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ANNUAL REPORT 2010 Dr. Üzeyir Garih 1929-2001 WE WILL ALWAYS REMEMBER YOU WITH LOVE AND RESPECT... ALARKO HOLDİNG A.Ş. $118$/£5(3257£ 0D\££ *HQHUDO£$VVHPEO\£0HHWLQJ £)LVFDO£<HDU 5HJLVWHUHG£&DSLWDO 7/£ ,VVXHG£&DSLWDO 7/£ CONTENTS page Message from the Chairman 05 The Board of Directors and Statutory Auditors of Alarko Holding A.Ş. 06 The Alarko Group of Companies 08 10 General Organization Management Staff 12 Agenda of the Ordinary General Assembly 14 Board of Directors' Annual Report 15 Capital and Percentage of Shareholdings 17 in Subsidiaries and Participations Earnings from Subsidiaries and Equity Participations 18 Subsidiaries of Alarko Group 19 Contracting Group 21 Energy Group 27 Industry and Trade Group 33 Tourism Group 39 Land Development Group 43 page 47 Seafood Products Group Business Volume and Perspectives for 2011 50 51 Taxes Paid and Personnel Expenses Developments During the Last Five Years 52 53 Basic Ratios and Other Information Social & Industrial Activities 54 Profit Distribution Recommendation 55 Statutory Auditors' Report 56 57 Dr. Üzeyir Garih's View Report on Compliance with Corporate Governance Principles 58 Independent Auditors’ Report 64 Consolidated Financial Statements 66 Notes to the Consolidated 71 Financial Statements Conclusion 118 $ODUNR£+ROGLQJ£$ð££$QQXDO£5HSRUW 0(66$*(£)520£7+(£&+$,50$1 with distinctive business models. With these values in mind, I am happy to inform you of the projects realized and finalized in 2010. We structured the operation of the Meram Electricity Distribution Company that covers Konya and the surrounding provinces and completed the first year successfully. Our 82 MW investment as an annex to our operating gas fired power plant in Kırklareli was completed and commissioned. The power plant's capacity has attained 164 MW. The Adana Metro and Samsun Rail System projects, two Esteemed Shareholders, of our Contracting and Construction activities, have been 2010 typifies a year of restructuring in global economies. completed and are in operation. The direct Taksim New standards, balances and perspectives have Darüşşafaka connection of the Istanbul Metro built in emerged. While competition is ever increasing, our accordance with European standards is being used awareness is directing us towards change. effectively. The Seyrantepe and Hacıosman connections are operating successfully. The world is changing and the momentum of change is accelerating considerably. We must first question our Our group has put its objective of developing on a global preconceptions to understand this change. We must basis to the fore. 2010 has been a year in which Alarko break the chains and embargoes of our mind. Our ideas, has raised the bar in its growth. Our turnover increased perceptions and solutions have to keep pace with the by 33 % in 2010. I firmly believe that our existing rapidly changing conditions. companies will exceed their 2011 targets. Our primary aim is to further accelerate the growth we have attained We, as the Alarko Group of Companies, have realized so far particularly in the areas of national and the changing conditions and organized a “Search international contracting, energy production and tourism Conference” in March 2011. Following a collective sectors in 2011 and the following years. evaluation process, we designed our new Vision and Mission. The managerial staff of Alarko Holding with a history of 57 years is confident about the future and would like to 2XU£YLVLRQ share with your esteemed committee the joy of seeing To become a stronger, well respected, pioneering global that the strong infrastructure developed incessantly is company that grows through the diversity it embraces successful. and differentiation it creates. With love and respect, 2XU£PLVVLRQ To carry Alarko to the future by adopting the highest İshak Alaton universally accepted values and exceeding expectations Chairman $ODUNR£+ROGLQJ£$ð££$QQXDO£5HSRUW %2$5'£2)£',5(&7256 £òVKDN£$/$721££Chairman - (18.05.2010 - 17.05.2011) £ò]]HW£*$5ò+££Vice Chairman - (18.05.2010 - 17.05.2011) £9HGDW£$NVHO£$/$721££Vice Chairman - (18.05.2010 - 17.05.2011) £$\KDQ£<$958&8££Director, Chief Executive Officer - (18.05.2010 - 17.05.2011) £*QHU£.2d(/££Director - (18.05.2010 - 17.05.2011) £'DOLD£*$5ò+££Director - (18.05.2010 - 17.05.2011) £/H\OD£$/$721££Director - (18.05.2010 - 17.05.2011) £$KPHW£9XUDO£$.,ï,.££Director - (18.05.2010 - 17.05.2011) %2$5'£2)£$8',7256 ,1'(3(1'(17£$8',7,1*£&203$1< 3URI£'U£$KPHW£=H\\DW£+$7ò32í/8 Denet Bağımsız Denetim Auditor Yeminli Mali (18.05.2010 - 17.05.2011) Müşavirlik A.Ş. 0HPEHU£%'2 $\NXW£%$<&$1 ,QWHUQDWLRQDO£1HWZRUN Auditor (18.05.2010 - 17.05.2011) $ODUNR£+ROGLQJ£$ð££$QQXDO£5HSRUW 7+(£$/$5.2£*5283£2)£&203$1,(6 7+( ALS‹M ALARKO SANAY‹ TES‹SLER‹ VE T‹CARET A.fi. 99,82 % ADANA SUBWAY DIVISION &2175$&7,1* ‹STANBUL SUBWAY (TAKS‹M - YEN‹KAPI ELECTRO - MECHANIC SYSTEMS) CONSTRUCTION ALS‹M ALARKO - OHL - GYO J.V. TCDD ANKARA - ESK‹fiEH‹R HIGH SPEED TRAIN PROJECT *5283 ASTANA WATER PROJECT CYPRUS WATER PROJECT ENGINEERING SERVICES ALS‹M-MAKYOL JOINT VENTURE, ISTANBUL METRO 4. LEVENT - AYAZA⁄A SECTION, CONSTRUCTION OF ELECTRO-MECHANICAL SYSTEMS ALARKO-CAF JOINT VENTURE - ANTALYA LIGHT RAIL TRANSPORT SYSTEM SAMSUN LIGHT RAIL TRANSPORT SYSTEM PROJECT KIRKLAREL‹ COMBINED CYCLE POWER PLANT PROJECT KIEV BORYSPIL AIRPORT PROJECT ANKARA METRO ELECTRO - MECHANICAL WORKS AND SIGNALIZATION SYSTEMS CONSTRUCTION WORKS ALTEK ALARKO ELEKTR‹K SANTRALLARI TES. ‹fiL. VE T‹C. A.fi 99,81 % 7+(£(1(5*< HASANLAR HYDROELECTRIC POWER STATION BERDAN HYDROELECTRIC POWER STATION *5283 TOHMA HYDROELECTRIC POWER STATION KIRKLAREL‹ NATURAL GAS COMBINED CYCLE POWER PLANT MERAM ELEKTR‹K DA⁄ITIM A.fi. 49,91 % ALCEN ENERJ‹ DA⁄ITIM VE PERAKENDE SATIfi H‹ZM. A.fi. 49,91 % ALARKO ENERJ‹ ÜRET‹M A.fi. 100,00 % ALARKO CARRIER SANAY‹ VE T‹CARET A.fi. 43,19 % 7+(£,1'8675< THE MAIN MANUFACTURING PLANT $1' RADIATOR MANUFACTURING PLANT DEALER SALES 75$'(£*5283 SYSTEM SALES AFTER MARKETS SERVICE TOTALINE DIVISION FREE ZONE BRANCH ALARKO FENN‹ MALZEME SATIfi VE ‹MALAT A.fi. 99,93 % ALMÜT ALARKO SINA‹ GEREÇLER ‹MALAT VE MÜMESS‹LL‹K A.fi. 94,31 % TÜM TES‹SAT VE ‹NfiAAT A.fi. 49,58 % ALAMSAfi ALARKO A⁄IR MAK‹NA SAN. A.fi. 99,97 % SARET SANAY‹ TAAHHÜTLER‹ VE T‹C. A.fi. 100,00 % ATTAfi ALARKO TUR‹ST‹K TES‹SLER A.fi. 99,82 % 7+(£7285,60 HILLSIDE BEACH CLUB HILLSIDE CITY CLUB - ET‹LER *5283 HILLSIDE CITY CLUB - ‹ST‹NYE HILLSIDE CITY CLUB - TRIO CINECITY - ET‹LER CINECITY - TRIO CINECITY - OLIVIUM CINECITY - K‹PA HILLSIDE SU OTEL SANDA SPA (HBC, HCC-ET‹LER, HCC-‹ST‹NYE, HCC-TRIO, HSH) ALARKO GAYR‹MENKUL YATIRIM ORT. A.fi. 51,03 % 7+(£/$1' ALDEM ALARKO KONUT ‹NfiAAT VE T‹CARET A.fi. 99,81 % '(9(/230(17 AL-R‹VA PROJES‹ ARAZ‹ DE⁄ER., KONUT ‹Nfi. VE T‹C. A.fi. 40,00 % AL-R‹VA ARAZ‹ DE⁄ER., KONUT ‹Nfi. VE T‹C. A.fi. 40,00 % *5283 AL-R‹VA ARAZ‹ DE⁄ER., KONUT ‹Nfi., TUR‹ST‹K TES., GOLF ‹fiL. VE T‹C. A.fi. 40,00 % ALARKO DEYAAR GAYR‹MENKUL GEL‹fiT‹RME A.fi. 49,91 % MOSALARKO J.V. 50,00 % ALFARM ALARKO LERÖY SU ÜRÜNLER‹ SAN. VE T‹C. A.fi. 49,99 % 7+(£6($)22' ATAfiEH‹R : MANAGEMENT & SALES OFFICE 352'8&76 SEAFOOD PRODUCTS FACTORY : SUAD‹YE / ‹ZM‹T ANTALYA : SALES OFFICE £*5283 $ODUNR£+ROGLQJ£$ð££$QQXDO£5HSRUW *(1(5$/£25*$1,=$7,21 %2$5' 2) ',5(&7256 35(6,'(1&< $'9,6256 683(59,625< %2$5' &+,() (;(&87,9( 2)),&(5 0$1$*,1* ',5(&7256 6(1,25£9,&( (;(&87,9(£9,&( 6(1,25£9,&( 6(1,25£9,&( 6(1,25£9,&( 35(6,'(17 35(6,'(17 ),1$1&,$/ 35(6,'(17 35(6,'(17 35(6,'(17 ,1'8675<£$1' $1$/<6,6£6<67(0 ),1$1&,$/ $&&2817,1* $8',7,1* $1'£3/$11,1* 75$'( * Organizational level is limited to the “Vice President” level in this chart. (;(&87,9( 68%6,',$5,(6 &200,77((6 $1' 3$57,&,3$7,216 '(387<£&+,() (;(&87,9( 2)),&(5 &2175$&7,1* (;(&87,9(£9,&( (;(&87,9(£9,&( (;(&87,9(£9,&( (;(&87,9(£9,&( 35(6,'(17£/$1' (;(&87,9(£9,&( 35(6,'(17 35(6,'(176 35(6,'(17 35(6,'(17 /$1' '(9(/230(17 7285,60 &2175$&7,1* (1(5*< '(9(/230(17 &216758&7,21 $ODUNR£+ROGLQJ£$ð££$QQXDO£5HSRUW 0$1$*(0(17£67$)) &25325$7(£35(6,'(17 İSHAK ALATON 0$1$*,1*£',5(&7256 İZZET GARİH VEDAT AKSEL ALATON &+,()£(;(&87,9(£2)),&(5 AYHAN YAVRUCU '(387<£&+,()£(;(&87,9(£2)),&(5 M. ALPER KAPTANOĞLU CONTRACTING 6(1,25£9,&(£35(6,'(176 MEHMET AHKEMOĞLU AUDITING MUSTAFA FİLİZ ACCOUNTING ÜMİT NURİ YILDIZ FINANCIAL ANALYSIS, SISTEM & PLANNING (;(&87,9(£9,&(£35(6,'(176 H. ÖNDER ŞAHİN INDUSTRY & TRADE A. ÖNDER KAZAZOĞLU ENERGY DISTRIBUTION ADNAN YAĞMUR ENERGY GENERATION EDİP İLKBAHAR TOURISM HARUN H. MORENO LAND DEVELOPMENT - BUSINESS DEVELOPMENT / REAL ESTATE INVESTMENT CO. GENERAL MANAGER AYKUT BAYCAN CONTRACTING - ACCOUNTING BEKİR BORA CONTRACTING - PROJECT FINANCE & LOCAL BUSINESS DEVELOPMENT ONAT BİTİK CONTRACTING - CONSTRUCTION '(387<£6(1,25£9,&(£35(6,'(176 ÖMER ÇELİK FINANCING TURGUT ÇELİK INFORMATION TECHNOLOGY '(387<£(;(&87,9(£9,&(£35(6,'(176 B. BÜLENT AKKAN CONTRACTING - CONSTRUCTION BÜLENT ÇALIŞKAN CONTRACTING - BUSINESS DEVELOPMENT - FOREIGN COUNTRIES F. NEŞE UCAR CONTRACTING - LOGISTICS HALUK MARTAĞAN CONTRACTING - PLANNING, ANALYSIS & TECHNICAL SUPPORT KORHAN UĞUR ÖZBAYSAL CONTRACTING - BUSINESS DEVELOPMENT - FOREIGN COUNTRIES MUSTAFA V. GAFUROĞLU CONTRACTING - BUSINESS DEVELOPMENT - FOREIGN COUNTRIES NAİM TÜRKOĞLU CONTRACTING - CONSTRUCTION EROL UÇMAZBAŞ ENERGY DISTRIBUTION İSMET GENÇER INDUSTRY & TRADE HALUK FERİZOĞLU INDUSTRY & TRADE - DEALER SALES HIRANT KALATAŞ INDUSTRY & TRADE - MARKETING AND SUPPORT KEMAL BIÇAKÇI INDUSTRY & TRADE - AFTER MARKETS MURAT ÇOPUR INDUSTRY & TRADE - FACTORIES KADİR EKE LAND DEVELOPMENT - MARKETING, SALES 352-(&7£&2175$&7£0$1$*(56£*(1(5$/£0$1$*(56£5(*,21£0$1$*(56£$66,67$17£*(1(5$/ 0$1$*(56£'(387<£352-(&7£0$1$*(56£)$&725<£0$1$*(56 ABBAS ŞAHİN CONTRACTING - PROJECT CONTRACT MANAGER - ASTANA WATER SUPPLY PROJECT KADİR BAŞOĞUL CONTRACTING - PROJECT CONTRACT MANAGER - KIRKLAREL‹ 2 PROJECT M.