F i n a n c i a l D a t a 2014* 2013* 2012* 2011* 2010*

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1 Sovereign* National International Corporate Credit Rating Annual Review TURKEY PRIVATE EQUITY Long Term *Assigned by Japan Credit Rating Agency, JCR on July 11, Short Term Foreign Currency BBB- A-3 Local Currency BBB- A-3 Outlook FC Stable Stable LC Stable Stable Local Rating BBB- (Trk) A 3 (Trk) Outlook Stable Stable Sponsor Support 3 - Stand Alone B - Foreign Currency BBB- - Local Currency BBB- - Outlook FC Stable - LC Stable - Senior Analyst: Zeki Metin ÇOKTAN/ zekic@jcrer.com.tr Assistant Analyst: Dincer SEMERCILER/ dincer.semerciler@jcrer.com.tr EGELI & CO YATIRIM HOLDING A.Ş. F i n a n c i a l D a t a * * * * 2010* Total Assets (000 USD) 46,534 28,196 54,459 22,226 7,153 Total Assets (000 TRY) 107,919 60,068 96,806 41,983 10,998 Equity (000 TRY) 86,928 49,178 43,331 41,190 10,889 Net Profit (000 TRY) 35,585 9,719 1, Asset Margin Avg. (%) ROAA (%) ROAE (%) Equity/Assets (%) Equity Margin Avg. (%) Liquidity Requirement (%) ,205 22,695 Asset Utilisation Avg. (%) Asset Growth Rate (%) *End of the year Company Overview With roots dating back to the establishment of Varlık Yönetim A.Ş. in 1994, Egeli & Co Yatırım Holding A.Ş. (referred to as Egeli & Co or the Company) is a venture capital and private equity firm that has been listed on Borsa Istanbul (BIST) with the trade name of EGCYH. It participates in real investment projects with a principal focus on the energy/infrastructure and agriculture sectors through its publicly held subsidiaries Egeli & Co Girişim Sermayesi Yatırım Ortakligi A.Ş. (EGLYO) and Egeli & Co Tarım Girişim Sermayesi Yatırım Ortakligi A.Ş. (EGCYO) In addition, the Company established subsidiaries in the past year to investigate investment opportunities in the real estate and mobile energy supply/generation industries. Strengths Containment of EGCYO, the only publicly held venture capital investment trust with a focus on the agriculture sector. Robust equity level providing a sound foundation for further growth through utilization of greater leverage Expansion opportunities in the agriculture and energy sectors in line with the growth of the Turkish economy Absence of foreign currency and interest rate risks contributing to asset quality Asset diversification into different sectors dispersing risk levels Well-regulated structure of venture capital investment trusts in line with Capital Markets Board regulations Transparent nature of operations and investments along with a high level of compliance with Corporate Governance Practices Skilled management team with established track record in the financial services industry Mr. Tan EGELİ is the founder and the largest qualified shareholder of the Group with a share of 45.82% as of FYE. Based in Istanbul, the Company which has a paid-in capital of TRY 40mn had a market capitalization of TRY 22.80mn as of the reporting date and employed 5 personnel at FYE. (FYE:4) Constraints Rise in profitability indicators principally stemming from valuation differences that do not contribute to internal equity generation capacity Exposure to volatility and fluctuations in the stock market with substantial impact on the value of assets Short-term dominated nature of financial liabilities exerting pressure on the working capital position planned to be relieved by projected bond issuance Intensive investment period undertaken by the Company limiting operational effectiveness in the completed fiscal year with high future cash flow generating potential Difficulties relating to the attraction of long-term corporate investors to provide the necessary source of funds required for further growth Ongoing market volatility and uncertainty regarding upcoming general elections and FED policies relating to interest rates Publication Date: June 5, 2015 Global Knowledge supported by Local Experience Copyright 2007 by JCR Eurasia Rating. 19 Mayıs Mah., 19 Mayıs Cad., Nova Baran Plaza No:4 Kat: 12 Şişli-İSTANBUL Telephone: Fax: +90 (212) Reproduction is prohibited except by permission. All rights reserved. All information has been obtained from sources JCR Eurasia Rating believes to be reliable. However, JCR Eurasia Rating does not guarantee the truth, accuracy and adequacy of this information. JCR Eurasia Rating ratings are objective and independent opinions as to the creditworthiness of a security and issuer and not to be considered a recommendation to buy, hold or sell any security or to issue a loan. This rating report has been composed within the methodologies registered with and certified by the SPK (CMB-Capital Markets Board of Turkey), BDDK (BRSA-Banking Regulation and Supervision Agency) and internationally accepted rating principles and guidelines but is not covered by NRSRO regulations.

2 1. Rating Rationale Ratings provided by JCR Eurasia Rating for Egeli & Co Yatırım Holding A.Ş. are based mainly on (i) the Company s year-end consolidated independent audit reports prepared in conformity with Turkish Accounting Standards (TAS) for the period along with the solo statements for (ii) JCR Eurasia Rating s own studies and records, (iii) information and clarifications provided by the Company directly and (iv) non-financial figures. In the assignment and the risk assessment of the Long Term International Local Currency and Foreign Currency notes as well as the National ones of Egeli & Co Yatırım Holding A.Ş, profitability performance, funding mix and term structure, equity structure and capitalization level, asset quality and composition, liquidity dynamics, corporate governance and risk management practices, past growth rates, future projections and the extent of regulatory and supervisory activity across the operating fields were taken into account. Growth potential in the Company s field of activities; namely, the agriculture sector and the electricity generation industries in particular, level of exposure to risks and the hedging measures to eliminate or minimize them, managerial and trade synergies that exist at the Group level, the development of internal and external risks in the markets, the financial and non-financial positions of the main controlling shareholders and their expected support were considered equally significant. It must be noted that, starting from FYE, the Company removed the subsidiaries of Egeli & Co Girişim Sermayesi Yatirim Ortakligi A.Ş. and EGC Elektrik Enerji Üretim Sanayi ve Ticaret A.Ş. which has been sold in May, 2015, from consolidation in line with the changes in financial reporting standards for investment companies and classified them as financial assets on the principles of fair value accounting. In addition, Karesi Jeotermal Enerji Üretim İnşaat Sanayi ve Ticaret A.Ş. and EGC Enerji Çözümleri A.Ş. the business venture owned by Egeli & Co Girişim Sermayesi Yatırım Ortakligi A.Ş. accounted via the equity method, has been removed from consolidation in accordance with the same changes. As such, the results belonging to FYE has been revised accordingly. It must be noted that the revision in consolidation methodology must be taken into account when interpreting the changes in the ratios and performance of the Company from FYE onwards. The fundamental rating considerations are, Presence of the Only Listed Venture Capital Investment Trust with a Principal Focus on the Agriculture Sector Egeli & Co Tarım Girişim Sermayesi Yatırım Ortakligi A.Ş., which has been listed on the BIST since 1995, is the first and only venture capital company that provides a regular and transparent platform and aims to offer sustainable returns for institutional investors interested in Turkey s 2 expanding agriculture sector via its subsidiaries of Doga Tarım, Batı Tarım and Tolina Tarım. Significant Share of Equity in the Funding of Company Operations It must be noted that the share of equity to total assets consistently maintained a level that was above 80% over the last 5 years with the exception FY in which the Company obtained a TRY 50mn bank loan. The high share of equity in the funding of Company activities and investments, reduces the dependence on the more costly sources of external leverage and provides growth opportunities in the medium and long-term. Growth Potential of the Agriculture and Energy (Electricity) Sectors It is anticipated that the rising levels of urbanization, per capita income and education will continue to drive the demand for high quality dairy products and milk consumption which dominates the composition of Egeli & Co Yatırım Holding s agriculture operations. On the other hand, the ongoing liberalization and improved regulatory framework in the electricity market in line with Energy Markets Regulatory Authority (EMRA) legislations along with the low levels of per capita electricity consumption in relation to developed economies provides significant growth opportunities in the medium and longterm. High Levels of Asset Quality The balance sheet of Egeli & Co Yatırım Holding doesn t currently have significant exposure to interest and foreign currency risks, as its financial liabilities are denominated in local currency whilst the assets (bank deposits) and liabilities have fixed interest rates, conferring protection against potential deterioration in market circumstances. In addition, the Company has diversified its investments into different sectors including dairy milk farming, crop cultivation, electricity production along with real estate development, with numerous revenue generation opportunities and as such avoids single sector exposure risk. The Risk Committee holds the ultimate responsibility for dealing with risk management activity. Adherence to CMB Regulations The activities of venture capital investment trusts are subject to the regulations of the CMB, which places limits on excessive utilization of leverage, disproportional third party risks and excessive risk concentration. In addition, tax privileges exist for corporate investors that are willing to place money into venture capital investment trusts whilst pension funds are allowed to invest up to 20% of their total portfolio into VCITs. Attained Level of Compliance with Corporate Governance Practices Being a listed entity since FY1998, the Company has accumulated significant know-how in the field of Corporate Governance, having a website that exhibits a high level transparency including detailed information on its investment procedures and functional Board committees, the working principles of which have been

3 published on the website. In addition, it informs investors regularly about important developments effecting Company operations through the Public Disclosure Platform. Rise in Profitability Indicators Driven by Valuation Differences As reflected by the rise in the ROAA (Return on Average Assets) and ROAE (Return on Average Equity), the Company recorded a major increase in its net profitability figures throughout FY and FY owing primarily to a change in consolidation methodology. This has stemmed from the valuation differences of its publicly held affiliate Egeli & Co Girişim Sermayesi Yatırım Ortakligi A.Ş. between FYE and FYE taking into account the share prices formed in the stock market equating to TRY 44.2mn. It must be noted that this hasn t been a cash increase as no sale of the mentioned affiliate took place and as such didn t contribute to internal equity generation capacity. High Level of Exposure to Stock Market Volatility The Company s current and non-current financial investments are principally comprised of its listed affiliate (14.38%) Egeli & Co Tarım Girişim Sermayesi Yatırım Ortakligi A.Ş. (EGCYO) and subsidiary Egeli & Co Girişim Sermayesi Yatırım Ortakligi A.Ş. (EGLYO) (84.03%) which constitute a significant part of its total asset size remain vulnerable to changes in stock market and investor sentiment and as such carries the potential to substantially impact the Company s profit/loss figures. Analysis undertaken by the Company revealed that when all other factors are kept constant, an increase/decrease of 10% in the value of listed shares held by the Company, can result in a rise/fall of TRY 10.35mn. Short-Term Financial Liabilities Exerting Pressure on Net Working Capital Position Short-term financial liabilities dominated the Company s total financial liabilities as of FYE exerting a downward pressure on its net working capital position, which realized negative values over the last two years. In order to diversify the funding composition and extend maturity structure, the Company applied to the CMB for a bond issue of up to TRY 25mn in August, and applied to the CMB on 15/05/2015 to renew its application in line with the financial results for FY and also the Company applied to the CMB for a bond issue of EUR 10mn to be placed in overseas markets. Ongoing Investment Period Undertaken by the Company with Delayed Cash Flow Generation Potential The Company currently has a significant portfolio of investments in the agriculture sector, mainly including dairy farms in the Aegean Region under EGCYO which maintained a consistent upward trend with respect to the livestock numbers and aggregate amount of milk produced. On the other hand, Enda Enerji under EGLYO, which has a current installed capacity of 273MW with a well balanced portfolio of hydroelectric, geothermal and natural gas plants, aims to add another 119MW to its current capacity by early FY2016. It is anticipated that the completion of EGCYO s portfolio investments in late along with the completion of investments in the energy sector will make a significant contribution to the value of these assets, generating positive cash flows and as such supporting the Company s growth in the medium and long-term. Difficulties Associated with Attracting Long Term Investors into Venture Capital Funds takes a long-term view with respect to the time horizon of its real asset investments with relatively long lag periods. As such, it remains difficult to attract corporate investors and pension funds as the majority of individual investors remain focused on short-term returns. This represents a structural barrier to further growth by limiting the pool of funds necessary to finance larger investments. Uncertainty Regarding General Elections and FED Policies Regarding Interest Rates The slowdown in economic growth, uncertainty concerning the results of the upcoming general elections and economic administration to be formed in its aftermath, rising levels of unemployment and ongoing unrest in the neighboring countries negatively impact economic confidence whilst FED policies to possibly raise interest rates in the 2H2015 might affect investor appetite and subsequent fund flows into emerging markets. This might have important implications for listed firms, restricting access to the pool of funds necessary to fuel growth. Taking into account the above mentioned factors, JCR Eurasia Rating has affirmed the Long Term National Ratings of BBB- (Trk) along with ratings of BBB- on the Long Term International Foreign Currency Scale for Egeli & Co Yatırım Holding A.Ş. which denote an investment grade level. 2. Outlook JCR Eurasia Rating has affirmed a Stable outlook for the National Long Term Ratings taking into account the low levels of financial leverage, maintenance of high levels of equity, the synergies created between other Group companies and listed affiliates, projected cash flows from completed investments relating to capacity increases in the agriculture sector, adherence to high quality standards in the agriculture sector, the regulated nature of operations in the energy industry along with the high level of compliance with Corporate Governance Practices. On the other hand, the large levels of susceptibility to fluctuations in the stock market, high cost of sales level and operational expenses, the limiting impact of weak investor appetite for listed private equity assets on further growth, intervention by the state in the electricity market regarding tariffs, the delayed cash flow 3

4 generation potential of the investments undertaken are some of the factors that exert downward pressure on the Company s outlook. In addition, JCR Eurasia Rating has affirmed the Stable outlooks on the International Long and Short Term Rating perspectives of, respectively, in line with the sovereign rating outlooks of the Republic of Turkey. The major changes that would bring about any future positive developments in ratings include an increase in the revenue generation capacity from current stock of investments, greater degree of debt servicing through dividends or exits from the portfolio companies of EGCYO and EGLYO, further increases in the diversification of assets into different sectors, changes in debt composition in favor of long-term resources. 3. Sponsor Support and Stand-Alone Assessment The Sponsor Support ratings and associated risk assessments reflect the financial and non-financial positions of the controlling shareholder of the listed Egeli & Co Yatırım Holding, Mr. Tan EGELİ. While it s not within the capabilities of JCR Eurasia Rating to assess the financial strength of the qualified individual shareholder, its assumed that he remains committed to the Company s mission and continuation of its operational activity, given its track record in the private equity sector, generated employment opportunities and level of support provided for venture capital investment trusts by public authorities and is able to provide long-term liquidity and equity should such a need arise as well as lending it necessary operational support. As such, JCR Eurasia Rating has affirmed the Group s Sponsor Support grade as (3), denoting a level of external support that is dependent on economic circumstances. On the other hand, the Stand Alone grade of Egeli & Co Yatırım Holding A.Ş. has been constituted with respect to the level of asset quality, robust equity level, sound risk management practices, projected cash flows from completed investments and asset sales, diversity and longterm expansion potential of the operating fields, skill and experience of the management team, the attained level of compliance with Corporate Governance Practices along with the development of risks in the markets and the business environment. Based on the listed factors, JCR Eurasia Rating has affirmed the Company s Stand Alone grade as (B) which means the Company has the adequate economic capabilities to manage the incurred risks on its balance sheet without significant support from its shareholders. 4. Company Profile a. History and Activities Egeli & Co which was established by Tan Egeli in May, 2002 founded Turkey s first independent investment portfolio company with Ashmore Asset Management. Following the transformation of Varlık Yatırım Ortakligi A.Ş., the Company changed its status to an investment holding and adopted its current title in In, the Company founded the first venture capital Company of Turkey with a sole focus on agriculture investments. EGC Energy was established in the same year. Currently, the Company can make direct investments in line with its strategies in various fields whilst maintaining real asset investments in the fields of agriculture via its subsidiary of Egeli & Co Tarım Girişim Sermayesi Yatırım Ortaklığı A.Ş. with a rate of 14.38% (March, 2015) and in the fields of energy via its affiliate Egeli & Co Girişim Sermayesi Yatırım Ortaklığı A.Ş. with a rate of 84.03% % of Company shares are listed on Borsa Istanbul that has a paid-in capital of TRY 40mn. b. Organization and Employees Being an investment holding Company with a focus to maximize returns from realized and ongoing projects, doesn t have a complex organizational structure. The Company headquarters are located in Istanbul with a contact office in Izmir. The Company employed a workforce of 5 as of FYE. (FYE:4) The potential investments undertaken are subject to analysis and scrutiny by Egeli & Co Portföy Yönetimi A.Ş. (EPYAŞ) and if there is a fit with the operational and financial objectives of Egeli Co Yatırım Holding A.Ş., following Board approval, the realization of the relevant investments take place. 37 potential investment opportunities were analyzed by the Company throughout FY, 27 were rejected, 2 have been accepted whilst feasibility studies are underway for the remaining 8. Regular reports relating to the financial and operational performance of Group companies and investments are presented to the Board. The principle fields of investments include finance, property/infrastructure, special situation investments, energy, agriculture and technology. c. Shareholders, Subsidiaries and Affiliates The Company s shareholder structure and realized changes over the last 2 years have been provided in the table below. Tan Egeli acquired shares representing TRY 18.33mn of the Company s paid-in-capital belonging to Egeli & Co Investment Management S.A., Egeli & Co Portföy Yönetimi A.Ş. and Egeli & Co Finansal Yatırımlar A.Ş. and Egeli & Co Girişim Sermayesi Yatırım Ortakligi A.Ş. at different dates throughout FY. The paid-incapital of the Company didn t change and realized a value of TRY 40mn along with an upper limit of 250mn. As such, the largest qualified shareholder of the Company became Mr. Tan EGELI as of FYE. 4

5 Share (%) Shareholder Structure March,2015 FYE FYE TAN EGELİ Egeli & Co Girişim Sermayesi Yatırım Ortaklığı A.Ş Public Egeli & Co Investment Management S.A Egeli & Co Portföy Yönetimi A.Ş Egeli & Co Finansal Yatırımlar A.Ş TOTAL Paid Capital (TRY/000) 40,000 40,000 40,000 Information on the Holding s subsidiaries and affiliates has been provided below. Egeli & Co Tarım Girişim Sermayesi Yatırım Ortakligi A.Ş. The Company was established in 1994 and represents the only listed venture capital Company of Turkey with a focus on the agriculture sector. The Company was incorporated into the Egeli & Co Financial Services Group at FYE2004. In order to turn around a sustainable and reliable return for its investors, the Company makes investments across all aspects of agricultural value chain. As of FYE, the Company had a paid-in-capital of TRY22mn with 70.79% of shares listed on BIST and employed a workforce of 3. It remains a subsidiary of Egeli & Co Yatırım Holding with a rate of 14.38% as of March, (FYE: 27.62%) The Company carried out its operations by the below mentioned three separate affiliates including Batı Tarımsal Yatırımlar A.Ş. Doga Tarım Hayvancılık Gıda Pazarlama San. ve Tic. A.Ş. Tolina Tarım Hayvancılık ve Gıda Ürünleri Tic. ve San. A.Ş. Batı Tarımsal Yatırımlar A.Ş. (Batı Tarım) The core fields of activity of the Company established in Denizli in by Egeli & Co Yatırım Holding include seasonal crop cultivation and sheep breeding for the purpose of milk and meat production. Under the name of Senyayla Ciftligi, the Company reached a livestock of 1,961 as of FYE (FYE: 1,614) with milk sales taking place in Denizli to dairy manufacturers whilst meat sales take place in Izmir to the slaughters of a national retail chain. Under seasonal crop cultivation, the Company had 1,200 decares of arable land as of FYE with feed plantation whilst separating 100 decares for thyme plantation. On the other hand, the Company is looking into development studies for breeding chickens. The Company remains a subsidiary of Egeli & Co Tarım Girişim Sermayesi Yatırım Ortaklığı A.Ş. with a rate of 100%. 5 Doga Tarım Hayvancılık Gıda Pazarlama San. Ltd. Şti. (Doga Tarım) Established in 2010, the Company operates in the field of cattle farming with the purpose of producing high quality milk via imported high-quality livestock. The Company was incorporated into the Egeli & Co Financial Services Group, following the acquisition of its shares by EGC Tarım Girişim in June,. The total number of livestock in the Company, which holds the necessary licenses for exports into the European Union and Environmental Impact Assessment, reached 777 as of FYE (FYE: 536) whilst aggregate milk production underwent an increase of 47% and attained a value of 2.88mn litres. Average milk yield per livestock ranged between litres. The Company remained a subsidiary of Egeli & Co Tarım Girişim Sermayesi Yatırım Ortaklığı A.Ş. with a rate of 100%. Tolina Tarım Hayvancılık ve Gıda Ürünleri Tic. San. A.Ş. (Tolina Tarım) Established in the Bayındır District of Izmir, the Company was incorporated into the Egeli & Co Financial Services Group following the acquisition of 42.57% of its shares in October,. The Company, had a total livestock of 313 as of FYE (FYE: 268) Following the completion of necessary agreements and certifications for organic feeds, the Company is currently in a transitory period for organic milk production which will be commencing from end of June, 2015 onwards. It remains an affiliate of Egeli & Co Tarım Girişim Sermayesi Yatırım Ortakligi A.Ş. with a rate of 43.57%. Egeli & Co Girişim Sermayesi Yatırım Ortaklığı A.Ş. The Company became incorporated into the Egeli & Co Group following the acquisition of shares belonging to Ak B- Tipi Yatırım Ortakligi A.S. in July, by Egeli & Co Yatırım Holding A.Ş. Its shares are listed on BIST and carries out investments in the fields of energy and infrastructure with a view of creating value for potential investors in the sector. There was a reduction in the share of Egeli & Co Yatırım Holding in the Company s ownership structure from 91.68% at FYE to 84.03% as of FYE. It carries out its operating activities via the below mentioned three Companies. Karesi Jeotermal Enerji Üretim İnşaat Sanayi ve Ticaret A.Ş. EGC Enerji Cozumleri A.Ş. Enda Enerji Holding A.Ş. Karesi Jeotermal Enerji Üretim İnşaat Sanayi ve Ticaret A.Ş. (Karesi Jeotermal) The Company won the tender for the geothermal energy fields Balıkesir Bigadiç Adalı Çeribaşı and Balıkesir Balya- Ilıca in a joint consortium with NRG energy. It was established as a joint venture between Egeli & Co

6 Yatırım Holding and NRG Energy in and increased its paid-in capital to TRY 960k in April,. In line with the strategy to bring energy focused assets under Egeli & Co Girisim Sermayesi Yatırım Ortakligi, Egeli & Co Yatırım Holding transferred its shares in the Company in February,. The Company remains a subsidiary of Egeli & Co Girişim Sermayesi Yatırım Ortaklığı A.Ş. with a rate of 50%. EGC Enerji Cozumleri A.Ş. The Company was established in June, under the name of Eurasia Enerji Yatırımları A.Ş. in order to lease mobile energy plants as a full subsidiary with a paid-in capital of TRY 17.1mn. It aims to add two mobile power plants with an installed capacity of 25MW using FT8 Mobilepac Technology to its portfolio to provide a source of uninterrupted supply to gas turbines in case of emergencies. The name of the Company has been changed to EGC Enerji Cozumleri A.Ş. in April, Enda Enerji Holding A.Ş. In order to constitute its investment portfolio in the energy sector, the Company acquired 4.20% of Enda Enerji Holding A.Ş. shares in January, and continued to increase its stake in the Company throughout FY with a current share equaling 5.34%. Enda Energy, established in 1993, by bringing together over 100 investors, operates in the field of realizing energy related investments, manage energy production plants and carry out energy trade with a primary focus on the renewable energy segment across the Aegean and Mediterranean regions of Turkey. The Company also supplies electricity to free consumers at reasonable unit prices. The asset distribution of Enda Enerji which operates through numerous subsidiaries and affiliates consists of 56% natural gas, 41% hydroelectric and 3% geothermal investments. The Company reached a total installed capacity of 273MW as of FYE and aims to add 119 MW of capacity throughout FY2015 bringing the total to 392MW by early FY2016. EGC Elektrik Enerji Üretim San. ve Tic. A.Ş. Established in September by Egeli Co Yatırım Holding, the Company operates in the field of establishing electricity generation plants, leasing of current electricity production facilities, their acquisition, sale of electricity as well as the addition of mobile energy in FY. In addition, it carries out the leasing of generators with various capacity, their imports and sales in the domestic market. As declared on the Public Disclosure Platform, Egeli & Co Yatırım Holding exited from its investment in EGC Elektrik in May, EGC Gayrimenkul Geliştirme ve Yatırım A.Ş. EGC Gayrimenkul was established in March, in order to evaluate investment opportunities in the real estate development and property sectors. It is believed that the Turkish real estate market will maintain its dynamism in the 6 next 10 years, primarily fuelled by the demand for centrally located residential and office buildings. The Company currently remains inactive. d. Corporate Governance As of March, 2015, 54.18% of Company shares are listed on BIST which requires a high level of Compliance with the Corporate Governance Principles of the CMB. It must be noted that the Company places a high level of emphasis in the field of compliance, exhibiting a high degree of transparency on its website and informing investors regularly on important developments through the Public Disclosure Platform. The Company Board currently consists of 5 members with the presence of two independent members. There are three sub-committees operating under the Board namely including the Audit, Corporate Governance and Early Identification of Risk, all of which are chaired by independent members. The Group A shares owned by Mr. Tan Egeli have the right to elect Board members which reduces the extent of compliance with Corporate Governance Practices. In addition, the Company has an investor relations manager that holds the necessary licenses and is part of the Corporate Governance Committee. The Company s human resources policy, performance management system, recruitment procedures have been summarized in its annual report and on the website. The Company adopted Corporate Social Responsibility as part of its investment strategies, aiming to contribute to value added production in Turkey s agriculture and energy sector whilst minimizing the potentially harmful effects of its investments on the environment. e. The Company and its Group Strategies The overall strategy of the Egeli & Co Yatırım Holding A.Ş. can be summarized as making sustainable, long-term investments in the real sector and deliver value for its investors. In the field of agriculture, the Company has plans to increase the livestock capacity of Senyayla Dairy Farm in Denizli to 3,700 by FYE2016 from its current level of 2,500 by undertaking additional investments in stockyards. Furthermore, the implementation of advanced techniques and a reproductive program aims to boost the productive capacity and enable milk production throughout the year. Batı Tarım aims to increasingly focus on thyme cultivation, that can be harvested for 7-8 years following plantation with minimal plantation costs and contribute to profit margins. Doga Tarım is to reach a total livestock of 840 by 2H2015. Feasibility studies looking into the establishment of a livestock barn containing 350 calves is ongoing. Tolina Tarım which currently houses 313 livestock, will begin organic milk production from 2H2015 onwards.

7 In the field of energy, EGC Enerji Çözümleri A.Ş. aims the leasing of large scale mobile energy plants and generators with varying capacities. Enda Enerji plans to add 119MW of installed capacity to its current portfolio via the installation of 5 wind farms along with the expansion of its geothermal and hydro power plant capacity. The Company also established EGC Gayrimenkul with the aim of evaluating investment opportunities in the real estate sector promising significant growth and profitability. 5. Sector Overview & Operational Environment The investments of largely concentrate on the energy sector with a particular focus on the electricity generation industry through the shares held in Egeli & Co Girisim Sermayesi Yatırım Ortakligi A.Ş. The Electricity Sector According to the forecasts outlined by the International Energy Agency, global energy consumption is expected to grow by 56% between 2010 and 2040 to 820 quadrillion Btu (British Thermal Units) with a large share of demand driven by economic growth from developing countries. Increases in global population, long term global GDP growth approximating 3.6% and rising levels of industrialization and urbanization are the primary drivers of energy consumption. Over the last 10 years, global electricity production increased by 37.77% and attained a value of 23,127 terawatt hours as of FYE, an increase of 2.17% on the FYE figure. China and the United States are the largest producers of global electricity with shares of 23.2% and 18.4%. India, Japan and Russian Federation represent the next three largest generators of electricity with shares of 4.8% and 4.7% respectively. The share of electricity across total final energy consumption will rise from 18% in 2000 to 22% in The demand for electricity from developing countries will remain strong with 4% growth on an annual basis whilst their share in demand is expected to reach 43%. Based on market value, the world s largest electric utilities companies are EDF (France), GDF Suez (France), Enel (Italy), Duke Energy (United States) and Iberdrola (Spain). The adoption of Electricity Market Law No 4628 in 2001 along with the establishment of Energy Markets Regulatory Agency (EMRA) initiated a liberalization process in the electricity production industry. Furthermore, the Renewable Energy Law No 5346 resulted in large levels of investment in renewable sources of electricity generation to reduce the 74.3% energy import dependency rate. The reduction of Turkey s 74.3% energy import dependency rate and the restructuring of traditional energy production architecture, principally based on coal, 7 natural gas and water, are necessary. In FY, Turkey paid USD 55.9bn for energy imports, which composed 22.21% (FY: 25.41%) of total imports. The distribution of produced electricity based on different energy sources globally and in Turkey has been provided for, the latest year for which data is available and indicates a higher level of dependency on natural gas for electricity production in the domestic market. Sources () World Turkey Petrol 4.6% 1.5% Natural Gas 22.2% 43.7% Coal 40.6% 27.5% Hydro 16.0% 24.2% Nuclear 13.0% 0.0% Others 3.7% 3.1% Total 21,431 TWH 240 TWH The electricity demand of Turkey recorded a compound annual growth rate (CAGR) of 5.7% over the period and attained a value of 245.5bn kwh, a rise of 1.28% in comparison to the FYE figure. There has been a strong correlation between the electricity demand of Turkey and real GDP development. Despite the increase in demand, electricity production remained flat and reached bn kwh as of FYE largely due to the decrease in exports and increase in imports. Unit - % Change Installed capacity MW 52,911 57,072 64, Generation (mn) kwh 229, , , Consumption (mn) kwh 230, , , The installed capacity of electricity energy in Turkey progressively increased from 26,119 MW to 64,008 MW between 1999 and and electricity generation almost meets consumption needs. Based on installed capacity, the five largest players of the domestic sector namely include Enerjisa, Aksa Enerji, İÇDAŞ, Limak and Eren Enerji. The aim is to have 120 GW of installed capacity by The state-owned EÜAŞ (Elektrik Üretim A.Ş.) which employed over 11,000 personnel as of FYE, operates in the field of management of thermal and hydroelectric plants, their rehabilitation as well as the operation of mining fields belonging to the state. It was ranked as the 5 th largest industrial company in the Istanbul Chamber of Industry s annual ranking of 500 Leading Companies as of FYE. It continues to play an important role in the generation of electricity representing 37.1% of installed power capacity and 33.5% of national production capacity. On the other hand, the contribution of the private sector to the expansion of the total installed capacity of Turkey

8 is growing rapidly with 90% of capacity additions since 2002 borne by the private sector. The role of the state in electricity generation has decreased from 70% in 2000 to 38% in with the addition of 7,977 MW of installed capacity by the private sector throughout FY. The break-down of production as of FYE has been provided in the table below. 5.65% 18.48% Breakdown of Electricity Production FYE 5.19% 2.17% The per capita electricity consumption of Turkey stands at kwh as of FYE, which remained below the global average. According to Eurostat, the per capita electricity consumption across OECD countries reached kwh. As exhibited in the table below, Turkey continues to lag behind in comparison with the developed countries such as the USA, German and Japan in terms of the per capita energy consumption indicator, which shows that there is still large room for further growth, in alignment with increasing per capita GDP. As such, in order to meet the increasing energy needs of an expanding economy, Turkey needs to expand its electricity generation potential by a factor of 3. Country 35.04% BO: Build Operate BOT: Build Operate Transfer TOR: Transfer Operating Rights 33.47% Energy Consumption (per capita) () USA 13.2 Japan 7.8 Germany 7.1 Greece 5.3 China 3.3 Turkey 2.7 EÜAŞ Private Sector In order to prevent volatility and create stable prices in the market the trade of electricity in Turkey is governed according to the Balancing and Settlement Regulations ( DUY ) which is implemented by the Market Financial Statement Centre. Improvement in the regulatory and institutional set up will lead to an expansion of operational volume and create new trade opportunities. TEİAŞ compiled reliable electricity capacity generation projections for the period based on two major categories, one of which refers to a high electricity demand vs low installed capacity scenario whilst the other one is a more optimistic case based on low electricity demand vs high installed capacity. The optimistic scenario projects an annual average growth rate of 6.20% regarding the demand for electricity consumption compared to 4.50% for the pessimistic scenario. The pessimistic scenario foresees a significantly lower BO BOT Autoproducers TOR 8 realization rate for projects in the pipeline. Official forecasts do not project a supply deficit for the period, however, the current estimates rely on installed capacity across the system a sizeable part of which remains unavailable on demand. The Ministry of Energy has outlined a number of targets to be achieved in the field of supply security, renewable energy and energy productivity in line with its 2023 vision which include the following: The utilization of known coal and lignite sources for electricity generation Utilization of the entire hydroelectric potential in electricity generation Rise in the installed wind power capacity to 20,000 MW Operationalization of the geothermal potential corresponding to 600 MW Increase in total installed power capacity to over 110,000 MW Rise in total electricity generation to 440bn Kwh. Sources: BP World Energy Review, EÜAŞ, Ministry of Energy, TUIK, TETAŞ 6. Financial Analysis a) Financial Indicators and Performance i. Indices relating to size The Company s asset size underwent a growth of 79.66% throughout FY, whilst there was a contraction of 37.95% for FY, mainly stemming from the changes in the reporting methodology that began in March, due to the changes in regulations. The growth in assets principally resulted from the significant increases recorded in financial investments, mainly relating to the shares of Egeli & Co Tarım Girişim Sermayesi Yatırım Ortakligi along with the shares of Egeli & Co Girişim Sermayesi Yatırım Ortakligi shares held by the Group which had been valued at TRY 98.99mn as of FYE Annual Growth (%) Asset Growth Rate (%) The share of current assets to non-current assets exhibited a significant fall from FY onwards, as the Company started to publish its financial statements on a solo basis

9 in line with changes in the reporting regulations. As such, Egeli & Co Girişim Sermayesi Yatırım Ortaklıı (EGLYO) was valued taking into account the stock prices whilst EGC Elektrik Enerji Üretim Sanayi ve Ticaret A.Ş. was valued at cost on the financials. Chart Title Current Assets (%) Non-Current Assets (%) Principal Activity Revenues Net (TRY/000) 48,576 60,000 50,000 40,000 30,000 17,198 20, ,391 10, Equity maintained a relatively high share in the funding of the Company s assets, having attained a level that was above 80% over the last two financial years. The profits arising from valuation differences helped to strengthen its equity level. The Company s financial debt remains primarily short-term however taking into account the high levels of paid-in capital of TRY 40mn, it doesn t bear significant risk. The Company s long-term liabilities primarily consisted of deferred tax liabilities amounting to TRY 12.89mn as of FYE associated with the valuation differences of EGLYO ii. Indices relating to profitability Being an investment holding company, the principle sources of revenues consist of sales and valuations of long-term portfolio/subsidiary and financial assets and dividends. Other incomes from operations are primarily comprised of the valuation differences of Egeli Co Girisim Sermayesi Yatırım Ortakligi due to the regulatory changes, 84.03% of which belong to Egeli Co Yatırım Holding A.Ş. between FYE and FYE taking into consideration stock prices in the market. Gross Revenues % From sales of investment Other Income 82.89% Short Term Liabilities (%) Long Term Liabilities (%) Equity (%) Resource Composition (%) The principal activity revenues recorded a major increase throughout FY, primarily driven by the revenues arising from the valuation differences of Egeli & Co Girişim Sermayesi Yatırım Ortakligi A.Ş. (EGLYO) shares in between FYE and FYE taking into consideration stock prices formed in the market The cost of sales, in the context of private equity companies, refers primarily to the acquisition cost of the financial assets sold by the Company and restrained the Company s ability to generate significant returns in the past, however following regulatory changes in reporting methodology, the large valuation differences arising from publicly held subsidiaries amounting to TRY 48.50mn and TRY 16.49mn in FY and FY respectively underlined the significant upward trend in the profitability indicators from FY onwards. It must be noted that the valuation differences which are calculated taking into account stock prices of the relevant shares in the market are subject to fluctuations in market circumstances. 9

10 ROAA (%) ROAE (%) PRIVATE EQUITY Ticaret A.Ş. which was sold in May, 2015 and joint venture of EGC Gayrimenkul Geliştirme ve Yatırım A.Ş. (EGC Gayrimenkul) constituted the largest item among assets with shares of 92.11% and 96.24% respectively for FYE and FYE The interest coverage ratio underwent a significant increase from FY onwards due to positive effects of the valuation differences. The Company has a satisfactory level of equity and low level of financial leverage. Interest Coverage Ratio (%) 1, b) Asset quality 4, c) Funding & Adequacy of Capital The share of equity to total assets of Egeli & Co Yatırım Holding maintained its high trend over the last 2 years, having attained values above 80%, indicating sufficient capital adequacy. The robust equity level primarily resulted from the contribution made by the net profit figure amounting to TRY 35.59mn in FY, resulting from valuation differences belonging to Egeli & Co Girişim Sermayesi Yatırım Ortakligi A.Ş.. The high share of non-current assets among total assets which attained a value of 93.27% at FYE (FYE: 97.57%) is a factor that creates a wealth effect contributing to asset quality. In addition, the absence of non-performing receivables and appreciating value of financial investments indicate a high level of asset quality Equity/Assets (%) Non-current financial and non-financial investments amounting to TRY 99.40mn represent the largest class of assets, followed by current financial assets amounting to TRY 4.51mn with receivables constituting 1.71% of total assets. 1.51% 0.31% 1.71% 0.19% 4.17% 92.11% Asset Distribution - Liquid Assets Financial Asset Financial and non- Financial Investments (net) Receivables Tangible Assets The total financial liabilities of the Company attained a value of TRY 7.10mn as of FYE, indicating an increase of 48.84% in absolute terms on the previous year. The financial liabilities of the Company were predominantly short-term with long term financial debt constituting less than 2% of total financial liabilities as of FYE. There was a reduction in the share of financial liabilties among total liabilities from 43.78% at FYE to 33.81% at FYE Other Asset The Group s non-current financial investments held in its portfolio, namely the shares of the subsidiary Egeli & Co Girişim Sermayesi Yatırım Ortakligi A.Ş. which is listed, the unlisted subsidiary of EGC Elektrik Enerji Üretim Sanayi ve 10

11 7. Risk Profile and Management a) Risk Management Organization & Its Function- General Information The Company s risk management policy aims to minimize potential threats that could arise from its operations in different industries including agriculture and energy. Risks are classified according to the degree of significance and potential impact on operations and presented to the Board. The Company classifies risks into two broad categories of operational risk and financial risk. The Risk Committee is the board sub-committee that holds responsibility for dealing with risk management activity. b) Credit Risk Credit risk primarily results from the inability of a party involved in a transaction to meet its liabilities, subsequently leading to a financial loss. As stated in the audit report, the aggregate value of balance sheet items including receivables and bank deposits amounted to TRY 2.96mn, as of FYE indicating a rise of % in comparison to the previous year. However, in relation to asset size, total credit risk exposure represented 2.74% of total asset size at FYE, a rise from the 1.38% figure attained at FYE. The off balance sheet commitments and contingencies of the Company realized a value of TRY 9.05mn at FYE, corresponding to a rise of 66.33% in comparison to the previous year. However, in relation to equity and assets, the off balance sheet commitments realized values of 10.41% (FYE: 11.06%) and 8.38% (FYE: 9.05%) respectively Off balance Sheet Committments and Contingecies/Total Assets (%) Off balance Sheet Committments and Contingecies/Equity(%) Off balance Sheet Liabilities (%) 1.73 c) Market Risk Market risk is primarily comprised of interest and foreign currency risks arising from the fluctuations in interest and exchange rates in line with developments in market circumstances. As of FYE, the Company doesn t have any assets (bank deposits and financial liabilities) that have variable interest rates and as such is not vulnerable to changes in market sentiment On the other hand, share price risks constitute another principle form of market risk as the Company takes into account the share prices of its listed subsidiaries. As stated in the audit report, the Company had a portfolio of listed shares with an aggregate value of TRY mn at FYE. (FYE: 57.68mn) According to analysis undertaken by the Company, if there is a change of (+/-) 10% in the stock value of the shares held by the Company, there would be an increase/decrease of TRY 10.35mn in the net value of assets held by the Company. The Company is exposed to foreign currency risk through the financial liabilities denominated in EUR which amounted to TRY 276k as of FYE. It must be noted that the ratio of total foreign currency position to assets of the Company realized a value of 0.26% at FYE. (FYE: 0.70%) which remains rather negligible. The absence of FX risk is a factor that safeguards asset quality at a time of deteriorating market conditions against TRY in line with uncertainties regarding FED policies and upcoming general elections. d) Liquidity Risk The net working capital of Egeli & Co Yatirim Holding A.Ş. remained negative throughout the last 2 years. However, there was an improvement in the net working capital position throughout FY, mainly arising from the large increases (TRY 4.23mn) recorded in financial investments. However, in relation to total asset size, the net working capital deficit isn t significant Working Capital/ Total Assets (%) As of May, 2015, credit lines amounting to TRY 25.56mn were extended to the Company by 6 different financial institutions, 27.25% of this line was utilized with a cash free line amounting to TRY 18.60mn. e) Operational, Legal and Regulatory Risks The Company s senior management is aware that it is not feasible to completely eliminate operational risk. However, it aims to minimize operational risks by encouraging staff to adopt its risk management practices whilst carrying out their daily tasks