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HUMAN-SPACE-LIFE Human... Space... Life. 2014 ANNUAL REPORT Operating in the construction sector, we conduct our business activities by strengthening concrete, steel and each square meter of construction, backed by our many TEPE İNŞAAT years of experience and our innovative ideas. We construct “living buildings” that breathe and share 2014 ANNUAL REPORT life with people; buildings that add value to life in each and every square meter. This year, we present our annual report accompanied with a special project. We reveal the human-space synergy and this unique harmony using snapshots by Mehmet Turgut, one of the leading photographers in Turkey and the world. www.tepeinsaat.com.tr HUMAN-SPACE-LIFE MEHMET TURGUT TEPE İNŞAAT 2014 ANNUAL REPORT Who is Mehmet Turgut? Mehmet Turgut, named after his grandfather, was born on July 21, 1977 in Ankara. His profession as a photographer has truly shaped his destiny. For many years, he conducted studies on theoretical photog- raphy, printing techniques, coloring, pencil drawing and photo processing. Over time, he devoted him- self to producing and shooting fictional photographs. He has received numerous awards both in Turkey and abroad, from world-renowned organizations such as the Photographic Society of America (PSA) and Austria Super Circuit. Some examples of his recent work include cover photographs for the “19 Best of Patricia Kaas” album of the world famous French singer; cover photographs used for “Live in Europe,” a concert album by Dutch musician Anneke van Giersbergen; and cover photos for “Let It Die,” the latest single from Ozzy Osbourne. In 2009, Mehmet Turgut was named “The Year’s Photography Artist” by the Turkish Art Institution. He is also the owner and creative director for “46” magazine, which has been published since March 2010. At a Glance 4 Key Indicators in 2014 10 Major Developments in 2014 12 Tepe İnşaat in Brief 16 Vision, Mission and Corporate Values 20 Key Financial Indicators 21 Subsidiaries and Affiliates 22 Bilkent Holding 28 A 46-Year History Dedicated to Creating Long-Term Value 42 Message from the Management 44 Board of Directors, Senior Management Operations in 2014 48 Projects 48 Business Development and Operation Map 72 Subsidiaries 72 TAV Havalimanları (TAV Airports) 86 TAV İnşaat (TAV Construction) 92 İDO (Istanbul Sea Buses) Sustainability 100 Human Resources Policy 102 Occupational Safety, Environmental and Quality Policy 106 Bilkent University Financial Statements 109 Independent Auditors Report, Financial Statements and Footnotes Operating in the construction sector, we conduct our business activities by strengthening concrete, steel and each square meter of construction, backed by our many years of experience and our innovative ideas. We construct “living buildings” that breathe and share life with people; buildings that add value to life in each and every square meter. This year, we present our annual report accompanied with a special project. We reveal the human-space synergy and this unique harmony using snapshots by Mehmet Turgut, one of the leading photographers in Turkey and the world. HUMAN, SPACE, LIFE 1 2 TEPE İNŞAAT 2014 ANNUAL REPORT AT A GLANCE HUMAN, SPACE, LIFE 3 Key Indicators in 2014 1,334,939 885 Equity Size (TL Thousand) Total Park Mozaik Residence Units Backed by a professional management approach gained through many Park Mozaik Tepe & Mesa Project, carried out by a Tepe İnşaat and years of experience and deep industry expertise, Tepe İnşaat increased Mesa Mesken joint venture, is a development consisting of 885 residen- its equity to TL 1,334,939 thousand in 2014. tial units to be built on a 74,000 m2 tract in Yaşamkent, Ankara. 49,076 US$ 51.5 million Net Sales Revenue (TL thousand) Total Investment Value of Kozyatağı Anadolu Gayri- Tepe İnşaat extended its successful operational track record in 2014, menkul Plaza posting net sales revenue of TL 49,076 thousand. Tepe İnşaat aims to develop Kozyatağı Anadolu Plaza Project in coope- ration with AEH Gayrimenkul Yatırımları A.Ş. on a 73,000 m2 tract of th land in Kozyatağı, Istanbul. The project has a total value of US$ 51.5 217 million Place on ENR Top 250 List Having made a distinguished name for itself by completing quality pro- tons jects in different industry segments, Tepe İnşaat ranked 217th on the 360,000 ENR Top 250 List 2014 of the world’s leading construction companies. Total Capacity of Turkmenistan Silo Project In 2014, Tepe İnşaat completed construction of eight silos with total capacity of 360,000 tons, contracted in Turkmenistan. 4 TEPE İNŞAAT 2014 ANNUAL REPORT AT A GLANCE İş Towers, Levent, Istanbul HUMAN, SPACE, LIFE 5 Atatürk Airport, Yeşilköy, Istanbul 6 TEPE İNŞAAT 2014 ANNUAL REPORT AT A GLANCE Istanbul Sea Buses, Yenikapı Dock, Istanbul HUMAN, SPACE, LIFE 7 Kanyon Shopping Center, Levent, Istanbul 8 TEPE İNŞAAT 2014 ANNUAL REPORT AT A GLANCE HUMAN, SPACE, LIFE 9 Major Developments in 2014 Placing great importance on meeting its responsibilities to the natural environment in all company operations, Tepe İnşaat adopts and implements international quality and environmental standards in its construction projects. Park Mozaik, Ankara Park Mozaik, Ankara Narlife Project: First phase delivery completed A new business center is rising on Istanbul’s Asian side First phase residence units of Narlife Project, Tepe İnşaat’s second residen- Enjoying long-standing experience in the “smart” business center segment, tial development in Maltepe, Istanbul following the Narcity Project, were de- Tepe İnşaat plans to complete construction of the Kozyatağı Anadolu Plaza livered to clients in 2014. Block C, with 609 total flats and constructed on a Project, currently underway in Kozyatağı, Istanbul, in cooperation with AEH 30,000 m2 tract, was completed in March 2014, one year ahead of schedule. Gayrimenkul Yatırımları A.Ş., in July 2015. Situated in one of the densest Units in Block A and B will be delivered in March 2015, as planned. The de- commercial districts on the Asian side of Istanbul, the project is being deve- velopment project also includes social facilities of about 2,000 m2, an indoor loped on a 73,000 m2 tract and has a total value of US$ 51.5 million. and outdoor swimming pools, outdoor sports facilities and walking trails. Construction and sales efforts for Park Mozaik are un- Environmentally friendly projects nominated for LEED® derway certification In August 2014, construction and sales for the Park Mozaik Project, conduc- Placing an utmost priority on fulfilling its environmental responsibilities in ted by a Tepe İnşaat and Mesa Mesken joint venture in Yaşamkent, Ankara, all company operations, Tepe İnşaat adopts and implements international commenced on a phase-by-phase basis. The residential development, con- quality and environmental standards in its construction projects. To this sisting of 885 units to be constructed on a 74,000 m2 tract, comprises social end, the Company’s Narlife and Park Mozaik development projects have facilities for all types of recreational activities, impressive and functional been nominated for LEED® certification, which is awarded by the US Green landscaped areas, and floor plans that offer various alternatives beyond the Buildings Council (USGBC). With these two “green” projects, Tepe İnşaat en- routine. sures a high quality of life for the development’s residents using a wide va- riety of means, from energy saving techniques to natural recreational areas. 10 TEPE İNŞAAT 2014 ANNUAL REPORT AT A GLANCE İş Towers, Levent, Istanbul HUMAN, SPACE, LIFE 11 Tepe İnşaat in Brief Guided by Prof. Dr. İhsan Doğramacı’s philosophy, “further, toward the best,” Tepe İnşaat makes significant contributions to the nation’s economy by continuously expanding its top-line project portfolio. Operating in the construction business, the leading sector in adding value to the national economy, Tepe İnşaat has a strong brand reputation thanks to the many high quality and high profile development projects it has comple- ted, especially in the international market. Backed by 46 years of industry experience, the Company pioneered the training of qualified personnel as needed by the Turkish construction sector. Focused on creating value for all stakeholders, and especially the main shareholder Bilkent Holding A.Ş., the Company is an industry standout in demonstrating a sustainable financial performance and embracing high qu- ality standards. Tepe İnşaat abides by Bilkent University founder Prof. Dr. İhsan Doğramacı’s philosophy “Further, toward the best.” To this end, the Company’s portfolio of high-profile projects include housing developments; shopping malls; office complexes; healthcare facilities; educational facilities and campuses; sports and recreational facilities; hotels; military facilities; power plants and industrial facilities; transportation infrastructure and roa- ds; religious facilities; urban infrastructure; pipelines and water supply in- frastructure; renovation and pre-engineered projects. The Company makes valuable contributions to Turkish Economy by extending its project portfolio consistently. Driven by its well-skilled human resources and well-established brand re- putation, Tepe İnşaat reported registered capital of TL 800,000,000 as of December 31, 2014. Share Participating Company’s Shareholders Class TL Share (%) Bilkent Holding A.Ş. A 1 0 Bilkent Holding A.Ş. B 689,765,170 86.28 Tepe Emlak Yat. İnş. A.Ş. B 104,000,091 13 Tepe Savunma ve Güv. Sis. A.Ş. B 5,672,386 0.7 Tepe Home Mob. Dek. Ürün San. ve Tic. A.Ş. B 562,352 0.02 12 TEPE İNŞAAT 2014 ANNUAL REPORT AT A GLANCE Narcity, Maltepe, Istanbul HUMAN, SPACE, LIFE 13 Esenboğa Airport, Esenboğa, Ankara 14 TEPE İNŞAAT 2014 ANNUAL REPORT AT A GLANCE Kanyon Shopping Center, Levent, Istanbul HUMAN, SPACE, LIFE 15 Vision, Mission and Corporate Values Vision Corporate Values • To provide resources to Bilkent University, the principal shareholder, and make a tangible contribution to national education; Possessing a Sense of Responsibility • To provide added value to the national economy by producing and genera- • To be aware of its responsibilities towards customers, employees and ting employment; suppliers, as well as to the environment and the wider community.