Contents. Introduction 02 SAF GYO in Brief 06 Key Indicators 10 Vision, Mission

Board of Directors Annual Report 2011

Contents Introduction 02 SAF GYO in Brief 06 Key Indicators 10 Vision, Mission From the Management 12 Message from the Chairman 14 Board of Directors 18 Message from the General Manager 20 Executive Management and Committees Activities 24 Sector Developments in 2011 26 Projects Corporate Management 36 Risk Management Policies 38 Information Policy 40 Ethical Principles 42 Corporate Governance Principles Compliance Report 50 Amendments made to the Articles of Incorporation during the Year 55 Dividend Distribution Policy 56 Summary Appraisal Reports Financial Tables and Notes 65 Financial Tables and Independent Auditors Report as of December 31, 2011

The diamond of the real estate industry One of the shining jewels of the real estate industry, thanks to its robust financial position, high profitability and well experienced shareholders, SAF GYO is currently developing office buildings and residential projects of ever increasing value.

SAF GYO in Brief SAF GYO has become one of the top valued companies traded on the ISE resulting from its very first project, Akasya Acıbadem. Sağlam Gayrimenkul Yatırım Ortaklığı A.Ş. was established in 2005 to make investments in real properties, real property based capital market instruments, real property projects, real property based rights and capital market instruments as specified in the Communiqué on Principles for Real Estate Investment Trusts, issued by the Capital Markets Board (CMB) and to carry on other activities permitted by the Communiqué. Sağlam Gayrimenkul Yatırım Ortaklığı A.Ş. with its net asset value of TL 75,183,397. - and Saf Gayrimenkul Geliştirme İnşaat ve Ticaret A.Ş. with its discounted cash flow value of TL 1,115,133,125.- adopted a resolution on the merger of the two entities at the Extraordinary General Assembly Meeting held on October 31, 2011. As a result, the Company s paid-in capital increased to TL 886,601,669.- and the registered capital limit to TL 2,000,000,000.-. During this merger process, Article 2 of Sağlam Gayrimenkul Yatırım Ortaklığı A.Ş. Articles of Association was amended and the Company s amended trade name is now Saf Gayrimenkul Yatırım Ortaklığı A.Ş. Established upon the merger of two companies, Saf Gayrimenkul Yatırım Ortaklığı A.Ş. rankes as the second largest real estate investment trust traded on the ISE, on terms of market value. As of December 31, 2011, the Company s market value was TL 1,179,180,219. With its strategy to contribute to the ever increasing importance of the Turkish real estate sector with high quality projects, SAF GYO has become one of the most reputable companies of the sector in a short period of time. The Company s Akasya Acıbadem project, built on 121,000 m² land in the Acıbadem area of Istanbul with total sellable area of 206,100 m², consists of three stages: Akasya Göl (Akasya Lake), Akasya Koru (Akasya Grove) and Akasya Kent (Akasya Town). The project comprises 1,349 housing units; of this total, the Göl stage contains 459 units, the Koru stage 432 and the Kent stage 458 units. 891 units of the first two stages have been sold out and was handed over to the owners. Some 352 units of the Kent stage were sold in a short period of time and it is anticipated that these units will be handed over during September 2013. Besides these housing units, construction of the shopping mall is underway; the mall will be the largest shopping mall on the Asian side of Istanbul, has 81,000 m² leasable area in the Kent Stage and has qualified for Breem Certification. The Company s portfolio also contains Fecir Business Centre with an indoor area of 19,836 m 2 ; Rozi Factory Premises with an indoor area of 30,202 m 2 ; Antalya BTM Building with indoor area of 4,230 m²; Altunizade BTM Building with an indoor area of 3,454 m²; and offices with indoor area of 1,125 m² located in the Mecidiyeköy Business Centre. Drawing on the significant sector experience and know-how of its major shareholders, SAF GYO has become one of the leading real estate investment trusts, closely followed by customers who not only seek to acquire top quality residences but also to make investments. With new projects it intends to launch in the near future, the Company aims to raise the quality level in the sector. 2 SAF GYO 2011 Annual Report Introductıon

3

SAF GYO in Brief SAF GYO was formed as a union of strengths bringing the most powerful companies of the sector together under one roof. SAF GYO A.Ş. Shareholding Structure Name of Shareholder Group A Group B Total shares (units) Stake % Sinpaş Group 0 145,388,515 145,388,515 16.40 Avni Çelik 0 1,694,427 1,694,427 0.19 Sinpaş Yapı End. ve Tic A.Ş. 82,262,789 82,262,789 9.28 Sinpaş Gayrimenkul Yat. Ort. A.Ş. 61,431,299 61,431,299 6.93 Eksim Group 0 62,261,901 62,261,901 7.02 AGE Investment Holding B.V. 53,989,108 53,989,108 6.09 Abdullah Tivnikli 8,272,793 8,272,793 0.93 Ülker Group 400,000 234,275,032 234,675,032 26.47 Yıldız Holding A.Ş. 213,650,417 213,650,417 24.10 Murat Ülker 200,000 6,800,000 7,000,000 0.79 Ahsen Özokur 200,000 6,800,000 7,000,000 0.79 Gözde Girişim Sermayesi Yatırım Ortaklığı A.Ş. 4,081,842 4,081,842 0.46 Ülker Çikolata San. A.Ş. 2,942,765 2,942,765 0.33 Mahmut Mahir Kuşçulu 4 4 0.00 İsmail Bacacı 4 4 0.00 Akkök Group 0 299,016,602 299,016,602 33.73 Akiş G.Menkul Yatırımı A.Ş. 58,142,186 58,142,186 6.56 Atlantik Holding A.Ş. 19,380,706 19,380,706 2.19 Ali Raif Dinçkök 83,054,595 83,054,595 9.37 Ömer Dinçkök 62,295,125 62,295,125 7.03 Raif Ali Dinçkök 20,931,162 20,931,162 2.36 Ayça Dinçkök 8,306,017 8,306,017 0.94 Gamze Dinçkök Yücaoğlu 8,306,017 8,306,017 0.94 Mutlu Dinçkök 8,306,017 8,306,017 0.94 Alize Dinçkök Eyüboğlu 2,608,089 2,608,089 0.29 Nilüfer Çiftçi 19,380,671 19,380,671 2.19 Aslan Badi 8,306,017 8,306,017 0.94 Doğu Batı Group 0 116,284,234 116,284,234 13.12 Doğu Batı San.Ürünleri A.Ş. 8,306,017 8,306,017 0.94 Rıfat Hasan 44,852,490 44,852,490 5.06 Mair Kasuto 29,901,660 29,901,660 3.37 Nesim Özmandıracı 33,224,067 33,224,067 3.75 Public offered 28,975,385 28,975,385 3.27 Total 400,000 886,201,669 886,601,669 100.00 4 SAF GYO 2011 Annual Report Introductıon

SAF GYO Affiliates Ottoman Gayrimenkul Yatırım İnşaat ve Ticaret A.Ş. Ottoman Gayrimenkul participated in a tender held on September 12, 2007 for a building site of 15,500 m², owned by Emlak Konut Gayrimenkul Yatırım Ortaklığı A.Ş., located in the Zeytinburnu area of Istanbul, recorded under city block number 774 and parcel number 52, and acquired this land for TL 87,000,000 + VAT. After development plan implementations, this land was recorded under city block number 774 and parcel number 57, with total area of 13,534 m². Ottoman Gayrimenkul Yatırımları İnşaat ve Ticaret A.Ş. completed the concept design works for the development of the building site, located next to the coastal road along the Marmara Sea in 2010 and was granted the building license in October 2010. 355 units 38,219 m 2 Ottomare Suites Project consists of 355 housing units with a total sellable area of 38,219 m². The Ottomare Suites project, developed on the building land, consists of 355 housing units with a total sellable area of 38,219 m². The units were offered for sale during last quarter of the year 2010 and 86% of the units have been sold to date. 5

Key Indicators SAF GYO has become one of the leading players in the sector in a short period of time and reached a market value of TL 1,179,180,220 as of end-2011. 2011 2010 2009 2008 2007 Equity Development 437,021,444 54,249,197 51,059,236 50,299,085 58,952,984 Summary Income Statement Sales Revenues 585,198,037 8,525,544 8,629,923 3,698,549 1,563,146 Cost of Sales (-) (283,323,216) (1,386,956) (1,409,540) (742,949) (353,757) Gross Profit/Loss 301,874,821 7,138,588 7,220,383 2,955,600 1,209,389 Marketing, Sales & Distribution Expenses (-) (5,144,221) Overhead Expenses (-) (3,717,262) (1,776,551) (1,468,038) (1,573,166) (1,253,051) Other Operating Revenue 2,559,051 1,698,235 162,174 21,736 - Other Operating Expenses (-) (7,485,281) (315,699) (4,999) (181,678) Operating Profit/Loss (13,787,713) (78,316) (1,621,563) (1,556,429) (1,434,729) Financial Gains 61,250,601 9,234,305 11,197,410 23,243,903 6,488,052 Financial Expenses (-) (13,295,442) (13,104,616) (16,036,079) (33,296,973) (4,161,202) Ongoing Activities Pre-Tax Profit/Loss 336,042,267 3,189,961 760,151 (8,653,899) 2,101,510 Ongoing Activities Tax Income/Expense (6,553,922) Profit/Loss for the Period 329,488,345 3,189,961 760,151 (8,653,899) 2,101,510 Asset Allocation Participation Stock 14,400,000 3,600,000 2,386,428 2,053,042 100,000 Cash and Capital Market Instruments 125,438,410 8,124,156 7,985,461 8,229,111 38,198,926 Parcel/Land 0 20,880,000 21,606,866 15,730,000 Factory Building/Sales Outlet 57,760,000 71,970,000 69,500,000 65,940,000 12,090,000 Office Building 19,378,500 19,500,487 19,215,000 27,848,676 12,720,000 Residence 946,106,679 540,891 610,000 Akasya Shopping Mall Project 936,338,281 Total Portfolio Value 2,099,421,870 103,194,643 119,966,889 126,218,586 79,448,926 ISE Share Performance and Market Value ISE Share Performance 1.33 0.89 0.88 0.43 1.18 Paid-in Capital 886,601,669 56,000,000 56,000,000 56,000,000 56,000,000 Market Value 1,179,180,220 49,840,000 49,280,000 24,080,000 66,080,000 6 SAF GYO 2011 Annual Report Introductıon

Net Profit for the Period Sales Revenues 329.5 585.2 In 2011, SAF GYO posted net profit of TL 329.5 million. Sales revenues of SAF GYO reached TL 585.2 million in 2011. 2007 2008 2009 2010 Equıty Development (TL) 58,952,984 50,299,085 51,059,236 54,249,197 2007 2008 2009 2010 Sales Revenues (TL) 1,563,146 3,698,549 8,629,923 8,525,544 2011 437,021,444 2011 585,198,037 Net Profıt (TL) ISE Share Performance (TL) 2007 (8,653,899) 2009 2010 2008 2,101,510 760,151 3,189,961 2007 2008 2009 2010 0.43 0.88 0.89 1.18 2011 329,488,345 2011 1.33 Paıd-ın Capıtal (TL) Market Value (TL) 2007 2008 2009 2010 56,000,000 56,000,000 56,000,000 56,000,000 2007 2008 2009 2010 66,080,000 24,080,000 49,280,000 49,840,000 2011 886,601,669 2011 1,179,180,220 7

Key Indicators Offering a highly profitable portfolio backed by its robust financial position, in 2011 SAF GYO generated a 49% return to investors on the ISE. Projects Locations Total Indoor Area Appraisement Market Value (VAT excluded) Appraisement Rental Value (VAT excluded) Komili Factory Premises Kocaeli/Gebze 30,202 m² TL 42,545,000 TL 305,000 Mecidiyeköy Business Centre Istanbul/Mecidiyeköy 1,125.49 m² TL 3,740,000 TL 24,000 Antalya BTM Building Antalya/Kepez 4,230 m² TL 5,335,000 TL 34,000 Altunizade BTM Building Istanbul/Acıbadem 3,454 m² TL 9,880,000 TL 76,000 Fecir Business Centre Istanbul/Acıbadem 19,836 m² TL 15,640,000 TL 128,934 Akasya Göl Project Istanbul/Acıbadem 98,663 m² TL 307,578,731 - Akasya Koru Project Istanbul/Acıbadem 100,422 m² TL 250,729,519 - Akasya Kent Project-Residence & Shopping Mall Istanbul/Acıbadem 396,639.92 m² TL 1,324,136,711 - * Detailed Summary Appraiser s Report on assets of SAF GYO is presented on page 56 of this Annual Report. INDEX 63,278 64,435 61,284 60,000 69,250 63,046 63,269 62,296 53,946 59,963 SHARE PRICE ISE-100 56,061 REIT SAF GYO 5 54,518 51,267 4 SAF GYO 2011 ISE PERFORMANCE 40,000 44,138 38,523 42,006 45,823 41,573 40,208 38,960 33,298 36,057 35,734 32,462 29,849 3 ISE 100: -22.33% 20,000 1.59 1.13 1.52 1.62 1.47 1.33 2 REIT: -18.16% 0.94 0.82 0.89 0.93 0.84 0.91 1 Saf GYO: 49.44% 0 0 31/01/11 28/02/11 31/03/11 30/04/11 31/05/11 30/06/11 31/07/11 31/08/11 30/09/11 31/10/11 30/11/11 31/12/11 8 SAF GYO 2011 Annual Report Introductıon

9

Vision To maintain its position as one of the leading, reliable companies in the Turkish real estate market with projects of world standards which create value for the national economy and give momentum to changes and development in the market. Mission To attain consistent growth by closely monitoring development areas in the real estate market and to provide return to its investors by achieving high levels of profitability. 10 SAF GYO 2011 Annual Report Introductıon

11

Message from the Chairman 2011 was a successful year for Saf GYO as the first and second stages of the Akasya Acıbadem Project were delivered. Dear Shareholders, The reason that the long depression which prevailed between 1873 and 1896 did not yield global effects was that most of the countries had not fully completed the industrial revolution. The great depression in 1929 did not affect the whole world because one third of all countries were ruled under socialist regimes at that time. But the rules of the game changed toward 2008 s and global trade and capital movements reached peak levels. The great recession, the financial crisis that emerged in the USA in this period, affected all economies and the world met global crisis for the first time. The FED intervened in the USA-originated crisis through monetary expansion policies. As things seemed to ease down, the cradle of civilization Greece has suddenly become the cradle of crisis, followed by Italy, Spain, Portugal and Ireland. The debt crisis that emerged in these countries reached its peak level in 2011 and resulted in austerity policies applied in these countries and slowing of the global growth rate. While the global economy was affected by uncertainties, the Turkish economy attained a high growth rate backed by strong domestic demand, and continued to reduce the unemployment rate to a level where it stopped being a problem and did not compromise budget discipline although general elections took place in the same year. The Turkish Central Bank (TCB) reduced interest rates in August and loosened the monetary policy as the debt crisis in the Euro zone got deeper, while the improvements in the employment market and an increase in capital inflow caused the current deficit to rise. In this environment, the Turkish Central Bank was forced to yet again apply contractionary monetary policies during the last quarter of the year. An increase in interest rates and a decline in loan volume as result of TCB s policies, a downward trend of demand in the housing sector and the density of supply in the sector are among most important factors to watch in the year 2012. The Turkish real estate industry has been able to offer more attractive opportunities to investors by gaining significant importance particularly during last decade, despite the prevailing recession in the global housing markets. In 2011, a rise in consumer confidence to pre-crisis levels along with high growth reinforced the dynamism in the housing and employment markets; as a result the real estate investment trust sector enjoyed 10% growth and an increase in employment of 1.9 million persons. In addition, we anticipate that the sector will realize 6-7% growth in 2012, considering that the decelerating yet high level of strong domestic demand has protected the national economy against foreign demand originated shocks, and that the TCB declared that all monetary policy instruments will be used for expanding purposes in case of any slowdown in economic activity as well as taking into account the urban transformation project, 2B and the law of reciprocity. The Istanbul Stock Exchange witnessed the merger process of SAF Gayrimenkul Geliştirme İnşaat ve Ticaret A.Ş., seen as the diamond of the real estate sector in 2011, and Sağlam Gayrimenkul Yatırım Ortaklığı A.Ş., which was offered to the public in 2007 and maintained its sustainable growth until recently. Upon the merger of the two companies, we increased the paid-in capital to TL 886.6 million from TL 56 million and have become real estate investment trust traded on the ISE with the second highest market value. Investors who purchased real property from our Company enjoyed return on their investments up to 100%. We believe the value of the shares of the Company will improve in line with this trend. 12 SAF GYO 2011 Annual Report From the Management

2011 was marked as a successful year when we delivered the housing units of the first and second stages of the Akasya Acıbadem Project and reflected the results in our financial statements. 2012 will be the year when we concentrate on the last stage of our Akasya Acıbadem Project. 80% of the last stage units have been sold and the construction work for almost 396,000 m 2 covering common spaces and parking lots are underway. Upon completion of the Akasya Shopping and Wellness Centre, the future center of attraction on Istanbul s Asian side, it will generate substantial rental income for the Company. We will concurrently continue to earn rental income from other real properties in our portfolio while working on the development of the Ottomare Project of our affiliate Ottoman Gayrimenkul Yatırım İnşaat ve Ticaret A.Ş. For the next period, it is expected that liquidity will be at high levels due to expansionary monetary policies implemented in developed countries and that cash inflow into Turkey as well as other developing countries will continue. The TCB s announcement of using all monetary policy instruments for expansion in case of a slowdown in economic activity, the cancellation of the rule of reciprocity as regards to real property acquisition by foreign citizens in Turkey, treasury lands that are no longer considered as forested areas coming on the market and ongoing studies of various laws which would facilitate the urban transformation process are strong hints indicating that the national economy will maintain its growth in 2012. Our priority within this period will be the completion of the ongoing Akasya Acıbadem Project as well as the evaluation of the alternative investment options if appropriate market and funding conditions can be attained. It is our sincerest wish that 2012 will be a fortunate year for all our shareholders, employees, customers, suppliers and all other stakeholders. Sincerely, Avni Çelik Chairman Civil Engineer 13

Board of Directors The composition of SAF GYO Board of Directors has been subject to changes as a result of the merger process. The Members of Board who served in certain periods during the year can be found below. From January 1, 2011 to June 17, 2011: Name & Surname Murat Ülker Cahit Paksoy Mahmut Mahir Kuşçulu Mehmet Atila Kurama Nazım Özdemir Rıfat Hasan Position Chairman of the Board Vice Chairman of the Board Board Member Board Member Independent Board Member Independent Board Member From June 17, 2011 to October 31, 2011: Name & Surname Ali Ülker Mehmet Atila Kurama Ahmet Özokur Ataman Yıldız İbrahim Taşkın Mahmut Mahir Kuşçulu Position Chairman of the Board Vice Chairman of the Board Board Member Board Member Board Member Independent Board Member From October 31, 2011 to December 31, 2011: Name & Surname Avni Çelik Raif Ali Dinçkök Ahmet Özokur Gamze Dinçkök Yücaoğlu Güner Öztek Mahmut Mahir Kuşçulu Mahmut Sefa Çelik Murat Ülker Osman Baydoğan Özlem Ataünal Rıfat Hasan Sabi Ruso Position Chairman of the Board Vice Chairman of the Board Board Member Board Member Independent Board Member Independent Board Member Board Member Board Member Independent Board Member Board Member Board Member Independent Board Member 14 SAF GYO 2011 Annual Report From the Management

Avni ÇELİK Chairman of the Board, Civil Engineer Avni Çelik was born in 1950 in Alaca and graduated from the State Engineering and Architecture Academy, Department of Civil Engineering. Since 1968, he has been actively involved in industrial and business life, including his graduate studies, for over 40 years. He started initiatives in 1974 when he established Sinpaş Yapı Endüstrisi ve Ticaret A.Ş., followed by Seranit Granit Seramik Sanayi A.Ş., Mikronize Mineral End. A.Ş., Prodek Yapı Dekorasyonu San. Tic. A.Ş. and other companies and finally the Sinpaş Group. Mr. Çelik is a civil engineer and a member of the Istanbul Chamber of Commerce, the Istanbul Chamber of Industry and the Chamber of Civil Engineers and founder and/or member of Board of Trustees of the Çorum Foundation for Education, the Istanbul Trade University and the Boğaziçi Foundation. He has served as Chairman at Sinpaş REIT from its inception. Raif Ali DİNÇKÖK Vice Chairman of the Board Raif Ali Dinçkök was born in 1971 in Istanbul and graduated from Boston University, Department of Business Administration in 1993. After his graduation, he joined Akkök Group of Companies. He served in the Procurement Department of Ak-Al Tekstil San. A.Ş. between 1994 and 2000 and as Coordinator at Akenerji between 2000 and 2003. He is serving as a Member of Board of Directors and the Executive Committee of Akkök Sanayi Yatırım ve Geliştirme A.Ş. and as a Member of Boards of the Akkök Group Companies. Ahmet ÖZOKUR Board Member Ahmet Özokur graduated from Indiana University and completed his post graduate degree at the European Business School, Business Administration and Marketing Departments. In 2004, he started his career as a member of the Executive Board at Hızlı Sistem A.Ş. In 2005, he was appointed General Manager of Datateknik and became CEO of Datateknik IT Group in the same year. Following the acquisitions and mergers realized in 2006, Datateknik IT Group has become a full integrated group as a leading and innovative enterprise involved in system integratorship, distribution of computer components, software production and distribution, development of interactive applications and production and distribution of Exper branded products. In 2008, Datateknik IT Group was restructured within the Yıldız Group and then Mr. Özokur was appointed assistant to the Holding s Board of Directors and then as Project Leader at Yıldız Holding Real Estate Investments and as an Executive member at Beta Marina İşletmeciliği A.Ş. in the same year. Since January 4, 2010, he has served as General Manager of Sağlam Gayrimenkul Yatırım Ortaklığı A.Ş. Mr. Özokur is interested in water sports and is married with two children. Gamze DİNÇKÖK YÜCAOĞLU Board Member Born in 1981 in Istanbul, Gamze Dinçkök Yücaoğlu graduated from Harvard University, Departments of Economics and Psychology in 2004. She started her career at Akenerji Elektrik Üretim A.Ş. Between 2004 and 2006, she served in the finance, accounting and budget departments. She served as Deputy General manager for Finance and Accounting between 2006 and 2009. Since June 2009, she has served as Director for Financial Audit and Risk Management and served also at the Boards of Directors of the Akkök Group Companies. Güner ÖZTEK Independent Board Member Güner Öztek graduated from St. Joseph High School in 1951 and then from Ankara University, Faculty of Political Sciences. She served in the Prime Ministry Private Secretariat and in various diplomatic positions between 1971 and 1972 and then served in the Turkish Embassy in Kuwait between 1986 and 1991, as Administrative Affairs Assistant at the Undersecretariat of Ministry of Foreign Affairs between 1992 and 1995, at the Turkish Embassy in the Kingdom of Belgium, then served as Permanent Representative at WEU and as a Member of Foreign Policy Advisory Board of the Ministry of Foreign Affairs. Ms. Öztek is currently serving as Independent Board Member at SAF GYO and as lecturer at the Yıldız Technical University. She is fluent in French and English. Mahmut Mahir Kuşçulu Independent Board Member Mahmut Mahir Kuşçulu graduated from the Istanbul High School for Boys and then from Istanbul University, Faculty of Economics and earned his post graduate degree in marketing in the USA. As from 1970, Kuşçulu served as executive and Board Member at the family-owned enterprises Tamcam A.Ş. and Arsal Cam Sanayi. In 1982, he established Kutaş Dış Ticaret ve Pazarlama A.Ş., followed by Erdem Dış Ticaret A.Ş. in 1985 and served in the management and administration of both companies. Mr. Kuşçulu has served on the Professional Committees of both the Istanbul Chamber of Commerce and the Istanbul Chamber of Industry for last two decades and is a member of the Istanbul Chamber of Commerce Board. He is married with two children. 15

Board of Directors Mahmut Sefa Çelik Board Member Mahmut Sefa Çelik was born in 1975 in Ankara and graduated from Yıldız Technical University, Faculty of Civil Engineering in 1998. Then he served as Planning Engineer at Sinpaş Yapı End. A.Ş. Aqua City construction site between 1998 and 1999, as Site Manager of Infrastructure and Landscaping at the Aqua City construction site between 1999 and 2002, as Export Manager and Executive for Construction Works at Seranit Granit Seramik San. A.Ş. Istanbul & Bilecik between 2003 and 2005. He has served as Deputy General Manager of Project, Planning and Administrative Leave Processes at Sinpaş Yapı End. A.Ş. Mr. Çelik is married with two children. Murat Ülker Board Member A graduate of Boğaziçi University, Faculty of Administrative Sciences, Department of Business Administration, Murat Ülker started his professional career in 1982. In 1984, he joined the Group as the Control Coordinator and attended various professional courses (AIB and ZDS) abroad and underwent training at the Continental Baking Company, USA. For two years, Mr. Ülker worked in Middle Eastern countries in the export sector. He visited around 60 factories and plants in the USA and in Europe that operate in the biscuit, chocolate and food sectors, to gain professional experience. Mr. Ülker joined several IESC projects and realized many new projects based on the vertical integration principle. Mr. Ülker served as deputy General Manager for Business Organizations, as General Manager, as a Member of the Executive Committee and at various companies of the Group and was appointed Chairman of Yıldız Holding in 2000. Mr. Ülker is married with three children, is fluent in English and German and enjoys sailing and to traveling with his family members. Özlem Ataünal Board Member A graduate of the Üsküdar American Girls College and then from Uludağ University, Faculty of Economic and Administrative Sciences, Özlem Ataünal served as Kozyatağı Branch Manager and head of Customer Relations Department at the Head Office of İktisat Bankası T.A.Ş. between 1989 and 1994, then as Budget and Finance Manager at Akenerji Elektrik Üretim A.Ş. between 2000 and 2005. She has served as Holding Finance Director at Akkök Sanayi Yatırım ve Geliştirme A.Ş. and as a member of the Board and a Member of Executive Committees at various Group companies since 2005. Osman Baydoğan Independent Board Member Born in 1953 in İzmir, Osman Baydoğan graduated from Aegean University, Faculty of Business Administration in 1979. He served as Chief of Financial and Administrative Affairs at the Adıgüzel HEPP construction of Bahattin Gören Construction Company between 1979 and 1980. Upon the completion of the project, he served as Chief of Financial and Administrative Affairs at the Aliağa Petkim construction of Tekfen İnşaat ve Tesisat A.Ş. between 1980 and 1983. After completion of his military service, Baydoğan served in Sezai Türkeş Fevzi Akkaya STFA Holding for two years as Internal Auditor and then joined Albaraka Turk Private Finance Institution as Deputy Manager of Financial Affairs at its inception. Having served in this position for nine years, Baydoğan served as Accounting Manager for two years and as Risk Monitoring Manager for 2.5 years at the same company. Mr. Baydoğan has served as Financial Coordinator at Eksim Dış Ticaret A.Ş. since 1998 and is serving as a Member of Board at Altınapa Değirmencilik A.Ş. and as an Independent Board Member at Körfez GYO and SAF GYO. Rıfat HASAN Board Member Rıfat Hasan was born in 1941 in Istanbul, graduated from Robert College in 1961. He is currently serving as a Member of Executive Board at Akmerkez Gay. Yat. A.Ş., as Chairman at Inteks San. Tic. A.Ş., as Vice Chairman at Doğu Batı San. Ür. İhr. ve İth. A.Ş., as a Board Member at Saf G. Menkul A.Ş., as a Board Member at Sağlam GYO A.Ş., as Vice Chairman at Taç. Yat. Ort. A.Ş. and Chairman at Akdünya Eğitim San. Tic. A.Ş. In addition, Mr. Hasan is a shareholder of Akiş Gay. Yat. A.Ş. Rıfat Hasan is married with three children and is fluent in English and French. Sabi Ruso Independent Board Member Born in 1932 in Istanbul, Sabi Ruso graduated from Istanbul University, Faculty of Law and served as an independent lawyer between 1957 and 2007 and as a member of the Istanbul Bar Association. Mr. Ruso is married with two children and is fluent in French and English. 16 SAF GYO 2011 Annual Report From the Management

İhsan Gökşin Durusoy Management Consultant İhsan Gökşin Durusoy was born in 1964 in Denizli and earned his post graduate degree from Boğaziçi University, Department of Industrial Engineering in 1987 and started his career as Production Engineer at Arçelik. Having served as Financial Affairs and Data Processing Officer at İzmir Demir Çelik A.Ş. between 1988 and 1989, Mr. Durusoy joined Ak-Al Tekstil Sanayii A.Ş. of Akkök Group in 1989 as Chief of Budget Planning. Then he served as Budget Planning Manager and Strategic Planning Director, respectively. In 2007, Mr. Durusoy was appointed Deputy General Manager at Akiş, established to realize unique and large-scale real estate projects. Durusoy has served as General Manager and Board Member at Akiş Gayrimenkul Yatırımı A.Ş. since 2009. Mahmut Kayacık Management Consultant Mahmut Kayacık was born in 1976 in Köyceğiz in the province of Muğla, graduated from Boğaziçi University, Department of Political Science and International Relations in 1999 and joined the Taç Yatırım Ortaklığı A.Ş. as Financial Analyst same year. In 2002, he earned his post graduate degree from Marmara University, Social Sciences Institute, Department of International Economics with the thesis Option Markets and Use of Options for hedging Purpose. Mr. Kayacık joined Bizim Menkul Değerler A.Ş. in early 2003 and served in the Portfolio Management and Corporate Finance Departments. In early 2008, he joined Yıldız Holding and served as Assistant to the Head of the Real Estate Investments Group and then joined Sağlam Gayrimenkul Yatırım Ortaklığı A.Ş. in May 2009. Mr. Kayacık was appointed Yıldız Holding A.Ş. Real Estate Group, Deputy General Manager in 2011 and he is currently serving as a Member of the Executive Committee at Saf Gayrimenkul Yatırım Ortaklığı and a Member of Executive Committee at Starcity Outlet Centre. As holder of Advanced, Derivative Instruments, Corporate Governance Rating and Real Estate Appraisal Expert licenses issued by the Capital Markets Board, Mr. Kayacık is interested in reading and travelling. Mr. Kayacık is married with three children. Meral KANETİ MOLİNAS Management Consultant Meral Kaneti Molinas was born in 1963 in Istanbul and graduated from Robert College and then from Boğaziçi University, Department of Industrial Engineering in 1984. She started her career at Profilo Telra in 1986 and completed the International Management Program at the Istanbul University same year. She started at Profilo as an Industrial Engineer and served in various positions for 23 years. During the Company s expansion and the relocation of the factory, she established the integrated supply chain system. In addition, she served as Director of Budget, Planning and Control Department and the Management Information Systems Department, reporting to the General Manager and Board of Directors. After her career at Profilo ended in 2007, Ms. Molinas was appointed and is currently serving as Real Estate Project Coordinator at Doğu Batı A.Ş. She has also served as a Board Member at Akdünya Eğitim A.Ş. since 2009. Ms. Molinas is married with two children and is fluent in English, in French and Spanish. Note: In 2011, SAF GYO Board of Directors convened 24 times with the participation of the majority of the members. 17

Message from the General Manager The profit of SAF GYO totaled TL 329,488,345 in 2011, surpassing the Company s targets set for projects. Dear Stakeholders, 2011 was the year when the growth in the world economy, primarily in developed economies, has again lost ground. All financial markets with well integrated national economies throughout the world were shaken with the uncertainties that prevailed in the global economy. The ever deepening debt burden in the Euro zone countries and the spread of the Greek debt crisis to Portugal, Italy and Spain as well as the earthquake that hit Japan in March and the drop of the USA s credit rating in August were the factors impairing the environment of trust in markets. Despite all these adverse events affecting the global economy, Turkey managed to attain a high growth rate as result of adhering to financial discipline and the successful steps taken by the Turkish Central Bank as regards to monetary policy. According to data for the first three quarters of the year, the gross domestic product increased by 8.2% over the previous year. The growth of the national economy positively affected the employment figures, and the unemployment rate was reduced to 9.1% in November 2011 from 11% in November 2010. In 2011, the relative weakness in the national economy was observed in inflation rates. For 2011, the targeted consumer price index was set as 5.5%, yet it was realized as 10.43%, well above the targeted figure. The increase in the inflation rate also brought about an increase in interest rates. While the interest rates on government bonds was rising to double-digit figures, the interest rates applied by the banks for housing loans increased rapidly toward the year end and reached around 14%, which were in the area of 9.5% at the beginning of the year. The increase in interest rates observed during the last quarter of the year, brought the growth in housing loans almost to a standstill. The housing loan volume increased 20% during the first 10 months of the year, but then remained stable during last two months. An increase in the interest rates of housing loans, coupled with the housing supply concentrated in certain regions, resulted in a slowdown in the housing sector in 2011. On the other hand, the commercial real estate market maintained its strong momentum in parallel with the growth in the economy. Increasing population, improvement in employment levels, strong domestic demand and economic growth above expectations increased the interest of the world s leading retailers in Turkey. At the same time, the increase in household income and expenditures, the rise in consumer confidence to pre-crisis levels and the desire for expansion of the organized retail sector continued to fuel the demand for shopping malls. The number of shopping malls in Turkey increased to 300 and the leasable area per thousand persons to 100 m 2 and in aggregate to 7.5 million m 2. The turnover amount of TL 412 m 2 in 2010 increased by 14% and reached TL 468 in 2011. SAF Gayrimenkul Yatırım Ortaklığı A.Ş., established upon the merger of Sağlam GYO with SAF Gayrimenkul in last part of 2011, has become one of the top valued companies traded on the ISE. As a result of this merger, shareholders of both companies enjoyed high returns. The shareholders of Sağlam GYO that pursued a mostly rent-oriented investment strategy until recently have now become shareholders in the Akasya Acıbadem Project, the largest and most prestigious project being built on the Asian side of Istanbul while the shareholders of SAF Gayrimenkul, a non-public offered company, have become shareholders in a real estate investment trust - a public offered, transparent corporation with high liquidity volume and which is able to take advantage of various tax incentives. 18 SAF GYO 2011 Annual Report From the Management

During the last quarter of 2011, the construction of the first and second stage units of the Akasya Acıbadem Project have been completed to a large extent and 891 housing units were delivered to customers. With delivery of these units, the Company s sales revenues increased to TL 585,198,037 and net profit for the period was TL 329,488,345. Our Company has become the first real estate investment trust traded on the ISE that has attained such a level of profit. After completing construction of 199,000 m 2 for the first and second stages of Akasya Acıbadem Project, construction for last stage of the Project with a total construction area of 396,600 m 2, and total sellable residence/office area of 68,600 m 2 and leasable shopping mall area of 801,000 m 2 are underway. At the end of 2011, the overall completion rate of Akasya Kent, the last stage of the Project, is expected to be 19% and 2012 will be the year for the Company to focus on the last stage of the Akasya Acıbadem Project. Sales of residences and offices in the last stage of the Project are ongoing and as of end 2011 pre-sales of 352 out of totally 458 units have taken place. The Project is also attractive for potential leaseholders and we received almost 2,500 applications for leasable areas in the shopping mall. At the completion, this Project will be one of the most remarkable shopping and wellness centers not only in Istanbul but also in the whole country. Another project in the Company s portfolio is the Ottomare Project in Zeytinburnu, realized by Ottoman Gayrimenkul Yatırım İnşaat ve Ticaret A.Ş., where we hold a 10% participating share. Pre-sales and construction works of 355 units with a sellable area of 38,200 m 2 are ongoing. Other real estate in the Company s portfolio including the Komili Factory Building, Antalya BTM Building, Altunizade BTM Building, the office areas at the Fecir Business Centre and the Mecidiyeköy Business Centre are currently yielding regular rental income for the Company. As SAF GYO, our first priority in the coming period will be to realize the ongoing projects as committed. The results of 2011 operations and the profitability level attained have greatly strengthened our financial position; as a result, we are able to fund future investments in the ongoing stage three of our Akasya Acıbadem Project with our own resources. Upon completion of these investments and realization of the Akasya Shopping & Wellness Centre, cash outflows will be concluded and the Company will begin to gain important rental income which will lead to regular cash inflow. We intend to distribute a certain portion of this income among our shareholders while using the remaining portion for new investment opportunities. Oray Şükrü Demirel General Manager 19

Executive Management and Committees ExecutIve Management Oray Şükrü Demirel General Manager Oray Şükrü Demirel was born in 1963 in Istanbul and graduated from Kabataş Boys High School and then from the Istanbul Technical University, Faculty of Electrical-Electronics, Department of Electrical Engineering in 1987. Mr. Demirel earned his Executive MBA degree from Manchester Business School in 2002. He started his professional career in 1987 as an engineer at Bufer Elektrik and then went to Ottawa and Toronto in Canada between 1989 and 1992 and served as field engineer at SET Construction and as Life Underwriter at Metropolitan Life. Mr. Demirel served at Pimaş of the ENKA Group between 1992 and 2001, as Sales and Marketing Manager for the last five years of his employment at the Company. Mr. Demirel served as Deputy General Manager of Sales and Marketing at ITO kilit IR Ingersoll RAND, then was appointed General Manager at Gezer Deri of the Gezer Group in 2002. He served as General Manager at Sinpaş Yatırım ve İşletme A.Ş. and has served as General Manager at SAF GYO A.Ş. as from 2009. Mr. Demirel is married with two children. Ali Ulvi Dikbaş Production Coordinator Born in 1960 in Kütahya, Ali Ulvi Dikbaş graduated from the Istanbul Technical University, Faculty of Civil Engineering in 1983 and completed his post graduate studies at the Istanbul Technical University, Institute of Sciences in 1986. Mr. Dikbaş started his career as Site Chief at Temson Zemin A.Ş. and then served as Technical Office Chief at IGL-STFA Road Project between 1985 and 1987. Having completed his military service as Planning and Supervising Engineer at the Turkish General Staff between 1987 and 1988, Mr. Dikbaş served as Deputy Manager of Control at the construction of Akmerkez Shopping Mall Office Residence Project of Akmerkez Etiler Adi Ort. between 1988 and 1994 and as Project Manager at INCO A.Ş. between 1994 and 2003. He was appointed Project Manager at Ant Yapı in 2004 and then served as Project Manager at the construction of ASTORIA Shopping Mall Residence in 2005 and at the construction of SAPPHIRE Shopping Mall Residence Project in 2006. Mr. Dikbaş was appointed as Project Manager at the construction of the Akasya Acıbadem Project of SAF GYO in 2007 and is currently serving as the Production Coordinator at the same Project. Serhan Kolaç Financial Affairs Manager A graduate of Kocaeli University, Department of Business Administration in 2002, Serhan Kolaç served as Accounting and Finance Manager and Deputy Financial Affairs Manager at Polat İnşaat Malzemeleri A.Ş. of the I. Polat Holding A.Ş. between 2003 and 2007. During his assignment, he also served as project leader at Ege Seramik İç ve Dış Ticaret A.Ş., Polat Turizm Otelcilik Ticaret ve San. A.Ş., Polat Maden San. ve Tic. A.Ş., Polat İnşaat San. ve Tic. A.Ş. and other Group companies for the ERP Project of I. Polat Holding and earned the title Independent Accountant and Financial Advisor in 2007. Mr. Kolaç has served as Financial Affairs Manager at SAF GYO since 2007. Audıt Commıttee Sabi Ruso Born in 1932 in Istanbul, Sabi Ruso graduated from Istanbul University, Faculty of Law and served as an independent lawyer between 1957 and 2007 and as a member of the Istanbul Bar Association. Mr. Ruso is married with two children and is fluent in French and English. Osman Baydoğan For the CV of Mr. Osman Baydoğan, please refer to page 16 of this Annual Report. 20 SAF GYO 2011 Annual Report From the Management

Dr. Halil Cem Karakaş Born in 1974, Dr. Cem Karakaş earned his graduate degree from the Middle Eastern Technical University, post graduate degree from the Massachusetts Institute of Technology and PhD degree from Istanbul University. He started his career at the Strategic Planning Group of Koç Holding and served as CFO at the Erdemir Group between 2006 and 2010. Dr. Karakaş served as Business Development Director at the OYAK Group and as a member of the Board of various companies and has served as CFO at the Yıldız Holding A.Ş. since 2010. Dr. Karakaş is interested in diving, skiing and tennis; is fluent in English and is married with two children. Corporate Governance Commıttee Mahmut Mahir Kuşçulu For the CV of Mr. Mahmut Mahir Kuşçulu, please refer to page 15 of this Annual Report. Güner Öztek Güner Öztek graduated from St. Joseph High School in 1951 and then from Ankara University, Faculty of Political Sciences. She served at the Prime Ministry Private Secretariat and in various diplomatic positions between 1971 and 1972 and then served at the Turkish Embassy in Kuwait between 1986 and 1991, as Administrative Affairs Assistant at the Undersecretariat of Ministry of Foreign Affairs between 1992 and 1995, at the Turkish Embassy in the Kingdom of Belgium, then served as Permanent Representative at WEU and as a Member of Foreign Policy Advisory Board of the Ministry of Foreign Affairs. Ms. Öztek is currently serving as Independent Board Member at SAF GYO and as lecturer at Yıldız Technical University. She is fluent in French and English. Mehmet Topak Mehmet Topak has served as Financial Affairs and Investor Relations Manager at SAF GYO since 2010. He served as Financial Affairs and Investor Relations Director at FFK Fon Finansal Kiralama A.Ş., a company of Yıldız Holding A.Ş. Group, between 2006 and 2010. Mr. Topak is a graduate of Dokuz Eylül University, Department of Business Administration and holder of Capital Markets Advanced License, Credit Rating License and Corporate Governance Rating License. Mr. Topak is currently serving as Independent Accounting and Financial Advisor. He is married with one child. 21

Activities The Company realizes prestigious and high-yield projects in urban areas 22 SAF GYO 2011 Annual Report Activities

23

Sector Developments in 2011 Projects, differentiated in terms of quality and design will continue to be demanded by both consumers and investors. Real Estate Investment Trusts, as capital market institutions operating subject to the Capital Markets Board (CMB) Communiqués, are obliged to offer at least 24% of their shares to the public no later than three months after establishment, pursuant to the amendment to a communiqué effective as of January 1, 2010. Pursuant to the applicable legislation, Real Estate Investment Trusts are corporate structures subject to principles of transparency and accountability. As publicly traded companies, REITs offer important advantages to investors as well as to the sector as a whole. By offering their shares to the public, companies operating in this sector can reinforce the funding resources enabling them to develop large-scale real estate projects. The investors, however, become indirect shareholders in the projects through their respective participation in REITs which they cannot realize with their individual savings. The successful performance achieved recently by the Turkish economy as well as the globally recognized experience and knowhow of local construction and contracting companies paved the way for rapid development in the real estate investment sector. Despite the uncertainties that prevailed in the global economy, the Turkish real estate and construction sector played a leading role in the growth of the Turkish economy in 2011. In 2010, the sector broke a historical record recording 17.1% growth; in 2011, it was one of the sectors of Turkey providing the highest added value and employment levels with 10% growth. Providing jobs to 1.9 million persons, the real estate and construction sector is expected to maintain its momentum backed by Turkey s dynamic and mostly young population and its robust economy. The fact that the law on reciprocity is to be enacted in the near future to facilitate real property sales to foreign citizens and urban transformation projects being implemented in metropolises, primarily in Istanbul, are two other factors which will accelerate the sector s performance. However, many companies without sufficient experience entered the real estate and construction sector, leading to the risk of a supply surplus. Based on this fact, experts argue that the market will have a fragmented form in the near future. It is anticipated that the real estate projects that are unique in terms of quality and design will continue to be preferred by the consumers as to create added value, but projects realized without analyzing the location and consumer trends may encounter demand problems in the market. 24 SAF GYO 2011 Annual Report Activities

25

Projects Innovative mixed-use projects for mainly offices and residences are realized in metropolitan districts. Prestigious Projects and High Rent Yielding Real Estates SAF GYO s Akasya Project is realized on 12,000 m 2 area in Acıbadem, Istanbul using a green concept. The Göl and Koru stages have been completed in a very short period of time and all construction work, except landscaping, has been completed. Other high rent yielding real estate in SAF GYO s portfolio are the Komili Factory Building in Gebze, Kocaeli; 10 independent units with 1,125.49 m 2 usage area in the Mecidiyeköy Business Centre at Şişli - Istanbul; the Antalya BTM Building located in Kepez in Antalya; the Altunizade BTM Building located in Üsküdar, Istanbul; and the Fecir Business center located in Arnavutköy, Istanbul. 26 SAF GYO 2011 Annual Report Projects

27

Akasya Acıbadem Project Focusing on quality of life, Akasya Acıbadem is fully integrated with transportation routes on the Asian side of Istanbul. Incorporating both the splendors of the city as well as nature, Akasya Acıbadem offers its residents world class standards and many social facilities. Total Land Area (m 2 ) 121,000 Total Sellable Area (m 2 ) 206,109 Akasya, the most prestigious project of SAF GYO s, is built in Acıbadem, Istanbul at the intersection of important roadways. Built on 121,000 m² of usable area using a green concept, the project has rapidly become one of the major real estate projects with its world class standards in terms of aesthetics and quality of life, followed by potential residence and office customers as well as by investors with interest. The Project consists of three stages. The units of the Göl and Koru stages have been completely sold out in a short time, the construction work has been completed on schedule and the residences in two stages were delivered to customers in 2011 and all the manufacturing work was completed, except for the landscaping. Construction of the Kent stage comprising the largest shopping mall on Istanbul s Asian side is ongoing. Some 352 units of 458 housing units of the last stage, launched as the so-called Limited Collection, were sold during 2011. The completion rate of the last project stage has reached 19%. Delivery of the residence units is scheduled for September 2013, and the shopping mall is planned to open in March 2013. As a quality of life oriented project, Akasya is integrated with the subway infrastructure which is under construction and with nearby highway routes. Thus, it aims to offer a living space within the urban area yet free from any noise and stress for the residence and office owners. SAF GYO has also built an elementary school within the Project. As a company aware of its social responsibilities, designed the Akasya Project as a self-sufficient living space. 28 SAF GYO 2011 Annual Report Activities

29

Akasya Acıbadem Project The aim is to provide a living space within the urban area yet free from any noise and stress for the residence owners and office workers. Akasya Acıbadem Project Land (m²) 121,000 Number of Residences Sellable Area Building Area Leaseble Area Göl Stage 459 66,310 m² 98,663 m² Koru Stage 432 71,195 m² 100,422 m² Kent Stage 458 68,604 m² 396,640 m² Akasya Acıbadem Shopping Mall 81,000 m² Total 1,349 206,109 m² 595,725 m² 81,000 m² 30 SAF GYO 2011 Annual Report Activities

31

Other Investment Properties Mecidiyeköy Business Centre Appraisal Market Value (TL) (VAT excluded) 3,740,000 Appraisal Rental Value (TL) (VAT excluded) 24,000 Located in Şişli, Istanbul, the property consists of 10 units with 1,125.49 m 2 usage area. Due to its central location, existing transportation facilities, trade potential, its closeness to commercial and finance centers and as a renowned business center within the area, the rental and sale value of the property is at quite a high level. 32 SAF GYO 2011 Annual Report Activities

Antalya BTM Building Altunizade BTM Building Appraisal Market Value (TL) (VAT excluded) 5,335,000 Appraisal Rental Value (TL) (VAT excluded) 34,000 Appraisal Market Value (TL) (VAT excluded) 9,880,000 Appraisal Rental Value (TL) (VAT excluded) 76,000 Located in Kepez, Antalya, the Antalya BTM Building enjoys ever-increasing sales and rental value due to its accessibility, high trade potential of the neighborhood and the fact that the most prestigious shopping malls and business centers are in the vicinity of the building. Built on an area of 3,712 m 2 with a total of 4,230 m 2 of indoor space, this property features a store of three floors and offers an ideal trading opportunity with adequate parking. Located in Üsküdar, Istanbul, Altunizade BTM Building is built on an area of 1,586 m² and has a total of 3,454 m² of indoor space. Currently used as the Bizim Wholesale Altunizade BTM Building, the real estate s value is increasing due to its accessibility, the high trade potential of the neighborhood and its central location. Altunizade BTM Building 33

Other Investment Properties Fecir Business Centre Komili Factory Building Appraisal Market Value (TL) (VAT excluded) 15,640.000 Appraisal Rental Value (TL) (VAT excluded) 128,934 Appraisal Market Value (TL) (VAT excluded) 42,545,000 Appraisal Rental Value (TL) (VAT excluded) 305,000 The Fecir Business centre is located in the Arnavutköy district of Istanbul and is a property with the attributes of a factory that is used as a logistics, distribution, storage and administrative building. Prominent advantages of this property are its location within an industrially developing region, a large land area and the fact that it is situated by a main road. Located in Gebze, in the province Kocaeli, the Komili Factory Building is built on an area of 69,907 m² and has 30,202 m² of indoor space on two floors, a ground floor and a typical floor. Two factors contributing to the increase in its current market value are the completed infrastructure facilities in the region and its location within an industrial zone. 34 SAF GYO 2011 Annual Report Activities

35

Risk Management Policies The Board of Directors is responsible for operating a risk management and an internal audit mechanism to minimize the effect of risk. I- Organization, Definition and Management of Risk Management The duties of the Early Risk Identification Committee are carried out by the Corporate Governance Committee consisting of Güner Öztek, Independent Board Member and Mehmet Topak, Investor Relations Manager, under the chair of Mahmut Mahir Kuşçulu, Independent Board member. The Committee defines and evaluates current and potential risks, internally and externally, current or future. The SAF GYO A.Ş. Board of Directors is responsible for establishing and ensuring the healthy operation of a risk management and an internal control mechanism that will minimize the effect of risk on the Company s shareholders and stakeholders. II- Internal Control The internal control system comprises the entire financial, operational and compliance controls. The Company established an Audit Committee in order to ensure the efficiency of the Board s risk management and internal control system, within the framework of the Corporate Governance Principles. Sabi Ruso, Osman Baydoğan, Güner Öztek and Mahmut Mahir Kuşçulu were appointed as the Independent Board Members. The Audit Committee is responsible for the healthy conduct of the operation and efficiency of the internal control system. The SAF GYO Internal Audit Unit periodically controls the operation of the internal control system in terms of the Company s operational, financial performance and compliance and reports to the Audit Committee. The Board of Directors periodically evaluates and manages the defined risks the Company is facing. Issues related to the execution of the Company s activities are evaluated on a weekly basis by the members of the Executive Committee and the executive management. The internal control system for evaluation of the efficiency of the internal control system includes the following processes: 36 SAF GYO 2011 Annual Report Corporate Management

The Company has established a written internal control system. The budget figures and the actual result are continuously compared with each other and measures are taken to address any variation. Besides the ordinary meetings held, the Audit Committee and the managers meet immediately when deemed necessary for urgent and important issues. The organizational authority and responsibilities and the powers in regard to the execution of operations are clearly defined. Basic risks in terms of investments and financial condition are regularly evaluated and monitored systematically by the managers and responsible staff. Department heads are responsible for monitoring the efficiency of the internal control system as regards to their defined area of responsibility. The Board of Directors measures the internal control system s efficiency on an annual basis, including on the day of approval of the financial statements. The efficiency measurement is made according to the following processes: Review of internal and external auditing work schedule issued by the Audit Committee Analysis of the current and potential risks defined by the Audit Committee together with the management and discussion of such risks with managers Evaluation of the reports issued by internal and external auditors on the weaknesses of the internal control system and discussion of them with the managers. III- Independent Audit The independent audit of the Company is carried out by DRT Bağımsız Denetim ve Serbest Muhasebeci Mali Müşavirlik A.Ş. For designation of the independent audit firm, the following processes are applied to ensure compliance with the Corporate Governance Principles: Analysis of independence by the Audit Committee for the independent audit firm Selection of the independent audit firm and obtaining the pre-approval by the Audit Committee for the services to be purchased Presentation of audit results to the General Assembly upon approval by the Board of Directors. By every year-end, the Audit Committee issues its report on the independence of the independent audit firm and submits the reports for the General Assembly s approval. In case of nonapproval by the General Assembly, the contract concluded with the independent audit firm is terminated. 37

Information Policy SAF GYO Board of Directors submits the information policy prepared as regards to the public information to the General Assembly. SAF GYO established its information policy in order to provide exact, understandable, complete and easily accessible information to the below mentioned stakeholders, excluding trade secrets, pursuant to the corporate governance principles. As regards to public information, the Company complies with the Capital Market Regulations, the Communiqué on the Principles for the Real Estate Investment Trusts issued by the Capital Markets Board (CMB) and other relevant laws and the regulations issued by the Capital Markets Board and the Istanbul Stock Exchange (ISE). Furthermore, efforts are made to apply the CMB Corporate Governance Principles within the Company. The SAF GYO Board of Directors provides information to the public upon submission of the public information policy for the General Assembly s review. In case any change is made in the information policy, the subjects modified, together with justification, are submitted to the General Assembly for review upon approval by the Board of Directors and are disclosed to public. Responsibility The Board of Directors is responsible for the following review and improvement of the information policy. The Investor Relations Department is responsible for observing and abiding by the information policy. Scope According to the Company s information policy, information is provided to the following stakeholders and institutions: a- Present investors b- Potential investors c- Stakeholders d- Regulatory authorities e- Public. Means of Information The information policy is implemented by the following means: Website (www.safgyo.com) Public Information Platform (www.kap.gov.tr) Investor meetings Media and press statements Announcements published in the Turkish Trade Registry Gazette and in other newspapers (explanation notes, circulars, and call for General Assembly Meeting and others) News channels (Reuters, AP, Bloomberg, Foreks and others) Communication means, such as e-mails and letters Phone, facsimile, et al. 38 SAF GYO 2011 Annual Report Corporate Management

Types of Information The Company disclosures information in the following manner: The annual report, financial statements and notes to statements, independent audit report and dividend distribution policy are disclosed to the investors, the public, stakeholders and regulatory authorities in a timely and correct manner through the website and other distribution channels. All the information about the General Assembly is made available for review at the Company s head office and branches and announced to the public at least three weeks before the meeting. Financial statements and the independent audit report together with the interim operating report are disclosed to public via the Internet on a quarterly, biannual, three quarter and annual basis. Pursuant to the CMB s Communiqué on the Principles for Material Disclosures Series: VIII No.: 54 and the Communiqué on the Principles for Real Estate Investment Trusts, material disclosures, if any, are forwarded to the ISE and announced on the Company s website. Board Members press meetings are scheduled and organized by the Investor Relations Department. According to the Communiqué, disclosures of developments which would substantially affect the value of Company shares are made by the persons authorized to make the disclosures, as listed below. The Company s compliance report regarding the application/ non-application of the Corporate Governance Principles issued by the Capital Markets Board and the issues of non-compliance and the reasons thereof are disclosed in the annual report and on website. The Company discloses to public the dividend distribution policy, established by the Board of Directors. The policy is submitted for the shareholders information at General Assembly meetings as well as published in the annual report. The codes of conduct and the developments that may yield important effects on the future operations of the Company are disclosed to public within the framework of the information policy. Information on insider trading is disclosed under the information policy; to this end, the website of the Company is actively used and periodically updated. Persons Authorized to Release Information Requests for information other than those disclosed to public, as mentioned above, are handled by the Chairman and Members of Board, the General Manager, CFO, Capital Markets Coordinator and the Investor Relations Department, orally or in written form, depending on the level of the information request. No other employee is authorized to respond to requests for information. 39

Ethical Principles SAF GYO has set transparency, trustworthiness and responsibility as its prime ethical principles. SAF GYO carries out its activities adhering to the principles of transparency, trustworthiness and responsibility abiding by the following ethical rules, disclosed to public under the information policy prepared by the Board of Directors and submitted to the General Assembly. Any breach of ethical rules is handled by the Corporate Governance Committee. 1) Shareholders SAF GYO values every shareholder equally, regardless of the respective shareholding percentage. The Company aims to manage shareholder investments in the best and most productive manner. SAF GYO announces the issues that the Company is obliged to disclose to public, so that every shareholder, regardless of the participating share, can access such information at the right time and at minimum cost. 2) Employees The Company and its employees act in compliance with applicable laws, legislation and internal regulations. Accordingly, ethical rules are observed as regards to any relationship. The Company and its employees pay utmost attention in preventing any type of conflict of interest. Employees are treated fairly and are offered equal opportunities under equal terms. SAF GYO disallows that any form of mobbing, such as discrimination, exclusion and intimidation toward employees, or the cause thereof. SAF GYO considers every proposal by employees as an opportunity for development of the organization and its processes. SAF GYO ensures that every employee is provided personal rights in a full/correct and timely manner. SAF GYO disallows any sexual, social and physical harassment and inconveniences toward employees, or the cause thereof. SAF GYO expects that all employees internalize and protect the Company s name and reputation. SAF GYO employees who participate in tender preparation or contract negotiations are accountable to the Company for providing true and correct representations, correspondence and statements. 3) Customers SAF GYO does not provide any harmful and/or misleading goods or services to its customers. SAF GYO does not get in contact or conclude agreements with any competitor company for the boycott of its customers or suppliers. SAF GYO does not place any incorrect, false or misleading advertisements and does not make any false statements in its sales and marketing activities. 40 SAF GYO 2011 Annual Report Corporate Management

4) Suppliers - Competitors SAF GYO aims to establish long term and fiduciary relationships with stakeholders. SAF GYO has not named in the press or made statements critical of its competitors or their managers. SAF GYO does not contact or enter into agreement with competing companies as regards to hindering new competitors, fixing the price of goods and services or sharing regions/markets/ customers. SAF GYO does not employ any unethical or unlawful means to access information on other companies and restrains its employees from using such means. However, the use of information already disclosed to public (website, price lists, advertisements, published articles and similar) by other companies may be used. 5) Relations with Legal Institutions SAF GYO acts in compliance with all legislation, including laws, rules and regulations, when purchasing and providing services. The Company treats state institutions and organizations, nongovernmental organizations and political parties equally without any expectations of benefits when performing its operations and transactions. 6) Public Disclosure The information means set forth in the Company s Information Policy are used in a manner to provide optimum and easy use for its shareholders and stakeholders. 7) Social Responsibility SAF GYO acts with social responsibility when conducting its operations. SAF GYO encourages its employees to volunteer in social and community activities to create awareness of social responsibility. SAF GYO pays strict attention to environmental protection during its performance and its business partners activities. SAF GYO uses natural resources and energy sources in an efficient way to prevent waste. 8) Confidentiality of Information SAF GYO keeps confidential and does not disclose the commercial, personal and similar information of its suppliers, customers, employees and job applicants. 9) Giving and Accepting Gifts SAF GYO does not give to or accept from other companies and employees any gifts that would go beyond the intrinsic purpose of the gift (that would impair the objectivity of the other party/with high value) and would put the other party under any obligation. 10) Board of Directors Members of the Board of Directors are obliged not to surrender to the pressures that might generate results against shareholders, nor to accept any financial benefit or to conceal any corruption. Members of the Board do not disclose any trade secrets or confidential information to the public. SAF GYO ensures that information to be disclosed to public and that requested by shareholders and stakeholders are provided and updated in an easily and equally accessible manner. Developments that may affect the value of the Company s capital market instruments are disclosed to the public within the time period indicated by law and in the framework of the information policy. 41

Corporate Governance Principles Compliance Report SAF GYO established the website at www.safgyo.com in order to provide information to its stakeholders at the highest standards. 1. Corporate Governance Principles Governance Report In 2011, SAF GYO endeavored to apply the rules set forth in the Corporate Governance Principles issued by the Capital Markets Board. The studies and findings on the level of the Company s compliance with the Corporate Governance Principles are disclosed in the corporate governance report for the year 2011. PART I - SHAREHOLDERS 2. Investor Relations Unit SAF GYO officially set up the Investor Relations Unit during 2009, directed by Mehmet Topak who is responsible for responding to the inquiries of shareholders, delivered in written form or via the Internet as well as for written communication with the ISE, CMB, Central Registry Agency (CRA) and Takasbank. The contact details of the Director are: Mehmet Topak Director, Investor Relations Unit E-mail: mehmet.topak@safgyo.com Phone: 0216-428 31 32 Facsimile: 0216-340 69 96 The main activities of the Investor Relations Unit are: Equal treatment of all shareholders, Making available all updated information and statements for use of shareholders which would affect the exercise of shareholding rights, excluding information that is publicly undisclosed as well as that considered confidential and/or trade secret, Ensuring that General Assembly Meetings are held in accordance with the applicable rules and regulations, the Company s Articles of Incorporation and other Company regulations, Preparing the documents to be presented to shareholders during the General Assembly Meeting, Keeping records on the voting results and ensuring that the reports on voting results are delivered to the shareholders, Monitoring and following up all issues regarding public disclosure, including the legislation and the Company s information policy. In 2011, the Investor Relations Unit has actively carried out its activities, responding to verbal inquiries in the fastest way and to written inquiries at latest on the following day. 3. Exercise of Shareholders Rights to Obtain Information All shareholders are treated without any discrimination with regard to the exercise of the right for information and examination. Requests for information were mostly related to SAF GYO investments and were made verbally. All shareholder requests for information are met in the most expeditious manner, with the exception of trade secrets. All the shareholder requests for information made in 2011 were met by the Investor Relations Unit upon discussion with the Company s General Manager. The Investor Relations Unit, established in 2011 to enhance the capacity for compliance with corporate governance, responded to all information requests promptly, completely and in an honest manner, excluding those for trade secrets. Annual reports, material disclosures and the Company s website include all kinds of information regarding the utilization of rights by shareholders in a robust way. The Company s website was 42 SAF GYO 2011 Annual Report Corporate Management

re-designed during 2011 with the aim to provide all information which would affect the utilization of information rights by shareholders in the promptest and easiest manner, as regards to the extension of shareholders information rights. The request for nominating a independent auditor has not been set down in the Company s Articles of Incorporation and there was no request during the period for the appointment of a private auditor. 4. Information on the General Assembly During 2011, one ordinary and one extraordinary General Assembly Meeting were held. At the Ordinary General Assembly meeting held on June 17, 2011 at the registered office of the Company, SAF GYO shareholders representing 51.41% of the Company s paid-in capital of TL 56,000,000 were present while SAF GYO shareholders representing 43.18% of the Company s paid-in capital of TL 56,000,000 attended the Extraordinary General Assembly meeting held on October 31, 2011 at the registered office of the Company. There was no stakeholder or media participation at these meetings. Invitations to the shareholders meeting, including the place, date, time, agenda of the meeting and the sample forms of power of attorney, were announced in the Turkish Trade Registry Gazette dated June 1, 2011 numbered 7827 and dated October 5, 2011 numbered 7914, respectively and in Dünya Newspaper as well as Hürriyet Newspaper. Holders of registered shares and shareholders who have already entrusted shares and notified their addresses were informed about the meeting date and agenda by registered and reply paid letter. As from the date of the invitation, the annual report and the financial statements and reports, dividend distribution proposal, required agenda items and other documents constituting the basis for agenda items and the last version of the Articles of Incorporation were made available to all shareholders for examination purposes. No proposals were submitted by shareholders at General Assembly Meetings. Minutes of the meetings were published in the Company s website at www.safgyo.com and made directly available to all shareholders. The General Assembly meetings can be held at the Company s registered office or at any other location, upon approval by the Board of Directors, within the boundaries of authority where the registered office is located, as set forth also in the Articles of Incorporation, in order to attain high level of participation. In case the Board of Directors fails to unanimously adopt specific resolutions, specified in Article 14 of the Company s Articles of Incorporation, it is announced to the Capital Markets Board, the Istanbul Stock Exchange and to shareholders by putting the issue on the agenda of next General Assembly meeting. Specific Resolutions If the Board fails to adopt unanimously the resolutions on the subjects listed in paragraph (B) below between the Company and the parties listed under paragraph (A) below, it is required to disclose the resolution, together with the justification, to the public in accordance with the regulations on public disclosure of special cases and to put the issue on the agenda of the next General Assembly Meeting to inform the shareholders. A- Parties a) Shareholders having a shareholding percentage or voting right of 10% or more of capital, b) Shareholders with the right to nominate a member for the Board of Directors, c) Company providing consultancy services to the Company, d) Other companies where the shareholders listed under paragraph (A) and (B) have a shareholding rate or voting right of 10% or more, e) Company s subsidiaries, f) Companies offering business management services. B- Specific resolutions include: a) Resolutions on acquisition, selling, leasing or renting asset from the Company s portfolio, b) Resolutions on the designation of the company to perform the marketing of the assets in the Company s portfolio, c) Resolutions on establishing loan relationship, d) Resolutions on the designation of the brokerage house committing purchase at public offering of the Company s shares, e) Resolutions on making joint investment, f) Resolutions on designation of real or legal persons to provide financial, legal or technical advisory services to the Company, g) Resolutions on designation of real or legal persons to provide project development, control or contracting services to the Company, h) Resolutions on the acquisition of marketable securities issued by legal persons under paragraph (A) for the Company s portfolio, i) Resolutions on designation of real or legal persons to provide business administration services to the Company (Annex: according to the Communiqué Series: VI, Number: 21), j) Resolutions other than those listed above, that would yield positive results on any party under paragraph (A) above. The minutes of General Assembly Meetings, list of attendees and sample form for power of attorney are published on the website at www.safgyo.com. 43

Corporate Governance Principles Compliance Report 5. Voting Rights and Minority Rights Pursuant to the communiqué on the real estate investment trusts, the trusts may not issue preferred stock, other than that entitling the holders for appointment of Board Members. According to the Articles of Incorporation, each shareholder is entitled to one vote at General Assembly meetings. The management and business of the Company is conducted by the Board of Directors which consists of 12 members who are elected at the General Assembly by the shareholders for the office term of one year, within the limits of the Turkish Commercial Code. Of this total, four Board Members are elected from among the candidates designated by holders of Group A shares. The Articles of Incorporation do not include any provisions on preventing non-shareholders from voting by proxy and on the method of cumulative voting. Voting rights are vested upon acquisition of any share and there is no provision stipulating that the voting right can be exercised after a certain period following the share acquisition. Shareholders are entitled to exercise the voting right personally as well as by proxy, either a shareholder or a non-shareholder, to vote at the General Assembly meetings. The Articles of Incorporation do not include any provisions on minority shares. 6. Dividend Distribution Policy and Timing for Dividend Distribution The dividend distribution policy adopted by SAF GYO is disclosed in the annual report. There are no privilege rights set forth in the Articles of Incorporation. The Board of Directors have not adopted any resolution on the dividend distribution as of the date of the annual report. 7. Transfer of Shares SAF GYO shares consist of Group A and Group B shares. The Company s Articles of Incorporation do not include any provisions on restricting the transfer of shares. PART II PUBLIC DISCLOSURE AND TRANSPARENCY 8. Company Information Disclosure Policy In May 2010, the shareholders information policy was adopted with Board s resolution, announced to public and submitted to the General Assembly for the shareholders information. The policy defines: 44 SAF GYO 2011 Annual Report The information to be announced to the public other than those specified by legislation, The way, frequency and means of public disclosure, The frequency of press meetings to be held by the Board of Directors or Managers, The frequency of meetings to be held for public disclosure purposes, The method to be used for responding to inquiries made, The principles for public disclosure of information on future operations, The principles for use of the website. 9. Disclosure of Material Events SAF GYO issued 39 material event disclosures to the ISE in the calendar year 2011. There is no material event disclosure issued beyond the time required by the CMB or the ISE. 10. The Company s Website and its Contents SAF GYO re-designed its website www.safgyo.com during 2011 to provide information to the shareholders a t the highest standards. The Company s corporate website encompasses Trade Registry data, current shareholding and management structure, financial statements, the latest version of the Articles of Incorporation, material event disclosures, annual reports, periodic financial statements and reports, explanation notes and circulars, agenda of General Assembly meetings, lists of attendees and minutes of meetings and a sample form of power of attorney as well as the corporate governance compliance report. 11. Disclosure of Real and Legal Person as Ultimate Controlling Shareholder/Shareholders SAF GYO is an aggregate corporation and there is no real person shareholder with a shareholding percentage above 10%. Yıldız Holding A.Ş. has a 24.10% shareholding in the capital and is the only shareholder with shareholding percentage above 10%. The partnership structure of the Company is announced on the website and in the annual report. 12. Disclosure on Insiders The Company has taken all measures to prevent the use of insider information and the list of persons in a position of receiving insider information which would affect the value of the Company s capital market instruments was approved by the Board s resolution of May 2011 and the following updates were announced public in the Company s website. Corporate Management

Saf Gayrimenkul Yatırım Ortaklığı A.Ş. List of persons receiving insider information Updated on January 9, 2012 Ahmet ÖZOKUR Board Member Ahmet Temizyürek Certified Financial Advisor Ali Osman ÇAY Auditor Avni ÇELİK Chairman Aysun Leyla ESMERGÜL Deputy General Manager Ayşegül YEŞİLGÜN Yıldız Holding A.Ş., Coordinator for Company Mergers and Acquisitions, Business Development and Investor Relations Birgül Erdoğan Auditor Burcu Günhar Yıldız Holding A.Ş. M&A, Business Development and Investor Relations Specialist Cem Kütük Yıldız Holding A.Ş. M&A, Business Development and Investor Relations Specialist Cemalettin TURAN Auditor - YMM Emir ERÇEL Yıldız Holding A.Ş. Consolidation Specialist Erdem KES Yıldız Holding A.Ş. Financial Standards Manager Evin PEHLİVANLI Yıldız Holding A.Ş. Financial Control Fatih Mehmet Zahid ELMAS Yıldız Holding M&A, Business Development and Investor Relations Specialist Fatma SELCUK SAF GYO A.Ş. Investment Advisor (Bizim Menkul Değerler A.Ş.) Gamze YAVUZ Yıldız Holding A.Ş. Financial Control Specialist Gamze DİNÇKÖK YÜCAOĞLU Board Member Gökhan PARMAKSIZ Yıldız Holding A.Ş. Financial Control Specialist Gülay Çuğu BAL Yıldız Holding A.Ş. Financial Standards Manager Güner ÖZTEK Board Member Halil Cem KARAKAŞ Member of Audit Committee Haluk ÖZTÜRK Internal Lawyer Hasan Rıza BAYAR Yıldız Holding A.Ş. Financial Control Specialist İhsan Gökşin ULUSOY Managing Consultant İlknur BORACI Internal Lawyer Kenan Kutlu DORA Yıldız Holding A.Ş. Consolidation Specialist Mahmut KAYACIK Managing Consultant Mahmut Mahir KUŞÇULU Board Member Mahmut Sefa ÇELİK Board Member Mehmet TOPAK Investor Relations Director Meral Miryam MOLİNAS Managing Consultant Muhammet Raşit DERECİ Yıldız Holding A.Ş. Consolidation Specialist Murat ÜLKER Board Member Murat SORKUN Yıldız Holding A.Ş. Financial Standards Manager Mustafa TERCAN Yıldız Holding A.Ş. Financial Control Coordinator Mustafa AYDEMİR Yıldız Holding A.Ş. Financial Coordinator Müjde Şehsuvaroğlu DRT Independent Denetim ve Serbest Muhasebeci Mali Müşavirlik A.Ş. Naile Banuhan YÖRÜKOĞLU Akiş Gayrimenkul Yatırımı A.Ş. Deputy General Manager Nurtaç ZİYAL Yıldız Holding A.Ş. M&A, General Manager for Business Development and Investor Relations Oray Şükrü DEMİREL General Manager Osman BAYDOĞAN Board Member Özlem ATAÜNAL Board Member Raif Ali DİNÇKÖK Vice Chairman Reşat KARABIYIK SAF GYO A.Ş. Investment Advisor (Bizim Menkul Değerler A.Ş.) Rıfat HASAN Board Member Sabi RUSO Board Member Saim ÜSTÜNDAĞ DRT Bağımsız Denetim ve Serbest Muhasebeci Mali Müşavirlik A.Ş. SMMM Serhan KOLAÇ Chief Financial Officer Sinan Şahin Auditor Zuhal ŞEKER TUCKER Yıldız Holding A.Ş., General Manager for Corporate Communications 45

Corporate Governance Principles Compliance Report PART III. STAKEHOLDERS 13. Informing Stakeholders The Company plays a leading role in the settlement of conflicts arising between the Company and the stakeholders. The Company actively uses the means of public disclosure, such as material event disclosures, website and annual report to provide the optimum level of information. Stakeholder rights are protected within the framework of bona fide rules and the Company s rules, observing the Company s reputation, in cases where stakeholder rights are not regulated by legislation or the Articles of Incorporation, and stakeholders are duly informed accordingly. 14. Participation of Stakeholders in the Management The Articles of Incorporation do not include any provisions on participation of stakeholder in the management of the Company. Stakeholder rights are under protection by law. Board Members and managers do not make any disposals which would reduce the Company s assets, with the intention of damaging the stakeholders. 15. Human Resources Policy Human resources activities are carried out by the Human Resources Department of the Company that receives support from the human resources departments of the group companies. There is no representative in management to manage employee relations. No complaint as regards to discrimination was submitted by any Company employee. 16. Information on Relations with Customers and Suppliers As a strategy, SAF GYO strives to achieve perfect customer satisfaction regarding sales and leasing of the assets in its portfolio. Trade secrets of customers and suppliers are kept strictly confidential. 17. Social Responsibility SAF GYO conducts its operations with the awareness of social responsibility and with respect and care for people, environment and the law. The Company aims to add value to the cities with its projects and to contribute to the social, cultural, artistic and economic development of the regions it operates in. With its housing projects, SAF GYO aims to make a further contribution to the development and aesthetic quality in the area of the investment. As a part of the procedures for obtaining the necessary permits, an Environmental Impact Assessment (EIA) is obtained and the project impact on the environment is assessed by independent experts. Furthermore, the Akasya Kent stage project comprises residences and a shopping mall that will qualify for Breem Certification. As part of its social responsibility awareness efforts, SAF GYO is constructing a 32-class elementary school that will be donated to the Ministry of National Education, around 11 km road in order to ease the traffic load on the Acıbadem neighborhood as a result of the Akasya Acıbadem Project and a connecting road to Ünalan station on the 420 m long Kartal Kadıköy subway line. Furthermore, the Company provides financial and technical support to the Üsküdar Municipality for the construction of its Cultural House. PART IV BOARD OF DIRECTORS 18. Structure and Composition of the Board of Directors and Independent Members The management and business of the Company are conducted by the Board of Directors consisting of 12 members to be elected by the General Assembly for the office term of one year, within the limits of the Turkish Commercial Code. Of this total, four Board Members are elected from among the candidates designated by holders of Group A 46 SAF GYO 2011 Annual Report Corporate Management

shares. Other Board Members are elected from among the candidates to be designated according to general provisions. The positions of SAF GYO Chairman and General Manager are held by two different persons. Names of the members of the Board of Directors and the Executive Management are listed below. Board Members Avni ÇELİK Raif Ali DİNÇKÖK Ahmet ÖZOKUR Gamze DİNÇKÖK YÜCAOĞLU Mahmut Sefa ÇELİK Murat ÜLKER Özlem ATAÜNAL Rifat HASAN Güner ÖZTEK Mahmut Mahir KUŞÇULU Osman BAYDOĞAN Sabi RUSO Managing Consultants İhsan Gökşin DURUSOY Mahmut KAYACIK Meral KANETİ MOLİNAS General Manager Oray Şükrü DEMİREL Chairman Vice Chairman Member Member Member Member Member Member Independent Member Independent Member Independent Member Independent Member Four members are independent Board Members. Cases where the conditions of independence is not met, it is reported to the Board of Directors by one of the independent members. 19. Qualifications of Board Members The minimum qualifications required for appointment as a Board Member of SAF GYO correspond to those mentioned in the CMB s Corporate Governance Principles. The Board Members are required to meet the requirements set forth in the CMB s Communiqué on the Principles for Real Estate Investment Trusts, which is mentioned also in the SAF GYO Articles of Incorporation. Strategic goals for the Company s growth were defined by the managers before public offering and approved by the Board. The Company s Board of Directors meets at least once a month and monitors the steps taken by mangers in line with the defined strategic goals and their performance levels. In addition, the Board examines and approves the financial statements showing periodic operational results. 20. Mission, Vision and Strategic Goals of the Company The Company s investment strategy is to provide a diversified real estate portfolio and to minimize risks and maximize profit for its investors. SAF GYO announced its strategic goals in the annual report and on its website. As regards to the decisions on investments to extend the portfolio in line with the strategic goals, the managers conduct financial analysis/ profitability surveys and submit them to the approval by the Board of Directors. Company management follows the performance through financial statements issued on quarterly basis. SAF GYO s Vision: To realize world class projects that will bring momentum to the development and advancement of the real estate market and create value for the Turkish economy and to continue to be one of the leading trustworthy companies in the sector. SAF GYO Board of Directors does not perform any actions regarding the restrictions set forth under Article 18 of the Articles of Incorporation. Independent Board Members submit a statement on independence to the Board during the course of appointment. SAF GYO s Mission: To provide returns for its investors through sustainable growth and high profitability by closely tracking the areas of development in the real estate sector. 47

Corporate Governance Principles Compliance Report 21. Risk Management and Internal Control Mechanism SAF GYO aims to minimize risk for its investors by offering a wide variety of real estate properties and choosing real estate that would yield continuous rental income, and this is also adopted as its investment strategy. The real estate in the Company s portfolio is covered with comprehensive risk insurance. The primary risks of the Company, arising out of financial instruments, are interest rate risk, liquidity risk, foreign exchange risk and credit risk. Interest Rate Risk Interest rate risk arises due to the likely influence of changes in interest rates on the financial statements. The Company is exposed to interest rate risk due to different maturity dates of assets and liabilities within a certain period of time. The Company has not established a risk management model and practices within the organization. The Company manages the risk with the resolutions and implementation of resolutions, although it has not developed a defined risk management model. Liquidity Risk Liquidity risk is the risk of a company s inability to meet funding requirements. The Company manages liquidity risk by regularly monitoring the estimated and actual cash inflows and by ensuring the maintenance of funds and borrowing reserve through matching the maturity of its financial assets and liabilities. Foreign Exchange Risk The Company is exposed to foreign exchange risk due to assets and liabilities denominated in terms of foreign exchange. The financial risks stated above are closely monitored by the Financial Affairs Department and the General Manager and the Audit Committee, set up to ensure healthy execution of the financial and operational activities, submits the issues at hand and suggested solutions to the Board of Directors. 22. Authority and Responsibilities of the Members of the Board of Directors and Executives The authority and responsibilities of the Board Members are defined on the Company s Articles of Incorporation which are disclosed in the Company s website at www.safgyo.com. The authority of SAF GYO executives are clearly defined in the list of authorized signatures, approved by the Board of Directors. 23. Operating Principles of the Board of Directors The Board of Directors convenes when deemed necessary for the business and operations of the Company, upon the call of the Chairman or Vice Chairman as provided in the Company s Articles of Incorporation. The meeting agenda is prepared by the Chairman and can be changed by a resolution of the Board. In 2011, SAF GYO Board of Directors convened 24 times and adopted 24 resolutions at these meetings. Each Board member has one vote. The meeting date is determined to ensure full attendance by the members. A non-attending member may not vote, in written or by other means, unless the member provides an acceptable excuse. Information on the operation of the Board of Directors is provided by the Board of Directors Secretariat, reporting to the Chairman. The meeting agenda is prepared before every meeting; the meeting day and place are fixed and sent to each member of Board no later than 2 days prior the meeting day. The Secretariat prepared the minutes of meeting covering the issues discussed during the meeting which is then sent to each member. During the meeting, the minutes of previous meetings are submitted for the Board Members approval. A copy of each meeting s minutes is kept in Company files. As provided in the Articles of Incorporation, the members vote for or against the issue discussed. Any member voting against the issue shall affix the reason of disapproval and his/her signature under the resolution. 48 SAF GYO 2011 Annual Report Corporate Management

24. Prohibition on Engaging in Transactions and Competing with the Company As mentioned in the Company s Articles of Incorporation, The members of the Board of Directors shall not attend the discussion of issues for his/her personal benefit or for the benefit of up to third degree relatives by blood and by marriage including the spouse, or through lineal consanguinity. Any member violating this provision is obliged to indemnify the losses incurred as result of the relevant transaction. 25. Ethical Rules The ethical rules adopted by SAF GYO were approved by the Board s resolution passed in May 2009 and announced on the Company s website in line with the information policy. 27. Financial Benefits to the Board of Directors The honorarium to be paid to the Board Members is determined annually by the General Assembly, as provided in the Company s Articles of Incorporation. In 2011, the General Assembly decided not to pay an honorarium to Board Members, thus no remuneration was made to Board Members. The Company has not established a separate remuneration system based on the Board Members performance and reflecting the performance of SAF GYO. The Company has not lent any amounts to any members of its Board of Directors, nor has extended credit to them, nor offered any guarantees, such as sureties, in their favor. 26. Number, Structure and Independence of Committees Established by the Board of Directors The Board of Directors established the Audit Committee and the Corporate Governance Committee within the scope of its efforts for compliance with the corporate governance principles. Members of the Audit Committee are Sabri RUSO, Osman BAYDOĞAN and Halil Cem KARAKAŞ. The Committees are responsible to examine the financial statements for any misstatement and to take necessary measures to ensure efficient and transparent internal and independent audit. None of the members of these committees holds an executive position in the Company. Mahmut Mahir KUŞÇULU was appointed as Chairman of the Corporate Governance Committee and Güner ÖZTEK and Mehmet TOPAK as members. The Committee is responsible to monitor the corporate governance activities within the Company. 49

Amendments made to the Articles of Incorporation during the Year OLD ARTICLE Company s Trade Name Article 2 The Company s trade name is Sağlam Gayrimenkul Yatırım Ortaklığı Anonim Şirketi and hereinafter will be referred to as the Company. Capital and Share Certificates Article 7 The Company s registered capital is TL 500,000,000. - (five hundred million) divided into 50,000,000,000 (fifty billion) shares with a nominal value of 1 kuruş each. The authorization granted by the Capital Markets Board for the upper limit of registered capital is valid for five years between 2008 and 2012. In order to adopt the resolution on capital increase after 2012, even if the permitted upper limit of registered capital is not attained at the end of 2012, the Board of Directors is obliged to obtain authorization for a new validation period from the General Assembly, after obtaining permission of the Capital Markets Board for the same or a new upper limit amount. In case the necessary authorization by the General Assembly cannot be obtained, the Company shall be deemed as opting out of the registered capital system. The Company s capital amounts to TL 56,000,000.-, is fully paid and divided into 5,600,000,000 (five billion six hundred million) shares with a nominal value of 1 kuruş each. The issued capital is represented by 40,000,000 registered shares of Group A equivalent to TL 400,000 and 5,560,000,000 bearer shares of Group B equivalent to TL 55,600,000.-. NEW ARTICLE Company s Trade Name Article 2 The Company s trade name is SAF Gayrimenkul Yatırım Ortaklığı Anonim Şirketi and hereinafter will be referred to as the Company. Capital and Share Certificates Article 7 The Company s registered capital is TL 2,000,000,000.- (two billion Turkish lira) divided into 200,000,000,000 (two hundred billion) shares with a nominal value of 1 kuruş (one kuruş) each. The Company s issued capital amounts to TL 886,601,669 (eight hundred eighty-six million six hundred and one thousand six hundred sixty-nine Turkish lira), is fully paid and divided into 88,660,166,900 (eighty-eight billion six hundred sixty million one hundred sixty-six thousand nine hundred) shares with a nominal value of 1 Kr (one kuruş) each. Former capital of TL 56,000,000 has been fully paid. The amount of the last increase of TL 830,601,669 is covered upon takeover of Saf Gayrimenkul Geliştirme İnşaat ve Ticaret Anonim Şirketi on March 31, 2011 completely with its assets and liabilities, in accordance with Article 451 of the Turkish Commercial Code, Articles 19 and 20 of the Corporate Tax Law numbered 5520, the Capital Market Law and other relevant provisions of law and upon merger realized within the scope of the Merger Agreement prepared in accordance with the expert s report dated August 5, 2011 issued pursuant to the decree of the 1. Commercial Court of First Instance of Kadıköy dated July 18, 2011 under basic file number 2011/628 and the competent qualified institution report dated July 27, 2011 issued by Ulusal Bağımsız Denetim ve Yeminli Mali Müşavirlik A.Ş. and the provisions of the Capital Market legislation. A total of 83,060,166,900 shares with nominal value of 1 Kr each, issued as result of the merger, are distributed among the shareholders of Saf Gayrimenkul Geliştirme İnşaat ve Ticaret Anonim Şirketi, dissolved upon the merger, proportionate to their respective shares in the dissolved company, taking the merger rate as basis. 50 SAF GYO 2011 Annual Report Corporate Management

Name Surname/ Trade Name Class Group Type Number of Shares Participating Amount TL Murat ÜLKER 7,000,000 1 A Registered 20,000,000 200,000 1 B Bearer 680,000,000 6,800,000 Ahsen ÖZOKUR 7,000,000 1 A Registered 20,000,000 200,000 1 B Bearer 680,000,000 6,800,000 Mahmut Mahir KUŞÇULU 1 B Bearer 400 4 İsmail BACACI 1 B Bearer 400 4 Yıldız Holding Anonim Şirketi 1 B Bearer 408,184,200 4,081,42 Ülker Çikolata Sanayi veticaret A.Ş. 1 B Bearer 400,000,000 4,000,000 Ülker Bisküvi Sanayi veticaret A.Ş. 1 B Bearer 600,000,000 6,000,000 Offered to the Public B Bearer 2,791,815,000 27,918,150 TOTAL 5,600,000,000 56,000,000 Group A shares are registered shares and Group B shares are bearer shares. Transfer of the registered shares cannot be restricted. Transfer of Company shares before a public offering is subject to the General Assembly s permission, regardless any shareholding percentage. For share transfers to be made under this Article, new shareholders shall meet the requirements applicable for the founders. The Board of Directors is entitled to increase the issued capital by issuing new shares up to the upper limit of the registered capital and to take resolution on restricting the acquisition of new shares by its shareholders and on issuing premium share, in accordance with the provisions of the Capital Market Law. For capital increases, new Group A shares will be issued for Group A shares and new Group B shares for Group B shares, however, in case the Board restricts the shareholder right to acquire new shares, all new shares will be issued as Group B and bearer shares. For capital increases, shares remained after exercise of pre-emptive rights and all shares issued in cases where the pre-emptive right is restricted shall be offered to public at market price, provided that the price is not below the nominal value. The issued capital is represented by 40,000,000 registered shares of Group A, equivalent to TL 400,000 and 88,660,166,900 bearer shares of Group B equivalent to TL 886,601,669. Name Surname/ Trade Name Group Type Number of Participating Shares Amount TL Murat ÜLKER A Registered 20,000,000 200,000 Murat ÜLKER B Bearer 680,000,000 6,800,000 Ahsen ÖZOKUR A Registered 20,000,000 200,000 Ahsen ÖZOKUR B Bearer 680,000,000 6,800,000 Yıldız Holding A.Ş. B Bearer 21,365,041,726 213,650,417 Gözde Girişim Sermayesi Yatırım Ortaklığı A.Ş. B Bearer 408,184,200 4,081,842 Ülker Çikolata San. A.Ş. B Bearer 294,276,500 2,942,765 Mahmut Mahir Kuşçulu B Bearer 400 4 İsmail Bacacı B Bearer 400 4 Avni Çelik B Bearer 169,442,746 1,694,427 Sinpaş Yapı End.ve Tic. A.Ş. B Bearer 8,226,278,926 82,262,789 Sinpaş Gayr. Yat. Ort. A.Ş. B Bearer 6,143,129,941 61,431,299 Age Investment Holding B.V. B Bearer 5,398,910,846 53,989,108 Abdullah Tivnikli B Bearer 827,279,265 8,272,793 Akiş Gayr. Yatırımı A.Ş. B Bearer 5,814,218,608 58,142,186 Atlantik Holding A.Ş. B Bearer 1,938,070,562 19,380,706 Ali Raif Dinçkök B Bearer 8,305,459,493 83,054,595 Ömer Dinçkök B Bearer 6,229,512,515 62,295,125 Raif Ali Dinçkök B Bearer 2,093,116,205 20,931,162 Ayça Dinçkök B Bearer 830,601,669 8,306,017 Gamze Dinçkök B Bearer 830,601,669 8,306,017 Mutlu Dinçkök B Bearer 830,601,669 8,306,017 Alize Dinçkök Eyüboğlu B Bearer 260,808,924 2,608,089 Nilüfer Çiftçi B Bearer 1,938,067,101 19,380,671 Aslan Badi B Bearer 830,601,669 8,306,017 Doğu Batı San. Ürünleri A.Ş. B Bearer 830,601,669 8,306,017 Rıfat Hasan B Bearer 4,485,249,015 44,852,490 Mair Kasuto B Bearer 2,990,166,007 29,901,660 Nesim Özmandıracı B Bearer 3,322,406,675 33,224,067 Offered to the Public B Bearer 2,897,538,50 28,975,385 TOTAL 88,660,166,900 886,601,669 It is mandatory to show the amount of issued capital on the documents bearing the Company s trade name. The shares representing the capital shall be recorded within the scope of dematerialization rules. Group A shares are registered shares and Group B shares are bearer shares. Transfer of the registered shares cannot be restricted. Transfer of preferred shares is subject to the General Assembly s permission, regardless any shareholding percentage. 51

Amendments made to the Articles of Incorporation During the Year Composition and Term of Office of the Board of Directors Article 11 The management and business of the Company are conducted by the Board of Directors consisting of six members to be elected by the General Assembly for the term of office of one year, within the limits of the Turkish Commercial Code. Of this total, two Board Members are elected from among the candidates designated by holders of Group A shares. Other Board Members are elected from among the candidates to be designated according to general provisions. At the first meeting of the Board, a chairman and a vice chairman to represent the chairman in his absence, are elected among its members. For at least one third of the Members of Board of Directors, it is mandatory that there is no employment, capital or trade relation established, directly or indirectly, between: leader entrepreneur defined in the capital market legislation, companies where the leader entrepreneur has shareholding rate or voting right more than 10%, shareholders who have the right to nominate candidate for the Board of Directors, company providing consultancy services, operator companies, and between shareholders who have shareholding percentage of 10% or above or voting rate at same rate and companies where shareholders who have the right to nominate candidate for the Board of Directors have shareholding percentage of 10% or above or voting rate at same rate, and there should be no kinship by blood or by marriage up to third degree between the parties, including spouses. If the result of calculation of 1/3 of members is a fractional figure the next whole number shall be taken as basis for calculation. The Board of Directors is entitled to increase the issued capital by issuing new shares up to the upper limit of the registered capital and to take resolution on restricting the acquisition of new shares by its shareholders and on issuing premium share, in accordance with the provisions of the Capital Market Law. For capital increases, new Group A shares will be issued for Group A shares and new Group B shares for Group B shares, however, in case the Board restricts the shareholders right to acquire new shares, all new shares will be issued as Group B and bearer shares. For capital increases, shares remaining after exercise of pre-emptive rights and all shares issued in cases where the pre-emptive right is restricted shall be offered to the public at market price, provided that the price is not below the nominal value. It is mandatory to show the amount of issued capital on the documents bearing the Company s trade name. The shares representing the capital shall be recorded within the scope of dematerialization rules. Composition and Term of Office of the Board of Directors Article 11 The management and business of the Company are conducted by the Board of Directors consisting of 12 members to be elected by the General Assembly for the term of office of one year, within the limits of the Turkish Commercial Code. Of this total, four Board Members are elected from among the candidates designated by holders of Group A shares. Other Board Members are elected from among the candidates to be designated according to general provisions. At the first meeting of the Board, a chairman and a vice chairman to represent the chairman in his/ her absence, are elected among its members. It is mandatory that there is no employment, capital or trade relation established, directly or indirectly, between at least 1/3 of the Board members and leader entrepreneurs defined in the capital market legislation, companies where the leader entrepreneur has shareholding percentage or voting right more than 10%, shareholders who have the right to nominate candidate for the Board of Directors, company providing consultancy services, operator companies, 52 SAF GYO 2011 Annual Report Corporate Management

The members of the Board of Directors are elected for the term of office of maximum one year and the members may be re-elected. In case of any vacant position, the Board shall appoint a person meeting the qualification requirements stated in the Turkish Commercial Code and the Capital Market Legislation, on a temporary basis, and submits the appointment for approval by the next General Assembly. Thus, the elected member serves for the remaining term of office of the ex-member. The General Assembly is entitled to dismiss the Board members anytime. The members of the initial Board of Directors are shown under provisional article 1. Meetings of Board of Directors Article 13 The Board of Directors convenes when deemed necessary for the business and operations of the Company, upon the call of the Chairman or Vice Chairman. Any member of the Board is entitled to call the Board for a meeting by filing a written application with the Chairman or Vice Chairman. Each Board member has one voting right which is exercised in person. The Board of Directors is entitled to pass resolutions on the proposal presented by a Member upon obtaining written consent of other members, unless any Board Member makes a call for a physical meeting. The meeting agenda is prepared by the Chairman and can be changed with the resolution of the Board. The place of the Board meeting is the Company s registered office, but it can be held at any other location the Board decides upon. The Board of Directors convene and pass its resolutions in accordance with the provisions of the Turkish Commercial Code. In case of an equal number of votes, the issue shall be included in the next meeting s agenda. The members of the Board vote for or against the issue discussed. Any member voting against the issue shall affix the reason of disapproval and his/her signature under the resolution. A non-attending member may not vote, in written or by other means, unless the member provides an acceptable excuse. and between shareholders who have shareholding percentage of 10% or above or voting rate at the same rate and companies where shareholders who have the right to nominate a candidate for the Board of Directors have shareholding percentage of 10% or above or voting rate at same rate, and there should be no kinship by blood or by marriage up to third degree between the parties, including spouses. If the result of calculation of 1/3 of members is a fractional figurer, the next whole number shall be taken as basis for calculation. The members of the Board of Directors are elected for the term of office of maximum one year and the members may be re-elected. In case of any vacant position, the Board shall appoint a person meeting the qualification requirements stated in the Turkish Commercial Code and the Capital Market Legislation, on a temporary basis, and submits the appointment for approval by the next General Assembly. Thus, the elected member serves for the remaining term of office of the ex-member. The General Assembly is entitled to dismiss the Board members anytime. Meetings of Board of Directors Article 13 The Board of Directors convenes when deemed necessary for the business and operations of the Company, upon the call of the Chairman or Vice Chairman. Any member of Board is entitled to call the Board for meeting by filing a written application with the Chairman or Vice Chairman. If the Chairman or Vice Chairman does not convene the meeting, the members shall be entitled to a call for a meeting directly. Each Board member has one voting right which is exercised in person. The Board of Directors is entitled to pass resolutions on the proposal presented by a Member upon obtaining written consent of other members, unless any Board Member makes a call for physical meeting. The meeting agenda is prepared by the Chairman and can be changed with the resolution of the Board. The location of the Board meetings is the Company s registered office, but it can be held at any other location the Board decides upon, provided that all Members of the Board of Directors are notified in writing. The quorum to initiate the meeting requires the attendance of at least 11 members, while affirmative votes of at least 11 members are required to pass a resolution. 53

Amendments made to the Articles of Incorporation During the Year General Assembly Meetings Article 22 The General Assembly meets ordinarily and extraordinarily. The Ordinary General Assembly convenes at least one a year and within three months after the closing of the Company s accounting year and discusses and passes resolutions on the issues in the agenda prepared by the Board of Directors, taking into consideration the provisions of Article 369 of the Turkish Commercial Code. The Extraordinary General Assembly convenes when deemed necessary for the business and operation of the Company and in accordance with the provisions of law and of these Articles of Incorporation. The place and time of the General Assembly meeting shall be duly announced. Each shareholder has one voting right at General Assembly meetings. General Assembly Meetings and Quorum Article 22 The General Assembly meets ordinarily and extraordinarily. The Ordinary General Assembly convenes at least one a year and within three months after the closing of the Company s accounting year and discusses and passes resolutions on the issues in the agenda prepared by the Board of Directors, taking into consideration the provisions of Article 369 of the Turkish Commercial Code. The Extraordinary General Assembly convenes when deemed necessary for the business and operation of the Company and in accordance with the provisions of law and of these Articles of Incorporation. The place and time of the General Assembly meeting shall be duly announced. Each shareholder has one voting right at General Assembly meetings. The ordinary or extraordinary General Assembly convenes upon the attendance of shareholders representing at least 51% of the Company s capital and passes resolution upon affirmative vote cast by shareholders representing at least 51% of the Company s capital. The aforesaid quorum of meeting and resolution shall be applicable for next and all succeeding meetings. Cases requiring a higher majority pursuant the Turkish Commercial Code are reserved. 54 SAF GYO 2011 Annual Report Corporate Management

Dividend Distribution Policy SAF Real Estate Investment Trust adopted the principle of determining the dividend to be distributed subject to the provisions of the Turkish Commercial Code and the Articles of Incorporation, provided that it shall not be below the rate and amount set in the Capital Market Legislation, and of distributing dividend within statutory period. If the dividend to be distributed in line with the above principles is less than 5% of the issued capital, no dividend shall be distributed. The dividend to be distributed according the General Assembly s resolution can be distributed fully or partially in cash or as a bonus issue. Dividend distribution in cash shall be completed no later than the end of fifth month after the closing of the accounting year, while bonus shares shall be distributed no later than the end of six months. In accordance with the dividend distribution policy, the dividend shall be equally distributed among all shares as of the related accounting year. As per Article 30 of the Articles of Incorporation, for the dividend distribution, the amount remaining after deduction of amounts that are compulsory to be paid and allocated by the Company, such as overhead expenses and various depreciation values, under the generally accepted accounting principles and provisions for financial obligations from total yearend revenues and the amount obtained after deducting previous years losses, if any, from the net profit amount shown in the annual balance sheet shall be taken as a basis. 55

Summary Appraisal Reports SAF GYO holds a diversified real estate portfolio with high potential for rental income and project development. Komili Factory Building This property which has the attributes of a factory is used as logistics, distribution, storage and administrative building by SCA Yıldız Kağıt ve Kişisel Bakım Üretim A.Ş. It is located within the Gebze county of Kocaeli province and is registered as Balçık village on city block 177 and parcel number 15. The factory is built on land of 69,902 m 2 and has indoor space of 30,202 m 2 on two floors, one ground and one typical floor. The completed infrastructure of the region and the property s location within an industrial zone are factors increasing its value. The financial leasing annotation has been attached on the title registration since the property was acquired through financial leasing, however the annotation does not impede the inclusion of the property in the Company s portfolio. According to the appraisal performed by the real estate appraiser, the market value of the real property is TL 42,545,000 based on cost method and its rental value is 305,000 TL/month based on the precedent comparison method. Subject of Valuation Address Komili Factory Building Balçık Köyü Pelitli Yolu Cad. Gebze/Kocaeli Date of Valuation Request November 30, 2011 Issued by Elit Gayrimenkul Değerleme A.Ş. Report Date and Number December 28, 2011-2011/8435 Land Registry Abstract Plant built at Kocaeli province, Gebze county, Balçık village, in section map G22b14c4b, city block 177, on parcel numbered 15 with area of 69,907.48 m² Current Usage Lien Imposed Zoning Status Appraised Market Value Appraised Rental Value Storage, production and office No lien except that established for TEAŞ Industrial area TL 42,545,000.00 (VAT excluded) TL 305,000.00 (VAT excluded) 56 SAF GYO 2011 Annual Report Corporate Management

Mecidiyeköy Business Centre The appraised real property is located at Şehit Ahmet Sokak, No.: 4, Mecidiyeköy-Şişli-Istanbul and consists of 10 independent spaces with a total use area of 1,125.49 m². Due to its central location, easy accessibility, trade potential, proximity to trade and finance centers and as being one of the well-known business centers within the region, the real property has a high leasing and selling capability. According to the appraisal made in December 2011, the market value of independent spaces increased 7% over the previous year and reached TL 3,740,000 and its rental value has increased 9% and reached 24,000 TL/month. Subject of Valuation Mecidiyeköy Business centre, independent space numbered 124, 125, 126, 127, 128, 129, 136, 137, 138 and 139 Address Şehit Ahmet Sokak No: 4 Mecidiyeköy/Şişli/Istanbul Date of Valuation Request November 30, 2011 Issued by Elit Gayrimenkul Değerleme A.Ş. Report Date and Number December 28, 2011-2011/8433 Land Registry Abstract Current Usage Lien Imposed 10 independent spaces registered in Istanbul province, Şişli district Mecidiyeköy neighborhood, section map 311, city block 2013 parcel number 85 Office No lien imposed on the real property Total Area of Use 1,125.49 m² Zoning Status Appraised Market Value Appraised Rental Value Office + Residence area TL 3,740,000 (VAT excluded) TL 24,000 (VAT excluded) 57

Summary Appraisal Reports Antalya BTM Building Located in Kepez, Antalya, the Antalya BTM Building enjoys ever-increasing sale and rental value due to its accessibility, the high trade potential of the neighborhood and the fact that the most prestigious shopping malls and business centers are in the vicinity of the building. Built on an area of 3,712 m 2 with a total of 4,230 m 2 of indoor space, this property features a store of three floors, offers an ideal commercial opportunity with adequate parking. According to the appraisal performed by the real estate appraiser, the market value of the real property is TL 5,335,000 based on the cost method and its rental value is 34,000 TL/month based on precedent comparison method. Subject of Valuation Address Antalya BTM Building Bizim Toptan Satış Mağazaları A.Ş. Antalya Branch, Sinan Mahallesi, Serik Caddesi, Antalya Havalimanı karşısı, No.: 167, Kepez /Antalya Date of Valuation Request November 30, 2011 Land Registry Abstract Issued by Building land registered in Antalya province, Kepez town, Koyunlar village, city block 25029 parcel number 13, with total area of 3,712 m² Elit Gayrimenkul Değerleme A.Ş. Report Date and Number December 28, 2011-2011/8434 Current Usage Lien Imposed Wholesale food store No lien, except the annotation on leasing Total Area of Use 4,230 m² Zoning Status Appraised Market Value Appraised Rental Value Within the commercial area TL 5,335,000.00 (VAT excluded) TL 34,000.00 TL (VAT excluded) 58 SAF GYO 2011 Annual Report Corporate Management

Altunizade BTM Building The real property used as the Head Office and Altunizade Branch of Bizim Toptan Satış Mağazaları A.Ş. and is located at Kuşbakışı Cad. No.: 19 Altunizade/Üsküdar-Istanbul. It is suitable for use by supermarkets, plaza or business centers with its location, size, architectural properties and current status. The four-storey building is built on the land of 1,586 m² and has a total of 3,454 m² of indoor space. Its accessibility, high commercial potential of the area and proximity to important centers are the factors increasing the liquidity of the real property. The financial leasing annotation has been attached on title registration since the property was acquired through financial leasing, however the annotation does not impede the inclusion of the property in the Company s portfolio. According to the appraisal performed by the real estate appraiser, the market value of the real property is TL 9,880,000 and its rental value is 76,000 TL/month based on precedent comparison method. Subject of Valuation Altunizade BTM Building Address Bizim Toptan Satış Mağazaları A.Ş. Altunizade Branch Kuşbakışı Cad. No.: 19 Altunizade/Üsküdar/Istanbul Date of Valuation Request November 30, 2011 Issued by Elit Gayrimenkul Değerleme A.Ş. Report Date and Number December 28, 2011-2011/8432 Land Registry Abstract Current Usage Extract registered in Istanbul province, Üsküdar district Altunizade Mah. Kuşbakışı Sok. Section map 201 city block 2 parcel number 6 Wholesale food store Lien Imposed Total Area of Use 3,454 m² Zoning Status Appraised Market Value Appraised Rental Value Office and residence TL 9,880,000.00 (VAT excluded) TL 76,000.00 (VAT excluded) 59

Summary Appraisal Reports Fecir Business Centre The Fecir Business Centre, which has the attributes of a factory, is used as a logistics, distribution, storage and administrative building by Özgür Beynelminel Nakliyat Şirketi and is registered in the Istanbul province, Arnavutköy district, Ömerli neighborhood, city block 11 parcel numbered 8. The Fecir Business centre is located in the Arnavutköy district of Istanbul and is a property with the attributes of a factory that is used as a logistics, distribution, storage and administrative building. Prominent advantages of this property are its location within an industrially developing region, a large land area and the fact that it is situated by a main road. Built on total area of 10,187 m 2, the four-storey building consists of two basements, one ground and one typical floor and has total indoor space of 19,836 m 2. The financial leasing annotation has been attached on title registration since the property is acquired through financial leasing, however the annotation does not impede the inclusion of the property in the Company s portfolio. According to the appraisal performed by the real estate appraiser, the market value of the real property is TL 15,640,000 based on cost method and its rental value is 128,934 TL/month based on the revenue reduction method. Subject of Valuation Address Fecir Business Centre Koşuyolu Mevkii Ömerli Mah. Hadımköy/Istanbul Date of Valuation Request November 30, 2011 Land Registry Abstract Istanbul province, Arnavutköy district, Ömerli Mah. City block 113, parcel number 8 Issued by Report Date and Number Current Usage Lien Imposed Vektör Gayrimenkul Değerleme A.Ş. December 06, 2011-2011_300_08 Logistics, storage and distribution center No lien, except the annotation on leasing Total Area of Use 19,836 m² Zoning Status Appraised Market Value Appraised Rental Value Located within the an industrial area TL 15,640,000.00 (VAT excluded) TL 128,934.00 (VAT excluded) 60 SAF GYO 2011 Annual Report Corporate Management

Akasya Göl Project The valuation report, issued by Vektör Gayrimenkul Değerleme A.Ş., contains the minimum components required by the capital market legislation. The summary report is as follows. The real property appraised is the Akasya Project Göl Stage with a total area of 34,902 m 2, located in Istanbul province, Üsküdar district, Acıbadem Mh. City registered as city block 1083 and parcel number 67. Construction servitude is established on 459 independent spaces built on the real property and it is free from any lien restricting its transfer and assignment. The residences have been fully delivered to the owners. The market value of the real property is TL 307,578,731 based on precedent comparison method and is TL 296,305,890 based on cost method. Type of Real Property Appraised Short Description of the Real Property Appraised AKASYA GÖL Project, a residence project comprising 459 independent spaces AKASYA GÖL Project, is registered in Istanbul province, Üsküdar district, Acıbadem Mh. City registered as city block 1083 and parcel number 67 Land Area 34,902.07 m 2 Usable Indoor Space 98,663 m 2 Zoning Status Valuation Methods Used it is within settlement area as per Altunizade Tentative Plan approved on March 18, 1991, scale 1/1000, and as per amendment design approved on August 7, 2006 h: unrestricted, FAR: 1, authorization for separate ordered structuring For valuation purposes, the precedent comparison method and cost method were used. Date of Valuation Request December 28, 2011 Appraised Value TL 307,578,731 (VAT excluded) 61

Summary Appraisal Reports Akasya Koru Project The valuation report, issued by Vektör Gayrimenkul Değerleme A.Ş., contains the minimum components required by the capital market legislation. The summary report is as follows. The real property appraised is the Akasya Project Koru Stage with a total area of 31,885 m 2, consisting of 24,137 m 2 plot numbered 60, 3,111 m 2 parcel numbered 63 and 4,637 m 2 parcel numbered 64, and is located in Istanbul province, Üsküdar district, Acıbadem Mh. City recorded as city block 1341 and parcel number 60. Construction servitude is established on 432 independent spaces built on the real property and 381 real properties are free from any lien restricting transfer and assignment thereof. The independent spaces are encumbered with a mortgage as the guarantee for the SAF GYO customers housing loans and the delivery of residences on this parcel has been completed. The market value of the real property is TL 250,729,519 based on precedent comparison method used for parcels number 60 and 63 and on revenue reduction for parcel number 64. Type of Real Property Appraised Short Description of the Real Property AKASYA KORU Project, comprising 432 independent spaces AKASYA KORU Project registered in Istanbul province, Üsküdar district, Acıbadem neighborhood, and city block 1341, plots 60, 63 and 64 Land Area City block 1341 Parcel 60: 24,137.18 m2 Parcel 63: 3,111.40 m2 and Parcel 64: 4,637.08 m2 Total Area: 31,885.66 m 2 Usable Indoor Space 100,422 m 2 Zoning Status of the real property The property on city block 1341 parcel number 60 is within settlement area as per Altunizade Tentative Plan approved on March 18, 1991, scale 1/1000, and as per amendment design approved on August 7, 2006 h: unrestricted, FAR: 1, authorization for separate ordered structuring Parcels number 63 and 64 are located within the same plan but in the recreational area. Valuation Methods Used For valuation purposes, the precedent comparison method and cost method were used. Date of Valuation Request December 29, 2011 Appraised Value TL 250,729,519 (VAT excluded) 62 SAF GYO 2011 Annual Report Corporate Management

Akasya Kent Project Residence and Shopping Mall The valuation report, issued by Vektör Gayrimenkul Değerleme A.Ş., contains the minimum components required by the capital market legislation. The summary report is as follows. The real property appraised is the Akasya Project Kent Stage with total area of 42,799 m 2, located in Istanbul province, Üsküdar district, Acıbadem Mh. City registered as city block 1083 and parcel number 68. Construction servitude is established on 459 independent spaces built on the real property and it is free from any lien restricting its transfer and assignment. The residences have been fully delivered to the owners. A total of 929 independent spaces are built on the real property, consisting of 37 office units, 421 residences and 471 shops and storerooms. Net leaseble area in the shopping mall is 81,000 m 2. There are no legal restrictions applicable for the transfer and assignment of the real property. The Company obtained a loan for funding of its investment in Akasya Acıbadem Project and established a lien of US$ 33.5 million as guarantee of the loan. The Company anticipates to complete the delivery of residences in this stage of the project in September 2013 and to open the shopping mall in March 2013. The value of the real property is calculated using the cost and revenue methods and is TL 1,324,136,711. Type of Real Property Appraised Short Description of the Real Property Appraised The real property appraised is the AKASYA KENT Project registered in Istanbul province, Üsküdar district, Acıbadem neighborhood, city block 1083, and parcel 68 The real property appraised is the AKASYA KENT Project comprising 929 independent spaces. The project includes a shopping mall and residences erected over the mall. The shopping mall is built on one basement + ground floor + 3 typical floors and Tower A has ground floor + 40 floors and Tower B has ground floor + a5 typical floors Land Area 42,799.76 m 2 Usable Indoor Space Total: 396,639.92 m 2 Shopping Mall: 324,458.87 m 2 Tower A: 40,364.21 m 2 Tower B: 31,816.84 m 2 Zoning Status Valuation Methods Used The property is within trade + tourism area as per Altunizade Tentative Plan approved on March 18, 1991, scale 1/1000, and as per amendment design approved on August 7, 2006 h: unrestricted, e: 2,00, concept design to be prepared according to separate ordered structuring For valuation purposes, the capitalization of income and cost method were used. Date of Valuation Request December 23, 2011 Appraised Value The value appraised according to the completion rate of the construction is totally TL 1,324,136,711, VAT excluded (one billion three hundred twenty-four million one hundred thirty-six thousand seven hundred eleven Turkish lira) 63

64 SAF GYO 2011 Annual Report Corporate Management

SAF Gayrimenkul Yatırım Ortaklığı A. Ş. (Former name: Sağlam Gayrimenkul Yatırım Ortaklığı A.Ş. ) Financial Tables and Independent Auditors Report as of December 31, 2011 65

To the Board of Directors of Saf Gayrimenkul Yatırım Ortaklığı A.Ş. CONVINIENCE TRANSLATION OF INDEPENDENT AUDITOR S REPORT FOR THE YEAR 1 JANUARY - 31 DECEMBER 2011 We have audited the accompanying financial statements of Saf Gayrimenkul Yatırım Ortaklığı A.Ş. (previously referred to as Sağlam Gayrimenkul Yatırım Ortaklığı A.Ş. ), which comprise the statement of financial position as at 31 December 2011 and the statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended and a summary of significant accounting policies and other explanatory information. Management s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with financial reporting standards announced by the Capital Market Board. This responsibility includes designing, implementing and maintaining internal control relevant to the preparation and fair presentation of the financial statements that are free from material misstatement, whether due to fraud or error, selecting and applying appropriate accounting policies, and making accounting estimates that are reasonable in the circumstances. Auditor s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards announced by the Capital Market Board ( CMB ). Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Independent Auditor s Opinion In our opinion, the accompanying financial statements give a true and fair view of the financial position of Saf Gayrimenkul Yatırım Ortaklığı A.Ş as at 31 December 2011 and the results of its operations and its cash flows for the year then ended in accordance with financial reporting standards announced by the Capital Market Board. 67

Emphasis of Matter Saf Gayrimenkul Geliştirme İnşaat ve Ticaret A.Ş. and Sağlam Gayrimenkul Yatırım Ortaklığı A.Ş. decided that Saf Gayrimenkul Geliştirme İnşaat ve Ticaret A.Ş. will be merged by being taken over fully with all assets and liabilities by Sağlam Gayrimenkul Yatırım Ortaklığı A.Ş. as per Article 451 of the TCC, Articles 18, 19 and 20 of the Corporate Tax Law, Capital Market Law and the CMB s Communiqué Serial: I, No: 31. The CMB has approved the business combination application upon its resolution no: 31/887 issued in the meeting held on 23 September 2011. In the merger process, the articles of association of Sağlam Gayrimenkul Yatırım Ortaklığı A.Ş. was revised and the title of the Company was amended as Saf Gayrimenkul Yatırım Ortaklığı A.Ş. (Note 3). Under the related explanations of Turkish Financial Reporting Standarts 3 ( TFRS 3 ) Business Combinations in Note 3, Sağlam Gayrimenkul Yatırım Ortaklığı A.Ş. ( legal acquirer ) is the acquiree for accounting purposes. In this context, Saf Gayrimenkul Geliştirme İnşaat ve Ticaret A.Ş. ( legal acquiree ) whose equity shares are acquired is determined as the acquirer for accounting purposes. Non-trade trade receivables from related parties consist of loan amounts given to the Company s shareholders. In its written announcement made on 28 September 2011, the CMB requires full settlement of receivables from related parties within 9 months subsequent to the business combination approval (Note 11 and Note 37) and the release of mortgages (Note 22) given as guarantees in accordance with Article 24(g) of the Communiqué Serial: IV, No: 11. As described in Note 41, the adjustments to restate the financial statements as at 31 December 2010 have been audited. In our opinion, these adjustments are appropriate and have been applied properly. The matters described above do not affect our opinion. Other Matter The financial statements of Saf Gayrimenkul Geliştirme İnşaat ve Ticaret A.Ş. as of and for the year ended 31 December 2010 were audited by another auditor who expressed an unqualified opinion on those statements on 16 February 2011. Additional paragraph for English translation The effect of the differences between the accounting principles summarized in Section 2 and the accounting principles generally accepted in countries in which the accompanying financial statements are to be distributed and International Financial Reporting Standards (IFRS) have not been quantified and reflected in the accompanying financial statements. The accounting principles used in the preparation of the accompanying financial statements differ materially from IFRS. Accordingly, the accompanying financial statements are not intended to present the Company s financial position and results of its operations in accordance with accounting principles generally accepted in such countries of users of the financial statements and IFRS. İstanbul, 16 March 2012 DRT BAĞIMSIZ DENETİM VE SERBEST MUHASEBECİ MALİ MÜŞAVİRLİK A.Ş. Member of DELOITTE TOUCHE TOHMATSU LIMITED Saim Üstündağ Partner 68 SAF GYO 2011 Annual Report FıNANCIAL TABLES AND NOTES

CONTENTS PAGE BALANCE SHEETS... 72-73 STATEMENTS OF COMPREHENSIVE INCOME... 74 STATEMENT OF CHANGES IN SHAREHOLDERS EQUITY... 75 STATEMENTS OF CASH FLOWS..... 76 NOTES TO THE FINANCIAL STATEMENTS... 77-146 NOTE 1 ORGANISATION OF THE COMPANY AND NATURE OF OPERATIONS... 77 NOTE 2 BASIS OF PRESENTATION OF FINANCIAL STATEMENTS... 78 NOTE 3 BUSINESS COMBINATIONS.... 98 NOTE 4 JOINT VENTURES... 99 NOTE 5 SEGMENT REPORTING... 99 NOTE 6 CASH AND CASH EQUIVALENTS... 99 NOTE 7 FINANCIAL INVESTMENTS... 100 NOTE 8 FINANCIAL BORROWINGS... 100 NOTE 9 OTHER FINANCIAL LIABILITIES... 102 NOTE 10 TRADE RECEIVABLES AND PAYABLES... 103 NOTE 11 OTHER RECEIVABLES AND PAYABLES... 104 NOTE 12 RECEIVABLES AND PAYABLES FROM FINANCE SECTOR OPERATIONS... 105 NOTE 13 INVENTORIES...... 105 NOTE 14 BIOLOGICAL ASSETS... 106 NOTE 15 CONSTRUCTION CONTRACTS... 106 NOTE 16 INVESTMENT ACCOUNTED FOR UNDER EQUITY METHOD... 106 NOTE 17 INVESTMENT PROPERTIES... 106 NOTE 18 TANGIBLE ASSETS... 108 NOTE 19 INTANGIBLE ASSETS... 110 NOTE 20 GOODWİLL... 111 NOTE 21 GOVERMENT GRANTS... 111 NOTE 22 PROVISIONS,CONTINGENT ASSESTS AND LIABILITIES... 111 NOTE 23 COMMITMENTS AND CONTINGENCIES... 112 NOTE 24 EMPLOYMENT TERMINATION BENEFITS... 112 NOTE 25 PENSION PLANS... 113 NOTE 26 OTHER ASSESTS AND LIABILITIES... 113 NOTE 27 EQUITY... 115 NOTE 28 SALES AND COST OF SALES... 119 NOTE 29 RESEARCH AND DEVELOPMENT, MARKETING, SALES AND DISTRIBUTION AND GENERAL ADMINISTRATIVE EXPENSES... 120 NOTE 30 EXPENSES BY NATURE... 121 NOTE 31 INCOME/ EXPENSE FROM OTHER OPERATIONS... 122 NOTE 32 FINANCIAL INCOME... 123 NOTE 33 FINANCIAL EXPENSES... 123 NOTE 34 ASSEST CLASSIFIED AS HELD FOR SALE AND DISCOUNTINUED OPERATIONS... 124 NOTE 35 TAXATION... 124 NOTE 36 EARNINGS PER SHARE... 127 NOTE 37 TRANSACTIONS WITH RELATED PARTIES... 127 NOTE 38 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES... 131 NOTE 39 FINANCIAL INSTRUMENTS... 143 NOTE 40 EVENTS AFTER THE BALANCE SHEET DATE... 144 NOTE 41 OTHER ISSUES THAT SIGNIFICANTLY AFFECT THE FINANCIAL STATEMENTS OR OTHER ISSUES REQUIRED FOR THE CLEAR UNDERSTANDING OF FINANCIAL STATEMENTS... 144 NOTE 42 EXTENSION NOTE : CONTROL ON COMPLIANCE WITH PORTFOLIO LIMITATIONS... 145 69

AUDITED BALANCE SHEET AS OF 31 DECEMBER 2011 (Amounts are expressed in Turkish Lira (TL), unless otherwise stated) Restated Current Period Prior Period 31 December 31 December Note 2011 2010 ASSETS Current Assets 603.443.222 512.624.184 Cash and Cash Equivalents 6 213.342.342 316.736.405 Trade Receivables 10 40.060.822 982.678 -Receivables from related parties 337.579 - -Trade Receivables 39.723.243 982.678 Other Receivables 11 178.300.868 21.602.784 -Other from related parties 175.929.834 20.487.760 -Other receivables 2.371.034 1.115.024 Inventories 13 29.152.194 148.925.401 Other Current Assets 26 142.586.996 24.376.916 Non-Current Assets 344.251.408 249.042.860 Financial Investments 7 -Avaliable for sale financial assets 14.400.000 - Trade Receivables 10 3.373.258 440.610 -Trade Receivables 3.373.258 440.610 Other Receivables 11 3.777.895 132.114.133 -Other receivables 3.777.895 1.407 -Other receivables from related parties - 132.112.726 Investment properties 17 286.282.836 71.159.335 Property, Plant and Equipment 18 5.650.645 7.367.904 Intangible Assets 19 55.297 63.152 Deferred Tax Assets 35-1.903.069 Other Non-Current Assets 26 30.711.477 35.994.657 TOTAL ASSETS 947.694.630 761.667.044 The accompanying notes form an integral part of these financial statements. 70 SAF GYO 2011 Annual Report 1 FıNANCIAL TABLES AND NOTES

AUDITED BALANCE SHEET AS OF 31 DECEMBER 2011 (Amounts are expressed in Turkish Lira (TL), unless otherwise stated) Current Period Restated Prior Period 31 December 31 December LIABILITIES 2011 2010 Current Liabilities 265.418.610 307.001.486 Financial Borrowings 8 223.973.180 55.318.969 Financial liabilities to related parties 9.777.343 - -Obligations under finance leases 9.777.343 - Trade Payables 10 22.057.240 2.648.167 -Trade Payables 21.882.988 2.300.274 - Due to Related Parties 174.252 347.893 Current tax liabilities 3.214.191 443.204 Other Payables 11 2.298.016 437.947 -Other Non-trade Payables 2.218.066 417.699 -Non-trade Payables to Realted Parties 79.950 20.248 Provisions for Employee Benefits 24 34.290 26.334 Other Current Liabilities 26 4.064.350 248.126.865 -Other Current Liabilities 3.617.107 233.820.579 -Other Current Liabilities to Related Parties 447.243 14.306.286 Non-Current Liabilities 245.254.576 428.297.000 Financial Liabilities 8-149.475.496 Financial liabilities to related parties 713.948 - -Obligations under finance leases 713.948 - Other Payables 11 2.325.949 1.677.585 Provisions for Employee Benefits 24 136.608 64.517 Other Non-Current Liabilities 26 242.078.071 277.079.402 -Other Non-Current Liabilities to Related Parties 16.516.827 4.033.839 -Other Non-Current Liabilities 225.561.244 273.045.563 EQUITY 437.021.444 26.368.558 Share capital 27 886.601.669 14.050.000 Balancing Account for Merger Capital 27 (806.601.669) - Inflation Adjustment to Issued capital 36.467 36.467 Restricted Reserves 27 1.295.750 12.091 Share Premium 736.316 - Retained Earnings 25.464.566 (7.302.854) Profit / (Loss) for the year 329.488.345 19.572.854 TOTAL EQUITY AND LIABILITIES 947.694.630 761.667.044 The accompanying notes form an integral part of these financial statements. 2 71

AUDITED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2011 (Amounts are expressed in Turkish Lira (TL) unless otherwise stated) Restated Current Period Prior Period 1 January- 1 January- 31 December 31 December Note 2011 2010 OPERATING INCOME Sales Revenue 28 585.198.037 - Cost of Sales (-) 28 (283.323.216) - GROSS PROFIT 301.874.821 - - Marketing, Selling and Distribution Expenses (-) 29-30 (5.144.221) (6.282.574) General Administrative Expenses (-) 29-30 (3.717.262) (2.223.216) Other Income 31 2.559.051 1.342.811 Other Expenses (-) 31 (7.485.281) (162.019) - OPERATING PROFIT / (LOSS) 288.087.108 (7.324.998) (Non-operating) Financial Income 32 61.250.601 46.813.901 (Non-operating) Financial Expenses (-) 33 (13.295.442) (14.979.587) INCOME/ (LOSS) FROM CONTINUING OPERATIONS BEFORE TAXATION 336.042.267 24.509.316 Current Tax Expense (6.553.922) (4.936.462) Income tax expense 35 (6.553.922) (5.746.175) Deferred tax charge/expense 35-809.713 PROFIT FOR THE PERIOD FROM CONTINUING OPERATIONS 329.488.345 19.572.854 PROFIT FOR THE PERIOD 329.488.345 19.572.854 Weighted average number of shares (Full TL) 839.935.002 830.601.669 Other Comprehensive Income - - TOTAL COMPHREHENSIVE INCOME 329.488.345 19.572.854 Earnings Per Share 0,392 0,024 The accompanying notes form an integral part of these financial statements. 72 SAF GYO 2011 Annual Report 3 FıNANCIAL TABLES AND NOTES

STATEMENT OF CHANGES IN SHAREHOLDERS EQUITY FOR THE YEAR ENDED 31 DECEMBER 2011 (Amounts are expressed in Turkish Lira (TL) unless otherwise stated) Balancing Account Adjustment Net Share for Merger to Share Share Revaluation Restricted Retained Period Restated, audited Note Capital Capital Capital Premium Fund Reserves Earnings Profit/ (Loss) Total 1 January 2010 (Previosuly reported) 4.050.000-118.365-211.789.183 12.091 (4.505.225) (4.431.304) 207.033.110 Effect of adjustments - - - - (211.789.183) - 11.551.777 - (200.237.406) 1 January 2010 (restated) 16 4.050.000-118.365 - - 12.091 7.046.552 (4.431.304) 6.795.704 Transfer of loss of 2009 period 16 - - - - - - (4.431.304) 4.431.304 - Capital increase 10.000.000 - (81.898) - - (9.918.102) - - Total comprehensive income 23 - - - - - - - 19.572.854 19.572.854 Balance as of 31 December 2010 14.050.000-36.467 - - 12.091 (7.302.854) 19.572.854 26.368.558 Balancing Account Adjustment Net Share for Merger to Share Share Revaluation Restricted Retained Period Note Capital Capital Capital Premium Fund Reserves Earnings Profit/ (Loss) Total Balance as of 1 Janıuary 2011 14.050.000-36.467 - - 12.091 (7.302.854) 19.572.854 26.368.558 Transfer of profit of 2010 period 16 - - - - - 1.148.515 18.424.339 (19.572.854) - Business Combinations 3 56.000.000 - - 736.316-135.144 24.293.081-81.164.541 Capital increase 16 9.950.000 - - - - - (9.950.000) - - Transfers to reserves - - - - - - - - - Balancing account for merger capital 806.601.669 (806.601.669) - - - - - - - Total comprehensive income 23 - - - - - - - 329.488.345 329.488.345 Balance as of 31 December 2011 886.601.669 (806.601.669) 36.467 736.316-1.295.750 25.464.566 329.488.345 437.021.444 The accompanying notes form an integral part of these financial statements. 73

STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2011 loitte. (Amounts are expressed in Turkish Lira (TL) unless otherwise stated) Restated Current Period Prior Period 1 January- 1 January- 31 December 31 December Cash flows from operating activities Note 2011 2010 Profit for the year 329.488.345 19.572.854 Adjusments: Depreciation 17, 18, 19 1.830.400 2.718.129 Provision for employment termination benefits 24 96.895 29.652 Interest income 661.901 (3.783.588) Unused vacation liability 24 34.290 1.833 Provisions - (451.843) Operating profit before changes in working capital 332.111.831 18.087.037 (Increase)/decrease in trade receivables (40.373.881) 35.039.195 (Increase)/decrease in trade receivables from related parties (337.579) 403.000 (Increase)/decrease in other receivables (5.032.498) (1.060.349) (Increase)/decrease in other receivables from related parties (23.329.348) (111.332.314) (Increase)/decrease in current assets (87.554.000) (16.880.560) (Increase)/decrease in financial assets (10.298.775) - Increase / (decrease) in trade payables 19.439.319 551.905 Increase/(decrease) in trade payables from related parties (173.641) (72.800) Increase / (decrease) in provisions 2.508.433 1.558.153 Increase / (decrease) in other payables (244.422.087) 269.735.111 (Increase) / decrease in inventories 119.782.747 (47.664.338) Taxes paid 2.770.987 (5.302.971) Net cash generated by operating activities 65.091.508 143.061.069 Cash flows from investing activities Purchases of property and equipment 17 166.884 (198.426) Purchases of intangible assets 18 (34.739) (45.118) Increase in investment property 19 (138.242.129) (69.595.303) Interest income 5.699.322 3.795.462 (Increase)/decrease in other non-current assets 7.186.249 (12.632.419) Cash flows from investing activities (125.224.413) (78.675.804) Cash flows from financing activities Increase / (decrease) in financial borrowings (8.640.636) 93.981.355 Increase / (decrease) in other non-current liabilities (35.026.135) (180.808.959) Cash flows from financing activities (43.666.771) (86.827.604) Net changes cash equivalents (103.799.676) (22.442.339) Cash and cash equivalents at the begining of year 316.736.405 339.178.744 Cash and cash equivalents at the end of the year 6 212.936.729 316.736.405 The accompanying notes form an integral part of these financial statements. 74 SAF GYO 2011 Annual Report FıNANCIAL TABLES AND NOTES 5

NOTES TO THE AUDITED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2011 (Amounts are expressed in Turkish Lira (TL) unless otherwise stated) 1. ORGANIZATION AND OPERATION OF THE COMPANY Saf Gayrimenkul Geliştirme İnşaat ve Ticaret A.Ş. ( Company ), was established on 20 November 2000 in the name of Etkin ve Sürekli Yapı Denetimi Anonim Şirketi within the context of Decree Law regarding Building Inspection, number 595. Company became inoperative due to the cancellation of Decree Law number 595 and makes a subject and name change as of 25 March 2002, taking new name Prodek Mekan Tasarımı Proje Dekorasyon Ürünleri İnşaat Sanayi ve Ticaret A.Ş., and operated with its main activity in woodwork facility Sinpaş Yapı Endüstrisi ve Ticaret A.Ş. in Sarıgazi. On 25 February 2004, subject and name change was made again to operate in real estate investment sector and took the name Saf Gayrimenkul Geliştirme İnşaat ve Ticaret A.Ş. Sağlam Gayrimenkul Yatırım Ortaklığı A.Ş. was established in 2005 for the purpose of investing in properties, capital market instruments based on real estates, real estate projects, property rights and capital market instruments under the requirements of CMB Communiqué Serial: VI, No: 11 Principles of Real Estate Investment Companies ( the Communiqué ), in addition to other operations allowed in the Communiqué. Under Article 451 of the TCC, Articles 18, 19 and 20 of the Corporate Income Tax and the CMB s Communiqué Serial: I, No: 31 Basis of Business Combinations, assets and liabilities of Saf Gayrimenkul Geliştirme İnşaat ve Ticaret A.Ş. were concluded to be transferred to Sağlam Gayrimenkul Yatırım Ortaklığı A.Ş. on 1 June 2011 in accordance with the Board of Saf Gayrimenkul Geliştirme İnşaat ve Ticaret A.Ş. s decision no: 74 and the Board of Sağlam Gayrimenkul Yatırım Ortaklığı A.Ş. s decision no: 115. The CMB has approved the business combination application upon its resolution no: 31/887 issued in the meeting held on 23 September 2011. Subsequently, in the Extraordinary General Assembly meeting held on 31 October 2011, parties to the business combination have decided to combine the net asset value of Sağlam Gayrimenkul Yatırım Ortaklığı A.Ş. amounting to TL 75.183.397 and discounted cash flow of Saf Gayrimenkul Geliştirme amounting to TL 1.115.133.125 and accordingly, the Company s capital has increased to TL 886.601.669 and its registered capital ceiling is increased to TL 2.000.000.000. In the business combination period, Sağlam Gayrimenkul Yatırım Ortaklığı A.Ş. s title has been changed to Saf Gayrimenkul Yatırım Ortaklığı A.Ş. upon the amendment made to Article 2 in the AOA. (Note 3) The registered address of the Company is: Bulgurlu Mahallesi, Çilehane Yolu Caddesi, Saadet Sokak No:15 K.Çamlıca Üsküdar İstanbul. 75 6

NOTES TO THE AUDITED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2011 (Amounts are expressed in Turkish Lira (TL) unless otherwise stated) 1. ORGANIZATION AND OPERATION OF THE COMPANY As explained in its AOA, the Company can engage in the acquisition and disposal of, leasing of real estates, land, plots, offices, residences, business centers, shopping malls, hospitals, hotels, commercial warehouses, commercial parks and similar properties as well as foreign investments such as; real estates, as prescribed by the CMB; give and hold mortgages and pledges; give and hold mortgages and pledges in relation to third parties under the legislation set out in the CMB; act on behalf of third parties; establish, assign and/or divest rights of easement, usufruct, construction servitude, construction under specific conditions in accordance with the required statements of the CMB and engage in all kinds of transactions that are legally permissible. Shares of the company have been quoted in İstanbul Stock Exchange since 2 March 2007. As of 31 December 2011, the Company has 48 employees (31 December 2010: 35) Company is jointly controlled by Sinpaş Group, Eksim Group, Yıldız Holding, Akkök Group and Doğu Batı Group (Note 27). Dividend Payable: As of the date of this report, no decision is made regarding the dividend distribution by management. Dividend payment is subject to the approval of the shareholders in the annual General Assembly meeting. Approval of Financials: The financial statements have been approved by the Board of Directors and are authorized for issuance on 16 March 2012. The General Assembly has the authority to amend the financial statements. 2. BASIS OF THE PRESENTATION OF THE FINANCIAL STATEMENTS 2.1 The basis of presentation The Basis for Preparation of the Financial Statements and Significant Accounting Policies The Company maintains its books of account and prepares its statutory financial statements ( Statutory Financial Statements ) in accordance with accounting principles in the Turkish Commercial Code and tax legislation. The Capital Markets Board ( CMB ) has established principles, procedures and basis on the preparation of financial reports by enterprises and the representation of the reports with Communiqué No: XI/29 Communiqué on Capital Market Financial Reporting Standards. This Communiqué is applicable for the first interim financial statements to be prepared after 1 January 2008, and with this Communiqué, the Communiqué No: XI/25 Communiqué on Capital Market Accounting Standards has been repealed. In accordance with this Communiqué, the companies are supposed to prepare their financial statements in accordance with the International Financial Reporting Standards ( IAS/IFRS ) accepted by the European Union. Nevertheless, until the discrepancies between the IAS/IFRS accepted by the European Union, and the IAS/IFRS declared by IASB are announced by the Turkish Accounting Standards Board ( TASB ), IAS/IFRS will be in use. Under these circumstances, Turkish Accounting Standards/Turkish Financial Reporting Standards ( TAS/TFRS ), which are the standards published by TASB, not contradicting with IAS/IFRS will be predicated on. 76 SAF GYO 2011 Annual Report FıNANCIAL TABLES AND NOTES 7

NOTES TO THE AUDITED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2011 (Amounts are expressed in Turkish Lira (TL) unless otherwise stated) 2. BASIS OF THE PRESENTATION OF THE FINANCIAL STATEMENTS 2.1 The Basis of Presentation (cont d) The accompanying financial statements have been prepared in accordance with the formats and comply with CMB s announce on 17 April 2008 and 9 January 2009 regarding to the format of the financial statements and footnotes Statutory Decree No: 660, which has been effective and published in the Official Gazette on 2 November 2011, and the Additional Clause 1 of the Law No: 2499 were nullified and accordingly, Public Oversight, Accounting and Audit Standards Institution (the Institution ) was established. As per Additional Article 1 of the Statutory Decree, applicable laws and standards will apply until new standards and regulations are issued by the Institution and will become effective. In this respect, the respective matter has no effect over the Basis of The Preparation of Financial Statements Note disclosed in the accompanying financial statements as of the reporting date. The financial statements have been prepared on the historical cost basis except for the revaluation of financial assets. Historical cost is generally based on the fair value of the consideration given in exchange for assets. Functional Currency Accompanying financial statements of each entity are presented in the currency of the primary economic environment in which the entity operates (its functional currency). For the purpose of the financial statements, the results and financial position of each entity are expressed in TL, which is the functional currency of the Company, and the presentation currency for the financial. Adjustment of Financials in Hyperinflationary Periods As per the March 17 th 2005 dated, 11/367 numbered decree of CMB, companies engaged in Turkey and those of which prepare their financial statements in accordance with the CMB Accounting Standards (including IAS/IFRS exercisers), use of inflationary accounting standards have been discontinued effective from 1 January 2005. Pursuant effectuation, Financial Reporting Standards in Hyperinflationary Economies issued by the International Accounting Standards Committee (IASC); ( IAS/TAS 29 ) is not applied hence forward. Comparative information and reclassifications to the prior period financial statements: Financial statements of the Company has been prepared comparatively with the prior period in order to give information about financial position and performance. If the presentation or classification of the financial statements is changed, in order to maintain consistency, financial statements of the prior periods are also reclassified in line with the related changes (Note 41). Control on Compliance with Portfolio Limitations: Information stated in Extension note 42 - Control on Compliance with Portfolio Limitations are summarized information derived from 17th Article of Communique Serial:XI No:29 Principles of Financial Reporting in Capital Markets and prepared in line with the control on compliance with portfolio limitations Communique Serial:VI No:11 Basis of Real Estate Investment Companies 8 77

NOTES TO THE AUDITED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2011 (Amounts are expressed in Turkish Lira (TL) unless otherwise stated) 2. BASIS OF THE PRESENTATION OF THE FINANCIAL STATEMENTS (con t) 2.2 Changes in Accounting Policies Significant changes in accounting policies have been applied retrospectively and prior period financial statements are restated. The Company applied certain changes in accounting policies and these changes are disclosed in Note 41. 2.3 Changes and Errors in Accounting Estimates If estimated changes in accounting policies are for only one period, changes are applied on the current year but if the estimated changes effect the following periods, changes are applied both on the current and following years prospectively. There are not any significant changes in accounting estimates of the Company in the current period. Changes in accounting policies or accounting errors applied retroactively and the financial statements of the previous periods were adjusted. As mentioned in Note 41, the Company restated its financial statements of the prior year in the current year. - The Company s school construction on the Akasya Acıbadem plot since 2010, which is classified as ongoing investments, is transferred to expense accounts in the current period. The related adjustment had been also made in 2010. - In 2008, the Company s land on which residences on the A, B, and C plots and investment properties on the C plot of the Acıbadem Akasya Evleri Project were constructed on was valued using the fair value method but in 2010, the Company reversed the valuation and the related land was carried at historical cost. The valuation on the land where investment properties were constructed was cancelled. The related cancellation was also reflected in the 2010 financial statements having an impact amounting to TL 140.325.418. - Interests applied for murabahah loans expensed in prior periods are capitalized. - In 2010, Saf Gayrimenkul Geliştirme İnşaat ve Ticaret A.Ş. accounted for notes received for unrealized residence sales in the Trade Receivables account in the assets column, and in the Advances Received account in the liabilities column under the balance sheet. Notes received for unrealized residence sales were written off against the balance sheets accounts (short term TL 21.798.379, long term TL 45.916.169). 2.4 New and Revised International Financial Reporting Standards (a) New and Revised IFRSs affecting presentation and disclosure only None. 78 SAF GYO 2011 Annual Report FıNANCIAL TABLES AND NOTES 9

NOTES TO THE AUDITED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2011 (Amounts are expressed in Turkish Lira (TL) unless otherwise stated) 2. BASIS OF THE PRESENTATION OF THE FINANCIAL STATEMENTS (con t) 2.4 New and Revised International Financial Reporting Standards (b) New and Revised IFRSs affecting the reported financial performance and / or financial position None. (c) New and Revised IFRSs applied with no material effect on the financial statements The following new and revised IFRSs have also been adopted in these financial statements. The application of these new and revised IFRSs has not had any material impact on the amounts reported for the current and prior years but may affect the accounting for future transactions or arrangements. Amendments to IAS 1 Presentation of Financial Statements (as part of Improvements to IFRSs issued in 2010) The amendments to IAS 1 clarify that an entity may choose to disclose an analysis of other comprehensive income by item in the statement of changes in equity or in the notes to the financial statements. In the current year, Company has no Items of Other Comprehensive Income UMS 24 Related Party Disclosures (2009) IAS 24 (as revised in 2009) has been revised on the following two aspects: (a) IAS 24 (as revised in 2009) has changed the definition of a related party and (b) IAS 24 (as revised in 2009) introduces a partial exemption from the disclosure requirements for government-related entities. The Company and its subsidiaries are not government connected institution. Amendments to IFRS 3 Business Combinations As part of Improvements to IFRSs issued in 2010, IFRS 3 was amended to clarify that the measurement choice regarding non-controlling interests at the date of acquisition is only available in respect of non-controlling interests that are present ownership interests and that entitle their holders to a proportionate share of the entity's net assets in the event of liquidation. All other types of non-controlling interests are measured at their acquisition-date fair value, unless another measurement basis is required by other Standards. In addition, IFRS 3 was amended to provide more guidance regarding the accounting for share-based payment awards held by the acquiree's employees. Specifically, the amendments specify that share-based payment transactions of the acquiree that are not replaced should be measured in accordance with IFRS 2 Sharebased Payment at the acquisition date ( market-based measure ). The application of the amendments has had no impact on financial statements of the Company for the current and prior periods 10 79

NOTES TO THE AUDITED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2011 (Amounts are expressed in Turkish Lira (TL) unless otherwise stated) 2. Summary of Significant Accounting Policies (cont d) 2.4 New and Revised International Financial Reporting Standards (c) New and Revised IFRSs applied with no material effect on the financial statements Amendments to IAS 32 Classification of Rights Issues The amendments address the classification of certain rights issues denominated in a foreign currency as either equity instruments or as financial liabilities. Under the amendments, rights, options or warrants issued by an entity for the holders to acquire a fixed number of the entity's equity instruments for a fixed amount of any currency are classified as equity instruments in the financial statements of the entity provided that the offer is made pro rata to all of its existing owners of the same class of its non-derivative equity instruments. Before the amendments to IAS 32, rights, options or warrants to acquire a fixed number of an entity's equity instruments for a fixed amount in foreign currency were classified as derivatives. The amendments require retrospective application. The application of the amendments has had no effect on the amounts reported in the current and prior years because the Company has not issued instruments of this nature. Amendments to IFRIC 14 Prepayments of a Minimum Funding Requirement IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments IFRIC 14 addresses when refunds or reductions in future contributions should be regarded as available in accordance with paragraph 58 of IAS 19; how minimum funding requirements might affect the availability of reductions in future contributions; and when minimum funding requirements might give rise to a liability. The amendments now allow recognition of an asset in the form of prepaid minimum funding contributions. The application of the amendments has not had material effect on the Company s financial statements. The Interpretation provides guidance on the accounting for the extinguishment of a financial liability by the issue of equity instruments. Specifically, under IFRIC 19, equity instruments issued under such arrangement will be measured at their fair value, and any difference between the carrying amount of the financial liability extinguished and the consideration paid will be recognized in profit or loss. The application of IFRIC 19 has had no effect on the amounts reported in the current and prior years because the Company has not entered into any transactions of this nature. Improvements to IFRSs issued in 2010 Except for the amendments to IFRS 3 and IAS 1 described earlier in section (a), and (b), the application of Improvements to IFRSs issued in 2010 has not had any material effect on amounts reported in the financial statements. 80 SAF GYO 2011 Annual Report FıNANCIAL TABLES AND NOTES 11

NOTES TO THE AUDITED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2011 (Amounts are expressed in Turkish Lira (TL) unless otherwise stated) 2. Summary of Significant Accounting Policies (cont d) 2.4 New and Revised International Financial Reporting Standards(cont d) (d) New and Revised IFRSs in issue but not yet effective (cont d) The Company has not applied the following new and revised IFRSs that have been issued but are not yet effective: Amendments to IFRS 7 IFRS 9 IFRS 10 IFRS 11 IFRS 12 IFRS 13 Amendments to IAS 1 Amendments to IAS 12 IAS 19 (as revised in 2011) IAS 27 (as revised in 2011) IAS 28 (as revised in 2011) IFRIC 20 Amendments to IAS 32 Disclosures Transfers of Financial Assets; Offsetting of Financial Assets and Financial Liabilities Financial Instruments Consolidated Financial Statements Joint Arrangements Disclosure of Interests in Other Entities Fair Value Measurement Presentation of Items of Other Comprehensive Income Deferred Taxes Recovery of Underlying Assets Employee Benefits Separate Financial Statement Investments in Associates and Joint Ventures Stripping Costs in the Production Phase of a Surface Mine Financial Instruments: Presentation - Offsetting of Financial Assets and Financial Liabilities The amendments to IFRS 7 increase the disclosure requirements for transactions involving transfers of financial assets. These amendments are intended to provide greater transparency around risk exposures when a financial asset is transferred but the transferor retains some level of continuing exposure in the asset. The amendments also require disclosures where transfers of financial assets are not evenly distributed throughout the period. The Company management does not anticipate that these amendments to IFRS 7 will have a significant effect on the Company s disclosures. However, if the Company enters into other types of transfers of financial assets in the future, disclosures regarding those transfers may be affected. The amendments to IFRS 7 require an entity to disclose information about rights of offset and related agreements for financial instruments under an enforceable master netting agreement or similar arrangement. The new disclosures are required for annual or interim periods beginning on or after 1 January 2013. IFRS 9 issued in November 2009 introduces new requirements for the classification and measurement of financial assets. IFRS 9 amended in October 2010 includes the requirements for the classification and measurement of financial liabilities and for derecognition. 12 81

NOTES TO THE AUDITED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2011 (Amounts are expressed in Turkish Lira (TL) unless otherwise stated) 2. Summary of Significant Accounting Policies (cont d) 2.4 New and Revised International Financial Reporting Standards(cont d) (d) New and Revised IFRSs in issue but not yet effective (cont d) Key requirements of IFRS 9 are described as follows: IFRS 9 requires all recognized financial assets that are within the scope of IAS 39 Financial Instruments: Recognition and Measurement to be subsequently measured at amortized cost or fair value. Specifically, debt investments that are held within a business model whose objective is to collect the contractual cash flows, and that have contractual cash flows that are solely payments of principal and interest on the principal outstanding are generally measured at amortized cost at the end of subsequent accounting periods. All other debt investments and equity investments are measured at their fair values at the end of subsequent accounting periods. The most significant effect of IFRS 9 regarding the classification and measurement of financial liabilities relates to the accounting for changes in the fair value of a financial liability (designated as at fair value through profit or loss) attributable to changes in the credit risk of that liability. Specifically, under IFRS 9, for financial liabilities that are designated as at fair value through profit or loss, the amount of change in the fair value of the financial liability that is attributable to changes in the credit risk of that liability is presented in other comprehensive income, unless the recognition of the effects of changes in the liability's credit risk in other comprehensive income would create or enlarge an accounting mismatch in profit or loss. Changes in fair value attributable to a financial liability's credit risk are not subsequently reclassified to profit or loss. Previously, under IAS 39, the entire amount of the change in the fair value of the financial liability designated as at fair value through profit or loss was presented in profit or loss. IFRS 9 was amended to defer the mandatory effective date of both the 2009 and 2010 versions of IFRS 9 to annual periods beginning on or after 1 January 2015. Prior to the amendments, application of IFRS 9 was mandatory for annual periods beginning on or after 1 January 2013. The amendments continue to permit early application. The amendments modify the existing comparative transition disclosures in IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors and IFRS 7 Financial Instruments: Disclosures. Instead of requiring restatement of comparative financial statements, entities are either permitted or required to provide modified disclosures on transition from IAS 39 Financial Instruments: Recognition and Measurement to IFRS 9 depending on the entity s date of adoption and whether the entity chooses to restate prior periods. The Company management anticipates that IFRS 9 will be adopted in the Company's financial statements for the annual period beginning 1 January 2015 and that the application of IFRS 9 may have significant impact on amounts reported in respect of the Company's financial assets and financial liabilities. However, it is not practicable to provide a reasonable estimate of that effect until a detailed review has been completed. 82 SAF GYO 2011 Annual Report FıNANCIAL TABLES AND NOTES 13

NOTES TO THE AUDITED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2011 (Amounts are expressed in Turkish Lira (TL) unless otherwise stated) 2. Summary of Significant Accounting Policies (cont d) 2.4 New and Revised International Financial Reporting Standards(cont d) (d) New and Revised IFRSs in issue but not yet effective (cont d) In May 2011, a package of five Standards on consolidation, joint arrangements, associates and disclosures was issued, including IFRS 10, IFRS 11, IFRS 12, IAS 27 (as revised in 2011) and IAS 28 (as revised in 2011). Key requirements of these five Standards are described below. IFRS 10 replaces the parts of IAS 27 Consolidated and Separate Financial Statements that deal with consolidated financial statements. SIC-12 Consolidation Special Purpose Entities has been withdrawn upon the issuance of IFRS 10. Under IFRS 10, there is only one basis for consolidation, which is control. In addition, IFRS 10 includes a new definition of control that contains three elements: (a) power over an investee, (b) exposure, or rights, to variable returns from its involvement with the investee, and (c) the ability to use its power over the investee to affect the amount of the investor's returns. Extensive guidance has been added in IFRS 10 to deal with complex scenarios. IFRS 11 replaces IAS 31 Interests in Joint Ventures. IFRS 11 deals with how a joint arrangement of which two or more parties have joint control should be classified. SIC-13 Jointly Controlled Entities Non-monetary Contributions by Venturers has been withdrawn upon the issuance of IFRS 11. Under IFRS 11, joint arrangements are classified as joint operations or joint ventures, depending on the rights and obligations of the parties to the arrangements. In contrast, under IAS 31, there are three types of joint arrangements: jointly controlled entities, jointly controlled assets and jointly controlled operations. In addition, joint ventures under IFRS 11 are required to be accounted for using the equity method of accounting, whereas jointly controlled entities under IAS 31 can be accounted for using the equity method of accounting or proportionate accounting. IFRS 12 is a disclosure standard and is applicable to entities that have interests in subsidiaries, joint arrangements, associates and/or unconsolidated structured entities. In general, the disclosure requirements in IFRS 12 are more extensive than those in the current standards. These five standards are effective for annual periods beginning on or after 1 January 2013. Earlier application is permitted provided that all of these five standards are applied early at the same time. Since The Company has no subsidiaries and affiliates as of balance sheet date, the amendments will not affect the Company s financial statements. 14 83

NOTES TO THE AUDITED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2011 (Amounts are expressed in Turkish Lira (TL) unless otherwise stated) 2. Summary of Significant Accounting Policies (cont d) 2.4 New and Revised International Financial Reporting Standards(cont d) (d) New and Revised IFRSs in issue but not yet effective (cont d) The amendments to IAS 1 retain the option to present profit or loss and other comprehensive income in either a single statement or in two separate but consecutive statements. However, the amendments to IAS 1 require additional disclosures to be made in the other comprehensive income section such that items of other comprehensive income are grouped into two categories: (a) items that will not be reclassified subsequently to profit or loss; and (b) items that will be reclassified subsequently to profit or loss when specific conditions are met. Income tax on items of other comprehensive income is required to be allocated on the same basis. The amendments to IAS 1 are effective for annual periods beginning on or after 1 July 2012. The presentation of items of other comprehensive income will be modified accordingly when the amendments are applied in the future accounting periods. The amendments to IAS 12 are effective for annual periods beginning on or after 1 January 2012. The Company is not subject to corporation tax. The amendments to IAS 19 change the accounting for defined benefit plans and termination benefits. The most significant change relates to the accounting for changes in defined benefit obligations and plan assets. The amendments require the recognition of changes in defined benefit obligations and in fair value of plan assets when they occur, and hence eliminate the 'corridor approach' permitted under the previous version of IAS 19 and accelerate the recognition of past service costs. The amendments require all actuarial gains and losses to be recognized immediately through other comprehensive income in order for the net pension asset or liability recognized in the consolidated statement of financial position to reflect the full value of the plan deficit or surplus. The amendments to IAS 19 are effective for annual periods beginning on or after 1 January 2013 and require retrospective application with certain exceptions. The directors anticipate that the amendments to IAS 19 will be adopted in the Company s consolidated financial statements for the annual period beginning 1 January 2013 and that the application of the amendments to IAS 19 may have impact on amounts reported in respect of the Groups defined benefit plans. However, the directors have not yet performed a detailed analysis of the impact of the application of the amendments and hence have not yet quantified the extent of the impact. The amendments to IAS 32 are intended to clarify existing application issues relating to the offsetting rules and reduce the level of diversity in current practice. The amendments are effective for annual periods beginning on or after 1 January 2014. 84 SAF GYO 2011 Annual Report FıNANCIAL TABLES AND NOTES

NOTES TO THE AUDITED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2011 (Amounts are expressed in Turkish Lira (TL) unless otherwise stated) 2. BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (cont d) 2.5 Summary of Significant Accounting Policies Revenue Revenue and expenses are accounted for accrual basis and measured at the fair value of the consideration received or receivable. Revenue is reduced for estimated customer returns, rebates, and other similar allowances. Revenue is recognized on accrual bases revenue is recognized if it is probable that the economic benefit associated with these transactions will flow to the entity or the amount of revenue can be measured reliably. Revenue is presented on net basis after deducting value added tax and sales tax. The revenue is recognized when the sale of the property and the property is delivered. Revenue generated from Buyers Revenue generated from the residency construction projects are accounted for when the Company fulfills its requirements defined in the contracts and all the legal rights and those risks that may legally exist from the ownership of the completed goods are transferred to the buyer. Rental income Rental income from investment properties is recognized on an accrual basis over the term of the relevant lease. Revenue is recognized if it is probable that the economic benefits associated with the transaction will flow to the entity; and the amount of revenue can be measured reliably. Interest income Interest income from a financial asset is recognized when it is probable that the economic benefits will flow to the Group and the amount of income can be measured reliably. Inventories These work in progress inventories are stated at their lower of cost and net realizable value. Lands to be developed for projects consist of lands which their constructions have not started yet and are stated at their lower of cost and net realizable value. Finished goods are completed and ready to sell housing projects and are stated at their lower of cost and net realizable value.net realizable value represents the estimated selling price less all estimated costs of completion and costs necessary to make a sale. When the net realizable value of inventory is less than cost, the inventory is written down to the net realizable value and the expense is included in statement of income/(loss) in the period the write-down or loss occurred. When the circumstances that previously caused inventories to be written down below cost no longer exist or when there is clear evidence of an increase in net realizable value because of changed economic circumstances, the amount of the write-down is reversed. The reversal amount is limited to the amount of the original write-down. Property, Plant and Equipment Property plant and equipment are carried at cost less accumulated depreciation and any accumulated impairment losses. 85 16

NOTES TO THE AUDITED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2011 (Amounts are expressed in Turkish Lira (TL) unless otherwise stated) 2. BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (cont d) 2.5 Summary of Significant Accounting Policies (cont d) Property, Plant and Equipment (cont d) Properties in the course of construction for production, rental or administrative purposes, or for purposes not yet determined are carried at cost, less any recognized impairment loss. Cost includes professional fees and, for qualifying assets, borrowing costs capitalized in accordance with the Company s accounting policy. Depreciation of these assets, on the same basis as other property assets, commences when the assets are ready for their intended use. Depreciation is charged so as to write off the cost or valuation of assets over their estimated useful lives, using the straight-line method. The estimated useful lives, residual values and depreciation method are reviewed at each year end, with the effect of any changes in estimate accounted for on a prospective basis. Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets or, where shorter, the term of the relevant lease. The gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset, and is recognized in the statement of income. Financial Lease Operations Lease - Company as a Lessor Leases classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases treated as operational leases. Amounts due from lessees under finance leases are recognized as receivables at the amount of the Group s net investment in the leases. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the Group s net investment outstanding in respect of the leases. Rental income from operating leases (initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognized on a straight-line basis over the lease term), is recognized on a straight-line basis over the term of the relevant lease. Lease - Company as a Lessee Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases. Assets held under finance leases are recognized as assets of the Company at their fair value at the inception of the lease or, if lower, at the present value of the minimum lease payments. The corresponding liability to the lessor is included in the balance sheet as a finance lease obligation. Lease payments are apportioned between finance charges and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are capitalized in accordance with the Company s general policy on borrowing costs and recognized in the income statement, unless they are directly attributable to qualifying assets. 86 SAF GYO 2011 Annual Report 17 FıNANCIAL TABLES AND NOTES

NOTES TO THE AUDITED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2011 (Amounts are expressed in Turkish Lira (TL) unless otherwise stated) 2. BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (cont d) 2.5 Summary of Significant Accounting Policies (cont d) Financial Lease Operations (cont d) Lease - Company as a Lessee (cont d) Lease payments are apportioned between finance expenses and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance expenses are recognized immediately in profit or loss, unless they are directly attributable to qualifying assets, in which case they are capitalized in accordance with the Group s general policy on borrowing costs (see 3.13 below). Contingent rentals are recognized as expenses in the periods in which they are incurred. Intangible assets acquired separately Intangible assets acquired separately are reported at cost less accumulated amortization and accumulated impairment losses. Amortization is charged on a straight-line basis over their estimated useful lives. The estimated useful life and amortization method are reviewed at the end of each annual reporting period, with the effect of any changes in estimate being accounted for on a prospective basis. Trademarks and licenses None. Computer software Acquired computer software licenses are capitalized on the basis of the costs incurred to acquire and bring to use the specific software. These costs are amortized over their estimated useful lives (5-10 years). Impairment of Assets Assets that are subject to amortization and depreciation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized for the amount by which the asset s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). Non-financial assets other than goodwill that suffered impairment are reviewed for possible reversal of the impairment at each reporting date. 18 87

NOTES TO THE AUDITED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2011 (Amounts are expressed in Turkish Lira (TL) unless otherwise stated) 2. BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (cont d) 2.5 Summary of Significant Accounting Policies (cont d) Borrowing Costs Borrowing costs directly attributable to the acquisition, construction or production of assets which are assets that necessarily take a substantial period to get ready for their intended use or sale (qualifying assets), are added to the cost of those assets, until the assets are substantially ready for their intended use or sale. Residence projects under construction and shopping mall under construction are assessed as qualifying assets. Investment income earned on temporary investment of specific borrowings with their pending expenditure on qualifying assets, deducted from the borrowing costs eligible for capitalization. Financial Instruments Financial assets Investments excluding FVTPL are recognized and derecognized on a trade date, where the purchase or sale of an investment under a contract whose terms require delivery of the investment within the period established by the market concerned, and initially measured at fair value. Net of transaction costs except for those financial assets classified as at fair value through profit or loss are initially measured at fair value. Financial assets classified into the following specified categories: financial assets as at fair value through profit or loss (FVTPL), held-to-maturity investments, available-for-sale (AFS) financial assets and loans and receivables. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition. Effective interest method The effective interest method is a method of calculating the amortized cost of a financial asset and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset, or, where appropriate, a shorter period. Income is recognized on an effective interest basis for debt instruments other than those financial assets designated as at fair value through profit or loss. 88 SAF GYO 2011 Annual Report FıNANCIAL TABLES AND NOTES 19

NOTES TO THE AUDITED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2011 (Amounts are expressed in Turkish Lira (TL) unless otherwise stated) 2. BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (cont d) 2.5 Summary of Significant Accounting Policies (cont d) Financial Instruments (cont d) Financial Assets (cont d) Financial assets at FVTPL Financial assets at fair value through profit or loss are financial assets held for trading. A financial asset is classified in this category if acquired principally for the purpose of selling in the short-term. Derivatives also are categorized as held for trading unless they are designated as hedges. Assets in this category are classified as current assets. Held-to-maturity investments None. Available-for-sale financial assets None. Loans and receivables Trade receivables, other receivables and loans that have fixed or determinable payments that are not quoted in an active market are classified as loans and receivables. Loans and receivables are measured at amortized cost using the effective interest method less any impairment. Impairment of financial assets Financial assets, other than those at fair value through profit or loss are assessed for indicators of impairment at each balance sheet date. Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been impacted. For financial assets carried at amortized cost, the amount of the impairment is the difference between the asset s carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables where the carrying amount is reduced through the use of an allowance account. When a trade receivable is uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognized in profit or loss. 89 20

NOTES TO THE AUDITED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2011 (Amounts are expressed in Turkish Lira (TL) unless otherwise stated) 2. BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (cont d) 2.5 Summary of Significant Accounting Policies (cont d) Financial Instruments (cont d) Financial Assets (cont d) Impairment of financial assets (cont d) With the exception of available for sale equity instruments, if, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognized, the previously recognized impairment loss is reversed through profit or loss to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortized cost would have been had the impairment not been recognized. In respect of available for sale equity securities, any increase in fair value subsequent to an impairment loss is recognized directly in equity. Cash and cash equivalents Cash and cash equivalents comprise cash on hand and demand deposits and other short-term highly liquid investments which their maturities are three months or less from date of acquisition and that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. Financial liabilities Financial liabilities and equity instruments issued by the Company are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument. An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. The accounting policies adopted for specific financial liabilities and equity instruments are set out below. Financial liabilities are classified as either financial liabilities at fair value through profit or loss or other financial liabilities. Financial Liabilities at FVTPL Financial liabilities at fair value through profit or loss are stated at fair value, with any resultant gain or loss recognized in profit or loss. Every reporting period, FVTPL is revalued. Change in the fair value is recognized in the income statement. The net gain or loss recognized in profit or loss incorporates any interest paid on the financial liability. Other financial liabilities Other financial liabilities including borrowings, are initially measured at fair value, net of transaction costs. Other financial liabilities are subsequently measured at amortized cost using the effective interest method, with interest expense recognized on an effective yield basis. 90 SAF GYO 2011 Annual Report FıNANCIAL TABLES AND NOTES 21

NOTES TO THE AUDITED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2011 (Amounts are expressed in Turkish Lira (TL) unless otherwise stated) 2. BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (cont d) 2.5 Summary of Significant Accounting Policies (cont d) Financial Instruments (cont d) Financial liabilities (cont d) Other financial liabilities(cont d) The effective interest method is a method of calculating the amortized cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability, or, where appropriate, a shorter period to the net carrying amount on initial recognition. Derivative financial instruments and hedge accounting None. Business combinations: The acquisition of subsidiaries and businesses are accounted for using the acquisition method. The consideration transferred in a business combination is measured at fair value, which is calculated as the sum of the acquisition-date fair values of the assets transferred by the Group, liabilities incurred by the Company to the former owners of the acquiree and the equity interests issued by the Company in exchange for control of the acquiree. Acquisition-related costs are generally recognized in profit or loss as incurred. At the acquisition date, the identifiable assets acquired and the liabilities assumed are recognized at their fair value at the acquisition date, except that: Deferred tax assets or liabilities and liabilities or assets related to employee benefit arrangements are recognized and measured in accordance with IAS 12 Income Taxes and IAS 19 Employee Benefits respectively; Liabilities or equity instruments related to share-based payment arrangements of the acquiree or share-based payment arrangements of the Company entered into to replace share-based payment arrangements of the acquiree are measured in accordance with IFRS 2 Share-based Payment at the acquisition date; and Assets (or disposal groups) that are classified as held for sale in accordance with IFRS 5 Noncurrent Assets Held for Sale and Discontinued Operations are measured in accordance with that Standard. Non-controlling interests that are present ownership interests and entitle their holders to a proportionate share of the entity's net assets in the event of liquidation may be initially measured either at fair value or at the non-controlling interests' proportionate share of the recognized amounts of the acquiree's identifiable net assets. The choice of measurement basis is made on a transaction-bytransaction basis. Other types of non-controlling interests are measured at fair value or, when applicable, on the basis specified in another IFRS. 91 22

NOTES TO THE AUDITED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2011 (Amounts are expressed in Turkish Lira (TL) unless otherwise stated) 2. BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (cont d) 2.5 Summary of Significant Accounting Policies (cont d) Business combinations(cont d): When the consideration transferred by the Company in a business combination includes assets or liabilities resulting from a contingent consideration arrangement, the contingent consideration is measured at its acquisition-date fair value and included as part of the consideration transferred in a business combination. Changes in the fair value of the contingent consideration that qualify as measurement period adjustments are adjusted retrospectively, with corresponding adjustments against goodwill. Measurement period adjustments are adjustments that arise from additional information obtained during the measurement period (which cannot exceed one year from the acquisition date) about facts and circumstances that existed at the acquisition date. A reverse acquisition occurs when the entity that issues securities (the legal acquirer) is identified as the acquiree for accounting purposes. The entity whose equity interests are acquired (the legal acquiree) must be the acquirer for accounting purposes for the transaction to be considered a reverse acquisition. The following factors should be considered in identifying the acquirer in a business combination effected through an exchange of equity interests: (a) Proportional voting rights in the business combination subsequent to combination An acquirer is the combining entity which has the majority voting rights among combined entities. In identifying the acquirer which has the majority voting rights, an entity should consider whether there are any special or irregular voting agreements and options, guarantees or convertible securities. (b) Significant non-controlling interest voting rights in a business combination having no majority voting rights of combined entities An acquirer is generally the combining entity which has the sole significant non-controlling interest voting rights among combined entities. (c) Organizational structure of business combination an acquirer generally has the right to select, appoint or discharge the majority of management. (d) Senior executives structure of business combination An acquirer has generally control over the previous combined management among combined entities. (e) Exchange terms of equity interests An acquirer is generally an entity that pays premiums at fair value prior to the combination of other entity s or entities equity interests among combined entities. Goodwill None. Foreign Currency Transactions The financial statements of the Company are presented in the currency of the primary economic environment in which the entity operates (its functional currency). For the purpose of the financial statements, the results and financial position of each entity are expressed in TL, which is the functional currency of the Company, and the presentation currency for the financial 92 SAF GYO 2011 Annual Report FıNANCIAL TABLES AND NOTES 23

NOTES TO THE AUDITED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2011 (Amounts are expressed in Turkish Lira (TL) unless otherwise stated) 2. BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (cont d) 2.5 Summary of Significant Accounting Policies (cont d) Foreign Currency Transactions(cont d) In preparing the financial statements of the Group, transactions in currencies other than TL (foreign currencies) are recorded at the rates of exchange prevailing on the dates of the transactions. At each balance sheet date, monetary items denominated in foreign currencies are retranslated at the rates prevailing on the balance sheet date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated. Earnings Per Share Earnings per share disclosed in the statement of income are determined by dividing net income by the weighted average number of shares in existence during the year concerned. In Turkey, companies can raise their share capital by distributing bonus shares to shareholders from retained earnings. In computing earnings per share, such bonus share distributions are assessed as issued shares. Accordingly, the retrospective effect for those share distributions is taken into consideration in determining the weighted-average number of shares outstanding used in this computation. Subsequent Events Subsequent events are composed of any event between the balance sheet date and the publication date of the balance sheet, even if they arise after any announcements of profits or other financial data. The Company; restates its financial statements if such subsequent events arise. Provisions, Contingent Assets and Liabilities Provisions are recognized when the Company has a present obligation as a result of a past event, and it is probable that the Company will be required to settle that obligation, and a reliable estimate can be made of the amount of the obligation. The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the balance sheet date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows. When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognized as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.. 93

NOTES TO THE AUDITED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2011 (Amounts are expressed in Turkish Lira (TL) unless otherwise stated) 2. BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (cont d) 2.5 Summary of Significant Accounting Policies (cont d) Segment Reporting No business segment or geographical segments were defined as reportable segment, since the Company only operates in developing and selling residential real estate developments. Investment property Investment property, which is property, held to earn rentals and/or for capital appreciation is carried at cost less accumulated depreciation and any accumulated impairment losses. The carrying amount includes the cost of replacing part of an existing investment property at the time that cost is incurred if the recognition criteria are met; and excludes the costs of day to day servicing of an investment property. Depreciation is provided on investment property on a straight line basis. Depreciation period for investment property is 50 years. Investment properties are derecognized when either they have been disposed of or when the investment property is permanently withdrawn from use and no future economic benefit is expected from its disposal. Any gains or losses on the retirement or disposal of an investment property are recognized in profit or loss in the year of retirement or disposal. Transfers are made to or from investment property only when there is a change in use. For a transfer from investment property to owner occupied property, the deemed cost for subsequent accounting is the fair value at the date of change in use. If owner occupied property becomes an investment property, the Company accounts for such property in accordance with the policy stated under property, plant and equipment up to the date of change in use. No assets held under operating lease have been classified as investment properties. Taxation The Company is exempt from Corporate Tax in accordance with Article 8(4)(d) of the Corporate Tax Law. However, income of real estate investment funds are subject to withholding tax in accordance with Article 94(6)(a) of the Income Tax Law and upon the Council of minister s resolution no: 93/5148 withholding tax rate is applied as nil. Therefore, the Company has no tax liability arising from profits attributable to the 3 November 2011 31 December 2011 period (Note 23). Employee Benefits Retirement Pay Provision Under Turkish law and union agreements, lump sum payments are made to employees retiring or involuntarily leaving the Group. Such payments are considered as being part of a defined retirement benefit plan as per International Accounting Standard No. 19 (revised) Employee Benefits ( IAS 19 ). 94 SAF GYO 2011 Annual Report FıNANCIAL TABLES AND NOTES 25

NOTES TO THE AUDITED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2011 (Amounts are expressed in Turkish Lira (TL) unless otherwise stated) 2. BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (cont d) 2.5 Summary of Significant Accounting Policies (cont d) Employee Benefits (cont d). The retirement benefit obligation recognized in the balance sheet represents the present value of the defined benefit obligation as adjusted for unrecognized actuarial gains and losses through statement of income. Statement of Cash Flows Current period cash flows are categorized and reported based on main, investing and financing activities. Cash flows provided from main activities of the Company shows, the cash flows provided from Company s house development, sales, and improvement of house projects. Cash flows regarding Investment activities summarize Company s used and generated cash from investment activities (fixed and financial investments). Cash flows regarding Financing activities summarize loans the Company had used and liabilities occurred because of those financing needs. Cash and cash equivalents comprise cash on hand and demand deposits and other short-term highly liquid investments which their maturities are three months or less from date of acquisition and that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. Capital and Dividends Common stocks are classified as equity. Dividends paid over common stocks are recorded by subtracting from current period-retained earnings balance 2.6 Critical Accounting Judgments and Key Sources of Estimation Uncertainty Preparation of the financial statements in accordance with CMB Financial Reporting Standards necessitates the usage of estimations and assumptions that can affect amounts of reported assets and liabilities as of balance sheet date, the explanation for the contingent assets and liabilities and income and expenses reported during the accounting period. Although these estimations and assumptions are based on the best judgment of the Company management related with the current conditions and transactions, actual results may differ from these estimations. Cost method and peer comparison methods are used in valuation of Akasya Acıbadem Göl included in investment properties of the Company, peer comparison method for Koru, income capitalization method for Akasya Kent, peer comparison method for Mecidiyeköy Office Center, Altunizade BTM building, cost method for Antalya BTM Building and Fecir Office Center and Komili Paper Factory. The valuation of the investment properties are performed by CMB licensed real-estate valuation companies (Note17). 26 95

NOTES TO THE AUDITED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2011 (Amounts are expressed in Turkish Lira (TL) unless otherwise stated) 3. BUSINESS COMBINATIONS (cont d) Under Article 451 of the TCC, Articles 18, 19 and 20 of the Corporate Income Tax and the CMB s Communiqué Serial: I, No: 31 Basis of Business Combinations, assets and liabilities of Saf Gayrimenkul Geliştirme İnşaat ve Ticaret A.Ş. were concluded to be transferred to Sağlam Gayrimenkul Yatırım Ortaklığı A.Ş. on 1 June 2011 in accordance with the Board of Saf Gayrimenkul Geliştirme İnşaat ve Ticaret A.Ş. s decision no: 74 and the Board of Sağlam Gayrimenkul Yatırım Ortaklığı A.Ş. s decision no: 115. The CMB has approved the business combination application upon its resolution no: 31/887 issued in the meeting held on 23 September 2011. Subsequently, in the Extraordinary General Assembly meeting held on 31 October 2011, parties to the business combination have decided to combine the net asset value of Sağlam Gayrimenkul Yatırım Ortaklığı A.Ş. amounting to TL 75.183.397 and discounted cash flow of Saf Gayrimenkul Geliştirme amounting to TL 1.115.133.125 and accordingly, the Company s capital has increased to TL 886.601.669 and its registered capital ceiling is increased to TL 2.000.000.000. In the business combination period, Sağlam Gayrimenkul Yatırım Ortaklığı A.Ş. s title has been changed to Saf Gayrimenkul Yatırım Ortaklığı A.Ş. upon the amendment made to Article 2 in the AOA (Note 3). The related matters were registered as at 2 November 2011 and announced in the Trade Registry Gazette no: 7938 on 11 November 2011. The acquisition of subsidiaries and businesses are accounted for using the acquisition method. The consideration transferred in a business combination is measured at fair value, which is calculated as the sum of the acquisition-date fair values of the assets transferred by the Group, liabilities incurred by the Company to the former owners of the acquiree and the equity interests issued by the Company in exchange for control of the acquiree. Acquisition-related costs are generally recognized in profit or loss as incurred. Under the following disclosures of TFRS 3 Business Combinations, Sağlam Gayrimenkul Yatırım Ortaklığı A.Ş. ( legal acquirer ) is the acquiree for accounting purposes and Saf Gayrimenkul Geliştirme İnşaat ve Ticaret A.Ş. ( legal acquiree ) is the acquirer for accounting purposes. Prior financial statements of Saf Gayrimenkul Geliştirme İnşaat ve Ticaret A.Ş. are presented comparatively. - Proportional voting rights in the business combination subsequent to combination An acquirer is the combining entity which has the majority voting rights among combined entities. - Organizational structure of business combination an acquirer generally has the right to select, appoint or discharge the majority of management. - An acquirer is the entity that significantly differs in size (i.e. in terms of assets, revenue, or profit) relatively to other combined entity/entities. As of 2 November 2011, fair value of assets transferred and liabilities assumed from Sağlam Gayrimenkul Yatırım Ortaklığı A.Ş. is detailed as follows: Fair value (TL) Cash and cash equivalents 30.372.571 Trade receivables 1.299.332 Other current assets 283.509 Financial investments 4.101.225 Investment properties 77.138.500 Property, plant and equipment 8.965 Intangible assets 575 Total Assets 113.204.677 96 SAF GYO 2011 Annual Report FıNANCIAL TABLES AND NOTES 27

NOTES TO THE AUDITED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2011 (Amounts are expressed in Turkish Lira (TL) unless otherwise stated) 3. BUSINESS COMBINATIONS (cont d) Fair value (TL) Financial borrowings 20.430.947 Financial liabilities to related parties 11.112.859 Trade payables 143.395 Other liabilities 521.108 Provision for employee benefits 240 Equity 80.996.128 Total equity and liabilities 113.204.677 The Company has held a meeting related to the merge of Saf Gayrimenkul Geliştirme İnşaat ve Ticaret A.Ş. as 31 October 2011 and the merge process was approved on 2 December 2011. The changes in the Articles of Association of the Company was published at Turkish Trade Registry Gazette (No:7938), and was registered at the trade registry on 11 November 2011 and the title of the Company was changed to Saf Gayrimenkul Geliştirme İnşaat ve Ticaret A.Ş. 4. JOINT VENTURES None. 5. SEGMENT REPORTING None. 6. CASH AND CASH EQUIVALENTS 31 December 31 December 2011 2010 Cash on hand 19.312 119.747 Cash at banks 87.884.620 316.616.658 - Demand deposits 79.380 977.717 - Time deposit with maturity less than 3 months 87.805.240 315.638.941 - Reverse repo (*) 125.438.410-213.342.342 316.736.405 (*) Maturity of reverse repo is 3 days and average interest rate is %11 (31 December 2010: None). As of 31 December 2011,interest rate for USD time deposits is 2,85% and the maturity dates are between 2 January 2012 and 13 February 2012 (31 December 2010: between 2,85%-4,10%). As of 31 December 2011,interest rate for TL time deposits is between 10,2%-10,5% and the maturity date is 30 January 2012 (31 December 2010: 8,8% with maturities between 5 January 2011 31 January 2011). 28 97

NOTES TO THE AUDITED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2011 (Amounts are expressed in Turkish Lira (TL) unless otherwise stated) 6. CASH AND CASH EQUIVALENTS (cont d) In cash flow statement time deposits and reverse repo are presented by netting off interest accruals amounting to 405.613 TL from cash and cash equivalents. 7. FINANCIAL INVESTMENTS Long term financial investments of the Company is as follows: Held for Trading Investments 31 December 31 December 2011 2010 Ottoman Gayrimenkul Yatırımları İnş. ve Tic. A.Ş. (*) 14.400.000-14.400.000 - (*) Saf Gayrimenkul Yatırım Ortaklığı A.Ş. s interest in the related entity is about 10% and quoted shares with no market value are carried at cost as their fair value cannot be reliably measured. Under the BOD meeting of Ottoman Gayrimenkul Yatırımları İnşaat ve Ticaret A.Ş. held on 5 January 2011, cash capital advance amounting to TL 5.000.000 is decided to be provided in proportion to shareholders interest for future capital increase. As of the balance sheet date, the Company made the related payment, which amounts to TL 500.000 in proportion to its interest, for the capital increase. Ottoman Gayrimenkul Yatırımları İnşaat ve Ticaret A.Ş. discussed the capital increase in its Extraordinary General Assembly meeting on 9 December 2011 and decided to increase its capital from TL 36 Million to TL 144 Million. The related capital increase was registered as at 19 December 2011 and announced in the Trade Registry Gazette no: 7968 on 23 December 2011. 8. FINANCIAL BORROWINGS Financial Borrowings 31 December 31 December 2011 2010 a) Bank loans 223.973.180 204.794.465 b) Financial lease payables 10.491.291-234.464.471 204.794.465 a) Bank Loans: The details of the bank loans are as follows: Weighted Average Effective 31 December 2011 Currency Type Interest Rate Current Non-current USD (TL amount) 3,28% - 7,37% 223.973.180-223.973.180-98 SAF GYO 2011 Annual Report FıNANCIAL TABLES AND NOTES 29

NOTES TO THE AUDITED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2011 (Amounts are expressed in Turkish Lira (TL) unless otherwise stated) 8. FINANCIAL BORROWİNGS (cont d) a) Bank Loans (cont d): Weighted Average Effective 31 December 2010 Currency Type Interest Rate Current Non-current USD (TL amount) 3,28% - 7,37% 55.318.969 149.475.496 55.318.969 149.475.496 Maturity analysis of the bank loans is as follows. 31 December 31 December 2011 2010 To be paid in 1 year 223.973.180 55.318.969 To be paid in 1-2 years - 149.475.496 223.973.180 204.794.465 Bank loans are as follow: On 8 February 2010 and 10 February 2010, the Company borrowed loans from Türkiye Vakıflar Bankası T.A.O. amounting to USD 80.000.000 with 3.28% fixed interest having a two year of maturity. USD 30.000.000 of the Company s loan amount borrowed on 22 October 2009 was given to the Company s shareholders under the same terms and conditions (USD 15.000.000 was given to Akiş Gayrimenkul Yatırım A.Ş. on 26 October 2009; USD 7.500.000 was given to Sinpaş Yapı Endüstrisi Ticaret ve Sanayi A.Ş. on 23 October 2009; and USD 7.500.000 was given to Yıldız Holding A.Ş. on 26 October 2009). As of 10 May 2011, Akiş Gayrimenkul Yatırım A.Ş. paid the related loan amounting to USD 15.000.000 with interest to the Company. USD 80.000.000 of the Company s loan amount borrowed on 8 February 2010 and 10 February 2010 was given to the Company s shareholders under the same terms and conditions (USD 28.800.000 was given to Akiş Gayrimenkul Yatırım A.Ş.; USD 20.000.000 was given to Sinpaş Yapı Endüstrisi Ticaret ve Sanayi A.Ş.; USD 20.000.000 was given to Yıldız Holding A.Ş.; and USD 11.200.000 was given to Doğu Batı Sanayi Ürünleri İhracat ve İthalat A.Ş.). The Company has received notes receivable in return for the collection of the related loan amounts, including the interest payments, under the similar terms and conditions. (Note 22). The details of the Company s murabahah loans borrowed from HSBC Bank Plc are as follows (Note 22): - USD 50.000.000 of loan at 7,37% fixed interest as at 10 July 2007 having 5 years of maturity with 2 years of grace period; - USD 10.000.000 of loan at 4,82% fixed interest as at 18 May 2009 having 3 years of maturity ; - USD 30.000.000 of loan at 3,37% fixed interest as at 22 October 2009 having 32 months of maturity; and -USD 10.000.000 of loan at 3,37% fixed interest as at 4 February 2010 having 29 months of maturity. 30 99

NOTES TO THE AUDITED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2011 (Amounts are expressed in Turkish Lira (TL) unless otherwise stated) 8. FINANCIAL BORROWİNGS (cont d) b) Financial Lease Payable: Payables due to finance leases are as follows: Minimum lease payments Present value of minimum lease payments Finansal kiralama borçları 31 December 31 December 31 December 31 December 2011 2010 2011 2010 Within one year 10.066.194-9.777.343 - In the second to fifth years 803.889-713.948 - Less : Future finance charges (378.792) - - - Present value of finance lease obligations 10.491.291-10.491.291 - Less: Amounts due to settlement within twelve months (shown under (9.777.343) current liabilities) Amounts due for settlement after 12 months 713.948 - Financial leases are on Altunizade and Bizim Toptan Satış Mağazaları A.Ş. (BTM) in Antalya and Fecir Business Center in Arnavutköy and Komili fabric building. Net carrying amount of the assets subject to finance leases is 73.387.538 TL ( 2010: None). Interest rates for leases are constant for the lease period. The effective interest rate in the Contract is 8% per annum (2010: None.) 9. OTHER FINANCIAL LIABILITIES None (2010: None). 100 SAF GYO 2011 Annual Report 31 FıNANCIAL TABLES AND NOTES

NOTES TO THE AUDITED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2011 (Amounts are expressed in Turkish Lira (TL) unless otherwise stated) 10. TRADE RECEIVABLES AND TRADE PAYABLES a)trade Receivables: Detail of trade receivables of the Company as of the balance sheet date are as follows: Short term trade receivables Restated 31 December 31 December 2011 2010 Trade receivables 2.099.765 69.990 Notes receivable 37.623.478 912.688 Receivables from related parties (Note: 37) 337.579-40.060.822 982.678 Non-current trade receivables Restated 31 December 31 December 2011 2010 Notes receivables 3.373.258 440.610 3.373.258 440.610 b) Trade Payables: Detail of trade payables as of balance sheet date is as follows: 31 December 31 December Short term trade payables 2011 2010 Trade payables 21.882.988 2.300.274 Trade payables to related parties (Note 37) 174.252 347.893 22.057.240 2.648.167 32 101

NOTES TO THE AUDITED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2011 (Amounts are expressed in Turkish Lira (TL) unless otherwise stated) 11. OTHER RECEIVABLES AND PAYABLES a) Other Receivables 31 December 31 December Other Current Receivables 2011 2010 Other receivables 2.367.260 1.115.000 Non-trade receivables from related parties (Note 37)(*) 175.929.834 20.487.760 Due from personnel 3.750 - Deposits and guarantees given 24 24 178.300.868 21.602.784 31 December 31 December Other Non-current Receivables 2011 2010 Deposits and guarantees given 3.777.895 1.407 Non-trade receivables from related parties (Note 37)(*) - 132.112.726 3.777.895 132.114.133 (*) Non-trade trade receivables from related parties consist of loan amounts given to the Company shareholders (Note 37). These receivables have similar interest rates and maturities with the Company s loans borrowed (Note 8). In its written announcement made on 28 September 2011, the CMB requires full settlement of receivables from related parties within 9 months subsequent to the business combination approval and the release of mortgages given as guarantees in accordance with Article 24(g) of the Communiqué Serial: IV, No: 11. b)other Liabilities 31 December 31 December Other Current Liabilities 2011 2010 Taxes and dues payable 2.086.917 276.808 Social security premiums payable 51.812 30.875 Due to personnel 12.872 102.614 Other payables 66.465 7.402 Due to relatied parties 79.950 20.248 2.298.016 437.947 102 SAF GYO 2011 Annual Report FıNANCIAL TABLES AND NOTES 33

NOTES TO THE AUDITED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2011 (Amounts are expressed in Turkish Lira (TL) unless otherwise stated) 11. OTHER RECEIVABLES AND PAYABLES (cont d) b) Other Liabilities (cont d) 31 December 31 December Other Non-current Liabilities 2011 2010 Deposits and guarantees received 2.325.949 1.677.585 2.325.949 1.677.585 12. RECEIVABLES AND PAYABLES FROM FINANCIAL SECTOR OPERATIONS None (31 December 2010: None). 13. INVENTORIES 31 December 31 December 2011 2010 Land 3.726.528 28.270.909 Work in process residential construciton projects 23.426.013 120.654.492 Finished residentials 1.999.653-29.152.194 148.925.401 The Company s Akasya Acıbadem Project, which is constructed on 121.000 m² with 206.100 m² of available for sale land, consists of 3 residential stages: Akasya Göl, Akasya Koru and Akasya Kent. The Project includes 1.349 residentials in total (Akasya Göl; 459, Akasya Koru; 432 and Akasya Kent: 458). Developing and ongoing construction projects as detailed above include costs associated with ongoing projects and TL 1.999.653 represents completed but not sold residentials as of the date of the report (31 December 2010: Nil). The Company plans to deliver the ongoing projects in September 2013. The Land account as detailed above includes the portion pertaining to the Akasya Kent Project. 34 103

NOTES TO THE AUDITED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2011 (Amounts are expressed in Turkish Lira (TL) unless otherwise stated) 14. BIOLOGICAL ASSETS None (31 December 2010: None). 15. ASSETS RELATED WITH CONSTRUCTION PROJECTS IN PROGRESS None (31 December 2010: None). 16. INVESTMENT ACCOUNTED FOR UNDER EQUITY METHOD None (31 December 2010: None). 17. INVESTMENT PROPERTIES Land Buildings Total Cost Opening balance as of 1 January 2010 - - - Shopping mall 16.751.020 50.063.181 66.814.201 Social facilities 3.931.282 413.852 4.345.134 Closing balance as of 31 December 2010 20.682.302 50.477.033 71.159.335 Additions shown as transfers are Akasya Mall and social facilities which were reclassed from inventories to investment property. As of 31 December 2010 investment properties are in construction progress and hence there is no depreciation charge for the period. In Akasya there is a construction of total area 324.000 m2 shopping center. As of March 2013,Akasya Shopping center take positive steps and 81.000 m2 areas that had been leasable are planned to be rented. Besides, a social facility building in 64 parcels is in construction progress with 4.000 square meter construction area on 4.600 square meter land. Amounts in buildings line consists of investment expenditures on investment properties in the construction process. 104 SAF GYO 2011 Annual Report FıNANCIAL TABLES AND NOTES 35

NOTES TO THE AUDITED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2011 (Amounts are expressed in Turkish Lira (TL) unless otherwise stated) 17. INVESTMENT PROPERTİES (cont d) Land (**) Buildings(**) Total Cost Opening balance as of 1 January 2011 20.682.302 50.477.033 71.159.335 Expenditures for shopping mall - 129.288.276 129.288.276 Expenditures for social facilities - 8.953.853 8.953.853 Additions to investment properties by business combination (*) - 77.138.500 77.138.500 Closing balance as of 31 December 2011 20.682.302 265.857.662 286.539.964 Accumulated Depreciation Opening balance as of 1 January 2011 - - - Charge of the year - (257.128) (257.128) Closing balance as of 31 December 2011 (257.128) (257.128) Carrying value as of 31 December 2011 20.682.302 265.600.534 286.282.836 (*) Assets obtained by business combinations are valued with fair value of the assets as of combination day of Sağlam Gayrimenkul Yatırım Ortaklığı A.Ş and investment property valuation table is presented below. (**) The amounts are related with the Akasya AVM project and social facility. There is no depreciation in the current year since the project continues. As of 31 December 2011, investment properties are transferred at fair value as a result of the acquisition of Sağlam Gayrimenkul Yatırım Ortaklığı A.Ş. and fair value of investment properties are detailed as follows. Investment property expert reports are prepared by valuation companies operation under the CMB in accordance with Investment Property Valuation Companies Operating Under The Capital Market Legislation and Basis of Listing of Related Companies By the Board Communiqué Serial: VIII, No: 35. Date of Expertise Report Valuation method Fair value (TL) Income capitilisation 23 December 2011 936.338.281 Akasya Shopping Mall Bizim Top. Sat. M.(BTM)-Altunizade Peer Comparison 28 December 2011 9.880.000 Bizim Top. Sat. M.(BTM)-Antalya Cost 28 December 2011 5.335.000 Fecir Business Center - Arnavutköy Cost 28 December 2011 15.640.000 Komili Fabrics Building - Gebze Cost 28 December 2011 42.545.000 Mecidiyeköy Business Center Peer Comparison 28 December 2011 3.738.500 1.013.476.781 In 2011, for the investment property the depreciation expense is 257.128 and total operating cost expenditure is 588,987 TL (31 December 2010: None). 36 105

NOTES TO THE AUDITED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2011 (Amounts are expressed in Turkish Lira (TL) unless otherwise stated) 18. TANGIBLE ASSETS Cost Opening balance as of 1 January 2010 Land Buildings Motor Vehicles Furniture and Fixture Leasahold Improvements Total 4.761.841 4.788.801 58.875 1.489.758-11.099.275 Additions - - - 43.767-43.767 Disposals - - - (9.855) - (9.855) Closing balance as of 31 December 2010 4.761.841 4.788.801 58.875 1.523.670-11.133.187 Accumulated Depreciation Opening balance as of 1 January 2010 - (798.134) (43.412) (252.208) - (1.093.754) Charge for the year - (2.394.401) (6.398) (276.650) - (2.677.449) Disposals - - - 5.920-5.920 Closing balance as of 31 December 2010 - (3.192.535) (49.810) (522.938) - (3.765.283) Carrying value as of 31 December 2010 4.761.841 1.596.266 9.065 1.000.732-7.367.904 37 106 SAF GYO 2011 Annual Report FıNANCIAL TABLES AND NOTES

NOTES TO THE AUDITED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2011 (Amounts are expressed in Turkish Lira (TL) unless otherwise stated) 18. TANGIBLE ASSETS (cont d) Cost Opening balance as of 1 January 2011 Land Buildings Motor Vehicles Furniture and Fixture Leasahold Improvements Total 4.761.841 4.788.801 58.875 1.523.670-11.133.187 Additions - - - 166.884 166.884 Business combinations - - - 44.381 1.220 45.601 Disposals - (4.788.801) - - - (4.788.801) Closing balance as of 31 December 2011 4.761.841-58.875 1.734.935 1.220 6.556.871 Birikmiş Amortismanlar Opening balance as of 1 January 2011 - (3.192.535) (49.810) (522.938) - (3.765.283) Charge for the period - (1.197.200) (6.398) (290.443) - (1.494.041) Assets acquired by busines combinations - - - (35.764) (873) (36.637) Disposals - 4.389.735 - - - 4.389.735 Closing balance as of 31 December 2011 - - (56.208) (849.145) (873) (906.226) Carrying value as of 31 December 2010 4.761.841-2.667 885.790 347 5.650.645 107

NOTES TO THE AUDITED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2011 (Amounts are expressed in Turkish Lira (TL) unless otherwise stated) 18. TANGIBLE ASSETS (cont d) Pledge and mortgages on assets There are no pledges or mortgages on Company s property, plant and equipment as of December 31, 2011. Property, plant and equipment are depreciated over the following useful lives: Useful Lifes Buildings Motor Vehicles Furniture and Fixture Other Tangible Fixed Assets 2-5 years 5 years 4-5 years 5 years 19. INTANGIBLE ASSETS Rights Cost Opening balance as of 1 January 2010 120.050 Additions 45.118 Closing balance as of 31 December 2010 165.168 Accumulated Amortization Opening balance as of 1 January 2010 (61.338) Charge for the year (40.678) Closing balance as of 31 December 2010 (102.016) Carrying value as of 31 December 2010 63.152 Rights Cost Value Opening balance as of 1 January 20101 165.168 Assets acquired by busines combinations 2.029 Additions 32.710 Closing balance as of 31 December 2011 199.907 Accumulated Amortization Opening balance as of 1 January 2011 (102.016) Assets acquired by busines combinations (1.454) Charge for the year (41.140) Carrying value as of 31 December 2011 (144.610) Carrying value as of 31 December 2011 55.297 39 108 SAF GYO 2011 Annual Report FıNANCIAL TABLES AND NOTES

NOTES TO THE AUDITED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2011 (Amounts are expressed in Turkish Lira (TL) unless otherwise stated) 19. INTANGIBLE ASSETS (cont d) Intangible assets (Rights) are amortized over useful lives of through 5 years. 20. GOODWILL None (31 December 2010:None). 21. GOVERMENT GRANTS None (31 December 2010: None). 22. PROVISIONS, CONTINGENTASSESTS AND LIABILITIES 31 December 2011 TL USD Mortgages for the Company's own legal name (1) 52.975.059 28.045.454 Mortgages on behalf of third parties (2) 18.448.436 - Other guarantees on behalf of the majority shareholder(3) 83.111.600 44.000.000 Other pledges on behalf of the majority shareholder(3) 75.556.000 40.000.000 Other mortgages on behalf of the majority shareholder(1) 10.303.091 5.454.545 Total 240.394.186 117.499.999 (1) The amount of mortgage on Akasya Kent Etabı, investment property asset, is 33.500.000 USD by HSBC Plc. (2) Mortgage is given to HSBC Bank A.Ş. as the loan guarantees of customers borrowed from the related bank for the acquisition of Akasya Koru residentials. (3) Pledges amounting to USD 40.000.000 of customer bills and USD 44.000.000 of deposits are given for the Company s loan borrowed from Vakıfbank T.A.O. amounting to USD 80.000.000 that was given to the Company s shareholders under the similar terms and conditions. 31 December 2010 TL USD Mortgages for the Company's own legal name (1) 210.677.636 136.272.727 Mortgages on behalf of third parties (2) 22.176.431 - Other guarantees on behalf of the majority shareholder(3) 68.024.000 44.000.000 Other pledges on behalf of the majority shareholder(3) 61.840.000 40.000.000 Other mortgages on behalf of the majority shareholder(1) 50.596.364 32.727.273 Total 413.314.431 253.000.000 (1) The amount of mortgage on Akasya Kent Etabı, investment property asset, is 169.500.000 USD by HSBC Plc. (2) Mortgage is given to HSBC Bank A.Ş. as the loan guarantees of customers borrowed from the related bank for the acquisition of Akasya Koru residentials. (3) Pledges amounting to USD 40.000.000 of customer bills and USD 44.000.000 of deposits are given for the Company s loan borrowed from Vakıfbank T.A.O. amounting to USD 80.000.000 that was given to the Company s shareholders under the similar terms and conditions. In its written announcement made on 28 September 2011, the CMB requires full settlement of receivables from related parties within 9 months subsequent to the business combination approval and the release of mortgages given as guarantees in accordance with Article 24(g) of the Communiqué Serial: IV, No: 11. 40 109

NOTES TO THE AUDITED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2011 (Amounts are expressed in Turkish Lira (TL) unless otherwise stated) 23. COMMITMENTS AND CONTINGENCIES In the merger transaction, Saf Gayrimenkul Yatırım Ortaklığı A.Ş. subscribed that it will pay the accrued and to be accrued tax payable and other liabilities of Saf Gayrimenkul Geliştirme İnşaat ve Ticaret A.Ş., within the context of article 18., 19, 20 of the Corporate Tax Law (31 December 2010: None). 24. EMPLOYMENT TERMINATION BENEFITS 31 December 31 December 2011 2010 Provision for employment termination benefits 136.608 64.517 Provision for unused vacation 34.290 26.334 170.898 90.851 Retirement pay provision: Under Turkish Labor Law, the Company is required to pay employment termination benefits to each entitled employee. Also, employees are entitled to be paid their retirement pay provisions who retired by gaining right to receive retirement pay provisions according to of the prevailing 506 numbered Social Insurance Law s Article 60, as amended by 6 March 1981 dated, 2422 numbered and 25 August 1999 dated, 4447 numbered laws. Some transition provisions related to the pre-retirement service term was excluded from the law since the related law was changed as of 23 May 2002. The amount payable consists of one month s salary limited to a maximum of TL 2.731 (2010: TL 2.517) for each period of service at 31 December 2011. The liability is not funded, as there is no funding requirement. Provision is calculated by estimating the present value of the future probable obligation of the Company arising from the retirement of the employees. Revised IAS 19 Employee Benefits requires actuarial valuation methods to be developed to estimate the Company s obligation under the defined benefit plans. Accordingly, the following actuarial assumptions are used in the calculation of the total liability. The principal assumption is that the maximum liability for each year of service will increase parallel with inflation. Thus, the discount rate applied represents the expected real rate after adjusting for the anticipated effects of future inflation. Consequently, in the accompanying financial statements as of 31 December 2011, the provision has been calculated by estimating the present value of the future probable obligation of the Company arising from the retirement of the employees. The provisions at the respective balance sheet dates have been calculated by assuming an annual inflation rate of 5,10%, real discount rate of 4.66% (31 December 2010: 4,66%). Approximately proportion of voluntarily terminations requiring no payments are also taken into account. The maximum amount of TL, that has been revised every six months, 2,805 effective from 1 January 2011 has been taken into consideration in the calculation of provision for employee termination benefits (31 December 2010: 2.623 TL). 110 SAF GYO 2011 Annual Report FıNANCIAL TABLES AND NOTES

NOTES TO THE AUDITED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2011 (Amounts are expressed in Turkish Lira (TL) unless otherwise stated) 24. EMPLOYMENT TERMINATION BENEFITS (cont d) Employment Termination Benefits (cont d): Movement of Retirement Pay Provision: 1 January- 1 January- 31 December 31 December 2011 2010 Provision at 1 January 64.517 24.501 Business combinations 240 - Service cost 93.647 68.526 Interest cost 3.008 1.142 Termination benefits paid (24.804) (29.652) Provision at 31 December 136.608 64.517 25. PENSION PLANS None (31 December 2010: None). 26. OTHER ASSESTS AND LIABILITIES 31 December 31 December Other Current Assets 2011 2010 Restircted bank deposits 75.556.000 - VAT receivable 60.208.213 24.113.881 Prepaid expenses 871.619 259.801 Prepaid taxes and funds 5.939.253 - Advances given for business purposes 7.411 3.234 Advances given to personnel 4.500-142.586.996 24.376.916 USD 40.000.000 (75.556.000 TL) of foreign currency time deposit of 158.158.825 TL is blocked against the loan taken from Vakıflar Bankası T.A.O. in 2010 amounted USD 80.000.000 in order to fund its shareholders until the maturity of the loan. 111

NOTES TO THE AUDITED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2011 (Amounts are expressed in Turkish Lira (TL) unless otherwise stated) 26. OTHER ASSESTS AND LIABILITIES (cont d) 31 December 31 December Other Non-Current Assets 2011 2010 Prepaid expenses 180.780 452.591 Advances given (*) 30.530.697 35.542.066 30.711.477 35.994.657 (*)Advances given are related with the constructions in progress. Other Short Term Liabilities Restated 31 December 31 December 2011 2010 Advances received (*) 3.617.107 233.820.579 Short term liabilities to related parties (Note 37) 447.243 14.306.286 4.064.350 248.126.865 Restated 31 December 31 December Other Long Term Liabilities 2011 2010 Advances received (*) 225.561.244 273.045.563 Advances received from related parties 16.516.827 4.033.839 242.078.071 277.079.402 (*) Amount consists of advances received from customers for the residentials sold but not delivered as of the balance sheet date. 112 SAF GYO 2011 Annual Report FıNANCIAL TABLES AND NOTES

NOTES TO THE AUDITED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2011 (Amounts are expressed in Turkish Lira (TL) unless otherwise stated) 27. EQUITY a) Share Capital The structure of the paid in capital as of 31 December 2011 and 2010 is as follows: 31 December 31 December Shareholders % 2011 % 2010 Yıldız Holding A.Ş. 24,1% 213.650.417 25,0% 3.512.500 Ali Raif Dinçkök 9,4% 83.054.595 10,0% 1.404.906 Sinpaş Yapı End. ve Tic A.Ş. 9,3% 82.262.789 10,2% 1.433.100 Ömer Dinçkök 7,0% 62.295.125 7,5% 1.053.750 Sinpaş Gayrimenkul Yat. Ort. 6,9% 61.431.299 7,4% 1.039.138 Akiş G.Menkul Yatırımı A.Ş. 6,6% 58.142.186 7,0% 983.501 AGE Investment Holding B.V. 6,1% 53.989.108 0,0% - Rıfat Hasan 5,1% 44.852.490 5,4% 758.700 Nesim Özmandıracı 3,7% 33.224.067 0,0% - Mair Kasuto 3,4% 29.901.660 0,0% - Raif Ali Dinçkök 2,4% 20.931.162 0,0% - Avni Çelik 0,2% 1.694.427 6,9% 970.012 Publicly held 3,3% 28.975.385 0,0% - Other 12,7% 112.196.959 20,6% 2.894.393 Isssued capital 100% 886.601.669 100% 14.050.000 Balancing Account for Merger Capital (806.601.669) - Nominal Capital 80.000.000 14.050.000 The total number of ordinary shares is 88.660.166.900 shares as of 31 December 2011 (31 December 2010: 14.050.000). In 2011 Company increased its shareholders equity from 14.050.000 TL to 24.000.000,-TL before business combination and this time all the increased amount 9.950.000,-TL is corresponded with the addition of the retained earnings to shareholders equity. The capital increase is registered and signalized in Trade Registry Gazette numbered 7853 and date 7 July 2011. All the shares issued is paid by cash. 806.601.669 shares are distributed between shareholders in current year within the context of the business combination (2010 : None). Registered share capital ceiling of the Company is TL 2.000.000.000 as of 31 December 2011. Inflation adjustments to share capital is TL 36.467 (31 December 2010: TL 36.467) and share issue premium is TL 736.316 (31 December 2010: None) as of 31 December 2011. 44 113

NOTES TO THE AUDITED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2011 (Amounts are expressed in Turkish Lira (TL) unless otherwise stated) 27. EQUITY (cont d) a) Share Capital / Interrelated Subsidiary Capital Adjustments Privileges of shares given detailed above is as follows : Name Surname / Trade name Group Type Share unit Share amount TL Murat Ülker A Registered 20.000.000 200.000 Murat Ülker B Bearer 680.000.000 6.800.000 Ahsen Özokur A Registered 20.000.000 200.000 Ahsen Özokur B Bearer 680.000.000 6.800.000 Yıldız Holding A.Ş. B Bearer 21.365.041.726 213.650.417 Gözde Girişim Sermayesi Yatırım Ort. A.Ş. B Bearer 408.184.200 4.081.842 Ülker Çikolata San. A.Ş. B Bearer 294.276.500 2.942.765 Mahmut Mahir Kuşculu B Bearer 400 4 İsmail Bacacı B Bearer 400 4 Avni Çelik B Bearer 169.442.746 1.694.427 Sinpaş Yapı End.ve Tic. A.Ş. B Bearer 8.226.278.926 82.262.789 Sinpaş Gayr. Yat. Ort. A.Ş. B Bearer 6.143.129.941 61.431.299 Age Investment Holding B.V. B Bearer 5.398.910.846 53.989.108 Abdullah Tivnikli B Bearer 827.279.265 8.272.793 Akiş Gayr. Yatırımı A.Ş. B Bearer 5.814.218.608 58.142.186 Atlantik Holding A.Ş. B Bearer 1.938.070.562 19.380.706 Ali Raif Dinçkök B Bearer 8.305.459.493 83.054.595 Ömer Dinçkök B Bearer 6.229.512.515 62.295.125 Raif Ali Dinçkök B Bearer 2.093.116.205 20.931.162 Ayça Dinçkök B Bearer 830.601.669 8.306.017 Gamze Dinçkök Yücaoğlu B Bearer 830.601.669 8.306.017 Mutlu Dinçkök B Bearer 830.601.669 8.306.017 Alize Dinçkök Eyüboğlu B Bearer 260.808.924 2.608.089 Nilüfer Çiftçi B Bearer 1.938.067.101 19.380.671 Aslan Badi B Bearer 830.601.669 8.306.017 Doğu Batı San. Ürünleri A.Ş. B Bearer 830.601.669 8.306.017 Rıfat Hasan B Bearer 4.485.249.015 44.852.490 Mair Kasuto B Bearer 2.990.166.007 29.901.660 Nesim Özmandıracı B Bearer 3.322.406.675 33.224.067 Publicly traded B Bearer 2.897.538.500 28.975.385 Total 88.660.166.900 886.601.669 A group shares are registered and B group shares are on bearer. Transfer of registered shares cannot be limited. Transfer of preferred shares are subject to the approval of CMB. In capital increases, A Group shares in consideration of A Group shares and B Group shares in consideration of B Group shares will be issued. However if Board of Directors decide on the limitation of obtaining new shares of shareholders, all the issued shares will be B group and bearer. 114 SAF GYO 2011 Annual Report 45 FıNANCIAL TABLES AND NOTES

NOTES TO THE AUDITED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2011 (Amounts are expressed in Turkish Lira (TL) unless otherwise stated) 27. EQUITY (cont d) a) Share Capital / Interrelated Subsidiary Capital Adjustments Board of the Directors of the Company has 12 members and 4 of the members is selected from the candidates chosen by (A) group shareholders. Other members are selected from the candidates determined by general clauses. According to 13th article of Company s main agreement, Board of Directors meeting starts with at least 11 members attendance and decision given with at least 11 members affirmative votes. In capital increases, remaining share after exercising of preemptive right or in case of limitation of preemptive right, all newly issued shares are offered to public for market prices (not lower than the nominal value). b) Revaluation funds None (31 December 2010: None). b) Restricted Reserves 31 December 31 December 2011 2010 Legal Reserves 1.295.750 12.091 1.295.750 12.091 The legal reserves consist of first and second legal reserves, appropriated in accordance with the Turkish Commercial Code. The first legal reserve is appropriated out of historical statutory profits at the rate of 5% per annum, until the total reserve reaches 20% of the historical paid-in share capital. The second legal reserve is appropriated after the first legal reserve and dividends, at the rate of 10% per annum of all cash dividend distributions. In accordance with the CMB s requirements which were effective until 1 January 2008, the amount generated from first-time application of inflation adjustments on financial statements, and followed under the accumulated loss item was taken into consideration as a reduction in the calculation of profit distribution based on the inflation adjusted financial statements within the scope of the CMB s regulation issued on profit distribution. The related amount that was followed under the accumulated loss item could also be offset against the profit for the period (if any) and undistributed retained earnings and the remaining loss amount could be offset against capital reserves arising from the restatement of extraordinary reserves, legal reserves and equity items, respectively. In addition, in accordance with the CMB s requirements which were effective until 1 January 2008, at the first-time application of inflation adjustments on financial statements, equity items, namely Capital, Issue premiums, Legal reserves, Statutory reserves, Special reserves and Extraordinary reserves were carried at nominal value in the balance sheet and restatement differences of such items were presented in equity under the Shareholders equity inflation restatement differences line item in aggregate. Shareholders equity inflation restatement differences related to all equity items could only be subject to the capital increase by bonus issue or loss deduction, while the carrying value of extraordinary reserves could be subject to the capital increase by bonus issue; cash profit distribution or loss offsetting. 46 115

NOTES TO THE AUDITED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2011 (Amounts are expressed in Turkish Lira (TL) unless otherwise stated) 27. EQUITY (cont d) However, in accordance with the Communiqué Series: XI, No: 29 issued on 1 January 2008 and other related CMB s announcements, Paid-in capital, Restricted profit reserves and Premium in capital stock should be carried at their registered amounts in statutory records. Restatement differences (e.g. inflation restatement differences) arising from the application of the Communiqué should be associated with: - Capital restatement differences account, following the Paid-in capital line item in the financial statements, if such differences are arising from Paid-in capital and not added to capital; - Retained earnings/ accumulated loss, if such differences are arising from Restricted profit reserves and Share premiums and has not been subjected to profit distribution or capital increase. Other equity items are carried at the amounts that are valued based on the CMB s Financial Reporting Standards. Capital adjustments account can only be added to capital. The extraordinary reserves of the Company in retained earnings amount to 10.898.667 TL as of 31 December 2011 (31 December 2010:None). Profit Distribution: In accordance with the Capital Markets Board s (the Board ) Decree issued as of 27 January 2011, in relation to the profit distribution of earnings derived from the operations in 2010, minimum profit distribution is not required for listed companies, and accordingly, profit distribution should be made based on the requirements set out in the Board s Communiqué Series IV, No: 27 Principles of Dividend Advance Distribution of Companies That Are Subject To The Capital Markets Board Regulations, terms of articles of corporations and profit distribution policies publicly disclosed by the companies. Furthermore, based on the afore-mentioned decree, companies that are required to prepare financial statements should calculate their net distributable profits, to the extent that they can be recovered from equity in their statutory records, by considering the net profit for the period in the financial statements which are prepared and disclosed in accordance with the Communiqué Serial: XI, No: 29. Board of directors has no decision about current year dividend distribution as of the date of this report. Resources That Can Be Subject To Profit Distribution: As of the report date the profit in statutory books after the deduction of accumulated losses is 333.789.818 TL (31 December 2010: 876.817 TL) and other resources that can be subject to profit distribution is 10.898.667 TL ( 31 December 2010: 17.642 TL). 116 SAF GYO 2011 Annual Report FıNANCIAL TABLES AND NOTES 47

NOTES TO THE AUDITED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2011 (Amounts are expressed in Turkish Lira (TL) unless otherwise stated) 28. SALES AND COST OF SALES a) Sales Residential sales 1 January- 1 January- 31 December 31 December 2011 2010 Akasya Göl Etabı Residential Sales 358.986.866 - Akasya Koru Etabı Residential Sales 316.453.707 - Sales discounts (-) (90.896.787) - 584.543.786 - Rent Income 1 January- 1 January- 31 December 31 December 2011 2010 Komili Kağıt Fabric 390.716 - Fecir Business Center 135.618 - Bizim Top. Sat. M. (BTM) - Altunizade 78.217 - Bizim Top. Sat. M. (BTM) - Antalya 35.157 - Mecidiyeköy Business Center 14.543-654.251 - b) Cost of Sales 1 Ocak- 1 Ocak- 31 Aralık 31 Aralık 2011 2010 Akasya Göl Etabı subcontractor expenses (112.047.087) - Akasya Göl Etabı land cost (13.687.777) - Akasya Koru Etabı subcontractor expenses (120.651.980) - Akasya Koru Etabı arsa land cost (8.856.950) - Common subcontractor expenses (27.554.675) - Cost of merchandises sold (282.798.469) - Cost of services (524.747) - (283.323.216) 48 117

NOTES TO THE AUDITED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2011 (Amounts are expressed in Turkish Lira (TL) unless otherwise stated) 29. RESEARCH AND DEVELOPMENT, MARKETING, SALES AND DISTRIBUTION AND GENERAL ADMINISTRATIVE EXPENSES 1 January- 1 January- 31 December 31 December 2011 2010 Marketing, selling and distribution expenses (-) 5.144.221 6.282.574 General administrative expenses (-) 3.717.262 2.223.216 8.861.483 8.505.790 Detail of Marketing, Selling and Distribution Expenses 1 January- 1 January- 31 December 31 December 2011 2010 Employee benefit expenses 595.196 1.776.168 Depreciation expenses 1.552.485 2.363.792 Duties, taxes and levies expenses 21.539 52.676 Representation expenses 25.315 34.245 Transportation expenses 22.220 51.982 Electiricity, water and oil expenses 45.425 46.188 Cargo expense 4.017 12.890 Advertisement expenses 632.785 1.233.417 Maintenance expenses 97.972 88.114 Utilities expense 18.713 4.011 Notary expenses 1.754.961 495.029 Consultancy expenses 152.195 51.600 Other expenses 221.398 72.462 5.144.221 6.282.574 49 118 SAF GYO 2011 Annual Report FıNANCIAL TABLES AND NOTES

NOTES TO THE AUDITED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2011 (Amounts are expressed in Turkish Lira (TL) unless otherwise stated) 29. RESEARCH AND DEVELOPMENT, MARKETING, SALES AND DISTRIBUTION AND GENERAL ADMINISTRATIVE EXPENSES (cont d) General administrative expenses 1 January- 1 January- 31 December 31 December 2011 2010 Employee benefit expenses 193.193 1.094.248 Depreciation expenses 239.824 354.337 Duties, taxes and levies expenses 94.254 463.169 Transportation expenses - 49.344 Donations - 40.800 Consultancy expenses 22.353 156.646 CMB expenses 3.035.274 - Other expenses 132.364 64.672 3.717.262 2.223.216 30. EXPENSES BY NATURE Expenses by nature 1 January- 1 January- 31 December 31 December 2011 2010 Payroll expenses 788.389 2.870.416 Depreciation expenses 1.792.309 2.718.129 Duties, taxes and levies expenses 115.793 515.845 Tranportation expenses 22.220 101.326 Consultancy expenses 174.548 208.246 Notary expenses 1.754.961 495.029 Advertisement expenses 632.785 1.233.417 Electricity, water and fuel-oil expenses 45.425 46.188 Maintenance expenses 97.972 88.114 CMB and ISE charges 3.035.274 - Other expenses 401.807 229.080 8.861.483 8.505.790 50 119

NOTES TO THE AUDITED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2011 (Amounts are expressed in Turkish Lira (TL) unless otherwise stated) 31. OTHER OPERATING INCOME/EXPENSES The details of income from other operations for the years ended 31 December 2011 and 31 December 2010 are as follows: 1 January- 1 January- 31 December 31 December 2011 2010 Rent income 2.016.745 1.105.823 Scrap sales income - 14.000 Recycling material sales income - 59.046 Other income 535.470 163.942 Discount income 5.005 - Loss settlement income 1.831-2.559.051 1.342.811 The details of expenses from other operations for the years ended 31 December 2011 and 31 December 2010 are as follows: 1 January- 1 January- 31 December 31 December 2011 2010 Expensed school building cost 5.555.376 158.594 Loss settlement expense 1.836 - Other losses and expenses 25.000 3.425 Reversal of deferred tax expense 1.903.069-7.485.281 162.019 120 SAF GYO 2011 Annual Report FıNANCIAL TABLES AND NOTES 51

NOTES TO THE AUDITED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2011 (Amounts are expressed in Turkish Lira (TL) unless otherwise stated) 32. FINANCIAL INCOME 1 January- 1 January- 31 December 31 December 2011 2010 Interest revenue: Bank deposits 21.992.973 27.666.847 Interest income from loan provided to shareholders 5.881.615 3.795.462 Interest income from reverse repo 223.320 - Discount income - 4.470 Foreign exchange gains 33.152.693 15.347.122 61.250.601 46.813.901 33. FINANCIAL EXPENSES 1 Ocak - 1 Ocak - 31 Aralık 31 Aralık 2011 2010 Interest expense of loan provided to shareholders (5.881.615) (3.795.462) Foreign exchange losses (6.401.028) (11.153.271) Short term bvorrowing costs (333.835) - Discount expenses (678.964) (16.344) Other finance costs - (14.510) (13.295.442) (14.979.587) Capitalized borrowing costs in the current period is 12.725.817 TL (31 December 2010: 37.456.527 TL). 52 121

NOTES TO THE AUDITED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2011 (Amounts are expressed in Turkish Lira (TL) unless otherwise stated) 34. ASSEST CLASSIFIED AS HELD FOR SALE AND DISCOUNTINUED OPERATIONS None (2010 None). 35. TAXATION The reconciliation of the taxation on income for the period is as follows: 31 December 31 December 2011 2010 Current tax liabilities Current tax liability 6.553.922 5.746.175 Less: Prepaid taxes (3.339.731) (5.302.971) 3.214.191 443.204 - - Tax expense in income statement 1 January- 1 January- 31 December 31 December Tax income / (expense): 2011 2010 Current tax income 6.553.922 5.746.175 Deferred tax expense - (809.713) 6.553.922 4.936.462 1 January- 1 January- 31 December 31 December Reconciliation of tax provision 2011 2010 Income before tax 336.042.267 24.509.315 Tax calculated at 20% (2010: 20%) 67.208.453 4.901.863 Tax effect - Income not subject to tax (60.678.142) - - Non-deductible expenses 13.385 14.403 - Other 10.226 20.196 Tax expense in income statement 6.553.922 4.936.462 122 SAF GYO 2011 Annual Report 53 FıNANCIAL TABLES AND NOTES

NOTES TO THE AUDITED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2011 (Amounts are expressed in Turkish Lira (TL) unless otherwise stated) 35. TAXATION (cont d) Corporate Tax: Saf Gayrimenkul Geliştirme İnşaat ve Ticaret A.Ş. is subject to Turkish corporate taxes. Provision is made in the accompanying financial statements for the estimated charge based on the Company s results for the year. Corporate tax is applied on taxable corporate income, which is calculated from the statutory accounting profit by adding back non-deductible expenses, and by deducting dividends received from resident companies, other exempt income and investment incentives utilized. The effective rate of tax in 2011 is 20% (2010: 20%). In Turkey, advance tax returns are filed on a quarterly basis. The advance corporate income tax rate in 2011 is 20% (2010: 20%). Losses can be carried forward for offset against future taxable income for up to 5 years. Losses cannot be carried back for offset against profits from previous periods. In Turkey, there is no procedure for a final and definitive agreement on tax assessments. Companies file their tax returns between 1-25 April following the close of the accounting year to which they relate (Companies with special accounting periods file their tax returns between 1-25 of the fourth month subsequent to the fiscal year end). Tax authorities may, however, examine such returns and the underlying accounting records and may revise assessments within five years. Income Withholding Tax: In addition to corporate taxes, companies should also calculate income withholding taxes and funds surcharge on any dividends distributed, except for companies receiving dividends who are resident companies in Turkey and Turkish branches of foreign companies. The rate of income withholding tax is 10% between 24 April 2003 and 22 July 2006. This rate was changed to 15% commencing from 22 July 2006 with the Cabinet Decision 2006/10731. Undistributed dividends incorporated in share capital are not subject to income withholding taxes. Withholding tax at the rate of 19.8% is still applied to investment allowances relating to investment incentive certificates obtained prior to 24 April 2003. Subsequent to this date, the investments without investment incentive certificates do not qualify for tax allowance. The Company s Status Subsequent to Business Combination Saf Gayrimenkul Geliştirme İnşaat ve Ticaret A.Ş. was combined with Sağlam Gayrimenkul Yatırım Ortaklığı A.Ş. on 3 November 2011 and the new business combination continues to operate in the real estate investment fund sector. Under Article 5(d)(4) of the Corporate Tax Law No: 5520, real estate investment funds are exempt from corporate tax. Income of real estate investment funds are subject to withholding tax in accordance with Article 94(6)(a) of the Income Tax Law and upon the Council of minister s resolution no: 93/5148 withholding tax rate is applied as nil. Therefore, the Company has no tax liability arising from profits attributable to the 3 November 2011 31 December 2011 period 54 123

NOTES TO THE AUDITED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2011 (Amounts are expressed in Turkish Lira (TL) unless otherwise stated) 35. TAXATION (cont d) Deferred Tax: The Company recognizes deferred tax assets and liabilities based upon temporary differences arising between its financial statements as reported for IFRS purposes and its statutory tax financial statements. These differences usually result in the recognition of revenue and expenses in different reporting periods for IFRS and tax purposes and shown below. Income tax rate used in calculation of deferred tax income and expense is %20 (2010 :%20). Movement of deferred tax (assets)/liabilities for year ended 31 December 2011 and 2010 as follows: 31 December Movement of deferred tax (asset)/ liabilities: 2010 Difference between the tax base and carrying value of property, plant and equipment and intangible assets 176.401 Retirement pay provision 12.903 Inventories 1.679.180 Interest income accrual for shareholder loans (722.736) Discount of loan 745.595 Provision for unused vacation 5.267 Discount of trade payables (894) Foreign currency valuation of advances 7.353 Deferred tax asset provision 1.903.069 The movement for deferred tax asset as of 31 December 2010 is as follows: 1 January- 31 December Movement of deferred tax (asset)/ liabilities: 2010 Opening balance as of 1 January 2010 1.093.356 Charged to profit /(loss) 809.713 Closing balance as of 31 December 2010 1.903.069 Company is turned to real estate investment trust as of 3 November 2011 and real estate investment trusts are exempt from corporate tax. Hence, previous period deferred tax amount is accounted for as other expense in current period financial statements and the amount in 2011 financials is nil. 124 SAF GYO 2011 Annual Report 55 FıNANCIAL TABLES AND NOTES

NOTES TO THE AUDITED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2011 (Amounts are expressed in Turkish Lira (TL) unless otherwise stated) 36. EARNINGS PER SHARE 1 January- 1 January- 31 December 31 December Earning Per Share 2011 2010 Weighted average number of ordinary shares outstanding 839.935.002 830.601.669 during the period (in full) Net profit for the year attributable to 329.488.345 19.572.854 equity holders of the parent Earnings per share from operations 0,392 0,024 37. TRANSACTIONS WITH RELATED PARTIES Receivables from related parties is mainly due form residential estate sales. Company supplied its all customers including related parties a sales campaign, with payment schedule 25 % cash and 75 % housing loan or 50 % cash and 50 % five year maturity with 5 equal payments. Interim payments are indexed with CPI. 56 125

NOTES TO THE AUDITED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2011 (Amounts are expressed in Turkish Lira (TL) unless otherwise stated) 37. TRANSACTIONS WITH RELATED PARTIES Receivables Current Non-current 31 December 2011 Balances with related parties Trading Non-trading (*) Trading Non-trading Trading Non-trading (*) Non-current Financial lease payables Trading Non-trading Shareholders Yıldız Holding A.Ş. 27.209 45.371.990 - - - - - - - - Sinpaş Yapı End. Ve Tic. A.Ş. - 45.371.990 - - - - - - - - Dogu Bati San.Ürünleri Ihr.Ith.A.S. - 23.852.039 - - - - - - - - Akis Gayrimenkul Yatirimi A.S. - 61.333.815 - - - - - - - Family members 132.970 - - - - 447.243 16.516.827 Other related parties Fon Finansal Kiralama A.Ş. - - 9.777.343 713.948 Fırat Tarımsal İşletmeler San. Ve Tic. Ltd. Şti. 147.900 - - - - - - - - - Dekors Mekan Tasarımı ve Dekorasyon Tic.A.Ş. 29.500 - - - - - - - - - Kentsel Hizmetler Yapı ve İşletme San.Tic.A.Ş. - - - - 44.201 - - - - - Dinkal Sigorta Acenteliği A.Ş. - - - - 130.051 - - - - - Akenerji ElektrikEnerjisi İth.İhr. Toptan Tic.A.Ş. - - - - - 79.950 - - - - 337.579 175.929.834 - - 174.252 527.193 9.777.343-16.516.827 713.948 Current Payables Financial lease payables (*) Note 11. 57 126 SAF GYO 2011 Annual Report FıNANCIAL TABLES AND NOTES

NOTES TO THE AUDITED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2011 (Amounts are expressed in Turkish Lira (TL) unless otherwise stated) 37. TRANSACTIONS WITH RELATED PARTIES (cont d) 1 January - 31 December 2011 Transactions with related parties Purchases Sales Interest received Interest given Rent income Rent expense Other income Other expense Shareholders Sinpaş Yapı End. Ve Tic. A.Ş. - - - - - - 13.320 14.792 Ali Raif Dinçkök - 2.319.735 - - - - - - Nesim Özmandıracı - 3.692.424 - - - - - - Rifat Hasan - 1.742.404 - - - - - - Ayça Dinçkök - 482.049 - - - - - - Alize Dinçkök Eyuboğlu - 833.565 - - - - - - Aslan Badi - 507.460 - - - - - - Gamze Dinçkök Yücaoğlu - 672.272 - - - - - - Raif Ali Dinçkök - 348.595 - - - - - - Doğu Batı Sanayi Ür. İhr. ve İth. A.Ş. - 1.898.358 - - - - - - Yıldız Holding A.Ş. 141.497 236.663 Family members Cenk Eyüboğlu - 2.724.171 - - - - - - Ari Kasuto - 387.299 - - - - - - Sami Kasuto - 549.928 - - - - - - Esra Dinçkök - 337.545 - - - - - - Tilda Özmandıracı - 471.208 - - - - - - Rüstem Eyüboğlu - 873.242 - - - - - - Ayda Seda Eyüpoğlu - 385.752 - - - - - - Sernur Çiftçi - 599.586 - - - - - - Malka Milko Kasuto - 387.238 - - - - - - Fatma Betül Ülker - 1.095.743 - - - - - - Other companies in control of main shareholder Dekors Mek. Tas. Ve Dek. Tic.A.Ş. - - - - - - 9.987 25.000 Üçöğün Hazır Yem. Ve Ziy. Hiz. A.Ş. - - - - - - 68.112 - Kentsel Hiz. Yapı ve İşl. San.Tic.A.Ş. - - - - - - 149.379 - Sağlam İnşaat Taahhüt Tic. A.Ş. 8.171.500 - - - - 76.933-1.228 Çelik&Çelik Yap. Çel. End. Tic.A.Ş. - - - - - - 74.767 - Akenerji Elekt. İth. İhr. Top.Tic.A.Ş. - - 402.710 - - - - - Optimum Prj. Dan. İnş. Taah. Ltd.Şti. 22.500 - - - - - - - Mikron'S Mikronize End.Tic.A.Ş. - - - - - - 19.258 - FFK Fon Finansal Kiralama A.Ş. - - - 979.378 - - - - SCA Yıldız Kağıt ve Kiş.Bak.Ür.A.Ş. - - - - 4.131.617 - - - Bizim Toptan Satış Mağazaları A.Ş. - - - - 1.336.814 - - - 8.335.497 20.308.574 402.710 979.378 5.705.094 76.933 334.823 41.020 58 127

NOTES TO THE AUDITED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2011 (Amounts are expressed in Turkish Lira (TL) unless otherwise stated) 37. TRANSACTIONS WITH RELATED PARTIES (cont d) Current Receivables Non-current 31 December 2010 Non-current Financial leasing payables Trading Non-trading Balances with related parties Trading Non-trading (*) Trading Non-trading Trading Non-trading (*) Shareholders Yıldız Holding A.Ş. - 5.333.685-35.131.145 - - - - - - Sinpaş Yapı End. Ve Tic. A.Ş. - 5.342.310-35.131.145 - - - - - - Dogu Bati San.Ürünleri Ihr.Ith.A.S. - 502.610-18.468.431 - - - - - - Akis Gayrimenkul Yatirimi A.S. - 9.309.155-43.382.005 - - - - - Family members - - - - - 14.306.286 4.033.839 Other related parties Fon Finansal Kiralama A.Ş. - - - - - Fırat Tarımsal İşletmeler San. Ve Tic. Ltd. Şti. - - - - - - - - - - Dekors Mekan Tasarımı ve Dekorasyon Tic.A.Ş. - - - - 100.111 - - - - - Kentsel Hizmetler Yapı ve İşletme San.Tic.A.Ş. - - - - - - - - - - Dinkal Sigorta Acenteliği A.Ş. - - - - 246.756 - - - - - Akenerji ElektrikEnerjisi İth.İhr. Toptan Tic.A.Ş. - - - - - 20.248 - - - - Other - - - - 1.026-20.487.760-132.112.726 347.893 14.326.534 - - 4.033.839 - Current Payables Financial leasing payables (*) Dipnot 11. 59 128 SAF GYO 2011 Annual Report FıNANCIAL TABLES AND NOTES

NOTES TO THE AUDITED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2011 (Amounts are expressed in Turkish Lira (TL) unless otherwise stated) 37. TRANSACTIONS WITH RELATED PARTIES (cont d) 1 January - 31 December 2010 Transactions with related parties Interest given Other income Other expense Shareholders Sinpaş Yapı End. Ve Tic. A.Ş. 45.445-8.625 Akiş Gayrimenk. Yat. A.Ş. 90.891 - - Yıldız Holding A.Ş. 45.445 - - Other companies in control of main shareholder Dekors Mek. Tas. Ve Dek. Tic.A.Ş. - 100.111 - Üçöğün Hazır Yem. Ve Ziy. Hiz. A.Ş. - 1.026-181.781 101.137 8.625 Compensation of key management personnel: The remuneration of directors and other members of key management during the year is as follows: 1 January- 1 January- 31 December 31 December 2011 2010 Salaries and other short term benefits 637.088 375.075 637.088 375.075 38. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES a) Capital risk management The Company manages its capital to ensure that the Company will be able to continue as a going concern while maximizing the return to stakeholders through the optimization of the debt and equity balance. The Company s risk management committee reviews the capital structure of the Company collectively on a basis not less than four times in a year. As a part of this review, the committee considers the cost of capital and the risks associated with each class of capital. Based on recommendations of the committee, the Company will balance its overall capital structure through the payment of dividends, new share issues and share buy-backs as well as the issue of new debt or the redemption of existing debt. 60 129

NOTES TO THE AUDITED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2011 (Amounts are expressed in Turkish Lira (TL) unless otherwise stated) 38. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (cont d) a) Capital risk management (Cont d) Equity/Debt ratio as of 31 December 2011 and 2010 is as follows: 2011 TL 2010 TL Total Payables 510.673.186 735.298.486 Less: Cash and cash equivalents 213.342.342 316.736.405 Net Debt 297.330.844 418.562.081 Total Equity 437.021.444 26.368.558 Equıty/Debt 1,47 0,06 b) Financial risk factors The Company s activities expose it to a variety of financial risks: market risk (including currency risk, cash flow interest rate risk and price risk), credit risk and liquidity risk. The Company s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the Company s financial performance. The Company doesn t use any derivative instruments. 130 SAF GYO 2011 Annual Report FıNANCIAL TABLES AND NOTES 61

NOTES TO THE AUDITED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2011 (Amounts are expressed in Turkish Lira (TL) unless otherwise stated) 38. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (cont d) b.1) Credit risk management Credit risks of financial instruments Receivables Trade Receivables Other Receivables 31 December 2011 Related Party Third Party Related Party Third Party Deposits in Banks Derivative Instruments Other Maximum net credit risk as of balance sheet date (*) 337.579 43.096.501 175.929.834 6.148.929 163.440.620 - - - The part of maximum risk under guarantee with collateral etc. (**) - - - - - - - A. Net book value of financial assets that are neither past due nor in paired 337.579 43.096.501 175.929.834 6.148.929 163.440.620 - - B. Book value of restructured otherwise accepted as past due and impaired financial assets - - - - - - - C. Carrying value of financial assets that are past due but not impaired - the part under guarantee with collateral etc. - - - - - - - D. Impaired asset net book value - Past due (gross amount) - - - - - - - - Impairment (-) - - - - - - - - Net value collateralized or guaranteed part of net value - - - - - - - - Not over due (gross amount) - - - - - - - - Impairment (-) - - - - - - - - Net value collateralized or guaranteed part of net value - - - - - - - E.Off-balance sheet items bearing credit risk - - - - - - - (*) Components of credibility such as guarantees taken are not considered in determining the amount. (**) Guarantees are consist of collaterals taken from shareholders. 62 131

NOTES TO THE AUDITED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2011 (Amounts are expressed in Turkish Lira (TL) unless otherwise stated) 38. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (cont d) b.1) Credit risk management Credit risks of financial instruments 31 December 2010 Trade Receivables Related Party Third Party Receivables Related Party Third Party Other Receivables Deposits in Banks Türev Araçlar Other Maximum net credit risk as of balance sheet date (*) - 1.423.288 152.600.486 1.116.431 316.616.658 - - - The part of maximum risk under guarantee with collateral etc.(**) - - - - - - - A. Net book value of financial assets that are neither past due nor in paired - 1.423.288 152.600.486 1.116.431 316.616.658 - - B. Koşulları yeniden görüşülmüş bulunan, aksi takdirde vadesi geçmiş veya değer düşüklüğüne uğramış sayılacak finansal varlıkların defter değeri - - - - - - - C. Carrying value of financial assets that are past due but not impaired - the part under guarantee with collateral etc. - - - - - - - D. Değer düşüklüğüne uğrayan varlıkların net defter değerleri - Vadesi geçmiş (brüt defter değeri) - - - - - - - - Değer düşüklüğü (-) - - - - - - - - Net değerin teminat, vs ile güvence altına alınmış kısmı - - - - - - - - Vadesi geçmemiş (brüt defter değeri) - - - - - - - - Değer düşüklüğü (-) - - - - - - - - Net değerin teminat, vs ile güvence altına alınmış kısmı - - - - - - - E. Bilanço dışı kredi riski içeren unsurlar - - - - - - - (*) Components of credibility such as guarantees taken are not considered in determining the amount. (**) Guarantees are consist of collaterals taken from shareholders. 63 132 SAF GYO 2011 Annual Report FıNANCIAL TABLES AND NOTES

NOTES TO THE AUDITED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2011 (Amounts are expressed in Turkish Lira (TL) unless otherwise stated) 38. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (cont d) b.1) Credit risk management (cont d) Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss to the Group. The Company has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral where appropriate, as a means of mitigating the risk of financial loss from defaults. The Company s exposure and the credit ratings of its counterparties are continuously monitored. Credit exposure is controlled by counterparty limits that are reviewed and approved by the risk management committee annually. Trade receivables consist of a large number of customers, spread across diverse industries and geographical areas. Ongoing credit evaluation is performed on the financial condition of accounts receivable, the receivables might be insured if necessary. Explanations about the credit quality financial instruments The credit quality of trade receivables which is past due but not impaired, and evaluated according to external rating and internal rating related to past is as follows: Trade receivables 31 December 31 December 2011 2010 Regarding internal sacaling data Group 1 - - Group 2 43.434.080 1.423.288 Group 3 - - Total Trade receivables 43.434.080 1.423.288 Group 1 Customers / related parties with the history of less than 6 months Group 2 - Customers / related parties with the history of more than 6 months and no collection problem. Group 3 - Customers / related parties with the history of more than 6 months and experienced collection problem. 64 133

NOTES TO THE AUDITED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2011 (Amounts are expressed in Turkish Lira (TL) unless otherwise stated) 38. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (cont d) b.2) Liquidity risk management Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has built an appropriate liquidity risk management framework for the management of the Company s short, medium and long-term funding and liquidity management requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities. The following tables detail the Company s remaining contractual maturity for its non-derivative financial liabilities. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay. The possible future cash flows attributable to the instrument are included in the maturity analysis which are not included in the carrying amount of the financial liability on the balance sheet. Liquidity risk table: 31 December 2011 Due date on agreement Carriyg value Cash out flows according to agreements (I+II+III+IV) Less then 3 months Between 3-12 months Between 1-5 yıl (III) Non-derivative Financial Liabilities Bank loans 223.973.180 224.929.707 188.007.203 36.922.504 - Finance Lease obligation 10.491.291 10.870.083 10.066.194-803.889 Trade payables 22.057.240 22.057.240 22.057.240 - - Other payables 4.623.965 4.623.965 2.298.016-2.325.949 Total liabilities 261.145.676 262.480.995 222.428.653 36.922.504 3.129.838 Due date on agreement Carriyg value Cash out flows according to agreements (I+II+III+IV) Less then 3 months Between 3-12 months Between 1-5 yıl (III) Non-derivative Financial Liabilities Bank loans 204.794.465 213.211.233 14.007.990 40.918.070 158.285.173 Trade payables 2.648.167 2.652.637 2.062.071 590.566 - Other payables 2.115.532 2.115.532 437.947-1.677.585 Total liabilities 209.558.164 217.979.402 16.508.008 41.508.636 159.962.758 134 SAF GYO 2011 Annual Report FıNANCIAL TABLES AND NOTES 65

NOTES TO THE AUDITED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2011 (Amounts are expressed in Turkish Lira (TL) unless otherwise stated) 38. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (cont d) b.3) Market risk management The Company s activities expose it primarily to the financial risks of changes in foreign exchange rates. Market risk is assessed with sensitivity analysis and stress scenarios. There has been no change to the Company s exposure to market risks or the manner which it manages and measures the risks. b.3.1) Foreign currency risk management The Company undertakes certain transactions denominated in foreign currencies. Hence, exposures to exchange rate fluctuations arise. The details of the Company s foreign currency denominated monetary and non-monetary assets and monetary and non-monetary liabilities as of balance sheet date are shown below: 66 135

NOTES TO THE AUDITED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2011 (Amounts are expressed in Turkish Lira (TL) unless otherwise stated) 38. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (cont d) b.3.1) Foreign currency risk management(cont d) 31 December 2011 TRY Equivalent (Functional currency) USD EUR Other 1. Trade Receivables 2.222 1.176 - - 2a. Monetary Financial Assets 151.112.792 80.000.419 - - 2b. Non-Monetary Financial Assets - - - - 3. Other 173.591.859 91.901.032 - - 4. Current Assets 324.706.873 171.902.627 - - 5. Trade receivables - - - - 6a. Monetary Financial Assets - - - - 6b. Non-Monetary Financial Assets - - - - 7. Other - - - - 8. Non-Current Assets - - - - 9. Total Assets 324.706.873-171.902.627 - - - 10. Trade payables 659.935 226.616 94.885-11. Financial Liabilities 224.447.359 118.824.373 - - 12a. Other Monetary Financial Liabilities - - - - 12b. Other Non-Monetary Financial Liabilities - - - - 13. Current Liabilities 225.107.294 119.050.989 94.885-14. Trade payables 3.973-1.626-15. Financial Liabilities 803.889 425.586 - - 16a. Other Monetary Financial Liabilities - - - - 16b. Other Non-Monetary Financial Liabilities - - - - 17. Non-Current Liabilities 807.863-425.586-1.626 - - 18. Total Liabilities 225.915.157-119.476.575-96.511 - - 19. Net asset / liability position of - Off-balance sheet derivatives (19a-19b) - - - - 19a. Off-balance sheet foreign - currency derivative assets - - - - 19b. Off-balance sheet foreign - currency derivative liabilities - - - - 20. Net foreign currency asset liability position (9-18+19) 98.791.716-52.426.052 - (96.511) - - - 21. Net foreign currency asset / liability - - - - position of monetary items (1+2a+5+6a-10-11-12a- 14-15-16a) 98.791.716-52.426.052 - - - 22. Fair value of foreign currency - hedged financial assets - - - - 23. Exports - - - - 24. Imports - - - - 136 SAF GYO 2011 Annual Report FıNANCIAL TABLES AND NOTES 67

NOTES TO THE AUDITED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2011 (Amounts are expressed in Turkish Lira (TL) unless otherwise stated) 38. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (cont d) b.3.1) Foreign currency risk management(cont d) 31 December 2010 TRY Equivalent (Functional currency) USD EUR Other 1. Trade Receivables 38.469 24.883 - - 2a. Monetary Financial Assets 123.697.556 80.011.356 - - 2b. Non-Monetary Financial Assets - - - - 3. Other 22.009.262 14.236.263 - - 4. Current Assets 145.745.287 94.272.501 - - 5. Trade receivables - - 6a. Monetary Financial Assets 6b. Non-Monetary Financial Assets 7. Other 140.948.289 91.169.657 - - 8. Non-Current Assets 140.948.289 91.169.657 - - 9. Total Assets 286.693.576 185.442.158 - - 10. Trade payables 689.878 446.234 - - 11. Financial Liabilities 54.926.060 35.527.853 12a. Other Monetary Financial Liabilities - - - - 12b. Other Non-Monetary Financial Liabilities - - - - 13. Current Liabilities 55.615.939 35.974.087 - - 14. Trade payables 15. Financial Liabilities 149.475.495 96.685.314 - - 16a. Other Monetary Financial Liabilities - - - - 16b. Other Non-Monetary Financial Liabilities 2.261.882 1.463.054 - - 17. Non-Current Liabilities 151.737.377 98.148.368 - - 18. Total Liabilities 207.353.315 134.122.455 - - 19. Net asset / liability position of Off-balance sheet derivatives (19a-19b) - - - - 19a. Off-balance sheet foreign currency derivative assets - - - - 19b. Off-balance sheet foreign currency derivative liabilities - - - - 20. Net foreign currency asset liability position (9-18+19) 79.340.261 51.319.703 - - 21. Net foreign currency asset / liability position of monetary items (1+2a+5+6a-10-11-12a- 14-15-16a) 79.340.261 51.319.703 - - 22. Fair value of foreign currency hedged financial assets - - - - 23. Exports - - - - 24. Imports - - - - 68 137

NOTES TO THE AUDITED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2011 (Amounts are expressed in Turkish Lira (TL) unless otherwise stated) 38. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (cont d) b.3) Market risk management (cont d) b.3.1) Foreign currency risk management (cont d) Foreign currency sensitivity The Company is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the US Dollars. The following table details the Company s sensitivity to a 10% increase and decrease in the US Dollars.10% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management s assessment of the possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated items and adjusts their translation at the period end for a 10% change in foreign currency rates. The sensitivity analysis includes external loans as well as loans to foreign operations within the Company where the denomination of the loan is in a currency other than the currency of the lender or the borrower. A positive number indicates an increase in profit or loss. 138 SAF GYO 2011 Annual Report FıNANCIAL TABLES AND NOTES 69

NOTES TO THE AUDITED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2011 (Amounts are expressed in Turkish Lira (TL) unless otherwise stated) 38. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (cont d) b.3) Market risk management (cont d) b.3.1) Foreign currency risk management (cont d) Foreign currency sensitivity 31 December 2011 Profit / Loss Equity Valuation of Devaluation of Valuation of Devaluation of foreign currency foreign currency foreign currency foreign currency In the case of US Dollar gaining 10% value against TRY 1 - US Dollar net asset / liability 9.879.172 (9.879.172) - - 2 - Portion hedged against US Dollar risk (-) - - - - 3 - US Dollar net effect (1 +2) 9.879.172 (9.879.172) - - In the case of EUR gaining 10% value against TRY 4 - EUR net asset / liability - - - - 5 - Portion hedged against EUR risk (-) - - - - 6 - EUR net effect (4+5) - - - - In the case of Other foreign currencies gaining 10% value against TRY 7 - Other foreign currencies net asset / liability - - - - 8 - Portion hedged against Other foreign currencies risk (-) - - - - 9 - Other foreign currencies net effect (7+8) - - - - TOTAL (3 + 6 +9) 9.879.172 (9.879.172) - - 70 139

NOTES TO THE AUDITED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2011 (Amounts are expressed in Turkish Lira (TL) unless otherwise stated) 38. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (cont d) b.3) Market risk management (cont d) b.3.1) Foreign currency risk management (cont d) Foreign currency sensitivity 31 December 2010 Profit / Loss Equity Valuation of Devaluation of Valuation of Devaluation of foreign currency foreign currency foreign currency foreign currency In the case of US Dollar gaining 10% value against TRY 1 - US Dollar net asset / liability 7.934.026 (7.934.026) - - 2 - Portion hedged against US Dollar risk (-) - - - - 3 - US Dollar net effect (1 +2) 7.934.026 (7.934.026) - - In the case of EUR gaining 10% value against TRY 4 - EUR net asset / liability - - - - 5 - Portion hedged against EUR risk (-) - - - - 6 - EUR net effect (4+5) - - - - In the case of Other foreign currencies gaining 10% value against TRY 7 - Other foreign currencies net asset / liability - - - - 8 - Portion hedged against Other foreign currencies risk (-)- - - - 9 - Other foreign currencies net effect (7+8) - - - - TOTAL (3 + 6 +9) 7.934.026 (7.934.026) - - 71 140 SAF GYO 2011 Annual Report FıNANCIAL TABLES AND NOTES

NOTES TO THE AUDITED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2011 (Amounts are expressed in Turkish Lira (TL) unless otherwise stated) 39. FINANCIAL INSTRUMENTS Loans and Available Financial liabilities 31 December 2011 receivables (*) for sale at amortized cost Carrying value Note Financial assets Cash and cash equivalents 213.342.342 - - 213.342.342 6 Trade receivables 43.096.501 - - 43.096.501 10 Due from related parties 176.267.413 - - 176.267.413 11 Other financial assets 6.148.929 14.400.000-20.548.929 7, 11 Financial liabilities Borrowings - - 223.973.180 223.973.180 8 Trade payables - - 21.882.988 21.882.988 10 Due to related parties - - 254.202 254.202 10, 11 Other financial liabilities - - 248.360.487 248.360.487 11, 26 Loans and Available Financial liabilities 31 December 2010 receivables (*) for sale at amortized cost Carrying value Note Financial assets Cash and cash equivalents 316.736.405 - - 316.736.405 6 Trade receivables 1.423.288 - - 1.423.288 10 Due from related parties 152.600.486 - - 152.600.486 11 Other financial assets 1.116.431 - - 1.116.431 7, 11 Financial liabilities Borrowings - - 204.794.465 204.794.465 8 Trade payables - - 2.300.274 2.300.274 10 Due to related parties - - 368.141 368.141 10, 11 Other financial liabilities - - 525.623.966 525.623.966 11, 26 (*)The Company management believes that the carrying values of its financial instruments, except from available for sale investments, reflect their fair values. 72 141

NOTES TO THE AUDITED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2011 (Amounts are expressed in Turkish Lira (TL) unless otherwise stated) 40. EVENTS AFTER THE BALANCE SHEET DATE The registered address of the Company is changed as Ankara Devlet Yolu Haydarpaşa Yönü 4. Km. Çecen Sokak Acıbadem, Üsküdar, as of 21 February 2012. Independent parts numbered 136-137-138 of investment property in kind of Office building in İstanbul, Şişli, Mecidiyeköy 311 plot 2013 block ve 85 parcel stated in the portfolio of the Company is sold and the paid in cash amounting to 1.650.000 TL + VAT on 3 February 2012 and title assignation is completed on 2 February 2012. 41. OTHER ISSUES THAT SIGNIFICANTLY AFFECT THE FINANCIAL STATEMENTS OR OTHER ISSUES REQUIRED FOR THE CLEAR UNDERSTANDING OF FINANCIAL STATEMENTS RESTATEMENT OF PREVIOUS YEAR FINANCIAL STATEMENTS Company restated its financial statements as of 31 December 2010 as given the details below: 31 December 2010 Previously reported Restatement Restated Other current trade receivables (1) 22.590.924 (21.608.246) 982.678 Other non-current trade receivables (1) 46.356.779 (45.916.169) 440.610 Inventories (4) 142.797.741 6.127.660 148.925.401 Investment properties (2) 207.002.073 (135.842.738) 71.159.335 Tangible assets (3) 6.585.224 782.678 7.367.902 Due to other short term related party balances(1) (255.428.825) (21.608.246) 233.820.579 Deferred tax assets / (liabilities) (26.162.047) 28.065.116 1.903.069 Other non-current liabilities (1) (318.961.732) 45.916.169 (273.045.563) Retained earnings 18.854.631 (158.594) 19.572.854 (1) In 2010, the Company accounted for notes received for unrealized residence sales in the Trade Receivables account in the assets column, and in the Advances Received account in the liabilities column under the balance sheet. Notes received for unrealized residence sales were written off against the balance sheets accounts. (2) In 2008, Saf Gayrimenkul Geliştirme İnşaat ve Ticaret A.Ş. s land on which residence projects in Akasya Göl, Akasya Koru and Akasya Kent and investment properties in the Akasya Kent project related to the Acıbadem Akasya Evleri Project was constructed on was valued using the fair value method but in 2010, the Company reversed the valuation of all projects except for the Akasya Kent land and the related land was carried at historical cost. The valuation on the land where investment properties were constructed in Akasya Kent was also cancelled in the current period. (3) The Company s school construction on the Akasya Acıbadem plot since 2010, which is classified as ongoing investments, is transferred to expense accounts in the current period. The related adjustment had been made in 2010 and TL 158.594 was recognized as expense in the financial statements. (4) Interests applied for murabahah loans expensed in prior periods are capitalized. 142 SAF GYO 2011 Annual Report 73 FıNANCIAL TABLES AND NOTES

NOTES TO THE AUDITED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2011 (Amounts are expressed in Turkish Lira (TL) unless otherwise stated) 42. CONTROL ON COMPLIANCE WITH PORTFOLIO LIMITATIONS Non-Consolidated (Standalone) Financial Tables Main Regarding Arrangements Accounts Current Period (TL) Previous Period (TL) A Financial instruments Serial: VI, No:11, Item 27/(b) 125.438.410 8.498.294 B Investment properties, projects on investment properties, rights on investment properties Serial: VI, No:11, Item 27/(a) 286.282.836 71.159.335 C Investments Serial: VI, No:11, Item 27/(b) 14.400.000 0 Receivables from related parties (non trade) Serial: VI, No:11, Item 24/(g) 175.929.834 20.487.760 Other Assets 345.643.550 670.019.949 D Total Assets Serial: VI, No:11, Item 4/(i) 947.694.630 761.667.044 E Financial liabilities Serial: VI, No:11, Item 35 223.973.180 204.794.465 F Other financial liabilities Serial: VI, No:11, Item 35 G Financial leasing Serial: VI, No:11, Item 35 10.491.291 0 H Payables to related parties (non trade) Serial: VI, No:11, Item 24/(g) 17.044.020 18.360.373 I Shareholder's equity Serial: VI, No:11, Item 35 437.021.444 26.368.558 Other liabilities 259.164.695 512.143.648 D Total Liabilities Serial: VI, No:11, Item 4/(i) 947.694.630 761.667.044 Non-Consolidated (Standalone) Other Financial Information Regarding Arrangements Financial instrument held for the 3 years payment of investment properties Serial: VI, No:11, Item 27/(b) Current Period (TL) Previous Period (TL) A1 A2 Time / demand TL / foreign currency Serial: VI, No:11, Item 27/(b) 87.903.932 316.736.405 A3 Foreign financial instruments Serial: VI, No:11, Item 27/(c) B1 Foreign investment properties, projects on investment properties, rights on investment properties Serial: VI, No:11, Item 27/(c) B2 Idle land Serial: VI, No:11, Item 27/(d) C1 Foreign investments Serial: VI, No:11, Item 27/(c) C2 Investment on the operating company Serial: VI, No:11, Item 32/(a) J Non-cash borrowings Serial: VI, No:11, Item 35 3.013.405 29.820 K Mortgages on land which a project will be developed and the ownership is not hold by the Company Serial: VI, No:11, Item 25/(n) 74 143

NOTES TO THE AUDITED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2011 (Amounts are expressed in Turkish Lira (TL) unless otherwise stated) 42. CONTROL ON COMPLIANCE WITH PORTFOLIO LIMITATIONS Current Period (TL) Previous Period (TL) Min./Max. Ratio Regarding Arrangements Portfolio Limitations 1 Mortgages on land which a project will be developed and the ownership is Serial: not hold VI, No:11, by the Item Company 25/(n) 0% 0% 10% 2 Investment properties, projects on investment properties, rights on investment Serial: properties VI, No:11, Item 27/(a),(b) 30% 9% 50% 3 Financial instruments and investments Serial: VI, No:11, Item27/(b) 15% 0% 50% 4 Foreign investment properties, projects on investment properties, rights on investment properties, investments, financial instruments Serial: VI, No:11, Item 27/(c) 0% 0% 49% 5 Idle land Serial: VI, No:11, Item 27/(d) 0% 0% 20% 6 Investment on the operating company Serial: VI, No:11, Item 32/(a) 0% 0% 10% 7 Borrowing limits Serial: VI, No:11, Item 35 54% 777% 500% 8 Time / demand TL / foreign currency Serial: VI, No:11, Item 27/(b) 9% 42% 10% After the communique Serial VI No:29 has been effective at 28 July 2011, which has amended communique Serial VI No:11 Principles Regarding Real Estate Investment Trusts, beginning from 30 September 2011 financial statements, the preparation of portfolio tables is abolished and with the resolution of Capital Market Board Function No 34/972 dated 14 October 2011 all the information is disclosed as Additional Note, The Control on Compliance With Portofolio Limitations The information in the Control on Compliance With Portofolio Limitations table is prepared in accordance with communique Serial VI No:11 Principles Regarding Real Estate Investment Trusts decisions which are in relation with control on compliance with portofolio limitations.. 75 144 SAF GYO 2011 Annual Report FıNANCIAL TABLES AND NOTES

www.safgyo.com