CHANGE İHLAS YAYIN HOLDINGİHLAS YAYIN ANNUAL REPORT 2014 REPORT ANNUAL İHLAS YAYIN HOLDING ANNUAL REPORT 2014 CONTENTS 08 İHLAS YAYIN HOLDING AT A GLANCE 08 İHLAS GROUP IN BRIEF 12 BUSINESS LINE OF İHLAS GROUP 14 ABOUT İHLAS YAYIN HOLDING 18 MAIN FINANCIAL INDICATORS 20 MILESTONES 24 PUBLISHING SECTOR IN TURKEY AND IN THE WORLD 26 FROM GOVERNANCE 26 MESSAGE FROM THE CHAIRMAN OF THE BOARD 28 ACTIVITIES IN 2014 28 PRINTED MEDIA 28 TÜRKİYE GAZETESİ (TÜRKİYE NEWSPAPER) 31 İHLAS GELİŞİM YAYINCILIK (İHLAS GELİŞİM PUBLISHING) 32 İLETİŞİM MAGAZİN GAZETECİLİK (İLETİŞİM MAGAZİNE JOURNALISM) 33 VISUAL MEDIA 33 İHLAS HABER AJANSI (İHLAS NEW AGENCY) 35 TGRT HABER TV (TGRT NEWS TV) 36 TGRT DİJİTAL TV (TGRT DOCUMENTARY TV) 37 RADIO 37 TGRT FM 38 DIGITAL 38 DİJİTAL VARLIKLAR GÖRSEL MEDYA VE İNTERNET HİZMETLERİ LTD. ŞTİ. (DIGITAL ASSETS VISUAL MEDIA AND NET SERVICES LTD. CO.) 40 OTHER 40 İHLAS MEDYA PLANLAMA VE SATINALMA HİZMETLERİ LTD. ŞTİ. (İHLAS MEDIA PLANNING AND PURCHASING SERVICES LTD. CO.) 42 CORPORATE GOVERNANCE 42 BOARD OF DIRECTORS 47 AFFILIATES ADMINISTRATORS 51 BOARD OF DIRECTORS’ REPORT 92 PROPOSAL ON THE DISTRIBUTION OF PROFITS FOR THE YEAR 2014 93 DECLARATION OF RESPONSIBILITY 95 FINANCIAL INFORMATION 98 CONSOLIDATED FINANCIAL STATEMENTS AND INDEPENDENT AUDITOR’S REPORT 178 CONTACT INFORMATION > FOR MORE INFORMATION IHLASYAYINHOLDING.COM.TR Ever since we have started our journey our primary goal has been to become a reliable source in the media sector. We have always maintained our good standing, ethical conduct, respect for people and high quality; and all our aims were directed to bringing happiness to people. We have always remained true to our word and publishing principles. That’s why we became one of the most reliable media conglomerates in Turkey. Today, we are moving into the future more confidently thanks to the changes we undertook. ANNUAL REPORT 2014 1 ABOVE ALL, WE AIMED TO BE RESPECTFUL... We achieved great success with our trademarks in print, broadcast and digital media. We said, “Ethics above all else,” and maintained a respectful approach to social values in all our publishing activities. We reached across Turkey with our high quality and honest publishing. > Shareholders’ Equity (TL) 2014 > 266,067,298 2013 > 248,922,018 WE AIMED FOR TECHNOLOGICAL TRANSFORMATION FOR THE FUTURE... We carried out our activities with the awareness that digital media is of great significance both today and in the future. We said, “Digital transformation,” and moved into digital journalism. We maintained our growth and competitive power in the sector in a way that embraces future. > Total Assets (TL) 2014 > 376,838,493 2013 > 358,489,061 WE SAID, “BEING OPEN TOWARDS AND CONNECTED TO SOCIETY IS ALL THAT MATTERS”... As a Group that derives its strength from society, we have always fulfilled our responsibilities toward society. We said, “Transparency will increase our power,” and thus we have become a publicly traded company since 2010. With every single news report and broadcast, we have further strengthened our bond with our readers and viewers. > Net Sales Income (TL) 2014 > 175,909,374 2013 > 170,580,498 > İHLAS YAYIN HOLDING AT A GLANCE İHLAS GROUP IN BRIEF With a long history spanning 45 years, İhlas Group is active in a wide range of industries including construction and real estate operations, media and communications, manufacturing and trade, mining, education, and healthcare. 8 İHLAS YAYIN HOLDİNG > FOR MORE INFORMATION IHLASYAYINHOLDING.COM.TR İhlas Group runs extensive operations across in 1990, and began manufacturing electronic the country: it’s 25 companies, 3,124 employees, devices and home appliances. In 1991, the Group and a marketing team of 6,200 employees work moved into the healthcare sector, establishing within the Group’s distribution-dealer network the Türkiye Gazetesi Hospital. throughout 81 cities and 286 districts. Standing out with its cultural services, İhlas Group is also PROFOUND EXPERIENCE OF IN THE MEDIA among Turkey’s most prominent and leading SECTOR conglomerates in trade volume. Breaking circulation records in the 1990s, the Türkiye Newspaper was also distributed The foundations of the Group were laid in 1970 in the U.K. and the U.S. during that time; and with the establishment of Türkiye Newspaper. later, printed in Germany as well. To deliver its After starting hand-delivery services for the successful track record in news reporting to Newspaper, the Group commenced marketing other media outlets, the Group founded İhlas operations under the “TÜRPA” brand. TÜRPA News Agency, TGRT FM radio station, and the expanded gradually, complementing its TGRT television channel in 1993. portfolio with numerous products, in addition to newspaper distribution. By the year 1994, the In 1993, İhlas Group gathered its subsidiaries Company had already become a widespread under the umbrella of the Holding company network because of using face to face marketing in order to ensure strong growth. In line with model and reached thousands of customers. its investment strategies, the Group built the “Kuzuluk Kaplıca Evleri” (Spa Houses) and In 1981, İhlas Group established its own printing commenced timeshare resort operations facilities and began printing the Türkiye in 1995. During that time, İhlas Group also Newspaper at these facilities, further expanding expanded into other industries including Internet its publishing and printing operations. services, finance, food, transportation and insurance. Considering investments in education In 1989, the Group ventured into the construction a corporate social responsibility, the Group sector with its “İhlas Yuva Evleri” project. founded İhlas Educational Institutions in 1996. Continuing its corporate development, the Group founded İhlas Home Appliances Company In parallel with the liberalization process in energy markets, İhlas Group participated in a number of electricity distribution and mining NUMBER OF COMPANIES tenders in 1997 and 1998. Later, the Group IN İHLAS GROUP obtained licenses for extracting valuable mineral resources, such as metal ores, coal and industrial 25 raw materials, in order to contribute to the national economy. NUMBER OF EMPLOYEES OF THE During the 2000s, İhlas Group restructured, COMPANY AND MARKETING TEAM creating synergy between group companies and promoting specialization in operational areas. 9,324 Accordingly in 2003, İhlas Media Holding was founded, and the Group began to operate in magazine publishing, media planning, trade show NUMBER OF SERVICED CITIES organization, and digital content design and production in addition to its existing businesses 81 of newspaper publishing, news agency, and broadcast journalism. In 2004, TGRT Haber, a thematic news channel, was established. Two ANNUAL REPORT 2014 9 > İHLAS YAYIN HOLDING AT A GLANCE > İHLAS GROUP IN BRIEF years later, in 2006, the Group decided to focus THE LARGEST URBAN TRANSFORMATION only on news reporting, and sold TGRT TV, which PROJECT IN TURKEY was covering a wide range of topics, to “News İhlas Group increased its investments in Corporation”, an American multinational mass construction, its main area of operation, and media corporation. on July 22, 2013, it signed an agreement with Gaziosmanpaşa İnşaat Yatırım Taahhüt Hizmetleri 20,000 BUILDINGS San. ve Tic. A. Ş. (GOPAŞ) to initiate Turkey’s In addition to the developments in publishing largest urban transformation project in the in 2004, the Group built the Armutlu Holiday Gaziosmanpaşa district of Istanbul. Resort, consisting of 11 buildings and 1,686 apartments on 300,000 square meters of land in The Group continued its construction the Armutlu district of Yalova. investments with the Kristal Şehir and Bizim Evler projects in 2014, and initiated new projects As part of the construction and real estate in the areas of “Construction and Real Estate activities consolidated under the umbrella of Operations,” “Manufacturing and Trade,” “Media İhlas Construction Holding in 2010, more than and Communications,” “Mining,” and “Education 14,000 buildings, including business centers, and Healthcare.” holiday resorts, television studios, education complexes, and residential compounds, SOCIAL RESPONSIBILITY INVESTMENTS have been built to date. The construction of İhlas Group has taken on a social mission within approximately 6,000 buildings is currently the framework of its “Education and Healthcare” underway. activities. Accordingly, Türkiye Gazetesi Hospital, a well-established healthcare facility in Turkey, In addition to home electronics and household offers specialized and ethical healthcare services appliances, İhlas Group has steadily expanded that provide patients with the feeling of family its product line by manufacturing bicycles, warmth and the comfort of their own homes motorcycles, strollers, as well as with food through a specific focus both the physical and production. In 2010, the Group established İhlas psychological effects of health problems. Marketing Investment Holding to run all product- marketing activities under one roof. As well, İhlas Educational Institutions, which provide education at all levels from kindergarten to high school, implement an education system that embraces social values, and modern information and technology principles and practices that can be employed in today’s business and daily life. 10 İHLAS YAYIN HOLDİNG > FOR MORE INFORMATION IHLASYAYINHOLDING.COM.TR ANNUAL REPORT 2014 11 > İHLAS YAYIN HOLDING AT A GLANCE BUSINESS LINE OF İHLAS GROUP CONSTRUCTION AND REAL ESTATE PRODUCTION AND TRADE