Corporate Social Responsibility Report 2008 Contents

02 Message from the Chairman Message from the CEO of the Ko Group 04 06 Scope of the Report Values of the Ko Group 07 08 Creating Value at Ko R&D and Innovation at Ko 10 18 Social Responsibility at Ko Group Respect for Human Rights at Ko Group 32 38 Working Environment at Ko Group Environmentally-Friendly Practices of Ko Group 50 66 Ethical Values at Ko The Global Compact 69 THE KO‚ GROUP 01 CORPORATE SOCIAL RESPONSIBILITY REPORT 2008

We, Ko Group, with all our people, aspire to ensure customer satisfaction and sound growth by providing products and services of universal quality and standards. We are committed to being a symbol of trust, continuity and esteem for our country, customers, shareholders, dealers, and suppliers. Message from the Chairman

We regard corporate social responsibility as an indispensible part of our business approach, in line with the conscience transmitted to us by the late Vehbi Ko.

Distinguished Shareholders,

In the era of globalization, even though there are still humanity, the coming generations, and for ourselves as geographic boundaries, economic boundaries no longer well. exist. Developments in one country affect another country on the other side of the world with unprecedented speed. During this difficult crisis period that, we, the Ko Group, The latest example is the financial crisis originating in the continue to be a driving force forwards economic U.S.A. and causing turbulence in all economies around development with domestic investments, steps towards the world in a very short time. developing new sectors of production, and our globally known brands. In 2008, with our consolidated revenues The global crisis is affecting the entire world economically, of USD 43 billion, we became the 186th largest company politically and socially. The crisis causes people to shy in the world. With our exports worth USD 14.2 billion and away from expenditures for consumer goods. The situation investments of USD 1.6 billion, we continue, as in the triggers a vicious cycle. However, ending the crisis is past, to be a locomotive of economic development in our dependent on the psychological factor of restoring a country. sense of trust and security. With more than 70,000 employees, we are trying to For companies developing a plan to deal with the crisis, develop the best solutions and bring the best results for the first step is to take measures towards a more efficient our shareholders without losing our belief in the growth use of resources. Speaking about a better use of potential of our country, and our focus on the future. resources, of course, first brings to mind cutting expenses. But, it is necessary to approach the issue from a broader On the other hand, in all of our fields of activity, we act perspective, thinking about our activities with a view to in accordance with a consciousness of responsible improve and transform operations aiming for sustainability. citizenship, as framed by the UN Global Compact This may lead us out of the global economic crisis as principles, which we signed in 2006, and continue to well as out of the global climate crisis. uphold. We are aware that education plays a very important role in developing social consciousness. Ko University Making better use of resources is not only a duty of signed the principles on November 12, 2007. We are responsible management: It is also a duty of reasonable also very pleased that the Faculty of Economics and citizenship. We believe that being more careful while Administrative Sciences signed the Principles for using resources that the world is offering us is a reflection Responsible Management Education on December 3, of the respect we hold for our world, the environment, 2008. Ko University has thus hereby pledged that the education will be delivered in line with the principles of Anniversary has made it possible for us to put into practice sustainability and corporate citizenship. a synergy among all of our employees. This synergy turned into a giant step last year when we decided to We, as the Ko Group, with awareness for social concentrate all efforts on the environment by creating 02 responsibility as taught us by Vehbi Ko, regard corporate seven forests across the country. 03 social responsibility as an indispensible element of our business strategies. With our investments in the fields of Environmental challenges require a coherent approach education, health care, culture and arts, and ecology, we ranging from the protection of natural resources to the are taking care to contribute to the development of our minimization or elimination of waste at its source. country. We, the Ko Group, continuously improve environmental In the field of education, our project ÒVocational Education: standards, not only through our social responsibility A Crucial Matter for the NationÓ, which is supported by projects, but in all of our fields of activity. 21 of our companies, the Ko University and the Vehbi Ko Foundation, has been going on for two full years While signing the Global Compact Principles, we aimed now, and already entered its third year. We understand to share this new culture of both doing business and the relevance of the financial support we provide our furthering social responsibility awareness- not only within students from 81 cities through the feedback we our own corporation, but also our surroundings and constantly receive, and we are excited to see them as among our shareholders. Today, we are proud and happy young participants in the working world, professionals to set an example of corporate citizenship by acting producing surplus value. together with our distributors, suppliers and all the employees of our Group, for the benefit of our country We, the Ko Group, know that we can only proceed and and our world. improve as far as we contribute to the progress part of our community. This is why we are striving to share our Respectfully yours, understanding of social responsibility with our business partners and shareholders, and within our sphere of influence. Mustafa V. Ko The project ÒFor My CountryÓ that we started on our 80th Chairman, Board of Directors Message from the CEO of the Ko Group

Our long standing focus on both high quality in business operations and projects is reflected in our corporate citizenship approach and in matters of social responsibility. We produce added value for the world and our country in the social field as well.

Distinguished Shareholders,

As globalization brings to the fore increased competition, as he did, in our business processes as well as with our we continue to rank as our first priority the sustainability support for social life. of our social and economic leadership. It is inevitable for corporations to go through change if they want to survive We are constantly improving our corporate structure, in the global system. Change is not only about redefining our activities and our understanding of social existing rules; it is also about making new rules. This is responsibility as reflected in our projects. We have the only way for corporations and even for countries to also reflected in our operations the approach of the remain ahead of the times and survive, thus contributing UN Global Compact, which we signed in 2006. Within further value creation. this context, we created a portal where we can carefully observe data on the application of these principles In 2008, we, the Ko Group, expressed our core goal of worldwide and to improve our operations constantly. leading in all fields under the concept of ÒChangeÓ. In accordance with our strategy of focusing, we departed In the 21st century, societies and populations face ways with several of our companies. We invested in new more complicated problems than in the past. The projects which increased our profits and efficiency. During global crisis we are going through clearly shows us 2008, the deep impact of the economic crisis made itself that a problem occurring somewhere else affects not felt in all fields. By implementing far-sighted institutional only the region where it emerges, but with a domino approaches, we have improved managerial quality and effect, impacts the entire world. Solving those problems risk management. As a result, we have sustained our requires an outlook that is not only broad, but also strong financial stance as well as the trust and credibility creative. we earned in the financial markets during 2008 when the crisis deepened. As major drivers of competitive edge and instruments of change that drive societies forward, R&D and In 2009, we are celebrating the 40th Anniversary of the innovation are of utmost importance for Ko Group Vehbi Ko Foundation, one of the first of its kind founded with its determination to remain a leading force. by the founding father of our corporation, the late Vehbi Ko, with an aim to institutionalize social support and The investments of our companies in research, product welfare projects. Looking at 2008 from the perspective development and new product and service innovations of these 40 years, we were proud to see that we still apply and solutions are of great significance. Developments the principle we inherited from Vehbi Ko, ÒI live and achieved as a result of these serve to increase the prosper with my countryÓ, with the same accountability competiveness of our country. The Ko Group aims to increase the added-value it citizenship. In cooperation with the Environment and provides to the country's economy and contributes a total Forestry Ministry and the TEMA Foundation, we created of almost 20% of the spending by the private sector on resources for the planting of 700,000 saplings, covering research and product development. Ko Group regards an area of 1,750 football fields and in all seven regions innovation to be one of the main forces pushing social of Turkey. Our efforts for the sake of the environment not and economic development ahead. We are introducing being limited to this project, we intend to continue such in this report our activities in this field during the previous educational and awareness-building efforts in our country. year. Ko Group companies received 12 certificates this year for R&D centres. In the report, we are also informing One of our most valued activities on matters of social our shareholders about best-practice applications and responsibility is improving the educational system of our new developments taking place in this regard. country, and in so doing, increasing the rate of, employment. One of the most important problems of the 21st century 04 is global warming. Solving this problem requires One of the important projects we have started in this field 05 cooperation among nations and corporations. that is improving day by day under the guidance of our companies is the ÒVocational Education: A Crucial Matter Ko Group aims to contribute its share towards solving for the NationÓ project. This project, through the support the problem, and has developed a strong sensitivity of the Ko Foundation, has been a focus of hope for our towards global warming. We are re-forming our product youngsters in a time when the global crisis is causing range and our work processes in this context. We are huge increases in unemployment. This project provides informing you about our efforts on this question in the educational funds, supported with training possibilities following pages of this report. At the Copenhagen Meeting for 8,000 students engaged in vocational studies in 262 that is to take place this year, which is a milestone in the schools and 81 cities. Services provided include coaching application process of the Kyoto Protocol, important and personal development courses. decisions will be made concerning global warming and greenhouse gas emissions. We, the Ko Group, are In line with our understanding of corporate citizenship, decisive about making a thorough analysis of how the we demonstrate that our high standards, well-known in results of this meeting would affect us and subsequently business life, are also set here in matters of social carrying out the necessary re-structuring work. responsibility. We, the Ko Group, continue producing added-value for the world and for our country in the social At this point, it is urgent that we develop an individual arena as well. and corporate awareness and sensitivity toward these problems, accept them as our own, and thus become Respectfully yours, part of the solutions.

With this understanding in mind, in 2008 we focused our work within the framework of the ÒFor My CountryÓ project Dr. BŸlent Bulgurlu that has been going on for the last three years, with the Ko Holding aim of increasing awareness of responsible environmental CEO - Member of the Board Scope of the Report

Ko Group aims to ensure customer satisfaction and sound growth by providing products and services of universal quality and standards. To this end, the companies are committed to being a symbol of trust, continuity and esteem for our country, customers, shareholders, dealers, and suppliers.

In line with our social sensitivity, our second Corporate Social Responsibility Report has been prepared, as was the previous one, in order to share with the public our activities accomplished in cooperation with our stakeholders: helping individual development, playing a role in the development of the local economy, pioneering in the protection of the environment, and rendering the Group's economic development sustainable.

In addition to the projects undertaken by Ko Holding, the report includes the activities of the foundations within the Group. The report covers the economic, social and environmental projects of Group companies Arelik, Aygaz, Ford Otosan, Tat, Opet, Otokar, Tofaß, TŸrk Traktšr, TŸpraß and YapÝ Kredi. This group of companies represents 72.9% of the Group's employees and 84% of the Group's revenues.

Our first Corporate Social Responsibility Report was PROJECTS INCLUDED issued in March 2008, covering the activities from IN THE REPORT 2006 and 2007. This year, we are bringing out the ¥ Projects undertaken by Ko Holding second report which includes our activities during ¥ Joint work undertaken by the Vehbi Ko Foundation, its 2008. This report is also a ÒCommunication on affiliates and NGOs supported by the Group ProgressÓ, in accordance with the UN Global Compact, ¥ Projects and best practices by Group companies Arelik, Aygaz, Ford Otosan, Opet, Otokar, Tat, Tofaß, TŸpraß, TŸrk in which we state the progress made in our long-term Traktšr, YapÝ Kredi projects during this period. In 2008, a portal was established to collect related data from the companies involved. The data collected is also included in this www.koc.com.tr report. Each year, we are continuing our work to support Our Corporate Social Responsibility Report may be accessed a more systematic data base. on our website.

Information about all of our activities may be accessed [email protected] primarily on the website www.koc.com.tr, but the Our e-mail address for feedback, suggestions and comments. websites of our companies and foundations may also be consulted. Our Corporate Social Responsibility *The total number of employees of the Ko Group is 73,677, Report is available in pdf format from www.koc.com.tr of which 53,114 are employed in companies that are involved in the projects mentioned in this report as of end 2008. Contact us at [email protected] to send your feedback, suggestions and comments. Values of the Ko Group

ÒThis is my code: We, at Ko Group, aspire to ensure customer satisfaction I live and prosper with and sound growth by providing products and services of universal quality and standards. We are committed to my country. As long as being a symbol of trust, continuity and esteem for all our democracy exists stakeholders: our customers, shareholders, dealers, and and thrives, so do we. suppliers. We shall do our utmost to Our customers are the focus of everything we do. Our top priority is to create value for our customers; to strengthen our economy. respond promptly to their expectations with quality. It is As our economy prospers, so our duty to take responsibility for our products for the will democracy, and our long term. standing in the world.Ó To be Òthe bestÓ is our ultimate goal. To be the best in quality, service, supplier, and dealer VEHBÜ KO‚ relationships; to offer the best investment opportunity for our shareholders; and to sustain this reputation are our primary goals. To achieve these goals we are committed to managing our businesses to be the leader in the market. Our most important asset is our people. The quality of our products and services is based on the quality of our people. For the continuity of Ko Group, we follow a policy of recruiting the best people, and 06 providing opportunities for development and 07 advancement. To fully utilize the talents, strength, and creativity of our people, we create a work environment which nourishes increased productivity, cooperation, and solidarity. Creation of wealth for continuous development is our key objective. Creating value for our shareholders is a guiding principle to assure continuity of service, investments in the future and to encourage and leverage small and large savings; and allocating resources from our operations to create value and to ensure efficient utilization of all resources with a view to support the economic and social development of our people and our society are our key objectives. Honesty, integrity, and superior business ethics are the foundations of our business conduct. We conduct our business based on good intentions, mutual benefit, and fair treatment in all our relationships. We are committed to conforming at all times to the highest ethical and legal standards. We are a leader in serving our society and safeguarding the interests of future generations. Protection of the environment and promotion of a higher level of environmental awareness are our duty to both our country and our planet. Creating Value at Ko

ÒIf you are ambitious and talented, and if you choose your direction correctly, you can easily achieve your goals.Ó Rahmi M. Ko

Leading in matters of corporate social responsibility

¥ In line with the ÒI live and prosper with my countryÓ motto of Vehbi Ko, the Ko Group and companies provide support to social development in Turkey, especially in the fields of education, arts and culture, and health.

¥ Vehbi Ko Foundation speeds up the rapid development of Turkey through the institutions it manages in the fields of education, arts and culture, and health, through the projects it supports, and through the regular programs it has been conducting.

¥ In 2006, the Ko Group was the first Turkish firm to sign the UN Global Compact, so proving its overall commitment to social responsibility and social consciousness internationally and officially.

¥ In all of our workplaces throughout Turkey, the foundation day of Ko Holding is celebrated as ÒFor My CountryÓ day, and on each anniversary, employees and distributors volunteer to contribute to social responsibility campaigns in various areas. ¥ The ÒVocational Education: A Crucial Matter for the NationÓ project aims at supporting young and successful primary school graduates with limited economic means in order that they can enjoy a solid education in fields related to industry, information technologies and the service sector. ¥ The companies of the Group run their own corporate social responsibility projects and support NGOs, thus further advancing social networks in Turkey. Contribution to Turkish Economy 08 Ko Group: 09 ¥ With 74.000 employees in 28 countries, aims to strengthen the Turkish economy, the source from which it derives its strength.

¥ Has a consolidated turnover equal to 9% of Turkey's national income (as of 3rd quarter 2008).

High Added-Value ¥ Total exports make up 11% of Turkey's total exports. Ko Holding and the Group companies: ¥ Being Turkey's biggest group, the best alternative for those planning to invest in the high potential of growth in our country at ¥ Trade value makes up 13% of the total trade value the Istanbul Stock Exchange of companies on the Istanbul Stock Exchange (as of end 2008) ¥ Portfolio structure resistant to economic fluctuations and risks ¥ Sustainable profit and increasing shareholder value ¥ Only Turkish company on the Fortune 500 List (ranked 186 by ¥ Experienced an annual growth rate of 31% end of 2007) between 2003 and 2008 ¥ Ranked 49 among European companies according to Handelsblatt (by end of 2006) ¥ Includes 5 out of the top 10 on the list of the Ò500 ¥ First Turkish company on the preferred list of companies of the Largest Industrial Companies of TurkeyÓ, according world in a report issued by the Hay Group in cooperation with to an Istanbul Chamber of Commerce (ISO) report. Fortune magazine ¥ Reported for the past 4 years among the 3 top companies in ¥ The first Turkish company to enter the global list Turkey for transparency in the Turkish Transparency and Disclosure of the thousand companies that allocate the highest Research report by the SabancÝ University Corporate Management share of their resources for R&D. Forum and Standard & Poor's (S&P) R&D and Innovation at Ko

Through intensive R&D and innovation work Ko Group companies are pioneers in technology and product development, always with an eye on sustainable development.

In the Ònew world orderÓ, in which global thinking will dominate, corporations will need to keep up with change and secure sustainable growth. By incorporating new technologies and investing in R&D and innovation, companies can remain competitive. The creation of new products, services and solutions is the only way to make substantial expansions in marketing, sales and operations.

In Turkey, the percentage of total expenditures spent on R&D has increased from 0.53% in 2002 to 0.71% in 2007. Our country ranks 35th in total R&D funding. Although this rate is 1.76% in the EU, between 2002 and 2007, Turkey achieved an 119% increase. Such a dramatic expansion places Turkey second only to China with regard to increasing rates of R&D investment. According to the 2005-2010 National Science and Technology Application Plan, one of the main goals is to increase the total percentage of R&D spending to reach 2% by 2013. Another goal is to increase the number employed in this field from 49,668 in 2007 to 150,000 by 2013. The private sector pays for 41.3% of R&D spending, almost half of the total in this country.

In order to grow and secure sustainable profits, one of Ko Holding's most important priorities is Òto dominate the field of new technologiesÓ. In other words, to become an agent for chance - an active leader rather than a follower. Such a policy is the key to Ko Holding's enduring success. Through intensive R&D and innovation work, Ko Group companies have become the pioneers for sustainable growth with regard to technology and product development. Ko Group's expenditures on KO‚ GROUP R&D SPENDING NUMBER OF EMPLOYEES IN R&D IN KO‚ GROUP

100 2,500 600 2275 90 Number of Employees in R&D in Ko Group 2031 500 80 2,000 1740 400 70 1609 60 1,500 300 1325 50 52 Million TL 200 40 42 44 1,000 37 100 30 37 Total R&D employees

Number of employees with PhD 20 500 0 2002 2003 20042005 2006 2007 2008 10 0 0 All companies 20042005 2006 2007 2008

R&D comprise 15-20% of the total amount spent on R&D Total R&D employees R&D employees with PhD by private firms in Turkey. The number of employees in the field of R&D in the Ko Group reached 2,275 in 2008, These new environmentally-friendly designs have also

a number that is increasing substantially every year. helped reduce Arelik's total CO2 emmisions. Since 1995, Arelik refrigerators have been produced with the In order to achieve significant gains in development and hydrocarbon-based gases that cause the least global competition, it is of utmost importance to establish atmospheric damage. Arelik was the only Turkish 10 large R&D centers. For this reason, after close inspection company invited to the World Conference on Climate and control, the Industry and Trade Ministry bestows the Change in Buenos Aires, thanks to the international 11 title of ÒR&D CenterÓ only upon those institutions that acclaim brought by the ÒAB Energy +Ó Award. employ more than 50 employees and conduct their R&D work in line with international standards. Among the Ko Group companies, Arelik has six, Grundig has two, and 2,275 Ko Systems, Tofaß, Ford Otosan and Otokar each have one, for a total of 12 R&D Research Centre Certificates. Number of R&D personnel

In the 2008 report of the ÒEuropean R&D Investment employed in Ko Group. ScoreboardÓ, three Turkish companies were listed among the top one thousand, two of which were Ko Holding and Ford Otosan. In this report, whÝch was based on R&D Currently, Ford Otosan employs more than 500 engineers spending for the year 2007, Ko Holding's current in R&D. Thanks to its engineering strength, Ford Otosan investments in this field were not taken into account. The designed the first heavy duty diesel motor in Turkey, and authors were notified and with its corrected R&D values, then utilized these designs to introduce a cargo truck to Ko Holding holds the 304th ranking among participants the consumer market. These days, Ford Otosan is well from non-European countries. on its way to becoming the ÒGlobal Truck Design CentreÓ of the Ford Company. At its research centre in the Arelik, one of the leading technological innovators in TUBITAK Gebze Free Zone of Technological Research, Turkey, designs environmentally-friendly products in Ford Otosan serves the entire Ford system in designing accordance with global standards. Among these, the diesel motors and transfer organs. energy-efficient refrigerator, the hydro-efficient dishwasher, the high-speed washing machine and dishwasher as well Ford Otosan was the first car company to adapt the as several ÒsilentÓ products have received international R&D concept to the field of product development. The awards. first and only hybrid car in Turkey was designed with Patents acquisitions Ko Group companies completed 254 national, and 172 international patent applications in 2008. The patent by Ko Group portfolio of the Group companies increased to 1,620.

the guidance of the R&D department. Later, the most important components of this vehicle were designed locally. This project has been awarded the European Union Design and Environment Award. Consequently, such work in hybrid transit studies led Otosan to also become one of the most important candidates for the Hybrid Cars R&D Centre of of its partner, Ford.

The R&D department of Tofaß, founded in 1994 with 15 employees, today has a staff of 400 and has turned into an important R&D centre of its partner, Fiat. The company has the most comprehensive automobile testing centre in the country. Tofaß has developed and Ford Otosan Hybrid produced the first Turkish LPG car in accordance with the EU standards that can be mass-produced in Europe. The innovative trunk design of the Albea was developed at the R&D unit of Tofaß. In cooperation with TUBITAK MAM and as its first example in Turkey, a hybrid Doblo vehicle is now a work in progress. The Tofaß R&D unit

R&D and Innovation at Ko now has the capacity to design and test a wholly new vehicle.

Otokar contributes greatly to our country by producing innovative vehicles for the commercial and military sectors. The Ministry of Defense granted Otokar the Arelik 5088 NF Black Orbital Refrigerator and Ecology Dishwasher responsibility for designing and developing the first national tank. At the same time, Otokar continues to provide creative solutions to the rapidly growing mass transit sector, most notably a hybrid bus.

Patent Applications

Arelik holds 13% of patents granted in Turkey and has made 45% of the international patent applications coming from Turkey to the World Intellectual Property Rights Organisation. Arelik holds the 101st position of companies with the most patent applications. Of the 500 firms on the list, it is the only Turkish company included. These efforts greatly strengthen the culture Tofaß R&D Centre of patent rights in Turkey. Aygaz made eight patent applications in 2008, thus bringing its total number of inventions to 13.

Among our other companies that recently applied for patents Arelik LG filed a total of 14 applications between 2007 and 2008, Otokar filed 13, and TŸrk Traktšr FabrikalarÝ filed 20.

Intellectual Property Rights The protection of intellectual property rights is highly important for the growth potential, and longevity of the production centres in Turkey. The term intellectual Arelik washing machine assembly line property rights refers to non-material rights that allow the original inventor to register industrial inventions, NUMBER OF PATENT APPLICATIONS 12 innovations, new designs, original works and trade 13 marks that distinguish particular trade goods or their 250 254 producers, and to have exclusive rights to produce Ko Group Patent Applications and sell the ideas and the products and services that 200 228 186 196 result from them. 172 150 159 144

Ford Otosan's Transit Connect Project is the first 100 111 98 example of its kind in Turkey with regard to intellectual 50 rights concerning a light-duty commercial vehicle. It 49 shares its intellectual rights equally with Ford, and the 0 production is completely realized in Turkey. This project 2004 2005 2006 2007 2008 International Patent Applications National Patent Applications was an important impetus for both Ford Otosan and other automotive companies of the Ko Group in the KO‚ GROUP PATENT PORTFOLIOS process of design, and intellectual rights.

1500 1620 In the Minikargo project the intellectual rights are solely 1366 in the hands of Tofaß and all the R&D work was 357% controlled by Tofaß itself. As a first in Turkey, the export- 1000 oriented production of three international automotive brands - Fiat and the PSA Group's trademarks Citro‘n 735 Nemo and Peugeot Bipper - is carried out here. With an investment of 350 million euros (190 million of which 500 539 are invested in R&D) through the Minikargo project, 354 Tofaß secured an annual production of 165,000 vehicles 0 and provides employment for 2,500 people. During the 2004 2005 2006 2007 2008 project programming process, we cooperated with a Ford Otosan Transit Connect

The Minikargo project, the intellectual rights of which are owned solely by Tofaß, reached a production capacity of 165,000 vehicles, and provides employment for 2,500 people. R&D and Innovation at Ko

number of supplier industries and engineering companies, supporting the development of R&D work among these industries and small companies.

Otokar is active in the field of commercial vehicles as well as the defense industry. It completely controls the intellectual rights, engineering work, design and the various industries. Within this framework, Ko production of a number of its products. Its armoured University, with five different programmes, ranks sixth vehicles are sold in more than 15 countries, and its among the Turkish universities. commercial vehicles are used in more than 30 countries. Otokar obtains 80% of its revenue from vehicles for Ford Otosan succeeded in becoming the first Turkish which it receives patent protection. automotive company to participate in an integrated project in the 6th Framework Programme of the EU, EU Framework Programmes a project called GREEN (Green Heavy Duty Engine), designed to minimize environmentally-harmful The aim of the EU Framework Programmes is to emissions, especially those of carbon dioxide. Through strengthen the standing of science and technology in this project in partnership with Ford Otosan, it will be Europe, to support economic and social integration, possible to develop diesel motors that meet the to increase industrial competitive power globally, to standards set for the year 2012. Turkey has already encourage cooperation between EU member states, decided to adopt EU standards in diesel and petrol and to spur cooperation among the universities and EU framework Since 1984, the EU has been supporting programmes designed to increase the research and technological capacity programmes of the region and trigger economic and social development.

The Arelik R&D Centre has conducted research projects in conjunction with national and international universities, research institutes and standardization organizations.

Arelik has been a partner in research projects on material development and nano-material development during the 5th, 6th and 7th Framework Programmes of the EU. The goal of the current 7th Framework Programme project is to apply electrochromic layers to glass in order to develop innovative product features. 14 Arelik has also been running a EUREKA Project, and 15 several of its project applications for the 7th Framework Programme and the EUREKA programme are still being evaluated.

University-Industry Cooperation The companies of Ko Group make a special point to increase university-industry cooperation by developing R&D projects in conjunction with universities. Currently, Tofaß MiniCargo assembly line almost 100 R&D projects are joint ventures between Ko Group companies and various universities. We are burning vehicles after 2009, and the fuels used in also working on creating new university programmes. these vehicles also need to be adapted to EU standards. Thanks to the GREEN project, Turkey, like Tofaß has again been a pioneer. With the support of many European countries, will also have the Torino Polytechnical University, one of the leading names technological know-how necessary to comply with in its field, Tofaß developed an automotive engineering these standards. master's degree program at UludaÛ University. The program trains new engineers for the automotive industry th As a part of the ÒEuropean Union 6 Framework and provides further education to those already ProgrammeÓ, Tofaß has been one of the 54 partners employeed by the automotive industry. in the ÒVehicle Passive Security Perfection NetworkÓ, and the only partner in this programme coming from Since its founding in 1991, the Arelik R&D Centre Turkey. As a result of this successful project, a ÒVirtual systematically coordinates joint research projects with Passive Security Research InstituteÓ is going to be research institutes and national and foreign universities. established, in which Tofaß will also be a partner. University - industry Many Ko Group companies including Arelik, Ford-Otosan and Tofaß are involved in R&D projects cooperation with various universities. R&D and Innovation at Ko

Research done together with universities in our country and abroad and with the TUBITAK Marmara Research Similar university projects exist in the portfolio of a Centre includes more than 20 projects which are number of Ko Group companies, especially Ford- impressive examples of the process of incorporating Otosan and Tofaß. At Tofaß, universities frequently research into industrial production. More than 150 thesis organize R&D project days. Ford Otosan regularly hosts projects have been inspired by Arelik R&D projects. an international conference on automotive technologies, These students were provided with laboratory and and provides a fertile ground for researchers, and scientific support. The results of these projects have universities to lead discussions on new technologies. been recorded and presented at national and international conferences. At the International Appliance Technical Conference, one of the events where our researchers regularly present papers, the award for the best presentation went to Arelik in 2003, 2004 and 2005. As an agent for change, Arelik occupied second place among private companies providing support to the ÒTurkey's scientific publication mapÓ project, developed in 2008 by ULAKBIM, the National Academic Network and Information Centre of TUBITAK. A valuable contribution to the developing national R&D tradition The Ko Technology Board (KTB)

The Ko Group formed a Technology Board with the aim of spreading its accumulated expertise in the field of R&D and technology, first among the Group and then to the whole country. This board is comprised of all R&D managers of Ko Group, who are all working to meet global R&D standards. The production of the first fuel cell in Turkey began as a joint venture by various companies of the Group and the TUBITAK-MAM centre, with the Technology Board at the helm, coordinating the partnership. The Board is looking forward to organizing further joint projects within the Group as well as with other outside companies. An important contribution is thus being made toward furthering a tradition of R&D partnerships in our country. The Ko Technology Board 16 consists of the R&D managers 17 of the Ko Group and works systematically to reach world R&D standards.

One of the Technology Board's work groups wrote the Ko Technologies and Innovations Handbook. The book describes a system based on the practical experience of Group companies, with contributions from leading universities around the world. Intended to guide companies with little technological knowledge or innovation management experience, hopefully the handbook topics as nanotechnology, laser systems, solar will lead them towards more successful endeavors energy, and environmental, information and in this field. In addition, an innovation index for innovation technologies. This year, it took place companies was created in 2008. This index will on December 29, 2008, and provided information direct the successful structuring and maintenance on topics including smart cars, an energy prognosis of an innovation system. for the year 2030, university-industry relations, the latest developments in biotechnology, and high The Board also organizes a ÒTechnology DayÓ in performance information technology. The order to introduce new fields and technologies to participants led vital discussions on how to run the R&D specialists and managers of our Group. similar projects in Turkey, and how new technology The annual event has included such pressing can be transformed into added value. Social Responsibility at Ko Group

In keeping with the philosophy of our founder Vehbi Ko who said, ÒI live and prosper with my countryÓ, our Group contributes its share to the social progress of Turkey by managing several projects, supporting others, and providing assistance to non-governmental organizations.

Thanks to its well-rooted corporate culture, Ko Group, one of the most socially responsible members of the Turkish business world, continues to support a wide array of social distribution projects every year. Ko Group provided resources for many projects which increased the quality of life in our society while also fulfilling its responsibilities towards its employees, their families and the local population.

Ko Group, keeping in mind its mission to create a Turkey that our future generations will be pleased to inherit, devotes special attention to supporting those projects that have long-term results, create the maximum social good, and have sustainable positive impact.

Our Group invests in meaningful enterprises in the fields of education, culture and arts, and health, projects creating a rich heritage for future generations. Under the motto of our founder Vehbi Ko, ÒI prosper with my countryÓ, our Group contributes to the social development of Turkey by leading and implementing several projects, while also supporting the projects of a number of other foundations and NGOs.

Work of the Vehbi Ko Foundation (VKV) Our founder Vehbi Ko's understanding of social responsibility was part of his determination to lead our society's development in the right direction, and, because of his efforts in this regard, he became the pioneer for non-governmental organizations in Turkey. The Vehbi Ko Foundation (VKV), the first private foundation in the Republic of Turkey, serves society by sponsoring programs related to education, health and culture. Through the institutions in which the foundation occupies leading positions, the projects it supports and its regular programs, VKV strives to support a more rapid growth of Turkey, to set examples for the best and to reap lasting benefits through sustainable and reproducible models. The following is a summary of the 2008 activities of the Vehbi Ko Foundation. Education

The 17 Schools Project: The Foundation built 13 primary Vehbi Ko Foundation American Hospital schools in different regions of Turkey in support of the reorganized eight-year primary educational system on The Ko University Management Education Centre: the occasion of the 75th anniversary of the Republic of VKV's support for Ko University is ongoing. The Ko Turkey. In 2006, with the opening of Istanbul BayazÝt University Istinye Campus, which opened on September Ko Primary School, in 2007 the Kocaeli Ford Otosan 16, 2008, as the Management Education Centre, is situated Primary School, and on October 23, 2008, with the near the Istanbul stock exchange and Istanbul's main KayapÝnarÝ and BaÛlar Ko primary schools in DiyarbakÝr, business centre. The MEC offers professional development the 13 schools project was renamed as the Ò17 Schools programs for managers, master's degree programs and ProjectÓ. management education projects. The campus occupies 2 2 As of 1999, the schools have been turned over to the five blocks in a 4,000 m closed space and 2,500 m . 18 Ministry of Education. However, Ko Group companies open area; it houses three lecture halls, 20 study rooms, 19 continue to provide further services in their respective one large conference hall and guest facilities. regions by contributing to expenses such as maintenance costs. Besides, the private VKV Ko Primary and High Health School hosts regular seminars and professional The restoration of the American Hospital has been development programs for the teachers, guidance completed. The Vehbi Ko Foundation American Hospital personnel and directors of these schools and, within the is a full-fledged health centre providing world-class Ò13 Schools Hand in Hand for DevelopmentÓ project, healthcare to patients from Turkey and neighbouring oversees a network between these and surrounding countries. After the Marmara earthquake in 1999, the schools. complex went through static tests which gave negative results. For this reason the main building dating from 1939 and the 1972 additions were torn down and a new building, erected on an 18,715m2 area, was completed in 2007. The new building houses polyclinics and administrative units on the first and second floors, clinical laboratories and emergency services on the main entrance level, and oncological and radiological polyclinics, workshops, kitchen and dining hall and personnel dressing rooms on the lower floor.

Culture YapÝ Kredi Publications' exhibitions ÒContemporary Art in TurkeyÓ and ÒAdventures in IndependenceÓ:

Ko University Istinye Management Training Centre YapÝ Kredi Cultural Activities, Arts and Publishing opened a new channel of activities in September 2006 with a Social Responsibility at Ko Group Sadberk HanÝm Museum. The museum also published also museum The Museum. HanÝm Sadberk The excellentAnatolianarchives will legacy tothefoundationinorder tokeepherworkalive. woven carpets, kilims, sacks and tents. Powell made her production, andhundredsof uniqueexamplesofhand- textile and agriculture of tools various books, 1,400 of This rich collection includes 40,000 photographs, a library the Vehbi Ko Foundation three months before her death. and sedentarylifethere,donatedherentirecollectionto life to traveling across Anatolia and documenting nomadic VKV. Mrs. Powell, who dedicated the last 30 years of her to entrusted been has Powell Josephine photographer VKV: to donated been has Anatolia of arts the on collection important An by KutluÛAtaman. first exhibitionatTanas,titledÒCubaÓ,comprisedworks The Berlin. in art Turkish contemporary for centre the hosts worksbymodernTurkishartistsandisbecoming support of the Vehbi Ko Foundation. The gallery regularly the with and direction Block's RenŽ under 2008 April heart of Berlin's contemporary art district, was opened in the in Street Heide on located Art, Modern of Gallery Support for the Tanas Arts Gallery in Berlin: monographs abouttheseartists. comprehensive of series a published and Gallery, Art Taßkent K‰zÝm the in artists modern Turkish by works Vehbi KoFoundation, the of support the With TurkeyÓ. in Art ÒContemporary series of monographs and exhibitions under the heading Projects oftheVehbi Ko Foundation YKKSY beganexhibitingoriginal The collection of American of collection The K‰zÝm TaßkentArtGallery be exhibitedatthe The Tanas fundamental necessities of life: education, health and culture. foundation inTurkey,continueditsworktoenhancethe In 2008,theVehbiKoFoundation,firstprivate economic development, increase the level of welfare and problems in our system. In order to carry on with Turkey's important most the among are equity educational and education to access education, quality High system. educational our enhance to is economy global technology-dependent information current our for skills The way to equip our young generations with the requisite Supporting Education University FacultyofLiterature. chairman ofthedepartmentPrehistoryatIstanbul as well as Sciences of Academy National U.S. the and zdoÛan is a member of the Turkish Academy of Sciences Prof. 1980. since led has he which Project, Marmara distinguished himintheworldofscience,isTrakya- which zdoÛan, Prof. of work important most The DaÛlarca in 2005 and, in 2008, to Prof. Mehmet zdoÛan. HŸsnŸ FazÝl 2002, in Palace TopkapÝ the to culture of field the in given was award The culture. and health education, - Foundation Ko Vehbi the of fields service basic the in society our of life of quality the improve to work that institutions or people rewards It Turkey. in been awarded since 2002, and is the largest cash award 2008: in zdoÛan Mehmet Prof. to category CultureÓ of ÒField the in Awarded Vehbi KoAward Collection, KimberlyHart(ed.). Hart (ed.), and Giving Back the Colours-Josephine Powell Collection Kilim rnekleri / Examples from Kilims, Kimberly Powell Josephine 2007: in collection the on books two Photographer JosephinePowellÕscollectionwasdonatedtoVKV The Vehbi Ko Award has Award Ko Vehbi The The Foundation invests in education in various cities, districts and villages in Turkey, supports primary schools and high schools, allocates grants, and provides important contributions to a variety of projects.

Voluntary activities for education provide younger generations with necessary skills and in 2004 in cooperation with the Ministry of Education with knowledge, we have to allocate more funds to education a focus on the personal development of elementary school and hasten educational reform. For this, the contribution children. The project supports the 200,000 children who of the private sector is imperative. attend Regional Primary Education Boarding Schools and successfully reached 179 schools and 130,000 Aware that Turkey's bright future depends on improving students in 43 different cities by the end of 2008. Project 20 academic and vocational opportunities, Ko Group activities are designed to encourage students to become 21 allocates a large part of its corporate social responsibility modern, self-confident individuals. resources towards educational undertakings. Every child has the right to an equitable and high-quality education. The program consists of three components: ÒOur RoomsÓ, Accordingly, the Vehbi Ko Foundation and Group ÒEducation GrantÓ and ÒVoluntary Family AssociationÓ. In companies invest in education in cities, districts and 2008, 179 Òour roomsÓ were furnished with books, toys villages across Turkey, providing sustained support for and other supplementary materials to improve the numerous elementary and high schools while educational experiences of students who live far from simultaneously sponsoring grants and other special their families. Within the framework of this program, the projects. students with top grades at their schools receive scholarships for high school; 530 students made use of The project ÒVocational Education: A Crucial Matter for this funding between 2004 and 2008. ÒVoluntary Family the NationÓ began in 2006 under the lead of Ko Group. AssociationÓ activities and events are those organized by By providing our young people with basic technical and families of Arelik employees and dealers in support of vocational training, we hope to endow them with the students' social and cultural development. capacity to enhance labor quality and productivity in order to meet EU standards in technological In 2008, as a part of the ÒJoining Hearts in Education entrepreneurship, competition and technological with ArelikÓ project, writing, drawing and poetry contests development. were organized around the theme, ÒLet's protect our environment and our natural resourcesÓ. The students' Ko Group companies, as in previous years, contributed work was later published as a book, further spreading to social development by implementing various education awareness about environmental social responsibility. projects this year too. In cooperation with local Ministry of Education boards, Arelik launced the ÒJoining Hearts in EducationÓ project, Aygaz has conducted the ÒCautious Child: Awareness Social Responsibility at Ko Group hlrn Tahr as ne bte acs to access better need also Teachers children. the and families for needed is support psychological and Emotional violence. social and domestic increasing with coping difficulties have Batman in intensive immigration into Batman from villages. Families of result a as communication, inter-family poor and suffer from economic problems, low levels of education The House. Children's Arifiye the for and employees its of Hears a Who! on Children's Day, April 23, for the children Otokar pieces ofofficefurnitureandequipment. 131 of total a as well as each computers 12 received have schools 20 Approximately schools. to equipment and furniture office with along machines photocopy Aygaz students since1996. are the scholarships which have been allocated to 3,000 contributions toeducation,amajor its continue will Opet room. dining a and library a room, computer a hall, sports multi-purpose closed a is there chemistry, and biology physics, for laboratories Besides art. and music are which of two offered, 8,600 m 8,600 EreÛlisi opened. The Opet College, with grounds totaling Marmara in Opet by built college second the year, This Anatolia. around locations different at college a as well In previousyears, from thiscampaign. students. Since2002,347,000studentshavebenefited 12,695 impacting visited, were cities 11 in schools 40 than more 2008, In efficiency. energy and environment the aid, first regulations, traffic and fire earthquakes, accidents, home about children the educating Turkey, of specialized educators visits elementary schools all over group A health. and environment the efficiency, energy like topics new incorporating revised was curriculum the 2008, In 2002. since Accidents Against Campaign education byKo TŸpraß donates necessary items such as computers, as such items necessary donates organized special screenings of the film Horton film the of screenings special organized 2 serves 480 students. A total of 16 classes are classes 16 of total A students. 480 serves Umbrella Movement reaches children who Support for Opet builtfourelementaryschoolsas component ofwhich its socialresponsibilityresourcestowardseducation. into thefuture,KoGroupallocatesasignificantportionof In the belief that education is the vehicle that will carry Turkey TŸpraß UmbrellaMovement, 100SmilingFacesinBatman Project TŸpraß April23 rd activity made apparent by the many emotional letters received afterwards.

TŸpraß became the sponsor of TEGV's six Firefly Mobile Learning units for two years.

YapÝ Kredi is supporting the ÒÒReading & PlayingÓÓ project launched in cooperation with TEGV, a project that contributes to the personal and social development of primary school students who lack access to modern educational opportunities. The goal is to develop students' thinking, research, questioning and analytical skills. The project is implemented at TEGV's 11 education parks and 55 learning units. Four activity periods were realized between February 2008 and January 2009, reaching a total of 18,818 children. In 2008, a ÒLocal Reading DaysÓ activity was created, in which the children met the authors 22 of the stories they have been reading and, with the 23 Aygaz Cautious Child: Awareness Campaign Against Accidents participation of more than 500 children, a Òstreet theatre activityÓ was successfully carried out.

In cooperation with the Clean Seas Association TURMEPA 347,000 and with support from the Ministry of Education, YapÝ Kredi launched the ÒInfinite BlueÓ project to raise The number of children who have made awareness at the elementary and high school levels about use of the Aygaz Cautious Child protecting our natural heritage. Within the Infinite Blue Project, two teachers from each school in coastal Campaign since 2002 . provinces, districts and cities are trained; they in turn train students at their schools with information provided about nature protection. By the end of 2008, 5,023 schools in professional training in teenager psychology and 11 cities were involved in the project, with 8,586 teachers communication skills. To ease immigrant integration trained, and 2,973,284 students informed by the end of into urban life, the project ÒOne Hundred Smiling Faces the year. in BatmanÓ was launched in cooperation with the governor of Batman, local officials in the ministries of YapÝ Kredi is also supporting the restoration work started Education and Health, school directors, teachers and by the BoÛazii Alumni Association, in order to re-open village headmen. Together with the 20 students who the legendary Hamlin Hall boys dormitory of BoÛazii receive funds from the vocational training project, 100 University as a modern, more comfortable and well- students were invited to a series of events including equipped dormitory. educational programmes, seminars and workshops, movie and theater events, concerts and sports events Culture and Arts and a picnic on April 23rd. The activities opened up a Ko Group creates value with supporting activities in new world for the children, and the deep impact was many areas of arts and culture, extending from Kofest ÓBeyond BabylonÓ Exhibition, New York Metropolitan Museum of Art

archaeology to history, museum curatorship to modern and from 14 cities in 2008. In 2009, the festival will be arts. Ko Group sets aside resources for support and organized in cooperation with the International Federation development of our cultural values and artistic wealth, of University Sports and combine fun and sports under introduces them to an international and the national one heading. The champions of the Kofest Sports Games audience, encourages artists and contributes to the efforts will represent Turkey in international contests. for preserving our historical and cultural heritage. In 2008, The exhibition ÒBeyond Babylonia: Arts, Trade and

Social Responsibility at Ko Group the Ko Holding Group companies and the Vehbi Ko Foundation continued to make a difference in culture Diplomacy Two Thousand Years before ChristÓ was hosted by the Metropolitan Museum of Art, one of the and the arts. most important cultural centers in New York City, between November 19, 2008, and March 15, 2009. The Ko Holding financed the staging of the children's play, exhibition's main sponsor was DEIK/the Turkish- Sizinkiler, in order to enhance the intellectual and creative American Business Council (TAIK) with additional development of children, and almost 200,000 children support from the Ko, DoÛan, DoÛuß and SabancÝ have viewed the play in the past three years. Presented groups. The exhibition served TAIK's most important since 1991 and followed by children with great interest, goal: to promote and enhance the image and trademarks the cartoon figures of Sizinkiler are adapted to stage by of Turkey abroad and to advertise the desirable the BKM actors. Presented free of charge, for the past atmosphere for business investment, especially for two years this musical has been inviting children to dream cultural and business tourism. without limitations and to chase after their dreams. This year, the adventure leads them to think more about Since 2005, Aygaz has been supporting the restoration environmental issues. of the Antonine Nymphaeum, one of the most magnificent buildings of the ancient city of Sagalassos. The university festival Kofest, started in 2006 by Ko In 2008, work on fortifying the structure against Holding with the aim of enriching the lives of young earthquakes was begun. The work is scheduled for people, transformed university campuses into fun-filled completion in 2010. arenas in 2008, including games, contests and concerts by rock stars. Traveling a total of 30,000 kilometers around Each year, a new book is added to the Aygaz Library, Turkey, Kofest attracted over 1.2 million university which has been developing since 1996. In cooperation students from 11 cities in 2006, from 13 cities in 2007 with YapÝ Kredi Cultural Activities, Arts and Publishing, Culture and With the aim of extending culture and arts to large groups of people, our Group contributes to raising awareness, and arts at Ko enhancing socio-cultural opportunities.

Aygaz supports Antonine Nymphaeum at Sagalassos the book titled The First Year of the Second Meßrutiyet meetings and in various social settings were exhibitied. has been published to honor the 100th anniversary of In all, 64,144 people visited the exhibition. the second constitutional monarchy. 24 Since 2007, Aygaz has been sponsoring TEKSEM, which 25 Aygaz has been supporting the Istanbul Culture and was founded in 2001 under the motto ÒNo Handicaps in Arts Foundation, which has worked for the Life, in Art or in Positive ThinkingÓ. Together with TEKSEM, development and enrichment of the artistic and the theatre piece First Aid Accident was staged on cultural life of Turkey since the foundation's November 2, 2008, in Istanbul, and on December 28, establishment. With the conviction that art is a basic 2008, in Ankara. The piece was slated to tour Anatolia pillar of social development, Aygaz has been co- during 2009, visiting Izmit, Gebze, Bursa, Samsun, sponsoring with Opet the International Theatre Festival Trabzon, Gaziantep, DiyarbakÝr, Malatya, Istanbul, Edirne, since 2003. The 16th Istanbul Theatre Festival took ‚orlu and Antalya, with a plan to reach a total audience place May 15-June 4, 2008; not only were shows and of 5,200 people during 2008-2009. performances staged, but workshops, seminars, panels and movies screenings also took place. Eight Otokar continued as a keen supporter of arts and culture theatre and dance companies from abroad and 25 activities in its district. In this context, the KÝrkpÝnar Festival groups from Turkey organized more than 70 organized by the KÝrkpÝnar Arts Association was sponsored performances and were watched with great interest by Otokar and took place between June 23 and July 30, by the foreign and local press, theatre professionals 2008. Otokar employees showed great interest in the and art lovers. theatre pieces staged during the festival, namely, the children's play My Pretty Shoes on July 2 and Love Thief Aygaz sponsored a photography exhibition called on July 11. Orphan children from the Arifiye Children's ÒAtatŸrk and Women During the First Phase of the Home also watched My Pretty Shoes during the festival. RepublicÓ at Dolmabahe Palace, on display from March 8 to 23, 2008. The exhibition reiterated the Founded by Tofaß in 2002 in order to preserve the great value AtatŸrk placed on the role of women in the automotive heritage of Turkey, the first and only vehicle progress of a society. Photographs of leading female museum of Turkey, Bursa Tofaß Anatolian Vehicles figures such as Afet Ünan and Sabiha Gšken in the Museum, has received 184,000 visitors in five years. Built National Assembly, on the battlefront, in official on a 17,000 square meter plot, the museum traces the Social Responsibility at Ko Group Respect forthe to beablehold upto6,0 recent work has focused on preparing the theatre building most The ways. ceremonial and houses triton nymphaeum, the latrine, the agora, the museum, a into transformed been have that baths the necropolis, the Avenue, Frontinus entrance), city (main Gate Frontinus theatre, ancient the Apollon, sacred the of consists city The history. Anatolian in settlement important very a of unearthing the supporting Turkey, of cities ancient biggest five the of one Hierapolis, at work excavation the sponsoring been has Tofaß 1990s, the Since 2008, and opened as an exhibition space in this museum. February in finished was house Turkish the and house of today.TherestorationthehistoricalUmurbeybath of years ago, and reaching the Turkish automotive industry a simplewoodenwheelwhichbegantoturnthousands history of transportation on Anatolian lands, starting with The ÒPassers-by,PauseandRememberSoldierMehmetÓMonument past atKo 00 spectators. Eachyearthe MehmetÓ waserected. the monumenttitled,ÒPassers-by, at the Battle of Sakarya during the national War of Independence, With the support of TŸpraß, in the memory of the soldiers who fell University organized the 1 the organized University Sinan Mimar the and TEV 2005, in died who University Sinan Mimar of Conservatory State the at professor In memory of Nuri Üyicil, the famous violinist and a former 2008. August in celebration impressive an with unveiled was monument MehmetÓ Soldier Remember and Pause by, Kartaltepe, with the sponsorship of TŸpraß. The ÒPassers- PolatlÝ, Ankara at erected was meters, 32 of height a at Turkey, of monument highest the 1921, in Battle In memory of the Anatolian soldiers who fell at the Sakarya of TŸpraßin2008. music and started its Anatolian Tour with the sponsorship classical promote to aims orchestra the 2007, of class the in Conservatory University Kocaeli the of graduates musicians, young 18 with Commerce of Chamber Kocaeli by Founded Orchestra. Chamber KSO the of TŸpraß (Ege, Üstanbul,Ankara,andÜstanbulTechnical). and students from eight Italian and four Turkish universities (MAIER), are represented by are 80 professors, technicians Society Archeological Italian the with cooperation in National Research Center (IBAM), working on the project Sculpture symposium during the 2 Stone International the sponsored also TŸpraß 2008, In under thesponsorshipofTŸpraß. TŸpraß KÝrÝkkaleInternationalStoneSculptureSymposium is supporting the ÒRhythm of Production ConcertsÓ Pause andRemember,Soldier st International Violin Contest, Violin International nd Hasanbaba Culture 26 27 Festival, held at a location close to the KÝrÝkkale Refinery. A total of 17 exhibitions were Sculptors from all over the world took part in the event, organized during 2008 at the YapÝ the goal of which was to encourage communication Kredi Culture Centre, all of which among artists of different cultures in order to discover the global dimension of creativity via interaction. attracted considerable interest.

TŸpraß also sponsored the Kupjack Miniature Rooms exhibition at the Rahmi Ko Museum, on display from celebrities from the business, arts and theatre worlds attended December 16, 2008 to March 15, 2009. The unique and the event. aesthetically-pleasing work of artist Henry Kupjack was highly appreciated by art lovers. YapÝ Kredi Cultural Activities, Arts and Publishing also continued to make its mark on the cultural and arts scene YapÝ Kredi continued its support for culture and arts with during 2008, thanks to its publications as well as the various activities in 2008. During the 36th International exhibitions and other events it organized. YapÝ Kredi Cultural Istanbul Music Festival, YapÝ Kredi sponsored the Activities, Arts And Publishing remained the leading name Razumovsky Ensemble and the Vienna Chamber in Turkish publishing in 2008, having published 207 first Philarmonical Orchestra concerts. The company also editions and 422 later editions, in all, printing more than one sponsored a concert by the Vienna Chamber Philharmonic million books in 2008. To date it has published 2,820 different and pianist Mihaela Ursula on June 9th in the 22nd Izmir books. Festival at the ancient Asklepion Theatre in Pergamon. Seventeen exhibitions were held at the YapÝ Kredi Culture The 12th YapÝ Kredi Sigorta Afife Theatre Awards took place Centre in 2008, all of which were received with great interest. on April 21, 2008. The event was held at the LŸtfi KÝrdar The ÒContemporary ArtsÓ series continued at the KazÝm International Convention Centre and included the Taßkent Arts Gallery. All of the following exhibitions in the presentation of awards in 14 different categories. Numerous series were visited and talked about with enthusiasm: Cengiz Social Responsibility at Ko Group AphrodisiasÓ presented 52 magnificent sculptures from sculptures magnificent 52 presented AphrodisiasÓ from Portraits ÒRoman exhibition The exhibitions. important two hosted Museum Tšr Nedim Vedat The TakeÓ. Not Could He Those and Took He Photographs With Ali his in an exhibition titled ÒA Glass Photograph: Sabahattin of talent little-known a about exhibition an in lovers art to revealed was Ali, Sabahattin literature, Turkish in names Man KazÝmKarabekirÓ.Finally,oneofthemostimportant was remembered with the exhibition ÒThe Soldier and the Karabekir KazÝm front, 40 eastern the of Hero AnniversaryÓ. the at Paris '68, May Walls: the of Language remembered with GŸneß Karabuda's exhibition called ÒThe were 1968 of events the years, forty After time. first the for Istanbul to belongings personal Hikmet's NazÝm My City: NazÝm and Vera, from Moscow to IstanbulÓ brought entitled ÒComing to the End of my Road Before Reaching exhibition An birth. thinker's modern this of anniversary 100 the on held was exhibition ÜpßiroÛluÓ Þevket Mazhar Thinker: ÒPioneer The Zonaro. painter orientalist famous of memory the revived that exhibition an was Zonaro: The Life and Works of an Ottoman Palace PainterÓ Anniversary of his DeathÓ. ÒPainter of Life and Light, Fausto Correspondence andLettersofYahyaKemalonthe50 with the exhibition ÒThe Ship is Silent for 50 Years: Private architecture. MasterpoetYahyaKemalwasremembered architect and photographer who left deep marks on Turkish this about Hall ‚ifter Sermet in shown was ModernÓ the to Art National from Republic, the to Ottomans the from architect An KoyunoÛlu: Hikmet ÒArif titled exhibition An art history. Turkish in name important an Kabaß, Ozer of exhibition retrospective the and ÒMeryemÓ; exhibition photograph Ayße Erkmen's ÒUp and DownÓ exhibition; PÝnar Yolaan's CŸneyt E. KoryŸrek, Turkey's Adventure with the OlympicsÓ; Athletism: to Dedicated Life ÒA titled athlete, dedicated a KoryŸrek, CŸneyt on exhibition the exhibitionÓ; an Halil AltÝndere'shotlydiscussedÒIamnotsurethatthisis Brotherus; Elina photographer Finnish of photographs the It?Ó; Is Time ÒWhat titled ÒtimeÓ, on exhibition ‚ekil's th th th opening of the 770 m 770 the of opening The 2007. March since construction under been had which hall, exhibition new this gained finally Aphrodisias site. On the 20 the On site. which exhibitseightyoriginalreliefsfromtheAphrodisias Hall, Sebasteion new the support to designed was event your nameever-lastingon ÒMake motto the under 2008, 17, January on organized was auction special a Museum, Ko Rahmi the At relics. awareness aboutthisancient spread to working is which Foundation, Geyre the supporting theexcavationsat years, many For artifacts. interesting many with included and money paper of use historical the traced exhibition RepublicÓ the to Empire the from Money Paper of ÒHistory The Aphrodisias, a leading sculpture production site in Antiquity. these monuments werealsodisplayedat an exhibition Created by the most prestigious sculptors of their time, new Sebasteionreliefstookplace onMay31,2008. th Anniversary of the Geyre Foundation, Geyre the of Anniversary YapÝ Kredi Private Banking Private Kredi YapÝ 2 Sevgi GšnŸl Hall that houses the houses that Hall GšnŸl Sevgi a historicalmarblereliefÓ.This city, especiallyitssculptural Aphrodisias carriedoutby

has been has The S Support for the During 2008, Ko Group companies continued to support the archeological excavations at archeological heritage Sagalassos, Hierapolis, ‚atalhšyŸk and Aphrodisias.

‚atalhšyŸk Excavations

ÒThe Frigate Ertugrul: A Turkish Ship in JapanÓ that sank in 1890 in Japan, and then bringing them to the surface in order to reconstruct the boat in memory of those 28 marines who survived or perished on board as well as 29 Sebasteion Reliefs in the new Sevgi GšnŸl Room of the Aphrodisias Museum Japanese the fishermen who helped save them. Ongoing research is being conducted by a team of international The Sevgi GšnŸl Hall, containing and Turkish expert nautical archaeologists. Besides the underwater work, several events have been organized to the Sebasteion reliefs of the preserve the memory of the Ertugrul Frigate. Two of these Aphrodisias Museum, opened include a meeting of the frigate crew relatives that occurred with the support of YapÝ Kredi on January 3, 2008, and a children's book prepared in Private Banking. cooperation with YapÝ Kredi Cultural Activities, Arts and Publishing in order to introduce the history of ErtuÛrul frigate to future generations. The project is also closely followed and supported by state officials. Prime Minister organized by YapÝ Kredi Cultural Activities, Arts and Abdullah GŸl went to the city of Kushimoto, Japan, and Publishing in Istanbul, September 26 2008-January 25 visited the Ertugrul Museum in June 2008. The project 2009. The YapÝ Kredi Vedat Nedim Tšr Museum hosted won the top award for sponsorship at the Golden World the ÒRoman Portraits from AphrodisiasÓ exhibition of 52 Awards 2008 organized by the International Public works, 51 reliefs from the Aphrodisias Museum and one Relations Association (IPRA). from the Istanbul Museum. The presentations delivered during this exhibition also contributed to the promotion The 21 meter-high ‚atalhšyŸk Hill in ‚umra district of of the Aphrodisias site. Konya in the middle of Turkey conceals 9,000 years' worth of secrets. ‚atalhšyŸk, home of a population that Sponsored by YapÝ Kredi Retirement , the ÒThe Frigate varied between 3000 and 8000 from 7400 to 6000 B.C., Ertugrul: A Turkish Ship in JapanÓ project was launched a span of 1,400 years, is one of the most impressive and jointly with the Institute of Nautical Archaeology-INA and significant archeological sites of the world. YapÝ Kredi the Turkish Institute of Nautical Archaeology, in December has been a main sponsor of the ‚atalhšyŸk archeological 2006. The project involved locating the remains of the excavations since 1997. Support for An important part of Ko Group's conception of corporate social responsibility is to contribute to the well-being, and health at Ko development of future generations.

long-lasting and well-planned participation of every layer of society.

Contributing to the existence and development of healthy generations is an important component of Ko Group's definition of corporate social responsibility. With projects developed by our Group companies and by the Vehbi Ko Foundation, we continued our activities in the health sector at full speed in 2008.

In the context of the health project ÒMoonlight: Light of Health from AygazÓ, launched on the 45th anniversary of Aygaz, inspectors examined vaccination rooms at 81 health centers that had been renovated by the end of 2007. In light of the results, the necessary follow-up work has been started. With this project, which won the second award at the ÒSocial Responsibility in Health CareÓ competition of the Health Volunteers Association, Aygaz will help support higher quality health care for hundreds

Social Responsibility at Ko Group of thousands of people, and will continue its support until 2016. Through projects developed by our Health companies and the Vehbi A strong society is only possible with both physically Ko Foundation, in 2008, and mentally healthy generations. Community health starts with family planning, an area regarded by our we continued to fulfill our founder Vehbi Ko to be of great importance, and it social health goals. continues with family health in all sectors of society. To ensure a healthy future, the healthcare system of a society must be running smoothly. For healthcare Aygaz has been supporting the work of the Child and services that are sustainable, sufficient, high-quality, Adolescent Diabetics Association since 2004. This efficient and responsive to public expectations, and organization aims to help children with diabetes learn finally, for an ever-improving standard of service, we how to cope with their condition and improve their quality need to be able to use our limited resources correctly. of life. One of the most important projects of the association While solving public health and healthcare problems, is a summer camp for children with diabetes at the Enez it is of the utmost importance to focus on finding solutions Social Facilities of Istanbul University, held every July with that meet the most critical needs of our citizens in an the support of Aygaz. In 2008, 100 children joined the effective, efficient, and medically-ethical manner. camp at Enez. The Association organized an information Sustainable health care is only possible through the campaign on November 14, Diabetes Patients Day, and dynamic brand, Beko, Arelik aims to engage more young people in sports activities promote the development of talented sports professionals in Turkey. Beko also hosts the annual ÒAll-StarÓ game and supports the Beko League ÒPlayer of the YearÓ award, for which basketball fans and coaches select the winner. With this project, Beko aims to reach out to more young people.

For its sponsorship of the Beko Basketball League, Arelik received the Ministry of Sports and Youth Award for the sponsorship of projects in sports organizations.

The Clean Toilet Campaign continued at Opet stations

Beko Basketball League during 2008. Training programs were carried out at different institutions. The mother and child foundation supported by media coverage and interviews organized A‚EV trained 150 people as trainers in Mardin and 30 by Aygaz. The pamphlet printed for the Association was DiyarbakÝr. Also, in response to the demand from the city 31 distributed at several locations in Istanbul in order to raise social services of Istanbul, educational programs were public awareness about diabetes. organized at the Metin SabancÝ Spastic Children's Centre and at the Taksim 75th Year Children and Youth Centre, Another project supported by Aygaz is the Safe and 325 people, including 147 trainers and 178 children, Motherhood Project launched by the Family Health and received the training. Clean toilet trainings are still Planning Foundation of Turkey (TAPV). Started in 2006, continued at several schools and institutions. this year the project focused extensively on the City of DiyarbakÝr Project. Work carried on in 2008 included the With its Worldcard, YapÝ Kredi created a giant social aid following: 13,965 individual consultations with pregnant program called the Sharing Program, which brings women, 5,621 group consultations, 4,663 pregnancy together nine leading NGOs in Turkey. Through the consultation interviews, 6,285 individual nursing mothers' Sharing Program, donors can donate the points they consultations, 1,912 nursing mothers' group consultations gained by using the World Card to numerous social and 1,289 nursing mothers' consultation interviews. With programs, a new charitable technique in Turkey. With support of Aygaz, a total of 31,349 pregnant women and this project, YapÝ Kredi aims to both raise donations and 16,486 nursing mothers have been trained and consulted foster popular solidarity. in BakÝrkšy, DŸzce and DiyarbakÝr. Aygaz will continue its efforts in 2009. YapÝ Kredi Private Banking and World Crystal Club decided that the most meaningful gift to their customers From July to December 2008, 1,698 people received for the New Year would be an opportunity to participate eye screening at a publicly available mobile clinic located in the future of modern Turkey. With this purpose in mind, at Aygaz auto fuel stations. in cooperation with TEGV and DarŸßßafaka, YapÝ Kredi covered the educational expenses of more than 1,000 Arelik sponsored the Turkish Basketball League for the children and gave the donation certificates to its customers 2006-2007 and 2009-2010 seasons. With its innovative as New Year presents. Respect for Human Rights at Ko Group

Ko Group respects universal human rights and takes all precautions not to take part in violations of human rights.

Companies that respect and support human rights also strive to respect human rights in their sphere of influence. Such an attitude motivates employees and fosters a sense of corporate fidelity. This proactive attitude of sincerely adopting a responsible commitment to the well-being of the whole society helps companies remain one step ahead in the competitive business environment. Modern consumers prefer brands and companies that they know are sensitive towards the public and its needs, companies that identify with their own values and are respectable in the way they do business, thus aiding the stable growth of such companies.

Ko Group respects universal human rights and takes all precautions not to violate them. Our Group encourages its shareholders to protect, support and comply with human rights policies and uses this perspective in its social responsibility projects. Our Group sincerely has a strong consciousness of corporate citizenship.

Ko Group companies strive to become the best in their fields and carefully select the strongest employees. In order to attract the most talented employees to our ranks and to gain their fidelity, our Human Resources system is dedicated to establishing goals from the first day of employment, to reward success and encourage personal and professional development at every stage. In all of our companies, the number of employees and management of wages is monitored closely, so that no one is employed without registration or below the legal minimum wage. Even straining company resources, we strive to keep competitively high levels of wages in our companies. For this reason, no amount under the minimum wage is paid in any company under our responsibility. We pay above the minimum wage even for those jobs at the lowest level and for new starters.

In the entire Group, no discrimination is directed toward our employees. As a corporate body, our entire management system treats each worker as a responsible individual and offers equal opportunities to everyone. Thanks to this sensitivity, no discrimination complaints were filed in 2008. TŸpraß Refinery workers We do not employ any child labour in our companies.

Ko Group companies continue to support activities for Ko Group companies the development of the health and educational level of continue to support activities our society. We closely monitor issues of occupational for the development of the health and safety. Accident rates are regularly monitored health and educational level and steps taken to nullify the possibility of occupational of our society. 32 accidents. Besides losing one of our YapÝ Kredi employees 33 owing to a tragic traffic accident, we did not suffer any fatal occupational accidents in 2008. At Arelik, periodic health screenings and controls against The views of the employees in matters of occupational occupational diseases were carried out in 2008. Blood health and safety are of great importance, and they are tests, audiometric tests, breath tests and lung graphy encouraged to assume responsibility in this regard. were completed. Arelik also provided health education Workplace union representatives have positions on seminars for its employees on various topics and has relevant boards in many of our companies. The views of developed protective health measures for noise reduction, the employees and the union representatives on matters ergonometrics, quitting smoking, parental support, of occupational health and safety are taken into hygiene, women's health, hepatitis B screening and consideration. Additionally, some of our companies offer vaccination, and tetanus and flu vaccinations. health care services for the local population and for the families of our employees. At Tofaß, a total of 538 people were vaccinated in 2008. The employees at the press and moulding department The health of our employees is of special importance to went through audiometric tests. In 2008, a campaign us. Except in one case where the practice is only half was carried out for quitting smoking and an information realized, periodic health screenings are carried out at job seminar organized on cervix cancer. In 2008, 3,450 start, and during the entire employment in our companies employees had lung and cervical examination and the in order to protect our employees against occupational employees at the processing plant received liver enzyme diseases. We closely monitor our losses resulting from tests. accidents and sick leave, and take precautions to keep them at a low level. Various health screenings are At TŸpraß, all employees receive annual periodic checks, sustained periodically, and, in some companies, special including chest X-rays and blood and urine evaluations, health programs are designed for our employees. Here and those over age 40 also have an EKG. Some are some examples from several companies: employees, in line with their occupations, are screened Respect for Human Rights at Ko Group in our companies Health screening been established in line with ergonomic standards. These has chairs office for norm the addition, In determined. been have values these once implemented be will screens with devices on optimally working for program training A finished. almost is keyboards and monitors, computer chairs, tables, office existing the measuring on Work fixtures. lighting and light of degree the and levels, vibration level, noise quality, air and climate office person, per space of size to regard with taken were Measurements improvement. for developed were At projects: those of examples some are Here renovated. been have spaces social and offices The time. their of most spend employees Group Ko where offices and space social the for standards the increased also we 2008, In breathing tests. receive environments dusty in working those and technicians arecheckedforexposuretoradiatonlevels, X-ray hydrocarbons, for tests periodic through go screened forbloodleadconcentrations.Thoseaffected are labs the in working those and shots tetanus get audiology tests.Thoseworking eye testsandthoseworking for infections. At TŸpraß, all employees go through regular Arelik , the office standards were evaluated and plans in noisyconditionsreceive Health check-upsatTŸpraß at maintenanceservices programmes areorganizedinseveralcompanies. in accordancewiththeirrespectivebusiness In thecompaniesofourGroup,varioushealthscreeningsareconducted Awards 2008organisedbyIPRA. Consumer World Golden the at category for CommunicationsÓ Services of ÒAvailability the in prize first won project The out. carried was (TEGV), acomputertraining programme foradults Foundation Volunteers Education Turkish the and ¥ that consists of short and understandable questions. Services sales representatives, a survey was initiated ¥ Centre: Research Aging the of projects the of some are Here advance. in for planned and fullest lives, but rather as a time that can be enjoyed to the people thinkoftheiroldage help will that projects designing and is researching (65+) Centre Aging The consequences. this demographic change in order better prepare for the with along emerging problems detect to and face, soon will society our which problem a population, aging an of issue the to attention draw to is Services, Retirement Kredi YapÝ by 2006 February in initiated project, this of goal The ¥ YoungstersÓ. the than Better ÒEven survey the hosted also www.yaslilikrehberi.org.tr, portal, The and cultural aspects of aging and research on aging. renewed monthly and includes issues on the social ¥ settings. various in distributed and published was and isaimedatimprovingthesafetyofoldpeople, accidents home of prevention the for suggestions ¥ and aboutthespecificproblemsofaging. quantitative, about how aging is perceived in Turkey other were the and TurkeyÓ qualitative one in commissioned, People Aging of World ¥ produced. basis data reference a and scanned been have

I

YAPI KREDIRESEARCHCENTREONAGING The pamphlet ÒHome AccidentsÓ, which contains During visits conducted by YapÝ Kredi Retirement Research and projects done in Turkey on aging on Turkey in done projects and Research Two research projects, under the heading ÒThe heading the under projects, research Two An internet web portal was created, which is which created, was portal web internet An n cooperation with YÝldÝz Technical University Technical YÝldÝz with cooperation n branches, andspecialhealth not astheendoftheir efforts to improve office working conditions are still in activities to enhance social life. The following are some progress. examples from 2008. 34 35 Through the renovations, the Aygaz offices have been Ford Otosan's Kocaeli factory supported the Flowers of improved and equipped with materials that had been Hope Association. The association works to improve the lacking, and the rooms have all been re-arranged to living conditions of physically and mentally handicapped improve their functionality. Such improvements have people, and to raise awareness about these conditions been executed at the YarÝmca and Amberli warehouses, among the broader population. The activity effectively the Gebze Plant and offices, and the Antalya Branch. raised awareness among Ford Otosan employees.

In line with the new corporate identity at TŸpraß, a new Ford Otosan employees donated books to the library of concept was developed for the offices and common a local prison and made a financial donation to the GšlcŸk Nursing Home. Visiting the Orphans' home in YakacÝk areas to provide more comfortable surroundings that and support work for establishing the needs of schools would enhance performance in the intensive work environment of this 24-hour working refinery. The changes have boosted employee motivation.

YapÝ Kredi opened a social activities club for better corporate integration and more efficient and effective communication among employees. The club aims to bring the employees together even after work hours. A photography club, theatre club, diving club, bowling club, dance club, folk dance club and motor sports club are included in this project. In 2008, the theatre club reached an audience of 1,700 people in Istanbul and Ankara.

The Ko Group companies are organizing exemplary In our country, the pace of local development varies drastically between Local regions. Through bringing together local resources and economic means, we aim to increase efficiency and design projects that will development make a local difference.

in their area were other examples of sensitivity towards social needs and taking responsible action.

Local Development In our country, where the pace of local development varies significantly between regions, we are proud to bring together local resources and economic means to increase efficiency and improve local conditions.

Opet's Model Village project, begun in 2005, aims to bring forth the remote villages, to render them self- sufficient, to enable them to use their historical, geographical and cultural potential and to raise the education level of the villagers, as well as increase their environmental awareness. The first example in this project was Dara Village in Mardin. After that, projects in Gaziantep Yesemek and Bolu Pazarkšy were carried out.

In 2008, construction work at Fethiye SaklÝkent was Respect for Human Rights at Ko Group completed and the tourism complex opened for use. The construction included sales booths, winter gardens, parking space and a parking lot control building, walkways, a toilet and landscape arrangements. In cooperation with the public adult education centre,

English and professional development courses were offered for local handcraftsmen and shopkeepers. Through this project, Opet aims to enhance the tourism potential of SaklÝkent.

With its ÒTribute to HistoryÓ project at Eceabat and its villages at the Gelibolu Peninsula, Opet aims to turn this area into a world-renowned national park. Over 2.5 million tourists visit the historically-rich site where the ‚anakkale Battle was fought. Infrastructure has become a challenge in meeting the needs of the visitors. Cognizant of these problems, Opet united its ongoing social responsibility projects in the area and enriched their content, transforming the whole into the ÒTribute to HistoryÓ project. In this frame, in order to give the Opet Model Village Project region a facelift, the landscape around AlÝtepe, the importance of preserving the historical heritage. In cooperation with the adult education centre, courses in English, small hotel management, cleaning and hygiene were offered. Village squares, museums, modern toilets and renovated sales booths revived tourism activities and increased the revenues of the local administration. In 2008, the ÒTribute to HistoryÓ park at the entrance of Eceabat was opened to visitors. The Park offers the opportunity to see and relive the battles fought on the peninsula and, in a way, guides the visitors through history. The project is continuing along with followup controls in the area, elimination of shortcomings and reassessment of work already done. The Tribute to History Project won the Turkish Parliament's Superior Services Award and the special prize at the ÒMost Successful Ko MembersÓ contest. 36 37 In the GAP district, at the Harranova Agricultural Products Factory, Tat harvests tomatoes with the latest technique and prepares them for the foreign market. A new mechanical harvesting system has allowed for the continuous 24-hour harvesting of tomatoes - a technique appearing in Turkey for the first time in 2008. It is now possible to deliver tomatoes to the processing line within Opet Respect for History Project four hours. Tat contributes to increased productivity, the development of agriculture and increased exports, thus SeddŸlbahir, BigalÝ, Kilitbahir, BŸyŸk and KŸŸk Anafarta also providing jobs for one thousand people. In addition, villages and the landscape of the Eceabat district were to maintain its cattle farm, Tat buys feed from a thousand improved and the historical and cultural features were families, further enhancing economic strength. made more visible. Awareness-raising activities were organized for the inhabitants of the region. Substructure and physical necessitites were met for tourists, who especially visit the area between March 18 and April 24. The enterprise includes elements that will enhance the condition of the peninsula and its villages regarding education, health, environment, tourism and the service sectors.

Within the ÒTribute to HistoryÓ project, besides the infrastructure development that is bringing financial benefits for the administration of the village, education Environmentalist production at Tat campaigns were conducted among the inhabitants on Working Environment at Ko Group

Ko Group always strives to recruit superior quality human resources, continue professional development and motivate its employees to the highest degree.

The basis of Ko Group's success is our strategic management approach and our holding structure based on creating value. The centrally-coordinated departments of human resources, finance, strategic planning, corporate communications, investor relations and inspection control allow Ko Holding to lead our companies with an eye on long-term goals. Expanding best practices into the whole body renders the companies competitive and able to reach the broadest range of customers through top quality human resources, strongest research opportunities, latest technology and the best control mechanisms.

Ko Group reaches its goals before most because of the strong human resources power at its disposal. The Group aspires to become an institution where mutual respect and trust dominate, where participation and diversity are highly appreciated. Our Group has always set a high priority on the recruitment of a superior quality work force and continuous development and motivation The Group invests in employee satisfaction and personal development, and believes in establishing creative opportunities through the intermingling of different viewpoints and information.

Ko Group believes in sustainable growth. Providing the best services to our customers, meeting the high expectations of our investors, implementing trust and providing equal opportunities for employees, and adding value to the society we live in are all just as important as making profits. In accordance with this outlook, we sold several companies in 2008. These acts reduced the number of employees by 16,200, down from 89,877 employees in 2007 to 73,677 in 2008. Human Resources Principles of the Group Ko Group aspires to work with the most successful professionals who can create added value for sustainable growth of a company where everybody prefers to be a part of and feels proud to belong. With this end in mind, our principles are as follows: ¥ Adding the best qualified young people and experienced professionals to our ranks, talent which will carry us into the future, ¥ Rewarding success with fair and competitive remuneration policies and high performance standards, ¥ Investing in the continued development of employees, ¥ Increasing company loyalty by ensuring equal opportunity in promotions, ¥ Creating a peaceful work environment. Employees at the Opet Headquarters

The Recruitment Process Ko Group respects its employees and their rights and 73,677 signs an employment contract with each employee upon 38 recruitment. In the personnel regulations section of the Total number of people working at 39 contract, the company's and the employee's duties, Ko Group companies. responsibilities and work standards are defined and all human resources processes from recruitment to leaving the company are included. Within an institutional ¥ Increase the company's performance through framework, in all of the Ko Group companies the competitive remuneration and reward policies, employment contracts, personnel regulations, and ¥ Enhance professional development in accordance collective labor agreements (only in those companies with employee and company needs, where a union representative is available) define the ¥ Keep qualified employees with the company, working standards and the mutual duties and ¥ Sustain corporate peace through correct industrial responsibilities of the employees and the company. The policies. human resources department ensures compliance with these working standards and their development to reflect There are no discriminatory policies in Ko Group needs and changes in the law. During public inspections recruitment; merit is the principal guideline. Qualified of our companies in 2008, no breaches of law or work individuals are recruited based on competence and they overload were detected. benefit equally from the Company's opportunities throughout their careers. During the recruitment process, In order for Ko Group to realize its goal of becoming in addition to the knowledge and expertise required for one of the world's leading companies, the Human the vacant position, nine main qualifications are taken Resources Department strives to: into consideration. In addition to interviews, candidates ¥ Attract the most talented young people and are given personality inventory and aptitude tests. The experienced managers to the Group, Evaluation Center also has procedures to maintain an ¥ Develop a corporate culture in which self-confident, impartial candidate selection procedure for specialist committed and productive employees work, and managerial candidates. ¥ Plan human resources in accordance with future needs, YapÝ Kredi has a New Resources Development Freedom of Ko Group respects the right of unions to organize, and the freedom to demand labor agreements. Most employees are union members association and are free to engage in employer and labor negotiations.

QUALITIES SOUGHT IN EACH EMPLOYEE

1. Choosing the Right Direction 2. Teamwork 3. Communication 4. Developing Cooperation 5. Focus on Results 6. Creativity and Enterpreneurship 7. Self-Development and Developing Others 8. Harmonizing Differences and Managing Differences 9. Customer Sensitivity

Department within its Human Resources Management for the purpose of making the right hiring choices in line with strategic goals, corporate vision and mission. After determining the needs in human resources, the available pool of potential employees is checked, a recruitment campaign is started with internal notices and internet and press advertisements. The applicants

Working Environment at Ko Group are evaluated according to job-related criteria such as age, education level, foreign languages and work experience. Every applicant who meets the requirements is contacted to take a test, followed by an interview. The candidates who seem to match the position after these procedures are offered a job and those who accept the offer sign a contract. 2,123 In 2008, like the year before, Aygaz won the ÒRespect Total number of managers participating for Human BeingsÓ award from the job portal in leadership development programs. kariyer.net, in recognition of its 97% response rate to job applications.

Freedom of Association communities by serving on the Labor Boards of the Ko Group respects the right of its employees to Istanbul, Eskißehir and Sakarya districts. organize in trade unions and their freedom to sign collective bargaining contracts. Most employees in There are no discriminatory practices in the Group. Group companies are union members and are free The number of female employees working in rotating to engage in employer or labour negotiations. In those shifts is less than males. There are no differences in companies, 18 of our employees are engaged in wage levels between the sexes and changes in wages employer organizations and 749 are engaged on the are dependent only on the work the employee performs boards of labor organizations. In addition, some of or the responsibility he or she carries. The wages of our managers promote labor rights in their respective non-permanent employees working in Ko companies PERFORMANCE EVALUATION

In keeping with the goal of realizing the priorities set by the company, at the beginning of each year at YapÝ Kredi, we learn what the goals of our employees are within the framework of our human resources program. Personal development plans are then prepared, taking into account the company's needs and resources as well as the individual capacities of each employee. Remuneration policies are developed based on a sectorwide analysis to enable employees to receive competitive remuneration. The abilities of the employees are evaluated with the Ò360 degree methodÓ. Human resources plans and carries out performance evaluations. Through human resources systems and policies, and in this equal opportunity environment, those with the highest performance and 40 potential are offered promotions to positions with 41 greater responsibility.

WORK ENVIRONMENT EVALUATION SURVEY RESULTS 110 Aygaz Gebze Works Work satisfaction increased significantly among our employees in 2008

105 are determined by a global system that is used by many firms around the world that is based on education level and the complexity of work 100 responsibilities. Through the use of annual wage comparison studies, competitive wage levels are kept stable. Wage differentials for permanent employees 95 Satisfied with Recommending Loyal towards the Would choose are determined by the valid TIS (collective labor working in this the company to company this work place company others again if a chance contract) for the various salary levels and the was given 110 procedural rules.

Work Environment Evaluation Survey 105 We are committed to creating the right conditions for our employees to work with enthusiasm and fidelity to the workplace. With the annual Work Environment 100 Evaluation Survey, we measure the loyalty, satisfaction and ambition of our employees. The results are carefully 95 monitored to meet company goals. Thanks to our efforts, LoyaltySatisfied with Aspirations working in this 2008 survey revealed a net increase in all categories. 2007 2008 company The 2007 results are adopted as 100. Most successful The use of employee project proposal systems secures widespread participation in management decisions. Management swiftly Ko employees evaluates employee suggestions, and rewards successful projects.

The Most Successful Ko Members - Arelik The Most Successful Ko Members - TŸpraß

Training in our Companies and was restructured and training courses were created to the Ko Academy harmonize with human resource needs, thus better enabling employees to occupy positions in accordance Ko Academy is the development and learning platform with their talents. An average of 55 hours of education of our Group. It offers an individually organisable learning time per employee was achieved in 2008. environment for our employees, as well as enables experts to produce, monitor and put into practice personal With the aim of becoming Òthe leadership development development plans. In 2008, 27,350 development

Working Environment at Ko Group centre that produces the sector's best banking activities were carried out, which indicates that 74.2% of the planned activities were actually put into action. personnelÓ, the YapÝ Kredi Banking Academy was restructured in 2008. The Banking Academy focuses on At YapÝ Kredi, the management of human resources is the fields of banking, personal development, leadership conducted in line with corporate strategies and bank and social responsibility. It aims to train well-equipped goals and determined according to the changing and banking personnel who can become members of a high- developing conditions in the sector, as well as proposals performance team. Besides ongoing activities, the of the employees. Parallel to the opening of new academy cooperates with two leading business schools branches, the selection process for branch managers in Europe, the IMD and Insead, and conducts certificate programs in cooperation with universities and important LEADERSHIP DEVELOPMENT PROGRAMS institutions in Turkey.

For developing a leader's way of thinking In light of these developments, the United States-based ¥ The leader and strategies Institute of Quality and Productivity Center (IQPC) ¥ The leader and human beings awarded the YapÝ Kredi Banking Academy first prize in ¥ The leader and business ÒBest New Corporate UniversityÓ category of the CUBICª ¥ The leader and effective performance Awards.

For developing his functional knowledge Leadership Development Programs ¥ Leadership in marketing In order to create a common leadership and management ¥ Leadership in the supply chain culture, to prepare the leaders of the future and for the ¥ Leadership in human resources development of our potential leaders in all fields, we ¥ Strategic management organize Òleadership development programsÓ. These The Most Successful Ko Members - Opet The Most Successful Ko Members - Otokar programs are intended to support candidates in their 2008 LIST OF THE MOST SUCCESSFUL KO‚ MEMBERS abilities to lead, as well as improve their functional knowledge and broaden their outlook. In the educational setting, the participants also find the opportunity to share AR‚ELIK knowledge and experiences. In 2008, 463 employees CREATIVE INNOVATORS (white collar) 42 The Single-button Dishwasher Project in leading positions attended this program, and since 43 2006, a total of 2,123 people were engaged in these TOFAÞ activities. CREATIVE INNOVATORS (blue collar) Engine Hood Hinge Stablizer Invention Most Successful Ko Members The creative views of our employees are highly valuable T†PRAÞ to us. Through suggestion systems in our companies, COOPERATION DEVELOPERS (white collar) The Umbrella Movement/ 100 Smiling Faces in the participation of our employees is secured and the Batman Project incoming suggestions are promptly evaluated. GRUNDIG One of these suggestion systems has been organized CREATORS OF CUSTOMER SATISFACTION since 2003 under the heading ÒMost Successful Ko (white collar) MembersÓ for the purpose of showing appreciation for Zero Standby LCD TV Project the successes of our employees and rewarding them on their merits. In those six years, 414 candidate projects OTOKAR from 45 companies participated in this contest. Under CREATORS OF CUSTOMER SATISFACTION the categories ÒImproving CooperationÓ, ÒCreativity- (blue collar) InnovationÓ and ÒCustomer SatisfactionÓ, we evaluate Recycling Filtered Water in the Dye-house Project the projects of our white-collar and blue-collar employees OTOKAR separately, without any discrimination, and so choose COOPERATION DEVELOPERS (blue collar) the most successful Ko members. Our employees show 2008 Energy Cost Reduction Project great interest in this contest. In 2008, only 51 projects from the initial 1,110 were admitted to the second OPET selection stage. Among those, three white-collar and SPECIAL PRIZE (white collar) three blue-collar projects were awarded and for the first Opet Tribute to History Project time this year, one project received a special award. Working Environment at Ko Group the activitiesofNGOsthatwesupport. responsibility programs and is a channel to easily announce social Group's our of promotion the supports program the power, communicative effective its Through results. business our on impact positive a has asset, important University. This benefit offered to our employees, our most and branches,ourretiredper our employees, their relatives and families, our distributors Ko MyFamilytodayhas fidelity, and synergy of example An customers. loyal our for support and employees our for opportunity savings a creating program, Family My Ko the of members to companies our of services and products the on benefits external firms. The goal here was to provide reduced price and companies Group both by demanded segment customer important an and channel marketing a into turned it time over beginning, the in benefitÓ Òside-effect a was it While values. family on places Group Ko the resources activities since 2005, reflecting the importance The Ko My Family program is one of the important human Ko MyFamilyProgram ÒKo MyFamilyÓ,aliving exampleof The totalnumberofmembers of activities. The program stresses Since 2005, we are running the ÒKo, MyFamilyÓprogramas one ofourhumanresources the valueweplaceon 83,000 membersfromamong 83,000 sonnel andstudentsofKo synergy andfidelity. concept offamily. safeguarded through severalimplementations. steps for improvement. Employee health and security are OHS Board reviews OHS practices in the Group and takes Group's the employees; our of (OHS) safety and health Ko Groupplacesgreatimportance ontheoccupational Occupational HealthandSafety also benefitfromtheGroup'shealthinsurance. children and spouses their employees, Kredi YapÝ plan. retirement Group's the of use making were employees bank's the of 60% 2008, of end the By well. as plan retirement individual Group's the supported has 2006, since and retirement their in security for plan second a with employees its supports Kredi YapÝ respect. this YapÝ Kredi had 46,799members. foundation the 2008, of end the By employee. each for employees, thecompanyisalsocontributingtofund themselves andtheirfamilies.Besidesthesavingsof for plan insurance health group a them offers also or receiveamonthlyretirementpension.Thefoundation retire they when saved amount full the retrieve either to them enables 1967, since families their and employees Group Ko the of savings the investing been has The KoHoldingRetirementPensionFoundation,which Foundation Ko HoldingRetirementPension offersaspecialpackageforitsemployeesin Occupational Ko Group founded the Occupational Health and Safety Board, reflecting the importance it places on maintaining high standards health and safety of health and safety for its employees.

Our companies have received awards in this field. In 2008, and Occupational Health and Security General Directorate of the Labor and Social Security Ministry awarded three companies nationally in the risk analysis category in a competition on best practices. Two of the commended companies, TŸrk Traktšr and Ford Otosan, are members of the Ko Group. TŸrk Traktšr won the award with the project ÒRisk Analysis on the Work BenchÓ and Ford Otosan won with the project ÒReducing the Risk of Cuts at the Welding StationÓ. The awards were presented at the opening session of the 5th International Occupational Health and Safety Regional Conference, Workers at the metallic oils department of TŸpraß Üzmir November 1-3 2008, in Istanbul. Aygaz had adopted the OHSAS 18001 occupational Arelik has proven its concern with occupational health health and safety management system at 11 of its filling and safety through continuing education work among facilities and at its Gebze plant by 2007, and thus certified its employees. A total of 43,200 course hours were spent the operation in 12 units. In July 2008, upon the revision 44 on this issue during 2008. of the OHSAS 18001 system, all of the units with this 45 certificate went through an independent audit and During 2008, the ÒOccupational Health and Safety transferred to the OHSAS 18001:2007 system. Process Improvement ProjectÓ was completed, run by an expert team of safety experts and doctors. In this context, occupational health and safety procedures and 217,858 processes have been monitored and improved. In addition, at Arelik, indicators on this subject are man-hour monitored and analyzed in the ÒPerformance Total hours of training sessions on Management SystemÓ and the results are compared to occupational health and safety. the set goals. In 2008, management examined the ÒOccupational Health and Safety PolicyÓ with regard to raising awareness among the employees, and necessary changes were made and shared with the staff.

At Aygaz, employees took part in certificate programs and, after passing an examination, received occupational safety expertise certificates. The company now has five A-class and one B-class occupational safety experts. In order to efficiently use their experience and knowledge, the Occupational Health and Safety Platform was created in February 2008, by the Departments of Quality Systems and SE‚-G and Human Resources. The goal of this platform is to use the experts' accumulated knowledge to be able to approach issues from a more fully-developed Aygaz YarÝmca Filling Terminal perspective. Suggestion Through a well-functioning suggestion system, Ko Group companies evaluate the improvement suggestions of the systems at Ko employees.

Tofaß's occupational safety standard WCM Safety is an exemplary application that can measure the health and safety levels of the employees, the production and the facilities in accordance with world-class standards. The aim of the application is to increase the information and skill levels of all employees with a view to reduce equipment, machinery system and human errors to acceptable levels and in time, to reach zero accident and scrap levels.

With the goal of reducing every kind of damage that may occur to the environment and everyone including the employees, customers, and community, TŸpraß published Tofaß Bursa Factory and put into practice its Health, Environment and Safety (HES) policy in 2007. TŸpraß continued to take measures At Tofaß, continuous improvement applications started and invest in precautions to develop HES awareness, systematically in 1984 with the Òquality circlesÓ and went create a safe work environment, reduce safety risks and on with the ÒTofaß Suggestion SystemÓ in 1995. With provide the best technologies and services. the Kaizen applications in 1997 and with the acceptance

Working Environment at Ko Group of WCM in 2006, the principle of participation is carried TŸrk Traktšr provided occupational health and safety even further. Between 1984 and 2008, a gain of and risk analysis training to 610 employees in 2006-2007 108.7 million TL was achieved thanks to continuous and contributed to the improvement of the working improvement. This gain was possible only through the conditions. individual suggestion system and the KAIZEN applications (gain is calculated for one year). In 2008, through defining Suggestion Systems losses and using correct methods, the applications were once again improved and the effects of the WCM system The views of its employees are very important for Ko made itself felt, so that an additional 32 million TL gain Group. Companies have built-in systems to collect and was possible. With a total of 97,000 suggestions (average evaluate suggestions from their employees, as is required per person being 12.3) and over 8,000 team projects, in a participatory management system. we can say that the applications found excellent response.

Aygaz developed and implemented an individual suggestion system that encourages participation and Ko Employees and Sports helps to improve conditions in the environment, workplace, Since 1989, Ko Group hosts the annual Ko Group waste recycling and energy consumption. During 2006- Sports Festival in May and June under the leadership of 2007, a total of 828 suggstions were received, out of Ko Holding, with the goal of fostering closer relations which 278 were accepted. In 2008, a total of 635 among Ko Group employees in order to enhance suggestions arrived, out of which 166 were adopted. employees' mental and physical health as well as raise Thanks to the employees' suggestions, improvements awareness about in the importance of sports. The 20th were made in the environment, working conditions, and anniversary of the Sports Fest was celebrated in 2008 waste and energy consumption. at Istanbul, Ankara, Bursa, Izmir and Adana, with over 2008 Ko Sports Festival

3,000 sport-loving participants from 70 companies. The Holiday, took place on May 15, 2008, at the company's 46 festival, organized by the Central Organizing Committee, race track. Otokar also joined the Dragon Boat Festival, 47 is supervised by the District Organizing Committees. which was organized this year for the first time in Turkey. Mini-football, basketball, volleyball, table tennis, tennis, chess, swimming and athletics contests were held under In 2007, YapÝ Kredi founded the YapÝ Kredi Sports Club the observance of official referees and various prizes Association, which all regular personnel and retired were awarded to the cup and medal winners. employees and families of the Ko Financial Services Group can join. This association, which has gained more Our companies also contribute to the development of than 600 members in a very short time, provides access their employees' health by various sports activities. Here to all the sports fields. The association has a number of are some examples: social and cultural goals, striving to engage sports lovers and familes in various sports, to enhance their mutual TŸrk Traktšr's traditional Summer Fest took place in respect and understanding, to develop their physical June 2008 with the participation of 1,500 personnel and and mental fitness, and to spend their leisure time in a their families. In addition, the 6th TŸrk Traktšr Sports beneficial manner. Fest, organized in October-December 2008, supports social solidarity and closeness among their workers and YapÝ Kredi also sponsors employees' licenses for expands the interest in sports. Now becoming a local individual sporting activities. In 2008, six succesful tradition in its 6th year, the Sports Fest drew a record employees in athletism, tennis and mountain climbing number of participants. Participants of both sexes, both received support through the ÒYapÝ Kredi Internal blue and white collar employees comprised a total of SponsorshipÓ to attend competitions in Turkey and 650 sports participants at TŸrk Traktšr. abroad. As a part of this sponsorship, the successes of these athletes are made public in the institution's The annual traditional factory race at Otokar, always magazine thus announcing their accomplishments to held around the time of the 19th of May Youth and Sports their co-workers. Working Environment at Ko Group ÒVocational Education: A Crucial Matter ÒVocational Education:A Twenty 10 Twenty individually. recipients scholarship our contacted We feedback frommanyNGOsleadersandstatesmen. importance the of vocational education. He received positive about awareness raise to order in project, this in developments recent most the and education vocational of importance the on views his expressed and country our in personages 1,000 leading the to letter a wrote Ko V. Mustafa Board the of Chairman EU andafasterdevelopmentofourindustries. of ourcountry,foraneasieradaptationprocesstothe and a well-trained work force offers for the development education vocational that opportunity the promoted we year, This recipients. scholarship of generation 3 its met and years two completed had project the Crucial Matter for the NationÓ Project in 2006. By 2008, A Education: ÒVocational the launched Foundation, Ko Vehbi the of support the with and Education of Ministry the with cooperation in Holding, Ko for theNation Vocational Education:ACrucialMatter interest shown in them and the memories from this from memories the and them in shown interest the to Thanks Istanbul. in University Ko by them for Sightseeing ProgramÓJuly12-19, especiallydesigned and ÒEducation an joined competition Successful!Ó am I and Student School High Vocational a Am ÒI YEARPROJECT 8,000 COMPANIES STUDENTS SCHOOLS 262 21 81 CITIES 7 th for theNationÓinitsthirdyear graders who were award-winners in the in award-winners were who graders rd In 10 Time ManagementÓ, through interactive lesson modules. and Goals ÒSetting ConfidenceÓ, ÒGaining on classes same system. Our students in the 9 the under cities 81 in work will society, their to value add to desire who individuals successful among from The vocational high school coaches, who were chosen towards thefuture. coaches prepared to support the students on their way The school. high in times own their remembered and excited got themselves, enjoyed learned, they where facilities, BayramoÛlu Kredi YapÝ the at training their received managers company by chosen coaches school high vocational new 107 and duty the for applied coaches new 2008 July In students. 280 Ko Group employees are continuing to coach the cooperation withthesupportof21Groupcompanies. industry-education for example an set project NationÓ the for Matter Crucial A Education: ÒVocational The status asMLMMscholarshiprecipients. their parents, but what they all have in common is their by decision the to pushed were others while choice, life's necessities,somemadeaconsciouspreferential of because school high vocational a chose them of impressed the managers of the Ko Group. While some journey, they returned home renewed and, in turn, they th gradetheywill attendclassesonÒResponsible lives of6,321grantstudents. the MLMMprojectchanged Started in2006byKoHolding, th grade will receive Arelik SŸtlŸce CitizenshipÓ and ÒDeveloping ProjectsÓ. According to survey results, the coaches evaluated their experience with this project at 3.84 on a scale of 4. They also stressed that volunteer work increases their attachment to their work, motivates them and renders them more efficient in professional life.

In December, after going through the ÒResponsible CitizenshipÓ module with the students, coaches in 10 districts organized an environmental awareness activity within the framework of the ÒFor My CountryÓ Project. In this activity, the local TEMA foundation specialist instructed 1,700 students on environmental awareness, erosion and energy saving in TekirdaÛ, Istanbul, Kocaeli, Fiat laboratories Giresun, Mersin, Tarsus, Karaman, Batman, Izmir and Ankara. young people. More information is available at: www.mlmm.com.tr The number of active MLMM scholarship recipients has reached 5,325 to date, and the goal is to reach a In connection with the Vocational Education: A Crucial total of 8,000. The project aims to support the personal Matter for the Nation Project, Tofaß started the Fiat development of scholarship receivers, giving the Technical Training program in Bursa in 2006, in order vocational high school students the message that, as to train much-needed manpower. In 2008, a protocol long as they develop themselves, they will always find was signed to develop the program and Fiat laboratories 48 a place in the labour market. School authorities, people were established in nine additional districts, bringing 49 from the business world and NGO activists already the total to 11,120 people received service-intern training regard the project as a model to support and motivate from lab directors and teaching staff at the Fiat Training Centre in Bursa. Thanks to this project, in three years, 1,300 students will have found much better learning THE GOALS OF THE MLMM PROJECT opportunities. A system to provide the expertise needed at the service stations is also hereby established. In Aims of the project are to provide vocational high addition, efforts are underway to integrate the Fiat lab school students with: students into the MLMM program and have them enjoy ¥ Scholarships the scholarship benefits and personal development ¥ Improved knowledge, skills and competence with opportunities offered in this framework. internships ¥ Career support through coaching and employment TOFAÞÕ SUPPORT FOR FIAT TRAINING LABORATORIES possibilities 1. Þißli Industrial Vocational School / Istanbul MLMM IN GROUP COMPANIES 2. SamandÝra Industrial Vocational School / Istanbul # of students # of scholarship 3. BaÛcÝlar Industrial Vocational School / Istanbul Company # of districts # of schools involved recipients 4. GŸvercinlik Industrial Vocational School / Ankara Arelik 22 25 28 645 Aygaz 7 8 13 241 5. Adana Motor Vocational School / Adana Ford Otosan 13 20 26 529 6. Gaziemir Industrial Vocational School / Izmir Opet 3 4 6 62 7. HŸrriyet Industrial Vocational School / Bursa Otokar 1 4 4 84 8. Antalya Industrial Vocational School / Antalya Tat 1 2 2 59 Tofaß Fiat 12 18 26 415 9. Samsun Industrial Vocational School / Samsun TŸpraß 4 13 21 359 10. Kocaeli Industrial Vocational Schooll / Kocaeli TŸrk Traktšr 2 4 2 45 11. Burhanettin YÝldÝz Industrial Vocational School / DiyarbakÝr YapÝ Kredi 38 41 66 1127 Environmentally-Friendly Practices of Ko Group

Ko Group is committed to protecting the nation's natural resources and using them in the most effective manner, reducing waste as much as possible and recycling waste materials.

Societal efforts to re-establish the rapidly collapsing natural balance are speeding up in our country as well as worldwide. It is necessary to protect the natural world and the environment, to stop the pollution of our most valuable heritage, the earth's waters and air, and to reduce threats to the ecosystem that are causing climate change, all of which call upon us to raise public awareness and to work towards sustainable economic development.

In all of its activities, Ko Group is committed to meet all national and international regulations and environmental standards and is constantly improving its environmental standards through monitoring and accelerating its progess in meeting its commitments to the environment. Ko Group seeks to improve its environmental performance through joint solutions to local and global environmental issues by sharing its experiences within the industry, and strives to be the country's leading industrial group in its sensitivity toward the environmental, health and safety expectations and needs of the society. These commitments are also in line with the environmental principles of the UN Global Compact, which the Group signed in 2006.

Ko Group regards it as a duty to protect natural resources as required by national and international law, to use these resources as efficiently as possible, to reduce waste at the source or recycle them. Our Group invests in environmentally sensitive technologies and develops products based on future standards, while also supporting civil society efforts for safeguarding the environment. Thank you announcement to the contributors of ÒFor My Country ForestsÓ Campaign

August 2008 cover of Bizden Haberler magazine

50 51

For My Country Forests The environmental principles Articles 7 and 8 of the UN Millennium Developmental of Ko Group harmonize with Goals stress the importance of environmental the framework of the Global sustainability and building partnerships for the sake of Compact of the UN which we the environment. These goals are also supported by the Global Compact. In our times, protecting ecosystems, signed in 2006. reducing greenhouse gas emissions and protecting and expanding the forested areas, which contribute most to maintaining the natural balance of the atmosphere, are one single, big event that deals with environmental of utmost importance. In cooperation with TEMA, one protection under the roof of the For My Country Project. of the most eminent environmental NGOs in Turkey, we started to established the For My Country Forests project With the Ko Group For My Country Forest, 700,000 in 2008. saplings will be planted in 7 districts of Turkey. The goal is to protect the topsoil, sustain biological diversity, keep We have declared the last Sunday of May, which is the climatic balances intact and struggle against erosion anniversary of the Ko Group, as For My Country Day. and global warming. The For My Country Project Every year since May 2006, employees and distributors proceeded in full force with the participation of Ko from various districts and companies have engaged in Group employees, distributors and suppliers and with voluntary social responsibility activities. Having organized donations from the companies and the holding. 387 social responsibility projects all around Turkey in Awareness raising campaigns and other activities with the first two years, for 2008 Ko Group decided to unite a focus on the environment support and enrich the core For My Country In 2008, Ko Group started the all-encompassing For My Country Project, expanding upon a smaller number of Forests dispersed projects on environmental issues.

TekirdaÛ/‚erkezkšy Marmara Region Ko Group For My Country Forests Giresun Karadeniz Region Ko Group IÛdÝr For My Country Forests East Anatolia Region Ko Group For My Country Forests

Üzmir/Menemen Ege Region Batman Ko Group Southeast Anatolia Region For My Country Forests Ko Group TŸpraß Karaman For My Country Forests Central Anatolia Region Ko Group For My Country Forests Mersin/GŸlnar Akdeniz Region Ko Group YapÝ Kredi Bank For My Country Forests

FOR MY COUNTRY FORESTS

action. A special awareness raising campaign was Environmentally-Friendly Practices of Ko Group Environmentally-Friendly organized for the children and youth living in the 700,000 surroundings of the forest. This campaign was aimed at informing school children about environmental issues Number of saplings planted and developing an understanding in them about using throughout Turkey natural resources effectively. Students from primary schools that have been supported with material from Ko companies during the For My Country campaigns from former years were involved, as well as scholarship recipients from the vocational high schools campaign and children from schools in Mersin, Izmir, TekirdaÛ, Giresun, IÛdÝr, Batman and Karaman, where the forests are planted. After these training sessions, the students became members of the Youth TEMA or the Children's TEMA. We reached a total of 3,000 students in this campaign.

Besides the For My Country Forest, Ko companies planted 494,020 saplings on their own. While the total number of planted saplings was just 63,952 in 2007, 1,194,020 saplings were planted in 2008. TekirdaÛ/‚erkezkšy For My Country Forests tree-planting ceremony The message of the ÒGreen RoadÓ project started in 2004 by Opet was in 2008 directed at transforming the highways into a ÒGreen ChainÓ, encouraging the cooperation of the petrol stations along the roads. Working together with supermarkets, petrol stations, hotels and other facilities along the highways, 100,039 trees were planted in 2008. The entrances and exits of all Opet stations were surrounded with trees in this project, which facilitated the planting of a total of 429,629 trees to date. Opet greening project: Opet Park Opet also organized various activities at their service stations the occasion of World Environment Day, which Taking photocopies of the customers' documents caused is celebrated on June 5. Storybooks stressing the too much paper use, a practice which is now no longer importance of plants, trees and animals were distributed used. to school children and the customers were presented 52 with potted plants. In Bursa, ‚anakkale and Giresun, In addition, no greeting cards are produced and the use tree planting activities were continued. In Gaziantep of promotional and gift materials such as calendars, 53 Islahiye, the Opet Park was constructed for various age notebooks, etc. has also been stopped. As a result, a groups. Besides playgrounds for children, the park reduction of 4,199 tons of paper was achieved and features sporting facilities for adults including an open- 71,394 trees were saved. air gym centre, a basketball field and a walking course for all age groups. The two-acre recreation area also Environmentally-Friendly Products at Ko features a cafŽ, refreshment booth and toilets. And, for Acting with the understanding that sustainability and the greening of the area, 2,188 plantings were done, environmental awareness are of fundamental value, this thus completing the landscaping of Opet Park. year Ko Group companies also tried to develop products that are environment-friendly and in harmony with nature. As an institution that protects nature and the environment, In 2008, TŸpraß revealed an important investment project YapÝ Kredi continued its efforts to reduce paper of $1.6 million to refine high-sulphur fuel oil used in its consumption in 2008. In all branches and in the head refineries and convert it into white products such as office, precautions were taken towards saving paper. Euro V standard diesel and petroleum. Through this Separate baskets for wastepaper are erected in all project, fuel oil and other deep products widely found facilities and all papers that no longer need to be kept in our country and neighbouring regions, will be in the archives are sent for recycling. transformed into white products very much needed in Turkey. By the completion of this project, which is planned All announcements to employees are sent by e-mail and to continue through the year 2012, lzmir refinery the employees are informed about how to reduce paper production of unleaded gasoline with environment- usage. Through these efforts, although the number of friendly high added-value, as well as LPG, diesel and branches has increased, the paper demand is reduced. petroleum coke, will have increased greatly. The documentation of material is gradually being transferred to the electronic media, within the framework Arelik aims to protect the environment and nature in of the ÒTransition to Paperless EnvironmentÓ project. a permanent way and contribute to sustainability through Environmentally-Friendly Practices of Ko Group Friendly Products at Ko works by pressing only one button. The one button one The button. one only pressing by works that model dishwasher only and first the Blomberg, by producing the TechTouch (Arelik), and the Smart Touch also is Arelik world. the in any of consumption water produced by12people,this dishes wash to capacity a With 2004. since produced been has dishwasher "Ecologist" EI 62101 Arelik The for amoreefficientuseofavailable energy. and washing machine design in those projects will allow oven The oven. built-in a and compressor a machine, washing a including products saving energy other on working is Arelik dryers. conventional to comparison in energy in saving 40% a provides further technology, pump heat its to due heater no requires which dryer, 50% saving in energy in comparison to gas burners. The a provides burner This market. world the on available already though Turkey in first a range, product its to Arelik has also added the induction burner technology Mirror No-Frostrefrigerator. 1880 MDND A++ Blomberg new the as well as ClassÓ Orbital Black ÒNew refrigerator No-Frost 5088 A++ the 2008, September in beginning as, well as refrigerator No-Frost 5275 A+ the producing is and line product less energy, added a No-Frost Double-Door Refrigerator Energy Classproductswithtechnologiesthatconsume consumption. Arelik,whichisinvestinginA+andA++ energy less with and faster efficiency, increased with products thatsaveresourcesbyusinglesswater,work Environment dishwasher hasthelowest Tofaß BursaFactory ally- had lowenergyconsumption. consumers environmentally-friendlyproductsthat In 2008,KoGroupcompaniescontinuedtooffer the experience gained through this project, Ford Otosan and produced thehybrid Transitprototype. Building on economic consumption of fuel, and rate emission low their of because years 30 to 20 next the in more used be will cars hybrid that Knowing energy andwater. of amount minimum a consume consistently to and easier washing dish make to session, washing every in washer is designed to guarantee the same performance a first in Turkey. This new burner technology to its product range, Arelik added the internationally saves upto50%inenergy used inductionburner Ford Otosan consumption. developed Otokar Doruk 230DG model

reduction of 50% in NOx gas emission, a gas that causes

acid rain, and a 90% reduction in SO2 gas. Particle ejection of the vehicle is 50% to 75% lower than the buses running on diesel. 54 Otokar is also working on Doruk 160 LE, the first hybrid 55 bus prototype in Turkey. Hybrid technologies are being used more and more in the world and in line with this development, this bus runs on both and diesel and Ford Otosan ÜnšnŸ Factory electricity. Supported by TUBITAK, Otokar plans to start testing procedures in order to perfect this vehicle.

Concentrating on the goal of reducing greenhouse gas emissions, Fiat produces the small high-performance motors that are are used in Tofaß vehicles. Using 1.3 Multijet and 1.4 Turbo technologies, Fiat was recognized in both 2007 and 2008 as the brand with products

producing the lowest CO2 emissions. The latest innovative leap at Fiat was the ECO-DRIVE project, which gives

TŸpraß Üzmit Refinery everybody the chance to drive and be environment- friendly. Tofaß is also producing the Albea and Palio is working to develop the electric motor, battery and models, with a 1.4 liter gasoline motor that can be electronic control unit components in hybrid vehicles adapted to run on Autogas. and has started three different local projects, while at the same time is continuing its research on the hybrid TŸpraß's diesel sulphur reduction unit investments were truck prototype. completed in the Izmir refinery in 2005, in Izmit in 2007 and in KÝrÝkkale in 2008. Thanks to these units producing Otokar is producing self-designed public transportation in accordance with the EU standards that take effect on vehicles including the Doruk 230DG Model which runs January 1, 2009, the 10 ppm sulphur containing diesel on natural gas. The vehicle has an emission of EEV level is already on the market. Through the use of this high- between Euro 5 and Euro 6. Doruk 230DG induces a quality product, the greenhouse gas emissions from the Environmentally-Friendly Practices of Ko Group Aygaz: adopted forburners. was technology clean a used, fuel the changing by processing the water was changed in dishwashers, and, for applied method The year,. past the in standards environmental its raise to continued Arelik activities, Arelik: environment andadministrationofthese. the for measures developmental and protective on million 89.24 and certificates, emission the for on thereductionofemissions million on waste processing and elimination, 24.84 million environment reached114.08millionTLin2008:24.84 the of sake the for investments companies' Ko Investments atKo a greatdevelopmentfortheenvironment. vehicles are highly reduced. These investments constitute At the AliaÛa Filling Terminal, the quality of quality the Terminal, Filling AliaÛa the At With its products and its environmentally sensitive The totalamountKocompanies 114 million protection effortsin2008. invested inenvironmental and onmaterialsneeded facility at the TorbalÝ plant, the basic pollutant parameter Tat: the useofvolatileorganiccarbons isreduced. Otokar: system. is achieved through using solar to operate the automation energy isreduced;afurthersavingonelectrical electrical on dependency facility, refining the of unit Ford Otosan: and environmental risksareminimized. risks safety and health occupational any depot, material inflammable and tank toluen Facility's Filling KÝrÝkkale the at installed system extinguisher foam sensitive increase/flame heat new the with Also, 1 lt. of flocculation material is used for the same amount. now water, chemical of depot one refine to used been have chemicals of lt. 4.5 almost Whereas conditions. reduced, resulting in improved health and environmental been has chemicals the of effect corrosive the facility, water waste the at used chemicals of type the improve to investments to due Terminal, Filling YarÝmca the At consumption levelof600m drinking water supply of the facility, securing the healthy demineralization system. This system provides the annual manganate iron the and system osmosis reverse the of use through enhanced was water well artesian With the modernization of the biological refinery biological the of modernization the With With the solvent recycling facility investment, facility recycling solvent the With By applying solar energy at the ultrafiltration Aygaz YarÝmcaFillingTerminal 3 ofwaterperday. Efficiency Ko Group companies organized projects for energy efficiency and better energy economy in order to reduce greenhouse at Ko gas emissions.

CON (chemical oxygen need) is reduced to values much use less energy, the diesel desulphurization units, the under the limits given in the regulations, thus returning fuel improvement units and the fuel oil recycling project. for reuse a better refined water. An investment on the cooling tower in the Karacabey plant resulted in TŸrk Traktšr: As in previous years, in 2008 TŸrk Traktšr 1,344,000 tons of water being saved. continued its efforts to produce in accordance with current environmental protection principles. With an Tofaß: In the paint production unit, the passivated and investment of 583,000 TL, wastewater from the painting phosphated bathing waters have been further refined facility is processed by reverse osmosis, thus rendering for waste water recycling and both demineralised water it reusable and also saving energy. and the bathing chemicals have been regained. At the cataphoresis coating facilities, in order to replace the method of carrying the vehicle bodies on conveyors, we invested in the programmable robotic systems, hence reducing the tank volumes and reducing also water consumption, and heating fuel amounts. 56 TŸpraß: At the KÝrÝkkale Refinery, the project for the 57 refinement of waste mud was started in 2008 and is still ongoing. With this project, we aim to develop a method of eliminating dangerous waste at little cost, without TŸrk Traktšr production line harm to the environment, and on a recycling basis. By recycling dangerous waste into harmless material, we will produce added-value for both the company and the Efficiency at Ko environment. The entire Group and our companies endeavored to reduce greenhouse gas emissions, recycle wastewater, At the Izmit Refinery, we will recycle some of the de- adopt energy saving and efficiency methods and charged wastewater for re-use in suitable areas, through minimalize the amount of waste created during the operation of the new wastewater recycling unit. Other production. Ko Group companies contributed to the environmentally-friendly investments in TŸpraß are the reduction of greenhouse gas emissions through projects replacement of steam pumps with electric pumps that to increase energy efficiency and saving. In 2008, a 2%

reduction in CO2 equivalent greenhouse gas was achieved. Some exemplary efforts include:

Aygaz: In 2008, through the modernization of the heat operation furnaces at the Gebze Plant, the use of natural gas was reduced by 5%, or 395,000 Kwh.

Aygaz, one of the Group companies that has demonstrated its intention to continually develop its performance, is continuing to minimize its industrial waste. Along with revisions in the painting system, paint Tofaß production line consumption and production of paint mud was reduced. 2% Rate of reduction in greenhouse gas emissions in Group companies in 2008.

Ford Otosan Through these efforts, the amount of paint was reduced from 1.68 gr paint/kgLPG in December 2007 to 1.56 gr paint/kgLPG in December 2008. The paint mud was also reduced from 0.19 gr paint mud/kgLPG to 0.15 gr paint mud/kgLPG.

Ford Otosan: In order to reduce greenhouse gas Otokar Arifiye Factory emissions and increase fuel efficiency, these projects were put into effect: saving 3,533,892 Kwh electricity and 790,530 sm3 natural gas annually; reducing the number of trim station cabins and hence the total energy consumption; heating the oily wastewater tank at the ultra-filterisation refinery with solar power; building an Environmentally-Friendly Practices of Ko Group Environmentally-Friendly automation system; using a new type of coating that dries at lower temperatures; using air curtains at the TŸrk Traktšr Factory industrial entrances and exits; and optimizing the temperature and working periods at the central burners. lighting systems, fuel systems, and processes; limits on Otokar: By changing the vehicle washing process before the use of equipment when necessary; removal of the painting stage and building the recycling facilities, inefficient units; building isolation projects and other the use of volatile organic chemicals dropped below the projects for the betterment of heating systems. Thanks regulatory limits. to the projects, 3,201,821 Kwh of energy was saved in 2008. All Ko Group companies continued their work towards energy efficiency in 2008. Through energy preservation ENVER, the Energy Efficiency Campaign, was launched and efficiency enhancement activities, in 2008, we saved by state and private institutions and NGOs with the goal a total of 40,423 TEP/year on energy. Also, through new of increasing awareness about efficient energy use and products and technologies, our companies contributed placing energy efficiency on a wider societal agenda. to saving 4,959 TEP/year on energy. Our companies continue to develop energy saving projects in their plants. Based on the circular order issued in 2008, ENVER formulated a plan for a more efficient use of energy in Arelik: Developing projects towards the efficient use public institutions. In order to raise awareness on this of natural resources, Arelik runs projects on the efficient matter, the ÒNational Movement for Energy EfficiencyÓ use of electric motors; enhancements in equipment, was started, and the year 2008 was named Energy Recycling Through intensive efforts at Ko companies' plants, a total of 13,731,041 m3 water was wastewater recycled in 2008.

40,423 TEP/year Total of energy saved at Ko companies in 2008.

Efficiency Year. Aygaz, Opet, TŸpraß and the Ministry Tat Karacabey Works for Energy and Natural Resources became the main sponsors of the activities and public campaigns towards this end. Ford Otosan: Improvements in the process and materials used to produce the the gear wheels served to reduce During the events held to celebrate the organization's the amounts of energy, raw materials and industrial 15th anniversary, TEMA hosted environment analyst materials consumed. Lester Brown in Istanbul. Brown gave a speech entitled 58 To Take Action in Order to Save Human Civilization, Otokar: With various activities for reducing energy costs, 59 also the title of his latest book, in which he drew attention an energy saving of 2 million Kwh per year was achieved. to the importance of environmental policies for Turkey, especially considering its geographical location. The Tat: After the Cooling Tower started functioning at the aim of this conference was to increase awareness about Karacabey facility, 800 cubic meters/hour of water was environmental problems through the international saved. popularity of Lester R. Brown with regard to environmental matters. Support was also provided for Tofaß: Through a number of energy-saving projects, the ÒLet's turn off the lights for 10 minutesÓ campaign. approximately 7,088,793 Kwh of energy was saved in With this project run in cooperation with the Association 2008. The projects led to a 5% increase in energy of Local and Regional Television Stations, ENVER days efficiency. Improvements include building outer surface were organized in more than 20 cities and campaigns isolations, recycling waste heat, insulations along the carried out in neighbourhoods, schools and local heat pipes, frequency convertor applications on electrical meeting places. Started by the Ministry of Energy, one motors, and solar energy applications. million incandescent bulbs were replaced with compact fluorescent bulbs for free, which can lead to 80% savings TŸpraß: The unnecessarily high-energy consuming in electrical energy. The Energy Efficiency Campaign electric motors that had been in use at the Batman will continue with a number of activities, training classes, Refinery were replaced by mounting frequency convertors and campaigns in 2009 and 2010. on the pumps and fans, making possible a 1,203,000

Kwh/year energy saving and reducing CO2 emissions Aygaz: At the LPG pumping station of the YarÝmca into the atmosphere by 1,550 tons. Terminal, a variable speed control mechanism was added to the pumps to calibrate with the flow of the A further savings of 2,991,000 Kwh of electrical energy transferred fluid, which made possible an energy savings is planned for the coming years. The boiler feeding pump of 25-30%. With the use of smaller capacity generators, systems are renewed and instead of two pumps a 60% savings in fuel has been achieved in five plants. consuming a minimum of 388 Kw of electricity, one 9,230 people Recycled water at Ko companies in 2008 equals the yearly water consumption of that many people.

pump with enhanced technology is installed, which consumes 95 Kwh, thus saving an average of 293 Kwh per hour. In a year, this saves 12,474,768 Kwh of

electricity and reduces CO2 emissions by 19,960 tons. Through the steam and power optimization projects at the Üzmit Refinery, continuously available flow of electricity with low consumption is secured, the gas turbines are be produced in this facility. Built with the latest made to function at full capacity and the saved electric power is directed to the interconnected systems, thus technologies, the plant will be one of the most modern providing an extra gain. Through these operations, the in Europe. Through its direct connection to the refinery energy consumption of 76.2 kg refined fuel oil required and the harbor, the new facility will manufacture in to produce 1 ton of high-pressure steam in 2007 was accordance with the principles of respect for the Environmentally-Friendly Practices of Ko Group Environmentally-Friendly reduced to 71.8 kg in 2008. environment and human life.

Ko Group companies are concentrating on projects to Waste waters of the facility will be filtered in the biological 3 recycle wastewater. In 2008, 13,731,041 m of water waste water purification facility and used for watering was recycled. This value corresponds to the water the gardens of the plant. The stock tanks will be preserved consumption of 9,230 people in Turkey, according to in the security pool. To protect against the risk of leaks the figures issued by the Foundation for the Preservation of Natural Life. Some of these projects may be at the filling machines, tanks and pumps, collection summarized as follows: channels will be installed in at-risk areas. In order to avoid the spread of oil leaks from those channels, an oil Arelik: At the Electric Motor Plant, the mould cooling separator will be constructed at the site. The security fluid used at the BŸhler aluminium injection press was pools where the tanks are located will also be connected run through the filtration system and recycled. At the to the separator. In case of a dangerous event or leak Washing Machine Plant, the amount of waste water is accident, the oils will be directed to the separator through reduced by filtering the phosphate-containing rinse water the channels and will be led to the eliminator facilities and through using membrane filtration of the cataphoresis certified by the Ministry of Forestry and Environment for rinse water in a close circuit system. A total of 40,271 m3 final elimination. of water was recycled through these processes.

Opet: The new lubrication oil factory of Opet is being Solid waste materials from homes are to be collected in built on a 404,000 square meter area at the Izmir AliaÛa closed containers and picked up by the municipality. TŸpraß Facilities. Automotive oils and industrial oils will Paper waste will be delivered to recycling firms. Environmental Ko Group companies continued to provide environmentally- friendly training classes, and to support the development awareness education and wider use of environmentally-friendly technologies.

programmable robotics systems instead of on conveyors, allowing for a reduction of 25% in the volume of the process tanks, leading to a reduction of water consumption. Through the smaller volume in the tanks, a 12% saving on heating procedures was achieved.

TŸpraß: Through recycling de-charged water at the waste water recycling facility of the Izmit Refinery, some of the de-charged water will be gained back and used in suitable systems.

TŸrk Traktšr: Recycling of used water was made possible by reusing phosphate bathing water. At our industrial wastewater recycling plant, 13,165 m3 of waste water was recycled in 2008. The amount of recycled mud was 49,260 kg. Thanks to the recycling plant, 3,944 m3 of Contaminated containers will be sold to container firms water was gained and brought back into the operation 60 that have are certified by the Ministry. systems instead of city water. 61

A temporary waste collection depot will be established, Environmental Training in which each type of waste is stored separately. For Ko Group companies continued supporting the use of controlling air pollution, necessary measurements will environmentally-friendly technology and delivering be taken through continuous controls. Necessary environmental training in the framework of social measures will be taken to avoid soil and noise pollution. responsibility programs in 2008. Some of these activities were as follows: Otokar: 3,000 m3 of water is saved annually through chemical purification of water for reuse in the minibus Arelik: Several training projects were organized to paint pools. increase the use of environmental management methods and raise ecological awareness. Training courses Tofaß: Since 2002, waste waters are recycled and used providing information about national and international for watering gardens, saving a total of 50,000 m3 of regulations, ecological awareness education, Arelik water. Through the passsivation and phosphating environment policies and the ISO 14001:2004 systems, demineralized water and the bathing chemicals environment management systems, internal auditing, are recycled at the paint production unit. At the waste management, and the environmental effects of kathathoresis facilities, bodies are carried through the chemicals were all parts of this program.

Environmental training given at Ko Group companies 2007 2008

Environment training sessions provided to personnel 58,173169,945

Environment training sessions provided to contractors 39,739 43,397

Environment training in social responsibility projects 1,174,460 2,230,177

*(per person/per hour) Environmentally-Friendly Practices of Ko Group h mc-edd nryefcet opesr in compressors energy-efficient much-needed the provide will which designed, was coolers R600a using series compressor platform environment-friendly new, Arelik: Environmental Awards students. school teachers who, in turn, taught more than 1.5 million primary among out carried were activities educational Association), Protection Environment Marine (Turkish BankasÝ: Kredi YapÝ members ofthesupplierindustries. the among out carried being is resources natural of adaptation toenvironmentalregulations risks, environmental detecting on Work industries. supplier the at workers the among and personnel the among both awareness, environmental increasing Traktšr: TŸrk 1,000 students. of total a reaching district, the in schools primary seven limited natural resources and recycling was carried out in the of use efficient methods, energy-saving pollution, pollution resources, methods reducing for environmental Environment (Eko-kar), educational work on environmental the and Ecology for Club Otokar the of coordination the with addition, In conducted. were inspections Otokar: group withthesupportofMinistryEducation. Ford Otosan: Milli SaraylarNurserySchool. environmental awarenessprogramwaspresentedatthe an an Istanbul, of Governor the of project action and Aygaz: Intheframeworkofenvironmentaleducation During 2008, 12 supplier industry environmental With the MTS efficient compressor project, a project, compressor efficient MTS the With Education was provided to the distributors dcto wr ws efre for performed was work Education In cooperation with the TURMEPA the with cooperation In and efficientuse Aygaz: 7462 Swashingmachine. Blomberg the and machine, washing S 7260 WAF ÒEcology AwardÓwinnerswere and NaturalResources. Energy of Ministry the by organized Contest Project the ÒProjects for Increasing Efficiency in Industry (SEVAP)Ó at of category the in prize jury special the won Refinery TŸpraß: Environment Award. Bilgisu Þehabettin Industry's of Chamber Kocaeli Commission Environmental Office. Ford European also won the the the by run competition a 2007-2008, at theRECEUEnvironmentAwards-Turkishprogramin Ford Otosan: of themostprestigiousawardsEurope. one as regarded and Office Environmental Commission European the by run competition a 2007-2008, for program Turkish - Awards Environment EU REC the at In 2008, at the Elektrabregenz, 5 Elektrabregenz, the at 2008, In Devices. Electrical for Board Research Resources Natural and Energy of Ministry the by organized contest a OrbitalÓin for its first A++ No-Frost refrigerator called the ÒNew Black In 2008,ArelikwontheÒMostEfficientProductÓAward the productionofenergy-efficientproducts. in plant industrial successful most the as commended was Plant Compressor Eskißehir Arelik The 2007. in Natural Resources Research Board for Electrical Devices Project Contestorganizedbythe the in category EfficiencyÓ ÒEnergy the in prize first won refrigerators. The product that was an output of this project Aygaz won 3 Two projects implemented at the TŸpraß Batman Ford Otosan won 2 rd prize in the management category Solo-Kombi KFS1443C, nd Ministry ofEnergyand th prize for management Arelik AnkaraFactory Plus X Contest, the Contest, X Plus Environmentally- All Ko companies are run by an environmental management system that is based on continuous development, and the friendly practices production of environmentally-friendly products.

Other Environmentally-Friendly Practices of the guide and to distribute responsibilities, a at Ko communication plan was added. The environmental accident reporting system was also revised. The goal All Ko companies are run by an environmental hereby is to reduce harmful effects and continually management system that focuses on continuous enhance performance by incorporating lessons learned development and the production of environmentally- from previous incidents. All units are routinely maintained friendly products. Our environmental management system in the refineries, in order to guarantee their safe operation is certified with the ISO 14001 Environmental and to avoid the emergence of negative conditions, thus Management System Standard. We perform internal reducing the environmental impact risk. audits regularly in our companies, in order to guarantee that the environmental management system is applied Arelik: In 2008, Arelik sponsored the Green Screen efficiently and permanently. The Ko companies are project of NTV. This project was designed to focus already prepared for the EU directives and develop their popular attention on the issue of global warming and products within this framework. In fact, 32 of our plants other environmental topics in order to increase received the ISO 14001 certificate by 2008. consumer awareness. Arelik is the first brand to introduce A-class products to Turkish consumers and TŸpraß: TŸpraß developed a system to control extends great care to create environmentally-friendly 62 environmental risks in its refineries. With this system, products. 63 risky areas in the facilities can be detected so that the appropriate precautions can be taken in advance. In 2008, the Energy Efficiency Project ENVER was sponsored further with a campaign started by the In 2007, a Risk Evaluation Chart (REC) Guidebook was Ministry of Energy and Natural Resources to raise issued and put into effect. With this chart, the effects of awareness about energy efficiency in the broader public. our activities on humans, entities and the environment With TV ads and press releases, the motto ÒOne Keban are evaluated. With a proactive approach, possible risks concerning the environment are detected and it becomes possible to develop measures through root cause analysis 32 with a focus on medium- and high-grade risks. Number of our plants with an To this end, environmental dangers are documented, and priorities are set for managing dangers and their ISO 14001 Certificate in 2008. effects and for detecting risks and their management, as well as directing resources (including labour power as well as monetary resources) towards critical interventions.

TŸpraß prepared another guide for monitoring performance, its evaluation and improvement at the refineries: the ÒEvent Classification, Research and Reporting GuideÓ (OSAR). All events are reported, including environmental events, in accordance with this guide, and are archived in the general data base. In order to increase the effectiveness and broaden the use Environmentally-Friendly Practices of Ko Group and economicsolutions, operations ontheenvironmentthroughscientific resources tominimizewasteatsource, disposal requirementsandensureeffectiveuseof access environmentalinformationanddata, development, investments, management atthehighestlevel, developing uniquetechnologies, ¥ ¥ ¥ ¥ ¥ ¥ ¥ ¥ ¥ Ko Groupaimsto: ¥ healthy, safeandenvironmentally-friendlyfacilities, enable protection of the environment, and establish in thisareaclosely, its vision lasting impression in both Turkey and the world with only todaybutalsointhefuture, andthusleavea KO‚ GROUPENVIRONMENTALVISION Evaluate the environmental impact of each facility, Becomeanenterprisereferred towithpraise,not Followalladvances,researchanddevelopments Mitigatethepotentialadverseimpactofour Developtechnologiestominimizetreatmentor SetupEnvironmentalInformationSystemsto Undertakeactivitiesthatsupportsustainable Beapioneerinenvironmentally-friendly Provideemergencyandenvironmentalrisk Providesolutionstoenvironmentalproblemsby sensitivity at Ko Environmental economic solutions. arising from its activities through scientific and Ko Group aims to reduce the negative effects advertisements informing about the environment-friendly, Various 2007. in started Campaign Awareness Aygaz: well asallsponsored carried outinconjunctionwith environmentalNGOsas projects awards, environmental products, A+ and A on information provides site The www.cevremizicin.com. website the developed Arelik issues, environmental to approach its about consumers inform to Striving brand dishwasherssoldduringJune2008. given to the TEMA Oak Project for every Arelik or Beko be to seeds oak nine sponsoring year, this campaign Arelik implemented one other environmentally-sensitive project. this for support Arelik's about informed is consumer the and propagated is YearÓ One in Aygaz continued in 2008 to conduct its Autogas activities onenvironmentalissues. KO‚ GROUP ENVIRONMENT POLICY

The Autogas Information Operation Ko Group aims to and is committed to the following that Aygaz started in 2007 in order points in all processes undertaken at its companies: to inform the public about the safe, ¥ Complying with national and international legislation, environmental laws and regulations and 64 environmentally-friendly and high other obligations approved by the parliament, 65 performance features of autogas ¥ Preventing environmental pollution by following was continued in 2008. scientific research and technological advancements and continuously improving its environmental performance, safe and high-performance features of autogas were ¥ Protecting natural resources and using them in published in newspapers and magazines. Projects promoted in automobile magazines and through other the most effective manner, media stressed the safety of autogas and instructed the ¥ Controlling potential environmental impact from public about safe consumption methods for this energy the design phase until the end of life cycle and source, thus creating a positive perception about it. mitigating damage, According to survey results, after the awareness campaign ¥ Reducing waste at the source as much as possible started in 2007, the rate of adopting the idea that and recycling waste material, switching to autogas is friendly to the environment rose ¥ Laying down environmental aims and objectives from 3.97 on a scale of 5 at the beginning of 2008 to and continuously contributing to developments in 4.06 by the end of the year. The rate of the notion that this area, autogas is a safe energy source rose from 3.99 to 4.06 ¥ Providing environmental training to all employees on a scale of 5. Environmental awareness rose from 3.90 at Ko Group and enhancing the environmental to 4.25 among Aygaz users and the notion of feeling awareness of all employees from top management safe using this technology rose from 3.93 to 4.07. The to the smallest unit, rate of being in agreement with the expression that ¥ Communicating with all interested parties and autogas can be used without any reservations rose from sharing information when necessary, 3.92 to 4.18. The campaign also served the interests of ¥ Supporting and participating in environmental car producers. In 2007, only one firm was producing activities of governmental and nongovernmental LPG vehicles, while that figure rose to eight by the platforms. beginning of 2009. Ethical Values at Ko

ÒIt is our principle to build all our relations on goodwill and understanding, with a focus on justice and mutual benefit, and to comply with ethical rules and the law. Another one of our basic principles is to fulfill our duties towards the people of today and towards future generations.Ó Vehbi Ko

Our Group's principles stress compliance with laws, respect for social norms and adherence to universal ethical rules. In order to understand the significance we place on these values, it would suffice to go through the Ko Group's Principles, laid down under the lead of our founder, Vehbi Ko: ÒSuperior business ethics and compliance with the principles of honest work are our norms.Ó

Within the framework of corporate responsibility, the Group companies work on environmental and social issues and fulfill their duty of sustainable development in line with all existing laws, ethical principles, and human rights. The parts of the Global Compact concerning ethics are also directed towards increasing and supporting efforts in this direction.

All companies of the Ko Group regard it as their responsibility to fulfill all their legal duties and generate high profits for their shareholders. In order to carry out this responsibility in the best way, an active system of controls has been established in the Group.

Ko Group pays the highest amount of taxes of any holding company in Turkey. This and the importance we lay on transparency* are results of strict adherence to the rules in our countries of operation and to the standards set by international trade organizations. This adherence is guaranteed through the process and control procedures that are integrated into our company policies as standard procedure. Ko Group Control System Components

Ko Holding Group Audit Board

National and International Laws and Standards

Ko Group Research conducted by Procedures SabancÝ University and S&P Company Internal in 2008 revealed that Ko Audit Mechanisms Holding and Aygaz are counted among the five most Company-Specific Procedures transparent companies in Turkey.

In addition to the preventive measures in our procedures, detected, the company management is warned in a the auditing process is an area where all risks of abuse timely manner and preventive measures are taken are analyzed. The central auditing process is directed proactively. by the Audit Board, which reports directly to the ¥ Through the Auditing Portal and the Ko Audit Chairman of the Board of the Ko Group. There are software, our personnel in the Financial Affairs and also internal monitoring functions in seven of our 10 Accounting departments are kept informed constantly companies. The internal auditing units of both Ko about regulations, best practices and the principles of Holding and the companies actually pass through five the Ko Group. basic monitoring processes within the framework of the ¥ The routine analyses and audits conducted by above-mentioned control system. independent auditing firms provide our companies with 66 a global perspective on maintaining compatibility with 67 The five main processes as listed in the table are international standards of auditing and risk management. components of one integrated structure; each component establishes control points where abuses are prevented or detected on time. The Òabuse * Research conducted by SabancÝ University and S&P in 2008 revealed that Ko Holding and Aygaz are counted among the monitoring processÓ in particular comprises an audit five most transparent companies in Turkey. that focuses solely on abuses.

Besides these processes, some examples of steps aimed at preventing company internal abuses are as follows: ¥ Through the Ko E-Audit software developed by Ko Holding, company results are monitored by results analysis. In case extraordinary circumstances are

Risk

Abuse Process AUDITING

Law and Financial Compliance Charts Auditing The Ko Group companies central auditing procedures are conducted by the Group Audit Board which reports directly at Ko to the Chairman of the Board of Directors of Ko Holding.

Examples of some additional applications of the ÒRules of Business EthicsÓ in our companies are as follows: ¥ Arelik has been one of the first companies to sign the ÒRules of Ethical ConductÓ as set by CECED (European Committee of Domestic Equipment Manufacturers) in its sector. With the report it published in 10 languages titled, ÒArelik Human Resources Policies, Common Values and Ethical CodesÓ, Arelik became a pioneer in this field. ¥ Ford Otosan, Tofaß/Fiat and YapÝ Kredi/Unicredit companies of our Group, which have global partners, not only make use of our Group's principles in ethical matters, but also from the long-acculmulated corporate culture of our foreign partners and reflect those in all of their business practices and relationships. Through the reporting and All companies and units of the Ko Group are analyzed audit systems and through the constantly by existing reporting and monitoring systems internal, and external control and internal and external audits, against cases of fraud

Ethical Values at Ko processes, all companies and and abuse. units of the Ko Group are

All suspicious behaviours concerning fraud can be constantly monitored against shared with the directors of the Ko Holding Audit Team abuses. through direct telephone contact. In this way, the employees can transmit their notifications directly and - To inform the related public authority or shareholders, without being subject to any influences. In order to work more efficiently on cases of abuse, The procedure of what to do in cases of fraud is set three Certified Fraud Examiners, who have been strictly by Ko Group directives. According to procedure, exclusively trained for such cases, are hired. In addition, when suspicion of fraud arises, the General Manager is in order for the audit personnel of the company to be informed by the related department head. Next, the able to equip these experts with an accumulation of Company General Manager informs the business unit knowledge on international procedures, they are director and the Audit Board, with all due haste. The encouraged and supported to earn the CIA (Certified issue is at first investigated by the Audit Board, which Internal Auditor) certificate. By the end of 2008, the Ko inform the related superior management. In some Holding Group Audit Board included 10 people with situations, a decision can be made to conduct an inquiry CIA certificates, four chartered accountants and three directly by the internal audit team which then reports certified public accountants. its findings. While a corruption query is being conducted, the following steps are carefully applied: The total amount of material and monetary support - To shed light on the subject as soon as possible, donated to political parties, politicians and related - To respect rights of personal privacy, institutions in those countries where Ko Group operates - To start the necessary legal procedure, equals zero. THE GLOBAL COMPACT

The Global Compact consists of 10 The Global Compact has been propagated According to the Global Compact website, principles of human rights, working by the United Nations since 2000 and has by the time this report is released, over conditions, environment and corruption. been adopted exclusively on a voluntary 8,700 participants from 130 countries will These principles are based on a guiding basis. All efforts to comply with the have been reached by the Global Compact, perspective for opening up new ways of principles are made public through 6,400 of them from the business world and thinking for businesses and companies, reports accessible on the UN website 2,300 from the NGOs, unions, associations, especially concerning risk management, (www.unglobalcompact.org). foundations, local administrations, and increase in efficiency, morale and motivation academic circles. of employees, increasing fidelity among employees, brand consciousness and creating new markets.

INDEX

Vision and Strategy 2- 9, 64, 65 Labour Standards Principle 8: The business world should Organizational Profile 8-17 Principle 3: Businesses should uphold every kind of activity and initiative that Content of the Report 6 the freedom of association and the promotes greater environmental Economic Performance Indicators effective recognition of the right to responsibility; and 2- 5, 9 collective bargaining; Principle 9: The business world should Social Responsibility Activities Principle 4: the elimination of all forms encourage the development and diffusion 18-31 of forced and compulsory labour; of environmentally friendly technologies. Vehbi Ko Foundation activities Principle 5: the effective abolition of child Pages 50-64: 18-20 labour; and Environmentally-friendly activities Principle 6: the elimination of discrimination 50-53 Support for education19-22 in respect of employment and occupation. For My Country Forests 51-52 Culture and arts 24-29, 30-31 Hiring process 39 Environmentally-friendly products 53, 54 Union rights 40 Investments in the environment 56, 57 The Ten Principles of the UN Global Work Environment Evaluation Survey 41 Productivity 57-59 Compact Most successful Ko members 42, 43 Wastewater recycling 60, 61 Human Rights Ko, My Family program 44 Environmental education 61, 62 Principle 1: The business world should Occupational health and safety Other environmentally-friendly activities support and respect the protection of 44-46 63-65 internationally proclaimed human rights; Suggestion systems 46 Environmental vision 64 and Employees and sports 46, 47 Environmental policies 65 Principle 2: The business world should MLMM Project volunteers 48, 49 determine that they are not complicit in Anti-Corruption human rights abuses. Environment Principle 10: Businesses should work Health screening in our workplaces Principle 7: The business world should against corruption in all its forms, including 33, 34 support precautionary approaches to extortion and bribery. Local development 36, 37 environmental challenges; Pages 66-68

DISCLAIMER

This Report has been prepared by Koc purposes only and it is not intended to sources believed to be reliable. However, Holding A.S. (ÒKocÓ or ÒKoc HoldingÓ or form the basis of any investment decision. this does not constitute a representation, ÒKoc GroupÓ) in the context of the United It does not constitute or form part of an guarantee, warranty or undertaking of Nations Global Compact initiative which offer to sell or issue, or a solicitation of any nature on Koc Group. Accordingly, Koc adhered to on March 30, 2006. an offer to purchase or subscribe for, any none of Koc Group or their respective securities or other interests in the Koc advisers, directors or employees shall be All information and opinions contained Group and no legal relations shall be liable for any direct, indirect or in this Report, which does not purport to created by its issue. consequential loss or damage suffered be comprehensive, have been provided by any person as a result of relying on to by Koc Group and have not been All information contained in this Report any statement in or omission from this independently verified for this purpose. and associated documents was believed Report or in any other information or to be accurate at the time of writing, communications in connection with the This Report is prepared for information expressed in good faith and based on Report. www.koc.com.tr