responsibility We add value to our costomers projects. ANNUAL REPORT 2007

Transcription

1 responsibility We add value to our costomers projects. ANNUAL REPORT 2007

2 Contents 01 Agenda 02 Çimsa in Brief 03 Financial Highlights 04 Milestones 06 Message from the Chairman 08 Board of Directors and Audit Committee 09 Senior Management 11 Worldwide Developments in the Cement Industry in Developments in the Turkish Cement Industry in From an Investors Perspective 14 Activities in Our Production Plants 14 Çimsa Mersin Plant 16 Çimsa Kayseri Plant 17 Çimsa Eskiflehir Plant 18 Çimsa Ni de Plant 20 Ankara Cement Grinding and Packaging Facility 20 Çimsa Plant Information 21 Sales Production Figures 21 Capacity Utilization Rates of Rotating Kilns in Malatya Cement Packaging Plant 23 Products 26 Ready-Mixed Concrete 29 Cement and Ready-Mixed Concrete Plants 31 Investments in Organizational Studies and Training 32 Çimsa Development Programs 32 Senior Management Development Programs 32 Learning Organization Training 32 Behavioral and Vocational Training 34 Learning Organization Project 37 A New Performance Criterion: Measurement of the Organizational Climate 39 Çimsa s Strategy Map 41 Links and Terminals Abroad 41 Çimsa Cementos Espãna S.A.U. - Spain 41 CSN Cement Sales North GmbH - Germany 41 Çimsa Cement Free Zone Ltd - Cyprus 41 C MSAROM Marketing Distributie S.R.L. - Romania Marketing Activities 47 Report on Compliance with Corporate Governance Principles 54 Annual Report Consolidated Financial Statements Together with Peport of Independent Auditors 103 Domestic Selling Points and Suppliers 128 Abroad Supply Points and Telephone Numbers

3 AGENDA Ç MSA Ç MENTO SANAY VE T CARET A.fi. The agenda was reviewed at the Board of Directors Meeting number 1128 on March 18, 2008 and submitted to the General Assembly for endorsement. The Agenda of the Regular General Assembly to be held at hours on Tuesday, April 8, AGENDA: 1- Call to order and composition of the Administrative Board, 2- Authorization of the Administrative Board to approve the meeting minutes 3- Reading and discussion of the Board of Directors' Annual Report and the Auditors' Reports, 4- Reading, discussion and approval of the balance sheet and income statement; consideration of and decision on the dividend distribution proposal, 5- Release of Board of Directors and Auditor Committee from their liabilities 6- General Assembly ratification of the board members elected by the board of Directors to replace the outgoing members, 7- Re-election of board members whose terms have expired and specification of their new terms, 8- Re-election of members of the Audit Committee whose terms have expired and specification of their new terms and compensation, 9- Informing shareholders of donations made during the year, 10- Ratification of the independent auditing company selected by the Board of Directors, 11- Authorization of the Chairman and Members of the Board of Directors to conduct procedures set out in articles 334 and 335 of the Turkish Commercial Code. Authorized Capital Ceiling : TRY 200,000,000 Issued Capital : TRY 135,084,442 Date of Incorporation : December 21, 1972 Plant Location : Yenitaflkent Beldesi, Mersin / TURKEY Tel: +90 (324) (pbx) Fax: +90 (324) Website: Address: Toroslar Mah., Tekke Cad., Yenitaflkent 33013, Mersin, Turkey Annual Report 01

4 Ç MSA IN BRIEF Çimsa aspires to achieve business excellence at an international standard in terms of its Quality Management, Environmental Management, and Occupational Health and Safety Systems. A leading Turkish manufacturer of cement and ready-mixed concrete products, Çimsa produces special products such as white cement and calcium aluminate cement, as well as gray cement. Founded in 1972, the company began operations in In the space of three decades the company has managed to triple its production. Çimsa is the market leader in the production of special-type cement, and it currently operates cement and ready-mixed concrete plants in Adana, Mersin, Kayseri, Eskiflehir, Ni de, Ankara, Antalya, Nevflehir, Osmaniye, Kahramanmarafl, Aksaray, Karaman, Konya, Bilecik, and Kütahya. it is an international company creating employment for the national economy of Turkey. Çimsa aspires to achieve business excellence at an international standard in terms of its Quality Management, Environmental Management, and Occupational Health and Safety Systems. The introduction of the waste-burning unit in 2006 has brought significant benefits towards protecting the environment while cutting fuel costs. The company also organizes scores of activities that contribute to the social and cultural development of Turkey. Çimsa exports cement to thirty-five countries. As illustrated by its most recent investment of US$ 80.2 million, Çimsa Cement Net Sales and EBITDA (US$ Million) 450 Net Sales - US$ Million EBITDA - US$ Million Cumulative Average Growth Rate Net Sales : %15 EBITDA : % Annual Report Note: the figures are stand-alone values between 1997 and 2002, and consolidated figures for 2003 and after.

5 FINANCIAL HIGHLIGHTS (Currency- New Turkish Lira (TRY)) Key Balance Sheet Indicators Cash and Cash Equivalents 56,106,226 53,748,963 Marketable Securities (net) - - Trade Receivables (net) 84,778,910 64,351,750 Inventory (net) 89,401,544 59,283,064 Current Assets Total 268,317, ,731,229 Financial Assets (net) 289,655, ,250,857 Property, Plant and Equipment (net) 420,086, ,312,729 Intangible Assets (net) 20,396,240 21,602,208 Fixed Assets Total 863,357, ,661,786 Total Assets 1,131,674, ,393,015 Shareholders' Equity 926,572, ,697,758 Key Income Statement Indicators Sales (net) 574,985, ,447,540 Income and Profit from Other Operations 167,391,122 21,868,675 Operating Profit before Tax 331,569, ,936,552 Net Profit for the Year 290,274, ,096,434 Total Assets Shareholders' Equity Sales (Net) Net Profit for the Year 1,200,000,000 (TRY) (TRY) (TRY) (TRY) 1,000,000, ,000, ,000, ,000, ,000, Annual Report 03

6 MILESTONES 1972 The company is established in Mersin Production commences with an annual production capacity of 1,000,000 tons Coal mill enters operation at the plant to bring down costs. Kiln units are installed Construction work starts on ready-mixed concrete plants Grey/white cement clinker production plant entered operation, producing world-class white cement, and gray cement as required Quality assurance system is established; the company gains the TS-EN-ISO 9002 Quality Assurance System Certificate Grinding/packing plant acquired in Kayseri A 500,000 tons capacity storage/packing plant in Antalya is acquired, in addition to another packing plant in Malatya Çimsa becomes the world's largest white cement producer under one roof with the establishment of the Hac Sabanc Production Plant, Çimsa's second white cement production line The quality assurance system is revised in accordance with the new ISO 9000 standard in order to convert to a quality management system. The Company is also awarded the TS-EN-ISO 9001:2000 Quality System Certificate. Production commences at a new plant, manufacturing calcium aluminate cement, a special type of hydraulic binder resistant to high temperatures, chemical corrosion and water, and that can rapidly reach high compressive strength Closure of storage and packaging facility in Antalya. Initiation of the Work Excellence Project which accelerates and enhances performance as well as ensuring greater job security Çimsa submits the highest bid in a Turkish Saving Deposits Insurance Fund auction of Standart Cement (the Eskiflehir Cement Plant and the Ankara Cement Grinding Facility), resulting in Çimsa's acquisition of Standart Cement, which now supplies its products to the market under the Çimsa brand. A completely new gray clinker production plant with a daily capacity of 1,800 tons is established in Kayseri. Hence, the existing cement grinding and packing plant becomes an integrated plant by the end of the year, reaching an annual capacity of 600,000 tons of clinker production. To increase ready-mixed concrete production and capacity, ready-mixed concrete plants enter service in Osmaniye and Kahramanmarafl. In addition, one mobile concrete terminal, two concrete pumps and 10 mixers are added to the production and services fleet. Dust and gas emissions released during operations are brought under control thanks to electro-filters and bag filters. As part of a systematic approach to protect and preserve the environment and individual health and to raise awareness among employees, the company established the TS-EN-ISO Environment Management System and attained certification. 04 Annual Report

7 To ensure the safety of employees, contracted employees and visitors, the company implemented the TSE Occupational Health and Safety Management System and attained certification. Çimsa obtained an Alternative Fuel Usage Certificate from the Ministry of Environment and Forestry enabling the incineration of category I and II waste oil. Erçim Çimento Sanayi Ltd. fiti., based in the Turkish Republic of Northern Cyprus, was acquired becoming the first international Çimsa subsidiary A new cement mill with a capacity of 100 tons per hour and a clinker silo with a capacity of 70,000 tons were built in Kayseri. A new cement mill with an 85 ton per hour capacity, a new cement storage plant with a capacity of 5,000 tons, and a closed trass (natural puzzolanic) silo were added to the Ankara Facility. Our second international subsidiary, Cimsarom Marketing Distributie S.R.L. was established in Romania. A 50% stake in the Germany-based Cement Sales North GmbH was acquired in June 2006, making it the third international subsidiary. Exportaciones Sabanc S.A., located in Spain, was acquired to become Çimsa's fourth international subsidiary. License to Use Alternative Fuels as Supplementary Fuels was obtained for Plant I in Mersin. The ncirlik Ready-Mixed Concrete Plant entered operation. In addition, the Tarsus Ready-Mixed Concrete Plant was purchased and the Bat kent Ready-Mixed Concrete Plant was leased. Twenty-five mixers and two pumps were bought for readymixed concrete operations An agreement was signed with Loesche in April for the modernization of the Mersin Cement Mill III. The project is set for completion in mid Investment for modernizing Production Line I in Eskiflehir Plant was completed in May; the plant went back into operation. The new 85 tons per hour capacity cement mill in Eskiflehir was operating by the end of May. The new Production Line II went into operation in Mersin to produce calcium aluminate cement, a special type of hydraulic binder resistant to high temperatures, chemical corrosion and water, and that can rapidly reach high compressive strength. An agreement was signed with FLS at the end of July to renovate the clinker cooling and kiln units of the Mersin Production Facility I. The project is set to be completed in early In Eskiflehir, the new coal mill, with a grinding capacity of 40 tons of petroleum coke per hour to serve both production lines, went into service at the end of October. Oysa Ni de Cement Factory was taken over at the beginning of November under the name of Çimsa Çimento San ve Tic. A.fi. Ni de Cement Factory. The investment in Production Line II, with a production capacity of 2,300 tons of clinker per day, was completed in Eskiflehir, and the facility was operating by the end of the year. Construction began on a 600 tons cement silo at the Malatya Terminal, to be finished in February Operations were underway to establish new cement terminals in Spain (Alicante), Romania (Constanta) and Russia (Novorossiysk). License to Use Alternative Fuels as Supplementary Fuels obtained for Plant I in Mersin in 2006 was revised to extend its scope. New ready-mixed concrete plants were opened in Bilecik, Silifke, Karahan, and Kütahya plants. Twenty new trans-mixers and two concrete pumps were added to the fleet of vehicles. Twenty mixers and two pumps were bought for readymixed concrete operations. Twenty-seven mixers and five pumps were taken over from Oysa. Silifke and Ambarl Plants went into operation. Plants were taken over from Oysa in Aksaray, Karaman, and Ere li on November 1, P nar Ready-Mixed Concrete in Bilecik was taken over on May 17, The lease of a plant in Kütahya on November 1, 2007 concluded the plant purchases and leases for Annual Report 05

8 MESSAGE FROM THE CHAIRMAN To efficiently manage the synergy and coordinate our increasing number of plants in Turkey, our headquarters was moved to Istanbul and work to create the infrastructure for growth abroad is underway. Dear Shareholders, Cement consumption is rising around the world. In Turkey, too, the cement sector has been among the most vibrant in the past few years. Cement consumption in Turkey demonstrated consistent double-digit growth from 2004 to 2006 and, despite the economic difficulties, it grew by 2% in 2007, surpassing 42 million tons. We believe that in the forthcoming years, provided macroeconomic policies continue with structural reforms that strengthen competition, reliability, and investment in business, cement consumption per capita in Turkey will rise from the current level of 650 kg to kg, as seen in the EU. Although this bright picture of rising demand is overshadowed in part by the new production capacity of 8-10 million tons that will come on line in the short-term, we still view the future positively. By the end of 2005, we invested approximately US$ 100 million in our Eskiflehir and Ankara plants, purchased from the Saving Deposits Insurance Fund. As a result of these investments in clinker lines and mills, our clinker and cement grinding capacity has tripled. These investments and the improved capacity utilization lowered fuel and coal consumption. After the Saving Deposits Insurance Fund handed over these two plants, their high dust emissions were reduced to levels compliant with environmental standards. In all markets where we operate we continued to expand our ready-mixed concrete business, led by Eskiflehir, Bilecik, and Kütahya, through takeovers and building plants. In 2007, the merger with Oysa was completed and the Ni de plant was incorporated into Çimsa. To efficiently manage the synergy and coordinate our increasing number of plants in Turkey, our headquarters was moved to Istanbul and work to create the infrastructure for growth abroad is underway. In 2008, we will grow via new investments in the Mediterranean and Black Sea basins, and enlargement of our terminal network in Germany, Spain, Romania, and TRNC. 06 Annual Report

9 As one of the three key players in the global white cement sector, Çimsa's sales exceeded one million tons in Similarly we have become the biggest supplier in the calcium aluminate cement sector, which we entered relatively recently. In order to meet increasing export demand, a second kiln came on stream doubling our capacity. Following Ekobeyaz, we marketed Ekoharç maintaining our efforts to offer our customers economic and ecological products. Our turnover reached US$ 440 million and our operational profit (EBITDA) attained the US$ 163 million mark. While growing, we aim to make contributions that create benefits for the future. To this end we support formal and vocational education activities and environmental projects, especially in the regions where we operate. In recognition of social responsibilities, we have contributed to the preservation of the natural habitat in those of our plants which were awarded the License to Use Wastes as Supplementary Fuels. In Mersin, 50,000 saplings are being planted for the rehabilitation of quarries. An artificial lake is being made out of the old clay furnace in the Eskiflehir plant to create a new habitat for diverse animal and plant species compatible with the geography, on 50,000 m 2 of land. For many years, we have organized panels, contests, and sponsorship activities to help preserve our artistic and cultural heritage and to support new talent. The most recent link in this chain of events was the sponsorship of a book entitled, A Historic Tour of the Asian Side of Istanbul by Gönül Hal c. Within this framework, we continued our sponsorship for the 2007 Archiprix-Turkey Architecture Students Graduation Projects Contest. We are delighted with the achievement of rem Yak c, whom we have supported since She was 73rd in the category for 10-year-olds at the 2007 World Chess Championships, in which 105 contestants from 52 countries participated. In the Turkish Championship she took second place, earning a place on the Turkish National Chess Team. I thank everyone who contributed to and supported Çimsa's growth objectives. Best regards, Erhan Kam fll Chairman of the Board Annual Report 07

10 BOARD OF DIRECTORS AND AUDIT COMMITTEE Board of Directors 1 Erhan Kam fll Chairman 2 Mehmet Göçmen Vice Chairman 3 M. Nedim Bozfak o lu Member 4 Tamer Güven Member 5 Y lmaz Külcü Member 6 Mehmet Hac kamilo lu General Manager Audit Committee Mehmet Sert Auditor Bahad r Boran Auditor 08 Annual Report

11 SENIOR MANAGEMENT Mehmet Hac kamilo lu General Manager 2 Hüseyin Özkan Assistant General Manager (Marketing and Sales) 3 Basri Dinçer Assistant General Manager (Cement Production) 4 Tamer Denizci Assistant General Manager (Financial and Administrative Departments) 5 fiahap Sar er Assistant General Manager (Ready-Mixed Concrete) 6 Mutlu Do ruöz Assistant General Manager (Investment and Automation) 7 Mehmet fiahin Plant Manager (Kayseri) 8 Fikret Uluakay Plant Manager (Eskiflehir) 9 Do an Özkul Plant Manager (Ni de) 10 Naci Rüzgar Plant Manager (Ankara) Annual Report 09

12 MERS N 1,543 1,589 1,640 1,680 1,832 2,012 2,110 2,278 2,557 performance In each and every task, our aim is high performance. 2,755 2,934 Global Cement Consumption (in millions of tons) T 07T 08T Source: The Global Cement Report, 7th Edition, 2007

13 WORLDWIDE DEVELOPMENTS IN THE CEMENT INDUSTRY IN 2007 Another good year... What about 2008? A shining star in the business firmament over the last few years, the global cement sector continued to bustle in Regardless of world economic growth of 5.1%, the global construction sector is still making baby steps for the most part, particularly in emerging economies and Asian countries. Urbanization, the massive shortage of housing stock, and expanding infrastructural investments keep the demand for construction materials alive. One view of the cement sector reveals that global consumption in 2007 decelerated slightly due to economic developments, with growth falling back to 7.7% to total 2.76 billion tons. Although demand for cement has been strong in many developed or developing countries, it has slid in the USA - traditionally one of the biggest markets for cement - under the impact of the housing market turmoil. The dynamism of Asian economies, a driving force in the growth of the global economy, broke the shipping costs records set in Since the cost of transporting raw materials spiked, especially between Latin America (e.g. Brazil) and Asia, transportation costs in the cement sector (for raw materials, fuel, and also for export) were exorbitant and it also became difficult to find ships to fix cargoes. On top of this, soaring oil and coal prices drove cement production costs up still further up. However, increased oil revenue caused construction work in oil producing Middle Eastern countries and Russia to boom, heightening the demand for cement. the big cement producers more obvious. To reinforce their market position in developed countries, they have vertically integrated in ready-mixed concrete and aggregates, while shifting cement production to developing markets. The takeovers of Orascom (active in developing markets) and Hanson PLC (producer of construction materials) by Lafarge and HeidelbergCement, respectively, are the best examples of this strategy. Influenced by debates around shrinking fossil-fuel levels, the Kyoto Protocol, and the restrictions on CO 2 emissions, the issues of using alternative raw materials and fuels, and the production of cement with higher quantities of admixtures have stayed at the top of the agenda for the cement sector. The global economic unrest surfacing towards the end of 2007, the mortgage crises, and the slowing world economy hint that 2008 will be tough in general, and the abundance of liquidity will dwindle. For the cement sector specifically, the leaps in prices of oil, fuels, raw materials and freight, and the fact that capacity investments made recently will come on line, cast a question mark over Global economic developments and their effect on the construction sector in recent years have made the general strategies of Annual Report 11

14 DEVELOPMENTS IN THE TURKISH CEMENT INDUSTRY IN 2007 Housing construction fueled cement consumption Running parallel to GNP and the construction sector, cement consumption in Turkey recorded the highest level in its history in 2006 with growth of 19%. As GNP rose 4% by the third quarter of 2007, the construction sector grew by 11.5% acting as an important factor in the increase in domestic cement consumption. In 2007, cement consumption in Turkey stood at about 42 million tons, according to the Turkish Cement Manufacturers Association. The relatively warm winter allowed the construction sector to keep busy, but there was a hiatus when early elections were announced in the second quarter. In previous years, the third quarter was always a time of high demand in the construction and cement sectors. However, the third quarter of 2007 was dampened by the elections and the anticipated demand didn't materialize. Hence, the growth for the first three quarters stayed at 3.6%. Lower than expected consumption in the final quarter brought the annual figure to 42 million tons, only 2% up on Although no cement was imported in 2007, 909,000 tons of clinker was imported to meet demand in the high season. Cement exports were up by 17% to reach 6.6 million tons while clinker exports were up by 1% to total 1.6 million tons. In exports, the Iraqi market remained crucial, while Russia and Syria became more attractive. From the second half of the year, dramatic increases in shipping freight costs, fuel prices (coal, petroleum coke) and, as a result, raw material prices, pushed cement production costs up. Rising fuel and raw material prices will speed up cement producers move to alternative fuels (waste tires, waste oils, industrial waste, etc) and alternative raw materials (slag, fly ash, etc.) Other factors, such as rising electricity prices, will adversely influence cement production costs. The significant development of the Turkish construction and cement sectors in the last four years has proved attractive to new investors. Investment in around 18 million tons of a new clinker capacity is planned for the upcoming years and it is projected that almost half of these investments will come on line in Such a buoyant market has drawn in foreign investors. In 2007, two new international cement producers came to Turkey through partnerships. For 2008, negative developments in the construction and more especially the housing sectors will feed through to the cement sector in parallel with economic trends. This together with the new capacities coming on line in 2008 will induce the sector to turn to exports as an alternative to domestic sales. Domestic Cement Sales and Consumption per Capita Turkey's Cement Exports (million tons) Domestic Cement Sales (thousand tons) Consumption per Capita (kg per capita) Cement Export Clinker Export ,127 31,530 30,999 25,082 26,811 28,106 30,670 35,083 41,610 42,456 45, T Source: Turkish Cement Manufacturers Association, Group Estimate Source: Turkish Cement Manufacturers Association 12 Annual Report

15 FROM INVESTORS PERSPECTIVE JPMorgan We think that the diversity of its product portfolio will partly insulate Çimsa from the uncongenial market conditions that may occur in the domestic market in 2008 and Concurrently, we estimate that Çimsa will expand its main market share. We predict that Çimsa will meet 9% of domestic demand in 2009, as opposed to 5.6% in In 2008, Çimsa will raise its grey clinker capacity to 4.2 million tons in addition to the current capacity of 1.1 million tons. This will place Çimsa in third in the national market in terms of capacity. Deutche Bank The 2007 Third Quarter Financial Results were parallel to our estimates. By the end of the third quarter, Çimsa announcement of TRY 142 million in earnings, TRY 59 million in EBITDA, and TRY 44 million in net profit verified our forecast of TRY 140 million, TRY 60 million, and TRY 42 million, respectively. Finans Investment The Best Cement Company on the Istanbul Stock Exchange Thanks to the diversity of its product portfolio and the balanced distribution of its export and domestic sales, Çimsa was less affected than its competitors by the drop in grey cement prices. We think Çimsa is the best cement company in the sector. Balanced Distribution of Exports and Domestic Sales Due to its flexible production structure, Çimsa has become the third biggest white cement producer in the world. We think that in the period between 2007 and 2009, the company will prevail in the Syrian market, compensating for the fragility of the national market where competition is intense. fl Investment Çimsa is Well-Positioned in Turkey Çimsa has a 20% market share in Anatolia and a 19% share in the Mediterranean region of Turkey, both rapidly growing Turkish regions. The company benefits from the demand for cement, which expands in conjunction with industrialization in those regions. The World's Third Biggest Cement Company With an annual production capacity of 1.1 million tons, Çimsa is the third largest white cement company in the world following Cemex and Aalborg. This commanding competitive advantage has differentiated Çimsa from its rivals and given it a distinct position in the national market. Annual Report 13

16 ACTIVITIES IN 2007 Our Production Plants Çimsa Mersin Plant First Production Line The rotating kiln, which entered production in 1975, has a diameter of 5.25 meters with two cyclone lines, each equipped with four-stage preheating. It has a production capacity of 3,350 tons per day with 10 plant type-unax coolers. In 1983, cool grinding and burning systems were added to the plant to improve fuel efficiency. This kiln burns 100% petrocoke (with 4.5% sulfur content), enabling significant cuts in fuel costs. In 2006 a waste incineration unit was brought into operation, also providing additional income for the plant. In this unit, wastes such as residual petroleum tank sludge, used air bag filters, used shop rags and petroleum spilled soil are burned. Work to increase the capacity of the unit is continuing. The waste menu was expanded in 2007 and work continues on enhancing the capacity of the wasteburning unit. The plant has two crushers, one prehomogenization plant, two ball mills for raw materials, two raw meal silos, and two enclosed stockholes for clinker reserves. The cement grinding process takes place in two ball mills and one vertical mill. The cement conveyance system, which had been pneumatic, was adapted into a system with air slide and elevator delivery in 2004, obtaining savings in electricity. Again in 2004, the number two cement mill was converted into a one-cabin mill and by installing a roller-press system with VSK separator, grinding capacity was improved and energy consumption of the mill was reduced. Produced cement is stored in four 10,000 tons, one 3,000 tons and three 2,000 tons silos. Packing is carried out by five packing machines, each with a capacity of 100 tons per hour and two 1.5 tons big-bag filling machines. Bulk cement is loaded through the filling points below the silo. Limestone and clay are the two main raw materials used during production. Second Production Line The production line consists of crushers, a raw material mill with prehomogenization systems, two raw meal silos, a rotating kiln and a clinker stockhole. It is possible to produce gray or white clinker in the kiln, which entered service in December As a result of improvements to the raw meal conveyance systems in 2003 and 2004, the company was able to cut its electricity consumption. In 2004, a new installation allowed hot waste gas from the clinker cooler to be used in the raw meal mill, which brought significant fuel savings through deactivation of the drying kiln. With the completion of its precalcination modification in 2005, the usage of 4.5% sulphurized petrocoke was improved from 85% to 100%, allowing for considerable fuel savings. 14 Annual Report

17 KAYSER The 'SA' in our name means reliability. reliable One of Mimar Sinan s works

18 OUR PRODUCTION PLANTS (CONTINUED) Third Production Line This line, which entered operation in December 1999, produces white cement. The plant comprises of a crusher, a raw material mill with a pre-homogenization plant, a raw meal silo, a rotating kiln and a stockhole for clinker. A white cement grinding mill with a capacity of 100 tons per hour is also available at the plant. The kiln burns 100% (4.5% sulphur) petroleum coke. Produced white cement is stored in two 5,000 tons silos and one 2,000 tons silo. The packaging unit consists of three packing machines, each with a capacity of 100 tons per hour, and two big-bag filling machines. Bulk cement is loaded through the filling points below the silo. The plant also includes one palletizing machine and one plastic wrapping unit without pallet. Calcium Aluminate Cement Production Plant The plant, which became operational in 2002, comprises of a kiln with a clinker production capacity of 2 tons per hour, a cement mill with a grinding capacity of 5 tons per hour and a packaging unit. In 2007, the second kiln with a clinker production capacity of two tons an hour became operational. Çimsa Kayseri Plant The plant was established by Akçimento, a Sabanc Group company, in It was acquired by Çimsa in It original annual grinding and packaging capacity of 820,000 tons of cement was supplemented in 2005 by a rollerpress to increase the grinding capacity and to reduce energy consumption. Work begun on a clinker production line on October 9, 2004 to transform the plant into an integrated cement plant. After the plant's construction and assembly process was completed, it entered operation, producing its first clinker on December 26, The plant boasts state-of-the-art technology comprising an ILCtype base unit, a low nitrous oxide emission precalcination system, a pre-heater with a fivestage cyclone, and a 55 meters long, 3.6 meters diameter rotating kiln. The plant's initial daily production capacity of 1,800 tons of clinker was increased to 2,000 tons after improvements. In addition, the plant has a raw material crusher with an annual capacity of 300 tons, clay and limestone pre-homogenization facilities, a raw meal mill and a 5,000 tons capacity raw meal silo. The trass mill was modified into a coal mill with a capacity of 20 tons per hour. The clinker cooler is a SF-type grate cooler. A second 110 tons per hour cement mill entered operation in August 2006, in addition to the existing 100 tons per hour ball mill. Again in 2006, a second clinker storage plant with 70,000 tons capacity was added to the existing 65,000 tons capacity unit in order to prevent pollution and maintain the clinker quality. The trass (puzzolanic) silo was converted into a 1,500 tons cement silo in The plant's packaging unit has two automatic rotary packers with a capacity of 100 tons per hour, and three bulk cement loading stations are available. The plant produces CEM I 42.5N Portland, CEM II/B-M (P-L) 32.5R and CEM II/A-M (P-L) 42.5R composite Portland cement. Production of masonry cement (Ekomasonry) TS EN MC 12.5X has also begun. 16 Annual Report

19 In 2007, the Kayseri plant broke a record by producing 766,000 tons of clinker, 27% above its capacity at founding. Moreover, waste burning operations were carried out in The Alternative Fuel Burning Operation License was obtained. Initially limited to waste oils and contaminated waste, successful trial burns allowed the license's scope to be extended to burn waste oils, contaminated waste, dye stuff, sludge, refinery waste, and scrap tires as secondary fuels. Çimsa Eskiflehir Plant The Eskiflehir Plant is located 22 kilometers along the Eskiflehir-Istanbul highway on a site of about 1,800 m 2. Having entered operation in 1957, the plant utilized a 3.6 meters diameter, 125 meters long (German MIAG technology) wet kiln with an annual capacity of 150,000 tons until The total annual production capacity of the line was raised to 425,000 tons in 1976 with the addition of a 3.6 meters diameter, 52 meters long MIAG technology three-graded pre-heater dry kiln with an annual production capacity of 275,000 tons. A surge in energy prices in the 1980s and technical developments in the sector encouraged the replacement of the dry system production line's preheater with the Polysius four-graded pre-calcination pre-heater in Following this and other modifications, the line's annual production capacity was expanded to 440,000 tons. The wet kiln unit, by then economically and functionally obsolete, was halted and uninstalled in Subsequently: In 1990, the laboratory building was refurbished. Automation by FLS technology was put in use for laboratory and process management. In 1994, the Polycom roller pres clinker precrusher became operational, raising the first cement mill's capacity from 27 to 40 tons per hour and the second cement mill's capacity to 95 tons per hour. In 1997 preparations and plans to raise the clinker capacity of the production line from 1,400 tons per day to 1,950 tons per day were completed. However, these plans were only partially realized due to financial constraints. Currently, the kiln has a daily production capacity of approximately 1,500 tons per day. In 1998, the capacity of the second cement mill was raised from 60 to 75 tons per hour after transforming it into a closed circuit system with the addition of a Polysius Sepol dynamic separator. On December 22, 1999, Esbank was transferred to the Banking Regulation and Supervision Board (BDDK). Esbank was the majority shareholder in Eskiflehir Cement. This company eventually transferred from the BDDK to the Rumeli Corporation, and then to the Saving Deposits Insurance Fund. Finally, on December 27, 2005, Çimsa acquired the plant. The plant was able to produce a record 486,000 tons of clinker in the first year following its acquisition by Çimsa. In order to meet regional demand and be prepared for upcoming years, the following steps were taken to grow capacity by 30% and they were completed in May 2007: Installation of a new dynamic separator in place of the old static separator located in the raw material mill Annual Report 17

20 OUR PRODUCTION PLANTS (CONTINUED) Renewal of the pre-heating units and expansion and renovation in the first stage cyclones Replacement of the existing clinker cooler with a new high efficiency clinker cooler unit Installation of a new electro filter in the kiln unit Replacement of burning dosage system and kiln burner Setting up a new closed-circuit cement mill with a capacity of 85 tons per hour in addition to the present two cement mills On November 6, 2006, similar to the investment made in the Kayseri production line, the following were completed for usage at the end of the year: The establishment of a new coal mill with a capacity of 40 tons per hour that can feed production lines I and II Raw meal crusher and conveyance systems with a capacity of 750 tons per hour (which will support both production lines) and 2 x 20,000 tons of mix materials, 2 x 4,000 tons of calcareous homogenization plants and raw meal conveyance systems A new clinker production line with an output capacity of 2,300 tons of per day. The Eskiflehir Plant's production capacity was raised from an initial 480,000 tons of clinker, to 700,000 tons of clinker in 2006, to 1.4 million tons of clinker in the last two years. The plant produces three types of cement, CEM I 42.5R Portland cement, CEM II/B-M (PL) 32.5R composite Portland cement and MC 12.5X Masonry cement. The products are mainly marketed in Eskiflehir, Kütahya, Bilecik, Sakarya, and Ankara. Çimsa Ni de Plant Turkish Cement Industry Inc. established the Ni de Cement Plant in 1957 under the name Ni de Cement Industry Inc. with the participation of 758 founding partners for the development of Ni de and neighboring cities. The wet system cement plant was built by F. Krupp on a 523 km 2 area, three kilometers from the city center with a capacity of 85,000 tons/year. It went into production in After a capital increase on November 16, 1965, it was made a public organization under Çitosan. In 1972, when the wet system could no longer satisfy demand, the construction of production Line II by K.H.D. Humboldt with an annual capacity of 265,000 tons, and using pre-heated dry system technology, was started. The line was in operation on September 2, 1976 and raised the plant's total annual production capacity to 350,000 tons. Over time, 824 km 2 of land was bought to fulfill the extra need for raw materials arising from the operation of Production Line II, after which the total size of the plant increased to 1,348 km 2. Under resolution 89/4 of the High Board of Planning on March 30, 1989, % of the shares of Çitosan in the Ni de Cement Plant were handed over for privatization. On March 23, 1992, it was sold to Hac Ömer Sabanc Holding and the Armed Forces Pension Fund (Oyak). The plant changed its name to Oysa-Ni de Cement Industry Inc. The plant's wet system production line, an outdated and costly system, idle since 1989, was sold as scrap in The silos of this system are now being used by the new system. 18 Annual Report

21 Following the Turkish Competition Authority's November 1, 2007 decision to revoke the partnership between Sabanc and Oyak, the plant was re-named Çimsa Cement Industry and Trade Inc. Ni de Cement Plant and production continues under that title. The improvements in the double rotor, hammer crusher unit, manufactured by the sugar plant, raised capacity from 250 tons per hour to 325 tons per hour. The plant has a roller mill with 77 tons per hour capacity built by K.H.D. Humboldt in The pre-heating dry system added to the roller mill in 1998 after privatization, reduced raw meal humidity levels from 8-10% to 2-3%. Improvements raised the mill's capacity to 125 tons per hour. The pre-heating dry system project won first prize in the Industrial Sector 2001 Energy Efficiency Project contest organized by the Energy and Natural Resources Ministry. The pre-heating dry system includes a rotary kiln made by K.H.D. Humboldt (3.8 meters in diameter, 52 meters in length) with a daily capacity of 850 tons (265,000 tons per year). It was put into operation in After privatization, the replacements of the cyclone, cooling, burning system, flue gas and electrofilter, and the modernization of conveyors raised the kiln's daily capacity from 850 tons to 1,150 tons. The F.L.S.-type open cement mill commenced operation in After privatization, to increase mill capacity and cement quality, and to reduce energy consumption, a sepax dynamic separator, pre-crushing roller press, and V separator were added to the mill, improving capacity from 60 tons per hour to 130 tons per hour. The plant has two packaging units, eight cement silos and two train loading band systems (loading packaged cement onto trains directly from the silo). It is also possible to transport bulk cement and clinker on the same line. The Ni de Plant has the Flue Gas Refinery Facilities Certificate, Permit for Category A Emissions, License for Opening Non-Sanitary Facilities, TS EN ISO 9001 Quality Management System Certificate, TSE Certificate of Compliance with Turkish Standards (TS EN 197-1), Production Competence Certificate, OHSAS SG Management System Certificate and the BS EN ISO Environment Management System Certificate. The plant runs a quality control system in compliance with TS EN ISO 9001 Quality Management System requirements. The quality control of the output is in accordance with the TS EN 196 standards series, conformity evaluations and the TS EN standard. The products of the plant, which have the TSE Production Competence Certificate and the TSE Certificate of Compliance with Turkish Standards, are: TS EN CEM I 42.5 R Portland Cement TS EN CEM II/A-M(P-L) 42.5 R Portland Composite Cement TS EN CEM IV/B (P) 32.5 R Puzzolanic Cement TS SDÇ 32.5 Sulphate Resistant Cement Annual Report 19

22 OUR PRODUCTION PLANTS (CONTINUED) Ankara Cement Grinding and Packaging Facility Construction of the Ankara Cement Grinding Facility started in January 2001 and was completed in July 2002, when it was opened. The Ankara Cement Grinding Facility is located on the Ankara-Samsun Highway, 35 kilometers from Ankara and on a 92 acre site. The plant joined the Çimsa family after the sale was completed by the Saving Deposits Insurance Fund on December 27, The facility came on stream with annual grinding capacity of 150,000 tons in July After Çimsa's takeover, capacity was raised to 85 tons per hour with a closed system ball mill (700,000 tons per year capacity) and cement silo (5,000 tons capacity). The plant consists of: A hammer crusher of 80 tons per hour capacity A two-compartment ball mill (closed system) and a cement mill of 85 tons per hour capacity Two cement silos with capacities of 5,000 and 6,500 tons each One rotating scale with 16 platforms and 100 tons per hour capacity Two automatic chutes with a 100 tons per hour capacity A clinker silo of 16,500 tons Three weighing scales of 80 tons of capacity each Ç MSA PLANT INFORMATION Clinker Production Mersin Çimsa Capacity Kiln Diameter Raw Meal Production Line (Tons/Day) (m) Cooler Type Mill Type Fuel Type Plant 1 3,380 Gray Clinker 5.25 Unax Cooler Ball Mill 100% petrocoke Plant 2 1,785 Gray Clinker or 1,450 White Clinker 3.60 Grilled Cooler Roller Mill 100% petrocoke Plant 3 1,750 White Clinker 3.75 Grilled Cooler Roller Mill 100% petrocoke Kayseri Çimsa Production Line 2,175 Gray Clinker 3.60 Grilled Cooler Roller Mill 100% petrocoke Eskiflehir Çimsa Domestic Lignite, Production Line 1 1,700 Gray Clinker 3.60 Grilled Cooler Roller Mill Imported Steam Coal Domestic Lignite, Production Line 2 2,300 Gray Clinker 3.60 Cross Bar Cooler Vertical Mill Imported Steam Coal Ni de Çimsa Production Line 1,200 Gray Clinker 3.80 Grilled Cooler Ball Mill 100% petrocoke Ankara Çimsa Mill Production Mill Diameter Mill Length Cement Grinding Facility Capacity (Tons/Day) (m) (m) Mill Type 2, Ball Mill 20 Annual Report

23 Sales Çimsa specializes in the production and sale of white/gray clinker, white/gray cement and calcium aluminate cement. In 2007, 42 million tons of cement was sold in Turkey. In the same period, Çimsa sold 4.4 million tons of cement/clinker Production Figures Clinker Production Gray Clinker 2,400,000 tons White Clinker 1,076,000 tons Calcium Aluminate Clinker 20,000 tons Sulphate Resistant Clinker 11,000 tons TOTAL 3,507,000 tons Cement Production Gray Cement 3,250,000 tons White Cement 923,000 tons Calcium Aluminate Cement 20,300 tons Masonry Cement 34,500 tons TOTAL 4,227,800 tons Ready-Mixed Concrete 1,584,000 m 3 Capacity Utilization Rates of Rotating Kilns in 2007 Mersin Rotating Kiln I 90% Mersin Rotating Kiln II 96% Mersin Rotating Kiln III 98% Kayseri Rotating Kiln 97% Eskiflehir Rotating Kiln 83% A closed trass stockpile measuring 54x35x6.5 meters A hot air furnace fed by natural gas with a capacity of 3.5 million Kcal/hour. The Çimsa Kayseri Plant supplied clinker, the main input, in In 2008, the Çimsa Eskiflehir Plant will supply it. The Ankara plant produces CEM I 42.5R (PÇ 42.5R) and CEM II 32.5R (PKÇ 32.5R) cements, which are marketed to Ankara and the surrounding areas. The Çimsa Mersin Plant supplies the paper bags used for bagged cement. The Ankara Plant has; Permit for Category B Emissions, License for Opening 1st Class Non- Sanitary Organization, OHSAS ISG Management System Certificate, ISO 9001 Certificate, Production Competence Certificate, CE Certificate for CEM I 42.5R production, CE Certificate for CEM II 32.5R production, TSE Certificate of Compliance with Turkish Standards, Operation Certificate, Industrial Registration Certificate and Capacity Report. In 2007: There were no lost days through work accidents Work for the Business Excellence Project has continued since 2006 as well as Uptime and KPI activities The Learning Organization system was launched in December 2007 Following the introduction of OHSAS Occupational Health and Safety measures, the certification inspection was finalized successfully on December 26, 2007 As part of the company's environmental awareness concept, 2,908 saplings of various types (in total 5,205) were planted. Malatya Cement Packaging Plant The Malatya terminal, located near the Malatya Battalgazi train station, has an annual storage and packaging capacity of 40,000 tons. Annual Report 21

24 ESK fieh R know-how We know our business.

25 PRODUCTS Portland Cement TS EN CEM I 42.5 R Amongst high strength concrete classes and in the construction of tall reinforced concrete buildings, this is the most commonly used cement type. It is especially preferred in pre-tensioned prefabricated applications, and also used in tunnel system segments on major residential projects. Composite Portland Cement TS EN CEM II/B-M (V/L) 32.5 R Concrete made from this cement releases low levels of hydration heat in the early stages of the hydration process. Therefore it is suitable for concreting in hot weather conditions. TS EN CEM II/B-M (V-L) 42.5 N The finely blended puzzolanic materials, silical fly ash, used in the production of composite Portland cements, ensures higher final strength and durability by accelerating later stage reactions and improving resistance to external factors. It is especially preferred in high strength concrete classes, in the construction of tall reinforced concrete buildings, and in pre-tensioned prefabricated applications, and is also used in tunnel system segments on major residential projects. White Portland Cement TS 21 BPÇ 52.5 N With an average degree of whiteness of 85.5%, White Portland Cement has the highest comprehensive strength of all the white and gray Portland cements sold in Turkey. It is resistant to alkaline aggregate reactions and it provides solidity, as well as an exquisite appearance in structural materials used in all kinds of works of art and architectural projects. White Limestone Cement (Eco White) TS EN CEM II/B-L 42.5 R This cement, with an 86% whiteness average, is classified in the early compressive strength cement category. It provides high resistance to alkaline reactions and has a high level of impermeability. It is used in pre-cast applications, ready plaster, adhesive, and pointing and grouting materials, city furniture, floor tile production, and all kinds of artistic applications. Annual Report 23

26 PRODUCTS (CONTINUED) Calcium Aluminate Cement (Is daç) TS 6271 This cement is used for airport runways, bridges, dams, highway and road construction, mining, pipes and wastewater engineering, and internal lining of sewerage systems (due to its high resistance to chemical reactions), and in industrial furnaces, stairs, lintels and beams, floor coverings which need to be used quickly, plaster and various repair work, and concrete elements which may be exposed to sulphurized water or sea water. It is also highly popular in the refracting industry, in the production of refracting plasters, ovens, and fireplaces. Furthermore, when mixed with Portland cement, calcium aluminate cement can also be used in repair work and blocking water leaks from doors and windows. Sulphate Resistant Cement TS SDÇ This cement can be used on sulphate surfaces, in damn construction, around ports and docking areas, in the renewal of water treatment facilities and similar water-related structures. Masonry Cement (EKOHARÇ - ECOMASONRY) TS EN MC 12.5 X Masonry cement (MC12.5X) can be used to erect walls with bricks, briquettes, stone, etc., in plastering interior or exterior facades, flooring concrete, and laying mosaics, wall or floor ceramics, fixing wall tiles and natural stone, etc., by merely mixing it with appropriate amounts of sand and water. Masonry cement is suitable as floor concrete, thanks to its low shrinkage. It is also suitable for exterior plastering because of its CE Marking Certificates EN CEM I 52.5 N EN CEM I 42.5 R EN EN CEM II/B-L 42.5 R EN CEM II/B-M (V-L) 32.5 R EN MC 12.5 X Kitemark Certificates BS EN CEM I 42.5 R BS EN CEM I 52.5 N Certificate of Conformity with Spanish Standard BL I 52.5 N UNE Certificate of Conformity with EC CEM I 42.5 R CEM II/B-M (V-L) 32.5 R CEM II/B-M (V-L) 42.5 N CEM II/A-L 42.5 R (White) White Portland Cement Gray Portland Cement Calcium Aluminate Cement White Portland Limestone Cement Portland Composite Cement Masonry Cement Gray Portland Cement White Portland Cement White Portland Cement Portland Cement Portland Composite Cement Portland Composite Cement Portland Limestone Cement 24 Annual Report

27 resistance to humidity and climatic extremes. It provides smooth, hard surfaces that can breathe, which makes it also suitable for interior plastering. CE Marking, EC, TSE and Other Suitability Documents To launch cement products on EU member country markets, it is compulsory to acquire EC Certification and CE marking. For this reason, all our export products are Kitemark Quality certified by the British Standards Institute along with EC Certification and CE marking. For products which fall outside the scope of CE marking, documents suitable to the target country are acquired. TS EN Documents of General Cement Standard Suitability In compliance with EU harmonization efforts, new adapted cement standards were established on the request of the Ministry of Public Works. Casting aside the previous cement standards applied to all types of cement sold on the domestic market, Çimsa acquired Turkish Standards set in accordance with the EU harmonization process. Mersin Kayseri Eskiflehir Ni de Ankara Products Plant Plant Plant Plant Facility TS EN CEM I 42.5 R Portland Cement (Gray) x x x x x TS EN CEM II B/M (V-L) 32.5 R Portland Composite Cement x TS EN CEM II B/M (V-L) 42.5 N Portland Composite Cement x TS EN CEM I 52.5 N Portland Cement (White) x TS EN CEM II A-L 42.5 R Portland Limestone Cement (White) x EN MC 12.5 X Masonry Cement (ECOMORTAR) x x x EN Calcium Aluminate Cement x TS EN CEM II/A/M (P-L) 42.5 R Portland Composite Cement x TS EN CEM II/A/M (P-L) 42.5 N x TS EN CEM II B/M (P-L) 32.5 R Portland Composite Cement x x x EN 197-1:2000 CEM II/B-L 42.5 R Portland Composite Cement x EN CEM IV/B (P) 32.5 R Puzzolanic Cement x TS SDÇ 42.5 R Sulphate-resistant Cement x Annual Report 25

28 READY-MIXED CONCRETE Çimsa Ready-Mixed Concrete started production with the establishment of the Zeytinli Ready-Mixed Concrete Plant in It currently operates 24 ready-mixed concrete plants, 19 with dry systems and five with wet systems. Çimsa owns 23 of these plants and another is rented and operated by Çimsa. After merging with Ni de Cement on November 1, 2007, Aksaray, Karaman and Ere li (Konya) Ready-Mixed Concrete Plants, which belonged to Ni de, are now part of Çimsa. Total annual capacity of these readymixed concrete plants is 2.4 million cubic meters. In 2007, concrete production amounted to 1.5 million cubic meters, representing a capacity utilization rate of 66%. The plants are staffed by 76 experienced and specialized employees, and equipped with 218 trans-mixers, 46 mobile pumps, and five fixed pumps. Çimsa owns 184 of the trans-mixers, 42 of the mobile pumps, and all of the fixed pumps. Çimsa closely follows technological and scientific developments in its sector to offer new products, new equipment and services to its customers. Though new to the market, production of concrete with dramix, one of the special products line, has matured. As a result, in 2007, it sold 13,000 m 3 of special product from ready-mixed concrete plants. The company introduced 20 new transmixers and 2 new 47 meters pumps in In addition, as a result of merging with Ni de Cement Plant, 27 trans-mixers and five mobile pumps used in Ni de readymixed concrete plants were added to Çimsa's assets. Tekke ready-mixed concrete plant was closed and relocated to Silifke, Adana Karsl ready-mixed concrete plant was closed and relocated to Adana Karahan. On May 17, 2007, a ready-mixed concrete plant which belonged to P nar Concrete in Bilecik was bought by the company. Another ready-mixed concrete plant has been leased and it started production in Kütahya in November In addition to these, it is planned that three new plants, one in central Eskiflehir, another in Adana Kozan, and the other in Mersin Limonlu, will come on line in early In order to purify waste water and improve the external appearance of plants, Çimsa, as an indication of the Company's sensitivity to the environment, has carried out significant improvements, beginning with plants in the Adana and Mersin regions in Studies about Employee Health and Work Safety in Ready-Mixed Concrete started in 2007 and training sessions have been held. 26 Annual Report

29 N DE Profitability for continued growth. profitable growth

30 READY-MIXED CONCRETE (CONTINUED) 1. Dost Beton (Self-Compacting and Self-Leveling Concrete) Dost Beton is a special, highly fluid concrete that has long durability due to its unique design. It selflevels anywhere by gravity, requiring no vibration. It is free of condensation and decomposition problems and is also self-compacting. 2. Aqua Beton (Underwater Concrete) Aqua Beton can flow easily underwater without washing away or decomposition. It is self-leveling and self-compacting, and requires no vibrators or any other equipment. It has very low permeability, high viscosity, reliable strength, and is of a nondeteriorating quality. 3. Art Beton (Decoratively Colored and Imprinted Concrete) Art Beton is an easy-to-use base coating material for both indoors and outdoors, and is well-known as textured and decoratively colored concrete, or simply imprinted concrete. Its specific characteristics include ageing capability and the ability to provide a surface appearance tailored to customer needs. 4. Drabeton (Concrete with Dramix and Fiber) Drabeton is particularly suitable for use as field concrete, floor coating concrete, retaining or sustaining concrete and spraying concrete. Due to its dramix content, Drabeton is highly resistant to and efficient against shrinkage cracks. 5. Yol Betonu (High Resistance Strength Concrete with Reinforced Tension Strength) This concrete is used as a surface material for roads, using cement as its binder. Its structural life exceeds any material which uses an asphalt based binder. 6. S vamiks (Ready-to-use Wet Plaster) S vamiks was created using Çimsa technology to replace the so-called black plaster, which is hand-blended and therefore lacks consistent quality. This cement has strong adhesive properties and offers sound water resistance and heat insulation due to the absence of lime or similar materials in its formula. It can be painted over relatively quickly compared with plaster since it has only a 72 hours settling period, enabling projects to be completed quickly. All these factors ensure that S vamiks is much more economic than manually prepared plaster. 7. Renkli Beton (Colored Concrete) Renkli Beton provides an exquisite appearance and strength for all types of architectural, aesthetic and artistic applications and building materials. It also offers any desired color through pigment addition, and surface texture by using special patterns. It is hydraulically very active and when this characteristic is utilized, it increases both the speed of production and the quality of the product. During the production of prefabricated concrete elements, Renkli Beton does not require steam curing and contains only low-alkaline class cement. Çimsa remains committed to constant customer satisfaction and product quality improvement. In line with this principle Çimsa manufactures, in addition to the above products, high-resistance concrete (C50) and a range of C14 to C50 concretes specified by the Turkish Standards Institute. 28 Annual Report

31 Cement and Ready-Mixed Concrete Plants Ready-Mixed Concrete Plant Cement Plant Cement Production Plant Cement Terminal Mersin Plant 2. Kayseri Plant 3. Eskiflehir Plant 4. Ni de Plant 5. Ankara Cement Grinding and Packaging Facility 6. Malatya Cement Terminal 7. Zeytinli-Adana 8. Karahan-Adana 9. Misis-Adana 10. Adana Mobil 11. ncirlik-adana 12. Osmaniye 13. Kahramanmarafl 14. Tece-Mersin 15. Yenihal-Mersin 16. Bat kent-mersin 17. Silifke-Mersin 18. Tarsus-Mersin 19. Alanya-Antalya 20. Manavgat-Antalya 21. Çak rlar-antalya 22. Gebiz-Antalya 23. Kumarl -Kayseri 24. Anbar-Kayseri 25. Nevflehir 26. Aksaray 27. Karaman 28. Ere li-konya 29. Bilecik 30. Kütahya (leased) Packaging Types Bagged Loading Capacity Bagged, 3 - layer 3-layer kraft paper 50 kg Bagged, 4 - layer 4-layer kraft paper 50 kg Bagged, layer 1-layer white, 1-layer laminated brown, and 2-layer hard-brown kraft paper 50 kg Bagged, layer 1-layer white, 1-layer laminated brown, and 3-layer hard-brown kraft paper 50 kg Bagged, layer 1-layer white, 1-layer laminated brown, and 4-layer hard-brown kraft paper 50 kg Bagged, layer 1-layer white, 1-layer laminated brown, and 2-layer hard-brown kraft paper 25 kg Bagged, layer 2-layer laminated brown, and 1-layer laminated hard-brown kraft paper 25 kg Sling palletless 39 bags 1.95 tons 800 tons/day Big Bag 1.5 tons 800 t/d Laminated Polypropylene 1.5 tons 800 t/d Laminated Polypropylene 1 ton 800 t/d Palletized Wooden 15x100x120 cm bags (50 kg) tons 800 t/d Palletized Wooden 15x100x120 cm 64 bags (25 kg) 1.6 tons 800 t/d Others Bulk Silobus tons 4,000 t/d Clinker Bulk Vessel 2,500 t/d Big Bag Laminated Polypropylene tons 800 t/d Cement Types and Standards Standard Class Type EN 197-1:2000 CEM I 42.5 R Gray Portland Cement EN 197-1:2000 CEM II/B-M (V-L) 32.5 R Portland Composite Cement EN 197-1:2000 CEM I 52.5 N White Portland Cement EN 197-1:2000 CEM II/B-L 42.5 R White Portland Limestone Cement EN CEM IV/B (P) 32.5 R Puzzolanic Cement TS SDÇ 42.5 R Sulphate Resistant Cement Export Market ASTM C-150 Tip I White Portland Cement UNE :96 BL I 52.5 White Portland Cement NM F.004 CPA 55 White Portland Cement TS SINIF Calcium Aluminate Cement TS 21:1194 BPÇ 42.5/85 White Portland Cement TS EN 197-1:2002 CEM II/B-M (V-L) 42.5 N Portland Composite Cement TS EN 197-1:2002 CEM II/B-M (V-L) 32.5 R Portland Composite Cement TS EN 197-1:2002 CEM II/B-L 42.5 R White Portland Limestone Cement Domestic Market TS EN 197-1:2002 CEM I 42.5 R Gray Portland Cement TS 22 ENV MC 12.5X Masonry Cement TS SINIF Calcium Aluminate Cement Annual Report 29

32 ANKARA leadership We follow Atatürk's lead.

33 INVESTMENTS IN 2007 The most important investment activity of 2007 is the completion of the Eskiflehir project, begun one year previously. Eskiflehir Cement Plant became a part of Çimsa at the end of Then, at the beginning of 2006, investment activities commenced quickly. The project was initiated in May 2006 and construction work began in July By the end of July 2006 all of the connections for exported goods and services were made and contracts were signed. Eskiflehir investment activities were executed in the form of four main projects: 1. Modernization of the Product Line 1. This project, given priority, commenced in May 2006 and was completed at the end of May In particular, the clinker units were renewed and, thereby, the production capacity of gray clinker was targeted to increase to 1,950 t/d from 1,450 t/d. 2. The construction of a new grinding plant. A new mill and grinding group with 85 t/h capacity, imported from China, was put into operation at the end of May The establishment of a coal mill with a petrocoke grinding capacity of 40 t/h. The new coal mill started operating at the end of October The construction of a completely new II Gary Clinker Production Line with a capacity of 2,300 t/d. This was completed and production started at the end of Eskiflehir Investments: 1. Modernization US$ 9.2 million 2. Cement mill US$ 8.0 million 3. Coal mill US$ 8.7 million 4. Production Line II US$ 64.6 million Total US$ 90.5 million After the completion of the Eskiflehir investments, Çimsa made significant progress in a leadership capacity. In Mersin, Production Line II for calcium aluminate cement, which is a special kind of hydraulic plaster which attains strong resistance to high heat, chemical corruption, and water in a short time, was brought into operation at the end of June Towards the end of 2007, Mersin Plant was connected to the natural gas system. It is planned that the necessary connections for the firing and annealing of ovens will be done during overhauls of the ovens in A contract was signed with Loesche for the modernization of Mersin Plant's Cement Mill III, and this work is planned to be done towards the middle of At the Malatya Plant, a new cement silo construction with a capacity of 600 tons was commenced and is planned to be completed in February The construction of three cement plants is underway in Spain (Alicante), Romania (Constanta), and Russia (Novorossiysk). These projects will continue in A contract was signed between Çimsa and FLS in July 2007 to renew the clinker cooler and oven units of the Mersin Plant's Production Line I. This project is scheduled to be completed in the first quarter of Annual Report 31

34 ORGANIZATIONAL STUDIES AND TRAINING Çimsa Development Programs Senior Management Development Programs Çimsa development programs encompass workshop-based training founded on the 360-degree feedback system, coaching and other activities to improve executive competence and the skills of senior and intermediary level executives, and to enhance the organizational climate. In 2007, development programs were carried out in three categories: The Sabanc Leadership Team (SALT) Leadership Executive Program Strategic Leadership Program Learning Organization Training Learning Organization activities are a vital part of Çimsa's organizational development process and training sessions continued in 2007 in three categories: 1. Training for Learning Organization Team Members a. Learning Organization Application Team Training 2. Training for Learning Organization Coaching Candidates a. Organizational Transformation and Training the Trainer b. Coach Training c. Coaching Refresher Training 3. Training for Implanting the Learning Organization Culture in Çimsa a. Organizational Transformation and Leadership Training Behavioral and Vocational Training Vocational training to maximize Çimsa employees' contributions by developing their technical competence and performance is conducted every year. These training sessions were intensified in CSI Vibration Analysis and Predictive Maintenance Training 6 Sigma Training (Green Belt) EEC Directive TS-EN 197-1/2 Product Safety Regulations of the Council for Quality and the Environment Use of Alternative Fuels The Impact of Burning Waste at Kilns (Turkish Cement Manufacturers Association) Environmental Regulations and Management in the EU process BEX Training BW (Business Warehouse) IT Training CO 2 Calculation and Climate Change Orientation Training in the Cement Industry New Standards in the Cement and Concrete Sector and Characteristics of Blended Cement Foreign Trade Training Program Ergonomics Training Influencing Skills Kiln (Gale) Settings FLS Kiln Operation (Denmark) Security Information Form Certificate Training (Gale) Settings Haznedar Refractory Training Targeted Selection Hydraulic Training 32 Annual Report

35 MALATYA We champion our brand in domestic and international markets. brand awareness

36 ORGANIZATIONAL STUDIES AND TRAINING (CONTINUED) Second Mining and Environment Symposium International Quality Control Seminar Internal Quality Examination Training Payment and Delivery Terms in Export Training for Investigation of Work Accidents Protection from Lumbar and Back Aches at Work - Ergonomics Training Quality Management Inspection Training Welding Technology and the Importance of Lubrication Chemical Admixtures Fly Ash, Aggregates, CE Certification Inter-Laboratory Test Program Training OHSAS Internal Auditor Training Changes brought by the OHSAS Revision Orientation Training Automation Control System Training Automatic Command and PLC Training Explosives and Explosion Techniques Course III Training Manufacturing Hard Facing and Non-Abrasive Plates Siemens Automation and Drive Technology Products Introduction Seminar Strategic Purchasing Management TE Afi (Turkish Electricity Transmission Company) SOMA Facilities - Operation Technician Training TE Afi (Turkish Electricity Transmission Company) SOMA Facilities - Heavy Current Technician Training Technical Training TSE EN ISO Quality Management System Training TS-EN-ISO/IEC 17025:2005 Laboratory Accreditation Training IFRS (International Financial Reporting Standards) (PWC) Construction/Building Materials Certification Training Learning Organization Project A learning organization continuously learns from experience, adapts these lessons to changing circumstances within a system that can also be developed by employees and, as a result, it exists as a constantly changing, developing, and selfrenovating dynamic enterprise. For an organization, the learning process not only includes objective information but also the opinions, judgments or intuitions of employees. First, the organization creates an environment that allows for the formation of these opinions, judgments and intuitions. Then, opportunities are made to share the information with the rest of the employees. Finally, the same information is put into use for the efficiency of the organization. Becoming a learning organization is a difficult process. Knowing Organization Understanding Organization Thinking Organization Learning Organization Classic companies are referred to as knowing organizations. In these companies, 'wellinformed' management and specialists offer the best-known solutions for the problems or issues that come up. Employees apply the solutions. The by-products of learning are not found in these organizations. Instead, they change in reaction to the changes taking place around them. Understanding organizations aim to find the best by adding the personal conceptions and judgments of employees. In this stage, the 34 Annual Report

37 organization does not just view issues by what is best but stresses that there may be different 'bests', depending on circumstances, individual perceptions, and judgments. As well as the human element, the values brought by the corporate culture, written rules and control mechanisms are also at play. At the next level is the thinking organization. Thinking organizations develop the systems and models that would rectify and even preclude disruptions in their operations. They train executives in the quick identification of problems and immediate action by analysis. In the final stage of the development process, the climax of all these aforementioned processes, is the learning organization. This stage involves continuous learning (between employees, from customers, suppliers, etc.), identification/solution of problems and learning from experience. The corporatization of information becomes an organizational reflex. This stage accompanies the process of change in which case both employees and the organization take on responsibilities. Since the changing process began in 2004, Çimsa has been taking assured steps towards becoming a learning organization. Besides changes in strategy management, human resources management, and the overall management approach, plans are made so that the process will include all employees, step by step, through the learning of organizational application teamwork. The reason for starting the learning of organizational application team work was to make ongoing team work (e.g. concerning cost cutting, raising efficiency, saving, improvements for environmental) much more systematic and human-oriented. However, apart from these basic goals, there have been additional benefits, such as improving internal communication within the organization, development of employee awareness of individual competence and performance, and cultivating the culture of basing arguments on data. Since such benefits and activities will give momentum to Çimsa's transformation towards becoming a customer-oriented and innovative company, they are being spread rapidly to all production facilities and plants. Individual Learning Çimsa as a Learning Organization Learning as an Organization Learning as Teams Annual Report 35

38 ORGANIZATIONAL STUDIES AND TRAINING (CONTINUED) The course of the organizational teams over a four-year period is projected in the table on a time line. One team in Ankara Two teams in Kayseri One team in Ni de Two teams in Mersin One team in Ready-mixed Concrete Two teams in Eskiflehir teams 130 members 39 coaches teams 211 members 57 coaches The tangible benefits accomplished by the teams as the result of learning organization activities since 2004 are demonstrated in this table. Team Target Result K v lc m 9% reduction in truck and grab use 20% saving, 26% fall in truck and grab use Kar Damlac klar 1% reduction in annual raw meal, TRY 1,250,000 of savings fuel and energy costs Turkuaz 15% reduction in consumption of water Total saving of 500 tons per day, 25% lower cost, Saving of drinking water for 2,500 people/day Greenpeace 50% reduction in dust emissions 65% fall in dust emissions Transformation Recycling wastes: 2% raw meal and Recycling wastes: 1.32% raw meal and 12% admixtures 11.32% admixtures Optimum Reducing spare part stocks, etc to 25% 36% saving, reduction to TRY 1,823,000 from TRY 2,830,000 Çoban Y ld z 15% saving in energy spending 58% saving without changing lighting quality Crushing Power Reducing 178 hours of unplanned pauses in Reduction to 48 hours: 73% improvement the crusher unit Argus Reducing peak-time hours from 19% to Total saving of US$ 549,500 16% and reducing electricity usage for grinding by 3% per product Sentez Reducing customer complaints by 30% 74% drop in customer complaints Increasing customer satisfaction by 10% Redüktör Reducing stocks from TRY 18,824,000 Drop in stocks, new source of TRY 3.6 million and 155 days to TRY 15,640,000 and 120 days in operating capital Energy Hunters 7% saving in consumption of energy for grinding Saving of 9.84% and extra earnings of Reducing work-related accidents to 5 TRY 815,000 Live Coverage Increase of 35% in mixer performance, 50% in increase in mixer performance of 86% in mobile pump performance Mersin, 97% in Adana; increase in mobile pump Performance of 85% in Mersin, 89% in Adana Kumtafl Reducing cement costs (from 100 units) to reduction to CEM I=97.76; CEM II=99.00, CEM I=92.68; CEM II=98.25 ; CEM III=91.83 CEM III=99.00 De iflimsa 50% saving on the internal transport costs of Cumulative average of TRY 0.84/ton TRY 1.20/ton Reducing accidents that cause a 29.71% improvement absenteeism to 0 36 Annual Report

39 The following critical factors played an instrumental role in the achievement of the savings above and the rapid results gained by learning organization activities within Çimsa: Constant follow-up and contribution of the General Manager Participation of the sponsors in presentations and meetings; consistent and constructive provision of feedback to teams Support by all function heads to team members. The intangible contributions of the learning organization activities to Çimsa were: Increase in the number of employees who suggest solutions rather than waiting for the executives to find one The adoption, especially by junior-level executives, of a democratic and coaching management style that encourages participation and learning, instead of solving problems as a 'well-informed' executive An environment suitable for identifying and testing candidates for executive positions The reflection and reinforcement of our values Disseminating the habit of showing up in meetings prepared, basing arguments on data, and focusing on the main subject Development of skills that would contribute to employees' professional and personal lives. In the first six months of 2008, the nine learning organization teams are set to work on projects to improve Çimsa's corporate performance, competitive advantage, corporate reputation, and employee satisfaction. A New Performance Criterion: Measurement of the Organizational Climate Over three decades of research has shown that good executives make a considerable impact on the financial results of companies. This impact is perceived more discernibly in circumstances when the sector is constrained and the conditions are severe. The approaches and attitudes of executives directly influence the organizational climate and the feelings of employees regarding the work environment. Concisely, Organizational climate is the mood of the work environment. It is the measurement of whether an environment has been set up in which executives and employees can convey their energies and sincere contributions to their work. The average impact of the executive on the organizational climate is calculated as 70%. A positive organizational climate is found to influence the company's financial results. Employees working in companies with a favorable organizational climate express that: The work environment motivates them and they work efficiently and with pleasure They perform to the best of their ability and know that it is appreciated. In companies where the organizational climate is regarded as unfavorable, the reverse is the case. Annual Report 37

40 ORGANIZATIONAL STUDIES AND TRAINING (CONTINUED) The most practical method for measuring the organizational climate is by questionnaire. By analyzing the replies given to the questions What is the current situation in the company? and What would be the ideal situation? questionnaires can measure employee morale in relation to the style of management and the organization's performance. The following is a summary of the six approaches to be taken by management for employees to do their best: 1. Clarity: providing clarity as to where the company goes and how employees can contribute to this 2. Standards: persistent emphasis on excellence and performance enhancement 3. Responsibility: delegating responsibility to ensure employees do their work properly and holding those authorized responsible 4. Flexibility: making sure that there are no unnecessary rules and procedures, and that good ideas are put into practice 5. Rewards: appreciation of the extent of contributions to results. 6. Team Commitment: creating an environment of trust and pride. Companies that would like to sustain their success acknowledge that organizational climate has a notable effect on company performance. It can be assessed, measured, and improved just like other measurable performance criteria (e.g. ROIC, EBITDA, market share, uptime-production performance). In the context of SALT (Sabanc Leadership Team), which has been the senior management development platform of the Sabanc Group since 1999, all senior management employees have been going through a 360-degree survey in connection with the organizational climate they induce, their management style, and competence. They receive feedback in return, and activities are geared towards improving the organizational climate. The Çimsa senior management team has been taking part in such work since The 360-degree survey and feedback-coaching meetings take place about once every two years. In 2007, most of the Çimsa senior management underwent the 360-degree survey. Executives participated in a five-day workshop with coaching sessions, and worked on their individual action plans. These activities are planned for 2008 as well. For executives at each level to receive feedback concerning the organizational climate they generate and for the Çimsa management team to make action plans for improvement, six workshops were held in Mersin, Ankara, Ni de, Kayseri and Eskiflehir plants and including 221 non-union ready-mix concrete employees, at the end of the year. During these workshops, an organizational climate SWOT analysis was conducted. Mini surveys were made verbally and written statements and suggestions for improvements about the organizational climate in the company were collected from Çimsa employees. As a result of this work, general and regional reports were written for feedback and suggestions of improvement. The next goal is to prepare and put into practice the improvement action plans. 38 Annual Report

41 Çimsa's Strategy Map MOST VAUABLE CONCRETE AND CEMENT ORGANIZATION OF TURKEY HIGH-PERFORMANCE CULTURE FOR PROFITABLE GROWTH Financial/Value Develop New Production Capacities in Strategic Regions/Markets Profitable Growth Increase Generated Value Achieve Outstanding Business Results Cost Leadership High Performance Culture Optimize Capital Structure INCREASE VALUE TO CUSTOMER Customer Know Your Customer Exceed Customer Expectations HIGH PERFORMANCE PROCESSES Segment Management Operational Efficiency Supply Chain Management Internal Processes Optimize Sales Mix (Customer/Product/Region) Enhance Communication for Reputation Management Adapt Operational Best Practices Decrease Optimize Production Costs and Energy Usage Improve Raw Materials & Cementitious Materials/Resources Management Increase Logistics Effinicy Identify Corporate Risks and Take Precautions Ç MSA DNA Information Capital Human Capital Organizational Capital Learning & Growth Implement a Strategic Performance Management Model Harmonize & Unify the Information Platforms Ensure Implementation of Effective HR Management System and Framework Develop Leadership & Management Capabilities Standardize Our Way of Doing Business Create Value through Organizational Synergies Our Values: Reliable - Customer Focused - Collaborative Annual Report 39

42 international player Pushing the limits. SPAIN GERMANY TRNC ROMANIA

43 LINKS AND TERMINALS ABROAD Çimsa Cementos Espãna S.A.U. Spain Owned entirely by Çimsa, the terminal was put into operation in 1996 in Seville, one of Spain's key ports. Çimsa's super white bulk cement is shipped from the company's Mersin Plants. Using the packaging systems of two silos with 5,000 tons of capacity, the product is offered to the Spanish market in bulk or as packaged cement. The plant also produces flooring materials using white cement, and has an established group of buyers in the Spanish market. CSN Cement Sales North GmbH Germany CSN was founded by a partnership between the German CTN GmbH and Çimsa. It has a cement silo with a capacity of 7,500 tons and markets white cement in Germany. Çimsa Cement Free Zone Ltd. Cyprus Çimsa follows growth potential in its catchment area closely. In accordance with the 2005 investment decision concerning the Turkish Republic of Northern Cyprus, Çimsa bought Erçim Cement Industry Ltd. Subsequent investments revamped the Famagusta port facility for stockpiling and selling bulk cement. The facility has the capacity to stockpile 5,000 tons of bulk cement. In 2007, about 50,000 tons of grey cement was sold. The sales target for 2008 in the Cyprus market is 70,000 tons of grey cement. C MSAROM Marketing Distributie S.R.L. Romania This facility was established by Çimsa (with 100% ownership) in Romania's Constanta port in February 2006 to market and distribute white cement in and outside of Romania. Annual Report 41

44 2007 MARKETING ACTIVITIES A variety of technical support activities were carried out to enhance customer satisfaction and commitment and to satisfy customer needs before and after sales. These activities were conducted through the Çimsa Application Center laboratories and in the field. Çimsa's mission, to become the preferred business partner in the cement and concrete sector, implies the necessity of building customer relations on solid foundations. As the leader of its sector, especially white cement and special products, Çimsa places great stress on customer satisfaction in existing and new markets, both before and after sales. In this regard, the research on applications for Çimsa products (white/grey Portland cement and calcium aluminate cement) conducted in the Cement Application Center was shared with customers. Promotions were organized to win new customers and differentiate the product. Through customer visits, the production processes of customers were examined and their expectations and demands were noted. Research on applications was conducted to meet these demands. Customer satisfaction surveys were administered to measure the level of satisfaction of domestic and foreign customers and distributors, and to define their expectations. Projects were run in conjunction with the travertine sector, an important area in which super white cement is used. Travertine producers were visited to find ways to enhance the performance of the grout made from white cement. Seminars were held to bolster the knowledge and extend the experience of travertine producers in the usage of white cement. To expand the use of white cement in the pre-cast sector, Çimsa cooperated with pre-cast producers to work on highstrength concrete. The characteristics of white cement, such as not requiring steam curing, allow for early removal of concrete molds, and early/high strength is achieved. ISIDAÇ 40, a variety of calcium aluminate cement, is predominantly used in the building chemicals and refractory sectors. Customers in these sectors were visited and meetings were organized throughout the year to share the latest developments. Funding was provided to research projects run by the Middle East Technical University and abroad on this product's high resistance to shock and impact. Prior to 2007 our masonry cement brand Ekoharç was offered only around Eskiflehir. In 2007, it was made available to 42 Annual Report

45 ANTALYA ADANA KAHRAMANMARAfi We are laying powerful groundwork for the future. strong infrastructure

46 2007 MARKETING ACTIVITIES (CONTINUED) customers in all areas of operation. Promotional meetings were organized in Eskiflehir, Mersin, Adana, Kayseri and Kahramanmarafl to launch this product on the market. Visits were made to distributors and builders working in construction sites to promote the use of Ekoharç as plaster, masonry and alum, and to underline its advantages. Demonstrations were performed onsite. To enhance brand image, increase brand awareness, and share products with customers, Çimsa participated in building and construction fairs in Russia and Romania, and the Istanbul Building Fair in Turkey. Our traditional Architecture and Art Panels were held this year in Bahçeflehir University and Isparta's Süleyman Demirel University. The manager of the Kayseri Plant, Mehmet fiahin, participated in the urban development seminar organized by Erciyes University and Kayseri Metropolitan Municipality, with his presentation Çimsa: Past and Present, communicating Çimsa's history, products and fields of application. Within the framework of cooperation between university and industry and in the context of social responsibility, joint activities were carried out with the Fine Arts Faculty of Mersin University. As in previous years, the Environment and Sculpture course was given in the Cement Application Center in Articles and papers were published or presented in various national and international scientific journals, congresses, and symposiums, to elucidate the characteristics of cement products in application, to promote them to those involved, and to support scientific activities related to the sector. Çimsa participated in the International Symposium on Sustainability in Cement and Concrete, organized by the Turkish Cement Manufacturers Association, held May 21-23, 2007 in Istanbul. Çimsa's Marketing Manager, Dr. Önder K rca, presented his study, Effects of Ordinary Portland Cement Addition on the Properties of Calcium Aluminate Cement at that symposium. The study offered theoretical and practical information on the usage of ISIDAÇ 40 cement in the building chemicals sector. In addition, a scientific article by Mr. K rca, entitled Use of Binary and Ternary Blends in High Strength Concrete, was published in the June 2007 issue of Construction and Building Materials, which is listed in the Science Citation Index. The article analyzed results of the research and development work conducted at Çimsa Cement Application Center for high-strength 44 Annual Report

47 concrete technology. The same results were shared with producers of pre-cast concrete components during customer visits, while fulfilling their need for technical support. A series of social responsibility and sponsorship activities were carried out to foster Çimsa's corporate image, reputation, and brand awareness, and to serve the needs of each plant's social environment. Çimsa was the main sponsor of the 2007 Archiprix Architecture Students Design Contest Awards and Exhibition. Among the goals of the contest were: to provide opportunities to young talented architects to practice their profession; to fuel competition between architecture teaching institutions in Turkey; to promote the architectural profession to the public sector; to elevate the reputation of architecture; and to create a context in which to strengthen the relationship between theory and practice. This national contest of graduate dissertations of Turkish students of architecture was held for the seventh time with Çimsa as the main sponsor. The symposium Innovations and Training in Precast Concrete, organized by the Turkish Pre-cast Concrete Association and the Fine Arts Faculty of Mimar Sinan University, took place on November 13, Çimsa was the main sponsor of the event, which was attended by academics, architects and engineers from the sector. Çimsa participated in the symposium through a speech by its Marketing Manager, Dr. Önder K rca, and a special display stand. The exhibition Letters in Gold opened in Spain's capital Madrid, sponsored by Çimsa Cementos Espana S.A.U. It featured the Ottoman calligraphy collection of the Sabanc Museum and it played a key role in promoting Turkish culture and the Sabanc Group. Furthermore, Çimsa acted as sponsor of the Mimar Sinan Commemoration Ceremony, The Polyphonic Choirs Festival by the Mersin Polyphonic Choirs Association, Bahçeflehir International IAPS Architecture Symposium, Mersin University's National Environment Symposium and Mersin Forest Week. Besides activities that contributed to higher education and the development of the social environment, middle-level education was supported, too. Çimsa funded a class in the Vocational School of the Mersin Chamber of Commerce and Industry, and donated a smart board to Eyüp Aygar High School, which became the first such school in Mersin to use smart boards. Annual Report 45

48 NEVfiEH R OSMAN YE B LEC K KÜTAHYA flexibility We owe our profitability and consistent performance flexibility.

49 REPORT ON COMPLIANCE WITH CORPORATE GOVERNANCE PRINCIPLES 1. Statement of Compliance of Corporate Governance Principles Çimsa Çimento Sanayi ve Ticaret A.fi. applies the Corporate Governance Principles published by the Capital Markets Board (CMB). Part I - SHAREHOLDERS 2. Shareholders Relations Unit Abdullah Kaplan, chief accountant in the Finance Department is responsible for shareholder relations; his address is [email protected]. During the term of activity, 20 applications were received from shareholders for share replacement transactions, and these transactions were carried out, with a printed record provided. 3. Use of the Shareholders' Rights to Receive Information During the activity term, a total of 28 annual reports were requested by shareholders and these were mailed to them. Verbal questions concerning share replacement transactions were responded to. Special Case Disclosure forms, issued through the Istanbul Stock Exchange, announced any events that may concern the shareholders. After the announcement of the interim financial statements, informative meetings were held with brokerage houses and sector analysts. Two meetings were held in Turkey in 2007, and three meetings were held abroad. The Company's Articles of Association do not include any rules on the appointment of a special auditor, and there has been no request pertaining to this from the shareholders. 4. Annual General Meeting Information The Annual General Meeting was held on April 17, 2007 with a meeting quorum of 73.19%. Shareholders who had completed the necessary formalities attended the meeting. The call for the meeting was issued in accordance with the terms set out by the Ministry of Industry and Commerce and certified by the Ministerial Superintendent. During the meeting shareholders were given the opportunity to ask questions, all of which were answered with due explanations. The Annual Report prepared beforehand was distributed to those shareholders who took part in the meeting. In addition, these shareholders were informed of the previous year's operations. Guided by the shareholders resolutions, an election was held to appoint Members of Board of Directors and the Board of Auditors. The Annual General Meeting Report is available at the head office of the company and is available at shareholder's request. Additionally, the report and the results of the Annual General Meeting were also published in the Commercial Registry Newspaper. No regulations have been incorporated into the Articles of Association to the effect that the General Assembly should take important resolutions. No such Annual Report 47

50 REPORT ON COMPLIANCE WITH CORPORATE GOVERNANCE PRINCIPLES (CONTINUED) regulation was deemed necessary as the Board of Directors represented the will of the General Assembly report and the List of Attendance is available on the company's website: 5. Voting Rights and Minority Rights No privileged voting rights are present in the Articles of Association. No regulations acknowledging accumulated voting rights were set out in the Articles of Association. When the present percentages and the structure of the partnership were considered, no such regulations were made, as accumulated voting rights could compromise the harmonious management of the Company. 6. Dividend Distribution Policy and Dividend Payment Date The terms of dividend distribution are defined under Article 26 of the Articles of Association. Accordingly, after the deduction of due taxes from the gross profit, the remaining net profit is used to distribute the profit at a rate proposed by the Board of Directors and approved by the General Assembly, in compliance with the provisions of the Articles of Association and Capital Markets Board (CMB) regulations. In 2007, the CMB set a requirement that at least 20% of the distributable profits should be distributed as dividends. Our company accepted the policy of 'distributing at least 50% of the distributable profits until the end of May following the computation period'. This policy may be reconsidered each year by the Board of Directors in the light of national and global conditions, current projects, and the condition of funds. There are no privileges in dividend distribution. 7. Transfer of Shares The Company's Articles of Association include no regulation restricting the transfer of shares. SECTION II - PUBLIC DISCLOSURE AND TRANSPARENCY 8. Disclosure Policy The Company has no specific public disclosure policy. Financial statements are announced publicly in the third, sixth, ninth, and twelfth month of every year. 9. Disclosure of Specific Events The Company issued 20 public disclosures of specific events in The Capital Markets Board (CMB) required an additional disclosure and this was issued on March 12, The Board of Directors was ordered to pay a fine of TRY 11,836 per person by reason of not informing shareholders during the 2006 Annual General Meeting of why Enerji A.fi., one of the associated companies, did not participate in raising cash capital. Our company's shares are not listed in any foreign stock markets. 10. The Company Website and its Content The Company's website, published information listed in Article of Section II on the Compliance Report of Corporate Governance Principles. The content of the website is structured according to a decision taken by the Capital Markets Board in meeting No. 48/1588, dated December 12, Annual Report

51 11. Disclosure of Ultimate Controlling Individual Shareholder(s) As the Company only has bearer shares, there are no ultimate controlling shareholders. 12. Public Announcement of Insiders Who can Access Information Individuals privy to inside information include members of the Board of Directors and the executive management, as announced to the public through the Annual Report. SECTION III - STAKEHOLDERS 13. Providing Stakeholders with Information Stakeholders are informed by the Istanbul Stock Exchange, through the company website and public disclosures using specific case forms. Moreover, employees are informed through bimonthly circulars, the Intranet and annual information meetings. 14. Participation of the Stakeholders in Company Management Meetings are held at least once a year for employees wherein the operations of the previous year are evaluated, the objectives of the next year are shared, and feedback is received. As part of the business excellence and learning organization projects, teamwork is encouraged and participation in project teams is fostered in matters such as target identification, process improvement, and investment. 15. Human Resources Policy Çimsa has drafted a Corporation Human Resources Policy and the basic principles of this policy as cited in article 4 of the charter are defined below: To recruit employees who are well trained in their field, knowledgeable and highly skilled To form an organizational structure of employees with a sense of responsibility, reliability and loyalty to the company To recruit employees who are motivated, enthusiastic, cooperative within the scope of their status and position, ready to fulfill and recognize their responsibilities, fully authoritative within their status and willing to take decisions To promote a professional work environment and conditions that can foster employees' potential To maintain a positive atmosphere by creating harmony between the established employees and newcomers To establish career goals that encourage employees to develop themselves by objectively evaluating aims and performance To create a company environment that encourages and rewards success and perfection To carry out scientific studies so as to provide employees with opportunities and a satisfactory salary based on their position, skills, and performance. To-date, there have been no complaints of discrimination from our employees. 16. Information about Relations with Customers and Suppliers Domestic - Customer Visits Marketing, sales, and R&D employees periodically visit customers who use white cement and calcium aluminate cement products. They collect suggestions, and note customer expectations, problems, and satisfaction levels on the spot. These visits ensure a warm working relationship with customers. - Meetings with Distributors In regional meetings held several times a year, Annual Report 49

52 REPORT ON COMPLIANCE WITH CORPORATE GOVERNANCE PRINCIPLES (CONTINUED) distributors are informed of developments in the company and receive technical information to enable them to better support end-customers. In addition, information regarding product quality is updated. Distributors' problems are dealt with during these meetings, where some solutions require negotiation. - Dinners for Distributors On special occasions (Ramadan, New Year's Eve, etc.), distributors are invited to dinners both in their regions and at our facilities to foster warm relationships. - Fairs Marketing and sales employees introduce our gray, white, and calcium aluminate cement products at fairs, during which the products of our customers are present too. Our sales and marketing employees also visit the stands of our other customers in the construction and refractory materials fairs in the interests of maintaining good relationships. - Brochures and Booklets The Sales & Marketing and R&D departments prepare and distribute promotional and informative publications that answer frequently asked questions on gray, white, and calcium aluminate cement products. - Seminars and Panels With the contributions of the Sales & Marketing and R&D departments, annual panels and seminars are organized for students and university staff in the architecture and/or civil engineering faculties of three or four universities. During these activities, we provide information concerning the quality of our white and calcium aluminate cement products, their applications and their advantages. - Corrective Action As soon as a form of corrective action is prepared, product complaints from customers are sent to the related section, which works to resolve the problem quickly and inform the customers of the process. Foreign - Customer Visits Visits to international customers take place at least once a year, not only to strengthen relationships but also to examine the dynamics of the market at first hand. - Fairs The company takes part in construction fairs in new markets which are deemed to offer high potential (Russia, Ukraine, etc.), with the aim of introducing our products and making contact with potential users. - Trips Distinguished architects are taken to Spain, which has the highest per-capita consumption of white and gray cement, and presentations on what can be produced with white cement are made to bring a new vision. - Trips for Distributors Trips to various countries organized for the company's most successful distributors provide an opportunity for the Sales & Marketing department to listen to suggestions, problems, and evaluations in a relaxed, social atmosphere and to enhance our distributors' motivation. - Customer Trips We periodically invite to the company's facilities members of Turkish companies that use or purchase our white and calcium aluminate cement in our target markets. We offer a detailed presentation of our facilities and products during these trips. Our customers have the opportunity to offer their suggestions or expectations. 50 Annual Report

53 Raw materials and additives that may influence our product quality are purchased from suppliers in our ISO 9001:2000 Quality Management System, and their performance is constantly monitored. 17. Social Responsibility Our company is aware of the importance and impact of all investments and actions on humankind and the environment, for the future of our country and the world. With this point of view, Çimsa works with the Ministry of Environment and Forestry to plant trees in the areas used for raw material. With this in mind, more than 50,000 young trees were planted in Mersin alone in In addition, other industrial waste is burned in the company's plants' ovens (at 1400 degrees Celsius) in order to completely get rid of materials hazardous to the environment. With a lack of comprehensive solutions for the total annihilation of industrial waste in Turkey, Çimsa tries to improve and enlarge these applications. Çimsa is aware of the importance of formal and informal education and sponsors many education projects. Therefore, to improve the quality of schools, Çimsa supports the construction of schools, laboratories and classes in its region of activity. Besides these activities, our company supports faculties of architecture with panel discussions, competitions, etc. to improve the sector. With this frame of mind, an architectural tour was organized abroad to improve students' experience, knowledge and creativeness. In addition, our company organizes architectural and art panels, and sponsors architectural competitions, summer schools, and student meetings in various universities throughout Turkey. Domestic Cement-Concrete sharing meetings are organized with a view to provide support for the sector. Çimsa, in addition, provides a significant contribution to the social and cultural development of society by supporting various activities. The Company is the main sponsor of the Mersin International Music Festival, and sponsors the Mersin University Environmental Engineering National Environmental Symposium, the Mersin Aclape Chamber Choir, the Mersin Polyphonic Choirs Association, and other organizations and establishments. Çimsa devotes a great deal of effort to pioneering the necessary precautions to protect human health and the environment. Some of these efforts are listed below: In our plants, dust and gas emissions resulting from production activities are controlled with electro and bag filters. To protect human health and the environment more systematically, and to raise employee awareness towards the issue, the TS EN ISO Environmental Management System was established and certified. A license for Alternative Fuel Usage was received from the Ministry of Environment and Forestry for the disposal of Category I and II waste oils. In addition, the TSE Occupational Health Safety Management System was established and certified to ensure the safety of employees, contractors, and visitors. Annual Report 51

54 REPORT ON COMPLIANCE WITH CORPORATE GOVERNANCE PRINCIPLES (CONTINUED) PART IV - BOARD OF DIRECTORS 18. The Structure and Composition and the Independent Members of the Board of Directors Chairman : Erhan KAMIfiLI Vice President : Mehmet GÖÇMEN Member : M. Nedim BOZFAKIO LU Member : Tamer GÜVEN Member : Y lmaz KÜLCÜ General Manager : Mehmet HACIKAM LO LU All members are non-executive board members. According to the Articles of Association, the Board of Directors is composed of five members elected from amongst the shareholders. There is no independent member elected in the General Assembly. 19. Qualifications of the Board Members Although there are no regulations in the Articles of Association regarding the qualifications required for the election of Board Members, the members must conform to the qualifications stated in part IV of the Capital Markets Board Corporate Governance principles, articles 3.1.1, 3.1.2, and The Mission, Vision and Strategic Goals of the Company The Company's vision and mission have been defined and announced on the Company's website. The rates of fulfillment of the objectives determined in the annual budgets are discussed in the monthly meetings. Our Vision: is to be the most valuable cement and concrete company. Our Mission: is to be a business partner to cement and concrete users at a global level. Main Strategic Targets: 1. High performance culture for profitable development 2. Enhancing the value of service to customers 3. High performance processes 4. Creating Çimsa 'DNA' in knowledge, human, and organization infrastructure 21. Risk Management and Internal Control Mechanism The Company's policies and procedures concerning production, sales, stocks, commercial and financial affairs, and human resources require processes to be carried out with business discipline. Business flows have been designed to assign people to execute and monitor the work, and auto-control mechanisms have been put in place where appropriate. Report systems to monitor production, purchases, sales, and some expenditure items have been developed, the results of which are evaluated in regular meetings at various levels and in various settings. Authorization is required for administrative, financial, and commercial processes. In addition to this internal control system, compliance with the laws, internal procedures and instructions is evaluated by periodic internal checks, along with the risks in the system and control mechanisms. Accordingly, inefficient areas are improved on and new control mechanisms are developed. With this in mind a Risk Management Department has been set up and its administrators appointed. 52 Annual Report

55 The Board of Directors' resolution requires Internal Auditing Specialists to report to the Committee in Charge of Auditing. 22. Duties and Responsibilities of Board Members and Executives The duties and responsibilities of the Board of Directors and the General Manager are clearly presented in the Articles of Association. 23. Operating Principles of the Board Members As stated in the Articles of Association, the Board of Directors holds meetings concerning Company business and transactions at least once a month, as deemed necessary. The Board of Directors gathered 31 times and made 90 resolutions in There is no particular format for the meetings described in the Articles of Association. The meeting agenda is decided upon as a result of the Chairman's meeting with the General Manager. The secretariat sends the agenda and the content of the agenda to the Board Members for their perusal prior to the meeting, and distributes the meeting minutes after the meeting, via Prohibited Transactions and Engagement with the Company During their terms, Board Members did not engage in any prohibited transactions with the company. 25. Ethical Rules Çimsa's ethical rules for employees are listed in part III of the Human Resources Directive. Company bylaws are announced to employees via the company Intranet. Additionally, SA-ETHICS have been announced to all employees. 26. The Number, Composition, and Independence of Committees Formed in the Board of Directors An audit committee, consisting of members with non-executive duties, was formed under the charge of the Board of Directors. Since the Board of Directors deals with corporate governance principles and the fulfillment of these principles, it was not considered necessary to form a separate committee for this purpose. 27. Remuneration of the Board of Directors According to the Articles of Association, the General Assembly decides the rights, benefits or fees of the board members. According to the Articles of Association, the dividend for board membership decided by the General Assembly is paid to the shareholding corporate entity they represent. Board members and executives did not receive any loans during the term. Annual Report 53

56 ANNUAL REPORT Report Period: January 01, December 31, Title of the Company: Çimsa Çimento Sanayi ve Ticaret A.fi. 3- Board of Directors and Audit Board during the period: A- Board of Directors: Erhan KAMIfiLI Mehmet GÖÇMEN M. Nedim BOZFAKIO LU Tamer GÜVEN Y lmaz KÜLCÜ The Members of the Board of Directors have been elected for two years, at the Annual Ordinary General Meeting of the Shareholders held on May 2, 2006, until the Ordinary General Meeting of the Shareholders in 2008, where the results of the 2007 activities will be discussed. B- Audit Board: Mehmet SERT Bahad r BORAN Members of the Audit Board were elected for one year, on the first Ordinary General Meeting of the Shareholders held on April 17, Change in the Articles of Association during the Period: During the period, article 6 of the Articles of Association related with capital has been changed due to the capital increase resulting from the merge by taking over Oysa Çimento Sanayii ve Ticaret A.fi. 5- Information about Equity Securities and Shareholders: The price of our equity securities trading on Istanbul Stock Exchange is between TRY 6,35 and TRY 6,75. Paid Out Dividend Rates for the Last Three Years: Paid Out Dividend Rate from 2004 Profit: 39% Paid Out Dividend Rate from 2005 Profit: 37% Paid Out Dividend Rate from 2006 Profit: 87% Shareholders Holding 10% and more Shares: Shareholders Share Amount (TRY) Share % Hac Ömer Sabanc Holding A.fi ,12 Adana Çimento Sanayi T.A.fi ,12 54 Annual Report

57 (CONVENIENCE TRANSLATION OF FINANCIAL STATEMENTS AND FOOTNOTES ORIGINALLY ISSUED IN TURKISH) Ç MSA Ç MENTO SANAY VE T CARET ANON M fi RKET CONSOLIDATED FINANCIAL STATEMENTS TOGETHER WITH REPORT OF INDEPENDENT AUDITORS DECEMBER 31, 2007

58 (CONVENIENCE TRANSLATION OF FINANCIAL STATEMENTS AND FOOTNOTES ORIGINALLY ISSUED IN TURKISH) Ç MSA Ç MENTO SANAY VE T CARET ANON M fi RKET AND ITS SUBSIDIARIES CONSOLIDATED BALANCE SHEET AS AT DECEMBER 31, 2007 (CURRENCY - NEW TURKISH LIRA) Current Period Prior Period ASSETS Audited Audited December 31, December 31, Notes Current Assets Cash and Cash Equivalents 4, Marketable Securities, net 5, Trade Receivables, net Finance Lease Receivables, net Due from Related Parties, net Other Receivables, net Biological Assets, net Inventories, net Receivables from Construction Contracts, net Deferred Tax Assets Other Current Assets Non-Current Assets Trade Receivables, net Finance Lease Receivables, net Due from Related Parties, net Other Receivables, net Financial Assets, net Positive/Negative Goodwill, net Investment Property, net Property, Plant and Equipment, net Intangible Assets, net Deferred Tax Asset Other Non-Current Assets Total Assets The accompanying policies and explanatory notes on pages 59 through 96 form an integral part of the consolidated financial statements. 56 Annual Report

59 Current Period Prior Period Notes Audited Audited LIABILITIES December 31, December 31, Current Liabilities Financial Liabilities 6, Current Portion of Long-Term Financial Liabilities, net Finance Lease Payables, net Other Financial Liabilities, net Trade Payables, net Due to Related Parties, net Advances Taken Deferred Income from Construction Contracts (net) Provisions Deferred Tax Liabilities Other Current Liabilities, net Total Non-Current Liabilities Financial Liabilities 6, Finance Lease Obligations, net Other Financial Liabilities, net Trade Payables, net Due to Related Parties, net Advances Taken Provisions Deferred Tax Liability Other Non-Current Liabilities, net Minority Interest Equity Share Capital 25, Treasury Shares Share Capital Reserves 26, Share Premiums Income on Common Stock Disposals - - Revaluation Fund - - Financial Assets Value Increase Fund Inflation Adjustment Differences on Equity Other Reserves - - Profit Reserves Legal Reserves Status Reserves - - Extraordinary Reserves Special Reserves - - Other Reserves - - Gain on Sale of Participation Shares and Plant and Equipment to be Transferred to Share Capital - - Currency Translation Differences ( ) ( ) Net Profit for the Year Prior Year Profit Total Liabilities and Equity The accompanying policies and explanatory notes on pages 59 through 96 form an integral part of the consolidated financial statements. Annual Report 57

60 (CONVENIENCE TRANSLATION OF FINANCIAL STATEMENTS AND FOOTNOTES ORIGINALLY ISSUED IN TURKISH) Ç MSA Ç MENTO SANAY VE T CARET ANON M fi RKET AND ITS SUBSIDIARIES CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2007 (CURRENCY - NEW TURKISH LIRA) Current Period Prior Period Audited Audited January 1 - January 1 - December 31, December 31, Notes Operating Income Sales, net 9, 35, Cost of Sales (-) 9, 35, 36 ( ) ( ) Service Income, net Other Income from Operational Activities/Interest + Dividend + Rent, net Gross Profit Operational Expenses (-) 9, 35, 37 ( ) ( ) Profit From Operations, net Other Operating Income 9, Other Operating Expense (-) 9, 38 ( ) ( ) Financial Expense, net (-) 9, ( ) Operating Profit Net Monetary Loss Minority Interest Profit Before Taxation Taxes 41 ( ) ( ) Net Profit From Continued Operations Net Profit From Discontinued Operations Net Profit Average Number of Shares 1 New Kurufl (YKr) Per Value Each Earnings Per Share from Continued Operations (YKr) 42 0,0233 0,0105 Earnings Per Share from Discontinued Operations (YKr) 42 0,0001 0,0007 The accompanying policies and explanatory notes on pages 59 through 96 form an integral part of the consolidated financial statements. 58 Annual Report

61 (CONVENIENCE TRANSLATION OF FINANCIAL STATEMENTS AND FOOTNOTES ORIGINALLY ISSUED IN TURKISH) Ç MSA Ç MENTO SANAY VE T CARET ANON M fi RKET AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS AT DECEMBER 31, 2007 (CURRENCY - NEW TURKISH LIRA, UNLESS OTHERWISE INDICATED) 1. CORPORATE INFORMATION General Çimsa Çimento Sanayi ve Ticaret A.fi. (Çimsa) was founded with registration date at December 16, 1972 and announced at Turkish Trade Registry Gazette numbered 4729 and dated December 21, Operations of the Company consist of production and sales of cement, clinker and ready-mixed concrete. The ultimate shareholder of the Company is Hac Ömer Sabanc Holding A.fi. (Sabanc Holding). The registered office address of the Company is Toroslar Mah., Tekke Cad., Yenitaflkent 33013, Mersin/Turkey Subsidiaries and Jointly Controlled Entities Oysa Çimento Sanayi ve Ticaret A.fi. (Oysa Çimento) was established in Ni de and its operations consist of production, marketing and sales of cement and clinker. Oysa Çimento was established as a joint venture by its shareholders Çimsa and Ordu Yard mlaflma Kurumu (OYAK). However, on October 19, 2006, the Board of Directors of the Çimsa decided to end the partnership with OYAK lasting for 15 years considering the decision of the Competition Board dated October 3, 2006 and numbered In these circumstances on March 22, 2007, Share Transfer Agreement was signed between Sabanc Holding and shareholders of Oysa Çimento, OYAK, Adana Çimento Sanayii T.A.fi. (Adana Çimento) and Mardin Çimento Sanayii T.A.fi. (Mardin Çimento). Furthermore on the same date Asset Sale Agreement was signed between Oysa Çimento and Adana Çimento. With this agreement, it has been decreased to sell skenderun Cement Grinding Facility and related ready made concrete facilities owned by Oysa Çimento to Adana Çimento at the amount of USD and Oysa Çimento shares owned by OYAK, Adana Çimento and Mardin Çimento were sold to Sabanc Holding at the amount of USD Furthermore, on April 24, 2007, the Competition Board approved the realization of such transactions and as of April 30, 2007 aforementioned sales transactions have been realized. On May 30, 2007, the Board of Directors of Çimsa decided to merge Çimsa Çimento Sanayi ve Ticaret A.fi. with Oysa Çimento Sanayi ve Ticaret A.fi. via acquisition in accordance with Turkish Commercial Code Article 451 and Corporate Tax Legislation Articles 18, 19 and 20. Then, related permission application was made to Turkish Republic Prime Ministry Capital Market Board on July 19, In the application file, reports prepared by the official appraiser charged by Turkish Republic Mersin Commercial Court of First Instance and expert firm Akis Ba ms z Denetim ve SMMM A.fi. were included. In the report prepared by Akis Ba ms z Denetim ve SMMM A.fi. dated June 26, 2007, merger rates were determined in accordance with Discounted Cash Flow ( DCF ), Market Multipliers Analysis and Equity Method as stated below: Method Merger Rate Conversion Rate DCF 89,7998% 66,3219% Market Multipliers Analysis 94,8265% 31,8553% Equity Method 89,6910% 67,1109% DCF method based on non-consolidated financial statements prepared as of April 30, 2007 in accordance with financial reporting standards published by Capital Market Board was determined as merger method and share conversion rate was determined as 66,3219%. This conversion rate was identified as fair and adequate by both of the expert firm and the official appraiser. Extraordinary General Assembly meeting of Çimsa related with Oysa Çimento merger via acquisition has been held on October 30, 2007 and due to decrees of the Merger (Acquisition) Agreement, it has been decided to merge Oysa Çimento with Çimsa via dissolution with nonliquidation method and total succession of all assets and liabilities of Oysa Çimento in accordance with Turkish Commercial Code Article 451 and Corporate Tax Code Articles Official registration of the merger as of October 31, 2007 was announced in the trade registry gazette dated November 5, Related to the distribution of shares after the increase in the issued share capital of Çimsa from TRY to TRY at the amount of TRY due to the merger with Oysa Çimento via acquisition, it has been announced to the public that the shareholders of Oysa Çimento have the right to change their 1 share in Oysa Çimento at the nominal amount of YKr 1 with 0, share in Çimsa at the nominal amount of YKr 1. Due to such acquisition, the shares of Oysa Çimento were delisted in ISE National-All Shares and ISE National- Industrials-Non-Metal Mineral Products indices, effective from December 9, Effective from November 9, 2007 it has been taken into account that the share capital of Çimsa is TRY and the custody rate is 29%. Annual Report 59

62 (CONVENIENCE TRANSLATION OF FINANCIAL STATEMENTS AND FOOTNOTES ORIGINALLY ISSUED IN TURKISH) Ç MSA Ç MENTO SANAY VE T CARET ANON M fi RKET AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS AT DECEMBER 31, 2007 (CURRENCY - NEW TURKISH LIRA, UNLESS OTHERWISE INDICATED) 1. CORPORATE INFORMATION (continued) After the aforementioned realization of the asset sales agreement between Oyak group companies and Sabanc Holding, Oysa Çimento and Çimsa has become entities under common control of Sabanc Holding. Until April 30, 2007, Çimsa's effective shareholding rate on Oysa Çimento was 41,09%. Same as the previous periods, financial statements of Oysa Çimento was consolidated via proportional consolidation method until April 30, 2007 and after that date financial statements of Oysa Çimento was fully consolidated as Çimsa and Oysa Çimento are the entities under common control of Sabanc Holding. At the time of legal merger at October 31, 2007, purchase accounting in accordance with IFRS 3 Business Combinations was not applied to the financial statements of Oysa Çimento and differences arising from the merger the were included in related equity accounts in the consolidated financial statements of Çimsa as of December 31, 2007 via pooling of interests method (Notes 27-28). The Company purchased Çimsa Cement Free-Zone Limited (Çimsa Cement, previously named Erçim Çimento Limited) on October 12, 2005, which is located in Gazi Ma usa Serbest Liman ve Bölge in Turkish Republic of Northern Cyprus (TRNC) and operating in packing, marketing and sales of cement Çimsa Cement is fully consolidated since this date. On February 8, 2006, the Company invested in 99% of CIMSAROM Marketing Distributie S.R.L. (Çimsarom) as the founder shareholder, which was established to operate in cement packaging, sales and marketing industry in Romania Kostence Harbor. Çimsarom has been consolidated since the establishment date. On June 27, 2006, the Company purchased 50% of Cement Sales North Gmbh (CSN), operating in white cement marketing in Germany having a paid-in share capital of Euro 30,000 from another Sabanc Group company, Exsa (UK) Limited, by paying Euro (TRY ). As of December 31, 2007 the share of the Company in CSN is 50% and CSN is proportionately consolidated. On July 7, 2006, the Company purchased Çimsa Cementos Espana, S.A.U. (Cementos Espana, previously named Exportaciones Sabanc S.A.U.), the owner of the cement terminal in Seville Harbor to supply bulk and packed cement to white cement market and having a nominal value of EURO 2 per share consisted of shares, from Exsa (UK) Limited by paying Euro The financial statements of Cementos Espana were consolidated into the financial statements of the Company since the purchase date. For the purpose of presentation of consolidated financial statements, Çimsa, the proportionally consolidated CSN, and fully consolidated subsidiaries Çimsa Cement, Çimsarom and Cementos Espana, will be together referred to as the Group. Nature of Activities The Group is engaged in production and sales of cement, clinker and ready-mixed concrete The consolidated financial statements of Çimsa were authorized for issue by the management on March 17, The General Assembly and certain regulatory bodies have the power to amend the statutory financial statements after issue. The Group has 916 employees as of December 31, 2007 (December 31, ). 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Preparation The financial statements of the Group have been prepared in accordance with accounting and reporting standards as prescribed by the Turkish Capital Market Board (the CMB) ( CMB Accounting Standards ). The CMB has issued Communiqué No. XI-25 Communiqué on Accounting Standards in Capital Markets which sets out a comprehensive set of accounting principles. In this Communiqué, the CMB stated that, as an alternative, application of accounting standards prescribed by the International Accounting Standards Board (IASB) and the International Accounting Standards Committee (IASC) will also be considered to be compliant with the CMB Accounting Standards. With the decision taken on March 17, 2005, the CMB has declared that effective from January 1, 2005 application of inflation accounting is no longer required for companies operating in Turkey which are reporting in accordance with CMB Accounting Standards. The financial statements have been prepared under the alternative application defined by the CMB as explained above. The financial statements and explanatory notes are presented using the compulsory standard formats as prescribed by the CMB Çimsa maintains its books of accounts and prepare its statutory financial statements in New Turkish Lira (TRY) in accordance with the regulations on accounting and reporting framework and accounting standards promulgated by the Turkish Capital Market Board (CMB), (for publicly traded companies) and Turkish Commercial Code and Tax Legislation and the Uniform Chart of Accounts issued by the Ministry of 60 Annual Report

63 (CONVENIENCE TRANSLATION OF FINANCIAL STATEMENTS AND FOOTNOTES ORIGINALLY ISSUED IN TURKISH) Ç MSA Ç MENTO SANAY VE T CARET ANON M fi RKET AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS AT DECEMBER 31, 2007 (CURRENCY - NEW TURKISH LIRA, UNLESS OTHERWISE INDICATED) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Finance. The foreign subsidiaries maintain their books of accounts in accordance with the laws and regulations in force in the countries where they are registered. The consolidated financial statements have been prepared from statutory financial statements of the Group and presented in New Turkish Lira (TRY) with adjustments and reclassifications for the purpose of fair presentation in accordance with CMB Accounting Standards. Main adjustments are; consolidation with proportional consolidation and equity method, accounting for goodwill, deferred taxes, discounting of receivables and payables, employee termination benefits and provisions. Functional and Reporting Currency The functional and reporting currency of Çimsa, and its proportionally consolidated subsidiary Exsa Export Sanayi Mamülleri Sat fl ve Araflt rma A.fi (Exsa) is TRY. Functional currency of Çimsa Cement is United States Dollar (USD), functional currency of CSN and Cementos Espana is EUR and the functional currency of Çimsarom is New Rumanian Lei. Based on International Accounting Standard (IAS) 21, the exchange rate used for translating the balance sheet items is the exchange rate at the balance sheet date; for income statement and the cash flow items, the average exchange rate of the related period. The resulting foreign currency gain/loss is recorded under the Currency Translation Differences account in equity. In accordance with the Capital Market Board's resolution dated March 17, 2005 and numbered 11/367, financial statements were restated in accordance with IAS 29 (Financial Reporting in Hyperinflationary Economies) for the last time as of December 31, 2004 since the objective conditions which require the application of restatement of financial statements have not been realized and that based on the existing data CMB has foreseen that the indications whether such conditions are going to be realized in the future is no longer probable. Therefore, nonmonetary assets, liabilities and equity items including the share capital as of December 31, 2007 and 2006 have been restated by applying the relevant conversion factors through December 31, 2004 and carrying additions after December 31, 2004 at their nominal values. Comparative Information and Reclassifications Made to the Previous Year's Financial Statements In the Group's consolidated income statements for the year then ended December 31, 2007, accounts comprising from economic unit of Iskenderun operations owned by Oysa Çimento are presented in a separate line as Net Profit from Discontinued Operations. Therefore the consolidated income statements of the year 2006 have been comparatively reclassified, accordingly. Changes in Accounting Policies The accounting policies adopted are consistent with those of the previous financial year except as follows: The Group has adopted the following new and amended IFRS and IFRIC interpretations during the year which are effective from January 1, 2007 Adoption of New and Amended Financial Reporting Standards IFRS 7, Financial Instruments: Disclosures IAS 1 - Presentation of Financial Statements - Capital Disclosures IFRIC 8, IFRS 2 Scope of Share Based Payments IFRIC 9, Reassessment of Embedded Derivatives IFRIC 10, Interim Financial Reporting and Impairment Except UFRS 7, Adoption of new and amended financial reporting standards and interpretations has no material effect on the Group's financial statements and related disclosures. Standards and Interpretations that are issued but not yet effective as of December 31, 2007 Certain new standards, amendments and interpretations to existing standards have been published that are mandatory for later periods, but which the Group has not early adopted, as follows: IFRS 2, Share Based Payments (Amended) (effective for annual periods beginning on or after January 1, 2009). Annual Report 61

64 (CONVENIENCE TRANSLATION OF FINANCIAL STATEMENTS AND FOOTNOTES ORIGINALLY ISSUED IN TURKISH) Ç MSA Ç MENTO SANAY VE T CARET ANON M fi RKET AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS AT DECEMBER 31, 2007 (CURRENCY - NEW TURKISH LIRA, UNLESS OTHERWISE INDICATED) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) IFRS 3 Business Combinations and IAS 27 Consolidated and Separate Financial Statements and related amendments (effective for annual periods beginning on or after July 1, 2009). IFRS 8, Operating Segments (effective for annual periods beginning on or after January 1, 2009). IAS 1, Presentation of Financial Statements (Amended) (effective for annual periods beginning on or after January 1, 2009). IAS 23 Revised - Borrowing Costs (effective for annual periods beginning on or after January 1, 2009). IAS 32 ve IAS 1 Puttable Financial Instruments (effective for annual periods beginning on or after January 1, 2009). IFRIC 11- IFRS 2-Group and Treasury Share Transactions (effective for financial years beginning on or after March 1, 2007). IFRIC 12 - Service Concession Arrangements (effective for annual periods beginning on or after January 1, 2008) IFRIC 13- Customer Loyalty Programmes (effective for annual periods beginning on or after July 1, 2008) IFRIC 14 - IAS 19, The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction (effective for annual periods beginning on or after January 1, 2008) The Group has not early adopted the above mentioned standards mentioned above. Basis of Consolidation The consolidated financial statements comprise the financial statements of Çimsa and its fully consolidated subsidiaries Çimsa Cement, Çimsarom and Cementos Espana and the financial statements of CSN consolidated at %50. Subsidiaries Subsidiaries are consolidated from the date on which control is transferred to the Company and ceased to be consolidated from the date on which control is transferred from the Company. This control is normally evidenced when Çimsa owns, either directly or indirectly, more than 50% of the voting rights of a company's share capital and is able to govern the financial and operating policies of an enterprise so as to benefit from its activities. Accordingly, the financial statements of Çimsa Cement, Cementos Espana and Çimsarom are fully consolidated in accordance with IAS 27 Consolidated and Separate Financial Statements. Jointly Controlled Entities CSN and until April 30, 2007 Oysa Çimento are the entities jointly controlled by Çimsa and other shareholders, with a participation ratio of 50% and 41,09%, respectively. In this respect, interests in Oysa Çimento until April 30, 2007 and CNS are recognized using proportionate consolidation as the benchmark treatment mentioned in the IAS 31 Interests in Joint Ventures. Balance sheet and income statement items (for Oysa Çimento, income statement only for the period between January 1 - April 30, 2007) of the jointly controlled entities have been added to the balance sheet and income statement items of Çimsa by considering the shareholding percentage of Çimsa in the joint venture. Receivables and payable balances of Çimsa from/to these companies and income statement items have been eliminated based on the shareholding interest. Consolidated financial statements include the financial statements of Çimsa and its subsidiaries and jointly controlled entities. Consolidated financial statements are prepared using uniform accounting policies for like transactions and other events in similar circumstances. Associates The associate of the Company, Exsa, is accounted by using the equity method, which is classified under financial assets. The investment in an associate is carried on the balance sheet at cost plus post-acquisition changes in the Company's share of net assets of the associates. Consolidated income statement reflects the share of the Company on the results of operations of the associate. 62 Annual Report

65 (CONVENIENCE TRANSLATION OF FINANCIAL STATEMENTS AND FOOTNOTES ORIGINALLY ISSUED IN TURKISH) Ç MSA Ç MENTO SANAY VE T CARET ANON M fi RKET AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS AT DECEMBER 31, 2007 (CURRENCY - NEW TURKISH LIRA, UNLESS OTHERWISE INDICATED) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Offsetting Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to net off the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. Significant Accounting Judgments, Estimates and Assumptions The preparation of financial statements requires Group management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the balance sheet. Actual results may vary from the current estimates. These estimates are reviewed periodically, and, as adjustments become necessary, they are reported in earnings in the periods in which they become known. The key assumptions concerning the future and other key resources of estimation uncertainty at the balance sheet date and the significant judgments with the most significant effect on amounts recognized in the consolidated financial statements are discussed in the relevant sections of the notes below, which are mainly related to the use of actuarial assumptions in the calculation of retirement pay liabilities, useful lives of tangible and intangible assets and key assumption used in the impairment test of goodwill based on discounted cash flow method. 3. BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES Cash and Cash Equivalents For the purpose of the presentation of the consolidated cash flow statement, cash and cash equivalents comprise cash on hand, cash in banks, checks and short-term deposits with an original maturity of three months or less. Trade Receivables Trade receivables are recognized and carried at original invoice amount less an allowance for any uncollectible amounts and an allowance for unearned interest calculated using the effective interest rate method (interest rates are 15% for TRY, 4,3% for USD and 4,8% for EUR). (December 31, % for TRY, 5,3% for USD and 2,9% for EUR) Notes and post-dated checks, which are classified within trade receivables are measured at amortized cost using the effective interest rate method. The allowance for doubtful receivables is established through a provision charged to expenses. Provision is made when there is objective evidence that the Group will not be able to collect the debts. The allowance is an estimated amount that Group management believes to be adequate to absorb possible future losses on existing receivables that may become uncollectible due to current economic conditions and inherent risks in the receivables. Bad debts are written off when identified. Inventories Inventories are valued at the lower of cost and net realizable value. Cost incurred in bringing each product to its present location and conditions are accounted for as follows: Raw materials and supplies - restated cost determined on moving weighted average basis. Finished goods and work-in-process - cost of direct materials and labor and a proportion of manufacturing overheads based on normal operating capacity. Inventory valuation is made on moving weighted average basis. Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale. Investments Available for Sale Investments available for sale are presented under Financial Assets in the balance sheet. All investments are initially recognized at cost, being the fair value of the consideration given, and including acquisition charges associated with the investment. Annual Report 63

66 (CONVENIENCE TRANSLATION OF FINANCIAL STATEMENTS AND FOOTNOTES ORIGINALLY ISSUED IN TURKISH) Ç MSA Ç MENTO SANAY VE T CARET ANON M fi RKET AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS AT DECEMBER 31, 2007 (CURRENCY - NEW TURKISH LIRA, UNLESS OTHERWISE INDICATED) 3. BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES (continued) After initial recognition, investments which are classified as available-for-sale are measured at fair value. Interest earned on available for sale investments is reported as interest income. Gains or losses on available-for-sale investments are recognized as a separate component of equity until the investment is sold, collected or otherwise disposed of, or until the investment is determined to be impaired, at which time the cumulative gain or loss previously reported in equity is included in income. For investments that are actively traded on the organizational structures, fair value is determined by reference to market prices at the close of business on the balance sheet date. For investments where there is no market price and where reasonable estimate of the fair value could not be determined since other methods are inappropriate and impractical, they are stated at cost less any impairment in value. Property, Plant and Equipment Property, plant and equipment are stated at cost less accumulated depreciation and any impairment in value. The initial cost of property, plant and equipment comprises its purchase price, including import duties, non-refundable taxes and any directly attributable costs of bringing the asset to its working condition and location for its intended use. Expenditures incurred after the property, plant and equipment have been put into the operation, such as repairs and maintenance are normally charged to expense in the period the costs are incurred. Expenditures are added to cost of property, plant and equipment items if the expenditures provide economic added value for the future use of the related property, plant and equipment. When assets are sold or retired, their cost and accumulated depreciation are eliminated from the accounts and any gain or loss resulting from their disposal is included in consolidated income statement. Land is not depreciated. Depreciation is calculated on all property, plant and equipment on a straight-line basis over the estimated useful life of the asset as follows: Land improvements Buildings Machinery and equipment Furniture and fixtures Motor vehicles Other Leasehold improvements years years 5-20 years 3-15 years 5-14 years 5-10 years Lease period Intangible Assets Intangible assets which are composed of mining rights and computer licenses are capitalized at purchase value. Intangible assets are recognized if it is probable that the future economic benefits that are attributable to the asset will flow to the enterprise; and the cost of the asset can be measured reliably. After initial recognition, intangible assets are measured at cost less accumulated amortization and any accumulated impairment losses. Intangible assets excluding development costs, created within the business are not capitalized and expenditure is charged against profits in the year in which it is incurred. The useful lives of intangible assets are assessed to be either finite or indefinite. Intangible assets with finite lives are amortized on a straight line basis over the best estimate of their useful lives. The amortization period and the amortization method for an intangible asset with a finite useful life are reviewed at least at each financial yearend. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset is accounted for by changing the amortization period or method, as appropriate, and treated as changes in accounting estimates. The amortization expense on intangible assets with finite lives is recognised in the income statement in the expense category consistent with the function of the intangible asset. Intangible assets are amortized on a straight-line basis over the best estimate of their useful lives. Mining rights Computer licenses 20 year 5 year The Company has no intangible assets that have indefinite useful life. The carrying values of intangible assets are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable. 64 Annual Report

67 (CONVENIENCE TRANSLATION OF FINANCIAL STATEMENTS AND FOOTNOTES ORIGINALLY ISSUED IN TURKISH) Ç MSA Ç MENTO SANAY VE T CARET ANON M fi RKET AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS AT DECEMBER 31, 2007 (CURRENCY - NEW TURKISH LIRA, UNLESS OTHERWISE INDICATED) 3. BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES (continued) Impairment on Assets The carrying values of assets are reviewed for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. Whenever the carrying amount of an asset exceeds its recoverable amount, an impairment loss is recognized in income for the period. The recoverable amount of the asset is the greater of net selling price and value in use. The recoverable amount is determined for each asset, if possible; if not it is determined for the cash-generating unit to which the asset belongs. Reversal of impairment losses recognized in prior years is recorded in the income statement when there is an indication that the impairment losses recognized for the asset no longer exist or have decreased. But, any reversal of impairment loss is recognized in income statement, to the extent that the carrying value of the asset does not exceed its value before the impairment. Goodwill Goodwill represents the excess of the cost of the acquisition over the fair value of identifiable net assets of the acquiree at the date of acquisition. The goodwill arising from the business combinations is not amortized in accordance with IFRS 3 Business Combinations. Goodwill is reviewed for impairment, at least annually if events or changes in circumstances indicate that the carrying value may be impaired. As explained in detail in Note 17 and Note 32, the Company purchased Standart Çimento Sanayi A.fi. (Standart Çimento) - Eskiflehir Plant and Lalahan Grinding Facility from Saving Deposit Insurance Fund (SDIF) on December 26, As explained in detail in Notes 1, 17 and 32, the Company also purchased Çimsa Cement on October 12, The Company initially recognized the identifiable assets and liabilities of the aforementioned purchases at fair values at the date of the agreements, and the excess of the cost of the purchases over the identifiable assets and liabilities were recognized as goodwill, net off deferred tax, in accordance with IFRS 3 Business Combinations. Foreign Currency Transactions Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction to TRY. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of exchange ruling at the balance sheet date. Exchange gains or losses arising on settlement and translation of foreign currency items have been included in the related income or expense accounts as appropriate. Foreign currency translation rates used by the Group as of respective year-ends are as follows: Date TRY/USD TRY/EURO December 31, ,3418 1,5875 December 31, ,4056 1,8515 December 31, ,1647 1,7102 Bank Borrowings All borrowings are initially recognized at cost, being the fair value of the consideration received net of issue costs associated with the borrowing. After initial recognition, borrowings are subsequently measured at amortized cost using the effective interest rate method. Amortized cost is calculated by taking into account any issue costs, and any discount or premium on settlement. Gains and losses are recognized in net profit or loss when the liabilities are derecognized, as well as through the amortization process. Trade Payables Trade payables are carried at amortized cost which is the fair value of the consideration to be paid in the future for goods and services received, whether or not billed to the Group. Interest rates used when determining the amortized cost are 15% for TRY, 4,3% for USD and 4,8% for EUR. (December 31, TRY: 20%, USD 5,3%, EUR: 2,9%). Annual Report 65

68 (CONVENIENCE TRANSLATION OF FINANCIAL STATEMENTS AND FOOTNOTES ORIGINALLY ISSUED IN TURKISH) Ç MSA Ç MENTO SANAY VE T CARET ANON M fi RKET AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS AT DECEMBER 31, 2007 (CURRENCY - NEW TURKISH LIRA, UNLESS OTHERWISE INDICATED) 3. BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES (continued) Provisions, Contingent Assets and Liabilities Provisions Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognized as an interest expense. Contingent Liabilities and Assets Contingent liabilities are not recognized in the financial statements; they are disclosed only if they do not bear high probability of an outflow of resources embodying economic benefits. Contingent assets are explained in the footnotes only in case of a highly-probable inflow of economic benefit. Income Tax Tax expense (income) is the aggregate amount included in the determination of net profit or loss for the period in respect of current and deferred tax. Deferred income tax is provided, using the liability method, on all temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred income tax liabilities are recognized for all taxable temporary differences. Deferred income tax assets are recognized for all deductible temporary differences, carry-forward of unused tax assets and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, carry-forward of unused tax assets and unused tax losses can be utilized. The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilized. Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance sheet date (Note 14). Deferred income tax assets and deferred income tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current income tax liabilities and the deferred income taxes relate to the same taxable entity and the same taxation authority (Note 14). Employee Termination Benefits a) Defined Benefit Plans: In accordance with existing social legislation in Turkey, the entities operating in Turkey is required to make lump-sum termination indemnities to each employee who has completed over one year of service with the Group and whose employment is terminated due to retirement or for reasons other than resignation or misconduct. As explained in detail in Note 23, the Group has reflected a liability using the Projected Unit Credit Method based on the actuarial valuation performed by independent actuaries. The employee termination benefits are discounted to the present value of the estimated future cash outflows using the interest rate estimate of qualified actuaries. On the consolidated balance sheets, the liabilities for employee termination benefits are reflected under non-current liabilities. b) Defined Contribution Plans: The Group pays contributions to the Social Security Institution of Turkey on a mandatory basis. The Group has no further payment obligations once the contributions have been paid. The contributions are recognized as employee benefit expense when they are due. 66 Annual Report

69 (CONVENIENCE TRANSLATION OF FINANCIAL STATEMENTS AND FOOTNOTES ORIGINALLY ISSUED IN TURKISH) Ç MSA Ç MENTO SANAY VE T CARET ANON M fi RKET AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS AT DECEMBER 31, 2007 (CURRENCY - NEW TURKISH LIRA, UNLESS OTHERWISE INDICATED) 3. BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES (continued) Related Parties Parties are considered to be related if any of the conditions stated below exists: (a) directly, or indirectly through one or more intermediaries, the party: (i) controls, is controlled by, or is under common control with, the Company (this includes parents, subsidiaries and fellow subsidiaries); (ii) has an interest in the Company that gives it significant influence over the Company; or (ii) has joint control over the Company; (b) the party is an associate of the Company; (c) the party is a joint venture in which the Company is a venturer; (d) the party is member of the key management personnel of the Company or its parent; (e) the party is a close member of the family of any individual referred to in (a) or (d); (f) the party is an entity that is controlled, jointly controlled or significantly influenced by, or for which significant voting power in such entity resides with, directly or indirectly, any individual referred to in (d) or (e); (g) the party is a post-employment benefit plan for the benefit of employees of the Company, or of any entity that is a related party of the Company. A related party transaction is a transfer of resources, services or obligations between related parties, regardless of whether a price is charged. Currency Translation Differences The assets and liabilities of foreign subsidiaries are translated at the rate of exchange ruling at the balance sheet date. The income statements of foreign subsidiaries are also translated at monthly average exchange rates. Differences resulting from the translation were taken to equity as Currency Translation Differences. Differences resulting from the deviation between the inflation rate (until December 31, 2004) and the appreciation of foreign currencies against the New Turkish Lira related to equity accounts of consolidated subsidiaries were taken to equity as Currency Translation Differences. Revenue Recognition Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenues are stated net of discounts, value added and sales taxes. The following specific recognition criteria must also be met before revenue is recognized. Sales of Goods Revenue is recognized when the significant risks and rewards of ownership of the goods have passed to the buyer at the invoiced values and the amount of revenue can be measured reliably. Net sales represent the invoiced value of goods shipped net of sales discounts and commission. Rendering of Services Revenue from rendering services is recognized by reference to the stage of completion when it can be measured reliably. Where the contract outcome cannot be measured reliably, revenue is recognized only to the extent of the expenses recognized that are recoverable. Interest Revenue is recognized as the interest accrues unless collectibility is in doubt. Dividends Revenue is recognized when the Shareholders have the right to receive the payment. Discontinued Operations As also detailed in Note 1, due to Asset Sale Agreements signed between Oysa Çimento and Adana Çimento on March 22, 2007, the economic unit of Iskenderun operation was sold to Adana Çimento at the amount of equivalent TRY of USD as of April 30, In the Group's consolidated financial statements for the year ended December 31, 2007, accounts comprising from economic unit of Iskenderun operation owned by Oysa Çimento are presented in a separate line as Net Profit from Discontinued Operations. Annual Report 67

70 (CONVENIENCE TRANSLATION OF FINANCIAL STATEMENTS AND FOOTNOTES ORIGINALLY ISSUED IN TURKISH) Ç MSA Ç MENTO SANAY VE T CARET ANON M fi RKET AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS AT DECEMBER 31, 2007 (CURRENCY - NEW TURKISH LIRA, UNLESS OTHERWISE INDICATED) 3. BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES (continued) Borrowing Costs Borrowing costs are expensed as incurred. Earnings per Share Basic earnings per share (EPS) in the consolidated income statement are calculated by dividing the net profit for the year by the weighted average number of ordinary shares outstanding during the year. In Turkey, companies can increase their share capital by making distribution of free shares to existing shareholders from various internal resources. For the purpose of the EPS calculation such share issues are regarded as stock dividend. Accordingly the weighted average number of shares used in EPS calculation is derived by giving retroactive effect to the issue of such shares Subsequent Events Post-year-end events that affect the Group's position at the balance sheet date (adjusting events), are reflected in the financial statements. Postyear-end events that are not adjusting events are disclosed in the notes according to their materiality. Trade and Settlement Date Accounting All "regular way" purchases and sales of financial assets are recognized on the trade date, in other words, the date the Group commits to purchase the asset. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame generally established by regulation or convention in the market place. Recognition and De-Recognition of Financial Instruments The Group recognizes a financial asset or financial liability in its balance sheet when and only when it becomes a party to the contractual provisions of the instrument. The Group derecognizes a financial asset or a portion of financial asset when and only when it loses control of the contractual rights that comprise the financial asset or a portion of financial asset. The Group derecognizes a financial liability when and only when a liability is extinguished that is when the obligation specified in the contract is discharged, cancelled and expired. Financial Risk Management Objectives and Polices The Group's principal financial instruments comprise, bank loans, cash and short-term deposits. The main purpose of these financial instruments is to raise financing for the Group's operations. The Group has various other financial instruments such as trade receivables and trade payables, which arise directly from its operations. The main risks arising from the Group's financial instruments are interest rate risk, foreign currency risk, liquidity risk and credit risk. The management reviews and agrees policies for managing each of these risks as summarized below. The Group also monitors the market price risk arising from all financial instruments. Foreign Currency Risk The Group is exposed to foreign exchange risk arising from various currency exposures primarily with respect to U.S. Dollar, Euro and other foreign currency denominated held by the Group assets and liabilities. The Group also has transactional currency exposures. Such exposures arise from sales or purchases or borrowings by the Group in currencies other than the Group's functional currency and holding foreign currency denominated bank loans. The Group manages foreign currency risk by using natural hedges that arise from offsetting foreign currency denominated assets and liabilities. Net foreign currency exposure of the Company at December 31, 2007 and December 31, 2006 is approximately TRY and TRY short, respectively (Note 29). The reason of the Group's short position at December 31, 2007 and 2006 is the loans used for the purchase of the fixed assets, which was acquired by competitive bidding of the Saving Deposit Insurance Fund (SDIF). Interest Rate Risk The Group's exposure to market risk for changes in interest rates relates primarily to the Group's interest bearing assets and liabilities. The Group manages interest rate risk and cash flow of interest rate risk through natural hedges that arise from offsetting the same interest bearing assets and liabilities. 68 Annual Report

71 (CONVENIENCE TRANSLATION OF FINANCIAL STATEMENTS AND FOOTNOTES ORIGINALLY ISSUED IN TURKISH) Ç MSA Ç MENTO SANAY VE T CARET ANON M fi RKET AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS AT DECEMBER 31, 2007 (CURRENCY - NEW TURKISH LIRA, UNLESS OTHERWISE INDICATED) 3. BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES (continued) Price Risk Price risk is a combination of currency, interest and market risks which the Group manages through natural hedges that arise from offsetting the same currency receivables and payables, interest bearing assets and liabilities. Market risk is closely monitored by the management using the available market information and appropriate valuation methods. Credit Risk Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. The Group attempts to control credit risk by monitoring credit exposures, limiting transactions with specific counterparties, and continually assessing the creditworthiness of the counterparties. The Group seeks to manage its credit risk exposure through diversification of sales activities to avoid undue concentrations of risks with individuals or groups of customers in specific locations or businesses. The Company also obtains security when appropriate. Liquidity Risk Liquidity risk is the risk that an entity will be unable to meet its net funding requirements. The risk is mitigated by matching the cash in and out flow volume supported by committed lending limits from qualified credit institutions. Fair Values Fair value is the amount for which an asset could be exchanged, or a liability settled between knowledgeable, willing parties in an arm's length transaction. The financial assets and liabilities which are denominated in foreign currencies are evaluated by the foreign exchange rates prevailing on the date of balance sheet which approximate to market rates. The following methods and assumptions were used to estimate the fair value of each class of financial instrument for which it is practicable to estimate a fair value. Financial Assets The fair values of certain financial assets carried at cost, including cash and cash equivalents plus the respective accrued interest and other financial assets are considered to approximate their respective carrying values due to their short-term nature and negligible credit losses. The carrying value of trade receivables along with the related allowance for uncollectibility is estimated to be their fair values. Financial Liabilities Trade payables and other monetary liabilities are considered to approximate their respective carrying values due to their short-term nature. The bank borrowings are stated at their amortized costs and transaction costs are included in the initial measurement of loans and bank borrowings. The fair value of bank borrowings are considered to state their respective carrying values since the interest rate applied to bank loans and borrowings are updated periodically by the lender to reflect active market price quotations. Capital Management The Group manages it capital by maintaining permanence of its operations and on the other hand by reviewing terms of the trade receivables, trade payables and financial liabilities and cash from operations which was gained from operations by using the debt and equity ratio in the most efficient way. The Group's top management evaluates the risks which are associated with the cost of capital and every equity account, and presents risks to Board of Directors which are depended to their decision. The Group's objective is to maintain the stability of capital structure by taking new debts or repayment of debts and also via dividend payments by depending on the decisions of Board of Directors. No changes were made in the objectives, policies or processes as compared to prior period. Segment Reporting The Company realizes majority of its sales in Turkey. Since there are not various product types and geographic locations which require segment reporting, the Company's management does not perform segment reporting. Annual Report 69

72 (CONVENIENCE TRANSLATION OF FINANCIAL STATEMENTS AND FOOTNOTES ORIGINALLY ISSUED IN TURKISH) Ç MSA Ç MENTO SANAY VE T CARET ANON M fi RKET AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS AT DECEMBER 31, 2007 (CURRENCY - NEW TURKISH LIRA, UNLESS OTHERWISE INDICATED) 4. CASH AND CASH EQUIVALENTS December 31, 2007 December 31, 2006 Bank accounts (including short-term time deposits) Checks in collection with maturities before year end Cash on hand Total Time deposits are made for varying periods having maturities between 2 and 43 days (December 31, between 6 and 34 days) for TRY denominated funds and earns interest at 15,75% - 18,8% ( ,96% - 20,5%). Remaining time deposits denominated in foreign currencies amounting to TRY are the amounts taken as a guarantee from the dealers. TRY of such amount is denominated in Euro, TRY is denominated in USD. In case of the guarantee amount is paid back then the guarantee amount with the interest amount earned is given back to the dealer. 5. MARKETABLE SECURITIES (NET) The Group does not have marketable securities as of December 31, 2007 and December 31, BORROWINGS (NET) Short-Term Financial Liabilities December 31, 2007 Effective Interest Rate Currency Minimum Maximum Maturity Balance Non secured loans TRY - - January 2, December 31, 2006 Effective Interest Rate Currency Maturity Balance Minimum Maximum Non secured loans TRY - - January 4, Annual Report

73 (CONVENIENCE TRANSLATION OF FINANCIAL STATEMENTS AND FOOTNOTES ORIGINALLY ISSUED IN TURKISH) Ç MSA Ç MENTO SANAY VE T CARET ANON M fi RKET AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS AT DECEMBER 31, 2007 (CURRENCY - NEW TURKISH LIRA, UNLESS OTHERWISE INDICATED) 6. BORROWINGS (NET) (continued) Long-Term Financial Liabilities December 31, 2007 Currency and Amount Effective Interest Rate Balance Non Secured Loans Minimum Maximum Maturity (TRY) USD ,03% 6,23% June 22, December 22, Less-current term portion (USD ) December 31, December 23, 2008 ( ) December 31, Currency and Amount Effective Interest Rate Balance Non Secured loans Minimum Maximum Maturity (TRY) USD ,75% 6,1% December 24, December 22, Less-current term portion (USD ) December 31, December 24, 2007 ( ) As of December 31, 2007 and 2006 interest and principal payments of loans which the Company used from various banks amounting to USD and USD will be paid semiannually in equal installments. This loans are variable rate loans and the interest rate of these loans change between Libor + %1,05 and Libor+ %1,25. Repayment schedule of long-term financial liabilities shown below: December 31, 2007 December 31, The Company has performed sensitivity analysis of its loans' interest rates in accordance with IFRS 7 Financial Instruments which is effective from January 1, 2007 and presented the effects on the consolidated financial statements for the year ended December 31, 2007 as follows: Percentage Change in Interest Rat Income/(Expense) Effect 5% ( ) (5%) Annual Report 71

74 (CONVENIENCE TRANSLATION OF FINANCIAL STATEMENTS AND FOOTNOTES ORIGINALLY ISSUED IN TURKISH) Ç MSA Ç MENTO SANAY VE T CARET ANON M fi RKET AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS AT DECEMBER 31, 2007 (CURRENCY - NEW TURKISH LIRA, UNLESS OTHERWISE INDICATED) 7. TRADE RECEIVABLES AND PAYABLES (NET) Trade Receivables a) Current Trade Receivables December 31, 2007 December 31, 2006 Trade receivables, net Notes receivable and post-dated checks Less : Allowance for doubtful receivables ( ) ( ) Trade receivables terms vary due to quality of the product and agreements made with customers and the average term is 50 days (December 31, days). Average term of notes receivable and post-dated checks are 30 days (December 31, days). b) Non-Current Trade Receivables December 31, 2007 December 31, 2006 Deposits and guarantees given Trade Payables Current Trade Payables December 31, 2007 December 31, 2006 Trade payables, net Guarantees taken from customers Avarage term of trade payables are 30 days (December 31, days). The Group does not have any non-current trade payables as of December 31, 2007 and December 31, The table below summarizes the maturity profile of the Company's trade receivables at December 31, 2007 and December 31, 2006: December 31, 2007 Less than Between 3 and On Demand 3 Months 12 Months Total Trade Receivables Trade Payables - ( ) - ( ) December 31, 2006 Trade Receivables Trade Payables - ( ) - ( ) 72 Annual Report

75 (CONVENIENCE TRANSLATION OF FINANCIAL STATEMENTS AND FOOTNOTES ORIGINALLY ISSUED IN TURKISH) Ç MSA Ç MENTO SANAY VE T CARET ANON M fi RKET AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS AT DECEMBER 31, 2007 (CURRENCY - NEW TURKISH LIRA, UNLESS OTHERWISE INDICATED) 7. TRADE RECEIVABLES AND PAYABLES (NET) The table below summarizes the maturity profile of the Company's due dated trade receivables at December 31, 2007 and December 31, 2006: December 31, 2007 Overdue Between Overdue More On Demand 1-3 Months than 3 Months Trade Receivables FINANCE LEASE RECEIVABLES AND PAYABLES (Net) The Group does not have any finance lease receivables and payables as of December 31, 2007 and December 31, RECEIVABLES AND PAYABLES FROM RELATED PARTIES (Net) Balances with related parties as of December 31, 2007 and 2006, and total amount of related parties and total amount of transactions with them comprise mainly the following: December 31, 2007 December 31, 2006 Receivables from related parties (net) Associates Exsa (associate of Çimsa) Other Oysa Çimento (1) Oyak Beton Sanayi ve Ticaret A.fi. (Oyak Beton) (*) Adana Çimento (2) Enerjisa Enerji Üretim A.fi. (Enerjisa) (1) Oytafl ç ve D fl Ticaret A.fi. (Oytafl) (*) - - Akçansa Çimento Sanayi ve Ticaret A.fi. (Akçansa) (2) Receivables from personnel Other Discount on receivables to related parties (-) (80.020) (77.242) (1) Entities owned by Sabanc Holding (the ultimate parent of the Company) (2) Shareholder companies (*) Oyak group entities are no longer related party as of December 31, Annual Report 73

76 (CONVENIENCE TRANSLATION OF FINANCIAL STATEMENTS AND FOOTNOTES ORIGINALLY ISSUED IN TURKISH) Ç MSA Ç MENTO SANAY VE T CARET ANON M fi RKET AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS AT DECEMBER 31, 2007 (CURRENCY - NEW TURKISH LIRA, UNLESS OTHERWISE INDICATED) 9. RECEIVABLES AND PAYABLES FROM RELATED PARTIES (Net) (continued) Payables to related parties (net) December 31, 2007 December 31, 2006 Shareholders Adana Çimento (2) Akçansa Çimento Sanayi ve Ticaret A.fi. (Akçansa) (1) Aksigorta A.fi. (Aksigorta) (1) Other Associates Exsa Other Oyka Kâ t Ambalaj Sanayi A.fi. (Oyka Kâ t) (*) Bimsa Uluslararas fl Bilgi ve Yönetim Sistemleri A.fi. (Bimsa) (2) Enerjisa (2) Exsa UK Ltd. (2) Payable to personnel Other Discount on payables to related parties (-) (18.575) (25.502) Bank Balances Akbank T.A.fi. (Akbank) (2) (**) Oyakbank A.fi. (Oyakbank) (*) Bank Borrowings Akbank (2) (***) (1) Shareholder companies (2) Entities owned by Sabanc Holding (the ultimate parent of the Company) (*) Oyak group entities are no longer related party as of December 31, 2007 (**) As of December 31, 2007 TRY of such amount consist of time deposit with interest rates varying between 15,75% and 18,80%. (December 31, 2006-time deposit amounting to TRY and interest rates varying between 18%-20,5% ). (***) Such loans are in USD with an interest rate of 6,23% as of December 31, 2007 (December 31, ,41%-6,76%). 74 Annual Report

77 (CONVENIENCE TRANSLATION OF FINANCIAL STATEMENTS AND FOOTNOTES ORIGINALLY ISSUED IN TURKISH) Ç MSA Ç MENTO SANAY VE T CARET ANON M fi RKET AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS AT DECEMBER 31, 2007 (CURRENCY - NEW TURKISH LIRA, UNLESS OTHERWISE INDICATED) 9. RECEIVABLES AND PAYABLES FROM RELATED PARTIES (Net) (continued) Sales made to related parties January 1 - January 1 - December 31, 2007 December 31, 2006 Associates Exsa (the associates of Çimsa) Other Oysa Çimento (Not 1) Enerjisa (1) Oyak Beton (*) Other Purchases from related parties Shareholders Aksigorta (2) Akçansa (2) Sabanc Holding (the ultimate shareholder of Çimsa) Other - Enerjisa Adana Çimento (2) Beksa Çelik Kord Sanayi ve Ticaret A.fi. (Beksa) (1) Oyka Kâ t (*) Omsan Lojistik A.fi. (*) Bimsa (1) Oytafl (*) Axa Oyak Sigorta A.fi. (*) Ak Emeklilik A.fi. (1) Other Interest income from related parties Akbank (1) Oyakbank (*) Oyak Yat r m Menkul De erler A.fi. (*) Interest paid to related parties Akbank (1) Entities owned by Sabanc Holding (the ultimate parent of the Company) (2) Shareholder companies (*) Oyak group entities are no longer related party as of December 31, 2007 Annual Report 75

78 (CONVENIENCE TRANSLATION OF FINANCIAL STATEMENTS AND FOOTNOTES ORIGINALLY ISSUED IN TURKISH) Ç MSA Ç MENTO SANAY VE T CARET ANON M fi RKET AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS AT DECEMBER 31, 2007 (CURRENCY - NEW TURKISH LIRA, UNLESS OTHERWISE INDICATED) 9. RECEIVABLES AND PAYABLES FROM RELATED PARTIES (Net) (continued) Compensation to Top Management In 2007, compensation paid to top managerial is TRY ( TRY ). Net salaries paid is TRY ( TRY ) and premiums paid to Social Security Institution (SSI) is TRY ( TRY ). No employee termination benefit is paid to top managerial in 2007 ( TRY ). 10. OTHER RECEIVABLES AND LIABILITIES (Net) Other Short-Term Receivables December 31, 2007 December 31, 2006 VAT receivable waiting for approval Receivables from tax administration Job advances Other Other Short-Term Liabilities December 31, 2007 December 31, 2006 VAT payable waiting for approval Due to tax administration Taxes and other duties payable Social security payables Other accruals and liabilities BIOLOGICAL ASSETS (Net) The Group does not have any biological asset as of December 31, 2007 and INVENTORIES (Net) December 31, 2007 December 31, 2006 Raw materials Work-in-process Finished goods Goods in transit Advances given RECEIVABLES AND DEFERRED INCOME FROM CONSTRUCTION CONTRACTS (NET) The Group does not have any receivable and payable from continuing construction contracts as of December 31, 2007 and Annual Report

79 (CONVENIENCE TRANSLATION OF FINANCIAL STATEMENTS AND FOOTNOTES ORIGINALLY ISSUED IN TURKISH) Ç MSA Ç MENTO SANAY VE T CARET ANON M fi RKET AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS AT DECEMBER 31, 2007 (CURRENCY - NEW TURKISH LIRA, UNLESS OTHERWISE INDICATED) 14. DEFERRED TAX ASSETS AND LIABILITIES The details of deferred tax assets and liabilities of the Group as December 31, 2007 and 2006 are as follows: Deferred Tax Assets Deferred Tax Liabilities Net December December December December December December 31, , , , , , 2006 Temporary differences on property, plant and equipment ( ) ( ) ( ) Temporary differences on intangible assets - - ( ) ( ) ( ) ( ) Goodwill - - ( ) ( ) ( ) ( ) Inventories (68.634) (68.634) Provision for employee termination benefits Provision for seniority incentive premium Rediscount of receivable and payables (42.287) (30.502) Provision for unused vacation pay Other temporary differences, net Provision for site restoration The movement table of net deferred tax assets and liabilities are as follows: ( ) ( ) ( ) ( ) December 31, 2007 December 31, 2006 Balance at January Deferred income tax recognized in income statement (Not 41) ( ) ( ) Oysa Çimento merger effect Net balance Deferred tax assets Deferred tax liability As of December 31, 2006 the deferred tax assets of TRY is related with Oysa Çimento. 15. OTHER CURRENT/NON-CURRENT ASSETS Other Current Assets December 31, 2007 December 31, 2006 Prepaid insurance expense Other Other Non-Current Assets December 31, 2007 December 31, 2006 Prepaid expense Other Annual Report 77

80 (CONVENIENCE TRANSLATION OF FINANCIAL STATEMENTS AND FOOTNOTES ORIGINALLY ISSUED IN TURKISH) Ç MSA Ç MENTO SANAY VE T CARET ANON M fi RKET AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS AT DECEMBER 31, 2007 (CURRENCY - NEW TURKISH LIRA, UNLESS OTHERWISE INDICATED) 16. FINANCIAL ASSETS (NET) Associates December 31, 2007 December 31, 2006 Ownership Ownership Interest Net Book Interest Net Book Entity Principal Activities (%) Value (%) Value Exsa Intermediary for import and export 32, , Long-Term Available for Sale Assets December 31, 2007 December 31, 2006 Entity Ownership Ownership Percent Percent % Amount % Amount Enerjisa - - 6, Mesbafl Mersin Serbest Böl. fll. A.fi. (Mesbafl) 0, , Bat Akdeniz Liman fll. A.fi. (Bat Akdeniz) 8, , Anfafl Antalya Fuar. A.fi. (Anfafl) 0, , Temsa Araflt rma, Gelifltirme ve Teknoloji A.fi. 0, Provision for impairment (Enerjisa) - ( ) Total financial assets Associates The assets, liabilities and net profit of Exsa, which is consolidated via equity pick up method as of December 31, 2007 and 2006 are as follows (the amounts are multiplied by the participation rate of 32,875%): December 31, 2007 December 31, 2006 Assets Liabilities ( ) ( ) Net profit (Note 38) Jointly Controlled Entities As stated in Note 1, Çimsa and Oysa Çimento were merged via acquisition as of October 31, As of April 30, 2007 and December 31, 2006, current assets, fixed assets, short-term liabilities, long-term liabilities, revenues and expenses of Oysa Çimento, which is consolidated via proportionate consolidation method, are as follows (the amounts are multiplied by the participation rate of 41,09%): December 31, 2007 December 31, 2006 Current assets Non-current assets Short-term liabilities Long-term liabilities Revenues (*) Expenses ( ) ( ) (*) Includes net profit from discontinued operations. 78 Annual Report

81 (CONVENIENCE TRANSLATION OF FINANCIAL STATEMENTS AND FOOTNOTES ORIGINALLY ISSUED IN TURKISH) Ç MSA Ç MENTO SANAY VE T CARET ANON M fi RKET AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS AT DECEMBER 31, 2007 (CURRENCY - NEW TURKISH LIRA, UNLESS OTHERWISE INDICATED) 16. FINANCIAL ASSETS (NET) (continued) As of December 31, 2007 and 2006, the current assets, fixed assets, short-term liabilities, long-term liabilities, revenues and expenses CSN, which is consolidated via proportionate consolidation method, are as follows (the amounts are multiplied by the participation rate of 50%): December 31, 2007 December 31, 2006 Current assets Non-current assets Short-term liabilities Long-term liabilities - - Revenues Expenses ( ) ( ) Long-Term Available for Sale Assets On May 31, 2007, unit shares with nominal value of TRY at TRY 2,09 par value each shares, which was determined via bargaining method, of Enerjisa, one of the available for sale financial assets of the Company was sold to Verbund (Österreichische Elektrizitatswirtschafts- Aktiengesscllschaft) at total amount of EUR equivalent TRY and profit amounting TRY (Note 38) to was gained from this sale. After the sale, the Company has no longer voting rights and participation in Enerjisa. The investments in Mesbafl, Bat Akdeniz and Anfafl are carried at cost (adjusted for inflation until the end of 2004) since their fair value could not be reliably measured. 17. POSITIVE/NEGATIVE GOODWILL (NET) As of December 31, 2007 and December 31, 2006 goodwill arising from the purchase of Standart Çimento in 2005 is amounting to TRY The remaining amount of TRY (December 31, 2006-TRY ) is related with Çimsa Cement. As a result, the movement of the goodwill related to the purchase of Standart Çimento is as follows: Goodwill December 31, 2007 As of January 1, Currency translation difference (44.067) As of December As of December 31, 2007, the Company performed impairment test of the goodwill based on value in use study and concluded that no impairment is required for such goodwill. Value in use study is based on the discounted cash flow which was computed until the end of 2015 and weighted average cost of capital before tax was computed as 11,2%. 18. INVESTMENT PROPERTY (Net) There is no investment property of the Company as of December 31, 2007 and Annual Report 79

82 (CONVENIENCE TRANSLATION OF FINANCIAL STATEMENTS AND FOOTNOTES ORIGINALLY ISSUED IN TURKISH) Ç MSA Ç MENTO SANAY VE T CARET ANON M fi RKET AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS AT DECEMBER 31, 2007 (CURRENCY - NEW TURKISH LIRA, UNLESS OTHERWISE INDICATED) 19. TANGIBLE ASSETS (Net) The table below summarizes the net movement of tangible assets as of December 31, 2007: Other Land Machinery and Furniture and Tangible Leasehold Construction in Advances Lands Improvements Buildings Equipment Vehicles Fixture Assets Improvements Progress Given Total December 31, 2007, net Additions through legal merge with Oysa Çimento, net Currency translation difference - (12.068) (50.353) ( ) (152) (11.839) - ( ) - ( ) Additions Sales/disposals, net ( ) ( ) ( ) ( ) (60.912) ( ) ( ) ( ) Transfers ( ) - - Depreciation charge for the year - ( ) ( ) ( ) ( ) ( ) (18.053) ( ) - - ( ) December 31, 2007, net December 31, 2007 Cost Accumulated depreciation - ( ) ( ) ( ) ( ) ( ) (20.348) ( ) - - ( ) Net book value Other Land Machinery and Furniture and Tangible Leasehold Construction in Advances Lands Improvements Buildings Equipment Vehicles Fixture Assets Improvements Progress Given Total December 31, 2005 net Additions through purchased subsidiary and plant Currency translation difference Purchases Sales/disposals, net ( ) - ( ) (54.718) ( ) (16.324) ( ) Transfers ( ) ( ) - Depreciation charge for the year - ( ) ( ) ( ) ( ) ( ) (23.408) (40.420) - - ( ) December 31, 2006, net December 31, 2006 Cost Accumulated depreciation - ( ) ( ) ( ) ( ) ( ) (38.074) ( ) - - ( ) Net book value Pledge and mortgages on assets There is no pledge or mortgage on assets of the Company as of December 31, 2007 and December 31, 2006.

83 (CONVENIENCE TRANSLATION OF FINANCIAL STATEMENTS AND FOOTNOTES ORIGINALLY ISSUED IN TURKISH) Ç MSA Ç MENTO SANAY VE T CARET ANON M fi RKET AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS AT DECEMBER 31, 2007 (CURRENCY - NEW TURKISH LIRA, UNLESS OTHERWISE INDICATED) 20. INTANGIBLE ASSETS (Net) Other Mining Intangible Rights Assets Total December 31, 2006, net Additions - - Amortization charge for the year ( ) ( ) ( ) Additions through legal merge with Oysa Çimento Disposals At December 31, At December 31, 2007 Cost (*) Accumulated amortization ( ) (25.117) ( ) Net book value At December 31, 2005, net Additions (*) Amortization charge for the year ( ) (68.371) ( ) At December 31, 2006, net At December 31, 2006 Cost (*) Accumulated amortization ( ) ( ) ( ) Net book value (*) Rights recognized during the purchase of Standart Çimento. 21. ADVANCES TAKEN Short-Term Advance Taken December 31, 2007 December 31, 2006 Advances taken PENSION PLANS, (Net) The Company does not have any pension plan as of December 31, 2007 and Annual Report 81

84 (CONVENIENCE TRANSLATION OF FINANCIAL STATEMENTS AND FOOTNOTES ORIGINALLY ISSUED IN TURKISH) Ç MSA Ç MENTO SANAY VE T CARET ANON M fi RKET AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS AT DECEMBER 31, 2007 (CURRENCY - NEW TURKISH LIRA, UNLESS OTHERWISE INDICATED) 23. PROVISIONS Short-Term Provisions December 31, 2007 December 31, 2006 Provision for corporate tax (Note 41) Provision for the penalty of Competition Board (Note 31-b) Provision for lawsuit (Note 31-b) Other Long-Term Provisions December 31, 2007 December 31, 2006 Provision for employee termination benefits Provision for seniority incenty premium Provision for unused vacation pay Provision for rehabilitation of mining areas (Note 31) Provision for Employee Termination Benefits In accordance with existing labor legislation in Turkey, the Group is required to make lump-sum payments to employees whose employment is terminated due to retirement or for reasons other than resignation or misconduct. Such payments are calculated on the basis of 30 days' pay (limited to a maximum of TRY at December 31, 2007 and TRY at December 31, 2006, respectively) per year of employment at the rate of pay applicable at the date of retirement or termination. As of December 31, 2007 this liability is reflected in the consolidated financial statements, in the frame of actuarial methods and assumptions, by using the Projected Unit Credit Method and based upon the calculations of professional actuary. All actuary gains and losses are reflected to income statements. The principal actuarial assumptions used at the balance sheet dates are as follows: December 31, 2007 December 31, 2006 Discount rate 11% 11% Estimated salary increase rate 5% 5% Personel turnover rate 9,85% 9,54% Movement of the provision for the employee termination benefits as of December 31, 2007 and 2006 is as follows: Provision for Employee Termination Benefits December 31, 2007 December 31, 2006 At January Effect of Oysa Çimento merger, net Paid ( ) ( ) Effect of discontinued operations ( ) - Interest expense Actuarial (gain)/loss ( ) Charge for the year, net December As of January 1, 2008 maximum amount for the retirement pay has been increased at an amount to TRY There is no unrecognized actuarial gains/losses. 82 Annual Report

85 (CONVENIENCE TRANSLATION OF FINANCIAL STATEMENTS AND FOOTNOTES ORIGINALLY ISSUED IN TURKISH) Ç MSA Ç MENTO SANAY VE T CARET ANON M fi RKET AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS AT DECEMBER 31, 2007 (CURRENCY - NEW TURKISH LIRA, UNLESS OTHERWISE INDICATED) 24. MINORITY INTEREST As of December 31, 2007 and 2006, the Company has no minority interest. 25. SHARE CAPITAL December 31, 2007 December 31, 2006 Number of ordinary shares (authorized, issued and outstanding) 1 YKr (2006-0,001 TRY) par value As aforementioned in Note 1, the Company' s paid in share capital has been increased from TRY to TRY (historical cost) as a result of the legal merger with Oysa Çimento as of October 31, As of December 31, 2007 and 2006, the composition of shareholders and their respective percentage of ownership can be summarized as follows: December 31, 2007 December 31, 2006 Amount % Amount % Hac Ömer Sabanc Holding A.fi , ,54 Adana Çimento San. ve Tic. A.fi , ,72 Akçansa Çimento San. ve Tic. A.fi , ,00 Aksigorta A.fi , ,57 Hac Ömer Sabanc Vakf , ,12 Other and publicly traded shares , ,05 Nominal share capital total , ,00 Restatement effect Total per financial statements CAPITAL RESERVES As of December 31, 2007, Financial Assets Value Increase Fund amounting to TRY (December 31, TRY ), which is included in share capital reserves, consists of the fair value differences of the available-for-sale assets of Exsa, which is consolidated with the equity method PROFIT RESERVES - RETAINED EARNINGS Legal Reserves The legal reserves consist of first and second legal reserves in accordance with the Turkish Commercial Code. The first legal reserve is appropriated out of the statutory profits at the rate of 5%, until the total reserve reaches a maximum of 20% of the Company's share capital. The second legal reserve is appropriated at the rate of 10% of all distributions in excess of 5% of the Company's share capital. The legal reserves are not available for distribution unless they exceed 50% of paid-in share capital, however, can be used to offset losses in the condition that extraordinary reserves are exhausted. Listed companies are subject to dividend distribution requirements regulated by the CMB. Based on the CMB Decree 7/242, dated February 25, 2005, if the amount of profit distributions calculated in accordance with the net distributable profit requirements of the CMB does not exceed the statutory net distributable profit the whole amount of distributable profit should be distributed. If it exceeds the statutory net distributable profit, the whole amount of the statutory net distributable profit should be distributed. If loss exists in the financial statements prepared in accordance with CMB regulations and statutory financial statements in any period, then the profit is not going to be distributed. Annual Report 83

86 (CONVENIENCE TRANSLATION OF FINANCIAL STATEMENTS AND FOOTNOTES ORIGINALLY ISSUED IN TURKISH) Ç MSA Ç MENTO SANAY VE T CARET ANON M fi RKET AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS AT DECEMBER 31, 2007 (CURRENCY - NEW TURKISH LIRA, UNLESS OTHERWISE INDICATED) PROFIT RESERVES - RETAINED EARNINGS (continued) In accordance with the Communique No:XI/25 Section 15 paragraph 399, the accumulated deficit amounts arising from the first application of inflation adjustment, in line with CMB's profit distributions are considered to be deductible when computing the distributable profit. The accumulated deficit will first be netted-off from net income and retained earnings and the remaining amount of deficit from extraordinary reserves, legal reserves and equity inflation reserves. The lower of the amount in the financial statements prepared in accordance with CMB accounting principles and Turkish Commercial Code is going to be considered in capital increases made from internal sources. Based on the CMB Decree 2/53, dated January 18, 2007, the quoted companies are required to distribute a minimum of 20% of their distributable 2006 profits over financial statements prepared in accordance with CMB Accounting Standards in accordance with Communique No: XI/25. This distribution may be made by either as cash or free shares or as a combination of both over the minimum limit of 20% depending on the decisions of the General Assemblies of the companies. In the calculation of net distributable profit, the profit of the subsidiaries, the participations under common control and the participations which exist in the consolidated financial statements are not considered if the general assemblies of such companies did not decide to distribute profits. Inflation adjustment to shareholders' equity can only be netted-off against prior years' losses and used as an internal source in capital increase where extraordinary reserves can be netted-off against prior years' loss and used in the distribution of bonus shares and dividends to shareholders. However, inflation adjustment differences will be subject to corporate tax when they are included in the cash profit distribution. After the legal merge with Oysa Çimento on October 31, 2007, the Company's share capital, share premium, legal reserves and extraordinary reserves as of December 31, 2007 can be summarized as follows: December 31, 2007 Historica Inflation Inflation Adjustment (Statutory) Adjusted Differences on Amount Amount Equity Accounts Share capita Share premium Legal reserves Extraordinary reserves As of December 31, 2006 the Company's share capital, share premium, legal reserves and extraordinary reserves can be summarized as follows: December 31, 2006 Historical Inflation Inflation Adjustment (Statutory) Adjusted Differences on Amount Amount Equity Accounts Share capital Share premium Legal reserves Extraordinary reserves Annual Report

87 (CONVENIENCE TRANSLATION OF FINANCIAL STATEMENTS AND FOOTNOTES ORIGINALLY ISSUED IN TURKISH) Ç MSA Ç MENTO SANAY VE T CARET ANON M fi RKET AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS AT DECEMBER 31, 2007 (CURRENCY - NEW TURKISH LIRA, UNLESS OTHERWISE INDICATED) PROFIT RESERVES - RETAINED EARNINGS (continued) Statement of Changes in Equity Inflation Financial Adjustment Currency Paid-in Share Assets Value Difference on Legal Extraordinary Translation Net Profit Prior Year Total Share Capital Premium Increase Fund Equity Reserves Reserves Differences for the Year Profits Equity Balance at January 1, ( ) Transfers ( ) Dividends paid ( ) - ( ) The effect of purchased subsidiaries ( ) ( ) Unrealized net gain on investments available-for-sale - - ( ) ( ) Currency translation differences Current year profit Balance at December 31, ( ) Transfers ( ) Dividends paid ( ) - ( ) Unrealized net gain on investments available-for-sale (Note 26) - ( ) ( ) Effect of Oysa Çimento merger (Not e1) Currency translation differences Current year profit Balance at December 31, ( ) Annual Report 85

88 (CONVENIENCE TRANSLATION OF FINANCIAL STATEMENTS AND FOOTNOTES ORIGINALLY ISSUED IN TURKISH) Ç MSA Ç MENTO SANAY VE T CARET ANON M fi RKET AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS AT DECEMBER 31, 2007 (CURRENCY - NEW TURKISH LIRA, UNLESS OTHERWISE INDICATED) 29. FOREIGN CURRENCY POSITION Original Currency Total December 31, 2007 USD EURO GBP (TRY) Assets Cash and Cash Equivalents Trade Receivables (net) Inventory (Advances Given) Liabilities Trade Payables (net) ( ) ( ) - ( ) Financial Liabilities ( ) ( ) - ( ) Net Balance Sheet Position ( ) ( ) Original Currency Total December 31, 2006 USD EURO CHF TRY Assets Cash and Cash Equivalents Trade Receivables (net) Liabilities Trade Payables (net) ( ) ( ) - ( ) Financial Liabilities ( ) (59.121) - ( ) ˆ Net Balance Sheet Position ( ) ( ) The foreign currency position sensitivity analysis due to the foreign currency (short) position of the Group and profit/loss before tax of related foreign currency as of December 31, 2007 is given as follows: Income/(Expense Effect) Change in Rates USD EURO GBP Total 5% ( ) ( ) (5%) ( ) (51.925) GOVERNMENT INCENTIVES Incentive Receipt Date Completion Investment Certificate of Incentive Start Date of Date of Amount in Investment Type Number Certificate Investment Investment TRY December 31, 2007 Bottleneck Overcome Production of Cement, Ready Made Mixture and Concrete Cement, Ready Made Mixture and Concrete Modernization-Eskiflehir Normal Region Cement, Ready Made Mixture and Concrete December 31, 2006 Clinker Production Unit (Kayseri) Bottleneck Overcome Production of Cement, Ready Made Mixture and Concrete Cement, Ready Made Mixture and Concrete Modernization-Eskiflehir Normal Region Cement, Ready Made Mixture and Concrete Annual Report

89 (CONVENIENCE TRANSLATION OF FINANCIAL STATEMENTS AND FOOTNOTES ORIGINALLY ISSUED IN TURKISH) Ç MSA Ç MENTO SANAY VE T CARET ANON M fi RKET AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS AT DECEMBER 31, 2007 (CURRENCY - NEW TURKISH LIRA, UNLESS OTHERWISE INDICATED) 31. CONTINGENT ASSETS AND LIABILITIES a) As of December 31, 2007 and 2006, guarantees/mortgages received and given are as follows: December 31, 2007 December 31, 2006 Currency Original TRY Original TRY Type Amount Equivalent Amount Equivalent Letter of guarantees received EUR Letter of guarantees received USD Letter of guarantees received TRY Mortgages received TRY Cheques and notes received EUR Cheques and notes received USD Cheques and notes received TRY Pledges TRY Total guarantees received Letter of guarantees given TRY Letter of guarantees given USD Total guarantees given The total of letter of guarantees, mortgages, cheques-notes received from customers and pledge transactions as of December 31, 2007 are as follows; TRY , TRY , TRY and TRY , respectively (as of December 31, 2006; TRY , TRY , TRY and TRY , respectively). b) Litigations As a result of the tax inspection of the Company covering the years , a tax/penalty notification amounting to TRY , consisting of additional tax and tax penalty at the amounts of TRY and TRY , respectively, has been declared by the Tax Office to the Company on July 11, 2006, based on the report of the income controller. In the report of the income controller, the recording of foreign currency differences and interest payments of the loans taken from Akbank in 1999 as expense, and not calculating interest for the receivables from Exsa have been criticized. Since the Company management thinks that these tax and penalties are unfair and refused to conciliate with the Tax Authority and instead took the case to Mersin Tax Court, as the Company management believes that the court will result in favor of the Company. No provision for these tax and penalties has been recorded in the consolidated financial statements. There has not been any court decision taken as of the preparation date of the consolidated financial statements - As of December 31, 2006 in the consolidated financial statements, a provision amounting to TRY has been booked for the penalty charged by the Competition Board and the court cases opened against such penalty at the Council of State is still continuing. - As of December 31, 2007, the total amount of outstanding lawsuits filed against the Company is TRY (December 31, TRY ). Based on the opinion of the legal advisors the Company has booked a provision amounting to TRY (December 31, TRY ) for the cases which is probable that will result against the Company. (Note 23) c) Possible Contingencies Relating to Environment Law and Land Protection and Utilization Law According to the Environment Law, no: 2872, dated , (the law has been changed with the law no: 5491, dated ) and to the Land Protection and Utilization Law, no: 5403, dated March 7, 2005, the operations of the Company such as mining, cement production are subject to legislation in Turkey. In accordance with the communiqué of Environment and Forestry Ministry named as The Rehabilitation of Territories Damaged from Mining Activities published in the Official Gazette dated December 14, 2007 numbered 26730, and the official correspondence of the General Directorate of Forestry dated January 4, 2008 which have been sent to Regional Forestry Offices, the Company has estimated a liability at the amount of TRY (Note 23) for the areas that have been excavated and operating licenses are still continuing but outside the production destination. In the aforementioned communiqué, companies have one year period of application and negotiations with the relevant authorities are still continuing. The Company has estimated to use dozers and to make leveling and piercing in the areas that will be rehabilitated. The liability was calculated assuming TRY cost/per square meters and was booked the related provision as provision for rehabilitation of mining areas under the accounts long term provisions and other operating income and expenses. Annual Report 87

90 (CONVENIENCE TRANSLATION OF FINANCIAL STATEMENTS AND FOOTNOTES ORIGINALLY ISSUED IN TURKISH) Ç MSA Ç MENTO SANAY VE T CARET ANON M fi RKET AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS AT DECEMBER 31, 2007 (CURRENCY - NEW TURKISH LIRA, UNLESS OTHERWISE INDICATED) 32. BUSINESS COMBINATIONS As aforementioned in Note 1, Oysa Çimento's legal merger with Çimsa via dissolution with non-liquidation method via total succession of all assets and liabilities in accordance with Turkish Commercial Code Article 451 and Corporate Tax Code Articles was registered on October 31, Same as the previous periods, financial statements of Oysa Çimento was consolidated via proportional consolidation method until April 30, 2007, after that date financial statements of Oysa Çimento was fully consolidated to Çimsa since Çimsa and Oysa Çimento are the entities under common control of Sabanc Holding. Purchase accounting in accordance with IFRS 3 Business Combinations was not applied to the financial statements of Oysa Çimento at the time of legal merger as of October 31, 2007 and differences arising from the merger were included in the related equity accounts of the consolidated financial statements of Çimsa as of December 31, 2007 via pooling of interests method (Notes 27-28). 33. SEGMENT REPORTING The Company does not have any operation that requires segment information as of December 31, 2007 and SUBSEQUENT EVENTS a) Due to the expiration of the collective labor agreement applied in the Company's job site as of December 31, 2007, negotiations for the new Group Collective Labor Agreement has begun between Cement Industry Syndicate and Labor Syndicate Turkish Çimse-Labor Union. However, dispute on the Article 29 has not been solved and unilateral dispute minute was prepared and it was decided to apply to the Ministry of Labor and Social Security with the request of assignation of a legal arbitrator. b) As it was announced to the public on January 2, 2008, the Company's modernization and building of a new production line in Eskiflehir Cement Facility which are in the context of Investment Incentive numbered and dated June 14, 2006, have been finished with total cost approximately amounting to TRY , which was totally financed through internal resources. Furthermore second revolving kiln has been fired. The Company is aiming to increase its production capacity covering all production units via modernization of second grey cement production line with the production capacity of tones/day clinker, 85 tones/hour cement and via modernization of the first klin with the production capacity from tones/year to tones/year. c) The Board of Directors of the Company decided to incorporate Çimsa-Rus Çimento Ticaret Limited fiirketi with the share capital amount of EUR at Krasnador State of Russian Federation with the decision taken on February 4, d) With the decision taken on February 4, 2008, the Board of Directors of the Company entitled the General Management to make the necessary transactions to purchase the total land of m 2 in Mersin and total land of m 2 in Kayseri with the aim of meeting the needs of production facilities. 88 Annual Report

91 (CONVENIENCE TRANSLATION OF FINANCIAL STATEMENTS AND FOOTNOTES ORIGINALLY ISSUED IN TURKISH) Ç MSA Ç MENTO SANAY VE T CARET ANON M fi RKET AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS AT DECEMBER 31, 2007 (CURRENCY - NEW TURKISH LIRA, UNLESS OTHERWISE INDICATED) 35. DISCONTINUING OPERATIONS As explained in Note 1, the Group reclassified the items related with economic unit of skenderun operations in a single line as net profit from discounted activities in the consolidated income statement for the year ended December 31, 2007, with the sale of skenderun operations that belongs to Oysa Cement to Adana Cement at April 30, Income from Discounted Operations Sales, net Cost of sales (-) ( ) ( ) Operating Income from Discounted Operations Selling, Marketing and Distribution Expenses (-) ( ) ( ) General Administrative Expenses (-) ( ) ( ) Operating Expenses (-) ( ) ( ) Net Operating Income from Discounted Operations Taxes ( ) ( ) Net Income from Discounted Operations Profit from the sales of discounted operations Tax related with the sale of discounted operations ( ) - Net profit from the sales of discounted operations Annual Report 89

92 (CONVENIENCE TRANSLATION OF FINANCIAL STATEMENTS AND FOOTNOTES ORIGINALLY ISSUED IN TURKISH) Ç MSA Ç MENTO SANAY VE T CARET ANON M fi RKET AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS AT DECEMBER 31, 2007 (CURRENCY - NEW TURKISH LIRA, UNLESS OTHERWISE INDICATED) 36. OPERATING INCOME (including discounted operations) Sales (Net) Domestic sales Foreign sales Other income Other deductions (-) ( ) ( ) Sale discounts (-) ( ) ( ) Discounted operations Continued operations Cost of Sales Cost of goods sold ( ) ( ) Cost of merchandises sold ( ) ( ) Total production cost ( ) ( ) Direct material and supplies expenses ( ) ( ) Direct labor expenses ( ) ( ) Depreciation and amortization expenses ( ) ( ) Other production expenses ( ) ( ) Total production cost ( ) ( ) Work-in-process (WIP) movement Beginning WIP ( ) ( ) Ending WIP Finished goods movement Beginning finished goods ( ) ( ) Ending finished goods Cost of merchandises sold ( ) ( ) Total ( ) ( ) Cost of sales of the discounted operations ( ) ( ) Cost of sales of the continued operations ( ) ( ) ( ) ( ) 90 Annual Report

93 (CONVENIENCE TRANSLATION OF FINANCIAL STATEMENTS AND FOOTNOTES ORIGINALLY ISSUED IN TURKISH) Ç MSA Ç MENTO SANAY VE T CARET ANON M fi RKET AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS AT DECEMBER 31, 2007 (CURRENCY - NEW TURKISH LIRA, UNLESS OTHERWISE INDICATED) 37. OPERATING EXPENSES (including discounted operations) General and administrative expenses ( ) ( ) Sales and marketing expenses ( ) ( ) ( ) ( ) General and Administrative Expenses Personnel expenses ( ) ( ) Employee termination expenses ( ) ( ) Services obtained from outside ( ) ( ) Tax, duty and charge expenses. ( ) ( ) Depreciation expenses ( ) ( ) Rent expenses ( ) ( ) Insurance expenses (21.435) (89.187) Travel expenses ( ) ( ) Consulting expenses ( ) ( ) Communication and advertisement expenses ( ) ( ) Maintenance expenses ( ) ( ) Other several expenses ( ) ( ) ( ) ( ) General administrative expenses from continued operations ( ) ( ) General administrative expenses from discounted operations ( ) ( ) ( ) ( ) Sales and Marketing Expenses Personnel expenses ( ) ( ) Services obtained from outside ( ) ( ) Tax, duty and charge expenses. (71.890) (8.388) Depreciation expenses ( ) ( ) Paper bag expenses ( ) ( ) Big-bag expenses (16.619) (78.328) Rent expenses ( ) (99.753) Insurance expenses (34.412) (21.231) Travel expenses (87.863) (70.606) Consulting expenses (72.549) ( ) Miscellaneous expenses ( ) ( ) ( ) ( ) Selling and marketing expenses from continued operations ( ) ( ) Selling and marketing expenses from discounted operations ( ) ( ) ( ) ( ) Annual Report 91

94 (CONVENIENCE TRANSLATION OF FINANCIAL STATEMENTS AND FOOTNOTES ORIGINALLY ISSUED IN TURKISH) Ç MSA Ç MENTO SANAY VE T CARET ANON M fi RKET AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS AT DECEMBER 31, 2007 (CURRENCY - NEW TURKISH LIRA, UNLESS OTHERWISE INDICATED) 38. OTHER OPERATING INCOME AND EXPENSES Other Operating Income Income from Exsa that is consolidated with equity pick up method Profit on sales of discounted operations (Note 35) Interest income Gain on term difference Foreign exchange gains Gain on sale of marketable securities Previous year income and profit Income from sale of a financial asset Provisions no longer required Other Other Operating Expenses (-) Foreign exchange losses ( ) ( ) Idle capacity expenses ( ) ( ) Provision for rehabilitation of mining areas (Note 23) ( ) - Other provision expenses ( ) - Loss on sale of property, plant and equipment, net ( ) ( ) Donations ( ) ( ) Allowance for impairment of financial assets (Note 16) - ( ) Provision for the penalty of Competition Board - ( ) Other ( ) ( ) ( ) ( ) Depreciation and Amortization Expenses (including discounted expenses) Tangible Fixed Assets Cost of production Other operating expenses General and administrative expenses Sales and distribution expenses Total depreciation expenses (Note 19) Intangible Fixed Assets Cost of production Other operating expenses General and administrative expenses Sales and distribution expenses Total amortization expenses (Note 20) Personnel expenses Wages, salaries, and SSI premium of employer Provision/(reversal) for employee termination benefits Annual Report

95 (CONVENIENCE TRANSLATION OF FINANCIAL STATEMENTS AND FOOTNOTES ORIGINALLY ISSUED IN TURKISH) Ç MSA Ç MENTO SANAY VE T CARET ANON M fi RKET AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS AT DECEMBER 31, 2007 (CURRENCY - NEW TURKISH LIRA, UNLESS OTHERWISE INDICATED) 39. FINANCIAL EXPENSES (Net) Short-term financial income/(expense), net ( ) Long-term financial income/(expenses), net ( ) Total financial income/(expenses), net ( ) Interest expense of retirement pay liability (Not 23) ( ) - Exchange losses ( ) Interest expenses ( ) ( ) Other financial expenses, net ( ) Total financial income/(expenses), net ( ) 40. MONETARY GAIN/LOSS Based on a decision of CMB dated March 17, 2005, numbered 11/367, it is declared that the restatement application of the financial statements as of 2005 has been terminated due to the objective conditions for restatement in hyperinflationary economies is no longer available. Therefore, the consolidated financial statements as of December 31, 2007 and 2006 are not restated for inflation accounting and no monetary gain or loss was recognized in the consolidated financial statements and there is no monetary gain/loss in the consolidated income statement. 41. INCOME TAXES General Information The Group is subject to taxation in accordance with the tax procedures and the legislation effective in the countries where the Group is operating. In Turkey, the corporation tax rate is 20% (December 31, %) Corporate tax returns are required to be filed until the fifteenth of the fourth month following the balance sheet date and paid in one installment until the end of the fourth month. The tax legislation provides for a temporary tax of 20% ( %) to be calculated and paid based on earnings generated for each quarter. The amounts thus calculated and paid are offset against the final corporate tax liability for the year. With the new law enacted, effective from January 1, 2006, Turkish government ceased to offer investment incentives for capital investments, companies having unused qualifying capital investment amounts from periods prior to December 31, 2005 will be able to deduct such amounts from corporate income until the end of December 31, 2008; however, the corporate tax rate will be 30% for them, furthermore, qualifying capital investments to be made until the end of December 31, 2008 within the scope of the investment projects started before December 31, 2005 will be subject to investment incentive until the end of December 31, The Company elected not to utilize from the investment incentives. In Turkey, the tax legislation does not permit a parent company and its subsidiaries to file a consolidated tax return. Therefore, provision for taxes, as reflected in the consolidated financial statements, has been calculated on a separate-entity basis. Corporate tax losses can be carried forward for a maximum period of five years following the year in which the losses were incurred. The tax authorities can inspect tax returns and the related accounting records for a retrospective maximum period of five years. There is no carried financial loss of the Group as of December 31, The dividend payments made other than to the companies resident in Turkey that are not responsible from the corporate and income tax and the dispensed ones and to resident and nonresident individuals and nonresident legal entities in Turkey are due to 15% ( %) income tax. The dividend payments made from the resident companies in Turkey to again resident companies in Turkey are not due to tax, and in case of not calculating the profit or not adding to capital, the income tax is not calculated. Annual Report 93

96 (CONVENIENCE TRANSLATION OF FINANCIAL STATEMENTS AND FOOTNOTES ORIGINALLY ISSUED IN TURKISH) Ç MSA Ç MENTO SANAY VE T CARET ANON M fi RKET AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS AT DECEMBER 31, 2007 (CURRENCY - NEW TURKISH LIRA, UNLESS OTHERWISE INDICATED) 41. INCOME TAXES (continued) As of December 31, 2007 and 2006, income taxes payables are summarized as follows: December 31, 2007 December 31, 2006 Current income tax Prepaid taxes in current period ( ) ( ) Income taxes payable (Note 23) Major components of income tax expense as of December 31, are as follows (tax expenses of discounted operations included): Consolidated income statement Current income tax ( ) ( ) Deferred income tax (Note 14) Income tax expense reported in the consolidated income statement ( ) ( ) Tax expenses from continued operations ( ) ( ) Tax expenses from discounted expenses (Note 35) ( ) ( ) ( ) ( ) A reconciliation of income tax expense applicable to profit before income tax at the statutory income tax rate to income tax expense reported in the consolidated income statements for the year ended December 31, 2007 and 2006 are as follows: Profit before tax from continued operations Profit before tax from discounted operations Profit before income tax At the effective statutory income tax rate of 20% ( %) ( ) ( ) Effect of change in tax rate Effect of income exempt from tax Net effect of other/expense not subject to tax ( ) EARNINGS PER SHARE ( ) ( ) Earnings per share (EPS) is calculated by dividing the net profit for the year attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the year. Dilution means decrease of earning/profit per share or increase of loss per share with increase in amount of shares. After merger with Oysa Çimento at October 31, 2007, the unit of shares with nominal value of TRY 0,001 has been decreased to unit with nominal value of Ykr 1 and for the year ended December 31, 2007, the weighted average share amount has been with nominal value of YKr Annual Report

97 (CONVENIENCE TRANSLATION OF FINANCIAL STATEMENTS AND FOOTNOTES ORIGINALLY ISSUED IN TURKISH) Ç MSA Ç MENTO SANAY VE T CARET ANON M fi RKET AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS AT DECEMBER 31, 2007 (CURRENCY - NEW TURKISH LIRA, UNLESS OTHERWISE INDICATED) 42. EARNINGS PER SHARE (continued) Earnings per share: Net income from continued operations Net income from discounted operations Average number of shares at nominal value of TRY 0, (*) Earnings per share from continued operations (YKr) 0,0233 0,0105 Earnings per share from discounted operations (YKr) 0,0001 0,0007 (*) Stated as YKr in order to be consistent with current year's presentation. Distributed earnings per share: For the year ended December 31, 2007 and 2006 distributed earnings per share is as follows: Dividend distributed Average number of shares Net dividend distributed per share (YKr) 0,0085 0,0037 There have been no other transactions involving ordinary or potential ordinary shares as of the date of the preparation of these financial statements. Annual Report 95

98 (CONVENIENCE TRANSLATION OF FINANCIAL STATEMENTS AND FOOTNOTES ORIGINALLY ISSUED IN TURKISH) Ç MSA Ç MENTO SANAY VE T CARET ANON M fi RKET AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS AT DECEMBER 31, 2007 (CURRENCY - NEW TURKISH LIRA, UNLESS OTHERWISE INDICATED) 43. CASH FLOW STATEMENT Notes Cash flows from operating activities Profit before tax from continued operations Profit before tax from discounted operations Adjustments to reconcile net income to net cash from operating activities: Depreciation and amortization Loss/(gain) on sale of property, plant and equipment from continued operations ( ) (Profit) from the sales of discounted operations 35 ( ) - Provision for employee termination benefits Provision for seniority incentive premium Unused vacation pay liability Interest expense 39 ( ) Income from associates 38 ( ) ( ) Provision for the impairment of affiliates Provision for the penalty of Competition Board Other provisions Provision expense of site restoration Gain on sale of a financial asset (Enerjisa) ( ) - Foreign exchange losses on loans ( ) Operating profit before changes in working capital Changes in operating assets and liabilities Trade receivables and receivables from related parties ( ) ( ) Inventories ( ) ( ) Other assets and liabilities ( ) Trade payables and payables to related parties Employee termination benefits paid 23 ( ) ( ) Penalty of Competition Board paid and other provisions ( ) - Income taxes paid ( ) ( ) Net cash provided by operating activities Cash flows from investing activities Purchase of property, plant and equipment 19 ( ) ( ) Purchase of intangible assets 20 - (21.860) Proceeds from sale of property, plant and equipment Dividend income from associates Purchase of a company and factory - ( ) Sales revenue of the tangible fixed assets from the discounted operations Cash inflow due to the legal merger with Oysa Çimento Proceeds from sale of a financial asset Net cash provided by/(used in) investing activities ( ) Cash flows from financing activities Dividend payments ( ) ( ) Proceeds from borrowings Repayment of borrowings ( ) ( ) Interest paid ( ) ( ) Net cash (used in) financing activities ( ) ( ) Net increase in cash and cash equivalents Cash and cash equivalents at the beginning of the period Cash and cash equivalents at the end of the period OTHER MATTERS WHICH ARE SIGNIFICANT TO THE FINANCIAL STATEMENTS OR WHICH SHOULD BE DISCLOSED FOR THE PURPOSE OF TRUE AND FAIR PRESENTATION AND INTERPRETATION OF THE FINANCIAL STATEMENTS None. 96 Annual Report

99 Ç MSA Ç MENTO SANAY VE T CARET ANON M fi RKET AND ITS SUBSIDIARIES 2007 ADMINISTRATIVE OPERATIONS AS AT DECEMBER 31, 2007 Hac Ömer Sabanc Holding A.fi. Cement Group Chairmanship Erhan KAMIfiLI 1. Senior Management: Mehmet HACIKAM LO LU Hüseyin ÖZKAN Tamer DEN ZC Basri D NÇER fiahap SARIER Mutlu DO RUÖZ Mehmet fiah N Fikret ULUAKAY Do an ÖZKUL Naci RÜZGAR 2. Executives: fiükrü Deniz fiah N Mustafa fianli Erbil KOÇAK Halim S rr GÖKTÜRK Sebalinestin TOPAK Orhan ÇAKIRKAYA Memduh GÜLLÜ Ayd n KAYA R za lham OFLAZ Ayfer GÜREfi Emin Ali TARLAKAZAN Yalç n ÇÖLÜO LU Önder KIRCA Levent ÇELENK Levent ÖNCEL Mustafa TURAN Adnan GÜVEN Caner TÜRKYENER Yaflar Enis SOLAKO LU Mustafa Erkin TOZO LU Murat BURAKÇIN Fatih fiç MEN Mustafa Türker BED Z Yusuf TURAN Gürol ÖZER Ali KADAK Mustafa DEM RC Mustafa Mehmet fiendo AN Behiç Faruk KURT Hac Mehmet ÖZY TO LU Chairman General Manager Assistant General Manager (Marketing and Sale - Cement) Assistant General Manager (Financial) Assistant General Manager (Cement Production) Assistant General Manager (Ready-Mixed Concrete) Assistant General Manager (Investment and Automation) Plant Manager (Cement Plant - Kayseri) Plant Manager (Cement Plant - Eskiflehir) Plant Manager (Cement Plant - Ni de) Plant Manager (Cement Plant - Ankara) Electrical Maintenance Manager Corporate Risk Management Team Leader Marketing and Sales Manager (Mersin) Marketing and Sales Manager (Kayseri - Ni de) Marketing and Sales Manager (Eskiflehir - Ankara) Internal Audit Manager Finance Manager Administrative and Financial Affairs Manager Purchasing Manager Corporate Development and Human Resources Manager Strategy and Information Management Systems Manager Administrative Affairs Manager Marketing Manager White Cement and Special Products Sales Manager Production Manager Production Manager (Cement Plant - Kayseri) Production Manager (Cement Plant - Ni de) Production Manager (Cement Plant - Eskiflehir) Raw Material Manager Quality Control Manager Process Development and Application Manager Electrical Maintenance Manager Machinery Maintenance Manager Maintenance Manager (Cement Plant - Eskiflehir) Automation and Control Systems Manager Investment Manager Ready-Mixed Concrete Regional Manager (Mersin) Ready-Mixed Concrete Regional Manager (Antalya) Technical Manager (Ready-Mixed Concrete) Equipment Performance Development Manager (Ready-Mixed Concrete) 3. Employee and Worker Turnover: As of December 31, 2007, total number of personnel and workers at the headquarter and other plants of our Company is 905. In 2007, 98 personnel and workers quit their jobs, on the other hand, 313 personnel and workers were employed. 4. Collective Labor Agreements: Our Collective Bargaining Agreement, expired December 31, 2007, was agreed by Turkey Çimse-Work Trade Union and Employers' Organization of Cement Industry Federation on March 21, 2008 and was carried into effect as of January 1, 2008, for 3 years; expire date is December 31, Liabilities for Severance Pay: Severance pay obligation to our Company as of December 31, 2007 is TRY , Rights and Benefits of Staff and Workers: Personnel External Scope : Fee +4 Fee Bonus Annual Personnel and Workers, Collective Bargaining Agreement Applied : Fee +4 Fee Bonus Annual TRY 115/Monthly Social Relief Clothning, Birth, Death, Marriage, Food, Transportation and Other Social Benefits are Made. In 2007 TRY of severance pay is paid. Annual Report 97

100 Ç MSA Ç MENTO SANAY VE T CARET ANON M fi RKET AND ITS SUBSIDIARIES FOR THE YEAR ENDED DECEMBER 31, 2007 PROFIT DISTRIBUTION TABLE (CURRENCY - NEW TURKISH LIRA UNLESS OTHERWISE STATED) Consolidated Consolidated Current Period Current Period (TRY) December 31, 2007 December 31, 2006 A- DISTRIBUTION OF PROFITS OF THE PERIOD 1- Profits of the period Taxes due ( ) ( ) - Corporation Tax ( ) ( ) - Income Tax Other Taxes and Similar Liabilities Statutory Reserves of Sequence 1 - ( ) NET DISTRIBUTABLE PROFITS OF THE PERIOD S1 Dividends to Shareholders ( ) ( ) - Payable to Holders of Ordinary Shares ( ) ( ) 5- Dividends to the Board of Directors S2 Dividends to Shareholders ( ) ( ) - Payable to Holders of Ordinary Shares ( ) ( ) 7- Statutory Reserves of Sequence 2 ( ) ( ) EXTRAORDINARY RESERVES B- DISTRIBUTION FROM RESERVES 1- Payable to Shareholders Payable to Holders of Ordinary Shares C- DIVIDEND PER SHARE (TRY/%) (*1) 2,15 TRY/214,88% 1,12 TRY/112,19% 1- Payable to Holders of Ordinary Shares (TRY/%) 2,15 TRY/214,88% 1,12 TRY/112,19% D- DIVIDEND PER SHARE (TRY/%) (*2) 1,11 TRY/111% 0,87 TRY/87% 1- Payable to Holders of Ordinary Shares (TRY/%) 1,11 TRY/111% 0,87 TRY/87% (*1) Dividend per share is calculated over nominal capital. (*2) Dividend per share is calculated over gross dividend payable to shareholders and nominal capital ,62 PROFIT DISTRIBUTION PROPOSAL AND CONCLUSION We propose that, of TRY , the net profits of the period 2007 which appear on the consolidated financial statements prepared in accordance with Statements of International Financial Reporting Standards (IFRS) and which remain after deduction of taxes and other statutory liabilities, a) TRY ,61 from the profit of 2007, TRY ,01 from extraordinary reserve funds and gross total of TRY ,62 to be distributed as dividends to shareholders, taking account of the provisions of the Capital Market Act, b) TRY ,65 to be retained as Statutory Reserves of Sequence 2, c) the remainder thereof be retained as Extraordinary Reserves, d) profit distribution to be payable in cash and started as from April 14, 2008, also in view of the financial position of the Company. Dear shareholders, We hereby submit to your approval, the Balance Sheet and the Income Statement for the accounting period of January 1, 2007 to December 31, With respects, For the Board of Directors Mehmet GÖÇMEN Deputy Chairman 98 Annual Report

101 Ç MSA Ç MENTO SANAY VE T CARET ANON M fi RKET AND ITS SUBSIDIARIES FOR THE YEAR ENDED DECEMBER 31, 2007 RATIOS (CURRENCY - NEW TURKISH LIRA UNLESS OTHERWISE STATED) Consolidated Consolidated Net Working Capital = Current Assets - Current Liabilities TRY TRY I- Liquidity Ratios: 1- Current Ratio = Current Assets/Short-Term Debts 1,81 1,49 2- Liquidity Ratio = Current Assets-Inventories-Other Current Assets/Short-Term Debts 1,20 1,06 II- Financial Position Ratios: 1- Total Debts/Shareholders' Equity 0,22 0,39 2- Short-Term Debts/Total Assets 0,13 0,14 3- Long-Term Debts/Total Assets 0,05 0,14 III- Profitability Ratios: 1- Net Profits of the Period/Net Sales 0,50 0,27 2- Net Profits of the Period/Total Assets 0,26 0,14 3- Net Profits of the Period/Shareholders' Equity 0,31 0,19 Annual Report 99

102 REPORT OF INDEPENDENT AUDITORS To the Board of Directors of Çimsa Çimento Sanayi ve Ticaret Anonim fiirketi We have audited the accompanying consolidated financial statements of Çimsa Çimento Sanayi ve Ticaret Anonim fiirketi (Çimsa) and its subsidiaries (hereafter together referred to as the Company), which comprise the consolidated balance sheet as of December 31, 2007, the consolidated income statement for the year then ended, and a summary of significant accounting policies and other explanatory notes. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with financial reporting standards published by the Capital Market Board in Turkey. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation 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 Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with standards on auditing published by Capital Market Board in Turkey. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the 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 entity'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 financial statements. We believe that the audit evidence we have obtained are sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion the accompanying consolidated financial statements give a true and fair view of the financial position of Çimsa Çimento Sanayi ve Ticaret Anonim fiirketi and its subsidiaries as of December 31, 2007, and of their financial performance for the year then ended in accordance with financial reporting standards (Note 2 and 3) published by the Capital Market Board in Turkey. Güney Ba ms z Denetim ve Serbest Muhasebeci Mali Müflavirlik Anonim fiirketi An Affiliated Firm of Ernst & Young International Metin Cano ullar, SMMM Partner, Principal Auditor March 17, 2008 stanbul, Turkey 100 Annual Report

103 Ç MSA Ç MENTO SANAY VE T CARET ANON M fi RKET AND ITS SUBSIDIARIES AUDITORS' REPORT TO GENERAL ASSEMBLY OF Ç MSA Ç MENTO SANAY VE T CARET A.fi. The Company's Trade Name : Çimsa Çimento Sanayi ve Ticaret A.fi. Location of Headquarters : Mersin Share Capital : TRY Line of Business : Cement production and trade - Auditors' Name Terms in Office Shareholders or not Meetings attended and Number of Board of Auditors Meetings held Scope of the audit made on the Company's accounts, books and documents; dates of auditing and the results thereof Dates and results of the cash counts made at the cash desk of the Company, according to Turkish Commercial Code, Article, 353, Paragraph 1/3 Dates and results of the cash counts made at the cash desk of the Company, according to Turkish Commercial Code, Article, 353, Paragraph 1-4 Complaints and corruption assertions acknowledged and actions taken : Mehmet SERT - Bahad r BORAN : One year - One year : We are not shareholders of the Company. : We attended none of the Board of Directors Meetings. The Board of Audit held four meetings. : Commercial Law and Tax Regulations Audits have been conducted in June, September, December 2007 and February 2008, any effect of criticism has not been encountered. : At the cash counts made during the year it has been established that the existing petty cash was compliant with the records. : In the analysis made every month it has been confirmed that commercial papers and certificates exist and compatible with the book records. : There has been no complaint or corruption assertion. We have examined the accounts and transactions of Çimsa Çimento Sanayi ve Ticaret A.fi. in the period from to in accordance with the Turkish Commercial Code, other regulations, as well as the Articles of Association of the Company and generally accepted accounting principles and standards. In our opinion, the attached balance sheet prepared as of December 31, 2007 and the Income Statement for the period from to accurately reflect the true financial position and the true business results, respectively, of the Company for said period. The Annual Report, which is found to be true, and the profit distribution proposal are in accordance with the applicable laws and with the Articles of Association of the Company. We hereby request the approval of the balance sheet and the income Statement and the release of the Board of Directors from liabilities. March 17, 2008 BOARD OF AUDITORS Mehmet SERT Bahad r BORAN Annual Report 101

104

105 Ç MSA Ç MENTO SANAY VE T CARET ANON M fi RKET AND ITS SUBSIDIARIES DOMESTIC SELLING POINTS AND SUPPLIERS

106 GRAY CEMENT SALES OFFICES CITY SELLER TEL FAX ADANA ALIÇ KARDEfiLER Nfi. T C. LTD. fit. (90 322) (90 322) MIZRAK Nfi. T C. LTD. fit. (90 322) MUSTAFA ALTAfi Nfi. LTD. fit (90 322) (90 322) NEC P COfiKUN (90 322) ORHAN TOPTAN Nfi. LTD. fit. (90 322) ÖZDEM R T CARET-MUH TT N ÖZDEM R (90 322) SABAHfiEN Nfi. MALZ. TAAH. LTD. fit. (90 322) (90 322) SA LAM Nfi. MALZ. SAN. T C. LTD. fit. (90 322) SERLINES Nfi. LTD. fit. (90 322) (90 322) YUSUF KURTGÖZ Nfi. MALZ. T C. (90 322) MO OL T CARET (90 322) (90 322) Ç DEM NAKL. Nfi. LTD. fit. (90 322) ADAPAZARI H LM YILDIZ Nfi. NAK. SAN. T C. LTD. fit. (90 264) (90 264) MERKEZ T CARET-RECEP/MEHMET HAMMAZ (90 264) (90 264) ÖZDEM R NfiAAT-ADNAN ÖZDEM R (90 264) (90 264) ADIYAMAN ACARLAR Nfi. MALZ. TAAH. LTD. fit. (90 416) (90 416) AFYON DAKÇ M Nfi. A.fi. (90 272) (90 272) ENES Nfi. MALZ. SAN. T C. LTD. fit. (90 222) (90 222) AKSARAY ATILIM M M. MÜH. Nfi. LTD. fit. (90 382) (90 382) GÜVENLER YAPI MALZ. LTD. fit. (90 382) (90 382) ÇL YAPI MALZ. Nfi. LTD. fit. (90 382) (90 382) K ZLER T CARET (90 382) (90 382) KARACA Nfi. SAN. VE T C. LTD. fit. (90 382) (90 382) KARDEfiLER LTD. fit. (90 382) RAMAZAN KARGIN LTD. fit. (90 382) (90 382) RÜSTEM DA DAfi (90 382) (90 382) VEDAT YILDIZ (90 382) (90 382) YARDIMLILAR YAPI MALZ. LTD. fit. (90 382) (90 382) Y T T C. Nfi. MALZ. VE KÖMÜR T C. (90 382) (90 382) DEM RYÜREKLER LTD. fit. (90 382) (90 382) DURMAZLAR LTD. fit. (90 382) (90 382) KÖSEO ULLARI LTD. fit. (90 382) (90 382) ANKARA AKSU MOZA K Nfi. SAN. T C. LTD. fit. (90 312) (90 312) BEfi KTAfiLI Nfi. MALZ. LTD. fit. (90 312) (90 312) KARTALKAYA K REÇ Nfi. MALZ. A.fi. (90 312) (90 312) ÖZKAN NAKL YAT LTD. fit. (90 312) (90 312) UYSAL KARDEfiLER Nfi. LTD. fit. (90 312) (90 312) UZER LTD. fit. (90 312) (90 312) VOLKAN ACATAY Nfi. VE YAPI MALZ. (90 312) (90 312) ANTALYA AS-META Nfi. T C. LTD. fit. (90 242) (90 242) EFE NfiAAT LTD. fit. (90 242) (90 242) HÜSEY N ÇOBAN (90 242) (90 242) MANAVGAT fiah NLER LTD. fit. (90 242) (90 242) B LEC K ARI HAFR YAT NAKL. Nfi. LTD. fit. (90 228) (90 228) BOZKAYA Nfi. GIDA SAN. T C. A.fi. (90 228) (90 228) MDAT KILAVUZ (90 228) (90 228) TEVF K EROL Nfi. MALZ. T CARET (90 228) (90 228) UMUTLU T CARET-FUAT UMUTLU (90 228) (90 228) Annual Report

107 ESK fieh R CÖNGER Nfi. MALZ. SAN. T C. LTD. fit. (90 222) (90 222) ERPA Nfi. MALZ. LTD. fit. (90 222) (90 222) HACIBEK RO ULLARI LTD. fit. (90 222) (90 222) HA-DO Nfi. MALZ. SAN. LTD. fit. (90 222) (90 222) NMA Nfi. MALZ. A.fi. (90 222) (90 222) KIRÇILLAR Nfi. MALZ. LTD. fit. (90 222) (90 222) ÖZEN TARIM Nfi. T C. LTD. fit. (90 222) (90 222) ÖZMENLER TARIM TAfiM. SAN. T C. LTD. fit. (90 222) (90 222) ÖZORTAKLAR Nfi. MALZ. LTD. fit. (90 222) (90 222) SARIPEKMEZ Nfi. MALZ. LTD. fit. (90 222) (90 222) KAHRAMANMARAfi GÖKÇEO LU LTD. fit. (90 344) KAMALAK YAPI MALZ. Nfi. NAKL. LTD. fit. (90 344) (90 344) MABE Nfi. TAfiIMACILIK (90 344) (90 344) MASTER Nfi. TEKST L SAN. T C. LTD. fit. (90 344) (90 344) KIRAÇ Nfi. T C. LTD. fit. (90 344) (90 344) DEM R T CARET (90 344) (90 344) SP R-EMEK Nfi. T C. LTD. fit. (90 344) (90 344) TUNÇ T CARET (90 344) (90 344) GÜVENÇ T CARET (90 344) (90 344) KARAMAN ÖZO ULLARI YAPI MALZ. LTD. fit. (90 338) (90 338) SELAM KELEfi Nfi. MALZ. LTD. fit. (90 338) (90 338) YAMANLAR Nfi. LTD. fit. (90 338) (90 338) YEfi LDERE Nfi. LTD. fit. (90 338) (90 338) KAYSER FAT H NfiAAT-AHMET YILDIRIR (90 352) (90 352) FAT H Nfi. MALZ. VE T C. LTD. (90 352) (90 352) ARI MARKETÇ L K (90 352) (90 352) ARIKAN T CARET (90 352) (90 352) KAYSER BARBAROS YAPI MALZ. LTD. fit. (90 352) (90 352) CEYHAN T CARET (90 352) (90 352) ERAS PROJE VE MÜfi. A.fi. (90 352) (90 352) ERS N fiah N (90 352) (90 352) GÜLER T CARET (90 352) (90 352) H. TATARO LU Nfi. MALZ. A.fi. (90 352) (90 352) HIRKA T CARET (90 352) (90 352) NET YAPI LTD. fit. (90 352) (90 352) ÖZCEYHAN T CARET (90 352) (90 352) SERAY T CARET (90 352) SER M T CARET (90 352) (90 352) TÜRKMEN T CARET (90 352) (90 352) ULUTAfi Nfi. MALZ. A.fi. (90 352) (90 352) YÜCER T CARET (90 352) (90 352) A. CENG ZHAN T CARET (90 352) (90 352) U URLU Nfi. T C. LTD. fit. (90 352) (90 352) GÜLERYÜZ T C. LTD. fit. (90 352) (90 352) YILDIRIR Nfi. MALZ. LTD. fit. (90 352) (90 352) KONYA ARSLAN OTM. SAN. T C. LTD. fit. (90 332) (90 332) ÖZÜDO RU NAKL. Nfi. T C. LTD. fit. (90 332) (90 332) AKSOY YAPI MARKET LTD. fit. (90 332) (90 332) PORTAfi M M. PLAN ORG. T C. LTD. fit. (90 332) (90 332) RAMAZAN ZORLU Nfi. MALZ. LTD. fit. (90 332) (90 332) Annual Report 105

108 GRAY CEMENT SALES OFFICES (CONTINUED) KONYA SÜLLÜ Nfi. MALZ. LTD. fit. (90 332) (90 332) TOPBAfi Nfi. LTD. fit. (90 332) (90 332) TÜRKO LU Nfi. LTD. fit. (90 332) (90 332) KÜTAHYA GÜNER ELEKTR K MALZ. A.fi. (90 274) (90 274) ÖZATILGANLAR Nfi. MAD. LTD. fit. (90 274) (90 274) ÖZMETAL Nfi MALZ. LTD. fit. (90 274) (90 274) MALATYA ACARTAfi Nfi. MLZ. LTD. fit. (90 422) (90 422) ALAN T CARET-OSMAN ALAN (90 422) (90 422) Ç MPA Nfi. MLZ. LTD. fit. (90 422) (90 422) DERYA YAPI LTD. fit. (90 422) (90 422) LEVENT T CARET LEVENT ENG NOL (90 422) (90 422) REfiANLAR LTD. fit. (90 422) (90 422) BEfiDO ANLAR Nfi. NAK. LTD. fit. (90 422) (90 422) MERS N ADAfi T CARET-EKREM KOÇ (90 324) ADER Nfi. GIDA T C. LTD. fit. (90 324) (90 324) AHMET YÜKSEL Nfi. MALZ. LTD. fit. (90 324) (90 324) AKDEN Z T CARET-MUHAMMET USTA (90 324) ALER Nfi. OTOM. PET. ÜRN. SAN. T C. LTD. fit. (90 324) AYDO ANLAR Nfi. MALZ. LTD. fit. (90 324) (90 324) B LG END. MALZ. YAPI TAAH. TURZ. LTD. fit. (90 324) B LG N NfiAAT Nfi. MALZ. OTO T C. LTD. fit. (90 324) (90 324) BORTAfi B MS LOJ ST K Nfi. T C. LTD. fit. (90 324) BUCAK T C. TUR. SAN. VE PAZ. LTD. fit. (90 324) (90 324) EKREM UYSAL LTD. fit. (90 324) ERKOÇ M MARLIK Nfi. T C. LTD. fit. (90 324) (90 324) ERSOYLAR Nfi. SAN. VE T C. LTD. fit. (90 324) GÜLEÇ NfiAAT-ADEM GÜLEÇ (90 324) GÜNAY T CARET-AL VAROL GÜNAY (90 324) (90 324) GÜNEY NfiAAT MALZ. LTD. fit. (90 324) (90 324) GÜZEL Nfi. MALZ. TÜT. MAM. LTD. fit. (90 324) IfiIK Nfi. MALZ. GIDA NAK. LTD. fit. (90 324) BRAH M ÖZTÜRK Nfi. SAN. LTD. fit. (90 324) N-SER-CAM Nfi. SERACILIK LTD. fit. (90 324) KABADAYILAR Nfi. MALZ. LTD. fit. (90 324) (90 324) KAYA BR KET-MEHMET KAYA (90 324) KOCAO LU NfiAAT TAAHHÜT LTD. fit. (90 324) (90 324) MEHMET KARAGÖZLÜ T CARET (90 324) (90 324) META TAfiIMACILIK TUR ZM LTD. fit. (90 324) OKYAYLAR Nfi. SANAY VE LTD. fit. (90 324) (90 324) ÖZÇEL K DEM R T CARETHANES (90 324) ÖZERO LU Z R. LAÇ K M. GÜB. LTD. fit. (90 324) (90 324) ÖZKAN T CARET-AL ÖZKAN (90 324) ÖZPAR NfiAAT SAN. VE T C. LTD. fit. (90 324) (90 324) fiah NLER YAPI MARKET NAK. LTD. fit. (90 324) fiikfiik GIDA TARIM YEM Nfi. OTO. LTD. fit. (90 324) TASGÜL TAfiIMACILIK LTD. fit. (90 324) (90 324) TEBER K Nfi. LTD. fit. (90 324) (90 324) TOSLAKLAR Nfi. T C. LTD. fit. (90 324) TÜMAY Nfi. T C. LTD. fit. (90 324) (90 324) UYSAL Nfi. MALZ. LTD. fit. (90 324) (90 324) Annual Report

109 MERS N UYSALLAR NAK. Nfi. LTD. fit. (90 324) (90 324) UZUNLAR Nfi. LTD. fit. (90 324) (90 324) YEfi LOVA Nfi. T C. LTD. fit. (90 324) YEfi LOVACAN NfiAAT TAAH. LTD. fit. (90 324) YILDIRIM T CARET-SAL H YILDIRIM (90 324) (90 324) YILDIRIMLAR SAN. VE T C. LTD. fit. (90 324) (90 324) YILMAZ Nfi. NAKL. T C. SAN. LTD. fit. (90 324) (90 324) YILMAZ NfiAAT NAKL YE LTD. fit. (90 324) (90 324) Z RVE YAPI MALZ. Nfi. PAZ. LTD. fit. (90 324) NEVfiEH R ÖNCÜL YAPI MALZ. LTD. fit. (90 384) (90 384) YALAP Nfi. TURZ. LTD. fit. (90 384) (90 384) GÜL B MS Nfi. LTD. fit. (90 384) (90 384) KAYMAKTAfi Nfi. MALZ. LTD. fit. (90 384) (90 384) BONCUK T CARET-AHMET TOSUN (90 384) (90 384) N DE ÇAKMAK Nfi. LTD. fit. (90 388) (90 388) ABDURRAHMAN BÜYÜKAKKAfi (90 388) (90 388) ÇA LAR T CARET-KORAY ÇA LAR (90 388) (90 388) DEL CEO LU T CARET-MUSTAFA DEL CE (90 388) ERY T NAK. Nfi. LTD. fit. (90 388) (90 388) GEYLAN Nfi. MALZ. LTD. fit. (90 388) (90 388) GÜNER ÜNAL MANDACI (90 388) (90 388) ILIKKANLAR Nfi. VE MALZ. LTD. fit. (90 388) (90 388) MUSTAFA ULUPINAR (90 388) (90 388) ÖZÇA LAYAN Nfi. MALZ. LTD. fit. (90 388) (90 388) fiah NERLER Nfi. VE MALZ. LTD. fit. (90 388) (90 388) fiehnaz TEOMAN-MERCAN T CARET (90 388) (90 388) YÜCEL T CARET-ERDAL SEZER (90 388) (90 388) ÖNEN Nfi. LTD. fit. (90 388) (90 388) ÜNSAL PETROL (90 388) (90 388) OSMAN YE GÜLO LU T CARET-MEHMET GÜLO LU (90 328) (90 328) SEDA Nfi. T C. LTD. fit. (90 328) (90 328) S VAS ÖZGÜVEN M Nfi. NAK. T C. LTD. fit. (90 346) (90 346) UfiAK ÜÇLER Nfi. MALZ. LTD. fit. (90 276) (90 276) Annual Report 107

110 WHITE CEMENT SALES OFFICES CITY SELLER TEL FAX ADANA ALIÇ KARDEfiLER Nfi. T C. LTD. fit. (90 322) (90 322) MIZRAK Nfi. T C. LTD. fit. (90 322) MO OL T CARET (90 322) (90 322) MUSTAFA ALTAfi Nfi. NAK. T C. LTD. fit. (90 322) (90 322) NEC P COfiKUN (90 322) ORHAN TOPTAN Nfi. LTD. fit. (90 322) ÖZDEM R T CARET-MUH TT N ÖZDEM R (90 322) SABAHfiEN Nfi. MALZ. TAAH. LTD. fit. (90 322) (90 322) SA LAM Nfi. MALZ. SAN. T C. LTD. fit. (90 322) SERLINES Nfi. LTD. fit. (90 322) (90 322) YUSUF KURTGÖZ Nfi. MALZ. T C. (90 322) ADIYAMAN ACARLAR Nfi. MALZ. TAAH. LTD. fit. (90 416) (90 416) BED R BALKAN (90 416) (90 416) AFYON AFYON B RL K LTD. fit. (90 272) (90 272) AKSARAY KARACA Nfi. LTD. fit. (90 382) ANKARA AKSU LTD. fit. (90 312) (90 312) BEfi KTAfiLI Nfi. LTD. fit. (90 312) (90 312) CANGÜL Nfi. SAN. VE T C. A.fi. (90 312) (90 312) KARTALKAYA K REÇ A.fi. (90 312) (90 312) ÖZKAN NAKL YAT LTD. fit. (90 312) (90 312) ÖZKUL BETON EL. LTD. fit. (90 312) (90 312) SERA BETON ELEMANLARI LTD. fit. (90 312) (90 312) UYSAL KARDEfiLER Nfi. LTD. fit. (90 312) (90 312) VOLKAN ACATAY (90 312) (90 312) ANTALYA AS-META Nfi. T C. LTD. fit. (90 242) (90 242) BAfiERGÜN Nfi. LTD. fit. (90 242) (90 242) Ç MPA A.fi. (90 242) (90 242) EFE NfiAAT LTD. fit. (90 242) (90 242) HÜSEY N ÇOBAN (90 242) (90 242) KONURLAR Nfi. LTD. fit. (90 242) (90 242) MANAVGAT fiah NLER Nfi. SAN. VE T C. LTD. fit. (90 242) (90 242) YILDIRIMLAR Nfi. LTD. fit. (90 242) (90 242) YILDIZ Nfi. MALZ. LTD. fit. (90 242) (90 242) ARDAHAN ERDEM ROCAK NfiAAT (90 478) (90 478) ARTV N KES MAL A.fi. (90 466) (90 466) BALIKES R BORÇ M Nfi. LTD. fit. (90 266) (90 266) BARTIN YAZLAR PAZ. A.fi. (90 378) (90 378) BATMAN KURTBAfiLAR LTD. fit. (90 488) (90 488) B TL S L S YAPI MALZEMELER (90 434) (90 434) BURSA CENG ZLER MADENC L K LTD. fit. (90 224) (90 224) ÇANAKKALE YURDAKUL YAPI (90 286) (90 286) DEN ZL ÇET N Nfi. MALZ. LTD. fit. (90 258) (90 258) NAMLI Nfi. LTD. fit. (90 258) (90 258) SULAYICI Nfi. A.fi. (90 258) (90 258) D YARBAKIR ÇAVUfiO LU Nfi. LTD. fit. (90 412) ELAZI TAfi T CARET (90 424) (90 424) ERZ NCAN BEfi KTAfiLAR Nfi. LTD. fit. (90 446) ERZURUM DEM RC O LU A.fi. (90 442) (90 442) HASAN AKAL (90 442) (90 442) ESK fieh R ERPA NfiAAT LTD. fit. (90 222) (90 222) Annual Report

111 ESK fieh R NMA A.fi. (90 222) (90 222) GAZ ANTEP MIHÇIO LU MOL TEKS A.fi. (90 342) (90 342) G RESUN YARAMANLAR Nfi. LTD. fit. (90 454) SKENDERUN TANER Nfi. LTD. fit. (90 326) STANBUL ÖZER T CARET LTD. fit. (90 216) (90 216) ÖZTÜRKLER A.fi. (90 212) (90 212) ZM R BAYRAK KÖMÜR LTD. fit. (90 232) (90 232) Ç L MOZA K LTD. fit. (90 232) (90 232) KARAO LU Nfi. LTD. fit. (90 232) (90 232) fiataflar Nfi. LTD. fit. (90 232) (90 232) KAHRAMANMARAfi DEM R T CARET (90 344) (90 344) GÖKÇEO LU GÜBRE Z RA LAÇ TAR. ÜRN. LTD. fit. (90 344) GÜVENÇ T CARET (90 344) (90 344) SP R-EMEK Nfi. T C. LTD. fit. (90 344) (90 344) KAMALAK YAPI MALZ. Nfi. NAKL. LTD. fit. (90 344) (90 344) KIRAÇ Nfi. T C. LTD. fit. (90 344) (90 344) MASTER Nfi. TEKST L SAN. T C. LTD. fit. (90 344) (90 344) TUNÇ T CARET (90 344) (90 344) KARS KARAKAfi ZAH. LTD. fit. (90 474) POSOF T C. LTD. fit. (90 474) (90 474) KASTAMONU TONBULLAR HAZ. BET. VE Nfi. (90 366) (90 366) KAYSER FAT H Nfi. MALZ. VE T C. LTD. (90 352) (90 352) A. CENG ZHAN T CARET (90 352) (90 352) ARI MARKETÇ L K (90 352) (90 352) ARIKAN T CARET (90 352) (90 352) BARBAROS YAPI MALZ. LTD. fit. (90 352) (90 352) CEYHAN T CARET (90 352) (90 352) ERAS PROJE VE MÜfi. A.fi. (90 352) (90 352) ERS N fiah N (90 352) (90 352) GÜLER T CARET (90 352) (90 352) GÜLERYÜZ T C. LTD. fit. (90 352) (90 352) H. TATARO LU Nfi. MALZ. A.fi. (90 352) (90 352) HIRKA T CARET (90 352) (90 352) NET YAPI LTD. fit. (90 352) (90 352) ÖZCEYHAN T CARET (90 352) (90 352) SERAY T CARET (90 352) SER M T CARET (90 352) (90 352) TÜRKMEN T CARET (90 352) (90 352) U URLU Nfi. T C. LTD. fit. (90 352) (90 352) ULUTAfi Nfi. MALZ. A.fi. (90 352) (90 352) YÜCER T CARET (90 352) (90 352) KONYA ARSLAN OTO LTD. fit. (90 332) (90 332) KÜTAHYA ALKANLAR Nfi. LTD. fit. (90 274) GÜNER A.fi. (90 274) (90 274) ÖZMETAL NAK. LTD. fit. (90 274) (90 274) MALATYA ACARTAfi Nfi. LTD. fit. (90 422) BEfiDO ANLAR Nfi. NAK. LTD. fit. (90 422) (90 422) Ç MPA LTD. fit. (90 422) (90 422) REfiANLAR KAYISI Nfi. LTD. fit. (90 422) MAN SA KARAATA Nfi. LTD. fit. (90 236) MARD N PARLAKLAR PAZ. LTD. fit. (90 482) (90 482) Annual Report 109

112 WHITE CEMENT SALES OFFICES (CONTINUED) MERS N ADAfi T CARET-EKREM KOÇ (90 324) ADER Nfi. GIDA T C. LTD. fit. (90 324) (90 324) AHMET YÜKSEL Nfi. MALZ. LTD. fit. (90 324) (90 324) AKDEN Z T CARET-MUHAMMET USTA (90 324) ALER Nfi. OTOM. PET. ÜRN. SAN. T C. LTD. fit. (90 324) AYDO ANLAR Nfi. MALZ. LTD. fit. (90 324) (90 324) B LG END. MALZ. YAPI TAAH. TURZ. LTD. fit. (90 324) B LG N NfiAAT Nfi. MALZ. OTO T C. LTD. fit. (90 324) (90 324) BORTAfi B MS LOJ ST K Nfi. T C. LTD. fit. (90 324) BUCAK T C. TUR. SAN. VE PAZ. LTD. fit. (90 324) (90 324) EKREM UYSAL NAKL YE Nfi. MALZ. LTD. fit. (90 324) ERKOÇ M MARLIK Nfi. T C. LTD. fit. (90 324) (90 324) ERSOYLAR Nfi. SAN. VE T C. LTD. fit. (90 324) GÜLEÇ NfiAAT-ADEM GÜLEÇ (90 324) GÜNAY T CARET-AL VAROL GÜNAY (90 324) (90 324) GÜNEY NfiAAT MALZEMELER LTD. fit. (90 324) (90 324) GÜZEL Nfi. MALZ. TÜT. MAM. LTD. fit. (90 324) IfiIK Nfi. MALZ. GIDA. NAK. LTD. fit. (90 324) BRAH M ÖZTÜRK Nfi. SAN. LTD. fit. (90 324) N-SER-CAM Nfi. SERACILIK LTD. fit. (90 324) KABADAYILAR Nfi. MALZ. NAK. OTOMT. LTD. fit. (90 324) (90 324) KAYA BR KET-MEHMET KAYA (90 324) KOCAO LU NfiAAT TAAHHÜT LTD. fit. (90 324) (90 324) MEHMET KARAGÖZLÜ T CARET (90 324) (90 324) META TAfiIMACILIK TUR ZM LTD. fit. (90 324) OKYAYLAR Nfi. SANAY VE LTD. fit. (90 324) (90 324) ÖZÇEL K DEM R T CARETHANES (90 324) ÖZERO LU Z R. LAÇ K M. GÜB. LTD. fit. (90 324) (90 324) ÖZKAN T CARET-AL ÖZKAN (90 324) ÖZPAR NfiAAT SANAY VE T C. LTD. fit. (90 324) (90 324) fiah NLER YAPI MARKET NAK. LTD. fit. (90 324) fiikfiik GIDA TARIM YEM Nfi. OTO. LTD. fit. (90 324) TASGÜL TAfiIMACILIK AKARYAKIT Nfi. LTD. fit. (90 324) (90 324) TEBER K Nfi. VETER. VE T C. LTD. fit. (90 324) (90 324) TOSLAKLAR Nfi. T C. LTD. fit. (90 324) TÜMAY Nfi. T C. LTD. fit. (90 324) (90 324) UYSAL Nfi. MALZ. T C. VE SAN. LTD. fit. (90 324) (90 324) UYSALLAR NAK. Nfi. GALER C L K LTD. fit. (90 324) (90 324) UZUNLAR Nfi. GIDA NAK. HAYV. LTD. fit. (90 324) (90 324) YEfi LOVA Nfi. T C. LTD. fit. (90 324) YEfi LOVACAN NfiAAT TAAH. LTD. fit. (90 324) YILDIRIM T CARET-SAL H YILDIRIM (90 324) (90 324) YILDIRIMLAR SAN. VE T C. LTD. fit. (90 324) (90 324) YILMAZ Nfi. NAKL. T C. SAN. LTD. fit. (90 324) (90 324) YILMAZ NfiAAT NAKL YE LTD. fit. (90 324) (90 324) Z RVE YAPI MALZEMELER Nfi. PAZ. LTD. fit. (90 324) MU LA YAPIT Nfi. LTD. fit. (90 252) (90 252) NEVfiEH R BONCUK T CARET (90 384) (90 384) HEK MO LU Nfi. LTD. fit. (90 384) (90 384) YALAP Nfi. LTD. fit. (90 384) (90 384) Annual Report

113 OSMAN YE GÜLO LU T CARET-MEHMET GÜLO LU (90 328) (90 328) SEDA Nfi. T C. LTD. fit. (90 328) (90 328) R ZE H. KARAMEHMETO LU (90 464) S VAS TÖRE Nfi. LTD. fit. (90 346) (90 346) YILTAfi Nfi. A.fi. (90 346) (90 346) ÖZGÜVEN M Nfi. NAK. T C. LTD. fit. (90 346) (90 346) fianliurfa MEHMET TAC R (90 414) (90 414) ÖZ UYANIKO LU Nfi. LTD. fit. (90 414) (90 414) TOKAT ATSIZO LU Nfi. LTD. fit. (90 356) (90 356) YAKAR M M. ISI Nfi. A.fi. (90 356) (90 356) UfiAK ÜÇLER NfiAAT LTD. fit. (90 276) (90 276) VAN AKSEL ALTAYLI (90 432) BRAH M CALP (90 432) (90 432) YALOVA CEM L DEM RYÜREK LTD. fit. (90 226) (90 226) Annual Report 111

114 ECOMORTAR SALES OFFICES CITY SELLER TEL FAX ADANA ALIÇ KARDEfiLER Nfi. T C. LTD. fit. (90 322) (90 322) MIZRAK Nfi. T C. LTD. fit. (90 322) MUSTAFA ALTAfi NfiAAT NAK. T C. LTD. fit. (90 322) (90 322) NEC P COfiKUN (90 322) ORHAN TOPTAN Nfi. LTD. fit. (90 322) ÖZDEM R T CARET-MUH TT N ÖZDEM R (90 322) SABAHfiEN Nfi. MALZ. TAAH. LTD. fit. (90 322) (90 322) SA LAM Nfi. MALZ. SAN. T C. LTD. fit. (90 322) SERLINES Nfi. LTD. fit. (90 322) (90 322) YUSUF KURTGÖZ Nfi. MALZ. T C. (90 322) MO OL T CARET (90 322) (90 322) ADAPAZARI H LM YILDIZ Nfi. NAK. SAN. T C. LTD. fit. (90 264) (90 264) MERKEZ T CARET-RECEP/MEHMET HAMMAZ (90 264) (90 264) ÖZDEM R NfiAAT-ADNAN ÖZDEM R (90 264) (90 264) ADIYAMAN ACARLAR Nfi. MALZ. TAAH. LTD. fit. (90 416) (90 416) AFYON DAKÇ M Nfi. A.fi. (90 272) (90 272) ENES Nfi. MALZ. SAN. T C. LTD. fit. (90 222) (90 222) ANKARA AKSU MOZA K Nfi. SAN. T C. LTD. fit. (90 312) (90 312) BEfi KTAfiLI NfiAAT MALZ. LTD. fit. (90 312) (90 312) KARTALKAYA K REÇ Nfi. MALZ. Nfi. A.fi. (90 312) (90 312) ÖZKAN NAKL YAT LTD. fit. (90 312) (90 312) UYSAL KARDEfiLER Nfi. NAK. T C. LTD. fit. (90 312) (90 312) UZER LTD. fit. (90 312) (90 312) VOLKAN ACATAY Nfi. VE YAPI MALZ. (90 312) (90 312) ANTALYA AS-META Nfi. T C. LTD. fit. (90 242) (90 242) EFE NfiAAT LTD. fit. (90 242) (90 242) HÜSEY N ÇOBAN (90 242) (90 242) MANAVGAT fiah NLER Nfi. LTD. fit. (90 242) (90 242) B LEC K ARI HAFR YAT NAKL. Nfi. LTD. fit. (90 228) (90 228) BOZKAYA Nfi. GIDA SAN. T C. A.fi. (90 228) (90 228) MDAT KILAVUZ (90 228) (90 228) TEVF K EROL Nfi. MALZ. T CARET (90 228) (90 228) UMUTLU T CARET-FUAT UMUTLU (90 228) (90 228) ESK fieh R CÖNGER Nfi. MALZ. SAN. T C. LTD. fit. (90 222) (90 222) ERPA Nfi. MALZ. LTD. fit. (90 222) (90 222) HACIBEK RO ULLARI LTD. fit. (90 222) (90 222) HA-DO Nfi. MALZ. SAN. LTD. fit. (90 222) (90 222) NMA Nfi. MALZ. A.fi. (90 222) (90 222) KIRÇILLAR Nfi MALZ. LTD. fit. (90 222) (90 222) ÖZEN TARIM Nfi. T C. LTD. fit. (90 222) (90 222) ÖZMENLER TARIM TAfiM. SAN. T C. LTD. fit. (90 222) (90 222) ÖZORTAKLAR Nfi. MALZ. LTD. fit. (90 222) (90 222) SARIPEKMEZ Nfi. MALZ. LTD. fit. (90 222) (90 222) KAHRAMANMARAfi GÖKÇEO LU GÜBRE Z RA LAÇ TAR. ÜRN. LTD. (90 344) KAMALAK YAPI MALZ. Nfi. NAKL. LTD. fit. (90 344) (90 344) MASTER Nfi. TEKST L SAN. T C. LTD. fit. (90 344) (90 344) KIRAÇ Nfi. T C. LTD. fit. (90 344) (90 344) DEM R T CARET (90 344) (90 344) SP R-EMEK Nfi. T C. LTD. fit. (90 344) (90 344) TUNÇ T CARET (90 344) (90 344) GÜVENÇ T CARET (90 344) (90 344) Annual Report

115 KAYSER FAT H Nfi. MALZ. VE T C. LTD. (90 352) (90 352) ARI MARKETÇ L K (90 352) (90 352) ARIKAN T CARET (90 352) (90 352) BARBAROS YAPI MALZ. LTD. fit. (90 352) (90 352) CEYHAN T CARET (90 352) (90 352) ERAS PROJE VE MÜfi. A.fi. (90 352) (90 352) ERS N fiah N (90 352) (90 352) GÜLER T CARET (90 352) (90 352) H.TATARO LU Nfi. MALZ. A.fi. (90 352) (90 352) HIRKA T CARET (90 352) (90 352) NET YAPI LTD. fit. (90 352) (90 352) ÖZCEYHAN T CARET (90 352) (90 352) SERAY T CARET (90 352) SER M T CARET (90 352) (90 352) TÜRKMEN T CARET (90 352) (90 352) ULUTAfi Nfi. MALZ. A.fi. (90 352) (90 352) YÜCER T CARET (90 352) (90 352) A. CENG ZHAN T CARET (90 352) (90 352) U URLU Nfi. T C. LTD. fit. (90 352) (90 352) GÜLERYÜZ T C. LTD. fit. (90 352) (90 352) KONYA ÖZÜDO RU NAKL. Nfi. T C. LTD. fit. (90 332) (90 332) KÜTAHYA GÜNER ELEKTR K MALZ. A.fi. (90 274) (90 274) ÖZATILGANLAR Nfi. MAD. LTD. fit. (90 274) (90 274) ÖZMETAL Nfi. MALZ. LTD. fit. (90 274) (90 274) MALATYA BEfiDO ANLAR Nfi. NAK. LTD. fit. (90 422) (90 422) MERS N ADAfi T CARET-EKREM KOÇ (90 324) ADER Nfi. GIDA T C. LTD. fit. (90 324) (90 324) AHMET YÜKSEL Nfi. MALZ. LTD. fit. (90 324) (90 324) AKDEN Z T CARET-MUHAMMET USTA (90 324) ALER Nfi. OTOM. PET. ÜRN. SAN. T C. LTD. fit. (90 324) AYDO ANLAR Nfi. MALZ. T C. LTD. fit. (90 324) (90 324) B LG END. MALZ. YAPI TAAH. TURZ. LTD. fit. (90 324) B LG N NfiAAT Nfi. MALZ. OTO T C. LTD. fit. (90 324) (90 324) BORTAfi B MS LOJ ST K Nfi. T C. LTD. fit. (90 324) BUCAK T C. TUR. SAN. VE PAZ. LTD. fit. (90 324) (90 324) EKREM UYSAL NAKL YE Nfi. MALZ. LTD. fit. (90 324) ERKOÇ M MARLIK Nfi. T C. LTD. fit. (90 324) (90 324) ERSOYLAR Nfi. SAN. VE T C. LTD. fit. (90 324) GÜLEÇ NfiAAT-ADEM GÜLEÇ (90 324) GÜNAY T CARET-AL VAROL GÜNAY (90 324) (90 324) GÜNEY NfiAAT MALZ. LTD. fit. (90 324) (90 324) GÜZEL Nfi. MALZ. TÜT. MAM. LTD. fit. (90 324) IfiIK Nfi. MALZ. GIDA. NAK. LTD. fit. (90 324) BRAH M ÖZTÜRK Nfi. SAN. LTD. fit. (90 324) N-SER-CAM Nfi. SERACILIK LTD. fit. (90 324) KABADAYILAR Nfi. MALZ. NAK. OTOMT. LTD. fit. (90 324) (90 324) KAYA BR KET-MEHMET KAYA (90 324) KOCAO LU NfiAAT TAAHHÜT LTD. fit. (90 324) (90 324) MEHMET KARAGÖZLÜ T CARET (90 324) (90 324) META TAfiIMACILIK TUR ZM LTD. fit. (90 324) OKYAYLAR Nfi. SANAY VE LTD. fit. (90 324) (90 324) ÖZÇEL K DEM R T CARETHANES (90 324) Annual Report 113

116 ECOMORTAR SALES OFFICES (CONTINUED) MERS N ÖZERO LU Z R. LAÇ K M. GÜB. LTD. fit. (90 324) (90 324) ÖZKAN T CARET-AL ÖZKAN (90 324) ÖZPAR NfiAAT SANAY VE T C. LTD. fit. (90 324) (90 324) fiah NLER YAPI MARKET NAK. LTD. fit. (90 324) fiikfiik GIDA TARIM YEM Nfi. OTO. LTD. fit. (90 324) TASGÜL TAfiIMACILIK AKARYAKIT Nfi. LTD. fit. (90 324) (90 324) TEBER K Nfi. VETER. VE T C. LTD. fit. (90 324) (90 324) TOSLAKLAR Nfi. T C. LTD. fit. (90 324) TÜMAY Nfi. T C. LTD. fit. (90 324) (90 324) UYSAL Nfi. MALZ. T C. VE SAN. LTD. fit. (90 324) (90 324) UYSALLAR NAK. Nfi. GALER C L K LTD. fit. (90 324) (90 324) UZUNLAR Nfi. GIDA NAK. HAYV. LTD. fit. (90 324) (90 324) YEfi LOVA Nfi. T C. LTD. fit. (90 324) YEfi LOVACAN NfiAAT TAAH. LTD. fit. (90 324) YILDIRIM T CARET-SAL H YILDIRIM (90 324) (90 324) YILDIRIMLAR SAN. VE T C. LTD. fit. (90 324) (90 324) YILMAZ Nfi. NAKL. T C. SAN. LTD. fit. (90 324) (90 324) YILMAZ NfiAAT NAKL YE LTD. fit. (90 324) (90 324) Z RVE YAPI MALZEMELER NfiAAT PAZ. LTD. fit. (90 324) OSMAN YE GÜLO LU T CARET-MEHMET GÜLO LU (90 328) (90 328) SEDA Nfi. T C. LTD. fit. (90 328) (90 328) S VAS ÖZGÜVEN M Nfi. NAK. T C. LTD. fit. (90 346) (90 346) UfiAK ÜÇLER Nfi. MALZ. LTD. fit. (90 276) (90 276) Annual Report

117 ISIDAÇ SALES OFFICES CITY SELLER TEL FAX ADANA MIZRAK Nfi. T C. LTD. fit. (90 322) MUSTAFA ALTAfi NfiAAT NAK. T C. LTD. fit. (90 322) (90 322) NEC P COfiKUN (90 322) ÖZDEM R T CARET-MUH TT N ÖZDEM R (90 322) SABAHfiEN Nfi. MALZ. TAAH. (90 322) (90 322) YUSUF KURTGÖZ Nfi. MALZ. T C. (90 322) ADANA SA LAM Nfi. MALZ. SAN. T C. LTD. fit. (90 322) ADIYAMAN ACARLAR Nfi. MALZ. TAAH. (90 416) (90 416) BED R BALKAN (90 416) AFYON AFYON B RL K LTD. fit. (90 272) (90 272) AKSARAY KARACA Nfi. LTD. fit. (90 382) ANKARA AYK YAPI K MYASALLARI SAN. VE LTD. fit. (90 312) (90 312) UZUNO LU fiahvent SAN. VE T C. LTD. fit. (90 312) (90 312) BEfi KTAfiLI Nfi. LTD. fit. (90 312) (90 312) AKSU LTD. fit. (90 312) (90 312) VOLKAN ACATAY (90 312) SERA BETON ELEMANLARI (90 312) (90 312) KARTALKAYA K REÇ (90 312) (90 312) ÖZKAN NAKL YAT (90 312) (90 312) UYSAL KARDEfiLER (90 312) (90 312) CANGÜL Nfi. SAN. VE T C. A.fi. (90 312) (90 312) ANTALYA AS-META Nfi. T C. LTD. fit. (90 242) (90 242) EFE NfiAAT (90 242) (90 242) HÜSEY N ÇOBAN (90 242) (90 242) MANAVGAT fiah NLER Nfi. SAN. VE T C. (90 242) (90 242) Ç MPA A.fi. (90 242) (90 242) KONURLAR NfiAAT (90 242) (90 242) YILDIZ Nfi. MALZ. LTD. fit. (90 242) (90 242) BAfiERGÜN NfiAAT (90 242) (90 242) YILDIRIMLAR NfiAAT (90 242) (90 242) ARDAHAN ERDEM ROCAK NfiAAT (90 478) (90 478) ARTV N KES MAL A.fi. (90 466) (90 466) BALIKES R BORÇ M NfiAAT (90 266) (90 266) BARTIN YAZLAR PAZ. A.fi. (90 378) (90 378) BATMAN KURTBAfiLAR (90 488) (90 488) B TL S L S YAPI MALZEMELER (90 434) (90 434) BURSA CENG ZLER MADENC L K (90 224) (90 224) ÇANAKKALE YURDAKUL YAPI (90 286) (90 286) DEN ZL SULAYICI NfiAAT (90 258) (90 258) NAMLI NfiAAT (90 258) (90 258) ÇET N Nfi. MALZ. LTD. fit. (90 258) (90 258) D YARBAKIR ÇAVUfiO LU NfiAAT (90 412) ELAZI TAfi T CARET (90 424) (90 424) ERZ NCAN BEfi KTAfiLAR Nfi. LTD. fit. (90 446) ERZURUM HASAN AKAL (90 442) (90 442) DEM RC O LU A.fi. (90 442) (90 442) ESK fieh R NMA A.fi. (90 222) (90 222) ERPA NfiAAT LTD. fit. (90 222) (90 222) GAZ ANTEP MIHÇIO LU MOL TEKS A.fi. (90 342) (90 342) G RESUN YARAMANLAR NfiAAT (90 454) SKENDERUN TANER NfiAAT (90 326) Annual Report 115

118 ISIDAÇ SALES OFFICES (CONTINUED) STANBUL ÖZTÜRKLER A.fi. (90 212) (90 212) K LTAfi REFRAKTER MALZ. LTD. fit. (90 212) (90 212) SÖRMAfi SÖ ÜT REFRAKTER MALZ. A.fi. (90 228) (90 228) TEKNO YAPI A.fi. (90 216) (90 216) ÖZER Nfi. T C. LTD. fit. (90 216) (90 216) ZM R Ç L MOZA K (90 232) (90 232) fiataflar NfiAAT (90 232) (90 232) BAYRAK KÖMÜR LTD. fit. (90 232) (90 232) KARAO LU NfiAAT (90 232) (90 232) KAHRAMANMARAfi GÖKÇEO LU GÜBRE Z RA LAÇ TAR. ÜRN. (90 344) KAMALAK YAPI MALZ. Nfi. NAKL. (90 344) (90 344) MASTER Nfi. TEKST L SAN. T C. LTD. fit. (90 344) (90 344) KARS POSOF T CARET (90 474) (90 474) KASTAMONU TONBULLAR HAZ. BET. VE NfiAAT (90 366) (90 366) KONYA ARSLAN OTO LTD. fit. (90 332) (90 332) KÜTAHYA ALKANLAR NfiAAT (90 274) ÖZMETAL NAK. LTD. fit. (90 274) (90 274) GÜNER A.fi. (90 274) (90 274) MALATYA ACARTAfi NfiAAT (90 422) Ç MPA LTD. fit. (90 422) (90 422) REfiANLAR KAYISI LTD. fit. (90 422) MAN SA KARAATA NfiAAT (90 236) MARD N PARLAKLAR PAZ. LTD. fit. (90 482) (90 482) MERS N ADAfi T CARET-EKREM KOÇ (90 324) ADER NfiAAT GIDA LTD. fit. (90 324) (90 324) AHMET YÜKSEL Nfi. MALZ. LTD. fit. (90 324) (90 324) AKDEN Z T CARET-MUHAMMET USTA (90 324) ALER Nfi. OTOM. PET. ÜRN. SAN. LTD. fit. (90 324) AYDO ANLAR Nfi. ML. LTD. fit. (90 324) (90 324) B LG END. MALZ. LTD. fit. (90 324) B LG N NfiAAT Nfi. MALZ. LTD. fit. (90 324) (90 324) BUCAK T C. TUR. SAN. VE PAZ. LTD. fit. (90 324) (90 324) EKREM UYSAL NAKL YE NfiAAT MALZ. LTD. fit. (90 324) ERSOYLAR Nfi. SAN. VE T C. LTD. fit. (90 324) GÜNAY T CARET-AL VAROL GÜNAY (90 324) (90 324) GÜNEY NfiAAT MALZ. LTD. fit. (90 324) (90 324) BRAH M ÖZTÜRK (90 324) N-SER-CAM Nfi. MALZ. LTD. fit. (90 324) IfiIK Nfi. MALZ. LTD. fit. (90 324) KABADAYILAR Nfi. MALZ. LTD. fit. (90 324) (90 324) KOCAO LU NfiAAT LTD. fit. (90 324) (90 324) MEHMET KARAGÖZLÜ (90 324) (90 324) META TAfiIMACILIK TUR ZM LTD. fit. (90 324) OKYAYLAR Nfi. LTD. fit. (90 324) (90 324) ÖZERO LU Z R. LAÇ LTD. fit. (90 324) (90 324) ÖZPAR NfiAAT LTD. fit. (90 324) (90 324) fiah NLER YAPI MARKET LTD. fit. (90 324) fiikfiik GIDA TARIM YEM Nfi. LTD. fit. (90 324) TASGÜL TAfiIMACILIK Nfi. A.fi. (90 324) (90 324) UYSAL Nfi. MALZ. T C. VE SAN. LTD. fit. (90 324) (90 324) YEfi LOVA Nfi. T C. LTD. (90 324) YEfi LOVACAN NfiAAT LTD. fit. (90 324) Annual Report

119 MERS N YILDIRIMLAR SAN VE T C. LTD. fit. (90 324) (90 324) YILMAZ Nfi. NAKL. T C. SAN. LTD. fit. (90 324) (90 324) YILMAZ NfiAAT NAKL YE LTD. fit. (90 324) (90 324) Z RVE YAPI MALZ. Nfi. PAZ. LTD. fit. (90 324) TÜMAY Nfi. T C. LTD. fit. (90 324) (90 324) BORTAfi B MS LOJ ST K Nfi. T C. LTD. fit. (90 324) ERKOÇ M MARLIK Nfi. T C. LTD. fit. (90 324) (90 324) MU LA YAPIT NfiAAT (90 252) (90 252) NEVfiEH R YALAP NfiAAT (90 384) (90 384) HEK MO LU NfiAAT (90 384) (90 384) BONCUK T CARET-AHMET TOSUN (90 384) (90 384) OSMAN YE GÜLO LU T CARET-MEHMET GÜLO LU (90 328) (90 328) SEDA Nfi. T C. LTD. fit. (90 328) (90 328) R ZE H. KARAMEHMETO LU (90 464) S VAS TÖRE NfiAAT (90 346) (90 346) YILTAfi NfiAAT (90 346) (90 346) fianliurfa MEHMET TAC R (90 414) (90 414) ÖZ UYANIKO LU NfiAAT (90 414) (90 414) TOKAT ATSIZO LU NfiAAT (90 356) (90 356) YAKAR M M. ISI NfiAAT (90 356) (90 356) UfiAK ÜÇLER NfiAAT LTD. fit. (90 276) (90 276) VAN BRAH M CALP (90 432) (90 432) AKSEL ALTAYLI (90 432) YALOVA CEM L DEM RYÜREK (90 226) (90 226) ZONGULDAK ZONGULDAK YATIRIM A.fi. (90 372) (90 372) Annual Report 117

120 READY-MIXED CONCRETE NETWORK INFORMATION MERS N PLANT Tel : (90 324) Pbx Fax : (90 324) [email protected] MERS N REGION YEN HAL PLANT : (90 324) (2 lines) Fax: (90 324) TECE PLANT : (90 324) (2 lines) Fax: (90 324) BATIKENT PLANT : (90 324) Fax: (90 324) TARSUS PLANT : (90 324) (2 lines) Fax: (90 324) S L FKE PLANT : (90 324) [email protected] ANTALYA REGION ÇAKIRLAR PLANT : (90 242) (2 lines) Fax: (90 242) GEB Z PLANT : (90 242) Fax: (90 242) MANAVGAT PLANT : (90 242) (2 lines) Fax: (90 242) ALANYA PLANT : (90 242) (2 lines) Fax: (90 242) [email protected] KAYSER PLANT Tel : (90 352) Fax : (90 352) [email protected] KAYSER REGION KUMARLI PLANT : (90 352) (3 lines) Fax: (90 352) ANBAR PLANT : (90 352) Fax: (90 352) NEVfiEH R PLANT : (90 384) Fax: (90 384) [email protected] ADANA REGION ZEYT NL PLANT : (90 322) (3 lines) Fax: (90 322) M S S PLANT : (90 322) (2 lines) Fax: (90 322) K.MARAfi PLANT : (90 344) Fax: (90 344) OSMAN YE PLANT : (90 328) Fax: (90 328) MOB L PLANT : (90 533) NC RL K PLANT : (90 322) Fax: (90 322) KARAHAN PLANT : (90 533) [email protected] ESK fieh R PLANT Tel : (90 222) Pbx Fax : (90 222) [email protected] ESK fieh R REGION B LEC K PLANT : (90 228) Fax: (90 228) KÜTAHYA PLANT : (90 228) Fax: (90 228) [email protected] N DE PLANT Tel : (90 388) Pbx Fax : (90 388) [email protected] N DE REGION AKSARAY PLANT : (90 382) Fax: (90 382) KARAMAN PLANT : (90 388) Fax: (90 388) ERE L (KONYA) PLANT : (90 332) Fax: (90 332) [email protected] 118 Annual Report

121 OUR ISO 9000 CERTIFICATED SUPPLIERS FOR THE YEAR 2007 Ç MSA MERS N GYPSUM ARISOY MADENC L K T C. LTD. fit. DARBO AZ KASABASI ULUKIfiLA, N DE / TURKEY TEL : (90 388) (90 522) NKAYA MADENC L K SAN. VE T C. LTD. fit. REfiATBEY MAH. FUZUL CAD. NO: 83 ADANA / TURKEY TEL : (90 322) EKER MADENC L K NfiAAT NAKL YAT OTOMOT V HAYVANCILIK SANAY VE T CARET LTD. fit. fielale CAD. FEVZ ÇAKMAK KARAKOLU KARfiISI TARSUS, MERS N / TURKEY TEL : (90 324) , FAX : (90 324) ÖZTAY NfiAAT TAAHHÜT SANAY VE T CARET LTD. fit. KÜLTÜR MAH. ATATÜRK CAD. NO: 124/3 MERS N / TURKEY TEL : (90 324) S VAS KAOLIN ÇEL MADENC L K PETROL NAKL YAT NfiAAT SAN. VE T C. LTD. fit. ÇAKMAK CAD. KAD RBEY APT. NO: 25/3 MERS N / TURKEY TEL : (90 324) ALBITE CAM-SER MADENC L K SAN. VE T C. A.fi. BAHÇEL EVLER MAH. fiah N SOK. NO: 16/A BALIKES R / TURKEY TEL : (90 266) FAX : (90 266) KALTUN MADENC L K T C. A.fi. AYDIN MU LA KARAYOLU 35. KM. Ç NE, AYDIN / TURKEY TEL : (90 256) FAX : (90 256) Ç NE AKMADEN MADENC L K T C. A.fi. AYDIN MU LA KARAYOLU KARPUZLU YOL AYRIMI 33. KM. Ç NE, AYDIN / TURKEY TEL : (90 256) FAX : (90 256) PYROPHYLYTE MRÜN ENDÜSTR M NERALLER M KRON ZE Ö ÜTME SAN. T C. LTD. fit. ATATÜRK CAD. PAKKAZANÇ fihani KAT: 3 NO: 87 MALATYA / TURKEY TEL : (90 422) FAX : (90 422) ÇEL MADENC L K PETROL NAKL YAT NfiAAT SAN. VE T C. LTD. fit. ÇAKMAK CAD. KAD RBEY APT. NO: 25/3 MERS N / TURKEY TEL : (90 324) KARABULUT MAD. END. M N. MERMER TL. HR. Z R. VE LAÇ Nfi. NAK. GIDA MAD. SAN. VE T C. LTD. fit. YEN KÖY, MALATYA / TURKEY TEL : (90 422) KOBALT MADENC L K. NAK. Nfi. PET. TURZ. SAN. VE T C. LTD. fit. HALSETT N MAH. KAHTALI SOK. YEN ADL YE SARAYI YANI MALATYA / TURKEY TEL : (90 422) FAX : (90 422) DO A M NERAL MAD. PET. NAK. Nfi. SAN. VE T C. LTD. fit. TOROS MAH. KENAN EVREN BULV SOK. NO: 41 ÇATI APT. KAT: 1 D: 1 ADANA / TURKEY TEL : (90 322) FAX : (90 322) YED TEPE MAD. END. TAfi. PET. ÜRÜN. TL. HR. SAN. VE DIfi. T C. LTD. fit. SMET NÖNÜ BUL. YAfiAT fi HANI KAT: 4/15 MERS N / TURKEY TEL : (90 324) YER MAD. NAKL. MALAT fi MAK. TAH. TAR. LTD. fit. Z YAPAfiA BUL. KURUKÖPRÜ MAH. A ANLAR APT. NO: 85/C KAT: 4/7 SEYHAN / TURKEY TEL : (90 322) FAX : (90 322) PYRITE ASH TOROS TARIM SAN. VE T C. A.fi. TEKFEN TOWER NO: LEVENT, STANBUL / TURKEY TEL : (90 212) FAX : (90 212) DEM RELLER KOLL. fit. HACI CAD. NO: 5 ERE L, KONYA / TURKEY TEL : (90 332) FAX : (90 332) BEYKROM MADENC L K T C. VE SAN. A.fi. U UR MUMCU CADDES NO: 61/2 G.OSMANPAfiA, ANKARA / TURKEY TEL : (90 312) SLAG TÜRK YE DEM R VE ÇEL K filetmeler GENEL MÜDÜRLÜ Ü SKENDERUN SATIfi MÜDÜRLÜ Ü SKENDERUN / TURKEY TEL : (90 326) FAX : (90 326) KARDEM R KARABÜK DEM R ÇEL K SAN. VE T C. A.fi. KARABÜK / TURKEY TEL : (90 372) FAX : (90 372) KRAFT PAPER BAG-BROWN SEKA AKDEN Z MÜESSESES TAfiUCU, S L FKE / TURKEY TEL : (90 324) (7 lines) FAX : (90 324) Annual Report 119

122 OUR ISO 9000 CERTIFICATED SUPPLIERS FOR THE YEAR 2007 OYKA KA IT AMBALAJ SAN. VE T C. A.fi. CEYHAN YOLU 12. KM. PK: 312 ADANA / TURKEY TEL : (90 322) FAX : (90 322) SEGEZHA PULPAND PAPER MILL SEGEZHA, KRALIN RUSIA SHELTON FORESTRY PRODUCTS LTD. SUITE 23 PARK ROYAL HAUSE 23 PARK NROYAL LONDON NW10 NTERPAP DIfi T C. VE MÜM. A.fi. YAPI KRED PLAZA C BLOK 1/B LEVENT, STANBUL / TURKEY TEL : (90 212) FAX : (90 212) KRAFT PAPER BAG-WHITE V K NG KA IT VE SELÜLOZ A.fi. YILDIZ POSTA CAD. KOZA APT. KAT: 3 STANBUL / TURKEY TEL : (90 212) FAX : (90 212) UPM KYMMENE COPR. SEVE SEAS P.O. BOX: 380 FI HELSINKI, FINLAND TEL : (00 358) FAX : (00 358) F NEKS A.fi. fiafimaz PLAZA SAN YE ERMUTLU SOK. NO: 4/16 KAT: 8 KOZYATA I, STANBUL / TURKEY TEL : (90 216) FAX : (90 216) LAMINATED KRAFT PAPER CARTIERA DEL CHISE Via tito speri, Mont chiari ITALY TEL : (00 390) FAX : (00 390) ALTES MÜM. Ç VE DIfi T C. LTD. fit. K TELL ATATÜRK SANAY S TES 2. SOK. NO: 29 K TELL, STANBUL / TURKEY TEL : (90 212) FAX : (90 212) ELECTRICAL MAINTENANCE SERVICES SFM ELEKTR K MAK NE OTOMASYON SAN. VE T C. LTD. fit. MAHMUD YE MAH. ZEYT NL BAHÇE CAD. METROPOL fi MRK. MERS N / TURKEY TEL : (90 324) FAX : (90 324) ÇET N ELEKTR K ELEKTRON K Nfi. MAK. TAfi. SAN. VE T C. LTD. fit. NUSRAD YE MAH. GMK BULVARI NO: 117/C MERS N / TURKEY TEL : (90 324) FAX : (90 324) MECHANICAL MAINTENANCE SERVICES MERS N MAK NE SANAY A.fi. TOROSLAR MAH. TEKKE CAD. NO: 14 MERS N / TURKEY TEL : (90 324) (3 LINES) FAX : (90 324) CETA MAK NA SANAY VE T CARET A.fi. LALE SOKAK NO: LEVENT, STANBUL / TURKEY TEL : (90 212) FAX : (90 212) SEYHAN MAK NE END. SAN. VE T C. LTD. fit. MERS N YOLU ÜZER 10. KM SEYHAN, ADANA / TURKEY TEL : (90 322) FAX : (90 322) IRON ORE ÖZDEM RLER MADENC L K SAN. VE T C. LTD. fit. KIZILMURAT MAH. 164 SOK. NO: 5/7 TARSUS, MERS N / TURKEY TEL : (90 324) FAX : (90 324) DEM RC O LU MADENC L K T C. LTD. fit. KURTULUfi MAH. 17. SOK. SEDA APT. KAT: 1/2 ADANA / TURKEY TEL : (90 322) FAX : (90 322) BEYKROM MADENC L K T C. VE SAN. A.fi. U UR MUMCU CADDES NO: 61/2 G.OSMANPAfiA, ANKARA / TURKEY TEL : (90 312) DEMTEKS TEKST L TH. HR. LTD. fit. ADANA / TURKEY TEL : (90 322) FAX : (90 322) T MUÇ NLER MADENC L K PETROL ÜRÜN. Nfi. TAAH. NAK. SAN. VE T C. A.fi. KAYSER / TURKEY TEL : (90 352) FAX : (90 352) S S MADENC L K PETROL ÜRÜNLER SAN. VE T C. LTD. fit. KAYSER / TURKEY TEL : (90 352) FAX : (90 352) FERMAD MADENC L K TUR ZM Nfi. SAN. VE T C. A.fi. ANKARA / TURKEY TEL : (90 312) FAX : (90 312) LIMESTONE TUVENAN (UNCRUSHED LIMESTONE) ÖZDEM RLER MADENC L K SAN. VE T C. LTD. fit. KIZILMURAT MAH. 164 SOK. NO: 5/7 TARSUS, MERS N / TURKEY TEL : (90 324) FAX : (90 324) ÖZTAY Nfi. TAAH. SAN. VE T C. LTD. fit. KÜLTÜR MAH. ATATÜRK CAD. NO: 124/3 MERS N / TURKEY TEL : (90 324) , FAX : (90 324) Annual Report

123 T MIÇ N NAK. HAFR YAT T C. VE SAN. A.fi. H PODROM KARfiISI ADANA / TURKEY TEL : (90 322) FAX : (90 322) ARISOY MADENC L K T C. LTD. fit. DARBO AZ KASABASI ULUKIfiLA, N DE / TURKEY TEL :(90 388) CANO ULLARI Nfi. TAAH. SAN. LTD. fit. KURTULUfi MAH. Z YAPAfiA BULVARI 9. SOK. NO: 8 BÜfiRA APT. ASMA KAT SEYHAN, ADANA / TURKEY TEL : (90 322) FAX : (90 322) ALACA AKARYAKIT NAKL YAT, MADENC L K NfiAAT SANAY VE T C. LTD. fit. fieh T SHAK MAH SOK. KAT: 1/5 TARSUS, MERS N / TURKEY TEL : (90 324) FAX : (90 324) CAC MLER NfiAAT VE T C. LTD. fit. GMK BULVARI ÇEL APT. KAT: 3 MERS N / TURKEY TEL : (90 324) FAX : (90 324) AGGREGATE (CRUSHED LIMESTONE) ÖZDEM RLER MADENC L K SAN. VE T C. LTD. fit. KIZILMURAT MAH. 164 SOK. NO: 5/7 TARSUS, MERS N / TURKEY TEL : (90 324) FAX : (90 324) ORTAfi NAK. Nfi. TAAH. OTO. PETROL ÜRÜN. MADENC L K SAN. VE T C. LTD. fit. KÜLTÜR MAH. 223 SOK. SÜMER APT. NO: 9/1 MERS N / TURKEY TEL : (90 324) FAX : (90 324) ÖZ-ER NfiAAT TAAHHÜT NAKL YE PETROL TUR ZM SAN. VE T C. LTD. fit. SANAY S TES E/18 BLOK NO: 5 KAT: 2 MERS N / TURKEY TEL : (90 324) ÖZTAY NfiAAT TAAH. SAN. VE T C. LTD. fit. KÜLTÜR MAH. ATATÜRK CAD. NO: 124/3 MERS N / TURKEY TEL : (90 324) FAX : (90 324) T MUÇ N NAK. HAFR YAT T C. VE SAN. A.fi. H PODROM KARfiISI ADANA / TURKEY TEL : (90 322) FAX : (90 322) CANO ULLARI Nfi. TAAH. SAN. LTD. fit. KURTULUfi MAH. Z YAPAfiA BULVARI 9. SOK. NO: 8 BÜfiRA APT. ASMA KAT SEYHAN, ADANA / TURKEY TEL : (90 322) FAX : (90 322) CAC MLER NfiAAT VE T C. LTD. fit. GMK BULVARI ÇEL APT. KAT: 3 MERS N / TURKEY TEL : (90 324) FAX : (90 324) ALACA AKARYAKIT NAK. MADENC L K Nfi. SAN. VE T C. LTD. fit. fieh T SHAK MAH SOK. KAT: 1/5 TARSUS, MERS N / TURKEY TEL : (90 324) FAX : (90 324) MARBLE (MOSAIC) ÖZÇA LAR PETROL Nfi. MALZ. T C. VE SAN. LTD. fit. TERM NAL YANI N DE / TURKEY TEL : (90 388) FAX : (90 388) ARISOY MADEN SAN. T C. LTD. fit. DARBO AZ KASABASI ULUKIfiLA, N DE / TURKEY TEL : (90 388) KAYAD B HARF. MADEN TAR. NAK. AKARY. SAN. T C. LTD. fit. ACIPINAR MEVK ULUKIfiLA, N DE / TURKEY TEL : (90 532) DOLOMITE BUR-CAN MADENC L K TAAHHÜT NAKL YE, PETROL SANAY VE T C. LTD. fit. KÜLTÜR MAH SOK. HALE APT. KAT: 1/1 MERS N / TURKEY TEL : (90 324) FAX : (90 324) CLAY-TRASS ARISOY MADEN SAN. T C. LTD. fit. DARBO AZ KASABASI ULUKIfiLA, N DE / TURKEY TEL : (90 388) T MUÇ N NAK. HAFR YAT T C. VE SAN. A.fi H PODROM KARfiISI ADANA / TURKEY TEL : (90 322) FAX : (90 322) E. ÖZCAN ALTUNCU YIKANMIfi KUM ÇAKIL VE TIR NAK. TAAHHÜT filer ADANA YOLU N BAfi A.fi. KARfiISI N DE / TURKEY TEL : (90 388) BAUXITE DEM RELLER TARIM MADENC L K PET. SAN. VE T C. LTD. fit. ATATÜRK CAD. NO: 60 AYRANCI, KARAMAN / TURKEY TEL : (90 332) FAX : (90 332) CAM-SER MADENC L K SAN. VE T C. A.fi. BAHÇEL EVLER MAH. fiah N SOK. NO: 16/A BALIKES R / TURKEY TEL : (90 266) FAX : (90 266) Annual Report 121

124 OUR ISO 9000 CERTIFICATED SUPPLIERS FOR THE YEAR 2007 SAND EKER MADENC L K Nfi. NAK. OTO. HAYVANCILIK SAN. VE T C. LTD. fit. fielale CAD. FEVZ ÇAKMAK KARAKOLU KARfiISI TARSUS, MERS N / TURKEY TEL : (90 324) FAX : (90 324) BAYSALO LU NAK. MADEN HURDA KIRTAS YE OTOMOTIV AKARYAKIT SAN. VE. T C. LTD. fit. TARSUS-MERS N ORGAN ZE SANAY G R fi NO: 5 HUZURKENT TARSUS, MERS N / TURKEY TEL : (90 324) FAX : (90 324) DEN Z NfiAAT LTD. fit. GÜNDO DU MAH. Ç FÇ LER CAD. NO: 50 DEN Z PETROL MERS N / TURKEY TEL : (90 324) FAX : (90 324) ADK MADENC L K OTO. fi. MAK. PET. TUR. Nfi. MAK. TAH. NAK. GIDA. REK. SAN. T C. LTD. fit. ONUR MAH. 77. SOK. NO: 59 KAT: 1 SEYHAN, ADANA / TURKEY TEL : (90 322) KARSER MADENC L K NAK. Nfi. TH. HR. SAN. VE T C. LTD. fit. MAHMUTLU MAH. ZEYT NBEL SOK. NO: 1 KOZAN, ADANA / TURKEY TEL : (90 322) FAX : (90 322) CRUSHING OPERATIONS SFM ELEKTR K MAK NE OTOMASYON SAN. VE T C. LTD. fit. MAHMUD YE MAH. ZEYT NL BAHÇE CAD. METROPOL fi MRK. MERS N / TURKEY TEL : (90 324) FAX : (90 324) T MUÇ N NAK. HAFR YAT T C. VE SAN. A.fi. H PODROM KARfiISI ADANA / TURKEY TEL : (90 322) ASYA NAKL YAT VE DIfi T C. LTD. fit. MERS N YOLU ÜZER 10. KM ADANA / TURKEY TEL : (90 322) FAX : (90 322) SANER T CARET LTD. fit. G.M.K. BULVARI NO: 54 KARTEPE APT. 1/7 MERS N / TURKEY TEL : (90 324) INDUSTRIAL FACILITY OPERATIONS SFM ELEKTR K MAK NE OTOMASYON SAN. VE T C. LTD. fit. MAHMUD YE MAH. ZEYT NL BAHÇE CAD. METROPOL fi MRK. MERS N / TURKEY TEL : (90 324) FAX : (90 324) T MUÇ N NAK. HAFR YAT T C. VE SAN. A.fi. H PODROM KARfiISI ADANA / TURKEY TEL : (90 322) FAX : (90 322) ASYA NAKL YAT VE DIfi T CARET LTD. fit. MERS N YOLU ÜZER 10. KM ADANA / TURKEY TEL : (90 322) FAX : (90 322) CONSTRUCTION MACHINERY AND SERVICES T MUÇ N NAK. HAFR YAT T C. VE SAN. A.fi. H PODROM KARfiISI ADANA / TURKEY TEL : (90 322) FAX : (90 322) ASYA NAKL YAT VE DIfi T CARET LTD. fit. MERS N YOLU ÜZER 10.KM ADANA / TURKEY TEL : (90 322) FAX : (90 322) S BETON TAfi. Nfi. SAN. T C. LTD. fit. M. KEMAL MAH.. KARAO LANO LU CAD. NO: 102 SÖ ÜT APT. SKENDERUN, LINESAY / TURKEY TEL : (90 326) FAX : (90 326) PAPER BAG MANUFACTURING OYKA KA IT AMBALAJ SAN. VE T C.A.fi. CEYHAN YOLU ÜZER 12. KM PK: 312 ADANA / TURKEY TEL : (90 322) FAX : (90 322) (KRAFT) PAPER BAG FACILITY OPERATIONS OYKA KA IT AMBALAJ SAN. VE T C. A.fi. CEYHAN YOLU ÜZER 12.KM PK: 312 ADANA / TURKEY TEL : (90 322) FAX : (90 322) SANER T CARET LTD. fit. G.M.K. BULVARI NO: 54 KARTEPE APT. 1/7 MERS N / TURKEY TEL : (90 324) SFM ELEKTR K MAK NE OTOMASYON SAN. VE T C. LTD. fit. MAHMUD YE MAH. ZEYT NL BAHÇE CAD. METROPOL fi MRK. MERS N / TURKEY TEL : (90 324) FAX : (90 324) LOADING-UNLOADING SANER T CARET LTD. fit. G.M.K. BULVARI NO: 54 KARTEPE APT. 1/7 MERS N / TURKEY TEL : (90 324) FAX : (90 324) PACKAGING-FILLING-LOADING SFM ELEKTR K MAK NE OTOMASYON SAN. VE T C. LTD. fit. MAHMUD YE MAH. ZEYT NL BAHÇE CAD. METROPOL fi MRK. MERS N / TURKEY TEL : (90 324) FAX : (90 324) Annual Report

125 USTAO LU MÜTEAHH TL K-MET N USTAO LU Ç MSA KAYSER TES S YANI KAYSER / TURKEY TEL : (90 352) GSM : (90 532) CEMAH TUR ZM NfiAAT NAK. PET. ÜR. T C. VE SAN. LTD. fit. AHMET ERSOY CAD. ALACA fihani NO: 9 KAT: 7 MERS N / TURKEY TEL : (90 324) FAX : (90 324) SANER T CARET LTD. fit. G.M.K.BULVARI NO: 54 KARTEPE APT. 1/7 MERS N / TURKEY TEL : (90 324) GÖKHAN NfiAAT TAHM L TAHL YE T C. LTD. fit. ÇINARLI MAH. 5. SOK. C VAN fihani KAT: 4 NO: 9 ADANA / TURKEY TEL : (90 322) FAX : (90 322) QUARRY OPERATIONS T MUÇ N NAK. HAFR YAT T C. VE SAN. A.fi. H PODROM KARfiISI ADANA / TURKEY TEL : (90 322) FAX : (90 322) PETROCOKE TCP PETCOKE CORP AVENUE OF THE AMERICAS. NEWYORK, USA TEL : FAX : CAPEX INDUSTRIES L M TED MARNE HAUSE 24 MOUNT EPHRA M ROAD TUNBR DGE WELLS KENT TN1 1ED TEL : FAX : BAMAK KATI YAKIT SAN. A.fi. ORGAN ZE SANAY BÖLGES SARI SEK, SKENDERUN / TURKEY TEL : (90 326) FAX : (90 326) RTEMCEM LTD. fit. SEDAT S MAV SOKAK. 21/A ÇANKAYA, ANKARA / TURKEY TEL : (90 312) FAX : (90 312) ATAKAfi T C. VE NAK. LTD. fit. ÇAY MAH. SAH L CAD. NO: 24/1 SKENDERUN / TURKEY TEL : (90 326) FAX : (90 326) Ç MSA KAYSER LIMESTONE QUARRY OPERATIONS T MUÇ NLER MADENC L K PETROL ÜRÜNLER Nfi. TAAH. SAN. VE T C. A.fi. TALATPAfiA MAH. ULUBATLI CAD. NO: 13 ARGINCIK, KAYSER / TURKEY TEL : (90 352) FAX : (90 352) TRASS SELLERS T MUÇ NLER MADENC L K PETROL ÜRÜNLER Nfi. TAAH. SAN. VE T C. A.fi. TALATPAfiA MAH. ULUBATLI CAD. NO: 13 ARGINCIK, KAYSER / TURKEY TEL : (90 352) FAX : (90 352) GYPSUM QUARRY OPERATIONS T MUÇ NLER MADENC L K PETROL ÜRÜNLER Nfi. TAAH. SAN. VE T C. A.fi. TALATPAfiA MAH. ULUBATLI CAD. NO: 13 ARGINCIK, KAYSER / TURKEY TEL : (90 352) FAX : (90 352) CLAY QUARRY OPERATIONS T MUÇ NLER MADENC L K PETROL ÜRÜNLER Nfi. TAAH. SAN. VE T C. A.fi. TALATPAfiA MAH. ULUBATLI CAD. NO: 13 ARGINCIK, KAYSER / TURKEY TEL : (90 352) FAX : (90 352) IGNIMBIRIT RESIDUE SELLERS K LTAfi NfiAAT KUM HAFR YAT LTD. fit. NÖNÜ BLV. GÖNÜL fi MRK. NO: 22/702 KAYSER / TURKEY TEL : (90 352) FAX : (90 352) TRANSPORTATION UYMAZ HAR. NAK. Nfi. TAH. TAfi. MAD. PETROL TAR. ÜR. BES. GIDA. ET VE ET ÜR. SAN. VE T C. LTD. fit. A IRNAS KASABASI ESENYURT CAD. NO: 4 MEL KGAZ, KAYSER / TURKEY TEL : (90 533) AR-AS NAKL YAT PETROL TIR GARAJI filetmes T C. SAN. LTD. fit. TARSUS YOLU ÜZER SERBEST BÖLGE KARfiISI MERS N / TURKEY TEL : (90 324) FAX : (90 324) GAR P LOJ ST K H ZMETLER LTD. fit. SMET NÖNÜ BULVARI TARSUS CAD. YILMAZ fihani NO: 68 MERS N / TURKEY TEL : (90 324) FAX : (90 324) S. S. PINARBAfiI MOTORLU TAfiIYICILAR KOOPERAT F HASTANE CAD. BELED YE DÜKKANLARI NO: 38 PINARBASI, KAYSER / TURKEY TEL : (90 352) FAX : (90 352) Annual Report 123

126 OUR ISO 9000 CERTIFICATED SUPPLIERS FOR THE YEAR 2007 ÖZ-TRANS ULUSL. NAK. Nfi. TH. HR. SAN. T C. LTD. fit. SAVAfi MAH. fieh T PAM R CAD. SAL M fihani KAT: 3 SKENDERUN / TURKEY TEL : (90 326) FAX : (90 326) PACKAGING SFM MÜHEND SL K TEKN K H ZMETLER NAK. TEM. YEM. SANAY VE T C. LTD. fit. ST KLAL CAD. T.S.G. L SES KAR. MAHMUT SUD APT. A BLOK KAT: 6 NO: 15 MERS N / TURKEY TEL : (90 324) FAX : (90 324) SECURITY SERVICES METTEK GÜVENL K ORG. A.fi. MET GROUP PLAZA BARBAROS MAH. YAVUZ SEL M CAD. NO: 21 YEN SAHRA, STANBUL / TURKEY TEL : (90 216) FAX : (90 216) CRUSHING OPERATIONS MERT CEM TEKN K H ZMETLER NAK. TEM. YEM. SAN. VE T C. LTD. fit. ST KLAL CAD. T.S.G. L SES KAR. MAHMUT SUD APT. A BLOK KAT: 6 NO: 15 MERS N / TURKEY TEL : (90 324) FAX : (90 324) CATERING SERVICES KAR ZMA RESTAURANT ERC YES KAYAK MERKEZ H SARCIK, KAYSER / TURKEY TEL : (90 533) CLEANING SERVICES BURAK TEM ZL K HACIMANSUR MAH. KARAKUfi SOK. ERAS fi MERKEZ NO: 5/412 KAYSER / TURKEY TEL : (90 352) FAX : (90 352) Ç MSA ESK fieh R LIMESTONE-CLAY-INTERNAL TRANSPORTATION SERVICES ÖZÇ FTAY Nfi. MAD. TUR. SAN. T C. A.fi. A. ÖVEÇLER 77. SOK. NO: 18/8 D KMEN, ANKARA / TURKEY TEL : (90 312) FAX : (90 312) TRASS CENG Z MADENC L K PEHL VAN SOK. NO: 1 KAT: 2 BOZÜYÜK, B LEC K / TURKEY TEL : (90 228) FAX : (90 228) ÇINAR MADENC L K ESK fieh R CAD. NO: 7 SÖ ÜT, B LEC K / TURKEY TEL : (90 222) FAX : (90 222) BAUXITE BOZKAYA NfiAAT GIDA SAN. VE T C. A.fi. KUMLUK CAD. NO: 1 BOZÜYÜK, B LEC K / TURKEY TEL : (90 228) FAX : (90 228) BEYKROM MADENC L K T C. VE SAN. A.fi. U UR MUMCU CAD. NO: 61/2 GOP, ANKARA / TURKEY TEL : (90 312) FAX : (90 312) IRON ORE fienka YAPI SANAY T C. A.fi. MEfiRUT YET CAD. NO: 46/12 ANKARA / TURKEY TEL : (90 312) FAX : (90 312) ÖZÇ FTAY Nfi. MAD. TAHH. TURZ. SAN. VE T C. A.fi A. ÖVEÇLER 77. SOK. NO: 18/8 D KMEN, ANKARA / TURKEY TEL : (90 312) FAX : (90 312) GYPSUM AKYÜZ MADENC L K Nfi. ORM. ÜRÜN. Ç VE DIfi T C. LTD. fit. GÜFTE SOKAK KAVAKLIDERE, ANKARA / TURKEY TEL : (90 312) FAX : (90 312) GYPSUM (CRUSHED) ECZACIBAfiI ALÇI KIRI I ESK fieh R KARAYOLU ÜZER 4. KM. BOZÜYÜK, B LEC K / TURKEY TEL : (90 228) FAX : (90 228) ESV T ALÇI KIRI I OSB. 9. CAD. NO: 48 ESK fieh R / TURKEY TEL : (90 222) FAX : (90 222) COAL (Local Lignite) G.L.. TUNÇB LEK KÖMÜR filetmeler TAVfiANLI, KÜTAHYA / TURKEY TEL : (90 274) FAX : (90 274) TK. EGE L NY TLER filetmes PK: 6 SOMA, MAN SA / TURKEY TEL : (90 236) FAX : (90 236) CENG Z MAD. NAKL. VE Nfi. SAN. LTD. fit. PEHL VAN SOK. NO: 1 KAT: 2 BOZÜYÜK, B LEC K / TURKEY TEL : (90 228) FAX : (90 228) COAL (Imported Dust) TORBAPAK MAD. SAN. T C. A.fi. ÇERKEfiL KÖYÜ ÖREN MEVK D LOVASI, GEBZE / TURKEY TEL : (90 212) FAX : (90 212) Annual Report

127 CENG Z MAD. NAKL. VE Nfi. SAN. LTD. fit. PEHL VAN SOK. NO: 1 KAT: 2 BOZÜYÜK, B LEC K / TURKEY TEL : (90 228) FAX : (90 228) ODAK NfiAAT MÜH. MAD. SAN. T C. A.fi. fieh T MEHMET FAT H ÖNGÜL SOK. NO: 6 KOZYATA I, STANBUL / TURKEY TEL : (90 216) CEMENT CHEMICAL ADDITIVES GRACE A.fi. ST. K MYA SAN. O.S.B. E/8 BLOK STANBUL / TURKEY TEL : (90 216) FAX : (90 216) KATSAN K MYA SAN. LTD. fit. fiafimaz S TES A BLOK CEMALBEY fihani KAT: 5 NO: 21 KOZYATA I, STANBUL / TURKEY TEL : (90 216) FAX : (90 216) CHRYSO-KAT KATKI MALZEMELER SAN. VE T C. A.fi. AfiURO LU DERES KUYULAR MEVK SANAY CAD. NO: 26 GEBZE / TURKEY TEL : (90 262) FAX : (90 262) KRAFT BAG MANUFACTURING OYKA KA IT AMBALAJ CEYHAN YOLU 12. KM. ADANA / TURKEY TEL : (90 322) FAX : (90 322) CALIBRATION KALMET LTD. fit. SIRAM EfiELER MAH. KANARYA CAD. NO:18 BURSA / TURKEY TEL : (90 224) FAX : (90 224) TSE NECAT BEY CAD. NO: 112 ANKARA / TURKEY TEL : (90 312) FAX : (90 312) SECURITY SERVICES MET GRUP GÜVENL K ORG. A.fi. MAH. YAVUZ SEL M CAD. NO: 21 YEN SAHRA, STANBUL / TURKEY TEL : (90 216) FAX : (90 216) PERSONNEL TRANSPORTATION SMA L AYAZ SEYALINES filetmes ZAFER MAH. CAM SOK. 13 ESK fieh R / TURKEY TEL : (90 222) FAX : (90 222) CLEANING SERVICES ISS TES S YÖNET M H ZMETLER A.fi. KORE fieh TLER CAD. M THAT ULUÜNLÜBEY SOK. NO: 23 Z NC RL KUYU, STANBUL / TURKEY TEL : (90 212) FAX : (90 212) CATERING SERVICES ÖMÜR YEMEK A.fi. SARAYCIK CAD. NO: 6 BOZÜYÜK, B LEC K / TURKEY TEL : (90 228) FAX : (90 228) DISPACHTING LOADING SERVICES CEMAH TUR ZM Nfi. NAK. AKAR. ÜRÜN. SAN. T C. LTD. fit. A.MENDERES BLV SOK. SÖZMEN APT. C BLOK NO: 7 MERS N / TURKEY TEL : (90 324) FAX : (90 324) MECHANICAL MAINTENANCE SERVICES B LG N MAK NACI BELED YE fi HANI NO: 102 BOZÜYÜK, B LEC K / TURKEY TEL : (90 228) FAX : (90 228) Ç MSA N DE GYPSUM ARISOY LOJ ST K H Z. MAD. T C. LTD. fit. DARBO AZ KASABASI ULUKIfiLA, N DE / TURKEY TEL : (90 324) GSM : (90 533) NKAYA MADENC L K SAN. VE LTD. fit. YOLGEÇEN MAH. T. CEMAL BER KEL BLV. NO: 579 ADANA / TURKEY TEL : (90 322) FAX : (90 322) CLAY - TRASS - MARL (LIMESTONE) E. ÖZCAN ALTUNCU YIKANMIfi KUM NAK. TAH. fil. ADANA YOLU N BAfi A.fi. KARfiISI N DE / TURKEY TEL : (90 388) FAX : (90 388) BEST M BETON TES. T C. VE SAN. LTD. fit. KAYSER YOLU 1. KM N DE / TURKEY TEL : (90 388) FAX : (90 388) fiah NER Nfi. TUR. NAK. LTD. fit. STADYUM CAD. NO: 16 N DE / TURKEY TEL : (90 388) FAX : (90 388) Annual Report 125

128 OUR ISO 9000 CERTIFICATED SUPPLIERS FOR THE YEAR 2007 D NÇ HAFR YAT - SEYF D NÇ ÖNADIM PASAJI NO: 18 N DE / TURKEY TEL : (90 388) FAX : (90 388) MGE Nfi. SAN. T C. LTD. fit. MESUD YE MAH CAD. NO: 66/A MERS N / TURKEY TEL : (90 324) FAX : (90 324) ERKA ERC YES Nfi. NAK. SAN. VE T C. LTD. fit. SANAY S TES E/18 BLOK NO: 10 MERS N / TURKEY TEL : (90 324) FAX : (90 324) ASYA NAKL YAT DIfi T C. LTD. fit. MERS N YOLU ÜZER 10. KM ADANA / TURKEY TEL : (90 322) FAX : (90 322) T MUÇ N NAKL YAT HAFR YAT VE T C. A.fi. H PODROM KARfiISI ADANA / TURKEY TEL : (90 322) FAX : (90 322) PACKAGING KARDEfiLER MÜT. LTD. fit. ELHACI MAHMUT CAD. AKDO AN fi MRK. KAT: 2 NO: 14 N DE / TURKEY TEL : (90 388) FAX : (90 388) CEMAH TUR. Nfi. NAK. PET. ÜRÜN. T C. VE SAN. LTD. fit. PALM YE MAH. ADNAN MENDERES BLV SOK. SÜZMEN APT. MERS N / TURKEY TEL : (90 324) FAX : (90 324) GÖKHAN Nfi. TAHM L TAHL. T C. LTD. fit. ÇINARLI MAH. 5. SOK. C VAN fi HANI NO: 9 ADANA / TURKEY TEL : (90 322) FAX : (90 322) SFM MÜH. TEK. H Z. T C. LTD. fit. CAM fier F MAH SOK. TUNCAY fi HANI KAT: 4 NO: 7 MERS N / TURKEY TEL : (90 324) FAX : (90 324) MAV ANADOLU Nfi. T C. LTD. fit. ATATÜRK MAH. 57. SOK. EM N APT. MERS N / TURKEY TEL : (90 324) FAX : (90 324) PERSONNEL TRANSPORTATION ERY T NAK. Nfi. TUR. OTO T C. LTD. fit. Ç MENTO FABR KASI CAM YANI N DE / TURKEY TEL : (90 388) SS. 57 NOLU TAfiIYICILAR KOOP. fi. SOYER BLV. ÇAVDARO LU APT. NO: 1 N DE / TURKEY TEL : (90 388) FAX : (90 388) READY-MIXED CONCRETE AGGREGATE - SAND CÖMERTLER Nfi. SAN. VE T C. LTD. fit. SOMUNCUO LU PSJ. KAT: 2 AKSARAY / TURKEY TEL : (90 382) FAX : (90 382) NCEÖZ NAK. TUR. OTO. GIDA. SAN. VE T C. LTD. fit. E. KAPU MAH. ATATÜRK BLV. ASLAN APT. ALTI NO: 80/A AKSARAY / TURKEY TEL : (90 382) FAX : (90 382) DÜDEN MAD. Nfi. NAK. LTD. fit. DALMAZ MAH. M. EVRAN CAD DO A APT. NO: 29 ERE L, KONYA / TURKEY TEL : (90 332) FAX : (90 332) YUNUS Nfi. TUR. VE T C. A.fi. SEK ÇEfiME MAH. fiamkapi CAD. NO: 14 KARAMAN / TURKEY TEL : (90 338) FAX : (90 338) BRAH M CAVGA Nfi. SAN. T C. LTD. fit. M NAREC K MAH. ANKARA CAD. SANCAK fi HANI KAT: 4 NO: 24 AKSARAY / TURKEY TEL : (90 382) FAX : (90 382) KÜÇÜKER Nfi. TAH. MAD. SAN. T C. LTD. fit. MARET MAH. MEHMET BEY. CAD. NO: 19/B KARAMAN / TURKEY TEL : (90 338) FAX : (90 338) OTAN Nfi. NAK. PET. TUR. SAN. VE T C. LTD. fit. NALÇACI CAD. NO: 100 KONYA / TURKEY TEL : (90 332) FAX : (90 332) AK HAZIR BETON Nfi. MAD. NAK. PET. SAN. T C. LTD. fit. E. SARAY CAD. SAFA fi HANI 4/7 AKSARAY / TURKEY TEL : (90 382) FAX : (90 382) ÖZCEYLAN PET. Z RA ÜRÜN. SAN. T C. LTD. fit. F. ÇAKMAK MAH. BOZCA MAHMUT YAYLASI ESK L, AKSARAY / TURKEY TEL : (90 382) FAX : (90 324) Ç MSA ANKARA TRASS KAYAD B MADENC L K TAfi. Nfi. PET. ÜRÜN. NAK. VE T C. LTD. fit. SMETPAfiA MAH. ÜN SOK. NO: 4/3 ELMADA, ANKARA / TURKEY TEL : (90 312) FAX : (90 312) Annual Report

129 GYPSUM DÖNMEZ T CARET KAM L DÖNMEZ HURDACILAR S TES E/4 BLOK NO: 603 VED K, ANKARA / TURKEY TEL : (90 312) PACKAGING HAV N TEKST L Nfi. TAAH. LTD. fit. KAKLIK KASABASI HONAZ, DEN ZL / TURKEY TEL : (90 532) FAX : (90 258) CATERING SERVICES LÜKS GIDA SAN. TUR. Nfi. TEKS. OTO NAK. T CARET VED K ORGAN ZE SAN. BÖLGES HAS EMEK S TES 22 CAD. 664 SOK. NO: 85 OST M, ANKARA / TURKEY TEL : (90 312) FAX : (90 312) PERSONNEL TRANSPORTATION BAfiARAN GIDA TEM. TURZ. TAfiIMA fieh T RAFET SEVER CAD. 119/B ULUBEY, ANKARA / TURKEY TEL : (90 312) JSP fiah N HARF YAT MUSTAFA fiah N Y. PEÇENEK KÖYÜ ALTINDA, ANKARA / TURKEY TEL : (90 542) TRANSPORTATION ÖNDER KUM TCDD GÜMRÜKLÜ AMB. MÜDÜRLÜ Ü SAHA Ç BEH ÇBEY, ANKARA / TURKEY TEL : (90 312) FAX : (90 312) LABORATORY EQUIPMENT LDAM K MYA 58 SOK. 18 OST M, ANKARA / TURKEY TEL : (90 312) FAX : (90 312) ARMA CEVAT DÜNDAR CAD. KAVACIKLI fi MERKEZ NO: 17/5 OST M, ANKARA / TURKEY TEL : (90 312) FAX : (90 312) KOÇ NTOK LAB. MALZEMELER T C. VE SAN. A.fi. ANADOLU BULVARI 2 CAD. ATB fi MERK. MACUNKÖY, ANKARA / TURKEY TEL : (90 312) FAX : (90 312) GASOLINE - DIESEL BORA PETROL T C SAN. LTD. fit. 30 KM. HASANO LAN, ANKARA / TURKEY TEL : (90 312) FAX : (90 312) LIMESTONE ERDEM K REÇ MESTAN SOKAK NO: 5/A ETL K, ANKARA / TURKEY TEL : (90 312) FAX : (90 312) RENT A CAR ANATOLIA RENT A CAR C BR L AHMAD TUNALI H LM CAD. 65/35 KAVAKLIDERE, ANKARA / TURKEY TEL : (90 312) FAX : (90 312) Annual Report 127

130 ABROAD SUPPLY POINT AND TELEPHONE NUMBERS Çimsa Spain Çimsa Cementos Espãna S.A.U. Carretera de la Esclusa, s/n Dársena del Batán Norte Puerto de Sevilla Sevilla, SPAIN Tel: Fax: Çimsa Germany CSN Cement Sales North GmbH Office Nesserlander Str. 5 - D Emden, GERMANY Tel: Fax: /22 Terminal Julianahaven, Westlob 2 NL-9979 Emshaven, NETHERLANDS Tel: Fax: [email protected] Çimsa Romania Cimsarom Marketing Si Distributie Srl. Bd. Mamamia, Office Nr.5, Nr , ET. 4 Constanta, ROMANIA Tel/Fax: [email protected] Çimsa Turkish Republic of Northern Cyprus Çimsa Cement Free Zone Ltd. Çimsa Head Office Tel : (90 216) Fax : (90 216) Adress : Sarkuysan-Ak fl Merkezi S Blok Altunizade stanbul - Turkey [email protected] Çimsa Mersin Tel : (90 324) (Pbx) Fax : (90 324) [email protected] Çimsa Kayseri Tel : (90 352) (90 352) Fax : (90 352) [email protected] Çimsa Eskiflehir Tel : (90 222) Fax : (90 222) [email protected] Çimsa Ni de Tel : (90 388) Fax : (90 388) [email protected] Çimsa Ankara Tel : (90 312) Fax : (90 312) [email protected] Çimsa Malatya Tel : (90 422) Fax : (90 422) [email protected] Serbest Liman Magosa, TRNC Tel: Fax: [email protected] 128 Annual Report

131

132 K s kl Cad. No: 4, Sarkuysan-Ak fl Merkezi, S Blok Altunizade, Istanbul, Turkey Tel: +90 (216) Fax: +90 (216)