2013 annual report - Doğan Yayın Holding
Transcription
2013 annual report - Doğan Yayın Holding
We enlighten ALL SEGMENTS of society DOĞAN YAYIN HOLDİNG A.Ş. 2013 ANNUAL REPORT DOĞAN YAYIN HOLDİNG A.Ş. 2013 ANNUAL REPORT Doğan Yayın Holding A.Ş. Burhaniye Mahallesi Kısıklı Caddesi No: 65 Altunizade 34676 Üsküdar/İSTANBUL/TURKEY Phone: +90 216 556 90 00 Fax: +90 216 556 91 47 www.dyh.com.tr This annual report was printed on the 100% recycled paper. During production, no damage were wormed trees. CONTENTS At a Glance 02 08 10 12 14 16 18 Who are We? Our Values Our Road Map Our Management Structure Shareholders and Share Performance Message from the Chairwoman Message from the Ceo Operations 22 Highlights of the Year 24 Dyh and the Turkish Media Sector 26 Newspaper Publishing, Printing, Distribution and Trade 28 Magazine and Book Publishing 30 Online Platform 32 Television, Radio and Music Broadcasting and Production 36Digital Tv Platform 37 Other Operations 38 Segment Operations in 2013 Sustainability 42 Corporate Social Responsibility 55 Sustainable Growth and the Environment 55 Doğan Group’s Environmental Policy 56 Doğan Yayın Holding’s Environmental Projects 61 Code of Ethics and Conduct 65 Media Code of Conduct 68 Occupational Health and Safety 70 Human Resources Corporate Governance 72 73 74 76 97 102 103 104 105 Remuneration Policy Internal Audit and Control Risk Management Corporate Governance Principles Compliance Report Other Obligatory Disclosures Audit Committee Resolution Corporate Governance Committee Resolution Board of Director’s Statement of Responsibility on the Approval of the Reports Board of Director’s Resolution on the Approval of the Reports Dividend Distribution 106 Dividend Distribution Policy 107 Dividend Distribution Proposal 108 Dividend Distribution Statement 109 Opinion Letter of the Independent Audit Company on the Annual Report Financial Information 111 Consolidated Financial Statements and Independent Auditor’s Report TODAY, WE ARE MUCH CLOSER TO OUR TARGET AUDIENCE THANKS TO OUR DIGITAL TRANSFORMATION. OUR FOLLOWERS ARE AN INSEPARABLE PART OF OUR PUBLICATIONS. WITH OUR INFLUENTIAL BRANDS AS WELL AS OUR EMPLOYEES AND CUSTOMERS, WE OPEN NEW WINDOWS FOR TURKEY EVERYDAY. At a Glance Operations Sustainability Corporate Governance Dividend Distribution Financial Information Who are We? Who are We? Efficiency-oriented Approach Results IN LEADERSHIP With powerful brands in all areas of media, DYH is the leading media group in the sector. Doğan Yayın Holding A.Ş. (DYH), a subsidiary of Doğan Group of Companies, has been active in the media sector for the last 35 years and is the leading media group in Turkey. Offering high quality products and services, DYH has operations not only in Turkey, but also across a vast region. DYH is active in newspaper, magazine and book publishing, television and radio broadcasting and production, as well as online, printing and distribution. DYH’s content providers include newspapers, magazines, publishing houses, television channels, radio stations, new media enterprises, as well as music and production companies. The Holding’s service providers are made up of distribution, production, digital platform, Internet and printing enterprises, as well as a factoring company. 2 DYH 2013 ANNUAL REPORT All companies under DYH adopt the Holding’s high quality standards and productivity-oriented strategies. With its prudent investments, DYH sets an example for the entire media industry. DYH and its key subsidiaries, Hürriyet Gazetecilik ve Matbaacılık A.Ş. (Hürriyet Gazetecilik), Doğan Gazetecilik A.Ş. (Doğan Gazetecilik) and Doğan Burda Dergi Yayıncılık ve Pazarlama A.Ş. (Doğan Burda), are all publicly traded on the stock exchange Borsa Istanbul A.Ş. (BIST). Business Partnerships Magazine Publishing Book Publishing TV Broadcasting DYH 2013 ANNUAL REPORT 3 At a Glance Operations Sustainability Corporate Governance Dividend Distribution Financial Information Who are We? Who are We? We offer readers HIGH QUALITY PERIODICALS Publishing Doğan Dağıtım, distribution company of DYH, distributes two-thirds of Turkey’s newspapers and magazines to 192 dealers and approximately 26,500 sales points across the country through its wide and effective distribution network all the year round. This amounts to 12,000 different products every single month. DYH is active in newspaper and magazine publishing and publishes five daily newspapers: Hürriyet, Posta, Radikal, Fanatik and Hürriyet Daily News as well as 30 periodicals plus children’s and youth magazines. In addition, the Holding is active in book publishing and in the printing sector through Doğan Ofset and Doğan Printing DYH also imports newsprint and printing Center (seven printing facilities: six in Turkey, material through its subsidiary Doğan one in Germany). Dış Ticaret. The Holding’s other affiliates are Trader Media East (TME), the leading classified ads company in Russia and Central Europe, functioning under Hürriyet and Doğan Media International, which is active in newspaper publishing in Europe. Newspaper Publishing Printing, Distribution and Foreign Trade Magazine and Book Publishing News Agency 4 DYH 2013 ANNUAL REPORT The user-friendly features, creative and reliable content of its classified websites and news portals, mainly in the field of online advertising and journalism, give DYH a significant competitive advantage and enable the Holding to position itself among the industry’s top players. DYH’s content-rich websites are regularly updated and attract the highest number of visitors in Turkey: www.hurriyet.com.tr, www.posta.com. tr, www.cnnturk.com.tr, www.radikal.com. tr, www.fanatik.com.tr, www.kanald.com.tr, www.arabam.com, www.hurriyetemlak.com, www.yenibiris.com Broadcasting In addition, DYH is engaged in the production of TV programs, movies, DYH’s broadcasting activities include advertisements, music videos and film television and radio broadcasting, distribution via its subsidiary D Productions, production and digital broadcasting. Some a leading company in the sector thanks to of the powerful brands under the umbrella its innovative and dynamic approach as well of DYH are television channels such as as advanced technology and a well-qualified Kanal D, CNN Türk and tv2 that add value workforce. Further, InDHouse, the Holding’s to television broadcasting with their rich second production company established in content; radio stations such as Radio D, CNN 2012 and specialized in content production Türk Radio and Slow Türk Radio that are for dramas and other TV programs, has also listened to and preferred by many people; undertaken many successful productions. and D-Smart, Turkey’s fastest growing DYH carries out its overseas television digital platform, which provides TV and broadcasting activities via Kanal D Romania, Internet services to approximately 2 million which has quickly attracted a great deal households. of attention and gained the lead in the Romanian television sector. Other - Financial Services Adding significant value to DYH, Doğan Faktoring plays a key role in eliminating customers’ possible payment problems by conducting large-scale risk analyses into trade receivables with its highly qualified staff. TV & Radio Broadcasting and Production Digital Platform Financial Services DYH 2013 ANNUAL REPORT 5 Who are We? At a Glance Operations Sustainability Corporate Governance Dividend Distribution Financial Information Who are We? We create VALUE for our country DYH has a leading position in newspaper, book and magazine publishing. Doğan Yayın Holding A.Ş. Shareholding Structure Doğan Yayın Holding A.Ş.’s current shareholding structure is as follows (1): Doğan Family 1.90% Traded on Borsa Istanbul (BIST) Doğan Şirketler Grubu Holding A.Ş. 18.08% (1) 80.02% The shareholding structure as of December 31, 2013 and December 31, 2012 is available on page 18. Key Financial Indicators Summary Income Statement (TL thousand) Revenue Gross Profit/Loss Operating Profit/(Loss) EBITDA (1) (2) EBITDA Margin (2) Net Profit /(Loss) Attributable to Equity Holders of the Parent Company (3) Gross Profit Margin Operating Profit Margin (1) (*) (1) (2) (3) 6 2013 2012(*) 2011(*) 2,523,573 2,460,323 2,337,820 652,968 724,729 689,046 13,647 145,822 83,875 211,773 316,423 250,775 8.4% 12.9% 10.7% -187,726 197,242 -1,194,273 25.9% 29.5% 29.5% 0.5% 5.9% 3.6% Restated. Other operating income and expenses, and share of gain on investments accounted for by using the equity method not included. Earnings before Interest, Tax, Depreciation and Amortization (EBITDA) calculated by DYH; amortization of television programming rights and IAS 39 adjustments not included. Net Profit/(Loss) Attributable to Equity Holders of the Parent Company includes discontinued operations profit/loss. DYH 2013 ANNUAL REPORT 2013 2012(*) Current Assets 1,646,201 1,764,209 Non-Current Assets 2,141,729 2,153,793 Total Assets 3,787,930 3,918,002 With all companies under its umbrella, DYH maintained its 2,203,284 leadership position and increased 2,472,989 its financial strength in 2013 4,676,273 Short-term Liabilities 1,498,436 1,687,697 1,830,414 Long-term Liabilities 796,774 813,481 1,770,330 Shareholders’ Equity 1,492,720 1,416,824 1,075,529 2013 2012 2011 Current Ratio (%) 1.10 1.05 1.20 Liquidity Ratio (%) 1.02 0.98 1.11 Debt to Equity Ratio (%) 1.54 1.77 3.35 Summary Balance Sheet (TL thousand) (*) 2011(*) Restated Ratios Shareholders’ Equity (TL thousand) 1,492,720 1,416,824 1,075,529 2013 2012 2011 Debt to Equity Ratio (%) 2013 2012 1.54 1.77 2011 3.35 Current Ratio (%) 2013 2012 2011 1.10 1.05 1.20 DYH 2013 ANNUAL REPORT 7 At a Glance Operations Sustainability Corporate Governance Dividend Distribution Financial Information Our Values Our Values Mission To produce and develop content and media tools for news, entertainment and education and to deliver these to clients through innovative ways. Strategy To offer customized, rich content and entertainment products and services to target audiences. To provide customer-focused services. To diversify and expand sales and distribution channels. To diversify and enhance content distribution channels. To rapidly introduce technological developments into our business. To transform content advantage into value. 8 DYH 2013 ANNUAL REPORT Values ON SIB IL I Corporate Values of DYH CR EA TIV ITY N PIO E TEAMWORK DECISION FAST MAKING IA RESP TY L RE ITY L I B NG I ER DYH 2013 ANNUAL REPORT 9 At a Glance Operations Sustainability Corporate Governance Dividend Distribution Financial Information Our Road Map Our Road Map UNIQUE AND INNOVATIVE Approach in Turkish Media In 2014, DYH aims to increase its advertising revenue in all areas of broadcasting and publishing in addition to its level of innovation and business development targets. 10 DYH 2013 ANNUAL REPORT In 2014, DYH, the long-established and well-known company of the Turkish media sector, will closely follow all developments and changes in media, both in Turkey and overseas. In 2014, Kanal D, which is preferred by many with its creative broadcasting line and original programming, will continue to be an exemplary brand in the Turkish broadcasting sector thanks to its evergrowing program content. Having achieved significant success already in its second year of establishment, tv2 will further enhance its rich program content, which appeals to all age groups. Keeping abreast of technological developments and leading the sector in that sense, CNN Türk began to reach its viewers in high definition format on D-Smart Channel 30 as of April 2013. In 2014, CNN Türk will continue to deliver its news content via all effective channels such as cnnturk. com, the leading news website in terms of speed and reliability. Meanwhile, Doğan TV Holding’s leading production companies, D Productions and InDHouse, will continue to focus on content production. Having achieved great success with its sports content to date, D-Smart will also be offering its subscribers a wide range of movie selections thanks to the content agreements it has signed with global brands such as Sony, MGM and Disney. D-Smart has been continuously updating its D-Smart BLU service in terms of both technical features and customer experience since its launch, and will further enhance and expand D-Smart BLU in 2014. In addition, the Company plans to develop alternative sales channels and thus create more value for subscribers by collaborating with TV manufacturers and other business partners. In 2014, Hürriyet newspaper plans to further enhance its efficiency and access in traditional media, and maintain its strong position in new media as a newspaper that can access readers through every platform. Currently, Hürriyet Group reaches around 6.9 million people via channels such as newspapers, the web, tablet PCs and smartphones. In the coming years, the Group will strive to reach 10 million users and increase the share the Internet contributes to its overall revenue. The Group’s subsidiary Trader Media East, mainly focused on the classified ads segment, aims to complete its transformation from a print media concern to an online media concern and generate 50% of its total revenue from the Internet. Thanks to its strong brands, efficient management and ethical approach to publishing, Doğan Gazetecilik will maintain its consistent growth with news reports and projects that add value to newspaper publishing. Posta, the “best-selling newspaper in Turkey” aims to maintain its leadership position in 2014. Fanatik newspaper plans to position itself as “an integrated sports and entertainment brand offering a newspaper and a digital platform”. Thus, Fanatik will further raise its profile in Turkish sports media by enabling sports enthusiasts to access any content they like, any time they want, via any channel they prefer, and in different visual presentations. Keeping abreast of the changes and innovations in the sector, Doğan Radio Group will further improve its modern technological infrastructure. In 2014, the Group will continue to increase the reach of its radio stations by developing new digital applications and collaborating with various digital platforms. Thanks to its strong brands, efficient management and ethical approach to publishing, DYH will maintain its consistent growth with news and initiative that add value to newspaper publishing. Thanks to its unique and creative approach to publishing, Doğan Burda Magazine Group was the leader of its sector in 2013. The Group aims to maintain its strong position in terms of brand recognition, circulation and advertising as well as its market leadership in 2014. Accordingly, Doğan Burda will focus on improving and enhancing its current portfolio and undertake all necessary investments, including digital platforms. In 2014, DYH aims to increase its advertising revenue in all areas of broadcasting and publishing in addition to its level of innovation and business development targets. To that end, DYH is currently assessing the growth potential of the Turkish advertising sector and directs its efforts in the light of these evaluations. DYH 2013 ANNUAL REPORT 11 At a Glance Operations Sustainability Corporate Governance Dividend Distribution Financial Information Our Management Structure Our Management Structure MODERN and Dynamıc working approach DYH’s entire management team and staff contribute to the sustainable growth of the Holding, in line with a management approach that is open to communication and teamwork, capable of taking the initiative and this is consistent, flexible and transparent. Our Management Approach DYH has embraced the fundamental concepts of equality, transparency, accountability and responsibility outlined in the Corporate Governance Principles and strives to comply with these principles to a maximum extent in all its operations. Together with all the companies under its umbrella, DYH is focused on supporting the development of Turkish media in a more reliable, modern and innovative direction. DYH’s entire management team and staff contribute to the sustainable growth of the Holding, in line with a management approach that is open to communication and teamwork, capable of taking the initiative, and that is consistent, flexible and transparent. DYH regularly undergoes a corporate governance rating assessment. You may access the Holding’s corporate governance rating and reports at www.dyh.com.tr. Our Board of Directors (1) Full Name Y. Begümhan DOĞAN FARALYALI Soner GEDİK Title Chairwoman Vice Chairperson Yahya ÜZDİYEN Executive Board Member Ahmet TOKSOY Board Member - Chief Financial Officer Ertuğrul Feyzi TUNCER Independent Board Member Hacı Ahmet KILIÇOĞLU Independent Board Member Executive Committee (1) Full Name Yahya ÜZDİYEN President Ahmet TOKSOY Member - Chief Financial Officer (CFO) Erem Turgut YÜCEL (1) 12 DYH 2013 ANNUAL REPORT Title Member - Chief Legal Officer Detailed information about the Board of Directors, Board Committees and Members’ résumés are available in the Corporate Governance Principles Compliance Report. Audit Committee (1) Full Name Title Hacı Ahmet KILIÇOĞLU President (Independent Board Member) Ertuğrul Feyzi TUNCER Member (Independent Board Member) Together with all the companies under its umbrella, DYH is focused on supporting the development of Turkish media in a more reliable, modern and innovative direction. Corporate Governance Committee (1) Full Name Title Ertuğrul Feyzi TUNCER President (Independent Board Member) Hacı Ahmet KILIÇOĞLU Member (Independent Board Member) Dr. Murat DOĞU Member Committee for Early Risk Detection (1) Full Name Ertuğrul Feyzi TUNCER Title President (Independent Board Member) Selma UYGUÇ Member Tolga BABALI Member Yener ŞENOK Member Dr. Murat DOĞU Member Ayhan SIRTIKARA Member Korhan KURTOĞLU Member (1) Detailed information about the Board of Directors, Board Committees and Members’ résumés are available in the Corporate Governance Principles Compliance Report. DYH 2013 ANNUAL REPORT 13 Shareholders and Share Performance At a Glance Operations Sustainability Corporate Governance Dividend Distribution Financial Information A CORPORATE and TRANSPARENT Shareholders and Share Performance shareholding structure Doğan Yayın Holding’s historical, authorized and issued capital as of December 31, 2013 and December 31, 2012 is as follows: December 31, 2013 December 31, 2012 Registered Capital Ceiling TL 3,000,000,000 TL 3,000,000,000 Issued Capital TL 2,428,550,000 TL 2,000,000,000 TL 299,985,000 is paid fully and in cash under the requirements set out in the “Issuance Certificate” approved by the Capital Markets Board. The Group has reported to the Capital Markets Board that the transactions and procedures related to the capital increase were performed in accordance with the requirements of the Capital Markets Board and related Communiqués and principles and procedures set out in the “Issuance Certificate”; and as of December 27, 2013, Article 7 “Registered and Issued Capital” of the Articles of Association the capital increase is registered on the condition that the related In accordance with the authority of Article 7 of Doğan Yayın Holding’s Articles of Association, based on Doğan Yayın Holding Board of Directors’ decision issued on October 25, 2013 numbered 2013/27 and the Capital Market Boards’ decree issued on December 6, 2013 numbered 40/1289, the issued capital has been increased to TL 2,428,550,000 from TL 2,000,000,000 through total cash payment. All shares issued representing the cash contribution of TL 428,550,000 per nominal value amounting to TL 0.70 are transferred to the parent company, Doğan Holding, provided that total Shareholders Doğan Holding Share (%) December 31, 2012 (TL thousand) 80.02 1,943,379 75.59 1,511,829 1.90 46,183 2.31 46,183 - - 0.15 3,000 18.08 438,988 21.95 438,988 100.00 2,428,550 100.00 2,000,000 (2) (3) Issued Capital (1) (2) (3) 14 As of December 31, 2013 and December 31, 2012, DYH’s shareholders and their respective percentage of total shareholdings were as follows: December 31, 2013 (TL thousand) Doğan Family Publicly traded on Borsa Istanbul There are no privileged shares in Doğan Yayın Holding. Share (%) (1) Adilbey Holding A.Ş. article shall be amended to reflect the changes arising out of the capital increase in accordance with Paragraph 1(c) of Article 25 “Procedures Subsequent to Capital Increase” of the CMB’s “Share Communiqué” No. VII128.1. Some 80.02% of the shares of Doğan Yayın Holding (31 December 2012: 75.59% shares) are owned by Doğan Holding, which corresponds to 33.42% of the publicly available shares of Doğan Yayın Holding (31 December 2012: 19.00% shares) as of 31 December 2013 and 31 December 2012. Some 3,000,000 publicly available shares of Doğan Yayın Holding with a nominal value of TL 1 each have been acquired by Doğan Holding (parent company of the Group) from Adilbey Holding A.Ş. as of 20 February 2013 in consideration of TL 0.86 per share in cash independent from Borsa İstanbul transactions based on weighted average transaction amount at the first session provided that the transaction price remains within the margins set out in accordance with the Circular “Principles of Establishment and Operation of the Wholesale Market” of Borsa İstanbul. As a result of the above-mentioned transaction disclosed on the Public Diseclouse Platform (PDP) on 20 February 2013, Doğan Holding’s share in Doğan Yayın Holding has become 75.74%. In accordance with the Capital Markets Board’s (the “CMB”) Resolution No: 21/655 issued on 23 July 2010, it is regarded that 17.25% of the shares (31 December 2012: 20.95%) are outstanding as of 31 December 2013 based on the Central Registry Agency (CRA)’s records. Some 51.50% of Doğan Yayın Holding’s shares (31 December 2012: 41.11%) are publicly available as of 31 December 2013 . DYH 2013 ANNUAL REPORT Share Performance As of December 31, 2013, DYH (<DYHOL>)’s market capitalization stood at TL 1,336 million, remaining 14% below TL 1,560 million registered on December 31, 2012. As of December 31, 2013, the closing share prices of Group companies were as follows: Doğan Yayın Holding A.Ş. Hürriyet Gazetecilik ve Matbaacılık A.Ş. Share Price TL 0.55 Number of Shares 2,429 million Market Cap TL 1,336 million BIST Ticker Symbol DYHOL Doğan Gazetecilik A.Ş. Share Price TL 0.60 Number of Shares 552 million Market Cap TL 331 million BIST Ticker Symbol HURGZ Doğan Burda Dergi Yayıncılık ve Pazarlama A.Ş. Share Price TL 1.33 Number of Shares 105 million Market Cap TL 140 million BIST Ticker Symbol DGZTE Share Price TL 2.97 Number of Shares 19.6 million Market Cap TL 58 million BIST Ticker Symbol DOBUR Doğan Yayın Holding A.Ş. Share Price BIST 100 79,642 BIST 100 67,802 DYHOL TL 0.79/share DYHOL TL 0.55/share 02.01.2013 31.12.2013 DYH 2013 ANNUAL REPORT 15 At a Glance Operations Sustainability Corporate Governance Dividend Distribution Financial Information Message from the Chairwoman Message of the Chairwoman With our skilled workforce, solid financial structure and steady growth, WE CONTINUE TO create VALUE The developments in the Turkish advertising market in 2013 indicate 12% growth compared to 2012 Dear Stakeholders, Business Partners and Employees of Doğan Yayın Holding, 2013 was a year of fluctuations in the global economy. However, Turkey’s sound financial policies ensured that it was least affected by the constantly shifting balances and atmosphere of uncertainty. As per the GDP figures of the Turkish Statistical Institute (TÜİK), our country demonstrated a performance in the third quarter of 2013 that exceeded expectations, reaching a growth rate of 4.4%. The IMF predicts that it is expecting the Turkish economy to grow by 3.8% in 2013 and 3.5% in 2014. We believe that thanks to the dynamism of the private sector, the employment opportunities created and a strong financial structure built on sound investment decisions, our country will again shrug off global imbalances and maintain economic consistency. Improvement of human rights 16 DYH 2013 ANNUAL REPORT In 2013, the Turkish economy’s biggest problems were the current account deficit, unemployment and inflation. The current account deficit, which had declined in 2012, did not maintain the same trend in 2013. As per the Central Bank’s announcement, the 2013 current account deficit increased by US$ 16.5 billion compared to the previous year, reaching US$ 65 billion in total. In addition to high energy raw material prices, an imbalance in the exports-to-imports ratio also played a role in this deficit increase. 2013 was also a year when Turkey’s sound financial system received positive assessments from international credit rating organizations like Standard & Poor’s, Moody’s and JCR, all of which raised Turkey’s credit rating. As a result of our ever-increasing success trend, Doğan Yayın Holding’s local currency and foreign exchange credit rating was revised up from “B+” to “BB-” by Fitch Ratings, with a stable outlook. Overall, we are happy to have finished 2013 where we and all the companies under our umbrella started it: with sector leadership positions, strong reputations and reliability. The biggest test we faced at Doğan Yayın Holding was the devaluation of the Turkish lira in late 2013. But thanks to our know-how and experience in the sector, coupled with our strong financial structure, we were minimally affected by this imbalance. In 2013, DYH posted annual revenue of TL 2,524 million. Revenues (TL million) 2013 2012 2,524 2,460 In 2013, we maintained our leadership in newspaper and magazine circulation, and also made major investments in the digital area. In mid-2013, we acquired the Medyanet brand, Turkey’s leading digital advertising network. Meanwhile, D-Smart, Turkey’s fastest growing digital platform, kept its second place market share position thanks to sound investments and an ever-increasing number of subscribers. The developments in the Turkish advertising market in 2013 indicate 12% growth compared to 2012. Specific to DYH, we increased our consolidated advertising revenues by 2% over 2013. Domestic online revenues increased 29% in 2013, outpacing the sector’s 13% growth. Hürriyet Gazetecilik A.Ş. and Doğan Gazetecilik A.Ş., our subsidiaries, increased their 2013 domestic online revenues by 34% and 28.5%, respectively. Moreover, we maintained our sector leadership in average daily newspaper circulation, with a market share of 21%. We ranked first in magazine circulation with a 37% market share, with Doğan Burda and Doğan Egmont both contributing robust numbers. We also increased our consolidated sales revenue by 3%. Overall, 53% of our group’s consolidated revenue came from publishing, 45% from broadcasting, and 2% from other activities. Boasting a well-equipped team, high principles and a dedication to accurate journalism, Doğan Yayın Holding is proud to be able to respond to the news requirements of the entire Turkish media in terms of both media platform and capabilities. We are aware of the significant responsibility bestowed upon us thanks to our strong reputation. As evidence that we take this responsibility seriously, in 2012 we took a step that was exemplary for the sector by revising the Media Code of Conduct we had disclosed in 1999 to ensure that they remained functional. And in 2013, we formed the Doğan Yayın Publishing & Broadcasting Principles Board to ensure implementation of the principles. While supporting the publishing and broadcasting approach of our media companies under the Holding umbrella in universal norms and freedom of press, this Board also contributes to responsible journalism practices. In light of all these developments, and as the global economic recovery continues, we, as a Group, shall continue to represent consistency and trust in Turkish media with our effective risk management. We believe that 2014 will be a year that finds us refining our existing operations, using our dynamism to add value to the industry by leveraging international opportunities, and making innovative investments. We shall continue moving forward with the successful projects we have implemented as Doğan Yayın Holding, and we shall continue adding value to the Turkish economy and the country’s employment with our skilled human capital, sound financial structure and smart business model. Sincerely, Y. Begümhan Doğan Faralyalı In 2013, we continued our social Chairwoman responsibility projects, which develop social awareness with a view to improving conditions in every area. While carrying out initiatives supporting education, the arts, and freedom of expression through the Aydın Doğan Foundation, we completed, with the same enthusiasm and determination we felt on the first day, the ninth year of our “No to Domestic Violence!” campaign, which grows daily thanks to the support of both individuals and entities. Also, we contributed to girls’ education with our “Dad, Send Me to School” project. In fact, each and every company in the DYH Family has contributed to social development via the social responsibility initiatives they support. DYH 2013 ANNUAL REPORT 17 At a Glance Operations Sustainability Corporate Governance Dividend Distribution Financial Information Message from the Ceo Message from the Ceo STEADY GROWTH despite challenges Despite tough global economic conditions, all Group companies managed to maintain steady growth and financial stability in 2013. DYH’s local and foreign currency credit rating was upgraded from “B+” to “BB-”. 18 DYH 2013 ANNUAL REPORT In 2013, international credit rating agencies upgraded our country’s credit rating in light of its strong reliable reputation As the global financial crisis moved into its internationally. However, despite this positive fifth year, recession continued in the Euro progress, the change in US monetary zone, economic growth rate in developing countries slowed down, the balance of world policy direction and its announcement about scaling back bond purchases at the financial power shifted and fluctuations beginning of the summer had a negative in foreign currency exchange rates had effect on our country’s economy. Turkey a negative effect on markets. Amidst was one of the three countries most uncertainties and due to the absence of affected by the Fed’s decision, specifically definite and lasting solutions to the world in terms of foreign currency exchange rate economy, crisis resilience and stability have and stock market performance. Moreover, become important concepts for both despite inflation being on a declining trend, nations and corporations. Our country, unemployment and the current account however, managed to maintain economic deficit became our country’s major problems growth and stability in 2013, thanks to its in 2013. robust banking system. Esteemed Shareholders, In 2013, DYH’s shareholders’ equity rose to TL 1,493 million. Shareholders’ Equity (TL million) 2013 2012 1,493 1,417 Taking into consideration Turkey’s growth potential, IMF announced its 2014 growth forecast for the Turkish economy as 3.5%. And yet, even though the government refrains from implementing “election economics”, achieving this growth rate in 2014 will not be easy because of the pressure of local elections and the presidential elections as well as internal and external tensions. Despite difficult global economic conditions, all of our Group companies managed to maintain steady growth and financial stability in 2013. DYH’s successful performance was recognized by Fitch Ratings with a credit rating upgrade, as in the previous year. The local and foreign currency credit rating of DYH and Hürriyet Gazetecilik ve Matbaacılık A.Ş. was upgraded from “B+” to “BB-”. The Turkish ad market continued to expand in 2013; it is estimated that the overall market grew 12%, from TL 5 billion in 2012 to TL 5.6 billion in 2013. Meanwhile, the TV ad market expanded 20%, while the newspaper ad market contracted 3%. DYH’s publishing revenues maintained the same level of 2012, while broadcasting revenues rose 6%, mainly led by the rise in the digital platform and ADSL subscription revenues of D-Smart. Appealing to a wide audience with its rich and creative programming content, Kanal D was the most-watched TV channel in 2013 with All-Day audience share of 11.65% among A/B SES Group, and All-Day share of 10.21% among All Viewers, according to TNS data for the period January 1-December 31, 2013. As of year-end 2013, Hürriyet Group reached around 6.9 million people daily via channels such as newspapers, the web, tablets and smartphones. The Group continues to improve service quality and accessibility and aims to increase the share that the Internet contributes to total revenue in the coming periods. Thanks to its powerful brands, efficient management and ethical approach to publishing, Doğan Gazetecilik aims to maintain its consistent growth with news reports and projects that add value to newspaper publishing. Meanwhile, Posta, “Turkey’s best-selling newspaper through dealers,” will maintain its strong market position in 2014. Keeping abreast of the latest technological innovations in the sector, CNN Türk took important steps in 2013 toward becoming a powerful communication and news platform. CNN Türk’s live presentations, program content and newsbreaks can be accessed anytime, anywhere via its integrated system including cnnturk.com, CNN Türk Radio, mobile platforms and smartphones. DYH 2013 ANNUAL REPORT 19 At a Glance Operations Sustainability Corporate Governance Dividend Distribution Financial Information Message from the Ceo Message from the Ceo D-Smart, providing TV and Internet services to approximately 2 million households, maintained steady growth in 2013. D-Smart maintained steady growth in 2013, and increased the number of Pay TV subscribers by 19% over the previous year to 1.033 million. Providing TV and Internet services to approximately 2 million households, D-Smart reinforced its second place position in the market in 2013. In 2014, D-Smart will also be offering its subscribers a wide range of movie selections besides sports content, thanks to the content agreements it has signed with global brands such as Sony, MGM and Disney. Offering a wide range of creative and highquality programming, our Radio Group’s audience reach figure was 14.13% in 2013, according to the latest survey conducted in the first quarter of the year. DYH’s Radio Group consists of Radyo D, CNN Türk and Slow Türk Radio, and we have already initiated efforts to build a web portal to include 10 thematic digital radio stations as well as digital broadcasts of Radyo D and Slow Türk. The web portal will become active in 2014, and subsequently we will further expand our digital radio broadcasting operations. 20 DYH 2013 ANNUAL REPORT As a Group, we were negatively affected by foreign exchange rate fluctuations in 2013. Our EBITDA remained lower than that of the previous year due to exchange rate fluctuations and also the negative effect of rising competition on costs. The increase in net financial expenses due to foreign exchange rate losses, constituted the main reason of our Group’s net loss for the period, which amounted to TL 188 million. Accordingly, we raised our capital from TL 2,000,000,000 to TL 2,428,550,000 through restricted rights issue. Moreover, thanks to the cash inflow through the receivables from the subsidiary and real estate sales transactions that took place in 2011 and 2012, our consolidated net debt dropped from TL 1,344 million in 2012 to TL 956 million in 2013. We as the DYH Family continued to adhere to the concepts of equality, transparency, accountability and responsibility outlined in the Corporate Governance Principles, in all of our operations in 2013. As a result of our meticulous efforts, ISS Corporate Services Inc. (ICS), an international corporate governance rating agency, raised our corporate governance rating from 9.00 to 9.03 out of 10, in its report dated July 30, 2013. (*) I would like to extend my gratitude to our employees and investors who have enabled us to forge ahead with confidence to date, as well as to all of our social and economic stakeholders, readers and viewers for their unwavering support. In 2014, we plan to take full advantage of Turkey’s advertising potential and closely evaluate all international partnership and investment opportunities. Respectfully yours, Yahya Üzdiyen In 2014, we plan to take full advantage of CEO Turkey’s advertising potential and closely evaluate all international partnership and investment opportunities. We will continue to set a good example in the Turkish media by remaining committed to ethical, responsible and accurate reporting principles and supporting freedom of expression. Thanks to our innovative approach that enables us to implement new technologies immediately, we will maintain our pioneering role in 2014 as well. (*) ISS Corporate Services Inc. stated with the Public Disclosure Platform announcement on 03.03.2014 that the 2013 corporate governance rating notes for all its clients were revised pursuant to the resolutions made in the CMB meeting of 01.02.2013, no. 4/105. Accordingly, our revised corporate governance rating was disclosed as 8.94. DYH 2013 ANNUAL REPORT 21 At a Glance Operations Sustainability Corporate Governance Dividend Distribution Financial Information Highlights of the Year Highlights of the Year We are demonstrating a STRONG PERFORMANCE for success On September 6, 2013, Fitch Ratings upgraded DYH’s local and foreign currency credit rating from “B+” to “BB-”. In 2013, Doğan Yayın Holding maintained its reputation in the sector and further increased its financial strength along with all the companies under its umbrella. As a result of this sustainable success, DYH’s local and foreign currency credit rating was upgraded from “B +” to “BB-” and its outlook was confirmed as stable by international credit rating agency Fitch Ratings on September 6, 2013. As per the financial performance of DYH, the consolidated revenue of the Company increased 3% to TL 2,524 million in 2013, up from TL 2,460 million in 2012. Publishing accounted for 53% of DYH’s consolidated revenues, while broadcasting contributed 45% and other activities 2%. Digital platform and ADSL subscription revenues increased 32%. 22 DYH 2013 ANNUAL REPORT In 2013, consolidated ad revenue remained on par with the previous year’s figure and stood at TL 1,254 million. Consolidated publishing revenues remained the same as the previous year with TL 1,337 million. Consolidated broadcasting revenues grew 6% over the previous year to TL 1,132 million. As advertising revenues remained at the same levels as the previous year, this was mainly led by 32% growth in digital platform and ADSL subscriber revenues. Depreciation of the Turkish lira against the US dollar, as high as 11% in the last quarter of 2013 and reaching around 20% for the whole year, had negative effects on costs and profitability. In 2013, consolidated gross profit fell 10% from previous year to TL 653 million due to an increase in costs, while EBITDA totaled TL 212 million, which was also below than that of previous year’s. Consolidated Revenue (TL million) 2013 2012 Consolidated Broadcasting Revenue (TL million) 2,524 2,460 While Income from Investment Activities amounted to TL 50 million in 2013 this figure was TL 191 million in 2012 due to both sales profit arising from the sale of the Hürriyet’s building and land, and annulment indemnity of a put option agreement of Turner shares. In addition, net financing expenses rose to TL 346 million with the effect of foreign exchange losses. As a result, DYH’s net loss attributable to the parent company amounted to TL 188 million in 2013. 2013 2012 1,132 1,070 As of 2013 year-end, the consolidated net debt position decreased to TL 956 million from TL 1,344 million in 2012, due to both a restricted rights issue that took place at the end of 2013 and cash inflows arising from notes receivables from fixed asset sales in 2011 and 2012. DYH’s solo net cash position was at TL 45 million as of December 31, 2013. DYH’s consolidated net debt position dropped from TL 1,344 million in 2012 to TL 956 million at year-end 2013. In the January-December 2013 period, DYH’s fixed asset expense totaled TL 158 million (excluding investment property and programming rights). Consolidated broadcasting revenue increased 6% over the previous year, rising to TL 1,132 million. DYH 2013 ANNUAL REPORT 23 At a Glance Operations Sustainability Corporate Governance Dividend Distribution Financial Information DYH and the Turkish Media Sector DYH and the Turkish Media Sector Turkish ad market In 2013, the Turkish advertising market continued to expand. Turkish Media Sector and Ad Market in 2013 Having capped the previous year at TL 5 billion, the Turkish advertising market achieved an estimated 12% growth in 2013, rising to TL 5.6 billion. CONTINUES TO GROW Newspaper ad spending, saw an estimated 3% contraction in 2013, dropping to TL 992 million from TL 1.02 billion in 2012. This fall in ad spending is mainly due to the fact that newspapers face intense competition from the Internet. However, newspapers still maintain their strong position in the ad market and remain the second most popular advertising channel for advertisers. In 2013, television had the highest share in total ad revenue with a 54% share, as in previous years. Accordingly, TV ad spending increased 20% over the prior year, totaling an As in previous years, the Internet continued estimated TL 3 billion. its consistent growth in the ad market in 2013, and it is the third most preferred advertising channel after television and newspaper. It is estimated that online ad spending expanded 13% to TL 827 million as of year-end. In 2013, the Internet’s share in overall ad spending remained at 15%. 24 DYH 2013 ANNUAL REPORT Estimated Ad Spending in Turkey, by Segment (TL million)(*) 2013 2012(*) Change YoY (%) 3,008 2,517 20 Newspaper 992 1,022 -3 Internet 827 734 13 Outdoor 404 383 6 Radio 133 131 1 Magazine 123 124 -1 72 56 29 5,560 4,968 12 TV Cinema Total (*) Newspapers maintained their strong position in the ad market and remain the second most popular advertising channel for advertisers. Estimated figures from the DYH Advertising Platform. Ad Spending by Sector 2013 Share (%) Change YoY (%) 10.0 27.3 Finance 8.4 9.3 Telecoms 7.2 2.7 Construction 6.0 13.3 Cosmetics 5.0 23.6 Publishing (Media) 4.6 2.1 Automotive 4.6 (7.2) Retail 4.4 (0.2) Beverages 3.6 9.4 Furniture 3.1 6.9 Other 43.1 15.3 Total 100.0 11.9 Food Source: DYH Advertising Platform. DYH 2013 ANNUAL REPORT 25 At a Glance Operations Sustainability Corporate Governance Dividend Distribution Financial Information Newspaper Publishing, Printing, Distribution and Trade Newspaper Publishing, We present a Printing, Distribution and Trade DISTINCT EXPERIENCE for our readers As one of Turkey’s most widelyread newspapers, the print version of Hürriyet reaches out to 1.6 million individuals every day according to BİAK data. In addition, Hürriyet reaches a total of 6.9 million people per day through web, mobile and tablet channels. Newspaper Publishing Hürriyet Hürriyet has been the symbol of good journalism and reliability in the Turkish press with its ethical and modern approach to journalism since its inception in 1948. Hürriyet opens new windows in the lives of its readers with its authentic journalism approach, rich content and supplements that reflect the varied colors of life. Hürriyet also offers special channels to advertisers through its supplements. As one of Turkey’s most widely-read newspapers, the print version of Hürriyet reaches out to 1.6 million individuals every day according to BİAK data . In addition to the printed newspaper, Hürriyet reaches a total of 6.9 million people per day through web, mobile and tablet channels. Posta Since its establishment in 1995, Posta retains its title as the “Turkey’s best-selling and most-read newspaper” with its rich content and dynamic journalism approach that appeal to a wide audience. According to BİAK data, Posta is the newspaper with the highest reach with a total average of 2.5 million individuals daily. 26 DYH 2013 ANNUAL REPORT Radikal Started to be published by Hürriyet Group with a new print dimension and content approach since October 2010, Radikal plays a pioneering role in the Turkish press with its creative initiatives. Offering extensive content, varying from foreign policy to culture and the arts, Radikal is the choice of those who want to reach independent information on every issue. As of December 2013, Radikal adopted a “digital first” strategy and implemented a new application on its radikal.com.tr website, which soon became a pioneer in the industry. The new design of the radikal.com.tr website, which became faster and more detailed with its dual home page structure, is gaining the admiration of readers with the addition of new categories. Fanatik As the leading brand of sports journalism, Fanatik has been maintaining its strong position in the Turkish sports press with its high quality content that has reached out to readers of all ages for 18 years. Fanatik is differentiated through its e-newspaper, live web TV, smart mobile phone, tablet, social media and live score applications and became a pioneer in its segment. According to the BİAK report(1), with a total average daily reach of 1.4 million individuals, Fanatik is ranked fourth among all newspapers. Distribution, Printing and Trade Doğan Media International Established in 1999 to carry out DYH’s Doğan Dağıtım (Yaysat) European operations, Doğan Media Doğan Dağıtım, the widest-reaching media International prints 23 periodical titles distribution network in Turkey, carries out published on four continents in eight nationwide distribution of 23 national and 11 languages, Hürriyet in particular. In addition Hürriyet Daily News As our country’s oldest newspaper in English, regional newspapers; 10 daily, 21 weekly, five to Hürriyet, German and neighboring biweekly, 136 monthly and 207 bimonthly Hürriyet Daily News is a respected and national editions of the international and longer-period domestic magazines, as trusted news source followed by diplomats daily economic newspapers The Wall well as 313 foreign publications. and expatriates living in Turkey. As a result, Street Journal and The Financial Times, Hürriyet Daily News meets an important the American publication Stars & Stripes, need in the Turkish press, in which it entered Doğan Printing Center (DPC) regional editions of Germany’s highestThe Doğan Printing Center (DPC) facility 50 years ago. circulated newspaper Bild, the leading is the largest printing center in Turkey with German equine sports paper Sportwelt, its modern and advanced technology TME Arabic publications Asharq Al-Awsat and infrastructure, state of the art production TME engages in classified print and online Al-Ahram are among the titles printed at the facility. Other periodical publications advertising mainly in real estate, automobile, techniques, machinery park and high production capacity. DPC is well known career and human resources, through include Info & Tips from Poland, China Daily and preferred across the world with its high and People’s Daily from China, Urishinmun publishing daily and weekly newspapers, quality standards and advanced technology. from Korea, Vecer from Macedonia, Rhein magazines and websites. DPC carries out printing of weekly, monthly Hunsrück from Rheinland-Pfalz region, as and periodic magazines of the Doğan Yayın well as The Security Times and New Europe, News Agency Holding newspapers as well as non-Group two important publications deemed among newspapers and their supplements on a the major sources by opinion leaders. With Doğan Haber Ajansı (DHA) Doğan Haber Ajansı was established in 1999 contractual basis at its facilities located in six all these publications, the total number of cities in Turkey and also one in Germany. newspapers printed amounts to 300,000 on the deep-rooted know-how of Mil-Ha units per day. and Hürriyet Haber Ajansı of Doğan Group. Doğan Ofset Since its establishment, DHA has met the Doğan Ofset, which prints magazines, Doğan Dış Ticaret reliable and high quality news, images and Doğan Dış Ticaret is mainly involved in photo needs of Turkish media with its expert supplements, brochures and inserts, is one of the leading companies with its advanced agency activities and newspaper-magazine and well-skilled reporters, cameramen and printing capacity not only in Turkey, but live broadcast teams. With the slogan of paper and printing materials imports. In also in the Middle East and the Balkans. “Sadece Haber, Tam Zamanında” (Only addition, Doğan Dış Ticaret carries out Doğan Ofset enjoys a significant competitive imports and marketing of promotional News, Just in Time), DHA swiftly delivers advantage with its superior service quality, the right news to its subscribers with a products and various other products subject professional team, customer-specific commitment to objectivity. DHA acts to e-commerce such as furniture, textiles and solutions, effective distribution organization clothing; and satellite receiver systems for in line with Doğan Yayın Broadcasting and machinery park. Principles, which are parallel to the receiving satellite broadcasts. fundamental principles of journalism, and is an important source for the international press for developments in Turkey and the neighboring region. (1) BİAK, Turkey readership survey, 12-3 cumulative period data. DYH 2013 ANNUAL REPORT 27 At a Glance Operations Sustainability Corporate Governance Dividend Distribution Financial Information Magazine and Book Publishing Doğan Burda had a 32% market share in 2013 with its four weekly, 22 monthly and four specialperiod magazines, and with other publications. 28 DYH 2013 ANNUAL REPORT Magazine and Book Publishing In magazine and book publishing, we MAKE SUBSTANTIAL INVESTMENTS Doğan Burda Dergi Doğan Burda, operating under the name Doğan Burda Dergi Yayıncılık ve Pazarlama A.Ş. since July 2005, is the leader in Turkish magazine publishing with its authentic and creative magazines. In 2013, the company achieved a sales volume of 5.96 million units and a market share of 32% with four weekly, 22 monthly and four special-period magazines as well as 50 publications that are published at other various periods. Doğan Burda has continued to invest in magazine publishing and introduced valuable publications to Turkish media in 2013. The world’s best-selling travel / geography magazine Geo and its valuable sub-brand Geo Saison, joined the Doğan Burda portfolio with a successful launch made in March 2013. In April 2013, Pozitif, a personal development guide that is to be published quarterly, was launched. In May 2013, Nexxt, a free tablet magazine on technology that is to be published every two weeks, was launched. Spa & Wellness, a bimonthly magazine targeting everyone who is looking for a healthy and wholesome lifestyle, joined the Doğan Burda portfolio in September 2013. In addition, a licensed watch magazine appealing to the luxury segment, Revolution, started to be published quarterly in December 2013. Doğan Egmont Founded in 1996 with the “Reading is the future” philosophy, Doğan Egmont is Turkey’s leading magazine and book publishing house for children aged 0-14. The Company currently has more than 1,000 books and 19 magazines in its vast portfolio, ranging from entertainment to education and social values. Doğan Kitap Operating since 1999, Doğan Kitap publishes outstanding works of Turkish literature as well as the best examples of contemporary world literature in the Turkish language. Doğan Kitap maintains its strong position in the world of literature by publishing books that are listed at the top of the best seller lists and have high sales figures. Doğan Egmont is Turkey’s leading publishing house in the magazine and book segment for the age group 0-14. Dergi Pazarlama Planlama (DPP) DPP is the sole strong name in the field of magazine marketing and planning with its powerful international partnership and pioneering achievements. DYH 2013 ANNUAL REPORT 29 At a Glance Operations Sustainability Corporate Governance Dividend Distribution Financial Information Online Platform Online Platform We create CONTENT-RICH WEBSITES for everyone Online Ad Marketing Doğan İnternet Yayıncılığı ve Yatırım A.Ş. (MedyaNet) The leading online ad marketing company in Turkey, MedyaNet operates in display, mobile, online video, performance-driven digital marketing and social media. MedyaNet identifies advertising spaces of internet-based communication channels together with Turkey’s leading publishers and submits to advertisers. The company also manages publication, reporting and performance management processes of these advertisements. News Portals hurriyet.com.tr Hürriyet is one of the first newspapers that went online in Turkey with its website hurriyet.com.tr which launched in 1997. Hurriyet.com.tr maintained its leadership in digital publishing throughout 2013 with 2.1 million daily visitors on average. posta.com.tr Posta.com.tr was launched in 2009 to bring the rich content of the Posta newspaper to online readers. Among the leaders of online journalism, as of December 2013, posta.com. tr was visited by 3.3 million unique visitors. In addition, its mobile site was visited by an average of 130 thousand visitors per month (Gemius December 2013). Posta.com.tr has 170 thousand followers on Facebook and 40 thousand followers on Twitter. fanatik.com.tr Turkey’s leading sports website, fanatik.com.tr had over 3 million unique visitors and over 190 million page views as of December 2013. Offering sports news with an authentic and high-quality perspective, fanatik.com.tr’s mobile site is visited by 400 thousand visitors per month (Gemius December 2013). Fanatik.com.tr has 1.3 million followers on Facebook and 140 thousand followers on Twitter, thanks to a special emphasis given to social media interactions. Fanatik.com.tr develops its own content through a studio established on its premises and its own outside camera shots. Fanatik.com.tr is Turkey’s first sports web TV having 24/7 live broadcasts. radikal.com.tr For 20 years, Radikal has been reporting the news from Turkey and from around the world with a dynamic and different perspective from its headlines to cover photos and content. Radikal adapted to the changing world and launched Turkey’s first digital newspaper, radikal.com.tr, in December 2013. Adopting a “digital first” strategy and turning into a faster, more innovative and simple- designed digital newspaper that can be personalized in line with the reader’s needs, Radikal became a pioneer in the industry with its dual home page structure. Constantly updated to follow the rapidly changing agenda, radikal.com.tr provides readers with a summary of the latest breaking news, hottest topics and the last minute developments; meanwhile, Radikal Artı provides a more detailed and extensive analysis of those news with updates made five times a day. Source (unless otherwise stated): Comscore, December 2013, Turkey, home and work, total audience data. (5) 30 DYH 2013 ANNUAL REPORT hurriyetdailynews.com Visited by 51 thousand daily unique visitors (UV) as of December 2013, hurriyetdailynews. com offers its online readers a wide range of content including politics, arts, economics, technology, sports and daily life in English language. Classified Ads arabam.com Having approximately 3 million individual users, arabam.com led the way in Turkey by introducing automotive sector classified ads with the internet. The website is visited by an average of 4 million visitors and has some 102 million page views every month. With a new design launched in December 2013, arabam.com has close to 290,000 followers on Facebook. hurriyetemlak.com Hurriyetemlak.com, one of the leading internet sites of the real estate sector, appeals to a wide audience ranging from professional real estate agents, construction companies, contractors to prefabricated home manufacturers. According to Comscore’s December 2013 data, the number of visitors to hurriyetemlak.com increased 21% compared to the same period of the previous year. hurriyetoto.com The number of daily visitors and page views of hurriyetoto.com have been increasing with each passing day since its establishment in 2007. yenibiris.com A pioneer of many innovations in online human resources services, yenibiris.com.tr’s daily number of visitors and page views increased 22% and 36%, respectively, in 2013. As one of Turkey’s leading human resource websites, yenibiris.com.tr is the second mostvisited career and development website in Turkey according to Comscore December 2013 data. ekolay.net Transferred to Hürriyet Internet Group from Doğan Online in November 2012 and continued as a portal until 2013 year-end, ekolay.net serves as a sector classified ad website with the “Modern Sarı Sayfalar” (Modern Yellow Pages) slogan beginning in 2014. For Family and Socializing hurriyetaile.com Hurriyetaile.com is followed by people from all walks of life with its extremely rich and diverse topics ranging from men and women relationships to shopping, pregnancy, technological products, health and city guides. The prominent staff of the website, experts and columnists, are acclaimed by the masses with their addressing of diverse aspects of the family concept. mahmure.com Mahmure.com was acquired by Hürriyet Internet Group in November 2012. As Turkey’s highest-reach women’s platform together with hurriyetaile.com, mahmure.com grew by more than 100% to reach a monthly average of 1.5 million unique visitors by the end of 2013. Its highly visual new design, which is acclaimed by the new generation of young women, its new mobile application and content quality are mahmure.com’s most important competitive advantages. With all these outstanding features, the website has become a highly acclaimed medium for Fashion, Beauty, Career, Healthy Living, Healthy Nutrition and Fitness. Others yakala.co With its continuously enriched and updated high quality content service, yakala.co has grown steadily since it was launched in 2010 and reached a vast visitor base. Yakala.co provides visitors discounts, deals and coupon offers for many events ranging from culture and art activities to entertainment venues. In 2013, with a new interface design, yakala. co achieved 15% growth in average monthly page views and 13% growth in the number of unique visitors. bigpara.com Acquired by Hürriyet Internet Group in November 2012 and later merged with Piyasanet, bigpara.com was visited by 1.8 million unique visitors per month in 2013. TV & Content cnnturk.com Offering speed, quality and reliability together, CNN Türk plays a key role in online journalism through cnnturk.com and effective use of social media. Cnnturk.com develops and renews itself continuously. In addition to Smart TV, cnnturk.com offers mobile applications compatible with all brands and models of devices and thus enables broadcasting of CNN Türk content through all media channels. In 2013, cnnturk.com came to have a more effective and dynamic structure through switching to an infrastructure that paves the way for organic integration with the TV channel and interactive services and editorial flexibility. kanald.com.tr Maintaining the title of “Turkey’s most clicked TV website” for many years, kanald.com.tr reached 4 million monthly unique users according to Comscore December 2013 data. With its renewed video pages and revamped infrastructure in 2013, a total of 376 million videos were watched throughout the year at kanald.com.tr. In May 2013, the “Barrier-Free” project was launched for the disabled audience and reached 130 thousand hearing and visually disabled individuals. In February, launched with the name “Oyun Zamanı” (Game Time), the “Ben Bilmem Eşim Bilir” (My Spouse Knows Best) mobile game was downloaded by 1.4 million people. Trendykent city building game, which launched in March, reached 140 thousand members. Kanal D continued to communicate with its ever-increasing number of followers and fans in social media from its corporate accounts in 2013. NetD.com NETD, launched in 2012 as a video content service provider via the internet, provides users with free access to all episodes of their favorite series, a constantly updated list of movies, documentaries, talk shows and entertainment programs at anytime from anywhere. NETD aims to deliver a service that combines quality content with ease of use. DYH 2013 ANNUAL REPORT 31 At a Glance Operations Sustainability Corporate Governance Dividend Distribution Financial Information Television, Radio and Music Broadcasting and Production Television, Radio and Music Broadcasting and Production Our experience and TRUST MAKE A DIFFERENCE in TV broadcasting According to TNS data, Kanal D had 10.21% audience share in All Day-All Audience from January 01 to December 31, 2013. Television Broadcasting Kanal D Kanal D, a pioneer of dynamism and change in Turkish television broadcasting with its creative programming, was the most watched television channel in 2013 in Turkey as in the prior year. According to TNS data, Kanal D had 11.66% audience share in All Day A/B SES and 10.21% audience share in All Day-All Audience from January 01 to December 31, 2013. CNN Türk As the first television channel established through a partnership with an international media company, CNN Türk was launched as a joint-venture between DYH and Time Warner in 1999. With programming-quality reflecting the successful partnership of two well-know brands, CNN Türk also has a unique position as the first national CNN channel managed outside of Atlanta that offers 24-hour news coverage in a national language. Started as a powerful platform of contemporary news broadcasting, CNN Türk became the representative of accurate, objective, reliable and unbiased journalism in Turkish media in a short time. 32 DYH 2013 ANNUAL REPORT Aiming to reach its audience 24/7 through various platforms, CNN Türk developed an integrated system with cnnturk.com, 92.5 CNN Türk Radio, mobile platforms and smart TVs. CNN Türk tablet and mobile applications offer the opportunity to reach live broadcasts, program content and breaking news at anytime from anywhere. Being one of the pioneers in following and implementing technological developments, CNN Türk could be watched high definition at D-Smart channel 30 starting from April 2013. tv2 Launched in August 2012 with a wide range of content appealing to audiences of all ages, tv2 has gained a broad audience in less than two years. DYH’s tv2 has achieved a significant success among national entertainment channels with its popular foreign series, domestic productions, entertainment programs, cartoons and thematic movies. Dream TV Launched in 2003 with the “Follow your dreams” slogan, Dream TV broadcasts popular international music and alternative Turkish music videos. In 2004, DreamTürk started broadcasting with the “Native Language of Music” slogan and became a popular music channel with Turkish pop music videos that appeal to a wide range of audiences. European Operations Doğan Teleshopping Doğan Teleshopping, which provides the opportunity to shop via TV broadcasting and the internet, has been operating under the umbrella of DYH since 2007. D Shopping channel enables viewers to shop from home for a wide range of products from electronics to kitchenware, healthy nutrition, beauty and hobby products through 24/7 broadcasting. In addition, with the “Her Eve Lazım” (A Must for Every Home) program, which has become a household name in Turkey, offers practical products designed to add comfort to daily life. Euro D Euro D was founded in 1996 to provide Turkish people living in Europe with an opportunity to follow the agenda of the country and quickly became a channel of choice with its rich programming range. Euro D keeps Turks residing abroad in contact with Turkey with a variety of content ranging from news to magazine, entertainment to health programs. Kanal D Romania Kanal D Romania started broadcasting on February 18, 2007 with a national broadcasting license and significantly increased its audience in a short time. As of 2013 year-end, Kanal D Romania ranks third among the 18-49 years of age urban viewers in the all-day audience category. Euro D keeps Turkish people residing abroad in contact with Turkey with a variety of content ranging from news to magazine, entertainment to health programs. DYH 2013 ANNUAL REPORT 33 At a Glance Operations Sustainability Corporate Governance Dividend Distribution Financial Information Television, Radio and Music Broadcasting and Production Television, Radio and Music Broadcasting and Production HIGH QUALITY AND UP-TO-DATE Doğan Radio Group aims to contribute to the development of digital radio broadcasting in Turkey and to become the pioneer of this newly emerging area. Radio Broadcasting broadcasting in different frequencies Doğan Yayın Holding sets an example with its high quality and original radio stations, namely Radyo D, CNN Türk Radio and Slow Türk Radio. According to the latest survey conducted in the first quarter of 2013, DYH Radio Group had a total audience reach of 14.13%. In the last quarter of 2013, Doğan Yayın Holding started infrastructure work on a web portal that is include 10 thematic digital radio stations as well as digital broadcasting of Radyo D and Slow Türk. Doğan Radio Group aims to contribute to the development of the digital radio broadcasting in Turkey and to become the leader of this newly emerging area. Radyo D A follower of innovations with its dynamic approach, Radyo D is one of the first nationally broadcasting radio stations in Turkey. Keeping abreast of the developments in radio broadcasting and implementing modern technologies, Radio D broadcasts Turkish pop music via fully digital systems. DYH serves as a model in the sector with its radio stations that broadcast high quality and unique programming. 34 DYH 2013 ANNUAL REPORT Slow Türk Slow Türk has become one of the most popular radio stations in Turkey with romantic love songs aired round-the-clock. Radyo D and Slow Türk radio reach out to their audience through the D-Smart digital platform, Turksat satellite, the terrestrial broadcasting network, internet broadcasts, and tablet and mobile applications. CNN Türk Radio Established as a joint venture between DYH and Time Warner, CNN Türk Radio broadcasts high quality programming 24/7 on frequency 92.5. The broadcast stream of CNN Türk TV is aired live on CNN Türk Radio. Television and Music Production Kanal D Home Video D Productions D Productions was established under the name ANS International in 1992 and joined the Doğan TV Holding family in 1998. Since 2005, the company has continued to operate as D Yapım Reklamcılık ve Dağıtım A.Ş. As one of the leading production companies in Turkey with its high service quality, D Productions produces TV series, programs, movies and advertisements and provides movie distribution services. InDHouse As Doğan TV Holding’s second production company, InDHouse is best known with its popular TV programs that are acclaimed by millions. “Ben Bilmem Eşim Bilir” (My Spouse Knows Best), the competition show that draws the entire nation in front of the television screen, and “İntikam”, an adaptation of the series “Revenge” that is still being broadcasted on America’s ABC network, are some of the programs produced by InDHouse. Aimed to provide TV audiences with cinema-quality movies at home, D Productions launched the Kanal D Home Video brand to offer the best films with superior image quality. Doğan Music Company (DMC) DMC has been best known as the producer of hit songs in the music industry since its establishment in 2000. DMC is the leader in the sector with around 20% market share in physical distribution and 60% market share in the digital space, including the catalogs of its own and of the companies it represents. D Productions and InDHouse, Doğan TV Holding’s companies which produce TV series and programming, have achieved success with their television programs that have garnered the appreciation of millions. DYH 2013 ANNUAL REPORT 35 At a Glance Operations Sustainability Corporate Governance Dividend Distribution Financial Information Digital TV Platform Digital TV Platform PIONEERING AND SUCCESSFUL practices in digital broadcasting As the fastest growing digital platform in Turkey, D-Smart delivers TV and Internet services to about 2 million households today. D-Smart A one-stop entertainment platform offering both internet and television services, D-Smart Net, was created to provide D-Smart, one of the leading digital customers with price advantages besides broadcasting platforms in Turkey, has been ease of use. As the only DTH platform in operating under the umbrella of Doğan Turkey that offers double game, that is TV TV Holding since 2007. Platform-specific + internet services, D-Smart offers content thematic channels, 41 HD channels, all of the national channels, hundreds of domestic access services via internet with the D-Smart and foreign satellite channels transmitted on BLU application, in addition to services it offers via satellite. Aiming to provide Turksat, and digital content are among the subscribers with diversified services, D-Smart main services that D-Smart offers users. As the fastest growing digital platform in Turkey, offers its rich content from other devices such as desktop computer, iPhone and iPad D-Smart delivers TV and Internet service to with D-Smart BLU. about 2 million households today. D-Smart demonstrates steady growth by closely following industry developments and investing in Internet and digital broadcasting technology. In the 2010, D-Smart joined forces with Smile brand which offers Internet access services started to provide internet services under the name D-Smart Net. In addition to sports such as Champions League and UEFA matches, NBA, Formula 1, Moto GP, La Liga and the Turkish Airlines Euro League; movies, series, documentaries, children’s and lifestyle channels constitute the wide variety of D-Smart’s content. Number of D-Smart Subscribers D-Smart TV 2013 2012 1,033,398 871,565 +19% D-Smart Net 2013 2012 +5% Source: D-Smart. 36 DYH 2013 ANNUAL REPORT 358,034 341,361 Other Operations We offer Other Operations A VARIETY OF SOLUTIONS to our customers Financial Services Doğan Faktoring Doğan Faktoring carries out comprehensive risk analysis for trade receivables with its well-skilled workforce to eliminate the possible payment problems of its customers. Doğan Faktoring carries out comprehensive risk analysis for trade receivables with its well-skilled workforce to eliminate the possible payment problems of its customers. DYH 2013 ANNUAL REPORT 37 At a Glance Operations Sustainability Corporate Governance Dividend Distribution Financial Information Segment Operations in 2013 Segment Operations in 2013 We maintain Market LEADERSHIP in the media sector Average Daily Newspaper Circulation (%) DYH 21% Other 79% In 2013, DYH’s total average net daily newspaper circulation is estimated to have declined by 2.6% to 1.06 million with a corresponding market share of 21%. Hürriyet Group’s newspapers (Hürriyet, Radikal and Hürriyet Daily News) had a total average daily newspaper circulation of 432 thousand while Doğan Gazetecilik’s newspapers (Posta and Fanatik) reached a total average daily newspaper circulation of 627 thousand. Source: Doğan Dağıtım (2013). Magazine Circulation Market Share (%) DYH 37% Other 63% Source: DPP (Dergi Pazarlama Planlama A.Ş) and Doğan Burda Dergi Yayıncılık (2013). 38 DYH 2013 ANNUAL REPORT Publishing Operations in 2013 The average daily net newspaper circulation in Turkey increased to 5.1 million in 2013, up from 4.8 million in 2012. The rise in circulation is believed to be due to the increase in free distributions and the entry of new newspapers to the market during this period. As for the Turkish market for magazines that sell ad space, which includes Doğan Burda, the number of magazines sold decreased 9.5% from the previous year to 18.5 million units by 2013 year-end. In 2013, DYH maintained its leading position in the magazine publishing sector with its prestigious brands and innovative vision. As the pioneer of change in the magazine market, Doğan Burda implemented projects highlighting its existing brands and enhanced its portfolio with the introduction of the new magazines throughout 2013; therefore, the company managed to maintain its share despite the downturn in the magazine ad market. Doğan Burda achieved a sales volume of 6 million units in 2013. DYH’s total magazine sales in 2013, including its other magazine-publishing subsidiary Doğan Egmont, decreased 2.9% to 6.8 million, while DYH’s market share in total magazine circulation is estimated to be around 37%. Doğan İnternet Yayıncılığı ve Yatırım A.Ş. (MedyaNet), which was purchased by DYH on June 21, 2013, carries out intra-group and non-group internet ad marketing. MedyaNet’s 2013 non-group ad revenue was consolidated into publishing ad revenues. DYH’s total publishing ad revenues remained the same as the previous year despite the decline in ad revenues from its international operations. The fall in ad revenues of TME, which accounts for a major share in international ad revenues, was mainly due to the economic slowdown in Russia in 2013, where a majority of international ad sales were made. Medyanet, acquired by DYH in 2013 positively, contributes to consolidated ad revenue. Circulation and printing revenues remained on par with the previous year’s figure and stood at TL 314 million. Consolidated total publishing revenues (before inter-segment eliminations) decreased 2% and amounted to TL 1,369 million in 2013. With the impact of increased operating expenses, Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA) declined to TL 101 million. Publishing Independently Audited (TL million) 31.12.2013 31.12.2012 YoY (%) 1,369 1,391 -2 9 49 -82 EBITDA(*) 101 139 -28 Net Profit/(Loss) -28 176 - Consolidated Revenue Operating Profit/(Loss) Before Other Income/(Expense) EBITDA was calculated by DYH. All revenue and EBITA numbers of the segments, are the figures before eliminations were made among the segments. (*) DYH 2013 ANNUAL REPORT 39 At a Glance Operations Sustainability Corporate Governance Dividend Distribution Financial Information Segment Operations in 2013 Segment Operations in 2013 INCREASING NUMBER OF USERS in digital TV platform Consolidated broadcasting revenues increased 6% and rose to TL 1,152 million in 2013 compared to the prior year. Broadcasting Operations in 2013 According to TNS A.Ş. data, the company that has been providing rating measurement services to the sector since September 17, 2012, Kanal D had 11.66% audience share in All Day A/B SES and 10.21% audience share in All Day-All Audience between January 01 - December 31 2013. Therefore, it kept the title of being the most watched television channel in Turkey in 2013 as in the previous year. Rapidly increasing its revenues in the broadcasting segment, D-Smart continued to grow through stable investments in 2013; the number of Pay TV subscribers increased 19% compared to the previous year and exceeded 1 million. By the end of 2013, D-Smart maintained its position as the second digital pay TV operator. The number of D-Smart pay TV subscribers reached 1,033,398 and the number of ADSL subscribers increased to 358 thousand by 2013 year-end. Consolidated broadcasting revenue (before inter-segment eliminations) increased 6% over the prior year and totaled TL 1,152 million in 2013. Ad revenues increased 1% compared to the previous year. Digital platform subscription revenue, categorized under broadcasting revenues, increased 32% over the previous year to TL 401 million and reached a 35% share in total broadcasting revenue. Other sales, including the Group’s sales made to Star TV, decreased 24%. Due to the increased program and marketing costs, EBITDA decreased to TL 108 million in 2013. Broadcasting Independently Audited (TL million) 31.12.2013 31.12.2012 YoY (%) 1,152 1,090 6 3 110 -97 EBITDA(*) 108 189 -43 Net Profit/(Loss) -164 104 - Consolidated Revenue Operating Profit/(Loss) Before Other Income/(Expense) (*) 40 DYH 2013 ANNUAL REPORT EBITDA is calculated by DYH. All segment income and EBITDA figures are before inter-segment eliminations. Digital platform subscription revenue, categorized under broadcasting revenues, increased 32% over the previous year to TL 401 million “Other” segment operations in 2013 GSM card sales revenue and other revenues mainly from Doğan Dağıtım’s non-media operations are reported under the “Other” segment. In 2013, consolidated revenue of this segment fell 6%. EBITDA amounted to TL 4 million. Other Independently Audited (TL million) 31.12.2013 31.12.2012 YoY (%) 57 60 -6% Operating Profit/(Loss) Before Other Income/(Expense) 3 -12 - EBITDA(*) 4 -10 - -37 -4 - Consolidated Revenue Net Profit/(Loss) (*) EBITDA is calculated by DYH. All segment income and EBITDA figures are before inter-segment eliminations. DYH 2013 ANNUAL REPORT 41 At a Glance Operations Sustainability Corporate Governance Dividend Distribution Financial Information Corporate Social Responsibility Corporate Social Responsibility We develop projects for YOUNG GENERATIONS, who will take Turkey into the future. Having acted as a good corporate citizen since its foundation, DYH and all companies under its umbrella develop and undertake initiatives to resolve social problems and meet society’s needs. A country needs well-educated and well-equipped citizens with a high level of social awareness to achieve sustainable development. Therefore, any investment in Turkey’s young and dynamic population will ensure our country’s success in the future. Private sector companies that contribute to the national economy and employment with their corporate social responsibility (CSR) projects sustain social development. Having acted as a good corporate citizen since its foundation, DYH and all companies under its umbrella develop and undertake initiatives to resolve social problems and meet society’s needs. DYH believes that women play a critical role in social development, and therefore, concentrates its CSR efforts on the defense of women’s rights and the education of girls. In 2013, the Company also carried out projects to raise public awareness in the areas of education, environment, health, culture and the arts, and particularly to add value to younger generations. Corporate social responsibility initiatives implemented under the leadership of DYH companies and Aydın Doğan Foundation reach a wide audience through mass media. Thus, these projects not only create significant value, but also help increase public awareness. 42 DYH 2013 ANNUAL REPORT Aydın Doğan Foundation Established on April 15, 1996, Aydın Doğan Foundation contributes to Turkey’s development with a wide range of charitable activities. The Foundation not only builds educational facilities and dormitories for young generations, but also encourages success in all areas including, health, culture, the arts and sports by organizing national and international competitions. A reflection of Doğan Group’s approach to social responsibility, the Foundation has attained a well-respected position in both the domestic and international arena with its strong administrative and financial structure. Aydın Doğan International Cartoon Competition The Aydın Doğan International Cartoon Competition is regarded as the world’s most prestigious competition of its kind. In 2013, 842 artists from 77 countries participated in the competition with 2,544 cartoons. The Selection Committee awarded the first prize to Polish artist Krzysztof Grzondziel, the second prize to Asuman Küçükkantarcılar from Turkey, and the third prize to Pol Leurs from Luxembourg. Open to professional and amateur cartoonists from all countries, the 30th edition of the competition in 2013 was held with no subject limitations. Throughout its history, a total of 7,800 artists from 137 nations have participated in the Aydın Doğan International Cartoon Competition with around 80,000 entries. Exhibitions As in previous years, the cartoons considered worthy of exhibition to the Aydın Doğan International Cartoon Competition were presented to the general public in 2013. The award-winning cartoons were displayed in exhibitions organized in Adana, Ankara, Balıkesir, Eskişehir, Istanbul, Izmir, Mardin, Muğla and Ordu (Ünye). To date, a total of 7,800 artists from 137 nations have submitted around 80,000 entries to the Aydın Doğan International Cartoon Competition, of which the 30th edition was held in 2013. Young Communicators Competition Aydın Doğan Foundation annually organizes the Young Communicators Competition with the communications departments of universities to support continuous development of the media workforce and to increase the number of qualified employees in the sector. In 2013, a total of 1,169 students participated in the 25th edition of the Competition with 1,014 projects in the categories of publishing, broadcasting, advertising, public relations and online media. The selection committee awarded 129 students and 66 projects. The award-winning students were also given the opportunity to attend training programs designed for gaining professional knowledge and experience in one of the newspapers, magazines, or television or radio channels of Doğan Yayın Holding. DYH 2013 ANNUAL REPORT 43 At a Glance Operations Sustainability Corporate Governance Dividend Distribution Financial Information Corporate Social Responsibility Corporate Social Responsibility We reward success as a way of contributing to Since its establishment, Aydın Doğan Foundation has undertaken many projects to help improve the conditions and raise the quality of the educational system in Turkey. Aydın Doğan Award Every year, Aydın Doğan Foundation gives awards to individuals who have gained significant achievements in their profession and made contributions to their nation, the world and humanity in different fields such as culture, arts, literature and science. In 2013, the Aydın Doğan Award was given in the “Turkish Music” category. The Selection Committee included Prof. Dr. Alaeddin Yavaşça (Chairman), Prof. Adnan Koç, Doğan Hızlan, Erol Sayan, Fatih Salgar, Gönül Paçacı, H. Özgen Gürbüz, Mehmet Güntekin and Serap Mutlu Akbulut. The Selection Committee granted the Aydın Doğan award to Prof. Dr. Nevzad Atlığ for his work spanning 65 years in the recent history of Turkish Music and for his outstanding services throughout his prolific career. The Committee also awarded the Classical Turkish Music Foundation for its lasting, sustainable, effective and results-oriented projects in recent years. 44 DYH 2013 ANNUAL REPORT THE betterment of the WORLD AND HUMANITY • Aydın Doğan Elementary School, Göztepe-Istanbul • Yaşar ve İrfani Doğan Industrial Vocational High School, Kelkit-Gümüşhane • Milliyet Anatolian Teachers High School, Erzincan • Hürriyet Anatolian Vocational High School for Hotel Management, Erzincan • Aydın Doğan Vocational High School for Trade (Communications), Istanbul • Aydın Doğan Vocational High School for Health, Istanbul • Gümüşhane University Kelkit Aydın Doğan Vocational School, Gümüşhane • Galatasaray University Aydın Doğan Auditorium, Istanbul • TEGV Sema and Aydın Doğan Education Park, Istanbul • Sema Doğan Park, Gümüşhane • Aydın Doğan Center for Science and the Arts, Afyon • Nene Hatun High School Aydın Doğan Dormitory for Girls, Erzurum • Erzincan University Aydın Doğan Education Dormitory for Girls, Erzincan Since its establishment, Aydın Doğan • Hacı Hüsrev Doğan Dormitory for Girls, Foundation has undertaken many projects Kelkit Gümüşhane to improve the conditions and raise the • Aydın Doğan Dormitory for Girls, Kürtün quality of the educational system in Turkey. Gümüşhane The schools and dormitories constructed by • Aydın Doğan Dormitory for Girls, Köse the Foundation and donated to the Ministry Gümüşhane of National Education are listed below: • Aydın Doğan Dormitory for Girls, Şiran Gümüşhane • Sema Işıl Doğan Elementary School, • Aydın Doğan Sports Complex, Gümüşhane Gümüşhane • Atatürk University Aydın Doğan Private Elementary School, Erzurum Kelkit Aydın Doğan Vocational School Kelkit Aydın Doğan Vocational School, part of Gümüşhane University, opened with 90 students on September 28, 2003. The number of students studying at the Vocational School reached 643 during the 2012-2013 academic year. The associate programs at Kelkit Aydın Doğan Vocational School are: Computer Technologies, Agricultural and Livestock Production, Electronics and Automation, Accounting and Taxation, Transportation Services and Veterinary Medicine. With the support of the Foundation, Kelkit Aydın Doğan Vocational School also provides English classes. Further, the Organic Agriculture Program, which is in high demand by students in the region, is designed to develop local agriculture, and spread the use of and raise local awareness about sustainable agriculture techniques. Aydın Doğan Vocational High School for Trade (Communications) Providing education in the fields of journalism, radio and television, Aydın Doğan Vocational Trade High School held its 12th graduation ceremony in 2013. Aydın Doğan Vocational Trade High School was established by Aydın Doğan Foundation 15 years ago, and then donated to the Ministry of National Education. As in previous years, the high school continues to be one of the top choices of students with the highest scores on the entrance exams. Out of the 88 students who graduated in 2013, 85 were entitled to enroll in a university. In order to increase the students’ motivation, the Foundation also awards various prizes to the top three successful students and all graduates at the end of each academic year. As in previous years, the Foundation continued to support the school with foreign language education, to help students enhance their level of English. Aydın Doğan Vocational High School for Health Opened by Prof. Dr. Nabi Avcı, the Minister of National Education, on April 24, 2013, Aydın Doğan Vocational High School for Health is an important step towards cultivating healthcare professionals for the future. With its classrooms, technology infrastructure, social and educational facilities to meet every need, the high school fulfills all the requirements for modern education. Having a capacity for 720 students, Aydın Doğan Vocational High School for Health will provide education for emergency medical technicians, anesthesia technicians, and nurses. The high school consists of 27 classrooms, laboratories, an indoor gymnasium, an IT classroom, a library and a multi-purpose hall that can accommodate up to 140 people. Dormitories for Girls Aydın Doğan Foundation continues to provide support to girls’ dormitories constructed by the Foundation and later donated to the Ministry of National Education within the scope of the “Dad, Send Me to School” campaign, which had attracted much public attention. These dormitories are: Nene Hatun High School Aydın Doğan Dormitory for Girls (Erzurum), Aydın Doğan Dormitory for Girls (Erzincan), Hacı Hüsrev Doğan Dormitory for Girls (Kelkit), Aydın Doğan Dormitory for Girls (Kürtün), Aydın Doğan Dormitory for Girls (Köse) and Aydın Doğan Dormitory for Girls (Şiran). In 2013, Aydın Doğan Foundation hosted students living in these dormitories, who ranked in the top three in their respective schools, together with coordinating teachers in Istanbul for four days. The purpose of this organization was to award students’ achievements and also to contribute to their social and cultural development. As part of the program, students had the opportunity to visit universities as well as Istanbul’s cultural and historical sites. Aydın Doğan Foundation supports Aydın Doğan Vocational High School for Health with foreign language education, to help students enhance their level of English. DYH 2013 ANNUAL REPORT 45 At a Glance Operations Sustainability Corporate Governance Dividend Distribution Financial Information Corporate Social Responsibility Corporate Social Responsibility Initiatives TEGV Sema and Aydın Doğan Education Park Aydın Doğan Foundation continues to support the Fındıkzade Sema and Aydın Doğan Education Park, which was established by the Educational Volunteers Foundation of Turkey (TEGV) in 1996. Kalender Metin Doğan Community Kitchen Through the Kelkit Social Assistance and Solidarity Foundation, Aydın Doğan Foundation supports Kalender Metin Doğan Community Kitchen in Kelkit, where an average of 150 people are served hot meals daily during winter and 100 people per day during summer. London School of Economics The Aydın Doğan Foundation is among the sponsors of the Contemporary Turkish Studies Chair at the European Institute of the London School of Economics (LSE), one of the most prestigious educational institutions in the world. The chair will provide great support for the global recognition of modern Turkey. Aydın Doğan Center for Science and Arts Aydın Doğan Center for Science and Arts endeavors to identify gifted or highly talented children at the elementary or junior high school level and to make the best of their potential. The Center is an educational institution affiliated with the Ministry of National Education, General Directorate of Special Education Guidance and Counseling Sema Doğan Park in Gümüşhane Services. Aydın Doğan Foundation continues The purpose of the Sema Doğan Park, which to support the Center, where gifted children was inaugurated on July 24, 2008, is to enrich are educated by specially trained teachers cultural and social life in Gümüşhane. The and using special tools and programs. Park is designed to host various activities. The covered areas inside the Park feature Other Activities a hall that can accommodate cultural and entertainment activities such as receptions, Education Reform Initiative (ERG) concerts and conferences. The open area Pursuing “high quality education for features an amphitheater, which can host all”, Aydın Doğan Foundation supports movie screenings, theater plays, concerts, numerous projects that aim to improve the folkloric dances and conferences, as well as educational conditions in Turkey. To this children’s playgrounds, a basketball court, a end, together with other prominent Turkish tennis court and picnic areas. foundations, Aydın Doğan Foundation serves as an active member on the Board of the Education Reform Initiative. The Initiative undertakes educational reform and related research and monitoring studies for the social and economic development of the country. Third Sector Foundation of Turkey The Third Sector Foundation of Turkey (TÜSEV) was established in 1993 by 23 civil society organizations including leading foundations and associations in Turkey in order to develop the legal, fiscal and operational infrastructure of the third (nonprofit) sector. Today, over 100 trustees of the Foundation collaborate under the roof of TÜSEV to encourage civil society initiatives in Turkey. As a founder and Board member of TÜSEV, Aydın Doğan Foundation actively supports these initiatives. Sema and Aydın Doğan Education Park organizes various educational activities in order to develop children’s language and communication skills, contribute to their personal and mental development, foster their interest in the arts, science and technology and educate them in these fields. Sema and Aydın Doğan Education Park has offered educational support to nearly 70,000 children since its inauguration 17 years ago. 46 DYH 2013 ANNUAL REPORT FOR A BETTER LIFE Hürriyet’s “No! to Domestic Violence” Campaign Promotion and fundraising efforts for the campaign via cultural activities continued throughout 2013. The campaign team organized a “Nilüfer 13 Düet” concert on The “No! to Domestic Violence” campaign April 17, 2013, and concert proceeds were launched by Hürriyet newspaper to draw donated to the Emergency Helpline. The attention to and raise public awareness group Kırmızı dedicated their single “Araf” about domestic violence against women to the campaign and hence, the campaign completed its ninth year in 2013. was effectively communicated via social platforms. Additionally, the singer Nerhan As in previous years, the campaign dedicated his “Bi’ tek Sen Anlardın” music served as a solution partner to non-profit organizations and the Ministry of Family and video to the “No! to Domestic Violence” Social Policies also in 2013. Awareness-raising campaign. activities included exhibitions, university The sales of socks specially designed by Penti conferences, workshops, opinion-sharing Socks for the “No! to Domestic Violence” in national and international platforms, fundraising activities, special ads and TV ads. campaign, and the SMS campaign to aim bring-in to the Emergency Helpline also continued throughout 2013. The “No! to Domestic Violence” campaign also joined the One Billion Rising campaign, The success of the projects carried out a global movement to end violence within the scope of the “No! to Domestic against women. The representatives of the campaign attended the special event for the Violence” campaign was recognized with awards in 2013. The website project, held on March 8, 2013 in Istanbul. Within the scope of this project, which was siddetekarsiyuzbinsms.com received the “Golden Spider (Altın Örümcek) Social launched in Turkey for the first time, the “No! to Domestic Violence” campaign joined Responsibility Award”, as well as another award in the category of “Women’s Health” with thousands of women against violence from the Public Health Association of and repeated this call in solidarity. Turkey. Additionally, the campaign ad won first prize in the category of “Corporate Social Responsibility and Public Awareness” at MediaCat Felis Awards. The “No! to Domestic Violence” Campaign launched by Hürriyet newspaper to draw attention to and raise public awareness about domestic violence against women completed its ninth year in 2013. In order to promote the “No! to Domestic Violence” campaign more effectively, efforts were undertaken to drive traffic to social media accounts, as a result, the number of followers increased significantly. DYH 2013 ANNUAL REPORT 47 At a Glance Operations Sustainability Corporate Governance Dividend Distribution Financial Information Corporate Social Responsibility In 2013, the Emergency Helpline of the “No! to Domestic Violence” Campaign received calls from across Turkey as well as from Germany and France. Corporate Social Responsibility Campaigns that raise awareness FOR A DEVELOPED SOCIETY Emergency Helpline Providing support on legal, psychological and safety issues to victims of violence, the Emergency Helpline continued to be active 24/7 in 2013 as well. Calls to the Emergency Helpline are answered only by psychologists. In 2013, the Emergency Helpline received 4,181 calls; of these calls, 2,070 people were informed about domestic violence, and 1,724 were either victims or relatives and friends of victims. Some 4% of callers were men, 90% were women and 6% were children. In 2013, 63.43% percent of the victims suffered from violence at the hands of their spouses. Two in five victims complained of physical violence and about half of this group claimed to suffer from other types of abuse, as well. It was determined that the lives of 299 victims calling the line in 2013 were in danger, and in these cases, the Emergency Helpline collaborated with police forces and Two in five victims calling the Emergency Helpline complained of physical violence. 48 DYH 2013 ANNUAL REPORT directed a large number of the victims to shelters. In addition, one in five women, who called the line were directed to psychological support institutions. In 2013, the Emergency Helpline received calls from across Turkey as well as from Germany and France. Educating, informing and conferences In 2013, awareness-raising programs were carried out at Esenler Şerife Balcı Cultural Center and Sancaktepe Community House, under the “No! to Domestic Violence“ campaign. Further, the campaign was promoted at Yıldız Technical University, Koç University and Istanbul Technical University. The students of Atılım University in Ankara received training on domestic violence, while psychology students attended conferences to learn about the Emergency Helpline and psychological conditions of helpline responders. Additionally, various conferences on domestic violence were organized at Yıldız Technical University, Acıbadem University and Istanbul Technical University. Rightful Women Platform The Rightful Women Platform is a social responsibility project launched by Hürriyet newspaper to draw public attention to discrimination against women and prevent all forms of discrimination. In 2013, the Platform continued efforts to increase public awareness about women’s rights, and focused on supporting the nomination and election of more women in the 2014 Local Elections. Hürriyet-Koruncuk Foundation Collaboration “Dad, Send Me to School” Campaign Launched by Doğan Gazetecilik on April 23, 2005, the “Dad, Send Me to School” campaign aims to make sure that all girls in all parts of Turkey benefit from educational opportunities. Spearheaded by Hanzade Doğan Boyner, the Honorary Chairperson of Doğan Gazetecilik, the project has helped transform many girls into productive individuals through education. Under the campaign, financial support is provided for girls, who are deprived of educational opportunities across In collaboration with the Turkish Foundation the country and a series of activities are for Children in Need of Protection organized to raise public awareness on (Koruncuk Foundation), Hürriyet newspaper this issue. To date, many institutions have visited the Koruncuk Village in 2013 and supported the “Dad, Send Me to School” gave out gifts to the children staying at the campaign, to which Doğan Gazetecilik has Village, including books, CDs, electronic also contributed TL 1 million. As part of devices, according to their age groups. Later, the campaign, dormitories and classrooms the children were invited to visit Hürriyet were built in 15 cities identified as those with the greatest need and scholarships newspaper and chatted with the writers Yılmaz Özdil, Doğan Hızlan, Mehmet Arslan were given to students in financial need. Throughout the eight years since the launch and Murat Yetkin in a friendly atmosphere. The photography course presented by of the campaign, various individuals and Sebati Karakurt, the photo editor of Hürriyet institutions constructed 33 dormitories newspaper, drew much interest from and 12 elementary schools, and 10,524 girls children. The children were also taken to received educational scholarships. Aydın theaters, movies and exhibitions, and those Doğan Foundation supported the campaign who had to complete an internship were by building five dormitories for girls. These provided with internship placements at the dormitories provide shelter for nearly 3,500 World of Hürriyet. girls each year. With these activities, Hürriyet newspaper and Koruncuk Foundation made a great contribution to children’s social and cultural development. School” has reached a wide audience in a very short time. In 2013, DYH newspapers played a key role in raising public awareness on the campaign by publishing news that was influential in finding solutions to structural problems like the appointment of female directors to girls’ dormitories and the revision of the scholarship regulation. As in previous years, educational workshops, where problems regarding girls’ education were discussed, were organized under of the campaign in 2013. The findings of these workshops and relevant solution were shared with the public and the authorities at the Ministry of National Education. Collaborations with non-profit organizations also continued throughout 2013. For example, a two-day special training session was held for the administrators of regional primary boarding schools, jointly with the Turkish Association of Private Schools; training seminars for 500 parents were organized in five cities around the theme “My Child and I” in collaboration with the Mother and Child Education Foundation (AÇEV). In cooperation with the Turkish Family Health and Planning Foundation, seminars on hygiene and health and in collaboration with Eczacıbaşı, seminars entitled “Our Body and Health” were organized for female students staying in the dormitories. In terms of private sector collaborations, Kamil Koç Buses sponsored the furnishing of the common areas in the With a great sense of social responsibility, the dormitories and girls staying in dormitories newspapers under the umbrella of Doğan were also offered music lessons in these Gazetecilik have also undertaken effective common areas. efforts, and as a result, “Dad, Send Me to DYH 2013 ANNUAL REPORT 49 At a Glance Operations Sustainability Corporate Governance Dividend Distribution Financial Information Corporate Social Responsibility Corporate Social Responsibility Efforts to make life easier FOR THE DISABLED PEOPLE in our society “Dad, Send Me to School” has also received support from universities since its launch. This support has eventually transformed into a platform for multilateral cooperation to contribute to the education of girls staying in dormitories through several activities and seminars. To this end, students of Sabancı University visited Kars Merkez Sabancı Dormitory for Girls and Sarıkamış Milliyet Dormitory for Girls, as part of their social awareness course. Moreover, Işık University included a social awareness module in its curriculum and organized various activities at Mardin Milliyet Dormitory for Girls. While contributing to students’ education, the Campaign also aims to support the professional development of administrators and teachers of dormitories. A one-week training program on topics including puberty, dormitory management, communication skills and budget management was organized in Istanbul. In order to support the cultural and artistic development of students staying in the girls’ dormitories, a competition is organized annually in the categories of painting, poetry and essay writing. The top-ranking students are invited to Istanbul to receive their awards at the ceremony. Throughout the eight years since its launch, numerous individuals and corporations have supported the “Dad, Send Me to School” campaign, and thus, it is becoming more and more effective with each passing day. From governorships across Turkey 50 DYH 2013 ANNUAL REPORT to Limak Holding, Hacı Ömer Sabancı Foundation, the Union of Chambers and Commodity Exchanges of Turkey, Metro Group, Garanti Bank, Enka Foundation, Oriflame and Siemens, several organizations have eagerly supported the campaign by either constructing dormitories or granting scholarships to girls. To date, over 300,000 individuals have made donations of more than TL 35 million. In 2013, messages related to social responsibility projects either directly carried out or supported by Doğan TV Holding as well as campaigns to promote various associations were integrated into TV series and programs in order to reach a wider audience. For example, the “Dad, Send Me to School” campaign was used for the fundraising night scene in the first episode of TV series “Kayıp”. It is a known fact that families inspired by the campaign began to enroll their daughters in school. Another contributing factor is that school administrators, who participated in the training programs, paid visits to many villages and urged families to send their daughters to school. As a result, it is thought that the campaign’s added value is even greater and that the number of girls enrolled in schools is even higher than estimated. Publishing Support for the Visually and Hearing Impaired With its “No Barriers Between Us” project, Kanal D initiated an innovative practice in 2011 and broke new ground in TV broadcasting. Kanal D’s visual depiction service, provided in partnership with the Association for Visual Depiction, enables the visually and hearing impaired to easily follow the TV series. This project continued in 2013. Doğan TV Holding’s Projects Add Value to Society Setting an example in the sector with its original and creative programs, Doğan TV Holding contributes to social development via several social responsibility activities. The Holding’s collaborative efforts with various non-profit organizations as well as social responsibility activities carried out in 2013 are the result of a strong sense of responsibility. Cooperation with the Spinal Cord Paralytics Association of Turkey The cooperation with the Spinal Cord Paralytics Association of Turkey was first launched in 2010 with the TV series “Yaprak Dökümü” and successfully continued in 2013. One of the characters in the TV series had suffered a spinal cord injury and in the scenes, where he was seen in a power wheelchair, he called for support of the wheelchair campaign carried out by the Spinal Cord Paralytics Association of Turkey. As a result of this cooperation, a significant amount of donations was collected. Turkey’s Only TV Program on Nature Conservation, “Yeşil Doğa” Airs on CNN Türk “Yeşil Doğa” (Green Nature), the only TV program on nature conservation, which is prepared and presented by Güven İslamoğlu, has been aired on CNN Türk on Saturdays since its launch on June 5, 2010, World Environment Day. Thanks to the collaboration with the UN’s Global Environment Fund, it was possible to produce four episodes on wildlife conservation. In 2013, hundreds of volunteer environmentalists performed flash mob activities in shopping malls, on ships and beaches to draw the public’s attention to recycling. D Productions’ Social Responsibility Activities Besides its innovative initiatives in the broadcasting sector, D Productions also sets a good example for other companies in the sector with its social responsibility projects. Besides its innovative initiatives in the broadcasting sector, D Productions also sets a good example for other companies in the sector with its social responsibility projects. In 2014, D Productions plans to expand its social responsibility initiatives and continue to add value to society. “Güneşi Beklerken” Forest D Productions broke new ground with a new social responsibility project via the TV series “Güneşi Beklerken” (Waiting For the Sun), which is airs on Kanal D on Sunday nights. For each episode of this popular TV series, which is produced by D Productions, 70 saplings are donated to ÇEKÜL (Foundation for the Protection and Promotion of the Environment and Cultural Heritage). A total of 1,890 saplings were donated for the 27 episodes that have aired to date, and the donations will continue until the final episode. Aiming to leave future generations a livable world, D Productions plans to create the “Güneşi Beklerken” Forest at the end of the project. Besides his work on “Yeşil Doğa” Güven İslamoğlu also conducts nature seminars at numerous elementary schools, high schools, universities, non-profit organizations and corporations in order to help raise public awareness on this issue. Additionally, the public service ads inserted in the TV programs, entitled “Seyirci Kalmayın” (Don’t Just Watch), which is presented by Güven İslamoğlu and airs on CNN Türk on weekdays, are also aimed at increasing public “Evim Şahane” Supports Families The popular daytime program “Evim awareness. Şahane” (My Sweet Home), which has been running for three seasons, gives support to low-income families with its production team and presenter, Architect Selim Yuhay. In 2014, the “Evim Şahane” truck will continue to visit and support needy families during the year. DYH 2013 ANNUAL REPORT 51 At a Glance Operations Sustainability Corporate Governance Dividend Distribution Financial Information Corporate Social Responsibility Corporate Social Responsibility We publicize many valuable SOCIAL development initiatives to a broad audience. As part of the “A Music Room in Every School” campaign, initiated by Radio D in 2012 and continued throughout 2013, music rooms are renovated and musical instruments are donated to state high schools in need. Radyo D Supports Social Projects In 2013, Radio D continued to carry out and support several initiatives that contribute to social development. As part of the social responsibility campaign entitled ‘‘A Music Room in Every School’’, initiated by Radyo D in 2012 and continued throughout 2013, music rooms are renovated and musical instruments are donated to state high schools in need. Radyo D was the radio sponsor of the “Diet Festival”, which was organized for the first time both in Turkey and the world on May 17-18, 2013. Under this sponsorship, Radyo D informed its listeners about the Festival, which aims to fight obesity and teach healthy nutrition habits. 52 DYH 2013 ANNUAL REPORT In 2013, Radyo D also sponsored the 1st International Road Traffic Victims Conference, which aimed to draw attention to the problems of road traffic victims and the ways to protect them. At the conference, which was organized for the first time in Turkey under the theme “The Importance of Justice in the Lives of Road Traffic Victims”, solutions to victims’ problems were discussed. With its support, Radio D contributed to raising public awareness on traffic and environment-related issues. Additionally, Radyo D undertook the radio sponsorship of the 2013 Winter Equestrian Festival and the Pony Jumper Championship organized by the Turkish Equestrian Federation. Doğan Burda Magazine’s Social Responsibility Projects As in previous years, Doğan Burda Magazine pursued efforts to support social development by undertaking several social responsibility initiatives, primarily in the areas of culture and the arts, history, nature, environment and health throughout 2013. Doğan Burda’s commitment to environmental and social issues is reflected in the CSR projects spearheaded by the magazines under its umbrella. Philanthropists With its “Turkey’s Philanthropic 50” survey, Capital magazine identified the business people who make the largest charitable contributions, and presented them with awards in recognition of their efforts. The survey was the first of its kind done by Capital and many major Turkish companies and conglomerates’ chairpersons participated on behalf of their companies or groups. The rankings were formulated on the basis of responses to questions such as “How much have you been donated in total in the last 10 years?” and “How much did you donate in total in 2013?” According to the results of the survey, Doğan Holding ranked eighth in terms of total donations both in 2013 and over the last 10 years. Social Responsibility Leaders Capital Magazine’s annual Corporate Social Responsibility Leaders Survey aims to identify the social responsibility leaders of Turkey. Conducted every year in March, the survey stresses the importance of and creates a buzz about corporate social responsibility. Corporate Social Responsibility The Corporate Social Responsibility (CSR) supplement, issued by the Ekonomist magazine, encourages companies to undertake social responsibility activities. The CSR supplement helps raise corporate social responsibility awareness among large Turkish companies that contribute to the economy and employment, and also presents growing companies with best practices in this area. Social Responsibility The reception for introducing Samsung’s new Smart TV technology and designs was organized as a fundraising event for the “Make-A-Wish Foundation” in collaboration with HELLO! Magazine. In 2013, Doğan Burda Magazine Group supported UNICEF campaigns by promoting them via ads and in digital media. Supporting Entrepreneurship Ekonomist magazine contributed to the business world with its projects entitled “Women Entrepreneurs” and “Business People of the Year”. The “Women Entrepreneurs” initiative awards the “Woman Entrepreneur of Turkey”, the “Most Promising Woman Entrepreneur” and the “Woman Entrepreneur Who Has Made a Difference in Her Region”. In 2013, 5,600 individuals applied to the “Women Entrepreneurs” project, which adds value to society by sharing success stories. Further, Capital magazine has also supported entrepreneurship in our country by organizing the surveys “The Most Popular Companies” and “Capital 500”. Brands of Anatolia Doğan Burda’s commitment to environmental and social issues is reflected in the CSR projects spearheaded by the magazines under its umbrella. DYH 2013 ANNUAL REPORT 53 At a Glance Operations Sustainability Corporate Governance Dividend Distribution Financial Information Corporate Social Responsibility Doğan Burda magazines such as Tempo, Elle, Hello! and Istanbul Life sponsored several arts & culture events, and primarily IKSV (Istanbul Foundation For Culture & Arts) events, throughout the year. Corporate Social Responsibility Activities that ENCOURAGE CREATIVITY The seventh edition of the Brands of Anatolia project was organized in 2013. The aim of the project is to promote and encourage Anatolian brands, which add value to the Turkish economy. Under the project, four meetings are held across Anatolia each year to share branding stories and to reward the successful brands of Anatolia. Culture-Arts and Creativity Doğan Burda magazines such as Tempo, Elle, Hello! and Istanbul Life sponsored several arts & culture events, and primarily IKSV (Istanbul Foundation For Culture & Arts) events, throughout the year. As in previous years, ELLE Decoration supported the seventh edition of the Istanbul Design Week in 2013, by hosting the editors-in-chief of foreign editions. Additionally, an exhibition and a reception were organized to bring together designers and architects. Always supporting projects that help promote Turkey through design, culture and the arts, ELLE Decoration once again presented the EDIDA awards in 2013. As Turkey’s representative of the “Cannes Lions International Festival of Creativity”, Doğan Burda Magazine Group carried out various activities in 2013 to help foster creativity and further develop the ad market in Turkey. 54 DYH 2013 ANNUAL REPORT Doğan Burda Represents Turkey at Cannes Lions International Festival of Creativity As Turkey’s representative of the “Cannes Lions International Festival of Creativity”, Doğan Burda Magazine Group carried out various activities in 2013 to help creativity and foster the ad market in Turkey. The Festival is the largest international organization in its field, bringing together thousands of professionals in communications, marketing and advertising from around the world. As part of the Festival, Doğan Burda organized the Turkish selection for the “Young Lions” competition and took 10 young communication professionals to the international festival to represent Turkey. Moreover, Doğan Burda also organized the “Panel and Award-Winning Works” exhibition within the Crystal Apple Festival, providing the opportunity to get acquainted with the Festival and see the award-winning projects to those who could not go to Cannes. Sustainable Growth and the Environment ENVIRONMENTFRIENDLY ACTIVITIES Sustainable Growth and the Environment for a healthy future Doğan Group’s Environmental Policy Offering numerous products and services in various sectors, Doğan Group companies formulate policies and strategies that aim to protect and improve the environment and prevent environmental pollution as well as to conserve biodiversity, ecosystems, wildlife, flora and fauna, waterways and water resources. DYH considers environmental protection an important task for the future of humanity and nature. DYH’s environmental management policy focuses on five main areas, as follows: • Energy • Waste Management, Disposal and Recycling • Water Use • Transport • Air Emissions Doğan Group strives and commits itself to: • Complying with international legal regulations approved by national public agencies, environmental laws, regulations and other obligations, • Pursuing international best practices, including those not demanded by public authorities, so as to internalize those which could contribute to our business, • Raising the environmental awareness of Turkish citizens and the citizens of other countries where our publications and broadcasts are available, • Opting for and utilizing eco-friendly technologies, • Devising eco-friendly products and services, • Reutilizing or recycling raw materials and equipment with a view to saving natural resources, • Increasing energy efficiency and prioritizing renewable energies in all of our operations to ensure responsible energy consumption, • Taking action to measure and improve the environmental footprint of our Group activities, • Continuously improving the efficiency of Doğan Environmental Management System, and disclosing it to the public • Ensuring that the environmental management systems of Group companies are in line with the accepted standards, certified and periodically audited by authorized firms, • Reviewing the environmental policy of the Company regularly and monitoring the compliance of the Holding and Group companies with this policy, • Communicating and devising joint projects with environmentalist NGOs, • Training all employees about the environment and encouraging them to participate in ecological activities, • Communicating with all stakeholders as regards the protection of nature, offering training seminars, and expending efforts to diminish our environmental footprint and to protect biodiversity in our fields of activity. Doğan Group’s Environmental Policy is pursued by the Holding and all Group companies. Group companies participate in the determination of environmental objectives. DYH 2013 ANNUAL REPORT 55 At a Glance Operations Sustainability Corporate Governance Dividend Distribution Financial Information Sustainable Growth and the Environment Sustainable Growth and Projects that aim to raise awareness the Environment TO WIN THE FUTURE Doğan Yayın Holding’s Environmental Initiatives From a Grove to a Forest with Doğan Dağıtım’s Saplings Doğan Dağıtım undertakes efforts to Environmental Health and Protection preserve forests and sustain ecosystems, in Doğan Holding and DYH’s which constitute the heart of nature. To that Administrative Buildings end, the Company makes regular donations At the new headquarters building, opened in to the Aegean Forest Foundation. The grove 2011, all of the newly purchased coolers and started by Doğan Dağıtım initially with equipment with coolers use environmentally 2,500 saplings was expanded to reach 10,700 friendly cooling gases. The import, use and saplings and attained forest status in 2013. delivery of the cooling gases to the endThe Company aims to further expand the consumer are done in accordance with the forest and reach a total of 15,700 saplings in regulations of the Ministry of Environment 2014. and Urban Planning. The maintenance of the cooling systems at the headquarters of Doğan Burda’s Environmental Projects the Holding is carried out periodically by contracted authorized technical services. “Atlas’ Meetings” Support Anatolia’s The headquarters is equipped with state-of- Natural Treasures the-art cooling systems manufactured in line Atlas magazine, which aims to introduce with EU environmental policy, using R 410 the natural and cultural riches of our and R 132 gases. country to readers, has been supporting Anatolia’s natural treasures since its launch. At the new building, which is also equipped The magazine organizes special meetings, with state-of-the-art, environmentally conferences and trips to different parts friendly fire fighting systems, the number of of Turkey under the project called “Atlas fire extinguisher canisters was reduced. Fire Meetings”. As part of these trips, Atlas extinguishers are inspected biannually for readers gave their support to the “Pistachio any leaks by contracted authorized technical Nut Abundance” campaign in Gaziantep services. and also participated in the “Tea Harvest” in Rize. As a result, readers’ knowledge and Thanks to the thermal insulation technology awareness about the environment increased. of the building, the consumption of natural Further, they had the opportunity to gases for heating and electricity for cooling familiarize themselves with Anatolia’s two have decreased resulting in a reduction of major agricultural products in their natural the building’s carbon emissions. environment. In 2013, no lawsuits have been filed against the Company due to environmental damage claims. 56 DYH 2013 ANNUAL REPORT Eco-friendly Business Practices with Green Business Capital magazine issues the Green Business supplement for the business world with the belief that economic sustainability can be achieved with environmentally aware strategies. The Capital Green Business supplement, which is published quarterly, features eco-friendly business practices and helps increase environmental awareness among business people. Ecological Agriculture from Yeşil Atlas Atlas magazine publishes an environmental magazine, Yeşil Atlas, to unveil Turkey’s natural riches and create awareness about protecting Anatolia’s natural treasures. A number of professionals provide editorial support to Yeşil Atlas, which has become a nature library with its rich content over the years. In its 2013 issue, the magazine featured ecological agriculture practices under the theme “Green Dining”. Doğan Ofset’s Industrial Waste Management Plan The Industrial Waste Management Plan, devised by Doğan Ofset with an aim to minimize the environmental impact of its production processes, was approved by the Governorship. Under this plan, chimney emissions were measured and necessary improvements were undertaken. Other Waste Management efforts include the analysis of waste oil, arrangement of the waste storage area, and collection of waste oil separately on site. Hürriyet’s Environmental Sustainability Practices Hürriyet newspaper aims to protect human health and the environment in all stages of production in order to leave future generations a livable world. To that end, the company established the “Environmental Control Department” on January 31, 2011. This department undertakes efforts to minimize the environmental impact of production activities. Acting in a responsible way in terms of achieving environmental sustainability, Hürriyet aims to reduce electricity and natural gas consumption by using energy efficient equipment across all business units. In accordance with the revised Environmental Regulations, the Company Additionally, Doğan Ofset employees undertakes efforts toward environmental received training on Environmental improvement at the printing facilities and Legislation in April and December 2013, to the office buildings by the Environmental become informed about their environmental Control Department. In 2013, Hürriyet’s responsibilities. printing facilities underwent inspections in accordance with the Environmental Law and Doğan Gazetecilik’s Environmental relevant Environmental Regulations, and the Sustainability Practices inspection reports were presented to senior Doğan Gazetecilik believes that the use of management. The Company plans to repeat energy efficient equipment plays a major role these inspections in 2014. in energy saving. Therefore, the company uses equipment that helps reduce electricity In order to increase environmental consumption, energy-saving light bulbs awareness among employees, the Company and electronic ballasts. Additionally, air organizes training programs on climate conditioning maintenance is carried out change and environmental management regularly to keep filters clean. systems as well as transporting, storing, recycling and disposal of hazardous and Doğan Gazetecilik places great importance non-hazardous waste generated at printing on recycling, and undertakes effective waste facilities. management efforts by placing collection units for waste paper, glass, plastic materials, Acting in a responsible way in terms of composites, used batteries and HP printer achieving environmental sustainability, cartridges and toners in both its offices and Hürriyet aims to reduce electricity and production facilities. natural gas consumption by using energy efficient equipment across all business units. The Company also undertakes all necessary efforts to reduce its CO2 emissions, in other words, to minimize its carbon footprint by using state-of-the-art and appropriate technologies. DYH 2013 ANNUAL REPORT 57 At a Glance Operations Sustainability Corporate Governance Dividend Distribution Financial Information Sustainable Growth and the Environment Sustainable Growth and Important partnerships the Environment FOR RECYCLING EFFORTS Thanks to the “Recycling Campaign”, launched under the slogan “More Hürriyet for the Environment”, 3,672 trees were conserved. Besides conserving energy resources, Hürriyet also places importance on the efficient use of water. Accordingly, water consumption at Hürriyet is monitored via instructions, warning labels and daily water consumption reports kept at the printing facilities and the office buildings. Efforts to reduce waste at the source include effective production planning, minimum inventory usage, and improvements in work practices. In order to prevent environmental pollution, Hürriyet acts responsibly in all business processes, from production to packaging and waste management. In accordance with the Packaging Waste Regulations, all packaging materials produced by Hürriyet Group are declared via the online system of the Turkish Ministry of Environment and Urban Planning, and the company has delegated authority to TUKÇEV Foundation to collect packaging materials according to predetermined quota. Hürriyet facilities in all regions have developed “Three-Year Industrial Waste Management Plans” and these plans have been approved by the Regional Directorates of the Ministry of Environment and Urban Planning. Further, storage facilities to temporarily hold hazardous waste have been set up in these regions. Waste collected in these temporary storage units is sent to disposal and recycling companies, licensed by the Ministry of Environment and Urban Planning, and their records are maintained. Every year, the company purchases and/or 58 DYH 2013 ANNUAL REPORT renews the legally mandated “Hazardous Materials and Hazardous Waste Liability Insurance” policy to cover any damages that may be caused by these temporary hazardous waste storage facilities to third parties. The amount of waste sent to disposal and/or recycling companies during the previous year are reported to the Ministry of Environment and Urban Planning via the Hazardous Waste Declaration System (HWDS). Recycling Project with the Collaboration of Hürriyet and TEMA Foundation In 2013, Hürriyet newspaper launched a new project entitled “One New Hürriyet in Exchange for Three Read Newspapers”, in collaboration with the TEMA Foundation. The project, which reflects Hürriyet’s social responsibility and environmental awareness, attracted a lot of attention from across the country. Under this project, readers who brought in any three newspapers received a new Hürriyet newspaper for free. The “Recycling Campaign”, launched under the slogan “More Hürriyet for the Environment”, took place October 7-31, 2013. During the campaign, a total of 1,200,218 newspapers were collected in 24 days and 400,000 free copies of Hürriyet newspaper were given out in return. The total weight of collected newspapers reached 216 tons and as a result, 3,672 trees were conserved. Hürriyet contributed to Turkey’s forest treasures by donating the campaign proceeds, which amounted to TL 67,887, to TEMA. Environment-friendly Practices at Hürriyet Printing Facilities Paper Usage Recycled paper constitutes 9% of the overall paper usage at DYH facilities. In 2013, nearly 14,000 tons of recycled paper was used for newspaper printing. Biological Treatment Domestic wastewater generated at DYH facilities is collected by means of a designated wastewater plant. After physical treatment, the wastewater is also biologically treated. Waste Paper Waste paper is stacked at collection points and then sent for recycling to Non-Hazardous Waste Collection facilities licensed by the Provincial Directorate of Environment and Urbanization. Unsold newspaper copies are collected from the dealers and sent to cardboard/paperboard manufacturers for recycling. Batteries and Accumulators Waste batteries used in electronic devices along with accumulators used in generators, electric forklifts and uninterruptible power supply devices at the facilities and the offices are collected in the PE collection bins of The treatment plant is managed by the the Portable Battery Manufacturers and relevant departments at the Company. Importers Association (TAP) and delivered Additionally, Regional Directorates of the to the relevant company for disposal. Waste Ministry of Environment and Urban Planning accumulators are either returned within and Municipalities regularly collect water the framework of a deposit-refund system, samples and oversee the treatment process. or properly stored and then delivered to licensed companies for recycling within a Following the treatment process, sludge period of 90 days. is kept at hazardous waste depositories in accordance with the standards set by the Waste Aluminum Plates Ministry of Environment and then delivered Aluminum plates used for printing are to licensed companies for disposal. first cleaned with special cloths, and then collected at waste collection points before Chemical Treatment being delivered to collection/separation An integrated chemical and biological companies licensed by the Ministry of treatment plant has been constructed at Environment for recycling. These plates are the printing facilities in Istanbul. Domestic then processed by metal manufacturers to wastewater is biologically treated, whereas be reused as various home appliances. mixed industrial wastewater is first chemically treated and then discharged to the İSKİ (Istanbul Water and Sewage Administration) sewage system. Waste Chemicals The chemicals, reservoir water and cleaning solvents used in printing are collected separately on site. These liquid wastes are collected in plastic drums classified according to hazardous waste codes, and temporarily kept in hazardous waste depositories as per the standards set by the Ministry of Environment and Urban Planning, and then sent to licensed companies for disposal. Sludge Sludge generated at treatment plants is classified as “hazardous waste”. Therefore, it is first dewatered using filter presses and then temporarily kept in hazardous waste depositories before being sent to licensed companies for disposal. Waste Plastic Drums, IBC Tanks, Metal Barrels and Tin Containers Drums, barrels and tin containers that hold reservoir water, solvents and oils used in production are considered contaminated packaging. These materials are stored at waste collection points and later sent to licensed companies for cleaning and recycling. DYH 2013 ANNUAL REPORT 59 At a Glance Operations Sustainability Corporate Governance Dividend Distribution Financial Information Sustainable Growth and the Environment Sustainable Growth and the Environment ENVIRONMENTALLY CONSCIOUS AND EFFECTIVE PRACTICES for the ecological balance Contaminated Waste Absorbents, cleaning cloths, filtering materials, work clothes and gloves, and protective clothing contaminated with hazardous chemicals used in production are collected on site. In order to prevent any harm to the environment, nature and humans, these wastes are temporarily kept in hazardous waste depositories and then sent to licensed companies for disposal. Waste Oil When they expire, mineral oils used in machinery are collected separately on site, and temporarily stored in hazardous waste depositories in accordance with health and safety requirements. Waste oil is then analyzed in laboratories approved by the Ministry of Environment in terms of category, and sent to licensed companies for recycling. Scrap Electronics In accordance with relevant regulations, all scrap electronics are sent to companies licensed by the Ministry of Environment for recycling. Scrap Fluorescent and Mercury-Vapor Light Bulbs Scrap fluorescent and mercury-vapor light bulbs are collected by trained personnel in accordance with health and safety requirements. These scrap materials are kept in hazardous waste depositories as per the standards set by the Ministry of Environment, and then delivered to licensed companies for disposal. 60 DYH 2013 ANNUAL REPORT Medical Waste Infectious and pathological wastes generated in infirmaries as a result of certain medical procedures, pharmaceutical wastes and wastes that contain incisory-piercing instruments are collected in medical waste depositories to avoid any harm to human health or the environment. These are then sent to municipal disposal facilities. All infirmaries have contracts with related municipalities regarding the collection of medical waste, and these contracts are renewed every year. Printer Cartridges and Toners The Company prefers to purchase the products of HP, which has established a worldwide recycling system. Waste toners and cartridges are delivered to HP for recycling. Used cartridges and toners of other brands are also sent to licensed companies for recycling. Gas Emissions The newspaper printing machines run on electricity and therefore no gas is emitted into the atmosphere during production. Since the heating systems at the printing facilities and the office buildings are below 2 MV, CO2 is released at minimum levels. The Company filed an application for emissions permit with the Provincial Directorates for the new generation drying systems at the printing facilities in Istanbul, and obtained an opinion letter stating that these systems are exempt from emissions permits. Non-Hazardous Waste Metals, wood, plastics, packaging waste, waste paper and cardboard, which have not been contaminated during production, are collected on site, and kept in nonhazardous waste depositories or containers before being sent to licensed companies for recycling. Environmental Cleanup The industrial cleanup of the environment surrounding the facilities is undertaken by firms on a regular daily basis. In addition, the Company’s Environmental Control Department takes measures and posts warnings against soil pollution at production facilities. Treated wastewater is used for garden irrigation. Maintenance of Green Space and Planting of Trees Landscape maintenance of areas reserved as green space at all facilities is undertaken by expert firms on a regular basis. Code of Ethics and Conduct WORKING PRINCIPLES Code of Ethics and Conduct for flawless operation 1. Subject and Scope • The resources and the means of the The Code of Ethics consists of the principles Company may not be used for the purpose that the employees of our Company must of supporting political activities; no political comply with when fulfilling their duties, as activities may be carried out at the Company, well as the working order related principles. no donations may be made to political The objective of those principles is to establish parties or the candidates thereof, and political a general framework of the basic rules that campaigns may not be supported. need to be complied with, and to prevent any disagreements and conflicts of interest which The details about the articles listed above are may arise between employees, business partners, presented below. customers, and our Company. 2.1.1. Gifts Allowed To Be Given 2. Basic Principles Employees must make sure that the gifts to be Managers and employees must comply with given to parties with which we have business the basic principles set forth in this document relations are in line with the rules set forth in this hereby in all their affairs and businesses, and document. The below rules have been identified must do their best to maximize the reputation for the gifts that may be given accordingly. of the Doğan Group and its shareholders. Our • The basic rule here is not to make any employees must act as per the principle of care amount of payments in cash, or give gifts and loyalty in situations and under conditions that can easily be converted into money. not covered by this code. However, as per our traditions and customs, the gifts that our employees may give due to The Code of Ethics has been presented under private or general celebrations (e.g. weddings, three main headings: engagement ceremonies, birthdays), in • Conflicts of Interest accordance with their status and position are • Relations with Stakeholders outside this scope, • Flow of Information • The value of the gift given may not exceed TL 500. The approval of the most senior 2.1. Conflicts of Interest executive of the department is required for The basic principles on the conflicts of interest exceptions. and the management thereof have been • The gifts given must not be for affecting provided below. the impartiality, decisions, and conduct • Our employees may not use their duties and of the other party with regards to any powers for their own, families’ or third parties’ business dealing, agreement, or bureaucratic benefits to gain personal and private interests transaction that the Company is involved in. in any manner whatsoever. • Our employees may not accept direct or 2.1.2. Gifts That Can Be Accepted indirect gifts and obtain benefits in relation Our employees may not ask for any personal with the Company business, and accept payments or gifts from third parties that have debts from persons or companies that the business dealings with the Company, nor may Company has business relations with. act in a manner as to imply such requests. • Our employees may not give gifts, or provide Provided that the rules of honesty and good benefits, to third parties and entities which intentions are complied with, gifts may be will influence their impartiality, decisions, and accepted only as per the following rules. conduct. • Our employees may not accept payments in any manner and quantity whatsoever. This includes instruments that can easily be converted into cash (e.g. gift cheques). • Gifts may be accepted provided that they are not payments, that they do not exceed TL 500, are not related with any business or agreement that concerns the Company, and that it is clear that they are not given for the purpose of influencing our employees on these matters. • In case they encounter non-cash gifts or offerings the value of which exceeds TL 500, the employee should not accept such gift as a principle. However, exceptionally, in case of a gift that is presented in such a manner and reason as to not lead to a conflict of interest, such gifts may be accepted with the written approval of the management. Written approvals are obtained from the most senior executive of the relevant department of the employee. Approvals indicating that the gifts may be accepted must be kept by the party obtaining the permission. 2.1.3. Gifts That Can Be Given to Officials When an employee wishes to give gifts to any official or public employee, action must be taken as per the current decision of the Ethic Committee of the Prime Ministry at the address of www.etik.gov.tr. 2.1.4. Business Lunches and Dinners When inviting someone for, or attending, a lunch or dinner invitation, employees must be careful to ensure that the invitation is compliant with the purpose. As a principle, an invitation extended as a business meal must be at a location that is fit for the concept of a business meal, and the positions of the attendees. DYH 2013 ANNUAL REPORT 61 At a Glance Operations Sustainability Corporate Governance Dividend Distribution Financial Information Code of Ethics and Conduct Code of Ethics and Conduct Our employees act within the framework of OUR CODE OF ETHICS 2.1.5. Activities of Political Content Doğan Holding respects the rights of the employees to individually take part in political events, however those who take part in political events must clearly specify that they are not representing the Company. The following are expected from our employees who take part in political events: • To clearly reveal the fact that you are not representing the Company in any manner whatsoever • To absolutely abstain from using Company resources in fulfilling or supporting personal political activities (including Company time, telephones, papers, e-mail and other assets). 2.1.8. Personal Investments When our employees are managing their personal investments, they may not make personal investments with the shares of the companies or other investment instruments which will create any possible interest conflicts with their duties and responsibilities at the Company. 2.2. Relations with Stakeholders The basic principles that the employees must take into consideration with regards to their relations with stakeholders (e.g. each other, business partners, customers, suppliers) are listed below. • The principles of honesty, trust, consistency, 2.1.6. Side/Second Jobs professionalism, long term relations, and Company employees may not work at a second respect for mutual interests are regarded in job with remuneration neither during work days, relations with the customers, suppliers, and weekends, national holidays, and general holidays, other persons and organizations that the nor during their annual paid leave days. The Company has business relations with. Human Resources Department shall be informed • The objectives are superior quality, and for the works carried out in return for copyrights meeting the needs and expectations of the through cultural, artistic, or scientific work. customers fully with regards to services and products. Furthermore, in case our employees receive an • Competitors’ products may not be slandered, offer that requires them to receive remuneration, and misleading advertising is not allowed. such as consultancy, or a similar position, or • In Human Resources Management, no in case they hold direct or indirect shares at a discrimination is allowed due to race, ethnic company, they must obtain the written approval origin, nationality, religion, and gender; equal of the Chief Executive Officer. opportunities are offered for people under equal conditions; performance and efficiency Furthermore, our employees may carry out are taken as the basis for remuneration and volunteer activities in such a manner as to not promotions, and an “open doors policy” is disrupt their duties and responsibilities at the embraced. Company (e.g. charities, foundations, or non• The employees are offered a secure and government organizations founded legally). healthy working environment, and an However, they may not use corporate titles and opportunity to develop their careers at the positions during the course of such activities. work place. • Commitment to for the protection of 2.1.7. Proxy Agreements with Customers environment and natural life, consumer rights, Employees may not undertake proxy duties and public health as well as compliance with for third parties with whom they have direct or the regulations thereon is essential. indirect business relations (unless they are close relatives or family members). 62 DYH 2013 ANNUAL REPORT • Known or suspected breaches of the Code must be presented to the attention of the Department Manager or the Human Resources Management prior to taking any personal measures. • Employees must dress in a manner that is fit for a business surrounding, simple, and professional, and they must absolutely refrain from clothes that are not in line with the seriousness of the Company, and that represent a certain political, religious, or a social view. • Employees only regard the interests of the Company with priority rather than individual and family concerns when making business related decisions. Furthermore, in case of encountering an uncertainty at the decision making stage, priority should be given to public interest. • Employees shall exercise maximum care with regards to Company expenditures, and act with an awareness of savings and costs. • Unless expressly authorized, employees may not undertake any commitments, and make statements on behalf of the Company. • Company activities are carried out taking into account the legislation in effect, the Articles of Association of the Company; internal regulations, and the policies created. The deadlines and other restrictions set forth in the information requests received from the official entities are complied with. • Employees carry out their duties in an equitable, transparent, accountable, and responsible manner. • Mutual respect, trust, and cooperation are essential in relations between employees. • All employees fulfill their responsibilities to protect and further the respectable image of the Company. Accordingly, all employees ensure that their personal attitude and behavior are in compliance with the law and the general Code of Ethics. 2.2.1. Communication Giving wrong, misleading, and exaggerated information during contact with our customers or other organizations should absolutely be avoided. 2.2.4. Customer Complaints Any and all complaints of our customers with regards to corporate products and services must be directed to the required channels in order to ensure a fast and proper solution. Any and all serious and extraordinary complaints which may affect the reputation of our Company must be conveyed to the relevant Department Manager and the Corporate Communication Group without delay. 2.3. Flow of Information All company related information is subject to the principle of confidentiality, and it is forbidden to convey such information to third parties and trade such information. Accordingly: • Any and all kinds of Company information 2.2.2. Media Inquiries and Interview Requests as well as the personal information of the Any and all kinds of interviews or clarification employees and that of the customers and requests to be used in the media shall be business partners are kept confidential. coordinated and replied as per the written • Employees may not use the secret and non“Information Policy” of the Company. public Company information in their own 2.2.5. Legal Requests Regarding Shareholders favor and in the favor of others. Employees may not make any clarifications to Information requested by the authorized entities • Care is exercised with regards to restrictions any media, print, verbal, or visual, on the relevant regarding shareholders may only be given with relating to copyrights, commercial brands, topics with regards to the Company, without the the approval of the Legal Counsel. commercial secrets, and patents. permission of the Chief Executive Officer or the Chairperson. 2.2.6. Transactions against the Competition 2.3.1. Company Related Information Law Proprietary commercial secrets, financial Speaking, presenting papers, or becoming a Our employees may not, under any condition, information, customer-employee information, panelist in meetings held by others, such as act in a way, or be involved in agreements, with and all information acquired during the course congresses, conferences, and seminars, require the competitors that may create a dominant of employment, materials, programs and the written approval of the most senior position in the market or that may influence the documents, computer and telecommunication executive of the relevant department. Likewise, pricing and the marketing policies, and that may systems, hardware-software, and all other no articles, papers, or pictures may be prepared violate the competition regulations. In case of arrangements and practices as well as all works using the titles at the Company, without uncertainties, action shall be taken pursuant to by the employees in the Company, agreements, approval. the opinions of the Legal Counsel. and products developed are confidential, and are owned by the Company. The information 2.2.3. Pricing 2.2.7. Legal Matters related with third parties acquired during such works also falls under this scope. For the pricing of all products and services In case our employees are involved in a penal delivered by the Company, our employees or an administrative interrogation, taken under It is absolutely forbidden to use such a are obliged to comply with the internal custody, arrested, taken into interrogation or document for personal or private interests or corporate regulations as well as the relevant convicted due to any reason whatsoever (to for the benefit of third parties, entities, and legal obligations. Compliance with the rules be heard as witnesses or as the accused party), organization, while working at the Company, or set forth in this document hereby as well as they must inform their Managers and the the reputation of the Company is taken into Human Resources Management in writing, or in afterwards upon leaving work. The patent rights of inventions belong to the Company. consideration with regards to pricing. cases that is not possible, verbally. The Human Resources Management shall inform the Legal Counsel, and where necessary, it will be ensured that they receive the support of an Attorney. DYH 2013 ANNUAL REPORT 63 At a Glance Operations Sustainability Corporate Governance Dividend Distribution Financial Information Code of Ethics and Conduct Code of Ethics and Conduct MUTUAL TRUST between us and the related parties All our employees are responsible for working in accordance with the rules and principles specified in our Code of Ethics. 2.3.2. Ban on Insider Trading It is absolutely forbidden for our employees who possess any and all confidential information on the Company, the customers, or the transactions to use such information when buying and selling financial instruments such as shares, et. al. and to gain personal interests, including their third degree relatives as well, and to convey such information to third parties through inappropriate means. 2.4. Document Responsibility The implementation and the control of these Regulations shall be carried out under the responsibility of the Executive Committee of Doğan Holding. 2.5. Practice Our employees are expected to comply with the principles set forth within the scope of the Code of Ethics. Accordingly: • Action is taken as per the Labor Law, other relevant legislation, and the provision of the 2.3.3. Information Systems internal procedures about those who violate No software that has been developed within the the rules set forth in this document hereby. Company or procured externally may be used without authorization and permission regardless • Employees who know/suspect of any rule violations, but do not inform the Department of the purpose of such use, whether personal or Manager or the Human Resources business related, may not be allowed to be used Management about this issue are assessed in by third parties, and may not be copied. the same manner with the employee who is in violation. 2.3.4. Confidentiality of Electronic Documents or Other Information 2.6. Effectiveness As a rule our employees should not use the equipment, system, or e-mail systems of the These regulations have become effective Company to prepare, store, or send personal and pursuant to the approval of 01.04.2013 of the private information. However, in case of such Executive Committee. use they will have waived the confidentiality of their personal information, and the employees responsible for the supervision and the security of the Company will be entitled to examine such information. 64 DYH 2013 ANNUAL REPORT Media Code of Conduct Publishing and broadcasting IN LINE WITH OUR Professional and ethical principles DYH’s publishing and broadcasting principles were reviewed in December 2012 taking into consideration new media and updated principles were subsequently disclosed. The new principles are now split into two sections, publishing and broadcasting, and the Shared Values are defined below. Our Shared Values Doğan Media Group is a leading media provider offering exclusive, topical news stories, content and services that engage its audience in active dialogue and add value to their daily lives across all channels formats and on a global, 24/7 level. Our “Shared Values” are the most important shared asset between publisher and employee and constitute the foundation of our publishing principles. Our Shared Values also form the basis of the intangible, yet critically important, contract between Doğan Media Group, its readers, viewers and listeners. We promise our readers, viewers and listeners a top-quality publishing and broadcasting services - one that is creative and in line with professional and ethical principles; one that at times breaks the mold and traditions, but is ever-respectful of its audience. Media Code of Conduct 1. Trust Earning society’s trust through our general attitude and our audience’s trust through what we print and broadcast is our most important value. The very foundation of Doğan Media Group today, as well as the Group’s future, is based on trust. 3. Accuracy and Truthfulness a) The fundamental purpose of our publications is to relay facts to the public at large in an objective manner, without distorting, exaggerating or censuring said facts and without being influenced by any external pressure or special interest groups along the way. 2. Independence a) The independent nature of Doğan Media Group, its management and employees, is what forms the basis of the trust we have established in society as well as with our audience. b) The element of speed should never overshadow truthfulness, exaggeration and simplification should never stand in the way of the multi-faceted nature of truth. We should openly admit to what we do not know and make an effort to avoid speculation. Doğan Media Group employees and management respect their professional position above and beyond any and all relationships based on interest and influence. They may not enter or partake in any activity or organization that could tarnish the Group’s, the Company’s or their own reputation and should avoid any and all conflict-of-interest situations that would cast doubt on Doğan Media Group’s independent stance. b) Among the most integral factors of the Group’s independence is the fact that Doğan Media Group’s business activities are built upon economic realities and prudent management principles. We will not engage in activities that do not create economic value. This is because an activity that is not economic in nature is simply dependent on yet another source. c) We separate and identify commercial elements appearing in our publications, such as advertisements, commercial messages and sponsorship matters, in a manner that leaves no doubt as to the commercial nature of such elements. We exercise care to not use commercial brand names of companies and commercial product names, provided that such names do not constitute the main story. We do not publish or broadcast any content whatsoever that is based on any suggestion or advice received from advertising sources. c) Our goal is to never mislead our audience knowingly or deliberately, while minimizing any misleading behavior that stems from a lack of information and diligence on our part and take corrective action at the earliest possible moment. 4. Impartiality, Pluralism, Fairness a) Our publications should be pluralist in a manner that reflects different aspects of the truth and to be impartial in the face of ideas that represent different sides of the truth and social stakeholders. Impartiality and pluralism means considering our publications in their entirety and within a reasonable time span reflecting all mainstream ideas existing within society, without ignoring any such ideas within the confines of proportional fairness. b) We aim to be open-minded and free of prejudice in the course of evaluating opinions and elements of proof that either defend or oppose an idea, attitude or behavior. We must act fairly in the face of different opinions, ideas, attitudes and behavior. We must be able to place ourselves in the shoes of those who are different and measure whether or not we have been acting fairly. DYH 2013 ANNUAL REPORT 65 At a Glance Operations Sustainability Corporate Governance Dividend Distribution Financial Information Yayın İlkeleri Media Code of Conduct We are committed to 5. Compliance with Social Values a) We live in a nation of many voices, within a society that is rapidly changing. We regard wealth in terms of the ideas, beliefs, attitudes and behaviors of our society and consider it a resource that feeds our publishing endeavor. We are respectful toward our democratic and secular system, the Constitution and laws that bind such diversity and wealth together. f) We abstain from defining individuals by their race, nation, social class, religious belief or lack thereof, professional group or physical or mental disabilities, as long as such elements are not an integral part of the story being reported. We avoid creating a setting where such individuals could be subjected to mockery, belittlement, indignity or humiliation due to who or what they are. b) We avoid publishing material that limits the freedom of speech, conscience and expression, is in violation of basic human rights, provokes hatred, brutality and animosity, fans’ hatred and animosity among communities and nations and offends religious beliefs and sensibilities. c) With regard to violence and criminal activity, we do not include details in our news stories that could: a) adversely affect people, especially children; b) act as a motivational factor; or c) divulge specific methods. This includes language and narration that glorifies violence in any publication that deals with violence and criminal activity. RESPECT HUMAN RIGHTS c) We do not publish secretly-obtained images and sound recordings that violate the sanctity of privacy, or any recordings that violate the freedom of communication, unless required for the greater good, even if such recording was obtained through legal means. d) We exercise care to not accuse any individual of actions that are considered a crime by the law unless concrete facts exist to that effect, or pronounce individuals and entities guilty g) We do not engage in “outing” a certain as charged in the course of legal investigations group or individual through various adjectives, unless proven so. We provide equal coverage assessments or methods that render them subjects of discrimination. We certainly and most to the prosecution and the defense, avoid definitely do not allow expressions that promote impacting investigations in a negative manner, and take care to not influence our audience. hate crimes. h) We do not use monikers or references that mock or humiliate individuals and entities beyond the boundaries of fair criticism. 7. Transparency and Accountability a) We are obligated to be accountable to our audience in every endeavor we undertake, starting with our publications. Owning up to our errors openly, if that is the case, and remedying i) We are keenly aware of the fact that our such errors in the most expedient manner is audience expects that their children are our priority. We respect the right to respond protected. We exercise special care so that and correct elements that are borne out of false children and juveniles who appear in or constitute the subject matter of our publications stories and portrayals, and news and articles that and broadcasts are protected both physically and infringe upon constitutional rights. d) We are mindful of the public’s right to be emotionally. informed and how this right must be carefully b) All publishing and broadcasting entities within balanced against furthering terror propaganda Doğan Media Group take structural measures 6. Right to Privacy and Protecting Privacy in our publications dealing with terrorism. As and establish mechanisms designed to avoid a) Our publications respect the privacy of such, we exercise care to not aggrandize the repetitive errors in printing and broadcasting, and consequences of terrorist activities in an excessive individuals. We do not disclose individuals’ facilitate prompt follow-up on the opinions and private lives, communications, correspondence and disproportionate manner; we use language or documents unless there is a compelling reason complaints stated by our audience. that is not ethnically discriminatory. to disregard the requirements of the principle of e) Our publications cover every aspect of global privacy in order to serve the greater good. human life and we are aware that this could at b) We do not use an individual’s lifestyle, attitude times prove to be disturbing, uncomfortable or behavior as a pretext to disclose their private and/or regarded as out of place. While we life unless for the greater good. engage in such reporting, we take pains to not cause deliberate harm to people – especially those groups that need special attention such as children, the disabled and minorities. We avoid offending community values in an unnecessary, excessive and unjustified manner. 66 DYH 2013 ANNUAL REPORT 8. Corporate Dignity a) If it is the public’s respect we strive to earn, we must first respect our own organization and colleagues. b) Regardless of their position within Doğan Media Group, every employee exercises care to avoid behavior that would compromise the dignity of the Company or their colleagues, or cause harm to the reputation of the companies under the Group’s umbrella. Publishing and Broadcasting Board A Board was formed to supervise the publishing and broadcasting practices of media institutions belonging to Doğan Group. The Board is made up of various experts specialized in different fields and disciplines that represent a wide social spectrum; it was formed with the aim of supervising the practices of the editorial principles, determining on the matters that could not be resolved by the media institutions themselves, removing different interpretations and pursuing broadcasting standards that conform to universal norms. Members can remain on the Board for a maximum of six years continuously. At the end of the first two years, one third of the Board will be renewed. • Prof. Dr. Feride Acar/ Middle East Technical University Faculty Member, Member of the UN Committee on the Elimination of Discrimination against Women • Bekir Ağırdır/ General Manager of KONDA Research and Consultancy, Writer/Researcher • Prof. Dr. Bülent Çaplı/ Bilkent University Faculty Member, Expert in the area of Visual Media • Mustafa Denizli/ Sportsperson • Aydın Doğan/ Doğan Şirketler Grubu Holding A.Ş. Honorary President • Doğan Hızlan/ Art and Literary Critic, Writer, Editorial Consultant • Prof. Dr. Yasemin İnceoğlu/Galatasaray University Faculty Member, Expert in the area of Communication • Altan Öymen/ Journalist-editor • Prof. Dr. Turgut Tarhanlı/Bilgi University, Dean of the Faculty of Law, Expert in the field of Constitution and Human Rights • Prof. Dr. Salih Tuğ/Marmara University, Former Dean of the Faculty of Theology, Chairman of the Board of Trustees of the Turkish National Culture Foundation • Prof. Dr. Aydın Uğur/Bilgi University Faculty Member, Expert in Political Science and Communication • Volkan Vural/Former Ambassador, Former General Secretary of the European Union, Advisor to the President of Doğan Holding • Prof. Dr. Nevzat Yalçıntaş/Economist, Former Minister, Former Member of the Parliament and Former General Manager of TRT With the aim monitoring the implementation of publishing/ broadcasting principles, making decisions by evaluating the problems media institutions cannot resolve among themselves, pursuing the goal of publishing/broadcasting at universal norms, the Doğan Publishing Principles Committee is composed of members who are from different disciplines, well known experts, in their fields, and who represent a wide spectrum of society. For our business areas in print and in audiovisual media, separately specified principles as “Publishing Principles” and “Broadcasting Principles” are available on our Corporate website. DYH 2013 ANNUAL REPORT 67 At a Glance Operations Sustainability Corporate Governance Dividend Distribution Financial Information Occupational Health and Safety In 2013, DYH carried out its Occupational Health and Safety related activities under the structure of its parent company Doğan Şirketler Grubu Holding A.Ş.’s Occupational Health and Safety Department. The obligations outlined in the Law on Occupational Health and Safety issued on June 30, 2012 and numbered 6331 (“Law” henceforth) have come into effect as of January 1, 2013 for all companies with more than 50 employees. Within the scope of these legal obligations, work has been started to overcome deficiencies in the staffing pattern. Occupational Health and Safety (OHS) Committees: Occupational Health and Safety Committees have been set up in all Group companies, and committee members were trained about their duties and powers. As per the law, the committees are comprised of the employer’s representative, occupational doctor, occupational safety specialists, human resources officer, employee representatives, and technical and administrative personnel. The committees have convened with the periods demanded by law and have made decisions on issues falling under their authority. Occupational Doctors and Occupational Safety Specialists: Due to variations in the locations and headcounts of Group companies, and as is permitted by law, we embrace the principle of joint use of resources by all Group companies. 68 DYH 2013 ANNUAL REPORT Occupational Health and Safety PEOPLE FIRST In almost all the workplaces, the powers of current occupational doctors were revised in line with the Law no. 6331. Prior to the Law no. 6331, occupational safety specialists were required only in heavy and hazardous work. Since the new law makes these specialists obligatory for all workplaces, new positions were defined for occupational safety specialists. In places where geography permits, companies are to employ common occupational doctors and occupational safety specialists so as to share costs. Otherwise, these services will be procured from Joint Health and Safety Units (OSGB) defined and authorized by the new law. Risk Assessment: Since Law no. 6331 requires all workplaces to assess their occupational health and safety risks and issue a report, risk assessment committees chaired by the occupational safety specialist have issued risk assessment reports in all appropriate units. In the remaining units, the risk assessment reports were issued by procuring services from the above mentioned OSGB. First Aid Training: As per Law no. 6331, according to the level of hazard of each type of work, varying numbers of personnel need to receive first aid training and become first aid officers in a workplace. The required number of employees have received theoretical and practical training from authorized agencies, and these employees have obtained their certification after passing tests. Training Efforts: Law no. 6331 demands that all employees receive basic OHS training, as well as attend additional training programs according to the specifics of their work. In 2013, all new recruits underwent such seminars, whereas technical personnel participated in special training programs according to the nature of their work. Especially in the media, since it is difficult to gather the dispersed personnel for training, distant learning schemes permitted by law were devised and will be launched in the coming days. Recruitment and Periodic Health Checks: Since in many Group companies there is an intensive human resources program, it becomes difficult to follow up recruitment and periodic health checks. To facilitate this Emergency Action Plan: To minimize process, a program was devised to work in damages in emergencies such as fire and sync with the human resources records. As earthquake, emergency action plans have such, deficient health checks were completed been prepared and all relevant personnel have and the health records of all the new recruits undergone theoretical and practical training. were entered in the system. Newly recruited personnel undergo additional checks such as visual tests, X-ray of the core area and ophthalmic checks depending on their area of expertise. These controls were repeated periodically. Additionally, the entire workforce underwent chest X-rays. All willing personnel participated in tests for hearing and sight. During these controls, variables such as air quality, dust, chemicals, temperature, lighting, noise level and biological pollutants are regularly monitored and reported. All willing employees were vaccinated against the flu, since this illness leads to health risks and loss of working days. Monitoring Subcontractors: As per Law no. 6331, the main employer is required to ensure OHS compliance of all subcontractors. As such, the activities of all subcontractors which serve the Doğan Group are closely monitored. Checks for Infectious Disease: All personnel active in nutritional services participate in regular health checks for infectious disease. Workplace Controls: In all facilities, workplaces are checked against any health hazards that could, jeopardize employee health and all necessary precautions are taken. Work Equipment Controls: All equipment used in workplaces were checked by the authorized personnel within the deadlines. Against the risks created in the workplace environment related to health, environmental measurements in all facilities are made periodically and precautions are taken where needed. Legal Compliance: Since early 2013, new regulations are issued and practical guidelines are revised frequently. The Group does its utmost to keep abreast of these revisions and make swift adaptations. DYH 2013 ANNUAL REPORT 69 At a Glance Operations Sustainability Corporate Governance Dividend Distribution Financial Information Human Resources Human Resources Well-equipped and well-educated HUMAN RESOURCES profile In 2013, DYH’s human resources activities were carried out within the umbrella of the Human Resources Department of the parent company Doğan Şirketler Grubu Holding A.Ş.. DYH Human Resources, using modern and rational methods in its procedures and implementations, aims to improve its human resources policies with the feedback regularly received from employees and managers. The major principles in human resources implementations are: designing training programs that will motivate all employees on the issue of creative and innovative approaches, creating a participative and transparent working atmosphere where there is effective communication in all DYH units and providing all employees with a comfortable and safe work environment. Using modern and effective selection and assessment techniques in recruitment processes, DYH aims to find individuals who will join the Dogan Family and thus who will contribute to the sustainable success of the Group with their education, experience and competencies. In the training programs organized within the framework of DYH’s continuous development philosophy, all employees are offered the opportunity to develop their personal and professional competencies. At DYH, where all employees have equal rights, individual differences among employees are not considered among the assessment criteria. Nationality, belief, ethnicity, gender, disability, political opinion and age of the employees are considered as part of the Holding’s human resource “richness”. 70 DYH 2013 ANNUAL REPORT All companies within the structure of DYH adopt and implement the general strategies, principles and policies determined by the human resources. Recruitment, performance management, on-the-job training and development, wage management, implementations of the labor law and processes of legal and regulatory compliance, are carried out by the effective infrastructure services provided by the human resources throughout the Holding. With the web-based human resources platform, it is possible to monitor all implementations as a whole and report them to the management. Human Resources Profile As of the December 31st 2013, the total number of employees within the structure of DYH is 9,702; 6,215 in the country, 3,487 outside the country. Some 53% of the employees in DYH subsidiaries in the country is composed of higher education graduates while 36% is composed of women. Having a young employee profile, 49% of DYH’s employees in the country is between 22-33 average, as of year end 2013. Training Programs Believing that well-equipped and welleducated human resources will make it possible to take the companies into the future, DYH organizes various training programs for its employees in line with this approach. Training programs are organized in parallel to individual demands and sector requirements. On the one hand, training programs are organized to improve the technical competencies of the employees while on the other, individual demands for training programs are evaluated and employees are given the opportunity to get training within or outside the structure of the Holding in case the human resources department finds it appropriate. Collective training programs, where participation takes place from the different companies under the structure DYH, have importance in terms of improving corporate communication. In addition, the training programs requested by the managers for their units are also organized by providing appropriate conditions. With the training programs it offers, the Group aims to support its employees to increase their skills and competencies, and thus aims to reach individual and corporate targets together. In the trainings carried out within DYH, the focus is on the personal development and improving the management skills of the employees. In addition, recent concepts in the sector such as “Social Media” and “IT Law”, are included in the training programs as a result of the Group’s open to change approach. In the coming years, the plan is to also design training programs outside broadcasting and publishing and to offer new opportunities to the Group employees to improve their professional competencies. Gender(*) Education Number of Personnel (Domestic) (Age) 39-48 49 and above Higher Education Male 64% 53% Other 10% Female 8% 22% 24 and under 11% 36% 31-38 34% High School 37% Private Health Insurance DYH employees have private health insurance while their personal health is closely monitored by the occupational health doctors and health care assistants. Legally required procedures such as periodical vaccine shots, eye examinations are also fulfilled. 25-30 25% Doğan Yayın Holding has determined the key management personnel as the members of the Board of Directors and Executive Committee members. The total compensation of key management personnel includes salaries, bonus, health insurance, communication and transportation expenses; the total amount of compensation for these personnel is presented below. (TL thousand) 2013 2012 Salaries and Other Short Term Benefits Post-employment Benefits Other Long-term Benefits Termination (Dismissal) Benefits Share Based Payments Total 2,647 2,647 4,751 4,751 DYH Organizational Chart Board of Directors Executive Board Legal Affairs (*) Financial and Administrative Affairs Corporate Governance Committee Audit Committee Committee for Early Risk Detection Investor Relations Partnerships are included in the number of employees. DYH 2013 ANNUAL REPORT 71 At a Glance Operations Sustainability Corporate Governance Dividend Distribution Financial Information Remuneration Policy Remuneration Policy Equal remuneration for equal jobs BALANCED REMUNERATION POLICY Unless our Board of Directors makes a decision otherwise, the duties of the Remuneration Committee are carried out by the Corporate Governance Committee as also stipulated by the Communiqué for Corporate Governance (II-17.1) (“Communiqué”) of the Capital Markets Board. Productivity is taken into consideration in defining the remuneration and other benefits to the staff. The Company may make plans of gaining shares by the personnel. Such principles of remuneration of the members of the Board of Directors and executives with management responsibilities are made in writing in order to present to the shareholders information in a separate B-Corporate Governance Committee article of the agenda of the General The Corporate Governance Committee: Assembly meeting so participants may give a) defines and monitors the principles, criteria their opinions. The Remuneration Policy is A-General and applications, by taking into consideration announced by the official web site of the In consideration of the market conditions the long term targets of the Company, of Company of www.dyh.com.tr address. and balanced implementations within Doğan remuneration of members of the Board Yayın Holding A.Ş. the Company adopts the of Directors and of the senior executives Dividends, share options or performance principle of “equal remuneration for equal with management responsibilities and their based Company payment plans are not used jobs”. performance evaluation; in the remuneration of the independent members of the Board of Directors. Care is Market trends and performance evaluations b) submits proposals to the Board shown onto the fact that the remuneration are taken into account in defining the of Directors in connection with the of the independent members of the Board of remuneration levels and updating the same. remuneration of members of the Board of Directors shall be in the way to support them Directors and of the senior executives with to preserve their independence. Annual salary raises are reflected to salaries management responsibilities by taking into of employees in the rates and in time periods consideration the degree of reaching the The Company does not give loans, allow deemed required by the employer upon criteria used in remuneration. credits, extend any payment terms for any approval of the Chairman of the Executive credits or loans formerly allowed or optimize Board. In addition, the Committee submits criticism conditions thereof, if any, or allow credits and performance evaluation on Board of under personal credits through a third All employees are allowed, in addition to Directors, and on senior executives who hold individual to or show guarantees including salaries, some auxiliary benefit packages in line positions on both the board and who have sureties to the benefit of a member of the with their positions. management responsibilities. Board of Directors or senior executive with management responsibilities. Senior executives and other personnel who C-Board of Directors engage in management may gain additional In accordance with provisions of Article 394 All fees paid and other benefits provided premiums or rewarding depending on their of the Turkish Commercial Code, members to the members of the Board of Directors performances. of the Board of Directors may be paid and senior executives with management attendance fee, wage, gratuity, premium and responsibilities (including salaries, gratuities, Meetings are organized with the personnel for dividend from annual profit providing the any other regular and occasional payments giving information and taking their opinions relevant amounts are defined by the Articles along with monetary, shares, derived products about various subjects including the financial of Association or by a resolution of the subject to shares, share purchase options status of the Company, remunerations, General Assembly. Those of the members given to the employee within share earning careers, training and health. of the Board of Directors who are charged plans, non-cash payments such as automobile also in operations are offered, along with the and housing of which possessions are given All staff is informed about their job attendance fee they receive due to being a and/or which are given temporarily given descriptions and distribution along with member of the Board of Directors, monthly for use only) are announced to the public performance and rewarding criteria. salaries and any relevant benefits for their through annual report. duties in the Company. 72 DYH 2013 ANNUAL REPORT Internal Audit and Control Effective controls to achieve SUSTAINABLE SUCCESS In 2013, DYH carried out its internal audit and internal control activities under the umbrella of the Presidency of Finance and the Vice Presidency of Audit of its parent company Doğan Şirketler Grubu Holding A.Ş. the Vice Presidency of Audit presented the implementations and its recommendations on audit/internal control techniques and the measures taken to the Audit Committee and the Board of Directors. Authorized bodies were informed about the internal audit/ internal control activities/measures, and the coordination of planning and executing activities of the audit units under the umbrella of DYH continued. Internal Audit and Control As a result of the growth in online services and development in technology, the importance of the information system processes increased in many functions of the companies. As a result, carrying out audit and supervision activities in the field of information systems and building the IT infrastructure that will provide supervision and alarm systems in the Group companies, are among the important targets of 2014. In addition, another target in 2014 is updating the work flow processes/internal control points and building an effective internal control system. Within the year, assurance services were provided through tasks carried out on the issues of protection of the Company assets, liquid assets reconciliations and tests, work flow processes and control/authorizationapproval mechanisms and advisory tasks were carried out through efficiency/economy projects. DYH 2013 ANNUAL REPORT 73 At a Glance Operations Sustainability Corporate Governance Dividend Distribution Financial Information Risk Management Risk Management Minimal risk ensures a sound future The risk management activities that, DYH carries out with the coordination of its parent company Doğan Şirketler Grubu Holding A.Ş. include monitoring and measuring fiscal, operational, compliance, and financial risks and making recommendations to the Group companies if necessary. The Doğan Holding Presidency of Finance monitors fiscal, compliance and operational risks while The Doğan Holding Vice Presidency of Finance and Fund Management monitors financial risks. Fiscal, Compliance and Operational Risk Management In collaboration with the top management of the Group companies, the Doğan Holding Presidency of Finance carries out tasks to identify and detect possible risks the Group companies can face and carries out the risk management activities in order to control and reduce the possible risks detected in this process. In addition, within the structure of DYH, Committee for Early Risk Detection and Management established in accordance with Article 378th of the Turkish Commercial Code n.6102 and the DYH Corporate Governance Committee authorized on this issue in accordance with the CMB Communiqué n.56, Series: IV, carry out activities under the Board of Directors on the issues of early diagnosis of the risks that may endanger the existence, development, and continuity of the Company, implementation of the necessary measures regarding the risks, risk management annual controls (at least once a year) on the risk management systems. Committees for early risk detection of the publicly traded Group companies, convene every two months in order to evaluate the risks of the companies. Evaluations made at these meetings are reported to the Board of Directors. Financial Risk Management Credit risk, market risk (FX risk, interest risk, Within the scope of fiscal, operational and price risk) and liquidity risk are within the compliance risks, tax commercial law and scope of financial risks that DYH can face due Capital Markets compliance risk management to its business activities. activities are also carried out under the Through financial risk management, DYH coordination of relevant divisions of the Dogan Holding Presidency of Finance, by the aims to minimize the negative impacts of the Audit and Risk Management Units and from financial market fluctuations on the financial time to time with the participation of audit results. and certified public accountant companies. Through the audit and control activities carried out in coordination, Group companies are continuously monitored against risks. 74 DYH 2013 ANNUAL REPORT With the aim of protection from various financial risks it faces, DYH utilizes a limited number of derivative product options such as maintaining a foreign exchange position within the structure of Doğan Şirketler Grubu Holding A.Ş. (considering the foreign exchange liabilities of the DYH companies) and taking a position in the relevant companies in parallel to the liabilities depending on the liquidity situation of these companies. As part of the general principles specified by DYH, all subsidiaries and joint ventures effectively implement financial risk management. Doğan Şirketler Grubu Holding A.Ş. activated the Central Treasury System application for monitoring financial risks and performing asset-liability management in 2011. With this system, a process started where daily market values can be calculated for all types of financial instruments (including options and futures). In 2012 and 2013, the system was improved after evaluating the required aspects. With the financial risk management system, FX and interest rate risks are calculated and reported daily according to the market yield curve. Comprehensive analysis of ECONOMIC AND FINANCIAL Risks Credit Risk Credit risk is the risk on the counterparties not meeting the obligations in the agreements DYH becomes a party to. Credit risk including, in particular, the receivables from advertising services, also consists of other receivables of DYH companies. DYH controls credit risk by creating central data with its own credit assessments made by its factoring company and by determining credit limits for the counterparties. In distributing credit risk, the considerable number of corporations constituting the customer base and their range of businesses in different fields play an important role. Interest Rate Risk DYH manages the interest rate risk by taking a “natural” measure of balancing its assets and liabilities sensitive to interest rates and by limiting the utilization of derivative instruments. Legal Risks There are no lawsuits filed against the Group companies that can hinder them from carrying out their activities or that can damage their financial structure. Legal disputes and lawsuits arising from the activities of the Group companies Liquidity Risk are performed by the lawyers working DYH manages liquidity risk by keeping an in a centralized system in the Legal Unit appropriate amount of cash and short term established under the structure of DYH’s deposits and liquid assets in order to meet parent company Doğan Şirketler Grubu short term payments, and by providing mid- Holding A.Ş. In this manner, it is ensured that term and long term funding with sufficient lawyers expert in various areas of law provide loan facilities for the investments and projects services for all subsidiaries. Moreover, through – evaluating the return on investment per the centralized legal system, advisory services period and capital-credit balance in the are given to Doğan Yayın Holding A.Ş. and its Receivables Risk projects. subsidiaries on the issues they need to resolve Group companies are subject to receivables – or outsourced of such services from expert risk due to their trade receivables arising Due to the dynamic nature of the business legal advisors is coordinated. from their credit sales. Group company environment, DYH aims for flexibility in management reduce the receivables risk funding by means of keeping the loan facilities Information Technology Risks regarding their receivables from customers by available. Purchasing, production, sales and accounting determining credit limits for each customer processes within the Group companies are separately and by getting guarantees if Foreign Exchange (FX) Risk carried out through the applications and necessary, and by selling products to its risky FX risk is the risk that occurs due to modules on the integrated information customers only in cash. converting the borrowings into the functional system (SAP) while the reports for these currency depending on the changes in the processes are also prepared on this system. The receivables risk of the Group companies exchange rates. These risks are monitored and is mainly based on their trade receivables. restricted through FX position analysis. DYH keeps abreast of the technological Company management evaluate the trade developments in all its areas of activity and receivables by taking previous experience and Capital Risk Management the needs of the Group companies on this current economic situation into consideration The Group aims to provide yield for issue. With the information technologies and thus set aside an appropriate amount of its partners and benefits for the other system used in all of the companies, provision for bad debts. shareholders when managing the capital sufficiency, effectiveness, accessibility, safety, while it aims to continue the Group activities and reliability of the services provided, are by maintaining the appropriate capital constantly monitored. Every year, making structure to decrease the cost of capital. sure that processes and activities regarding The Group may issue new shares in order to the Group companies need in information protect or restructure its capital and may sell technologies, are determined, DYH its assets to decrease its debts. makes necessary information technology investments as a result of this process. DYH 2013 ANNUAL REPORT 75 At a Glance Operations Sustainability Corporate Governance Dividend Distribution Financial Information Corporate Governance Principles Compliance Report Corporate Governance Principles Compliance Report 1. Corporate Governance Principles Compliance Statement In its Corporate Governance practices, our Company pays utmost attention to complying with the Capital Markets Legislation, Capital Markets Law and Capital Markets Board (“CMB”) regulations and decisions. The Corporate Governance practices of our Company are given Corporate Governance ratings by the international rating company “ISS Corporate Services Inc.” (ICS) that has a license in Turkey to make rating in conformity with the methodology approved by the CMB. Our Company is one of the first companies that have received a Corporate Governance rating in Turkey. Our Company’s, for the first time in 2006, Corporate Governance rating was “good” with 8.0 out of 10. Our Company was the first media company in the world, announcing its local Corporate Governance rating it has received from an internationally accepted rating company. Our Company was the first Stock Exchange Company rated by ICS in Turkey besides being the first Stock Exchange Company rated in Turkey other than the companies in the field of finance. Moreover, our Company is listed on the Corporate Governance Index (XKURY) (from the first day the XKURY Index started) of Borsa İstanbul A.Ş., (Borsa İstanbul). Corporate Governance Rating and Corporate Governance Compliance Reports are available on our website (www.dyh.com.tr). Our Company, paying utmost attention to complying with the Corporate Governance Principles obligated by the Capital Markets Law and CMB regulations and decisions in the activity period that ended on the 31st of December 2013; anticipates, under these circumstances, no significant conflicts of interest on the non-compliance issues that are left outside these principles. Yahya Üzdiyen Executive Member of the Board of Directors and President of the Executive Board 76 DYH 2013 ANNUAL REPORT Yaşar Begümhan Doğan Faralyalı Chairwoman of the Board of Directors SECTION I - SHAREHOLDERS 2. Shareholder Relations Unit 2.1. In using the shareholder rights, the legislation, the Articles of Association and other internal regulations are applicable and any type of measures are taken for ensuring the use of these rights. 2.1.1. The “Shareholder Relations Unit” was established in order to monitor all the relations between shareholders and the Company in compliance with the Capital Markets Law, the CMB regulations/decisions and to ensure that the requirements regarding the shareholders’ right to information are completely met. It carries out the activities in compliance with the Capital Markets Law, the CMB regulations/ decisions and the Articles of Association. 2.1.2. The staff of investor relations, legal affairs and financial affairs report to “Shareholder Relations Unit”. Our Company’s Investor Relations Director, Ms. Banu Çamlıtepe, is in charge of the management of the unit. Her contact information is given below. Name Banu Çamlıtepe Title Phone E-mail Director Investor Relations (216) 556 9000 [email protected] All our share certificates are dematerialized in the Central Dematerialized System under Central Registry Agency. 2.1.3. Utmost attention is paid to be in consistent with the relevant legislation and the Articles of Association while meeting the requests of our shareholders. In 2013, our Company did not receive any written or verbal complaints regarding the use of the shareholder rights or within our knowledge there aren’t any administrative/legal proceedings filed against our Company on this issue. 2.1.4. In 2013, information requests of the investors and shareholders were replied in compliance with the Capital Markets Legislation and CMB regulations/decisions, related information and documents, except the ones having the characteristics of confidential information and trade secret, were provided to the investors and shareholders considering the equality principle. 3. Exercise of Shareholders’ Right of Access to Information 3.1. DYH does not discriminate among shareholders on the issue of exercise of shareholders’ right of access to and examination of information. 3.1.1. For the shareholder rights to be used in a healthy manner, all information and documents are presented to the use of the shareholders equally, in both English and Turkish via our Company’s corporate website at www.dyh.com.tr. 3.1.2. In 2013, in order to give prompt response to the verbal and written information requests of the shareholders in compliance with the Capital Markets Legislation, Capital Markets Law and CMB regulations and decisions, the best effort was shown under the supervision of the “Shareholder Relations Unit”. 3.1.3. The request for the assignment of a private auditor has not been yet regulated as an individual right in our Articles of Association. However, in the upcoming periods, depending on the amendments in the relevant legislation, this right may be included in our Articles of Association. On the other hand, there was no “private auditor” assignment in our Company within the period. 3.2. In order to ensure our shareholders to exercise of their rights of access to information, any type of information that may influence the use of these rights is presented to the examination of the shareholders on our website up-to-date. 4. General Assembly Meetings 4.1. The Company does not have any registered shares. DYH 2013 ANNUAL REPORT 77 At a Glance Operations Sustainability Corporate Governance Dividend Distribution Financial Information Corporate Governance Principles Compliance Report Corporate Governance Principles Compliance Report 4.2. In accordance with our Articles of Association, “information document” regarding the agenda items is prepared and publicly disclosed prior to the general assembly meeting. 4.2.1. The announcements of General Assembly meeting are made at least three weeks prior to the meeting in line with the amendment made to our Articles of Association and with the procedures stipulated in the legislation in a manner that enable reaching as many shareholders as possible via our Website (www.dyh.com.tr). 4.2.2. The Turkish Commercial Code, the Capital Markets Law, the CMB regulations/decisions and the Articles of Association are complied with in all public announcements and notifications. 4.2.3. All financial reports and statements including the annual report, dividend distribution proposal, “information document” prepared regarding the General Assembly agenda items and other documents that form the basis for the agenda items, the latest version of the Articles of Association and if the Articles of Association will be amended the amendment text and its justifications are available for our shareholders’ review at the locations, including the Company headquarters and electronic platforms, where they can be reached easily. 4.2.4. In the previous accounting period, no important change was made on the Company’s management and activity organization. If such change is made, it will be announced to the public within the provisions of the legislation. 4.2.5. In the Company’s website, apart from the notifications and disclosures that the Company must made according to the legislation, together with the General Assembly meeting announcements, other notifications and disclosures that must be made in accordance with the Capital Markets Law, the Capital Markets Board regulations and other legislative provision in force, are also available. 4.2.6. Before the General Assembly meetings, sample proxy forms are announced for the shareholders who will be represented by their proxies and are available on the Company’s website for shareholders use. 4.2.7. Voting procedure is presented via website for the information of the shareholders before the meeting. 4.2.8. In 2013, our Company did not receive any request from the shareholders for adding a new item on the agenda. 4.3. Convening procedure of the General Assembly ensures highest level of shareholder attendance. 4.3.1. Our General Assembly meetings are held in a manner that does not create any inequality among the shareholders, and with lowest cost possible and in the simplest procedure. 4.3.2. Our General Assembly meetings are held at the Company headquarters. Our Articles of Association gives the opportunity to hold the meetings at another location in the city where the Company headquarters is. If in the future the requests are received in this direction, they will be evaluated. The executive members of the Board of Directors, at least one member of the Board of Directors and an Auditor from the Independent Audit Company must participate the General Assembly meetings; moreover, the persons who have responsibilities regarding the issues on the agenda and who must make explanations should participate in the meetings. If the persons, except the ones who must participate in the meetings according to the laws, are not present, reasons for not attending the meeting are submitted for the information of the General Assembly by the meeting chairman. 4.3.3. Shareholders can attend the General Assembly meetings in compliance with the Turkish Commercial Code, the Capital Markets Law, the regulations of the Capital Markets Board and the Central Registry Agency and the other relevant legislation in force. For the shareholder and/or the proxy who did not receive the entrance document in accordance with the relevant legislation, it is not possible to speak and/or cast vote by attending the meeting. 78 DYH 2013 ANNUAL REPORT 4.3.4. The place where our General Assembly meetings are held, with its features, enables the shareholders to participate in the meetings. Through the amendments made to the Articles of Association and ensuring compliance with the regulations of the Turkish Commercial Code of, the General Assembly meeting was held in an electronic platform. The entitled persons who have the right to attend the Company’s General Assembly meetings can also attend these meetings via electronic platform as per the 1527th Article of the Turkish Commercial Code. The Company, may decide to install the Electronic General Assembly System (EGAS) or to purchase services from the systems developed for this purpose, to ensure that the entitled persons attend the General Assembly meetings in electronic platform, make suggestions, and cast their votes within the framework of the legislation in force. In all General Assembly meetings that will be held, the Company ensures that the entitled persons and their representatives use their rights on the installed system in accordance with this provision of the Articles of Association. Our Company complies with the CMB’s Decision n. 4/89, dated 01.02.2013 on this issue. 4.3.5. Unless otherwise decided by the General Assembly, meetings are held in a manner open to the related persons and media. However, for the shareholder and/or the proxy who did not receive the entrance document in accordance with the relevant legislation, it is not possible to speak and/or cast vote by attending the meeting. Our shareholders, some of the members of the Board of Directors, our Company’s employees and the independent audit company were attended our Ordinary General Assembly meeting relating to 2012 accounting period, however, other stakeholders and media did not attend. 4.4. In the General Assembly meeting, the agenda items are presented in an objective, clear and comprehensible manner and in details; the opportunity is given to the shareholders in order to express their opinions and ask their questions under equal circumstances and thus healthy discussion environment is created. 4.4.1. In General Assembly meetings, each share has one voting right. In the General Assembly meeting where there is physical attendance, rasing hand method is used. On the other hand, it is mandatory to use “secret ballot” voting method upon the request of the 1/20 of the shareholders represented in the meeting. 4.4.2. In all General Assembly meetings of the Company, the provisions of the Capital Markets Law and Turkish Commercial Code are complied with respectively, regarding meeting and decision quorums. 4.4.3. In case usufruct right and disposition right of a share belong to different persons, these persons can be represented in a manner that they find appropriate by having an agreement between themselves. If they fail to reach an agreement, then the holder of the usufruct right uses the right to attend the General Assembly meeting and to cast vote. General Assembly meeting minutes, including the ones related to the past years, are available on our Website (www.dyh.com.tr). 4.4.4. It was seen that in the past years corporate investors generally participated in the General Assembly meetings by proxies. In 2013, two General Assembly meetings were held. In the Ordinary General Assembly meeting which was held on the 21st of June 2013 in order to discuss the 2012 activities, 1,583,722,469.705 shares (79.19%) were represented out of 2,000,000,000 shares representing the capital of our Company. During the meeting, no suggestion or question was received on the agenda items from the shareholders who attended the meeting in person or by proxy. 4.4.5. On the other hand, in the Extraordinary General Assembly meeting which was held on the 21st of October 2013 in order to discuss the Articles of Association amendments, 1,590,628,249.681 shares (79.53%) were represented out of 2,000,000,000 shares representing the capital of our Company. Moreover, without voting and resolving, our shareholders were informed about increasing the issued capital of the Company to TL 2,428,550,000 all paid in cash, with our Board of Directors’ decision n.2013/23 taken on the 28th of August 2013. During the meeting, no suggestion or question was received on the agenda items from the shareholders who attended the meeting in person or by proxy. The Board of Directors prepares an internal directive including the rules regarding the working principles and procedures of the General Assembly, in compliance with the relevant provisions of the Turkish Commercial Code and with the regulations and communiqués issued within the framework of this Law and then submits for the approval of the General Assembly. The internal directive after being approved by the General Assembly is registered and announced in the Trade Registry. DYH 2013 ANNUAL REPORT 79 At a Glance Operations Sustainability Corporate Governance Dividend Distribution Financial Information Corporate Governance Principles Compliance Report Corporate Governance Principles Compliance Report 4.5. According to the 18th Article of the Company’s Articles of Association; the upper limit of the aids and donations that will be made by the Company in one accounting period is determined by the General Assembly within the framework of the principles specified in the 3/j Article of the Articles of Association. The Company cannot make donations at amounts exceeding the upper limit determined by the General Assembly. The amount of the donations is added on the “distributable profit” base. It is mandatory that; the donations of the Company are not against the Capital Markets Law regulations on concealed gain transfers, the Turkish Commercial Code and the other relevant legislation, the necessary public disclosures are made and the donations that are made within the year are submitted for the information of the shareholders in the General Assembly. 4.6. The donation amount of TL 5,000 made to the foundations, associations, public institutions and organizations by the Company in 2012 was submitted for the information of the shareholders in the Ordinary General Assembly meeting which was held on the 21st of June 2013 at the Company headquarters. 5. Voting Rights and Minority Rights 5.1. The Company avoids practices that make it difficult to exercise voting rights. All shareholders are given the opportunity to exercise their voting rights in the easiest and most convenient manner. 5.2. There are no preferred shares or different classes of shares in the Company. 5.3. Each share have one voting right. 5.4. There is no Company regulation that restricts the exercise of shareholders’ voting rights for a certain period of time following the acquisition date of their shares. 5.5. The Articles of Association do not contain any provision that prevents non-shareholders from voting as proxy as a representative of a shareholder. 5.6. According to the Articles of Association, if the beneficial owner differs from the owner of the right to dispose of a share, these parties can agree among themselves and have themselves represented as they see fit. Should they fail to reach an agreement, the right to attend the General Assembly meetings and vote shall be exercised by the beneficial owner. 5.7. Since the share capital of the Company does not involve any cross-shareholdings, no such votes were cast at the General Assembly. 5.8. Minority rights are granted to shareholders collectively holding one-twentieth (5%) of the share capital. 5.8.1. The Company takes the utmost care to ensure the exercise of minority rights. In 2013, our Company did not receive any comments or complaints from our minority shareholders. 5.9. The Articles of Association do not provide for cumulative voting. The advantages and disadvantages of this method are being assessed within the framework of legislative developments. 6. Dividend Right Our Company determines its dividend distribution decisions by taking into account the Turkish Commercial Code, the Capital Markets Legislation, the Capital Markets Law, the Capital Markets Board (CMB) regulations and decisions, the Tax Laws, the provisions of other relevant legal legislations, the Articles of Association and the Dividend Distribution Policy. 6.1. Our Company and our subsidiaries whose shares are traded on Borsa İstanbul (BİST), submitted their dividend distribution policies for the information of their General Assemblies and publicly disclosed them in compliance with the Capital Markets Legislation and the CMB regulations and decisions. 80 DYH 2013 ANNUAL REPORT 6.2. The distribution of profit is enacted within the deadline indicated by the Capital Markets Law and CMB regulations, as quickly as possible following the General Assembly meeting. 6.2.1. Since there was no distributable period profit according to the dividend distribution statement prepared in compliance with the CMB regulations/ decisions for the accounting period of 01.01.2012 - 31.12.2012, it was decided not to distribute dividend to our shareholders relating to the 2012 accounting period, at the Ordinary General Assembly meeting held on the 21st of June 2013. 6.3. According to our Company’s Articles of Association: provided that it is authorized by the General Assembly, the Board of Directors can distribute “advance dividend” in compliance with the Capital Markets Legislation, the Capital Markets Law, the CMB regulations and decisions. The authorization given to the Board of Directors by the General Assembly for the distribution of “advance dividend” is limited with the year that the authorization is given. Unless the previous year’s advance dividends are fully set off, no decision can be taken on distributing additional advance dividend and/or dividend. 6.4. The principles regarding our Dividend Distribution Policy are given below: Our Company makes dividend distribution decisions, and distributes dividend, in line with the Turkish Commercial Code; the Capital Markets Legislation; Capital Markets Law (CML), Capital Markets Board (CMB) Regulations and Decisions; Tax Laws; provisions of other relevant legislation; and our Articles of Association, and the Resolution of the General Assembly. Accordingly: 1- As a principle, at least 50% of the “net distributable profit” calculated as per the Capital Markets Legislation, CMB, CMB Regulations and Resolutions can be distributed, taking into account the financial statements prepared in compliance with the Capital Markets Legislation, CMB, CMB Regulations and Decisions. 2- In case it is contemplated to distribute dividend between 50% and 100% of the “net distributable profit” calculated; the financial statements, financial structure, and the budget of our Company are taken into consideration when determining the dividend distribution percentage. 3- The dividend distribution proposal is made public as per the Capital Markets Legislation, CMB, and the CMB Regulations and Decisions taking into account the legal deadlines. 4- In case the amount is a. lower than the amount calculated as per Article 1, of the “net distributable profit” that is calculated in line with the legal records kept within the scope of the Turkish Commercial Code, and the Tax Laws; the “net distributable profit” calculated as per the legal records kept within the scope of this article hereby is taken into account, and it is distributed entirely, b. higher than the amount mentioned above, action is taken as per Article 2. 5- In case there is no net distributable profit as per the legal records kept within the scope of the Turkish Commercial Code and Tax Laws, no dividend distribution can be made a “net distributable profit” has been calculated according to the financial statements prepared as per the Capital Markets Legislation, CMB, CMB Regulations and Decisions, and in compliance with again the Capital Markets Legislation, CMB, the CMB Regulations and Resolutions. 6- In case the calculated “net distributable profit” is below 5% of the issued capital, this may lead to the dividend distribution not being made. 7- The upper limit of the aids and donations that will be made by our Company within an accounting term in compliance with the Capital Markets Legislation, CMB, the CMB Regulations and Decisions, and as per the principles set forth in our Articles of Association shall be determined by the General Assembly. No donations may be made in amounts exceeding the limit set forth by the General Assembly, and the donations made shall be added to the “net distributable profit” tax base. DYH 2013 ANNUAL REPORT 81 At a Glance Operations Sustainability Corporate Governance Dividend Distribution Financial Information Corporate Governance Principles Compliance Report Corporate Governance Principles Compliance Report 8- The dividend distribution shall start latest by the 30th day following the general assembly meeting where the distribution resolutions were made, and in any case, as of the end of the accounting term. 9- In line with the Capital Markets Legislation; CMB, CMB Regulations and Decisions, and the provisions of the Articles of Association, and as per the Resolution of the General Assembly, our Company may distribute the dividend share in cash and/or upfront as “free shares”, or may distribute in instalments. 10- Our Company may also distribute dividends to other persons who are not shareholders in line with the resolutions to be made by the General Assembly. In that case action shall be taken in compliance with the Turkish Commercial Code; Capital Markets Legislation; CMB, CMB Regulations and Decisions, and the provisions of the Articles of Association. 11- Our Company may decide to distribute, and may distribute, dividend advance, in line with the Turkish Commercial Code; Capital Markets Legislation; CMB, CMB Regulations and Decisions; Tax Laws; the provisions of the other legislation, the Articles of Association, and the General Assembly Resolution. 12- Investments requiring significant amounts of cash outflows for increasing our Company value, significant issues affecting our financial structure; important uncertainties and adversities outside the control of our Company arising in economy, in the markets, or other areas shall be taken into account in making dividend distribution decisions. 6.5. Our Company’s “Dividend Distribution Policy” is included in the annual report and publicly disclosed via our website (www.dyh.com.tr). 7. Transfer of Shares The Articles of Association do not contain any provisions that make it difficult for the shareholders to freely transfer their shares. SECTION II - PUBLIC DISCLOSURE AND TRANSPARENCY 8. Disclosure Policy 8.1. A “Disclosure Policy” concerning the Company’s public announcementsis publicly disclosed via our website (www.dyh.com.tr). 8.2. The “Disclosure Policy” was approved by the Board of Directors and submitted for the information of the shareholders at the General Assembly. The Board of Directors is responsible for pursuing, reviewing and improving the Information Policy. The Corporate Governance Committee provides information and makes suggestions on the issues regarding “Disclosure Policy”. 8.3. The Shareholder Relations Unit is assigned in order to supervise and monitor any type of issues regarding public disclosure. Depending on the content of the question, external questions are replied by the Chairman of the Board of Directors, the Chairman of the Executive Board/CEO, the CFO or within the scope of their knowledge and limits of authorization by the “Investor Relations Director”. In responding questions, special attention is paid to ensure equal opportunity among the stakeholders. 8.4. While making public disclosures, except the ones determined by the legislation, data distribution companies, written and visual media and our website are effectively used. 8.5. Principles governing the disclosure of information on future prospects are defined in the Company’s Disclosure Policy. In public announcements, information on future prospects is disclosed together with the justifications and the statistical data underlying the forecasts and is associated with the Company’s financial position and operational results. At our Company, these disclosures can only be made by the Chairman of the Board of Directors, the Chairman of the Executive Board/CEO and the CFO. 82 DYH 2013 ANNUAL REPORT 8.6. “Individuals with Administrative Responsibility” defined within the scope of the Capital Markets Legislation, and individuals in close contact with them, publicly disclose the transactions that they make on the capital market instruments of the Company in compliance with the Capital Markets Legislation. 8.6.1. Since all public disclosures we made are available on our website, if any, the public disclosures that are made within aforementioned scope will also be automatically available on our website. 8.6.2. There are not any derivative instruments based on our Company’s shares. 8.7. Our financial statements and their footnotes are; prepared on consolidated basis in compliance with the Turkish Accounting Standards and the Turkish Financial Reporting Standards (“TAS” and “TFRS”) published by the Public Oversight, Accounting and Auditing Standards Authority within the scope of the Communiqué (Serial: II, No: 14.1) of the Capital Markets Board (“CMB”), reported in accordance with the presentation principles that were determined with the decision (dated 07.06.2013, No: 20/670) of CMB and announced in the weekly CMB Bulletin (dated 07.06.2013, No: 2013/19), independently audited in conformity with the Turkish Auditing Standards (“TDS”) and, publicly disclosed. 9. Company Website and its Contents 9.1. The Company’s website at www.dyh.com.tr, is actively used for public disclosures, in compliance with the Turkish Commercial Code, the Capital Markets Legislation, the Capital Markets Law and the CMB regulations and decisions. 9.1.1. Our Company website was created both in Turkish and in English with the content and in a manner stipulated by the Turkish Commercial Code, the Capital Markets Legislation, the Capital Markets Law and the CMB regulations and decisions. 9.1.2. We continue to perform our tasks for providing better service via our website. 9.1.3. Our Company’s letterhead clearly indicates the address of its website. 9.1.4. The principles regarding the management of our website are specified in the “Disclosure Policy” . 10. Annual Report Our Company’s 2012 Annual Report, and 2013 Quarterly Interim Activity reports were prepared in compliance with the Turkish Commercial Code, the Capital Markets Legislation, the Capital Markets Law and the CMB regulations and decisions. SECTION III - STAKEHOLDERS Since our Company is a holding company, it is not directly engaged in media activities. Thus, our shareholders and investors take the priority among our stakeholders. Due to the fact that our Company carries out activities in media sector and the advertisement revenue is an important revenue item among our revenues, the advertisers are our other important stakeholders. Advertisement policies and their implementations are established within the own structure of our subsidiaries. Our Company actively participates in and supports the activities of non-profit organizations that operate in the advertising and media sector. On the other hand, due to the importance of the human resources in media sector, in our Company, human resources management is represented at the top level, and human resources policies are carried out at macro level. On the other hand, general policies regarding our readers, viewers and listeners in printing and in broadcasting, are carried out in coordination with our Group companies. DYH 2013 ANNUAL REPORT 83 At a Glance Operations Sustainability Corporate Governance Dividend Distribution Financial Information Corporate Governance Principles Compliance Report Corporate Governance Principles Compliance Report 11. Informing Stakeholders As explained in detail at the first part of the report, shareholders and investors are informed in line with the Capital Markets Legislation, the Capital Markets Law and the CMB regulations and decisions, and through the methods determined. Our Company management is supported on the issue of joining the various non-profit organizations established by our stakeholders. Together with the advertisers who advertise these types of activities, effective participation is ensured in order to understand their needs, to provide the sector with sustainable growth and financial strength. In case of any company transactions in violation of the legislation or Code of Ethics, the stakeholders can contact the members of the Corporate Governance Committee or Audit Committee, or individuals authorized to provide information by the Company’s Disclosure Policy, via e-mail. 12. Stakeholder Participation in Management The Company is in constant contact with the stakeholders listed above. All feedback received from the stakeholders is presented to senior management for evaluation after various procedures and solution proposals and policies are developed. There is no regulation in the Articles of Association that stipulates the participation of the stakeholders in the company management. The employees are informed about the Company’s general activities and practices and they provide their suggestions via the Company’s intranet site. 13. Human Resources Policy 13.1. Our Company has a written “human resources policy”. Within the scope of this policy, the Company takes as a basis to recruit the persons who have outstanding know-how and talent; who can easily adapt to corporate culture; who have advanced business ethics, who are honest, consistent; who are open to the changes and developments; who can integrate the future of the corporation that he/she works for, with his/her own future. 13.2. In accordance with its human resources policy, the Company offers equal opportunity to people with the same qualifications in recruitment and career planning. 13.2.1. Recruitment criteria are set down in writing and are followed in practice. 13.2.2. Employees are treated equally on the issues of training and promoting. It is ensured that the employees participate in the education programs for increasing their knowledge, skills and courtesy. 13.3. Employee-related decisions and/or developments that concern the employees are shared in an electronic environment via “Intranet” created with the purpose of increasing the communication among the employees. 13.4. DYH’s efforts with regard to defining job descriptions and allocations for the employees, as well as determining the criteria for their performance evaluation and recognition is continuously updated to meet the demands of changing circumstances. 13.5. The Company’s work environment is designed to maximize safety and productivity. 13.6. Relations with employees are carried out by the Human Resources Department. There are no unionized employees at the Company. 13.7. The Company does not discriminate among its employees and treats all employees equally. Neither the management nor the Company’s Board Committees have received any complaints in this regard. 84 DYH 2013 ANNUAL REPORT 14. Code of Ethics and Social Responsibility The Company’s Code of Ethics has been disclosed to the public via the corporate website. The said Code of Ethics are continuously reviewed and updated to meet current conditions. Doğan Yayın Group is a leading media company that provides special news, contents and services at global level, in any subject, 24 hours a day, 7 days a week, in all forms and in many different languages; that determines the agenda and enters into a dialogue with its readers and viewers and adds value to their lives. Our “Shared Values” are the most important common assets of the publisher and the employees, and they form the basis for our publishing and broadcasting principles. At the same time, our shared values form the basis of the agreement between us and our readers, viewers and listeners. We promise our viewers, readers and listeners creative and always respectful broadcasting and publishing at the best quality possible, in conformity with the principles of professional ethics, breaking with tradition and upsetting the status from time to time. Accordingly, for our business areas both in printing and broadcasting, separately specified principles as “publishing principles” and “broadcasting principles” are available on our corporate website. Thanks to its corporate structure and employees with highly developed social awareness, the Company undertakes social responsibility projects utilizing the common synergy of the companies within its corporate structure. Our Company, together with all subsidiaries within its structure, creates or supports projects - with a special emphasis on educational projects - that draw attention to social problems and that will have contribution on the social development of the society. The activities geared toward the educational, social and cultural development of Turkey are conducted both under the Company, its subsidiaries and through the Aydın Doğan Foundation. The Foundation focuses its activities on facilitating development and improvement in education, public health, scientific research, sports, arts and the economy. The Foundation also extends efforts to support media-related activities, encourage technological developments and expand the scope of cultural and social progress. Apart from the activities that are carried out directly within the corporate structure, our Company also supports the projects regarding social awareness and social mission that are conducted by the various institutions and organizations, through its media channels and undertakes mission of helping hundreds of projects every year to achieve the prominence they deserve. SECTION IV - BOARD OF DIRECTORS 15. Structure and Formation of the Board of Directors 15.1. The Company complies with the Turkish Commercial Code, the Capital Markets Legislation, the Capital Markets Law and the CMB regulations and decisions while forming and electing the Board of Directors. The principles regarding this issue are also included in the Articles of Association. In this context ; 15.1.1. The Company is managed and represented by a Board of Directors composed of at least six and at most 12 members elected by the General Assembly. 15.1.2. According to the ratio or number determined by the CMB, the members of the Board of Directors are elected from among the candidates who possess the qualifications to be an independent member. The Company complies with the Capital Markets Law, the Capital Markets Board Regulations and the other relevant legislative provisions that are in force, while determining the independent board member candidates, nominating them, determining the number and qualifications of them, and in their election, dismissal and/or resignation. 15.1.3. The majority of the members of the Board of Directors are non-executive members. DYH 2013 ANNUAL REPORT 85 At a Glance Operations Sustainability Corporate Governance Dividend Distribution Financial Information Corporate Governance Principles Compliance Report Corporate Governance Principles Compliance Report 15.2. The names, surnames, qualifications and résumé of the members of the Board of Directors are given below: Name/Surname Duty Yaşar Begümhan Doğan Faralyalı Soner Gedik Chairwoman of the Board of Directors (Non-Executive) (**) Vice Chairman of the Board of Directors (Non-Executive) Yahya Üzdiyen Executive Member of the Board of Directors (Executive) Ahmet Toksoy Member of the Board of Directors/CFO (Executive) Ertuğrul Feyzi Tuncer Member of the Board of Directors (Independent Member) Hacı Ahmet Kılıçoğlu Member of the Board of Directors (Independent Member) Mehmet Ali Yalçındağ, was not re-elected to his Board of Directors membership position at the Ordinary General Assembly meeting held on the 21st of June 2013. Soner Gedik resigned from his position as a member of the Executive Board on the 15th of August 2013. (*) (**) Yaşar Begümhan Doğan Faralyalı Born in Istanbul in 1976, Begümhan Doğan Faralyalı received her BSc in Economics and Philosophy at the London School of Economics in 1998. She began her professional career as a consultant at the NY Office of Arthur Andersen, and then moved to the London office of Monitor Group, where she worked as a consultant for restructuring projects involving some of the most advanced European media, technology and FMCG companies. After earning her MBA degree at Stanford University in 2004, she took office at Doğan Yayın Holding (DYH) as an Executive Committee Member and Vice President for Overseas Investments. There, in charge of the international growth of DYH, she focused on investment opportunities mainly in Europe, including Eastern Europe and Russia. In 2007, Ms. Faralyalı led the startup process of Kanal D Romania, a general entertainment TV channel, the first foreign investment of DYH, and forged its partnership with the Ringier Group. In two years, the channel managed to rank third overall in total day viewership. At the same time, she worked on the purchase of Trader Media East, traded on the London Stock Exchange, by Hürriyet. Begümhan Doğan Faralyalı played an active role in this project constituting the largest international acquisition by DYH. After gaining 15 years of overseas experience, she moved back to Turkey in 2009 and became CEO of Star TV. In 2010, she assumed the Presidency of Doğan TV Holding, which also included TV channels Kanal D and CNN Türk. Ms. Faralyalı is still the Chairwoman of Kanal D Romania. Additionaly as of 1st January 2012, Begümhan Doğan Faralyalı became Chairwoman of Doğan Holding. She is married with two children. Soner Gedik Born in Eskisehir in 1958, Soner Gedik received his BA in Economics and Public Finance from Ankara University. After completing an entrance examination, he joined the Ministry of Finance as Assistant Auditor in 1981 and was promoted to Auditor in 1985 with the top score in his class. Gedik was a public servant for six years, auditing leading private and public companies and honing his skills and expertise in finance. He later joined the Finance Division of Hürriyet Holding A.Ş. to serve as a financial consultant to the President of the Executive Committee of the Group. He was promoted Vice President of the Executive Committee in 1989 and subsequently served on the Board and as General Manager of Hürriyet Holding. In 1998, he played a crucial role in the foundation of Doğan Yayın Holding and assumed the duties of CFO and Vice President. At present, Gedik is currently Board member of Doğan Şirketler Grubu Holding A.Ş. and Doğan Yayın Holding A.Ş. Gedik is married and has four children. 86 DYH 2013 ANNUAL REPORT Yahya Üzdiyen Born in 1957, Yahya Üzdiyen graduated from the Department of Business Administration at Middle East Technical University in 1980. Between 1980 and 1996, he worked as a foreign trade and investment specialist and manager in several privately owned companies in Turkey and abroad. Between 1997 and 2011 he assumed the position of Strategy Group President at Doğan Holding and became Vice Chairperson on January 18, 2011. During this period, he played an important role in the acquisition, partnership and sale of Group companies, such as Petrol Ofisi, Ray Sigorta and Star TV. Presently acting as Board Member in many Group companies, Üzdiyen has served as Doğan Holding’s CEO since January 24, 2012. Üzdiyen is married with two children. Ahmet Toksoy Born in Istanbul in 1959, Ahmet Toksoy received his BA from the Department of Finance, Faculty of Management, of Istanbul University in 1981. After working as an auditor at the Ministry of Finance between 1984 and 1989, he joined Hürriyet Holding as a member of the Audit Committee. He was appointed Assistant Finance Manager of Hürriyet Newspaper between 1990 and 1991 and as Finance Manager between 1991 and 1995. Toksoy worked as Certified Public Accountant at Aktif Denetim Yeminli Mali Müşavirlik for three years. After serving as Financial Affairs Group President for many years at Hürriyet newspaper, he was appointed as the President of Audit and Risk Management at Doğan Holding. He is currently on the Board of Doğan Yayın Holding, Doğan Gazetecilik, Çelik Halat, Ditaş, Milta and several Group companies and also serves as CFO of Doğan Şirketler Grubu Holding A.Ş. since September 2011. Ertuğrul Feyzi Tuncer Ertuğrul Feyzi Tuncer was born in 1939. He received his BA in Business Administration and Economics from Robert College in 1964. Later, he obtained an “Executive Management” certificate from Stanford University. He started his professional career in 1967, as Regional Director and Director of Investments at Mobil Oil Türk A.Ş. and eventually became General Manager in 1990. In 1994, he served as Chairman at ATAŞ Anatolian Refinery, and then became General Manager of BP Mobil Turkey Joint Venture. In 2000, he resigned from both of these positions to continue his career as General Manager and Board Member at Petrol Ofisi A.Ş. In 2005, he became Board Member at Doğan Holding. In 2006, at Tuncer Consulting Services and Trade, he became the founder and partnership manager of CASE Consulting Energy. Ertuğrul Tuncer has served as the founder Chairman of PETDER (Association of Petrol Industrialists) and is a member of the Association of Corporate Risk Management and High council Board of Fenerbahçe Sports Club. DYH 2013 ANNUAL REPORT 87 At a Glance Operations Sustainability Corporate Governance Dividend Distribution Financial Information Corporate Governance Principles Compliance Report Corporate Governance Principles Compliance Report Hacı Ahmet Kılıçoğlu Kılıçoğlu, born in 1956 in Tirebolu, after graduating from TED Ankara Koleji, received his bachelor’s degree in 1977 and master’s degree in 1978 in Economics from University of Essex in England and starting from 1979, he worked in various positions in Ministry of Industry, Türkiye İş Bankası, United Nations Development Programme (UNDP) and F-16 plane project. Kılıçoğlu, started working for Türk Eximbank in 1987 and worked as a General Manager in this foundation between 1998 -2010. During this period, Kılıçoğlu has also been the member of the Board of Directors in Banks Association and was elected as the Chairman of the Berne Union in 2001. Afterwards, he worked as the consultant in İslam Kalkınma Bankası (Islamic Development Bank) and as the Vice Chairman of the Board of Directors in Denizbank. Kılıçoğlu is still carrying out his duties as the Vice Chairman in Turkish Education Association and the Member of the Board of Directors in Vestel A.Ş., Şeker Mortgage Finansman A.Ş. and Şeker Kıbrıs Ltd. Kılıçoğlu is married and has one child. 15.3. Every year, Board members are elected by the General Assembly for a maximum of three years. Unless the term of office is clearly indicated in the General Assembly’s relevant decision, the term of office is assumed to be one year. Board members were elected at the Ordinary General Assembly dated June 21, 2013 to serve until the Ordinary General Assembly for the accounts and activities of 2013. 15.4. There are two independent members on the Board of Directors. In line with CMB’s regulations and resolutions, independent members constitute one-third of the Board. The Chairperson and CEO are not the same individual. 15.5. No more than one-half of the Board of Directors have executive responsibilities. 15.6. The Company does not impose any rules or restrictions on its Board members for assuming additional duties outside of the Company. Since the Company is a holding company and representation in the management of its subsidiaries is in the best interest of the Company and thus its partners, the Company does not prohibit its Board members from assuming duties in the management of its affiliates and subsidiaries. The practices in this respect are continuously reviewed according to changing conditions. Some of our Board members also sit on the Boards of Group companies, since the Company is a holding company. The duties of the Board members outside of the Company are indicated below: Name/Surname Yaşar Begümhan Doğan Faralyalı Soner Gedik Duties Outside the Company Board of Directors Chairmanship in Group Companies Board of Directors Chairmanship and Membership, Executive Board Membership in Group Companies Yahya Üzdiyen Board of Directors Chairmanships, Vice Chairmanships, Memberships, Executive Board Chairmanship, Corporate Governance Committee Memberships in Group Companies Ahmet Toksoy Board of Directors Chairmanships, Vice Chairmanships, Memberships, Executive Board Membership, Corporate Governance Committee Memberships in Group Companies Ertuğrul Feyzi Tuncer Independent Board Membership. Committee for Early Risk Detection Chairmanship Hacı Ahmet Kılıçoğlu None 15.7. The Company asks for written declaration from the independent board members to prove that they satisfy the independence criteria set forth in the CMB regulations and resolutions. As of the date of this report, there exists no circumstance that would compromise the independent status of the Company’s independent board members. The applications and statements of independence of two candidate Independent Board members were evaluated by the Board of Directors and subsequently disclosed to the public on May 29, 2013. 88 DYH 2013 ANNUAL REPORT Independence statements of the independent members of the Board of Directors are given below: 29th of May 2013 STATEMENT OF INDEPENDENCE To the Chairmanship of the Board of Directors of Doğan Yayın Holding A.Ş., As a member of the Board of Directors of Doğan Yayın Holding A.Ş., I declare that: I do have the qualifications of an “Independent Board Member” stipulated in the Capital Markets Law, Capital Markets Board Communiqué, principle decision and other regulations and the Articles of Association of your Company; and I will immediately inform your Chairmanship of the Board of Directors right after learning that these qualifications of independence are no longer valid and I will act in accordance with your Board’s decision and thus will resign if deemed necessary. Best regards, Ertuğrul Feyzi TUNCER 30th of May 2013 STATEMENT OF INDEPENDENCE To the Chairmanship of the Board of Directors of Doğan Yayın Holding A.Ş., As a member of the Board of Directors of Doğan Yayın Holding A.Ş., I declare that: I do have the qualifications of an “Independent Board Member” stipulated in the Capital Markets Law, Capital Markets Board Communiqué, principle decision and other regulations and the Articles of Association of your Company; and I will immediately inform your Chairmanship of the Board of Directors right after learning that these qualifications of independence are no longer valid and I will act in accordance with your Board’s decision and thus will resign if deemed necessary. Best regards, H. Ahmet KILIÇOĞLU DYH 2013 ANNUAL REPORT 89 At a Glance Operations Sustainability Corporate Governance Dividend Distribution Financial Information Corporate Governance Principles Compliance Report Corporate Governance Principles Compliance Report 16. Operating Principles of the Board of Directors 16.1. The Board of Directors is structured to ensure maximum influence and effectiveness in full compliance with CMB’s regulations and resolutions. Relevant rules are set forth in the Company’s Articles of Association. Accordingly: 16.1.1. Board members are elected from among persons who possess basic knowledge of the legal framework about regulating activities and transactions related to the Company’s field of activity, are educated and experienced in company management, can interpret financial statements and reports and are preferably university graduates. 16.1.2. According to our Articles of Association; Board of Directors is obligated to carry out the task and duties granted by the legislation in effect and the Articles of Association herein. All tasks and transactions that do not require a General Assembly decision according to the regulations of the laws and the Articles of Association herein are carried out by the Board of Directors. The Board of Directors carries out its duties and uses its powers in line with the Turkish Commercial Code, Capital Markets Law, Capital Markets Board regulations and decisions, Articles of Association and the provisions of legislation in effect. Bodies and persons assigning (transferring) – in conformity with the law – a duty or a power arising from the Law or the Articles of Association, to other persons, will not be held responsible for the acts and decisions of these persons unless it is proven that these bodies and persons have paid insufficient attention in selecting these persons. With the aim of overseeing, monitoring, directing and auditing the activities and in order to protect the interests of the Company and shareholders, the members of the Board of Directors may assume duties in the board of directors of the associates, subsidiaries, and joint ventures. Moreover, the members of the Board of Directors may assume tasks and duties in associations working for public interest, in foundations, in institutions and organizations working for public interest or making scientific research, development activities, and universities, and in educational institutions and etc. Other duties can be assumed with the approval of the Board of Directors and within the scope of the principles the Board will accept. 16.1.3. The Board of Directors represents the Company. Upon the decision taken by the Board of Directors, the power to represent the Company can be assigned to one of the board members or to one or more executive members or to third parties who are managers. At least one board member must be authorized to represent the Company. Unless a notarized copy of the decision, indicating the persons entitled to represent the Company and the method of representing, is registered and published in the trade registry, the transfer of the power (authority) will not be valid. Limitation of the power to represent, does not set forth any terms and conditions for bona fide third persons; however, the registered and announced restrictions on using the power to represent the company from a single center or branch or altogether, are applicable. 371st, 374th and 375th Articles of the Turkish Commercial Code are reserved. In order to ensure that all documents that will be provided and agreements that will be made by the Company are valid, they must have the signatures of the persons authorized to represent the Company, under the Company’s trade name. According to the Articles of Association of the Company; within the scope of the provisions of the Internal Directive that will be prepared as specified in the 367th Article of the Turkish Commercial Code and in the Articles of Association, the Board of Directors is entitled to partially or entirely assign (transfer) the management to one or more board members, to the third parties, and to the Boards or Committees it will establish; without prejudice to the provisions of the 375th Article of the Turkish Commercial Code and the Capital Markets Legislation and other legislation. The Board of Directors may also assign tasks by determining the executive members who will assume a part of its powers and specific Company affairs, and monitor the implementations of the Board’s decisions. In such case, the scope of the responsibilities of each executive board members, will be specified by the Board of Directors. The executive members, assume all powers and responsibilities within the scope covering the tasks and duties assigned to them. As a rule, the other board members will not be held responsible for transactions within this scope; without prejudice to the duties and powers within the scope of the nonnegotiable powers that are only assumed by the Board of Directors. 90 DYH 2013 ANNUAL REPORT If the election of the executive members are made without their scope of responsibilities is determined by the Board of Directors, then the executive members, without any limitation, take over all the power and responsibility regarding company affairs, company management and activities and the implementation of the decisions. Executive members are also the members of the Executive Board. Provided that it is within the framework of the legislation in effect; If the scope of the responsibility is determined by the Board of Directors, the Executive Board is authorized and responsible for the implementation and supervision of the issues that are within its scope of responsibility, if such a determination is not made, then it is authorized and responsible for the implementation and supervision of all the issues. 16.2. The résumés of the members of the Board of Directors are available in the annual report and on the Company’s website (www.dyh.com.tr). 16.3. Board members are provided with timely access to any information they need to fully meet their obligations. 16.4. The Board of Directors issues a separate resolution for the approval of the annual report, the financial report and the corporate governance compliance report. 16.5. In 2013, 32 Board meetings/decisions were held/made (2012: 23) and the decisions at Board meetings were made by the unanimous vote of the participants while no dissenting votes were cast. 16.6. A Board of Directors Secretariat, which serves all board members and reports to the Chairperson of the Board of Directors, was formed to maintain documents related to board meetings. 16.7. Board of Directors meetings are planned and held in an effective and efficient manner. As stipulated in the Company’s Articles of Association: 16.7.1. The Board of Directors convenes with regularity that will help the Board effectively carry out its tasks and duties. 16.7.2. As a rule, the Board of Directors convenes upon the call made by the Chairman or the Vice Chairman. All members of the Board of Directors may make a written request from the Chairman or the Vice Chairman (if the Chairman is not present), to make a call for the Board of Directors meeting. 16.7.3. Information and documents about the issues on the Board of Directors meeting agenda are presented to the board members within a reasonable period of time in prior to the meeting ensuring equal flow of information. 16.7.4. As a rule, the Board of Directors convenes at the Company headquarters. However, with a Board of Directors resolution, meetings may be held in another location in the city or in another city. 16.7.5. In-person participation for board members at the meetings is the rule. Meetings may also be attended using any technology that provides remote access to the meeting. The opinions of those members who do not attend the meeting but submit their opinions in writing shall be conveyed to the other members. 16.7.6. All Board resolutions are recorded in the meeting minutes and signed by the participants of the meetings. The Board members who cast dissenting votes must sign the meeting minutes with their justifications for their dissenting votes. Board resolutions, meeting minutes, related documents and correspondence are kept and regularly archived by the Board of Directors Secretariat. In cases where the affirmative votes of the Independent Board members are required, if they cast dissenting votes, the measures required by the Capital Markets Board and Capital Markets Legislation are implemented. 16.7.7. The Board of Directors convenes with the majority of the total number of members and takes decisions with the majority of the members present at the meeting. DYH 2013 ANNUAL REPORT 91 At a Glance Operations Sustainability Corporate Governance Dividend Distribution Financial Information Corporate Governance Principles Compliance Report Corporate Governance Principles Compliance Report 16.7.8. In the event that a majority is not reached in the next meeting, the proposal is deemed rejected. Each Board member is entitled to one vote regardless of his/her position and field of responsibility. 16.7.9. It is legally possible to take a decision on the proposal given by one of the members, with the written consents of the other members in compliance with the relevant provisions of the Turkish Commercial Code. 16.7.10. Provided that the 1527th Article of the Turkish Commercial Code and the regulations that will be made within the scope of this article are complied with, the meetings of the Board of Directors can be made entirely in an electronic platform. Also these meetings can be held in a manner that, while some of the members are attending the meeting physically some of them may attend in an electronic platform. 16.7.11. Persons entitled to attend the Company’s Board of Directors meetings, may also attend these meetings in an electronic platform pursuant to the 1527th Article of the Turkish Commercial Code. Pursuant to the provisions of the Communiqué on the “In Business Corporations, the Board Meetings to be held in Electronic Platforms other than the General Assemblies of the Joint Stock Companies”, the Company can install the Electronic Meeting System that will enable the entitled persons to attend the meetings in electronic platform and cast their votes or can purchase services from the systems developed for this purpose. In the meetings to be held, it is ensured that, within the framework of the provisions of the Communiqué, the entitled persons are able to use their rights - stipulated in the relevant legislation – on the system installed in line with this provision of the Company’s Articles of Association or on the system which the support services are purchased from. 16.8. Travel and meeting expenses of the Board of Directors, as well as the expenses for the special tasks related to the Board’s activities and similar expenses are paid out of the Company’s general budget without any restrictions. 17. Number, Structure and Independence of Board Committees 17.1. In line with the position and the needs of the Company, four committees were formed to ensure that the Board of Directors successfully exercises its duties and responsibilities. These committees are the Executive Committee, the Audit Committee, the Corporate Governance Committee and the Committee for Early Risk Detection. 17.2. Charters regarding the functioning of the committees are stated in the Articles of Association. 17.3. Additionally, the Audit Committee and the Corporate Governance Committee have written charters that are approved by the Board of Directors and publicly disclosed on the Company’s website: www.dyh.com.tr. These charters were created in due consideration of the Capital Markets Law, CMB regulations and resolutions, Articles of Association and international practices. The committees’ charters are reviewed according to legislative changes and changing circumstances. The committees convene at least every three months. 17.4. Information on the Executive Committee is presented below. 17.4.1. Information on Committee members is listed below. Name/Surname Title Other Duties Duties in Other Committees Yahya Üzdiyen President Executive Member of the Board of Directors None Erem Turgut Yücel(*) Member Chief Legal Officer None Ahmet Toksoy Member Member of the Board of Directors/CFO None (*) 92 Soner Gedik resigned from his position as a member of the Executive Committee on the 15 of August 2013 and on the same date, Erem Turgut Yücel was appointed for this position. th DYH 2013 ANNUAL REPORT 17.5. Information concerning the Audit Committee is presented below. 17.5.1. Information on Committee members is listed below. Full Name Hacı Ahmet Kılıçoğlu Ertuğrul Feyzi Tuncer Title Association with the Company Independence Status President Independent Board Member (Non-Executive) Member Independent Board Member (Non-Executive) Duties in Other Committees Independent Corporate Governance Committee Member Independent President of Corporate Governance Committee, President of Committee for Early Risk Detection 17.5.2. Audit Committee President Hacı Ahmet Kılıçoğlu is a non-executive Independent Board Member. 17.5.3. Committee members do not have executive duties. 17.5.4. The Audit Committee carries out its duties regularly in compliance with the Capital Markets Law and CMB’s regulations and resolutions. Within this framework, the Committee in 2013: • Reviewed the financial statements, footnotes and independent audit reports of the Company, as well as those of its subsidiaries that are listed on the Borsa Istanbul as a result of the Company’s financial statements being prepared on a consolidated basis, before they were publicly reported and held meetings with the independent auditing firm; • Reviewed the independent audit contracts of the Company and its subsidiaries listed on the Borsa Istanbul; • Reviewed the internal audit activities conducted by the Internal Audit Department, as well as the measures taken. 17.6. The Corporate Governance Committee is also formed by the stipulation of the Company’s Articles of Association and the information on this Committee is presented below. 17.6.1. Information on Committee members is listed below. Full Name Title Association with the Company Ertuğrul Feyzi Tuncer President Board Member (Independent) Audit Committee Member, Member Independent of Committee for Early Risk Detection Hacı Ahmet Kılıçoğlu(*) Member Board Member (Independent) Independent President of Audit Committee Member Doğan Group of Companies, Vice President of Finance (Capital Markets, IFRS/CMB Reporting and Affiliates Oversight) Dependent Member of Committee for Early Risk Detection Dr. Murat Doğu (*) Independence Status Duties in Other Committees Ali İhsan Karacan resigned from his position as a member of the Board of Directors on the 12th of February 2013 and Yahya Üzdiyen was appointed to this position. Ali İhsan Karacan resigned from his position as a member of the Corporate Governance Committee on the 4th of March 2013 and Hacı Ahmet Kılıçoğlu was appointed to this position. DYH 2013 ANNUAL REPORT 93 At a Glance Operations Sustainability Corporate Governance Dividend Distribution Financial Information Corporate Governance Principles Compliance Report Corporate Governance Principles Compliance Report 17.6.2. More than half of the Committee members are non-executive. 17.6.3. The Committee has functioned on a regular basis since its inception. Accordingly, in 2013: • The Committee assessed the compliance of the corporate governance compliance reports produced by the Company and its publicly traded subsidiaries. • The Committee ran compliance analyses on annual reports produced by the Company and its publicly traded subsidiaries. • It was assured that the Ordinary General Assembly Meeting for the year 2012 was held in accordance with applicable legislation. • The Committee ensured that relations with shareholders and investors were managed in a regular fashion, as per the applicable legislation and principles. • It was assured that the website was continuously updated and enhanced. • The Company received its revised corporate governance rating from the corporate rating agency ICS on July 30, 2013, which was subsequently disclosed to the general public. In line with the CMB decision taken for all publicly traded corporations that have corporate governance rating scores; ISS Corporate Services (ICS) revised our corporate governance rating together with all the other publicly traded corporations and announced to the public on the 3rd of March 2014. Corporate governance rating reports are available on our Company’s corporate website at www.dyh.com.tr. 17.7. In accordance with the amendment made to the CMB Communiqué (Serial: IV, No: 56) which was in effect on the 17th of July 2013 but repealed at the beginning of 2014, our Company established the Committee for Early Risk Detection with the Board of Directors’ decision n.2013/6 taken on the 18th of March 2013. Information about the Committee for Early Risk Detection is as follows: Name/Surname Title Relation with the Company Independence Status Ertuğrul Feyzi Tuncer President Member of the Board of Directors Independent Audit Committee Member; President of the Corporate Governance Committee Selma Uyguç Member Doğan Şirketler Grubu Holding A.Ş.,Vice President, Legal Consultancy Services Dependent None Member Doğan Şirketler Grubu Holding A.Ş., Vice President of Financial Affairs (Risk Management and Taxes ) Dependent None Yener Şenok Member Doğan Şirketler Grubu Holding A.Ş., Vice President of Financial and Administrative Affairs Dependent None Dr. Murat Doğu Doğan Şirketler Grubu Holding A.Ş., Vice President of Financial Affairs (Capital Markets, IFRS/CMB Reporting and Affiliates Member Oversight) Dependent Corporate Governance Committee Member Ayhan Sırtıkara Doğan Şirketler Grubu Holding A.Ş., Board of Directors/Management Coordination Member Director Dependent None Korhan Kurtoğlu Member Doğan Şirketler Grubu Holding A.Ş., Financial Affairs Reporting Director Dependent None Tolga Babalı (*) 94 Duties in Other Committees Erem Turgut Yücel resigned from his position on the Committee for Early Risk Detection on the 15th of August 2013 and Selma Uyguç was appointed to this position. DYH 2013 ANNUAL REPORT 17.8. The Committees of the Company operate within the context of their authorities and responsibilities and submit proposals to the Board of Directors. However, the final decisions are made by the Board of Directors. 17.8.1. The Committees inform the Board of Directors as regards the resolutions they have made. 17.8.2. The Committees inform the Board of Directors about their annual activities. 17.9. Certain members of the board sit on more than one committee since there are only two Independent Board Members. 18. Risk Management and Internal Control Mechanism Since the Company is a holding company, it predominantly focuses on asset management, the financial performance of its subsidiaries and financial risk. The management of financial risk is monitored by the Chief Financial Officer, relevant Vice Presidents of Financial Affairs and the Vice President of Finance and Portfolio Management. Identification and reporting of financial as well as operational risks of the subsidiaries are also under the responsibility of and undertaken by the President of Executive Committee. From time to time, the Audit Committee and the Corporate Governance Committee also report problems and recommendations for solutions regarding risk management and internal control mechanisms to the Board of Directors. In 2013, special emphasis was placed on risk management and reporting as well as on restructuring efforts. Within the framework of these efforts, information on the implemented processes and methods for audit/risk management is exchanged with the Chief Financial Officer and Vice President of Audit at the Doğan Şirketler Grubu Holding A.Ş., the main shareholder. Committee for Early Risk Detection set up, will present suggestions to the Board of Directors with regard to the identification and management of risk. 19. Strategic Goals of the Company The mission, vision, values and strategies of the Company are publicly announced on ourwebsite - www.dyh.com.tr. The mission of the Company is to maintain its leadership with regard to news, entertainment and the media sector and to compete in global markets. Our vision is to develop media tools for news, education and entertainment and make these tools more widely accessible, as well as to use innovative methods to deliver content to all customers and to be one of the world’s leading media companies. The strategy of the Company is to provide customer-focused services, develop customized products for target audiences, produce content using traditional brands, keep pace with advances in technology, diversify and enhance content distribution channels using innovative methods, provide customized information and entertainment products and tools, diversify and expand sales and distribution channels and collaborate with leading global media companies. The Board of Directors and the management of the Company continuously monitor the status of the Company against its strategic goals. During the frequent and regularly held Board meetings, the Company’s situation is reviewed and new goals and strategies are developed. 20. Financial Rights (Remuneration) 20.1. According to the Articles of Association of our Company decisions regarding the payments that are made to the members of the Board of Directors such as per diem, salaries, dividends, bonuses and premiums are taken by the General Assembly. The financial rights of the members of the Board of Directors may vary depending on their tasks, duties, powers and responsibilities in the Board of Directors. In determining the financial rights that will be provided to the independent board members, the Capital Markets Law, Capital Markets Board regulations and the provisions of the other legislation in force are applicable. DYH 2013 ANNUAL REPORT 95 At a Glance Operations Sustainability Corporate Governance Dividend Distribution Financial Information Corporate Governance Principles Compliance Report Corporate Governance Principles Compliance Report The Board of Directors decides whether or not any payments will be made to presidents and members of committee for their tasks and duties in the committees and determines the amounts and terms and conditions in case any payments are made. The Remuneration Policy that was created regarding the financial rights that will be provided to the members of the Board of Directors and to the Company’s senior executive managers who have administrative responsibilities, is publicly disclosed on the corporate website of the Company and submitted as a separate agenda item for the information of the shareholders at the General Assembly. The Remuneration Policy of our Board of Directors was created, submitted for the information of the General Assembly and publicly disclosed in conformity with the CMB regulations and decisions. 20.2. At the Ordinary General Assembly meeting that was held to discuss the 2012 activities; it was decided by majority vote that the members of the Board of Directors are paid a net amount of TL 10,000 per month. Apart from this, there is no performance based awarding for the members of the Board of Directors. 20.3. DYH determined its key management personnel as the members of the Board of Directors and the members of the executive committee. Short term benefits provided to the key management personnel are composed of salaries, premiums, health insurance, communication and transportation. The total amount of the benefits provided in 2013 was TL 2,647 thousand (2012: TL 4,751 thousand). 96 DYH 2013 ANNUAL REPORT Other Obligatory Disclosures Other Obligatory Disclosures GENERAL INFORMATION Accounting Period for the Report: This report covers the period from January 1, 2013 to December 31, 2013. Company’s Trade Name, Trade Registry Number, Contact Details of Headquarters and Branches, if Applicable, Website: Trade Name : Doğan Yayın Holding A.Ş. Trade Registry Number : 172165 Address : Burhaniye Mahallesi, Kısıklı Caddesi, No: 65, Üsküdar/İstanbul Tel : (216) 556 9000 Fax : (216) 556 9200 Website : www.dyh.com.tr Company’s Stakes in Direct or Indirect Subsidiaries: The Company has direct or indirect subsidiaries. Information about these and the Company’s stakes in these are presented in the footnotes to the consolidated financial statements for the period January 1, 2013-December 31, 2013. Information About the Company’s Acquisition of Its Own Shares: During the accounting period January 1, 2013-December 31, 2013, the Company did not acquire its own shares. Majority Shareholders, Members of the Board of Directors, Senior Executive Managers and Their Blood Relatives, and Relatives by marriage up to Second-Degree, Who Make Important Transactions with the Company or Associate Companies Which may Lead to Conflicts of Interest and/or Make Transactions Related to a Commercial Business that is within the scope of the Company’s or the Associate Companies’ Field of Activity for Their Own Account or for the Account of Others or Become Unlimited Partners in other Companies Carrying Out Similar Commercial Businesses: The majority shareholders, the members of the Board of Directors, senior executive managers and their blood relatives, and relatives by marriage up to second-degree did not make important transactions with the Company or Associate Companies which may lead to conflicts of interest, and did not make any transaction related to a commercial business that is within the scope of the Company’s or the Associate Companies’ field of activity for his/her own account or for the account of others or did not become an unlimited partner of other companies carrying out similar commercial businesses. If any, Company Executives’ Transactions with the Company on Their Own Behalf or on Behalf of Third Parties, or Activities Falling under Non-Compete Clause within the Scope of the Permission by the General Assembly: Board Members receive the permission of the General Assembly to carry out the transactions outlined in the Turkish Commercial Code’s Articles 395 and 396. According to the information available to the Company, Board members did not conduct any commercial activities on their own behalf or on behalf of third parties in the Company’s business line. Administrative or Legal Sanctions Imposed upon the Company or Its Executives Due to Action in Violation of Legislation: During the period, no administrative or legal sanction was imposed on the Company or its executives due to actions in violation of legislation. DYH 2013 ANNUAL REPORT 97 At a Glance Operations Sustainability Corporate Governance Dividend Distribution Financial Information Other Obligatory Disclosures Other Obligatory Disclosures Amendments to the Articles of Association and Their Reasons In order to ensure compliance of our Articles of Association with the provisions of the Turkish Commercial Code n.6102 and the Capital Markets Law n. 6362, and due to renewals in the relevant legislation to improve the language used in the text of the Articles of Association; In accordance with the permission letter given by the Capital Markets Board n. 1923-6545 on the 18th of June 2013, and within the framework of the permission letter n. 7007-4870 of the General Directorate of Domestic Trade of the Ministry of Customs and Trade given on the 18th of June 2013; issues regarding the amendments to the Articles 3, 4, 9, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23 and 24, and the annulment of the Articles 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38 and 39 of the Articles of Association were submitted to the approval of the shareholders and approved by majority vote at the Ordinary General Assembly Meeting held on the 21st of June 2013 regarding 2012 activities. With the aim of ensuring compliance with the 5th paragraph provision of the 18th Article of the Capital Markets Law n. 6362 and within this scope, in order to make possible the issuance of shares below the nominal (par) value; In accordance with the permission letter given by the Capital Markets Board n. 2859-9911 on the 27th of September 2013, and within the framework of the permission letter n. 7362 of the General Directorate of Domestic Trade of the Ministry of Customs and Trade given on the 30th of September 2013; the issue regarding the amendments to the 7th and 9th Articles of the Articles of Association was submitted to the approval of the shareholders and approved by majority vote at the Extraordinary General Assembly Meeting held on the 21st of October 2013. RESEARCH AND DEVELOPMENT ACTIVITIES Research and Development Activities: The Company carried out no R&D activities during 2013 and thus incurred no related costs. COMPANY ACTIVITIES AND IMPORTANT DEVELOPMENTS Attainment of Targets Set in Previous Periods, Implementation of General Assembly Resolutions, Any Reasons for Failure to Attain Targets or Implement Resolutions Assessments: The Company implemented all General Assembly resolutions in the concerned accounting period. Lawsuits against the Company Which Could Affect Its Financial Situation and Activities, Their Possible Outcomes The Company sets aside reserves for the pending administrative, commercial and business lawsuits filed against it. The cases against the Company and the reserves set aside for possible litigation damages are as follows: Lawsuits The details of litigation against Doğan Yayın Holding and its subsidiaries that are pending as of 31 December 2013 and 31 December 2012 are as follows: (TL thousand) December 31, 2013 December 31, 2012 61,068 53,048 Commercial Cases 5,547 13,540 Business Cases 6,918 5,867 Other 1,578 1,549 Total 75,111 74,004 Legal Cases 98 DYH 2013 ANNUAL REPORT A provision for lawsuits filed against the Group whose details are given above amounting to TL 28,522 has been provided with reference to the opinions of the Group’s legal advisors and past experience of management related to similar litigations against the Group (31 December 2012: TL 25,936). Legal cases mainly consist of pecuniary and non-pecuniary damages and lawsuits filed against Doğan Yayın Holding and its subsidiaries and lawsuits initiated by the Radio and Television Supreme Council. Information about the Extraordinary General Assembly: Our Company’s Extraordinary General Assembly Meeting was held on the 21st of October 2013. In accordance with the permission letter given by the Capital Markets Board n. 2859-9911 on the 27th of September 2013, and within the framework of the permission letter n. 7362 of the General Directorate of Domestic Trade of the Ministry of Customs and Trade given on the 30th of September 2013; the issue regarding the amendments to the 7th and 9th Articles of the Articles of Association was submitted to the approval of the shareholders and approved by majority vote at the Extraordinary General Assembly Meeting. Announcements Regarding Private and Public Audits: None. Information Regarding Donations and Aid Made by the Company During the Year and the Expenditure Made Within the Scope of the Social Responsibility Projects: In 2013, our Company did not make any donations. If the Company is an Associate in the Group Companies: All Other Measures That Were Taken or That Were Avoided for the Benefit of the Legal Transactions That Were Made With The Parent Company, With an Associate Company of the Parent Company, Upon the Instruction of the Parent Company for the Benefit of the Parent Company or Its Associate Company and All Other Measures That Were Taken or That Were Avoided for the Benefit of the Parent Company or Its Associate Company in the Previous Operating Year: Our Company did not make any legal transactions with the parent company, with an associate company of the parent company, upon the instruction of the parent company, for the benefit of the parent company or its associate company, and in the previous operating year, did not take or did not avoid taking any measures for the benefit of the parent company or its associate company or did not make any transactions that must be compensated. If the Company is an Associate in the Group Companies: In Case the Above Mentioned Legal Transaction is Made or in Case the Measure Is Taken or Avoided, Whether or Not Appropriate Action is Taken For Each of the Legal Transactions, and Whether or Not the Measure That was Taken or That was Avoided Inflicted any Losses on the Company, and if it did, Whether This Loss was Compensated or Not According to the Circumstances within Their Knowledge: Since, at our Company, there are not any transactions with the characteristics specified in the above sub-paragraph of the report, there is not any loss that must be compensated. FINANCIAL SITUATION Type and Amount of the Capital Market Instruments Issued: With the decision n. 2013/27 of our Board of Directors taken on the date 25.10.2013 based on the authorization given by the 7th Article of our Company’s Articles of Association and approval decision n. 40/1289 of the Capital Markets Board taken on the date 06.12.2013, our issued capital was increased from TL 2,000,000 thousand to TL 2,428,550 thousand (all paid in cash). In capital increase, all the shares issued representing the increased capital of TL 428,550 thousand (all paid in cash) were assigned and sold to our parent company Doğan Şirketler Grubu Holding A.Ş., in a manner that the par value of 1.-TL per share will be 0.70.-TL and the total amount of TL 299,985 thousand will be DYH 2013 ANNUAL REPORT 99 At a Glance Operations Sustainability Corporate Governance Dividend Distribution Financial Information Other Obligatory Disclosures Other Obligatory Disclosures paid totally and in cash within the scope of the conditions specified in the “issuance document” which was approved by the Capital Markets Board. The notification was made to the Capital Markets Board regarding that the capital increase transactions were completed in compliance with the principles and procedures stipulated in the Capital Markets Law and its relevant Communiqués and in the “issuance document”. Moreover, in line with the (c) sub-paragraph provisions of the 1st paragraph of the 25th Article titled “after sales transactions in capital increases” of the Communiqué (VII-128.1) on “shares” of the Capital Markets Board, the 7th Article titled “Registered and Issued Capital” of our Articles of Association was amended in a manner reflecting the increased capital and registered in the Trade Registry on the 27th of December 2013. Review and Company Management Assessments on Whether or Not There Is Any Loss of Company Capital or Deep - In-Debt Situation: As of 31st of December 2013, the amount of our equity is TL 1,492,720 thousand and this amount corresponds to 61.47% of our issued capital of TL 2,428,550 thousand. Measures Taken to Improve the Company’s Financial Structure: In order to improve the financial structure, necessary measures were taken on the issues of decreasing the cost of the liabilities within the Group structure, taking corporate finance actions for the improvement of the Company structure and ensuring more effective cash management. The consolidated net debt amount which was TL 1,344 million at the end of 2012, fell to TL 956 million at the end of 2013. However, depending on the cash inflows due to selling of subsidiaries and real estate in 2011 and 2012, positive improvements are expected in 2014 on net debt position. On the other hand, as aforementioned, our issued capital amount was increased to TL 2,428,550 thousand and all the amount was paid in cash. INFORMATION ON THE PARENT COMPANY Information on the Parent Company Shares Held by Group Enterprises: Our parent company is Doğan Şirketler Grubu Holding A.Ş. and our Company does not have shares in the capital of our parent company. Moreover, the subsidiaries of DYH do not have shares in the capital of DYH either. Notes on the Internal Audit and Risk Management Systems of the Group as Regards the Preparation of Consolidated Financial Statements: Our financial statements and footnotes are prepared on consolidated basis in conformity with the Turkish Accounting Standards and the Turkish Financial Reporting Standards (“TAS” and “TFRS”) published by the Public Oversight, Accounting and Auditing Standards Authority within the scope of the provisions of the Communiqué (Serial: II ,No: 14.1) of Capital Markets Board (“CMB”); and determined with the CMB decision n.20/670 taken on the 07.06.2013 and reported in conformity again with the CMB’s presentation principles published in the Weekly Bulletin n.2013/19 on the 7th of June 2013; and independently audited and publicly disclosed in compliance with the Turkish Auditing Standards (“TDS”). Information about the Reports Stipulated in the 199th Article of the Turkish Commercial Code: Our Company’s annual report and affiliation report are prepared within the scope of the provisions of the Turkish Commercial Code. The members of the Board of Directors did not have any request within the framework of the Article 199/4 of the Turkish Commercial Code. 100 DYH 2013 ANNUAL REPORT In Case the 5%, 10%, 20%, 25%, 33%, 50%, 67% or 100% shares we have, directly or indirectly, in the capitals of the companies in our Corporate Structure Falls Below or rises above These Percentages, This Condition and Its Reasons: Company Name 31.12.2013 31.12.2012 Effective Effective Share Ratio (%) Share Ratio (%) YoY Description Posta Haber Ajansı A.Ş. 0.00 90.64 -90.64 Due to the merger Doğan Gazetecilik A.Ş. 92.76 70.76 22.00 Due to acquisition Milliyet Verlags-und Handels Gmbh 0.00 65.42 -65.42 Due to liquidation Moje Delo spletni marketing d.o.o. 0.00 49.44 -49.44 Due to selling of shares Bolji Posao d.o.o. Serbia 49.45 27.19 22.26 Due to transfer of shares Bolji Posao d.o.o. Bosnia 49.45 27.19 22.26 Due to transfer of shares OOO Novoprint 0.00 49.44 -49.44 Due to liquidation OOO Pronto Stavropol 0.00 49.44 -49.44 Due to the merger OOO Pronto Pskov 0.00 44.50 -44.50 Due to selling of shares OOO Rosprint Samara 0.00 49.44 -49.44 Due to the merger ZAO NPK 0.00 49.44 -49.44 Due to liquidation Sklad Dela Prekmurje NGO 0.00 27.19 -27.19 Due to selling of shares Alkım İletişim Hizmetleri A.Ş. 66.48 0.00 66.48 Due to establishment Koloni Televizyon ve Radyo Yayıncılık A.Ş. 79.96 71.97 7.99 Due to transfer of shares Atılgan Televizyon ve Radyo Yayıncılık A.Ş. 79.96 71.97 7.99 Due to transfer of shares Tematik Televizyon ve Radyo Yayıncılık A.Ş. 79.96 69.30 10.66 Due to transfer of shares Denizatı İletişim Hizmetleri A.Ş. 0.00 79.96 -79.96 Due to the merger Tasfiye Halinde Protema Yapım Reklamcılık ve Dağıtım A.Ş. 0.00 79.96 -79.96 Due to liquidation 79.96 85.81 -5.85 Due to transfer of shares 100.00 0.00 100.00 Due to acquisition Dogan Media International S.A. Doğan İnternet Yayıncılığı ve Yatırım A.Ş. DYH 2013 ANNUAL REPORT 101 At a Glance Operations Sustainability Corporate Governance Dividend Distribution Financial Information Audıt Commıttee Resolutıon Audit Committee Resolution DOĞAN YAYIN HOLDİNG A.Ş. AUDIT COMMITTEE RESOLUTION Date : 04/03/2014 Subject : Financial Report Regarding 01.01.2013-31.12.2013 Accounting Period Decision : The independently audited consolidated financial report, (in comparison with previous period’s financials) prepared for the accounting period of 01.01.2013-31.12.2013 in compliance with the Turkish Accounting Standards and the Turkish Financial Reporting Standards (“TAS” and “TFRS”) published by the Public Oversight, Accounting and Auditing Standards Authority within the scope of the Communiqué (Serial: II, No: 14.1) of Capital Markets Board (“CMB”), and in accordance with the presentation principles that were determined with the Decision (dated 07.06.2013, No: 20/670) of CMB and announced in the weekly CMB Bulletin (dated 07.06.2013, No: 2013/19), was reviewed by getting the opinions of the executives who are responsible for the preparation of the Company’s financial reports. Within the framework of the information available to us and the data presented to us, we have shared our opinion with the executives in charge of preparing the financial report. In our opinion, the financial report accurately reflects the Company’s activity results, does not include any misleading deficiencies and complies with CMB’s regulations. Hacı Ahmet KILIÇOĞLU President 102 DYH 2013 ANNUAL REPORT Ertuğrul Feyzi TUNCER Member Corporate Governance Committee Resolution Corporate Governance Committee Resolution DOĞAN YAYIN HOLDİNG A.Ş. CORPORATE GOVERNANCE COMMITTEE RESOLUTION Date and Number : 04/03/2014 Subject : Approval of the Annual Report and Other Issues In the meeting held at the Company’s Headquarters on the date specified above: 1- The Annual Report and the Corporate Governance Compliance Report (will be included in the Annual Report), which were prepared for the accounting period of 01.01.2013-31.12.2013 in compliance with the Communiqué (Serial: II, No: 14.1) on the “Principles Regarding Financial Reporting in the Capital Markets” of Capital Markets Board (CMB), were reviewed by our Committee, by getting the opinions of the executives who are responsible for the preparation of the Company’s Annual Report. Limited within the scope of the information we have and we have been given, our opinion relating to this Annual Report and the Corporate Governance Compliance Report was presented to the executives who have responsibility in the preparation of the Annual Report and the Corporate Governance Compliance Report. Within the framework of this opinion, our committee reached a conclusion that this Annual Report and the Corporate Governance Compliance Report; truly reflect the facts regarding the Company’s activity results and do not contain any significant conflicts that may cause misleading results, and comply with the CMB regulations. 2- It was recommended that it will be appropriate to inform the Board of Directors about the policies and rules that must be determined and/ or revised and the actions that must be taken in line with the CMB’s Corporate Governance Communiqué (Serial: II, No: 17.1) and its provisions which became effective after being published in the Official Gazette numbered 28871, dated 03.01.2014. 3- The efforts made in relation to the Company’s website, were assessed within the scope of the Turkish Commercial Code, Capital Markets legislation and the practices of the Corporate Governance Principles and recommendations were made. Ertuğrul Feyzi TUNCER President Hacı Ahmet KILIÇOĞLU Member Dr. Murat DOĞU Member DYH 2013 ANNUAL REPORT 103 At a Glance Operations Sustainability Corporate Governance Dividend Distribution Financial Information Board of Director’s Statement of Responsibility on the Approval of the Reports Board of Director’s Statement of Responsibility on the Approval of the Reports STATEMENT OF RESPONSIBILITY OF THE BOARD OF DIRECTORS; REGARDING THE APPROVAL OF THE FINANCIAL REPORT AND THE ANNUAL REPORT DATE OF DECISION DECISION NO : 07.03.2014 : 2014/08 Ref No: AS PER THE 9th ARTICLE OF THE SECOND SECTION OF THE COMMUNIQUÉ SERIAL: II, No: 14.1 OF THE CAPITAL MARKETS BOARD The independently audited consolidated financial report and the annual report of Doğan Yayın Holding A.Ş., prepared for the accounting period of 01.01.2013–31.12.2013 in compliance with the Turkish Accounting Standards and the Turkish Financial Reporting Standards (“TAS” and “TFRS”) published by the Public Oversight, Accounting and Auditing Standards Authority within the scope of the provisions of the Communiqué (Serial: II ,No: 14.1) of Capital Markets Board (“CMB”) and in accordance with the presentation principles that were determined with the Decision (dated 07.06.2013, No: 20/670) of CMB and announced in the weekly CMB Bulletin (dated 07.06.2013, No: 2013/19), were reviewed by our Committee. Within the framework of the information we obtained in the scope of our duties and responsibilities, the following issues were detected: The financial report and the annual report do not include any misleading announcements on important issues or imperfections that may cause misleading results on the announcements as of the date they were made; The financial report, prepared in accordance with the financial reporting standards in force, truly reflects the facts regarding the assets, liabilities, financial situation and profit & loss of our Company; and The annual report, honestly reflects the progress and the performance of the business and the financial situation of the Company, together with the important risks and uncertainties. Ahmet Toksoy CFO 104 DYH 2013 ANNUAL REPORT Muzaffer Göğüş Finance Manager Board of Director’s Resolution on the Approval of the Reports Board of Director’s Resolution on the Approval of the Reports DOĞAN YAYIN HOLDİNG A.Ş. BOARD OF DIRECTOR’S RESOLUTION Decision No Date of Decision Signatories : 07.03.2014 : 2014/08 : Yaşar Begümhan Doğan FARALYALI (Chairwoman) Soner GEDİK (Vice Chairman) Yahya ÜZDİYEN (Executive Member) Ahmet TOKSOY (Member) Ertuğrul Feyzi TUNCER (Independent Member) Hacı Ahmet KILIÇOĞLU (Independent Member) The decision herein was signed by the Board Members as per the provision of the Article 390/IV of the Turkish Commercial Code. Our Board of Directors decided unanimously to: Approve and submit to the General Assembly’s approval the independently audited consolidated financial report (in comparison with previous period’s financials) which was presented to our Board with the assent (including “amendment” recommendations) of our Audit Committee and prepared for the accounting period of 01.01.2013-31.12.2013, in compliance with the Turkish Accounting Standards and the Turkish Financial Reporting Standards (“TAS” and “TFRS”) published by the Public Oversight, Accounting and Auditing Standards Authority within the scope of the Communiqué (Serial: II, No: 14.1) of the Capital Markets Board (“CMB”) and in accordance with the presentation principles that were determined with the Decision (dated 07.06.2013, No: 20/670) of CMB and announced in the weekly CMB Bulletin (dated 07.06.2013, No: 2013/19), Approve and submit for the information of our shareholders the attached “2013 Annual Report” and the “2013 Corporate Governance Compliance Report” which were submitted to the approval of our Board with the assent of our Corporate Governance Committee and of the related executives. Yaşar Begümhan Doğan FARALYALI Chairwoman Soner GEDİK Vice Chairman Yahya ÜZDİYEN Executive Member Ahmet TOKSOY Member Ertuğrul Feyzi TUNCER Independent Member Hacı Ahmet KILIÇOĞLU Independent Member DYH 2013 ANNUAL REPORT 105 At a Glance Operations Sustainability Corporate Governance Dividend Distribution Financial Information Dividend Distribution Policy Dividend Distribution Policy DOĞAN YAYIN HOLDİNG A.Ş. DIVIDEND DISTRIBUTION POLICY (February 28, 2014) Our Company makes dividend distribution decisions, and distributes dividend, in line with the Turkish Commercial Code; the Capital Markets Legislation; Capital Markets Law (CML), Capital Markets Board (CMB) Regulations and Decisions; Tax Laws; provisions of other relevant legislation; and our Articles of Association, and the Resolution of the General Assembly. Accordingly; 1-As a principle, at least 50% of the “net distributable profit” calculated as per the Capital Markets Legislation, CMB, CMB Regulations and Resolutions can be distributed, taking into account the financial statements prepared in compliance with the Capital Markets Legislation, CMB, CMB Regulations and Decisions. 2-In case it is contemplated to distribute dividend between 50% and 100% of the “net distributable profit” calculated; the financial statements, financial structure, and the budget of our Company are taken into consideration when determining the dividend distribution percentage. 3-The dividend distribution proposal is made public as per the Capital Markets Legislation, CMB, and the CMB Regulations and Decisions taking into account the legal deadlines. 4-In case the amount is: a.lower than the amount calculated as per Article 1, of the “net distributable profit” that is calculated in line with the legal records kept within the scope of the Turkish Commercial Code, and the Tax Laws; the “net distributable profit” calculated as per the legal records kept within the scope of this article hereby is taken into account, and it is distributed entirely, b.higher than the amount mentioned above, action is taken as per Article 2. 5-In case there is no net distributable profit as per the legal records kept within the scope of the Turkish Commercial Code and Tax Laws, no dividend distribution can be made a “net distributable profit” has been calculated according to the financial statements prepared as per the Capital Markets Legislation, CMB, CMB Regulations and Decisions, and in compliance with again the Capital Markets Legislation, CMB, the CMB Regulations and Resolutions. 6-In case the calculated “net distributable profit” is below 5% of the issued capital, this may lead to the dividend distribution not being made. 7-The upper limit of the aid and donations that will be made by our Company within an accounting term in compliance with the Capital Markets Legislation, CMB, the CMB Regulations and Decisions, and as per the principles set forth in our Articles of Association shall be determined by the General Assembly. No donations may be made in amounts exceeding the limit set forth by the General Assembly, and the donations made shall be added to the “net distributable profit” tax base. 8-The dividend distribution shall start latest by the 30th day following the general assembly meeting where the distribution resolutions were made, and in any case, as of the end of the accounting term. 9-In line with the Capital Markets Legislation; CMB, CMB Regulations and Decisions, and the provisions of the Articles of Association, and as per the Resolution of the General Assembly, our Company may distribute the dividend share in cash and/or upfront as “free shares”, or may distribute in installments. 10-Our Company may also distribute dividends to other persons who are not shareholders in line with the resolutions to be made by the General Assembly. In that case action shall be taken in compliance with the Turkish Commercial Code; Capital Markets Legislation; CMB, CMB Regulations and Decisions, and the provisions of the Articles of Association. 11-Our Company may decide to distribute, and may distribute, dividend advance, in line with the Turkish Commercial Code; Capital Markets Legislation; CMB, CMB Regulations and Decisions; Tax Laws; the provisions of the other legislation, the Articles of Association, and the General Assembly Resolution. 12-Investments requiring significant amounts of cash outflows for increasing our Company value, significant issues affecting our financial structure; important uncertainties and adversities outside the control of our Company arising in economy, in the markets, or other areas shall be taken into account in making dividend distribution decisions. 106 DYH 2013 ANNUAL REPORT Dividend Distribution Proposal Dividend Distribution Proposal DOĞAN YAYIN HOLDİNG A.Ş. DIVIDEND DISTRIBUTION PROPOSAL Decision No Date of Decision Signatories : 07.03.2014 : 2014/09 : Yaşar Begümhan Doğan FARALYALI (Chairwoman) Soner GEDİK (Vice Chairman) Yahya ÜZDİYEN (Executive Member) Ahmet TOKSOY (Member) Ertuğrul Feyzi TUNCER (Independent Member) Hacı Ahmet KILIÇOĞLU (Independent Member) The decision herein was signed by the Board Members as per the provision of the Article 390/IV of the Turkish Commercial Code. Taking into account the Turkish Commercial Code (TCC), the Capital Markets Legislation, the Capital Markets Law (CMB n.), the Capital Markets Board (CMB) regulations/decisions, Corporate Tax, Income Tax, Tax Procedure Law (VUK) and the provisions of the other relevant legal legislations, the relevant provisions of the Company’s Articles of Association and the “Dividend Distribution Policy” which was publicly disclosed; and according to the independently audited financial statements which were prepared for the accounting period of 01.01.2013-31.12.2013 in compliance with the Turkish Accounting Standards and the Turkish Financial Reporting Standards (“TAS” and “TFRS”) published by the Public Oversight, Accounting and Auditing Standards Authority within the scope of the provisions of the CMB’s Communiqué (Serial: II, No: 14.1) on “Principles Regarding the Financial Reporting in the Capital Markets”, and in accordance with the presentation principles determined pursuant to the CMB’s decisions on the issue; Our Board of Directors decided to inform the shareholders on the issue that the profit distribution will not be made relating to 2013 accounting period and to submit this issue to the approval of the General Assembly due to the facts specified below: • When the “Deferred Tax Income” and “Tax Expense for the period” from Continuing Operations, and the “Net Period Loss” from Discontinued Operations are considered together; it is seen that the “Net Period Loss” relating to Parent Company is TL 187,726 thousand; • There is a “Net Period Loss” of TL 25,894 thousand for the accounting period of 01.01.2013-31.12.2013, at our legal records kept within the scope of Turkish Commercial Code (TTK) and Tax Procedure Law (VUK). Yaşar Begümhan Doğan FARALYALI Chairwoman Soner GEDİK Vice Chairman Yahya ÜZDİYEN Executive Member Ahmet TOKSOY Member Ertuğrul Feyzi TUNCER Independent Member Hacı Ahmet KILIÇOĞLU Independent Member DYH 2013 ANNUAL REPORT 107 At a Glance Operations Sustainability Corporate Governance Dividend Distribution Financial Information Dividend Distribution Table Dividend Distribution Statement DOĞAN YAYIN HOLDİNG A.Ş. 2013 DIVIDEND DISTRIBUTION TABLE (TL thousand) 1 Issued Capital 2 General Legal Reserve (According to Legal Records) If there is a dividend distribution privilege pursuant to the Articles of Association, the information about this privilege 3 Period Profit / Loss (+/-) (1) 4 Taxes (+/-) (2) Non-controlling Interests (minority interests) (-) 5 Net Period Profit/Loss (+/-) 6 Losses from the Previous Years (-) (3) 7 General Legal Reserve (-) 8 NET DISTRIBUTABLE PERIOD PROFIT/LOSS (+/-) 9 Donations throughout the Year (+) 10 Net Distributable Period Profit/Loss including Donations (+/-) (4) 11 First Dividend to Shareholders Cash Bonus Total 12 Dividend Distributed to the Privileged Shareholders 13 Other Distributed Dividend Dividend to Board Members Dividend to the Employees Dividend to the Persons Who are not Shareholders 14 Dividend to the Holders of Dividend-right Certificates 15 Second Dividend to Shareholders 16 General Legal Reserve 17 Statutory Reserves 18 Special Reserves 19 EXTRAORDINARY RESERVES 20 Other Distributable Resources Profit from the Previous Year Extraordinary Reserves Other Distributable Reserves Pursuant to the Turkish Commercial Code and the Articles of Association (1) Composed of the sum of the “Continuing and Discontinued Operations Period Profit Before Tax”. (2) Composed of the sum of the Continuing Operations “Period Tax Expense” and “Deferred Tax Income”. (3) The portion of the Previous Years Losses exceeding the amounts of “Emission Premium”. “Discounts for Shares” and “General Legal Reserve Funds”. (4) There is no distributable period profit. 2,428,550 22,465 None According to CMB -233,006 -19,818 -65,098 -187,726 -1,386,548 0 -1,574,274 0 -1,574,274 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 According to Legal Records -25,894 0 0 -25,894 0 0 -25,894 DIVIDEND RATIO TABLE GROUP NET 108 TOTAL DYH 2013 ANNUAL REPORT TOTAL DIVIDEND AMOUNT DISTRIBUTED Cash (TL) Bonus (TL) 0.00 0.00 0.00 0.00 TOTAL DIVIDEND DISTRIBUTED / NET DISTRIBUTABLE PERIOD PROFIT Ratio (%) 0.00 0.00 DIVIDEND FOR SHARE WITH TL 1 NOMINAL VALUE Amount (%) Ratio (%) 0.00 0.00 0.00 0.00 0 0 0 0 0 0 0 0 The Opinion Letter Of The Independent Audit Company Regarding The Annual Report Opinion Letter of the Independent Audit Company on the Annual Report OPINION LETTER OF THE INDEPENDENT AUDIT COMPANY ON THE ANNUAL REPORT To the Doğan Yayın Holding A.Ş. Board of Directors, 1. We have assessed whether the financial data and the Board of Directors’ reviews and explanations stated in the Doğan Yayın Holding A.Ş.’s (“Company”) Annual Report prepared as of of 31.12.2013 are consistent or not with the independently audited financial statements issued on the same date. 2. It is the Company management’s responsibility to prepare the Annual Report, assessed in our report, in conformity with the regulation on the “Determination of the Minimum Content of the Companies’ Annual Reports”. 3. Our responsibility as an independent audit company is to state our opinions on the consistency of the financial data in the Annual Report in comparison to the independently audited financial statements assessed in the independent audit report issued on the date of March 07, 2014. Our assessment was made in conformity with the procedures and principles promulgated as per the Turkish Commercial Code n.6102, regarding the preparation and issuing of the annual report. These regulations stipulate that the audit shall be planned and carried out for the purpose of providing a reasonable assurance on the issue of whether or not there is a significant mistake concerning the consistency of the financial data in the Annual Report in comparison to the independently audited financial statements and to the data the independent auditor obtained during the audit. We believe that our assessments form a reasonable and sufficient basis for our opinions. 4. According to our opinion as a result of our assessment; the financial data and the reviews and explanations of the Board of Directors stated in the attached annual report, are in consistent with the independently audited financial statements of Doğan Yayın Holding A.Ş., dated December 31, 2013. DRT BAĞIMSIZ DENETİM VE SERBEST MUHASEBECİ MALİ MÜŞAVİRLİK A.Ş. Member of DELOITTE TOUCHE TOHMATSU LIMITED Zere Gaye Şentürk, Partner, CPA (Certified Public Accountant) İstanbul, 7th of March 2014 DYH 2013 ANNUAL REPORT 109 DOĞAN YAYIN HOLDİNG A.Ş. CONVENIENCE TRANSLATION OF THE CONSOLIDATED FINANCIAL STATEMENTS AND THE INDEPENDENT AUDITORS’ REPORT FOR THE PERIOD 1 JANUARY – 31 DECEMBER 2013 INTO ENGLISH (ORIGINALLY ISSUED IN TURKISH) CONVENIENCE TRANSLATION OF INDEPENDENT AUDITOR’S REPORT ORIGINALLY ISSUED IN TURKISH INDEPENDENT AUDITOR’S REPORT REGARDING CONSOLIDATED FINANCIAL STATEMENTS To the Board of Directors of Doğan Yayın Holding A.Ş. 1. We have audited the accompanying consolidated statement of balance sheet of Doğan Yayın Holding A.Ş. (“the Company”) and its subsidiaries (together will be referred as “the Group”) as at 31 December 2013, and the consolidated statement of profit or loss, consolidated statement of other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information. Group Management’s Responsibility for the Financial Statements 2. Group Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with Turkish Accounting Standards (“TAS”) published by Public Oversight Accounting and Auditing Standards Authority (“POA”), 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 3. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with standards on auditing issued by Capital Markets Board. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about 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 management’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 entity’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 4. In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of Doğan Yayın Holding A.Ş. and its subsidiaries as at 31 December 2013, and of their financial performance and their cash flows for the year then ended in accordance with TAS (refer to Note 2). Reports on Other Legal and Regulatory Requirements 5. In accordance with Article 402 of Turkish Commercial Code No. 6102 (“TCC”), the Board of Directors provided us all the required information and documentation in terms of audit; and nothing has come to our attention that may cause us to believe that the Group’s set of accounts prepared for the period 1 January-31 December 2013 does not comply with the code and the provisions of the Company’s articles of association in relation to financial reporting. 6. In accordance with Article 378 of Turkish Commercial Code No. 6102, in publicly traded companies, the board of directors is obliged to establish a committee consisting of specialized experts, to run and to develop the necessary system for the purposes of early identification of any risks that may compromise the existence, development and continuation of the company; applying the necessary measures and remedies in this regard and managing such risks. According to paragraph 4 of Article 398 of the same code, the auditor is required to prepare a separate report explaining whether the Board of Directors has established the system and authorized committee stipulated under Article 378 to identify risks that threaten or may threaten the company and to provide risk management, and, if such a system exists, the report, the principles of which shall be announced by POA, shall describe the structure of the system and the practices of the committee. This report shall be submitted to the Board of Directors along with the auditor’s report. Our audit does not include the evaluation of the operational efficiency and adequacy of the operations carried out by the management of the Group in order to manage these risks. As of the balance sheet date, POA has not announced the principles of this report, yet. Therefore, no separate report has been drawn up regarding this matter. On the other hand, the Group established the mentioned committee on 17 August 2012 and the committee is comprised of 7 members. Since the date of its establishment, the committee has held 9 meetings for the purposes of early identification of any risks that may compromise the existence and development of the Company, applying the necessary measures and remedies in this regard and managing such risks, and has submitted the relevant reports to the Board of Directors. DRT BAĞIMSIZ DENETİM VE SERBEST MUHASEBECİ MALİ MÜŞAVİRLİK A.Ş. Member of DELOITTE TOUCHE TOHMATSU LIMITED Zere Gaye Şentürk, SMMM Partner Istanbul, 7 March 2014 CONTENTSPAGE CONSOLIDATED BALANCE SHEETS 114-116 CONSOLIDATED STATEMENTS OF PROFIT OR LOSS 117 CONSOLIDATED STATEMENTS OF OTHER COMPREHENSIVE INCOME 118 CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY 119-120 CONSOLIDATED STATEMENTS OF CASH FLOWS 121-122 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 NOTE 2 NOTE 3 NOTE 4 NOTE 5 NOTE 6 NOTE 7 NOTE 8 NOTE 9 NOTE 10 NOTE 11 NOTE 12 NOTE 13 NOTE 14 NOTE 15 NOTE 16 NOTE 17 NOTE 18 NOTE 19 NOTE 20 NOTE 21 NOTE 22 NOTE 23 NOTE 24 NOTE 25 NOTE 26 NOTE 27 NOTE 28 NOTE 29 NOTE 30 NOTE 31 NOTE 32 NOTE 33 NOTE 34 NOTE 35 NOTE 36 NOTE 37 123 ORGANIZATION AND NATURE OF OPERATIONS BASIS OF PRESENTATION OF FINANCIAL STATEMENTS BUSINESS COMBINATIONS SEGMENT REPORTING CASH AND CASH EQUIVALENTS FINANCIAL INVESTMENTS FINANCIAL BORROWINGS OTHER FINANCIAL LIABILITIES TRADE RECEIVABLES AND PAYABLES OTHER RECEIVABLES AND PAYABLES INVENTORIES INVESTMENTS ACCOUNTED FOR BY USING THE EQUITY METHOD DERIVATIVE INSTRUMENTS INVESTMENT PROPERTY PROPERTY, PLANT AND EQUIPMENT INTANGIBLE ASSETS GOVERNMENT GRANTS PROVISIONS, CONTINGENT ASSETS AND LIABILITIES COMMITMENTS PROVISION FOR EMPLOYMENT BENEFITS OTHER ASSETS AND LIABILITIES PREPAID EXPENSES AND DEFERRED INCOME EQUITY SALES AND COST OF SALES MARKETING EXPENSES AND GENERAL ADMINISTRATIVE EXPENSES EXPENSES BY NATURE OTHER INCOME/EXPENSES FROM OPERATING ACTIVITIES INCOME AND EXPENSES FROM INVESTMENT ACTIVITIES FINANCE INCOME AND EXPENSES DISPOSAL OF SUBSIDIARY INCOME TAXES EARNING/LOSS PER SHARE RELATED PARTY DISCLOSURES FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES FINANCIAL INSTRUMENTS ASSETS AS HELD FOR SALE AND DISCONTINUED OPERATIONS SUBSEQUENT EVENTS 123-126 126-157 157-158 159-165 166 167 167-172 172 173-174 175-176 176 177-178 179 181-182 183-186 186 186-190 191-192 193-195 195-196 196-197 197-201 202-204 204-205 205 206 207 207 208 209-215 215 216-219 220-232 232-234 232-234 235-238 238 DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT 113 Hızlı Bir Bakış Faaliyetler Sürdürülebilirlik Kurumsal Yönetim Kâr Dağıtımı Finansal Bilgiler DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES CONSOLIDATED BALANCE SHEETS AT 31 DECEMBER 2013 AND 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated.) Audited 31 December 2013 Restated Audited 31 December 2012 Restated Audited 31 December 2011 1.646.201 1.764.209 2.203.284 5 6 531.197 - 477.599 - 1.049.295 102.915 33 9 15.285 712.762 17.388 653.751 14.729 609.411 10 13 11 22 21 107.060 839 118.312 49.099 97.684 418.728 573 110.112 32.388 53.670 34.613 168.425 28.372 114.837 1.632.238 1.764.209 2.122.597 13.963 - 80.687 2.141.729 2.153.793 2.472.989 10 6 12 14 15 14.436 1.270 31.883 74.370 499.776 97.146 1.495 32.932 64.760 519.175 399.227 595 55.468 46.431 535.306 16 16 22 31 21 575.251 666.103 34.304 117.721 126.615 574.160 625.552 27.022 85.958 125.593 595.197 637.263 40.243 56.716 106.543 3.787.930 3.918.002 4.676.273 Note References ASSETS Current assets Cash and cash equivalents Financial investments Trade receivables -Trade receivables from related parties -Trade receivables from non-related parties Other receivables -Other receivables from non-related parties Derivative instruments Inventories Prepaid expenses Other current assets Sub-total Non-current assets as held for sale 36 Non-current assets Other receivables -Other receivables from non-related parties Financial investments Investments accounted for by using the equity method Investment property Property, plant and equipment Intangible assets -Goodwill -Other intangible assets Prepaid expenses Deferred tax asset Other non-current assets Total assets These consolidated financial statements as of and for the period ended 31 December 2013 has been approved by the Board of Directors on 7 March 2014. The accompanying notes form an integral part of these consolidated financial statements. 114 DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES CONSOLIDATED BALANCE SHEETS AT 31 DECEMBER 2013 AND 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated.) Audited 31 December 2013 Restated Audited 31 December 2012 Restated Audited 31 December 2011 1.498.436 1.687.697 1.830.414 7 7 8 497.905 424.957 16.155 728.825 292.171 234.397 381.014 397.403 66.438 33 9 20 50.579 320.673 21.250 21.134 259.598 19.577 25.788 387.194 24.300 33 10 13 22 31 45.205 2.440 44.081 2.015 42.637 1.375 23.957 7.527 97.435 39.023 3.429 32.269 32.843 20 18 21 35.376 28.522 - 30.563 25.936 - 27.977 41.412 273.889 1.489.158 1.687.697 1.830.414 9.278 - - 796.774 813.481 1.770.330 7 563.968 - 584.603 - 915.382 215.135 10 14.196 13.313 12.837 20 22 21 31 84.759 3.563 130.288 78.305 12.364 124.896 40.786 47.222 404.983 133.985 DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT 115 Note References LIABILITIES Current liabilities Short-term borrowings Short-term portion of long-term borrowings Other financial liabilities Trade payables -Trade payables to related parties -Trade payables to non-related parties Payables regarding employee benefits Other payables -Other payables to related parties -Other payables to non-related parties Derivative instruments Deferred income Income tax payable Short-term provisions -Short-term provisions regarding employee benefits -Other short-term provisions Other current liabilities Sub-total Liabilities related to non-current assets as held for sale 36 Non-current liabilities Long-term borrowings Other financial liabilities Other payables -Other payables to non-related parties Long-term provisions -Long-term provision regarding employee benefits Deferred income Other non-current liabilities Deferred tax liability The accompanying notes form an integral part of these consolidated financial statements. Hızlı Bir Bakış Faaliyetler Sürdürülebilirlik Kurumsal Yönetim Kâr Dağıtımı Finansal Bilgiler DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES CONSOLIDATED BALANCE SHEETS AT 31 DECEMBER 2013 AND 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated.) Note References EQUITY Audited 31 December 2013 Restated Audited 31 December 2012 Restated Audited 31 December 2011 1.492.720 1.416.824 1.075.529 Equity attributable to equity holders of the parent company 23 1.065.408 932.150 652.874 Issued capital Adjustments to issued capital Share premiums/discounts Restricted reserves Accumulated other comprehensive income and expenses that will not be reclassified in profit or loss -Investment property revaluation reserves -Actuarial losses in defined benefit plans Accumulated other comprehensive income and expenses that will be classified in profit or loss -Currency translation differences Accumulated losses Net profit/(loss) for the period 23 23 23 23 2.428.550 95.781 34.550 89.672 2.000.000 95.781 163.115 460.401 2.000.000 95.781 163.115 460.401 1.334 (26.231) 1.334 (23.588) - 72.269 (1.442.791) (187.726) 41.707 (2.003.842) 197.242 43.027 (915.177) (1.194.273) 427.312 484.674 422.655 3.787.930 3.918.002 4.676.273 Non-controlling interests Total liabilities Commitments 19 The accompanying notes form an integral part of these consolidated financial statements. 116 DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES CONSOLIDATED STATEMENTS OF PROFIT OR LOSS FOR THE PERIOD 1 JANUARY-31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated.) Note References Audited 1 January31 December 2013 Restated Audited 1 January31 December 2012 Continued operations Sales Cost of sales (-) Gross profit/(loss) from business activities 24 24 2.523.573 (1.870.605) 652.968 2.460.323 (1.735.594) 724.729 General administrative expenses (-) Marketing expenses (-) Other income from operating activities Other expenses from operating activities (-) Share of gain on investments accounted for by using the equity method Operating profit/(loss) 25 25 27 27 12 (322.215) (317.106) 225.480 (154.078) 2.193 87.242 (310.375) (268.532) 239.210 (155.054) 706 230.684 Income from investment activities Expenses from investment activities (-) Operating profit/(loss) before finance expense Finance income Finance expenses (-) Profit/(loss) for the period from continued operations before income taxes 28 28 65.051 (15.149) 137.144 6.790 (352.356) (208.422) 267.175 (75.971) 421.888 53.869 (153.129) 322.628 (48.158) 28.340 (78.577) 31.449 (228.240) 275.500 (24.584) (3.719) (252.824) 271.781 (65.098) (187.726) 74.539 197.242 32 (8,68) 9,95 32 (0,60) (0,09) DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT 117 Tax (expense)/income from continued operations Current income tax expense Deferred tax (expense)/income 29 29 31 31 Profit/(loss) for the period from continued operations Discontinued operations Profit/(loss) for the period from discontinued operations after income taxes 36 Profit/(loss) for the period Allocation of profit/(loss) for the period: Attributable to non-controlling interests Attributable to equity holders of the parent company Earning per share Earning/(loss) per share attributable to equity holders of the parent company from continued operations (Kr) Earning/(loss) per share attributable to equity holders of the parent company from discontinued operations (Kr) The accompanying notes form an integral part of these consolidated financial statements. Hızlı Bir Bakış Faaliyetler Sürdürülebilirlik Kurumsal Yönetim Kâr Dağıtımı Finansal Bilgiler DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES CONSOLIDATED STATEMENTS OF OTHER CONPREHENSIVE INCOME FOR THE PERIOD 1 JANUARY-31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated.) Note References Profit/(loss) for the period Audited 1 January31 December 2013 Restated Audited 1 January31 December 2012 (252.824) 271.781 (3.303) 1.504 (37.917) 660 7.508 51.203 (1.444) 48.560 (30.349) (204.264) 241.432 (44.457) (159.807) 67.764 173.668 Other comprehensive income/(expense): Accumulated other comprehensive income and expenses that won’t be reclassified in profit or loss -Investment property revaluation reserves -Actuarial losses in defined benefit plans Taxes related with other comprehensive income that will not be reclassified in profit or loss -Deferred tax income Accumulated other comprehensive income and expenses that will be reclassified in profit or loss -Change in currency translation reserves 2.1.2 Other comprehensive income/(expense) (after income taxes) Total comprehensive income/(expense) Allocation of total comprehensive income/(expense) for the period: Attributable to non-controlling interests Attributable to equity holders of the parent company The accompanying notes form an integral part of these consolidated financial statements. 118 DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT 119 (1) 95.781 - - 2.000.000 - 1.334 1.334 1.334 - - - - - - - - (23.588) (23.588) (23.588) - - - - - - - - 163.115 - - - - - - 163.115 163.115 - Share premiums/ discounts (1.320) (1.320) 41.707 - - - - - - 43.027 43.027 - Currency translation reserves Accumulated other comprehensive income and losses that will not be reclassified in profit or loss The accompanying notes form an integral part of these consolidated financial statements. 460.401 - - - - - - 460.401 460.401 - (2.003.842) 4.363 (624) (882) 107.990 23.370 (28.609) (1.194.273) (915.177) (926.203) 11.026 197.242 197.242 197.242 - - - - - 1.194.273 (1.194.273) (1.195.716) 1.443 173.668 1.334 (23.588) (1.320) 197.242 932.150 4.363 (624) (882) 107.990 23.370 (28.609) - 652.874 640. 405 12.469 Equity attributable to Net profit equity holders /(loss) for of the Parent the period Company Retained earnings/ accumulated losses Retained earnings/ Restricted (accumulated reserves losses) Comprises changes in fair value of put options related to non controlling interests and share purchases and sales related to non controlling interests and disposal of subsidiaries. 3 - - - Share transfer of entities under common control Purchase of subsidiary shares from noncontrolling interest Purchase of shares of entities under common control Share transfer of entities accounted by using the equity method Dividend payments of subsidiaries to non-group companies Other (1) Total comprehensive income/(expense) -Investment properties revaluation fund -Actuarial losses in defined benefit plans -Currency translation reserves -Net profit for the period Balances at 31 December 2012 - - 95.781 - 2.000.000 23 95.781 - - 2.000.000 - 23 2.1.6 Issued capital Transfer from retained earnings Option adjustment for non-controlling interest Non-group capital increase of subsidiaries Purchase of subsidiary shares Balances at 1 January 2012 (previously reported) Effect of changes in accounting policy Balances at 1 January 2012 (restated) Note References Accumulated other comprehensive income and losses that will be reclassified in profit or loss Actuarial Investment losses Adjustments property in defined to share revaluation benefit Capital reserves plans (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated.) CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY FOR THE PERIODS ENDED 1 JANUARY-31 DECEMBER 2013 AND 2012 DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES (10.628) 1.792 67.764 95 (6.746) (124) 74.539 484.674 - - - - 23.766 1.042 (21.717) - 422.655 421.271 1.384 Noncontrolling interests (10.628) 1.792 241.432 1.429 (30.334) (1.444) 271.781 1.416.824 4.363 (624) (882) 107.990 47.136 1.042 (50.326) - 1.075.529 1.061.676 13.853 Equity 120 DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT - 3 Effect of acquisition of entities under common control 2.428.550 - -Net loss for the period Balances at 31 December 2013 - - -Currency translation reserves -Actuarial losses in defined benefit plans Total comprehensive income/(expense) - - Rate changes of subsidiaries Other - - 428.550 Dividend payments of subsidiaries 23 Purchase of shares from non-controlling interests Capital increase - - Transfers from retained earnings Issued capital 2.000.000 Transfers Balances at 1 January 2013 Note References 23 - 1.334 - - - - - - - - - - - (26.231) - (2.643) - (2.643) - - - - - - - 34.550 - - - - - - - - (128.565) - - Share premiums/ discounts 163.115 72.269 - - 30.562 30.562 - - - - - - - - Currency translation reserves 41.707 Accumulated other comprehensive income and losses that will not be reclassified in profit or loss 67.909 89.672 - - - - - - - - - - (438.638) 129.333 (1.442.791) - - - (7.640) - - - 720 - 438.638 (187.726) (187.726) - - (187.726) - - - - - - - (197.242) Net profit /(loss) for the period 197.242 Retained earnings/ accumulated losses Retained earnings/ Restricted (accumulated reserves losses) 460.401 (2.003.842) The accompanying notes form an integral part of these consolidated financial statements. 95.781 - - - - - - - - - - - Accumulated other comprehensive income and losses that will be reclassified in profit or loss Actuarial Investment losses Adjustments property in defined to share revaluation benefit capital reserves plans 95.781 1.334 (23.588) (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated.) CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY FOR THE PERIODS ENDED 1 JANUARY-31 DECEMBER 2013 AND 2012 DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES 1.065.408 (187.726) (2.643) 30.562 (159.807) (7.640) - - - 720 299.985 - - Equity attributable to equity holders of the Parent Company 932.150 427.312 (65.098) - 20.641 (44.457) - (737) - (10.080) (2.088) - - - Noncontrolling interests 484.674 1.492.720 (252.824) (2.643) 51.203 (204.264) (7.640) (737) - (10.080) (1.368) 299.985 - - Equity 1.416.824 Hızlı Bir Bakış Faaliyetler Sürdürülebilirlik Kurumsal Yönetim Kâr Dağıtımı Finansal Bilgiler DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOW FOR THE PERIOD ENDED 1 JANUARY – 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated.) Note References A. Net cash provided by/(used in) operating activities Current period 1 January31 December 2013 179.220 Restated Prior period 1 January31 December 2012 (512.046) Net profit/loss for the period (208.422) 322.628 Adjustments regarding profit/loss for the period 520.889 (28.764) 206.731 610 67.536 178.263 23.146 69.245 72.687 20.115 30.514 27 19.144 15.844 13,14 28 (18.633) (15.044) 4.303 (2.193) 3.011 (3.515) (163.916) (706) 27 (61.873) (49.715) 245.094 (80.717) 2.527 - (45.767) (22.130) (2.436) - (73.464) (696.671) (69.914) - 102.915 (21.921) 8.749 16.635 (623) (7.580) (84.419) 72.437 123.029 (97.435) (900) (623.785) (22.182) 6.988 (102.451) (69.678) 239.003 (402.807) (11.676) (53.670) (6.869) (3.918) 16.350 (11.349) (102.995) (6.398) (3.430) 14.933 DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT 121 Adjustments regarding depreciation and amortization expenses Adjustments regarding provision for/reversal of impairment Adjustments regarding provisions Finance expense for tax liability in dispute and tax base increase regarding 6111 law Adjustments regarding interest income and expenses Unearned finance expense due to purchases with maturity Adjustments regarding unrealized changes in currency translation differences Adjustments regarding losses/gains in fair value Adjustments regarding losses/gain on disposal of property, plant and equipment and intangible assets Share of gain on associates accounted by using the equity method Unearned finance income due to sales with maturity Unrealized foreign exchange expense/(income) due to financial borrowings Annulment indemnity of put option agreement of Turner Reversal of provision for withholding tax Loss/(gain) on sale of share of subsidiaries Adjustments regarding reconciliation of profit/loss 15,16,24,25 16 28 28 Changes in working capital Decrease in financial investments (Increase)/decrease in other current and non-current assets and prepaid expenses Decrease in provisions (Decrease)/increase in other current and non-current liabilities and deferred income Decrease in provisions Increase/(decrease) in other payables to related parties Increase/(decrease) in other financial liabilities Tax liability in dispute paid regarding 6111 law Tax base increase paid regarding 6111 law (Increase)/decrease in inventories Increase in trade receivables Increase/(decrease) in trade payables 33 Net cash provided by/(used in) operating activities Tax penalty paid Employment termination benefits paid Tax paid Provision for unused vacation paid Provisions for lawsuit paid Collections from doubtful receivables 20 20 18 9 The accompanying notes form an integral part of these consolidated financial statements. Hızlı Bir Bakış Faaliyetler Sürdürülebilirlik Kurumsal Yönetim Kâr Dağıtımı Finansal Bilgiler DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOW FOR THE PERIOD ENDED 1 JANUARY – 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated.) Note References B. Net cash (used in)/provided from investing activities Proceeds from sale of property, plant and equipment and intangible assets and asset held for sale Cash outflow from acquisition of property, plant and equipment and intangible assets Change in long-term financial assets Effect of change in non-controlling interests Change in capital of non-controlling interests Dividends paid to non-controlling interests Decrease in derivative liabilities Cash proceeds from sale of subsidiary Cash outflow from sale of subsidiary Acquisition of share of subsidiary, net C. Net cash used in financing activities Decrease in financial borrowings (net) Increase in capital Decrease in financial borrowings related with options Interest received Interest paid NET INCREASE/DECREASE IN CASH AND CASH EQUIVALENTS BEFORE THE EFFECT OF CURRENCY TRANSLATION RESERVES (A+B+C) D. THE EFFECT OF CURRENCY TRANSLATION RESERVES ON CASH AND CASH EQUIVALENTS NET INCREASE/DECREASE IN CASH AND CASH EQUIVALENTS (A+B+C+D) E. CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD F. CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD (A+B+C+D+E) 14,15,16 5 5 The accompanying notes form an integral part of these consolidated financial statements. 122 DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT Current period 1 January31 December 2013 189.330 Restated Prior period 1 January31 December 2012 (32.936) 43.632 191.371 (236.599) 3.468 1.099 (2.088) (10.080) 399.263 (9.365) (296.315) (369.067) 299.985 (215.912) 111.648 (122.969) (277.977) 16.488 1.042 (10.628) 98.600 (51.208) (624) (44.402) (18.151) 88.806 (115.057) 72.235 (589.384) - - 72.235 458.636 530.871 (589.384) 1.048.020 458.636 DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 1-ORGANIZATION AND NATURE OF OPERATIONS Doğan Yayın Holding A.Ş. (“Doğan Yayın Holding” or the “Group”) was established in 1980 under the registered name of Miltaş Milliyet Basım Malzemeleri İthalat ve Ticaret A.Ş., which was subsequently changed to Milliyet Yayın A.Ş. in 1981. It was renamed Doğan Yayın Holding A.Ş. in November 1994. Doğan Yayın Holding operates in the media sector and has shareholdings in companies operating in newspaper and magazine printing, publishing, distribution and production of classified advertisement, internet publishing and television and radio broadcasting. Doğan Yayın Holding has also shareholdings in retail, book publishing, distribution, foreign trade and internet and telecommunication service companies. Doğan Yayın Holding has been established under Doğan Şirketler Grubu Holding A.Ş. (“Doğan Holding”) and its ultimate shareholder is Aydın Doğan and Doğan Family (Işıl Doğan, Arzuhan Yalçındağ, Vuslat Sabancı, Hanzade V. Doğan Boyner ve Y.Begümhan Doğan Faralyalı). Doğan Yayın Holding is registered in Turkey and its registered office address is as follows: Burhaniye Mahallesi Kısıklı Caddesi No: 65 Üsküdar/İstanbul Doğan Yayın Holding is registered with the Capital Markets Board (“CMB”) and its shares are quoted on Borsa İstanbul (“Borsa İstanbul”) since 6 August 1998. At 31 December 2013, 51,50% (31 December 2012: 41,11%) of Doğan Yayın Holding’s shares (“publicly available”) are listed on the ISE. In accordance with the Capital Markets Board’s (the “CMB”) Resolution No: 21/655 issued on 23 July 2010, it is regarded that 17,25% of the shares (31 December 2012: 20,95%) are outstanding as of 31 December 2013 based on the Central Registry Agency A.Ş.’s (“CRA”) records (Note 23). As of 31 December 2013, the Group has 9.132 employees including overseas (domestic 5.645) (31 December 2012: 10.466 employees including overseas, domestic 6.230) Subsidiaries Subsidiaries of Doğan Yayın Holding, registered countries and nature of their businesses together with business and geographic segments are as follows: Subsidiaries operating in the publishing segment are summarized as below: Subsidiaries Hürriyet Gazetecilik ve Matbaacılık A.Ş. (“Hürriyet”) Hürriyet Medya Basım Hizmetleri ve Ticaret A.Ş. (“Hürriyet Medya Basım”) Doğan Ofset Yayıncılık ve Matbaacılık A.Ş. (“Doğan Ofset”) Doğan Gazetecilik A.Ş. (“Doğan Gazetecilik”) Doğan Dağıtım Satış Pazarlama Matbaacılık Ödeme Aracılık ve Tahsilat Sistemleri A.Ş. (“Doğan Dağıtım”) Doğan Dış Ticaret ve Mümessillik A.Ş. (“Doğan Dış Ticaret”) Doğan Haber Ajansı A.Ş. (“Doğan Haber”) Doğan Gazetecilik İnternet Hizmetleri ve Ticaret A.Ş. (“Doğan Gazetecilik İnternet”) Yenibiriş İnsan Kaynakları Hizmetleri Danışmanlık ve Yayıncılık A.Ş. (“Yenibir”) Hürriyet Zweigniederlassung GmbH (“Hürriyet Zweigniederlassung”) Doğan Media International GmbH (“DMI”) Hürriyet Invest B.V. (“Hürriyet Invest”) Registered Geographic country segment Nature of business Business segment Turkey Turkey Newspaper publishing Publishing Turkey Turkey Turkey Turkey Printing and administrative services Turkey Magazine and book publishing Turkey Newspaper publishing Publishing Publishing Publishing Turkey Turkey Turkey Turkey Turkey Turkey Distribution Import and export News agency Publishing Publishing Publishing Turkey Turkey Internet services Publishing Turkey Turkey Internet services Publishing Germany Germany Netherlands Europe Europe Europe Newspaper printing Newspaper publishing Investment Publishing Publishing Publishing DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT 123 Hızlı Bir Bakış Faaliyetler Sürdürülebilirlik Kurumsal Yönetim Kâr Dağıtımı Finansal Bilgiler DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 1-ORGANIZATION AND NATURE OF OPERATIONS (Continued) Subsidiaries Fairworld International Limited (“Fairworld”) Falcon Purchasing Services Ltd. (“Falcon”) Trader Media East Ltd. (“TME”) Oglasnik d.o.o. TCM Adria d.o.o. Expressz Magyarorszag Media Kft Mirabridge International B.V. Publishing International Holding B.V. Pronto Invest B.V. Bolji Posao d.o.o. Serbia Bolji Posao d.o.o. Bosnia OOO RUKOM OOO Pronto Aktobe OOO Pronto Neva OOO Delta-M OOO Pronto Baikal Job.ru LLC OOO Pronto DV OOO Pronto Ivanovo OOO Pronto Kaliningrad OOO Pronto Kazan OOO Pronto Krasnodar OOO Pronto Nizhny Novgorod OOO Pronto Novosibirsk OOO Pronto Oka OOO Pronto Samara OOO Pronto UlanUde OOO Pronto Vladivostok OOO Pronto Moscow OOO Tambukan OOO Utro Peterburga OOO Pronto Kemerovo OOO Pronto Smolensk OOO Pronto Tula OOO Pronto Voronezh OOO Tambov-Info OOO Pronto Obninsk OOO SP Belpronto OOO Pronto Rostov ZAO Pronto Akzhol TOO Pronto Akmola OOO Pronto Atyrau OOO Pronto Aktau SP Pronto Kiev OOO Partner-Soft Pronto Soft TOV E-Prostir Impress Media Marketing LLC OOO Rektcentr Pronto Ust Kamenogorsk Publishing House Pennsylvania Inc. Nartek Bilişim Turizm ve Pazarlama Hizmetleri Ticaret A.Ş. (“Nartek”) Doğan İnternet Yayıncılığı ve Yatırım A.Ş. (“Doğan İnternet Yayıncılığı”) 124 DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT country Registered segment Geographic Nature of business Business segment United Kingdom United Kingdom Jersey Croatia Croatia Hungary Netherlands Netherlands Netherlands Serbia Bosnia-Herzegovina Russia Kazakhstan Russia Russia Russia Russia Russia Russia Russia Russia Russia Russia Russia Russia Russia Russia Russia Russia Russia Russia Russia Russia Russia Russia Russia Russia Belarus Russia Kazakhstan Kazakhstan Kazakhstan Kazakhstan Ukraine Russia Belarus Ukraine Russia Russia Kazakhstan USA Europe Europe Europe Europe Europe Europe Europe Europe Europe Europe Europe Russia and EE Russia and EE Russia and EE Russia and EE Russia and EE Russia and EE Russia and EE Russia and EE Russia and EE Russia and EE Russia and EE Russia and EE Russia and EE Russia and EE Russia and EE Russia and EE Russia and EE Russia and EE Russia and EE Russia and EE Russia and EE Russia and EE Russia and EE Russia and EE Russia and EE Russia and EE Russia and EE Russia and EE Russia and EE Russia and EE Russia and EE Russia and EE Russia and EE Russia and EE Russia and EE Russia and EE Russia and EE Russia and EE Russia and EE Russia and EE Foreign trade Foreign trade Investment Newspaper and internet publishing Investment Newspaper and internet publishing Investment Investment Investment Internet publishing Internet publishing Internet publishing Newspaper and internet publishing Newspaper and internet publishing Newspaper and internet publishing Newspaper and internet publishing Internet publishing Newspaper and internet publishing Newspaper and internet publishing Newspaper and internet publishing Newspaper and internet publishing Newspaper and internet publishing Newspaper and internet publishing Newspaper and internet publishing Newspaper and internet publishing Newspaper and internet publishing Newspaper and internet publishing Newspaper and internet publishing Newspaper and internet publishing Newspaper and internet publishing Newspaper and internet publishing Newspaper and internet publishing Newspaper and internet publishing Newspaper and internet publishing Newspaper and internet publishing Newspaper and internet publishing Internet publishing Newspaper and internet publishing Newspaper and internet publishing Newspaper and internet publishing Newspaper and internet publishing Newspaper and internet publishing Newspaper and internet publishing Newspaper and internet publishing Internet publishing Internet publishing Internet publishing Publishing Investment Newspaper publishing Investment Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Turkey Turkey Internet publishing Publishing Turkey Turkey Internet publishing Publishing DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 1-ORGANIZATION AND NATURE OF OPERATIONS (Continued) Subsidiaries operating in the broadcasting segment are summarized as below: Subsidiaries Doğan TV Holding A.Ş. (“Doğan TV Holding”) DTV Haber ve Görsel Yayıncılık A.Ş. (“Kanal D”) Kanal D Yapımcılık Reklamcılık ve Dağıtım A.Ş. (“Kanal D Yapımcılık”) Alkım İletişim Hizmetleri A.Ş. (“Alkım İletişim”) Mozaik İletişim Hizmetleri A.Ş. (“Mozaik” or “D-smart”) Doruk Televizyon ve Radyo Yayıncılık A.Ş. (“Doruk Televizyon” or “CNN Türk”) Doğan TV Digital Platform İşletmeciliği A.Ş. (“Doğan TV Dijital”) Alp Görsel İletişim Hizmetleri A.Ş. (“Alp Görsel”) Fun Televizyon Yapımcılık Sanayi ve Ticaret A.Ş. (“Fun TV”) Tempo Televizyon Yayıncılık Yapımcılık Sanayi ve Ticaret A.Ş. (“Tempo TV”) Kanalspor Televizyon ve Radyo Yayıncılık A.Ş. (“Kanalspor”) Milenyum Televizyon Yayıncılık ve Yapımcılık A.Ş. (“Milenyum TV”) TV 2000 Televizyon Yayıncılık Yapımcılık Sanayi ve Ticaret A.Ş. (“TV 2000”) Popüler Televizyon ve Radyo Yayıncılık A.Ş. (“Popüler TV”) D Yapım Reklamcılık ve Dağıtım A.Ş. (“D Yapım Reklamcılık”) Bravo Televizyon Yayıncılık Yapımcılık Sanayi ve Ticaret A.Ş. (“Bravo TV”) Doğa Televizyon ve Radyo Yayıncılık A.Ş. (“Doğa TV”) Altın Kanal Televizyon ve Radyo Yayıncılık A.Ş. (“Altın Kanal”) Stil Televizyon ve Radyo Yayıncılık A.Ş. (“Stil TV”) Selenit Televizyon ve Radyo Yayıncılık A.Ş. (“Selenit TV”) Trend Televizyon ve Radyo Yayıncılık A.Ş. (“Trend TV or D Çocuk”) Ekinoks Televizyon ve Radyo Yayıncılık A.Ş. (“Ekinoks TV”) Fleks Televizyon ve Radyo Yayıncılık A.Ş. (“Fleks TV”) Kutup Televizyon ve Radyo Yayıncılık A.Ş. (“Kutup TV”) Galaksi Radyo ve Televizyon Yayıncılık Yapımcılık Sanayi ve Ticaret A.Ş. (“Galaksi TV”) Koloni Televizyon ve Radyo Yayıncılık A.Ş. (“Koloni TV”) Atılgan Televizyon ve Radyo Yayıncılık A.Ş. (“Atılgan TV”) Yörünge Televizyon ve Radyo Yayıncılık A.Ş. (“Yörünge TV”) Tematik Televizyon ve Radyo Yayıncılık A.Ş. (“Tematik TV”) Süper Kanal Televizyon ve Radyo Yayıncılık A.Ş. (“Süperkanal”) Uydu İletişim Basın Yayın A.Ş. (“Uydu”) NetD Dijital Yayıncılık Ticaret A.Ş. (“NetD Dijital Yayıncılık”) Doğan Uydu Haberleşme Hizmetleri ve Telekomünikasyon Ticaret A.Ş. (“Doğan Uydu Haberleşme”) Doğan Teleshopping Pazarlama ve Ticaret A.Ş. (“Doğan Teleshopping or Her Eve Lazım”) Rapsodi Radyo ve Televizyon Yayıncılık A.Ş. (“Rapsodi Radyo”) Doğan Müzik Yapım ve Ticaret A.Ş. (“DMC”) İnteraktif Medya Hizmetleri Geliştirme Pazarlama ve Ticaret A.Ş. (“İnteraktif Medya”) Primeturk GmbH (“Primeturk”) Osmose Media S.A (“Osmose Media”) Doğan Media International S.A. (“Kanal D Romanya”) Eko TV Televizyon ve Radyo Yayıncılık A.Ş. (“Eko TV”) (1) Registered country Geographic segment Nature of business Business segment Turkey Turkey Turkey Turkey TV broadcasting TV broadcasting Broadcasting Broadcasting Turkey Turkey Turkey Turkey Turkey Turkey TV broadcasting TV broadcasting TV broadcasting Broadcasting Broadcasting Broadcasting Turkey Turkey TV broadcasting Broadcasting Turkey Turkey Turkey Turkey TV broadcasting TV broadcasting Broadcasting Broadcasting Turkey Turkey TV broadcasting Broadcasting Turkey Turkey Turkey Turkey TV broadcasting TV broadcasting Broadcasting Broadcasting Turkey Turkey TV broadcasting Broadcasting Turkey Turkey Turkey Turkey TV broadcasting TV broadcasting Broadcasting Broadcasting Turkey Turkey TV broadcasting Broadcasting Turkey Turkey Turkey Turkey TV broadcasting TV broadcasting Broadcasting Broadcasting Turkey Turkey Turkey Turkey Turkey Turkey TV broadcasting TV broadcasting TV broadcasting Broadcasting Broadcasting Broadcasting Turkey Turkey Turkey Turkey Turkey Turkey Turkey Turkey TV broadcasting TV broadcasting TV broadcasting TV broadcasting Broadcasting Broadcasting Broadcasting Broadcasting Turkey Turkey Turkey Turkey Turkey Turkey Turkey Turkey Turkey Turkey Turkey Turkey Turkey Turkey Turkey Turkey TV broadcasting TV broadcasting TV broadcasting TV broadcasting TV broadcasting TV broadcasting TV broadcasting TV broadcasting Broadcasting Broadcasting Broadcasting Broadcasting Broadcasting Broadcasting Broadcasting Broadcasting Turkey Turkey TV broadcasting Broadcasting Turkey Turkey Turkey Turkey TV broadcasting Turkey Radio broadcasting Turkey Music and entertainment Broadcasting Broadcasting Broadcasting Turkey Europe Europe Europe Turkey Broadcasting Broadcasting Broadcasting Broadcasting Broadcasting Turkey Germany Luxembourg Romania Turkey Interactive services Marketing Marketing TV broadcasting TV broadcasting DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT 125 Hızlı Bir Bakış Faaliyetler Sürdürülebilirlik Kurumsal Yönetim Kâr Dağıtımı Finansal Bilgiler DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 1-ORGANIZATION AND NATURE OF OPERATIONS (Continued) Subsidiaries operating in the retail and other segments are summarized as below: Subsidiaries Doğan Dağıtım Satış Pazarlama Matbaacılık Ödeme Aracılık ve Tahsilat Sistemleri A.Ş. (“Doğan Dağıtım”) Doğan Faktoring A.Ş. (“Doğan Faktoring”) Doğan Platform Yatırımları A.Ş. (“Doğan Platform”) (1) Registered country Geographic segment Nature of business Business segment Turkey Turkey Turkey Turkey Turkey Turkey Distribution Factoring Investment Other Other Other The related subsidiary changed its commercial title as of 25 September 2013. Doğan Yayın Holding’s separate financial statements are included in the “Other” business segment for the purpose of business segment reporting in these consolidated financial statements (Note 4). NOTE 2-BASIS OF PRESENTATION OF FINANCIAL STATEMENTS 2.1 Basis of Presentation 2.1.1 Financial Reporting Standards Public Oversight, Accounting and Auditing Standards Authority (“POA”), published the “Financial Statement Samples and User Guide”, to be prepared in the scope of TAS/TFRS in accordance with the “Turkey Accounting/Financial Reporting Standards” in the Official Gazette No. 28652 dated 20 May 2013 for the companies that are obliged to apply Turkish Accounting Standards (“TAS”) and Turkish Financial Reporting Standards (“TFRS”) except for the financial institutions such as banks, insurance companies, capital market institutions operating under the scope of Banking Act 5411, the Capital Market Law No. 6362, No. 5684, No. 4683 of the Insurance Law, Private Pension Savings and Investment. The consolidated financial statements of the Group as of 31 December 2013 have been prepared in accordance with the standards described above. In accordance with the Capital Markets Board (“CMB”)’s No. II-14.1 “Principles of Financial Reporting in Capital Markets” (“Communiqué No. II-1.14”), capital market institutions except for the partnerships whose issued capital market instruments are traded on a stock exchange and investment funds, housing finance and asset finance funds, financial statements, should prepare its financial statements in accordance with TAS/TFRS. Upon the CMB’s resolution dated 7 June 2013 and 20/670, for capital market institutions, except for the corporations whose capital market instruments are traded on a stock exchange and investment funds, housing finance and asset finance funds within the scope of Communique No: II-14.1, formats are declared in the weekly bulleting numbered 2013/19 starting from the interim periods after 31 March 2013 at 7 June 2013. Upon the CMB’s resolution made on 17 March 2005, companies operating in Turkey and preparing their financial statements in accordance with the CMB’s Financial Reporting Standards are not required to apply inflation accounting beginning from 1 January 2005. Accordingly, No: 29 “Financial Reporting in Hyperinflationary Economies” (“TAS 29”) is not applied in accompanying consolidated financial statements for the accounting periods starting 1 January 2005. 126 DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 2-BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued) 2.1 Basis of Presentation (Continued) 2.1.1 Financial Reporting Standards (Continued) Doğan Yayın Holding and its subsidiaries, joint ventures and associates registered in Turkey maintain their books of account and prepare their statutory financial statements (“Statutory Financial Statements”) in TL in accordance with the Turkish Commercial Code (the “TCC”), tax legislation, and the Uniform Chart of Accounts issued by the Ministry of Finance. Foreign subsidiaries prepare their statutory financial statements in accordance with applicable laws and regulations in force in the countries in which they are registered. These consolidated financial statements are based on the statutory records, which are maintained under historical cost conversion, with the required adjustments and reclassifications reflected for the purpose of fair presentation in accordance with the Turkish Accounting Standards issued by POA. 2.1.2 Financial Statements of Subsidiaries, Associates and Joint Ventures Operating in Foreign Countries Financial statements of subsidiaries that are operating in foreign countries are prepared in accordance with applicable laws and regulations in countries in which they are registered and required adjustments and reclassifications reflected for the purpose of fair presentation in accordance with the Group’s accounting policies. If the Group companies’ functional currency is different from its presentation currency, the functional currency is translated into the presentation currency as follows: • • • Assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet, Income and expenses for statement of profit or loss are translated at average exchange rates; and all resulting exchange differences are recognised as a separate component of equity and statements of comprehensive income (currency translation reserves). Inflation accounting adjustments have been made for the indirect subsidiaries of the Group operating in Belarus in accordance with IAS 29 When a foreign operation is partially disposed of or sold, exchange differences recorded in equity are recognised in the statement of profit or loss as part of the gain or loss on sale. Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate. DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT 127 Hızlı Bir Bakış Faaliyetler Sürdürülebilirlik Kurumsal Yönetim Kâr Dağıtımı Finansal Bilgiler DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 2-BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued) 2.1 Basis of Presentation (Continued) 2.1.3 Consolidation Principles The consolidated financial statements include the accounts of the parent company, Doğan Yayın Holding, its Subsidiaries, and its Associates (collectively referred as the “Group”) on the basis set out in sections (a) to (e) below. The financial statements of the companies included in the consolidation are based on historical cost of the statutory records and for the purpose of fair presentation in accordance with the accounting policies described in Note 2.1.1 and Note 2.1.2 and application of uniform accounting policies and presentations; adjustments and reclassifications. Financial statements of consolidated entities are restated in accordance with the Financial Reporting Standards set out by the POA considering the accounting policies and presentation requirements applied by the Group. Subsidiaries and joint ventures acquired or disposed of during the accounting period are included in the consolidation from the date at which the control/ common control of operations are transferred to the Group and excluded from the consolidation when the control/common control is lost. Even if non-controlling interests result in a deficit balance, total comprehensive income is attributed to equity holders of the Parent Company and to the noncontrolling interests. Significant accounting policies used in the preparation of these consolidated financial statements are summarized as below: (a) Subsidiaries Subsidiaries are companies in which Doğan Yayın Holding has power to control the financial and operating policies for the benefit of Doğan Yayın Holding either (a) through the power to exercise more than 50% of voting rights relating to shares in the companies as a result of shares owned directly and indirectly by itself or (b) although not having the power to exercise more than 50% of the voting rights, through the exercise of actual dominant influence over the financial and operating policies. Subsidiaries are consolidated on a line-by-line basis from the date control passes to the Group and excluded from the scope of consolidation when the Group loses control. Proportion of ownership interest represents the effective shareholding of the Group through the shares held by Doğan Yayın Holding and indirectly by its subsidiaries. In the consolidated financial statements, interests owned by Doğan family members are treated as non-controlling interests and excluded from net asset and profit of the Group. The balance sheets and statements of profit or loss of the subsidiaries are consolidated on a line-by-line basis and the carrying value of the investment held by the Holding and its subsidiaries is eliminated against the related equity. Intercompany transactions and balances between Doğan Yayın Holding and its subsidiaries are eliminated on consolidation. Finance costs and the dividends arising from shares held by Doğan Yayın Holding in its subsidiaries are eliminated from equity and income for the period, respectively. Where necessary, adjustments are made to the accounting policies in the financial statements of subsidiaries in order to comply with the Group’s accounting policies. Changes in the Group’s ownership interests in subsidiaries that do not result in the loss of control over the subsidiaries are accounted for as equity transactions. The carrying amounts of the Group’s interests and 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 recognised directly in equity and attributed to owners of the Company. When the Group loses 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. 128 DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 2-BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued) The table below sets out the proportion of voting power held by Doğan Yayın Holding and its subsidiaries and effective ownership interests at 31 December 2013 and 31 December 2012: Subsidiaries Hürriyet Hürriyet Medya Basım Doğan Ofset Posta Haber (1) Doğan Gazetecilik Doğan Dağıtım Doğan Dış Ticaret Doğan Haber Doğan Gazetecilik İnternet Yenibir Hürriyet Zweigniederlassung Milliyet Verlags (2) DMI Hürriyet Invest Fairworld Falcon TME Oglasnik d.o.o. (3) (4) TCM Adria d.o.o. (4) Expressz Magyarorszag Media Kft. (4) Mirabridge International B.V. Publishing International Holding B.V. Job.ru LLC Pronto Invest B.V. Moje Delo spletni marketing d.o.o (5) Bolji Posao d.o.o. Serbia (4) Bolji Posao d.o.o. Bosnia (4) OOO RUKOM (6) OOO SP Belpronto OOO Pronto Aktobe OOO Novoprint (7) OOO Delta-M OOO Pronto Baikal OOO Pronto DV OOO Pronto Ivanovo OOO Pronto Kaliningrad OOO Pronto Kazan OOO Pronto Krasnodar OOO Pronto Krasnoyarsk (8) OOO Pronto Nizhny Novgorod OOO Pronto Novosibirsk OOO Pronto Oka (9) OOO Pronto Samara OOO Pronto Stavropol (10) OOO Pronto UlanUde OOO Pronto Vladivostok Proportion of voting power held by Doğan Yayın Holding and its subsidiaries (%) 31 December 31 December 2013 2012 66,56 100,00 99,93 92,76 100,00 98,80 99,92 100,00 100,00 100,00 100,00 100,00 100,00 100,00 74,29 70,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00 60,00 80,00 55,00 100,00 100,00 100,00 95,00 72,00 80,00 90,00 100,00 100,00 100,00 90,00 90,00 66,56 100,00 99,93 97,53 70,76 100,00 100,00 99,92 100,00 100,00 100,00 74,82 100,00 100,00 100,00 100,00 74,28 100,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00 60,00 80,00 100,00 55,00 100,00 100,00 100,00 95,00 72,00 80,00 100,00 90,00 100,00 100,00 100,00 100,00 90,00 90,00 Proportion of effective ownership interest (%) 31 December 31 December 2013 2012 66,56 66,56 66,51 92,76 100,00 98,24 82,17 92,76 66,56 66,56 85,81 66,56 98,24 98,24 49,45 49,45 49,45 49,45 49,45 49,45 49,45 49,45 49,45 49,45 49,4 29,67 31,65 27,20 49,45 49,45 49,45 46,97 35,60 39,56 44,50 49,45 49,45 49,45 44,50 44,50 66,56 66,56 66,51 90,64 70,76 99,91 99,41 82,17 92,80 66,56 66,56 65,42 85,81 66,56 99,41 99,41 49,44 49,44 49,44 49,44 49,44 49,44 49,44 49,44 49,44 27,19 27,19 49,44 29,67 31,64 49,44 27,19 49,44 49,44 49,44 46,97 35,60 39,55 49,44 44,50 49,44 49,44 49,44 49,44 44,50 44,50 DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT 129 Hızlı Bir Bakış Faaliyetler Sürdürülebilirlik Kurumsal Yönetim Kâr Dağıtımı Finansal Bilgiler DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 2-BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued) Proportion of voting power held by Doğan Yayın Holding and its subsidiaries (%) 31 December 31 December 2013 2012 Subsidiaries OOO Pronto Moscow OOO Tambukan OOO Utro Peterburga (9) OOO Pronto Kemerovo (11) OOO Pronto Smolensk OOO Pronto Tula (11) OOO Pronto Voronezh (11) OOO Tambov-Info OOO Pronto Obninsk (12) OOO Pronto Pskov (13) OOO Pronto Rostov (11) ZAO Pronto Akzhol TOO Pronto Akmola OOO Pronto Atyrau OOO Pronto Aktau SP Pronto Kiev OOO Rosprint Samara (14) OOO Partner-Soft (15) Pronto Soft TOV E-Prostir Impress Media Marketing LLC OOO Pronto Neva (16) OOO Rektcentr ZAO NPK(17) Publishing House Pennsylvania Inc. Pronto Ust Kamenogorsk Sklad Dela Prekmurje NGO (5) Doğan TV Holding Kanal D Kanal D Yapımcılık Alkım İletişim (18) Mozaik Doruk Televizyon Doğan TV Dijital Alp Görsel Fun TV Tempo TV Kanalspor Milenyum TV TV 2000 Popüler TV D Yapım Reklamcılık Bravo TV Doğa TV Altın Kanal Stil TV Selenit TV D Çocuk Ekinoks TV Fleks TV Kutup TV 130 DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT 100,00 85,00 55,00 100,00 100,00 100,00 100,00 100,00 10,00 100,00 80,00 100,00 100,00 100,00 50,00 90,00 90,00 50,00 97,00 100,00 100,00 100,00 100,00 79,96 94,88 100,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00 85,00 55,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00 80,00 100,00 100,00 100,00 50,00 100,00 90,00 90,00 50,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00 79,96 94,85 99,99 99,87 99,92 100,00 100,00 96,41 99,27 100,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00 99,87 100,00 100,00 100,00 100,00 Proportion of effective ownership interest (%) 31 December 31 December 2013 2012 49,45 42,03 27,20 49,45 49,45 49,45 49,45 49,45 4,94 49,45 39,56 49,45 39,56 39,56 24,72 44,50 44,50 24,72 47,96 49,45 49,45 49,45 39,56 79,96 75,87 75,87 79,96 80,19 79,96 80,19 79,96 80,19 79,96 80,19 80,19 80,19 80,19 79,96 80,19 80,19 80,19 80,19 80,19 80,19 80,19 80,19 80,19 49,44 42,03 27,19 49,44 49,44 49,44 49,44 49,44 49,44 44,50 49,44 39,55 49,44 39,55 39,55 24,72 49,44 44,50 44,50 24,72 49,44 49,44 49,44 49,44 49,44 39,55 27,19 79,96 75,84 75,84 80,09 79,90 83,44 79,96 77,22 79,38 80,09 80,09 80,09 80,09 79,96 80,09 80,09 80,09 80,09 79,99 80,09 80,09 80,09 80,09 DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 2-BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued) Subsidiaries Galaksi TV Koloni TV Atılgan TV Yörünge TV Tematik TV Süperkanal Uydu Eko TV Denizatı (19) Tasfiye halinde Protema (20) NetD Dijital Yayıncılık Doğan Uydu Haberleşme Doğan Teleshopping Rapsodi Radyo TV DMC İnteraktif Medya Ekin Radyo(21) Prime Turk Osmose Media Kanal D Romanya Doğan Faktoring Doğan Platform Nartek Doğan İnternet Yayıncılığı (22) (1) (3) (4) (5) (6) (7) (8) (2) (11) (12) (13) (9) (10) (14) (16) (17) (18) (19) (20) (21) (22) (15) Proportion of voting power held by Doğan Yayın Holding and its subsidiaries (%) 31 December 31 December 2013 2012 100,00 100,00 100,00 100,00 100,00 100,00 100,00 95,03 100,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00 99,00 100,00 60,00 100,00 100,00 90,00 90,00 99,19 86,67 99,91 100,00 95,01 100,00 99,99 100,00 100,00 100,00 99,25 100,00 99,99 100,00 100,00 100,00 99,00 100,00 59,99 - Proportion of effective ownership interest (%) 31 December 31 December 2013 2012 80,19 79,96 79,96 80,19 79,96 79,96 80,19 75,99 79,96 79,96 79,96 79,96 79,96 79,96 80,19 79,96 79,96 97,29 100,00 39,94 100,00 80,09 71,97 71,97 79,44 69,30 79,89 80,09 75,97 79,96 79,96 79,96 79,96 79,96 79,36 79,96 79,96 80,09 79,96 85,81 97,29 100,00 39,94 - DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT 131 The related subsidiary merged with Doğan Gazetecilik İnternet as of 27 September 2013. The related subsidiary is liquidated as of 11 June 2013. Related rates include call-options regarding non-controlling shares explained in Note 18. The related subsidiaries are reclassified under non-current assets as held for sale. The related subsidiary was sold as of 23 April 2013. The related subsidiary has ceased its operations in the year 2012. Related subsidiary was liquidated in December 2013. Related subsidiary was liquidated in November 2013. The related subsidiary has ceased its operations before the year 2010. The related subsidiary merged with OOO Pronto Rostov in April 2013. The related subsidiary is in the liquidation process as of 2013. 90% shares of the related subsidiary have been sold in December 2013 and the remaining 10% have been sold in 24 January 2014. The related subsidiary was sold as of 26 April 2013. Merging process of the related subsidiary with Pronto Samara has been completed in September 2013 The related subsidiary is in the liquidation process as of 2012. Related subsidiary was liquidated as of 21 February 2014. Related subsidiary was liquidated in November 2013. Related subsidiary was established as of 15 November 2013. The related subsidiary merged with İnteraktif Medya as of 24 December 2013. Related subsidiary was liquidated as of 26 December 2013. The related subsidiary merged with Eko TV as of 4 September 2013. The related subsidiary has been acquired as of 21 June 2013. Hızlı Bir Bakış Faaliyetler Sürdürülebilirlik Kurumsal Yönetim Kâr Dağıtımı Finansal Bilgiler DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 2-BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued) 2.1.3 Consolidation Principles (Continued) (b) Joint Ventures Joint ventures are companies in respect of which there are contractual arrangements through which an economic activity is undertaken subject to joint control by Doğan Yayın Holding and one or more other parties. Joint ventures were consolidated using the proportional consolidation method until 31 December, 2012. In accordance with the amendments to TFRS 11 effective from 1 January 2013, entities under common control are recognized under the equity method starting from this date and the related amendments are applied retrospectively and financial statements are restated accordingly. Condensed financial statements of entities under common control are disclosed in Note 12. (c) Associates An associate is an entity over which the Group has significant influence and that is neither a subsidiary nor an interest in a joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee but do not have control or joint control over those policies. Investments in associates are accounted for using the equity method of accounting. Such entities are companies in which Doğan Yayın Holding and its subsidiaries have 20%-50% of the voting rights of the Group’s overall voting power, where the Group has significant influence without any controlling power over the operations. Unrealized gains on transactions between the Group and its joint ventures are eliminated to the extent of the Group’s interest in its associates; unrealized losses are also eliminated if there is no indication of the assets transferred. Unrealized gains arising from the transactions with the Group and its associates are written off proportionally as the Group’s interest whereas unrealized losses are written off when there is no indication of impairment of the transferred asset. Increases or decreases in the net assets of associates are increased or decreased proportionally as the Group’s share in the consolidated financial statements and presented under the “Share of loss on investments accounted for by using the equity method” account in the statement of profit or loss. Where the investment’s share of losses exceeds the Group’s share (including any long-term investments that, in substance, form part of the Group’s net investment in the associate), the exceeding portion of losses are not recognised. Additional losses are recognised only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate. Unrealized gains on transactions between the Group and its associates are restated in proportion to the Group’s share in the associate and unrealized losses are also restated when there is no indication of impairment of the transferred asset. Equity method is not applied when the carrying amount of the investment in a joint venture reaches zero to the extent that the Group assumes no liabilities or obligations or in respect of the joint venture or the Group has no significant influence over the related joint venture. The carrying amount of an investment when the Group loses its significant influence over the investment is then carried at fair value. 132 DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 2-BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued) 2.1.3 Consolidation Principles (Continued) (d) Non-controlling interests Non-controlling interests of shareholders over the net assets and operational results of subsidiaries are classified as non-controlling interest and noncontrolling profit/loss in the consolidated balance sheet and statement of profit or loss. (e) Financial investments Other investments in which the Group and its subsidiaries, have less than 20%, or more than 20% direct or indirect participation but the Group has no significant influence over the related assets, or which are immaterial to consolidated financial statements are classified as available for sale financial assets. Available for sale investments that do not have a quoted market price in an active market and whose fair value cannot be measured reliably are carried at cost less any allowance for impairment (Note 6). 2.1.4 Offsetting Financial assets and liabilities are offset and the net amount is reported in the consolidated balance sheet 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. 2.1.5 Comparative information and restatement of prior period financial statements The consolidated financial statements of the Group are prepared comparatively with the previous period to identify the financial position and performance trends. The consolidated balance sheet at 31 December 2013 is prepared comparatively with 31 December 2011, 31 December 2012 balance sheet; statement of profit or loss and other comprehensive income, statement of cash flows and statement of changes in shareholders’ equity for the period ended 31 December 2013 are prepared comparatively with the related financial statements for the period 1 January – 31 December 2012 by the Group. In order to maintain consistency with current period consolidated financial statements, comparative information is reclassified and significant changes are disclosed if necessary. 2.1.6 Significant Accounting Policies and Changes in Accounting Estimates and Errors and Restatement of Previously Reported Financial Statements Changes in accounting policies arising from the first time adoption of a new TAS/TFRS are applied retrospectively or prospectively in accordance with the respective TASs/TFRSs 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. In the current period, the Group has reclassified its prior period financial statements in order to comply with the formats declared at 7 June 2013 by CMB. The effect of reclassifications is summarized on the table below: DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT 133 Hızlı Bir Bakış Faaliyetler Sürdürülebilirlik Kurumsal Yönetim Kâr Dağıtımı Finansal Bilgiler DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 2-BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued) 2.1.6 Significant Accounting Policies and Changes in Accounting Estimates and Errors and Restatement of Previously Reported Financial Statements (Continued) As explained in Note 2.1.7, amendments to TFRS 11 should be applied retrospectively. Entities under common control recognized under TAS 31 are considered as joint ventures and have been accounted for by using the equity method rather than the proportionate consolidation method in accordance with TFRS 11 and prior financial statements are restated accordingly. The effect of these changes to the financial statements is summarized in the following table: TOV E-Prostir and SP Pronto Kiev companies which are the subsidiaries consolidated in the consolidated financial statements as of 31 December 2012 and 31 December 2011, are included in the consolidated financial statements from the equity pick-up method as of 1 January 2012 based on the assessment made by the Group. In addition, subsidiaries operating in Hungary and Crotia have been reclassified under assets as held for sale and discontinued operations. Therefore, the Companys’ assets and liabilities are classified as non-current assets as held for sale and presented separately in the balance sheet. In order to comply with the current period financial statements, the above mentioned assets are classified as discontinued operations in the prior period statement of profit or loss and other comprehensive income. 134 DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 2-BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued) 2.1.6 Significant Accounting Policies and Changes in Accounting Estimates and Errors and Restatement of Previously Reported Financial Statements (Continued) 31 DECEMBER 2012 Cash and cash equivalents Trade receivables -Due from related parties -Other trade receivables Inventories Short-term prepaid expenses Other current assets Other receivables Investments accounted for by using the equity method Investment property Property, plant and equipment Intangible assets Long-term prepaid expenses Deferred tax asset Other non-current assets Short-term borrowings Short-term portion of long-term borrowings Other financial liabilities Trade payables -Due to related parties -Other trade payables Payables related to employee termination benefits Other payables Income tax payable Provisions Other short-term provisions Other current liabilities Short-term deferred income Short-term provisions regarding employee benefits Long-term borrowings Other payables Employee benefits Other non-current liabilities Long-term deferred income Deferred tax liability EQUITY Previously Reported 488.233 Adjustment regarding joint ventures (TFRS 11) (5.354) 14.757 664.684 114.383 98.992 97.163 74.034 520.315 627.309 87.541 154.773 1.240.732 18.207 2.631 (16.418) (3.925) (5.330) (17) 29.285 (9.274) (1.140) (1.757) (1.583) (2.158) (3.548) - 5.546 257.628 66.533 7.527 26.651 73.838 585.793 13.510 81.978 12.364 125.034 1.420.467 15.588 (12.714) (9.170) (1.188) (3.673) (197) (138) - Adjustments related to consolidation method change and CMB discontinued announcement operations reclassifications (5.280) (634) 6.119 (346) (1.406) 33.794 (79) (39.913) 3.647 27.022 (27.022) (508.359) 292.171 216.190 (207) 14.891 19.577 (291) (14.435) (26.651) 25.936 (73.838) 23.957 30.563 (2) (197) (12.167) 12.364 (3.643) DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT Restated 477.599 17.388 653.751 110.112 32.388 53.670 97.146 32.932 64.760 519.175 625.552 27.022 85.958 125.593 728.825 292.171 234.397 21.134 259.598 19.577 42.637 7.527 25.936 23.957 30.563 584.603 13.313 78.305 12.364 124.896 1.416.824 135 Hızlı Bir Bakış Faaliyetler Sürdürülebilirlik Kurumsal Yönetim Kâr Dağıtımı Finansal Bilgiler DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 2-BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued) 2.1.6 Significant Accounting Policies and Changes in Accounting Estimates and Errors and Restatement of Previously Reported Financial Statements (Continued) 31 DECEMBER 2011 Cash and cash equivalents Trade receivables -Due from related parties -Other trade receivables Inventories Short term prepaid expenses Other current assets Investments accounted for by using the equity method Investment property Property, plant and equipment Intangible assets Deferred tax asset Long-term prepaid expenses Other non-current assets Short-term borrowings Short-term portion of long-term borrowings Trade payables -Due to related parties -Other trade payables Payables related to employee termination benefits Other payables Deferred income short-term Income tax payable Short-term provisions regarding employee benefits Other short-term provisions Other current liabilities Long-term borrowings Other financial liabilities Other payables Long-term provisions regarding employee benefits Deferred income long-term Other non-current liabilities Deferred tax liability EQUITY 136 DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT Previously reported 1.061.644 Adjustment regarding joint Venture (TFRS 11) (6.656) 10.555 628.750 172.113 159.061 7.709 57.227 536.698 638.500 58.891 146.804 782.056 - 4.174 (21.407) (3.267) (11.642) 43.834 (10.796) (1.392) (1.237) (2.175) (18) (3.639) - 1.147 386.632 69.203 32.931 41.412 355.462 1.133.036 60.377 42.541 405.575 134.202 1.079.410 24.641 (16.870) (3.136) (88) (6.189) (2.519) (318) (1.755) (592) (217) - Adjustments related to consolidation method change and CMB discontinued announcement operations reclassifications (5.693) (689) 2.757 (421) (1.173) 29.545 (280) (32.302) 3.925 40.243 (40.243) (397.403) 397.403 (206) (244) (3.881) 17.638 24.300 (26.800) 32.269 27.977 (75.384) (215.135) 215.135 (47.222) 47.222 - Restated 1.049.295 14.729 609.411 168.425 28.372 114.837 55.468 46.431 535.306 637.263 56.716 40.243 106.543 381.014 397.403 25.788 387.194 24.300 39.023 32.269 32.843 27.977 41.412 273.889 915.382 215.135 12.837 40.786 47.222 404.983 133.985 1.075.529 DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 2-BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued) 2.1.6 Significant Accounting Policies and Changes in Accounting Estimates and Errors and Restatement of Previously Reported Financial Statements (Continued) 31 DECEMBER 2012 Sales Cost of sales (-) Gross profit Marketing expenses (-) General administrative expenses (-) Other income from operating activities Other expenses from operating activities (-) Share of loss on associates accounted by using the equity method Profit/(loss) from operating activities Income from investing activities Expense from investing activities Operating profit/(loss) before finance expense Finance income Finance expenses (-) Profit/(loss) from continued operations before tax Current tax expense Deferred tax income/(expense) Net profit/(loss) for the period from continued operations Net profit/(loss) for the period from discontinued operations Profit/loss for the period Allocation of profit/loss for the period: Non-controlling interests Attributable to equity holders of the Parent Company Adjustments related to consolidation method change and CMB discontinued announcement operations reclassifications (22.725) 10.741 (11.984) - Previously reported 2.525.589 (1.755.657) 769.932 Adjustment regarding joint ventures (42.541) 9.322 (33.219) (290.442) (327.955) 285.325 (115.989) 19.028 8.641 (4.964) 7.688 2.882 8.939 2.211 - (43.362) (46.753) (268.532) (310.375) 239.210 (155.054) (955) 319.916 820 (2.006) 841 2.889 (90.115) 706 230.684 319.916 (2.006) 2.889 267.175 (75.971) 101.089 267.175 (75.971) 421.888 252.614 (250.185) 322.345 (1.973) 1.373 (2.606) 2.889 (196.772) 95.683 - 53.869 (153.129) 322.628 (80.149) 30.415 272.611 1.572 1.034 - 2.889 - (78.577) 31.449 275.500 272.611 - (3.719) (830) - (3.719) 271.781 75.369 197.242 - (830) - - 74.539 197.242 DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT Restated 2.460.323 (1.735.594) 724.729 137 Hızlı Bir Bakış Faaliyetler Sürdürülebilirlik Kurumsal Yönetim Kâr Dağıtımı Finansal Bilgiler DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 2-BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued) 2.1.6 Significant Accounting Policies and Changes in Accounting Estimates and Errors and Restatement of Previously Reported Financial Statements (Continued) In addition, as a result of the decision made based on the evaluation of the Group management, the Group management decided to measure their investment properties at fair value which were previously carried at cost, The effect of these changes are reflected in the consolidated financial statements as of 1 January 2010 and consolidated financial statements were restated accordingly in accordance with “TAS 8 Accounting Policies, Changes in Accounting Estimates and Errors” (“TAS 8”). Effects of this amendment as of 1 January 2011 to the shareholders’ equity and net loss for the period are TL 12.469 and TL 1.443 respectively. The preparation of consolidated financial statements require the use of estimations and assumptions that may have an effect over the assets and liabilities reported at the balance sheet date, contingent assets and liabilities disclosures and income and expenses reported during the accounting period. The estimates and assumptions are based on the best available information on the current circumstances and operations; however, they may differ from the actual results. If changes in accounting estimates only relate to one period, the change is reflected in the current period in which the change is made, if they relate to future periods, the change is both reflected in the current period in which the change is made and prospectively for future periods. Except for the amendments mentioned above, accounting policies and accounting estimates applied in the current period are consistent with accounting policies and accounting estimates applied in the preparation of consolidated financial statements for the period ended as of 31 December 2012. 2.1.7 New and Revised Turkish Financial Reporting Standards The following new and revised standards and interpretations below are applied by the Group and have affected the reported amounts and disclosures in the consolidated financial statements. However, the details of standards and interpretations effective in the current period but have no effect on the financial statements and standards and interpretations not yet effective and have not been early adopted by the Group are set out below. (a) Standards effective from 1 January 2013 and have effect on the financial statements of the Group TAS 1 (Amendments) Presentation of Items of Other Comprehensive Income TAS 1 (Amendments) Presentation of Items of Other Comprehensive Income is effective for financial periods beginning on or after 1 July 2012. The amendments introduce new terminology for the statement of comprehensive income and income statement. Under the amendments to TAS 1, the ‘statement of comprehensive income’ is renamed the ‘statement of profit or loss and other comprehensive income’ and the ‘income statement’ is renamed the ‘statement of profit or loss’. The amendments to TAS 1 retain the option to present profit or loss and other comprehensive income in either a single statement or in two separate but consecutive statements. However, the amendments to TAS 1 require items of other comprehensive income to be grouped into two categories in the other comprehensive income section: (a) items that will not be reclassified subsequently to profit or loss and (b) items that may be reclassified subsequently to profit or loss when specific conditions are met. Income tax on items of other comprehensive income is required to be allocated on the same basis-the amendments do not change the option to present items of other comprehensive income either before tax or net of tax. The amendments have been applied retrospectively and hence the presentation of items of other comprehensive income has been modified to reflect the changes. Other than the above mentioned presentation changes, the application of the amendments to TAS 1 does not result in any impact on profit or loss, other comprehensive income and total comprehensive income. 138 DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 2-BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued) 2.1.7 New and Revised Turkish Financial Reporting Standards (Continued) (a) Standards effective from 1 January 2013 and have effect on the financial statements of the Group (Continued) TFRS 10 Consolidated Financial Statements and TFRS 11 Joint Arrangements In May 2011, a package of five Standards on consolidation, joint arrangements, associates and disclosures was issued, including TFRS 10, TFRS 11, TFRS 12, TAS 27 (as revised in 2011) and TAS 28 (as revised in 2011). Key requirements of these five standards are described below: TFRS 10 replaces the parts of TAS 27 Consolidated and Separate Financial Statements that deal with consolidated financial statements. SIC-12 Consolidation-Special Purpose Entities will be withdrawn upon the effective date of TFRS 10. Under TFRS 10, there is only one basis for consolidation that is control. In addition, TFRS 10 includes a new definition of control that contains three elements: (a) power over an investee, (b) exposure, or rights, to variable returns from its involvement with the investee, and (c) the ability to use its power over the investee to affect the amount of the investor’s return. Extensive guidance has been added in TFRS 10 to deal with complex scenarios. TFRS 11 replaces TAS 31 Interests in Joint Ventures. TFRS 11 deals with how a joint arrangement of which two or more parties have joint control should be classified. SIC-13 Jointly Controlled Entities-Non-monetary Contributions by Venturers will be withdrawn upon the effective date of TFRS 11. Under TFRS 11, joint arrangements are classified as joint operations or joint ventures, depending on the rights and obligations of the parties to the arrangements. In contrast, under TAS 31, there are three types of joint arrangements: jointly controlled entities, jointly controlled assets and jointly controlled operations. In addition, joint ventures under TFRS 11 are required to be accounted for using the equity method of accounting, whereas jointly controlled entities under TAS 31 can be accounted for using the equity method of accounting or proportional consolidation. TFRS 12 is a disclosure standard and is applicable to entities that have interests in subsidiaries, joint arrangements, associates and/or unconsolidated structured entities. In general, the disclosure requirements in TFRS 12 are more extensive than those in the current standards. In June 2012, the amendments to TFRS 10, TFRS 11 and TFRS 12 were issued to clarify certain transitional guidance on the application of these TFRSs for the first time. These five standards together with the amendments regarding the transition guidance are effective for annual periods beginning on or after 1 January 2013. The application of these five standards, except for the amendments to TFRS 11, does not have a significant impact on amounts reported in the consolidated financial statements. These amendments should be applied retrospectively. Entities under common control recognized under TAS 31 are considered as joint ventures and have been accounted for by using the equity method rather than the proportionate consolidation method in accordance with TFRS 11 and prior period financial statements are restated accordingly as explained in detail in Note 2.1.6. DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT 139 Hızlı Bir Bakış Faaliyetler Sürdürülebilirlik Kurumsal Yönetim Kâr Dağıtımı Finansal Bilgiler DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 2-BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued) 2.1.7 New and Revised Turkish Financial Reporting Standards (Continued) (a) Standards effective from 1 January 2013 and have effect on the financial statements of the Group (Continued) TAS 19 Employee Benefits The amendments to TAS 19 change the accounting for defined benefit plans and termination benefits. The most significant change relates to the accounting for changes in defined benefit obligations and plan assets. The amendments require the recognition of changes in defined benefit obligations and in fair value of plan assets when they occur, and hence eliminate the ‘corridor approach’ permitted under the previous version of TAS 19 and accelerate the recognition of past service costs. The amendments require all actuarial gains and losses to be recognized immediately through other comprehensive income in order for the net pension asset or liability recognized in the consolidated statement of financial position to reflect the full value of the plan deficit or surplus. In 2012, the Group has decided to early adopt the amendments to TAS 19 which is applicable as of 1 January 2013. As of 31 December 2012, all actuarial gains and losses are recognized in other comprehensive income. (b) Standards effective from 1 January 2013 and have no effect on the financial statements of the Group TFRS 7 (Amendments) TAS 16 (Amendments) TAS 32 (Amendments) TAS 34 (Amendments) TAS 12 (Amendments) TFRS 10, TFRS 11 and TFRS 12 (Amendments) TFRS 13 TAS 27 TAS 28 Amendments to TFRSs IFRIC 20 Disclosures – Offsetting Financial Assets and Financial Liabilities Tangible Assets Financial Instruments-Presentation Interim Period Financial Reporting Deferred Tax-Recovery of Underlying Assets Consolidated Financial Statements, Joint Arrangements and Disclosures of Interests in Other Entities: Transition Guide Fair Value Measurement Separate Financial Statements Investments in Associates and Joint Ventures Annual Improvements except for the amendment to TAS 1 Stripping Costs in the Production Phase of a Surface Mine (c) New and Revised Standards and Interpretations not yet effective and have not been early adopted by the Group The Group has not applied the following new and revised standards that have been issued but are not yet effective: TFRS 9 TFRS 9 and TFRS 7 (Amendments) TAS 32 (Amendments) TFRS 10, TFRS 11 and TFRS 27 (Amendments) TAS 36 (Amendments) TAS 39 (Amendments) TFRS Comment 21 Financial Instruments Mandatory Effective Date of TFRS 9 and Transition Disclosures Offsetting Financial Assets and Financial Liabilities Investing Companies Recoverable Value Disclosures for Non-Financial Assets ‘Novation of Derivatives and Continuation of Hedge Accounting’ Fees and Taxes The Group has not determined the potential impact of the application of these standards which will be applicable in 2014 and the following years over its financial statements. The applications of these standards are expected not to have a significant impact on the financial statements. 140 DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 2-BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued) 2.2 Summary of Significant Accounting Policies Related parties For the purpose of these consolidated financial statements, related parties are referred to as legal entities in which Doğan Holding directly or indirectly has participation, including any entities under common control; real persons and/or legal entities that have direct or indirect individual or joint control over the company and their close family members (relatives up to second-degree) and legal entities having direct or indirect individual or joint control by them and legal entities having significant effect over the Company or their key management personnel; Company’s affiliates, subsidiaries and members of the Board of Directors, key management personnel and their close family members (relatives up to second-degree) and real persons and/or legal entities that are directly or indirectly controlled individually or jointly (Note 33). Cash and cash equivalents Cash and cash equivalents are carried at cost in the balance sheet. Cash and cash equivalents comprise cash in hand, bank deposits and highly liquid investments without a significant risk over the change in their value, whose maturity at the time of purchase is three months or less (Note 5). Trade receivables and provision for doubtful receivables The Group’s trade receivables from providing goods or services to customers are carried at net of unrealized finance income. Trade receivables, net of unrealized finance income, are calculated by discounting future cash inflows of receivables carried at the original invoice amount using the effective interest method. Short term receivables with indefinite interest rate are carried at cost unless the effect of imputing interest is significant. Provision is allocated for receivables when the Group has an objective indication over the collectability of the receivables. The amount of the provision is the difference between the carrying amount and the recoverable amount. Recoverable amount is the present value of all cash flows, including amounts recoverable from guarantees and collaterals discounted based on using the original effective interest rate of the trade receivable occurred. Group management considers to book provision for doubtful receivables for the receivables that are in the administrative and/or legal action, without guarantee and collection period that extend over the normal trade operating cycle of the Group. If there is a partial or whole collection over the doubtful receivable amount subsequent to the allocation of provision for doubtful receivables, the collected portion is recognised as income following the write-down of the total provision amount (Note 27). Inventories Inventories are valued at the lower of cost or estimated selling price less estimated costs necessary to make a sale. Cost elements included in inventory are purchase costs and other costs necessary to prepare the asset for its intended use. Cost elements included in inventories are materials, labor and production overheads. The unit cost of inventories is commonly determined on the moving weighted average basis (Note 11). When the net realizable value of inventory is less than cost, the inventory is written down to the net realizable value and the expense is included in the statement of profit or loss in the period the write-down or loss occurred. 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 the changing economic circumstances, the amount of the write-down is reversed. The reversal amount is limited to the amount of the initial impairment. DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT 141 Hızlı Bir Bakış Faaliyetler Sürdürülebilirlik Kurumsal Yönetim Kâr Dağıtımı Finansal Bilgiler DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 2-BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued) 2.2 Summary of Significant Accounting Policies (Continued) Promotion stocks Evaluation of impairment on promotion stocks and in detection of an impairment; evaluation of the impairment amount is carried out by the Group management. In this manner, an inventory impairment amount is set with the rates determined by the Group management by taking the purchase date into consideration. Programme stocks Programme stocks comprise internal and external productions that have been produced but not yet broadcasted as of the report date. Programme stocks are recognised at acquisition or production cost and they are not subject to amortization. These programmes are charged to the statement of profit or loss upon the first transmission and included in cost of sales in the consolidated statement of profit or loss (Note 24). If the estimated income from programme stocks is lower than the carrying value, carrying value is discounted to net realizable value. Licence periods, remaining number of broadcasting right, industry dynamics and sales forecasts are taken into consideration when determining impairment on programme stocks. Financial instruments In accordance with TAS 39, the Group classifies its financial instruments as assets held at fair value through profit or loss, held-to-maturity, available-for-sale and loans and receivables. Classification is determined based on the acquisition purpose and specifications of the financial asset at the initial recognition. All financial assets are recognised at cost including transaction costs in the initial measurement. “Financial assets at fair value through profit or loss” are financial assets that have been acquired principally for the purpose of taking advantage of fluctuations in price and other similar elements or independent from initial recognition financial assets held for trading which are part of a portfolio that has a recent actual pattern of short-term profit-taking. A financial asset is classified in this category if it is primarily acquired for the purpose of selling in the short-term. Financial assets at fair value through profit or loss are initially carried at cost including transaction costs at the balance sheet. Subsequent to recognition, the financial assets are carried at fair value. Realized or unrealized gains and losses are recognized in “financial income/expenses”. Dividends received, are recognized as dividend income in the consolidated statement of profit or loss. Financial assets considered as derivative instruments that are not designated for the purpose of hedging instruments are classified as financial assets at fair value thorough profit or loss. “Held-to-maturity investments” are non-derivative financial assets with fixed or determinable payments that the Group intends and is able to hold to maturity and that do not meet the definition of loans and receivables and are not designated on initial recognition as assets at fair value through profit or loss or as available for sale. Held-to-maturity investments are carried at amortized cost using the effective interest method less impairment, if any. The Group has no held to maturity investments as of 31 December 2013 and 2012. 142 DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 2-BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued) 2.2 Summary of Significant Accounting Policies (Continued) Financial instruments (Continued) The Group’s “available for sale financial assets” comprise of quoted equity instruments and certain debt securities that are traded in an active market and they are measured at fair value. Unrealized gains or losses on an available-for-sale financial asset shall be recognised in equity, through the investments revaluation reserves and comprehensive income, except for impairment losses and foreign exchange gains and losses, until the financial asset is derecognised, at which time the cumulative gain or loss previously recognised in equity shall be recognised in profit or loss. Dividends on available-for-sale equity instruments are recognized in profit or loss when the Group’s right to receive payment is established. Financial assets classified by Doğan Yayın Holding as “available-for-sale financial assets” that do not have any control power or significant effect have no fair value. When fair value cannot be reliably measured as other fair value estimation methods are not applicable; the carrying value of the financial asset is measured at cost less any impairment loss (Note 6). “Loans and Receivables” are financial assets that have fixed or determinable payments and fixed maturity dates and non-derivative financial assets that are not quoted in an active market. Derivative financial instruments Derivative forward instruments, predominantly foreign currency and interest swap agreements and foreign currency forward agreements are initially recognised at their historical costs plus the transaction costs. Derivative financial instruments are subsequently remeasured at their fair value. All derivative financial instruments are classified as financial assets at fair value through profit or loss. Fair values of derivative financial instruments are obtained from quoted market prices or discounted cash flow models as appropriate. Based on positive or negative fair value, derivative financial instruments are carried as assets or liabilities respectively (Note 13). Changes in the fair value of derivatives at fair value through profit or loss are included in the statement of profit or loss. While certain derivatives provide effective hedge relationships, they are recognised as financial assets through profit or loss in accordance with TAS 39 and their fair value gains and losses are reported in the statement of profit or loss. Investment property Investment properties are properties held to earn rentals and/or for capital appreciation. Investment properties are measured initially at cost, including transaction costs. Subsequent to initial recognition, at the end of each year when there is an indication of impairment, investment properties are stated at fair value which reflects the market conditions. Gains or losses arising from changes in the fair values of investment properties are included in the profit or loss in the period in which they arise. As of 31 December 2012, the Group decided to adopt fair value method for their investment properties which were previously accounted under the cost method and restated its financial statements according to TAS 8 as explained in Note 2.1.6 “Significant Accounting Policies and Changes in Accounting Estimates and Errors and Restatement of Previously Reported Financial Statements” DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT 143 Hızlı Bir Bakış Faaliyetler Sürdürülebilirlik Kurumsal Yönetim Kâr Dağıtımı Finansal Bilgiler DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 2-BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued) 2.2 Summary of Significant Accounting Policies (Continued) Investment property (Continued) An investment property is derecognized upon disposal or when the investment property is permanently withdrawn from use and no future economic benefits are expected from disposal. Any gain or loss arising on derecognition of the property is included in profit or loss in the period in which the property is derecognized. Transfers are made to or from investment property only when there is a change in use. For a transfer from investment property to owner occupied property, the deemed cost for subsequent accounting is the fair value at the date of change in use. If owner occupied property becomes an investment property, the Group accounts for such property in accordance with the policy stated under property, plant and equipment up to the date of change in use. The difference between cost value and fair value at the date of the change is recognized as revaluation fund in other comprehensive income. Property, plant and equipment Property, plant and equipment are carried at cost less any accumulated depreciation and any accumulated impairment losses (Note 15). Depreciation is provided on property, plant and equipment on a straight-line basis (except land). Land is not depreciated as it is deemed to have an indefinite useful life. The depreciation periods for property, plant and equipment, which approximate the economic useful lives of such assets, are as follows: Years Land and land improvements Buildings Machinery and equipment Motor vehicles Furniture and fixtures Leasehold improvements 15-50 25-50 3-15 5-10 3-15 2-25 Useful life and depreciation are reviewed regularly and the Group also reviews the consistency of the useful life and depreciation method applied with the economic benefits to be obtained from the underlying assets. Gains or losses on disposals of property, plant and equipment are determined with respect to the difference between collections received and carrying amounts of property, plant and equipment and are included in the related income and expense accounts, as appropriate. Where the carrying amount of an asset is greater than its estimated recoverable amount, it is written down immediately to its recoverable amount provided to allocate provision. The recoverable amount of an asset is the higher of its fair value less costs to sell and its value in use. Fair value less costs to sell is the amount obtainable from the sale of an asset less the costs of disposal. Value in use is the present value of the future cash flows expected to be derived from an asset plus the residual value of the related assets. Repair and maintenance expenses are charged to the consolidated statement of profit or loss at the date they are incurred. Capital expenditures that increase the present value of the future cash flows expected to be derived from property, plant and equipment by increasing its capacity is added to the cost of tangible fixed asset. 144 DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 2-BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued) 2.2 Summary of Significant Accounting Policies (Continued) Financial Leases Leases are classified as finance leases by the Group whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. Assets held under finance leases are recognised as assets of the Group at their fair value at the inception of the lease or, if lower, at the present value of the minimum lease payments. Lease payments are treated as consisting of capital and interest. Principal lease payments are treated as liabilities and reduced with their payments. Interest charges are charged directly against statement of profit or loss over the financial lease period. Assets acquired through finance leases are depreciated over the shorter of expected useful life and the lease term, as well as tangible assets acquired. An operating lease is a lease that does not substantially all the risks and rewards incidental to ownership of an asset. For operating leases, lease payments (net of any incentives received from the lessor) are recognized as an expense on a straight line basis over the lease term under the consolidated statement of profit or loss. Goodwill Goodwill and negative goodwill amount, which represent the difference between the purchase price and the fair value of the acquiree’s net assets, arising from business combinations effected prior to 30 June 2004 in the consolidated financial statements is capitalized and amortized over the useful life by using the straight-line method prior to 31 December 2004. Goodwill arising from business combinations effected subsequent to 31 March 2004 is not amortized and instead reviewed for any impairment losses in accordance with TFRS 3 Business Combinations (Note 16). For the purpose of impairment testing, goodwill is allocated to each of the Group’s cash-generating units expected to benefit from the synergies of the combination. Cash-generating units to which goodwill has been allocated are tested for impairment annually, or more frequently when there is an indication that the unit may be impaired as of the balance sheet dates. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, 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 on the basis of the carrying amount of each asset in the unit. An impairment loss recognised for goodwill is not reversed in a subsequent period. DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT 145 Hızlı Bir Bakış Faaliyetler Sürdürülebilirlik Kurumsal Yönetim Kâr Dağıtımı Finansal Bilgiler DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 2-BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued) 2.2 Summary of Significant Accounting Policies (Continued) Intangible assets and related amortization Intangible assets excluding goodwill and assets with infinite useful lives comprise brand names, customer lists, terrestrial broadcasting permissions and licenses (frequency rights), other identified rights, computer software and television programme rights which are further discussed in Note 2.2. Brand names, customer relationships and domain names are determined based on the independent valuation on business combinations. Useful lives of certain brand names are determined to be infinite. Assets that have infinite useful life are not subject to amortization and are tested for impairment annually (Note 16). Registered subscriber acquisition costs paid by D-smart are capitalized over the subscription commitment period by the Group beginning from 1 January 2012 and capitalized amounts are recognized under intangible assets account. Weighted average term for subscription acquisition costs is 2 years. Intangible assets are carried at cost, less any accumulated amortization and amortized by using the straight-line method (Note 16). Estimated useful lives of intangible assets that have a finite useful life are as follows: Years Trademark Customer lists Computer software and rights Domain names Other intangible rights 20-25 9 – 18 3 – 15 3 – 20 5 Intangible assets with finite useful lives are tested to determine whether there is an indication that the intangible assets may be impaired and if the carrying value of the intangible asset is higher than the recoverable amount, the carrying value of the intangible asset is written down to its recoverable amount provided to allocate provision. The recoverable amount of an intangible asset is the higher of its fair value less costs to sell and its value in use. Provision for impairment is recognized under the statement of profit or loss in the related period. Web page development costs Costs associated with developing web pages are capitalized and amortized by using straight-line method over their estimated useful lives (Note 16). Following the planning phase and operation; all costs are recognised as expense. Maintenance costs of web pages are accounted as operational expenses. Television program rights Television program rights (foreign series, foreign films and Turkish films) are initially recognised at acquisition cost of the license when the Group controls, in substance, the respective assets and the risks and rewards attached to them. Television program rights are evaluated to determine if expected revenues are sufficient to cover the unconsumed portion of the program. To the extent that expected revenues are insufficient, the program rights are written down to their net realizable value. 146 DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 2-BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued) 2.2 Summary of Significant Accounting Policies (Continued) Television program rights (Continued) Consumption is based on the transmission of the expected number of runs (vary from two to unlimited) purchased. Amortization of these rights is determined according to release order and number of runs. The appropriateness of the consumption profiles are reviewed regularly by the management. A maximum of 5 runs is applied for the unlimited run purchases. License periods, remaining number of broadcast rights, industry dynamics and sales forecasts are taken into account when determining the impairment related to television program rights. Impairment of assets excluding goodwill and intangible assets with infinite useful lives At each balance sheet date, the Group evaluates whether there are any indications that an asset other than goodwill or infinite life intangible assets may be impaired. When an indication of impairment exists, carrying value of the assets is compared with the net realizable value which is the higher of value in use and fair value less costs to sell. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). Impairment exists if the carrying value of an asset or a cash generating unit including that asset is greater than its recoverable amount which is the higher of value in use or fair value less costs to sell. Impairment losses are recognised in the consolidated statement of profit or loss. Taxation on income Taxation on income includes current period income taxes and deferred taxes. Current year tax liability consists of tax liability on period income calculated according to currently enacted tax rates and tax legislation in force as of balance sheet date and includes adjustments related to previous year’s tax liabilities. Turkish tax legislation does not permit a parent company to file a consolidated tax return for its subsidiary and its joint venture. Therefore, tax provisions, as reflected in the accompanying consolidated financial statements, have been calculated on a separate-entity basis. Deferred income tax is provided, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying values for financial reporting purposes. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date. Deferred tax liabilities are recognised for all taxable temporary differences, where deferred tax assets resulting from deductible temporary differences are recognised to the extent that it is probable that future taxable profit will be available against which the deductible temporary difference can be utilized (Note 31). Such deferred tax assets and liabilities are not recognized if the temporary difference arises 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 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 related to income taxes levied by the same taxation authority. DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT 147 Hızlı Bir Bakış Faaliyetler Sürdürülebilirlik Kurumsal Yönetim Kâr Dağıtımı Finansal Bilgiler DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 2-BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued) 2.2 Summary of Significant Accounting Policies (Continued) Financial borrowings and borrowing costs Borrowings are recognised initially at the proceeds received, net of transaction costs incurred. Borrowings are subsequently stated at amortized cost using the effective interest method. Any difference between proceeds, net of transaction costs, and the redemption value is recognised in the profit or loss as finance expense over the period of the borrowings (Note 7). The borrowing costs which are directly related with the acquisition, manufacturing or production of a specialty good (means that a long period of time is required to make available for sale and use as purposed) are capitalized as a part of the related asset. The Group does not have any capitalized borrowing costs during the current period. Financial liabilities subject to non-controlling put options Under the terms of certain share purchase agreements, the Group may commit to acquire the interests owned by non-controlling shareholders in consolidated subsidiaries, upon the request of non-controlling interest holders. TAS 32, “Financial Instruments: Disclosure and Presentation” requires the value of such put option to be presented as a financial liability on the balance sheet for the discounted value of the expected exercise price of this option, notwithstanding the ability of the Company to settle part of these obligations with its own shares and not cash. In addition, the share of non-controlling shareholders in the net asset of the company subject to the put option is presented in “other financial liabilities” instead of “non-controlling interests” in the consolidated balance sheet. The Group presents, at initial recognition, the difference between the exercise price of the option and the carrying value of the non-controlling interests first as a reduction of non-controlling interest and then as addition to the Group’s equity. The discount amount and any subsequent change in the fair value of the commitment are recognised in profit or loss as finance income or expense in subsequent periods. Employment termination benefits Under the Turkish Labour Law and Press Labour Law (for employees in the media sector), the Group is required to pay termination benefits to each employee who achieves the retirement age, whose employment is terminated without due cause written in the related laws. The provision for employment termination benefit represents the present value of the estimated total reserves of the future probable liability of the Group arising from the retirement of the employees measured in accordance with the Turkish Labour and Press Labour Laws (Note 20). The Group has decided to early adopt the amendment in TAS 19 (Note 2.1.7) in 2012 which will be effective starting from 1 January 2013, and calculated employment benefit in accordance with the report prepared by the actuarial firm and recognized all actuarial loss and gains in the other comprehensive statement of profit or loss as of 31 December 2012. 148 DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 2-BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued) 2.2 Summary of Significant Accounting Policies (Continued) Provisions, contingent assets and liabilities Provisions are recognised when the Group has a present legal or constructive obligation or a result of past events, it is highly probable that on outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate of the amount of the obligation can be made. Contingent liabilities are assessed continually to determine whether an outflow of resources comprising economic benefits has become probable. If it becomes probable that an outflow of future economic benefits will be required for an item previously dealt with as a contingent liability, a provision is recognised in the financial statements of the period in which the change in probability occurs except in the extremely rare circumstances where no reliable estimate can be made. If it has become virtually certain that an inflow of economic benefits will arise, the asset and the related income are recognised by the Group in the financial statements of the period in which the change occurs. Possible assets or obligations that arise from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group are not included in financial tables and are treated as contingent assets or liabilities. A contingent asset is disclosed where an inflow of economic benefit is probable. When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably. Share capital and dividends Ordinary shares are classified as equity. Dividend income is recognised as income by the Group when right to obtain of dividend is generated in the consolidated financial statements. Dividend distribution to the Company’s shareholders is recognised as a liability in the Group’s consolidated financial statements in the period in which the dividends are approved by the General Assembly. Revenue recognition Revenue is the fair value amount of sales of goods and services received or receivable which resulted from Group’s operations. Net sales represent the invoiced value of goods or services shipped less any trade discounts, rebates and commissions and are presented with the elimination of intercompany balances. Revenue is initially recognized at the fair value of the consideration received or receivable when it can be measured reliably or when there is an inflow of economic benefits. When the arrangement effectively constitutes a financing transaction, the fair value of the consideration is determined by discounting all future receipts using an imputed rate of interest. The imputed rate of interest is a rate of interest that discounts the nominal amount of the instrument to the current cash sales price of the goods or services (Note 24). DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT 149 Hızlı Bir Bakış Faaliyetler Sürdürülebilirlik Kurumsal Yönetim Kâr Dağıtımı Finansal Bilgiler DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 2-BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued) 2.2 Summary of Significant Accounting Policies (Continued) Revenue recognition (Continued) Revenues from television, newspapers, magazines and other advertisements Revenue from advertisements is recognised on an accrual and cut-off basis at the time of broadcasting or printing the advertisement in the related media at the invoiced amounts. The part which is not broadcasted or published yet is recognised as deferred income on the balance sheet. Revenues from newspaper and magazine sales and distribution Revenue from newspaper and magazine sales is recognised on an accrual basis at the time of delivery of the newspapers by the distribution company to the dealer at the invoiced values. Newspaper sales returns and provisions: Provision for newspaper sales returns is accounted at the time of delivery based on past experiences and recent information of sales returns. Returns on magazine sales and provisions: Provision for returns on magazine sales are the provisions provided to reflect the sales income based on matching principle by using statistical data for the previous period, field sales data, etc. when return invoices are not issued although returns are taken off from the market or the issue of magazine period is not expired. Revenues from printing services Revenues from printing arise from printing services given to both Group companies and third parties by using Group’s printing facilities. Related income is recognised on an accrual basis at the time of services given. Other revenues Interest income is recognised on a time proportion basis and income accrual is ascertained by taking effective interest rate and remaining maturity into account. Rent income and other income are recognised on an accrual basis. Barter agreements The Group provides advertising services in return for advertisement and other products and services. When goods or services are exchanged or swapped for goods or services which are of a similar nature and value, the exchange is not regarded as a revenue generating transaction. When goods are sold or services are rendered in exchange for dissimilar goods or services, the exchange is regarded as a revenue generating transaction. Revenue is measured at the fair value of the goods or services received, adjusted by the amount of any cash or cash equivalents transferred. If the fair value of the goods or services received is not measured reliably, the revenue is measured at the fair value of the goods or services supplied, adjusted by the amount of any cash or cash equivalents transferred (Note 19). Barter agreements are recognised on an accrual basis. 150 DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 2-BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued) 2.2 Summary of Significant Accounting Policies (Continued) Business combinations Business combinations are accounted in accordance with TFRS 3. Goodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share of the net identifiable assets of the acquired subsidiary/associate at the date of acquisition. If the purchase amount is less than the fair value of provisions, contingent assets and liabilities, the subjected difference is identified with comprehensive statement of profit or loss. Goodwill recognised in a business combination is not amortized, instead it is tested for impairment annually, or more frequently if events or changes in circumstances indicate that it might be impaired. If the acquisition cost is lower than the fair value of the identifiable assets, liabilities and contingent liabilities acquired, the difference is accounted for as income in the related period (Note 3). There are no business combinations that have significant effect over the financial statements for the period ended 31 December 2013. Gains or losses resulted from sale or purchase of subsidiaries under the control of Doğan Yayın Holding (transactions that do not result in a change in control) are recognised under equity. TAS 27 (Revised) requires ownership decreases or increases which do not result in a change in control to be recorded under equity for accounting periods beginning on or after 1 July 2009. For accounting periods beginning prior to 1 July 2009, the difference resulted in favor of acquisition value in connection with sale or purchase of subsidiaries under the control of the Group which do not result in a change in control was recognised as goodwill. Business combination of entities under common control is not under the scope of TFRS 3 Business Combinations. The Group doesn’t recognize goodwill for these types of transactions. Difference between cash consideration paid as a result of business combination and net asset of the entity is recognized in “Effect of business combinations comprising of entities under common control” account under retained earnings/(accumulated losses) in equity. Foreign currency transactions Functional currency Items included in the financial statements of each Group entity are measured using the currency that best reflects the economic substance of the underlying events and circumstances relevant to that entity. The consolidated financial statements are presented in Turkish Lira, which is the functional currency of Doğan Yayın Holding. Foreign currency transactions and balances Income and expenses arising in foreign currencies have been translated into TL at the exchange rates prevailing at the transaction date. Monetary assets and liabilities denominated in foreign currencies have been translated into TL at the exchange rates prevailing at the balance sheet dates. Exchange gains or losses arising from the settlement and translation of foreign currency items have been included in the consolidated statement of profit or loss. DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT 151 Hızlı Bir Bakış Faaliyetler Sürdürülebilirlik Kurumsal Yönetim Kâr Dağıtımı Finansal Bilgiler DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 2-BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued) 2.2 Summary of Significant Accounting Policies (Continued) Foreign currency transactions (Continued) Foreign Group companies The results of the Group undertakings using a measurement currency other than TL are first translated into Turkish lira by using the average exchange rate for the period. Assets and liabilities of such Group undertakings are translated into TL by using the closing rate at the balance sheet date. Differences arising on retranslation of the opening net assets of such Group undertakings and differences between the average and period-end rates are included in currency translation reserve as a separate item in the shareholders’ equity and recognized under total comprehensive income. A significant portion of the Group’s foreign operations are performed in Russia, Europe and Slovenia (“Russia and Eastern Europe (“EE”)) (Note 4). Foreign currencies and exchange rates at 31 December 2013 and 31 December 2012 are summarized below: Country Euro zone Russia Hungary Croatia Ukraine Romania Kazakhstan Belarus Currency unit Euro Ruble Forint Kuna Grivna New Lei Tenge Belarusian Ruble 31 December 2013 2,9365 0,0652 0,0099 0,3846 0,2670 0,6549 0,0139 0,0002 31 December 2012 2,3517 0,0587 0,0081 0,3113 0,2230 0,5319 0,0118 0,0002 Segment reporting A business segment is a distinguishable component of an enterprise that is engaged in providing products or services and that is subject to risks and returns that are different from those of other business segments and consists of three main segments; “Publishing”, “Broadcasting” and “Other” based on management reporting. A geographical segment is a distinguishable component of an enterprise that is engaged in providing products or services within a particular economic environment and that is subject to risks and returns that are different from those of components operating in other economic environments and consists of three main divisions; “Turkey”, “Europe”, “Russia and EE”. Earning/(loss) per share Earning/(loss) per share stated in the consolidated statement of profit or loss are determined by dividing net income/(loss) by the weighted average number of shares that have been outstanding during the period concerned (Note 32). In Turkey, companies can increase their issued capital by making a pro-rata distribution of shares (“bonus shares”) to existing shareholders from retained earnings. For the purpose of earnings per share computations, such bonus share issuances are regarded as issued shares for all of the periods presented in the financial statements. Accordingly, weighted average number of shares used in earnings per share computations is derived by considering the retrospective effects of the issuances of the shares. 152 DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 2-BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued) 2.2 Summary of Significant Accounting Policies (Continued) Non-current assets held for sale and discontinued operations Assets held for sale are operations that the Group disposes of or classified as available for sale and cash flows which can be treated as a part separately from the Group. Assets classified as held for sale by the Group and discontinued operations, are measured at the lower of the carrying amount of assets and liabilities related to discontinued operations and fair value less costs to sell (Note 36). Discontinued operations are components of an entity that either have been disposed of or represent a major part of an entity separately from the Group’s operations and cash flows. Operating results as of the Group has ceased its control over its disposal groups are presented separately under “discontinued operations” in the consolidated statement of profit or loss. Prior period consolidated statement of profit or loss is adjusted for comparative purposes and the results of discontinued operations are also classified under the “discontinued operations” account. The results of discontinued operations also include profit/(loss) from the related operation’s sale proceed and related tax expenses. Profit/(loss) from the sale proceed is calculated as the difference between the carrying amount of net assets disposed of and sale price. Government grants Government grants are not recognised until there is reasonable assurance that the Group will comply with the conditions attaching to them and that the grants will be received (Note 17). Government grants are recognised in profit or loss on a systematic basis over the periods in which the Group recognizes as expenses the related costs for which the grants are intended to compensate. The Group has received the investment incentive certificate regarding the modernization of its property that is used in its media operations and it is exempt from the Customs Duty and VAT. Subsequent events In the case that events requiring a correction to be made occur subsequent to the balance sheet date, the Group makes the necessary corrections to the financial statements. In the case that events not requiring a correction to be made occur subsequent to the balance sheet date, those events are disclosed in the notes of consolidated financial statements. DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT 153 Hızlı Bir Bakış Faaliyetler Sürdürülebilirlik Kurumsal Yönetim Kâr Dağıtımı Finansal Bilgiler DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 2-BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued) 2.2 Summary of Significant Accounting Policies (Continued) Statement of cash flows In the statement of cash flows, cash flows during the period are classified under operating, investing or financing activities. The cash flows raised from operating activities indicate cash flows due to the Group’s media and other sales operations. The cash flows due to investing activities indicate the Group cash flows that are used for and obtained from investments (investments in property, plant and equipment and financial investments). The cash flows due to financing activities indicate the cash obtained from financial arrangements and used in their repayment. Cash and cash equivalents include cash and bank deposits and the investments that are readily convertible into cash and highly liquid with three months or less to maturity. 2.3 Critical Accounting Estimates and Assumptions 2.3.1 Critical accounting estimates and assumptions a) Estimated impairment of goodwill In accordance with the accounting policy mentioned in Note 2.2, at the end of every year goodwill is annually tested for impairment by the Group. Recoverable amount of cash generating units is measured based on the value in use calculations. The recoverable amount of cash generating units is determined by calculating the amount that would be obtained through sales. These calculations are measured based on estimated cash flows after tax using financial budgets covering a five-year period. EBITDA estimates (budgeted interest, tax, depreciation and amortization, provision for impairment and gross margin before other non-operating expenses) have a significant role in these calculations. The cash flow projections of broadcasting and publishing segments have been prepared covering the years of 2014-2018. The EBITDA margin percentages and discount rates used for the estimated cash flows beyond the 5 year period are as follows: Broadcasting Publishing Russia and Commonwealth of Independent States Turkey (1) (2) Budgeted weighted average of EBITDA margin regarding projection period. Weighted average cost of capital. 154 DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT EBITDA margin (1) Discount rate (2) %27 %13 %40 %11 %13 %15 DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 2-BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued) 2.3 Critical Accounting Estimates and Assumptions (Continued) 2.3.1 Critical accounting estimates and assumptions (Continued) a) Estimated impairment of goodwill (Continued) Hürriyet, one of the subsidiaries of the Group, hasn’t booked any provision for impairment on goodwill in the consolidated financial statements for the year ended 31 December 2013 (31 December 2012: TL 18.106 provision for impairment is booked) (Note 16). When the calculations performed in the current period are evaluated, if the discount rate applied to cash flow projections for the cash-generating units after tax is 1% more than the estimates of the Group management, additional impairment for the goodwill related with TME amounting to TL 25.962 (31 December 2012: TL 51.648 for the goodwill related with TME and intangible assets) would be recognized in the financial statements and profit before tax and non-controlling interests would decrease by TL 25.962 (31 December 2012: TL 51.648) in return. If the EBITDA rate applied to cash flow projections for the cash-generating units is 5% less than the estimates of the Group management, additional impairment for the goodwill amounting to TL 24.142 would be recognized in the financial statements and profit before tax and non-controlling interests would increase by TL 24.142 in return. (b) Vat amount subject to discount within the scope of law no: 6111 As of November 2011, the Group management has considered the VAT principle amounting to TL 454.281 imposed as a consequence of share exchanges and transfers recognized in the Turkish Commercial Code (TCC)/Tax Procedures Law (TPL) accounts of Doğan TV Holding, D Yapım, Doğan Prodüksiyon and Alp Görsel and restructured within the scope of Law no: 6111 in the year 2011 as input VAT through issuance of “recourse VAT invoice” by each entity who transfers the shares to the respective entity, sequentially with the amount of corresponding VAT imposed. In this context, input VAT amounting to TL 145.328, TL 222.662 and TL 86.291 has been recognized in the Turkish Commercial Code (TCC)/Tax Procedures Law (TPL) records of D Yapım, Doğan Prodüksiyon and Alp Görsel, respectively. Based on the nature of the transaction and considering the precautionary principle, the Group management elects not to recognize the input VAT amounting to TL 454.281 as an asset in the consolidated financial statements as it will be used in future tax periods. Accordingly, where practible, input VAT that can be offset against the recourse VAT in the related taxation periods can be recognized in the statement of profit or loss in the respective periods (Note 27). As of 31 December 2013, deductible VAT amounting to TL 449.602 is recognised in the statutory records. DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT 155 Hızlı Bir Bakış Faaliyetler Sürdürülebilirlik Kurumsal Yönetim Kâr Dağıtımı Finansal Bilgiler DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 2-BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued) 2.3 Critical Accounting Estimates, Assumptions and Judgments (Continued) 2.3.1 Critical accounting estimates and assumptions (Continued) c) Probable liabilities related to the share sales agreement signed with Commerz-Film GmbH Estimates and assumptions regarding repurchase commitments given to Axel Springer AG by the Group are described in detail in Note 18. d) Useful lives of intangible assets Useful lives of some trademarks are expected to be infinite by the Group management. Where useful lives of related intangible assets are infinite (in case of 20 years), amortization of such intangible assets’ would increase by TL 13.876 (31 December 2012: TL 13.468) and profit before tax and non-controlling interests would decrease by TL 13.876 (31 December 2012: TL 13.468). Amortization is recognized by the Group considering the useful lives of trademarks, customer lists and internet domain names with definite useful lives disclosed in Note 2.2. If useful lives of trademarks, customer lists and internet domain names differ 10% from the management’s expectations, the effect over the financial statements would be as follows: - if useful lives were 10% higher, amortization would decrease by TL 1.261 and profit before tax and non-controlling interests would increase by TL 1.261 (31 December 2012: TL 1.224); or - if useful lives were 10% lower, amortization would increase by TL 1.542 and profit before tax and non-controlling interests would decrease by TL 1.542 (31 December 2012: TL 2.219). 156 DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 2-BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued) 2.3 Critical Accounting Estimates, Assumptions and Judgments (Continued) 2.3.2 Critical accounting judgments Prepaid phone card (prepaid minutes) sales related with mobile telecommunication services and newspaper and magazine sales (excluding transactions with related parties and newspapers distributed through subscription system) are carried at gross value in the consolidated financial statements by the Group. Management believes that the decision to record revenue gross versus net is a matter of professional judgment that is dependent upon the relevant facts and circumstances. The Group evaluated the following factors and indicators in coming to the conclusion. • The Group has the option to determine the selling price, within the existing economic limitations, • General inventory risk of goods mentioned above belongs to the Group. The Group purchases newspapers and magazines from suppliers and sells them to its dealers through its distribution network. The Group returns unsold newspapers and magazines from dealers to the original supplier. General inventory risk is about approximately a week for newspaper and magazine sales, • The Group has the collection risk associated with the transaction. NOTE 3-BUSINESS COMBINATIONS Current period business combinations In the current period, Group has acquired Doğan İnternet Yayıncılığı ve Yatırım A.Ş., an entity under common control, in consideration of TL 10.928. Difference amounting to TL 7.640 between the cash consideration paid and net assets is recognized under equity. DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT 157 Hızlı Bir Bakış Faaliyetler Sürdürülebilirlik Kurumsal Yönetim Kâr Dağıtımı Finansal Bilgiler DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 3-BUSINESS COMBINATIONS (Continued) Prior period business combinations The details of business combinations for the period ended 31 December 2012 are as follows: Doğan TV Holding – Eko TV Doğan TV Holding has terminated Eko TV joint venture agreement signed with Turner as of 14 June 2012 without any compensation. Following the termination, Eko TV has been accounted as a subsidiary and ceased to be a joint venture of the Group as of 1 July 2013 without any compensation transfer. TFRS 3 requires acquirers to remeasure its previously held equity interest at fair value and recognize the resulting gain or loss, if any, in profit or loss. The Group has completed the remeasurement procedures of Eko TV shares as of 31 December 2012. The details of the remeasurement are summarized below: 30 June 2012 Cash and cash equivalents Current assets Non-current assets Current liabilities 110 16.668 365 (3.222) Group’s share in net assets before acquisition 13.921 Goodwill recognized before acquisition Total carrying amount before remeasurement 33.881 47.802 Total fair value of net assets of Eko TV Group’s ownership rate Fair value of net assets attributed to the Group Decrease in carrying amount after remeasurement recognised as other expense 59.475 %75,04 44.630 3.172 Also, the Group has completed the purchase of 19,98% shares of Eko TV as of 6 September 2012 for a consideration of TL 4.331. After these transactions, the share and voting rights of the Group in Eko TV increased to 95,01%. TL 624 loss as a result of this transaction is journalized under equity since there is no change in controlling party in accordance with TAS 27 (Revised). 158 DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 4-SEGMENT REPORTING The Group has two reporting segments (Geographical & Business) due to diversity of its operations and geographical extensity of its consolidated companies. “Geographical” segment reporting is categorized into “Turkey”, “Europe” and “Russia and EE” based on the intensity of geographical operations and “Business” segment reporting is categorized into “publishing”, “broadcasting”, “retail” and “other” based on the businesses of consolidated entities. a) External revenues: The details of the Group’s external revenues for the periods ended 31 December 2013 and 2012 by business and geographical segments are follows: Turkey 1 January – 31 December 2013 Russia Europe and EE Total Publishing Broadcasting Other 1.095.472 1.047.711 54.438 57.952 84.730 - 183.270 - 1.336.694 1.132.441 54.438 Total 2.197.621 142.682 183.270 2.523.573 1 January – 31 December 2012 Russia Europe and EE Total Turkey Publishing Broadcasting Other 1.100.138 961.743 55.655 50.280 107.856 - 184.651 - 1.335.069 1.069.599 55.655 Total 2.117.536 158.136 184.651 2.460.323 As explained in Note 2.3.2 “Critical accounting judgments”, the Group presents sales of prepaid phone cards and newspaper and magazine at gross. The prepaid phone card sales (other segment) and newspaper and magazine sales (publishing segment) for the fiscal year ended 31 December 2013 amounted to TL 39.471 (31 December 2012: TL 45.282) and TL 214.943 (31 December 2012: TL 183.367), respectively. DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT 159 Hızlı Bir Bakış Faaliyetler Sürdürülebilirlik Kurumsal Yönetim Kâr Dağıtımı Finansal Bilgiler DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 4-SEGMENT REPORTING (Continued) b) Segmental analysis for the period 1 January – 31 December 2013 The segmental analysis for the continued operations of the Group is as follows: Publishing Broadcasting Other Intersegment eliminations Total External revenues (Note 24) Inter segment revenues 1.336.694 32.506 1.132.441 19.179 54.438 2.376 - 2.523.573 54.061 Total revenues 1.369.200 1.151.620 56.814 - 2.577.634 External revenues (Note 24) Inter segment revenues 1.336.694 32.506 1.132.441 19.179 54.438 2.376 (54.061) 2.523.573 - Sales Cost of sales (-) (1) 1.369.200 (971.027) 1.151.620 (890.890) 56.814 (38.272) (54.061) 29.584 2.523.573 (1.870.605) Gross profit/(loss) 398.173 260.730 18.542 (24.477) 652.968 (194.977) (194.266) (141.197) (116.512) (15.891) 19.068 4.454 (317.106) (322.215) 80.249 (10.820) 4.301 (2.328) 71.402 2.419 91.598 (226) (8.025) 6.952 (3.283) 2.193 87.242 708 48.722 472 - 49.902 92.306 40.697 7.424 (3.283) 137.144 Finance income/(expenses), net (118.607) (177.759) (52.839) 3.639 (345.566) Profit/(loss) before income taxes from continued operations (26.301) (137.062) (45.415) 356 (208.422) Income tax expense Deferred tax income/(expense) (13.503) 11.918 (33.060) 6.075 (1.595) 10.347 - (48.158) 28.340 Profit/(loss) for the period (27.886) (164.047) (36.663) 356 (228.240) Marketing expenses General administrative expenses Other income/(expenses) from operating activities, net Share of gain/(loss) on investments accounted for by using the equity method Operating (loss)/profit Income/(expenses) from investing activities, net Operating profit/loss before finance income and expenses (1) Cost of sales and segment information differ as the effect of intra-segment adjustments are presented at gross amounts (Note 24). 160 DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 4-SEGMENT REPORTING (Continued) b) Segmental analysis for the period 1 January – 31 December 2012 The segmental analysis for the continued operations of the Group is as follows: Publishing Broadcasting Other Intersegment eliminations Total External revenues (Note 24) Inter segment revenues 1.335.069 55.764 1.069.599 20.437 55.655 4.748 - 2.460.323 80.949 Total revenues 1.390.833 1.090.036 60.403 - 2.541.272 External revenues (Note 24) Inter segment revenues 1.335.069 55.764 1.069.599 20.437 55.655 4.748 (80.949) 2.460.323 - Sales Cost of sales (-) (1) 1.390.833 (973.835) 1.090.036 (771.182) 60.403 (43.861) (80.949) 53.284 2.460.323 (1.735.594) Gross profit/(loss) 416.998 318.854 16.542 (27.665) 724.729 (186.378) (181.375) (103.454) (105.174) (28.924) 21.300 5.098 (268.532) (310.375) 75.918 6.871 5.428 (4.061) 84.156 1.335 (297) (332) - 706 Operating (loss)/profit 126.498 116.800 (7.286) (5.328) 230.684 Income/(expenses) from investing activities, net 153.257 26.486 11.461 - 191.204 Operating profit/(loss) before finance income and expenses 279.755 143.286 4.175 (5.328) 421.888 Finance income/(expenses), net (79.019) (7.506) (17.899) 5.164 (99.260) Profit/(loss) before income taxes from continued operations 200.736 135.780 (13.724) (164) 322.628 Income tax expense Deferred tax income/(expense) (30.695) 5.932 (46.744) 14.923 (1.138) 10.594 - (78.577) 31.449 Profit/(loss) for the period 175.973 103.959 (4.268) (164) 275.500 DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT 161 Marketing expenses General administrative expenses Other income/(expenses) from operating activities, net Share of gain/(loss) on investments accounted for by using the equity method (1) Cost of sales and segment information differ as the effect of intra-segment adjustments are presented at gross amounts (Note 24). Hızlı Bir Bakış Faaliyetler Sürdürülebilirlik Kurumsal Yönetim Kâr Dağıtımı Finansal Bilgiler DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 4-SEGMENT REPORTING (Continued) c) Segment assets: The details of segment assets in terms of business and geographical segments at 31 December 2013 and 31 December 2012 are as follows: Analysis according to business segments: 31 December 2013 31 December 2012 Publishing Broadcasting Other 1.758.992 1.276.501 129.870 1.767.748 1.500.953 93.163 Segment Assets (1) 3.165.363 3.361.864 31.883 648.918 (58.234) 32.932 563.557 (40.351) 3.787.930 3.918.002 31 December 2013 31 December 2012 Turkey Europe Russia and EE 2.236.880 231.041 702.010 2.532.280 179.417 646.309 Segment Assets (1) 3.169.931 3.358.006 31.883 648.918 (62.802) 32.932 563.557 (36.493) 3.787.930 3.918.002 Investments accounted by using the equity method (Note 12) Unallocated assets Less: intersegment eliminations and reclassifications Total assets Analysis according to geographical segments: Investments accounted by using the equity method Unallocated assets Less: intersegment eliminations and reclassifications Total assets Segment assets mainly comprise of operating assets. The group’s assets other than segment assets comprise of cash and cash equivalents (Note 5), short-term financial investments (Note 6) and deferred tax assets (Note 31). (1) 162 DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 4-SEGMENT REPORTING (Continued) d) Segment liabilities: The analysis of segment liabilities in terms of business and geographical segments at 31 December 2013 and 31 December 2012 is as follows: Analysis according to business segments: 31 December 2013 31 December 2012 Publishing Broadcasting Other 349.755 358.759 7.479 297.881 261.056 25.926 Segment Liabilities (1) 715.993 584.863 Unallocated liabilities Less: intersegment eliminations and reclassifications 1.619.133 (39.916) 1.954.173 (37.858) Total liabilities 2.295.210 2.501.178 31 December 2013 31 December 2012 Turkey Europe Russia and EE 583.101 120.685 35.092 465.129 110.215 23.050 Segment Liabilities (1) 738.878 598.394 Unallocated liabilities Less: intersegment eliminations and reclassifications 1.619.133 (62.801) 1.954.173 (51.389) Total liabilities 2.295.210 2.501.178 Analysis according to geographical segments The Group’s liabilities excluding reportable segment liabilities comprise of short and long term borrowings (Note 7), net income for the period, income tax payable and deferred tax liability (Note 31). (1) DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT 163 Hızlı Bir Bakış Faaliyetler Sürdürülebilirlik Kurumsal Yönetim Kâr Dağıtımı Finansal Bilgiler DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 4-SEGMENT REPORTING (Continued) e) Purchases of tangible and intangible assets and investment properties and depreciation and amortization charges: The analysis of depreciation and amortization charges in terms of business and geographical segments for the periods ended 31 December 2013 and 2012 is as follows: Analysis according to business segments: 1 January31 December 2013 1 January31 December 2012 Publishing Broadcasting Other 82.954 122.714 1.063 80.514 95.574 2.175 Total 206.731 178.263 1 January31 December 2013 1 January31 December 2012 Turkey Europe Russia and Slovenia 160.039 16.100 30.592 133.290 31.276 13.697 Total 206.731 178.263 Analysis according to geographic segments: The analysis of capital expenditure (acquisition of tangible and intangible assets) in terms of business and geographical segments for the periods ended 31 December 2013 and 2012 is as follows: Analysis according to business segments: 1 January31 December 2013 1 January31 December 2012 Publishing Broadcasting Other 31.560 204.925 114 96.927 180.783 267 Total 236.599 277.977 1 January- 1 January- 31 December 2013 216.628 14.286 5.685 31 December 2012 259.268 9.526 9.183 236.599 277.977 Analysis according to geographic segments: Turkey Europe Russia and Slovenia Total 164 DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 4-SEGMENT REPORTING (Continued) f) Other non-cash expenses, (net): The analysis of other non-cash expenses, (net), in terms of business segments for the periods ended 31 December 2013 and 2012 is as follows: 1 January – 31 December 2013 Publishing Broadcasting Other Total Provision for trade doubtful receivables (Note 9) Interest expense accruals Provision for employment termination benefits (Note 20) Change in fair value of derivative instruments (Note 9) Provision for unused vacation liability (Note 20) Provision for impairment on intangible assets (Note 16) Provision for lawsuits (Note 18) Provision for impairment on inventories (Note 11) 12.510 16.785 10.309 3.014 10.258 1.975 643 20.986 41.137 4.372 (2.215) 1.151 610 4.529 705 272 146 (48) - 33.496 58.194 14.827 799 11.361 610 6.504 1.348 Total 55.494 71.275 370 127.139 1 January – 31 December 2012 Publishing Broadcasting Other Total Provision for trade doubtful receivables (Note 9) Provision for impairment on goodwill (Note 16) Interest expense accruals Provision for employment termination benefits (Note 20) Provision for lawsuits (Note 18) Provision for unused vacation liability (Note 20) Provision for impairment on intangible assets (Note 16) Provision for impairment on inventories (Note 11) 12.214 18.106 7.203 10.297 3.127 4.597 243 25.670 3.172 7.045 2.157 6.632 3.292 1.868 1.048 102 40 86 476 (696) 37.986 21.278 14.288 12.540 9.759 8.365 1.868 595 Total 55.787 50.884 8 106.679 DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT 165 Hızlı Bir Bakış Faaliyetler Sürdürülebilirlik Kurumsal Yönetim Kâr Dağıtımı Finansal Bilgiler DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 5-CASH AND CASH EQUIVALENTS The details of cash and cash equivalents at 31 December 2013 and 31 December 2012 are as follows: 31 December 2013 31 December 2012 Cash Banks -Time deposits -Demand deposits Other cash and cash equivalents 1.313 1.538 446.898 53.474 29.512 396.928 47.391 31.742 Total 531.197 477.599 31 December 2013 31 December 2012 Demand Up to 3 months 84.299 446.898 80.671 396.928 Total 531.197 477.599 The maturity analysis of cash and cash equivalents at 31 December 2013 and 31 December 2012 is as follows: The time deposits of the Group are mainly composed of USD, EUR and TL and the effective interest rates of USD, EUR and TL denominated time deposits are between 0,35% and 4,27% (31 December 2012: 0,10% and 5,35%), 0,20% and 2,50% (31 December 2012: 0,25% and 3,45%) and 6,50% and 9,15% (31 December 2012: 5,00% and 12,30%), respectively. Cash and cash equivalents amounting to TL 28.870 (31 December 2012: TL 30.924) at 31 December 2013 comprise of credit card slip receivables and TL 642 (31 December 2012: TL 818) of blocked deposits. Cash and cash equivalents disclosed in the consolidated statements of cash flows for the periods 31 December 2013, 31 December 2012 and 31 December 2011 are as follows: 31 December 2013 31 December 2012 31 December 2011 Cash and cash equivalents Less: accrued interest 531.197 (326) 477.599 (18.963) 1.049.295 (1.275) Cash and cash equivalents 530.871 458.636 1.048.020 166 DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 6-FINANCIAL INVESTMENTS The Group doesn’t have short term financial investments as of 31 December 2013 and 31 December 2012. The details of long-term financial investments at 31 December 2013 and 31 December 2012 are as follows: Long-term financial investments: Anten Teknik Hizmetler ve Verici Tesis İşletme Anonim Şirketi Coats İplik Sanayi Anonim Şirketi B2C Prodüksiyon Bilişim ve Emlak Danışmanlığı Sanayi Ticaret A.Ş. Hür Servis Sosyal Hizmetler ve Ticaret A.Ş. Other Total 31 December 2013 Share % 31 December 2012 Share % 800 258 150 62 <1 <1 <1 <1 <1 787 258 150 118 182 <1 <1 <1 <1 <1 1.270 1.495 NOTE 7 – FINANCIAL BORROWINGS The details of financial borrowings at 31 December 2013 and 31 December 2012 are as follows: Short-term financial borrowings: 31 December 2013 31 December 2012 Short term bank borrowings Interest bearing payables to suppliers Finance lease borrowings 481.218 6.436 10.251 686.437 34.193 8.195 Total 497.905 728.825 31 December 2013 31 December 2012 Short-term portion of long-term bank borrowings 424.957 292.171 Total 424.957 292.171 31 December 2013 31 December 2012 Long term bank borrowings Interest bearing payables to suppliers Finance lease borrowings 550.885 4.693 8.390 563.186 6.929 14.488 Total 563.968 584.603 Short-term portion of long-term bank borrowings: Long-term financial borrowings: DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT 167 168 DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT Total long-term bank borrowings 100.000 160.500 36.891 550.885 100.000 342.555 108.330 11,20-11,20 4,46-6,25 3,25-5,71 1.798 397.837 25.322 424.957 107.504 291.567 82.147 481.218 TL Long-term bank borrowings: TL denominated bank borrowings USD denominated bank borrowings EUR denominated bank borrowings 1.798 186.401 8.623 107.504 136.610 27.975 31 December 2013 Original foreign currency 906.175 11,20 – 11,20 3,00-6,45 3,25-5,71 0 – 10,30 3,25 – 5,45 3,50 – 5,08 Interest rate per annum (%) Total short-term bank borrowings Short-term portion of long-term bank borrowings: TL denominated bank borrowings USD denominated bank borrowings EUR denominated bank borrowings Sub-total Short-term bank borrowings TL denominated bank borrowings USD denominated bank borrowings EUR denominated bank borrowings Sub-total Details of the bank borrowings as of 31 December 2013 and 31 December 2012 are as follows: NOTE 7-FINANCIAL BORROWINGS (Continued) (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES 4,13-6,12 1,80-5,11 2,65-5,85 1,33-5,11 5,75-10,40 4,45-6,40 4,50-5,78 Interest rate per annum (%) 297.534 13.947 146.284 13.354 169.850 255.025 26.355 31 December 2012 Original foreign currency 563.186 530.386 32.800 978.608 260.766 31.405 292.171 169.850 454.608 61.979 686.437 TL Hızlı Bir Bakış Faaliyetler Sürdürülebilirlik Kurumsal Yönetim Kâr Dağıtımı Finansal Bilgiler DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 7-FINANCIAL BORROWINGS (Continued) The redemption schedule of long-term bank borrowings is as follows: 31 December 2013 31 December 2012 2014 2015 2016 2017 and after 258.107 291.075 1.703 458.195 102.181 1.489 1.321 Total 550.885 563.186 Remaining time to repricing date of bank borrowings determined according to contract at 31 December 2013 and 31 December 2012 is as follows: 31 December 2013 31 December 2012 Up to 6 months 6 to 12 months 1 to 5 years 1.455.533 1.351 176 1.540.406 1.388 - Total 1.457.060 1.541.794 Carrying value of the financial borrowings is considered to approximate their fair value since discount effect is not material. Group borrows loans on fixed and floating interest rates. At 31 December 2013, bank borrowings with floating interest rates amounted to TL 568.362 (31 December 2012: TL 1.147.628). As of 31 December 2013, the floating rate bank borrowings denominated in USD of the Group, have interest rates fluctuating between 3 months Libor+2,00 and 6 months Libor+3,60 (31 December 2012: Between 3 months Libor+2,4 and 6 months Libor+4,25). Commitments and financial terms about borrowings OOO Pronto Moscow, one of the indirect subsidiaries of the Group, has restructured its bank loan classified under the short-term portion of long-term financial liabilities as of 31 December 2013 and 31 December 2012 amounting to USD 70.000 with a maturity date of April 2014. The maturity of the related loan has been extended in December 2013 to 20 April 2015 using the one year extension option in the contract. Also, interest rate applied has decreased to 6,25% from 6,40% as of 31 December 2012. Deposit amounting to USD 70.000 has been blocked as collateral in accordance with the loan agreement of Doğan Holding. DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT 169 Hızlı Bir Bakış Faaliyetler Sürdürülebilirlik Kurumsal Yönetim Kâr Dağıtımı Finansal Bilgiler DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 7-FINANCIAL BORROWINGS (Continued) Financial borrowings related with options Doğan Gazetecilik’s, one of the subsidiaries of Doğan Yayın Holding, 22.000.000 shares each having par value of TL 1, which correspond to 22% of Doğan Gazetecilik’s issued capital amounting to TL 78.000, are sold to Deutsche Bank AG during the capital raise to TL 100.000 on 19 November 2007 in the ISE Wholesale Market in consideration of USD 4,0 (exact) per share (initial price) (TL 4,73 (exact)), by putting a restriction over the existing shareholders’ share purchase rights. There are put and call option agreements between Doğan Yayın Holding and Deutsche Bank AG upon the shares of Doğan Gazetecilik. According to the call option agreement, Doğan Yayın Holding has the call option from Deutsche Bank AG for 21.945.000 shares of Doğan Gazetecilik, and according to the put option agreement, Deutsche Bank AG has the put option to Doğan Yayın Holding for 23.100.000 shares of Doğan Gazetecilik. Since Doğan Yayın Holding has a liability of giving another entity cash or another financial asset (in the case the put option is exercised by Deutsche Bank AG) as a result of the put option agreement mentioned above, USD 88.000 is presented as a financial liability in the consolidated financial statements as of 31 December 2012. As per the put option agreement, the put option exercise price is calculated by considering the initial price and the interest rate of 6,46%. Maturities of both agreements are 5 years 3 months and both of them ended at 19 February 2013. As of 20 February 2013, Deutsche Bank AG has used its “call” option right and sold 22% shares of Doğan Gazetecilik to Doğan Yayın Holding in consideration of USD 122.323. In this regard, Doğan Yayın Holding has no outstanding liability as of 31 December 2013. Share pledges As of 31 December 2013, 15% shares of Doğan Yayın Holding (300.000.000 (exact) shares), 20,87% shares of Kanal D (10.747.548 (exact) shares) were given as pledges to financial institutions in respect of the long-term financial borrowings of the Group. Deutsche Bank AG has used its “call” option right as of 19 February 2013 and sold 22% shares of Doğan Gazetecilik to Doğan Yayın Holding in consideration of USD 122.323 and as a result of this transaction, pledge transaction regarding 11,3% shares of Doğan Yayın Holding (226.354.060 (exact) shares) and 13,3% shares of Hürriyet (73.200.000 (exact) shares) have been removed. In addition, 67,3% shares of TME (33.649.091 (exact) shares) have been removed as a result of full payment of participation loan borrowed as at 4 January 2013 in relation to the acquisition of TME. 170 DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 7-FINANCIAL BORROWINGS (Continued) Finance lease borrowings The Group acquired property, plant and equipment through finance leases. As of 31 December 2013, total short and long-term lease payment commitments of the Group relating to such lease agreements amount to TL 18.641 (31 December 2012: TL 22.683). The redemption schedule of long-term financial lease borrowings at 31 December 2013 and 31 December 2012 is as follows: Long-term financial lease liabilities: 31 December 2013 31 December 2012 2014 2015 and after 8.390 8.130 6.358 Total 8.390 14.488 Interest bearing payables to suppliers Interest bearing payables to suppliers are related to the machinery and equipment purchases of Hürriyet, one of the subsidiaries of Doğan Yayın Holding. Interest rates of these short and long-term payables in EUR is 1,60% (31 December 2012: EUR 1,22%). The maturity analysis of long-term interest bearing payables to suppliers at 31 December 2013 and 31 December 2012 is as follows: 2014 2015 and after Total 31 December 2013 31 December 2012 4.693 4.693 5.146 1.783 6.929 The Group’s short-term and long-term financial borrowings to suppliers issued at variable interest rates are amounting to TL 6.436 (31 December 2012: TL 34.193) and TL 2.226 (31 December 2012: TL 6.929), and long-term financial borrowings issued at fixed interest rates is amounting to TL 2.467 TL (31 December 2012: None) respectively as of 31 December 2013. DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT 171 Hızlı Bir Bakış Faaliyetler Sürdürülebilirlik Kurumsal Yönetim Kâr Dağıtımı Finansal Bilgiler DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 7-FINANCIAL BORROWINGS (Continued) The exposure of the Group’s long-term financial borrowings to suppliers to interest rate changes and the contractual repricing dates are as follows: 6 months and less 1 to 5 years Total 31 December 2013 31 December 2012 8.662 2.467 11.129 41.122 41.122 The fair values of short-term and long-term financial borrowings to suppliers are considered to approximate their carrying values as the effect of discount is not material. Allocation of financial borrowings with fixed and floating interest rates of the Group as of 31 December 2013 and 31 December 2012 are as follows: Loans with fixed interest rates Loans with floating interest rates Total 31 December 2013 31 December 2012 907.339 568.362 416.849 1.147.628 1.475.701 1.564.477 NOTE 8-OTHER FINANCIAL LIABILITIES The details of other short term financial liabilities, which are further discussed in Note 18 related with call options at 31 December 2013 and 31 December 2012, are as follows: Financial liabilities due to put options (Note 18) Financial borrowings related with options Total 31 December 2013 31 December 2012 16.155 16.155 18.207 216.190 234.397 Put options Oglasnik d.o.o Option Hürriyet, a subsidiary of the Group, has granted a put option, on the 30% shares outstanding during the acquisition of 70% interest of the shares in its subsidiary, Oglasnik d.o.o in Croatia. Discussions concerning the use of this option as of the reporting date of these financial statements are still ongoing. As of 31 December 2013, the fair value of the option is calculated as TL 16.155 and classified in “Other short-term financial liabilities” (31 December 2012: TL 18.207) (Note 8). There is a dispute on the protocol between the contract parties and an arbitration process is in progress in the presence of Zagreb Court of Arbitration. A determination of the validity of the option contract lawsuit has been filed against the Group by the non-controlling interest shareholders regarding the fact that they couldn’t exercise the put option. An alternative compensation has been claimed with the lawsuit with amount of EUR 3,5 million+default interest. The third trial was made on July 3, 2013 and the arbitration process is still ongoing as of the reporting date. 172 DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 9-TRADE RECEIVABLES AND PAYABLES The details of trade receivables and payables at 31 December 2013 and 31 December 2012 are as follows: Short-term trade receivables 31 December 2013 31 December 2012 Trade receivables Notes and cheques receivable Income accruals Other 902.551 18.511 5.529 1.588 821.220 24.689 6.119 2.011 928.179 (5.426) (209.991) 854.039 (4.533) (195.755) 712.762 653.751 Sub-total Less: unearned financial income due to sales with maturity Less: provision for doubtful receivables Total In the publishing segment of the Group, the average maturity of not overdue trade receivables and that are followed by Doğan Faktoring is between 67 to 96 days as of the balance sheet date (31 December 2012: 70-98 days). In the broadcasting segment of the Group, the average maturity of not overdue trade receivables is 101 days as of the balance sheet date (31 December 2012: 92 days). Discount rate of trade receivables calculated as annual simple is 12,01% (31 December 2012: 10,03%). Unearned finance income due to sales with maturity of the above-mentioned trade receivables of the Group amounts to TL 5.426 (31 December 2012: TL 4.533) and 12,01% annual compound interest rate is applied (31 December 2012: 10,03%). The movements of provision for doubtful receivables for the periods ended 31 December 2013 and 2012 are as follows: 2013 2012 1 January Provision booked in the current period (Note 4, 27) Acquisition of subsidiary Receivables written-off Collections Disposal of subsidiary Currency translation differences (195.755) (34.434) (2.776) 938 16.350 4.414 1.272 (173.164) (37.986) (306) 14.933 684 84 31 December (209.991) (195.755) Guarantees for trade receivables As of 31 December 2013, trade receivables of TL 173.985 (31 December 2012: TL 130.847) were past due but not impaired. The Group does not foresee any collection risk for these overdue receivables due to sector dynamics and circumstances (Note 34). As of 31 December 2013, the Group has letters of guarantee, guarantee notes, guarantee cheques and mortgages amounting to TL 42.095 (31 December 2012: TL 40.271) related to trade receivables amounting to TL 712.762 (31 December 2012: TL 653.751) (Note 34). DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT 173 Hızlı Bir Bakış Faaliyetler Sürdürülebilirlik Kurumsal Yönetim Kâr Dağıtımı Finansal Bilgiler DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 9-TRADE RECEIVABLES AND PAYABLES (Continued) Guarantees for trade receivables (Continued) The guarantees received for the total trade receivables of the Group amounting to TL 712.762 as of 31 December 2013 (31 December 2012: TL 653.751) consist of bank guarantee letter amounting to TL 1.623 (31 December 2012: TL 1.823), bails and mortgages amounting to TL 31.650 (31 December 2012: TL 33.992) and cheques and bonds amounting to TL 8.822 (31 December 2012: TL 4.456). Bank guarantee letter amounting to TL 1.344, bails and mortgages amounting to TL 19.552 and cheques and bonds amounting to TL 7.487 are received for the past due but not impaired receivables (31 December 2012: bank guarantee letters amounting to TL 193, bails and mortgages amounting to TL 17.403, cheques and bonds amounting to TL 3.157) (Note 34). Short-term trade payables: 31 December 2013 31 December 2012 Trade payables Expense accruals Provision for broadcasted programmes Notes and cheques payables Other payables Less: deferred financial expense due to purchases with maturity 260.064 54.551 2.237 3.733 603 (515) 237.885 13.815 1.076 6.637 265 (80) Total 320.673 259.598 The average maturity of not overdue trade payables is between 45 to 59 days as of 31 December 2013 (31 December 2012: 35 to 58 days). 174 DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 10-OTHER RECEIVABLES AND PAYABLES The details of other receivables and payables at 31 December 2013 and 31 December 2012 are as follows: Other current receivables: 31 December 2013 31 December 2012 Notes receivables (1) (2) (3) Deposits and guarantees given 105.020 2.040 417.212 1.516 Total 107.060 418.728 31 December 2013 31 December 2012 Notes receivables (1) (3) (4) Deposits and guarantees given 11.456 2.980 95.557 1.589 Total 14.436 97.146 Other non-current receivables: TL 31.443 (31 December 2012: TL 26.681) of short-term notes receivables and TL 10.243 (31 December 2012: TL 32.318) of long-term notes receivables are composed from the sales of shares of Bağımsız Gazeteciler and all Milliyet brand, royalties and internet domain names to DK Gazetecilik ve Yayıncılık A.Ş at 2 May 2011. Notes receivables are shown at discounted amounts. The discount amount as of 31 December 2013 is TL 543 (31 December 2012: TL 734). TL 313.738 (USD 176 million) of short term notes receivables as of 31 December 2012 consists of the receivables from Doğuş Yayın Grubu regarding the sale of shares of Işıl Televizyonculuk Yayıncılık A.Ş (Star TV) as of 3 November, 2011. Doğuş Holding A.Ş. has become the guarantor for the related receivable. Receivable with maturity date of 2 November 2013 resulting from the transfer of shares of Işıl Televizyon Yayıncılık A.Ş. (Star TV) as of 3 November 2011 to Doğuş Yayın Grubu companies has been collected as of 4 November 2013. Hürriyet, a subsidiary of the Group, sold the properties that consist of 58.609,45 m2 land and buildings, including the building that has been used as company headquarters for 28 years (Hürriyet Media Towers) in Bağcılar, Istanbul in 2012 to Nurol Gayrimenkul Yatırım Ortaklığı in consideration of USD 127.500 (TL 225.994), excluding late interest. USD 17.500 of the consideration was paid in cash and the remaining portion which amounts to USD 110.000 is payable in 32 equal installments as of 6 March 2012 by applying 3,5% interest rate for the remaining installment portions. As of 31 December 2013, USD 34.375 (TL 73.367) of the related consideration is recognized as short-term notes receivables and cheques in the accompanying consolidated financial statements (31 December 2012: USD 34.375 (TL 61.277)). Interest amount that is collectible in relation to principal amount is USD 6.396. USD 2.014 (TL 3.570) of the related amount, excluding VAT, has been collected and is recognized as finance income in the accompanying financial statements in the current period. Interest accrual calculated by using the effective interest rate in the current period amounts to USD 99 (TL 210) and is recognized as short-term notes receivables and cheques and finance income in the accompanying financial statements. Long-term notes receivable amounting to TL 1.213 (31 December 2012: TL 1.962) consist of the notes receivables of other subsidiaries. (1) (2) (3) (4) Other current payables: 31 December 2013 31 December 2012 Taxes and funds payable Deposits and guarantees received Other 42.871 472 1.862 41.736 702 199 Total 45.205 42.637 DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT 175 Hızlı Bir Bakış Faaliyetler Sürdürülebilirlik Kurumsal Yönetim Kâr Dağıtımı Finansal Bilgiler DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 10-OTHER RECEIVABLES AND PAYABLES (Continued) Other non-current payables: 31 December 2013 31 December 2012 Deposits and guarantees received Other non-current liabilities 13.535 661 13.032 281 Total 14.196 13.313 31 December 2013 31 December 2012 70.928 44.057 5.037 5.345 228 64.776 33.267 9.907 7.625 472 125.595 116.047 (7.283) (5.935) 118.312 110.112 NOTE 11-INVENTORIES The details of inventories at 31 December 2013 and 31 December 2012 are as follows: Raw materials and supplies Finished goods and merchandise (1) Promotion stocks Semi-finished goods Other Sub-total Less: provision for impairment on inventories Total (1) TL 26.065 (31 December 2012: TL 35.720) of finished goods and merchandise is comprised of dvd and vcd’s produced by companies in the broadcasting segment and satellite receivers and smart cards purchased. The promotion stocks comprise books, cd, dvd and electronic training materials sold together with newspapers. Evaluation of impairment on promotion stocks and in detection of an impairment; evaluation of the impairment amount is carried out by the Group management. In this manner, an inventory impairment amount is set with the rates determined by the management by taking the purchase date into consideration. Movement of provision for impairment on inventory 1 January31 December 2013 1 January31 December 2012 1 January Provision booked in the current period Reversal of provision in the current period (5.935) (1.881) 533 (5.340) (3.590) 2.995 31 December (7.283) (5.935) 176 DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 12-INVESTMENTS ACCOUNTED FOR BY THE EQUITY METHOD As of 31 December 2013 and 31 December 2012, currents assets, non-current assets, current and non-current liabilities and equity attributable to Doğan Yayın Holding of the joint ventures consolidated by using the equity method in accordance with TFRS 11 in the consolidated financial statements, are as follows: Joint ventures Doğan Burda Dergi Yayıncılık ve Pazarlama A.Ş. (“Doğan Burda”) Doğan ve Egmont Yayıncılık ve Yapımcılık Ticaret A.Ş. (“Doğan Egmont”) Dergi Pazarlama Planlama ve Ticaret A.Ş. (“DPP”) Ultra Kablolu Televizyon ve Telekomünikasyon Sanayi ve Ticaret A.Ş. (“Ultra Kablolu”) Katalog Yayın ve Tanıtım Hizmetleri A.Ş. (“Katalog”) ASPM Holding B.V. Registered country Geographic segment Nature of business Joint venture partner Turkey Turkey Burda GmbH Turkey Turkey Magazine publishing Book and magazine publishing Turkey Turkey Planning Burda GmbH Turkey Turkey Telecommunication Koç Holding A.Ş. Turkey Netherlands Turkey Europe Guide publishing Investment Seat Pagine Gialle SPA Autoscout24 GmBH Egmont Joint ventures and the subsidiary and effective interest rates of Doğan Yayın Holding and its subsidiaries at 31 December 2013 and 31 December 2012 are summarized as follows: Joint-ventures Doğan Burda Doğan Egmont DPP DB Popüler (1) Ultra Kablolu (2) Birey İK (3) Katalog (4) Tipeez (5) ASPM Holding B.V. OOO Autoscout24(6) Doğan Yayın Holding and its subsidiaries (%) 31 December 31 December 2013 2012 44,89 50,00 46,00 50,00 50,00 37,88 37,88 44,89 50,00 46,00 44,87 50,00 50,00 50,00 30,00 37,88 37,88 Proportion of effective interest (%) 31 December 31 December 2013 2012 44,89 50,00 46,00 50,00 50,00 25,22 25,21 44,89 50,00 45,97 44,87 50,00 46,38 50,00 19,97 25,21 25,21 Liquidation process of the related company has been completed as of 3 December 2013. Operations have been terminated as of November, 2006. The company is included in scope of consolidation. (3) The Company has merged with Doğan Gazetecilik İnternet as of 27 September 2013. (4) Operations have been terminated as of September, 2009. The company is included in scope of consolidation. (5) All of the shares of the related company has been sold to Tweege Holdings LP as of 25 June 2013. (6) Liquidation process of the related company has been completed as of 6 December 2013. (1) (2) DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT 177 Hızlı Bir Bakış Faaliyetler Sürdürülebilirlik Kurumsal Yönetim Kâr Dağıtımı Finansal Bilgiler DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 12-INVESTMENTS ACCOUNTED FOR BY THE EQUITY METHOD (Continued) The details of the investments accounted for by the equity method at 31 December 2013 and 31 December 2012 are as follows: 31 December 2013 31 December 2012 108.275 12.511 120.786 81.704 34.538 116.242 Current liabilities Non-current liabilities Total liabilities Net assets 38.193 19.468 57.661 63.125 38.831 11.166 49.997 66.245 Group’s share in net assets of investments 31.883 32.932 Current assets Non-current assets Total assets Total depreciation and amortization expenses regarding the investments accounted by using the equity method are TL 1.943 (31 December 2012: TL 1.981). Gross profit Marketing, sales and distribution expenses (-) General administrative expenses (-) Other operating income/expenses (-),net Financial income/expenses (-), net Profit before income taxes Current income tax expense Deferred tax income Net profit for the period from continued operations Net profit for the period Group’s share in net profit of investments 178 DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT 1 January31 December 2013 1 January31 December 2012 85.606 80.378 (58.274) (18.024) (581) (3.924) 4.803 (926) 172 4.049 4.409 2.193 (50.020) (18.550) (4.835) 476 7.449 (3.393) 771 4.827 4.827 706 DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 13-DERIVATIVE INSTRUMENTS 31 December 2013 Asset Liability 31 December 2012 Asset Liability Derivative swap instruments: Swap transactions in foreign exchange Interest rate swap transactions 839 2.440 - 573 - 1.375 Total 839 2.440 573 1.375 (a) Foreign currency swap transactions Hürriyet, a subsidiary of the Group, has made a Euro swap transaction amounting to USD 20.000 (31 December 2012: USD 25.222) related with bank borrowings in the current period and recognised financial liability amounting to TL 2.440 from the fair value amounts of open swap transactions as of 31 December 2013 (31 December 2012: TL 573 financial asset). The Group has the right to purchase or sell 1 million US Dollars every Monday depending on the market rates effective until 13 January 2014. (b) Interest rate swap transactions Hürriyet, a subsidiary of the Group, had an interest rate swap agreement amounting to USD 10.000 with a maturity date of 2015 related with interest payments of bank borrowings to convert to Euro (Euribor) floating interest rate. Finance expense amounting to TL 635 is recognised during the period regarding these agreements. Doğan TV Holding, one of the subsidiaries of the Group, had an interest rate swap agreement amounting to USD 11.111 related with bank borrowings to convert floating interest rate to fixed interest rate for its loan. According to the agreement, interest expense of loan was fixed until 23 May 2014. Financial liability recognised as of 31 December 2013 regarding these agreements amounted to TL 839 (31 December 2012: TL 1.375 financial liability). No financial income is recognised during the period regarding these agreements (31 December 2012: None). DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT 179 180 DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT 2.306 37.919 (26.034) Disposals (25.546) (25.546) Disposals 3.250 Transfers (227) (227) Transfers 26.080 38.680 31 December 2012 Gain/(loss) arising from change in fair value 779 109 74.370 40.353 34.017 31 December 2013 15.843 14.048 1.795 Gain/(loss) arising from change in fair value The group has rent income amounting to TL 614 from investment properties (31 December 2012: TL 348). Direct operating costs in the current period resulting from investment property is TL 449 (31 December 2012: TL 492). There is no collateral or mortgage on investment properties of the Group as of 31 December 2013. Net book value 46.431 40.225 (26.034) 3.250 888 64.760 Investment properties which are carried at cost less any accumulated loss and impairment, if any in the prior consolidated financial statements are recognized at fair value in accordance with the Group management’s decision (Note 2.1.6) based on the evaluation done in 2012 year. Accordingly, the Group’s investment properties for the period ended as of 31 December 2013 have been subject to valuation under the requirements of Capital Market Board. 22.995 23.436 Additions 1 January 2012 Land Buildings 19.540 64.760 Net book value 225 19.315 26.080 38.680 Additions Land Buildings 1 January 2013 The movements in investment property during the periods ended 31 December 2013 and 2012 are as follows: NOTE 14-INVESTMENT PROPERTY (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES Hızlı Bir Bakış Faaliyetler Sürdürülebilirlik Kurumsal Yönetim Kâr Dağıtımı Finansal Bilgiler DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT 181 (892.242) Total (99.475) (79) (4.198) (47.427) (1.626) (40.991) (5.154) 105.359 13 108 18.239 1.378 70.723 5.421 9.477 Additions 15.765 16 1 4.764 1.812 9.156 16 (37.434) (16) (35) (6.904) (2.563) (18.732) (52) (9.132) Disposals - - (1.741) (480) 177 480 (1.918) 3.007 82 2.828 97 (10.134) (4.998) (280) (3.225) (411) (1.220) (2.579) (44) (2.535) - 3.833 62 3.486 285 - Acquisition of subsidiary 156 156 - (172) (172) - Disposal of subsidiary (2) (15.315) (2.517) (11.539) (12) (826) (421) 19.331 3.472 2.610 12.533 761 266 493 (804) Currency translation differences 499.776 (990.683) (1.880) (58.216) (692.936) (11.756) (185.478) (40.417) 1.490.459 27.628 181.430 818.757 14.923 371.581 75.475 665 31 December 2013 (2) (1) (3) In the current period, as a result of the review of property, plant and equipment of Hürriyet, one of the subsidiaries of the Group, additional fixed assets amounting to TL 480 are decided to be reclassified from building to leasehold improvements. The Group has disposed of it shares in its subsidiary, Moje Delo, spletni marketing d.o.o in 2013. The Group has agreed to sell its land of 17.725,69 m2 located in the district of İstanbul, Esenyurt for USD 9 million. As a result of this agreement, the land has been reclassified as asset held for sale. In addition, subsidiaries of the Group which operate in Hungary and Croatia have been reclassified as asset as held for sale. There is mortgage amounting to TL 19.087 on the property, plant and equipment as of 31 December 2013 (31 December 2012: TL 15.286). As of 31 December 2013, TL 206.731 (31 December 2012: TL 178.263) of total depreciation expense whose TL 99.475 from property, plant and equipment (31 December 2012: TL 93.224) and TL 107.256 (31 December 2012: TL 85.039) from intangible assets is allocated into cost of goods sold amounting to TL 130.542 (31 December 2012: TL 120.076) (Note 24), TL 24.438 (31 December 2012: TL 9.410) into marketing expenses, TL 51.751 (31 December 2012: TL 48.777) into general administrative expenses (Note 25). The carrying amount of the property, plant and equipment of the Group acquired thorough finance leases as of 31 December 2013 is TL 45.540 (31 December 2012: TL 46.800). The accumulated depreciation as of 31 December 2013 is TL 34.359 (31 December 2012: TL 27.878). 519.175 (1.817) (51.584) (638.690) (11.930) (153.266) (34.955) Accumulated depreciation: Land and land improvements Buildings Machinery and equipment Motor vehicles Furniture and fixtures Leasehold improvements Net book value 1.411.417 29.157 179.507 794.827 15.347 319.058 69.259 4.262 Total Cost: Land and land improvements Buildings Machinery and equipment Motor vehicles Furniture and fixtures Leasehold improvements Construction in progress 1 January 2013 Classified as asset Transfer (1) held for sale (3) The movements in property, plant and equipment during the periods ended 31 December 2013 and 2012 are as follows: NOTE 15-PROPERTY, PLANT AND EQUIPMENT (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES 182 DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT 535.306 (1.682) (51.459) (743.827) (13.442) (210.413) (47.710) (1.068.533) Accumulated depreciation: Land and land improvements Buildings Machinery and equipment Motor vehicles Furniture and fixtures Leasehold improvements Total Net book value 46.936 193.201 912.502 17.199 360.086 71.367 2.548 1.603.839 Cost: Land and land improvements Buildings Machinery and equipment Motor vehicles Furniture and fixtures Leasehold improvements Construction in progress Total 1 January 2013 NOTE 15-PROPERTY, PLANT AND EQUIPMENT (Continued) (84) (4.576) (42.793) (1.173) (41.446) (3.152) (93.224) 1.583 716 36.192 1.648 74.604 20.680 23.120 158.543 Additions 540 142.827 2.460 84.798 1.576 232.201 (20.901) (4.624) (159.274) (3.230) (93.721) (1.819) (6.351) (289.920) Disposals (150) (7) (157) 21 161 182 Change in consolidation rate (52) 3.627 3.575 2.094 (9.273) 11.448 1.176 (13.976) (8.531) Transfer (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES 1 4.847 83 13.313 14.268 32.512 (2) (4.847) (139) (22.549) (20.940) (973) (49.450) Disposal of subsidiary 284 406 142 489 63 1.384 (553) (534) (1.355) (131) (538) (29) (106) (3.246) Currency translation differences 519.175 (1.817) (51.584) (638.690) (11.930) (153.266) (34.955) (892.242) 29.157 179.507 794.827 15.347 319.058 69.259 4.262 1.411.417 31 December 2012 Hızlı Bir Bakış Faaliyetler Sürdürülebilirlik Kurumsal Yönetim Kâr Dağıtımı Finansal Bilgiler DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT 183 (300.503) Total (1) The Group has disposed of it shares in its subsidiary, Moje Delo, spletni marketing d.o.o in 2013. 568.564 (19.200) (108.191) (135.928) (12.303) (2.374) (22.507) Accumulated amortization: Brand name Customer list Rights Domain names Development costs Other Net book value 869.067 295.435 310.305 188.643 46.625 3.523 24.536 1 January 2013 Total Cost: Brand name Customer list Rights Domain names Development costs Other (65.219) (1.491) (19.273) (35.425) (3.407) (395) (5.228) 52.299 38.310 3.407 10.582 Additions The movements in intangible assets for the periods ended 31 December 2013 and 2012 are as follows: NOTE 16-INTANGIBLE ASSETS 42.343 23.279 13.744 1.304 4.016 (69.608) (13.316) (31.039) (19.093) (2.136) (4.024) Reclassed to assets held for sale (4.514) (632) (1.489) (2.393) 5.104 997 1.489 2.618 Acquisition of subsidiary 3.250 1.638 1.523 89 (3.970) (1.913) (1.517) (345) (195) Disposals (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES 424 424 - (919) (919) - Disposal of subsidiary (1) (49.354) (1.072) (39.388) (6.903) (1.394) (597) 111.232 36.569 62.085 8.477 3.468 633 Currency translation differences 589.632 (373.573) (21.763) (143.573) (163.082) (14.277) (4.258) (26.620) 963.205 318.688 341.351 214.502 49.847 4.667 34.150 31 December 2013 184 DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT (17.732) (88.938) (119.413) (9.601) (881) (21.606) (258.171) Accumulated amortization: Brand name Customer list Rights Domain names Development costs Other Total 572.967 831.138 Total Net book value 297.085 309.421 151.064 43.579 2.105 27.884 1 January 2012 Cost: Brand name Customer list Rights Domain names Development costs Other NOTE 16-INTANGIBLE ASSETS (Continued) (50.090) (1.439) (18.564) (21.355) (2.669) (421) (5.642) 49.689 42.459 3.086 345 3.799 Additions 3.966 340 3.626 (4.458) (211) (4.247) Disposals - - 1.384 1.384 - Transfers 4.143 3.599 104 440 (7.364) (4.902) (104) (2.358) Disposal of subsidiary (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES (399) (29) (689) 901 (33) (1.224) 675 (1.322) (1.650) 884 (1.151) (40) 1.177 (542) 48 48 - - - Currency translation Change in differences consolidation rate 568.564 (300.503) (19.200) (108.191) (135.928) (12.303) (2.374) (22.507) 869.067 295.435 310.305 188.643 46.625 3.523 24.536 31 December 2012 Hızlı Bir Bakış Faaliyetler Sürdürülebilirlik Kurumsal Yönetim Kâr Dağıtımı Finansal Bilgiler DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 16-INTANGIBLE ASSETS (Continued) In addition to the movement of the intangible assets above, television programme rights amounting to TL 76.471 and TL 56.988 are included in intangible assets in the consolidated balance sheets at 31 December 2013 and 31 December 2012, respectively. The movements of the television programme rights during the periods ended 31 December 2013 and 2012 are as follows: 1 January Additions Amortization of television broadcasting rights (Note 24) Provision for impairment of programme rights Currency translation differences 31 December 31 December 2013 31 December 2012 56.988 59.401 (42.037) (610) 2.729 64.296 29.520 (34.949) (1.868) (11) 76.471 56.988 Intangible assets with indefinite useful lives As at 31 December 2013, the Group has determined that brand names with carrying value of TL 277.517 have indefinite useful lives (31 December 2012: TL 269.360) (Note 2). The utilization period of brand names with indefinite useful lives, as expected by the Group, is determined based on the stability of the industry, changes in market demands as to the products and services provided through assets, control period over the assets and legal or similar restrictions on their utilization. Goodwill The movements of goodwill during the periods ended 31 December 2013 and 2012 are as follows: 31 December 2013 31 December 2012 1 January Disposal of subsidiary (1) Impairment (3) Discontinued operations Currency translation differences Other (2) 574.160 (6.458) 11.092 (3.543) 595.197 (21.278) (43) (576) 860 31 December 575.251 574.160 The Group has disposed of it shares in its subsidiary, Moje Delo, spletni marketing d.o.o in 2013 in accordance with the legal regulations of Slovenia. Other relates to the changes in fair value of put options (Note 2.2). (3) There isn’t any provision booked for goodwill impairment as of 31 December 2013 as explained in detail in the context in Note 2. (31 December 2012: TL 18.106 of the total impairment is related with the purchasing of subsidiaries operating in Russia by Hurriyet, one of the subsidiaries of the Group and TL 3.172 of the total impairment is related with the goodwill measurement difference regarding the purchases of shares of Eko TV which was previously accounted as joint venture.) (1) (2) DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT 185 Hızlı Bir Bakış Faaliyetler Sürdürülebilirlik Kurumsal Yönetim Kâr Dağıtımı Finansal Bilgiler DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 16-INTANGIBLE ASSETS (Continued) Goodwill (Continued) Goodwill is allocated to cash generating units identified based on business segments. The summary of goodwill allocated to business and geographical segments is as follows: 2013 2012 Broadcasting-Turkey Publishing – Russia – Turkey 363.238 363.238 119.422 92.591 118.331 92.591 Total 575.251 574.160 NOTE 17-GOVERNMENT GRANTS Group obtained six investment incentives certificate for the imported equipments amounting to USD 13.805 and domestic equipments amounting to TL 1.502 for the modernization of its printing plants in Istanbul, Ankara, Izmir, Adana, Antalya and Trabzon on 28 October, 2, 4 November and 30 December 2011. The agreements are valid for two years and equipment imported within the scope of the certificate is exempt from Customs Duty and VAT. The investments amounting to USD 13.595 for imported equipments and TL 1.502 for domestic equipments are realized within these certificates as of 31 December 2013 (31 December 2012: USD 13.450 for imported equipments and TL 1.280 for domestic equipments.) NOTE 18-PROVISIONS, CONTINGENT ASSETS AND LIABILITIES Other short-term provisions The details of other short-term provisions at 31 December 2013 and 31 December 2012 are as follows: 31 December 2013 31 December 2012 Provision for lawsuits 28.522 25.936 Total 28.522 25.936 2013 2012 1 January Additions in the current period (Note 27) Payments related with provisions Reversal of prior period provisions Acquisition of subsidiary 25.936 8.611 (3.918) (2.107) - 19.282 11.888 (3.430) (2.129) 325 31 December 28.522 25.936 The movements of provisions for lawsuits for the periods ended 31 December is as follows: 186 DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 18-PROVISIONS, CONTINGENT ASSETS AND LIABILITIES (Continued) (a) Lawsuits The details of litigations against Doğan Yayın Holding and its subsidiaries that are pending at 31 December 2013 and 31 December 2012 are as follows: 31 December 2013 31 December 2012 Legal cases Commercial cases Business cases Other 61.068 5.547 6.918 1.578 53.048 13.540 5.867 1.549 Total 75.111 74.004 A provision for lawsuits filed against the Group whose details are given above amounting to TL 28.522 has been provided with reference to the opinions of the Group’s legal advisors and past experience of management related to similar litigations against the Group (31 December 2012: TL 25.936). Legal cases mainly consist of pecuniary and non-pecuniary damages and lawsuits filed against Doğan Yayın Holding and its subsidiaries and lawsuits initiated by the Radio and Television Supreme Council. (b) Tax penalties and lawsuits The Group’s decision on the requirements set out in relation to “Tax Base Increase” in Law No: 6111 “Restructuring of some receivables and Social Security and General Health Insurance Law and Other Law Amending Certain Laws and Decrees” The Group management plans to make use of the requirements set out in relation to “Undue and on Trial Tax Liabilities” and “Tax Base Increase” in Law No: 6111 “Restructuring of some receivables and Social Security and General Health Insurance Law and Other Law Amending Certain Laws and Decrees” (“Law No: 6111”), which has become effective upon the issuance in the Official Gazette No: 27857 (I.Bis) on 25 February 2011. After the amount calculated on the basis of Law No: 6111 is paid in advance, the remaining portion which will be paid in 18 equal installments in 36 months, including the 9th installment is paid as of 28 September 2012. In this regard, the Group has no outstanding liability under the requirements of Law No: 6111. The amount of payment and expenses of the Group within the scope of Law No: 6111 are summarized below: Undue and on trial tax liabilities in dispute Under the requirements of Law No. 6111, TL 33.926 portion of the related amount is paid in cash until 30 June 2011. In this scope, TL 423.588 portion of TL 886.772 of principal including interest is paid in 8 installments, and the remaining portion (TL 463.184) is paid including the 9th installments. TL 58.013 (31 December 2011: TL 38.595, 31 December 2012: TL 19.418) of total interest payment is made regarding “undue and on trial tax liabilities in dispute” paid in installments. The Group has made a total payment of TL 920.698 including interest regarding its “undue and on trial tax liabilities in dispute” in accordance with Law No: 6111 and the Group has no outstanding liability in this regard. DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT 187 Hızlı Bir Bakış Faaliyetler Sürdürülebilirlik Kurumsal Yönetim Kâr Dağıtımı Finansal Bilgiler DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 18-PROVISIONS, CONTINGENT ASSETS AND LIABILITIES (Continued) Tax base increase Under the requirements of law no: 6111, TL 47.672 portion is paid in cash until 30 June 2011. In this scope, TL 15.063 portion of TL 31.534 which will be paid in 18 installments in 36 months is paid in 8 installments, and the remaining portion (TL 16.471) is paid including the 9th month installments. TL 2.069 (31 December 2011: TL 1.372, 31 December 2012: TL 697) of total interest payment is made regarding tax base increase paid in installments. The Group has made a total payment of TL 79.206 including interest regarding its “tax base increase” ” in accordance with Law No: 6111 and the Group has no outstanding liability in this regard. (c) Commitments and contingent liabilities related to the share acquisition agreement with Commerz-Film GmbH Doğan Yayın Holding sold 90.854.185 shares (“Axel shares”), 25% of the share capital of Doğan TV Holding, to Commerz-Film GmbH (formerly registered as Dreiundvierzigste Media Vermögengsverwaltungsgesellschaft mbH), a 100% subsidiary of Axel Springer AG, for EUR 375.000 (TL 694.312, this amount is defined as “initial sales price”) on 2 January 2007. In accordance with the Share Sale Agreement (“Agreement”) that the initial sales price will be revised based on whether the “initial public offering” (“IPO”) of “Axel Shares” or not. Dates for the reassessment of the original selling price as set out in the agreement signed by Doğan Holding, Doğan Yayın Holding’s major shareholder, Doğan Yayın Holding, Doğan TV Holding, Commerz-Film GmbH and Hauptstadtsee 809 on 19 November 2009 have been postponed for a maximum period of 6 years without being subject to any condition. The related agreement dated 19 November 2009, was amended by a new agreement (Amendment agreement) signed with Doğan Holding, Doğan Yayın Holding, Doğan TV Holding, Commerz-Film GmbH and Hauptstadtsee 809. V V GmbH at 31 October 2011. The initial sale price defined above amounting to EUR 375.000 can be amended based on the requirements explained below. As per the agreement, the initial sale price may be subject to revision as the following depending on the “initial public offering” of Axel shares. Doğan Yayın Holding: In the event that Axel shares are offered to public by 30 June 2017 and if quarterly share value of “Axel Shares” in average subsequent to public offering is less than the amount of which will be calculated by adding interest over the original selling price (as measured by using an annual combined 12 months Euro Libor as of 2 January 2007), both the difference resulting from the quarterly share value of “Axel Shares” in average subsequent to public offering and the original selling price and the amount calculated by adding interest over the difference would be paid by Doğan Yayın Holding to the Axel Springer Group. In the event that Axel shares are offered to public by 30 June 2017 and if quarterly share value of “Axel Shares” in average subsequent to public offering is higher than the original selling price, both the difference resulting from the quarterly share value of “Axel Shares” in average subsequent to public offering and the amount of which will be calculated by adding interest over the original selling price (as measured by using an annual combined 12 months Euro Libor as of 2 January 2007) to the original selling price would be equally shared between the Axel Springer Group and Doğan Yayın Holding. 188 DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 18-PROVISIONS, CONTINGENT ASSETS AND LIABILITIES (Continued) (c) Commitments and contingent liabilities related to the share acquisition agreement with Commerz-Film GmbH (Continued) Doğan Yayın Holding (Continued): In the event that Axel shares are not offered to public by 30 June 2017 and if the fair value of Doğan TV Holding, which will be calculated by using certain valuation techniques as at 31 December 2015, is less than the amount of which will be calculated by adding interest over the original selling price (as measured by using an annual combined 12 months Euro Libor as of 2 January 2007) to the original selling price, both the fair value of Doğan TV Holding, which will be calculated by using certain valuation techniques as at 31 December 2015, and the difference of the original selling price and the amount calculated by adding interest over the difference would be paid by Doğan Yayın Holding to the Axel Springer Group. If “Axel Shares” are not listed by the end of 30 June 2017, the fair value based on the above-mentioned techniques would be reassessed, payments would be made to the Axel Springer Group in accordance with the related calculations, and as detailed below Axel Springer Group’s call option of its entire or some portion of its shares to Doğan Holding and Doğan Holding’s put option for the related shares would continue to be in effect. In the event that Axel Springer group shares are offered to the public between 30 June 2017 and 30 June 2020, any positive difference between the initial public offering value and the initial sales price remeasured as of 31 December 2015 (it will be remeasured using the annual 12 months Euro Libor rates on annual compound basis starting from 2 January 2007) including interest calculated from the difference (it will be calculated using the annual Euro Libor rates on annual compound basis effective from 1 July 2017) will be apportioned equally, whereas no transaction will take place for any negative difference. As of the balance sheet date, the Group prepared 2014-2020 cash flow projections for Doğan Yayın Holding to determine whether Doğan Yayın Holding assumes any liabilities in regards to the “initial sale price” regarding the Agreement. The related cash flow statements are calculated based on different initial public offering scenarios in different terms covering 5 years and calculating the fair value of Doğan TV Holding. Significant estimates and assumptions prepared based on TL cash flow projections for determining the fair value of Doğan TV Holding are presented as follows: 2014-2020 %14,04 5 years average of Compound Annual Growth Rate (1) EBITDA margin (2) (1) (2) 2013 %11 2014 %11 2015 %23 2016 %30 2017 %35 2018 %38 2019 %38 2020 %37 Compound Annual Growth Rate average Earnings before interest, depreciation and tax DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT 189 Hızlı Bir Bakış Faaliyetler Sürdürülebilirlik Kurumsal Yönetim Kâr Dağıtımı Finansal Bilgiler DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 18-PROVISIONS, CONTINGENT ASSETS AND LIABILITIES (Continued) (c) Commitments and contingent liabilities related to the share acquisition agreement with Commerz-Film GmbH (Continued) Doğan Yayın Holding (Continued): Cash flow projections are discounted by applying 13,4% of tax before weighted average cost of capital. (WACC – weighted average cost of capital). Growth rate is considered as 3%. Considering the above significant assumptions related to cash flow projections, initial public offering scenarios, fair values calculated by using the discount rates, Agreement terms and future uncertainties, as of the balance sheet date, no liability is recorded in the accompanying consolidated financial statements in relation to the sale of 12,43% “Axel Shares” in Doğan TV Holding capital to the Axel Springer Group by the Group management. If the weighted average cost of capital (WACC – weighted average cost of capital) after tax used in the fair value calculation of Doğan TV Holding regarding the above-mentioned valuation details increases by 50 basis points, the Group’s liability, which is calculated by considering the average fair value occurring at different IPO periods by the end of 2015, would increase by TL 113.488 and if the weighted average cost of capital after tax decreases by 50 basis points, no liability is recognized. In addition, if cash flows considered in the determination of Doğan TV’s fair value decrease by 10%, the Group’s liability, which is calculated by considering the average fair value calculated at different IPO periods until the end of 2015, would increase by TL 64.477, and if the related cash flows increase by 10%, no liability is recognized. In addition to the requirements above, if Doğan TV’s public offering occurs in 2014 under the scope of revised agreement signed at 11 June 2013 by the Group and if the estimated initial public offering price is less than the “initial sales price”amount plus EUR 27.000 but by all means above the “initial sale price”, positive difference as a reference account arising from the interest paid for the first and second part of DTV Put Option I of which Doğan TV is a party to the agreement in January 2013 and January 2014 and interest for the third part of DTV Put Option I in January 2015 shall be paid by the Axel Springer Group to Doğan Yayın Holding A.Ş.. 190 DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT 191 (2) (1) (3) 36.149 - - - 805.897 - - 959.201 61.843 - 134.217 19.087 - - - - 229.571 - 33.268 - 31 December 2013 TL USD - - - - 95.275 - 467 6.500 EUR - - - - - - 1.267.321 - - - - - 1.157.710 94.325 15.286 Other TL Equivalent - - - - 173.402 - 53.539 - - - - - 409.620 - 21.826 - 31 December 2012 TL USD The guarantees of the Group consist of letter of guarantees, guarantee notes, bails and mortgages. The details of letter of guarantees, guarantee notes, bails and mortgages are explained below. The details are explained in Note 7. There are mortgages amounting to TL 19.087 on property plant and equipment of Hürriyet, one of the subsidiaries of the Group, as of 31 December 2013 (31 December 2012: TL 15.286) (Note 15). Total A. CPM’s given in the name of its own legal personality Guarantees (1) Mortgages (2) (3) Pledges (3) B. CPM’s given on behalf of the fully consolidated companies Guarantees (1) Mortgages Pledges C. CPM’s given on behalf of third parties for ordinary course of business Guarantees Mortgages Pledges D. Total amount of other CPM’s given i) Total amount of CPM’s given on behalf of the majority shareholder ii) Total amount of CPM’s given on behalf of third parties which are not in scope of B and C ii) Total amount of CPM’s given on behalf of third parties which are not in scope of C TL Equivalent Collaterals, pledges and mortgages (CPM) given by the Group at 31 December 2013 and 31 December 2012 is as follows: (a) Letters of guarantees and guarantee notes given NOTE 19 – COMMITMENTS (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES - - - - 100.924 - 437 6.500 EUR - - - - 8.634 - 2.709 - Other Hızlı Bir Bakış Faaliyetler Sürdürülebilirlik Kurumsal Yönetim Kâr Dağıtımı Finansal Bilgiler DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 19 – COMMITMENTS (Continued) (a) Letters of guarantees and guarantee notes given (Continued) Other CPM given by the Group to equity ratio is 0% as of 31 December 2013 (31 December 2012: 0%). The details of letter of guarantees and guarantee notes given by the Group are as follows: 31 December 2013 Original TL currency equivalent Letters of guarantees-EUR Letters of guarantees-TL Letters of guarantees-USD Letters of guarantees-Other Guarantee notes – USD Guarantee notes-TL Guarantee notes-EUR 58.567 63.372 33.268 24.704 25 Total 171.982 63.372 71.003 24.704 73 31 December 2012 Original TL currency equivalent 76.587 55.412 21.826 2.709 134.475 24.704 25 331.134 180.110 55.412 38.907 850 239.715 24.704 59 539.757 Doğan TV Holding, one of the subsidiaries of Doğan Yayın Holding, has given letters of guarantees amounting to EUR 55.000 to UEFA (Union Européenne de Football Association or Union of European Football Associations) in 2008 for broadcasting rights of UEFA Champions League, UEFA Super Cup and UEFA Cup games for the period 2012-2015. (b) Guarantees and mortgages given The details of guarantees of Doğan Yayın Holding and its shareholders’ given for the borrowings and trade payables of the Group companies and related parties as of 31 December 2013 and 31 December 2012 are as follows: 31 December 2013 Original TL currency equivalent Bails-USD Bails-TL Bails-EUR Bails-CHF Mortgages-EUR 229.571 9.916 37.150 6.500 Total 489.973 9.916 109.091 19.087 628.067 31 December 2012 Original TL currency equivalent 275.146 146.825 24.479 8.634 6.500 490.475 146.825 58.203 16.775 15.286 727.564 (c) Barter agreements Doğan Yayın Holding and its subsidiaries, as a common practice in the media sector, enter into barter agreements, which involve the exchanging of goods or services without any cash collections or payments. As of 31 December 2013, the Group has a commitment for the publication of advertisements amounting to TL 10.525 (31 December 2012: TL 11.710) in exchange for purchasing goods and services and has an option to purchase goods and services amounting to TL 32.496 (31 December 2012: TL 34.259) in exchange of the goods or services sold. 192 DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 20-PROVISION FOR EMPLOYMENT BENEFITS a) Payables regarding employee benefits The details of payables regarding employee benefits at 31 December 2013 and 31 December 2012 are as follows: 31 December 2013 31 December 2012 Payables to personnel Social security payables 12.938 8.312 11.577 8.000 Total 21.250 19.577 b) Short-term provisions regarding employee benefits The details of short-term provisions regarding employee benefits at 31 December 2013 and 31 December 2012 are as follows: 31 December 2013 31 December 2012 Unused vacation provision 35.376 30.563 Total 35.376 30.563 31 December 2013 31 December 2012 1 January Additions in the current period Currency translation difference Payments related with provisions Acquisition of subsidiary Reversal of provisions in the current period from discontinued operations 30.563 11.361 321 (6.869) - 27.977 9.797 9 (6.398) 610 (1.432) 31 December 35.376 30.563 The movements in the provision for unused vacation for the periods ended 31 December are as follows: DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT 193 Hızlı Bir Bakış Faaliyetler Sürdürülebilirlik Kurumsal Yönetim Kâr Dağıtımı Finansal Bilgiler DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 20-PROVISION FOR EMPLOYMENT BENEFITS (Continued) c) Long-term provisions regarding employee benefits The details of long-term provisions regarding employee benefits at 31 December 2013 and 31 December 2012 are as follows: Provision for employment termination benefits 31 December 2013 31 December 2012 84.759 78.305 Except from the legal requirements other than Turkey in which the Group operates, there are no pension plans and benefits. Under the Turkish Labour Law, the Group is required to pay termination benefits to each employee who has completed one year of service and whose employment is terminated without due cause, or who is called up for military service, dies or retires and achieves the retirement age. At 31 December 2013 the amount payable maximum equals to one month of salary and is limited to TL 3.254,44 (31 December 2012: TL 3.033,98) for each year of service. On the other hand, the Group is liable to make payments to personnel who work for a minimum of 5 years and whose employment is terminated without due cause in accordance with the Regulations with regards to Employees Employed in the Press Sector. The maximum payable amount is 30 days’ salary for each year of service. Provision for employment termination benefits is not subject to any legal funding. Provision for employment termination benefits is calculated by estimating the present value of the future probable obligation arising from the retirement of the employees of the Group. In 2012, the Group has decided to early adopt the amendments to TAS 19 which is applicable as of 1 January 2013 and recognized all actuarial gains and losses in other comprehensive income Actuarial assumptions used in the calculation of the retirement pay provision are as following: - discount rate is applied as 9,70% (31 December 2012: 7,69%), inflation rate applied as 6,40% (31 December 2012: 4,98%) and rate of increase in real wages applied as 6,40% (31 December 2012: 4,98%) in the calculation. - the calculation is made based on the maximum salary rate of TL 3.254,44 effective as of 31 December 2013 (31 December 2012: TL 3.033,98). - age of retirement is based on considering the Company’s historical operating data and taken as the average age of retirement from the Group. 194 DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 20-PROVISION FOR EMPLOYMENT BENEFITS (Continued) c) Long-term provisions regarding employee benefits (Continued) The movements in the provision for employment termination benefits are as follows: 31 December 2013 31 December 2012 1 January Actuarial loss Current period service cost from continued operations Net interest expense related to the defined benefit obligation Loss regarding payment/cuts in benefits/termination Payments during the year from continued operations (78.305) (3.303) (7.369) (5.027) (2.431) 11.676 (40.786) (36.328) (5.107) (4.153) (3.280) 11.349 31 December (84.759) (78.305) Total costs excluding the actuarial loss regarding employment benefits are presented in consolidated statement of profit or loss prepared as of 31 December 2013. Actuarial loss amounting to TL 3.303 (31 December 2012: TL 37.917), is presented in other comprehensive statement of profit or loss as of 31 December 2013. Total costs regarding employment benefits as of 31 December 2013 are presented in consolidated statement of profit or loss as explained in note 2.1.7. NOTE 21-OTHER ASSETS AND LIABILITIES The details of other assets and liabilities at 31 December 2013 and 31 December 2012 are as follows: Other current assets: 31 December 2013 31 December 2012 Blocked deposit (1) Value Added Tax (“VAT”) receivables Prepaid taxes Personnel advances Work advances Programme stocks Other 36.592 21.735 20.084 4.954 4.440 4.044 7.789 14.634 5.228 8.578 11.553 9.120 6.385 Sub-total 99.638 55.498 Less: provision for other doubtful receivables (Note 4) Less: provision for impairment on programme stocks (Note 27) (873) (1.081) (747) (1.081) Total 97.684 53.670 As a guarantee for the USD 50.00 loan of the Group, a total amount of USD 17.200 has been paid including the addition to the blocked deposit amount as of 31 December 2013 related with the principal amount of the loan based on the amended loan agreement as of 24 February 2014. (1) DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT 195 Hızlı Bir Bakış Faaliyetler Sürdürülebilirlik Kurumsal Yönetim Kâr Dağıtımı Finansal Bilgiler DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 21-OTHER ASSETS AND LIABILITIES (Continued) Movements of other doubtful receivables for the periods are as follows: 2013 2012 1 January Provisions booked in the current period Currency translation differences (747) (126) (833) (112) 198 31 December (873) (747) 31 December 2013 31 December 2012 Value Added Tax (“VAT”) receivables Blocked deposits Other 126.255 20 340 125.356 17 220 Total 126.615 125.593 31 December 2013 31 December 2012 Prepaid expenses (1) Advances given 20.882 28.217 13.209 19.179 Total 49.099 32.388 31 December 2013 31 December 2012 Advances given and prepayments (1) Prepaid expenses Advances given for purchase of property, plant and equipment 25.708 8.201 395 20.439 6.397 186 Total 34.304 27.022 Other non-current assets: NOTE 22 – PREPAID EXPENSES AND DEFERRED INCOME The details of prepaid expenses and deferred income at 31 December 2013 and 31 December 2012 are as follows: Short-term prepaid expenses: (1) Prepaid expenses are majorly composed of prepaid rents and insurance expenses. Long-term prepaid expenses: (1) Advances given and prepayments amounting to TL 25.708 (31 December 2012: TL 20.439) consist of prepayments made by Doğan TV Holding, one of the subsidiaries of Doğan Yayın Holding, for UEFA (Union Européenne de Football Association or Union of European Football Associations) Champions League qualifying games and UEFA Cup qualifying games of certain Spor Toto Super League teams between 2008 and 2020. In accordance with the agreements, prepayments made for the related games will be refunded to Doğan TV Holding in the cancellation of games. 196 DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 22 – PREPAID EXPENSES AND DEFERRED INCOME (Continued) Short-term deferred income: 31 December 2013 31 December 2012 Deferred income Advances received 42.906 1.175 22.572 1.385 Total 44.081 23.957 31 December 2013 31 December 2012 Deferred income 3.563 12.364 Total 3.563 12.364 Long-term deferred income: NOTE 23-EQUITY Doğan Yayın Holding adopted the registered capital system and set a limit on its registered capital representing registered type shares with a nominal value of TL 1. Doğan Yayın Holding’s historical, authorized and issued capital at 31 December 2013 and 31 December 2012 is as follows: Limit on registered capital Issued capital 31 December 2013 31 December 2012 3.000.000 2.428.550 3.000.000 2.000.000 Limit on registered issued capital of Doğan Yayın Holding has been registered and increased to TL 3.000.000 in 5 June 2012. In accordance with the authority of Article 7 of Doğan Yayın Holding’s Articles of Association, based on Doğan Yayın Holding Board of Directors’ decision issued on 25 October 2013 numbered 2013/27 and the Capital Market Boards’ decree issued on 6 December 2013 numbered 40/1289, the issued capital has been increased to TL 2.428.550 from TL 2.000.000 through total cash payment. All shares issued representing the cash contribution of TL 428.550 (TL 1(full) per nominal value amounting to TL 0.70 (full)) are transferred to the parent company, Doğan Holding, provided that total TL 299.985 is paid fully and in cash under the requirements set out in the “issuance certificate” approved by the Capital Markets Board. The Group has reported to the Capital Markets Board that the transactions and procedures related to the capital increase were performed in accordance with the requirements of Capital Markets Board and related Communiqués and principles and procedures set out in the “issuance certificate”, and as of 27 December 2013, Article 7 “Registered and Issued Capital” of the Articles of Association is registered on the condition that the related article shall be amended to reflect the changes arising out of the capital increase in accordance with Paragraph 1(c) of Article 25 “Procedures Subsequent to Capital Increase” of the CMB’s “Share Communiqué” No. VII-128.1. As described above, TL 128.565 portion of the capital increase allocated under the nominal value is recognized under the sub account “share discounts” under equity account. DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT 197 Hızlı Bir Bakış Faaliyetler Sürdürülebilirlik Kurumsal Yönetim Kâr Dağıtımı Finansal Bilgiler DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 23 – EQUITY (Continued) TL 299.985 of resource obtained from the capital increase is used in accordance with the “Report on the Usage of Resource Obtained from Capital Increase” disclosed to the public on 3 September 2013. Accordingly, following the capital increase, TL 43.892 of liability in total, including the principal and interest amount with the exchange rate and delay interest difference during the period between the payments of resource obtained from capital increase to Doğan Yayın Holding, and payment to the parent company – Doğan Holding. Doğan Yayın Holding has no privileged shares. The ultimate shareholder of Doğan Yayın Holding is Aydın Doğan and Doğan Family (Işıl Doğan, Arzuhan Yalçındağ, Vuslat Sabancı, Hanzade V.Doğan Boyner and Begümhan Doğan Faralyalı) and the shareholders of Doğan Yayın Holding and the historical values of shares in equity at 31 December 2013 and 31 December 2012 are as follows: Shareholders Doğan Holding (1) Doğan Family Adilbey Holding (2) Publicly traded on Borsa İstanbul (3) Issued capital Adjustments to issued capital Total (1) (2) (3) Share (%) 31 December 2013 Share (%) 31 December 2012 80,02 1,90 18,08 100,00 1.943.379 46.183 438.988 2.428.550 75,59 2,31 0,15 21,95 100,00 1.511.829 46.183 3.000 438.988 2.000.000 95.781 95.781 2.524.331 2.095.781 80,02% of the shares of Doğan Yayın Holding (31 December 2012: 75,59% shares) are owned by Doğan Holding, which corresponds to 33,42% of the publicly available shares of Doğan Yayın Holding (31 December 2012: 19,00% shares) as of 31 December 2013 and 31 December 2012. 3.000.000 “publicly available” shares of Doğan Yayın Holding (exact) with a nominal value of TL 1 each have been acquired by Doğan Holding (parent company of the Group) from Adilbey Holding A.Ş. as of 20 February 2013 in consideration of TL 0,86 (exact) per share in cash independent from Borsa İstanbul transactions based on weighted average transaction amount at the first session provided that the transaction price remains within the margins set out in accordance with the Circular “Principles of Establishment and Operation of Wholesale Market” of Borsa İstanbul. As a result of the above-mentioned transaction disclosed at PDP on 20 February 2013, Doğan Holding’s share in Doğan Yayın Holding has become 75,74%. In accordance with the Capital Markets Board’s (the “CMB”) Resolution No: 21/655 issued on 23 July 2010, it is regarded that 17,25% of the shares (31 December 2012: 20,95%) are outstanding as of 31 December 2013 based on the Central Registry Agency’s (“CRA”) records. 51,50% of Doğan Yayın Holding’s shares (31 December 2012: 41,11%) are publicly available as of 31 December 2013 (Note 1). Adjustment to share capital represents the difference between cash and cash equivalent contributions to the total amounts adjusted for inflation added to issued share capital issued and amounts before inflation adjustment. Share Premiums/Discounts Share premiums/discounts represent the positive or negative differences resulting from the nominal value and sales value of public shares. Share premiums Share discounts (-) Total 198 DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT 31 December 2013 163.115 (128.565) 31 December 2012 163.115 - 34.550 163.115 DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 23 – EQUITY (Continued) Restricted reserves Restricted reserves are reserved from the prior period profit due to legal or contractual obligations or for certain purposes other than the profit distribution (for example, to obtain the tax advantage of gain on sale of associates). General Statutory Legal Reserves are reserved according to the article 519 of Turkish Commercial Code and used in accordance with the principles set out in this article.The afore-mentioned amounts should be classified in “Restricted Reserves” in accordance with the CMB’s Financial Reporting Standards. The details of restricted reserves at 31 December 2013 and 31 December 2012 are as follows: Restricted reserves 31 December 2013 31 December 2012 Gain on sale of subsidiary’s shares General legal reserves 67.979 21.693 438.708 21.693 Total 89.672 460.401 Accumulated Other Comprehensive Expenses That will not reclassified in Profit or Loss The Company’s investment property revaluation reserves and actuarial losses of defined benefit plans that aren’t reclassified in accumulated other comprehensive income and expenses are summarized below. i) Investment Property Revaluation Reserves: Real estates recognized as property, plant and equipment in prior periods, can be transferred to investment property due to changes in use. The Group has reclassified some of its properties in 2012 as investment property and has chosen to account such investment properties at fair value. Accordingly, fair value increase at the initial transfer amounting to TL 1.334 is recognized as revaluation reserve under shareholders equity as of 31 December 2012. ii) Actuarial losses in defined benefit plans Provision for employment termination benefits is calculated by estimating the present value of the future probable obligation arising from the retirement of the employees of the Group. In 2012, the Group has decided to early adopt the amendments to TAS 19 which is applicable as of 1 January 2013 and recognized all actuarial gains and losses in other comprehensive income. Actuarial loss recognized under equity in the balance sheet amounts to TL 26.231 (31 December 2012: 23.588 TL) DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT 199 Hızlı Bir Bakış Faaliyetler Sürdürülebilirlik Kurumsal Yönetim Kâr Dağıtımı Finansal Bilgiler DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 23-EQUITY (Continued) Capital Reserves and Retained Earnings Subsequent to the first inflation adjusted financial statements, equity items such as; “Capital, Emission Premiums, General Statutory Legal Reserves, Statutory Reserves, Special Reserves and Extraordinary Reserves” are carried at carrying value in the balance sheet and their adjusted values based on inflation are collectively presented in equity accounts group. In accordance with the CMB regulations, “Share capital”, “Restricted Reserves” and “Share Premiums” shall be carried at their statutory amounts. The valuation differences resulted due to the inflation adjustment shall be disclosed as follows: • • If the difference is due to the inflation adjustment of “Issued Capital” and not yet been transferred to capital, it should be classified under “Capital adjustment difference to share capital”; If the difference is due to the inflation adjustment of “Restricted Reserves” and “Share Premium” and the amount has not been utilized in dividend distribution or capital increase yet, it shall be classified under “Retained Earnings”. Other equity items are carried at the amounts valued in accordance with CMB’s Financial Reporting Standards. Capital adjustment differences have no other use than to be included to the capital. Dividend Distribution The Company decides to distribute profit and makes profit distribution in accordance with the Turkish Commercial Code, Capital Market Law (CML), Capital Market Board (CMB) Regulations and Laws; Tax Legislations; other related statutory legislation and Articles of Association and Resolutions of General Assembly. Profit distribution is determined by Profit Distribution Policy. On the other hand, the following can be distributed to shareholders as cash dividends, a) Retained earnings derived from the repreprepation of comparative financial statements based on the first time adoption of TAS/TFRS b) “Equity inflation adjustment differences” derived from resources that do not have any restriction regarding profit distribution, c) Retained earnings derived from the first time inflation adjustment of financial statements, In addition, if the consolidated financial statements include the “Purchasing Impact on Equity” item under equity, the related item is not considered as a deductible or additional item when presenting net distributable profit for the period. Considering the TCC, Capital Market laws and regulations, Corporate Tax, Income Tax and other related legislations in addition to the related requirements of the Company’s Articles of Association and publicly disclosed “profit distribution policy”, the following decisions are made at Doğan Yayın Holding’s General Shareholders’ Meeting held on 21 June 2013; 200 DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 23-EQUITY (Continued) Dividend Distribution (Continued) In accordance with the Communiqué No:XI-29 and related announcements of the CMB which is effective at the time, shareholders are informed about the Group management’s decision on not distributing any profits for the accounting period 2012 under the CMB’s profit distribution requirements and the related issue will be submitted to the approval of General Assembly. The Group has decided not to distribute any profits for the year 2012 because the Group’s “Consolidated Net Profit for the Period” is calculated as TL 197.242, considering its “current period tax expense”, “deferred tax expense”, “non-controlling interests” based on the audited consolidated financial statements prepared for the period January 2012-December 2012 in accordance with Turkish Accounting Standards (TAS) and Turkish Financial Reporting Standards (TFRS) under the requirements of the CMB’s Communiqué Serial: XI, No.29 and the Group’s “Net Loss for the Period” is calculated as TL 1.890.314 after deducting TL 2.019.577 of “Accumulated losses” and TL 67.979 of gain on sale of subsidiary (75% of total gain on sale of subsidiary), which is not subject to dividend distribution for the period January 2012-December 2012, recognized in the temporary “special funds” account under liabilities for five years and calculated in accordance with the Turkish Commercial Code (“TCC”)/Tax Procedures Law (“TPL”) to make use of the exemption in Article 5-1/e of the Corporate Income Tax Law based on the board’s decision no: 2013/10 issued at 09.04.2013 in accordance with the Tax Law, Capital Markets Law and other relevant financial legislations. -Based on the statutory records prepared for the period 1 January 2012-31 December 2012 in accordance with Turkish Commercial Code (TCC)/Tax Procedures Law (TPL), net income of TL 87.183 has been identified and in order to take advantage of the exemption clause of Corporate Income Tax Law No. 5-1/e with the board decision 2013/10 taken as of 09.04.2013, in accordance with the Tax Law, Capital Markets Law and other relevant financial regulations, after the deduction of TL 230.373 of “Accumulated Losses” and TL 67.979 (75% of total gain on sale of subsidiary), which is recognised in temporary “special funds account” in liabilities for five years and calculated according to Turkish Commercial Code (TCC)/Tax Procedures Law (TPL) and not subject to dividend distribution for the period 1 January 2012-31 December 2012, “Net Loss for the period”, is calculated as TL 211.169. TL 438.708 of income that is exempt from tax which was recognized in “special fund account” in liabilities for a period of five years in accordance with the Corporate Tax Law in order to take advantage of tax exemption, has been reclassified to “Extraordinary Shares” and has been decided to be fully offset against TL 211.169 of “Accumulated Losses” with “Extraordinary Shares”. The CMB’s requires the disclosure of total amount of net profit in the statutory records and other resources which may be subject to distribution.. As of the balance sheet date, the Company’s gross amount of resources that may be subject to the profit distribution based on the statutory records amounts to TL 464.605. DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT 201 Hızlı Bir Bakış Faaliyetler Sürdürülebilirlik Kurumsal Yönetim Kâr Dağıtımı Finansal Bilgiler DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 24-REVENUE AND COST OF SALES Sales revenue The details of operating revenue for the periods ended 31 December 2013 and 2012 are disclosed in Note 4-Segment Reporting. The details of sales are as follows: 2013 2012 Gross sales -Domestic sales -Sales abroad Sales returns and discounts 2.637.373 292.415 (406.215) 2.463.371 406.135 (409.183) Total 2.523.573 2.460.323 2013 2012 644.683 313.641 378.370 640.265 313.114 381.690 1.336.694 1.335.069 2013 2012 608.836 400.881 122.724 604.500 303.657 161.442 1.132.441 1.069.599 2013 2012 Gsm card sales revenue and other revenue 54.438 55.655 Total 54.438 55.655 The details of sales for the publishing segment are as follows: Advertising revenue Circulation and printing revenue Other (1) Total (1) Other sales related to publishing segment consist of distribution, sale of paper and other revenues. The details of sales for the broadcasting segment are as follows: Advertising revenue Subscriber sales Other Total The details of sales for the other segment are as follows: 202 DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 24-SALES AND COST OF SALES (Continued) Cost of sales The details of cost of sales for the business segments for the periods ended 31 December 2013 and 2012 are as follows: 2013 2012 (947.898) (884.435) (38.272) (934.537) (757.196) (43.861) (1.870.605) (1.735.594) 2013 2012 Cost of trade goods sold Payroll and news production costs Paper costs Printing, production and other raw material costs Depreciation and amortization (Note 15,16) Commissions Other (280.677) (235.043) (193.269) (97.317) (36.280) (17.400) (87.912) (279.374) (216.103) (207.967) (98.674) (37.515) (17.710) (77.194) Total (947.898) (934.537) Publishing Broadcasting Other Total The details of cost of sales for the publishing segment are as follows: DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT 203 Hızlı Bir Bakış Faaliyetler Sürdürülebilirlik Kurumsal Yönetim Kâr Dağıtımı Finansal Bilgiler DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 24-SALES AND COST OF SALES (Continued) The details of cost of sales for the broadcasting segment are as follows: 2013 2012 Television programme production costs Adsl receiver costs Personnel expenses Depreciation and amortization (Note 15,16) Cost of trade goods sold Amortization expenses of television programme rights (Note 16) Satellite usage fees RTUK share in advertisement Other (395.119) (102.656) (94.060) (52.225) (82.768) (42.037) (21.290) (18.786) (75.494) (345.612) (63.876) (82.357) (47.612) (76.962) (34.949) (23.784) (17.701) (64.343) Total (884.435) (757.196) 2013 2012 Gsm card sales expenses and other expenses (38.272) (43.861) Total (38.272) (43.861) The details of cost of sales for other segment are as follows: NOTE 25-MARKETING EXPENSES AND GENERAL ADMINISTRATIVE EXPENSES The details of marketing expenses and general administration expenses for the periods ended 31 December 2013 and 2012 is summarized below: Marketing expenses: Advertisement expenses Personnel expenses Transportation, storage and travel expenses Promotion expenses Depreciation and amortization (Note 15,16) Communication expenses Dealer shop premium expenses Consulting expenses Services outsourced Rent expenses Other Total 204 DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT 2013 2012 (97.807) (72.188) (77.382) (64.066) (48.396) (23.647) (24.438) (10.116) (6.449) (5.850) (5.687) (5.068) (17.460) (49.181) (20.575) (9.410) (9.411) (5.825) (6.594) (4.828) (3.030) (18.230) (317.106) (268.532) DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 25-MARKETING EXPENSES AND GENERAL ADMINISTRATIVE EXPENSES (Continued) General administrative expenses: 2013 2012 Personnel expenses Depreciation and amortization (Note 15,16) Consulting expenses Services outsourced Rent expenses Transportation, storage and travel expenses Various taxes Other (151.974) (51.751) (36.714) (17.555) (14.711) (12.592) (7.788) (29.130) (139.108) (48.777) (39.963) (17.311) (13.902) (11.711) (9.839) (29.764) Total (322.215) (310.375) NOTE 26-EXPENSES BY NATURE As of 31 December 2013 and 2012, expenses are disclosed by function and the details of the expenses are summarized in Note 24 and Note 25. DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT 205 Hızlı Bir Bakış Faaliyetler Sürdürülebilirlik Kurumsal Yönetim Kâr Dağıtımı Finansal Bilgiler DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 27 – OTHER INCOME/EXPENSES FROM OPERATING ACTIVITIES The details of other income and expenses from operating activities for the periods ended 31 December 2013 and 2012 are as follows. Other income from operating activities: 2013 2012 Foreign exchange gains from operating activities Unearned finance income due to sales with maturity Interest income on bank deposits Reversed provisions Usage of VAT discount (Note 2.3.1 b) Rent income Other 100.431 61.873 20.989 14.307 4.907 863 22.110 85.467 49.715 51.725 37.562 2.069 559 12.113 Total 225.480 239.210 2013 2012 (61.619) (34.434) (19.144) (8.611) (5.709) (2.947) (1.881) (610) (19.123) (49.930) (37.986) (15.844) (11.888) (5.007) (4.247) (3.590) (1.868) (19.418) (697) (4.579) (154.078) (155.054) Other expenses from operating activities: Foreign exchange losses from operating activities Provision for doubtful receivables (Note 9) Unearned finance expense due to purchases with maturity Provision for lawsuits (Note 18) Donations Other penalties and compensations paid Provision for impairment of inventories Provision for impairment of program rights and stocks Tax liability in dispute finance expense regarding 6111 law Tax base increase finance expense regarding 6111 law Other Total 206 DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 28 – INCOME AND EXPENSES FROM INVESTING ACTIVITIES The details of income and expenses from investing activities for the periods ended 31 December 2013 and 2012 are as follows. Income from investing activities: 2013 2012 Foreign exchange gains Interest income on bank deposits Gain on sale of property, plant and equipment Interest income on marketable securities Gain on sale of subsidiary share Annulment indemnity of put option agreement of Turner 52.577 10.149 2.324 1 - 32.099 4.538 181.819 516 2.436 45.767 Total 65.051 267.175 2013 (6.627) (5.995) (2.527) - 2012 (17.903) (36.790) (21.278) (15.149) (75.971) 2013 2012 Foreign exchange gains 6.790 53.869 Total 6.790 53.869 2013 2012 Foreign exchange losses Interest expense on bank borrowings Bank commission expenses Other (233.816) (103.825) (11.131) (3.584) (43.782) (87.293) (8.990) (13.064) Total (352.356) (153.129) Expenses from investing activities: Loss on sale of property, plant and equipment Foreign exchange losses Loss on sale of subsidiary share Goodwill impairment Total DİPNOT 29 – FINANCE INCOME AND EXPENSES The details of finance income and expenses for the periods ended 31 December 2013 and 2012 are as follows: Finance income: Finance expenses: DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT 207 Hızlı Bir Bakış Faaliyetler Sürdürülebilirlik Kurumsal Yönetim Kâr Dağıtımı Finansal Bilgiler DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 30-DISPOSAL OF SUBSIDIARY Hürriyet, one of the subsidiaries of the Group has disposed of it shares in its subsidiary, Moje Delo, spletni marketing d.o.o in 2013 in accordance with the legal regulations of Slovenia Net book value of assets disposed 31 December 2013 Current assets Cash and cash equivalents Trade receivables Other receivables Other current assets 268 168 118 26 Non-current assets Property, plant and equipment and intangible assets (Note 15,16) Deferred tax asset 511 4 Current liabilities Other trade payables Other payables Other current liabilities Net assets disposed 1.860 71 425 (1.261) Loss on sale of subsidiary Group’s share in net assets disposed (%55) Goodwill (Note 16) (694) 6.458 Sales amount: Cash and cash equivalents paid 3.237 Net cash inflow from sales: (Less) cash and cash equivalents disposed of Total amount of cash proceeds (268) 2.970 Loss on sale of subsidiary (Note 28) 208 DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT (2.527) DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 31-INCOME TAXES Turkish tax legislation does not permit a parent company and its subsidiaries to file a consolidated tax return. Therefore, provisions for taxes, as reflected in these consolidated financial statements, have been calculated on a separate-entity basis for the all subsidiaries consolidated on line-by-line basis. Corporate tax Corporate tax liabilities as of 31 December 2013 and 31 December 2012 are as follows: Corporate and income taxes payable Prepaid taxes Income taxes payable 31 December 2013 31 December 2012 48.158 (46.143) 78.577 (71.050) 2.015 7.527 Turkey The Corporate Tax Law has been amended as of 13 June 2006 by Law No: 5520. The majority of the clauses of Law No: 5520 are effective as of 1 January 2006. Corporate tax rate for the fiscal year 2013 is 20% (2012: 20%) for Turkey. Corporate tax is payable at a rate of 20% on the total income of the Group after adjusting for certain disallowable expenses, corporate income tax exemptions (investment allowance, etc.) and corporate income tax deductions (such as research and development expenditures deduction). No further tax is payable unless there is dividend distribution. Dividends paid to non-resident companies having representative offices in Turkey and resident companies are not subject to withholding tax. Dividends paid to companies except for those companies are subject to 15% of withholding tax. An increase in capital via issuing bonus shares is not considered as a profit distribution and thus does not incur withholding tax. Companies calculate corporate tax quarterly at the rate of 20% over their corporate income and these amounts are disclosed by the end of 14th day and paid by the end of the 17th day of the second month following each calendar quarter-end. Advance taxes paid in the period are offset against the following period’s corporate tax liability. If there is an outstanding advance tax balance as a result of offsetting, the related amount may either be refunded in cash or used to offset against for other payables to the government. Tax Law No: 5024 “Amendments in Tax Procedural Law, Income Tax Law and Corporate Tax Law” published in the Official Gazette on 30 December 2003 requires income tax and corporate taxpayers whose earnings are determined based on the balance sheet to prepare their statutory financial statements by adjusting the non-monetary assets and liabilities for the changes in the general purchasing power of the Turkish Lira effective from 1 January 2004. In accordance with the provisions of the afore-mentioned Law provisions, in order to apply inflation adjustment, the cumulative inflation rate (D-PPI increase rate) over the last 36 months and 12 months (D-PPI increase rate) must exceed 100% and 10%, respectively. Inflation adjustment has not been applied as the related threshold has not been met as of 2005 calendar year. In Turkey, there is no procedure for a final and definitive agreement on tax assessments. Companies file their tax returns by the 25th of the fourth month following the close of the financial year to which they relate. DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT 209 Hızlı Bir Bakış Faaliyetler Sürdürülebilirlik Kurumsal Yönetim Kâr Dağıtımı Finansal Bilgiler DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 31-INCOME TAXES (Continued) Corporate tax (Continued) Tax authorities can review accounting records within five years and if they determine any errors on the accounting records, tax payable can be reassessed as a result of another tax assessment. Under the Turkish tax legislation, tax losses can be carried forward to offset against future taxable income for up to five years. As publicly disclosed on 19 April 2011, the Company plans to make use of the requirements set out in relation to “Tax Base Increase” in Law No: 6111 “Restructuring of some receivables and Social Security and General Health Insurance Law and Other Law Amending Certain Laws and Decrees”; therefore, 50% of losses attributable to the periods that are subject to tax base increase will not be offset against the income to be obtained in 2010 and subsequent periods. As of 31 December 2013, the Company has offset its financial losses attributable to the calculation of offsetting of tax asset against deductible financial losses or current tax provision in accordance with the above-mentioned principles. There are numerous exemptions in the Corporate Tax Law concerning the corporations. The exemptions that are related to the Group are as follows: Exemption for participation in subsidiaries Dividend income from participation in shares of capital of another fully fledged taxpayer corporation (except for dividends from investment funds participation certificates and investment partnerships shares) are exempt from corporate tax. Issued premiums exemption Gains from issued premiums derived from the disposal of sales at nominal values during incorporations and the capital increase of joint stock companies are exempt from corporate tax. Exemption for participation into foreign subsidiaries For companies participating in 10% or more of the capital of a non-resident limited liability or joint stock company,(except for those whose principal activity is financial leasing or investment property) for at least one year until the date of the income is generated and transferred to Turkey until the date of the filing of the corporate income tax return of the fiscal year in which the income is generated is exempt from corporation tax subject to those subsidiaries being subject to corporate income tax, or alike, in their country of legal residence or business centre at the rate of at least 15% (minimum corporate income tax applicable in Turkey for those whose principal activity is finance assurance or insurance). 210 DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 31 – INCOME TAXES (Continued) Corporate tax (Continued) Exemption for sale of participation shares and property 75% of the gains derived from the sale of preferential rights, usufruct shares and founding shares from investment equity and real property which have remained in assets for more than two full years are exempt from corporate tax. For exemption, the relevant gain is required to be held in a fund account in liabilities for at least five years. The cost of the sale should be collected until the end of the second calendar year following the year of the sale. The details of effective tax laws in the Russian Federation where the Group performs a significant part of its operations are as follows: Russian Federation The corporate tax rate effective in the Russian Federation is 20% (2012: 20%). The Russian tax year is the calendar year and fiscal year ends other than the calendar year end are not applicable in the Russian Federation. The income taxes over gains are calculated annually. Tax payments are made monthly or depending on tax payer’s discretion, it can be made monthly or quarterly by using different calculation methods. Corporate tax declarations are given until 28th of March following the fiscal year end. According to the Russian Federation’s tax legislation, financial losses can be carried forward for 10 years to be deducted from future taxable income. Restriction on the deductible financial losses has been revoked as of 2007. Maximum amount that can be deducted in any year is limited to 30% of the taxable income (2012: 30%). Rights related to tax losses that have not been utilized in the related years are expired. Tax can be refunded in practice; however, refund is generally available following the outcome of legal procedures. Consolidated tax reporting or tax payment of parent companies or subsidiaries is not allowed. In general, dividend payments that are paid to foreign shareholders are subject to 15% withholding tax. Based on bilateral tax agreements, withholding tax rate can be decreased. The tax legislation of the Russian Federation is subject to various interpretations and changes frequently. The interpretation of tax legislation by tax authorities regarding the business of TME may differ from the management’s interpretation. DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT 211 Hızlı Bir Bakış Faaliyetler Sürdürülebilirlik Kurumsal Yönetim Kâr Dağıtımı Finansal Bilgiler DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 31-INCOME TAXES (Continued) Corporate tax (Continued) The tax rates at 31 December 2013 applicable in the foreign countries, where the significant part of the Group’s operations is performed, is as follows: Country Tax rates (%) 28,0 19,0 20,0 19,0 17,0 18,0 20,0 25,0 Germany (1) Hungary (2) Croatia Ukraine (3) Slovenia Belarus Kazakhstan Netherlands (4) Corporate tax rate is applied as 15% for Germany. An additional solidarity tax of 5,5% and municipal commerce tax varying in between 14-17% is also applied over the corporate tax. (2) Tax rate is 10% for the tax base up to initial 500 million Hungarian Forint, 19% for over 500 million Hungarian Forint. (3) From 1 January 2013, tax rate has decreased to 19% from 21%. Tax rate will be decreased to 16% as of 1 January 2014. (4) Tax rate is 20% for the tax base up to initial 200.000 EUR, 25% for over 200.000 EUR (1) Deferred taxes The Group recognizes deferred tax assets and liabilities based upon temporary differences arising between their financial statements as reported under the POA’s Financial Reporting Standards and their statutory tax financial statements. These differences usually result in the recognition of revenue and expenses in different reporting periods for the POA’s Financial Reporting Standards and tax purposes. Deferred taxes are calculated on temporary differences that are expected to be realized or settled based on the taxable income in coming years under the liability method using tax rates enacted at the balance sheet dates. Deferred tax assets and liabilities are presented in net in the consolidated financial statements of the Group, since they are presented in net in the financial statements of subsidiaries and joint ventures, which are each individual tax payers. Temporary differences deferred tax assets and deferred tax liabilities at the table below are presented based on gross amounts. 212 DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 31 – INCOME TAXES (Continued) The composition of cumulative temporary differences and the related deferred tax assets and liabilities in respect of items for which deferred tax has been provided at 31 December 2013 and 31 December 2012 using the enacted tax rates is as follows: Cumulative temporary differences 31 December 31 December Carry forward tax losses Provision for doubtful receivables Provision for employee termination benefit and unused vacation Other 2013 2012 2013 2012 (273.439) (68.616) (150.159) (55.582) 54.688 13.724 30.031 11.024 (120.135) (53.949) (108.868) (79.914) 23.758 12.717 21.778 16.064 104.887 78.897 (113.930) (1.605) (1.919) (115.771) (874) (1.190) (117.454) (117.835) (12.567) (38.938) Deferred tax assets Difference between the tax base and carrying value of property, plant and equipment and intangible assets Fair value of investment property Other Deferred tax liabilities Deferred tax (liability), net Deferred tax assets/(liabilities) 31 December 31 December 547.332 32.097 9.453 575.707 18.323 5.597 The deferred tax assets and liabilities of the Group and its subsidiaries are shown net in the financial statements. In the consolidated financial statements of the Group as of 31 December 2013, TL 117.721 (31 December 2012: TL 85.958) of deferred tax asset and TL 130.288 (31 December 2012: TL 124.896) deferred tax liability is recognised based on temporary differences arising between the carrying values and tax values of assets and liabilities in the financial statements. DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT 213 Hızlı Bir Bakış Faaliyetler Sürdürülebilirlik Kurumsal Yönetim Kâr Dağıtımı Finansal Bilgiler DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 31 – INCOME TAXES (Continued) The Group recognised deferred tax assets over TL 273.439 of carry forward tax losses in the consolidated financial statements prepared in accordance with the CMB’s Financial Reporting Standards as at 31 December 2013 (31 December 2012: TL 150.159). The maturity analysis of carry forward tax losses is as follows: The years for which the financial losses can be used are proposed below: 31 December 2013 31 December 2012 2013 2014 2015 2016 2017 and after 84.480 35.250 38.607 115.102 4.261 90.552 21.822 33.524 - Total 273.439 150.159 Deferred tax assets are recognised for all deductible temporary differences to the extent that it is probable that taxable profit will be available against which the deductible temporary difference can be utilized. As of 31 December 2013, the Group does not recognize deferred tax from carry forward tax losses amounted to TL 796.969 (31 December 2012: TL 952.700). The movements in deferred tax asset/(liability) for the periods ended 31 December 2013 and 2012 are as follows: 31 December 2013 31 December 2012 1 January Deferred income tax benefit/(charge) from continued operations Acquisition of entities under common control Actuarial loss tax effect recognized in other comprehensive income Currency translation differences Investment property revaluation fund deferred tax effect recognized in other comprehensive income Disposal of subsidiary (38.938) (77.269) 28.340 2.247 660 (4.774) (102) 31.449 7.508 (567) (75) 16 31 December (12.567) (38.938) 31 December 2013 31 December 2012 Current period tax expense Deferred tax income (48.158) 28.340 (78.577) 31.449 Total tax expense (19.818) (47.128) Income taxes recognized in the consolidated statement of profit or loss as of 31 December 2013 and 2012 is as follows: 214 DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 31 – INCOME TAXES (Continued) The reconciliation of the taxation on income in the consolidated statement of profit or loss for the periods ended 31 December 2013 and 2012 and the taxation on income calculated with the current tax rate over income before tax are as follows: 31 December 2013 31 December 2012 Profit/(loss) before income taxes from continued operations Tax calculated using the current tax rate of 20% Deductible carry forward tax losses Income not subject to tax Carry forward losses for which no deferred tax asset was recognized Non-deductible expenses/expenses not subject to tax Goodwill impairment The reversal previously deferred tax calculated from carryforward tax losses Disposal of subsidiary Withholding tax payment related to operations abroad Tax base increase expenses Other (208.422) 41.684 6.457 2.788 (63.298) (12.177) 4.728 322.628 (64.526) 16.872 38.406 (23.627) (19.701) (3.621) 17.741 3.589 (7.121) (3.871) (1.269) Tax expense (19.818) (47.128) NOTE 32-EARNING/(LOSS) PER SHARE Earning/(loss) per share for each class of shares disclosed in the consolidated statement of profit or loss is determined by dividing the net income/(loss) by the average number of shares. 2013 (187.726) 2012 197.242 2.022.308.082 2.000.000.000 (9,28) 9,86 Net profit/(loss) for the period attributable to equityholders of the parent company from discontinued operations (12.155) (1.839) Net profit/(loss) for the period attributable to equityholders of the parent company from continued operations (175.571) 199.081 2.022.308.082 2.000.000.000 Basic and diluted (loss)/earning per share (Kr) attributable to continued operations (8,68) 9,95 Basic and diluted (loss)/earning per share (Kr) attributable to discontinued operations (0,60) 0,09 Net profit/(loss) for the period attributable to equityholders of the parent company Weighted average number of shares with face value of TL 1 each (Loss)/earning per share (Kr) Weighted average number of shares with face value of TL 1 each DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT 215 Hızlı Bir Bakış Faaliyetler Sürdürülebilirlik Kurumsal Yönetim Kâr Dağıtımı Finansal Bilgiler DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 33-RELATED PARTY DISCLOSURES For the purpose of these consolidated financial statements, related parties are referred to as legal entities in which Doğan Holding directly or indirectly has participation, including any entities under common control; real persons and/or legal entities that have direct or indirect individual or joint control over the company and their close family members (relatives up to second-degree) and legal entities having direct or indirect individual or joint control by them and legal entities having significant effect over the Company or their key management personnel; Company’s affiliates, subsidiaries and members of the Board of Directors, key management personnel and their close family members (relatives up to second-degree) and real persons and/or legal entities that are directly or indirectly controlled individually or jointly. As of the balance sheet date, the details of due to/from related parties and related party transactions for the years ended as of 31 December 2013 and 31 December 2012 are summarized as below: a) Balances with related parties: Short-term trade receivables from related parties: Delüks Elektronik Hizmetler ve Ticaret A.Ş. (1) D Elektronik Şans Oyunları ve Yayıncılık A.Ş. (“D Elektronik Şans Oyunları”) (2) Doğan Müzik Kitap Mağazacılık ve Pazarlama A.Ş. (3) Doğan Portal ve Elektronik Ticaret A.Ş. (“Doğan Portal”) D Market Elektronik ve Ticaret A.Ş. (“D Market”) Doğan İnternet Yayıncılığı ve Yatırım A.Ş. (4) Tipeez İnternet Hizmetleri A.Ş. (“Tipeez”) (5) Other Total (3) (4) 31 December 2013 31 December 2012 2.995 1.044 1.870 678 2.944 5.754 19 541 2.258 858 1.089 9.404 1.710 1.509 15.285 17.388 The receivables are related with the rental service of vehicles of the Group. The receivables are related with the advertising sales of the Group. The receivables are related with the advertising and trade goods sales of Group. Because the Group has acquired Doğan İnternet Yayıncılığı ve Yatırım A.Ş, an entity under common control, in the current period, current period balances and transactions have been eliminated in the preparation of consolidated financial statements. (5) In the current period, all of the shares of Tipeez, which is an entity under common control, has been sold to the controlling shareholder, Tweege Holdings LP. (1) (2) 216 DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 33-RELATED PARTY DISCLOSURES (Continued) a) Balances with related parties (Continued): Short-term trade payables to related parties: Doğan Burda Dergi Yayıncılık ve Pazarlama A.Ş. (“Doğan Burda”) (1) Doğan Şirketler Grubu Holding A.Ş (“Doğan Holding”) (2) Doğan ve Egmont Yayıncılık ve Yapımcılık Ticaret A.Ş. (“Doğan Egmont”) (3) Galata Wind Enerji A.Ş. (“Galata Wind”) (4) Other 31 December 2013 33.785 10.440 3.695 1.676 983 31 December 2012 10.391 3.224 4.482 1.616 1.421 50.579 21.134 Total (3) (4) (1) (2) The payables of the Group consist of the commercial advertising sales besides outsourced magazines, books and printing services. The payables of the Group to Dogan Holding consist of the services like consulting and technical support services. The payables of the Group to Dogan Egmont consist of the advertisement and commercial goods sales. The payables of the Group to Galata Wind consist of the providing of electrical power to the building and supply facilities. b) Significant sales to and significant purchases from related parties for the periods ended 31 December 2013 and 2012: Asset, service and product sales to related parties: 2013 2012 Doğan Burda Dergi Yayıncılık ve Pazarlama A.Ş. (“Doğan Burda”) (1) Doğan Müzik Kitap Mağazacılık ve Pazarlama A.Ş. (2) Doğan ve Egmont Yayıncılık ve Yapımcılık Ticaret A.Ş. (“Doğan Egmont”) (3) D-Market Elektronik Hizmetler ve Ticaret A.Ş. (2) Delüks Elektronik Hizmetler ve Ticaret A.Ş. (4) Doğan Şirketler Grubu Holding A.Ş. (“Doğan Holding”) (5) Doğan İnternet Yayıncılığı ve Yatırım A.Ş. (6) Other 21.757 18.243 9.349 5.575 2.667 905 5.339 22.209 11.539 9.592 4.399 19 142.110 17.700 7.865 Total 63.835 213.132 (3) (4) (5) (6) (1) (2) Besides the commercial advertising sales of the Group to Dogan Burda, consists of outsourced magazines, books and printing services. Consists of the trade goods sales of the Group. Consists of the advertising sales and trade goods sales of the Group. Consists of the rental services for vehicles of the Group. Doğan Müzik Kitap Mağazacılık, one of the subsidiaries of the Group, has been sold to Doğan Holding as of 16 January 2012 in consideration of TL 139.404 (Note 36). Because the Group has acquired Doğan İnternet Yayıncılığı ve Yatırım A.Ş, an entity under common control, in the current period, current period balances and transactions have been eliminated in the preparation of consolidated financial statements. DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT 217 Hızlı Bir Bakış Faaliyetler Sürdürülebilirlik Kurumsal Yönetim Kâr Dağıtımı Finansal Bilgiler DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 33-RELATED PARTY DISCLOSURES (Continued) b) Significant sales to and significant purchases from related parties for the periods ended 31 December 2013 and 2012 (Continued): Service and product purchases from related parties: Doğan Burda Dergi Yayıncılık ve Pazarlama A.Ş. (“Doğan Burda”) (1) Doğan Şirketler Grubu Holding A.Ş. (“Doğan Holding”) (2) Galata Wind Enerji A.Ş. (“Galata Wind”) (3) Milta Turizm İşletmeleri A.Ş. (“Milta Turizm”) (4) Doğan ve Egmont Yayıncılık ve Yapımcılık Ticaret A.Ş. (“Doğan Egmont”) (1) Ortadoğu Otomotiv Ticaret A.Ş. (5) Dergi Pazarlama Planlama ve Ticaret A.Ş. (“DPP”) (6) Doğan Müzik Kitap Mağazacılık ve Pazarlama A.Ş. (7) Other Total (3) (4) (5) (6) (7) (1) (2) 2013 2012 37.353 24.809 17.182 14.063 12.989 8.793 5.721 4.626 36.096 26.262 12.763 13.554 8.253 5.917 2.087 7.144 125.536 113.897 Payables of the Group consist of the magazine distribution service. The Group’s financial, legal, information technology and consulting services in other areas are provided by Doğan Holding A.Ş. Consists of the supply for electrical power to the building and supply facilities. Consists of portion of car rent, organization and transportation services provided by Milta of the Group. Consists of the rent amounts of Trump Tower. Consists of the magazine distribution services. Consists of the amount for newspaper distribution services. c) Purchase of property plant and equipment and intangible asset from related parties for the periods ended 31 December 2013 and 2012 2013 2012 D Market Elektronik ve Ticaret A.Ş. (“D Market”) Doğan İnternet Yayıncılığı ve Yatırım A.Ş. D-Yapı Milpa Ticari ve Sınai Ürünler Paz.San.ve Tic. A.Ş. 50 - 89 2.620 490 100 Total 50 3.299 218 DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 33-RELATED PARTY DISCLOSURES (Continued) d) Other significant transactions with related parties for the periods ended 31 December 2013 and 2012: Finance income: 2013 2012 455 383 143 287 7.857 14 15 1.268 7.886 2013 2012 Doğan Holding (1) Other 11.057 109 10 - Total 11.166 10 D Portal Doğan Holding D-Elektronik Şans Oyunları Other Total Finance expenses: (1) Consists of the interest and exchange loss expenses regarding the financial loan amounting to USD 20.000 of the Group obtained from Doğan Holding in 2013. e) Other significant transactions with related parties for the years ended 31 December 2013 and 2012: Remuneration of the members of the Board of Directors and key management personnel: Doğan Yayın Holding has determined the key management personnel as the members of the board of directors and executive committee members. The compensation of key management personnel includes salaries, bonus, health insurance, communication and transportation and total amount of compensation is explained below. 2013 2012 Salaries and other short term benefits Post-employment benefits Other long term benefits Termination benefits Share based payments 2.647 - 4.751 - Total 2.647 4.751 DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT 219 Hızlı Bir Bakış Faaliyetler Sürdürülebilirlik Kurumsal Yönetim Kâr Dağıtımı Finansal Bilgiler DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 34-FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES 34.1 Financial risk management The Group’s activities expose it to a variety of financial risks; these risks are credit risk, market risk including the effects of changes in debt and equity market prices, foreign currency exchange rates, fair value interest rate risk and cash flow interest rate risk, and liquidity risk. The Group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the financial performance of the Group. The Group use derivative financial instruments in a limited manner to hedge these exposures. Financial risk management is carried out by individual subsidiaries and joint ventures under the policies, which are approved of their Board of Directors within the limits of general principles set out by Doğan Yayın Holding. 34.1.1 Credit risk Credit risk involves the risk that counterparties may be unable to meet the terms of their agreements. These risks are monitored by credit ratings and by limiting the aggregate risk to any individual counterparty. The credit risk is generally highly diversified due to the large number of entities comprising the customer bases and their dispersion across many different industries. 220 DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT 221 A. Net book value of neither past due nor impaired financial assets -Guaranteed amount by collateral B. Book value of restructured otherwise accepted as past due and impaired financial assets C. Net book value of past due but not impaired assets (Note 9) -Guaranteed amount by collateral (Note 9) D. Impaired asset net book value -Past due (gross amount) (Note 9,21) -Impairment (-) (Note 9) -Net value collateralized orguaranteed part of net value -Not overdue (gross amount) -Impairment (-) -Net value collateralized orguaranteed part of net value E. Off-balance sheet items bearing credit risk Maximum net credit risk as of balance sheet date -The part of maximum risk under guarantee with collateral (Note 9-10) 31 December 2013 209.991 (209.991) - 173.985 28.383 - 538.777 13.712 42.095 - 15.285 - 712.762 15.285 Trade receivables Related party Other NOTE 34-FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Continued) - - - - - 873 (873) - - 121.496 - - 121.496 Other receivables Related party Other (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES - - 531.197 - - 531.197 Cash and cash equivalents - - - - - Financial investments - - 28.217 - - 28.217 Other assets 222 DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT A. Net book value of neither past due nor impaired financial assets -Guaranteed amount by collateral B. Book value of restructured otherwise accepted as past due and impaired financial assets C. Net book value of past due but not impaired assets (Note 9) -Guaranteed amount by collateral (Note 9) D. Impaired asset net book value -Past due (gross amount) (Note 9,21) -Impairment (-) (Note 9,21) -Net value collateralized or guaranteed part of net value -Not overdue (gross amount) -Impairment (-) -Net value collateralized or guaranteed part of net value E. Off-balance sheet items bearing credit risk Maximum net credit risk as of balance sheet date -The part of maximum risk under guarantee with collateral (Note 9-10) 31 December 2012 522.904 19.518 130.847 20.753 195.755 (195.755) - - 40.271 - 17.388 - 653.751 17.388 Trade receivables Related party Other NOTE 34-FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Continued) - - - - - 747 (747) - - 515.874 313.738 313.738 515.874 Other receivables Related party Other (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES - - 477.599 - - 477.599 Cash and cash equivalents - - - - - Financial investments - - 19.179 - - 19.179 Other assets Hızlı Bir Bakış Faaliyetler Sürdürülebilirlik Kurumsal Yönetim Kâr Dağıtımı Finansal Bilgiler DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 34-FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Continued) 34.1.1 Credit risk (Continued) Trade receivables The credit quality of trade receivables which is past due but not impaired is as follows: 31 December 2013 Related Other party receivables 31 December 2012 Related Other party receivables 0-1 months overdue 1-3 months overdue 3-12 months overdue 1-5 years overdue - 65.144 59.344 36.339 13.158 - 49.138 41.226 31.556 8.927 Total - 173.985 - 130.847 The credit quality of trade receivables impaired is as follows: 31 December 2013 Related Other party receivables 31 December 2012 Related Other party receivables 0-3 months overdue 3-6 months overdue 6-12 months overdue 1-5 years overdue - 30.422 2.252 6.051 171.266 - 2.517 14.278 7.387 171.573 Less: provision for impairment - (209.991) - (195.755) Total - - - - DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT 223 Hızlı Bir Bakış Faaliyetler Sürdürülebilirlik Kurumsal Yönetim Kâr Dağıtımı Finansal Bilgiler DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 34-FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Continued) 34.1.2 Interest rate risk The Group is exposed to interest rate risk through the impact of rate changes on interest bearing liabilities and assets. These exposures are managed using natural hedges that arise from offsetting interest rate sensitive assets and liabilities and by limited use of derivative instruments. Borrowings issued at floating rates expose the Group to cash flow interest rate risk. Borrowings issued at fixed rate expose the Group to fair value interest rate risk. As of 31 December 2013 and 31 December 2012, the Group’s borrowings at floating rates are predominantly denominated in US Dollars and Euros. At 31 December 2013, if interest rates on US dollar denominated borrowings had been higher/lower by 100 basis points with all other variables held constant, loss before income taxes would have been TL 5.259 (31 December 2012: TL 10.427) higher/lower, mainly as a result of high interest expense on floating rate borrowings. At 31 December 2013, if interest rates on Euro denominated borrowings had been higher/lower 100 basis points with all other variables held constant, loss before income taxes would have been TL 425 (31 December 2012: TL 1.050) higher/lower, mainly as a result of high interest expense on floating rate borrowings. The table presenting Company’s fixed and floating rate financial instruments is shown below: Financial instruments with fixed rate 31 December 2013 31 December 2012 446.898 396.928 909.806 416.849 31 December 2013 31 December 2012 577.024 1.188.750 Financial assets -Banks (Note 5) Financial liabilities (Note 7) Financial instruments with floating rate Financial liabilities (Note 7) 224 DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 34-FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Continued) 34.1.2 Interest rate risk (Continued) The analysis of average annual interest rate (%) of financial assets and liabilities of the Group is as follows: USD 31 December 2013 EUR TL USD 31 December 2012 EUR TL Assets Cash and cash equivalents 0,35-4,27 0,20-2,50 6,50-9,15 0,10-5,35 0,25-3,45 5,00-12,30 Liabilities Financial liabilities 3,00-6,45 3,25-5,71 0-11,20 2,65-6,40 1,33-5,11 5,75-10,40 The distribution of sensitivity to interest rates about the period for reprising of financial assets and liabilities is as follows: Up to 3 months 3 months1 year 1 year5 years 5 years and over Non-interest bearing Total Assets Cash and cash equivalents (Note 5) Financial investments (Note 6) 446.898 - - - - 84.299 1.270 531.197 1.270 Total 446.898 - - - 85.569 532.467 Liabilities Financial borrowings (Note 7) Other financial liabilities - 1.042.802 16.155 444.028 - - - 1.486.830 16.155 Total - 1.058.957 444.028 - - 1.502.985 Up to 3 months 3 months1 year 1 year5 years 5 years and over Non-interest bearing Total Assets Cash and cash equivalents (Note 5) Financial investments (Note 6) 396.928 - - - - 80.671 1.495 477.599 1.495 Total 396.928 - - - 82.166 479.094 Liabilities Financial borrowings (Note 7) Other financial liabilities - 884.570 234.397 721.029 - - - 1.605.599 234.397 Total - 1.118.967 721.029 - - 1.839.996 31 December 2013 31 December 2012 DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT 225 226 DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT Financial borrowings (Note 7) Trade payables (Note 9) Other payables (Note 10) Trade payables to related parties (Note 33) Deferred income (Note 22) Short-term provisions regarding employee benefits (Note 20) Other short-term provisions (Note 18) Payables regarding employee benefits (Note 20) Other financial liabilities (Note 8) Derivative instruments (Note 13) Financial liabilities excluding derivatives 31 December 2013 1.486.830 320.673 59.401 50.579 47.644 35.376 28.522 21.250 16.155 2.440 Book value 1.631.889 320.800 59.401 50.579 47.644 35.376 28.522 21.250 16.155 2.440 Contractual undiscounted cash flow 502.960 251.357 30.194 44.081 - Less than 3 months As of 31 December 2013 and 31 December 2012, undiscounted cash flows of financial liabilities based on the agreement maturities are as follows: 461.778 69.443 15.011 50.579 35.376 21.250 16.155 2.440 3 – 12 months 667.151 14.196 3.563 28.522 - 1–5 years - Over 5 years Conservative liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of funding through an adequate amount of committed credit facilities and the ability to close out market positions. Due to the dynamic nature of the underlying business, the Group aims maintaining flexibility in funding by keeping committed credit lines available. 34.1.3 Liquidity risk NOTE 34-FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Continued) (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES Hızlı Bir Bakış Faaliyetler Sürdürülebilirlik Kurumsal Yönetim Kâr Dağıtımı Finansal Bilgiler DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT 227 Financial borrowings (Note 7) Trade payables (Note 9) Other financial liabilities (Note 8) Other payables (Note 10) Deferred income (Note 22) Short-term provisions regarding employee benefits (Note 20) Other short-term provisions (Note 18) Trade payables to related parties (Note 33) Payables regarding employee benefits (Note 20) Derivative instruments (Note 13) Financial liabilities excluding derivatives 31 December 2012 34.1.3 Liquidity risk (continued) 1.605.599 259.598 234.397 55.950 36.321 30.563 25.936 21.134 19.577 1.375 Book value NOTE 34-FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Continued) 1.904.285 259.805 234.397 55.950 36.321 30.563 25.936 21.134 19.577 1.375 Contractual undiscounted cash flow 723.310 247.858 216.190 30.321 23.957 - Less than 3 months 566.494 11.947 18.207 12.316 30.563 25.936 21.134 19.577 1.375 3 – 12 months (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES 614.169 13.313 12.364 - 1–5 years 312 - Over 5 years Hızlı Bir Bakış Faaliyetler Sürdürülebilirlik Kurumsal Yönetim Kâr Dağıtımı Finansal Bilgiler DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 34-FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Continued) 34.1.4 Foreign currency risk The Group is exposed to foreign exchange risk through the impact of rate changes on the translation of foreign currency liabilities to local currency. These risks are monitored and limited by analyzing foreign currency position. TL equivalents of foreign currency denominated monetary assets and liabilities at 31 December 2013 and 31 December 2012 before consolidation adjustments and reclassifications are as follows: Assets Liabilities Off-balance sheet net derivative liabilities Net foreign currency position 228 DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT 31 December 2013 31 December 2012 504.547 (1.460.641) (2.572) 950.938 (1.758.541) 19.261 (958.666) (788.342) DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 34-FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Continued) 34.1.4 Foreign currency risk (Continued) 31 December 2013 1. Trade receivables 2a. Monetary Financial Assets (Cash, Banks included) 2b. Non-Monetary Financial Assets 3. Other 4. Current Assets (1+2+3) 5. Trade receivables 6a. Monetary Financial Assets 6b. Non-Monetary Financial Assets 7. Other 8. Non-Current Assets (5+6+7) 9. Total Assets (4+8) 10. Trade payables 11. Financial Liabilities 12a. Other Monetary Financial Liabilities 12b. Other Non-Monetary Financial Liabilities 13. Current Liabilities (10+11+12) 14. Trade payables 15. Financial Liabilities 16a. Other Monetary Financial Liabilities 16b. Other Non-Monetary Financial Liabilities 17. Non-Current Liabilities (14+15+16) 18. Total Liabilities (13+17) 19. Net asset/liability position of Off-balance sheet derivatives (19a-19b) 19a. Off-balance sheet foreign currency derivative assets 19b. Off-balance sheet foreign currency derivative liabilities 20. Net foreign currency asset liability position (9-18+19) 21. Net foreign currency asset/liability position of monetary items (1+2a+5+6a-10-11-12a-14-15-16a) 22. Fair value of foreign currency hedged financial assets TL Equivalent USD EUR Other 137.254 293.405 430.659 73.888 73.888 504.547 105.134 812.257 43.006 29.959 990.356 462.306 7.979 470.285 1.460.641 71.949 246.928 318.877 47.006 47.006 365.883 79.758 689.404 369 769.531 342.555 342.555 1.112.086 41.395 13.520 54.915 7.374 7.374 62.289 7.469 122.853 9.071 27.899 167.292 119.751 7.166 126.917 294.209 23.910 32.957 56.867 19.508 19.508 76.375 17.907 33.566 2.060 53.533 813 813 54.346 (2.572) 77.128 79.700 (958.666) 10.672 46.955 36.283 (735.531) (13.244) 30.173 43.417 (245.164) 22.029 (926.135) - (746.203) - (204.021) - 24.089 - DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT 229 Hızlı Bir Bakış Faaliyetler Sürdürülebilirlik Kurumsal Yönetim Kâr Dağıtımı Finansal Bilgiler DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 34-FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Continued) 34.1.4 Foreign currency risk (Continued) 31 December 2012 1. Trade receivables 2a. Monetary Financial Assets (Cash, Banks included) 2b. Non-Monetary Financial Assets 3. Other 4. Current Assets (1+2+3) 5. Trade receivables 6a. Monetary Financial Assets 6b. Non-Monetary Financial Assets 7. Other 8. Non-Current Assets (5+6+7) 9. Total Assets (4+8) 10. Trade payables 11. Financial Liabilities 12a. Other Monetary Financial Liabilities 12b. Other Non-Monetary Financial Liabilities 13. Current Liabilities (10+11+12) 14. Trade payables 15. Financial Liabilities 16a. Other Monetary Financial Liabilities 16b. Other Non-Monetary Financial Liabilities 17. Non-Current Liabilities (14+15+16) 18. Total Liabilities (13+17) 19. Net asset/liability position of Off-balance sheet derivatives (19a-19b) 19a. Off-balance sheet foreign currency derivative assets 19b. Off-balance sheet foreign currency derivative liabilities 20. Net foreign currency asset liability position (9-18+19) 21. Net foreign currency asset/liability position of monetary items (1+2a+5+6a-10-11-12a-14-15-16a) 22. Fair value of foreign currency hedged financial assets 230 DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT TL Equivalent USD EUR Other 89.045 760.732 849.777 101.161 101.161 950.938 69.135 850.653 37.675 957.463 801.041 37 801.078 1.758.541 19.261 33.373 14.112 (788.342) 34.644 668.199 702.843 96.831 96.831 799.674 17.822 718.193 4.160 740.175 746.989 746.989 1.487.164 33.373 33.373 (654.117) 45.526 46.048 91.574 4.114 4.114 95.688 42.719 115.641 1.122 159.482 54.052 54.052 213.534 (14.112) 14.112 (131.958) 8.875 46.485 55.360 216 216 55.576 8.594 16.819 32.393 57.806 37 37 57.843 (2.267) (807.603) - (687.490) - (117.846) - (2.267) - DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 34-FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Continued) 34.1.4 Foreign currency risk (Continued) As of 31 December 2013 and 31 December 2012, foreign currency denominated asset and liability balances were converted with the following exchange rates: TL 2,1343 = USD 1 and TL 2,9365 = EUR 1 (31 December 2012: TL 1,7826 = USD 1 and TL 2,3517 = EUR 1). The Group is exposed to foreign exchange risk arising primarily from the USD and EUR, and sensitivity analysis for currency risk is summarized below: 31 December 2013 Profit/Loss Foreign currency Foreign currency appreciates depreciates If the USD had changed by %10 against the TL USD net (liabilities)/assets Hedging amount of USD USD net effect on (loss)/income (73.553) (73.553) 73.553 73.553 If the EUR had changed by %10 against the TL EUR net (liabilities)/assets Hedging amount of EUR EUR net effect on (loss)/income (24.516) (24.516) 24.516 24.516 31 December 2012 Profit/Loss Foreign currency Foreign currency appreciates depreciates If the USD had changed by %10 against the TL USD net (liabilities)/assets Hedging amount of USD USD net effect on (loss)/income (65.412) (65.412) 65.412 65.412 If the EUR had changed by %10 against the TL EUR net (liabilities)/assets Hedging amount of EUR EUR net effect on (loss)/income (13.196) (13.196) 13.196 13.196 DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT 231 Hızlı Bir Bakış Faaliyetler Sürdürülebilirlik Kurumsal Yönetim Kâr Dağıtımı Finansal Bilgiler DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 34-FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Continued) 34.2 Capital risk management In managing capital, the Group aims to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may issue new shares or sell assets to reduce its liabilities. The Group monitors capital on the basis of the net liability/total equity ratio. Net liability is calculated as the total liability less cash and cash equivalents, derivative instruments, provisions and tax liabilities. Total equity is calculated as the total of net liability and the equity as shown in the consolidated balance sheet. The net liability/total equity ratio at 31 December 2013 and 31 December 2012 is summarized below: 31 December 2013 31 December 2012 Total liability (1) Less: cash and cash equivalents (Note 5) 2.160.467 (531.197) 2.367.878 (477.599) Net liability Equity 1.629.270 1.492.720 1.890.279 1.416.824 Total capital 3.121.990 3.307.103 %52 %57 Net liability/total equity ratio (1) The amounts are calculated by deducting income tax payable, derivative financial instruments and deferred tax liability accounts from total liability. NOTE 35-FINANCIAL INSTRUMENTS Fair value of financial instruments The fair values of financial assets and financial liabilities are determined as follows: a. 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; b. Level 2: The fair value of other financial assets and financial liabilities are determined in accordance with generally accepted pricing models based on discounted cash flow analysis using prices from observable current market transactions; c. Level 3: The fair value of the financial assets and financial liabilities is determined in accordance with the unobservable current market data. 232 DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 35-FINANCIAL INSTRUMENTS (Continued) Based on the fair value hierarchy, the Group’s financial assets and liabilities are categorized as follows: Financial assets 31 December 2013 Fair Value Measurement as of the Reporting Date Level 1 Level 2 TL TL Level 3 TL Financial assets at FVTPL Trading securities Derivative instruments Available-for-sale financial assets Equity investments 839 - - 839 - - Total 839 - 839 - Financial liabilities at FVTPL Trading securities Derivative instruments Other financial liabilities 2.440 16.155 - 2.440 - 16.155 Total 18.595 - 2.440 16.155 Financial liabilities Financial assets 31 December 2012 Fair Value Measurement as of the Reporting Date Level 1 Level 2 TL TL Level 3 TL Financial assets at FVTPL Trading securities Derivative instruments Available-for-sale financial assets Equity investments 573 - - 573 - - Total 573 - 573 - - - - - Financial liabilities at FVTPL Trading securities Derivative instruments Other financial liabilities 1.375 234.397 - 1.375 - 234.397 Total 235.772 - 1.375 234.397 DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT 233 Financial liabilities Hızlı Bir Bakış Faaliyetler Sürdürülebilirlik Kurumsal Yönetim Kâr Dağıtımı Finansal Bilgiler DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 35-FINANCIAL INSTRUMENTS (Continued) Fair value is the amount at which a financial instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation, and is best evidenced by a quoted market price, if one exists. Estimated fair value of financial instruments is determined by Doğan Yayın Holding, its subsidiaries and joint ventures, using available market information and appropriate valuation methodologies. However, judgment is necessarily required to interpret market data to estimate the fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Group could realize in a current market exchange. The following methods and assumptions were used to estimate the fair value of the financial instruments: Financial assets The fair value of the foreign currency denominated amounts, which are translated by using the exchange rates prevailing at year-end, is considered to approximate their fair value. The fair value of certain financial assets carried at cost including cash and due from banks, deposits with banks and other financial asset is considered to approximate their respective carrying value due to their short-term nature. The fair value of investment securities has been estimated based on the market prices at balance sheet dates. The trade receivables are carried at amortized cost using the effective yield method less provision for doubtful receivables, and hence are considered to approximate their fair values. Financial liabilities The fair value of funds borrowed and other monetary liabilities are considered to approximate their respective carrying value. Long-term borrowings, which are principally at variable rates and denominated in foreign currencies, are translated at year-end exchange rates and accordingly their carrying amount approximate their fair value. Trade payables are stated at amortized cost using the effective interest method, and accordingly their carrying amounts approximate their fair value. 234 DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 36-ASSETS AS HELD FOR SALE AND DISCONTINUED OPERATIONS The details of the disposal of subsidiaries and assets and disposal plans on the property, plant and equipment of the Group as of 31 December 2013 and 31 December 2012 are as follows: a) Transfer of Shares of Subsidiaries and Asset Sale In relation to the transfer of shares of subsidiaries and asset sale for the year ending 31 December 2013 and 2012; operating results related with the mentioned sales have been reclassified as discontinued operations in the consolidated financial statements as of 31 December 2012 for comparative purposes. Doğan Müzik Kitap Sale 49.999.996 (exact) shares of Doğan Müzik Kitap Mağazacılık ve Pazarlama A.Ş., a subsidiary of the Group, with a nominal value of TL 1 (exact) each, in which it holds 99,99% participation amounting to TL 39.891 of paid capital from TL 50.000 capital has been sold to Doğan Holding as of 16 January 2012 in consideration of TL 139.404 which is determined by two different valuation reports prepared by independent valuation firms. The related transaction is considered as the controlling party transaction and income amounting to TL 107.990 is recognized in equity. For comparative purposes, operating results of Doğan Müzik Kitap as of 31 December 2011 are also classified under the discontinued operations account in the consolidated financial statements prepared as of 31 December 2012. 31 December 2011 287.536 (181.723) Sales Cost of sales (-) Gross profit 105.813 Marketing, sales and distribution expenses (-) General administration expenses (-) Other operating income Other operating expenses Financial income Financial expenses (86.215) (8.967) 1.854 (893) 2.937 (6.584) Profit before income tax from discontinued operations 7.945 Tax expense from discontinued operations Current period tax charge Deferred tax (charge)/benefit Net profit from discontinued operations prior to sale proceeds from the disposal of brand and subsidiary shares Gain on sale of brand and subsidiary shares Sales income tax expense (5.269) (1.409) (3.860) 2.676 - Discontinued operations Net profit from discontinued operations (after income taxes) 2.676 DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT 235 Hızlı Bir Bakış Faaliyetler Sürdürülebilirlik Kurumsal Yönetim Kâr Dağıtımı Finansal Bilgiler DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 36-ASSETS AS HELD FOR SALE AND DISCONTINUED OPERATIONS (Continued) a) Transfer of Shares of Subsidiaries and Asset Sale(Continued) Sale of Doğan Müzik Kitap (Continued) As of 31 December 2012, the Group has TL 107.990 of subsidiary shares’ sales income from the sale and transfer of shares of Doğan Müzik Kitap Mağazacılık ve Pazarlama A.Ş.’s as at 16 January 2012. The related sales income amount is recognized under equity in accordance with TFRS. 31 December 2011 Amount received Carrying value of net assets 139.404 (31.414) Sales income 107.990 Net Amount received from sale of brand and subsidiary shares 31 December 2011 Current assets Cash and cash equivalents Trade receivables Inventories Other current assets Non-current assets Property, plant and equipment Intangible assets Other non-current assets Deferred tax assets Current liabilities Trade payables Other current liabilities Current period tax charge Non-current liabilities Provision for employee termination benefits Deferred tax liability Non-controlling interests Net assets disposed of from scope of consolidation Gain from sale 40.804 1.334 51.052 3.062 16.938 3.221 89 20 (78.416) (5.503) (898) (136) (35) (118) 31.414 107.990 Net Amount received from sale of brand and subsidiary shares Cash and cash equivalents received Less: Cash and cash equivalents of sold subsidiary 236 DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT 139.404 (40.804) 98.600 DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 36-ASSETS AS HELD FOR SALE AND DISCONTINUED OPERATIONS (Continued) b) Subsidiaries classified as asset as held for sale As of November 2013, Hürriyet, a subsidiary of the Group, has decided to dispose of its subsidiaries operating in Hungary and Croatia and classified the assets and liabilities of these companies as non-current assets as held for sale and therefore disclosed separately in the balance sheet. As of 28 February 2014, the Group transferred its subsidiary, Oglasnik d.o.o. to non-controlling interests for 2 Kuna. Details of the assets and liabilities held for sale are as follows: Assets and Liabilities 31 December 2013 Cash and cash equivalents Trade receivables Other receivable and other current assets Intangible assets Property, plant and equipment Provision related to disposal of net assets 1.009 894 969 27.265 2.442 (23.301) Total assets classified as asset as held for sale 9.278 Trade payables Other financial liabilities Other payables Deferred tax liability Other non-current liabilities 2.440 1.012 34 5.760 32 Total liabilities classified as asset as held for sale 9.278 In addition, Hürriyet, one of the subsidiaries of the Group, has agreed to sell its land of 17.725,69 m2 located in the district of İstanbul, Esenyurt for US Dollars 9 thousand. As a result of this agreement, the land has been reclassified as asset held for sale. Assets 31 December 2013 Property, plant and equipment 4.685 Total assets classified as asset as held for sale 4.685 DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT 237 Hızlı Bir Bakış Faaliyetler Sürdürülebilirlik Kurumsal Yönetim Kâr Dağıtımı Finansal Bilgiler DOĞAN YAYIN HOLDİNG A.Ş. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.) NOTE 36-ASSETS AS HELD FOR SALE AND DISCONTINUED OPERATIONS (Continued) c) Discontinued operations As of November 2013, Hürriyet, a subsidiary of the Group, has decided to dispose of its subsidiaries operating in Hungary and Croatia and classified the operations of these subsidiaries as discontinued operation. Net result of discontinued operations 2013 Sales Cost of sales (-) General administrative expenses (-) Marketing, selling and distribution expenses (-) Other income from operating activities Other expenses from operating activities (-) Finance expenses (-) Loss for the period before income taxes Tax income Net loss Impairment provision for disposed net assets 10.611 (5.832) (6.728) (2.109) 3.900 (1.450) (48) (1.656) 373 (1.283) (23.301) Loss after tax from discontinued operations (24.584) NOTE 37-SUBSEQUENT EVENTS Non-Binding Revised Proposal Regarding the Acquisition of Majority Shares of Digitürk - As at 17 January 2014, Doğan TV Holding, subsidiary of the Group, submitted a non-binding revised proposal through its financial advisors to Çukurova Holding A.Ş. and Savings Deposit Insurance Fund to raise the proposal amount in relation to the acquisition and transfer of 53% of Çukurova Holding A.Ş.’s shares in Krea İçerik Hizmetleri ve Prodüksiyon A.Ş. (“Digitürk”), assuming Digitürk’s net cash (liability) is “nil” and has no preferred shares. The bid for the non-binding revised proposal in consideration of the share acquisition of 53% interest is USD 879.450. The bid for the non-binding revised proposal in consideration of the share acquisition of 100% shares of Digitürk is USD 1.650.000. Compared to the pre-offer of Doğan TV in September 2013, the bid for the revised proposal is raised by 18% in terms of USD and is raised by 29% in terms of TL over the respective dates of currencies [Foreign exchange rates: 2 September 2013 1 USD = TL 2.0179 and 16 January 2014 1 USD = TL 2.2080]. On the other hand, Doğan TV aims to increase its share percentage to 100% in Digitürk. The non-binding revised proposal is prepared based on publicly available limited information on the operations of Digitürk and market intelligence and it reflects Doğan TV’s long-term expectations on Digitürk and its belief in its potential synergy. Therefore, the non-binding revised proposal is based on significant assumptions which need to be confirmed in the course of detailed investigation (“Due Diligence”) process. Approval of Financial Statements The consolidated financial statements for the year ended 31 December 2013 were approved by the Board of Directors on 7 March 2014. Other than Board of Directors has no authority to change financial statements. 238 DOĞAN YAYIN HOLDİNG 2013 ANNUAL REPORT CONTENTS At a Glance 02 08 10 12 14 16 18 Who are We? Our Values Our Road Map Our Management Structure Shareholders and Share Performance Message from the Chairwoman Message from the Ceo Operations 22 Highlights of the Year 24 Dyh and the Turkish Media Sector 26 Newspaper Publishing, Printing, Distribution and Trade 28 Magazine and Book Publishing 30 Online Platform 32 Television, Radio and Music Broadcasting and Production 36Digital Tv Platform 37 Other Operations 38 Segment Operations in 2013 Sustainability 42 Corporate Social Responsibility 55 Sustainable Growth and the Environment 55 Doğan Group’s Environmental Policy 56 Doğan Yayın Holding’s Environmental Projects 61 Code of Ethics and Conduct 65 Media Code of Conduct 68 Occupational Health and Safety 70 Human Resources Corporate Governance 72 73 74 76 97 102 103 104 105 Remuneration Policy Internal Audit and Control Risk Management Corporate Governance Principles Compliance Report Other Obligatory Disclosures Audit Committee Resolution Corporate Governance Committee Resolution Board of Director’s Statement of Responsibility on the Approval of the Reports Board of Director’s Resolution on the Approval of the Reports Dividend Distribution 106 Dividend Distribution Policy 107 Dividend Distribution Proposal 108 Dividend Distribution Statement 109 Opinion Letter of the Independent Audit Company on the Annual Report Financial Information 111 Consolidated Financial Statements and Independent Auditor’s Report We enlighten ALL SEGMENTS of society DOĞAN YAYIN HOLDİNG A.Ş. 2013 ANNUAL REPORT DOĞAN YAYIN HOLDİNG A.Ş. 2013 ANNUAL REPORT Doğan Yayın Holding A.Ş. Burhaniye Mahallesi Kısıklı Caddesi No: 65 Altunizade 34676 Üsküdar/İSTANBUL/TURKEY Phone: +90 216 556 90 00 Fax: +90 216 556 91 47 www.dyh.com.tr This annual report was printed on the 100% recycled paper. During production, no damage were wormed trees.