black
products and 27% for lubricant sales that are distributed
through a countrywide network of approximately 5,000
dealers under the “Petrol Ofisi” logo.
Since discretion was not exercised with regard to sales of
auto-LPG before the privatization process, approximately 750
Company retailers began co-operating with various primary
and secondary distribution companies which consequently
excluded POAfi from profit sharing. The new management
team, appointed after the privatization process, took this
matter seriously and concluded agreements with supplier
companies.
In addition to Do¤an Holding, ten Do¤an Group companies
are currently listed and traded on the Istanbul Stock
Exchange (ISE) including; Do¤an Yay›n Holding, D›flbank, Ray
Sigorta, Milpa, Çelik Halat, Ditafl, Hürriyet, Milliyet, Petrol
Ofisi and Do¤an Burda Rizzoli.
The Do¤an Group of companies is cognizant of debt it owes
to the Turkish economy and as a social responsibility, the
Group pays its taxes in full and on time for all earned income.
03
chairman’s
message
As we leave behind another hectic year, I am pleased to report that Do¤an Holding
has come one step closer to accomplishing its mission of becoming a global
company. We have specialized and integrated our operations in new media as well
as a number of other areas directly or indirectly related to media and retailing
services.
Year 2000 was in many ways similar to the preceding year which saw the earth
tremble and shake as a result of two major earthquakes in summer and autumn. In
2000, the entire country was shaken by an economic crisis that struck in November
and eventually forced the government to abandon the IMF-backed economic program.
This program initially carried with it great optimism believing it would bring down
inflation to single digit figures within three years. But even though major problems
were encountered during 2000, the Turkish economy once more verified its strength
and potential and continued along the right track soon after the initial shock wore off.
Year 2000 was a period in which
we accomplished major steps
toward reaching our ultimate goal
of becoming a global entity
specialized in all forms of the new
economy, from visual media
services to content provision, from
retailing to financial services and
from energy to telecommunications.
Convergence has been the key
word in our present corporate
culture and communications.
The economic stabilization program, which was implemented at the beginning of
2000, was largely a monetary program based on tight measures to keep the money
supply and foreign currency rates under control which was to result in bringing down
chronic inflation to about 25% by the end of 2000 and to one-digit figures by the end
of 2002. One of the key elements in the program was the crawling peg system which
anchored the value of the Turkish lira to the value of a currency basket composed of
US$ 1 + Euro 0.77. The currency in circulation was made a function of net internal
assets, in other words, excess liquidity was not permitted whereby the amount of
money in circulation was made dependent on the inflow of foreign currency
stemming from exports.
With the start of the program, there was a sharp decline in interest rates, which
triggered private consumption and also imports. With foreign currency rates under
control and projected until June 2000, exporters suffered loss of competitiveness in
international markets while importers flourished with rising domestic demand especially for consumption goods. This development further increased the current
account deficit and - coupled with failing efforts to cut down public spending - gave
birth to additional anxiety within the economy. Rising global oil prices and
unsuccessful privatization of major state-owned enterprises again put pressure on the
flow of revenue that had been previously envisaged by the government. With
accumulating tension in the markets, the crisis surfaced in mid-November after some
international and domestic banks started to sell their T-bill portfolios fearing that
interest rates would rise. Again more tension was created as overnight interest rates
climbed to record high levels - and then, the inevitable happened. Within days,
Central Bank reserves were depleted by some US$ 6 billion
and a major bank, holding excessive amounts of T-bills in its
portfolio, failed to meet its cash commitments and was taken
over by the Savings Deposits Insurance Fund. In spite of this
frantic situation, the government announced its firm backing
of the economic program and did not allow foreign currency
rates to increase beyond levels predicted by the program.
Markets cooled down only after the IMF announced a US$ 6
billion reserve facility to the Central Bank. The year closed
with a major shift from the program’s initial inflation target
but the foreign currency target was met in spite of
everything. It became evident that the economy would not be
able to proceed any further unless a major adjustment was
made to currency rates. This came about by natural economic
forces in February 2001 and the government had to announce
that it was abandoning the program’s currency anchor and
reverting to a floating rate mechanism. This time a major
devaluation unnerved the country. It is certain that for anyone
residing in Turkey, 2001 will be a problematic period.
Nevertheless, we have not lost our belief that every crisis
offers unique opportunities as we have learned time and
again. During the year, although faced with a serious
downturn in economic trends, we did not refrain from
following the strategies we set in front of us previously in our
projected long-term strategy. In fact, year 2000 was a period
in which we accomplished major steps toward reaching our
ultimate goal of becoming a global entity specialized in all
forms of the new economy, from visual media services to
content provision, from retailing to financial services and
from energy to telecommunications. Convergence has been
the key word in our present corporate culture and
communications.
On the way toward accomplishing our mission, we
established ‹fl Do¤an in July 2000 as a joint venture company
between Do¤an Holding and Türkiye ‹fl Bankas› (‹flbank) for
the purpose of acquiring Petrol Ofisi A.fi. (POAfi) from the
Privatization Administration. The privatization of POAfi, the
market leader for retail sales and distribution of petroleum
products in Turkey, has paved the way for ‹fl Do¤an’s further
dynamic development. We believe the POAfi investment will
create synergy with our existing retail activities and is poised
to become a leading enterprise within the Holding’s retailing
group. Further synergy will be sought with our financial
service activities, mainly in banking.
The future plans of ‹fl Do¤an include increasing international
activities by importing crude oil and other petroleum products
from third-party countries and trading activities of crude oil.
It is said that the Chinese symbol for the word ‘upheaval’ is
also the identical symbol for the word ‘opportunity.’ This
being the case, we also believe that in spite of the turmoil
and all of the problems we have faced in the recent past, the
future is not something for us to fear. The Turkish economy
has proven, time and again, that it has the strength and the
ability to right itself even after catastrophic natural
devastation, as we saw in 1999. We also believe that we are
finally on track with the right conditions and the right
programs that will lead us to continuous and secure
economic growth in the coming months. With persistence
and determination, we are moving ahead toward that
prosperity.
At this juncture, I would like to express my appreciation to
everyone who has contributed to the success of the Do¤an
Group of companies. Thank you for your ongoing confidence
and support. It has been the motivating force behind all of
our activities and our determination to succeed.
Ayd›n Do¤an
Chairman
05
ceo’s
statement
Every nation has, in some way, paid a bill for better economic welfare. I believe year 2000
marks an important turning point for the Turkish nation. Now is the time we shall pay our share
to help build a better future for the country.
Long years of negligence resulted in accumulated stress and strain in the Turkish economy. We
have been one of the first countries to speak about privatization yet we could not achieve a
stance of which we might be proud. Domestic debt stock has climbed to intolerable levels and
exports have been overlooked as we completely forgot the miracle we achieved in export
mobilization some ten years ago.
Structural reforms in many vital segments of society, as well as the economy, have been
discussed for many years by: politicians, both from the controlling party and from the opposition;
academicians; and by leaders of industry and civil organizations - yet no major move was
accomplished. As the saying goes, we have reached the end of the line. This year has
demonstrated to us all that Turkey needs a radical change.
The borders of industries are
blurring. In such an environment,
you should stay as close to the
consumer as possible - within the
new forms of businesses, brand
becomes everything. One should
build and manage brand equity in
business environments. It is all
about the new definition of
‘customership’ in retailing and
finally - the digital market place.
Thus, we have identified our
business space and defined our
business philosophy accordingly.
It is extremely demanding, yet thoroughly rewarding, to steer a vessel through turbulent waters.
Year 2000 was a ‘case in point.’ While we were surrounded by many types of risk, political and
investment risks on a more global scale along with interest and currency rate risks on a micro
level, we successfully continued our investments the way we had determined strategically. We
continue to aim at becoming a business group operating on a global scale, delivering all types of
media and media-related services within the convergence concept. These services include the
widest possible range of inter-related activities from financial to retail services, from media and
content provision and from tourism to mass marketing. We believe there are working synergies
between all of the areas in which we have invested and in which we will continue to invest.
Every crisis creates unique opportunities for change and this has also been true during the
events in 2000. In the first half of the year, following the decrease in interest rates, domestic
demand for consumption rose rapidly and, not surprisingly, vanished just as fast in the last
quarter. Since the second quarter of the year, economic indicators strongly signaled the
approaching liquidity problems. In all of our business segments, we were fully prepared for the
liquidity squeeze that triggered the crisis in November. Due to our diligence and foresight, we
were able to continue uninterruptedly with all aspects of our business services.
With regard to financial services, our flagship company, D›flbank, followed economic
developments closely, emphasized liquidity and refrained from making excessive investments in
government securities. This strategy was carried forward to its financial subsidiaries in leasing,
factoring, brokerage and investment banking and insurance.
‹fl Do¤an began operation in July 2000 as a joint venture company between Do¤an Holding and
‹flbank for the purpose of acquiring Petrol Ofisi A.fi. (POAfi) from the Privatization
Administration. POAfi is the market leader for retail sales and distribution of petroleum products
in Turkey. The acquisition of POAfi has added an important link in the retail marketing chain for
the Group. Further expansion is planned at POAfi, thanks to the mutual experience already in
place at Do¤an and at ‹flbank. The management at ‹fl Do¤an believes that in the coming years
POAfi will generate exciting results paralleling a more stable
economy.
We believe export related businesses and tourism will become the
superstars of the Turkish economy very soon. These two business
sectors are presently the powerhouses behind the Turkish economy,
generating the much needed foreign currency income. Do¤an Holding
has a long-time presence in tourism with investments ranging from
ownership and management of holiday resorts, a yacht marina and a
travel agency. All of these companies are poised to perform well in
the coming years, earning foreign currency and contributing to the
early recovery of the economy.
Industrial companies within the Group made a strong showing during
2000 and new technology and product development investments
were ongoing. At Çelik Halat, the annual capacity utilization ratio
stood at approximately 87% and carried a domestic market share of
55%. Of total production, 70% is sold to the domestic market and
30% is exported. The new bead wire coating line will be
commissioned in the spring of 2001 and will achieve the highest
quality available anywhere in the world.
With the exception of the last two months of 2000, Turkey
experienced a good year in the automotive sector. Ditafl achieved
successful results in 2000, with increased net sales and profit
maintaining a 76% share of the total tie-rod demand in the original
auto-equipment market. Regarding the spare parts trade, Ditafl
commands a 27% share. In 2000, Ditafl exported goods to Italy,
Switzerland, Germany, the UK, the USA, Singapore, Egypt, Israel and
other countries.
Telecommunications is an area of strategic interest for the Do¤an
Group. In Do¤an Group’s D&R outlets, consumers can access a
product range with Yaysat providing logistic support distributing
throughout the country. In the telecommunications sector, the vision
of the Do¤an Group, an important part of the ‘convergence concept,’
is to play an effective and vigorous role as a distributor by creating
synergy with its expanding media and Internet activities.
Newspaper publishing, traditionally the core business of the Do¤an
Media Group, continued to grab a 45% share of the market in terms
of average daily circulation.
Internet is rapidly becoming the medium for business and banking
transactions. In April 2000, Do¤an Online (DOL) launched its ISP
services ‘e-kolay’ and now provides content-rich coverage for a wide
variety of interests and sectors. This was an initial step to expand
more into e-business and e-banking while exploring new
opportunities within B2B and B2C IT-based business models.
Do¤an Media Group’s strategy extends to subscribers of digital
broadcasting services being able to derive benefit from the Group’s
ISP services and banking expertise to experience home-banking,
home-shopping and Internet activities. In addition, synergies with
other companies such as D&R, DMP and the Group’s distribution
and logistics arm, Yaysat, will allow the Group to offer a complete
e-commerce platform.
We are aware that none of our past achievements could have been
accomplished without a staff composed of well-trained and
experienced professionals. We are assisting many young people to
develop their talents through the Young Communicators Award that
is open to students studying communications at all Turkish
universities. This award program has been organized by the Ayd›n
Do¤an Foundation for many years. Students are requested to submit
their work in the following areas; essays, visual communications,
radio, advertising, public relations and Internet broadcasting. The
Foundation provides scholarships and other awards to the winners
and other participants, some of whom are also offered employment
at Group companies.
I would like to thank each and every staff member for turning this
troublesome year into a year of new business opportunities for
further growth for the Do¤an Group. It is my pleasure to also thank
our business partners, customers and shareholders for their ongoing
trust in the Group’s activities. We are in business for them - to
satisfy their needs - with the highest attainable quality always ready
to provide the attention they deserve.
‹mre Barmanbek
CEO and Executive Member of the Board
07
Board of Directors
Ayd›n Do¤an, Chairman
‹mre Barmanbek, CEO and Executive Member
Sema Do¤an, Member
Arzuhan Yalç›nda¤, Member
Çetin Hacalo¤lu, Member
Bora Gemalmazo¤lu, Member
Taylan Bilgel, Member
Prof. Dr. Mustafa Aysan, Member
Orhan Karabulut, Member
board of
directors
Ayd›n Do¤an
Ayd›n Do¤an was born in 1936. Mr.
Do¤an attended Istanbul Economy
and Commerce Academy where
his leadership qualities were first
recognized and earned him the
title of Student Community leader.
In 1958, while he was still at
school, he founded his own
company. He began transporting,
contracting and other businesses
related to automobiles,
commercial vehicles and
construction equipment. He was
engaged in various other
enterprises such as the sale of
grain and wholesale of
pharmaceuticals until 1970.
In 1974, Mr. Do¤an founded his
first industrial company and
participated as a member of the
Assembly and Administrative
Board of the Istanbul Chamber of
Commerce. In the years that
followed, he served as a member
of the Board in Turkey’s Union of
Chambers and Stock Markets.
With the acquisition of the daily
newspaper Milliyet in 1979, Mr.
Do¤an entered the publishing
sector. Once the "newest
publisher" in the sector, today he
is the most senior of all "nationwide newspaper owners".
Between 1986 and 1996, he
became the Head of Turkey’s
Newspaper Owners’ Union. At the
WAN - World Association of
Newspaper - meeting held in
Tokyo in 1998, Mr. Do¤an was
elected to serve as the first
Turkish board member in that
organization. In 1999, he was
awarded the Turkish Outstanding
Service Medal and the same year,
was honored by Girne American
University in Cyprus and awarded
with the certificate of Doctor of
Human Letters. The following year,
Mr. Do¤an received an Honorary
Doctorate from the Aegean
University in Turkey.
Since 1977, Mr. Do¤an has been
among the highest taxpayers
registered with the Istanbul
Chamber of Commerce. He
initiated cultural and educational
services with the establishment of
the Ayd›n Do¤an Foundation in
1996. To date, no less than five
schools have been built and
named after himself and family
members.
Sema
Tayfun
‹mre
Orhan
Bora
Do¤an
Bayaz›t
Barmanbek
Karabulut
Gemalmazo¤lu
Since the establishment of
Do¤an Holding in 1983, Sema
Do¤an has served as a member
of the Board of Directors and
President of the Tourism
Group. She has pioneered
many new programs in
Turkey’s tourism industry
helping to increase tourism
revenue of both the country
and Do¤an Holding. Tourism
activities of the Holding have
expanded and diversified into
different segments under her
management.
Born in Diyarbak›r in 1957,
Tayfun Bayaz›t graduated from
Southern Illinois University in
1980 with high honors and a
degree in Mechanics and
Materials Engineering. He
earned an MBA in Finance and
International Business from
Columbia University in New
York. Mr. Bayaz›t began his
career at J.C. Penney & Co.
followed by senior positions at
Citibank. He was employed in
the Çukurova Group for many
years and at Yap› Kredi (SEVP),
Interbank (CEO) and Banque de
Commerce et de Placements
S.A., Geneva, Switzerland
(CEO), before joining the Do¤an
Group in September 1999. Mr.
Bayaz›t presently serves as
Chairman, Vice Chairman,
Executive Member and
Member on several Boards
within Do¤an Group.
Born in 1942, ‹mre Barmanbek
graduated from Ankara
University, Faculty of Political
Sciences with a degree in
economics and finance. Her
career began at the Ministry of
Finance, as an assistant tax
auditor in the Board of
Accountancy Experts.
Mrs. Barmanbek was later
promoted to the post of Chief
Accountancy Expert at the
Ministry of Finance where she
also served as a member of the
Tax Appeals Commission. After
a successful career at the
Ministry, she resigned her post
as a civil servant in Ankara to
begin working in the private
sector. She joined Do¤ufl
Otomotiv as Finance Director
and was then promoted to the
position of General Manager in
the same organization.
Continuing as Financial
Coordinator of the Do¤an
Group, Mrs. Barmanbek
became Chief Financial Officer
in 1998 and finally achieved
her current position as CEO
and Executive Member of the
Board in 1999. With a dynamic
management style and her
focus on value-added
enhancements for the Do¤an
Group, she was presented with
the "Best Woman Manager of
the Year Award in Turkey".
Orhan Karabulut was born in
Kocaeli in 1927. He graduated
from the Naval Academy in
1948 with the rank of
Lieutenant. After serving in
various junior, senior and
command positions within the
Turkish Navy, he was
promoted to flag rank in 1973
and appointed to the post of
Commanding Officer of the
Naval Academy. He was
promoted to the rank of
Admiral in 1985 and assumed
the position of Secretary of the
National Security Council.
From 1986 to 1988, he
commanded the Turkish Naval
Fleet. Later that year, he
assumed the post of
Commander-in-Chief of Turkish
Naval Forces, the highest
position in the Turkish Navy.
Following his retirement from
the Navy in 1990, Admiral (Ret.)
Karabulut joined the Do¤an
Group as a member of the
Board of Directors of Do¤an
Holding.
Bora Gemalmazo¤lu was
born in Erzurum in 1941
and is a graduate of the
Faculty of Political
Sciences at Ankara
University. He started his
professional career at
Türk Demir Döküm A.fi. in
1962. Prior to his
departure, his last position
was Finance Manager at
the same company. From
1972 to 1986 Mr.
Gemalmazo¤lu held
various positions at
Sinangil Holding before
leaving this company, he
had achieved the position
of General Manager. He
joined Do¤an Holding in
1986.
Tayfun Bayaz›t was appointed
CEO of D›flbank as of 2001 and
has concluded the
responsibilities and authority
as Vice Chairman of the Do¤an
Group.
Presidents
Sema Do¤an, Tourism Group President
Mehmet Ali Yalç›nda¤, Media Group President
Çetin Hacalo¤lu, Finance Group President
Bora Gemalmazo¤lu, Industry, Trade and Marketing Group President
Eflref Sevim, Financial Affairs Group President
Arzuhan
Çetin
Taylan
Prof. Dr.
Mehmet Ali
Eflref
Yalç›nda¤
Hacalo¤lu
Bilgel
Mustafa Aysan
Yalç›nda¤
Sevim
Arzuhan Yalç›nda¤ is a
graduate of the American
College in London and
Bo¤aziçi University in Istanbul.
She began her professional
career by working in various
media companies within the
Group and has initiated and
managed the establishment of
some of the Group’s media
companies. Currently, along
with her duties as a member of
the Board, Mrs. Yalç›nda¤ is
responsible for visual media of
the Do¤an Group.
Çetin Hacalo¤lu graduated
from Ankara University and
completed his graduate
studies at the University of
Pittsburgh and the Universite
de Paris. He began his
professional career at the
Turkish Treasury. From 1969 to
1973, Mr. Hacalo¤lu worked at
the OECD in Paris and served
as Deputy General Director
and General Director of the
Turkish Treasury from 1973 to
1980. He served as Minister
and Deputy Head of the Turkish
Delegation to OECD in Paris
between 1981 and 1985 and
later served as an Advisor to
the Prime Minister in Ankara.
Born in Ankara in 1942, Taylan
Bilgel graduated from Ankara
College in 1963 and went on to
graduate from the Academy of
Economics and Commercial
Sciences in Ankara in 1971. He
began his professional career
as the owner of the Gül Palas
Hotel in Ankara and since 1983
he has been the Chairman of
the Board of Directors of
Anadolu Otomotiv Tic. ve San.
A.fi. of which he is the founder.
Mustafa A. Aysan was born in
Tarsus, Turkey in 1933. He
graduated from the Tarsus
American Collage in 1952 and
received his first university
degree in economics at
Istanbul University in 1957. In
1962, Mr. Aysan was awarded
an MBA degree from Harvard
University in the United States
and his doctorate from Istanbul
University in business
administration in 1962. Prof.
Aysan began teaching at
Istanbul University in 1959 and
received his full professorship
in 1974 and is presently
teaching at Koç University. He
joined the Board of Directors
of the Do¤an Group in 1996.
Born in 1964 in Istanbul, Mr.
Yalç›nda¤ is a 1989 graduate of
ACL having earned high honors.
In 1990, he joined Do¤an D›fl
Ticaret which manages the
entire foreign procurement of
the Do¤an Group. A year later,
he was appointed a member of
the Executive Committee of
Do¤an Holding and in 1992 he
joined the daily Milliyet as the
Assistant General Manager. In
1994, Mr. Yalç›nda¤ was
appointed Vice President of
Milliyet. He also managed the
establishment of the Simge
Group and launched five new
brands in the Turkish daily
newspaper market. The same
year, the Group bought the
largest Turkish daily newspaper,
Hürriyet. As a result, the media
companies of the Do¤an Group
required a new structure under
the umbrella of Do¤an Yay›n
Holding, and Mr. Yalç›nda¤
assumed the position of first
Vice President in 1996.
Eflref Sevim was born in
Orhangazi, Bursa, in 1959
and is a graduate of the
Faculty of Political
Sciences at Ankara
University. After his
graduation from the
university in 1982,
Mr. Sevim joined the
Board of Accountancy
Experts at the Ministry of
Finance in 1983. In 1994,
he joined Ak Denetim
(a CPA firm) where he
served as a partner until
1999. Since July 1999, he
has headed the Financial
Affairs Group at Do¤an
Holding.
From 1987, he served as CEO of
Töbank and between 1992 1994, served as CEO of
Alternatifbank. Since 1994, Mr.
Hacalo¤lu has been the
Chairman of D›flbank. He
serves as Chairman, Member
and Executive Member to
several Boards within Do¤an
Group.
Çetin Hacalo¤lu serves as a
Member of the Board of
Economic Research
Foundation; the auditor of the
Turkish Economic and Social
Studies Foundation; a Member
of the Board for the Ayd›n
Do¤an Foundation and a
member to the Social
Transparency Association;
He is also the author of a book
and various published articles.
Professor Aysan serves on the
Board of Directors at
Finansbank as Vice Chairman
and as a board member at FIBA
Holding. He is a trustee of the
Turkish Education Foundation
and Chairman of the Board of
Hakk› Demir Foundation and is
the author of 14 books.
Professor Aysan writes a
column for the daily
newspaper, Radikal, which is
part of the Do¤an Group.
In 1998, he became President of
Do¤an Yay›n Holding where he
has worked to create areas of
synergy which serve all of the
publishing companies within the
Media Group. In the beginning of
1998, Mr. Yalç›nda¤ managed
road shows and implemented
the IPO of the Holding Company.
As Group President, he worked
to create the corporate identities
of all affiliated companies and
implemented foreign
partnerships for the Books with
Egmont Group (1996), the
Magazine Group with Burda and
Rizzoli (1998) and News TV with
CNN (1999) - CNN Türk. He also
established the D&R chain
stores after forming the Books
and Magazines companies as
separate corporate identities.
09
do¤an
flirketler grubu
holding
technology
media
telecommunications
Do¤an Group is planning to attain a leadership position in the “New Economy” and to create additional
synergies with its existing lines of businesses.
Financial Results
Finance, Trade,
Energy and Other
Segments
(in terms of the purchasing power of the
Turkish lira at 31 December 2000)
External Revenues
(TL trillions)
1,278
1999
2000
854
Operating Profit
(TL trillions)
178
1999
2000
118
Financial Results
Finance, Trade,
Energy and Other
Segments
(in terms of the purchasing power of the
Turkish lira at 31 December 2000)
Total Assets
(TL trillions)
3,409
1999
2000
2,278
Capital Expenditures
(TL trillions)
36
1999
2000
29
do¤an flirketler grubu holding
The privatization of POAfi, the market leader for retail
sales and distribution of petroleum products in
Turkey, has paved the way for ‹fl Do¤an’s further
dynamic development. We believe the POAfi
investment will create synergy with our existing retail
activities and is poised to become a leading
enterprise within the Holding’s retailing group.
financial services
prudent and wellcalculated strategies
lead to favorable results
in difficult times
With expertise in corporate and consumer banking, international trade finance and the capital markets,
D›flbank is one of the most prominent institutions in the Turkish banking sector due to its deep-rooted tradition
of providing excellent risk management, a strong capital base, up-to-date technological infrastructure and high
quality human resources.
D›flbank Financial Highlights*
(US$ millions)
Total assets
Liquid assets
Loans
Securities portfolio
Customer deposits
Shareholders’ equity
Net Interest income
Net income before taxation and monetary loss
Net income
Selected Financial Ratios
Return on average assets
Return on equity
Total Assets/Equity
Total Loans/Equity
Capital Adequacy Ratio (%)
2000
2,592.4
1,676.7
683.4
348.7
942.6
379.7
241.2
137.4
102.5
1999
2,229.9
1,556.2
496.6
659.1
714.8
283.3
278.7
240.0
82.8
4.2
42.9
6.8
1.8
17.9
4.3
52.1
7.9
1.8
18.1
*Extracted from the audited, consolidated and inflation-adjusted financial
statements of D›flbank and its subsidiaries.
BANKING
D›flbank
D›flbank is a commercial bank based in Istanbul, Turkey.
Founded in 1964 by the Bank of America and Türkiye ‹fl
Bankas› (‹flbank), D›flbank has been part of the Do¤an
Group since 1994. D›flbank’s shares are quoted on the
Istanbul Stock Exchange.
D›flbank operates through a domestic network of 104
branches, an Internet branch and a Call Center. The Bank
manages an offshore branch in Bahrain and subsidiary
banks in Malta, the Netherlands and Northern Cyprus.
With expertise in corporate and consumer banking,
international trade finance and the capital markets,
D›flbank is one of the most prominent institutions in the
Turkish banking sector due to its deep-rooted tradition of
providing excellent risk management, a strong capital base,
up-to-date technological infrastructure and high quality
human resources.
In addition to traditional banking services, the Bank also
provides insurance services as an A-type agency of Ray
Sigorta A.fi., also a Do¤an Group company.
Despite the financial crisis experienced in Turkey in the last
two months of 2000, D›flbank posted significant growth in
the balance sheet and net income; all targets for the year
were met with regard to each business segment. The Bank
demonstrated its ability to make profit through core
banking activities, recording a net income of US$ 102.5
million as of December 31, 2000. In inflation adjusted
terms, the total shareholders’ equity in 2000 increased by
US$ 96.4 million to reach US$ 379.7 million.
The resulting flexibility in the balance sheet structure put
D›flbank in an advantageous position even during these
times of market volatility when compared to its
competitors. In line with the overall strategies of the Bank,
the Treasury Department accelerated client-driven business
operations. Following the restructuring of the TMU –
Treasury Marketing Unit, a broad spectrum of new treasury
products was introduced. Furthermore, a strong marketing
effort was directed toward D›flbank’s international
presence and additional lines and counter party limits were
obtained. International relationships gained scope and
depth with the addition of more structured products to the
Bank’s existing corporate services.
D›flbank moved closer to its goal of becoming a larger,
more active bank with a strong customer franchise among
corporate, commercial and retail customers. Fifty branches
were opened during the year, mostly aimed at serving the
commercial and retail banking customers. D›flbank is keen
to establish lasting relations with new customers in order
to augment its sustainable revenue. Customer
representatives provide personalized service to all
commercial customers while offering tailor-made solutions
to their financing needs. Special service models for
different customer segments have been applied that
classify customers with revenue under US$ 2 million as
"dynamic entrepreneurs" to whom specifically designated
customer representatives are assigned.
13
D›fl Yat›r›m Financial Highlights
(US$ millions)
2000
Balance Sheet
Total assets
Cash and due from banks
Investment securities
Funds borrowed from banks
Shareholders’ equity
17.4
13.0
0.3
10.2
1999
30.4
11.8
15.4
19.4
5.5
Income Statement
Brokerage fees & commissions
Net interest income
Net interest income after provision
for loan and FX losses
Operating expenses
Income before tax and monetary loss
Net income after tax and monetary loss
2000
1999
8.4
6.8
3.4
7.9
6.8
(5.6)
9.6
4.5
5.6
(3.4)
5.6
1.7
financial services continued
BROKERAGE AND INVESTMENT
BANKING
D›fl Yat›r›m
During the year 2000, D›fl Yat›r›m became a more extensive
player in the Turkish capital markets. Market share in
equity trading increased to 1.46% in 2000 from 1.31% in
1999 as the number of active clients reached 10,000. The
three mutual funds under management had an average size
of US$ 27 million.
The Istanbul Stock Exchange started the year at a peak.
The completion of the IMF stand-by agreement led to a
significant decline in interest rates and a surge in the stock
market. The ISE-100 Index shot up from a low of 1.1 cents
in the aftermath of the earthquakes in the second half of
1999, to a peak of 3.5 cents in mid-January 2000. Profittaking sales accelerated sending the Index down to 2.4
cents in late February. The index maintained a range
between 2.2 – 3.2 cents until the beginning of September
when it became apparent that there would be delays in the
implementation of further structural reforms and anxiety
rose over the rising current account deficit. The Index fell
below the 2-cent level to as low as 1.5 cents before
recovering slightly back to the 2-cent level in October, and
hovered at this level until late November when a number of
factors came in to play in the markets. Consequently, the
ISE-100 Index began a downward spiral that reached a low
of 1.08 cents on December 4. Despite the downturn in
December, total transaction volume of the ISE in 2000 was
US$ 181.9 billion, a significant increase over the 1999
volume of US$ 84.0 billion.
Results for the year were excellent. Total non-interest
income rose to US$ 15.2 million, up from US$ 11.3 million
a year earlier. Of this amount, US$ 8.4 million was derived
from brokerage fees and commissions, compared to US$
3.4 million in 1999. Net income climbed to US$ 4.5 million,
compared to US$ 1.7 million in 1999. Shareholders’ equity
increased by 86% to US$ 10.2 million from US$ 5.5 million
at the end of 1999. Operating with a staff of 61 and
drawing on the synergy created with D›flbank’s branch
network, the Company significantly increased its service
efficiency and customer base at the same time.
Performance of Ray Sigorta
(US$ millions)
2000
Premiums
Generated
53.0
7.3
4.3
2.9
67.5
Accident
Fire
Transportation
Engineering
Life & Health
Total
INSURANCE
1999
Claims
Settled
21.3
3.8
2.0
1.0
28.1
Premiums
Generated
46.3
6.4
4.6
2.1
58.4
Claims
Settled
19.5
2.4
2.7
0.8
25.4
late payment of premium installments and, therefore, all
premiums booked represent collectable amounts.
Ray Sigorta
Ray Sigorta was chartered in 1958 in participation with
predominantly state-owned transportation enterprises.
Operating with this type of shareholder structure, the
Company has dealt primarily with the transportation
industry and has gained valuable experience in that sector.
The Do¤an Group acquired a majority of the shares of Ray
Sigorta from the Privatization Administration. Currently, Ray
Sigorta is a private sector company and is listed on the
Istanbul Stock Exchange.
The portfolio of Ray Sigorta shows a broad client base
including well-known names such as Turkish Airlines (THY),
Turkish Maritime Lines and many individual clients. Ray
Sigorta, utilizing D›flbank branches, in addition to 350
agents of its own, generated an insurance premium of TL
42.4 trillion in 2000. The Company has a market share of
3.5% within the sector comprised of 41 non-life insurance
companies.
Ray Sigorta has issued the largest policies in Turkey and is
widely recognized in the international reinsurance sector.
In addition, Ray Sigorta has one of the highest premium
collection ratios in the marketplace. This high collection
ratio enables Ray Sigorta to maintain an investment
portfolio of strong and liquid financial assets. The Company
consistently follows a precise cancellation policy regarding
Ray Sigorta was not seriously affected by the two
earthquakes that hit one of the most industrialized regions
of the country in August and November 1999. All claims
that aroused regarding earthquake damages were settled
promptly - earning high client satisfaction levels. The
Company has made a name for itself in the industry by
settling all claims in an efficient and timely manner.
The medium-term strategy of the Company is based on
remaining one of the strongest insurance companies in the
marketplace capable of collecting premiums in due time,
thus creating additional funds for new investments. The
year 2000 marked the completion of the new Headquarters
Building, adding value to the investments of the Company.
Ray Sigorta acknowledges that being part of the Do¤an
Group offers a unique opportunity to broaden its client
base. The Company views this fact along with a careful
selection of new agencies as a strategy to increase market
share and attain further growth.
Do¤an Hayat Sigorta
Do¤an Hayat Sigorta, established in January 1998,
operates through life, health and personal accident
branches.
15
Do¤an Hayat Sigorta Premium Income and Technical Profits
(US$ millions)
2000
Branches
Life
Health
Total
Premium
4,506,725
6,540,007
11,046,732
Technical
Profit
1,358,218
1,356,171
2,714,389
Premium
Increase
129%
27%
56%
1999
Technical
Profit
Increase
94%
93%
93%
Premium
1,965,795
5,135,883
7,101,678
Technical
Profit
701,769
701,412
1,403,181
Premium
Increase
212%
85%
108%
1998
Technical
Profit
Increase
178%
69%
110%
Premium
630,634
2,782,732
3,413,366
Technical
Profit
252,462
414,738
667,200
financial services continued
Total premium production in the Turkish insurance sector
was US$ 2,625 million in 2000. Share of life and health
insurance was 29% (US$ 754 million), while other branches
accounted for 71% (US$ 1,871 million). The realized
premium income in 1999 was US$ 3.4 million, and at the
end of 2000 with a 224% increase, the total was US$ 11
million. With an increase of 114%, the Company’s market
share of 0.7% in 1999 rose to 1.5% at the end of 2000. In
the past three years, Do¤an Hayat Sigorta increased the
profitability of its balance sheet and technical results and
now leads the competition.
The Turkish economy is undergoing major changes during
these turbulent times; however, Do¤an Hayat Sigorta will
continue to grow and enhance its services without loss of
its market share, all the while increasing its technical
profitability. Since its establishment, the Company has
gained a reputation as a dominate force in the insurance
sector, supported by a professional and well-trained staff,
keen sales teams, up-to-date technology and most
importantly, the synergy created with other Do¤an Group
companies.
Pension fund schemes play an essential role in the
generation of premium income in developed economies
where they are regarded as a means of long-term
investment. In Turkey, the first steps toward establishing
private pension funds came about with the passing of the
Private Pension Law on March 28, 2001.
16
With a talented well-trained staff and technical
infrastructure, Do¤an Hayat Sigorta is ready to provide
services in the pension area. The Company aims to become
one of the largest companies is this segment of the
insurance market and plans to generate substantial income
through the synergy created with the Do¤an Group. Aiming
for a market share of 5%, Do¤an Hayat Sigorta is planning
to increase premium income by an addition of between
US$ 250 million to US$ 500 million.
LEASING
D›fl Leasing
D›fl Leasing complements the short-term corporate lending
activities of D›flbank and the short-term receivable
financing of D›fl Factoring with its own medium-term
financial leasing services.
Risk diversification and asset quality are key concepts at
D›fl Leasing. The Company is determined not to allow any
specific risk category (in terms of industry and/or
commodity group) to make up more than 20% of the total
leasing portfolio. Despite the overall negative sentiment
toward new investments because of the poor economic
conditions that prevailed all throughout 2000, D›fl Leasing
performed rather successfully and posted favorable results.
D›fl Leasing had a 4% share in total fixed asset
investments as of December 2000, reflecting a 100%
increase over the previous year. Business volume rose from
D›fl Leasing Financial Highlights
(US$ millions)
Total assets
Leasing receivables
Total shareholders’ equity
Profit after tax and loss on monetary position
US$ 25 million at year-end 1999 to US$ 58 million at yearend 2000. This increase in business volume boosted
profitability and D›fl Leasing generated a net profit of US$
1.9 million for 2000; 72% over the previous year.
Following the spill-out effects of the liquidity crisis on the
overall economy in 2001, D›fl Leasing will apply a prudent
credit policy and focus primarily on the big-ticket
transactions with major D›flbank clients. D›fl Leasing aims
to increase its market share to 5% and thus become one of
the major players in the sector.
FACTORING
D›fl Factoring
D›fl Factoring was established in 1992 as the factoring
subsidiary of a private bank. After acquisition by D›flbank, a
leading mid-size Turkish bank, in July 1995, operations
began in January of the following year. The Company has
experienced rapid and substantial growth since it was
acquired and today ranks among the leading factoring
companies in Turkey. Offering a full range of international
and domestic factoring services, D›fl Factoring
complements the short-term commercial lending and trade
finance activities of its parent bank.
In its inaugural year 1997, D›fl Factoring ranked fifth among
26 companies in the local Factoring Association in terms of
total turnover. It was also among the top five Factors Chain
2000
65.4
42.4
6.6
1.9
1999
31.8
21.4
4.4
1.1
International (FCI) members in Turkey. New heights were
reached in 1998 in spite of a general slow-down in the
economy. At the end of that year, D›fl Factoring ranked
fourth in terms of total turnover and sixth in terms of
international business volume.
In 1999, not withstanding the earthquakes and economic
stagnation, D›fl Factoring continued to demonstrate prudent
growth, never deviating from its predetermined route to
success. Finally in the year 2000, D›fl Factoring reached
large numbers in clients and portfolio size, which affirmed
its place among the top echelon of factoring companies in
Turkey. This is attributable to its staff of young and
dedicated professionals that aspire to deliver the very best
to the marketplace.
D›fl Factoring draws on a synergy created with its parent
bank, utilizing the broad-based D›flbank branch network. In
addition to its Head Office in Istanbul and Representative
Office in Izmir, D›fl Factoring also delivers factoring services
via D›flbank’s branch network covering all major regions of
the country.
At the end of 2000, total assets of D›fl Factoring stood at
US$ 60.7 million, of which US$ 35.2 million represent
factoring receivables. Total turnover amounted to US$
238.4 million, including US$ 39.8 million derived from
international transactions.
17
energy
moving ahead rather
ambitiously in Turkey’s
fast growing energy market
Currently, less than 13% of the electricity in Turkey is generated by the private sector. This level is likely to
increase significantly in the near future. By gaining an early foothold in this area, the Do¤an Group extends
its chances of participating in potential projects and is positioning itself as an experienced partner to direct
foreign investors.
ENERGY
The electricity sector is strategically important to the
Do¤an Group, which plans to be active in both distribution
The Do¤an Group aims at becoming a power generating,
and generation.
gas & electricity retailing, multi-utility and multi-regional
powerhouse by:
The Group is also anticipating in pursuing projects related
to natural gas trade and distribution. The natural gas sector
• Emphasizing operational improvement
in Turkey is in a transition period and deregulating efforts
are underway.
• Creating the ability to access a large consumer base
Fuel
• Exploiting opportunities to develop retail businesses
Do¤an Holding is determined to retain its position as one
ENERGY DISTRIBUTION
of the major players within the energy sector and has
prioritized development of new ventures in this field. The
Electricity
privatization program has allowed the Do¤an Group to
pursue and finalize one of Turkey’s most prominent and
Currently, less than 13% of the electricity in Turkey is
highly valued investments; the acquisition of Petrol Ofisi
generated by the private sector. This level is likely to
A.fi. (POAfi).
increase significantly in the near future. By gaining an early
foothold in this area, the Do¤an Group extends its chances
Do¤an Holding, together with its partner Türkiye ‹fl Bankas›
of participating in potential projects and is positioning
(‹flbank), acquired majority share of POAfi via privatization
itself as an experienced partner to direct foreign investors.
for a total of US$ 1,260 million. With a 51% share of the
Company, the new management will seek to implement
19
By acquiring the majority of POAfi shares, Do¤an Holding is determined to increase its exposure in the
energy sector. It also believes that POAfi will create a synergy with the existing retailing activities of
the Do¤an Group.
energy continued
various cost saving and income generating initiatives to the
cooperation with POAfi. All of the previous objectives were
existing businesses, impacting substantially on its
made possible due to the Company’s highly qualified
profitability. It will also initiate the development of new
professionals with their long experience in foreign trade.
business opportunities such as non-fuel retailing and the
upgrading of automotive lubricants and auto LPG sales.
The future plans of ‹fl Do¤an include the following projects
and activities, some of which have already started:
‹fl Do¤an Petroleum Investments Company
• Building new pumps for auto LPG sales at existing
‹fl Do¤an was established in July 2000 as a joint venture
POAfi oil stations,
investment between Do¤an Holding and ‹flbank with the
purpose of acquiring POAfi from the Privatization
Administration. The privatization of POAfi, the market
• Establishment of new and modernization and
restoration of existing oil stations,
leader for retail sales and distribution of petroleum
products in Turkey, has paved the way for ‹fl Do¤an’s
• Maximizing revenue from non-fuel retailing,
further dynamic development.
• Increasing international activities by importing crude
The Company’s vision is based on a continuous
oil and other petroleum products from third-party
improvement in efficiency to satisfy customer
countries,
requirements, while caring for the environment, increasing
the Company’s market share and making further
acquisitions to complement existing product lines in
20
• Supplying oil products to power plants and other
production facilities,
• Investment in the Company’s own sea-going tankers in
impact the current situation. A series of austerity measures
accordance with IMO (International Maritime
to be taken by the government to achieve economic
Organization) and EU rules, leading to the delivery of
stability are essential to the success of the Company’s
financial returns on transportation,
long-term plans.
• Minimizing overhead expenses while maximizing longterm profitable growth,
The management at ‹fl Do¤an believes that, in the coming
years, these goals and activities will produce exciting
results paralleling developments for a stable economy.
• Building long-term relationships with suppliers,
POAfi
• Establishing collaboration opportunities for bunkering
operations via the Black Sea countries,
Even during the most adverse economic conditions, the
Do¤an Group took bold steps toward continuing expansion
• Accumulating expertise in the production and
with ‹fl Do¤an’s acquisition of POAfi, the leading petroleum
exportation of lubricants through the synergy created
distribution network in Turkey. This acquisition was the
with POAfi.
largest privatization transaction in Turkey’s history
amounting to an investment of US$ 1,260 million made
‹fl Do¤an aims at strengthening its market presence and
together with ‹flbank.
financial position in both the domestic and foreign markets.
The basic conditions for achieving this aim rely on a stable
POAfi, established in 1941, is the market leader for retail
economy in Turkey. The effects of unfavorable internal
and distribution of fuel products in Turkey. At the end of
developments on currency depreciation will negatively
December 2000, POAfi had a market share of 31.9% in
21
POAfi is evolving as a corporation through an overall reconstruction which is future-oriented and
covers a broad spectrum of activities ranging from management perspectives, the architectural design
of its service stations and the provision of high quality service by its personnel.
energy continued
white products, 59.7% in black products and 27% in
strategy of other major oil companies. The main purpose
lubricant sales distributed through a countrywide network
for the development of non-fuels operations within the
of almost 5,000 dealers under the well-known and
existing and future POAfi network is to retain and gradually
respected “Petrol Ofisi” logo. It is the only fuel distributor
increase market share and generate value added income.
with complete nationwide coverage, enabling it to access
the eastern regions of Turkey where other major oil
POAfi brings a strong brand name and managerial
suppliers do not operate. The Company also sells directly to
excellence to the industry, creating a strong position for the
government agencies, state economic enterprises,
Company in the 21st century. The Company achieved a
industrial users, the Ministry of Defense and NATO. In
gross sales revenue of US$ 3.2 billion and a net profit of
addition to the manufacture of lubricants, POAfi has
US$ 108 million in 2000. Currently, 6.7% of the POAfi
become the leading supplier of Jet A1 fuel to both
capital is traded on the Istanbul Stock Exchange.
international and domestic airlines. The new management
of POAfi has taken concrete steps toward obtaining its
The new customer-oriented structure, chosen from various
share in the growing LPG market by signing agreements
successful global fuel-marketing models, was quickly put
with Aygaz and Milangaz, major LPG suppliers in Turkey.
into place. In addition to the implementation of this
contemporary model, new marketing and sales staff
22
The widespread POAfi network represents a significant
responsible for closely monitoring customer needs and
opportunity to retail non-fuel products in line with the
complaints has been recruited.
POAfi is evolving as a corporation through an overall
marketing network and close to 1,200 employees, POAfi is
reconstruction which is future-oriented and covers a broad
continuing to assume this responsibility with 4,584 fuel
spectrum of activities ranging from management
stations, approximately 5,000 dealers, six regional offices,
perspectives, the architectural design of its service stations
two lubricant plants, 21 aviation supply units, eight
and the provision of high quality service by its personnel.
terminals, two fuel depots, three lubricant depots and three
The Company's goal is to enter international markets and
liaison offices.
become a globally recognized brand. At the same time, it
aims to become a market leader within the Turkish fuel
By acquiring the majority of POAfi shares, Do¤an Holding is
distribution industry while offering services that meet or
determined to increase its exposure in the energy sector. It
exceed customer requirements and expectations.
also believes that POAfi will create a synergy with the
existing retailing activities of the Do¤an Group.
Within the framework of the Project Silver, POAfi will bring
innovative design standards to all of its fuel stations as it
continues to provide a product line and a top-notch service
network to meet the needs of the driving public.
POAfi, the first national fuel distribution company to be
founded in Turkey, has been meeting the fuel requirements
of consumers and public and private institutions within the
national borders for 59 years With its broad-based
23
tourism
sea, sun and sand; in
abundence where the
Do¤an Group has invested
With its highly skilled technical department, various services, hardworking personnel, shopping center,
restaurants and a magnificent location, Bodrum Karada Marina is an attractive destination for both domestic
and international tourism.
Karada Turizm
hard work and constructive ideas, Bodrum Karada Marina
is now among the top ten marinas in the whole
The Bodrum Marina was taken over by Karada Turizm at
Mediterranean.
the end of 1997 under the privatization program. Nestled
where the Aegean and the Mediterranean meet, an area
During the years before privatization, the facility was
rich in history and natural beauty, Bodrum Karada Marina is
closed to the public. Now, it is one of the most favorite
an ideal place to enjoy the sea, the sun and is the
stops for yachtsmen from around the world, domestic
undisputed "hot spot" of Turkey. This unique location is
travelers and the local residents as well. Land facilities
attractive to yachting enthusiasts from all over the world
include a modern shopping center, yacht club, restaurants
and offers a complete range of marine services. Some of
and cafes. Worldwide brand names like Tommy Hilfiger,
the services include: daily weather forecasts, office and
Nautica, Façonnable, Gant USA, as well as famous Turkish
information, 24-hour security and harbor services, operator
brands such as Mudo, Polo Sport, Ayy›ld›z are some of the
service, change office, 70-ton travelift, water and
products available in the shopping center of the Marina.
electricity for all berths, (220/380 V AC) 125 A, telephone
connections, 32-channel cable TV, 64 showers and
With its highly skilled technical department, various
restrooms, laundry, ice service, market, marine store,
services, hardworking personnel, shopping center,
technical service shops (mechanical, electric, engine), diver
restaurants and a magnificent location, Bodrum Karada
service, fire extinguishing system, diesel fuel station, first
Marina is an attractive destination for both domestic and
aid, car parking area, shopping mall, restaurant, cafe-
international tourism.
bistro, sailing club and a rescue team. The mooring
capacity now stands at 450 afloat as compared to 275
Milta Turizm
before privatization and a hard standing area at 80. In
addition, the Marina has increased its working capacity
Milta, utilizing the synergy created by its affiliation with
from 78% to 108% in the last three years. As a result of
the Do¤an Group, undoubtedly gains a distinct advantage
25
Milta Kemer is a top-quality holiday village located in Kemer, Antalya, along the Mediterranean
coastline of Turkey. It is owned by Milta Turizm and managed by Holiday Plan of Öger Holding. The mild
climate of the region enables the resort to operate eight full months a year, hosting European travelers,
particularly those from Germany.
tourism continued
over the competition. This results in finding quick solutions
to commonly occurring financial problems, keeping the
Milta Turizm also owns and operates a 27-meter motorized
Company safe from traditional risk inherent in the sector.
yacht with a displacement of 110 gross tons. This yacht
offers private cruises in the Aegean and Mediterranean.
Milta Turizm builds, leases and manages holiday villages in
prime locations along the outstandingly beautiful Aegean
Milta Turizm is a 26% shareholder of Bodrum Karada
and Mediterranean coastline of Turkey. Milta is the primary
Marina and a 94% shareholder of Ifl›l Tur.
investor and owner of a first-class holiday village located in
Kemer, Antalya. This resort has an accommodation
Milta Kemer
capacity of 800 beds and is currently operated by Holiday
Plan of Öger Holding, a German-based tour operator.
Milta Kemer is a top-quality holiday village located in
Additionally, the Company has assumed control of another
Kemer, Antalya, along the Mediterranean coastline of
top-rated holiday village, Coralia Milta Holiday Village,
Turkey. It is owned by Milta Turizm and managed by
located in Torba Bay, Bodrum. This 600-bed capacity resort
Holiday Plan of Öger Holding. The mild climate of the
is owned by Milpa, another Group company and is currently
region enables the resort to operate eight full months a
operated by Tamaris, a Turkish-based subsidiary of the
year, hosting European travelers, particularly those from
Accor Group of France.
Germany.
managed by Tamaris SA, a subsidiary of the French Accor
The holiday village is built in a pine grove with meticulous
Group. Coralia Milta, supervised by Milta Turizm under a
care taken not to harm the natural environment of the site.
special contract, hosts vacationers from France and
Construction of the individual buildings or bungalows was
Belgium as well as other European countries.
matched to the terrain and landscaped with beautiful
plants, trees and shrubs.
All rooms of the facility are equipped with air-conditioning,
direct dial telephones, satellite TV, mini-bars and en suite
The village has approximately 400 rooms with a total 800-
baths and balcony. It is a marvelous sea-side resort with
bed capacity. It has nine tennis courts and offers a wide
two restaurants (400 square meters of closed and 1,400
range of sports and entertainment to its customers such as
square meters of open space), three bars, a 200-seat
darts, volleyball, basketball, archery, beach volleyball, a
conference room, fitness center, discotheque, tennis courts,
fitness center, aerobics, roller-blade, catamaran-type sail
billiards, indoor and outdoor swimming pools, amphitheater
boats, wind surfing and jet-skiing. This fantastic resort
and a wide choice of water sports.
combines sports, entertainment and relaxation in ideal
proportions.
Ifl›l Tur
Coralia Milta Holiday Village
Ifl›l Tur is a ‘Grade A’ travel agency operating in
collaboration with Milta Turizm. It offers a variety of
Coralia Milta Holiday Village, a first-class holiday village
services including airline ticket sales and car rentals.
owned by the Do¤an Group, is located on Torba Bay, on the
Additionally, the Company provides transfer services and
Bodrum peninsula. This facility, with a 600-bed capacity, is
daily excursion tours to the customers of Accor Tours,
27
industry,
trade and marke
a long time presence
in manufacturing
industries and trade
Currently, the annual production capacity of the Çelik Halat plant is 60,000 tons with a capacity utilization
ratio of approximately 87%. In domestic production, with a market share of 55%, Çelik Halat leads its sector the second largest has only a 20% market share. When the average for the past few years is taken into
consideration, 70% of production was sold in the domestic market and 30% was exported.
ting
INDUSTRY
for the past few years is taken into consideration, 70% of
production was sold in the domestic market and 30% was
Çelik Halat
exported. However, in the steel wire rope market, Çelik
Halat possesses a 75% share and is the uncontested
Çelik Halat was founded in 1962 as a joint venture
leader. The breakdown for year 2000 production is; wire
between private enterprise and the state and has been
rope 16%, spring wires 29%, bead wire 19%, single strand
listed on the Istanbul Stock Exchange since 1987. In
11%, galvanized wires 12% and pre-stressed concrete
September 1997, most of its shares were acquired by the
wires and strand 13%. The new bead wire coating line will
Do¤an Group under the privatization program. Çelik Halat is
be commissioned in the spring of 2001 and will achieve the
by far the industry leader, with its wide range of steel wire
highest quality available anywhere in the world.
products, steel wire rope and a sales potential for both
domestic and international markets. The products of the
Net sales of US$ 40 million in 2000, showed an increase of
Company are widely used in many areas: fishing, mining,
5% over the 1999 figure of US$ 38 million. In 2000, exports
construction, tires and energy. Other products include
totaling US$ 12 million were realized by the Company, of
galvanized wire, spring wire, single strand, bead wire,
which US$ 0.5 million went to the USA, US$ 7.5 million to
pre-stressed concrete wire and strand and steel wire rope.
European countries and the balance, US$ 4 million, to
Çelik Halat was awarded the ISO 9002 Quality Assurance
various other countries.
Certificate in 1993.
Ditafl
Currently, the annual production capacity of the Çelik Halat
plant is 60,000 tons with a capacity utilization ratio of
Ditafl, which commenced production in 1979, has been and
approximately 87%. In domestic production, with a market
still is the only company in Turkey supplying original parts
share of 55%, the Company leads its sector - the second
for vehicle manufacturers. The Company manufactures tie-
largest has only a 20% market share. When the average
rods, torque-rods and ball joints under license by TRW of
29
industry, trade and marketing continued
the USA and holds the ISO 9002 Quality Assurance
million, an increase of 37% over the figures of 1999. The
Certificate. The Do¤an Group invested in Ditafl in 1990,
Company also increased its total assets to TL 11.2 trillion
taking the Company public in 1991 with a 50.2% free-float
from TL 5.8 trillion in 1999 and increased its net profit by
rate. Currently, the Do¤an Group holds the majority of the
875% to TL 1.2 trillion from TL 127.5 billion for the same
Company’s shares.
period.
Ditafl has a 21% share with 76% of the total tie-rod
In the year 2000, Ditafl made investments of US$ 1.2
demand imported for the original equipment market. In the
million for quality enhancement. As a result, its production
spare parts market, Ditafl has a 27% stake while
capacity has increased by 12% and now totals 3.6 million
competitors have 33% and imported parts have a 40%
pieces per annum.
share. In the year 2000, Ditafl exported goods to Italy,
Switzerland, Germany, the UK, the USA, Singapore, Egypt,
TRADE AND MARKETING
Israel and some other countries with a total value of US$
3.2 million.
Milpa
With the exception of the last two months of 2000, Turkey
Milpa, established in 1980 and one of the most successful
experienced a good year in automotive business. Ditafl
companies in the Turkish marketplace, functions as the
achieved successful results with net sales of US$ 13.6
Group’s marketing and retail management division for
vehicles, real estate and other durable goods. Besides the
projects. Among its other pioneering efforts, Milpa was the
Head Office in Istanbul, the Company also has offices in
first company to combine campaign sales with consumer
Ankara, Izmir and Adana.
credits; to bring a new discipline to lottery-based car sales
campaigns when interest rates went up; sell pre-owned
Milpa has pioneered the marketing and retail sales of
cars at monthly installments; organize sales schemes
merchandise through intense promotional campaigns
directly from catalogues in cooperation with two
beginning with the sale of Tofafl (Fiat) passenger cars.
international companies; begin Internet sales at monthly
Between 1980 and 1994, an impressive 10% of all Tofafl
installments; offer alternative payment plans in campaigns
automobiles were sold through Milpa campaigns; this
with future deliveries.
figure retreated to 5% between 1994 and 1997. In 1998,
special delivery terms helped return this figure to the 10%
Net sales of Milpa resulted in US$ 93 million in 2000. The
level.
Company’s total assets increased to US$ 101 million in
2000, up from US$ 91 million the previous year, for an
By far the leader in its sector, Milpa encounters very little
increase of 11%. Shareholders’ equity reached US$ 47
competition. When asked to recall what the name ‘Milpa’
million at the end of the year.
represents to the Company’s previous customers, the
overwhelming response is that Milpa means ‘trust and
Hürriyet Pazarlama
reliability’.
Hürriyet Pazarlama, established at the end of 1995, has
Milpa was the first marketing company in Turkey to be
displayed continuous expansion while playing a significant
awarded the ISO 9002 Quality Assurance Certificate and
role in automobile, computer and real estate sales through
has been the pioneer in the application of many innovative
collaboration with globally famous brand names. The
31
industry, trade and
marketing continued
Company has offices in major cities around Turkey that
Do¤an D›fl Ticaret
include Istanbul, Ankara, Izmir and Adana.
Do¤an D›fl Ticaret handles the importation of raw materials
Hürriyet Pazarlama has managed automobile sales
and promotional items utilized by Group companies. In
campaigns through joint efforts with Renault, Peugeot,
2000, the sales revenue of Do¤an D›fl Ticaret totaled US$
Hyundai, Suzuki, Skoda and Lada; for computers with IBM,
202 million, dominated by the consumables such as paper,
HP, Packard Bell and for houses with Emlakbank - the
steel, film and molds used by Group companies.
largest real estate development concern in Turkey. Over
11,000 automobiles have been sold since 1996 through
Do¤an D›fl Ticaret represents the leading global producers
joint campaigns with only Renault and more than 2,000
in the paper and steel markets. With 280,000 tons of
houses have been sold in collaboration with Emlakbank.
paper, Do¤an D›fl Ticaret controls a 25% share of this
market that includes non-group sales. It also has a 35%
Hürriyet Pazarlama has also established close working
market share of films and molds used in press. Do¤an D›fl
relationships with well-known Turkish banks in organizing
Ticaret is a leading name for paper and steel based on the
consumer credit facilities for its customers such as: ‹flbank,
volume of materials imported and also by representing the
Garanti Bank, D›flbank and Finansbank - all delivering high
major worldwide producers.
quality consumer banking services.
In 2000, Do¤an D›fl Ticaret has total assets of TL 46 trillion,
The Company has an annual sales turnover of US$ 50
representing a 71% increase over the 1999 figure of TL
million and has plans to market other products and develop
26.8 trillion. The Company’s net profit rose to TL 2.8 trillion
alternative financing schemes in anticipation of reaching
in 2000, up from TL 1.6 trillion in 1999.
enhanced customer satisfaction.
32
Automotive Dealership
Ortado¤u Otomotiv markets a variety of passenger cars.
Sales in 2000 increased by 61% and reached a total of
The Do¤an Group is actively involved in the selling of
1,903 automobiles.
passenger cars, commercial vehicles and spare automotive
parts produced by the Koç Group. The automotive
In 2000, the total number of vehicles sold by Anadolu
dealerships of Do¤an Otomobilcilik, Ortado¤u Otomotiv and
Otomotiv was 1,535.
Anadolu Otomotiv sell Tofafl (Fiat), Otosan (Ford) and
Otokar (Land Rover and Magirus midi-buses) branded
vehicles.
In 2000, Do¤an Otomobilcilik sold 3,471 vehicles
manufactured by Otosan (Ford), resulting in a 106%
increase over the previous year’s total. Of those sold, 2,481
were passenger cars and 990 were commercial vehicles,
representing increases of 120% and 78%, respectively.
33
telecommunicatio
connectivity
through various
platforms
In the telecommunications sector, Do¤an Group’s vision, an important part of the "convergence" concept, is
to play an effective and active role as a distributor by creating synergy with its expanding media and
Internet activities.
ns
Within the telecommunications sector, the vision of the
As new opportunities are developing in line with Turkey’s
Do¤an Group plays an important part in the convergence
commitment to liberalize the telecommunications market,
concept by creating synergy through its expanding
there are still promising opportunities in the sector. The
activities.
Do¤an Group is determined to exploit every alternative
medium in this area.
Investments in telecommunications sector will allow Do¤an
Group to execute its own convergence story.
Do¤an Holding is continuing research and development
activities while pursuing opportunities that arise in this
In tomorrow’s world of convergence media which includes
competitive environment - focusing primarily on value-
Internet and telecommunications, the Do¤an Group aims to
added services.
be actively involved in all revenue-generating activities. It
is for this reason that the Do¤an Group pursues
opportunities in telecommunications as primary areas of
investment.
35
strong presence in
content provision
through both traditional
and IT-based channels
do¤an yay›n
holding
Going beyond traditional broadcasting and publications, the Do¤an Media Group is diversifying its
interests with the aim of attaining convergence and inter-group synergy.
Financial Results
Media Segment
(in terms of the purchasing power of the
Turkish lira at 31 December 2000)
External Revenues
(TL trillions)
432
1999
2000
397
Operating Profit
(TL trillion)
42
1999
2000
17
Financial Results
Media Segment
(in terms of the purchasing power of the
Turkish lira at 31 December 2000)
Total Assets
(TL trillions)
469
1999
2000
391
Capital Expenditures
(TL trillions)
68
1999
2000
43
do¤an yay›n holding
By keeping its pioneering position with
the integration of new technologies,
the Do¤an Media Group remains the
leader in media and entertainment.
The Do¤an Group has been active in the Turkish media
sector since 1979. The operations of Do¤an Yay›n Holding
are organized around six core media-related business
areas: (i) newspaper publishing, (ii) magazine and book
publishing, (iii) distribution and retailing, (iv) printing, (v) new
media and entertainment and (vi) other ancillary media
businesses, including news agency activities. Through
diversified operations Do¤an Yay›n Holding has access to
the widest range of content in Turkey.
cooperating with world
names to reach a wider
audience globally
media
Do¤an Yay›n Holding dominates the Turkish newspaper sector with numerous publications ranging from the
market leaders, Hürriyet and Milliyet, to specialist financial and sports newspapers.
Do¤an Yay›n is the Holding Company for the largest medial
enterprise in Turkey. It is also the market leader in terms of
paid circulation and advertising revenue with respect to
newspapers and magazines published in Turkey.
Do¤an Yay›n Holding has recently expanded into new media
sectors such as the Internet and cable television technology.
NEWSPAPERS
The Do¤an Group has been active in the Turkish media
sector since 1979, following its acquisition of Milliyet. The
operations of Do¤an Yay›n Holding are organized around six
core media-related business areas: (i) newspaper publishing,
(ii) magazine and book publishing, (iii) distribution and
retailing, (iv) printing, (v) new media and entertainment and
(vi) other ancillary media businesses, including news agency
activities. Through diversified operations the Company has
access to the widest range of content in Turkey.
The newspapers of Do¤an Yay›n Holding follow an
independent editorial policy and are characterized by their
comprehensive coverage of domestic and international
news and sporting events.
Do¤an Yay›n Holding dominates the Turkish newspaper
sector with numerous publications ranging from the market
leaders, Hürriyet and Milliyet, to specialist financial and
sports newspapers. The Group sells approximately 4.3
million copies per day - 45% of the average daily
newspaper circulation in 2000. The newspaper division
accounts for 60% of all newspaper advertising in Turkey
with revenue of approximately US$ 249 million per annum.
country and was the first media company to receive the
ISO 9001 Quality Assurance Certificate. With its
professional management team and state-of-the-art
technology, Hürriyet employs qualified journalists, writers
and correspondents that maintain its timely and objective
news coverage, regarded by its readers as informative,
reliable, innovative and contemporary. With its strong
financial structure, Hürriyet has been listed on the ISE
since 1992.
Hürriyet and Milliyet newspapers are currently ranked first
and third, respectively, in terms of circulation and
advertising revenue in Turkey. All of the newspaper and
magazines published by the Group are distributed by its
subsidiary Yaysat, Turkey’s largest media distribution
company, which also distributes third party titles. Group
newspapers along with a number of magazines are printed
by Do¤an Printing Centers.
Hürriyet
Turkey’s leading newspaper, Hürriyet has the highest
circulation and the greatest share of advertisements in the
sector. It is one of the best-known brand names in the
In addition to being the most popular daily, with an
average daily circulation of 660,000 copies for the year
2000, Hürriyet is also Turkey’s largest advertising medium.
During the last two years, Hürriyet carried more than 15%
of Turkish advertisements in terms of net advertising
revenue. The Company accounts for 43% of all newspaper
advertisements in the year 2000.
39
Hürriyet reflects nationalistic and democratic values and
promotes social justice and populism. It is open-minded,
fair, independent and sets market trends.
Hürriyet’s European edition is published in Frankfurt and
distributed to European countries and the United States.
Hürriyet has the highest international circulation among
Turkish dailies outside of its home market.
Reflecting traditional values of patriotism, democracy and
family, Milliyet’s editorial policy emphasizes loyalty,
respect and tolerance. Its slogan, "Reliability in the Press"
summarizes its high standards of accuracy and objectivity
with regard to its coverage of news, politics, economy,
business, sports and the arts. Milliyet has distinguished
itself through the intensity of its analysis of political news.
It is the sole Turkish member of the World Media Network.
Hürriyet is headquartered in Istanbul and has six Hürriyetowned printing centers located in Istanbul, Ankara, Izmir,
Antalya, Adana and Trabzon. In addition to Hürriyet, these
centers also print newspapers published by the Group for a
standard printing fee.
In September 1997, Milliyet implemented the Total Quality
Management System in accordance with its certification by
the British Standards Institute for the ISO 9001 Quality
Standards Certificate. Milliyet was the first newspaper in
Turkey to introduce the daily news via Internet. Milliyet’s
do¤an yay›n holding continued
Hürriyet maintains a content-rich website
(www.hurriyet.com.tr) that is one of the most visited
Internet sites in Turkey. Each visitor spends an average of
25 minutes exploring the site. In 1999, this website
expanded to include www.hurriyetim.com.tr, with the majority
of its content derived from the Hürriyet newspaper itself.
Milliyet
Established on May 3, 1950, Milliyet is ranked among the
country’s top selling newspapers, with a total sales volume
close to 382,000 copies per day and a 10% market share.
The Company also accounts for 12% of all printed media
advertisements in Turkey. Milliyet is an independent
publication with a strong reputation for integrity. Its
audience is composed of an elite group of highly educated
individuals. Since 1993, Milliyet has been listed on the ISE.
40
website (www.milliyet.com.tr) is still one of the most
popular sites in the country.
Gözcü
Gözcü, launched in 1996, is one of the youngest and most
successful mass-market papers in Turkey. Gözcü’s mission
is to increase the number of newspaper readers in the
country through a combination of brief news stories and
human-interest features at an affordably low cost.
The news is presented in such a way that the most
important issues of the day are conveyed to the reader in
the simplest and most direct manner, drawing the reader’s
attention to the right place and with the right attitude.
Turkish Daily News
Fanatik
Turkish Daily News, Turkey’s first and largest circulation
English language daily, marked its 40th anniversary on
March 15, 2001.
Fanatik is Turkey’s first quality sports daily focusing
predominantly on soccer and highlighting developments at
the leading sports clubs.
It is regarded as a reliable and authoritative source of
information in Turkey. It is widely read by both expatriots
and tourists alike and is used as English-language teaching
material in various Turkish schools.
By raising the level of a sports newspaper above
hooliganism and erotic photos of women, Fanatik has
attracted a loyal following among young, single men
averaging 21 years of age, of whom 61% are high school
graduates and 30% have at least primary or middle school
education. Fanatik has become one of the most successful
sports newspapers in the market.
On May 19, 1996, the paper launched its electronic edition,
Turkish Daily News Online, (www.TurkishDailyNews.com).
This site has since become one of the most prominent
Internet sites dealing with news about Turkey.
Reflecting traditional values of patriotism, democracy and family, Milliyet’s editorial policy emphasizes
loyalty, respect and tolerance. Its slogan, "Reliability in the Press" summarizes its high standards of
accuracy and objectivity with regard to its coverage of news, politics, economy, business, sports and
the arts. Milliyet has distinguished itself through the intensity of its analysis of political news. It is the
sole Turkish member of the World Media Network.
The Washington-based website has an average of 166,592
hits per day and an average of 3,674 visitors daily. Foreign
ministries and international ‘think tanks’ are among the
regular visitors to Turkish Daily News Online.
SIMGE GROUP
Radikal
Launched in 1996, Radikal rapidly became popular among
Turkey’s younger, well-educated, mid-income readers.
Demographic research has shown that these readers spend
an average of 37 minutes reading 68% of the paper daily.
Radikal Online (www.radikal.com.tr) was initiated in 1997.
Following the Do¤an Media Group’s tradition of innovation,
this website was the first to establish online forum pages providing a platform for interactive communication with its
readers. Radikal’s ‘Sanal Alem’ website keeps the user in
touch with developments in the field of information technology.
The paper has a daily circulation of 187,000 and a highly
successful Internet website (www.fanatik.com.tr), which
features similar sporting news coverage.
The Do¤an Media Group launched Fanatik Basket as a
basketball weekly in late 1996. It features in-depth coverage
of Turkish and foreign professional and amateur basketball
teams.
OTHER NEWSPAPERS
Posta
Launched in 1996, Posta has attracted new readers by
virtue of its features, TV news and society pages. It has
gained the loyalty of a group of readers with a higher
socio-economic level, filling the gap for a compact
newspaper at an affordable price. Aimed at an audience
with limited income who want comprehensive, easy-to-
41
read news and interesting stories, Posta is packed with
abridged news items. In 2000, it achieved an average daily
circulation of approximately 454,000 copies with an
estimated 10% of the daily market.
Finansal Forum
Available since 1996, Finansal Forum quickly became the
leader among Turkish newspapers. By concentrating on
politics and the economy, this daily has filled the gap in the
Turkish market for a high quality paper with an
international slant.
Finansal Forum covers economic events and political
developments - analyzing their impact on business and
MAGAZINES
The Do¤an Group has an exceptionally strong presence in
the Turkish magazine and book publishing sectors. The
Group publishes 25 magazines covering a range of interests
including fashion, finance, automobiles and health.
Do¤an Burda Rizzoli
The Do¤an Group has been in the magazine publishing
business since the 1980s. During the last two years,
the Group has consolidated its magazine publishing
activities and established DBR Magazines, a joint venture
between the Group, Burda and Rizzoli, which is another
do¤an yay›n holding continued
finance. It devotes a good deal of space to financial and
stock market data as well as to general news and the
opinions of well respected social commentators. Regular
supplements on business sectors, diplomacy, education and
life-style make the Paper an attractive and informative
reference source. Finansal Forum makes it possible for
Turkish readers to monitor global events and developments.
Finansal Forum has been able to strike deals with some of
the most respected newspapers in the world. It has the
sole rights to publish articles and features translated into
Turkish from the US-based Wall Street Journal and The
Financial Times of Britain.
Finansal Forum features financial and political news on its
Internet website (www. finansalforum.com.tr).
42
joint venture between German and Italian newspaper and
magazine producers.
The new organization created an unbeatable synthesis by
utilizing the resources of its two foreign partners, the
world’s leading magazine publishers, Burda of Germany
and Rizzoli of Italy. Emergence of DBR, now quoted on the
ISE, marked the dawn of a new era in the market both in
terms of corporate identity and redefinition of targeted
market segments.
Through the publication of 25 high-quality weeklies and
monthlies, DBR has gained a 56% market share in Turkey
in terms of sales figures for the year 2000. Targeted at the
young, well-educated urbanite consumer, these popular
periodicals cover a wide range of subjects such as finance,
fashion, current affairs and gastronomy. Licensing
agreements with the Burda and Rizzoli Groups of Europe
has enabled DBR to publish Turkish versions of many
internationally known titles.
Hürgüç now part of DBR, has been importing and
distributing foreign publications for more than fifteen
years. In 2000, the number of international titles in the
DBR portfolio reached 581 composed of 20 newspapers,
81 weekly magazines, 15 fortnightlies, 103 monthlies,
25 bimonthlies and 65 quarterlies and 272 non-periodical
fiction titles from Germany, Italy, the United Kingdom,
Austria, Russia, Switzerland, Bulgaria and Macedonia.
BOOKS
In 1999, the Group consolidated some of its book
publishing activities under Do¤an Kitapç›l›k which
publishes both fiction and non-fiction books. Do¤an
Kitapç›l›k is among the largest publishers in Turkey with a
vast selection of titles.
Do¤an Kitapç›l›k, with 40 years of experience, is one of the
largest and most respected publishing houses in Turkey. It
cooperates with other well respected publishers from
around the globe to print and distribute their titles in
Turkey.
Do¤an Kitapç›l›k aims to become the leading publishing
house in Turkey in the 21st century and will continue to
print the works of the best authors from Turkey and around
the world.
Do¤an Egmont Publications
The Do¤an Group is also involved in publishing books
through its subsidiaries Do¤an Egmont and Do¤an
Kitapç›l›k. Do¤an Egmont is a joint venture established in
1996 with Egmont International Holding A.fi., a subsidiary
of Egmont of Denmark.
Through this partnership, Do¤an Egmont has been
granted exclusive rights to publish a number of Walt
Disney products in Turkey as well as other books and
magazines from various well known publishers, such as
Warner Bros, Paws, IMPS, Topps, Dark Horse, Victoria
House, Pestalozzi, Reader’s Digest, BBC, Toei, LCI and
Panini. Presently, Do¤an Egmont publishes 14 monthly
magazines and 20 book titles targeting a youthful
readership.
Do¤an Egmont concentrates on providing the widest
possible distribution channels, as it strives to reach the
largest juvenile readership in the country. Do¤an Egmont
has more than 60% of the market share in children’s
magazines and a market share of approximately 25% for
children’s books. Apart from kiosks, books are distributed
to almost 900 points of sale including retail outlet chain
stores.
The distribution of the Do¤an Egmont magazines is carried
out by Yaysat at more than 14,000 sales outlets throughout
Turkey. Books published by Do¤an Egmont are distributed
to over 860 retail stores including D&R stores, Toys "R" Us,
Migros and Carrefour.
43
BROADCASTING
The Do¤an Media Group is involved in the Turkish
broadcasting sector through its management of two cable,
one international and two national television companies
that together command a 25% share of the TV advertising
market. The two national channels, Kanal D and CNN
TÜRK, a joint venture with AOL Time Warner, have a wide
audience across the country. The Group’s direct TV
exposure is supported by ANS Production that produces
commercials, game shows and serials.
Kanal D
Kanal D reflects Turkey’s vision with its contemporary,
innovative, creative and original approaches.
overall audience share of 17%, making it Turkey’s top-rated
television channel. Kanal D has the highest ratings and
market share with regard to Turkish and foreign films,
children’s programming and entertainment and news
programs. Kanal D was rated second in sports programs
and locally produced series.
CNN TÜRK
Established in 1999, CNN TÜRK is a joint venture between
the Do¤an Media Group and AOL Time Warner. CNN TÜRK
is the second national CNN-branded local language 24-hour
news channel controlled and operated outside Atlanta. It is
Turkey’s first television channel to have an international
media partner.
Produced locally, CNN TÜRK provides reliable, objective, credible, up-to-the-minute local and
international news and information to an audience that seeks to broaden its perspectives. Equipped
with the latest technology and distributed both terrestrially and via cable, it reaches roughly 40 million
viewers across Turkey. The network hopes to eventually reach the Turkish-speaking republics of
Central Asia and Turkish communities in Europe.
This high performance has not only earned Kanal D the
most preferred TV channel status, but it has also moved
Kanal D forward in the international arena.
In 2000, Kanal D has received the international Hot Bird
Award. From among 150 channels that are broadcast over
Eutelsat, Kanal D was chosen the most successful channel
of the year, together with BBC, for the quality and content
of its broadcasts.
Through high broadcasting principles set forward at its
establishment in 1990, Kanal D has earned a place of
special respect and trust from among all the other private
channels that came into existence during that decade.
By targeting the market with quality programming designed
to appeal to the masses, Kanal D has become one of the
top TV channels in the country. In 2000, Kanal D gained an
44
Optimizing on both local resources of the Do¤an Media
Group and extensive news gathering resources of the
world’s news gathering resource, CNN TÜRK has started to
bring a new dimension to local news broadcasting.
Produced locally, CNN TÜRK provides reliable, objective,
credible, up-to-the-minute local and international news and
information to an audience that seeks to broaden its
perspectives. Equipped with the latest technology and
distributed both terrestrially and via cable, it reaches
roughly 40 million viewers across Turkey. The network
hopes to eventually reach the Turkish-speaking republics of
Central Asia and Turkish communities in Europe.
CNN TÜRK has won the appreciation of national as well as
international advertisers with its high quality content and
top notch technical outreach. CNN TÜRK offers superior
technical standards through its computer controlled
broadcasting technologies.
RADIO
PRODUCTION
The Do¤an Media Group manages three radio stations that
account for a 9% share of the Turkish radio advertising
market. These radio stations offer broad spectrum
programming by concentrating on three distinct areas:
Western popular music, Turkish music and current affairs.
ANS Productions
Hür FM
Acquired by the Do¤an Media Group in 1998, ANS
Productions is a media company with operations ranging
from development, production, licensing, distribution,
media sales and marketing, all functioning as independent
divisions, in close liaison with each other.
Hür FM is dedicated to providing American and European
pop, jazz, blues, Latin and classical music. Hür FM was the
first station to broadcast cultural programs such as ‘Radio
Theater’ and ‘Radio Cinema.’ It also broadcasts live via the
Internet.
ANS Productions also holds the local copyright to several
game shows including the Turkish edition of Wheel of
Fortune. ANS Productions also provides a full service
facility for all branches of commercial production of
national and multinational advertising companies.
do¤an yay›n holding continued
Radyo Foreks
Radyo Foreks is a news-only station with 48 news bulletins
broadcast per day and supplemented by additional
programs that offer economic and stock market updates.
Radyo Foreks has agreements to broadcast via 16 local and
regional radio stations in Turkey; it also broadcasts live on
the Internet.
In a move to bring film and television production to
international quality levels, ANS Productions in 1996,
formed the Anatolian Network System which supports
broadcasting activities of 58 local channels by marketing
advertising spots, producing programs and assisting with
their corporate identity. ANS Productions is now
collaborating with 85 local channels, all of which constitute
the largest network in the country.
Radyo D
Hürriyet TV Film Production
Broadcasting since 1993, Radio D is on the air 24-hours a
day across the country, featuring a mix of Turkish popular
music and news. The high rating of the station enabled it
to attract 11% of the total radio advertising. Targeted to
the 15 - 45 age groups, the station, in addition to news,
plays popular music and airs programs on current social
issues. Radyo D also broadcasts live on the Internet.
Hürriyet TV Film Production was founded in 1992 and
produces news and documentary programs.
D Production
Established in 1996, D Production operates as the content
producer for CNN TÜRK.
45
NEW MEDIA
INTERNET
Ultra TV (Cable TV Infrastructure)
Internet has emerged over the last five years as the most
important issue facing media companies. As a new
distribution channel, Internet is a potential source of
competition for existing media companies that are
accustomed to earning high returns by exploiting entry
barriers, whether these barriers are based on economies of
scale (in the case of publishers) or the scarcity of a
resource (in the case of television). Internet also represents
a new distribution channel for content, enabling media
companies to expand their markets online and tap into
potential new sources of revenue, such as e-commerce.
Established in 1997 as a Group subsidiary, Ultra TV is one
of the six cable operators in Turkey with a view to set up a
TV infrastructure to provide cable television, Internet and
interactive data services to its subscribers. Cable TV
started in Turkey in 1998 when Türk Telekom entered into
revenue sharing agreements with six operators utilizing
cable television infrastructure. Since 1998, the cable TV
market has 45 national and international channels.
Currently, Ultra TV has approximately 200,000 subscribers.
The management believes that the number of subscribers
do¤an yay›n holding continued
will increase due to the growth of the market and also
through additional services that will become available to
subscribers of Ultra TV such as; e-shopping, video games,
distance learning, home banking, video conferencing and
data transmission.
Türk Telekom, in 1998, transferred all of its obligations in
infrastructure modernization, capacity increase and
maintenance, on a revenue sharing basis, to the six cable
TV operators. Following the tender, Ultra TV won the right
to operate the infrastructure in the three most densely
populated municipalities on the Anatolian side of Istanbul.
46
Do¤an Yay›n Holding is well positioned to benefit from the
growth of Internet in Turkey due to its strength in
distribution, content, brands and consumer relationships.
Internet development, previously limited, has suddenly
taken off and Do¤an Yay›n Holding is now in an
advantageous position in the marketplace.
Do¤an Online
Initially, there was no consensus as to the impact of
Internet on media companies. While Internet shares soared
and Internet proxies such as Telecom moved ahead, the
media sector trailed the market. This began to change in
the closing weeks of 1999 and continued into 2000.
Do¤an Yay›n Holding entered into the Internet market with
the establishment of Do¤an Online (DOL), in October 1999.
The Company aims to be one of the leading Internet
Service Providers in Turkey.
The Group’s overall Internet activities and strategy are
centrally coordinated within Do¤an Yay›n Holding. The
main focus of the Holding’s new media activities is Do¤an
Online, an Internet Service Provider (ISP) which was
launched on April 15, 2000, under the “e-kolay” name.
Immediately following its start-up, DOL achieved a
subscriber base of 50,000 users and captured 35% of the
market. Approximately 200,000 visitors account for 5.5
million hits daily.
In addition to the e-kolay portal, all Group newspapers
have their own websites, offering content from each of
these papers.
Do¤an Yay›n Holding strongly believes that e-kolay is well
placed and has the potential to grow in the Turkish ISP
market due to the Yaysat distribution network and its
superior content.
Do¤an Yay›n Holding has developed a digital network in
conjunction with Nortel, the American telecommunications
equipment company providing the international backbone.
The domestic foundation relies on the Turkish
telecommunications along with other Turkish Internet
subscribers. Do¤an Online may be constrained by capacity
limitations of this network in the future. Data is either
carried over the Turkish telecommunications backbone or
switched directly to satellites connected to the
international backbone.
High quality content will be provided by the Group’s media
companies with priority given to finance, sports,
automotive and travel. Supporting content will include
many different areas such as city guides, health, education,
women’s and children’s interests.
Do¤an Online launched its portal containing a wealth of
high quality, exclusive content through Do¤an Media
Group’s content providers. It is composed of 12 channels
that focus on news, finance, women’s issues, computers
and the Internet, automobiles, health, sports, travel, game,
entertainment, a city guide and yellow pages. Each of
these channels builds its own unique community through
services such as chat rooms, clubs, forums and classified
advertising. Do¤an Online’s strategy is to spin-off of these
channels into independent e-commerce transactional
vertical portals generating revenue streams through
subscription, advertising and transaction. So far four
channels have been upgraded to thematic portals; finance
(bigpara), sports (fanatik), travel (gezikolik) and automobile
(arabam) portals.
47
Current news coverage is supplied by the Do¤an News
Agency. At present, the content is available only in Turkish.
The Company is also developing a Turkish language search
engine that is designed to function over wireless
application protocol (WAP) services.
Infoshop.com.tr is one of the portals of Do¤an Online and
operates under the name “hepsiburada.com” - a leading ecommerce company established in 1996 for computers,
components, software, office equipment and telephone. It
has been acquired by Do¤an Online and currently captures
a market share of over 30% of the e-commerce market in
Turkey.
DO⁄AN MULTIMEDIA
CD-ROM titles are growing in importance with their ability
to provide multimedia information that includes sound,
animation and video clips. Do¤an Multimedia was
established in 1996 to develop Turkish content CD-ROMs
for the domestic market. Following Panorama ‘96 and Sar›
Zeybek, based on the life of Atatürk, modern Turkey’s
founder, Do¤an Multimedia published the ‘Gölgedekiler’
series of CD-ROMs, commemorating little-known heroes
and heroines of the Turkish War of Independence.
do¤an yay›n holding continued
Tardecnet is a financial information website which
provides research reports and personal finance information
available to paying subscribers. The Company plans for
Tradecnet to offer an online execution-only equity
brokerage service during 2001. The website arabam.com
will offer personal finance and car insurance for new
automobile purchases by individuals.
Do¤an Online is highly committed to building sustainable
competitive advantages that will keep it continuously
ahead of the competition. The clear vision of the top
management, cross-marketing capabilities, access to
advertising, revenue knowledge of consumer market and a
tie-in with household brand names are all core
competencies that give Do¤an Online a competitive edge
and has paved its way to become a dominant player in the
Turkish Internet market.
48
DO⁄AN MUSIC COMPANY
Do¤an Music Company (DMC) targets the acquisition of
copyrights for the highest number of music works along
with the intellectual rights of performers. In the process,
DMC creates further synergies with the Group’s production
and broadcasting companies as well as portals, in which
DMC performers are featured at no additional cost.
MEDIA DISTRIBUTION
Do¤an Yay›n Holding relies heavily on its extensive
distribution network to get printed material out to the
public as swiftly as possible.
Yaysat
Yaysat, established in 1992, is the largest printed material
distributor in Turkey, with regard to its size, reach and
efficiency.
The most extensive print media distribution organization in
Turkey, Yaysat is responsible for the nationwide
distribution of 54 newspapers, 503 periodicals, 175 books
and the leading Internet access package “e-kolay” between
regions and sales outlets. Yaysat also carries out
promotional activities and distributes such promotional
products to all selling points.
transportation companies. Some of these agents sell
products directly to consumers while others distribute them
to smaller newsagents. Overall this distribution network
gives the Do¤an Group access to more than 20,000 points
of sale across Turkey.
RETAILING
D&R Stores
D&R is the largest multimedia retail chain, in terms of
scale, operating throughout the country.
D&R has had three solid years of business experience and
know-how in retailing with strong regional coverage and
The clear vision of the top management, cross-marketing capabilities, access to advertising, revenue
knowledge of consumer market and a tie-in with household brand names are all core competencies
that give Do¤an Online a competitive edge and has paved its way to become a dominant player in the
Turkish Internet market.
Yaysat is the largest distributor in Turkey with over 393
main distributors, to over 22,000 sales outlets. Yaysat is
truly a giant, able to reach any point within its area of
operation in no more than 24 hours and accounts for 95%
of the sales of newspapers and magazines in Turkey. The
Company had a turnover of US$ 486 million in the year
2000.
wide public recognition. Following the successful build-up
period, D&R aims at a healthy growth rate in terms of
regions and penetration.
Categorized as ‘stores’ and ‘corners’ D&R owns 26 stores,
in addition to operating 17 franchise stores throughout the
country. Approximately 4.5 million people visited D&R
stores in the year 2000.
Bir-Yay
Bir-Yay, established in the second half of 1996, is a joint
venture operation between Yaysat and BBD, the country’s
other major print distribution company, distributing thirdparty products in Turkey. This includes 40 newspapers and
more than 300 different magazines and books. Products are
distributed to almost 700 main agents by contracted
D&R launched “dr.com.tr” in December 2000, representing
one of the most integrated e-commerce sites in Turkey.
D&R has already established strategic alliances with
Mydonose - a radio station and DHL.
49
NEWS GATHERING
PRINTING
Do¤an News Agency
Do¤an Ofset
The Do¤an Media Group has merged its four news
agencies under one roof - Do¤an Haber Ajans› (DHA) supplying news, features and photographs to Group
newspapers and audio-visual news spots for TV channels.
Established in 1970, Do¤an Ofset is an internationally
competitive printing plant with production capacity for
large quantities at top notch quality. After the acquisition
of Do¤an Ofset by the Do¤an Media Group in 1994, the
commercial printing industry gained new impetus. Do¤an
Ofset, housed within a 15,000 square meter closed
production area, is equipped with both rotational and
sheet-fed offset presses for the production of magazines,
brochures, catalogues, newspapers and books. It is capable
of producing hardcover bound books at a rate of 150,000
per day.
Providing news items to the eight newspapers and
television channel of the Group, DHA has 26 regional
bureaus and 550 reporters. It is represented across the
country and can monitor developments in Turkey’s
neighboring countries as well. On average, DHA processes
6,000 news
Europe’s Turkish population is the primary target of Do¤an Yay›n Holding. It has an average circulation
of 230,000 newspapers daily. The best-selling newspapers include Hürriyet, Milliyet and Fanatik,
making the Group the leading publisher of Turkish publications on the continent.
50
headings, 11,000 photographs and 1,400 TV news stories
per month, disseminating them electronically.
Do¤an Ofset is the first printing company in Turkey to
receive the ISO 9002 Quality Assurance Certificate.
DHA also furnish photographs to Associated Press,
Reuters, EPA Photography Agency, Sipa Press and other
leading international news agencies and magazines.
Do¤an Printing Centers
The Do¤an Media Group has six regional printing plants in
Turkey, four of which are owned by Hürriyet, functioning as
Do¤an Printing Centers which produce the Group’s
newspapers. Approximately US$ 45 million has been
invested in machinery in the last four years with
approximately US$ 30 million to be invested over the next
two years. All of the strategically placed printing plants are
equipped with modern technology.
Additionally, the construction of a new printing facility has
been completed during the year 2000. Some of the existing
printing presses have been moved to this new facility with
the installation of new printing presses to be completed in
the second quarter of 2001.
newspaper outside of Turkey. In the long run, DMG
International will continue to expand its operations into
other areas such as broadcasting (and is already in the
process of setting up a TV channel), while increasing
circulation and advertising revenue.
Using modern production management techniques which
result in increased efficiency, Do¤an Printing Centers has
concentrated on creating more synergy within Do¤an
Media Group’s newspapers and coordinating the paper and
material purchases, allowing for further cost reduction.
Newspapers and Magazines
Europe’s Turkish population is the primary target of Do¤an
Yay›n Holding. It has an average circulation of 230,000
newspapers daily. The best-selling newspapers include
Hürriyet, Milliyet and Fanatik, making the Group the
leading publisher of Turkish publications on the continent.
do¤an yay›n holding continued
DO⁄AN YAYIN HOLDING IN EUROPE
Broadcasting
Do¤an Media Group International
EuroD is the European broadcast of the leading Turkish TV
channel, Kanal D. EuroD reaches 4.5 million Turks in Europe
and is also broadcast in the USA, Australia, Canada and
New Zealand.
Do¤an Media Group (DMG) International, a subsidiary
established in Germany, has acquired global distribution
rights to all of the newspapers published by the Group.
Operating as Do¤an Media Group’s gateway to Europe,
DMG International was established in 1999 to handle all of
Group’s publications targeted toward the expatriot Turkish
community in Europe. Headquartered in Frankfurt, it plays
an active role in the development of Do¤an Media Group’s
business relationships and the continuation of dialogue
with the leading media companies in Europe.
In Europe, Turkish viewers overwhelmingly choose Turkish
broadcasts for the ease of following the news in their
native language or for the Turkish pop-music or because
they find Turkish programming more meaningful. Television
is first choice of Europe’s Turkish population; 97% watch
television several times a week and 85% have satellite
dishes. Turkish broadcasts account for a 74% market share
of Turkish viewers.
Currently, there are approximately five million Turks living
in Europe and Hürriyet is by far the best selling Turkish
51
placing utmost
importance
on education
socialactivities
The Ayd›n Do¤an Foundation is a non-profit organization dedicated to support media studies,
encourage the implementation of technological developments and give precedence to cultural
events for the advancement of society. It also works toward the improvement of education,
public health, scientific research, sports and the economy.
The Ayd›n Do¤an Foundation
One of Turkey’s largest corporations, the Do¤an Group is
made up of two conglomerates, Do¤an fiirketler Grubu
Holding and Do¤an Yay›n Holding. Active in business areas
that span from media to tourism and from banking to
automotives, all companies within the Do¤an Group are
cognizant of their position of reliability and trust in the
public eye.
Established in April 1996, the Ayd›n Do¤an Foundation is a
non-profit organization dedicated to support media studies,
encourage the implementation of technological
developments and give precedence to cultural events for
the advancement of society. It also works toward the
highest aspirations of the Foundation. To this end, the
Foundation has financed the construction of six schools in
different parts of Turkey. Built in 1998 at a cost of
approximately US$ 2 million, the Ayd›n Do¤an
Communications High School was donated to the Ministry
of Education. With 17 classrooms, language labs, sports
facilities and conference halls, this school serves as a
model demonstrating the importance given by Foundation
to education and training of individuals for the media
industry. The school accepted its alumni in the 1998-1999
calendar year.
In 1999, the Foundation donated US$ 3 million to
Bosphorus University for the establishment of the Ayd›n
Do¤an Institute of Communications Studies, in which
improvement of education, public health, scientific
research, sports and the economy.
academics from local as well as American and English
universities were to take the part.
Education is of prime importance
As part of its social and cultural activities, the
Foundation organizes national and international
competitions
Turkey is a country well adapted to the latest
developments in information technology. State-of-the-art
technology is used in the preparation and production of
newspapers and magazines, as well as radio and television
programming. The Ayd›n Do¤an Foundation, which brings
together the most prominent names in Turkish journalism,
develops, supports and educates people involved in the
fast changing media industry.
The Foundation places the utmost importance on
education. The building of schools and research centers,
targeting every step of education, has been among the
Drawing the attention of record number of participants
each year, the Young Communicators Award is open to the
students of Communication Faculties of Turkish
universities. In 2000, it hosted approximately 410
competitors. Many promising young people have attained
recognition through the Young Communicators Award.
Students are requested to submit work in the following
fields; Written, Visual, Audio, Advertising, Public Relations
and Internet Broadcasting. Jury members are chosen from
among the most experienced and well-known journalists
53
within the Do¤an Media Group to evaluate the
submissions. The Foundation provides scholarships and
other awards to First Prize holders, some of whom are also
offered employment in Do¤an Media Group companies. The
Award Ceremony takes place in Istanbul with the
participation of faculty, students and teachers from all over
Turkey and Turkish Republic of Northern Cyprus. Each year,
award winning entries are printed in a special book and
presented to the students as a memento of their success.
Jury members are chosen from globally acknowledged
personalities from different disciplines. The evaluation of
submitted work is precise and absolutely objective. A
special book including the resumes of First Prize recipients
and jury members is published every year for this
competition; it is distributed to several school libraries
around the country. The award ceremony takes place in
Istanbul and brings together prestigious scientists, artists,
researchers, authors, poets and other distinguished guests.
The Communications Faculty of the Aegean University
honored the Group’s President, Ayd›n Do¤an, by presenting
him with an honorary doctorate for the support he gives to
media studies.
Cartoons pave the way for fruitful dialogues
In today’s world, the importance of tolerance has increased
tremendously. At a time when violence seems to
accelerate with lightning speed, it becomes the
As is the case in many countries around the world, in Turkey it has also become customary to recognize
and award works of art, literature and science. Among Turkey’s most prestigious events in the fields of
art, culture and humanity, the Ayd›n Do¤an Awards, for the last five years, has been renowned as the
largest organization of its kind in the country.
As is the case in many countries around the world, in
Turkey it has also become customary to recognize and
award works of art, literature and science. Among Turkey’s
most prestigious events in the fields of art, culture and
humanity, the Ayd›n Do¤an Awards, for the last five years,
has been renowned as the largest organization of its kind
in the country. In its first year, an 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 leading experts in the area of social and
human sciences. Ara Güler, a globally prominent
photographer was the recipient of the First Prize for the
Visual Arts category in the third year. In 2000, the top prize
was presented to the great poet, Melih Cevdet Anday. This
year, Prof. Dr. ‹lber Ortayl› received the First Prize for his
contribution in the history category.
54
responsibility of each individual to support the spread of
tolerance so that both present and future generations may
find suitable grounds upon which love, care and respect
can flourish. The peaceful coexistence of human beings
holding different opinions and different beliefs is surely
possible, especially if tolerance and common sense are
integral parts of society.
Such an atmosphere can be created utilizing a common
language as a base. The cartoon is such a base that paves
the way for the establishment of fruitful dialogues. With
such an aim in mind, the Foundation has organized an
annual International Cartoon Competition.
More than 4,000 artists from 90 countries with diverse
ethnic and cultural backgrounds and varied world
perspectives participated in the Ayd›n Do¤an International
Cartoon Competition. Following a seventeen year long
tradition, the cartoons have been published in a special
album and have been distributed worldwide.
Republic of Northern Cyprus, Japan and Greece. The
exhibitions are good examples of how many nationalities
can meet on common ground and bridge cultural
differences.
This competition’s jury is composed, not only of globally
well known individuals, but also of artists from different
cultural roots, reflecting the widest range of viewpoints
possible.
The China Pictorial Agency requested rights to translate,
publish and market a collection of some of the cartoons
submitted to the Ayd›n Do¤an International Cartoon
Competition. This collection will include a speech by the
President of Turkey and the top prize winners of the
competition.
As part of the two-step selection process, the contributed
works are first sent to the pre-selection committee where
they are evaluated through an open discussion. The
selected works are then sent to a panel of judges
who submit their choices via secret ballot. A third selection
Shimonoseki City Art Museum held an exhibition honoring
the 75th anniversary of the foundation of the Turkish
Republic. A special book, in Japanese and English, was
social activities continued
is then made, among the exhibited works, for publication
in a special book.
Cash prizes are given to the winners of the first three
prizes; 12 competitors are also nominated for Honorable
Mention. The Awards Ceremony is held every year in the
Museum of Art and Sculpture in Ankara. Winning entries
are placed on exhibit during the ceremony.
The Foundation organizes national and international
exhibitions
At the request of the Ministry of Foreign Affairs, these
works are also exhibited outside of Turkey, functioning as
‘ambassadors of good will.’ The exhibit has aroused great
interest as it was shown to the public in the Republic of
Moldova, the People's Republic of China, the Turkish
published by the museum for this exhibition. The Ayd›n
Do¤an Foundation and the Shimonoseki City Art Museum
represent yet another example of the increasing cultural
ties being built between Turkey and Japan.
The Foundation is an organizer of national and international
conferences, conventions and seminars attempting to find
solutions to problems in economic, social, cultural and
scientific fields. It also initiates new research projects in
these areas and publishes the results.
The Foundation's website is located at
www.aydindoganvakfi.org.tr.
55
do¤an flirketler grubu
holding a.fl.
financial
statements
consolidated
at 31 december 2000 together with
independent auditor’s report
Baflaran Nas Serbest Muhasebeci
Mali Müflavirlik A.fi.
a member of
PricewaterhouseCoopers
BJK Plaza, Süleyman Seba Caddesi No:92
B Blok Kat 9 Akaretler
Befliktafl 80680 ‹stanbul - Turkey
Telephone: + 90 (212) 259 4980
Facsimile: + 90 (212) 259 4902
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. ("the Holding")
at 31 December 2000 and the related consolidated statements of income and of cash flows for the year then ended,
all expressed in the equivalent purchasing power of the Turkish lira as of 31 December 2000. These consolidated
financial statements are the responsibility of the Holding's management. Our responsibility is to express an opinion
on these consolidated financial statements based on our audit.
2.
We did not audit the financial statements of one Joint Venture, ‹fl Do¤an Petrol Yat›r›mlar› A.fi., the financial
statements of which reflect total assets of TL 613,895 billion (15% of total assets before consolidation adjustments)
at 31 December 2000, and total net income of TL 4,046 billion (2% of total net income before consolidation
adjustments) for the year ended 31 December 2000. These statements were audited by other auditors, whose
respective report thereon was made available to us, and our opinion expressed herein, insofar as it relates to the
amounts included for the Joint Venture, is based solely on the respective report of other auditors.
3.
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 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.
4.
In our opinion, based on our audit and the report of other auditors, the consolidated financial statements referred to
in the first paragraph above present fairly, in all material respects, the consolidated financial position of Do¤an
fiirketler Grubu Holding A.fi. at 31 December 2000 and the consolidated results of its operations and its consolidated
cash flows for the year then ended in accordance with International Accounting Standards.
Without qualifying our opinion we draw attention to the following matters:
5.
The consolidated financial statements include the accounts of the Parent Company, its Subsidiaries and Joint Ventures (Note
3). Subsidiaries are companies in which the Holding has power to control the financial and operating policies for the benefit
of the Holding through the exercise of voting power relating to shares held by the Holding and its Subsidiaries together with
voting power which the 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 the Holding and its Subsidiaries
(through the "control basis") and one or more other parties. In effect the Do¤an family members allow the 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 outside interests.
6.
As explained in Note 35 to the consolidated financial statements, on 22 February 2001, due to the turmoil in the Turkish
financial sector, the Turkish government concluded that the managed exchange rate was no longer sustainable. The crawlingpeg system, which had limited the depreciation of the local currency, was then abandoned in favour of a free-floating
exchange rate. The Turkish lira has depreciated in excess of 85% when compared to the exchange rates prevailing at 31
December 2000 and the prevailing interest rates are high at the date of this report. There is uncertainty as to the effects of
the ongoing volatility in the financial markets on the financial condition of the Holding and its future operations and cash
flows.
7.
As explained in Note 2(b) to the consolidated financial statements, US dollar (US$) amounts shown in the accompanying
consolidated financial statements have been included solely for the convenience of the reader of the consolidated financial
statements and are translated from Turkish lira ("TL"), as a matter of arithmetic computation only, at the Central Bank of the
Republic of Turkey official TL exchange rate of TL 671,765=US$ 1.00 for purchases of US$ on 31 December 2000. Such
translations should not be construed as a representation that the TL amounts have been or could be converted into US$ at
this or any other rate. As explained in paragraph 6 above, the Turkish lira has depreciated significantly in the subsequent
period to the year end. The official exchange rate at 4 July 2001 was TL 1,269,895=US$ 1.00.
Baflaran Nas Serbest Muhasebeci
Mali Müflavirlik Anonim fiirketi
a member of
PricewaterhouseCoopers
Coflkun fien, SMMM
‹stanbul, 4 July 2001
60
DO⁄AN fi‹RKETLER GRUBU HOLD‹NG A.fi.
CONSOLIDATED BALANCE SHEETS AT 31 DECEMBER
(Amounts expressed in terms of the purchasing power of the Turkish lira at 31 December 2000, unless otherwise indicated)
(Amounts translated into U.S. dollars for convenience purposes only (See note 2 (b))
2000
2000
1999
Notes
US$'000
TL millions
TL millions
Cash and amounts due from banks
6
1,214,772
816,041,246
535,324,937
Marketable securities
7
651,797
437,854,355
622,549,295
Reserve deposits with the Central Bank of Turkey
8
58,336
39,187,912
35,254,425
Banking loans - current
9
572,989
384,914,063
280,962,899
Trade receivables
10
381,948
256,579,261
134,935,511
Due from related parties
11
58,423
39,246,682
22,750,478
Inventories
12
119,185
80,064,241
32,788,426
Other current assets
13
205,633
138,136,807
85,118,996
3,263,083
2,192,024,567
1,749,684,967
15,551
10,446,872
24,769,914
ASSETS
Current assets
Total current assets
Non-current assets
Investments and associates
14
Property, plant and equipment - net
15
550,135
369,561,406
258,485,775
Intangible assets - net
16
588,869
395,581,297
51,384,780
16,700
11,218,403
2,685,664
Total non-current assets
1,171,255
786,807,978
337,326,133
Total assets
4,434,338
2,978,832,545
2,087,011,100
Other non-current assets
The accompanying notes form an integral part of these consolidated financial statements.
61
DO⁄AN fi‹RKETLER GRUBU HOLD‹NG A.fi.
CONSOLIDATED BALANCE SHEETS AT 31 DECEMBER
(Amounts expressed in terms of the purchasing power of the Turkish lira at 31 December 2000, unless otherwise indicated)
(Amounts translated into U.S. dollars for convenience purposes only (See note 2 (b))
Notes
2000
US$'000
2000
TL millions
1999
TL millions
17
18
18
19
11
20
21
24
913,498
345,320
924,620
215,178
30,866
27,468
201,336
53,836
613,655,716
231,973,925
621,127,434
144,548,846
20,734,389
18,452,232
135,250,165
36,165,250
586,487,451
208,497,668
471,066,702
57,559,561
32,875,482
16,945,788
98,830,152
4,957,474
2,712,122
1,821,907,957
1,477,220,278
17
22
648,196
92,228
435,435,150
61,955,462
61,646,304
-
25
20
23
24
27,367
3,956
3,882
18,147
793,776
18,384,294
2,657,622
2,607,822
12,190,478
533,230,828
4,261,217
1,641,256
5,122,882
69,621,681
142,293,340
3,505,898
2,355,138,785
1,619,513,618
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Short-term bank borrowings
Banking deposits
Customer deposits
Trade payables
Due to related parties
Insurance technical reserves - current
Other current liabilities
Taxes on income
Total current liabilities
Long-term bank borrowings
Debt securities in issue
Reserve for employment termination
benefits
Insurance technical reserves - non-current
Other non-current liabilities
Deferred tax liabilities - net
Total non-current liabilities
Total liabilities
Minority interest - Do¤an family members
- Other
5g
5g
26,625
475,068
17,884,955
319,135,336
10,376,333
204,327,370
Minority interest
5g
501,693
337,020,291
214,703,703
26
26
138,596
164,026
1,665
(4,242)
126,702
93,103,920
110,187,087
1,118,755
(2,849,926)
85,113,633
66,502,800
114,270,172
1,118,755
70,902,052
426,747
286,673,469
252,793,779
4,434,338
2,978,832,545
2,087,011,100
Shareholders' equity
Share capital
Adjustment to share capital
Share premium
Translation reserve
Retained earnings
27
Total shareholders' equity
Total liabilities and shareholders' equity
Commitments and contingent liabilities
34
The accompanying notes form an integral part of these consolidated financial statements.
62
DO⁄AN fi‹RKETLER GRUBU HOLD‹NG A.fi.
CONSOLIDATED STATEMENTS OF INCOME FOR THE YEARS ENDED 31 DECEMBER
(Amounts expressed in terms of the purchasing power of the Turkish lira at 31 December 2000, unless otherwise indicated)
(Amounts translated into U.S. dollars for convenience purposes only (See note 2 (b))
Revenues:
Non-banking and financial services
Banking and financial services
Operating expenses:
Non-banking and financial services
Banking and financial services
Operating profit:
Non-banking and financial services
Banking and financial services
Financial income/(expense) - net
Other income - net
Income from investments and associates
Amortisation expense for goodwill
Notes
2000
US$'000
2000
TL millions
1999
TL millions
5c
5c
1,693,329
851,739
1,137,518,976
572,168,268
544,182,738
707,032,847
2,545,068
1,709,687,244
1,251,215,585
(1,653,201)
(690,565)
(1,110,562,548)
(463,897,315)
(500,924,385)
(530,761,971)
(2,343,766)
(1,574,459,863)
(1,031,686,356)
40,128
161,174
26,956,428
108,270,953
43,258,353
176,270,876
201,302
135,227,381
219,529,229
(97,153)
36,663
2,598
(26,322)
(65,264,268)
24,628,909
1,745,030
(17,682,385)
2,291,189
4,919,231
(675,000)
(12,259,301)
117,088
78,654,667
213,805,348
(942)
(632,913)
(68,622,614)
116,146
78,021,754
145,182,734
4,659
3,129,792
(59,490,275)
120,805
81,151,546
85,692,459
-
-
(3,462,141)
120,805
81,151,546
82,230,318
7,952
5,341,640
(114,074)
(67,592)
(45,406,032)
(28,746,974)
61,165
41,087,154
53,369,270
5c
5c
5c
5c
29
16
Income before loss on net monetary position,
taxation on income and minority interest
Loss on net monetary position
Income before taxation on income
and minority interest
Taxation on income
24
Profit after tax and loss
on net monetary position
Extraordinary item
30
Income before minority interest
Minority interest - Do¤an family members
Other
Net income
Weighted average number (000’s) of
shares with face value of TL10,000
value each
4
9,310,392
9,310,392
9,310,392
Basic and diluted earnings per share
in full US$ and in TL
4
0.0066
4,413
5,732
The accompanying notes form an integral part of these consolidated financial statements.
63
DO⁄AN fi‹RKETLER GRUBU HOLD‹NG A.fi.
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED 31 DECEMBER
(Amounts expressed in terms of the purchasing power of the Turkish lira at 31 December 2000, unless otherwise indicated)
(Amounts translated into U.S. dollars for convenience purposes only (See note 2 (b))
2000
US$'000
2000
TL millions
1999
TL millions
116,146
78,021,754
145,182,734
(210,364)
731,715
(348,788)
(78,715)
(141,315,325)
491,541,248
(234,303,873)
(52,877,838)
(340,416,679)
619,953,940
(201,403,308)
(40,861,102)
209,994
141,065,966
182,455,585
16
(218,971)
(11,430)
21,652
(147,097,387)
(7,678,243)
14,544,928
(82,530,564)
(8,064,294)
(5,661,149)
33
53,032
(16,048)
(611,505)
64,866
92,790
35,625,110
(10,780,455)
(410,787,860)
43,574,647
62,333,227
4,379,300
(11,950,779)
(8,840,575)
65,952,788
-
(625,614)
(420,266,033)
(46,715,273)
80,443
(50,793)
40,443
529,862
92,228
(78,755)
(6,487)
54,039,747
(34,120,778)
27,168,265
355,942,822
61,955,462
(52,904,569)
(4,357,538)
38,097,972
(45,900,131)
239,978,906
(84,739,298)
(76,461,164)
-
Net cash provided by financing activities
606,941
407,723,411
70,976,285
Net (decrease)/increase in cash and cash equivalents
191,321
128,523,344
206,716,597
1,080,946
726,142,288
519,425,691
1,272,267
854,665,632
726,142,288
Notes
Net income before taxation and minority interest
Adjustments to reconcile net income to
net cash provided by operating activities:
Cash generated from operations
Finance segment interest received
Finance segment interest paid
Taxes paid
28
Net cash from operating activities
Investing activities:
Purchase of property, plant and equipment
Purchase of intangible assets
Purchase of other investments
Proceeds from sale of property, plant, equipment and
investment
Change in other non-current assets and liabilities
Acquisition of subsidiaries, net off cash acquired
Non-finance segment interest received
Net effect of changes in minority shares
5
Net cash used in investing activities
Financing activities:
Proceeds of issuance of share capital to minority interests
Dividends paid to minority interests
Net increase in short-term borrowings
Net increase in long-term borrowings
Proceeds from debt securities in issue
Non-finance segment interest paid
Effect of changes in shareholding structure
Cash and cash equivalents at the beginning of year
Cash and cash equivalents at the end of year
5
5
17
22
4
The accompanying notes form an integral part of these consolidated financial statements.
64
65
577,704
(4,660,789)
-
110,187,087
1,118,755
1,118,755
The accompanying notes form an integral part of these consolidated financial statements.
93,103,920
-
-
Disposal of subsidiaries
Decrease in retained earnings
due to additional subsidiaries
consolidated during the year
Currency translation differences
Transfers
Dividends
13,300,560
Increase in share capital
13,300,560
Net income for the year
-
Balance at
31 December 2000
-
114,270,172
66,502,800
-
Balance at
31 December 1999
4,289,154
(14,765,652)
-
6,234,638
18,703,912
-
1,118,755
Transfers
Dividends
Increase in share capital
Net income for the year
124,746,670
41,564,250
Share
premium
TL millions
Balance at
1 January 1999
Share
capital
TL millions
Adjustment
to share
capital
TL millions
(2,849,926)
(2,849,926)
-
-
-
-
-
Translation
reserve
TL millions
44,026,479
(897,427)
53,369,270
(13,878,264)
(8,639,771)
-
(3,460,111)
17,532,782
65,656,409
(10,523,792)
(3,938,260)
-
(33,661,575)
General
and legal
reserves
TL millions
(Amounts expressed in terms of the purchasing power of the Turkish lira at 31 December 2000, unless otherwise indicated)
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
FOR THE YEARS ENDED 31 DECEMBER
DO⁄AN fi‹RKETLER GRUBU HOLD‹NG A.fi.
41,087,154
(53,369,270)
41,087,154
-
53,369,270
(65,656,409)
53,369,270
65,656,409
Unappropriated
profit
TL millions
Retained earnings
85,113,633
(897,427)
(13,878,264)
(8,639,771)
41,087,154
(3,460,111)
70,902,052
(10,523,792)
(3,938,260)
53,369,270
31,994,834
Total
TL millions
286,673,469
(897,427)
(2,849,926)
41,087,154
(3,460,111)
252,793,779
53,369,270
199,424,509
Shareholders'
equity
TL millions
DO⁄AN fi‹RKETLER GRUBU HOLD‹NG A.fi.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER
(Amounts expressed in terms of the purchasing power of the Turkish lira at 31 December 2000, unless otherwise indicated)
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 trade, media, finance and tourism,
and is registered in Turkey. Do¤an Holding is owned by members of Do¤an family, Adilbey Holding A.fi. (which is also owned by
Do¤an family members) and Ayd›n Do¤an Vakf› as defined in Note 26. The address of the registered office is as follows:
Oymac› Sokak No: 51
81190 Altunizade-‹stanbul
Do¤an Holding has the following subsidiaries ("the Subsidiaries"). The nature of the business of the Subsidiaries are as follows:
Name
Türk D›fl Ticaret Bankas› A.fi. ("D›flbank")
D›fl Ticaret Factoring A.fi. ("D›fl Factoring")
D›fl Ticaret Finansal Kiralama A.fi. ("D›fl Leasing")
D›fl Yat›r›m A.fi. ("D›fl Yat›r›m")
D›flbank Holding Malta Limited ("D›flbank Malta")
D›flbank Nederland N.V. ("D›flbank Nederland") (1)
K›br›s D›fl Ticaret Bankas› Offshore Ltd. ("D›flbank K›br›s")
Ray Sigorta A.fi.("Ray Sigorta")
Do¤an Hayat Sigorta A.fi. ("Do¤an Hayat")
Hürriyet Gazetecilik ve Matbaac›l›k A.fi. ("Hürriyet")
Milliyet Gazetecilik A.fi. ("Milliyet")
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 Raks Sat›fl Pazarlama ve Da¤›t›m A.fi. ("Do¤an Raks")
Gerçek Yay›nc›l›k A.fi. ("Gerçek Yay›nc›l›k")
Do¤an Kitapç›l›k A.fi. ("Do¤an Kitapç›l›k")
Do¤an Haber Ajans› A.fi. ("Do¤an Haber")
Do¤an Bas›m ve Da¤›t›m ‹flleri A.fi. ("Do¤an Bas›m")
Simge Yay›nc›l›k ve Da¤›t›m A.fi. ("Simge")
Milliyet Haber Ajans› A.fi. ("Milliyet Haber")
Hürriyet TV Film Prodüksiyon ve Haber Ajans› A.fi. ("Hürriyet TV")
Mesiar Medya Sigorta Arac›l›k Hizmetleri A.fi. ("Mesiar")
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 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")
‹sedafl ‹stanbul Elektrik Da¤›t›m Sanayi ve Ticaret A.fi. ("‹sedafl")
Milta Milliyet Seyahat Acenta ‹flletmecili¤i A.fi. ("Milta Acenta")
Karada Turizm ‹flletmeleri A.fi. ("Karada")
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 Elektronik Servis Hizmetleri A.fi. ("Do¤an Online")
Do¤an Media International GmbH ("DMG")
Nature of
business
Banking
Factoring
Leasing
Brokerage and
fund management
Holding
Banking
Banking
Insurance
Insurance
Publishing
Publishing
Distribution
Advertisement
Printing
Retail
Publishing
Publishing
News Agency
Printing
Distribution
News Agency
Visual Production
Insurance Agency
Trading
Segment
Finance
Finance
Finance
Finance
Finance
Finance
Finance
Finance
Finance
Media
Media
Media
Media
Media
Media
Media
Media
Media
Media
Media
Media
Media
Media
Trade
Trading
Trade
Construction
Trading
Holding
Production
Production
Tourism
Energy
Tourism
Tourism
Visual Production
Visual Production
Internet
Distribution
Trade
Trade
Other
Other
Other
Other
Other
Other
Other
Media
Media
Media
Media
(1) D›flbank Nederland N.V. was established in 1999, but operations commenced in 2000. Therefore D›flbank Nederland N.V. was
carried at cost at 31 December 1999, but was consolidated at 31 December 2000.
66
The number of employees of the Holding at 31 December 2000 is 15,626 (1999: 10,812).
For the purposes of the segmental information in the accompanying consolidated financial statements, Do¤an Holding’s own
unconsolidated financial statements were included in the "other segment" (Note 5).
All the Subsidiaries are registered in Turkey except for D›flbank Malta in Malta, D›flbank Nederland N.V. in the Netherlands, D›flbank
K›br›s in Turkish Republic of Northern Cyprus and DMG in Germany. However, sales and purchases of the group are principally made
in Turkey and no geographic segmental information is considered necessary.
Do¤an Holding has the following Joint Ventures ("the Joint Ventures"). All the 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:
Joint
Nature of
Venture
Name
business
Segment
Partner
Do¤an Burda Rizolli Dergi Yay›nc›l›k ve
Pazarlama A.fi. ("Hürgüç") (1)
Do¤an ve Egmont Yay›nc›l›k A.fi. ("Do¤an Egmont")
Ultra Kablolu Televizyon ve Telekomünikasyon
Sanayi ve Ticaret A.fi. ("Ultra Kablo")
‹fl Do¤an Petrol Yat›r›mlar› A.fi. ("‹fl Do¤an")
Press
Publishing
Media
Media
Burda GmbH
Egmont
Telecommunication
Media
Koç Holding A.fi.
Distribution of
petroleum products
Energy
T. ‹fl Bankas› A.fi.
(1) Ad Yay›nc›l›k A.fi. ("Ad Yay›nc›l›k") was acquired by Do¤an Burda Rizolli Dergi Yay›nc›l›k ve Pazarlama A.fi. in 1999.
‹fl Do¤an acquired 51% of the issued share capital of Petrol Ofisi A.fi. ("POAfi") at the tender held on 3 March 2000 (Note 33).
NOTE 2 - BASIS OF PRESENTATION OF FINANCIAL STATEMENTS
a) Turkish lira financial statements
Do¤an Holding and its Subsidiaries and Joint Ventures maintain their books of account and prepare their statutory financial
statements ("Statutory Financial Statements") in Turkish lira in accordance with the Turkish Commercial Code (the "TCC"), tax
legislation, and starting from 1 January 1994, the uniform chart of accounts issued by the Ministry of Finance, applicable Turkish
insurance laws for insurance companies and banking law for banks; and for listed Subsidiaries only, accounting principles issued by
the Turkish Capital Market Board ("CMB Principles"). The accompanying consolidated financial statements are based on the statutory
records, which are maintained under the historical cost convention (except for the revaluation of property, plant and equipment as
discussed in Note 15), with adjustments and reclassifications including restatement for changes in the general purchasing power of
the Turkish lira, for the purpose of fair presentation in accordance with International Accounting Standards ("IAS"). The accompanying
consolidated financial statements are prepared in accordance with and comply with International Accounting Standards.
The restatement for the changes in the general purchasing power of the Turkish lira as of 31 December 2000 is based on IAS 29
("Financial Reporting in Hyperinflationary Economies"). IAS 29 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.
One characteristic that necessitates the application of IAS 29 is a cumulative three-year inflation rate approaching or exceeding
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 accompanying
consolidated financial statements as of 31 December 2000 and 1999 are given below:
Dates
Index
31 December 2000
31 December 1999
2,626.0
1,979.5
Conversion factors
1.000
1.327
67
DO⁄AN fi‹RKETLER GRUBU HOLD‹NG A.fi.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER
(Amounts expressed in terms of the purchasing power of the Turkish lira at 31 December 2000, unless otherwise indicated)
The main procedures for the above mentioned 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 periods are restated in the same terms.
-
Monetary assets and liabilities which 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 (monthly, yearly average, year end) conversion factors. Additions to
property, plant and equipment in the year of acquisition are restated using 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 statements of income are restated by applying the relevant (monthly, yearly average, year end) conversion
factors.
-
The effect of inflation on Do¤an Holding's, the Subsidiaries' and Joint Ventures' net monetary position is included in the
statements of income as monetary gain or loss.
b) US dollar convenience translation
US dollar ("US$") amounts shown in the accompanying consolidated financial statements have been included solely for the
convenience of the reader and are translated from Turkish lira ("TL"), as a matter of arithmetic computation only, at the official TL
exchange rate for purchases of US dollars announced by the Central Bank of Turkey on 31 December 2000 of TL 671,765 =
US$ 1. Such translation should not be construed as a representation that the TL amounts have been or could be converted into
US$ at this or any other rate. As further explained in Note 35, the Turkish lira has depreciated significantly in the subsequent
period to the year end. The official exchange rate at 4 July 2001 was TL 1,269,895 = US$ 1.00.
c) Translation of foreign subsidiary financial statements
The assets and liabilities of foreign subsidiaries are translated into Turkish lira using the relevant foreign exchange rates prevailing
at the balance sheet date. The income and expense items are translated into Turkish lira using average exchange rates. Exchange
differences arising from using closing and average exchange rates are included in the shareholders’ equity as translation reserve.
NOTE 3 - BASIS OF CONSOLIDATION
a) The consolidated financial statements include the accounts of the parent company, Do¤an Holding, its Subsidiaries and its Joint
Ventures ("the Group") on the basis set out in sections (b), (c) and (d) below. Regarding the financial statements of Do¤an Holding
and Do¤an Yay›n, reporting dates of these companies are different from the ones included in the consolidation. For the
consolidation purposes, Do¤an Holding and Do¤an Yay›n have prepared financial statements as the same date as the financial
statements of the companies included in the consolidation which has been prepared as of the date of the consolidated financial
statements. The financial statements of the companies included in the consolidation are based on the statutory records, which
are maintained under the historical cost convention (except for the revaluation of property, plant and equipment as discussed in
Note 15), with adjustments and reclassifications including restatement for changes in the general purchasing power of the
Turkish lira, and applying uniform presentation.
b) Subsidiaries are companies in which Do¤an Holding has 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% 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.
68
The table below sets out all Subsidiaries and shows their shareholding structure at 31 December:
Name
Direct and indirect
control by Do¤an
Holding and its
Subsidiaries (%)
2000
1999
D›flbank
65.00%
D›fl Factoring
100.00%
D›fl Leasing
100.00%
D›fl Yat›r›m
100.00%
D›flbank Malta
100.00%
D›flbank Nederland
100.00%
D›flbank K›br›s
100.00%
Ray Sigorta
66.15%
Do¤an Hayat
100.00%
Hürriyet
66.63%
Milliyet
74.47%
Yaysat
75.00%
Dyg ‹lan
99.98%
Do¤an Ofset
99.77%
Do¤an Raks
91.76%
Gerçek Yay›nc›l›k
99.94%
Do¤an Kitapç›l›k
99.90%
Do¤an Haber (1)
42.58%
Do¤an Bas›m
100.00%
Simge
42.80%
Milliyet Haber
100.00%
Hürriyet TV
99.92%
Mesiar
92.00%
Milpa
65.00%
Hürriyet Pazarlama
45.00%
Milanur
50.00%
Do¤an Oto
95.00%
Do¤an Yay›n
76.57%
Çelik Halat
58.44%
Ditafl Do¤an
50.93%
Milta Turizm
93.00%
‹sedafl (1)
40.00%
Milta Acenta
94.00%
Karada
51.00%
Do¤an Prodüksiyon
96.00%
ANS
70.00%
Do¤an Online
60.00%
DMG
98.00%
Do¤an Bilgi Teknolojileri A.fi.
("Do¤an Bilgi") (2)
Posta Ticari ve S›nai Ürünler
Pazarlama Sanayi ve Ticaret
A.fi. ("Posta") (2)
Zigana Elektrik Da¤›t›m Sanayi ve
Ticaret A.fi. ("Zigana") (2)
-
Control through
shares held by
Do¤an family
members (%)
2000
1999
Total
controlling
interest (%)
2000
1999
Total
effective
interest (%)
2000
1999
65.00%
99.30%
100.00%
100.00%
88.00%
100.00%
100.00%
60.51%
100.00%
66.63%
74.47%
75.00%
94.98%
99.78%
81.23%
99.94%
99.90%
31.25%
100.00%
56.00%
99.92%
92.00%
70.00%
45.00%
50.00%
95.00%
76.57%
47.18%
50.93%
93.00%
40.00%
94.00%
82.43%
-
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.67%
0.00%
0.00%
0.00%
0.00%
0.04%
0.10%
0.00%
0.00%
57.20%
0.00%
0.00%
0.00%
0.50%
55.00%
50.00%
5.00%
3.37%
4.00%
0.00%
5.00%
5.00%
6.00%
46.93%
0.00%
0.00%
40.00%
2.00%
0.00%
0.70%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.67%
0.00%
0.00%
0.00%
0.00%
0.05%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.50%
55.00%
0.00%
5.00%
7.43%
4.00%
0.00%
5.00%
5.00%
6.00%
0.00%
-
65.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
66.15%
100.00%
66.63%
75.14%
75.00%
99.98%
99.77%
91.76%
99.98%
100.00%
42.58%
100.00%
100.00%
100.00%
99.92%
92.00%
65.50%
100.00%
100.00%
100.00%
78.96%
62.44%
50.93%
98.00%
45.00%
100.00%
97.93%
96.00%
70.00%
100.00%
100.00%
65.00%
100.00%
100.00%
100.00%
88.00%
100.00%
100.00%
60.51%
100.00%
66.63%
75.14%
75.00%
94.98%
99.78%
81.23%
99.99%
99.90%
31.25%
100.00%
56.00%
99.92%
92.00%
70.50%
100.00%
50.00%
100.00%
84.00%
51.18%
50.93%
98.00%
45.00%
100.00%
82.43%
-
60.80%
59.71%
60.80%
60.80%
62.91%
60.80%
60.80%
41.31%
78.96%
51.02%
62.76%
51.04%
62.83%
62.38%
68.90%
50.99%
64.00%
28.47%
51.02%
28.73%
53.76%
50.98%
49.93%
65.00%
22.96%
32.50%
95.00%
76.57%
54.52%
39.91%
93.00%
40.00%
87.42%
25.72%
61.21%
53.60%
45.94%
67.37%
61.40%
72.89%
61.43%
61.39%
68.31%
61.39%
60.80%
50.05%
81.23%
51.02%
62.76%
48.45%
63.21%
61.97%
61.17%
50.99%
64.00%
19.81%
51.02%
53.92%
50.98%
47.66%
70.00%
22.96%
35.00%
95.00%
76.57%
42.06%
41.48%
93.00%
40.00%
87.42%
76.66%
-
95.00%
-
3.75%
-
98.75%
-
95.00%
80.00%
-
20.00%
-
100.00%
-
66.30%
65.00%
-
5.00%
-
70.00%
-
65.00%
69
DO⁄AN fi‹RKETLER GRUBU HOLD‹NG A.fi.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER
(Amounts expressed in terms of the purchasing power of the Turkish lira at 31 December 2000, unless otherwise indicated)
(1) The controlling interest in these subsidiaries is less than 50%; however Do¤an Holding exercises a dominant influence and
power to govern the financial and operating policies of these companies.
(2) Subsidiaries over which Do¤an Holding has controlling interest of more than 50% have not been consolidated on the ground of
materiality, since the results of these companies have an insignificant impact on the consolidated net worth, financial position
and results of the Group.
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.
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. Joint Ventures are consolidated using the
proportionate consolidation method, i.e. by consolidating the Group's share of assets, liabilities, income and expenditure of each
Joint Venture on a line-by-line basis (Note 5).
The table below sets out the Joint Ventures and shows their shareholding structure at 31 December:
Name
Do¤an Burda Rizolli
Do¤an Egmont
Ultra Kablo
‹fl Do¤an
Direct and indirect
control by Do¤an
Holding and its
Subsidiaries (%)
2000
1999
Control through
shares held by
Do¤an family
members (%)
2000
1999
Total
controlling
interest (%)
2000
1999
Total
effective
interest (%)
2000
1999
40.72
50.00
50.00
48.00
2.02
2.00
42.74
50.00
50.00
50.00
31.18
38.29
38.29
47.61
54.48
50.00
33.33
-
10.40
-
64.88
50.00
33.33
-
41.17
38.29
17.00
-
d) Associates are companies, not being subsidiaries or joint ventures, in which Do¤an Holding and its Subsidiaries (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) have controlling interests of between 20% and
50% of the ordinary share capital held for the long-term and over which Do¤an Holding exercises a significant influence. In
effect Do¤an family members allow Do¤an Holding to exercise the voting power in respect of their shares held in these
companies. Associates are accounted for using the equity method of accounting in respect of Do¤an Holding and its
Subsidiaries’ attributable share.
Simge, which was an Associate of the Group at 31 December 1999, has been considered as a subsidiary at 31 December 2000,
due to a change in shareholding structure.
e) The investments, in which the Group together with Do¤an family members, have controlling interests below 20%, or over which
the Holding does not exercise a significant influence, are carried at cost and restated to the equivalent purchasing power at 31
December 2000 less any provision for diminution in value (Note 14).
The investments in which the Group together with Do¤an family members, have attributable interests of 20% or more, which
are either immaterial, or where a significant influence is not exercised by Do¤an Holding, are carried at cost and restated to the
equivalent purchasing power at 31 December 2000. These companies have not been equity accounted for due to the
insignificance of their combined impact on the net worth, financial position and results of Do¤an Holding (Note 14).
f)
The 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.
70
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 RELEVANT ACCOUNTING POLICIES
Where necessary, accounting policies for Subsidiaries have been changed to ensure consistency with the policies adopted by the
Holding. The significant accounting policies followed in the preparation of the accompanying consolidated financial statements
are summarised below:
Related parties
For the purpose of the accompanying 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, investments and joint
venture partners 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 were priced predominantly at market rates (Note 11).
Marketable securities
In the finance segment, investment securities include debt and equity securities which management intends to hold until maturity
and are stated at cost as adjusted for the amortisation of premiums or discounts on purchases over the period to maturity. Interest
earned on investment securities, including gains from equity securities for which the bank holds option contracts, are reported as
interest income. The gains from equity securities represent the difference between the purchase price of the equities and the strike
price of the related put and call options and are amortised to income over the life of the option contract on a straight-line basis.
Investment securities include securities sold under repurchase agreements. Dealing securities are stated at fair value based on
quoted market prices. All gains and losses realised and unrealised from trading in dealing securities are reported in net trading
income. Interest earned with holding dealing securities is reported as interest income.
Other marketable securities in other segments are also stated at the lower of cost or market value (Note 7).
In the finance segment securities sold under sale and repurchase agreements ("repos") are retained in the financial statements and
the counterparty liability is included in deposits from banks or customers as appropriate. Securities purchased under agreements to
resell ("reverse repos") are recorded as placement with other banks. The difference between sale and repurchase price is treated as
interest and accrued evenly over the life of the repo agreements.
Marketable securities, where original maturity at the time of purchase is less than three months, are considered as cash equivalents
for the purposes of the statements of cash flows.
Provision for loan losses and for doubtful receivables
Banking
A specific credit risk provision for loan impairment is established for the Subsidiaries in the finance segment to provide for
management’s estimate of credit losses as soon as the recovery of an exposure is identified as doubtful. The level of the provision is
based on the internal regulations of the banks which requires a classification to loans under follow-up and a full provision for the
outstanding balance of the loan if the payment of interest is overdue for more than thirty days.
A general provision for loan impairment is established to cover losses that are judged to be present in the leading portfolio at the
balance sheet date, but which have not been specifically identified as such. The provision for loan impairment is based on an analysis
of internal credit gradings allocated to borrowers, refined to reflect the economic climate in the markets in which the Subsidiaries in
the finance segment operates.
The movement in provision is charged against the income for the year. When a loan is deemed uncollectable, 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.
Foreign currency indexed loans are recognised at their initial Turkish lira values and subsequent foreign currency gains calculated on
such loans are included in interest income on loans in the income statement.
71
DO⁄AN fi‹RKETLER GRUBU HOLD‹NG A.fi.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER
(Amounts expressed in terms of the purchasing power of the Turkish lira at 31 December 2000, unless otherwise indicated)
Other
The provision for other doubtful receivables is based on management's evaluation of the receivable, including such factors as the
volume and type of receivable outstanding, collateral obtained, past experience and economic conditions (Note 10).
Inventory valuation
Inventories are valued at the lower of cost or net realisable value, restated to equivalent purchasing power at 31 December 2000.
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 (Note 12). Net realisable value is the estimate of the selling price in the ordinary course of
business, less the costs of completion and selling expenses.
Property, plant and equipment and related depreciation
Property, plant and equipment are initially carried at cost less accumulated depreciation, in each case restated to equivalent
purchasing power at 31 December 2000. Land and buildings of POAfi, the subsidiary of ‹fl Do¤an, are shown at fair value based on
valuations by external independent valuers, less subsequent depreciation. Depreciation is provided on the restated amounts for
property, plant and equipment on a straight-line basis. Land is not depreciated as it is deemed to have an indefinite life. The
depreciation periods for property, plant and equipment, which approximate the economic useful lives of such assets, are as follows:
Buildings
Land improvements
Machinery and equipment
Furniture and fixtures
Motor vehicles
25
5
5
4
-
50
50
15
15
10
years
years
years
years
years
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.
Expenses for the repair of property, plant and equipment are normally charged against income. They are, however, capitalised in
exceptional cases if they result in an enlargement or substantial improvement of the respective assets.
Leases
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 capitalised 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. The property, plant and equipment acquired under finance leases is depreciated over
the shorter of the useful life of the asset or the lease term. Lease payments are treated as comprising capital and interest elements.
The capital element is treated as reducing the capitalised obligation under the lease and the interest element is charged to the
statement of income. Depreciation on the relevant asset is also charged to the statement of income over a period depending on the
useful life of the asset.
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.
Intangible assets
Intangible assets comprise acquired intellectual property, trademarks and other identified rights. They are recorded at acquisition cost
and amortised on a straight-line basis over their estimated economic lives for a period not exceeding 10 years from date of
acquisition (Note 16).
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.
72
Under this method the Group is required to make provision for deferred income taxes on the restatement of certain assets and, in
relation to an acquisition, on the difference between the fair values of the net assets acquired and their tax base. The principal
temporary differences arise from the restatement of property, plant and equipment and inventory over their historical cost, accrued
income, provision for employment termination benefits, provision for promotion campaigns and tax losses carried forward.
Deferred tax liabilities are recognised for all taxable temporary differences, where deferred tax assets resulting from deductible
temporary differences are recognised to the extent that it is probable that future taxable profit will be available against which the
deductible temporary difference can be utilised (Note 24).
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.
Leases - the Group as lessor
Assets leased to customers under agreements which transfer substantially all the risks and rewards associated with ownership,
other than legal title, are classified as finance leases. The net investment in finance leases represents total minimum lease payments
less gross earnings allocated to future periods, and is included in other current assets. Income from finance leases is credited to the
statement of income using the actuarial after tax method and sum of the digits method to give a periodic rate of return on the net
cash investment.
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 media segment (Note 25).
Computer software development costs
Generally, costs associated with developing computer software programs are recognised as expense as incurred. However,
expenditure that enhances and extends the benefits of computer software programs beyond their original specifications and lives is
recognised as a capital improvement and added to the original cost of the software. Computer software development costs
recognised as assets are amortised using the straight-line method over their useful lives but not exceeding a period of five years, or
over the period of the lease if less than five years.
Foreign currency transactions
Income and expenses arising in foreign currencies have been translated at the exchange rates prevailing at the dates of the
transactions. Monetary assets and liabilities denominated in foreign currencies have been translated into Turkish lira at the exchange
rates prevailing at the balance sheet dates. Exchange gains or losses arising from settlement and translation of foreign currency
items have been included in the consolidated statements of income.
Goodwill
Goodwill represents the difference between the acquisition price and the attributable share of the Group in the fair value of the
underlying net assets of the acquired company. The fair value of property, plant and equipment of POAfi was assessed as of 15
December 2000 by P&D Gayrimenkul Dan›flmanlar› in association with Healey&Baker and is assumed to have had the same fair
value as at date of acquisition on 21 July 2000. Goodwill is amortised using the straight-line method over the estimated useful life of
5 to 20 years and is included in intangible assets (Notes 16 and 33).
Revenue recognition
Finance
Banking
Interest income is recorded on an accrual basis. Interest is suspended where due but not received on loans and advances in arrears
where, in the opinion of management, recovery is doubtful. The amounts suspended, less recoveries of amounts suspended in prior
years, are excluded from interest receivable on loans and advances.
Commission income and fees for various banking services are recorded as income at the date when the transactions to which they
relate at effected.
73
DO⁄AN fi‹RKETLER GRUBU HOLD‹NG A.fi.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER
(Amounts expressed in terms of the purchasing power of the Turkish lira at 31 December 2000, unless otherwise indicated)
Insurance
A provision for unearned premiums is set up in respect of in-force policies for which the premium period extends beyond the
accounting period. Unearned premiums are determined from premiums written during the year, less reinsurance, on the basis that
premiums are written on the middle day of each month (Note 20).
Life:
Premium income represents premiums accrued on policies issued during the year, as adjusted by the reserve for unearned
premiums for annual life policies.
Non-Life:
Premium income represents premiums on policies written during the year, net of taxes and cancellations, as adjusted by the
reserve for unearned premiums.
Other
Sales are recognised on an accrual basis at the time deliveries or acceptances are made, at the invoiced values for Subsidiaries
operating in the media, trading and other segments. Net sales represent the invoiced value of goods shipped less sales returns and
commission, and excluding sales taxes. Interest income is recognised as it accrues, taking into account the effective yield on the
asset, unless collectibility is in doubt.
Insurance reserves
Life assurance provision
The Subsidiaries dealing in life assurance are required to establish benefit reserves which in the 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.
Claims and claim provisions
Non-life insurance claims are recorded in the period in which they occur, based on reported claims or on the basis of estimates when
not reported. Differences between estimates at the end of successive accounting periods are recognised in claims expenses for the
periods in which these differences are identified.
Full provision is made for outstanding claims, including claim settlements, reported at the year end. Incurred but not reported
("IBNR") claims are included under claim provisions.
Capital increases
Pro-rata capital increases to existing shareholders are accounted for at par value as approved.
Research and development costs
Research and development costs are recognised and expensed in the income statement in the period in which they are incurred.
Expense accrual for promotion materials
Expense accrual for promotion materials includes the purchase cost and the value added tax of the promotion materials related to
ongoing campaigns.
Dividends
Dividends receivable are recognised as income in the period when they are declared and dividends payable are recognised as an
appropriation of profit in the period in which they are declared.
74
Barter agreements
Purchases related to barter agreements are recorded at purchase date and revenue is recorded at the time of publication.
Investment grants
The Group has right to exercise investment grants when the investment incentive certificate is approved by the related authorities.
The Group does not reflect these investment grants in the statutory financial statements but only has right to deduct the amounts
approved from the project costs from the corporate tax base subject to fulfilling the requirements regarding completion of the
investment (Note 32).
Forward foreign exchange contracts
Forward foreign exchange contracts which are entered into hedges against foreign currency loans and borrowings, are treated as
spot exchange contracts and are recorded rate at the date of the contract; discounts or premiums are recognised in the statement of
income over the life of the contract.
Cash and cash equivalents
Cash and cash equivalents include cash and amounts due from banks, and marketable securities with maturity periods of less than
three months.
Analysis of cash and cash equivalents included in the consolidated statements of cash flows for the years ended 31 December are
as follows:
2000
TL millions
1999
TL millions
816,041,246
535,324,937
38,624,386
190,817,351
854,665,632
726,142,288
Cash and cash equivalents:
Cash and amounts due from banks
Marketable securities, where original
maturity is less than three months
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 program focuses on the unpredictability of
financial markets and seeks to minimise potential adverse effects on the financial performance of the Group.
Foreign exchange risk
Foreign currency denominated assets and liabilities together with purchase and sale commitments in the banking sector give rise to
foreign exchange exposure. Open exchange exposures are hedged with derivative financial instruments which primarily include
forward foreign exchange contracts. All forward contracts hedging foreign exchange risk have a duration of less than a year.
Interest rate risk
The Group is exposed to interest rate risk through the impact of rate changes on interest bearing liabilities and assets. These
exposures are managed by using natural hedges that arise from offsetting interest rate sensitive assets and liabilities.
Funding risk
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.
75
DO⁄AN fi‹RKETLER GRUBU HOLD‹NG A.fi.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER
(Amounts expressed in terms of the purchasing power of the Turkish lira at 31 December 2000, unless otherwise indicated)
Credit risk
Ownership of financial assets involves the risk that counterparties may be unable to meet the terms of their agreements. These
risks are monitored by credit ratings and 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 and their dispersion across many different industries.
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 were used to estimate 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 to carrying value.
The fair values of certain financial assets carried at cost, including cash and amounts due from banks, deposits with banks, and
marketable securities plus the respective accrued interest are considered to approximate their respective carrying values due to their
short-term nature and negligible credit losses.
The fair value of loans and consumer loans are also considered to approximate carrying value and the fair value of the loan portfolio
is estimated by assessing the risk components of the portfolio.
The carrying values of trade receivables along with the related allowances for uncollectability are estimated to be their fair values.
The fair value of marketable securities which has been determined by reference to market value, approximates to carrying value.
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. Trading liabilities, derivatives and foreign exchange instruments, have been estimated
at their fair values.
Long-term borrowings which, in principle at variable rates, are denominated in foreign currencies are translated at year-end exchange
rates and accordingly their fair values approximate their carrying values. The carrying values of long-term borrowings in Turkish lira
along with the related accrued interest is estimated to be their fair values.
Earnings per share
Earnings per share disclosed in the accompanying consolidated statement of income are determined by dividing net profit by the
weighted average number of shares in existence 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 and revaluation surplus. For the purpose of earnings per share computations, the weighted
average number of shares outstanding during the year has been adjusted in respect of bonus share issues without a corresponding
change in resources, by giving them retroactive effect for the year in which they were issued and each earlier year. Bonus shares
issued during the year were as follows:
76
Number of shares issued attributable
to transfers to share capital from:
Year
Retained
earnings
Revaluation
surplus
Total
2000
1999
1,481,720,200
918,099,262
1,178,391,800
1,575,755,700
2,660,112,000
2,493,854,962
There was no difference between basic and diluted earnings per share for any class of shares for any of these years.
Minority Interests
Minority interest represent the minority shareholders’ share in the net assets and results of the year for subsidiaries and is
separately classified in the consolidated balance sheets and statements of income. Minority interest attributable to Do¤an family
members have been identified as separately disclosed.
Comparatives
Where necessary, comparative figures have been reclassified to conform with changes in presentation in the current year so that the
reclassification will result in a more appropriate presentation of events or transactions.
Change in accounting estimate
For the periods ending prior to 1 January 2000, the subsidiary dealing in non-life insurance business, accounted for an equalisation
provision against earthquake risks derived from the portion of net retained fire and engineering premiums. If an equalisation provision
would have been provided on the same basis of the prior year’s provision, the net income for the year would decrease by TL
347,270 million.
NOTE 5 - SEGMENTAL INFORMATION
a) External revenues
Finance
Media
Trade
Energy
Other
2000
TL millions
1999
TL millions
572,168,268
432,415,815
86,708,928
575,686,173
42,708,060
707,032,847
397,036,477
108,729,109
38,417,152
1,709,687,244
1,251,215,585
2000
TL millions
1999
TL millions
108,270,953
16,878,445
(8,635,250)
26,206,427
(7,493,194)
176,270,876
42,046,125
10,198,794
(8,986,566)
135,227,381
219,529,229
b) Operating profit
Finance
Media
Trade
Energy
Other
77
Operating profit/(loss)
Administrative expenses
Selling and distribution expenses
Profit elimination
108,270,953
(114,693,600)
932,043
222,032,510
573,571,921
Revenues
Gross profit
572,168,268
1,403,653
External revenues
Inter segment revenues
(351,539,411)
583,009,949
Combined revenues
Cost of sales
572,168,268
9,438,028
1,403,653
External revenues
Intra segment revenues
Inter segment revenues
Finance
TL millions
c) Segmental analysis for the year ended 31 December 2000
16,878,445
(44,924,724)
(83,434,240)
18,385,876
126,851,533
(313,033,074)
439,884,607
432,415,815
7,468,792
614,289,027
432,415,815
174,404,420
7,468,792
Media
TL millions
(8,635,250)
(6,659,980)
(4,426,044)
(9,151,808)
11,602,582
(89,922,330)
101,524,912
86,708,928
14,815,984
101,531,675
86,708,928
6,763
14,815,984
Trade
TL millions
26,206,427
(9,349,162)
(243,482)
(153,598)
35,952,669
(539,928,725)
575,881,394
575,686,173
195,221
575,881,394
575,686,173
195,221
Energy
TL millions
(7,493,194)
(14,868,328)
(2,774,754)
(4,406,097)
14,555,985
(33,445,439)
48,001,424
42,708,060
5,293,364
48,544,811
42,708,060
543,387
5,293,364
Other
TL millions
(Amounts expressed in terms of the purchasing power of the Turkish lira at 31 December 2000, unless otherwise indicated)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER
DO⁄AN fi‹RKETLER GRUBU HOLD‹NG A.fi.
-
-
-
29,177,014
(29,177,014)
(29,177,014)
-
-
Inter segment
Elimination
TL millions
135,227,381
(190,495,794)
(90,878,520)
5,606,416
410,995,279
(1,298,691,965)
1,709,687,244
1,709,687,244
-
1,923,256,856
1,709,687,244
184,392,598
29,177,014
Total
TL millions
79
262,398,637
(84,086,705)
(2,041,056)
176,270,876
Administrative expenses
Selling and distribution expenses
Profit elimination
Operating profit/(loss)
710,084,184
Revenues
Gross profit
707,032,847
3,051,337
External revenues
Inter segment revenues
(447,685,547)
716,302,669
Combined revenues
Cost of sales
707,032,847
6,218,485
3,051,337
External revenues
Intra segment revenues
Inter segment revenues
Finance
TL millions
Segmental analysis for the year ended 31 December 1999
42,046,125
(35,074,214)
(86,734,663)
12,380,493
151,474,509
(250,150,769)
401,625,278
397,036,477
4,588,801
589,655,877
397,036,477
188,030,599
4,588,801
Media
TL millions
10,198,794
(8,355,202)
(3,998,463)
(9,538,520)
32,090,979
(90,305,251)
122,396,230
108,729,109
13,667,121
122,398,741
108,729,109
2,511
13,667,121
Trade
TL millions
-
-
-
-
-
-
-
-
Energy
TL millions
(8,986,566)
(17,632,463)
(2,329,265)
(2,780,835)
13,755,997
(28,564,713)
42,320,710
38,417,152
3,903,558
42,597,270
38,417,152
276,560
3,903,558
Other
TL millions
-
-
-
25,210,817
(25,210,817)
(25,210,817)
-
-
Inter segment
Elimination
TL millions
219,529,229
(145,148,584)
(93,062,391)
(1,979,918)
459,720,122
(791,495,463)
1,251,215,585
1,251,215,585
-
1,470,954,557
1,251,215,585
194,528,155
25,210,817
Total
TL millions
DO⁄AN fi‹RKETLER GRUBU HOLD‹NG A.fi.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER
(Amounts expressed in terms of the purchasing power of the Turkish lira at 31 December 2000, unless otherwise indicated)
d) Segment assets employed
2000
TL millions
1999
TL millions
Finance
Media
Trade
Energy
Other
1,779,716,971
469,248,493
142,359,593
601,065,476
886,117,952
1,539,051,716
390,599,504
142,226,307
597,375,273
Total combined
3,878,508,485
2,669,252,800
Less: segment elimination
(899,675,940)
(582,241,700)
Total assets as per these accompanying
consolidated financial statements
Net assets
2,978,832,545
2,087,011,100
279,735,288
234,840,665
72,950,751
237,494,967
590,671,452
210,409,368
218,429,415
68,459,663
489,513,168
1,415,693,123
986,811,614
(1,129,019,654)
(734,017,835)
Shareholders’ equity
286,673,469
252,793,779
Minority interest
Total net assets as per these accompanying
consolidated financial statements
337,020,291
214,703,703
623,693,760
467,497,482
2000
TL millions
1999
TL millions
26,507,005
68,286,530
1,999,264
2,828,447
3,600,826
103,222,072
20,318,830
42,755,653
697,755
8,716,700
72,488,938
11,002,432
28,110,189
1,575,732
667,705
3,412,049
44,768,107
6,609,446
16,858,453
3,463,408
5,822,506
32,753,813
Total assets
Finance
Media
Trade
Energy
Other
Total combined
Less: segment elimination
e) Capital expenditures and depreciation
Capital expenditures
Finance
Media
Trade
Energy
Other
Depreciation charge
Finance
Media
Trade
Energy
Other
80
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 3c in the accompanying consolidated financial statements,
are as follows on a combined basis:
2000
1999
TL millions
TL millions
Current assets
Non-current assets
Total assets
179,662,047
435,171,167
614,833,214
4,507,778
7,230,243
11,738,021
Current liabilities
Non-current liabilities
Shareholders' equity
Total liabilities and shareholders' equity
139,961,935
295,032,692
179,838,587
614,833,214
3,542,917
1,123,793
7,071,311
11,738,021
Revenues
Gross profit
Net income
589,196,724
28,265,704
4,876,801
14,116,556
2,660,850
1,653,803
g) Minority interest
2000
Media
Finance
Trade
Energy
Other
Do¤an
family
members
TL millions
Other
TL millions
1,670,213
10,108
1,441,350
14,763,284
17,884,955
71,010,310
116,257,177
21,841,682
64,860,622
45,165,545
319,135,336
1999
Total
TL millions
Do¤an
family
members
TL millions
Other
TL millions
Total
TL millions
72,680,523
116,267,285
23,283,032
64,860,622
59,928,829
337,020,291
(13,257)
453,878
9,935,712
10,376,333
73,572,535
71,127,294
19,092,621
40,534,920
204,327,370
73,559,278
71,127,294
19,546,499
50,470,632
214,703,703
Changes in minority interest during 2000 and 1999 are as follows:
2000
1999
1 January
TL millions
Increase
in share
capital
TL millions
Translation
reserve
TL millions
Increase
in minority
interest due to
additional
subsidiaries
consolidated
during the year
214,703,703
193,644,814
54,039,747
38,097,972
(1,630,558)
-
5,762,799
-
Acquisition of
new
subsidiaries’
shares
TL millions
Payments of
dividends
TL millions
Net income
for the year
TL millions
31 December
TL millions
58,200,986
-
(34,120,778)
(45,900,131)
40,064,392
28,861,048
337,020,291
214,703,703
81
DO⁄AN fi‹RKETLER GRUBU HOLD‹NG A.fi.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER
(Amounts expressed in terms of the purchasing power of the Turkish lira at 31 December 2000, unless otherwise indicated)
NOTE 6 - CASH AND AMOUNTS DUE FROM BANKS
The analysis of cash and amounts due from banks at 31 December 2000 and 1999 are as follows:
2000
Other
TL millions
Total
TL millions
Banking
TL millions
1999
Other
TL millions
Total
TL millions
Cash in hand
6,731,829
Banks- demand deposits
15,019,346
- time deposits
3,079,595
- repurchase agreements
with banks
169,513,284
Placements with banks
315,175,951
Margin calls with foreign banks 106,404,427
Interbank money
market placements
30,529,840
Loans and advances to
other banks
1,682,108
Cheques
527,872
Blocked bank accounts
-
1,221,722
19,418,892
77,795,896
7,953,551
34,438,238
80,875,491
8,133,677
22,578,675
7,575,299
610,996
7,931,081
45,606,056
8,744,673
30,509,756
53,181,355
39,937,418
-
209,450,702
315,175,951
106,404,427
150,341,555
222,180,543
-
20,255,418
-
170,596,973
222,180,543
-
-
30,529,840
46,164,939
-
46,164,939
1,604,214
27,398,852
1,682,108
2,132,086
27,398,852
1,596,223
914,696
-
616,938
818,841
1,596,223
1,531,634
818,841
648,664,252
167,376,994
816,041,246
459,485,607
75,839,330
535,324,937
Banking
TL millions
Time deposits are all short-term maturing within one year. At 31 December 2000, interest rates for local currency time deposit are
between 32% and 140% (1999: 46%-118%) and interest rates for foreign currency time deposits are between 7% and 22%
(1999: 7%-17%).
Repurchase agreements with banks consist of Turkish government bonds and treasury bills held for resale to banks under reverse
repurchase agreements. These are all short-term with periods of less than three months. Interest rates on reverse repurchase
agreements ranged between 50-242% in 2000 (1999: 58-180%). The market values of such securities approximated carrying values,
including accrued income at the respective year ends.
Interest rates for placements with other banks ranged between 81% and 250% for local currency placements (1999: 61%-150%)
and 7% and 26% (1999: -) for foreign currency placements.
All Interbank money market placements are denominated in foreign currency and related interest rates are between 11% and 45%
per annum during 2000 (1999: 6%-9%).
As discussed in Note 32, margin call deposits with foreign banks relate mainly to swap agreements signed with certain
counterparties.
At 31 December 2000, Subsidiaries in insurance sector deposits investments amounting to TL 5,402,539 million (1999: TL 818,841
million) in a blocked account with a state bank in favor of the Undersecreteriat of Treasury as required by Insurance Supervisory Law
No: 7397. At 31 December 2000, the remaining blocked bank accounts amounting to TL 21,996,313 million (1999: -) are blocked to
collateralise borrowings.
82
NOTE 7 - MARKETABLE SECURITIES
The breakdown of marketable securities at 31 December 2000 and 1999 were as follows:
2000
Banking
Other
Total
Banking
TL millions
TL millions
TL millions
TL millions
1999
Other
TL millions
Total
TL millions
Government bonds
US treasury bills
Eurobonds
Bundes obligations
Equity stock - foreign currency
Mutual funds
Treasury bills
Equity stock - TL
Blocked marketable securities
218,442,554
67,424,526
55,347,126
48,628,084
12,060,396
11,585,042
10,637,677
-
141,820
3,757,663
444,570
6,360,522
2,817,410
206,965
218,584,374
67,424,526
55,347,126
48,628,084
15,818,059
12,029,612
16,998,199
2,817,410
206,965
268,988,039
10,145,050
266,127,370
7,395,903
-
3,862,343
63,192,843
214,049
101,985
1,396,425
1,125,288
272,850,382
10,145,050
329,320,213
214,049
7,497,888
1,396,425
1,125,288
424,125,405
13,728,950
437,854,355
552,656,362
69,892,933
622,549,295
The purchase cost of the equity stocks was US$ 22,959,183 (equivalent of TL 15,442,516 million) (1999: US$ 404,686,127 or
equivalent of TL 290,042,612 million) and they were funded by borrowings from various financial institutions. As at 31 December
2000, the Group holds call and put options for equity stocks. These options are double-sided and therefore are treated as forward
commitments to sell the equities at a future date and predetermined price specified in option contracts. The Group locked in a total
fixed gain of US$ 4,206,234 (equivalent of TL 2,828,931 million) (1999: US$ 57,427,098 or equivalent of TL 41,158,578 million) which
represents the difference between the purchase price of the equities and strike price specified in the option contract. Total gain is
amortised to income over the life of the option contract and at year end the amortised gain amounted to US$ 3,507,631 or the
equivalent of TL 2,359,486 million (1999: US$ 90,314,504 or equivalent of TL 64,729,312 million). The amortised gain on outstanding
option contracts is included in interest income on investment securities.
During 2000, D›flbank, subsidiary of the Holding operating in banking sector, sold equities with a nominal value of US$ 114 million by
unwinding the related option contract and recorded a net gain of US$ 32 million (equivalent of TL 22,110,304 million) under interest
income on investment securities. Additionally, the net deferred tax liability of US$ 12.9 million recorded at previous year end on the
total accrued gain of US$ 39.9 million was reversed in the current year.
Included in government bonds were securities pledged under repurchase agreements with other banks whose market value 31
December 2000 was TL 14,452,441 million.
As of 31 December 1999, included in government bonds and treasury bills were securities pledged under repurchase agreements
with customers amounting to TL 20,670,669 million. The interest received for securities pledged under repurchase agreements in
2000 and 1999 amounted to TL 10,087,981 million and TL 71,439,204 million, respectively.
Blocked marketable securities represent treasury bills amounting to TL 206,965 million (1999: TL 1,125,228 million) that Subsidiaries
in insurance sector are required to deposit in a blocked account in favour of the Treasury and Foreign Trade within two months
following the end of the year, based on year end net premiums.
Marketable securities amounting to TL 27,679,952 million (1999: TL 13,668,604 million) were pledged to third parties as collateral
(excluding sale and repurchase agreements). As at 31 December 2000, US treasury bills and Bundes obligations amounting to TL
116,052,610 million pledged to collateralise borrowings. Bundes obligations held as at 31 December 2000 were issued by
Bundesbank in Euro.
The interest rates for treasury bills and government bonds held at 31 December 2000 are between 32-55% (1999: 52-118%).
Interest rates for the marketable securities in foreign currency held at 31 December 2000 are between 9-13% (1999: 11-12%).
The mutual funds were issued by D›fl Invest Fund Ltd. which is incorporated in the British Virgin Islands and are held by D›flbank
Malta Ltd. The gross net asset value of the fund as at 31 December 2000 is US$ 10,076,445. As at 31 December 2000 the Fund’s
portfolio comprised fixed income securities.
83
DO⁄AN fi‹RKETLER GRUBU HOLD‹NG A.fi.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER
(Amounts expressed in terms of the purchasing power of the Turkish lira at 31 December 2000, unless otherwise indicated)
Analysis of marketable securities for their maturities at 31 December 2000 and 1999 were as follows:
Period remaining to maturity:
1 - 30 days
30 - 90 days
90 days - 1 year
Over 1 year
2000
TL millions
1999
TL millions
3,336,930
35,287,456
131,056,379
268,173,590
112,354,180
78,463,171
272,567,929
159,164,015
437,854,355
622,549,295
NOTE 8 - RESERVE DEPOSITS WITH THE CENTRAL BANK OF TURKEY
Reserve deposits
2000
TL millions
1999
TL millions
39,187, 912
35,254,425
According to the regulations of the Central Bank of Turkey, the banks are required to maintain reserve deposits equivalent to a
certain portion of its customers, deposits, other than Interbank deposits, based on the type of deposits (foreign currency or Turkish
lira), at different percentages ranging from 6% to 11% (1999: 8% to 11%). These funds are not avaliable to finance the Banks’ day
to day operations. Effective from 26 December 2000, reserve requirement for Turkish lira deposits has been reduced to a rate of
4%.
NOTE 9 - BANKING LOANS
2000
TL millions
1999
TL millions
67,371,601
231,234,728
52,037,760
26,919,009
4,770,372
23,133,194
192,586,195
37,802,249
1,872,397
25,308,212
382,333,470
280,702,247
18,895,980
14,809,901
Total gross loans and advances
401,229,450
295,512,148
Less: Specific provisions for loan losses
General provisions for loan losses
(13,715,181)
(2,600,206)
(11,111,161)
(3,438,088)
Net loans and advances to customers
384,914,063
280,962,899
Consumer loans
Commercial and industrial loans
Export loans
Investment loans
Other
Non-performing loans
84
Movement in provisions for loan impairment is as follows:
Specific
provision
TL millions
General
provision
TL millions
Total
provision
TL millions
Balance at 1 January 1999
Loan impairment expense during the year
Increase in share of subsidiary
Amounts written off
Recoveries of amounts previously provided
Monetary gain
6,252,065
13,283,518
136,575
(3,125,733)
(698,952)
(4,736,312)
2,927,826
1,789,734
115,274
(1,394,746)
9,179,891
15,073,252
251,849
(3,125,733)
(698,952)
(6,131,058)
Balance at 31 December 1999
11,111,161
3,438,088
14,549,249
Loan impairment expense during the year
Amounts written off
Recoveries of amounts previously provided
Monetary gain
5,520,034
(61,082)
(50,955)
(2,803,977)
578,221
(1,416,103)
6,098,255
(61,082)
(50,955)
(4,220,080)
Balance at 31 December 2000
13,715,181
2,600,206
16,315,387
The aggregate amount of non-performing loans on which interest was not being accrued amounted to TL 18,895,980 million (1999:
TL 14,809,901 million) at 31 December 2000. All loans have been written down to their recoverable amount.
Economic sector risk concentrations for the performing loan portfolio were as follows:
Media
Wholesale and retail trade
Medicine, chemicals and dyes
Textiles
Construction and cement
Metal processing
Food and beverage
Financial institutions
Agriculture
Durable goods
Tourism
Automotive
Other
2000
TL millions
%
1999
TL millions
%
77,704,345
68,217,798
49,066,141
29,863,524
29,348,470
27,287,838
24,844,181
5,344,393
5,026,120
3,463,667
2,571,862
1,521,920
58,073,211
20%
18%
13%
8%
8%
7%
6%
1%
1%
1%
1%
0%
16%
11,541,748
39,074,675
19,805,066
26,856,195
31,006,926
12,920,375
10,261,568
67,602,555
2,445,892
14,456,427
3,957,280
9,560,868
31,212,672
4%
14%
7%
10%
11%
5%
4%
24%
1%
5%
1%
3%
11%
382,333,470
100%
280,702,247
100%
Interest rates vary between 9 - 23% (1999: 7% - 22%) per annum for foreign currency loans and 70%-85% (1999: 52%-120%) per
annum for Turkish lira loans.
Commercial and industrial loans at 31 December include loans granted to Lapis Holding A.fi., the principal shareholder in prior years,
and its related companies (altogether referred as "Lapis Group") as follows:
Lapis Group loans
2000
Foreign currency indexed loans
TL loans converted from foreign
currency indexed loans
1999
US$’000
TL millions
US$’000
TL millions
12,845
8,642,509
16,479
11,886,336
-
7,478,859
-
9,924,446
16,121,368
21,810,782
These loans were rescheduled during 1994 as long-term loans with maturities of up to 12-14 years, with no repayments during the
first two years. No interest is charged for foreign currency indexed loans and the annual interest charged for TL loans converted from
85
DO⁄AN fi‹RKETLER GRUBU HOLD‹NG A.fi.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER
(Amounts expressed in terms of the purchasing power of the Turkish lira at 31 December 2000, unless otherwise indicated)
foreign currency indexed loans is 25% (1999: 30%) at 31 December 2000. Türkiye ‹fl Bankas› A.fi. has taken full responsibility for
potential losses related to the Lapis Group loans by providing a collateral loan with the same amount and maturity. At 31 December
2000, there were also TL 4,422,876 million of rescheduled loans other than those granted to Lapis Group.
NOTE 10 - TRADE RECEIVABLES
Trade receivables
Notes receivables
Factoring receivables
Provision for doubtful receivables
Provision for factoring receivables
Other
2000
TL millions
1999
TL millions
170,265,978
72,952,764
22,707,893
(8,281,808)
(1,510,083)
444,517
107,331,261
19,073,978
13,759,562
(5,329,630)
(560,466)
660,806
256,579,261
134,935,511
NOTE 11 - TRANSACTIONS AND BALANCES WITH RELATED COMPANIES AND SHAREHOLDERS
Amounts due from and due to related parties at 31 December and a summary of the major transactions with related companies are
as follows:
Due from related companies
2000
TL millions
1999
TL millions
DTV Haber ve Görsel Yay›nc›l›k A.fi. ("DTV Haber")
Do¤an D›fl Ticaret Mümessillik A.fi. ("Do¤an D›fl Ticaret")
Eko Televizyonculuk Yay›nc›l›k A.fi. ("Eko Televizyon")
Ortado¤u Otomotiv Ticaret A.fi.
D Market Elektronik Hizmetleri A.fi.
Do¤an Daily News A.fi.
Do¤an Müflteri Hizmetleri A.fi.
Biryay Birleflik Yay›n Da¤›t›m A.fi. ("Bir Yay")
D Finans ‹nternet Bilgi Hizmetleri A.fi.
Do¤an Kitap Müzik Da¤›t›m A.fi.
Do¤an Telekomünikasyon A.fi.
Milliyet Verglas und Handles GmbH
Simge
Hür Medya ‹lanc›l›k ve Reklamc›l›k Ticaret A.fi.
Other
20,405,839
6,426,574
3,499,534
3,254,204
1,028,480
845,436
629,446
538,603
470,357
428,769
355,401
212,937
1,151,102
10,266,334
4,081,739
2,763,427
19,058
157,512
130,237
232,005
2,816,016
250,486
2,033,664
39,246,682
22,750,478
2000
TL millions
1999
TL millions
4,424,572
5,459,968
2,836,247
2,770,988
1,758,315
1,105,578
473,683
1,905,038
16,075,847
5,894,204
1,616,157
225,521
3,143,536
3,462,229
242,672
2,215,316
20,734,389
32,875,482
Due to related companies
Do¤an D›fl Ticaret
Family members
Bir Yay
Eko Televizyon
Ortado¤u Yay›nc›l›k Ticaret A.fi.
DTV Haber
Doku Yap› ‹nflaat Sanayi ve Ticaret A.fi.
Simge
Hür Servis Sosyal Hizmetler ve Ticaret A.fi.
DTV Haber
86
Major materials, property, plant and equipment and service purchases from related parties for the years ended 31 December were
as follows:
Service sales:
DTV Haber
Eko Televizyon
Ortado¤u Otomotiv Ticaret A.fi.
Do¤an D›fl Ticaret
Bir Yay
Hür Medya ‹lanc›l›k ve Reklamc›l›k Ticaret A.fi.
DTV Radyo TV Yay›nc›l›¤› ve Haber Ajans› A.fi.
Simge
Do¤an Kitap Müzik Da¤›t›m Pazarlama A.fi.
Other
Product sales:
Bir Yay
Do¤an D›fl Ticaret
Hür Servis ve Sosyal Hizmetler ve Ticaret A.fi.
Eko Televizyon
Simge
Other
Property, plant and equipment sales:
Do¤an D›fl Ticaret
Do¤an Müflteri Hizmetleri A.fi.
DTV Haber
Service purchases:
Do¤an D›fl Ticaret
Hür Servis Sosyal Hizmetler ve Ticaret A.fi.
Hürmedya ‹lanc›l›k ve Reklamc›l›k Tic. A.fi.
Hürbim Bilgisayar ve Teknik Hizmetleri A.fi.
DTV Haber
Simge
ANS
Hür ‹thalat ve ‹hracat Pazarlama A.fi.
Yarat›m Sa¤l›k ve Spor A.fi.
Anadolu Hür Servis ‹dari ve Genel Hizmetleri A.fi.
Other
2000
TL millions
1999
TL millions
9,634,605
3,123,630
2,756,532
1,641,747
5,114
714,956
12,667,797
4,682,211
2,738,931
581,840
1,012,366
958,140
1,336,053
940,190
3,387,891
17,876,584
28,305,419
2000
TL millions
1999
TL millions
871,316
761,137
445,151
343,316
1,791,898
901,231
774,539
2,009,745
539,747
4,212,818
4,225,262
2000
TL millions
1999
TL millions
1,534,526
143,107
33,714
135,336
1,711,347
135,336
2000
TL millions
1999
TL millions
4,851,241
3,388,187
3,177,287
2,066,312
1,591,250
914,590
5,317,674
4,147,818
3,193,855
1,513,246
7,456,223
1,095,659
997,863
982,216
744,911
6,713,001
15,988,867
32,162,466
87
DO⁄AN fi‹RKETLER GRUBU HOLD‹NG A.fi.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER
(Amounts expressed in terms of the purchasing power of the Turkish lira at 31 December 2000, unless otherwise indicated)
Product purchases:
2000
TL millions
1999
TL millions
Do¤an D›fl Ticaret
Bir Yay
DTV Haber
Eko Televizyon
Marmara ‹dari ve Genel Hizmetler
‹hlas Matbaac›l›k Gazetecilik Yay›nc›l›k Sanayi A.fi.
Simge
Bas›n ‹flletmecilik Ka¤›t Matbaa Sanayi A.fi.
Other
91,413,752
28,591,898
4,621,242
3,402,234
144,072
1,504,035
129,137,049
37,047,256
8,849,746
3,897,261
1,039,950
28,532,699
18,487,050
1,548,130
842,039
129,677,233
229,381,180
2000
TL millions
1999
TL millions
39,350
8,378,610
65,651
39,350
8,444,261
2000
TL millions
1999
TL millions
42,460,744
16,131,866
9,043,138
2,440,976
1,897,944
9,582,159
7,108,230
14,671,032
4,661,257
1,256,395
4,161,523
1,834,108
81,556,827
33,692,545
(1,492,586)
(904,119)
80,064,241
32,788,426
2000
TL millions
1999
TL millions
49,956,208
27,741,807
27,668,994
5,822,589
4,881,559
4,359,363
17,706,287
27,723,977
15,355,864
15,160,696
4,931,973
5,264,204
4,203,474
12,478,808
138,136,807
85,118,996
Property, plant and equipment purchases:
Simge
Other
NOTE 12 - INVENTORIES
The composition of inventories at 31 December was as follows:
Finished goods and merchandise
Promotion stocks
Raw materials and supplies
Semi-finished goods
Spares, supplies and advances
Other inventories
Provision for obsolete stocks
NOTE 13 - OTHER CURRENT ASSETS
Interest income accruals
Minimum lease payments receivable
Prepaid taxes and funds
Value Added Tax (VAT) receivable
Prepaid expenses
Advances given
Other
88
Lease payments receivable consist of rentals over the terms of leases. The rentals according to maturity are as follows:
2000
2001
2002
2003
2004
2005
2006
2007
2000
TL millions
1999
TL millions
17,613,471
7,224,137
1,902,406
754,569
93,403
99,997
53,824
10,355,665
3,701,065
562,343
9,024
727,767
-
27,741,807
15,355,864
Under the lease agreements made with lessees, there is no residual value guaranteed to the lessor and the ownership of the items
leased will be transferred to the lessees at the end of the lease terms.
NOTE 14 - INVESTMENTS AND ASSOCIATES
Simge, which was an Associate of the Group at 31 December 1999 has been considered as Subsidiary at 31 December 2000 due to
a change in shareholding structure. At 31 December 1999, the Group had a 43% interest in Simge amounting to TL 2,694,415
million.
Investments at cost and respective effective interest of the Group at 31 December were as follows:
2000
1999
TL millions
%
TL millions
%
5,739,559
8.00
5,119,753
10.00
1,615,136
1,520,308
643,398
536,570
399,389
462,723
100.00
50.00
0.67
1.94
91.01
99.17
893,550
643,594
355,724
751,448
0.00
50.00
0.70
1.90
99.00
319,760
195,150
152,377
125,556
100,901
95,310
93,700
82,134
80,572
2,052,528
51.00
1.85
1.00
95.65
65.00
95.00
78.50
65.00
0.50
-
195,208
152,421
125,594
80,597
8,687,683
1,480,255
299,582
3,290,090
1.90
1.00
95.65
0.50
100.00
96.00
80.04
-
Less: Diminution in value of investments
(3,768,199)
-
-
-
Total
10,446,872
S›nai Yat›r›m Bankas› A.fi.
Hürriyet Gazetecilik ve Matbac›l›k A.fi.
Zweigniederlassung Deutchland
Digital Hizmet ve Pazarlama A.fi.
Cam Elyaf Sanayi A.fi.
‹MKB Takas Bank A.fi.
K›br›s Türk Petrolleri Limited fiirketi
Milliyet Verlags und Handels GmbH
Do¤an Daily News Gazetecilik ve
Matbaac›l›k A.fi.
Bankalararas› Kredi Kartlar› Merkezi
Anadolu Hayat Sigorta A.fi.
Enteralle GmbH
Zigana Elektrik
Do¤an Bilgi
Do¤an Müzik Yap›m
Kelkit Tekstil Sanayi ve Ticaret A.fi.
Coats ‹plik Sanayi A.fi.
D›flbank Nederland
Do¤an Prodüksiyon
DMG
Other
22,075,499
D›flbank Nederland Do¤an Prodüksiyon and DMG which have not been consolidated at 31 December 1999 on the ground of
materiality, have been consolidated at 31 December 2000.
89
DO⁄AN fi‹RKETLER GRUBU HOLD‹NG A.fi.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER
(Amounts expressed in terms of the purchasing power of the Turkish lira at 31 December 2000, unless otherwise indicated)
The investments in which the Group together with Do¤an family members, which are either immaterial, or where a significant
influence is not exercised by Do¤an Holding, are carried at cost and restated to equivalent purchasing power at 31 December 2000.
These companies have not been equity accounted for due to the insignificance of their combined impact on the net worth, financial
position and results of Do¤an Holding.
NOTE 15 - PROPERTY, PLANT AND EQUIPMENT
At 31 December 2000, property, plant and equipment and related accumulated depreciation were as follows:
1 January
2000
TL millions
Acquisitions*
TL millions
Additions
TL millions
Disposals
TL millions
31 December
2000
TL millions
27,544,530
117,759,947
355,014,364
6,465,618
89,032,629
25,429,878
16,951,966
7,176,853
645,375,785
66,762,030
17,692,737
134,968,764
4,701,391
6,005,993
474,926
840,739
40,794,034
272,240,614
1,089,058
13,598,245
49,317,375
3,169,929
9,196,533
10,140,469
4,279,021
24,057,589
284,837
115,133,056
(975,270)
(1,236,561)
(12,647,555)
(778,058)
(1,343,771)
(1,878)
(58,648)
(19,975,177)
(37,016,918)
94,420,348
147,814,368
526,652,948
13,558,880
102,891,384
36,043,395
21,172,339
12,100,004
41,078,871
995,732,537
Land and land improvements
Buildings
Machinery and equipment
Motor vehicles
Furniture and fixtures
Leasehold improvement
Leased assets
Other fixed assets
727,349
17,396,543
279,910,833
3,082,592
67,079,646
9,569,378
9,123,669
386,890,010
10,487,635
8,430,396
134,331,926
3,787,254
5,603,613
287,123
38,704,535
201,632,482
211,190
3,323,356
22,265,870
1,697,812
8,656,518
5,226,739
3,295,668
90,954
44,768,107
(470,972)
(5,593,415)
(454,031)
(592,591)
(8,459)
(7,119,468)
11,426,174
28,679,323
430,915,214
8,113,627
80,747,186
15,074,781
12,419,337
38,795,489
626,171,131
Net book value
258,485,775
Cost:
Land and land improvements
Buildings
Machinery and equipment
Motor vehicles
Furniture and fixtures
Leasehold improvement
Leased assets
Construction-in-progress
Other fixed assets
Accumulated depreciation:
369,561,406
(*) The opening balances for property, plant and equipment of Subsidiaries and Joint Ventures acquired during the year were treated
as acquisitions for the year.
At 31 December 2000 there are mortgages amounting to TL 26,616,953 million (1999: TL 45,940,976 million) on property, plant and
equipment. The additions to and disposals from the restated cost of property, plant and equipment also comprise transfers from
construction-in-progress amounting to TL 11,910,984 million. (1999: TL 18,105,920 million).
Since 1984, using an option granted under Turkish tax legislation, the Group have revalued in their statutory books of account, their
property, plant and equipment in use for more than one year (excluding land, which is not revaluable), and the related accumulated
depreciation at each year-end, by using the rates and procedures prescribed by the legislation.
The resulting increases in the net book values of the assets are included under shareholders' equity as revaluation surplus in the
statutory records. The Group may use the revaluation surplus for issuance of free capital shares to existing shareholders.
All entries related to such revaluation which were recorded in the statutory books of account of the Group have been eliminated in
the accompanying consolidated financial statements as part of the restatement process referred to in Note 2.
90
NOTE 16 - INTANGIBLE ASSETS
Movement for intangible assets during the year is as follows:
1 January 2000
TL millions
Additions
TL millions
Disposals
TL millions
31 December 2000
TL millions
Restated cost
Accumulated amortisation
25,411,611
(3,886,120)
7,678,243
(3,659,254)
(516,286)
278,842
32,573,568
(7,266,532)
Net book value
21,525,491
4,018,989
(237,444)
25,307,036
78,854,602
(48,995,313)
360,754,552
(17,682,385)
(4,428,657)
1,771,462
435,180,497
(64,906,236)
Net book value
29,859,289
343,072,167
(2,657,195)
370,274,261
Total net book value
51,384,780
347,091,156
(2,894,639)
395,581,297
Effective
interest rate per
annum %
TL millions
Effective
interest rate per
annum %
TL millions
18%-170%
134,710,612
35%-100%
11,351,978
6%-27%
449,970,477
8%-20%
528,907,046
25%
2,696,880
35%
32,112
4%-Libor+12%
26,277,747
Libor+4-5%
46,196,315
Goodwill (Note 33)
Accumulated amortisation
NOTE 17 - BANK BORROWINGS
Bank borrowings at 31 December were as follows:
2000
1999
Short-term bank borrowings:
TL loans
Foreign currency
bank borrowings
Short-term portion of long-term
bank borrowings
Short-term portion of long-term
bank borrowings
Total short-term bank borrowings
613,655,716
586,487,451
2000
Effective
interest rate per
annum %
1999
TL millions
Effective
interest rate per
annum %
TL millions
25%
13,472,426
58%-100%
21,865,388
4%-Libor+12%
421,962,724
4%-17%
39,780,916
Long-term bank borrowings:
TL loans
Foreign currency
bank borrowings
Total long-term bank borrowings
435,435,150
61,646,304
91
DO⁄AN fi‹RKETLER GRUBU HOLD‹NG A.fi.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER
(Amounts expressed in terms of the purchasing power of the Turkish lira at 31 December 2000, unless otherwise indicated)
The redemption schedule of long-term borrowings at 31 December is summarised below:
Year
2001
2002
2003
2004 and after
2000
TL millions
1999
TL millions
401,875,906
9,077,003
24,482,241
24,137,102
16,107,462
21,401,740
-
435,435,150
61,646,304
NOTE 18 - BANKING AND CUSTOMER DEPOSITS
The breakdown of banking deposits according to type and maturity at 31 December is as follows:
2000
Foreign currency:
Domestic banks
Foreign banks
Securities sold under
repurchase agreements
Turkish lira:
Domestic banks
Current/
Demand
TL million
Term
TL million
819,728
13,803,418
1999
Total
TL million
Current/
Demand
TL million
Term
TL million
Total
TL million
43,400,119
7,902,123
44,219,847
21,705,541
28,537,042
131,231,245
8,911,450
131,231,245
37,448,492
-
30,027,710
30,027,710
-
-
-
14,623,146
81,329,952
95,953,098
28,537,042
140,142,695
168,679,737
3,527 136,017,300
136,020,827
-
39,817,931
39,817,931
14,626,673 217,347,252
231,973,925
28,537,042
179,960,626
208,497,668
Interest rates on foreign currency deposits from other banks were between 6.75% and 45% for 2000 (1999: 6%-18%). Interest
rates on Turkish lira bank deposits ranged between 27% and 125% in 2000 (1999: 44%-114%).
The breakdown of customer deposits according to type at 31 December is as follows:
2000
Current/
Demand
TL millions
Term
TL millions
Total
TL millions
Foreign currency deposits:
Saving deposits
Commercial deposits
35,489,087 274,265,875
4,014,104 104,420,232
309,754,962
108,434,336
20,144,091
41,442,952
207,100,844
127,302,577
227,244,935
168,745,529
Total foreign currency deposits
39,503,191 378,686,107
418,189,298
61,587,043
334,403,421
395,990,464
3,726,879
13,348,463
10,759,314
26,506,816
6,626,382
18,710,022
1,610,843
1,696,860
8,237,225
20,406,882
- 165,672,006
165,672,006
-
46,432,131
46,432,131
Total Turkish lira deposits
20,190,788 182,747,348
202,938,136
25,336,404
49,739,834
75,076,238
Total deposits
59,693,979 561,433,455
621,127,434
86,923,447
384,143,255
471,066,702
Turkish lira deposits:
Saving deposits
Commercial deposits
Securities sold under repurchase
agreements
92
1999
Current/
Demand
TL millions
7,032,435
13,158,353
Term
TL millions
To
TL millions
Interest rates for US$ deposits vary between 6.5%-16% (1999: 6.5%-12%) and interest rates for DM deposits vary between 4.5%14% (1999: 5%-9%). Interest rates for Turkish lira deposits vary between 25%-130% (1999: 62%-83%)
For 2000, the total interest expense on repurchase agreements amounted to TL 51,162,276 million and included accrued interest
expense of TL 2,922,390 million (1999: total interest expense of TL 70,855,917 million and accrued interest expense of TL 279,653
million).
NOTE 19 - TRADE PAYABLES
2000
TL millions
1999
TL millions
135,772,209
4,515,673
4,260,964
40,118,145
13,883,625
3,557,791
144,548,846
57,559,561
2000
TL millions
1999
TL millions
Unearned premiums reserve - net of reinsurance
Deferred commission income
Claim provisions - net of reinsurance
12,352,368
3,199,875
2,899,989
10,502,076
3,497,164
2,946,548
Insurance technical reserves - current
18,452,232
16,945,788
Life assurance provision
Equalisation provision
2,657,622
-
1,161,928
479,328
Insurance technical reserves - non-current
2,657,622
1,641,256
2000
TL millions
1999
TL millions
66,509,775
18,802,355
11,170,077
10,914,552
10,221,306
2,740,180
1,223,966
24,952
13,643,002
48,619,537
12,990,370
4,435,244
1,823,802
6,239,211
3,529,680
8,186,367
994,500
12,011,441
135,250,165
98,830,152
Original
Currency
2000
TL millions
1999
TL millions
69,000,000
31,000,000
42,749,269
19,206,193
-
61,955,462
-
Trade accounts payable
Notes payable
Other
NOTE 20 - INSURANCE TECHNICAL RESERVES
NOTE 21 - OTHER CURRENT LIABILITIES
Interest expense accrual
Taxes and withholding payables
Import transfers and payment orders
Advances received
Miscellaneous payables
Payable for the purchase of D›flbank shares
Provision for promotion campaigns
Deposits and guarantees given
Other
NOTE 22 - DEBT SECURITIES IN ISSUE
Series 2000 - A Floating Rate Notes
Series 2000 - B 9% Notes
Euro
Euro
These notes were issued in connection with the securitisation of export receivables of D›flbank, Subsidiary of the Holding operating
in banking sector, and are listed in the Luxembourg Stock Exchange. The notes will mature in 2005.
93
DO⁄AN fi‹RKETLER GRUBU HOLD‹NG A.fi.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER
(Amounts expressed in terms of the purchasing power of the Turkish lira at 31 December 2000, unless otherwise indicated)
NOTE 23 - OTHER NON-CURRENT LIABILITIES
2000
TL millions
1999
TL millions
2,005,584
340,051
262,187
203,649
1,040,945
3,515,005
363,283
2,607,822
5,122,882
2000
TL millions
1999
TL millions
Corporation and income taxes
Deferred tax liability - net
36,165,250
12,190,478
4,957,474
69,621,681
Total taxes payable
48,355,728
74,579,155
Long-term lease obligations
Accrued expenses
Payable for the purchase of D›flbank shares
Other
NOTE 24 - TAXATION
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 accompanying 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 Do¤an Holding A.fi. and its Subsidiaries after adjusting for
certain disallowable expenses, exempt income and investment and other allowances. No further tax is payable unless the profit is
distributed.
Income exempt from corporation tax (except dividend income received from Turkish Companies) is subject to withholding tax at the
rate of 16.5% regardless of whether the profits are distributed.
Dividends paid by the Holding and its Subsidiaries are subject to a withholding tax calculated on the gross dividend to be paid at the
rate of 16.5%. An increase in capital using distributable profit or by issuing bonus shares is not considered as a profit distribution and
thus there is no withholding tax.
Corporations are required to pay advance corporation tax quarterly at the rate of 25% on their corporate income. Advance tax is
payable by the 15th 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 used to set off against other liabilities to
the government.
Interest income on Turkish government bonds and treasury bills is subject to corporation tax.
Capital gains derived from the sale of equity investments and immovable assets held for not less than two years are tax exempt if
such gains are added to paid-in capital in the year in which they are sold.
Capital expenditures and projected capital expenditures for the following year are eligible for investment allowance incentives.
Such allowance is available to companies for specific capital investments and is deductible from taxable income prior to the
calculation of the corporate income tax. Investment allowance incentives utilised are subject to a withholding tax at the rate of
19.8% (1999: 16.5%).
Under the Turkish taxation system, losses can be carried forward to offset against future taxable income for up to 5 years. 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 four
months following the close of the accounting 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 examine tax returns, and the related
accounting records on which they are based, and may issue re-assessments based on their findings.
94
For Treasury bills or Government bonds issued at discount, the following schedule applies:
Days remaining until redemption (From 1 December 1999)
1 - 91
92 - 182
More than 183 days
Tax rate
4%
9%
14%
Additionally, two-year fixed interest rate bonds with quarterly coupon payments will be taxed at 19% and three-year variable interest
rate bonds with quarterly coupon payments will be taxed at 4%. At this time, no tax has been implemented on treasury securities
issued on or after 1 December 1999 and securities issued in foreign currency, such as Eurobonds, are not subject to this tax.
The taxation on income for the years ended 31 December is summarised as follows:
Provision for taxes per these accompanying consolidated statement of income
- Current
- Deferred
2000
TL millions
1999
TL millions
(53,479,372)
56,609,164
(12,446,054)
(47,044,221)
3,129,792
(59,490,275)
Taxation on income
The total provision for taxes reflected in the accompanying consolidated financial statements is different from the amounts
computed by applying the above mentioned effective/combined tax rates. The principal reasons for such differences are:
i)
ii)
Permanent differences arising from:
a)
Dividends from equity participations that are either exempt from tax or taxable at reduced rates, and
b)
non-tax deductible expenses
The deferred tax effects of the restatement made pursuant to IAS 29 and the investment allowance tax credits carried forward
iii) The separate-entity tax basis for Do¤an Holding, the Subsidiaries and Joint Ventures.
Deferred taxes
The Group recognises deferred tax assets and liabilities based upon temporary differences arising between their financial statements
as reported for IAS purposes and their statutory tax financial statements. These differences usually result in the recognition of
revenue and expenses in different reporting periods for IAS and tax purposes.
The breakdown of cumulative temporary differences and the resulting deferred tax assets/liabilities provided at 31 December using
the expected future tax rates are as follows:
Cumulative temporary
Deferred tax
differences
liabilities
2000
1999
2000
1999
TL millions
TL millions
TL millions
TL millions
Deferred tax liabilities:
Net difference between the taxbase and the
carrying value of property, plant and
equipment, intangible assets and inventories
Accrued income on forward foreign exchange
contracts
Accrued income on marketable securities
Deferred acquisition cost
Timing difference due to revenue recognition
Deferred commission expense
Other temporary differences
Total deferred tax liabilities
120,907,094
111,113,342
39,417,200
30,447,338
16,590,611
7,413,242
5,295,866
3,689,450
128,290
4,655,080
186,240,514
4,723,217
133,000
1,461,469
5,468,104
2,337,906
1,747,636
1,217,519
42,336
1,458,713
62,121,048
1,433,277
158,679,633
303,671,542
51,689,414
94,504,671
43,890
459,118
95
DO⁄AN fi‹RKETLER GRUBU HOLD‹NG A.fi.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER
(Amounts expressed in terms of the purchasing power of the Turkish lira at 31 December 2000, unless otherwise indicated)
Cumulative temporary
differences
2000
1999
TL millions
TL millions
Deferred tax
assets
2000
1999
TL millions
TL millions
54,667,097
19,826,229
27,792,351
3,719,483
18,040,142
6,521,719
9,171,477
1,020,534
11,093,582
6,956,204
3,660,882
2,249,382
10,599,988
8,878,271
4,950,958
10,031,019
10,280,063
4,139,190
3,347,333
2,929,830
1,633,816
3,280,534
3,392,419
1,365,933
2,759,885
1,977,114
13,010,038
196,503
2,640
1,376,364
796,200
1,070,325
9,900,135
598,352
652,448
2,114,414
64,847
669
454,201
262,746
353,207
3,267,041
127,763,162
76,260,477
39,498,936
24,882,990
12,190,478
69,621,681
Deferred tax assets:
Carry forward of unused tax losses
Reserve for employment termination benefits
Accrued expense on forward foreign
exchange contracts
Provision for loan losses and factoring
receivables
Insurance technical reserves
Interest expense accrual on borrowings
Net of expenses and depreciation expenses on
leased assets
Expense accrual for promotional goods
Valuation difference on investment securities
Bonus accruals
Transaction tax accrual on equity options
Other temporary differences
Total deferred tax assets
Deferred tax liabilities - net
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, its Turkish Subsidiaries, its Joint Ventures and Associates are required to pay
termination benefits to each employee who has completed one year of service and whose employment is terminated without due
cause, is called up for military service, dies or who retires after completing 25 years of service (20 years for women) and achieves
the retirement age (58 for women and 60 for men). Since the legislation was changed on 8 September 1999 there are certain
transitional provisions relating to length of service prior to retirement.
The amount payable consists of one month’s salary limited to a maximum of TL 646,560,000 (1999: TL 345,200,000) for each year of
service at 31 December 2000.
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.
Additionally, the Group should pay 40 days’ salary if the employee resigns after 1 year’s work and 50 days if the Group terminates
the employment. The monthly salary figure is calculated by adding all cash and non-cash payments received during the year and
dividing by twelve.
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 Group arising from the
retirement of the employees.
International Accounting Standards require actuarial valuation methods to be developed to estimate the enterprise’s obligation under
defined benefit plans. Accordingly the following actuarial assumptions were used in the calculation of the total liability:
Discount rate
Turnover rate to estimate the probability of retirement
96
2000
1999
7%
91%
7%
86%
The principal assumption is that the maximum liability of TL 646,560,000 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 TL 646,560,000 (1999: TL 345,200,000) has been taken into
consideration in calculating the reserve for employment termination benefit of the Holding, its Turkish Subsidiaries, its Joint Ventures
and Associates.
The reserve for employment termination benefits at 31 December 1998 has not been restated to take account of the implementation
of revised IAS 19 since the effect of such restatement would be immaterial to the consolidated financial position and result of
operations at 31 December 1999.
Movements in the reserve for employment termination benefits during the years ended 31 December are as follows:
2000
TL millions
1999
TL millions
1 January
Acquisitions
Charge for the year
Disposals
Effect of adoption IAS 19 (revised)
4,261,217
19,880,413
1,168,716
(6,926,052)
-
8,708,091
(1,211,451)
(3,235,423)
31 December
18,384,294
4,261,217
‹fl Do¤an, a Joint Venture established by the Holding and T. ‹fl Bankas› A.fi., acquired 51% of the shares of POAfi at the tender held
on 3 March 2000. After privatisation as at 21 July 2000, termination of the employments of POAfi’s personnel has been started and
this will continue in 2001. Therefore, a provision is built up for POAfi’s estimated maximum liability for such payments.
NOTE 26 - SHARE CAPITAL
Do¤an Holding adopted the registered share capital system available to companies registered with the Capital Market Board ("CMB")
and set a limit on its registered share capital representing registered type shares with a nominal value of TL 10,000. Do¤an Holding’s
historical authorised and paid-in share capital at 31 December was as follows:
2000
1999
TL millions
TL millions
Limit on registered share capital (historical)
Historical authorised and paid-in share capital
100,000,000
93,103,920
100,000,000
66,502,800
The shareholder structure is summarised as follows:
Share
%
2000
TL millions
Share
%
1999
TL millions
Adil Bey Holding
Ayd›n Do¤an
Ifl›l Do¤an
Arzuhan Yalç›nda¤
Vuslat Do¤an Sabanc›
Hanzade V. Do¤an
Y. Begümhan Do¤an
40.00
23.71
1.65
0.04
0.04
0.04
0.04
37,241,568
22,075,457
1,531,154
38,102
38,102
38,102
38,102
40.00
23.71
1.65
0.04
0.04
0.04
0.04
26,601,120
15,767,815
1,097,296
26,601
26,601
26,601
26,601
Total Do¤an family and companies
owned by Do¤an family
65.52
61,000,587
65.52
43,572,635
Istanbul Stock Exchange
Ayd›n Do¤an Vakf›
34.29
0.19
31,925,522
177,811
34.29
0.19
22,803,810
126,355
100.00
93,103,920
100.00
66,502,800
97
DO⁄AN fi‹RKETLER GRUBU HOLD‹NG A.fi.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER
(Amounts expressed in terms of the purchasing power of the Turkish lira at 31 December 2000, unless otherwise indicated)
The analysis of shares in accordance with nature is as follows:
Shareholders
Unit of shares
TL millions
Nature of shares
Do¤an family and companies
owned by Do¤an family members
13,460,000
134,600
Registered
Do¤an family and companies
owned by Do¤an family members
6,104,379,800
61,043,798
Bearer
Other shareholders
Other shareholders
12,540,000
3,180,012,200
125,400
31,800,122
Registered
Bearer
9,310,392,000
93,103,920
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.
The 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 Do¤an 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, the 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.
Quoted companies are subject to dividend requirements regulated by the CMB as follows:
According to CMB regulations quoted companies have the following two options; they may either distribute dividends in cash or as
bonus shares or they may elect not to distribute any dividends at all. However, the CMB may require the company to distribute
dividends in cash. If the company makes a decision to distribute any dividends, distribution should be made in the five months
following the year-end. The second legal reserve is appropriated by the company at the rate of 10% of distributable profit. Under the
TCC, the legal reserves are not available for distribution unless they exceed 50% of the paid-in share capital, but may be used to
offset losses in the event that the general reserve is exhausted.
Composition of prior periods' earnings (per Statutory Financial Statements of Do¤an Holding, its Subsidiaries and Joint Ventures) at
31 December 2000 and 1999 (not adjusted for inflation):
2000
1999
TL millions
TL millions
- Legal reserves
- Undistributed general reserve
Historical amounts of dividends distributed during year from previous periods'
net income per Statutory Financial Statements of parent company only
98
27,442,229
93,123,501
2,463,204
45,457,808
120,565,730
47,921,012
13,300,560
6,234,638
NOTE 28 - CASH GENERATED FROM OPERATIONS
Adjustments for:
Depreciation and amortisation
Reserve for employment termination benefits
Net interest income
Translation reserve
Profit/(loss) from property, plant and equipment sales
Taxation expense
Change in finance-segment working capital
(excluding the effects of acquisitions and disposals):
Marketable securities
Reserve deposit with the Central Bank of Turkey
Banking loans - current
Trade receivables
Due from related parties
Banking deposits
Trade payables
Due to related parties
Insurance technical reserves - current
Other current assets/liabilities - net
Change in non-finance-segment working capital
(excluding the effects of acquisitions and disposals):
Marketable securities
Trade receivables
Due from related parties
Inventories
Trade payables
Due to related parties
Other current assets/liabilities - net
Cash generated from operations
2000
TL millions
1999
TL millions
66,109,746
3,982,952
(252,249,631)
(2,849,926)
(2,833,024)
(440,522)
47,029,814
(4,446,874)
(403,085,881)
480,803
(9,812,514)
(188,280,405)
(369,834,652)
(16,397,042)
(3,933,487)
(103,951,163)
(17,019,394)
5,299,300
173,536,988
414,620
6,432,284
1,506,445
4,517,770
28,669,350
202,829
(61,592,923)
(9,442,644)
(7,742,647)
137,342,553
1,717,997
33,978
6,483,108
4,117,348
50,406,321
99,788,949
2000
TL millions
1999
TL millions
48,899,016
(60,735,900)
(21,795,504)
(29,609,858)
81,615,872
(18,573,377)
(3,241,490)
(39,403,184)
(31,194,740)
5,769,955
(5,351,541)
(6,725,130)
17,616,520
(11,082,856)
(3,441,241)
(70,370,976)
(141,315,325)
(340,416,679)
99
DO⁄AN fi‹RKETLER GRUBU HOLD‹NG A.fi.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER
(Amounts expressed in terms of the purchasing power of the Turkish lira at 31 December 2000, unless otherwise indicated)
NOTE 29 - FINANCIAL (EXPENSE)/INCOME - NET
Financial income and expenses for the years ended 31 December were as follows:
Financial income:
Interest income on bank deposits
Foreign exchange gain
Interest income on marketable securities
Interest on short-term investments
Interest on matured receivables
Other interest and commission
Financial expenses:
Foreign exchange loss
Interest expense on borrowings
Financing expense
Other
Financial (expense)/income - net
2000
TL millions
1999
TL millions
36,912,655
25,934,996
8,246,361
4,548,858
5,866,549
63,483,158
46,432,197
11,998,795
4,525,129
217,236
81,509,419
126,656,515
(68,906,484)
(68,953,210)
(795,728)
(8,118,265)
(67,819,466)
(47,840,272)
(8,705,588)
(146,773,687)
(124,365,326)
(65,264,268)
2,291,189
NOTE 30 - EXTRAORDINARY ITEM
Turkish Parliament approved a new tax code that brings additional corporate and income taxes following the recent earthquake in
Turkey. According to Law No:4481 and decree No:1 "Additional Income and Corporate Taxes’’ published in the Official Gazette dated
26 November, a 5% additional corporate tax and income tax of TL 3,462,141 million on 1998 tax base, has been provided for and
accounted for as an extraordinary item at 31 December 1999.
100
NOTE 31 - FOREIGN CURRENCY POSITION
Assets and liabilities denominated in foreign and local currency held by the Group at 31 December are as follows:
US$
Euro
2000
Other
TL
Total
Cash, amounts due from banks and reserve
deposits with the Central Bank of Turkey
Marketable securities
Banking loans current
Trade receivables
Due from related parties
Inventories
Other current assets
308,169,104
149,358,691
147,303,399
24,841,767
17,604,562
90,624,276
49,444,146
39,301,569
3,288,592
6,187,986
4,746,869
18,298,485
3,167,187
171,445
1,671,367
451,688,909
239,051,518
180,010,610
225,281,715
39,246,682
79,892,796
112,672,892
855,229,158
437,854,355
384,914,063
256,579,261
39,246,682
80,064,241
138,136,807
Total current assets
647,277,523
188,846,569
28,055,353
1,327,845,122
2,192,024,567
Investments and associates
Property, plant and equipment
Intangible assets - net
Other non-current assets
314,584
17,466
380,069
-
45,959
-
10,446,872
368,820,794
395,581,297
11,200,937
10,446,872
369,561,406
395,581,297
11,218,403
Total non-current assets
332,050
380,069
45,959
786,049,900
786,807,978
647,609,573
189,226,638
28,101,312
2,113,895,022
2,978,832,545
Short-term bank borrowings
Banking and customer deposits
Trade payables
Due to related parties
Insurance technical reserves - current
Other current liabilities
Taxes on income
312,699,520
423,276,402
11,537,280
142,800
26,613,285
2,380,334
140,591,339
42,492,840
1,986,968
4,032,039
713,304
22,957,365
50,362,834
19,831,603
2,506,018
-
137,407,492
336,969,283
111,192,995
20,734,389
18,309,432
102,098,823
33,071,612
613,655,716
853,101,359
144,548,846
20,734,389
18,452,232
135,250,165
36,165,250
Total current liabilities
776,649,621
189,816,490
95,657,820
759,784,026
1,821,907,957
Long-term bank borrowings
Debt securities in issue
Provision for employment termination benefits
Insurance technical reserves - non-current
Other non-current liabilities
Deferred tax liabilities - net
337,356,389
10,748
1,037
79,584,797
61,955,462
-
5,021,538
-
13,472,426
18,384,294
2,657,622
2,597,074
12,189,441
435,435,150
61,955,462
18,384,294
2,657,622
2,607,822
12,190,478
Total non-current liabilities
337,368,174
141,540,259
5,021,538
49,300,857
533,230,828
Total liabilities
1,114,017,795
331,356,749
100,679,358
809,084,883
2,355,138,785
Net foreign currency position
(466,408,222)
(142,130,111)
(72,578,046)
1,304,810,139
623,693,760
105,263,375
(69,980,074)
10,963,606
(74,005,716)
(27,758,809)
Assets:
Current assets
Total assets
Liabilities:
Current liabilities
Off balance sheet derivative instruments
net position
101
DO⁄AN fi‹RKETLER GRUBU HOLD‹NG A.fi.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER
(Amounts expressed in terms of the purchasing power of the Turkish lira at 31 December 2000, unless otherwise indicated)
NOTE 32 - GOVERNMENT GRANTS
Certain Subsidiaries have obtained investment incentive certificates from the Turkish government authorities in connection with
certain major capital expenditures which entitle the companies, among other things, to:
i)
ii)
iii)
A 100% exemption from customs duty on machinery and equipment to be imported,
Investment allowance of 100% on approved capital expenditures,
Incentive premiums varying between 12% and 25% on the cost of the local content of the facilities.
The investment allowance indicated in (ii) above is deductible from current or future taxable profit for the purposes of corporation tax
and exempt from corporation tax, but subject to income tax. At 31 December 2000, investment allowances to be utilized in future
periods amounted to TL 7,698,653 million (1999: TL 3,796,710 million).
NOTE 33 - ACQUISITIONS AND GOODWILL
Acquisitions made by Do¤an Holding and its subsidiaries from outside the Group during 2000 and 1999 were as follows:
2000
24.28% the issued share capital of Petrol Ofisi A.fi. ("POAfi") was acquired at the tender held on 30 March 2000 with effect from 21
July 2000 at a fair value of TL 60,503,086 million for a cash consideration of TL 420,331,009 milllion.
16.67% of the issued share capital of Ultra Kablolu Televizyon ve Telekomünikasyon Sanayi ve Ticaret A.fi. was acquired with effect
from 30 June 2000 at a fair value of TL 2,269,590 million for a cash consideration of TL 3,196,219 million.
11.64% of the issued share capital of Do¤an Burda Rizzoli was sold with effect from 31 January 2000 and 22 March 2000 for TL
9,255,881 million. The related goodwill amounting to TL 4,428,657 million and accumulated amortisation to TL 1,771,462 million have
been eliminated, representing a net decrease in goodwill amounting to TL 2,657,195 million.
1999
22.62% of the issued share capital of Simge Yay›nc›l›k ve Da¤›t›m A.fi. was acquired with effect from 15 April 1999 at a fair value of
TL 3,369,414 million for a cash consideration of TL 8,963,112 million.
102
2000
TL millions
1999
TL millions
Total cash consideration
Less: net assets acquired at fair value
423,527,228
(62,772,676)
8,963,112
(3,369,414)
Goodwill
360,754,552
5,593,698
The fair value of assets and liabilities arising from the acquisition by each category are as follows:
2000
TL millions
1999
TL millions
12,739,368
122,537
64,062,475
38,865,687
(26,316,489)
(26,578,365)
3,338,000
1,361,432
(1,054,387)
(398,168)
62,772,676
3,369,414
Goodwill
360,754,552
5,593,698
Total purchase consideration
423,527,228
8,963,112
Less:
Cash and cash equivalents
in subsidiary acquired
(12,739,368)
(122,537)
Cash outflow on acquisition
410,787,860
8,840,575
2000
TL millions
1999
TL millions
1 January
Additions
Amortization charge
Disposals - net
29,859,289
360,754,552
(17,682,385)
(2,657,195)
36,524,892
5,593,698
(12,259,301)
-
31 December
370,274,261
29,859,289
Cash and cash equivalents
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Fair value of net assets
Movement of goodwill is summarised as follows :
NOTE 34 - COMMITMENTS AND CONTINGENT LIABILITIES
Commitments and contingencies, from which the management does not anticipate any significant losses or liabilities are
summarised below:
2000
TL millions
1999
TL millions
390,708,541
22,636,244
330,556,908
6,444,491
274,562
17,865,201
4,120,303
39,916,256
Guarantees given:
Letters of guarantee
Guarantee notes
Guarantees taken:
Letters of guarantee
Guarantee notes received
103
DO⁄AN fi‹RKETLER GRUBU HOLD‹NG A.fi.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER
(Amounts expressed in terms of the purchasing power of the Turkish lira at 31 December 2000, unless otherwise indicated)
Commitments - given:
Commitments - Banking
In the banking segment normal course of banking activities requires to undertake various commitments and 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 2000 and 1999.
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 Bank
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.
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:
2000
Letters of guarantee
- TL
- Foreign currency
Letters of credit
Acceptance credits
Other commitments and
contingencies
104
Related
parties
TL millions
Other
TL millions
8,149,155
2,285,042
2,997,282
18,664,000
1999
Total
TL millions
Related
parties
TL millions
Other
TL millions
Total
TL millions
104,905,608
245,361,270
119,612,016
40,608,331
113,054,763
247,646,312
122,609,298
59,272,331
15,513,574
17,061,661
7,061,874
-
93,809,767
183,076,761
94,205,352
24,141,304
109,323,341
200,138,422
101,267,226
24,141,304
4,451,549
150,584,700
155,036,249
23,271,994
160,295,113
183,567,107
36,547,028
661,071,925
697,618,953
62,909,103
555,528,297
618,437,400
Commitments under derivative instruments:
The breakdown of forward and spot currency purchase/sale transactions at 31 December are as follows:
Forward currency purchases
US$
EURO
DM
SAR
TL
Original
Amounts
2000
TL millions
Original
Amounts
1999
TL millions
87,321,045
5,576,359
50,000
58,753,428
3,454,861
8,970
76,824,147
423,196,080
237,141,522
14,630,000
-
305,160,517
171,632,135
5,413,818
-
139,041,406
Forward currency sales
US$
EURO
JPY
TL
118,234,243
3,076,674
-
79,553,183
1,906,169
74,580,705
482,206,470
195,779,725
27,878,790
206,920,000
156,040,057
Currency swap purchases
US$
EURO
GBP
131,149,796
11,000,000
88,243,334
10,954,636
162,809,815
223,767,553
-
99,197,970
Currency swap sales
EURO
US$
CHF
GBP
161,683,091
2,942,100
1,000,000
-
100,171,567
1,979,574
409,198
-
US$
EURO
TL
402,397,439
176,693,597
270,750,642
109,471,401
214,883,538
218,963,005
4,780,000
4,000,000
US$
EURO
TL
346,799,797
134,962,348
233,342,110
83,616,598
285,309,858
157,891,027
2,153,706
4,661,677
164,706,410
-
595,105,581
Interest rate swap sales
161,952,671
161,952,671
102,560,339
Interest rate swap purchases
141,173,902
20,177,387
1,458,526
-
-
-
-
-
-
602,268,566
-
Currency options - call
TL
2,388,822
-
-
Currency options - put
TL
8,211,660
-
-
40,303,346
2,787,998
-
-
Future purchases
US$
EURO
59,900,000
4,500,000
43,091,344
Future purchases
US$
59,900,000
40,303,346
40,303,346
-
-
105
DO⁄AN fi‹RKETLER GRUBU HOLD‹NG A.fi.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER
(Amounts expressed in terms of the purchasing power of the Turkish lira at 31 December 2000, unless otherwise indicated)
At 31 December 2000, the Bank purchased put options and wrote call options on listed equities. Total commitment of the Bank from
this back to back transaction amounts to US$ 17,390,255 (1999: US$ 376,552,680).
The carrying values and estimated fair values of forward foreign exchange contracts outstanding at 31 December are as follows:
Carrying value
Fair value
2000
TL millions
1999
TL millions
(973,682)
980,976
1,803,467
(7,152,398)
Commitments for resale and repurchase of marketable securities:
The Bank’s commitments for resale and repurchase of government bonds, treasury bills and eurobonds at 31 December are as
follows:
2000
1999
TL millions
TL millions
Repurchase commitments
Resale commitments
201,343,497
199,321,002
55,562,817
239,912,311
400,664,499
295,475,128
Other commitments:
In accordance with total swap agreements signed with certain counterparties during 2000, the Bank as of 31 December 2000 has a
commitment to purchase TL 212,681,361 million nominal value of government bonds at their maturity in 2001. The net gain arising
from total swap agreements is TL 9,451,323 million and has been accrued in income on a straight-line basis. It represents a
difference between the fixed yield-to-maturity of the government bonds and a foreign currency denominated amount to be
exchanged between the Bank and the counterparties. In connection with these agreements, the counterparties placed non-interest
earning margin call deposits with the Bank in the amount of US$ 146,429,362 (or in the equivalent of TL 98,524,096 million) that
were recorded under cash and due from banks of 31 December 2000 (Note 6). During 2001, before the maturity of the agreements
the Bank purchased back and sold, substantially all government bonds subject to these agreements.
Commitments - Other companies
Pledges given
Acceptance credits
Mortgages given
Letters of credit
Forward commitment - foreign exchange contract
Commitments with respect to investment
incentive certificates
Other
2000
TL millions
1999
TL millions
309,607,404
59,272,331
26,616,953
9,309,323
2,390,839
165,330,656
24,141,304
24,118,759
716,493
347,129,804
10,303,457
123,487,196
2000
TL millions
1999
TL millions
25,000
1,628,230
Commitments taken:
Mortgages taken
106
Foreign currency denominated commitments and contingencies for other companies is as follows:
Guarantee letter US$
Guarantee letter FRF
Guarantee letter CHF
Guarantee letter EURO
Guarantee notes US$
Mortgages US$
Mortgages DM
Mortgages JPY
Pledges given EURO
Pledges given DM
Pledges given US$
Pledges given FRF
Pledges given CHF
Other commitments US$
Other commitments DEM
Other commitments CHF
Other commitments NOK
Other commitments GBP
Other commitments FRF
Other commitments EURO
Forward foreign exchange contracts US$
Blocked marketable securities and interest income accrual US$
2000
Original Currency
1999
Original Currency
620,590
44,899,041
13,235,413
879,378
1,262,122
7,500,000
19,249,999
161,974,800
54,223,290
311,429,240
44,123,051
1,071,348
298,885,584
50,302,450
9,456,948
2,950,000
15,968,500
24,825,172
153,880,000
3,559,040
5,034,677
3,839,429
43,699,041
1,748,481
15,000,000
23,000,000
13,850,000
55,165,723
161,935,506
65,436,716
58,768,586
234,880,400
1,640,000
2,950,000
15,968,500
2,058,456
9,100,000
1,000,000
26,620,529
Maturities of commitments and contingencies are less than one year except for the certain amounts of letters of guarantee which
are indefinite.
Barter Agreements:
The Group, as a common practice in the media sector, entered into barter agreements. These agreements involve the exchange of
goods or services without cash collections or payments. At 31 December 2000, barter agreements are as follows:
Subsidiaries and Joint Ventures
Do¤an Burda Rizzoli
Hürriyet
Milliyet
ANS
Simge
Subsidiaries and Joint Ventures
Do¤an Burda Rizzoli
Hürriyet
Milliyet
ANS
Simge
2000
Invoices Issued
1999
Invoices Issued
111,278
1,400,666
347,496
899,047
1,015,472
467,449
2,071,340
1,124,715
-
3,773,959
3,663,504
2000
Invoices Received
1999
Invoices Received
59,450
1,816,686
280,494
350,020
429,130
1,377,134
2,329,726
1,048,341
-
2,935,780
4,755,201
At 31 December 2000, on-going barter agreements are limited to US$ 7,902,730 and TL 656,259 million. (1999: US$ 4,510,030 and
TL 1,271,482 million)
107
DO⁄AN fi‹RKETLER GRUBU HOLD‹NG A.fi.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER
(Amounts expressed in terms of the purchasing power of the Turkish lira at 31 December 2000, unless otherwise indicated)
NOTE 35 - SUBSEQUENT EVENTS
1. On 22 February 2001, due to the turmoil in the Turkish financial sector, the Turkish government concluded that the managed
exchange rate was no longer sustainable. The crawling-peg system, which had limited the depreciation of the local currency, was
abandoned in favour of a free-floating exchange rate. The Turkish lira has depreciated in excess of 85% when compared to the
exchange rates prevailing at 31 December 2000. There is uncertainty as to the effects of the ongoing volatility in the financial
markets on the financial condition of the Group and its future operations and cash flows at present.
2. At the General Shareholders Meeting dated 14 June 2001, it was decided to increase the registered share capital of the Holding
from TL 100,000,000 million to TL 600,000,000 million upon the approval of Capital Market Board dated 21 May 2001 and
numbered OFD/1255-5777 and the approval of Ministry of Trade and Industry - General Directory of Domestic Trade dated 23 May
2001 and numbered 3818.
108
Produced by Finar Corporate Design.
DO⁄AN fi‹RKETLER GRUBU HOLD‹NG A.fi.
Oymac› Sok. No: 51 Altunizade 81190 Üsküdar ‹stanbul TURKEY Tel: +90 216 556 90 00 Fax: +90 216 556 93 98
www.doganholding.com.tr