DOĞAN YAYIN HOLDİNG 2010 ANNUAL REPORT

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2 CONTENTS DYH AT A GLANCE 2 Fields of Activity 4 Business Partnerships 6 Services and Products 12 Building Blocks of DYH 14 DYH in Figures 14 DYH Shareholding Structure 14 DYH Stock Performance 15 Key Financial Indicators MANAGEMENT 16 Message From The Honorary President 18 Message from the Chairperson 20 Board of Directors 24 Executive Committee 2010 IN REVIEW 26 Management Discussion and Analysis 34 Internal Audit and Control 35 Risk Management 36 Human Resources SOCIAL RESPONSIBILITY 38 DYH s Contribution to Social Development 39 End Domestic Violence! Campaign 41 Dad, Send Me to School Campaign 44 Social Responsibility Support Projects 45 Aydın Doğan Foundation 48 Sustainable Growth and the Environment CORPORATE GOVERNANCE 50 DYH s Broadcasting and Publishing Principles 52 DYH s Code of Ethics and Conduct 54 Corporate Governance Principles Compliance Report 65 Profit Distribution Policy 66 Board of Directors Resolution on the Approval of the Company s Financial Report for the Period January 1, 2010-December 31, Statement of Responsibility for the Financial Report for the Period January 1, 2010-December 31, Board of Directors Resolution on the Profit Distribution Proposal for the Period January 1, 2010-December 31, Profit Distribution Statement for the Period January 1, 2010-December 31, Board of Directors Resolution on the Annual Report and Corporate Governance Compliance Report for the Period January 1, 2010-December 31, Statement of Responsibility for the Annual Report for the Period January 1, 2010-December 31, Internal Audit Report FINANCIAL DATA 73 Independent Auditor s Report 209 Contact Information of the Senior Management 210 Directory of DYH Companies

3 Doğan Yayın Holding in Turkey and the World Active in fields ranging from media to telecommunications, from industry and energy to tourism, the Doğan Group ranks among Turkey s leading business conglomerates. Doğan Group includes Doğan Şirketler Grubu Holding A.Ş., operating in the fields of energy, tourism, industry, trade and marketing and Doğan Yayın Holding A.Ş. involved in media and related areas. As one of the leading Turkish media corporations, Doğan Yayın Holding (DYH) is active in newspaper, magazine and book publishing, radio and television broadcasting and production, Internet, printing, distribution and new media businesses. Content providers of the Group include corporations, newspapers, magazines, publishing houses, television channels, radio stations and a music production company. Service providers, on the other hand, is made up of distribution, retail, production, digital platform, Internet and printing companies, as well as a factoring company. All of these companies, that operate on the principle of optimum integration of resources, are driven by strong synergy and continuously develop in their fields of activity. As a result, DYH maintains a strong position in its sector, in terms of profitability and innovations. DYH and its important subsidiaries, Hürriyet Gazetecilik ve Matbaacılık A.Ş. (Hürriyet Gazetecilik), Doğan Gazetecilik A.Ş. (Doğan Gazetecilik) and Doğan Burda Dergi Yayıncılık ve Pazarlama A.Ş. (Doğan Burda) stocks are publicly traded on the Istanbul Stock Exchange (ISE).

4 dyh at a glance management 2010 ın revıew Fields of Activity Newspaper publishing TV & Radio Broadcasting and Production Magazine and Book Publishing 2

5 socıal responsıbılıty corporate governance fınancıal data Distribution, Retailing and Printing Internet European Operations 3

6 dyh at a glance management 2010 ın revıew Business Partnerships Book Publishing Partnership Magazines Partnership TV Broadcasting Romania Partnership Thematic Channels Income Sharing Discovery Group 4

7 socıal responsıbılıty corporate governance fınancıal data TV Channels Partnership TV Broadcasting Turkey Partnership Technology Partnership Finance Partnership Doğan Gazetecilik 5

8 dyh at a glance management 2010 ın revıew Services and Products Newspaper Publishing Hürriyet: The symbol of free and independent journalism in the Turkish press since its establishment in 1948, Hürriyet is the pioneer of serious and popular journalism in Turkey with its unique approach to reporting and commentators able to reflect a wide range of opinions. Hürriyet Daily News: As the oldest daily published in English in Turkey, Hürriyet Daily News has been in print for 47 years and fills an important gap in the Turkish press. It is the primary local news source for foreigners living in Turkey. Milliyet: As the icon of reliability in the press and has been a champion of the institution of ethics and values in journalism since its first issue published in Milliyet is a newspaper of undisputed credibility and the reference of choice for opinion makers from all fields with a prestigious range of writers and journalists. Radikal: Radikal has been published under the Hürriyet Group since With its independent and comprehensive content, Radikal has always served as the address for innovations in the Turkish press and has been the newspaper of choice for people who follow global developments and seek quality information in various areas, from domestic politics to culture and art. Posta: Owing to its innovative and original approach to journalism since its launch in 1995, Posta has appealed to larger masses and has the highest circulation and largest readership in Turkey. Vatan: Launched with the vision that there should be a newspaper in Turkey publishing every story that is accurate, attracts attention with its young adult readers according to National Readership Survey in December November 2010 term results. Fanatik: Launched on November 20, 1995, Fanatik is the top-of-mind sports paper in Turkey. By appealing to sports fans of all ages, Fanatik has a prominent place in the sports press. TME Newspapers Iz Ruk v Ruki: Iz Ruk v Ruki - meaning from hand to hand - is a daily paper for classified ads such as real estate, vehicles, jobs, etc. Since 1992, it is positioned as the market leader in Russia and Eastern Europe and has been one of the strongest brands in the region. In Russia, Iz Ruk v Ruki has a wide distribution network spanning one hundred cities; it is also published in Belarus and Kazakhstan. By the end of December 2010, its total monthly circulation had surpassed 3.5 million. Expressz: Established in 1984, Expressz has the highest brand awareness with its daily newspapers and magazines and it is the leading publisher in Hungary s classifieds market. Expressz covers private vehicles, commercial vehicles and real estate listings and reaches a monthly average of 320,000 readers across Hungary. Oglasnik: Established in 1989 in Zagreb, Oglasnik is among the leading classified ad publishers in Croatia. The publishing group offers three different weekly editions featuring nearly 300,000 ads per month and reaches 200,000 readers monthly. 6

9 socıal responsıbılıty corporate governance fınancıal data TV Broadcasting National TV Channels Kanal D: This channel reflects Turkey s vision with a modern, creative and innovative approach to television broadcasting. According to 2010 figures, Kanal D has maintained its leading position with an average of 21.2% audience share in prime time. Star TV: Thanks to its high quality series, feature films, news bulletins, Champions League and European League matches and rich visual content, Star TV was among the three most viewed channels with an average of 9.3% audience share in prime time in DYH-Turner Co-channels CNN Türk: Founded as a joint venture between Doğan Media Group and Time Warner on October 11, 1999, CNN Türk is not only the first Turkish television channel established in partnership with a foreign media corporation, but also the first national channel under the CNN brand not managed from Atlanta and providing 24-hour news coverage in a national language. TNT: Broadcasting nationwide since March 3, 2008, TNT moved the partnership between DYH and Time Warner that started with CNN Türk to a higher level. TNT s scheduling predominantly consists of TV series and movies. Having increased its brand awareness in Turkey, TNT changed its strategy to general themed broadcasting and continues to raise its goals. Interactive TV FIX TV: As an interactive entertainment and music channel, FIX TV receiving content support from DYH and broadcasting local and international music clips and distinctive TV series, functions as a bridge between mobile world and the audience through melody, chat and quiz shows that are followed by the rising generation. Digital Services Digital TV Platform - D-Smart and Telecom Operator Smile: Doğan TV Holding started investments in its digital platform D-Smart in the second half of 2006 and it was introduced to the market in February D-Smart is made up of thematic channels, numerous domestic and foreign channels, radio, as well as all the national channels. It also has interactive features that offer immediate access to breaking news, stock exchange indexes and weather reports with a single click. D-Smart, an important player in the digital TV broadcasting sector and Smile ADSL, providing Internet and value added services, a leader among alternative telecommunications operators, were unified into a single organization in January 2010, in consideration of the new dynamics in the market and customers needs. Doğan Platform: Doğan Platform is the representative of DYH in the information technologies sector and its main areas of activity are corporate and individual Internet access services, telecommunication services, customer services (call center) and mobile technologies. In order to create synergy, the operations of D-Smart and Doğan Platform were united managerially. Doğan Teleshopping: Doğan Teleshopping commenced operation in January 2007; it is a distant sales company, operating through TV broadcasts and the Internet. Starting from the beginning of 2010, the Company limited its broadcasts to the D Shopping satellite channel that broadcasts through the Türksat satellite. D Shopping can also be viewed on channel 60 of the D-Smart platform. Doğan Teleshopping distributed 600,000 products to 490,000 customers as of December 31, D-Smart Channels D-Smart s Thematic Channels: D-Smart s thematic channels consist of : Smart Çocuk for documentaries, films and series appealing to children; Euro Futbol, Sports TV and Tay TV for various sports such as soccer, basketball, fencing and sailing; Yeşilçam Smart for unforgettable classics from Turkish cinema; other film and series channels such as Max Smart, Dizi Smart, Movie Smart, MoviePlus 1 and 2; Penthouse, Passion, Fantasy Marc Dorcel and Eros for adult programs, shows and films; Dream TV for domestic and foreign music, as well as entertainment, technology and popular culture and DreamTurk, the new address for Turkish music. Channels whose Advertising Rights are owned by D-Smart: Discovery Channel, Animal Planet, Discovery Science and Discovery 7

10 dyh at a glance management 2010 ın revıew Services and Products World for science, technology, adventure, archeology, history of civilizations, mythology and the world of animals; Discovery Travel & Living for travel programs; Da Vinci Learning, a fascinating channel full of fun and surprises; Kidsco and Luli for kids are among D-Smart channels. Foreign Platform Channels: Foreign channels include those broadcasting new films and series, as well as sports, entertainment and children s channels: Universal Channel, FX, Eurosport. Business Partner Channels: SINEMA TV. Premium Movie Channels: Sinema TV 1-2, SinemaTV2 and SinemaTV Aile (Family). Pay-per-View Channels: Among the payper-view channels, LOCA features the most recent films for the D-Smart viewers. D-Smart PVR offers the chance to record programs, rewind or fast forward live broadcasts and record two broadcasts at a time. D-VD Club allows customers to watch D-Smart s content at the time and for the duration desired by the customer. İsteizle.com, on the other hand, offers Video-on-Demand (İste-İzle) services, to facilitate access to content such as films, series, documentaries and live sports matches at any time, from anywhere. HD Channels: The D-Smart HD (High Definition) channels that provide high definition broadcasting via satellite receivers compatible with D-Smart HD are as follows: HD4Men, HD4Women, Discovery HD Showcase, Animal Planet HD, Eurosport HD, 8 Kanal D HD, Star TV HD, TRT HD, Universal Channel HD, HD-en, BBC HD, Sinema TV HD, SinemaTV HD 2 and Penthouse HD. Radio Broadcasting Radyo D: Broadcasting Turkish pop music at world standards via exclusively digital systems, Radyo D is one of the first nationwide radio channels in Turkey. CNN Türk Radyo: CNN Türk Radyo is CNN Türk s audio broadcasting branch, established via a joint venture between Doğan Media Group and Time Warner. Around the clock, CNN Türk Radyo broadcasts on all aspects of life with accurate, impartial, reliable and objective journalism principles as set forth by CNN Türk. Slow Türk: Slow Türk broadcasts only the best romantic songs around the clock and it has become a very popular radio channel in a short period of time. Radyo Moda: Broadcasting around the clock, Radyo Moda prioritizes Turkish pop music, as well as the most fashionable tracks of various musical genres. TV and Music Production D Productions: It is one of Turkey s major production companies, with its creative and dynamic perspective, cutting edge technology, innovative team, its television, movie, ads, music video production branches, as well as a program and film distribution network. Kanal D Home Video: Making a difference in every field in which it operates, D Productions continues to bring quality and diversity to home cinema by introducing the Kanal D Home Video brand to larger masses through its low price policy. Doğan Music Company (DMC): Founded in 2000, DMC is a producer of popular hit songs and a key player of the Turkish music industry with a 19% market share. News Agency Doğan Haber Ajansı (Doğan News Agency - DHA): Established under Doğan Group in 1999, DHA took over the functions of the former Mil-ha Agency and Hürriyet News Agency. It is an expert organization specialized in audio and video news provided by experienced correspondents and photo journalists. Magazine and Book Publishing Doğan Burda Dergi (Doğan Burda Magazine): Operating under the name Doğan Burda Dergi Yayıncılık ve Pazarlama A.Ş. since July 2005, it has been the leading Turkish company in magazine publication. There are 25 brands published under its umbrella. Doğan Egmont: Publishing magazines and books oriented to the children between 0 and 14 years of age, Doğan Egmont is the leader in its field.

11 socıal responsıbılıty corporate governance fınancıal data Doğan Kitap: Doğan Kitap is the most influential publishing house in the sector, with its books topping best-seller lists and remarkable sales achievements. Internet hurriyet.com.tr: The website boosts its user figures every day and figures among the most interactive Internet sites with 6,000 comments posted daily. milliyet.com.tr: This website has achieved many firsts in the area of Internet journalism since the day it was launched. With its branded contents and channel sponsorships, milliyet. com.tr extended digital broadcasting from the Internet to mobile and outdoor media as well. With 2.5 million individual visitors daily, the website is the most visited news portal in Turkey. fanatik.com.tr: The website closely follows sports news in Turkey and around the world. With an average of 10 million visitors monthly and 791,000 active subscribers, it is the best sports website in Turkey. In addition to the online sports content, the website also offers an interactive sports platform. gazetevatan.com: Thanks to its reliable, fast and innovative approach to journalism and with its recently opened unique channels, gazetevatan. com has achieved a twenty-fold growth in the last three years and became the fastest growing online newspaper. The website hosts a daily average of 750,000 individual visitors and its daily page view number is over 12 million. posta.com.tr: This website was launched in October 2009, with a mission of providing all news related to life and people to the readers in a fast manner. The website attained an important position in online journalism by reaching a significant number of visitors in a very short time. In 2010, the website hosted a monthly average of 3 million visitors and is among the five most visited news sites. kanald.com.tr: The website was the most visited TV site with a monthly average of five million individual visitors in The new design of the website integrated various subsites such as Web TV, Kanal D Haber, Kanal D Fan pages and Filmozor. startv.com.tr: As of year-end 2010, this website had hosted a daily average of 150,000 visitors; its daily page view number was approximately 600,000. In 2010, Star TV website was the second most visited TV site after Kanal D s website. cnnturk.com: cnnturk.com is a constantly expanding news portal with vast content, Haberim - a citizen journalism practice, various columnists and exclusive interviews. yenibiris.com.tr: One of the pioneers of online human resources services in Turkey, yenibiriş is visited by over 1.25 million users on a monthly average and is the leader in its field. hurriyetemlak.com: With a target audience comprised of professional real estate agents, construction companies, contractors and prefabricated home builders, as well as savvy buyers, hurriyetemlak, the property portal of Hürriyet newspaper, currently features over 800,000 ads daily and its daily page view number is three million. milliyetemlak.com.tr: The website serves as the main resource for those who want to buy, sell, rent property and also meet all their real estate related needs. With a portfolio of 600,000 ads and a monthly average of 1,300,000 individual visitors, the website is among the most preferred sites in this category. hurriyetoto.com: Launched in April 2007, hurriyetoto.com shares the same team and infrastructure with hurriyetemlak.com. With a young and a dynamic team, hurriyetoto.com continues to increase the number of its daily visitors and page views. arabam.com: Breaking new ground in Turkey by moving automotive classifieds to the web, arabam.com hosts approximately 1.5 million individual users and is visited by an average of 3.5 million visitors on a monthly basis. hurriyetaile.com: Hürriyet Aile, the new portal of Hürriyet, tackles the concept of family with a different approach. The website covers various topics such as femalemale relationships, shopping, pregnancy, technological products, health and city guides. Additionally, the website offers its readers prominent columnists and surprising articles. 9

12 dyh at a glance management 2010 ın revıew Services and Products hurriyetkiyasla.com: The website was launched under the Hürriyet Internet Group in November 2009, equipped with a system for the objective comparison of and online application for personal loans and credit cards. It continues to enhance services with its specialist staff and state-of-the-art products. tipeez.com: Launched in November 2009, as Turkey s first children and youth portal, Tipeez. com expands each day with different and entertaining events oriented to children and youth. yakala.co: Launched in October 2010, yakala. co offers daily discounts, opportunities and coupons that can be used at entertainment venues or for various cultural and art events or products. TME Websites The online version of the Iz Ruk v Ruki classifieds newspaper published since 1992, has over 320,000 visitors daily. Irr.ru has the highest brand awareness in Russia, this fact was verified by the Millward Brown survey conducted in Moscow and its surroundings in Irr.ru is visited by a monthly average of five million individual visitors. The website expanded its network and content to Belarus and Kazakhstan as well. Launched in May 2010, autoscout24.ru is a partnership with Pronto-Moscow and AutoScout24 (Deutsche Telekom), which offers extensive content and is the most visited automotive classifieds website 10 in Western Europe. Since the second-hand car market volume in Russia is approximately 4-5 million, coupled with the investment and brand power of its founding partners, autoscout24. ru is expected to have a strong position in the market in a very short time and become one of the top five sites in The website s image and business model (subscriber based) was revamped in March 2010 and its monthly number of individual visitors reached 2.4 million. With a portfolio of 32,000 job posts annually and 1.5 million resumes, job.ru is one of the most chosen human resources websites in Russia. The website of Aviso, one of the leading media corporations in Ukraine, was launched in The website offers services under 11 different categories and hosts 500,000 individual visitors monthly. The website s portfolio consists of over 120,000 ads. Oglasnik renewed its image in 2010 and thus strengthened its position as the leading classifieds website in Crotia. The website offers services under 18 different categories and reached 400,000 visitors and a portfolio of 160,000 listings in With over 40,000 individual visitors daily and over 25,000 listings, nekretnine.net is the most visited real estate website in Croatia. With an average of 160,000 individual visitors monthly and 17,000 listings, auti.hr is the most visited automotive classifieds website in Croatia. It is Croatia s most visited job search and career website and hosts an average of 170,000 individual visitors monthly. With over one million individual visitors and over 400,000 listings under 32 categories, expressz.hu is the leading classifieds website in Hungary. Launched toward the end of 2008, Szuperingatlan, which means super real estate has forged ahead on its path to becoming one of the most popular property websites in Hungary. The website s number of monthly individual visitors reached 191,000 while the number of ads reached 110, Launched in August 2008, Szuperallas s brand awareness among career and human resources websites has increased in a very short time and it attained 140,000 visitors monthly. Szuperallas hosts over 25,000 resumes and moves forward on its path to become the best career website in Hungary. With over 321,000 individual visitors monthly, com is the leading career and human resources website in Slovenia and it operates in Bosnia and Serbia as well. The website s annual career fairs and seminars allow employers and jobseekers to meet.

13 socıal responsıbılıty corporate governance fınancıal data Distribution and Retailing Yaysat: Yaysat is the most wide-reaching organization in Turkey in regard to print media distribution. The company runs the nationwide distribution of 25 national and 14 regional newspapers; 15 weekly, 5 bi-weekly, 113 monthly and 180 bi-monthly or other periodical domestic magazines, as well as 213 foreign publications. DPP: As the unrivalled leader for magazine marketing and planning, DPP achieved great prestige in the industry with foreign partnership and rational enterprises. D&R: Offering books, music, movies, magazines and games, as well as hobby, multimedia and electronic products, accessories and stationery at 101 stores in 20 provinces, D&R is an important actor in its segment with over 100,000 product lines, as well as its transaction volume and concepts. Printing DPC: Operating under the umbrella of DYH, Doğan Printing Center (DPC) runs the print operations of ten national daily newspapers and a number of periodicals. Doğan Ofset: Closely monitoring developments in the global printing industry, Doğan Ofset channels its investments toward the latest technology. Operations in Europe Doğan Medya International: The company coordinates a great part of the publications and broadcasting operations of DYH, targeted to the Turkish people living in Europe and plays an important role in promoting the relations between DYH and leading media companies in these countries. TME: The leading marketplace for communities of real estate, auto and recruitment with its branded classified advertising websites and publication and related services. Kanal D Romania: Doğan Media International S.A. has received the national broadcasting license in a very short time and signed contracts with over 360 cable companies and four satellite platforms, that provide the main broadcasting medium in Romania. Consequently, Kanal D started broadcasting in Romania on February 18, Euro D ve Euro Star: Euro D was established in 1996 to enable Turkish people living abroad to keep in touch with news from Turkey. On its way to becoming a lifeline for European Turks, Euro Star has been reaching a wide audience since its early days with a dazzling range of programming that offers lifestyle to entertainment, news to game shows and health to sports. Other Businesses Dış Ticaret (Doğan Foreign Trade): Doğan Dış Ticaret Mümessillik A.Ş. and Işıl İthalat İhracat Mümessillik A.Ş. are responsible for the import of mainly newsprint and print materials. Doğan Factoring: Thanks to its comprehensive risk analyses for commercial loans, Doğan Factoring plays a significant role in alleviating any possible payment difficulties of its clients, thereby creating a significant added value for DYH. Social Activities Aydın Doğan Foundation: Aydın Doğan Foundation was established in 1996 with the purpose of bringing under a single roof the numerous social responsibility projects of Doğan Group companies ranging from education to arts and culture, from sports to health and environmental protection. 11

14 dyh at a glance management 2010 ın revıew Building Blocks of DYH Mission To maintain its position in the news, entertainment and media sectors To compete in global markets Vision To develop media tools for news, education and entertainment and make these tools more widely accessible To use innovative methods to deliver content to all customers To figure among the world s leading media companies 12

15 socıal responsıbılıty corporate governance fınancıal data Values Reliability and responsibility Creativity and leadership in innovation Rapid decision-making Teamwork Strategies To provide customer-focused services To develop custom-made products for readers To produce content using traditional brands To keep pace with advances in technology To diversify and enhance content distribution channels using innovative methods To provide customized information and entertainment products and tools To diversify and expand sales and distribution channels To collaborate with leading global media companies 13

16 dyh at a glance management 2010 ın revıew Doğan Yayın Holding in Figures DYH Shareholding Structure (TRY thousand) 74.5% 0.7% 2.3% 22.5% TL 745,305 TL 6,717 TL 22,962 TL 225,016 Doğan Şirketler Grubu Holding A.Ş. Aydın Doğan Foundation Doğan Family Free float As of December 31, 2010, the 11.5% portion of 74.5% shares held by Doğan Şirketler Grubu Holding A.Ş. are openly traded on Istanbul Stock Exchange. DYH Stock Performance Capital as of Rights Bonus Capital Year-end 2009-end Issue Issue as of Closing 2010-end Price* (TRY) TRY million TRY million (%) TRY million (%) TRY million Doğan Yayın Holding A.Ş , Hürriyet Gazetecilik ve Matbaacılık A.Ş Doğan Gazetecilik A.Ş Doğan Burda Dergi Yayıncılık ve Pazarlama A.Ş Market Capitalization (US$ million) ** , ,059 2,597 In 2010, DYH s stock performance outperformed the ISE-100 Index by 22%. While the stock performances of DYH subsidiaries, Hürriyet Gazetecilik and Doğan Gazetecilik remained below the ISE-100 Index in 2010, Doğan Burda shares yielded returns parallel to the Index. DYH s issued capital was increased to TRY 1,000,000,000 from TRY 802,000,000, via rights issue. With regards to the rights issued between April 12, 2010 and April 26, 2010, a share with a nominal value of TRY 1 was offered for sale for TRY 1. In 2010, DYH subsidiary Hürriyet Gazetecilik distributed a total dividend payment of TRY 55,2 million (gross TRY 0.10/share) and Doğan Burda distributed a total dividend payment of TRY 7,5 million (gross TRY 0.38/share). * The year-end closing prices were adjusted according to the capital increases and dividend payments. ** Calculated based on year-end raw price data & historic paid-in capital. 14

17 socıal responsıbılıty corporate governance fınancıal data Key Financial Indicators (TRY millions) Net Sales 2,620 2,435 2,880 2,559 2,110 Gross Profit Operating Profit /(Loss) (1) 9 (170) (7) EBITDA (2) EBITDA Margin (%) Net profit/ (Loss) (3) (237) (343) (324) 617 (23) (TRY millions) Net Sales Total Assets Net Sales Total Assets Publishing 1,363 1,873 1,348 2,112 Broadcasting 929 1, ,525 Retailing Other Intersegment eliminations and reclassifications (124) 337 (122) 377 (4) Total 2,620 3,892 2,435 4,199 (TRY millions) Current Assets 1,284 1,465 1,982 1, Non-current Assets 2,608 2,734 2,677 2,439 1,501 Short-term Bank Liabilities Long-term Bank Liabilities ,250 1, Net Liabilities (1,109) (1,100) (1,140) (572) (533) Investments Majority Shareholders Equity (1) Income/expenses from other activities not included. (2) Interest rate, Amortization, Profit Before Tax (EBITDA) calculated by DYH; amortization of television program rights not included. (3) Attributable to Equity holders of the Company (4) Sum of associates, unallocated assets and intercompany eliminations and reclassifications. 15

18 dyh at a glance management 2010 ın revıew Message From The Honorary President Dear Shareholders, As we leave behind a year in which we successfully faced immense challenges, Doğan Group strides confidently into 2011 filled with great hope for the future. The shifting impact of the global economic crisis in 2010, vis-à-vis the previous year, led governments to focus on structural reforms and, even, to act in unison to accelerate recovery in the world economy. What we see now is that the old global order has been fundamentally altered in both its economic and strategic dimensions. Meanwhile, the Turkish economy carefully managed and with structural reforms implemented well before the crisis hit, is a true standout with its resilience, strength and uptrend. At Doğan Group, we are proud, and fortunate, to operate in a country with such a solid and robust economy. I would also like to share with you an event of great personal significance for me: At the end of 2009, I handed over the chairmanship of Doğan Yayın Holding to Arzuhan Doğan Yalçındağ. It was with extraordinary pleasure that I passed this position on to the next generation, so they might instill the Group with their own competencies and unique qualifications required for the long-term sustainability of the Company. On the eve of 2010, our Group initiated a reorganization in order to ensure our sustainable growth, further improve our current economic power and market position, and establish additional strong international partnerships in investment activities beyond our national borders. The reorganization initiative was implemented throughout the year and served to reinforce the corporate structure, empower the management of the Holding and its subsidiaries, and to raise consolidated profitability and overall business performance. These efforts will gain increasing momentum in As a key component of this strategy, we also plan to continue restructuring our current investment portfolio, in keeping with our objective to create maximum value for our stockholders. With the many products and services we develop, the significant employment opportunities we generate, and the vast tax revenue that we proudly contribute to the nation, Doğan Group has always been one of Turkey s leading economic groups. We have long played an important role in the advancement of the country, with our vanguard companies, the diverse range of investments we make in Turkey, and through social responsibility projects that contribute to development across every segment of society. With our increasing international investments, we have also resolutely moved forward in our strategic goal to become a regional player. Doğan Group has become ever stronger through each transformation it has undertaken during its history. I have infinite faith that we will achieve great success in this new period by accelerating our reorganization efforts, in line with improving economic conditions. As one of the leading and longest-established groups in Turkey, I am certain we will continue our track record of positive performance in the forthcoming period, thanks to the unwavering support of all our economic and social stakeholders. I have no doubt that we will sustain our leadership position, with our reorganized structure and the help of our committed employees. I would like to extend my heartfelt gratitude to our employees, customers, business partners, and domestic and international shareholders who have been steadfast in their support and trust in us even through the most difficult times. To everyone, I wish good health, much happiness, great success, and lasting peace in Aydın Doğan Honorary President Despite an ongoing economic crisis that did not spare Turkey, along with the tax penalty cases to which we have devoted a great deal of our energies, Doğan Yayin Holding has continued to its strategic focus on risk management and operating profitability. 16

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20 dyh at a glance management 2010 ın revıew Message from the Chairperson Dear Shareholders, The global economic crisis, which struck in 2008 and spread worldwide the following year, entered a new phase in While we did witness broad, positive economic growth this past year thanks to government-implemented measures, much of this uptick was in fact artificial, and backed by short-term policies. Throughout 2010, historic amounts of liquidity continued to be injected into deeply troubled banks. In some countries, public deficits and debt stock increased so dramatically that serious doubts were raised regarding the ability of these nations to meet their external obligations and liabilities. As a result of a lack of genuine structural reforms in the world economy, 2011 began somewhat auspiciously with an international currency war. Although rebounding from the global crisis was at the top of the economic agenda for 2010, the prevailing belief now is that a full and lasting recovery will take longer than expected. To provide for real, long-term economic growth, necessary structural adjustments must be implemented jointly by national economies in Turkey successfully weathered the stormy period during 2010, when the credibility of many countries and governments was called into in question. This year, Turkey is in a very different position from those countries with which it has historically been compared. In recent years, the Turkish economy has been managed effectively with a long-term perspective. This approach enabled Turkey to become the fastest-growing economy in Europe in We also expect that the Turkish economy will continue to expand in the coming year. The country s economic upward momentum also signals reduced risks to investors. Investment in Turkey has become more attractive in the medium- and long-term; we further expect rating agencies to confirm this development by raising the country s sovereign credit rating in While Turkey and the world closed 2010 focused on these issues, the management of Doğan Group spent much of its time and resources to filing appeals to the tax penalties imposed on our subsidiaries throughout the year. These legal proceedings are still in progress. Doğan Group has always upheld tax ethics as a top priority and a fundamental corporate value; we have also had a long-standing and distinguished position as the corporation that pays the highest amount in taxes in Turkey. We believe that we will eventually put this chapter behind us, and continue to forge ahead. During 2010, Doğan Group focused on two other important issues: risk management and investment management. All of our companies delivered a better performance compared with the previous year, thanks to our active efforts to increase efficiency, improve our operating profit margins, and implement our reorganization initiatives, aligned with our overall strategic objectives. Underlying trends in the Turkish economy also had a positive impact on Doğan Group investments. Booming domestic demand lifted the advertising market back to pre-crisis levels, after having contracted locally and internationally in Another positive outcome of recovering market conditions is that Doğan Group s investments, particularly those in the media industry, recorded a strong performance in terms of revenue growth and profitability. In this transitional period, during which the world economic order changed and Turkey strengthened its standing and power, we reviewed our investment portfolio with an eye toward improving our sustainability. This led to a reorganization of our investments and overall corporate structure. With regard to restructuring our media investments and investigating potential partnership opportunities, we initiated studies together with the consultants about including adding new shareholders to Doğan Yayın Holding A.Ş. and/or selling our shares in existing subsidiaries totally or partially, selling assets, exchanging shares or establishing strategic partnerships. These studies are still ongoing. Aydın Doğan, the Founder of Doğan Group of companies and Honorary President of Doğan Yayin Holding, has long worked to ensure the long-term sustainability of his group of companies while actively supporting their adoption of strong corporate governance practices. He has well prepared successive generations for the challenges of the future, by providing intensive training, performance-based job experience and opportunities to participate in making strategic decisions. As of early 2010, I assumed the position of Chairperson of the Board of Directors as a member of this next generation, thanks to the positive future outlook Aydın Doğan has always held and his never-ending efforts to prepare Doğan Group for the inevitable challenges it will face. Well aware of the great responsibility that accompanies holding this position after the founder, I am very pleased that I will work with such a highly experienced team of professionals, in a group of companies with a strong corporate identity and a long track record of success over many years. With the Board of Directors and our other esteemed colleagues, we will continue to abide by our Group s founding philosophy of creating value for all stakeholders as we stride confidently into the future. Our ability to add value for Doğan Group investors and our sustainable growth strategies are based on an innate entrepreneurial spirit, keen adaptability to local and global dynamics, and an agile decision-making process. As we progress further into 2011, I would like to emphasize that Doğan Group will accelerate its reorganization efforts in line with changing market conditions; additionally, this will be the year when we make key decisions on where we will direct our investments, to ensure our sustainability for future generations. I wholeheartedly believe that we will succeed in our targeted transformation thanks to each and every one of our social and economic stakeholders, as well as our employees, who maintained their support and their trust and faith in us during the tough times we faced. I hope the year 2011 brings lasting peace, comfort, success, and prosperity to our nation and to the world. Arzuhan Yalçındağ Chairperson 18

21 socıal responsıbılıty corporate governance fınancıal data 19

22 dyh at a glance management 2010 ın revıew Board of Directors Aydın Doğan Honorary President Born in 1936 to a prominent family in Kelkit (Gümüşhane), Aydın Doğan completed his primary and secondary education in Kelkit and graduated from high school in Erzincan. Between 1956 and 1960, he attended Istanbul Economy and Commerce Academy where he was elected Student Community Leader. Following his registration with the Mecidiyeköy Tax Office in 1959, he engaged in various businesses such as freight shipping, contracting, automotive, commercial vehicles and construction machinery. In 1961, he set up his first company and was active in wholesale trade until In 1974, Doğan became involved with industry through his new company; in the years that followed, he served as a member of the Assembly and on the Board of the Istanbul Chamber of Commerce. He was elected to the Board of the Union of Chambers and Commodity Exchanges of Turkey (TOBB). His first venture in the world of press and publishing was through the acquisition of Milliyet newspaper in The acquisition of Hürriyet newspaper in 1994 reinforced his presence in the media. Between 1986 and 1996, he served as President of the Association of Turkish Newspaper Publishers. In 2004, Doğan was elected Deputy Chairperson of the World Association of Newspapers (WAN), the first Turkish representative voted to serve in this capacity. Doğan was awarded Turkey s State Medal of Outstanding Service in He received honorary doctorates from Girne American University, Aegean University, Baku State University and Marmara University in 1999, 2000, 2001 and 2005, respectively. In 1996, he established the Aydın Doğan Foundation, bringing social, cultural and educational activities of the Doğan Group under the same umbrella. He had eight schools built, bearing his and other family members names. The Foundation supports youth studying communication with the annual Young Communicators Award and organizes the Aydın Doğan International Cartoon Competition. The Aydın Doğan Award extends further support in various social and cultural fields ranging from literature to music, architecture to social sciences. Since 1977, Doğan has been named among the top taxpayers registered with the Istanbul Chamber of Commerce. His company that employed three people in 1961 is now one of Turkey s three largest conglomerates, with over 18,000 employees. The Doğan Group is comprised of numerous companies that provide goods and services across a wide spectrum - from media to energy distribution, industry to tourism and telecommunications to finance. The Honorary President of the Doğan Holding, Aydın Doğan is married and has four children and seven grandchildren. Arzuhan Yalçındağ* Chairperson After graduating from Saint-Michel High School, Arzuhan Yalçındağ received her undergraduate degree from the Department of Sociology at Boğaziçi University and a degree in Business Administration at American International University in London. Yalçındağ began her career in 1990 at Milpa. There, she started and managed a mail-order business in cooperation with the German firm Quelle. In 1993, she left Milpa, and between 1994 and 1995, she participated in the establishment of Alternatifbank and served on its Board. Yalçındağ managed the Finance Department at Milliyet Magazine Group from 1995 to She worked in various divisions at Kanal D from 1996 to In 1999, Yalçındağ initiated efforts to establish a joint news channel between the U.S. media company, Time Warner Inc., and Doğan Yayın Holding, which produced CNN TÜRK, in In 2005, she was appointed the CEO of Doğan TV and to the Doğan Holding Board of Directors. She maintained all these roles until taking the position of Chairperson of Doğan Holding and Doğan Yayın Holding. Yalçındağ is one of the founders of the Aydın Doğan Foundation and serves on its Board. Arzuhan Doğan Yalçındağ was the first female chairperson of the Turkish Industrialists and Businessmen s Association (TUSIAD) from 2007 to She continues to work with TUSIAD as a member of the TUSIAD Chairpersons Council. In addition, she serves as a Board Member for the following organizations: The Turkish Education Volunteers Foundation (TEGV), the Turkish- American Businessmen s Association (TABA), the Third Sector Foundation of Turkey (TÜSEV), and the Turkish Female Entrepreneurs Association (KAGIDER). She founded the Women s Initiative for Turkey in the EU, an effective platform that brings together Turkey s leading women to establish a dialogue with their European counterparts. Yalçındağ was also selected as a Young Global Leader by the World Economic Forum. As of January 2010, Yalçındağ is the Chairperson of Doğan Yayın Holding. 20 *As of January 2010, Aydın Doğan was named Honorary President; Arzuhan Yalçındağ serves as the Chairperson of Doğan Holding and Doğan Yayın Holding.

23 socıal responsıbılıty corporate governance fınancıal data İmre Barmanbek Vice Chairperson Born in 1942, İmre Barmanbek graduated from Ankara University, Faculty of Political Sciences, Department of Economics and Finance. She began her professional career as an Assistant Tax Inspector at the Ministry of Finance, Tax Inspectors Board; she became a tax inspector in Between 1969 and 1972 she worked as a Planning Specialist at the General Directorate of Incentives and Implementation of the State Planning Organization and later served as a member of the Tax Appeals Commission. After a successful career in the Ministry, Barmanbek moved onto the private sector and served as the Finance Manager and subsequently General Manager of Doğuş Akü, a joint venture between the Koç and Doğan Groups. She then became a Finance Coordinator at Doğan Holding; in 1998, she was promoted Head of Financial Affairs. Between 1999 and 2002 Barmanbek served as General Coordinator and Executive Member of the Board. Thanks to her dynamic management style and placing importance on value-added growth, İmre Barmanbek was granted the Female Manager of the Year award by Dünya newspaper in She was also ranked 33rd and 22nd in 2001 and 2002 consecutively, in the Most Powerful Business Women listing of Fortune Magazine. Since 2003, Barmanbek has served as Vice Chairperson of the Board and a member of the Executive Committee at Doğan Holding. Mehmet Ali Yalçındağ Board Member Born in Istanbul in 1964 and graduated with honors from the British American College in London in He joined the Doğan Group in 1990 as Assistant General Manager of Doğan Dış Ticaret and was responsible for all foreign trade transactions of the Group. In 1991, Yalçındağ was appointed Executive Committee Member of Doğan Holding and Assistant General Manager of Milliyet newspaper the following year. In 1994, he assisted the establishment of the Simge Group, which consequently led to the launch of four new newspapers including Posta, Fanatik and Radikal. When the media companies of the Doğan Group were merged under DYH in 1996, Yalçındağ was appointed Vice President of the DYH Executive Committee. He supported efforts to generate new synergy to benefit all organizations under DYH. He led subsequent efforts to establish Doğan Ofset to integrate dry press facilities, DPC to consolidate all newspaper printing facilities, Doğan Factoring to manage all receivables of the Group, Doğan Dış Ticaret (Doğan Foreign Trade) to bring all paper purchases under one roof and Doğan News Agency (DHA) to pool all news gathering departments. Following the incorporation of Star TV to the Group in 2005, he worked to gather all organizations involved in radio and TV broadcasting under the banner of Doğan TV. Yalçındağ led efforts to forge overseas partnerships such as the collaboration with Egmont Group in the field of children s books following the consolidation of Group s book publication activities, with the Burda Media Group in magazine publications following the consolidation of the Group magazines, with Time Warner in news broadcasting, with Axel Springer in television broadcasting, and finally with Deutsche Bank in newspaper publishing. In addition to serving as the CEO of Doğan Yayın Holding since 1999, Yalçındağ is also a member of WEF Media Managers, Chairman of IAA Turkey (International Advertising Association), Chairman of Turkish Advertising Board, a member of TÜSİAD (Turkish Industrialists and Businessmen s Association) and a member of TEGV (Educational Volunteers Foundation of Turkey). Mehmet Ali Yalçındağ is married and has two children. 21

24 dyh at a glance management 2010 ın revıew Board of Directors Ertuğrul Özkök Board Member Ertuğrul Özkök was born in Izmir in After graduating from the Izmir Namık Kemal High School, he entered the School of Press and Broadcasting, Faculty of Political Sciences, Ankara University. Following graduation, Özkök worked as a journalist for the Turkish Radio and Television Corporation (TRT) for a year and later received his PhD in Communication Sciences from the University of Paris. Upon his return from France, Özkök taught at Hacettepe University, later becoming an Assistant Professor in He resigned from the university and joined Hürriyet, taking the position as Chief of the Ankara Bureau. He was then assigned to the Moscow Office and served as the Editor-in-Chief. Currently Özkök is Editorial Vice President at DYH and a political columnist at Hürriyet. Özkök published his first book Sanat, İletişim ve İktidar (Art, Communication and Power) in 1982 and later released the titles Kitlelerin Çözülüşü (The Undoing of the Masses) in 1984, Elveda Başkaldırı (Farewell to Revolt) in 1987 and Stalin Baroku (The Stalin Baroque) in He is married, has one child and is fluent in English and French. Soner Gedik Board Member Born in Eskisehir in 1958, Soner Gedik received his BA in Economics and Public Finance from Ankara University. After completing an entrance examination, he joined the Ministry of Finance as Assistant Auditor in 1981 and was promoted to Auditor in 1985 with the top score in his class. Gedik was a public servant for six years, auditing leading private and public companies and honing his skills and expertise in finance. He later joined the Finance Division of Hürriyet Holding A.Ş. to serve as a financial consultant to the President of the Executive Committee of the Group. He was promoted Vice President of the Executive Committee in 1989 and subsequently served on the Board and as General Manager of Hürriyet Holding. In 1998, he played a crucial role in the foundation of Doğan Yayın Holding and assumed the duties of CFO and Vice President. At present, Gedik serves on the Board of all Doğan Yayın Holding companies and has been a Board member of Doğan Şirketler Grubu Holding A.Ş. since January