2012 ANNUAL REPORT 35 th YEAR

Transcription

1 2012 Annual Report 2012 ANNUAL REPORT 35 th YEAR

2 Tatarstan Alabuga Romania Buzau Bulgaria Targovishte stanbul Lüleburgaz-K rklareli Yeniflehir Polatl Mersin Field of activity Basic Glass Basic Glass (Investment) Home Appliances Glass Automotive Glass Egypt El Sukhna Automotive Glass (Investment) Solar Glass Headquarters Contents Consolidated Financial Indicators 02 Management 04 Report of the Board 07 Report of the Board of Auditors 16 Independent Auditors Report 19 Corporate Governance Principles Compliance Report 68 Agenda for the General Assembly 78 Text of Draft Amendment to Articles of Association of 79 Contact Information for Trakya Cam Group of Companies / Plants 87

3 Trakya Cam in Brief Founded in 1978 as a subsidiary of Turkiye fiifle ve Cam Fabrikalar A.fi.,Trakya Cam Sanayii A.fi. cames out the activities of the fiiflecam Group in the field of flat glass and stands as the 6th largest producer in the world, and 4th in Europe. By inaugurating a new facility in 1981, Trakya Cam became the first company in Eastern Europe, the Balkans, the Middle East and Northern Africa to utilize the modern float technology for production and continued to introduce numerous innovations to the flat glass industry both in Turkey and the region. Today performing production activities through its seven float lines, Trakya Cam is active in four main segments: Basic glass products (flat glass, patterned glass, mirror, laminated glass and coated glass) Automotive and other transportation vehicles glass, Solar glass, Home appliances glass In line with its vision of regional leadership and notion of multi-focused production, Trakya Cam expanded its activities beyond Turkey in the second half of the 2000 s. After the commissioning of the first float line in Balkans in 2006 through, Trakya Glass Bulgaria EAD that is established in Bulgaria, mirror and tempered glass lines were introduced, and the autoglass plant became operational in In 2009 the company decided to establish a joint venture with Saint-Gobain, a leading player in the global glass industry, in order to perform flat glass activities in Egypt and Russia. Trakya Cam carried out its domestic development through introducing two float and one coated glass lines put into use in 2007 and one laminated glass line in 2008 in Bursa Yenisehir. Today, the Company is a strong supplier in the region, serving the construction, automotive, energy and home appliances industries through its partnerships and seven float lines in five different locations.

4 Consolidated Financial Indicators Summary Consolidated Balance Sheets Million TL Million USD Current Assets 1,011 1, Fixed Assets 1,639 1,175 1, Total Assets 2,649 2,348 2,047 1,486 1,243 1,324 Current Liabilities Long Term Liabilities Shareholders' Equity 2,010 1,794 1,550 1, ,003 Total Liabilities and Shareholders' Equity 2,649 2,348 2,047 1,486 1,243 1,324 Net Financial Debts 13 (216) (190) 7 (114) (123) Summary Consolidated Income Statements Million TL Million USD Net Sales 1,249 1,255 1, Costs Of Sales (919) (809) (720) (513) (484) (480) Gross Profit Operating Expenses (254) (219) (183) (142) (131) (122) Other Income/Expenses (Net) Operating Profit (EBIT) Equity Method Effect 4 (1) 17 2 (0) 11 Financing Income/Expenses (Net) Profit Before Taxes Tax Provisions According to Turkish Tax Legislations (22) (53) (31) (12) (32) (21) Deferred Tax Provisions Net Profit After Taxes Minority Interests (9) (11) (12) (5) (7) (8) Net Profit /Loss Depreciations Earnings Before Interest, Taxes and Depreciation (EBITDA) Financial Ratios Current Assets/Short Term Liabilities (Current Ratio) Total Liabilities/Total Assets 24% 24% 24% Total Liabilities/Sherholders' Equity 32% 31% 32% Gross Profit/Net Sales 26% 36% 33% Net Profit/Net Sales 6% 18% 20% Operating Profit (EBIT)/Net Sales 6% 19% 17% EBITDA / Net Sales 17% 29% 28% 2

5 2012 Annual Report Financial Indicators Net Profit EBIT EBITDA Total Sales (Net) Tangible Fixed Assets Flat Glass Production (Thousand Tons) Total Assets Total Shareholders Equity Investments

6 Management Teoman Yenigün Chairman of Board of Directors (61) Mr. Yenigün is a graduate of the Bosphorus University Department of Mechanical Engineering, He started his career in the fiiflecam Group in He served the Group at a various managerial levels. Mr. Yenigün was Executive Vice President of Glass Packaging Group between September 1998 February He was appointed as Executive Vice Chairman of Float Glass Group on 15 February Teoman Yenigün is assigned in executive body in accordance with Corporate Governance Principles of the CMB (the Capital Markets Board), and he is not an independent member. N. Burak Seyrek Vice Chairman of Board of Directors (43) Mr. Seyrek is a graduate of Ankara University School of Political Sciences- Department of International Relations. The same year he started to work with Türkiye fl Bankas as an Assistant Specialist. He was appointed as Commercial Banking Sales Director in Burak Seyrek was Vice Chairman of Board of Directors of Ankara Branch of Association of Members of fl Bankasi until November He is an auditor to Pension Fund of Türkiye fl Bankas A.fi. since June 24, He was a Member of Board of Directors of Anadolu Hayat Emeklilik A.fi. from October 27, 2011 to March 29, N.Burak Seyrek is not assigned in executive body in accordance with Corporate Governance Principles of the CMB (the Capital Markets Board), and he is not an independent member. Zeynep Hansu Uçar Member (41) Ms. Uçar is a graduate of Middle East Technical University Faculty of Economic - Department of Business Administration. She started her professional carrier as an Assistant Specialist in investments at the Department of Subsidiaries of Türkiye fl Bankas A.fi. in After holding severeal positions at the same department, Ms Uçar has been serving as Unit Manager of the Subsidiaries Department since Zeynep Hansu Uçar is not assigned in executive body in accordance with Corporate Governance Principles of the CMB (the Capital Markets Board), and she is not an independent member. 4

7 2012 Annual Report Müfit Özkara Member (55) Mr. Özkara is a graduate of Faculty of Istanbul and Istanbul University School of Management, Institute of Enterprise Economy. He started his career in the fiiflecam Group in December He served the Group at a various managerial levels such as Director of Financial Resources and Vice Chairman. Currently he is Member of Board of Directors and auditor at various companies of the group. Müfit Özkara is not assigned in executive body in accordance with Corporate Governance Principles of the CMB (the Capital Markets Board), and he is not an independent member. Prof Dr. Turkay Berksoy Independent Member (62) Prof Dr. Turkay Berksoy is a graduate of Istanbul University, Faculty of Economics. He holds a master s degree from Bosphorus University and a doctorate degree from Marmara University. He lectured at the University of East Anglia School of Development Studies as a visiting professor and has served as a faculty member and administrative staff member in various universities in Turkey. Prof. Dr. Turkay Berksoy is a faculty member and Chairman of Marmara University School of Finance. The author of several books, articles, research papers and other publications, Prof. Dr. Berksoy is a Certified Public Accountant and has served as a Board Member at various companies and organizations, including Ifl Bank Board (auditing member), The Tax Reform Commission, TOBB Special Commission, Günefl Hayat Sigorta A.fi., Petkim A.fi., Ataköy Otelcilik A.fi., Türkiye Denizcilik flletmeleri A.fi., and Tax Council of the Turkish Ministry of Finance. Prof. Dr. Turkay Berksoy is an independent member in accordance with Corporate Governance Principles of the CMB (the Capital Markets Board), and he has no relationship with fiiflecam and interested parties. Prof. Dr. Atilla Murat Demircio lu Independent Member (66) Prof. Dr. Atilla Murat Demircio lu is a graduate of Istanbul University Faculty of Law and obtained his second bachelor s degree from the Bern University Faculty of Law. He became Associate Professor and subsequently Professor in Labor and Social Security Low. Having served as faculty member and director at various universities, he continues to serve as a member of the Y ld z Technical University Senate and Board. The author of several books, articles, research papers and publications, Demircio lu served as a Member of the Editorial Board of the Ministry of Culture s Encyclopedia of Trade Unions, Board Member at Hamburg Turkish-European Research Institute, and Deputy Chairman at Japan Research Association, in addition to his services as Consultant to the Ministry of Labor and Social Security, Honorary Consultant to TRNC Government, Member of the THY Audit Committee, Board Member of THY, Legal Advisor to ICC and Advisor to Istanbul 2010 European Capital of Culture Agency. He currently serves as Consultant in Antalya Chamber of Commerce and Industry. Prof. Dr. A. Murat Demircio lu is an independent member in accordance with Corporate Governance Principles of the CMB (the Capital Markets Board), and he has no relationship with fiiflecam and interested parties. 5

8 Management Board of Directors Teoman Yenigün Chairman Nevzat Burak Seyrek Vice Chairman Zeynep Hansu Uçar Member(**)(***) Müfit Özkara Member(**) Prof.Dr.Turkay Berksoy Independent Member(*)(**)(***) Prof.Dr. A.Murat Demircio lu Independent Member(*)(**)(***) Audit Committee Baflak Öge Auditor Mükremin fiimflek Auditor Managers Teoman Yenigün Chairman of Board of Directors Selçuk Yılmaz Demirk ran Vice Chairman on Production of Basic Glasses Reha Akçakaya Vice Chairman on Glasses for Automotive and Home Appliances Haluk Sar alt n Vice Chairman on Marketing and Sales M. Görkem Elverici Financial Director M. Haluk Güreren Development Director Özlem Vergon Planning Director Mahmut Temiz Human Resources Director A. Alper Can Trakya Glass Bulgaria EAD Float Glass Factory Director Sedat Çavufllar Trakya Glass Bulgaria EAD Automotive and Home Appliances Factory Director Gökhan Atikkan Trakya Factory Director Haflim Ekici Mersin Factory Director Gökçen Tural Automotive Glass Factory Director Serkan fiahin Trakya Yeniflehir Cam Sanayii A.fi. Factory Director Beytullah fiahin General Director of Trakya Glass Rus ZAO Gürcan Gürçay General Director of Automotive Glass Alliance Rus ZAO Ça atay Suner General Director of GlassCorp SA (*) Stated members make up audit committee, (**) Stated members make up corporate governance committee, (***) Stated members make up early risk detection committee. 6

9 2012 Annual Report Report of the Board Dear Shareholders; In its 35 th year of operation, we kindly submit the balance sheet and income statement of, issued for the period of prepared in accordance with the provisions of the Communiqué No.29 of the Capital Markets Board and the communiqués which impose attachments, amendments and clarifications to this Communiqué, for your supervision. Our company is an affiliate of Türkiye fiifle ve Cam Fabrikalar A.fi, founded by Türkiye fl Bankas in 1935 to "establish and develop the glass industry in Turkey" in line with the directives of the Great Leader Ataturk. Flat glass, patterned glass, mirror, laminated glass, coated glass, automotive glass, solar glass and home appliances glass are produced through state-of-the-art technologies in our company. In 2012, our company has been attentive to fulfill its duties and responsibilities in order to increase its contribution to the development of the national economy and to create value for its shareholders and completed its 35 th year of operation with success. II. Economic Developments and Prospects ( ) A. Global Overview Although vulnerability of the world economy and adverse conditions that has emerged due to global economic crisis, were transformed into a relative growth during period of , slowdown in growth rate, deepening of crisis and deterioration of expectations were apparent in This situation shows that systematic problems caused by the crisis in the world economy were not fully solved yet. Besides, the global economy poles could not yet develop common solution the whole world needs. Developed economies have begun to implement primarily classic monetary and fiscal policies to revitalize economic activity, and tried to decrease savings and encourage consumption by bringing interest rate near to zero level. Trillion dollars of money was injected into markets mainly through central banks. Attempts for revitalizing the economy through emerging monetary policies adopted by central banks of EU and USA could not help to activate markets for long period of time. Increase in money supply was not successfully transferred from banking system to real economy. Major part of this money was shared by various countries in global markets. Thus, foreign currency and exchange rate risks have increased in countries where major part of this money is accumulated. Central banks and governments tackling this situation led to so called currency wars. This situation combined with other factors has dramatically decreased growth rate of international trade. In a word, such a chaotic structure of crisis management continued in 2012 as well, and expectations for economic situation ensuring total increase of global welfare were postponed. Failure of economic recovery in EU countries has led to deepening of consumer mistrust, and demand in certain sectors, including glass products, has significantly decreased. Growth of Germany, the largest economy of the European Union, in 2012 was under 1%. And growth in France was close to zero. United Kingdom also could not manage to recover from global economic crisis. Debates on fiscal cliff increasing in the USA towards the end of year and adverse effects of Hurricane Sandy caused concerns on consumers and business circles. These factors have drawn back the USA s growth performance. Measures taken against fiscal cliff negatively influenced budget deficit in terms of both revenues and expenditures, and reached unsustainable level in relation to national domestic income. The American economy has grown by 2.2% in Developing countries were affected from stagnation and decrease of demand more than the developed countries when compared to previous years. Countries ensuring growth thanks to export of goods and services such as China and India, which are driving force of global growth, completed the years with growth rate under forecasted values due to decrease of demand in export markets. The impact of the Arabian Spring on the Middle East has diminished, but level of demand in the region has not reached desired level due to negative conjuncture, especially in Iran and Syria. The CIS market is continuing to grow rapidly. This growth is also boosted thanks to Russia s membership in the World Trade Organization. It is estimated that Latin America s growth in 2012 could be only 0.5%. One of the most important global developments of 2012 is that China s foreign trade volume outran that of USA, to become the world leader for the first time in the history, despite the fact that China had the lowest growth performance of the last 13 years. High rate of unemployment, which is one of the most significant result indicators, is observed in USA, Europe and Japan. This situation has negative impact on expectations and also hinders investment, consumption and purchasing tendencies in spite of all 7

10 growth policies. Thus, Purchasing Managers Index (PMI) continued to decrease during the year both in Europe and USA. Energy prices maintained their current level despite poor global demand and unexpected increase was observed in prices of commodity and precious metals, also due to China s influence. B Overview of Turkey s Economy The following policies were implemented in 2012; Decreasing mechanism of covering savings gap by outsourcing (current deficit) to sustainable rate, Limiting loan enlargement with a threshold, decreasing attractiveness of interest by implementation of a corridor, and increasing reserve ratios, Ensuring slowdown of import and domestic consumption, Diminishing destructive impact of these measures by increasing export; Controlling increase in budget deficit due to dependence of budget revenue to indirect taxes such as VAT and special consumption tax mainly supplied by domestic consumption and import by public taxation/pricing. Implemented policy partially prevented threat of current deficit in the expense of slowdown in growth. Extraordinary growth in supply of reserve currencies (USD, EURO) depressed exchange rates. Thus, major changes were prevented in consumer inflation. Long-term goal of 5% inflation was near as a result of rehabilitation of public finance, restraining imported inflation through exchange rates, and monetary policy implemented by the Central Bank. Besides, current transactions deficit, which was basic problem of 2012 as well, significantly decreased when compared to previous year. Furthermore, composition of current deficit financing has also changed. Current deficit financing of Turkey in years mainly consisted of purchasing shares, deposits and loans. But in 2012, they mostly consisted of public bonds. The highest purchase of bonds took place during this period. This led to increase of foreign currency reserves of the CBT (the Central Bank of Turkey), supplying TL against currency. Turkey s reserves together with gold reached a historic level of $125 Billion. Turkey managed to almost totally repay its debts to the IMF, which became a symbol of the 2001 crisis, and for the first time undertook to make $5 Billion contribution to the Fund. However, situation in real economy does not allow us to be very optimistic. According to official data, industrial production slowed down during the last quarter and even decreased in December In the light of these facts, it is estimated that Turkey s economy cannot provide 3,2% growth in 2012 as it was stated in MTP (medium-term program), and it is estimated to complete the year with a growth of around 2-2,5%. As a result, domestic demand was stagnant throughout Consumer trust fell down to the lowest point in the last quarter of the year just like in other countries. Turkey s economy demonstrated rapid growth in 2010 and 2011, but growth performance was at low levels in 2012 due to lack of progress in domestic demand. Although budget deficit increased in 2012, when compared to 2011, ratio of budget deficit to domestic income has completed the year at a level of 2% thanks to strict financial policies implemented in the last quarter of the year. Taxes were increased at the end of year, and at the same time, expenditures except interests were decreased. Moreover, valuation of TL was promoted through strict financial policies. Increasing of Turkey s credit rating by Fitch from BB+ to investing grade of BBB- was one of the most significant events for Turkish economy in Thus, Turkey s credit rating reached the investment level for the first time since The following are considered as main reasons for increase of credit rating to investment level: Moderate and decreasing public debt of economy while it is directed to soft landing, Strong banking system, relative and diversified economy, Positive medium-term growth expectations, Decreasing of Turkey s short-term macro financial risks. Increase in credit rating resulted in increase of credibility and reliability of public debt instruments. This enabled the government to undertake debts with lower interest rates and costs, and the country became more attractive for foreign capital. C. Expectations of World Economy in 2013 Prudence is expected to dominate 2013 due to the events occured in the previous year. Rich and developed countries are expected to weaken their currencies and become more aggressive in supporting their economies in foreign trade, and resulting of this situation in further fueling of destructive competition known as currency wars. Central banks are trying to manipulate currency exchange rates in such a way to further support export in their policy decisions. It is foreseen that developed countries (for example G-10) will be in such an attitude to closely follow developing economies and their markets in regulating exchange rates or at least policies focused on exchange rates. It is observed that negative risk perception in relation to Europe has begun to slightly decrease in Debt crises going out of countries agenda since the last quarter of 2012, further valuation of Euro in international markets and positive development in industrial production during first months of 2013 are perceived as positive signals for Europe region in However, work force reform to increase productivity is still needed for permanent solution. As a matter of fact, economies will not recover without increasing productivity. This may lead to impossibility of resolving the debt crisis and replacement of relative stability and recovery in financial markets with disorder once again. The ECB s intervention will be expected again in this case. Upcoming events that in 2013 will make it clear whether such a negative situation comes back or not. Nevertheless, another basic problem is expected to keep its presence: EU countries 8

11 2012 Annual Report with different economic conditions but using the same currency are experiencing real issues in implementing monetary policies that will satisfy the needs of all the interested parties. Although strong Euro is disadvantage of the Union in export to foreign countries, it works in favor of Germany. Economies that became equal in environment of the same currency are forced to struggle against powerful German industry, German technology, and German productivity. Discussions that may be triggered by such unrest may continue in 2013 and beyond it. USA s economy is giving controversial signals for Some economists argue that USA s economy is not ready to stand on its own feet yet, and therefore, FED needs to continue with an expansionary monetary policy until late Decreasing of unemployment rate down to level of 8% is not considered satisfactory. It is generally accepted that economy has not sufficiently recovered yet. The greatest risk for Obama s Government that took new measures against budget deficit is refueling of debates on fiscal cliff. China s economy is expected to achieve growth similar to On the other hand, some economists claim that China is able to achieve increase of growth in 2013, and this will partly base on recovery of domestic consumption. Japan s policies for 2013 led to certain concerns in circles of economy. Ratio of Japan s debts to its domestic income is over 200%. Public authority is determined to end chronic deflation process that has been continuing for almost 25 years. Analysts allege on scenarios that pressure imposed on the Central Bank of Japan to increase inflation target will result in increase of interest together with inflation, which will in turn lead to increase of Japan s obligations and risks of interest payment due to high indebtedness rate. Latin America is expected to achieve 4% growth in Tax deductions to be implemented in Brazil are expected to recover industrial production, accelerate the country s economy, and contribute in development rate of the region. Specialists forecast that increase in growth rate of Brazil will positively influence Argentina s economy, and Argentinian firms will benefit from increase in demand of Brazilian producers. To sum up, basic ground for prudence that is expected to dominate 2013 is creating serious uncertainty resulting from current situation. Main fields of uncertainty are; repeated breakout of debt problem in Europe despite all development and possible failure of measures, policies, and pumping money into markets aimed at bringing unemployment rate in the USA to acceptable level. Besides political formation in basin of Eastern Mediterranean and the Middle East, turning of rock gas into significant energy alternative in Northern America, and threats of this situation on economies producing traditional oil and gas also fuel up this uncertainty. However, quick change (technology, lifestyle, forms of conducting business, and new products) is basic element of uncertainty. D Expectations for Turkish Economy The CBT determined target of 5% growth, 5% inflation, and 5% current deficit for Turkey s economy in The European Bank for Reconstruction and Development (EBRD) forecasts that following Turkey s slowdown in 2012 it will continue to grow relatively faster in 2013, and growth rate in 2013 will be around 3.7%. JP Morgan expects that the CBT will implement policies aimed at keeping loan growth around level of 15% during the forthcoming period and narrow interest rate corridor in order to restrain inflow of short-term capital. Morgan Stanley foresees that Turkey may receive increase of credit rating from Moody s in 2013 while testing the new lowest levels of interest rate. It is almost obvious that interest rates, which floats at a level equal to or even lower than inflation in many term components, is tended to be decreased, if no significant breakdown happens. Turkish economy greatly benefited from opportunities of vibrant and expansive global conjuncture during 2000s. Even though desired rate could not be achieved in constructive reforms, especially improvement of public finance resulted in less public demand for tight resources and significant progress in money and capital markets. Besides, public finance obtained more resistant structure against drawbacks of financial rule compared to previous periods. Consecutively, significant income was received through privatization in 2013 even if it has not continual character because it was a one-off transaction. Turkey is expected to import $ 65 Billion worth of energy resources, if oiloil prices remain at current levels. Possible decrease in oiloil prices (and natural gas prices with delayed impacts) may result in reduction of this amount lower than 60 billion dollars. In any case in 2013 Turkey will maintain profile of economy that imports consumed energy, and thus, transfers created values outside. Conversion to nuclear energy in production of electricity, becoming point of energy transfer in natural gas, and solutions based on usage of local lignite in thermal energy may provide results only in long term, and these attempts cannot diminish impact of energy expenditures on current deficit in On the other hand, investments aimed at efficient use of energy are considered as the only controllable field that will provide benefit within short term. The World Bank estimated in its last report that Turkey s economy may grow by 4% in According to the same report Turkey achieved notable success in coping with inflation. Briefly, 2013 is expected to be relatively moderate year for Turkey, as well as for the world without inflation-related risks, during which current situation will be preserved. Common view of economists is that inflation does not any more represent a risk for Turkey thanks to stagnation of global economy and oil prices without dramatic increase (in spite of current high level) in addition to domestic development. The main threat is seen as stagnation of consumer demand. The government considers possible uncontrolled outside fluctuations, particularly in fields of economy and finances as the main risk area of Turkey in Turkey faced the global economic crisis with a certain degree preparation thanks to reorganization and economic programs in 2001 and However, they were not sufficient to prevent significant impact of the crisis. Most likely this situation will remain unchanged in

12 SITUATION AND SALES IN MARKETS General Overview of 2012 Despite negative impacts of stagnation in Europe s economy and slowdown of growth in Turkey and developing countries on construction and automotive sectors, main markets of float glass, Trakya Cam managed to maintain level of sales turnover achieved in 2011, continued its investments launched with the vision of becoming a fast growing and global float glass company, and took important steps towards expanding its footprint into new territories. Slowdown in demand for float glass throughout 2012 mainly in markets out of Turkey and increase in prices of inputs negatively influenced profitability. Nevertheless, Trakya Cam managed to restrict this negative impact on profit thanks to measures aimed at increasing efficiency and output, and decreasing costs, mainly energy savings. Trakya Cam put into use second mirror production line in Turkey in July in order to meet growing demand for mirror in Turkey under growth projects of The company concurrently continued investments in three float lines in three different countries, namely Russia, Bulgaria, and Turkey. Besides it commenced investment in coated glass line in Bulgaria aimed at expansion of value added product range. Automotive glass investment in Russia continued deliberately. Furthermore, pursuant to its decision to enter in India, one of the most rapidly growing float glass markets, the Company signed a Joint-Venture Agreement with Hindusthan National Glass & Industries Limited (HNGIL), one of the largest glass producers of India, in January 2013 following its Memorandum of Understanding signed with this company in Trakya Cam went into an organizational restructuring in order to support its growth, increase efficiency and productivity of its activities, strengthen its decision-making mechanisms, and fulfilled important projects within the group for the purpose of making data systems including ERP projects. Trakya Cam is determined to use its growth potential in the best way in future, and aiming for further enhancement of studies related to energy-saving production processes, development of new products with high added value, carry on projects of decreasing costs, simplification of processes, and advance on the way to become a global firm by strengthening its infrastructure. Overview and Sales Information in Markets Construction Industry Global stagnation that also influenced float glass consuming sectors from beginning of 2012 had negative impact on float glass consumption in many countries including Turkey where Trakya Cam conducts its activities. Producers throughout Europe significantly restrained supply due to decreasing levels of consumption and prices. Negative impact of political instability in the Middle East and Northern Africa in addition to economic stagnation greatly affected the market. Partial activity was observed in Russia s market. Trakya Cam carried out its sales taking into account profitability under these market conditions. Slowdown of domestic demand in Turkey led to stagnation and decrease in volumes of all subsectors. The most affected among them was construction industry. Rapid growth was observed in construction industry during period following 2009 shrinkage of the industry. But in 2012 for the first time since then level of growth was as low as 1%. Nevertheless, increase in building permits by 22% in 2012, increase in the housing sales by 4.6% and urban regeneration projects in the housing industry is expected to stimulate sales in the next periods and positively affect the consumption of flat glass. In addition, building renovations and supervision of energy identity documentation for buildings will lead to use of higher quality windows with thermal insulation. Trakya Cam has intensified regional activities in order to expand its field of influence under these conditions. It maintained constantly high quality of services, widened product range with new products, efficiently met demand in all market segments, and increased volume sales. Trakya Cam is constantly monitoring the developments in international markets and directed sales activities towards more profitable markets. Evaluation of regions shows that volume of sales decreased in the Balkans and Eastern Europe, where economic stagnation is at the highest level. On the other hand, despite negative impact of stagnation on consumption number of customers and market share of Trakya Cam increased in Bulgaria, where the company is a local producer, and Romania which is also a very important market. Sales were conducted in a controlled way taking into account profitability in Central and Western Europe where limiting of supply happened most of all. Market s condition and opportunities were quickly evaluated in region of Middle East and Africa hit by decrease of demand and oversupply due to political and economic instability. Demand was met at the maximum level within the first half, and sales were fulfilled in a controlled way during the second half. General economic uncertainty was observed in Russia. Demand was increased in this market during second half of the year. It was evaluated at the highest level considering new investment in production of float glass in All these events helped to maintain level of 2011 in basic sales of glass, and significant increase was achieved in sales volume of coated glass. 10

13 2012 Annual Report Automotive Industry Slowdown of growth in Turkey s economy, uncertainty of loan costs, and increase in special consumption tax led to shrinkage of Turkey s automotive market and light commercial vehicles. As a result Turkey s automotive market shrunk by 10% compared to 2011.Europe s automotive market, especially Western Europe, continued to shrink due to economic crisis. Automotive market of Western Europe shrunk by 8% while more positive situation is was observed in market of Eastern Europe. Automotive market of Russia, one of potential markets of world automotive industry, approached to level before the crisis. Shrinkage of Europe s market by 8% put the same impact on Turkey s automotive export. Export of vehicles in 2012 decreased by 8% compared to Decrease of demand in domestic and foreign markets directly influenced automotive manufacturing as well. Total automotive manufacturing decreased by 10% in In spite of shrinkage of automotive industry in markets of Turkey and Europe, compared to 2011 Trakya Cam managed to increase volume of sales by 8% in 2012 thanks to increasing share in new projects launched in Turkey and Europe. Trakya Cam began to procure glass to new projects of Renault and Ford in Turkey and Romania in 2012, and completed infrastructure works in order to commence new projects of Ford, Nissan- Russia, Toyota, and Hyundai in The company signs agreements with various firms on new projects aimed at forthcoming period. Trakya Cam supports increase in sales of automotive glass by widening portfolio of product with high added value. Home Appliances Industry Production in home appliances industry of Turkey increased by 8% compared to Growth of segments supplying inputs from Trakya Cam also increased; production of refrigerators by 12% and ovens by 4%. Production of home appliances in Europe maintained level of Trakya Cam focused on European market in sales of glass for home appliances such as ovens and refrigerators, and continued its growth in this market. The company s sales of glass for home appliances in Europe increased by 27% compared to the previous year. It continues to develop new and functional products in order to maintain competitive power in cooperating with leading European manufacturers of home appliances. Energy efficiency is top priority in all products. Solar Glass Industry After the rapid increase of installed capacity of solar batteries producing electricity using solar energy rapidly increased in 2011 all around the world it was followed by a horizontal tracking installation reached 100 GW in Currently Europe is the largest market for photovoltaic (PV) installation. Mainly America, China, Japan, and India, as well as South- East Asia, Latin America, Middle East and Northern Africa countries are emerging markets in this field. Together with the various forecasts for development of global solar battery market during forthcoming period this industry is expected to be a very important potential market for float glass production in long term. Sales of Trakya Cam s energy glasses designed for solar batteries and solar collectors mainly in markets outside Turkey decreased to a certain level due to shrinkage in the market and transfer of solar battery production to China. Turkey has important potential in using solar energy within the global solar energy market. The Ministry of Energy set out a target of supplying 30% of energy consumption with renewable energy sources in its plan comprising period of The Energy Market Regulatory Authority (EMRA) is planning to issue license for 600 MW in June 2013 for solar energy stations in order to achieve this target. Such measures are expected to boost growth in installed power of solar energy and market of energy glasses in Turkey. Trakya Cam is aimed at increasing sales to current customers and gaining new customers in new markets. Therefore, the company is continuing its studies to develop glass products that will contribute in increasing efficiency of solar energy systems. PRESENTATION AND PROMOTION ACTIVITIES Trakya Cam is carrying out effective presentation activities for each product group aimed at increasing popularity, expanding application range of solar glass, input for construction, automotive, furniture, home 11

14 appliances, agriculture, and energy sectors, and distinguishing them from similar products. Individual training and seminars titled Glass in Energy Efficiency were delivered for customers, manufacturers of PVC and aluminum profiles, architects, engineers, and public agencies in various cities in order to expand application range Trakya Cam s products. Presentation of our new products is supported by various studies. An extensive advertisement campaign was launched to present and promote products Is cam Synergy and Is cam Comfort that play an important role in energy saving and protection of environment, and provide 50% more heat insulation compared to standard double-glazing. Slogan of this campaign was Is cam Comfort, Is cam Synergy. Because your money is valuable, your home is valuable. Importance of glass in selection of house and insulation provided by glass were emphasized during this advertisement campaign arranged on television, newspapers, radio, and digital environments. Presentation materials were sent to sales points in order to inform consumers. Campaign titled Advantageous Double-Glazing was arranged in Izmir province in order to support the advertisement, and Is cam web site was renewed. The company sponsored films on heat and noise insulation within Y TEAM advertisement campaign prepared with support provided by members of the Heat, Water, Sound Insulation and Fireproofing Association (IZODER). The company participated in fairs within the country and abroad, including Glasstec, one of the largest glass fairs of the world. It presented products in specially designed stands, and shared them with all partners at international level. These fairs helped to strengthen Trakya Cam s market image, meet industry professionals, and set up new trade connections. All opportunities were used in order to increase company and product recognition. Our corporate and product announcements were published in local and foreign magazines and web sites. We carried on close cooperation with the Association of Free Architects, took part in product presentation meetings of the Association in Istanbul, Ankara, and Izmir to present products directly to target group. PRODUCTION AND DEVELOPMENT Effective Capacity Management and High- Output Production Trakya Cam is carrying out its activities with 7 float lines at five different and with automotive glass, mirror, laminated glass, coated glass, and glass for home appliances, patterned glass, and solar glass production facilities. Trakya Cam balanced its capacity at these production facilities in the most suitable way in order to meet market demands in 2012 in the best way ensuring low costhigh quality, wide product range taking into account current market conditions, and tried to produce all product groups with high output. Cold repair of a float line, of whose furnace life has expired, at Luleburgaz Factory in Turkey was conducted during this period. The line is expected to be commissioned at early Trakya Cam is developing current production facilities for effective use of energy, and implementing various designs and new technologies aimed at reducing energy consumption in all new furnaces to the lowest level. Cost Saving and Effective Usage of Energy Trakya Cam tried to use all resources in the most effective way in 2012 as it was the case during previous years considering current market conditions and increasing input prices in order to achieve goal sustainable and profitable growth focused on effective total cost management, and ensured significant cost saving thanks to increase of output and productivity. Trakya Cam is paying great attention to protection of environment and cost saving. Therefore, it is striving to fulfill glass production process using less energy. The company managed to achieve important results from activities carried out in 2012 as well. These activities enabled the company to reduce energy consumption in glass furnaces used for production of glass. Moreover, Waste Heat Electricity Production Facility designed for recycling heat energy emitted to atmosphere from chimneys in float glass production in order to produce electricity was put into use at Yeniflehir Factory, and the company launched production of electricity with auto-producer license. Projects aimed at implementing similar system in all our factories are quickly commenced. Cost saving and reducing energy consumption will continue to be among the most important issues in Trakya Cam s agenda, and the company will carry on developing new projects in forthcoming period. R&D and Range of Products with Added Value Trakya Cam is growing in different territories with new capacities, and widening portfolio of products with added value is the most important element of its growth strategy. In particular, Trakya Cam speeded up R&D activities in field of coatings that provide different functionality to surface of glass in 2012, and achieved noteworthy success in this field. Widening product range of coated glasses that provide energy savings thanks to heat and solar control features, and increasing revenue of these products became the main 12

15 2012 Annual Report goal of Trakya Cam. The company offered five new products to the market in this field, and achieved 27% increase in sales volume of coated glass. The company conducted activities in order develop high-performance coated glass suitable for architectural use that enables heat processing of coated glasses. In particular, commissioning of coated glass facility constructed in Bulgaria is expected in This facility will be a significant step in widening product range of high quality coated glass. Infrastructural works aimed at increasing supply of high-transmission glass for solar batteries and thermal collector systems in field of energy glasses, as well as production of antireflective coating in order to further increase light transmission were completed in Commercial production of these products will begin in Furthermore, studies on development of low-iron glass for home appliances and furniture sectors were completed and commercial production was launched. Issues such as reduction of CO 2 emission and making vehicles lighter for this purpose, decreasing cooling load, fuel saving, and using unleaded materials are gaining more importance in Europe s automotive industry. Trakya Cam is continuing various R&D projects in field of automotive glass in line with these issues. The company is developing special coating with heat insulation features. Works on development of coated glass with various functional features are being fulfilled in field of glass for home appliances. Investments Trakya Cam implemented a stipulated growth plan during It carried on important investment projects, took essential decisions, and set up new enterprises that will be basis for rapid growth. Significant growth projects are being fulfilled in Turkey, Russia, Bulgaria, Romania, and India. Second mirror production line put into use in Mersin in July 2012 in order to meet growing demand for mirrors in Turkey. Trakya Cam is continuing investments for construction of two float lines with total capacity of 580 thousand ton/year in Ankara Polatli Industrial Estate in order to fully meet customer demands in accordance with growth expectations in Turkey s float glass market. These facilities will be gradually commissioned beginning from It is a significant step towards rapid growth and enhancing competitive power of Trakya Cam in Turkey s market. Number of Trakya Cam s float lines in four different regions of Turkey will increase to total of eight together with these two float glass lines. Trakya Cam commenced investment for the second float line in Bulgaria parallel to the first line in order to advance its presence in the Balkans float glass market and meet demand for automotive glass and green glass pursuant to growth strategies outside Turkey. Trakya Cam is making investment for coated glass line in addition to investment for the second float line in order to increase market share in the Balkans and Central Europe especially in field of products with added value and meet the market s demand with wide product range. These facilities planned to be put into use in 2013 will allow Trakya Cam carry out activities in Bulgaria in fields of float glass, mirror, glass for home appliances, automotive glass, and coated glass. Float glass investment launched in the Republic of Tatarstan, Russia in partnership of 70% Trakya Cam - 30% Saint-Gobain is being continued. The company is aimed at becoming a local producer in Russia as well thanks to this investment and gaining power in the market within short period of time. Investment in automotive glass manufacturing facility is continued in the Republic of Tatarstan, Russia pursuant to development potential of Russia s automotive industry. Both float glass line and automotive glass manufacturing facility in the Republic of Tatarstan are expected to be put into use in Trakya Cam is planning to launch mirror and coated glass production projects in addition to the above-mentioned investments. Thus, the company is aiming at getting use of growth potential in Russia s float glass industry in the most effective manner. Trakya Cam is expected to put into use total of three new float lines and a coated glass facility at the same time during the next year. Trakya Cam bought 90% shares of Glass Corp S.A. in order to construct automotive glass factory in Romania pursuant to its goal of becoming a strong supplier of automotive glass. Trakya Cam signed a Joint-Venture Agreement (JVA) with Hindusthan National Glass & Industries Limited (HNGIL), one of the largest glass producers of India, in January 2013 to become partner of HNG Float Glass Limited following its Goodwill Agreement signed with this company in 2012 pursuant to its decision to enter in India s float glass market. These steps were taken pursuant to vision of rapid growth aimed at developing countries with high potential. The parties are carrying on activities in order to establish a partnership. TRAKYA CAM IN NEW ERA Although currently there is slowdown in float glass demand mainly in Europe s market, world float glass demand is expected to grow 4-5% on average in the upcoming period. Growth in the industry is basically expected in developing countries. Development of solutions for energy saving and protection of environment, products with added value and enhancement in coated glass production became main dynamics for growth in the industry. On one hand increase in capacity is foreseen in developing countries thanks to new investments, on the other hand growth of added value is expected particularly in developed markets with innovative solutions and rapidly developed new products. Trakya Cam is determined to carry on its regional leadership successfully maintained until today considering current competitive conditions, and further enhance its growth pursuant to vision of Being a fast growing global flat glass company with strong brands and innovative solutions in forthcoming period. Aspiration of Trakya Cam, in line with this vision, is to grow in current markets and also expand its footprint to different regions thanks to new capacities, develop technological solutions for energy saving and protection of environment to ensure sustainable development, offer its customers a wide range of products with high added value, enhance processes aimed at increasing customer satisfaction, speed up product innovation and R&D activities, and take significant steps towards becoming a global float glass manufacturer thanks to effective total cost management. 13

16 BRANDS TRC Helio clear TRC Helio extra clear TRC Helio green, gray, bronze, blue TRC Ecotherm TRC Ecosol TRC Tentesol TRC Tentesol T TRC Aura Reflekta TRC Lameks TRC Acoustic Lameks TRC Duracam TRC Elit Glass TRC Deco classic TRC Deco wired TRC Flotal TRC Flotal E TRC Flotal S TRC Rainbow TRC Durasolar P+ Automotive Glass Brands Duracam Lameks Toflex Toglas 14

17 2012 Annual Report Capital Structure and Changes in Capital Structure Türkiye fiifle ve Cam Fabrikalar A.fi. owns 70% of our Company s capital that amounts to TL The registered authorized capital is TL Dividends Distributed in the Last Three Years The gross dividend corresponding to 4% of paid-in capital had been paid to the shareholders as bonus shares in The gross dividend corresponding to 7,5% of paid-in capital had been distributed to shareholders in cash in The gross dividend corresponding to 15% of paid-in capital had been distributed to shareholders as bonus shares in Miscellaneous In all transactions of the Company with the holding company and its auxiliary companies regulations concerning the distribution of concealed gains through transfer pricing have been upheld and as a result of the procedures explained in the report, there occurred no loss to be covered in Distribution of 2012 Profit Our company has closed the 2012 accounting period with a net profit of TL Our net consolidated profit of TL , reflected in the consolidated balance sheet as of 31 December 2012, prepared in compliance with the "Communiqué Series: XI and No.29, Principles Regarding Finanacial Reporting in Capital Markets by the Capital Markets Board (CMB) shall be segregated as follows according to Clause 29 of Master Contract and to the CMB regulations and Company s Profit Distribution Policy revised at meeting of the Board of Directors dated February 23, 2013 and announced to the public on the same date; The gross dividend corresponding to 2,3858% of paid-in capital in amount of TL to be distributed in cash, and gross dividend corresponding to 2,3527% of paid-in capital in amount of TL to be added to the capital and then to be distributed as shares to the shareholders. The distribution of cash dividents to take effect on May 31 st 2013, and the distribution of bonus shares to be completed within legal term. The aforementioned issues about distribution of profit are resolved by the BoD to be submitted to the review and approval of the Ordinary General Assembly meeting to be held on April 05, Proposal for the Distribution of the Profit of the Year of 2012 Profit for the period ,00 Taxes Payable (-) ( ,00) Net profit for the period ,00 Legal Reserve ( ,73) Net Distributable Profit ,27 Donations Made During the Fiscal Year ,11 Net Distributable Profit for the First Dividends Including Donations ,38 First Dividend to Shareholders ,00 Extraordinary Reserves ,23 We would like to express our sincere thanks to our customers, suppliers, shareholders and group companies that have provided us with the support and confidence that we have needed to achieve the aforesaid results. Teoman Yenigün Chairman of the Board of Directors Müfit Özkara Member of the Board of Directors 15

18 Report of the Board of Auditors for 2012 To the General Assembly of ; Business Title Head Office Registered Authorized Capital Issued Capital Field of Activity Statutory auditors names, surnames Terms of office and whether they have a shareholding interest in the company Number of meetings of Board of Directors attended and of Board of Auditors held Scope, dates and conclusion of the examination made on the accounts, books and documents of the Company Numbers and results of the cash counts held in the Company s pay desk pursuant to the relevant articles of Turkish Commercial Code Dates and results of examinations made pursuant to, the relevant articles of of the Turkish Commercial Code Complaints, irregularities received and actions taken in relation thereto : : stanbul : TL. : TL. : Production and sales of basic glass, autoglass, solar glass and home appliances glass. : Baflak Öge Mükremin fiimflek Statutory auditors don t have a shareholding interest in the company nor they are the employees of the company : Meetings of Board of Directors participated in; 7 Meetings of Board of Auditors held: 6 : Based on the examinations of the company s books and documents carried out on , , , , and , it has been established that the books are kept in accordance with the applicable laws and generally accepted accounting principles. : In 2012, 6 cash counts were conducted and it was determined that cash balance in the Company accounts accurately reflects the actual cash on hand. : As a result of the examinations carried out on , , , , and it has been ascertained that all types of valuable papers provided as pledge or guarantee, or entrusted to the Company s pay desk for safekeeping are present and that the same conform to the records. : During our term of office as auditors, neither complaints nor reports of irregularities have been reported. We have examined the accounts and transactions of Trakya Cam Sanayii Anonim fiirketi for the period with respect to their compliance with the Turkish Commercial Code, the Company s Articles of Association, and other applicable legislation, as well as generally accepted accounting principles and standards. In our opinion, the attached balance sheet drawn up on 31 December 2012, the contents of which we acknowledge, fairly and accurately presents the Company s financial status on the date, and the income statement for the period 1 January December 2012 fairly and accurately presents the operating results for the period, and the dividend distribution proposal is in compliance with the laws and the Company s Articles of Association. We hereby submit the balance sheet and income statement for your approval and the acquittal of the Board of Directors. Members of the Board of Auditors. Statutory Auditors Basak Öge Mükremin fiimflek 16

19 TRAKYA CAM SANAY A.fi. CONVENIENCE TRANSLATION INTO ENGLISH OF CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2012 and 2011 TOGETHER WITH AUDITOR S REPORT (ORIGINALLY ISSUED IN TURKISH)

20

21 INDEPENDENT AUDITOR S REPORT To the Board of Directors of 1. We have audited the accompanying consolidated financial statements of, its subsidiaries and its joint-ventures (collectively referred to as the Group ) which comprise the consolidated balance sheets as of 31 December 2012 and the consolidated statements of 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 other explanatory information. Management s Responsibility for the Financial Statements 2. The Group management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with the financial reporting standards issued by the Capital Markets Board ( CMB ). This responsibility includes: designing, implementing and maintaining internal control relevant to the proper preparation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. Auditor s Responsibility 3. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with the auditing standards issued by the CMB. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance on whether the consolidated financial statements are free from material misstatement. Opinion An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Group s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. 4. In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of as of 31 December 2012, and its financial performance and its cash flows for the year then ended in accordance with the financial reporting standards issued by the CMB (Note 2). Additional paragraph for convenience translation into English 5 The accounting principles described in Not 2 to the consolidated financial statements (defined as CMB Financial Reporting Standards ) differ from International Financial Reporting Standards ( IFRS ) issued by the International Accounting Standards Board with respect to the application of inflation accounting for the period 1 January-31 December Accordingly, the accompanying consolidated financial statements are not intended to present the financial position and results of operations in accordance with IFRS. Baflaran Nas Ba ms z Denetim ve Serbest Muhasebeci Mali Müflavirlik A.fi. a member of PricewaterhouseCoopers Gökhan Yüksel, SMMM Partner Istanbul, 6 March

22 TRAKYA CAM SANAY A.fi. CONSOLIDATED BALANCE SHEETS AT 31 DECEMBER 2012 AND 2011 (Amounts are expressed in Turkish Lira ( TRY ) unless otherwise indicated.) 31December 31 December ASSETS Notes Current Assets 1,010,588,661 1,173,031,851 Cash and Cash Equivalent 6 334,243, ,849,993 Trade receivables ,688, ,520,159 - Due from related parties 37 2,437, Other trade receivables ,251, ,520,159 Other receivables 53,783,517 40,860,823 - Due from related parties 37 51,560,080 38,505,313 - Other receivables 11 2,223,437 2,355,510 Inventories ,791, ,455,117 Other current assets 26 49,081,139 23,345,759 Non - Current Assets 1,638,857,532 1,175,285,807 Other receivables , ,916 Financial investments 7 166,312,130 97,697,448 Associates ,569,473 67,637,667 Property, plant and equipment 18 1,188,090, ,726,489 - Financial leasing 6,656, Other tangible assets 1,181,434, ,726,489 Intangible assets 19 1,274, ,243 Goodwill 20 13,573,346 - Deferred tax assets 35 25,756,145 15,456,379 Other non - current assets 26 93,436,027 36,257,665 TOTAL ASSETS 2,649,446,193 2,348,317,658 The accompanying notes form an integral part of these consolidated financial statements. 20

23 2012 Annual Report TRAKYA CAM SANAY A.fi. CONSOLIDATED BALANCE SHEETS AT 31 DECEMBER 2012 AND 2011 (Amounts are expressed in Turkish Lira ( TRY ) unless otherwise indicated.) 31 December 31 December Notes Current Liabilities 240,637, ,255,562 Financial liabilities 8 92,417,595 77,831,792 Trade payables 115,440,439 99,902,410 - Due to related parties 37 23,057,214 18,517,920 - Other trade payables 10 92,383,225 81,384,490 Other payables 24,696,466 43,036,470 - Due to related parties 37 2,236,241 21,160,682 - Advances received 11 8,518,954 7,866,768 - Other payables 11 13,941,271 14,009,020 Current tax liabilities 35 3,776,895 13,292,843 Provisions for employee benefits 24 1,075,861 1,359,978 Provisions ,589 1,209,765 Other current liabilities 26 2,436,338 5,622,304 Non Current Liabilities 398,638, ,363,715 Financial liabilities 8 304,076, ,588,916 Other payables ,940 58,817 Provision for employee benefit 24 47,103,496 31,512,748 Deferred tax liabilities 35 45,988,245 42,749,521 Other non current liabilities 26 1,252, ,713 EQUITY 27 2,010,170,358 1,793,698,81 Shareholders Equity 1,906,481,174 1,720,686,625 Paid-in capital 693,680, ,200,000 Adjustment to share capital 5,576,528 5,576,528 Share premium 22,703 22,703 Revaluation fund 127,439,148 42,277 Currency translation differences 58,318,173 72,324,731 Restricted reserves 109,606,914 95,075,508 Retained earnings 839,433, ,123,839 Net profit for the year 72,404, ,321,039 Non controlling interest 103,689,184 73,011,756 TOTAL EQUITY AND LIABILITIES 2,649,446,193 2,348,317,658 The accompanying notes form an integral part of these consolidated financial statements. 21

24 TRAKYA CAM SANAY A.fi. CONSOLIDATED STATEMENTS OF INCOME FOR THE YEARS ENDED 31 DECEMBER 2012 AND 2011 (Amounts are expressed in Turkish Lira ( TRY ) unless otherwise indicated.) 1 January - 1 January - Notes 31 December December 2011 Revenue 28 1,249,230,426 1,255,468,033 Cost of sales (-) 28 (919,173,481) (808,922,919) GROSS PROFIT 330,056, ,545,114 Marketing selling and distribution expenses (-) 29 (142,441,326) (127,827,558) General and administrative expenses (-) 29 (100,142,268) (80,552,495) Research and development expenses (-) 29 (11,123,215) (11,049,492) Other operating income 31 19,494,716 13,252,212 Other operating expenses (-) 31 (15,399,266) (7,615,468) OPERATING PROFIT 80,455, ,752,313 Profit / (loss) from associates 16 3,523,100 (791,487) Financial income ,657, ,712,156 Financial expenses (-) 33 (176,734,145) (148,902,833) PROFIT BEFORE TAX 90,891, ,770,149 Current tax expense 35 (21,575,542) (52,639,119) Deferred tax income 35 11,717,790 4,621,596 PROFIT FOR THE YEAR 81,033, ,752,626 Attributable to Non controlling interest 8,629,617 11,431,587 Equity holders of the parent 72,404, ,321,039 Earnings per share (per TRY1 share) The accompanying notes form an integral part of these consolidated financial statements. 22

25 2012 Annual Report TRAKYA CAM SANAY A.fi. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED 31 DECEMBER 2012 AND 2011 (Amounts are expressed in Turkish Lira ( TRY ) unless otherwise indicated.) 1 January - 1 January - Comprehensive Statement of Income Notes 31 December December 2011 PROFIT FOR THE PERIOD 81,033, ,752,626 Other comprehensive income Currency translation differences (13,198,746) 42,961,691 Fair value gain/ (loss) on financial assets 7 78,115,825 - Revaluation differences on non-current assets 16 53,974,897 - Tax loss / (gain) on other comprehensive income 35 (4,693,852) - Other comprehensive income 114,198,124 42,961,691 TOTAL COMPREHENSIVE INCOME 195,231, ,714,317 Attributable to: Non - controlling interest 9,437,429 11,586,690 Equity holders of parent 185,794, ,127,627 Earnings per share (per TRY1 share) The accompanying notes form an integral part of these consolidated financial statements. 23

26 TRAKYA CAM SANAY A.fi. CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED 31 DECEMBER 2012 AND 2011 (Amounts are expressed in Turkish Lira ( TRY ) unless otherwise indicated.) Other Comprehensive ncome Equity Currency Attributable To Non Adjustment Share Revaluation Transaction Restricted Retained Profit For Holders Of Controlling Capital To Capital Premium Funds Differences Reserves Earnings The Year The Parent nterest Total 1 January ,200,000 5,576,528 22,703 42,277 29,518,143 87,168, ,273, ,996,742 1,498,798,998 51,633,849 1,550,432,847 Capital increase of non controlling interests ,871,882 12,871,882 Transfers from retained earnings ,906, ,090,140 (210,996,742) Divident paid (45,240,000) - (45,240,000) (3,080,665) (48,320,665) Total comprehensive income ,806, ,321, ,127,627 11,586, ,714, December ,200,000 5,576,528 22,703 42,277 72,324,731 95,075, ,123, ,321,039 1,720,686,625 73,011,756 1,793,698,381 1 January ,200,000 5,576,528 22,703 42,277 72,324,731 95,075, ,123, ,321,039 1,720,686,625 73,011,756 1,793,698,381 Non cashe capital increase 90,480, (90,480,000) Transfers from retained earnings ,531, ,309,633 (133,841,039) Divident paid to non controlling interests (18,150,000) (18,150,000) Capital increase of non controlling interests ,029,611 40,029,611 Acquisition of subsidiary (639,612) (639,612) Total comprehensive income ,396,871 (14,006,558) ,404, ,794,549 9,437, ,231, December ,680,000 5,576,528 22, ,439,148 58,318, ,606, ,433,472 72,404,236 1,906,481, ,689,184 2,010,170,358 The accompanying notes form an integral part of these consolidated financial statements. 24

27 2012 Annual Report TRAKYA CAM SANAY A.fi. CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEARS ENDED 31 DECEMBER 2012, AND 2011 (Amounts expressed in Turkish Lira ( TRY ) unless otherwise indicated.) 1 January - 1 January - Cash flows from operating activities Notes 31 December December 2011 Net profit for the period 81,033, ,752,626 Adjustments to reconcile net profit to net cash provided b operating activities Depreciation of property plant and equipment ,196, ,189,039 Amortization of intangible assets , ,591 Loss/ (gain) on disposal of property, plant and equipment, net 31,32 2,945,908 (2,571,039) Unrealized exchange loss/ (gain) on cash and cash equivalent, net 23,815,147 ( 87,941,755) Unrealized exchange (gain)/loss on financial liabilities, net (20,350,644) 58,762,860 Provision for employment termination benefit 24 19,961,876 5,135,995 Allowance for doubtful receivables 10 1,491,099 1,127,135 Allowance for impairment on inventory 13 1,685,325 3,414,420 Change in other provisions (1,008,970) 445,702 Impairment loss on financial assets 31 6,701,158 - Gain on sale of financial assets 32, Interest income 32 (27,377,520) (25,681,417) Interest expenses 33 19,201,137 15,583,558 Income from non cash capital increase in available for sale investments 32 (6,022,614) - Dividend income 32 (2,577,041) (374,484) Share of profit from associates 16 (3,523,100) 791,487 Tax expense 35 9,857,752 48,017,523 Operating cash flows before changes in the working capital 231,672, ,148,241 Operating cash flows provided before changes in the working capital Trade receivables 10 22,493,102 (135,653,080) Inventories 13 (3,457,961) (89,702,210) Other receivables and payables 11,22,24,26 (25,661,743) (11,554,885) Trade payables 10 8,915,782 29,838,772 Trade payables to related parties 37 4,539,294 11,120,264 Other payables and liabilities 11,22,24,26 (6,346,026) 812,684 Cash used in operations 232,154, ,009,786 Taxes paid 35 (31,091,490) (47,862,339) Employment termination benefits paid 24 (4,371,128) (3,845,415) Proceed from doubtful receivables 10 1,064,909 (1,420,435) Net cash provided by operating activities 197,757, ,881,597 Acquisition of additional shares of financial assets 7 (19,182,399) (9,649,541) Purchase of property, plant and equipment 18 (365,018,981) (96,237,185) Purchase of intangible assets 19 (821,558) (362,813) Proceeds from fixed asset sales 6,221,775 8,982,361 Dividends received from financial assets 32 2,577, ,484 Dividends received from associates 16-2,802,030 Advances given for property, plant and equipment 26 (57,430,349) (21,421,580) Acquisition of subsidiary (net of cash acquired) 3 (4,529,402) - Currency translation differences (4,142,064) 3,666,203 Net cash used in investing activities (442,325,937) (111,846,041) Cash flows from financing activities Capital increases attributable to non-controlling interest 40,029,611 12,871,882 Proceeds from financial liabilities 169,234,014 - Repayment of financial liabilities (78,200,841) (60,994,676) Dividends paid to equity holders of the Company - (45,240,000) Dividends paid to non-controlling interest (18,150,000) (3,080,665) Change in non trade receivables / payables to related parties 37 (31,979,208) 37,453,949 Interest paid (19,201,137) (15,261,612) Interest received 27,194,379 25,282,123 Net cash provided by/ (used in) financing activities 88,926,818 (48,968,999) Foreign exchange gain/loss on cash and cash equivalent 6 (23,815,650) 87,941,755 Net (decrease)/increase in cash and cash equivalents 6 (155,642,094) (27,933,443) Cash and cash equivalents at the beginning of the year 513,191, ,182,955 Cash and cash equivalents at the end of the period 333,733, ,191,267 The accompanying notes form an integral part of these consolidated financial statements. 25

28 TRAKYA CAM SANAY A.fi. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED 31 DECEMBER 2012, AND 2011 (Amounts expressed in Turkish Lira ( TRY ) unless otherwise indicated.) NOTE 1 - GROUP S ORGANISATION AND NATURE OF OPERATIONS Trakya Cam Group (the Group ) consists of a holding company, ( Company ) and 9 subsidiaries, 3 investments in associates and 3 joint ventures. was established on 17 January 1978 and started production in The Company is a subsidiary of Türkiye fiifle ve Cam Fabrikalar A.fi. Group ( fiiflecam Holding ) which is under the control of Türkiye fl Bankas A.fi. The Company produces and sells basic flat glass, patterned glass, mirror, automotive glass, tempered glass, laminated glass, coated glass, processed glass and glassware in its production facilities at K rklareli (Lüleburgaz), Mersin (Tarsus) and Bursa (Yeniflehir). There are also overseas factories at Bulgaria (Targovishte) and Romanya (Buzau). The Head Office and the Shareholder Structure of the Company The shareholder structure of the Company is presented in Note 27. The Company is registered in Turkey and the contact information is as below: fl Kuleleri Kule 3, 4. Levent 34330, Befliktafl / Istanbul / Turkey Phone : Fax : The Company s shares have been on the traded Istanbul Stock Exchange ( ISE ) since 5 November Details of the number of personnel are as follows: 31 December 31 December Personnel charged by monthly pay Personnel charged by hour 2,138 1,957 Total 2,978 2,768 Approval of Financial Statements: Financial statements were approved by the board of directors and authorized for publication on 6 March The General Assembly has the authority to change these financial statements. Consolidated subsidiaries, joint ventures and associates: The subsidiaries, joint ventures and associates of the Group, their country of incorporation, nature of business and the proportion of ownership interest and the effective interest of the Company in these subsidiaries are as follows: Subsidiaries: Company Name Nature of business Country of incorporation Trakya Yeniflehir Cam Sanayii A.fi. Production and Sale of Flat Glass Turkey Trakya Polatl Cam Sanayii A.fi. Production and Sale of Flat Glass Turkey Trakya Investment B.V. Finance and Investment Company Netherlands Trakya Glass Rus ZAO Production and Sale of Flat Glass Russia TRSG Glass Holding B.V. Finance and Investment Company Netherlands TRSG Autoglass Holding B.V. (**) Finance and Investment Company Netherlands Automotive Glass Alliance Rus ZAO (**) Automotive Glass Company Russia Trakya Glass Kuban OOO (*) Production and Sale of Flat Glass Russia Glass Corp S.A. Production and Sale of Automobile Glass Romania (*) Investment and operations of this company had not started as at the balance sheet date. (*) These subsidiaries were established in December December 2011 Direct and Effective Direct and Effective Indirect ownership indirect ownership ownership ratio ratio ownership ratio ratio Company Name % % % % Trakya Yeniflehir Cam Sanayii A.fi Trakya Polatl Cam Sanayii A.fi Trakya Investment B.V Trakya Glass Rus ZAO TRSG Glass Holding B.V TRSG Autoglass Holding B.V. (*) Automotive Glass Alliance Rus ZAO (*) Trakya Glass Kuban OOO Glass Corp S.A. (**) (*) These subsidiaries were established in

29 2012 Annual Report Joint Ventures: Company Name Nature of business Country of incorporation Trakya Cam Investment BV Finance and investment Netherlands Trakya Glass Bulgaria EAD Production and sale of flat glass, mirror, white goods and glassware Bulgaria Trakya Glass Logistics EAD Logistics Bulgaria 31 December December 2011 Direct and Effective Direct and Effective Indirect ownership indirect ownership Ownership ratio ratio ownership ratio ratio Company Name % % % % Trakya Cam Investment BV Trakya Glass Bulgaria EAD Trakya Glass Logistics EAD Associates: 31 December December 2011 Ownership Ownership Nature of Country of ratio ratio Company Name business incorporation % % Çay rova Cam San. A.fi. Commercial activity (*) Turkey Camifl Elektrik A.fi. Electricity production and sales Turkey Saint Gobain Glass Egypt Production of Flat Glass Egypt (*) Çay rova Cam San. A.fi. generates rent income by leasing its warehouses and facilities to the Group companies. NOTE 2 - BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS 2.1 Basis of Presentation Preparation of Financial Statements and Accounting Standards The Company and its Turkish subsidiaries maintain their books of accounts and prepare their statutory financial statements in accordance with the Turkish Commercial Code ( TCC ), tax legislations and the Uniform Chart of Accounts issued by the Ministry of Finance and accounting principles issued by the Capital Markets Board ( CMB ). The foreign subsidiaries maintain their books of account in accordance with the laws and regulations in force in the countries in which they are registered. The CMB regulates the principles and procedures of preparation, presentation and announcement of financial statements prepared by entities through the "Communique No: XI-29, Principles of Financial Reporting in Capital Markets (the Communique ). This Communiqué is effective for the annual periods starting from 1 January 2008 and supersedes the Communiqué No: XI-25, The Financial Reporting Standards in the Capital Markets. According to the Communiqué, entities shall prepare their financial statements in accordance with International Financial Reporting Standards ( IAS/IFRS ) endorsed by the European Union. Until the Public Oversight Accounting and Auditing Standards Authority ( POAASA ) announces the differences between IAS/IFRS as adopted by the European Union and those issued by the International Accounting Standards Board ( IASB ), Turkish Accounting Standards/Turkish Financial Reporting Standards ( TAS/TFRS ) issued by the POAASA will continue to be in line with standards issued by the IASB. As the differences of the IAS/IFRS endorsed by the European Union from the ones issued by the IASB have not been announced by POAASA as of the date of preparation of these consolidated financial statements, the consolidated financial statements have been prepared within the framework of Communiqué XI, No:29 and related promulgations to this Communiqué as issued by the CMB in accordance with the accounting and reporting principles accepted by the CMB ( CMB Financial Reporting Standards ) which are based on IAS/IFRS. The consolidated financial statements and the related notes to them are presented in accordance with the formats required at the announcements of CMB dated 14 April 2008, 9 January 2009 and 25 October As per CMB s Communiqué Serial XI, No:29 and its announcements clarifying this communiqué, enterprises are obliged to present the hedging rate of their total foreign exchange liability and export and import amounts in the notes to the financial statements. The Company and its Turkish subsidiaries maintain their books of account and prepare their statutory financial statements ( Statutory Financial Statements ) in TRY in accordance with the Turkish Commercial Code ( TCC ), tax legislation and the Uniform Chart of Accounts issued by the Ministry of Finance and accounting principles issued by the CMB for listed companies. The foreign Subsidiaries and Joint Ventures maintain their books of account in accordance with the laws and regulations in force in the countries in which they are registered. These consolidated financial statements are based on the statutory records, which are maintained under historical cost conversion except for the valuation of certain financial assets and liabilities, with the required adjustments and reclassifications reflected for the purpose of fair presentation in accordance with the CMB Financial Reporting Standards. 27

30 Presentation and Functional Currency The individual financial statements of each entity of the Group, are presented in the currency of the primary economic environment in which the entity operates (its functional currency). For the purpose of the consolidated financial statements, the results and financial position of each entity are expressed in Turkish Lira ( TRY ), which is the functional and presentation currency of the Group. The functional currency of Trakya Cam Investment BV, a joint venture operating in Netherlands is the Euro. The functional currencies of Trakya Glass Bulgaria EAD and Trakya Glass Logistics EAD, the joint ventures operating in Bulgaria are the Bulgarian Leva. The functional currency of Trakya Investment BV, TRSG Holding BV and TRSG Autoglass Holding B.V subsidiaries operating in Netherlands is Euro. Functional currency of Trakya Glass Rus ZAO and Automotive Glass Alliance Rus ZAO, subsidiaries operating in Russia are Roubles The functional currency of Glass Corp S.A. subsidiaries operating in Romania is Ron. Financial statements of these subsidiaries and joint ventures are consolidated by converting balance sheet items with TRY/Euro, TRY/Bulgarian Leva TRY/Ruble,TRY/ Ron exchange rates prevailing at the balance sheet date and by converting income / expenses and cash flows with annual average exchange rates for TRY/Euro, TRY/Bulgarian Leva, TRY/ Ruble and TRY/ Ron. Translation differences arising from conversion are accounted in currency translation differences under equity. The functional currency of subsidiaries of the Company operating in Turkey is TRY. Preparation of Financial Statements in Hyperinflationary Periods In accordance with the CMB s resolution No: 11/367 issued on 17 March 2005, companies operating in Turkey which prepare their financial statements in accordance with the CMB Accounting Standards (including the application of IFRS) are not subject to inflation accounting effective from 1 January Therefore, as of 1 January 2005, IAS 29 Financial Reporting in Hyperinflationary Economies is not applied in the accompanying consolidated financial statements. Hyperinflation impact on the paid-in capital of the Company was accounted for in adjustments to share capital under shareholders equity. Going Concern The consolidated financial statements including the accounts of the parent company, its subsidiaries, joint ventures and associates have been prepared assuming that the Group will continue as a going concern on the basis that the entity will be able to realize its assets and discharge its liabilities in the normal course of business. Comparative information and correction of prior period financial statements The consolidated financial statements of the Group include comparative financial information to enable the determination of the financial position and performance. Comparative figures are reclassified, where necessary, to conform to changes in presentation in the current year consolidated financial statements. The Group has made corrections on prior year s consolidated financial statements in Note 38, to be consistent with current year consolidated financial statements. Correction is related to the calculation of net debt / total equity ratio. This correction has no effect on consolidated financial statements. In this context net debt / total capital ratios as of 31 December 2012 and 31 December 2011are as follows: Group s share in Cam Elyaf Sanayi disclosed as 20,93% in Note 7 in the financial statements as at 31 December 2011 has been revised as 12.6% in the financial statements as at 31 December December 31 December Total financial liabilities 398,730, ,581,390 Less: cash and cash equivalents and financial assets (385,803,506) (552,355,306) Net debt 12,926,680 (215,773,916) Total equity 2,010,170,358 1,793,698,381 Total capital 1,997,243,678 2,009,472,297 Net debt / total equity ratio 1% (11%) 28

31 2012 Annual Report The Group has made reclassification on prior year s consolidated financial statements in Note 5, to be consistent with current year consolidated financial statements. Classification is related to the presentation of Basic glass and Other glass operating segments and Turkey and out of Turkey geographical segments. This correction has no effect on consolidated financial statements. In this context, presentation of Note 5 has revised accordingly for the period between 1 January 31 December Consolidation 1 January- 31 December 2011 Basic glass Other glass Total eliminations Consolidated Net sales 878,597, ,688,293 1,270,285,357 (14,817,324) 1,255,468,033 Cost of sales (528,213,066) (291,902,127) (820,115,193) 11,192,274 (808,922,919) Gross profit 350,383,998 99,786, ,170,164 (3,625,050) 446,545,114 Operating expense (157,249,611) (51,130,442) (208,380,053) - (208,380,053) Other incomes 9,978,094 3,274,118 13,252,212-13,252,212 Other expense (6,017,511) (1,597,957) (7,615,468) - (7,615,468) Operating Profit 197,094,970 50,331, ,426,855 (3,625,050) 243,801,805 Purchases of tangible and intangible fixed asset 73,478,421 23,121,580 96,600,001-96,600,001 Depreciation and amortization on fixed assets 93,406,847 35,932, ,339,294 (653,664) 128,685,630 1 January- 31 December 2011 Turkey Out of Turkey Total eliminations Consolidated Net sales 1,040,111, ,174,023 1,270,285,357 (14,817,324) 1,255,468,033 Cost of sales (657,854,175) (162,261,018) (820,115,193) 11,192,274 (808,922,919) Gross profit 382,257,159 67,913, ,170,164 (3,625,050) 446,545,114 Purchases of tangible and intangible fixed asset 57,561,725 39,038,276 96,600,001-96,600,001 Depreciation and amortization on fixed assets 101,425,635 27,913, ,339,294 (653,664) 128,685,630 Total assets at 31 December ,421,428, ,816,907 2,966,245,411 (617,927,753) 2,348,317,658 Financial statements of foreign Subsidiaries and Joint Ventures Financial statements of subsidiaries, associates and joint ventures operating in foreign countries are prepared in accordance with the legislation of the country in which they operate and assets and liabilities in financial statements prepared according to the Group s accounting policies are translated into TRY from the foreign exchange rate at the balance sheet date whereas income and expenses are translated into TRY at the average foreign exchange rate. Exchange differences arising from the translation of the opening net assets of foreign undertakings and differences between the average and balance sheet date rates are included in the currency translation differences under shareholders equity.. Foreign exchange rates used for the translation of the foreign operations incorporated in the consolidation are as follows: 31 December December 2011 Currency Period End Period Average Period End Period Average Euro Bulgarian Leva Ruble Ron Consolidation Principles Subsidiaries Control is provided with influence on financial and operational policy in order to obtain economic benefit from enterprise benefit. Subsidiaries are companies over which the parent company has capability to control the financial and operating policies for the benefit of parent company, either (a) through the power to exercise more than 50% of the voting rights relating to shares in the companies owned directly and indirectly by itself; or (b) although not having the power to exercise more than 50% of the voting rights, otherwise having the power to exercise control over the financial and operating policies. The table in Note 1 sets out all Subsidiaries included in the scope of consolidation and shows the ownership and effective interest rates as at 31 December 2012 and 31 December Subsidiaries are consolidated from the date on which the control is transferred to the Group and are no longer consolidated from the date that the control ceases. Where necessary, accounting policies for Subsidiaries have been changed to ensure consistency with the policies adopted by the Group. The balance sheets and the statements income of the subsidiaries are consolidated on line-by-line basis and the carrying value of the investment held by the Company and its subsidiaries is eliminated against the related equity. Intercompany transactions and balances between the Company and its subsidiaries are eliminated during the consolidation. The cost of, and the dividends arising from, shares held by the Company in its Subsidiaries are eliminated from equity and income for the period, respectively. 29

32 The non-controlling shareholders share in the net assets and results of Subsidiaries for the year are separately classified as non-controlling interest in the consolidated balance sheets and statements of income. The non-controlling interests consist of shares from the initial business combinations and the non-controlling shares from the changes in equity after the business combinations date. When the losses applicable to the non-controlling portion exceed the non-controlling interest in the equity of the subsidiary, the excess loss and the further losses applicable to the non-controlling are charged against the non-controlling interest (Note 2.4). Joint Ventures Joint Ventures are companies in respect of which there are contractual arrangements through which an economic activity is undertaken subject to joint control by the Company and one or more other parties. The Company exercises such joint control through the power to exercise voting rights relating to shares in the companies as a result of ownership interest directly and indirectly by itself whereby the Company exercises control over the voting rights of the shares held by them. The table in Note 1 sets out all Joint Ventures included in the scope of consolidation and shows the ownership and effective interest rates as at 31 December 2012 and 31 December The Group s interest in Joint Ventures is accounted for by way of proportionate consolidation. According to this method, the Group includes its share of the assets, liabilities, income and expenses of each Joint Venture in the relevant components of the financial statements. Liabilities and expenses incurred directly in respect of interests in jointly controlled assets are accounted for on an accrual basis. Income from the sale or use of the Group s share of the output of jointly controlled assets, and its share of joint venture expenses, are recognized when it is probable that the economic benefits associated with the transactions will flow to/from the Group and their amount can be measured reliably. The accounting policy of goodwill resulting from the acquisition of the joint-venture is the same as the accounting policy of goodwill resulting from the acquisition transaction of the subsidiary (Note 2.4). Unrealized profits and losses resulting from the transactions between the Group and the Group s joint-ventures are eliminated to the extent of the Group s interest in the joint-ventures. Associates Associates are companies in which the Group has the interest that is more than 20% and less than 50% of the ordinary share capital held for the long-term and over which a significant influence is exercised. Equity method is used for accounting of associates. Unrealized gains on transactions between the group and its associates are eliminated to the extent of the group s interest in the associates. When the group s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables or the significant influence ceases the Group does not continue to apply the equity method, unless it has incurred obligations or made payments on behalf of the associate. Subsequent to the date of the caesura of the significant influence the investment is carried either at fair value when the fair values can be measured reliably or otherwise at cost when the fair values cannot be reliably measured. Available-for-sale investments Available-for-sale investments, in which the Group has controlling interests equal to or above 20%, or over which are either immaterial or where a significant influence is not exercised by the Group, that do not have quoted market prices in active markets and whose fair values cannot be reliably measured are carried at cost less any provision for impairment. Available-for-sale investments, in which the Group has the interests that is below 20% or in which a significant influence is not exercised by the Group, that have quoted market prices in active markets and whose fair values can be reliably measured, are carried to the financial statements at their fair value. 2.2 Restatement and Errors in the Accounting Policies and Estimates The effect of changes in accounting estimates affecting the current period is recognized in the current period; the effect of changes in accounting estimates affecting current and future periods is recognized in the current and future periods. There has not been any significant change in accounting estimates of the Group for the current period. Material changes in accounting policies or material errors are corrected, retrospectively by restating the prior period consolidated financial statements. 2.3 Amendments in International Financial Reporting Standards The Group has applied new standards, amendments and interpretations to existing standards published by IASB and IFRIC that are effective as at 1 January 2012 and are relevant to the Group s operations. There are no relevant amendments or interpretations for the Group which have been enforced as of 1 January 2012 and in interim periods subsequent to 1 January Standards, amendments and interpretations effective from 1 January 2012: a. Standards, amendments and IFRICs applicable to 31 December 2012 year ends - IFRS 7 (amendment), Financial instruments: Disclosures on transfers of assets, is effective for annual periods beginning on or after 1 July This amendment will promote transparency in the reporting of transfer transactions and improve users understanding of the risk exposures relating to transfers of financial assets and the effect of those risks on an entity s financial position, particularly those involving securitisation of financial assets. IFRS 1 (amendment), First-time adoption of IFRS, is effective for annual periods beginning on or after 1 July The 30

33 2012 Annual Report amendment provides guidance on how an entity should resume presenting financial statements in accordance with IFRSs after a period when the entity was unable to comply with IFRSs because its functional currency was subject to severe hyperinflation. Earlier adoption is permitted. - IAS 12 (amendment), Income taxes on deferred tax, is effective for annual periods beginning on or after 1 January This amendment introduces an exception to the existing principle for the measurement of deferred tax assets or liabilities arising on investment property measured at fair value. b. New IFRS standards, amendments and IFRICs effective after 1 January 2013: - IAS 19 (amendment), Employee benefits, is effective for annual periods beginning on or after 1 January These amendments eliminate the corridor approach and calculate finance costs on a net funding basis. Early adoption is permitted. Based on the aforementioned standard, an actuarial loss of TRY would be reversed from the income statement and accounted for under other comprehensive income for the year ended 31 December IAS 1 (amendment), Presentation of financial statements, regarding other comprehensive income is effective for annual periods beginning on or after 1 July The main change resulting from these amendments is a requirement for entities to group items presented in other comprehensive income on the basis of whether they are potentially reclassifiable to profit or loss subsequently (reclassification adjustments). The amendments do not address which items are presented in other comprehensive income. Early adoption is permitted. - IFRS 10, Consolidated financial statements, is effective for annual periods beginning on or after 1 January The standard builds on existing principles by identifying the concept of control as the determining factor in whether an entity should be included within the consolidated financial statements of the parent company. The standard provides additional guidance to assist in the determination of control where this is difficult to assess. This new standard might impact the entities that a group consolidates as its subsidiaries. - IFRS 11, Joint arrangements, is effective for annual periods beginning on or after 1 January IFRS 11 is a more realistic reflection of joint arrangements by focusing on the rights and obligations of the arrangement rather than its legal form. There are two types of joint arrangement: joint operations and joint ventures. Proportional consolidation of joint ventures is no longer allowed. Please refer to Note 3 for the effects of the aforementioned standard on the consolidated financial statement. - IFRS 12, Disclosures of interests in other entities, is effective for annual periods beginning on or after 1 January The standard includes the disclosure requirements for all forms of interests in other entities, including joint arrangements, associates, special purpose vehicles and other off balance sheet vehicles. - IFRS 10, 11 and 12 on transition guidance (amendment), is effective for annual periods beginning on or after 1 January The amendment also provides additional transition relief in IFRSs 10, 11 and 12, limiting the requirement to provide adjusted comparative information to only the preceding comparative period. For disclosure related to unconsolidated structured entities, the amendments will remove the requirement to present comparative information for the periods before IFRS 12 is applied. - IFRS 13, Fair value measurement, is effective for annual periods beginning on or after 1 January The standard aims to improve consistency and reduce complexity by providing a precise definition of fair value and a single source of fair value measurement and disclosure requirements for use across IFRSs. - IAS 27 (revised), Separate financial statements, is effective for annual periods beginning on or after 1 January The standard includes the provisions on separate financial statements that are left after the control provisions of IAS 27 have been included in the new IFRS IAS 28 (revised), Associates and joint ventures, is effective for annual periods beginning on or after 1 January The standard includes the requirements for joint ventures, as well as associates, to be equity accounted following the issue of IFRS IFRS 7 (amendment), Financial instruments: Disclosures, on offsetting financial assets and financial liabilities, is effective for annual periods beginning on or after 1 January These new disclosures are intended to facilitate comparison between those entities that prepare IFRS financial statements and those that prepare US GAAP financial statements. - IAS 32 (amendment), Financial instruments : Presentation, on offsetting financial assets and financial liabilities, is effective for annual periods beginning on or after 1 January The amendment updates the application guidance in IAS 32, Financial instruments: Presentation, to clarify some of the requirements for offsetting financial assets and financial liabilities on the balance sheet. - IFRS 1 (amendment), First time adoption, on government loans, is effective for annual periods beginning on or after 1 January The amendment addresses how a first-time adopter would account for a government loan with a below-market rate of interest when transitioning to IFRS. - Annual Improvements to IFRSs 2011 is effective for annual periods beginning on or after 1 January Amendments effect five standards: IFRS 1, IAS 1, IAS 16, IAS 32 and IAS IFRS 9, Financial instruments: Classification and Measurement, is effective for annual periods beginning on or after 1 January The standard addresses the classification, measurement and recognition of financial assets and financial liabilities. It replaces the parts of IAS 39 that relate to the classification and measurement of financial instruments. - IFRS 10, (amendment) Consolidated Financial Statements, IFRS 12 and IAS 27 for investment entities is effective for annual periods beginning on or after 1 January These amendments mean that many funds and similar entities will be exempt from 31

34 consolidating most of their subsidiaries. Instead, they will measure them at fair value through profit or loss. Changes have also been made IFRS 12 to introduce disclosures that an investment entity needs to make. - IFRIC 20, Stripping costs in the production phase of a surface mine is effective for annual periods beginning on or of 1 January The Group will evaluate the effect of the aforementioned changes within its operations and apply changes starting from the effective date. It is expected that the application of the standards and the interpretations above will not have a significant effect on the consolidated financial statements of the Group, except the standards of which effects are disclosed above. 2.4 Summary of Significant Accounting Policies Revenue recognition Revenues are recognized on an accrual basis at the fair values incurred or to be incurred when the goods are delivered, the risks and rewards of ownership of the goods are transferred, when the amount of revenue can be reliably measured and it is probable that the future economic benefits associated with the transaction will flow to the entity. Net sales represent the fair value of goods shipped less sales discounts and returns. When the arrangement effectively constitutes a financing transaction, the fair value of the consideration is determined by discounting all future receipts using an imputed rate of interest. The difference between the fair value and the nominal amount of the consideration is recognized in the period on an accrual basis as financial income (Note 28). Sale of Goods Revenue from sale of goods is recognized when all the following conditions are satisfied: The Group has transferred to the buyer the significant risks and rewards of ownership of the goods, The Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold; The amount of revenue can be measured reliably; It is probable that the economic benefits associated with the transaction will flow to the Group; and The costs incurred or to be incurred in respect of the transaction can be measured reliably. Interest income Interest income is accrued using the effective interest method which brings the remaining principal amount and expected future cash flows to the net book value of the related deposit during the expected life of the deposit. Dividend income Dividend income is recognized by the Group at the date the right to collect the dividend is realized. Dividend payables are recognized as a result of profit distribution in the period they are declared. Inventory Inventories are valued at the lower of cost or net realizable value. Cost elements included in inventories are materials, labour and an appropriate amount for factory overheads. The cost of borrowings is not included in the costs of inventories. The cost of inventories is determined on the weighted average basis for each purchase. Net realizable value is the estimated selling price in the ordinary course of business, less the costs of completion and selling expenses. When the net realizable value of inventory is less than cost, the inventory is written down to the net realizable value and the expense is included in statement of income/(loss) in the period the write-down or loss occurred. When the circumstances that previously caused inventories to be written down below cost no longer exist or when there is clear evidence of an increase in net realizable value because of the changes in economic circumstances, the amount of the write-down is reversed. The reversal amount is limited to the amount of the initial write-down (Note 13). Property, plant and equipment Property, plant and equipment are carried at acquisition cost, less any accumulated depreciation and impairment losses. Assets in the course of construction for rental or administrative purposes, or for purposes not yet determined, are carried at cost, less any recognized impairment loss. Cost includes professional fees. For assets that need considerable time to be ready for sale or use, borrowing costs are capitalized in accordance with the Group s accounting policy. As it is for the other fixed assets, such assets are depreciated when the assets are ready for their intended use. Cost amounts of property, plant and equipment assets excluding land and construction in progress are subject to amortization by using the straight-line method in accordance with their expected useful life. There is no depreciation allocated for lands due to indefinite useful lives. Expected useful life, residual value and amortization method are evaluated every year for the probable effects of changes arising in the expectations and are accounted for prospectively (Note 18). Leased assets are subject to similar amortization procedures, as with the other tangible assets on the shorter of the related leasing period and economic life of the asset. The depreciation periods for property, plant and equipment, which approximate the economic useful lives of such assets, are as follows: 32

35 2012 Annual Report Buildings Land improvements Machinery and equipment Motor vehicles Furniture and fixtures Special costs Useful life years 8-50 years 8-15 years 4-5 years 2-15 years 4-5 years Property, plant and equipment are reviewed for impairment losses whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized for the amount by which the carrying amount of the asset exceeds its recoverable amount, which is the higher of asset net selling price or value in use. The recoverable amount of the property, plant and equipment is the higher of future net cash flows from the utilization of this property, plant and equipment or fair value less cost to sell. Costs to property plant and equipment are included in the asset s carrying amount or recognized as a separate asset as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the income statements during the financial period in which they were incurred. Gains or losses on disposals of property, plant and equipment are determined by comparing proceeds with their restated carrying amounts and are included in the related income and expense accounts, as appropriate. Intangible assets Intangible assets acquired Intangible assets acquired separately are carried at cost, less accumulated amortization and any accumulated impairment losses. Amortization is charged on a straight-line basis over their estimated useful lives. Estimated useful life and amortization method are reviewed at the end of each annual reporting period, with the effect of any changes in the estimate being accounted for on a prospective basis (Note 19). The amortization periods for intangible assets, which approximate the economic useful lives of such assets, are as follows: Useful life Rights 3-5 years Other intangible assets 3-5 years Computer software s Acquired computer software licenses are capitalized on the basis of the costs incurred to acquire and bring to use the specific software. These costs are amortized over their estimated useful lives (3-5 years). Costs associated with developing or maintaining computer software programs are recognized as an expense as incurred. Costs that are directly associated with the development of identifiable and unique software products controlled by the Group, and that will probably generate economic benefits exceeding costs beyond one year, are recognized as intangible assets. Costs include software development employee costs and an appropriate portion of relevant overheads. Computer software development costs recognized as assets are amortized over their estimated useful lives (not exceeding five years) (Note 19). Impairment of Assets The carrying amounts of the Group s assets other than goodwill are reviewed at each balance sheet date to determine whether there is any indication of impairment. When an indication of impairment exists, the Group compares the carrying amount of the asset with its net realizable value which is the higher of value in use or fair value less costs to sell. Impairment exists if the carrying value of an asset or a cash generating unit is greater than its recoverable amount which is the higher of value in use or fair value less costs to sell. An impairment loss is recognised immediately in the comprehensive statement of income. The increase in carrying value of the assets (or a cash generated unit) due to the reversal of recognised impairment loss shall not exceed the carrying amount of the asset (net of amortization amount) in case where the impairment loss was reflected in the consolidated financial statements in prior periods. Such a reversal is accounted for in the comprehensive statement of income. Financial Leasing Leasing of property, plant and equipment where the Group has substantially all the risks and rewards of ownership are classified as finance leasing. Finance leased are capitalised at the inception of the lease at the lower of the fair value of the leased property or the present value of the minimum lease payments. Financial costs of leasing are distributed over the lease period with a fixed interest rate. The property, plant and equipment acquired under financial leases are depreciated over the useful lives of the assets. If there is a decrease in the value of the property, plant and equipment under financial leasing, the Group provides impairment. The foreign exchange and interest expenses related with financial leasing have been recorded in the income statement. Lease payments have been deducted from leasing debts. Borrowing costs Borrowings are recognized initially at the proceeds received, net of transaction costs incurred. Borrowings are subsequently stated at amortized cost using the effective yield method; any difference between proceeds, net of transaction costs, and the redemption value is recognized in the statement of income over the period of the borrowings (Note 8). Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalized as part of the cost of that asset in the period in which the asset is prepared for its intended use or sale. All other borrowing costs are recognized in the profit or loss in the period in which they are incurred. 33

36 Related Parties For the purpose of these consolidated financial statements, shareholders, key management personnel (general managers, head of group, vice general managers, vice head of group and factory managers) and Board members, in each case together with the companies controlled by/or affiliated with them, associated companies and other companies within the Group are considered and referred to as related parties (Note 37). Offsetting All items with significant amounts and nature, even with similar characteristics, are presented separately in the financial statements. Insignificant amounts are grouped and presented by means of items having similar substance and function. When the nature of transactions and events necessitate offsetting, presentation of these transactions and events over their net amounts or recognition of the assets after deducting the related impairment are not considered as a violation of the rule of non-offsetting. Financial assets Classification The group classifies its financial assets in the following categories: loans and receivables, available-for-sale financial assets and held to maturity financial assets. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition. Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for maturities greater than 12 months after the balance sheet date. Those with maturities greater than 12 months are classified as non-current assets. The group s loans and receivables are classified as trade and other receivables in the balance sheet (Note 10). Available-for-sale financial assets Available-for-sale financial assets are non-derivative financial assets that are either designated in this category or not classified in any of the other categories. They are included in non-current assets unless management intends to dispose of the related investments within 12 months of the balance sheet date (Note 7). Held to maturity financial assets Debt securities with fixed maturities, where management has both the intent and the ability to hold to the maturity excluding the financial assets classified as originated loans and advances to customers are classified as held-to-maturity financial assets. Held-to-maturity financial assets are carried at amortized cost using the effective yield method. Recognition and measurement Regular purchases and sales of financial assets are recognized on the trade date - the date on which the group commits to purchase or sell the asset. Investments are initially recognized at fair value plus transaction costs for all financial assets not carried at fair value through profit or loss. Financial assets carried at fair value through profit or loss are initially recognized at fair value and transaction costs are expensed in the income statement. Financial assets are derecognized when the rights to receive cash flows from the investments have expired or have been transferred and the group has transferred substantially all risks and rewards of ownership. Available-for-sale financial assets and financial assets at fair value through profit or loss are subsequently carried at fair value. Loans and receivables are carried at amortized cost using the effective yield method. Gains and losses arising from changes in fair value of available-for-sale financial assets are recognized in other comprehensive income and accumulated in the investments revaluation reserve with the exception of impairment losses, interest calculated using the effective interest method, and foreign exchange gains and losses on monetary assets, which are recognized in profit or loss. When the available-for-sale financial asset is disposed or is determined to be impaired, the cumulative gain or loss previously accumulated in the investments revaluation reserve is reclassified to profit or loss. Interest on available-for-sale securities calculated using the effective interest method is recognized in the income statement as part of other income. Dividends on available-for-sale equity instruments are recognized in the income statement as part of other income when the group s right to receive payments is established. The fair values of quoted investments are based on current bid prices. If the market for a financial asset is not active (and for unlisted securities), the group establishes fair value by using valuation techniques. These include the use of recent arm s length transactions, reference to other instruments that are substantially the same, discounted cash flow analysis, and option pricing models. Available for sale investments that do not have a quoted market price in active markets and whose fair value cannot be measured reliably are carried at cost less any provision for diminution in value. The group assesses at each balance sheet date whether there is objective evidence that a financial asset or a group of financial assets is impaired. In the case of equity securities classified as available for sale, a significant or prolonged decline in the fair value of the security below its cost is considered as an indicator that the securities are impaired. If any such evidence exists for available-for-sale financial assets, the cumulative loss - measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognized in profit or loss - is removed from equity and recognized in the income statement. Impairment losses recognized in the income statement on equity instruments are not reversed through the income statement. Trade receivables Trade receivables that are created by way of providing goods or services directly to a debtor are carried at amortized cost. Trade receivables, net of unearned financial income, are measured at amortized cost, using the effective interest rate method, less the unearned financial 34

37 2012 Annual Report income. Short duration receivables with no stated interest rate are measured at the original invoice amount unless the effect of imputing interest is significant. A doubtful receivable provision for trade receivables is established if there is objective evidence that the Group will not be able to collect all amounts due. The amount of provision is the difference between the carrying amount and the recoverable amount, being the present value of all cash flows, including amounts recoverable from guarantees and collateral, discounted based on the original effective interest rate of the originated receivables at inception. If the amount of the impairment subsequently decreases due to an event occurring after the write-down, the release of the provision is credited to other income (Note 10). Cash and cash equivalents Cash and cash equivalents includes cash in hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less, and bank overdrafts (Note 6). Financial liabilities Financial liabilities are initially measured at fair value including the transaction costs which are directly attributable. Financial liabilities, including borrowings, are initially measured at fair value, net of transaction costs. Financial liabilities are subsequently measured at amortized cost using the effective interest method plus the interest expense recognized on an effective yield basis. The effective interest method calculates the amortized cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate discounts the estimated future cash payments through the expected life of the financial liability, or, where appropriate, a shorter period. Trade payables Trade payables are payments to be made arising from the purchase of goods and services from suppliers within the ordinary course of business. Trade payables are recognized initially at fair value and subsequently measured at amortized cost using the effective interest method (Note 10). Business combinations and Goodwill The cost of a business combination is allocated by recognizing the acquiree s identifiable assets, liabilities and contingent liabilities at the date of acquisition. If the acquisition cost is higher than the fair value of the identifiable assets, liabilities and contingent liabilities acquired, the difference is accounted for as goodwill. In business combinations, the acquirer recognizes identifiable assets, intangible assets and/or contingent liabilities which are not included in the acquiree s financial statements and which can be separated from goodwill, at their fair values in the consolidated financial statements. The goodwill previously recognized in the financial statements of the acquiree is not considered as an identifiable asset. If the acquisition cost is lower than the fair value of the identifiable assets, liabilities and contingent liabilities acquired, the difference is accounted for as income in the related period. The carrying value of goodwill is reviewed annually at the same time for impairment and the impairment provision, if any, is immediately recognized in the consolidated income statements. For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the CGUs, or groups of CGUs, that is expected to benefit from the synergies of the combination. Each unit or group of units to which the goodwill is allocated represents the lowest level within the entity at which the goodwill is monitored for internal management purposes. Goodwill is monitored at the operating segment level. Legal mergers arising between companies controlled by the Group are not considered within the scope of IFRS 3. Consequently, there is no recognition of any goodwill in these transactions. Similarly, the effects of all transactions between the legally merged enterprises, whether occurring before or after the legal merger, are eliminated in the preparation of the consolidated financial statements. Foreign Currency Transactions The individual financial statements of each Group entity are presented in the currency of the primary economic environment in which the entity operates (its functional currency). For the purpose of the consolidated financial statements, the results and financial position of each entity are expressed in Turkish Lira ( TRY ), which is the functional currency of the Company, and the presentation currency for the consolidated financial statements. In preparing the financial statements of the individual entities, transactions in currencies other than functional currencies are recorded at the rates of exchange prevailing on the dates of the transactions. At each balance sheet date, monetary items denominated in foreign currencies are retranslated at the rates prevailing on the balance sheet date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated. For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group s foreign operations are expressed in TRY using exchange rates prevailing at the balance sheet date. Income and expense items are translated at the average exchange rates for the period, unless exchange rates fluctuate significantly during that period, in which case the exchange rates at the dates of the transactions are used. Exchange differences arising, if any, are classified as equity and transferred to the Group s translation differences. Such exchange differences are recognized in profit or loss in the period in which the foreign operation is disposed of. Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and translated at closing rates. 35

38 Earnings per share Earnings per share disclosed in the accompanying consolidated statement of income is determined by dividing net income by the weighted average number of shares circulating during the year concerned. In Turkey, companies can raise their share capital by distributing Bonus Shares to shareholders from retained earnings. In computing earnings per share, such bonus share distributions are assessed as issued shares. Accordingly, the retrospective effect for those share distributions is taken into consideration in determining the weighted-average number of shares outstanding used in this computation (Note 36). Events after the balance sheet date Events after the balance sheet date comprise any events between the balance sheet date and the date of authorization of the financial statements for issue, even if any events after the balance sheet date occurred subsequent to the announcement on the Group s profit or following the publicly disclosed financial information. The Group restates its consolidated financial statements if such adjusting subsequent events arise (Note 40). Provisions, Contingent Assets and Liabilities Provisions are recognized when the Group has a present obligation as a result of a past event, and it is probable that the Group will be required to settle that obligation, and a reliable estimate can be made of the amount of the obligation. The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the balance sheet date considering the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount of provision shall be the present value of the expenditures expected to be required to settle the obligation. The discount rate reflects current market assessments of the time value of money and the risks specific to the liability. The discount rate shall be a pre-tax rate and shall not reflect risks for which future cash flow estimates have been adjusted. When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognized as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably. Segment reporting The Group has two business segments determined by the management based on the information available for the evaluation of performances and the allocation of resources. These segments are managed separately because they are affected by the economical conditions and geographical positions in terms of risks and returns. The Group management has determined gross profit as the most suitable method for assessing the segmental performance (Note 5). Operating segments are reported in a manner consistent with the reporting provided to the chief operating decision- maker. The chief operating decision-maker is responsible for the decisions related to the allocation of resources to the segments and assessment of performance of segments. A reportable segment is a business segment or a geographical segment identified based on the foregoing definitions for which segment information is required to be disclosed. A business segment or geographical segment should be identified as a reportable segment if a majority of its revenue is earned from sales to external customers and its revenue from sales to external customers and from transactions with other segments is 10% or more of the total revenue, external and internal, of all segments; or its segment result, whether profit or loss, is 10% or more of the combined result of all segments in profit or the combined result of all segments in loss, whichever is the greater in absolute amount; or its assets are 10% or more of the total assets of all segments. Operating segments that do not meet any of the quantitative thresholds listed above, may still be considered reportable, and separately disclosed, if the management believes that the information about the segment would be useful to the users of the financial statements. The Group classified its operations into two operational divisions for management accounting purposes which constitute the basis for the segment reporting (Note 5). Government grants Grants from the government are recognized at fair value where there is a reasonable assurance that the grant will be received and the Group will comply with all the required conditions (Note 21). The government grants are recognized as income over the periods necessary to match them with the related costs which they are intended to compensate, on a systematic basis. Accordingly, government grants are recognized as income when the related costs which they are intended to compensate were incurred. Similarly, grants related to depreciable assets are recognized as income over the periods and in the proportions in which depreciation on those assets is charged. Current and deferred income tax The tax expense for the year comprises current and deferred tax. Tax is recognized in the statement of income, except to the extent that it relates to items recognized directly in equity (Note 35). In such case, the tax is recognized in shareholders equity. The current year tax on income is calculated for the Group s subsidiaries, associates and joint ventures considering the tax laws that are applicable in the countries where they operate. Deferred tax liability or asset is recognized on differences between the carrying amounts of assets and liabilities in the financial statements 36

39 2012 Annual Report and the corresponding tax bases which are used in the computation of taxable profit. Deferred income tax is determined using tax rates and tax regulations that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled. The main temporary differences are from the time differences between carrying amount of tangible assets and their tax base amounts, the available expense accruals that are subject to tax and tax allowances that are not utilised. Deferred tax liabilities are recognised for all taxable temporary differences, where deferred tax assets resulting from deductible temporary differences are recognised to the extent that it is probable that future taxable profit will be available against which the deductible temporary difference can be utilised. When the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxation authority and there is a legally enforceable right to set off current tax assets against current tax liabilities, deferred tax assets and deferred tax liabilities are offset accordingly. Employee benefits Under the Turkish law and union agreements, severance payments are made to employees retiring or involuntarily leaving the Group. Such payments are considered as being part of defined retirement benefit plan as per International Accounting Standard No: 19 (Revised) Employee Benefits ( IAS 19 ). In that respect, in addition to the salary, social rights such as; employee benefits including bonuses, fuel, leave, national holidays, educational incentives, food, marriage, private pension plans, birth and death are provided to the Group employees. Provision for employment termination benefits represents the present value of the estimated future probable obligation of the Company arising from the retirement of the employees calculated in accordance with the Turkish Labor Law. In accordance with existing social legislation and Turkish Labor Law in Turkey, the Company is required to make lump-sum termination indemnities to each employee whose employment is terminated, who has completed at least one year of service, who has been called for military service or who dies. All actuarial gains and losses are recognized in the income statement (Note 24). Statement of Cash Flows The Group prepares statements of cash flows as an integral part of its of financial statements to enable financial statement analysis about the change in its net assets, financial structure and the ability to direct cash flow amounts and timing according to evolving conditions. Cash flows include those from operating activities, working capital, investing activities and financing activities. Cash flows from operating activities represent the cash flows generated from the Group s activities. Cash flows related to investing activities represent the cash flows that are used in or provided from the investing activities of the Group (fixed investments and financial investments). Cash flows arising from financing activities represent the cash proceeds from the financing activities of the Group and the repayments of these funds. Dividends Dividend income is recognized by the Group at the date the right to collect the dividend is realized. Dividend payables are recognized as a result of profit distribution in the period they are declared. 2.5 Significant Accounting Estimates and Assumptions The preparation of consolidated financial statements requires estimates and assumptions to be made regarding the amounts for the assets and liabilities at the balance sheet date, and explanations for the contingent assets and liabilities as well as the amounts of income and expenses realized in the reporting period. The Group makes estimates and assumptions concerning the future. The accounting estimates and assumptions, by definition, may not be equal to the related actual results. The estimates and assumptions that may cause a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below: The Group s associate Çay rova Sanayi A.fi. has classified Çay rova property located in Gebze, Kocaeli, as investment property due to the termination of operational use as of 31 December The fair value of the property is determined as TRY 217,707,575, as of 31 December Revaluation gains, related to the Group s share, amounting to TRY 53,974,897, including the deferred tax, determined as a result of valuation reports of two separate CMB licensed valuation firms, is accounted for under Revaluation funds (Note 27). The Group recognizes deferred tax assets and liabilities based upon temporary differences arising between their financial statements prepared in accordance with CMB Financial Reporting Standards and their statutory financial statements. These temporary differences usually result in the recognition of revenue and expenses in different reporting periods for CMB Financial Reporting Standards and tax purposes. Deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither an accounting nor taxable profit/ (loss). The fully or partially recoverable amount of deferred tax assets are estimated under available circumstances. The future income projections, current period losses, unused losses and expiration dates of other tax assets and tax planning strategies that can be used when necessary are considered during the evaluation of estimations. The Group receives corporate tax allowances (in accordance with Corporate Tax Law No. 5520, article 32/A). As of 31 December 2012, the amount of corporate tax allowances related to temporary differences and that can be utilized during the period of corporate tax allowance right is TRY 14,386,765 (2011: TRY 5,715,297) (Note 35). Fair value of one of the Group s unquoted available for sale financial asset, Cam Elyaf Sanayi A.fi. 23.8% of which is owned by the Group, consisting of 12.6% of Cam Elyaf Sanayi A.fi. shares owned directly and 11.2% of the shares owned indirectly through Çay rova Cam Sanayi A.fi., is determined based on the valuations performed on 5 September 2012 by an independent and international valuation firm which has the required professional knowledge and experience sector knowledge. The fair value of the available-for-sale financial assets has been determined based on the available market information by the valuation methods of discounted cash flows. Discount rate used in cash flow analysis is around 11%. 37

40 2.6 Convenience translation into English of the consolidated financial statements originally issued in Turkish The accounting principles described in Note 2 to the consolidated financial statements (defined as CMB Financial Reporting Standards) differ from International Financial Reporting Standards ( IFRS ) issued by the International Accounting Standards Board with respect to the application of inflation accounting for the period between 1 January and 31 December Accordingly, the accompanying consolidated financial statements are not intended to present the financial position and results of operations in accordance with IFRS. NOTE 3 - BUSINESS COMBINATIONS The Group acquired 90% of the shares of Glass Corp. S.A., for a purchase consideration of Euro 3,098,613 on11 July Euro 2,050,840 of the total amount was paid in cash whereas the remaining amount of Euro 1,047,773 was accounted for in current payables related to acquisitions. Goodwill arising from the acquisition through which the Group aimed to gain a large share of market in Romania and supporting its target of growing, in emerging markets, is represented below. The goodwill calculation is based on temporary amounts and will be finalized 12 months after the acquisition date. If necessary, revision on the calculation will be reflected in the financial statements as of the acquisition date. Glass Corp. SA contributed TRY 2,463,176 in revenues after the acquisition, as included in the consolidated income statement. In the same period, the profit attributable to equity holders is TRY 2,404,238. Had Glass Corp S.A. been included in the consolidation as of 1 January 2012 an additional net revenue of TRY 3,847,207 and a decrease in the consolidated income statement by TRY 1,130,177 would have been recognized. Assets Fair Value Group' Share Current Asset 1,216,947 1,095,253 Cash and Cash Equivalent 1, Trade receivables 651, ,074 Trade receivables from related parties Other Trade Receivables 650, ,415 Other Receivables Inventories 563, ,551 Non Current Asset 6,409,545 5,768,591 Tangible Fixed Assets 6,364,853 5,728,368 Other Fixed Assets 44,692 40,223 Total Assets 7,626,492 6,863,843 Liabilities Current Liabilities 4,609,021 4,148,119 Financial Liabilities 179, ,576 Trade Payables 2,082,953 1,874,658 Other Payables 2,310 2,079 Other Short Term Liabilities 2,344,229 2,109,806 Non-Current Liabilities 9,413,582 8,472,224 Financial Liabilities 9,063,508 8,157,157 Other Payables 350, ,067 Total Liabilities 14,022,603 12,620,343 Total Net Asset (6,396,111) (5,756,500) Total paid in cash 4,530,425 Current payable related with the acquisition (Note 11) 2,314,592 Total purchases 6,845,017 Goodwill 12,601,517 Currency translation differences 971,829 Goodwill (Note 20) - 13,573,346 Net cash paid for acquisition of subsidiary Total paid in cash 4,530,425 Cash and Cash Equivalent (1,023) Net Cash Out Flow 4,529,402 38

41 2012 Annual Report NOTE 4 - JOINT VENTURES Joint ventures are accounted using proportionate consolidation in the Group s financial statements. Proportionate consolidation is similar to line by line consolidation. The Group s share of assets, liabilities, income and expenses of Joint Ventures are consolidated in the financial statements by mapping each financial statement line item. The financial information presented below represents 100% of the Joint Ventures and not the Group s share. The nature of business, share percentages and summarized financial information of joint ventures accounted under the proportionate consolidation are presented in Note December December 2011 Current assets 187,616, ,273,032 Non current assets 610,469, ,090,058 Current liabilities (67,200,355) (61,878,087) Non current liabilities (206,297,165) (18,824,611) Net assets 524,587, ,660,391 1 January - 1 January - 31 December December 2011 Income 338,932, ,939,936 Expense (-) (353,173,769) (254,099,534) Net income (14,241,072) 82,840,401 The Group has no contingent commitments regarding to Joint Ventures. NOTE 5 - SEGMENT REPORTING The Group has adopted IFRS 8 starting from 1 January 2009 and has identified relevant operating segments based on internal reports about the components of the Group that are regularly reviewed by the chief operating decision maker of the Group, identified as the board of directors. The chief operating decision maker reviews results and operations on a product line segment basis as well as on a geographic segment basis in order to monitor performance and to allocate resources. Product line segments of the Group are defined in the following categories: basic glass and other glass. Geographic segments of the Group are defined in the following regions: Turkey and abroad. The reconciliation of operating profit to income before tax is as follows; 1 January - 1 January - 31 December December 2011 Operating profit for reportable segments 98,270, ,801,805 Impairment losses on financial assets (6,701,215) - Research and development expenses (-) (11,123,215) (11,049,492) Share in result of associates and joint ventures 3,523,100 (791,487) Financial income, net 6,922,919 51,809,323 Income before tax 90,891, ,770,149 a) Operational segments Consolidation 1 January- 31 December 2012 Basic glass Other glass Total eliminations Consolidated Net sales 870,366, ,842,790 1,278,209,777 (28,979,351) 1,249,230,426 Cost of sales (595,508,944) (348,008,963) (943,517,907) 24,344,426 (919,173,481) Gross profit 274,858,043 59,833, ,691,870 (4,634,925) 330,056,945 Operating expense (177,450,827) (65,564,240) (243,015,067) - (243,015,067) Other incomes 17,010,375 6,642,490 23,652,865-23,652,865 Other expense (11,712,260) (711,967) (12,424,227) - (12,424,227) Operating Profit 102,705, , ,905,441 (4,634,925) 98,270,516 Purchases of tangible and intangible fixed asset 235,328, ,906, ,235, , ,840,539 Depreciation and amortization on fixed assets 89,773,781 36,344, ,118,311 (279,391) 125,838,920 39

42 Consolidation 1 January- 31 December 2011 Basic glass Other glass Total eliminations Consolidated Net sales 878,597, ,688,293 1,270,285,357 (14,817,324) 1,255,468,033 Cost of sales (528,213,066) (291,902,127) (820,115,193) 11,192,274 (808,922,919) Gross profit 350,383,998 99,786, ,170,164 (3,625,050) 446,545,114 Operating expense (157,249,611) (51,130,442) (208,380,053) - (208,380,053) Other incomes 9,978,094 3,274,118 13,252,212-13,252,212 Other expense (6,017,511) (1,597,957) (7,615,468 - (7,615,468) Operating Profit 197,094,970 50,331, ,426,855 (3,625,050) 243,801,805 Purchases of tangible and intangible fixed asset 73,478,421 23,121,580 96,600,001-96,600,001 Depreciation and amortization on fixed assets 93,406,847 35,932, ,339,294 (653,664) 128,685,630 The Group reviews its product line segments on the basis of net sales, cost of sales, gross profit, operating profit, purchases of tangible fixed and intangible assets and depreciation and amortisation of tangible fixed and intangible assets. Other income statement items are not allocated to segments. Research and development expenses are not allocated to segments since such amounts are not regularly provided to the chief operating decision maker. b) Geographical segments Consolidation 1 January- 31 December 2012 Turkey Out of Turkey Total eliminations Consolidated Net sales 1,044,768, ,441,112 1,278,209,777 (28,979,351) 1,249,230,426 Cost of sales (751,114,288) (192,403,620) (943,517,907) 24,344,426 (919,173,481) Gross profit 293,654,377 41,037, ,691,870 (4,634,925) 330,056,945 Purchases of tangible and intangible fixed asset 153,909, ,325, ,235, , ,840,539 Depreciation and amortization on fixed assets 98,306,527 27,811, ,118,311 (279,391) 125,838,920 Total assets at 31 December ,398,547, ,018,138 3,366,565,617 (716,664,011) 2,649,901,606 Consolidation 1 January- 31 December 2011 Turkey Out of Turkey Total eliminations Consolidated Net sales 1,040,111, ,174,023 1,270,285,357 (14,817,324) 1,255,468,033 Cost of sales (657,854,175) (162,261,018) (820,115,193) 11,192,274 (808,922,919) Gross profit 382,257,159 67,913, ,170,164 (3,625,050) 446,545,114 Purchases of tangible and intangible fixed asset 57,561,725 39,038,276 96,600,001-96,600,001 Depreciation and amortization on fixed assets 101,425,635 27,913, ,339,294 (653,664) 128,685,630 Total assets at 31 December ,421,428, ,816,907 2,966,245,411 (617,927,753) 2,348,317,658 The Group reviews its geographical segments on the basis of net sales, cost of sales, gross profit, purchases of tangible fixed and intangible assets and depreciation and amortisation of tangible fixed and intangible assets. Other income statement items are not allocated to segments. 40

43 2012 Annual Report NOTE 6 - CASH AND CASH EQUIVALENTS 31 December December 2011 Cash 39,333 44,951 Demand deposits 29,785,175 12,390,060 Time deposits 304,418, ,414, ,243, ,849,993 Time deposits Currency Interest rate (%) Maturity 31 December 2012 USD 3,25-3,50 January ,760,063 EUR 3,10-4,10 January ,156,343 TRY 6,25-8,75 January ,502, ,418,918 Currency Interest rate (%) Maturity 31 December 2011 USD 4,40-4,85 January ,949,542 EUR 4,00-4,70 January ,762,277 TRY 6,25 January ,703, ,414,982 Nature and the level of risk related to cash and cash equivalents are explained in Note 38. Cash and cash equivalents as of 31 December 2012 and 2011 presented in the consolidated statements of cash flows are as follows: 31 December December 2011 Cash and cash equivalents 334,243, ,849,993 Less: interest accrual (509,901) (658,726) 333,733, ,191,267 NOTE 7 - FINANCIAL INVESTMENTS 31 December December 2011 Available for sale financial assets a) Listed financial investments 109,754,941 - b) Unlisted financial investments 56,557,189 97,697, ,312,130 97,697,448 a) Listed financial investments Share % 31 December 2012 Share % 31 December 2011 Soda Sanayii A.fi (*) ,754, b) Unlisted financial investments Share % 31 December 2012 Share % 31 December 2011 Cam Elyaf San. A.fi ,078, ,078,911 Paflabahçe Cam San. ve Tic. A.fi ,424, ,424,425 Camifl Madencilik A.fi. < < Saint Gobain Glass Egypt S.A.E.(**) ,194,062 stanbul Porselen San. A.fi Bünsa Döküm Makine Alet Sanayi A.fi , ,048 Impairment (9,155,245) (209,048) 56,557,189 97,697,448 (*) Camifl Elektrik Üretim A.fi ( Çamifl Elektrik ), one of the associates of the Group which the Group holds 34.43% of its shares, is accounted by equity accounting method in the consoliated financial statements (Note 16). Mersin Co-generation Plant Operation included in the assets of Camifl Elektrik was transferred to Soda Sanayi A.fi., one of the related parties of the Group (subsidiary of the parent company of the Group), via partial spin-off on 28 March There has been a decrease in the net assets of Camifl Elektrik Üretim A.fi and decrease in the investment of the Group resulted by this spin- off. The decrease has been compensated by the transfer of 39,518,855 shares of Soda Sanayi A.fi. with a fair value of TRY138,315,993 to the Group as of the date of spin-off. Number of shares transferred has been determined based on the fair value of the assets transferred due to partial spin- off. A financial asset accounted at fair value has been recognised in exchange of an asset previously accounted by equity accounting method rather than its fair value in the consolidated financial statements. (**) With an additional share purchase on 4 October 2012, the Group gained significant influence over this financial asset. Accordingly the Group began to account for this investment using the equity method (Note 16). 41

44 1 January - 1 January - 31 December December January 97,697,448 84,699,428 Non cash capital increase of financial assets 6,022,614 - Acquisition of additional shares of financial assets 19,182,399 9,649,541 The effect of the restructuring of the Group 138,315,993 Changes in fair value financial assets (34,781,261) - Transfers from investments valued using the equity method (Note 16) (50,417,968) - Provision for impairment for Cam Elyaf San.A.fi. (8,946,200) - Foreign currency translation differences (760,895) 3,348, December 166,312,130 97,697,448 NOTE 8 - FINANCIAL LIABILITIES Short-term and long-term bank loans are summarized below: 31 December December 2011 Short term borrowings 3,016,709 - Current portion of long term borrowings 87,525,343 77,831,792 Liabilities for financial leasing 1,875,543 - Total short term financial liabilities 92,417,595 77,831,792 Non current portion of long term borrowings 296,287, ,588,916 Non current portion of financial leasing 7,789,227 - Total long term financial liabilities 304,076, ,588,916 Total financial liabilities 396,493, ,420,708 Repricing schedule of borrowings 31 December December months and shorter 321,641, ,456, months 26, , years 65,160,399 11,619, ,829, ,420,708 Financial leasing debt amounting to TRY 9,664,770 has been paid by equal instalment. The impact of discounting is not significant due to given interest rates for short-term loans and their carrying values approximate their fair values. The fair values are determined using the weighted average effective annual interest rates. The long-term financial liabilities are generally subject to repricing within three and six month periods and a large amount of those liabilities consists of foreign currency denominated loans. Therefore, it is expected that the carrying value of the financial liabilities that are calculated by effective interest rate method approximate to their fair values. 31 December 2012 Currency Weighted average interest rate (%) Short - term Long - term USD Libor ,071,770 59,171,175 EUR Euribor ,025, ,115,948 TRY and other - 8,319,894 7,789,227 92,417, ,076, December 2011 Currency Weighted average interest rate (%) Short - term Long - term USD Libor ,544,553 86,284,952 EUR Eurolibor ,287, ,303,964 77,831, ,588,916 42

45 2012 Annual Report The main shareholder of the Group, Türkiye fiifle ve Cam Fabrikalar A.fi. and its subsidiaries are collectively guarantors for the Group s bank loans. The redemption schedule of financial liabilities is as follows: 31 December December 2011 Up to 1 year 92,417,595 77,831,792 Between 1-2 years 100,242,198 86,639,962 Between 2-3 years 83,837,085 73,800,960 Between 3-4 years 48,515,817 57,305,310 Exceed 4 years 71,481,250 19,842, ,493, ,420,708 NOTE 9 - OTHER FINANCIAL LIABILITIES None. NOTE 10 - TRADE RECEIVABLES AND PAYABLES Trade receivables Short-term trade receivables 31 December December 2011 Trade receivables 322,567, ,855,145 Notes receivables and cheques received 3,902,230 3,457,085 Receivables from related parties (Note 37) 2,437,209 - Allowance for doubtful receivables (-) (3,218,261) (2,792,071) 325,688, ,520,159 Domestic sales term for flat glass are either in advance or average 90 days maturity. Average sales term for flat glass products is 90 days (2011: 115 days). For overdue payments, 1.5% interest is charged on a monthly basis (2011:1.5 %). Average sales term for auto glass and glassware products is 45 days (2011: 45 days). Export sales are either in advance or with 60 days maturity. The Group has allocated allowance for its doubtful receivables. Allowance for doubtful receivables is determined by referring to past default experience. In determining the recoverability of a trade receivable, the Group considers any change in the credit quality of the trade receivable from the date credit was initially granted to the reporting date. The Group has no significant concentration of credit risk, with exposure spread over a large number of counterparties and customers. Accordingly, the management believes that no further credit provision is required in excess of the allowance for doubtful debts. The movement in the allowance for doubtful receivable is as follows: 1 January - 1 January - 31 December December January 2,792,071 3,085,371 Additions 1,491,099 1,127,135 Collections (1,064,909) (1,420,435) 31 December 3,218,261 2,792,071 Nature and level of risks related to trade receivables are explained in Note 38. Trade payables Short term trade payables 31 December December 2011 Trade payables 92,383,225 81,384,490 Trade payables to related parties (Note 37) 23,057,214 18,517, ,440,439 99,902,410 Average credit term for purchases of goods is one month. The Group has financial risk management policies to ensure that all liabilities are paid within credit terms. 43

46 NOTE 11 - OTHER RECEIVABLES AND PAYABLES Other receivables 31 December December 2011 Other receivables from related parties (Note 37) 51,560,080 38,505,313 Deposit and guarantees given 485, ,964 Receivables from personnel 291, ,171 Other 1,446,886 1,755,375 53,783,517 40,860,823 Long- term receivables 31 December December 2011 Deposits and guarantees given 845, ,916 Other current liabilities 31 December December 2011 Advances received 8,518,954 7,866,768 Payables to personnel 3,389,153 5,855,123 Social security premiums payable 3,372,928 3,692,052 Taxes and funds payable 3,276,725 3,596,512 Other payables to related parties (Note 37) 2,236,241 21,160,682 Deposits and guarantees received 237, ,319 Other (*) 3,665, ,014 24,696,466 43,036,470 (*)The Group has acquired 90% of the shares of Glass Corp S.A. amounting to EUR 3,098,613 determined on a temporary basis. The Group has paid a portion corresponding to EUR2,050,840 and the remaining balance of EUR1,047,773 (TRY2,314,592) is accounted under current liabilities as at 31 December 2012 (Note 3). Other non-current liabilities 31 December December 2011 Deposits and guarantees received 217,940 58,817 NOTE 12 - RECEIVABLES AND PAYABLES FROM FINANCE SECTOR OPERATIONS None. NOTE 13 - INVENTORIES 31 December December 2011 Raw materials 58,042,346 51,953,636 Work in process 23,638,793 21,071,128 Finished goods 128,886, ,715,394 Operating supplies 34,460,253 34,305,691 Trade goods 6,866,731 7,733,653 Provision for diminution in the value of inventories (-) (4,102,536) (4,324,385) 247,791, ,455,117 Movement of the allowance for impairment on inventory is as follows: 31 December December 2011 Opening balance as of 1 January (4,324,385) (2,215,932) Charge for the year (1,685,325) (3,414,420) Provision released during the year 1,907,174 1,305,967 Closing balance as of 31 December (4,102,536) (4,324,385) NOTE 14 - BIOLOGICAL ASSETS None. NOTE 15 - CONSTRUCTION CONTRACTS None. 44

47 2012 Annual Report NOTE 16 - ASSOCIATES Net assets of associates accounted for under the equity method which are included in the accompanying balance sheets are as follows: Share % 31 December 2012 Share % 31 December 2011 Çay rova Cam San. A.fi ,475, ,226,993 Camifl Elektrik A.fi ,739, ,410,674 Saint Gobain Glass Egypt ,354, ,569,473 67,637,667 Summarised financial statements of the Group s associates accounted under the equity method is as follows: Çay rova Cam San. A.fi. Camifl Elektrik A.fi. Saint Gobain Egypt 31 December December December December December December 2011 Total Assets Total Liabilities Net Assets Group's share's at net assets Çay rova Cam San. A.fi. Camifl Elektrik A.fi. Saint Gobain Egypt 1 January- 1 January- 1 January- 1 January- 1 January- 1 January- 31 December December December December December December 2011 Period Profit / Loss ( ) - Group's share at Profit / Loss ( ) - On 4 October 2012, the Group gained significant influence over Saint Gobain Egypt through the acquisition of additional shares from that date on, it has reclassified this assets as an associate and accounted for it using the equity method. The Group s share in the associate s profit covers the period from the date of purchase until the year end. The Company acquired the related additional shares based on the strategic partnership made with Saint Gobain in Egypt and Russia with the purpose of gaining an expanding market share in the Middle East. The net asset amounting to TRY 49,354,382 including goodwill was accounted for in the financial statements as a result of this acquisition. Movement of the associates is as follows: 1 January 1 January- 31 December December 2011 Opening Balance 67,637,667 71,231,184 Effect of reorganization of the Group (*) (25,616,500) - Associates' profit / (loss) share 3,523,100 (791,487) Sales of available-for-sale investments held by associates Investments in associates are classified as financial assets (Note 7) 50,417,968 - The effect of the increase in fair value of investment associates (**) 53,974,897 - Increase in fair value of available-for-sale financial assets of associates 2,245,042 - Foreign currency translation differences (2,612,701) - Dividend income from associates - (2,802,030) Closing balance 149,569,473 67,637,667 (*) Effects of the reorganisation of the Group include the decrease in net assets of Camifl Elektrik Üretim A.fi., one of the Group's associates, related to the transfer of Mersin Co-generation Plant Operation to Soda Sanayi A.fi., one of the related parties of the Group (subsidiary of the parent company of the Group), via partial spin-off. The decrease in the net assets of the associate has been compensated through transferring the shares of Soda Sanayi A.fi. with a fair value of TRY138,315,993 to the Group (Note 7). (**) The Group s associate Çay rova Sanayi A.fi. has classified Çay rova property located in Gebze, Kocaeli, as investment property due to the termination in operational use as of 31 December The fair value of the property has been determined as TRY 217,.707,.575, as of 31 December A revaluation gain, relating to the Group s share, amounting to TRY 53,974,897, which also includes deferred tax and has been determined as a result of valuation reports of two separate CMB licensed valuation firms, is accounted for under Revaluation Funds (Note 27). The fair value of the investment property of Çay rova is determined based on the valuations made by two different valuation firms holding licenses and are authorized by CMB. The valuation firms have the required professional experience and up-to-date information concerning the classification and location of the investment property. The fair value of investment property has been calculated by the arithmetical average of the amounts stated in the valuation reports. The fair value of investment property was determined based on recent market conditions, using the Benchmark Method in the first report whereas it has been determined by using the Replacement Cost Method in the second report. The assumptions that are expected to impact the value of investment property in the Benchmark Method are convenience of transportation facilities, connection to motorways and access roads, the surrounding industrial structuring, the industrial potential of the area and available zoning status. Three different benchmarks were evaluated. The assumptions that were used to determine the fair value of the investment property in the replacement cost method were the value of the land and the value of constructional investments on the land. The real unit costs that are subject to assessment of constructional investments have been determined by considering the construction methods and their available physical conditions. NOTE 17 - INVESTMENT PROPERTIES None. 45

48 NOTE 18 - PROPERTY, PLANT AND EQUIPMEN Land Machinery Furniture Other Leasehold improve- and and tangible improve- Construction Cost Land ments Buildings equipment Vehicles fixture assets ments in progress Total 1 January ,177,672 64,046, ,699,583 1,451,240,622 20,849,578 98,687,695 12,766,746 4,190,739 44,742,888 2,139,402,172 Translation differences 68,730 (486,016) (2,432,412) (7,608,084) (201,331) (719,575) (4,698) - 788,168 (10,595,218) The Effect of acquisition 277,371-1,460,372 6,780, ,515 43,474 11, ,885,072 of subsidiary Additions 2,998,487 87,675 7,876,790 6,477,663 3,257,342 4,740,950 50,038 1, ,528, ,018,981 Disposals - (32,033) (169,875) (9,660,552) (10,516,642) (4,900,716) (1,178,532) - (145,177) (26,603,527) Transfers 1,400, ,205 9,237, ,326,301 2,140,182 3,867,609 2,382,482 - (126,080,565) - 31 December ,922,260 64,342, ,672,244 1,553,556,792 15,840, ,719,437 14,027,534 4,192, ,833,981 2,476,107,480 Accumulated depreciation 1 January (28,638,146) (99,420,118) (943,582,419) (15,307,109) (82,380,923) (9,221,727) (4,125,241) -(1,182,675,683) Translation differences - 63, ,882 3,476, , ,121 3, ,648,460 The Effect of acquisition - - (83,024) (1,917,704) (177,230) - (10,688) - - (2,228,646) of subsidiary Additions - (2,630,568) (9,776,663) (103,092,982) (1,627,825) (6,695,111) (1,345,323) (28,332) - (125,196,804) Disposals - 8,346-7,870,908 5,406,623 3,612, , ,435, December (31,196,481) (109,001,923) (1,037,286,071) (11,258,281) (85,083,394) (10,037,106) (4,153,573) -(1,288,016,829) Net book value as at 31 December ,922,260 33,145, ,670, ,270,721 4,582,363 16,636,043 3,990,428 38, ,833,981 1,188,090,651 Land Machinery Furniture Other Leasehold improve- and and tangible improve- Construction Cost Land ments Buildings equipment Vehicles fixture assets ments in progress Total 1 January ,771,767 57,826, ,311,531 1,347,765,439 20,617,976 91,512,475 10,485,047 4,189,989 49,773,296 1,995,253,592 Translation differences 124,688 2,003,284 11,753,475 33,477,614 3,040,315 3,079,442 12,690-2,694,593 56,186,101 Additions - 449,376 2,970 2,415, ,417 2,848,702 10, ,143,414 96,237,188 Disposals (265) (10,122) - (1,719,785) (3,370,991) (1,588,333) (240,917) - (1,344,296) (8,274,709) Transfers 1,281,482 3,778,039 16,631,607 69,301, ,861 2,835,409 2,499,900 - (96,524,119) - 31 December ,177,672 64,046, ,699,583 1,451,240,622 20,849,578 98,687,695 12,766,746 4,190,739 44,742,888 2,139,402,172 Accumulated depreciation 1 January (25,984,088) (89,060,839) (822,644,854) (13,577,324) (74,168,407) (8,451,275) (3,973,459) -(1,037,860,246) Translation differences - (267,174) (1,184,627) (14,999,361) (1,493,854) (2,147,552) (17,183) - - (20,109,751) Additions - (2,388,768) (9,174,652) (106,378,463) (2,562,711) (6,652,493) (880,170) (151,782) - (128,189,039) Disposals - 1, ,259 2,326, , , ,483, December (28,638,146) (99,420,118) (943,582,419) (15,307,109) (82,380,923) (9,221,727) (4,125,241) -(1,182,675,683) Net book value as at 31 December ,177,672 35,408, ,279, ,658,203 5,542,469 16,306,772 3,545,019 65,498 44,742, ,726,489 Depreciation expense of TRY 110,239,133 (2011: TRY 110,036,756) has been allocated to cost of goods sold, TRY 350,722 (2011: TRY 761,601) to cost of services rendered, TRY 14,606,949 (2011: TRY 17,390,682) to operating expenses. 46

49 2012 Annual Report NOTE 19 - INTANGIBLE ASSETS Other intangible Cost Rights assets Total 1 January ,369, ,648 6,795,733 Translation differences 143,471 (34,969) 108,502 Additions 35, , ,558 Disposals Effect of acquisition of subsidiary 201 2,186 2, December ,548,570 1,179,610 7,728,180 Accumulated amortization 1 January 2012 (5,420,916) (398,574) (5,819,490) Translation differences (13) 10,461 10,448 Additions (430,934) (211,182) (642,116) Disposals (201) (2,186) (2,387) 31 December 2012 (5,852,064) (601,481) (6,453,545) Net book value as at 31 December , ,129 1,274,635 Other intangible Cost Rights assets Total 1 January ,752, ,988 8,110,331 Translation differences - 68,660 68,660 Additions 362, ,813 Disposals (1,746,071) - (1,746,071) 31 December ,369, ,648 6,795,733 Accumulated amortization 1 January 2011 (5,081,201) (336,599) (5,417,800) Translation differences - (31,204) (31,204) Additions (465,820) (30,771) (496,591) Disposals 126, , December 2011 (5,420,916) (398,574) (5,819,490) Net book value as at 31 December ,169 28, ,243 Allocation of amortization expenses is as follows: TRY 646,116 (2011: TRY 469,591) included in operating expense. Rights Other intangible assets Useful life 3-5 years 3-5 years NOTE 20 - GOODWILL 31 December 31 December Opening balance as of 1 December Occurred during the period 12,601,517 - Foreign currency translation differences 971,829 - Closing balance as of 31 December ,573,346 - NOTE 21 - GOVERNMENT GRANTS AND INCENTIVES None. 47

50 NOTE 22 - PROVISIONS, CONTINGENT ASSETS AND LIABILITIES Provisions 31 December December 2011 Short term provisions Provision for legal exposures (*) 718, ,836 Employee related provisions 74,922 - Bonus provisions - 340,125 Royalty provision - - Other - 237, ,589 1,209,765 (*) As of 31 December 2012, Group management determined a provision of TRY 718,667(2011: TRY 631,836,) which is the possible cash outflow related to lawsuits against the Group based on opinions of legal counsels. The related provision expense is included in general administrative expenses. NOTE 23 - COMMITMENTS Guarantee, Pledge, Mortgage ( GPM ) The Guarantee, pledge, mortgage ( GPM ) position of the Group as of 31 December 2012and 31 December 2011is as follows: 31 December December 2011 Collaterals given 515,370, ,309,257 Letters of guarantee given 12,339,818 12,339,818 Other 117, , ,828, ,766,476 48

51 2012 Annual Report 31 December December 2011 TRY USD EUR Other TRY USD EUR Other A.Gpms given on behalf of its legal entity (*) 78,035,587 15,680,000 16,000,000 12,457,219 98,355,659 19,600,000 20,000,000 12,557,219 B.GPMs given on behalf of consolidated subsidiaries 231,642,450-98,500, ,473,301-70,166,667 - C. GPMs given on behalf of other third party D. Other GPMs 218,149,994 77,555,556 33,975, ,937,516 86,444,444 42,823, i. Total amount of GPM on behalf of the parent 218,149,994 77,555,556 33,975, ,937,516 86,444,444 42,823,719 - ii. Total amount of GPM on behalf of other group companies not covered in B and C iii. Total amount of GPM on behalf of other third parties not covered in C Total 527,828,031 93,235, ,475,193 12,457, ,766, ,044, ,990,386 12,457,219 (*) Includes GPM s given by the Group s subsidiaries and joint ventures on behalf of themselves. (**)Includes GPM s given in connection with the bank borrowings of the parent and the subsidiaries of the Group. Proportion of GPMs given to the Group s equity as at 31 December 2012 is 11% (31 December 2011:15). 49

52 NOTE 24 - EMPLOYEE BENEFITS 31 December December 2011 Short-term benefits to employees Unused vacation liability 1,075,861 1,359,978 1,075,861 1,359,978 Provision for employment termination benefits Under the Turkish Labor Law, the Group is required to pay employment termination benefits to each employee who has qualified for such benefits as the employment ended. Also, employees who are entitled to a retirement are required to be paid retirement pay in accordance with Law No: 2242 dated 6 March 1981 and No: 4447 dated 25 August 1999 and the amended Article 60 of the existing Social Insurance Code No: 506. Some transition provisions related to the pre-retirement service term were excluded from the law since the related law was changed as of 23 May The amount payable consists of one month s salary limited to a maximum of TRY 3,129,25 for each period of service as of 31 December 2012 (31 December 2011: TRY 2,805,04). The liability of employment termination benefits is not subject to any funding as there is no obligation. The provision is calculated by estimating the present value of the future probable obligation of the Group arising from the retirement of the employees. Revised IAS 19 Employee Benefits requires actuarial valuation methods to be developed to estimate the Group s obligation under the defined benefit plans. Accordingly, the following actuarial assumptions are used in the calculation of the total liability: The principal assumption is that maximum liability for each year of service will increase in line with inflation. Thus, the discount rate applied represents the expected real rate after adjusting for the anticipated effects of future inflation. Consequently, in the accompanying consolidated financial statements as of 31 December 2012, the provision is calculated by estimating the present value of the future probable obligation of the Group arising from the retirement of the employees. Provisions at the balance sheet date were calculated by assuming an annual inflation rate of 5.00% (31 December 2011: 5.00%) and a discount rate of 8.37% (31 December 2011: 9.60%), the real discount rate is approximately 3.21% (31 December 2011:4.38%). The anticipated rate of forfeitures is also considered. The probability of employees likely to obtain the termination benefit is estimated to be 98.94% (31 December 2011: 95.65%) 31 December December 2011 Long-term benefits to employees Employment termination benefit 47,103,496 31,512,748 47,103,496 31,512,748 The movement of the provision for employment termination benefits is as follows: 1 January - 1 January - 31 December December January 31,512,748 30,222,168 Service cost 14,320,328 2,384,457 Interest cost 1,566, ,446 Actuarial loss 4,075,147 1,917,092 Termination benefits paid (4,371,128) (3,845,415) 31 December 47,103,496 31,512,748 NOTE 25 - PENSION PLANS None. NOTE 26 - OTHER ASSETS AND LIABILITIES Other current assets 31 December December 2011 Other VAT 32,876,016 12,492,373 Advances given 12,695,874 9,910,109 Prepaid expenses 876, ,162 Other 2,632, ,115 49,081,139 23,345,759 Other non - current assets 31 December December 2011 Advances given for property, plant and equipment 86,945,529 29,515,179 Prepaid expenses 6,490,498 6,742,486 93,436,027 36,257,665 50

53 2012 Annual Report Other current liabilities 31 December December 2011 Deferred revenue 2,194,373 5,120,806 Expense accruals 191, ,000 Other 50,643 1,498 2,436,338 5,622,304 Other non - current liabilities 31 December December 2011 Deferred revenue 1,252, ,713 1,252, ,713 NOTE 27 - EQUITY a) Capital / Treasury shares The approved and paid-in capital of the Company consists of 69,368,000,000 (2011: 60,320,000,000) shares issued on bearer with a nominal value of Kr 0.1 (Kr one) each. 31 December December 2011 Registered capital ceiling (*) 1,000,000,000 1,000,000,000 Shareholder structure as of 31 December 2012and 31 December 2011 is as follows: Shareholder % 31 December 2012 % 31 December 2011 fiiflecam Holding ,305, ,526,929 Publicly traded ,140, ,861,668 fiiflecam group companies ,782, ,419,400 IFC , ,003 Nominal capital (**) ,680, ,200,000 Inflation adjustment 5,576,528 5,576,528 Share capital 699,256, ,776,528 (*) Registered capital has been increased to TRY in the general assembly held on 22 January (**) Nominal capital has been increased to TRY 693,680,000 through non- cash increase from retained earnings. b) Revaluation funds Revaluation funds 31 December December 2011 Change in value of available- for- sale financial assets, net 73,464,250 42,277 Investment property revaluation difference 53,974, ,439,148 42,277 Revaluation fund related to financial assets The revaluation fund related to financial assets arises from the measurement of available-for-sale financial assets at their fair value. In case of disposal of assets carried at fair value, the cumulative gain or loss related to that asset previously recognized in equity is included in the profit or loss for the period. Gains and losses arising from the changes in fair value are recognised directly in equity, until the asset is determined to be impaired, at which time the cumulative gain or loss previously recognized in equity is included in the profit or loss for the period. Gains and losses arising from changes in fair value of Soda Sanayi A.fi. shares transferred to the Group regarding the partial spin off Camifl Elektrik Üretim A.fi., one of the Group's associates, has been accounted under revaluation funds. c) Restricted reserves Restricted reserves 31 December December 2011 Legal reserves 109,606,914 95,075,508 Legal reserves consist of first and second legal reserves, calculated in accordance with the Turkish Commercial Code. The first legal reserve is calculated as 5% of the financial statutory profits per annum until the total reserve reaches 20% of the historical paid-in share capital. The second legal reserve is calculated after the first legal reserve and dividends, at the rate of 10% per annum of all cash dividend distributions; however, holding companies are not subject to this application. d) Retained earnings / Accumulated deficits Prior periods income of the Group amounting to TRY 839,433,472 is classified to retained earnings in the consolidated balance sheet as at 31 December 2012 (31 December 2011: TRY720,123,839 31). 51

54 Profit Distribution In accordance with the Capital Market Board s ( CMB ) decision dated 27 January 2010, concerning allocation basis of profit from operations of 2009, minimum profit distribution obligation will not be applied for the corporations in the traded stock exchange (2008: 20%). According to the Board s decision and Communiqué No: IV-27 issued by CMB regarding allocation basis of profit of publicly owned companies, the distribution of the relevant amount may be realized as cash, as bonus shares, partly as cash and bonus shares or the relevant amount can be retained within the company. In addition, according to mentioned Board Decision, it is stipulated that companies which have the obligation to prepare consolidated financial statements, calculate the net distributable profit amount by taking into account the net profits for the period in the consolidated financial statements that will be prepared and announced to the public in accordance with the Communiqué IX No: 29 providing the profits can be met by the sources in their statutory records. Reserves subject to distribution of dividend As of the balance sheet date, the profit available for distribution in company s statutory registers and other resources subject to distribution of profit are as follow. 31 December December 2011 Extraordinary reserves 331,308, ,331,580 Profit available for distribution 131,311, ,488,713 NOTE 28 - SALES AND COST OF SALES 1 January - 1 January - Net Sales 31 December December 2011 Sales revenue 1,340,220,088 1,327,784,441 Sales returns (6,110,987) (4,418,922) Sales discounts (83,682,575) (66,839,766) Other discounts (1,196,100) (1,057,720) 1,249,230,426 1,255,468,033 1 January - 1 January - Cost of sales 31 December December 2011 Raw materials used (581,879,569) (537,357,640) Employee benefits (68,000,531) (63,873,297) Production overheads (145,469,874) (144,571,638) Depreciation (110,239,133) (110,036,756) Change in work in process 2,444,213 (6,425,874) Change in finished goods (5,992,160) 60,520,071 (909,137,054) (801,745,134) Cost of trade goods sold (6,389,148) (351,937) Cost of services rendered (3,647,279) (6,825,848) (919,173,481) (808,922,919) NOTE 29 - RESEARCH AND DEVELOPMENT EXPENSES, MARKETING, SELLING AND DISTRIBUTION EXPENSES, GENERAL ADMINISTRATIVE EXPENSES 1 January - 1 January - 31 December December 2011 Research and development expenses (11,123,215) (11,049,492) Marketing, selling and distribution expenses (142,441,326) (127,827,558) General administrative expenses (100,142,268) (80,552,495) (253,706,809) (219,429,545) 52

55 2012 Annual Report NOTE 30 - EXPENSES BY NATURE 1 January - 1 January - 31 December December 2011 Payroll Expenses (77,273,640) (55,942,745) Transportation expenses (61,162,329) (62,795,691) Depreciation expenses (15,249,065) (17,390,682) Holding service fees (14,887,855) (5,966,331) Outsourcing expenses (11,587,623) (9,529,676) Insurance expenses (9,767,197) (8,784,186) Holding research and development fees (9,742,794) (9,548,195) Rent expenses (7,475,384) (5,937,926) Promotion expenses (6,718,374) (2,651,622) Electricity expenses (5,280,252) (3,997,420) Commission expenses (5,189,497) (6,425,244) Indirect material expenses (4,935,829) (2,157,683) Loading, dispatching and customs expenses (4,799,994) (6,293,658) Tax expenses (3,286,674) (2,754,886) Technical Consultancy (3,105,924) (3,569,316) Exhibition expenses (2,268,664) (1,521,754) Maintenance expenses (2,114,437) (3,143,634) Fuel expenses (1,483,310) (1,695,651) Cleaning expenses (1,266,344) (2,026,937) Communication expenses (1,175,108) (1,326,076) Representation expenses ( 978,255) (445,752) General administrative expenses (3,958,261) (5,524,480) (253,706,809) (219,429,545) NOTE 31 - OTHER OPERATING INCOME AND EXPENSES 1 January - 1 January - 31 December December 2011 Gain on sales of mould and material 5,123,147 1,495,662 Gain on sales of silver sludge 2,369, ,708 Gain on sales of property, plant and equipment 1,689,877 2,571,039 Service charges 1,629,704 1,471,822 Commission income 1,409,893 1,798,521 Rent income 1,377,346 1,112,153 Insurance compensation income 1,050,768 2,049,287 Income from distribution rights of tempered glass 515, ,460 Other 4,329,930 1,462,560 19,494,716 13,252,212 1 January - 1 January - 31 December December 2011 Provision for impairment of financial assets (6,701,158) - Loss on sale of property, plant and equipment (4,635,785) - Provision expenses (1,597,610) (1,119,727) Commission expenses (154,900) (5,438,618) Other (2,309,813) (1,057,123) (15,399,266) (7,615,468) 53

56 NOTE 32 - FINANCIAL INCOME 1 January - 1 January - 31 December December 2011 Foreign exchange gains 147,679, ,656,255 Interest income - Interest income from time deposits 9,362,405 15,444,953 - Interest income from related parties 12,169,536 5,284,546 - Interest income on trade receivables 5,278,941 4,951,918 Dividend income 2,577, ,484 Income from non cash capital increase in financial assets 6,022,614 - Other finance income 566, ,657, ,712,156 NOTE 33 - FINANCIAL EXPENSES 1 January - 1 January - 31 December December 2011 Foreign exchange losses (157,533,008) (132,078,102) Interest expense (19,201,137) (15,583,558) Credit finance charges - (1,241,173) Loss on sales of available for sale financial assets - - (176,734,145) (148,902,833) NOTE 34 - ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS None. NOTE 35 - TAX ASSETS AND LIABILITIES Tax provisions as at 31 December 2012 and 31 December 2011 are as follows: Current tax liability: 31 December December 2011 Current corporate tax provision 21,575,542 52,639,119 Less: Prepaid taxes and funds (17,798,647) (39,346,276) 3,776,895 13,292,843 1 January - 1 January - 31 December December 2011 Corporate tax expense (21,575,542) (52,639,119) Deferred tax income 11,717,790 4,621,596 Tax expense in the income statement (9,857,752) (48,017,523) Corporate Tax The Group is subject to Turkish corporate taxes. Tax legislation in Turkey does not permit a parent company and its subsidiaries to file a consolidated tax return. Therefore, provisions for taxes as reflected in the accompanying consolidated financial statements are calculated on a separate-entity basis. Corporate tax is applied on taxable corporate income, which is calculated from the statutory accounting profit by adding back nondeductible expenses, and by deducting the revenues exempted from tax, non taxable revenues and other discounts (if any previous year losses, if preferred investment allowances and also R&D centre incentive) are deducted. In Turkey, the corporate tax rate applied in 2012 is 20% (2011: 20%) In Turkey, advance tax returns are filed on a quarterly basis. 20% of temporary tax rate is applied during the taxation of corporate income (2011: 20 %) Losses can be carried forward for offset against future taxable income for up to 5 years (Russia: ten years). Losses cannot be carried back for offset against profits from prior periods. In Turkey, there is no procedure for a final and definitive agreement on tax assessments. Companies file their tax returns between 1-25 April following the close of the accounting year to which they relate (Companies with special accounting periods file their tax returns between 1-25 of the fourth month subsequent to the fiscal year end). Tax authorities may, however, examine such returns and the underlying accounting records and may revise assessments within five years. Subsidiaries in Russia are subject to 15.5% corporate tax rate (2011: 15.5). Subsidiary in Romania is subject to 15% tax rate. 54

57 2012 Annual Report Trakya Glass Bulgaria EAD, a joint venture operating in Bulgaria, is subject to 10% corporate tax according to Bulgarian legislation. However, Trakya Glass Logistics EAD has a tax exemption up to 50% of an capital expenditure and used this tax exemption in years 2012 and Income Withholding Tax In addition to corporate taxes, companies should also calculate income withholding taxes and funds surcharge on any dividends distributed, except for companies receiving dividends who are resident companies in Turkey and Turkish branches of foreign companies. This rate was changed to 15% for all Companies as of 23 July Undistributed dividends incorporated in share capital are not subject to income withholding tax. A tax charge of 19.8% applies to investment incentives that were utilized via investment incentive certificates that were obtained before 24 April After this date, 40% of investment expenses incurred without an incentive certificate can be deducted from taxable revenue. There is no tax charge for capital expenditures qualifying for government incentive. Investment Allowance Investment allowances are not applicable after 1 January If companies taxable incomes are not sufficient, the amount of unused investment allowance as of 31 December 2005 and the incentive allowances incurred from 1 January 2006 onwards, can be transferred to the following years in order to be deducted from the taxable revenues of the following years. Law No.6009 published on 1 August 2010 allows for unused investment allowances to be used in future periods without limitation. A 20% corporate tax is calculated on earnings after deducting investment incentives. The arrangements made with the Law No.6009 came into force in 1 August 2010 to be applied on income for the year The investment incentive that is utilized by the Company in 2012 is TRY 955,242 and the investment incentive eligible for utilization in the following years is TRY 71,933,825. Deferred tax assets and liabilities The Group recognizes deferred tax assets and liabilities based upon the temporary differences between financial statements as reported in accordance with CMB and its tax base of statutory financial statements. These differences usually result in the recognition of revenue and expense items in different periods for CMB and statutory tax purposes. Turkish tax legislation does not permit a parent company and its subsidiary to file a consolidated tax return. Therefore, provisions for taxes, as reflected in the accompanying consolidated financial statements, are calculated on a separate-entity basis. In this respect, deferred tax assets and liabilities of the consolidated entities in the accompanying consolidated financial statements are not offset. 31 December December 2011 Deferred tax assets 25,756,145 15,456,379 Deferred tax liabilities (45,988,245) (42,749,521) Deferred tax liabilities (net) (20,232,100) (27,293,142) Cumulative temporary differences 31 December December 2011 Useful life and valuation differences on tangible and intangible assets 207,557, ,920,125 Provision for employee termination benefits (47,103,496) (31,512,748) Investment incentives (71,933,825) (28,576,485) Impairment on inventory (1,214,965) (1,311,075) Discount on receivables and payables (1,506,920) (2,971,975) Provision for legal exposures (718,667) (631,836) Doubtful receivables (2,136,820) (1,499,265) Differences in the valuation of financial assets available for sale 93,877,040 - Carry forward tax losses (844,570) - Other income and expense accruals (net) (4,407,150) (8,951,031) 171,568, ,465,710 55

58 Deferred tax (assets) / liabilities 31 December December 2011 Useful life and valuation differences on tangible and intangible assets 41,511,530 42,384,025 Provision for employee termination benefits (9,420,699) (6,302,550) Investment incentives (14,386,765) (5,715,297) Impairment on inventory (242,993) (262,215) Discount on receivables and payables (301,384) (594,395) Provision for legal exposures (143,733) (126,367) Doubtful receivables (427,364) (299,853) Differences in the valuation of financial assets available for sale 4,693,852 - Carry forward tax losses (168,914) - Other income and expense accruals (net) (881,430) (1,790,206) 20,232,100 27,293,142 The movement of the deferred tax liabilities/ (assets) is as follows: 1 January - 1 January - The movement of the deferred tax (assets) / liabilities 31 December December January 27,293,142 31,351,635 Translation differences (37,104) 563,103 Tax effect recognized in equity 4,693,852 Deferred tax income (11,717,790) (4,621,596) 31 December 20,232,100 27,293,142 1 January - 1 January - Reconciliation of taxation 31 December December 2011 Profit before tax 90,891, ,770,149 Effective tax rate 20% 20% Calculated tax 18,178,121 56,754,030 Tax effects of - Non deductible expenses 1,791,507 1,146,785 - Investment incentives (8,671,468) (3,995,589) - Income exempt from taxation (2,213,103) (3,542,631) - Foreign entities subject to different tax rates 772,695 (2,345,072) Income tax expense recognized in the income statement 9,857,752 48,017,523 NOTE 36 - EARNINGS PER SHARE 1 January - 1 January - 31 December December 2011 Net income for the period 72,404, ,321,039 Average number of shares existing through the period (KR 1/Share) 69,368,000,000 69,368,000,000 Earnings per share (per TRY1 share) Comprehensive income attributable to equity holders of parent 185,794, ,127,627 Earnings per share from total comprehensive income ( per TRY1 share)

59 2012 Annual Report NOTE 37 - RELATED PARTY TRANSACTIONS Türkiye fiifle ve Cam Fabrikalar A.fi. is the main shareholder of the Group and Türkiye fl Bankas A.fi. is the ultimate controlling party. All transactions and balances between the Group and its consolidated subsidiaries are eliminated on consolidation and not disclosed in this note. Transactions amongst the Group and other related parties are disclosed below. Deposits held at Türkiye fl Bankas A.fi. 31 December December 2011 Demand deposits 23,862,144 11,731,223 Time deposits 288,880, ,590, ,742, ,322,210 Loans received 31 December December 2011 Türkiye fl Bankas A.fi. - - Through fiiflecam D fl Ticaret - - Through fiiflecam Holding 97,114, ,004,315 97,114, ,004,315 The non-trade receivables and payables of the Group with its related parties consist of financial loans given to and received from Türkiye fiifle ve Cam Fabrikalar A.fi. and its subsidiaries. These non-trade receivables and payables do not have maturities. Interest is accrued using a monthly current account interest rate determined by Türkiye fiifle ve Cam Fabrikalar A.fi. based on money markets. The monthly interest rate used for December 2012 was 0.85% (December 2011: 0.82%) 31 December 2012 Receivables Payables Current Current Balance with related parties Trade Non-Trade Trade Non-Trade Türkiye fiifle ve Cam Fabrikalar A.fi - 39,851,971-1,789,418 Saint Gobain Glass Egypt S.A.E. - 8,690, ,823 fiiflecam D fl Ticaret - - 8,602,448 - Soda Sanayi A.fi ,731,717 - Asmafl A r Sanayi Makinalar A.fi 2,437, Camifl Madencilik A.fi ,438 4,399,105 - Cam Elyaf Sanayii A.fi ,416 - Anadolu Cam Eskiflehir San A.fi - 30, fiiflecam Sigorta Arac l k Hizmetleri A.fi ,169 - Camifl Elektrik Üretim A.fi ,312,155 - Trakya Glass Bulgaria EAD - 374, ,950 - Paflabahçe Cam Sanayi ve Tic A.fi - 418, ,374 - Camifl Egypt Mining Ltd.Co ,053 - Anadolu Cam Yeniflehir A.fi - 63, Paflabahçe Eskiflehir Cam San. Ve Tic.A.fi - 2, fiiflecam Bulgaria Ltd ,301 - Anadolu Cam Sanayi A.fi ,403 - Trakya Cam Investment B.V - 273, Paflabahçe Glass Gmbh ,875 - Anadolu Cam Investment B.V ,274 - Çay rova Cam Sanayii A.fi - 1,607, Other related parties - 59, ,314-2,437,209 51,560,080 23,057,214 2,236,241 57

60 31 December 2011 Receivables Current Payables Current Balance with related parties Non-trade Trade Non-trade Türkiye fiifle ve Cam Fabrikalar A.fi 24,906,252-20,491,024 Saint Gobain Glass Egypt S.A.E. 11,552, Trakya Glass Bulgaria EAD 1,089, Trakya Cam Investment BV 261, Paflabahçe Cam Sanayi ve Tic. A.fi. 229, Camifl Madencilik A.fi. 212,110 5,423,206 - Camifl Elektrik Üretim A.fi. 179,200 2,212,624 - Anadolu Cam Sanayi A.fi. 54, Soda Sanayi A.fi. - 5,731,568 - fiiflecam D fl Ticaret A.fi. - 4,119,368 - fiiflecam Sigorta Arac l k Hizmetleri A.fi ,504 - fiiflecam Bulgaria Ltd ,660 - Other related parties 20, , ,658 38,505,313 18,517,920 21,160,682 1 January - 1 January - Short term compensation to key management personnel 31 December December 2011 Trakya Cam Sanayi A.fi. 4,269,936 2,207,407 Consolidated entities 937, ,513 Total 5,207,346 2,832,920 Key management personnel are composed of top management, members of board of directors, general manager and general manager assistants and factory directors. The Group did not provide key management with post-employment benefits, benefits due to unemployment, share-based payment and other long-term benefits in 2012 and

61 2012 Annual Report 1 January - 31 December 2012 Sales of Raw material Sale of Interest Interest Rent Rent fixed Service Service Commission Transactions with related parties purchases goods income expenses income expense assets fees income expenses Soda Sanayi A.fi. 82,499,579-3, , , Camifl Madencilik A.fi. 51,325,725-5, ,280 58, , ,298 - Camifl Elektrik Üretim A.fi. 13,666,246-15,214 9, ,009 16,561 - fiiflecam Bulgaria Ltd. 14,091, Camifl Egypt Mining Ltd. Co. 8,114, , Paflabahçe Cam Sanayi ve Tic. A.fi. 6,695,174 7,013,864 13,028 20, , ,000-20, ,944 2,843,784 Camifl Ambalaj Sanayii A.fi. 2,145, , Türkiye fiifle ve Cam Fabrikalar A.fi - - 7,462,558 2,867,242-1,062,200-24,850, ,290 fiiflecam D fl Ticaret A.fi ,224,182-82, ,064 Paflabahçe Eskiflehir Cam San.ve Tic.A.fi. 316, ,257 1,355 7, ,478 - Anadolu Cam Yeniflehir San.A.fi , ,808 - Anadolu Cam Sanayi A.fi. 121,644-9,404 7, ,726 - Cam Elyaf Sanayii A.fi ,432 3, Çay rova Cam Sanayii A.fi ,830 19, ,800 - fl GYO OAO Ruscam Kirishi OAO Ruscam Pokrovsky , fl Merkezleri Yönetim ve flletme A.fi Denizli Cam San. Ve Tic. A.fi Paflabahçe Ma azalar A.fi , ,500 18, fl GYO ,073, Anadolu Cam Investment B.V , Asmafl A r Sanayi Makinalar A.fi ,135, flbank Gmbh , Türkiye fl Bankas A.fi - - 9,598, ,976, ,491,303 17,501,335 3,832, ,214 3,375,235 1,135,609 27,513,727 1,850,616 4,768,138 59

62 1 January - 31 December 2011 Sales of Purchases Raw material Sale of Interest Interest Rent Rent fixed of fixed Service Service Commission Transactions with related parties purchases goods income expenses income expense assets assets fees income expenses Soda Sanayi A.fi. 81,733,321-21, , Camifl Madencilik A.fi. 59,004,548-1, , , ,338 - Camifl Elektrik Üretim A.fi. 16,373,753-27, ,656 - fiiflecam Bulgaria Ltd. 15,927, , Camifl Egypt Mining Ltd. Co. 5,233, Paflabahçe Cam Sanayi ve Tic. A.fi.. 5,181,778 7,646,709 37, ,925 28, ,250 1,174,762 - Camifl Ambalaj Sanayii A.fi. 2,778,875-6, , Türkiye fiifle ve Cam Fabrikalar A.fi - - 4,732, , ,921 1,311,895-16,523,919-6,734 fiiflecam D fl Ticaret A.fi ,921,250 3, , ,129,987 Anadolu Cam Yeniflehir San.A.fi. - 19,345 2,071 1, ,374 - Anadolu Cam Sanayi A.fi. 13,032 3,483 5,689 7, , ,939 - Cam Elyaf Sanayii A.fi , fl GYO ,886, Denizli Cam San. Ve Tic. A.fi ,723 1, , Paflabahçe Ma azalar A.fi , Çay rova Cam Sanayii A.fi. - 70,531 71, , , ,000 - Türkiye fl Bankas A.fi ,145,379 14, , ,246, ,661,318 20,058,294 2,125, ,917 3,652,034 1,311,895-16,526,169 1,372,069 1,254,714 60

63 2012 Annual Report NOTE 38 - FINANCIAL RISK MANAGEMENT a) Capital risk management The Group manages its capital to ensure that it will be able to continue as a going concern while maximizing the return to stakeholders through the optimization of the debt and equity balance. The capital structure of the Group consists of debt, which includes the borrowings and other debts disclosed in Note 8 and 10, cash and cash equivalents disclosed in Note 6 and equity attributable to equity holders of the parent, comprising issued capital, reserves and retained earnings as disclosed in Note 27. The Group controls its capital using the net debt / total capital ratio. This ratio is calculated as net debt divided by the total equity amount. Net debt is calculated as its total liability less cash and cash equivalents and other receivables from related parties. Total capital is calculated as the total of equity and net debt. Net debt / total capital ratios as of 31 December 2012 and 31 December 2011are as follows: 31 December December 2011 Total financial liabilities 398,730, ,581,390 Less: cash and cash equivalents and financial assets (385,803,506) (552,355,306) Net debt 12,926,680 (215,773,916) Total equity 2,010,170,358 1,793,698,381 Total capital 1,997,243,678 2,009,472,297 Net debt / total equity ratio 1% (11%) The general strategy of the Group is consistent with previous periods. b) Financial Risk Factors The Group s activities expose it to various financial risks, market risk (including currency risk, fair value interest rate risk, cash flow interest rate risk and price risk), credit risk and liquidity risk. The Group s overall risk management program focuses on the unpredictability of financial markets and seeks to minimize the potential adverse effects over the Group s financial performance. The Group manages its financial instruments centrally in accordance with the Group s risk policies via Financial Transactions Department. The Group s cash inflows and outflows are monitored by the reports prepared on a daily, weekly and monthly basis and compared to the monthly and yearly cash flow budgets. Risk management is carried out by the Risk Management Department, which is independent from steering, under the policies approved by the Board of Directors. The Group s Risk Management Department identifies, evaluates and hedges financial risks in close cooperation with the Group s operating units. The Board of Directors sets out written principles for overall risk management, as well as written policies covering specific areas, such as; foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and nonderivative financial instruments, and investment of excess liquidity. b.1 Credit risk management Receivables Credit risk of financial instruments Trade receivables Other receivables 31 December 2012 Third party Related party Third party Deposits at bank Maximum credit risk as of balance sheet date (*) (A+B+C+D+E) 323,251,671 51,560,080 2,223, ,204,093 - Hedged part of maximum risk with collateral (**) (183,831,365) A. Net book value of financial assets that are neither past due nor impaired 274,293,016 51,560,080 2,223, ,204,093 B. Net book value of financial assets that are renegotiated, otherwise that will be considered as past due or impaired C. Net book value of financial assets that are past due but not impaired 45,740, The part of which is under guarantee with collateral (24,054,844) D. Net book value of impaired assets Past due (gross carrying amount) 3,218, Impairment (-) (3,218,261) The part of net value under guarantee with collateral Not past due (gross carrying amount) Impairment (-) The part of net value under guarantee with collateral E. Off balance sheet items with credit risk (*) Factors that increase credit reliability, such as; guarantees received, are not considered in the calculation. (**) Guarantees are composed of guarantee letters received from customers and mortgages. 61

64 Receivables Credit risk of financial instruments Trade receivables Other receivables 31 December 2011 Third party Related party Third party Deposits at bank Maximum credit risk as of balance sheet date (*) (A+B+C+D+E) 349,520,159 38,505,313 2,355, ,805,042 - Hedged part of maximum risk with collateral (**) (189,659,345) A. Net book value of financial assets that are neither past due nor impaired 325,649,065 38,505,313 2,355, ,805,042 B. Net book value of financial assets that are renegotiated, otherwise that will be considered as past due or impaired C. Net book value of financial assets that are past due but not impaired 23,871, The part of which is under guarantee with collateral (8,591,344) D. Net book value of impaired assets Past due (gross carrying amount) 2,792, Impairment (-) (2,792,071) The part of net value under guarantee with collateral Not past due (gross carrying amount) Impairment (-) The part of net value under guarantee with collateral E. Off balance sheet items with credit risk (*) Factors that increase credit reliability, such as; guarantees received, are not considered in the calculation. (**) Guarantees are composed of guarantee letters received from customers and mortgages. Credit risk refers to the risk that counterparty will default on its contractual obligations. The Group s management mitigates this risk through limitations on the contracts made with counterparties and obtaining sufficient collaterals where appropriate. The Group s credit risks mainly arise from its trade receivables. The Group manages this risk by the credit limits up to the guarantees received from customers. Use of credit limits is monitored by the Group by taking into consideration the customer s financial position, past experiences and other factors and customer s credibility is evaluated on a consistent basis. Trade receivables are evaluated based on the Group s policies and procedures and presented net of doubtful provision in the financial statements accordingly (Note 10). Trade receivables consist of many customers operating in various industries and locations. Credit risk of the receivables from counterparties is evaluated periodically. Aging of overdue receivables which are not subject to impairment is as follows: 31 December December 2011 Overdue 1-30 days 16,717,977 11,923,191 Overdue 1-3 months 17,569,902 6,973,017 Overdue 3-12 months 11,452,515 4,155,829 Overdue by 12 months and above - 819,057 Total overdue receivables 45,740,394 23,871,094 The part under guarantee with collateral (24,054,844) (8,591,344) Collaterals obtained for trade receivables past due but not impaired 31 December December 2011 Letters of guarantee 24,054,844 8,128,863 Mortgages and other guarantees - 462,481 24,054,844 8,591,344 b.2) Liquidity risk management The Group manages its liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities through a constant monitoring forecast and actual cash flows and matching the maturity profile of the financial assets and liabilities. Conservative liquidity risk management requires maintaining adequate reserves in addition to having the ability to utilize adequate level of credit lines and funds as well as closing market positions. Funding risk attributable to the current and future potential borrowing needs is managed by providing continuous access to adequate number of creditors with high quality. 62

65 2012 Annual Report The below table shows the Group s expected maturity for its non-derivative financial liabilities. The tables below have been drawn up based on the undiscounted contractual maturities of the financial assets. Interest to be paid in future on financial liabilities is included in the table below. 31 December 2012 Total cash outflow according to Maturities in accordance contract Less than More than 5 with contract Carrying value (I+II+III+IV) months (I) months (II) 1-5 years (III) years (IV) Non-derivative financial Liabilities Bank borrowings 386,829, ,960,828 15,325,506 83,429, ,071,543 48,134,696 Financial leasing liabilities 9,664,770 9,664,770-1,875,543 7,789,227 - Trade payables 92,383,225 92,521,604 92,297, , Due to related parties 25,293,455 25,293,455 25,293, Other payables 14,159,211 14,159,211 13,941, ,940 - Total liabilities 528,329, ,599, ,857,742 85,528, ,078,710 48,134, December 2011 Total cash outflow according to Maturities in accordance contract Less than More than 5 with contract Carrying value (I+II+III+IV) months (I) months (II) 1-5 years (III) years (IV) Non-derivative financial Liabilities Bank borrowings 315,420, ,376,194 21,385,495 57,042, ,766,909 5,180,835 Trade payables 81,384,490 82,625,662 82,625, Due to related parties 39,678,602 39,678,602 39,678, Other payables 14,067,837 14,067,837 14,009,020-58,817 - Total liabilities 450,551, ,748, ,698,779 57,042, ,825,726 5,180,835 Expected maturities of the non-derivative financial liabilities of the Group are the same as the maturities subject to the agreement. b.3) Market risk management The Group s activities expose it primarily to the financial risks of changes in foreign exchange rates and interest rates. At a Group level, market risk exposures are measured by sensitivity analysis. When compared to prior periods, there has been no change in the Group s exposure to market risks, hedging methods used or the measurement methods used for such risks. b.3.1) Foreign currency risk management Transactions denominated in foreign currencies result in foreign currency risk. The breakdowns of the Group s foreign currency denominated monetary and non-monetary assets and liabilities as of the balance sheet date are as follows: Bulgarian Leva is fixed at EUR. Assets and liabilities of Trakya Glass Bulgaria EAD (except imports and exports) denominated in EUR are not included the table below since the Group is not exposed to foreign currency risk due to these assets and liabilities. 63

66 31 December 2012 TRY equivalent (functional currency) USD EUR Other 1. Trade receivables 60,893,768 10,923,514 15,973,285 3,857,137 2a. Monetary financial assets 274,562, ,376,532 25,178, ,582 2b. Non-monetary financial assets Other CURRENT ASSETS 335,456, ,300,046 41,151,312 4,625, Trade receivables a. Monetary financial assets b. Non-monetary financial assets Other NON-CURRENT ASSETS TOTAL ASSETS 335,456, ,300,046 41,151,312 4,625, Trade payables (15,465,397) (932,760) (5,482,594) (909,243) 11. Financial liabilities (81,088,723) (14,064,720) (23,819,770) - 12a. Other monetary liabilities b. Other non-monetary liabilities CURRENT LIABILITIES (96,554,120) (14,997,480) (29,302,364) (909,243) 14. Trade payables Financial liabilities (144,006,951) (36,260,000) (33,750,000) - 16a. Other monetary liabilities b. Other non-monetary liabilities NON-CURRENT LIABILITIES (144,006,951) (36,260,000) (33,750,000) TOTAL LIABILITIES (240,561,071) (51,257,480) (63,052,364) (909,243) 19. Net foreign currency asset / (liability) position 94,895,650 80,042,566 (21,901,052) 3,716, Net foreign currency position for monetary 94,895,650 80,042,566 (21,901,052) 3,716,476 items (1+2a+5+6a a a) 21. EXPORTS 393,098,061 48,634, ,583,237 14,246, IMPORTS 312,359,263 26,641,069 98,151,749 38,439, December 2011 TRY equivalent (functional currency) USD EUR Other 1. Trade receivables 54,153,267 12,889,832 10,152,247 4,995,602 2a. Monetary financial assets 464,213, ,932,827 71,935,867 3,319,657 2b. Non-monetary financial assets Other CURRENT ASSETS 518,366, ,822,659 82,088,114 8,315, Trade receivables a. Monetary financial assets b. Non-monetary financial assets Other NON-CURRENT ASSETS TOTAL ASSETS 518,366, ,822,659 82,088,114 8,315, Trade payables (8,985,983) (1,090,605) (2,437,096) (970,163) 11. Financial liabilities (66,321,977) (3,994,152) (24,051,651) - 12a. Other monetary liabilities b. Other non-monetary liabilities CURRENT LIABILITIES (75,307,960) (5,084,757) (26,488,747) (970,163) 14. Trade payables Financial liabilities (226,303,888) (45,680,000) (57,295,579) - 16a. Other monetary liabilities b. Other non-monetary liabilities NON-CURRENT LIABILITIES (226,303,888) (45,680,000) (57,295,579) TOTAL LIABILITIES (301,611,848) (50,764,757) (83,784,326) (970,163) 19. Net foreign currency asset / (liability) position 216,754, ,057,902 (1,696,212) 7,345, Net foreign currency position for monetary 216,754, ,057,902 (1,696,212) 7,345,096 items (1+2a+5+6a a a) 21. EXPORTS 417,585,629 82,468, ,365,135 4,320, IMPORTS 240,103,239 28,949,043 74,625,149 3,052,453 The group is mainly exposed to Euro and US Dollar risks 64

67 2012 Annual Report The table below presents the Group s sensitivity to a 10% deviation in US dollar and Euro. 10% is the rate used by the Group when generating its report on exchange rate risk; the related rate stands for the presumed possible change in the foreign currency rates by the Group s management. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 10% change in foreign currency rates. This analysis includes foreign currency denominated bank loans other than the functional currency of the ultimate user or borrower of the bank loans. Positive amount indicates increase in profit or equity. 31 December December 2011 Profit / Loss Profit / Loss Appreciation of Devaluation of Appreciation of Devaluation of foreign currency foreign currency foreign currency foreign currency Appreciation of USD against TRY by 10% 1- US Dollars net asset / liability 14,268,388 (14,268,388) 21,356,638 (21,356,638) 2- USD risk hedged amount (-) USD net effect (1 +2) 14,268,388 14,268,388 21,356,638 (21,356,638) Appreciation of EURO against TRY by 10% 4 - Euro net asset / liability (5,150,470) 5,150,470 (414,520) 414, Euro risk hedged amount (-) Euro net effect (4+5) (5,150,470) (5,150,470) (414,520) 414,520 Appreciation of other currencies against TRY by 10% 7- Other currencies net asset / liability 371,648 (371,648) 734,510 (734,510) 8- Other currencies risk hedged amount (-) Other currencies net effect (7+8) 371, , ,510 (734,510) TOTAL ( ) 9,489,566 (9,489,566) 21,676,628 (21,676,628) b.3.2) Interest rate risk management The Group is exposed to interest rate risk as the Group borrows funds at both fixed and floating interest rates. The risk is managed by the Group by maintaining an appropriate mix between fixed and floating rate borrowings and by either positioning the balance sheet or protecting interest expense through different interest rate cycles. Strategies protecting from risk are assessed regularly to be in line with interest rate expectation and risk defined. With this optimal hedging strategy, review of balance sheet position and controlling of interest expenditure under different interest rates is aimed. Interest rate sensitivity The Group s financial instruments that are sensitive to interest rates are as follows: 31 December 2012 Floating Fixed Non-interest Interest interest bearing Total Financial assets - 684,736, ,136, ,873,078 Cash and cash equivalents - 304,418,918 29,824, ,243,426 Available for sale financial assets ,312, ,312,130 Trade receivables - 323,251, ,251,671 Due from related parties - 53,997,289-53,997,289 Other receivables - 3,068,562-3,068,562 Financial liabilities 305,877, ,954,580 3,016, ,848,790 Bank borrowings 305,877,501 77,934,965 3,016, ,829,175 Financial Leasing liabilities 9,664,770-9,664,770 Trade payables - 92,383,225-92,383,225 Due to related parties - 25,293,455-25,293,455 Other payables - 22,678,165-22,678, December 2011 Floating Fixed Non-interest Interest interest bearing Total Financial assets - 891,795, ,132,459 1,001,928,423 Cash and cash equivalents - 501,414,982 12,435, ,849,993 Available for sale financial assets ,697,448 97,697,448 Trade receivables - 349,520, ,520,159 Due from related parties - 38,505,313-38,505,313 Other receivables - 2,355,510-2,355,510 Financial liabilities 315,420, ,997, ,418,405 Bank borrowings 315,420, ,420,708 Trade payables - 81,384,490-81,384,490 Due to related parties - 39,678,602-39,678,602 Other payables - 21,934,605-21,934,605 65

68 The sensitivity analysis below have been determined based on the exposure to interest rates at the balance sheet date and the stipulated change taking place at the beginning of the financial year and held constant throughout the reporting period. A 0.25% increase or decrease on interest rates is used when reporting interest rate risk internally to key management personnel and represents management s assessment of the possible change in interest rates. If interest rates had been 0.25% higher/lower and all other variables were held constant, net income before tax and non-controlling interest at 31 December 2012 would have been lower/higher by TRY 370,049 (31 December 2011: TRY ) b.3.3) Other price risks The Group is exposed to market price risk due to its equity share investments. Equity share investments are held for strategic purposes rather than trading purposes. The Group does not trade equity share investments. Equity price sensitivity Sensitivity analyses presented below are determined based on the equity share price risks as of the reporting date. If the equity shares prices were increased / decreased by 10% with all other variables held constant as of the reporting date. Net profit/loss would not be affected as of 31 December 2012and 31 December 2011 to the extent that equity share investments classified as available for sale assets are not disposed of or impaired. The other equity funds would increase/decrease by TRY11,021,036 (2011: None). This change results from the fair value change of equity share investments classified as available for sale. NOTE 39-FINANCIAL INSTRUMENTS (FAIR VALUE AND HEDGE ACCOUNTING DISCLOSURES) Available for Financial Loans and sale liabilities 31 December 2012 receivables financial assets at amortized cost Carrying value Note Financial assets Cash and cash equivalents 334,243, ,243,426 6 Trade receivables 323,251, ,251, Due from related parties 53,997, ,997, Financial investments - 166,312, ,312,130 7 Financial liabilities Financial liabilities ,493, ,493,945 8 Trade payables ,383,225 92,383, Due to related parties ,293,455 25,293, Available for Financial Loans and sale liabilities 31 December 2011 receivables financial assets at amortized cost Carrying value Note Financial assets Cash and cash equivalents 513,849, ,849,993 6 Trade receivables 349,520, ,520, Due from related parties 38,505, ,505, Financial investments - 97,697,448-97,697,448 7 Financial liabilities Financial liabilities ,420, ,420,708 8 Trade payables ,384,490 81,384, Due to related parties ,678,602 39,678,

69 2012 Annual Report The Group believes that the carrying values of its financial instruments reflect their fair values. Fair value of financial assets and liabilities is determined as follows: First category: In determining the fair value of assets and liabilities, active market trading price is used for valuation purposes Second category: In determining the fair value of assets and liabilities, should other market price be observed other than first degree market prices, then observed market price is used for valuation purposes. Third category: In determining the fair value of assets and liabilities, data which is not based on market observation is used for valuation purposes. Category classification of financial assets and liabilities presented with their fair values are as follows: 31 December 2012 Level 1 Level 2 Level 3 Total Financial assets Financial investments 109,754,941-56,557, ,312, ,754,941-56,557, ,312, December 2011 Level 1 Level 2 Level 3 Total Financial assets Financial investments ,697,448 97,697, ,697,448 97,697,448 NOTE 40 - SUBSEQUENT EVENTS The following decision was taken at the Board of Directors meeting of held on 19 February 2013: The Capital Markets Board of Turkey will be appealed for the waiver of the merger of the with Trakya Yeniflehir Cam Sanayii A.fi. and Trakya Polatl Cam Sanayii Afi, which was publicly announced on 29 August 2012, due to the fact that the secondary legislation regarding the article 24 Right of Disassociation of Capital Markets Board Law numbered 6362 has not yet been legislated. The merger will be re-evaluated after the enactment of the secondary legislation. The total registered share capital ceiling of the Company was decided to be increased from TRY to TRY in the Extraordinary General Assembly Meeting held on 22 January The Group signed a joint-venture agreement with Hindusthan National Glass & Industries Limited (HNGIL) and usufruct shareholders to acquire HNG Float Glass Limited (HNGFL), which is the largest float glass producer of India, on 10 January Consequently, the Group has acquired 45% of HNGFL of which 88% belongs to HNGIL and usufruct shareholders. The share of IFC will be decreased from 12% to 10% subsequent to the share transfer. The process of share transfer and closing transactions are in progress. Trakya Cam, signed a Memorandum of Understanding on 19 February 2013 to acquire 100% of Fritz Holding GmbH incorporated in Germany. The acquisition is deemed to be a significant opportunity for Trakya Cam to become a stronger auto-glass supplier in line with its growth strategies, to create additional capacity to meet market demand and to enhance the capabilities on encapsulated auto-glass as an integral part of its product. NOTE 41 - OTHER ISSUES THAT SIGNIFICANTLY AFFECT THE FINANCIAL STATEMENTS OR OTHER ISSUES REQUIRED FOR THE CLEAR UNDERSTANDING OF FINANCIAL STATEMENTS The Group s consolidated financial statements as at 31 December 2012 audited by independent auditors and the semi-annual report prepared in accordance with the Capital Markets Board s Communiqué Serial: XI, No: 29 are reviewed by also considering the Audit Committee s opinion on the matter. It has been concluded that the consolidated financial statements present fairly the consolidated financial position of the Company and the results of its operations in accordance with the regulations issued by the Capital Markets Board and Group accounting policies. With the Board of Directors decision dated 6 March 2013, Board Member Müfit Özkara, and the Finance Manager Beyza Genç are authorized to sign electronically the consolidated financial statements for public announcement. 67

70 CORPORATE GOVERNANCE PRINCIPLES COMPLIANCE REPORT 1. Statement of Compliance With Principles of Corporate Governance This statement articulates, in the framework of the Corporate Governance Principles exacted by Capital Markets Board (the CMB) Communique Serial: IV, No: 56 Corporate Governance Principles and Practices Pertaining to the Determination and Communique- Amending this Communique Serial IV, No: 57 Determination and implementation of Corporate Governance Principles, published in the Official Gazette dated 30 December 2011 numbered 28158, the manner in which relations with shareholders and stakeholders should be carried out, identification of the tasks and responsibilities of the Board of Directors, its managers and its committees, the following responsibilities of Trakya Cam Sanayii Anonim fiirketi (the Company). Established in 1978 as a subsidiary of Turkiye fiifle ve Cam Fabrikalar A.fi. Trakya Cam is the leading float, auto glass and processed glasses producer in Turkey. Carrying out production using the latest technologies the Company contributes to the country s economy by its export, employment, and inputs supplied to fields of construction, automotive, home appliances, furniture, energy, and agriculture. Today Trakya Cam stands as the 6th largest flat glass producer in the world, and 4th in Europe, and is also a strong supplier for the automotive, energy and home appliances industries in Europe and the region. With the inauguration of the ongoing investments in Ankara- Polatl, Russia-Tatrstan and Bulgaria (2.line) in the second half of 2013, Trakya Cam s float lines will increase to 10 in one year. The Saint- Gobain Glass Egypt Factory in Egypt- that Trakya Cam participates in was put into use in Trakya Cam s strengths that have brought it to its position today, its modern management structure, industrialism, high level of institutionalization, its focus on the market and R&D, are also the guarantee of a bright future. Trakya Cam intends to reinforce its vision of Being a fast growing global flat glass company with strong brands and innovative solutions with the support of Corporate Governance Principles. In this regard, the non-obligatory principles among the Corporate Governance Principles in the period ending 31 December 2012 as set forth in the Appendix of the Communique on Determination and Implementation of Corporate Governance Principles have been presented in the relevant parts of this report. The details of the relevant and noteworthy work done in this period to obtain compliance with the Corporate Governance Principles are presented below: - In compliance with Corporate Governance Principles, an article has been added to Articles of Associations entitled Compliance with Corporate Governance Principles. In addition, Article 8 of the Articles of Association entitled Board of Directors has been amended so that the Article of Association states the number and characteristics of independent members of the Board of Directors in accordance with Corporate Governance Principles, and the said amendments were approved at the Ordinary General Assembly Meeting of Shareholders held on May 17, Since no Nomination Committee existed on December 2011, the date the Communique on the Determination and Application of Corporate Governance Principles Series: IV, No: 56, entered into effect, independent member candidates were nominated by Audit Committee on March 16, 2012 according to principles stipulated in Corporate Governance Principles of the Capital Markets Board, and were presented for approval to the Board of Directors. - Approved by Board of Directors, the independent members were presented for approval of the Capital Markets Board on March 19, 2012, and no negative response was given by the CMB regarding the nominees. Election of independent members of Board of Directors approved by the CMB was accepted at the Ordinary General Meeting of Shareholders held on May 17, In order for the Board of Directors to properly undertake their duties and responsibilities, an Audit Committee, a Corporate Governance Committee, and Early Risk Detection Committee have been formed within the body of the Board of Directors in accordance with Corporate Governance Principles and these were announced to the public. - The committees area of responsibility, method of functioning, and composition have been determined at the Board of Directors meeting dated May 17, 2012, and announced to the public on the same date. - The principles of remunerations of the Board of Directors were stipulated in writing, and presented to shareholders as a separate item in General Assembly Meeting s agenda, as well as being announced to the public on the Company s official website. - In order to expand the right of shareholders to information, the Company s official website has been made accessible to shareholders and beneficiaries. Important and noteworthy information on the website is also translated into English for the use of international investors. In this frame, announcements regarding Corporate Governance Principles in 2012, prepared in accordance with Announcement and Resolutions in the Weekly Bulletin number 2013/4 of the CMB are presented below in sections. SECTION I. SHAREHOLDERS 2. Shareholder Relations Unit Our Group embraced a centralized approach to fulfill its liabilities imposed by the Capital Markets legislations and to continue its activities in a more efficient manner. Therefore, the Company employed a structuring process accordingly. All liabilities of Trakya Cam and its listed subsidiaries imposed by the Turkish commercial Law and Capital Markets Law is being supervised, managed and coordinated by our "Shareholder Relations Unit", which was established within the body of the main company fiiflecam, Financial Affairs Group in compliance with the Corporate Governance Principles set forth by the CMB. In this context, the "Shareholder Relations Unit is playing an active role in facilitating and preserving the use of shareholder rights, particularly the right to access and assess information. 68

71 2012 Annual Report All information and announcements, which may affect the use of shareholder rights are updated and disclosed on the Company's official website. Main activities during the period are as follows: a) Shareholders oral and written inquiries about the company-except for non-public material that are confidential- were replied b) The annual general meetings of shareholders (AGM) were held according to legislation in force, AoA and other in-house regulations c) Documents for the utilization of shareholders during the general assembly meeting were prepared d) Voting results were recorded and a report of voting results was sent to the shareholders e) All matters regarding public access to information including regulations and the firms policy on information access were complied with f) A healthy, secure and up-to-date record of shareholders was kept g) The meetings held at the Company Head Office and the meetings and conferences organized by various Institutions in Turkey and abroad were attended; the investors were provided information h) Analysts evaluating the Company were given information i) The official website of the Company has been updated; shareholders were enabled to access information quickly and efficiently j) All information and announcements, which may affect the use of shareholder rights were updated and disclosed on the Company s official website k) With reference to CMB Communiqué Serial VIII- No:54, Special Circumstance Explanations were announced to the public by informing IMKB (Istanbul Stock Exchange) via the Public Disclosure Platform (PDP). I) The changes in the legislation related to the Capital Markets Law were closely followed and brought to the attention of the relevant departments of the Company. List of officers of the Shareholder Relations Unit is given below: Name and Surname Position/Title Telephone M.Görkem Elverici Finance Director [email protected] Beyza Genç Finance Manager [email protected] Nihal Topçuo lu General Accounting Manager [email protected] Baflak Öge Corporate Finance and Investor Relations Manager [email protected] Moreover, on the official website of the holding company, all investors inquiries received via the Investor Relations Communication Form accessible on the Investor-Relations - How my we help You page were replied to immediately. 3. The Right of Sherholders to Access Information In enabling the exercise of the shareholders' right of accessing and assessing information, the shareholders are treated equally. Each shareholder has the right to access and assess the information. Our Articles of Association (AoA) does not include any terms restricting the right to access information. In the frame of the present regulations, with the aim of extending the shareholders right access to information and enabling them exercise their rights in a healthy nature, the Company s official website is being benefited very effectively. In this scope, the Corporate website is providing the Corporate Governance Principles and the relevant information and data as required by the regulatory authorities. With the aim of public disclosure and providing information, the corporatewebsite includes: fields ofactivity, annual avtivity reports and interim period financial statements, corporate governance compliance report, Articles of Association, trade registry info, special sircumstanses disclosure, shreholding structure, agendas of general assembly meetings, minutes of general assembly meetings, list of attendees of general assembly meetings, votes by Proxy, codes of conduct, information policies. Utmost atention is paid to keep the official website up to date. According to the regulations, non-controling shareholders are entitled to request the appointment by the General Assembly of a special auditor. Shareholder(s) of a company representing at least %10 of the capital are entitled to demand the appointment of a special auitor with regard to special matters. Our Company s Articles of Assocciation does not include an article regarding the assignment of a special auditor. During the fiscal period such a request hasnot been made. 4. General Assembly Meetings In line with the legislation the announcement of the General Assembly Meeting date is made three weeks prior to the meeting via Public Disclosure Platform (KAP), Electronic General Assembly System(EGKS), the Company s official website and the Turkish Commercial Registry Gazette, with the aim of reaching as many shareholders as possible. 69

72 On the corporate website at the date of the General Assembly Meeting is announced as Investor Relations - Announcements and documents of the General Assembly - Informative Documents along with the notifications and statements that have to be made according to the legislation. Moreover the following points are disclosed to the shareholders in an attention-drawing manner: a) Total number of shares reflecting the Company s partnership structure and their voting rights, as of the date of announcement b) Any changes in the management and actions of the Company, which may change the Company s operations and which are projected for the coming fiscal period or which have been executed in the past fiscal period of the Company or of the main subsidiaries c) If any on the General Assembly Meeting Agenda, information on the dismissal, replacement and selection of Board of Directors members, the reasons of dismissal or replacement, information on the new candidates of board membership. d) The requests by shareholders, CMB and/or the other public authorities and institutions the Company is engaged with of including topics in the meeting agenda e) In case there is an amendment in the Articles of Association on the agenda, the relevant Board of Directors resolution and the old and new versions of the amended clause of the Articles of Association. Regarding the execution of the liability mentioned in clause (c), the resumes of the candidates of membership for the Board of Directors, the positions they took through the past decade, the reasons for their resignations, the importance and details of their relations with the Company and Company- related parties, whether they are independent members or not, and information on the similar issues which may interfere with the Company's operations should these people be selected as Board of Directors members, are all disclosed to the public by the Company within one week following the announcement of the General Assembly Meeting date. In preparing the General Assembly Meeting agenda, utmost attention is paid to State each request under a separate topic. The agenda is itemized clearly to avoid any ambiguity. Special attention is shown to avoid using words like Other" or Miscellaneous" on the agenda. In preparing the agenda, the issues shareholders have sent to the Shareholder Relations Unit in writing and requested to have them included in the agenda, are taken into attention by the Board of Directors. During this term, no such requests have been received. Utmost attention is paid to organize the General Assembly Meetings to enable highest attendance putting the least financial burden on the shareholder and to avoid any unfair treatment to any shareholder. Therefore, various factors, such as traffic, transportation etc., are taken into account in setting the timing of the General Assembly Meetings. The agenda of a General Assembly Meeting is itemized clearly, objectively and in detail. Shareholders are offered equal opportunities to express their views and ask any questions they may have in mind. All questions asked by the shareholders during the General Assembly Meetings - except for non- public material that are commercially confidential- are replied during the General Assembly Meeting. In case the question is irrelevant to the agenda or too extensive to be replied immediately, it is answered by the Shareholder Relations Unit in writing within 30 days maximum. Any operation, executed by the members of the Board of Directors based on the authorization they have taken at the previous General Assembly Meeting to engage in activities that are considered as Company operations as set forth in Articles 395 and 396 of Turkish Commercial Code, is reported to the General Assembly Meeting. Board of Directors members, who are responsible for the areas related to the agenda topics, other relevant executives, all authorized managers and auditors who have participated in the preparation of the financial statements attend the General Assembly Meeting to provide information and answer questions. A public statement is released on the day of the resolution by the Board of Directors via the Public Disclosure Platform (PDP), announcing the date of the General Assembly Meeting. Moreover, with the aim of informing the local and foreign shareholders about the General Assembly Meeting announcements and agenda items, the General Assembly documents are published on the official website. As required by the CMB legislation, financial statements have to be disclosed within 14 weeks following the end of the fiscal period. On the other hand, the Company aims to finalize and disclose its financial statements as quickly as possible in order to inform its shareholders in a timely manner. Based in this principle, the financial statements of 2011 have been disclosed within almost 10 weeks. In case there is a significant change in the Company's management and operational organization, the details of such change is disclosed to the public as required by the legislation. Moreover, in compliance with the Corporate Governance Principles set forth by the CMB and as required by the principle regarding significant activities, prior to the Ordinary General Assembly Meeting to be held on 17 May 2012, the necessary authorizations have been received to make amendments on the Articles of Association. In compliance with the CMB s corporate governance principles Regarding significant transactions and related party transactions, providing guarantee, pledge, and mortgage in favor of third persons issues relevant regulation is made in the Company s articles of association. In this frame; The merger between - Trakya Yeniflehir Cam Sanayii A.fi. and Trakya Polatl Cam Sanayii A.fi and the merger between Türkiye fiifle ve Cam Fabrikalar A.fi. and Çay rova Cam Sanayii A.fi. were still under examination by CMB, the Capital Markets 70

73 2012 Annual Report Law was substantially amended and the new Capital Markets Law number 6362 came into effect on the date it was published in the Official Gazette dated 30 December 2012 and number Those shareholders who attended to the General Assembly meeting where Article 24 of afforementioned law entitle Right of Dissociation and the important procedures described in Article 23 of the said Law and voted against the decisions and had their dissenting opinions included in the minutes of the meeting were required to use their right to dissociation and sell their share to the Company in accordance with the principles discribed in the Law, and public companies were required to buy these shares from the shareholders at the price thus determined. Since the secndary regulations pertaining to the applicatipon of Article 24 of the Capital Markets Law number 6362 entitled Right of Dissociation had not yet been published, with respect to the postponement of the merger procedures announced to the public on the aforementioned dates for a second evaluation after these secondary regulations are published, it was annunced to the public on 19 February 2013 that an application has been field with the CMB on the same date for the suspension of the merger application at this stage. On a separate agenda topic, information is given to the General Assembly Meeting on the donations and charities given to associations and foundations with social aid purpose. The General Assembly Meetings are open to the public, including the press members and beneficiaries without the right to speak. The minutes of the General Assembly meetings published on the official website are kept open to the examination of the shareholders at the Company Head Office. Within the period, Ordinary General Assembly Meeting for the year 2011 was held on 17 May 2012 with a quorum of 73.94%. In the announcements and statements of the General Assembly Meetings the following points have been noted: The agenda, place, date and time of the General Assembly Meeting; the proxy form for those who wish to be represented by a proxy and the instructions for filling in the proxy form, That General Assembly meetings wil be held physically and virtually, and that for virtual general assembly meetings the rights to have an attorney, make proposals, disclose opinions, and vote will be used through Electronic General Assembly System (EGKS) made available by the Central Registry Office (MKK) and that those shareholders who wish to attend the virtual general asembly in person or through the attorney will do so in accordance with the principles laid out by the EGKS That those shareholders who wish to attend to General Assembly physically need to present their identities or letters of attorney if they wish to use their rights regarding their shares registered on the Shareholders List available in the Central Registry Office (MKK) system, That all the financial statements including the annual report, Independent External Auditing Reports, profit distribution suggestion of the Board of Directors, if any, the new and old versions of the amended article of the Articles of Association shall be presented for the examination of the shareholders on the company website and at the Head Office, at least 3 weeks prior to the General Assembly Meeting. 5. Right to Vote and Non-controlling Rights The Articles of Association does not include privileges of right to vote. Pursuant to our Articles of Association, each share grants one right to vote. In case the mutual shareholding relation concurs a relationship of dominance, the companies having a mutual shareholding relation, do not vote in each other s General Assembly Meetings, unless there are requisites like forming a quorum. Non-controlling shares are not represented in the management. Cumulative vote method is not included in our Articles of Association and in 2011 no complaints or criticisms have been directed to our Company regarding this issue. 6. Right for Dividend The profit distribution policy of our Company has been determined in accordance with the Turkish Trade Law, the Capital Markets Law and other regulations applicable to the company, as well as the Articles of Association. As such: a) Our Company chooses to istribute a maximum of %50 net of period profit calculated at the end of each year in accordance with the Capital Markets Law and relevant regulations, in cash and/or in the form of no-par shares. The Ordinary General Assembly of Shreholders may decide on a different percentage due to economic conditions, investment plans and cash flow. b) The profit distribution proposals of our Board of Directors, which includes relevant details of CMB regulations and Corporate Governance Principles, will be disclosed to the public within legally determined periods through the Public Disclosure Platform, the official Company website, and annual reports. c) Cash profit dividents determined at the General Assembly will be distributed on the determined date by the General Assembly. Steps to be taken for the distribution of profit dividents in the form of no-par shares will be completed within the periods specified by CMB regulations. d) In accordance with the profit distribution policy, profit dividents will be distributed equally to all existing shareholders on the day determined without consideration of dates of sale and acquisition. e) In case the Board of Directors suggests to the General Assembly that no profit distribution should be made, the reasons fort his suggestion and the details of the undistributd profit are presented to the shareholders during the General Assembly Meeting. f) Profit distribution is based on a policy that balances shareholders interest with the Company s interests. g) There are no preference shares in respect to receiving shares from the profit. 71

74 h) Enforcement for paying profit shares with founder divident shares to the Members of our Board of Directors and to our employees is not contained in our Articles of Association. i) According to the Articles of Assocciation, advance profit dividents can be paid if the Board of Directors is thus authorized by the General Assembly, and in compliance with the Capital Markets Law and relevant regulations of the CMB. Such authority given by the General Assembly to the Board of Directors to make advance payments of profit dividents is restricted to the year the authority is given. 7. Transfer of Shares There are no provisions restricting the transfer of shares in our Articles of Association. SECTION II. PUBLIC DISCLOSURE AND TRANSPARENCY 8. Information Policy The CMB Communiqué on Guidelines for Disclosure of Special Conditions to Public"- Serial: VIII, No: 54, published on the Official Gazette dated 6 February 2009 and numbered imposes the obligation on the partnerships, shares of which are traded at the exchange for creating an information policy aimed at public enlightenment and announcing such policy to the public via the website of the partnership. The "Information Policy, created in this context and approved at the Meeting of our Board of Directors dated 2 April 2012 and numbered 12, has been announced to the public in the section Investor Relations" on our company s website. The Information Policy outlines the following topics: the information - apart from those detailed in the legislation- shall be disclosed, how frequently and through which ways shall the information be shared with the public, how frequently should the members of the Board of Directors or other executives make statements to the press, how frequently should meetings to inform the public be held, how should the questions addressed to the Company be replied, etc. The personel responsible for carrying out the information policy are listed below: Name and Surname Position Telephone M.Görkem Elverici Finance Director [email protected] Beyza Genç Budget and Financial Control Manager [email protected] Nihal Topçuo lu Accounting Manager [email protected] Baflak Ö e Corporate Financing and Investors Relations Manager [email protected] 9. Company Website and Content As required by the Corporate Governance Principles set forth by the CMB, our Company is actively using its official website to maintain an efficient and strong relation with its shareholders and to have a continuous contact with its stakeholders. Information published on the website is regularly updated by the Shareholder Relations Unit. Including statements made in the frame of legislative requirements, the information on the website does not have any contradictory and incomplete data. In addition to the data, the disclosure of which is required by regulations, the corporate website Includes: trade registry info, updated shareholding structure and organizational pattern, whether there are preferential shares, the dates and numbers of the trade registry gazette issues the amendments are published on, final version of the Articles of Association, special circumstances explanations, financial statements, annual activity reports, explanation notes and public offering circulars, the agendas of the General Assembly Meetings, the list of attendants to the General Assembly Meetings, minutes of the General Assembly Meetings, proxy vote forms, Profit Distribution Policy, Information Policy, Code of Conduct and answers to the FAQ. In this context, the Company s official website includes information of the past 5 years minimum. Important and special information published on the website are also provided in English to enable the international investors benefit from the data. 10. Annual Report The Board of Directors Annual Report is prepared in detail to enable the public access accurate and complete information on the Company's operations. In addition to the data, the disclosure of which is required by regulations and the relevant clauses of the Corporate Governance Principles, the annual report includes: a) Information on the other positions the members of the Board of Directors are holding (in their resumes), b) Members of the Board of Directors committees, frequency of their meetings, the activities carried out by these committees, c) The number of Board of Directors meetings held during the year, the attendance of the Board of Directors members to these meetings, d) If any, explanations for the administrative sanctions and penalties imposed on the Company or members of the Board of Directors due to any violation of regulations, 72

75 2012 Annual Report e) Information on the regulation amendments, which may significantly affect the company operations, f) Information on the significant lawsuits brought against the company and on their possible outcomes, g) Information on the social rights of the company personnel, their professional trainings and information on the corporate social responsibility activities, which may have social and environmental consequences. SECTION III - BENEFICIARIES 11. Informing the Beneficiaries Beneficiaries are legal entities, real people, institutions or interest groups, such as non-governmental organizations, worker unions, suppliers, customers, creditors, workers, who benefit from the Company's operations and pursuit of its goals and targets. In its activities and operations, the Company ensures the beneficiaries rights, which are defined with mutual contracts and under relevant regulations. In cases, where the beneficiary rights are not ensured with the regulations and mutual contracts, the interests of the beneficiaries are protected with utmost good will and at the maximum extend possible by the Company. Beneficiaries are provided information on the Company policies and procedures regarding the protection of their rights. The Company has established the necessary mechanisms to notify the Auditory Committee about the unethical or illegal transactions or actions by the beneficiaries. In case of a conflict of interest among beneficiaries or in case a beneficiary falls into more than one interest group, a wellbalanced policy is pursued to protect the rights. The ultimate target is to protect both interests independently. 12. The Beneficiaries Participation In Management Support is given to the beneficiaries, particularly the Company workers, to participate in the Company management, in ways not interrupting the Company's operations. The views of the beneficiaries are asked on important decisions which have consequences with regard to the interests of the beneficiaries. 13. Human Resources Policy Within the context of human resources, procedures and basics of recruitment, working conditions, rating systems, management of wages, financial and social rights, evaluation of performance, career management and termination of contract of employment have been formed. Relations with employees are carried out by the department of human resources. Guidelines pertaining to employment of personnel have been presented in writing in the Company s Human Resources Systems, and these guidelines are being followed. In setting the recruitment policies and making the career planning, the principle of equal opportunity to equal candidates has been embraced. During the period, no complaints on any discrimination or favoritism has been addressed the Company executives. Employees are treated equally with regard to their rights. Various training programs are designed to improve their knowledge, skills and work experience. The HR department is organizing meetings with the personnel to inform them on matters such as Company's financial state, wage policy, training programs, or health-related topics. Decisions taken on the personnel or any developments affecting the workers are notified either directly to them or through their representatives. The views of the relevant worker union are asked when such decisions are to be made. The job descriptions and distribution and the criteria of performance and rewarding are explained to the workers. In determining the wage and other benefits of the workers, efficiency is taken into consideration. The workers are not discriminated based on their race, religion, language or gender. Precautions are taken to avoid any mobbing within the Company. 14. Ethical Codes and Social Responsibility 14.1 Social Responsibility Being aware of its responsibility for the laws and environmental values, Trakya Cam believes in the requisite of leaving a habitable word to the future generations. In every stage of its activities, the Company takes this approach into consideration, which it perceives as one of the main elements of strategic management. Our aim is the execution of the environmental protection work carried out in our Group with an understanding of environmental management system and maintaining a sustainable improvement with the support of all employees Ethical Codes fiiflecam Group's Code of Conduct, arranged under the general Principles of honesty, transparency, confidentiality, impartiality and obeying the laws with the resolution dated No.49 of the Board of Directors of our Company have been put into effect and arrangements bearing the characteristics of a guidance that would lead the relationships of all Group employees with the customers, suppliers, shareholders and other stakeholders have been realized. General outline of the Company s Ethical Codes as ann unced to the public on the Company s official websitw is stated below: 73

76 General Principles - In fiiflecam Group, truthfulness and honesty constitute the basis of acts in relationship to employees, customers, suppliers, shareholders and all stakeholders. - fiiflecam Group is transparent and open with all its stakeholders. - In fiiflecam Group, no distinction among stakeholders is made due to reasons such as religion, language, race, gender, state of health, marital status and political view. Everybody is treated equally and prejudiced behaviors are avoided. - In fiiflecam Group, utmost attention is paid to protecting the private information of employees, customers and suppliers and sharing such information with third parties is not allowed. - fiiflecam Group runs all its operations in line with the laws. The Group follows laws and regulations closely and takes the necessary precautions required to ensure compliance with the laws Responsibilities The Board of Directors and the Auditing Committee are responsible at top level for applying the Code of Conduct of fiiflecam Group throughout the entire Group. All members of Group personnel are obliged to act in accordance with the Code of Conduct of fiiflecam Group Applications - In fiiflecam Group, utmost attention is always paid to efficient and productive use of Group resources and the principle of economizing is taken into consideration. Group personnel use and protect the Group resources only for the good of the Group. - Utmost attention is paid to protect of all kinds of non-public information. Regulations and procedures related to the security of information belonging to the Group are keenly applied and required precautions to carefully keep and archive this Information and for non-disclosure thereof are adopted. - In fiiflecam Group, the personnel consider Group interests within the framework of legal and in-group regulations and pay attention to keep away from conflicts of interest, in the tasks they perform. - In fiiflecam Group, gifts exceeding a reasonable extent from customers, suppliers and other institutions are not accepted. However, gifts having a symbolic value such as plaquets and shields, granted at the meetings or seminars attended to represent the Group can be accepted. - In case business relationships with family members, close relatives and friends are required to be established by the fiiflecam Group personnel, occurrence of conflict of interest is not allowed. - In fiiflecam Group, in relationships with customers and suppliers, rules of respect, equality, courtesy and justice are regarded and laws and code of conduct are followed at utmost level. No misleading and dishonest manners are adopted towards customers and consumers. - In fiiflecam Group, rules of the honesty and sincerity in competitiveness are always closely followed in all the countries where activities are carried out. - The relations of fiiflecam Group with official bodies are always transparent and explicit. Any kind of information and document requested by the official bodies are provided correctly, fully and on time. Any act to deceive or mislead the official bodies are never tolerated or allowed Compliance with the Ethical Codes fiiflecam Group Employees of the Group show utmost care to comply with the fiiflecam Group Code of Conduct. Compliance with Code of Conduct throughout Group Activities is monitored by effective communication. SECTION IV - BOARD OF DIRECTORS 15. Structure and Composition of the Board of Directors The Board of Directors is formulated in such a way as to enable its memebers to work productevely and constructively, make fast and rational decisions and effectively organize committee activities. The Board of Directors includes both executive and non-executive members. A non-executive member of the board is a memeber who does not have an administrative position in the Company other than his/her membership to the Board of the Directors and who does not interfere with the Daily business and regular operations of the Company. The majority of the Board of Directors is comprised of non-executive members. Pursuant to the Articles of Association, the business of the Company is carried out by a Board of Directors, comprising at least 5 (five) members as stipulated by the Turkish Commercial Code and CMB Corporate Governance Guidelines. With the amendment made on the Articles of Association in the Ordinary General Assembly Meeting on 17 May 2012, two independent members meeting the criteria set forth in the CMB Corporate Governance Guidelines have been elected. 74

77 2012 Annual Report Following the General Assembly Meetings, when the Board of Directors members are ELECTED, THE Chairperson and the Vice-Chairperson of the Board of Directors are elected upon a resolution for the division tasks. The Company s Board of Directors comprises the following six members- one executive and five non-executive. Name and Surname Title Teoman Yenigün Chairman Nevzat Burak Seyrek Vice Chairman Zeynep Hansu Uçar Member Müfit Özkara Member Prof. Dr. Atilla Murat Demircio lu Independent member Prof. Dr. Turkay Berksoy Independent member According to the Articles 395 and 396 of the Turkish Commercial Code, the Board members have to receive the approval of the General Assembly to conduct businesses personally or on behalf of third parties that fail under the Company s area of operations or to become partners with companies engaged in such businesses. The Board memebers can freely express their ideas, without being affected by any external pressures. Even though it is not obligatory according to the Corporate Governance Principles, our Company s Board of Directors includes Zeynep Hansu Uçar as a female member. The Board of Directors manages and represents the Company by preserving first and foremost the long-term interests of the Company in its strategic desicions, in the balance its strikes between growth and profit, and with its rational and cautios risk management approach. The Board of Directors determines the strategic goals of the Company, determines the human and fiscal resources necessary for the Company, and supervises the performance of the management. It ascertains that the workings of the Company is in compliance with laws, the Articles of Association, internal regulations and policies. The Company has affiliates and subsidiaries. As it is considered that having Board of Directors members take part in the the management of these companies is in the best interest of the Company, no restriction is set for undertaking these tasks outside the parent Company. 16. Procedures of the Board of Directors The Board of Directors functions in a transperent, accountable, fair and responsible manner. The Chairperson and Vice Chaireperson are chosen from among the members of the Board of Directors. In addirtion, Presidents and Members of committees are also chosen in this manner. As stated in the Articles of Association, the Board of Directors meetings are held as and when required by the Company business and operations. However, a meeting must be held at least once a month. In this scope 45 desicions have been taken during the meetings held in In the absence of Chairperson the Board Directors is chaired by the Vice Chairperson. If the Vice Chaireperson is not present either, a temporary Chairperson elected among its own body for that meeting chairs the Board. The date and agenda of the Board is determined by the Chaireperson. In the absence of Chairperson these duties are performed by the Vice Chairperson. However, the meeting date may also be determined by the Board decision. The information and documents related to the topics of the Board of Directors meeting are submitted to the board members to allow a reasonable time for their examination. Prior to the meeting the members of the Board of Directors may suggest amendments to the agenda to the Chairperson. The views of an absent member, who had submitted his/her opinions on a topic in writing to the Board of Directors, are shared with the fellow members. Each member of the Board of Directors has a single vote. The duties of the secretary of the Board of Directors are properly carried out by Company employees assigned in compliance with the Corporate Govermnance Principles. The topics on the agenda of the Board of Directors are being discussed thoroughly and openly during the board meetings. The Chairman of the Board of Directors spends effort to encourage the non-executive members to participate in the meetings effectively. Regarding the topics, the members of the Board of Directors are opposing to, the reasons for their opposition and negative votes are noted down on the resolution record in detail. The detailed explanation of the dissenting votes is disclosed to the public. However, since there has not been any opposition to the decisions taken in the Board of Directors meetings held in 2012, no such disclosure has been made for this year. The Board of Directors meetings are held at the Company Head Office. Significant decisions of the Board of Directors are disclosed via the PDP. The text disclosed to the public is also published on the Company s website. The powers and responsibilities of the members of the Board of Directors have been clearly set out in the Articles of Association. These powers are represented in greater details in the Copmany s circular. These documents have been registered and made public in the manner set forth by law. The Board of Directors plays a leading role in maintaining effective communication between the Company and its shareholders and resolving possible conflicts, and closely cooperates with the Relations with Shareholders Unit. 17. The Number, Composition and Independence of Committees Formed by the Board of Directors In order for the Board of Directors to effectively carry out its duties and responsibilities, the Audit Committee,the Corporate Governance Committee, and the Early Risk Detection Committee have been established and annaunced to the public in compliance with Corporate 75

78 Governance Principles. The committees area of work, guidlines and compositions were determined at the Board of Directors meeting on 17 May 2012 and disclosed to the public on the same date. At the Board of Directors meeting on 17 May 2012: - Prof. Dr.Turkay Berksoy, independent member of the Board, was choosen as the Cahirperson of the Audit Committee, with independent Board member Prof.Dr. Atilla Murat Demircio lu as a committee member, - Prof.Dr. Atilla Murat Demircio lu, independent member of the Board, was choosen as the Chairperson of the Corporate Governance Committee, with independent Board member Prof. Dr. Turkay Berksoy, and members Zeynep Hansu Uçar and Müfit Özkara as committee members. - Prof. Dr. Turkay Berksoy, independent member of the Board, was choosen as the Cahirperson of the Early Risk Detection Committee, with independent Board member Prof.Dr. Atilla Murat Demircio lu, and member Zeynep Hansu Uçar as committee member. Due to the provision in the Corporate Governance Principles that all members of the Audit Committee and the chairman of the other committees be independent members, and due to the fact that the Board of Directors has only two independent members, some board members have had to serve on more than one committee. The Corporate Governance Committee, the Audit Committee, and the Early Risk Detection Committee carry out their work in compliance with the CMB Codes and the Corporate Governance Principles; the Audit Committee and the Early Risk Detection Committee hold quarterly meetings with set agenda, whereas the Corporate Governance Committee meets whenever necessary with set agenda. The Board of Directors receives the opinion of relevant committees in formulating internal control mechanisms including risk management and information systems and processes that will minimize the effects of risks on shareholders and other beneficieries of the Company. The Board of Directors reviews the effectiveness of risk management and internal control systems at least once a year. The annual report contains information on the existence, functioning and effectiveness of internal controls and internal auditing. 18. Risk Management and the Internal Control Mechanism In the Group, risk managemen and internal auditing is carried out under the coordination of the Risk Management department of the holding company. Internal auditing and risk management functions communicate with each other at the highest level, and risk-focused internal auditing efforts aim to increase corporate governance. Work is carried out, and regularly reported, to build a corporate structure, give necessary assurance to shareholders and stakeholders, protect the financial and non-financial assets of the Group, minimize the losses created by uncertainties and maximize gains from opportunities. Risk management and internal auditing work in our Group is carried out with a significant level of support from top management and the contribution of all employees. Established in 2012, the Early Risk Detection Committee and the Audit Committee have been closely monitoring the risk management and internal auditing work throught the Group and providing necessary guidence. At our Group approaches Risk Management in a holistic and proactive manner, and corporate risk management applications are followed. Risk catalogs prepared at our Group on the basis of businesses are periodically updated and risks are listed in the order of importance. Taking into consideration the risk appetite of the Board of Directors, appropriate strategies for the analyzed risks are determined and necessary precautions taken. This work is not limited to financial and strategic risks but also covers operational risks such as production, sales work health and safety, emergency management and information technologies. Internal auditing in our Group has been carried out for many years within a corporate framework under the Main Company Board of Directors. The main purpose of internal auditing in our Group is to help Group companies to grow in a healthy and well-coordinated manner, to carry out constructive and efficient control in order to ensure all work is done in accordance with legal codes, and to take corrective measures in a timely fashion. Internal auditing is carried out according to the annual audit program approved by the Board of Directors. In preparing the annual audit program, results from the risk management studies are also used. 19. Stratrgic Goals of the Company The process of determining reviewing, and updating the Company s strategic goals begins with the Board of Directors finalizing the Vision statement. The Board of Directors specified the point the Group wants to reach in 2020 as Being a fast growing global flat glass company with strong brands and innovative solutions. At the second stage, a series of analyses are carried out to understand under what conditions work has to be done to meet the requirements of the vision. The analysis pertaining to internal workings is called Internal Analysis, while the one pertaining to the board field covering the market, competitors, sectors in which the Group is active, various regions, consumers, suppliers, etc.is called External Analysis. Following these analyses, Strategic Maps are vreated and/or updated. The strategic map determines the focuses areas of the Group in terms of Finance, Customers, Processes and Non-Financial Assets, and the differentiating (strategic) factors it needs to excel in. The Strategic Map can be created on the level of the Group as wll as for businesses. As a result, the road map for future work is created. The maps are put into practice by means of Corporate Report Card. Every strategy identified on the map is linked to a Performance Criterion, the level of success this criterion needs to attain, the projects necessary for this activity, and the organizational structure. 76

79 2012 Annual Report At the end of the year, executive branches share all aspects of the plan, beginning with the Vision and Strategic Map. The developed plan is then presented to the approval of the Board of Directors. After changes deemed necessary by the Board, the plan is put into execution under leadership of the General Manager. All executive branches monitör how the plan fares-monthly through the Annual report (budget), quarterly through Group Meetings, and independently of the calendar through the Decision Support Units, Management Information Systems, etc. n the short and long term; if necessary, these branches change strategic priorities in the new plan period. All monitoring results are presented to the Board of Directors during the term concerned. The vision is a long-term text within the newly structured Strategic Planning system. Full Internal and External analyses are repeated every year. Once the Strategic Map is created, the text is renewed every year with updates. The Corporate Report Card is also a system that functions on an annual cycle. 20. Financial Rights All rights, benefits, and salaries granted to the Board Members are annually determined by the General Assembly as specified in the Articles of Association. In the 2011 Ordinary General Assembly held on 17 May 2012, the amounts to be paid to the board members have been determined and publicly disclosed. The Group President and other Executives are not granted any payments, which may technically be viewed as premiums, directly indexed to the turnover or other basic indicators. In addition to their payments made in cash, such as the monthly salary, bonus and social aids, the Group President and other Executives are offered a gratification payment once a year. The amount paid may be increased or kept unchanged, depending on the prevailing circumstances and the criteria taken into consideration including inflation rate, general salary increases and the Company s profitability. The amounts to be paid ate determined taking several factors into account: Company's operation volume, the quality and risk level of the operations, the size of the managed structure, the sector of activity etc. In addition, the Company Executives are allocated a company vehicle. In this scope, a total payment of TL was made to the Executives. No loans or credits are provided to the Board Members and Executives; they are not allowed to use credit under the name of personal credits through a third person or no warrants are given like bails in favor of them. 77

80 AGENDA FOR THE GENERAL ASSEMBLY 2012 (APRIL 5 TH,2013) 1. Election of the members of the Chairmanship Council and granting Chairmanship Council the power to sign the minutes of the General Meeting, 2. Reading of the summaries of the Reports prepared by the Board Of Directors, the Auditing Board and the Independent Auditor on the activities that have been performed by our Company in the year 2012, 3. Reviews and Discussions on and Approval of the 2012 Balance Sheet and Income Statement Accounts, 4. Acquittals of the Members of the Board of Directors and the Auditing Board, 5. Determination of the Compensations to the Members of the Board of Directors, 6. Granting permissions to the Members of the Board of Directors as per the Articles 395 and 396 of the Turkish Commercial Code, 7. Furnishing information to the shareholders in respect of the Company s Profit Distribution Policy as per the arrangements provided by the Capital Markets Board, 8. Taking a Resolution on the Distribution Type and Date of the 2012 Profit, 9. Taking a resolution on amendment of the Company s Articles of Association as indicated in the attached ammendment draft, provided that the required permissions are obtained from Capital Markets Board and from the Ministry of Customs and Trade of Republic of Turkey, 10. Taking a resolution on appintment of an independent auditing firm, carried out by the Board of Directors as per the Turkish Commercial Code and the arrangements provided by the Capital Markets Board, 11. Taking a resolution on the Internal Directive pertaining to the General Assemblies which has been prepared by the Board of Directors and whereby the working principles and procedures concerning the Company s General Assemblies are determined, 12. Furnishing information to the shareholders in respect of the Compensation Policy pertaining to the Members of the Board of Directors and Top Executives, 13. Furnishing information to the shareholders in respect of the associated party transactions that are continuous and common, within the scope of the arrangements provided by the Capital Markets Board, 14. Furnishing information to the shareholders in respect of the Company s 2Company Information Policy as per the Corporate Governance Principles, 15. Furnishing information to the shareholders in respect of the donations granted within the year, as per the arrangements provided by the Capital Markets Board and; determination of the limits pertaining to the donations to be granted in 2013, 16. Furnishing information to the shareholders in respect of the securities, pledges and hypothecates provided in favour of third parties. 78

81 2012 Annual Report Text of Draft Amendment to Articles of Association of Previous Text FOUNDATION Article 1- Founders, whose name, surname, full address and nationality are shown below, founded a joint-stock company in accordance with provisions of the Turkish Commercial Code related to instant foundation of joint-stock companies. 1- Türkiye fiifle ve Cam Fabrikalar A.fi. Citizen of R.T., Istanbul R ht m Caddesi Karaköy/Istanbul 2- Çay rova Cam Sanayii A.fi. Citizen of R.T., Gebze Çay rova/gebze 3- Topkap fiifle Sanayii A.fi. Citizen of R.T., Istanbul Davutpafla Caddesi Topkap /Istanbul 4- Cam Pazarlama A.fi. Citizen of R.T., Istanbul Vali Kona Caddesi Niflantafl /Istanbul 5- Paflabahçe Cam Sanayii A.fi. Citizen of R.T., Istanbul Sahip Molla Caddesi Paflabahçe/Istanbul NAME OF THE COMPANY Article 2: Name of the company is Trakya Cam Sanayii Anonim fiirketi. Hereinafter in this articles of association it shall be referred to as the "Company". PURPOSE AND ACTIVITIES Article 3- The following are purpose and activities of the company: 1- Establish, develop glass industry and side, auxiliary, completing, and supply industries directly or indirectly related to this industry, and other industries providing input for these industries, participating in establish industries. 2- Guarantee profitable development and sustainability of the company in cases when needed due to economic conjuncture related to its field of activities by distributing risk, and conduct of other industrial, commercial, and financial activities aimed at using its potential, establishing companies in these fields and participate in established companies. 3- Form economic and social services within the company. In order to achieve these purposes the company may: 1- Establish facilities and companies to conduct commercial and financial activities within the country and abroad. Participate in established companies. Employ foreign experts or personnel if needed. 2- Carry out all industrial, commercial, and financial transactions related to its field of activities. Enter into official and private undertakings. Participate in authorized capital of banks, insurance and other financial organizations. 3- Carry out domestic and overseas sales transactions of the company and its affiliates. Establish companies for this purpose within the country and abroad. Participate in them. Establish warehouse, store, exhibition, representative office, etc. Take necessary measures and establish companies for domestic and foreign supply, customs clearance, and storage of raw materials, auxiliary materials, packing materials, energy, ore, machines, equipment, semi-products, and products related to field of activities of these companies. New Text FOUNDATION Article 1- Founders, whose name, surname, full address and nationality are shown below, founded a joint-stock company in accordance with provisions of the Turkish Commercial Code numbered 6762 related to instant foundation of joint-stock companies. 1- Türkiye fiifle ve Cam Fabrikalar A.fi. Citizen of R.T., Istanbul R ht m Caddesi Karaköy/Istanbul 2- Çay rova Cam Sanayii A.fi. Citizen of R.T., Gebze Çay rova/gebze 3- Topkap fiifle Sanayii A.fi. Citizen of R.T., Istanbul Davutpafla Caddesi Topkap /Istanbul 4- Cam Pazarlama A.fi. Citizen of R.T., Istanbul Vali Kona Caddesi Niflantafl /Istanbul 5- Paflabahçe Cam Sanayii A.fi. Citizen of R.T., Istanbul Sahip Molla Caddesi Paflabahçe/Istanbul NAME OF THE COMPANY Article 2: Name of the company is Trakya Cam Sanayii Anonim fiirketi. PURPOSE AND ACTIVITIES Article 3- The following are purpose and activities of the company: 1- Establish, develop glass industry and side, auxiliary, completing, and supply industries directly or indirectly related to this industry, and other industries providing input for these industries, participating in establish industries. 2- Guarantee profitable development and sustainability of the company in cases when needed due to economic conjuncture related to its field of activities by distributing risk, and conduct of other industrial, commercial, and financial activities aimed at using its potential, establishing companies in these fields and participate in established companies. 3- Form economic and social services within the company. In order to achieve these purposes the company may: 1- Establish facilities and companies to conduct commercial and financial activities within the country and abroad. Participate in established companies. Employ foreign experts or personnel if needed. 2- Carry out all industrial, commercial, and financial transactions related to its field of activities. Enter into official and private undertakings. Participate in authorized capital of banks, insurance and other financial organizations. 3- Carry out domestic and overseas sales transactions of the company and its affiliates. Establish companies for this purpose within the country and abroad. Participate in them. Establish warehouse, store, exhibition, representative office, etc. Take necessary measures and establish companies for domestic and foreign supply, customs clearance, and storage of raw materials, auxiliary materials, packing materials, energy, ore, machines, equipment, semi-products, and products related to field of activities of these companies. 79

82 4- Own necessary concession, permit, trademark license, patents for invention, and other rights. Transfer them to third persons within the country and abroad. 5- Own immovable property and material rights in order to carry out transactions related to its field of activities. Alienate them. Rent them. Provide mortgage, pledge immovable property of other persons in the company s favor, and cancel such pledge, and acquire any rights in relation to them. 6- Enter into construction contracts related to purpose and field of activities of the company. 7- Research and develop mines directly and indirectly related to purpose and field of activities of the company. 8- Establish research centers related its field of activities. Participate in such organizations. 9- Become partner to established or future local and/or foreign companies. Purchase shares and/or other securities provided it does not operate securities portfolio and commissioning activities. Sell its own shares (or participatory shares) or other securities. Transfer them to other persons. Pledge them. Accept pledge. 10- Provide any logistics and transportation services related to its group of companies within above-mentions purpose and fields of activities, and provide the following services for this purpose. a. carry out any domestic and international carriage by land, sea, and air transportation vehicles. b. carry out any loading, unloading, port operation, and customs clearance activities. c. carry out any storage, warehousing, packing, and packaging activities. d. carry out any dealership, representation, agency, and commissioning activities, and make agreements in relation to matters stated in subsections a-b-c above. e. purchase, lease, repair and provide maintenance services for any land, sea, and air transportation vehicles in order to provide the above-mentioned services, carry out import, domestic trade, and representation activities for these vehicles. f. Rent its own land, sea, and air transportation vehicles to other persons and use them in this way. 11- The company may provide warranty for foundation, increase of authorized capital, bank loans, emission of bonds and financial notes, and other debts of stock corporations, in capital and/or management of which it directly or indirectly participates. Matters related to provision by the company of guarantee, warranty or establishing right of pledge including mortgage in its own name or in favor of 3rd persons shall be subject to terms and conditions stipulated under capital market regulations. REGISTERED OFFICE AND BRANCHES OF THE COMPANY Article 4: Registered office of the company is in Istanbul. 4- Own necessary concession, permit, trademark license, patents for invention, and other rights. Transfer them to third persons within the country and abroad. 5- Own immovable property and material rights in order to carry out transactions related to its field of activities. Alienate them. Rent them. Provide mortgage, pledge immovable property of other persons in the company s favor, and cancel such pledge, and acquire any rights in relation to them. 6- Enter into construction contracts related to purpose and field of activities of the company. 7- Research and develop mines directly and indirectly related to purpose and field of activities of the company. 8- Establish research centers related its field of activities. Participate in such organizations. 9- Become partner to established or future local and/or foreign companies. Purchase shares and/or other securities provided it does not operate securities portfolio and commissioning activities. Sell its own shares (or participatory shares) or other securities. Transfer them to other persons. Pledge them. Accept pledge. 10- Provide any logistics and transportation services related to its group of companies within above-mentions purpose and fields of activities, and provide the following services for this purpose. a. carry out any domestic and international carriage by land, sea, and air transportation vehicles. b. carry out any loading, unloading, port operation, and customs clearance activities. c. carry out any storage, warehousing, packing, and packaging activities. d. carry out any dealership, representation, agency, and commissioning activities, and make agreements in relation to matters stated in subsections a-b-c above. e. purchase, lease, repair and provide maintenance services for any land, sea, and air transportation vehicles in order to provide the above-mentioned services, carry out import, domestic trade, and representation activities for these vehicles. f. Rent its own land, sea, and air transportation vehicles to other persons and use them in this way. 11- The company may provide warranty for foundation, increase of authorized capital, bank loans, emission of bonds and financial notes, and other debts of stock corporations, in capital and/or management of which it directly or indirectly participates. Matters related to provision by the company of guarantee, warranty or establishing right of pledge including mortgage in its own name or in favor of 3rd persons shall be subject to terms and conditions stipulated under capital market regulations. 12- The company may make donations according to social responsibility pursuant to procedure and bases stipulated by the Capital Markets Board. REGISTERED OFFICE AND BRANCHES OF THE COMPANY Article 4: Registered office of the company is in Istanbul. Address: Is Kuleleri Kule Levent - Besiktas / Istanbul dur. 80

83 2012 Annual Report The company may establish branches within the county and abroad provided notifying the Ministry of Commerce. TERM Article 5: The company is founded for unlimited term. AUTHORIZED CAPITAL Article 6: The company accepted system of registered capital according to provisions of Capital Markets Law, and implemented this system under permission of the Capital Markets Board dated and number 825. Registered capital of the company amounts to Turkish Liras. This authorized capital is divided into shares each with nominal value of 1 Kurus. Issued capital of the company amounts to Turkish Liras, and this capital is divided into shares to bearer each with nominal value of 1 Kurus Turkish Liras corresponding to issued capital was fully undertaken and paid in. Permission of upper limit for registered capital provided by the Capital Markets Board is valid for years (5 years). Even if upper limit for registered capital is not reached by the end of 2016, it is obligatory to obtain permit of the Capital Markets Board for previously permitted upper limit or new amount of upper limit, and authorization of general meeting for new term in order to take decision of board of directors for increase of authorized capital. In case of failure to obtain this authorization the company shall be considered out of system of registered capital. Board of directors is authorized to take and implement decisions on increasing issued capital by issuing shares to bearer in accordance with provisions of the Turkish Commercial Code and the Capital Markets Law whenever it deems necessary during years of , issuing participation shares with nominal value, and partially or fully limiting right of shareholders to purchase new shares. BOND, PROF T AND LOSS SHAR NG CERT F CATE, AND ISSUE OF FINANCIAL BOND Article 7- The company may issue exchangeable share and other types of bonds, financial note, profit and loss sharing certificate according to legal provisions. Authority to issue exchangeable share and other types of bonds, financial notes is vested upon board of directors in accordance with provisions of the T.C.C. and Law number General meeting may authorize board of directors to stipulate conditions other than maximum amount of profit and loss sharing certificates. BOARD OF DIRECTORS: Article 8: Affairs of the company shall be conducted by board of directors consisting of at least 5 (five) members formed by general meeting of founders according to provisions of the Turkish Commercial Code and regulations of the Capital Markets Board. In case of change of address new address shall be registered in trade registry and announced in Trade Registry Gazette of Turkey and on the company s web site. Notice served to registered and announced address shall be deemed as served to the company. The company may establish branches within the county and abroad provided notifying the Ministry of Commerce. TERM Article 5: The company is founded for unlimited term. AUTHORIZED CAPITAL Article 6: The company accepted system of registered capital according to provisions of Capital Markets Law, and implemented this system under permission of the Capital Markets Board dated and number 825. Registered capital of the company amounts to Turkish Liras. This authorized capital is divided into shares each with nominal value of 1 Kurus. Issued capital of the company amounts to Turkish Liras, and this capital is divided into shares to bearer each with nominal value of 1 Kurus Turkish Liras corresponding to issued capital was fully undertaken and paid in. Permission of upper limit for registered capital provided by the Capital Markets Board is valid for years (5 years). Even if upper limit for registered capital is not reached by the end of 2016, it is obligatory to obtain permit of the Capital Markets Board for previously permitted upper limit or new amount of upper limit, and authorization of general meeting for new term in order to take decision of board of directors for increase of authorized capital. In case of failure to obtain this authorization the company shall be considered out of system of registered capital. Shares representing the capital shall be observed by recording pursuant to terms of registration. EMISSION OF BONDS AND OTHER DEBT INSTRUMENTS: Article 7: The company may issue any type of bonds, financial note, profit and loss sharing certificate, instruments of capital markets and/or securities acceptable by the Capital Markets Board to be sold to natural and legal persons within the country and/or abroad according to provisions of the Turkish Commercial Code, Law on Capital Markets and other current legislation. Authority of emission in capital markets with nature of debt instruments is vested on the Board of Directors in accordance with provisions of Law on Capital Markets. Limit and recorded follow-up of debt instruments to be issued shall be subject to provisions of Law on Capital Markets and other relevant legislation. BOARD OF DIRECTORS: Article 8: Affairs of the company shall be conducted by board of directors consisting of at least 5 (five) members formed by general meeting of founders according to provisions of the Turkish Commercial Code and regulations of the Capital Markets Board. 81

84 Number and qualities of independent members of board of directors shall be stipulated according to regulations of the Capital Markets Board related to corporate governance. TERM AND ELECTION OF BOARD OF DIRECTORS: Article 9- Members of board of directors shall be selected for term of not more than 3 (three) years. In case if any membership becomes vacant or an independent member of board of directors loses his independency election shall be carried out according to provisions of the Turkish Commercial Code and regulations of the Capital Markets Board, and submitted to approval of the first general meeting. Members whose term of service is ended may be reelected. General meeting may replace members of board of directors any time upon its own discretion regardless of term of their office. BINDING OF THE COMPANY Article 10- Representation and binding of the company shall be vested on board of directors elected by general meeting among the company s partners. Signature of person or persons authorized to bind the company put under the company name is required for validity of all documents to be issued and agreement to be made by the company. AUTHORITIES OF BOARD OF DIRECTORS Article 11- Board of directors shall be authorized to take decisions in relation to all matters except those vested on exclusive powers of general meeting under provisions of the Turkish Commercial Code, manage the company, and represent and bind it. Board of directors shall be authorized to conduct the company s activities in accordance with its purpose, keep the company s books and records, prepare balance sheets, appoint and supervise General Director, Director, and other officers of the company, and any other management powers provided by the law and this articles of association. DISTRIBUTION OF POSITIONS AT BOARD OF DIRECTORS Article 12- Board of directors shall elect a chairman and a deputy chairman among its members following general meeting. Board of directors may delegate all or some of authorities to manage and represent the company to one or several of its authorized members, General Director and Directors of the company, and decide to assign some of its members for offices at the company. Term of office of General Director and Directors, and other authorized signatories shall not be limited to term of board of directors office. Signatory authorities of these persons shall be valid until repealed by the board of directors. MEETINGS OF BOARD OF DIRECTORS Article 13- Board of directors shall meet when necessary for affairs and transactions of the company. However, it must meet at least once a month. Number and qualities of independent members of board of directors shall be stipulated according to regulations of the Capital Markets Board related to corporate governance. TERM OF BOARD OF DIRECTORS: Article 9- Members of board of directors shall be selected for term of not more than 3 (three) years. In case if any membership becomes vacant or an independent member of board of directors loses his independency election shall be carried out according to provisions of the Turkish Commercial Code and regulations of the Capital Markets Board, and submitted to approval of the first general meeting. Members whose term of service is ended may be reelected. General meeting may replace members of board of directors any time upon its own discretion regardless of term of their office. REPRESENTATION AND BINDING OF THE COMPANY Article 10: Board of directors shall be authorized to manage and represent the company. Documents and agreements made on behalf of the company must be signed by authorized signatories in order to be valid and binding upon the company. Board of directors shall stipulate authorized signatories on behalf of the company and forms of signature. Such decision of board of directors shall be registered and announced. Board of directors may delegate representation authority to one or more authorized members or third persons acting in capacity of a director. At least one member of board of directors must have representation authority. AUTHORITIES OF BOARD OF DIRECTORS Article 11: Board of directors shall be authorized to take decisions on all matters related to conduct of the company s business except those vested on general meeting according to provisions of law and articles of association. Board of directors may partially or wholly delegate management authority to one or more members of board of directors or third person with an internal directive. Term of office and signatory authorities of general director, directors, and all authorized signatories shall not be limited to office term of members of board of directors. Signatory authorities of such persons shall be valid until repealed by board of directors. The article is omitted from text of the articles of association. MEETING AND ORDER OF WORKING OF BOARD OF DIRECTORS: Article 12: Board of directors shall elect a chairman and a deputy chairman following each General Meeting of Shareholders. However, in case 82

85 2012 Annual Report of dismissal of chairman and/or deputy chairman for any reason board of directors shall hold new election for vacant positions. Deputy chairman shall chair board of directors during absence of chairman. If deputy chairman is also absent, board of directors shall elect a temporary chairman among its members only for that meeting. Date and agenda of board of directors meeting shall be determined by chairman. Deputy chairman shall determine these issues during absence of chairman. However, date of meeting may be determined by decisions of board of directors. Board of directors shall meet whenever necessary for affairs and transactions of the company. However, it must meet at least once a month. Decision of board of directors shall be subject to quorums for meeting and decision stipulated in the Turkish Commercial Code, Capital Markets Law and relevant legislation. Board of directors may establish committees and commissions to conduct the company s business, implement relevant decisions and policies or to supervise them apart from committees and commissions set forth by the Capital Markets Board. Establishment of such committees shall be subject to regulations of the Capital Markets Board. REMUNERATION FOR MEMBERS OF BOARD OF DIRECTORS Article 14- General meeting shall stipulate monthly wage or remuneration for Chairman and members of board of directors, and authorized members. AUDITORS Article 15- General meeting shall elect not more than three auditors among shareholders as well as among third persons for term of three years. DUTIES OF AUDITORS Article 16- Auditors shall be obliged to fulfill duties stated in article 353 of the Turkish Commercial Code, and additionally, submit proposals to board of directors in relation to any measures necessary for good governance of the company and protection of its interests, call the general meeting whenever it is necessary, determine agenda of meeting, and prepare report stated in article 354 of the code. Auditors are obliged to use these powers immediately in case of arising important and urgent reasons. Auditors shall be jointly and severally liable to fulfill duties imposed on them by the law and articles of association. REMUNERATION Article 17- General meeting shall stipulate monthly or annual remuneration of auditors. GENERAL MEETING Article 18- General meetings shall be held ordinary and extraordinary. Ordinary general meetings shall be held as required by provisions of the Turkish Commercial Code, the Capital Markets Law, and other relevant regulations. Extraordinary general meetings shall be held as necessary for affairs of the company according to provisions of the code and this articles of association, and relevant decisions shall be taken. Authorized members and at least one member of REMUNERATION FOR MEMBERS OF BOARD OF DIRECTORS Article 13: General Meeting of Shareholders shall decide on remuneration, bonus, and share from annual profit for members of board of directors in accordance with provisions of the Turkish Commercial Code, Capital Markets Law and other relevant legislation. AUDIT Article 14: Audit of the company shall be carried out in accordance with provisions of the Turkish Commercial Code, Capital Markets Law and other relevant legislation applicable to the company. The article is omitted from text of the articles of association. The article is omitted from text of the articles of association. GENERAL MEETING Article 15: General meetings shall be held ordinary and extraordinary. Ordinary general meetings shall be held as required by provisions of the Turkish Commercial Code, the Capital Markets Law, and other relevant regulations. Extraordinary general meetings shall be held as necessary for affairs of the company according to provisions of the code and this articles of association, and relevant decisions shall be taken. Authorized members, if any, and at least one member 83

86 board of directors must participate general meeting. Participating general meeting in electronic media: Persons entitled to participate in general meeting may participate in these meetings in electronic media according to article 1527 of the Turkish Commercial Code. The company may establish system of electronic general meeting to enable entitled persons to participate in meeting, express their opinion, submit proposals, and use their votes in electronic media according to Guidelines on General Rules of Holding General Meeting of Joint-Stock Companies in Electronic Media, and purchase service from services established for this purpose. Use of rights of entitled persons and their representatives stipulated in the said Guidelines through established systems shall be ensured according to this provision of the articles of association. PLACE OF MEETING Article 19- Place of general meeting shall be corporate seat of the company. However, board of directors may call general meeting at another place of the city where corporate seat of the company located or in another city. COMMISSIONER Article 20: Presence of commissioner of the Turkish Ministry of Commerce at ordinary, as well as extraordinary general meetings, and signing minutes of meetings together with other relevant persons is obligatory. Decisions taken at general meetings held in absence of a commissioner and minutes of meetings, which do not bear a commissioner s signature shall not be valid. QUORUM: Article 21- Quorum for general meetings and decisions at these meeting shall be subject to provisions of the Turkish Commercial Code and the Capital Markets Law. VOTING Article 22- Appointment of representative for ordinary and extraordinary general meetings; Shareholders or their representatives present at general meeting shall have one vote for each share. VOTING Article 23- Shareholders may appoint representatives among other shareholders or third persons for attending general meetings. Representatives that are shareholders of the company shall be entitled to use own votes and votes of shareholders whom they represent. ANNOUNCEMENT Article 24 Announcements of the company shall be published in Turkish Trade Register Gazette and Internet sites according to regulations of the Capital Markets Board subject to provisions of article 37 of the Turkish Commercial Code. Announcements related to invitation for general meeting shall be made at least three weeks beforehand excluding days of announcement and meeting subject to regulations of the Capital Markets Board and article 368 of the Turkish Commercial Code. of board of directors and independent auditor must participate in general meeting. Participating general meeting in electronic media: Persons entitled to participate in general meeting may participate in these meetings in electronic media according to article 1527 of the Turkish Commercial Code. The company may establish system of electronic general meeting to enable entitled persons to participate in meeting, express their opinion, submit proposals, and use their votes in electronic media according to Guidelines on General Rules of Holding General Meeting of Joint-Stock Companies in Electronic Media, and purchase service from services established for this purpose. Use of rights of entitled persons and their representatives stipulated in the said Guidelines through established systems shall be ensured according to this provision of the articles of association. PLACE OF MEETING Article 16: Place of general meeting shall be corporate seat of the company. However, board of directors may call general meeting at another place of the city where corporate seat of the company located or in another city. REPRESENTATIVE OF THE MINISTRY: Article 17: Presence of representative of the ministry at General Meetings of Shareholders shall be subject to regulations of the Ministry of Customs and Trade. QUORUM: Article 18: Quorum for general meetings and decisions at these meeting shall be subject to provisions of the Turkish Commercial Code and the Capital Markets Law. VOTING: Article 19: Shareholders or their representatives present at ordinary and extraordinary general meetings shall have one vote for each share. The article is omitted from text of the articles of association. ANNOUNCEMENT: Article 20: Announcements of the company shall be made in according to regulations of the Capital Markets Board subject to provisions of the Turkish Commercial Code related to announcements. Announcements related to invitation for general meeting shall be made in accordance with provisions of the Turkish Commercial Code, Capital Markets Law and other relevant legislation. 84

87 2012 Annual Report FORM OF VOTING Article 25- Voting at general meetings shall be made by raising hands. However, verbal voting may be implemented upon request of shareholders present at meeting who represent at least on tenth of authorized capital. AMENDMENT OF ARTICLES OF ASSOCIATION Article 26- Any amendment and implementation of this articles of association shall be subject to permit of the Ministry of Trade and Industry. Such amendments shall be valid as of announcement date after due approval and registration at trade registry. ANNUAL REPORTS Article 27- Board of directors and auditor s reports, annual balance sheet, minutes of general meeting, table containing names and shares of partners present at general meeting shall be sent in triplicate to the Ministry of Commerce not later than a month from date of meeting or shall be submitted to a commissioner participated the meeting. ANNUAL REPORTING PERIOD Article 28- Reporting year of the company shall commence on the first day of January and end on the last day of December. However, the first reporting year shall commence from date of final foundation of the company and end on the last day of December of that year. DISTRIBUTION OF PROFIT AND RESERVE FUND Article 29- Amount obtained after deducting general expenses of the company, depreciation costs, and other necessary amounts from revenue gained from transactions within a balance period shall make up net profit of the company. Relevant allocations shall be deducted from net profit determined in this way according to the following order. a) 5 per cent shall be allocated to legal reserve fund and for financial liabilities of the company. b) 1st dividend shall be paid from remaining amount according to provisions of Law number 2499 and regulations of the Capital Markets Board effective as of date of determining dividend. c) The remaining amount of the profit may be fully or partly distributed to shareholders as second dividend, or may be used for extraordinary needs. FORM OF VOTING: Article 21: Voting at general meetings shall be made openly and by raising hands. However, secret voting may be implemented upon request of shareholders present at meeting who represent at least on tenth of authorized capital. Regulations of the Capital Markets Board shall apply therewith. Voting at General Meeting of Shareholders shall be subject to regulations of the Capital Markets Board and provisions of the Turkish Commercial Code. IMPORTANT TRANSACTIONS Article 22: Transactions accepted as important transactions under capital markets legislation and any interested party transactions of the company shall be fulfilled according to procedures stipulated by decisions taken pursuant to relevant regulations of the Capital Markets Law. AMENDMENT OF ARTICLES OF ASSOCIATION Article 23: Completion and implementation of any amendments to this articles of association shall be subject to provisions of the Turkish Commercial Code and Capital Markets Law. Any such amendments shall be valid as of registration date at trade registry following approval according to stipulated order. APPOINTMENT OF REPRESENTATIVE Article 24: Shareholders may be represented at general meetings by other shareholders or third persons. Representatives that are shareholders of the company shall be entitled to use own votes and votes of shareholders whom they represent. Board of directors shall stipulate and announce form of authorization document subject to regulations of the Capital Markets Board related to voting by representation at public joint-stock companies and provisions of the Turkish Commercial Code in relation to general meetings to be held in electronic media. The article is omitted from text of the articles of association. ANNUAL REPORTS Article 25: Reporting year of the company shall commence on the first day of January and end on the last day of December. DISTRIBUTION OF PROFIT: Article 26: Distribution of profit at the company shall be fulfilled according to decision of General Meeting of Shareholders taken based on board of directors proposal submitted within the framework of profit distribution policy set forth by general meeting pursuant to provisions of the Turkish Commercial Code, Capital Markets Law and other relevant legislation applicable to the company. Dividend advance may be distributed in accordance with procedures and conditions stipulated in capital markets legislation. 85

88 d) Provisions of Section 3 of Article 466 of the Turkish Commercial Code shall apply. e) Legal reserve fund shall be allocated by the company until it reaches 20 per cent of the company s authorized capital. DATE OF DISTRIBUTION OF PROFIT Article 30- General meeting shall decide on date and form of distributing annual profit among partners according to proposal of board of directors. Profit distributed according to provisions of this articles of association shall not be taken back. Provisions of Article 473 of the Turkish Commercial Code shall apply therewith. TO THE MINISTRY Article 31- The company shall print this articles of association, provide them to partners, and send ten copies to the Ministry of Commerce. LEGAL PROVISIONS Article 32- The matters that are not stipulated in these articles of association shall be subject to provisions of the Capital Markets Law and the Turkish Commercial Code. CONFORMITY WITH PRINCIPLES OF CORPORATE GOVERNANCE Article 33- Principles of Corporate Governance stipulated as mandatory by the Capital Markets Board shall be observed. Transactions conducted and decisions of board of directors taken contrary to obligatory principles shall be deemed invalid and contrary to the articles of association. Regulation of the Capital Markets Board in relation to corporate governance shall be observed in transactions deemed important in regard to implementation of Corporate Governance Principles, transactions to which the company is a party, and transactions related to providing guarantee, pledge, and mortgage in favor or third persons. DATE OF DISTRIBUTION OF PROFIT Article 27: General meeting shall decide on date and form of distributing annual profit among partners according to proposal of board of directors submitted pursuant to regulations of the Capital Markets Board. Profit distributed according to provisions of this articles of association shall not be taken back. Provisions of the Turkish Commercial Code related to right of return shall apply therewith. The article is omitted from text of the articles of association. DECISION ON LIQUIDATION: Article 28: The company shall be liquidated due to reasons stated in the Turkish Commercial Code or according to court s decision or decision of General Meeting of Shareholders taken in accordance with relevant provisions of the Turkish Commercial Code. LIQUIDATION OFFICER Article 29: If the company is liquidated or terminated due to any reason except bankruptcy, liquidation officers shall be appointed by General Meeting of Shareholders. RESPONSIBILITY OF LIQUIDATION OFFICERS Article 30: Liquidation of the company, form of liquidation, and responsibility of liquidation officers shall be stipulated in relevant articles of the Turkish Commercial Code. LEGAL PROVISIONS Article 31: The matters that are not stipulated in these articles of association shall be subject to provisions of the Turkish Commercial Code, Capital Markets Law, and other relevant legislation. CONFORMITY WITH PRINCIPLES OF CORPORATE GOVERNANCE Article 32: Principles of Corporate Governance stipulated as mandatory by the Capital Markets Board shall be observed. Transactions conducted and decisions of board of directors taken contrary to obligatory principles shall be deemed invalid and contrary to the articles of association. Regulation of the Capital Markets Board in relation to corporate governance shall be observed in transactions deemed important in regard to implementation of Corporate Governance Principles, transactions to which the company is a party, and transactions related to providing guarantee, pledge, and mortgage in favor or third persons. 86

89 2012 Annual Report Contact Information for Trakya Cam Group of Companies / Plants Head Office Activity: Management and Sales Adress: fl Kuleleri Kule 3, 34330, 4. Levent - stanbul, Turkey Phone: (0212) Fax: (0212) Trakya Plant Products: Float glass, laminated glass, mirror Adress: Büyükkar flt ran Mevkii, P.K , Lüleburgaz - K rklareli, Turkey Phone: (0288) Fax: (0288) Automotive Glass Plant Products: Automotive glass Adress: Büyükkar flt ran Mevkii, P.K , Lüleburgaz - K rklareli, Turkey Phone: (0288) Fax: (0288) Mersin Plant Products: Float glass, patterned glass, solar glass Adress: Mersin Tarsus Organize Sanayi Bölgesi, Atatürk Caddesi No , Akdeniz Mersin, Turkey Phone: (0324) Fax: (0324) Trakya Glass Bulgaria EAD Flat Glass Plant Products: Float glass, mirror Adress: District Vabel Industrial Area, 7700 Targovishte - Bulgaria Phone: Fax: Trakya Glass Bulgaria EAD Glass Processing Plant Products: Home appliances glass Adress: District "Vabel" Industrial Area, 7700 Targovishte - Bulgaria Phone: Fax:

90 Trakya Glass Bulgaria EAD Automotive Glass Plant Products: Automotive glass Adress: District "Vabel" Industrial Area, 7700 Targovishte, Bulgaria Phone: Fax: Trakya Yeniflehir Cam Sanayii A.fi. Products: Float glass, laminated glass, coated glass Adress: Atatürk Organize Sanayi Bölgesi 16900, Yeniflehir - Bursa, Turkey Phone: (0224) Fax: (0224) Trakya Glass Logistics EAD Activity: Adress: Transportation of jumbo-sized glass District Vabel Industrial Area, 7700 Targovishte - Bulgaria Phone: Fax: Glass Corp S.A. Activity: Production and sales of automotive glass, home appliances glass Adress: 1BIS, Industriilor Alley, Buzau/Romania Phone: Fax: