Under Construction Annual Report 2009

Transcription

1 Under Construction Annual Report 2009

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3 Going forward... Toward the best. Prof. Dr. İhsan Doğramacı

4 20 Company Profile and Shareholding Structure 22 Vision, Mission and Corporate Values 24 Construction Sector in Turkey and around the World 30 Bilkent Holding in Brief 34 Tepe İnşaat in Brief 40 Financial Highlights 46 Message from the Management 50 Board of Directors and Board of Auditors 50 Senior Management 52 Milestones 64 Subsidiaries and Affiliates Operations Domestic Projects International Projects Investment Projects 94 TAV Havalimanları (TAV Airports) 110 TAV İnşaat (TAV Construction) 114 Future Projects and Strategic Planning 116 Human Resources 120 Occupational Safety, Environment and Quality Policy 122 In Remembrance of Prof. Dr. İhsan Doğramacı 136 Bilkent University 143 Consolidated Financial Statements and Auditors Report as of December 31, 2009

5 Please do not read this report without wearing a helmet

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7 Forum Kayseri Shopping Center Commencement Date: December 14, 2009 Contract Value: 24,600,000 Delivery Date: November 30, 2010 Construction Area: 57,000 square meters Client: Multi Turkmall Onyediemlak Yat. İnş. Tic. A.Ş.

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9 Bilkent University 2010 Projects Commencement Date: January 7, 2010 Contract Value: TL 11,300,000 Delivery Date: December 31, 2010 Construction Area: Bilkent Campus Client: Bilkent University Rectorate

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11 Meteksan Concept Building Commencement Date: October 1, 2009 Contract Value: TL 10,000,000 Total Construction Area: 11,760 square meters Delivery Date: July 2, 2010 Client: Bilkent University Rectorate

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13 Akdeniz University II. Section Servicing Construction Project Commencement Date: August 2, 2002 Contract Value: TL 145,000,000 Total Construction Area: 109,000 square meters Delivery Date: December 31, 2013 Client: Akdeniz University Rectorate

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15 Hacettepe University Hospitals Retrofit and Large Scale Renovation Construction Commencement Date: October 9, 2009 Contract Value: TL 93,700,000 Total Construction Area: 80,000 square meters Delivery Date: December 23, 2011 Client: Hacettepe University Directorate of Strategy Development

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17 Narcity Housing Project Commencement Date: January 2006 Contract Value: US$ 300,000,000 Total Construction Area: 285,000 square meters Delivery Date: Plots C, D and E opened for residential occupancy in 2007, plots F and G opened for residential occupancy in mid Plot A will be delivered at the end of 2010; plot B will be delivered at the end of 2011.

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19 Tepe Prime Project Commencement Date: October 2008 Contract Value: TL 320,000,000 Total Construction Area: 92,800 square meters Delivery Date: October 2011 Land Owner: Turkish Cement Manufacturers Association

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21 Sulaimaniya University, Iraq Contract Date: January 17, 2005 Contract Value: US$ 305,300,000 Total Construction Area: 332,966 square meters Delivery Date: December 31, 2012 Client: Republic of Iraq, Ministry of Higher Education and Scientific Research

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23 İhsan Doğramacı Erbil Foundation Schools Construction, Iraq Contract Date: July 15, 2008 Contract Value: US$ 31,500,000 Total Construction Area: 36,592 square meters Delivery Date: August 31, 2011 Client: İhsan Doğramacı Erbil Foundation

24 20 Company Profile and Shareholding Structure Since 1969, Tepe İnşaat has been active in the construction sector, one of the most important pillars of Turkish economic development. Following 40 years in this gigantic and challenging sector, the Company has proudly assumed leadership in its field with a consistent list of achievements since day one. Responding to rapidly-evolving demands of the modern world with equally rapid solutions, Tepe İnşaat considers the peak merely as the point of departure for development, success and service rather than a target. That is why Tepe İnşaat has constantly strived to go to the leading edge, toward being the best even after 40 years at the peak of its sector. As one of the most powerful and effective architects of urban transformation, Tepe İnşaat has played an important role in the development of Turkey by undertaking numerous large-scale projects such as hospitals, airport terminals, pipelines, power plants, business and shopping centers. An important source of pride for Tepe İnşaat has been its contribution to social and economic development, based on Prof. Dr. İhsan Doğramacı s philosophy to be the leading edge, toward being the best. Having always been at the peak of the construction sector through 40 years filled with successive achievements, Tepe İnşaat constantly strives to go to the leading edge, toward being the best. Tepe İnşaat meets the demands of the day in its field of activity with great care and thoroughness. Striving constantly to enhance its status with the force provided by its employees efforts, support and know how, the Company considers it as a national responsibility to carry its experience, accumulated knowledge and vision beyond the region.

25 Tepe İnşaat Annual Report 2009 Introduction ˊˊ Company Profile and Shareholding Structure 21 Share Share of Number of Share Shareholders Class Capital Shares % Bilkent Holding A.Ş. A Bilkent Holding A.Ş. B 480,839, ,839, Tepe Emlak Yat. İnş. A.Ş. B 74,666,732 74,666, Tepe Savunma ve Güv. Sis. A.Ş. B 4,072,482 4,072, Tepe Mobilya Sanayi ve Tic. A.Ş. B 249, , Tepe Home Mob. Dek. A.Ş. B 154, , Meteksan Matbaacılık A.Ş. B 17,234 17, As of December 31, 2009 Tepe İnşaat s registered capital is TL 560 million. Shareholding Structure (%) 0.8% 13.3% 85.9% Other Tepe Emlak Yat. İnş. A.Ş. Bilkent Holding A.Ş. Note: As a result of the Ordinary General Assembly Meeting dated April 14, 2010, Tepe İnşaat Sanayi A.Ş. capital was raised to TL 625,000,000.

26 22 Vision, Mission and Corporate Values Tepe İnşaat will continue to create added value to Bilkent University and Turkey with its experience and know-how, highly qualified human resources, state-of-theart technology and a service philosophy that prioritizes customer satisfaction, as it has for the last 40 years.

27 Tepe İnşaat Annual Report 2009 Introduction ˊˊ Vision, Mission and Corporate Values 23 Vision To engage in manufacturing at world standards, adopting the principle of uncompromised quality at every stage and all details of each project. To conscientiously adopt all contemporary requirements in the employees areas of expertise utilizing their strength, support and knowledge, with the awareness that employees are a company s most valuable asset and to further advance the Company s market position with sustainable growth perspectives. Mission To generate resources for Bilkent University that allows it to develop and grow. Corporate Values Tepe İnşaat is: Focused on customer satisfaction Constantly monitors evolving customer expectations to achieve continuous customer satisfaction. Dedicated to ethical values and the law Strives for competitiveness, productivity and profitability and works to provide the best service and product quality in its field; it is totally dedicated to the laws and ethical values. Aware of its responsibilities Is cognizant of its national responsibility and major corporate goals to expand its experience, know-how and vision beyond the region.

28 24 Construction Sector in Turkey and around the World The construction sector plays a critical role in the economic structure, owing to its direct link to the production of goods and services, its intensive use of the labor force and its contribution to social and economic welfare.

29 Tepe İnşaat Annual Report 2009 Introduction ˊˊ Construction Sector in Turkey and around the World 25 The construction sector is one of the most important areas of activity in Turkey capable of mobilizing over 200 subsectors. The construction sector is closely tied to overall economic growth and development. In periods of rapid economic growth and development, the construction sector also expands. The sector plays a critical role in the economic structure, owing to its direct link to the production of goods and services and its intensive use of the labor force; it also contributes to social and economic welfare. The added value and employment generated by the sector are the driving forces behind national economic development. With its ample experience and potential in national and international arenas, the Turkish construction sector is one of the most important areas of activity in Turkey and is able to mobilize over 200 subsectors. Based on large scale capital investments, the construction sector has a direct influence on hundreds of professions significantly affecting the process of employment and production. Based on large scale capital investments, the construction sector has a direct influence on hundreds of professions; it represents a significant effect on employment and production. Following a period of rapid growth between 2001 and 2007, the world economy began slipping into a deep crisis in In order to diminish the impact of this economic crisis and ameliorate troubled economic dynamics, various measures were taken and a new post-crisis period began. The economic crisis that had its start in 2008 included a financial crisis as well as a recession; it appears to be deeper and longer lasting than the crises experienced in 1975, 1982 and The financial crisis, the first component of the economic crisis, erupted in developed countries with mortgage credit repayment problems. Later, as other assets in their balance sheets decreased in value, banks lost significant parts of their capital and consequently their payment capacity. The financial crisis quickly acquired a systematic character; due to the interrelatedness of their balance sheets, all banks started to experience losses in capital and payment capacity.

30 26 ˊˊ Construction Sector in Turkey and around the World Recession, the second component of the economic crisis, signifies a dwindling of national economies production of goods and services in comparison with previous periods. The crisis appeared initially in some developed economies, with a slowing of growth and even a serious contraction in others. The onset of the recession in developed countries resulted in serious negative repercussions for developing economies. Starting at the onset of the economic crisis, measures were taken to minimize these effects in two stages; the first contraction and normalization in 2009 and 2010, followed by a transition to stable growth between 2011 and In the new economic period, the real-estate industry is expected to limit expansion; however, housing demand will continue to assert itself independently of economic events. In the new economic period, the real-estate industry is expected to display a more limited expansion than in the growth period. The housing sector will see demand continue to assert itself independent of economic events. Between 2009 and 2014, housing demand is estimated at 3.28 million units; however, a slowdown is expected in the economic dynamics that drive growth in the commercial real-estate sector. In particular, investment decisions for shopping center projects might be delayed. In the new economic period, financing for commercial real-estate will become limited resulting in higher costs, shorter maturity periods, lower leverage rates, higher need for shareholders equity, risk avoidance and increasing financing via bank credits.

31 Tepe İnşaat Annual Report 2009 Introduction ˊˊ Construction Sector in Turkey and around the World 27

32 28 ˊˊ Construction Sector in Turkey and around the World The growth rate of the GDP in current prices - according to fields of economic activity and in basic prices, , TL 1,000 Period/Field of economic activity 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter st Quarter 2nd Quarter 3rd Quarter 4th Quarter 2009 Agriculture, hunting and forestry Fishing (14.2) 3.5 (14.8) (17.3) (13.1) Mining and quarrying (0.8) Manufacturing (1.9) 8.4 (15.8) (13.9) (6.4) 9.0 (7.2) Electricity, gas, steam and hot water generation and distribution (0.6) (7.0) 10.5 Construction (0.2) 8.9 (12.5) (23.4) (23.6) (11.3) (18.1) Wholesale and retail trade (2.3) 12.8 (20.3) (20.6) (10.8) 6.1 (11.8) Hotels and restaurants Transports, storage and communications (5.9) (11.1) (8.4) 1.9 (5.9) Activities by financial intermediaries House ownership Real-estate, leasing and business activities Public management and defense, obligatory social insurance Education Health and social services Other social and personal service activities (0.7) Households with domestic employees Sectors total (0.5) (2.7) Indirectly measured financial intermediation services Taxes-subsidies (2.9) 9.0 (11.9) (6.4) (1.0) GDP (in buyer s prices) (2.7) (4.0)

33 Tepe İnşaat Annual Report 2009 Introduction ˊˊ Construction Sector in Turkey and around the World 29

34 30 Bilkent Holding in Brief With 40 years experience and over 40 companies under its umbrella, Bilkent Holding has a very wide array of activities ranging from construction to information and communication technology, from various branches within the manufacturing sector to the investment and service industries.

35 Tepe İnşaat Annual Report 2009 Introduction ˊˊ Bilkent Holding in Brief 31 Bilkent Holding s manufacturing investments focus on furniture, kitchens, concrete panels as well as paper and cardboard manufacturing. With the establishment of Dilek İnşaat in 1969, the Holding took its first steps toward success. Bilkent Holding was founded in 1987 and soon became one of Turkey s most prestigious corporations. Today, the corporation has more than 40 companies consolidated under its umbrella. Immediately following the establishment of Dilek İnşaat, Tepe Ağaç Metal ve İnşaat Şirketi became the core for today s Tepe Mobilya, Tepe Home and Tepe İnşaat companies. The 40 companies that were established over the next 40 years formed the rapidly growing and developing Bilkent family of companies. The broad-based activities of Bilkent Holding today encompass construction, information and communication technology, various branches within the manufacturing sector as well as investment and service industries. Bilkent Holding, growing daily in line with the goals set for itself, belongs to Bilkent University. In line with its goal of transforming Turkish youngsters into highly qualified individuals, Bilkent Holding allocates resources to the Bilkent University. Holding companies operating in the construction industry are justifiably proud of their contribution to many of the country s assets; valuable educational facilities, healthcare complexes, hospitals, airport terminals, infrastructure facilities, pipelines, power plants, housing and prefabricated buildings. The Group s manufacturing investments focus on furniture, kitchens, concrete panels as well as paper and cardboard manufacturing. In addition, with more than twenty factories as well as publishing and state-ofthe-art printing facilities, the Group is involved in manufacturing activities in many cities throughout the country. Bilkent Holding also plays a responsible, effective and determining role in education in Turkey, the country with the youngest population in Europe. Steering the Turkish economy with strong, large-scale, long-term investments, Bilkent Holding allocates resources to Bilkent University, which strives to transform Turkish youngsters into highly qualified individuals, by supporting their personal development.

36 32 ˊˊ Bilkent Holding in Brief Bilkent Holding Subsidiaries and Affiliates Total Capital Share Capital Share Company (TL) (TL) (%) Bilan Bilkent Ankara Tepe Otel İşletmeciliği A.Ş. 5,500, , Bilbak A.Ş. 50,000 25, Bildes A.Ş. 50,000 25, Bilen A.Ş. 50,000 49, Bilenerji A.Ş. 14,000, , Bilintur A.Ş. 40,000,000 7,000, Bilsigorta A.Ş. 150, , Dilek İnşaat A.Ş. 22,000,000 19,000, Meteksan Matbaacılık ve Tek. San. Tic. A.Ş. 62,526,000 56,415, Meteksan Matbaacılık ve Tek. San. Tic. A.Ş. 62,526, Meteksan Uzay Teknolojileri A.Ş. 500,000 5, Optisis İletişim ve Bilgi Teknolojileri A.Ş. 300,000 3, Sports Internatonal Bilkent Fitness ve Spor Merkezleri A.Ş. 13,500, Tepe Betopan A.Ş. 20,000, , Tepe Emlak A.Ş. 160,000,000 36,855, Tepe Home A.Ş. 61,000,000 12,227, Tepe Home A.Ş. 61,000, Tepe İnşaat A.Ş. 560,000, ,839, Tepe İnşaat A.Ş. 560,000, Tepe Mobilya A.Ş. 50,000,000 2,337, Tepe Prefabrik İnş. San. Tic. A.Ş. 4,500, Tepe Savunma A.Ş. 13,000, Tepe Servis ve Yönetim A.Ş. 50, Turkofon A.Ş. 50,000 25,

37 Tepe İnşaat Annual Report 2009 Introduction ˊˊ Bilkent Holding in Brief 33

38 34 Tepe İnşaat in Brief Tepe İnşaat takes great pride in the completion of a wide range of exceptional projects; vital urban infrastructure construction, power plants, airports -Turkey s gateway to the world - shopping centers, modern residential projects and healthcare and educational facilities.

39 Tepe İnşaat Annual Report 2009 Introduction ˊˊ Tepe İnşaat in Brief 35 Since its first Project, Tepe İnşaat defined the peak as the most fundamental principle that determines the limits of its service policy. One of the pioneers and innovators of the Turkish construction industry with its strong financial structure, vast experience accumulated over the years and well-respected corporate identity, Tepe İnşaat Sanayi A.Ş. plays a crucial and indispensable role in the development of Turkey and is the flagship of Bilkent Holding. Tepe İnşaat Sanayi A.Ş. commenced operations as a member of the Tepe Group established in Ankara in 1969 by the Hacettepe University Foundation. Since the reorganization of the Group in 1987, the Company has continued working under the roof of Bilkent Holding, a subsidiary of Bilkent University. The vital functions assumed by the construction industry, a pillar of development, require targeting the best construction at all times, beginning with the smallest details. Active in this critically important sector, Tepe İnşaat always pursues perfection totally aware of the social implications of its activities. Since its first project, Tepe İnşaat defined the peak as the most fundamental principle that determines the limits of its service policy. While responding to the modern world s rapidly changing expectations with the most suitable solutions, the Company has always seen the peak as a point of departure with regard to development, success, competition and service rather than just a destination. Since its inception, Tepe İnşaat has been a company that forges ahead with its mission to transfer the value and resources it creates to the development and consolidation of Billkent University. Tepe İnşaat approaches every project it undertakes with this perspective; working with excellent cooperation and teamwork to ensure that all contributors feel that they are part of the project. The construction sector, especially contracting, cannot be defined simply as the creation of buildings. Contracting, the make-or-break point of a project, is the actualization of the loyalty and respect for the dream underlying a certain project. In all of the projects it undertakes, Tepe İnşaat acts with this sensitivity and creates a work environment in which those who labor for the project become one with the dream that underlies the project and thus achieving perfect team work. Since its inception, Tepe İnşaat has assumed the mission of transferring the value and resources that it generates to further develop and reinforce Bilkent University, Turkey s first private university and one of the country s leading educational facilities. This mission is the primary element differentiating the Company from others in the industry. Every successful project completed by Tepe İnşaat provided thousands of young people with educational opportunities.

40 36 ˊˊ Tepe İnşaat in Brief UKRAINE ALBANIA MACEDONIA TURKEY TUNISIA LIBYA EGYPT

41 Tepe İnşaat Annual Report 2009 Introduction ˊˊ Tepe İnşaat in Brief 37 RUSSIA KAZAKHSTAN GEORGIA AZERBAIJAN IRAQ AFGHANISTAN SAUDI ARABIA QATAR UNITED ARAB EMIRATES OMAN

42 38 ˊˊ Tepe İnşaat in Brief Tepe İnşaat takes great pride in having completed a wide range of exceptional projects including vital urban infrastructure construction, power plants, airports -Turkey s gateway to the world- shopping centers, residential projects that transform the image of Turkey with their contemporary makeup and healthcare and educational facilities. While activating such important dynamics in Turkish social and economic life, Tepe İnşaat is also dedicated to its mission of channeling resources into education. Today Tepe İnşaat enjoys a strong market position with diverse operations ranging from architectural projects to construction, landscaping and interior design. The factors underlying this position are the Company s deeply rooted experience, both domestically and internationally, highlyqualified and skilled staff composed of the sector s best employees, state-of-the-art technology, an emphasis on high quality and fast, flexible service focused on customer satisfaction. Today Tepe İnşaat enjoys a strong market position with diverse operations ranging from architectural projects to construction, landscaping and interior design. Considering it a national obligation and responsibility to expand its experience, know-how and vision beyond the borders of Turkey, Tepe İnşaat has become an important brand in the international arena as well. Following the completion of a wide range of construction projects amounting to more than US$ 4.4 billion over the past forty years, Tepe İnşaat also successfully undertakes investment projects that combine land acquisition, financing, project drafting, construction and marketing activities in a well-integrated system. As it has, over the past four decades, Tepe İnşaat shall continue to utilize its know-how and experience, highly-qualified human resources and advanced state-of-the-art technology to provide added value to the Bilkent University and consequently Turkey, based on its service philosophy prioritizing customer satisfaction. Serving various segments of the industry utilizing its superior expertise and vast experience, Tepe İnşaat has a service policy that strives to continuously improve life and expand its own institutional know-how with each completed project. Tepe İnşaat aims for the highest level of customer satisfaction, considering every person and company that it serves as an indispensable part of the value chain it creates. The Company forges ahead to its future goals with confidence. Considering it as a national obligation and responsibility to expand its experience, knowhow and vision beyond the borders of Turkey, Tepe İnşaat has become an important brand in the international arena as well.

43 Tepe İnşaat Annual Report 2009 Introduction ˊˊ Tepe İnşaat in Brief 39

44 40 Financial Highlights Balance Sheet Figures (TL thousands) 2008 % 2009 % A- Current Assets 480, , B- Fixed Assets 892, , Total Assets 1,372, ,405, A- Short-term Liabilities 212, , B- Long-term Liabilities 417, , C- Shareholders Equity 742, , Total Liabilities 1,372, ,405, Income Statement Figures (TL thousands) Gross Sales 551, ,091 Sales Discounts (-) (413) (25) Net Sales 550, ,065 Cost of Sales 431, ,115 Gross Profit (Loss) from Sales 119,073 31,951 Operating Expenses (5,612) (4,301) Operating Profit (Loss) 113,461 27,650 Ordinary Revenue and Income from Other Operations 111,509 65,909 Ordinary Expense and Loss from Other Operations (115,184) (57,204) Financial Expense (18,413) (64,893) Ordinary Profit (Loss) 91,373 (28,539) Extraordinary Revenue and Income 17,702 15,229 Extraordinary Expenses and Losses (124,899) (34,948) Profit (Loss) for the Period (15,824) (48,258)

45 Tepe İnşaat Annual Report 2009 Introduction ˊˊ Financial Highlights 41 Total Assets (TL thousands) ,405,400 1,372,698 Shareholders Equity (TL thousands) , ,484 Net Sales (TL thousands) , ,774 Operating Profit (Loss) (TL thousands) , ,461 Extraordinary Revenue and Income (TL thousands) ,229 17,702

46 42 ˊˊ Financial Highlights Financial Ratios Liquidity Ratios Current Ratio Acid-Test Ratio Cash Ratio Operational Ratios Receivables Turnover Rate Receivables Collection Period Current Assets Turnover Rate Net Working Capital (TL) 267,899, ,712,086 Net Working Capital Turnover Rate Tangible Assets Turnover Rate Total Assets Turnover Rate Shareholders Equity Turnover Rate Financial Leverage Ratios Financial Leverage Ratio Financing Ratio Ratio of Shareholders Equity to Total Assets Ratio of Short-term Debts to Total Liabilities Ratio of Short-term Debts to Total Debts Ratio of Long-term Debts to Total Liabilities Ratio Analysis in Accordance with the Public Procurement Law Current Ratio Ratio of Shareholders Equity to Total Assets Ratio of Short-term Financial Liabilities to Total Shareholders Equity 0 0

47 Tepe İnşaat Annual Report 2009 Introduction ˊˊ Financial Highlights 43 Current Ratio Acid-Test Ratio Cash Ratio Financing Ratio Total Assets Turnover Rate

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50 46 Message from the Management Despite economic contraction and the continuing negative outlook, Tepe İnşaat maintained its successful graphic in 2009, especially for investment projects, thanks to a stable growth policy.

51 Tepe İnşaat Annual Report 2009 Introduction ˊˊ Message from the Management 47 In the Tepe Prime Business - Residence - Avenue Project put up for sale in June 2009, sales performance attained 80% in those phases offered for sale in December. Contraction of the world economy, which began with the sub-prime mortgage crisis in the American real estate industry from mid-2007 onwards, resulted in a global decrease in liquidity during 2008 and 2009 and a shrinking of the real sector. In addition, the drop in consumer expenditure and consumers propensity to spend continued well into The 2008 economic crisis, felt throughout the world, was clearly different from other national or global crises, judging by the contraction and narrowing observed in almost all industries. The industrial and financial giants of Europe, America and Southern Asia experienced severe bottlenecks due to the crisis; many of them survived thanks to government subsidies and credits. As these tough conditions continue to prevail across many countries, industries and companies, a possible relief is expected for as late as Even 2010 is expected to be stagnant according to many international projections, a fact which worries many governments and companies. An analysis of the 2008 economic crisis suggests the drop in oil prices, low interest rates due to sustained loose monetary policies and the surge in risk appetite stemming from financial engineering schemes were the main culprits. In this process, another important factor leading to global imbalances was the coexistence of excessive consumption in one corner of the world (the US and European countries) with excessive saving in another (Asian countries).

52 48 ˊˊ Message from the Management In the preceding period, global imbalances have lead to a significant contraction in international construction markets; numerous international and public investors have either stopped ongoing projects or suspended new ones. Under such circumstances Turkish contractors have had a hard time finding alternative target countries due to the worldwide scale of the crisis. It has been very difficult for them to translate their human resources, equipment and financial power into jobs and cash, even with radically revised strategies. Consequently, countries with relatively more favorable conditions have been chosen by contractors. Nevertheless, in such countries, the profit margin of various projects has significantly dropped in the past two years. As of today, it is impossible to find projects with favorable profit margins and ready financing except in a few countries; even in such countries Turkish contractors have to face security issues and political risk. 1,159 out of the 1,306 houses in the Narcity Housing Project, whose construction started in 2005, have been sold and a large portion of the property deeds have been transferred. Despite economic contraction and continuing negative outlook, Tepe İnşaat maintained its successful graphic in 2009, especially with regard to investment projects, thanks to a stable growth policy. In the Tepe Prime Business - Residence - Avenue Project put up for sale in June 2009, sales performance attained 80% in those phases which were offered for sale in December. In addition, 1,159 out of the 1,306 houses in the Narcity Housing Project - whose construction started in were sold and a large portion of the property deeds were transferred. The Company also continued with the construction of hospitals, shopping centers and educational facilities, under its responsibility. Tepe İnşaat continues its regional activities, such as the construction of the 300,000 square meters Sulaimaniya University campus, as well as the construction of the building annex for the American Embassy in Afghanistan, carried out as part of a joint venture. With prestigious projects in the past, the Company succeeded in becoming a recognized and respected brand in the housing sector and has plans for new investments in In addition to domestic activities, Tepe İnşaat has ongoing operations in the Middle East, Northern Iraq and North Africa, in line with its strategic plans.

53 Tepe İnşaat Annual Report 2009 Introduction ˊˊ Message from the Management 49 The Company has plans for new investments for the year 2010; in addition to domestic activities, Tepe İnşaat continues operations in the Middle East, Northern Iraq and North Africa, in line with its strategic plans. It is expected that the sector will recover in 2010 and attain rigorous growth during 2011 and The annual average growth for the sector until 2012 is estimated to be approximately 5-6%. Since interest rates on housing loans fell below 1% and longer maturity periods have a positive effect on house buying decisions, various firms in the industry have predicted growth estimates of around 10%. It is possible for Turkey to boost its production and efficiency and therefore its wealth during the global crisis, thanks to its young population. In order for this to happen, Tepe İnşaat believes that the country should realize that consumption without production is now over and that new opportunities can be created with correct risk management, good governance, proper development of the human resources and by keeping abreast of technological advances. The mission of the construction sector within such a scheme will be better understood as the country turns from consumption to saving and investment, in accordance with a target of balanced growth. As the world economy starts to pull out of the recession of 2009, Tepe İnşaat has established the goal of providing resources to Bilkent University and thus to the Turkish educational system in general, with the support of its employees -without doubt the most precious asset of the Company. Ali Haydar Abdullah Bahadır Süleyman Son Kurtdarcan Güngenci General Manager Chairman Executive Director

54 50 Board of Directors and Board of Auditors* Board of Directors Ali Haydar Kurtdarcan Chairman Abdullah Bahadır Güngenci Executive Director Hanifi Arabacı Member Vahit Uğurlu Member Önder Sezgi Member Board of Auditors Alaaddin Tabur Murat Aşkar * Members of the Board of Directors and Board of Auditors of Tepe İnşaat Sanayi A.Ş., as determined at the Ordinary General Assembly dated April 14, Senior Management Abdullah Bahadır Güngenci Executive Director of the Board of Directors Abdullah Bahadır Güngenci was born in Ankara in 1951 and graduated from the Department of Civil Engineering at Middle East Technical University in He worked in the Iraq-Turkey Crude Oil Pipeline Project from and later was part of the construction of the Petkim Aliağa Facilities Water Treatment and Demineralization Units. From 1980 until 1986, he worked in Bahrain s AISCO Iron Enrichment Plant Project, in marine dredging and in the construction of the pier and the plant. His career continued at Günkay İnşaat in Turkey until he joined Tepe İnşaat Sanayi A.Ş. in 1994 as Group Coordinator for Hospital Projects. In the following years, he served as Assistant General Manager in charge of Domestic Projects and later of Infrastructure Projects. He was appointed Executive Director of the Board of Directors on April 14, Süleyman Son General Manager Born in Ödemiş in 1949, Süleyman Son graduated from the Department of Mechanical Engineering at Middle East Technical University. His professional career began in 1971 at the Turkish Electricity Authority (TEK); he later served as Assistant Project Manager at GAMA Endüstrisi A.Ş. and Bahattin Gören and Kiska Kom Company. Son also worked as Assistant General Manager at Akpınar Yapı Sanayi A.Ş. and at Petkontur İnşaat, where he was a partner. In 2003, Süleyman Son joined Tepe İnşaat Sanayi A.Ş. as an Assistant Business Development Manager after working at Sibtek İnşaat, Sutek İnşaat and Baner İnşaat. He was appointed General Manager of Tepe İnşaat Sanayi A.Ş. in Son currently serves as Board member at Batı Karadeniz Elektrik Dağıtım A.Ş., TAV Yatırım Holding A.Ş., TAV Tepe Akfen Yatırım İnşaat ve İşletme A.Ş., TAV Havacılık A.Ş., TAV Esenboğa Yatırım Yapım ve İşletme A.Ş., Dilek İnşaat ve Ticaret A.Ş. ve Antepe Sağlık, and Turizm Hizmetleri Tic. Danışmanlık A.Ş.

55 Tepe İnşaat Annual Report 2009 Introduction ˊˊ Senior Management 51 Hasan Fehmi Çataltepe Director of Investment Projects Born in Ankara in 1954, Hasan Fehmi Çataltepe graduated from the Faculty of Architecture at the Ankara State Academy for Engineering and Architecture in He began his professional career as a draftsman and then as a building contractor. After working as an architect at Kutlutaş A.Ş., Çataltepe joined Tepe İnşaat Sanayi A.Ş. as a Project Coordinator in He served as Domestic Projects Coordinator between 2001 and 2002 and as Assistant General Manager for Domestic Projects from 2002 until the end of 2009 when he was appointed Director of Investment Projects. He is also a Board member at Riva İnşaat Tur. Tic. İşl. Paz. A.Ş. Mustafa Kalender Assistant General Manager, Finance Born in Mengen, Bolu in 1964, Mustafa Kalender graduated from the Department of Business Administration at Anadolu University in He began his professional career with Tekgüç İnşaat and joined Tepe İnşaat in 1988 as Finance Supervisor; he later was appointed Head of Finance and Finance Manager and is currently Assistant General Manager in charge of Finance. He also served as a Board member from 2005 until 2010 and is currently on the Board of TAV Esenboğa Yatırım Yapım ve İşletme A.Ş., TAV İzmir Terminal İşletmeciliği A.Ş., TAV İşletme Hizmetleri A.Ş., TAV Gazipaşa Yatırım, Yapım ve İşletme A.Ş., TAV Özel Güvenlik Hizmetleri A.Ş., TAV Bilişim Hizmetleri A.Ş., Dilek İnşaat ve Tic. A.Ş., Antepe Sağlık ve Turizm Hizmetleri Tic. Danışmanlık A.Ş. and Riva İnş. Tur. Tic. İşl. Paz. A.Ş. Hürriyet Biricik Assistant General Manager, Business Development and Proposals Born in Istanbul in 1959, Hürriyet Biricik graduated from the Department of Civil Engineering at Middle East Technical University in Prior to joining the Tepe İnşaat family in 1994, he worked at Ere Mühendislik, Günal İnşaat and Çimtur. After successfully carrying out his responsibilities as Construction Supervisor, Project Manager, Proposals Manager, Business Development and Proposals Coordinator, Biricik was appointed Assistant General Manager in charge of Proposals and Business Development in Orhan Koral Assistant General Manager, Budget and Planning Born in Beyşehir in 1959, Orhan Koral graduated from the Faculty of Civil Engineering at Istanbul Technical University; he later received his MBA from Istanbul University. Koral began his professional career in 1984 at Kent Mühendislik as an Assistant Construction Supervisor. He joined Tepe Yapı Sanayi A.Ş. in 1985 where he worked in various capacities, including Civil Engineer, Final Accounts Manager, Project Monitoring Group Manager and Assistant General Manager until Orhan Koral was appointed Assistant General Manager in charge of Budget and Planning in 2006 and currently serves as a Board member at Dilek İnşaat ve Ticaret A.Ş. and Bilenerji Bilkent Enerji Üretim Sanayi ve Tic. A.Ş., and Executive Director of Board of Directors at Sports International Bilkent Fitness and Spor Merkezi A.Ş. Ali Karaca Assistant General Manager, Domestic Projects Born in 1964 in Kahramanmaraş, Ali Karaca graduated from the Isparta Faculty of Engineering at Akdeniz University in Until 1992, he worked in Kür İnşaat Sanayi A.Ş. and Nazmi Kürüm İnşaat A.Ş. and then joined Tepe İnşaat Sanayi A.Ş. From 1992 to 2004 he was Field Engineer, Construction Supervisor and Project Manager. From 2004 to 2009 he served as Domestic Projects Coordinator and was appointed Assistant General Manager for Domestic Projects at the end of 2009.

56 52 Milestones One of the pioneers and innovators of the Turkish construction industry with its vast experience accumulated over the years, strong financial structure and well-respected corporate identity, Tepe İnşaat Sanayi A.Ş. is the flagship of Bilkent Holding.

57 Tepe İnşaat Annual Report 2009 Introduction ˊˊ Milestones 53 A Summary of 40 Years in Figures... Having completed 11 million square meters of construction in 40 years, Tepe İnşaat currently has one million square meters of ongoing construction behind its Under Construction signs. Infrastructure facilities, power plants, airports, shopping centers, modern housing projects, health and educational facilities are just some of the projects that Tepe İnşaat has taken pride in constructing for the past 40 years. Completed Projects Ongoing Projects Construction Area (m 2 ) Construction Area (m 2 ) Airports 3,651,296 - Commercial and Industrial Buildings 1,735, ,000 Houses 2,109, ,822 Shopping Centers 1,094,730 - Hospitals 697,091 45,000 Infrastructure Projects - - Prefabricated Buildings 696,244 - Education Buildings 248, ,000 Military Projects 608,047 - Total 10,840,976 1,047,822 Grand Total 11,888,798 m 2 Completed Projects (US$) 1. Housing 728,506, Hospital 371,663, Terminal 1,425,336, Commercial Buildings / Office Buildings 462,950, Shopping Center 343,912, Education Building 130,735, Touristic Building 47,726, Renovation 120,024, Sports Facilities 24,188, Prefabricated Housing / Shelter 179,367, Container 9,375, Infrastructure 411,232, Industrial 89,036, Transport 79,003,335 Total Sum of Completed Projects 4,423,059,772

58 54 ˊˊ Milestones 1980s 1982 Bilkent Campus University lies within the boundaries of Bilkent, a city created over the course of fifteen years on the plains of Ankara. Turkey s first foundation-owned, private university, Bilkent University was founded in October 1984 by the İhsan Doğramacı Foundation. It began its academic activity in 1986 with 386 students. The University today has nine faculties, two undergraduate colleges, three vocational schools and six institutes that provide education to 12,000 students. Bilkent graduates are among Turkey s most select human resource. Located on 612 hectares, Bilkent is a city of science and its campus, dormitories, business and shopping centers, sports complex, concert halls, hotel and movie theaters, dam, power plant, wooded areas, symphony orchestra and excellent infrastructure are able to cater to every need. Turkey s first foundation-owned, private university, Bilkent University was founded in October 1984 by the İhsan Doğramacı Foundation. Bilkent graduates are among Turkey s most select human resource.

59 Tepe İnşaat Annual Report 2009 Introduction ˊˊ Milestones 55

60 56 ˊˊ Milestones 1990s 1999 Atatürk Airport (Build-Operate-Transfer) The İstanbul Atatürk Airport International Terminal was built by a joint venture between the Tepe and Akfen Groups (TAV), the winner of the Build-Operate-Transfer tender. A company specialized in airport construction, operation and financing, TAV today is a leader in Turkey and on its way to becoming a dominant player in the Middle East, North Africa and the Caucasus. The Atatürk Airport New International Terminal Project was completed at a cost of US$ 397 million and commenced operations on December 22, With an additional facility launched in 2004, the annual capacity of the terminal increased from 14 million to 20 million passengers. In July 2005, TAV also assumed operations at Atatürk Airport Domestic Terminal. Covering an area of 62,500 square meters, the Domestic Terminal has been modernized to accommodate an average of 7.5 million passengers a year. The İstanbul Atatürk Airport International Terminal was built by a joint venture between the Tepe and Akfen Groups (TAV), the winner of the Build-Operate- Transfer tender. The Domestic Terminal has also been modernized to accommodate an average of 7.5 million passengers a year.

61 Tepe İnşaat Annual Report 2009 Introduction ˊˊ Milestones 57

62 58 ˊˊ Milestones 2000s 2000 Turkish Armed Forces Rehabilitation Center Built on a total area of 102,500 square meters and with a 400-bed capacity, this facility was established to provide rehabilitation and relaxation to army veterans. Built at a cost of US$ 132 million, the actualization of this facility was the outcome of an architectural contest. İş Bankası Headquarters Complex Turkey s first smart building, the complex is one of the most majestic high-rises in Istanbul, located in the heart of industry, commerce and culture. Built at a cost of US$ 190 million, the complex has been equipped with the 21st century s latest technology and is an important example of smart buildings, not only in Turkey but in Europe and the Middle East as well. With two towers - 52 and 36 stories respectively - İş Bankası Headquarters Complex is the highest skyscraper between Dubai and Frankfurt. Built at a cost of US$ 190 million, the İş Bankası Headquarters Complex has been equipped with the 21st century s latest technology Kemer Rose Residence Built on 35,000 square meters among the unique rose gardens in Kemerburgaz, this housing complex consists of 70 villas. Offering a peaceful lifestyle in the midst of a natural setting, Kemer Rose Residence is also equipped with sports facilities that offer a wide range of activities Beykoz Mansions Built on an area of 100 hectares in the Saip Molla Pasha Woods in Beykoz, Istanbul, Beykoz Villas are one of Tepe İnşaat s most prestigious projects and offers 401 mansions in perfect harmony with their natural surrounding. The whole atmosphere reflects the beautiful attributes of a truly unique life style. The historical Hunting Lodge, renovated true to its original form, serves residents with a library, billiards, game and event lounges, a spacious garden designed for large receptions and a kitchen. With a project cost of US$ 90 million, Beykoz Villas are an attractive destination for an exclusive lifestyle in Istanbul. Tepe Nautilus Shopping Center Nautilus, or lighthouse, was inspired by the seaside around Kadıköy, on the Anatolian side of Istanbul, one of the world s most beautiful coastal cities. With a market value of 150 million, Nautilus is the largest shopping center on Istanbul s Anatolian side. With its bright design, Nautilus offers visitors a comfortable shopping environment.

63 Tepe İnşaat Annual Report 2009 Introduction ˊˊ Milestones 59

64 60 ˊˊ Milestones 2004 The Eczacıbaşı Kanyon Project The Eczacıbaşı Kanyon Project is a stunningly modern open-air shopping center built by Tepe İnşaat in Istanbul. Kanyon hosts 160 shops, a gourmet supermarket, a street market, movie theaters, restaurants, cafeterias, bars, a sports and health center, indoor and outdoor swimming pools and open-air performance venues, residences and office buildings and shopping and amusement centers. Kanyon was built via a partnership between Eczacıbaşı and İş Real Estate on an area of 250,000 square meters in compliance with national and international earthquake regulations. The cost of the project was US$ 41 million. Kanyon was built via a partnership between Eczacıbaşı and İş Real Estate on an area of 250,000 square meters in compliance with national and international earthquake regulations. The cost of the project was US$ 41 million Baku-Tbilisi-Ceyhan Crude Oil Pipeline Tepe İnşaat took part in the building of the pipeline s 277-kilometer Posof-Erzurum section and the pump stations project along the pipeline. İmranlı-Kayseri Natural Gas Pipeline Kütahya-Bilecik-Uşak Natural Gas Pipeline 2006 Narcity Housing Project Built on approximately 147,000 square meters in Maltepe, Istanbul, the Narcity complex is landscaped primarily with pomegranate trees, reflecting the Turkish name for pomegranate (nar). This complex consists of 1,283 apartments built in compliance with the latest earthquake regulations and state-of-the-art soundproofing, heat and water insulation systems. With its high-quality materials and workmanship, as well as its extensive social facilities and secure systems, Narcity Istanbul is one of Istanbul s favorite residential destinations. The US$ 200 million project was launched in January units in plot C were delivered to the owners and plots D and E are open for residential occupancy. Esenboğa Airport Ankara finally has an airport that is truly worthy of its location in Turkey s capital city. Esenboğa Airport was built at a cost of 188 million and has an annual passenger capacity of 10 million. It is the only airport in Turkey to combine both domestic and international terminals under one roof. Completed one year ahead of schedule, it has became the modern face of Turkey s capital.

65 Tepe İnşaat Annual Report 2009 Introduction ˊˊ Milestones 61

66 62 ˊˊ Milestones 2007 Bilkent Garden Homes At an investment value of US$ 52 million, this project consists of 124 twin-villas built on a 123,000 square meters. Set amid superb natural beauty, twin villas, 500 square meters each, are equipped with state-of-the-art technology. With two playgrounds for children, an observation deck, jogging tracks, swimming pool, game room, fitness center with sauna, cafeteria, tennis, basketball and volleyball courts, Bilkent Garden Homes have been designed to cater to its residents every social need. Offering an urban location while at the same time far from the hustle and bustle of the city and combining the beauty of nature with the amenities of the contemporary life, Bilkent Garden Homes has been met with great interest. The project was launched at the end of 2005 and completed at the end of All units were sold before the construction was actually completed. Tepe Prime Project comprises Tepe Prime Business, Tepe Prime Residence and Tepe Prime Avenue, has an indoor area of 92,800 square meters and aims to provide utter comfort to its dwellers and guests Hacettepe University Hospitals Morphology Building and Seventh & Eighth Building Retrofits Completed in December 2008 at a cost of TL 71 million, this project has a total construction area of 28,500 square meters. As part of this project, among the most important undertakings by Tepe İnşaat for Hacettepe University, Seventh & Eighth Buildings and the Morphology Buildings were reinforced against earthquakes. The modifications in the Internal Medicine, Urology, Neurology, General Surgery, Brain Surgery and Gastrology departments, located in the Seventh Building, were completed. In addition, Biochemistry, Microbiology, emergency laboratories, Endocrinology, Geriatrics, Nephrology, Infection, Rheumatology, Hematology, Gastrology, Coronary Intensive Care departments and inpatient floor retrofits were also undertaken. The project was completed and delivered as of December Tepe Prime Project The project is comprised of Tepe Prime Business, Tepe Prime Residence and Tepe Prime Avenue and has an indoor area of 92,800 square meters. Its objective is to provide utter comfort to its dwellers and guests; it is predicted to be finished by 2011.

67 Tepe İnşaat Annual Report 2009 Introduction ˊˊ Milestones 63

68 64 Subsidiaries and Affiliates Share Participation Company Total Capital Capital (TL) Ratio (TL) (%) Tepe Emlak Yatırım İnş. ve Tic. A.Ş. 160,000, ,324, TAV Havalimanları Holding A.Ş. 363,281,250 94,890, TAV Yatırım Holding A.Ş. 100,500,000 46,732, Tepe Mobilya San. A.Ş. 50,000,000 41,981, Tepe Home Mobilya ve Dek. Ürn. A.Ş. 61,000,000 33,571, Ati Servicess Sa 36,074,062 16,492, Tepe Betopan A.Ş. 20,000,000 13,200, Sports International A.Ş. 16,000,000 11,888, Tepe Savunma ve Güv. Sist. A.Ş. 17,000,000 8,329, Bilintur A.Ş. 40,000,000 8,000, Meteksan Matbacılık A.Ş. 62,526,000 5,864,454 9 Bil Enerji A.Ş. 30,000,000 4,530, Tepe Prefabrik İnşaat Sanayi ve Ticaret A.Ş. 6,000,000 4,213, Antepe Sağlık ve Turz. Hizm. Tic. Danş. A.Ş. 3,000,000 2,975, Dilek İnşaat A.Ş. 22,000,000 2,968, Bilan Bilkent Ankara Tepe Otel İşletmeciliği A.Ş. 5,500,000 2,694, C.B. Spolka Zograniczona Odpowiedzia 7,843,277 2,221, Ankara Teknoloji A.Ş. 9,600,000 1,106, Tepe Servis ve Yönetim A.Ş. 2,000,000 1,039, Artı Döviz A.Ş. 1,500, , Meteksan Savunma A.Ş. 10,000, ,310 6 Batı Karadeniz Elektrik Dağıtım A.Ş. 1,400, , Park Villa İnşaat ve Turizm A.Ş. 500, , Tepe İnşaat ve Ticaret (Kıbrıs) Limited 145, , Hyper Foreign Trade Holland N.V. 137,019 73, Tepe Grubu United Kingdom 597,300 61, Tepe Ukrayna Ltd. 61,185 61, Tepe Stroi 61,185 61, Yenikentler Yatırım A.Ş. 170,000 5,000 3 Meteksan Uzay Teknoloji A.Ş. 500,000 5,000 1 Optisis İletişim ve Bilgi Teknolojileri A.Ş. 300,000 3,000 1 Knauf İnşaat ve Yapı Elm. A.Ş. 8,017,000 1,048 0 Bilsigorta A.Ş. 150, Bildes Bilkent Destek A.Ş. 50, Bilbak Bilkent Bak. A.Ş. 50, Esenboğa Ankara Döviz Ticareti A.Ş. 500, Dafne Ege Döviz Ticareti A.Ş. 500, PFT Sıva Sistemleri A.Ş. 150, Riva İnşaat Turizm A.Ş. 65, TAV Esenboğa Yatırım Yapım ve İşletme A.Ş. 241,650, TAV Tepe Akfen Yatırım İnşaat ve İşletme A.Ş. 135,000, Bilkent Enerji Yat. A.Ş. 50, Türkofon Müzik Aletleri A.Ş. 50,