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ANNUAL
REPORT
2014
Printed on 100% recycled paper
ANNUAL REPORT
2014
Contents
3 Financial Highlights
6 70 Years of Borusan
10 Chairman’s Message
16 Review of 2014 Operations
20 Borusan World
22 Borusan Kocabıyık Foundation
28 Borusan Group
30 Steel/Pipe
36 Steel/Flat Steel
42 Distributorship/Automotive
58 Distributorship/Earth Moving Equipment and Power Systems
66 Logistics
72 Energy
77 Independent Auditor’s Report
2
Financial Highlights
(USD
million)
December 31, 2010 Sales
December 31, 2011 December 31, 2012 December 31, 2013 December 31, 2014
3.5034.266 3.9764.141 4.499
Exports
8441.1001.144 983 1.103
EBITDA
245326277341 328
Working Capital8751.003 1.1101.091 1.198
CAPEX
166296352304 323
Net Financial Debt
612
866
1.031
1.058
1.164
Total Assets 2.5913.0293.3103.390 3.880
3
“T
hroughout my life, I believed
that people come first and
companies exist to serve them.
”
Asım Kocabıyık
Borusan Holding Founder
and Honorary Chairman
1924-2012
5
W
e have been working for Turkey for 70 years, taking our place in every
area of life and adding value. We are enormously proud of serving
society for 70 years. Our pipes bring life-giving water to fields and
transform houses into warm homes with natural gas.
Every day, our products are vital for innumerable journeys, delivering
power to automobile engines. We provide the raw materials that are essential for
industry and development. We produce environmentally-friendly energy and use it
in production. Our construction machinery builds roads, dams, and cities, and our
generators ensure life continues uninterrupted. For 70 years, we have worked with our
stakeholders to add value to life.
Our customers are our stakeholders - we share their goals and aspirations. We stand
by them and are driven by their needs. Together, we initiate projects that improve the
quality of life. We are celebrating our 70th anniversary as a global group operating in
world markets due to the high business standards to which we adhere, the result of the
trust we have built with our stakeholders and the support and strength they give us.
This trust has been unwavering for 70 years. The entire family of Borusan will continue
to produce value as we strive to improve the well-being of society.
6
We have been a leading actor in the national economy for 70 years. Our products and services
have touched the lives of millions. We have made countless friendships. We have exceeded
limitations through our enthusiasm for producing and sharing, and we have added value to every
area of life. Our intrinsic values will continue to illuminate our path.
8
1944
1958
1960
1968
Borusan Group’s
first company İstikbal
Ticaret, started
its activites in the
iron-steel trade
and exporting of
agricultural products.
The first industrial
investment was
intilated as Borusan
Boru Industry LTD was
founded.
Kerim Çelik started
operating as Borusan’s
initial investment into
the steel industry.
Borusan Boru’s 4.000
square meter plant at
Sefaköy was relocated
to the new 58.000
square meter modern
facility at Halkalı.
1969
1970
1972
1973
Borusan Boru had its
first $100.000 export
order to Syria. Turkey’s
leading heavy industry
machinery manufacturer
Borusan Engineering
was founded.
Supsan was founded
in Sefaköy, İstanbul to
manifacture valves and
valve accessories for
internal combustion
engines.
Borusan Holding
was founded and all
Borusan companies
were merged under the
name of Holding.
Originally founded to
be active in interstate
transport Boru
Nakliyat, also began
to offer customs, port
operations and storage
services as of 1983.
1974
1975
1977
1983
Supsan started
production with a
license from the U.S.
based company
Eaton S.r.L.
Borusan established its
first facility in Gemlik.
Borusan Yatırım was
founded. The Company
joined the major Borusan
companies which
have been operating
in steel, distribution
and integrated logistics
industries up to the
present.
Borusan established its
first port in Gemlik.
1984
1989
1990
1992
Borusan Oto became
the Turkish distributor of
BMW AG.
Bortrans, which
primarily engages in ship
rental, port operations,
marine transport, and
various businesses, was
also founded.
Turkish private sector’s
first cold flat steel
manufacturer Borçelik
was founded and
operations commenced
in 1994.
The Asım Kocabıyık
Culture and Education
Foundation was
founded by Asım
Kocabıyık and his family.
1993
1994
1996
1997
Borusan Chamber
Orchestra was founded.
Borusan Makina
commenced operations.
Borusan Yatırım went
public.
Borusan Makina
became representative
of Caterpillar in
Azerbaijan, Georgia,
Turkmenistan, and
Kazakhstan.
Borusan Culture
and Arts Center was
founded.
1998
1999
2000
2001
Borusan Oto, became
the Turkish distributor
for Land Rover.
Within the framework
of the partnership
agreement signed with
Mannesmannröhen Werke
AG merged its operations
with Borusan Boru under
the name of Borusan
Mannesmann Boru.
Borusan Chamber
Orchestra was
reorganized as a
philharmonic orchestra.
Borusan Lojistik was
founded. The company
put into service its
second port in Gemlik
with an investment of
18 million dollars.
Borusan Mannesmann
Boru bought the Italian
based Structo Vobarno
factory. With the signing
up for a $140 milllion
investment with its
French partner Arcelor,
Borçelik initiated a
capacity expansion and
a galvanized flat steel
investment project.
2006
2007
2008
2009
Borçelik’s second
hot dipped galvanizing
production line
GALVA 2 was bought
online as a part of
the modernization
investment.
Borusan Holding
entered into the
energy sector by
purchasing 70% of
the controlling shares
belonging to Maya
Energy.
Otomax, joined forces
with the global sector
leader of the secondhand automotive
market, the U.S. based
Manheim.
2010
2011
2012
Borusan Holding joined
the “World Business
Council for Sustainable
Development” as the
second member from
Turkey.
Borusan Holding’s
Head Office in Rumeli
Hisarı, Perili Köşk was
converted into an officemuseum. It became
the first office-museum
of contemporary art
in Turkey with the
name “Borusan
Contemporary”.
Borusan Lojistik
acquired Balnak
Lojistik and became
the leader in its sector.
Borusan Holding
signed the United
Nations (UN) Global
Compact, consisting
of 10 articles on
human rights,
working standards,
environmental protection
and anti-corruption.
The pipe manufacturing
facility with an annual
capacity of 250
thousand tons that was established by Borusan
Mannesmann in Gemlik, started operations.
The Company made a decision to establish
a pipe manufacturing facility with an annual
capacity of 300
thousand tons in USA
by investing 150 million
dollars.
Borusan Holding
signed the United
Nations Women
Empowerment
Principles and
therefore pledged
to support women’s
empowerment.
Borusan Holding and
Germany’s third largest
energy company EnBW
AG decided to form an
equal partnership.
Borusan Holding became
one of the first three
companies from Turkey
who has signed the
Cancun Declaration
against global
warming. In order to
encourage women’s
entrepreneurship,
Afyonkarahisar Asım
Kocabıyık Microfinance
Branch was opened.
2012
Borusan Holding
Founder and
Honorary Chairman
Mr. Asım Kocabıyık
passed away.
2013
Borusan started a corporate social
responsibility project titled as “My Mom’s Job
is My Future”, in order to support women
employment in Turkey in cooperation with
Ministry of Family and Social Policies and
Ministry of Science, Industry and Technology.
Gemlik Borusan Microfinance Branch
was opened in order to support women
entrepreneurship.
9
Chairman’s
Message
Dear Shareholders,
T
he world economy was beset by levels of geopolitical
risks and international uncertainties in 2014 that we
have not witnessed for many years. However, Turkey
produced relatively stable economic performance
despite two difficult nationwide elections and the
shadow of regional geopolitical risks.
Against this background, we made significant advances towards
becoming a global corporation in 2014. Coinciding with our 70th
anniversary, these developments strengthened our commitment
to becoming a Turkey based multicultural corporation active on
five continents within ten years.
Developments Overshadowing the World Economy
A. Ahmet Kocabıyık
Chairman of the Board
Borusan Holding
A. AHMET KOCABIYIK
Four important developments marked the world economy in
2014. First, the US distanced itself from the economies of other
developed countries in terms of employment and inflation. This
gave the Federal Reserve room to prepare to raise interest
rates, which is the next step towards normalization of US
monetary policy. Second, the decision of Greece to go to early
elections, together with an already weak economic outlook and
the necessity to impose new austerity measures, made the
associated risk a major concern for Europe once again. Third,
long simmering geopolitical risks in our region exploded and
grew. Fourth, changing petroleum supply balances caused a
rapid, sustained drop in crude oil prices.
The US economy returned to sustainable growth after a long
hiatus. While contracting 2.1% in the first quarter of 2014 due
to extraordinary winter conditions, the US economy grew by a
phenomenal 4.6% in the second quarter, and 5% in the third
and ended the year with an annual growth rate 2.4%. The
IMF projects that the US economy will consolidate its existing
performance to grow by 3.6% in 2015. Adding to these positive
developments in economic growth and the rapid recovery
in employment and wages, 2014 saw the return towards
normalization of US monetary policy. Following all these events,
even if the FED takes only minimal actions in 2015, it has
indicated that it will raise interest rates and that the future could
see further significant changes in the financial context.
In contrast to events unfolding in the US economy, the EU
economy continues to suffer. While Euro Zone economies
grew in 2014, albeit weakly, they had to contend with deflation.
Unfortunately, the measures taken to address the situation have
been inadequate and undermined confidence in the possibility
for growth. To deal with the threat of entrenched deflation, the
EU had to consider unprecedented measures, such as negative
interest rates and US-style quantitative easing programs.
Meanwhile, early elections in Greece, sparked by a political
impasse in the presidential elections and the major electoral
gains of separatist parties, exposed and magnified the risks for
the political and economic future of the European Union.
Moreover, Japan, the third largest developed economy, had to
contend with economic issues similar to those of the EU. The
country technically entered recession in 2014 and it responded
with expansionist policies in 2015 to stimulate the economy while
targeting an inflation rate of 2%. Hence, 2015 marked the end of
US monetary expansion while expansionist measures in Europe
and Japan were accepted as options to fill the void.
Developing countries attained economic growth but at lower
levels than in previous years. Alongside Turkey, most notable in
this regard were India and China, while the Russian Federation
was an exception.
Geopolitical risks had a major impact on the world economy
in 2014. The conflict in Ukraine and the consequent issues
between the Russian Federation and Western countries, the
enduring civil war in Syria and its spread to northern Iraq through
the Islamic State, and the persistent conflict in Libya, present
significant issues for 2015 with any one of these geopolitical risks
holding the potential to amplify economic uncertainties.
Falling crude oil prices is the last important development of 2014.
Crude oil prices fell from $103 a barrel in June 2014 to under
$60 by the end of the year as a result of the US becoming a net
oil exporter through the exploitation of its oil shale gas reserves
and the rapid growth in demand for non-OPEC oil supplies,
primarily from Libya, which overcame its production problems.
The IMF estimates that crude oil will hold at $57 a barrel in 2015,
which means a cheap oil climate bringing with it a new normal
that will change balances for exporting and importing countries.
Turkey’s growth rate beneath expectations
T
urkey held two tense and politically risky elections
in 2014. Moreover, tightening monetary conditions
caused by uncertainty attendant to international
geopolitical events, led to a pronounced decline in
domestic demand. While investments and capital
flows decreased significantly, growth continued in
large measure due to exports.
Despite weak domestic demand, inflation rose significantly in
2014. Consumer inflation, which reached 9.66% at one point
during the year, retreated to 8.17% by the year’s end, which
was considerably higher than the Turkish Central Bank’s
5% goal. High inflation restricts the option of stimulating
domestic demand. Therefore, Turkey goes forward in 2015
with this challenging issue.
Nevertheless, the current account deficit, a chronic structural
issue for Turkey, contracted by 30% in 2014 to end the year
at $45.86 billion. This significant improvement, largely the
result of weak domestic demand and devaluation of the
Turkish Lira, is expected to continue because of falling oil
prices.
The Prime Minister, Prof. Ahmet Davutoğlu, who formed
a new cabinet in July 2014, announced two Primary
Transformation Programs of important structural measures
as part of the 2014-2018, 10th Development Plan. Turkey,
which will assume the G-20 presidency in 2015, must strive
to make further structural transformations soon.
The Medium-Term Economic Program announced in 2014
foresees growth of 4% in 2015, while IMF projections
calculate it at 3.4%.
Borusan’s 70th Anniversary
In 2014, we celebrated the 70th anniversary of Borusan’s
founding. The company sprang from a small pipe-making
workshop in Halkalı district of Istanbul and now it has
revenues of $4.5 billion, 7,000 employees, and it operates in
global markets.
In this context, the Turkish economy opened 2014 with strong
first-quarter growth of 4.8%. However, economic growth slowed
to 2.3% in Q2, 1.9% in Q3 and 2.6% in Q4. With overall growth
of 2.9%, the Turkish economy did not meet expectations and
failed to live up to its potential.
11
CHAIRMAN’S
MESSAGE
This plan will
make our group
companies leaders
in their markets
of operation,
transform each of
them into regional
actors, and set the
scene for Borusan
to double in size
within ten years.
Borusan enters the US
We reached another major turning point in our 70-year history.
Borusan Mannesmann established a factory in Baytown,
Houston, Texas to make pipes for shale gas drilling and energy
lines in the US, the world’s largest shale gas market. The
US$150 million factory was completed and started production in
April 2013.
At full capacity, the plant will manufacture 300,000 tons of pipes
annually and employ 300 people. I am confident that Borusan
Mannesmann will attain its goal of being in the top five of the ten
manufacturers in the US market.
5 Year Strategic Plan
Borusan Group prepared its 5-year strategic plan in 2014.
This plan is a road map for the third generation of the Borusan
employees who will take over from the second generation that
is currently running our Group. This plan will make our group
companies leaders in their markets of operation, transform each
of them into regional actors, and set the scene for Borusan to
double in size within ten years.
In 2014, Borusan’s total revenues grew by 10% compared
to that of the previous year, to reach US$4.5 billion. While
maintaining sustainable profitability, the company invested nearly
US$400 million.
Most of our 2014 investments were, again, in the energy sector.
With our foreign partner, EnBW, Germany’s third-largest energy
company, our company, Borusan EnBW Enerji, launched a
$320 million investment in wind power plants in Turkey’s Mersin,
Izmir, Bursa and Çanakkale provinces. These will generate 207
MW of energy for the country. In addition, our other companies
turned in performances at home and abroad worthy of our
70th anniversary despite difficult market conditions, thereby
contributing to our collective success as a group.
Our Corporate Responsibility Activities
2
014 was a very productive year for our corporate
responsibility. I would like to highlight a few highly
noteworthy projects.
The My Mom’s Job is My Future project began
to bear fruit. We launched this project in 2013 in
12
collaboration with the Ministry of Family & Social Policies and the
Ministry of Industry & Technology for women who cannot find
work because of the absence of childcare.
An essential part of life
for 70 years
Under this project, we opened the first of our nursery schools
and daycare centers, Borusan Joy Factories, in the cities of
Adıyaman in July and in Afyonkarahisar in November 2014. The
project garnered the Comprehensiveness Award at the Turkish
Confederation of Employer Associations’ 2014 Corporate
Responsibility Awards.
Looking back at 2014, we
see that, in a world filled
with uncertainty, our Group
has availed itself of unique
opportunities and challenges
facing Turkey. In our 70th
anniversary year, while retaining
our founder’s values, we
moved the corporation forward
on the world stage. With its
7,000 employees, Borusan is
expanding its horizons globally.
From construction equipment
that builds cities to the pipes
that heat our homes and irrigate
our fields, from the vehicles to
which we entrust our lives to
the energy that powers modern
life, Borusan will continue to be
involved in a variety of essential
sectors including white goods
and transportation.
Similarly, our Group – a signatory of the United Nations Women’s
Empowerment Principles and a role model for social responsibility
projects in the Turkish business world – became the first Turkish
company invited to join the UN Women’s Empowerment Principles
Leadership Group.
The Borusan family established Borusan Soma Solidarity Fund,
with donations from our companies and our employees in
response to the devastating mining disaster in Soma in May 2014
as a social responsibility movement. The donations allowed us
to become the leading sponsor of the Psychosocial Services
Association’s Soma Solidarity Network, which provides posttrauma psychological and social support to more than 4,000 people.
The BBC Proms’ invitation to the Borusan Istanbul Philharmonic
Orchestra (BIPO) was the most important culture and the arts
development for us. The BIPO’s concert at The Proms, one of
the world’s most prestigious classical music festivals, received a
standing ovation from an audience of 6,000 in London’s worldrenowned Royal Albert Hall. BIPO released its third CD to mark
this occasion.
Exhibitions at Turkey’s first office museum, the Borusan
Contemporary, which is personally close to my heart, continued
throughout the year to present contemporary artworks for
the delectation of art aficionados. The Asım Kocabıyık: 88 &∞
Remembrance Room, established to perpetuate the memory
of Asım Kocabıyık, my father, our Founder and our Honorary
Chairman, opened on 28 December 2014, the second
anniversary of his death.
Dear Shareholders,
With best regards,
A. Ahmet Kocabıyık
Borusan Holding
Borusan Holding
Board of Directors
A. AHMET KOCABIYIK
Chairman
BÜLENT DEMİRCİOĞLU
Vice Chairman
FRANCIS PAUL MER
Member
ZEYNEP HAMEDİ
Member
NÜKHET ÖZMEN
Member
STEFANO PROVERBIO
Member
AGAH UĞUR
Executive Board Member and Group CEO
Executive Committee
AGAH UĞUR
Group CEO
MEHMET BETİL
Member
Borusan 2014
Review of Operations
Dear Investors,
Shareholders and
Employees,
2
014 was a very hectic year for both the world
economy and Turkey. In October, the United States,
having distinguished itself from other countries by
its performance, suspended the bond purchasing
program it had enacted after the crisis broke in 2008,
and expectations of interest rate rises emerged.
Moreover, while the pressure on developing countries’
economies are increasing, in Europe, low growth and low
inflation ratios continued in 2014. Driven by a decelerating global
economy and expanding oil supply, the decline of oil prices
to their lowest level since the 2008 crisis was one of the most
important developments in 2014. While, in the short term, this
drop in oil prices would benefit the trade balances of highly
energy-dependent countries like Turkey, overall it created global
economic uncertainty.
The 2014 conflicts between Russia and Ukraine and in Syria
and Iraq brought to the fore problems inherent in Turkey’s
geopolitical position and negatively affected the economy, which
grew by only 2.9%. Despite enormous fluctuations in Turkish
Lira rates and the increase in geopolitical and macroeconomic
risks in 2014, Borusan Group’s consolidated revenues grew by
9% to US$4.5 billion. With the strategic target of becoming a
strong regional player, Borusan Group has obtained 25% of our
consolidated revenues from international sales. Despite negative
developments in our markets of operation, we succeeded not
only in maintaining our gross profitability at 2013, but also in
making crucial strategic investments as one of Turkey’s leading
companies. We had an operating profit of US$328 million in
2014.
The Turkish steel sector performed lower than expected in 2014.
Turkey’s total crude steel production fell in 2014 by 1.8% as
a result of general stagnation in world markets, the increasing
Chinese activity, and the drop in iron ore prices. However,
Borusan Group’s steel companies, with the help of the increase
in export sales, grew by 5% and accounted for 42% of the
Group’s consolidated revenues and 39% of its operating profit.
16
O
ur flat steel
companies,
Borçelik and
Kerim Çelik,
maintained
their 2013
performance against a 4%
decrease in steel prices in
2014 and closed the year with
revenues of US$1.1 billion.
Borçelik, which has Turkey’s
largest galvanized flat steel
production capacity, retained
its market leadership in 2014.
Borusan Mannesmann
has continually consolidated
its presence in export
markets by investing in high
value-added products and
undertaking international
projects. As a result, its export
sales reached 65% of total
prime quality sales. The shale
gas drilling pipe plant, the
foundations of which were laid
in 2013 in Texas (USA), began
operations April 2014, thus
making the company a US
domestic producer. Constantly
expanding its activities in
the US, our Company won
a US$130 million public
tender for a 449-km liquefied
natural gas (NGL) pipeline to
be built in Texas, the delivery
will be completed in 2015.
The Company reinforced its
leadership position in the
Turkish market by winning
important contracts.
Trio-consortium of Borusan Mannesmann, Erciyas Boru and
Noksel Boru, with the leadership of Borusan Mannesmann Boru,
won a tender for a US$420 million natural gas pipeline project.
The project consists of supplying 30% of the pipes for the 1,900
km Trans Anatolia Natural Gas Pipeline project (TANAP), which
is to carry gas extracted from the Caspian Region to Europe
through Turkey. Delivery of these pipes will begin in 2015.
Borusan Mannesmann Boru’s revenues rose by 20% in 2014 to
US$ 716 million.
Despite enormous fluctuations in
Turkish Lira rates and the increase in
geopolitical and macroeconomic risks
in 2014, Borusan Group’s consolidated
revenues grew by 9% to US$4.5 billion.
ontinuing the growth they achieved in previous
years, our distributorship companies increased
sales revenues by 14% in 2014. Our luxury
automobile, construction equipment and power
systems distributor companies accounted for 47%
of the Group’s consolidated sales and 56% of its
operating profit.
With construction equipment
sales of nearly 1,400 units,
Borusan Makina ve Güç
Sistemleri retained its
leadership position of the
Turkish market in terms of
turnover. In Kazakhstan,
where we have a Caterpillar
distributorship, a 20%
devaluation of the Tenge and a
drop in commodity prices led
to an economically stagnant
year.
C
While Turkey’s passenger car market shrank by 12% in 2014, the
luxury segment grew by 19% with the help of increasing share
of small-engined models. Borusan Otomotiv, the market leader
for several years, broke a retail record, selling over 26,000 BMWs
in 2014, and by far its nearest competitor and consolidated
its position in the market. With sales of over 1,000 MINIs and
over 1,200 Land Rovers, Borusan Otomotiv Group’s total retail
automobile sales reached nearly 28,500 units. Borusan Otomotiv
also achieved a 94% customer satisfaction rating for all brands
through its entire sales network. In 2014, it became the Jaguar
representative for Turkey, and it had sizeable revenues of nearly
US$1.3 billion.
The fleet size of Borusan Otomotiv Premium Araç Kiralama,
which runs the rental operations of brands Borusan Otomotiv
represents as BMW, MINI and Land Rover, grew by 28%,
thereby doubling its market penetration. In 2014, its revenues
jumped 55% to US$71 million.
2
014 got off to a rough start with economic and political
uncertainties causing exchange rate instability in the
first half of the year. This led to a postponement of
major investments, and caused a 21% shrinkage in
Turkey’s construction equipment market. However,
Borusan Makina ve Güç Sistemleri, distributor of
Caterpillar, a leading global brand in its sector, won the public
tender to supply machinery for the construction of Istanbul’s
3rd airport. This €10 billion worth project will be the third largest
project ever undertaken in Turkey and the fifth largest airport
in Europe. The Company will meet a major portion of the
construction equipment requirement and provide after-sales
services for the project, which will be completed in 2017.
However, our representative
there dominated the mining
market and achieved a record
market share. Our Kazakhstan
operations were selected as
one of the best Caterpillar
representations in a global
field of 186 representatives.
Borusan Makina ve Güç
Sistemleri expanded by 34%
in the Azerbaijan construction
equipment market, again
becoming market leader.
Despite contractions and
negative developments in its
domestic and international
markets of operation,
the Company maintained
consolidated revenues of
approximately US$ 900 million.
Consolidated EBITDA (US$ Millions)
350
341
328
300
250
200
150
100
50
2013
2014
Consolidated Net Sales (US$ Millions)
4500
4,499
4250
4000
4,141
3000
2500
2000
1500
2013
2014
17
BORUSAN 2014
REVIEW OF OPERATIONS
IN
2014, Borusan Lojistik embarked upon the
goal of acquiring greater proximity and speed
in customer services, with lean and efficient
processes; meanwhile, it started focusing on
innovative projects and offering customers more
flexible solutions. Technology investments at our
port in Gemlik, which can accommodate container ships of up
to 13,000 TEUs and has a 400,000 TEU-container and 250,000
vehicle-freight handling capacity, have enabled us to create
value for our customers by increasing promptness, efficiency
and operational capacity in services. In the international shipping
under the Balnak brand, we have over 100 agents in Europe,
which provides us with a significant global transaction volume.
We have acquired greater international penetration through the
addition of CIS and Middle East lines.
In 2012, we established an online platform bringing SMEs and
shippers together under the Borusan Lojistik guarantee. This
platform, the ETA (Electronic Shipping Network), provided an
innovative approach to the land shipping sector by offering
reliable and fast service at optimal cost. In 2014, membership in
the online platform grew with the addition of 1,000 freight owners
and 2,000 trucking industry service providers.
Manheim (US), one of the world’s leading specialists in public
auctions, with its partner Borusan Manheim, increased
its dealer membership by 30% to 3,500 members. Having
expanded its total customer base by 29% and its business
volume by 14%, Manheim founded Otomax.com to accelerate
sales by broadening its second-hand car portfolio.
Supsan, Turkey’s largest manufacturer of valves and valve
supplier to major automobile brands, had sales volume of
4.9 million and revenues of US$23 million in 2014. Our company
has also begun exporting to Russia and added Daimler CNG
engines and Volvo trucks to our customer portfolio.
In 2014, while celebrating our 70th
anniversary, we established our
targets for 2019 under the 5-year
strategic plan.
18
W
orking towards its vision of achieving a
2,000MW portfolio by 2020, Borusan EnBW
Enerji continued its investments through
2014. The foundations of the Balabanlı Wind
Power Plant (Tekirdağ, 50MW) project, which
was put on the investment schedule in 2012,
and was started construction in 2013, reached full capacity two
months earlier than planned. Investments of wind power plant
package projects (which include the Fuatres, Harmanlık, Mut
and Koru Wind Energy Power Plant projects, and the capacity
expansion of the Bandırma Wind Energy Power Plant), which
were decided upon in 2013 as being the Europe’s largest
terrestrial wind power investment, have begun in the 207 MW. As
a result of TÜV NORD Teknik Kontrol ve Belgelendirme Company
inspections, Borusan EnBW Enerji gained “Voluntary Green
Energy Power” certification in July and became the first Turkish
energy company certified as supplying 100% green energy.
D
eveloping new products, services and business
models is a major focus of Borusan Group. In the
scope of these devoted activities, we evaluated
35 business opportunities in 2014. Most of these
opportunities, for which we budgeted US$ 5 million,
have been transformed into operational business
models and commercialized. As a result of our focused efforts,
we have brought seven projects to the incubation stage and, as
of the end of the year, we had over 50 new product, service and
business model projects underway in seven companies.
R&D is crucial to accelerating the development of new products,
services and business models. Therefore, we are establishing
a joint and competent R&D Center under the Holding company
to contribute to the Group’s competitive advantage as we move
forward. We have completed the joint R&D Center’s roadmap
and infrastructure, it will become operational in 2015. We have
also taken steps to increase cooperation with universities; to be
closer to university resources, data banks and academicians, we
have joined ITU’s Arı Teknokent.
Our profit did not reach a satisfactory level as we planned
for 2014. While our consolidated revenues rose by 9%, our
operational profit mirrored that of 2013. This was because of the
negative developments in our business sectors, such as the fall
in steel prices, the shrinkage in Turkish and foreign construction
equipment markets, and the increasingly restrained profitability
levels in the logistics sector.
Consolidated Working Capital
and Net Financial Debt
(US$ Millions)
Consolidated Working Capital
Net Financial Debt
1600
1400
1200
1000
1,091
1,058
800
While we maintained accustomed growth tempo in 2015, we still
aim to significantly increase our profitability. We plan to achieve
this through structural changes to our business processes,
which we initiated in 2014, and by employing new strategies
to increase customer centricity, especially in our logistics and
construction equipment distributorship businesses, and by
developing new approaches to meeting customer needs in all of
our businesses.
In 2014, while celebrating our 70th anniversary, we established
our targets for 2019 under the 5-year strategic plan we apply to
build our future.
600
400
200
2013
1600
1400
1200
1,198
1000
O
ur indebtedness grew by 10% in 2014. This is
partly due to our shale gas drilling pipe plant
investment, which will begin production this year
in Texas. It is also the result of our investments
in energy business and rental fleet for our
distributorship businesses, which we made with
compatible ratios in the market, requiring less capital and greater
bank borrowing. However, we managed our foreign exchange
risks successfully despite devaluations in two important countries
where we operate.
1,164
800
W
e created Borusan’s portfolio vision and
strategy by considering those customer
segments and types of business that offer
an attractiveness to us, while unaffiliated
with the sectors our Group companies are
currently doing business in. Accordingly, we
shall place even greater importance and emphasis than usual
on expanding the businesses that have come to stand out and
attained success in two of the following basic categories in our
Group portfolio. The first encompasses businesses that offer
integrated, intellectually driven and engineering based products,
services and solutions. The second involves businesses that
create “market platforms” in which business communities’ needs
are served in a fast, simple and low cost basis via the use of
technology and market optimization.
In recent years, Borusan
Group has started prioritizing
actions that ensure progress
in this direction in nearly all of
business units. In addition to
our strategic investments and
the fast and decisive steps
on new product development
and innovation that we have
taken since 2012, we have
begun to act on organizational
development. This is a most
fundamental priority for
creating a corporate climate
that is more customer-oriented,
leaner and more agile as we
approach 2019.
In order to create a successful
and responsible conglomerate
with growing, highly profitable
and innovative businesses that
dominate their markets, and a
culture where the best talent
can excel by 2024, Borusan
Group’s 80th anniversary,
we will maintain our efforts in
2015, the first year of this new
era, with the contribution of all
of our stakeholders.
I extend my sincere
appreciation to all our
shareholders, customers and
employees, who have made us
what we are today.
Sincerely,
Agah Uğur
Group CEO
Borusan Holding
600
400
200
2014
19
USA
Algeria
Italy
Netherlands
UAE
Turkey
N. Cyprus
Georgia
Oman
Azerbaijan
AMERICA
EUROPE / AFRICA
Kyrgyzstan
Kazakhstan
MIDDLE EAST/ ASIA
Borusan World
A
powerful industrial group with roots stretching back
70 years, Borusan continues its consistently growth
in the sectors of operation - steel, distributorship,
logistics and energy. Borusan Group’s strategy rests
on being a beneficial conglomerate with the focus
on innovative products and services development
and the aspiration for growth in global markets
while creating value for the Turkish economy.
Borusan has over 7,000 employees and operates in 11 countries
on three continents – North America, Asia and Europe. The
Group companies create added value in manufacturing, services
and industry, together with their international partners, each of
which is a leader in its field.
Borusan Group has a strong corporate business culture proven
through the Group’s successful expansion. Central governance
of the Group is conducted by Borusan Holding and Borusan
Danışmanlık.
Borusan Holding is responsible for raising shareholder value by
providing strategic leadership. Accordingly, Borusan Holding
defines the strategic direction, values, and business organization
of the Borusan Group. It provides support and control by
concentrating on portfolio and risk management, strategy,
business development, human resources, money, innovation and
reputation.
Borusan Holding is in charge of the Group’s investment strategy
and management. In exercising this responsibility, it charts
a roadmap for transforming “innovative competition” into an
essential component of business culture and organizational
climate, and it ensures the spread of this approach to doing
business.
Borusan Holding has a major leadership role in managing
relations between subsidiaries and other social shareholders,
and it ensures the effective use of resources.
Adana
Ankara
Antalya
Bursa
Balıkesir
Diyarbakır
Erzurum
Gaziantep
İstanbul
Borusan Danışmanlık retains all the other complementary
functional and service areas of the corporate headquarters.
Borusan Danışmanlık’s purpose is to create synergy and to
manage common service procedures, thereby generating
significant economic advantage and productivity at the Group
level.
Within this framework, Borusan Danışmanlık provides specialists
in areas such as information technologies, central purchasing,
corporate risk management, law and corporate governance,
in support of the Group’s strategic goals and its business
outcomes. It is also in charge of optimizing costs and maximum
efficiency management. Its priorities, in addition to the creation
of economic value, are effective risk management, ensuring
compliance with legislative amendments, obtaining necessary
certifications, and performing other similar complementary
activities.
Along with providing services to the Group, Borusan Danışmanlık
also undertakes the Holding’s financial and administrative
operations and those of its subsidiaries. Moreover, it manages
key initiatives throughout the Group, such as the Lean 6 Sigma,
sustainability and corporate social responsibility projects.
Directors
BARIŞ KÖKOĞLU
Borusan Holding, CFO
LALE ERGİN
Borusan Holding, Strategy, Business
Development, Innovation Director
SEMRA AKMAN
Borusan Holding, Human Resources
Director
CANAN ERCAN CELİK
Borusan Danışmanlık, Chairman
ALİ FUAT ÇÖTELİOĞLU
Borusan Danışmanlık, CIO
İzmir
Kocaeli
Manisa
Mersin
Muğla
Tekirdağ
Trabzon
Zonguldak
21
Borusan Kocabıyık Foundation
“We are repaying
a debt of gratitude
to the country”
22
C
elebrating its 70th
anniversary in 2014, our
Group was founded and
has come to be what it is
today under the leadership
of our founder and honorary
chairman, the late Asım Kocabıyık.
Today our primary goal is to lead in the
sectors we operate and to be a global
corporation active in world markets. In
striving to achieve this goal, we have
drawn vital inspiration from the words of
our founder: “I owe a debt of gratitude
to this country. I have worked my whole
life to repay it.” This maxim is the basis
of Borusan Holding’s social responsibility
activities.
Borusan Holding’s social responsibility
activities focus on education, culture
and the arts, and the empowerment
of women. The Borusan Kocabıyık
Foundation (BKF), founded in 1962,
operates to ensure the effectiveness and
sustainability of these activities.
Borusan Holding initially concentrated its
social responsibility activities on education
and then expanded into culture and the
arts, particularly through the Borusan
Istanbul Philharmonic Orchestra, cultural
publications and a contemporary art
museum, Borusan Contemporary. Most
recently, its key priority has been the
empowerment of women and equality of
opportunity for men and women. Another
major, and unique, social responsibility
project is the Borusan Ocean Volunteers
Platform, a voluntary initiative of Borusan
employees established in 2008.
BORUSAN KOCABIYIK
FOUNDATION
Borusan
Kocabıyık
Foundation
T
he BKF’s mission
is to contribute
to Turkey’s
development and
to step in where the
state’s resources
are insufficient. BKF’s social
responsibility projects focus
on education, culture and the
arts, and the empowerment of
women. It spent US$15 million
on social responsibility projects
in 2014.
Education
O
ver the years,
Borusan
Holding has built
many schools
addressing
different age
groups, such as Borusan
Otomotiv Zehra Nurhan
Kocabıyık Primary School,
Gemlik Borusan Primary
School, Borusan Asım
Kocabıyık Industrial Vocational
High School, Kocaeli University
Asım Kocabıyık Vocational
College, and Uludağ University
Asım Kocabıyık Vocational
College. It continues to support
some of these schools directly
and others through public
contracts.
Moreover, in 2014, BKF
provided scholarships to 131
students to study in Turkey or
abroad.
23
Borusan Sanat
B
orusan Sanat is the governing body of the Borusan
Istanbul Philharmonic Orchestra (BIPO) which was
founded in 1999 under the leadership of Gürer Aykal
and with its dynamic ensemble comprising some of
the best classical musicians in Turkey is working to
become one of the leading symphonic ensembles
in Europe, as well as the Borusan Quartet, the Borusan
Children’s Chorus, and Borusan Klasik, which is the first
classical radio in Turkey that broadcasts over the Internet.
Borusan Sanat represents Turkey at the International Society
for Contemporary Music, which has over 50 members. Borusan
Sanat is also an official member of the European Music Council,
the European Group of the International Music Council,
UNESCO’s advisory body on music with over 60 national
committee members.
BIPO, Turkey’s first private symphony orchestra, celebrated its
15th anniversary in 2014 and was invited to the BBC Proms,
one of the world’s largest and most respected classical music
festivals. The orchestra gave a concert under the direction of
its artistic director and principal conductor Sascha Goetzel,
for which it received a standing ovation from an audience of
6,000 at the world-renowned Royal Albert Hall. The orchestra’s
much-anticipated third CD, Rimsky-Korsakov, Balakirev, Erkin,
Ippolitov-Ivanov, was released the same time as the concert to
positive reviews, as did its earlier recordings.
The BIPO reaches nearly 25,000 concert-goers a year with
its monthly concerts. In 2014, it held a special four-concert
classical music event entitled “Music for Peace with the BIPO.”
The proceeds from this event, held between 13–19 December
24
in collaboration with Borusan Sanat and the Music for Peace
Foundation, went directly to the Music for Peace Foundation,
which aims to provide children with classical music education
and to encourage peace through music.
The guest conductor at BIPO’s 2014 special concert was once
again the famous movie and theater actor, writer and director
Ali Poyrazoğlu. An established tradition since their inception in
2006, the special concerts have over the years made it possible
for 19 young musicians to have postgraduate education in
prestigious institutions in the world with the funds provided from
the proceeds of these concerts.
B
orusan Sanat also coordinates Ertuğ & Kocabıyık
Publications noted for its books of exquisite quality
and content focusing primarily on the Ottoman,
Byzantine, Roman and Hellenistic eras. The
publication of these books, which contain scholarly
articles and stunning photographs, is the joint
project of Ahmet Kocabıyık, Chairman of Borusan Holding, and
architect-photographer Ahmet Ertuğ.
Ertuğ & Kocabıyık Publications presented its latest book “Ancient
Theaters of Anatolia” in 2014. Penned by R.R.R Smith, Lincoln
Professor of Classical Archaeology and Art at Oxford University,
and Director of the Aphrodisias Excavations in Turkey, the book
features stunning photographs of Ahmet Ertuğ. Many of the
extraordinary images show these well-preserved theaters in
exceptional detail.
BORUSAN KOCABIYIK
FOUNDATION
Borusan Contemporary
S
ix Exhibitions from Borusan Contemporary
In commemoration of its 100th birthday, the
Yusuf Ziya Pasha Mansion became the Borusan
Contemporary, a venue for exhibitions of
contemporary art. Also known as Perili Köşk
(Haunted Mansion), the building, in Istanbul’s
Rumelihisari neighborhood, serves as Borusan Holding’s
headquarters during the week and is open to public during the
weekend as a venue for art aficionados’ enjoyment of Borusan
Contemporary’s innovative art exhibitions.
Borusan Contemporary’s 2014 program continued to present
selections from its collection, alongside exhibitions with various
media and conceptual content.
Borusan Contemporary hosted an exhibition of John Gerrard’s
dynamic works entitled “Exercise”, from 1 March to 1 June
2014. The pieces are remarkable for using the very software that
enables the operations of entertainment, industry and warfare.
Another exhibition, “Megaplex Trilogy,” ran parallel with
“Exercise.” Curated by Kathleen Forde, the exhibition contained
3D film collages by Marco Brambilla: Creation (Megaplex) (2012),
Evolution (Megaplex) (2010) and Civilization (Megaplex) (2008).
“Common Ground: Earth” (1 March–16 November) was the first
in the 2014–2015 exhibition series “Common Ground: Earth,
Water, Air” that presents works from the Borusan Contemporary
Art Collection.
“West Coat Visions” (14 June–16 November) showcased
works from the collection of San Francisco Museum of Modern
Art (SFMOMA), one of the world’s most important media art
collections, providing a rare opportunity to view some unique
works which are not easy to come by out of San Francisco.
Curated by SFMOMA’s Media Arts Curator Rudolf Frieling, the
exhibition featured works of Jeremy Blake, Bill Fontana, Doug
Hall, Steina and Bill Viola.
Borusan Contemporary hosted workshops parallel the
exhibitions, which ran throughout the year, bringing children and
adults together through art.
25
Empowerment of
Women
B
orusan Holding believes that women should have
the same rights as men in the social and economic
arenas. Women comprise only seven million of the 37
million people working in Turkey and one out of five
lives in poverty. As part of its contribution to solving
this social problem, Borusan Holding supports
its women workforce as a company policy and provides the
infrastructure and financial support for women in other regions
to participate in professional life.
Despite operating mostly in heavy industry sector, as of 2014,
15% of Borusan Group’s managerial positions are held by
women. Moreover, Borusan has signed many protocols and
commitments, first and foremost being the UN Women’s
Empowerment Principles.
26
My Mom’s Job is My Future
R
esearch shows that an important obstacle to
women’s employment in Turkey is childcare. The longterm “My Mom’s Job is My Future” project addresses
this issue. The goal of this project, launched in
partnership with the Ministry of Family and Social
Policies and the Ministry of Science, Industry and
Technology, is to build early childcare and education centers,
called Borusan Joy Factories, for children between the ages of 0
and 6 in ten organized industrial zones (OIZ) in ten provinces of
Turkey. These centers not only facilitate employment of women
in companies operating in these OIZs, but also provide their
children with an opportunity to receive a modern education.
Another aim of the “My Mom’s Job is My Future” project is to
set an example to the business world as to what can be done
towards this purpose and to create greater public awareness of
the issue.
BORUSAN KOCABIYIK
FOUNDATION
The project unfolded in 2014
with two Borusan Joy Factories
opening their doors: the first
started to operate in Adıyaman
in July and the other was in
Afyonkarahisar in November.
These childcare facilities made
it possible for 150 children to
receive preschool education
and their mothers to return to
their jobs with their minds
at ease.
The “My Mother’s Job is My
Future” project also won
the Comprehensiveness
Award at the Corporate
Social Responsibility Awards
Contest held by the Turkish
Confederation of Employer
Associations and Borusan
Holding became the first
Turkish company invited to join
the United Nations Women’s
Empowerment Principles
Leadership Group.
Borusan Soma
Solidarity Fund
Gemlik
Borusan and
Afyonkarahisar
Asım
Kocabıyık
Microfinance
Branches
A
sım Kocabıyık,
founder and
honorary chairman
of Borusan
Holding, personally
established the
first microfinance branch in his
place of birth, Afyonkarahisar,
to expressly support women
entrepreneurs. The second
microfinance branch was
opened in 2013 in Gemlik, near
Bursa, where Borusan Holding
has an extensive industrial site
and port.
Together, these microfinance
branches have provided 1,300
women entrepreneurs with
approximately 3 million Turkish
Liras in credit support to start
or expand their businesses.
In 2014 alone, 603 women
entrepreneurs received
microcredit support.
The day after the mining disaster in Soma, western Turkey,
Borusan employees launched a donation campaign, the
Borusan Soma Solidarity Fund, for the families of the victims.
The donations collected from Borusan Holding and the group
companies were used to underwrite the Soma Solidarity Network
(SOMADA) project, developed by the Union of Psychosocial
Services in Disasters. The aim of SOMADA is to provide social
and psychosocial support to families which lost husbands or
fathers, children being the main focus. The Borusan Soma
Solidarity Fund met the costs of establishing and running the first
psycho social support center in Soma and provided vehicles for
two mobile teams.
A Corporate
Voluntary
Initiative:
Ocean
Volunteers
B
orusan Ocean
Volunteers Platform
was founded in
2008 to enable
Borusan employees
to use their
knowledge and skills in social
responsibility projects in the
fields of education, culture and
the arts, the environment and
human rights.
Borusan Ocean Volunteers
Platform clocked 2,861 hours
of voluntary work, involving 630
volunteers. A total of 52 events
were organized in cooperation
with 26 NGOs.
Borusan Group companies and
their employees unceasingly
work toward repaying the “debt
of gratitude to the country.”
27
Borusan Group
STEEL
DISTRIBUTORSHIP
PIPE
MACHINERY AND POWER SYSTEMS
• Borusan Mannesmann Boru Yatırım Holding
• Borusan Mannesmann
• BM Vobarno
• Borusan Mühendislik
• Borusan İstikbal Ticaret
FLAT STEEL
• Borçelik
• Kerim Çelik
LOGISTICS
• Borusan Lojistik
• Borusan Logistics International
• Borusan Makina ve Güç Sistemleri
• Borusan Makina Kazakhstan
AUTOMOTIVE
• Borusan Otomotiv
• Borusan Oto
• Borusan Otomotiv Premium Kiralama
• Supsan
• Manheim Türkiye
ENERGY
• Borusan EnBW Enerji
STEEL / PIPE
BORUSAN
MANNESMANN
STRATEGIC POSITIONING
Turkish market leader in high value-added products and one
of Europe’s leading steel pipe manufacturers.
Global company with a strategy to maintain profitable growth
through investing in high value-added products in the right
geographical locations.
Competitive ability gained in international level by targeting
approximately 65% of sales to export markets.
Aiming to be one of the top five players in the North American
OCTG market.
Domestic market leader in special pipes for the automotive
sector; aiming to be a key player in export markets.
Targeting high value-added new markets for spiral pipe sales.
Pursuing a rapid and profitable growth strategy through
investing and inventing high value-added new products.
Directors
Our pipes bring
life-giving water to
fields and transform
houses into warm
homes with natural
gas.
SEMİH ÖZMEN
Executive Committee Chairman
ZAFER ATABEY
Executive Committee Member,
Projects Segment and Special
Pipes Sales and Procurement
Director
KAĞAN ARI
Finance & Strategy, IT Director
TAYLAN KARAGÜL
Commercial Pipes Sales and
Procurement Director
HAKAN DUMAN
Operations Director, Gemlik
Facilities
BUDDY BREWER
General Manager, BM Pipe US
EROL AKGÜLLÜ
Investments Director, BM Pipe US
31
STEEL
BORUSAN MANNESMANN
2014 HIGHLIGHTS
Achieved 20% growth in prime product sales, reaching
699.000 tons, while consolidated turnover increased 20% to
$716 million.
Consolidated export sales decline in 2013, due to the
structural change of OCTG sales through our US subsidiary
rather than a 3rd party distributor company, has largely recouped
in 2014.
With a focus on rapid export growth, Borusan Mannesmann
directed approximately 65% of total prime sales to export
markets. Tons exported soared 43% while the turnover
generated from these pipes expanded by 44%.
Achieved company’s highest level of profitability in automotive
pipes and maintained the record sales tonnage levels achieved in
the previous year.
Standard pipe sales increased 29% and much of the increase
came from high value-added steel pipes.
Borusan Mannesmann Pipe US. Inc., a $150 million USD
investment to serve the U.S. OCTG market with 300,000 tons
capacity, has started production.
The trio-consortium under the leadership of Borusan
Mannesmann, (Borusan Mannesmann, Erciyas Boru and Noksel
Boru) awarded to supply approximately 30% of the total steel
pipe demand for the Trans Anatolian Natural Gas Pipeline
(TANAP). The total contract value of the consortium is $420
million and the shipment of steel pipes is expected to start
in 2015.
Awarded a $130 million contract, devoted to one of our key
strategic growth areas, to supply large diameter line pipes for
a 449 km pipeline construction in Texas. The project will be
the longest pipeline project in Borusan Mannesmann’s history
with the supply of steel pipes length of 24.5 meters after the
completion of H2S investment. Shipment of these pipes is
expected to be completed in 2015.
High value-added new product sales increased to 17% of
prime sales turnover from 6% in previous year, in response to
day by day increasing weight of developing of new products in
line with company’s vision.
OPERATIONAL INFORMATION
Prime Product Sales (K Tons)
Domestic
Exports
1000
900
800
700
600
700
677
745
319
699
475
416
583
311
500
400
300
358
284
200
270
272
255
2012
2013*
2014
100
2010
2011
*Our consolidated export figures dropped in 2013 compared to those for 2012 because
the pipes used in the OCTG segment began to be sold through our partner BM Pipe US
beginning in 2013. This decline, however, was largely recouped in 2014.
Investments (million USD)
140
138
120
100
80
83
60
40
57
36
30
20
2010
32
444
2011
2012
2013
2014
STEEL / PIPE
A FELLOWSHIP OF
70 YEARS
TİRYAKİLER GROUP
MEHMET TİRYAKİ
“The first thing that
comes to mind when
I hear ‘Borusan’ is
reliability.”
Tiryakiler Group has been
operating in the automotive
supply industry for 40 years.
When Turkey was not even making screws,
Borusan’s founder, Asım Kocabıyık, and our
founder, İsmail Tiryaki, saw that our country’s
future was in industry and they had the courage
and vision to act on that. If Turkey had 10-20
entrepreneurs like Kocabıyık, many of Turkey’s
problems, like unemployment, would have been
solved.
We first started making spare parts for Borusan
Group in the 1970s. During those years, we were
also working with Supsan Engine Parts.
We began working with Borusan Mannesmann
in 1988.
The first thing that comes to mind when I hear
“Borusan” is reliability.
What I mean by reliability
is to date, Borusan Group
has fulfilled every one of its promises. They have
only promised what they could do and then
fulfilled it. This is very important. We collaborate
technologically. For example, when we say that
we need piping with technical features that
makes it lighter, Borusan acts and works with us
to address this need. Our R&D Department and
Borusan engineers work together to develop that
product.
Borusan is much more than a supplier for us; we
have been working with Borusan for nearly 30
years. Borusan instills in us the feeling that we
are at home and always welcome. It has fulfilled
every promise it has made to us for 30 years.
This induces confidence.
33
STEEL
BORUSAN MANNESMANN
CORPORATE INFORMATION
Borusan Mannesmann
BM Pipe US
Field of Activity
Production and sale of steel pipes targeting domestic and
international markets.
Production Capacity
300,000 tons OCTG production and processing capacity.
Operational area of 500.000 square meters.
Production
Product range of over 4,000 types of pipe, ranging in outer
diameters from 4.6 mm to 3,048 mm and wall thickness
between 0.7 mm and 25.4 mm.
Product range includes water pipes, general purpose pipes,
natural gas and petroleum line pipes, industrial pipes and
profiles, structural pipes, casing and tubing pipes, boiler tubes,
and spirally welded pipes.
Europe’s only manufacturer of large diameter pipes for
petroleum and natural gas lines.
Spirally welded line pipes ranging between 508 mm and 3,048
mm for oil, gas and water line pipes, and piling applications.
Coating facilities of PE, FBE, PP, epoxy and cement to serve
specific customer specifications.
Sectors Served
North American OCTG and line pipe markets.
Production Capacity
An annual production capacity of over one million tons
comprised of 800,000 tons of longitudinally welded pipes and
250,000 tons of spirally welded pipes.
Sectors Served
Borusan Mannesmann is a diversified producer of tube and
pipe products serving the construction, energy and automotive
markets with a wide range of longitudinally welded steel pipes.
Borusan Mannesmann also serves water, oil, gas pipeline
projects in domestic and export markets with its spirally welded
pipes.
Service Locations
Bursa-Gemlik and Istanbul-Halkalı production plants.
100 distributors.
PARTNER
34
Service Location
Manufacturing plant in Houston, Texas, United States
BM Vobarno
Production Capacity
Annual production capacity of 28,000 tons of cold-drawn
special pipes.
Operational area of 29,000 square meters.
Special value-added steel pipes with outer diameters ranging
from 20 mm to 140 mm.
Sectors Served
European manufacturing industries, primarily the
automotive sector.
Service Location
Manufacturing plant in Vobarno, Italy
Borusan İstikbal Ticaret
The oldest member of the Borusan Group.
Handles the Borusan Group’s flat steel and pipe exports.
Incorporated under Turkish law as a foreign trade company.
STEEL / PIPE
A FELLOWSHIP OF
70 YEARS
PERİ KALIP
AZIZ AYHAN AKPINAR
Managing Director
Peri is a casting and scaffolding company and
we are the global market leader in our sector. We
have subsidiaries in 62 countries in addition to
our headquarters in Germany.
Maintaining our position
requires that we provide
innovative and technically
unrivaled products. It
is impossible for us to
source raw materials
from just any supplier; we
have strict raw material
standards. We are not
concerned simply with
the diameter and thickness of pipe; we delve
into everything about the constitution of pipes,
including, for instance, the amount of silicon and
magnesium they contain.
confirmed that they can produce this raw material
within the next 1-2 months. Peri Türkiye is
not a large buyer, but the experience Borusan
gains from working with us will help them as a
global player, too. We have formed a win-win
relationship.
“Nearly 90% of the
products we get
from Borusan are
tailor-made for us.”
We choose Borusan Mannesmann because the
company provides us the raw material we need
under the conditions we prefer. For example, we
are currently collaborating with Borusan on an
important project. We stated our product need to
Borusan and how important this project was for
the future of our company. In response, Borusan
I think that Borusan is
integrated globally with
respect to such matters
as market domination,
R&D, quality control and
production processes.
It is becoming a global
player, which is a situation it
manages well. Being able to open a plant in the
US confirms this.
Our first impression of Borusan has not changed.
From the start, we sensed that the company was
ours and we trusted it. We get the product we
want to the standard we need by the deadline
we set. Borusan people respond quickly to any
product-related problems and they take the
initiative to solve them. This is a result of the
culture Borusan’s founder, Asım Bey, instilled in
the company.
35
STEEL
BORÇELİK
Turkey’s first private flat steel producer
The most sophisticated technology and largest production
capacity of any galvanized flat steel producer in Turkey
Main supplier for largest industrial companies
A total capacity of 1,5 million tons
Market leader in Turkish Hot Dipped Galvanize industry
Strategic partnership with ArcelorMittal, world leader in the
steel sector.
Directors
ERKAN KAFADAR
Managing Director
MESUT GÜNEY
Production and Investments Director
OKAN AYDINGÜN
Finance and IT Director
GÜVENÇ TEMİZEL
Supply Chain and Innovation Director
SİNAN SÖZEN
Commercial Director
36
STEEL / FLAT STEEL
We attest the life by
taking place at houses,
offices and streets with
goods produced with
our flat steel.
STEEL
BORÇELİK
2014 HIGHLIGHTS
Came first place in the metal sector at the Bursa Chamber of
Commerce and Industry (BCCI), 2014 Those Who Add Value to
the Economy awards.
Opened the Borçelik Technical Academy in May 2014 with
18 instructors. Provided 87 training sessions in eight months in
12 training areas to 609 employees, with 67 personnel receiving
certificates. Launched the Vocational High School Teacher
Training project with the Bursa District Office of the
Ministry of Education.
Strengthened our focus on developing new products, services
and business models. Identified an innovative project out of
25 possibilities and this gained acceptance under TUBITAK’s
Industrial R&D Project Grant Program 15501. Other project
applications are under evaluation.
Borçelik remains as main supplier for the Automotive, White
Goods and Radiator Industries
Borçelik performs around 40% of Turkey’s cold-rolled sheet
and galvanized sheet exportation
Regarding visible surface productions for the top-quality
expectation of the automotive sector, we performed investments
at our galvanized and surface inspection lines; in compliance
with our focus on zero-defect production and zero problem
at the customers.
Our furnace investments, planned to be fully operational in
May 2015, are in progress that will provide energy efficiency and
a higher product quality.
We started to be active in new export markets during 2014.
According to ISO500 results, Borçelik is the 4th largest
industrial company in Bursa and the 28th in Turkey.
During 2014, we conducted 2,250 customer visits and
technical trainings combined for our customers.
Total Sales (K Tons)
HDG
CR
OTHER
1,345
PO
FH
1,369
1,358
1,352
702
690
720
467
473
470
174
175
178
20
16
14
2010
670
1,321
691
445
442
137
141
20
47
34
3
0,4
6
10
2011
2012
2013
2014
Export (K Tons)
MIDDLE EAST
253
147
67
EU
CIS
FAR EAST
206
223
119
103
OTHER
211
169
70
60
62
55
54
50
47
35
14
12
21
28 28
24
24
11
38
15
4
3
4
3
2010
2011
2012
2013
2014
STEEL / FLAT STEEL
A FELLOWSHIP OF
70 YEARS
TATA STEEL İSTANBUL
METAL SANAYİ VE TİCARET A.Ş.
STEPHAN FLAPPER
Managing Director
Production
Hot-dipped galvanized steel, cold-rolled annealed steel and
pickled and oiled hot-rolled steel, which are the inputs
for the industry.
Range of steel products consisting of commercial, drawing,
deep drawing, extra-deep drawing, bake-hardening, rephosphorized, HSLA (high strength low alloy), enameling and
dual phase.
Production Capacity
Total 1.5 million tons
Capacity distribution
600,000 tons cold-rolled steel
900,000 tons hot-dipped galvanized steel Sectors Served
Borçelik’s domestic major customer groups include producers
of household appliances, automotive main and subcontractor
industries, panel radiators, construction, color coating, pipes
and profiles, packaging, metal goods sectors and steel service
centers.
Location
Gemlik
In nature they call this symbiosis. I think
in real life we call this “friends”.
Borçelik is a successful supplier with high performance, quality
and service. While Borçelik understands our needs and offer
solutions accordingly, it also challenges us to meet the demands
of this competitive industry.
Borçelik is very important to our companies’ success and we
have developed a great partnership over the past years. Although
Tata Steel and Borçelik at corporate level could be considered
competitors, we have a sound cooperation. Both of us offer
services to highly demanding customers and do that with a
passion for high quality, great service and reliability. Borçelik as
a supplier of us is therefore makes a huge contribution to this
supply chain in providing outstanding products to our customers.
PARTNER
We trust Borçelik and collaborate freely. We work together in
many different areas. We have a strong partnership in which both
companies are always ready to help each other to grow and
improve. In nature they call this symbiosis. I think in real life we
call this “friendship”.
We much appreciate the business we have developed together
and hope to continue our friendship for many years to come.
39
STEEL
KERİM ÇELİK
Turkey’s largest steel service center in terms of processed
material volume.
The flat steel supplier of preference in Turkey for its customerspecific supply solutions and services.
Strategic partnership with ArcelorMittal, world leader in the
steel sector.
2014 HIGHLIGHTS
Istanbul and Bursa production plants were merged under the
Bursa branch in 2014 to improve efficiency.
41% growth in sales tonnage volume at the Adana branch.
2,832 visits to customers.
Business Area
Kerim Çelik became the first domestic company to provide
world-class service to the Turkish steel industry when it launched
its steel service center.
Products and Services
Product range: coils, hot rolled steel, pickled and oiled hot rolled
steel, cold-rolled steel, hot dipped galvanized steel, pre-painted
steel, electrical steel and special coated steel in slitted coils
and sheets.
Production Capacity
Production capacity of 500,000 tons
Capacity distribution
Manisa plant: 130,000 tons
Bursa plant: 340,000 tons
Adana plant: 30,000 tons
Sectors Served
White goods main & subcontractors, automotive subcontractors,
construction, machinery and spare parts industries,
radiator, lighting, heating and ventilation, furniture accessory
manufacturers, cable channels & fittings, pipe profile and
other industries.
Service Locations
Headquarters: Istanbul.
Production plants: Manisa, Bursa and Adana.
Regional sales representatives: Ankara and Antalya.
Sales by Year (K Tons)
600
500
400
300
416
Directors
438
380
371
367
200
100
2010
40
2011
2012
2013
2014
A. KEREM ÇAKIR
Managing Director
H. BURÇIN FALAY
Support Functions Director
STEEL / FLAT STEEL
A FELLOWSHIP OF
70 YEARS
SIEMENS
HÜSEYİN GELİŞ
CEO and President in Siemens
As Borusan expands,
it paves the way
for the growth and
development of its
business partners.
Siemens and Borusan have similar corporate cultures and values.
The similarities include long-term thinking, and concern for quality,
technology, innovation, productivity and sustainability. I have
always felt these similarities in our corporate cultures and in our
companies’ directors. Therefore, I have never felt like an outsider
when working with Borusan.
Borusan Group aims to grow and its basic principles are sensitivity
to the environment, contributing to society, and respecting human
rights. One of Turkey’s largest business groups, it achieves its goal
of increasing added value for the country through its international
investments while making profit.
Borusan’s greatest asset is its managerial staff, which is open to
change and forms long-term goals. The staff makes the principles
of Borusan Group’s founders compatible with the requirements
of the day and takes the company to even greater heights. In this
way, as Borusan expands, it paves the way for the growth and
development of its business partners.
PARTNER
Istanbul and Bursa
production plants
were merged under
the Bursa branch
in 2014 to improve
efficiency.
Siemens’s success depends on customer satisfaction. Our
customers’ satisfaction rises when we deliver the highest quality
product, at the most reasonable cost and on time. Borusan is the
main supplier at our plant in Gebze, which exports to 80 countries.
Any technical breakdown, delay or quality problem impacts
Siemens customers in 80 countries. By forming a business
partnership with Borusan, we are sharing a responsibility for
ensuring the satisfaction of our customers.
We solve whatever issues arise when working with Borusan
through the Borusan team’s professionalism, proactiveness and
open communication. Siemens and Siemens customers rely on
Borusan’s ability to create solutions and this is one of Borusan’s
most important attributes.
41
We accompany you
on this never-ending
journey, ensuring
the joy and passion
continues.
DISTRIBUTORSHIP
AUTOMOTIVE
BORUSAN
OTOMOTİV &
BORUSAN OTO &
BORUSAN
OTOMOTİV PREMIUM
KİRALAMA
Directors
EŞREF BİRYILDIZ,
Chairman of the
Executive Committee
ALİ VAHABZADEH,
Board Member Vice Chairman
of the Executive Committee
AYHAN ÖLÇER,
BMW Group Sales &
Marketing Director
M. KERİM KAZGAN
Finance & Administrations Director
SİMAY ALSAN
Aftersales and Logistics Director
UĞUR SAKARYA
Borusan Oto Managing Director
KAĞAN DAĞTEKİN
Borusan Otomotiv Premium Kiralama
Managing Director
Borusan Otomotiv is the Distributor of the premium brands
BMW, MINI, Land Rover, Jaguar and BMW motorcycles and is
positioned to;
- remain the first choice for automobile and motorcycle enthusiasts.
- offer unrivalled products and services that provide driving pleasure and joyful moments.
- invest in our present Sales and Aftersales networks and to expand them into additional provinces with new service points.
- ensure that each brand maintains its leadership of its respective segment by emphasizing customer satisfaction and loyalty, with a focus on new products and services.
Borusan Otomotiv owns a substantial part of the retail
functions under the name of Borusan Oto who has more than
50% share of the sales and aftersales services.
Borusan Otomotiv Premium Rent is a leading player in
premium car rental segment possitioned to;
- provide quality driven operational leasing services,
- establish a loyal and satisfied premium car lessee community by tailor made services.
43
DISTRIBUTORSHIP
BORUSAN OTOMOTİV & BORUSAN OTO &
BORUSAN OTOMOTİV PREMIUM KİRALAMA
2014 HIGHLIGHTS
Across the whole of its range of automobile brands, the
Borusan Otomotiv Group sold 28,452 automobiles and 598
BMW motorcycles.
BMW automobile retail sales reached its highest level in 31
years. With sales of 26,174 units, BMW retained its leadership of
the premium segment. Thus Borusan Otomotiv has dominated
the segment for 27 out of 31 years, including four consecutive
years to date.
Turkey was, again, BMW’s largest single market worldwide.
Land Rover maintained leadership in the 1.6-liter-plus premium
SUV segment with sales of 1,207 units.
Sales of MINI reached 1,071 units.
598 BMW motorcycles were sold.
New investments boosted sales in the used car division by
77.5% to 6,094 automobiles.
Customer Satisfaction and Loyalty ratings across all brands
and authorized dealers on sales were 93.8% and 87.14%,
respectively, and on after-sales 89.19% and 77.1%, respectively
Borusan Otomotiv Services’ retail parts sales and labor
turnover for all brands reached €117.16 million.
In the Top Gear Awards competition, in the UK and Turkey, the
BMW i8 won the global Car of The Year award, the BMW 220d
won Coupe Automobile of the Year, and the BMW 218i Active
Tourer won Family Automobile of the Year.
At the A.L.F.A. Awards for complaint management,
44
Borusan Otomotiv won the Best Automobile category with its
BMW brand.
40% of 2014 sales were financed through Premium Finance a 5% increase in individual loans over the previous year.
Sales of the BMW Service Inclusive after-sales service package
approached 20.5% of new automobile sales; sales of car
insurance equaled 32% of Borusan Otomotiv sales.
Borusan Otomotiv Premium Kiralama expanded its fleet with
1,433 new cars in 2014, marking a 28% increase in its vehicle
fleet leased on a one-year basis and bringing its total to 2,517
vehicles. In addition to selling 855 vehicles, it successfully
launched Rent•Ease, a product that allows shorter term,
personal leasing. As a result, 20% of total business was carried
out through showrooms. Annual revenues, €25 million of which
were derived from leasing and €29 million from used car sales,
reached €54 million, a 56% increase over that of the previous
year.
Borusan Oto completed and opened Borusan Oto Ataşehir, its
first showroom on Istanbul’s Asian side.
Borusan Oto Avcılar MINI and Used Car showrooms moved to
new locations in the expanded Avcılar facilities.
Borusan Oto Avcılar Used Car has a 100-vehicle covered
showroom, making it Turkey’s largest BMW Premium Selection
sales point.
DISTRIBUTORSHIP
AUTOMOTIVE
Borusan Otomotiv Wholesale Sales (units)
Borusan Otomotiv Retail Sales (units)
30000
30000
27000
24000
24000
23,585
21000
23,180
21000
18000
18000
15000
28,452
27000
28,761
18,727
18,457
15000
15,349
18,892
18,595
2011
2012
15,057
12000
12000
9000
9000
6000
6000
3000
3000
2010
2011
2012
2013
2014
2010
2013
2014
Borusan Otomotiv Sales Turnover (million €)
BMW Motorcycle Wholesale Sales (units)
1000
939,1
598
900
800
700
700
600
661,1
600
598
500
453
400
300
741,3
441
458
500
548,1
400
348
300
200
200
100
100
2010
630,4
2011
2012
2013
2014
2010
2011
2012
2013
2014
45
DISTRIBUTORSHIP
BORUSAN OTOMOTİV & BORUSAN OTO &
BORUSAN OTOMOTİV PREMIUM KİRALAMA
A FELLOWSHIP OF
70 YEARS
DERİNDERE
AYTEKİNHAN YILDIRICI
CEO
Borusan’s investment in people and
technology, and their desire to do the best
job possible inculcates enormous respect.
I have followed Borusan’s industrial and nonindustrial development throughout my 45
years of business life. Borusan’s investment in
people and technology, in particular, inculcates
enormous respect. We also greatly admire
Borusan’s investment in social responsibility
projects.
Borusan is a model company in my estimation.
I learn from what valuable companies like
Borusan do and I apply the lessons to my
own business. Borusan is clearly a model
company that takes exemplary industrial and
technological steps in all its areas of business,
not only in the automotive sector. Therefore,
I am sure that we are not alone in reaping
benefits by working with Borusan; so will
anyone doing business with the company.
I monitor Borusan’s improvements to process
A FELLOWSHIP OF
70 YEARS
management and results.
While the importance of 6 Sigma projects has
yet to be fully recognized in Turkey, Borusan
has set up project teams and taken steps to
perfect company operations. This is vision.
A company carrying out 6 Sigma projects
naturally has advanced technologically, too.
We can see this in Borusan. They have been
able to achieve successful results by keeping
up with technology.
How does a company in business for 70 years
continue to thrive and, what’s more, retain
respect? In 70 years in Turkey, policies have
changed, governments have come and gone,
yet Borusan has continued to prosper while
remaining committed to its own way. I believe
that underlying this is long-term planning and
an emphasis on professionalism.
SABANCI HOLDING
ZAFER KURTUL
Board Member and
CEO
Borusan is
a successful
business
partner with
a strong
professional
attitude. It
is open to
improvement
and innovation,
and it adds
value to our
business.
46
Having confidence in your partners is crucial in the business world.
Under today’s conditions, meeting customer expectations rapidly and
being solution-focused adds value to our business, speeds up our
processes and, as a result, reinforces our confidence. At the end of
the day, the most important advantages of working with Borusan the confidence we have in them, the quality of their service and their
innovative approaches – boost our competitive advantage.
The value they create for our business is another crucial factor. The
major reason we choose Borusan is that they accurately perceive
and analyze customer needs and expectations, and they are
professional. They are readily available, respond rapidly to requests,
and they are innovative, all of which have a favorable impact on our
business.
Borusan is a successful business partner with a strong professional
attitude. It is open to improvement and innovation, and it adds value
to our businesses.
DISTRIBUTORSHIP
AUTOMOTIVE
A FELLOWSHIP OF
70 YEARS
1984 becomes BMW’s Turkey distributor
1985 becomes BMW motorcycle’s Turkey distributor
1998 starts Land Rover sales and aftersales services
2001 becomes MINI’s Turkey distributor
2008 founded Borusan Oto Kıbrıs Ltd. Land Rover
2010 last quarter became Aston Martin’s Turkey distributor
2014 last quarter became Jaguar’s Turkey distributor
Today, distributor of BMW, BMW motorcycle, MINI, Land
Rover, and Jaguar.
Passenger cars and 4x4 vehicle sales, premium selection
used cars, motorcycles, parts, after-sales services, and longterm automobile leasing and diplomatic car sales.
Dealer Network
Borusan Otomotiv has 21 authorized dealers and 30
authorized service centers across all seven of Turkey’s
geographical regions to provide sales and after-sales services for
its products
Functioning as a Borusan Otomotiv dealer, Borusan Oto has
sales and service centers in the Avcılar, İstinye and Dolmabahçe
districts in Istanbul, as well as operations in the Esenboğa,
Çankaya, Birlik and Balgat districts of Ankara, plus one each in
Adana-Mersin area and in Gaziantep.
ING BANK
SEÇIL REFIK
Assistant Managing
Director for Human
Resources and
Communications
“Borusan’s commitment
to high service quality
makes our job
significantly easier.”
ING Bank collaborates with Borusan to maintain its fleet of
automobiles. Our fleet consists of vehicles distributed by Borusan
Oto. Borusan’s commitment to high service quality makes our
job significantly easier. This commitment to service quality goes
beyond the positive and constructive stance Borusan takes during
the sales process to include their after-sales service. This gives us
the confidence to count on them to meet whatever needs might
arise.
The service we receive during periodic maintenance and repairs
is crucial to our good customer experience. The rapid, resultsoriented attention we obtain from authorized service centers adds
value for us. When we get rapid service, our business continues
problem-free with no loss of time.
Borusan’s capacity to provide rapid solutions is only one reason
we work with them. Borusan also helps us to avoid problems
by giving prior notice of our vehciles’ maintenance schedule
and offering us rapid solutions. They are particularly good at
anticipating the problems that can arise during seasonal changes
and informing us. We would like to see this valuable approach in all
of our business partners.
PARTNER
Giwa Holding GmbH
% 50 - % 50 Equal Joint
Venture
Borusan is a competent business partner with a corporate attitude
that instills confidence. It is always ready to help when the need
arises.
47
DISTRIBUTORSHIP
We provide power
and performance to
the vehicles which
connect people and
the engines plowing
the field, with our
engine valves
and parts.
SUPSAN
Leader of the domestic OEM and aftermarket
segments.
Turkey’s biggest engine valve manufacturer.
A provider of integrated solutions with new
products in the aftermarket segment.
Director
SALİH ALSON
Managing Director
48
DISTRIBUTORSHIP
OTHER AUTOMOTIVE
DISTRIBUTORSHIP
SUPSAN
2014 HIGHLIGHTS
Manufactured 4.98 million units and sold 4.93 million units.
Sold 1.37 million units in the domestic aftermarket.
Established a partnership in the independent OEM segment
with YaMZ, a major Russian engine manufacturer. With this
new customer, achieved record exports of 430,000 units to
independent OEM and aftermarket segments.
Initiated valve sales for Daimler CNG and Volvo truck engines
through Eaton distribution channels.
Achieved a 96.6% rating in Eaton shipping performance.
BMW, Fiat and YaMZ audits were succesfully completed.
Raised customer satisfaction index from 76% to 83% and
customer loyalty index from 76% to 82%.
Began to produce the turbo product (part of the innovation
project) and launched sales. Invested in the camshaft production
line for production to start in 2015.
Started aftermarket sales of products 113 new valves and 131
new non-valve references.
Achieved record sales of US$ 3.33 million in non-valve sales.
Exceeded previous year’s sales of camshafts, gaskets, engine
bearing, valve lifters and cylinder heads. Succesfull launch year
for timing chain set.
Held 45 small training meetings and 36 apprentice training
meetings as part of the domestic marketing strategy, with 2,500
people attending these meetings.
Excellent purchasing performance.
Reached the highest quality performance criteria values within
last years, in parallel with the rate of progress on Lean Six Sigma
and TPM. Under existing conditions, the productivity is so high
as to dampen the costs.
Capacity and Production (million units)
Capacity
Production
10,0
10
10,0
10,0
10,0
10,0
9
8
7,5
7
7,1
6,4
6
5,3
5
5,0
4
3
2
1
2010
2011
2012
2013
2014
Yearly Valve Sales (million units)
8
7,3
7
6
7,0
6,4
5,3
5
4,9
4
3
2
1
2010
50
2011
2012
2013
2014
DISTRIBUTORSHIP
OTHER AUTOMOTIVE
A FELLOWSHIP OF
70 YEARS
Sales (million units)
2010
2011
2012
2013
2014
5
4
3,7
3
2,8
2,2
2
2,9 2,9
2,0
1,6 1,6
1,6
1,3
0,9
1
3,8
1,4 1,4
0,7
Original Equipment
Spare Parts
GERMANY
FRANCE
ROMANIA
9%
3%
2%
2%
3%
EATON
CARLO GHIRARDO
Vice President and
General Manager,
Engine Air Management
Product Group, Eaton
Vehicle Group
Export
Value Export Distrubution by Country
ITALY
“Together we have
faced business
challenges through
which I have valued
their commitment to
finding solutions and
maintaining our long
standing professional
relationship.”
USA
RUSSIA
Eaton has been doing business with Supsan since the 70s.
Supsan is a supplier of engine valves to Eaton, manufactured and
supplied under an Eaton license agreement since 1970, making
Supsan a partner in the production and supply of low to medium
volumes business.
Through our licensing agreement, Supsan plays an important
role in ensuring that Eaton can meet the customer’s needs in
many markets. Likewise, the license agreement grants Supsan
technology and support and allows them to develop their
business beyond Eaton.
81%
Supsan is one of the top 20 supplier to Eaton VG EMEA.
Despite the license arrangement Supsan is managed as any
other supplier, with the same expectations for quality, delivery
and cost competitiveness. Together, we have faced business
challenges through which I have appreciated their commitment to
finding solutions and maintaining our long standing professional
relationship.
51
DISTRIBUTORSHIP
SUPSAN
Business Area
International expertise in engine part production and aftersales
services for original equipment and aftermarket.
Valve production for internal combustion engines under license
from Eaton SrL, the leading global manufacturer.
Production Capacity
10 million valves per year.
4 million-unit capacity in stellite valves and a 5.5 million-unit
capacity in two-piece valves.
Sectors Served
Domestic and international original equipment manufacturers
and aftermarket customers.
Service Points
Headquarters: Halkalı Plant.
Domestic OEM: Ford Otosan, Oyak-Renault, Türk Traktör,
Tümosan, Başak Traktör, Yavuz Mühendislik, Anadolu Motor.
Domestic OES: Ford Otosan, Renault-Mais, Tofaş-Fiat, New
Holland Trakmak, Iveco, Anadolu-Isuzu, Otokar, Temsa, Karsan,
DAF – Tırsan
Independent Aftermarket: 100 dealers.
International OEM and OES: Fiat, Peugeot-Citroen,
Renault, Ford, Ferrari, Porsche, Bentley, Aston Martin, Nissan,
Volkswagen, Audi, DAF, Volvo, Volvo Penta, Iveco, Isotta
Fraschini, Mercedes - Benz, VM Motori, General Motors, Daimler
Chrysler, John Deere, Detroit Diesel, YaMZ.
52
DISTRIBUTORSHIP
OTHER AUTOMOTIVE
A FELLOWSHIP OF
70 YEARS
FORD OTOSAN
VEDAT OKYAR
Truck Business Unit
Purchasing Group
Manager
We believe that
Borusan is a reliable
and supportive Holding.
Ford Otosan not only purchases engine valves
from Borusan but also works with the company
on logistics services, port management and
flat steel supply. We greatly admire and respect
Borusan Group. My professional relationship
with Borusan is about the valve business. Ford
Otosan purchases engine valves, from Supsan,
which are consumed in its engine assembly
line. We believe that Borusan is a reliable and
supportive Holding.
and trustworthy group. As being business
professionals who are in contact with Borusan,
we see just how true this is. We know that if we
have a problem, Borusan team is there to help.
This has nothing to do with quality; we’ve never
had this problem with Borusan. For instance,
when our production program changes, despite
the fact that producing a valve takes a long time,
they are able to come up with what we need for
our engine assembly line.
In matters of purchasing, reliability is one of the
most important criteria. One vehicle is produced
in every 1.5 minutes; a 1.5 minute interruption
means the loss of one vehicle. Therefore, oneday delay of the shipments from the supplier
means the loss of around 1,000 vehicles. It’s not
easy to recover this loss. Hence, it is very crucial
for us to trust the supplier which we work with.
Borusan is well known as a highly reputable
Borusan and Koç are both professionally
managed holdings. Ford is the same as well.
Sharing the same management principles, we
work in harmony. We also purchase different
parts from the leading suppliers of the world
outside of Turkey and don’t see any difference
between their sales teams and Borusan’s.
Borusan has a contemporary and modern
management.
53
DISTRIBUTORSHIP
OTHER AUTOMOTIVE
We bring people
together on a
common platform
to compound
the strength.
MANHEIM
Maintaining steady growth as a customer and technologyoriented company that provides our clients with innovative
physical and online solutions in the used-car auction business.
Creating pioneering purchasing models and business lines in
the automotive sector.
Director
ZAFER TERZİOĞLU
Managing Director
55
DISTRIBUTORSHIP
MANHEIM
A FELLOWSHIP OF
70 YEARS
OTOKOÇ OTOMOTİV
İNAN EKİCİ
Deputy General Manager
Car Rental
Whatever new
country we
invest in, our first
call is Borusan.
Actually, this is
collaboration,
not trade.
Throughout the last ten years I have worked at Otokoç in leasing
I’ve been collaborating with Borusan. On every visit to Borusan,
I see a cheerful face focused on providing the customer with
the best service. I like to say, I see the entire team as if it were
dancing on the job. From the security guard to the after-sales
representative, it’s a company that carves its vision into the
industry with the quality of its service and the brands it represents.
I think that this must be the result of its 70 years
of experience.
Our relationship with Borusan consists of more than just car
leasing. It became apparent once we began doing business
together that our cultures were converging. The trust and
friendship we developed has grown. We lease other product
brands besides BMW obtained from Borusan Holding. What’s
more, we have expanded beyond Turkey. Whatever new country
we invest in, our first call is Borusan. Actually, this is collaboration,
not trade. Therefore, we discuss ways of adding value to each
other. Creating value through long-term collaboration is a key
point. We have been fortunate to achieve this with Borusan.
The benefits of assimilating two cultures are enormous. The
value both our companies place on the arts, social responsibility,
respect for employees, and concern for the environment
is similar.
The company has achieved technological excellence in all it does.
Its organizational structure focuses on technology and it draws
maximum benefits from this. I sincerely believe that Borusan, as a
company that adds value to people in general and its customers
in particular, will succeed for another 70 years.
56
2014 HIGHLIGHTS
Grew sales 14% from 15,360 to 17,446 units.
Boosted cash profit 26% from $1.9 million $2.4 million.
Established Otomax.com, direct purchase system of used
cars from end users.
Established a pricing system that is 95% automatic and 98%
error free.
Grew customer volume 29%.
Added 209 selling customers to the supply channel.
Held highly successfully heavy construction equipment
auctions that were much celebrated in the sector.
Expanded physical capacity at the Tuzla headquarters.
Raised sales volume in the dealer segment by 49% from 3,500
to 5,200 units.
Boosted sales volume in the corporate fleet segment by 81%
from 1,600 to 2,900 units.
Member Dealer Number
4000
3,550
3000
2,756
2,376
2000
1,335
1,835
1000
2010
2011
2012
2013
2014
DISTRIBUTORSHIP
OTHER AUTOMOTIVE
Auction Sales (units)
A FELLOWSHIP OF
70 YEARS
20000
17,446
18000
16000
ASIM BEKDEMİR
Business Owner
15,360
14000
12000
ASIM OTOMOTİV
12,745
11,031
10,640
10000
8000
6000
4000
2000
2010
2011
2012
2013
2014
Products and Services:
Private Auction
Inspection and pricing of domestic and imported secondhand motor vehicles, logistic support for vehicle transportation to
special auction sessions, and facilitation of all buying and selling
transactions by handling documentation and financial transfers
Sales of all automobile brands
Weekly private auctions for member dealers from many cities at
Manheim Türkiye’s Tuzla and Ankara facilities
Direct purchase platform from end-users (Otomax.com)
Online Sales Systems
Simulcast
CyberStock
CyberAuction
Mobile Auction
Service Locations:
Headquarters: Istanbul-Tuzla (Manheim and Otomax.com
service location)
Branch: Ankara-Esenboğa (Manheim and Otomax.com service
location)
Istanbul Seyrantepe (Otomax.com service location)
Istanbul Yenibosna (Otomax.com service location)
PARTNER
Borusan Manheim is a powerful,
confidence-instilling company.
I have been working with Borusan Manheim for seven years
without a hitch. It’s a major company that instills confidence. It
meets all our needs easily. We sell our vehicles fast and we buy
cars for sale elsewhere. Therefore, we do business exclusively
with Borusan and this is an excellent arrangement for us.
We have a strong, problem-free relationship with Borusan
Manheim. The people who work there – from the service
personnel to the general manager – are carefully selected,
high-quality people who know their jobs. The company’s family
atmosphere is reflected on its staff. All employees work with the
awareness that they are part of this respected family and they
make us feel this, too.
Borusan Manheim continuously strives to improve and develop.
I believe this has a major impact on the increase in demand,
sales figures and speed in recent years.
For example, cars can be auctioned over the Internet. When
there are public auctions in cities like Antalya, Izmir and Ankara,
that we cannot physically attend, we participate online. This
system facilitates buying and selling cars throughout Turkey.
People from all over Turkey can buy cars online by first looking
at inspection and checking lists. They can then have them
delivered. This is a service that boosts and expands the usedcar business.
Because Borusan Manheim can readily and rapidly meet all my
needs and I am satisfied with their services, I work exclusively
with Borusan Manheim.
57
DISTRIBUTORSHIP
BORUSAN
MAKİNA
ve GÜÇ
SİSTEMLERİ
Leadership in heavy machinery and power systems in Turkey
and Central Asian countries since its establishment
A solution partner to customers with the RUN Concept, which
provides different options for new and used machine or rental
operations
A business partner who provides solutions and creates value
with different products in customer support functions, along with
its unique customer support set-up in after sales services
Became one of the most important players in the mining
sector with the broadest product range after Caterpillar’s
acquisition of Bucyrus
Fully integrated, comprehensive Connected Site Solutions for
construction industry and heavy construction machinery fleets,
with SITECH Eurasia company
The most preferred supplier, offering extended package
solutions and alternatives oriented towards customers’ needs,
with the new engine products (EMD, CAT Propulsion) added in
its product range
Turn-key contracting solutions (EPC): electrical & automation
system integration, mechanical packaging, added value
engineering services, and a solutions partner with specialized
electro-mechanical EPC contracting capabilities. Offers
comprehensive solutions from a single point with supplementary
products offered under the umbrella of the registered trademark
BESys
58
Directors
ERCÜMENT İNANÇ
Executive Committee Chairman
MURAT ERKMEN
Turkey Managing Director
ÖZGÜR GÜNAYDIN
International Business and Mining
Managing Director
ÖMER LÜTFÜ METİ
Investments and Development Director
ASLAN HİÇSOLMAZ
Finance Director
İ. TOLGA AKAR
Executive Committee Member, Power
Systems and BESys Managing Director
T. SERKAN BAYRAMOĞLU
Executive Committee Member, Human
Resources Director
DISTRIBUTORSHIP
MACHINERY and
POWER SYSTEMS
Our machines
build the bridges,
roads and cities
through which the
life flows .
DISTRIBUTORSHIP
BORUSAN MAKİNA VE GÜÇ SİSTEMLERİ
2014 HIGHLIGHTS
Achieved revenue of €202 million on the sale of 1344 units
of new machinery. Delivered 211 machines for the Third Airport
Project, Istanbul.
Kazakhstan operations reached revenues of US$105 million;
market leadership in Customer Support was also achieved.
Remained the most preferred company in the rental business
with a revenue of €9.7 million; increased fleet value by 20% to
€51 million.
Sold 505 units of used equipment, generating revenue of
€29 million, a performance that exceeded expectations in
terms of units and of revenue; making a major contribution to
the expansion of the new machinery market. Held Turkey’s first
used-machinery public auction at the Used Machinery Sales and
Rentals Center in collaboration with Manheim. Gained Five-Star
certification in the Caterpillar Used Operation Certificate review a rare achievement for dealers in the Europe, Africa,
Middle East region.
SITECH Eurasia achieved 2014 revenues of US$1.5 million in
Turkey, Kazakhstan and overseas projects, providing machine
control and guidance systems and technology solutions to
project sites of the contractor customers.
Sold a 17.2 MW cogeneration power system, the highest
output level ever, and a 67.5 MVA diesel energy power plant as
a turn-key delivery project. Nearly 20 power system units were
rebuilt at the BP Sangachal terminal in Azerbaijan; also leasing
for 4-5 months at the same location.
Sold 480 retail generators, a record in power systems
operations and twice the number sold in 2013; Kazakhstan
operations were chosen as one of the best CAT representatives
out of 186 dealers in the world.
Turkey Customer Support sales reached €67 million. In the
area of Equipment Management, 2,968 machines had active
maintenance agreements while 950 of machines had condition
monitoring agreements; the number of machines monitored
through Product Link reached 4,767.
The Turkey and Kazakhstan service operations achieved
the Service Gold Level for the fourth consecutive year in the
Caterpillar Service Excellence evaluation. Achieved five-star level
workshop contamination control at its Azerbaijan operation.
Borusan received four Best Application awards for its
Component Rebuild Center (CRC) in Kazakhstan, the first and
only of its kind in Eurasia. The first CAT-Certified Machines were
rebuilt at the Karaganda CRC plant.
60
DISTRIBUTORSHIP
MACHINERY and
POWER SYSTEMS
CAT Group Sales (US$ million)
Domestic Heavy Machinery Market (Units)
12
11,437
11
10,785
10
10
10,070
9
9,044
8
8
6
6,560
5
5
4
4
3
3
2
2
1
2010
2011
2012
2013
2014
Machinery Group Sales-Turkey (€ million)
1
866
2013
2014
605
2010
2011
2012
7
300
327
305
310
298
250
6
4
232
3
100
2
2010
2011
2012
624
2013
2014
1
651
654
2013
2014
574
5
150
50
863
802
CAT Group Sales (€ million)
350
200
799
7
7
6
9
430
2010
2011
2012
61
DISTRIBUTORSHIP
Power Systems Group Sales All Countries (€ million)
Group Sales Central Asia (US$ million)
2010
2011
155
150
150
125
145
157
100
100
81
81
111
90
124
114
92
80
50
81
40
25 24 28
25
8
2
2010
2011
2012
2013
2014
Machinery Group Sales Volume (units)
Central Asia (Machinery and
Agricultural Equipment)
448
Turkey (Machinery)
622
249
1,669
1,548
2011
2012
953
2010
Machinery
4
6
1
Agricultural
Equipment
5
Power
Systems
Group Sales by Regions (%)
Turkey
Kazakhstan
Other
6%
540
470
62
160
75
50
25
2014
137
125
75
2013
172
175
175
2012
1,521
1,344
2013
2014
32%
62%
After Sales
Services
DISTRIBUTORSHIP
MACHINERY and
POWER SYSTEMS
A FELLOWSHIP OF
70 YEARS
Field of Activity
Dealer for Caterpillar in Turkey since 1994.
Caterpillar’s sole representative in Azerbaijan, Georgia,
Kazakhstan and Kyrgyzstan, as well as in Turkey.
The sole representative in Turkey of Metso Nordberg, the
World leader in mobile crushers and screener units; Mecalac,
the firm offering innovative, compact solutions for heavy duty
machinery; Mantsinen port cranes; Genie brand personnel lift
platforms; and Exxon Mobil products.
The representative of heavy fuel oil MaK marine engines with
medium range revolution, EMD engines
Olympian diesel and gas generator sets and SPX ClydeUnion
pump brands.
Electro-mechanical contracting solutions in energy and
industry facilities.
The representative of the SEM brand in all locations.
SITECH is the distribution channel of Trimble Navigation’s for
Heavy and Highway Construction Site Technologies Solutions.
SITECH is serving contractors holding from single unit to large
mix fleet of various OEM branded earth moving equipment.
We provide the
power to ensure
uninterrupted
dynamism.
BOGATYR KOMIR LLP
USIK SERGEY
GRIGORIEVICH
“Borusan Makina
Kazakhstan
surprised me by
keeping and even
improving the skills
of its employees.”
We started to work with Borusan in 2004 when top-management
realized our need to upgrade our coal mining technology. This
meant replacing machinery and our first choice was Caterpillar.
Borusan Makina Kazakhstan gave us excellent support, especially
when it comes to service maintenance and implementing the
technology in the production process. Thanks to Component
Rebuild Centre (CRC), we don’t waste money on new spare parts
more often than it is necessary. The equipment operates reliably
after such restorations.
We have established a successful level of cooperation over these
10 years. Our relations extend beyond spare parts supply, services,
and repairs, to a wider relationship. For example Borusan joins
us for our professional celebration – Miners’ Day. I would like to
express my special gratitude for this.
We attended lectures on 6 Sigma Methodology at Borusan
Makina’s Istanbul headquarters and decided to implement this
methodology in our production process. Bogatyr Komir LLP is
satisfied with this decision because it has brought tangible results
in the form of cost savings.
Often our subcontractors lapse into a relaxed attitude or increase
prices to levels that hinders future work together. Borusan Makina
Kazakhstan surprised me by keeping and even improving the skills
of its employees. Meanwhile, the qualifications of the people we
work with keeps getting better.
63
DISTRIBUTORSHIP
Machinery sales and after sales support services
Provides customers with low-cost and increased efficiency
through new machines and those less than two years old, plus
components, under rental arrangements
The “Certified Used Concept” supplies a unique warranty
service for used equipment in Turkey
Energy systems applications such as diesel and gas motorcogeneration, mechanical power applications (pump stations,
compressor systems, etc.) and emergency generators and
power systems
Biogas and landfill turn-key energy plants
Marine systems for main and auxiliary engines
Used and rental generator business
Static and dynamic UPS
Electrical systems and automation systems integration in
energy and industrial contract projects with BESys brand,
supplementary products and services within the scope of
mechanical packaging
SITECH Eurasia machine dispatch and control systems,
which are compatible with all kinds of machine brands in the
construction industry
64
Sectors Served
General and heavy construction, mining, agricultural and
industrial sectors.
Textiles, steel, chemical, medical, ceramics, wood industry,
automotive, plastics and food sectors.
The energy sector, including business centers, hotels,
hospitals, airports, universities and public housing.
Municipalities, provincial, special administrations, as well as all
other public institutions via the State Supply Office.
Marine sector-related solutions offered to builders of tugboats,
mega yachts, motor yachts, cargo ships and sea busses.
Transportation projects in the construction sector such as
highways, railroads and airports, utilizing the products and
services provided by SITECH Eurasia, as well as corporate,
industrial and housing projects.
Service Locations
Borusan Makina ve Güç Sistemleri is headquartered in
Istanbul, with regional offices in Adana, Ankara, Istanbul and
Izmir managing branches offering sales and technical services in
Antalya, Bursa, Diyarbakır, Trabzon and Trakya.
There are 45 service locations in Turkey and another 20 in
Kazakhstan, Kyrgyzstan, Azerbaijan and Georgia.
SITECH Eurasia is based in Istanbul.
DISTRIBUTORSHIP
MACHINERY and POWER
SYSTEMS
A FELLOWSHIP OF
70 YEARS
RÖNESANS
OKAN BAĞ
Electrical Projects
Manager, Turkey
Rönesans has operated in the construction
sector for 22 years. In the last eight years
that I have been at Rönesans, we have
actively worked with Borusan Makina
and Güç Sistemleri on nearly 90% of our
projects.
There are many reasons why we prefer
Borusan for our projects, the most important
one is that they are solution provider.
Borusan provides us engineering support at
every point. We can work jointly at all stages
on a project design. They conduct
analysis and offer solutions, depending on
the project. Then, at the purchasing stage,
they provide us more reasonable proposals
based on their special pricing policies.
“Borusan quickly responds
to our requests and they are
always there for us.”
It is also worth to talk about their after
sales operations. At this stage, they quickly
respond to our requests and make us feel
like they are always there for us. When we
have a problem, they solve it quickly and
effectively. These are the prior reasons
why we prefer Borusan. We haven’t
experienced yet a problem related to the
electricity cut that is another important
factor. Looking at error/claim records, we
are happy to see that we haven’t got a
malfunction to date.
We are pleased to work with Borusan and
will continue to work with them so
long as they meet our demands with their
sincerity, effectiveness and speed.
A FELLOWSHIP OF
70 YEARS
The mining sector needs numerous kinds of heavy machinery – like
quarry trucks, bulldozers and graders. Spare parts and technical
support are required to keep this machinery up and running and
these services must be provided on time to avoid lowering operating
performance and compromising work safety. Borusan Makina
ve Güç Sistemleri meets these needs. I thank Borusan for the
performance they have attained to date.
Borusan provides rapid and precise ways of making mining
operations easier and, therefore, it makes a major contribution to
our business. Borusan places greater importance on finding the
right solution for us than it does on sales and this is reassuring.
It is an extremely valuable business partner, not only because of the
performance of its machinery and its technical reliability, but also
because the company is attuned to what we need and it is aware of
the importance of mutual dialogue.
TÜPRAG
RIDVAN VEZİROĞLU
Mobile Equipment
Maintenance
Manager SERKAN YÜKSEL
Kışladağ Gold
Mine Manager
“Borusan places greater
importance on finding the
right solution for us than
it does on sales. This is
reassuring.”
For example, we needed spare parts and service support quickly for
the proactive solution we planned to introduce to the TA2 workshop
application. We consulted with Borusan on this and they gave us
their complete backing. They were incredibly helpful in planning
technical service workers and spare parts and minimizing
down time.
The performance of heavy machinery is critical for us and Borusan
is always there. Borusan is what has made the difference in keeping
our machinery up and running 98% of the time over 43,000 hours.
65
LOGISTICS
We cross seas and
travel highways
to deliver items of
labor and value to
the right place at
the right time.
BORUSAN
LOJİSTİK
One of Borusan Group’s strategic businesses since 2000
Leader of the logistics sector in Turkey; an important player in
global markets, particularly in Europe, the Middle East and the
CIS countries.
A fast growing business model that ensures sustainability
through productive and innovative projects
Ownership of a port, providing a significant competitive edge
through its strategic position
A Borusan Group company that creates synergy and drives
dynamism and growth.
Directors
KAAN GÜRGENÇ
Managing Director
SERDAR ERÇAL
Turkey Logistics Director
İBRAHİM DÖLEN
Port and International
Transportation Director
MUSTAFA ÖÇALIR
Foreign Countries Director
TUĞBA PAŞALI KARACAN
Organizational Development
and Support Functions Director
METE KALAYCI
Finance Director
HAMDİ ERÇELİK
ETA Managing Director
67
LOGISTICS
BORUSAN LOJİSTİK
2014 HIGHLIGHTS
Our wide range of services and expanding geographical
coverage has catapulted us to industry leadership in terms of
sales numbers. Concurrent with this leap, Borusan Lojistik has
maintained the value it created for customers with projects
designed to improve innovation and productivity.
We effectively used our extensive service network in Europe
in 2014.
We attained even greater access to the CIS and the Middle
East by consolidating lines there and connecting them to a
forwarding network.
By focusing on immediate and expeditious targets and
employing the segmented customer services approach, we
continued to raise the bar for service quality and customer
satisfaction.
Through the “supply chain solution partner” approach, we
added yet another innovation to our long line of services Borusan
Lojistik provides and we began to provide a logistics consultancy
service. With our new service, we are redesigning processes by
developing unique solutions for Borusan Lojistik customers.
Despite Turkey’s exchange rate fluctuations, on the basis of
the functional exchange rate for 2014 as a whole, the Company
achieved an 11.5% growth in sales in domestic logistics services.
Our high operational business volume meant we carried
out 3,000 loads a day, which made us the unrivaled leader in
land transportation. We developed solutions that provided our
customers flexibility and competitive advantage.
We differentiated our logistics practices and repositioned
ourselves by taking our services to chain stores, shopping
centers and SMEs, and we achieved success in these areas.
Based on the functional exchange rate, we had a growth in
sales of 80% in vehicle logistics center services. Today, Borusan
Lojistik handles one out of every three vehicles sold in Turkey.
We created a pioneering platform for SMEs through ETA, our
innovative brand which we launched in 2013, and continued to
provide services. We improved ETA visibility and consolidated its
place in the sector.
We came up with a product that would create a difference for
our e-commerce customers and we completed the infrastructural
preparations for a new innovation project designed to improve
our capabilities.
We engaged in effective resource and cost management to
ensure our sustainable success.
We acquired new customers from rapidly growing sectors
through our innovative and creative services.
We included SMEs to our target sectors and undertook
important projects with them.
We improved customer satisfaction and loyalty through
customer management segmentation on the basis of
service units.
68
Group/Non-Group Sales (US$ million)
Group Sales
Non-Group Sales
600
500
400
299
300
264
539
451
541
462
88
79
2013
2014
341
242
209
170
200
100
94
90
2010
2011
99
50
25
2012
Annual Logistics Sales by Service Line (US$ million)
UT Sales
3PL Sales
Port Sales
600
500
48
51
285
289
400
300
200
46
43
201
43
167
186
54
68
97
205
201
2010
2011
2012
2013
2014
100
LOGISTICS
A FELLOWSHIP OF
70 YEARS
“Given the quality of its
operations and service,
I see Borusan as a
company that advances the
entire sector.”
Ford Otosan and Borusan began working
together 10-12 years ago. We were looking for a
port to handle large steel rolls from Europe and
Borusan Gemlik Port is capable of doing just that.
Since 2014, Borusan has been running our port,
covering everything from A to Z. So, we have a
business relationship that is constantly growing.
Managing a plant-integrated port is not an easy
matter. It requires conducting a difficult operation
that races with time and must keep up the pace
so as not to interrupt production. One of the major
reasons we chose Borusan is its technology, and
in particularly its IT infrastructure. All our plant’s
manufacturing, port operations, and forwarding
must be interconnected with Ford’s European
production systems. Borusan’s IT structure instills
FORD OTOSAN
RECAİ IŞIKTAŞ
Logistics Director
MEHMET MEHMETOĞLU
İcra Kurulu Başkanı
confidence in us. They recommended using
RFID technology. This was a great leap for us
which raised our system to a higher technological
level. There is no other port in Turkey using this
technology – we are the first and only one.
The experience Borusan has acquired from its
Gemlik operations and the freight handling it
does for many brands in Köseköy is another
important factor. We work interactively with them
and engage in a mutual exchange of ideas, which
indicates their flexibility.
If any Turkish logistics companies emerge to
challenge the world’s logistics giants, Borusan
Lojistik will be one of them. Given the quality of
its operations and service, I see Borusan as a
company that advances the entire sector.
69
LOGISTICS
BORUSAN LOJİSTİK
A FELLOWSHIP OF
70 YEARS
ARZUM
T.MURAT KOLBAŞI
Chairman
Port Container (TEU)
Borusan is a
visionary company
that operates
systematically. It
thinks about not only
the shipments I need
the next morning or
in three weeks’ time,
but also the ones that
I will need in three
years.
250000
200000
195,194
2010
2011
218,399
227,064
2013
2014
189,099
100000
50000
0
2012
Port Vehicle Park (units)
300000
After-sales is also an important performance indicator for our
business. Replacement parts must reach our nearly 300 service
locations in time so that a mother whose mixer has malfunctioned
can make a banana milkshake for her child the next day. This is
where Borusan Lojistik is vital. Delivering that spare part on time
is essential to get our product functioning once again. Because of
the technological infrastructure the company provides, for instance,
I can immediately tell a dealer calling me today from Ankara then
and there where his product is. It puts us in a very strong logistics
position in the eyes of the dealer.
50000
I believe that brands leave an impression in people’s hearts and
minds. Borusan is a brand that creates value in the heart first and
then the brain because it is a strong, principled and dependable
company. Managing such a perception is the most difficult job a
brand has. Working with Borusan enhances the reputation of our
brand as well. I thank Borusan, from its founders to its employees
for this reputation.
193,320
150000
We have been with Borusan for the last ten of its 70 years. We are
Turkey’s best-selling small home electric appliance company. We
deliver nearly four million products from Çankırı, Izmir and Kayseri in
Turkey, and from China, in the Far East, throughout Turkey, and we
export to Europe, Asia, the Middle East and Australia. Logistics is
crucial to our organization because if we fail to deliver our product
to the consumer on time, we would be replaced by
a rival company.
Borusan is a visionary company that operates systematically. It
thinks about not only the shipments I need the next morning or in
three weeks’ time, but also the ones that I will need in three years.
70
300000
253,523
250000
200,936
200000
150000
142,064
164,250
154,891
2011
2012
100000
0
2010
2013
2014
LOGISTICS
Services
Borusan Lojistik focuses on the operational areas of port
services, international transportation services, and domestic
and international logistics services. It manages all these services
over a large geographical area thanks to its expertise and an
approach based on productivity and the creation of synergy
among all its services.
A new company in Oman was added to the group of 100%
Borusan Lojistik-funded companies that have been active since
2006 in the United States, Europe, North Africa, the Middle East
and the CIS countries.
Created as a result of the importance Borusan Lojistik places
on innovation, ETA is the first and only brand of its kind in Turkey.
ETA has an innovative business model through which it has
moved transportation services to an online platform and provides
services for SMEs.
Through its innovative approach, Borusan Lojistik has made
it services available through a new business model it has
developed for e-commerce. It plans to launch this new business
model sometime in 2015.
Industries Borusan Lojistik Services
The industries Borusan Lojistik provides services to include those
in the iron, steel, automotive and automotive supply, consumer
durables, fast moving consumer goods, chemical, advanced
technology, construction and container line sectors.
Points of Service
Head Office in the Kozyatağı district of Istanbul
Port in Gemlik
Offices in Güneşli, Tepeören, Kıraç, Gebze, Çatalca, Izmir,
Bursa, Ankara, Mersin
A 214,000 m² Vehicle Logistics Center in Köseköy, Izmit
77 land transportation offices, 15 transfer centers and a total
of 400,000 m² of storage space in Turkey.
A FELLOWSHIP OF
70 YEARS
BSH TÜRKİYE
NORBERT KLEIN
CEO and T-MEA-CIS
Regional Chairman
Every successful delivery
our business partner makes
reflects positively on us in
the eyes of our customers.
Borusan Lojistik has quickly risen to prominence, working with
BSH to monitor and analyze industry developments by using
various tools and techniques. Therefore, they understand and
think like us and find solutions to our needs.
When I examined the “Code Name: L6 Sigma” book that Borusan
sent me at the launch of 6 Sigma studies at BSH, I saw that we
were undergoing the same processes in the same way.
For us, Borusan is a member of the BSH Family just like our
dealers and service providers. Borusan distributes our products
to our dealers, even our customers, in many provinces. In other
words, it represents BSH. Therefore, every successful delivery our
business partner makes reflects positively on us in the eyes of our
customers. Borusan’s success impacts our entire performance by
being the final link in the chain connecting the quality we establish,
the advanced technology we use and the customer satisfaction
we achieve. It is a great pleasure for us to have maintained our
joint venture thus far.
Borusan’s corporate approach, honesty and professionalism
expands and develops our business. We have confidence in
Borusan.
71
ENERGY
BORUSAN
EnBW
ENERJİ
Aiming to become Turkey’s leading wind energy company.
Working towards an investment target of $3.5 billion by 2020.
Striving to be one of Turkey’s lowest cost electricity generators by
-Investing in the most efficient projects
-Establishing a flexible and reliable portfolio
-Employing cost-cutting technologies and methods in investment and operation
Focusing completely on renewable resources.
Creating a flexible portfolio of a variety of energy sources.
Taking an active role in the electricity generation and
sale sectors.
Playing a leading role in electricity trading.
Increasing total portfolio to 2,000 MW by 2020.
Directors
MEHMET ACARLA
Managing Director
MEHTAP ANIK ZORBOZAN
Finance Director
ENIS AMASYALI
Investments Director
72
ENERGY
Our sources of
renewable energy
is the light
unto today and
tomorrow.
ENERGY
BORUSAN EnBW ENERGY
2014 HIGHLIGHTS
Conducted the required positioning and design studies for
portfolio projects.
Completed the construction and assembly work for the
Balabanlı WEPP (Tekirdağ, 50 MW) and opened the plant for
operation on 11 July 2014. Held the official opening ceremony of
the Balabanlı WEPP on 11 September 2014.
Held groundbreaking ceremonies for the Fuatres WEPP,
Harmanlık WEPP, Mut WEPP and Koru WEPP projects (also on
11 September 2014), and expanded capacity at the currently
operating Bandırma WEPP – all under a 207 MW-wind energy
expansion investment plan formulated in 2013. Started
construction of all these projects. Laid foundations for the
capacity extension of the Bandırma WEPP and the erection of
the Harmanlık WEPP, Mut WEPP and Koru WEPP turbines.
Completed the application process for provisional approval
for the first eight of the nine turbines of the 27 MW-capacity
increase in the 60 MW Bandırma WEPP. Thus, the initial portion
of the Wind Bundle and the Bandırma WEPP Capacity Extension
projects became commercially operational. Raised Bandırma
WEPP’s capacity to 86.4 MW; raised our wind energy installed
capacity to 136.4 MW, and increased our total installed capacity
to 186.4 MW.
Conducted financial negotiations for the Wind Bundle projects.
Hidiv Elektrik Toptan Satış A.Ş. supplied Borusan Group
Companies with electricity in 2014. It continued supplying
electricity to Coca-Cola İçecek A.Ş., its first non-group customer.
Added Borçelik to the Borusan Group sales portfolio.
Existing Portfolio (743 MW)
Hydro
Wind
39%
61%
Target Portfolio (2.000 MW)
Hydro
10%
Wind
14%
Other
76%
PARTNER
Sectors served
Balancing Power Market
Eligible consumers (industrial and commercial customers that
consume 4,500 kWh/year or more)
74
ENERGY
BORUSAN HOLDİNG ANONİM ŞİRKETİ
AND ITS SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
AS OF 31 DECEMBER 2014 AND
INDEPENDENT AUDITORS' REPORT
BORUSAN HOLDİNG ANONİM ŞİRKETİ
AND ITS SUBSIDIARIES
TABLE OF CONTENTS
Page
Independent Auditor’s Report........................................................................................................... 81
Consolidated Statement of Financial Position.............................................................................82-83
Consolidated Statement of Profit or Loss and Other Comprehensive Income................................. 84
Consolidated Statement of Changes in Equity ................................................................................ 85
Consolidated Statement of Cash Flows.......................................................................................86-87
Notes to the Consolidated Financial Statements............................................................ 88-152
INDEPENDENT AUDITOR’S REPORT
To the Board of Directors of
Borusan Holding Anonim Şirketi
Istanbul
We have audited the accompanying consolidated financial statements of Borusan Holding A.Ş. and its subsidiaries (Borusan Holding and its Subsidiaries - together the “Group”),
which comprise the consolidated statement of financial position as at 31 December 2014, the consolidated statement of profit or loss and other comprehensive income, consolidated
statement of changes in equity and consolidated statement of cash flows for the year ended, and a summary of significant accounting policies and other explanatory information.
Group Management’s Responsibility for the Financial Statements
Group Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards,
and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement,
whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with International Standards on
Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the consolidated financial
statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend
on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those
risk assessments, the auditor considers internal control relevant to the Group’s preparation and fair presentation of the consolidated financial statements in order to design
audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control. An audit also
includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by Group Management as well as evaluating the overall
presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the consolidated financial statements give a true and fair view of the financial position of Borusan Holding A.Ş. and its Subsidiaries as of 31 December 2014 and of
their consolidated financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards.
DRT BAĞIMSIZ DENETİM VE SERBEST MUHASEBECİ MALİ MÜŞAVİRLİK A.Ş.
Member of DELOITTE TOUCHE TOHMATSU LIMITED
Istanbul, 4 March 2015
81
BORUSAN HOLDING A.Ş. AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS OF 31 DECEMBER 2014
(Currency - US Dollars (“USD”) unless otherwise indicated)
ASSETS
Notes
31 December 2014
31 December 2013
Current assets
Cash and cash equivalents 6
445,437,890 344,024,875
Trade receivables
7
521,577,173 402,445,906
Inventories
8
676,124,366 688,896,907
Other receivables and assets
9
154,146,336 113,720,431
1,797,285,765 Assets classified as held for sale
21
54,477,993
1,549,088,119
Total current assets 1,851,763,758 63,937,993
1,613,026,112
Non-current assets
Trade receivables
7
3,012,604 3,183,336
Available for sale financial assets
4,160,262 4,393,238
Property, plant and equipment
11
1,719,776,859 1,481,201,042
"Advances given for property, plant
and equipment"
1,307,332 1,693,453
Intangible assets
12
64,009,182 67,848,884
Goodwill
10
47,519,907 47,519,907
Investment in a joint venture
30
118,254,241 96,401,767
Deferred tax assets
17
4,224,019 1,059,146
Other receivables and assets
9
66,053,891 74,144,144
Total non-current assets 2,028,318,297 1,777,444,917
Total assets 3,880,082,055 3,390,471,029
The accompanying policies and explanatory notes on pages 88 through 152 form an integral part of the consolidated financial statements.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS OF 31 DECEMBER 2014
LIABILITIES AND EQUITY
Notes
31 December 2014
31 December 2013
Current liabilities
Trade payables
13
699,031,742 637,144,170
Short-term borrowings
14
594,792,928 543,766,379
Current portion of long-term borrowings
15
196,305,723 126,371,732
Income tax payable
17
9,424,480 11,660,912
Other payables and expense accruals
16
150,550,703 143,862,209
Total current liabilities 1,650,105,576 1,462,805,402
Non-current liabilities
Trade payables
13
53,943,534 68,210,651
Long-term borrowings
15
818,280,462 731,776,364
Employee benefits obligation
18
24,141,357 25,048,231
Deferred tax liabilities
17
113,808,244 91,717,120
Other payables, provisions and expense accruals
16
1,435,992 2,222,632
Total non-current liabilities 1,011,609,589 918,974,998
Total liabilities 2,661,715,165 2,381,780,400
Equity
Paid-in share capital
19
46,044,080 46,044,080
Currency translation reserve
(12,703,969)
7,837,158
Revaluation reserve, net 11
243,057,014 144,399,338
Cash flow hedge reserve
(128,547)
(484,799)
Actuarial gain / (loss) from
employee benefits
18
(1,515,389)
(1,602,320)
Legal reserves and retained earnings
336,820,710 303,211,614
Equity attributable to equity
holders of the parent 611,573,899 Non-controlling interests 606,792,991 Total equity 1,218,366,890 499,405,071
509,285,558
1,008,690,629
Total liabilities and equity
3,880,082,055 3,390,471,029
Page
83
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2014
1 January-
1 January
Notes
31 December 2014
31 December 2013
Net sales
Cost of goods sold and services provided 22
23
4,498,949,731 (3,978,090,357)
4,141,239,966
(3,641,025,134)
Gross profit 520,859,374 500,214,832
Selling, general and administrative expenses
24
(298,591,319)
(286,293,404)
Other operating (expense)/income, net
27
7,068,228 45,770,271
Financial income
28
18,525,845 16,860,586
Financial expense
28
(100,619,502)
(85,955,553)
Share of loss of a joint venture
30
(13,647,526)
(20,125,604)
Translation gain/(loss)
(1,312,973)
(4,297,528)
Profit before tax 132,282,127 166,173,600
Taxation on income
(34,194,216)
(61,125,288)
- Current (statutory)
17
(38,960,729)
(31,822,746)
- Deferred
17
4,766,513 (29,302,542)
Profit for the year from continuing operations 98,087,911 105,048,312
Loss for the year from discontinued operations 21
- Net profit for the year 98,087,911 105,048,312
Other comprehensive income : Items that will not be reclassified subsequently to profit or loss:
- Gain on revaluation of property, plant and equipment net-off tax
200,793,342 13,120,876
- Actuarial gain/(loss) net off tax
234,740 (1,068,270)
Items that may be reclassified subsequently to profit or loss: - Loss/(gain) on cash flow hedge instruments net-off tax
692,809 1,133,025
- Currency translation reserve
(33,276,969)
3,834,621
Total comprehensive income for the year 266,531,833 122,068,564
Net profit for the year
Attributable to non-controlling interests
64,975,929
51,377,334
Attributable to equity holders of parent
33,111,982
53,670,978
98,087,911
105,048,312
Total comprehensive income for the year
Attributable to non-controlling interests
151,912,603
64,147,373
Attributable to equity holders of parent
114,619,230
57,921,191
266,531,833
122,068,564
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2014
Items that may not be
reclassified subsequently
to profit or loss
Paid-in
share
capital
Balance at 31 December 2012
46,044,080 Actuarial
gain / (loss)
Revaluation
reserve
Items that may be
reclassified subsequently
to profit or loss
Currency
translation
reserve
Cash
flow
hedge
reserve
(1,022,922)
143,429,138 7,703,395 (1,264,943)
(579,398)
3,915,640 133,763 780,144 Legal
reserves
and
retained
earnings
Equity
attributable
to equity
holders' of
the parent
- - - - - - (2,945,440)
- - - - - - (14,277,573) (17,223,013)
Dividends paid
- - - - - (18,878,738)
Total comprehensive income
Effect of acquisition and disposal
of subsidiary shares
Dividends paid
46,044,080 - - - 46,044,080 (1,602,320)
86,931 - - (1,515,389)
144,399,338 Total
equity
282,696,883 477,585,631 503,784,021 981,369,652
Total comprehensive income
Non-controlling interests contribution to
capital increase in subsidiary
Effect of acquisition of subsidiary shares
Noncontrolling
interests
53,671,042 57,921,191 (18,878,738)
64,147,373 122,068,564
2,375,197 (6,463,942)
2,375,197
(23,686,955)
(54,557,091)
(73,435,829)
7,837,158 (484,799)
303,211,614 499,405,071 509,285,558 1,008,690,629
97,989,670 (20,541,127)
356,252 36,727,504 114,619,230 151,912,603 266,531,833
668,006 - - - 243,057,014 (12,703,969)
- 7,279,094 7,947,100 (12,402,765)
- (10,397,502) (10,397,502) (42,002,405)
(128,547)
(4,455,665)
(52,399,907)
336,820,710 611,573,899 606,792,991 1,218,366,890
85
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2014
1 January-
1 January
Notes
31 December 2014
31 December 2013
Cash flows provided from operating activities:
Profit before taxation on income, non-controlling interest and discontinued operations
132,282,127 166,173,600
Adjustments to reconcile profit before taxation to net cash provided by operating activities:
Depreciation 26
101,432,541 91,015,775
Amortization of intangible assets
26
11,181,980 10,379,564
Interest income
28
(2,873,545)
(8,339,076)
Due date income, net
28
(12,917,242)
(6,725,580)
Interest expense 28
89,542,801 76,118,363
Impairment on inventory recognised in profit or loss
8
5,000,401 8,585,017
Reversal of prior year impairment on inventory
8
(5,155,981)
(3,116,284)
Provision for reserve for employee benefit obligations
18
6,272,898 4,559,396
Gain/(loss) on sale of property,
plant and equipment and intangibles
27
(1,290,870)
(19,394,446)
Net change in currency translation reserve
(47,137,250)
(18,271,600)
Provision for doubtful receivables
7
5,574,142 4,016,482
Shares of profit loss of a joint venture
30
13,647,526 20,125,604
Gain on sale of subsidiary
29
(6,920,319)
Operating profit before working capital changes
288,639,209 325,126,815
Working capital changes
Trade receivables
(122,781,711)
71,282,472
Inventories
14,312,930 (61,371,202)
Other current assets and liabilities – net (44,671,796)
43,542,558
Trade payables
47,620,455 100,095,972
Other non-current assets and liabilities – net
8,153,842 (45,607,502)
Employee benefit obligations paid
18
(4,761,500)
(6,014,123)
Taxes paid
17
(41,591,814)
(43,105,909)
Net cash provided by operating activities
144,919,615 The accompanying policies and explanatory notes on pages 88 through 152 form an integral part of the consolidated financial statements.
383,949,081
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2014
1 January-
1 January
Notes
31 December 2014
31 December 2013
Investing activities:
Purchase of property, plant and equipment (*)
(246,183,821)
(311,761,372)
Purchase of intangible assets
12
(8,395,568)
(24,268,405)
Purchase of shares of subsidiaries
(4,455,665)
(23,686,955)
Proceeds from sale of property, plant and equipment
and intangibles
92,727,848 127,437,112
Interest received
15,790,787 15,064,656
Increase in share capital of subsidiary
- 2,375,197
Proceeds from disposal of subsidiary
29
7,100,000 Increase in share capital of joint venture
30
(35,500,000)
(24,665,637)
Net cash used in investing activities of continuing operations
(178,916,419)
(239,505,404)
Net cash provided by investing activities of discontinued operations
4,370,107 -
Net cash used in investing activities
(174,546,312)
(239,505,404)
Financing activities:
Redemption of borrowings
(7,124,858,419)
(3,151,283,506)
Proceeds from borrowings
7,327,092,017 3,131,897,554
Change in financial receivables from non-consolidated related parties
16,616,307 (20,490,000)
Dividends paid (including dividends of non-controlling interests)
(52,399,907)
(73,435,829)
Interest paid
(35,410,286)
(84,180,960)
Net cash provided by / (used in) financing activities of continuing operations
Net cash provided by financing activities of discontinued operations
131,039,712 (197,492,741)
- -
Net cash provided by / (used in) financing activities 131,039,712 (197,492,741)
Net increase / (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
101,413,015 344,024,875 (53,049,064)
397,073,939
Cash and cash equivalents at the end of the year
445,437,890 344,024,875
6
(*) Decrease in “advances given for property, plant and equipment” amounting to USD 386,121 is net-off with “purchase of property, plant and equipment” for the year ended 31
December 2014 (31 December 2013: Decrease USD 14,863,209 is included).
87
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014
1. CORPORATE INFORMATION
General
Borusan Holding A.Ş. and its Subsidiaries (hereafter referred to as the “Borusan Group” or the “Group”) commenced operations in 1944 as Borusan İstikbal Ticaret T.A.Ş., a company,
trading steel products and exporting dried fruit.
Borusan Holding A.Ş. (“Borusan Holding” or the “Holding”) was established in December 1972 as a corporation to coordinate the activities of and liaise between companies operating in
different fields including steel business (pipe and flat steel production), distributorship of leading brands (BMW, Mini, Jaguar Land Rover and Caterpillar) and integrated logistics. Borusan
Holding is registered in Turkey and owned by members of the Kocabıyık Family (see Note 19). The registered address of the Holding is as follows:
Meclis-i Mebusan Caddesi No: 35-37
Fındıklı - Istanbul – Turkey
Nature of Activities of the Group
The principal activities of Borusan Group comprise the following:
• manufacturing of steel pipes longitudinally and spirally welded for sale in domestic and foreign markets;
• manufacturing of cold rolled coils, galvanized coils and metal sheets for sale in domestic and foreign markets;
• exclusive sales and after sales services of BMW, MINI, Land Rover and Jaguar vehicles and car rental services in Turkey;
• exclusive sales and after sales services of Caterpillar, earthmoving equipment and power systems, in Turkey and Central Asia;
• providing integrated logistic services, shipping, port activities, warehousing and customs clearance services;
• manufacturing of engine valves for the automotive industry for sale in domestic and foreign markets;
• generation and wholesaling of electricity.
Since September 1998, Borusan Holding has a controlling interest in a sub-holding company, Borusan Mannesmann Boru Yatırım Holding A.Ş., which was established to coordinate
the activities of Borusan Mannesmann Boru Sanayi ve Ticaret A.Ş., a listed company in the Istanbul Stock Exchange (the “ISE”). In addition, Borusan Holding controls three investment
companies; Borusan Yatırım ve Pazarlama A.Ş., a listed company in the ISE, Borusan İstikbal Ticaret T.A.Ş. and Borusan Teknolojik Yatırımlar Holding A.Ş.
The Group is organized mainly in Turkey into four main business segments:
• Steel segment
• Distributorship segment
• Energy segment
• Logistics segment
Other operations of the Group mainly comprise valves production.
1. CORPORATE INFORMATION (continued)
Borusan Holding has the following subsidiaries (“the Subsidiaries”). Business segments and the locations of Subsidiaries are as follows:
Business Segment
Subsidiary
Flat Steel
Borçelik Çelik Sanayi Ticaret A.Ş. ("Borçelik")
Kerim Çelik Mamulleri İmalat ve Ticaret A.Ş. ("Kerim Çelik")
Bortrade Uluslararası Tic. A.Ş. ("Bortrade")
Steel Pipe
Borusan Mannesmann Boru Sanayi ve Ticaret Anonim Şirketi ("Borusan Boru")
Borusan Mannesmann Pipe US Inc
Borusan Mannesmann Boru Yatırım Holding A.Ş. ("BMBYH")
BM Vobarno Tubi SPA ("Vobarno")
Borusan Mühendislik İnşaat ve Sanayi Makinaları İmalat A.Ş. ("Mühendislik")
Borusan İstikbal Ticaret T.A.Ş. ("İstikbal")
Borusan Ankara İnşaat Malzemeleri Pazarlama A.Ş. ("Borusan Ankara")(3)
Distributorship
Borusan Makina ve Güç Sistemleri Sanayi ve Ticaret A.Ş. ("BMGS")
Machinery Intertrade Limited ("UK")
MIT Machine International Trade Limited ("MIT Machine")
MIT Machine Holding Limited ("MIT Machine Holding")
Machinery International Trade B.V. ("Machinery International")
Borusan Makina Kazakhstan LLP ("Kazakhstan")
BGS Freezone
Niocorp AB
Construction Equipment Trade Limited
Sitech Eurasia Teknoloji Servis ve Tic. A.Ş. ("Sitech")
Borusan Endüstriyel Sistemler A.Ş.
Borusan İş Makinaları Kiralama Sanayi ve Tic. A.Ş. ("İş Makinaları Kiralama")
Borusan Oto Servis ve Ticaret A.Ş. ("Borusan Oto")
Borusan Otomotiv İthalat ve Dağıtım A.Ş ("Borusan Otomotiv")
Borusan Oto Kıbrıs Limited ("Oto Kıbrıs")
Borusan Otomotiv Pazarlama ve Ticaret A.Ş.
Borusan Otomotiv Premium Kiralama ve Ticaret A.Ş. ("BOPAK")
Energy
Maya Enerji Yatırımları A.Ş. ("Maya Enerji")
Yedigöl Hidroelektrik Üretim Ve Tic. A.Ş. ("Yedigöl")
Turkuaz Elektrik Üretim A.Ş. ("Turkuaz")
Hazal Hidroelektrik Üretim A.Ş. ("Hazal")
Esentepe Enerji Yatırımları Üretim Ve Tic.A.Ş. ("Esentepe")
Hidiv Elektrik Enerjisi Toptan Satış A.Ş. ("Hidiv")
Borusan Enerji Yatırımları Ve Üretim A.Ş. ("Borusan Enerji")
Güney Rüzgarı Elektrik Üretim Ve Ticaret A.Ş. ("Güney Rüzgarı") (2)
Kuzey Rüzgarı Enerji Üretim Ve Ticaret A.Ş. ("Kuzey Rüzgarı")
Eskoda Enerji Üretim Pazarlama İthalat ve İhracat A.Ş ("Eskoda") (2)
Baltalimanı Enerji Yatırımları Üretim ve Ticaret A.Ş. ("Baltalimanı")
Beylerbeyi Enerji Yatırımları Üretim ve Tic. A.Ş. ("Beylerbeyi")
Balabanlı Rüzgar Enerjisinden Elektrik Üretim A.Ş. (Balabanlı)
Maray Enerji Sanayi ve Ticaret Ltd.Şti. ("Maray")
Başkent Gölbaşı Maden Kömür Elektrik Üretim ve Tic.Ltd.Şti ("Başkent") (1)
Bandırma Enerji ve Kimya Sanayi Ticaret A.Ş. ("Bandırma")
Boylam Enerji Yatırımları Üretim ve Tic. A.Ş. ("Boylam")
Fuatres Elektrik Üretim A.Ş. ("Fuatres") (2)
Borusan Ezine Elektrik Üretim San. Tic. A.Ş. ("Ezine")
Sincan Elektrik Üretim San. Tic. A.Ş. ("Sincan")
Borusan Trakya Elektrik Üretim San. Tic. A.Ş. ("Trakya")
Dardanos B.V
Bendis B.V
Tarhunt B.V
CFI International B.V
SFI International B.V
TFI International B.V
Logistics
Borusan Lojistik Dağıtım Depolama Taşımacılık ve Ticaret A.Ş. ("Borusan Lojistik")
Borusan Logistics International Algeria SPA
Borusan International Gulf FZE
Borusan Logistics International Netherlands BV
Borusan Logistics International USA Inc
Borusan Logistics International Oman Inc
BLG Lojistik Hizmetler ve Ticaret A.Ş. (4)
Borusan Logistics International Kazakhstan Limited Liability Partnership Balnak Nakliyat ve Lojistik Hizmetleri A.Ş. (4)
Eta Elektronik Taşımacılık Ağı Taşımacılık ve Tic A.Ş
Other
Borusan Elektronik Ticaret, İletişim ve Bilgi Hizmetleri A.Ş.("Otomax")
Borusan Manheim Açık Arttırma ve Araç Pazarlama ve Tic. Ltd. Şti. ("Borusan Manheim")
Supsan Motor Supapları Sanayi ve Ticaret A.Ş.("Supsan")
Borusan Teknolojik Yatırımlar Holding A.Ş. ("Borusan Teknoloji")
Borusan Danışmanlık ve Ortak Hizmetler A.Ş. ("Borusan Danışmanlık")
Birlik Yönetim Danışmanlığı ve Yatırım Ltd Şti
Borusan Yönetim Danışmanlığı ve Yatırım Ltd Şti.
Borusan Yatırım ve Pazarlama A.Ş. ("Borusan Yatırım")
Borusan Arge ve İnovasyon A.Ş.
(1) This entity was sold on 30 June 2014.
(2) Güney Rüzgarı and Eskoda have merged under Fuatres as of 30 November 2014.
(3) This subsidiary is liquidated in 24 April 2014.
(4) Balnak and BLG Lojistik have merged under BLG Lojistik on 31 July 2014.
Location/ Incorporated in
Gemlik – Turkey
Istanbul – Turkey
Gebze-Turkey
Istanbul – Turkey
USA
Istanbul – Turkey
Italy
Gemlik – Turkey
Istanbul – Turkey
Ankara – Turkey
Istanbul – Turkey
United Kingdom
Malta
Malta
Netherlands
Kazakhstan
Istanbul – Turkey
Sweden
Malta
Istanbul – Turkey
Istanbul – Turkey
Istanbul – Turkey
Istanbul – Turkey
Istanbul – Turkey
Northern Cyprus
Istanbul – Turkey
Istanbul – Turkey
Istanbul – Turkey
Istanbul – Turkey
Istanbul – Turkey
Istanbul – Turkey
Istanbul – Turkey
Istanbul – Turkey
Istanbul – Turkey
Istanbul – Turkey
Istanbul – Turkey
Istanbul – Turkey
Istanbul – Turkey
Istanbul – Turkey
Istanbul – Turkey
Istanbul – Turkey
Istanbul – Turkey
Istanbul – Turkey
Istanbul – Turkey
Istanbul – Turkey
Istanbul – Turkey
Istanbul – Turkey
Istanbul – Turkey
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Istanbul – Turkey
Algeria
Dubai / United Arab Emirates
Netherlands
USA
Oman
Istanbul – Turkey
Kazakhstan
Istanbul – Turkey
Istanbul – Turkey
Istanbul – Turkey
Istanbul – Turkey
Istanbul – Turkey
Istanbul – Turkey
Istanbul – Turkey
Istanbul – Turkey
Istanbul – Turkey
Istanbul – Turkey
Istanbul – Turkey
89
2. APPLICATION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRSs)
2.1 Amendments to IFRSs affecting amounts reported and/or disclosures in the financial statements
None.
2.2 New and Revised IFRSs applied with no material effect on the consolidated financial statements
Amendments to IFRS 10, 11, IAS 27
Amendments to IAS 32
IFRIC 21
1
Investment Entities 1
Offsetting Financial Assets and Financial Liabilities 1
Recoverable Amount Disclosures for Non-Financial Assets 1
Novation of Derivatives and Continuation of Hedge Accounting 1
Levies 1
Effective for annual periods beginning on or after 1 January 2014.
Amendments to IFRS 10, 11, IAS 27 Investment Entities
This amendment with the additional provisions of IFRS 10 provide 'investment entities' (as defined) an exemption from the consolidation of particular subsidiaries and instead require
that an investment entity measure the investment in each eligible subsidiary at fair value through profit or loss.
Amendments to IAS 32 Offsetting Financial Assets and Financial Liabilities
The amendments to IAS 32 clarify existing application issues relating to the offset of financial assets and financial liabilities requirements. Specifically, the amendments clarify the
meaning of ‘currently has a legally enforceable right of set-off’ and ‘simultaneous realization and settlement’.
Amendments to IAS 36 Recoverable Amount Disclosures for Non-Financial Assets
As a consequence of IFRS 13 Fair Value Measurements, there are amendments in the explanations about the measurement of the recoverable amount of an impaired asset. This
amendment is limited to non-financial assets and paragraphs 130 and 134 of IAS 36 has been changed.
Amendments to IAS 39 Novation of Derivatives and Continuation of Hedge Accounting
This amendment to IAS 39 makes it clear that there is no need to discontinue hedge accounting if a hedging derivative is novated, provided certain criteria are met.
IFRIC 21 Levies
IFRIC 21 identifies the obligating event for the recognition of a liability as the activity that triggers the payment of the levy in accordance with the relevant legislation.
2. APPLICATION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRSs) (continued)
2.3 New and revised IFRSs in issue but not yet effective
The Group has not applied the following new and revised IFRSs that have been issued but are not yet effective:
IFRS 9
Annual Improvements to 2010-2012 Cycle
IFRS 14
Amendments to IFRS 11
Amendments to IAS 16 and IAS 38
IFRS 15
Amendments to IAS 1
Amendments to IFRS 10, IFRS 12 and IAS 28
Financial Instruments 5
Defined Benefit Plans: Employee Contributions 1
IFRS 2, IFRS 3, IFRS 8, IFRS 13, IAS 16 and IAS 38, IAS 24 1
IFRS 1, IFRS 3, IFRS 13, IAS 40 1
Regulatory Deferral Accounts 2
Accounting for Acquisition of Interests in Joint operations 2
Clarification of Acceptable Methods of Depreciation and Amortisation 2
Agriculture: Bearer Plants 2
Revenue from Contracts with Customers 4
Equity Method in Separate Financial Statements 2
Sale or Contribution of Assets between an Investor and its Associate or Joint Venture 2
IFRS 5, IFRS 7, IAS 9, IAS 34 3
Disclosure Initiative 2
Investment Entities: Applying the Consolidation Exception 2
1
Effective for annual periods beginning on or after 1 July 2014.
3
Effective for annual periods beginning on or after 1 July 2016.
4
5
2
IFRS 9 Financial Instruments
IFRS 9, issued in November 2009, introduces new requirements for the classification and measurement of financial assets. IFRS 9 was amended in October 2010 to include requirements
for the classification and measurement of financial liabilities and for derecognition, and in November 2013 to include the new requirements for general hedge accounting. Another
revised version of IFRS 9 was issued in July 2014 mainly to include a) impairment requirements for financial assets and b) limited amendments to the classification and measurement
requirements by introducing a “fair value through other comprehensive income (FVTOCI) measurement category for certain simple debt instruments.
Amendments to IAS 19 Defined Benefit Plans: Employee Contributions
This amendment clarifies the requirements that relate to how contributions from employees or third parties that are linked to service should be attributed to periods of service. In addition,
it permits a practical expedient if the amount of the contributions is independent of the number of years of service, in that contributions, can, but are not required, to be recognised as
a reduction in the service cost in the period in which the related service is rendered.
91
2.3 New and revised IFRSs in issue but not yet effective (continued)
IFRS 2: Amends the definitions of 'vesting condition' and 'market condition' and adds definitions for 'performance condition' and 'service condition'
IFRS 3: Require contingent consideration that is classified as an asset or a liability to be measured at fair value at each reporting date.
IFRS 8: Requires disclosure of the judgements made by management in applying the aggregation criteria to operating segments, clarify reconciliations of segment assets only
required if segment assets are reported regularly.
IFRS 13: Clarify that issuing IFRS 13 and amending IFRS 9 and IAS 39 did not remove the ability to measure certain short-term receivables and payables on an undiscounted basis
(amends basis for conclusions only).
IAS 16 and IAS 38: Clarify that the gross amount of property, plant and equipment is adjusted in a manner consistent with a revaluation of the carrying amount.
IAS 24: Clarify how payments to entities providing management services are to be disclosed.
IFRS 1: Clarify which versions of IFRSs can be used on initial adoption (amends basis for conclusions only).
IFRS 3: Clarify that IFRS 3 excludes from its scope the accounting for the formation of a joint arrangement in the financial statements of the joint arrangement itself.
IFRS 13: Clarify the scope of the portfolio exception in paragraph 52.
IAS 40: Clarifying the interrelationship of IFRS 3 and IAS 40 when classifying property as investment property or owner-occupied property.
IFRS 14 Regulatory Deferral Accounts
IFRS 14 Regulatory Deferral Accounts permits an entity which is a first-time adopter of International Financial Reporting Standards to continue to account, with some limited changes, for
'regulatory deferral account balances' in accordance with its previous GAAP, both on initial adoption of IFRS and in subsequent financial statements.
IFRS 14 was issued by the IASB on 30 January 2014 and is applies to an entity's first annual IFRS financial statements for a period beginning on or after 1 January 2016.
Amendments to IFRS 11 Accounting for Acquisition of Interests in Joint operations
This amendment requires an acquirer of an interest in a joint operation in which the activity constitutes a business to:
• apply all of the business combinations accounting principles in IFRS 3 and other IFRSs, except for those principles that conflict with the guidance in IFRS 11
• disclose the information required by IFRS 3 and other IFRSs for business combinations.
Amendments to IAS 16 and IAS 38 Clarification of Acceptable Methods of Depreciation and Amortisation
This amendment clarifies that a depreciation method that is based on revenue that is generated by an activity that includes the use of an asset is not appropriate for property, plant
and equipment, and introduces a rebuttable presumption that an amortisation method that is based on the revenue generated by an activity that includes the use of an intangible asset
is inappropriate, which can only be overcome in limited circumstances where the intangible asset is expressed as a measure of revenue, or when it can be demonstrated that revenue
and the consumption of the economic benefits of the intangible asset are highly correlated. The amendment also adds guidance that expected future reductions in the selling price
of an item that was produced using an asset could indicate the expectation of technological or commercial obsolescence of the asset, which, in turn, might reflect a reduction of the
future economic benefits embodied in the asset.
Amendments to IAS 16 and IAS 41 Agriculture: Bearer Plants
This amendment include “bearer plants” within the scope of IAS 16 rather than IAS 41, allowing such assets to be accounted for a property, plant and equipment and measured after
initial recognition on a cost or revaluation basis in accordance with IAS 16. The amendment also introduces a definition of 'bearer plants' as a living plant that is used in the production
or supply of agricultural produce, is expected to bear produce for more than one period and has a remote likelihood of being sold as agricultural produce, except for incidental scrap
sales, and clarifies that produce growing on bearer plants remains within the scope of IAS 41.
IFRS 15 Revenue from Contracts with Customers
IFRS 15 provides a single, principles based five-step model to be applied to all contracts with customers.
The five steps in the model are as follows:
• Identify the contract with the customer
• Identify the performance obligations in the contract
• Determine the transaction price
• Allocate the transaction price to the performance obligations in the contracts
• Recognise revenue when the entity satisfies a performance obligation.
Amendments to IAS 27 Equity Method in Separate Financial Statements
This amendment permits investments in subsidiaries, joint ventures and associates to be optionally accounted for using the equity method in separate financial statements.
Amendments to IFRS 10 and IAS 28 Sale or Contribution of Assets between an Investor and its Associate or Joint Venture
This amendment clarifies the treatment of the sale or contribution of assets from an investor to its associate or joint venture.
93
Annual Improvements 2012-2014 Cycle
IFRS 5: Adds specific guidance in IFRS 5 for cases in which an entity reclassifies an asset from held for sale to held for distribution or vice versa and cases in which held-for-distribution
accounting is discontinued.
IFRS 7: Additional guidance to clarify whether a servicing contract is continuing involvement in a transferred asset, and clarification on offsetting disclosures in condensed interim
financial statements
IAS 9: Clarify that the high quality corporate bonds used in estimating the discount rate for post-employment benefits should be denominated in the same currency as the benefits
to be paid
IAS 34: Clarify the meaning of 'elsewhere in the interim report' and require a cross-reference
Amendments to IAS 1 Disclosure Initiative
This amendment addresses perceived impediments to preparers exercising their judgement in presenting their financial reports.
Amendments to IFRS 10, 11, IAS 28 Investment Entities: Applying the Consolidation Exception
This amendment addresses issues that have arisen in the context of applying the consolidation exception for investment entities by clarifying the following points:
• The exemption from preparing consolidated financial statements for an intermediate parent entity is available to a parent entity that is a subsidiary of an investment entity, even if the
investment entity measures all of its subsidiaries at fair value.
• A subsidiary that provides services related to the parent’s investment activities should not be consolidated if the subsidiary itself is an investment entity.
• When applying the equity method to an associate or a joint venture, a non-investment entity investor in an investment entity may retain the fair value measurement applied by the
associate or joint venture to its interests in subsidiaries.
• An investment entity measuring all of its subsidiaries at fair value provides the disclosures relating to investment entities required by IFRS 12.
The Group evaluates the effects of these standards on the consolidated financial statements.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
3.1 Statement of Compliance
The consolidated financial statements of Borusan Holding A.Ş. and its Subsidiaries have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as
issued by the International Accounting Standards Board (“IASB”).
3.2 Basis of Preparation
The consolidated financial statements have been prepared on a historical cost basis, except for land, buildings, flat steel and steel pipe machinery are carried at revalued amounts (Note 11);
and certain financial instruments and derivative financial instruments which are carried at fair values.
3.3 Basis of Consolidation
The consolidated financial statements comprise the financial statements of Borusan Holding A.Ş. and its Subsidiaries as at 31 December 2014 on the basis set out below:
Subsidiaries in which the Holding, directly or indirectly, has power to exercise control over their operations, have been consolidated. Control is evidenced when the Holding owns, directly
or indirectly through subsidiaries, more than half of the voting power of an entity.
Control also exists when the Holding owns half or less of the voting power of an entity when there is:
a) Power to govern the financial and operating policies of the entity under an agreement; or,
b) Power to appoint or remove the majority of the members of the board of the directors or equivalent governing body; or,
c) Power to cast the majority of votes at meetings of the board of directors or equivalent governing body.
Comparative Information and Restatement to Previous Year Consolidated Financial Statements
The consolidated financial statements of the Group are prepared comparatively with the previous period to identify the financial position and performance trends. In order to maintain
consistency, with current period consolidated financial statements, comparative information is reclassified and significant changes are disclosed if necessary.
Changes in accounting policies arising from the first time adaptation of a new IAS/IFRS are applied retrospectively or prospectively in accordance with the respective IASs/IFRSs
transition requirements, if any. Where there are no transition requirements for any changes or optional significant changes in accounting policies and identified accounting errors, those
are applied retrospectively and prior period financial statements are restated accordingly.
95
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
3.3 Basis of Consolidation (continued)
The principles of consolidation followed in the preparation of the consolidated financial statements are as follows:
(i) The statement of financial position and statements of comprehensive income of the Subsidiaries are consolidated on a line-by-line basis and the carrying value of the investment held
by the Group is eliminated against the related equity accounts. Intercompany transactions and balances between the Group companies and unrealised gains or losses on transactions
between the Group companies are eliminated. The investment cost and the dividends obtained from subsidiaries are eliminated from equity and income for the year, respectively.
(ii) Subsidiaries are fully consolidated from the date, being the date on which the Group obtains control and continue to be consolidated until the date when such control ceases. The
financial statements of the subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies.
(iii) Non-controlling interests’ share in the net assets of the consolidated subsidiaries is separately classified in the consolidated equity and statements of comprehensive income as noncontrolling interests. Kocabıyık Family members having interests in the share capital of the subsidiaries are treated as non-controlling interests and excluded from the Group’s interests.
Losses within a subsidiary are attributed to the non-controlling interests even if that results in a deficit balance. Changes in the Group’s ownership interests in subsidiaries, without a loss
of control, are accounted for as equity transactions. The carrying amounts of the Group’s interests and the non-controlling interests are adjusted to reflect the changes in their relative
interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized
directly in equity and attributed to owners of the Company.
When the Group losses control of a subsidiary, the profit or loss on disposal is calculated as the difference between;
(i) the aggregate of the fair value of the consideration received and the fair value of any retained interest and,
(ii) the previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary and any non-controlling interests.
When assets of the subsidiary are carried at revalued amounts or fair values and the cumulative gain or loss has been recognized in other comprehensive income and accumulated in
equity, the amounts previously recognized in other comprehensive income and accumulated in equity are accounted for as if the Group had directly disposed of the relevant assets. The
fair value of any investment retained in the former subsidiary at the date when the control is lost is regarded as the fair value on initial recognition for subsequent accounting under IAS
39 Financial Instruments: Recognition and Measurement or, when applicable, the cost on initial recognition of an investment in an associate or a jointly controlled entity.
3.3 Basis of Consolidation (continued)
The following is a list of the operating subsidiaries as of 31 December 2014 and 2013 detailing the Group's controlling interest by direct voting power and the Group’s ultimate effective
shareholding in such Subsidiaries' equity at those dates:
Direct Shareholding
By Borusan Holding
Effective Shareholding
by Borusan Holding
Consolidation Method
2014 (%)
2013 (%)
2014 (%)
2013 (%)
2014 (%)
Borçelik (1)
20.77 20.77 38.76 38.72 line by line Borusan Boru 53.19 53.16 line by line Kerim Çelik (1)
0.01 0.01 38.71 38.72 line by line Borusan Ankara (2)
58.69 58.69 line by line BMBYH
64.64 64.64 72.38 72.35 line by line İstikbal
82.68 82.68 82.70 82.70 line by line Vobarno
53.19 53.16 line by line Bortrade
70.00 70.00 70.00 70.00 line by line Borusan Mühendislik
51.56 51.53 line by line Borusan Mannesmann Pipe US Inc
53.19 53.16 line by line BMGS 70.16 70.11 81.93 81.83 line by line Machinery Intertrade Limited ("UK")
81.93 81.83 line by line MIT Machine International Trade Limited ("MIT Machine")
81.93 81.83 line by line MIT Machine Holding Limited ("MIT Machine Holding")
81.93 81.83 line by line Machinery International Trade B.V. ("Machinery International")
81.93 81.83 line by line Borusan Makina Kazakhstan LLP ("Kazakhstan")
81.93 81.83 line by line BGS Freezone
81.93 81.83 line by line Niocorp AB
81.93 81.83 line by line Construction Equipment Trade Limited
81.93 81.83 line by line Sitech Eurasia Teknoloji Servis ve Tic. A.Ş. ("Sitech")
81.93 81.83 line by line Borusan Endüstriyel Sistemler A.Ş.
81.88 line by line Borusan İş Makinaları Kiralama Sanayi ve Tic. A.Ş.
81.88 line by line Borusan Oto (1)
29.05 28.60 41.58 41.07 line by line Borusan Otomotiv (1)
21.25 21.00 39.16 38.83 line by line Borusan Oto Kıbrıs (1)
40.37 39.95 line by line Borusan Otomotiv Pazarlama (1)
21.25 21.00 39.16 38.83 line by line Borusan Otomotiv Premium Kiralama (1)
21.25 21.00 40.90 40.90 line by line Maya Enerji (3)
0.01 0.01 49.85 49.85 equity pick up Yedigöl (3)
0.01 0.01 49.85 49.85 equity pick up Turkuaz (3)
0.01 0.01 49.85 49.85 equity pick up Hazal (3)
0.01 0.01 49.85 49.85 equity pick up Esentepe (3)
0.01 0.01 49.85 49.85 equity pick up Hidiv (3)
0.01 0.01 49.85 49.85 equity pick up Borusan Enerji (3)
49.00 49.00 49.85 49.85 equity pick up Güney Rüzgarı (3-4)
0.01 49.85 -
Kuzey Rüzgarı (3)
0.01 0.01 49.85 49.85 equity pick up Eskoda (3-4)
0.01 49.85 -
Baltalimanı (3)
0.01 0.01 49.85 49.85 equity pick up Beylerbeyi (3)
49.85 49.85 equity pick up Balabanlı (3)
49.85 49.85 equity pick up Maray (3) 0.05 0.05 49.85 49.85 equity pick up Başkent Gölbaşı (5)
99.91 100.00 -
Bandırma (3)
49.85 49.85 equity pick up Boylam (3)
49.85 49.85 equity pick up Fuatres (3-4)
49.85 49.85 equity pick up Ezine
99.80 100.00 100.00 line by line Trakya
50.00 99.80 100.00 100.00 line by line Sincan
69.80 94.80 94.80 line by line Dardanos B.V
100.00 line by line Bendis B.V
100.00 line by line Tarhunt B.V
94.80 line by line CFI International B.V
100.00 100.00 line by line SFI International B.V
70.00 94.80 line by line TFI International B.V
100.00 100.00 line by line Borusan Lojistik
57.75 57.59 79.39 79.19 line by line Balnak (6)
57.59 79.19 line by line BLG Lojistik
79.39 79.19 line by line Eta Elektronik
- 79.39 line by line Borusan Logistics International Algeria SPA
- - 79.39 79.19 line by line Borusan International Gulf FZE
- - 79.39 79.19 line by line Borusan Logistics International Netherlands BV
- - 79.39 79.19 line by line Borusan Logistics International USA Inc
- - 79.39 79.19 line by line Borusan Logistics International Oman Inc
- - 79.39 79.19 line by line Borusan Logistics International Kazakhstan Limited Liability Partnership - - 79.39 79.19 line by line Borusan Manheim (3)
40.50 40.50 46.45 46.42 equity pick up Otomax
80.62 80.56 line by line Supsan 7.96 1.96 47.30 41.27 line by line Borusan Teknoloji
83.09 83.09 93.86 93.81 line by line Borusan Danışmanlık ve Ortak Hizmetler A.Ş. ("Borusan Danışmanlık")
93.78 93.78 93.78 93.80 line by line Borusan Yatırım
36.29 36.01 62.64 62.40 line by line Borusan Arge ve İnovasyon A.Ş.
100.00 100.00 line by line Borusan Yönetim Danışmanlığı ve Yatırım Ltd Şti.
99.90 99.90 100
100
line by line Birlik Yönetim Danışmanlığı ve Yatırım Ltd Şti.
99.90 99.90 100
100
line by line (1) These subsidiaries are consolidated on the basis set below:
a) power to govern the financial and operating policies of the entity under an agreement; or,
b) power to appoint or remove the majority of the members of the board of the directors or equivalent governing body; or,
c) power to cast the majority of votes at meetings of the board of directors or equivalent governing body.
(2) This subsidiary is liquidated in 24 April 2014.
(3) All energy investments and Borusan Manheim are a joint-ventures of the group.
(4) Güney Rüzgarı and Eskoda have merged under Fuatres as of 30 November 2014.
(5) This entity was sold on 30 June 2014.
(6) Balnak and BLG Lojistik have merged under BLG Lojistik on 31 July 2014.
2013 (%)
line by line
line by line
line by line
line by line
line by line
line by line
line by line
line by line
line by line
line by line
line by line
line by line
line by line
line by line
line by line
line by line
line by line
line by line
line by line
line by line
line by line
line by line
line by line
line by line
line by line
equity pick up
equity pick up
equity pick up
equity pick up
equity pick up
equity pick up
equity pick up
equity pick up
equity pick up
equity pick up
equity pick up
equity pick up
equity pick up
equity pick up
line by line
equity pick up
equity pick up
equity pick up
line by line
line by line
line by line
line by line
line by line
line by line
line by line
line by line
line by line
line by line
line by line
line by line
equity pick up
line by line
line by line
line by line
line by line
line by line
line by line
line by line
97
3.4 Foreign Currency Translation
The consolidated financial statements are presented in USD, which is also the Holding’s functional and presentation currency. Each entity in the Group determines its own functional
currency and items included in the financial statements of each entity are measured using that functional currency. The USD is used to a significant extent, or has a significant impact on
the operations of the Group and reflects the economic substance of the underlying events and circumstances relevant to the Group. Therefore, the Group companies mainly use USD as
functional currency. All currencies other than the functional currency selected for measuring items in the financial statements are treated as foreign currencies.
Based on the economic substance of the underlying events and circumstances relevant to the Group, the functional currency of certain subsidiaries of the Group has been determined
to be USD as defined by IAS 21, The Effects of Changes in Foreign Exchange Rates due to the following reasons:
• The purchase and sales prices of the Group companies and the main services and products are mainly quoted in USD,
• A significant part of the financing and related finance costs of the Group is denominated in USD.
Transactions in foreign currencies are initially recorded in the functional currency rate ruling at the date of transaction. Monetary assets and liabilities denominated in foreign currencies
are translated at the functional currency rate of exchange ruling at the balance sheet date. All differences are taken to translation gain / (loss) in the consolidated income statement.
Non-monetary items and equity balances (excluding profit or loss) that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the
dates of the initial transactions.
As at the reporting date, the assets and liabilities of subsidiaries are translated into the presentation currency of Borusan Holding A.Ş. (USD) at the rate of exchange ruling at the balance
sheet date and their income statements are translated at the average exchange rates for the year.
The exchange differences arising on the translation are taken directly to a separate component of other comprehensive income as currency translation reserve. On disposal of such
subsidiaries, the deferred cumulative amount recognised in other comprehensive income relating to that particular subsidiary is recognised in the statement of comprehensive income.
The Turkish countrywide producer price index (PPI) published by Turkish Statistical Institute and TL exchange rates for the purchases of USD announced by the Central Bank of the
Republic of Turkey for the last three years were as follows:
%
Year
Year End TL/USD
Exchange Rates
TL/USD Rate Annual Change
Inflation Rates (PPI)
2011
2012
2013
2014
1.8889
1.7826
2.1343
2.3189
22.18
(5.63)
19.73
8.65
13.33
6.16
7.4
8.17
3.5 Business combinations
The acquisition of subsidiaries and businesses are accounted for using the acquisition method. The consideration transferred in a business combination is measured at fair value, which
is calculated as the sum of the acquisition-date fair values of the assets transferred by the Group, liabilities incurred by the Group to the former owners of the acquiree and the equity
interests issued by the Group in exchange for control of the acquiree. Acquisition-related costs are generally recognized in profit or loss as incurred.
3.5 Business combinations (continued)
At the acquisition date, the identifiable assets acquired and the liabilities assumed are recognized at their fair value, except that:
• deferred tax assets or liabilities and assets or liabilities related to employee benefit arrangements are recognized and measured in accordance with IAS 12 Income Taxes and IAS 19
Employee Benefits respectively;
• liabilities or equity instruments related to share-based payment arrangements of the acquiree or share-based payment arrangements of the Group entered into to replace share-based
payment arrangements of the acquiree are measured in accordance with IFRS 2 Share-based Payment at the acquisition date; and
• assets (or disposal groups) that are classified as held for sale in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations are measured in accordance
with that Standard.
Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree, and the fair value of the acquirer's previously
held equity interest in the acquiree (if any) over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. If, after reassessment, the net of
the acquisition-date amounts of the identifiable assets acquired and liabilities assumed exceeds the sum of the consideration transferred, the amount of any non-controlling interests in
the acquiree and the fair value of the acquirer's previously held interest in the acquiree (if any), the excess is recognized immediately in profit or loss as a bargain purchase gain.
Non-controlling interests that are present ownership interests and entitle their holders to a proportionate share of the entity's net assets in the event of liquidation may be initially
measured either at fair value or at the non-controlling interests' proportionate share of the recognized amounts of the acquiree's identifiable net assets. The choice of measurement basis
is made on a transaction-by-transaction basis. Other types of non-controlling interests are measured at fair value or, when applicable, on the basis specified in another IFRS.
When the consideration transferred by the Group in a business combination includes assets or liabilities resulting from a contingent consideration arrangement, the contingent
consideration is measured at its acquisition-date fair value and included as part of the consideration transferred in a business combination. Changes in the fair value of the contingent
consideration that qualify as measurement period adjustments are adjusted retrospectively, with corresponding adjustments against goodwill. Measurement period adjustments are
adjustments that arise from additional information obtained during the ‘measurement period’ (which cannot exceed one year from the acquisition date) about facts and circumstances
that existed at the acquisition date.
The subsequent accounting for changes in the fair value of the contingent consideration that do not qualify as measurement period adjustments depends on how the contingent
consideration is classified. Contingent consideration that is classified as equity is not remeasured at subsequent reporting dates and its subsequent settlement is accounted for within
equity. Contingent consideration that is classified as an asset or a liability is remeasured at subsequent reporting dates in accordance with IAS 39, or IAS 37 Provisions, Contingent
Liabilities and Contingent Assets, as appropriate, with the corresponding gain or loss being recognized in profit or loss.
When a business combination is achieved in stages, the Group's previously held equity interest in the acquiree is remeasured to fair value at the acquisition date (i.e. the date when the
Group obtains control) and the resulting gain or loss, if any, is recognized in profit or loss. Amounts arising from interests in the acquiree prior to the acquisition date that have previously
been recognized in other comprehensive income are reclassified to profit or loss where such treatment would be appropriate if that interest were disposed of.
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3.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
3.5 Business combinations (continued)
If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Group reports provisional amounts for the items
for which the accounting is incomplete. Those provisional amounts are adjusted during the measurement period (see above), or additional assets or liabilities are recognized, to reflect
new information obtained about facts and circumstances that existed at the acquisition date that, if known, would have affected the amounts recognized at that date.
3.6 Goodwill
Goodwill arising on an acquisition of a business is carried at cost as established at the date of acquisition of the business less accumulated impairment losses, if any.
For the purposes of impairment testing, goodwill is allocated to each of the Group's cash-generating units (or groups of cash-generating units) that is expected to benefit from the
synergies of the combination.
A cash-generating unit to which goodwill has been allocated is tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the
recoverable amount of the cash-generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit
and then to the other assets of the unit pro rata based on the carrying amount of each asset in the unit. Any impairment loss for goodwill is recognized directly in profit or loss in the
consolidated statement of profit or loss and other comprehensive income. An impairment loss recognized for goodwill is not reversed in subsequent periods.
On disposal of the relevant cash-generating unit, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.
3.7 Cash and Cash Equivalents
Cash and cash equivalents in the statement of financial position comprise of cash at banks and in hand, short-term deposits, reverse repurchase agreements and other liquid assets.
Other liquid assets mainly comprise of checks and notes maturing before balance sheet date. For the purpose of the consolidated statement of cash flows, cash and cash equivalents
consist of cash and cash equivalents as defined above, with an original maturity of three months or less.
3.8 Trade and Other Receivables
Trade receivables which generally have approximately 21 day terms (2013 - 29 day terms) are carried at amortized cost less an allowance for any uncollectible amounts. Provision is
made when there is objective evidence that the Group will not be able to collect the debts. Bad debts are written off when identified.
3.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
3.9 Related Parties
Parties are considered related to the Group if;
(a)directly, or indirectly through one or more intermediaries, the party
(i) controls, is controlled by, or is under common control with the Group (this includes parent, subsidiaries and fellow subsidiaries);
(ii) has an interest in the Group that gives it significant influence over the Group; or
(iii) has joint control over the Group;
(b)the party is an associate of the Group;
(c)the party is a joint venture in which the Group is a venturer;
(d)the party is member of the key management personnel of the Group as its parent;
(e)the party is a close member of the family of any individual referred to in (a) or (d);
(f) the party is an entity that is controlled or significantly influenced by, or for which significant voting power in such entity resides with, directly or indirectly, any individual referred to in
(d) or (e);
A related party transaction is a transfer of resources, services or obligation between related parties, regardless of whether a price is charged.
Disclosures regarding related party transactions and outstanding balances are given in Note 34.
3.10 Inventories
Inventories are valued at the lower of cost or net realizable value (“NRV”) after provision for obsolete items. Cost is determined using the monthly weighted average method or specific
identification method depending on nature of production or actual cost for trading goods. Cost of work in progress and finished goods inventories include materials, direct labor and an
appropriate portion of variable and fixed overhead expenditure, the latter being allocated on the basis of normal operating capacity. Net realizable value is the estimated selling price
in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale. Unrealizable inventory has been fully written off. When the
circumstances that previously caused inventories to be written down below cost no longer exist or when there is clear evidence of an increase in net realizable value because of changed
economic circumstances, the amount of the write-down is reversed. The reversal amount is limited to the amount of the original write-down.
3.11 Property, Plant and Equipment
Property, plant and equipment (“PP&E”) is initially stated at cost, excluding the costs of day to day servicing, less accumulated depreciation and accumulated impairment in value.
Such costs which are initially recognized include the cost of replacing part of such property, plant and equipment when that cost is incurred if the recognition criteria are met. Following
initial recognition at cost, land, buildings, flat steel and steel pipe machinery are carried at revalued amounts, which is the fair value at the date of the revaluation less any subsequent
accumulated depreciation and subsequent accumulated impairment losses.
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3.11 Property, Plant and Equipment (continued)
The carrying values of property, plant and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable.
Whenever the carrying amount of an asset exceeds its recoverable amount, an impairment loss is recognised in the consolidated statement of comprehensive income. However, the
decrease in the carrying value of an asset is debited to the equity to the extent of any credit balance existing in the revaluation surplus in respect of that asset. The recoverable amount is
the higher of an asset’s fair value less cost to sell and value in use. The fair value less cost to sell is the amount obtainable from the sale of an asset in an arm’s length transaction while
value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at end of its useful life. Recoverable amounts
are estimated for individual assets or, if it is not possible, for the cash-generating unit. Reversal of impairment losses recognised in prior years is recorded when there is an indication that
the impairment losses recognised for the asset no longer exist or has decreased. The reversal is recorded in consolidated statement of comprehensive income.
For items of property, plant and equipment carried at revalued amount, valuations are performed frequently enough to ensure that the fair value of a revalued asset does not differ
materially from its carrying amount.
Any revaluation surplus is credited to the asset revaluation reserve included in the statement of comprehensive income.
An annual transfer from the asset revaluation reserve to retained earnings is made for the difference between depreciation based on the revalued carrying amount of the assets and
depreciation based on the assets original cost. Additionally, accumulated depreciation as at the revaluation date is eliminated against the gross carrying amount of the asset and the
net amount is restated to the revalued amount of the asset. Upon disposal, any revaluation reserve relating to the particular asset being sold is transferred directly to retained earnings.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on
derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the statement of comprehensive income
in the year the asset is derecognised.
The cost or revalued amount of depreciable assets is depreciated at rates based on the estimated useful lives of assets. The estimated useful lives and the methods of depreciation are
as follows:
Years
Buildings
Machinery and equipment
Furniture and fixtures
Motor vehicles
Other tangible assets
Leasehold improvements
6 - 50
5 - 40
3 - 5
3 - 8
5 - 10
over the lease period
Method
Straight-line
Straight-line
Straight-line
Straight-line
Straight-line
Straight-line
3.12 Intangible Assets
Intangible assets, which mainly comprise computer software, energy licenses and license applications, are measured initially at cost. Intangible assets are recognized, if it is probable
that the future economic benefits that are attributable to the asset will flow to the enterprise; and the cost of the asset can be measured reliably. Following initial recognition, intangible
assets are measured at cost less accumulated amortization and any accumulated impairment losses. Intangible assets excluding development costs created within the business are
not capitalized and expenditure is charged against profits in the year in which it is incurred. The useful lives of intangible assets are assessed to be either finite or indefinite. Intangible
assets with finite lives are amortized on a straight line basis over the best estimate of their useful lives (3-15 years). Energy licenses are amortized between 10-49 years. The amortization
period and the amortization method for an intangible asset with a finite useful life are reviewed at least at each financial year-end. Changes in the expected useful life or the expected
pattern of consumption of future economic benefits embodied in the asset is accounted for by changing the amortization period or method, as appropriate, and treated as changes in
accounting estimates. The amortization expense on intangible assets with finite lives is recognised in the statement of comprehensive income in the expense category consistent with
the function of the intangible asset.
Intangible asset with indefinite useful lives are not amortised, but are tested for impairment annually either individually or at the cash-generating unit level. The useful life of an intangible
asset with an indefinite life is reviewed annually to determine whether indefinite life assessment continues to be supportable. If not, the change in the useful life assessment from indefinite
to finite is made on a prospective basis.
The carrying values of intangible assets are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable.
Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are
recognized in the statement of comprehensive income when the asset is derecognized.
3.13 Non-current Assets Held For Sale and Discontinued Operations
Non-current assets and disposal groups are classified as held for sale and measured at the lower of carrying value and fair value less costs to sell if their carrying amounts will be
recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only the sale is highly probable and the asset or disposal group is
available for immediate sale in its present condition. Management must be committed to the sales, which should be expected to qualify for recognition as a completed sale within one
year from the date of classification.
In the consolidated statement of comprehensive income of the reporting period, and of the comparable period of the previous year, income and expenses from discontinued operations
are reported separately from income and expenses from continuing operations, down to the level of profit after taxes, even when the Group retains a non- controlling interests in the
subsidiary after the sale. The resulting profit or loss (after taxes) is reported separately in the statement of comprehensive income.
Property, plant and equipment and intangible assets once classified as held for sale are not depreciated or amortized.
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3.14 Impairment of Assets
The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is
required, the Group makes an estimate of the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash generating unit’s fair value less costs to sell
and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets.
Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the
estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflect current market assessments of the time value of money and the risks specific
to the asset. Impairment losses of continuing operations are recognized in the statement of income in those expense categories consistent with the function of the impaired asset, except
for a property previously revalued where the revaluation was taken to other comprehensive income. In this case, the impairment is also recognized in other comprehensive income up
to the amount of any previous revaluation.
An assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such
indication exists, the recoverable amount is estimated. A previously recognized impairment loss is reversed only if there has been a change in the estimates used to determine the
asset’s recoverable amount since the last impairment loss was recognized. If that is the case, the carrying amount of the asset is increased to its recoverable amount. That increased
amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years. Such reversal is
recognized in profit or loss unless the asset is carried at revalued amount, in which case the reversal is treated as a revaluation increase. After such a reversal the depreciation charge is
adjusted in future periods to allocate the asset’s revised carrying amount, less any residual value, on a systematic basis over its remaining useful life.
Goodwill and intangible assests with indefined useful life
Goodwill is tested for impairment annually (as at 31 December) and when circumstances indicate that the carrying value may be impaired.
Impairment is determined for goodwill by assessing the recoverable amount of each cash-generating unit (or group of cash-generating units) to which the goodwill relates. Where the
recoverable amount of the cash-generating unit is less than their carrying amount, an impairment loss is recognized. Impairment losses relating to goodwill cannot be reversed in future
periods.
3.15 Investments and Other Financial Assets
Investments are recognized and derecognized on a trade date where the purchase or sale of an investment under a contract whose terms require delivery of the investment within the
timeframe established by the market concerned, and are initially measured at fair value, plus transaction costs except for those financial assets classified as at fair value through profit
or loss, which are initially measured at fair value.
Financial assets within the scope of IAS 39 are classified as ‘financial assets at fair value through profit or loss’ (“FVTPL”), ‘held-to-maturity investments’, ‘available-for-sale (“AFS”)
financial assets’ or ‘loans and receivables’. The Group determines the classification of its financial assets at initial recognition.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. After initial measurement, such assets are carried
at amortized cost using the effective interest method. Gains and losses are recognized in the income statement when the loans and receivables are derecognized or impaired, as well
as through the amortization process.
3.15 Investments and Other Financial Assets (continued)
Available-for-sale financial assets
AFS financial assets are non-derivatives that are either designated as AFS or are not classified as (a) loans and receivables, (b) held-to-maturity investments or (c) financial assets at fair
value through profit or loss.
The Group’s AFS investments are unquoted equity investments that are not traded in an active market and stated at cost at the end of each reporting period since their value can’t be
reliably measured. Changes in the carrying amount of AFS monetary financial assets relating to changes in foreign currency rates, interest income calculated using the effective interest
method and dividends on AFS equity investments are recognized in profit or loss. Other changes in the carrying amount of available-for-sale financial assets are recognized in other
comprehensive income and accumulated under the heading of investments revaluation reserve. When the investment is disposed of or is determined to be impaired, the cumulative gain
or loss previously accumulated in the investments revaluation reserve is reclassified to profit or loss.
Dividends on AFS equity instruments are recognized in profit or loss when the Group’s right to receive the dividends is established.
The fair value of available-for-sale monetary financial assets denominated in a foreign currency is determined in that foreign currency and translated at the spot rate prevailing at the
end of the reporting period. The foreign exchange gains and losses that are recognized in profit or loss are determined based on the amortized cost of the monetary asset. Other foreign
exchange gains and losses are recognized in other comprehensive income.
AFS equity instruments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured and derivatives that are linked to and must be settled
by delivery of such unquoted equity investments are measured at cost less any identified impairment losses at the end of each reporting period.
Financial Assets at Fair Value through Profit or Loss
Financial assets at fair value through profit or loss are financial assets held for trading and financial assets designated upon initial recognition at fair value through profit or loss. A financial
asset is classified in this category if acquired principally for the purpose of selling in the short-term. Derivatives are also categorised as held for trading unless they are designated as
hedges. Assets in this category are classified as current assets.
Effective interest method
The effective interest method is a method of calculating the amortised cost of a financial asset and of allocating interest income over the relevant period. The effective interest rate is the
rate that exactly discounts estimated future cash receipts through the expected life of the financial asset, or, where appropriate, a shorter period.
Income is recognised on an effective interest basis for debt instruments other than those financial assets designated as at FVTPL.
3.16 Interest-Bearing Loans and Borrowings
All loans and borrowings are initially recognised at the fair value of the consideration received less directly attributable transaction costs. After initial recognition, interest bearing
loans and borrowings are subsequently measured at amortized cost using the effective interest method. Gains and losses are recognised in net profit or loss when the liabilities are
derecognised, as well as through the amortization process.
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3.17 Derecognition of Financial Assets and Liabilities
Financial assets
A financial asset (or, where applicable a part of a financial asset or part of a group of similar financial assets) is derecognized where:
• the rights to receive cash flows from the asset have expired;
• the Group retains the right to receive cash flows from the asset, but has assumed an obligation to pay them in full without material delay to a third party under a “pass-through”
arrangement; or
• the Group has transferred its rights to receive cash flows from the asset and either (a) has transferred substantially all the risks and rewards of the asset, or (b) has neither transferred
nor retained substantially all the risks and rewards of the asset, but has transferred control of the assets.
Where the Group has transferred its rights to receive cash flows from an asset and has neither transferred nor retained substantially all the risks and rewards of the asset nor transferred
control of the asset, the asset is recognised to the extent of the Group’s continuing involvement in the asset. Continuing involvement that takes the form of a guarantee over the
transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Group could be required to repay.
Financial liabilities
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires.
Where an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an
exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised
in profit or loss.
3.18 Impairment of Financial Assets
The Group assesses at each balance sheet date whether a financial asset or group of financial assets is impaired.
Assets carried at amortized cost
The Group first assesses whether objective evidence of impairment exists individually for financial assets that are individually significant, and individually or collectively for financial
assets that are not individually significant. If it is determined that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, the
asset is included in a group of financial assets with similar credit risk characteristics and that group of financial assets is collectively assessed for impairment. Assets that are individually
assessed for impairment and for which an impairment loss is, or continues to be recognised are not included in a collective assessment of impairment.
If there is objective evidence that an impairment loss has been incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value
of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset’s original effective interest rate (i.e. the effective interest rate
computed at initial recognition). The carrying amount of the asset shall be reduced either directly or through use of an allowance account. The amount of the loss shall be recognised
in profit or loss.
If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the
previously recognised impairment loss is reversed. Any subsequent reversal of an impairment loss is recognised in the profit or loss, to the extent that the carrying value of the asset
does not exceed its amortized cost at the reversed date.
3.18 Impairment of Financial Assets (continued)
Assets carried at cost
If there is objective evidence that an impairment loss on an unquoted equity instrument that is not carried at fair value because its fair value cannot be reliably measured, or on a derivative
asset that is linked to and must be settled by delivery of such an unquoted equity instrument has been incurred, the amount of the loss is measured as the difference between the asset’s
carrying amount and the present value of estimated future cash flows discounted at the current market rate of return for a similar financial asset.
Available-for-sale financial assets
If an available-for-sale asset is impaired, an amount comprising the difference between its cost (net of any principal payment and amortization) and its current fair value, less any
impairment loss previously recognised in profit or loss, is transferred from equity to the income statement. Reversals in respect of equity instruments classified as available-for-sale are
not recognised in profit or loss. Reversals of impairment losses on debt instruments are reversed through profit or loss, if the increase in fair value of the instrument can be objectively
related to an event occurring after the impairment loss was recognised in profit or loss.
3.19 Leases
The determination of whether an arrangement is, or contains a lease is based on the substance of the arrangement and requires an assessment of whether the fulfillment of the
arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset.
Group as a lessee
Finance leases, which transfer to the Group substantially all the risks and benefits incidental to ownership of the leased item, are capitalized at the inception of the lease at the fair value
of the leased property or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between the finance charge and reduction of the lease liability
so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly against income.
Capitalized leased assets are depreciated over the shorter of the estimated useful life of the asset and the lease term.
Operating lease payments are recognised as an expense in the statement of comprehensive income on a straight-line basis over the lease term.
3.20 Trade Payables
Trade payables which generally have an average of 73 days (2013 – 88 days) term are carried at amortized cost by using effective interest method which is the fair value of consideration
to be paid in the future for goods and services received, whether or not billed to the Group.
3.21 Offsetting
Financial assets and liabilities are offset and the net amount reported in the consolidated statement of financial position when there is a legally enforceable right to set off the recognised
amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously.
3.22 Research and Development Costs
Research costs are expensed as incurred and development costs recognized as assets are amortized over their estimated useful lives.
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3.23 Taxation and Deferred Income Taxes
Income tax represents the sum of the tax currently payable and deferred taxes.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the income statement because it excludes items of income or expense
that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Holding and its Subsidiaries’ liability for current tax is calculated using
tax rates that have been enacted or substantively enacted by the balance sheet date.
Deferred tax
Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases which is used in the
computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and
deferred tax assets are recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary
differences can be utilized. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business
combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiaries and associates, and interests in joint ventures, except where the
Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from
deductible temporary differences associated with such investments and interests are only recognised to the extent that it is probable that there will be sufficient taxable profits against
which to utilise the benefits of the temporary differences and they are expected to reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available
to allow all or part of the asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax
laws) that have been enacted or substantively enacted by the balance sheet date. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow
from the manner in which the Company and its Subsidiaries’ expect, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied
by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.
Current and deferred tax for the period
Current and deferred tax are recognised as an expense or income in profit or loss, except when they relate to items credited or debited directly to other comprehensive income, in which
case the tax is also recognised directly in other comprehensive income, or where they arise from the initial accounting for a business combination. In the case of a business combination,
the tax effect is taken into account in calculating goodwill or determining the excess of the acquirer’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and
contingent liabilities over cost.
3.24 Employee Benefits
(a) Defined Benefit Plan:
In accordance with existing social legislation in Turkey, the Group is required to make lump-sum termination indemnities to each employee whose employment is terminated due to
retirement or for reasons other than resignation or misconduct and who has completed at least one year of service with the Group companies.
Such defined benefit plan is unfunded. The cost of providing benefits under the defined benefit is determined using the “Projected Unit Credit Method” based upon estimates of
the Group’s obligations to personnel terminating their services and being eligible to receive such benefits, discounting using the current market yield at the balance sheet date on
government bonds. All actuarial gains and losses are recognized in the other comprehensive income as incurred.
(b) Defined Contribution Plan:
The Group pays contributions to the Social Security Institution of Turkey on a mandatory basis. The Group has no further payment obligations once the contributions have been paid.
The contributions are recognized as employee benefit expense when they are due.
3.25 Revenue Recognition
Revenue
Revenue is measured at the fair value of the consideration received or receivable. Sales are recognized upon delivery of products and customer acceptance, if any, or on the performance
of services. Revenue is reduced for estimated customer returns, rebates, and other similar allowances.
Sale of goods
Revenue from sale of goods is recognized when all the following conditions are satisfied:
• The Group has transferred to the buyer the significant risks and rewards of ownership of the goods;
• The Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
• The amount of revenue can be measured reliably;
• It is probable that the economic benefits associated with the transaction will flow to the Group; and
• The costs incurred or to be incurred in respect of the transaction can be measured reliably.
Rendering of Services
Revenue from rendering of services is recognized by reference to the stage of completion when it can be measured reliably. Where the contract outcome cannot be measured reliably,
revenue is recognized only to the extent of the expenses recognized that are recoverable.
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3.25 Revenue Recognition (continued)
Interest revenue
Interest revenue is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future
cash receipts through the expected life of the financial asset to that asset’s net carrying amount.
Rental income
Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease.
3.26 Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready
for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.
All other borrowing costs are recognized in the statement of income/ (loss) in the period in which they are incurred.
3.27 Contingent Assets and Liabilities
Contingent liabilities are not recognised but disclosed unless the possibility of an outflow of resources embodying economic benefits is remote. A contingent asset is not recognised in
the consolidated financial statements but disclosed when an inflow of economic benefits is probable.
3.28 Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic
benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. The expense relating to any provision is presented in the income
statement, net of any reimbursement. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, where appropriate, the risks
specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognised as a borrowing cost.
3.29 Subsequent Events
Post year-end events that provide additional information about the Group’s position at the date of the statement of financial position (adjusting events), are reflected in the financial
statements. Post-year-end events that are not adjusting events are disclosed in the notes when material.
3.30 Investments in associates and joint ventures
An associate is an entity over which the Group has significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the investee
but is not control or joint control over those policies.
A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the joint arrangement. Joint control is the contractually
agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require unanimous consent of the parties sharing control.
3.30 Investments in associates and joint ventures (continued)
The results and assets and liabilities of associates or joint ventures are incorporated in these consolidated financial statements using the equity method of accounting, except when the
investment, or a portion thereof, is classified as held for sale, in which case it is accounted for in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations.
Under the equity method, an investment in associate or a joint venture is initially recognized in the consolidated statement of financial position at cost and adjusted thereafter to recognize
the Group’s share of the profit or loss and other comprehensive income of the associate or a joint venture. When the Group's share of losses of an associate or a joint venture exceeds
the Group's interest in that associate or a joint venture (which includes any long-term interests that, in substance, form part of the Group's net investment in the associate or a joint
venture), the Group discontinues recognizing its share of further losses. Additional losses are recognized only to the extent that the Group has incurred legal or constructive obligations
or made payments on behalf of the associate or a joint venture.
An investment in an associate or a joint venture is accounted for using the equity method from the date on which the investee becomes an associate or a joint venture. On acquisition
of the investment in an associate or a joint venture, any excess of the cost of the investment over the Group’s share of the net fair value of the identifiable assets and liabilities of the
investee is recognised as goodwill, which is included within the carrying amount of the investment. Any excess of the Group’s share of the net fair value of the identifiable assets and
liabilities over the cost of the investment, after reassessment, is recognised immediately in profit or loss in the period in which the investment is acquired.
The requirements of IAS 39 are applied to determine whether it is necessary to recognize any impairment loss with respect to the Group’s investment in an associate or a joint venture.
When necessary, the entire carrying amount of the investment (including goodwill) is tested for impairment in accordance with IAS 36 Impairment of Assets as a single asset by
comparing its recoverable amount (higher of value in use and fair value less costs to sell) with its carrying amount. Any impairment loss recognized forms part of the carrying amount
of the investment. Any reversal of that impairment loss is recognized in accordance with IAS 36 to the extent that the recoverable amount of the investment subsequently increases.
The Group discontinues the use of the equity method from the date when the investment ceases to be an associate or a joint venture, or when the investment is classified as held for
sale. When the Group retains an interest in the former associate or joint venture and the retained interest is a financial asset, the Group measures the retained interest at fair value at that
date and the fair value is regarded as its fair value on initial recognition in accordance with IAS 39. The difference between the carrying amount of the associate or joint venture at the
date the equity method was discontinued, and the fair value of any retained interest and any proceeds from disposing of a part interest in the associate or joint venture is included in the
determination of the gain or loss on disposal of the associate or joint venture. In addition, the Group accounts for all amounts previously recognised in other comprehensive income in
relation to that associate or joint venture on the same basis as would be required if that associate or joint venture had directly disposed of the related assets or liabilities. Therefore, if a
gain or loss previously recognised in other comprehensive income by that associate or joint venture would be reclassified to profit or loss on the disposal of the related assets or liabilities,
the Group reclassifies the gain or loss from equity to profit or loss (as a reclassification adjustment) when the equity method is discontinued.
The Group continues to use the equity method when an investment in an associate becomes an investment in a joint venture or an investment in a joint venture becomes an investment
in an associate. There is no remeasurement to fair value upon such changes in ownership interests.
When the Group reduces its ownership interest in an associate or a joint venture but the Group continues to use the equity method, the Group reclassifies to profit or loss the proportion
of the gain or loss that had previously been recognised in other comprehensive income relating to that reduction in ownership interest if that gain or loss would be reclassified to profit
or loss on the disposal of the related assets or liabilities.
When a group entity transacts with an associate or a joint venture of the Group, profits and losses resulting from the transactions with the associate or joint venture are recognised in the
Group’s consolidated financial statements only to the extent of interests in the associate or joint venture that are not related to the Group.
111
3.31 Interests in joint operations
A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the assets, and obligations for the liabilities, relating to the
arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require unanimous consent
of the parties sharing control.
When a group entity undertakes its activities under joint operations, the Group as a joint operator recognises in relation to its interest in a joint operation:
• Its assets, including its share of any assets held jointly.
• Its liabilities, including its share of any liabilities incurred jointly.
• Its revenue from the sale of its share of the output arising from the joint operation.
• Its share of the revenue from the sale of the output by the joint operation.
• Its expenses, including its share of any expenses incurred jointly.
The Group accounts for the assets, liabilities, revenues and expenses relating to its interest in a joint operation in accordance with the IFRSs applicable to the particular assets, liabilities,
revenues and expenses.
When a group entity transacts with a joint operation in which a group entity is a joint operator (such as a sale or contribution of assets), the Group is considered to be conducting the
transaction with the other parties to the joint operation, and gains and losses resulting from the transactions are recognised in the Group’s consolidated financial statements only to the
extent of other parties’ interests in the joint operation.
When a group entity transacts with a joint operation in which a group entity is a joint operator (such as a purchase of assets), the Group does not recognise its share of the gains and
losses until it resells those assets to a third party.
When a group entity transacts with its jointly controlled entity, profits and losses resulting from the transactions with the jointly controlled entity are recognized in the Group's consolidated
financial statements only to the extent of interests in the jointly controlled entity that are not related to the Group.
3.32 Derivative Financial Instruments
The Group uses derivative financial instrument such as forward currency contracts to hedge its risks associated with foreign currency fluctuations and interest rate swaps to manage its
exposure to interest rate risk.
The Group is exposed to foreign currency rate risk on purchases and borrowings that are denominated in a currency other than the USD. The Group is also exposed to interest rate risk
due to bank loans.
Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to their fair value at each balance sheet date. The
resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as hedging instrument, in which event the timing of the recognition in
profit or loss depends on the nature of the hedge relationship. The Group designates certain derivatives as hedges of highly probable forecast transactions or hedges of foreign currency
risk of firm commitments (cash flow hedges).
3.32 Derivative Financial Instruments (continued)
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges are deferred in equity. The gain or loss relating to the ineffective portion
is recognised immediately in profit or loss.
The fair value of forward currency contracts is calculated by reference to current forward exchange rates for contracts with similar maturity profiles.
3.33 Significant Accounting Judgments and Estimates
The preparation of the financial statements in accordance with IFRS requires the Group Management to make estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates. These estimates are reviewed periodically, and as adjustments become necessary, they are reported in earnings in the periods in which
they become known. The significant management estimates are as follows:
Doubtful receivables:
The Group recognizes a provision for receivables which are overdue and probable to create collection problems in the future. The provision is recognized by considering guarantees
received for these receivables.
Impairment of inventory:
When the net realizable value of inventory is less than its cost, the inventory is written down to the net realizable value and the expense is included in the statement of income / (loss) in
the period the write-down or loss occurred. When the circumstances that previously caused inventories to be written down below its cost no longer exist or when there is clear evidence
of an increase in the net realizable value due to change in the economic circumstances, the amount of the write-down is reversed. The reversal amount is limited to the amount of the
original write-down.
Useful lives of property, plant and equipment:
Tangible and intangible assets are depreciated and amortized over the useful lives determined by the Group Management (Note 3.11). The Group periodically reviews its useful live
estimates to ensure that they reflect the actual use and expected remaining future benefits to be derived from the use of these property, plant and equipment.
Revaluation of property, plant and equipment:
The Group Management periodically performs independent valuation for land, buildings and flat steel, steel pipe machinery asset groups. These valuations are performed frequently
enough to ensure that the fair value of the revalued assets does not differ materially from its carrying amount. If the Group Management believes that the carrying amount of the
revalued assets does not differ significantly from its fair value, they do not perform a new revaluation exercise. As at the balance sheet date the Group Management has performed a
comprehensive valuation exercise that resulted in approximately USD 98 million increase in revaluation reserve.
Deferred tax assets:
Deferred tax assets are recorded using substantially enacted tax rates for the effect of temporary differences between book and tax bases of assets and liabilities. Currently, there are
deferred tax assets resulting from tax loss carry-forwards and deductible temporary differences, all of which could reduce taxable income in the future. Based on available evidence,
both positive and negative, it is determined whether it is probable that all or a portion of the deferred tax assets will be realised. The main factors taken into consideration include future
earnings potential; cumulative losses in recent years; history of loss carry-forwards and other tax assets expiring; the carry-forward period associated with the deferred tax assets;
future reversals of existing taxable temporary differences; tax-planning strategies that would, if necessary, be implemented, and the nature of the income that can be used to realise
the deferred tax asset. If based on the weight of all available evidence, it is the Group’s belief that taxable profit will not be available sufficient to utilise some portion of these deferred
tax assets, therefore some portion of or all of the deferred tax assets are not recognised. The Group has not recognized deferred tax assets in certain entities because it is not probable
that sufficient taxable profit will be available to recognise deferred tax assets in those entities. If market conditions improve and future results of operations exceed the Group’s current
expectations, the existing unrecognised deferred tax assets may be recognised, resulting in future tax benefits.
113
3.33 Significant Accounting Judgments and Estimates (continued)
Derivatives
The fair value of forward exchange contracts and option contracts are based on their listed market price, if available. If a listed market price is not available, then fair values are derived
from inputs other than quoted prices that are observable for the asset or liability or are derived by discounting the difference between the contractual forward price and the current
forward price for the residual maturity of the contract using a risk-free interest rate (based on government bonds) or option pricing models.
Impairment of goodwill and intangible assets of indefinite useful lives
The Group tests annually whether goodwill and intangible assests of indefinite useful lives have suffered any impairment, in accordance with the accounting policy stated in Note 3. The
recoverable amounts of cash-generating units have been determined based on value-in-use calculations.
Valuation of licenses, license applications and goodwill recognized on business combination
Valuation of the Group’s licenses and license applications was based on discounted cash flows of each projects to determine the fair value of licenses and license applications. Valuation
of the Group’s licenses and license applications was conducted to serve as a basis for allocation of the purchase price to the various classes of assets acquired in accordance with IFRS
3 Business Combinations. For IFRS 3 purposes, fair value is defined as the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties.
In determining the fair value of the licenses and license applications, the Group adopted a "risk-weighted discounted cash flow" methodology whereby the discounted cash flows of each
project, are adjusted by a risk factor. The risk factors are determined by the Group Management following the due diligence conducted for each project, and take into account various
criteria, including the status of the project, licensing status as well as perceived regulatory, environmental and feasibility risks.
4. CHANGES IN GROUP’S ORGANIZATION
The following transactions took place during 2014, which resulted in changes in Group’s organization:
Throughout the year 2014, Borusan Holding purchased additional shares of Borusan Yatırım for USD 507,122 from Istanbul Stock Exchange increasing its direct shareholding to 36.29%
from 36.01%. The Group purchased shares of some of group companies from its shareholders in the current year. The carrying amounts of the Group's interests and the non-controlling
interests are adjusted to reflect the changes in their relative interests in the subsidiaries. The difference between the carrying amount and the consideration paid is recognized directly in
equity as it is a change in ownership interest and does not result in a change in control.
5. DIVIDENDS
In 2014, a dividend of USD 1,855 (2013: USD 3,368) per thousand share (total USD 10,397,502) (2013: USD 18,878,738) was paid to shareholders.
6. CASH AND CASH EQUIVALENTS
31 December 2014
31 December 2013
Banks
-time deposits
364,367,322 282,629,287
-demand deposits
70,589,690 57,447,983
-repurchase agreements with banks
- 315,091
Cash on hand
152,713 169,004
Mutual funds
9,605,717 3,428,624
Other cash and cash equivalents
722,448 34,886
445,437,890 344,024,875
Effective interest rate of time deposits as of 31 December 2014 is between 3% - 13% (2013: 2% - 10%) per annum for TL deposits and between 1% - 3% (2013: 1% - 4%) per annum for the currencies
other than TL deposits.
As of 31 December 2014, there is no repurchase agreement (2013: effective interest rate of repurchase agreement is 6.50% per annum for TL agreements and 2.90% for USD agreements).
Maturities of these time deposits range from 1 day to 35 days (2013: 1 day to 31 days).
As of 31 December 2014, current value of total assets provided under custodian accounts for the management of portfolio management companies amounts to USD 9,605,717 (2013: USD 3,428,624).
Currency breakdown of cash and cash equivalents is as follows:
31 December 2014 31 December 2013
Currency
Currency Amount
USD Equivalent Currency Amount
USD Equivalent
USD
303,031,725
303,031,725 234,842,570 234,842,570
EUR
65,415,624
79,571,284 55,901,989 76,913,363
GBP
374,133
581,222 246,446 406,141
SFR
500
504 499 560
TENGE
318,648,565
1,743,631 157,771,133 1,022,496
TL
140,094,145
60,414,052 60,389,632 28,294,819
8,375,090
95,472 198,625,112 2,544,926
445,437,890 344,024,875
DZD
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7. TRADE RECEIVABLES, net
31 December 2014
31 December 2013
Current trade receivables
Trade receivables
542,502,291 421,800,479
351,268 378,463
Less : Allowance for doubtful receivables (-)
(21,276,386)
(19,733,036)
521,577,173 402,445,906
Trade receivables from related parties (Note 34)
As of 31 December 2014, trade receivables of USD 417,889,345 (2013: USD 302,952,139) were neither past due nor impaired. The average credit period on sales of goods and services
provided is 21 days (2013: 29 days). Interest rates applied for amortized cost computation varies between 9.8% - 17% for TL (2013: 8.3% - 13%), 0.10% - 8% for EUR and 0.20% - 0.30%
for USD (2013: 0.10% - 0.50% for EUR and 0.20% - 0.20% for USD) denominated receivables.
The Group has offset USD 151,169,530 (31 December 2013: USD 228,229,359) from its trade receivables that are collected from factoring companies as a part of irrevocable factoring
agreements as of 31 December 2014.
Collateral received in relation to trade receivables that are neither past due nor impaired is as follows:
31 December 2014
31 December 2013
Letter of guarantee
62,108,090 Mortgages 2,585,237 Guarantee through direct debiting system
55,882,892 Letter of credit related to export receivables
10,083,405 Insured receivables
2,074,403 Other
7,779,825 73,319,360
516,775
56,654,913
2,231,312
1,278,193
4,201,053
140,513,852 138,201,606
As of 31 December 2014, trade receivables of USD 103,687,828 (2013: USD 99,493,767) were past due but not impaired. Trade receivables disclosed below include amounts that are
past due at the end of the reporting period for which the Group has not recognized an allowance for doubtful debts because there has not been a significant change in credit quality and
the amounts are still considered recoverable. The aging analysis of these trade receivables is as follows:
31 December 2014
31 December 2013
22,528,429 45,836,718 21,480,083 8,389,602 5,452,996 10,462,416
36,139,620
32,970,547
10,132,668
9,788,516
103,687,828 99,493,767
Up to 15 days
15 to 30 days
30 to 90 days
90 to 180 days
Over 180 days
7. TRADE RECEIVABLES, net (continued)
Collaterals held for trade receivables that are past due but not impaired at the balance sheet date are as follows:
31 December 2014
31 December 2013
Letter of guarantee
2,837,665 Mortgages 490,995 Guarantee through direct debiting system
3,504 Letter of credit related to export receivables
2,271,873 Insured receivables
522,023 Other
326,684
1,394,665
552,651
285,010
743,448
720,893
1,170,121
6,452,744 4,866,788
As at 31 December 2014, there is no trade receivables that would otherwise be past due or impaired whose terms have been renegotiated (2013: None).
The provision for trade receivables is provided based on estimated irrecoverable amounts from the sales of goods and services provided, determined by reference to past default
experience. As at 31 December 2014, USD 21,276,386 (2013: USD 19,733,036) were impaired and provided for. The aging of these receivables is as follows:
31 December 2014
31 December 2013
Up to 90 days
1,010,254 654,938
90 to 180 days
735,736 557,398
Over 180 days
19,530,396 18,520,700
21,276,386 19,733,036
Movement of allowance of trade receivables is as follows:
1 January - 31 December 2014
At the beginning of the year
Allowance provided during the year
Amounts written-off as uncollectable
Amounts recovered during the year
19,733,036 5,574,142 (329,910)
(1,947,916)
(1,752,966)
23,755,629
4,016,482
(341,679)
(4,453,617)
(3,243,779)
At the end of the year
21,276,386 19,733,036
31 December 2014
31 December 2013
Non - current trade receivable
Other trade receivables
3,012,604
3,183,336
3,012,604
3,183,336
As of 31 December 2014, non-current trade receivables were neither past due nor impaired.
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7. TRADE RECEIVABLES, net (continued)
Currency breakdown of current and non-current trade receivables is as follows:
31 December 2014
Currency
31 December 2013
Currency Amount USD Equivalent Currency Amount USD Equivalent
157,799,677
234,482,598
1,566,181
4,965,507,377
120,034,858
17,397,839
157,799,677
285,223,937
2,433,091
27,171,039
51,763,706
198,327
187,077,962
97,965,880
246,807
4,046,228,188
119,580,323
86,073,124
187,077,962
134,790,699
406,736
26,223,125
56,027,888
1,102,832
524,589,777
405,629,242
USD
EUR
GBP
TENGE
TL
DZD
8. INVENTORIES, net
31 December 2014
31 December 2013
288,526,604 65,915,144 138,029,974 97,730,425 63,760,032 32,595,302 (10,433,115)
285,606,551
54,411,116
132,629,762
116,322,741
88,130,292
23,769,949
(11,973,504)
676,124,366 688,896,907
Merchandise inventories (trade goods)
Goods in transit
Raw materials
Finished goods
Spare parts and operating supplies
Work in process (WIP)
Less : Allowance for NRV of trade goods
Movement of allowance for NRV is as follows:
1 January 31 December 2013
Charge for the year
Provision released
11,973,504 5,000,401 (5,155,981)
(1,384,809)
6,066,932
8,585,017
(3,116,284)
437,839
10,433,115 11,973,504
Provision released during the year represents reversal of NRV impairment, due to the fact that the impaired inventory is sold during the year. Net realizable value of the inventories exposed
to allowance is USD 278,834,768 in 2014 (2013: USD 276,314,606).
9. OTHER RECEIVABLES AND ASSETS
31 December 2014
31 December 2013
Current asset
Prepaid taxes, funds and receivables
10,378,743 7,909,400
Value added tax (VAT) receivable
56,487,526 40,264,831
Other receivables from non-consolidated related companies (Note 34)
30,076,307 13,460,000
Prepaid expenses
10,380,845 9,509,261
Income accruals
9,276,263 14,895,892
Due from personnel (Note 34)
1,627,807 972,818
Advances given
16,465,518 12,135,102
Other
19,453,327 14,573,127
154,146,336
31 December 2014
113,720,431
31 December 2013
Non-current assets
Other receivables from non consolidated related parties (Note 34)
49,968,663 54,952,064
Deposits and advances given
7,844,410 8,872,785
Prepaid expenses
2,002,676 4,417,349
Other
6,238,142 5,901,946
66,053,891
74,144,144
10. GOODWILL
Cost
Goodwill 31 December
31 December
20142013
47,519,907 47,519,907
The Group assesses goodwill for impairment annually. Recoverable amount is determined by calculating the value in use. Principal estimates such as discount rate, growth rate, sale
prices and direct costs are taken into account in assessing the value in use. As of 31 December 2014, the Group assessed the recoverable amount of goodwill and determined that
goodwill associated with the Group’s operations was not impaired.
119
11. PROPERTY, PLANT AND EQUIPMENT
Movement of property, plant and equipment, related accumulated depreciation and provision for impairment for the year ended 31 December 2014 is as follows:
Cost
Land and buildings
Motor vehicles
Construction in progress
Accumulated
31 December
Additions
Disposals Transfers (*) Revaluation depreciation net off of
2013
increase
valued fixed assets
Currency
translation 31 December
reserve
2014
657,724,113
668,055,719
204,866,085
130,423,431
127,483,644
1,331,667
180,867,500
3,129,431
50,645,716
89,878,033
6,871,400
3,240,747
-
95,146,777
(1,342,371)
(26,047,131)
(65,538,302)
(1,991,285)
(6,567,225)
-
(12,224,020)
81,941,704
130,009,451
490,780
5,265,020
295,529
(491,628)
(217,590,628)
169,928,537
56,507,098
-
-
-
-
-
(96,064,988)
(176,634,198)
-
-
-
-
-
(29,511,640)
(10,984,375)
(15,074,360)
(7,674,128)
(2,787,938)
(15,655)
(3,173,335)
785,804,786
691,552,280
214,622,236
132,894,438
121,664,757
824,384
43,026,294
1,970,752,159
248,912,104
(113,710,334)
(79,772)
226,435,635
(272,699,186)
(69,221,431)
1,990,389,175
Less: Accumulated Depreciation
Buildings
(62,765,380) (36,898,943)
122,595
-
-
96,064,988
3,476,740
(224,265,593) (42,560,530)
3,491,797
-
-
176,634,198
13,974,757
(72,725,371)
Motor vehicles
(77,864,235) (15,528,919)
16,837,591
-
-
-
3,694,423
(72,861,140)
(90,665,915)
(7,667,402)
669,056
-
-
-
6,430,557
(91,233,704)
(33,727,978)
(2,108,585)
1,152,317
-
-
-
5,265,451
(29,418,795)
(262,016)
(4,124,942)
-
-
-
-
13,652
(4,373,306)
(489,551,117) (108,889,321)
22,273,356
-
-
272,699,186
32,855,580
(270,612,316)
Net book value
1,481,201,042
140,022,783
(91,436,978)
(79,772)
226,435,635
-
(36,365,851)
1,719,776,859
(*) As of 31 December 2014, USD 79,772 of transfer to rights.
The amount of borrowing costs capitalized during the year is USD 2,342,162 (2013: USD 887,548).
The rate used to determine the amount of borrowing costs eligible for capitalization was between Libor+3.14% and Libor+4%, which is the effective interest rate of the related borrowings
(2013: Libor+3.14% and Libor+4%).
11. PROPERTY, PLANT AND EQUIPMENT (continued)
Movement of property, plant and equipment, related accumulated depreciation and provision for impairment for the year ended 31 December 2013 is as follows:
31 December
Additions
Disposals Transfers (*)
Currency
2012 translation reserve
Revaluation
increase
Cost
Land and buildings
655,189,886 24,281,240 (6,179,055)
(46,741,758)
7,215,253 23,958,547 Machinery and equipment
637,923,353 90,962,056 (51,891,102)
(12,951,488)
4,012,900 - Motor vehicles
194,010,564 72,799,687 (65,350,470)
6,887 3,399,417 - Furniture and fixtures
121,195,991 8,003,486 (1,142,945)
610,341 1,756,558 - Leasehold improvements
116,857,293 2,395,716 (758,146)
8,247,843 740,938 - Other tangible assets
832,821 493,844 - - 5,002 - Construction in progress
90,207,130 128,576,101 (9,976,640)
(32,997,161)
2,431,477 2,626,593 1,816,217,038 327,512,130 (135,298,358)
(83,825,336)
19,561,545 26,585,140 31 December
2013
657,724,113
668,055,719
204,866,085
130,423,431
127,483,644
1,331,667
180,867,500
1,970,752,159
Less: Accumulated Depreciation
Buildings
(52,636,370)
(12,774,703)
826,550 2,577,268 (758,125)
- (62,765,380)
(190,720,969)
(49,147,503)
9,526,419 8,003,885 (1,927,425)
- (224,265,593)
Motor vehicles
(78,565,133)
(14,182,804)
15,830,660 131,239 (1,078,197)
- (77,864,235)
(81,429,893)
(8,269,605)
717,292 (22,933)
(1,660,776)
- (90,665,915)
(27,500,525)
(6,284,420)
450,725 34,905 (428,663)
- (33,727,978)
(255,032)
(2,308)
- - (4,676)
- (262,016)
(431,107,922)
(90,661,343)
27,351,646 10,724,364 (5,857,862)
Net book value
1,385,109,116 236,850,787 (107,946,712)
(73,100,972)
13,703,683 - 26,585,140 (489,551,117)
1,481,201,042
(*) As of 31 December 2013, USD 110,264 of transfer made from intangible assets to machinery and equipment and furniture and fixtures. USD 53,963 of transfer made from tangible
assets to rights. USD 73,157,274 of transfer is made from construction in progress to assets classified as held for sale.
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Market Valuation (fair value assessment)
Land, buildings, flat steel and steel pipe machinery of the Group are revalued in December 2014 by independent professional appraiser, Standart Gayrimenkul Değerleme Uygulamaları
A.Ş., of which the effective date is 31 December 2014. Valuations for those assets were made on the basis of the market value. Initially, the book values of such assets were adjusted to
the revalued amounts and the resultant initial surplus (reserve) net of deferred taxes was credited to revaluation reserve in equity. Accumulated depreciation of the revalued buildings and
machinery and equipment have been eliminated against the gross carrying amounts of related assets as at 31 December 2014 and the net amount is restated to the revalued amount. The
Group Management believes that the carrying amount of the revalued assets does not differ significantly from its fair values hence they have not performed a new revaluation exercise
as at the balance sheet date.
Details of the Group’s fair value hierarchy as at 31 December 2014 and 2013 are as follows:
Level 1
- -Lands & Buildings
Level 1
-Lands & Buildings
- Fair value as at 31 December 2014
Level 2
Level 3
Total
785,804,786
-
785,804,786
Fair value as at 31 December 2013
Level 2
Level 3
594,958,733
- 594,958,733
On disposal of revalued assets, amounts in revaluation reserves relating to that asset are transferred to retained earnings. Further, the depreciation difference realized from the revaluation
surplus is transferred to retained earnings on annual basis as the asset is used by the Group.
Had the revalued assets been carried at cost less any accumulated depreciation and any accumulated impairment losses, the carrying amounts of land, buildings, machinery and
equipment that would have been included in the consolidated financial statements as of 31 December 2014 and 2013.
Movements in revaluation surplus of land, buildings, machinery and equipment before allocation of non-controlling interest are as follows:
1 January -
31 December 2014
Disposal from revaluation reserve
Current year addition revaluation adjustment
Current year decrease revaluation adjustment
Transfer of depreciation difference (net of deferred tax)
between the revalued and original value of assets realized from
revaluation reserve into retained earnings pursuant to IAS 16
320,827,431 (486,567)
200,793,342 - 315,455,367
(2,513,304)
23,912,000
(8,277,820)
(5,476,449)
(7,748,812)
515,657,757
320,827,431
Revaluation reserve included in the consolidated financial statements comprises the following:
31 December 2014
31 December 2013
Revaluation reserve attributable to equity holders of the parent
243,057,014
144,399,338
Revaluation reserve attributable to non-controlling interest
272,600,743
176,428,093
515,657,757
320,827,431
Mortgages and Pledges on Assets
As of 31 December 2014, mortgages on property, plant and equipment amounting to EUR 20,000,000 (equivalent of USD 24,330,900) (2013: EUR 20,000,000 - equivalent of USD
27,517,219).
Finance (Capital) Leases
The Group recognised finance (capital) leases as assets and liabilities in the consolidated statement of financial position at amounts equal at the inception of the lease to the fair value
of the leased property or, if lower, at the present value of minimum lease payments.
The respective carrying value (net book values) of the leased assets, as reflected in the consolidated statement of financial position is USD 2,158,815 (2013: USD 3,128,907).
123
12. INTANGIBLE ASSETS, net
Movement of intangible assets during the year ended 31 December 2014 is as follows:
Rights
Other
Intangibles
Customer
List
Total
Cost at 1 January 2014
66,926,283 35,115,271 32,285,000 134,326,554
Additions
2,897,193 5,498,375 Transfers
79,772 Currency translation reserve
Cost at 31 December 2014
(288,965)
- (1,840,072)
- 8,395,568
- 79,772
- (2,129,037)
69,614,283 38,773,574 32,285,000 140,672,857
(40,271,689)
(22,977,481)
(3,228,500)
(66,477,670)
(3,205,366)
(4,885,764)
(3,228,500)
(11,319,630)
217,621 916,004 (43,259,434)
(26,947,241)
(6,457,000)
(76,663,675)
26,354,849 11,826,333 25,828,000 64,009,182
Rights
Other
Intangibles
Customer
List
Total
Cost at 1 January 2013
Additions
Disposals
Transfers
53,488,006 13,460,146 (87,526)
(125,398)
191,055 23,729,584 10,808,259 (52,907)
- 630,335 32,285,000
-
Cost at 31 December 2013
66,926,283 35,115,271 32,285,000
Accumulated amortization at 1 January 2013
Charge for the year
Disposals
Transfer
(36,514,378)
(3,796,556)
41,851 (71,703)
69,097 (18,986,720)
(3,760,178)
2,628 (233,211)
- (3,228,500)
-
Accumulated amortization at 31 December 2013
(40,271,689)
(22,977,481)
(3,228,500)
26,654,594 12,137,790 29,056,500
Accumulated amortization at 1 January 2014
Charge for the year
Accumulated amortization at 31 December 2014
Net book value at 31 December 2014
- 1,133,625
Movement of intangible assets during the year ended 31 December 2013 is as follows:
Net book value at 31 December 2013
109,502,590
24,268,405
(140,433)
(125,398)
821,390
134,326,554
(55,501,098)
(10,785,234)
44,479
(304,914)
69,097
(66,477,670)
67,848,884
13. TRADE PAYABLES, net
The average maturity of the trade payables is 73 days and average interest rate applied for TL payables is 10% and for USD payables is 3.47% (2013: interest rate applied
for TL is 8% and for USD is 3.08%, maturity 88 days).
31 December 2014
31 December 2013
Current trade payables
Trade payables (*)
698,740,643 636,976,936
Due to related parties (Note 34)
291,099 167,234
699,031,742 637,144,170
31 December 2014
31 December 2013
Non current trade payables
Non-current trade payables (*)
53,943,534 68,210,651
53,943,534 68,210,651
(*) BMGS has obtained USD 12,871,984 (EUR 10,582,070) in short term and USD 54,011,246 (EUR 44,402,694 ) in long term of vendor financing from CAT Financial Services Limited in
2014. The maturities of the finance agreements are in 2017. The interest is fixed at 5,33%. Additionally, BMGS has obtained short-term vendor financing from Societe Generale and ING
Belgium NV/SA amounting USD 111,147,538 (2013: USD 111,048,118) with an average interest rate of Euribor+ 0.85% (2013: Euribor+0.85%). The maturity of the financing agreement
is in 2015 (2013: in 2014).
Currency breakdown of current and non - current trade payables is as follows:
31 December 2013
31 December 2014
Currency
Currency Amount
USD Equivalent
Currency
Amount
USD
Equivalent
USD 280,906,351 EUR 247,635,314 GBP
179,419 TENGE
248,979,331 TL 391,878,028 DZD
18,584,995 280,906,351 301,222,861 278,731 1,362,404 168,993,069 211,860 385,248,987 196,093,748 127,767 103,402,139 104,902,132 21,093,039 385,248,987
269,804,276
210,559
670,137
49,150,603
270,259
752,975,276 705,354,821
14. SHORT-TERM BORROWINGS
Unsecured borrowings
31 December 2014
31 Dcember 2013
589,637,501 543,358,451
4,450,567 -
704,860 407,928 594,792,928 543,766,379
Finance lease obligations Other financial liabilities
The interest rates for TL borrowings are 10.17% (2013: 8.75%). Variable interest rates for EUR borrowings vary between Libor+1.60% - Libor+2.00% (2013: Cof+0.85% - Libor+2.70%).
Fixed interest rates for EUR borrowings vary between 0.92% - 7.15%. (2013: 0.98% - 6.75%). For USD denominated borrowings, variable interest rates vary between Libor+1.20% Libor+4.75% (2013:Libor+0.75% - Libor+5.50%). For USD denominated borrowings, fixed interest rates vary between 0.71% - 6.05% (2013: 0.71% - 7.15%)
There are no secured short term borrowings as of 31 December 2014 and 2013.
125
14. SHORT-TERM BORROWINGS (continued)
Currency breakdown of short-term borrowings is as follows:
31 December 2014
Currency
31 December 2013
Currency
Amount
USD
Equivalent
Currency
Amount
USD
Equivalent
USD 396,804,923 EUR 82,626,097 GBP
584 TL 125,743,452 TENGE
7,467,207,526
DZD
210,118,603 396,804,923 100,506,139 908 54,225,474 40,860,233 2,395,251 321,015,060 88,636,086 795,241 171,033,048 2,568,646,110 211,068,693 321,015,060
121,953,888
1,310,548
80,135,430
16,647,091
2,704,362
594,792,928 543,766,379
15 . LONG-TERM BORROWINGS
31 December 2014
Effective interest rates p.a. (%)
Long - term Borrowings
Finance lease obligations Total loans
Fixed / Variable
USD
Min
Max
EUR
Min
Max
1,013,605,923 Variable Libor+3,00% Libor+5,5% 980,262 Fixed 0,71%
5,72%
Libor+3,7%
2,75%
5,80%
1,014,586,185 Less: Current portion of long-term borrowings
(including interest accruals for long-term borrowings)
Total long-term borrowings, net of current portion (196,305,723)
818,280,462
31 December 2013
Effective interest rates p.a. (%)
Long - term Borrowings
Finance lease obligations Total loans
858,148,096 -
Fixed / Variable
Variable Fixed USD
Min
Max
Libor+2,10% Libor+5,50% 0,71%
5,72%
EUR
Min
Max
Cof+0,85% Libor+3,75%
3,00%
7,15
858,148,096 Less: Current portion of long-term borrowings
(including interest accruals for long-term borrowings)
(126,371,732)
Total long-term borrowings, net of current portion 731,776,364
There is no secured long term borrowing as of 31 December 2014 (2013: EUR 6,000,000).
15. LONG-TERM BORROWINGS (continued)
The redemption schedules of long-term borrowings and long-term financial lease obligations as at 31 December 2014 and 2013 are as follows:
31 December 2014
31 December 2013
Between 1-2 years
Between 2-3 years
Between 3-4 years
Between 4-5 years
More than 5 years
330,133,425 316,220,496 94,105,897 47,051,411 30,769,233 313,178,206
281,347,863
43,816,381
47,280,067
46,153,847
818,280,462
731,776,364
Currency breakdown of long-term and current portion of long-term borrowings are as follows:
31 December 2014
Currency
31 December 2013
Currency
Amount
USD
Equivalent
Currency Amount
USD
755,938,970
EUR
201,562,362
TENGE
661,449,371
GBP
TL 22,836,996
755,938,970
245,179,591
3,619,422
9,848,202
555,102,329
128,237,564
1,416,292,389
179,166
249,991,289
USD
Equivalent
555,102,329
176,441,338
9,178,823
295,264
117,130,342
1,014,586,185 858,148,096
31 December 2014
31 December 2013
16. OTHER PAYABLES PROVISIONS AND EXPENSE ACCRUALS
Current payables and expenses accruals
Accrued expenses
46,849,027 49,398,760
Advances received
41,495,884 26,791,995
Taxes and dues payable
23,379,945 26,011,621
Provision for litigation 5,617,872 5,240,556
Accruals for personnel and board of directors (BOD) premiums 18,814,465 16,029,407
Deferred income
6,778,725 13,585,761
Due to personnel (Note 34)
6,013,714 2,465,870
Due to related parties (Note 34)
9,256 678,766
Derivative financial instruments
616,534 2,736,550
Other 975,281 922,923
150,550,703
143,862,209
31 December 2014
31 December 2013
Non - current payables and expense accruals
Other long-term payables
500,003
1,273,544
Deferred income
935,989
949,088
1,435,992 2,222,632
127
17. TAXES ON INCOME
a) Current Statutory Taxes
The Holding and the subsidiaries which are incorporated in Turkey are subject to taxation in accordance with the tax procedures and the legislation effective in Turkey.
In Turkey, the corporation tax rate for the fiscal year ended 31 December 2014 is 20% (2013: 20%). Corporate tax returns are required to be filed until the twenty fifth of the fourth month
following the balance sheet date and paid in one installment until the end of the fourth month. The tax legislation provides for a temporary tax of 20% to be calculated and paid based on
earnings generated for each quarter. The amounts thus calculated and paid are offset against the final corporate tax liability for the year.
Corporate tax losses can be carried forward for a maximum period of five years following the year in which the losses were incurred. The tax authorities can inspect tax returns and the
related accounting records for a retrospective maximum period of five years.
Undistributed dividends incorporated in share capital are not subject to income withholding taxes. Withholding tax at the rate of 19.8% is still applied to investment allowances relating
to investment incentive certificates obtained prior to 24 April 2003. Subsequent to this date, the investments without investment incentive certificates do not qualify for tax allowance.
Income Withholding Tax
In addition to corporate taxes, companies should also calculate income withholding taxes and funds surcharge on any dividends distributed, except for companies receiving dividends who
are Turkish residents and Turkish branches of foreign companies. Income withholding tax applied in between 24 April 2003 – 22 July 2006 is 10% and commencing from 23 July 2006, this
rate has been changed to 15% upon the Council of Ministers’ Resolution No: 2006/10731. Undistributed dividends incorporated in share capital are not subject to income withholding tax.
Current statutory income tax payable for the years ended 31 December 2014 and 2013 are summarized as follows:
31 December 2014
31 December 2013
Provision for current taxes as per statements of income
- Turkey tax charge
32,347,558 - Kazakhstan tax charge
4,336,136 - Malta tax charge
8,064,632 - Effect of tax recoverable (Malta) (*)
(5,861,603)
- Italy tax charge
74,006 27,476,585
1,340,423
10,308,385
(7,302,647)
-
38,960,729 (29,930,902)
(5,466,950)
5,861,603 31,822,746
(26,375,172)
(1,089,309)
7,302,647
9,424,480 11,660,912
Total statutory income tax charge for the year
Prepaid taxes
Tax receivable (Malta)(*)
Income tax payable
(*) MIT Holding has a tax receivable amounting to USD 5,861,603 classified under current assets. (2013: USD 7,302,647)
17. TAXES ON INCOME (continued)
b) Deferred Taxes
Deferred tax assets and liabilities are based on temporary differences arising between the financial statements as reported for IFRS purposes and the statutory tax financial statements.
Such temporary differences usually result in the recognition of income and expenses in different reporting periods for IFRS and tax purposes. Deferred taxes reflected in the consolidated
statement of financial positions are summarized as follows:
31 December 2014
31 December 2013
4,224,019 1,059,146
Deferred tax liabilities
(113,808,244)
(91,717,120)
Deferred tax asset (liability), net
(109,584,225)
(90,657,974)
Deferred tax assets
Deferred tax assets are recognized for the carry forward of unused tax losses and unused tax credits to the extent that is probable that future taxable profit will be available against which
the unused tax losses and unused tax credits can be utilized.
The breakdown of deferred tax assets/ (liabilities) as of 31 December 2014 and 2013 using the current effective tax rates, are as follows:
31 December 2014
31 December 2013
Net difference between the tax base and the carrying value of inventories
(2,893,681)
Provision for employee benefits obligation
4,828,271 Tax losses carried forward
6,736,901 Other provisions and accruals
4,609,801 Net difference between the tax base and the carrying value of property, plant and equipment mainly arising from remeasurement pursuant to IAS 21
(119,869,468)
Other temporary differences
(718,150)
(2,931,306)
5,009,646
7,484,219
2,048,344
(96,439,731)
(3,755,841)
Total
Less: Valuation allowance for deferred tax assets (*)
(107,306,326)
(2,277,899)
(88,584,669)
(2,073,305)
Deferred tax liability
(109,584,225)
(90,657,974)
(*) Deferred tax asset allowance is provided for specific subsidiaries since sufficient taxable profits will not be available in the foreseeable future. Allowance on deferred tax asset mainly
arises due to tax losses amounting to USD 2,153,679 (2013: USD 1,348,730).
129
17.TAXES ON INCOME (continued)
b) Deferred Taxes (continued)
Expiration schedule of carry forward tax losses is as follows:
31 December 2014
31 December 2013
Expiring in 2014
Expiring in 2015
Expiring in 2016
Expiring in 2017
Expiring in 2018
Expiring in 2019
-
39,128
193,993
210,773
2,727,195
2,171,595
5,862,061
4,816,041
21,611,014
30,183,558
3,290,242-
33,684,505
37,421,095
Movements of deferred tax balances during the years ended 31 December 2014 and 2013 are as follows:
20142013
Beginning balance
Tax charge recognized in the statement of income
Tax credited/(charged) to equity (*)
(90,657,974)
(60,311,035)
4,766,513 (29,302,542)
(25,624,851)
(1,826,423)
1,932,087 782,026
(109,584,225)
(90,657,974)
(*) USD (41,243) (2013: USD 296,698) charge to equity is related to cash flow hedge, USD 58,685 (2013: USD 550,019) charge to equity is related to actuarial losses from Employee
Benefits Obligation and USD (25,642,293) (2013: USD (2,673,140)) charge to equity is related to revaluation of properties.
Reconciliation of taxes by applying the effective tax rates to profit before tax provision as reflected in the statement of comprehensive income for the years ended 31 December 2014
and 2013 is as follows:
31 December 2014
31 December 2013
Net income from ordinary activities before income tax
132,282,127 166,173,600
At statutory income tax rate at 20% (2013 – 20%)
Effect of: Disallowable expenses
Tax exempt income
Non tax deductible translation gain arising from remeasurement
Unused tax losses and tax offsets not recognised as deferred tax assets
Impairment provided for deferred tax asset
(26,456,425)
(4,958,553)
7,878,739 (3,488,988)
(7,128,070)
(40,919)
(33,234,720)
(5,318,063)
1,825,737
(9,951,663)
(14,500,334)
53,755
(34,194,216)
(61,125,288)
18. EMPLOYEE BENEFITS OBLIGATION
Under the Turkish Labor Law, the Group is required to pay termination benefits to each employee 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), achieves the retirement age (58 for women and 60 for men) if the employee has completed one year of
service. The amount payable consists of one month’s salary limited to a maximum for each year of service as of 31 December 2014 of TL 3,438.22 (USD 1,482.69) (2013: TL: 3,254.44
USD 1,524.83).
The maximum payment for retirement payment liability per year of employment is increased to TL 3,541.37 (USD 1,527.17) as of 1 January 2014.
International Accounting Standard No. 19 (“IAS 19”) “Employee Benefits” requires actuarial valuation methods to be developed to estimate the enterprise’s obligation under defined
benefit plans. As detailed in Note 18, such actuarial gains/losses are recognized within other comprehensive income starting from 31 December 2012.
IFRS requires actuarial valuation methods to be developed to estimate the Group’s obligation under defined benefit plans. 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. Accordingly, as of 31 December 2014 and 2013, the following actuarial assumptions
were used in the calculation of the liability:
Interest rate
Expected rates of salary/limit increases
Turnover rate 31 December 2014
31 December 2013
9.7% - 10.2%
9.7 % - 10.2 %
6.00%6.00%
2%2%
Movements of the provision for employee benefits obligation during the years ended 31 December 2014 and 2013 are as follows:
131
18. EMPLOYEE BENEFITS OBLIGATION (continued)
20142013
Beginning of the year
Actuarial (gain) / loss
Interest expense Current service cost Payments
25,048,231 (293,425)
1,078,625 5,194,273 (4,761,500)
(2,124,847)
28,427,376
1,335,338
1,255,459
3,303,937
(6,014,123)
(3,259,756)
End of the year
24,141,357 25,048,231
Equity reconciliation of actuarial gains and losses from employee benefits obligation is as follows:
20142013
Actuarial (gain)/ loss
3,144,192
Deferred tax (628,839)
Actuarial (gain)/ loss (Net) 2,515,353
Non controlling interest
(999,964)
Actuarial (gain)/ loss attributable to equity holders' of the parent 1,515,389
3,437,617
(687,524)
2,750,093
(1,147,773)
1,602,320
Of the total charge of provision for employee benefits obligations, USD 2,362,927 is charged to cost of sales, (2013: USD 809,237 is credited) and USD 3,909,971 (2013: USD 4,289,103)
is charged to marketing and general administrative expenses.
Average number of personnel for the year ended 31 December 2014 was 6,706 (2013: 6,321). During the year ended 31 December 2014, the average number of personnel working
abroad was 1,100 (2013: 955), of which 786 (2013: 760) are located in Middle East and Central Asia, 2 (2013: 2) in the United Kingdom, 90 (2013: 90) in Italy, 35 (2013: 34) in North Africa,
20 (2013: 27) in Malta, 11 (2013: 12) in Cyprus, 156 (2013: 30) in USA.
19. SHARE CAPITAL
Holding’s historical statutory share capital (authorized) consists of 5,605,332,500 shares with a par value of TL 0.01 each as of 31 December 2014 and 2013. The share groups and
privileges assigned to each share group are as follows:
20142013
Group
Voting Rights
TL Share %
TL Share %
A
B
B
B
B
B
B
B
1,2,3
1,3
1,3
1,3
1,3
1,3
1,3
1,3
16,815,998 10,650,122 10,509,988 10,509,988 4,904,656 2,634,506 28,027 40 30,00%
19,00%
18,75%
18,75%
8,75%
4,70%
0,05%
0,00%
16,815,998 10,650,122 10,509,988 10,509,988 4,904,656 2,634,506 28,027 40 30,00%
19,00%
18,75%
18,75%
8,75%
4,70%
0,05%
0,00%
56,053,325
100,00%
56,053,325
100,00%
46,044,080
46,044,080
Yeni Nesil Yönetim ve Danışmanlık A,Ş,
Ali Ahmet Kocabıyık
Ayşe Nükhet Özmen
Fatma Zeynep Hamedi
Zehra Nurhan Kocabıyık
İsmail Sefa Batıbayı
Cemil Bülent Demircioğlu
Borusan İstikbal Ticaret T,A,Ş,
USD equivalent
1. Voting right.
2. Nomination of majority of board members.
3. Board membership nomination.
20142013
Common shares
Shares
(thousand)
Amount
(TL)
Shares
(thousand)
Amount
(TL)
At 1 January
5,605,333 56,053,325 5,605,333 56,053,325
31 December
5,605,333 56,053,325 5,605,333 56,053,325
133
20. RETAINED EARNINGS AND LEGAL RESERVES
Under Turkish Tax Law and Turkish Commercial Code (“TCC”), consolidated reporting for tax and statutory purposes is not recognised. Each company within the Group is treated as an
individual tax paying and statutory entity. The ability of an individual company to distribute dividends to its direct shareholders is dependent on its statutory profits.
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 statutory legal reserves consist of first and second reserves, appropriated in accordance with TCC. TCC stipulates that the first legal reserve is appropriated out of statutory profits
at the rate of 5% per annum, until the total reserve reaches 20% of the entity’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 be used only to offset losses and are not available for any other usage unless they
exceed 50% of paid-in share capital. Dividend distributions are made in TL in accordance with its Articles of Association, after deducting taxes and setting aside the legal reserves as
discussed above.
Revaluation fund from participations and special funds cannot be distributed to the shareholders, but can be added to the share capital.
As of 31 December 2014 and 2013, general and legal reserves including inflation corrections (as per statutory financial statements of the Holding) are as follows (TL):
31 December 2014
31 December 2013
Legal reserves
Revaluation fund from participations
Retained earnings
Special funds Inflation adjustment on capital
Gain on sale of investment to be added onto capital
56,148,916 13,783,557 166,148,389 14,516,111 47,501,810 16,237,255 49,333,728
13,874,872
127,812,008
14,516,111
47,501,810
16,237,255
Retained earnings and legal reserves
314,336,038 269,275,784
21. ASSETS CLASSIFIED AS HELD FOR SALE
As at 31 December 2014 assets classified as held for sale and liabilities associated with assets classified as held for sale is related with İzmit Plant of Borusan Mannesmann Boru.
Spiral welded pipe production facility with a capacity of 250,000 tons/ year which its investments started in Gemlik, has been put into use in 2012, completed its trial productions
successfully and has already started its commercial operations. It is aimed that taking advantage with the facility that costs a total of 110 million investments, in large diameter pipes
used in petroleum and natural gas pipelines’ markets in the way of waterfront strategic location, production elasticity, layout, production capacity and the technology is used.
The production activities in spiral welded pipe facility which was established in Yenidoğan neighborhood near Seka state hospital İzmit / Kocaeli was stopped as a result of newly
activated spiral welded production facility, Sekapark and the urban regeneration projects which are conducted by Kocaeli Metropolitan Municipality. In this direction, Gemlik facilities
which have new production opportunities became active and large diameter pipes which are strategically important for the Group are started to be manufactured.
The details of assets classified as held for sale, liabilities and expenses associated with assets classified as held for sale are as follows:
Property, plant and equipment, and intangible assets, net
Other assets
Assets classified as held for sale
31 December 2013
53,904,794
63,364,794
573,199
573,199
54,477,993 63,937,993
-
Borrowings
Liabilities associated with assets classified as held for sale
31 December 2014
-
-
For the year ended 31 December 2014, there is no profit or loss from discontinuing operations (2013: None)
135
22. NET SALES Domestic Sales
Exports Total
Steel Segment
Steel pipes
253,032,923 543,978,008 Cold rolled coils
290,335,618 48,750,331 Galvanized sheets
436,917,389 80,217,683 Steel servicing
227,764,171 614,635 797,010,931
339,085,949
517,135,072
228,378,806
1,208,050,101 673,560,657 1,881,610,758
Distributorship Segment
Motor vehicles
1,114,268,352 - 1,114,268,352
Auto spare parts and services
141,858,923 - 141,858,923
Earth moving equipment (EME)
321,041,073 152,815,971 473,857,044
Power systems (PS)
102,085,088 54,783,811 156,868,899
EME and PS spare parts and services 111,158,622 128,269,473 239,428,095
1,790,412,058 335,869,255 2,126,281,313
Other Segment
Logistic services
381,193,894 80,389,034 461,582,928
Valves
11,203,784 10,279,846 21,483,630
Miscellaneous 4,993,953 2,997,149 7,991,102
397,391,631 93,666,029 491,057,660
3,395,853,790 1,103,095,941 4,498,949,731
Total
Steel Segment
Steel pipes
356,314,442 318,716,819 Cold rolled coils
278,564,086 111,225,392 Galvanized sheets
381,639,397 95,116,780 Steel servicing
248,141,553 801,269 675,031,261
389,789,478
476,756,177
248,942,822
Domestic Sales
Exports 1,264,659,478 525,860,260 Distributorship Segment
Motor vehicles
880,811,177 - Auto spare parts and services
126,725,305 - Earth moving equipment (EME)
309,725,044 163,184,291 Power systems (PS)
86,950,847 58,423,680 EME and PS spare parts and services 111,034,022 137,353,789 1,515,246,395 1,790,519,738
880,811,177
126,725,305
472,909,335
145,374,527
248,387,811
358,961,760 1,874,208,155
Other Segment
Logistic services
367,205,445 85,641,933 Valves
6,512,643 9,788,104 Miscellaneous
4,524,717 2,839,231 452,847,378
16,300,747
7,363,948
378,242,805 98,269,268 476,512,073
3,158,148,678 983,091,288 4,141,239,966
23. COST OF GOODS SOLD AND SERVICES PROVIDED
Direct raw materials
Labor
Depreciation and amortization expenses
Other production overheads including utilities, repair, maintenance
Net changes in finished goods
Net changes in WIP inventories
Cost of merchandise inventories sold
Cost of services Other cost of sales
1,361,995,619
104,917,721
89,827,249
102,756,205
18,592,316
(8,825,353)
1,789,674,672
490,593,331
28,558,597
1,302,396,462
100,159,665
80,459,489
112,811,873
(22,067,873)
1,964,795
1,518,638,557
457,930,539
88,731,627
3,978,090,357
3,641,025,134
24. SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Personnel expenses
131,805,589
Depreciation and amortization expenses
22,787,272
Consulting, audit and legal fees
21,063,453
Advertising expenses
14,861,707
Board of directors and personnel premium
10,445,898
Travel expenses
8,757,275
Rent expenses
7,884,458
Donations sponsorship
7,800,361
Outsourcing expenses
7,187,884
Insurance 6,120,223
Car rentals and other car expense
5,891,325
Sales distribution expenses
5,254,738
Taxes
4,377,387
Entertainment 4,047,835
Provision for doubtful receivable, net of recoveries
3,626,226
Repair and maintenance expenses
3,306,029 Representation and meeting
2,573,696
Energy
2,566,204
Training 2,547,599
Communication 2,432,920
Food expenses
1,576,215
Provision for lawsuit expenses
1,399,556
Stationary
931,014
Other
19,346,455
112,993,045
20,935,850
21,379,826
14,935,965
19,609,533
8,905,253
8,641,184
6,957,136
6,289,828
6,261,198
6,784,019
5,445,241
4,314,147
3,329,163
(437,135)
4,185,428
2,850,232
3,590,050
2,814,939
3,193,532
2,196,595
984,595
1,078,092
19,055,688
298,591,319
286,293,404
137
25. PERSONNEL EXPENSES
210,907,664 19,542,748 6,272,898 178,554,215
29,500,155
5,098,340
236,723,310 213,152,710
2014
2013
Wages, salaries and other social expenses
Cost of defined contribution plan (employer’s share of social security premiums)
Termination benefits
131,805,589 112,993,045
Labor 104,917,721 100,159,665
Total
236,723,310 213,152,710
88,075,513 13,357,028 75,779,514
15,236,261
Total depreciation charge
101,432,541 91,015,775
Total depreciation
7,456,780 108,889,321 (354,432)
90,661,343
1,751,736 9,430,244 4,679,975
5,699,589
11,181,980 10,379,564
Personnel expenses
26. DEPRECIATION AND AMORTIZATION EXPENSES
Cost of production
Cost of production
Total amortization charge
Total amortization
Total depreciation and amortization expenses
137,650 405,670
11,319,630 10,785,234
120,208,951 101,446,577
27. OTHER OPERATING (EXPENSE) / INCOME, net
Gain on sale of a subsidiary, net (Note 29)
Commission expense
Commission income
Scrap sales
Gain on sale of property, plant and equipment
Warranty income
Rent income
Income from wind project
Other, net
6,920,319(4,219,762)
(4,164,716)
3,000,116
2,596,177
1,385,054
983,271
1,290,870
19,394,446
885,220
575,066
2,165,195
1,317,049
-
28,330,752
(4,358,784)
(3,261,774)
7,068,228
45,770,271
28. FINANCIAL (EXPENSE) / INCOME, net
Financial income:
Interest income
7,236,761 8,339,076
Due date income, net
8,554,026 6,725,580
Other financial income
2,735,058 1,795,930
Total financial income
18,525,845 16,860,586
Financial expense:
Interest expense
(89,542,801)
(76,118,363)
Other financial expense (*)
(11,076,701)
(9,837,190)
Total financial expense
(100,619,502)
(85,955,553)
Financial expense, net
(82,093,657)
(69,094,967)
(*) Other financial expense mainly comprises foreign exchange losses on loans, factoring expenses, letter of guarantee expenses, bank and credit card commissions, certain bank
expenses paid for the loans obtained and other bank expenses.
29. ACQUISTION / DISPOSAL OF SUBSIDIARY
As of 30 June 2014, the Group disposed 100% of the shares of Başkent.
30 June
2014
Book value of net assets disposed
Current assets
Other current assets
Non-current assets
Property, plant and equipment
Intangible asset
2,367,861
1,299,037
Previously recognised impairment reserve
(4,189,804)
Net assets disposed
Consideration received in cash and cash equivalents
179,681
7,100,000
Gain on disposal (Note 27)
6,920,319
702,587
139
30. JOINT VENTURES
Summarized financial information in respect of the Group’s material joint ventures is set out below. The summarized financial information below represents amounts shown in the joint
venture’s financial statements prepared in accordance with IFRS.
Current assets
Non-current assets
Current liabilities
Total
The above amounts of assets and liabilities include the following:
Cash and cash equivalents
Current financial liabilities
(excluding trade and other payables and provisions)
Non-current financial liabilities
Current assets
Non-current assets
Current liabilities
Total
The above amounts of assets and liabilities include the following:
Current financial liabilities
Non-current financial liabilities
Net assets of the joint venture
Proportion of the Group’s ownership interest in the joint venture
Goodwill
Carrying amount of the Group’s interest in the joint venture
Net assets of the joint venture
Proportion of the Group’s ownership interest in the joint venture
Goodwill
Carrying amount of the Group’s interest in the joint venture
Borusan Enerji
14,291,184
279,780,233
(23,609,069)
(154,352,435)
31 December 2014
Borusan Manheim
1,976,663
2,570,093
(2,376,793)
(25,635)
116,109,913
2,144,328
10,534,932
1,716,466
(14,809,486)
(151,089,739)
(1,023,587)
-
Borusan Enerji
28,015,488
210,090,739
(69,279,169)
(73,556,662)
31 December 2013
Borusan Manheim
2,089,587
2,281,421
(3,214,002)
(25,635)
95,270,396
1,131,371
25,404,322
1,985,738
(56,267,059)
(70,320,198)
(1,712,619)
-
31 December 2014
Borusan Enerji
Borusan Manheim
232,220,126
5,404,918
50.00%
46.20%
1,022,898
116,110,063 31 December 2013
Borusan Enerji
190,540,792
50%
1,022,898
95,270,396 2,497,072
Borusan Manheim
2,448,855
46.2%
1,131,371
30. JOINT VENTURES (continued)
Revenue
Profit or loss from continuing operations
Post-tax profit (loss) from discontinued operations
Profit or loss for the year
Other comprehensive income for the year
Dividends received from the joint venture during the year
The above profit (loss) for the year include the following:
Financial (expense)/income,net
1 January-31 December 2014
Borusan Enerji
Borusan Manheim
20,571,895
3,823,832
(14,667,360)
1,019,986
-
(14,667,360)
1,019,986
-
(14,667,360)
1,019,986
-
-
(6,348,633)
(2,593,699)
(81,702)
66,654
(8,424,327)
145,907
1 January-31 December 2013
Borusan Enerji
Borusan Manheim
Revenue
15,264,576
3,442,435
Profit or loss from continuing operations
(20,890,755)
765,151
Post-tax profit (loss) from discontinued operations
-
Profit or loss for the year
(20,890,755)
765,151
Other comprehensive income for the year
-
(20,890,755)
765,151
Dividends received from the joint venture during the year
-
The above profit (loss) for the year include the following:
(10,405,381)
(2,172,001)
(1,198,582)
2,297
Financial income /(expense),net
(6,803,722)
2,218
The movement of Joint Ventures is as follows: Beginning of the period - 1 January
Shares of profit/(loss)
Contribution to capital increase in Joint Ventures
End of the period - 31 December
1 January-
31 December 2014
1 January31 December 2013
96,401,767
91,861,734
(13,647,526)
(20,125,604)
35,500,000
24,665,637
118,254,241
96,401,767
141
31. FINANCIAL RISK MANAGEMENT
(a) Capital risk management
Capital risk management of the Group aims to maximize the profitability through the optimization of the debt and equity balance, while maintaining the continuity of its business
operations.
The capital structure of the Group includes of issued capital, reserves and equity items consisting of retained earnings disclosed in Notes 19 and 20, respectively.
The Group’s cost of capital and capital risks associated with each capital item are assessed by the Board of Directors and the Management of the Holding. Decisions on the dividend
payments or capital increase are made based on those assessments and the Holding aims at balancing its capital structure by borrowing loans or settling its debt amounts.
The Group’s overall strategy is determined in accordance with the financial risk management application framework issued on 22 October 2010.
(b) Significant accounting policies
The details of the Group’s significant accounting policies in respect of financial instruments are disclosed in Note 3 “Summary of significant accounting policies” to the financial
statements.
Categories of financial instruments
31 December 2014
Balance Sheet
Financial Assets
Trade receivables
Other assets
Available for sale investments
Financial Liabilities
Borrowings
Trade payables
Other payables
Derivative financial liabilities
Loans and receivables
(including cash and
cash equivalents)
Available for
sale investments
Financial liabilities at
amortized cost
Derivative financial
instruments
Total
Note
445,437,890
524,589,777
154,146,336
-
1,124,174,003
-
-
-
4,160,262
4,160,262
-
-
-
-
-
-
-
-
-
-
445,437,890 524,589,777 154,146,336 4,160,262
1,128,334,265
6
7
9
-
-
-
-
-
-
-
-
-
-
1,609,379,113 752,975,276 6,022,970 -
2,368,377,359 -
-
-
616,534 616,534 1,609,379,113 752,975,276 6,022,970 616,534 2,368,993,893
14, 15
13
16
16
The carrying value of the financial instruments listed above approximates their fair values as of 31 December 2014.
31. FINANCIAL RISK MANAGEMENT (continued)
Categories of financial instruments (continued)
31 December 2013
Balance Sheet
Financial Assets
Trade receivables
Other assets
Available for sale investments
Financial Liabilities
Borrowings
Trade payables
Other payables
Derivative financial liabilities
Loans and
receivables
(including
cash and cash
equivalents)
Available
for sale
investments
Financial
liabilities at
amortized
cost
344,024,875
405,629,242
113,720,431
-
863,374,548
-
-
-
4,393,238
4,393,238
-
-
-
-
-
-
-
-
-
-
344,024,875
405,629,242
113,720,431
4,393,238
867,767,786
6
7
9
-
-
-
-
-
-
-
-
-
-
1,401,914,475
705,354,821
3,144,636
-
2,110,413,932
-
-
-
2,736,550
2,736,550
1,401,914,475
705,354,821
3,144,636
2,736,550
2,113,150,482
14, 15
13
16
16
Derivative
financial
instruments
Total
Note
The carrying value of the financial instruments listed above approximates their fair values as of 31 December 2013.
143
(d) Objectives of financial risk management
The Group’s treasury is managed by finance departments of subsidiaries and the Holding’s finance department, which is responsible for the control and coordination and the Group’s
finance functions are responsible for determining, assessing and managing the financial risks that the Group companies are exposed to using a proactive approach. This responsibility
includes maintaining a systematical access to international and local markets as well as monitoring and managing the Group’s risk exposure using the in-house reports which analyze
the level and extent of risks. Such risks consist of market risk (including currency risk, interest rate risk and price risk), cash flow risk, maturity risk and liquidity risk.
Risks that are attributable to the Group companies are managed by using the Value-at Risk (VaR) method and policies that are approved by the Board of Directors of each company.
Such policies prescribe the written procedures on the currency risk, interest risk and the use of derivative or non-derivative financial instruments and investments in excess of liquidity.
Compliance with the policies and risk limits are monitored by the Holding’s Finance Function on a daily basis. Idle liquidity is used to utilize alternative earnings via financial instruments
within the limits specified by the BOD.
When appropriate, the Group uses forward agreements as derivative financial instruments to minimize and hedge its risks. The Group has no financial instruments (including derivative
financial instruments) used for speculative purposes.
In order to minimize risk exposure, Borusan Holding Finance Department reports to Group’s Management on a monthly basis, and reports to the Board of Directors of the Holding on a
quarterly basis.
(*) VaR represents the amount of possible loss in one day, with a confidence level of 99%, considering the market volatility in foreign currency exchange rates, capital markets and
interest rates.
(e) Market risk
At the subsidiary level, the Group uses VaR analyses, which is the estimation of maximum loss within a given confidence level (99% probability) over a given period of time.
Risk management is assessed based on the functional currency of each company. The overall Group monitoring is performed in USD which is the functional currency of the Group. Risk
reports are reviewed on a daily, weekly and monthly basis in order to perform a proactive and efficient management.
(f) Foreign currency and interest risk management
The Group is exposed to foreign currency risk arising from a limited level of TL based trade receivables, tax and statutory liability payments caused by the operations of the Group
companies and foreign currency positions held to benefit from higher yields within the limits determined by the BOD of Holding. The Group’s Treasury Management manages and
controls such risk by offsetting the foreign currency assets and liabilities within the Group as well as using forward transactions and options. Fixed/variable costs of current loans are
managed using derivative instruments within the VaR limits by monitoring the global market interest movements, for hedging purposes.
According to VaR analysis performed by Group Management; the Group is primarily exposed to TL and EUR foreign currency risks. As a result of open position follow-up,
as of 31 December 2014, the Group has short position in TL for a USD equivalent amount of USD 21,001,071 and long position in EUR for a USD equivalent amount of USD
154,159,917 (31 December 2013: the Group has long position in TL for a USD equivalent amount of USD 4,490,133 and long position in EUR for a USD equivalent amount of of
USD 98,821,858).
If volatility in capital markets, interest rates and foreign exchange rates is increased by 10% against as of 31 December 2014 keeping all other variables constant, value-at risk amounting
to USD 1,446,470 (2013: USD 4,228,535) as of 31 December 2014 would have been higher by USD 1,587,976 (2013: USD 2,519,916).
(g) Credit risk management
The Group’s credit risk primarily arises from its trade receivables. Such credit risk is managed by limiting the risk through the collaterals received and insuring the receivables. In
managing credit risk, the Group uses instruments such as; Direct Debit System, non-recourse factoring, letters of guarantee, credit insurances and mortgages. The Group monitors
its customer risks on a consistent basis and creditworthiness of the customers are systematically assessed based on the financial position, past experience and other factors. Trade
receivables are reviewed depending on the Group policies and procedures and they are carried at net amounts in the consolidated statement of financial position subsequent to any
provision for doubtful receivables (Note 7). As of 31 December 2014, trade receivables amounting to USD 2,596,426 (2013: USD 1,999,086) have been insured by the Group.
(h) Price risk
The Group is exposed to price risks arising from the impact of the price changes on the steel raw materials and trade inventories. The Group does not use commodity hedge instruments
other than zinc swaps. The Group’s Treasury Management uses derivative financial instruments to mitigate the risk of rising of only zinc prices. There are no global derivative instruments
to be utilized against the adverse price changes on the sales margins. The Group optimizes inventory turnover rates by reviewing the sale-production-purchase balance on a consistent
basis considering the price trend of the steel raw materials and trade goods for future periods and reflects the steel price to the selling prices.
(i) Liquidity risk management
The Group manages its liquidity risk by monitoring its expected and actual cash flows on a consistent basis considering its short, medium and long-time funding and liquidity
requirements.
Liquidity risk tables
Conservative liquidity risk management requires maintaining sufficient cash on hand, availability of sufficient loan transactions and fund sources and ability to close market positions.
Funding risk on current and future potential loan requirements is managed by maintaining the availability of sufficient number of creditors with high quality.
145
The below table shows the contractual maturity analysis of the Group’s non-derivative financial liabilities:
(j) Liquidity risk management (continued)
Liquidity risk tables (continued)
Borrowings
Trade payables
Other payables
Derivative Financial Liabilities
Borrowings
Up to 1 Month 1 Month - 3 Months
83,640,691
189,181,922
106,019,989
267,753,725
29,393,659
9,256
469,287
284,135
219,523,626
457,229,038
Up to 1 Month 1 Month - 3 Months
31 December 2014
3 Months - 1 Year
1 Year - 5 Years More than 5 Years
533,082,483
844,455,031
46,724,468
334,351,214
53,943,534
-
-
-
-
(136,888)
-
867,296,809
898,398,565
46,724,468
31 December 2013
3 Months - 1 Year
1 Year - 5 Years More than 5 Years
Total
1,697,084,595
762,068,462
29,402,915
616,534
Carrying value
1,609,379,113
752,975,276
29,402,915
616,534
2,489,172,506
2,392,373,838
Total
Carrying value
89,051,979
79,965,453
455,608,375
644,161,280
218,217,031
1,487,004,118
1,401,914,475
Trade payables
158,293,312
168,282,538
276,517,314
118,755,985
-
721,849,149
705,354,821
Other payables
28,477,491
678,766
-
-
-
29,156,257
29,156,257
1,584,545
870,531
281,474
-
-
2,736,550
2,736,550
277,407,327
249,797,288
732,407,163
762,917,265
218,217,031
2,240,746,074
2,139,162,103
Derivative Financial Liabilities
Fair value of financial instruments
The fair values of financial assets and financial liabilities are determined and grouped as follows:
•Level 1: the fair value of financial assets and financial liabilities with standard terms and conditions and traded on active liquid markets are determined with reference to quoted market
prices;
•Level 2: the fair value of other financial assets and financial liabilities (excluding derivative instruments) are determined in accordance with generally accepted pricing models based on
discounted cash flow analysis using prices from observable current market transactions; and
• Level 3: the fair value of the financial assets and financial liabilities where there is no observable market data. The fair value of derivative instruments, are calculated using quoted
prices. Where such prices are not available, estimate is made based on discounted cash flow analysis using the applicable yield curve for the duration of the instruments for non-optional
derivatives, and option pricing models for optional derivatives.
Based on the fair value hierarchy, the Group’s financial assets and liabilities are categorized as follow:
Financial Assets - Fair Value Measurement
2014
Level 1
Level 2
Level 3
Total
Financial assets at FVTPL
Investment funds
9,605,717
-
-
9,605,717
Derivative transactions (net)
-
9,605,717
(616,534)
(616,534)
-
-
(616,534)
8,989,183
Level 1
Level 2
Level 3
Total
2013
Financial assets at FVTPL
Investment funds
3,428,624
-
-
3,428,624
Derivative transactions (net)
-
3,428,624
(2,736,550)
(2,736,550)
-
-
(2,736,550)
692,074
147
32. COMMITMENTS AND CONTINGENT LIABILITIES
Guarantee Letters
As at 31 December 2014, the Group is contingently liable for letters of guarantee given mainly to the Government offices, government bids and customers amounting to USD 176,831,963
(2013: USD 139,277,265).
Export Commitments
As at 31 December 2014, total amount of export commitments related to export incentives is USD 429,941,176 and is committed by Borçelik and Borusan Mannesman Boru. (2013:
USD 451,003,126) committed by Borçelik and Borusan Mannesman Boru.
Legal Proceedings
As of 31 December 2014, Borusan Otomotiv, Borusan Oto and Borusan Pazarlama are defendants in certain cases against automobile and service customers whose monetary claims
aggregate approximately to USD 5,238,575 (2013: USD 4,063,653).
Against such claims, reserve amounting to USD 4,726,323 (2013: USD 3,892,310) has been provided in the accompanying consolidated financial statements for Borusan Oto, Borusan
Otomotiv and Borusan Otomotiv Pazarlama as of 31 December 2014.
Other commitment and contingencies
As of 31 December 2014 there are no other commitments and contingencies (2013: None).
33. DERIVATIVE FINANCIAL INSTRUMENTS
As at 31 December 2014 and 2013, the summary of nominal amounts of the forward transactions entered into with various local branches of the foreign banks that were outstanding
are as follows:
Forward Contracts
Purchase Amount
2014
Maturities Between
Purchase
Sell
2013
USD
EUR 14,191,200
49,174,616
TL
USD 40,567,690
42,712,979
USDTL 29,316,371
USD
EUR 257,040
USD
GBP 1,100,253
Average Rate
2014
2013
2014
2013
2 January 2015 - 30 May 2016 2 January 2014 - 26 February 2015 1.2800
1.3466
28 January 2015 - 30 June 2015 2 January 2014 - 26 June 2014 2.3100
2.0902
-
30 June 2015 -
2.4200
-
-
30 March 2015 -
1.2600
-
-
1 March 2015 -
1.590 -
33. DERIVATIVE FINANCIAL INSTRUMENTS (continued)
Interest Rate Swaps
Under interest rate swap contracts, the Group agrees to exchange the difference between fixed and floating rate interest amounts calculated on agreed notional principal amounts. Such
contracts enable the Group to mitigate the risk of changing interest rates on the fair value of issued fixed rate debt and the cash flow exposures on the issued variable rate debt. The fair
value of interest rate swaps at the end of the reporting period is determined by discounting the future cash flows using the curves at the end of the reporting period and the credit risk
inherent in the contract, and is disclosed below. The average interest rate is based on the outstanding balances at the end of the reporting period.
The following tables detail the notional principal amounts and remaining terms of interest rate swap contracts outstanding at the end of the reporting period.
Average contracted fixed interest rate
2014
2013
Notional principal value
2014
2013
Fair value assets (liabilities)
2014
2013
%%
Less than 1 year
2.80 - 44,642,857 - 172,076 -
1 to 2 years
2.80 2.75 18,071,429 10,860,000 - (267,502)
2 to 5 years
2.79 - 2,857,143 - 65,571,429 10,860,000 - 172,076
(267,502)
149
34. BALANCES AND TRANSACTIONS WITH RELATED PARTIES
Balances with related parties
Current
Non Trade
Receivables
Non Current
Trade
Non Trade
Trade
Payables
Current
Non Trade
-
-
-
12,956,145
-
-
December 2014
31
Trade
Borusan Sigorta
3,105
-
-
-
-
-
Sistem Organizasyon
-
25,220,000
-
-
-
-
B&B Havacılık
-
4,727,000
-
8,000,000
-
-
Mitco Singapore PTE, LTD,
Borusan Kocabıyık Vakfı Kültür ve Sanat İktisadi İşletmesi 307,660
-
-
-
-
-
-
1,627,807
-
-
-
6,013,714
40,503
129,307
-
29,012,518
291,099
9,256
351,268
31,704,114
-
49,968,663
291,099
6,022,970
Due from / due to personnel
Other
December 2013
31
Trade
Borusan Sigorta
Current
Non Trade
Receivables
Non Current
Trade
Non Trade
Payables
Current
Trade
Non Trade
2,902
-
-
-
-
-
Mitco Singapore PTE, LTD,
-
-
-
6,629,016
-
-
Sistem Organizasyon
-
6,750,000
-
18,230,000
-
-
B&B Havacılık
-
6,710,000
-
1,350,000
-
-
Borusan Kocabıyık Vakfı Kültür ve Sanat İktisadi İşletmesi 350,815
-
-
-
-
-
-
24,746
972,818
-
-
-
-
28,743,048
-
167,234
2,465,870
678,766
378,463
14,432,818
-
54,952,064
167,234
3,144,636
Due from / due to personnel
Other
34. BALANCES AND TRANSACTIONS WITH RELATED PARTIES (continued)
Transactions with related parties
Borusan Kocabıyık Vakfı Kültür ve Sanat İktisadi İşletmesi
Borusan Sigorta
Sales to Personnel
Borusan Kocabıyık Vakfı Kültür ve Sanat İktisadi İşletmesi
Borusan Sigorta
Sales to Personnel
Other
Service obtained from
related parties 600,000
Sales to
related parties
Other expenses to
related parties
Finance income from
related parties
-
-
-
78,540
-
-
-
-
2,528,798
-
-
678,540
2,528,798
-
-
Service obtained from
related parties Sales to
related parties
Other expenses to
related parties
Finance income from
related parties
1,010,774
-
-
-
275,358
250,001
644,070
-
-
3,225,516
-
-
846,551
-
-
95,815
2,132,683
3,475,517
644,070
95,815
151
34. BALANCES AND TRANSACTIONS WITH RELATED PARTIES (continued)
Compensation of Key Management Personnel
2014 2013
Salaries and other short-term benefits
16,258,744
14,477,402
16,258,744
14,477,402
35. SUBSEQUENT EVENTS
None.
BORÇELİK ÇELİK SANAYİİ TİCARET A.Ş.
Borçelik Çelik Sanayii Ticaret A.Ş.
Ata Mah. 125 nolu Sokak No: 1 16601 Gemlik - Bursa
Phone: 0 224 280 40 00
Fax : 0 224 519 01 30 - 31
www.borcelik.com
BORUSAN HOLDİNG A.Ş.
Rumelihisarı, Baltalimanı Hisar Cad. No: 5 34470
Sarıyer - İstanbul
Phone: 0 212 393 52 00
Fax : 0 212 393 00 01
www.borusan.com
BORUSAN İSTİKBAL TİCARET T.A.S.
Meclisi Mebusan Cad. No: 35 34427 Salıpazarı İstanbul
Phone: 0 212 393 52 00
Fax : 0 212 249 37 22
www.borusan.com
BORUSAN KOCABIYIK VAKFI KÜLTÜR SANAT
İKTİSADİ İŞLETMESİ
İstiklal Cad. No: 213 34433 Tünel - Beyoğlu - İstanbul
Phone: 0 212 336 32 80
Fax : 0 212 252 45 91
www.borusansanat.com
BORUSAN LOJİSTİK DAĞITIM DEPOLAMA
TAŞIMACILIK ve TİCARET A.Ş.
Head Office
Headquarter
Bayar Cad. Şehit Mehmet Fatih Öngül Sok.
Bağdatlıoğlu Plaza No: 3 - 4 - 5 34742 Kozyatağı Kadıköy - İstanbul
Phone: 0216 571 50 00
Fax : 0216 445 77 03-04
www.borusanlojistik.com
www.balnak.com.tr
www.borusanlimani.com
www.etaşımacılık.com
Borusan Port
Ata Mahallesi 125 Nolu Sok. No: 3 16601 Gemlik Bursa
Phone: 0224 270 13 00
Fax : 0224 519 01 53
Çatalca Office
Ferhatpaşa Mah. Trakya Serbest Bölgesi Karşısı
Çatalca - İstanbul
Phone: 0212 473 15 15
Fax : 0212 473 15 22
Güneşli Office
Bağlar Mahallesi, Yalçın Koreş Caddesi Erdinç
Binaları A Blok No: 22 Kat: 3-4. 34209
Güneşli - İstanbul
Phone: 0212 473 15 15
Fax : 0212 473 15 25
Kıraç Office
San. Bir Bulvarı 6. Cadde 3. Bölge No: 2 Plasmen
Ticaret Merkezi Yanı Kıraç - İstanbul
Phone: 0212 886 44 40
Fax :0212 886 32 40
Tepeören Office
1992 Parsel Tepeören Mah. Eski Ankara Yolu Üzeri
34959 Tuzla - İstanbul
Phone: 0216 304 07 60
Fax :0216 304 07 69-70
Ankara Office
Birlik Mah. 7. Cad. No: 45 Çankaya - Ankara
Phone: 0312 496 61 66
Fax : 0312 496 61 44
Bursa Office
Nilüfer Organize Sanayi Bölgesi Akasya Caddesi
No: 7 Nilüfer - Bursa
Phone: 0224 411 07 85
Fax : 0224 411 07 75
İzmir Office
1476/1 Sok. No: 3 İsmet Şen İş Merkezi K: 4 - 5
D: 10 - 12 Alsancak -İzmir
Phone: 0232 464 23 00
Fax : 0232 464 02 52 – 03
Gebze GOSP Office
GOSB İhsandede Cad. No: 102 41430 Gebze Kocaeli
Phone: +90 (262) 751 53 54
Köseköy Vehicle Logistics Center
17 Ağustos Mahallesi İrfan Caddesi No: 49
Köseköy - İzmit - Kocaeli
Phone: +90 262 315 77 20
Fax : +90 262 373 61 37
Mersin Office
İsmet İnönü Bulvarı Kurtuluş Meydanı No: 78 Klas
Plaza B Blok K: 11 No: 20 33100 Mersin
Phone: 0324 239 21 75
Fax : 0324 239 21 74
Borusan Logistics International USA INC
225 Peachtree St., N.E. STE 1100 Atlanta, GA 30303
U.S.A.
Phone: (+1 404) 525-2600
Borusan Logistics International Netherlands
P.O. Box 87459, 1080 JL Amsterdam, The
Netherlands
Phone: +31 0 20 540 89 89
Fax : +31 0 20 540 89 09
Borusan Logistics International Gulf FZE
P.O. Box: 261864 LOB 16235, Jebel Ali Free Zone,
Dubai, United Arab Emirates
Phone: +971 4 881 89 51
Fax : +971 4 881 89 52
Borusan Logistics International Algeria SPA
Cooperative El Rahma No: 122 Dely Brahim – Algérie
Phone: +213 21 33 67 42
Fax : +213 21 33 67 43
Georgia
Chavchavadze 78, 0162 Tblisi - Georgia
Phone: +99 532 33 99 01
Fax : +99 532 33 99 04
BORTRADE ULUSLARARASI TİCARET A.Ş.
Center
Pürtelaş Hasan Mahallesi Meclis-i Mebusan Caddesi No:
35/7 Salıpazarı, Beyoğlu - İstanbul
Borusan Logistics International Kazakhstan
Furmanova Street, 174 B, 3.Floor 050059 Almaty –
Kazakhstan
Phone: +7 727 261 51 22
Fax : +7 727 272 84 50
BORUSAN MANNESMANN BORU SANAYİ VE
TİCARET A.Ş.
Head Office
Meclisi Mebusan Cad. No: 35-37 34427
Fındıklı - İstanbul
Phone: 0 212 393 58 00
Fax : 0 212 293 69 60
www.borusanmannesmann.com
Fabrika ve İdari Merkez
Çayırova Mah. İstanbul Cad. No: 69 Gebze - Kocaeli
Phone: 0 262 654 23 00
Fax: 0 262 654 23 15
www.borusanpaslanmaz.com
Borusan Logistics International Oman LLC
Al Assalah Towers II, Sultan Qaboos Street Office
No: 218, Ghubra, Sultanate Of Oman
P.O. Box: 171, Bareeq Al Shatti, P.C.: 103
Phone: +968 2421 0470-71
Fax : +968 2421 0463
BORUSAN MAKİNA ve GÜÇ SİSTEMLERİ SANAYİ ve
TİCARET A.Ş.
Head Office
Meclisi Mebusan Cad. No: 35/37 34427 Salıpazarı İstanbul
Phone: 0 212 393 55 00
Fax : 0 212 293 88 82
www.bmgs.com.tr
Adana Region (Machinery Business Unit)
Zeytinli Mah. Turhan Cemal Beriker Bulvarı No: 790
Seyhan - Adana
Phone: 0 322 455 26 00
Fax : 0 322 441 09 72
Ankara Region (Machinery Business Unit)
Central and East Anatolia, Black Sea Region (Power
Systems Business Unit)
354 Cadde 1426 Sokak No: 1 PK: 06370
Ostim - Ankara
Phone: 0 312 592 92 00
Fax : 0 312 386 04 44 (Machinery Business Unit)
Fax : 0 312 386 06 32 (Power Systems Business Unit)
İstanbul Region (Machinery Business Unit)
Marmara Region (Power Systems Business Unit)
Cumhuriyet Mh. Güney Yanyol Cad. No: 26 Gebze Kocaeli
Phone: 0 262 679 56 00 (Machinery Business Unit)
Phone: 0 262 653 92 21 (Power Systems Business Unit)
Gemlik Plant
Ata Mah. Sanayi Cad. No: 54/68 16601 Gemlik - Bursa
Phone: 0 224 270 15 00
Fax : 0 224 519 00 14
Halkalı Plant
Halkalı Cad. No: 154 34295 Sefaköy - İstanbul
Phone: 0 212 411 35 00
Fax : 0 212 599 00 15
BM Vobarno Tubi SPA
Via G E Falck 43 25079 Vobarno (BS) - Italy
Phone: +390 (365) 592 247
Fax : +390 (365) 592 256
www.bmvobarno.it
BM Pipe US Houston Plant
4949 Borusan Road Baytown, Houston, Texas 77523
Phone: +1 (281) 918 07 20
BORUSAN MANNESMANN BORU YATIRIM
HOLDİNG A.Ş.
Meclisi Mebusan Cad. No: 35-37 34427
Fındıklı - İstanbul
Phone: 0 212 393 58 00
Fax : 0 212 293 69 60
www.borusanmannesmann.com
BORUSAN MÜHENDİSLİK İNŞAAT VE SANAYİ
MAKİNALARI İMALAT A.Ş.
Head Office
Meclisi Mebusan Cad. No: 35-37 34427 Fındıklı İstanbul
Phone: 0 212 393 58 00
Fax : 0 212 249 19 44
BORUSAN YATIRIM ve PAZARLAMA A.Ş.
Head Office
Meclisi Mebusan Cad. No: 35 - 37 34427 Salıpazarı İstanbul
Phone: 0 212 393 52 00
Fax : 0 212 257 16 39
www.borusan.com
KERİM ÇELİK MAMULLERİ İMALAT ve TİCARET A.Ş.
Head Office
İçerenköy Mah. Çayır Cad. No:1/4 Partaş Center Kat:18
34752 Ataşehir - İstanbul
Phone: 0 216 581 30 00
Fax : 0 216 395 42 65
Manisa Branch
Organize Sanayi Sitesi 3. Kısım Ahmet Tütüncüoğlu Cad.
No: 5 Manisa
Phone: 0 236 226 28 50
Fax : 0 236 213 06 04
Bursa Branch
Nilüfer Organize Sanayi Bölgesi
Manolya Caddesi No: 4/A Nilüfer - Bursa
Phone: 0 224 324 16 01
Fax : 0 224 411 09 97
Adana Branch
Ercan Demir Sanayi Sitesi Ceyhan Yolu 7. km Yeni Mahalle
01340 Sarıçam - Adana
Phone: 0 322 342 14 40
Fax : 0 322 306 00 22
www.kerimcelik.com
Gemlik
Ata Mah. 146 Nolu Sok. No: 2 16601 Gemlik – Bursa
Phone: 0 224 270 16 70-71
Fax : 0 224 519 01 92
www.borusanmuhendislik.com
BORUSAN EnBW ENERJİ YATIRIMLARI ve ÜRETİM A.Ş.
İstanbul Office
Büyükdere Cad. Nurol Plaza A-B Blok No: 255-257 Kat: 4
34398 Maslak - İstanbul
Phone: 0 212 340 27 60
Fax : 0 212 286 39 85
Gebze Yatch Production
Güzeller Organize Sanayi Bölgesi İnönü Mah. Nursultan
Nazarbayev Sok. No: 21 Gebze - Kocaeli
Phone: 0 262 242 14 16
www.borusanmarine.com
Ankara Office
Ankara Ticaret Merkezi Kızılırmak Mah. 1450. Sokak No: 3 A
Blok Kat: 5 No: 31 Çukurambar - Çankaya - ANKARA
Phone: 0 312 459 60 15-17
Fax : 0 312 459 60 19
BORUSAN OTO SERVİS TİC. A.Ş.
Head Office / Avcılar Branch
Firuzköy Bulvarı No: 21 34320 Avcılar - İstanbul
Phone: 0 212 412 04 12
Fax : 0 212 694 34 50
Balabanlı Rüzgar Enerji̇si̇nden Elektri̇k Üreti̇m A.Ş.
Çorlu İlçesi Maksutlu Mah. Rüzgarlı Sok. No: 5
Çorlu - TEKİRDAĞ Pk : 59850
Phone: 0 282 261 91 49
Antalya Branch
Yeşilbayır Mah. Akdeniz Bulvarı No: 68 Döşemealtı Antalya
Phone: 0 242 221 48 20
Fax : 0 242 221 35 33
İstinye Branch
İstinye Mah. Sarıyer Cad. No: 77 34460
İstinye - Sarıyer
Phone: 0 212 359 30 30
Fax : 0 212 323 32 50
Bursa Branch
Görükle Dumlupınar Mah. Laleli Cad. No: 7/A NilüferBursa
Phone: 0 224 441 86 00
Fax : 0 224 441 86 07
Akyurt Branch
Esenboğa Havaalanı Yolu 22. Km 06150
Akyurt - Ankara
Phone: 0 312 840 52 52
Fax : 0 312 398 05 87
Bandırma Enerji̇ ve Elektri̇k Üreti̇m Ti̇c. A.Ş.
Bayramtepe-Kaltepe-Naldöken-Pınarbayır Tepe Mevkii
Bandırma Rüzgar Enerji Santarali
Bandırma - BALIKESİR
Phone: 0 266 713 10 01 - 0 266 713 10 09
Fax : 0 266 713 49 69
Diyarbakır Branch
Fabrika Mah. Elazığ Bulvarı No: 252/2
Yenişehir - Diyarbakır
Phone: 0 412 339 06 00 -01-02-03
Fax : 0412 339 06 09
Çankaya Branch
Uğur Mumcu Cad. No: 8 06700
Gaziosmanpaşa - Ankara
Phone: 0 312 459 80 80
Fax : 0 312 437 40 10
Trabzon Branch
Anadolu Cad. Deliklitaş Mevkii No: 153 - Trabzon
Phone: 0 462 325 59 29
Fax : 0 462 325 54 78
Birlik Branch
Birlik Mah. 448 Cad. No: 43 06610
Çankaya - Ankara
Phone: 0 312 454 15 15
Fax : 0 312 469 35 24
Trakya Branch
Akçaburgaz Mah. Hadımköy Yolu Cad. No: 108
Esenyurt - İstanbul
Phone: 0 212 867 15 00
Fax : 0 212 867 15 40
Adana Branch
Adana - Mersin E5 Karayolu 21. Km 33800
Yenice - Tarsus - Mersin
Phone: 0 324 615 06 15
Fax : 0 324 651 46 26
Marine Office
Ankara Asfaltı No: 71 Çayırova Gebze - Kocaeli
Phone: 0 262 679 56 00
Phone: 0 262 653 92 21
Fax : 0 262 653 05 20
Gaziantep Showroom
Fevzi Çakmak Bulvarı Stad Apt. No: 153/A Gaziantep
Phone: 0 342 322 83 83
Fax : 0 342 322 83 86
Ankara Branch
Saracalar Mah. Özal Bulvarı No: 350 06150
Akyurt - Ankara
Phone: 0 312 590 33 00
Fax : 0 312 590 33 05
www.manheimturkiye.com
Dolmabahçe Branch
Asker Ocağı Cad. No: 6 Süzer Plaza 34367
Şişli - İstanbul
Phone: 0212 377 00 10
BORUSAN DANIŞMANLIK ve ORTAK HİZMETLER A.Ş.
Head Office
Pürtelaş Hasan Mahallesi Meclisi Mebusan Cad. No: 35
Salıpazarı, 34427 Beyoğlu, İSTANBUL
Balgat Branch
Mevlana Bulvarı (Konya Yolu) No: 181/A
Balgat – Ankara
Phone: 0312 253 33 33
Branch
Rumelihisarı Mahallesi Baltalimanı Hisar Caddesi No: 5
34470 Sarıyer, İSTANBUL
Bodrum Branch
Atatürk Bulvarı No: 293/B Bodrum – Muğla
Phone: 0252 311 04 44
Kadıköy Branch
Bayar Caddesi, Şehit İlknur Keleş Sokak, 7 No’lu Hüseyin
Bağdatlıoğlu İş Merkezi 8. Kat 1-2 No’lu Bağımsız Bölümler
34742 Kozyatağı, Kadıköy, İSTANBUL
Borusan Oto Kıbrıs
Sanayi Bölgesi,1. Cadde No.21, Lefkoşa, Cyprus North
Phone: 0 392 225 27 22
Fax : 0 392 225 27 21
Kozyatağı Branch
Sahrayıcedit Mah. Halk Sokak No: 40-44 Kat 8 Kadıköy,
İSTANBUL
İzmir Region (Machinery Business Unit)
Eagean and Western Mediterranean Sales and
Service Office (Power Systems Business Unit)
Ankara Cad. No: 8/1-A/1-B Sütçüler Köyü
Kemalpaşa - İzmir
Phone: 0 232 397 01 00
Mediterranean and South Eastern Anatolia Sales
Office (Power Systems Business Unit)
Reşatbey Mah. Stadyum Cad. Ditaş Apt. 20 01120
Seyhan - Adana
Phone: 0 322 458 11 20
Fax : 0 322 459 48 46
Kazakhstan
Almaty
050018, Suyunbay Cad. No: 157 B - Kyrgyzstan
Phone: +7 727 244 33 77-88
Fax : +7 727 383 18 58
Kyrgyzstan
Bishkek
720040, Erkindik Cad. No: 3/14 - Kyrgyzstan
Phone: +996 312 30 22 31/ 93 80 25
Fax : +996 312 30 22 28
Azerbaijan
Baku
Salyan Cad. 13. km. Shikhov Bakü - Azerbaijan
Phone: +99 412 480 11 82-83-84
Fax : +99 412 480 11 85
Yedigöl Hi̇droelektri̇k Üretim ve Tic. A.Ş.
Aksu Köyü Aksu Santral İspir - ERZURUM
Phone: 0 442 455 21 85 (Aksu) - 0 442 455 21 42 (Yedigöl)
Fax : 0 442 455 21 86
SUPSAN MOTOR SUPAPLARI SANAYİİ ve TİCARETİ A.Ş.
Halkalı Cad. No: 158 34295 Sefaköy - İstanbul
Phone: 0 212 336 32 00
Fax : 0 212 592 72 68 - 540 34 93
www.supsan.com
BORUSAN MANHEIM AÇIK ARTTIRMA ve ARAÇ
PAZARLAMA ve TİC. LTD. ŞTİ.
Center
İstasyon Mah. Şehitler Cad. No: 80-1 34940
Tuzla - İstanbul
Phone: 0 216 560 15 00
Fax : 0 216 560 15 05
www.borusan.com

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