Annual Report 2004
Annual Report 2004
Annual Report 2004
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<strong>Annual</strong> <strong>Report</strong> <strong>2004</strong>
Financial Highlights<br />
(000 TRY)<br />
Contents<br />
1 ‹hlas Holding at a Glance<br />
2 Operations and Subsidiaries of ‹hlas Holding<br />
4 Message of the Chairman of the Board<br />
6 Message of the CEO<br />
8 The Board of Directors<br />
12 Executive Management of ‹hlas Holding<br />
14 The Board of Directors’ <strong>Report</strong><br />
16 Corporate Governance Principles Concordance <strong>Report</strong><br />
28 Business<br />
31 Media<br />
41 Construction and Real Estate<br />
47 Marketing<br />
49 Manufacturing<br />
55 Health<br />
61 Education<br />
63 Insurance<br />
64 Others<br />
65 Investments<br />
66 Proposal for Distribution of the Profits<br />
67 Auditor’s <strong>Report</strong><br />
68 Declaration<br />
69 Inflation-Adjusted Consolidated Financal Statements<br />
<strong>2004</strong> 2003 Change %<br />
Total Net Sales 506,936 370,690 37<br />
Profit For The Year 32,170 4,408 630<br />
Net Consolidated Profit 30,713 4,448 591<br />
Total Assets 1,084,476 911,642 19<br />
Shareholders’ Equity 399,592 209,607 91
‹hlas Holding at a Glance<br />
‹hlas Holding's foundation dates back to 1970 when the daily Türkiye<br />
Daily newspaper was first published. Since then, Türkiye newspaper<br />
has become one of the strongest media brands and also provided a<br />
strong engine of growth for other ‹hlas businesses. Today, ‹hlas continues<br />
its successful investment record by capitalizing on favorable economic<br />
developments at home and abroad. A stable rate of growth has<br />
been achieved thanks to a goal-oriented strategy and a tireless resolve.<br />
As a result of its successful track record, ‹hlas Holding has become one<br />
of the most prominent companies in Turkey.<br />
‹hlas Holding is currently active in an array of sectors including media,<br />
marketing, construction, health, education, insurance and real estate<br />
investment. The Group has managed to establish a very extensive<br />
distribution network introducing ‹hlas-brand products to over 20 million<br />
households.<br />
‹hlas Holding’s strategy for the period ahead is consolidating its position<br />
in the media, marketing and construction sectors and attaining<br />
real growth based on shareholders’ equity. Our goal is not simply to<br />
grow, but rather to maintain a stable growth rate accompanied by increases<br />
in productivity and profitability.<br />
The three year period of economic recovery following the 1999 and<br />
2000 crisis in Turkey has been accompanied by a seven-fold increase in<br />
‹hlas Holding’s shareholders’ equity (in TL terms). This success record<br />
in the face of trying economic conditions is a proof of ‹hlas's power to<br />
turn challenges into opportunities.<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2004</strong><br />
1
2<br />
Operations and Subsidiaries of ‹hlas Holding<br />
(as of 10 th May 2005)<br />
media<br />
• ‹hlas Media Holding<br />
• TGRT TV<br />
• TGRT News Channel<br />
• TGRT Marketing Channel<br />
• Türkiye Newspaper<br />
• ‹hlas News Agency (IHA)<br />
• ‹letiflim Magazine Publishing<br />
• ‹hlas Net<br />
• Promafl Production and<br />
Advertising<br />
• ‹hlas Advertising Agency<br />
• Yay-Sat Newspaper<br />
Distribution<br />
construction<br />
• ‹hlas Construction Group<br />
• ‹hlas REIT<br />
• ‹hlas Oxford Mortgage<br />
marketing<br />
• ‹hlas Marketing<br />
• Bisan Bicycle Marketing<br />
and Trade<br />
• Kristal Food Distribution<br />
and Marketing
manufacturing<br />
• ‹hlas Home Appliances<br />
• ‹hlas Tarsan Scales<br />
• Bisan Bicycle and Auto<br />
Manufacturing<br />
• Kristal Cola and<br />
Soft Drinks<br />
health<br />
• Türkiye Hospital<br />
• Armutlu Thermal Holiday<br />
Resort<br />
• Kuzuluk Thermal Holiday<br />
Resort<br />
education<br />
• ‹hlas Schools<br />
• ‹hlas Education Services<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2004</strong><br />
other<br />
• ‹hlas Insurance<br />
• ‹hlas Cargo<br />
• Ekstrem Security and<br />
Health Services<br />
• ‹hlas Warehousing<br />
• ‹hlas Exhibition Services<br />
3
4<br />
Dr. Enver Ören<br />
Chairman’s Message<br />
For the first time in many years, there are signs that<br />
Turkey is entering an era of stability and long-term<br />
economic growth. Still, conflicts and terrorist incidents<br />
continued to jeopardize the world peace during <strong>2004</strong>.<br />
In this regard, Turkey’s contribution to the establishment<br />
of a more peaceful and terrorism-free world -as<br />
a crucial bridge between the West, the Middle East<br />
and Central Asia- is increasingly appreciated by the international<br />
community.<br />
By continuing to consolidate its position in the region<br />
and develop relations -especially commercial relations-<br />
with its neighbors, Turkey will not only enhance<br />
its own economic well-being, but will also advance dialogue<br />
between cultures and nations, world peace<br />
and global welfare in general.<br />
The ever strengthening partnership between Turkey<br />
and the European Union should be viewed as a challenging<br />
marathon, without giving in to extremely pessimistic<br />
or optimistic expectations or prejudgments.<br />
Aware that this multifaceted, long and arduous process<br />
will have positive consequences for both parties,<br />
we hope that it will follow a rational and constructive<br />
course. The position that Turkey may one day assume<br />
inside the European Union would be further consolidated<br />
as it develops stronger relations with its regional<br />
neighbors.<br />
As the difficult years of 2000 and 2001 become nothing<br />
but unpleasant memories, the future is more and
Like Turkish economy, ‹hlas Holding has realized achievements that have met our previous<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2004</strong><br />
more promising for our country. The high growth rates attained in both industrial production and national income<br />
during the last three years are auspicious signs for an economy which used to experience economic crises<br />
every three years. In order for this trend to continue, economic matters should receive the attention they deserve<br />
and all weaknesses must be courageously confronted. We believe that if tax and social security reforms are<br />
executed successfully and public borrowing continues to fall at the same rate, Turkey will become one of the<br />
most attractive markets for both regional and European investors in a few short years.<br />
The successful anti-inflationary record and the introduction of the New Turkish Lira will increase the prestige<br />
of the Turkish economy. With each new achievement in economic growth, stabilization and structural reform, a<br />
return to past political uncertainty becomes increasingly less likely while the harmonization of politics, government<br />
and the economy becomes an attainable goal. It would be reasonable to avoid premature and excessively<br />
optimistic expectations; however, we do not doubt for a single moment that past and present sacrifices will in<br />
time allow Turkey to enter into the league of developed nations.<br />
In line with the successful record of the Turkish economy, ‹hlas Holding has realized achievements that have<br />
met our previous expectations and also kindled our hopes for the future. We continue with our accomplishments<br />
in the media, construction and marketing sectors, and at the same time our affiliated companies follow a healthy<br />
and productive growth trend.<br />
To the entire ‹hlas family, to our shareholders, to our partners and to all our fellow citizens, we wish a blissful<br />
new year, in which we may all stand hand in hand for a more advanced, developed and prosperous nation.<br />
Yours Sincerely,<br />
Dr. Enver Ören<br />
Chairman of the Board<br />
expectations and also kindled our hopes for the future.<br />
5
6<br />
A. Mücahid Ören<br />
CEO’s Message<br />
The attainment of an annual inflation rate of just<br />
over ten percent signifies a very important step in the<br />
effort to finally curb the inflation spiral which has plagued<br />
the Turkish economy in recent decades. An even<br />
more encouraging development has been the high<br />
economic growth rate which has accompanied the<br />
stabilization process. We consider this as an incontrovertible<br />
indicator of the success of the economic reform<br />
process. “Sustained growth accompanied by increases<br />
in productivity” is a crucial goal for ‹hlas Holding,<br />
too.<br />
Our Holding company has had a very remarkable<br />
boom year; and thus, proud of having achieved all of<br />
our goals one by one, we feel spirited about the period<br />
lying ahead.<br />
According to the inflation-adjusted balance sheet as<br />
of December <strong>2004</strong>, our Holding’s equity capital has risen<br />
from 209.6 million TLY to 399.6 million TLY in one<br />
year, corresponding to a 91% increase. In the same<br />
period, the Holding’s total debt has fallen 5.8% and financial<br />
debt has fallen 4.8%.<br />
The Huzur Radio and TV Company (TGRT) has launched<br />
two new TV channels and thus consolidated<br />
its position as a prominent company in the Turkish TV<br />
sector. We believe that the TGRT-News and the TGRT-<br />
Marketing channels will fill a significant gap in Turkish<br />
media offerings. ‹hlas News Agency, the driving force<br />
behind the success of TGRT-News channel, has beco-
‹hlas has had a very remarkable boom year; and thus, proud of having achieved all of our<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2004</strong><br />
me one of the world’s most prominent news agencies in such a short period of time that it is a source of pride<br />
both for our Holding company and Turkey.<br />
‹hlas Marketing Company, propelled by the new marketing channel and fueled by the increases in the number of<br />
its affiliated agencies and the enrichment of its product range, keeps up its constantly improving sales performance.<br />
Having completed the construction of 1.3 million square meters of high-quality enclosed space, our group of<br />
construction companies is the shining star of the Turkish construction sector. In the last five year period during<br />
which the construction sector has stagnated and even contracted, ‹hlas Construction Group has been an astonishing<br />
exception by completing a series of large-scale projects in an impeccable fashion.<br />
The increasing shortage of housing in Turkey has inevitably prompted a recent recovery in the construction<br />
sector. The increasing signs of this revival in <strong>2004</strong> reassure us that we will attain our goals without fail.<br />
The Armutlu Holiday Village, a rotating or time-share housing scheme comprised of 29,656 time-share units,<br />
was completed in mid-<strong>2004</strong> and is the most recent and prestigious member of our chain of thermal vacation villages<br />
pioneered by our Holding company. In Güzelflehir, another prestigious real estate development project, the<br />
first phase of construction, which includes 300 villas, will be completed in June 2005.<br />
Aware of our social responsibilities, we relentlessly continue our efforts in the education and health sectors as well.<br />
We gratefully thank all our employees, partners and shareholders, who have immensely contributed to the current<br />
success of ‹hlas Holding and have helped us look to the future with hope and optimism.<br />
Yours Sincerely,<br />
A. Mücahid Ören<br />
Deputy Chairman of the Board<br />
Chief Executive Officer<br />
goals one by one, we feel spirited about the period lying ahead.<br />
7
8<br />
The Board of Directors<br />
Dr. ENVER ÖREN<br />
Chairman of the Board<br />
Mr. Ören is duly<br />
authorized to represent<br />
the Company solely and<br />
individually. He was<br />
appointed on May 28,<br />
<strong>2004</strong> for an office term<br />
of three years.<br />
Enver Ören was born February<br />
10th 1939, in the province<br />
of Denizli, Turkey, where he<br />
completed his primary and<br />
secondary education. He continued his studies in Istanbul,<br />
where he first attended the Kuleli Military High<br />
School followed by the School of Botany and Zoology<br />
at Istanbul University. Mr. Ören graduated from the<br />
university with honors in 1961 and in the same year<br />
won a NATO scholarship in Italy. Upon his return home,<br />
Mr. Ören served as a university teacher.<br />
Enver Ören married Dilvin Ifl›k in 1968. Two years later,<br />
he resigned from his academic duties to launch a<br />
newspaper with his friends.<br />
Mr. Ören’s services to Turkish culture and his contribu-<br />
A. MÜCAH‹D ÖREN<br />
Deputy Chairman of the<br />
Board<br />
Mr. Ören is duly<br />
authorized to represent<br />
the Company solely and<br />
individually. He was<br />
appointed on May 28,<br />
<strong>2004</strong> for an office term<br />
of three years.<br />
Ahmet Mücahid Ören was<br />
born April 28th, 1972 in Istanbul.<br />
Mr. Ören studied economics at Anadolu University.<br />
tions to the world of science and technology were recognized<br />
by the Selcuk University in Konya, with an<br />
Honorary Doctorate of Sciences. The International Islamic<br />
Academy of Sciences in Dakar bestowed Mr. Ören<br />
with being the organization’s first honorary fellowship.<br />
The Journalists’ Association of Ankara selected Mr.<br />
Ören as being the most successful newspaper publisher<br />
of the decade between 1980 and 1990. Mr. Ören<br />
continues to serve as the Second President of the Association<br />
of Newspaper Owners and as a Board Member<br />
of The Bureau of Press Advertising. Mr. Ören has<br />
addressed many international forums on issues of global<br />
importance. The magazine Global Finance selected<br />
Mr. Ören as one of the 600 most influential men of our<br />
time. Mr. Ören was awarded The Medal of Superior<br />
Service to the State, in recognition of his services on<br />
the national scale.<br />
Mr. Ören sees as his primary mission to serve people<br />
with trust, love and respect. Integrity, adherence to<br />
quality, investing in education and building on experience<br />
are his guiding principles in preparing ‹hlas Holding<br />
for the future. Mr. Ören aims to ensure that the<br />
group continues to provide the highest quality, with<br />
the quickest and widest possible service to its customers.<br />
Mr. Ören is married with one child and speaks<br />
English and French.<br />
Mücahid Ören began his career in 1989 as the IT manager<br />
of Turkiye newspaper and editorial adviser of the<br />
Turkiye Cocuk magazine. Mr. Ören, in the forefront of<br />
implementing computerization of Turkiye Daily Newspaper,<br />
lead the way to one of the earliest transformations<br />
in the Turkish press to a fully computerized editorial<br />
and production environment.<br />
Mr. Ören was the founding General Manager of TGRT,<br />
established in 1991 as the first private TV channel in<br />
Turkey. Mucahid Ören played a key role in implementing<br />
the project in all aspects, including, infrastructure,<br />
engineering and content.<br />
Mücahid Ören was appointed as the Deputy Chairman<br />
and the CEO of ‹hlas Holding in 1993. Mr. Ören holds<br />
memberships of various industrial and business associations<br />
in Turkey and internationally. Mr. Ören is married<br />
and speaks English.
YAVUZ ÖZGÜN<br />
Member<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2004</strong><br />
Mr. Özgun is authorized to jointly represent and bind the Company. He was<br />
appointed on May 28, <strong>2004</strong> for an office term of three years.<br />
Yavuz Özgun was born in Nevsehir in 1949. Mr. Özgun studied in K›rsehir Teacher School<br />
and later in Gazi University in Ankara. After actively teaching for 8 years, Mr. Özgun<br />
served in various capacities in the Ministry of Education, finally becoming a General Manager.<br />
Mr. Özgun was then appointed an administrative director of the Turkish parliament.<br />
Following retirement from public service, Mr. Özgun moved to the private sector. He served<br />
as the General Manager of TGRT television, Group Head of ‹hlas Schools, Chairman<br />
of ‹hlas Insurance and Chairman and General Manager of ‹hlas Marketing. Mr. Özgun<br />
serves as a Member of the Board of Directors and Managing Director of ‹hlas Holding.<br />
Mr. Özgun is married with two children and speaks English.<br />
MAHMUT KEMAL AYDIN<br />
Member<br />
Mr. Ayd›n is a delegate member and is authorized to jointly represent<br />
the Company. He was appointed on May 28, <strong>2004</strong> for an office term<br />
of three years.<br />
M. Kemal Ayd›n, born in Kastamonu in 1957, graduated from the Istanbul Economic<br />
and Commercial Sciences Academy. Between 1976-1982, he worked at the<br />
Circulating Capital Accounting Office of Istanbul University Cerrahpasa School of<br />
Medicine. Upon completion of his military service, he served as the Chief of General<br />
Accounting at the same place. Between 1985-1989 he served as an Employment<br />
Inspector at Ministry of Labour and Social Security. In 1989, he started working<br />
at ‹hlas Holding. He was involved in the activities for the IPO of ‹hlas Holding<br />
Inc. between 1993 and 1994. M. Kemal Ayd›n presently serves as a Member of<br />
the Board of Directors responsible for Financial Affairs. He is married with 2 children<br />
and speaks English.<br />
ALAETT‹N fiENER<br />
Member<br />
Mr. fiener is authorized to jointly represent and bind the Company. He was<br />
appointed on May 28, <strong>2004</strong> for an office term of three years.<br />
Alaettin fiener, born in Kocaeli in 1946, graduated from the Istanbul Institute of<br />
Education in 1968 and the Istanbul School of Law in 1977. Mr. Sener, who at one time<br />
served as Mayor of Yarimca (Korfez), was a freelance lawyer until 1989. From 1989<br />
onwards, he has been a Legal Consultant of ‹hlas Holding and its various subsidiaries<br />
and serving as a Member of the Board of Directors since February 3rd, 1998. Alaettin<br />
fiener is married with 3 children and speaks English<br />
9
10<br />
ZEK‹ CELEP<br />
Member<br />
Mr. Celep is authorized to jointly represent and bind the Company. He was<br />
appointed on May 28, <strong>2004</strong> for an office term of three years.<br />
Zeki Celep was born in Mufl in 1939. After graduating from the Kuleli Military High School<br />
in 1956 and the Military Academy in 1958, Mr. Celep completed his studies at the Istanbul<br />
Faculty of Law in 1996. Between 1966 - 1972 he worked at Ifl›k Bookshop and Sabah<br />
Newspaper. Between 1972 - 1988 he served at ‹timat Insaat Ltd. and Antalya Imar Ltd. and<br />
was engaged in the construction of apartment buildings, Antalya Iller Bank, Area<br />
Directorate Housing Complex, Antalya Airport and various construction works abroad.<br />
After 1993, he became the head of the Construction Group of ‹hlas. Mr. Celep led the<br />
construction activities of ‹hlas Yuva and Marmara Evleri 1 and 2 Housing Complexes. Zeki<br />
Celep, who presently serves as a Member of the Board in Charge of Construction, is<br />
married with 2 children and speaks English.<br />
ABDULLAH TURALI<br />
Member<br />
He was appointed on May 28, <strong>2004</strong> for an office term of three years.<br />
Abdullah Tural›, born in K›rklareli in 1956, after having completed Istanbul Vefa high<br />
school, graduated from the Istanbul University Faculty of Economics in 1982. Between<br />
1977-1982 he worked at the Ministry of Labour Employment Office Istanbul Branch<br />
Directorate. Mr. Turali who completed his military service during 1983-1984 started<br />
working as a businessman dealing with carpets and trousseau between 1984 -1994. After<br />
1994 he assumed duties as manager of various units of ‹hlas Holding Inc. Presently serving<br />
as ‹hlas Pazarlama General Manager, Abdullah Turali is married with 3 children and speaks<br />
English.<br />
HÜSEY‹N AYDIN ARVAS‹<br />
Independent Member<br />
He was appointed on May 28, <strong>2004</strong> for an office term of three years.<br />
Hüseyin Ayd›n Arvasi was born in Istanbul in 1933. Mr. Arvasi served as a member of<br />
parliament for two terms. Mr. Arvasi has retired from the State Water Works in 1991.<br />
Mr. Arvasi is married with four children and speaks German.
‹SMET ERKUT<br />
Independent Member<br />
ERTU⁄RUL TAKA<br />
Independent Member<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2004</strong><br />
He was appointed on May 28, <strong>2004</strong> for an office term of three years.<br />
Ismet Erkut was born in Pazaryeri, Birecik in 1942. Mr. Erkut studied at the School of<br />
Economics in Eskisehir. After completing military service, Mr. Erkut began to work at the<br />
Social Security Institution (SSK) in 1966. Mr. Erkut retired from the SSK in 1993 when he<br />
was the Chief Inspector. Ismet Erkut served as the General Manager of Huzur Cargo<br />
between 1995-2003. Mr. Erkut is married with three children and speaks English.<br />
He was appointed on May 28, <strong>2004</strong> for an office term of three years.<br />
Ertugrul Taka was born in Mugla in 1949. After graduating from Istanbul University’s<br />
School of Law in 1970, Mr. Taka served as a military judge, prosecutor and public<br />
prosecutor until 1993. Mr. Taka was appointed as a member of the High Military<br />
Administrative Court in 1993 and retired in 2003. Mr. Taka continues to practice law and is<br />
married with three children.<br />
BEK‹R EREN<br />
Independent Member<br />
He was appointed on May 28, <strong>2004</strong> for an office term of three years.<br />
Bekir Eren was born in Balikesir in 1956. Mr. Eren double majored in Industrial Engineering<br />
(Middle East Technical University) and Theology (Ankara University), graduating in 1980.<br />
Mr. Eren worked as a production planning and inventory control engineer at the MKEK<br />
Textile Machinery Plant between 1980-1984. During 1984-1992, Mr. Eren worked at the<br />
General Directorate of SEKA Paper Mills as head of IT and R&D. Bekir Eren served as the<br />
General Manager of KIA ‹hlas Motor between 1994-2001. Mr. Eren is married with three<br />
children and speaks English and Arabic.<br />
11
12<br />
Directors<br />
Ahmet Mücahid Ören<br />
Chief Executive Officer
Ali Tubay Gölbafl›<br />
Chief Financial Officer<br />
Zeki Celep<br />
General Manager<br />
Construction Group<br />
Yavuz Özgün<br />
Managing Director<br />
Mahmut Kemal Ayd›n<br />
Chief Accounting Officer<br />
Faruk Koca<br />
General Manager<br />
Healthcare Services Group<br />
* Directors’ biographies are avaliable on page 27.<br />
Alaattin fiener<br />
Chief Legal Advisor<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2004</strong><br />
Faruk Demir<br />
General Manager<br />
Educational Services Group<br />
13
14<br />
Board of Directors <strong>Report</strong><br />
Dear Shareholders,<br />
We salute our estimable shareholders and their proxies<br />
who honor our Ordinary General Assembly, and submit<br />
to your review and approval the Company’s Operations<br />
and Balance Sheet and Income Statements for the<br />
year <strong>2004</strong>.<br />
While our Company has shown a development in parallel<br />
with the country’s development in ’80s, and has<br />
witnessed the most active years in the world of business<br />
and economy in Turkey with a highly dynamic fabric; it<br />
would not be possible to say that the end of ‘90s and the<br />
beginning of 2000 have been as bright for either the economy<br />
or our companies as thoroughly perceived by all<br />
of us. The dynamism of the country however, has always<br />
brought along the opportunity for continuous renewal.<br />
With the change in the government at the end of 2002,<br />
Turkey had at last a single party government after the coalition<br />
governments of long years. This change brought<br />
along stability and a rising spirit to the markets. The country<br />
closed the year <strong>2004</strong> with a record breaking growth<br />
of 9.92 percent, a rising per capita income, and an increasing<br />
foreign trade volume. In this environment, our Company<br />
had the opportunity to increase and reinforce its<br />
participations in the sectors within its subject of operation<br />
in <strong>2004</strong>, and realized activities for increasing efficiencies<br />
at the existing sectors.<br />
At present, when our minds are now clear of the high<br />
inflation phenomenon of long years, and low inflation<br />
expectations are gaining ground instead, the strength of<br />
own resources becomes an important issue also. With<br />
this awareness, the transaction was successfully perfected<br />
on November 2, <strong>2004</strong> for the 70% increase of the capital<br />
in the amount of TRY 232,141,749.12 issued within<br />
the TRY 460 million authorized capital ceiling in <strong>2004</strong>, to<br />
TRY 394,640,973.50, with an increase of TRY<br />
162,499,224.38.<br />
According to the Consolidated Financial Statements<br />
prepared with the inflation accounting concept and in accordance<br />
with the concerned communiqués of the Capital<br />
Market Board, total assets of the<br />
‹hlas Group was TRY 1.08 billion; total turnover TRY<br />
504.3 million and total profit TRY 30.7 million in <strong>2004</strong>.<br />
With the steady environment of recent years, Turkey<br />
stands as a center of attraction for international capital<br />
movements. Emphasis however, on the concept of good<br />
governance or corporate governance in companies is required<br />
for the deployment of such capital movements<br />
throughout the country. Accordingly, corporate governance<br />
implementations have a gradually increasing impact<br />
on the governance concept of companies. In this<br />
context, our Company has initiated the activities for<br />
compliance with Corporate Governance Principles within<br />
the framework of the communiqué issued by the Capital<br />
Market Board (CMB) in July 2003. Full compliance<br />
with the principles was recognized and activities in this line<br />
have been continued in <strong>2004</strong> also. All the activities<br />
performed in this connection are included under the Section:<br />
“Compliance with Corporate Governance Principles”<br />
in the Company’s <strong>Annual</strong> <strong>Report</strong>.<br />
In accordance with Audit Committee recommendation<br />
No.9 dated 11.06.<strong>2004</strong>, and Board of Directors’ approval<br />
No. 16 dated 12.06.<strong>2004</strong>, Erdal fiahin, and Osman Duman<br />
have been appointed to perform the internal audit of the<br />
Company and to submit a report to the committee responsible<br />
for audit about the performed control and audit.<br />
The Company’s internal control system has been<br />
analyzed by the internal controller, and auditor through<br />
the “Internal Control Questionnaire” prepared by the independent<br />
audit company for the year <strong>2004</strong>; and the audit<br />
company’s opinion was asked about the analysis. We<br />
declare that minimum measures have been taken in the<br />
internal control system on the basis of the concerned<br />
form, and the internal control system operates soundly.<br />
We know that both our employees and you, our honorable<br />
shareholders who have been the major strength in<br />
our business life which has left behind a quarter of a century,<br />
will be on our side in the future also; and with the<br />
consequent self confidence and responsibility, we believe<br />
that we will always preserve the will to achieve the best.<br />
We take this opportunity to thank you our shareholders<br />
and our employees who have always been ready to<br />
spare the support and assistance we need.<br />
Board of Directors
As per the Board of Directors Resolution dated<br />
13.05.<strong>2004</strong>, the Company has applied to the Capital<br />
Market Board on 17.05.<strong>2004</strong> with enrollment No.23396<br />
for the 70% increase of the capital in the amount of TRY<br />
232,141,749.12 issued within the TRY 460 million authorized<br />
capital ceiling, to TRY 394,640,973.50, with an increase<br />
of TRY 162,499,224.38 in order to fund its issued<br />
capital. The application made to the Capital Market Board<br />
has been recorded on 17.09.<strong>2004</strong> under number<br />
141/1186. In the process of capital increase, our shareholders<br />
have employed their right to buy new shares<br />
between the dates of 29.09.<strong>2004</strong> and 13.10.<strong>2004</strong>. Shares<br />
with a nominal value of TRY 3,102,600.04, not appropriated<br />
within the period allowed for shareholders to<br />
buy new shares, were offered to depositors at the Istanbul<br />
Stock Exchange Primary Market between the dates<br />
20.10.<strong>2004</strong> and 18.11.<strong>2004</strong>; and the sales transactions<br />
for total shares were completed as per 02.11.<strong>2004</strong>.<br />
Completion of issued capital to TRY 394,640,973.50 in<br />
accordance with the procedures provided for in the Capital<br />
Market Law and other concerned communiqués<br />
was certified by the Capital Market Board with document<br />
No. 2663 dated 06.12.<strong>2004</strong>. The said document<br />
was enrolled on 24.12.<strong>2004</strong> by the Istanbul Trade Register<br />
Office.<br />
The only shareholder with the ownership of more<br />
than 10% capital stock is Chairman of the Board Dr.<br />
Enver Ören.<br />
Name Number Sum Percent<br />
Surname of Shares (TRY) (%)<br />
Enver Ören 106,553,600,000 106,553,600 27.01<br />
The sectors in which the Company operates, and their<br />
status are indicated under the “Operations” section.<br />
The number of employees was 779 in 2003 and 751<br />
in <strong>2004</strong>. While the number of employees in the Group<br />
was 2,376 in total in 2003, this number reached 3,311 in<br />
<strong>2004</strong>. Our business implements a Collective Business<br />
Place Agreement.<br />
Severance Pay Reserve is TRY 3,008,237.66.<br />
Course of Share Prices during the Year<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2004</strong><br />
Months (<strong>2004</strong>) Price (TRY)<br />
January 1.18<br />
February 1.15<br />
March 1.27<br />
April 1.23<br />
May 1.09<br />
June 1.06<br />
July 1.08<br />
August 1.11<br />
Sebtember 1.18<br />
October 1.19<br />
November 1.18<br />
December 1.05<br />
* Prices before September 29 were adjusted in accordance<br />
with capital increases realized.<br />
The course of this trend was as follows for the first<br />
quarter of 2005:<br />
Months (2005) Price (TRY)<br />
January 1.18<br />
February 1.20<br />
March 1.07<br />
Shareholder Structure<br />
Shareholder Share Percent % Share Amount<br />
Enver Ören 27.01 106,553,600<br />
A. Mücahid Ören 1.60 6,332,267<br />
Other 0,48 1,924,146<br />
Public 70.91 279,830,959<br />
Total 100.00 394,640,973<br />
15
16<br />
Corporate Governance Principles Concordance <strong>Report</strong><br />
1. DECLARATION OF CONCORDANCE WITH CORPORATE GOVERNANCE PRINCIPLES<br />
Activities for concordance with the principles stated in the Corporate Governance Principles issued by the Capital Market<br />
Board in July 2003 have been initiated immediately following the promulgation of the communiqué. In this context,<br />
a seminar was given to top management of the ‹hlas Group Companies in November 2003, and a declaration was made<br />
for maximum concordance with these principles. Concordance with the principles was observed in the general assembly<br />
held in <strong>2004</strong>, and in the preparation of the <strong>Annual</strong> <strong>Report</strong> for 2003. For the same purpose, Board of Directors<br />
members with expired term of office have not been replaced, thus reducing the number of executive Board of Directors<br />
members in order to ensure independence to the existing Board of Directors with different Executive and Board of Directors<br />
Chairmen, on the basis of the executive principles norm. In the organization of the new Board of Directors in concordance<br />
with the Principles, 4 independent members were included in the existing Board of Directors with 11 members<br />
on the grounds that the Chairman is not an executive; and executive duties were assigned to the remaining members.<br />
Thus, more than one third of the new Board of Directors consists of independent members. Existing committees were<br />
reorganized in accordance with the new Board of Directors organization. Hüseyin Ayd›n Arvasi, an independent member<br />
was appointed as Chairman of the Audit Committee; and another independent member was designated as the Audit<br />
Committee member. Chairman of the Corporate Governance Committee is Ertu¤rul Taka, an independent member;<br />
and another independent member, Bekir Eren is appointed as the Corporate Governance Committee member. Thus, all<br />
committees consist of independent members.<br />
The Investor Relations Unit established for the management of relations with shareholders, has started its activities<br />
under the coordination of the Corporate Governance Committee.<br />
An Internal Audit Unit was established under the coordination of the Audit Committee. Both Committees have made<br />
their internal organizations during the year in order to perform their duties in accordance with Corporate Governance<br />
Principles; and participated in training courses, panel discussions and seminars to achieve developments in their performance.<br />
It is planned to ensure the full functioning of the committees during 2005.<br />
The Company’s website was updated on January 1, 2005 under the direction of the Investor Relations Unit in accordance<br />
with the most recent organizational structure of the Company, by observing CMB’s instructions issued during the<br />
year concerning the information which must be included on company websites. A software support was provided so<br />
that communication of the most recent developments to investors immediately on the website is controlled online by<br />
the Investors Relations Unit. Concordance of our website content with Corporate Governance Principles has been rated<br />
by an independent organization at the beginning of 2005 with a score of 7.2 (good) on a 10 point scale. Activities are in<br />
progress for further development of our website. Information for foreign investors, which was instructed to be made<br />
only in English in accordance with the Principles, is also given in German and Arabic.<br />
Items which are not or cannot be implemented as stated in the Concordance <strong>Report</strong> are identified by the Corporate<br />
Governance Committee in accordance with the Principles; and activities for concordance with the majority of the principles<br />
are in progress. There is no conflict of interests arising from the non implemented items.<br />
Mahmut Kemal Ayd›n Alaettin fiener<br />
Member of the Board Member of the Board
SECTION I – SHAREHOLDERS<br />
2. Shareholder Relations Unit<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2004</strong><br />
Shareholder Relations Unit was set up in 1999 with the name of Investor Relations Unit and has given services to all<br />
share holders and investors since then. Orhan Tan›flman has undertaken the management of the Unit and Ümit F›rat,<br />
and Hilal Bafle¤mez function as members. Contact information is given below:<br />
‹hlas Holding Inc. Investor Relations<br />
29 Ekim Cad. No:23 34197 Yenibosna / ‹stanbul<br />
Phone: 0(212) 454 2422<br />
Fax: 0(212) 454 2427<br />
e-mail: orhant@ihlas.com.tr, ihlas@ihlas.com.tr<br />
web: www.ihlas.com.tr (investor unit)<br />
More than 2,500 e-mails received over this contact address have been answered; and responses were given to an average<br />
of 5 – 10 questions forwarded over the phone every day. Furthermore, Company visits were organized for intermediary<br />
institutions and investment banks; and questions forwarded by these organizations have been answered in writing.<br />
Questions forwarded by the economy side of the press have also been answered and the developments in the Company<br />
publicized through press releases. The Investor Relations Unit has undertaken an active role in the development of<br />
the Company’s <strong>Annual</strong> Repot through which investors were thoroughly informed. The Company’s corporate website<br />
has been updated under the coordination of the Investor Relations Unit in line with the developments and changes in<br />
the corporate organization and in accordance with the Corporate Governance Principles issued by CMB; and became accessible<br />
as per January 1, 2005. In a survey made by a private consultancy firm in March, investigating the compliance<br />
of websites for ‹SE-50 shares with Corporate Governance Principles, our Company’s website was rated the 4th with a<br />
score of 7.2 on a 10 point scale.<br />
3. Employment of the Right to Acquire Information by Shareholders<br />
Questions forwarded via more than 2,500 e-mails and more than 1,500 questions forwarded over the phone in <strong>2004</strong> about<br />
the Company’s operations and performance at the stock market in general have not been publicized; and confidential<br />
information qualifying as trade secret was given by observing CMB regulations and the Turkish Commercial Code (TCC).<br />
The Company’s <strong>Annual</strong> <strong>Report</strong> and the lately declared financial statements were presented during the Company visits<br />
of more than 10 analysts and the economy side of the press. Other questions have been answered in writing. The<br />
electronic medium has been actively and daily used in supplying such information.<br />
No request for the appointment of a private auditor was forwarded; and no individual rights instituted in this respect.<br />
4. General Assembly Information<br />
The General Assembly convened at the Holding’s Registered Office on May 28, <strong>2004</strong> at 10 a.m. with the participation<br />
of 35 people holding 38.94 % of capital stock, 22 of whom were stakeholders; and ‹hlas News Agency, Anadolu Agency,<br />
and correspondents of the Türkiye Newspaper. Announcement for the General Assembly was published in Türkiye and<br />
Dünya Newspapers and on the website. Fax or e-mail messages were sent to those who wanted information on the phone.<br />
No shareholder employed his/her right to forward questions and no one spoke at the wishes part of the assembly.<br />
No provisions have been included in the Articles of Association stating that General Assembly resolution is required<br />
for major issues, e.g. division, sale, purchase, and hiring/leasing of substantial assets.<br />
Announcements have been made in the electronic medium to facilitate participation in the General Assembly; and it<br />
was ensured that the required documents were accessible on the website. General Assembly minutes have been made<br />
available to shareholders on the website and at the Financial Affairs Coordination Unit.<br />
All the corporate stock is bearer stock. Board of Directors <strong>Report</strong>, Auditors <strong>Report</strong>, Independent Auditors <strong>Report</strong> of ‹rfan<br />
Yeminli Mali Müflavirlik A.fi., Balance Sheet, Income Statement, and Board of Directors recommendations have been made<br />
available to the review of share holders at the Company’s registered office 21 days prior to the General Assembly date.<br />
5. Voting Rights and Minority Interests<br />
The Company’s Articles of Association includes no provisions for preference in the employment of voting rights. No<br />
companies exist with reciprocal shareholding either. The Company has participations in its affiliated companies while<br />
the affiliated companies have no participations in the Company. Minority interests are not represented in management<br />
and the method of cumulative voting is not provided for in the Articles of Association.<br />
17
18<br />
6. Dividend Policy and the Date for the Distribution of Profits<br />
No preferences exist for profit distribution.<br />
Article 30 of the Company Articles of Association about distribution of profits, and Article 31 about the date for the distribution<br />
of profits provide as follows:<br />
DISTRIBUTION OF PROFITS: (Turkish Trade Register Gazette [TTRG] No. 5811 dated June 3, 2003)<br />
Article-30:<br />
Net profit indicated on the balance sheet and calculated after the deduction of amounts required to be paid or earmarked<br />
by the Company such as Company overhead and depreciation fund; and the taxes and other obligations imposed<br />
on the Company, from the revenues determined as per the end of the accounting year is distributed in the following order<br />
after the deduction of losses for the previous year, if any:<br />
First Legal Reserve:<br />
a) 5 % is earmarked as legal reserve.<br />
First Dividend:<br />
b) From the balance, first dividend is earmarked at the rate and in the amount determined by the Capital Market Board.<br />
Second Dividend:<br />
c) The General Assembly is authorized to decide for the total or partial distribution of the balance remaining after the<br />
deduction of the sums stated in paragraphs a) and b) above from the net profit; or to earmark such amount as excess<br />
reserve. (Article 466/3 of TCC is reserved).<br />
Second Legal Reserve:<br />
d) One tenth of the sum calculated after the deduction of the profit share equal to 5% of paid up capital from the amount<br />
resolved to be distributed to share holders and other partakers in shares, is earmarked as second legal reserve in accordance<br />
with sub-paragraph 3, paragraph 2, Article 466 of the Turkish Commercial Code.<br />
e) Unless reserve funds stipulated by law are earmarked; and unless the first dividend identified in the Articles of Association<br />
for shareholders is distributed in cash and/or in the form of shares, no resolution can be made for earmarking<br />
other reserve funds; for transferring profits to the following year; and for dividend distribution to the holders of preferred<br />
shares, participation shares, founder’s and common stocks with dividend right certificates; to Board of Directors<br />
members, staff, employees, and workers; to foundations instituted for the fulfillment of various objectives; and to similar<br />
individuals and/or institutions.<br />
f) Dividend distribution is made to all existing shares as per the dividend account period equally without regard to the<br />
issue and acquisition dates of such shares.<br />
g) The Board of Directors may make dividend advance payments provided that such authorization is given to the Board<br />
of Directors by the General Assembly; and Article 15 of the Capital Market Law and other regulations of the Capital<br />
Market Board are complied with. The dividend advance payment authorization given to the Board of Directors by the General<br />
Assembly is restricted to the year such authorization is given. No resolution may be made for the payment of an additional<br />
dividend advance and/or for dividend payment unless the dividend advance for the previous year is totally set off.<br />
DATE FOR THE DISTRIBUTION OF PROFITS: (T.T.R.G. No. 3450 dated January 17, 1994)<br />
Article-31:<br />
The General Assembly, upon the advice of the Board of Directors decides on the date and method of distributing the<br />
annual profit to the shareholders. Profit distribution to shareholders is made in accordance with the provisions of the Capital<br />
Market Law and concerned regulations.<br />
The Company distributes its annual profit either in the form of shares, or dividend in cash, or with the combination of<br />
both methods in accordance with the Capital Market Board communiqués and procedures. The non distributable profit<br />
is transferred to excess reserves for strengthening own resources.<br />
7. Assignment of Shares<br />
According to Article 8 of the Company’s Articles of Association, under the heading “Assignment of Shares”:<br />
Registered shares to be assigned are primarily offered to the Board of Directors members on the current purchase value.<br />
If no purchase is made by any Board of Directors members within a period of one month, the shares may be sold<br />
to third parties. Acts to the contrary shall be ineffective and such shares shall not be enrolled in the stock register either.
SECTION II – INFORMING THE PUBLIC AND PUBLICITY<br />
8. The Company Information Policy<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2004</strong><br />
The Company Information Policy has been developed as stated below, and will be submitted to the attention of shareholders<br />
at the first General Assembly.<br />
It is the primary principle of the Company Information Policy to publicize accurately, completely and with a sufficient<br />
information content in due time, the developments which might have an impact on the value of all capital market instruments<br />
offered by our Group; to make no discrimination among shareholders in the employment of information – review<br />
rights; to offer the information publicized by the Company in a comprehensible and interpretable way accessible<br />
at low costs equally by individuals and corporations who will benefit from such information in making their own decisions;<br />
to use the internet, electronic mails, press releases, and media organizations effectively in addition to the means anticipated<br />
by laws and regulations; and to comply with all the rules promulgated or to be promulgated by CMB.<br />
Other than those stipulated by law, information is given to the public about Company management, legal status, and<br />
Company projects through disclosures made by Management and Board of Directors members under Information Management.<br />
With the exclusion of confidential information qualifying as trade secret, written information requests of shareholders<br />
or the concerned are addressed by the “Shareholder Relations Unit”.<br />
In order to ensure an interactive information system and preclude speculative information, the public is informed under<br />
the public information policy, of substantial changes or pending changes in the Company’s financial situation and/or<br />
operations, provided that the provisions of concerned regulations are reserved.<br />
Changes and developments in the already publicized information are continuously updated and publicized again via<br />
the press and internet and through special situation disclosures.<br />
All special situation disclosures and press releases will be included on the website. In order to avoid discrimination<br />
among investors, no news and information which can be accessed by only internet users, other than special situation<br />
disclosures submitted to ‹SE, and press releases will be included on the website and the same rule will be observed<br />
when updating the website.<br />
Furthermore, investor information meetings will be organized in cases where Company operations have to be shared<br />
with the investors in detail and/or as required by the Board of Directors. Appointment requests made by the press<br />
to the Board of Directors or Management will be evaluated in the Investor Relations Unit, and appointments will be organized<br />
with the approval of the Corporate Governance Committee. Employment of the internet will be encouraged<br />
for forwarding questions in writing by potential investors, share holders, stakeholders, the press, and financial institutions<br />
representing investors; but all questions will be answered by the Investor Relations Unit under the information<br />
policy.<br />
Board of Directors members Alaattin fiener and Mahmut Kemal Ayd›n are authorized to disclose information about<br />
the Company; and questions forwarded to the Investor Relations Unit will be answered by Orhan Tan›flman.<br />
9. Special Situation Disclosures<br />
49 special situation disclosures have been made in <strong>2004</strong>; all in complete format and in due time. Neither ‹SM nor CMB<br />
have asked for supplementary disclosures.<br />
10. The Company’s Website and Content<br />
The Company website is conveniently accessed at www.ihlas.com.tr, and includes all the information cited under Section<br />
II, Article 1.11.5 of CMB’s Corporate Governance Principles. Information on the website is published in English, German<br />
and Arabic also for the benefit of foreign investors.<br />
On the website:<br />
The “Corporate” page includes Company management organization,<br />
The “Sectors” page includes information about all the operations of the Company,<br />
The “Investor” page includes all financial information required to be publicized; all information required to be disclosed<br />
under the Corporate Governance Principles; and the organization of the Company and participations,<br />
The “News” page includes all announcements made by the Company, and press information; and<br />
The “Career” page includes application procedures and contact information for those who want employment in our<br />
Group.<br />
19
20<br />
11. Declaration of Individual Final Principal Share Holder(s)<br />
The Company’s shareholding structure is disclosed on the website free from indirect participation relationships. All<br />
changes are immediately displayed on charts.<br />
Shareholder Share Percent (%) Share Amount<br />
Enver Ören 27.0 106,553,600<br />
Public Shares 70.9 279,830,959<br />
Other 2.1 8,256,414<br />
TOTAL 100 394,640,973<br />
12. Publicity of Internally Informant Persons<br />
The list of internally informant persons is given below:<br />
Name, Surname Position<br />
Enver Ören Chairman of the Board<br />
A.Mücahid Ören Deputy Chairman of the Board - CEO<br />
Mahmut Kemal Ayd›n Member of the Board – Chief Accounting Officer<br />
Alaattin fiener Member of the Board<br />
Zeki Celep Member of the Board<br />
Yavuz Özgün Member of the Board<br />
Abdullah Tural› Member of the Board<br />
Hüseyin Ayd›n Arvasi Member of the Board (Independent) – Audit Committee Chairman<br />
‹smet Erkut Member of the Board (Independent) – Audit Committee Member<br />
Ertu¤rul Taka Member of the Board (Independent) – Corporate Governance Committee Chairman<br />
Bekir Eren Member of the Board (Independent) – Corporate Governance Committee Member<br />
Ali Tubay Gölbafl› Chief Financial Officer<br />
Ahmet Karsl›o¤lu Credits and Treasury Director<br />
H. Alev Volkan Assistant Chief Accounting Officer<br />
M. Kürflat Kebelio¤lu Assistant Chief Accounting Officer<br />
Erdal fiahin Internal Audit Unit Officer<br />
Osman Duman Internal Audit Unit Officer<br />
Salim Akgül ‹rfan YMM A.fi., Independent Auditors - Responsible Partner, Chief Auditor<br />
Hayati Çiftlik ‹rfan YMM A.fi., Independent Auditors - Responsible Partner, Chief Auditor<br />
Erol Aksoy ‹rfan YMM A.fi., Independent Auditors - Chief Auditor<br />
Yüksel Verdi ‹rfan YMM A.fi., Independent Auditors - Chief Auditor<br />
Erkut Yavuz ‹rfan YMM A.fi., Independent Auditors - Auditor<br />
Rüstem Avc› ‹rfan YMM A.fi., Independent Auditors - Assistant Auditor<br />
Do¤ufl Bektafl ‹rfan YMM A.fi., Independent Auditors - Assistant Auditor<br />
Abdullah Tu¤cu ‹rfan YMM A.fi., Independent Auditors - Assistant Auditor<br />
Coflkun Sa¤ol ‹rfan YMM A.fi., Independent Auditors - Assistant Auditor<br />
Atilla Korkmaz ‹rfan YMM A.fi., Independent Auditors - Assistant Auditor<br />
Ahmet fienel Çak›rtafl ‹rfan YMM A.fi., Independent Auditors - Assistant Auditor<br />
Mehmet Uslu ‹rfan YMM A.fi., Independent Auditors - Assistant Auditor<br />
Kamil Yener Auditor<br />
The above list will be publicized together with the <strong>Annual</strong> <strong>Report</strong> <strong>2004</strong>. It will also be possible to access the list on the<br />
website in the Corporate Concordance <strong>Report</strong>. The list will be updated as required.
SECTION III – STAKEHOLDERS<br />
13. Informing Stakeholders<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2004</strong><br />
All the questions forwarded by stakeholders during the year have been answered by the concerned units. A special<br />
medium was not developed for such purposes. Existing information channels have been used. The Company’s official<br />
e-mail address (ihlas@ihlas.com.tr) has been actively used for both answering questions and making announcements.<br />
14. Participation of Stakeholders in Management<br />
Meetings have been organized with the dealers and district representation offices of the affiliated<br />
Group companies, their free opinions were heard and suitable suggestions have been implemented. An e-mail address<br />
(insankaynaklari@ihlas.com.tr) has been developed and announced to the employees for facilitating participation<br />
in management and communicating all complaints and suggestions freely. Furthermore, it has been noted that<br />
suggestions to be sent over the official e-mail address would also be taken into consideration. Work is in progress for<br />
the more active participation of stakeholders in management.<br />
15. Human Resources Policy<br />
Human resources policy of the Group is given below:<br />
HUMAN RESOURCES MANAGEMENT VISION AND POLICIES OF ‹HLAS HOLD‹NG<br />
Our Vision<br />
‹hlas Holding puts forth its values as a community and customer focused organization with a global and strategic<br />
concept; considerate of resources and targeting efficiency; with a command of knowledge and total quality; and giving<br />
high priority to conciliation, change and sharing. The Company therefore implements a modern Human Resources<br />
Management by making efforts to add to its human resources, people who share and implement these values.<br />
Our vision is to develop and implement modern management systems compatible with corporate culture and values<br />
in order to ensure competition advantage to ‹hlas Holding in the 2000s and to sustain such advantage by a close<br />
follow up of management-organization and human resources management developments in the world and in our country;<br />
and perform the required activities in this line.<br />
Our Basic Policy<br />
• To ensure dynamic organizational structures in line with the vision and objectives of ‹hlas Holding, in order to adapt<br />
to change.<br />
• To develop all systems with a view to individual and team performance under the concept of process improvement<br />
in order to ensure an effective and efficient employee performance and steer the Company towards its objectives;<br />
thus to enhance the professional skills of employees, giving support to individual performance, corporate performance<br />
and career development activities.<br />
• To adopt democratic working principles without making any religious, language, gender and racial discriminations<br />
among people who will be included in the Company staff following the recruitment and placement procedures.<br />
• To take preventive, organizational, and disciplinary measures rather than prohibitive ones.<br />
• To include in the ‹hlas Holding staff, dynamic people open to change with a strong educational and ethical awareness;<br />
a high EQ; with no behavior problems; with high delegation skills; who are able to think positively; and own and<br />
implement Company values.<br />
• Recruitment – placement activities are performed at the Head Office and affiliated companies as described above<br />
within the framework of identified job descriptions and employee qualifications.<br />
Our Functional Policy<br />
• To provide an environment to facilitate the contribution of all employees to the Company.<br />
• To ensure equal and fair behavior towards all employees within the framework of existing conditions.<br />
• To give equal chances to all employees to contribute to the Company and their team and develop themselves to<br />
the highest possible level.<br />
21
22<br />
• To ensure that all employees use their skills and intelligence and generate values in line with corporate objectives.<br />
• To establish and develop systems giving the opportunity to employees for career development within the Company<br />
(or in Group Companies) with a view to the needs of the Company and individual skills and professional targets.<br />
• To establish and develop performance and wage systems in line with the general corporate structure, to ensure<br />
the most equitable performance, career and wage evaluations.<br />
• To ensure that each employee has a clear understanding of his/her role within the Company; expected qualifications;<br />
assigned authorizations and responsibilities; and the contribution of his/her work to the Company’s principal objectives.<br />
• To ensure that all employees are primarily informed about new systems to be established and the objectives of<br />
such systems.<br />
• To ensure a multi dimensional interaction and communication in Human Resources management implementations.<br />
• To ensure and update a documentation system which includes all employee data, records and management information.<br />
• To perform activities for the adoption of a wide scope corporate culture which ensures integration.<br />
• To organize social and cultural activities to reinforce the adoption of corporate culture and increase motivation.<br />
• To continuously improve and develop the human resources system in line with the developments in the world;<br />
and the Company’s beliefs and values.<br />
• To ensure an equitable deployment of training activities within an identified budget and system for the enhancement<br />
of employee skills.<br />
• To make the required organization and document the concerned procedures to ensure equal rights to employees<br />
and facilitate their work.<br />
• To give timely assistance to our employees in their personal problems.<br />
16. Customer and Supplier Relations<br />
Quality activities performed in all affiliated companies have been deployed and updated in this area also. In-service<br />
training has been given on this basis. By paying consideration to the words of our Board of Directors Chairman<br />
quoted as “our prestige is more important than our money”, all consumer problems have been approached with the<br />
concept that the consumer is always justified; and solutions were found in this line.<br />
17. Social Responsibility<br />
Founders and employees of the ‹hlas Group have joined under the principle of “Blessed are those who serve mankind”,<br />
and resolved to do business in this line. Thus, our primary principle is to render our services to the benefit of<br />
mankind without making any religious, racial, gender, and age discrimination. Effective and efficient use of the world’s<br />
resources which is common to all mankind, consideration to protecting the environment, to undertake and implement<br />
social responsibilities are indisputable features of serving mankind. Peace in human life is primarily ensured through<br />
good training, and secondly by providing the chance for sustaining a healthy life. Our Group therefore, realizes its Training<br />
and Health activities with an awareness of social responsibility.<br />
Our Company is not involved in any activities which pollute and damage the environment. The Company has not<br />
encountered any legal and financial problems in this respect.
SECTION IV – BOARD OF DIRECTORS<br />
18. Establishment, Structure, Formation and Independent Members of the Board of Directors<br />
Board of Directors<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2004</strong><br />
Dr. Enver Ören Chairman of the Board (non executive member)<br />
Ahmet Mücahid Ören Deputy Chairman of the Board and CEO (executive member)<br />
Yavuz Özgün Member of the Board and Managing Director (executive member)<br />
Alaettin fiener Member of the Board and Chief Legal Advisor (executive members)<br />
Mahmut Kemal Ayd›n Member of the Board and Chief Accounting Officer (executive member)<br />
Zeki Celep Member of the Board and Construction Group General Manager (executive member)<br />
Abdullah Tural› Member of the Board (non executive member)<br />
Hüseyin Ayd›n Arvasi Member of the Board and Audit Committee Chairman (independent member)<br />
‹smet Erkut Member of the Board and Audit Committee Member (independent member)<br />
Ertu¤rul Taka Member of the Board and Corporate Governance Committee Chairman (independent member)<br />
Bekir Eren Member of the Board and Corporate Governance Committee Member (independent member)<br />
Out of the 11 members of the Board of Directors with different Board of Directors Chairman and Executive Chairman,<br />
5 are executive, 2 non executive and 4 independent members. Accordingly, more than half (6) of the Board of Directors<br />
members are non executive, and one third (4) independent members.<br />
Hüseyin Ayd›n Arvasi, Ertu¤rul Taka, ‹smet Erkut, and Bekir Eren have declared that no direct or indirect relationship<br />
of beneficial interest in the context of employment, capital, or trade has been established during the last two years with<br />
‹hlas Holding Inc. or its affiliates, or any of the Group companies by their persons, their wives, and their tertiary kinship<br />
by blood or marriage; and that they have undertaken no responsibilities in the audit process during the last two years.<br />
They have submitted the following declaration of independence to the General Assembly which convened on<br />
28.05.<strong>2004</strong> on the occasion of the account period for the year 2003 which is the year of their designation as independent<br />
Board of Directors members.<br />
Bekir Eren however, is not an independent member any more as per the date of this <strong>Report</strong> and has been replaced by<br />
Adil Önal with the Board of Directors’ appointment on April 7, 2005.<br />
D E C L A R A T I O N O F I N D E P E N D E N CE<br />
I declare herewith that no direct or indirect relationship of beneficial interest in the context of employment, capital,<br />
or trade has been established during the last two years with ‹hlas Holding Inc. or its affiliates, or any of the Group companies<br />
by my person, my wife, and my tertiary kinship by blood or marriage; that I have undertaken no responsibilities<br />
in the audit process during the last two years; and that I am independent according to the criteria cited in the laws<br />
and regulations, the Company’s Articles of Association and the Governance Principles issued by the Capital Market<br />
Board.<br />
BEK‹R EREN<br />
D E C L A R A T I O N O F I N D E P E N D E N CE<br />
I declare herewith that no direct or indirect relationship of beneficial interest in the context of employment, capital,<br />
or trade has been established during the last two years with ‹hlas Holding Inc. or its affiliates, or any of the Group companies<br />
by my person, my wife, and my tertiary kinship by blood or marriage; that I have undertaken no responsibilities<br />
in the audit process during the last two years; and that I am independent according to the criteria cited in the laws<br />
and regulations, the Company’s Articles of Association and the Governance Principles issued by the Capital Market<br />
Board.<br />
ERTU⁄RUL TAKA<br />
23
24<br />
D E C L A R A T I O N O F I N D E P E N D E N CE<br />
I declare herewith that no direct or indirect relationship of beneficial interest in the context of employment, capital,<br />
or trade has been established during the last two years with ‹hlas Holding Inc. or its affiliates, or any of the Group<br />
companies by my person, my wife, and my tertiary kinship by blood or marriage; that I have undertaken no responsibilities<br />
in the audit process during the last two years; and that I am independent according to the criteria cited in the<br />
laws and regulations, the Company’s Articles of Association and the Governance Principles issued by the Capital Market<br />
Board.<br />
‹SMET ERKUT<br />
D E C L A R A T I O N O F I N D E P E N D E N CE<br />
I declare herewith that no direct or indirect relationship of beneficial interest in the context of employment, capital,<br />
or trade has been established during the last two years with ‹hlas Holding Inc. or its affiliates, or any of the Group companies<br />
by my person, my wife, and my tertiary kinship by blood or marriage; that I have undertaken no responsibilities<br />
in the audit process during the last two years; and that I am independent according to the criteria cited in the laws<br />
and regulations, the Company’s Articles of Association and the Governance Principles issued by the Capital Market<br />
Board.<br />
HÜSEY‹N AYDIN ARVAS‹<br />
19. Qualifications of the Board of Directors Members<br />
Although minimum qualifications sought in the designation of the Board of Directors members are not included in the<br />
Company’s Articles of Association, the trend is to designate Board of Directors members with a high level of knowledge<br />
and experience; good qualifications; a certain level of experience and background, with no previous conviction for<br />
fiscal offences; who are knowledgeable about the Company’s field of operations and are preferably university graduates;<br />
which are the qualifications cited in CMB, Corporate Governance Principles, Section IV, Articles 3.1.1, 3.1.2 and 3.1.5.<br />
All the Board of Directors members have the minimum qualifications cited above.<br />
20. The Company’s Mission, Vision and Strategic Objectives<br />
Mission<br />
• To observe social peace, and peace and benefit for people in all the services we offer<br />
• To adopt a leading role at all the sectors in the filed of our operations<br />
• To adopt a work tempo for our Media Group, with no time limitations<br />
• To maintain the attitude of our Marketing Group in accessing even the remotest part of our country<br />
• To ensure that our Construction Group always offers the safest and most comfortable houses to the consumer at reasonable<br />
prices.<br />
Vision<br />
• To deploy the environment of peace throughout the world<br />
• To ensure that our Media Group offers to the world the most effective content (news, amusement , information)<br />
rapidly<br />
• To ensure that our Marketing Group introduces all products to the benefit of people at expected standards<br />
• To ensure that the Construction Group introduces to all the people in our country the houses as spacious and as comfortable<br />
as they wish.<br />
Values<br />
• Blessed are those who serve mankind<br />
• Gaining the confidence of others is prior to gaining their money<br />
• The prerequisite of easy and peaceful individual lives is a powerful state<br />
• Our management style open to change, our corporate features compatible with the world economy, our strong infrastructure,<br />
and our human resources particular to our Group are our future.
Strategy<br />
• To use state of the art technology most effectively<br />
• To find the most effective channels in reaching the customer<br />
• To produce the most up to date, most effective content<br />
• To use resources effectively and efficiently<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2004</strong><br />
• To benefit from the social memory and sectoral experiences of developed countries and to avoid repeating their mistakes<br />
• To develop contents and products by paying consideration to all the members of the society ( females, children and the aged)<br />
• To be accessible everywhere and under any circumstances<br />
• To cooperate with the leading world organizations at the sectors in the field of our operations<br />
The Board of Directors regularly reviews the Company’s performance level in the achievement of its objectives, Company<br />
performance and previous performance. Activities for the reflection of such reviews on Company performance within<br />
the framework of objective criteria are in progress.<br />
21. Risk Management and Internal Audit Mechanism<br />
Work has been completed by the Audit Committee for the functions of risk management and internal audit; and Erdal<br />
fiahin and Osman Duman have been appointed to the Internal Audit Unit. Interim observations were ensured to prevent<br />
risks beforehand by using dynamic risk management methods. Online data production and continuous monitoring of<br />
the whole system is basic in the internal audit mechanism.<br />
22. Authorities and Responsibilities of the Board of Directors Members, and Managers<br />
Authorities and responsibilities of the Board of Directors members, and Company managers are identified through<br />
laws and regulations, rules of ethics, and Company procedures. No provisions are included in the Company’s Articles<br />
of Association in this respect.<br />
Administration and representation of the Company lies with the Board of Directors. All documents to be submitted<br />
and all agreements to be made by the Company shall only be legally sufficient under the official corporate name and<br />
signed by a person authorized to bind the Company.<br />
Enver Ören and Ahmet Mücahid Ören with their several and individual signatures; and any two of Mahmut Kemal Ayd›n,<br />
Yavuz Özgün, Alaattin fiener and Zeki Celep with their joint signatures are authorized to represent and bind the Company.<br />
Company Managers perform their duties equitably and transparently, and are accountable and responsible for their<br />
performance. Managers comply with laws and regulations, the Company’s Articles of Association, and Company rules<br />
and policies in the performance of their duties; and inform the Board of Directors accordingly.<br />
23. Principles for the Activities of the Board of Directors<br />
• Board of Directors meeting agendas are identified upon the recommendation of Company management and committees;<br />
with the request made by managers for a meeting in situations where a Board of Directors resolution is required<br />
for Company operations; and whenever required by topical events of the concerned period. The Board of Directors<br />
convenes minimum once each month.<br />
• The Board of Directors Secretary is authorized to organize, and announce the Board of Directors meeting agenda<br />
and serve the notices for the call to meetings; to inform the Board of Directors members; and to draw up all the Board<br />
of Directors documents. Ahmet Çal›flkan acts as the Board of Directors Secretary. Board of Directors members are called<br />
to meeting (by e-mail or telephone) by the Board of Directors Secretary together with a note stating the place, date<br />
and time of the meeting.<br />
• 26 meetings have been held during the operating period <strong>2004</strong>. 96% participation was realized at the 26 meetings in <strong>2004</strong>.<br />
• Nothing happened during the operating period <strong>2004</strong> giving rise to counter opinions required to be recorded. No counter<br />
votes were given by independent members during the same period.<br />
• Participation in person is ensured at all the Board of Directors meetings and particularly those meetings with an agenda<br />
on the items included under Section IV, Article 2 .17.4 of the CMB Corporate Governance Principles.<br />
• Questions forwarded at the meetings are not recorded.<br />
• Board of Directors members are not entitled to preferential votes and/or veto rights.<br />
25
26<br />
24. Prohibition of Transactions and Competition with the Company<br />
Although prohibition for transactions with the Company was not applied to Board of Directors members in the operating<br />
period <strong>2004</strong>; no resulting conflict of interests occurred.<br />
25. Rules of Ethics<br />
The following rules of ethics have been developed by the Board of Directors for the Company and its employees. These<br />
rules of ethics have been announced to Company employees and publicized over the website in accordance with the<br />
information policy.<br />
The Board of Directors believes that the capital market of our Company is based on trust before everything; and therefore<br />
rules of ethics are of high importance, but most important of all is the sovereignty of the law and guarding such<br />
sovereignty.<br />
The Company General Manager, the Managing Director responsible for Financial Affairs and Accounting Finance Managers<br />
are anticipated to:<br />
• make complete, fair, true, timely and understandable disclosures in all reports and documents publicized or submitted<br />
to the authorities of the capital market where the Company is enrolled;<br />
• comply with all the laws, regulations and principles binding the Company individually and the Company’s relations<br />
with its shareholders;<br />
• ensure compliance with not only the literal aspect of these rules of ethics, but their essence also; and to make efforts for<br />
the development of a company culture to form the basis of compliance with laws and company policies in all activities.<br />
However, internally informant persons who are in a position to have knowledge about the financial statements which<br />
are not yet publicized, are expected to keep such information confidential in accordance with the rules of ethics.<br />
Our employees:<br />
• are honest and reliable people who give due care to, and make no compromise on ethical and moral values;<br />
• perform their duties at their units or departments for the benefit of the Company zealously and objectively in a disciplined<br />
and careful way in compliance with the principles of confidentiality;<br />
• fulfill their duties in the best way to increase the Company’s profitability and market share;<br />
• are always reasonable and considerate in their language, manners and the way they dress;<br />
• are aware of the significance of subordinate-top management and customer relations in business life and organize<br />
themselves accordingly;<br />
• have a positive impact on the people they address both within and outside the Company with their respectful, moderate,<br />
modest, active and positive attitudes;<br />
• meticulously comply with the laws, professional principles and the concerned regulations;<br />
• take the most effective, sound and appropriate decisions for the Company by evaluating different ideas, perspectives<br />
and suggestions with a conciliatory attitude;<br />
• refrain from political, religious, ethnic arguments involving discrimination; and all unlawful activities;<br />
• own the knowledge and experience required by the job they perform. They make continuous efforts to develop their<br />
general knowledge and professional knowledge and skills. They fulfill their responsibilities in the best way with all these<br />
qualifications and values they own.<br />
26. Number, Structure and Independence of the Board of Directors Committees<br />
An audit committee and a corporate governance committee have been set up in line with the Principles. Each committee<br />
has two independent members and an independent chairman.<br />
Names and qualifications of committee members are as follows:<br />
Audit Committee Chairman: Hüseyin Ayd›n Arvasi (Parliament member of the 17-18 the Parliamentary term; independent<br />
member)<br />
Audit Committee Member: ‹smet Erkut (professional manager; independent member)<br />
Corporate Governance Committee Chairman: Ertu¤rul Taka (retired High Criminal Court Judge; lawyer; independent<br />
member)
<strong>Annual</strong> <strong>Report</strong> <strong>2004</strong><br />
Corporate Governance Committee Member: Bekir Eren (professional manager; independent member)<br />
The procedure to be followed in the performance of committee activities is designated as: “Committees act within<br />
the area of their authorities and responsibilities and make recommendations to the Board of Directors. Final decision<br />
however, lies with the Board of Directors.”<br />
The audit committee and the corporate governance committee held 6 and 4 meetings respectively during the operating<br />
period <strong>2004</strong>; and all the recommendations of these committees have been adopted by the Board of Directors.<br />
27. Remunerations for the Board of Directors<br />
• No payments are made to the Board of Directors members other than the rights and benefits designated by the General<br />
Assembly. Remunerations are paid to executive Board of Directors members however, for their executive duties.<br />
• No performance based payment method exists which reflects Company performance.<br />
• The Company does not give loans and make available credits to Board of Directors members and Company managers.<br />
• No credits have been made available under the name of personal credit via the mediation of third persons, and no<br />
guarantees given such as surety in favor.<br />
Directors’ Biographies<br />
Ali Tubay Gölbafl›<br />
Financial Affairs Coordinator<br />
Ali Tubay Gölbafl› was born in 1959 in Istanbul where he completed primary, secondary and high school education.<br />
Mr. Gölbafl› graduated from School of Business of Istanbul University in 1982. Beginning his career at the Circulating Capital<br />
Accounting office of Cerrahpasa School of Medicine, Mr. Gölbafl› joined ‹hlas immediately after his graduation from<br />
university. Mr. Gölbafl› was appointed as Head of Finance at ‹hlas Holding following the completion of military service.<br />
Ali Tubay Gölbafl› is married with two children and speaks English.<br />
Faruk Koca<br />
General Manager of Healthcare Services Group<br />
Born in Bulanik, Mufl in 1938, Faruk Koca studied at the Kuleli Military High School and the School of Medicine of Istanbul<br />
University, graduating as a dentist in 1961. Mr. Koca then worked at the Gulhane Military Medicine Academy, Erzincan<br />
Hospital, Gumussuyu Hospital and the Kuleli Military High School. After retiring from the military as a colonel,<br />
Mr. Koca joined ‹hlas in 1983. Mr. Koca established and managed ‹hlas’s first medical facility, a city clinic. Between 1991-<br />
1993, Mr. Koca served as Secretary General of ‹hlas Holding and Head of the Supervision Board of TGRT television. Mr.<br />
Koca was ‹hlas Holding’s Administrative Coordinator between 1998-2003. Mr. Koca currently serves as the Chief of Staff<br />
Turkiye Hospital, is married with three children and speaks German and Persian.<br />
Faruk Demir<br />
General Manager of Educational Services Group<br />
Faruk Demir, born in Nevsehir in 1940, graduated from Nevsehir High School, and studied at Istanbul University Faculty<br />
of Science and Mathematics. After his graduation from the faculty, he worked as a teacher of Mathematics, Physics<br />
and Astronomy at the Private Fatih High School for Boys. Demir, who completed his military service as a reserve officer<br />
at the naval forces in 1972, subsequently worked as a teacher of Mathematics at the Naval College. In 1980 he became<br />
a teacher of Mathematics and Physics at Zeytinburnu Religious High School. In 1985 he was appointed as Branch Manager<br />
for the Department of Research of the National Education Directorate in Istanbul. He served at the Department of<br />
Research and Statistics, Department of Finance and Equipment, and Department of Private Courses of the National Education<br />
Directorate in Istanbul. In 1995 he retired and started serving as the ‹hlas Foundation Dormitories General Director.<br />
Demir, who was appointed as ‹hlas Multiprogram High School Director in 1997, serves as the General Manager of<br />
‹hlas Education Group. Faruk Demir is married with 3 children.<br />
Other directors’ biographies are given in the Board of Director’s page.<br />
27
28<br />
Business<br />
media<br />
construction<br />
marketing
manufacturing<br />
health<br />
education<br />
Faaliyet raporu <strong>2004</strong><br />
29
media<br />
‹hlas views information and news to be among essential human needs.<br />
Our roots in media go back more than 35 years when the daily Türkiye<br />
newspaper had come into being. Ever since, our tradition of accurate,<br />
objective and calm reporting has found itself many successful applications<br />
in printed, visual and electronic media.<br />
Türkiye newspaper continues to form the core of our media business.<br />
TGRT television has grown beyond the definition of a generic national<br />
channel; TGRT’s news and marketing channels serve different needs<br />
within Turkey, while the European channel reaches out to the viewers<br />
and advertisers in Europe. ‹hlas News Agency takes the pulse of the<br />
nation as well as covering the global hotspots. Across the Middle East<br />
and beyond, ‹hlas News Agency serves the worldwide media as an<br />
exclusive news source.<br />
Industry magazines of ‹hlas are market leaders. New magazines are being<br />
introduced to serve broader audiences. A pioneer of electronic publishing<br />
in Turkey, ‹hlas regards its online publications as an important<br />
complementary service as well as a foothold in the future of online<br />
news and entertainment.<br />
The recent establishment of ‹hlas Media Holding is aimed to further the<br />
synergy among media companies of ‹hlas for increased effectiveness<br />
and better service to our stakeholders across the board.<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2004</strong><br />
31
32<br />
‹hlas Media Holding<br />
(‹hlas Yay›n Holding A.fi.)<br />
‹hlas Media Holding aims to maximize the synergy<br />
among the group’s media assets and operations.<br />
‹hlas Media Holding (IMH) ) (www.iyh.com.tr) was established<br />
in 2003 to bring together the media assets of<br />
‹hlas to generate an optimal level of synergy. IMH thus<br />
provides the framework for ‹hlas to manage its media<br />
assets in an effective and productive way. IMH also<br />
aims to share these benefits with investors by taking<br />
‹hlas's media companies public.<br />
HUZUR RADYO TV (TGRT Television) 56.50<br />
‹HLAS GAZETEC‹L‹K (Türkiye Newspaper) 20.11<br />
‹HLAS HABER AJANSI (‹hlas News Agency) 50.00<br />
TGRT HABER (TGRT News Channel) 95.00<br />
TGRT D‹J‹TAL TV H‹ZMETLER‹ (TGRT Marketing Channel) 95.00<br />
‹hlas Holding increased its share of IMH to 97.9%.<br />
As a result of a series of strategic decisions, IMH is in<br />
the process of increasing its shares in its participations.<br />
The table below shows IMH participation percentages<br />
at the end of <strong>2004</strong>:
TGRT TV<br />
(Huzur Radyo TV A.fi.)<br />
As Turkey's Window to the World, TGRT offers some of<br />
the best news and entertainment available to viewers<br />
in Turkey and abroad.<br />
TGRT is among the pioneers of private broadcasting<br />
in Turkey. The channel launched in 1993 as soon as the<br />
legal framework for private television began to take<br />
shape.<br />
As Turkey's Window to the World, TGRT offers some<br />
of the best news and entertainment available to<br />
viewers in Turkey and abroad. TGRT's newscasts and<br />
current affairs programs offer accurate, objective and<br />
timely coverage of national and international<br />
developments. In the entertainment area, TGRT has<br />
originated numerous top stars and successful program<br />
formats.<br />
TGRT offers news and entertainment suitable for all<br />
family members. A strong focus on human interest<br />
stories in news coverage and lively entertainment<br />
programming continue to attract a female-skewing<br />
audience.<br />
TGRT re-positioned itself as a younger and more<br />
dynamic channel in 1998. The re-positioning brought<br />
rapid and continuous growth of the viewer base and<br />
advertising revenues. TGRT's branding success was<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2004</strong><br />
internationally recognized in 1999 when Promax<br />
Europe selected TGRT, along with RTL and Sat1, as the<br />
subject matter of a branding case study. The same<br />
year, TGRT was awarded the Channel of the Year Prize<br />
by a national TV association.<br />
TGRT's technology is a strong asset of the channel.<br />
A network of some 800 transmitters gives TGRT<br />
unequalled terrestrial reach across Turkey. The<br />
channel is also available on the national cable TV<br />
network and the DigiTurk platform, reaching the most<br />
affluent urban centers. TGRT is also available via<br />
satellite to all of Turkey as well as Europe, the Middle<br />
East, North Africa, Central Asia and the Caucasus,<br />
North America and Australia.<br />
33
34<br />
TGRT FM<br />
TGRT FM is the only national radio station that offers<br />
high quality radio program production year after year.<br />
In a market that is full of music radios and unscripted<br />
talk programs, TGRT FM fills the gap for quality production<br />
targeting especially young and female demographics.<br />
Round-the-clock newscasts are specially edited to satisfy<br />
the information needs of the Turkish family. Programs<br />
for kids and women include well-scripted daily<br />
studio talk shows as well as dramas. Cultural programs<br />
complement the picture. Research indicates that 80% of<br />
the audience listens to TGRT FM at home while the remaining<br />
20% are drive-time listeners.<br />
Some 127 transmitters in 81 provinces make TGRT<br />
FM the most widely available private national station.<br />
Satellite and Internet distribution take TGRT FM's reach<br />
further beyond national borders with regular listeners<br />
providing feedback from as far away as Australia and<br />
Latin America.<br />
TGRT FM's technology is an important element of the<br />
station's unrivaled quality. Since the station's first transmission<br />
on 4 October 1993, TGRT FM has excelled in<br />
keeping abreast with the latest production and transmission<br />
technologies. The station operates out of one<br />
fully-equipped transmission studio, two recording studios<br />
and two special editing studios.<br />
TGRT News Channel<br />
(TGRT Haber TV A.fi.)<br />
TGRT Haber offers accurate,<br />
objective and timely reports around<br />
the clock.<br />
TGRT Haber was born out of TGRT's newscasts. The<br />
success of the news product has enabled TGRT to spin<br />
off a 24-hour news channel in <strong>2004</strong>.<br />
TGRT Haber's motto is “News And Nothing But<br />
News“. True to its motto, TGRT Haber offers accurate,<br />
objective and timely reports around the clock. The<br />
channel's responsible editorial policy is one of the main<br />
reasons why the viewers immediately embraced it as<br />
a primary source of information as soon as the channel<br />
launched. Across the nation and in World's hotspots,<br />
TGRT Haber is supported by a true global newsgathering<br />
giant, ‹hlas News Agency.<br />
TGRT Marketing Channel<br />
(TGRT Dijital TV A.fi.)<br />
Once again making Turkish TV history, TGRT has<br />
established a marketing channel based on the hugely<br />
successful European and American models. TGRT<br />
Marketing is a 24-hour shopping channel that utilizes<br />
TGRT's state-of-the-art digital TV production and<br />
transmission facilities.
Türkiye Newspaper<br />
(‹hlas Gazetecilik A.fi.)<br />
As a result of its lively sports news service, its lively sections<br />
targeting women and children and its avoidance of extremes<br />
in all subjects, Türkiye occupies an esteemed position in the<br />
eyes of Turkish families.<br />
Published since April 22, 1970, the newspaper Türkiye<br />
is among the pioneers of the Turkish press. Türkiye<br />
keeps its reputation as a newspaper with a vision of accurate<br />
and truthful news, completely adherent to journalistic<br />
ethics and norms, and dedicated to universal<br />
and modern values. When compared with other news-<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2004</strong><br />
papers, its established and experienced management<br />
structure and its time-honored approach to journalism<br />
render Türkiye unique. Türkiye targets all social groups<br />
and every member of the household, does not offend<br />
the sensibilities of its readers, and produces concise,<br />
unbiased and comprehensible news stories.<br />
As a result of its lively sports news service, its lively<br />
sections targeting women and children and its avoidance<br />
of extremes in all subjects, Türkiye occupies an esteemed<br />
position in the eyes of Turkish families. Having<br />
a long-serving management team and shareholding<br />
structure since its inception, Türkiye continues to benefit<br />
from the experience of its top managers and owners,<br />
in sharp contrast to most other media groups in Turkey.<br />
Türkiye efficiently covers the national agenda and considers<br />
it a duty to protect and serve nation’s interests<br />
and the public welfare.<br />
As well as its dynamic and efficient news sources,<br />
and its experienced and steady management, Türkiye’s<br />
technical and logistical infrastructure and technological<br />
facilities also help make it a first-in-class newspaper.<br />
Türkiye has printing facilities in Istanbul, Ankara, ‹zmir,<br />
35
36<br />
Adana, Trabzon and Antalya. The capacity of the Istanbul<br />
plant is 55,000 newspapers with a total of 28 pages<br />
- 12 of which are in full color - per hour.<br />
Thanks to its printing plants elsewhere in the country,<br />
Türkiye does not only penetrate the heartland of the country,<br />
but it can also produce pages based on local<br />
news and customize its local products according to the<br />
agenda of each region. It is in a unique position of being<br />
both a national and regional newspaper at the same<br />
time. All printing facilities also deliver services to various<br />
other national and regional papers.<br />
Türkiye also has the advantage of being distributed<br />
directly to many households and businesses. Türkiye<br />
has pioneered the practice of nation-wide direct distribution<br />
to subscribers via a wide network of agencies.<br />
The direct distribution network consolidates its strong<br />
consumer base, which is also beneficial for the Holding’s<br />
activities in other business sectors.<br />
Türkiye continues to be a newspaper with a vision of<br />
accurate and truthful news, adherent to journalistic ethics<br />
and norms, and dedicated to universal and modern<br />
values. With continual investments in technology and<br />
state-of-the-art capabilities, Türkiye above all remains<br />
devoted to independent and principled top quality journalism.<br />
CAPACITY OF PRINTING FACILITIES AND<br />
NUMBER OF NEWSPAPERS PRINTED (As of<br />
December 31.<strong>2004</strong>)<br />
Printing Number of papers Maximum daily<br />
Facility printed daily capacity (pcs.)<br />
‹stanbul 73,520 450,000<br />
Ankara 34,070 350,000<br />
‹zmir 29,382 350,000<br />
Adana 21,320 150,000<br />
Trabzon 20,447 150,000<br />
Antalya 10,310 150,000<br />
Total 189,049 1,600,000<br />
MONTHLY CIRCULATION OF TÜRK‹YE<br />
NEWSPAPER (NET UNIT SALES)<br />
Months 2003 <strong>2004</strong><br />
January 3,882,926 3,248,445<br />
February 3,010,690 3,099,815<br />
March 3,583,368 4,112,390<br />
April 3,689,314 3,986,516<br />
May 3,432,303 4,477,252<br />
June 3,321,897 4,955,523<br />
July 3,125,031 5,651,707<br />
August 3,400,105 5,627,807<br />
September 3,297,320 5,364,870<br />
October 3,202,582 6,249,407<br />
November 3,099,005 5,729,451<br />
December 3,198,209 6,314,329<br />
Total 40,242,750 58,817,512
‹hlas News Agency<br />
(‹hlas Haber Ajans› A.fi.)<br />
IHA is the third biggest news agency worldwide based<br />
on criteria such as rapid access to international news,<br />
capacity of live footage and the number of technical<br />
facilities in foreign countries.<br />
Having started its activities in 1993, ‹hlas News<br />
Agency (IHA) (www.iha.com.tr) is one of the top worldwide<br />
agencies which deliver broadcasts to its viewers via<br />
satellite. Unparalleled in Turkey in this respect, IHA has<br />
even overtaken many of its international rivals, thanks to<br />
a policy of farsighted technological investment.<br />
Both nationally and internationally, IHA is an immense<br />
source of both visual and text-based news. Having<br />
140 offices staffed by 700 personnel using 240 cameras<br />
and 400 camcorders, IHA has a huge capacity for generating<br />
news in many forms. Each day IHA processes an<br />
average of 120 video news segments, 450 text-based<br />
news stories and 350 photographs which reach its radio,<br />
TV and print subscribers via the internet and satellite<br />
uplinks.<br />
According to a BBC survey, IHA is the third biggest<br />
news agency worldwide based on criteria such as rapid<br />
access to international news, capacity of live footage<br />
and the number of technical facilities in foreign countries.<br />
In terms of operational efficiency, rapidity and activation,<br />
IHA is the strongest agency in the Middle East<br />
region.<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2004</strong><br />
Thanks to its 32 uplink stations - located predominantly<br />
in the Middle East - IHA can promptly reach news<br />
stories and realize live broadcasts, and distribute these<br />
to the entire world via satellite. IHA also has 70 video footage<br />
transfer stations in Turkey.<br />
Parallel to the enhancement of its technological infrastructure,<br />
IHA has increased its service diversity. In<br />
1998, it started to market news in Arabic and English.<br />
Due to the changing global context after September<br />
11th, IHA has concentrated its activities in Iran, Iraq,<br />
Afghanistan, Pakistan, Russia, Greece, Kosovo, Israel,<br />
37
38<br />
Palestine and the Central Asian Turkic Republics. The<br />
satellite uplink stations built in these countries have<br />
enabled a non-stop supply of news and technical services<br />
to world media.<br />
Thanks to its unrivalled promptness in news transmission,<br />
IHA has outweighed its national competitors<br />
and has become the number one source in news from<br />
the Middle East. IHA has attained great success during<br />
the war in Iraq, because of its numerous uplink systems<br />
and news teams located in all the regions involved in<br />
the war. IHA was the first foreign news agency to establish<br />
live broadcasting facilities in Syria.<br />
IHA, which used to transmit news texts and photographs<br />
to subscribers via satellite through the VBI<br />
system, has replaced this with the SDC (Satellite Data<br />
Casting) system as of 2001. The new system is also being<br />
used for transmitting video footage to foreign news<br />
channels. In this regard, the Agency has initiated an intense<br />
marketing campaign oriented to foreign TV channels.<br />
IHA has completed marketing trips to Germany,<br />
Great Britain, Greece, UAE, Qatar, Macedonia, Israel,<br />
Kazakhstan, Kyrgyzstan and Uzbekistan and has started<br />
to incorporate IHA news systems to the TV channels in<br />
these countries. Currently, foreign channels such as the<br />
N24/SAT1/PRO7 Group, IRIB TV, Alfa, Star, Egypt TV,<br />
Habar TV and Space TV are among the customers of<br />
IHA broadcasts.<br />
IHA was the first company in Turkey to distribute video<br />
footage via the internet, in collaboration with a foreign<br />
company. IHA has also pioneered the distribution<br />
of news stories and photos to subscribers via satellite in<br />
Turkey. The system of digitally archiving footage was<br />
launched by IHA with original software, long before similar<br />
examples elsewhere in the world. As a result, the<br />
IHA archive includes over 190,000 indexed video footages,<br />
as well as 865,000 news stories and 440,000 photos<br />
over the past seven years.<br />
IHA’s live broadcasting vehicles are constructed by<br />
the Agency’s own technical service. The IHA inventory<br />
includes 20 fixed, flyaway and satellite uplink systems.<br />
These systems and vehicles deliver various services to<br />
different parts of Turkey and the world. In <strong>2004</strong>, an additional<br />
four fixed systems and two live broadcast vehicles<br />
are planned. Equipped with a strong data-processing<br />
service, IHA also realizes the maintenance of its<br />
350+ computers. In addition, the Agency completes<br />
projects such as news automation, software development,<br />
and – for the first time in Turkey - digital footage<br />
archiving, with its own personnel.<br />
To attain world-class business and organization standards,<br />
the establishment of the ISO 9001 quality system<br />
was initiated in 1999 and 2000. On March 19, 2001, the<br />
American Quality Association granted the ISO 9001<br />
Quality Certificate to the Agency.<br />
IHA has declared its primary goal as becoming a<br />
“world class news agency”. In this regard, new uplink<br />
stations and IHA offices are planned to be established in<br />
Moscow, Washington D.C., Brussels and Khartoum.
‹hlas Magazine Group<br />
(‹letiflim Magazin Gaz. A.fi.)<br />
Having published its first magazine in 1981, the ‹hlas<br />
Magazine Group is one of the largest Turkish groups in<br />
the field of publications for both the private sector and<br />
international readers. Artisans and small and mediumsize<br />
enterprises, which also form the customer base of<br />
Türkiye newspaper, constitute the main clientele of the<br />
magazine group. Twelve magazines are published<br />
under three categories.<br />
Popular<br />
YEMEK ZEVK‹ – APPETITE<br />
TÜRK‹YE ÇOCUK<br />
Business<br />
KONFEKS‹YON & TEKN‹K – READY-TO-WEAR & TECHNIQUES<br />
MATBAA & TEKN‹K – PRINTING & TECHNIQUES<br />
MED‹KAL & TEKN‹K – MEDICAL & TECHNIQUES<br />
YAPI MALZEME – CONSTRUCTION MATERIALS<br />
FOOD HI-TECH<br />
International<br />
HOME TEXTILE EXPORTS<br />
AUTOMOTIVE EXPORTS<br />
FASHION EXPORTS<br />
TURKEY ECONOMIC NEWSPAPER<br />
CONSTRUCTION WORLD<br />
‹hlas Net<br />
(‹hlas Net A.fi.)<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2004</strong><br />
Active since 1996 in the IT sector, ‘‹hlas.net’ provides<br />
internet access and internet based value added services<br />
to institutions and companies in Turkey. Numerous<br />
internet campaigns organized by ‹hlas.net - FreeClick,<br />
NetTV, Lap-Top, CepNET, and a project organized in<br />
cooperation with the Ministry of Education - have<br />
immensely contributed to the development of the IT<br />
sector in Turkey.<br />
In March 2001, ‹hlas.net changed its strategy, by<br />
channeling all its marketing, sales and infrastructural<br />
capabilities toward corporate internet services. Apart<br />
from its services oriented to individuals, ‹hlas.net has<br />
provided corporate internet access and internet based<br />
value added services to over 3,000 companies over the<br />
past six years.<br />
Corporate solutions provided by ‹hlas.net include:<br />
• Unilateral and bilateral corporate internet access via satellite<br />
• Individual bilateral internet access via satellite<br />
• Data, internet and voice transfer through terrestrial lines<br />
• “Domain name” certification and processing<br />
• E-mail applications and management<br />
• Hosting i.e. publication of web pages<br />
• ‘Co-Location’ and ‘Dedicated Server’<br />
• NT, Linux and FreeBSD providers<br />
• Leased Line and Frame Relay internet access<br />
• Wireless and Wi-Fi access<br />
• E-trade services<br />
• B2B and B2C, i.e. trade via internet, services,<br />
• CRM, E-CRM and ERP solutions,<br />
• VOIP solutions, telephone applications,<br />
• Network and system installation.<br />
National and international partnerships allow ‹hlas.net<br />
to provide the latest technology products and services<br />
to its customers, and to keep in touch with most recent<br />
developments. As the first Turkish ISP to obtain the ISO<br />
9002 Quality Certificate, ‹hlas.net adheres to the<br />
principles of service quality and customer satisfaction<br />
in all its corporate and consumer services. In line with<br />
these principles, ‹hlas.net continuously upgrades its<br />
ISO 9002 certification.<br />
39
‹hlas Holding aims to contribute to the solution of the problem of adequate-housing<br />
in Turkey by developing high-quality, safe and socially<br />
acceptable housing. That has been the mission of the ‹hlas Construction<br />
Group since 1990: it has completed the construction of 1.3 million<br />
square meters of closed space, making the group one of the leaders in<br />
this sector.<br />
As well as building high standard neighborhoods on lands purchased,<br />
the Group has also built thermal holiday resorts, responding to strong<br />
demand for such development.<br />
Its target customer group for standard houses is upper middle-income<br />
households, and for the villas, upper income group households. The<br />
target customer group of the mass-housing projects consists of people<br />
who desire to be away from the complexities of city life in Istanbul,<br />
while enjoying the comforts and pleasures of urban life. All housing<br />
and holiday resort projects include social facilities such as schools, health<br />
centers and malls in addition to sports and leisure areas.<br />
The ‹hlas Construction Group is among a handful of Turkish companies<br />
that are capable of self-financing construction projects of 2,500-<br />
3,000 units and completing these in a period of two to three years.<br />
‹hlas’s advantages in housing development were the natural foundation<br />
for the establishment of ‹hlas Real Estate Investment Trust (REIT) in<br />
December 1997. ‹hlas REIT adds investment partnership and financing<br />
components to our construction business, opening up further valuegeneration<br />
avenues. As the growth and improvement of the national<br />
economy made new financing methods possible, ‹hlas established a<br />
mortgage company to tap into this lucrative market. In partnership<br />
with US-based Oxford Capital Investments, Inc., ‹hlas has formed ‹hlas<br />
Oxford Mortgage Construction and Trade Company to develop real estate<br />
investment projects and to provide long-term real estate financing<br />
to individual investors.<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2004</strong><br />
Construction and Real Estate<br />
41
42<br />
‹hlas Construction Group<br />
Construction of contemporary, high-quality living space<br />
has become a prime mission for ‹hlas Holding.<br />
It was the ‹hlas Yuva Houses Project which prompted<br />
‹hlas Holding to undertake larger, more extensive projects.<br />
Marmara Houses 1, Marmara Houses 2 and Marmara<br />
Villas have included the construction of 6,000<br />
apartment buildings, 134 villas and affiliated social centers.<br />
Kuzuluk Thermal Houses and the Armutlu Holiday<br />
Resort include 2,800 apartments and have a time-sharing<br />
capacity for more than 62,000 households. In addition,<br />
the Group has constructed non-residential buildings<br />
such as the ‹hlas Holding Head Office, the Bahçelievler<br />
Education Campus and Marmara Houses Education<br />
Campus (both of which belong to the ‹hlas Educational<br />
Institutions), and the Bahçelievler TV Studios.<br />
Currently, residential investments continue with the<br />
Güzelflehir Project which is comprised of 700 villas.<br />
The Marmara Houses Project, including Sites 1 and 2,<br />
rank among the largest housing projects ever undertaken<br />
by the private sector. Relative to its competitors,<br />
‹hlas Holding completes its projects in a fast, high-quality,<br />
environmental friendly, economical fashion while<br />
Armutlu Thermal Holiday Resort<br />
hiring the most qualified technical personnel available.<br />
‹hlas Holding carries out the necessary topographical<br />
studies and purchases the land beforehand. Following<br />
the completion of its projects, high standard, luxury homes<br />
are sold at very reasonable prices.<br />
The Kuzuluk Thermal Houses and Armutlu Holiday<br />
Resort projects are the first examples of thermal timesharing<br />
house ownership scheme in Turkey. With an<br />
annual time-sharing capacity of 32,538 in the Kuzuluk<br />
and 29,656 in Armutlu, ‹hlas Holding has the largest<br />
share in the time-sharing house ownership market in<br />
Turkey.<br />
House Project<br />
• ‹hlas Yuva Houses<br />
• Marmara Houses 1<br />
• Marmara Villas<br />
• Marmara Houses 2<br />
• Güzelflehir<br />
Tourism and Health Built Project<br />
• Kuzuluk Thermal Holiday Resort<br />
• Armutlu Thermal Holiday Resort<br />
• Turkiye Hospital<br />
Other<br />
• ‹hlas Holding Head Office<br />
• Bahçelievler Education Campus<br />
• Marmara Houses Education Campus<br />
• Bahçelievler TV<br />
House Project<br />
Güzelflehir<br />
The increasing complexities of modern urban life have<br />
inspired the development of a new type of residential<br />
community. Currently, many people living in large cities<br />
wish to live in more comfortable houses and thus<br />
are attracted to suburban communities and towns lying<br />
Marmara Houses 1
outside city centers. These towns respond to all social<br />
needs with their schools, shopping malls and entertainment<br />
centers, and numerous other facilities which render<br />
life more enjoyable.<br />
Among the advantages of the Güzelflehir Project are<br />
easy access to the city center (only 30 minutes by car),<br />
a brilliant architectural design and a high degree of security<br />
of the villas - all surrounded by gardens.<br />
Lying on the frontier between the districts of Kumburgaz<br />
and Güzelce, Güzelflehir is situated on a slope with<br />
a one-kilometer border on the D 100 (E-5) motorway<br />
and with an excellent view on the sea. The entrance to<br />
the E-6 (TEM) motorway lies only 3 km. away. A middle-size<br />
marina situated in the Güzelce sea shore is its<br />
main gateway to marine transport.<br />
Situated on a slope in Güzelce with a perfect sea view,<br />
the Güzelflehir Project encompasses over 600,000<br />
m2 of land. The foundation system used in the project is<br />
whole-base reinforced concrete.<br />
There are 700 Güzelflehir villas and are classified under<br />
nine different types, named after various flowers.<br />
The project includes many various shops; a supermarket;<br />
a bakery; a food court; an open bazaar for fresh fruits,<br />
vegetables and fish; kindergartens; and a fitness<br />
center, open and enclosed swimming pools, tennis courts,<br />
basketball, volleyball and soccer courts.The project<br />
was drafted in 2000 and construction began in 2003.<br />
At present, 300 villas are nearly completed and residents<br />
will begin to inhabit Güzelflehir in summer 2005.<br />
Marmara Houses 2<br />
Marmara Houses 2 is another modern housing project<br />
of ‹hlas Construction.<br />
The total constructed area reaches over 256,630 m2 and includes 2,243 apartments, situated on a land area<br />
of 170,000 m2 .<br />
All the green areas, social facilities and infrastructure<br />
were completed in August 2001, and home owners moved<br />
in shortly thereafter. Marmara Houses 2 is the only<br />
neighborhood in the region which has access to city<br />
water, natural gas and automatic irrigation systems,<br />
Marmara Houses 1<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2004</strong><br />
clearly demonstrating ‹hlas Construction Group’s dedication<br />
to providing excellent infrastructure to its customers.<br />
Marmara Villas<br />
Marmara Villas, constructed by ‹hlas Holding Construction<br />
Group, is situated in the historic Reflitpafla<br />
Farm area of the Yakuplu district.<br />
The neighborhood covers 300,000 m2 of land and<br />
consists of 134 villas. The villas are classified into three<br />
types: Plane, Acacia and Willow.<br />
The large size Plane Villas measure 601 m2 and each<br />
has a garden of 1,281 m2 . The mid-size Acacia Villas measure<br />
400 m2 and have gardens of 924 m2 . The duplextype<br />
Willow Villas have 300 m2 of living space and gardens<br />
of 670 m2 . The villas were finished in 1998 and are<br />
now owner-occupied.<br />
Marmara Houses<br />
Marmara Houses, the largest and the most extensive<br />
housing project in the region, are situated on a 700,000<br />
m2 of land in Reflitpafla Farm, on the Ambarl› Bay in Haramidere,<br />
Istanbul.<br />
Only 10% of the area was developed with residential<br />
buildings. The remainder was set aside for green areas,<br />
sports facilities, social facilities, a school, shopping<br />
mall, a polyclinic, a private high school, children’s parks<br />
and roads - all vital components of modern life.<br />
The project consists of 2,856 apartments, the total<br />
enclosed area of which is 412,800 m2 while the other facilities<br />
total 27,500 m2 .<br />
The construction of the Marmara Houses started only<br />
after the necessary topographical studies were carried<br />
out. In the project, the tunnel mould system, which is<br />
the most secure and modern technology in use today,<br />
and premier quality construction materials have been<br />
used. All of the apartments included in this project were<br />
completed in 1997 and handed over to the owners.<br />
43<br />
Marmara Houses 2
44<br />
‹hlas Yuva Houses<br />
Begun in 1990 and delivered to their owners in only<br />
two years, the ‹hlas Yuva Houses is the first housing<br />
project undertaken by ‹hlas Holding. The project consists<br />
of 21 apartment buildings; with a total of 1,000<br />
units, all built using the tunnel mould system with a<br />
modern design. The project was the first Turkish mass<br />
housing project in which self-contained heating and floor<br />
heating systems were used.<br />
Tourism and Health Built Project<br />
Armutlu Thermal Holiday Resort<br />
Armutlu Holiday Resort is situated in the Bozburun<br />
district of Armutlu, Yalova, and covers a land area of<br />
200,000 m 2 , located near the sea shore and forests.<br />
Completed in <strong>2004</strong>, it constitutes the largest and most<br />
extensive thermal holiday village in Turkey. The village<br />
includes 10 apartment buildings, all with a sea view,<br />
and 1,348 apartments with a total of 29,656 periods.<br />
Each unit is equipped with thermal water facilities. The<br />
village also includes two convertible and semi-olympic<br />
swimming pools, an aqua park, saunas, a bowling hall,<br />
a cinema, soccer fields, basketball and volleyball courts,<br />
tennis courts, a fitness center, a squash field, malls, cafeterias,<br />
restaurants and water games areas. All buildings<br />
are resistant to earthquakes, owing to the spread<br />
foundation and the tunnel mould system. The village<br />
has its own pier and is only 70 minutes from Istanbul via<br />
sea-bus.<br />
Kuzuluk Thermal Holiday Resort<br />
A time-sharing housing system allows an apartment<br />
to be used by a number of different households, in different<br />
periods of the year, according to a shared ownership<br />
scheme. Each owner retains the right to sell,<br />
rent or inherit his or her share as he or she wishes.<br />
The Kuzuluk Thermal Holiday Resort, the first thermal<br />
time-sharing ownership scheme in Turkey, is built on<br />
an area of 200,000 m2 situated in Akyaz› Kuzuluk near<br />
Sakarya.<br />
Güzelflehir<br />
Güzelflehir<br />
The project comprises 1,479 apartments with a total<br />
of 32,538 time-share periods. At the first stage of the<br />
project, 1,129 apartments, a total of 20 buildings, were<br />
constructed and marketed in 15-day time-share periods.<br />
The construction of the second phase of Kuzuluk<br />
Thermal Houses, consisting of 350 apartments and a total<br />
of 7,700 periods, began in autumn 1997. It was<br />
completed and handed over to their owners in 2000.<br />
The apartments are all furnished and measure 67 m 2 .<br />
Other<br />
‹hlas Holding Head Office<br />
Built on 16,517 m 2 of land, the facility includes 73,000<br />
m 2 of enclosed space, a helicopter landing area and depot<br />
and a parking garage for 400 vehicles. In addition,<br />
there is a conference hall with a capacity of 500 people,<br />
a cafeteria seating 2,000, a fitness center and a sauna.<br />
Bahçelievler Education Campus<br />
Completed in 1997, the campus has 30,000 m 2 of enclosed<br />
space, with 78 classrooms, a dormitory for 600<br />
students, a gymnasium, a conference hall for 450 people<br />
and a cafeteria seating 750 people. In addition, there<br />
are two medium-size soccer fields.<br />
Marmara Houses Education Campus<br />
Completed in 1996, the campus has an enclosed space<br />
of 17,500 m 2 with 96 classrooms, a conference hall<br />
for 450 people and a cafeteria seating 750.<br />
Bahçelievler TV Studio<br />
Completed in 1999 in accordance with ZDF norms<br />
and regulations, the studio is located on the Bahçelievler<br />
Education Campus.<br />
TGRT Radio and TV Studios<br />
Built in 1993 for the TV channel TGRT, this facility includes<br />
two live broadcasting studios, radio and standard<br />
broadcasting studios and administrative and technical<br />
offices. The total enclosed space is 12,000 m 2 .
‹hlas REIT<br />
(‹hlas GYO A.fi.)<br />
The Company’s portfolio includes a wide range of real estate<br />
investments and projects: villas, apartments, time-sharing<br />
housing schemes, business centers and restitution projects.<br />
Established in December 1997 with an initial capital<br />
investment of TL 2 trillion, ‹hlas Real Estate Invetments<br />
Trust (‹hlas REIT) is one of nine real estate investment<br />
companies in Turkey. Publicly traded, the Company’s<br />
portfolio includes a wide range of real estate investments<br />
and projects: villas, apartments, time-sharing<br />
housing schemes, business centers and restitution projects.<br />
This allows the Company to achieve portfolio diversification<br />
and minimize risk.<br />
Prior to portfolio formation, criteria such as project<br />
profitability, pay back period and project risk are carefully<br />
assessed to increase the Company’s productivity<br />
and ensure it to stay among the leaders within the sector.<br />
‹hlas REIT aims to continue with its remarkable<br />
growth performance and attain an even stronger position<br />
in its field. It is expected that in the long-term, along<br />
with various new regulations and incentives, real estate<br />
investment companies will gain more significance<br />
and will continue to bolster the real estate sector.<br />
The real estate projects in the portfolio of ‹hlas<br />
REIT include the following:<br />
Current Projects<br />
• Çekmeköy Park Villa Project<br />
• Yenibosna Business Center<br />
Completed Real Estate Currently For Sale<br />
• Marmara Houses: Apartments and Villas, Site 1<br />
• Marmara Houses: Apartments, Site 2<br />
• The Bornova Land<br />
• Tarabya Villas<br />
• Üsküdar Business Center<br />
Future Projects<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2004</strong><br />
This year, ‹hlas REIT is planning to concentrate on<br />
projects comprised of single or duplex homes built in<br />
consecutive series, resistant to earthquakes and having<br />
few stories and equipped a variety of social facilities.<br />
The first example of this is a recent villa project in Çekmeköy,<br />
situated on land lying on a possible expansion<br />
path of Istanbul.<br />
Management is planning projects in areas which are<br />
close to main highways and with easy access to the<br />
metropolitan area. On the other hand, ‹hlas REIT, in<br />
conjunction with municipal administrations, campaigns<br />
for the improvement of possible development areas in<br />
large cities such as Istanbul, Ankara and ‹zmir, where<br />
the urbanization process has not always followed an orderly<br />
and planned path.<br />
‹hlas Oxford Mortgage<br />
‹hlas has an agreement with US-based Oxford Capital<br />
Investments, Inc. for the development of real estate<br />
investment products and for the provision of mortgage<br />
financing to individual investors. The agreement brings<br />
the two parties together for the formation of joint ventures<br />
in Turkey as well as in the US. The Turkish joint<br />
venture was established in October <strong>2004</strong>. While common<br />
in developed countries, mortgage financing is new<br />
to Turkey. With a young population and a housing stock<br />
quality that leaves much to be desired, this sector is set<br />
to grow rapidly. ‹hlas’s experience in housing development<br />
is a perfect fit for developing mortgage projects.<br />
Güzelflehir<br />
45<br />
Çekmeköy Park Villa Project
‹hlas Pazarlama A.fi.<br />
‹hlas Marketing, with its nationwide network, is one<br />
of the main pillars of ‹hlas Holding Group. The majority<br />
of the goods marketed are household appliances and<br />
electronics. While goods manufactured by affiliate companies<br />
like ‹hlas Home Appliances and ‹hlas Tarsan make<br />
up a majority of the products marketed by the group,<br />
the wholesale distribution of other international brands<br />
is significant to the group’s operations. Its marketing<br />
and distribution network is spread throughout Turkey<br />
with 2,000 sales point comprised of 500 ‹hlas shops, 600<br />
demonstration offices, 500 distribution offices and 400<br />
certified service outlets. ‹hlas Marketing oversees the<br />
agencies in this third largest distribution network in the<br />
country.<br />
‹hlas Marketing benefits from the TGRT-Shopping<br />
Channel in promoting its goods efficiently. In addition,<br />
it establishes direct contact with and receives feedback<br />
from its customers via the Türkiye newspaper. ‹hlas retailers<br />
keep in close touch with both ‹hlas Marketing<br />
personnel and customers, thereby ensuring that the<br />
marketing channel remains efficient and effective.<br />
A bilateral data flow system links marketing personnel<br />
with suppliers. Marketing personnel receive information<br />
related to products and their technical specifica-<br />
marketing<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2004</strong><br />
tions directly from the supplier firm. In turn, supplier<br />
companies receive information on market conditions<br />
and highly demanded goods from the ‹hlas marketing<br />
personnel. With this data flow, companies can immediately<br />
adapt themselves to changing market conditions,<br />
and product quality is constantly improved. ‹hlas<br />
Marketing makes a priority of consumer satisfaction,<br />
constantly considering feedback of its customers and<br />
modifying product quality accordingly.<br />
The Heating Appliances Group, which is affiliated with<br />
‹hlas Marketing, sells various heating and cooling devices,<br />
purchased domestically and internationally. The<br />
Company imports products such as heating systems,<br />
boilers, and solar energy systems from the German<br />
company Wolf, under the AURA and AURA-WOLF<br />
brands. In the future, the Company plans to manufacture<br />
certain products in Turkey, jointly with Wolf. Split airconditioners<br />
are purchased from the Far East. Complementary<br />
equipment such as panel radiators, pipes and<br />
fittings, hydrophones, dilation tanks and pressurizing<br />
tanks are procured from local suppliers and then sold.<br />
The Heating Appliances Group realizes sales by way of<br />
expert heating sector retailers, and provides after sales<br />
service by way of certified expert service outlets.<br />
47
manufacturing<br />
Marketing has been a core ‹hlas business since the very beginning of<br />
the group. ‹hlas went into manufacturing of household appliances to<br />
support its marketing business by sourcing quality products with guaranteed<br />
cost benefits and volume levels. The trademarks of ‹hlas products<br />
are practicality, functionality and being value for money. These<br />
solid foundations ensured millions of homes around Turkey buying<br />
‹hlas appliances year after year. ‹hlas products are now finding their<br />
way into new markets around the world.<br />
Today, ‹hlas’s manufacturing businesses include ‹hlas Home Appliances,<br />
Tarsan electronic scales and Kristal Kola carbonated soft drinks.<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2004</strong><br />
49
50<br />
‹hlas Home Appliances<br />
(‹hlas Ev Aletleri A.fi.)<br />
‹hlas Home Appliances has introduced hundreds of<br />
thousands of household appliances that make life<br />
easier and more enjoyable.<br />
Established in 1975, ‹hlas Home Appliances has introduced<br />
hundreds of thousands of household appliances<br />
that make life easier and more enjoyable. The Company<br />
functions in its building of 15,000 m2 of enclosed space.<br />
The main products of ‹hlas Home Appliances are<br />
cleaning robots, water-heaters, kitchen robots, electric<br />
quartz stoves, water purification devices utilizing ultraviolet<br />
rays, ventilators, vacuum cleaners, cooking pans,<br />
thermal containers, hair-driers, barbecue sets, tea makers<br />
and toast machines. In most of these products the<br />
Company dominates the market and responds to a large<br />
part of the national demand single-handedly.<br />
The ‹hlas cleaning robot, first produced in 1996, is the<br />
unrivalled leader of its niche and plays a very crucial role<br />
for the Company in terms of sales volume. The Company<br />
has started marketing a water purifier device,<br />
using the reverse osmosis procedure, which is expected<br />
to attain a sales performance equal to that of the<br />
cleaning robot.<br />
The Company has attained great momentum in 2002<br />
and 2003 due to a spectacular export performance directed<br />
at countries such as Russia, Germany, Greece,<br />
Portugal, Italy and South Africa. To carry out sales campaigns,<br />
home appliance marketing and production in<br />
Germany, an affiliate company named Aura Gmbh was<br />
founded.<br />
‹hlas Home Appliances shares have traded on the Istanbul<br />
Stock Exchange (ISE) since September 26, 1996.<br />
The company’s shares are included in the ISE-100 index<br />
and 61.22 percent of the Company’s capital is traded on<br />
the ISE as of the end-of-year <strong>2004</strong>.<br />
As a company living up to the demands of the third<br />
millennium, and equipped with modern supply<br />
systems and automated production facilities, ‹hlas Home<br />
Appliances aims to become the market leader in<br />
each of its product lines. The Company also strives to<br />
become a prominent national firm in terms of consumer<br />
satisfaction, product quality, distribution speed, as<br />
well as in product design, production, marketing and after<br />
sales services. ‹hlas Home Appliances plans to become<br />
a world-class company via foreign partnerships and<br />
to make investments abroad when general economic<br />
conditions are favorable.
Kristal Cola and Soft Drinks<br />
(Kristal Kola A.fi.)<br />
Kristal Cola is the first Turkish company to engage in<br />
production by using only local technology without paying<br />
royalties.<br />
Kristal Cola is the first Turkish company to engage in<br />
production by using only local technology without paying<br />
royalties. As the first publicly-traded beverage<br />
company in Turkey, Kristal Cola has been a pioneer in<br />
many areas in the Turkish beverage sector. Kristal Cola<br />
is also the first company in Turkey to produce decaffeinated<br />
cola and genuine light and gaseous orange juice.<br />
Kristal Cola is the leader in the national private-label<br />
market and has a distribution network of 200 distributors.<br />
Through this distribution network, it can transfer<br />
its products to 250,000 stores spread all over the country.<br />
‹hlas Holding started beverage production in 1994<br />
and handed this function over to Kristal Cola and Beve-<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2004</strong><br />
rage Company which was founded in September 1996.<br />
In addition to the plants on the Bal›kesir-Bursa motorway,<br />
new plants were established in K›r›kkale in 1997. In<br />
its modern automated facilities in K›rkp›nar, Sapanca,<br />
Kristal Cola bottles spring waters highly appreciated<br />
worldwide.<br />
The year 2000 witnessed the production of mineral<br />
water classified second in the world in terms of oxygen<br />
concentration in the Ida Mountains of Edremit. The mineral<br />
water bottled in the Ida Mountains has a market<br />
share of roughly 7 to 8 percent in most regions of Turkey.<br />
One percent of the mineral water produced is exported<br />
to European countries.<br />
51
Bisan Bicycle and Auto Manufacturing<br />
(Bisan Bisiklet Otomotiv Üretim San. A.fi.)<br />
Bisan entered the Turkish automotive market with the<br />
GAZ brand light commercial vehicle, known globally for<br />
its reliability, and is providing economic, durable and<br />
quality vehicles to the end consumer.<br />
When you mention bicycles in Turkey, the first brand<br />
to come to mind is Bisan (www.bisanlar.com.tr). Founded<br />
in April 1963 and with 43 years of experience, it is<br />
one of the premier industrial institutions in the country,<br />
displaying superior quality and a large production capacity.<br />
Bisan continues to produce at its plant in the Izmir<br />
Kemalpasa Organised Industrial District, and produces<br />
mopeds, wheelchairs and spare parts as well as being<br />
the general distributor for Lifan motorbikes in Turkey.<br />
The organisation employs 603 persons, and has a<br />
network of 860 dealers, 920 after-sales services and 96<br />
spare parts wholesale sellers. In 1987 Bisan was awarded<br />
the ISO 9001 quality certificate, and is continually<br />
developing. 30% of total production is exported. It exports<br />
bicycles in particular to the European Union, and<br />
mopeds and spare parts to South Africa and the Middle<br />
East. Bisan is known both at home and abroad for its<br />
quality, and has production capacity for 900,000 bicycles,<br />
70,000 mopeds and 25,000 wheelchairs.<br />
Bisan has a long-standing technical cooperation with<br />
Lifan, one of largest motorcycle producers in the Far<br />
East, and holds a significant share of the motorbike<br />
market. Its 100, 125 CC Cub motorbikes, 125 CC scooters<br />
and 150 CC ATWs are well-known and are among<br />
the most demanded bikes in the market.<br />
The Bisan Group has undergone significant development<br />
in recent years. In cooperation with GAZ, Russia’s<br />
largest producer of commercial vehicles, Bisan entered<br />
the Turkish automotive market with the GAZ brand light<br />
commercial vehicle, known globally for its reliability,<br />
and is providing economic, durable and quality vehicles<br />
Faaliyet raporu <strong>2004</strong><br />
to the end consumer. Bisan has an extensive experience<br />
and history in the sector, and having well established<br />
its place in the two-wheel sector, is now taking its place<br />
in the four-wheel sector and increasing its productivity<br />
and range of products. At the first stage Bisan is importing<br />
Sobol and Gazelle brand light commercial vehicles<br />
and is continuing to expand its network of dealers and<br />
services. It aims to be one of Turkey’s top companies in<br />
the automotive sector.<br />
The Bisan Sports Club has also achieved many successes,<br />
and has contributed significantly to the development<br />
of the sport of cycling in this country.<br />
53
health<br />
‹hlas is among the pioneers of private health care services in Turkey.<br />
Having come from humble beginnings of a district health center in<br />
Istanbul, ‹hlas has a fully equipped hospital today, in addition to two<br />
thermal resorts and a thermal hotel. In contrast with dull urban health<br />
centers, ‹hlas facilities offer the best possible care in peaceful settings<br />
surrounded by leafy pockets of tranquility. The resorts are located in<br />
some of Turkey’s best-preserved and unique natural beauty spots.<br />
Besides the direct business value, ‹hlas views its health operations as<br />
part of the group’s social responsibility as well.<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2004</strong><br />
55
56<br />
Türkiye Hospital<br />
Türkiye Hospital provides cutting-edge medical care in a<br />
peaceful and historic setting.<br />
Türkiye Hospital was opened on 22 April 1991 in the<br />
Okmeydan› district of Istanbul on the leafy and historical<br />
complex formerly known as the Bulgarian Hospital.<br />
In 1894, the Ottoman Sultan Abdülhamid II founded<br />
the “Bulgarian Hospital” on royal foundation property<br />
belonging to Sultan Beyaz›t II, as a grant to the Bulgarian<br />
community. The Hospital operated until the<br />
1980’s under this name. After the Hospital closed, the<br />
General Directorate of Foundations placed the building<br />
up for auction, and it was purchased by ‹hlas Holding.<br />
The historic main building, where administrative offices<br />
and certain medical services are situated, has been<br />
restored and renovated into a more functional building.<br />
This modern hospital, which signifies a real breakthrough<br />
in terms of private health services in Turkey,<br />
has been an important contribution to the nationwide<br />
health care sector. Since it opened in 1991, the<br />
Türkiye Hospital has always been “the address for<br />
trust in health services” and has adhered to the principle<br />
of “blessed are those who serve mankind” The<br />
Hospital has enhanced its service standards day by<br />
day and has become one of the leaders in the medical<br />
institutions league.<br />
The Türkiye Hospital is located on an area of 17,000<br />
m 2 of land in fiiflli, at the heart of Istanbul. With its unique<br />
architectural design and gardens, Türkiye Hospital<br />
is where history and nature converge. It is also one of<br />
the few places in central Istanbul which relieves citizens<br />
of daily worries with cleaner air. The Hospital<br />
which has historic value in both architectural and functional<br />
terms is equipped with state-of-the-art medical<br />
equipment, without compromising its historical integrity.<br />
Internal medicine, surgery and polyclinics, laparoscopic,<br />
arthroscopic and surgical operations are carried<br />
out in the most professional fashion. The Eye Clinic<br />
includes one of the prominent optical laser surgery<br />
centers in Turkey, equipped with devices such as Excimer,<br />
Argon and Yag. This center utilizes the most recent<br />
methods for eliminating all sorts of acute eye disorders,<br />
as well as realizing cataract operations with<br />
sophisticated eye techniques. In addition, the Wavefront<br />
system is utilized for eliminating eye disorders<br />
and also enhancing eyesight in people without eye disorders.<br />
The EENT service delivers various high-tech-
nology treatments and includes a specialized Hearing<br />
and Balance Disorders Center.<br />
A vitro-fertilization unit has been active since 2000,<br />
and is managed by a group of experts who use the latest<br />
techniques and methods developed by modern<br />
science. The pediatric center - which includes numerous<br />
pediatric experts, a pediatric surgery unit, a pediatric<br />
psychiatry and psychology unit, and a vaccination<br />
center - delivers diagnosis and treatment services around<br />
the clock.<br />
The Hospital employs 40 specialist doctors, as well<br />
as an additional 60 specialists on a contractual basis.<br />
The total medical service personnel include 122 staff,<br />
whereas the administrative and logistics services personnel<br />
consist of 84 people.<br />
The Hospital has 50 beds, five surgical operation rooms,<br />
a 12-bed maternity unit, numerous laboratories<br />
where all medical analyses can be carried out, as well as<br />
radiology, tomography and laser treatment units. All<br />
medical and administrative units in the Hospital are interconnected<br />
via a sophisticated computer network.<br />
The Surgical Intensive Care, Coronary Intensive Care<br />
and Neonatal Intensive Care units are open around the<br />
clock. In 2003, nuclear medical technologies, which are<br />
widely used by many modern medical institutions worldwide,<br />
began being employed by Türkiye Hospital.<br />
The Hospital is constantly improved and renovated,<br />
and the level of services is kept at a high standard. The<br />
information system was recently updated and thus all<br />
the Hospital’s activities can be electronically monitored.<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2004</strong><br />
Additionally, the Hospital has taken important steps<br />
to educate the public of its position in the medical sector<br />
by increasing advertisement, promotion and marketing<br />
activities, updating its web site and generally<br />
enhancing its corporate image. The Hospital’s two<br />
web sites aim to inform the general public on medical<br />
care and deliver basic health services information,<br />
contributing to a more healthy society.<br />
From the day it was founded, the Hospital has always<br />
adhered to the managerial principles of high<br />
quality, reliability and conscientious regard for patients’<br />
rights in health services. It has consistently functioned<br />
mindful of these guiding principles.<br />
Having greatly enhanced the service quality in the<br />
medical sector and attained an outstanding position in<br />
its field, the Hospital was granted the ISO 9001: 2000<br />
certificate by the Turkish Standards Institute - a certificate<br />
given to institutions adhering to international<br />
quality standards in medical care.<br />
There are recent plans to construct a new 120-bed<br />
hospital on the Hospital’s grounds. This will be implemented<br />
as soon as legal issues are resolved.<br />
57
58<br />
Armutlu Holiday Resort<br />
(‹hlas Yap› Turizm ve ‹nflaat A.fi.)<br />
Spa resorts are built by ‹hlas, on the concept of providing<br />
vacation and health care services in one convenient<br />
package. Kuzuluk Spa was the first in the series that<br />
now includes the Armutlu Holiday Resort.<br />
With running spa water available in each residence, a<br />
hillside surrounding the complex and the blue waters of<br />
the Marmara Sea spreading across the side, Armutlu is<br />
the best described as a unique beauty.<br />
In terms of investment, Armutlu successfully resolves<br />
one of the most difficult issues with time-share vacation<br />
resorts; the continuous availability of spa water means<br />
the facility can be effectively used throughout the<br />
year and not just seasonally. A small annual maintenance<br />
fee guarantees that the time-share investment is<br />
kept in perfect condition for years to come.<br />
With the ferries operating between Armutlu and Istanbul,<br />
the resort is a mere 70 minutes away from Tur-<br />
key’s biggest urban center and tourist attraction. In addition,<br />
Armutlu is an hour and a half drive from Gemlik,<br />
a major town along Istanbul – Bursa highway.<br />
Time-share owners who wish to skip a particular season<br />
may request their property to be leased on their behalf.<br />
With strong demand for overnight and weekend<br />
stays, this spells opportunity for profit for prospective<br />
investors.<br />
Armutlu residences are fully furnished, providing for<br />
complete comfort for families of different sizes.<br />
Other facilities available to patrons of the spa resort<br />
include two semi-Olympic indoor pools with heating for<br />
the winter, outdoor pool, aqua park, saunas, bowling<br />
hall, cinema theater, squash hall, shopping center, restaurants,<br />
and the water park.
Kuzuluk Thermal Houses<br />
(Kuzuluk Kapl›ca Turizm Sa¤l›k A.fi.)<br />
Kuzuluk was the first ‹hlas investment to bring<br />
together health and vacation services. This time-share<br />
spa resort is for families to enjoy the health benefits of<br />
a spa with the full convenience of a holiday village.<br />
Natural beauty of its green surroundings and the<br />
opportunity to obtain high quality services at a<br />
reasonable cost made Kuzuluk what it is today-a point<br />
of attraction unlike any other.<br />
The main time-share buildings comprise fully<br />
furnished residences of 67 square meters-721 square<br />
feet. Thermal health care center, indoor pool filled with<br />
spa water, health clinic, pharmacy, shopping center,<br />
restaurants, conference hall, football and basketball<br />
fields and forest walks are among the features of this<br />
unique spa resort.<br />
Kuzuluk Thermal Hotel<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2004</strong><br />
The Kuzuluk Spa Hotel is a part of the Kuzuluk Spa<br />
complex. Kuzuluk's unparalleled natural beauty and the<br />
health benefits of the spa are complemented by a luxury<br />
hotel with two king suites, three suites, 60 standard<br />
rooms, a conference hall for 100 attendees, an indoors<br />
restaurant that seats 150 guests and an outdoors<br />
restaurant with 300 seating capacity.<br />
Additional investments are planned to turn the Kuzuluk<br />
Spa Hotel into a health facility serving domestic and<br />
international guests with specialist physicians.<br />
59
One of the services delivered by ‹hlas Holding as part<br />
of its social responsibilities mission is education. ‹hlas<br />
Holding is deeply aware that Turkey must better educate<br />
its youth to boost economic development and ensure<br />
a brighter future for all. The activities of ‹hlas Education<br />
Institutions began in 1996-1997; and the following<br />
year came the founding of the Bahçelievler Education<br />
Campus.<br />
The Education Group consists of two educational<br />
campuses: Marmara Houses Campus and Bahçelievler<br />
Campus. In addition, the Group operates two elementary<br />
schools and two public high schools. Furthermore,<br />
there is one multi-program high school that brings together<br />
a general high school, a vocational high school<br />
specialized in radio and TV broadcasting and another<br />
vocational high school specialized in computers and<br />
electronics.<br />
Marmara Houses Campus consists of two five-story<br />
buildings, with each of the stories 1,500 m 2 in area. An<br />
additional building contains auxiliary facilities such as<br />
an Olympic Gymnasium, a 450 people conference hall<br />
and a cafeteria for 1,000 people.<br />
education<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2004</strong><br />
The Bahçelievler Campus consists of four blocks, located<br />
on 20,000 m 2 of land containing an enclosed space<br />
of 42,000 m 2 . This campus includes the ‹hlas Multi-<br />
Program High School and the Bahçelievler ‹hlas Elementary<br />
School, both of which opened in the 1997-1998<br />
academic year. This campus is also equipped with an<br />
Olympic Gym, a conference hall for 450 people, a professional<br />
TV studio, a soccer field, two basketball courts<br />
and a dormitory for 800 students.<br />
Both campuses are situated in secure and peaceful<br />
environments, contributing to effective study. The buildings<br />
are designed with the evolving educational needs<br />
in mind; the buildings are flexible for change.<br />
The Institution is constantly in touch with parents, organizing<br />
special seminars with them to enhance student<br />
performance. Moreover, the Institution is a pioneer<br />
in terms of employee education and seminars for teachers<br />
with different backgrounds. Each school includes<br />
educational guidance services that help create an<br />
environment where each student finds personalized solutions<br />
to his/her problems.<br />
61
‹hlas Sigorta A.fi.<br />
Established in 1995, ‹hlas Insurance quickly grew to<br />
become one of the leaders in the Turkish insurance sector.<br />
The Company has established an effective sales<br />
network, with 500 nation-wide agencies and six regional<br />
offices in Ankara, Bursa, Adana, Trabzon, Antalya<br />
and Kayseri. The regional offices are all directly connected<br />
to the head office via a dedicated intranet and thus<br />
all transactions are accomplished without delay. Every<br />
single transaction is monitored daily through the primary<br />
computer network.<br />
Since its establishment, ‹hlas Insurance has always<br />
invested in its technological infrastructure. As a result<br />
the Company has achieved an impressive record and<br />
currently collects almost all of its insurance premium<br />
revenue online. ‹hlas Insurance is the most successful<br />
company in its field in terms of establishing real-time<br />
online connection with its agencies, and has been granted<br />
the ISO 9001 Quality Certificate.<br />
Using a consumer-centered service approach, ‹hlas<br />
Insurance in <strong>2004</strong> launched a new system which drastically<br />
shortens the assessment period following accidents<br />
and damages. With this new system, formal procedures<br />
such as registration of damage claims, preparation<br />
of files and assignment of assessors are conducted<br />
automatically, 24 hours per day and seven days a<br />
week. Assessor reports are immediately delivered to<br />
the Company via the internet.<br />
insurance<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2004</strong><br />
The Company also provides additional services such<br />
as Contractual Reparation Services and Assistance Service.<br />
With the new system launched in <strong>2004</strong>, it is possible<br />
to cooperate online with 77 agencies in Istanbul<br />
and 362 agencies throughout Turkey, and thereby immediately<br />
report to the policy owner the day when his<br />
or her vehicle will be delivered.<br />
‹hlas Insurance stopped issuing insurance policies<br />
manually in 1997. It conducts careful investigations for<br />
forged damage claims, uses efficient risk assessment<br />
techniques and communicates regularly and thoroughly<br />
with its agencies. As a result, ‹hlas Insurance has<br />
attained a general damage premium rate of 56%, and<br />
59% in automobile insurance, both of which compare<br />
favorably with sector averages.<br />
‹hlas Insurance is in collaboration with the world’s<br />
most prominent reinsurance companies. One of its leading<br />
reinsurance companies, Scor Re ranks sixth<br />
among the top 100 insurance companies in the world,<br />
whereas Transatlantic Re ranks eighth, Odyssey Re<br />
15th, Korean Re ranks 23rd.<br />
In line with recent trends, the Company is planning to<br />
concentrate on e-business. As in the past, the Company’s<br />
main mission for the present and future is to<br />
promptly adapt itself to technological innovations.<br />
63
64<br />
Others<br />
Other participations and subsidiaries of the<br />
‹hlas Holding are listed below:<br />
‹hlas Kargo A.fi<br />
Repafl Medya Reklam Produksiyon A.fi<br />
‹hlas Genel Antrepoculuk Nakliyat A.fi.<br />
‹hlas G›da Üretim ve Ticaret A.fi.<br />
Kristal G›da Ve Da¤›t›m ve Pazarlama Ticaret A.fi.<br />
Ege Mosan Motorlu Araçlar A.fi.<br />
Bisiklet Pazarlama ve Ticaret A.fi.<br />
‹hlas E¤itim A.fi<br />
‹hlas Tarsan Imalat Sanayii Ticaret A.fi<br />
‹hlas Medikal Ürünler ve Sa¤l›k Hizmetleri A.fi<br />
‹hlas Kimya Sanayi Ltd.fiti.<br />
Yay-sat A.fi<br />
Do¤u Yat›r›m Holding<br />
K›br›s Bürosu<br />
Tasfiye Halinde ‹hlas Finans A.fi<br />
‹hlas Motor Sehimdar Cemiyeti<br />
Eko Enerji Üretim Da¤›t›m ve Ticaret A.fi.<br />
Kia ‹hlas Motor Sanayi ve Ticaret A.fi.<br />
‹hlas Motor Ltd. fiti.<br />
Bursa Yalova Enerji Da¤›t›m Ltd. fiti.
INVESTMENTS<br />
EDUCATION – 2<br />
Incentive Certificate Number : 36585<br />
Date : July 27th, 1994<br />
Expiry Date : December 31st, 2002<br />
Total Fixed Investment Amount : TRY 103,248.00<br />
Incentives Granted : Investment Discount 100%<br />
Customs Exemption 100%<br />
VAT + 10 Points Incentives Premium<br />
Expenditures Made in Previous Years : TRY 117,416.67<br />
Expenditure Amount in <strong>2004</strong> : None<br />
EDUCATION – 3<br />
Incentive Certificate Number : 47296<br />
Date : September 6th, 1996<br />
Expiry Date : December 31st, 2002<br />
Total Fixed Investment Amount : TRY 163,425.00<br />
Incentives Granted : Investment Discount 100%<br />
VAT + 10 Points Incentives Premium<br />
Expenditures Made in Previous Years : TRY 61,818.12<br />
Expenditure Amount in <strong>2004</strong> : None<br />
HEALTH<br />
Incentive Certificate Number : 48627<br />
Date : December 9th, 1996<br />
Expiry Date : December 31st, 2002<br />
Total Fixed Investment Amount : TRY 200,000.00<br />
Incentives Granted : Investment Discount 100 %<br />
Customs Exemption 100 %<br />
VAT + 10 Points Incentives Premium<br />
Expenditures Made in Previous Years : TRY 7,777.79<br />
Expenditure Amount in <strong>2004</strong> : None<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2004</strong><br />
65
66<br />
PROPOSAL ABOUT THE DISTRIBUTION OF PROFITS FOR THE YEAR <strong>2004</strong><br />
The net profit for the period as per the end of the account period <strong>2004</strong> is TRY 30,712,970.00 according to the inflation<br />
adjusted consolidated balance sheet prepared in compliance with the provisions of Communique – Serial XI,<br />
No. 21.<br />
The Company’s profit entered in the inflation adjusted unconsolidated statutory documents prepared in accordance<br />
with the provisions of the Tax Procedure Law (TPL) is TRY 1,007,455<br />
In accordance with the principles stated in Resolution No. 7/242 of the Capital Market Board dated 25.02.2005, we<br />
recommend that<br />
TRY 50,373 out of the profit of TRY 1,007,455, which is the profit entered in our statutory records in accordance<br />
with TCC regulations, is appropriated as the first legal reserve;<br />
the total balance is distributed as cash dividend to shareholders as TRY 957,082.00 Gross (gross TRY 0.002425 to<br />
2.42 %o shares with a nominal value of TRY 1); and TRY 861,374.00 net (net TRY 0.002182 to 2.18%o shares with<br />
a nominal value of TRY 1); in accordance with the article providing for the distribution of the total distributable<br />
net profit entered in statutory records in cases where the General Assembly has not been realized and therefore<br />
a resolution not made yet for the distribution of profits in affiliated companies, companies of joint management,<br />
and participations included in the profit entered in the consolidated financial statements prepared in accordance<br />
with Communique, Serial XI, No:21; and in cases where it is not possible to cover the minimum profit distribution<br />
sum calculated in accordance with the CMB regulations out of the profit entered in statutory records;<br />
in the payment of dividends, sums less than Ykr One (1) are rounded to Ykr One (1) at the payment stage; and<br />
the Board of Directors is authorized to designate a dividend payment date no later than the date designated<br />
by the Capital Market Board;<br />
We respectfully submit the above recommendations to your approval.<br />
Board of Directors
AUDIT REPORT ABSTRACT<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2004</strong><br />
To: the General Assembly of ‹HLAS. HOLD‹NG A.fi.<br />
Company’s<br />
Name : ‹HLAS HOLD‹NG A.fi.<br />
Registered Office : ‹stanbul<br />
Capital : Authorized Capital : TRY 460,000,000.00.-<br />
Issued Capital : TRY 394,640,973.50.-<br />
Subject of Operation : Incorporation of companies, Construction, Health<br />
Services, Education Services<br />
Auditor’s/auditors’ name(s) and term of office; : Kamil Yener<br />
whether they are the shareholders or personnel Designated on 28.05.<strong>2004</strong> for a term of 3 years.<br />
of the Company Neither a shareholder nor personnel.<br />
Number of Board of Directors Meetings participated : Participation in seven Board of Directors meetings;<br />
and Audit Committee Meetings held with a review of Board of Directors resolutions.<br />
Five Audit Committee meetings held.<br />
Scope of the audit made in the Company’s accounts, : It was observed at the quarterly audits made on<br />
books and records; audit dates and conclusion statutory books and documents that records<br />
were in compliance with documents and<br />
accounting standards.<br />
Number and results of cash audits made in : Other than cash audits made in affiliated companies,<br />
accordance with sub-paragraph 3, paragraph 1, 5 cash audits were made at the Head Office and it was<br />
Article 353 of TCCT observed that cash balances were in conformity<br />
with records.<br />
Dates and results of audits made as per : Company records were audited each month and it was<br />
sub-paragraph 4, paragraph 1, Article 353 of TCC observed that the cited assets existed and<br />
complied with records.<br />
Complaints and information about embezzlements : No complaints and information about embezzlement<br />
referred to us and procedures followed were referred to us.<br />
I have audited the accounts and transactions of ‹hlas Holding A.fi. for the period 01.01.<strong>2004</strong> – 31.12.<strong>2004</strong> in accordance<br />
with the Turkish Commercial Code, the Company’s Articles of Association and other laws and regulations<br />
and generally accepted accounting principles and standards.<br />
In my opinion, the annexed balance sheet drawn up as per 31.12.<strong>2004</strong>, the contents of which is recognized by<br />
me; and the Income Statement for the period 01.01.<strong>2004</strong> – 31.12.<strong>2004</strong> truly and accurately reflect the Company’s<br />
financial situation as per the above date and the operating results as per the above period respectively; and the recommendation<br />
for the distribution of profits complies with the laws and the Company’s Articles of Association.<br />
I submit the approval of the balance sheet and income statement, and the discharge of the Board of Directors to<br />
your opinion.<br />
‹stanbul, 12.4.2005<br />
Auditor<br />
Kamil Yener<br />
67
68<br />
OUR DECLARATION AS PER ARTICLE 28/B OF THE CAPITAL<br />
MARKET BOARD COMMUNIQUE SERIAL: X, No: 16<br />
We declare herewith that at the Board of Directors Meeting No. 04 held on 06/04/2005, the balance sheet<br />
and income statement of ‹hlas Holding Inc, for the period 01.01.<strong>2004</strong>-31.12.<strong>2004</strong>, prepared in accordance<br />
with the provisions of the Capital Market Board Communique Serial XI, No. 21 about “The Procedures<br />
and Principles Concerning the Accounting of Consolidated Financial Statements and Participations<br />
in the Capital Market”; and the independent auditors’ report<br />
a- have been reviewed by us;<br />
b- to the extent of the knowledge we have within the sphere of our duties and responsibilities in the<br />
Company, the report does not include any information which is contrary to truth on substantial topics,<br />
or does not include any incomplete information which might be misleading as per the date this declaration<br />
is made;<br />
c- to the extent of the knowledge we have within the sphere of our duties and responsibilities in the<br />
Company, financial statements and other financial information included in the report correctly reflect<br />
the facts about the company’s financial standing and operating results as per the period the report refers<br />
to.<br />
Yours faithfully,<br />
Mahmut Kemal Ayd›n Alaettin fiener<br />
Member of the Board Member of the Board
<strong>Annual</strong> <strong>Report</strong> <strong>2004</strong><br />
Independent Auditors’ <strong>Report</strong><br />
Inflation-Adjusted Consolidated Financial<br />
Statements and Notes<br />
69
‹HLAS HOLD‹NG INC.<br />
INDEPENDENT AUDITOR’S REPORT FOR THE ACCOUNTING YEAR<br />
1 JANUARY <strong>2004</strong> - 31 DECEMBER <strong>2004</strong><br />
<strong>Annual</strong> <strong>Report</strong> <strong>2004</strong><br />
We have reviewed the accompanying inflation-adjusted consolidated balance sheet of both ‹hlas Holding Anonim<br />
fiirketi (“Company” or “ Parent Company”) and the Company’s consolidated subsidiaries (“Group”) as of 31<br />
December <strong>2004</strong> and the concerning inflation-adjusted consolidated Statement of Income for the same period then<br />
ended, both of which have been prepared in accordance with “Communique Serial No. XI/1 on Principles and Rules<br />
Regarding Financial Statements and <strong>Report</strong>s in Capital Markets”, “Communique Serial No. XI/20 on Rules and<br />
Procedures Regarding the Adjustment of Financial Statements in Hyperinflationary Periods”, and “Communique<br />
Serial No. XI/21 on Rules and Procedures Regarding Consolidated Financial Statements and Accounting of Investments<br />
in Capital Markets” promulgated by the Capital Markets Board (“CMB”). The accompanying financial statements<br />
are all expressed in the equivalent purchasing power of the Turkish Lira as at 31 December <strong>2004</strong>. We have<br />
conducted our review in accordance with generally accepted auditing principles, rules and standards and, therefore,<br />
our review included such analyses of the accounting records and other auditing methodologies and techniques<br />
we deemed appropriate.<br />
In our opinion, the inflation-adjusted financial statements referred to above present fairly, in all material respects, the<br />
financial position of the Company as of 31 December <strong>2004</strong>, and the results of its operations for the year then ended, in<br />
conformity with the relevant legislation and generally accepted accounting standards promulgated by the CMB.<br />
Without further qualifying our opinion, we would like to draw your attention to the following matters:<br />
Directive No. 7/242, dated 25 February 2005, of the Capital Markets Board aet out the rules to be followed by companies<br />
registered with the CMB in distributing their <strong>2004</strong> profits. As of 31 December <strong>2004</strong>, the accompanying consolidated<br />
financial statements of ‹hlas Holding A.fi., which have been prepared in conformity with the CMB’s regulations,<br />
reflect a profit amount of TRY 30,712,970, while profit amount reflected in the Company’s statutory records<br />
is TRY 1,007,455 for the year <strong>2004</strong>. As stipulated in the afore-mentioned Directive of the CMB, the amounts illustrated<br />
in Note 14 to the Statement of Income regarding the financial statement herein can be taken as a basis with respect<br />
to the distribution of the profit for <strong>2004</strong>. Accordingly, due to the reasons that the process of determining the<br />
<strong>2004</strong> dividend to be discussed and approved by the General Meeting of Shareholders for distribution was continuing<br />
at the date of the present report and that some of the consolidated subsidiaries have not yet held their General<br />
Meetings, no profit distribution schedule has been drafted and enclosed herewith.<br />
‹stanbul, April 05, 2005<br />
‹rfan Yeminli Mali Müflavirlik A.fi.<br />
Salim AKGÜL<br />
Partner, Certified Financial Advisor<br />
K›s›kl›, Alemda¤ Cad. No: 46 Kat: 2 Daire: 7<br />
Büyükçaml›ca 81190 Üsküdar/‹STANBUL<br />
Tel : (0216) 521 41 84 (8 Hat)<br />
Faks : (0216) 521 41 92<br />
71
72<br />
‹hlas Holding A.fi. Consolidated Balance Sheets<br />
(Amounts expressed in New Turkish Lira (TRY) in terms of purchasing<br />
power of the Turkish Lira as at 31 December <strong>2004</strong>)<br />
Inflation-adjusted Consolidated<br />
(as per Serial XI, No:20 and 21)<br />
Independetly Audited<br />
DETAILED CONSOLIDATED BALANCE SHEET (TRY) 31.12.<strong>2004</strong> 31.12.2003<br />
I. CURRENT ASSETS 500,333,440 472,090,721<br />
A. Liquid Assets 109,441,593 90,595,246<br />
1. Cash and cash equivalents 2,081,883 2,559,081<br />
2. Banks 106,838,412 87,964,760<br />
3. Other Liquid Assets 521,298 71,405<br />
B. Marketable Securities 12,407,136 26,685,048<br />
1. Equities 0 0<br />
2. Private sector bonds, bills and notes 111,242 0<br />
3. Public sector bonds, bills and notes 6,419,932 23,577,140<br />
4. Other marketable securities 5,876,020 3,110,036<br />
5. Provision for decrease in value of Mar. Sec. (-) (58) (2,128)<br />
C. Current Trade Receivables 178,024,208 145,897,489<br />
1. Customers 121,410,978 112,009,899<br />
2. Notes receivable 99,169,355 76,652,469<br />
3. Deposits and guarantees given 53,909 41,200<br />
4. Other current trade receivables 2,579,353 2,398,880<br />
5. Rediscount on notes receivable (-) (8,628,273) (7,827,183)<br />
6. Provision for doubtful receivables (-) (36,561,114) (37,377,776)<br />
D. Other Current Receivables 1,251,689 2,360,364<br />
1. Due from shareholders 1,032,661 2,218,838<br />
2. Due from subsidiaries 0 0<br />
3. Due from affiliated companies 0 0<br />
4. Other current receivables 330,214 141,526<br />
5. Rediscount on notes receivable (-) 0 0<br />
6. Provision for doubtful receivables (-) (111,186) 0<br />
E. Inventories 169,567,014 67,943,026<br />
1. Raw materials and supplies 17,988,173 17,412,291<br />
2. Semi-finished goods 1,761,690 704,632<br />
3. Work in progress 0 0<br />
4. Finished goods 106,224,938 20,138,545<br />
5. Merchandise 20,348,610 17,762,512<br />
6. Other inventories 2,643,724 1,024,042<br />
7. Provision for diminution inventory value (-) (2,073,022) (1,430,900)<br />
8. Advance payments 22,672,901 12,331,904<br />
F. Other Current Assets 29,641,800 138,609,548<br />
II. LONG TERM ASSETS 584,143,086 439,551,367<br />
A. Long Term Trade Receivables 4,371,894 11,384,627<br />
1. Customers 0 0<br />
2. Notes receivable 4,201,828 11,722,928<br />
3. Deposits and guarantees given 542,327 127,551<br />
4. Other long term trade receivables 0 0<br />
5. Rediscount on notes receivable (-) (372,261) (465,852)<br />
6. Provision for doubtful receivables (-) 0 0<br />
B. Other Long Term Trade Receivables 0 0<br />
C. Long Term Financial Assets 10,141,889 10,717,243<br />
1. Long-term securities 0 0<br />
2. Provision for decrease in long-term notes receivable (-) 0 0<br />
3. Affiliates 27,553,705 119,929,127<br />
4. Capital commitments to affiliates (-) 0 0<br />
5. Provision for decrease in value of affiliates (-) (17,686,285) (109,485,986)<br />
6, Affiliated companies 17,237,721 9,276,200<br />
7. Capital commitments to affiliated companies (-) (11,194,593) (2,435,043)<br />
8. Provision for decrease in value of affiliated companies (-) (5,768,659) (6,567,055)<br />
9. Other Long Term Financial Assets 0 0<br />
D. Tangible Fixed Assets 338,146,678 242,925,505<br />
1. Land 14,001,193 5,523,608<br />
2. Land improvements 5,198,509 129,400<br />
3. Buildings 206,360,403 159,650,476<br />
4. Machinery, plant & equipment 240,238,464 138,663,539<br />
5. Motor vehicles 21,949,135 19,334,233<br />
6. Furniture & Fixtures 114,073,259 101,604,021<br />
7. Other tangible fixed assets 62,236,792 3,735,983<br />
8. Accumulated depreciation (-) (329,066,438) (199,890,959)<br />
9. Investment in progress 3,108,613 13,229,140<br />
10. Advance payments 46,748 946,064<br />
E. Intangible Fixed Assets 194,575,630 146,364,619<br />
1. Set-up and organizational expenses 202,405 612,413<br />
2. Rights 47,484,066 54,804,403<br />
3. Goodwill 139,749,718 88,214,080<br />
4. Research & Development expenses 0 0<br />
5. Other intangible fixed assets 7,139,441 2,733,723<br />
6. Advance payments 0 0<br />
F. Other Long Term Assets 36,906,995 28,159,373<br />
T O T A L A S S E T S 1,084,476,526 911,642,088
Inflation-adjusted Consolidated<br />
(as per Serial XI, No:20 and 21)<br />
Independetly Audited<br />
DETAILED CONSOLIDATED BALANCE SHEET (TRY) 31.12.<strong>2004</strong> 31.12.2003<br />
I. SHORT TERM LIABILITIES 509,086,519 479,400,618<br />
A. Financial Loans 130,888,403 51,519,899<br />
1. Bank loans 79,185,909 42,904,653<br />
2. Current maturities of long-term borrowings and accrued interest 51,528,999 8,615,246<br />
3. Current maturities of long-term bonds and accrued interest 0 0<br />
4. Bonds and notes issued 0 0<br />
5. Other financial liabilities 173,495 0<br />
B. Trade Payables 139,341,853 175,404,749<br />
1. Suppliers 108,822,263 163,063,938<br />
2. Notes payable 26,986,610 9,635,418<br />
3. Deposits and guarantees received 307,607 361,835<br />
4. Other trade payables 4,469,945 3,121,220<br />
5. Rediscount on notes payable (-) (1,244,572) (777,662)<br />
C. Other Short Term Liabilities 15,061,838 9,523,895<br />
1. Due to shareholders 460,431 6,199,871<br />
2. Due to subsidiaries 0 0<br />
3. Due to affiliated companies 0 0<br />
4. Expenses payable 169,128 58,983<br />
5. Taxes, duties and other deductions payable 2,544,618 1,628,703<br />
6. Deferred and restructured fiscal liabilities 1,832,332 493,453<br />
7. Other Short Term Liabilities 10,055,329 1,142,885<br />
8. Rediscount on liabilities (-) 0 0<br />
D. Advances Received Against Orders 196,265,333 202,576,567<br />
E. Provision for Liabilities and Expenses 27,529,092 40,375,508<br />
1. Provision for taxes 2,434,015 2,051,968<br />
2. Other provision for taxes and expenses 25,095,077 38,323,540<br />
II. LONG TERM LIABILITIES 115,983,007 184,415,041<br />
A. Financial loans 63,678,840 153,015,454<br />
1. Bank loans 61,739,416 153,015,454<br />
2. Bonds issued 0 0<br />
3. Other securities issued 0 0<br />
4. Other financial liabilities 1,939,424 0<br />
B. Trade Payables 8,360,444 9,714,511<br />
1. Suppliers 0 999,063<br />
2. Notes payable 4,045,800 0<br />
3. Deposits and guarantees received 63,483 14,232<br />
4. Other financial liabilities 4,715,036 9,119,758<br />
5. Rediscount on liabilities (-) (463,875) (418,542)<br />
C. Other Long Term Liabilities 0 1,513,925<br />
1. Due to shareholders 0 0<br />
2. Due to subsidiaries 0 0<br />
3. Due to affiliated companies 0 0<br />
4. Deferred and restructured fiscal liabilities 0 1,513,621<br />
5. Other long term liabilities 0 304<br />
6. Rediscount on liabilities (-) 0 0<br />
D. Advances Received Against Orders 9,764,459 1,324,812<br />
E. Provision for Liabilities and Expenses 34,179,264 18,846,339<br />
1. Provision for severance pay 9,278,078 4,866,661<br />
2. Provision for other accrued liabilities and expenses 24,901,186 13,979,678<br />
III. SHAREHOLDERS EQUITY OUT OF MAIN PARTNERSHIP 59,814,545 38,219,015<br />
A. Shareholders Equity Out Of Main Partnership 59,814,545 38,219,015<br />
IV. SHAREHOLDERS’ EQUITY 399,592,455 209,607,414<br />
A. Paid-in capital 394,640,974 232,141,749<br />
B. Capital subscription (-) 0 0<br />
C. Share premium 9,577,760 7,411,915<br />
D. Revaluation surplus 0 0<br />
E. Reserves 12,859,304 15,651,565<br />
1. Legal reserves 1,294,827 1,620,397<br />
2. Statutory reserves 152 0<br />
3. Special reserves 1,470 0<br />
4. Extraordinary reserves 11,562,855 14,031,168<br />
5. Cost increase fund 0 0<br />
6. Earnings on sales of investments & properties to be added to capital 0 0<br />
7. Retained earnings 0 0<br />
F. Net Profit for the Year 30,712,970 4,448,356<br />
G. Loss for the Year (-) 0 0<br />
H. Net Cumulative Losses over the Past Years (-) (296,570,141) (301,361,110)<br />
I. Adjustment Difference in Shareholders’ Equity 0 0<br />
J. Conversion Difference 248,371,588 251,314,939<br />
T O T A L L I A B I L I T I E S 1,084,476,526 911,642,088<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2004</strong><br />
73
74<br />
‹hlas Holding A.fi.<br />
Notes to inflation-adjusted consolidated financial statements (as per serial: XI, No:21)<br />
(Amounts expressed in terms of the purchasing power of the New Turkish Lira (TRY) as at 31 December <strong>2004</strong>,<br />
unless otherwise indicated<br />
1- General Information:<br />
‹hlas Holding A.fi. (the “Company” or “Parent Company”) was founded under the name “‹hlas Matbaac›l›k ve<br />
Da¤›t›m Anonim fiirketi” on December 25, 1980. The Company changed its name first to ‹hlas Matbaac›l›k ve Sa¤l›k<br />
Hizmetleri A.fi. on March 06, 1986, and then to ‹hlas Holding on August 02, 1993. As a result of a series of amendments<br />
to its Articles of Association based on its steadily increasing business success with its own or associated<br />
companies, the Company included in its business field printing, newspaper and magazine publishing, construction,<br />
healthcare, marketing, domestic trade, educational products and services and soft drink production. In 1996, the<br />
Company handed over the soft drink production business to its associated company Kristal Kola ve Meflrubat Sanayi<br />
ve Ticaret A.fi., and the media and publishing operations over to ‹hlas Matbaac›l›k Gazetecilik Yay›nc›l›k Sanayi<br />
ve Ticaret A.fi. which was founded on September 30, 1997. Upon a resolution adopted by its Board of Directors<br />
on December 21, 2000, the Company sold its exclusive rights with respect to the distribution of Kia brand motor vehicles<br />
and, further on December 25, 2000, transferred its domestic appliances marketing operations to ‹hlas Ev Aletleri<br />
‹malat Sanayi ve Ticaret A.fi. The Company ceased its audio tape production operations on January 31, 2001.<br />
Information on the affiliated companies and subsidiaries, including their business fields, in which the Company<br />
holds majority shares and preference shares, is provided herebelow.<br />
Subsidiaries Included in Consolidation (on majority shares basis)<br />
1-Huzur Radyo TV A.fi. (TGRT) Broadcasts, produces, shoots and performs sound recording of television and<br />
radio programs, television films, videos and commercials, leases TV channels and sets up radio stations.<br />
2- ‹hlas Pazarlama A.fi. Buys and sells electric, electronic, mechanical kitchen appliances and durable goods.<br />
3-‹hlas Gazetecilik A.fi. Publishes, sells, distributes and markets newspapers and all other types of publications<br />
in Turkish and foreign languages, both at home and abroad.<br />
4-‹hlas Kargo A.fi. Provides cargo services.<br />
5-‹hlas Ev Aletleri ‹malat San.Tic.A.fi. Manufactures electric home appliances.<br />
6-‹hlas Sigorta A.fi. Offers diverse insurance and reinsurance products and services, excluding life insurance<br />
products and services.<br />
7-‹hlas Haber Ajans› A.fi. A news agency engaged in the dissemination of all types of publications and documents,<br />
both of domestic and foreign origin.<br />
8-‹hlas Yay›n Holding A.fi. Founded for the purpose of participating in the share capital, management and control<br />
of companies, whether existing or to be established, which are, or will be, involved in the fields of printed, audio-visual<br />
publishing, advertising, news agencyship and in other pertinent segments, or establishing businesses<br />
and companies personally to engage in the above listed business sectors.<br />
9-Kristal Kola ve Meflrubat San.Tic.A.fi. Produces all kinds of soft drinks.<br />
10-Repafl Medya Reklam Prodüksiyon Bas›m Hizm.A.fi. An advertising agency engaged in the services of<br />
promotion, classified advertising, fotography.<br />
11-Kuzuluk Kapl›ca ‹nflaat Turizm Sa¤l›k ve Petrol Ürünleri Tic.A.fi. Runs a hot springs and health facility<br />
at Akyaz›, Kuzuluk Village/Adapazar›.<br />
12-Kristal G›da Da¤›t›m ve Pazarlama San. ve Tic. A.fi. Produces and sells foods and packaging materials;<br />
also engaged in livestock feeding, agriculture, running of mills, production of canned foods, fresh fruits, vegetables<br />
and seafood.<br />
13-‹hlas E¤itim Hizmet Kurumlar› A.fi. Sets up, operates and provides services to private educational facilities.
<strong>Annual</strong> <strong>Report</strong> <strong>2004</strong><br />
14-TGRT Haber TV A.fi. Broadcasts, produces, shoots and performs sound recording of television and radio<br />
programs, television films, videos and commercials, leases TV channels and sets up radio stations.<br />
15-TGRT Dijital TV Hizmetleri A.fi. Broadcasts, produces, shoots and performs sound recording of television<br />
and radio programs, television films, videos and commercials, leases TV channels and sets up radio stations.<br />
16-Bisan Bisiklet Moped Oto. San. Tic. A.fi. Manufactures and trades in bicycles, mopeds, automotiv components<br />
and spares.<br />
17-Bisiklet Pazarlama ve Tic. A.fi. Markets bicycles, mopeds, and their spares.<br />
18-Ege Mosan Motorlu Araçlar San. ve Tic. A.fi. Manufactures and trades in motorbikes, motorcycles and<br />
other similar motor vehicles and their spares.<br />
19-‹hlas Net A.fi. Offers information and Internet services, sets up networks and trades in computers and computer<br />
components.<br />
20-‹letiflim Magazin Gazt. Yan. San ve Tic. A.fi. Prints and markets newpapers, magazines, books, etc.<br />
21-‹hlas Medikal Ür. ve Sa¤l›k Hiz.A.fi. Trades in all kinds of healthcare equipment.<br />
22-K›br›s Bürosu This company, established in the Turkish Republic of Northern Cyprus as a branch of ‹hlas<br />
Holding A.fi., distributes newspapers and markets electric home appliances.<br />
Subsidiaries Not Included in Consolidation (on majority shares basis)<br />
1-‹hlas Motor Limited fiirketi Engaged in the purchase, sale, import and export of all types of motor and nonmotor<br />
vehicles. The company is curretly inactive.<br />
2-Buryal Enerji Da¤›t›m Ltd. fiti. Builds power stations, generates electric power and sells such electric power<br />
to its subscribers and other companies. The company is curretly inactive.<br />
3-Tasfiye Halinde ‹hlas Finans Kurumu A.fi. (in Liquidation) Formed for the purpose of investing funds collected<br />
through private current accounts and profit/loss sharing accounts. As of the date this report is prepared, this<br />
company’s license was suspended and it is in the process of liquidation.<br />
4-‹hlas Motor Sehimdar Cemiyeti Manufactures open type engines.<br />
5-Eko Enerji Üretim Da¤›t›m ve Tic. A.fi. Generates and distributes wind power and other forms of energy<br />
and operates power stations of such type. The company is curretly inactive.<br />
6-Kia-‹hlas Motor San. ve Tic. A.fi This company has become inactive following the transfer by ‹hlas Holding<br />
A.fi. of its distributorship license for Kia brand motor vehicles.<br />
7-‹hlas G›da ve Ticaret A.fi. Produces and markets all types of food and packaging materials.<br />
Affiliated companies Included in Consolidation (on majority shares basis)<br />
1-‹hlas Gayrimenkul Yat. Ort. A.fi. Invests in real estates, housing projects, rights in real properties, capital<br />
market instruments and capital markets.<br />
2-‹hlas Genel Antrepoculuk Nakliyat ve Tic. A.fi. Offers warehouse and depot services.<br />
3-‹hlas Yap› Turizm ve Sa¤l›k A.fi. Engaged in construction, contracting and installation services and invests,<br />
sells and operates tourist and healthcare facilities.<br />
4-‹hlas Tarsan Tart› ve Ölçü Aletleri Elk. Cih. ‹ml. San. Tic. A.fi. Manufactures and sells scales, weighing<br />
devices and power generators.<br />
5-‹hlas Fuar Hizmetleri A.fi. Organizes trade and promotional fairs and exhibitons, offers travel agency<br />
services, advertising services and publishes periodicals in its own field of business, both at home and abroad.<br />
75
76<br />
Affiliated Companies Not Included in Consolidation (on majority shares basis)<br />
1-‹hlas Kimya San. Ltd. fiti. Curretly inactive.<br />
2-Yay-sat A.fi. Distributes daily newspapers and weekly magazines.<br />
3-Do¤u Yat›r›m Holding A.fi. Makes investments in the East and Southeast Anatolian regions.<br />
4-‹hlas Oxford Mortgage ‹nfl. Tic. A.fi. Constructs and sells all types of real estates.<br />
2- Shareholders holding 10% or more of the capital:<br />
12/<strong>2004</strong> 12/2003<br />
Shareholder Share Rate Share Amount Share Rate Share Amount<br />
Enver Ören 27.00% 106,553,600 37.00% 85,922,952<br />
Free-float 70.90% 279,830,959 60.80% 141,199,011<br />
Others 2.10% 8,256,415 2.20% 5,019,786<br />
Total (Historical Value) 100.00% 394,640,974 100.00% 232,141,749<br />
* Capital adjustment account 166,050,848 164,636,494<br />
Total (Value Adjusted for Inflation) 560,691,822 396,778,243<br />
(*) Calculated by inflation adjustment as per Article 14, Communique Serial XI, No:20.<br />
The reserve fund allocated pursuant to the Turkish Code of Commerce is TRY 1,294,827 as of December 31, <strong>2004</strong><br />
and the legal reserve funds are illustrated in financial statements without being adjusted (2003: TRY 1,620,397). The<br />
share capital of the Company as adjusted in terms of the purchasing power as at December 31, <strong>2004</strong> is TRY.<br />
560,691,822.<br />
3- Privileges Given to Share Certificates Representing the Share Capital (as per the classes of shares<br />
and types of privileges, respectively) :<br />
The General Assembly of the Company elects, from among candidates nominated by the shareholders holding<br />
Group (B) share certificates, at least three members of the Board of Directors if consisted of a total of 5 members,<br />
or at least five members if consisted of a total of 7 members, or at least seven members if consisted of a total of 9<br />
members, or at least nine members if consisted of a total of 11 members.<br />
The General Assembly of the Company elects the auditor, if only one auditor is to be elected, or, if three auditors<br />
are to be elected, then at least two of such three auditors from among the candidates nominated by the shareholders<br />
holding Group (B) share certificates.<br />
4- Registered capital ceiling in registered capital companies:<br />
- The Registered Capital Ceiling for a Registered Capital Company is TRY 460,000,000 (based on historical records)<br />
(2003: TRY 460,000,000)<br />
5- Capital Increases Performed During the Year and Sources of Such Increases:<br />
Current Period:<br />
At its meeting dated May 13, <strong>2004</strong>, the Board of Directors of the Company decided to file an application on May<br />
17, <strong>2004</strong> with the Capital Markets Board for a permission to increase its issued capital, which is subject to the ceiling<br />
amount of TRY 460,000,000, by 70% from TRY 232,141,749 upto to TRY 394,640,973 by injecting an amount of<br />
TRY 162,499,224 via rights issue. Upon approval of the said application under Resolution No. 38/1186 of the Capital<br />
Markets Board on September 16, <strong>2004</strong>, the shareholders exercised their respective preferential subscription<br />
rights between September 29, <strong>2004</strong> and October 13, <strong>2004</strong>. The preferential subscription rights corresponding to an
<strong>Annual</strong> <strong>Report</strong> <strong>2004</strong><br />
amount of TRY 3,102,600 were offered for sale on the primary market of the Istanbul Stock Exchange between October<br />
20, <strong>2004</strong> and November 18, <strong>2004</strong>, and completely sold by November 04, <strong>2004</strong>. “Circular No. 2663 Regarding<br />
Completion of Capital Increase”, dated December 12, <strong>2004</strong>, issued by the Capital Markets Board in certification of<br />
the increase in the Company’s issued capital to TRY 394,640,974 was published in the Trade Registry Gazette of December<br />
24, <strong>2004</strong>.<br />
Previous Year :<br />
Capital Increase Total Amount of Rights Issue (*)Revaluation Surplus<br />
Registered on Increase (TRY) (TRY) of Fixed Assets (TRY)<br />
March 03, 2003 58,035,437 55,133,665 2,901,772<br />
October 30, 2003 116,070,874 116,070,874 0<br />
(*) Ommitted in the inflation-adjustment of the capital.<br />
6- Marketable securities, other than share certificates, issued during the year : NONE (2003: None)<br />
7- Debt securities issued and matured during the year : NONE (2003: None)<br />
8- Fixed assets circulation during the year:<br />
12/<strong>2004</strong> 12/2003<br />
a) Total cost of fixed assets purchased, manfactured or constructed : 11,598,569 9,512,186<br />
b) Total cost of fixed assets sold or scrapped: 16,942,777 41,421,036<br />
c) Revaluation surplus arose during the year: - -<br />
d) Nature, total amount, starting and ending dates and percentage of completion of invesments in progress.<br />
Current Year:<br />
Allowance for<br />
Diminution in Value Estimated<br />
Value as per Recognized in Completion Completion<br />
Investment Total Expense Survey <strong>Report</strong> Balance Sheet Rate (%) Date<br />
Kuzuluk Health Center 1,388,695 - 1,388,695 90% 31.12.2005<br />
Kuzuluk Housing 360,328 - 360,328 4% 31.12.2005<br />
Güzelce Administrative Building 865,186 - 865,186 97% 31.12.2005<br />
Others - - 494,404 - -<br />
Total 2,614,209 - 3,108,613<br />
77
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Previous Year:<br />
Allowance for<br />
Diminution in Value Estimated<br />
Value as per Recognized in Completion Completion<br />
Investment Total Expense Survey <strong>Report</strong> Balance Sheet Rate (%) Date<br />
Kuzuluk Hotel 3,423,555 - 3,423,555 95% 31.12.<strong>2004</strong><br />
Kuzuluk Health Center 1,388,695 - 1,388,695 90% 31.12.<strong>2004</strong><br />
Armutlu Shopping Mall 5,723,530 (1,272,376) 4,451,153 80% 31.12.<strong>2004</strong><br />
Kuzuluk Houses 360,328 - 360,328 4% 31.12.<strong>2004</strong><br />
Armutlu Administrative Building 728,328 - 728,328 87% 31.12.<strong>2004</strong><br />
Armutlu Sports Academy 1,352,798 (111,939) 1,240,859 71% 31.12.<strong>2004</strong><br />
Güzelce Administrative Building 1,003,162 (137,977) 865,186 97% 31.12.<strong>2004</strong><br />
Others 771,035 - 771,035 - -<br />
Total 14,751,431 (1,522,292) 13,229,139<br />
9- Investment allowances to be utilized during the current and future periods:<br />
There is no investment allowances that the Company will benefit from during the current or future periods. The<br />
investment allowances that the Group companies will benefit from are TRY. 361,906 YTL (2003: TRY 754,757) and<br />
TRY 1,983,100 (2003: TRY 1,338,532) in the current year and future years, respectively.<br />
10- Due from/to shareholders, affiliated companies and subsidiaries:<br />
Receivable Payable<br />
12/<strong>2004</strong> 12/2003 12/<strong>2004</strong> 12/2003 12/<strong>2004</strong> 12/2003 12/<strong>2004</strong> 12/2003<br />
Non - Non - Non - Non -<br />
Trade Trade Trade Trade Trade Trade Trade Trade<br />
1) Shareholders - - 1,032,661 2,216,030 - - 460,431 6,199,871<br />
2) Subsidiaries (*) 6,438 - - - 1,281 - - -<br />
3) Affiliated Companies 6,407,721 16,183,116 188,301 11,403,427 - -<br />
(*) Since all trade and non-trade receivables from and payables to all of its subsidiaries included in consolidation<br />
were eliminated in consolidation, these receivables and payables are not illustrated in the consolidated financial<br />
statements.<br />
The TRY 403,360 portion out of the non-trade payables due to shareholders is payable to Enver Ören (2003: TRY<br />
5,609,037). The TRY 1,011,095 portion out of the non-trade receivables due from shareholders is payable by Ali Tubay<br />
Gölbafl› (2003: TRY 2,215,251).<br />
A default interest is levied onto all accounts due from subsidiaries and associations if such accounts exceed the<br />
customary trade limits.<br />
11- Valuation, costing and depreciation methods applied to inventories and other balance sheet<br />
items; changes made in these methods and accounting polices compared to previous years; the monetary<br />
effects of such changes on the financial statements; and potential effects of possible developments,<br />
including their reasons, on going concern and periodicity assumption :<br />
By a new law passed on January 31, <strong>2004</strong>, New Turkish Lira (TRY) has become the new national currency unit of<br />
the Republic of Turkey and, with TL 1,000,000 being equal to TRY 1.00, the old Turkish Lira will be in physical circulation<br />
until December 31, 2005. For that reason, as of December 31, <strong>2004</strong>, the Company’s functional and reporting
<strong>Annual</strong> <strong>Report</strong> <strong>2004</strong><br />
currency and previous year’s comparative financial statement are denominated in TRY by using the translation rate<br />
of TL. 1,000,000 TL / TRY 1,00 = 1,00.<br />
Under Communique No. XI/1 and other communiques amending and supplementing same, as well as “Communique<br />
Serial XI, No. 20 Regarding the Rules and Principles for the Adjustment of Financial Statements in Periods of<br />
Hyperinflation” which governs financial statements prepared in hyperinflationary periods, “Communique Serial XI,<br />
No. 21 Regarding the Rules and Principles for Consolidated Financial Statements in the Capital Market and Accounting<br />
of affiliated companies” which governs consolidated financial statements and accounting of affiliated<br />
companies, all effective as of 01 January 2003, the Capital Markets Board (CMB) laid down the rules and procedures,<br />
which shall be followed by companies and intermediary institutions subject to the Capital Market Law when<br />
preparing and presenting their financial statements and reports.<br />
The CMB Communique Serial No. XI, No: 20 Regarding the Rules and Principles for the Adjustment of Financial<br />
Statements in Periods of Hyperinflation (Inflation-Related Communique) and Communique Serial No. XI, No. 21 Regarding<br />
the Rules and Principles Regarding the Rules and Principles for Consolidated Financial Statements in the<br />
Capital Market and Accounting of affiliated companies (Consolidation-Related Communique) came into effect with<br />
regard to companies having separate and special accounting periods and starting from their first annual financial<br />
statements to be prepared at the end of 2003.<br />
Accordingly, the Company acted in conformity with the Inflation- and Consolidation-Related Communiques when<br />
preparing the its financial statements enclosed herewith.<br />
a) Polices adopted when preparing the inflation-adjusted financial statements:<br />
The amendments to be made to the financial statements on the basis of the historical costs by taking into consideration<br />
the change in the purchasing power of the Turkish Lira at year end have been based on Communique Serial<br />
XI, No:20 Regarding the Rules and Principles for the Adjustment of Financial Statements in Periods of Hyperinflation.<br />
In cases where currencies of an economy dominated by high inflation are used, these principles requires that<br />
financial statements be prepared in conformity with Generally Accepted Accounting Principles issued by the CMB<br />
on the basis of the Turkish Lira’s then current purchasing power on the date of such financial statements and that<br />
the previous year’s financial statements be redrafted by using the same value criteria for comparison purposes.<br />
Another reason requiring the application of the same Communique is that, in case the price index figure at the date<br />
of the annual balance sheet exceeds two times of the price index figure prevailing at the beginning of the third<br />
preceeding financial year, including the current one, and the price index figure at the date of the current year’s balance<br />
sheet increases at a rate of 10% or more compared to that prevailing at the beginning of the financial year, a<br />
high inflation period begins during the current financial year.<br />
The index and translation factors used for redrafting the enclosed financial statements are given herebelow :<br />
Date Index Adjustment Coefficient<br />
31 December <strong>2004</strong> 8,403.8 1<br />
31 December 2003 7,382.1 1.1384<br />
31 December 2002 6,478.8 1.2971<br />
The essential rules for inflation adjustment of the foregoing financial statements are as follows:<br />
- The financial statements prepared by using the currency of a high-inflation economy have been based on the<br />
purchasing power prevailing on the date of the balance sheet involved.<br />
- Since the existing monetary assets and liabilities are such items that are capable of maintaining their nominal values<br />
despite fluctuations in the value of the currency, but with a decreasing purchasing power, and since they are recognized<br />
in the currency unit effective on the date of the balance sheet, they do not need to be adjusted separately.<br />
- Non-monetary assets and liabilities as well as shareholders’ equity items are translated by using the relevant<br />
adjustment coefficient since they are not composed of balances available at the balance sheet date. Fixed assets<br />
79
80<br />
purchased are translated by using the relevant adjustment coefficient for the year involved.<br />
- The comparative financial statements have been redrafted by using the inflation indexes illustrating the purchasing<br />
power as at the date of the most recent balance sheet.<br />
- All of the items recognized in the Income Statement are adjusted by using the relevant adjustment coefficient<br />
(monthly, quarterly and/or annual average), which is calculated on the basis of the dates the income and expense<br />
accrued, for the purpose of ensuring that they be expressed in terms of the purchasing power of the currency as at<br />
the date of the balance sheet.<br />
The effect of inflation on the Company’s net monetary position is illustrated in the Income Statement as the net<br />
monetary earning or loss.<br />
In case the amounts adjusted for inflation turn out to be exceeding the net realizable value, the value of relevant<br />
inventories, affiliated companies, subsidiaries and tangible fixed assets have been reduced to their respective net<br />
realizable values or current values, if any, by taking into consideration such criteria as the permanence or temporariness<br />
or the rate of such value decrease.<br />
b) Basic polices of consolidation adopted in preparing the consolidated financial statements:<br />
The consolidation was performed in conformity with Communique Serial No. XI, No. 21 “Regarding the Rules<br />
and Principles Regarding the Rules and Principles for Consolidated Financial Statements in the Capital Market and<br />
Accounting of affiliated companies” (Consolidation-Related Communique) issued by the CMB. Within this framework,<br />
the operating results of companies in which 50% or more of the shares or voting rights or a majority of management<br />
or the right to appoint majority of management is held, whether directly or indirectly, by the Parent Company<br />
are consolidated by using the line-by-line consolidation method under the principle of materiality based on<br />
the size of their assets and equity capital.<br />
According to the method of line-by-line consolidation, hundred percent of the assets, liabilities, income, expense<br />
and off-balance sheet items of subsidiaries have been amalgamated with the assets, liabilities, income, expense<br />
and off-balance sheet items of the Parent Company.<br />
The book value of the Group’s investment in each subsidiary and the capital portion owned by the Group in each<br />
subsidiary have been offset. The balances emanating from transactions among companies within the scope of consolidation<br />
and unrealized profits and losses have mutually been offset. The minority rights in the net earnings of<br />
consolidated subsidiaries have been determined to ensure calculation of the Group’s net income and deducted<br />
from the net income of the subsidiary. Minority rights have been illustrated on the consolidated balance sheet separately<br />
from both liabilities and the shares of shareholders in the Group. Minority rights have also been illustrated<br />
separately in the income of the Group.<br />
In cases where the accounting policies used by the subsidiraries are different from the those used by the Parent<br />
Company, these accounting policies have been harmonized with eachother.<br />
The financial statements of those affiliated companies, in which the Parent Company holds less than 50% of the<br />
shares (with a minimum shareholding rate of 20%), prepared in accordance with the principles set out by the CMB<br />
have been reflected in line with the method of posting of shares from the equity within the framework of the principle<br />
of materiality.<br />
affiliated companies are those companies in whose capital the Parent Company participates, over which the Parent<br />
Company has substantial influence, although having no control on the capital or management of them. The<br />
affiliated companies of the Parent Company have been included in the consolidation by using the shareholders’<br />
equity method in accordance with the principle of materiality.<br />
Substantial influence means the power of involving in the determination of the financial and managerial polices<br />
of the company participated in. If the Parent Company holds ten percent or more of the voting rights in the company<br />
it participates in, it is deemed that the Parent Company has substantial influence on that associated company<br />
unless proved otherwise.
<strong>Annual</strong> <strong>Report</strong> <strong>2004</strong><br />
The equity method is an accounting method used to determine the income derived from a company’s investment<br />
in another company over which it exercises substantial influence. Under this method, investment income equals a<br />
share of net income proportional to the size of the equity investment.<br />
In cases where accounting polices used differ from those adopted by the Parent Company for preparing their consolidated<br />
financial statements, these accounting policies are harmonized.<br />
c) Illustration, in consolidated financial statements, of affiliated companies, subsidiaries and longterm<br />
marketable securities excluded from the scope of consolidation:<br />
affiliated companies, subsidiaries and long-term marketable securities excluded from the scope of consolidation<br />
have been illustrated at their respective values recognized in the consolidated financial statements and not adjusted<br />
for inflation.<br />
d) Securities:<br />
The share certificates illustrated under the Securities column are recognized at their respective current values calculated<br />
on the basis of their weighted average prices prevailed over the last 5 business days.<br />
The treasury bills are accounted for at their acquisition costs and the income accrued during period between their<br />
acquisition and the date of the balance sheet is added onto their acquisiton cost. These values may not exceed<br />
the estimated values of the securitieis.<br />
e) Debts and Credits:<br />
The Company’s debts and credits are illustrated in their actual figures in the balance sheet. The funding cost of<br />
the credits and debts is computed by taking into account the interest rate offered in the stock exchange or other regulated<br />
markets for state borrowing instruments with corresponding maturities, or on the basis of the inflation rate<br />
occurred during the relevant term, and the amount so calculated is accounted for as funding income or expense.<br />
The rate indicated on such instruments or, if no such rate is available, the London Interbank Rate of Interest (Libor)<br />
is used for calculating the costs of debts and credits in foreign currencies.<br />
f) Inventories:<br />
Inventories other than semi-finished and finished products are illustrated in their readjusted values by translating<br />
the acquisition costs of the relevant assets and the acquisition costs of semi-finished and finished products, including<br />
raw materials included in the cost, by using the appropriate adjustment coefficient applicable on the date of<br />
acquisition, as specified in Article 11 of Communique Serial IX, No. 20.<br />
Since the cost value adjusted for inflation exceeds the net realizable value of the pertinent inventory, the value of<br />
the pertinent inventory has been reduced to the respective net realizable value and the allocated provision for impairment<br />
has been associated with the expense accounts.<br />
g) Tangible and intangible long term fixed assets:<br />
Depreciable tangible long term assets and intangible long term assets at their readjusted values by translating<br />
the acquisition costs of the relevant assets by using the appropriate adjustment coefficient for the year of acquisition,<br />
as specified in Article 11 of Communique Serial IX, No. 20. Impairment in real properties and ongoing investments<br />
has been illustrated on the basis of assessment reports issued by licensed independent surveyors. Impairment<br />
in machinery and equipment has been indicated at their current market values computed. Accordingly, the<br />
provisions indicated in the following table have been allocated for the Company and the Group companies, respectively:<br />
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82<br />
12/<strong>2004</strong> 12/2003<br />
Buildings 262,910,492 (56,550,089) 206,360,403 232,886,125 (73,235,649) 159,650,476<br />
Machinery &<br />
Equipment<br />
243,601,472 (3,363,008) 240,238,464 149,854,116 (11,190,577) 138,663,539<br />
Ongoing<br />
Investments<br />
3,108,613 - 3,108,613 13,544,512 (315,372) 13,229,140<br />
Depreciation is calculated on a stright-line basis over the estimated useful life of fixed assets at their values adjusted<br />
for inflation. The estimated useful life of the fixed assets are as follows:<br />
Buildings 50 Years<br />
Machinery and Equipment 3-10 Years<br />
Motor Vehicles 3-10 Years<br />
Furniture and Fixtures 3-10 Years<br />
Other Fixed Assets 3-10 Years<br />
Intangible Fixed Assets 3-10 Years<br />
With regard to assets that remain in the assets account for less than a financial year as from the date of the balance<br />
sheet, an amount of depreciation proportional to the depreciation amount calculated for one full year has been<br />
allocated considering the period such assets remain in the assets account.<br />
If the cost value adjusted for inflation exceeds the net realizable value of the relevant fixed asset, the value of such<br />
asset is reduced to the respective net realizable value and the allocated provision for impairment is associated with<br />
the expense accounts.<br />
h) Goodwill:<br />
Indexed Cost<br />
Provision for<br />
Impairment<br />
Allocated as<br />
per Survey<br />
/Market Value<br />
Goodwill arose upon an acquisition has been recognized on the balance sheet on grounds that the acquirer expects<br />
the acquisition would have a useful life in the coming years and by estimating that it would be redeemed within<br />
10 years and deducting the accumulated depreciation amount from its cost of acquisition. Detailed information<br />
on the goodwill items of the Group is given in Note: 34/h to the balance sheet.<br />
i) Assets and liabilities in foreign currency:<br />
Assets and liabilities recognized in foreign currencies in the balance sheet have been translated into Turkish Lira<br />
on the basis of the buying rate and selling rate, respectively, of the Central Bank of Turkey. Income and expense arising<br />
from exchange difference when translating foreign currency transactions and balance sheet items into Turkish<br />
Lira have been recognized in the Statement of Income.<br />
j) Employment termination benefits:<br />
Value<br />
Recognized on<br />
Balance Sheet<br />
Indexed Cost<br />
Provision for<br />
Impairment<br />
Allocated as<br />
per Survey<br />
/Market Value<br />
Value<br />
Recognized on<br />
Balance Sheet<br />
Pursuant to Labor Law No. 4857 in effect, the Company is required to pay a lump-sum termination compensation<br />
to each of its employee who has completed one year of service with the Company and whose contract is terminated<br />
without just cause or for reasons of retirement, compulsory military service or death. Additionally, the Company<br />
is also required to pay compensation to any female employee who resigns upon getting married. The termination<br />
benefit is calculated on the basis of the monthly gross salary paid to the employee involved, which may, ho-
<strong>Annual</strong> <strong>Report</strong> <strong>2004</strong><br />
wever, not exceed the maximum amount stipulated in Article 14 of the relevant legislation. This maximum amount<br />
of termination benefit is TRY 1,574.74 as of 31 December <strong>2004</strong>. In case the Group ceases its operations and/or terminates<br />
the contracts with all of its employess on 31 December <strong>2004</strong>, the total amount of termination benefit payable<br />
to its employees is calculated to be TRY 9,278,078 YTL (2003: TRY 4,866,661) and the Group has allocated a<br />
reserve for the whole amount of the said liability.<br />
k) Provisions for taxes:<br />
Within the framework of the regulations introduced under Law No. 5035, the corporation tax rate and provisional<br />
corporation tax rate applicable only to earnings obtained in <strong>2004</strong> is 33%, which will be reduced back to 30% as<br />
of 2005. In addition to corporation tax, dividends are also subject to withholding tax on income except for those dividends<br />
distributed to resident corporations, which receive dividend and declare same by including it into their corporte<br />
earnings, and to foreign corporations’ branch offices in Turkey. The rate of withholding tax on income is 10%<br />
as of 24 April 2003. Profit retained and included in the capital is not subject to withholding tax.<br />
Effective from 24 April 2003, the requirements that an investment allowance which is taken into consideration<br />
when assessing the corporation tax base is subject to an investment incentive certificate and that a withholding tax<br />
is levied on the amount of the investment allowance have been repealed. In return, the investment allowance is determined<br />
to be 40%. However, it has been stipulated that a withholding tax at the rate of 19.8% is applicable to earnings<br />
benefitting from investment allowances which will be calculated for investments, which are made after 24<br />
April 2003 within the scope of investment incentive certificates issued to applicants who applied prior to the said<br />
date, as well as from other investment allowances, which were issued prior to the said date but carried forward due<br />
to insufficient earnings, regardless of whether such earnings have been distributed or not. Yet, with regard to incentive<br />
certificates issued for applications made prior to the said date, it has been made possible not to levy the<br />
withholding rate of 19,8% on investment allowances calculated on the basis of the new regulations by setting the<br />
investment allowance rate at 40% for investment expenses incurred after the date of 24 June 2003, provided that a<br />
petition is filed in this respect with the relevant tax office before 15 June 2003.<br />
The Law on Amendments to Tax Procedure Law No. 5024, Income Tax Law and Corporation Tax stipulates that,<br />
as of 1 January <strong>2004</strong>, taxable earnings be calculated on the basis of balance sheets adjusted for inflation. Accordingly,<br />
the difference to be calculated by deducting the adjusted capital, adjusted share premiums, adjusted share<br />
certificate cancellation profits premiums and the total liabilites from the adjusted assets total on the balance sheet<br />
dated 31 December 2003 in accordance with the regulations introduced under the said law shall be illustrated in the<br />
previous year’s profit/loss account, and neither the previous year’s profit amount thus calculated shall be subject to<br />
taxation nor shall the previous year’s loss be recognized as loss. Likewise, the previous year’s financial nondeductible<br />
losses recognized in the returns for 2003 and previous financial years shall be taken into account at their recorded<br />
values in the financial year of <strong>2004</strong> and also in the following financial years.<br />
12- Subsequent material events:<br />
- The maximum amount of termination benefit shall be TRY 1,648.90 as of 01 January 2005.<br />
- Other material events:<br />
a) The pledge, which is stated in Note 31-c) to the balance sheet and was created over the Company’s share certificates<br />
in Yaysat Yay›n Sat›fl Pazarlama ve Da¤›t›m A.fi., having a total nominal value of TRY 230,000, to the benefit<br />
of Hürriyet Gazetecilik Matbaac›l›k A.fi. as security against the debts and guarantees of ‹hlas Gazetecilik A.fi. and<br />
Huzur Radyo TV A.fi., has been released as of the date the present financial statement.<br />
b) The Company’s USD 16,500,000 time savings deposit account blocked, with the Company’s agreement, with<br />
HSBC Bank’s London Branch as a security against the loans extended by HSBC Bank to ‹hlas Pazarlama A.fi. has<br />
been reduced down to USD 11,500,000 as of the date the present financial statement.<br />
83
84<br />
13- Contingent losses and earnings as defined in Annex 2 to the Communique (legal disputes that<br />
could affect the Company’s financial position and year-end results are explained in this section) :<br />
Current Year:<br />
Amounts of Legal Amounts of Legal Reserves<br />
Claims Against Claims by Allocated for<br />
Parent Company and Subsidiaries the Company the Company Claims<br />
1 ‹hlas Holding A.fi. 5,073,951 509,665 5,073,951<br />
2 ‹hlas Gazetecilik A.fi. 643,026 29,018 -<br />
3 ‹hlas Kargo A.fi. 1,778,980 1,305,308 643,963<br />
4 ‹hlas Ev Aletleri ‹malat San.Tic.A.fi. - - -<br />
5 ‹hlas Pazarlama A.fi 170,954 440,750 610,900<br />
6 ‹hlas Sigorta A,fi. 6,010,393 1,622,580 1,999,306<br />
7 ‹hlas Haber Ajans› A.fi 322,065 562,811 541,578<br />
8 Kristal Kola ve Meflrubat San.Tic.A.fi 11,675 224,927 224,927<br />
9 Repafl Medya Rek. Prod. Bas. Hiz.A.fi 90,000 84,414 174,414<br />
10 Kuzuluk Kapl.Sa¤. ve Petr.Ür.Tic.A.fi - - -<br />
11 ‹hlas Net A.fi 34,199 682 -<br />
12 Kristal G›da Da¤. ve Paz.Tic.A.fi - 238,854 238,854<br />
13 ‹hlas Yay›n Holding A.fi - - -<br />
14 ‹hlas E¤itim A.fi - - -<br />
15 K›br›s Bürosu - - -<br />
16 TGRT Haber TV - - -<br />
17 TGRT Dijital Tv - - -<br />
18 Egemosan Mot Araçlar San.ve Tic.A.fi. - 15,484 -<br />
19 Bisiklet Pazarlama San.Ve Tic.A.fi. 5,000 479,040 250,915<br />
20 Bisan Bisiklet Moped Oto.San.Tic.A.fi. 17,247 20,628 -<br />
21 Huzur Radyo TV A.fi. (TGRT) 1,016,795 119,210 119,210<br />
22 ‹hlas Medikal Ür. ve Sa¤l›k Hiz.A.fi - - -<br />
23 ‹letiflim Magazin Gazt. Tic. A.fi - - -<br />
TOTAL 15,174,285 5,653,371 9,878,018<br />
Associated Companies<br />
1 ‹hlas Gayrimenkul Yat.Ort.A.fi - - -<br />
2 ‹hlas Genel Antrep. Nakliyat ve Tic.A.fi. - 3,127 -<br />
3 ‹hlas Yap› Turizm ve Sa¤l›k A.fi 3,065 - -<br />
4 ‹hlas Tarsan Iml.San.Tic.A.fi - - -<br />
5 ‹hlas Fuar Hizmetleri A.fi - - -<br />
TOTAL 3,065 3,127 -<br />
- Additionally, there is a pending lawsuit brought by the Company before the Tax Court and three tax litigations<br />
appealed by the Government before the Council of State.<br />
- Based on the accounting standards specifications issued by the CMB under Letter No. 2002/1 of 08 March 200,<br />
the Group companies have not allocated reserves for litigations which were brought against or by them and which<br />
they would quite likely win.
<strong>Annual</strong> <strong>Report</strong> <strong>2004</strong><br />
Previous Year:<br />
Legal Claims Legal Claims Reserves<br />
Litigated Against Litigated by Allocated<br />
Parent Company and Subsidiaries the Company the Company for Claims<br />
1 ‹hlas Holding A.fi. 3,822,729 570,527 3,822,729<br />
2 ‹hlas Matb. Gazt. Yay. San. ve Tic.A.fi 226,780 353,366 -<br />
3 ‹hlas Gazetecilik A.fi. 430,346 354,790 -<br />
4 ‹hlas Hayat Sigorta A.fi - - -<br />
5 ‹hlas Ev Aletleri ‹malat San.Tic.A.fi. - - -<br />
6 ‹hlas Pazarlama A.fi 34,665 - -<br />
7 ‹hlas Sigorta A.fi. 6,398,699 1,833,618 1,932,947<br />
8 ‹hlas Haber Ajans› A.fi 75,626 669,213 -<br />
9 Kristal Kola ve Meflrubat San.Tic.A.fi - 272,238 265,848<br />
10 Repafl Medya Rek. Prod. Bas. Hiz.A.fi - 109,227 109,227<br />
11 Kuzuluk Kapl.Sa¤. ve Petr.Ür.Tic.A.fi 1,765 - -<br />
12 ‹hlas Net A.fi 226,708 836 -<br />
13 Kristal G›da Da¤. Ve Paz.Tic.A.fi. - 316,675 290,618<br />
14 ‹hlas Yay›n Holding A.fi - - -<br />
15 ‹hlas E¤itim A.fi - - -<br />
16 K›br›s Bürosu - - -<br />
TOTAL 11,217,318 4,480,490 6,421,369<br />
Legal Claims Legal Claims Reserves<br />
Litigated Against Litigated by Allocated<br />
Parent Company and Subsidiaries the Company the Company for Claims<br />
‹hlas Gayrimenkul Yat.Ort.A.fi - - -<br />
Huzur Radyo TV Afi. 1,648,401 62,058 -<br />
‹hlas Genel Antrep. Nakliyat ve Tic.A.fi. - 3,560 -<br />
‹hlas Yap› A,fi 3,489 - -<br />
‹hlas Tarsan Iml.San.Tic.A.fi - - -<br />
‹hlas Medikal Ür. ve Sa¤l›k Hiz.A.fi - - -<br />
‹hlas Fuar Hizmetleri A.fi - - -<br />
TOTAL 1,651,890 65,618 -<br />
- Additionally, there is a pending lawsuit brought by the Company before the Tax Court and three tax litigations<br />
appealed by the Government before the Council of State.<br />
14- Information on changes in the Company’s accounting estimates substantially affecting gross<br />
margins and their monetary effects: NONE (2003: None).<br />
85
86<br />
15- Total amount of mortgage or guarantees created on assets:<br />
The amounts of mortgages and guarantees created on the Parent Company’s and the Group’s assets, a substantial<br />
portion of which mortgages and guarantees were created to the benefit of financial institutions against credits<br />
obtained from them, are illustrated in the following table:<br />
12/<strong>2004</strong> MORTGAGES 12/2003 MORTGAGES<br />
TRY USD TRY USD<br />
‹hlas Holding A.fi. 60,102,180 17,240,758 68,420,463 17,240,758<br />
‹hlas Pazarlama .A.fi 83,688,250 23,500,000 - -<br />
‹hlas Matb. Gazt. Yay. San. ve Tic.A.fi - - 71,639,660 23,500,000<br />
‹hlas Gazetecilik A.fi. - - 5,464,331 -<br />
‹hlas Ev Aletleri ‹malat San.Tic.A.fi. - - 4,578,252 -<br />
‹hlas Sigorta A.fi. 3,550,000 - 2,645,647 -<br />
Kristal Kola ve Meflrubat San.Tic.A.fi 2,000,000 - 2,276,805 -<br />
Bisiklet Pazarlama San.ve Tic.A.fi. 305,000 - - -<br />
Bisan Bisiklet Moped Oto.San.Tic.A.fi. 450,000 - - -<br />
TOTAL 150,095,430 40,740,758 155,025,158 40,740,758<br />
16- Total amount of insurance purchased for assets:<br />
The total amount of insurance purchased for the Parent Company’s and the Group’s assets:<br />
Parent Company and Subsidiaries 12/<strong>2004</strong> 12/2003<br />
1 ‹hlas Holding A.fi. 57,093,806 56,098,398<br />
2 ‹hlas Matb. Gazt. Yay. San. ve Tic.A.fi - 11,519,991<br />
3 ‹hlas Gazetecilik A.fi. 30,506,457 -<br />
4 ‹hlas Kargo A.fi. 881,692 -<br />
5 ‹hlas Ev Aletleri ‹malat San.Tic.A.fi. 20,000,000 20,485,550<br />
6 ‹hlas Pazarlama A.fi 32,400,000 4,952,050<br />
7 ‹hlas Sigorta A.fi. 5,196,483 7,275,265<br />
8 ‹hlas Haber Ajans› A.fi 794,385 4,396,839<br />
9 Kristal Kola ve Meflrubat San.Tic. A.fi. 11,851,255 11,697,084<br />
10 Repafl Medya Rek. Prod. Bas. Hiz. A.fi 103,248 611<br />
11 Kuzuluk Kapl.Sa¤. ve Petr.Ür.Tic. A.fi 3,150,000 21,399<br />
12 ‹hlas Net A.fi - -<br />
13 Kristal G›da Da¤. ve Paz.Tic.A.fi 313,201 244,816<br />
14 ‹hlas Yay›n Holding A.fi - -<br />
15 ‹hlas E¤itim A.fi - -<br />
16 Bisiklet Pazarlama San.Ve Tic.A.fi. 207,372 -<br />
17 Bisan Bisiklet Otomotiv Üretim San.Tic.afl 11,240,351 -<br />
18 Huzur Radyo TV A.fi. (TGRT) 1,775,448 -<br />
TOTAL 175,513,698 116,692,003
17- Mortgages and other securities received for amounts receivable:<br />
12/<strong>2004</strong> 12/2003<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2004</strong><br />
Client Type of Security TRY USD EURO TRY USD<br />
Diverse Letter of Guarantee 970,250 - 150,000 935,937 -<br />
Diverse Mortgage 12,938,338 - - 10,750,901 -<br />
Diverse Checks and Bills Payable 1,366,080 18,824,000 - - 18,801,000<br />
Diverse Other 209,142 - - 85,232 -<br />
TOTAL 15,483,810 18,824,000 150,000 11,772,070 18,801,000<br />
18- Off-balance sheet commitments:<br />
The mortgages recognized in the off-balance sheet commitments of the Parent Company and the Group are illustrated<br />
in Footnote No. 15 to the balance sheet. Other commitments are detailed in the following table:<br />
12/<strong>2004</strong> 12/2003<br />
TRY USD Euro TRY USD Euro<br />
Letters of Guarantee Given 8,960,063 400,000 150,000 7,595,773 268,200 -<br />
Checks, Bills Payable<br />
and Other Guarantees<br />
57,888,644 33,855,707 9,524,569 47,368,589 123,568,703 2,000,000<br />
TOTAL 66,848,707 34,255,707 9,674,569 54,964,362 123,836,903 2,000,000<br />
19- Blocked bank deposit accounts:<br />
Current Year:<br />
The Company had its two separate time deposit accounts, with balances USD 8,000,000 and USD 16,500,000, respectively,<br />
with HSBC Bank’s London Branch, blocked as security against the loans extended by HSBC Bank to the<br />
Group companies ‹hlas Pazarlama A.fi. and ‹hlas Gazetecilik A.fi. The Company had its two separate time deposit<br />
accounts, with balances USD 15,000,000 and USD 2,000,000 with Denizbank’s Vienna Branch, blocked as security<br />
against the loans extended by Denizbank to the Group companies ‹hlas Pazarlama A.fi. and ‹hlas Gazetecilik A.fi.<br />
The Company had its time deposit account, with a balance USD 9,000,000 with Banque Du Bosphore, blocked as<br />
security against the loan extended by Banque Du Bosphore to ‹hlas Gazetecilik A.fi.<br />
The Company had its time deposit account, with a balance USD 6,000,000 with Garanti Bankas›-Malta Branch,<br />
blocked as security against the loans extended by Garanti Bankas›-Malta Branch to ‹hlas Pazarlama A.fi.<br />
The Company had its time deposit account, with a balance USD 7,000,000 with ‹fl Bankas›-Bak›rköy Branch, blocked<br />
as security against the loans extended by ‹fl Bankas›-Bahrain Branch to ‹hlas Pazarlama A.fi.<br />
The time deposit account of Kristal Kola A.fi., a Group company, with a balance USD 6,000,000 with Denizbank<br />
AG-Vienna Branch is blocked as security against the loans extended to ‹hlas Ev aletleri A.fi..<br />
The time deposit accounts of Kristal Kola A.fi. with balances USD 1,500,000 and EURO 1,200,000, respectively,<br />
with Denizbank AG-Vienna Branch are blocked as security against the loans extended to Kristal G›da Da¤. Paz. A.fi.<br />
87
88<br />
Previous Year:<br />
The Company had its two separate time deposit accounts, with balances USD 8,000,000, USD 5,000,000 and USD<br />
11,500,000, respectively, with HSBC Bank’s London Branch, blocked as security against the loans extended by HSBC<br />
Bank to the Group companies ‹hlas Gazetecilik A.fi., ‹hlas Pazarlama A.fi. and ‹hlas Matbaac›l›k Gazetecilik Yay›nc›l›k<br />
Sanayi ve Ticaret A.fi.<br />
The Company had its time deposit accounts, with balances USD 10,000,000, USD 5,000,000 and USD 2,000,000<br />
with Denizbank-Vienna Branch, blocked as security against the loans extended by Denizbank to the Group companies<br />
‹hlas Matbaac›l›k Gazetecilik Yay›nc›l›k San. ve Tic. A.fi., ‹hlas Pazarlama A.fi. ve ‹hlas Gazetecilik A.fi.<br />
The Company had its time deposit account, with a balance USD 700,000 with Denizbank-Bak›rköy Branch, blocked<br />
as security against the loan extended by Denizbank to Huzur Radyo TV A.fi. Additionally, the Company’s time<br />
deposit account with a balance USD 166,059 with Denizbank-Bak›rköy Branch is also blocked.<br />
The time deposit account of Kristal Kola A.fi., a Group company, with a balance USD 6,000,000 with Denizbank<br />
AG-Vienna Branch is blocked as security against the loans extended to ‹hlas Ev aletleri A.fi..<br />
The time deposit accounts of Kristal Kola A.fi. with balances USD 1,500,000 and EURO 1,200,000, respectively,<br />
with Denizbank AG-Vienna Branch are blocked as security against the loans extended to Kristal G›da Da¤. Paz. A.fi.<br />
20- Stock exchange prices of marketable securities and financial long term assets illustrated at their<br />
cost values on the balance sheet; cost values of marketable securities and financial long term assets<br />
illustrated at their stock exchange prices on the balance sheet.<br />
Financial long term Assets:<br />
The inflation-adjusted cost value and current stock exchange price of ‹hlas Gayrimenkul Yat›r›m Ortakl›¤› A.fi. as<br />
consolidated in accordance with the equity method are as follows:<br />
Inflation-<br />
12/<strong>2004</strong><br />
Share from<br />
adjusted Impairment Adjusted Current Stock<br />
Subsidiaries Cost Value Reserve Equity Exchange Price<br />
‹hlas Gayrimenkul Yat. Ort. A.fi. 24,056,419 (16,508,437) 7,547,982 6,933,492<br />
Inflation-<br />
12/2003<br />
Share from<br />
adjusted Impairment Adjusted Current Stock<br />
Subsidiaries Cost Value Reserve Equity Exchange Price<br />
‹hlas Gayrimenkul Yat. Ort. A.fi. 24,056,419 (14,256,294) 9,800,125 8,145,500<br />
21- The total value of the securities included in the Group’s securities and marketable securities issued<br />
by the shareholders, affiliated companies and subsidiaries of the Company and the companies issuing<br />
the same : NONE (2003: None)<br />
22- Balance sheet items illustrated under the column “Other” and exceeding 20% of the respective<br />
component or 5% of the total assets:
ASSETS 12/<strong>2004</strong> 12/2003<br />
I.B. Marketable Securities<br />
4. Other Marketable Securities 5,876,020 3,110,036<br />
Type B Liquid Fund 5,876,020 3,110,036<br />
I.F.- Other Current Assets 29,641,800 138,609,548<br />
Prepaid Tax 1,970,560 1,536,715<br />
VAT Carried Forward 1,039,474 258,913<br />
Advances Paid to Supliers 18,117,631 12,873,707<br />
Accrued Income 1,566,727 1,671,554<br />
Expenses Due in Coming Months 4,114,134 421,722<br />
Ongoing Construction 2,017,402 121,562,478<br />
Other 815,872 284,459<br />
II.E.- Intangible Long Term Assets<br />
4-. Intangible Long Term Assets 7,139,441 2,733,723<br />
Special Costs and Computer. Progs. 7,139,441 2,733,723<br />
F.- Other Long Term Assets 36,906,995 28,159,373<br />
Ongoing Construction 35,290,305 27,960,865<br />
Other 1,616,690 198,508<br />
LIABILITIES<br />
C.- Other Short Term Liabilities<br />
7-. Other Short-Term Liabilities 10,055,329 1,142,885<br />
Due to Personel 4,093,042 604,143<br />
Expense Accruals 790,847 -<br />
Revenues Due in Coming Months 5,140,490 -<br />
Other 30,950 538,742<br />
E.- Provision for Debts & Expenses<br />
2-. Other Provision for Debts & Expenses 25,095,077 38,323,540<br />
Legal Claims 4,912,193 3,822,729<br />
Current Risks (insurer) 12,486,340 10,084,607<br />
Suspended Damages (insurer) 6,499,002 5,524,925<br />
Earthquake Damages (insurer) 702,999 707,882<br />
Expense Accruals - 221,400<br />
Life - Mathematics - 7,202,644<br />
Life - Profit Share - 10,316,609<br />
Life - Suspended Damages - 28,432<br />
Other 494,543 414,312<br />
II.B.- Trade Payables<br />
7-. Other Trade Payables 4,715,036 9,119,758<br />
Advances Repaid at Armutlu 4,715,036 9,119,758<br />
E.- Provisions for Debts and Expenses<br />
2-. Other Provisions for Debts and Expenses 24,901,186 13,979,679<br />
Revenues Due in Coming Months 24,374,214 13,558,525<br />
Provisions for Guarantees 266,454 420,789<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2004</strong><br />
Other 260,518 365<br />
89
90<br />
STATEMENT OF INCOME<br />
F. Income & Profit on Other Operations<br />
12/<strong>2004</strong> 12/2003<br />
4. Other Operating Income & Profit 68,203,188 67,237,542<br />
Provisions No Longer required 10,138 -<br />
Profit on Sale of Marketable Securities 7,570,354 2,505,651<br />
Profit on FX Translations 56,056,076 61,672,258<br />
Interest 2,225,766 315,130<br />
Sales and Rentals (Insurers) 1,052,385 1,026,011<br />
Negative Goodwill Depreciation 28,153 -<br />
Other 1,260,316 1,718,491<br />
G.- Expenses & Losses on Other Operations (46,430,757) (42,989,586)<br />
Provisions (3,076,386) -<br />
Rediscount Interest Expense (4,183,919) (3,296,214)<br />
Loss on Sale of Marketable Securities (81,664) (1,708,308)<br />
Loss on FX Translations (26,622,308) (32,910,071)<br />
Sales Expenses (Insurers) (930,165) (199,507)<br />
Provision for Impairment in Subsidiaries - (971,934)<br />
Goodwill Depreciation (9,754,754) (3,563,484)<br />
Other<br />
I.- Extraordinary Income and Profit<br />
(1,781,561) (340,067)<br />
3.- Other Extraordinary Income and Profit 13,835,949 13,044,610<br />
Sales of Fixtures, Damages, etc, Collected 3,395,063 4,766,109<br />
Sales of affiliated companies 262,440 2,022,749<br />
Tax Write-off Cancellation - 1,319,736<br />
Debts Discounted by SDIF (*) 9,515,563 -<br />
Deleted in Fixed Asset Revaluation Fund - 4,075,591<br />
Other<br />
J.- Ola¤anüstü Gider ve Zararlar<br />
662,883 860,425<br />
3.- Extraordinary Expense & Loss (8,388,327) (8,504,108)<br />
Sales of Fixtures (3,239,015) (2,534,130)<br />
Donation, Late Payments and Mot. Veh. Tax - (3,470,431)<br />
Provision for Claims Against Company (2,028,785) (1,311,985)<br />
Other (3,120,527) (1,187,562)<br />
(*) Discounted amounts that the Group companies, who owned to Savings Deposit Insurance Fund (SDIF), benefitted<br />
from the discount campaign launched by SDIF Funds Board’s Decisions No. 256 and 297 dated 25.05.<strong>2004</strong><br />
and 11.06.<strong>2004</strong>, respectively.<br />
23- Advances paid to personnel and payables to personnel included in the accounts “Other Receivables”<br />
or “Other Short and Long-term Liabilities” exceeding 1% of the total assets.: NONE (2003: None)<br />
24- Doubtful receivables from shareholders, subsidiaries and affiliated companies and debtors thereof:<br />
The Company has allocated provisions for the doubtful amount of TRY 2,102,731 (2003: TRY 2,393,749) due from<br />
its subsidiary Bur-Yal Bursa Yalova Enerji Da¤›t›m Limited fiirketi. Since this subsidiary is not active, a provision for<br />
the whole amount of investment has been allocated and not included in the consolidation for that reason.<br />
25- Doubtful receivables provision allocated for receivables due and non-due:<br />
12/<strong>2004</strong> 12/2003<br />
Provision for receivables due 36,076,046 36,907,116<br />
Provision for receivables non-due 596,254 470,660<br />
TOTAL 36,672,300 37,377,776
<strong>Annual</strong> <strong>Report</strong> <strong>2004</strong><br />
26- Affiliated companies and subsidiaries in which the Company owns direct capital and management<br />
control, breakdown of companies included in the affiliated companies and subsidiaries accounts<br />
together with amounts and percentages of capital investments, the current year’s profit and loss and<br />
the net profit illustrated in the latest financial statements of such companies, whether or not their financial<br />
statement conform with our audit standards or are audited by independent auditors, the method<br />
of audit applied and whether their results are positive, negative or contingent:<br />
a) Current Year<br />
Consolidated<br />
Subsidiaries<br />
Inflation<br />
Share<br />
Adjusted Value<br />
Held of Affiliated<br />
% companies<br />
Inflation<br />
Adjusted<br />
Profit/Loss<br />
for Year<br />
Inflation<br />
Adjusted<br />
Net<br />
Profit/Loss<br />
for Year<br />
Independetly<br />
Independent<br />
Auditor’s <strong>Report</strong><br />
‹hlas Gazetecilik A.fi. 95.60<br />
Eliminated in<br />
Consolidation<br />
(6,160,273) (6,160,273) Audited None.<br />
‹hlas Huzur Kargo A.fi 52.36<br />
Eliminated in<br />
Consolidation<br />
1,381,837 1,381,837 Audited None.<br />
‹hlas Ev Aletleri<br />
‹malat San.Tic.A.fi.<br />
37.07<br />
Eliminated in<br />
Consolidation<br />
2,792,595 2,087,546 Audited Positive (*)<br />
‹hlas Pazarlama A.fi 98.18<br />
Eliminated in<br />
Consolidation<br />
27,885,547 27,525,593 Audited None.<br />
‹hlas Sigorta A.fi. 95.03<br />
Eliminated in<br />
Consolidation<br />
341,470 341,470 Audited Positive (**)<br />
‹hlas Haber Ajans› A.fi 97.49<br />
Eliminated in<br />
Consolidation<br />
1,769,948 1,624,858 Audited None.<br />
‹hlas Yay›n Holding A.fi. 97.90<br />
Eliminated in<br />
Consolidation<br />
(31,922,073) (31,951,944) Audited None.<br />
Kristal Kola ve<br />
Meflrubat San.Tic.A.fi<br />
45.71<br />
Eliminated in<br />
Consolidation<br />
(3,863,682) (3,863,682) Audited Positive (*)<br />
Repafl Medya Rek.<br />
Prod. Bas. Hiz.A.fi<br />
96.72<br />
Eliminated in<br />
Consolidation<br />
(94,486) (94,486) Audited None.<br />
Kuzuluk Kapl.Sa¤.<br />
ve Petr.Ür.Tic.A.fi<br />
96.97<br />
Eliminated in<br />
Consolidation<br />
1,674,694 1,670,888 Audited None.<br />
‹hlas Net A.fi 99.87<br />
Eliminated in<br />
Consolidation<br />
(1,155,316) (1,155,316) Audited None.<br />
Kristal G›da Da¤.<br />
ve Paz.Tic.A.fi<br />
49.90 Eliminated in<br />
Consolidation<br />
148,318 148,318 Audited None.<br />
‹hlas E¤itim A.fi 66.49<br />
Eliminated in<br />
Consolidation<br />
(259,187) (259,187) Audited None.<br />
‹hlas Medikal Ür.<br />
ve Sa¤l›k Hiz.A.fi<br />
94.62<br />
Eliminated in<br />
Consolidation<br />
(129,205) (132,351) Audited None.<br />
Huzur Radyo TV A.fi.<br />
(TGRT)<br />
55.31<br />
Eliminated in<br />
Consolidation<br />
(267,644) (490,109) Audited None.<br />
TGRT Haber TV A.fi. 93.01<br />
Eliminated in<br />
Consolidation<br />
(507,902) (507,902) Audited None.<br />
TGRT Dijital TV A.fi. 93.01<br />
Eliminated in<br />
Consolidation<br />
446 299 Audited None.<br />
Bisan Bisiklet Otomotiv<br />
Ürt. San. Tic. A.fi.<br />
93.26<br />
Eliminated in<br />
Consolidation<br />
(4,259,350) (4,259,350) Audited None.<br />
Bisiklet Pazarlama .<br />
ve Tic. A.fi<br />
98.17<br />
Eliminated in<br />
Consolidation<br />
(4,539,587) (4,539,587) Audited None.<br />
Ege Mosan<br />
Motorlu Araçlar A.fi.<br />
93.37<br />
Eliminated in<br />
Consolidation<br />
(3,504,434) (3,504,434) Audited None.<br />
‹letiflim Magazin<br />
Gazt. Tic. A.fi<br />
50.66<br />
Eliminated in<br />
Consolidation<br />
(85,156) (94,752) Audited None.<br />
K›br›s Bürosu 100.00<br />
Eliminated in<br />
Consolidation<br />
7,863 6,976 Audited None.<br />
91
92<br />
Consolidated<br />
Affiliated<br />
Companies<br />
‹hlas Gayrimenkul<br />
Yat.Ort.A.fi<br />
30.58 24,056,419 (16,508,437) (9,395,128) (9,395,128) Audited Contingen (***)<br />
‹hlas Genel Antrep.<br />
41.43<br />
Nakliyat ve Tic.A.fi<br />
995,812 (135,879) 79,139 54,037 Audited None.<br />
‹hlas Yap› Turizm<br />
ve Sa¤l›k A.fi<br />
20.00 39,801 (39,801) 222,480 218,620 Audited None.<br />
‹hlas Tarsan<br />
Iml.San.Tic.A.fi<br />
20.00 524,753 (524,753) 3,418,375 3,418,375 Audited None.<br />
‹hlas Fuar<br />
Hizmetleri A.fi<br />
22.00 208,058 (208,058) (104,242) (113,368) Audited None.<br />
(*) Since the companies ‹hlas Ev Aletleri ‹malat San. ve Tic. A.fi. and Kristal Kola ve Meflrubat San. Tic. A.fi. are<br />
publicly traded, the indenpendent audit reports dated 31.12.<strong>2004</strong> were prepared for these companies. The other<br />
subsidiaries have been audited for consolidation purposes and no separate independent audit reports were prepared<br />
for them.<br />
(**) The financial statements of ‹hlas Sigorta A.fi. dated 31.12.<strong>2004</strong> were audited by another auditor in accordance<br />
with the legislation on insurance companies and a favorable opinion was provided.<br />
(***) Since ‹hlas Gayrimenkul Yat. Ort. A.fi is a publicly traded one, the indenpendent audit reports dated<br />
31.12.<strong>2004</strong> were prepared for this company and a qualified opinion was stated therein. The company reflected a<br />
loss of TRY 25,083,226 in its 31.12.<strong>2004</strong> financial statement, and stated in the footnotes that the TRY 15,688,098 portion<br />
of the said loss belonged to previous years. Since the said expense of previous years were reflected to the Group’s<br />
31.12.2003 consolidated financial statements, the current year loss amount of the named associate has been<br />
reflected as TRY 9,395,128 to the Group’s consolidation.<br />
Non-Consolidated<br />
Subsidiaries<br />
‹hlas Motor<br />
Limited fiirketi<br />
Bursa Yalova Enerji<br />
Da¤›t›m Ltd.fiti<br />
‹hlas G›da Ürt<br />
ve Tic. A.fi<br />
Tasfiye Halinde<br />
‹hlas Finans A.fi<br />
‹hlas Motor<br />
Sehimdar Cemiyeti<br />
Eko Enerji Ür.<br />
Da¤›t›m ve Tic.A.fi<br />
Kia ‹hlas Motor<br />
San ve Tic. A.fi.<br />
Share<br />
Held<br />
%<br />
Inflation<br />
Adjusted<br />
Value of<br />
Affiliated<br />
companies<br />
Share<br />
Held<br />
%<br />
Provision Allocated<br />
for<br />
Impairment<br />
in Affiliated<br />
Companies<br />
in Balance<br />
Sheet<br />
Value of Associate<br />
Not<br />
Adjusted for<br />
Inflation<br />
Millions TRY<br />
Inflation<br />
Adjusted<br />
Profit/Loss<br />
for Year<br />
Inflation<br />
Adjusted<br />
Net<br />
Profit/Loss<br />
for Year<br />
Provision<br />
Capital Allocated for<br />
Commitment Impairment in<br />
to Affiliated Affiliated<br />
Companies Companies in BS<br />
Independetly<br />
Profit/<br />
Loss for<br />
the Year<br />
Independent<br />
Auditor’s<br />
<strong>Report</strong><br />
Net Profit/<br />
Loss for<br />
the Year<br />
98.64 25,000 - - (2,469) (2,469)<br />
97.91 176,000 (72,000) (104,000) (532,775) (532,775)<br />
62.49 2,000,000 (1,983,718) - (3,563) (3,563)<br />
50.27 5,032,962 - (5,032,962) (49,000) (49,000)<br />
95.64 115,860 - - (334,277) (334,277)<br />
89.57 631,697 - (631,697) (315,488) (315,488)<br />
53.95 2,067,000 (2,067,000) (1,191) (1,191)
Non-Consolidated<br />
Affiliated Companies<br />
‹hlas Kimya San. Ltd.fiti 20.00 200 - (200) - -<br />
‹hlas Oxford Mortgage.<br />
‹nfl.ve Tic A.fi<br />
48.00 72,000 (72,000) (3,640) (3,640)<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2004</strong><br />
Yay-sat A.fi 24.86 860,000 - - (183,448) (183,448)<br />
Do¤u Yat›r›m<br />
Holding<br />
1,.45 12,500 - - (89,351) (89,351)<br />
The reasons why the above listed subsidiaries and affiliated companies have not been included in the consolidation<br />
are given Note 34-d) hereof.<br />
Previous Year:<br />
Consolidated<br />
Subsidiaries<br />
Value of<br />
Associate Not<br />
Adjusted for<br />
Share Inflation<br />
Held % Millions TRY<br />
Share<br />
Held<br />
%<br />
Current<br />
Year’s Current<br />
Value of Profit /Loss Year’s Net<br />
Investment Adjusted Profit /Loss<br />
Adjusted for for Adjusted for<br />
Inflation Inflation Inflation<br />
Provision<br />
Capital Allocated for Impa-<br />
Commitment irment in Affiliated<br />
to Affiliated Companies in<br />
Companies Balance Sheet<br />
Independetly<br />
Profit/<br />
Loss for<br />
the Year<br />
Net Profit/<br />
Loss for<br />
the Year<br />
Independent<br />
Audit <strong>Report</strong><br />
‹hlas Matb. Gazt. Yay.<br />
San. ve Tic.A.fi<br />
99.89<br />
Eliminated in<br />
Consolidation<br />
8,818,678 8,818,678 Audited None.<br />
‹hlas Gazetecilik A.fi. 96.99<br />
Eliminated in<br />
(22.404,197)<br />
Consolidation<br />
(22,404,197) Audited None.<br />
‹hlas Hayat Sigorta A.fi 94.22<br />
Eliminated in<br />
Consolidation<br />
1,355,484 1,100,731 Audited None.<br />
‹hlas Ev Aletleri<br />
‹malat San.Tic.A.fi.<br />
63.61<br />
Eliminated in<br />
Consolidation<br />
1,866,774 1,054,534 Audited Unqualifed (*)<br />
‹hlas Paz. ve Ma¤az.<br />
‹fllet. ve Tic.A.fi<br />
52.00<br />
Eliminated in<br />
Consolidation<br />
2,056,397 1,690,509 Audited None.<br />
‹hlas Sigorta A.fi. 95.15<br />
Eliminated in<br />
Consolidation<br />
(1,160,465) (1,160,465) Audited Unqualifed (**)<br />
‹hlas Haber Ajans› A.fi 98.43<br />
Eliminated in<br />
Consolidation<br />
1,288,601 734,016 Audited None.<br />
‹hlas Yay›n Holding A.fi. 9.99<br />
Eliminated in<br />
(33,096,739)<br />
Consolidation<br />
(33,129,638) Audited None.<br />
Kristal Kola ve<br />
Meflrubat San.Tic.A.fi.<br />
49.62<br />
Eliminated in<br />
Consolidation<br />
(2,302,138) (2,354,168) Audited Unqualifed (*)<br />
Repafl Medya Rek.<br />
Prod. Bas. Hiz.A.fi<br />
97.74<br />
Eliminated in<br />
Consolidation<br />
(1,096,294) (1,096,294) Audited None.<br />
Kuzuluk Kapl.Sa¤.<br />
ve Petr.Ür.Tic.A.fi<br />
98.31<br />
Eliminated in<br />
Consolidation<br />
(679,542) (679,542) Audited None.<br />
‹hlas Net A.fi 99.88<br />
Eliminated in<br />
Consolidation<br />
(636,769) (636,769) Audited None.<br />
Kristal G›da Da¤.<br />
ve Paz.Tic.A.fi<br />
50.42<br />
Eliminated in<br />
Consolidation<br />
(2,602,777) (2,602,777) Audited None.<br />
‹hlas E¤itim A.fi 64.35<br />
Eliminated in<br />
Consolidation<br />
(6,630) (6,630) Audited None.<br />
K›br›s Bürosu 100,00<br />
Eliminated in<br />
Consolidation<br />
(69,291) (69,291) Unaudited None.<br />
93
94<br />
Consolidated<br />
Affiliated<br />
Companies<br />
‹hlas Gayrimenkul 30.58 24,056,419 (15,910,919) (1,768,062) (1,768,062) Audited Qualified (***)<br />
Yat.Ort.A.fi<br />
Huzur Radyo TV A.fi. 36.03 92,498,022 (92,427,872) (1,209,548) (1,209,548) Audited None.<br />
‹hlas Genel Ant.<br />
Nakl. ve Tic.A.fi.<br />
41.43 995,812 (168,667) (84,041) (84,041) Audited None.<br />
‹hlas Yap› A.fi 20.00 39,801 (39,801) (747,813) (747,813) Audited None.<br />
‹hlas Tarsan<br />
Iml.San.Tic.A.fi<br />
‹hlas Medikal Ür.<br />
ve Sa¤l›k Hiz.A.fi<br />
‹hlas Fuar<br />
Hizmetleri A.fi<br />
Value of<br />
Allocated for<br />
Impairment<br />
Share Investment in Affiliated<br />
Held Adjusted Companies in<br />
% for Inflation Balance Sheet<br />
Provision<br />
Current<br />
Year’s Profit<br />
/Loss<br />
Adjusted for<br />
Inflation<br />
Current<br />
Year’s Net<br />
Profit /Loss<br />
Adjusted for<br />
Inflation<br />
Independetly<br />
Independent<br />
Audit <strong>Report</strong><br />
20.00 524,753 (524,753) 1,532,370 1,532,370 Audited None.<br />
20.00 205,689 (205,689) (374,827) (374,827) Audited None.<br />
22.00 208,059 (208,059) (201,224) (201,224) Audited None.<br />
(*) Since the companies ‹hlas Ev Aletleri ‹malat San. ve Tic. A.fi. and Kristal Kola ve Meflrubat San. Tic. A.fi. are<br />
publicly traded, the indenpendent audit reports dated 31.12.2003 were prepared for these companies. The other<br />
subsidiaries have been audited for consolidation purposes and no separate independent audit reports were prepared<br />
for them.<br />
(**) The financial statements of ‹hlas Sigorta A.fi. dated 31.12.2003 were audited by another auditor in accordance<br />
with the legislation on insurance companies and a favorable opinion was provided.<br />
(***) Since ‹hlas Gayrimenkul Yat. Ort. A.fi is a publicly traded one, the indenpendent audit reports dated<br />
31.12.2003 were prepared for this company and a qualified opinion was stated therein. However, the financial statements<br />
of this company were adjusted in line with the said qualified opinion prior to being included in the consolidation<br />
and, after being rendered free of such qualified opinion, they were included in the consolidation. The other<br />
affiliated companies have been audited for consolidation purposes, but no separate independent audit reports were<br />
prepared for them.
Consolidated<br />
Subsidiaries<br />
‹hlas Motor<br />
Limited fiirketi<br />
Bursa Yalova<br />
Enerji Da¤. Ltd.fiti<br />
99.92 28,460 - - (11,410) (11,410) Unaudited<br />
97.94 200,359 (81,965) (118,394) (4,556) (4,556) Unaudited<br />
Klas D›fl Tic. A.fi 50.64 28,460 - 0 10,673 10,673 Unaudited<br />
Tasfiye Halinde<br />
‹hlas Finans A.fi<br />
‹hlas Motor<br />
Sehimdar Cemiyeti<br />
Eko Enerji Ür.<br />
Da¤›t›m ve Tic.A.fi<br />
Kia ‹hlas Motor<br />
San ve Tic. A.fi<br />
Non-Consolidated<br />
Affiliated companies<br />
‹hlas Kimya<br />
San. Ltd.fiti<br />
50.27 5,729,536 - (5,729,536) (428) (428) Unaudited<br />
95.94 131,895 - 0 (24,888) (24,888) Unaudited<br />
89.68 719,125 - (719,125) (7,836) (7,836) Unaudited<br />
53.95 2,353,078 (2,353,078) 0 (496) (496) Unaudited<br />
20.00 228 - (228) - - Unaudited<br />
Yay-sat A.fi 24.92 979,026 - - (451,990) (451,990) Unaudited<br />
Do¤u Yat›r›m<br />
Holding<br />
Value of Investment<br />
Capital<br />
Commitment<br />
to<br />
Affiliated<br />
Shares Adjusted for<br />
Held Inflation<br />
% Million TL Companies<br />
Provision<br />
Allocated for<br />
Impairment<br />
in Affiliated<br />
Companies in<br />
Consolidated<br />
Balance Sheet<br />
Profit/Loss<br />
for Current<br />
Year<br />
Net<br />
Profit/<br />
Loss for<br />
Current<br />
Year<br />
1.45 14,230 - - (25,814) (25,814) Unaudited<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2004</strong><br />
Audit<br />
95
96<br />
27- Bonus shares received as a result of internally funded capital increases in affiliated companies<br />
and subsidiaries:<br />
According to the statutory records, the non-inflation adjusted bonus share certificates received as a result of internally<br />
funded capital increases are as follows:<br />
12/<strong>2004</strong> (TRY) 12/2003 (TRY)<br />
Subsidiaries and affiliated companies Included Amount of BonusShare Amount of BonusShare<br />
in Consolidation Certificates Received Certificates Received<br />
Kristal Kola ve Meflrubat Sanayi Tic.A.fi. 3,039,410 3,460,071<br />
‹hlas Ev Aletleri ‹malat Sanayi ve Tic.A.fi. 1,616,427 1,840,144<br />
‹hlas Haber Ajans› A.fi. 3,805 4,332<br />
‹hlas Sigorta A.fi. 1,274,500 1,450,894<br />
‹hlas Mat. Gaz. Yay. San. ve Tic. A.fi. - 50,011,190<br />
‹hlas Pazarlama A.fi. 43,931,032 -<br />
‹hlas Gazetecilik A.fi. 5,948,829 -<br />
‹hlas Hayat Sigorta A.fi. - 116,447<br />
Kristal G›da Da¤. Ve Paz. A.fi. 12,301 14,003<br />
Repafl Medya Reklam A.fi. 26,950 30,680<br />
‹hlas Tarsan Tart› ve Ölçü Alet. Elk.Cih. A.fi. 29,265 33,315<br />
‹hlas GMYO A.fi. 531,507 605,069<br />
‹hlas Genel Antrepoculuk Nakliye ve Tic. A.fi. 78,241 89,070<br />
TOTAL 56,492,267 57,655,215<br />
The above-listed bonus share certificates received from subsidiaries and affiliated companies include in the consolidations<br />
were omitted for adjustment for inflation transactions as per Communique Serial XI/20 of the CMB.<br />
12/<strong>2004</strong> (TRY) 12/2003 (TRY)<br />
Subsidiaries and Affiliated Companies Not Amount of BonusShare Amount of BonusShare<br />
Included in Consolidation Certificates Received Certificates Received<br />
Yay-Sat A.fi. 429,733 489,209<br />
Tasfiye Halinde ‹hlas Finans Kurumu A.fi. 93,636 106,595<br />
Do¤u Yat›r›m Holding 2,468 2,810<br />
TOTAL 525,837 598,614<br />
28- Rights-in-kind, including their monetary values, on immovable assets: NONE (2003: None)<br />
29- Revaluation of long term assets over the last three years: Revaluation surplus amounts have been<br />
cancelled due to the introduction of the inflationary accounting system.
<strong>Annual</strong> <strong>Report</strong> <strong>2004</strong><br />
30- Receivables and payables denominated in foreign currencies and with no exchange rate guarantee<br />
together with itemised amounts of foreign currencies in the assets and their conversion rates to<br />
TRY:<br />
12/<strong>2004</strong> 12/2003<br />
FOREIGN FOREIGN<br />
CURRENCY EXCHANGE AMOUNT CURRENCY AMOUNT<br />
ASSETS AMOUNT RATE IN TRY AMOUNT IN TRY<br />
CASH<br />
BANKS<br />
USD 189,499 1.3421 254,327 384,028 610,228<br />
EUR 18,270 1.8268 33,376 123,178 244,705<br />
USD 73,205,528 1.3421 98,249,139 51,265,355 81,461,769<br />
GBP 3 2.5765 9 3 9<br />
EUR 1,638,309 1.8268 2,992,863 1,348,990 2,679,896<br />
JPY<br />
OTHER CURRENT ASSETS<br />
73 0.1291 1 73 1<br />
USD 171,599 1.3421 230,303 - -<br />
CUSTOMERS<br />
BILLS RECEIVABLE<br />
USD 4,204,601 1.3421 5,642,995 5,730,946 9,106,597<br />
GBP 8,000 2.5765 20,612 - -<br />
EUR 7,208,346 1.8268 13,168,206 3,143,019 6,243,904<br />
USD 6,915,000 1.3421 9,280,622 18,164,437 28,863,687<br />
EUR - - - 73,000 145,021<br />
DUE FROM SHAREHOLDERS<br />
USD<br />
OTHER RECEIVABLES<br />
755,531 1.3421 1,013,998 1,394,590 2,216,035<br />
EUR<br />
ADVANCES PAID<br />
46,000 1.8268 84,033 - -<br />
USD 1,182,374 1.3421 1,586,864 531,972 845,315<br />
GBP - - - 3,403 9,594<br />
CHF - - - 900 1,144<br />
JPY 178,330 0.1291 2,303 - -<br />
EUR 106,612 1.8268 194,759 - -<br />
ADVANCES PAID TO CONTRACTORS<br />
USD 2,613,405 1.3421 3,507,451 - -<br />
GBP 4,642 2.5765 11,960 - -<br />
EUR 531,947 1.8268 971,760 - -<br />
58,620 1.3421 78,674 - -<br />
TOTAL ASSETS 137,324,254 132,427,906<br />
97
98<br />
31/12/<strong>2004</strong> 31/12/2003<br />
FOREIGN FOREIGN<br />
CURRENCY EXCHANGE AMOUNT CURRENCY AMOUNT<br />
LIABILITIES<br />
BANK LOANS<br />
AMOUNT RATE IN TRY AMOUNT IN TRY<br />
USD 46,306,007 1.3486 62,448,281 23,376,532 37,324,972<br />
EUR<br />
PRINCIPAL AMOUNTS, INTERESTS ON LONG TERM LOANS<br />
7,581,015 1.8356 13,915,711 5,200,000 10,380,115<br />
USD 38,073,680 1.3486 51,346,164 5,265,370 8,407,140<br />
EUR<br />
SUPPLIERS<br />
68,151 1.8356 125,098 75,212 150,136<br />
USD 2,831,584 1.3486 3,818,675 5,875,984 9,382,100<br />
SEK - - - 2,847 626<br />
CHF 21,858 1.1882 25,972 2,635 3,372<br />
GBP 179,063 2.5900 463,774 161,748 458,412<br />
EUR<br />
CHECKS and BILLS PAYABLE<br />
4,159,795 1.8356 7,635,720 2,760,052 5,509,549<br />
USD 6,947,467 1.3486 9,369,354 1,259,256 2,010,636<br />
EUR 382,725 1.8356 702,531 2,041 4,074<br />
DUE TO SHAREHOLDERS<br />
USD<br />
DUE TO PERSONNEL<br />
204,858 1.3486 276,271 656,899 1,048,861<br />
USD 2,375 1.3486 3,203 - -<br />
ADVANCES RECEIVED<br />
USD 1,116,030 1.3486 1,505,078 40,544 64,736<br />
EUR<br />
LONG-TERM BANK LOANS<br />
34,812 1.8356 63,901 2,419,594 4,829,936<br />
USD 44,083,495 1.3486 59,451,001 82,854,050 132,291,866<br />
EUR 1,200,000 1.8356 2,202,720 - -<br />
OTHER FINANCIAL DEBTS<br />
USD 1,329,121 1.3486 1,792,453 - -<br />
LONG-TERM DEBTS TO SUPPLIERS<br />
EUR 2,568,662 1.8356 4,715,036 5,675,000 11,328,298<br />
TOTAL LIABILITIES 219,860,943 223,194,829<br />
31- Amount of liabilities, such as guarantees, commitments, sureties, advances and endorsements,<br />
given to third parties on behalf of shareholders, affiliated companies and subsidiaries:<br />
A major portion of these liabilities comprise sureties, as detailed below, issued to various financial institutions<br />
with respect to cash and non-cash loans.<br />
Currency 12/<strong>2004</strong> 12/2003<br />
TRY 8,424,630 12,349,528<br />
USD 24,720,231 38,268,878<br />
EUR 7,775,235 2,169,436
<strong>Annual</strong> <strong>Report</strong> <strong>2004</strong><br />
Additionally, as from the date of 31.12.<strong>2004</strong>, the Company:<br />
a) has delivered in pledge its registered temporary receipts corresponding to a nominal capital amount of TRY<br />
204,225,750 in ‹hlas Pazarlama A.fi. for the USD 400,000,000 portion of the debts owed by its Dealers to ‹hlas Finans<br />
Kurumu in Liquidation;<br />
b) has delivered to Bankekspres (SDIF) in pledge its share certificates with a nominal value of TRY 48,000 in Kristal<br />
Kola ve Meflrubat Sanayi Ticaret A,fi. as security for the loans extended to ‹hlas Holding A.fi. and ‹hlas Pazarlama A.fi.;<br />
c) has delivered to Hürriyet Gazetecilik Matbaac›l›k A.fi. in pledge its share certificates with a nominal value of<br />
TRY 230,000 in Yaysat Yay›n Sat›fl Pazarlama ve Da¤›t›m A.fi. as security for the debts and commitments of ‹hlas<br />
Gazetecilik A.fi. and Huzur Radyo TV A.fi.;<br />
d) has delivered to Halk Bank in pledge its share certificates in Kristal Kola ve Meflrubat Sanayi Ticaret A.fi. with<br />
a nominal value of TRY 2,125,000, its share certificates in ‹hlas Ev Aletleri ‹malat San. ve Tic. A.fi. with a nominal<br />
value of TRY 2,700,000 and its share certificates in ‹hlas Gayrimenkul Yat›r›m Ortakl›¤› A.fi. with a nominal value of<br />
TRY 2,215,000 as security for its own existing and future debts to the said bank;<br />
e) had its two separate time deposit accounts, with balances USD 8,000,000 and USD 16,500,000, respectively,<br />
with HSBC Bank’s London Branch, blocked as security against the loans extended by HSBC Bank to the Group companies<br />
‹hlas Gazetecilik A.fi. and ‹hlas Pazarlama A.fi., respectively;<br />
f) had its two separate time deposit accounts, with a balance USD 15,000,000 with Denizbank’s Vienna Branch,<br />
blocked as security against the loans extended by Denizbank to the Company’s associate ‹hlas Pazarlama A.fi.;<br />
g) had its time deposit account, with balances USD 9,000,000 with Denizbank’s Vienna Branch, blocked as security<br />
against the loans extended by Denizbank to the Group company ‹hlas Gazetecilik A.fi.;<br />
h) had its time deposit account, with a balance USD 6,000,000 with Garanti Bank-Malta Branch, blocked as security<br />
against the loan extended by Garanti Bank to ‹hlas Pazarlama A.fi.;<br />
i) had its time deposit account, with a balance USD 2,000,000 with Denizbank’s Vienna Branch, blocked as security<br />
against the loans extended by Denizbank to ‹hlas Gazetecilik A.fi.;<br />
j) has delivered to Emlak Bankas› A.fi. ›n Liquidation in pledge its share certificates with a nominal value of TRY<br />
6,000,000 in Kristal Kola ve Meflrubat Sanayi Ticaret A.fi. as security for its own debts to the bank;<br />
k) Kristal Kola ve Meflrubat Sanayi Ticaret A.fi., one of the Company’s subsidiaries, had its time deposit account<br />
with a balance USD 6,000,000 with Denizbank AG-Vienna Branch blocked to the benefit of the bank as security for<br />
the loans extended to ‹hlas Ev aletleri A.fi., and also had its time deposit accounts with balances USD 1,500,000 and<br />
EURO 1,200.00 with Denizbank AG-Vienna Branch blocked to the benefit of the bank as security for the loans extended<br />
to Kristal G›da Da¤.Paz.A.fi.;<br />
l) The Company again had its time deposit account, with a balance USD 7,000,000 with ‹fl Bankas›-Bak›rköy<br />
Branch, blocked as security against the loans extended by ‹fl Bankas›-Bahrain Branch to ‹hlas Pazarlama A.fi.<br />
Previous Year:<br />
The Company:<br />
a) has delivered in pledge its registered temporary receipts corresponding to a nominal capital amount of TRY<br />
115,094,902 in ‹hlas Matbaac›l›k Gazetecilik Yay›nc›l›k San. ve Tic. A.fi. for the USD 400,000,000 portion of the debts<br />
owed by its Dealers to ‹hlas Finans Kurumu in Liquidation;<br />
b) has delivered to Bankekspres (SDIF) in pledge its share certificates with a nominal value of TRY 546,240 in Kristal<br />
Kola ve Meflrubat Sanayi Ticaret A.fi. as security for the loans extended to ‹hlas Holding A.fi. and ‹hlas Matbaac›l›k<br />
Gazetecilik Yay›nc›l›k Sanayi ve Ticaret A.fi.;<br />
c) has delivered to Hürriyet Gazetecilik Matbaac›l›k A.fi. in pledge its share certificates with a nominal value of<br />
TRY 261,740 in Yaysat Yay›n Sat›fl Pazarlama ve Da¤›t›m A.fi. as security for the debts and commitments of ‹hlas<br />
Gazetecilik A.fi. and Huzur Radyo TV A.fi.;<br />
d) has delivered to Halk Bank in pledge its share certificates in Kristal Kola ve Meflrubat Sanayi Ticaret A.fi. with<br />
a nominal value of TRY 4,694,250, its share certificates in ‹hlas Ev Aletleri ‹malat San. ve Tic. A.fi. with a nominal<br />
value of TRY 2,048,400 and its share certificates in ‹hlas Gayrimenkul Yat›r›m Ortakl›¤› A.fi. with a nominal value of<br />
TRY 836,430 as security for its own existing and future debts to the said bank;<br />
99
100<br />
e) had its separate time deposit accounts, with balances USD 8,000,000, USD 5,000,000 and USD 11,500,000, with<br />
HSBC Bank’s London Branch, blocked as security against the loans extended by HSBC Bank to the Group companies<br />
‹hlas Gazetecilik A.fi., ‹hlas Pazarlama A.fi. and ‹hlas Matbaac›l›k Gazetecilik Yay›nc›l›k Sanayi ve Ticaret A.fi.,<br />
respectively;<br />
f) has delivered to Giriflim Faktoring A.fi. in pledge a portion of its share certificates in ‹hlas Ev Aletleri ‹malat Sanayi<br />
ve Ticaret A.fi. with a nominal value of TRY 2.048.400 as security for the existing and future debts of ‹hlas Matbaac›l›k<br />
Gazetecilik Yay›nc›l›k Sanayi ve Ticaret A.fi. and ‹hlas Gazetecilik A.fi. to Giriflim Faktoring A.fi.;<br />
g) had its time deposit account, with a balance USD 10,000,000 with Denizbank’s Vienna Branch, blocked as security<br />
against the loans extended by Denizbank to the Group’s associate company ‹hlas Matbaac›l›k Gazetecilik Yay›nc›l›k<br />
Sanayi ve Ticaret A.fi.;<br />
h) had its time deposit account, with a balance USD 5,000,000 with Denizbank’s Vienna Branch, blocked as security<br />
against the loans extended by Denizbank to ‹hlas Pazarlama A.fi.;<br />
i) had its time deposit account, with a balance USD 700,000 with Denizbank-Bak›rköy Branch, blocked as security<br />
against the loans used by Huzur Radyo TV A.fi. under the guarantee of Denizbank.<br />
j) had its time deposit account, with a balance USD 2,000,000 with Denizbank’s Vienna Branch, blocked as security<br />
against the loans extended by Denizbank to ‹hlas Gazetecilik A.fi.;<br />
k) has delivered to Emlak Bankas› A.fi. in Liquidation in pledge its share certificates with a nominal value of TRY<br />
6,000,000 in Kristal Kola ve Meflrubat Sanayi Ticaret A.fi. as security for its own debts to the bank;<br />
l) Kristal Kola ve Meflrubat Sanayi Ticaret A.fi., one of the Company’s subsidiaries, had its time deposit account<br />
with a balance USD 6,000,000 with Denizbank AG-Vienna Branch blocked to the benefit of the bank as security for<br />
the loans extended to ‹hlas Ev aletleri A.fi., and also had its time deposit accounts with balances USD 1,500,000 and<br />
EURO 1,200,000 with Denizbank AG-Vienna Branch blocked to the benefit of the bank as security for the loans extended<br />
to Kristal G›da Da¤.Paz.A.fi.;<br />
32- Average number of staff members working for the Company during the year based on their categories:<br />
The total number staff members of the Group is 3,311 (2003: 2,376), 751 (2003:779) of which are employed in the<br />
Parent Company.<br />
33- Other material events that significatryy affect the financial statements or that should be disclosed<br />
to ensure that the financial statements are clear, construable and understandable:<br />
a) The Company has, as of 31 December <strong>2004</strong>, delivered and invoiced 11,493 units, corresponding to 40%, of the<br />
Time-Share Project, 99% of which has been completed for a cost of TRY 148,223,907 and the cost of which the Company<br />
has posted from the account Other Current Assets to the account Inventories (total amount invoiced: TRY<br />
82,724,904; total cost of the units delivered: TRY 58,905,155; the cost illustrated in the Inventories account after invoicing:<br />
TRY 89,318,751). The Company has also sold 87% of 17,713 units, corresponding to the non-invoiced portion<br />
of 60%, for a total amount of TRY 158,073,776 paid in advance.<br />
The Company records these advance payments in the account Order Advances until the delivery of these units<br />
to their respective buyers. The Company plans to deliver and invoice the said 87% portion to the buyers throughout<br />
2005 and reflect the advances it posted to the Order Advances account, together with the costs in the Inventories<br />
account, to the Income and Expenses account, respectively, and close these accounts.<br />
The Company’s Other Fixed Assets account reflects a cost of TRY 35,290,305 with respect to its Construction Project<br />
of Güzelce Villas consisting of 675 villas, and the advance amounts of TRY 9,115,105 and TRY 24,374,213 collected<br />
by the Company for 132 villas it sold within the scope of this Project are recognized Long-Term Advances<br />
Collected and the Income in Coming Months account, respectively. The Company declared that, in respect of cost<br />
and as of 31.12.<strong>2004</strong>, it completed 65% of the Project, corresponding to 300 villas, and only 1% of the remaining<br />
375 villas, and that the Project would be fully completed on 31.12.2008.
<strong>Annual</strong> <strong>Report</strong> <strong>2004</strong><br />
b) Equity items should be recognized at their recorded values in balance sheets pursuant to Communique Serial<br />
No. XI/26 Regarding the Rules and Principles for the Adjustment of Financial Statements in Hyperinflationary Periods.<br />
Differences arising from such adjustment are recognized collectively in the “Differences from Equity Adjustments<br />
for Inflation” account. Differences arising from the adjustment of the shareholders’ equity are recognized under<br />
the “Translation Differences” section of the Shareholders’ Equity account under the Liabilities column and these<br />
differences are detailed in the following table:<br />
12/<strong>2004</strong> 12/2003<br />
Capital 166,050,848 164,636,494<br />
Share Premium 36,055,298 34,688,728<br />
Statutory Reserves 7,585,906 8,514,201<br />
Extraordinary Reserves 38,679,536 43,475,516<br />
TOTAL 248,371,588 251,314,939<br />
34- Explanatory Notes Provided Pursuant to “Communique Serial:XI, 21 Regarding the Rules and<br />
Principles for Consolidated Financial Statements on the Capital Market and the Accounting of<br />
affiliated companies”:<br />
a) Consolidated financial statements include ‹hlas Holding A.fi. (“Company” or “Parent Company”) and the companies<br />
subject to consolidation (“Group”). The tradenames and capital amounts of the subsidiaries of the Group<br />
and the share amounts owned by both the Parent Company and the Group in these subsidiaries are as follows:<br />
Current Year:<br />
Shares<br />
Capital Shares Held in Equity<br />
Adjusted by Parent of Parent Provision for<br />
for Company or Company or Impairment in<br />
Subsidiaries Inflation Group % Group (*) Subsidiaries (*)<br />
‹hlas Gazetecilik A.fi. 234,594,317 95.60 227,655,915 (100,231,237)<br />
‹hlas Huzur Kargo A,fi 9,774,954 52.36 4,275,873 (1,983,384)<br />
‹hlas Ev Aletleri ‹malat San.Tic.A.fi. 26,484,369 37.07 19,591,115 (8,606,788)<br />
‹hlas Pazarlama A.fi 315,654,094 98.18 319,608,455 (171,750,784)<br />
‹hlas Sigorta A.fi. 24,171,946 95.03 22,608,692 (15,520,136)<br />
‹hlas Haber Ajans› A.fi 9,635,484 97.49 44,478,144 (39,576,090)<br />
‹hlas Yay›n Holding A.fi. 217,967,497 97.90 215,572,964 (63,400,653)<br />
Kristal Kola ve Meflrubat San.Tic.A.fi 68,474,675 45.71 38,386,251 (21,368,295)<br />
Repafl Medya Rek. Prod. Bas. Hiz.A.fi 6,600,390 96.72 5,492,182 (4,650,870)<br />
Kuzuluk Kapl.Sa¤. ve Petr.Ür.Tic.A.fi 1,700,827 96.97 1,614,311 (4,130,739)<br />
‹hlas Net A.fi 8,182,368 99.87 8,153,799 (11,182,955)<br />
Kristal G›da Da¤. ve Paz.Tic.A.fi 684,534 49.90 255,131 (355,485)<br />
‹hlas E¤itim A.fi 1,852,478 66.49 1,228,967 (890,859)<br />
‹hlas Medikal Ür. ve Sa¤l›k Hiz.A.fi 459,650 94.62 39,583 (280,757)<br />
Huzur Radyo TV A.fi. (TGRT) 75,001,046 55.31 136,412,986 (136,465,734)<br />
TGRT Haber TV A.fi. 534,484 93.01 507,760 (482,506)<br />
TGRT Dijital TV A.fi. 534,484 93.01 507,760 285<br />
Bisan Bisiklet Oto. Ürt. San. Tic. A.fi. 132,446,279 93.26 127,302,125 (62,783,328)<br />
Bisiklet Pazarlama ve Tic. A.fi. 176,140,398 98.17 29,079,989 (18,547,664)<br />
Ege Mosan Motorlu Araçlar A.fi. 113,975,905 93.37 49,263,050 1,827,558<br />
‹letiflim Magazin Gazt. Tic. A.fi 129,450 50.66 77,345 (127,673)<br />
K›br›s Bürosu 10 100.00 17,106 (48,638)<br />
(*) Eliminated during consolidation.<br />
101
102<br />
Shares<br />
Capital Shares Held in Equity<br />
Adjusted by Parent of Parent Provision for<br />
for Company or Company or Impairment in<br />
Affiliated Companies Inflation Group % Group Subsidiaries<br />
‹hlas Gayrimenkul Yat.Ort.A.fi 57,671,711 30.58 24,056,419 (16,508,437)<br />
‹hlas Genel Antrep. Nakliyat ve Tic.A.fi. 2,958,730 41.43 995,812 (135,879)<br />
‹hlas Yap› Turizm ve Sa¤l›k A.fi 234,181 20.00 39,801 (39,801)<br />
‹hlas Tarsan Iml.San.Tic.A.fi 1,646,835 20.00 524,753 (524,753)<br />
‹hlas Fuar Hizmetleri A.fi 565,167 22.00 208,058 (208,058)<br />
Previous Year:<br />
Shares Held Provision for Shares Held<br />
Capital by Parent Impairment by Parent<br />
Adjusted Company in Subsidiaries Company or<br />
Subsidiaries for Inflation or Group (*) (*) Group %<br />
‹hlas Matb. Gazt. Yay. San. ve Tic.A.fi 211,090,564 211,783,733 (192,483,136) 99.89<br />
‹hlas Gazetecilik A.fi. 213,332,375 208,178,784 (88,309,451) 96.99<br />
‹hlas Hayat Sigorta A.fi 21,536,742 20,488,136 (6,593,480) 94.22<br />
‹hlas Ev Aletleri ‹malat San.Tic.A.fi. 26,484,369 32,257,553 (16,234,025) 63.61<br />
‹hlas Pazarlama.A.fi 7,525,120 4,736,847 (3,026,926) 52.00<br />
‹hlas Sigorta A.fi. 24,171,945 22,608,692 (15,845,079) 95.15<br />
‹hlas Haber Ajans› A.fi 9,635,484 27,816,087 (24,522,481) 98.43<br />
‹hlas Yay›n Holding A.fi. 116,987,541 114,647,790 (32,467,045) 97.99<br />
Kristal Kola ve Meflrubat San.Tic.A.fi. 68,474,675 39,488,186 (20,246,057) 49.62<br />
Repafl Medya Rek. Prod. Bas. Hiz.A.fi 6,600,390 5,443,800 (4,510,101) 97.74<br />
Kuzuluk Kapl.Sa¤. ve Petr.Ür.Tic.A.fi 1,700,827 1,614,311 (5,774,893) 98.31<br />
‹hlas Net A.fi 8,005,134 8,153,799 (10,206,047) 99.88<br />
Kristal G›da Da¤. ve Paz.Tic.A.fi 684,534 255,131 (430,312) 50.42<br />
‹hlas E¤itim A.fi 1,748,651 1,228,198 (842,426) 64.35<br />
K›br›s Bürosu 17,106 17,106 (42,837) 100.00<br />
Shares Held Provision for Shares Held<br />
Capital by Parent Impairment by Parent<br />
Adjusted Company in Company or<br />
Subsidiaries for Inflation or Group Subsidiaries Group %<br />
‹hlas Gayrimenkul Yat.Ort.A.fi 57,752,264 24,056,419 (15,910,919) 30.58<br />
Huzur Radyo TV A.fi. 75,001,046 92,498,022 (92,427,872) 36.03<br />
‹hlas Genel Antrep. Nakliyat ve Tic.A.fi, 2,958,729 995,812 (168,667) 41.43<br />
‹hlas Yap› A.fi 266,592 39,801 (39,801) 20.00<br />
‹hlas Tarsan Iml.San.Tic.A.fi 1,646,836 524,753 (524,753) 20.00<br />
‹hlas Medikal Ür. ve Sa¤l›k Hiz.A.fi 449,694 205,689 (205,689) 20.00<br />
‹hlas Fuar Hizmetleri A.fi 565,167 208,059 (208,059) 22.00<br />
(*)Eliminated during consolidation.
<strong>Annual</strong> <strong>Report</strong> <strong>2004</strong><br />
b) Details concerning the effects on the consolidated financial statement items of the transaction performed with<br />
subsidiaries, Affiliated Companies under joint control or other Affiliated Companies, which are not included in the<br />
consolidated financial statements due to the fact that the Company does not own shares in such subsidiaries,<br />
Affiliated Companies under joint control or other Affiliated Companies despite it owns voting rights of more than<br />
20% in or the right to elect the managers or control the management of such subsidiaries, Affiliated Companies under<br />
joint control or other Affiliated Companies through its shareholders or managers:<br />
The transactions performed by the Parent Company in the current year with the subsidiaries and Affiliated<br />
Companies, which are not included in consolidation in Note 34-d) to the balance sheet and for which the reasons<br />
of such exclusion are explained, do not have a material affect on the consolidated balance sheet.<br />
c) Changes in the compositions of companies included in consolidation as compared to previous year:<br />
- Since the Company’s indirect investment in Huzur Radyo TV A.fi. (TGRT) from 36% to 55% in October <strong>2004</strong>, Huzur<br />
Radyo TV A.fi. has been consolidated as per the straight-line consolidation method.<br />
- The Company indirectly participated in the following companies as follows on the effective rate basis in <strong>2004</strong>:<br />
by 98% in Bisiklet Pazarlama San. ve Tic. A.fi.; by 93% in Ege Mosan Motorlu Araçlar San. ve Tic. A.fi.; by 93% in<br />
Bisan Bisiklet San. ve Tic. A.fi.; by 93% in Bisiklet Moped Jant San. ve Tic. A.fi.; and by 93% in Bisan Bisiklet Otomotiv<br />
Ürt. San. Tic. A.fi. The Company purchased Ege Mosan Motorlu Araçlar San. ve Tic. A.fi, Bisan Bisiklet San.<br />
ve Tic. A.fi. and Bisiklet Moped Jant San. ve Tic. A.fi with all of their assets and liabilities and merged them in December/<strong>2004</strong>.<br />
At the end of the year, these companies were included in consolidation and consolidated in accordance<br />
with the straight-line consolidation method.<br />
- Since the Company’s direct investment in ‹hlas Medikal Ür. ve Sa¤l›k Hiz.A.fi. has increased from 20% to 93%<br />
in the current year, this company has been consolidated in accordance with the straight-line consolidation method.<br />
- ‹letiflim Magazin Gazt. Tic. A.fi., a once-idle subsidiary of the Company, has been consolidated in accordance<br />
with the straight-line consolidation method since it started to operate in current year.<br />
- Both the managements of the companies ‹hlas Matb. Gazt. Yay. San. ve Tic.A.fi and ‹hlas Pazarlama A.fi., each<br />
a subsidiary of the Company, agreed to merge their named companies with all of their assets and liabilities in accordance<br />
with Article 451 of the Turkish Code of Commerce and Articles 37, 38 and 39 of the Corporation Tax Law.<br />
The said merger was completed on 29 April <strong>2004</strong>, by maintaining the tradename ‹hlas Pazarlama A.fi..<br />
- The life insurance portfolio of the Company’s subsidiary ‹hlas Hayat Sigorta A.fi. were wholly transferred to Ankara<br />
Emeklilik A.fi. In accordance with Article 451 of the Turkish Code of Commerce and Articles 37, 38 and 39 of<br />
the Corporation Tax Law, ‹hlas Gazetecilik A.fi. acquired ‹hlas Hayat Sigorta A.fi. with all of its assets and liabilities<br />
and the said acquisiton was officially certified on 06 August <strong>2004</strong>.<br />
- Based on a decision of its Board of Directors dated 09 July <strong>2004</strong>, ‹hlas Pazarlama A.fi., a subsidiary of the Company,<br />
participated in the company named Huzur Kargo A.fi. by investing a sum of TRY 4,000,000 in cash for a share<br />
of 53,33% and the tradename Huzur Kargo A.fi. was changed to ‹hlas Kargo A.fi. as a result of which the company<br />
has been consolidated in accordance with the straight-line consolidation method.<br />
- Since ‹hlas Yay›n Holding A.fi. participated in both TGRT Haber TV A.fi. and TGRT Dijital TV Hizmetleri A.fi. by<br />
95% in September <strong>2004</strong>, these companies have also been consolidated in accordance with the straight-line consolidation<br />
method.<br />
d) Information on the reasons for not including in consolidation the companies, which have relations with the Parent<br />
Company and the subsidiaries in terms of capital, management and auditing, and the shares held by the Parent<br />
Company in the Affiliated Companies and the accounting methods used for those shares:<br />
103
104<br />
Current Year<br />
Share Held Amount of Capital<br />
by Parent Shares Held Commitment Total<br />
Company by Parent to Subsidiaries Provision for Capital<br />
and Group Company and /Affiliated Impairment in Paid in<br />
Subsidiaries % Group Companies Subsidiaries (TRY)<br />
‹hlas Motor Ltd. fiti. 99.92 25,000 - - 100,000<br />
Bursa Yalova Enerji Da¤›t›m Ltd.fiti 97.94 176,000 (72,000) (104,000) 220,000<br />
Tasfiye Halinde ‹hlas Finans A.fi 50.27 5,032,962 - (5,032,962) 10,000,000<br />
‹hlas Motor Sehimdar Cemiyeti 95.94 115,860 - - 136,412<br />
Eko Enr.Ür.Da¤. ve Tic.A.fi 89.68 631,697 - (631,697) 624,430<br />
Kia ‹hlas Motor San ve Tic. A.fi 53.95 2,067,000 (2,067,000) - 13,000<br />
‹hlas G›da Ürt ve Tic. A.fi 62.49 2,000,000 (1,983,718) - 16,407<br />
Affiliated Companies<br />
‹hlas Kimya San. Ltd.fiti 20.00 200 - (200) 1,000<br />
Yay-sat A.fi 24.92 1,209,750 - - 3,400,000<br />
Do¤u Yat›r›m Holding 1.45 12,500 - - 875,000<br />
‹hlas Oxford Mortgage ‹nfl.ve Tic A.fi. 48.00 72,000 (72,000) - 72,350<br />
• Since ‹hlas Finans Kurumu A.fi in Liquidation is in the process of liquidation, the Company has allocated provision<br />
for the whole of its participation value and for this reason this company was not included in consolidation.<br />
• Since Bursa Yalova Enerji Da¤›t›m Ltd.fiti, Eko Enerji Üretim Da¤›t›m ve Tic. A.fi and ‹hlas Kimya San. Ltd. fiti.<br />
are all idle, the Company has allocated provision for the whole of participation value and for this reason these companies<br />
were not included in consolidation.<br />
• Since the respective financial statements of ‹hlas Motor Limited fiirketi, ‹hlas Motor Sehimdar Cemiyeti, Yay-sat<br />
A.fi., ‹hlas Oxford Mortgage ‹nfl.ve Tic A.fi. and Do¤u Yat›r›m Holding do not materially affect the consolidated financial<br />
statements herein, they have been excluded from the scope of consolidation.<br />
• Since Kia ‹hlas Motor San ve Tic. A.fi. is idle and no investment was made in it by the Company, and therefor<br />
does not affect the consolidated financial statements herein, it has been excluded from the scope of consolidation.<br />
• Since ‹hlas G›da Ürt ve Tic. A.fi. is new company founded on 31 December <strong>2004</strong> and has not yet started to operate,<br />
it has been excluded from the scope of consolidation.<br />
The foregoing unconsolidated subsidiaries and Affiliated Companies have been illustrated at their recorded values<br />
and not adjusted for inflation.<br />
Previous Year:<br />
Amount of Capital Total<br />
Share Held Shares Held Commitment Capital<br />
by Parent by Parent to Subsidiaries Provision for (Historical Value)<br />
Company and Company and / Affiliated Impairment in Paid in<br />
Subsidiaries Group % Group Companies Subsidiaries (TRY)<br />
‹hlas Motor Limited fiirketi 99.92 28,460 - - 100,000<br />
Bursa Yalova Enerji Da¤›t›m Ltd.fiti 97.94 200,359 (81,965) (118,394) 220,000<br />
Klas D›fl Tic.A.fi. 50.64 28,460 - - 50,000<br />
Tasfiye Halinde ‹hlas Finans A.fi 50.27 5,729,536 - (5,729,536) 10,000,000<br />
‹hlas Motor Sehimdar Cemiyeti 95.94 131,895 - - 136,412<br />
Eko Enerji Ür.Da¤›t›m ve Tic.A.fi 89.68 719,125 - (719,125) 624,430<br />
Kia ‹hlas Motor San ve Tic. A.fi 53.95 2,353,078 (2,353,078) - 13,000<br />
Affiliated Companies<br />
‹hlas Kimya San. Ltd.fiti 20.00 228 - (228) 1,000<br />
Yay-sat A.fi 24.92 979,026 - - 3,400,000<br />
Do¤u Yat›r›m Holding 1.45 14,230 - - 875,000
<strong>Annual</strong> <strong>Report</strong> <strong>2004</strong><br />
e) Information on consolidated subsidiaries, joitryy managed companies and Affiliated Companies that are in the<br />
process of bankruptcy or liquidation or whose registered headoffices are located abroad:<br />
The banking license of ‹hlas Finans Kurumu A.fi was revoked by the Banking Regulation and Supervision Board<br />
under its Resolution No. 171, dated 10 February 2001, and the company entered a liquidation process based on the<br />
Resolution of its Extraordinary General Meeting of Shareholders adopted to that end on 03 August 2001. Due to the<br />
fact the associate has entered a liquidation process and its license was revoked, the Parent Company allocated provision<br />
for the full amount of its share in the named associate.<br />
f) Different accounting policies applied in different years for preparing consolidated financial statements, the reasons<br />
for adopting such policies and their monetary effects: NONE.<br />
g) Information on whether there exists any other companies located abroad and included in the consolidated financial<br />
statements and whether or not the financial statements of those companies who operate in Turkey but prepare<br />
their financial statements in accordance with the accounting legislation applicable in their respective countries<br />
could be used for preparing consolidation-based financial statements:<br />
Of the companies subject to the consolidation method, only the Cyprus Office which is a branch office of the Parent<br />
Company is located in a foreign country. This Office is located in the Turkish Republic of Northern Cyprus and<br />
the Company has used its financial statements, which were drafted in accordance with international accounting<br />
standards, in the Company’s consolidated financial statements.<br />
The financial statements of ‹hlas Sigorta A.fi. prepared in conformity with the Turkish Insurance Law have been<br />
used in the Company’s consolidated financial statements.<br />
h) Goodwill arose on the basis of the capital relations between the companies included in the consolidated financial<br />
statements:<br />
Current Year:<br />
GROSS C. DEPR. NET<br />
From participation of 2003/7,<br />
‹hlas Yay›n Holding A.fi in 2003/12 ve (52,748) 136,412,986 136,059,743 (12,724,084) 123,335,659<br />
Huzur Radyo TV A.fi <strong>2004</strong>/10<br />
From participation of<br />
‹hlas Pazarlama A.fi in <strong>2004</strong>/9 - 4,275,873 2,492,052 (83,068) 2,408,984<br />
‹hlas Kargo A.fi<br />
From participation of<br />
‹hlas Pazarlama A.fi in <strong>2004</strong>/10 10,532,326 29,079,989 15,332,598 (511,087) 14,821,511<br />
Bisiklet Pazarlama ve Tic.A.fi.<br />
From participation of<br />
Share per<br />
Participation Rate<br />
out of Total Equity<br />
Adjusted for Inflation<br />
Date of on the Basis of<br />
Acquisi- Purchasing Power as<br />
tion<br />
at 31.12.<strong>2004</strong><br />
Indexed Cost<br />
POSITIVE / (NEGATIVE) GOODWILL<br />
‹hlas Pazarlama A.fi in<br />
Ege Mosan Motorlu Araçlar A.fi.<br />
<strong>2004</strong>/10 51,090,608 49,263,050 (844,589) 28,153 (816,436)<br />
139,749,718<br />
105
106<br />
Previous Year:<br />
Date of<br />
Acquisition<br />
Share per<br />
Participation Rate out<br />
of Total Equity Adjusted<br />
for Inflation on the<br />
Basis of Purchasing<br />
Power as at<br />
31.12.<strong>2004</strong><br />
Indexed Cost<br />
POSITIVE GOODWILL<br />
GROSS C. DEPR. NET<br />
From participation of<br />
‹hlas Yay›n Holding A.fi in<br />
Huzur Radyo TV A.fi<br />
From participation of<br />
2003/7 361,417 56,334,852 55,973,436 3,265,117 52,708,319<br />
‹hlas Matbaacl›k A.fi in<br />
Huzur Radyo TV A.fi<br />
2003/12 55,545 35,859,674 35,804,129 298,367 35,505,762<br />
TOTAL 416,962 92,194,526 91,777,565 3,563,484 88,214,081<br />
i) Shares not controlled, whether directly or indirectly, by the Parent Company in each subsidiary:<br />
Current Year:<br />
Share Not Non-Parent Non-Parent<br />
Held by Parent Company Company<br />
Subsidiaries Company % Capital Equity<br />
1 ‹hlas Gazetecilik A.fi. 4.40 10,319,758 5,531,407<br />
2 ‹hlas Huzur Kargo A.fi 47.64 4,656,847 2,047,919<br />
3 ‹hlas Ev Aletleri ‹malat San.Tic.A.fi. 62.93 16,666,614 18,646,984<br />
4 ‹hlas Paz. ve Ma¤az. ‹fllet. ve Tic.A.fi 1.82 5,744,905 2,740,894<br />
5 ‹hlas Sigorta A.fi. 4.97 1,200,321 369,904<br />
6 ‹hlas Haber Ajans› A.fi 2.51 242,315 124,536<br />
7 ‹hlas Yay›n Holding A.fi. 2.10 4,577,317 3,210,604<br />
8 Kristal Kola ve Meflrubat San.Tic.A.fi 54.29 37,176,557 19,074,030<br />
9 Repafl Medya Rek. Prod. Bas. Hiz.A.fi 3.28 216,201 28,177<br />
10 Kuzuluk Kapl.Sa¤. ve Petr.Ür.Tic.A.fi 3.03 51,482 (77,408)<br />
11 ‹hlas Net A.fi 0.13 10,385 (3,849)<br />
12 Kristal G›da Da¤. ve Paz.Tic.A.fi 50.10 342,980 (99,666)<br />
13 ‹hlas E¤itim A.fi 33.51 620,812 170,206<br />
14 ‹hlas Medikal Ür. ve Sa¤l›k Hiz.A.fi 5.38 24,744 (17,083)<br />
15 Huzur Radyo TV A.fi. (TGRT) 44.69 33,515,342 (41,719)<br />
16 TGRT Haber TV A.fi. 7.00 37,387 1,859<br />
17 TGRT Dijital TV A.fi. 7.00 37,387 37,408<br />
18 Bisan Bisiklet Otomotiv Ürt. San. Tic. A.fi. 6.74 8,930,411 4,355,514<br />
19 Bisiklet Pazarlama ve Tic. A.fi. 1.83 3,223,049 192,742<br />
20 Ege Mosan Motorlu Araçlar A.fi. 6.63 7,557,313 3,562,165<br />
21 ‹letiflim Magazin Gazt. Tic. A.fi 49.34 63,864 (40,079)<br />
22 K›br›s Bürosu 0.00 0 0<br />
TOTAL 135,215,991 59,814,545
Previous Year:<br />
Share Not Non-Parent Non-Parent<br />
Held by Parent Company Company<br />
Subsidiaries Company % Capital Equity<br />
1 ‹hlas Matb. Gazt. Yay. San. ve Tic.A.fi 0.11 232,200 130,609<br />
2 ‹hlas Gazetecilik A.fi. 3.01 6,421,304 3,699,271<br />
3 ‹hlas Hayat Sigorta A.fi 5.78 1,244,824 830,862<br />
4 ‹hlas Ev Aletleri ‹malat San.Tic.A.fi. 36.39 9,637,662 10,023,176<br />
5 ‹hlas Paz. ve Ma¤az. ‹fllet. ve Tic.A.fi 48.00 3,612,057 1,578,388<br />
6 ‹hlas Sigorta A.fi. 4.85 1,172,339 344,720<br />
7 ‹hlas Haber Ajans› A.fi 1.57 151,277 52,237<br />
8 ‹hlas Yay›n Holding A.fi. 2.01 2,351,450 1,685,544<br />
9 Kristal Kola ve Meflrubat San.Tic.A.fi. 50.38 34,497,542 19,646,040<br />
10 Repafl Medya Rek. Prod. Bas. Hiz.A.fi 2.26 149,168 21,576<br />
11 Kuzuluk Kapl.Sa¤. ve Petr.Ür.Tic.A.fi 1.69 28,744 0<br />
12 ‹hlas Net A.fi 0.12 9,606 0<br />
13 Kristal G›da Da¤. ve Paz.Tic.A.fi 49.58 339,392 0<br />
14 ‹hlas E¤itim A.fi 35.65 623,394 206,592<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2004</strong><br />
TOTAL 60,470,959 38,219,015<br />
j) In respect of transactions among the companies included in the consolidated financial statements, the items<br />
and their amounts eliminated in terms of main items on the balance sheet and statements of income:<br />
Current Year:<br />
Account Name Amount TRY Account Name Amount TRY<br />
Customers (61,783,911) Suppliers (46,044,081)<br />
Bills Receivable (6,529,296) Bills Payable (6,529,296)<br />
Rediscount on Receivables (-) 240,668 Rediscount on Payables 240,668<br />
Raw Material 0 Advances Collected for Orders (51,163,575)<br />
Merchandise (1,310,519) Capital (1,435,413,379)<br />
Advance Paid for Orders (24,808,013) Capital Commitment 10,413,740<br />
Subsidiaries (1,436,902,783) Share Premium (4,297,608)<br />
Capital Commitment to Subsidiaries (-) 7,605,536 Net Profit (Loss) for the Year (1,240,718)<br />
Plant, Machinery and Equipment (1,185,558) Net Cumulative Losses over the Past Years 144,932,060<br />
Rights (5,616,796) Non-Parent Company Profit (Loss) in Previous Year (128,246)<br />
Goodwill 139,749,718 Domestic Sales (151,142,742)<br />
Cost of Sales 132,366,827<br />
Marketing, Sales and Distribution Costs 5,827,697<br />
General Management Expenses 11,637,699<br />
Interest and Other Dividend Income (3,947,757)<br />
Other Operating Income and Profit (17,541,973)<br />
Other Operating Expenses and Losses 17,541,973<br />
Financial Expenses 3,947,757<br />
TOTAL (1,390,540,954) (1,390,540,954)<br />
107
108<br />
Previous Year:<br />
Account Name Amount TRY Account Name Amount TRY<br />
Customers (89,713,578) Suppliers (90,055,233)<br />
Bills Receivable (4,987,385) Bills Payable (4,987,385)<br />
Discount on Receivables (-) 570,206 Discount on Payables 570,206<br />
Raw Material (42,835) Advances Collected for Orders (13,465,565)<br />
Merchandise (577,773) Capital (717,978,362)<br />
Advance Paid for Orders (13,807,220) Capital Commitment 1,036,180<br />
Subsidiaries (721,338,097) Share Premium (4,297,608)<br />
Capital Commitment to Subsidiaries (-) 98,307 Net Profit (Loss) for the Year 87,777,708<br />
Plant, Machinery and Equipment (788,953) Net Cumulative Losses over the Past Years (6,935,181)<br />
Rights (6,947,520) Non-Parent Company Profit (Loss) in Current Year (258,898)<br />
Goodwill 88,214,080 Non-Parent Company Profit (Loss) in Previous Year (31,358)<br />
Domestic Sales (142,194,959)<br />
Cost of Sales 124,970,754<br />
Marketing, Sales and Distribution Costs 5,905,250<br />
General Management Expenses 10,698,348<br />
Interest and Other Dividend Income (3,461,249)<br />
Other Operating Income and Profit (15,936)<br />
Other Operating Expenses and Losses (74,665)<br />
Financial Expenses 3,477,185<br />
TOTAL (749,320,768) (749,320,768)<br />
k) Assumptions and estimates used due to the fact that it was impossible to calculate any difference arising from<br />
the preparation by the companies, which are subject to consolidation, of their consolidation financial statements by<br />
using different accounting policies: NONE. (2003: None)<br />
l) Information as to whether an offset transaction was performed due to profit and loss from depreciable long<br />
term asset sales between the companies subject to the consolidation method not exceeding 5% of the consolidated<br />
net profit and loss prior to the elimination of the profit and loss on depreciable long term asset sales:<br />
All necessary offsetting transactions have been performed in relation to the depreciable long term asset sales<br />
performed between the companies subject to the consolidation method.<br />
m) Statement as to whether the accounting items recognized in the consolidated balance sheet and the statement<br />
of income have been classified on the basis of operation fields due to the fact that the subsidiaries and<br />
Affiliated Companies subject to the consolidation method are engaged in totally different business fields:<br />
The accounting items recognized in the consolidated balance sheet and the statement of income have not been<br />
classified on the basis of operation fields due to the fact that the subsidiaries and Affiliated Companies subject to<br />
the consolidation method are engaged in totally different business fields.
‹hlas Holding A.fi. Consolidated Income Statement<br />
A. Gross Sales 506,936,273 370,690,434<br />
1. Domestic 476,557,440 325,823,367<br />
2. Exports 22,140,594 39,333,416<br />
3. Others 8,238,239 5,533,651<br />
B. Sales Deductions (-) (2,615,992) (2,739,391)<br />
1. Sales Returns (-) (1,180,024) (1,377,149)<br />
2. Sales Discounts (-) (1,073,143) (1,018,921)<br />
3. Other Discounts (-) (362,825) (343,321)<br />
C. Net Sales 504,320,281 367,951,043<br />
D. Cost of Sales (-) (405,840,799) (286,524,615)<br />
GROSS PROFIT (LOSS) 98,479,482 81,426,428<br />
E. Operating Expenses (-) (94,103,579) (99,610,373)<br />
1. Research and Development Expenses (-) (409,870) (233,219)<br />
2. Marketing, Sales and Distribution Expenses (-) (16,204,540) (24,228,845)<br />
3. General Management Expenses (-) (77,489,169) (75,148,309)<br />
OPERATING PROFIT (LOSS) 4,375,903 (18,183,945)<br />
F. Income and Profit from Other Operations 77,439,091 76,570,610<br />
1. Dividend Income from Subsidiaries 0 1,637,674<br />
2. Dividend Income from Affiliated Companies 0 0<br />
3. Interest and Other Dividend Income 9,235,903 7,695,394<br />
4, Other Operating Income and Profit 68,203,188 67,237,542<br />
G. Expenses and Losses from Other Operations (-) (46,430,757) (42,989,586)<br />
H. Financial Expenses (-) (53,533,042) (56,910,629)<br />
1. Short-Term Borrowing Expenses (-) (41,889,614) (37,953,583)<br />
2. Long-Term Borrowing Expenses (-) (11,643,428) (18,957,046)<br />
OPERATING PROFIT (LOSS) (18,148,805) (41,513,550)<br />
I. Extraordinary Income and Profit 33,091,849 22,223,591<br />
1. Provisions No Longer required 19,243,412 9,171,769<br />
2. Previous Year’s Income and Profit 12,488 7,212<br />
3. Other Extraordinary Income and Profit 13,835,949 13,044,610<br />
J. Extraordinary Expenses and Losses (-) (8,481,873) (8,510,382)<br />
1. Idle Capacity Expenses and Losses (-) 0 0<br />
2. Previous Year’s Expenses and Losses (-) (93,546) (6,274)<br />
3. Other Extraordinary Expenses and Losses (-) (8,388,327) (8,504,108)<br />
K. Net Monetary Position Profit (Loss) 25,709,389 32,209,238<br />
PROFIT (LOSS) FOR THE YEAR 32,170,560 4,408,897<br />
L. Taxes and Liegal Liabilities Payable (-) (2,939,945) (2,072,397)<br />
M. Profit (Loss) Other Than Parent Company (1,482,355) (2,111,856)<br />
NET CONSOLIDATED PROFIT (LOSS ) FOR THE YEAR 30,712,970 4,448,356<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2004</strong><br />
(Amounts expressed in New Turkish Lira (TRY) in terms<br />
of purchasing power of the Turkish Lira as at 31 December <strong>2004</strong>) Inflation-adjusted Consolidated<br />
(as per Serial XI, No:20 and 21)<br />
Indepedetly Audited<br />
DETAILED COSOLIDATED INCOME STATEMENT (TRY) 31.12.<strong>2004</strong> 31.12.2003<br />
109
110<br />
NOTES TO STATEMENT OF INCOME:<br />
1- Total depreciation, amortization and depletion expenses for the year:<br />
<strong>2004</strong> 2003<br />
a) Depreciation expenses 23,710,643 27,178,104<br />
b) Amortization and depletion expenses 17,397,473 21,310,403<br />
2- Provision and rediscount expenses for the year :<br />
<strong>2004</strong> 2003<br />
Provision for Doubtful Trade Receivables 5,543,069 2,677,143<br />
Provision for Protested and Overdue Notes and Checks 2,351,755 5,182,413<br />
Provision for Severance Pay 1,838,409 2,346,528<br />
Provision for Rediscount 4,183,919 5,573,774<br />
Provision for ‹FK Desposits 43,523 5,873<br />
Provision for Spares Under Warranty 266,454 420,789<br />
Provision for Decrease in Value of Securities 58 2,128<br />
Provision for Impairment in Subsidiaries 520,980 1,479,173<br />
Provision for Impairment in Inventories 2,073,022 26,550<br />
Provision for Impairment in Tax on Profit 2,434,015 2,072,397<br />
Provision for Life Mathematics 0 6,579,313<br />
Provision for life Dividends 0 8,398,383<br />
Provision for Eartquake Claims 702,999 258,388<br />
Provision for Life Uncertainty Claims 0 988,592<br />
Provision for Current Risks 12,486,340 4,765,888<br />
Provision for Uncertain Damages 6,499,002 3,907,860<br />
Provision for Monetary Claims 4,912,193 1,311,985<br />
Provision for Decrease in Value of Stocks in Stock Exhange 90,800 80,052<br />
Other : 0 20,866<br />
TOTAL 43,948,542 46,416,092<br />
3- Total financial expenses for the year:<br />
<strong>2004</strong> 2003<br />
a) Financial expenses recognized as production cost: 369,967 531,769<br />
b) Financial expenses recognized as fixed assets cost - -<br />
c) Financial expenses recognized directly 53,533,042 56,910,629<br />
TOTAL 53,903,009 57,442,398<br />
Since the financial expenses ( TRY 3,947,757 ) accrued by the Company and the Group companies included in<br />
consolidation to eachother during the current year have been eliminated, these expenses are not included in the<br />
total amount indicated above (2003: TRY 3,461,249).
<strong>Annual</strong> <strong>Report</strong> <strong>2004</strong><br />
4- The portion of financial expenses regarding the shareholders, subsidiaries and Affiliated Companies (Those<br />
whose share in the expenses exceeds 20% of the total amount are illustrated separately) :<br />
The financial expenses for the year covers the sum of TRY 3,947,757 accrued by the Company and the Group<br />
companies to eachother, which sum has been eliminated during consolidation (2003: TRY 3,461,249).<br />
5- Sales to and purchases from the shareholders, subsidiaries and Affiliated Companies (Those whose share in<br />
the total amount exceeds 20% are illustrated separately) :<br />
Each of the total sales and total purchases affected by the Company and the Group companies among themselves<br />
in the current year is TRY 130,572,294 (2003: TRY 132,223,486). The TRY 112,390,950 portion thereof waw affected<br />
among the subsidiaries subject to consolidation and was eliminated during consolidation (2003: TRY<br />
124,970,754).<br />
6- Interests, rentals and other similar charges paid to and collected from and among the shareholders, subsidiaries<br />
and Affiliated Companies (Those whose share in the total amount exceeds 20% are illustrated separately) :<br />
Current Year:<br />
Each of the interest, rental and advertising charges other similar amounts paid to and collected from the Company<br />
and the Group companies and among themselves is respectively TRY 3,947,757, TRY 3,962,163 and TRY<br />
34,894,940. The portion of TRY 41,649,730 thereof was affected amonth the companies subject to consolidation and<br />
was eliminated during consolidation.<br />
Previous Year:<br />
Each of the interest, rental and advertising charges other similar amounts paid to and collected from the Company<br />
and the Group companies and among themselves is respectively TRY 3,489,089, TRY 5,902,036 and TRY<br />
22,593,174. The portion of TRY 20,080,761 thereof was affected amonth the companies subject to consolidation and<br />
was eliminated during consolidation.<br />
7- Remunerations and benefits paid to the Chairman and members of the Board, General Manager, General Coordinator<br />
and Assistants to General Manager in the current year: TRY 1,396,404 ( 2003: TRY 1,476,079).<br />
8- Depreciation expense calculation methods and any change in these methods resulting in an increase (+) or<br />
decrease (-) in depreciation expenses in the current year :<br />
- Depreciation is calculated at normal and decreasing balances and the initial method of calculation is used. Thus,<br />
there is no increase or decrease in depreciation since the method used is the same.<br />
9- Inventory cost calculation systems (such as process of order costs) and methods (such as weighted average,<br />
FIFO, moving weighted average) :<br />
- Weighted average cost is used for calculating inventory costs.<br />
10- Reasons, if any, why a ful lor partial stocktaking has not been performed: A full stocktaking has been performed.<br />
(2003: A full stocktaking was performed).<br />
11- Statement regarding the sale of products, scraps and wastes as well as services covered by the domestic and<br />
export sales accounts and, in cases where the total amount of such sales combined exceeds twenty percent of the<br />
total gross sales, the amounts obtained on such sales separately: The total of these sales do not exceed 20% of the<br />
total gross sales of the Company.<br />
111
112<br />
12- Investment allowances and subsidies, if any, regarding the Company’s sales: NONE (2003: None).<br />
13- Information on the amounts and sources of the revenues and expenses as well as the expenses and losses<br />
incurred in the previous year: NONE (2003: None).<br />
14- Profit and dividend per share on the basis of common and preference shares respectively:<br />
(Net Profit / Paid-in Capital)<br />
<strong>2004</strong> 2003<br />
Denominated in New Kurufl (Ykr) 0,008 0,006<br />
In % %7.78 %5.89<br />
When allocating statutory reserves in consolidated financial statements prepared pursuant to Communique Serial<br />
XI, 21, the paid-in/issued capital amount recognized in the inflation-adjusted non-consolidated financial statements<br />
should be taken into account in the determination of the upper limit of the statutory reserve as per Article<br />
466 of the Turkish Code of Commerce (TCC).<br />
With respect to the determination of dividends to be distributed by publicly traded companies in line with the regulations<br />
of the CMB, such companies are required to distribute at least 30% (it was 20% in 2003) of their distributable<br />
profit for <strong>2004</strong> which is calculated on the basis of the financial statements prepared as per Communique Serial:XI/21.<br />
Depending on a decision of the company’s General Meeting of Shareholders to that respect, such dividend<br />
may be distributed in cash or in the form of bonus shares equivalent of not less than 30% of the distributable<br />
profit or in a combination of both.<br />
Though it is required under the CMB’s Communique No 7/242, of 25.02.2005, regarding the distribution of dividends,<br />
that the net distributable profit amount calculated in accordance with the CMB’s stipulations be taken as the<br />
basis, if the total amount calculated on the net distributable profit determined, as per the CMB’s regulations as to<br />
the minimum amount of profit to be distributed, could not be funded by by the net profit recognized in the stautory<br />
records, such total amount should be distributed, provided that statutory reserves are appropriated from such legal<br />
records as per the TCC. If the financial statements or statutory records prepared as per the CMB’s regulations<br />
reflect any loss for the year involved, no profit can be distributed. Additionally, with respect to consolidated financial<br />
statements prepared as per Communique Serial:XI/21 of the CMB, the amounts, which are reflected in the profit<br />
illustrated in the said financial statements and posted from the subsidiaries to the consolidated financial statements<br />
of the Parent Company but not decided by the General Meeting of Shareholders as distributable, should not<br />
be taken into account when calculating the net distributable profit. Further, if the General Meeting of Shareholders<br />
of the subsidiaries included in the cosolidation as per Communique Serial:XI/21 of the CMB decides to distribute<br />
profit, the amount of profit to be distributed to the Parent Company on the basis of such decision should be taken<br />
into account in the calculation of the Parent Company’s distributable profit, provided that the profit amount posted<br />
to the Parent Company’s consolidated financial statement from those of the said subsidiaries prepared in accordance<br />
with the above mentioned regularions shall be the upper limit.<br />
Since the Board of Directors of the Company has not yet decided to extend a proposal to the General Meeting of<br />
Shareholders for profit distribution, no dividend is determined and, therefore no dividend schedule is attached to<br />
the present report.<br />
The profit (loss) amounts of the companies, which are included in the consolidation, calculated for the current year<br />
as per the CMB regulations and the Tax Procedure Code (TPC) are as follows:
Net Profit<br />
(Loss) in<br />
Current Year<br />
as per CMB’s<br />
Regulations<br />
(TRY)<br />
Accumulated<br />
Profit (Loss) as<br />
per CMB’s Regulations<br />
(TRY)<br />
Net Profit<br />
(Loss) in<br />
Current Year<br />
as per TOC<br />
(TRY)<br />
Accumulated<br />
Profit (Loss)<br />
as per TOC<br />
(TRY)<br />
‹hlas Holding A.fi. (*) 6,591,373 67,147,517 1,007,455 127,625,146 TPC<br />
‹hlas Gazetecilik A.fi. (6,160,273) (97,594,956) (24,555,318) (128,252,209) Loss<br />
‹hlas Huzur Kargo A.fi 1,381,837 (6,858,106) (683,920) (5,327,925) Loss<br />
‹hlas Ev Aletleri ‹malat San.Tic,A.fi. 2,087,546 (1,294,105) 1,746,701 (6,952,072) Loss<br />
‹hlas Pazarlama A.fi 27,525,593 (192,581,122) 7,471,421 25,037,393 TPC<br />
‹hlas Sigorta A.fi. 341,470 (17,064,324) (2,920,120) (3,310,605) Loss<br />
‹hlas Haber Ajans› A.fi 1,624,858 (6,308,273) 309,810 (5,139,872) Loss<br />
‹hlas Yay›n Holding A.fi. (31,951,944) (33,129,638) 56,167 65,954 Loss<br />
Kristal Kola ve Meflrubat San.Tic.A.fi (3,863,682) (31,423,069) (3,015,394) (27,722,492) Loss<br />
Repafl Medya Rek, Prod. Bas. Hiz.A.fi (94,486) (5,645,687) (4,659,270) (924,819) Loss<br />
Kuzuluk Kapl.Sa¤. ve Petr.Ür.Tic.A.fi 1,670,888 (5,929,060) (6,095) 2,006,102 Loss<br />
‹hlas Net A,fi (1,155,316) (10,059,848) (980,834) (7,734,196) Loss<br />
Kristal G›da Da¤. ve Paz.Tic.A.fi 148,318 (1,031,770) (1,364,262) 681,940 Loss<br />
‹hlas E¤itim A.fi (259,187) (1,085,405) (95,128) (148,085) Loss<br />
‹hlas Medikal Ür. ve Sa¤l›k Hiz.A.fi (132,351) (644,635) (1,259) (48,274) Loss<br />
Huzur Radyo TV A.fi. (TGRT) (490,109) (74,604,296) (163,712) (80,416,653) Loss<br />
TGRT Haber TV A.fi. (507,902) 0 (508,410) 0 Loss<br />
TGRT Dijital TV A.fi. 299 (17,579) 299 0 Loss<br />
Bisan Bisiklet Otomotiv Ürt. San. Tic. A.fi. (4,259,350) (63,590,617) (5,529,807) (66,161,639) Loss<br />
Bisiklet Pazarlama ve Tic. A.fi. (4,539,587) (161,067,432) (1,671,237) (14,807,477) Loss<br />
Ege Mosan Motorlu Araçlar A.fi. (3,504,434) (56,748,546) 2,982,724 (14,564,964) Loss<br />
‹letiflim Magazin Gazt. Tic. A.fi (94,752) (115,936) 49,992 (130,518) Loss<br />
K›br›s Bürosu 6,976 (22,613) 73,136 (60,866)<br />
‹hlas Gayrimenkul Yat.Ort.A.fi (25,083,226) (9,437,120) (25,083,226) (40,771,323) Loss<br />
‹hlas Genel Antrep. Nakliyat ve Tic.A.fi. 79,139 (962,239) 44,222 (1,092,475) Loss<br />
‹hlas Yap› Turizm ve Sa¤l›k A.fi 222,480 (747,813) 6,043 (417,563) Loss<br />
‹hlas Tarsan Iml.San.Tic.A.fi 3,418,375 (9,325,889) (1,680,550) (4,869,402) Loss<br />
‹hlas Fuar Hizmetleri A.fi (104,242) (1,090,190) 18,404 (937,593) Loss<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2004</strong><br />
Amount<br />
Assessed for<br />
Profit<br />
Distribution<br />
(TRY)<br />
(*) ‹hlas Holding A.fi.’s solo profit calculated as per the CMB’s Communique Serial:XI/20. However, the Company’s<br />
consolidated profit calculated as per the CMB’s Communique Serial XI/21 is TRY 30,712,970, and its profit<br />
on the basis of its stautory records is TRY 1,007,455. Based on these amounts, the amount assessable for profit distribution<br />
is the profit based on the TPC.<br />
15- Changes in the quantity of goods and services produced during the year per each main production group:<br />
Statement regarding the goods and services produced during the year by the companies, which are included in<br />
the consolidation in accordance with the straight-line consolidation method, prior to the in-Group sales elimination<br />
performed:<br />
113
114<br />
Measuring <strong>2004</strong> 2003<br />
Unit Amount Amount<br />
‹HLAS HOLD‹NG A.fi.<br />
Housing (time-share)<br />
‹HLAS MATBAACILIK A.fi.<br />
Units 29,664 77<br />
Magazines Group Units - 167,000<br />
Calendars Group<br />
‹HLAS GAZETEC‹L‹K A.fi.<br />
Units - 2,480,250<br />
Newspapers Group Units 76,794,754 97,649,872<br />
Books in Turkish and Foreign Languages Units 79,574,838 3,795,550<br />
Black Ink<br />
‹HLAS KARGO A.fi.<br />
Liters 62,549 54,129<br />
Cargo Services<br />
‹HLAS HAYAT S‹GORTA<br />
TRY 29,376,053 -<br />
Insurance Services<br />
‹HLAS EV ALETLER‹<br />
TRY - 27,210,547<br />
Water Treatment Group Units 42,372 48,335<br />
Heaters Group Units 317,212 856<br />
Toasters Grubu Units 460 8,659<br />
Stoves Group Units 5,814 5,917<br />
Kitchen Robot Units - 21,506<br />
Tea Sets Units 7,225 20,958<br />
Cleaning Robot Units 44,562 42,741<br />
Others<br />
‹HLAS PAZARLAMA A,fi.<br />
Units 39,666 136,547<br />
Magazines Group<br />
‹HLAS HABER AJANSI A.fi.<br />
Units 39,000 -<br />
News Agency Services<br />
‹HLAS S‹GORTA<br />
TRY 17,515,879 29,974,186<br />
Insurance Services<br />
KR‹STAL KOLA MEfiRUBAT SAN. T‹C. A.fi.<br />
TRY 24,047,617 64,845,696<br />
Soft Drinks Liters 74,719,326 94,707,279<br />
Water Liters 23,767,938 23,358,324<br />
Kristal Mineral Water<br />
KUZULUK KAPLICA ‹Nfi. TUR. SA⁄LIK VE P.Ü.Afi<br />
Liters 2,524,786 3,110,054<br />
Hot Springs and Entertainment Services<br />
REPAfi MEDYA REK. PROD. BAS. H‹Z. A.fi<br />
TRY 671,490 464,994<br />
Advertisement, Show and Promotional Serv.<br />
‹HLAS NET A,fi<br />
TRY 21,373,317 7,243,511<br />
Subscription Services TRY 72,986 222,651<br />
Web Site Services TRY 34,574 987,393<br />
Technical Services<br />
KR‹STAL GIDA DA⁄. ve PAZ. T‹C.A.fi<br />
Produces no goods or services.<br />
TGRT HABER TV A.fi.<br />
TRY 186,022 700,135<br />
Advertisement Services<br />
TGRT D‹J‹TAL TV H‹ZM. A.fi.<br />
TRY 39.873 -<br />
Advertisement Services<br />
HUZUR RADYO TV A.fi.<br />
TRY 52,799 -<br />
Advertisement & Related Services<br />
B‹SAN B‹S‹KLET OTOMOT‹V ÜRET‹M SAN, VE T‹C. A.fi.<br />
TRY 22,906,838 -<br />
Bicycles Units 16,023 -<br />
Mopeds Units 2,683 -<br />
Wheelchairs Units 1,276 -<br />
Others<br />
B‹S‹KLET PAZARLAMA VE T‹CARET A.fi.<br />
Produces no goods or services.<br />
CYPRUS OFFICE<br />
Produces no goods or services.<br />
TRY 1,756,719 -
<strong>Annual</strong> <strong>Report</strong> <strong>2004</strong><br />
16- Changes in the quantity of goods and services sold during the year per each main sales group:<br />
Statement regarding the goods and services produced during the year by the companies, which are included in<br />
the consolidation in accordance with the straight-line consolidation method, prior to the in-Group sales elimination<br />
performed:<br />
‹HLAS HOLD‹NG<br />
Measuring <strong>2004</strong> 2003<br />
Unit Amount / Value Amount / Value<br />
Hospital Revenues TRY 18,415,939 17,087,844<br />
Housing Units 11,961 77<br />
Kitchen Appliances Units - 116,512<br />
Household Goods Units 529,482 1,560,125<br />
Rental Income TRY 2,241,887 2,826,291<br />
Educational Income TRY 5,971,279 6,005,267<br />
Various Commodity Sales TRY 52,707 6,053,070<br />
Others TRY 542,117 3,085,165<br />
‹HLAS MATBAACILIK A,fi.<br />
Magazine Group Units - 170,550<br />
Calendar Group Units - 2,567,916<br />
‹HLAS GAZETEC‹L‹K A.fi.<br />
Newspaper Group Units 76,794,754 97,649,872<br />
Books in Turkish and Foreign Lang. Units 79,574,838 3,795,550<br />
Black Ink Liters 62,549 54,129<br />
‹HLAS EV ALETLER‹<br />
Water Treatment Group Units 47,497 65,157<br />
Heater Group Units 318,117 239,143<br />
Toster Group Units 5,777 9,391<br />
Stove Group Units 149,826 105,689<br />
Kitchen Robot Units 2,767 13,332<br />
Tea Set Units 20,261 25,116<br />
Cleaning Robot Units 49,940 40,545<br />
Others Units 126,397 146,223<br />
‹HLAS PAZARLAMA A.fi.<br />
Electrical Houshold Appliances Units 1,058,946 1,151,077<br />
Glassware Units 1,645,717 403,770<br />
Clothing Units 21,796 71,396<br />
Cola Group Liters 6,085,255 7,970,470<br />
Electrical Personal Appliances Units 11,699 321,445<br />
Calendar and Book Group Units 6,890,491 6,361,030<br />
Cable Group Units 2,974,943 2,436,392<br />
Newspaper Group Units - 11,092,816<br />
Magazine Group Units - 170,550<br />
Calendar Group Units - 2,567,916<br />
Others Units 1,403,948 434,344<br />
115
116<br />
‹HLAS S‹GORTA A.fi.<br />
Insurance Services TRY 24,047,617 64,845,696<br />
‹HLAS HABER AJANSI A,fi.<br />
News Agency Services TRY 17,515,879 29,974,186<br />
KR‹STAL KOLA MEfiRUBAT SAN. T‹C. A.fi.<br />
Soft Drinks Liters 73,403,127 96,769,112<br />
Water Liters 23,270,797 23,334,544<br />
Kristal Mineral Water Liters 2,513,160 3,003,187<br />
REPAfi MEDYA REKLAM PRO. BAS. H‹Z. A.fi.<br />
Advertisement, Show and Promotional Services TRY 21,373,317 7,243,511<br />
‹HLAS NET A,fi.<br />
Subscription Services TRY 72,986 222,651<br />
Web Site Services TRY 34,574 987,393<br />
Technical Services TRY 186,022 700,135<br />
KR‹STAL GIDA A.fi.<br />
Cola Group Liters 67,763,967 148,668,542<br />
Mineral Water Liters 2,858,568 3,392,614<br />
Water Liters 23,059,033 20,441,962<br />
Others Units 1,871,529 178,332<br />
KUZULUK KAPLICA ‹Nfi. TUR. SA⁄LIK VE P.Ü.Afi<br />
Market Sales TRY 3,241,437 3,217,167<br />
Market, Food, Drink Sales TRY 1,915,289 1,532,557<br />
TGRT HABER TV A.fi.<br />
Advertisement Services TRY 39,873 -<br />
TGRT D‹J‹TAL TV H‹ZMETLER‹ A.fi.<br />
Advertisement Services TRY 52,799 -<br />
HUZUR RADYO TV A.fi.<br />
Advertisement and Equipment Leasing Services TRY 22,906,838 -<br />
B‹SAN B‹S‹KLET OTOMOT‹V ÜRET‹M SAN. VE T‹C. A.fi.<br />
Bicycles Units 9,790 -<br />
Moped Units 2,514 -<br />
Wheelchairs Units 1,317 -<br />
Motocup Units 811 -<br />
Others TRY 1,351,322 -<br />
B‹S‹KLET PAZARLAMA VE T‹CARET A.fi.<br />
Bicycles Units 9581 -<br />
Moped Units 2513 -<br />
Wheelchairs Units 325 -<br />
Motocup Units 808 -<br />
CYPRUS OFFICE<br />
No information available on this Office.
‹HLAS HOLD‹NG A.fi. INFLATION-ADJUSTED CONSOLIDATED CASH FLOW STATEMENT<br />
FOR THE YEARS 01.01-31.12.<strong>2004</strong> AND 01.01-31.12.2003<br />
(Amounts expressed in TRY in terms of its purchasing power at 31.12.<strong>2004</strong>)<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2004</strong><br />
CURRENT YEAR PREVIOUS YEAR<br />
ITEM ACCOUNT NAME 01.01.<strong>2004</strong>-31.12.<strong>2004</strong> 01.01.2003-31.12.2003<br />
A CASH AT THE BEGINNING OF THE YEAR 90,595,245 13,270,027<br />
B CASH INFLOW DURING THE YEAR 702,187,286 692,800,448<br />
1 CASH FROM SALES 472,209,135 347,075,512<br />
A- Net Sales 504,320,281 367,951,042<br />
B- Decrease in Trade Receivables 0 0<br />
C- Increase in Trade Receivables (-) (32,111,146) (20,875,530)<br />
2 CASH FROM OTHER OPERATIONS 9,235,903 30,372,683<br />
3 CASH FROM EXTRAORDINARY INCOME AND PROFIT 13,835,949 13,044,609<br />
4 CASH FROM INCREASE IN SHORT-TERM LIABILITIES 19,368,499 0<br />
A- Securities Issued 0 0<br />
B- Credits Received 19,368,499 0<br />
C- Other Increases 0 0<br />
5 CASH FROM INCREASE IN LONG-TERM LIABILITIES 0 70,529,173<br />
A- Securities Issued 0 0<br />
B- Credits Received 0 70,529,173<br />
C- Other Increases 0 0<br />
6 CASH FROM SHARE CAPITAL INCREASE 163,913,579 198,689,657<br />
7 CASH FROM SHARE PREMIUM 590,524 5,884,774<br />
8 OTHER CASH INFLOWS 23,033,697 27,204,041<br />
C CASH OUTFLOWS WITHIN THE YEAR 683,340,938 615,475,230<br />
1 CASH OUTFLOWS DUE TO COSTS 525,039,850 284,509,987<br />
A- Cost of Sales 405,840,799 286,524,615<br />
B- Increase in Inventories 102,266,109 0<br />
C- Decrease in Trade Payables (due to purchases) 35,288,545 19,781,857<br />
D- Increase in Trade Payables (due to purchases) (-) 0 0<br />
E- Expenses Not Requiring Cash Payments such as<br />
Depreciation and Cash Outflows (-) (18,355,603) (9,366,775)<br />
F- Decrease in Inventories (-) 0 (12,429,711)<br />
2 CASH OUTFLOWS DUE TO OPERATING EXPENSES 48,584,045 50,282,557<br />
A- R&D Expenses 409,870 233,219<br />
B- Marketing- Sales and Distribution Expenses 16,204,540 24,228,845<br />
C- General management Expenses 77,489,169 75,148,309<br />
D- Other Expenses Not Requiring Cash Payments such as<br />
Depreciation and Cash Outflows (-) (45,519,533) (49,327,816)<br />
3 CASH OUTFLOWS RELATED TO OTHER OPERATING EXPENSES AND LOSSES 33,011,006 33,239,046<br />
A- Ordinary Expenses and Losses 46,430,757 42,989,586<br />
B- Other Expenses and Losses Not Requiring Cash Payments such as<br />
Depreciation and Cash Outflows (-) (13,419,751) (9,750,540)<br />
4 CASH OUTFLOWS DUE TO FIN, EXPENSES 53,533,041 56,910,629<br />
5 CASH OUTFLOWS DUE TO EXTRAORDINARY EXPENSES AND LOSSES 6,453,088 7,177,531<br />
A- Extraordinary Expenses and Losses 8,481,873 8,510,382<br />
B- Other Expenses and Losses Requiring Cash Payments such as<br />
Depreciation and Cash Outflows (-) (2,028,785) (1,332,851)<br />
6 CASH OUTFLOWS DUE TO INVESTMENT IN LONG TERM ASSETS 11,598,569 101,865,394<br />
7 CASH OUTFLOWS DUE TO SHORT-TERM LIABILITIES (not related to purchases) 0 74,741,827<br />
A- Current Maturities of Marketable Securities 0 0<br />
B- Principal Repayments of Credits Received 0 74,741,827<br />
8 CASH OUTFLOWS DUE TO LONG-TERM LIABILITIES (not related to purchases) 29,336,614 0<br />
A- Current Maturities of Marketable Securities 0 0<br />
B- Principal Repayments of Credits Received 29,336,614 0<br />
9 TAXES AND OTHER LIABILITIES PAID 2,051,968 2,562,016<br />
10 DIVIDENDS PAID 0 0<br />
11 OTHER CASH OUTFLOWS 3,069,370 4,186,240<br />
D CASH AT THE END OF THE YEAR (A+B-C) 109,441,594 90,595,245<br />
E INCREASE OR DECREASE IN CASH (B-C) 18,846,349 77,325,218<br />
117
118<br />
‹HLAS HOLD‹NG A.fi. INFLATION-ADJUSTED CONSOLIDATED STATEMENT OF COST OF SALES<br />
FOR THE YEARS 01.01-31.12.<strong>2004</strong> AND 01.01-31.12.2003<br />
(Amounts expressed in TRY in terms of its purchasing power at 31.12.<strong>2004</strong>)<br />
ITEM ACCOUNT NAME CURRENT YEAR PREVIOUS YEAR<br />
PRODUCTION COST<br />
01.01.<strong>2004</strong> - 31.12.<strong>2004</strong> 01.01.2003 - 31.12.2003<br />
A Direct Cost of Raw Materials 53,018,830 42,346,788<br />
B Direct Cost of Workmanship 9,442,316 6,228,762<br />
C General Production Expenses 24,045,325 11,678,274<br />
D Semi-finished Products Used (1,057,058) (703,962)<br />
1 Inventory at the Beginning of the Year ( + ) 704,632 671<br />
2 Inventory at Year-end ( - ) 1,761,690 704,632<br />
COST OF PRODUCTS MANUFACTURED 85,449,414 59,549,862<br />
E Change in Products Inventory (86,086,393) 7,790,311<br />
1 Inventory at the Beginning of the Year ( + ) 20,138,545 27,928,855<br />
2 Inventory at Year-end ( - ) 106,224,938 20,138,544<br />
3 Internal Consumption ( - )<br />
I COST OF PRODUCTS SOLD (636,979) 67,340,173<br />
COMMERCIAL OPERATIONS ( 153 )<br />
A Opening Inventory of Merchandise ( + ) 17,762,512 19,197,384<br />
B Purchased During the Year ( + ) 295,215,960 142,989,905<br />
C Closing Inventory of Merchandise ( - ) 20,348,610 17,762,513<br />
II COST OF MERCHANDISE SOLD 292,629,862 144,424,777<br />
III COST OF SERVICES SOLD 113,847,915 74,759,666<br />
COST OF SALES ( I+II+III ) 405,840,799 286,524,616
<strong>Annual</strong> <strong>Report</strong> <strong>2004</strong><br />
119
120<br />
Contact Information for Companies<br />
Ihlas Holding, Inc.<br />
‹hlas Holding Merkez Binas›, Holding Blok, 29 Ekim<br />
Caddesi 23, 34197 Yenibosna, Istanbul, Turkey<br />
Tel: +90 (212) 454 2000<br />
Fax: +90 (212) 454 2136<br />
Web: www.ihlas.com.tr<br />
e-mail: ihlas@ihlas.com.tr<br />
Ihlas Media Holding, Inc.<br />
‹hlas Holding Merkez Binas›, Holding Blok, Kat 3, 29<br />
Ekim Caddesi 23, 34197 Yenibosna, Istanbul, Turkey<br />
Tel: +90 (212) 454 2422<br />
Fax: +90 (212) 454 2427<br />
Web: www.ihlasyayinholding.com.tr<br />
e-mail: info@ihlasyayinholding.com.tr<br />
TGRT (Huzur Radio TV)<br />
‹hlas Holding Merkez Binas›, 29 Ekim Caddesi 23,<br />
34197 Yenibosna, ‹stanbul, Turkey<br />
Tel: +90 (212) 454 5600<br />
Fax: +90 (212) 454 5666<br />
Web: www.tgrt.com.tr<br />
e-mail: tgrt@tgrt.com.tr<br />
TGRT News TV<br />
‹hlas Holding Merkez Binas›, 29 Ekim Caddesi 23,<br />
34197 Yenibosna, ‹stanbul, Turkey<br />
Tel: +90 (212) 454 7070<br />
Fax: +90 (212) 454 5656<br />
Web: www.tgrthaber.com.tr<br />
e-mail: tgrthaber@tgrthaber.com.tr<br />
TGRT Marketing Channel<br />
‹hlas Holding Merkez Binas›, 29 Ekim Caddesi 23,<br />
34197 Yenibosna, Istanbul, Turkey<br />
Tel: +90 (212) 444 4949<br />
Fax: +90 (212) 454 5656<br />
Web: www.tgrtpazarlama.com.tr<br />
e-mail: info@tgrtpazarlama.com.tr<br />
Türkiye Newspaper<br />
‹hlas Holding Merkez Binas›, Medya Blok, Kat 3, 29<br />
Ekim Caddesi 23, 34197 Yenibosna, ‹stanbul, Turkey<br />
Tel: +90 (212) 454 3232<br />
Fax: +90 (212) 454 3231<br />
Web: www.turkiyegazetesi.com<br />
e-mail: bilgi@tg.com.tr<br />
IHA (Ihlas News Agency)<br />
‹hlas Holding Merkez Binas›, Medya Blok, Kat 2, 29<br />
Ekim Caddesi 23, 34197<br />
Yenibosna, ‹stanbul, Turkey<br />
Tel: +90 (212) 454 3333<br />
Fax: +90 (212) 454 3965<br />
Web: www.iha.com.tr<br />
e-mail: info@iha.com.tr<br />
Iletiflim Magazine Publication, Inc,<br />
‹hlas Holding Merkez Binas›, Medya Blok, Kat 1, 29<br />
Ekim Caddesi 23, 34197<br />
Yenibosna, ‹stanbul, Turkey<br />
Tel: +90 (212) 454 2500<br />
Fax: +90 (212) 454 2555<br />
Web: www.img.com.tr<br />
e-mail: info@img.com.tr<br />
Ihlas Net, Inc.<br />
‹hlas Holding Merkez Binas›,<br />
29 Ekim Caddesi 23, 34197<br />
Yenibosna, ‹stanbul, Turkey<br />
Tel: +90 (212) 454 2600<br />
Fax: +90 (212) 454 2693<br />
Web: www.ihlasnet.com.tr<br />
e-mail: bilgi@ihlas.net.tr<br />
Ihlas Contruction Group<br />
‹hlas Holding Merkez Binas›<br />
29 Ekim Caddesi 23, 34197<br />
Yenibosna, ‹stanbul, Turkey<br />
Tel : +90 (212) 454 4550<br />
Fax : +90 (212) 454 4560<br />
Web: www.ihlasyapi.com.tr<br />
e-mail: iyapi@ihlas.net.tr<br />
Güzelflehir<br />
Güzelce, Kumburgaz, ‹stanbul<br />
Tel : +90 (212) 884 1212<br />
Fax : +90 (212) 884 0888<br />
Web: www.guzelsehir.com<br />
e-mail: bilgi@guzelsehir.com
Ihlas REIT<br />
fiaflmaz Plaza K: 12 D: 25 Saniye Ermutlu Caddesi<br />
81090 Kozyata¤›, Kad›köy, ‹stanbul, Turkey<br />
Tel: +90 (216) 464 0860<br />
Fax: +90 (216) 464 0858<br />
Web: www.ihlasgyo.com.tr<br />
e-mail: bilgi@ihlasgyo.com.tr<br />
Ihlas Oxford Mortgage, Inc.<br />
fiaflmaz Plaza K: 12 D: 25 Saniye Ermutlu Caddesi<br />
81090 Kozyata¤›, Kad›köy, ‹stanbul, Turkey<br />
Tel: +90 (216) 464 0860<br />
Fax: +90 (216) 464 0858<br />
Ihlas Marketing, Inc.<br />
‹hlas Holding Merkez Binas› 29 Ekim Caddesi 23,<br />
34197 Yenibosna, ‹stanbul, Turkey<br />
Tel: +90 (212) 454 6200<br />
Fax: +90 (212) 454 6292<br />
Web: www.ihlaspazarlama.com.tr<br />
e-mail: musteri@ihlaspazarlama.com.tr<br />
Turkiye Hospital<br />
Darülaceze Cad. 80720 fiiflli, ‹stanbul, Turkey<br />
Tel: +90 (212) 314 1414<br />
Fax: +90 (212) 314 1415<br />
Web: www.turkiyehastanesi.com<br />
e-mail: info@turkiyehastanesi.com<br />
Ihlas Armutlu Holiday Village<br />
Bozburun Mevkii, Armutlu, Yalova, Turkey<br />
Tel: +90 (226) 531 1000<br />
Fax: +90 (226) 531 1003<br />
Web: www.ihlasarmutlu.com<br />
e-mail: bilgi@ihlasarmutlu.com<br />
Kuzuluk Thermal Houses<br />
Kuzuluk Beldesi, Akyaz›, Sakarya, Turkey<br />
Tel: +90 (264) 421 0020<br />
Fax: +90 (264) 421 0020<br />
Web: www.ihlaskuzuluk.com<br />
e-mail: info@ihlaskuzuluk.com<br />
Ihlas Educational Service Group<br />
Fatih Cd. No:1, Yenibosna, ‹stanbul, Turkey<br />
Tel: +90 (212) 639 6870<br />
Fax: +90 (212) 639 6884<br />
Web: www.ihlaskoleji.com<br />
e-mail: info@ihlaskoleji.com<br />
Ihlas Home Appliances, Inc.<br />
Mermerciler Sitesi 7. Cad. No:12<br />
34900 Beylikdüzü, ‹stanbul, Turkey<br />
Tel: +90 (212) 875 3562<br />
Fax: +90 (212) 875 3987<br />
Web: www.ihlasevaletleri.com.tr<br />
e-mail: ihlasevaletleri@ihlasevaletleri.com.tr<br />
Kristal Cola, Inc.<br />
‹hlas Holding Merkez Binas›, Holding Blok, Kat 2, 29<br />
Ekim Caddesi 23, 34197 Yenibosna, ‹stanbul, Turkey<br />
Tel: +90 (212) 454 2054<br />
Fax: +90 (212) 454 2050<br />
Web: www.kristalkola.com.tr<br />
e-mail: info@kristalkola.com.tr<br />
Bisan, Bicycle, Motor Scooter, Automotive Inc.<br />
Ankara Karayolu 25. Km.<br />
35170 Kemalpafla - ‹zmir, Turkey<br />
Tel: +90 (232) 877 07 40 (PXB)<br />
Fax: +90 (232) 877 00 39<br />
Web: www.bisanlar.com.tr<br />
e-mail: info@bisanlar.com.tr<br />
Ihlas Insurance, Inc.<br />
‹hlas Holding Merkez Binas›, Finans Blok, Kat 5, 29<br />
Ekim Caddesi 23, 34197 Yenibosna, ‹stanbul, Turkey<br />
Tel: +90 (212) 454 1000<br />
Fax: +90 (212) 454 1198<br />
Web: www.ihlassigorta.com.tr<br />
e-mail: posta@ihlassigorta.com.tr
‹hlas Holding A.fi.<br />
‹hlas Holding Merkez Binas›, Holding Blok<br />
29 Ekim Caddesi No: 23 34197 Yenibosna / ‹stanbul / Turkey<br />
www.ihlas.com.tr
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