TORUNLAR GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş.

CONVENIENCE TRANSLATION INTO ENGLISH OF CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2011 TOGETHER WITH INDEPENDENT AUDITOR S REPORT (ORIGINALLY ISSUED IN TURKISH)

INDEPENDENT AUDITOR S REPORT To the Board of Directors of Torunlar Gayrimenkul Yatırım Ortaklığı A.Ş. 1. We have audited the accompanying consolidated financial statements of Torunlar Gayrimenkul Yatırım Ortaklığı A.Ş. and its subsidiaries (collectively referred to as the Group ) which comprise the consolidated balance sheet as of 31 December 2011 and the consolidated statements of compehensive income, changes in equity and cash flows for the year then ended and a summary of significant accounting policies and other explanatory notes. Management s Responsibility for the Financial Statements 2. The Group management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with the financial reporting standards issued by the Capital Markets Board ( CMB ). This responsibility includes: designing, implementing and maintaining internal control relevant to the proper preparation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates tes that are reasonable in the circumstances. Auditor s Responsibility 3. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with the auditing standards issued by the CMB. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance on whether the consolidated financial statements are free from material misstatement. An audit involves performing audit procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Group s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Başaran Nas Bağımsız Denetim ve Serbest Muhasebeci Mali Müşavirlik A.Ş. a member of PricewaterhouseCoopers Turkey BJK Plaza, Süleyman Seba Caddesi No:48 B Blok Kat 9 Akaretler Beşiktaş 34357 İstanbul-Turkey www.pwc.com/tr Telephone: +90 (212) 326 6060 Facsimile: +90 (212) 326 6050

INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTENT PAGE CONSOLIDATED BALANCE SHEETS... 1 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME... 2 CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY... 3 CONSOLIDATED STATEMENTS OF CASH FLOW... 4... 5-68 NOTE 1 COMPANY S ORGANISATION AND NATURE OF OPERATIONS... 5-8 NOTE 2 BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS... 8-29 NOTE 3 SEGMENT REPORTING... 29-30 NOTE 4 CASH AND CASH EQUIVALENTS... 31 NOTE 5 FINANCIAL LIABILITIES... 32-33 NOTE 6 OTHER FINANCIAL LIABILITIES... 34 NOTE 7 TRADE RECEIVABLES AND PAYABLES... 34-35 NOTE 8 INVESTMENT PROPERTIES... 36-37 NOTE 9 INVENTORIES... 38-39 NOTE 10 PROPERTY, PLANT AND EQUIPMENT... 39 NOTE 11 OTHER ASSETS AND LIABILITIES... 40 NOTE 12 INVESTMENTS IN ASSOCIATES... 41 NOTE 13 GOODWILL... 41 NOTE 14 COMMITMENTS, CONTINGENT ASSETS AND LIABILITIES... 42-43 NOTE 15 EQUITY... 43-45 NOTE 16 REVENUES AND COST OF REVENUE... 46 NOTE 17 MARKETING, SELLING AND DISTRIBUTION EXPENSES, GENERAL ADMINISTRATIVE EXPENSES... 47 NOTE 18 EXPENSES BY NATURE... 48 NOTE 19 OTHER INCOME/EXPENSES... 48 NOTE 20 FINANCIAL INCOME/EXPENSES... 49 NOTE 21 EARNINGS PER SHARE... 49 NOTE 22 TAX ASSETS AND LIABILITIES... 50 NOTE 23 BALANCES AND TRANSACTIONS WITH RELATED PARTIES... 50-52 NOTE 24 FINANCIAL RISK MANAGEMENT... 52-64 NOTE 25 FINANCIAL INSTRUMENTS... 64-65 NOTE 26 SUBSEQUENT EVENTS... 65-66 NOTE 27 OTHER ISSUES THAT SIGNIFICANTLY AFFECT THE FINANCIAL STATEMENTS OR OTHER ISSUES REQUIRED FOR THE CLEAR UNDERSTANDING OF FINANCIAL STATEMENTS... 66 NOTE 28 ADDITIONAL NOTES: CONTROL OF COMPLIANCE WITH THE PORTFOLIO LIMITATIONS... 66-68

CONSOLIDATED BALANCE SHEETS AND 2010 ASSETS 31 December 31 December Notes 2011 2010 Current assets 841,271 572,789 Cash and cash equivalents 4 597,388 438,664 Financial investments 5 58,197 - Trade receivables 7 71,081 49,706 Due from related parties 23 3,307 35,417 Other trade receivables 7 67,774 14,289 Inventories 9 100,805 43,061 Advances given 11 9,742 1,759 Other current assets 11 4,058 39,599 Non-current assets 3,102,280 2,631,050 Financial investments 5-29,459 Trade receivables 7 60,079 4,729 Advances given 11 108,063 61,750 Inventories 9 262,406 6,992 Investments in associates 12 164,189 125,458 Investment properties 8 2,457,490 2,388,865 Tangible assets 10 874 1,115 Intangible assets 86 82 Other non-current assets 11 49,093 12,600 Total assets 3,943,551 3,203,839 LIABILITIES AND EQUITY Current liabilities 388,394 282,544 Financial liabilities 5 289,143 231,141 Finance lease liabilities - 20 Other financial liabilities 6 1,313 3,877 Advances received 11 52,383 3,110 Trade payables 7 38,864 34,536 Due to related parties 23 6,803 3,501 Other trade payables 7 32,061 31,035 Current income taxes payable 409 - Other current liabilities 11 6,282 9,860 Non-current liabilities 1,022,251 552,212 Financial liabilities 5 811,373 552,122 Advances received 11 210,785 - Provision for employment termination benefits 85 90 Other non-current liabilities 11 8 - Total equity 2,532,906 2,369,083 Share capital 15 224,000 224,000 Share premium 15 301,770 301,770 Restricted reserves 15 3,947 3,127 Treasury shares 15 (836) - Retained earnings 15 1,826,713 1,625,941 Net profit of the year 15 177,312 214,245 Total liabilities and equity 3,943,551 3,203,839 Consolidated financial statements as of 31 December 2011 were authorized for issue by Assistant General Manager İsmail Kazanç and Accounting Manager Lütfü Vardı on 5 April 2012 on behalf of Board of Directors. The accompanying notes form an integral part of these consolidated financial statements. 1

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED 31 DECEMBER 2011 AND 2010 1 January- 1 January- Notes Revenues 16 162,909 232,928 Cost of revenues (-) 16 (62,754) (152,910) Gross profit 100,155 80,018 General administrative expenses (-) 17 (13,777) (23,498) Marketing, selling and distribution expenses (-) 17 (10,738) (5,542) Net gain from fair value adjustments on investment properties 19 182,534 166,660 Other income 19 1,747 540 Other expenses (-) 19 (7,333) (1,069) Operating profit 252,588 217,109 Share of profit of associates accounted under equity method 12 45,227 14,725 Financial income 20 52,203 23,077 Financial expenses (-) 20 (170,905) (39,392) Profit before tax from continuing operations 179,113 215,519 Tax expense from continuing operations (-) 22 (1,801) (1,274) Profit for the year from continuing operations 177,312 214,245 Other comprehensive income - - Total comprehensive income 177,312 214,245 Earnings per share (in full TL) 21 0,79 1,16 The accompanying notes form an integral part of these consolidated financial statements. 2

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED 1 JANUARY - 31 DECEMBER 2011 AND 2010 Share Treasury Share Restricted Retained Net income Total capital shares premium reserves earnings for the year equity 1 December 2010 176,100 - - 3,127 1,090,300 535,641 1,805,168 Transfers - - - - 535,641 (535,641) - Capital contributions 47,900-301,770 - - - 349,670 Total comprehensive income - - - - - 214,245 214,245 31 December 2010 224,000-301,770 3,127 1,625,941 214,245 2,369,083 1 January 2011 224,000-301,770 3,127 1,625,941 214,245 2,369,083 Transfers - - - 820 213,425 (214,245) - Acquisition of treasury shares - (836) - - - - (836) Dividend distribution - - - - (12,653) - (12,653) Total comprehensive income - - - - - 177,312 177,312 31 December 2011 224,000 (836) 301,770 3,947 1,826,713 177,312 2,532,906 The accompanying notes form an integral part of these consolidated financial statements. 3

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEARS ENDED 1 JANUARY - 31 DECEMBER 2011 AND 2010 Cash flows from operating activities: 4 1 January - 1 January - Notes Total comprehensive income 177,312 214,245 Adjustments to reconcile net cash generated from operating activities to income before tax: Taxation 1,801 1,274 Net gain from fair value adjustment on investment properties 8,19 (182,534) (166,660) Unrealised foreign exchange losses 126,481 4,804 Interest income 20 (49,639) (18,233) Interest expense 20 48,305 39,208 Share of profit of associates accounted under equity method 12 (45,227) (14,725) Provision expense for doubtful receivables 7 422 85 Loss on derivative financial instruments (2,564) (969) Depreciation 18 291 183 Provision for employment termination benefits (5) 85 Goodwill transferred to income statement 13-8,250 Other financial income / (expenses) 20 - (129) Net cash before changes in assets and liabilities: 74,643 67,418 Changes in working capital: Change in trade receivables (109,257) 8,738 Change in receivables from related parties 32,110 18,879 Change in inventories (80,381) 49,879 Advances given (54,296) (61,750) Change in trade payables 1,006 22,423 Change in payables to related parties 3,302 3,494 Advances received 260,058 (61,923) Change in other assets (952) (19,444) Change in other liabilities (3,570) 5,499 Taxes paid (1,392) (833) Net cash generated from operating activities 121,271 32,380 Purchase of investment properties (107,699) (131,682) Disposal of investment properties 8-5,907 Purchase of tangible assets 10 (16) (874) Purchase of intangible assets (38) (98) Dividends received from associates 12 6,496 4,745 Net cash used in investing activities (101,257) (122,002) Increase in financial investment (28,738) (29,459) Interest paid 1,257 (26,978) Increase in bank borrowings 575,540 281,031 Bank borrowings paid (399,047) (120,919) Dividend distribution (12,653) - Acquisition of treasury shares (836) - Increase in due to related parties - 1,982 Capital increase and share premium - 349,670 Net cash generated from financing activities 135,523 455,327 Net increase in cash and cash equivalents 155,537 365,705 Cash and cash equivalents at beginning of the year 4 438,664 72,639 Exchange losses on cash and cash equivalents 3,187 320 Blocked deposits - (121,447) Cash and cash equivalents at end of the period 4 597,388 317,217 The accompanying notes form an integral part of these consolidated financial statements.

NOTE 1 - COMPANY S ORGANISATION AND NATURE OF OPERATIONS Torunlar Gayrimenkul Yatırım Ortaklığı Anonim Şirketi ( Torunlar REIC or the Company ) has been incorporated on 20 September 1996, which was registered as Toray İnşaat Sanayi ve Ticaret A.Ş. in İstanbul, Turkey. With a change in the Articles of Association published on Trade Registry Gazette on 25 January 2008, the Company has been converted into Real Estate Investment Company ( REIC ) with the trade name Torunlar Gayrimenkul Yatırım Ortaklığı A.Ş. and was registered on 21 January 2008, the company s stocks have been traded at the Istanbul Stock Exchange since 21 October 2010. As of 31 December 2011, the total number of employees of Torunlar REIC, its Subsidiaries, Joint Ventures and Associates (together referred to as the Group ) is 105 (31 December 2010: 132). Total number of employees of Torunlar REIC is 79 (31 December 2010:34) and the main shareholders of Torunlar REIC are the Torun family members (Note 15). The Company is registered in İstanbul Trade Registry Office in Turkey in the below address: Rüzgarlıbahçe Mahallesi Selvi Çıkmazı Sokak No: 4 Beykoz 34805 İstanbul / Türkiye The Company s main scope of operation is to engage in written objectives and subjects stipulated in the Communique on real estate investment companies published by the Capital Markets Board of Turkey ( CMB ) such as investing in real estate, capital market instruments based on real estate, real estate projects and capital market instruments. Subsidiaries The Subsidiaries of Torunlar REIC operate in Turkey and the natures of their business are as follows (Note 2): Subsidiary Toray İnşaat Danış Yapı Adi Ortaklığı ( Toray Danış ) TRN Alışveriş Merkezleri Yatırım ve Yönetim A.Ş. ( TRN ) Nature of business Construction/Contracting Real Estate Project Development and Management Toray Danış The Subsidiary has been incorporated as an ordinary partnership between Torunlar REIC and Danış Yapı Madencilik Nakliyat Petrol Gıda Oto Tamiri ve Yedek Parça Sanayi ve Ticaret Ltd. Şti. on 9 October 2007, for the use of land situated in İstanbul Küçükçekmece Kayabaşı, which has been awarded by a tender of the Housing Development Administration of Turkey ( TOKİ ) to the ordinary partnership for the use of the land as the excavation molding area. The company s operation has been terminated and is in the process of liquidation. 5

NOTE 1 - COMPANY S ORGANISATION AND NATURE OF OPERATIONS (Continued) TRN In accordance with the Extraordinary General Assembly Meeting held on 9 March 2010, the Company has transferred Antalya Deepo Mall located in Antalya City, Centre County, Koyunlar Village which was unfavourable for it to retain in its investment portfolio due to its current zoning situation, to a newly incorporated subsidiary of the Company, TRN Alışveriş Merkezleri Yatırım ve Yönetim A.Ş. ( TRN ) by spin-off. Additionally, the immovables located in Antalya city Koyunlar village, which are not included in the shopping mall concept, however considered to be useful to maintain the conceptual integrity and to enable the implementation of additional projects for a future potential parcellation plan are also transferred to TRN. The incorporation of TRN was approved by İstanbul Trade Register as at 31 March 2010. Joint Ventures The joint ventures of Torunlar REIC operate in Turkey and the nature of their business, the business segment and joint venture partners are as follows (Note 2): Nature of Joint venture Joint venture business partner Torunlar Özyazıcı Real estate Özyazıcı İnşaat Elektrik, Makine, Proje Ortaklığı ( Torunlar Özyazıcı ) projects Müşavirlik ve Taah. Ltd. Şti. TTA Gayrimenkul Yatırım Geliştirme Shopping mall and Anaterra Gayrimenkul Yatırım ve Yönetim A.Ş.( TTA ) hotel project İnşaat ve Ticaret A.Ş. Torunlar Aşçıoğlu Kapıcıoğlu Real estate Aşçıoğlu İnşaat Taah. Turizm Proje Ortaklığı ( Torunlar Aşçıoğlu Kapıcıoğlu ) projects Ticaret A.Ş. Kapıcıoğlu İnşaat Sanayii ve Ticaret A.Ş. Torunlar Özyazıcı Torunlar Özyazıcı has been incorporated as an ordinary partnership with a joint venture agreement on 26 January 2009. The subject of the joint venture is to conduct construction and sales of the housing development project Nishistanbul in Yenibosna İstanbul. This project includes 63 offices, 585 residences and 52 shops in 4 blocks each with 17 floors. In accordance with the revenue sharing agreement signed between Torunlar Özyazıcı and land owner of the project, 31% of total project revenues will be distributed to the land owner and the remaining 69% portion will be shared between the joint venturers as 60% Torunlar REIC and 40% Özyazıcı İnşaat Elektrik, Makine, Müşavirlik ve Taah. Ltd. Şti.. After the completion of the project, it is planned to be liquidated within the year 2012. 6

NOTE 1 - COMPANY S ORGANISATION AND NATURE OF OPERATIONS (Continued) TTA TTA Gayrimenkul Yatırım ve Yönetim A.Ş. has been incorporated on 7 January 2010 following the win of the tender related to the old cigarette factory and its auxiliary buildings which are located in Samsun, İlkadım district, 205 lot, 2,8,9,10,11,12,13,14 parcels and 376 lot, 1 parcel and 377 lot, 5 parcel whose ownership is registered to Samsun Metropolitan Municipality. The project includes, by the approval of Samsun Cultural and Natural Heritage Protection Regional Committee; the renovation as shopping mall and/or hotel; constructing two storey underground car park and facilitating the right of operation to Samsun Metropolitan Municipality; operating for 30 years with a limited incorporeal right (permanent and individual usufruct right) on land registry by the same term and providing a certain share of the revenue of shopping mall and/or hotel to Samsun Metropolitan Municipality; delivering the project to Samsun Metropolitan Municipality at the end of the 30 year term. In August 2011, 450,000 shares which were previously owned by Turkmall Gayrimenkul Geliştirme Yönetim ve Yatırım A.Ş. and valued nominally as TL450,000 and 50,000 shares which were previously owned by Ahmet Demir and valued nominally as TL50,000 were transferred to Anaterra Gayrimenkul Yatırım İnşaat ve Ticaret A.Ş. After the transfer, the shareholding structure of TTA is 40% Torunlar GYO, 8% Torunlar Gıda Sanayi Ticaret A.Ş., 1% Aziz Torun, 1% Mehmet Torun and 50% Anaterra Gayrimenkul Yatırım İnşaat ve Ticaret A.Ş.. Torunlar Aşçıoğlu Kapıcıoğlu Project Partnership The joint venture group including the Company has won the tender regarding the income sharing project in exchange for the sale of the land on which Ali Sami Yen Stadium is located. The land is located on the land in Dikilitaş Neighborhood, Şişli District, İstanbul Province located in the Plate 58, Block 1199, Lot 384. The Project that will be applied on the land comprised touristic and commercial real estate developments as well as recreational area and the costs of construction are to be borne by Torunlar Aşçıoğlu Kapıcıoğlu Project Partnership. For this purpose, Torunlar Aşçıoğlu Kapıcıoğlu Project Partnership has been formed on 18 October 2010. The partnership shares are as follows: 65% Torunlar REIC, 35% Aşçıoğlu A.Ş. and 5% Kapıcıoğlu A.Ş.. An Income Sharing in Exchange for the Sale of Land contract has been signed with The Republic of Turkey Prime Ministry Housing Development Administration on 10 November 2010 in the scope of the mentioned Project. As of the preparation date of the financial statements, the project is at the licencing phase and construction has not commenced yet. Associates The Associates of Torunlar REIC are incorporated in Turkey and their primary operations and nature of businesses are stated below: Associate Yeni Gimat İşyerleri İşletmesi A.Ş. ( Yeni Gimat ) Netsel Turizm Yatırımları A.Ş. ( Netsel ) Nature of business Owner of Ankamall Shopping Mall and Crowne Plaza Hotel Management of Marmaris Marina 7

NOTE 1 - COMPANY S ORGANISATION AND NATURE OF OPERATIONS (Continued) Yeni Gimat Yeni Gimat has been incorporated by participation of 1,049 individual shareholders as founding members on 30 July 1999. The entity owns Ankamall Shopping Mall since 2006 and Ankara Crowne Plaza Hotel since 2007. The number of shareholders that is A group (registered) of Yeni Gimat is 907 as of 31 December 2010 (31 December 2010:927). While the Company owns 14.83% of Yeni Gimat shares and Torunlar family members also own another 5% of Yeni Gimat, as a result the Company has significant influence on Yeni Gimat and is also represented in the Board of Directors. The investment in Yeni Gimat is accounted for by equity method in the consolidated financial statements. Netsel Netsel has been incorporated by Net Turizm Ticaret and Sanayi A.Ş. and Yüksel İnşaat A.Ş. on 6 October 1987. The coastal property operated by Netsel, has been leased from Ministry of Culture and Tourism for 49 years on 22 December 1988. Net Turizm sold its shares to Marmara Bank on 1992 and Yüksel İnşaat sold its shares to Çukurova Group in 1994. Following the liquidation process of Marmara Bank, 44.60% of Netsel was sold to Torunlar REIC in accordance with share transfer agreements on 31 May 2005 and 7 June 2005 respectively and 55% of Netsel was transferred to Tek-Art Kalamış and Fenerbahçe Marmara Turizm Tesisleri A.Ş. (a subsidiary of Koç Holding A.Ş.) in accordance with share transfer agreement on 22 August 2005 as a privatisation transaction. The remaining 0.40% belongs to Torun family. NOTE 2 - BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS 2.1 Basis of preparation Financial reporting standards The Company and its Turkish subsidiaries maintain their books of account and prepare their statutory financial statements in accordance with accounting principles in the Turkish Commercial Code ( TCC ) and tax legislation. The Capital Markets Board ( CMB ) Communiqué Serial: XI, No: 29 Financial Reporting Standards in Capital Markets ( Communiqué Serial: XI, No: 29 ) provides principles and standards on the preparation and presentation of financial statements. The Communiqué is applicable commencing from the first interim financial statements prepared subsequent to 1 January 2008, and Communiqué Serial: XI, No: 25 The Capital Market Accounting Standards ( Communiqué Serial: XI, No: 25 ) is annulled by the application of this communiqué. As per this communiqué, the financial statements should be prepared in accordance with the International Financial Reporting Standards ( IAS/IFRS ) as endorsed by the European Union ( EU ). However, companies will apply IASs/IFRSs until the differences between the standards accepted by the European Union and the standards issued by International Accounting Standards Board ( IASB ) are announced by Turkish Accounting Standards Board ( TASB ). In this respect, Turkish Accounting / Financial Reporting Standards that are issued by TASB and are not controversial to the adopted standards shall be taken as a basis in the application. 8

NOTE 2 - BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (Continued) As the differences between the International Financial Reporting Standards ( IAS/IFRS ) as endorsed by the European Union and the Turkish Accounting/Financial Reporting Standards ( TAS/TFRS ) have not been declared as of the date of this report, the accompanying financial statements and notes are prepared in accordance with IAS/IFRS as declared in the Communiqué Serial: XI, No: 29 with the required formats announced by the CMB. The Group maintains their books of account and prepares their statutory financial statements ( Statutory Financial Statements ) in TL in accordance with the Turkish Commercial Code ( TCC ), tax legislation and the Uniform Chart of Accounts issued by the Ministry of Finance, accounting principles issued by the CMB for listed companies. These consolidated financial statements are based on the statutory records, which are maintained under historical cost conversion, with the required adjustments and reclassifications reflected for the purpose of fair presentation in accordance with the CMB Financial Reporting Standards The application of inflation accounting to adjust financial statements at the period of high inflation With the decision taken on 17 March 2005 numbered 11/367, the CMB has announced that, effective from 1 January 2005, the application of inflation accounting is no longer required for companies operating in Turkey. However for IFRS reporting purposes Turkey has been considered a hyperinflationary economy until 31 December 2005 and IAS 29 Financial Reporting in Hyperinflationary Economies issued by IASB has not been applied starting from 1 January 2006. Functional and presentation currency Items included in the financial statements of each of the Group s entities are measured using the currency of the primary economic environment in which the entity operates ( the functional currency ). The Group s functional and presentation currency is TL. Consolidation principles The consolidated financial statements include the accounts of the parent company, Torunlar REIC and its subsidiaries, joint ventures and associates on the basis set out in sections at the below. The financial statements of the companies included in the scope of consolidation are based on the statutory records which are maintained under historical cost conversion, with adjustments and reclassifications, for the purpose of fair presentations in accordance with CMB and application of uniform accounting policies and presentation. Subsidiaries Consolidated financial statements consist of financial statements of the Company, the Company s subsidiaries and joint ventures. Control is provided with influence on financial and operational policy in order to obtain economic benefit from enterprise benefit. 9

NOTE 2 - BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (Continued) Subsidiaries are entities over which the Group has the power to govern the financial and operating policies generally accompanying a shareholding of more than one half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date on which control ceases. The Company has the power to govern the financial and operating policies of its Subsidiary for the benefit of the Company through the power to exercise more than 50 % of the voting rights relating its shares in the Subsidiary. The Company consolidates its Subsidiary from the date of establishment of the Subsidiary by the Group and subsidiaries are excluded from the consolidation at the date on which control is lost. Where necessary, accounting policies for the Subsidiary can been changed to ensure consistency with the policies adopted by the Company. The balance sheet, statement of comprehensive income and the statement of cash flows of the Subsidiary are consolidated on a line-by-line basis. Intercompany transactions and balances between the Company and the Subsidiary are eliminated on consolidation. The cost of, and the dividends arising from, shares held by the Company in its Subsidiary are eliminated from equity and statement of comprehensive income for the year, respectively. The non-controlling shareholders share in the net assets and results of Subsidiaries for the year are separately classified as non-controlling interest in the consolidated balance sheets and statements of income. When the losses applicable to the non-controlling shareholders exceed the non-controlling interest in the equity of the subsidiary, the excess loss and the further losses applicable to the noncontrolling shareholders are charged against the non-controlling interest. % % Toray Danış - 99,99 TRN 99,99 99,99 Joint Ventures Joint Ventures are companies in respect of which there are contractual arrangements through which an economic activity is undertaken subject to joint control by the Company and one or more other parties. The Group exercises such joint control through the power to exercise voting rights relating to shares in the companies as a result of ownership interest directly and indirectly by itself. The Group s interest in Joint Ventures is accounted for by way of proportionate consolidation. According to this method, the Group includes its share of the assets, liabilities, income and expenses of each Joint Venture in the relevant components of the financial statements. Liabilities and expenses resulting from the assets controlled jointly are accounted according to their accrual basis. If the economic benefits related to the share of the Group from the revenue obtained from the usage or the sales of the assets of the enterprises subject to joint control are possible to flow to the Group and their amounts are reliably measurable, then the related share is recorded. 10

NOTE 2 - BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (Continued) Unrealized profits and losses resulting from the transactions between the Group and the Group s jointly controlled enterprises are eliminated in the share rate of the Group in the enterprises subject to joint management. As of 31 December 2011 and 2010 Torunlar REIC s share in the Joint Ventures is a follows: % % Torunlar Özyazıcı 60,00 60,00 TTA 40,00 40,00 Torunlar Aşçıoğlu Kapıcıoğlu 65,00 65,00 Torunlar Özyazıcı, TTA and Torunlar Aşçıoğlu Kapıcıoğlu joint ventures have been incorporated on 26 January 2009, 7 January 2010 and 18 October 2010, respectively. Transactions after this date have been consolidated by the Group. Current assets, non-current assets, current liabilities and net income of the Joint Ventures have been proportionally consolidated in the consolidated financial statements on a line by line basis. The summary of these amounts are shown below: Interest in Joint Ventures (*) Current assets 84,955 65,339 Non-current assets 276,195 53,553 Total assets 361,150 118,892 Current liabilities 72,299 22,546 Non-current liabilities 154,525 - Equity 134,326 96,346 Total liabilities and equity 361,150 118,892 Net income for the period 62,754 56,428 (*) Interest in joint venture represents the balances of the joint venture s stand-alone financial statements which is proportionately consolidated before the intercompany eliminations, reclassifications and adjustments. 11

NOTE 2 - BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (Continued) Associates Investments in Associates, over which the Group has significant influence, but which it does not control, are accounted for by the equity method of accounting. The Group s share of its associates post-acquisition profits or losses is recognised in the income statement, and its share of postacquisition movements in reserves is recognised in reserves. The cumulative post-acquisition movements are adjusted against the carrying amount of the investment. When the Group s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associate. Unrealised gains on transactions between the Group and its associates are eliminated to the extent of the Group s interest in the associates. Carrying amount in the date of termination of significant influence, presented with fair value if fair value after this date can be measured securely, otherwise, presented with cost value. Torunlar REIC s effective ownership interests in its associates as at 31 December 2011 and 2010 are as follows (%): % % Yeni Gimat 14,83 14,83 Netsel 44,60 44,60 Interest in associates on combined basis (*) Total assets 1,298,052 974,310 Total liabilities 236,961 171,416 Net income for the period 291,611 91,073 (*) These combined balances represent amounts presented in the separate financial statements of associates after adjustments for Group accounting policies but before the intercompany eliminations, Interest in Yeni Gimat Total assets 1,265,554 946,455 Total liabilities 227,405 165,026 Net income for the period 284,956 87,003 Interest in Netsel Total assets 32,498 27,855 Total liabilities 9,556 6,390 Net income for the period 6,655 4,070 12

NOTE 2 - BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (Continued) Offsetting Financial assets and liabilities are offset and the net amount reported in the consolidated balance sheet when there is a legally enforceable right to set-off the recognized amounts and there is an intention to settle on a net basis, or realize the asset and settle the liability simultaneously. Going concern The Group s consolidated financial statements are prepared under the going concern assumption. 2.2. Changes in accounting policies Material changes in accounting policies are corrected, retrospectively; by restating the prior periods consolidated financial statements. The Company has started to implement the bulletin of CMB serial XI, No.29 as of 1 January 2008 and has resubmitted the comparative financial information within this scope. The implementation of CMB Serial XI, No.29 bulletin has not caused important changes on the legal policies of the Company. Comparative information and reclassifications in the previous period s financial statements In order to enable consistent presentation of the financial status and performance trends, the consolidated financial statements of the Group are being prepared in comparison to the previous period. With the aim of providing coherence with the consolidated financial statements of the current period, the classifications to the comparative financial information have been made where appropriate. In this context, advances given amounting to TL1,716 which were previously classified as inventories in the consolidated balance sheet as of 31 December 2010 is classified other current assets and workin-progress amounting to TL2,337 related with Ali Sami Yen Project and uncompleted residences amounting to TL4,665 related with Korupark 3. Phase are classified under long term inventories. Changes in standards and interpretations Group applied the revised standards and interpretations that are relevant to its operations, published by International Accounting Standards Board (IASB) and International Accounting Standards Committee (IASC) and effective from 1 January 2011. Application of new or amended standards and interpretations effective for annual periods beginning on or after 1 January 2011: - IAS 32, (Amendment), Presentation of Financial Statements (effective for the annual reporting periods on or after 1 February 2010). - IFRIC 19, Extinguishing Financial Liabilities with Equity Instruments (effective for the annual reporting periods on or after 1 July 2010). 13

NOTE 2 - BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (Continued) - IFRIC 1, (Amendment) First-time Adoption of IFRS, (effective for the annual reporting periods on or after 1 July 2010). - IAS 24, (Revised), Related Party Disclosures (effective for the annual reporting periods on or after 1 January 2011. - IFRIC 14, (Amendment), Prepayments of a Minimum Funding Requirement (effective for the annual reporting periods on or after 1 January 2011). - In the content of development project of IFRS, 6 standards and 1 interpretation were amended in 2010 which are IFRS 1, IFRS 3, IFRS 7, IFRIC 27, IFRS 34, IFRIC 13. Amendments on standards and interpretations above are effective on 1 January 2011 and have no significant influence over consolidate financial statements. Standards, amendments and interpretations to existing standards that is not yet effective as of 31 December 2011: - IFRS 7 (Amendment), Financial Instruments: Disclosures (effective for the annual reporting periods on or after 1 July 2011). - IFRS 1 (Amendment), First-time Adoption of IFRS (effective for the annual reporting periods on or after 1 July 2011. - IAS 12 (Amendment), Income Tax (effective for the annual reporting periods on or after 1 January 2012. - IAS 1 (Amendment), Presentation of Financial Statements (effective for the annual reporting periods on or after 1 July 2012). 14

NOTE 2 - BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (Continued) - IAS 19 (Amendment), Employee Benefits (effective for the annual reporting periods on or after 1 January 2013). - IFRS 9, Financial Instruments (effective for the annual reporting periods on or after 1 January 2015). - IFRS 10, Consolidated Financial Statements (effective for the annual reporting periods on or after 1 January 2013). The Group will evaluate the influence of the above changes over the operations and implement after 1 January 2012 where applicable. 2.3. Restatement and errors in the Accounting Policies and Estimates Material changes in accounting policies and accounting estimates are corrected, retrospectively; by restating the prior periods consolidated financial statements. The effect of changes in accounting estimates affecting the current period is recognized in the current period; the effect of changes in accounting estimates affecting current and future periods is recognized in the current and future periods. There has not been any significant change in accounting estimates of the Group for the current period. 2.4. Summary of significant accounting policies The significant accounting policies followed in the preparation of the consolidated financial statements are summarised below: Cash and cash equivalents Cash and cash equivalents are carried at cost in the balance sheet. Cash and cash equivalents comprise cash in hand, bank deposits and highly liquid investments, whose maturity at the time of purchase is less than three months and conversion risk on value date is immaterial (Note 4). Related parties For the purpose of the consolidated financial statements, shareholders, key management personnel and Board members, in each case together with their families and companies controlled by or affiliated with them, Associates and Joint Ventures and companies controlled by the Torun Family are considered and referred to as related parties. 15

NOTE 2 - BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (Continued) Foreign currency transactions The foreign exchange transactions that take place during the period are translated into TL using the exchange rates on transaction dates of the operation dates. Foreign currency denominated monetary assets and liabilities are translated into TL with the exchange rates prevailing on the balance sheet dates. The foreign currency exchange gain and losses that were arisen by the exchange rate change based on monetary assets and liabilities were presented in the consolidated statement of income. Financial assets Classification The financial assets of the Group consist of receivables and cash and cash equivalents. Management determines the classification of its financial assets at initial recognition. a) Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for maturities greater than 12 months after the balance sheet date which are classified as non-current assets. Loans and receivables comprise trade and other receivables. Trade receivables generally consist of receivables from sales on credit terms based on preliminary sale agreements and rent receivables from shopping malls. b) Derivative financial instruments The Group has an interest rate swap transaction as of 31 December 2011. This derivative instrument provides an economic hedge of the Group s cash flow risks arising from its borrowings, however; instruments have been accounted under the Other financial liabilities account balance in the consolidated financial statements due to not including necessary documentation requirements in terms of risk accounting according to ISA 39 Recognition of financial instruments as of 31.12.2011. Recognition and measurement Regular purchases and sales of financial assets are recognised on the trade-date - the date on which the group commits to purchase or sell the asset. Investments are initially recognised at fair value plus transaction costs for all financial assets except for these that are carried at fair value through profit or loss. Financial assets carried at fair value through profit or losses are initially recognised at fair value, and transaction costs are expensed in the consolidated statement of comprehensive income. Financial assets are derecognised when the rights to receive cash flows from the investments have expired or have been transferred and the group has transferred substantially all risks and rewards of ownership. Available-for-sale financial assets and financial assets at fair value through profit or loss are subsequently carried at fair value. Loans and receivables are subsequently carried at amortised cost using the effective interest method. Derivative financial instruments are initially recognized at cost and subsequently re-measured at fair value. Unrealized gains and losses arising from the changes in the fair values of these instruments are accounted in the consolidated statement of comprehensive income. 16

NOTE 2 - BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (Continued) Derivatives which have positive fair value are recognised in assets, derivatives which have negative fair value are recognised in liabilities in the consolidated financial statements. Impairments related to trade receivables are explained in the accounting policies related to trade receivables. Trade receivables and payables Trade receivables which arise from providing with a product or service to a purchaser by the company, are recognized net of unaccrued financing income. Trade receivables of the Group are initially recognised at fair value and subsequently carried at amortised cost using the effective interest rate method. Short term receivables with no stated interest rate are measured at original invoice amount unless the effect of imputing interest is significant (Note 7). An impairment provision for trade receivables is established if there is objective evidence that the Group will not be able to collect all amounts due in accordance with the original agreement terms. The amount of the provision is the difference between the carrying amount and the recoverable amount, being the present value of all cash flows, including amounts recoverable from guarantees and collateral, discounted based on the original effective interest rate of the originated receivables at inception. If the amount of the impairment subsequently decreases due to an event occurring after the writedown, the release of the provision is reversed through other operating income. Trade payables consist of payables to suppliers for purchases of goods and services. Trade payables and other financial liabilites are accounted for at amortized cost. Payable amounts in the subsequent period of recorded payables from original invoice values of trade payables and other liabilities after unaccrued financial liabilities are calculated with discounted based on the original effective interest rate. Advances received Advances received comprise amounts received from customers who entered into preliminary sales contracts with the Group for its housing projects. Therefore, these amounts have been classified as short and long term based on the estimated delivery date of the underlying housing units.the advances received for other operational activities are classified as short-term and long-term according to nature and duration of advances. Financial liabilities and borrowing costs Borrowings are recognised initially at the proceeds received, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost using the effective yield method in consolidated financial statements. Borrowings are recognised initially at the proceeds received, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost using the effective yield method in consolidated financial statements. IAS 23, (Revised) Borrowing Costs IAS 23 (revised) requires an entity to capitalize borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset as part of the cost of that asset, removing the option of immediately expensing borrowing costs. The Group has applied allowed alternative treatment in accordance with the previous IAS 23 and IFRS 1 for periods before 1 January 2009 and started to apply IAS 23 revised for periods starting 1 January 2009. 17

NOTE 2 - BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (Continued) Financial leases The Group as the lessee Finance leases Finance leases are capitalised at the lease s commencement at the lower of the fair value of the leased property and the present value of the minimum lease payments. Each lease payment is allocated between the liability and finance charges so as to achieve a constant rate on the finance balance outstanding. The corresponding rental obligations, net of finance charges, are included in other long-term payables. The interest element of the finance cost is charged to the consolidated statement of comprehensive income over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. Equipment acquired via finance leases are installed in investment properties (elavators, escalators etc) and therefore considered an integral part of these investment properties. These investment properties are carried at fair value in the financial statements and therefore the cost of this equipment is not accounted for separately. Obligations under finance leases are accounted for under the Financial liabilities account balance on the balance sheet (Note 5). Operational leases Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the consolidated statement of comprehensive income on a straight-line basis over the period of the lease. The Group as the lessor Revenue includes rental income, and service charges and management charges from properties. Rental income from operating leases is recognised on a straight-line basis over the lease term. When the Group provides incentives to its tenants, the cost of incentives is recognised over the lease term, on a straight-line basis, as a reduction of rental income only when such incentives are for the acquisition of new tenants. Rent discounts in various forms granted to existing tenants are deducted from revenue in the period in which such discounts are given. Service and management charges are recognised in the accounting period in which the services are rendered (Note 16). Current and deferred income taxes The Company is exempt from corporate income taxes in accordance with paragraph d-4 of Article 5 of the Corporate Income Tax Law. In accordance with paragraph 6-a of Article 94 of the Income Tax Law, the earnings of the real estate investment trusts are subject to withholding taxes, with Council of Ministers decision No, 93/5148, the withholding rate is determined as "0", Therefore, the Company has no tax obligation over its earnings for the related period (Note 22). Both the subsidiary Toray Danış and the joint ventures; Torunlar Özyazıcı and Torunlar Aşçıoğlu Kapıcıoğlu are ordinary joint stock companies in legal form. Ordinary partnerships do not have a corporate income tax liability as separate legal entities. Tax is included to comprehensive income statement on the condition of not to be related with any transaction such as recognition of tax under equities. Otherwise, recognition of tax is made under equities together with related transaction. TRN which is subsidiary of the Group was founded consequent to a carve-out due to the inconvenience of Antalya Deepo to be in portfolio and; therefore the related real estates had been transferred to TRN. TRN, a joint stock company is subject to corporate income tax over its profit. 18

NOTE 2 - BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (Continued) Deferred income taxes are provided in full, using the liability method, on all temporary differences arising between the tax bases of assets and liabilities and their carrying values in the financial statements. Currently enacted tax rates are used to determine deferred income tax at the balance sheet date (Note 22). As the Company is exempt from corporate income taxes based on the current tax legislation, no deferred income tax asset or liability has been calculated on temporary taxable and deductible differences in these consolidated financial statements. In order to clear inconvenience related to Antalya Deepo Shopping Mall which is owned by subsidiary TRN, TRN s merger is planned with Torunlar REIC, therefore deferred tax is not calculated over the temporary timing difference between carried value and fair values of related investment properties. Employment termination benefits Provision for the employee termination benefits shows the present value of total liabilities resulting from retirement of personnels in the future for the company in accordance with Turkish Labor Law. Under the Turkish Labor Law, the Company is required to pay termination benefits to each employee who has completed at least one year of service and whose employment is terminated without due cause, is called up for military service, dies or who retires after completing 25 years of service (20 years for women) and achieves the retirement age (58 for women and 60 for men). Since the legislation was changed on 23 May 2002, there are certain transitional provisions relating to length of service prior to retirement. The amount payable consists of one month s salary limited to a maximum of 2,731.85 in full TL amount as of 31 December 2011 (31 December 2010: TL2,517). Provision is related to fair value of defined benefit plan calculated with the method of estimated liability. All actuarial profit and losses are accounted under consolidate comprehensive income statement. IFRS, requires actuarial valuation methods to be developed to estimate the enterprise s obligation for such benefits. The liability for this unfunded plan recognized in the balance sheet is the full present value of the defined benefit obligation at the end of the reporting period, calculated using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows from the retirement of its employees using the long term TL interest rates. The principal actuarial assumption is that the maximum liability will increase in line with inflation. Thus the effective discount rate applied represents the expected real interest rate after adjusting for the effects of future inflation. As the maximum liability amount is revised semi-annually by the authorities, the maximum amount of 2,805.04 in full TL which is effective from 1 January 2012 has been taken into consideration when calculating the liability (1 January 2011: TL 2,623.23). Provisions, contingent assets and liabilities Provisions are recognized when the Group has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate of the amount of the obligation can be made. Provisions are not recognized for future operating losses. 19

NOTE 2 - BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (Continued) Contingent assets or contingent obligations that arise from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group are not included in financial statements and are treated as contingent assets or liabilities (Note 14). Inventories Inventories are valued at the lower of cost or net realisable value. Inventories comprise of construction costs of housing units (completed and in-progress) and the cost of land used for to these housing projects. Land held for future development of housing projects are also classified as inventory. Cost elements included in inventory are purchase costs, conversion costs and other costs necessary to prepare the asset for its intended use. Unit costs of the inventories are valued at the lower of cost or net realisable value. Housing units which are completed and ready for delivery to customers together with work-in progress costs for housing units which will be completed within a year, are classified as short term inventories in the consolidated financial statements. Borrowing costs attributable to qualifying projects are capitalized, where construction of the project has started before 1 January 2009 or such project is already financed with up-front advances from customers, the Group does not capitalize borrowing costs (Note 9). Property, plant and equipment and related depreciation Property and equipment are carried at cost less accumulated depreciation and provision for impairment, if any. Any directly attributable costs of setting the asset in working order for its intended use are included in the initial measurement. Depreciation is calculated over of the cost of property and equipment using the straight-line method based on expected useful lives (Note 10). The expected useful lives are stated below: Years Motor vehicles 5 Furniture and fixtures 4-5 Subsequent costs incurred for tangible assets are included in the asset s carrying amount or recognized as a separate asset as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the consolidated statement of comprehensive income during the financial period in which they were incurred. Where the carrying amount of an asset is greater than its estimated recoverable amount, it is written down to its recoverable amount and the provision for impairment is charged to consolidated statement of comprehensive income. Gains and losses on the disposal of property and equipment are determined by deducting the net book value of the property and equipment from its sales and are included in the related income and expense accounts, as appropriate. 20

NOTE 2 - BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (Continued) Intangible fixed assets Intangible assets acquired separately are carried at cost, less accumulated amortization and any accumulated impairment losses. Amortization is charged on a straight-line basis over their estimated useful lives. Estimated useful life and amortization method are reviewed at the end of each annual reporting period, with the effect of any changes in the estimate being accounted for on a prospective basis. Construction contracts The Group does not have any activities where IAS 11 Construction Contracts is applicable. The Group s activities in housing development projects are accounted for under IAS 18 Revenue,as confirmed on the comment IFRIC 15 Agreements for the construction of real estate Non-current assets held for sale Non-current assets (or disposal groups) are classified as assets held for sale when their carrying amount is to be recovered principally through a sale transaction and a sale is considered highly probable. They are stated at the lower of carrying amount and fair value less costs to sell and no depreciation is calculated, if their carrying amount is to be recovered principally through a sale transaction rather than through continuing use. The Group does not have any non-current assets that meet the criteria for asset held for sale as of 31 December 2011 (31 December 2010: None). Investment properties Property that is held for long-term rental yields or for capital appreciation or both, and that is not occupied by the companies in the consolidated Group, is classified as investment property. Investment properties are carried at fair value. Gains and losses resulting from changes in fair values of investment property are recognized in the consolidated statement of comprehensive income (Note 8). As from 1 January 2009, in line with the amendment in IAS 40 investment property shall also include properties that are being constructed or developed for future use as investment property. Since the Group applied IFRS 1, the amendment in IAS 40 has been applied for all periods presented, that is fair value model is also applied to investment properties under construction before 1 January 2009 provided that the fair values of such investment properties under construction were determined at those dates. Goodwill Goodwill is not amortised, instead it is tested for impairment annually (as of 31 December), or more frequently if events or changes in circumstances indicate that it might be impaired, (Note 13). Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses. Impairment losses on goodwill are not reversed. For the purpose of impairment testing goodwill is allocated to the cash-generating units. 21

NOTE 2 - BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (Continued) Impairment of assets The Company reviews all assets including tangible assets at each balance sheet date in order to see if there is a sign of impairment on the stated asset. If there is such a sign, carrying amount of the stated asset is projected. Impairment exists if the carrying value of an asset or a cash generating unit including the asset is greater than its net realizable value. Net recoverable value is the higher of the net sales value or value in use. Value in use is the present value of cash flows generated from the use of the asset and the disposal of the asset after its useful life. Impairment losses are recorded in the consolidated statement of comprehensive income. Impairment loss for an asset is reversed, if an increase in recoverable amount is related to a subsequent event following the booking of impairment by not exceeding the amount reserved for impairment. Segment reporting Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the board of directors (Note 3). Revenue recognition Revenue is recognised when the amount of revenue can be measured reliably and when it is probable that the economic benefits associated with the transaction will flow to the Group. Revenue is presented net of value added and sales taxes. The following criteria are necessary for the recognition of revenue: Rent income obtained from investment properties Rent income from investment properties is recognised on an accrual basis. Revenue is realized when economic benefits arising from the transaction have passed, and when the amount of such income can be reliably measured. Rent discounts and similar promotions granted to existing tenants from time to time are netted off from rent revenues as they are not rent incentives for acquisition of new contracts. Revenues from common area charges Common area expenses of Torunlar REIC related to owned shopping malls charged to tenants in accordance with the individual provisions of rental contracts entered into with tenants. 22

NOTE 2 - BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (Continued) Sale of real estate Income obtained from the sales of the real estate (residential and office units classified as inventories) is accounted as soon as the below conditions are met: The Group has transferred all significant risks and rewards associated property to the buyer. (Transfer of title generally coincides with the final acceptance by the customers of the residential or office units sold and that is when the risk and rewards of ownership is considered to have passed to the customer). The Group is not having any control on the continued administrative participation associated with property and on the sold properties, Measuring the amount of income reliably, Possibility of a flow of the economic benefits related to the transaction to the Group and Reliable measurement of the inflows resulting from the transaction reliably. Interest income When the arrangement effectively constitutes a financing transaction, the fair value of the consideration is determined by discounting all future receipts using an imputed rate of interest. Dividend income Dividend income is recognized by the Group at the date the right to collect the dividend is realized. Paid-in capital Ordinary shares are classified as equity. Proceeds from issuing new equity instruments are recorded net of transaction costs. Share premium Share premium represents the positive difference between the nominal value of issued shares and proceeds for such shares issued. Treasury shares The Company s own shares which are bought by the Company itself from ISE are named as treasury shares and recorded on nominal value in equities. Purchase/sale of treasury stocks is not associated with comprehensive income statement, and recoginiton is made directly on equities. Earnings per share Earnings per share are determined by dividing net comprehensive income by the weighted average number of shares that have been outstanding during the period concerned. 23

NOTE 2 - BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (Continued) In Turkey, companies can increase their share capital by making a pro-rata distribution of their shares ( bonus shares ) to existing shareholders funded from retained earnings or other reserves. For the purpose of earnings per share computations, such bonus share issuances are regarded as issued shares for all periods presented and accordingly the weighted average number of shares used in earnings per share computations in prior periods is adjusted retroactively for the effects of these shares, issued without receiving cash or another consideration from shareholders. Reporting of cash flows Consolidated statement of cash flows includes cash and cash equivalents, cash with original maturity periods of less than three months and bank deposits (Note 4). Offsetting Each material class of similar items according to their nature or function is presented separately in the financial statements. If a line item is not individually material, it is aggregated with other similar items according to their nature or function. If the essence of the transaction and events requires offsetting, presentation of these transactions and events at their net values or following up of the assets at their amounts after the deduction of impairment, is not evaluated as a breach of the non-deductibility rule. Dividends Dividend income is recognized by the Group at the date the right to collect the dividend is realized. Dividend payables are recognized as a result of profit distribution in the period they are declared. Subsequent events Subsequent events cover any events which arise between the reporting date and the balance sheet date, even if they occurred after any declaration of the net profit for the period or specific financial information publicly disclosed. The Company adjusts its financial statements if such subsequent events arise which require an adjustment to the financial statements (Note 26). 2.5 Critical accounting estimates, assumptions and judgements The preparation of consolidated financial statements requires the use of assumptions and estimates that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues expenses which are reported throughout the period. Even though, these assumptions and estimates rely on the best estimates of the Company management; the actual results might differ from them. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities are outlined below: Fair valuation of investment properties: In the consolidated financial statement, basic assumptions used in valuation reports during the finding fair values of real estates classified as investment property is defined below; 24

NOTE 2 - BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (Continued) In the consolidated financial statement, investment properties are carried at fair values. Fair values of the investment properties are determined by independent valuation experts; Prime Gayrimenkul Değerleme ve Danışmanlık A.Ş and Standart Gayrimenkul Değerleme Uygulamaları A.Ş who were the experts in 2010 and 2011, respectively. The Group assumes that expenditure amount on investment property has an equivalent effect on fair value of related real estate. In the consolidated financial statements, the following assumptions used by valuation experts, that is the selection of the valuation method, the discount rate, the rent increase per annum, the capitalisation rate (which is the discount rate used to determine the terminal value) and determination of the market comparable m² values are considered critical and thus disclosed below in tabular format. Valuation Valuation market report Valuation Discount Rent increase Capitalisation m² value 31 December 2011 date method rate (*) rate p.a rate in full TL Mall of İstanbul 27/02/2012 Discounted cash flow 10,50% 3,00% 7,50% - Bursa Korupark Shopping Mall 27/02/2012 Discounted cash flow 10,10% 2,00% 8,10% - Torium Shopping Mall 27/02/2012 Discounted cash flow 10,50% 3,00% 7,50% - Torun Tower 27/02/2012 Sale comparison - - - 26,698 Bursa Zafer Plaza Shopping Mall 27/02/2012 Discounted cash flow 10,50% 3,00% 7,50% - Antalya Deepo Shopping Mall 27/02/2012 Discounted cash flow 10,10% 3,00% 7,10% - Antalya Deepo additional lands 27/02/2012 Sale comparison - - - 150-500 İstanbul İkitelli Kayabaşı land 27/02/2012 Sale comparison - - - 350 İstanbul Beyoğlu Kemankeş building 27/02/2012 Sale comparison - - - 4,389 Bursa Korupark separate retail units 27/02/2012 Discounted cash flow - - - 500-1,750 Bulvar Samsun Shopping Mall 27/02/2012 Discounted cash flow 10,50% 3% 7,50% - Valuation Valuation market report Valuation Discount Rent increase Capitalisation m² value 31 December 2010 date method rate (*) rate p.a rate in full TL Mall of İstanbul 31/12/2010 Discounted cash flow%10,00-%10,50 %3,00 %6,50-%7,00 - ( Mall of İstanbul land ) Sale comparison - - - 1,000 Bursa Korupark Shopping Mall 31/12/2010 Discounted cash flow %8,50 %2,00 %6,50 - Torium Shopping Mall 31/12/2010 Discounted cash flow %9,00 %3,50 %6,50 - Torun Tower 31/12/2010 Discounted cash flow %11,50 %3,00 %7,00 - Bursa Zafer Plaza Shopping Mall 31/12/2010 Discounted cash flow %9,50 %3,00 %6,50 - Antalya Deepo Shopping Mall 31/12/2010 Discounted cash flow %9,50 %3,00 %6,50 - Antalya Deepo additional lands 31/12/2010 Sale comparison - - - 60-400 İstanbul İkitelli Kayabaşı land 31/12/2010 Sale comparison - - - 261 İstanbul Beyoğlu Kemankeş building 31/12/2010 Sale comparison - - - 3,096 Bursa Korupark separate retail units 31/12/2010 Discounted cash flow %9,50-10,00 %2,50-3,00 %6,50-7,00 - Nishistanbul retail units 31/12/2010 Discounted cash flow %10 %3 %7 - (*) Discount rates are based on the currency in which the majority of cash flows are denominated for each investment property. In Turkey Euro and USD are commonly used in rent agreements. 25

NOTE 2 - BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (Continued) i. As at 31 December 2011, 140,926 m² of land located in İstanbul - Başakşehir İkitelli - 2 district is classified under investment properties. The Group is planning to build a multipurpose project called Mall of Istanbul Project on this land. Construction licence of Mall of Istanbul project was taken in 18 March 2011 and construction started at the same time. Project will be located on the 656,529 m 2 closed area including 129,186 m 2 closed area for shopping mall, 8,433 m 2 closed area for offices and totaly 97,700 m 2 closed area for 4 residence blocks with 421,209 m 2 common areas. In 4 residence blocks there will be 1,114 flats and in the 1 office block there will be 116 offices. Shopping Mall s rentable area has been determined as 150,000 m 2. Completion ratio of project is %27 as of 31 December 2011. Project s completion date is expected as last quarter of 2013. The Group has classified cost of residences and offices that are planned to be sold in the ordinary course of business in inventories, and has classified investment costs related to shopping mall in investment property. Based on Standart Gayrimenkul Değerleme Uygulamaları A.Ş s valuation report in accordance with Capital Markets Board s Serie: IV No:1 Communiqué, as at 27 February 2012 with the report number SvP_11_TRGYO_08 the aforementioned property s fair value is determined as TL839,056 as at 31 December 2011 (Based on Prime Gayrimenkul Değerleme ve Danışmanlık A.Ş. s valuation report, as at 31 December 2010 the aforementioned property s fair value is TL645,787). As at its current stage of completion, costs could not be apportioned between the investment property and the inventory portions of the Project, no capital appreciations on the investment property portion was recognized. At 31 December 2011, investment property portion of the Project amounted to TL531,084 and the inventory portion amounted to TL258,264 which in the aggregate amounted to TL789,348 compared to the fair value of the project amounted to TL839,056 as appraised by the independent valuation expert. ii. As at 31 December 2011, Bursa Korupark Shopping Mall located in Bursa - Osmangazi Emek district on 53,185.61 m² is classified under investment properties and on May 2007 the shopping mall was opened. Management of the Mall is conducted by Torun Alışveriş Merkezleri Yatırım ve Yönetim A.Ş. ( Torun AVM ) - a related party of the Group. Based on Standart Gayrimenkul Değerleme Uygulamaları A.Ş s valuation report in accordance with Capital Markets Board s Serie: IV No:1 Communiqué, as at 27 February 2012 with the report number SvP_11_TRGYO_10 the aforementioned property s fair value is TL600,229 as at 31 December 2011 (Based on Prime Gayrimenkul Değerleme ve Danışmanlık A.Ş. s valuation report, as at 31 December 2010 the aforementioned property s fair value is TL540,510). 26

NOTE 2 - BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (Continued) iii. On the 44,571 m² land located in İstanbul - Büyükçekmece Esenyurt district - which is classified under investment property as of 31 December 2011 in the consolidated financial statements, the Group completed the Torium Project and the shopping mall has been opened on 30 October 2010. Based on Standart Gayrimenkul Değerleme ve Danışmanlık A.Ş. s valuation report with the number SvP_11_TRGYO_04, Capital Markets Board s Serie: IV No:1 Communiqué, dated 27 February 2012, at 31 December 2011, the aforementioned property s fair value is TL567,276. Based on Prime Gayrimenkul Değerleme ve Danışmanlık A.Ş. s valuation report, as at 31 December 2010 the aforementioned property s fair value is TL549,876. These amounts represent the share of the Company on the mentioned property. As a part of the Torium Project, Torium Residence is constructed independently from Torium Shopping Mall which was classified under inventories (Note 9). iv. On the 14,992 m² land located in İstanbul - Şişli 2nd District - which is classified under investment property as of 31 December 2011 in the consolidated financial statements, the Company develops Torun Tower Project. The construction licence of Torun Tower Project was received on 30 September 2011, construction works started in November 2011. Project consists of 106,929 m² gross area and with 152 separate retail units in one block. Based on Standart Gayrimenkul Değerleme Uygulamaları A.Ş s valuation report in accordance with Capital Markets Board s Serie: IV No:1 Communiqué, dated 27 February 2012 with the report number SvP_11_TRGYO_02, the aforementioned property s fair value is TL253,266 as at 31 December 2011 (Based on Prime Gayrimenkul Değerleme ve Danışmanlık A.Ş. s valuation report 2010/TGYO/09, as at 31 December 2010, the aforementioned property s fair value is TL237,736). v. Antalya Deepo Shopping Mall located on 67,319.78 m² land in Antalya - City Centre Koyunlar District - which is classified under investment property as of 31 December 2011 in the consolidated financial statements has been opened in October 2004. Management of the Mall is conducted by Torun Alışveriş Merkezleri Yatırım ve Yönetim A.Ş. a related party of the Group. Based on Standart Gayrimenkul Değerleme Uygulamaları A.Ş s valuation report in accordance with Capital Markets Board s Serie: IV No:1 Communiqué, dated 27 February 2012 with the report number 2012 / SvP_11_TRGYO_14 the aforementioned property s fair value is TL197,763 as at 31 December 2011. Based on Prime Gayrimenkul Değerleme ve Danışmanlık A.Ş. s valuation report 2010/TGYO/01, as at 31 December 2010, the aforementioned property s fair value is TL180,492. According to the appraisal report obtained from Standart Gayrimenkul Değerleme Uygulamaları A.Ş., for the related property to be included in the REIC portfolio, 1/1000 scale implementation zoning plan shall be approved by the Kepez Municipality Zoning Directorate and Antalya Metropolitan Municipality Zoning Directorate and subsequently all related legal permits for the shopping mall shall be obtained. In accordance with the Extraordinary General Assembly Meeting held on 9 March 2010, the Company has transferred Antalya Deepo Mall located in Antalya - City Centre Koyunlar to a newly incorporated subsidiary of the Company, TRN Alışveriş Merkezleri Yatırım ve Yönetim A.Ş. ( TRN ) by spin-off. The related transfer has been performed as of 31 March 2010. 27

NOTE 2 - BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (Continued) vi. Bursa Zafer Plaza located on the 9,622 m² land in Bursa - Osmangazi Şehreküstü District - which is classified under investment property as of 31 December 2011 in the consolidated financial statements has been opened in October 1999. Management of the Mall is conducted by Zafer Plaza İşletmecilik A.Ş. a related party of the Group. Based on Standart Gayrimenkul Değerleme Uygulamaları A.Ş s valuation report, dated 27 February 2012 with the report number SvP_11_TRGYO_09 the aforementioned property s fair value is TL176,777 as at 31 December 2011 (Based on Prime Gayrimenkul Değerleme ve Danışmanlık A.Ş. s valuation report, as at 31 December 2010, the aforementioned property s fair value is TL143,156). These amounts represent the share of the Company on the mentioned property. vii. TTA Gayrimenkul Yatırım Geliştirme ve Yönetim A.Ş. (TTA) started project of Bulvar Samsun Shopping Mall on land located in Samsun- City owned by Samsun Metropolitan Municipality and 30 year easement right granted to the Group which is classified under investment property as of 31 December 2011. The Company has completed the construction and the shopping mall is planned to be opened in June 2012. Based on Standart Gayrimenkul Değerleme Uygulamaları A.Ş s valuation report in accordance with Capital Markets Board s Serie: IV No:1 Communiqué, dated 27 February 2012 with the report number 2012/SvP_11_TRGYO_16 the aforementioned shopping mall s fair value is TL103,583 as at 31 December 2011 and TL41,433 is owned by the Group over its %40 share. Shopping mall s fair value is calculated using the discounted cash flows considering the future payments of the easement right attached to the revenues of the shopping mall. viii. The Group owns 79,334 m² land located in Antalya - City Centre Koyunlar District - which is classified under investment property as of 31 December 2011 in the consolidated financial statements. Enlargement of Deepo Shopping Mall is planned with the new construction over the land adjacent to the shopping mall. Based on Standart Gayrimenkul Değerleme Uygulamaları A.Ş s valuation report in accordance with Capital Markets Board s Serie: IV No:1 Communiqué, dated 27 February 2012 with the report number 2012 / SvP_11_TRGYO_15 the aforementioned property s fair value is TL34,606 as at 31 December 2011 (Based on Prime Gayrimenkul Değerleme ve Danışmanlık A.Ş. s valuation report, as at 31 December 2010 the aforementioned property s fair value is TL28,334). ix. The Group owns 60,833 m² land located in İstanbul - Küçükçekmece Kayabaşı District - which is classified under investment property as of 31 December 2011 in the consolidated financial statements. The usage of this land has not been determined by the management as of balance sheet date and the land is retained for capital appreciation. Based on Standart Gayrimenkul Değerleme Uygulamaları A.Ş s valuation report in accordance with Capital Markets Board s Serie: IV No:1 Communiqué, dated 27 February 2012 with the report number 2012/SvP_11_TRGYO_03 the aforementioned property s fair value is TL21,292 as at 31 December 2011 (Based on Prime Gayrimenkul Değerleme ve Danışmanlık A.Ş. s valuation report, as at 31 December 2010 the aforementioned property s fair value is TL15,904). 28

NOTE 2 - BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (Continued) x. The Group owns a building located on 1,501 m² land in İstanbul - Beyoğlu Kemankeş District - which is classified under investment property as of 31 December 2011 in the consolidated financial statements. The building is planned to be renovated as a hotel. Based on Standart Gayrimenkul Değerleme Uygulamaları A.Ş s valuation report in accordance with Capital Markets Board s Serie: IV No:1 Communiqué, dated 27 February 2012 with the report number 2012/SvP_11_TRGYO_06 the aforementioned property s fair value is TL17,119 as at 31 December 2011 (Based on Prime Gayrimenkul Değerleme ve Danışmanlık A.Ş. s valuation report, as at 31 December 2010 the aforementioned property s fair value is TL12,703). xi. As at 31 December 2011 separate unit of Bursa Korupark Shopping Mall located in Bursa - Osmangazi Emek district which is classified under investment properties includes a dolphin pool, social recreation areas, office and depots. Based on Standart Gayrimenkul Değerleme Uygulamaları A.Ş s valuation report in accordance with Capital Markets Board s Serie: IV No:1 Communiqué, dated 27 February 2012 with the report number 2012/SvP_11_TRGYO_11 the aforementioned property s fair value is TL16,645 as at 31 December 2011 (Based on Prime Gayrimenkul Değerleme ve Danışmanlık A.Ş. s valuation report 210/TGYO/07, as at 31 December 2010 the aforementioned property s fair value is TL9,324). 2.6 Control of Compliance with the Portfolio Limitations Presented informations in Note 22: Additional Note: control of compliance with the portfolio limitations, in accordance with Capital Markets Board s Communiqué Serial: XI, No: 29 Financial Reporting in Capital Markets Amendment No: 17 are condensed information and prepared in accordance with Capital Markets Board s Communiqué Serial: VI, No: 11 Real Estate Investment Company. The information given in Note 22 is based on stand-alone amounts of the Company (Torunlar REIC) excluding the figures of the subsidiaries, joint ventures and associates. The aforementioned information may not be reconcile with the amounts in the consolidated financial statements. NOTE 3 - SEGMENT REPORTING The reportable segments of Torunlar REIC have been organised by management as a portfolio on a project-by-project basis and makes decisions about resources to be allocated to the properties on the same basis. Major items classified under other items are those projects which are related to other major projects but not a part of them, such as Bursa Korupark separate units, İstanbul İkitelli Küçükçekmece land. Accounting policies applied by each operational segment of Torunlar REIC are the same as those are applied in Torunlar REIC s consolidated financial statements prepared in accordance with the accounting policies explained in Note 2. The information about each segment is below. Gross profit has been considered as the performance of segments. 29

NOTE 3 - SEGMENT REPORTING (Continued) a) The segment information for the reportable segments as of and for the period ended 31 December 2011 is as follows; Total Income segment Gross Capital from revenue profit Depreciation expenditure(*) associates(**) Korupark Shopping Mall 51,525 37,830-281 - Torium Shopping Mall 48,094 26,602-7,957 - Korupark Residences 25,379 12,573-27,631 - Antalya Deepo Shopping Mall 14,968 11,214-339 - Nishistanbul Project 11,809 5,131-316 - Zafer Plaza Shopping Mall 8,900 6,491 - - - Torium Residences 569 (177) - 5,358 - Ankamall and Crowne Plaza Hotel - - - - 42,259 Mall of Istanbul Project - - - 145,722 - Torun Tower Project - - - 5,214 - Ali Sami Yen Project - - - 1,807 - Maltepe Land - - - 16,421 - Samsun Bulvar Shopping Mall - - - 10,140 - Other 1,665 491 291 2,066 2,968 Total 162,909 100,155 291 223,252 45,227 (*) Capital expenditures include expenditures made for residence and shopping mall constructions which are classified as inventories and investment properties in the consolidated financial statements. (**) Income from the associate: Yeni Gimat consists of rent income from Ankaramall Shopping Mall and Crowne Plaza Hotel amounting to TL42,259.The income from the associate: Netsel amounting to TL2,968 is classified in other. b) The segment information for the reportable segments as of and for the period ended 31 December 2010 is as follows: Total Income segment Gross Capital from revenue profit Depreciation expenditure(*) associates(**) Nishistanbul Project 119,444 9,342-85,554 - Korupark Residences 41,909 21,691-1,983 - Korupark Shopping Mall 39,822 29,672-250 - Antalya Deepo Shopping Mall 13,656 9,380-1,637 - Torium Shopping Mall (***) 9,377 3,572-98,599 - Zafer Plaza Shopping Mall 8,400 6,126 - - - Torium Residences - - - 6,741 - Ankamall and Crowne Plaza Hotel - - - - 12,910 Mall of Istanbul Project - - - 18,277 - Torun Tower Project - - - 239 - Other 320 235 183-1,815 Total 232,928 80,018 183 213,280 14,725 (*) Capital expenditures include expenditures made for residence and shopping mall constructions which are classified as inventories and investment properties in the consolidated financial statements. (**) Income from the associate: Yeni Gimat consists of rent income from Ankamall Shopping Mall and Crowne Plaza Hotel amounting to TL12,910. The income from the associate: Netsel amounting to TL1,815 is classified in other. (***) The Company's shopping center in Istanbul called Torium Mall, is launched on 30 October 2010. The amount includes segment revenue, gross profit and capital expenditures after the launch of the shopping mall. 30

NOTE 4 - CASH AND CASH EQUIVALENTS Cash in hand 2 3 Cash at banks - demand deposits 191 32 - time deposits 596,934 438,591 Other 261 38 31 597,388 438,664 As of 31 December 2011 and 2010 cash and cash equivalents at the consolidated statement of cash flows are as follows: Cash and cash equivalents 597,388 438,664 Less: Blocked deposits (*) - (121,447) Cash and cash equivalents at statement of cash flow 597,388 317,217 (*) As of 31 December 2010 time deposits amounting to USD75,000 as well as its accrued interest in the fiscal period are blocked against USD 100,000 loan raised according to the borrowing agreement made with the bank, the interest rate of this blocked time deposit is 5,60% per annum with 25 February 2011 maturiy date. Maturities of cash and cash equivalents are as follows: Up to 30 days 438,619 266,508 30-90 days 158,769 172,156 597,388 438,664 The breakdown of foreign currency denominated cash and cash equivalents in terms of TL is as follows: USD 166,915 166,316 EUR 43,542 22,501 Average effective interest rates of time deposits are as follows (%): 210,457 188,817 (%) (%) USD 5,52 5,52 EUR 4,17 4,09 TL 11,44 8,84

NOTE 5 - FINANCIAL LIABILITIES Financial Investments The time deposits that have more than three months maturity: Interest rate Currency p.a.(%) Maturity 31 December 2011 31 December 2011 - TL 12.50% December 2012 58,197 31 December 2010 - EUR 4.00% January 2012 29,459 Financial Liabilities Short-term bank borrowings 160,604 155,539 Short-term portion of Long-term bank borrowings 128,539 75,602 Long-term bank borrowings 811,373 552,122 1,100,516 783,263 Weighted average effective interest Original TL 31 December 2011 rate p.a. (%) Currency balance equivalent Short-term bank borrowings 5.03% USD 45,344 85,650 14.50% TL 38,027 38,027 4.93% EUR 15,110 36,927 Short-term portion of long term bank borrowings 5.88% USD 49,783 94,034 4.94% EUR 14,118 34,505 Long-term bank borrowings 5.02% USD 290,408 548,556 4.94% EUR 107,545 262,817 Total bank borrowings 1,100,516 32

NOTE 5 - FINANCIAL LIABILITIES (Continued) Weighted average effective interest Original TL 31 December 2010 rate p.a. (%) Currency balance equivalent Short-term bank borrowings 3.61 USD 86,900 134,347 8.64 TL 19,141 19,141 3.00 EUR 1,001 2,051 Short-term portion of long term bank borrowings 6.36 USD 32,630 50,447 4.88 EUR 12,276 25,155 Long-term bank borrowings 5.82 USD 198,250 306,495 4.91 EUR 119,871 245,627 Total bank borrowings 783,263 The redemption schedules of long-term borrowings at 31 December 2011 and 2010 are as follows: 2012-142,442 2013 148,125 95,665 2014 170,750 91,443 2015 140,588 66,851 2016 and over 351,910 155,721 811,373 552,122 The analysis of borrowings in terms of periods remaining to contractual repricing dates is as follows: Up to 3 months (*) 685,170 584,633 3-12 months 415,346 196,500 1-5 years - 2,130 1,100,516 783,263 (*) As of 31 December 2011, interest of borrowings amounting to TL288,239 is fixed until 2012 with an interest rate swap contract (31 December 2010: TL264,489) (Note 6). 33

NOTE 6 - OTHER FINANCIAL LIABILITIES Derivative financial instruments 31 December 2011 Notional Fair value Amount liability Interest rate swap contracts 288,239 (1,313) 288,239 (1,313) 31 December 2010 Notional Fair value amount liability Interest rate swap contracts 264,489 (3,877) 264,489 (3,877) At 9 June 2009, the Group has signed an interest rate swap contract to fix the Euribor floating interest of its long term borrowing for the period from 24 January 2010 to 24 January 2012. According to the contract signed, Euribor and the total interest of the borrowing are fixed at 2.74% and 4.94% accordingly between 2009 and 2012. NOTE 7 - TRADE RECEIVABLES AND PAYABLES Short-term trade receivables Notes receivable 56,734 6,389 Trade receivable 9,372 10,000 Trade receivables from related parties (Note 23) (*) 3,307 35,312 Receivables from the joint venture partner 2,332 - Cheques receivable 1,632 - Notes receivables from related parties (Note 23) - 105 73,377 51,806 Less: Provision for doubtful receivables (2,296) (1,874) Less: Unearned credit finance income - (226) 71,081 49,706 (*) Group, provided funds to Torunlar Aşçıoğlu Kapıcıoğlu Project partnership in the amount of TL95,000 which was used by the Partnership to make the advance payment to The Republic of Turkey Prime Ministry Housing Development Administration ( TOKİ ) which amount to TL97,165 within the scope of Ali Sami Yen Project as of 31 December 2010. TL34,008 which is the exceeding amount of the Group s %65 share in the partnership, has been presented as receivables from Torunlar Aşçıoğlu Kapıcıoğlu Project Partnership within the receivables from related parties. In 2011, Torunlar Aşçıoğlu Kapıcıoğlu Project partnership paid the debt related to advance payment to the Group after drawing credit from the bank in 2011. 34

NOTE 7 - TRADE RECEIVABLES AND PAYABLES (Continued) Long-term trade receivables Notes receivable 60,079 5,377 Less: Unearned credit finance income - (648) Movement of the provision for the doubtful receivables is as follows: 60,079 4,729 At the beginning of the period (1,874) (1,789) Current year additions (422) (85) At the end of the period (2,296) (1,874) The aging schedule of impaired doubtful receivables is as follows: 3-6 months (293) (85) 6 months and over (2,003) (1,789) (2,296) (1,874) Short-term trade payables Trade payables 30,217 28,221 Due to related parties (Note 23) 6,803 3,501 Due to the joint venture partner 1,033 952 Notes payable 811 1,862 38,864 34,536 As of 31 December 2011 and 2010, majority of trade payables consist of payables to subcontractors relating to projects in progress. 35

NOTE 8 - INVESTMENT PROPERTIES Movement schedule of investment property as of 31 December 2011 and 2010: 1 January Change in 31 December 2011 Additions Disposals Transfers fair value 2011 Bursa Korupark Shopping Mall 540,510 281 - - 59,438 600,229 Torium Shopping Mall 549,876 7,954 - - 9,446 567,276 Mall of İstanbul (*) 645,787 88,530 - (203,233) - 531,084 Torun Tower (**) 237,736 5,214 - - 10,316 253,266 Antalya Deepo Shopping Mall 180,492 339 - - 16,932 197,763 Bursa Zafer Shopping Mall 143,156 - - - 33,621 176,777 Samsun Bulvar Shopping Mall - 10,140-473 30,820 41,433 Antalya Deepo additional land 28,334 1,927 - - 4,345 34,606 Nishistanbul retail units 25,673 316 - (25,989) - - Kayabaşı land 15,904 - - - 5,388 21,292 Kemankeş building 12,073 - - - 5,046 17,119 Korupark separate units 9,324 139 - - 7,182 16,645 2,388,865 114,840 - (228,749) 182,534 2,457,490 (*) Construction licence of Mall of İstanbul Project was taken on 18 March 2011. The Project with 656,528 m 2 construction area comprising 129,186 m 2 shopping mall, 97,700 m 2 residence, 8,433 m 2 office and 421,209 m 2 is mixed-use project. Project construction has started in March 2011 and is planned to be completed in the last quarter of 2013. Based on the valuation report numbered 2011/TGYO/10 and dated 31 March 2011, which was prepared by Prime Gayrimenkul A,Ş., the value of land belonging to 146,039 m 2 sellable residences and offices was determined as TL 203,233 and the value of land belonging to residences and offices to be sold after Project completion has been transferred to inventories. In the content of Project, TL 210,785 advances have been received for the pre-sale contracts of 580 units consisting of 540 residences and 40 offices as of 31 December 2011 (Note 11). Land of 8,506.82 m 2, adjacent to the Mall of Istanbul Project, which is kept for project development is owned to the share 112.123/240.000 by the Group (land block 858, Lot 1 Ikitelli-2 Neighborhood, Başakşehir District, Istanbul Province). Against real estate of 9,261,58 m 2 area (which corresponds to the 122,071/240,000 share of Block 858 owned by S.S. Masko Istanbul Manufacturers of Wooden Furniture Society Collective Housing), the partnership signed a floor construction in exchange for land agreement with the S.S. Masko Istanbul Manufacturers of Wooden Furniture Society Collective Housing. Land of 52.73 m 2 owned by one shareholder on the 18,209.90 metersquare (Block 858, Lot 1 Ikitelli-2 Neighborhood, Başakşehir District, Istanbul Province), adjacent to the Mall of Istanbul Project land (block 858, lot 2 İkitelli Neighbourhood, Başakşehir District) has been acquired by the Group for the amount of 158 TL. After acquisition, total land size of Torunlar REIC became 17,821.13 m 2. (**) The Group commenced Torun Tower Office Project construction in the on the land Plate 306, Block 2011 and Lot 5 Şişli, Mecidiyeköy District, Istanbul Province. The construction licence was taken on 30 September 2011 and construction started on 30 November 2011. Project completion date is expected as 2013. 36

NOTE 8 - INVESTMENT PROPERTIES (Continued) 1 January Change 31 December 2010 Additions Disposals Transfers in fair value 2010 Mall of İstanbul 619,419 18,277 - - 8,091 645,787 Torium Shopping Mall(*) 399,617 98,599 - (1,728) 53,388 549,876 Bursa Korupark Shopping Mall 590,042 250 - - (49,782) 540,510 Torun Tower 167,656 239 - - 69,841 237,736 Antalya Deepo Shopping Mall 124,981 334 - - 55,177 180,492 Bursa Zafer Plaza Shopping Mall 149,201 - - - (6,045) 143,156 Antalya Deepo additional land 14,772 1,303 - - 12,259 28,334 Nishistanbul retail units - 12,617 (4,179) - 17,235 25,673 Kayabaşı land 13,646 - - - 2,258 15,904 Kemankeş building 11,045 - - - 1,028 12,073 Korupark seperate units 6,051 63 - - 3,210 9,324 2,096,430 131,682 (4,179) (1,728) 166,660 2,388,865 (*) Current year transfers relate to the cost of land transferred to inventories for the purpose of residential building. Liens on investment properties regarding bank borrowings at 31 December 2011 and 2010 are as follows: Original 31 December 31 December Balance Currency 2011 2010 Mall of İstanbul (*) 300,000 USD 566,670 - Bursa Korupark Shopping Mall 225,000 EUR 549,855 461,048 Torium 120,000 USD 226,668 185,520 Torun Tower 100,000 USD 188,890 154,600 (*) Liens of investment property established by Türkiye İş Bankası A.Ş. on 31 May 2011. 1,532,083 801,168 Total capitalized borrowing cost amounts in 2011 in investment property of Mall of İstanbul, Torun Tower and Bulvar Samsun Shopping mall projects in the development process are respectively TL 7,555, TL 1,121 and TL 1,354. 37

NOTE 9 - INVENTORIES Short-term inventories Lands (*) 16,421 1,728 Completed residential units 50,930 40,030 - Nishistanbul (**) 30,683 9,091 - Korupark 2. Phase (***) 10,432 20,271 - Torium 7,552 6,818 - Korupark 1. Phase (***) 2,263 3,850 Non-completed residential units 31,294 - - Korupark 3. Phase (***) 31,294 - Other 2,160 1,303 100,805 43,061 Borrowing cost amounting to TL 4,028 have been capitalized in Mall of Istanbul residences which are in the development process. No borrowing cost has been capitalized for Koruparak 3 rd Phase since no external resource was used for the development of the Project. (*) As of 31 December 2011, the land amounting to TL 16,421 consists of the land which is located in İstanbul, Maltepe, lot 251 and was purchased for the development of residence project. (**) There are 8 offices (gross 2,150 m²), 3 residences (gross 291 m²) and 20 retail units (gross 3,425,17 m²) registered in Nishistanbul project in İstanbul, Yenibosna, plate 243DS3A, Block 338, Lot 1. Additionally, Torunlar REIC has % 60 shares over 5 offices (gross 1,289 m²) which have not been shared among the partners yet. (***) The Group commenced Bursa Korupark Evleri Project in May 2006 on the land located in Bursa Mudanya, Bursa, Osmangazi, 3. Phase and totaling 83,207.30 m². 329 residences were sold with 54,873.10 m 2 of 1. Phase of the Project which consists of 343 residences until 31 December 2011 (31 December 2010: 53,295.67 m 2 321 residences). The construction of 1. Phase was completed in 2008. 356 residences were sold with 56,479.42 m 2 of 2. Phase of the Project which consists of 403 residences until 31 December 2011 (31 December 2010: 46,078.13 m 2 300 residences). Construction of 2. Phase was completed in 2009. In 1. and 2. Phase, there were respectively 14 residences with 2,245.90 m 2 and 47 residences with 10,241.58 m² as of 31 December 2011 (31 December 2010: 1. Phase 3,823.33 m 2, 22 residences and 2nd Phase 20,642.87 m 2 103 residences). In the context of 3. Phase of the Project, there are 17 blocks, 678 residences and 2 offices where on 20 March 2011 construction and on 30 April 2011 pre sales started. As of 31 December 2011, for 218 residences, preliminary sales contracts were signed and TL 51,489 advances were received (Note 11). 38

NOTE 9 - INVENTORIES (Continued) Long-term inventories Non-completed residential units under construction - Mall of Istanbul project 258,264 - - Ali Sami Yen project 4,142 2,337 - Korupark 3. Phase - 4,655 262,406 6,992 NOTE 10 - PROPERTY, PLANT AND EQUIPMENT Cost 1 January 31 December 2011 Additions Transfers Disposals 2011 Furniture and fixtures 456 366 - - 822 Motor vehicles 842 195 - (120) 917 Construction in progress 473 - (473) - - Accumulated depreciation 1,771 561 (473) (120) 1,739 Furniture and fixtures (142) (139) - - (281) Motor vehicles (514) (118) - 48 (584) (656) (257) - 48 (865) Net book value 1,115 874 Cost 1 January 31 December 2010 Additions Disposals 2010 Furniture and fixtures 160 296-456 Motor vehicles 737 105-842 Construction in progress - 473-473 Accumulated depreciation 897 874-1,771 Furniture and fixtures (97) (45) - (142) Motor vehicles (393) (121) - (514) (490) (166) - (656) Net book value 407 1,115 Current year amortisation charge for intangible fixed assets amounts to TL34 (31 December 2010: TL17). Total depreciation charged to income statement is TL291 (31 December 2010: TL183). 39

NOTE 11 - OTHER ASSETS AND LIABILITIES Other current assets Advances given 9,742 1,759 Value added tax ( VAT ) receivables 2,129 37,862 Prepaid expenses 1,457 1,526 Prepaid taxes and funds 49 17 Other 423 194 Other non-current assets 13,800 41,358 Advances given (*) 108,063 61,750 VAT receivables 47,678 11,192 Prepaid expenses 1,415 1,408 157,156 74,350 (*) Torunlar Aşçıoğlu Kapıcıoğlu Project Partnership paid TL165,250 to TOKİ within the content of Ali Sami Yen Project and 65% of the advances paid is attributable the Group (31 December 2010: 95,000 TL). Other short-term liabilities Advances received 52,383 3,110 Deposits and warranties received 2,368 4,846 Deferred income 1,785 1,395 Taxes and funds payable 1,110 1,743 Provisions 545 990 Due to personnel 372 321 Other 102 565 58,665 12,970 As of 31 December 2011 advances received amounting to TL51.489 were related to Korupark 3. Phase residence sale commitments. The Group plans to deliver the residences before 31 December 2012. Other long term liabilities Advances received (*) 210,785 - Others 8-40 210,793 - (*) All advances received from residence sales consist of sale commitments related to Mall of İstanbul Project as of 31 December 2011.

NOTE 12 - INVESTMENTS IN ASSOCIATES % TL % TL Yeni Gimat 14,83 153,957 14,83 115,886 Netsel 44,60 10,232 44,60 9,572 164,189 125,458 At the beginning of the period 125,458 115,478 Income from associates (net) 45,227 14,725 Dividends received from associates (6,496) (4,745) At the end of the period 164,189 125,458 Income/expense from investments in associates Yeni Gimat 42,259 12,910 Netsel 2,968 1,815 Total 45,227 14,725 NOTE 13 - GOODWILL At the beginning of the period - 8,250 Goodwill transferred to income statement - (8,250) At the end of the period - - 41

NOTE 14 - COMMITMENTS, CONTINGENT ASSETS AND LIABILITIES Contingent assets and liabilities are as follows: Liens received - 36,000 Guarantees received 47,831 16,521 The totals of expected minimum operational lease revenues as of 31 December 2011 and 2010 are as follows: Operational lease revenues between 0-1 years 108,908 81,029 Operational lease revenues between 1-5 years 438,104 215,328 Operational lease revenues between 5-10 years 481,623 765,334 The minimum operational lease revenue represents lease revenue from Korupark shopping mall, Torium shopping mall, Zafer shopping mall and Deepo shopping mall. The lease revenues from Ankamall and Crowne Plaza Hotel that are owned by Yeni Gimat-associate of the group are not included in minumum operational lease revenue. Below are the amounts of guarantees, pledges and mortgages of the Group as of 31 December 2011 and 2010: CPM s given by the company (Collaterals, Pledges, Mortgages) A. CPM s given for its own legal personality 1,587,677 801,168 B, CPM s given on behalf of fully consolidated companies 8,148 2,428 C, CPM s given for continuation of its economic activities on behalf of third parties - - D. Total amount of other CPM s i) i) Total amount of CPM s given on behalf of the majority shareholder - - ii) Total amount of CPM s given to on behalf of other Group companies which are not in scope of B and C - - iii) Total amount of CPM s given on behalf of third parties which are not in scope of C - - 1,595,825 803,596 42

NOTE 14 - COMMITMENTS, CONTINGENT ASSETS AND LIABILITIES (Continued) As of 31 December 2011 liens on investment properties of the Group is TL 1,532,083 (31 December 2010: TL801,168) (Note 8). Foreign TL Foreign TL currency Amount currency Amount EUR 225,000 549,855 225,000 461,048 USD 520,000 982,228 220,000 340,120 TL 63,742 63,742 2,428 2,428 1,595,825 803,596 The lease revenues from Korupark shopping mall and Torium Shopping mall are pledged against borrowings. The Group also stands as the guarantor of the borrowings that will be used by the buyers of the residences until the completion of residences and transfer of deeds to the contracting parties in relation to sale of residences through loans in Mall of İstanbul and Korupark 3. Phase. These guarantees were determined with the total limit of TL182,500 in three different banks and determined without limit with two banks as of 31 December 2011 (31 December 2010: None). NOTE 15 - EQUITY The Company, increased its issued capital from TL176,100,000 to TL224,000,000 through public offering. A total TL56,352,942 nominal value of shares were offered to the public, consisting of TL47,900,000 to be issued from the capital increase and additional shares 8,452,942 TL owned by current shareholders. The compulsory prospectus of the public offering was registered by the İstanbul Trade Registry Office on 7 October 2010 and announced in the Trade Registry no: 7669 on 14 October 2010 pages between 641-735 totally 95 pages. The Company s quoted shares are traded in the İstanbul Stock Exchange as from 21 October 2010. Company s shareholders and capital structure as of 31 December 2011 and 2010 as below; A Group B Group C Group 31 December Shareholders% (quantity) (quantity) (quantity) 2011 Aziz Torun 37,41 44,870-38,918 83,788 Mehmet Torun 37,37-44,835 38,882 83,717 Y. Emre Torun 0,03-35 35 70 Torun Pazarlama A,Ş, 0,02 32 32-64 Ali Coşkun less than 0,01 4 - - 4 Mahmut Karabıyık less than 0,01-4 - 4 Other (Public quotation) 25,16 - - 56,353 56,353 Total paid-in capital 44,906 44,906 134,188 224,000 The A and B group shares have nomination privilege to the Board of Directors according to articles of association. 43

NOTE 15 - EQUITY (Continued) In accordance with decision of the Board of Directors numbered 63 and dated 27 August 2010, and based on the Article 8 of the Articles of Association, the Company decided to increased its issued capital through public offering, within the limits of the registered capital of TL1,000,000,000 to TL224,000,000 from TL176,100,000. In the context of the capital increase, it was decided that, TL47,900,000 of the increased capital would be contributed by the public offering through the sale C group shares (current shareholders were restricted to acquire those shares). Additionally, a total of 4,191,251 C group shares that are held by the shareholders namely Aziz Torun and Mehmet Torun and 70,440 C group shares that are held by the corporate shareholder namely Torun Pazarlama A.Ş. would be offered to public. In case that sufficient excess demand is achieved in the public offering, additional 4,226,471 C group shares that are held by Aziz Torun and Mehmet Torun would be additionally subjected to public offering in accordance with the Serial I, No: 40 decree of the CMB: 'Registration of Shares to CMB Registry and Guidelines for Public Offering'. According to the decision of the Board of Directors of Istanbul Stock Exchange on 7 October 2010, the Company's C Group shares with total nominal value of TL47,900,000 is traded in the İstanbul Stock Exchange starting from 21 October 2010. As a result of the public offering, the Company earned TL349,670,000 against its shares with TL47,900,000 nominal value and the difference of TL301,770,000 has been accounted for as share premiums in the consolidated financial statements. The legal reserves consist of first and second reserves, appropriated in accordance with the Turkish Commercial Code ( TCC ). The TCC stipulates that the first legal reserve is appropriated out of statutory profits at the rate of 5% per annum, until the total reserve balance reaches 20% of the Company s paid-in share capital. The second legal reserve is appropriated at the rate of 10% per annum of all cash distributions in excess of 5% of the paid-in share capital. Under the TCC, the legal reserves can only be used to offset losses and are not available for any other usage unless they exceed 50% of paid-in share capital. In accordance with the Communiqué No:XI-29 and related announcements of CMB, effective from 1 January 2008, Share capital, Legal Reserves and Share Premiums shall be carried at their statutory amounts. The valuation differences (such as inflation adjustment differences) shall be disclosed as follows: - If the difference is arising due to the inflation adjustment of Paid-in Capital and not yet been transferred to capital should be classified under the Inflation Adjustment to Share Capital ; - If the difference is due to the inflation adjustment of Legal Reserves and Share Premium and the amount has not been utilized in dividend distribution or capital increase yet, it shall be classified under Retained Earnings. Other equity items shall be shown with the amount of valuation in accordance with CMB financial reporting standards. Companies whose shares are quoted in ISE are subject to profit distribution rules of CMB as follows: Dividend is distributed according to Communiqué Serial: IV, No: 27 on Principles Regarding Distribution of Dividends for the quoted entities subjected to Capital Market Board Law, principles determined in the Articles of Association and dividend distribution policy which is declared by the Companies to the market. In addition, the decision also allows companies to compute their distributable profit amounts by considering the net profit for the period presented in the publicly disclosed financial statements prepared in accordance with the Communiqué Serial: XI, No: 29, if such distributable profits could be fully recovered from resources subject to profit distribution in the statutory records. 44

NOTE 15 - EQUITY (Continued) The composition of the Company s equity based on the Serial:XI, No:29 decree of the CMB is as follows: Share capital 224,000 224,000 Share premium 301,770 301,770 Restricted reserves 3,947 3,127 Treasury shares (836) - Retained earnings 1,826,713 1,625,941 Net profit of the year 177,312 214,245 2,532,906 2,369,083 The Company bought back its 205,000 shares traded in ISE within the price range TL3.90 - TL4.34 with a total transaction value TL836 in the period of 21 November to 15 December 2011. Average buying price of repurchased shares was TL4.08 and ratio of number of bought shares to total shares is %0.45. As of 31 December 2011 and 2010 the net distributable profits according to the statutory accounts and the reserves that can be subjected to the dividend distribution are as follows: Distributable current year profit 24,560 12,799 Extraordinary reserves 4,152 4,152 Share premium 301,770 301,770 As of 31 December 2011 and 2010, the details of restricted reserves are as follows: 330,482 318,721 First legal reserves 1,441 767 Second legal reserves 2,506 2,360 3,947 3,127 45

NOTE 16 - REVENUE AND COST OF REVENUE 2011 2010 Revenues Rent income 91,969 53,899 Residence sales 37,758 161,064 Common area income 31,518 14,012 Commercial goods sales 1,513 3,785 Other 151 168 Cost of Revenue 162,909 232,928 Common area expenses (36,560) (16,113) Cost of residence sales (20,231) (122,099) Rent expenses and management fees of shopping malls (4,790) (3,383) Cost of commercial goods sold (1,156) (2,637) Goodwill of Nishistanbul Project - (8,250) Other (17) (428) (62,754) (152,910) Gross profit 100,155 80,018 Operational lease revenues mainly consist of rent income from shopping malls. Shopping malls in operation are Ankara Ankamall, Bursa Korupark, Bursa Zafer Plaza, Antalya Deepo and Torium. Additionally, Bulvar Samsun Shopping Mall is currently under construction as of 31 December 2011 and is expected to be opened in 2012. Ankamall is owned by Yeni Gimat - associate of the Company. According to the management agreement, management of the Bursa Korupark, Istanbul Torium and Antalya Deepo is conducted by Torun AVM and the management of Bursa Zafer Plaza is conducted by Zafer Plaza İşletmeciliği A.Ş. (Note 23). Common area expenses consist of electricity, water, security, cleaning, advertising and other common area expenses of the shopping malls. Common area income consists of expenses of the common area expenses charged to tenants. The commercial goods sales and cost of commercial goods sold are related to sales of machinery, equipment to lessees of Torium Shopping Mall and goods sales to the owner of residences in Nishistanbul Project. 46

NOTE 17 - MARKETING, SELLING AND DISTRIBUTION, GENERAL ADMINISTRATIVE EXPENSES General administrative expenses Taxes, duties and fees (6,047) (5,056) Personnel expenses (2,956) (1,487) Consultancy expenses (1,661) (943) Donations (1,062) (4,161) CMB quotation and public offering expenses (494) (10,818) Depreciation expenses (291) (183) Transportation and travel expenses (265) (165) Other (1,001) (685) (13,777) (23,498) CMB quotation and public offering expenses are composed of ISE quotation, CMB registry and consultancy expenses which are related to public offering. The major part of taxes, duties and fees are related to property taxes. The property taxes are amounting to TL 3,726 in 2011 and TL 3,047 in 2010. The Group made TL501 donation to Akdeniz University in the form of building materials on behalf of Antalya Deepo Shopping mall and TL495 donation was made in clothing donation to school children through Erzincan governorship social aid and solidarity foundation. In 2010, TL4,000 donations was made to the Bursa metropolitan municipality in order to provide mass transportation to Korupark Shopping mall with light railway system and to name the metro station as Korupark. Marketing, selling and distribution expenses 2011 2010 Marketing expenses for residence sales (6,860) (1,626) Advertising expenses (2,987) (2,462) Marketing and organization expenses for shopping malls - (973) Other (891) (481) (10,738) (5,542) 47

NOTE 18 - EXPENSES BY NATURE 2011 2010 Common area expenses (36,560) (16,113) Cost of residence sales (20,231) (122,099) Marketing expenses of residence sales (6,860) (1,626) Taxes, duties and fees (6,047) (5,056) Rent expenses and management fees of shopping malls (4,790) (3,383) Advertising expenses (2,987) (2,462) Personnel expenses (2,956) (1,487) Consultancy expenses (1,661) (943) Cost of commercial goods sold & services charges (1,156) (2,637) Donations (1,062) (4,161) Public offering and CMB quotation expenses (494) (10,818) Depreciation expenses (291) (183) Transportation and travel expenses (265) (165) Goodwill expenses - (8,250) Marketing expenses for shopping malls - (973) Other (1,909) (1,594) (87,269) (181,950) NOTE 19 - OTHER INCOME/EXPENSES Other income 2011 2010 Net gain from fair value adjustment on investment property (Note 8) 182,534 166,660 Other 1,747 540 Other expenses 184,281 167,200 Allowance for the decline in the value of inventories (5,377) - Other (1,956) (1,269) (7,333) (1,269) 48

NOTE 20 - FINANCIAL INCOME/EXPENSES Financial income: Interest income on time deposits 49,639 18,233 Gains on derivative financial instruments, net 2,564 - Foreign exchange gains, net (*) - 3,562 Other - 1,282 Financial expenses: 52,203 23,077 Foreign exchange losses, net (*) (122,414) - Interest expenses (48,305) (39,208) Other (186) (184) (*) The Group has shows same period s foreign exhange losses and gains have in net. (170,905) (39,392) NOTE 21 - EARNINGS PER SHARE In Turkey, companies can increase their share capital by making a pro-rata distribution of shares ( Bonus Shares ) to existing shareholders from retained earnings and revaluation surplus. The issue of such shares is treated as the issuance of ordinary shares in the calculation of earnings per share. Earnings per share disclosed in the consolidated income statement is determined by dividing net income attributable to ordinary shareholders by the weighted average number of shares existing during the period concerned. Net income attributable to equityholders of the parent in full TL 177,312 214,245 Weighted average number of ordinary shares 224,000,000 185,468,871 0,79 1,16 49

NOTE 22 - TAX ASSETS AND LIABILITIES The Company is exempt from corporate income tax in accordance with paragraph d-4 of Article 5 of the Corporate Income Tax Law and in accordance with paragraph 6-a of Article 94 of the Income Tax Law, the earnings of the real estate investment trusts are subject to withholding taxes, According to the Council of Ministers decision, No: 93/5148, the withholding tax rate is determined as "0". Therefore, the Company has no corporate tax obligation. Tax charges for the period ended at 31 December 2011 and 2010 are as follows: Currenct period Corporate tax provision (1,801) (1,274) Deferred tax charge - - Deferred taxes (1,801) (1,274) The Company does not recognise any deferred tax assets and liabilities based on temporary differences arising between the balance sheet items as reported for IFRS purposes and the statutory financial statements since the Company is exempt from corporate income tax after the REIC conversion on 25 January 2008. NOTE 23 - BALANCES AND TRANSACTIONS WITH RELATED PARTIES a) Balances with related parties at 31 December 2011 and 2010 are as follows: Trade payables to related parties: Torun Yorum 607 - Torun Yapı 171 701 Other 24 4 802 705 Other liabilities to related parties: Torun AVM 4,941 2,776 Torunlar Gıda 1,060 20 6,001 2,796 Trade receivables from related parties: Torun AVM 3,137 1,304 Torunlar Aşçıoğlu Kapıcıoğlu Proje Ortaklığı 155 34,008 Torun Yorum 13 - Other 2-3,307 35,312 50

NOTE 23 - BALANCES AND TRANSACTIONS WITH RELATED PARTIES (Continued) Torun AVM, is providing management and administration services to Istanbul Torium, Antalya Deepo and Bursa Korupark Shopping Malls which are owned by the Company. In accordance with the management agreement signed for Bursa Korupark Shopping Mall, management fee is paid to Torun AVM which is 2% (VAT excluding) of the sum of montly TL rent bills charged to tenants. In accordance with the management agreement signed for Antalya Deepo Shopping Mall, management fee is paid to Torun AVM which is 2% (excluding VAT) of the sum of the monthly TL rents charged to the tenants. a) Notes receivable from related parties at 31 December 2011 and 2010 are as follows: Notes receivable from related parties: Torunlar Gıda - 105-105 b) For the years ended 31 December 2011 and 2010 rent and interest income from related parties are as follows: Sales to related parties: 2011 2010 Torun AVM 26,245 21,000 Zafer Plaza İşletmeciliği A,Ş 8,912 8,553 Torunlar Gıda 9 6 Torun Yapı - 6 51 35,166 29,565 Zafer Plaza İşletmeciliği A.Ş. is providing management and administration services to Zafer Plaza Shopping Mall which is owned by the Company. In accordance with the management agreement signed for Zafer Plaza Shopping Mall, Torunlar REIC has a fixed rent income amounting to TL8,900 for the years 2011 and TL 8,400 for the year 2010. c) For the years ended 31 December 2011 and 2010 commission paid, service and interest expenses to related parties are as follows: 2011 2010 Purchases from related parties: Torun AVM 22,579 7,860 Torun Yorum 7,943 - Torun Yapı 2,242 8,936 Torunlar Gıda 782 86 Torun Pazarlama A,Ş, 103 55 Other 7-33,656 16,937 Trade payables to Torun Yapı as of 31 December 2011 are related to the subcontractor activities of Torun Yapı for the ongoing real estate projects.

NOTE 23 - BALANCES AND TRANSACTIONS WITH RELATED PARTIES (Continued) Interest expenses: 2011 2010 Torunlar Gıda 1,171 - Torun AVM 349 265 1,520 265 Advances given to related parties 2011 2010 Torun Yorum 1,109 - d) Remuneration of top management 2011 2010 Salaries and premiums 1,553 862 The remuneration of top management consists of short-term wages and other short-term benefits and free from long-term benefits. NOTE 24 - FINANCIAL RISK MANAGEMENT The Company s activities expose it to a variety of financial risks, including the effects of changes in debt and equity market prices, foreign currency exchange rates and interest rates. The Company s management focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the Company. Liquidity Risk Liquidity risk is the inability of the Group to match the net funding requirements with sufficient liquidity. The Group management tries to avoid liquidity risk from daily operations by trying to keep sufficient levels of cash and to have open credit lines with creditors. Management also tries to align the repayment of borrowings obtained for the construction and acquisition of investment properties with the rental revenue streams from such properties to the extent possible. For the construction of residential units the Group obtains cash advances from customers by engaging in pre-sales agreements to minimize the funding requirement in such projects. 52

NOTE 24 - FINANCIAL RISK MANAGEMENT (Continued) The analysis of the Group s financial liabilities with respect to their maturities as of 31 December 2011 is as follows: Carrying Contractual Up to 3 months 1 year - Over value cash flows 3 months to 1 year to 5 years 5 years Short-term financial liabilities (Non-derivative): Financial liabilities 290,456 321,201 67,718 253,483 - - Advances received 52,383 52,383-52,383 - - Trade payables 32,061 32,061 32,061 - - - Due to related parties 6,803 6,803 6,803 - - - Other short-term liabilities 6,691 6,991 6,991 - - - 388,394 419,439 113,573 305,866 - - Long-term financial liabilities (Non-derivative): Financial liabilities 811,373 927,652 - - 709,094 218,558 Provisions 85 85 - - 85 - Other long-term liabilities 210,793 210,793 - - 210,793-1,022,251 1,138,530 - - 919,972 218,558 1,410,645 1,557,969 113,573 305,866 919,972 218,558 Carrying Contractual Up to 3 months 1 year - Over Derivative financial liabilities value cash flows 3 months to 1 year to 5 years 5 years Derivative cash inflows 288,239 288,239 288,239 - - - Derivative cash outflows (288,239) (288,239) (288,239) - - - Derivative instruments, net cash inflows - - - - - - 53

NOTE 24 - FINANCIAL RISK MANAGEMENT (Continued) The analysis of the Group s financial liabilities with respect to their maturities as of 31 December 2010 is as follows: Carrying Contractual Up to 3 months 1 year - Over value cash flows 3 months to 1 year to 5 years 5 years Short-term financial liabilities (Non-derivative): Financial liabilities 235,038 254,567 27,491 227,076 - - Trade payables 31,035 31,035 31,035 - - - Due to related parties 3,501 3,501 3,501 - - - Provisions - - - - - - Other short-term liabilities 12,970 12,970 12,970 - - - 282,544 302,073 74,997 227,076 - - Long-term financial liabilities (Non-derivative): Financial liabilities 552,122 642,101 - - 475,080 167,021 Provisions 90 90-90 - - 552,212 642,191-90 475,080 167,021 834,756 944,264 74,997 227,166 475,080 167,021 Carrying Contractual Up to 3 months 1 year - Over Derivative financial liabilities value cash flows 3 months to 1 year to 5 years 5 years Derivative cash inflows 264,489 264,489 - - 264,489 - Derivative cash outflows (264,489) (264,489) - - (264,489) - Derivative instruments, net cash inflows - - - - - - Interest rate risk The Group is exposed to interest rate risk through the impact of rate changes on interest bearing assets and liabilities. These exposures are managed by offsetting interest rate sensitive assets and liabilities and using derivative instruments when considered necessary. In this context, matching of not only maturities of receivables and payables but also contractual repricing dates are crucial. In order to keep the exposure of financial liabilities to interest rate changes at a minimum, fixed interest/floating interest, short-term/long-term, TL/foreign currency balance should be structured consistent within and with assets in the balance sheet. Financial instruments which have been classified as other financial liabilities in the Company s balance sheet have been exposed to the interest risk as a result of change in prices. At 31 December 2011, if interest rates at contractual repricing dates of TL denominated financial assets and liabilities with variable interest rates have strengthened/weakened by 1% with all other variables held constant, income would have been TL17 lower/higher as a result of interest expenses. (31 December 2010: TL41). 54

NOTE 24 - FINANCIAL RISK MANAGEMENT (Continued) Borrowings with floating interest rate which have been classified as financial liabilities in the Company s balance sheet have been exposed to the interest risk as a result of change in interest rates. At 31 December 2011, if interest rates at contractual repricing dates of EUR and USD denominated financial assets and liabilities with variable interest rates have strengthened/weakened by 1% with all other variables held constant, income would have been TL3,273 lower/higher as a result of interest expenses. (31 December 2010: TL1,040). Average effective annual interest rates of balance sheet items as of 31 December 2011 and 2010 are as follows: 31 December 2011 (%) TL EUR USD Current assets Cash and cash equivelants 11,44% 4,17% 5,52% Current liabilities Financial liabilities 14,50% 4,94% 5,07% Non-current liabilities Financial liabilities 4, 94% 5,02% 31 December 2010 (%) TL EUR USD Current assets Cash and cash equivelants 8,84% 4,09% 5,52% Trade receivables 7,16% - - Current liabilities Financial liabilites 8,64% 4,74% 4,36% Non-current liabilities Financial liabilities - 4,91% 5,82% The Company s financial instruments that are sensitive to interest rates are as follows: Financial instruments with fixed interest rate Time deposits 596,934 438,591 Financial assets - 29,459 Financial liabilities 493,609 518,736 Financial instruments with floating interest rate Financial liabilities 606,907 264,527 55

NOTE 24 - FINANCIAL RISK MANAGEMENT (Continued) Group s financial assets and liabilities in carrying amounts classified in terms of periods remaining to contractual repricing dates as of 31 December 2011 are as follows: 31 December 2011 Up to 3 months More than Non-interest 3 months to 1 year 1 year bearing Total Cash and cash equivelants 596,934 - - 454 597,388 Financial assets 58,197 - - 58,197 Trade receivables 28,292 39,482 60,079-127,853 Due from related parties 3,307 - - - 3,307 Inventories - - 100,805 100,805 Advances given - 9,742 - - 9,742 Other current assets 4,058 - - - 4,058 Investment property - - 2,457,490 2,457,490 Tangible fixed assets - - - 874 874 Intangible fixed assets - - - 86 86 Investment in associates - - - 164,189 164,189 Long term advances given - - 108,063-108,063 Other non-current assets - - 49,093-49,093 Long term inventories - - - 262,406 262,406 Total assets 632,591 107,421 217,235 2,986,304 3,943,551 Bank borrowings (685,170) (415,346) - - (1,100,516) Other financial Liabilities (1,313) - - - (1,313) Trade payables (32,061) - - - (32,061) Advances received - (52,383) (210,785) - (263,168) Due to related parties (6,803) - - - (6,803) Provisions for employment termination benefits - - - (85) (85) Other liabilities (6,691) - (8) - (6,699) Total liabilities (732,038) (467,729) (210,793) (85) (1,410,645) Net repricing position (99,447) (360,308) 6,442 2,986,219 2,532,906 56

NOTE 24 - FINANCIAL RISK MANAGEMENT (Continued) 31 December 2010 Up to 3 months More than Non-interest 3 months to 1 year 1 year bearing Total Cash and cash equivelants 266,439 172,156-69 438,664 Financial assets - - 29,459-29,459 Trade receivables 13,584 705 4,729-19,018 Due from related parties 35,417 - - - 35,417 Other current assets 39,642 - - - 39,642 Inventories - - - 51,769 51,769 Investment property - - - 2,388,865 2,388,865 Tangible fixed assets - - - 1,115 1,115 Intangible fixed assets - - - 82 82 Investment in associates - - - 125,458 125,458 Other non-current assets - - 74,350-74,350 Total assets 355,082 172,861 108,538 2,567,358 3,203,839 Borrowings (444,920) (342,220) - - (787,140) Finance lease liabilities (20) - - - (20) Trade payables (31,035) - - - (31,035) Due to related parties (3,501) - - - (3,501) Provisions for employment termination benefits - - - (90) (90) Other liabilities (12,970) - - - (12,970) Total liabilities (492,446) (342,220) - (90) (834,756) Net repricing position (137,364) (169,359) 108,538 2,567,268 2,369,083 Credit risk The Group is subject to credit risk arising from trade receivables related to credit sales and deposits at banks. The Group keeps majority of its deposits with top 10 retail banks established in Turkey, with which the Group had standing relations. Credit risk mainly consists of receivables from related parties. Credit risk of receivables from third parties is managed by securing receivables with collaterals covering receivables at the highest possible proportion. Methods used are as follows: Bank guarantees (letter of guarantee, letter of credit, etc.), Mortgage on real estate, Cheques and notes, In credit risk control, the credit quality of each customer is assessed; taking into account its financial position, past experience and other factors, individual risk limits are set in accordance and the utilisation of credit limits is regularly monitored. 57

NOTE 24 - FINANCIAL RISK MANAGEMENT (Continued) Credit and receivable risk of financial instruments as of 31 December 2011 is as follows: Trade receivables Deposits in 31 December 2011 Related party Other party Banks Maximum exposed credit risk as of reporting date 3,307 127,853 597,125 Secured portion of the maximum credit risk by guarantees, etc, - 9,931 - A, Net book value of financial assets that are either not due or not impaired 3,307 127,853 597,125 - Secured portion by guarantees, etc, - 9,931 - B, Financial assets with renegotiated conditions - - - - Secured portion by guarantees, etc - - - C, Net book value of the expired but not impaired financial assets - - - - Secured portion by guarantees, etc, - - - D, Net book value of impaired assets - Overdue (Gross book value) - 2,296 - - Not overdue (Gross book value) - - - Impairment (-) - (2,296) - - Secured portion of the net value by guarantees, etc, - - - Credit and receivable risk of financial instruments as of 31 December 2010 is as follows: Trade receivables Deposits in 31 December 2010 Related party Other party Banks Maximum exposed credit risk as of reporting date 35,417 19,018 438,591 Secured portion of the maximum credit risk by guarantees, etc, - 3,970 - A, Net book value of financial assets that are either not due or not impaired 35,417 15,048 438,591 - Secured portion by guarantees, etc, - - - B, Financial assets with renegotiated conditions - - - - Secured portion by guarantees, etc, - - - C, Net book value of the expired but not impaired financial assets - 2,096 - - Secured portion by guarantees, etc, - 2,096 - D, Net book value of the impaired assets - Overdue (Gross book value) - 1,874 - - Not overdue (Gross book value) - - - - Impairment (-) (1,874) - Secured portion of the net value by guarantees, etc, - - - 58

NOTE 24 - FINANCIAL RISK MANAGEMENT (Continued) While determining the above-mentioned amounts, the factors that increase the credibility such as guarantees received are not considered. In the financial assets of the Company which are subject to credit risk, no impairment risk has been identified. Additionally, Company s off balance sheet items which are subject to credit risk include overdued but not impaired assets. a) Credit quality of not yet due, not impaired receivables whose conditions are re-negotiated Group 1 - - Group 2 127,853 14,515 Group 3 - - 127,853 14,515 Group 1 - New customers (less than three months) Group 2 - Existing customers with no defaults in the past (more than three months) Group 3 - Existing customers with some defaults in the past which were however fully recovered with some delay, b) The aging table of the receivables that are past due but not impaired Past due 0-1 month - 2,096 Foreign exchange risk - 2,096 The Group is exposed to foreign exchange rate risk through operations done using multiple currencies. The main principle in the management of this foreign currency risk is maintaining foreign exchange position in a way to be affected least by the fluctuations in foreign exchange rates, in other words, maintaining foreign exchange position close to zero. For this reason, the proportion of the positions of these currencies among each other or against new Turkish lira to shareholders equity is aimed to be controlled under certain limits. The Group is exposed to foreign exchange rate risk mainly for EUR and USD. 59

NOTE 24 - FINANCIAL RISK MANAGEMENT (Continued) Foreign currency position Foreign currency denominated assets, liabilities and off-balance sheet accounts give rise to foreign exchange exposure. Company s assets and liabilities in foreign exchange are not balanced through any off balance sheet instruments as of 31 December 2011. The company does not have any export or import activity in 2011 and 2010. Foreign currency denominated assets and liabilities held by the Group are as follows: Assets 223,130 219,902 Liabilities (1,067,927) (771,110) Net on-balance sheet position (844,797) (551,208) Net off-balance sheet derivatives positions (15,111) - Net foreign currency position (859,908) (551,208) 60

NOTE 24 - FINANCIAL RISK MANAGEMENT (Continued) The table below summaries foreign currency position risk of the Company as of 31 December 2011. The original currency amounts of assets and liabilities denominated in foreign currencies and the total TL equivalent at 31 December 2011 are as follows: TL EUR USD Equivalent Current assets 19,433 92,985 223,130 Monetary financial assets 17,817 88,366 210,457 Other assets 1,616 4,619 12,673 Total assets 19,433 92,985 223,130 Current liabilities (30,810) (95,963) (256,554) Trade payables (1,579) (836) (5,435) Financial liabilities (29,228) (95,127) (251,112) Other current liabilities (3) - (7) Non-current liabilities (107,545) (290,408) (811,373) Financial liabilities (107,545) (290,408) (811,373) Total liabilities (138,355) (386,371) (1,067,927) Net balance sheet position (118,922) (293,386) (844,797) Derivative financial assets 116,850-285,558 Derivative financial assets (116,850) (8,000) (300,669) Net position of off-balance sheet items - (8,000) (15,111) Net foreign currency asset / (liability) position (118,922) (301,386) (859,908) Net foreign currency position against currencies is as follows: Against EUR (290,621) Against USD (569,287) Net foreign currency position (859,908) 61

NOTE 24 - FINANCIAL RISK MANAGEMENT (Continued) The table below summaries foreign currency position risk of the Company as of 31 December 2010. The original currency amounts of assets and liabilities denominated in foreign currencies and the total TL equivalent at 31 December 2010 are as follows: TL EUR USD equivalent Current assets 25,358 108,630 219,902 Trade receivables - 1,052 1,626 Monetary financial assets 25,358 107,578 218,276 Total assets 25,358 108,630 219,902 Current liabilities (14,429) (122,524) (218,988) Trade payables (1,142) (2,994) (6,968) Financial liabilities (13,287) (119,530) (212,020) Non-current liabilities (119,871) (198,250) (552,122) Financial liabilities (119,871) (198,250) (552,122) Total liabilities (134,300) (320,774) (771,110) Net balance sheet position (108,942) (212,144) (551,208) Derivative financial assets 127,900 - - Derivative financial assets (127,900) - - Net position of off-balance sheet items - - - Net foreign currency asset / (liability) position (108,942) (212,144) (551,208) Net foreign currency position against currencies is as follows: Against EUR - - (223,233) Against USD - - (327,975) Net foreign currency position - - (551,208) 62

NOTE 24 - FINANCIAL RISK MANAGEMENT (Continued) The table below shows the Company s sensitivity for 10% fluctuation of USD and EUR. These amounts represent the effect on the consolidated statement of comprehensive income of 10% fluctuation of USD and EUR against TL. During this analysis all other variables especially interest rate are assumed to remain constant. Foreign currency sensitivity analysis as of 31 December 2011 and 2010 are as follows: Gain/Loss Equity 31 December 2011 Appreciation Depreciation Appreciation Depreciation +/- 10% fluctuation in USD rate USD net asset/liability (30,139) 30,139 - - Secured portion from USD risk USD net effect (30,139) 30,139 - - +/- 10% fluctuation in EUR rate EUR net asset/liability (11,892) 11,892 - - Secured portion from EUR risk EUR net effect (11,892) 11,892 - - Gain/Loss Equity 31 December 2010 Appreciation Depreciation Appreciation Depreciation +/- 10% fluctuation in USD rate USD net asset/liability (21,214) 21,214 - - Secured portion from USD risk USD net effect (21,214) 21,214 - - +/- 10% fluctuation in EUR rate EUR net asset/liability (10,894) 10,894 - - Secured portion from EUR risk EUR net effect (10,894) 10,894 - - Capital risk management The Company attempts to manage its capital by minimising the investment risk with portfolio diversification. The Company s objectives are to safeguard the Group s sustainability as a going concern to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital and to keep a gearing ratio that is in-line with industry averages. When the company manages the capital, the Group aims to provide returns to shareholders and to reduce cost of capital, to maintain optimal capital structure by protecting group s operation ability. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. 63

NOTE 24 - FINANCIAL RISK MANAGEMENT (Continued) Gearing ratios as of 31 December 2011 and 2010 are as follows: Total liabilities 1,410,645 834,756 Cash and cash equivalents (597,388) (438,664) Net debt 813,257 396,092 Total shareholders equity 2,532,906 2,369,083 Invested capital 224,000 224,000 Gearing ratio 32% 17% NOTE 25 - FINANCIAL INSTRUMENTS Fair value of financial instruments Fair value is the amount at which a financial instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation, and is best evidenced by a quoted market price, if one exists. The fair values of financial instruments that are not traded in an active market have been determined by the Company using available market information and appropriate valuation methodologies. However, judgement is necessarily required to interpret market data to estimate the fair value. Accordingly, the estimates presented herein may differ from the amounts the Company could realise in a current market exchange. The following methods and assumptions were used to estimate the fair value of the financial instruments for which it is practicable to estimate fair value: Financial assets: The fair values of cash and due from banks are considered to approximate their respective carrying values due to their short-term nature. Expertise values are used on the determination of the fair values of investment property (Note 8). The carrying values of trade receivables, which are measured at amortised cost, along with the related allowances for uncollectability are assumed to approximate their fair values. The fair values of balances denominated in foreign currencies, which are translated at period-end official exchange rates announced by the Central Bank of Turkey, are considered to approximate their carrying value. 64

NOTE 25 - FINANCIAL INSTRUMENTS (Continued) Financial liabilities: The fair value of liabilities arising from financial leasing are considered to approximate their respective carrying values due to their short-term nature. Derivative financial instruments are carried at their fair values. Carrying values and fair values of TL and foreign currency denominated borrowings fixed and floating rates are as follows: Carrying values Fair values 31 December 31 December 31 December 31 December 2011 2010 2011 2010 Financial liabilities 1,100,516 783,263 1,161,559 783,016 NOTE 26 - SUBSEQUENT EVENTS Share repurchases The Group has implemented share repurchase programme by using TL30 million in order to protect investors and support share performance. In this context, totally 205,000 shares with the transaction value of TL836 within a price range of TL3.90 and TL4.34 has been repurchased between 21 November and 15 December 2011 and after balance sheet date, 68,299 shares have been repurchased in March 2012 in a price range of TL5.16 to TL5.30. Total purchased shares ratio to the capital in the subsequent period is %0,03 and total repurchased stocks ratio to the issued capital is %0,12. Real estate purchases The Group purchased 105,46 squaremeter land for TL455 on 2 March 2012 which was owned by 6 shareholders on 18,208.90 squaremeters real estate located in İstanbul, Başakşehir, İkitelli-2, Block 858, lot 1 where Mall of Istanbul Project is planned and valued with TL3,750 as unit price per m² in the valuation report of Standart Gayrimenkul Değerleme Uygulamaları A.Ş. SvP_TRGYO_08 as of 31 December 2011. The Group purchased 180.12 squaremeters land for TL779 on 18 January 2012 which was owned by 1 real person on 18,209.90 squaremeters real estate estate located in İstanbul, Başakşehir, İkitelli-2, Block 858, lot 1 next to the Block 858, lot 2 which is the place of Mall of Istanbul Project. The Group gave the highest bid of TL355,000 to the tender held by Republic of Turkey Prime Ministry Privatization Administration related to the real estate (old distillery) and docks located in İstanbul, Beykoz, Paşabahçe on 29 March 2012. Possible share sale of the subsidiary For the transfer to ECE European Prime Shopping Centre Fund A/B/C Invest Co. S.a.r.l (hereinafter referred to as ECE Group) of 100% of Turkish company Yeni Gimat Isyerleri Işletmesi A.Ş. which owns Ankamall shopping center and Crowne Plaza Hotel located in Ankara where Torunlar REIC Turkey holds 14.83% stake, a confidentiality agreement was signed on 15 March 2012 between ECE Group and Yeni Gimat (hereinafter referred to as the Parties) in order for a legal, technical and financial due diligence to start and if ECE Group finds the outcome of the due diligence satisfactory, the Parties will commence to negotiate the draft agreements where substantial and procedural issues will be drawn out for the transfer of shares. 65

NOTE 26 - SUBSEQUENT EVENTS (Continued) Dividend income from subsidiaries The Group received dividend income amounting TL3.453 on 21 February 2012, regarding 2011 s dividend distribution from Netsel Turizm Yatırımları A.Ş with %44,60 share. NOTE 27 - OTHER ISSUES THAT SIGNIFICANTLY AFFECT THE FINANCIAL STATEMENTS OR OTHER ISSUES REQUIRED FOR THE CLEAR UNDERSTANDING OF FINANCIAL STATEMENTS Approval of Financial Statements: The Group s consolidated financial statements as at 31 December 2011, as audited by independent auditors and rewiewed in accordance with the Capital Markets Board s Communiqué Serial: XI, No: 29, present fairly the consolidated financial position of the Group and the results of its operations in accordance with the regulations issued by the Capital Markets Board and Group accounting policies. With the Board of Directors decision dated 5 April 2012, Assistant General Manager İsmail Kazanç and Accounting Manager Lütfü Vardı are authorized to sign electronically the consolidated financial statements for public disclosure. NOTE 28 - ADDITIONAL NOTES: CONTROL OF COMPLIANCE WITH THE PORTFOLIO LIMITATIONS In accordance with the Principles Regarding Real Estate Investment Companies Communiqué with Series VI, No: 11, information on control of compliance with the portfolio limitations is given in a way defined by the CMB and by using non-consolidated financial statement items. The related information may not be consistent with the informations given in consolidated financial statements. In this context, informations related to control of compliance with the portfolio limitations is as follows as of 31 December 2011 and 2010: Non-consolidated (stand-alone) Related 31 December 31 December financial statements main account items regulations 2011 2010 A Money and capital market instruments Series: VI, No: 11, Art.27/(b) 655,483 464,472 B Properties, projects based on properties and rights based on properties Series: VI, No: 11, Art,27/(a) 2,545,012 2,198,696 C Subsidiaries Series: VI, No: 11, Art,27/(b) 446,290 377,727 Due from related parties (Non commercial) Series: VI, No: 11, Art,24/(g) - - Other assets 204,415 170,769 D Total assets Series: VI, No: 11, Art,4/(i) 3,851,200 3,211,664 E Financial liabilities Series: VI, No: 11, Art,35 963,218 779,348 F Other financial liabilities Series: VI, No: 11, Art,35 1,313 3,877 G Due from financial leases Series: VI, No: 11, Art,35-20 H Due to related parties (Non commercial) Series: VI, No: 11, Art,24/(g) - - I Shareholder s equity Series: VI, No: 11, Art,35 2,563,236 2,384,233 Other liabilities 323,433 44,186 D Total liabilities Series: VI, No: 11, Art,4/(i) 3,851,200 3,211,664 66

NOTE 28 - ADDITIONAL NOTES: CONTROL OF COMPLIANCE WITH THE PORTFOLIO LIMITATIONS (Continued) Non-consolidated (stand-alone) Related 31 December 31 December financial statements main account items Regulations 2011 2010 A1 The portion of money and capital market instruments held for payables of properties for the following 3 years Series: VI, No: 11, Art.27/(b) 389,684 307,960 A2 TL and foreign currency time and demand depositsseries: VI, No: 11, Art,27/(b) 655,483 464,472 A3 Foreign capital market instruments Series: VI, No: 11, Art,27/(c) - - B1 Foreign properties, projects based on properties and rights based on properties Series: VI, No: 11, Art,27/(c) - - B2 Idle lands Series: VI, No: 11, Art,27/(d) - - C1 Foreign affiliates Series: VI, No: 11, Art,27/(c) - - C2 Investments in affiliated operating companies Series: VI, No: 11, Art,32/A - - J Non-cash loans Series: VI, No: 11, Art,35 52,378 52,533 K Mortgage amount on non-owned land to be developed Series: VI, No: 11, Art,25/(n) - - Minimum / Related 31 December 31 December maximum Portfolio limitations regulations 2011 2010 rate 1 Mortgage amount on non-owned land to be developed (K/D) Series: VI, No: 11, Art.25/(n)0% 0% <10% 2 Properties, projects based on properties and rights based on properties (B+A1)/D) Series: VI,No:11, Art.27/(a),(b)76% 78% >50% 3 Money and capital market instruments and affiliates (A+C-A1)/D) Series: VI, No: 11, Art.27/(b)18% 17% <50% 4 Foreign properties, projects based on properties rights based on properties, affiliates, capital market instruments (A3+B1+C1/D) Series:VI,No:11, Art.27/(c) 0% 0% <49% 5 Idle lands(b2/d) Series:VI,No:11, Art.27/(d) 0% 0% <20% 6 Investment in affiliated operating companies (C2/D) Series:VI,No:11, Art.32/A 0% 0% <10% 7 Borrowing limit (E+F+G+H+J)/I Series:VI,No:11, Art.35 40% 35% <500% 8 TL and foreign currency Series:VI,No:11, Art.27/(b) 7% 5% <10% time and demand deposits (A2-A1)/D 67

NOTE 28 - ADDITIONAL NOTES: CONTROL OF COMPLIANCE WITH THE PORTFOLIO LIMITATIONS (Continued) Shareholding rate Associate (%) TL TL TRN 99,99% 236,938 212,630 Yeni Gimat 14,83% 153,957 115,886 TTA 40,00% 32,570 338 Torunlar Özyazıcı 60,00% 11,943 39,300 Netsel 44,60% 10,232 9,573 Torunlar-Aşçıoğlu-Kapıcıoğlu 65,00% 650-446,290 377,727 Yeni Gimat, Netsel, TTA, TRN, Torunlar Özyazıcı and Torunlar-Aşçıoğlu-Kapıcıoğlu which are associates, subsidiaries and joint ventures of the Group (all together Subsidiaries ) do not have valuation reports as of 31 December 2011. For the purposes of the control of compliance with the portfolio limitations, net asset values of subsidiaries are used. In this respect, TRN, Yeni Gimat and TTA s stand-alone financial statements which are prepared in accordance with financial reporting standards of the Group, are multiplied with the Group s ownership rate in the related subsidiary. Thus, it is assumed that net values which are determined by adding and deducting net receivables/ liabilities as of balance sheet date from the investment properties that are owned by subsidiaries and followed in stand-alone financial statements with fair values, approximate to the fair value of the subsidiaries. Investment properties which are owned by subsidiaries are explained in Note 1 in detail. Since, there are no valuation reports of Torunlar Özyazıcı and Netsel, net asset values of the subsidiaries based on their stand-alone financial statements are taken into account and they are multiplied with Group s share in these subsidiaries. As it is explained in Note 1 in detail, Torunlar, Aşçıoğlu Kapıcıoğlu partnership was founded with the title of Torunlar Aşçıoğlu Kapıcıoğlu partnership at 18 October 2010 for the tourism trade and recreation area on the condition that all expenses would be covered by contractor company, on the location İstanbul, Şişli, Dikilitaş, place of Ali Sami Yen Stadium, Plate 58, Block 1199, Lot 384 which is owned by The Republic of Turkey Prime Ministry Housing Development Administration of Turkey. As of 31 December 2011 and 2010, licence related to the project has not been obtained and construction has not started yet. In this context, subsidiary value has been included in the control of compliance with the portfolio limitations table with the historical cost value.. 68