Do¤an Holding Annual Report 2005

Transcription

Do¤an Holding
Annual Report 2005
SUMMARY BALANCE SHEETS
ASSETS
SEGMENT ANALYSIS OF
FINANCIAL RESULTS
As of December 31, 2005
ENERGY
7,596
10.1%
17.6%
60.4%
MEDIA
1,616
0.7%
11.2%
OTHER
592
REVENUES (YTL Million)
OTHER
382
Total Non-Current Assets 60.4%
Trade Receivables 17.6%
MEDIA
125
Cash and Cash Equivalents 11.2%
ENERGY
202
Other Current Assets 10.1%
Marketable Securities 0.7%
OPERATING PROFIT (YTL Million)
LIABILITIES AND SHAREHOLDERS’ EQUITY
8.6%
8.6%
ENERGY
4,708
1.2%
OTHER
5,094
MEDIA
3,250
9.1%
9.1%
33.1%
10.0%
10.0%
TOTAL ASSETS (YTL Million)
33.1%
12.4%
ENERGY
166
25.6%
Total Shareholders’ Equity 33.1%
Total Non-Current Liabilities 25.6%
MEDIA
101
Trade Payables 12.4%
Minority Interest 10.0%
OTHER
25
Other Financial Liabilities 9.1%
Short-Term Borrowings 8.6%
Other Current Liabilities 1.2%
CAPITAL EXPENDITURES (YTL Million)
DO⁄AN HOLD‹NG 2005 ANNUAL REPORT
Consolidated
Financial Highlights
SUMMARY INCOME STATEMENTS
(USD million)
2005
SALES (NET)
7,307
OPERATING EXPENSES
(409)
OPERATING PROFIT
528
NET INCOME
474
CONTENTS
01 The Do¤an Group
02 Performance of Shares
04 The Do¤an Group in Brief
06 Message from the Chairman
10 Message from the CEO
14 Board of Directors
19 Executive Commitee
20 Corporate Governance & Sustainability
22 Holding Functions
34 Energy
40 Industry
50 Trade
58 Tourism
64 Insurance
68 Media
110 Social Responsibility
117 Principles of Corporate Governance Compliance Report
129 Consolidated Financial Statements at 31 December 2005 Together with Auditor’s Report
Consolidated
Financial Highlights
SUMMARY BALANCE SHEETS
(USD million)
TOTAL CURRENT ASSETS
Cash and Cash Equivalents
Marketable Securities
Trade Receivables
Other Current Assets
TOTAL NON-CURRENT ASSETS
2005
2,363
670
44
1,048
601
3,604
Property, Plant and Equipment
1,180
Goodwill/Negative Goodwill
2,093
Other Non-Current Assets
331
TOTAL ASSETS
5,967
TOTAL CURRENT LIABILITIES
1,923
Short-Term Borrowings
503
Other Financial Liabilities
536
Trade Payables
728
Insurance Technical Reserves
85
Other Current Liabilities
71
TOTAL NON-CURRENT LIABILITIES
1,508
Long-Term Borrowings
983
Other Non-Current Liabilities
525
TOTAL SHAREHOLDERS’ EQUITY
MINORITY INTEREST
1,946
590
TOTAL LIABILITIES, MINORITY INTEREST AND
SHAREHOLDERS’ EQUITY
5,967
01
The Do¤an Group
DO⁄AN HOLDING
ENERGY
Petrol Ofisi
Erk Oil Investments
Petrol Ofisi International Oil Trading
PO Oil Financing Ltd.
PO Petrofinance N.V.
Cyprus Turkish Oil Ltd. (Kipet)
PO Alternatif Yak›tlar Toptan Sat›fl A.fi. (POAY)
Petrol Ofisi Gaz ‹letim A.fi. (POG‹)
Petrol Ofisi (UK) Limited
INDUSTRY
Çelik Halat
Ditafl
Do¤an Organic Products
TRADE
Do¤an Otomobilcilik
Milpa
Hürriyet Pazarlama
TOURISM
Milta
Milta Bodrum Marina
Majesty Club Kemer Beach Holiday Village
Club Milta Holiday Village
Ifl›l Tur
Do¤an Air
INSURANCE
Ray Sigorta
DO⁄AN YAYIN HOLDING
NEWSPAPERS
Hürriyet
Milliyet
Radikal
Posta
Fanatik
Fanatik Basket
Gözcü
Referans
Turkish Daily News
BROADCASTING AND PRODUCTION
TV CHANNELS
Kanal D
Star TV
CNN TÜRK
CABLE TV CHANNELS
Fenerbahçe TV*
Befliktafl TV*
Dream TV
Dream Türk TV
Fix TV
RADIO STATIONS
Radyo D
Slow Türk
CNN TÜRK Radio
PRODUCTION
DIGITAL MEDIA
Do¤an Online
Ultra Kablo
Yenibir
Hepsiburada.com
MAGAZINES AND BOOKS
Do¤an Burda
Do¤an Books
Do¤an Egmont Publishing
Katalog Yay›n ve Tan›t›m Hizmetleri
DISTRIBUTION AND RETAILING
DPP
Yaysat
D&R
PRINTING
Do¤an Printing Centers
Do¤an Ofset
SUPPORT SERVICES
Do¤an News Agency
Do¤an Factoring
Do¤an D›fl Ticaret
PRESENCE IN EUROPE
DMG International
Euro D
D Productions
Galaxyteknik
Do¤an Music Company
* TECHNICAL SERVICES OF THESE CHANNELS ARE PROVIDED BY THE DYH BROADCASTING NETWORK.
02
Performance of Shares
Price Comparisons
29.12.2004 Closing Price
Do¤an Holding
30.12.2005 Closing Price
YTL
USD
YTL
USD
Change (YTL)
Change (USD)
2.76
2.04
4.25
3.17
53.85%
55.07%
Petrol Ofisi
3.63
2.69
6.13
4.57
68.79%
70.13%
Milpa
1.28
0.95
2.39
1.78
86.72%
88.21%
Ray Sigorta
1.13
0.84
2.08
1.55
84.07%
85.54%
Ditafl Do¤an
65.50
48.43
86.50
64.47
32.06%
33.11%
2.35
1.74
5.10
3.80
117.02%
118.75%
Çelik Halat
Do¤an Yay›n Holding
3.18
2.35
5.35
3.99
68.10%
69.44%
Hürriyet
3.07
2.27
5.18
3.86
68.72%
70.07%
Do¤an Gazetecilik
2.60
1.92
3.84
2.86
47.69%
48.87%
Do¤an Burda
4.14
3.06
6.75
5.03
63.19%
64.50%
Foreign Shareholding in Publicly-Held Shares
29.12.2004
Do¤an Holding
Petrol Ofisi
30.12.2005
Publicly-Held
Shares*
Foreign Share
Publicly-Held
Shares*
Foreign Share
Change in Foreign
Share (%)
34.29%
32.38%
34.29%
55.60%
71.71%
5.15%
0.52%
7.02%
6.90%
1226.92%
Milpa
34.50%
0.60%
34.50%
20.50%
3316.67%
Ray Sigorta
27.01%
0.00%
21.80%
13.40%
100.00%
Ditafl Do¤an
47.93%
0.00%
47.93%
0.00%
-
Çelik Halat
37.56%
0.00%
37.56%
0.00%
-
Do¤an Yay›n Holding
30.06%
81.20%
30.29%
89.40%
10.10%
Hürriyet
40.00%
86.80%
40.00%
93.10%
7.26%
Do¤an Gazetecilik
24.86%
15.70%
24.86%
49.90%
217.83%
Do¤an Burda
15.07%
73.20%
19.28%
82.50%
12.70%
*FIGURES USED TO CALCULATE THE ISE INDEX ON THE RELEVANT DAY HAVE BEEN USED TO CALCULATE PUBLIC SHAREHOLDING.
03
2,411.1
The Do¤an Holding shares on the ISE (traded with ticker symbol
DOHOL) showed a sound performance in 2005 increasing the market
value of the Company by 55% to USD 2,411 million at the end of the
year. Owing to sound management practices at Do¤an Holding which
1,129.4
1,554.8
fully abides by the principles of corporate governance and enterprise
risk management, as well as the robust financial performance Do¤an
Holding and its subsidiaries, positively affected foreign interest, as a
result, the share of foreign investors in DOHOL stock rose from 32.38%
to 55.60% at the end of 2005. The DOHOL stock price increased from
USD 2.04 per share at the end of the previous year to USD 3.17 per
55.07% on a US dollar basis.
2005
2004
2003
Strong foreign interest in Do¤an Holding subsidiary shares is evidenced
2002
2001
358.7
397.3
share by the end of 2005, earning investors a notable capital gain of
MARKET CAPITALIZATION (USD MILLION)
by an 89.4% foreign investment in Do¤an Yay›n Holding’s publiclytraded shares, 93.1% in Hürriyet’s and 82.5% in Do¤an Burda. Some
of subsidiary shares recorded exceptionally high returns as capital gain
among which Milpa, Ray Sigorta and Çelik Halat are worth mentioning
with returns of 88.21%, 85.54% and 118.75%, respectively, on a US
dollar basis. Other publicly-traded companies within the Group also
55.6
earned their investors high returns. Petrol Ofisi stock appreciated by
70.13% by the end of 2005 compared to its price a year ago, Do¤an
Yay›n Holding stock by 69.44% and Hürriyet stock by 70.07% in the
2005
2004
2003
2002
2001
6.1
12.0
17.6
32.3
same period.
FOREIGNERS' SECURITIES CUSTODY ACCOUNTS (%)
04
The Do¤an Group in Brief
With an energetic and highly motivated top management team,
Do¤an Holding looks confidently to a future where it becomes a major
regional player within Europe, Central Asia and the Middle East.
There are common fundamentals in all successful companies today
Keen on sharing economic benefits with society, 34% of Do¤an Holding
irrespective of their line of business: prudence in managing risk while
shares are publicly held while Adilbey Holding and the Do¤an Family
maintaining sustainable growth, creation of value for all stakeholders,
jointly maintain a 66% interest. This ownership structure reflects the
responsibility as a corporate citizen and concern for the sustainability
highest percentage of publicly traded stock of any group in Turkey. In
of society and the environment. These universal guidelines are the
addition to Do¤an Holding, nine other Group Companies are listed and
basic reasons for Do¤an Holding’s success in today’s fast changing
traded on the Istanbul Stock Exchange (ISE). These currently include
and intensely competitive world.
Do¤an Yay›n Holding, Ray Sigorta, Milpa, Çelik Halat, Ditafl, Hürriyet,
Tracing its beginnings to the 1950s, Do¤an Holding today ranks among
Milliyet, Petrol Ofisi and Do¤an Burda.
Turkey’s top five conglomerates. The small trading house started
Do¤an Holding takes pride in being one of the very first business groups
growing in the post-World War II era when Turkey initiated industrialization
to adopt principles of sound corporate governance - long before they
and modernization of its long neglected economy. One of the
became legal requirements of the Capital Markets Board in Turkey.
competencies of the Holding is investing in vital sectors of the economy
- helping the country and itself to prosper. Mirroring trends in the new
economy, lately, the Holding has shifted its focus to providing services.
Further concentrating its focus on core competencies, Do¤an Holding
exited the banking sector in 2005 while raising its shareholding in
As one of the foremost corporate contributors to national wealth through
diligent taxpaying and philanthropic activities, the Group has consistently
been ranked among the top corporate taxpayers. Additionally, The
Ayd›n Do¤an Foundation has spent in excess of USD 10 million for
social and cultural programs to date.
Petrol Ofisi, its oil and gas distribution arm, and acquiring Star TV, a
significant national media asset. Thus, after exiting one sector, the
With an energetic and highly motivated top management team, Do¤an
Holding’s efforts have been redoubled in two others. Currently, Do¤an
Holding looks confidently to a future where it becomes a major regional
Holding Company has an interest in five primary business areas: energy
player within Europe, Central Asia and the Middle East.
distribution, media, insurance, tourism as well as industry and trade.
06
Message from the
Chairman
Ayd›n Do¤an
Any major multi-national planning to enter the Turkish market must
have a strong local partner to effectively launch its products and services.
We, at Do¤an Holding, have chosen a path where we favor international
partnerships and strategic alliances in many of our business units,
including oil and gas distribution, media, broadcasting and tourism.
Dear shareholders, colleagues and business partners,
The year 2005 was another year of the ongoing fight against terrorism
worldwide, with mixed results. The turmoil continued in Iraq, though
unemployment at long last from a peak of 9.0% at the end of 2004 to
8.7% in 2005. EU inflation will increase slightly to 2.3% this year due
to oil prices, though still well under control.
free elections were held for the first time in the nation’s history. Israel
The past year saw the US dollar gain in value against the euro and
withdrew from the Gaza Strip while terrorist bombings occurred in
yen, despite the ever-increasing federal deficit, as the Federal Reserve
London and Jordan. The continuing saga surrounding Iran’s nuclear
continued to raise its benchmark interest rates. This looks set to
initiatives showed that uncertainty and instability would dog the Middle
continue as the Fed’s new chairman vows to keep inflation under
East in the near term. However, I am optimistic for the future of the
control in the face of increasing inflationary pressures due to persistently
region.
high energy prices. Even in the face of rising interest rates, and even
Natural disasters also headlined the news throughout the year 2005.
From the tsunami which devastated large swathes of Asia at the end
of 2004, to Hurricane Katrina which uprooted hundreds of thousands
faster rising oil prices which reached a record USD 70 per barrel midyear, US consumer confidence held steady and spending continued
unabated fueling real GDP growth at a healthy clip for the year.
in the United States to the crippling earthquake in South Asia in October,
With Japan’s economy seemingly back on track, in spite of Europe’s
the economic and human toll was enormous and felt around the world.
relatively flagging economies the global economy is expected to achieve
On the economic front, supported by strong financial results and high
corporate profits, the revival of business investment is expected to
continue in the US in spite of rising interest rates. Japan appears to
real growth in 2006, albeit at a slower rate than 2005. Still, high oil
prices have resulted in upward inflationary pressure across the globe
and remain a concern for many economies including our own.
be on the rebound after years of stagnation, and Europe’s economies
At home, propelled by buoyant private business investment and
are generally showing positive upturns.
consumer spending, GDP growth exceeded expectations in 2005 by
Economic activity grew about 1.5% in the European Union in 2005
and looks set to return to its long term growth potential in 2006 of 2%.
The main economic growth driver is domestic demand, and in particular
private investment, spurred by a recovery in consumer and business
confidence since mid 2005. The EU is also expected to reduce
reaching 7.6%, and should stabilize at about 5% for 2006. Record
exports are expected for the year, with total foreign trade reaching over
USD 200 billion. Foreign direct investment is up sharply for the year,
as foreign companies express confidence in our economy by making
sizable investments across sectors.
07
The inflation rate in Turkey has continued to drop toward a level
October 3, 2005 marked a momentous occasion in modern Turkish
comparable to that of the Euro zone. However, the steadily rising price
history: the formal start of European Union accession talks. After many
of oil has exerted extraordinary pressure on the Central Bank to raise
years, Turkey has proven that it is a worthy candidate for full membership
interest rates. We must remain vigilant not to permit inflation raise its
in the world’s largest economic area. The journey for Turkey will be
dreaded head. The transition to the new currency, the YTL, took place
long and challenging. The process of adopting and implementing the
this year and our national currency has regained its well-deserved
many legal, economic and social reforms will be trying and not without
stability and respect, the occasional macroeconomic or externally
pain. However, Turkey is already seeing the benefits of being on the
induced financial hiccup notwithstanding.
EU accession path, and will reap more along the way. Turkey has a
We expect that monetary and fiscal policies will continue to be strictly
adhered to while the ambitious structural reform agenda will be carefully
implemented as domestic and international confidence in the Turkish
economy continues to grow. Gains from this growth should be allocated
to reduce public debt to improve fiscal sustainability and rein in the
relatively young and growing population when compared to the vast
majority of EU member states. This is an important strategic advantage
for EU companies seeking a market for their products and services
outside their native countries. In the end, both the EU and Turkey will
gain much by Turkey becoming a full member of the European Union.
growing current account deficit which must be addressed. There are
We must continue to play by global economic rules and be competitive
fears that the Turkish lira may experience a sharp devaluation somewhere
not only at home, but also abroad. As we have seen to date, this strategy
in the first half of 2006 if measures are not taken to curb some pending
results in more direct foreign investment, helps solve our capital
issues.
deficiency issues and makes us a stronger player on the world’s
economic stage.
08
Message from the Chairman
As the composition of the population shifts from rural to urban areas,
the need for education exponentially rises, sometimes beyond the
reach of governmental budgets. We believe it is our responsibility to
assist in the education of Turkey’s youth by building schools and other
training institutions through the Ayd›n Do¤an Foundation.
Turkey should continue to forge international alliances and partnerships
needed. This will be possible if we strictly implement the four pillars
with leading companies around the world. Any major multi-national
of good corporate governance: accountability, responsibility, transparency
planning to enter the Turkish market must have a strong local partner
and fairness. These values create the trust between every stakeholder
to effectively launch its products and services. We, at Do¤an Holding,
and all economic institutions.
have chosen a path where we favor international partnerships and
strategic alliances in many of our business units, including oil and gas
distribution, media, broadcasting and tourism.
As the composition of the population shifts from rural to urban areas,
the need for education exponentially rises, sometimes beyond the
reach of governmental budgets. We believe it is our responsibility to
In addition we find that focusing on one’s core competencies is more
assist in the education of Turkey’s youth by building schools and other
effective within the highly competitive global economy. With this strategy
training institutions through the Ayd›n Do¤an Foundation.
in mind, Do¤an Holding has exited the banking sector in 2005 to focus
on our core businesses of media and oil and gas distribution. Further
to this goal, we increased our shareholding in Petrol Ofisi to nearly
93% to eventually partner with OMV, a leading Austrian industrial
conglomerate, and acquired Star TV, a significant media asset, from
the Savings Deposit Insurance Fund (SDIF). This demonstrates our
strategy that in today’s environment it is better to be world-class
In addition, we organize cultural events and activities which contribute
to the intellectual wealth of Turkish citizens. For this purpose, for many
years we have organized the annual Ayd›n Do¤an International Cartoon
Competition and the Ayd›n Do¤an Awards. As we continue to invest
in Turkey’s future creating value for our Company and all stakeholders,
our contribution to social responsibility projects has become more
important than ever.
competitors in a few sectors rather than jeopardizing what we have by
spreading ourselves too thin across unrelated businesses.
I would like to express my gratitude once again to all members of our
extended family - our stakeholders, business partners and employees.
As international business standards increasingly dictate, we abide by
the rules of corporate governance as we go about our routine business.
We are fully aware that a company may only succeed in the long-term
and attain sustainable growth if it is capable of raising funds both from
ongoing operations and from investors when further expansion is
As we look forward to a more prosperous future full of even greater
achievement, we believe that with our energy we will maintain our
Group’s position at the forefront of the Turkish business community.
10
Message from the
CEO
Tufan Darbaz
As a reflection of our own achievements, Do¤an Holding shares traded
on the Istanbul Stock Exchange have increased 55% in market value
since the beginning of the year. In addition, the share of foreign funds
in the portion of publicly traded Do¤an Holding shares rose from 32%
to 56%. This increase is the most significant indicator of the confidence
shown in our company by foreign investors.
Valued shareholders, partners and associates,
I would like to present to you with a brief overview of the year 2005 for
Turkey, and then share with you the highlights of Do¤an Holding’s
operations for the year.
Indisputably, 2005 will be remembered as a year when critical steps
were taken and important developments occurred that will affect and
guide the course of Turkey’s future. The measures enacted during the
year have led to further macroeconomic normalization and steady
growth in the aftermath of economic crises of the recent past.
GDP growth in 2005 exceeded the government’s targets, achieving a
7.6% rise in real terms. However, it is unlikely that a growth of this
magnitude will be achieved again in 2006. Economic indicators point
out to a more moderate growth rate of about 5% in 2006 and the
following years when growth rate is expected to stabilize.
While the economy grows in real terms, inflation continues its downward
descent in line with the targets set by the government. The budget
deficit, although increasing in absolute terms, is falling relative to the
overall size of the ever-growing economy. The primary surplus, observed
in recent years, raised hopes that the budgetary discipline achieved
in managing expenses may be reflected onto government’s debt
management as well. Income from tourism and exports is expected to
reach record levels by the end of the year. By strictly adhering to
macroeconomic policies advocated by the IMF, Turkey has taken
11
advantage of its primary budget surplus in its stance in domestic and
be adopted in a wide range of areas including public procurement,
foreign markets. Except for the current account deficit and
competition, economic and monetary matters, social welfare and
unemployment, most of the country’s economic indicators seem to be
employment, transport, enterprise and industry, and food safety,
well under control and following a positive trend. International trade
veterinary medicine and phytosanitation. Industries ranging from
volume is expected to exceed USD 200 billion in 2006.
financial services and media to agriculture, energy and fisheries are
Oil prices, on the rise since the middle of 2004, reached a record level
of USD 70 per barrel in 2005. While the repercussion of this was a
hike in prices in most countries in the world resulting in increased
inflation, in Turkey, inflation continued its downward trend, dropping
to near European averages. The transition to the New Turkish Lira
(YTL) was fully executed this year, resulting in stability and well-deserved
respect for our national currency.
Structural reforms still to be undertaken, as encouraged by the European
Union and the IMF program, will further serve to enhance Turkey’s
economic potential and create an increasingly favorable environment
for foreign investors. It is immensely satisfying to see that foreign capital
interest in Turkey has begun to be converted into concrete transactions
and activities immediately after the start of EU membership talks.
The prospective structural reforms will provide for the free movement
of goods and workers, the right of settlement for foreigners and freedom
to provide services, and the free movement of capital within the country.
In addition, legislation governing key areas such as company law,
intellectual property law and taxation will be modified to introduce a
more investor friendly legal environment. New governmental policy will
all due to be affected by the introduction of new regulations to attract
investment. Education, research and development, public health and
environmental policies are also expected to be overhauled. In short,
almost every aspect of the Turkish economy is planned to be reformed.
Clearly, this is a gargantuan undertaking, but such radical reforms are
vital to keep Turkey on the path to realization of its full economic
potential.
As a reflection of our own achievements, Do¤an Holding shares traded
on the Istanbul Stock Exchange have increased 55% in market value
since the beginning of the year. In addition, the share of foreign funds
in the portion of publicly traded Do¤an Holding shares rose from 32%
to 56%. This increase is the most significant indicator of the confidence
shown in our company by foreign investors.
After being involved in the banking business for many years, Do¤an
Group executed a major portion of its long-term restructuring strategy
by selling D›flbank to the Fortis Group in July 2005, thus exiting from
the sector. Shortly thereafter, in September, the Holding took a significant
leap forward by taking over the shares of the ‹fl Bankas› Group in the
leading fuel products distribution company, Petrol Ofisi, thus raising
12
Message from the CEO
In line with our target of growth in the energy and media sectors,
Do¤an Group closely monitors privatization projects that can be used
to strengthen our efforts in international content distribution. While
striving to become a regional media force through our initiatives in
neighboring countries, the Group also seeks to become a major player
in the regional energy distribution business.
Do¤an Holding’s share in the company from 44.31% to 88.86%. This
Parallel to the growth by 40% of promotional expenses by the media
ratio rose further to 92.98% with the completion of the call on October
companies in Turkey in 2005, Do¤an Yay›n Holding revenues increased
31. The third major undertaking of the Do¤an Group in 2005 was
by 22%, reaching USD 1,276 million.
adding Star TV to its media network, acquiring this enterprise through
a sale of Star Media Group companies by Turkey’s Savings Deposit
Insurance Fund (SDIF).
After withdrawing from the banking sector, our Group is now primarily
involved in energy distribution and media, while remaining active in
insurance, tourism, industry and trade. All branches of our business,
In the area of trade, it appears that the business center and residential
projects developed by Milpa and Hürriyet Marketing will be putting
their stamp on the coming years.
Ditafl and Çelik Halat remain leaders in their respective sectors, while
Ray Insurance and Milta Tourism have also experienced a fruitful year
in their business areas.
and particularly our principal areas of operations, displayed very
satisfactory and positive results by the end of year.
A project that we regard as a reflection of our serious focus on social
responsibility, Do¤an Organik Ürünler Sanayi ve Ticaret A.fi. has
Parallel to its strategy for growth, Do¤an Group, after withdrawing from
the banking sector, continues to contribute in an ever increasing
accelerated its activities in Kelkit-Gümüflhane as a social investment
project, becoming the first Turkish manufacturer of organic milk.
manner to the Turkish economy. The year 2005 was indeed a very
dynamic year for the Do¤an Group in this respect, a year in which
In line with our target of growth in the energy and media sectors, Do¤an
many important initiatives were taken.
Group closely monitors privatization projects that can be used to
strengthen our efforts in international content distribution. While striving
The year 2005 was also a positive year for Petrol Ofisi. As the company
with the highest market share in the sector, Petrol Ofisi sales increased
over the 12-month period by 14% compared to the previous year,
to become a regional media force through our initiatives in neighboring
countries, the Group also seeks to become a major player in the regional
energy distribution business.
reaching USD 8.8 billion. Benefiting from regulatory liberalization that
was effected at the beginning of the year, the Company’s EBITDA
Thanks to our concentrated activities and our ability to step forward
increased by 12%, to USD 375 million. Net profit outside of the net
at the right time, our financial results have shown a significant positive
monetary profit earned by virtue of the 2004 inflation accounting system
development when compared with the year before. As of December
surged by 219%, climbing to YTL 161 million.
31, 2005, according to our consolidated financial figures, set forth in
13
keeping with International Financial Reporting Standards, our net
agreement on the sale of 34% of Petrol Ofisi shares in March 2006 to
revenues have grown by 50% over the past year, reaching YTL 9,804
OMV for USD 1,054 million. At the conclusion of this transaction,
million. Net profit for the period has shown a striking increase of 142%,
Do¤an Holding’s share in Petrol Ofisi’s capital will decrease from 86.7%
rising to YTL 636 million.
to 52.7%.
With its twin engines of growth in the energy and media sectors, Do¤an
Thus, Do¤an Group is clearly continuing its forward momentum from
Group has made significant contributions to the steady growth of the
2005 into 2006. If the following quarters are anything like the first, we
Turkish economy. Its contribution in terms of taxes paid, which was
are in for another banner year.
YTL 5.4 billion in 2004, rose to YTL 6.3 billion in 2005.
As we build all our operations around constructive motivation and open
As a result of our highly positive performance in 2005, investors have
lines of communication between our shareholders, business partners
shown increasing interest in Do¤an Group. Already, in the first quarter
and employees, Do¤an Holding will continue to prosper in all of its
of 2006, the Group has executed two significant transactions with
business lines. I would like to take this opportunity to extend my
foreign investors; the Fortis Group and OMV Group.
gratitude to all we owe much of our success to. Your support and
Discussions were held with Central Europe’s leading oil and gas
company, OMV Aktiengesellschaft on matters concerning refineries,
oil exploration, production and supply. The discussions resulted in an
endorsement will continue to be the driving force behind our future
achievements.
14
Board of Directors
AYDIN DO⁄AN
Born in 1936 as a member of an old family in Kelkit, Aydin Do¤an
received elementary and secondary school education there and later
completed high-school in Erzincan. From 1956 to 1960, Mr. Do¤an
attended Istanbul Economy and Commerce Academy where his
leadership qualities were first recognized to help him become the
Student Community Leader.
In 1958, while still a student, Mr. Do¤an started his professional life
trading construction equipment, along with passenger and commercial
vehicles. In 1961, he founded his own wholesale trade company.
Mr. Do¤an founded his first industrial company in 1974 and joined
both the Assembly and the Administrative Board of Istanbul Chamber
of Commerce. In the years that followed, he served as a board member
in the Union of Chambers and Commodity Exchanges of Turkey.
Mr. Do¤an became a publisher with the acquisition of the daily
newspaper Milliyet in 1979. With the addition of the prestigious daily
newspaper Hürriyet in 1994, he bolstered his presence in the media.
Between 1986 and 1996, Mr. Do¤an served as the head of the
Association of Turkish Newspaper Publishers. At the World Association
of Newspapers meeting held in Tokyo in 1998, Mr. Do¤an was elected
the first Turkish board member and in 1999, was awarded Turkey's
Outstanding Service Medal by the Turkish Government. He received
four honorary doctorates in 1999, 2000, 2001 and 2005 respectively
from Girne American University, Eagean University, Baku State University
and Marmara University.
He established the Ayd›n Do¤an Foundation in 1996, bringing the
social, cultural, educational activities of the Do¤an Group under the
same umbrella. To date, eight schools and a large sports complex have
been built and named after him and his family members. While mainly
focusing on education, the Foundation is also involved in organizing
national and international conferences, conventions and seminars on
economic, social, cultural and scientific issues. As part of its social
and cultural activities, the Foundation also conducts national and
international competitions and awards prizes, such as the Ayd›n Do¤an
Award and the Ayd›n Do¤an International Cartoon Competition, the
world's largest and most respected in this field.
Since 1977, Mr. Do¤an has been the top taxpayer registered with the
Istanbul Chamber of Commerce several times. Out of his original
company founded with three employees in 1961, Mr. Do¤an created
one of Turkey's top three largest conglomerates with over 11,000
employees. Today, Do¤an Group is active in the fields of energy
distribution, media, industry, trade, tourism and insurance.
Mr. Do¤an is married and has four children and four grandchildren.
‹MRE BARMANBEK
Born in 1942, ‹mre Barmanbek graduated from Ankara University,
School of Political Science with a BSc. degree in Economics and
Finance. Her career began in 1963 at the Ministry of Finance, as an
assistant tax auditor in the Board of Accountancy Specialists, followed
by a promotion in 1966 to Accountancy Specialist. She accepted a
position with the State Planning Organization as a State Planning
Specialist. After a successful year at SPO, Ms. Barmanbek resumed
the position of Accountancy Specialist within the Ministry of Finance
until 1975. She also acted as a member for the Tax Appeals Commission.
In 1977, Ms. Barmanbek resigned from her post in Ankara and started
to pursue her career in private sector. She assumed the Financial
Director position in Do¤us Akü Industry Inc., a joint venture company
founded by the Koç and the Do¤an Group. She then rose to the General
Manager position in the Company. Ms. Barmanbek was later appointed
as the Financial Coordinator for Do¤an Holding and became the CFO
in 1988. She continued to serve in the Company as the CEO and Vice
Chairman and Executive Member of the Board as well as Board member
of various subsidiaries thereof. Due to her dynamic management style
and her ability to create added value, she received the “Best Female
Manager of the Year” award in by the daily newspaper Dünya in 2001.
In 2002 the prestigious Fortune Magazine International Edition recognized
Ms. Barmanbek as the 33rd “Most Powerful Woman in Business” in
Turkey. In the years 2003-2005, she was acknowledged as the 21st,
22nd and 23rd “Most Powerful Woman in Business” by the same
magazine, respectively.
Ms. Barmanbek currently is a member of Turkish Industrialists and
Businessmen’s Association (TÜS‹AD). Since 2003, she has been
Deputy Chairperson to the Board of Directors and Member of the
Executive Board for Do¤an Holding; she also serves on the boards of
several group companies.
15
9
10
3
4
6
7
1
5
8
2
11
01 AYDIN DO⁄AN
CHAIRMAN
02 ‹MRE BARMANBEK
DEPUTY CHAIRPERSON
03 DR. VURAL AKIfiIK
DEPUTY CHAIRPERSON
04 TUFAN DARBAZ
CEO & MEMBER
05 MEHMET AL‹ YALÇINDA⁄
MEMBER
06 ARZUHAN DO⁄AN YALÇINDA⁄
MEMBER
07 VUSLAT DO⁄AN SABANCI
MEMBER
08 HANZADE DO⁄AN
MEMBER
09 REF‹K ARAS
MEMBER
10 ERTU⁄RUL TUNCER
MEMBER
11 TAYLAN B‹LGEL
MEMBER
16
Board of Directors
DR. VURAL AKIfiIK
Born in Malatya in 1944, Dr. Vural Ak›fl›k completed his secondary
education at Robert College. After graduating from the Department of
Economics of the Middle East Technical University, he received his
M.A. in Mathematics at the same university. Dr. Ak›fl›k received his
Ph. D. in statistics from the University of California, Berkeley.
Association (TÜS‹AD), Member of the Board of the Turkish Economic
and Social Studies Foundation (TESEV), Member of the Board of
Trustees of the Malatya Educational Foundation and Founding Member
of the Istanbul Educational Foundation.
Vural Ak›fl›k is married and the father of one daughter.
TUFAN DARBAZ
After working as an Assistant Professor at the University of California,
Berkeley and the Middle East Technical University for seven years,
between 1976 and 1988 Dr. Vural Ak›fl›k worked as Managing Director
and Chairman at various companies and banks owned by Çukurova
Holding such as Anadolu Kredi Kartlar›, Genel Sigorta, Genel Denizcilik,
Çukurova Çelik Endüstrisi, Pamukbank and Interbank.
Dr. Vural Ak›fl›k quit his job in Çukurova Holding in 1988. After that,
in cooperation with Bankers Trust, Türkiye ‹fl Bankas› and D›flbank,
he founded Türk Merchant Bank, the first investment bank of Turkey
active in capital markets and corporate finance. Dr. Ak›fl›k worked as
Founding Member, Chairman and Managing Director of Türk Merchant
Bank for nearly ten years, until 1997. In 1997, following the start of
negotiations between Bankers Trust and Deutsche Bank, Dr. Vural
Ak›fl›k sold his shares to Bankers Trust and quit his duties at Türk
Merchant Bank of which he was a founding member.
In 1997, Dr. Vural Ak›fl›k became the CEO of D›flbank, a bank active
in foreign trade financing and corporate banking, and played an active
role in its restructuring. Within three years, Dr. Ak›fl›k transformed
D›flbank from a specialized bank with a limited number of branches
into a leading multi-branch bank. During the economic crisis of 2001,
a Joint Board of Directors of State Banks was formed to restructure
state banks that were causing systemic risks and thus posing a threat
to financial markets as a whole. Dr. Vural Ak›fl›k was invited to be the
Chairman of this Joint Board. After ensuring that state banks comply
with the requirements of modern banking and international competition
and restructuring them financially and organizationally in preparation
of privatization, Dr. Ak›fl›k returned to the Do¤an Group. Vural Ak›fl›k
is presently the Vice Chairman of the Board of Do¤an Holding and
Chairman of the Board of Petrol Ofisi A.fi. (POAfi).
In addition to the duties above, Dr. Ak›fl›k also served as Board Member
at Baflak Sigorta, Lafarge-Aslan Çimento and Türkiye S›nai Yat›r›m
Bankas›; Chairman of the Board of Ray Sigorta A.fi. and Do¤an Hayat
A.fi. He is also an Honorary Member of the Turkish-American Business
Council, Member of the Board of Alarko Holding, Member of the High
Advisory Committee of the Turkish Industrialists’ and Businessmen’s
Tufan Darbaz graduated from Bosphorus University with a degree in
Business Management in 1978. He completed his graduate studies
in Business Strategy in Strathclyde University in Scotland.
He started his professional life in STFA, later joining the Sabanci Group.
During his 18 years with the Group, Mr. Darbaz served on several
boards, formed and led strategic departments, finally becoming the
President of Strategy and New Business Development Group.
Mr. Darbaz joined Do¤an Holding in 2001 as Deputy CEO and has
been the Do¤an Holding CEO since January 2003. Additionally he
currently sits on the boards of several Do¤an Holding interests including
Petrol Ofisi.
Mr. Darbaz is also an active participant in civil society. He is a founding
member of the Corporate Governance Association of Turkey, a member
of Bosphorus University and Robert College Businessmen's and
Executives' Association, Turkish Industrialists' and Businessmen's
Association, Turkish Textile Producers Association and the Alumni
Organization of Bosphorus University, to name a few. He also gives
lectures on the Turkish business environment to MBA students at Bilgi
University.
MEHMET AL‹ YALÇINDA⁄
Mehmet Ali Yalç›nda¤ was born in Istanbul in 1964. He graduated with
honors in 1989 from the American College in London. Mr. Yalç›nda¤
first joined the Do¤an Group in 1990 as the Assistant General Manager
of Do¤an D›fl Ticaret. In 1991, he became a member of the Executive
Committee of Do¤an Holding. Then, in 1992, he was appointed Assistant
General Manager of the Milliyet daily. In 1994, Mr. Yalç›nda¤ assumed
several responsibilities during the establishment of the Simge Group
and began publishing four new newspapers including Posta, Fanatik
and Radikal. When the media companies of Do¤an Group merged
under DYH in 1996, he was appointed Vice-President of DYH’s Executive
Committee.
17
Mr. Yalç›nda¤ has contributed to the generation of synergies for all
publishers who are part of DYH. These include the establishment of
Do¤an Ofset which integrated all dry press facilities, DPC which put
all newspaper printing facilities under a single umbrella, and Do¤an
Factoring which manages the receivables of all group companies.
By founding DHA, Mr. Yalç›nda¤ put all news departments under the
control of a single administrative body. In addition, the publication of
children’s books was made the responsibility of a single unit, which
resulted in the creation of a partnership with the Danish Egmont Group.
Magazines published by Hürriyet and Milliyet were merged with the
formation of a partnership with Burda Media Group.
Mr. Yalç›nda¤ also formed a partnership with Time Warner, which
enabled the establishment of a common news channel. He has been
actively involved in forming other foreign partnerships. With Star TV’s
joining the group in 2005, all TV and radio broadcasting companies
have become a part of the Do¤an TV network.
Mr. Yalç›nda¤ has been President of the Executive Committee of Do¤an
Yay›n Holding since 1999. At the same time, he has been Turkish
Chairman of the IAA (International Advertising Association), Chairman
of the Turkish Advertising Council, a member of TÜS‹AD (Association
of Turkish Businessmen and Industrialists), the Galatasaray Sports
Club, and WEF Media Managers. Mr. Yalç›nda¤ is married and has
two children.
ARZUHAN DO⁄AN YALÇINDA⁄
Ms. Yalç›nda¤ started her professional life in 1990 at Milpa A.fi. There,
she initiated a mail order business in cooperation with the German firm
Quelle. Between 1993 and 1995, she took part in the establishment
of Alternatifbank and served on the Board of the Bank after operations
commenced. Ms.Yalç›nda¤ managed the Finance Department at the
Milliyet Magazine Group from 1995 to 1996. In 1996 she started her
work at Kanal D and she is recently appointed the CEO of Do¤an TV
& Radio. Ms. Yalç›nda¤ is also a member of the Board of Do¤an
Holding.
In 1999, Ms.Yalç›nda¤ launched efforts to establish a joint news network
between CNN International and Do¤an Yay›n Holding, the first example
of such an initiative in Turkey. The project became operational in 2000
when CNN TÜRK was formally established jointly with the Time Warner
Group.
Ms. Yalç›nda¤ is one of the founders of the Ayd›n Do¤an Foundation,
where she also currently serves as a Board Member. She also serves
as a Board Member on the following organizations: The Turkish
Education Volunteers Foundation (TEGV), The Turkish Industrialists
and Businessmen’s Association (TÜS‹AD), The Turkish-American
Businessmen’s Association (TABA), The Turkish Female Entrepreneurs
Association (KAG‹DER) and The Third Sector Foundation of Turkey
(TÜSEV). She founded “Women’s Initiative for Turkey in the EU” an
effective platform that brings together the leading women of Turkey to
establish a dialogue with their European counterparts.
VUSLAT DO⁄AN SABANCI
Born in 1971, Vuslat Do¤an Sabanc› graduated from Bilkent University
with a degree in Economics. She continued her education at Columbia
University in New York, where she received a Master’s degree in
International Media and Communications.
Ms. Sabanc› worked in the editorial management department of The
New York Times newspaper for one year. She then worked at The Wall
Street Journal in the formation of the Asian Business World News
Channel and the Journal’s Latin American Edition.
In 1996 she joined the Hürriyet Newspaper as Vice President in charge
of advertising. Three years later, she rose to the rank of Group President
for Marketing Operations, where her responsibilities included marketing,
sales, human resources and IT operations. Today Ms. Sabanc› continues
to serve as Hürriyet’s CEO.
In addition to strategic planning and business development, she is also
responsible for the newspaper’s administrative operations. Ms. Sabanc›
is also Vice Chairperson of the International Press Institute.
HANZADE DO⁄AN
Hanzade Do¤an graduated from the London School of Economics in
1995 with a BA in economics and Columbia University in 1999 with
an MBA. She is DYH Executive Committee VP for Strategic Planning.
While studying at Columbia University, she was a member of the Media
Management Association, the Venture Capital Club and the Columbia
Businesswomen’s Association. She also received an award in Columbia
University’s “Business Plan Competition.”
18
Board of Directors
Between 1995 and 1996, Ms. Do¤an worked as a financial analyst in
London at Goldman Sachs International’s Communications, Media and
Technology Group. During this time, she gained experience in mergers
and acquisitions. In 1996, she joined DYH as a senior strategy specialist.
She headed the project for the Hürriyet-Bertelsmann joint venture. She
also worked on the sale of minority shares (25%) of the DYH Magazine
Group to Rizzoli. In 1999, Ms. Do¤an founded and became President
of the Executive Committee of Do¤an Online, which very quickly became
the leading Internet Service Provider in Turkey. In February 2002, she
was appointed Chairwoman of the Board of Directors of Do¤an Online.
In September 2002, she was made vice-president of the DYH Executive
Committee.
Since 2003, she has served as President of the Executive Committee
of the Do¤an Media Group, which includes Milliyet, Radikal, Posta and
Fanatik, four newspapers making up 42% of the Turkish market. Ms.
Do¤an is also a member of the board of directors of the World Association
of Newspapers (WAN), and a member of TÜS‹AD (Association of Turkish
Businessmen and Industrialists), DE‹K (Foreign Economic Relations
Board), YPO (Young Presidents Organization), TÜSEV (Turkish Third
Sector Foundation) and KAG‹DER (Association of Woman Entrepreneurs).
REF‹K ARAS
Refik Aras was born in Erzincan in 1937. He went to elementary,
secondary and high school in Erzincan. Aras started his professional
life after graduating from the Academy of Economics and Commerce
in 1958.
Refik Aras is presently Member of the Board of Do¤an Holding A.fi.,
Managing Director and Vice Chairman of the Board of Do¤an Müzik
Kitap Ma¤azac›l›k ve Pazarlama A.fi., a subsidiary of Do¤an Yay›n
Holding. Refik Aras is married and the father of two.
ERTU⁄RUL TUNCER
Ertu¤rul Tuncer was born in Istanbul in 1939. He graduated from
Robert College and studied Management and Economics. He continued
his education in Germany between 1963 and 1965. He completed his
military service in the Presidential Armed Guards.
Ertu¤rul Tuncer started to work at Mobil Oil Türk A.fi. in 1967. He
served in various positions in the marketing department and then
became the first Turkish General Manager of Mobil in 1994.
When Mobil merged with BP in 1996, Tuncer was appointed General
Manager of BP-Mobil and President of BP Turkey.
Following the July 2000 privatization, Tuncer became General Manager
of Petrol Ofisi A.fi. He quit this position in 2005. Mr. Tuncer is currently
Member of the Boards of Do¤an Holding and Petrol Ofisi A.fi. He is
also one of the founding partners of a company which offers consulting
and marketing services in energy-related issues.
Ertu¤rul Tuncer is Board Member of the Petroleum Industry Association
(PETDER), Member of the PETFORM Association and the Fenerbahçe
Sports Club.
Tuncer is married and the father of two daughters.
Refik Aras worked as Accounting Manager of Gama ‹nflaat A.fi. in
Ankara between 1960 and 1963, as Financial Advisor between 1964
and 1969, as Mayor of Erzincan Provincial Center between 1970 and
1973. He established four major business enterprises (especially
Erzincan ERSAN A.fi. with 1,000 partners) and served on their boards
between 1974 and 1979.
At the end of 1979, Refik Aras moved from Erzincan to Istanbul.
Between 1980 and 1988, he worked as General Manager of M‹LPA
A.fi., and between 1989 and 1992 as Founding Managing Director of
Alternatifbank. Between 1992 and 1995, Aras also served as President
of the Assembly of Istanbul Chamber of Commerce. After working as
Executive Committee Member at Do¤an Holding A.fi. between 1990
and 1995, he was elected Istanbul MP and served in the Parliament
between 1995 and 1999.
TAYLAN B‹LGEL
Born in Ankara in 1942, Mr. Bilgel graduated from Ankara College in
1963 and went on to complete his education at the Academy of
Economics and Commercial Sciences in Ankara. Graduating in 1971,
he began his professional career as the owner and manager of the Gül
Palas Hotel in Ankara. Since 1983, he has been the Chairman of the
Board of Directors of Anadolu Otomotiv, of which he is the founder.
19
Executive Committee
5
4
3
2
1
01 AYDIN DO⁄AN
CHAIRMAN OF THE EXECUTIVE COMMITTEE
02 HANZADE DO⁄AN
MEMBER OF THE EXECUTIVE COMMITTEE
03 ‹MRE BARMANBEK
04 DR. VURAL AKIfiIK
05 TUFAN DARBAZ
MEMBER OF THE EXECUTIVE COMMITTEE AND CEO
20
Corporate Governance &
Sustainability
Do¤an Holding has long believed that good corporate governance and
sustainability is the glue that holds together an efficient and robust
economy, in turn generating real value for all participants. We are
committed to maintaining our leadership position in these two important
issues in Turkey.
To a degree, the global economy continues to recover from the gross
ethical lapses in business uncovered in recent years. Enron, Tyco and
Worldcom in the US and Parmalat in Europe are textbook examples
of corporate malfeasance on a massive scale. Jury trials currently being
held continue to remind us of the enormous magnitude and
repercussions of the seemingly institutionalized corporate misconduct.
Unfortunately, some Turkish companies were found to be no better.
Aware of the need to bring together a group of like-minded people who
wanted to foster interest in the principles of good corporate governance,
the CEO of Do¤an Holding and several top management members were
instrumental in the establishment of the Corporate Governance Association
of Turkey (COGAT). Founded in early 2003, COGAT - whose mission is
to establish, develop and assist with the dissemination and adoption of
corporate governance best practices in Turkey both in private and public
institutions - now has more than 200 active members.
In particular, the country’s financial institutions showed a serious lack
of integrity which came out in the open quite recently. This resulted
not only in the collapse of the numerous enterprises directly involved,
but it also acted as a drag on the nation’s overall economy, stifling its
true growth potential. We continue to recover from these domestic
wrong-doings to this day.
Out of the corporate ashes in the US and elsewhere came a new
regulatory framework, increased oversight and a renewed focus on
corporate governance. Do¤an Holding long ago assumed a leading role
in Turkey in this realm, and many companies here have more recently
followed suit adopting principles of good corporate governance for the
first time in many cases.
The four principles of corporate governance - accountability,
responsibility, transparency and fairness - create the trust between
As an extension of good corporate governance principles, top level
management also took part in the establishment of the Business Council
for Sustainability Development-Turkey affiliated with the United Nations.
Several Do¤an Holding executives are active participants in the movement
and one sits on the board of the association.
The equitable division of the world’s finite natural resources and the
goal of leaving ample resources for use by future generations are causes
that have deeply resounded within Do¤an Holding in addition to the
ethical requirements of the corporate governance movement.
Do¤an Holding has long believed that good corporate governance and
sustainability is the glue that holds together an efficient and robust
economy, in turn generating real value for all participants. We are
committed to maintaining our leadership position in these two important
issues in Turkey.
each and every stakeholder and economic institutions. In the long run,
this is what contributes to rising living standards and higher purchasing
power for citizens and the revitalization of the economy.
Do¤an Holding is proud to serve social and economic causes as an
activist ad role model in Turkey.
22
HOLDING FUNCTIONS
The Internal Audit Group
REHA MÜSTECAPLIO⁄LU
AUDIT GROUP PRESIDENT
The Internal Audit Group is an independent appraisal function charged
The Internal Audit Group fulfills its responsibilities by reviewing the
with reviewing the activities of Do¤an Holding companies and derives
internal control system on a risk focused basis, which is designed to
its authority from the Holding’s Executive Committee via the Chief
provide reasonable assurance regarding the achievement of objectives
Executive Officer. The Group objectively examines and reports on
in the following categories:
management of risk; adequacy of internal control; achievement of
•
Effectiveness and efficiency of the Holding’s operations
of corporate governance, all of which have a direct bearing on the
•
Reliability in financial reporting
Holding’s market value.
•
Compliance with applicable laws, regulations, policies and
proper, efficient, effective and economic use of resources; and efficiency
procedures.
23
The Internal Audit Group is an independent appraisal function charged with reviewing
the activities of Do¤an Holding companies and derives its authority from the Holding’s
Executive Committee via the Chief Executive Officer.
To ensure that internal control is consistently applied throughout the
Holding’s companies, the Internal Audit Group has developed its audit
manuals based on the five interrelated components of Committee of
Sponsoring Organizations (COSO) Internal Control Framework, namely:
Control Environment
Fostering control consciousness of the organization, which is the
foundation for all other components of internal control, providing
Information and Communication
The process whereby relevant information is identified, captured and
communicated in a form and timeframe that enables people to carry
out their responsibilities.
Monitoring
Management and supervisory activities that assess the quality of the
performance of the internal control system over time.
discipline and structure.
The Group carries out its responsibilities with a staff of eight auditors
Risk Assessment
through internal auditing plans defined every six months. To preserve
Identification and analysis of relevant risks to the achievement of
its independence and objectivity, the Internal Audit Group does not
objectives, forming a basis for determining how risks should be managed.
assume operating responsibilities. Additionally, the Group is also a
Control Activities
Adoption and implementation of policies and procedures that help to
ensure management directives are carried out.
vehicle for development of staff with managerial potential.
24
HOLDING FUNCTIONS
The Strategy Group
YAHYA ÜZD‹YEN
STRATEGY GROUP PRESIDENT
The Strategy Group at Do¤an Holding consists of two departments:
In this respect, in 2005, the Group has facilitated the divestiture of one
Strategy and Business Development, and Information Technology. The
of the Holding’s main primary businesses: Banking. No longer perceiving
key objective of the Strategy Group is to define the vision of the Company,
banking as a core segment for the Holding, the sale of D›flbank along
and to support it with action plans. Identifying potential investment
with its other subsidiary financial institutions, except insurance, to
areas, execution of mergers and acquisitions as well as divestitures of
FortisGroup was completed in the first half of 2005.
the Group companies are also all within the scope of this Group.
Also, in 2005, the Holding’s leading media conglomerate subsidiary
The work of the Strategy and Business Development Department
Do¤an Yay›n Holding acquired Star TV’s assets. As a result of this
facilitates the initial assessment of commercial and social projects and
transaction, the Holding’s position as the leader in traditional media
formulates strategies during the implementation stage. The Department
has been fortified.
also incorporates the task of life stage management for Holding
businesses. The degree of change taking place in every industry today
is dramatic. Whether it is in such areas as improvement orientation,
restructuring, re-strategizing, operational quality enhancement or others,
each of these involve major changes which, if badly managed, can
produce catastrophic results. Although risk is inevitable in the process
The Group sees the telecommunications sector as an extension of
traditional media. In that respect potential investment opportunities
such as privatization of Turk Telekom or sale of Telsim assets was
evaluated in 2005. In this arena the latest improvements and evolution
of the sector is closely monitored by the Group to assess the potential
synergies and strategic alliances.
of change, a significant amount of anxiety and distress can be avoided
by having a solid plan beforehand. Therefore, the Holding’s efforts
With a vision to position Do¤an Holding as a holding company preeminent
serve to assist its subsidiaries in successfully managing major change
in the energy sector, the shareholding in Petrol Ofisi, the leading oil
and diversification processes. Within this framework, the Department’s
distribution company of Turkey, was increased to 92.98% as of the end
practice supports the analysis of long and medium range projects such
of 2005 as a result of the transaction completed with T. ‹fl Bankas› in
as technology investments, strategic partnerships, as well as divestitures,
privatization projects, acquisitions and mergers.
25
The work of the Strategy and Business Development Department facilitates the initial
assessment of commercial and social projects and formulates strategies during the
implementation stage. The Department also incorporates the task of life stage management
for Holding businesses.
2005. In line with the same vision in the energy sector and to reposition
The complementary nature of the conglomerate’s activities is
Petrol Ofisi as a global player, assessment of further vertical diversification
strengthened through the integration of its Information Technology
opportunities along with strategic alliances in the international arena
Department into several inter-organizational operations. The effective
will be on the agenda for 2006. Do¤an Holding joined forces with OMV,
use of IT empowers management in assessing and evaluating business
the leading oil and gas company in Central Europe.
opportunities while positioning the Holding on the cutting edge through
Do¤an Holding and OMV have agreed on the sale of 34% of Petrol Ofisi
significant achievements in operations and application development.
shares to OMV in an effort to explore new avenues in the energy business,
The overall process within the Holding is carried out by the
including establishment of refineries, oil exploration and production.
implementation of customized, state-of-the-art application software
Besides vertical integration in the oil sector, other domains of the energy
some of which are generated by the Department’s programmers.
sector are on the Group’s radar. Watching for the supply and demand
balance of energy in Turkey, the Group is constantly evaluating potential
investments to diversify the Holding’s position in energy into various
domains and value-chain components.
With rapidly increasing globalization and competition within all industries
becoming fiercer by the minute, the Strategy Group plays an integral
role in keeping Do¤an Holding ahead of the curve. Without the strong
strategic underpinning of its business units, and its well-integrated
For 2006, generally, the Group is aiming to focus on business
world class IT infrastructure, Do¤an Holding would not be the success
development activities creating synergies with its existing core businesses
it is today. As importantly, the Holding’s Strategy Group helps guide
to foster the Holding’s leading position in those sectors.
the conglomerate to an even more successful tomorrow.
26
HOLDING FUNCTIONS
The Finance Group
AHMET ‹. KARACAH‹SARLI
FINANCIAL AFFAIRS GROUP PRESIDENT
The Finance Group regularly utilizes debt and capital markets instruments
Good corporate governance and institutional transparency are vital to
to invest surplus cash, to obtain low cost long-term financing, to assist
forging, and maintaining, strong relationships with all the Holding’s
the Holding’s organic growth and realize its acquisition strategies. Thus,
constituents and to ultimately maximizing its market value. All important
Do¤an Holding is able to boost its competitive position both domestically
adherence to the Holding’s Corporate Governance Principles falls under
and abroad.
the domain of the Finance Group. Timely disclosure and presentation
Efficient financial planning and resource allocation are imperative in
as large of an organization as Do¤an Holding. Managing cash flow and
of the Holding’s financial information to its clients, investors and other
stakeholders is yet another of the prime activities of the Group.
determining the appropriate debt structure for the Holding’s companies
Do¤an Holding is determined to have a set of sound corporate governance
requires free flow of information and deft coordination with the Finance
practices not simply to meet regulatory requirements, but to provide
Group. The efficient intra-Holding flow of financial information depends
for the effective oversight and management of the Company. The
upon a well-developed management information system (MIS) while
Holding firmly believes that accountability and transparency in return
a highly trained professional staff analyzes and acts upon the data for
enhances value for all of its clients, shareholders and stakeholders.
the benefit of the Holding.
Another crucial role of the Finance Group is that of treasury
Constant risk assessment and management across the Holding’s
management on behalf of the Holding. Particularly in light of recent
companies is another vital function of the Finance Group. Regular
large scale share sales, efficient cash management is of paramount
enhancement of the intra-Holding MIS data collection and financial
importance. Extraordinary treasury management items above and
reporting works to further improve decision-making and financial
beyond the scope of daily operations are reviewed in weekly meetings
controls, both critical to Do¤an Holding’s risk management success
which include board members from the Executive Committee. In
and in turn its market value.
2005, the total cash inflow and outflow solely for the Holding Company,
With newly enacted, stricter regulations governing corporations, and
themselves under increased scrutiny, regulatory compliance is as
important today as it has ever been in corporate history. The Holding’s
Finance Group works to ensure that all pertinent regulations are followed
to the fullest extent in all its financial activities.
amounted to USD 1.7 billion. Average daily cash holdings managed
stood at USD 300 million. Total bank loans and repayments amounted
to USD 417 million. The magnitudes of these amounts alone indicate
the great importance of the cash and risk management function with
the Finance Group.
27
Good corporate governance and institutional transparency are vital to forging, and
maintaining, strong relationships with all the Holding’s constituents and to ultimately
maximizing its market value. All important adherence to the Holding’s Corporate
Governance Principles falls under the domain of the Finance Group. Timely disclosure
and presentation of the Holding’s financial information to its clients, investors and other
stakeholders is yet another of the prime activities of the Group.
Institutional investors, Do¤an Holding’s largest source of long-term
This financial success not only reflects the correct strategic decisions
capital, tend to concentrate their stock holdings in entities with whose
and acquisitions that the Group has made in the past year but is also
financial position they are most familiar and confident. In order to keep
a testimony to the Holding’s close and transparent relations with its
these investors updated and well-informed, it is essential to provide
investors.
them with regular and timely financial reports, as well as a convenient
forum for their analysts to obtain information and receive answers to
all of their questions. In an era of shrinking margins, CEOs have fewer
resources, time and staff available to perform the function of investor
relations. Hence, Do¤an Holding’s Investor Relations Department
allocates a considerable amount of time and energy to information
sharing.
Do¤an Holding works toward these objectives through continuous,
open and targeted dialogue with all capital market participants. With
regard to capital market professionals, the focus is on fund managers,
investment funds, pension funds and insurance analysts, as well as
banks and brokerage house and their sales and research teams. In
accordance with the Holding’s objectives, management uses all available
communications tools, including financial reports, analyst meetings,
It is the aim of the Investor Relations Department to achieve an
road shows and conferences. The Holding’s IR website at
appropriate valuation of Holding stocks within the capital market.
www.doganholding.com.tr/investor where the same information is made
The Department has set out to gain lasting stockholder trust and
increase transparency while avoiding any informational irregularities
and reducing share price volatility.
By the end of 2005, Do¤an Holding’s share price had risen to YTL
4.40 YTL (USD 3.28) corresponding to a 54 % increase over the past
12 months. The Holding’s market value reached YTL 3,235 million
(USD 2,411 million) while the proportion of shares in the free float held
by foreign investors increased from 32% to 56% over the course of
the year.
available to all target groups simultaneously, is particularly important
in this respect.
28
HOLDING FUNCTIONS
Corporate Relations,
Corporate Communications and
‹PEK ‹LTER
CORPORATE RELATIONS, CORPORATE COMMUNICATIONS
AND HUMAN RESORCES GROUP PRESIDENT
Traditionally considered among the “softer” functional areas, Corporate
are all time consuming to an already busy workforce and have the
Relations, Corporate Communications and Human Resources today
potential to confuse. We work to link different elements of
are recognized as key strategic elements for the success of the modern-
communications so it all adds up to a coherent whole, rather than
day corporation. Ultimately, as the other departments, the goal of this
mere individual parts that ultimately become muddled.
department is to have a positive effect on Do¤an Holding shares by
increasing trust and belief in the company. In the absence of an effective
communications function and optimal human assets management, an
organization’s full potential value cannot be realized.
In addition, the Holding’s all-important corporate identity is managed
across multiple media channels. In a world where the typical consumer
is exposed to as many as 3,000 brand messages in a single day,
maintaining a clear articulation of the Holding’s corporate identity to
Building and maintaining trust and loyalty between Do¤an Holding and
all stakeholders is paramount. Staying on message about Do¤an
its myriad stakeholders - investors, customers, shareholders, employees,
Holding’s brand identity and corporate value system is especially vital
suppliers, neighbors, NGOs - is the most important task of Corporate
in today’s media cacophony and has a direct bearing on the Company’s
Communications. This can only be achieved through ongoing two-way
market value. As a media conglomerate, it is doubly important that our
communications between all parties.
corporate communications function reflects the same level of
Our aim is to facilitate, manage and monitor our corporate reputation.
sophistication as our media properties.
We constantly measure and track the perceptions of Do¤an Holding
The Group works as an information center internally as well. We follow
within the marketplace. By doing so, we are given valuable insight that
global and national social, political, economic, environmental and
helps us to determine the content and volume of the information we
cultural trends that will help shape the long term strategy of the Holding.
disseminate about the Holding. However, it is not simply a matter of
Executive level management is involved in the issues that may have
extending channels or merely generating a certain volume of information,
a global impact.
but rather Corporate Communications works to help achieve the overall
business strategy of the Holding.
We understand that corporate communications is not just about getting
messages out, but additionally we must support the overarching strategic
We also consider internal communications as a vital part of the task.
goals of Do¤an Holding. Corporate Communications is always trying
The proliferation of information today, namely an onslaught of internal
to find ways in which we can add value to the Holding. Communications
memoranda, newsletters, voicemails, emails and intranet documentation,
can be a competitive advantage in today’s world, and we strive to make
it so for Do¤an Holding.
29
Human Resources Group
Traditionally considered among the “softer” functional areas, Corporate Relations,
Corporate Communications and Human Resources today are recognized as key strategic
elements for the success of the modern-day corporation. Ultimately, as the other
departments, the goal of this department is to have a positive effect on Do¤an Holding
shares by increasing trust and belief in the company. In the absence of an effective
communications function and optimal human assets management, an organization’s
full potential value cannot be realized.
Do¤an Holding’s most important asset is its people, without which it
a common language where managers lead their teams and encourage
would not be the success it is today. Human Resources is at the heart
them to participate in training. Examples of planned and implemented
of the organization, and the future of the Holding hinges upon an
training programs are Team Management, Effective Communication
effectively run Group.
and Presentation Skills, and Management Skills.
Human Resources is charged with identifying, recruiting, training and
We believe that a committed workforce and effective teamwork are
ultimately collaborating with the very best graduates and management
only achieved through people who genuinely feel valued and needed.
training candidates. Our HR specialists work to help each Do¤an
Our progressive corporate policies, coupled with personal and
Holding employee fully realize his or her talents, skills and potential.
professional development programs for employees, actively support
In addition, we facilitate linking an individual’s personal qualifications
these goals.
and capabilities with the Holding’s targeted business strategies.
With a highly competent and motivated employee base, Do¤an Holding’s
Starting from their very first day on the job, the recruitment and training
productivity and efficiency are optimized, thus enhancing both operations
process identifies the strengths and skills of employees, providing the
and market value. Human Resources works tirelessly to make Do¤an
Holding with fresh perspectives and engendering dynamism within the
Holding’s people assets a competitive advantage, and a point of
workplace. The HR Department uses metrics, evaluations and employee
differentiation from its competitors.
reviews to create an accurate appraisal of the workforce and to guide
individuals toward a sustainable and rewarding career path.
As with communications and HR, corporate relations is another function
performed by this Group to create an interface between Do¤an Holding
Training needs analyses are also conducted in order to correctly
and national and international bodies. We believe that conveying the
determine employees’ training needs, allowing them to develop
corporate spirit is important when dealing with third parties of this
competencies required for their position. This type of analysis compares
nature. Therefore the Group also helps maintain the corporate identity
the need for training personally expressed by employees with the team’s
through talks, seminars, meetings and participation in several worthwile
need for training as expressed by their line managers.
causes.
Training programs for managers and their teams have been planned
to foster development in personal growth, managerial skills and technical
knowledge. Training programs have been specifically designed to create
30
HOLDING FUNCTIONS
Legal Department
SELMA UYGUÇ
DIRECTOR OF LEGAL DIVISION
As members of a multinational conglomerate, Do¤an Holding companies
However, we do not limit ourselves to this minimum threshold. The
conduct business across international borders every day. As such, the
Legal Division endeavors to ensure the implementation of the strict
Legal Division offers advice on legal matters that involve the Holding
ethical principles, quality standards and transparency spelled out in
and its wholly-owned subsidiaries in Turkey and elsewhere.
the corporate governance guidelines of Do¤an Holding to the fullest
The principal mission of the Legal Division is to provide advice and
counsel on legal issues of concern to Do¤an Holding. In this capacity,
we play an active role in all commercial activities and transactions of
Do¤an Holding enterprises. Our main responsibility is to ensure that
all these business activities and transactions comply with the law and
all regulatory requirements.
extent, both within the Group and vis-à-vis third parties. We advise and
offer counsel on legal issues of concern to Do¤an Holding strictly
adhering to the Corporate Governance Principles which govern the
Do¤an Holding’s activities and business relations.
31
The principal mission of the Legal Division is to provide advice and counsel on legal
issues of concern to Do¤an Holding. In this capacity, the Division plays an active role
in all commercial activities and transactions of Do¤an Holding enterprises.
In doing this, we particularly focus on taking legal measures to protect
Management regarding the line of activity of the Holding and its
the interests of the Company against third parties and to prevent
investments and offering counsel in this regard; negotiating, drafting
disputes; ensuring that contracts to be executed and documents to be
and reviewing agreements with other parties and coordinating pending
issued are compatible with the letter of both national and international
litigation and other projects with third-party attorneys.
low; complying with the regulations that determine the Corporate
An all important function in today’s global business environment, Do¤an
Governance Principles; as well as following up the legal modifications
Holding’s Legal Division strives to steer the Company and its affiliated
which form the basis of Corporate Governance Principles; providing
enterprises through a complex patchwork of legal, regulatory and
the necessary legal advice and documentation for the departments of
internal corporate governance guidelines. Thus, the Holding is permitted
the Company and its wholly-owned subsidiaries upon request, and
to achieve its maximum level of operational efficiency and optimal
offering prompt advice on transactions that could have legal, regulatory
market value while meeting, and oftentimes exceeding, prescribed
and financial consequences; responding to the queries of Executive
legal, regulatory and ethical strictures.
32, 33
Do¤an Holding
In every sector in which we are engaged, we structure our
activities around a customer-centered approach.
This “customer first” vision is complemented with the
strategy of assisting those of our companies with market
leadership positions to fortify their dominance and to help
those with the potential of becoming a market leader to
fully realize their potential.
ENERGY
INDUSTRY
TRADE
TOURISM
INSURANCE
MEDIA
SOCIAL RESPONSIBILITY
34, 35
Energy
powerful...
36
Energy
Turkey's leading fuel-distribution and lubricants company and in terms
of sales the second largest single enterprise, moves ahead to become
an international energy company.
PETROL OF‹S‹
Changes in the market
Petrol Ofisi (PO), Turkey's leading fuel-distribution and lubricants
The free market environment introduced by the New Petroleum Market
company and second largest industrial enterprise in terms of sales,
Law had a positive impact on the Company’s performance in 2005.
reported net sales of USD 8.8 billion in 2005, up 14% from USD 7.7
The new legislation allows free market forces to determine the price
billion in 2004. In 2005, the gross profit of the company increased by
of petroleum products, thus introducing a significant new factor affecting
16%, reaching USD 490 million. As of December 31, 2005, Petrol
consumer preferences and has lifted the 40% cap on imports. Companies
Ofisi’s market capitalization stood at USD 1.94 billion.
are free to source their products at optimum costs from local or overseas
At year-end 2005, Do¤an Holding held a majority share of nearly 93%
suppliers.
in Petrol Ofisi following the acquisition of ‹flbank Group’s 44.1% stake
Turkey's strategic location makes it a natural "energy bridge" between
in September 2005. A Tender Offer took place in October 2005 whereby
major oil producing areas in the Middle East and Caspian Sea regions
6.25% of PO’s shares were sold to institutional investors in January
on the one hand, and consumer markets in Europe and beyond, on
2006 in a private placement. Free float after the tender was 13.3%.
the other. With a primary annual energy consumption rate of over 85.3
In March 2006, PO made a strategic partnership by selling 34% of
shares to OMV Aktiengesellschaft, Austria’s largest listed industrial
million tons and a compound growth rate of 70% since 1995, Turkey
is a rapidly growing energy consumer in its own right.
company and the leading oil and gas group in Central Europe. The
As Turkey's leading fuel supplier, Petrol Ofisi has continued to support
agreement envisages a management structure based on equal
the country's economic growth while working with regulators and
partnership with OMV and foresees cooperation in a new refinery
industry participants to steer the market towards global standards and
investment in Turkey, as well as oil exploration, production and
help create new opportunities in Turkey's energy-supply environment.
distribution in a wide region including the Caucasus and the Middle
East.
37
A market leader
New strategic objectives
In 2005, Petrol Ofisi continued to be the market leader in all major product
In 2005, Petrol Ofisi re-evaluated and refocused its strategic objectives.
categories, and its terminals and depots account for nearly one-third of
Petrol Ofisi intends to “rename the energy game,” that is, to grow and
the nation's total fuel storage capacity. Petrol Ofisi serviced an average
develop its business beyond its present status as the country's market
of 600,000 customers per day and further strengthened its already strong
leader in petrol distribution, in line with Turkey's changing energy
base among industrial and institutional clients. Petrol Ofisi's retail network
of branded stations still exceeds the combined total of its next five
competitors, and is still the only nationwide network in Turkey.
At end-of-year 2005, Petrol Ofisi had 3,356 branded service stations
(including sub-brand ERK stations), approximately 4,800 dealers
needs. The Company aims to pioneer the restructuring of the energy
industry as a “national player” and join ranks with the regional and
global energy industry. The Company is re-evaluating all of its strategic
positions in the overall energy supply environment to continue to
maintain its leading competitive edge.
Putting Turkey’s energy power to work
(including ERK), eight district offices, two lubricants blending plants,
aviation services at 27 airports, 11 terminals, one refinery liaison office
and three lubricants depots.
Petrol Ofisi puts the needs and requirements of its customers, retail and
corporate, at the very heart of all its operations, while reaffirming its position
as Turkey's national fuel distributor. The Company pursues an enhanced
In 2005, Petrol Ofisi maintained its leading position with a market share
customer focused orientation in all investments and services through
of 25.9% in gasoline, 35.3% in diesel and 33.4% in total white products
operational excellence, quality of services, production and environment
(i.e. unleaded and lead replaced gasoline, diesel and kerosene). In
as well as covering the range of products needed by customers.
black products (i.e. fuel oil and heating oil), Petrol Ofisi increased its
market share by 9.4 percentage points, thus garnering a 48.9% market
share. PO also maintained its strong leading position in the jet fuel
market, increasing its market share to 73%. Petrol Ofisi is Turkey’s
market leader in lubricants with a market share of 27.6% in 2005.
38
Energy
Petrol Ofisi redesigned its brand portfolio and increased its promotional
activities, launching new advertising and sponsorship campaigns to
enhance the brand's image, preserving its fundamental assets, while
conveying change and dynamism with youthful, technology-driven
communication concepts.
The energy industry in Turkey is shaped by Petrol Ofisi’s innovative
The re-branding of stations, started in 2001 and ongoing today, followed
approach. Petrol Ofisi is strengthening its position in the energy sector
a complete redesign of the brand's visual corporate identity and
by making a difference with its customer-focus and high service quality
communications concept across stations, including advertising,
level. It offers its customers innovative and cutting-edge products. In
promotions, packaging and merchandising. Extensive research, both
2005, for example, Petrol Ofisi developed innovative new products
qualitative and quantitative, is being conducted to better understand
such as "BioBenzin," Turkey's first and only bio-fuel product;
changing consumer perceptions, preferences and expectations.
"EuropoDizel," a low sulphur (50-ppm), cold-resistant diesel and lead
Carrying the brand to international audiences
replaced gasoline and "SüperExtra," a substitute for leaded premium
gasoline. In addition the Company introduced "AutoExpress" -- a new
Petrol Ofisi is Turkey's oldest, best-known and most trusted local fuel
RFID (Radio Frequency Identification) technology-based electronic
brand and much has been achieved in the past five years since
tracking service that enables retail customers to purchase fuel without
privatization to improve the brand's image with consumers.
cash or credit card. This is the first service of its kind for individual
Petrol Ofisi sponsored two young drivers, Jason Tahincio¤lu, who
motorists in Turkey.
performed the opening run of the 2005 Turkish Grand Prix, and Can
Improving and strengthening perceptions of the Petrol Ofisi
Artam, who represented Turkey in the GP2 races. The tremendously
brand
positive response received has been instrumental in the decision to
become title sponsor of the "Formula 1 Turkish Grand Prix" to be held
Petrol Ofisi redesigned its brand portfolio and increased its promotional
activities, launching new advertising and sponsorship campaigns to
enhance the brand's image, preserving its fundamental assets, while
conveying change and dynamism with youthful, technology-driven
communication concepts.
in Istanbul on August 25-27, 2006. Petrol Ofisi also signed a 15-year
contract to build and operate the first official fuel station at the Formula
racetrack "Istanbul Park." Sponsorship of Formula 1 has embraced
the sport's competitive values and carried the Petrol Ofisi name to
audiences worldwide while contributing to the promotion of Turkey's
image abroad.
Football has been another important sports sponsorship activity. Petrol
Ofisi is an official sponsor of the Turkish national football team for the
2004-2006 seasons and has sponsored the 2005 Turkish Football Cup
Finals.
39
Erk
PO Alternatif Yak›tlar Toptan Sat›fl A.fi. (POAY)
The company was established to engage in the procurement and sale
The company was established to undertake commercial activities in
of fuel-oil, petroleum products, LPG and other similar products within
the natural gas market within and/or outside Turkey; to actively promote
and outside of Turkey; to arrange for the distribution and storage
the use of natural gas; to locally procure or import natural gas, liquefied
thereof; to sell refinery by-products; to produce and blend all kinds of
natural gas and similar products; to engage in the sale and marketing
lubricants and greases and their by-products; to set up the necessary
thereof within and/or outside Turkey; and to arrange for the distribution,
facilities for production and blending; to engage in the retail and
storage and modulation of such products.
wholesale, import and export thereof.
Petrol Ofisi International Oil Trading
Petrol Ofisi Gaz ‹letim A.fi. (POG‹)
The company was established to undertake commercial activities in
Imports of refined oil products are carried out by Petrol Ofisi International
the natural gas market within and/or outside Turkey; to actively promote
Oil Trading Limited, established in the Bahamas. Petrol Ofisi International
the use of natural gas; to undertake the transmission, filling,
Oil trading Limited uses various standard hedging techniques in order
transportation, and delivery of liquefied natural gas, compressed natural
to prevent and reduce pricing risks.
gas and natural gas within and/or outside Turkey; to prepare projects
PO Oil Financing Ltd.
for, construct and operate carrying devices and facilities for the
performance of these activities; to conclude delivery and transportation
The company was established in mid-2004 in the Cayman Islands to
agreements with other companies engaged in the natural gas market
act as a private financial organization to issue bonds for investors in
in Turkey; to transport the natural gas it receives with transportation
international markets.
vehicles; and to make the necessary arrangements for the storage and
PO Petrofinance N.V.
modulation of such products.
The company was established in 2002 in the Netherlands to develop
Petrol Ofisi (UK) Ltd.
financing opportunities for Petrol Ofisi in international financial markets.
Established in the Bahamas in 2001, LYSA has been in operation
Cyprus Turkish Oil Ltd. (Kipet)
under the name POINT since 2003. The company supplies fuel products
to Petrol Ofisi from international markets.
The company was established in the Turkish Republic of Northern
Cyprus to sell and distribute fuel products.
40, 41
Industry
dynamic...
42
Industry
AHMET ÇA⁄LAR
INDUSTRY GROUP PRESIDENT
The main objective of the Industry
Group is value creation as it
contributes to the Holding’s overall
market value as well as to the
Turkish economy through
outstanding business performance,
taxes paid, exports and markets
and jobs created all the while
communicating these activities to
investors.
In 2005, business performance showed slight growth and
less profitability mainly due to the highly valued YTL (New
Turkish Lira). However, the Group maintained a strong
balance sheet, healthy cash flow and sound management
practices. In addition, the Industry Group continued to
generate new job opportunities in 2005.
A strong and sustainable business performance can only
be achieved through the implementation of good corporate
governance principles and a continuous upgrading of
human capital in companies within the division. Customer
focus in all business undertakings, management
development, strategic market management and a global
outlook in business activities are other vital, strategic
elements for business success.
Following the completion of the strategic plan for Çelik
Halat, a capital investment program has been initiated for
capacity and productivity increases as well as product
rationalization. Substantial progress has been achieved to
complete the investment program by 2006. Likewise Ditafl
also continued its own capital investment program.
In 2005, the Industry Group companies added new
customers and markets to their portfolios. The Group
recorded a significant advancement in export sales as a
result of focused efforts of its companies in export markets
as detailed in related company sections. The Group is also
currently exploring investment opportunities in international
markets.
At Do¤an Organic Products, the integration with the venture
in consort with the Eastern Anatolian Development Project
of the United Nations Development Program (UNDP) has
been completed, and activities creating a link to potential
new organic produce business opportunities in the region
have been initiated.
Do¤an Organic continued its efforts and investments to
expand its in-house capacity and develop the cooperation
of regional farmers to support the project. In line with this
goal, high quality breeding cattle have been imported and
added to the present herd population.
The Industry Group, with its stable of companies operating
in different industrial sectors, provides an additional
platform and means for Do¤an Holding to achieve its vision
and strategic goals.
43
ÇEL‹K HALAT
Highlights
Field of Activity and History
•
Extensive customer portfolio made up of well-known companies
Çelik Halat and Tel Sanayii A.S. was founded in 1962 as a joint private
•
43 years of experience and strong brand recognition
•
ISO 9000:2000 Quality Assurance Certificate obtained from TSE as
sector-state venture producing steel rope, galvanized wire, monotron and
spring wire. Later, with additional investments, the Company included
well as international certification bodies such as API, LLOYD’S, DNV
concrete wire/strand and bead wire into its product mix.
and AJA
The shares of the company have been publicly traded on the Istanbul
•
A large base of alternative suppliers
•
A strategic location, enabling easy access for customers and suppliers
•
Products that address the needs of different sectors
•
Production flexibility
%
•
Self-sufficiency in semi-finished goods
Do¤an fiirketler Grubu Holding A.fi.
52.44
•
Experienced and technically competent staff delivering total customer-
D‹TAfi Do¤an A.fi.
10.00
Stock Exchange since 1987. In 1997, Do¤an Holding acquired the majority
of the shares of the Company.
Shareholder Structure
Free Float
Total
37.56
100.00
care coupled with meticulous after-sales service
•
Upgraded technology via new investments and superb laboratory
testing facilities.
44
Industry
Çelik Halat plans for further growth in the next three years by
increasing manufacturing capacity efficiencies and improving
profitability to reach 50,000 tons/year production and a sales
revenue of EUR 60 million.
Market Position
•
To deliver high value-added products and services to customers
Çelik Halat has traditionally directed its focus to the domestic market
•
To excel in customer satisfaction
•
To develop its Quality Management System with the cooperation of
although in recent years it has increased its exports more to developed
countries thanks to new capital expenditures, expansion of production
its employees
capacity and identification of greater opportunities for growth in the world
market.
•
To implement an effective Human Resources System to maintain the
While maintaining sustainable growth, Çelik Halat aims to be a highly
highest caliber staff to meet the challenges of the competitive global
profitable company with a universally known brand and a high exporting
market.
potential.
Vision, Mission and Targets
Vision
Çelik Halat aims to:
•
Become one of the well-known brand names worldwide
•
Become globally competitive by focusing on Total Quality Management
•
Constantly seek opportunities for further growth by reviewing and
Evaluation of 2005 Financial Results
In 2005, Çelik Halat decreased production by 4% to 39,247 tons, from
41,065 tons in 2004. At the same time, total revenue increased by 5%
to YTL 68.63 million, up from YTL 65.33 million the previous year.
In 2005, operational profit was YTL 3.17 million, profit before tax was YTL
1.74 million while net profit for the year was YTL 0.92 million.
monitoring developments in its field.
Comparison of Basic Financial Ratios
Mission
Çelik Halat’s mission is to:
Current Ratio
2005
2004
1.77
1.87
Acid-Test Ratio
1.33
1.11
•
Provide satisfactory and sustainable profit for shareholders
Debt/Equity Ratio
18%
28%
•
Continuously increase performance by following modern production
Leverage Ratio
45%
44%
and product technologies
Equity/Total Assets
55%
56%
•
•
Maintain its high sales rate in the competitive world market
Receivable Turnover
75 Days
73 Days
Inventory Turnover
59 Days
59 Days
Ensure that all the employees contribute to quality, cost savings and
customer satisfaction.
Targets
Exports in 2005 amounted to EUR 14.5 million. Along with the employment
opportunities provided by the Company, Çelik Halat is a significant
In line with its corporate vision and mission statements, Çelik Halat
contributor to the Turkish economy. Total tax generated by the Company
targets:
during 2005 was YTL 5.75 million (EUR 3.43 million).
45
Çelik Halat has consistently adhered to a set of corporate governance
Domestic Market Shares in 2005
%
Steel rope
30
devoted supporter of corporate governance with the belief that good
Bead wire
45
corporate governance is the best way to help the long-term business
Spring wire
40
success of the company.
Concrete strand
55
Galvanized wire
60
principles it has developed over the years. The Company Board is a
Focus on Quality
Since 1993, Quality Management Systems have been in effect at Çelik
Staffing
Çelik Halat employs a total staff of 379, 12% of whom are university
graduates. The average length of work experience of the staff is 11 years.
Time spent for in-house training was about 24 hours per employee in 2005.
Corporate Governance
Halat. The Company has the ISO 9000:2000 Quality Assurance Certificate
from TSE in addition to DNV, AJA, API and Lloyd’s certificates.
In addition, Çelik Halat is among the 26 companies globally authorized to
use the API monogram on its steel rope products. Currently, Çelik Halat is
in the process of obtaining an environmental protection certificate ISO 14001.
Çelik Halat also collaborates with universities, research institutions and
Businesses make a difference by creating value in a society. The value
machinery manufacturers to keep abreast of technological developments
comes from the wealth and employment the business creates, the quality
and closely follows all related trade publications worldwide.
of the products and services it provides and its fair pricing. Companies
play a part in improving the lives of all its shareholders including customers,
employees and partners. They contribute to raising the living standards
and purchasing power of citizens as well as vitalizing the economy.
During 2005, the Company completed myriad IT investments including
in a Backup Server, Quality Management System and Production Pursuit
System.
Companies using fair practices respect third parties and competitors. And
Plans for the Future
finally, businesses play a part in shaping the future of local, national and
Çelik Halat plans for further growth in the next three years by increasing
international communities in which they operate. While companies need
manufacturing capacity efficiencies and improving profitability to reach
to maintain their economic viability to continue to create this value, survival
50,000 tons/year production and a sales revenue of EUR 60 million.
by itself is not an adequate goal.
The Company aims to maintain its strong brand image and leadership in
Businesses that practice the four basic principles of corporate governance
the market. Cost-cutting processes will be implemented and additional
- transparency, fairness, accountability and responsibility - not only
training for employees will be provided at all levels to enhance efficiency.
contribute to their own credibility and stability but also to the smoothness
Quality improvement is a continuous process at Çelik Halat along with
and efficiency of business transactions.
ensuring work safety and environmental protection.
46
Industry
Ditafl’s objective for the forthcoming three years is to increase its
exports by over 50%, reduce operating expenses, achieve a growth
rate of 10% per year, strengthen its human resources, establish
strategic cooperations and create alternative business opportunities.
D‹TAfi
Field of Activity
Ditafl aims to increase its production capacity threefold while maintaining
Ditafl is the largest manufacturer of automotive suspension and steering
top product quality, reasonable prices and a high level of customer
parts in Turkey, supplying rod ends, ball joints and drag links for Turkish
satisfaction.
and global automotive brands.
To achieve this, the Company will:
Highlights
•
Make Ditafl a global supplier of automobile manufacturers
•
Supplier to OEM, OES and IAM segments of the automotive business
•
Position Ditafl to become the preferred brand in the replacement
market
•
33 years of experience and strong brand recognition
•
Create satisfied employees and customers.
•
Largest supplier of drag links for Turkish automotive manufacturers
•
25% market share in Turkey
Ditafl will also:
•
Highly experienced and well-trained personnel
•
Commit itself to continuous improvement and development
•
Flexibility in manufacturing processes enables rapid deliveries
•
Reinforce communication between employees and management
•
Design capability meeting customer needs
•
Enhance its human capital competencies through ongoing employee
training
•
Prototype testing facilities
•
Reinforce its zero-defect initiative
•
New investments in machinery and equipment
•
Strengthen its leadership position in the market
•
A strong sales network of 26 dealers and 47 international customers.
•
Maintain a professional management structure
•
A wide product range containing 2,000 different products.
•
Adhere to good corporate governance principles.
History
Evaluation of 2005 Financial Results
Originally established in 1972 by Turkish workers in Germany, Ditafl grew
rapidly and gathered many well-known companies in its shareholder
structure. In 1990, 62% of the Company’s shares were purchased by
Do¤an Holding. In the following years, some minority shares were sold on
the Istanbul Stock Exchange, making Ditafl a publicly listed and traded
company.
In 2005, Ditafl achieved a net sales revenue of YTL 30.44 million. Net
profit was YTL 383,929 for the year compared to YTL 4.89 million for the
previous year. In 2005, Ditafl was a direct contributor to the Turkish
economy with regard to paid taxes and insurance totaling YTL 2.72 million
and a gross added value of YTL 9.58 million.
Exports in 2005 amounted to EUR 7.52 million achieved through the sale
%
50.93
of 44% of its 3,278,698 total units of production to 47 different customers
in 18 countries.
Ni¤de Provincial Administration
0.22
Ditafl’s objective for the forthcoming three years is to increase its exports
Minority Shareholders
0.92
by over 50%, reduce operating expenses, achieve a growth rate of 10%
47.93
per year, strengthen its human resources, establish strategic cooperations
Free Float
Total
100.00
and create alternative business opportunities.
47
Staffing
Ditafl employs a total staff of 565, of whom 60 are university graduates and
six are postgraduates. Average work experience of the staff stands at about
11.4 years for the management team and 8.1 years for other employees.
The integrated facilities consist of hot and cold forging, heat treatment,
molding workshop, machining, surface protection (phosphating, painting,
galvanizing), vulcanization (rubber vulcanization), assembly, packaging
and several test stations for Quality assurance and RBD.
The average number of job-training hours per employee increased to 8.0
Additional investments in a Computer Aided Quality Management system
by the end of 2005, compared to 6.5 hours per person for 2004.
and FEA are planned in 2006.
Ditafl improves the level of satisfaction of its employees by empowering
The famous blue product box has become synonymous with the Ditafl
its employees and by facilitating team sports and social activities.
brand in the marketplace. Ditafl has been accredited with the following
Ditafl stresses the importance of HR practices to be able to maintain
licenses and certifications that illustrate quality and proficiency:
sustainable growth by developing an integrated, comprehensive HR system
•
Rod Ends TSE – TS Compliance Certificate (TS 5476)
including Performance Management, Reward Management, Learning &
•
Ball Joints TSE – TS Compliance Certificate (TS 9444)
Training and Career Management. Ditafl’s performance management
•
Proficiency in Manufacturing License
system forms the foundation of its entire HR system.
•
ISO 9001:2000 Quality System Certificate
Focus on Quality
•
Koç Group Quality System Proficiency Certificate (A Grade)
•
ISO/TS 16949; 2002 Automotive Suppliers’ Quality System
•
TS/ISO 14001 Environmental Management System.
Ditafl operates integrated factory facilities which use engineering and
manufacturing systems such as:
An initiative is underway to obtain the Q1 Quality Certificate in 2006.
•
CAD (Computer Aided Design)
•
CAM (Computer Aided Manufacturing)
•
FEA (Finite Element Analysis)
Total sales of EUR 19.95 million are projected for 2006, with exports of
•
MRP (Resource Planning)
EUR 7.71 million. By 2010, the Company has set a goal for total sales of
•
MARC (Machine Readable Cataloging).
USD 63 million, with an annual production level of 10 million units.
48
Industry
Do¤an Organic Products is engaged in organic milk production in the
Kelkit region of Turkey. With the organic production certificate it
received in June 2005, Do¤an Organic has created Europe’s largest
production capacity in organic milk.
DO⁄AN ORGANIC PRODUCTS
Highlights
Field of Activity
•
First of its kind in Turkish agri-business
•
Largest organic milk production facility in Europe
•
One of Europe’s 10 best social responsibility projects
•
An innovative player of the industry
•
Uses the most advanced technology available
•
Major research and development capacity
•
Strong environmental philosophy
•
Strong market potential.
Do¤an Organic Products is engaged in organic milk production in the
Kelkit region of Turkey. With the organic production certificate it received
in June 2005, Do¤an Organic has created Europe’s largest production
capacity in organic milk.
With a partnership with UNDP, the Company conducts training programs
in Kelkit, aiming to educate farmers working under contract and create
an awareness of organic feed and milk production.
History and Shareholder Structure
Efforts in this area have resulted in an expansion of the land allotted to
organic feed. This area in the Kelkit region, which was some 1.56 million
square meters in 2003, was increased to 12.37 million square meters in
2005. As a result, total land allotted to feed planting in the province of
Gümüflhane increased from 10.53 million square meters in 2003 to 30.63
Do¤an Organic Products was established in April 2002, and commenced
operations in October 2003 with its first herd. In accordance with its social
mission of creating value and contributing to economic growth in the
region through contracted production, the Company completed the first
part of its expansion investment in 2005.
million square meters in 2005 according to the Gümüflhane Provincial
Directorate of Agriculture. Productivity and value added in the region will
be growing steadily in the years ahead.
In June 5, 2005, Dogan Organic recieved its organic product and farming
certification through the Swiss firm, IMO (Institute for Marketecology
GmbH), an EU certified control and certification company.
Do¤an Holding is the Company’s major shareholder, with a stake of 98%.
The remaining shares are divided equally among Çelik Halat ve Tel San
A.fi., Milta Turizm ‹fll. A.fi., Do¤an Otomobilcilik Tic. ve San. A.fi. and
Ditafl Do¤an Yedek Parça ‹malat ve Tic. A.fi.
49
The Company is also keenly committed to protecting the environment.
Do¤an Organic Products aims:
Do¤an Organic Products is working with consultants to obtain an HACCP
•
To transform the Kelkit region into a center for cattle breeding and
organic milk and meat production
•
To become a leader in organic animal products through environmental
protection, quality, effectiveness and a focus on sustainability
•
To work continuously on research and development in production
Management Systems Certificate.
The Company has adopted and maintains the philosophy and corporate
governance principles of its parent, Do¤an Holding.
Staffing
and processing techniques and ultimately to become a technology
Do¤an Organic Products employs 57 persons, 18% of whom are university
provider.
graduates, 1% vocational school graduates and 42% high school graduates.
Do¤an Organic Products hopes to achieve the following:
•
certificate. After this accreditation, it will also apply for an ISO 9001 Quality
Contribute to the creation of healthy and well-cared for generations
of cattle suitable to the region, that have been fed on certified products
free of synthetic chemicals
Fifty-three employees reside in Kelkit; the average age of the staff is 30.
Technical employees are both experienced in organic agriculture and are
also familiar with the local production system. Working at an innovative
company that implements new agricultural methods has created a strong
team spirit among employees, who receive intensive technical and applied
•
Evenly share the value generated by the adoption of strict business
training on an on-going basis.
ethics, know-how and foster financial gain for farmers, suppliers,
laborers and employees
•
Confirm and prove that organic agriculture can create significant
added value in Turkey through the combined efforts of enterprises
•
Do¤an Organic Products has developed a three-year program for improving
the quality of its organic milk and meat production.
and farmers, by adhering to principles of environmental protection
Organic packaged milk was introduced to the market in July 2005 and
and social responsibility
will continue to expand as the market dictates.
Leave an unharmed and unpolluted environment to future generations.
Do¤an Organic seeks to transform the region into a center for cattle
Focus on Quality
breeding and organic milk and meat production, in collaboration with
farmers working under contract.
Because of the nature of its production, Do¤an Organic Products must
adopt strict quality regulations to meet basic organic standards. For
sustained organic production, the whole production process must be
monitored. Custom-designed IT systems are used to monitor and verify
input accuracy and output quality. These systems are entirely new within
Turkish agriculture.
50, 51
Trade
profitable...
52
Trade
Similar to Do¤an Holding’s other business units, the Trade Group has
advanced over the years as it contributes to the Holding’s large market
share and long-term strategic objectives.
During 2005, the Group companies grew steadily, and the
results of their success are reflected in rising revenues
and improved productivity, in line with their “management
for growth” strategic plan. Progressive paid-in capital and
strong balance sheets in addition to healthy cash flow have
also contributed to this expansion. This Group maintains
sustainable growth and invests in vital sectors of the
economy, thus becoming net contributors both to Do¤an
Holding and the Turkish economy.
The Trade Group companies mass market moderate-tohigh value products such as electronics and household
appliances, automobiles and real estate. As the leading
national group of companies in the Turkish market with
global reach, they also specialize in financial products for
the mass market and cooperate with other divisions within
Do¤an Holding, in particular with DYH’s media companies.
The concept of Strategic Marketing is vital to the operations
of our Trade Group companies, as they assist in the overall
marketing efforts of Do¤an Holding companies.
In every sector in which Do¤an Holding has entered, it has
structured its activities with a customer-centric approach
to reach its profitability and productivity targets and achieve
its strategic goals. Likewise, the goal of the Trade Group’s
marketing companies is to create a loyal and satisfied
customer base all over the country, through the profitable
sale of high quality merchandise at favorable terms and
conditions, coupled with exemplary customer service.
Trade Group companies see emerging markets and new
products for the mass market as instruments to boost their
profitability.
Do¤an Holding marketing companies employ state-of-theart IT infrastructure to design and implement sales
campaigns. This ensures continued accuracy and speed
in all sales channel activities, including planning,
procurement and delivery.
The Trade Group looks forward to expanding its activities
and reaching beyond our domestic borders into the region.
53
DO⁄AN OTOMOB‹LC‹L‹K
Field of Activity
To achieve its goals, Do¤an Otomobilcilik has structured itself so that it
delivers the highest quality sales and after-sales services to its customers,
helping to build an excellent brand image for Do¤an Oto and Ford in the
Do¤an Otomobilcilik operates as a 3S distributor for Ford Motor Company
marketplace. It strives to improve collaboration with stakeholders by
in the Kad›köy district of Istanbul. It has received numerous awards for
establishing effective lines of communication, offering all parties a satisfyingly
successful performance from Ford Otosan, the manufacturer of Ford
efficient experience.
vehicles in Turkey.
In a continuous effort to create and maintain a completely satisfied
Highlights
customer base, Do¤an Otomobilcilik aims to improve its quality of service
•
32 years of experience in the market
by adhering to Total Quality Management guidelines. The Company strives
•
Strong market reputation
•
Experienced sales and after-sales service staff
•
Loyal customer base
•
High potential for fleet sales
•
Strong media support
•
Suitable premises for handling a large service volume
•
Excellent technological infrastructure to service all types of vehicles
•
Impressive sales volumes and market shares
to regularly exceed customer expectations, while simultaneously maintaining
History and Shareholders
a highly motivated and satisfied workforce.
Assessment of 2005 Activities
In 2005, Do¤an Otomobilcilik achieved growth in all its key operational
areas. It sold 2,270 vehicles and increased net sales by 8%, reaching a
total of YTL 75 million. The Company paid YTL 2.7 million in value added
tax and YTL 0.5 million in income tax for the year.
Staffing
Do¤an Otomobilcilik employs a highly qualified staff of 113. Eighteen staff
members possess university or post-graduate degrees. The Company
places importance on training and offers its personnel career and personal
development opportunities. It is an equal opportunity workplace, with
Established in 1963 by Ayd›n Do¤an, Do¤an Otomobilcilik became a
limited liability company in 1974. Current shareholders are Do¤an Holding,
with a share of 99.76% and private individuals including Ayd›n Do¤an
and other family members.
It is the vision of Do¤an Otomobilcilik to maintain the trust of shareholders
and become the most admired leading company in the sector. The
Company stresses the importance of information sharing and experience,
as well as emphasizing its social responsibilities.
programs implemented to boost motivation, efficiency and team spirit.
Performance is evaluated at regular intervals and successful employees
are rewarded. There are frequent get-togethers and retreats to further
enhance the warm and friendly atmosphere within the Company.
Adherence to Quality and Corporate Governance
As a Do¤an Holding company, Do¤an Otomobilcilik strictly adheres to the
corporate governance principles its parent company has set forth. These
guidelines cover all major operations of the Company, defining and setting
rules for decision-making, risk management, corporate communications,
employment, social responsibility and audit mechanisms.
54
Trade
Milpa is a pioneering company in targeted sales campaigns and has
received extensive media support from Do¤an Media Group’s channels.
In the automotive sector, the Company has achieved a particularly
high volume of sales for Fiat passenger cars.
Currently, the Company is in the process of obtaining the ISO 9001 Quality
Assurance Certificate. The Company fully abides by the principles of Ford
Otosan’s progressive and strict environmental guidelines.
In addition, more than 400,000 diverse household goods, mainly electronics,
Do¤an Otomobilcilik closely follows global IT developments, adopting
relevant technologies for its business line. The Company plans to migrate
some of its activities to the Internet in an effort to serve customers more
efficiently and develop closer relationships.
include:
•
First to utilize marketing campaigns
Looking ahead to the next ten years, Do¤an Otomobilcilik plans to take
full command of sales regarding Ford brand vehicles. As the Company
continues to foster its sales and marketing efforts, it also seeks to improve
after-sales activities and increase its market share both in the region and
throughout the country. Do¤an Otomobilcilik will also continue to closely
follow market trends and take advantage of changing market conditions
to create new business opportunities in order to boost brand recognition
and increase profitability.
•
First to use marketing campaigns for used cars
•
First in campaign sales with bank credit
•
First in sales via the internet
•
First in sales with delivery at a later date
•
First in catalog sales
•
First company to initiate sales of real estate through mass marketing
have been sold to Turkish consumers.
Milpa has been a pioneer in many of it initatives. Its many “firsts”
•
First marketing company to be awarded the ISO 9002 Quality Assurance
Certificate
M‹LPA
campaigns
Field of Activity
•
Founded 26 years ago, Milpa is a mass marketing company of moderateto-high value products such as electronic goods, vehicles and real estate.
As the leading national company in the Turkish market with global reach,
it specializes in financial products integrated with marketing campaigns
for durable household goods and other big ticket items aimed at the mass
market.
Additionally, Milpa has:
Recently, the Company has expanded its portfolio of goods to include
televisions, computers, mobile phones, air conditioning units, audio-video
systems, motorcycles, passenger cars, minibuses and real estate.
Milpa is a pioneering company in targeted sales campaigns and has
received extensive media support from Do¤an Media Group’s channels.
In the automotive sector, the Company has achieved a particularly high
volume of sales for Fiat passenger cars. More than 100,000 passenger
cars were sold by Milpa since the start of the campaigns.
First long term financial instrument user without a co-signer.
•
Strong customer trust with a 26 year track record
•
A pioneering position in the marketplace
•
Extensive experience in sales campaigns
•
Extensive experience within the automotive sector
•
Excellent customer-oriented service supported by a strong technological
base.
In 2003, in another pioneering venture, Milpa extended its services into
the real estate sector and began to sell real estate in several cities via
media campaigns. Milpa will soon complete the construction and sales
of a new shopping center with an adjoining residential/commercial complex
which will consist of 503 individual units.
55
History
Targets
1980 - The establishment of Milpa as one of the partnerships of Do¤an
To maintain quality, goods that make up the portfolio are reviewed
Holding. The aim of establishing the company was to meet the growing
constantly to adapt to changing customer demands, while new methods
demand.
for timely deliveries and new financial instruments to achieve increased
efficiency are pursued.
The first branch office was opened in Ankara, followed shortly by offices
To maintain its dominant market position, Milpa will:
in ‹zmir and Istanbul.
1988 - First automotive campaign was initiated.
1989 - First campaign sales with bank credit.
1994 - Milpa became a publicly traded company with its shares listed
and traded on the Istanbul Stock Exchange.
•
Find and market new products for the mass market to boost profitability
•
Reach new customers and suppliers
•
Look beyond the daily needs of its customer base
•
Enter different sectors such as residential and commercial real estate
•
Improve its stable financial performance
•
Assist in the marketing efforts of Do¤an Holding companies
1998 - Awarded the ISO 9002 Quality Assurance Certificate.
•
Organize targeted sales campaigns
2003 - 128.000 m2 shopping center and real estate project was initiated.
•
Reform customer oriented services and products
%
65.00
Do¤an Family
Free Float
Total
•
Achieve the highest exemplary customer satisfaction
•
Improve training programs to enhance the sales skills of its personnel
•
Invest further in the technology, especially the internet
Staffing
0.50
34.50
100.00
Milpa has a staff of 43, nearly half of whom hold university degrees.
Milpa’s company goals
Milpa will continue to deploy state-of-the-art technology when designing
Vision and Mission
and implementing sales campaigns. This will ensure continued accuracy
Milpa envisions to:
and speed in all our sales channel activities, including planning, procurement
and delivery of the goods to the customers. Being both efficient and fast
•
Grow nationally and regionally
while planning for the future are necessary to maintain our dominant
•
Create value for its shareholders, employees and third parties
position in today’s and tomorrow’s market.
•
Enlarge its portfolio of products
•
Strengthen its position in marketing and sales, and increase its regional
reach
56
Trade
Hürriyet Pazarlama, which sells automobiles and motorcycles by
different makers, is a marketing company operating in collaboration
with media outlets. It capitalizes on the strength and synergy created
between the Company and the Do¤an Media Group as it establishes
strong business alliances to reach potential customers with products
in high demand.
HÜRR‹YET PAZARLAMA
Field of Activity
Hürriyet Pazarlama was established in 1995. After a capital increase in
Hürriyet Pazarlama, which sells automobiles and motorcycles by different
makers, is a marketing company operating in collaboration with media
outlets. It capitalizes on the strength and synergy created between the
Company and the Do¤an Media Group as it establishes strong business
alliances to reach potential customers with products in high demand.
Highlights
•
A respectable, trustworthy and robust company
•
Strong brand recognition and competitive advantage gained through
Hürriyet, Turkey’s most respected newspaper
•
A trust-based relationship between clients and the Company
•
Cooperation with well-esteemed companies such as Renault, Hyundai,
Mitsubishi, Suzuki and Peugeot
•
Exemplary customer relationship management (CRM) system based
on state-of-the-art IT deployment.
2003, the shareholding structure changed to the current structure reflected
below.
Hürriyet Gazetecilik
%
97.426
Adilbey Holding
1.404
Ortado¤u Otomobilcilik
1.077
Ayd›n Do¤an
0.047
Milpa A.fi.
0.047
Total
100.00
57
Hürriyet Pazarlama works to develop an effective and efficient marketing
Hürriyet Pazarlama seeks ongoing enhancement of its strong market
strategy in collaboration with various media channels by using the strength
position in the future by further increasing sales and improving the quality
and synergy created between the Company and the Do¤an Media Group.
of its customer service. The Company aims to raise the level of customer
Its mission is to establish strong business alliances and to reach potential
customers with suitable products, offer them favorable financial solutions
while keeping its client-focused marketing approach.
To achieve its vision and mission, Hürriyet Pazarlama seeks to strengthen
ties with customers and expand its market presence. In particular, the
Company endeavors to thrive in the automotive and real estate sectors.
Staffing
In 2005, Hürriyet Pazarlama employed a staff of 20, nearly half of whom
hold university degrees. Most of these staff began working at the Company
within the first year of operations, which shows a very low employee
turnover.
satisfaction by providing improved training for its personnel and investing
in state-of-the-art technology. In addition, the Company plans to expand
its offerings to include commercial and residential real estate.
58, 59
Tourism
fun...
60
Tourism
SEMA I. DO⁄AN
TOURISM GROUP PRESIDENT
Milta is committed to drawing more
visitors to Turkey, ensuring a high
level of customer satisfaction
through delivering superb guest
services, increasing per capita
visitor spending and creating more
jobs for the community thus
contributing to efforts aimed to
uplift the business potential of the
country.
M‹LTA
Field of Activity
Milta is involved in tourism services that include a hotel, two holiday
villages and a marina as well as travel agency operations. It is a leading
company in Turkey with wide-range of activities.
Highlights
Milta is committed to drawing more visitors to Turkey, ensuring a high
level of customer satisfaction through delivering superb guest services,
increasing per capita visitor spending and creating more jobs for the
community thus contributing to efforts aimed to uplift the business potential
of the country.
The Company currently embraces diversified tourism businesses as part
of the economic development initiative. While further improving its existing
services, Milta’s ultimate goal is to extend its operations beyond its current
•
One of Turkey’s leading and most financially stable tourism enterprises
•
Strong reputation, credibility and customer focus gained through
boundaries. To achieve this, the Company identifies and capitalizes on
the right investment opportunities, establishes sound strategies for future
healthy investment and management performance
development efforts and devises programs for new concepts and attractions.
Competitive advantages in terms of service, product quality, customer
Evaluation of Financial Results in 2005
•
trust and satisfaction
•
Strong synergy created with other Holding companies in areas such
as advertising, finance and insurance
Initially founded in 1982, Milta assumed its present status in 2001,
following several name changes and finally merging with Karada Turizm
Despite a sluggish to moderate global tourism growth in 2005, Milta’s
activities generated more than USD 30 million in direct spending and
USD 2.4 million in taxes with a direct payroll of more than USD 3.8 million
for the year. The total impact of the contribution of the Company to the
Turkish economy is estimated to be around USD 47 million annually.
Milta’s tourism revenue is expected to exceed USD 34 million in 2005.
Market Position
and Milta Travel Agency.
Total number of beds in the Antalya ve Mu¤la region (investment +
operationally licensed): 468,000
Milta’s vision is to become one of the country’s leading tourism companies
Total number of beds owned/operated by Milta: 1,400
by integrating all aspects of the travel industry under one roof.
Milta’s tourism revenue: USD 30 million
61
2006 and Beyond
•
incoming tour operations. As part of its medium to long-term strategy,
Turkey has planned and declared its full intention to increase the number
Ifl›ltur will establish associate agencies in Germany, France, Russia
of incoming travelers to 20 million, bringing USD 18 billion in revenues
and Scandinavian countries either through direct investments or
by the year 2006 and 30 million visitors estimated to generate USD 30
partnerships and joint ventures.
billion in revenues by the year 2010.
To keep pace with these objectives and increase its market share to a
Milta Ifl›l Tur Travel Agency is taking a more active approach towards
•
All Milta holiday villages and marinas participate in the Foundation
for Environmental Education (FEE) program and have been awarded
corresponding level, Milta aims to:
the Blue Flag, an eco-label presented to beaches and marinas that
•
Continue to revamp/refurbish its existing facilities
•
Expand its current line of business through new acquisitions and
•
practice good environmental management.
•
Milta has upgraded its IT infrastructure, its facilities and management
mergers
systems with state-of-the-art technologies in various areas, including
Explore and exploit new opportunities and areas of growth.
marine technology, boat handling, digital TV and music distribution
in hotel rooms, on-line booking, car pool surveillance and advanced
Current Operations and Plans for the Future
•
Milta has a nine-year management contract with the German-based
telephone communications systems.
Staffing
international tour operator Öger Tours GmbH to operate its Kemer
holiday village.
Milta has a staff of 361, made up of permanent and seasonal employees.
University and equivalent school graduates make up 20% of the total
•
Club Milta Bodrum offers a wide variety of hospitality services to
workforce.
customers through leading international tour operators.
Milta’s vision in human resources essentially focuses on the importance
•
Milta Bodrum Marina is pursuing cooperation and joint venture
initiatives with marinas in Greece and Israel to promote and increase
the volume of yachting tourism along the Eastern Mediterranean coast.
of understanding and merging company, management and employee
needs to increase efficiency, productivity and profitability.
62
Tourism
Through its close relationships with international intermediaries based
on its timelines and reliability, Do¤an Air organizes flights to countless
destinations across the world including Australia and the United States
while providing superior comfort and highly reliable technological
safety for its customers.
Milta is committed to becoming a workplace of choice, with strict policies
Through its close relationships with international intermediaries based on
of integrity and ethics. Everyone at Milta is required to carry out their
its timelines and reliability, Do¤an Air organizes flights to countless
duties in accordance with policies set forth in relevant company policy
destinations across the world including Australia and the United States
directives and must conform to all applicable laws and regulations.
while providing superior comfort and highly reliable technological safety
The corporate governance principles outline the broad aspects of legal
for its customers.
and ethical business conduct under which Milta operates. Every person
The Istanbul based company keeps and maintains its aircraft in a hangar
who works for the Company, its affiliates, or subsidiaries is expected to
at Atatürk Airport. Do¤an Air further plans to expand its fleet with new
understand and comply with the provisions of these principles.
aircraft purchases based on the changing needs of its customers and
regional requirements.
DO⁄AN AIR
Established towards the end of the year 2000, with an initial aim to provide
air-taxi services, Do¤an Air is run by an expert management team with
many years of experience in the aviation industry. The first aircraft of the
The Company’s revenues reached USD 3.5 million in 2005 for 692 flight
hours, 31% of which were flown for inter-company and 69% for extracompany services.
Company was a Dassault Falcon 2000, a wide-fuselage aircraft which has
been in service since March 2002. The Dassault Falcon 2000 has a ten
passenger capacity. With its excellent capability of flying with single
refueling stops, the aircraft can easily fly to numerous destinations in the
world.
%
Do¤an fiirketler Grubu Holding A.fi
95.44
Other Shareholders
4.56
Total
100.00
Net Sales (USD)
Years
Head Office
Ifl›ltur
Marina
Club Milta
Total
2004
2,452,571
12,070,415
5,351,755
4,592,334
24,467,075
2005
2,296,002
16,938,497
6,187,831
4,193,242
29,615,572
-6
40
11
-9
21
Change (%)
63
64, 65
Insurance
trustworthy...
66
Insurance
Under its mission statement, which targets sustainable growth and
profitability by pursuing rational pricing policies and continually
augmenting its market share, Ray Sigorta achieved an overall market
share of 3.5% in 2005 within a sector comprised of 25 non-life
insurance companies.
RAY S‹GORTA
Highlights
Field of Activity, History and Shareholders
•
Widely recognized in the international reinsurance sector
Ray Sigorta was chartered in 1958 in participation with predominantly
•
Has one of the highest premium collection ratios in the marketplace
•
High collection ratio enables Ray Sigorta to maintain an investment
state-owned transportation enterprises. The Company operated primarily
within the transportation industry and gained valuable experience in that
portfolio of liquid financial assets
area. Do¤an Holding acquired the majority of Ray Sigorta’s shares from
the Privatization Administration in 1992. Currently, Ray Sigorta’s primary
•
Secure reserving policy
business is insurance provision and it is a public company listed on the
•
Made a name for itself in the industry by settling all claims timely and
Istanbul Stock Exchange, with the majority of shares owned by the Do¤an
efficiently
Group.
•
Wide Agency network throughout Turkey
67
Market Position
Under its mission statement, which targets sustainable growth and
profitability by pursuing rational pricing policies and continually augmenting
its market share, Ray Sigorta achieved an overall market share of 3.5%
in 2005 within a sector comprised of 25 non-life insurance companies.
Along with a careful new agency selection process, close ties with Do¤an
Holding form the basis of the strategy to increase market share and attain
further growth. The medium-term strategy of Ray Sigorta rests on its target
of maintaining its position as one of the strongest insurance companies
in the marketplace capable of collecting premiums on time, creating
additional funds for new investments.
Ray Sigorta, operating through Fortis Bank branches in addition to 530
agencies of its own, generated insurance premium revenues of YTL 200.7
million in 2005. Presently, the Company serves approximately 950,000
individual policyholders in various business segments.
68, 69
Media
reliable...
70
Media
Do¤an Yay›n Holding (DYH) is Turkey’s leading media and entertainment
conglomerate. It operates in TV and radio broadcasting and print and
online media. DYH is uniquely positioned in the Turkish media industry
to inform and entertain as well as connect people in innovative ways
that enrich their lives.
Do¤an Family
The Ayd›n Do¤an Foundation
Free Float
Total
%
63.02
2.30
0.67
34.01
100.00
Do¤an Yay›n Holding and Its Participations
Do¤an Yay›n Holding (DYH) is Turkey’s leading media and
entertainment conglomerate. It operates in TV and radio
broadcasting and print and online media. DYH is uniquely
positioned in the Turkish media industry to inform and
entertain as well as connect people in innovative ways that
enrich their lives.
Do¤an Yay›n Holding, Hürriyet, Milliyet and Do¤an Burda
stocks are publicly traded on the Istanbul Stock Exchange.
A Unique Business Model
The business model adopted by DYH foresees two main
divisions within the Holding to better accommodate its
ever-expanding and diversifying activities: content producers
and service providers.
DYH’s content producers include its newspapers, magazines,
book publishers, TV channels, radio stations and music
company. Service providers include distribution, retail,
production, cable TV, Internet, printing and advertising
sales companies as well as a factoring company.
Convergence and Synergy
Operating under the guiding principle of convergence,
significant synergies result between DYH’s companies.
Many of the Holding’s businesses are leaders in their
respective sectors and markets.
Newspaper Publishing-The Core Business Activity
Newspaper publishing has traditionally been the core
business activity of DYH. Eight newspapers including
Hürriyet, Milliyet, Radikal, Posta, Fanatik, Referans and
Gözcü and more recently the Turkish Daily News - the
country’s premier English-language newspaper - form the
backbone of DYH’s print media business.
Top Rated TV Channels
DYH’s Kanal D is one of Turkey’s most popular and profitable
television channels. With the acquisition of Star TV, Turkey’s
first ever private channel, to the DYH family in the final
months of 2005, DYH has added yet another widely-viewed
channel to its network. DYH’s operations in the thematic
channel segment of the industry include the news channel
CNN TÜRK - DYH’s joint venture with Time Warner; music
channels Dream TV, Dream Türk TV; sports channels BJK
TV and Fenerbahçe TV; and the interactive channel Fix TV.
A Diverse Portfolio of Magazines
Publishing a total of 24 magazines, Do¤an Burda (DB) is
engaged in the import and domestic distribution of some
of the world’s leading newspapers and periodicals. At the
same time, DB is also the representative of two international
DYH partnerships.
71
Bestsellers
Online Leader
With a market share of approximately 20% of the country’s
best-selling titles, Do¤an Kitap is Turkey’s most dynamic
publisher. A joint venture between DYH and Egmont of
Denmark, Do¤an Egmont is the leading publisher of books
for Turkish children and teens.
DYH, Turkey’s largest content provider, has taken important
steps to develop its new media activities. The first of these
was the expansion and consolidation of its existing activities
by prioritizing investment in Internet and cable TV services.
As a Group, DYH possesses the potential to create significant
synergy in terms of content and connectivity between its
Internet and digital broadcasting units. DYH has put
together the widest spectrum of portal groups within Do¤an
Online, Turkey’s largest Internet company.
International Reach in Music
Do¤an Music Company has had a licensing agreement with
Bertelsmann Music International Service GmbH, a subsidiary
of one of the world’s largest media conglomerates,
Bertelsmann AG. With the support of BMG, Do¤an Music
has been able to enter the international music industry
while introducing its own artists globally.
More, recently, Do¤an Music Company signed an agreement
in 2005 with Universal Music Group (UMG), the global
music market leader with a share of 24.7%. With activities
in more than 77 countries, Universal Music gets its power
and immeasurable value from various rooted labels within
its organization that represent globally recognized musical
talent.
Quality in Printing and Unmatched Distribution Capability
DYH has a key market position in the distribution of print
media in Turkey due to the size, reach and efficiency of
Yaysat. Do¤an Ofset is an internationally competitive
printing company offering high standards of print and
quality service.
Retailing Books and Music
D&R, the DYH family’s music and book chain store, is the
market leader in Turkey in products of culture, entertainment
and the arts. D&R uses a variety of marketing platforms,
from stores in prime locations to the D&R online store to
reach book and music lovers.
72
Media
Hürriyet is Turkey’s first internationally recognized newspaper and
continues to be the best-known media company in the country.
Hürriyet’s reputation extends beyond Turkey; it has one of the highest
circulations among non-European newspapers in Europe.
NEWSPAPERS
History and Market Position
With an average daily circulation of 4.1 million, Turkey’s newspapers
For more than 50 years, the name Hürriyet has been synonymous with
continue to be a sought after venue by advertisers. With eight daily papers,
freedom of speech and objectivity in journalism. True to this reputation,
Do¤an Yay›n Holding commands a 40% market share of circulation in
Hürriyet has assembled a distinguished group of journalists, editors and
Turkish newspaper media.
columnists with diverse opinions and perspectives covering a wide range
HÜRR‹YET
Field of Activity
Turkey’s long-time top selling newspaper Hürriyet is also one of the top
selling non-European newspapers in Europe.
Highlights
of political views. The newspaper’s high quality content has made it
Turkey’s most widely read daily paper. Reflecting the highest of Turkey’s
democratic and social ideals, Hürriyet is the readers’ first choice for its
editorials, clear and concise coverage of politics, the economy, business,
sports, entertainment and the arts.
Hürriyet’s primary goal is to maintain its policy of fair, unbiased and
independent coverage of current local and global affairs. With a reputation
•
Turkey’s number one newspaper
for superior standards in journalism coupled with current, accurate and
•
More than 50 years of market presence
objective reporting, Hürriyet has long been the primary reference guide
•
A distinguished group of writers with diverse opinions and perspectives
•
40.8% market share in total newspaper advertising revenue
•
Strong financial position
•
One of the few companies outside the financial sector to receive
for the nation’s influential opinion leaders and decision-makers.
Hürriyet is Turkey’s first internationally recognized newspaper and continues
to be the best-known media company in the country. Hürriyet’s reputation
extends beyond Turkey; it has one of the highest circulations among nonEuropean newspapers in Europe.
regular credit ratings
Financial Assessment
•
A leader in electronic publishing
Directed toward exceeding the expectations of its readers, Hürriyet provides
•
The first company to publish its corporate governance principles and
legally change its bylaws
a compelling, highly effective and well-targeted medium for its advertisers.
As a result, Hürriyet maintains the strongest financial position of any
newspaper in Turkey.
Hürriyet is the undisputed market leader in Turkey, with a 40.8% market
share in terms of total newspaper advertising revenue and a 10.4% market
share in terms of total circulation. In 2005, Hürriyet commanded a 14.9%
share of the total advertising revenue in Turkey.
73
Hürriyet is one of the few companies outside the financial sector to receive
with these devices has been developed. Thus, Hürriyet increased the
a credit rating from Fitch Ratings. Hürriyet is also highly regarded by the
number of people it can reach by making its transition from computer
international investment community: over 82% of the newspaper’s free
screens to mobile phone screens and PDAs.
float (33% of total shares) on the ISE is controlled by international investors.
The advertisement income of hurriyet.com.tr realized as USD 1,150 million
Efficiency gains achieved by the centralization of procurements, printing
in 2005, consists mostly of banner advertisements and is expected tol
facilities and distribution channels; application of standard accounting
increase through a comprehensive series of projects reaching as far as
systems throughout sister companies; and utilization of a centralized
the SMEs in 2006. As the first step towards implementation of these
management information system under the umbrella of DYH are expected
projects, it is planned that first the Hürriyet Emlak (Real Estate) Portal will
to result in further improvements in the Company’s profitability.
be launched in the first half of 2006 followed by the Automotive project.
In 2005, Hürriyet’s average daily circulation was 519,000; with regards
In a project carried out in 2003 and 2004, Hürriyet scanned every issue,
to both daily average net sales and advertising revenue, Hürriyet was the
beginning with its first publication on May 1, 1948 and transferred the
sector leader in Turkey.
information to a digital format. During 2005, this archive was made
In 2005, Hürriyet’s turnover was YTL 585 million, with a net profit of YTL
87.5 million and a paid-in capital of YTL 416.7 million.
Leader in Electronic Publishing
Established in January 1997, Hürriyet Internet was one of the first online
newspapers in Turkey. During this time, it evolved from being the Internet
version of Hürriyet newspaper to a news portal operating continuously on
a 24-hour basis as of October 2000. In January 2001, hurriyetim.com.tr
became part of an independent company, Hürriyet Internet Hizmetleri ve
Tic. A.fi. However, the Internet version of the Hürriyet newspaper can still
be reached through hurriyetim.com.tr.
available on the Internet, enabling a day-to-day study of Turkish history
in all its detail from 1948 to the present.
Independent Members of the Board of Directors
Within the framework of the Hürriyet’s Corporate Governance Code, the
first independent members of the Board of Directors of to be appointed
are Cem Kozlu and Bild Newspaper General Manager Kai Diekmann.
Socially Responsible Market Leader
Hürriyet is fully aware that newspaper journalism requires maximum social
responsibility. With its “Stop Family Violence” campaign that it introduced
at the end of 2004, it supports efforts to solve one of the most important
Hürriyet has changed its web address from hurriyetim.com.tr to hurriyet
social problems - one that transcends class, cultural and religious differences
com.tr in October 2005, as a part of its Web-related strategies. Meanwhile
and national boundaries. Hürriyet placed the problem on the agenda
it has renovated its infrastructure to match new technological standards
within the context of an integrated program and organized training sessions.
and has nearly six million visitors and 150 million hits on a monthly basis.
In November 2005, it held a conference in Istanbul, attended by the
hurriyet.com.tr keeps itself updated and on the cutting edge regarding
Web services with its new services such as E-gazete (E-newspaper), Seri
‹lanlar (Classified Ads), Haber Alarm› (News Alert), e-Anket (e-Survey)
and Bülten (Bulletin). Parallel to the increased use of mobile devices such
as mobile phones and PDAs, a new version of hurriyet.com.tr compliant
United Nations Population Fund, NGOs, private companies and government
representatives from different countries, where a joint and international
effort was made to come up with solutions.
74
Media
Founded in 1950, Milliyet is still the undisputed champion for
“Reliability in the Press.” It is the first and only newspaper in Turkey
that was founded on international principles of publishing incorporating
high ethical standards.
M‹LL‹YET
Comprehensive Supplements
Field of Activity
In an ongoing quest to support its readers in all areas of their daily lives,
Milliyet is one of the four best-selling newspapers in Turkey, favored by
well-educated individuals and key opinion leaders from all fields.
Highlights
Milliyet has a full complement of thematic supplements including:
Milliyet Kariyerim (My Career) covers developments in the business
world affecting individuals, trends and issues in human resources and a
wealth of related information reaching readers every Sunday.
•
More than 50 years of market presence
•
The newspaper most often used as a reference and quoted by key
opinion leaders
•
At least one supplement for every weekday
•
One of the four best-selling newspapers in Turkey
•
Most visited online news portal in the country
Founded in 1950, Milliyet is still the undisputed champion for “Reliability
in the Press.” It is the first and only newspaper in Turkey that was founded
on international principles of publishing incorporating high ethical standards.
With its specialized contributors and well-respected columnists, it has
become a newspaper often referred to and quoted by key opinion leaders
in all fields.
Readers have come to trust that Milliyet has a strong sense of social
responsibility about everything it does, not only in terms of journalism but
also in its promotional campaigns. Milliyet adheres strictly to its journalistic
principles and high ethical standards.
Milliyet Emlak (Real Estate) publishes trends in regional real estate
markets, surveys of residential development throughout Turkey, garden
design and décor topics, global home and lifestyle features that combine
with detailed reports on real estate prices, credit terms and investment
advice are all part of the package for readers on Saturdays.
Milliyet Otomobil (Auto) features “Everything you ever wanted to know
about automobiles.” The latest models, performance reviews, motor sports,
driving techniques, automotive technology, on and off-road travel features
and now the world of motorcycles are part of this indispensable supplement
for car aficionados and is published every month.
Milliyet Televizyon (TV Guide) offers the most comprehensive TV content
available in the Turkish media and includes background stories for
television series, movie reviews and rating charts and comprehensive
details of upcoming sports, documentaries and entertainment programs;
it is published every Saturday.
Super Taktik (Sports) offers the most detailed analysis of football games
in the “Iddaa” betting game. Also covering world sports news and alternative
sports, it is published twice a week on Tuesdays and Fridays.
OKS Pozitif and OSS Pozitif (Education) are two study guides for
secondary school and university students and are among the most popular
study tools for students. OKS Pozitif is published on Wednesdays and
OSS Pozitif is published on Thursdays.
75
Arabam.com (literally, MyCar.com) keeps Milliyet’s finger on the pulse
of second-hand automobile information in this supplement. With 5,000
photos among the ads for used cars, this is the reference source of choice
for potential purchasers of previously owned cars. This weekly magazine
is published every Tuesday.
Milliyet Cumartesi - Pazar (Weekend) has subjects ranging from fashion
and personal care to new and interesting destinations, developments in
global literature and fine arts, editorials by respected writers, current
events and interviews, success stories, news items from the magazine
Milliyet was a pioneer of online journalism and among the very first to launch
world, entertaining crosswords and puzzles are all part of the weekend
Socially Responsible Campaign: Daddy Send Me to School
entertainment of this supplement.
In support of the social mission at the heart of Milliyet’s editorial philosophy,
Salsa targets youthful audiences as it covers diverse subjects from
the “Daddy Send Me to School” campaign debuted on the April 23, 2005,
magazines to shopping, fashion to love, the latest news about local and
the annual Children’s Day in Turkey. This broad effort in social responsibility
foreign stars, interviews, song lyrics, puzzles, posters and message boxes.
aims to open the door to education to girls who have been deprived of
It is published weekly on Wednesdays.
education in Turkey. The short-term of goals of the campaign were
In 2005, Milliyet’s average daily circulation was 261,602 with a market
share of 5.29% and income from sales reached YTL 26,099,143.
Leading Online News Portal
its own website (www.milliyet.com.tr), which today enjoys a daily average
of 550,000 visitors making it Turkey’s most visited Internet news site.
determined to be construction of 17 dormitories in 15 cities, provision of
Miço is filled with stories, cartoons, puzzles and riddles that are sure to
please children. It turns learning into entertainment. It is as popular with
parents and teachers as it is with children and is published on Fridays.
scholarships for 6.750 girls and to fill the need for classroom space in 13
cities. In 2005, Milliyet took on the construction of 19 dormitories, provided
approximately 3,700 girls with scholarships and the construction of
Milliyet Sanat (Milliyet Arts) has been closely followed by people within
classrooms in two cities. One of the the most positive aspects of the
the arts community since its establishment in 1972. This monthly magazine
campaign was the great number of individual donators that got involved.
on culture and the arts is in a league of its own as Turkey’s best known
Approximately 50,000 individuals made donations. This effort has ambitious
cultural publication. It continues to enjoy the loyalty and respect of its
goals: to make education fully accessible to all girls and young women
readers after more than three decades.
in Turkey.
Milliyet’s main objective is to retain the trust of readers as Turkey’s most
reliable daily source of news and culture and to maintain its high credibility
in the eyes of its readership with its high quality standards.
76
Media
Founded in 1996, Radikal, as its name suggests, brought new ideas
and concepts to the Turkish newspaper world. Along with extensive
coverage of the economy, foreign affairs and politics, business, culture
and the arts, the newspaper also features articles by some of the
country’s most respected academics.
RAD‹KAL
POSTA
Field of Activity
Field of Activity
Radikal is a niche market newspaper targeting well-educated urban
The best-selling newspaper of its kind in Turkey, Posta is a mass market
readers with a current and intellectual editorial slant.
newspaper appealing to both urban and rural readers, men and women.
Highlights
It has an easy-to-read style and is priced competitively to make it the
choice of many readers.
•
Fills a niche for innovative, independent and intellectual editorial
commentary for urban readers
Highlights
•
A market share of 1.8% in total newspaper sales
•
Most loyal readership
•
An advertising share of 2% in total print media
•
High circulation
•
One of the most visited newspaper internet portals
•
Broad readership
•
Easy to read
•
Low price
Founded in 1996, Radikal, as its name suggests, brought new ideas and
concepts to the Turkish newspaper world. Along with extensive coverage
of the economy, foreign affairs and politics, business, culture and the
arts, the newspaper also features articles by some of the country’s most
In the past ten years, Posta has gained its own loyal readership and has
respected academics. Radikal closely follows current global news and
become the highest selling newspaper in the country. The newspaper
includes important editorials from around the world.
emphasizes the human dimension and uses a positive approach in its
Radikal’s readers are young, well-educated, middle-to-high-income earners.
reporting. Posta addresses Turkey’s urban and rural population and
The newspaper’s primary objectives are to increase its market share of
appeals equally to both men and women. Its readership consists of middle
total newspaper sales and help foster a more intellectual climate in Turkey.
to upper income wage earners. Posta is positioned to become one of the
best performing newspapers in the country in coming years, and plans
to continue to increase its advertising market share.
In 2005, Radikal’s average daily circulation was 39,733 and income from
sales reached YTL 4,917,821.
In 2005, Posta’s average daily circulation was 641,420 with a market
Online Presence
share of 12.85% and income from sales reached YTL 47,375,651.
Radikal Online (www.radikal.com.tr) was launched in 1997 to reach a
Contunuing its consistent rise in the last few years, Posta is the sector
broader audience. Today, Radikal’s website is one of the most frequently
leader with the highest circulation and reach.
visited newspaper sites in the country. The newspaper’s other portal,
Sanal Alem, allows the user to keep in touch with the latest developments
in information technology.
77
FANAT‹K
GÖZCÜ
Field of Activity
Field of Activity
Fanatik is a pioneering sports-only newspaper with an emphasis on football
Gözcü is one of Turkey’s highly successful mass-market newspapers
(soccer).
concentrating on brief news and human-interest articles at an affordable
Highlights
•
The first daily sports newspaper in the country
•
Loyal readership
•
Pioneering in high standards in sports media
•
Presence on the web
price.
Highlights
•
One of the country’s most successful mass-market newspapers
•
Provides news briefs and human-interest features at a fairly low price
Providing easy-to-read news and human-interest articles at an affordable
price, Gözcü is one of the country’s most successful mass-market
Founded in 1995, Fanatik was the first daily sports newspaper in the
newspapers. Following its launch in 1996, Gözcü has continued to provide
country. It was not long after its debut that Fanatik gained a staunchly
accurate news from a popular perspective, sharing in the joys and sorrows
loyal readership among young males. The newspaper is also widely read
of its readers.
by Turkish expatriates.
Gözcü targets a lower socio-economic segment in an effort to raise
Fanatik brought high standards to the sports media. It is the only newspaper
awareness of current events within the general public. Parallel to this
that has earned an international fair play award with its “Fan-etik” (Fan-
objective, Gözcü does not deviate from its fully secular and objective
ethics) page.
perspective. It seeks to ensure that the most important news stories of
Fanatik provides its readers with quality sports news with a focus on
the day are brought to readers objectively and in a straightforward manner.
Turkey’s four major football (soccer) teams. The newspaper also appeals
REFERANS
to the horse racing community with a daily four-page supplement. Online
readers can reach Fanatik via its website at www.fanatik.com.tr.
In 2005, Fanatik’s average daily circulation was 259,499 with a market
share of 5.26% and income from sales reached YTL 20,216,834. Fanatik
ranks as the fifth most read newspaper of the country.
FANAT‹K BASKET
Referans is one of Turkey’s top two daily economic and finance newspapers.
Highlights
•
Successor to Finansal Forum
•
Strong editorial leadership, nine years of experience in finance reporting
History
Launched on May 31, 2004 by Do¤an Media Group, Turkey’s daily
Launched in 1996, Fanatik Basket is a weekly newspaper highlighting
business newspaper Referans has introduced modern, easy-to-read and
Turkish and foreign professional and amateur basketball teams. While
functional business journalism into the Turkish newspaper market.
satisfying the requirements for comprehensive coverage of basketball
news, Fanatik is also distinguished by its superior visual design and the
quality of its photography. While providing comprehensive coverage of
basketball news, Fanatik is also distinguished by its superior visual design
and the high quality of its photography.
Targeting open-minded, sophisticated young business men and women
in rapidly changing Turkey, Referans covers every story relevant to the
business world using a down-to-earth and clear-minded approach. Readers
can reach Referans via its website at www.referansgazetesi.com.
78
Media
The Turkish Daily News covers major political, economic, social and
cultural events while providing its readers with an extensive mix of
local and international news. Its exclusive stories, interviews and
analyses on foreign policy issues have earned it the reputation as the
world’s window into Turkey.
Referans is considered to be the successor to Finansal Forum, which was
The Turkish Daily News is the leading source of local news for foreign
founded in 1996.
nationals living in Turkey. According to market studies, 80% of its highly
One of two economic and financial dailies in Turkey, Referans enables
its readers to monitor global events and developments in Turkish, which
accounts for the newspaper’s success.
Target Audience
With its high quality daily reporting, Referans targets professionals, business
executives, upper level officers and academics - in essence today’s
decision makers.
TURKISH DAILY NEWS
educated Turkish readers are university graduates.
Rich Content
The Turkish Daily News has undergone a renewal process in order to
present its readers with a more active and dynamic newspaper. The
paper’s liberal approach has earned international praise and respect.
Meanwhile it has become the natural choice for local and international
news for foreign residents, as well as for highly educated Turks.
The Turkish Daily News covers major political, economic, social and cultural
events while providing its readers with an extensive mix of local and
Field of Activity
international news. Its exclusive stories, interviews and analyses on foreign
The Turkish Daily News is one of Turkey’s two English language daily
policy issues have earned it the reputation as the world’s window into Turkey.
newspapers.
Opinion columns from business leaders, academics, politicians and other
Highlights
high-level officials help to round out the paper’s already rich content. Its
sports section has won much praise from leading sports writers of other
•
Serves the expatriate community
•
60% of its readers are foreign nationals and 40% are highly educated
major Turkish language dailies. In 2005, TDN underwent a strategic
refocusing centering around the philosophy “Gateway to Turkey on the
Turkish citizens
way to Europe.”
•
Web Presence
Rich content in political, economic, social and cultural events
The Turkish Daily News has served as Turkey’s only English language
daily since March 1960. Turkish Daily News joined the DYH family in
January 2000.
Launched on May 19, 1996 in Washington as www.TurkishDailyNews.com,
the site has been completely revamped to reach a wider audience and is
now based in Ankara, operating at www.TurkishDailyNews.com.tr. It
currently receives over 450,000 hits a day, with registered readers numbering
more than 40,000. Work is under way to develop the site further.
79
BROADCASTING AND PRODUCTION
Television
Television is the primary source of entertainment for most Turkish families.
In 2004, TV viewing reached an all-time high at an average of 223 minutes
a day, about four hours daily. Research shows that 97% of Turkish citizens
consider television their main source for news.
This is the result of the television revolution that began in Turkey at the
beginning of the 1990s, when the state monopoly over radio, television
and broadcasting rights was lifted and the era of private broadcasting
began. In just a few years, 70 million Turkish viewers were able to choose
from 13 national, 235 regional and local private channels, in addition to
increased from 27% to 37% just at the outset. This new development has
sparked several reorganization projects at Do¤an TV.
Taking an important step forward in general entertainment and culture
programs with Star TV, DYH’s goal is to provide a full range of products
in the area of thematic broadcasting. DYH will continue to add variety to
its thematic channels in accordance with viewer preferences and needs.
News channels CNN TÜRK, established in October 1999 as a DYH-Time
Warner joint venture; Dream TV, established in 2004 as a 24-hour music
channel; Dream Türk TV; the sports channels BJK TV and Fenerbahçe
TV; and an interactive service of DTV the Fix TV are some examples in
this category.
the five state-owned channels. Today, at the end of ten years of progress,
CNN TÜRK has a proven track record as a national news channel since
44 cable networks in 20 big cities offer 66 channels, while on the satellite
its launch.
platform, close to 100 channels are available.
Undergoing a format revamping in 2005, music channel Dream TV is
With the April 1994 formation of the Radio and Television Higher Board
very popular with younger viewers. This is particularly significant in a
(RTÜK), minimum requirements and financial and technical standards
country like Turkey where 50% of the population is under the age of 25.
were defined for broadcasting and new regulations on time and content
Euro D and Euro Star, Turkish-language channels which broadcast in
limitations were introduced.
Europe via satellite and cable, continue to attract Turks living in Europe,
In addition to our flagship Kanal D, which has been a member of the DYH
particularly in Germany with its large Turkish population.
family since 1995, ATV, Show TV and Star TV are the country’s most
DYH has entered the TV production business by acquiring the majority
popular channels. Together they entertain and inform 60% of all TV
shares of a small production company called ANS. Its new name,
viewers every night and enjoy a 72% share of the advertising revenue.
D Productions, is a small but growing enterprise that not only produces
The most important development in 2005 in this area was the union of
programs for DYH’s own channels, but also engages in program production
Star TV with the DYH family. With Star TV, DYH’s market share in TV ads
for other channels as well. After Star TV joined the DYH family, D Productions
has steadily expanded its activities.
80
Media
Kanal D reflects Turkey’s vision with its contemporary, innovative and
creative approach to TV broadcasting. This exemplary performance
has not only earned Kanal D the most preferred TV channel status,
but has also moved Kanal D forward in the international arena.
Radio
In addition to Turkey’s 365 national radio channels, there are hundreds
of local and regional radio stations that continue to broadcast. A study
has shown that 63% of the Turkish population listens to the radio and
this rate is steadily increasing. Approximately 46% of Turkish listeners
prefer Turkish pop music.
- are now carried out over the Internet. As products, services and lifestyles
become more and more digitalized, the ways and means of offering
services will also become enhanced, as consumers embrace them. In the
near future, we will see how four main content areas will reach homes
and businesses over broadband Internet. These are the world-wide-web
(www), telephone transmission (VoIP), television broadcasting (IP TV) and
multimedia content such as games and music (IP Multimedia).
Taking into consideration the preferences of Turkish listeners, DYH
reorganized its radio networks in 2005.
With such a structural change, the content created and provided by DYH
will have an even greater significance. DYH’s broad experience and know-
DYH radio channels also organize or sponsor various arts festivals and
how in meeting the content requirements of the consumer will allow it to
relief efforts to contribute to Turkey’s social and cultural life.
maintain its leadership in this area.
Production
With the portal strategy that DYH has primarily focused on in the digitalization
DYH has entered the TV production business by acquiring the majority
process of recent years, several leading portals have been created in
shares of a small production company called ANS. Its new name, D
different segments, positioning DYH as a leader in terms of Internet
Productions, is a small but growing enterprise that not only produces
advertising revenues. With Turkey’s Internet users now estimated to be
programs for DYH’s own channels, but also engages in program production
about 7 million, lower prices and access to broadband services are
for other channels as well. After Star TV joined the DYH family, D Productions
expected to bring this figure up to more than 16 million by 2010. Today,
has steadily expanded its activities.
time spent using the Internet is considerably high compared to other
media, particularly among the younger population. A TGI Media Neutral
Digital World
Ever since 1995, when the use of the Internet became more widespread,
many products, services and lifestyles have undergone digitalization, and
have become part of this medium. Rapid digitalization continues apace
everywhere, including Turkey, which has experienced its share of the
digitalizing process. A wide variety of activities - commerce, advertising,
news broadcasting, matchmaking, telephony, video, music, messaging
Quintiles study has shown that the 18-34 age group of the urban population
spends between 40-90% more time on the Internet compared to TV.
DYH continues to be a leader in e-commerce and news portals. It is also
investing in devising new portal strategies for currently developing areas
in music, mobile technologies, blogs, social networks and matchmaking.
81
TV CHANNELS
KANAL D
Field of Activity
Kanal D is among Turkey’s top-rated TV channels for all day viewing,
commanding a 23% share of all TV advertising income for Turkey in 2005.
Highlights
•
Turkey’s top channel for all-day viewing
•
The leader in TV advertising, capturing 23% of total television ad
revenues
•
Received the “Diamond Quality Crown” award in 2005
•
The first TV channel in Turkey to broadcast live over its website
•
First TV channel to establish a viewer call center
Market Position
Kanal D reflects Turkey’s vision with its contemporary, innovative and
creative approach to TV broadcasting. This exemplary performance has
not only earned Kanal D the most preferred TV channel status, but has
also moved Kanal D forward in the international arena.
On weekends and holidays, Kanal D presents family entertainment featuring
Kanal D aims at a wide range of viewers. Thanks to its high-quality and
popular foreign TV series, Turkish and foreign movies, sports and musical
well-designed program portfolio consisting of new programs, domestic
programs. Extensive sports coverage and popular entertainment
series, TV premieres of Turkish and foreign movies, quiz shows,
programming also puts Kanal D in the lead.
entertainment and children’s shows, Kanal D has continued to be one of
the most popular TV channels in Turkey. This success also reflects the
Pioneering Call Center Established
growing financial strength of the station. Kanal D is the leader in TV
In 2005, Kanal D established the Alo D call center. It was set up to provide
advertising. In 2005, it alone held a 23% share of the TV advertising
interactive communication with viewers. At Alo D, all sorts of suggestions,
market. With an audience share of 1.15, it is the general-interest channel
complaints, requests for information and messages expressing satisfaction
having the greatest advertising might and has still greater potential.
are recorded and entered into an online database. The expectations and
Kanal D’s success is reflected in its financial health as well. A leader in
TV advertising, in 2005 Kanal D captured 23% of Turkey’s total television
ad revenues.
Wide Coverage in Broadcasting
preferences of viewers play a major role in the decisions made by Kanal
D management. The Alo D call center is the first call center to be established
by a TV station.
International Recognition
Kanal D received the Hot Bird Award in 2000. It was chosen from among
150 stations broadcasting over Eutelsat. On the basis of the quality and
Kanal D’s daytime programming is designed for homemakers and children,
content of its broadcasts, it was chosen the most successful station
offering them a variety of Turkish films, soap operas, cartoons and live
together with BBC Prime. In May 2003 it received the Business Initiative
music performances. Foreign films complement news programs and
Directions (BID) Award in Geneva for the success of its QC 100 Total
locally produced television series. Its emphasis on locally produced
Quality management model. Kanal D confirmed its success in the
programs has created high viewer ratings and a loyal audience.
international arena when it received the “World Quality Commitment
Prime time news bulletins and extended news programs, investigative
reporting and “Meet the Press” type panel discussions, along with game
shows like “Vault” and “Pop Idol” have further increased Kanal D’s strong
position.
International Star” in 2004 and the “Diamond Quality Crown” in 2005.
Emphasis on Technology
With its website at www.kanald.com.tr, Kanal D is the first TV station in
Turkey to broadcast live over the Internet. Kanal D’s website is visited by
The quality and reputation of its news anchors and commentators set
an exclusive group of members who has joined the site’s registered
Kanal D’s nightly news apart from the competition. Kanal D draws from
community system that has been under development and refinement for
its own news team as well as from the resources of Do¤an News Agency
years. The website is also the first in Turkey where teletext services are
(Do¤an Haber Ajans›-DHA) for comprehensive and analytical reporting.
available.
82
Media
Presented as a model by its partners when discussing new business
ventures, CNN TÜRK has developed and grown despite national and
global crises. Proving its success in television news broadcasting in
celebration of its sixth year of operation, CNN TÜRK continues to
move forward achieving new innovations.
STAR TV
Field of Activity
world’s most famous football (soccer) stars via live broadcasts. It has also
won over sports lovers through its in-depth and comprehensive sports
programs on Turkish football, following the latest developments with expert
Star TV began broadcasting on May 5, 1990 as the first ever private
and insightful analysis.
television channel in Turkey. This ground-breaking channel was acquired
by Do¤an Yay›n Holding in November 2005. As “a first” in private television
broadcasting in Turkey, Star TV was a pioneer in many aspects of the
sector, technologically and in terms of its programming. In addition to its
myriad technological innovations -such as launching the first uplink outlet,
multiplex broadcasting, digital broadcasting and the virtual studio- Star
In Turkey, Star TV now is the first channel which comes to the mind of
viewers with respect to top-notch television entertainment. It has succeeded
in standing apart from its competitors by regularly attracting a mass
audience with its colorful entertainment programs broadcast throughout
the entire week.
TV also introduced to Turkish viewers a new broadcasting concept: popular,
Star TV brings the most famous names of the entertainment world together
sincere, warm, entertaining and dynamic television programming.
for the pleasure of its viewers, on intimate talk shows, special event
programs, game and contestant driven programming in addition to musical
extravaganzas.
With 2005 turnover of over USD 59 million, Star TV further strengthens
DYH’s position as Turkey’s premiere media outlet.
Turkish language television series and foreign movies also make up a
significant part of Star TV’s programming. At night, foreign movie classics
Market Position
are broadcast, while popular movies of more recent years are shown
The quality and diversity of Star TV’s programming puts it among the top
during the day. National serials that have become de facto addictions for
four most watched national TV channels. This, combined with its technical
viewers with famous stars and captivating storylines are also watched by
prowess, makes it one of the pioneering institutions in the sector. Energized
large audiences on the channel.
by an organizational restructuring following its acquisition by DYH, Star
By taking into special consideration its women and children viewers, Star
TV now aims at further raising the quality level of its entertainment,
TV supplements its day time programming with talk shows focused on
educational and objective programming.
issues that concern women, cooking programs, entertainment and
News broadcasting, with the catch phrase “Star News for Turkey,” plays
“magazine” news shows and a wide variety of children’s cartoons.
an important role at Star TV. News programming is prepared by the
Pioneer in Technology
painstaking efforts of the youngest and most dynamic reporting team in
Turkey, and is presented to viewers in an honest, objective and
comprehensible fashion.
Another important programming category of Star TV is sports. The channel
brings the Turkish spectator many sports activities followed with keen
interest both in Turkey and worldwide. The riveting atmosphere of the
Champions League is shared with the viewing audience by presenting the
Star TV broke new ground in the world of broadcasting by introducing
uplink output, multiplex broadcasting, digital broadcasts and virtual studio.
Star TV prides itself on its program content and image quality. It is a leader
in the TV broadcast sector, reaching viewers through a fixed territorial
broadcast system, Turkish Telecom’s domestic first and second regional
cable networks, Turksat 2A satellite relay and the Internet.
83
Social Responsibility
Star TV, recognizing its responsibility as a widely viewed television channel
to contribute to the greater public good, has provided publicity support
for various special responsibility campaigns and has also supported culture
and the arts via its sponsorships of film festivals. Under DYH’s direction,
Star TV’s support for and active participation in socially responsibility
activities will continue and expand.
CNN TÜRK
Field of Activity
CNN TÜRK is a 24-hour news channel and Turkey’s first and only television
channel to have an international media partner.
Highlights
•
The only national CNN-branded local language 24-hour news channel
controlled and operated outside Atlanta
•
•
Turkey’s first and only television channel to have an international
media partner
Presented as a model by its partners when discussing new business
The leading news channel in Turkey, having just completed its sixth
ventures, CNN TÜRK has developed and grown despite national and
year of operations
global crises. Proving its success in television news broadcasting in
celebration of its sixth year of operation, CNN TÜRK continues to move
•
High technical outreach and reliability
•
A 4% share of the TV advertising market
•
Shares facilities with other DYH television channels, creating synergy
between similar operations
forward achieving new innovations. Its website cnnturk.com has completed
its first year and the CNN TÜRK News Package has enabled its subscribers
to get up-to-the-minute news via SMS. CNN TÜRK Radio continues
broadcasting from Istanbul on the FM frequency 92.5 and via live streaming
at the cnnturk.com website.
A long-standing goal of CNN TÜRK has been to reach Turkish-speaking
CNN TÜRK, established in 1999, is a joint venture between DYH and
audiences in the Central Asian Republics and in Europe through operators
Time Warner. It is the only national CNN-branded local language 24 hour
of cable networks. The United States has shown considerable interest in
news channel controlled and operated outside Atlanta. It is Turkey’s first
CNN TÜRK as well. CNN TÜRK’s investment along these lines in the
and only television channel to have an international media partner.
Netherlands is only the first step in the achievement of this goal.
Optimizing on both local resources from DYH and the extensive news
“Don’t follow the news; let the news follow you, wherever you may be.”
gathering ability of the world’s news leader CNN, CNN TÜRK has brought
This is the principle motivating the growth of CNN TÜRK television
a new dimension to national news programming. In addition to international
channels, CNN TÜRK Radio, CNN TÜRK News Package and cnnturk.com
news coverage, CNN TÜRK provides reliable, objective, credible, up-to-
within the CNN TÜRK News Group.
the-minute local news and information through programs produced by
experienced and well-trained Turkish professionals.
Content Rich News Programs and More
CNN TÜRK maintains its unparalleled reputation in covering breaking
CNN TÜRK has gained a worldwide reputation for its coverage of national
news 24 hours a day, seven days a week, through the resources of its
and global events. With a strong sense of social responsibility that prevails
new headquarters at Do¤an TV Center in Istanbul, its Ankara bureau, and
in its programming, CNN TÜRK also prepares special feature programs
with the support of reporters in Athens, Berlin, Brussels, Budapest, Paris,
in partnership with non-governmental organizations.
Rome, London, Nicosia, Teheran, Moscow, New York and Washington.
In addition to twice hourly news bulletins plus financial news and sports
New Markets, New Distribution Channels
programming, CNN TÜRK also caters to a variety of interests from fashion,
history, literature, arts and culture to the latest trends in technology, music
While reaching 40 million viewers in Turkey via cable and satellite that
and movies.
provides 24/7 continuous Turkish language broadcasting, in October
2004, CNN TÜRK began to broadcast in the Netherlands, its first venture
In 2005, CNN TÜRK signed a deal with Motor Sporlar› & Org. A.fi. and
outside Turkey. Now Turkey’s primary source of news is available to the
became the official broadcaster of international F1 races in Turkey for a
Turkish community in the Netherlands.
period of four years.
84
Media
CNN TÜRK, established in 1999, is a joint venture between DYH and
Time Warner. It is the only national CNN-branded local language 24
hour news channel controlled and operated outside Atlanta. It is
Turkey’s first and only television channel to have an international
media partner.
News Bulletins
Documentaries
CNN TÜRK’s flagship news bulletins are broadcast every half hour, around
Documentaries are one of the major strengths of CNN TÜRK. The Channel’s
the clock. Using state-of-the-art contemporary broadcasting technology,
documentaries cover a wide range of topics of current interest, national
CNN TÜRK offers in-depth and up-to-the-minute news coverage through
and international, from Iraq to Israel, Chechnya to Afghanistan, Syria to
the use of its extensive local news sources as well as its access to CNN’s
Korea. Documentaries are, for the most part, produced in-house or by
42 worldwide bureaus and more than 900 affiliates.
leading Turkish journalists with expertise in the documentary production
Financial News
Financial news is a key component of CNN TÜRK’s programming. The
field.
CNN TÜRK News Group
financial news content of CNN TÜRK includes coverage of local and
CNN TÜRK Radio, broadcasting from Istanbul on FM 92.5 and live-
international business, financial markets and daily economic developments
streaming on cnnturk.com provides audiences with 24-hour news coverage
from an objective global perspective.
that is credible, objective, reliable, impartial and up-to-the-minute.
Sports News
CNN TÜRK News Package has started provision of the latest news reaching
Hourly sports news broadcasts feature the latest news highlights, events
and scores from both the local and international sports arenas.
Weather Reports
subscribers through their mobile phone via SMS.
A site for all Turkish speakers, cnnturk.com provides news on a range of
subjects including, politics, finance, sports, fashion, technology and the
arts with feature folders and up-to-the-minute coverage of breaking news.
As an essential part of CNN TÜRK broadcasting, weather reports provide
CNN TÜRK Radio is now available via the cnnturk.com webpage.
both national and international forecasts. All day long a network of local
and international weather forecasting stations are the source for weather
reports that are broadcast using state-of-the-art three-dimensional animation.
Programs
As a result of the quality, high technical outreach and reliability it has
maintained in the fifth year of its operations, CNN TÜRK attracts the most
important national and international advertisers. Despite global and
CNN TÜRK has feature programs that complement its news content. Talk
domestic crises like the ‹zmit earthquake and successive economic crises
shows and panel discussions as well as thematic programs are hosted by
in Turkey, the September 11th terrorist attacks and the war in Iraq, CNN
nationally respected experts on issues of importance to Turkey and the
TÜRK was able to keep moving forward. Today, CNN TÜRK holds a 4%
global community. An array of informative programs offers viewers news
share of the TV advertising market; sponsorships and advertising are its
and background information on a variety of subjects - from fashion to
primary sources of revenue.
technology.
In 2003, CNN TÜRK moved its studios and offices to a new state-of-theart television center where facilities are shared with other DYH television
channels, creating a synergy between similar operations to further improve
its efficiency and financial strength.
85
CABLE TV CHANNELS
RADIO STATIONS
FENERBAHÇE TV
RADYO D
The Fenerbahçe Sports Club has leased Fenerbahçe TV from DYH, with
The Turkish music channel, Radio D, which operates according to global
technical support provided by the DYH broadcast network. Fenerbahçe
standards with its wholly digital broadcasting system, is one of the radio
TV broadcasts via the national cable network and the Türksat 2A satellite,
stations that broadcasts nationally in Turkey. Radio D, with its highly
and will go digital in the near future.
appealing pop music programs, entertainment programs and news
BEfi‹KTAfi TV
bulletins, broadcasts from 29 centers all around Turkey. Because of its
wide ranging broadcasting network and huge number of listeners, Radio
Newly founded by the Befliktafl Sports Club, the channel is leased from
D gets 4% of the sector’s advertising revenues.
DYH with technical support provided by the DYH broadcast network.
Befliktafl TV broadcasts via the digital platform and Türksat 2A satellite,
and is expected to move to national cable distribution in the near future.
Radio D, which is a de facto school with all the programmers it has trained,
accepts job applicants and interns from the faculties of academic
communications programs across the country.
DREAM TV
In keeping with its mission to be socially responsible, Radyo D supports
Dream TV was founded as part of Do¤an Yay›n Holding on March 15,
the Ministry of Education in its book campaigns, the TEMA Foundation
2003. Its objective is to represent the best of Turkish and foreign music,
with its plant-a-tree campaigns as well as numerous other social and
entertainment, technology and popular culture in the country.
charitable events organized by aid organizations.
The TV channel has achieved huge success as a broadcaster of foreign
SLOW TÜRK
music, a much-needed service in Turkey. Dream TV has proven this
through both the quality of its programs and the awards it has received
during its three years of operation.
Slow Türk, which started its broadcasting life on November 7, 2005 and
is the latest addition to the radio group, currently broadcasts only in
Istanbul and Ankara on FM 95.3. It will widen its reach over Turkey in
Dream TV has obtained the broadcast rights of many international award
the immediate future.
ceremonies and festivals, and has developed its broadcast policy
accordingly. In 2006, two of the most prestigious music awards, the
Grammy and Brit Awards, were broadcast exclusively by Dream TV, thus
enabling them to be seen in Turkey simultaneously with the rest of the
world. Dream TV is planning on continuing to bring its viewers the largest
live, open-air festivals in Turkey, record-breaking American comedy shows,
and various Turkish-produced parodies.
DREAM TÜRK TV
Dream Türk TV offers viewers the best music videos, live performances
and exclusive images of Turkish musicians and bands, in addition to the
latest news from the world of Turkish music. Dream Türk TV reaches the
majority of Turkish music listeners thanks to its commitment to high
With 24 hours of radio programming, which is composed of the most
beautiful love songs, Slow Türk is sure to become one of the most listened
to and preferred radio stations.
CNN TÜRK RADIO
CNN TÜRK Radio is the sole news radio station of the group, which was
founded by partnership of the Do¤an Media Group and Time Warner.
It holds a place as the auditory broadcasting enterprise of CNN TÜRK.
CNN TÜRK Radio, which is on air at FM 92.3 in Istanbul, broadcasts not
only shared programming with its TV counterpart but also broadcasts its
own special programs and the most distinguished examples of world
music.
standards in music programming.
CNN TÜRK Radio presents its listeners with a wide array of programming
FIX TV
that includes up-to-the-minute news reporting, special feature programs
DTV Interactive Services provides the interactive content of Kanal T-Fix
with Turkey’s most experienced journalists, expert guests commenting
TV, a Cyprus registered satellite TV channel. The Channel offers a genuine
on news developments, weather and traffic reports, along with coverage
Call TV format with logo and melody services, astrology programs and
of fashion, culture and the arts, technology, health, music and cinema.
quiz shows.
86
Media
In the past 12 years, D Productions has produced over 5,500 hours
of miscellaneous content, a level that no other production company
in Turkey has even approached. In the same period, it produced more
than 1,800 commercials and 100 large-budget films.
PRODUCTION
D PRODUCTIONS
The vision of D Productions is to reach a larger audience through the
creation of original content. D Productions’ mission is to maintain its
Field of Activity
leadership and pioneering position and create content that will give it a
D Productions is a provider of visual content and video projects. It has
definitive competitive edge in both domestic and global markets.
recently entered into movie production and plans to expand through
To achieve these goals, D Productions plans to:
international collaborations.
Highlights
•
Name change from ANS International to D Productions in 2005
•
Experience and competence in developing new concepts
•
Adaptability and flexibility
•
Ability to create advantages and cost savings by utilizing resources
that maximize performance
•
Increase creativity
•
Deliver to a larger audience via different distribution channels
•
Produce Turkish movies for global markets
•
Play a leading role in film distribution directed toward domestic and
global markets
•
Penetrate global markets by forming joint partnerships for film and
series productions with Russian, Greek and other European firms.
•
Dynamism and superb IT infrastructure
Market Position
•
A competent staff with a full range of state-of-the-art equipment
D Productions is a market leader in almost all its segments which include
•
Synergy created with DYH
•
Strong financial and PR support from DYH
•
Launched video label in 2005
TV programs, drama, entertainment shows, commercials, films and music
clips as well as film trading and post-production activities. In the past 12
years, D Productions has produced over 5,500 hours of miscellaneous
content, a level that no other production company in Turkey has even
approached. In the same period, it produced more than 1,800 commercials
and 100 large-budget films.
ANS International, incorporated in 1992 and setting a precedent in
D Productions intends to strengthen its position in the commercial
numerous fields in the history of Turkish television has left its mark upon
production market and become one of the leading players with regard to
the constantly expanding market with its quality and expertise. ANS
supplying and distributing foreign films over the next three years.
introduced global standards to Turkey with its production of popular TV
In the second half of 2004, alongside the successful commercials it
serials, movies and provocative commercials and music videos. During
produces within the DYH Group, D Productions began to extend its
its sixth year of existence, in July 1998, ANS assigned 70% of its stocks
advertising services beyond the Company and successfully completed its
to Do¤an Yay›n Holding and made a huge step on its way to formal
first project with a commercial for Boyner Holding. Its goal for 2006 is to
institutionalization. By September 2005, all of its stock was acquired by
significantly increase the proportion of work produced for customers
Do¤an Yay›n Holding and ANS changed its name to D Productions.
outside the DYH Group.
87
The Company also plans to lead in film production in terms of the number
It is also responsible for the operation, maintenance and planning of new
of films produced, sales revenue and the number of viewers. To co-
investments for these channels. All production requirements starting with
produce a number of films each year in association with foreign producers
filming, editing and the on-air process of these channels are prepared,
is also in the offing and venturing into merchandising, sponsorships and
controlled and coordinated by Galaxyteknik.
products.
Distributing both in-house and third party productions, D Productions
currently licenses or represents materials from the likes of New Line, Lions
Gate Films, Lakeshore Entertainment, Studio Canal, GreeneStreet Films,
Mandate Pictures, TF1, UGC, Content and Myriad Pictures.
Services Offered
Galaxyteknik offers a wide range of broadcast services, from breaking
news stories to an entire TV production, and supports its production needs
with a continuously developing technical infrastructure. Its main
responsibilities include operating the uplink and transmitter network,
Regularly releasing one film per month, D Productions will launchits video
satellite and broadcasting coordination and providing the necessary live
label in December 2005. D Productions will offer home cinema audiences
or recorded broadcasts from around the globe to its chain of television
DVDs and VCDs of a diverse range of films such as children’s interest,
stations.
romance, thriller, action and drama under the “Kanal D Home Video”
label. D Productions is sure to offer quality and diversity to the home video
sector with Kanal D Home Video.
Galaxyteknik operates and maintains the external broadcast units, a fleet
of 11 mobile satellite units and nine studios ranging between 100 and
1,250 square meters. Based on the strength of these mobile satellite units
Embarking on its odyssey with a creative and dynamic vision, an
and supported by the latest technology and the expertise of its professional
infrastructure of the highest technical standards and an innovative and
staff, Galaxyteknik has been consistently preferred by international
forward-thinking staff, D Productions is raising the bar and the quality of
broadcasters.
Turkish television viewing.
GALAXYTEKNIK
Field of Activity
Following its UEFA Champions League and Formula 1 broadcasting
services, the Company plans to continue offering top quality broadcasts
and will serve all of the Group’s television and radio stations along with
the domestic market and international broadcasters.
Galaxyteknik is a member of the Do¤an Holding Group and provides the
technical infrastructure, broadcast services and staff for all of the Group’s
channels such as Kanal D, CNN TÜRK, Euro D, Dream TV, DHA, Star TV
and radio stations that operate under the umbrella of the Do¤an Group.
88
Media
Do¤an Music Company currently carries out activities in the field of
purchasing copyrights for music and intellectual proprietary rights of
their owners. The Company works with leading artists and musical
groups from the Turkish music market who have a very large and loyal
following in Turkey.
DO⁄AN MUSIC COMPANY
Field of Activity
Between October 2001 and December 2004, DMC successfully represented
Bertelsmann Music International Service GmbH (BMG) in Turkey. BMG
is a subsidiary of Bertelsmann AG, one of the largest media companies
Do¤an Music Company is a music production and distribution company,
in the world, the owner of more than 200 music companies in more than
bringing together the media, entertainment, communications and IT
50 countries. It distributes pop, rock, dance, alternative, hip-hop, jazz,
industries. It has a licensing agreement with Universal Music Group, the
classic, country and new age albums that have been released worldwide
global music market leader.
by BMG. DMC has also released albums of various international artists
Highlights
in Turkey.
•
Vocal advocate for intellectual property rights
In February 2005, DMC signed an agreement with Universal Music Group
•
Licensing agreement with Universal Music Group (UMG)
•
Leading names in Turkish music on contract
•
A strong promotional platform for international artists in Turkey
•
Support of UMG in the international music industry
Universal Motown Records Group, Universal Classics Group (Decca,
•
Dedicated to create new brands and scouting new talents
Deutsche Grammophon, Philips and ECM), Universal Music Latino,
(UMG), the global music market leader with a share of 24.7%. With
activities in more than 77 countries, Universal Music gets its power and
immeasurable value from various rooted labels within its organization that
includes Barclay, Interscope Geffen A&M, Geffen Records, Island Def
Jam Music Group, Machete Music, Mercury Records, Polydor Records,
Universal Music Group Nashville (Lost Highway, MCA Nashville and
History
Do¤an Music Company (DMC) was established in 2000 to follow the global
Mercury Nashville) and Verve Music Group.
Poised to Create Additional Synergy
trend toward the convergence and unification of media, entertainment,
communications and information technologies.
Featuring DMC performers, DMC seeks to create additional synergy with
production and broadcasting companies within DYH as well as Internet
DMC currently carries out activities in the field of purchasing copyrights
for music and intellectual proprietary rights of their owners. The Company
portals. Both DMC and UMG are dedicated to creating new brands and
discovering new talent.
works with leading artists and musical groups from the Turkish music
market who have a very large and loyal following in Turkey.
For three consecutive years, from 2003-2005, DMC has been the leader
DMC is preparing to undertake some major international projects in the
in the Turkish music industry. It has recorded numerous productions with
near future to position itself alongside leading European music and
the help of its talented staff in its own fully equipped studio.
entertainment companies until 2008. Offering its stock to the public
through an IPO will also be one of DMC’s primary objectives in this period.
Historic Cooperation with Bertelsmann Music, and now Universal Music
Group
89
DIGITAL MEDIA
Highlights
DYH prioritizes investments in business areas that create synergy with
•
Strong brand recognition
existing activities and focus on the customer. These areas include the
•
Rich content and variety of sub-brands
Internet and cable television service provision.
•
Powerful distribution network
The demographics of Turkey are such that more than 50% of the population
•
Stable pricing policy
is under the age of 25, and thus potential ISP target users. Therefore it
•
Part of Turkey’s largest media group
•
Effective customer support and after-sales services
•
25% of the ISP subscription market
•
Unique products and services:
•
Turkey’s first personalized browser
•
Twice as fast Internet access
was not surprising to see that many large Turkish corporations expanded
into the ISP market in 1999 and 2000. They continue to constitute the
majority of the nearly 45 ISPs currently operating in the country.
While media players have immediately established portals, large corporations
plan to be active in e-commerce and ISP markets. DYH saw the Internet
as an alternative media opportunity and established Do¤an Online (DOL)
in 1999.
DO⁄AN ONLINE
Field of Activity
Do¤an Online is one of Turkey’s foremost Internet service providers with
extensive operations in e-business solutions, digital content and
telecommunication services for both individuals and corporate customers.
Since its inception in 1999, Do¤an Online has contributed significantly
to Turkey’s rapid transition to the Internet age by following the latest global
History
Established in 1999, Do¤an ‹letiflim Telekomünikasyon Elektronik Servis
Hizmetleri Turizm ve Yay›nc›l›k A.fi. (Do¤an Online) is currently one of
Turkey’s two leading ISPs providing digital content, e-business solutions
and telecommunication services to both individuals and corporate
customers. The Company delivers its services with the latest cutting-edge
technology and at the highest global quality standards.
technological developments and introducing the most recent applications
Do¤an Online aims to be Turkey’s leading Internet access, content provider
to Turkish Internet users. In this respect, the Company is continuing to
and e-business company.
provide an excellent Internet access infrastructure as well as value-added
Its mission is to provide value-added digital products and services to
content services. Do¤an Online is Turkey’s largest Internet service provider.
individuals to make their lives easier and richer.
Do¤an Online serves a large clientele with Internet access, e-trade, content
To achieve its vision and mission, Do¤an Online plans to help raise Internet
provision and advertising services. The Company plans to diversify into
usage and to provide Internet users with easy, functional and value-added
media-related and entertainment services, also becoming a key player in
products.
these sectors.
Simultaneously, the Company aims further expansion in markets where
it is already the leader and maintains its position while increasing its
market share.
90
Media
With the experience gained as an Internet service provider to corporate
and individual customers, DOL has become Turkey’s leading provider
of online services and content. It has transferred this expertise to
sound and data communication services in the field of
telecommunications through Do¤an Telekom.
Market Position
DOL has more than 150,000 individual subscribers and controls 25% of
the dial-up market. More than 5.5 million people visit the Company’s
websites with over 680 million pages viewed each month. Although Internet
usage and PC ownership in Turkey did not increase as rapidly as forecast,
2005 nevertheless has been a successful year for DOL. The increase in
new subscribers was 50% higher than the previous year, while the number
of visitors rose by 135% and the number of hits increased by more than
250%.
Already an industry leader in ISP services and content, in 2004 DOL
launched a first for Turkey: the “e-kolay.net Security Package.” OGO,
instant messaging, e-mail and SMS services provided via DOL access and
content infrastructure, was introduced to the Turkish market in July 2005,
thereby becoming only the second country to use OGO, after the USA.
OGO, a highly economical and practical device for communications
regardless of time and place, has been providing SMS, news, games and
MSN Hotmail support in Turkish as of November 2005. During the CebIT
2005 Eurasia Fair, e-kolay.net unveiled other functional and easy-to-use
devices that will be offered to the market within the year.
Combined with e-commerce and advertising sales revenue, DOL’s corporate
ISP services and corporate portal solutions have made a significant
contribution to the Company’s overall profitability.
Utilizing the e-kolay.net Corporate Services brand, DOL creates platforms
for companies to transfer their businesses to the Internet and provides
flexible solutions based upon demand, using state-of-the-art technology.
DOL’s individual access and portal brand e-kolay.net is measured
With the priority to achieve coverage via its 25 POPs, e-kolay.net Corporate
periodically by researchers. According to the results of the Netbus 22
Services is providing service throughout Turkey improving its already fast,
research carried out by CRC in November 2005, e-kolay.net is the “the
high-quality and secure Internet access operations.
brand that is first remembered.” The research also shows positive results
for brand preference and ownership criteria.
Turkish Internet users visit DOL portals frequently due to excellent quality,
diverse topics and services it offers such as news, sports, women’s and
children’s issues, astrology, health, city guides, cinema, humor, computers,
cuisine, yellow page directories, TV guide and other content channels as
well as services such as e-mail, daily agendas, mobiles, games, friends,
e-groups, chat rooms, photo album, e-cards, forums and search engines.
E-business sites such as Bigpara.com, Gezisitesi.com, HemAlHemSat.com
are also widely favored by Internet users.
91
Specifically, Bigpara.com for individual investors, Fanatik for soccer
fanatics and Mahmure for women are among the unique portals owned
by DOL.
Bigpara.com, the finance portal of e-kolay.net, offers users the latest
developments in economic and finance news, the daily position of stocks
on the Istanbul Stock Exchange, trends in alternative markets such as
repurchase agreements (repos), gold and foreign markets.
Gezisitesi.com offers via other suppliers the following services online:
domestic and international tours, cruise packages and hotel reservations,
day trips, nature tours, cultural and health tours with accommodation.
E-commerce site HemAlHemSat.com, launched in July 2004 and was
renamed to reach the right target customers and apply new marketing
strategies, is used by many in Turkey. HemAlHemSat.com provides secure
services for individuals to buy or sell second-hand goods and for
entrepreneurs and companies to sell leftover products or goods that would
not be sold via regular sales channels.
Medyanet, by far Turkey’s most visited online marketing company and
the leader in Internet advertising, sells online ads not only for portals in
the DOL domain, but also for newspapers and magazines belonging to
the DYH Group. As an online communications marketing company that
brings together brands and their most valuable target audiences, Medyanet
offers great advantages, such as helping companies to measure the return
on their marketing communications investments and to acquire registered
members through interactive projects. Medyanet performs advertising
sales and marketing for the DYH Group’s 40 portals and has a market
share of almost 50%.
Do¤an Online will continue seeking strategic alliances on a global scale
to enhance and expand the scope and quality of its services.
With the experience gained as an Internet service provider to corporate
and individual customers, DOL has become Turkey’s leading provider of
Do¤an Online will increase its presence in ICT (Information Technology,
online services and content. It has transferred this expertise to sound and
Communications and Telecommunications) taking advantage of the latest
data communication services in the field of telecommunications through
developments in Internet technologies. To achieve this, the Company will
Do¤an Telekom. With a group license to operate as a long distance
increase the number of its dial-up customers, develop new content on
telephone service provider, Do¤an Telekom provides high-quality and
various platforms, use its infrastructure more effectively in telecom
wide-ranging economical telecommunications services to both individuals
operations and expand its market for e-business opportunities. This
and companies. In an effort to provide companies with solutions for all
expansion into new areas of business notwithstanding, Do¤an Online
voice and data requirements, Do¤an Telekom Corporate Services combines
pledges not to compromise on quality and customer satisfaction that are
various telecommunications products with other integrated solutions.
synonymous with its current success.
Do¤an Telekom Individual Services offers significant advantages over the
In its quest to achieve the highest quality standards, the Company is
competition such as cost-effectiveness, high-quality calls, ease of access
currently working toward the ISO 9001-2000 Quality Management Certificate.
and communications security for individual products and solutions (IP
telephony, calling cards, dialers, and the like).
In addition to individual and corporate ISP business and large content
services, e-commerce and advertising sales, DOL is prepared to make
Staffing
investments in broad-band technology with the privatization of Türk
With 380 employees averaging 28 years of age, DOL is a young, dynamic
Telekom.
organization determined to make its brands household names everywhere
in Turkey with Internet access.
Do¤an Online offers its employees a rewarding career. It promotes creative
and flexible thinking, teamwork and continuous personal and professional
development.
92
Media
The advertisement income of hurriyet.com.tr realized as USD 1,150
million, consisting mostly of banner advertisements will increase
through a comprehensive series of projects reaching as far as the SMEs
in 2006.
ULTRA KABLO
Field of Activity
The Company’s mission is to become the leading brand for developing
Ultra Kablo is one Turkey’s six cable operators providing cable television
and high-speed Internet access services directly to homes and businesses.
broadband cable, trade and content operations. Ultra Kablo aims to
operate broadband cable systems with the latest technology and to function
as a Multiple Systems Operator (MSO) offering value-added services,
Highlights
including telephone, Internet, data, digital and interactive cable TV
•
One of six cable operators in Turkey
broadcasting via broadband cable network. Ultra Kablo provides the cable
•
An equal share joint venture between Do¤an and Koç Holding
infrastructure and the wide-band HFC network provides homes and
businesses with cable TV and high speed Internet connections.
companies
Market Position
•
•
Provides cable television and high-speed Internet access services
directly to homes and businesses
In 1997, Türk Telekom launched a project for the provision of cable TV
Over 226,000 subscribers
services in 21 provinces on a profit-sharing basis. Ultra Kablo won tenders
for 11 provinces including ‹zmit, Gölcük, Mersin, Tarsus, Eskiflehir,
Band›rma, Samsun, Zonguldak, Karadeniz Ere¤li, Alapl› and Erzurum; in
as a joint venture between Do¤an, Siemens and Koç Holdings. Currently,
these areas it broadcasts an average of 55 Turkish and foreign channels.
In 1998, Türk Telekom transferred all of its obligations regarding
infrastructure modernization, capacity increase and maintenance in nine
the Company is a 50/50 joint venture between Do¤an and Koç Holding
large cities to the six cable TV operators on a revenue-sharing basis.
Ultra Kablo, one of the six cable operators in Turkey, was founded in 1997
companies.
Ultra Kablo operates the cable TV infrastructure in the highly populated
Anatolian part of Istanbul. Ultra Kablo has a potential market of 233,000
in the nearby Anatolian provinces and 239,000 on the Anatolian side of
Istanbul, a total potential customer base of 472,000. Currently, Ultra Kablo
reaches 86,000 of the provincial customers and 140,000 subscribers in
Anatolian Istanbul, for a total of 226,000 active cable TV and 4,000 cable
Internet subscribers.
93
YENIBIR
Yenibir.com, the Internet Partner of Hürriyet IK, provides end-to-end webbased solutions to support human resource professionals throughout the
recruitment process. With practical ad publishing methods, an extensive
data bank with over 1.5 million members and detailed search tools,
Yenibir.com creates the infrastructure to aid in the selection of the right
candidates. Technology is constantly revamped through customer feedback
to enhance the Yenibir.com’s functionality as it serves more than 11,000
Hepsiburada entered the sector by selling products such as computers,
telephones, office supplies, home electronics, kitchen equipment, health
care items, furniture, home textiles, watches, flowers, auto accessories,
hardware and garden products, pet supplies, music, movies, books,
souvenirs and sports equipment. With the addition of the Tarifl stores, the
number and variety of products sold is increasing daily. Hepsiburada also
holds the exclusive online selling rights for the Galatasaray and Befliktafl
Sports Clubs.
companies of every size and from every sector - from multi-national
Through an agreement with Hewlett-Packard (HP), one of the largest IT
corporations to family businesses.
companies in the world, an HP store was opened within the site and
HEPSIBURADA.COM
Field of Activity
Internet site shopping links with HP were directed to hepsiburada.com.
With a market share of approximately 35% of the e-commerce field, and
employing over 100 personnel, Hepsiburada.com is committed to retaining
Founded in 1998, Hepsiburada.com is the leader in the e-commerce
its leadership position by continuing to provide services of the highest
sector in Turkey today.
quality to its clientele.
Market Position
Within Hepsiburada.com, over 70,000 products are offered for sale in 21
different categories. The Company maintains leadership is this sector in
terms of sales volume, and the number of registered members and visitors.
94
Media
Do¤an Burda currently produces a total of 24 periodicals of which six
are printed weekly and 18 monthly. These periodicals offer a wide
range of categories including youth, women and fashion, news, hobbies,
business, economy, information technology, decoration, travel and
geography.
MAGAZINES AND BOOKS
DO⁄AN BURDA
DB currently publishes 24 magazines, eight of which are foreign titles
published through licensing agreements. They cover a range of categories
that include youth, women, news, special interests, economy, information
Field of Activity
technology, interior decoration and geography. Many of these publications
Do¤an Burda is Turkey’s foremost magazine publisher with strong
are market leaders in terms of circulation and advertisement revenue.
international partnerships and strategic alliances. Many of its magazines
Currently, DB has licensing agreements with some of the world’s leading
are market leaders in terms of circulation and advertising revenue.
names in publishing:
Highlights
•
Axel Springer Verlag AG
•
Publishes 24 magazines, eight of which are published under foreign
titles through licensing agreements
•
Verlag Aenne Burda GmbH & Co.
•
Strong international partners and strategic alliances
•
Gruner + Jahr AG & Co.
•
Market leader in magazine advertising
•
IPC Magazines Limited
•
The leading importer of foreign magazines
•
Hachette Filipacchi Presse S.A.
History
•
Gruner + Jahr / Mondadori S.p.A.
Do¤an Burda (DB) was initially established in 1988 under the Hürgüç
•
Cote Maison S.A.
•
Meine Familie & Ich Verlag GmbH.
name. In 1998, it became a joint venture between DYH and Burda RCS
International Holding GmbH, composed of the German Burda GmbH and
the Italian Rizzoli Corriera della Sera.
Vision and Mission
The following year, it purchased AD Yay›nc›l›k A.fi. Following a name
Capitalizing on its market position, DB’s vision is to maintain and enhance
change to its present designation in March 2000, the Company went
its leadership in magazine publishing and increase its influence. In addition
public and became listed on the Istanbul Stock Exchange. In July 2004
DB strives to strengthen its current portfolio of magazines while developing
Burda Group purchased the shares of the RCS Group.
new profit centers clustered around its core competencies.
In June 2005, Burda RCS International Holding GmbH changed its name
Strategic Alliances
to Burda Magazines International GmbH. The Burda Medien Group has
subsidiaries and investments in various countries, primarily France, Italy,
The Burda Medien Group has subsidiaries and investments in various
countries in the Far East and Eastern Europe. Publishing magazines is
countries, primarily France, Italy, countries in the Far East and Eastern
its main area of activity; Burda Medien is one of the leading media
Europe. Publishing magazines is its main area of activity; Burda Medien
corporations in Germany.
is one of the leading media corporations in Germany.
Following the increase of its publicly held shares to 19.28% in January
An importer and distributor of numerous international magazines in Turkey,
2005, Do¤an Burda began operating under the name of Do¤an Burda
DB is currently looking into opportunities to grant licenses to overseas
Dergi Yay›nc›l›k ve Pazarlama A.fi. from July 2005.
publishers for selected DB magazines.
95
Market Position
Do¤an Burda currently produces a total of 24 periodicals of which six are
Since 2000, Do¤an Burda has been developing new projects to market
printed weekly and 18 monthly. These periodicals offer a wide range of
its magazines that cover a very wide range of topics. The concept of
categories including youth, women and fashion, news, hobbies, business,
content marketing was first initiated by the establishment of Do¤an Burda
economy, information technology, decoration, travel and geography.
Cartography Department through further investments toward the existing
Magazines of Do¤an Burda enjoy a market share of 35% in terms of their
net sales and 46% in terms of their advertising revenue; a large percentage
of these magazines are leaders in their markets.
With magazines that are each a trademark, coupled with modern
management methods and highly qualified human resource capital, Do¤an
Burda moves on its path as a role model for the entire publishing sector.
cartography service of Atlas Magazine, thus resulting in the production
and marketing of rich, up-to-date maps, needed by all of Turkey.
In September 2004, Do¤an Burda started a social responsibility project
called “Refer to Maps in order to Discover.” The aim of this project was
to lend support to educational activities in Turkey. In the 2004-2005
academic year, political, historical and geographical atlases of Turkey,
the world and Europe produced by Atlas Magazine reached 305,211
Successful launches of Hello! in June 2004 and Elle Decor in April 2005
students in 2,910 schools in ten provinces in Turkey through the efforts
reinforced the Company’s leading position. Do¤an Burda has initiated a
of volunteer companies participating in the campaign that donated these
new phase in magazine publishing characterized by increased circulation
maps to educational facilities.
through the re-launch of Tempo in July 2005 and Haftasonu and Lezzet
in October 2005. Tempo has achieved a circulation of 150,000 and
Haftasonu and Lezzet are at 60,000 each.
Do¤an Burda moved to Hürriyet Media Towers at the beginning of 2004,
resulting in an increase in practical coordination with other companies
of DYH also involved in publishing activities. This has bolstered optimization
of the Group’s synergy.
The strategy of Do¤an Burda for the coming years is to maintain its
leadership via high-circulation magazine publishing and by increasing its
product variety and range with newly launched magazines. This strategy
is expected to help Do¤an Burda to raise the share of periodicals in total
print media in Turkey to those levels in more economically developed
countries. Additionally, efforts of Do¤an Burda to develop its sales channels
and to restructure its distribution channels are also underway.
DB started developing its corporate governance principles, which comply
with the best practices already implemented around the world and in
DYH; it also conforms to regulations employed by the Capital Markets
Board.
DYH
Burda Magazine
Free Float
%
40.72
40
19.28
96
Media
Since its inception, Do¤an Books has taken major strides to become
the new leader in Turkish publishing and the number one choice for
the Turkish literati. Operating under institutional guidelines which
reflect global standards, Do¤an Books is a pioneer in publishing.
DO⁄AN BOOKS
Field of Activity
In 2005, Do¤an Kitap published 100 new titles and reprinted another
400; it has captured the public’s attention with the unprecedented printing
and sale of over one million books.
Do¤an Books is a pioneering publishing house commanding a 30% share
of bestsellers. It has strong international collaborations that keep up with
the latest trends in publishing.
Highlights
Do¤an Books believes it has two major missions. The first is to bring select
works of world literature to Turkish readers as they become available
globally without compromising quality. The second mission is to introduce
•
Pioneering role in the publishing sector
•
Emphasis on quality in all aspects of publishing
•
A 30% share in bestsellers
•
A trustworthy business partner for foreign publishing houses
•
Award-winning publications
•
Simultaneous publishing of the latest international books
•
Strong advocacy of intellectual property rights and adherence to ethical
business practices
•
Offering books that cover a wide spectrum of interests for literature
fans
the reading public to books of current Turkish authors, while also reprinting
the works of the greatest names in Turkish literary history. By offering
best selling books, Do¤an Books aims to be the best known publishing
house in Turkey for both local and foreign titles.
•
A respected organization directed by a team of professionals
Competitive Advantages over its Peers
Trustworthiness: The Company follows trends in world literature closely
and establishes direct links with foreign publishing houses and agencies.
It is the first choice for foreign publishing houses in Turkey.
Emphasis on High Quality: Do¤an Books’ publications are easily
differentiated from those of its peers by a pronounced difference in design,
print and paper quality.
Respect for Intellectual Property and Copyrights: Do¤an Books abides
strictly by sound corporate governance principles and as such respects
Do¤an Kitapç›l›k A.fi. (Do¤an Books) started operations in 1998 after the
the intellectual property rights of its writers and its commitments to writers
merging of a number of book publishing companies operating under DYH.
and all business partners. All endeavors of Do¤an Books are transparent
Currently, the largest shareholder in Do¤an Books is DYH, with 51% of
and professional.
the shares.
Since its inception, Do¤an Books has taken major strides to become the
new leader in Turkish publishing and the number one choice for the
Turkish literati. Operating under institutional guidelines which reflect global
standards, Do¤an Books is a pioneer in publishing. The Company places
special focus on author and book selection, editing, translation and proofing
as well as on the highest quality standards in book design, paper and
print.
Effective Marketing: Being part of DYH provides Do¤an Books with
numerous means and channels of marketing and publicity.
Established Market Presence: Do¤an Books has established good
relationships with publishing organizations. The Company is frequently
consulted by local and foreign organizations in matters relating to the
Turkish cultural environment and publishing market.
97
DO⁄AN EGMONT PUBLISHING
Field of Activity
Do¤an Egmont is the country’s most preferred publishing company for
youth and adolescents. It is the sole licensed publisher of Walt Disney
books and magazines in Turkey and also publishes licensed magazines
and books from other internationally well-known publishers.
Highlights
•
Strong international licenses
•
High service quality
•
Synergy with Do¤an Yay›n Holding companies
•
Established good reputation in the marketplace
•
Dynamic and dedicated staff
•
Experience in third party publishing
•
Flexibility in adapting to rapid changes
•
High quality standards
targeting 0-14 year olds and acts as a third party publisher in conjunction
•
Strong overall market share of 40%
with Panini a leading company in the sticker collections business. European
•
Industry-wide recognition for its expertise in marketing and distribution
Every month the Company produces 18 magazines and 15 new books
and World Cup Championship stickers, Harry Potter and Narnia stickers
are examples of the collections they distribute.
through Yaysat
Do¤an Egmont magazines reach over 5,000 sales points utilizing Yaysat’s
•
Presence at 5,000 sales points
History
Do¤an Egmont Publishing was established in 1996 as a joint venture
between the Danish Media Group Egmont Foundation and Do¤an Yay›n
extensive distribution system, and its books are offered for sale in over
1,000 locations. Apart from bookstores and stationery shops, chains like
D&R, Toys‘R Us, Migros and Carrefour are among the retailers that are
a part of the distribution network.
Holding. Do¤an Egmont is the sole licensed publisher of Walt Disney
Strong international licensing agreements and third party publishing
books and magazines in Turkey. Within the target group for 3-14-year-
experience, along with products and services of the highest quality, ensure
olds, it is the country’s most preferred publishing company. In addition
Do¤an Egmont’s long-term competitive edge toward market leadership.
to Disney products, Do¤an Egmont also holds licensed product rights of
In addition to magazine and book businesses, Do¤an Egmont is closely
a variety of well-known companies, such as Warner Brothers, Mattel,
monitoring new trends in TV and is investing in television tie-in publications.
Nickelodeon, Dami, HarperCollins and Panini.
Synergy with Other Companies
As a Turkish-Danish joint venture company, Do¤an Egmont has a
Do¤an Egmont’s vision is to become a world-class publishing company
multicultural structure, adopting a well-balanced mix of management
employing the highest quality standards. On its way to achieving this goal,
principles from both of its shareholders.
the Company aims to open a window in children’s minds by emphasizing
entertainment, education, social values and personal responsibility. To
Do¤an Egmont works very closely with its shareholder companies. Drawing
fulfill this mission, Do¤an Egmont strives to maintain its leading position
on the considerable expertise of its investors, coupled with its low employee
in the marketplace in children’s books and to expand its book and magazine
turnover, the Company creates advantages in controlling costs and
businesses with new products at the same time targeting new readers.
increasing efficiency.
Assessment of Operations
As the country’s leading publisher for children and adolescents, the
Company has been granted exclusive rights to represent Walt Disney
The Company operates in two main areas: magazines and books for
products in Turkey. In addition to Disney books and magazines, Do¤an
children and teenagers.
Egmont has acquired licenses from various well-known publishers, such
Do¤an Egmont became the preferred publisher of products designed for
as Warner Bros, BBC, Mattel, Harper Collins, Dami and Panini and has
the 0-20 year old age group, with 40% of the market share (newspaper
also secured the publishing rights of well-known local brands such as
promotions excepted) for this group and 25% of the market share for
Fenerbahçe, Galatasaray, Befliktafl, Kanal D and D Productions (formerly
illustrated books.
ANS).
98
Media
DPP is responsible for the distribution of 1,581 periodicals; 880
Turkish and 701 foreign language magazines and newspapers imported
from various countries and sold in Turkey. Its product portfolio consists
of 37 daily, 114 weekly, 55 bi-weekly, and 611 monthly publications.
KATALOG YAYIN VE TANITIM HIZMETLER‹
Field of Activity
Katalog Yay›n ve Tan›t›m Hizmetleri set off to improve consumers’ awareness
of the companies listed in Alt›n Sayfalar, contribute to the development
of both SMEs and the Turkish economy and to help consumers find goods
Katalog Yay›n ve Tan›t›m Hizmetleri publishes the Alt›n Sayfalar (Golden
Pages) shopping and city guides, which are filled with information about
every kind of product, brand, company and service imaginable.
and services as easily as possible. It rapidly grew to be the most effective
and respected company in its sector. The Company aims to become an
important medium in the advertising industry and is confidently moving
History
toward this goal.
Katalog Yay›n ve Tan›t›m Hizmetleri A.fi. was founded on August 1, 2005.
The Company is organized into three regional offices - Marmara, Aegean,
The Alt›n Sayfalar (Golden Pages) was initially published through Do¤an
Central Anatolia - each reporting directly to headquarters. A total of 216
Ofset, an affiliate of Do¤an Yay›n Holding. Later this same business was
persons, including management and sales teams are employed by the
set up as an autonomous company when the need for such a change
Company. In-service training programs are offered as part of the Company’s
became evident.
desire to continually improve the performance of its employees.
Market Position
First published in Izmir in August 2003, it took only two short years for
city and regional specific Alt›n Sayfalar guides to be available in the most
industrially developed areas of the country: Istanbul including both the
Anatolian and European sides and the Old City, Ankara, Izmir, Mu¤la,
Ayd›n, Denizli, Manisa, Konya, Kayseri, Bal›kesir, Bursa and Thrace, It
is expected that its current 21 guides will reach millions of consumers in
44 provinces by the end of 2006.
Katalog A.fi. also aims to become a preferred communications channel
on the Internet. Accordingly, in addition to its printed version of Alt›n
Sayfalar, the Company provides services on its website
(www.altinsayfalar.com.tr) where data on commercial enterprises is
available and broken down on the basis of province, sector and subsector. Tens of thousands of companies, with many new additions made
daily, are included in this database - the largest and most up-to-date
Alt›n Sayfalar guides are updated annually and have a high level of
listing of its kind in Turkey.
circulation. This is the only publication of its kind where the consumer
can locate producers and learn about them. The guides are distributed
Katalog Yay›n ve Tan›t›m Hizmetleri A.fi. plans to add sector-specific books
free of charge to all sectors, professional associations, regions with strong
and CDs to its already existing printed guides and its website. As such,
economic activity, hotels, official institutions, industrial areas, chambers
the Company has already begun laying the groundwork for such an
of commerce and industry and trade corporations.
expansion.
99
DISTRIBUTION AND RETAILING
Market Position
DPP
By the end of 2005, DPP had successfully handled the marketing and
Field of Activity
DPP is a company specialized in magazine distribution planning and
marketing. It utilizes all available high-end technological means in its activities.
distribution of over 380 publishers. This has made it the leading magazine
marketing and planning company in Turkey.
DPP uses all technological means available to gather and process real
time market information on the spot. The inventory of large-scale outlets
Highlights
•
•
•
•
is monitored closely and necessary action is taken promptly to ensure
DPP is the only Do¤an Yay›n Holding company which specializes in
magazine planning and marketing.
seamless service. In an effort to enhance operational and reporting
DPP is the only company that can plan on end-seller basis utilizing
state-of-the-art software.
another Do¤an Yay›n Holding company.
DPP has full control of the marketplace through an effective sales
team utilizing all the high-end technological means available, including
WAP phones and palm computers.
DPP carefully analyzes developments and sales trends and plans using
The Company has an astounding market share of 67%.
and then undertakes the most suitable distribution planning, providing
efficiency, DPP will adopt SAP applications in collaboration with Yaysat,
A pioneering company in the magazine and foreign publication market,
IT-based tools employed by expert professional staff. DPP first determines
the most appropriate sales points for magazines and foreign publications,
display visibility and availability that are constantly monitored at sales
Established in August 2002, Dergi Pazarlama Planlama ve Ticaret A.fi.
(DPP) is one of the newest companies within Do¤an Yay›n Holding. It is
the first and only company within DYH with an international shareholder
in media distribution.
points by well-trained experts.
DPP is responsible for the distribution of 1,581 periodicals; 880 Turkish
and 701 foreign language magazines and newspapers imported from
various countries and sold in Turkey. Its product portfolio consists of 37
daily, 114 weekly, 55 bi-weekly, and 611 monthly publications. Moreover,
DPP is involved in distribution management, marketing and planning
services of all magazines published and/or imported by DYH companies
as well as the magazines published by customer publishers.
Shareholders include Do¤an Yay›n Holding, BRIH Burda RCS International
GmbH and Yaysat.
there are 764 periodicals published bi-monthly or at longer intervals.
DPP distributes approximately 7.8 million magazines each month. This
represents 65% of the total magazine and foreign periodical market.
100
Media
Yaysat is the leader in the sector in Turkey and intends to become a
global leader with its ability to fulfill the needs of media groups and
their customers. In line with this vision, it continuously looks to find
new ways to improve the quality of its operations.
The periodicals for which DPP is responsible are distributed by Yaysat’s
advanced logistics network and distribution chain, enabling publications
to reach sales points on a daily basis. A total of 225 wholesalers and
24,700 retailers work to bring publications to the end user. DPP has
recently developed a sales network consisting of retail stores, which has
enabled the sales of some periodicals to increase 30%. DPP magazines
are sold at 1,088 chain stores owned by 70 different companies.
DPP targets:
DPP’s annual revenue rose from USD 61.2 million in 2004 to USD 73.6
million in 2005, an increase of 20%. It is anticipated that by the end of
2006 revenue totaling USD 81 million will be achieved.
DPP serves up-to-date information needs in Turkey by furnishing magazines
from a variety of publishing houses. The Company emphasizes the effective
and efficient use of human resources and up-to-date technology. Striving
for complete customer satisfaction, DPP wants to become a multinational
leader in magazine marketing and planning while using all high-end
technological means available for its line of business.
In an effort to achieve its vision, the Company aims to create an optimal
combination of profitability, a low product return ratio and the highest net
sales figure.
DPP adheres strictly to its corporate values in all of its activities:
•
Treating all customers as business partners
•
Investing in the development of the magazine market
•
Competing with others in the spirit of fair play
•
Forming a culture of information sharing.
•
Delivering the best planning and marketing services to enable its
business partners to achieve maximum sales growth
•
Developing new sales channels and methodologies
•
Keeping returns at a minimum but availability at a maximum, thus
enabling partners to lower costs
•
Continually expanding its portfolio of magazines and enhancing
services.
The uncontested leader in magazine planning and distribution, DPP is
highly regarded in the sector as the first company with foreign partnerships
as well as its high levels of strategic planning. Among DPP’s goals for the
future, its greatest priority is to maintain customer satisfaction and service
at the highest levels.
The primary aim of DPP for the coming years is to maintain its market
share at around 70% and expand its foreign magazines portfolio as well
as sales income. The Company also plans to expand into neighboring
Turkic language markets and capitalize on those markets via the Internet.
Staffing
DPP is a contemporary and challenging work environment. The Company
encourages its employees to be creative and to participate in the
management process. Employees are expected to be aware of the
Company’s corporate responsibilities and find ways and means to further
those responsibilities.
101
YAYSAT
Field of Activity
Yaysat is a printed materials distribution company, dealing mainly with
newspapers and magazines. It employs a large fleet of trucks to deliver
on time all around the country.
Highlights
•
Yaysat delivers newspapers and other printed material to the farthest
regions of Turkey daily
•
Regional offices in Istanbul, Ankara, Izmir, Adana, Trabzon and Antalya
provide a competitive edge with regard to reach, transportation and
planning
•
The Company is well ahead of its peers in terms of HR and IT
•
The Company creates competitive advantages through the use of
latest technology
Yaysat Yay›n Sat›fl Pazarlama ve Da¤›t›m A.fi. (Yaysat) was founded in
1992 by the newspapers Milliyet and Türkiye in a joint partnership after
the liquidation of the Gameda Company and grew rapidly after Hürriyet
was acquired by the Group.
Do¤an Da¤›t›m Sat›fl ve Pazarlama A.fi. (Do¤an Da¤›t›m) was established
in 2001. In keeping with a clear delineation of duties between the two
Yaysat is equipped to make distribution planning at the Point-of-Sale level.
companies, Yaysat is responsible for distribution and logistics activities
It works online on a B2B platform shared with its distributors through a
while Do¤an Da¤›t›m handles marketing and financial functions.
capacity comparable to a mid-size bank’s transaction volume and has
plans to further increase and enhance its IT-based operations with
additional infrastructure investments. Yaysat also operates in the distribution
Yaysat is the leader in the sector in Turkey and intends to become a global
of non-media products, mainly including GSM cards, cassettes, toys,
leader with its ability to fulfill the needs of media groups and their customers.
stickers, Internet service packages, and candy.
In line with this vision, it continuously looks to find new ways to improve
the quality of its operations.
The mission of Yaysat is to distribute a wide variety of publications to
readers at the right time, at the right place.
Market Position
Yaysat achieved significant growth in the marketplace during 2005 due
to a gain of an extensive number of non-group customers. Today, it has
a commanding market share of more than 60%.
Yaysat also targets leadership in book distribution and in the marketing
of telephone cards. Yaysat is aiming for an annual turnover of USD 75
million in non-media products within the next three years. The Company
has plans to increase the number of Yaysat Shops to 500 and Yaysat
Points-of-Sale (POS) to 50,000 within the same time frame.
Yaysat, Turkey’s most far-reaching print media distribution organization
is responsible for the nationwide distribution of 21 national and 19 regional
newspapers, 59 weekly magazines, 27 bi-weekly magazines, 400 assorted
monthly magazines, 394 quarterly or annual publications and 18
newspapers out of a total of 638 other assorted foreign publications.
Operations
With 226 primary distributors in Turkey and Northern Cyprus totaling
Yaysat fulfills an important mission in Turkey by distributing more than
25,800 and 27,000 sales points in low and high season respectively,
40 newspapers and 1,500 magazines all over the country. Its market
Yaysat is capable of reaching any point in its network within a maximum
share in print media distribution is over 60%, by far the largest share of
of 24 hours. Yaysat accounts for the sale of 63% of Turkey’s newspapers
any company in the sector.
and 65% of its magazines on a regular basis.
In 2005, Yaysat successfully distributed a total of 1.424 billion newspapers,
magazines and other non-media products within Turkey and Northern
Cyprus.
102
Media
Capitalizing on its excellent reputation, D&R maintained its leadership
in the marketplace in terms of concept and volume of operations with
more than 60,000 products on display in its stores. Products include
books, films, CDs, DVDs and a wide selection of electronic equipment.
IT Investments
Social Activities
For Yaysat, keeping pace with new technology means balancing cost and
Volunteers from Yaysat in collaboration with P.S.V.A. (Private Sector
performance. In order to reach equilibrium between investment costs and
Volunteers Association) regularly participate in projects to protect the
output performance, Yaysat regularly invests in consultancy services from
environment and support education.
some of the world’s leading companies in the sector as well as some wellknown local IT companies.
Yaysat has distributed schoolbooks and other supplies for children. In
addition, a computer laboratory was set up by Yaysat in a Had›mköy
In addition, approximately 3% of the IT budget is reserved for professional
school. To help prevent car accidents, Yaysat has been supporting the
training in software, systems and network engineering. In an effort to
‘Drive Safely: Keep Headlights on during the Day’ campaign for over four
improve its Management Information System (MIS), Yaysat implemented
years.
SAP software project, which became operational in mid-2004.
Competitive Advantages
Yaysat is currently in contact with a company from Hong Kong to establish
Yaysat’s outstanding IT investments have led to great competitive
chain stores. The Company is also in negotiations with a Spanish company
advantages:
for the distribution of their products in the Turkish market. Yaysat also
•
B2B Platform-Enables Yaysat to reach all its distributors and sales
points instantly in order to share distribution, planning and financial
data. This instant communication opportunity with the distributors
also saves time and money.
•
Demantra Software-This innovative software works on the Oracle
database platform and calculates sales forecasts at the end of a
process called Engine. During this procedure, sales trends, sales
aims to market its newspaper and magazine sales planning software
program to other printing and publishing establishments, especially
markets in China and the Far East.
Aware of the power of globalization, the Company earnestly seeks to
increase its relationships with foreign companies.
D&R
Field of Activity
results of the previous or the same day, seasonal characteristics and
•
•
special events such as political and sports events and promotions that
D&R operates as Turkey’s first and the largest chain of music and
affect sales are all taken into consideration.
bookstores.
Spart Software-This user-friendly software also works on the Oracle
Highlights
database platform, which enables a direct connection to the web. It
•
41 stores in eight cities in Turkey
facilitates the preparation of detailed sales forecasts and analyses.
•
More than 60,000 products on display in stores
•
Multi-floor stores in prime locations
•
Highly popular D&R virtual store on the Internet
•
Strong brand awareness
•
A young and dynamic customer base
•
Strong financials
A computer-aided central sales and distribution planning system,
unique both in Turkey and the world, makes presentation of printing
house reporting and daily sales estimations possible for clients.
103
History
Established in November 1996 as a joint venture between DYH and the
Raks Group, D&R is involved in the retailing of cultural and entertainment
products through a network of stores in major locations across the country.
In 1999, DYH increased its shareholder percentage to 99.9%.
Capitalizing on its excellent reputation, D&R maintained its leadership in
the marketplace in terms of concept and volume of operations with more
than 60,000 products on display in its stores. Products include books,
films, CDs, DVDs and a wide selection of electronic equipment.
In an effort to tap the expanding cultural products market potential in
Turkey, D&R utilizes different sales channels, from spacious multi-floor
stores in prime locations in major urban areas to the D&R virtual store on
The vision of D&R is to deliver the largest possible variety of products in
the Internet.
the most convenient, financially sound and eye-catching manner, without
compromising the quality of products and service, while keeping its
excellent reputation.
D&R has chosen to build the largest, best structured sales, service and
distribution organization in Turkey’s entertainment sector.
Staffing
Among D&R’s human resources policies, the talent pool application
receives top priority. In this regard, Head Office and store personnel have
separate labor pools. Head Office personnel are chosen among young
people with an engineering background, whereas store employees are
Targets include:
recruited from university graduates with diverse backgrounds who seek
•
Further increasing the number of products on offer
a career in retailing. All new recruits are given in-house and on-the-job
•
Opening new stores
•
Developing marketing strategies that reflect consumer preferences
•
Utilizing all possible media to reach consumers
•
Increasing brand loyalty and customer satisfaction
•
Seeking ways of opening up international markets and becoming the
training.
IT-Driven Job Processes
At D&R, all job processes have been designed by using the latest information
first address for all international inquiries.
Market Position
Following a period of slow growth during Turkey’s financially troubled
years, D&R opened eight new stores in various locations around the
country in 2005. By the end of the year, D&R had 41 stores in eight cities
in Turkey.
technology, enabling greater efficiency and speed that make it possible
for the Company to launch customer loyalty programs through data mining
and data warehousing applications.
Future Plans
With its wide range of products, high service quality and excellent store
locations, D&R is constantly targeting maximum customer satisfaction by
employing customer relationship management (CRM) tools and advanced
marketing methodologies. In the coming years, it aims to expand its market
share as Turkey’s leading chain of music and bookstores by opening more
stores across the country.
104
Media
Do¤an Printing Centers, located in six major cities across Turkey, are
involved in printing large numbers of periodicals and eight daily
newspapers for DYH companies. In terms of capacity, DPC in Istanbul
is the largest printing facility in Turkey and the second largest in
Europe.
PRINTING
DO⁄AN PRINTING CENTERS
Field of Activity
concentrate on what they do best - printing. Creating synergy among DYH
newspapers, these centers coordinate paper purchasing and stockpiling
for all Holding newspapers, ensuring even further cost savings.
Aiming to achieve sustainable change, high flexibility, quality and
Do¤an Printing Centers, located in six major cities across Turkey, are
effectiveness, with annual paper usage of over 240,000 tons, DPCs are
involved in printing large numbers of periodicals and eight daily newspapers
the leading printing facilities in Turkey and among the best in the newspaper
for DYH companies. In terms of capacity, DPC in Istanbul is the largest
industry worldwide.
printing facility in Turkey and the second largest in Europe.
Highlights
DPC in Istanbul-The Largest Printing Facility in Turkey
The DPC located in Istanbul, with an enclosed space of 17,000 square
•
Gathers the leading printing facilities in Turkey under one umbrella
•
Over 240,000 tons of paper printed annually
•
Clear focus on printing
a capacity of 85,000 newspapers per hour each with 40 color pages for
•
Coordination of paper purchasing and storage of all DYH newspapers
a total of 64 pages. Man Presses are also connected to the Muller Martini
•
Using the latest Computer-to-Plate (CTP) technology, to feed pages
meters, is the largest printing facility in Turkey and the second largest in
Europe in terms of capacity. The facility has a pair of Man Colorman and
three Goss HT-70 printing machines. The Man Colorman machinery has
insertion system, the latest technology for this function. The facility is also
from editorial to printing
History
Do¤an Printing Centers (DPCs) mainly publish eight daily newspapers
equipped with state-of-the-art Computer-to-Plate (CTP) technology to feed
pages from editorial to printing without further handling.
DO⁄AN OFSET
Field of Activity
and periodicals for DYH companies. These centers joined forces for the
first time in February 1996 when the separate printing facilities of Hürriyet
Do¤an Ofset is a large-scale printing house offering outstanding quality
and Milliyet in Trabzon were merged and consequently renamed. Later,
in the production of magazines, inserts, brochures, catalogs, newspapers,
all DYH printing facilities located in Ankara, Izmir, Antalya, Adana and
directories and books. In addition to its domestic customers, Do¤an Ofset
Istanbul were brought under the umbrella of DPC.
also serves its customers effectively in a number of foreign countries.
Focus on Printing
Highlights
With the merger of the Hürriyet and Milliyet printing facilities, DYH achieved
•
Internationally competitive printing company
the most efficient and cost-effective production and printing solutions for
•
Technologically advanced machinery offering world-standard quality
•
The first printing company in Turkey to earn the ISO 9001:2000
an ever-increasing number of publications. The establishment of DPCs
relieved the Holding’s newspapers from the burdens of production, printing
Quality Assurance Certificate
and distribution, allowing them to concentrate on journalism. Using modern
production management techniques to increase efficiency, these centers
•
ISO 14001 Environmental Protection Program Certificate
105
History
Do¤an Ofset, established in 1970, is an internationally competitive printing
company offering outstanding quality. The Company is also engaged in
a variety of related services. Foreseeing the future in heat-set web offset
technology, Do¤an Ofset installed the first heat-set offset web press in its
facilities as early as 1976.
The acquisition of Do¤an Ofset by DYH in 1994 gave life to the commercial
printing industry. Do¤an Ofset is equipped with heat-set web and sheetfed offset presses for the production of magazines, inserts, brochures,
catalogs, newspapers, directories and books.
A Focus on Technology
As part of its ongoing investment program, Do¤an Ofset continuously
invests in new machinery to keep up with technological developments in
printing. Its new heat-set web offset press machines (M600B24 and
M850C) have increased annual production capacity to one billion signatures.
Its finishing line adds extended facilities to serve global and local customers
offering higher quality products with speed and flexibility.
The Company’s bindery utilizes, in addition to four folding machines, a
fully-automated binding line capable of producing 7,500 hardcover and
10,000 bound books per hour. In addition, a thread stitching robot
produces 9,600 books per hour and the four new Müller Martini wire
stitching machines, which went into production at the end of 2004, are
capable of producing 56,000 books or magazines per hour. Five paper
cutters (guillotines) and a hardcover manufacturing unit round out the
binding equipment.
The total technological infrastructure ensures that high quality and capacity
coupled with low production costs, earn Do¤an Ofset a considerable
competitive advantage in the European market.
Quality and Continuous Improvement
Do¤an Ofset remains committed to quality and improvement. Do¤an Ofset
was the first printing company in Turkey to earn the prestigious ISO
9001:2000 Quality Assurance Certificate. The Company actively implements
SUPPORT SERVICES
the Total Quality Management System. Do¤an Ofset has also earned the
DO⁄AN NEWS AGENCY
ISO 14001 Environmental Protection Program Certificate. These certificates
ensure Do¤an Ofset’s continued commitment to quality and environment
carrying the Company to the forefront of the printing industry.
Market Position
Field of Activity
Do¤an News Agency (Do¤an Haber Ajans›-DHA) is a content provider
specializing in news photography, as well as video and audio news
coverage.
In addition to its domestic customers, Do¤an Ofset also serves its customers
successfully in the Ukraine, Russia, Romania, Bulgaria, Hungary, Latvia
Highlights
and the United Kingdom. There are plans underway to further increase
•
Extensive representation across Turkey and in neighboring countries
the Company’s exports to 15% of its annual sales volume.
•
Strives to become the best live news broadcaster in the region
•
Cooperation with internationally known agencies-Associated Press,
Reuters and Sipa Press
sheet-fed printing capability, a new machinery line, a large customer base,
•
Represented in 17 countries outside Turkey
a young workforce and a finely tuned distribution organization, Do¤an
•
The first news agency in the region to utilize videophone technology
Ofset is on track to become an international center for printing in the 21st
•
Received more than 50 awards from diverse organizations since its
establishment
With high print capacity and quality, broad service coverage, web and
century.
106
Media
Over the last three years, Do¤an Factoring made a tremendous leap
and became one of the leading factoring companies in Turkey. Today,
the Company is able to fund all of its activities through equity capital.
Extensive Geographical Coverage and High Processing Volume
International Cooperation
DHA delivers news reports, still photographs and video news to an array
of major clients. Within Turkey, this includes eight newspapers (Hürriyet,
Milliyet, Posta, Radikal, Gözcü, Referans, Fanatik, Turkish Daily News),
three television channels (CNN TÜRK, Kanal D and Star TV), three radio
stations and websites affiliated with the Do¤an Media Group. Beyond
Turkey’s borders, DHA serves a wide variety of media organizations and
operates 15 state-of-the-art mobile news production and redundant Kuband satellite uplink trucks. It also runs three fully equipped fly-away units
which enable a prompt response to breaking news situations around the
globe.
DHA cooperates with internationally well-known newsgathering services
DHA relies on an experienced array of more than 600 journalists,
photojournalists and camera crews within Turkey. The team of highlyprofessional correspondents gives DHA a special edge - the capacity to
cover developments in neighboring countries - from Azerbaijan, Armenia
and Georgia through Iran, Iraq and Syria to Greece and Bulgaria.
disaster in Asia, EU summits and the earthquake in Pakistan, DHA proved
DHA also provides news reports, photographs and video news from the
such as the Associated Press, Reuters and Sipa Press to distribute
important news and visuals to the worldwide subscribers of these agencies.
Outside Turkey, DHA is represented in 17 countries.
Achievements
Since its establishment, DHA has received more than 50 awards from
diverse organizations. In 2005, more than 100 breaking news stories were
first broadcast live with the cooperation of DHA as intermediary. During
the coverage of the funeral of Palestinian leader Yasser Arafat, the tsunami
itself as a leading world-wide agency. Live DHA cameras and satellite
teams also helped global news channels record history during the Kyrgyzstan
political uprising.
DO⁄AN FACTORING
United States (New York, Boston, Chicago, and Los Angeles), Great Britain,
Field of Activity
Spain, Sweden, Norway, Belgium, Netherlands, Denmark, Germany,
Do¤an Factoring is an in-house factoring company specialized in managing
Switzerland, Lithuania, Cyprus, Egypt and Australia.
media receivables of the DYH companies. It provides collection services
On average, DHA processes 6,000 news articles, 11,000 photographs
as well as favorable financing terms enabling clients to focus on their core
and 3,000 television news reports per month and disseminates them
activities.
electronically. As part of its mid to long-term expansion plans, DHA has
Highlights
invested in seven customized vehicles equipped with digital cameras and
•
A leading position within the factoring industry since 2001
•
Among the top ten factoring companies in Turkey with respect to
annual turnover
The ultimate goal of DHA is to capitalize on its competitive edge in
•
Strong equity capable of funding factoring activities
technology to become the best live news broadcast operation in the region.
•
Competitive advantage gained through unique processes, strong
organizational structure and original applications
•
Activities supported by the use of the latest banking techniques and
IT tools
•
Competent and knowledgeable staff
satellite telephones, operating in Turkey and major world cities.
It aims to be recognized as the main regional news service provider by
major international TV channels and publishers. Strategic plans are
structured to dominate the market within the coming five years.
107
Established in 1999, Do¤an Factoring is currently one of the top ten
factoring companies in Turkey. Initially it was a subsidiary of D›fl Factoring,
and from its inception until mid-2001 it was a relatively small operation.
However, in June 2001, the Company became a subsidiary of DYH and
has since restructured to assume a leading position in the factoring
business.
Do¤an fiirketler Grubu Holding A.fi., one of the founding shareholders of
the Company, transferred its shares to Do¤an Yay›n Holding A.fi. Today,
its shareholders are Do¤an Yay›n Holding A.fi. with a 93.88% stake,
Hürriyet Gazetecilik ve Matbaac›l›k A.fi with 5% and the rest held by other
companies within DYH.
Additionally, since June 2002, all advertisement control activities have been
Strong Financial Position
centralized at Do¤an Factoring. Since then, the Company has also assumed
Over the last three years, Do¤an Factoring made a tremendous leap and
became one of the leading factoring companies in Turkey. Today, the
Company is able to fund all of its activities through equity capital.
Value-Added Services
In addition to collection services, Do¤an Factoring is also involved in other
service aspects of the factoring business such as credit investigation and
trade receivables accounting. Through in-depth risk analysis concerning
the task of invoice generation and supervision of printed media advertisements
to ensure that they are in line with preset prices and criteria.
On its journey toward achieving its vision to become one of the top
companies in the factoring industry with respect to turnover and profitability,
Do¤an Factoring seeks to utilize DYH synergy to further expand and
improve its current activities.
trade receivables, the Company is largely instrumental in avoiding any
In coming years, Do¤an Factoring plans to:
possible payment defaults, thus raising the asset quality of the companies
•
Increase its equity base in USD terms
served.
•
Develop a centralized collection platform
In addition to summary reports indicating advertising targets and sales
•
Maintain efficiency and profitability in all its operations
reports for all publication companies within the group, every month
•
Generate a larger funding base to finance its clients
•
Improve existing early-warning systems and the content of its monitoring
reports.
Collection Status Reports and Advertising Oversight Reports are issued.
These reports enable Do¤an Factoring to monitor every stage of the
collection process, from job order to collection and final payment. Do¤an
Factoring also offers its customers the option of monitoring their accounts
online via the Internet.
DO⁄AN DIfi TICARET
Field of Activity
Within the scope of collection services, Do¤an Factoring ensures the optimum
Do¤an D›fl Ticaret handles the import of raw materials and promotional
utilization of funds by extending cash management services to clients.
items utilized by the companies within Do¤an Group.
Market Position
Because Do¤an Factoring is engaged in the collection of advertising
Do¤an D›fl Ticaret is a leading name in the paper and steel markets, best
revenue and other receivables from DYH companies, it strives to provide
known for the volume of material it imports. The Company is also recognized
uniform business practices within the Holding, enabling common action
for its representation of major worldwide producers such as the world’s
against defaulting customers, controlling the collection process and
biggest paper and board producer, Stora Enso OYJ, and the world’s largest
determining commercial policies with regard to advertising groups.
steel manufacturer, LNM Group’s European Subsidiary Mittal Steel Europa
The primary task of Do¤an Factoring is to serve companies within Do¤an
Yay›n Holding. Through its factoring services, the commercial risks of
these companies are eliminated and financial support is provided in the
form of advance payments against advertising receivables.
SA GmbH. With 405.000 tons of paper and board imports/sales, Do¤an
D›fl Ticaret controls a 51% share of this market including non-group sales.
In addition,it commands a 37 % market share by handling approximately
619.000 square meters of graphic film and 992.000 square meters of
plates, both used in the printing industry. Moreover, annual sales of steel
In June 2001, the Company revised its mission of simply acting as the
wire rod of the Company is 20.600 tons referring to 10 % of market share.
collection agent for Do¤an Yay›n Holding companies and expanded its
activities beyond that scope. The Company now handles all receivables
for the companies within DYH.
In 2005, the sales revenue of Do¤an D›fl Ticaret totaled USD 220 million
and was dominated by raw materials such as paper, steel , film and plates
used by the Group.
108
Media
DMG International, in cooperation with newspapers such as Hürriyet,
Milliyet and Fanatik along with Haftasonu and Kanal D’s European
broadcasting, has extended DYH’s reputation as a market leader to
Europe.
PRESENCE IN EUROPE
DMG INTERNATIONAL
Field of Activity
DMG International handles a large portion of publications and broadcast
operations of DYH that are targeted to the Turkish expatriate community
in Europe.
DMG International, in cooperation with newspapers such as Hürriyet,
Milliyet and Fanatik along with Haftasonu and Kanal D’s European
broadcasting, has extended DYH’s reputation as a market leader to Europe.
Hürriyet is distributed by the Axel-Springer distribution network from Great
Britain to Greece, Spain to Denmark with 20,000 sales points in Germany
alone. It operates through a total of 30,000 sales points to reach Turkish
nationals in 23 different countries as the most popular Turkish newspaper,
verifying DYH’s market leadership status.
Highlights
Statistics released by asv Vertriebs GmbH shows that Turkey’s leading
•
Handles a large portion of DYH’s publications and broadcast operations
newspaper Hürriyet is also the most popular one among the Turkish daily
in Europe
newspapers sold in Germany with a market share of 77.32%.
•
Hürriyet is one of the highest selling foreign newspapers in Europe
As a result of the success of these publications, DMG International has
•
Hürriyet is the most popular Turkish daily newspaper in Germany with
a 75% share of the advertising turnover for the ethnic Turkish market in
a market share of 77.32%
Germany.
Hürriyet A.fi.-Germany Branch is also a contract printer for titles like
State-of-the-Art Printing Facilities in Germany
The Financial Times, The Wall Street Journal Europe, the Egyptian
Hürriyet, Milliyet and Fanatik’s pages are transmitted daily from Istanbul
daily Al-Ahram, the Saudi Arabic newspaper Al-Awsat, the German
to Frankfurt, where they are exposed directly onto plates using CTP
newspaper Sportwelt, the Polish weekly Info&Tips and Turkish weekly
technology.
•
Cumhuriyet-Hafta.
The publication of Hürriyet is carried out in Germany by Hürriyet A.fi. History
Germany Branch, a subsidiary of Hürriyet. The Company is also a contract
DMG International was established in 1999 to operate as DYH’s gateway
printer for other European titles such as The Wall Street Journal Europe,
to Europe.
the German sports paper Sportwelt, The Financial Times, Al-Ahram, AlAwsat and Stars & Stripes, the US Army newspaper. At Hürriyet A.fi. –
Cooperation
Germany Branch modern Goss Universal 45 offset newspaper printing
Together with DYH, DMG International has successfully realized many
machines are capable of printing 135,000 papers per hour at a maximum
joint ventures and business collaborations across Europe with major media
of 40 pages, 16 of which are in color. The paper width is variable (between
groups.
630 mm and 914 mm), making it possible to print a wide range of products
Market Position
Headquartered in Mörfelden-Walldorf near Frankfurt, Germany, DMG
International plays a key role in the development of DYH’s business
relationships and interaction with some of Europe’s leading media companies.
of different sizes.
109
Each machine is equipped with the Müller Martini Conveyor system.
The favorite television channel of Turks living in Europe, Euro D reaches
Newsliner insert units, wrapping stations, feeders, counting, bundling and
the entire European continent through its Turksat satellite link and
packaging bands complete the modern print facility setup. The insert
broadcasts via major cable operators.
units make it possible to add customer brochures, magazines, envelopes
and pre-printed newspaper sections and supplements so that the
newspapers reach consumers at the same moment.
European media operators have increased their capacities after switching
to digital cable systems. This has led to their seeking new content for their
broadcasts. Germany has a large Turkish population and is the first country
Two Buhrs Variajet systems are in use for automatic customer addressing
in Europe to switch to digital cable. Some 18 million homes watch programs
using the inkjet method. The “Pick & Place” module completes the line, with
broadcast on digital cable networks. While Euro D technically has access
a maximum capacity of 15,000 copies per hour, gluing stickers, brochures
to these 18 million homes, it currently has 130,000 active subscribers.
or CDs to the newspapers’ cover pages. Three loading bays permit direct
As other European countries switch to digital cable, Euro D will increase
loading of the bundles into vehicles, saving valuable distribution time.
its cable access abroad. Apart from Europe, Euro D can be watched in
Worldwide Distribution
Together with the distribution network of Axel-Springer, Hürriyet has
extended its lead in the market to become the only Turkish newspaper
on display at over 30,000 outlets worldwide, reaching Turkish nationals
the United States and Australia as well.
Countries where Euro D cable broadcasts can be received, along with
their cable operators:
Germany
EUTELSAT and PREMIERE
in 23 countries - from the United Kingdom to Hungary, from Norway to
Spain and Canada.
Kabel Deustschland, KDG, IESY, ISH, KABEL BW,
Netherlands
CAI HADERWIJK, CAI W, CASEMA, LIJBRANDT, Y3NET
Belgium
SKYNET, TELENET
Denmark
COPY DAN, TCD
provides Turkish communities in Europe with instant access to the latest
Norway
TELENOR
developments in daily news and cultural and social affairs in Turkey.
Sweden
COPY SUEDE.
EURO D
Euro D was originally founded in 1996 with the aim of giving Turkish
expatriates the opportunity to remain in touch with their homeland. It
Germany’s official media research organization, Gesellschaft für
Kommunikationsforschung, has named Euro D the most widely viewed
privately-owned television channel among Turkish viewers.
110, 111
responsible...
112
While mainly focusing on education, the Ayd›n Do¤an Foundation is
also involved in organizing national and international conferences,
conventions and seminars on economic, social, cultural and
scientific issues.
THE AYDIN DO⁄AN FOUNDATION
The Do¤an Group consists of two large groups of companies - the Do¤an
fiirketler Grubu Holding and Do¤an Yay›n Holding. One of the largest
The Ayd›n Do¤an Foundation as part of its overall objective to serve society
has made contributions to the following institutions:
•
Sema Ifl›l Do¤an Primary School (Gümüflhane)
•
Atatürk University Ayd›n Do¤an Private Primary School (Erzurum)
corporate responsibilities and contribute to the social and cultural
•
Ayd›n Do¤an Primary School (Istanbul)
development of Turkey through the Ayd›n Do¤an Foundation.
•
‹rfani-Yaflar Do¤an Multi-program High School (Kelkit)
The Ayd›n Do¤an Foundation was established in 1996 as an institution
•
Milliyet Anatolian High School for Teachers (Erzincan)
•
Hürriyet Anatolian High School for Hotel Management (Erzincan)
•
Ayd›n Do¤an Anatolian High School of Communications (Istanbul)
•
Atatürk University Kelkit Ayd›n Do¤an Technical Institute (Kelkit)
to the results of such research, as well as books on media studies. As
•
Afyon Ayd›n Do¤an Center for Science and the Arts
part of its social and cultural activities, the Foundation also conducts
•
Gümüflhane Ayd›n Do¤an Sports Complex
•
Galatasaray University Ayd›n Do¤an Auditorium (Istanbul)
•
Turkish Sports Writers’ Association Ayd›n Do¤an Educational Center
corporations in Turkey, the Do¤an Group is active in the energy, media,
trade, industry tourism and insurance. Group companies fulfill their
devoted to working for the public good, it received a tax-exempt status
from the government. While mainly focusing on education, the Foundation
is also involved in organizing national and international conferences,
conventions and seminars on economic, social, cultural and scientific
issues. It also encourages scientific research and publishes books related
national and international competitions and awards prizes.
(Istanbul)
•
Reporters Association Ayd›n Do¤an Culture and Art Gallery (Ankara)
•
Ankara University School of Medicine Ayd›n Do¤an Geriatrics Clinic
•
Kalender Metin Do¤an Soup Kitchen (Kelkit).
113
Focus on Education
In line with its commitment to education, the Ayd›n Do¤an Foundation
supports Education Seminars to help workers improve themselves in the
rapidly changing media industry.
has built general-purpose schools, technical schools, sports facilities and
It also assumes an advisory role in developing and modernizing the content
research centers. It continuously supports the education and training
of media-related education given at technical schools.
provided there.
The Foundation provides financial support to the continuing education
An example of its support of education is the Atatürk University Kelkit
offered to young journalists at the IPI Press Institute, which was founded
Ayd›n Do¤an Technical Institute which, while offering programs in
with the goal of raising the quality of the media sector in Turkey.
accounting, electrical/electronics training and computer programming,
Awards and Competitions
is the first and only institution in Turkey to provide instruction in organic
farming. Together with the Do¤an Organic Farm, the Foundation not only
has been instrumental in developing organic farming in the area but also
The Ayd›n Do¤an Foundation holds national and international competitions
as part and parcel of its social and cultural activities.
offers training and undertakes production at international standards.
The Ayd›n Do¤an Award
The Foundation is committed to the importance of language education.
The Ayd›n Do¤an Award is considered to be one of the greatest and most
Accordingly, it has made a major contribution to English language studies
respected awards in Turkey in the areas of the arts, culture and the
at the Atatürk University Kelkit Ayd›n Do¤an Technical School and the
humanities. It is given to artists and scientists who have won acclaim both
Ayd›n Do¤an Anatolian High School of Communications.
nationally and internationally and have demonstrated success throughout
Equipment and other supplies used in education, such as books and
computers, are also made available to schools.
Support of Media and Related Sectors
their careers.
By awarding the work, self-sacrifice and knowledge of those who strive
for the best in their respective fields, the Foundation aims to raise the
quality of life and culture in Turkey as a whole. Moreover, by recognizing
The Foundation has been active in supporting media studies, encouraging
the individual efforts of these writers, scientists and artists with these
the development and dissemination of new technology and the growth
awards, the Foundation hopes to contribute to their ongoing work.
and development of enterprises active in the sector.
The Award was first given in 1996 to critically acclaimed novelist Adalet
As the latest technology is used to prepare Do¤an Group newspapers,
A¤ao¤lu, for literature. In subsequent years, Professors Do¤an Kuban and
magazines and radio and television programs, the Ayd›n Do¤an Foundation
Emre Kongar received awards in social sciences and humanities; world-
114
The Ayd›n Do¤an Award is considered to be one of the greatest and
most respected awards in Turkey in the areas of the arts, culture and
the humanities. It is given to artists and scientists who have won
acclaim both nationally and internationally and have demonstrated
success throughout their careers.
renowned photographer Ara Güler received awards for visual arts; the
distributed to universities and other related institutions. Those who receive
great poet Melih Cevdet Anday for poetry; Prof. ‹lber Ortayl› in history; the
scholarships and awards from this competition are also given the chance
Ankara State Conservatory for achievements in classical music; Ord. Prof.
to serve as apprentices at DYH.
Sedat Alp and Prof. Altan Çilingiro¤lu in archeology and Yücel Paflmakç›
for work with Turkish folk music.
In 2005, the award for Urban Architecture and the Urban Fabric was
shared by the Project to Renovate the Izmir Konak Square and its Environs
and the Efforts to Improve Kastamonu’s Historical Urban Fabric.
The Ayd›n Do¤an International Cartoon Competition
The art of cartoon combines talent and universal values in a simple
language. The Ayd›n Do¤an Foundation believes that freedom of expression
strengthens democracy in that it represents tolerance, which no modern,
reputable society can be without. This competition is part of the Ayd›n
The jury of the annual competition is composed of internationally well-
Do¤an Foundation’s efforts to create and recognize individuals who respect
known experts. Every year, a special album of award-winning people and
human diversity and differences.
jury members is published and distributed to related institutions and to
libraries.
It is within this framework that the Ayd›n Do¤an International Cartoon
Competition has been held for 22 years and has since become a fixture
The Young Communication Experts Competition
in this international medium of expression. Some 6,000 artists from 94
For many years, the Young Communication Experts Competition has been
countries representing a plethora of cultural pasts and worldviews have
held by the Ayd›n Do¤an Foundation to create a milieu in which guidance
participated in this contest over the years, contributing more than 51,000
can be provided to young people working in the field of communications
works. In what has become a tradition a special album containing the
and where they can develop their skills and creativity. It is the goal of the
work of these artists is published each year.
Foundation to encourage continuous improvement and contribute to the
training of university students, thus enabling them to assume roles of
modern leadership in the media industry.
Award-winning cartoons and those receiving special mention are exhibited
both domestically and abroad. These exhibitions, which have been held
in nearly every province of Turkey, have also gone to Japan, the Republic
This competition is open to all undergraduates enrolled in universities
of Moldova, the People’s Republic of China, the Turkish Republic of
recognized by the Council for Higher Education. Students compete in the
Northern Cyprus, Greece, Pakistan, and Romania, where they attracted
categories of written, visual, audio, advertising, public relations and Internet
a great deal of interest.
broadcasting. Through this competition, many promising young people
have attained recognition and have found positions in the sector concurrent
The Foundation is also working to establish a digital caricature archive
with their talent.
for an Internet cartoon museum. Once completed, lovers of art as well as
The jury for this competition is made up of executives from Do¤an Yay›n
researchers will be able to access the cartoons archive via the Internet.
Holding (DYH) and other experienced and well-known individuals working
Using the synergy between the Do¤an Group companies, the Ayd›n Do¤an
in the field of communications. Every year, an album containing the works
Foundation aims to be a model for corporate social responsibility effort
for which awards have been received is published. In addition to being
everwhere. The Foundation shares information with the public about its
presented to students in recognition of their achievements, the album is
completed and ongoing activities at its website www.aydindoganvakfi.org.tr.
115
23rd Ayd›n Do¤an International Cartoon Competition, 1st prize
21st Ayd›n Do¤an International Cartoon Competition, 1st prize
22nd Ayd›n Do¤an International Cartoon Competition, 1st prize
116, 117
Principles of Corporate Governance
Compliance Report
May 2006
118
CONTENTS
1.
PAGE
DECLARATION OF COMPLIANCE WITH PRINCIPLES OF CORPORATE GOVERNANCE
119
CHAPTER I – STAKEHOLDERS
120
2.
Stakeholder Relations Unit
120
3.
Exercise of the Right to Information by Shareholders
120
4.
General Meeting Information
120
5.
Voting Rights and Minority Rights
121
6.
Distribution of Dividends and Timing of Distribution
121
7.
Transfer of Shares
122
CHAPTER II - TRANSPARENCY AND PUBLICATION OF INFORMATION
122
8.
Company Information Policy
122
9.
Special Announcements
122
10.
Company Web Site and Content
123
11.
Real Persons Holding Shares
123
12.
Individuals with Access to Inside Information
124
CHAPTER III – BENEFICIARIES
124
13.
Keeping Beneficiaries Informed
124
14.
Beneficiaries’ Participation in Administration
124
15.
Human Resources Policy
124
16.
Customer and Supplier Relations
125
17.
125
CHAPTER IV - BOARD OF DIRECTORS
126
18.
126
Structure of the Board of Directors, its Composition and Independent Members
19.
Qualifications for Members of the Board of Directors
126
20.
Mission, Vision and Strategic Goals of the Company
126
21.
Risk Management and Internal Audit Mechanism
126
22.
Responsibilities and Authority of Board Members and Other Administrators
127
23.
Board of Directors’ Activities
127
24.
Conducting Transactions for the Company and the Ban on Competition
128
25.
Ethics Rules
128
26.
Number, Structure and Independence of Committees Established by the Board of Directors
128
27.
Financial Rights Accorded the Board of Directors
128
119
1.
DECLARATION OF COMPLIANCE WITH PRINCIPLES OF CORPORATE GOVERNANCE
Do¤an Holding has embraced the concepts of fairness, transparency, accountability and responsibility and aims to fully adhere to these Principles
of Corporate Governance. The completion of ongoing pursuits regarding the Principles of Corporate Governance, the rules of ethical conduct and
Company bylaws is in progress and is set to be completed within the year 2006.
No conflict of interest has arisen among interest holders due to principles that have yet to be implemented.
Details on the implementation of these principles in the operating cycle ending Dec. 31, 2005 are included in the appendix.
Tufan Darbaz
Member Plenipotentiary and CEO
120
CHAPTER I - STAKEHOLDERS
2.
In order to provide information to institutional investors who are
domiciled abroad, visits were organized in 2005 to London and New
Stakeholder Relations Unit
York, both cities such investors are concentrated. At the same time,
2.1. Shareholding rights are exercised in accordance with the relevant
in October, an information meeting was organized in Göcek which
legislation, Company bylaws and other inter-company rules. All
provided an opportunity for participating foreign institutional investors
necessary steps have been taken to ensure the ability to exercise
to meet company management face to face.
these rights.
In addition, the CEO informs the public of the Company’s operational
2.2. The Stakeholder Relations Unit has been introduced to monitor
results through a yearly message published both in the Annual Report
relations between stakeholders and the Company and to ensure that
and on the Company’s website.
stakeholders receive information on the Company. The unit is tasked
Moreover, the Investors Relations Department, using the website
with the following:
address www.doganholding.com.tr, regularly provides shareholders
a) Ensuring the clarity, security and timeliness of stakeholder records;
with updated information about the Company, both in English and
b) Responding to stakeholder questions concerning the Company
Turkish.
except those that constitute a trade secret or privileged information;
2.5. Utmost care is taken to meet requests and comply with the law and
the Articles of Association. No written or oral complaint has reached
c) Ensuring that General Meetings are held in accordance with
relevant legislation, Company bylaws and other inter-company
the Company in 2005 with respect to the exercise of shareholders
rules;
rights, nor has there been, to our knowledge, any administrative or
legal proceedings initiated against the Company.
d) Preparing documents for use by stakeholders at General Meetings;
3.
Exercise of the Right to Information by Shareholders
e) Maintaining records of votes and disclosing such results to
stakeholders;
3.1. No distinction is made among stakeholders as regards the exercise
of the right to information.
f) Monitoring a wide range of issues including legislation as well as
determining the Company’s Information Policy;
3.2. Over 500 requests for information were received either directly or
indirectly from stakeholders in 2004 primarily concerning financial
g) Ensuring that capital markets financial activities are carried out;
and strategic developments announced by the Company. All
and
information requests from stakeholders were fulfilled without delay
in 2005.
h) Ensuring that investor relations activities are conducted.
The Stakeholder Relations Unit will be linked functionally to the Corporate
3.3. Financial information, news and presentations are published on the
Company’s Web site. Stakeholders submitting requests for information
Governance Committee and administratively to the CFO in 2006.
are directed to the Company Web site where information and
2.3. Representatives from the Financial Affairs, Legal and Budgeting and
documentation are equally presented for the use of stakeholders.
Finance divisions operate under the CFO’s oversight within the
Stakeholder Relations Unit.
3.4. Although not stipulated by Company bylaws, a special auditor can
be assigned to conduct audits only upon the request of stakeholders
2.4. More than 500 requests for information and inquiries coming in
holding more than a 5 percent stake in the Company. However, no
directly or indirectly from shareholders or investment firms were
demand for a special auditor has been submitted to the Company.
answered to in 2005. Pertinent information and documents that were
not confidential and did not constitute trade secrets were provided
to shareholders without any discrimination.
4.
General Meeting Information
4.1. The Company’s ordinary General Meeting for 2004 was held on
Adopting a proactive approach in its dealings with shareholders, the
August 11, 2005. Invitations to the meetings were published, as
Shareholder Relations Unit issues, in addition to public announcements
stipulated by the bylaws, in Milliyet newspaper and in the Turkish
and material disclosures, messages from management and information
Trade Registry Gazette. In addition, invitations from the Board of
on corporate strategies to shareholders at regular meetings organized
Directors were delivered to stakeholders holding registered shares
with brokerage houses. Over 30 meetings with brokerage houses
in accordance with Turkish commercial law within the time stipulated.
have so far been organized at Do¤an Holding headquarters.
4.2. The method of holding general meetings ensure maximum stakeholder
attendance.
121
4.3. General Meetings are conducted in line with the principle of fairness
5.6. The stakeholders made no proposals demanding representation of
so as to cause the least uncertainty and cost for participants.
minority shares in Company administration.
4.4. The ordinary General Meeting was held in Istanbul to facilitate the
5.7. Cumulative voting is not addressed in the bylaws.
attendance of stakeholders.
5.8. Since no two Company stakeholders are involved in a mutual
4.5. Shareholders are not required to register their names on shareholders’
partnership, a vote has not been held at the General Meeting on the
lists within any specific time frame prior to attendance at meetings.
4.6. Documents prepared for the ordinary General Meeting, the 2004
issue of partnerships.
5.9. Although the bylaws permit the trading of dividend shares, there is
Annual Report, internal audits and the Board of Directors’ actions
no instance of the issuance of any dividend shares.
regarding 2004 activities were made available to stakeholders 15
days prior to the meeting. The Stakeholder Relations Unit responded
6.
Distribution of Dividends and Timing of Distribution
to questions from stakeholders following the issuance of invitations.
6.1. No advantage accrues to any individual in the distribution of dividends.
4.7. The agenda is presented in a clear and concise manner so as to be
6.2. The Do¤an Group of Companies Inc. engages in dividend distribution
easily understood by stakeholders, with the opportunity to voice their
in accordance with the Turkish Commercial Law and rates determined
opinions and ask questions.
by the Capital Markets Board (CMB) and the General Meeting within
4.8. The Board responded to stakeholders’ questions on agenda issues
at the ordinary and extraordinary General Meetings.
4.9. It was reported that a note of dissent concerning the donations made
by the Company in 2004 was presented at the Ordinary General
Meeting and this note was entered into the minutes of the General
Meeting in accordance with applicable legislation.
4.10. Voting at General Meetings was made by open ballot.
4.11. General Meeting decisions require the presence of shareholders or
the specified time period.
Accordingly:
Net profit can be calculated by deducting all Company expenditures,
amortization, paid premiums and bonuses that have been paid or
are to be realized, and accrued taxes along with other financial
obligations from total income.
After the losses (if any) from previous years and the amounts
determined by the Capital Markets Board are deducted from net
their proxies representing at least half of the Company’s capital. 59%
income, reserves set at 5% by the Turkish Commercial Law and other
of the capital was present at the Ordinary General Meeting..
relevant regulations and the principle revenue share at the rate and
4.12. Minutes of the General Meeting were made available at Company
amount determined by the Capital Markets Board are allocated.
headquarters and were faxed to shareholders upon request.
The General Meeting is authorized to determine, in accordance with
4.13. General Meetings were attended by shareholders, Company employees
the dividend distribution policy of the Company, whether the remainder
and independent auditors, but not by other stakeholders or the media.
4.14. There is no provision in the Company’s Articles of Association that
5.
is to be considered money held in reserve or distributed.
One-tenth of the amount obtained by reducing the 5 percent of capital
requires decisions on matters such as spin-offs or the sale, purchase
from the funds to be distributed among shareholders and other
or leasing of material assets to be taken by the General Meeting.
persons with a share in profits will be considered money in reserve
Voting Rights and Minority Rights
5.1. In an attempt to avoid difficulties in the exercising of the right to vote,
the Company seeks to facilitate the exercise of this right in the easiest,
simplest and most appropriate way.
as determined by Paragraph 3 of the second section of Article 466
of the Turkish Commercial Law.
According to the law, unless the required amount of funds is reserved,
or unless the primary profit share to be distributed to the shareholders
in the form of cash and/or shares is distributed, no decision on
5.2. There is no privilege accorded to any share.
transferring profits to the next year or paying dividends to preferred
5.3. Every share carries the right to one vote in the Company.
shareholders or to other shareholders, members of the board or
employees can be made.
5.4. Regulations do not allow the stakeholder to vote at a specified time
following the date of acquisition.
6.3. The Company’s dividend policy for 2006 and subsequent years has
been defined as follows:
5.5. No article in the Company bylaws prohibits proxy voting.
122
“Profit shall be distributed in cash and/or as bonus shares in a way
8.4. An extensive statement on Company’s Information Policy will be
that will optimize the Company’s financial position within the context
of the legislation it is required to comply with, its growth strategy,
announced to the public in 2005.
8.5. Members of the Board of Directors, administrators and stakeholders
investment and financing needs in the industry, as well as conditions
holding 5 percent of capital either directly or indirectly disclose
in the national and international economy.” This has been announced
transactions made on the financial instruments of the Company in
to the public in accordance with CMB Decision No. 4/67 dated
accordance with Capital Markets legislation.
January 27, 2006, disclosed in the Annual Report and communicated
to shareholders at the Ordinary General Meeting for the year 2005.
8.6. The consolidated financial statements and notes for 2005 are in
conformity with International Financial Reporting Standards and have
6.4. It is also explained in independent auditor’s reports and financial
been prepared in accordance with Decision No. 1604 of the CMB
statements sent to the Istanbul Stock Exchange (ISE) that the
dated December 10, 2004. They are also audited by an independent
distribution of dividends is carried out in accordance with the Turkish
auditor in accordance with International Auditing Standards and
Trade Law and Capital Markets Board legislation.
7. Transfer of Shares
accordingly disclosed to the public.
8.7. The 2005 Annual Report was prepared in compliance with Capital
7.1. The Company bylaws contain no article limiting the transfer of shares.
Markets legislation and Capital Markets Board regulations and
principles.
7.2. The stock registry is of fundamental importance in the determination
of the holders of registered shares. Stock registry recordings are
carried out by decision of the Board of Directors.
9.
9.1. The Company abides by Capital Markets legislation, CMB and ISE
7.3. All stakeholders including minority and foreigner shareholders are
treated equally.
regulations, and CMB principles.
9.2. The Company issued 54 material disclosures in 2005.
CHAPTER II - TRANSPARENCY AND PUBLICATION OF INFORMATION
8.
Special Announcements
Company Information Policy
8.1. The aim of the Company’s Information Policy is to ensure the fast,
accurate and reliable disclosure of financial and non-financial
The CMB and the ISE have asked for five additional disclosures with respect
to the material disclosures made by the Company.
All material disclosures were made within the relevant timeframe.
9.3. The Company has determined and announced the individuals
information related to the Company with the exception of information
authorized to issue special announcements and these are made
that is classified as a trade secret and undisclosed information to the
under their signature.
public.
9.4. The Company is under no other abligation to inform the public since
8.2. In order to fulfill this goal, the Company holds informational meetings
the Company has no shares listed on foreign stock exchanges.
in addition to issuing Special Announcements. The meetings are
held with the participation of investors, analysts and the media.
In conjunction with this, the CEO and members of the Board of
Directors and other top executives of the Holding attend these
meetings to make presentations. In addition, Company reports are
published on the Company’s Web site.
8.3. The Financial Affairs Group is tasked with informing the public and monitoring all related issues associated with this task. Those authorized to
disseminate the Company’s Information Policy are:
Name
Title
Tel
E-mail
Ahmet ‹. Karacahisarl›
Financial Affairs Group President
(216) 556 93 44
akaracahisarli@doganholding.com.tr
Cem Kölemeno¤lu
Budgeting and Finance Division Head
(216) 556 93 44
cemk@doganholding.com.tr
Hande Özer
Financial Control Division Manager
(216) 556 92 59
handeo@doganholding.com.tr
Cengaver Y›ld›zgöz
Budgeting and Finance Specialist
(216) 556 92 73
cengavery@doganholding.com.tr
In responding to questions from various interest holders the balance of equal opportunity is maintained with the utmost care.
123
10.
Company Web Site and Content
f) Activities
• Social responsibilities
10.1. The Company’s Web site, www.doganholding.com.tr, has actively
been instrumental in informing the public.
• Ayd›n Do¤an Foundation
10.2. Periodic financial statements, independent auditor’s reports and
annual reports have been published on the Web site as required by
the applicable CMB legislation, Number XI, 25.
10.3. An English-language version of the documents and information is
also available for the convenience of foreign investors.
g) Customer Relations
• CEO’s office, 24/7 access information
10.5. Information not included on the Web site and the reasons for its
exclusion are as follows:
a) Information related to privileged shares; there are no privileged
stakeholders.
10.4. Information provided on the Web site is as follows:
a) Institutional
b) Commercial registry information, Company bylaws, special
announcements, explanatory statements and public offering
circulars, the proxy form, General Meeting agendas, statements
reflecting increases in the Company’s capital, dividend statements,
minutes of Board of Directors’ meetings that could influence the
value of financial instruments, buy and sell transactions carried
out by members of the Board of Directors and other administrators,
codes of ethics. Documentation regarding these items is currently
being drafted and will be released upon completion of the necessary
procedures.
• Organizational structure
• Board of Directors (Board of Directors, auditing committee,
executives)
• Mission statement (mission and fundamental values)
• Corporate Governance (Declaration of Compliance with the
Principles of Corporate Governance)
• Shareholder structure
• Access (communication and transportation information)
c) Although there is no “Frequently Asked Questions” section on
the Web site, those wanting to obtain more information can contact
the CEO of the Company 24 hours a day by e-mail at
ceooffice@doganholding.com.tr in the Customer Relations section.
Responses are provided to all questions submitted to the addresses
provided by questioners in accordance with the principle of
equality.
b) Sectors
• Affiliates and subsidiaries
• Group company Web sites
c) News
• Press reports
10.6. The Web site is listed on the Company’s letterhead stationery.
• Interviews
11.
d) Human Resources
• Mission
Real Persons Holding Shares
11.1. Amendments to the capital structure and/or administration of the
Company are announced to the public in accordance with Capital
Markets legislation and CMB regulations.
• Online CVs
• Employment statistics
e) Investor Relations
11.2. The shareholder structure of the Company as of Dec. 31, 2005 was
as follows:
Stakeholders
Share Capital (YTL)
Share (%)
• Stock profile (Performance of the Holding and its publicly traded
subsidiaries and the corporate structure of the Holding, affiliates
and subsidiary shares)
Adilbey Holding A.fi.*
382,349,868
52.00%
Free Float
252,131,806
34.29%
• Financials (Audited financial statements and independent
auditor’s reports)
Ayd›n Do¤an
56,694,341
7.71%
Ifl›l Do¤an
12,092,273
1.64%
• Presentations and reports (Financial performance and strategy
presentations and reports published by intermediaries)
Ayd›n Do¤an Vakf›
1,404,264
0.20%
Arzuhan Yalç›nda¤
7.653.914
1.04%
Vuslat D. Sabanc›
7.653.914
1.04%
Hanzade V. Do¤an
7.653.914
1.04%
Y. Begümhan D. Faralyal›
7.653.914
1.04%
735,288,208
100%
• Annual reports: (Current and past annual reports)
• List of analysts (Names of analysts responsible for the Company
in intermediary institutions)
• Communication (Contact numbers for the Stakeholder Relations
Unit)
Total Share Capital
124
The shareholder structure of the Company’s main shareholder, Adilbey
Holding A.fi., as of Dec. 31, 2005 was as follows:
Alper Alt›ok
Accounting and Administrative Affairs Manager
Hande Özer
Financial Control Manager
Stakeholders
Share Capital (YTL)
Share %
Cengaver Y›ld›zgöz
Budgeting and Finance Specialist
Ayd›n Do¤an
72,800,000
26.0
Memduh Coflkuner
Company Auditor
Ifl›l Do¤an
41,440,000
14.8
Cem Soylu
Company Auditor
41,440,000
14.8
Mustafa ‹bifla¤ao¤lu
Certified Financial Consultant
Vuslat D. Sabanc›
41,440,000
14.8
Bayram Ali Karakan
Certified Financial Consultant
Hanzade V. Do¤an
41,440,000
14.8
Arzu Karakad›o¤lu
Secretary of the Board of Directors
Y. Begümhan D. Faralyal›
41,440,000
14.8
Esra Dinleriz
280,000,000
100
Elvan Ataol Çiftçi
Hülya Yataas›
Total Share Capital
11.3. It is to the knowledge of the Company that stakeholders have not
entered into any contractual voting agreement on matters pertaining
to the Company.
Independent Auditors
12.
CHAPTER III - BENEFICIARIES
Individuals with Access to Inside Information
12.1. The chairman of the Board of Directors and its members, auditors,
the Stakeholder Relations Unit, top executives of the holdings and other
persons who have access to inside information are prohibited from revealing
knowledge that could be used to the advantage of third parties.
Binnur Tunçözcan
13.
Secretary to the Financial and Affairs Group President
Auditors and Authorized Individuals
Keeping Beneficiaries Informed
13.1. As is explained in detail in the first chapter of this report, stakeholders
and investors are kept informed in accordance with Capital Markets
legislation and CMB regulations.
Persons with access to inside information:
Ayd›n Do¤an
Chairman
‹mre Barmanbek
Deputy Chairperson
Vural Ak›fl›k
Deputy Chairperson
Tufan Darbaz
Member Plenipotentiary and CEO
Member
Vuslat Do¤an Sabanc›
Member
Hanzade Do¤an
Member
Mehmet Ali Yalç›nda¤
Member
Refik Aras
Member
Taylan Bilgel
Member
Ertu¤rul Tuncer
Member
13.2. The beneficiaries of the Company-shareholders, investors, financial
institutions and suppliers-can access Company information via the
Web site along with presentations and details of informational meetings.
13.3. The Company also has an intranet site that is only accessible by
employees.
14.
Beneficiaries’ Participation in Administration
14.1. A continuous communication between the Company and its
beneficiaries is maintained to assess demands conveyed to the
Company and to find solutions to problems.
14.2. There is no regulation that provides for the participation of beneficiaries
in the Company’s administration..
14.3. Employees are kept apprised of the general activities of the Company,
and their suggestions are evaluated via the intranet Web site.
Sema Do¤an
Tourism Group President
15.
Yahya Üzdiyen
Strategy Group President
15.1. The basic principles of the Company’s human resources policy can
be summarized as follows:
Reha Müstecapl›o¤lu
Ahmet ‹zzet Karacahisarl›
Ahmet Ça¤lar
Yener fienok
Cem Kölemeno¤lu
Selma Uyguç
‹pek ‹lter
Ali R›za Karakullukçu
Human Resources Policy
Audit Group President
Financial Affairs Group President
Industry Group President
Head of Fiscal Division
Head of Budgeting and Finance Division
Head of Legal Division
Corporate Relations, Communications and
Human Resorces Group President
Audit Group Manager
a) There is no discrimination based on race, ethnic origin, nationality
or sex in the Company’s human resources policy. People, who
are regarded as equal, are afforded equal opportunity under equal
working conditions. Remuneration is based on employee
performance and an open door policy is employed at all times.
b) Company administrators are selected from among candidates
proven to possess the necessary professional qualifications.
c) Employees are given the opportunity to work in a healthy and
secure work environment and are afforded career advancement
opportunities.
125
15.2. The human resources unit of the Company has been carrying out its
work in accordance with the principles mentioned above. The details
of the Company’s human resources policy will be included in the
ethics rules that are to be published.
15.3. The Company maintains its relations with its employees through its
Human Resources Division. A system of appointing employee
representatives to conduct employee relations with the Company
does not exist.
15.4. No complaints of discrimination have been filed by employee.
16.
Customer and Supplier Relations
16.1. The actual activity of the Company is to invest in and form partnerships
in its main areas of involvement of finance, media, energy,
telecommunications, tourism, industry and commerce. The Group
also provides finance, project development, organization, marketing,
administrative consulting and internal auditing services to its
subsidiaries. Since the Company is a holding, its customers and
suppliers generally consist of business partners.
16.2. In addition to meeting the needs of our business partners, the services
provided them are designed to create value for the Group’s companies.
Services are provided to business partners in accordance with market
prices.
17.
17.1. The Company is determined to protect natural resources and prevent
pollution of the environment while carrying out its various activities.
17.2. Within the context of corporate social responsibility, the Company
has invested in Do¤an Organic Products in Gümüflhane, which has
been recognized for its contributions to the region and pioneering
activities in organic agriculture. The project, friendly to natural
resources and highly observant of environmental principles and
animal rights, contributes significantly to the development of the
region with its “contractual farming” project. This investment is
considered to be a leading regional development project in Turkey.
17.3. Do¤an Holding, cognizant of its social responsibilities, participates
in joint projects with nongovernmental organizations either through
its subsidiaries or under the aegis of Do¤an Holding. The Company
encourages and promotes volunteerism and social responsibility.
17.4. In addition, the activities of the Ayd›n Do¤an Foundation support the
development of Turkey in several areas:
a) The Ayd›n Do¤an Foundation was established in 1996 to undertake
investments, engage in activities and support work conducive to
the creation of a strong, modern and respected society in Turkey,
to help people administer to their needs and solve their own
problems, to provide the basic tools and give them the opportunity
to access impartial and accurate information, and to develop the
country’s educational and cultural level. In order to achieve these
aims, the Foundation contributes to development and improvement
of education, culture, art, health, sports, science and the economy.
It supports and invests in projects in these fields.
b) Aware that eliminating the problems of education in Turkey is
crucial to the achievement of the above goals, the Ayd›n Do¤an
Foundation engages in several educational investments in various
regions of the country. Toward this end, the Foundation builds
schools, vocational schools, sports facilities and research centers
and provides many schools with educational materials and supplies
such as computers and books.
Some of the education projects of the Ayd›n Do¤an Foundation were
the Sema Ifl›l Do¤an Elementary School in Gümüflhane, the Atatürk
University Elementary School in Erzurum, the Ayd›n Do¤an Elementary
School in Istanbul, The ‹rfani-Yaflar Do¤an Multi-program Boarding
High School in Kelkit, the Milliyet Anatolian Teacher’s High School
in Erzincan, the Hürriyet Anatolian Hotel Administration Vocational
School in Erzincan, the Ayd›n Do¤an Communications School in
Istanbul and the Atatürk University Kelkit Ayd›n Do¤an Vocational
College in Kelkit.
The Atatürk University Kelkit Ayd›n Do¤an Vocational College, besides
offering courses in accounting, electricity, electronics and computer
programming, is Turkey’s first and only school providing education
in organic agriculture. The school’s educational program cooperates
with the Do¤an Organic Facilities which engages in production in the
region.
In 2005, the Ayd›n Do¤an Foundation donated 1600 computers to
elementary schools in Gümüflhane, Bayburt, Erzincan and Tunceli
as part of the “Full Support to Education” project organized by the
Ministry of Education.
The foundation spends 80% of its core budget on education. In this
context, the Board of Directors decided in 2005 to build five women’s
dormitories in the districts of Kürtün, Köse and Kelkit in the provinces
of Erzurum, Erzincan and Gümüflhane, respectively. Efforts to
implement these decisions have been initiated.
The foundation believes in the importance of language instruction
and in this context, English language instruction conducted by nativespeakers is available at the Kelkit Ayd›n Do¤an Vocational College
and at the Ayd›n Do¤an Communications School.
The foundation also contributes to the development of gifted students
through the Afyon Ayd›n Do¤an Science and Arts Center.
c) The Ayd›n Do¤an Foundation also provides financial support to
the construction of sports facilities. A large sports complex has
been built in Gümüflhane, and its administration turned over to
the Youth and Sports General Directorate (Gümüflhane Ayd›n
Do¤an Sports Hall).
d) Some other facilities contributed by the Ayd›n Do¤an Foundation
for the benefit of the public are Galatasaray University Ayd›n Do¤an
Auditorium (Istanbul), Sports Writers’ Association of Turkey Ayd›n
Do¤an Training Center (Istanbul), the Journalists Association Ayd›n
Do¤an Culture and Arts Gallery (Ankara), Ankara University Medical
School Ayd›n Do¤an Geriatrics Clinic (Ankara) and Kalender Metin
Do¤an Soup Kitchen (Kelkit).
126
e) As part of its social and cultural activities, the Ayd›n Do¤an
Foundation organizes national and international competitions such
as the “Young Communicators Award”, the “Ayd›n Do¤an Awards,”
and the “Ayd›n Do¤an International Cartoon Contest.”
f) The foundation also organizes national and international
conferences, congresses and seminars in an effort to find solutions
for economic, social, cultural and scientific issues. It encourages
research in these areas, publishing research results as well as
books on media work.
19.
Qualifications for Members of the Board of Directors
19.1. The qualifications of the Members of the Board of Directors are in
compliance with the Capital Market Board’s Principles of Corporate
Governance as enumerated in Articles 3.1.1., 3.1.2. and 3.1.5. of
Chapter IV.
19.2. Although there are no articles specifying qualifications for members
of the Board of Directors, the Company strives to ensure that Board
members:
a) Hold a college degree;
17.5. Do¤an Holding is one of the founders of the Corporate Governance
Association of Turkey (TKYD), an organization that works to create
high-performance, competitive, well-managed corporations that
generate maximum shareholder value. Closely interested in designing
small-scale projects focusing on “people” and creating repeatable
models, the foundation is also a member of the World Business
Council for Sustainable Development, an organization that aims to
contribute to growth in the least-developed regions of Turkey.
b) Possess a high level of competence and knowledge;
c) Are experienced and informed in the fields in which the Company
is active;
d) Are sufficiently competent to read and analyze financial statements
and reports;
CHAPTER IV - BOARD OF DIRECTORS
e) Are knowledgeable regarding the legal regulations to which the
Company is subject;
18.
f) Have never been convicted of violating regulations; and
Structure of the Board of Directors, its Composition and Independent
Members
18.1. There are eight non-executive, one independent and two executive
members on the Board of Directors.
18.2. Members of the Company’s Board of Directors:
Position
Executive/Nonexecutive/Independent
Chairman
Non-executive
‹mre BARMANBEK
Deputy Chairperson
Non-executive
Vural AKIfiIK
Deputy Chairperson
Non-executive
Member Plenipotentiary, CEO
Executive
Member
Ayd›n DO⁄AN
g) Are able to attend board meetings.
20.
Mission, Vision and Strategic Goals of the Company
20.1. Our mission is to create value for our stakeholders, business partners,
employees and country through transforming new opportunities into
successes. Balanced and sustainable growth along with satisfactory
profit are the cornerstones of this mission. The mission of the Company
has been published on its website.
20.2. The strategic goals determined by the top management of the
Company in accordance with the plans of the Company are presented
to the approval of the Board of Directors prior to authorization.
Arzuhan YALÇINDA⁄
Member
Non-executive
Vuslat SABANCI
Member
Non-executive
20.3. The Board of Directors, through monthly meetings, assesses whether
the Company has reached previously determined goals. The results
of Company activities and its performance are evaluated in detailed
reports.
Hanzade DO⁄AN
Member
Non-executive
21.
Mehmet Ali YALÇINDA⁄
Member
Executive
Refik ARAS
Member
Non-executive
Taylan B‹LGEL
Member
Independent
Ertu¤rul Feyzi TUNCER
Member
Non-executive
Tufan DARBAZ
18.3. The duties of Chairman of the Board of Directors and CEO are
executed by two separate persons in this Company.
18.4. Company bylaws stipulate that members of the Board of Directors
be limited to a three-year term in office. Members are elected at the
annual General Meeting.
18.5. Some of the members of the Board of Directors also sit on the Board
of Directors of subsidiary companies.
18.6. Brief biographies of the members of the Board of Directors are
published on the Company’s website and Annual Report.
Risk Management and the Internal Audit Mechanism
21.1. The task of internal control is performed by the Auditing Group
Presidency which reports to the CEO.
The main duty of the Auditing Group Presidency is to protect the
rights and interests of Do¤an fiirketler Grubu Holding A.fi., its
subsidiaries and shareholders, by developing suggestions to reduce
internal and external administrative risks, to inspect and audit
operations and procedures to ensure compliance with Board decisions,
plans, budgets, regulations, procedures, instructions, legislation and
generally-accepted accounting principles.
The Auditing Group Presidency performs its auditing duties in
accordance with the “International Auditing Standards” and the
Internal Control Framework published by the Committee of Sponsoring
Organizations (COSO).
127
21.2. The Audit Group identifies risks inherent in the activities of the Holding
and its subsidiaries in an effort to contribute to the development of
risk management and control systems and monitors the efficiency
of the organizations’ risk management.
The Audit Group submits reports on financial and operational risks
to the Board of Directors from data gathered through its audits. The
Board of Directors also assesses risk and takes appropriate measures.
21.3. Since it is a holding company, the primary risks involve financial
matters and the fiscal performance of its business partners. The
management of financial risk is performed by the Financial Affairs
Group. In addition to the financial risks of business partners, operational
risks are also monitored by group presidents and the CEO.
21.4. In addition, regulations which form a significant part of the internal
audit system have been drafted and put into effect.
22.
q)
Definition of authority and its delegation;
r)
Election of the CEO and assessment of his or her performance;
s)
Determination of the annual business plan and the approval of
staff and budget and all other kinds of decisions impacting
those;
t)
Monitoring the Company’s past performance and activities to
determine whether or not the Company met its goals and taking
measures to prevent a reoccurrence of past problems;
u)
Ensuring that period activities of the Company are in compliance
with Company bylaws, internal rules and policies implemented;
v)
Ensuring that financial statements comply with relevant legislation
and international accounting standards; as well as ensuring their
accuracy.
w) Determination of the Company’s approach to stakeholders and
to public relations; playing a leadership role to solve potential
problems among stakeholders;
Responsibilities and Authority of Board Members and Other
Administrators
22.1. According to the Company bylaws, the Board of Directors manages
and represents the Company. The limit of authority of those authorized
to represent the Company and to collect its revenues is published
in the appropriate forums by the Board of Directors.
x)
Calling the General Meeting and ensuring those meetings are
held in accordance with the law and the bylaws;
y)
Determination of the annual activity reports that are presented
to the General Meeting;
22.2. The authority to perform management tasks and representative
authority can be assigned wholly or partially to individual members
of the Board of Directors by the mandates of the General Meeting or
by the Board of Directors.
z)
Monitoring and auditing implementation of General Meeting
decisions; and
ab) Determination of executive and consultative committees to be
formed within the Company structure.
22.3. The Board of Directors can appoint a CEO to carry out the management
of the Company whose duration on the job may exceed theirs.
23.
22.4. The tasks of Board of Directors are as follows:
23.1. The Board of Directors convenes when necessary, but is required to
hold monthly meetings.
Board of Directors’ Activities
a)
Determining the Company’s institutional philosophy and mission;
b)
Approval of the Company’s vision, targets and strategies;
c)
Exiting a certain sector and entering others;
d)
Establishment of and participation in companies as well as their
purchase, sale, merging or closing down; participation in and
withdrawal from partnerships;
e)
Buying and selling of real estate;
a) Determination of fields of activity and approval of business and
financial plans;
f)
Approval of salary and bonus policies;
b) The call for a General Meeting and organization of the meeting;
g)
Approval of dividend distribution policies;
h)
Allocation, increase or reduction of capital;
c) Determination of the annual report that will be disclosed at the
General Meeting;
i)
Approval of borrowing policy;
j)
Approval of rules of ethics governing companies and employees;
k)
Approval of communication and information policies;
l)
Formation of administrative units and termination of their activities;
m) Ensuring the performance of administrative and financial auditing;
23.2. All decisions made by the Board of Directors are recorded in the
registry book.
23.3. In accordance with Article 2.17.4 of Chapter IV of the CMB Principles
of Corporate Governance,the physical presence of the members of
the Board of Directors are called upon the following topics:
d) Election of the Chairman and Deputy Chairperson of the Board
of Directors and the appointment of new members;
e) Formation of administrative units or termination of their activities;
f) Appointing or removing a CEO from the office;
g) Formation of committees;
n)
Approval of administrative activity procedures;
h) Merging, divesting and restructuring of the Company;
o)
Approval of a consolidated budget;
p)
Approval of subsidiaries’ budgets and the monitoring and
assessment of their performance;
i) Determination of dividend policy and determination of dividends
to be paid; and
j) Determination of increases and reductions in capital.
128
23.4. The Board customarily meets at Company headquarters but can
convene in another venue upon a decision of the Board of Directors.
23.5. The members of the Board of Directors are assured to access any
type of information to carry out their tasks. Issues to be discussed
at Board meetings are conveyed to members prior to each meeting
along with the agenda.
25.
The Company has formulated its code of ethics and it will be
published in 2006.
26.
Number, Structure and Independence of Committees Established
by the Board of Directors
a) Reading of the minutes of the previous meeting;
26.1. The Company has established an Audit Committee to ensure that
the Board of Directors successfully performs its tasks in accordance
with Capital Markets Board legislation.
b) Information on actions taken at the previous meeting;
26.2. Members of the Audit Group Division:
23.6. The ordinary agenda of the Board of Directors is as follows:
Taylan Bilgel: Member of the Board of Directors, independent
member
c) Economic developments;
d) Legal developments;
Ertu¤rul Tuncer: Member of the Board of Directors, non-executive
member
e) Company performance;
f) Financial condition of the Company; and
g) General assessment.
Moreover, in the presence of the circumstances described below, such
issues will also be on the Board’s agenda:
a) Developments in investment projects;
b) Approval or rejection of investments;
c) Changes in the market value of assets;
26.3. Audit Committee members possess qualifications enabling them
to perform their duties and were selected from among the nonexecutive members of the Board who are not also members
plenipotentiary.
26.4. The Audit Committee conducts its activities regularly in accordance
with Capital Markets legislation and the Capital Market Board’s
Principles of Corporate Governance. In conjunction with this, in
2004:
a) The Company’s annual/interim financial statement and footnotes
and independent auditor’s reports were all examined prior to
public release; and
d) Personnel salary policy;
e) Evaluation of audits;
f) Discussions of the annual budget and business plan;
b) Independent auditor’s contracts with the Company and its
subsidiaries and on shares to be publicly traded on the Istanbul
Stock Exchange were all examined.
g) Determining fiscal policy; and
h) Determining dividend distribution policy.
23.7. The Legal Affairs Division serves as Secretariat to the Board of
Directors.
23.8. Since all decisions made by the Board of Directors have been the
result of a unanimous vote, there has been no need to vote on
differing proposals offered by members at the meetings. In addition
because they are in constant contact, no questions were raised by
members that required note in the registry.
23.9. The members of the Board of Directors have no privileged voting
rights including the right to veto.
23.10. Board of Directors’ travel/meeting costs, special demands of their
work and similar expenses are funded by the general budget without
limitation.
24.
Ethics Rules
Conducting Transactions for the Company and the Ban on
Competition
The required permission is granted by the General Meeting for members
of the Board of Directors to carry out transactions specified in Articles 334
and 335 of the Turkish Commercial Law, except for the those expressly
prohibited by the same law.
26.5. The Audit Committee holds meetings at least four times a year and
presents its decisions to the Board of Directors in written format.
26.6. The Audit Committee is acting within the limits of its authority and
responsibilities and advises the Board of Directors. However, final
decisions are made by the Board of Directors.
26.7. Work is underway for the formation of a Corporate Governance
Committee.
27.
Financial Rights Accorded the Board of Directors
27.1. According to the Company bylaws remuneration to be paid the
Board of Directors as compensation for their services is to be
determined at the General Meeting.
27.2. The performance of the Company is taken into consideration in
determining the financial rights to be accorded to Board of Directors.
27.3. Members of the Board of Directors do not receive loans from the
Company either in cash or in any other form. They are also not
authorized to offer any guarantee in favor of or co-sign along with
any member.
CONVENIENCE TRANSLATION INTO ENGLISH OF INDEPENDENT
AUDITOR’S REPORT ORIGINALLY ISSUED IN TURKISH
DO⁄AN fi‹RKETLER GRUBU HOLD‹NG A.fi.
INDEPENDENT AUDITOR’S REPORT FOR THE PERIOD 1 JANUARY-31 DECEMBER 2005
To the Board of Do¤an fiirketler Grubu Holding A.fi.
1. We have audited the accompanying consolidated balance sheet of Do¤an fiirketler Grubu Holding A.fi. (“Do¤an Holding”) at 31 December 2005
and the related consolidated statement of income for the year then ended. Our examination was made in accordance with the auditing
principles issued by the Capital Market Board (“CMB”) and accordingly included such tests of the accounting records and such other auditing
procedures as we considered necessary in the circumstances.
2. In our opinion, the consolidated financial statements, present fairly, in all material respects, the consolidated financial position of Do¤an Holding
at 31 December 2005 and the results of its operations for the year then ended in accordance with the accounting principles issued by the CMB
(Note 2).
Without qualifying our opinion we draw attention to the following matters:
3. As discussed in Notes 2.7 and 45, subsequent to the issuance of financial statements of Türk D›fl Ticaret Bankas› A.fi. (“D›flbank”), a
Subsidiary of Do¤an Holding acquired by Fortis Bank as of 4 July 2005, adjustments have been made to the provision for loan losses related to
the credit cards after issuance of financial statements at 31 December 2004. The effect of these adjustments pertaining to 2004 financial year
was to reduce the retained earnings by YTL 16.871 thousand and was reflected to consolidated financial statements by a reduction in the 2005
opening retained earnings.
4. As discussed in Note 2.7, subsequent to the issuance of financial statements of Petrol Ofisi A.fi. (“POAfi”) at 31 December 2004, which was a
Joint Venture at 31 December 2004 and became a Subsidiary with Do¤an Holding’s current year acquisitions, adjustments were made to the
acquisition costs of certain fixed assets for the application of Tax Law No.5024. The effect of these adjustments pertaining to 2004 financial year
which were realized after the issuance of 31 December 2004 consolidated financial statements amounted to YTL 44.877 thousand (YTL 19.770
thousand with the Do¤an Holding’s ownership interest) and were reflected to the consolidated financial statements through reductions in 2005
opening retained earnings and deferred tax assets.
5. The consolidated financial statements include the accounts of Do¤an Holding, its Subsidiaries and Joint Ventures (Note 2). Subsidiaries are
companies in which Do¤an Holding has the power to control the financial and operating policies for the benefit of Do¤an Holding through the
exercise of voting power relating to shares held by Do¤an Holding and its Subsidiaries together with voting power which Do¤an Holding
effectively exercises relating to shares held by Do¤an family members (the “control basis”) or through the actual exercise of dominant influence.
Joint Ventures are companies in respect of which there are contractual arrangements through which an economic activity is undertaken subject
to joint control by Do¤an Holding and its Subsidiaries and one or more other parties. In effect the Do¤an family members allow Do¤an Holding
to exercise the voting power in respect of their shares held in these companies. In the consolidated financial statements the shares held by
Do¤an family members are treated as minority interest.
6. Additional paragraph for convenience translation into English:
As of 31 December 2005, the accounting principles described in Note 2 (defined as CMB Accounting Standards) to the accompanying financial
statements differ from International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board mainly with
respect to the application of inflation accounting, presentation of the basic financial statements and the notes to them. Accordingly, the
accompanying financial statements are not intended to present the financial position and results of operations in accordance with IFRS.
7. As explained in Note 2.4 to the consolidated financial statements, US dollar (“USD”) amounts shown in the accompanying consolidated
financial statements have been included solely for the convenience of the reader and are translated from New Turkish lira (“YTL”), as a matter
of arithmetic computation only, at the Central Bank of the Republic of Turkey official TL exchange rate of YTL 1,3418=USD 1.00 for purchases
of USD on 31 December 2005. Thus, US dollar amounts do not form a part of the consolidated financial statements prepared in accordance
with generally accepted accounting standards issued by the CMB as at 31 December 2005. Such translations should not be construed as a
representation that the YTL amounts have been or could be converted into USD at this or any other rate.
Baflaran Nas Serbest Muhasebeci
Mali Müflavirlik Anonim fiirketi
a member of
PricewaterhouseCoopers
Haluk Yalç›n, SMMM
‹stanbul, 13 April 2006
132, 133
CONSOLIDATED FINANCIAL STATEMENTS
AT 31 DECEMBER 2005
CONTENTS
PAGE
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED STATEMENTS OF INCOME
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
134-135
136
137
138-204
NOTE
NOTE
NOTE
NOTE
NOTE
NOTE
NOTE
NOTE
NOTE
NOTE
NOTE
NOTE
NOTE
NOTE
NOTE
NOTE
NOTE
NOTE
NOTE
NOTE
NOTE
NOTE
NOTE
NOTE
NOTE
NOTE
NOTE
NOTE
NOTE
NOTE
NOTE
NOTE
NOTE
NOTE
NOTE
NOTE
NOTE
NOTE
NOTE
NOTE
NOTE
NOTE
NOTE
NOTE
NOTE
NOTE
NOTE
NOTE
138-141
142-148
149-158
159
159-161
161-162
163-164
164
164-165
166
166
167
167
167-168
169
169-170
171
172
173-174
175
175
175
176-177
177
177-178
178-179
179
179-180
181-182
182
183-185
185-188
189-193
193
194-195
195
195
196
196
197
197-198
198
199-200
201
201-202
202
203-204
204
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
ORGANIZATION AND NATURE OF OPERATIONS
BASIS OF PRESENTATION OF FINANCIAL STATEMENTS
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CASH AND CASH EQUIVALENTS
MARKETABLE SECURITIES
BORROWINGS
TRADE RECEIVABLES AND PAYABLES
LEASING RECEIVABLES AND PAYABLES
TRANSACTIONS AND BALANCES WITH RELATED PARTIES
OTHER RECEIVABLES AND PAYABLES
BIOLOGICAL ASSETS
INVENTORIES
CONSTRUCTION CONTRACT RECEIVABLES AND PROGRESS BILLING
DEFERRED TAX ASSETS AND LIABILITIES
OTHER CURRENT - NON CURRENT ASSETS AND OTHER CURRENT - NON CURRENT LIABILITIES
FINANCIAL ASSETS
GOODWILL / NEGATIVE GOODWILL
INVESTMENT PROPERTY
PROPERTY, PLANT AND EQUIPMENT
INTANGIBLE ASSETS
ADVANCES RECEIVED
RETIREMENT PLANS
PROVISIONS
MINORITY INTERESTS
CAPITAL/ ADJUSTMENT TO SHARE CAPITAL
CAPITAL RESERVES
PROFIT RESERVES
RETAINED EARNINGS
FOREIGN CURRENCY POSITION
GOVERNMENT GRANTS
PROVISIONS, COMMITMENTS, CONTINGENT LIABILITIES
BUSINESS COMBINATIONS
SEGMENT REPORTING
SUBSEQUENT EVENTS
DISCONTINUED OPERATIONS
OPERATING INCOME
OPERATING EXPENSES
OTHER INCOME/EXPENSES AND PROFIT/LOSSES
FINANCIAL EXPENSES
NET MONETARY POSITION GAIN/LOSSES
TAXES ON INCOME
EARNING PER SHARE
STATEMENTS OF CASH FLOW
DISCLOSURE OF OTHER MATTERS
ORIGINATED LOANS
DERIVATIVE FINANCIAL INSTRUMENTS
BANKING AND CUSTOMER DEPOSITS
INSURANCE TECHNICAL RESERVES
134, 135
CONVENIENCE TRANSLATION OF FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH
CONSOLIDATED BALANCE SHEETS AT 31 DECEMBER 2005 AND 2004
(Amounts expressed in New Turkish Lira [YTL] unless otherwise indicated.)
2005
Notes
Restated
USD (*)
2005
2004
2.363.376.510
3.171.178.602
6.970.111.826
1.487.663.422
ASSETS
Current assets
Cash and cash equivalents
4
670.222.020
899.303.906
Marketable securities, net
5
43.799.817
58.770.595
1.323.019.288
Originated loans
45
-
-
2.864.985.006
Derivative financial instruments
46
-
-
22.346.175
Trade receivables, net
7
1.048.062.255
1.406.289.934
721.427.975
Leasing receivables, net
8
-
-
80.612.000
Due from related parties, net
9
4.793.856
6.432.396
4.442.645
Other receivables, net
10
56.259.906
75.489.542
68.111.272
Biological assets, net
11
60.358
80.988
167.027
Inventories, net
12
475.586.277
638.141.667
297.836.605
Construction contract receivables, net
13
-
-
-
Deferred tax assets
14
-
-
-
Other current assets
15
Non-current assets
64.592.021
86.669.574
99.500.411
3.603.918.585
4.835.737.955
4.775.318.930
Trade receivables, net
7
10.777.181
14.460.822
8.055.329
Leasing receivables, net
8
-
-
69.565.304
Due from related parties, net
9
-
-
-
Other receivables, net
10
6.827.395
9.160.998
3.365.330
Inventories
12
14.136.982
18.969.002
5.963.500
Originated loans
45
-
-
486.974.450
Financial assets, net
16
3.709.360
4.977.219
1.172.087.736
Goodwill/negative goodwill, net
17
2.093.412.748
2.808.941.225
1.389.003.111
Investment properties, net
18
32.257.487
43.283.096
56.994.746
Property, plant and equipment, net
19
1.179.994.220
1.583.316.244
1.299.929.230
Intangible assets, net
20
155.093.312
208.104.206
83.138.320
Deferred tax assets
14
97.926.181
131.397.349
189.535.584
Other non-current assets
15
9.783.719
13.127.794
10.706.290
5.967.295.095
8.006.916.557
11.745.430.756
Total assets
The consolidated financial statements for the year ended at 31 December 2005, have been approved by the Board of Directors at 13 April 2006 and have been signed on behalf of
the Board of Directors.
(*) As explained in the Note 2.4 to the consolidated financial statements, USD amounts shown in these consolidated financial statements have been included solely for the
convenience of the reader and are translated from YTL, as a matter of arithmetic computation only, at the Central Bank of the Republic of Turkey official YTL exchange rate.
Thus, USD amounts do not form a part of the consolidated financial statements prepared in accordance with generally accepted accounting standards issued by the CMB as
at 31 December 2005.
The accompanying notes form an integral part of these consolidated financial statements.
CONSOLIDATED BALANCE SHEETS AT 31 DECEMBER 2005 AND 2004
2005
USD (*)
2005
Restated
2004
1.923.400.409
2.580.818.667
7.684.581.673
6
6
47
46
8
10
7
9
48
21
13
23. 41
14
15
253.479.126
249.293.993
6.177.155
535.913.536
727.700.701
3.465.621
85.252.874
3.180.331
39.474.254
19.462.818
1.507.502.968
340.118.291
334.502.680
8.288.506
719.088.782
976.428.801
4.650.170
114.392.306
4.267.368
52.966.554
26.115.209
2.022.767.483
1.963.236.710
137.359.921
4.378.172.582
13.344.723
3.085.749
494.351.028
520.021.832
5.532.388
80.359.109
6.240.902
43.458.354
39.418.375
1.115.412.551
Long-term borrowings, net
Banking and customer deposits
Leasing payables, net
Other financial liabilities, net
Trade payables, net
Due to related parties, net
Insurance technical reserves
Advances received
Provisions
Deferred tax liabilities
Total liabilities
6
47
8
10
7
9
48
21
23
14
983.047.644
10.803.924
102.033.421
270.088.108
30.452.954
20.211.072
90.865.845
3.430.903.377
1.319.053.329
14.496.705
136.908.444
362.404.223
40.861.774
27.119.217
121.923.791
4.603.586.150
899.857.009
44.574.000
5.508.190
1.893.478
44.395.171
26.628.076
18.509.562
30.054.866
43.992.199
8.799.994.224
Minority interest
24
590.041.053
791.717.085
974.366.277
24, 33
24, 33
53.956.043
536.085.010
72.398.218
719.318.867
80.406.163
893.960.114
1.946.350.665
2.611.613.322
1.971.070.255
547.986.442
841.280.367
469.724
840.810.643
68.576.749
5.898.860
61.761.786
4.164.065
(3.247.962)
474.255.856
14.251.251
735.288.208
1.128.829.996
630.275
1.128.199.721
92.016.282
7.915.090
82.871.964
5.587.343
(4.358.115)
636.356.508
19.122.328
735.288.208
1.152.641.449
630.275
23.811.453
1.128.199.721
53.956.568
7.915.090
82.871.964
5.587.343
(42.417.829)
263.023.110
(233.839.080)
5.967.295.095
8.006.916.557
11.745.430.756
Notes
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Short-term borrowings, net
Current portion of long-term borrowings, net
Banking and customer deposits
Leasing payables, net
Other financial liabilities, net
Trade payables, net
Due to related parties, net
Insurance technical reserves
Advances received
Construction progress billings, net
Provisions
Other current liabilities, net
Non-current liabilities
Do¤an family members
Other
SHAREHOLDERS’ EQUITY
Share capital
Treasury shares
Capital reserves
Share premium
Share cancellation gains
Revaluation fund
Financial assets fair value reserve
Inflation adjustment to shareholders’ equity
Profit reserves
Legal reserves
Statutory reserves
Extraordinary reserves
Special reserves
Investment and property sales income to be added to the capital
Translation reserve
Current year profit
Accumulated deficit
25
25
26
27
28
Total liabilities and shareholders’ equity
Commitments and contingent liabilities
31
136, 137
CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEARS ENDED 31 DECEMBER 2005 AND 2004
2005
Notes
Restated
USD(*)
2005
2004
Operating income
Sales (net)
36
Cost of sales (-)
Gross operating profit
Operating expenses (-)
37
Net operating profit
7.306.847.067
9.804.327.395
6.519.655.101
(6.685.712.720)
(8.970.889.328)
(5.860.367.262)
621.134.347
833.438.067
659.287.839
(408.908.463)
(548.673.375)
(395.351.421)
212.225.884
284.764.692
263.936.418
Other income and profits
38
460.417.916
617.788.760
196.391.559
Other expenses and losses (-)
38
(140.067.172)
(187.942.131)
(201.596.949)
Financial (expenses)/income - net
39
(4.324.545)
(5.802.674)
(21.212.655)
528.252.083
708.808.647
237.518.373
-
-
124.599.096
528.252.083
708.808.647
362.117.469
(23.365.969)
(31.352.457)
(33.841.249)
504.886.114
677.456.190
328.276.220
(83.020.335)
(111.396.685)
(121.940.253)
206.335.967
Operating profit
Net monetary position gain
40
Income before taxes and minority interests
Minority interests
24
Income before taxes
Taxes on income
41
Net income from continuing operations
421.865.779
566.059.505
Net income from discontinued operations before minority interests
35
60.056.053
80.583.212
72.175.115
Minority interests related to discontinued operations
24
(7.665.978)
(10.286.209)
(15.487.972)
Net income
474.255.854
636.356.508
263.023.110
Weighted average number of shares with face value of YTL 1 each
735.288.208
735.288.208
735.288.208
Basic and diluted earnings/(loss) per share (USD)/(YTL)
0.64
0.87
0.36
- continuing operations
42
0.57
0.77
0.28
- discontinuing operations
0.07
0.10
0.08
-
Net income for the period
735.288.208
-
Financial assets fair value losses
Balances at 31 December 2005
-
-
-
-
735.288.208
-
-
735.288.208
-
735.288.208
Transfers
financial assets fair value reserve
Effects of sale of subsidiary on
translation reserve
Effects of sale of subsidiary on
Currency translation differences
Balances at 1 January 2005
(Notes 2.7 and 17)
of opening negative goodwill
Application of IFRS 3 - correction
Effect of corrections (Note 2.7)
- as restated
Change in accounting policy (Note 2.7)
- as previously reported
735.288.208
-
-
147.057.641
-
588.230.567
-
588.230.567
630.275
-
-
-
-
-
-
630.275
-
-
630.275
-
630.275
630.275
-
-
(426.383)
-
1.056.658
-
1.056.658
premium
capital
Financial assets fair value losses
Transfers
- as restated
Change in accounting policy (Note 2.7)
- as previously reported
Share
Share
(4.358.115)
-
-
-
-
38.311.856
(252.142)
(42.417.829)
-
-
(42.417.829)
-
(42.417.829)
(42.417.829)
-
-
-
(18.749.296)
(23.668.533)
-
(23.668.533)
reserve
-
-
-
-
(23.811.453)
-
-
23.811.453
-
-
23.811.453
23.811.453
-
23.811.453
-
(23.737.305)
-
-
47.548.758
47.548.758
-
reserve
fair value
7.915.090
-
-
-
-
-
-
7.915.090
-
-
7.915.090
-
7.915.090
7.915.090
-
-
-
-
7.915.090
-
7.915.090
reserves
Legal
82.871.964
-
-
-
-
-
-
82.871.964
-
-
82.871.964
-
82.871.964
82.871.964
-
-
(11.361.684)
-
94.233.648
-
94.233.648
reserves
Extraordinary
1.128.199.721
-
-
-
-
-
-
1.128.199.721
-
-
1.128.199.721
-
1.128.199.721
1.128.199.721
-
-
(38.530.666)
-
1.166.730.387
-
1.166.730.387
equity
Translation
assets
shareholders’
Financial
Inflation
adjustment to
-
108.306
-
108.306
fund
increase
-
369.528.894
(66.851.468)
436.380.362
the period
for
Net income
5.587.343
-
-
-
-
-
-
5.587.343
-
-
5.587.343
-
5.587.343
5.587.343
-
-
(23.737.305)
-
-
263.023.110
-
-
263.023.110
23.737.305
239.285.805
263.023.110
263.023.110
-
-
-
-
636.356.508
636.356.508
-
- (239.285.805)
-
-
-
-
-
-
-
-
-
-
-
-
(5.670.102) (108.306) (369.528.894)
-
11.257.445
-
11.257.445
reserves
Other
Cost
Retained
Total
equity
shareholders’
-
263.023.110
(23.737.305)
-
(18.749.296)
-
6.322.111
(36.640.403)
636.356.508
(3.554.863)
-
-
38.311.856
(252.142)
19.122.328 2.611.613.322
-
(3.554.863)
239.285.805
47.548.758
-
-
(264.157.372) 1.940.751.963
6.322.111
(36.640.403)
(233.839.080) 1.971.070.255
(47.548.758)
(186.290.322) 1.971.070.255
(233.839.080) 1.971.070.255
-
-
278.568.394
-
(512.407.474) 1.750.533.746
19.302.710
(531.710.184) 1.750.533.746
deficit
Accumulated
earnings/
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
FOR THE YEARS ENDED 31 DECEMBER 2005 AND 2004
138, 139
AT 31 DECEMBER 2005 AND 2004
NOTE 1 - ORGANISATION AND NATURE OF OPERATIONS
Do¤an fiirketler Grubu Holding A.fi. (“Do¤an Holding” or the “Holding”) was established on 22 October 1980 as a corporation to coordinate the
activities of and liaise between companies operating in different fields including media, energy, telecommunications, tourism, manufacturing and
marketing and is registered in Turkey. Do¤an Holding also provides financial and managerial advisory and internal audit services to its Subsidiaries
and Joint Ventures operating in these fields.
Do¤an Holding is registered with the Capital Markets Board (“CMB”) and its shares have been quoted on the Istanbul Stock Exchange (“ISE”) since
21 June 1993. At 31 December 2005, the shares quoted on the ISE represent 34,29% of the total shares. At 31 December 2005, the principal
shareholders and their respective shareholdings in Do¤an Holding are as follows (Note 25):
Do¤an family and companies owned by Do¤an family
Listed on ISE
%
65,52
34,29
0,19
100,00
The address of the registered office is as follows:
Altunizade, Oymac› Sokak No: 51
Üsküdar 34662 ‹stanbul
The majority of Do¤an Holding is organized in Turkey, and its continuing operations are in three main business segments:
• Media
• Energy
• Other
Other operations mainly comprise of trade, tourism, telecommunications, manufacturing, insurance and construction, none of which is of a
sufficient size to be reported separately.
As explained in Note 35, Do¤an Holding signed an agreement to sell its Subsidiaries in finance segment, which is disclosed as a main business
segment as of 31 December 2004 and before. These Subsidiaries are disclosed as discontinued operations (“Discontinued operations” or “Finance
Segment”). Share transfer of related Subsidiaries was finalised at 4 July 2005.
NOTE 1 - ORGANISATION AND NATURE OF OPERATIONS (Continued)
Do¤an Holding has the following subsidiaries (the “Subsidiaries”). The natures of the business of the Subsidiaries are as follows:
Continuing operations:
Name
Hürriyet Gazetecilik ve Matbaac›l›k A.fi. (“Hürriyet”)
Do¤an Gazetecilik A.fi. (“Do¤an Gazetecilik”)
Yaysat Yay›n Sat›fl Pazarlama ve Da¤›t›m A.fi. (“Yaysat”)
DYG ‹lan ve Reklam Hizmetleri A.fi. (“DYG ‹lan”)
Do¤an Ofset Yay›nc›l›k ve Matbaac›l›k A.fi. (“Do¤an Ofset”)
Do¤an Kitapç›l›k A.fi. (“AD Kitapç›l›k”)
Do¤an Haber Ajans› A.fi. (“DHA”)
Do¤an Bas›m ve Da¤›t›m ‹flleri A.fi. (“Do¤an Bas›m”)
Milliyet Haber Ajans› A.fi. (“Milha”)
GPS Film Prodüksiyon A.fi. (“GPS Film”)
Do¤an Prodüksiyon ve Ticaret A.fi. (“Do¤an Prodüksiyon”)
D Yap›m Yay›nc›l›k ve Reklamc›l›k A.fi. (“D Yap›m”)
Do¤an ‹letiflim Telekomünikasyon Elektronik Servis Hizmetleri
Turizm ve Yay›nc›l›k A.fi. (“Do¤an Online”)
Do¤an Media International GmbH (“DMG”)
D Finans ‹nternet Bilgi Hizmetleri ve Ticaret A.fi. (“D Finans”)
Do¤an Müzik Yap›m ve Ticaret A.fi. (“DMC”)
D Market Elektronik Hizmetler ve Ticaret A.fi. (“D Market”)
Hürriyet Gazetecilik ve Matbaac›l›k A.fi.
Zweigniderlassung Deutcshland (“Hürriyet Zweigniderlassung”)
Do¤an Daily News Gazetecilik ve Matbaac›l›k A.fi. (“Do¤an Daily News”)
Do¤an Da¤›t›m Sat›fl ve Pazarlama A.fi. (“Do¤an Da¤›t›m”)
Milliyet ‹nternet Hizmetleri ve Ticaret A.fi. (“Milliyet ‹nternet”)
Milliyet Verlags und Handels GmbH (“Milliyet Verlags”)
DTV Haber ve Görsel Yay›nc›l›k A.fi. (“Kanal D”)
Do¤an TV ve Radyo Yay›nc›l›k A.fi. (“Do¤an TV”)
Hür-Bim Görsel Yay›nc›l›k A.fi. (“Hürbim”)
Alp Görsel Yay›nc›l›k A.fi. (“Alp Görsel”)
Bravo Televizyon Yay›nc›l›k Yap›mc›l›k Sanayi ve Ticaret A.fi. (“Bravo TV”)
Fun Televizyon Yay›nc›l›k Yap›mc›l›k Sanayi ve Ticaret A.fi. (“Fun TV”)
Galaksi Radyo Televizyon Yay›nc›l›k Yap›mc›l›k Sanayi ve Ticaret A.fi. (“Galaksi Radyo”)
Foreks Yay›nc›l›k ve Reklamc›l›k A.fi. (“Hür FM”)
Ifl›l Televizyon Yay›nc›l›k Yap›mc›l›k Sanayi ve Ticaret A.fi. (“Ifl›l TV”)
Kanalspor Televizyon ve Radyo Yay›nc›l›k A.fi. (“Kanalspor”)
Milenyum Televizyon Yay›nc›l›k ve Yap›mc›l›k A.fi. (“Milenyum TV”)
Radyo Kulübü Uluslararas› Programlar A.fi. (“D Radyo”)
Hürriyet Radyo Prodüksiyon ve Yay›n A.fi. (“Radyo Foreks”)
Tempo Televizyon Yay›nc›l›k Yap›mc›l›k Sanayi ve Ticaret A.fi. (“Tempo TV”)
TV 2000 Televizyon Yay›nc›l›k Yap›mc›l›k Sanayi ve Ticaret A.fi. (“TV 2000”)
DS Servis ‹dari Hizmetler ve Ticaret A.fi. (“DS Servis”)
Nature of
business
Newspaper publishing
Distribution
Advertising
Printing services
Book publishing
News agency
Administrative services
News agency
TV broadcasting
TV broadcasting
Movie/TV Production
Segment
Media
Media
Media
Media
Media
Media
Media
Media
Media
Media
Media
Media
Internet service provider
Internet services
Music and entertainment
Internet services
Media
Media
Media
Media
Media
Newspaper printing
Distribution
Internet services
TV broadcasting
Investment
Information technology
TV broadcasting
TV broadcasting
TV broadcasting
Radio broadcasting
TV broadcasting
TV broadcasting
TV broadcasting
TV broadcasting
Radio broadcasting
Radio broadcasting
TV broadcasting
TV broadcasting
Administrative service
Media
Media
Media
Media
Media
Media
Media
Media
Media
Media
Media
Media
Media
Media
Media
Media
Media
Media
Media
Media
Media
140, 141
Continuing operations (continued):
Nature of
Name
business
Yenibir ‹nsan Kaynaklar› Hizmetleri ve Dan›flmanl›k A.fi. (“Yenibir”)
Internet services
Egeser Servis ve ‹dari Hizmetler Ticaret A.fi. (“Egeser”)
Hür Servis Sosyal Hizmetler ve Ticaret A.fi. (“Hürservis”)
Hür Medya ‹lanc›l›k ve Reklamc›l›k Ticaret A.fi. (“Hürmedya”)
Medyanet ‹letiflim Reklam Pazarlama ve Turizm A.fi.(“Medyanet A.fi.”)
Marketing
Katalog Yay›n ve Tan›t›m Hizmetleri A.fi.(“Katalog”)
Guide Publishing
Alt›n Kanal Televizyon ve Radyo Yay›nc›l›k A.fi. (“Alt›n TV”)
TV broadcasting
Do¤a Televizyon ve Yay›nc›l›k A.fi. (“Do¤a TV”)
TV broadcasting
Popüler Televizyon ve Radyo Yay›nc›l›k A.fi. (“Popüler TV”)
TV broadcasting
Do¤an Müzik Kitap Ma¤azac›l›k Pazarlama A.fi. (“DMK”)
Retail
Birmafl Birleflik Televizyon Reklam Pazarlama A.fi. (“Birmafl”)
Advertising
Birpa Birleflik Reklam Pazarlama A.fi. (“Birpa”)
Retail
Medyanet ‹letiflim Reklam Pazarlama ve Ticaret Ltd. fiti. ("Medyanet Ltd.")
Marketing
Do¤an Telekomünikasyon
Hizmetleri Sat›fl ve Pazarlama A.fi. ("Do¤an Telekom")
Telecommunications
Do¤an Faktoring Hizmetleri A.fi. (“Do¤an Faktoring”)
Factoring
Do¤an Elektronik Müzik E¤lence Da¤›t›m A.fi. (“Do¤an Elektronik Müzik”)
Do¤an Elektronik Turizm Sat›fl Pazarlama
Hizmetleri ve Yay›nc›l›k A.fi. (“Do¤an Elektronik Turizm”)
Marketing
Dipar Müzik Yap›mc›l›¤› Turizm G›da Sanayi ve Ticaret A.fi. (“Dipar Müzik”)
Milpa Ticari ve S›nai Ürünler Pazarlama Sanayi ve Ticaret A.fi. (“Milpa”)
Trading
Hürriyet Ticari ve S›nai Ürünler Pazarlama Sanayi ve Ticaret A.fi. (“Hürriyet Pazarlama”)
Marketing
Milanur ‹nflaat Pazarlama Turizm Sanayi ve Ticaret Limited fiirketi (“Milanur”)
Construction
Do¤an Otomobilcilik Ticaret ve Sanayi A.fi. (“Do¤an Oto”)
Trading
Do¤an Havac›l›k Sanayi ve Ticaret A.fi. (“Do¤an Havac›l›k”)
Aviation
Do¤an Yay›n Holding A.fi. (“Do¤an Yay›n”)
Investment
Çelik Halat ve Tel Sanayi A.fi. (“Çelik Halat”)
Production
Ditafl Do¤an Yedek Parça ‹malat ve Teknik A.fi. (“Ditafl Do¤an”)
Production
Milta Turizm ‹flletmeleri A.fi. (“Milta Turizm”)
Tourism
D Telekomünikasyon Yat›r›mlar› A.fi. (“D Telekomünikasyon”)
Telecommunications
Enteralle Handels GmbH (“Enteralle Handels”)
Trading
Do¤an Organik Ürünler Sanayi ve Ticaret A.fi. (“Do¤an Organik”)
Agriculture
Do¤an Elektronik Arac›l›k Hizmetleri Sat›fl Pazarlama
ve Yay›nc›l›k A.fi. (" Do¤an Elektronik")
Marketing
Sat›fl Noktalar› A.fi. (" Sat›fl Noktalar›")
Distribution and marketing
Do¤an Müzayedecilik Sat›fl ve Pazarlama A.fi. ("Do¤an Müzayedecilik")
Marketing
Do¤an D›fl Ticaret ve Mümessillik A.fi. (“Do¤an D›fl Ticaret”)
Importation and exportation
Orta Anadolu Otomotiv A.fi. (“Orta Anadolu Otomotiv”)
Automotive
D-Tes Elektrik Enerjisi Toptan Sat›fl A.fi. (“D Tes”)
Electicity Distribution
Ifl›l ‹thalat ‹hracat Mümessillik A.fi. (“Ifl›l ‹thalat ‹hracat”)
Foreign Trade
Ray Sigorta A.fi. (“Ray Sigorta”)
Insurance
Zigana Elektrik Da¤›t›m Sanayi ve Ticaret A.fi. (“Zigana”)
Energy
Çelik Enerji Üretim A.fi. (“Çelik Enerji”)
Energy
Petrol Ofisi A.fi. (“POAfi”) (*)
Distrubition of petroleum products
Segment
Media
Media
Media
Media
Media
Media
Media
Media
Media
Media
Media
Media
Media
Media
Media
Media
Media
Media
Other
Other
Other
Other
Other
Other
Other
Other
Other
Other
Other
Other
Other
Other
Other
Other
Other
Other
Other
Other
Energy
Energy
Energy
(*) POAfi has a %52 share in K›br›s Türk Petrolleri Ltd. (“Kipet”), a 100% share in Petrol Ofisi International Oil Trading Ltd. (“PO International”), a 100% share in PO
Petrofinance N.V. (“Petrofinance”),a %100 share in PO Oil Financing Ltd. (“PO Oil Financing”), a 99,96% share in Erk Petrol Yat›r›mlar› A.fi. (“Erk Petrol”), a
99,83% share in Petrol Ofisi Alternatif Yak›tlar Toptan Sat›fl A.fi. (“PO Alternatif Yak›t”) and a 99,5% share in Petrol Ofisi Gaz ‹letim A.fi. (“PO Gaz ‹letim”), a 100%
share in Petrol Ofisi UK Limited (“P.O. UK”). Do¤an Holding classified POAfi as a Subsidiary as the Holding increased its share in POAfi to 92,98% as at 31
October 2005, as explained in Note 32.
Discontinued operations:
Name
Türk D›fl Ticaret Bankas› A.fi. (“D›flbank”)
D›fl Ticaret Faktoring A.fi. (“D›fl Faktoring”)
D›fl Ticaret Finansal Kiralama A.fi. (“D›fl Leasing”)
D›fl Yat›r›m Menkul De¤erler A.fi. (“D›fl Yat›r›m”)
D›fl Portföy Yönetimi (“D›fl Portföy”)
D›fl Holding Malta Limited (“D›fl Holding Malta”)
D›flbank Malta Ltd. (“D›flbank Malta”)
D›fl Globus Malta (“D›fl Globus”)
Do¤an Emeklilik A.fi. (“Do¤an Emeklilik”)
D›fl Holding Nederland B.V. (“D›fl Holding B.V.”)
3D Güvenlik Sistemleri ve Organizasyon Ticaret A.fi. (“3D Güvenlik”)
Nature of
business
Banking
Factoring
Leasing
Brokerage and fund management
Portfolio management
Banking
Banking
Banking
Insurance
Banking
Service
Segment
Finance
Finance
Finance
Finance
Finance
Finance
Finance
Finance
Finance
Finance
Other
The number of employees of the Holding at 31 December 2005 is 11,666 (31 December 2004: 14,694).
For the purposes of the segmental information in these consolidated financial statements, Do¤an Holding’s separate financial statements have been
included in the “other” segment (Note 33).
All the Subsidiaries are registered in Turkey except for Hürriyet Zweignderlassung, Milliyet Verlags, Entralle Handels, Do¤an Media in Germany,
Kipet in KKTC, PO International in Bahama Islands, Petrofinance in Holland, PO Oil Financing in Cayman Islands and P.O. UK Limited in U.K.
However, as the sales and the purchases of the Group are made and the assets of the Group are located mainly in Turkey, no geographic
segmental information is considered necessary.
Do¤an Holding has the following Joint Ventures (the “Joint Ventures”). All Joint Ventures are registered in Turkey. The nature of the businesses and
for the purpose of the accompanying consolidated financial statements, the respective business segments of the Joint Ventures and Joint Venture
Partners are as follows:
Name
Do¤an Burda Dergi Yay›nc›l›k ve
Pazarlama A.fi. (“Do¤an Burda”)
Do¤an ve Egmont Yay›nc›l›k ve
Yap›mc›l›k Ticaret A.fi. (“Do¤an Egmont”)
Ultra Kablolu Televizyon ve Telekomünikasyon
Sanayi ve Ticaret A.fi (“Ultra Kablolu”)
Süper Kanal Televizyon Video Radyo Bas›n Yap›m Yay›n
Tan›t›m ve Haber Hizmetleri A.fi. (“Süper Kanal”)
Eko Televizyon Yay›nc›l›k A.fi. (“CNN Türk”)
Dergi Pazarlama Planlama ve Ticaret A.fi. (“DPP”)
‹sedafl ‹stanbul Elektrik Da¤›t›m
Sanayi ve Ticaret A.fi. (“‹sedafl”)
Ça¤dafl Pazarlama Sistemleri A.fi.
in liquidation (“T. H. Ça¤dafl Pazarlama”)
Nature of
business
Segment
Joint venture
partner
Magazine publishing
Media
Burda GmbH
Book Publishing
Media
Egmont
Telecommunications
Media
Koç Holding A.fi.
TV broadcasting
TV broadcasting
Advertising
Media
Media
Media
Energy
Energy
Trade
Other
Erler Film A.fi.
Turner Broadcasting Int.
Burda RCS Int. GmbH
Tekfen ‹nflaat A.fi. and
Çukurova Holding A.fi.
RT. Exports LLC- LBO
Acquisitions 2001 Ltd.
142, 143
NOTE 2 - BASIS OF PRESENTATION OF FINANCIAL STATEMENTS
2.1 Accounting standards
The financial statements of Do¤an Holding have been prepared in accordance with the accounting and reporting principles published by the Capital
Markets Board (“CMB”), namely “CMB Accounting Standards”. The CMB published a comprehensive set of accounting principles in Communiqué
No: XI-25 “The Accounting Standards in the Capital Markets”. In the aforementioned communiqué, it has been stated that applying the
International Financial Reporting Standards (“IFRS”) issued by the International Accounting Standards Board (“IASB”) is accepted as an alternative
to conform with the CMB Accounting Standards. With the decision taken on 17 March 2005, the CMB has announced that, effective from 1
January 2005, the application of inflation accounting is no longer required for companies operating in Turkey and preparing their financial
statements in accordance with CMB Accounting Standards. Accordingly, the Holding did not apply IAS 29 “Financial Reporting in Hyperinflationary
Economies” issued by IASB in its consolidated financial statements for the accounting periods starting 1 January 2005. The consolidated financial
statements of the Holding presented for the comparison purposes are expressed in the purchasing power of YTL at 31 December 2004. These
consolidated financial statements and the related notes have been presented in accordance with the formats required by the CMB with the
announcement dated 10 December 2004.
Do¤an Holding and its Subsidiaries and Joint Ventures registered in Turkey maintain their books of account and prepare their statutory financial
statements ("Statutory Financial Statements") in accordance with the principles and obligations published by the CMB, Turkish Commercial Code
(the "TCC"), tax legislation, the Uniform Chart of Accounts issued by the Ministry of Finance. The foreign Subsidiaries maintain their books of
account in accordance with the laws and regulations in force in the countries in which they are registered.
2.2 Financial reporting in hyperinflationary periods
At 31 December 2004, the financial statements are expressed in terms of the purchasing power of YTL at 31 December 2004. With the decision
taken on 17 March 2005, the CMB has announced that, effective from 1 January 2005, the application of inflation accounting is no longer required
for the companies operating in Turkey and preparing their financial statements in accordance with CMB Accounting Standards.
IAS 29 requires that financial statements prepared in the currency of a hyperinflationary economy be stated in terms of the measuring unit current
at the balance sheet date, and that corresponding figures for previous periods be restated in the same terms. The restatement of the comparative
amounts was calculated by means of conversion factors derived from the Turkish nationwide wholesale price index (“WPI”) published by the State
Institute of Statistics (“SIS”).
NOTE 2 - BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued)
Indices and conversion factors used to restate the consolidated financial statements as of 31 December 2004 are given below:
Date
31 December 2004
31 December 2003
Index
8.403,8
7.382,1
Conversion factor
1.000
1.138
Cumulative
3-year inflation rates
%69,7
%181,1
The main procedures for the aforementioned restatement and the effects of ceasing inflation accounting are as follows:
-
As the hyperinflationary period ceases, the current year consolidated financial statements are not restated and financial information related to
previous reporting periods are expressed in terms of purchasing power of the last reporting period in which inflation adjustment was applied.
-
As the hyperinflationary period ceases, the restated amount of the non-monetary assets, liabilities and equity which are expressed in terms of
purchasing power at the last balance sheet date; are accepted as the opening balances of such items at 1 January 2005.
-
The consolidated financial statements of the previous reporting periods are expressed in the purchasing power at the last balance sheet date in
which inflation adjustment was applied.
-
Inflation effect on the net monetary liability position of Do¤an Holding, its Subsidiaries and Joint Ventures is reflected to consolidated statement
of income as net monetary position gain in hyperinflationary periods.
2.3 New Turkish Lira
Through the enactment of the Law numbered 5083 concerning the “Currency of the Republic of Turkey” in the Official Gazette dated 30 January
2004, New Turkish lira (“YTL”) and the New Kurufl (“YKr”) have been introduced as the new currency of the Republic of Turkey, effective from 1
January 2005. The hundredth part of the YTL is the YKr (1 YTL=100 YKr). When the prior currency, Turkish lira (“TL”), values are converted into
the YTL, one million TL is equivalent to one YTL (1 YTL). Accordingly, the currency of the Republic of Turkey is simplified by removing 6 zeroes
from the TL.
All references made to Turkish lira or lira in laws, other legislation, administrative transactions, court decisions, legal transactions, negotiable
instruments and other documents that produce legal effects as well as payment and exchange instruments shall be considered to have been made
to YTL at the conversion rate indicated as above. Consequently, effective from 1 January 2005, the YTL replaces the TL as a unit of account in
keeping and presenting of the books, accounts and financial statements.
As stated in the announcement of CMB dated 30 November 2004, consolidated financial statements for the period ended 31 December 2005,
including the prior period financial data which will be used for comparison purposes, are presented in YTL.
144, 145
2.4 US dollar convenience translation
US dollar (“USD”) amounts shown in these consolidated financial statements have been included solely for the convenience of the reader and are
translated from New Turkish lira (“YTL”), as a matter of arithmetic computation only, at the Central Bank of the Republic of Turkey official YTL
exchange rate of YTL 1,3418=USD 1,00 for purchases of USD on 31 December 2005. Thus, US dollar amounts do not form a part of the
consolidated financial statements prepared in accordance with generally accepted accounting standards issued by the CMB as at 31 December
2005. Such translations should not be construed as a representation that the YTL amounts have been or could be converted into USD at this or any
other rate.
2.5 Translation of foreign Subsidiaries’ financial statements
Financial statements of the foreign Subsidiaries are maintained in accordance with the laws and regulations in force in the countries in which they
are registered, with the required adjustments and reclassifications reflected for the purpose of fair presentation in accordance with IFRS. The assets
and liabilities of foreign Subsidiaries and associated companies are translated into New Turkish lira using the relevant foreign exchange rates
prevailing at the period-end. The results of the foreign Subsidiaries and Associates are translated into New Turkish lira using average exchange rate
for the period and then restated in accordance with IFRS for the transactions before 1 January 2005. Exchange differences arising on retranslation
of the opening net assets of foreign Subsidiaries and Associates arising from using period-end and average exchange rates are included in the
shareholders’ equity as translation reserve.
2.6 Group accounting
(i) These consolidated financial statements include the accounts of the parent company, Do¤an Holding, its Subsidiaries and its Joint Ventures
(collectively referred to as the “Group”) on the basis set out in sections (i) to (v) below. The financial statements of the companies included in
the consolidation are based on the accounting principles and presentation basis applied by the Group in accordance with CMB Accounting
Standards.
(ii) Subsidiaries are companies in which Do¤an Holding has the power to control the financial and operating policies for the benefit of Do¤an
Holding either (a) through the power to exercise more than 50% of voting rights relating to shares in the companies as a result of shares owned
directly and indirectly by itself and/or by certain Do¤an family members and companies whereby Do¤an Holding exercises control over the
voting rights of (but does not have the economic benefit of) the shares held by them; or (b) although not having the power to exercise more than
50% of the voting rights, through the exercise of actual dominant influence over the financial and operating policies. Proportion of ownership
interest represents the effective shareholding of the Group through the shares held directly by Do¤an Holding and indirectly by its Subsidiaries.
The table below sets out all Subsidiaries included in the scope of consolidation and shows their shareholding structure at 31 December 2005 and
2004:
Company name
D›flbank (1)
D›fl Faktoring (1)
D›fl Leasing (1)
D›fl Yat›r›m (1)
D›fl Portföy (1)
D›fl Holding Malta (1)
D›flbank Malta (1)
D›fl Globus (1)
Do¤an Emeklilik (1)
D›fl Holding B.V. (1)
3D Güvenlik (1,3)
Hürriyet
Do¤an Gazetecilik
Yaysat
DYG ‹lan
Do¤an Ofset
AD Kitapç›l›k
DHA
Do¤an Bas›m
Milha
GPS Film
Do¤an Prodüksiyon (2)
D Yap›m
Do¤an Online
DMG
D Finans
DMC
D Market
Hürriyet Zweigniderlassung
Do¤an Daily News
Do¤an Da¤›t›m
Milliyet ‹nternet (3)
Milliyet Verlags
D Turizm ‹flletmeleri A.fi.
(“D Turizm”) (1)
Kanal D
Do¤an TV
Hürbim
Alp Görsel
Bravo TV
Fun TV
Galaksi Radyo
Hür FM
Ifl›l TV
Kanalspor
Milenyum TV
D Radyo
Radyo Foreks
Tempo TV
TV 2000
DS Servis
Yenibir
Egeser
Proportion of voting power
held by Do¤an Holding
and its Subsidiaries (%)
2005
2004
62,37
100,00
100,00
100,00
100,00
100,00
100,00
99,93
100,00
100,00
99,00
60,00
60,00
79,76
79,76
75,00
75,00
100,00
100,00
99,89
99,89
99,90
99,90
90,61
90,61
100,00
100,00
100,00
100,00
100,00
100,00
63,00
100,00
70,00
60,00
60,00
97,66
97,66
99,92
99,92
99,17
99,17
52,63
89,97
100,00
100,00
94,25
94,25
100,00
100,00
100,00
100,00
99,03
99,03
94,81
100,00
99,92
100,00
99,60
99,07
99,07
95,60
100,00
99,06
99,94
99,89
99,89
99,06
99,06
100,00
100,00
100,00
96,00
93,76
100,00
99,92
100,00
99,60
99,07
99,07
100,00
99,06
99,06
99,94
99,89
99,89
99,06
99,06
100,00
100,00
100,00
Proportion of voting
power held by Do¤an
family members (%)
2005
2004
9,11
0,67
0,67
0,10
0,10
40,00
40,00
2,34
2,34
0,08
0,08
0,02
0,02
37,33
0,97
0,97
Total proportion of
voting power
held (%)
2005
2004
71,48
100,00
100,00
100,00
100,00
100,00
100,00
99,93
100,00
100,00
99,00
60,00
60,00
80,43
80,43
75,00
75,00
100,00
100,00
99,89
99,89
100,00
100,00
90,61
90,61
100,00
100,00
100,00
100,00
100,00
100,00
63,00
100,00
70,00
100,00
100,00
100,00
100,00
100,00
100,00
99,19
99,19
89,96
89,97
100,00
100,00
94,25
94,25
100,00
100,00
100,00
100,00
100,00
100,00
Total proportion
of ownership
interest (%)
2005
2004
62,37
61,35
62.36
62,37
62,37
62,37
62,37
62,37
58,80
62,37
61,75
39,94
40,08
53,10
53,28
43,27
43,42
54,51
54,70
51,89
52,07
53,48
53,67
47,06
47,21
39,94
40,08
58,96
59,13
66,57
40,08
29,36
66,57
46,76
39,94
40,08
53,32
53,50
39,91
40,05
66,02
66,25
21,02
36,06
39,94
40,08
62,74
62,96
66,55
66,79
54,05
54,22
64,31
64,44
100,00
-
100,00
94,81
100,00
99,92
100,00
99,60
99,07
99,07
95,60
100,00
99,06
99,94
99,89
99,89
99,06
99,06
100,00
100,00
100,00
63,11
66,57
66,52
66,57
66,30
65,95
65,95
63,64
66,57
65,95
66,53
66,50
66,50
65,95
65,95
39,94
39,94
39,94
4,00
-
100,00
93,76
100,00
99,92
100,00
99,60
99,07
99,07
100,00
99,06
99,06
99,94
99,89
99,89
99,06
99,06
100,00
100,00
100,00
58,48
62,63
66,80
66,75
66,80
66,54
66,18
66,18
66,75
66,18
66,18
66,76
66,73
66,73
66,18
66,18
40,08
40,08
40,08
146, 147
Company name
Hürservis
Hürmedya
Medyanet A.fi. (4)
Katalog (4)
Alt›n Kanal (4)
Do¤a TV (4)
Popüler TV (4)
DMK
Birmafl
Birpa
Medyanet Ltd.
Do¤an Telekom (4)
Do¤an Faktoring
Do¤an Elektronik Müzik (4)
Do¤an Elektronik Turizm (4)
Dipar Müzik (5)
Milpa
Hürriyet Pazarlama
Milanur
Do¤an Oto
Do¤an Havac›l›k
Do¤an Yay›n
Çelik Halat
Ditafl Do¤an
Milta Turizm
D Telekomünikasyon (3)
Enteralle Handels (3)
Do¤an Organik
Do¤an Elektronik
Sat›fl Noktalar›
Do¤an Müzayedecilik
Do¤an D›fl Ticaret
Orta Anadolu Otomotiv
CH Investment B.V. (6)
CH UK Limited (6)
CH Bulgaria (6)
D Tes (3)
Ifl›l ‹thalat ‹hracat (5)
Ray Sigorta
Zigana
Çelik Enerji
POAfi (7)
(1)
(2)
(3)
(4)
(5)
(6)
(7)
2005
2004
100,00
100,00
100,00
100,00
100,00
100,00
100,00
100,00
99,99
99,98
99,98
100,00
100,00
96,50
64,94
97,00
97,00
100,00
100,00
100,00
99,99
100,00
99,96
65,00
65,00
97,43
96,14
99,99
100,00
99,76
99,76
100,00
100,00
66,57
66,80
62,44
62,44
50,94
50,94
95,46
95,46
65,00
65,00
95,48
95,48
99,00
100,00
96,00
96,00
100,00
67,00
96,00
96,00
100,00
100,00
85,00
85,00
100,00
100,00
100,00
99,60
99,60
96,70
78,20
67,32
65,00
65,00
99,75
99,75
92,98
47,42
family members (%)
2005
2004
3,50
35,06
0,01
0,50
0,50
2,57
3,86
0,01
0,24
0,24
3,14
3,14
2,34
2,34
35,00
35,00
4,52
4,52
1,00
4,99
4,99
-
Total proportion of
voting power
held (%)
2005
2004
100,00
100,00
100,00
100,00
100,00
100,00
100,00
100,00
99,99
99,98
99,98
100,00
100,00
100,00
100,00
97,00
97,00
100,00
100,00
100,00
100,00
100,00
99,96
65,50
65,50
100,00
100,00
100,00
100,00
100,00
100,00
100,00
100,00
69,71
69,94
62,44
62,44
50,94
50,94
97,80
97,80
100,00
100,00
100,00
100,00
100,00
100,00
96,00
96,00
100,00
67,00
96,00
96,00
100,00
100,00
85,00
85,00
100,00
100,00
100,00
99,60
99,60
96,70
78,20
67,32
69,99
69,99
99,75
99,75
92,98
47,42
Total proportion
of ownership
interest (%)
2005
2004
39,94
40,08
39,94
40,08
39,94
66,57
66,57
66,57
66,57
66,56
66,79
66,46
66,70
64,24
43,38
38,74
56,58
39,94
65,54
65,79
39,94
39,94
63,90
65,00
65,00
38,91
38,55
65,00
65,00
99,76
99,76
84,48
82,29
66,57
66,80
57,53
57,53
50,94
50,94
95,46
95,46
65,00
65,00
62,06
62,06
98,98
99,48
38,34
38,48
66,56
44,76
38,34
38,48
66,10
66,34
33,08
32,77
57,53
57,53
57,53
64,74
64,74
63,92
78,20
41,99
65,00
65,00
57,49
57,49
92,98
47,42
Group has sold these Subsidiaries in 2005 (Note 35).
This Subsidiary of the Group merged with CNN Türk and all assets and liabilities were transferred to CNN Türk.
These Subsidiaries have been excluded from the scope of consolidation on the grounds of materiality.
These Subsidiaries of the Group were established in 2005.
This Subsidiary of the Group was acquired in 2005.
These Subsidiaries of the Group were liquidated in 2005.
POAfi, which was a Joint Venture at 31 December 2004, became a Subsidiary resulting from Group’s current year acquisitions.
The balance sheets and the statements of income of the Subsidiaries are consolidated on a line-by-line basis and the carrying value of the
investment held by Do¤an Holding and its Subsidiaries is eliminated against the related shareholders' equity. Intercompany transactions and
balances between Do¤an Holding and its Subsidiaries are eliminated on consolidation. The cost of, and the dividends arising from, shares held by
Do¤an Holding in its Subsidiaries are eliminated from shareholders' equity and income for the year, respectively.
Subsidiaries are consolidated from the date on which control is transferred to the Group and they are no longer consolidated from the date that
control ceases. Accounting policies for Subsidiaries have been changed to ensure consistency with the policies adopted by the Group, where
necessary.
(iii) Joint Ventures are companies in respect of which there are contractual arrangements through which an economic activity is undertaken subject
to joint control by Do¤an Holding and one or more other parties. Do¤an Holding exercises such joint control through the power to exercise voting
rights relating to shares in the companies as a result of shares owned directly and indirectly by itself and/or by certain Do¤an family members
and companies whereby Do¤an Holding exercises control over the voting rights of (but does not have the economic benefit of) the shares held
by them. The Group’s interest in Joint Ventures is accounted for by way of proportionate consolidation. By this method, the Group includes its
share of assets, liabilities, shareholders’ equity, income and expenditure of each Joint Venture in the relevant components of the financial
statements.
The table below sets out all Joint Ventures included in the scope of consolidation and shows their shareholding structure at 31 December 2005 and
2004:
Company name
Do¤an Burda
Do¤an Egmont
Ultra Kablolu
Digital Hizmetler (*)
Süper Kanal
CNN Türk
DPP
‹sedafl
T.H. Ça¤dafl Pazarlama (**)
2005
2004
40,72
40,72
50,00
50,00
50,00
50,00
50,00
49,00
49,00
75,04
78,03
46,00
46,00
40,00
40,00
50,00
50,00
family members (%)
2005
2004
2,02
10,00
10,00
5,00
5,00
-
Total proportion of
voting power
held (%)
2005
2004
40,72
42,74
50,00
50,00
50,00
50,00
50,00
49,00
49,00
75,04
78,03
56,00
56,00
45,00
45,00
50,00
50,00
(*) This Joint Venture of Do¤an Holding was sold in 2005.
(**) This Joint Venture of Do¤an Holding has been excluded from the scope of consolidation on the grounds of materiality.
Total proportion
of ownership
interest (%)
2005
2004
27,11
27,20
33,29
33,40
33,29
33,40
27,23
32,62
32,73
49,96
52,12
21,30
21,38
40,00
40,00
32,54
32,54
148, 149
(iv) Available-for-sale equity investments in which the Group, together with Do¤an family members, has an interest below 20%, or above 20% over
which the Holding does not exercise a significant influence, or which are immaterial and that do not have quoted market price in active markets
and whose fair values cannot be measured reliably, are carried at cost less any provision for diminution in value (Note 16).
Available-for-sale equity investments in which the Group, together with Do¤an family members, has an interest below 20% or over which the
Holding does not exercise a significant influence and that have quoted market prices in active markets and whose fair values can be measured
reliably are carried at fair value.
(v) Results of Subsidiaries are included or excluded from their effective dates of acquisition and disposal, respectively.
The minority shareholders' share in the net assets and results for the year for Subsidiaries are separately classified in the consolidated balance
sheets and statements of income as minority interest.
Certain Do¤an family members and companies controlled by them who are shareholders of Do¤an Holding have interests in the share capital of
certain Subsidiaries. In the consolidated financial statements, their interests are treated as minority interest and are not included in the Group's
net assets and profits attributable to shareholders of Do¤an Holding.
2.7 Comparative information, changes in accounting policies and restatement of prior period financial statements
Comparative figures are reclassified, where necessary, to conform to changes in presentation in the current year so that the reclassification will
result in a more appropriate presentation of events or transactions.
As discussed in Notes 14 and 28, subsequent to the issuance of the financial statements of POAfi at 31 December 2004 and became a subsidiary
with Do¤an Holding’s current year acquisitions, adjustments have been made to the acquisition costs of certain fixed assets for the application of
Tax Law No. 5024. The effect of these adjustments pertaining to 2004 financial year which were realised after the issuance of 31 December 2004
consolidated financial statements, amounted to YTL 44.877.447 (YTL 19.769.703 with the Holding’s ownership interest) and were reflected to the
consolidated financial statements through reductions in 2005 opening retained earnings and deferred tax assets.
Subsequent to the issuance of financial statements of D›flbank, a Subsidiary of Do¤an Holding acquired by Fortis Bank as of 4 July 2005,
adjustments have been made to the provision for loan losses related to the credit cards after issuance of financial statements at 31 December 2004.
The effect of these adjustments pertaining to 2004 financial year were reflected to the consolidated financial statements by the reductions in the
2005 openings discontinued operations’ originated loans, minority interests and retained earnings amounting to YTL 38.500.000, YTL 10.079.300
and YTL 16.870.700 respectively and an increase in 2005 opening discontinued operations’ deferred tax assets amounting to YTL 11.550.000.
IAS 39 - Financial Instruments: Regulations and Measurement has been revised effective from the annual period beginning on or after 1 January
2005. In accordance with the revised standard, gains and losses on available-for-sale financial assets should be directly recognised in equity until
the financial assets is derecognized.
The Group changed its accounting policy on available-for-sale financial assets as required by IAS 39. Accordingly, the Group applied the accounting
policy change retrospectively, and the gains and losses recognized on the statements of income until 31 December 2004 are adjusted to statements
of equity and restated as if the new accounting policy mentioned above had always been in use.
The Group also excluded the amount of negative goodwill arising from the prior periods’ acquisitions from the consolidated financial statements and
adjusted in the opening retained earnings according to the International Financial Reporting Standard 3 (“IFRS 3”) “Business Combinations”.
2.8 Offsetting
Financial assets and liabilities are offset and the net amount reported in the consolidated balance sheet when there is a legally enforceable right to
set-off the recognized amounts and there is an intention to settle on a net basis, or realise the asset and settle the liability simultaneously.
NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting policies for Subsidiaries and Joint Ventures have been changed to ensure consistency with the policies adopted by the Group, where
necessary. As explained in Note 35, Do¤an Holding signed an agreement to sell its Subsidiaries in finance segment and the operations of these
Subsidiaries are disclosed as discontinued operations. The significant accounting policies, other than Group accounting which is described in Note
2.6, followed in the preparation of these consolidated financial statements are summarized for continuing and discontinued operations below:
A. Related parties
For the purpose of these consolidated financial statements, shareholders, key management personnel and Board members, in each case together
with their families and companies controlled by or affiliated with them and joint ventures are considered and referred to as related parties (Note 9).
B. Marketable securities / Investments
The Group classifies its marketable securities and investments as trading, held-to-maturity and available-for-sale.
“Trading investments” are either acquired for generating a profit from short-term fluctuations in price or dealer’s margin, or are securities included
in a portfolio in which a pattern of short-term profit making exists. Trading securities are initially recognized at cost of purchase including the
transaction costs. Trading securities are subsequently re-measured at fair value. All related realized and unrealized gains and losses are included in
“revenues” for the Subsidiaries in the finance segment and in the “financial income” for companies in non-finance segments. Dividends received
are recognized as dividend income in the consolidated statement of income.
Debt securities with fixed maturity, where management has both the intent and the ability to hold to the maturity excluding the financial assets
classified as originated loans and advances to customers, are classified as “held-to-maturity investments”. Held-to-maturity investments are initially
recognized at cost and subsequently are carried at amortized cost using the effective yield method.
Investment securities intended to be held for an indefinite period of time, which may be sold in response to needs for liquidity or changes in interest
rates, exchange rates or equity prices, or client’s servicing activity are classified as “available-for-sale”. These are included in non-current assets
unless management has the intention of holding these investments for less than 12 months from the balance sheet date, or unless they will need to
be sold to raise operating capital, in which case they are included in current assets. The appropriate classification of investments is determined at
the time of the purchase and re-evaluated by management on a regular basis. Available-for-sale investments are initially recognized at cost.
Available-for-sale investments are subsequently re-measured at fair value. Unrealized gains and losses arising from the changes in the fair values of
available-for-sale investments are accounted directly in shareholders’ equity rather than consolidated statement of income.
Available-for-sale equity investments in which the Group, together with Do¤an family members, has an interest below 20%, or above 20% over
which the Holding does not exercise a significant influence, or which are immaterial and that do not have quoted market price in active markets and
whose fair values cannot be measured reliably, are carried at cost, which includes the restatement of this cost before 1 January 2005 to the
equivalent purchasing power at balance sheet day, less any provision for diminution in value.
All purchases and sales of investments for the finance sector are recognized on the delivery date and for all purchases and sales in the other
sectors, on the trade date.
C. Sale and repurchase agreements
Finance:
Securities sold subject to linked repurchase agreements (“repo”) in, the finance segment are retained in the financial statements as investments
and a counterparty liability is included in amounts due to other banks or customer deposits as appropriate (Note 47). The difference between sales
and repurchase prices is treated as interest and amortized over the life of repo agreements using the effective yield method.
150, 151
NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Non finance:
Securities purchased under agreements to resell (“reverse repo”) are recorded as due from other banks (Note 4). The difference between sales and
repurchase prices is treated as interest and amortized over the life of reverse repo agreements using the effective yield method.
D. Trade receivables and provision for doubtful receivables
Trade receivables that are created by the Group by way of providing goods or services directly to a debtor are carried at amortized cost. Trade
receivables that deferred financial income is netted-off and calculated by discounting amounts that will be collected of trade receivables recorded in
the original invoice value in the subsequent periods using the effective yield method. Short duration receivables with no stated interest rate are
measured at original invoice amount unless the effect of imputing interest is significant (Note 7).
A credit risk provision for trade receivables is established if there is objective evidence that the Group will not be able to collect all amounts due.
The amount of the provision is the difference between the carrying amount and the recoverable amount, being the present value of all cash flows,
including amounts recoverable from guarantees and collateral, discounted based on the original effective interest rate of the originated receivables
at inception.
If the amount of the impairment subsequently decreases due to an event occurring after the write-down, the release of the provision is credited to
other income.
E. Loans and advances to customers originated by the Group and provisions for loan impairment
Loans originated by the Group by providing money directly to the borrower are categorized as loans originated by the Group and are carried at
amortized cost, less any provision for loan losses.
i) Loans and advances to customers
All loans and advances are recognized when cash is advanced to borrowers.
A credit risk provision for loan impairment is established if there is objective evidence that the Group will not be able to collect all the amounts due.
The amount of the provision for impaired loans and loans under legal follow-up is the difference between the carrying amount and the recoverable
amount, being the net present value of expected cash flows, including amounts recoverable from guarantees and collateral, discounted at the
original effective interest rate of loans (Note 45).
The provision for loan impairment also covers losses where there is objective evidence that probable losses are present in components of the loan
portfolio at the balance sheet date. These have been estimated based upon historical patterns of losses in each component, the internal credit risk
rating of the borrowers and the current economic climate in which the borrowers operate. The level of provision is also based on applicable banking
regulations.
The movement in provision is charged against the income for the year. When a loan is deemed uncollectible, it is written-off against the related
provision for impairment. The loan is written-off after all the necessary legal proceedings have been completed and the amount of the loan loss is
finally determined. Subsequent recoveries are credited to the income statement if previously written-off.
ii) Debt securities
Debt securities issued by the Undersecretariat of Treasury of Republic of Turkey and originated by the Group at original issuance by transferring the
funds directly to the borrower, are categorized as loans originated by the Group and are carried at amortized cost using the effective yield method,
less any provision for impairment.
F. Factoring receivables
Factoring receivables that are created by way of providing money directly to third parties are recorded net of provisions and are carried at amortized
cost. The level of the provision is based on management’s evaluation of the portfolio including such factors as the volume and character of
receivables, past pattern of losses and general economic conditions. The movement in provision made during the year is charged against the
income for the year. Receivables that cannot be recovered are written-off and charged against the provision for losses. These receivables are
written-off after all the necessary legal proceedings have been completed and the amount of the loss is finally determined. Recoveries of amounts
previously provided for are treated as a reduction of the charge for provision for factoring receivables for the year (Note 45).
G. Inventories
Inventories are valued at the lower of cost or net realizable value. Cost elements included in inventory are materials, labour and an appropriate
amount of factory overheads. Cost of inventories is determined on the moving weighted average basis and weighted average basis. Net realizable
value is the estimate of the selling price in the ordinary course of business, less the costs of completion and selling expenses (Note 12).
H. Investment properties
Buildings and land held to earn rentals or for capital appreciation or both, rather than for use in the production or supply of goods or services, or for
administrative purposes or sale in the ordinary course of business, are classified as investment property. Investment properties are carried at cost
less accumulated depreciation. Investment properties (except land) are depreciated on a straight-line basis. Depreciation is calculated on the values
of investment properties (Note 18). The depreciation periods for investment property, which approximate the economic useful lives of such assets,
are 50 years.
Investment properties are reviewed for impairment losses whenever events or changes in circumstances indicate that the carrying amount may not
be recoverable. An impairment loss is recognized for the amount by which the carrying amount of the asset exceeds its recoverable amount, which
is the higher of asset net selling price or value in use.
I. Property, plant and equipment
Property, plant and equipment is carried at cost less accumulated depreciation. Property, plant and equipment are depreciated on a straight-line
basis (Note 19).
The depreciation periods for property, plant and equipment, which approximate the economic useful lives of such assets, are as follows:
Land improvements
Buildings
Machinery and equipment
Motor vehicles
Furniture and fixtures
Leasehold improvements
Other fixed assets
2
4
2
2
2
3
1
-
50
50
28
17
50
25
50
year
year
year
year
year
year
year
Property, plant and equipment is reviewed for impairment losses whenever events or changes in circumstances indicate that the carrying amount
may not be recoverable. An impairment loss is recognized for the amount by which the carrying amount of the asset exceeds its recoverable
amount, which is the higher of asset net selling price or value in use.
Gains or losses on disposals of property, plant and equipment with respect to their restated amounts are included in the other income and expense
accounts, as appropriate.
152, 153
J. Leases
i) The Group as the lessee
Financial Lease
Leases of property, plant and equipment, where the Group has substantially all the risks and rewards of ownership, are classified as finance leases.
Finance leases are capitalized at the inception of the lease at the lower of the fair value of the leased property or the present value of the minimum
lease payments under “property, plant and equipment”; payables resulting from the financial lease are recorded at “financial lease obligations”.
Property, plant and equipment acquired under finance leases is depreciated over the useful life of the asset. Financial lease obligations are
recorded in the consolidated financial statements at the purchase cost of related property, plant and equipment. Lease payments are treated as
comprising capital and interest elements. The capital element is treated as reducing the capitalized obligation under the lease and the interest
element is charged to the statement of income.
Operational Lease
Leases where a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments
made under operating leases (net of any incentives received from the lessor) are charged to the income statement on a straight-line basis over the
period of the lease.
ii) The Group as the lessor
Financial Lease
When assets are sold under a finance lease, the present value of the lease payments is recognized as a receivable. The difference between the
gross receivable and the present value of the receivable is recognized as unearned finance income. The lease income, which is the total unearned
finance income at the transaction date, is recognized over the term of the lease using the net investment method, which reflects a constant periodic
rate of return.
Operational Lease
Under operational leasing, assets subject to leasing agreements are recorded as property, plant and equipment and the income obtained is charged
to the consolidated income statement in equal portions over the period of the lease. Leasing income (net of any incentives received from the lessee)
is charged to the income statement on a straight-line basis over the period of the lease.
K. Goodwill / (Negative goodwill) and amortization
Goodwill and negative goodwill arising on consolidation, indicating the difference between the purchase price and the attributable share of the
Group in the fair value of the underlying net assets of the company acquired, are capitalized and amortized using the straight-line method over the
useful life until 31 December 2004, if the acquisition is before 31 March 2004. Within framework of IFRS 3 “Business Combinations”, amortisation
accounting is not applied for goodwill related to the acquisitions after 31 March 2004, and the carrying value of goodwill is reviewed and adjusted
for permanent impairment where it is considered necessary (Note 17). Any negative goodwill arising from the acquisitions after 31 March 2004 is
recorded as income in the related period. According to IFRS 3, goodwill associated with the transactions before 31 March 2004 will not be
amortized starting from the beginning of the first annual period beginning on or after 31 March 2004 and it will be reviewed annually for
impairment. The carrying amount of negative goodwill arising from prior periods’ which was presented in the consolidated financial statements are
adjusted to retained earnings as of 1 January 2005, in accordance with IFRS 3.
L. Intangible assets
Intangible Assets comprise territorial and cable broadcasting permissions and licenses, brand name, acquired computer software, intellectual
property, trademarks and other identified rights. They are recorded at their acquisition cost and amortised using the straight-line method over their
estimated useful lives for a period not exceeding 20 years (except territorial and cable broadcasting permissions and licenses) from the date of
acquisition. Territorial and cable broadcasting permissions and licenses are not amortised because of their unlimited useful lives. Where an
indication of impairment exists, the carrying amount of any intangible asset is assessed and written down immediately to its recoverable amount.
The right of marina usage held by the Subsidiary, Milta Turizm, is amortized in 49 years in accordance with the agreement signed with Privatization
Administration (Note 20).
Costs associated with developing computer software programs and development of the services rendered are generally expensed as incurred.
However, cost associated with identifiable and unique products, which will be controlled by the Group and have future economic benefits extending
beyond one year, are recognized as an intangible asset. They are recorded at acquisition cost and amortized on a straight-line basis over their
estimated economic lives for the period not exceeding 10 years from date of acquisition (Note 20).
Programme rights are initially recognized at acquisition cost or production cost when the Group controls, in substance, the respective assets and the
risks and rewards attached to them (Note 20).
Programme rights include both in-house productions and co-productions, whether in progress or scheduled for transmission and are stated at the
lower of cost and net realizable value. Consumption is based on the expected number of transmissions over the life of the contract, in order to
balance the cost of consumption with the benefits received. The rates of consumption applied for broadcasting rights are the following:
-
Soaps, in-house productions, domestic series, game shows, music shows, children’s programmes, sport programmes and other events and
documentaries are fully consumed upon the first transmission and the current year charge is included as cost of sales in the consolidated
statement of income.
-
Foreign movies, foreign series and domestic films are recognized at the acquisition cost of the broadcasting right and they are amortized upon
the number of transmissions over the life of the contract.
Intangible assets are reviewed for impairment losses whenever events or changes in circumstances indicate that the carrying amount may not be
recoverable. An impairment loss is recognized for the amount by which the carrying amount of the asset exceeds its recoverable amount, which is
the higher of asset net selling price or value in use.
M. Programme stocks
Programme stocks comprise internal/external productions that have been produced but not yet broadcasted. Current programme stocks are
recognized at acquisition or production cost and they are not subject to amortization. These programmes are charged to income upon the first
transmission and included as cost of sales in the consolidated statement of income (Note 15).
N. Deferred income taxes
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities
and their carrying amounts in the financial statements. Currently enacted tax rates are used to determine deferred income tax.
The principal temporary differences arise from the differences between the carrying amount and the tax bases of property, plant and equipment,
intangible assets, inventory and leasing receivables, provision for employment termination benefits and tax losses carried forward.
Deferred tax liabilities are recognized for all taxable temporary differences, where deferred tax assets resulting from deductible temporary differences
are recognized to the extent that it is probable that future taxable profit will be available against which the deductible temporary difference can be
utilized.
Deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxation authority and deferred tax assets and liabilities are
offset accordingly (Note 14).
154, 155
O. Provisions
Provisions are recognized when the Group has a present legal or constructive obligation or a result of past events, it is probable that on outflow of
resources embodying economic benefits will be required to settle the obligation, and a reliable estimate of the amount of the obligation can be
made.
P. Borrowings and borrowing costs
Borrowings are recognized initially at proceeds received, net of transaction costs incurred. Bank borrowings are subsequently stated at amortized
cost using the effective yield method; any difference between the proceeds and redemption value is recognized in the consolidated statement of
income over the period of the borrowings.
R. Eurobonds
Eurobonds are recognized initially at fair value, being their issue proceeds net of transaction costs incurred. Eurobonds are subsequently stated at
amortized cost using the effective yield method; any difference between the proceeds and redemption value is recognized in the consolidated
income statement over the period of the Eurobonds.
S. Murabaha syndication
Murabaha syndication, a type of stock purchase on a term basis, is recognized initially at proceeds received, net of transaction costs incurred. Bank
borrowings are subsequently stated at amortized cost using the effective yield method; any difference between the proceeds and redemption value
is recognized in the consolidated income statement over the period of the Murabaha syndication.
T. Insurance reserves
Life assurance provision
The Subsidiaries dealing in life assurance are required to establish benefit reserves which on aggregate must be sufficient to provide for future
guaranteed benefits as they become due. The life assurance provision is based on the level of premiums (as adjusted by commission), and
administrative expenses and risk premiums that are computed on the basis of worldwide actuarial mortality assumptions applicable for Turkish
insurance companies as approved by the Insurance Supervisory Office. The life assurance provision also takes account of the net rate of return on
investments. These provisions are accounted for in the consolidated financial statements based on the approved tariffs. Life mathematical reserves
are calculated on the life policies in force at period-end and life profit share reserves are calculated for the collections made from the life insurance
policies in the period. Subsidiaries allocate the income generated from the life policies with a saving clause, based on the number of funds and
income from the funds.
Claims and claim provisions
The claims provision is the total estimated ultimate cost of settling all claims arising from events which have occurred up to the end of the
accounting period. Claims provision is determined in accordance with expert reporting or first evaluation of insure and experts.
Incurred but not reported claims (IBNR) are also provided for under claim provisions.
Unearned premiums reserve
Unearned premiums set aside to provide for the period of risk extending beyond the date of the balance sheets, calculated on accrued premium on
a daily basis for the policies in force.
U. Employment termination benefits
Employment termination benefits represent the present value of the estimated total reserve of the future probable obligation of the Group arising
from the retirement of the employees calculated in accordance with the Turkish Labour Law and Press Labour Laws for the companies in the media
segment (Note 23).
V. Share capital and dividends
Ordinary shares are classified as equity. Pro-rata capital increases to existing shareholders are accounted for at par value as approved. Dividends on
ordinary shares are recognized in equity in the period in which they are declared.
Y. Revenue recognition
Finance:
Interest income and expenses are recognized in the consolidated income statement on an accrual basis. When loans and advances to customers
are considered doubtful of collection by management, they are written down to their recoverable amount, and interest income is thereafter
recognized based at the rate of interest that was used to discount the future cash flows for the purpose of measuring the recoverable amount.
Interest income includes coupons earned on fixed income investment securities and amortized discount and premium on treasury bills and
government bonds.
Fee and commission income and expenses on banking services are recorded as income or expense at the time of affecting the transactions to
which they relate.
Premium income on life insurance services represents premiums on policies written during the year, net of cancellations for the life, health and
personal accident branches.
Non-Finance:
Revenues are recognized on an accrual basis at the time deliveries or acceptances are made, the amount of the revenue can be measured reliably
and it is probable that the economic benefits associated with the transaction will flow to the Group, at the fair value of consideration received or
receivable. Net sales represent the invoiced value of goods shipped less sales returns and commission, excluding sales taxes. When the
arrangement effectively constitutes a financing transaction, the fair value of the consideration is determined by discounting all future receipts using
an imputed rate of interest. The difference between the fair value and the nominal amount of the consideration is recognized as interest income on
a time proportion basis that takes into account the effective yield on the asset.
Premium income on non-life insurance services represents premiums on policies written during the year, net of cancellations.
Z. Research and development costs
Research and development costs are recognized as an expense in the consolidated statement of income in the period in which they are incurred.
i. Barter agreements
When goods or services are exchanged or swapped for goods or services which are of a similar nature and value, the exchange is not regarded as a
transaction which generates revenue. When goods are sold or services are rendered in exchange for dissimilar goods or services, the exchange is
regarded as a transaction which generates revenue. The revenue is measured at the fair value of the goods or services received, adjusted by the
amount of any cash or cash equivalents transferred. If the fair value of the goods or services received are 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.
156, 157
ii. Cash and cash equivalents
Cash and cash equivalents include cash and amounts due from banks, and highly liquid investments with maturity periods of less than three
months.
iii. Derivative financial instruments
Derivative financial instruments, including forward foreign exchange contracts, currency and interest rate swap instruments and other derivative
financial instruments are initially recognized in the balance sheet at cost (including transaction costs) and subsequently are remeasured at their fair
value. All derivative financial instruments are classified as held-for-trading. Certain derivative transactions, while providing effective economic hedges
under the Group’s risk management position, do not qualify for hedge accounting under the specific rules in IAS 39 and are therefore treated as
derivatives held-for-trading with fair value gains and losses reported in the consolidated statement of income.
Forward foreign exchange contracts and currency swap contracts are valued at quoted market prices or discounted cash flow models as
appropriate. Derivatives are carried as assets when the fair value is positive and as liabilities when the fair value is negative.
Changes in the fair value of derivatives held-for-trading are included in net trading income.
iv. Financial instruments and financial risk management
The Group's activities expose it to a variety of financial risks, including the effects of changes in debt and equity market prices, foreign currency
exchange rates and interest rates. The Group's overall risk management programme focuses on the unpredictability of financial markets and seeks
to minimize potential adverse effects on the financial performance of the Group.
Risk management is carried out by individual Subsidiaries and Joint Ventures under policies approved by their Board of Directors.
Currency risk
Foreign currency denominated assets and liabilities, together with purchase and sale commitments, give rise to foreign exchange exposures.
Finance:
Market volatility is closely monitored and by preparing scenario analysis, the probable loss which is likely to occur at the time of the realization of the
worst scenario is forecasted. Daily currency movements and their impact on the current position are evaluated and presented to the management.
Trading portfolio limits are determined on daily basis. Both the daily Value at Risk (“VaR”) reports, and scenario analysis performed at certain
periods are used to assess the risks faced. Foreign currency risk is assessed within this framework and monitored for breaches of the predetermined limits.
Non-finance:
The Group is exposed to foreign exchange risk through the impact of rate changes in the translation of foreign currency denominated liabilities to
local currency. These risks are monitored and limited by the analysis of the foreign currency position.
Interest rate risk
The Group is exposed to interest rate risk through the impact of rate changes on interest bearing liabilities and assets.
Finance:
These exposures are managed on a portfolio basis by using natural hedges that arise from offsetting interest rate sensitive assets and liabilities.
Special emphasis is given to providing a balance between the duration of assets and liabilities. Duration, gap and sensitivity analyses are the main
methods used to manage the risks. Furthermore, various simulation techniques are employed in order to analyse the effects of market volatilities.
Non-finance:
These exposures are managed by using natural hedges that arise from offsetting interest rate sensitive assets and liabilities.
Funding risk
Finance:
To minimize this risk, cash flows on specific dates are identified. Hence, the risk is determined and precautions are held. Therefore, periodic gap
reports and flows in maturities are used as a reference to keep the specified liquidity risks within a pre-specified range.
Non-finance:
The ability to fund the existing and prospective debt requirements is managed by maintaining the availability of adequate committed funding lines
from high quality lenders.
Credit risk
Ownership of financial assets involves the risk that counterparties may be unable to meet the terms of their agreements.
Finance:
Customers’ financial structure, morality, credit reports, credit needs, Bank’s lending policies and economic conjuncture are taken into consideration
in credit limit allocation. The loans extended to debtor companies and Groups are monitored on a weekly basis based on the following dimensions:
New Turkish lira/Foreign Currency; Cash/Non-cash; Line of Business (corporate, commercial, SME, Consumer); Financial (Banks and
Subsidiaries)/Non-financial; sector; maturity; rating; concentration; and loan type.
Non-finance:
These risks are monitored by limiting the aggregate risk to any individual counterparty. The credit risk is generally highly diversified due to the large
number of entities comprising the customer bases.
Fair value of financial instruments
Fair value is the amount at which a financial instrument could be exchanged in a current transaction between willing parties, other than in a forced
sale or liquidation, and is best evidenced by a quoted market price, if one exists.
The estimated fair values of financial instruments have been determined by the Group, using available market information and appropriate valuation
methodologies. However, 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 realise in a current market exchange.
158, 159
The following methods and assumptions are used in the estimation of the fair value of the financial instruments for which it is practicable to
estimate fair value:
Monetary assets
The fair values of balances denominated in foreign currencies, which are translated at year-end exchange rates, are considered to approximate
carrying value.
The fair values of certain financial assets carried at cost, including cash and cash equivalents are considered to approximate their respective
carrying values due to their short-term nature.
Originated loans are carried at amortized cost, less any provision for loan losses. The fair values of originated loans are considered to approximate
their amortized cost calculated based on the market interest rates.
The carrying values of trade receivables along with the related allowances for uncollectibility are estimated to be their fair values.
The values of trading securities, available-for-sale securities and held-to-maturity securities, which have been determined by reference to market
value, are considered to approximate fair values.
Monetary liabilities
The fair value of customer deposits, funds borrowed and other monetary liabilities are considered to approximate their respective carrying values
due to their short-term nature.
Long-term borrowings which, in principle, are at variable rates and denominated in foreign currencies are translated at year-end exchange rates;
accordingly their carrying values approximate their fair values.
v. (Loss)/Earnings per share
(Loss)/Earnings per share disclosed in the consolidated statement of income are determined by dividing net (loss)/income by the weighted
average number of shares outstanding during the year concerned.
In Turkey, companies can increase their share capital by making a pro-rata distribution of shares ("bonus shares") to existing shareholders from
retained earnings. For the purpose of earnings per share computations, the weighted average number of shares in existence during the year has
been adjusted in respect of bonus share issued without a corresponding change in resources, by giving them retroactive effect for the year in
which they were issued and each earlier year, as if the event had occurred at the beginning of the earliest period reported (Note 42).
vi. Discontinued operations
Discontinued operations are the part of a Group which either are classified as held-for-sale or have been disposed of and whose activities and
cash flows can be treated separable from the Group’s whole activities and cash flows. Discontinued operations; represent separate business or
geographical segment, are parts of the plans to sell or dispose thereof, or is a subsidiary acquired for selling. The Group’s discontinued
operations have been valued with the lower of the book values of related asset and liabilities of the discontinued operations, or market values
thereof net of costs incurred to dispose of them (Note 35).
NOTE 4 - CASH AND CASH EQUIVALENTS
The breakdown of cash and cash equivalents at 31 December 2005 and 2004 are as follows:
Cash
Banks
- demand deposits
- time deposits
- blocked bank accounts
- reverse repurchase agreements
Placements with banks
Reserve deposits with the
Central Bank of Turkey
Finance
-
2005
Other
1.557.622
Finance
60.721.480
2004
Other
1.056.876
Total
1.557.622
Total
61.778.356
-
69.127.762
815.940.615
12.027.157
650.750
-
69.127.762
815.940.615
12.027.157
650.750
-
4.760.576
9.537.088
216.346.872
13.230.000
513.184.598
17.322.062
184.908.119
2.002.289
2.543.490
-
22.082.638
194.445.207
218.349.161
15.773.490
513.184.598
-
899.303.906
899.303.906
462.049.972
1.279.830.586
207.832.836
462.049.972
1.487.663.422
At 31 December 2005, interest rates for local currency time deposits are between 10% and 19% (31 December 2004: 17%-29%), and interest
rates for foreign currency time deposits are between 1% and 5% (31 December 2004: 1%-7%). At 31 December 2005, the amount of reverse
repurchase agreements is YTL 650.750 (31 December 2004: YTL 15.773.490). These are all short-term with periods of less than three months with
interest rates between 13% and 15% (31 December 2004: 18%-25%).
At 31 December 2005, YTL 11.884.467 (31 December 2004: YTL 2.000.988) of the deposits have been provided to collateralise the bank
borrowings obtained by the Group and the related parties. YTL 46.020 (31 December 2004: YTL 1.301) of the deposits have been provided to
collateralise the remittance commission obtained from the Group’s campaign owners.
At 31 December 2005, subsidiaries in the insurance sector have deposit investments amounting to YTL 96.670 (31 December 2004: YTL
7.096.872) in a blocked account with a state bank in favour of the Undersecretariat of Treasury as required by Insurance Supervisory Law.
Cash and cash equivalents included in the consolidated statements of cash flows for the year ended 31 December 2005, 2004 and 2003 are as
follows:
2005
777.152.948
Cash and amounts due from banks (excluding accrued interest) (Note 43)
2004
737.720.976
2003
1.034.448.435
NOTE 5 - MARKETABLE SECURITIES
a) Trading Securities
The breakdown of trading securities at 31 December 2005 and 2004 is as follows:
Government bonds
Eurobonds
Treasury bills
Equity stocks
Corporate bonds
Other
Finance
-
2005
Other
17.725.328
7.370.899
1.567.732
26.663.959
Total
17.725.328
7.370.899
1.567.732
26.663.959
Finance
230.894.736
39.970.938
83.016.333
1.514.069
2.154.402
7.757.551
365.308.029
2004
Other
25.092.672
2.769.948
31.470.388
6.470.157
65.803.165
Total
255.987.408
42.740.886
114.486.721
7.984.226
2.154.402
7.757.551
431.111.194
160, 161
NOTE 5 - MARKETABLE SECURITIES (Continued)
At 31 December 2005, the Group holds trading securities amounting to YTL 26.663.959 in local currency (31 December 2004: YTL 336.697.308 in
local currency and YTL 94.413.886 in foreign currency).
The interest rates for government bonds held at 31 December 2005 for local currency are between 14% and 15% (31 December 2004: the interest
rates for treasury bills and government bonds for local currency 17%-29%, the interest rates for treasury bills and government bonds for foreign
currency 3%-11%).
Equity stocks of the Subsidiaries and Joint Ventures held by the Group classified under trading securities at 31 December 2005 and 2004 are as
follows:
2005
6.672.589
250.390
6.922.979
POAfi
D›flbank
Ray Sigorta
2004
3.860.174
3.219.383
136.030
7.215.587
b) Securities available-for-sale
Debt Securities:
Government bonds
Treasury bills
Corporate bonds
Other
Finance
-
2005
Other
-
Total
-
Finance
408.098.375
155.919.117
12.781.000
1.195.601
577.994.093
2004
Other
-
Total
408.098.375
155.919.117
12.781.000
1.195.601
577.994.093
Finance
291.119.947
9.923.054
12.871.000
313.914.001
2004
Other
-
Total
291.119.947
9.923.054
12.871.000
313.914.001
c) Securities held-to-maturity
The breakdown of securities held-to-maturity at 31 December 2005 and 2004 is as follows:
Government bonds
Treasury bills
Corporate bonds
Finance
-
2005
Other
16.133.252
15.973.384
32.106.636
Total
16.133.252
15.973.384
32.106.636
At 31 December 2005, investment securities held-to-maturity amounting to YTL 21.224.684 (31 December 2004: YTL 17.539.848) have been
pledged by a government bank in favour of the Undersecretariat of the Treasury for the legal requirements of the Group’s insurance companies.
The interest rates for government bonds and treasury bills held to maturity at 31 December 2005 varies between 14% and 18% (31 December
2004: 24%-26%).
At 31 December 2005, the net unrealised gain on investment securities held-to-maturity amounts to YTL 1.785.829 (31 December 2004: YTL
41.227.000).
NOTE 5 - MARKETABLE SECURITIES (Continued)
The breakdown of debt securities, classified as investment securities available-for-sale and held-to-maturity, as per their maturities at 31 December
2005 and 2004 are as follows:
2005
9.925.751
22.180.885
32.106.636
1-30 days
31-90 days
91 days - 1 year
2004
13.847.034
8.445.175
869.615.885
891.908.094
NOTE 6 - BORROWINGS
Breakdown of bank borrowings at 31 December 2005 and 2004 is as follows:
YTL
2004
Foreign
currency
Total
-
22.363.213
22.363.213
545.330.000
922.976.536
1.468.306.536
545.330.000
945.339.749
1.490.669.749
-
-
64.101.000
34.714.000
98.815.000
27.119.000
90.929.000
118.048.000
91.220.000
125.643.000
216.863.000
-
-
-
121.178.213
1.586.354.536
1.707.532.749
61.250.974
278.867.317
340.118.291
18.787.878
236.916.083
255.703.961
-
215.327.834
96.957.790
22.217.056
215.327.834
96.957.790
22.217.056
-
113.606.505
13.214.712
10.538.704
113.606.505
13.214.712
10.538.704
Total short-term bank borrowingsnon-finance segments
61.250.974
613.369.997
674.620.971
18.787.878
374.276.004
393.063.882
Total short-term bank borrowings
61.250.974
613.369.997
674.620.971
139.966.091
1.960.630.540
2.100.596.631
Short-term bank borrowings
Finance segment
Syndication loan
Other
Domestic banks
Türk Eximbank
Other
Total short-term bank
borrowingsfinance segment
Non-finance segments
Bank borrowings
Short-term portion of
long-term borrowings
Murabaha syndication
Eurobond
YTL
2005
Foreign
currency
Total
-
-
-
162, 163
NOTE 6 - BORROWINGS (Continued)
YTL
2005
Foreign
currency
Long-term bank borrowings
Finance segment
Foreign institutions and banks
Other
-
-
-
-
137.382.464
25.729.000
137.382.464
25.729.000
Total long-term bank borrowingsfinance segment
-
-
-
-
163.111.464
163.111.464
Non-finance segments
Bank borrowings
Eurobond
-
1.098.708.570
220.344.759
1.098.708.570
220.344.759
187.176
-
590.984.806
45.647.592
99.925.971
591.171.982
45.647.592
99.925.971
Total long-term bank borrowingsnon-finance segments
-
1.319.053.329
1.319.053.329
187.176
736.558.369
736.745.545
Total long-term bank borrowings
-
1.319.053.329
1.319.053.329
187.176
899.669.833
899.857.009
2004
Foreign
currency
306.556.753
202.171.448
228.017.344
736.745.545
Total
421.633.641
217.664.902
260.558.466
899.857.009
Total
YTL
2004
Foreign
currency
Total
The redemption schedules of long-term borrowings at 31 December 2005 and 2004 are summarised below:
2006
2007
2008 and after
YTL
-
2005
Foreign
currency
Total
180.026.033 180.026.033
1.139.027.296 1.139.027.296
1.319.053.329 1.319.053.329
YTL
115.076.888
15.493.454
32.541.122
163.111.464
As of 31 December 2005, interest rates for local currency bank borrowings are between 0% and 24% (31 December 2004: 0%-32%), and for
foreign currency bank borrowings 3% to 9% (31 December 2004: 3%-13%).
Eurobond
The issue and sale procedures of Eurobond performed by PO Oil Financing Limited, a subsidiary of POAfi, were completed by 22 July 2004 and the
Eurobond issued with a nominal value of USD 175.000.000 are registered at Luxembourg Stock Exchange. The Eurobond issued has a maturity of
five years; beginning on 22 July 2004 and maturing on 22 July 2009. The Eurobond has a fixed interest rate of 9,75% and the interest will be paid
semi-annually. At 31 December 2005, the short-term and the long-term amortized cost of the bonds held outside the Group calculated using the
effective yield method amounts to YTL 22.217.056 and YTL 220.344.759 respectively.
POAfi signed a murabaha syndication agreement at 15 July 2004 for an amount of USD 92.500.000, at which Citi Islamic Bank E.C, and Kuveyt
Türk Evkaf Finans Kurumu A.fi. participated and Citi Islamic Investment Bank E.C was also the agent. The murabaha syndication has a fixed
interest rate and a maturity date of 14 July 2006. The effective fixed interest rate is 6,89%. At 31 December 2005, the total amount of murabaha
syndication YTL 96.957.790 is short-term.
NOTE 7 - TRADE RECEIVABLES AND PAYABLES
Short-term trade receivables
Trade receivables - net of unearned finance income
Notes receivables - net of unearned finance income
Deposits and guarantees given
Other
Less: Provision for doubtful receivables
Long-term trade receivables
Trade receivables - net of unearned finance income
Notes receivables - net of unearned finance income
Deposits and guarantees given
2005
2004
980.028.298
507.442.752
4.900.348
592.391
1.492.963.789
549.971.018
216.693.638
1.646.009
5.961.232
774.271.897
(86.673.855)
(52.843.922)
1.406.289.934
721.427.975
7.444.782
5.659.740
1.356.300
14.460.822
3.307.464
4.321.777
426.088
8.055.329
2005
52.843.922
26.913.462
13.291.698
(5.577.461)
(797.766)
86.673.855
2004
29.530.838
29.603.162
(3.607.594)
(2.682.484)
52.843.922
2005
964.442.597
9.757.563
224.966
2.003.675
976.428.801
2004
508.647.446
8.533.725
712.393
2.128.268
520.021.832
354.597.348
7.806.875
362.404.223
38.547.200
5.847.971
44.395.171
Movement of the provisions for doubtful receivables in 2005 and 2004 is as follows:
1 January
Increase in provision
Monetary gain
Acquisition of Subsidiaries
Collections
Decrease in Joint Venture ownership rate
31 December
Short-term trade payables:
Trade accounts payable - net of unincurred credit finance charges
Notes payable - net of unincurred credit finance charges
Deposits and guarantees received
Other
Long-term trade payables
Trade accounts payable - net of unincurred credit finance charges (*)
Deposits and guarantees received
(*) The long-term trade payables of POAfi, the Group’s subsidiary, mainly consists of letters of credit payable that is related to purchasing fuel-oil
taken from different banks. The letters of credit amounted to YTL 323.849.973 (USD 167.950.617; EUR 62.043.361) included in long-term
trade payables. The long-term USD letters of credit weighted average interest rate is 5,48%, the EUR letter of credits’ weighted average interest
rate is 3,71%.
164, 165
NOTE 7 - TRADE RECEIVABLES AND PAYABLES (Continued)
The redemption schedule of long-term payables is summarized below:
Year
2006
2007
2008 and after
2005
342.729.719
19.674.504
362.404.223
2004
20.322.348
10.441.119
13.631.704
44.395.171
2005
-
2004
80.612.000
69.565.304
150.177.304
2005
8.288.506
14.496.705
22.785.211
2004
3.085.749
5.508.190
8.593.939
Due from related parties:
D Yap› ve ‹nflaat Sanayi ve Ticaret A.fi. (“D Yap›”)
Biryay Sat›fl Pazarlama ve Tic. A.fi. (“Biryay”)
Ortado¤u Otomotiv Ticaret A.fi. (“Ortado¤u Otomotiv”)
Alo Teledünya A.fi. (“Alo Teledünya”)
Other
2005
3.767.330
2.147.000
190.018
328.048
6.432.396
2004
1.513.490
2.079.000
63.137
342.762
444.256
4.442.645
Due to related parties:
D Yap›
Adilbey Holding A.fi. ("Adilbey Holding")
D Tes
Other
2005
3.874.915
455.002
182.701
137.552
4.650.170
2004
5.003.568
55.652
439.825
33.343
5.532.388
Credits taken from related parties:
Born Investment Holding Company S.A.
2005
4.025.000
4.025.000
2004
8.479.000
8.479.000
NOTE 8 - LEASING RECEIVABLES AND PAYABLES
(i) Leasing receivables
Short-term leasing receivables
Long-term leasing receivables
(ii) Leasing payables
Short-term leasing payables
Long-term leasing payables
NOTE 9 - TRANSACTIONS AND BALANCES WITH RELATED PARTIES
i) Amounts due from and due to related parties:
NOTE 9 - TRANSACTIONS AND BALANCES WITH RELATED PARTIES (Continued)
ii) Transactions with related parties:
Service and product purchases:
Raw materials purchases
Other product and service purchases
2005
237.732.000
18.716.100
256.448.100
2004
232.704.000
9.069.519
241.773.519
Raw material purchases consist of paper imported from related companies through Do¤an D›fl Ticaret ve Mümessillik A.fi..
Service and product sales:
Service and product sales
2005
5.611.485
2004
10.439.830
2005
2004
Financial expenses from discontinued operations
Financial incomes from continuing operations
Financial expenses from continuing operations
(8.649.129)
1.259.699
(914.328)
(8.303.758)
(20.759.852)
469.182
(299.293)
(20.589.963)
Other transactions:
Çamtepe ‹nflaat Yat›r›m ve Ticaret A.fi. (*)
2005
26.000.000
26.000.000
2004
-
Financial income/(expense):
(*) Hürriyet Gazetecilik ve Matbaac›l›k A.fi., a Subsidiary, sold 23.373 m2 of land located in fiiflli with a fair value of YTL 22.000.000 to a related
party Çamtepe ‹nflaat Yat›r›m ve Ticaret A.fi. for YTL 26.000.000.
166, 167
NOTE 10 - OTHER RECEIVABLES AND PAYABLES
Other short-term receivables
Special Consumption Tax (“SCT”) exemption
Work advances
Advances given
Receivables from Privatization Administration (“PA”)
Due from personnel
Receivables from other banks
Lawsuit and court expenses receivable
Other miscellaneous receivables
Other long-term receivables
Advances given
Other miscellaneous receivables
Other short-term liabilities
Taxes and withholdings payables
Debt arised from acquisition of POAfi shares (*) (Note 32)
Fuel purchase certificates
Compensation to be paid
Payables to personnel
Blocked merchant accounts
Other miscellaneous payables
Payables to PA
Cheques at clearing
Import transfers and payment orders
Provision for credit related commitments
Blocked cheques and deposits
Other
Other long-term liabilities
Debt arised from acquisition of POAfi shares (*) (Note 32)
Other long-term liabilities
2005
2004
36.347.168
12.991.292
10.172.809
4.680.923
2.311.984
8.985.366
75.489.542
20.776.442
6.519.802
8.484.219
1.455.981
2.011.836
14.534.726
6.132.255
8.196.011
68.111.272
8.099.648
1.061.350
9.160.998
3.168.665
196.665
3.365.330
283.591.365
272.593.091
90.087.902
17.418.831
3.403.361
51.994.232
719.088.782
167.309.539
50.256.239
8.260.810
2.586.351
76.111.000
47.272.748
39.260.567
38.148.000
18.769.952
17.880.000
10.457.000
18.038.822
494.351.028
136.731.834
176.610
136.908.444
1.893.478
1.893.478
(*) At 31 December 2005, the principal and the interest related to the debt arised from acquisition of POAfi shares amounting to YTL 268.360.000
(USD 200.000.000) and YTL 4.233.091, respectively, were included in “Other short-term liabilities” whereas the principal and the interest
amounting to YTL 134.180.000 (USD 100.000.000) and YTL 2.551.834, respectively, were included in “Other long-term liabilities” (Note 32).
NOTE 11 - BIOLOGICAL ASSETS
As of 31 December 2005, biological assets amount to YTL 80.988 (31 December 2004: YTL 167.027).
NOTE 12 - INVENTORIES
2005
2004
Finished goods and merchandise
Raw materials and supplies
Spares, supplies and advances
Promotion stocks
Semi-finished goods
Other inventories
548.872.030
48.745.728
17.742.469
4.883.543
6.808.024
16.770.034
643.821.828
236.602.686
23.617.620
7.002.729
5.518.100
7.689.914
26.129.621
306.560.670
Provision for net realizable value
(5.680.161)
(8.724.065)
638.141.667
297.836.605
18.969.002
18.969.002
5.963.500
5.963.500
Short-term inventories
Other inventories mainly consist of fuels in transit and lubricants.
Long-term inventories
Construction-in-progress inventories
Total
Long-term construction-in-progress inventories are the costs of the construction at Istanbul Beylikdüzü; mainly the rough construction work,
infrastructure, isolation and environment arrangement incurred in accordance with the construction agreement signed with D Yap› at 25 June 2004
and 3 January 2005.
NOTE 13 - CONSTRUCTION CONTRACT RECEIVABLES AND PROGRESS BILLING
Group has no construction contract receivables and construction progress billings (31 December 2004: None).
NOTE 14 - DEFERRED TAX ASSETS AND LIABILITIES
Deferred Tax
Do¤an Holding, Subsidiaries and Joint Ventures recognize deferred tax assets and liabilities based upon temporary differences arising between their
financial statements as reported for CMB Accounting Standards purposes and their statutory tax financial statements. In substance, differences
arise from the differences in accounting periods for the recognition of income and expenses, in accordance with CMB Accounting Standards and
tax legislation.
Deferred income taxes will be 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 a principal tax rate of 30%.
168, 169
NOTE 14 - DEFERRED TAX ASSETS AND LIABILITIES (Continued)
The breakdown of cumulative temporary differences and the resulting deferred tax assets/ (liabilities) provided at 31 December 2005 and 2004
using the enacted future tax rates is as follows:
Cumulative temporary
differences
2005
2004
Net difference between the tax base and the
carrying value of property, plant and equipment,
intangible assets and inventories
Other
295.113.372
26.271.507
321.384.879
Tax losses carried forward
Provision for doubtful receivables
Investment incentive allowance
Reserve for employment termination benefits
Deferred financial income of trade receivables
Provision for loan losses and factoring receivables
Other
Deferred tax assets
209.889.507
33.758.086
27.773.260
27.119.217
12.764.891
47.433.174
358.738.135
Deferred tax
assets/(liabilities)
2005
2004
140.612.780
24.692.693
165.305.473
(89.186.859)
(7.881.452)
(97.068.311)
(42.530.724)
(7.573.451)
(50.104.175)
439.399.482
25.205.339
13.882.775
30.054.866
29.368.971
48.991.388
77.033.536
663.936.357
63.642.495
10.127.426
6.263.515
8.018.099
4.127.738
14.362.596
106.541.869
128.919.947
7.561.601
2.962.886
8.953.361
9.338.595
14.697.415
23.213.755
195.647.560
9.473.558
145.543.385
Deferred tax assets-net
Due to the fact that Subsidiaries and Joint Ventures, which are independent taxpayers, have represented the net amount of deferred tax assets and
liabilities in their financial statements in accordance with CMB Accounting Standards; the effects of the mentioned net-offs have been reflected to
the consolidated financial statements of the Holding. Temporary differences and deferred tax assets/liabilities mentioned above have been prepared
according to their gross amounts.
The Holding did not recognize the deferred tax assets as of 31 December 2005 for the tax losses carried forward amounting to YTL 110.177.426
(31 December 2004: YTL 117.063.607) as there is an uncertainty about the future taxable profit that will be available against which these deferred
tax assets can be utilised.
Movements for net deferred taxes for the years ended 31 December 2005 and 2004 are as follows:
1 January
Acquisitions
Sale of Subsidiary
Effect of change in Joint Venture ownership rate
Charge for the period (Note 41)
Charge for the period related to discontinued operations
Effect of change in accounting policy (Notes 2.7 and 28)
31 December
2005
145.543.385
11.095.282
(61.550.703)
(1.968.008)
(63.876.695)
(19.769.703)
9.473.558
2004
175.022.320
(166.546)
(66.078.749)
36.766.360
145.543.385
NOTE 15 - OTHER CURRENT/NON CURRENT ASSETS AND OTHER CURRENT/NON CURRENT LIABILITIES
Prepaid expenses
Prepaid taxes and funds
Deferred acquisition costs
Value Added Tax ("VAT") receivable
Program stocks
Income accruals
2005
29.189.290
14.634.450
15.690.247
15.391.610
5.537.986
3.686.773
4.316.218
88.446.574
2004
23.667.642
17.817.311
14.121.000
14.313.557
3.951.200
1.308.880
25.058.605
100.238.195
Impairment for program stocks
(1.777.000)
(737.784)
86.669.574
99.500.411
2005
13.040.355
87.439
13.127.794
2004
10.166.869
539.421
10.706.290
2005
17.111.489
8.624.522
379.198
26.115.209
2004
22.735.092
5.595.303
11.000.000
87.980
39.418.375
Prepaid expenses
Other current liabilities
Provision for expenses
Deferred income
Bonuses to personnel
Other
NOTE 16 - FINANCIAL ASSETS
a) Securities available-for-sale
Debt Securities:
Government bonds
Eurobonds
Corporate bonds
Finance
-
2005
Other
-
Total
-
Finance
522.273.676
263.157.441
40.340.883
825.772.000
2004
Other
-
Total
522.273.676
263.157.441
40.340.883
825.772.000
170, 171
NOTE 16 - FINANCIAL ASSETS (Continued)
Equity securities:
Listed
Unlisted
Total securities available-for-sale
Finance
-
2005
Other
4.977.219
4.977.219
Total
4.977.219
4.977.219
Finance
8.738.880
6.502.075
15.240.955
2004
Other
4.288.701
4.288.701
Total
8.738.880
10.790.776
19.529.656
-
4.977.219
4.977.219
841.012.955
4.288.701
845.301.656
Equity stocks classified under securities available-for-sale at 31 December 2005 and 2004 are as follows:
2005
Company name
Listed:
Türkiye S›nai Kalk›nma Bankas› A.fi.
Anadolu Hayat Sigorta A.fi.
Unlisted:
Aks Televizyon Reklamc›l›k ve Filmcilik San. ve Tic. A.fi.
Biryay
D Tes (*)
‹MKB Takas Bank A.fi.
Cam Elyaf Sanayi A.fi.
Bankalararas› Kredi Kartlar› Merkezi
Other
2004
YTL
%
YTL
%
-
-
4.778.880
3.960.000
8.738.880
3
1
2.922.593
357.960
201.446
1.495.220
4.977.219
9
50
100
-
2.922.593
528.592
3.811.881
1.965.400
724.794
837.516
10.790.776
9
100
2
1
2
-
4.977.219
19.529.656
(*) This Subsidiary of Do¤an Holding has not been consolidated due to grounds of materiality.
Available-for-sale equity investments that do not have a quoted market value and whose fair values can not be reliably measured are stated at their
costs less any impairment.
b) Securities held-to-maturity:
The breakdown of securities held-to-maturity at 31 December 2005 and 2004 is as follows:
Government bonds
Eurobonds
Corporate bonds
Finance
-
2005
Other
-
Total
-
Finance
161.764.972
157.362.285
7.658.823
326.786.080
2004
Other
-
Total
161.764.972
157.362.285
7.658.823
326.786.080
NOTE 17 - GOODWILL / NEGATIVE GOODWILL
Goodwill (Note 32)
Accumulated amortization
Net book value
1 January
2005
1.915.676.295
(520.351.073)
1.395.325.222
Additions (****)
244.950.193
244.950.193
Acquisitions (***)
1.572.122.996
(324.484.116)
1.247.638.880
Disposals (*)
-
Sale of a Joint
Venture (**)
(98.932.479)
19.959.409
(78.973.070)
31 December
2005
3.633.817.005
(824.875.780)
2.808.941.225
Negative goodwill
Net book value
(7.700.917)
1.378.806
(6.322.111)
-
-
7.700.917
(1.378.806)
6.322.111
-
-
Total net book value
1.389.003.111
2.808.941.225
Goodwill (Note 32)
Net book value
1 January
2004
1.936.772.430
(435.283.757)
1.501.488.673
Additions
12.650.626
(89.267.652)
(76.617.026)
Disposals
(31.887.142)
4.200.336
(27.686.806)
Impairment
(1.859.619)
(1.859.619)
31 December
2004
1.915.676.295
(520.351.073)
1.395.325.222
Negative goodwill
Net book value
(7.700.917)
898.443
(6.802.474)
480.363
480.363
-
-
(7.700.917)
1.378.806
(6.322.111)
Total net book value
1.494.686.199
1.389.003.111
(*)
The Group removed the negative goodwill arising from the prior periods’ acquisitions amounted to YTL 6.322.111 from the consolidated
balance sheets by adjusting the opening retained earnings according to IFRS 3.
(**)
The effect of 3,37% share sales of POAfi to goodwill and accumulated amortization.
(***) The effect of POAfi’s 44,06% share purchase to goodwill.
(****) YTL 238.925.377 goodwill arised from the acquisition of “Star TV ‹ktisadi ve Ticari Bütünlü¤ü” from Savings Deposit Insurance Fund by Ifl›l
TV in accordance with the agreement signed on 17 November 2005 and YTL 6.024.816 was related to goodwill arised from the purchase of
1,05% of Kanal D.
172, 173
NOTE 18 - INVESTMENT PROPERTY
Cost:
Land and land improvements
Buildings
Accumulated depreciation:
Buildings
Net book value
Cost:
Buildings
Buildings
Net book value
1 January
2005
Additions
Disposals
Impairment
Transfers
31 December
provisions
2005
46.264.193
12.213.302
58.477.495
451.258
2.066.250
2.517.508
(22.000.000)
(5.018.790)
(27.018.790)
151.814
8.853.828
2.884.600
2.154.731
14.044.973
2.815.320
2.815.320
24.867.265
20.929.910
2.884.600
2.154.731
50.836.506
1.482.749
1.482.749
329.999
329.999
(194.845)
(194.845)
136.415
1.279.516
2.588.068
1.931.508
5.935.507
-
136.415
2.897.419
2.588.068
1.931.508
7.553.410
56.994.746
43.283.096
1 January
2004
Additions
Disposals
37.779.397
11.702.076
49.481.473
5.166.041
1.696.999
6.863.040
1.092.450
1.092.450
390.549
390.549
48.389.023
Transfers
Impairment
provisions
31 December
2004
(797.967)
(398)
(798.365)
(2.176.637)
(2.176.637)
6.293.359
(1.185.375)
5.107.984
46.264.193
12.213.302
58.477.495
(250)
(250)
-
-
1.482.749
1.482.749
56.994.746
NOTE 19 - PROPERTY, PLANT AND EQUIPMENT
Movement for property, plant and equipment and related depreciation for year ended 31 December 2005 is as follows:
Effect of
1 January
Acquisitions
Foreign
change in
currency
Transfers
Sale of
participation
translation
31 December
(****)
subsidiary (*)
rate (**)
differences
2005
2005
Additions
(***)
Disposals
202.627.474
12.539.046
163.357.239
(1.853.840)
13.781.308
(3.522.200)
(9.844.794)
(877.840)
376.206.393
Buildings
523.940.590
4.875.471
63.127.243 (12.679.178)
(2.833.510)
(110.860.877)
(4.317.843)
(1.632.937)
459.618.959
1.147.979.141
30.328.336
366.205.860
(5.844.636)
21.438.074
(34.903.787)
(20.790.788)
90.491.592
6.299.516
6.178.623
(5.858.390)
4.496.061
(2.686.990)
(319.080)
(1.795)
Cost:
Motor vehicles
(4.844.765) 1.499.567.435
98.599.537
493.052.385
12.930.058
19.224.774
(9.027.356)
2.359.650
(316.579.532)
(970.513)
(187.547)
200.801.919
Leasehold improvement
222.716.662
70.251.336
39.561.094
(4.513.259)
8.170.262
(121.795.041)
(2.301.752)
-
212.089.302
Other fixed assets
141.275.865
16.719.599
160.986.810
(3.628.509)
48.200.680
(19.452.170)
(9.684.799)
-
334.417.476
13.304.122
117.029.055
6.814.715
(3.058.275)
(110.098.844)
-
(410.377)
(242.015)
23.338.381
2.835.387.831
270.972.417
825.456.358 (46.463.443)
(14.486.319)
(609.800.597)
(48.639.946)
19.045.725
8.439.708
(136.415)
(135.813)
(1.081.605)
Buildings
100.768.803
15.164.358
3.109.093
(1.829.182)
(1.279.516)
(26.445.234)
(250.641)
775.117.413
74.916.466
274.171.274
(3.021.287)
(2.588.068)
(7.041.998)
(16.465.803)
Construction in progress
(7.786.899) 3.204.639.402
Motor vehicles
17.850.534
(375.892)
-
43.606.242
67.552
89.305.233
(2.012.603) 1.093.075.394
34.343.036
9.905.197
4.021.923
(4.084.956)
-
(1.888.318)
(222.636)
-
42.074.246
417.623.905
26.683.033
8.487.193
(9.321.985)
(1.931.508)
(290.758.316)
(523.269)
21.425
150.280.478
130.901.638
26.043.173
6.697.766
(3.247.091)
-
(94.324.047)
(381.250)
-
65.690.189
57.658.081
50.663.345
52.170.231
(780.899)
-
(19.286.361)
(3.133.021)
-
137.291.376
1.535.458.601
211.815.280
366.508.014 (22.661.292)
(5.935.507)
(439.880.087)
(22.058.225)
Other fixed assets
Net book value
(*)
1.299.929.230
(1.923.626) 1.621.323.158
1.583.316.244
Effect of merger of Do¤an Prodüksiyon, a subsidiary of the Group, with CNN Türk and sales of subsidiaries, classified as discontinued
operations (Note 1) and D Turizm in property, plant and equipment.
(**) The effects of 3,37% share sales of POAfi, 2,02% share sales of Do¤an Burda and 2,92% share sales of CNN Türk in property, plant and
equipment.
(***) The effects of POAfi’s 44,06% share purchase (POAfi become a subsidiary) and purchases of Ifl›l ‹thalat ‹hracat, Star TV Ticari ve ‹ktisadi
Bütünlü¤ü and Dipar Müzik in property, plant and equipment.
(****) YTL 8.109.466 of net transfer from property, plant and equipment is related with investment property (Note 18) and remaining net transfer
of YTL 441.346 is related with intangible assets (Note 20).
174, 175
NOTE 19 - PROPERTY, PLANT AND EQUIPMENT (Continued)
Movement for property, plant and equipment and related depreciation for the year ended 31 December 2004 is as follows:
Foreign
currency
1 January 2004
Additions
Acquisitions (*)
Disposals
Transfers (**)
Impairment
translation
31 December
provisions
differences
2004
202.627.474
Cost:
189.750.920
9.268.660
-
(200.538)
4.370.814
-
(562.382)
Buildings
498.892.041
16.131.492
12.595.540
(2.891.424)
488.411
(70.000)
(1.205.470)
523.940.590
1.112.919.250
32.153.343
305.568
(8.037.377)
13.570.852
(342.701)
(2.589.794)
1.147.979.141
89.210.042
8.427.816
214.863
(7.618.272)
258.341
-
(1.198)
90.491.592
Motor vehicles
487.100.839
32.422.007
1.499.217
(20.041.064)
1.029.860
(8.832.692)
(125.782)
493.052.385
207.296.368
29.051.959
-
(12.676.206)
3.488.541
(4.444.000)
-
222.716.662
Other fixed assets
111.017.471
12.609.519
-
(7.304.619)
24.953.494
-
-
141.275.865
17.829.876
43.087.927
2.566
(360.897)
(47.245.307)
-
(10.043)
13.304.122
2.714.016.807
183.152.723
14.617.754
(59.130.397)
915.006
(13.689.393)
(4.494.669)
2.835.387.831
15.675.508
3.395.673
-
(25.456)
-
-
-
19.045.725
Construction in progress
Buildings
88.059.515
12.909.189
229.918
(308.549)
-
-
(121.270)
100.768.803
720.024.180
62.802.073
139.236
(7.292.032)
-
-
(556.044)
775.117.413
30.541.266
9.825.013
17.649
(6.040.512)
-
-
(380)
34.343.036
389.620.400
37.307.334
540.396
(9.758.541)
-
-
(85.684)
417.623.905
110.712.579
30.649.769
-
(10.460.710)
-
-
-
130.901.638
32.674.959
27.879.558
-
(2.896.436)
-
-
-
57.658.081
1.387.308.407
184.768.609
927.199
(36.782.236)
-
-
(763.378)
1.535.458.601
Motor vehicles
Other fixed assets
Net book value
1.326.708.400
1.299.929.230
(*) Balances of Do¤an D›fl Ticaret and Orta Anadolu Otomotiv at the date of their acquisitions are included in the “Acquisitions” column of the
movement schedule.
(**) Net effect of transfer from investment properties (Note 18) to property, plant and equipment amounting to YTL 2.176.637 and transfer from
property, plant and equipment to intangible assets (Note 20) amounting to YTL 1.261.631.
Machinery and equipment, furniture and fixtures, motor vehicles and leasehold improvements include finance leased assets amounting to YTL
63.728.468, YTL 2.459.409, YTL 3.198.213 and YTL 9.315.711 (31 December 2004: YTL 43.348.308, YTL 105.991.471, YTL 1.942.688 and YTL
2.240.451) respectively, at 31 December 2005. The accumulated depreciation related to finance leased assets amounts to YTL 56.482.048 at 31
December 2005 (31 December 2004: YTL 111.074.949).
At 31 December 2005, mortgages on property, plant and equipment amount to YTL 36.302.007 (31 December 2004: YTL 132.582.663).
NOTE 20 - INTANGIBLE ASSETS
Movement for intangible assets and related amortization for the years ended 31 December 2005 and 2004 is as follows:
Effect of
1 January
Cost
Acquisitions
Foreign
change in
currency
Provision for
Sale of
participation
translation
impairment
subsidiary (*)
rate (**)
differences
2005
(379.070)
365.908.892
2005
Additions
(***)
Disposals Transfers
229.588.168
36.735.045
156.118.048
(7.699.414)
441.346
(3.042.376)
(44.962.042)
(890.813)
(146.449.848)
(34.378.250)
(9.253.580)
1.409.828
-
-
30.130.041
663.334
31 December
Accumulated
amortization
Net book value
73.789 (157.804.686)
83.138.320
208.104.206
Foreign
currency
1 January
Cost
Net book value
Provisions for
translation
2004
Additions
Disposals
Transfers
impairment
differences
2004
207.854.209
32.980.117
(8.318.857)
1.261.631
(4.090.729)
(98.203)
229.588.168
(114.357.649)
(37.045.709)
4.874.172
-
-
79.338
(146.449.848)
93.496.560
31 December
83.138.320
(*)
Effect of merger of Do¤an Prodüksiyon, a subsidiary of the Group, with CNN Türk and sales of Subsidiaries, classified as discontinued
operations (Note 1) and D Turizm in intangible assets.
(**) The effects of 3,37% share sales of POAfi, 2,02% share sales of Do¤an Burda and 2,92% share sales of CNN Türk in intangible assets.
(***) The effects to intangible assets of becoming a subsidiary of POAfi by 44,06% share purchase, purchase of Ifl›l ‹thalat ‹hracat and obtaining
license, territorial and cable broadcasting permissions and brand names with the acquisition of “Star TV ‹ktisadi ve Ticari Bütünlü¤ü” from
Savings Deposit Insurance Fund by Ifl›l TV.
NOTE 21 - ADVANCES RECEIVED
Short-term advances
Order advances received
Other advances received
Long-term advances
Cash advances received from campaign participants
Documented advances received from campaign participants
Other advances received
2005
2004
3.090.137
1.177.231
4.267.368
6.216.091
24.811
6.240.902
29.910.899
10.825.101
125.774
40.861.774
9.683.385
8.826.177
18.509.562
NOTE 22 - RETIREMENT PLANS
There is no retirement plan of the Group other than provision for employment termination benefits as explained in Note 23.
176, 177
NOTE 23 - PROVISIONS
Short-term provisions
Provision for lawsuits
Tax provision (Note 41)
Other
Long-term provisions
Provision for employment termination benefits
2005
2004
19.434.916
9.241.480
24.290.158
52.966.554
22.431.097
19.196.257
1.831.000
43.458.354
27.119.217
27.119.217
30.054.866
30.054.866
There are no agreements for pension commitments other than the legal requirement as explained below:
Under the Turkish Labour Law, the Holding is required to pay termination benefits to each employee who has completed one year of service and
who achieves the retirement age (58 for women and 60 for men), whose employment is terminated without due cause, is called up for military
service or who dies. Since the legislation was changed on 8 September 1999 there are certain transitional provisions relating to length of service
prior to retirement.The amount as of 31 December 2005 payable consists of one month’s salary limited to a maximum of YTL 1.727,15 (31
December 2004: YTL 1.574,74) for each year of service.
In addition, according to the Press sector regulations, companies should make payments to personnel who work for a minimum of 5 years and
whose employment is terminated without due cause. The maximum payable amount is 30 days’ salary for each year.
The liability is not funded, as there is no funding requirement.
The provision has been calculated by estimating the present value of the future probable obligation of the Holding arising from the retirement of the
employees.
CMB Accounting Standards requires actuarial valuation methods to be developed to estimate the Group’s obligation under defined benefit plans.
Accordingly the following actuarial assumptions have been used in the calculation of the total liability.
Discount rate
Turnover rate to estimate the probability of retirement
2005
5,49%
93%
2004
5,45%
94%
The principal assumption is that the maximum liability for each year of service will increase in line with inflation. Thus, the discount rate applied
represents the expected real rate after adjusting for the anticipated effects of future inflation. As the maximum liability is revised semi-annually, the
maximum amount of YTL 1.770,62 at 1 January 2006 will be taken into consideration in calculating the reserve for employment termination benefit
(1 January 2005: YTL 1.648,90).
NOTE 23 - PROVISIONS (Continued)
Movements in the reserve for employment termination benefits during the years ended 31 December 2005 and 2004 are as follows:
1 January
Acquisitions (*)
Sale of Subsidiary
Effect of change in Joint Venture ownership rate (*)
Charge for the period
Disposals
Monetary gain
31 December
2005
30.054.866
8.981.668
(8.153.649)
(354.464)
3.538.206
(6.947.410)
27.119.217
2004
20.603.196
180.678
6.643.677
7.397.792
(2.497.247)
(2.273.230)
30.054.866
(*) The effects of the opening balances of the Subsidiaries’ acquired in current period and of the change in Joint Venture participation rates in the
current period.
NOTE 24 - MINORITY INTERESTS
Movements of the minority interests for the year ended 31 December 2005 and 2004 are as follows:
1 January
Effects of corrections (Note 2.7)
Capital increase
Sales of Subsidiaries
Minority interest arising from the acquisition of a new subsidiary
Dividend payments
Other movements
Net income
31 December
2005
974.366.277
(10.079.300)
(895.385)
3.518.924
(355.017.021)
144.017.940
(4.996.176)
(836.840)
41.638.666
791.717.085
2004
841.703.723
(11.250.564)
16.528.616
108.520.360
1.568.765
(26.662.757)
(5.371.087)
49.329.221
974.366.277
NOTE 25 - CAPITAL/ADJUSTMENT TO SHARE CAPITAL
Do¤an Holding adopted the registered share capital system available to companies registered with the CMB and set a limit on its registered share
capital representing registered type shares with a nominal value of TL 10.000 Do¤an Holding’s authorised, historical and paid-in share capital at 31
December 2005 and 2004 are as follows:
Limit on registered share capital (historical)
Share capital
2005
YTL
2.000.000.000
735.288.208
2004
YTL
2.000.000.000
735.288.208
178, 179
NOTE 25 - CAPITAL/ADJUSTMENT TO SHARE CAPITAL (Continued)
The shareholder structure of the Holding at 31 December 2005 and 2004 is summarised as follows:
Share %
52,00
7,72
1,64
1,04
1,04
1,04
1,04
2005
382.349.868
56.694.341
12.092.273
7.653.914
7.653.914
7.653.914
7.653.914
Share %
52,00
11,72
1,64
0,04
0,04
0,04
0,04
2004
382.349.868
86.106.341
12.092.273
300.914
300.914
300.914
300.914
Total Do¤an family and companies owned by Do¤an family
65,52
481.752.138
65,52
481.752.138
Istanbul Stock Exchange
34,29
0,19
100
252.131.806
1.404.264
735.288.208
34,29
0,19
100
252.131.806
1.404.264
735.288.208
Adilbey Holding
Ayd›n Do¤an
Ifl›l Do¤an
Vuslat Do¤an Sabanc›
Hanzade V. Do¤an
Y. Begümhan Do¤an Faralyal›
Adjustment to share capital
Total share capital
804.735.232
804.735.232
1.540.023.440
1.540.023.440
Adjustment to share capital represents the restatement effect of cash contributions to share capital at year-end equivalent purchasing power.
NOTE 26 - CAPITAL RESERVES
Capital reserves as of 31 December 2005 and 2004 is as follows:
2005
630.275
1.128.199.721
1.128.829.996
Share premium
Financial assets fair value reserve (Note 2)
Restatement difference of shareholders’ equity
Total capital reserves
Restated
2004
630.275
23.811.453
1.128.199.721
1.152.641.449
Previously
reported
2004
630.275
1.128.199.721
1.128.829.996
The restated amounts and restatement differences of the items disclosed with their historical amounts in Notes 25 and 27 as of 31 December 2005
and 2004 are as follows:
Share capital
Share premium
Legal reserves
Other reserves
Historical
amount
735.288.208
630.275
7.915.090
82.871.964
5.587.343
832.292.880
2005
Restated
amount
1.540.023.440
738.390
35.370.794
330.090.503
54.269.474
1.960.492.601
Restatement
difference
804.735.232
108.115
27.455.704
247.218.539
48.682.131
1.128.199.721
Historical
amount
735.288.208
630.275
7.915.090
82.871.964
5.587.343
832.292.880
2004
Restated
amount
1.540.023.440
738.390
35.370.794
330.090.503
54.269.474
1.960.492.601
Restatement
difference
804.735.232
108.115
27.455.704
247.218.539
48.682.131
1.128.199.721
NOTE 26 - CAPITAL RESERVES (Continued)
For the purposes of profit distribution in accordance with related CMB regulations, items of statutory shareholders’ equity such as “Share Capital,
Share Premium, Legal Reserves, Other Reserves, Special Reserves and Extraordinary Reserves” are presented at their historical amounts. The
differences between the inflated and historical amounts of these items are presented in shareholders’ equity as a total restatement difference.
The restatement difference of shareholders’ equity can only be netted-off against prior years’ losses and used as an internal source of capital
increase where extraordinary reserves can be netted-off against prior years’ losses, distribution of bonus shares and dividends to shareholders.
Moreover, in the capital increases through own resources, the lower amount of amounts found as a result of CMB accounting standards
applications and those in the statutory records will be taken as basis.
NOTE 27 - PROFIT RESERVES
Profit reserves at 31 December 2005 and 2004 are as follows;
Legal reserves
Other reserves
Foreign currency translation differences
Total profit reserves
2005
7.915.090
82.871.964
5.587.343
(4.358.115)
92.016.282
2004
7.915.090
82.871.964
5.587.343
(42.417.829)
53.956.568
NOTE 28 - RETAINED EARNINGS
The legal reserves consist of first and second reserves, appropriated in accordance with the Turkish Commercial Code (TCC). The TCC stipulates
that the first legal reserve is appropriated out of statutory profits at the rate of 5% per annum, until the total reserve reaches 20% of the Company’s
paid-in share capital. The second legal reserve is appropriated at the rate of 10% per annum of all cash distributions in excess of 5% of the paid-in
share capital. Under the TCC, the legal reserves can only be used to offset losses and are not available for any other usage unless they exceed 50%
of paid-in share capital.
Public companies distribute dividends according to CMB regulations as follows:
In accordance with Communiqué XI/25, effective from 1 January 2004, companies are obliged to distribute at least 30% of their distributable profit
arising from the activity, which is calculated based on the financial statements prepared in accordance with accounting principles described in Note
2. Based on the decision of the General Assembly, the distribution of a minimum of 30% of the distributable profit can be made as cash or as
bonus shares or as a combination of a certain percentage of cash and bonus shares.
In accordance with the CMB regulation dated 25 February 2005 and decree 7/242, when calculating the net distributable consolidated profit, the
net profit of Subsidiaries that have not agreed in the general assembly to distribute dividends over the current year profits, will be deducted from the
net consolidated profit.
180, 181
NOTE 28 - RETAINED EARNINGS (Continued)
In accordance with the Communiqué No: XI-25, the shareholders’ equity schedule, is as below:
Share capital
Share premium
Legal reserves
Financial assets fair value reserve (Note 2)
Other reserves
Restatement difference of shareholders’ equity (Note 27)
Foreign currency translation differences
Retained earnings/Accumulated deficit
Total shareholders’ equity
2005
735.288.208
630.275
7.915.090
82.871.964
5.587.343
1.128.199.721
(4.358.115)
636.356.508
19.122.328
2.611.613.322
Restated
2004
735.288.208
630.275
7.915.090
23.811.453
82.871.964
5.587.343
1.128.199.721
(42.417.829)
263.023.110
(233.839.080)
1.971.070.255
Previously
reported
2004
735.288.208
630.275
7.915.090
82.871.964
5.587.343
1.128.199.721
(42.417.829)
239.285.805
(186.290.322)
1.971.070.255
At the General Assembly Meeting of Do¤an Holding for year 2004 held on 11 August 2005, it has decided that no dividend will be distributed from
2004 profit amounting to YTL 239.285.805. This decision was given due to the fact that the remaining profit after netting off the accumulated deficit
for prior years that were resulted from first time inflation accounting application at 31 December 2003 amounting to YTL 186.290.322 is less than
the total net income of YTL 69.119.138 of the Holding‘s subsidiaries, associates and joint ventures which have not hold their general assembly
meetings yet or decided not to distribute profit.
As discussed in Notes 14 and 2.7, subsequent to the issuance of the financial statements of POAfi at 31 December 2004, which was a Joint
Venture at 31 December 2004 and became a Subsidiary with Do¤an Holding’s current year acquisitions, adjustments were made to the acquisition
costs of certain fixed assets for the application of Tax Law No. 5024. The effect of these adjustments pertaining to 2004 financial year and which
were realised after the issuance of 31 December 2004 consolidated financial statements, amounted to YTL 44.877.447 (YTL 19.769.703 with the
Holding’s ownership interest) and were reflected to the consolidated financial statements through reductions in 2005 opening retained earnings and
deferred tax assets.
NOTE 29 - FOREIGN CURRENCY POSITION
Assets and liabilities denominated in foreign currency held by the Group at 31 December 2005 and 2004 are as follows:
2005
Assets:
Trade receivables and due from related parties
Inventories
Total assets
Liabilities:
Short portion of long-term bank borrowings
Advances received
Short–term trade payables and due to related parties
Other short-term trade payables
Other financial liabilities
Other financial liabilities
Advances received
Total liabilities
Net foreign currency position
Off-balance sheet derivative instruments net position
USD
EURO
Other
Total
213.248.776
116.406.231
483
2.163.867
501.961
332.321.318
145.933.529
27.221.035
2.815.386
833.062
39.597.812
1.143
216.401.967
53.969
627.937
1.341
1.318
684.565
359.236.274
144.255.203
2.817.210
2.998.247
39.597.812
503.104
549.407.850
242.769.929
318.736.124
416
562.408.703
299.946.146
1.244.801.123
231.240.716
136.731.834
3.562.230
3.040.197.221
35.465.306
14.532.789
127.265
31.955.196
517.744
865.608
68.888.798
100.754.736
13.591.073
266.698.515
632.082
1.233.767
1.197.046
5.363.408
8.426.303
278.867.317
334.502.680
127.681
595.560.945
517.744
300.811.754
1.319.053.329
331.995.452
136.731.834
17.153.303
3.315.322.039
(2.707.875.903)
(50.296.548)
(7.741.738)
(2.765.914.189)
-
-
-
-
182, 183
NOTE 29 - FOREIGN CURRENCY POSITION (Continued)
2004
USD
EURO
Other
Total
Assets:
Cash and cash equivalents and reserve deposits
with the Central Bank of Turkey
Marketable securities
Originated loans
Trade receivables and due from related parties
Inventories
Total assets
856.600.070
814.309.272
1.407.817.166
11.771.000
68.696.546
19.483
12.476.703
38.000
305.485
3.172.033.725
156.074.542
53.468.948
416.843.525
18.000
19.011.307
1.196.441
4.168.873
42.775.000
678
693.557.314
37.278.463
1.195.000
17.250.000
122.000
602.129
9.610
205.000
56.662.202
1.049.953.075
868.973.220
1.841.910.691
11.911.000
88.309.982
1.225.534
16.850.576
42.813.000
306.163
3.922.253.241
Liabilities:
Short portion of long-term bank borrowings
Deposits
Other payables
Advances received
Short-term trade payables and due to related parties
Provisions
Total liabilities
1.710.674.682
130.522.081
1.491.396.446
73.124.994
1.192.000
5.824.952
295.783.732
781.457.690
3.364.000
309.321
207.000
4.493.856.898
109.688.969
5.911.403
588.112.746
4.821.168
16.000
2.016.081
45.765.968
114.593.535
5.226
870.931.096
2.906.968
926.437
55.992.000
514.000
85.000
7.423.455
3.618.608
71.466.468
1.823.270.619
137.359.921
2.135.501.192
78.460.162
1.293.000
7.841.033
348.973.155
899.669.833
3.364.000
314.547
207.000
5.436.254.462
(1.321.823.173)
(177.373.782)
(14.804.266)
(1.514.001.221)
58.561.000
7.420.000
4.215.000
70.196.000
Net foreign currency position
Off-balance sheet derivative instruments net position
Following exchange rates have been used in the translation of foreign currency denominated balance sheet items as of 31 December 2005; YTL
1,3418=$ 1 and YTL 1,5875=Euro 1 (31 December 2004: YTL 1,3421=$ 1 and YTL 1,8268=Euro 1).
NOTE 30 - GOVERNMENT GRANTS
Investment incentive allowance
2005
85.216.513
2004
117.989.248
NOTE 31 - PROVISIONS, COMMITMENTS AND CONTINGENT LIABILITIES
Commitments and contingencies, from which the management does not anticipate any significant losses or liabilities are summarised below.
Guarantees and commitments given - Continuing operations:
a. Commitments given
Letters of guarantee
Subsidiary shares given as guarantee
Guarantee notes
2005
2004
363.778.078
328.879.869
20.853.730
713.511.677
110.788.827
211.895.522
32.200.991
354.885.340
The Group has provided bail and mortgages to third parties in the amounts of YTL 303.831.410 (31 December 2004: YTL 502.968.698) and YTL
28.109.707 (31 December 2004: YTL 124.390.363). Moreover pawn pledges of the Group made to the Treasury Undersecretariat and Northern
Cyprus Ministry of Finance is YTL 8.192.300 in accordance with Insurance Audit Law (31 December 2004: YTL 8.192.300).
b. Barter Agreements:
The Group, as a common practice in the media segment, entered into Barter agreements. These agreements involve the exchange of goods or
services without cash collections or payments. As of 31 December 2005, the Group has an advertisement commitment of YTL 15.324.000 (31
December 2004: YTL 13.591.405), and a right to obtain service and goods in the amount of YTL 18.585.000 (31 December 2004: YTL 9.236.869).
c. Court cases:
Law cases against the Group amount to YTL 118.921.499 at 31 December 2005 (31 December 2004: YTL 94.834.251).
A provision in the amount of YTL 19.434.916 (31 December 2004: YTL 22.431.097) was made at the end of the evaluation of the legal consultation
regarding the legal, labour, trade, and administrative lawsuits against the Company, and cases with similar nature (Note 23).
d. Other:
In accordance with the agreement dated 11 April 2005 mentioned in Note 35, warranties and declarations have been made to Fortis Bank by the
Holding and other real and legal sellers (“Sellers”) regarding the financial structure of D›flbank, its employees, fundamental intellectual rights,
current contractual relationships, compliance of operations with the legislation and ownership of shares. If the abovementioned warranties and
declarations are not true, there are clauses for compensating Fortis Bank by the Sellers. Therefore Holding;
-
Provided that the agreement conditions are met, and within some limits, Holding will be responsible for 80,33% of the part that corresponds to
its share of losses that could arise due to the non- fulfillment of the Agreement’s terms and/or collaterals given in the scope of this Agreement,
-
Provided that the agreement conditions are met and within certain limits, Holding will be responsible if losses exceed EUR 100.000 on a single
event basis or EUR 1.000.000 in total,
-
Holding will not be held responsible for the losses and expenses that could rise prospectively regarding the D›flbank Mensuplar› Emekli Sand›¤›
Vakf› and D›flbank Mensuplar› Güvenlik Vakf›.
Fortis Bank does not accept any responsibility due to grounds of materiality for tax lawsuits some of which are previously announced to public and
for amounts related to loans under legal follow-up amounted USD 6.000.000 and YTL 4.178.006 at the closing date of Agreement.
The abovementioned responsibilities of Holding will end at the end of 5 years for the issues related with tax following 1 January 2006, and at 31
March 2007 for the issues that are not related with tax.
184, 185
NOTE 31 - PROVISIONS, COMMITMENTS AND CONTINGENT LIABILITIES (Continued)
Guarantees and commitments given - discontinued operations:
In the banking segment, the normal course of banking activities requires the undertaking of various commitments and it incurs certain contingent
liabilities that are not presented in the accompanying financial statements, including letters of guarantee, acceptance credits, letters of credit and
off-balance sheet derivative instruments. The management does not expect any material losses as a result of these transactions. The following is a
summary of significant commitments and contingent liabilities at 31 December 2004.
a. Credit related commitments:
The primary purpose of these instruments is to ensure that funds are available to a customer as required. Guarantees and standby letters of credit,
which represent irrevocable assurances that the bank will make payments in the event that a customer cannot meet its obligations to third parties,
carry the same credit risk as loans. Documentary and commercial letters of credit, which are written undertakings by the companies in the finance
segment on behalf of a customer authorising a third party to draw drafts on the Group up to a stipulated amount under specific terms and
conditions, are collateralised by the underlying shipments of goods to which they relate and therefore have significantly less risk.
Cash requirements under guarantees and standby letters of credit are considerably less than the amount of the commitment because the Group
does not generally expect the third party to draw funds under the agreement.
The total outstanding contractual amount of commitments to extend credit does not necessarily represent future cash requirements, since many of
these commitments will expire or terminate without being funded.
The following table shows the outstanding credit related commitments of the discontinued operations as at 31 December 2004:
31 December 2004
Letters of guarantee
- Foreign currency
- YTL
Letters of credit
Acceptance credits
Other commitments and contingencies
Less: Provision for credit related commitments
749.457.000
474.715.000
517.495.000
70.311.000
95.124.000
1.907.102.000
(17.880.000)
1.889.222.000
b. Fiduciary activities:
The Subsidiary of the Group operating in banking sector provides custody services to third parties which involve the Group making allocation and
purchase and sale decisions. Those assets held in a fiduciary capacity are not included in these consolidated financial statements. At the balance
sheet date the Group has custody accounts amounting to YTL 4.926.811.000.
NOTE 31 - PROVISIONS, COMMITMENTS AND CONTINGENT LIABILITIES (Continued)
c. Commitments under derivative financial instruments:
The breakdown of forward and spot currency purchase/sale transactions at 31 December 2004 are as follows:
Forward currency purchases
Currency swap purchases
Interest rate swap purchases
Future purchases
Option purchases
Total
USD
36.624.000
126.463.000
101.250.000
41.595.000
24.904.000
330.836.000
EURO
32.012.000
21.777.000
11.515.000
65.304.000
2004
Other
7.440.000
14.559.000
7.395.000
29.394.000
YTL
47.990.000
46.148.000
24.807.000
118.945.000
Total
124.066.000
187.170.000
101.250.000
70.767.000
61.226.000
544.479.000
Forward currency sale
Currency swap sales
Interest rate swap sales
Future sales
Option sales
Total
61.585.000
50.894.000
101.250.000
33.375.000
25.171.000
272.275.000
24.604.000
21.777.000
11.503.000
57.884.000
4.578.000
4.993.000
15.608.000
25.179.000
32.949.000
141.277.000
24.481.000
198.707.000
123.716.000
197.164.000
101.250.000
70.760.000
61.155.000
554.045.000
58.561.000
7.420.000
4.215.000
(79.762.000)
(9.566.000)
Off-balance sheet derivative
instruments net position
NOTE 32 - BUSINESS COMBINATIONS
Significant acquisitions and disposals of the Group for the year ended 31 December 2005:
Acquisitions:
Holding purchased T. ‹fl Bankas› A.fi.’s YTL 150.099.673 nominal value (A/B) group shares, Camifl Yat›r›m Holding A.fi.’s YTL 16.905.378 nominal
value (A/B) group shares and Camifl Madencilik A.fi.’s YTL 16.905.378 nominal value (A/B) group shares in POAfi share capital, a total of YTL
183.910.429 nominal value (A/B) group shares (44,06% of POAfi share capital) for USD 616.000.000 with a share sale agreement that was signed
at 2 September 2005. With this transaction, Holding's share at POAfi’s capital increased from 44,31% to 88,36%. Share transfer amount was
specified by bargaining procedure by considering 2005 ISE price development. As a result of mutual agreement, different prices for A and B group
shares has not been calculated. USD 316.000.000 of the purchase consideration was paid in cash as of 2 September 2005 and the remaining
amount was decided to be paid according to payment schedule that was outlined at sale agreement as stated below:
Maturity
2 September
2 September
2 September
2 September
2 September
2006
2007
2008
2009
2010
YTL equivalent
33.545.000
33.545.000
67.090.000
134.180.000
134.180.000
402.540.000
Amount (USD)
25.000.000
25.000.000
50.000.000
100.000.000
100.000.000
300.000.000
A compound interest will be applied to the annual interest rate of LIBOR+1% to installments for the period between share transfer date and
payment date and interests will be paid together with installments. Pledge and usufruct rights were established on entire shares subject to sale as
guarantee for the part that will be paid in installments of the share purchase cost.
186, 187
NOTE 32 - BUSINESS COMBINATIONS (Continued)
An additional agreement was signed at 6 January 2006, revising the payment schedule which was signed at 2 September 2005. At the signing date
of the new agreement, a principle payment of USD 100.000.000 was made by the Holding and payment schedule was revised. After this payment,
Holding, made an early principle payment amounting to USD 100.000.000 at 27 January 2006. With the abovementioned payments, payment
schedule for the remaining debt is presented below:
Maturity
2 September 2008
2 September 2009
2 September 2010
YTL equivalent
26.836.000
53.672.000
53.672.000
134.180.000
Amount (USD)
20.000.000
40.000.000
40.000.000
100.000.000
Together with the additional agreement, the prohibition of POAfi share transfer to third parties in 180 days after 2 September 2005, the date of the
first agreement, is abolished.
Do¤an Holding decided to collect the publicly held shares of POAfi amounting to a nominal value of YTL 48.586.587 through tender offer between
14 October 2005 and 31 October 2005. The shareholders holding the shares with the nominal value of YTL 19.285.118, who represent 4,62% of
POAfi’s share capital, participated to this tender offer announced by the Holding, a total of YTL 87.940.138 was paid for the abovementioned
shares. After this call, the shares with nominal value of YTL 388.148.531 that represents 92,98% of POAfi’s YTL 417.450.000 amounted paidcapital belongs to the Holding, the shares with nominal value of YTL 33.81 that represents 0,0008% belongs to Do¤an Enerji Yat›r›mlar› Sanayi ve
Ticaret and the remaining part, 7,02% is publicly quoted. The finalisation of the tender offer did not make any change at POAfi’s management and
control because Holding was the major shareholder of POAfi before the call.
According to the purchase agreement signed with the Savings and Deposits Insurance Fund, Ifl›l TV acquired “Star TV Ticari ve ‹ktisadi Bütünlü¤ü”
for a consideration of YTL 414.388.000 (USD 306.500.000) on 17 November 2005 resulting in a goodwill amounting to YTL 238.925.377 (Note 17).
Negative goodwill and acquired net assets arising from 44,06% POAfi acquisition and goodwill and acquired net assets arised from acquisition of
“Star TV Ticari ve ‹ktisadi Bütünlü¤ü” as of 31 December 2005 are as follow:
Goodwill
Negative
arising from Star TV
goodwill arising
Ticari ve ‹ktisadi
from POAfi acquisition
Bütünlü¤ü acquisition
Total cash consideration
821.990.400
414.388.000
Less: net assets acquired at fair value
(933.197.410)
(175.462.623)
(Negative goodwill)/goodwill
(111.207.010)
238.925.377
Current assets
Non-current assets
Current liabilities
Less: Minority interest
713.693.340
1.346.529.422
(831.050.610)
(294.521.709)
(1.453.033)
198.330.558
(19.456.310)
(3.411.625)
-
933.197.410
175.462.623
(111.207.010)
238.925.377
Less: Cash and cash equivalents in subsidiaries acquired
821.990.400
(51.561.196)
414.388.000
-
Cash outflow on acquisition
770.429.204
414.388.000
Fair value of net assets
(Negative goodwill)/goodwill
In accordance with IFRS 3, Business Combinations, the Holding shall allocate costs related to the purchase of 44,06% of POAfi shares, by
recognizing identifiable assets, liabilities and contingent liabilities of POAfi at their fair value. Fair value calculation of assets, liabilities and
contingent liabilities acquired by the Holding is continuing as of the preparation date of the consolidated financial statements and will be finalized in
twelve months after the acquisition date in accordance with IFRS 3. The Group classified negative goodwill amounting YTL 111.207.010 resulting
from the purchase of 44,06% POAfi shares in “Other Operating Income”.
Negative goodwill amounting YTL 11.260.825 resulting from purchase of 4,62% POAfi shares in exchange of YTL 87.940.138 after of the call
process ended at 31 October 2005 by the Group is classified in “Other Operating Income”.
The Group has acquired 1,05% of the shares of Kanal D for YTL 6.861.500 at 10 January 2005 and therefore goodwill amounting to YTL 6.024.816
has emerged (Note 17).
The Group has acquired 10,5% of the shares of Ray Sigorta for YTL 3.400.550 at 29 June 2005 and therefore negative goodwill amounting YTL
902.240 has emerged and this amount has classified under “Other Operating Income”.
Disposals:
The shares of Do¤an Yay›n Holding, which has a share capital of YTL 552.000.000, corresponding to 0,23% of its share capital, have been sold on
7 February 2005 for an amount of YTL 4.987.527.
Group sold 3,37% shares of POAfi to nine different foreign investors for a total consideration of YTL 52.371.995 over YTL 4.50 for a nominal value
of YTL 1 share in the Wholesale Market of ISE. Such sale resulted to a reduction in the ownership interest of the Group in POAfi.
As disclosed in Note 35, the Group finalized the sale of Subsidiaries, which were classified as discontinued operations, on 4 July 2005. The sale
gain according to this transaction amounted to YTL 352.054.478 has classified under “Other Operating Income” in consolidated income statement.
188, 189
Significant acquisitions and disposals of the Group for the year ended 31 December 2004:
Acquisitions:
The Group has acquired 66,41% of the shares of Do¤an D›fl Ticaret for YTL 20.180.047 and therefore goodwill amounting to YTL 10.791.007 has
emerged.
The Group has acquired 35,30% of the shares of Orta Anadolu Otomotiv for YTL 11.666.789 and therefore goodwill amounting to YTL 1.859.619
has emerged.
Less: net assets acquired at fair value
Goodwill (Note 17)
Current assets
Non-current assets
Current liabilities
Less: Minority interest
2004
31.846.835
(19.196.209)
12.650.626
12.309.969
55.136.472
13.692.331
(59.898.403)
(475.395)
(1.568.765)
Fair value of net assets
19.196.209
Goodwill (Note 17)
12.650.626
Less: Cash and cash equivalents in subsidiaries acquired
Cash outflow on acquisition
31.846.835
(12.309.969)
19.536.866
Disposals:
a) Do¤an Holding sold 30.000 million shares of its Subsidiary, Do¤an Yay›n, amounting to a nominal value of YTL 30.000.000 out of the total
nominal share capital of YTL 300.093.885 to Deutsche Bank A.G. on 22 January 2004 for a total consideration of YTL 159.723.776 in the
Wholesale Market of ISE. The share of Do¤an Holding in Do¤an Yay›n decreased from 76,80% to 66,80% and accordingly, a similar decrease
has been realised in the effective rate of Subsidiaries and Joint Ventures of Do¤an Yay›n. (Note 2) The total net assets sold amounted to YTL
98.873.337 and accordingly, a gain of YTL 60.850.439 has been reflected in “Other Operating Income” in the consolidated statement of
income (Note 38). Historical income earned as a result of share sales is decided to be added to the share capital of the Holding in accordance
with the Corporation Tax Law temporary article No.28.
b) Do¤an Holding sold 27.615 million shares of its Subsidiary, Hürriyet, amounting to a nominal value of YTL 27.615.244 out of the total nominal
share capital of YTL 416.742.560 to foreign investors. on 4 November 2004 for a total consideration of YTL 78.531.019 in the Wholesale Market
of ISE. After this sale transaction, the interest of the Group in Hürriyet decreased from 66,63% to 60%. The net asset of Hürriyet that was
disposed of amounted to YTL 37.330.410 and the Group recognized a gain of YTL 41.200.609. This gain was included in “Other operating
income” in these consolidated financial statements (Note 38).
NOTE 33 - SEGMENT REPORTING
a) External Revenues
Media
Energy
Other
2005
1.616.254.602
7.595.890.671
592.182.122
9.804.327.395
2004
1.321.801.925
4.912.893.972
284.959.204
6.519.655.101
2005
124.962.755
202.080.724
381.765.168
708.808.647
2004
97.577.988
95.670.953
44.269.432
237.518.373
b) Operating profit
Media
Energy
Other
c) Segmental analysis for the year ended 31 December 2005
External revenues
Intra segment revenues
Inter segment revenues
Media
1.616.254.602
563.948.190
16.534.302
Energy
7.595.890.671
7.081.879
Other
592.182.122
1.887.030
291.785.196
Inter
segment
elimination
-
Combined revenues
2.196.737.094
7.602.972.550
885.854.348
-
10.685.563.992
Combined cost of sales
(1.716.332.365)
(7.185.038.277)
(817.529.779)
-
(9.718.900.421)
Revenues
Cost of sales
1.632.788.904
(1.252.094.271)
7.602.972.550
(7.185.038.277)
883.967.318
(814.929.754)
(315.401.377)
281.172.974
9.804.327.395
(8.970.889.328)
380.694.633
417.934.273
69.037.564
(34.228.403)
833.438.067
(277.956.672)
(23.516.020)
18.309.706
(198.328.022)
25.269.348
(52.359.459)
(122.690.334)
458.761.351
28.515.248
50.301.653
(30.668.050)
(268.169)
(548.673.375)
429.846.629
(5.802.674)
Operating profit
before inter segment elimination
97.531.647
192.516.140
433.623.829
(14.862.969)
708.808.647
Profit elimination due to
inter segment elimination
27.431.108
9.564.584
(51.858.661)
14.862.969
-
124.962.755
202.080.724
381.765.168
-
708.808.647
Gross profit
Operating expenses
Other operating income/(expenses), net
Financial income/(expenses), net
Operating profit
after inter segment elimination
Total
9.804.327.395
565.835.220
315.401.377
190, 191
NOTE 33 - SEGMENT REPORTING (Continued)
Segmental analysis for the year ended 31 December 2004
External revenues
Intra segment revenues
Inter segment revenues
Media
1.321.801.925
668.282.174
12.178.125
Energy
4.912.893.972
2.263.888
Other
284.959.204
27.954.373
231.463.999
Inter
segment
elimination
-
Combined revenues
2.002.262.224
4.915.157.860
544.377.576
-
7.461.797.660
Combined cost of sales
(1.585.442.617)
(4.645.700.153)
(440.900.862)
-
(6.672.043.632)
Revenues
Cost of sales
1.333.980.050
(1.006.701.365)
4.915.157.860
(4.645.700.153)
516.423.203
(415.825.839)
(245.906.012)
207.860.095
6.519.655.101
(5.860.367.262)
327.278.685
269.457.707
100.597.364
(38.045.917)
659.287.839
(219.250.987)
(37.762.463)
3.722.382
(114.816.037)
(47.654.478)
(11.058.599)
(92.188.568)
84.114.572
(4.124.807)
30.904.171
(3.903.021)
(9.751.631)
(395.351.421)
(5.205.390)
(21.212.655)
Operating profit
before inter segment elimination
73.987.617
95.928.593
88.398.561
(20.796.398)
237.518.373
Profit elimination due to
inter segment elimination
23.590.371
(257.640)
(44.129.129)
20.796.398
-
Operation profit
after inter segment elimination
97.577.988
95.670.953
44.269.432
-
237.518.373
Gross profit
Operating expenses
Other operating income/(expenses), net
Total
6.519.655.101
696.236.547
245.906.012
d) Segment assets employed
2005
2004
3.249.915.158
4.707.887.380
5.094.272.203
8.721.689.122
1.933.025.436
2.067.885.354
4.183.171.134
Total combined
13.052.074.741
16.905.771.046
Less: Segment elimination
(5.045.158.184)
(5.160.340.290)
Total assets as per these
consolidated financial statements
8.006.916.557
11.745.430.756
Net assets
Discontinued operations
Media
Energy
Other
Total
1.838.817.769
2.179.353.106
3.879.705.736
7.897.876.611
1.377.164.474
1.325.128.384
952.384.982
3.531.037.583
7.185.715.423
(5.286.263.289)
(5.214.645.168)
2.611.613.322
1.971.070.255
791.717.085
974.366.277
3.403.330.407
2.945.436.532
Total assets
Media
Energy
Other
Less: Segment elimination
Shareholders' equity
Minority interests
Total net assets as per these
consolidated financial statements
e) Capital expenditures for property, plant and equipment, intangible assets and investment properties and depreciation and amortization charge
2005
2004
Capital expenditures
Media
Energy
Other
18.978.886
100.737.441
165.710.704
24.797.939
73.952.330
94.479.677
34.800.996
19.762.877
Total
310.224.970
222.995.880
Depreciation and amortization charge
Media
Energy
Other
31.910.370
101.810.634
95.281.374
17.521.151
67.226.224
103.244.750
34.726.560
17.007.333
Total
246.523.529
222.204.867
Goodwill and amortization of goodwill have not been included in capital expenditures and depreciation charge.
192, 193
f) Interest in Joint Ventures
Aggregate amounts of current assets, non-current assets, current liabilities, non-current liabilities and net income related to Joint Ventures, which
are proportionately consolidated as explained under Note 2.6 iii in these consolidated financial statements, are as follows on a combined basis:
Current assets
Non-current assets
Total assets
2005
36.773.718
28.112.752
64.886.470
2004
637.047.452
1.496.470.032
2.133.517.484
Current liabilities
Shareholders’ equity
Total liabilities and shareholders' equity
15.173.644
8.196.842
41.515.984
64.886.470
752.640.115
399.046.535
981.830.834
2.133.517.484
2005
3.417.999.813
322.903.118
46.512.645
2004
4.978.393.352
283.959.975
110.271.941
Revenues
Gross profit
Net income
g) Minority interest
2005
Media
Energy
Other
Do¤an
family
21.905.320
50.492.898
Other
460.375.062
146.879.615
112.064.190
72.398.218
719.318.867
2004
Total
482.280.382
146.879.615
162.557.088
Do¤an
family
23.247.804
5.928.565
51.229.794
Other
424.674.507
348.597.224
570.414
120.117.969
Total
447.922.311
354.525.789
570.414
171.347.763
791.717.085
80.406.163
893.960.114
974.366.277
h) Non-cash expenses
Significant non-cash expenses included in segment results are as follows:
2005
Interest expense accrual
Impairment of programme stocks
Impairment of intangible assets
Impairment of investment properties
Media
7.124.427
12.284.829
8.093.171
563.000
4.442.000
2.174.693
3.042.376
2.815.320
40.539.816
Energy
8.337.195
4.041.035
118.755
12.496.985
Other
12.061.364
10.587.598
92.939
1.244.758
23.986.659
Total
27.522.986
26.913.462
8.093.171
655.939
4.442.000
3.538.206
3.042.376
2.815.320
77.023.460
2004
Amortization of goodwill
Interest expense accrual
Impairment of investment properties
Impairment of programme stocks
Impairment of intangible assets
Impairment of goodwill
Impairment of property, plant and equipment
Media
19.539.014
5.644.000
3.753.104
4.636.958
6.750.082
5.107.984
4.829.000
4.090.729
137.968
54.488.839
Energy
69.248.275
6.641.281
9.758.057
2.053.082
87.700.695
Other
17.317.881
7.909.610
707.752
45.788
1.859.619
794.413
689.393
29.324.456
Total
88.787.289
29.603.162
21.420.771
7.397.792
6.795.870
5.107.984
4.829.000
4.090.729
1.859.619
932.381
689.393
171.513.990
NOTE 34 - SUBSEQUENT EVENTS
i.
Group sold 6,25% shares of POAfi amounting to a nominal value of YTL 26.090.625 to Deutsche Bank A.G., representing 32 foreign corporate
investors, in Wholesale Market at 24 January 2006 for a consideration of YTL 5,35 for a nominal value of YTL 1 share.
ii. As a result of the negotiations with one of the leading oil and gas company of Central Europe, OMV Aktiengesellscahft (“OMV”), about oil and
gas products’ distribution and supply including subjects about refinery, prospect for oil, and production, Group agreed to sell 34% of POAfi
shares. Total consideration to be received is USD 1.054.000.000 which will be collected in advance by the Group. Agreement signed with OMV
at the date 13 March 2006 is subject to the approval of the relevant public authorities in accordance with the legislations. As a result of the sale
agreement, the share of Group in POAfi’s share capital will decrease from 86,7% to 52,7%.
The agreement provides a management structure based on equal partnership with OMV; four members of the POAfi’s board of directors will be
assigned by the Group and the remaining four members by OMV.
iii. Group has decided to establish Gayrimenkul Gelifltirme ve Pazarlama Hizmetleri Ticaret A.fi. with a capital amounting YTL 1.600.000 in order to
operate in dealership and service activities oriented to real estate funding based on mortgage.
iv. 32.478.952 shares of Do¤an Yay›n with a nominal value of YTL 1 each, representing the share capital in the amount of YTL 32.478.952, have
been sold to investors; YTL 4.380.000 to Oz Management LLC, YTL 13.140.000 to Lone Pine Capital LLC, YTL 8.745.784 to Maverick Capital
Ltd, YTL 5.315.000 to Griffin Capital Management Ltd, YTL 450.000 to Shannon River Partners and YTL 448.168 to Black River EMEA Eurasia
Fund Ltd at 15 February 2006.
v. At the board meeting of Do¤an Yay›n, held at 1 February 2006, it was decided to increase the share capital from YTL 576.021 thousand to YTL
608.500 thousand; completely restrict the rights of the current shareholders in the acquiring of new shares in the scope of the authorisation
granted to the Board by the articles of association article 7; allocate all of the 32.478.952 shares with a nominal value of YTL 1 each, to be
issued representing the increased share capital in the amount of YTL 32.478.952 to large and a limited number of foreign corporate investors
who are willing to invest in long-term; prepare the shares with series 11 and to the bearer; and to benefit from the profit if any arises for the first
time in the year 2006.
194, 195
NOTE 35 - DISCONTINUED OPERATIONS
In 2004, Do¤an Holding decided to investigate various types of possibilities including joint venture, partnership and share transfer of D›flbank, due
to the local and global developments in the banking sector Do¤an Holding and some other international banks continued their studies in the first
quarter of 2005, and as stated in the declaration of Do¤an Holding dated 28 March 2005, Do¤an Holding has requested those international banks
to finalise their work and to put forward their bids. Following the evaluation of the relevant bids, a share sale agreement (“agreement”) was signed
with Fortis Bank at 11 April 2005. Pursuant to this agreement;
(1) 227.828.946.000 shares owned by Do¤an Holding A.fi representing 62,6% D›flbank’s total capital;
(2) 36.157.000.000 shares owned by Türk D›fl Ticaret Bankas› Members Pension Fund
Foundation representing 9,93% of D›flbank’s total capital;
(3) 27.792.000.000 shares owned by Türk D›fl Ticaret Bankas› Pension Fund Foundation
representing 7,64% of D›flbank’s share capital;
(4) 14.557.760.000 shares owned by Ayd›n Do¤an representing 4,0% of D›flbank’s total capital;
(5) 4.645.800.000 shares owned by Arzuhan Yalç›nda¤ representing 1,28% of D›flbank’s total capital;
(6) 4.645.800.000 shares owned by Vuslat Do¤an Sabanc› representing 1,28% of D›flbank’s total capital;
(7) 4.645.800.000 shares owned by Hanzade Do¤an representing 1,28% of D›flbank’s total capital;
(8) 4.645.800.000 shares owned by Begümhan Do¤an Faralyal› representing 1,28% of D›flbank’s total capital;
(9) 238.467.000 shares owned by ‹mre Barmanbek representing 0,06% of D›flbank’s total capital
(a total of 325.157.373.000 shares) were agreed to be transferred, on several preconditions and following the obtaining of the required permissions,
and on the specific condition that shares in Ray Sigorta, owned by D›flbank, were sold to Do¤an Holding.
The total purchase price of 325.157.373.000 shares, representing 89,34% of D›flbank’s capital, the entire shares of which are estimated to be
worth EUR 985.000.000 were determined as EUR 880.025.533. Following the fulfillment of all the preconditions stated in the agreement, and the
obtaining of the necessary permissions in accordance with the relevant legislation, the related shares were sold to Fortis Bank on 4 July 2005. The
purchase price was adjusted for the differences in the consolidated equity figures of D›flbank at 31 December 2004 and 31 May 2005, and an
additional payment in the amount of YTL 1.878.000 was made.
NOTE 35 - DISCONTINUED OPERATIONS (Continued)
Results of the years ended 31 December 2005 and 2004 (2004 results are prepared for comparative purposes only) related to discontinued
operations were accounted for as a single item in the consolidated statements of income with the titles “Net Income Related to Discontinued
Operations”. The details of related items as of 31 December 2005 and 2004 are as follows:
2005
2004
612.877.000
(517.877.000)
1.245.183.785
(1.058.773.182)
95.000.000
186.410.603
(36.032.000)
-
(103.958.987)
(72.050.484)
Income related to discontinued operations before taxes on income and minority interests
58.968.000
10.401.132
Taxes on income
Minority interests
(8.171.331)
(37.000)
38.206.069
-
Net income
50.759.669
48.607.201
Consolidation eliminations
29.823.543
23.567.914
Net income related to discontinued operations
80.583.212
72.175.115
2005
9.527.502.899
276.824.496
9.804.327.395
2004
5.986.167.132
533.487.969
6.519.655.101
2005
(293.561.398)
(255.111.977)
(548.673.375)
2004
(126.913.606)
(268.437.815)
(395.351.421)
Revenues
Sales
Cost of sales
Operating profit
Other expenses, net
Net monetary position loss
NOTE 36 - OPERATING INCOME
Net domestic sales
Net foreign sales
Net sales
NOTE 37 - OPERATING EXPENSES
General administrative expenses
Selling, marketing and distribution expenses
Operating expenses
196, 197
NOTE 38 - OTHER INCOME/EXPENSES AND PROFIT/LOSSES
Other operating income and expenses for the periods ended 31 December 2005 and 2004 are as follows:
Other operating income:
Gain on sale of Subsidiary, net (*)
Gain on acquisition of Subsidiary (**)
Automatic sales income
Commission income
Ship operating services income
Service income
Other operating expenses:
Automatic sales expenses
Loss from sales of Subsidiary
Transportation expenses
Ship operating services expenses
Commission expenses
Amortisation of goodwill
Other operating expenses, net
2005
2004
352.510.325
123.370.075
87.552.862
21.492.456
17.678.012
15.185.030
617.788.760
102.051.048
34.421.196
7.776.923
14.659.218
37.483.174
196.391.559
(87.458.588)
(26.913.462)
(13.406.195)
(10.922.619)
(9.359.892)
(8.093.171)
(1.670.282)
(30.117.922)
(187.942.131)
(34.535.234)
(29.603.162)
(24.612.741)
(8.872.352)
(6.795.870)
(2.885.733)
(88.787.289)
(5.504.568)
(201.596.949)
(*) YTL 352.054.478 amounted gain on sale of subsidiary is derived from sales of subsidiaries, which is classified as discontinued operations, by
the Group.
(**) YTL 122.467.835 amounted gain on acquisition of Subsidiary is derived from Group’s current year POAfi acquisition.
NOTE 39 - FINANCIAL EXPENSES
Financial income and expenses for the years ended 31 December 2005 and 2004 are as follows:
Financial income:
Interest income on banks deposits
Foreign exchange gain, net
Interest income on trading and investment securities
Amortized cost valuation income
Due date difference on credit sales
Other interest and commission
Financial income
Financial expenses:
Interest expense on short-term and long-term borrowings
Due date difference on credit purchases
Other
Financial expenses
2005
2004
61.941.963
24.726.703
20.471.812
17.917.955
9.267.976
3.849.089
138.175.498
47.333.058
28.356.687
14.583.033
14.794.239
15.325.052
2.490.724
122.882.793
(128.177.847)
(1.558.579)
(14.241.746)
(143.978.172)
(128.287.553)
(6.545.790)
(9.262.105)
(144.095.448)
(5.802.674)
(21.212.655)
NOTE 40 - NET MONETARY POSITION GAIN/(LOSSES)
With the decision taken at 17 March 2005, the CMB has announced that, effective from 1 January 2005, the application of inflation accounting is
no longer required (Note 2). Since the Group did not apply inflation accounting effective from 1 January 2005 in line with CMB Accounting
Standards, there is no monetary gain/loss for the year ended 31 December 2005.
Net monetary position loss
2005
-
2004
124.599.096
2005
9.241.480
(9.473.558)
(232.078)
2004
19.196.257
(145.543.385)
(126.347.128)
NOTE 41 - TAXES ON INCOME
Corporation and income taxes currently payable (Note 23)
Deferred tax assets – net (Note 14)
Total
Turkish tax legislation does not permit a parent company and its subsidiaries to file a consolidated tax return. Therefore, provisions for taxes, as
reflected in the consolidated financial statements, have been calculated on a separate-entity basis.
Corporation tax rate of the fiscal year 2005 is 30% (2004: 33%). Corporation tax is payable at a rate of 30% on the total income of the companies
after adjusting for certain disallowable expenses, corporate income tax exemptions (gain from associates exemption, etc) and corporate income tax
deductions (like investment allowances). No further tax is payable unless the profit is distributed (except withholding tax at the rate of 19,8% on the
investment incentive allowance utilized within the scope of the Income Tax Law Transitional Article 61).
The Group classified the statutory goodwill arising from the legal mergers in POAfi and Do¤an Gazetecilik as a balancing account, which are neither
assets nor liabilities in nature and did not apply inflation accounting in accordance with the Circular No.17 on Tax Procedural Law, related to
inflation adjustment application dated 24 March 2005. In this context, it was assessed that the impact in reference to the statutory goodwill was a
tax-deductible item.
Dividends paid to non-resident corporations, which have a place of business in Turkey, or resident corporations are not subject to withholding tax.
Otherwise, dividends paid are subject to withholding tax at the rate of 10%. An increase in capital via issuing bonus shares is not considered as a
profit distribution and thus does not incur withholding tax.
Corporations are required to pay advance corporation tax quarterly at the rate of 30% on their corporate income. Advance tax is to be declared by
the 10th day of the second month following each calendar quarter end and is payable by the 17th of the second month following each calendar
quarter end. Advance tax paid by corporations is credited against the annual corporation tax liability. The balance of the advance tax paid may be
refunded or used to set off against other liabilities to the government.
In accordance with Tax Law No: 5024 “Law Related to Changes in Tax Procedure Law, Income Tax Law and Corporate Tax Law” that was
published on the Official Gazette on 30 December 2003 to amend the tax base for non-monetary assets and liabilities, effective from 1 January
2004, the income and corporate taxpayers will prepare the statutory financial statements by adjusting the non-monetary assets and liabilities for the
changes in the general purchasing power of the Turkish Lira. In accordance with the aforementioned law provisions, in order to apply inflation
adjustment, cumulative inflation rate (SIS-WPI) over last 36 months and 12 months must exceed 100% and 10%, respectively. Inflation adjustment
has not been applied as these conditions were not fulfilled in the year 2005.
In Turkey, there is no procedure for a final and definitive agreement on tax assessments. Companies file their tax returns within the 15th of the
fourth month following the close of the financial year to which they relate.
Tax returns are open for 5 years from the beginning of the year that follows the date of filing during which time the tax authorities have the right to
audit tax returns, and the related accounting records on which they are based, and may issue re-assessments based on their findings.
Under the Turkish taxation system, tax losses can be carried forward to offset against future taxable income for up to 5 years. Tax losses can not be
carried back to offset profits from previous periods.
198, 199
NOTE 41 - TAXES ON INCOME (Continued)
There are numerous exemptions in the Corporate Tax Law concerning the corporations. Those related to the Company are as follows:
Dividend income from participation in shares of capital of another full fledged taxpayer corporation (except for dividends from investment funds
participation certificates and investment partnerships shares) are exempt from corporate tax.
Profits from sale of preferential right certificates and share premiums generated from sale of shares at a price exceeding face values of those shares
during incorporations or capital increases of joint stock companies are exempt from corporate tax.
The participation income of corporations participating in 25% or more of the capital of a limited liability or joint stock company which does not have
its legal or business centre in Turkey (except for corporations whose principal activity is financial leasing or investment of marketable securities) for
at least two continuous years 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 are subject to corporate
income tax, or alike, in their country of legal or business centre at the rate of at least 20% (at corporate income tax rate applicable in Turkey for
those companies whose principal activity is financial assurance or insurance) and 75% of the income generated consists of commercial, agricultural
or independent professional service income.
Profit of corporations’ from sale of participation shares and property which have been in their assets at least for two years is exempt from corporate
tax provided that they are added to corporations’ share capital until the end of second calendar year following the year in which sale was realized.
On the other hand, the condition of adding this profit to share capital is not required for corporations other than full fledged taxpayer corporations
and non-resident taxpayer corporations and these profits are accounted under special reserves. In the event that these profits added to share
capital or accounted under special reserves are withdrawn from the entity in any means, transferred to abroad by non-resident taxpayer
corporations or the entity liquidates (except by take over, merger and de-merger) within five years, those profits are considered as profits regarding
that year and are subject to corporate tax.
Capital expenditures, with some exceptions, over YTL 10 thousand are eligible for investment incentive allowance of 40% is exempted from
corporate income tax and this allowance is not subject to withholding tax without the requirement of an investment incentive certificate. Investment
allowances calculated are deferred to the following years in cases where corporate income is insufficient. To benefit from the exemption, investment
incentive certificate is not required. Investment allowances utilised within the scope of investment incentive certificates granted prior to 24 April
2003 in accordance with provisions of Income Tax Law Transitional Article 61 are subject to withholding tax at the rate of 19,8%, irrespective of
profit distribution.
Accordingly, abovementioned profits within trade income/loss are considered in the calculation of corporate income tax.
Apart from the abovementioned exemptions considered in the determination corporate income tax base, allowances stated in Corporate Income Tax
Law Article 14 and reiterated Article 14, and Income Tax Law Article 40 are also taken into consideration.
The taxes on income reflected to the consolidated income statement for the years ended 31 December 2005 and 2004, is summarised as follows:
Current
Deferred (Note 14)
Taxes on income
2005
(47.519.990)
(63.876.695)
(111.396.685)
2004
(55.861.504)
(66.078.749)
(121.940.253)
2005
566.059.505
70.297.003
735.288.208
0,87
0,77
0,10
2004
206.335.967
56.687.143
735.288.208
0,36
0,28
0,08
NOTE 42 - EARNING PER SHARE
Earnings per share based on share groups are as follows:
Net income related to continuing operations
Net income related to discontinued operations
Weighted average number of shares with face value of YTL 1 each
Earning per share (YTL)
- continuing operations
- discontinued operations
NOTE 43 - STATEMENTS OF CASH FLOW
2005
USD (*)
2005
2004
594.425.540
797.600.190
396.086.515
(288.060.809)
335.310.965
(170.430.129)
(45.827.073)
(5.177.679)
420.240.815
(386.519.993)
449.920.253
(228.683.147)
(61.490.767)
(6.947.410)
563.879.126
(405.258.814)
900.563.046
(569.999.789)
(59.920.150)
(2.497.247)
258.973.561
(201.946.950)
(1.876.217)
(27.377.437)
(270.972.417)
(2.517.508)
(36.735.045)
(183.152.723)
(6.863.040)
(32.980.117)
45.543.965
61.110.892
31.314.585
5.615.113
(1.848.612)
(992.085.287)
780.118.404
79.848.322
(314.008.699)
7.534.359
(2.480.467)
(1.331.180.038)
1.046.762.875
107.140.478
(421.336.871)
(520.477.000)
(119.159.475)
(19.536.866)
238.254.796
92.035.382
(190.346.720)
(710.911.178)
2.622.540
(3.723.488)
(2.103.024)
172.594.048
237.001.829
(115.565.613)
290.826.292
3.518.924
(4.996.176)
(2.821.838)
231.586.693
318.009.054
(155.065.940)
390.230.717
16.528.616
(26.662.757)
331.119.949
58.862.304
110.464.675
(463.374.768)
14.632.891
(145.094.792)
377.173.451
273.649.569
397.058.408
532.772.972
(178.288.048)
4
549.799.505
737.720.976
(118.439.411)
1.034.448.435
4
(367.671.039)
579.186.874
(493.341.000)
777.152.948
737.720.976
Notes
Cash flows from operating activities
Net income before taxation and minority interest
Adjustments to reconcile net income before tax to
net cash from operating activities:
Cash used in operations
Finance segment interest received
Finance segment interest paid
Taxes paid
Employment termination paid
Net cash from operating activities
Cash flows from investing activities:
Purchase of property, plant and equipment
Purchase of investment property
Purchase of intangible assets
Proceeds from sale of property, plant
and equipment and other non-current assets
Increase/(decrease) in available-for-sale and
held-to-maturity investments
Change in other non-current assets and liabilities
Acquisition of subsidiaries
Proceeds from disposal of Subsidiaries and Joint Ventures
Non-finance segment interest received
Inflation effect on investing activities
Net cash used in investing activities
Cash flows from financing activities:
Proceeds of issuance of share capital to minority interests
Dividends paid to minority interests
Net (decrease)/increase in short-term borrowings
Net increase in Murabaha syndication
Net increase in Eurobond
Net increase/(decrease) in long-term borrowings
Net increase in long-term trade payables
Non-finance segment interest paid
Inflation effect on financing activities
Net cash from financing activities
23
19
18
20
32
24
24
Net increase/(decrease) in cash and cash equivalents
Inflation effect on cash and cash equivalents
Cash and cash equivalents at the beginning of year
Cash and cash equivalents at the end of the period
related to discontinued operations
Cash and cash equivalents at the end of the period
Cash and cash equivalents amounting to YTL 12.027.157 (31 December 2004: YTL 218.349.161) are unavailable for use (Note 4).
(*) As explained in the Note 2.4 to the consolidated financial statements, USD amounts shown in these consolidated financial statements have
been included solely for the convenience of the reader and are translated from YTL, as a matter of arithmetic computation only, at the Central
Bank of the Republic of Turkey official YTL exchange rate. Thus, USD amounts do not form a part of the consolidated financial statements
prepared in accordance with generally accepted accounting standards issued by the CMB as at 31 December 2005.
200, 201
NOTE 43 - STATEMENTS OF CASH FLOW (Continued)
Adjustments for:
Depreciation and amortisation (Notes 18, 19 and 20)
Reserve for employment termination benefits (Note 23)
Net interest income
Translation reserve
Profit from the sales of property, plant and equipment
Valuation difference of derivative financial instruments
Provision for loan losses, net
Loss on sales of Subsidiaries and Joint Ventures, net (Note 38)
Gain on sale of Subsidiary (Note 38)
Gain on purchase of Subsidiary (Note 38)
Other provisions
Unrealized (gain)/loss on investments
Impairment of investment properties (Note 18)
Impairment of property, plant and equipment (Note 19)
Impairment of intangible assets and goodwill (Note 17 and 20)
Inflation effect on non-operating activities and income taxes
2005
2004
246.523.529
3.538.206
(206.447.021)
17.891.742
(4.195.210)
6.596.508
(38.500.000)
(7.453.384)
13.406.195
(352.510.325)
(123.370.075)
(13.082.854)
(21.336.001)
(2.815.320)
3.042.376
(478.711.634)
310.992.156
11.948.917
(344.042.194)
(26.249.704)
(4.723.622)
(828.862)
83.527.651
(262.272)
(102.051.048)
44.264.185
138.654.279
(5.107.984)
13.689.393
5.950.348
(68.387.320)
57.373.923
-
141.960.597
(201.124.738)
(926.941.058)
(200.329.417)
793.752.804
44.992.890
21.855.592
(34.383.660)
(360.216.990)
45.229.923
(21.707.143)
(210.327.547)
(56.151.804)
(77.863.588)
34.693.737
22.352.212
389.585.820
(33.619.969)
92.191.641
(16.485.513)
(74.868.891)
(29.469.611)
(77.175.548)
87.509.732
8.074.084
(102.415.747)
(386.519.993)
(405.258.814)
Change in finance-segment working capital (excluding the effects of acquisitions and disposals):
Decrease in trading, available-for-sale and held-to-maturity investments
Increase in placements with banks
Increase in originated loans
Decrease in bank borrowings
Increase in banking and customer deposits
Increase in trade payables and due to related parties
Increase in insurance technical reserve
Change in other current assets/liabilities
Changes in non-finance-segment working capital (excluding the effects of acquisitions and disposals):
Decrease /(Increase) in trading, available-for-sale and held-to-maturity investments, net
Increase in bank deposits
Increase in trade receivables and due from related parties, net
Increase in inventories
(Decrease)/Increase in trade payables and due to related parties, net
Increase in insurance technical reserve
Increase in advances received
Change in other payables/receivables
Change in other current assets/liabilities, net
Reconciliation of the net (loss)/income before taxation and minority interest in consolidated statements of cash flow:
Consolidated income before taxes and minority interest
Net income related to discontinued operations - (Note 35)
Less: Taxes on income and minority interest related to discontinued operations (Note 35)
708.808.647
80.583.212
8.208.331
362.117.469
72.175.115
(38.206.069)
797.600.190
396.086.515
NOTE 44 - DISCLOSURE OF OTHER MATTERS
These financial statements are prepared and presented in accordance with the accounting and reporting principles issued by the CMB (Note 2),
which differ from IFRS mainly with respect to the application of inflation accounting, presentation of the basic financial statements and the notes to
them. Accordingly, these financial statements are not intended to present the financial position, results of operations and changes in the financial
position and cash flows in accordance with IFRS.
NOTE 45 - ORIGINATED LOANS
Short-term originated loans
Long-term originated loans
Corporate and commercial loans:
Commercial and industrial loans
Export loans
Investment loans
Originated loans to the Undersecretariat of the Treasury of the Prime Ministry of the Republic of Turkey
Factoring receivables
Total corporate and commercial loans
2004
2.864.985.006
486.974.450
3.351.959.456
1.448.180.547
998.613.000
120.156.241
21.590.000
90.519.727
2.679.059.515
Retail:
Credit cards
Other consumer loans
350.346.000
215.464.066
Total retail loans
565.810.066
Total loans
3.244.869.581
Loans under legal follow-up
Other impaired loans
161.787.846
93.250.265
Total impaired loans
255.038.111
Total gross loans and advances
3.499.907.692
Less: Provision for loan losses
(147.948.236)
Net loans and advances to customers
3.351.959.456
Originated loans include funds transferred at issuance date for the treasury bills issued by the Undersecretariat of Treasury for the Government of
Republic of Turkey.
At 31 December 2004, interest rates vary between 2% and 4,5% per annum for foreign currency loans and 18% and 25% per annum for YTL
loans.
202, 203
NOTE 45 - ORIGINATED LOANS (Continued)
Economic sector risk concentrations for the performing loan portfolio are as follows:
2004
Consumer loans
Textiles
Wholesale and retail trade
Construction and cement
Financial institutions
Food and beverage
Metal processing
Media
Medicine, chemicals and dyes
Non-metal mine processing
Automotive
Other production
Tourism
Durable goods
Agriculture
Originated loans to the Undersecretariat of the
Treasury of the Prime Ministry of the
Republic of Turkey
Oil and gas
Other
YTL
%
565.810.000
381.622.060
312.403.283
259.009.427
229.225.935
205.568.925
155.388.000
143.903.042
115.885.743
113.798.802
109.071.000
102.913.134
99.545.000
92.450.881
56.884.328
49.316.397
17
12
9
9
7
6
5
4
4
3
3
3
3
3
2
1
21.590.000
11.069.204
219.414.420
3.244.869.581
1
1
7
100
NOTE 46 - DERIVATIVE FINANCIAL INSTRUMENTS
The Group utilises the following derivative instruments for non-hedging purposes:
Fair Values
2004
Foreign exchange derivatives
Currency swaps
Currency futures
Interest rate swaps
Foreign currency options
Credit default swaps
Total derivative assets/(liabilities)
Notional amount
Assets
Liabilities
247.782.000
384.334.000
141.527.000
202.500.000
122.381.000
324.000.000
1.422.524.000
2.035.000
8.929.000
236.929
224.000
1.557
10.919.689
22.346.175
(1.721.000)
(10.676.581)
(117.595)
(812.000)
(1.547)
(16.000)
(13.344.723)
Although certain derivative transactions provide effective economic hedges under the Group’s risk management position, they do not qualify for
hedge accounting under the specific rules in IAS 39 and are therefore treated as derivatives held-to-maturity.
NOTE 47 - BANKING AND CUSTOMER DEPOSITS
The breakdown of banking deposits according to type and maturity at 31 December 2004 is as follows:
Bank deposits
Customer deposits
2004
Long-term
21.170.000
23.404.000
44.574.000
Short-term
485.734.000
3.892.438.582
4.378.172.582
31 December 2004
Time
Demand/Current
Foreign currency:
Domestic banks
Foreign banks
Funds deposited under repurchase agreements
YTL:
Domestic banks
Foreign banks
Funds deposited under repurchase agreements
Total bank deposits
Total
506.904.000
3.915.842.582
4.422.746.582
Total
396.000
30.109.000
30.505.000
5.651.000
90.066.000
95.717.000
396.000
35.760.000
90.066.000
126.222.000
48.000
146.000
194.000
3.755.000
56.879.000
319.854.000
380.488.000
3.803.000
57.025.000
319.854.000
380.682.000
30.699.000
476.205.000
506.904.000
At 31 December 2004, interest rates for foreign currency time deposits are between 2,68% and 3,75%, and interest rates for local currency time
deposits are between 21,5% and 23%.
The breakdown of customer deposits according to type and maturity at 31 December 2004 is as follows.
Foreign currency:
Saving deposits
Commercial deposits
YTL:
Saving deposits
Commercial deposits
Securities deposited und repurchase agreements
Total customer deposits
Demand
2004
Time
Total
156.915.464
268.349.746
425.265.210
929.311.000
654.702.982
1.584.013.982
1.086.226.464
923.052.728
2.009.279.192
77.267.000
168.607.062
245.874.062
1.207.434.000
417.005.449
36.249.879
1.660.689.328
1.284.701.000
585.612.511
36.249.879
1.906.563.390
671.139.272
3.244.703.310
3.915.842.582
204
NOTE 47 - BANKING AND CUSTOMER DEPOSITS (Continued)
The breakdown of customer deposits according to type and maturity at 31 December 2004 is as follows:
2004
701.838.272
2.772.702.310
430.584.000
473.048.000
44.574.000
4.422.746.582
Demand
1-30 days
31-90 days
91 days - 1 year
Over 1 year
At 31 December 2004, interest rates for foreign currency time deposits are between 2,5% and 6,75%, and interest rates for local currency time
deposits are between 17% and 29,5%.
NOTE 48 - INSURANCE TECHNICAL RESERVES
2005
71.181.535
36.120.195
7.090.576
2004
48.034.537
27.268.137
5.056.435
114.392.306
80.359.109
Life assurance provision
-
26.628.076
Insurance technical reserves - non-current
-
26.628.076
Unearned premiums reserve - net of reinsurance
Claim provisions - net of reinsurance
Deferred commission income
Insurance technical reserves - current
Finar Corporate Communications © 2006 +90 212 259 43 11
Oymac› Sokak, No: 51
Altunizade 34662 Istanbul, TURKEY
Phone: +90 216 556 90 00
Fax: +90 216 556 93 98
www.doganholding.com.tr

Do¤an Holding Annual Report 2005

Transcription

Similar documents

e-news-circular

turkish wind energy road map

FMO cc Sekerbank

More at norfolktourism.ca/turkey

Beautiful Homes In The Sun Www

ISTANBUL MEDIPOL UNIVERSITY Course Learning Outcomes of

turkcell yds

turkey as a major supplier from mediterranean region 01/09/2015

READING CULTURE MAP

Mustafa Serdar ATASEVEN TÜREB/TWEA President mustafa