TRAKYA CAM SANAYİİ A.Ş.

Transcription

1 TRAKYA CAM SANAYİİ A.Ş. ANNUAL REPORT

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3 TRAKYA CAM SANAYİİ A.Ş. ANNUAL REPORT Contents 02 Financial Indicators 04 Production Plants 06 Board of Directors 08 To Our Shareholders 10 Activities in 15 Risk Management and Internal Control System 17 Consolidated Financial Statements and Independent Auditor s Report 115 Distribution of Consolidated Profit 116 Corporate Governance Principles Compliance Statement 132 Agenda of the Ordinary General Shareholders Assembly 133 Trakya Cam Sanayii A.Ş Articles of Association Amendment Draft Text, Capital Increase in the Fiscal Year, Amendments to the Articles of Association and Profit Distribution, Other Issues, Legal Basis of the Annual Report, Preparation Principles of the Annual Report, Approval of the Annual Report 138 Independent Auditor s Report on the Annual Report 139 Contact Information

4 FINANCIAL INDICATORS SUMMARY CONSOLIDATED BALANCE SHEET Mio TL Mio USD Mio TL Mio USD Current Assets Non-Current Assets Total Assets Short-Term Liabilities Long-Term Liabilities Equity Total Equity and Liabilities Net Financial Debts** (98) (55) SUMMARY CONSOLIDATED INCOME STATEMENT Mio TL Mio USD Mio TL Mio USD Revenue Cost of Sales (1.066) (560) (769) (429) Gross Profit Operating Expenses (312) (164) (211) (118) Other Income / Expenses (Net) Equity Method Effect (5) (3) (6) (4) Operating Profit Income/Expenses From Investing Activities Operating Profit before Financial Income/Expenses Financial Income (Expense) (Net) (6) (3) 1 1 Profit before Taxes and Minority Interests Tax Provisions Pursuant to Turkish Tax Legislation (40) (21) (22) (12) Deferred Tax Provisions Net Profit Minority Interests Shareholders Equity Depreciation Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) (*) FINANCIAL RATIOS Consolidated Balance Sheet Ratios Current Assets / Short-Term Liabilities Total Liabilities / Total Assets Total Liabilities / Equity Consolidated Income Statement Ratios Gross Profit / Revenue Net Profit/ Revenue Operating Profit / Revenue EBITDA / Revenue 2,86 40% 67% 28% 8% 11% 18% 4,45 18% 23% 26% 7% 9% 19% * Operating profit before financial expenses used for calculating EBITDA. ** Net Financial Debts are calculated by deducting the total of short and long-term debts and other debts to relevant parties from cash and cash equivalents and other receivables from relevant parties. 2 TRAKYA CAM SANAYİİ ANNUAL REPORT

5 NET PROFIT (TL Mio) EBIT (TL Mio) EBITDA (TL Mio) 125 TOTAL SALES (NET) (TL Mio) TOTAL SHAREHOLDERS EQUITY (TL Mio) FLAT GLASS PRODUCTION (Thousand Tons) TANGIBLE FIXED ASSETS (TL Mio) TOTAL ASSETS (TL Mio) INVESTMENT (TL Mio) TRAKYA CAM SANAYİİ ANNUAL REPORT 3

6 Production Plants Trakya Lüleburgaz Plant Kırklareli Trakya Autoglass Plant Kırklareli Trakya Mersin Plant Mersin Trakya Yenişehir Plant Bursa Trakya Glass Bulgaria EAD Bulgaria Richard Fritz - Besigheim Germany Richard Fritz - Aszod Hungary Richard Fritz - Malacky Slovakia GlassCorp S.A. Romania HNG Float Glass Limited India Saint-Gobain Glass Egypt Egyt 4 TRAKYA CAM SANAYİİ ANNUAL REPORT

7 PRODUCTION PLANTS In 1.5 million tons of flat glass and 6.5 million m2 of automotive glass produced Richard Fritz - Besigheim Richard Fritz - Malacky Richard Fritz - Aszod GlassCorp S.A. Trakya Glass Bulgaria EAD Trakya Lüleburgaz Plant Trakya Autoglass Plant Trakya Yenişehir Plant Trakya Mersin Plant HNG Float Glass Limited Saint-Gobain Glass Egypt Production in 8 countries Turkey, Bulgaria, Egypt, Romania, Germany, Hungary, Slovakia, India TRAKYA CAM SANAYİİ ANNUAL REPORT 5

8 BOARD OF DIRECTORS Teoman Yenigün 1 Chairman (61) Having completed his education at the Boğaziçi University Mechanical Engineering Department, Yenigün began his professional career in 1975 at the Şişecam Group. After working a number of years in various levels of management, he served from September of 1998 to February of 2011 as the Executive Vice President of the Glass Packaging Group. On February 15, 2011 he was appointed as the Executive Vice President of the Flat Glass Group. In accordance with the SPK Corporate Governance Principles, Yenigün is an executive at Trakya Cam, thus not an independent member of the Board. Nihat Özdemir Vice Chairman (54) Upon graduating from the Middle East Technical University Faculty of Administrative Sciences, Özdemir started his professional career as an Intern Assistant Inspector at Türkiye İş Bankası. Over the years, Özdemir served at various levels of management at Türkiye İş Bankası and, since February of, he has been the Manager of the Gebze Corporate Branch. In accordance with the SPK Corporate Governance Principles, Nihat Özdemir is not an executive at Trakya Cam and also not an independent member of the Board. Mustafa Görkem Elverici Member 2 (38) A graduate of the Middle East Technical University Faculty of Engineering s Department of Civil Engineering, Elverici completed his MBA at Bilkent University. He is currently working on his Banking-Finance PhD. dissertation at Kadir Has University. After beginning his professional career as an Intern Assistant Inspector at Türkiye İş Bankası in 1998, Elverici went on to serve in various middle and senior management positions at İş Bankası A.Ş. until 2005, at Deloitte Danışmanlık A.Ş. from and at Accenture Danışmanlık Ltd. Şti. between 2010 and. He has been the Director of Financial Affairs at the Flat Glass Group since March of. In accordance with the SPK Corporate Governance Principles, Mustafa Görkem Elverici is an executive at Trakya Cam, thus not an independent member of the Board. Zeynep Hansu Uçar Member 3 (42) Having completed her studies in the Department of Business Administration at the Middle East Technical University Faculty of Economic and Administrative Sciences, Uçar commenced her professional life in 1994 at Türkiye İş Bankası A.Ş., serving in the Department of Partnerships as an Assistant Investment Expert. Having worked as an executive for several group companies at various levels of management in the same department, Uçar has been serving as the Unit Manager of the Subsidiaries Department since She serves as a member of Board of Directors and Board of Auditors of the subsidiaries under Türkiye İş Bankası A.Ş. and Türkiye Şişe ve Cam Fabrikaları A.Ş. In accordance with the SPK Corporate Governance Principles, Zeynep Hansu Uçar is not an executive at Trakya Cam and also not an independent member of the Board. 6 TRAKYA CAM SANAYİİ ANNUAL REPORT

9 BOARD OF DIRECTORS Prof. Dr. Turgay Berksoy Independent Member 4 (62) Berksoy completed his undergraduate studies at the Istanbul Academy of Economic and Commercial Sciences, his Master s at Boğaziçi University and PhD. at Marmara University. Following that, he fulfilled various duties as a guest instructor at the University of East Anglia s School of Development Studies along with various lecturing and administrative roles at a number of universities in Turkey. He is currently a member of the faculty and head of the Department of Finance at Marmara University s Faculty of Economic and Administrative Sciences. Berksoy is the author of a number of published books, articles, research studies and communiqués. As a Certified Public Auditor he has served as an auditing member of the Türkiye İş Bankası A.Ş. Board of Directors and, over the years, as a member of the boards of the Tax Reform Commission, the Union of Chambers and Commodity Exchanges of Turkey (TOBB) Specialization Commission, Güneş Hayat Sigorta A.Ş., Petkim A.Ş., Ataköy Otelcilik A.Ş., and Türkiye Denizcilik İşletmeleri A.Ş., as well as a member of the Turkish Ministry of Finance Tax Council. He is an independent member of the Board in accordance with SPK Corporate Governance Principles and has no relationship with Trakya Cam or any related parties. Prof. Dr. A. Murat Demircioğlu Independent Member 4 (66) After completing his undergraduate studies at the Istanbul University Faculty of Law, Demircioğlu went on to complete his second undergraduate degree and PhD. at the Bern University Faculty of Law. Following this, he became an assistant professor, and later full professor, in the field of Labor and Social Security Law. He has served at various universities as a faculty member and administrator. Demircioğlu is currently engaged as a Member of the Senate and Board of Directors of Yıldız Technical University. As an author, he has had a number of books, articles, research studies and communiqués published. He served as a member of the Editorial Board of the Ministry of Culture s Encyclopedia of Trade-Unionism, as well as a member of the Board of Directors of the Hamburg Turkish-European Research Institute. In addition to these, Demircioğlu, was also the Vice President of the Society for Japan Studies, Advisor to the Minister for Employment and Social Security, Honorary Advisor to the Government of the Turkish Republic of Northern Cyprus, member of the Board of Auditors and Board of Directors of Turkish Airlines, Legal Advisor to the Istanbul Chamber of Commerce and advisor to the Istanbul 2010 European City of Culture Agency. He is currently engaged as an advisor to the Antalya Chamber of Commerce and Industry. He is an independent member of the Board in accordance with SPK Corporate Governance Principles and has no relationship with Trakya Cam or any related parties. 1 Mr. Reha Akçakaya was elected as a Board Member to replace Mr. Teoman Yenigün, who retired on January 2, Member of the Corporate Governance Committee 3 Member of the Corporate Governance Committee and Early Risk Detection Committee 4 Member of the Corporate Governance Committee, President of the Early Risk Detection Committee and President of the Auditing Committee. 5 President of the Corporate Governance Committee, Member of the Early Risk Detection Committee and Member of the Auditing Committee. The competencies of Members of the Board of Directors serving during the May 17, -May 17, 2015 period are defined under the terms of the Turkish Commercial Law and the Articles of Association. Directors Teoman Yenigün 1 Chairman of the Board Gökçen Tural 3 Trakya Cam Sanayii A.Ş. Automotive Glass Plant Manager Gökhan Atikkan Basic Glass Production Director Serkan Şahin Trakya Yenişehir Cam Sanayii A.Ş. Plant Manager Reha Akçakaya 2 Automotive Glass Director A. Alper Can Trakya Glass Bulgaria EAD Float Glass Plant Manager Haluk Sarıaltın Marketing and Sales Director Sedat Çavuşlar 3 Trakya Glass Bulgaria EAD Automotive and Home Mustafa Görkem Elverici Finance Director Appliances Plant Manager M. Haluk Güreren Development Director Beytullah Şahin Trakya Glass Rus ZAO General Manager Özlem Vergon Planning Director Gürcan Gürçay Automotive Glass Alliance Rus ZAO General Manager Mahmut Temiz Human Resources Director Çağatay Suner Glasscorp SA General Manager Kaan Ertaş Trakya Cam Sanayii A.Ş. Trakya Plant Manager Thomas Dueckers Fritz Holding GmbH General Manager Güral Savaştürk Trakya Cam Sanayii A.Ş.Mersin Plant Manager 1 Reha Akçakaya was elected to replace Teoman Yenigün, who retired on January 2, Gökçen Tural was appointed to replace Reha Akçakaya, who was appointed as the Executive Vice President of the Flat Glass Group as of January 2, Trakya Glass Bulgaria EAD Automotive and Home Appliances Plant Manager, Sedat Çavuşlar, was appointed to replace Gökçen Tural, who was appointed as the Automotive Glass Director as of January 2, Muhsin Miroğlu was elected to replace Sedat Çavuşlar, who was appointed as Trakya Cam Sanayii A.Ş. Automotive Glass Plant Manager. 4 Selma Öner was appointed as Supply Chain Director as of February 2, TRAKYA CAM SANAYİİ ANNUAL REPORT 7

10 Dear Shareholders, Dear Shareholders, Trakya Cam, which is a subsidiary of Türkiye Şişe ve Cam Fabrikaları A.Ş. and active in flat glass production, continued its operations in line with its vision of becoming a fast growing global flat glass company with its strong brands and innovative solutions. In addition to that, the Company sustained its aim of creating maximum value for its customers, employees, shareholders and all stakeholders by manufacturing flat glass, patterned glass, mirrors, laminated glass, coated glass, automotive glass, encapsulated glass, solar glass and glass for home appliances on the global market by using state of the art technology. By concentrating on the market dynamics of every region where it is active, first and foremost Turkey, and prioritizing energy efficiency and sustainability alongside continuous renovation and improvement in all products, Trakya Cam makes significant contributions both to the interests of its stakeholders and to the economies of the countries in which it operates. The deep global recession in had an adverse impact on many of the industries that we serve, and created a decrease in the growth of developing countries, and a demand shrinkage in developed countries. However, in, global economy has not recovered at anticipated levels. Economic conditions in developed countries such as the United States, Euro zone countries and Japan experienced a relative improvement, whereas national economies that are dependent on the flow of external funds were rendered vulnerable to variations in capital flows. Despite positive expectations in the first half of the year, the economic growth in Russia was below expected; while the growth slowed down in China and India, the engines of global growth. In 2014, the global economy will follow a much more positive trajectory compared to. However, in contrast to the previous period, recovery is expected to be increasingly supported by developed countries. From the perspective of Turkish economy, positivity resulting from both supportive measures taken in the past in the banking industry and the adoption of budgetary policies to reduce public sector deficits, helped maintain economic stability in the first half of. Turkey, although widely accepted as one of the developing countries most affected by recent global developments, has nonetheless managed to keep its balance during turbulent periods thanks to its strong financial system and floating exchange rate system capable of absorbing shocks. With that said, problems such as savings rates, the dependency of growth on borrowing, the rapid borrowing of private rather than public sector, high trade deficit, import-dependent industrial structure, internal demand fed by a growing foreign debt and public spending, plus a potential increase in inflation due to devaluation, as well as rising interest rates and the more rapid growth of imports over exports, have all increased the urgency of the need for structural reforms. In 2014, with political risk comprising one of the most important factors affecting Turkey s growth, it is predicted that the growth rate will be at a level of 3.5%. In, many unexpected developments took place in various markets and, in an environment ruled by uncertainty, Trakya Cam, aided by its flexible and dynamic structure, managed to weather the storms of variable market conditions and turn economic fluctutations into an advantage. This was true both from the perspective of sales, which increased across 8 TRAKYA CAM SANAYİİ ANNUAL REPORT

11 TO OUR SHAREHOLDERS all product groups, and the perspective of higher profits, which was also successfully achieved. Under a customer-focused structure, the Company continued to advance towards its ambitious growth targets, with its strong financial performance supported by cost-cutting measures, its effort towards organic and inorganic growth, the concrete steps it has taken to globalize itself and its broadening value-added product range. Our Company, continued its investments with three float lines in Turkey, Bulgaria and Russia, as well as automotive glass factories in Romania and Russia, taking over a glass-coating plant in Bulgaria with the aim of producing energy-efficient products. With regard to steps taken for inorganic growth, the Company acquired a 50% interest in India s HNG Float Glass Limited Company and completed the purchase of Fritz Holding GmbH, the premier company in the European automotive glass market and the industry s foremost producer of encapsulated glass. Our Company has also developed and commenced the marketing of six new coated glass products with low-e and solar low-e features to be used in our high performance heat and sun insulated Isıcam products, used in buildings and make a significant contribution towards energy savings. Through all these efforts, Trakya Cam took a giant step forward in in its quest to become a global company. This achievement was made possible by strengthening its foundations for strong growth, increasing its contributions to strengthening of national economy, creating value for its partners and, as always, going the extra mile fulfill its duties and responsibilities with commitment and passion, completing its 36th year of operation on a successful note. As the launch of our investments to continue in 2014, our Company will be operating in nine countries, covering a geographic stretch from Germany to India. Dear Shareholders, Our Company s constant goals have been reaffirmed for the coming period as growing in production activities on a sustainable basis and increasing the number of regions in which we are active, increasing customer satisfaction through enhancing our customer-focused service approach and through developing a range of high-quality products. Moreover, we aim to develop new solutions through new products and technologies for the sake of energy-efficiency and environmental responsibility, to increase productivity and profitability through appropriate organizational structures and, along with all of these, to elevate the value of our corporate brand. In reaching these goals, we would like to thank first to the greatest asset of our company, our employees, along with our esteemed shareholders, customers, suppliers and other companies in our Group, to whom we have a huge debt of gratitude. Board of Directors TRAKYA CAM SANAYİİ ANNUAL REPORT 9

12 ACTIVITIES IN Due to the impact of uncertainties in the global economy, the growth of the construction industry and consumption of flat glass both slowed down in developing countries; while recession, or demand contraction was observed in developed countries. Due to the ongoing economic recession in Europe, market recovery was only partial. Consequently, the construction industry did not grow at the expected levels in many markets. As flat glass consumption in Europe failed to grow at the anticipated level, some manufacturers even reduced their flat glass production in, similar to what they had done in. However, the anticipated supply-demand equilibrium has not developed adequately. Throughout the year in general, price increases remained limited due to the inability of the market to display the anticipated level of activity. However, currently, the industry is in the process of slowly recovering in some countries in the Central and Eastern European markets which were less affected by the crisis in the Eurozone. In the Balkans, growth in infrastructure construction supported by EU funding will continue over the medium term and this will have a positive impact on housing construction. Due to its rich energy resources, strong economy and geographical position, Russia, one of the largest markets for the flat glass industry, is expected to become one of the most important construction centers in the region in the near future. However, despite the positive economic and industrial indicators in the first half of the year, economic growth remained far below expected levels. The projected acceleration in the industry did not occur and recession dominated the market. Because of continuing political instability in the Middle East and North Africa, growth in many markets and in the construction industry slowed down, and the increase in flat glass consumption was less than anticipated. Despite the recession in surrounding markets, the flat glass market in Turkey continued to grow, which at the same time, was the case in all industries where flat glass is used. Accounting for a significant percentage of the total flat glass consumption, the construction industry grew 1.5 times more than the general economy in. In the automotive industry, the depression in the European market began to subside slightly as the shrinkage in vehicle manufacturing remained at -1.2% with a total of 16.1 million vehicles. On the other hand, a growth of 9% was experienced in the Turkish automotive market along with an increase of 14% in exports. As a result, automotive manufacturing grew by 5%. The European home appliance (white goods) industry ended the year at a better level than the previous year, though recovery remained limited. In the Turkish home appliance (white goods) industry, refrigerator manufacturing, one of the segments served by The Flat Glass Group of Şişecam, declined by 5%, whereas oven manufacturing grew by 6%. THE FLAT GLASS GROUP IN In, when various developments occurred and uncertainty prevailed in the world markets, Trakya Cam, as a result of its flexible and dynamic structure, increased its sales and profitability in all product groups and achieved significant levels of success against turbulent economic conditions. The fundamental reason for this success lies in the company s market and customer-focused activities, its studies aimed at reducing energy-based costs, its efficient use of working capital, product range that is rapidly growing towards value-added products, continuous development efforts and an innovative approach to business. Beyond the success it has achieved in its business operations, Trakya Cam has slowly but steadily advanced along the path of becoming a global corporation, in 10 TRAKYA CAM SANAYİİ ANNUAL REPORT

13 As a solution partner for its customers and stakeholders, Trakya Cam is taking sure steps toward globalization through its customer-centric structure, strong financial performance, energy-saving approach in all its processes and an ever-expanding product portfolio. accordance with its vision, despite uncertainty in the economic environment. In this context, the Group has continued its commitments to the investments initiated to achieve growth in the current regions. Furthermore, it has positioned itself in new regions, while taking significant concrete steps through partnership and acquisitions in various other regions, in line with its inorganic growth targets. Throughout the years, Trakya Cam has continuously supported its growth with a range of value-added products, a strong, customer-focused organizational structure, productivity increases in all its processes, work procedures simplified through integrated information technologies and efficient decision making mechanisms. DEVELOPMENTS IN THE RELEVANT SECTORS In, Trakya Cam increased its total basic glass sales in the construction sector by 18%. Value-added products contributed significantly to this growth. Overall, in, sales in international markets were made by achieving a balance between price levels, profitability and capacity. Despite unfavorable market conditions, Trakya Cam boosted its basic international glass sales by 16%, in a Turkish lira basis, over the previous year. Sales to the European region were conducted with a focus on profitability. The Company s activities centered on strengthening and enlarging existing sales channels in Bulgaria and Romania, while opening sales offices in the city of Sofia and in the countries of Poland, Croatia, Serbia and Hungary. Moreover, Trakya Cam carried on its groundwork activities in to establish a strong position in Russia with its float line investment which will start operations in 2014 in partnership with Saint Gobain. Outside of these regions, Trakya Cam managed to increase its sales to international markets in. Along with the growth of the Turkish flat glass market, The Company s basic glass sales in Turkey grew by 18%. As the awareness and importance of heat insulation in buildings has increased, sales have grown at record-high levels, particularly for coated glass. Through the non-governmental organizations (NGOs) in which we hold memberships, Trakya Cam took on an active role in the revision of the TS 825 Thermal Insulation Standard for Buildings. In the process, our Company contributed to the reduction of the thermal insulation value for windows (U window value), which plays an important role in the efficient use of energy, from 2.4 W/m2K to 1.8 W/m2K. After the publication of the revised standard on December 18th,, it is now compulsory to use coated glass in windows. Thus, a significant development has been achieved in the process of contributing to energy saving in windows, which account for 30% of the heat loss in buildings. Consequently, we are expecting the rapid rise in the use of coated glass in building construction to continue over the next period. Trakya Cam continued its strong growth in the automotive glass sector throughout. Due to its increasing share in new vehicle projects launched in both the Turkish and the European markets, the Company increased its total sales by 12% over figures. Trakya Cam began a number of operations as part of new projects with Toyota, Hyundai and Ford in Turkey and Spain, and also completed infrastructural preparations to initiate new ventures in this field in The Group is enlarging its customer and product portfolio through new plants to be commissioned in Romania and Russia in the coming period. It is also accomplishing this through synergy with Fritz Holding GmbH, with whom it is continuing its negotiations concerning future new projects. Trakya Cam also continued to grow rapidly in the European home appliance market, with sales manifesting a significant increase of 41% over the previous year. TRAKYA CAM SANAYİİ ANNUAL REPORT 11

14 Energy efficiency continues to be a prime consideration for all products in the home appliance (white goods) industry. The use of smart products, which offer solutions that make the lives of consumers easier, as well as provide energy efficiency, is expected to become more widespread. In this regard, Trakya Cam is continuing to work on satisfying customer needs in this important sector. In the solar glass market, the Group has been unable to attain its targeted sales levels, especially since because the production of solar panels and glass units is still dominated by China and Far Eastern countries. However, after the anti-dumping tax was levied by the European Union on glass units imported from China, and as the production of solar panels in Turkey has grown significantly, Trakya Cam aims to raise its sales of solar glass. This goal will be supported by the recently developed highlypermeable anti-reflective coated glass. NEW INVESTMENTS In, Trakya Cam maintained its growth in Turkey and also continued to carry out its investments and ventures in existing and new markets in line with its strategy of strong positioning and spreading regionally into foreign markets. As part of its growth-targeted investments, Trakya Cam opened a coated glass manufacturing plant and a laminated glass line in Bulgaria within the second half of. The Group achieved a significant progress in the diversification of quality coated glass products through the new products it started to produce. Bulgaria has become an important production base for Trakya Cam in all segments, from flat glass to a wide range of products such as mirror, laminated glass, coated glass, home appliance glass and automotive glass. In line with its goal of expanding to markets that display a high growth potential for flat glass, Trakya Cam has acquired 50% share in HNG Flat Glass Limited in India, one of the most rapidly emergent markets for flat glass. With this investment, Trakya Cam has strategically positioned itself on another continent. Continuing its investment in three float lines in the flat glass segment, Trakya Cam aims to achieve a strong position in the Russian market thanks to its float line investment in the Tatarstan Region accomplished through the joint venture established with Saint Gobain. In that venture Trakya Cam holds a 70% stake, while Saint Gobain holds the remaining 30%. Simultaneously, Trakya Cam continues its second float investment in Bulgaria and is currently installing its seventh float line in Polatlı Organized Industrial Zone in Ankara to fully satisfy customer needs in the Turkish market. In line with its target of becoming a major supplier of auto glass, Trakya Cam is continuing its investments in automotive glass manufacturing plants in Russia and Romania, both of which will become operational in Meanwhile, Trakya Cam has acquired 100% share of Fritz Holding GmbH, one of the major suppliers of encapsulated glass units to automotive manufacturers in Europe. In 2014, Trakya Cam plans to launch all of its investments in four different countries. PRODUCTION RELATED DEVELOPMENTS In order to satisfy the demand of its customers for a wide range of high quality products, Trakya Cam has been manufacturing at full capacity. One of the float lines that was under cold repair at Lüleburgaz Plant has been reopened in. Furthermore, the Group has achieved significant savings in by focusing on efficient total cost management activities. Maintaining its sensitivity towards issues such as protection of the environment, energy efficiency and its awareness of responsibility for sustainability, Trakya Cam has focused on the reduction of energy consumption in all of its manufacturing processes. Towards this end, the Group made improvements in the existing manufacturing plants and also worked on developing designs and practices 12 TRAKYA CAM SANAYİİ ANNUAL REPORT

15 FLAT GLASS BRANDS TRC Helio clear TRC Helio extra clear TRC Helio Isıcam Isıcam Sinerji Isıcam Konfor Isıcam Konfor T Isıcam Sinerji 3+ Isıcam Konfor 3+ TRC Ecotherm TRC Ecosol TRC Tentesol TRC Tentesol T TRC Aura Reflekta TRC Lameks TRC Lameks extra clear TRC Acoustic Lameks TRC Duracam TRC Elit Glass TRC Deco classic TRC Deco wired TRC Helio matt TRC Flotal TRC Flotal extra clear TRC Flotal E TRC Gökkuşağı TRC Durasolar P+ AUTOMOTIVE GLASS BRANDS Duracam Lameks Toflex Toglas Fritz that minimize energy use in its new investments. Having carried out studies in alternative energy resources, Trakya Cam aims to extend the waste heat recovery system at the Yenişehir Plant, to all of its manufacturing facilities. Trakya Cam achieves cost savings, not only in the manufacturing process, but also by reducing its total expenses by improving processes and business methods. By focusing on working capital management, the Company is initiating projects ensuring the efficient management of the entire supply chain. NEW PRODUCTS In line with its vision, Trakya Cam aims to extend its valueadded product range and contribute to energy efficiency and environmental protection, both with its manufacturing technologies as well as the products it develops. As a customer solutions partner, Trakya Cam achieved a major breakthrough with seven new products it introduced to the market in, all with the aim of contributing to society. In this context, in, the Group accelerated R&D activities with regard to high performance coated glass units that provide energy efficiency thanks to their heat and solar control capability. These projects were completed successfully and six new high performance products were introduced to the architectural glass units market. These products are all developed with the cooperation of Trakya Cam R&D and production engineers. Along with the new coated glass units, the sales revenues from this product group increased by 40%. Three of the new products involve Low-E and Solar Low-E coated glass units for homes, while the other three are temperable Solar Low-E coated glass units especially intended for use in commercial buildings. It is expected that the Solar Low-E coated glass units will replace products currently being imported. In the field of solar glass, the Group has completed the infrastructural work of anti-reflective coated glass units that provides further increase in transmission of the glass pane along with supplying high transmission glass units for photovoltaic module (solar panel) and thermal collector systems. In line with the growing importance of issues such as the reduction of CO2 emissions, reducing the weight of vehicles for this purpose, the decrease of the energy used for cooling, increasing fuel savings and use of lead free materials in the European automotive industry, Trakya Cam has been furthering its studies in the development of automotive glass units. In the home appliance glass segment, work on the development of coated glass units with different functional properties is ongoing. MARKETING COMMUNICATION ACTIVITIES In, continuous communication with distribution channels, decision makers, professionals, the public and consumers was maintained across the entire Trakya Cam value chain. The Group continued to carry out projects aimed at raising awareness of glass in architecture and increasing the share of value-added products in overall sales through brand awareness. Through advertising campaigns for insulated glass, attention was drawn to the savings that can be achieved by choosing the correct glass on windows and efforts were made to promote efficient use of energy understanding in society. Under Isıcam Konfor Saving Academy project, events especially targeting children that will be next generation adults were sponsored at shopping malls with the theme of energy saving and importance of glass in energy efficiency. Under the scope of Public and Private Hand in Hand for Energy Saving project, which aims to turn public buildings more energy efficient, the Ahi Evran Hospital in Trabzon was equipped with Isıcam Konfor glass, as the result of TRAKYA CAM SANAYİİ ANNUAL REPORT 13

16 a joint initiative between the Ministry of Health and the Ministry of Environment and Urbanization. By increasing communication with professionals, product and brand awareness was raised through direct visits to 1,700 window manufacturers subsequent to the advertising campaign and they were informed about our products. Trakya Cam participated in numerous fairs and exhibitions both in Turkey and abroad, including the Construction Fair, the events of the Freelance Architects Society, Solarex, the IMSAD Quality Summit, Yeşil Rapido event organized by Erke Tasarım, the National Energy Efficiency Exhibition and Forum, SEBBE, MIR Stekla and Intersolar. Our new temperable Solar Low-E coated glass product was launched during the Reflections from Glass conference, held at the TRC Coolplus Construction Industry Center. THE FLAT GLASS GROUP IN 2014 In 2014, with the launch of its ongoing investments following various acquisitions and joint ventures, Trakya Cam will be operating in nine countries with eleven float lines and eight manufacturing plants in the automotive segment, in addition to other operations. Moving towards becoming a global company with an increasing customer focus, Trakya Cam plans on continuing its activities geared towards higher service quality and a wider range of value-added products. On top of this, the Company will maintain its going focus on energy and the environment, contributing to sustainability through maximizing the efficient use of its resources. Moreover, Trakya Cam will take further steps to strengthen its progress towards its vision of becoming a fast growing global flat glass company with its strong brands and innovative solutions by reinforcing its commitment and approach to continuous improvement. HUMAN RESOURCES As of the end of, total of 5,395 people, comprising 1,496 personnel on monthly salaries and 3,899 personnel on hourly wages are employed at the Company. The human resources practices of our Company are implemented with regard to the corporate values of the Şişecam Group and all relevant legislation and regulations, and guard the common interests of both the employee and employer. All human resources practices at the Company such as recruitment, education, performance, administration, optimum staff analyses, reorganization projects, salaries, career management and substitution systems, are conducted in accordance with the law and regulations and guarding the mutual interests of employer and employee. In the Company s globalizing corporate culture, the development activities deemed necessary by human resources are undertaken according to our successoriented performance culture and approach to constant development. In order for potential leaders and expert technical human resources to develop their international management competencies, domestic and overseas training and development programs are carried out. INDUSTRIAL RELATIONS / OCCUPATIONAL HEALTH AND SAFETY Studies are carried out and the necessary training delivered on subjects related to the legal obligations in accordance with the Law on Occupational Health and Safety, and events are organized with the aim of fostering a culture of workplace health and safety. Relations with the unions are carried out within the framework of Collective Bargaining Agreements conforming to the relevant laws and regulations, through the preservation of industrial peace and sustained production. The unions are also requested to provide opinions and recommendations on the ongoing practices. 14 TRAKYA CAM SANAYİİ ANNUAL REPORT

17 The 3rd Period Workplace Collective Bargaining Agreement covering the period of with the Kristal- İş Trade Union for Trakya Yenişehir Cam San. A.Ş. was signed on The Collective Bargaining Agreement covering the period of with the Podkrepa Trade Union for Trakya Glass Bulgaria EAD was signed on As of November, negotiations on the Collective Bargaining Agreement with the union organized in our Glasscorp SA Factory in Romania, which is active in the production of automotive glass, were started. In accordance with our corporate values, employees may not be discriminated against on the basis of race, religion, language or gender and diversity is respected. All work processes are sensitively monitored under the framework of the Şişecam Ethical Principles. RISK MANAGEMENT AND INTERNAL CONTROL SYSTEM Corporate Structure The Company s risk management and internal auditing activities are carried out under the authority of the Early Risk Detection Committee and Auditing Committee established under the Board of Directors. Committee meetings are held periodically, in line with the previously determined agenda, and all decisions taken or suggestions made at the meeting are reported back to the Board of Directors. By means of these committees, the Board of Directors is able to closely monitor risk management and internal auditing processes carried out throughout the Group and issue the necessary directives. The activities carried out under the management and administration of the Risk Management and Internal Auditing Directorates subordinate to the Türkiye Şişe ve Cam Fabrikaları A.Ş. Board of Directors, together with the assistance of the workforce, provide stakeholders with security against risk at the highest level and aim to assure the protection of the company s physical and moral assets, the minimalization of losses incurred through uncertainties, and obtaining the maximum benefit from potential opportunities arising. Throughout these activities, it is intended that the risk management and internal auditing functions maintain the highest levels of mutual communication, thus supporting the decisionmaking process, and that the efficiency of management be increased. Risk Management The risk management activities of the Group are carried out under a holistic, proactive approach based on the practices of corporate risk management. The risk catalogues prepared are periodically updated with the participation of the Group employees and the risks are ranked according to their order of importance. By taking the risk appetite of the Board of Directors into account, with regard to analyzed risks, the strategies to be implemented are established and the necessary measures taken. These projects are not limited to financial and strategic risks only, but also cover such operational risks as production, sales, occupational health and safety, emergency management and information technologies. Internal Audit The aim of our internal auditing activities, which have long taken place under the aegis of the Group s well-established and institutionalized corporate structure is; to support the healthy development of the Group companies, to assist in assuring that our practices are carried out in a spirit of unity and togetherness and to undertake effective, constructive supervision to ensure that our activities are carried out in conformity with regulations, and to make timely, precautionary interventions whenever necessary. Internal audit activities are carried out in accordance with the annual audit program approved by the Board of Directors of Türkiye Şişe ve Cam Fabrikaları A.Ş. In the establishment of the annual audit program, the results of the risk management studies are also used, meaning that risk-focused auditing practices are implemented. TRAKYA CAM SANAYİİ ANNUAL REPORT 15

18 16 TRAKYA CAM SANAYİİ ANNUAL REPORT

19 TRAKYA CAM SANAYİİ A.Ş. CONSOLIDATED FINANCIAL STATEMENTS COVERING THE PERIOD OF JANUARY 1 - DECEMBER 31, AND INDEPENDENT AUDITOR S REPORT TRAKYA CAM SANAYİİ ANNUAL REPORT 17

20 CONVENIENCE TRANSLATION INTO ENGLISH OF INDEPENDENT AUDITOR S REPORT ORIGINALLY ISSUED IN TURKISH To the Board of Directors of Trakya Cam A.Ş. 1. We have audited the accompanying consolidated balance sheet of Trakya Cam Sanayii A.Ş. ( the Company ) and its Subsidiaries (collectively referred to as the Group ) as at and the related consolidated statement of profit or loss, consolidated statement of other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended and a summary of significant accounting policies and explanatory notes. Management s responsibility for the consolidated financial statements 2. The Group s management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with the Turkish Accounting Standards published by the Public Oversight Accounting and Auditing Standards Authority ( POA ) and for such internal controls as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to error and/or fraud. Independent auditor s responsibility 3. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. Our audit was conducted in accordance with standards on auditing issued by the Capital Markets Board of Turkey. Those standards require that ethical requirements are complied with and that the audit is planned and performed to obtain reasonable assurance whether the consolidated financial statements are free from material misstatement. An audit involves performing procedures to obtain evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on our professional judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to error and/or fraud. In making those risk assessment; the Group s internal control system is taken into consideration. Our purpose, however, is not to express an opinion on the effectiveness of internal control system, but to design procedures that are appropriate for the circumstances in order to identify the relation between the consolidated financial statements prepared by the Group and its internal control system. An audit includes also evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Group management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained during our audit is sufficient and appropriate to provide a basis for our audit opinion. 18 TRAKYA CAM SANAYİİ ANNUAL REPORT