OYAK ANNUAL REPORT 2019

ANNUAL REPORT 2019

OYAK used recycled paper in the printing of this report in order to contribute to the ecosystem. www.oyak.com.tr As Turkey’s largest occupational pension fund, OYAK aims to secure the future of its members while contributing to the national economy. We accept challenges as a part of our job. In fact, the challenges we face serve as a driving force behind our success. We are a special group. We have reached to the strong position where we are today by supporting each other and focusing on the same goal. We have a long road ahead as we continue adding value to the lives of 418,455 OYAK members and the 83 million people in our country. We are rewarded for the accomplishments that we have achieved over time. Step by step, we become more encouraged and more powerful as we move forward on our path to sustainable success. Everyday, we are preparing for the future. We keep pace with technology, digitalize our business processes, adapt to the digital transformation and enhance synergy among our Group Companies. We are well aware of our responsibilities. We are here to ensure that our members continue their lives in a proud and dignified way when they retire without any loss to their standard of living. We do whatever it takes to achieve that key objective. That is why we say “We go above and beyond.”

WE ARE Since its inception in 1961, OYAK manages PROUD OF OUR CONTRIBUTIONS all savings of the members of the Turkish TO THE TURKISH Armed Forces serving at all places that the ECONOMY Turkish flag is flying, under the title of trustee according to the principles of profitability, efficiency and corporate investment.

Established in 1961, OYAK is the largest complementary occupational pension fund in Turkey. OYAK Group operates in a wide range of industries, including mining metallurgy, cement concrete paper, automotive logistics, finance, services, chemistry, agriculture and animal husbandry and energy. OYAK spans 7 regions in Turkey, 6 continents around the world and has operations in 23 countries across the world.

OYAK conducts all its business activities in accordance with Law No. 205 as a second-tier complementary occupational pension fund. OYAK is a social security institution which is subject to the provisions of private law, autonomous in terms of financial and administrative aspects. OYAK manages all savings of its members with the principles of profitability and efficiency.

We undertake valuable investments with over 32 thousand employees to ensure that our 418,455 members have a more secure future and achieve a higher quality of life. While working to increase our returns and striving for higher added value each year, we also grow as an institution and make valuable contributions to Turkey’s economy thanks to our service model.

According to the 2019 consolidated financial statements, OYAK Group’s total revenues soared to TRY 48.8 billion while its total assets climbed to TRY 118.3 billion. With total exports amounting to USD 4.9 billion, OYAK Group had 2.7% share of Turkey’s total exports in 2019. We are proud of the contributions our operational results make to our country’s economy – in production, sales, employment, exports and tax payments. We feel honored that we are able to live up to the trust of our members and investors.

About OYAK Group ABOUT OYAK GROUP

OYAK manages its assets on real estate, shares and financial instruments to provide its members with optimal returns. OUR MISSION As a complementary occupational pension fund, to fulfill the benefits and services for its members at the highest standards, to protect the savings of members through sound investments, to grow in a sustainable way and to ensure the satisfaction of members.

OUR VISION To contribute to the national economy through profitable and efficient investments while transferring OYAK to future generations as a powerful and exemplary institution in Turkey and the world by considering the expectations of its members.

OYAK ANNUAL REPORT 2019 ABOUT OYAK GROUP Innovation Change and Openness to to Openness Top Quality and Top Competitiveness Team Spirit Team and Responsibility Responsibility Accountability WE MAKE BUSINESS Equality OYAK ANNUAL REPORT 2019 OUR COMMON VALUES DIRECTING HOW DIRECTING HOW VALUES OUR COMMON Transparency Excellence Creativity and and Creativity CHAIRMAN’S Despite volatility in the global economy MESSAGE in 2019, OYAK continued efforts together with its Group Companies around the world to provide a secure future and create prosperity for its over 418 thousand members.

Dear Distinguished Members, Valuable We add value to the savings of more than Employees, and Esteemed Business Partners, 418 thousand members Despite volatility in the global economy, In 2019, the global economy weakened due to OYAK continued efforts in 2019 together with the effects of trade wars, Brexit uncertainty, its Group Companies around the world to and geopolitical risks emerging in various provide a secure future and create prosperity regions around the world, particularly the for its more than 418 thousand members. Middle East. According to the World Bank, the global economy expanded just 2.4% in In 2019, OYAK focused on profitability in order 2019, its slowest pace in recent years. With to add value to the savings of its members the impact of the COVID-19 pandemic which and further expand member services. These emerged in December in Wuhan, China, the are our core objectives every year. Our world economy is expected to face even human resources – a dynamic workforce more challenges in the coming year. of 32 thousand well-qualified employees – strived to provide a prosperous future for Rebalancing in the Turkish economy our members by successfully executing our In 2019, Turkey’s economy left behind a period business operations in various world regions of macroeconomic rebalancing. After making in line with our shared goals. As one of the world’s headway in fighting inflation and reducing the most successful current account deficit, the Turkish economy A model organization in supplementary supplementary recorded 0.9% growth in 2019 supported by occupational pension funds occupational pension private and public consumption expenditures. As one of the world’s most successful funds, OYAK effectively The government’s fast and effective response supplementary occupational pension funds, utilized the hard- to emerging risks instilled widespread OYAK effectively utilized the hard-earned earned savings of confidence in the country’s future economic savings of its members in key investments in its members in key outlook. At OYAK, we have no doubt that 2019 while consistently managing its assets investments in 2019 Turkey’s economy will return to sustainable using rational portfolio management. During while consistently growth in the following period. the year, OYAK made investments while managing its assets supporting the development of Turkey’s using rational portfolio economy and prioritizing areas of strategic management. importance for our country.

OYAK ANNUAL REPORT 2019 ABOUT OYAK GROUP TRY 2,190.6 million in Retirement Benefits million in Retirement TRY 2,190.6 became eligible to members, who to 6,833 the receive retirement benefits and exited system; to million in Pension Benefits TRY 1,424.3 in the Pension Benefit members 58,037 System; who million to 2,294 members TRY 335.0 either the Pension Benefit System exited or chose to due to death or voluntarily, reduce their share; million in Disability Benefits to 274 TRY 13.2 members; million in Death Benefits to the TRY 27.2 deceased members; legal heirs of 518 million in refunds on contributions TRY 66.9 the system members who exited to 5,396 a membership period of more following than three years and less than 10 years. members totaled TRY 4,057.2 million. In 2019, million. In 2019, members totaled TRY 4,057.2 paid: OYAK • • • • • • Our top priority: Member satisfaction OYAK ANNUAL REPORT 2019 Sustainable development succeeded in distributing sustainable OYAK OYAK dividends due to its profitability. its continued to instill confidence among membership. its businesses across growing Steadily Group different regions of the world, OYAK demonstrated a successful financial and operational performance during the year. reported total OYAK 2019, As of year-end increased billion. OYAK assets of TRY 118.3 billion, while revenues to TRY 48.8 contributing significantly to the Turkish economy with exports amounting to 2.7% export entire volume, amounting of Turkey’s OYAK During the year, billion. to USD 4.9 its membership base by 15.3%, expanded members at year-end. recording 418,455 members (342,797 of OYAK Some 81.9% are actively working; meanwhile, persons) are covered by the persons) (75,658 18.1% end-2019, At Benefit System. Pension OYAK persons) members (273,758 of OYAK 65.4% are are voluntary members and 34.6% persons). compulsory members (144,697 (legal) benefits paid to OYAK Compulsory 2.2 BILLION) (TRY RETIREMENT BENEFITS In 2019, paid OYAK TRY 2.2 billion in Retirement Benefits. OYAK succeeded OYAK in distributing sustainable dividends due to its profitability. CHAIRMAN’S Conducting its business operations in line MESSAGE with the needs and expectations of its members, OYAK has successfully provided Housing Acquisition Services since 1963.

Conducting its business operations in line satisfaction, we launched the OYAK Platform 4.1 with the needs and expectations of its in 2019. This innovation is designed to (TRY BILLION) members, OYAK has successfully provided facilitate member access to services in line Housing Acquisition Services since 1963. with OYAK members’ demands and needs. COMPULSORY Single-point access was provided for OYAK BENEFITS To date, OYAK has delivered housing Health Platform (OSP) Contracted Medical OYAK paid acquisition services for 107,114 members. Institutions and OYAK Education Discounts via TRY 4.1 billion in In 2019, OYAK continued work on the OYAK the OYAK Platform for OYAK Family. Exclusive Göksupark Housing Project, consisting of promotional campaigns featuring OYAK Compulsory 1,876 residential units located in Etimesgut, Group Companies’ products and services Benefits in 2019. Ankara, in line with the planned schedule. were also presented for members on the new platform. I would like to take this opportunity to announce that we will start delivering these After launching on October 29, 2019, OYAK Committed to units to title holders in July 2020. In addition, Platform’s user base climbed to 62,145 by maximizing member project development efforts are ongoing for year’s end. During the year, 1,349 users satisfaction, we Seyirce Housing Project, which consists of 375 benefited from products and services found launched the OYAK residences in Sincan, Ankara; 370 thousand on the platform. Meanwhile, a total of 25,541 Platform in 2019. This square meters of real estate in Bademler, interactions were made between Group innovation is designed Urla, Izmir; and a 1.5 million m2 real estate Companies and members via OYAK Platform to facilitate member project in Çiftlikköy, Yalova. in 2019. access to services in line with OYAK Committed to maximizing member Member communication channels that members’ demands and needs.

OYAK ANNUAL REPORT 2019 ABOUT OYAK GROUP members in line with our founding mission mission founding with our in line members new acquisitions, made OYAK In 2019, new partnershipimplemented and structures processes data analysis adopted operational as part and transformation of its digital initiatives to data. We launched on big focus innovative capacity and production expand Once again, boost added value. to projects a of providing the pride experienced OYAK its members. return for sustainable rate of risks and opportunities managing Effectively corporate in light of its well-established major continued to take culture, OYAK to become a global brand. steps forward happiness, I would With great pride and as our valued like to draw your attention, progress exceptional stakeholders, to our a global brand this year. toward becoming and multicultural With its multinational and biggest is Turkey’s corporate vision, OYAK of supplementary most successful example occupational pension funds. On behalf of myself and the OYAK my Board, I would like to express Executive sincerest gratitude to our members who supported our 2019 business operations our and our ongoing 59-year success story, esteemed board members, our managers, with and our employees who serve OYAK our complete dedication. It is my wish that in the achievements will continue to grow days that follow. Respectfully yours, Mehmet TAŞ (Ret.) Major General Chairman of the Board of Directors OYAK ANNUAL REPORT 2019 support mutual trust mutual support member conducts successfully OYAK effortscommunication in order to strengthen mutual fosters with members and the bond with we proceeded the year, trust. During to investments digital transformation efforts. communication boost member We million member interactions 47.3 recorded channels as of via all available communication 2019. year-end members via reached out to 106,819 OYAK live stream events online during the four members 42,098 We also informed year. services conferences held at 219 about OYAK In addition, we the countryacross in 2019. and border initiated visits to gendarmerie With a total the first time this year. posts for met with our 570 of 38 visits, we personally members who serve at these posts. we updated our corporate website In 2019, – one of the most important channels Making a member communications. for user difference with its innovative design and the corporate website recorded experience, Meanwhile, 6 million visitors as of year-end. Mobile Application, an indispensable the OYAK means of communication in today’s world, in 2019. increased its user base to 351,271 Members accessed their personal accounts by logging into Online Member Services website and times via the OYAK 5,928,591 mobile app times via the OYAK 15,948,406 to further aims OYAK during the year. and service its communication improve channels in the coming year to support its members. Providing sustainable benefits to OYAK During the year, the year, During with we proceeded digital transformation to investments member boost our communication efforts. We recorded member million 47.3 interactions via all available communication channels as of year- end 2019. CEO’S With the confidence we have in our country MESSAGE and the strength we gained from our robust history, OYAK completed another successful year. 2019 was a challenging year for the real sector globally as well as in Turkey. However, OYAK continued its mission of providing sustainable returns for the savings of its members.

Our Esteemed Members, Dear Employees, Bank had reduced its policy interest rate from 8.2 and Respected Business Partners, a high of 24% to 12% by the end of the year. (TRY BILLION) Annual consumer price inflation decreased to TOTAL DISTRIBUTABLE 2019 was a year with relatively slow economic 11.8% at year-end 2019, down from 20.3% a growth around the world. Key factors behind year earlier. RESOURCES this sluggish growth includes ongoing OYAK generated global trade wars, the United Kingdom’s I would like to reiterate that we worked TRY 8.2 billion process of exiting from the European Union, nonstop during this challenging year in line in distributable and global geopolitical risks. Central banks with our sustainable growth strategy. In 2019, resources in 2019. across the globe reduced interest rates we utilized all our resources effectively in to boost economic activity and support order to optimize the value we create and growth. The low interest rate-abundant contribute to the Turkish economy. liquidity environment enabled financial markets’ expectations to remain strong OYAK: Turkey’s well-established and largest throughout the year. However, the COVID-19 supplementary occupational pension fund pandemic, which emerged at the end of 2019, As the country’s well-established and biggest dampened expectations and resulted in a supplementary occupational pension fund, negative outlook on economies around the OYAK recorded a solid performance in 2019. world. Our professional management approach and robust financial structure has made OYAK For Turkey’s economy, 2019 saw efforts to resilient in the face of economic and market correct macroeconomic imbalances. Thanks volatility over many years. to a narrowing foreign deficit and growing tourism revenues, the current transactions balance improved. In addition, inflation fell and interest rates declined. After foreign exchange rates stabilized, the Turkish Central

OYAK ANNUAL REPORT 2019 ABOUT OYAK GROUP Operating in seven regions across Turkey Turkey Operating in seven regions across the world with and 23 countries around is a over 32 thousand employees, OYAK global brand that embraces innovation, competes effectively and quickly adapts to to using the savings change. Committed of its members in the best possible way by with this Companies managing its Group creates significant added OYAK approach, economy. the Turkish value for Sustainable development in all sectors of business activity In line with its objective of sustainable development in all sectors of business reported exports amounting OYAK activity, As a result, OYAK in 2019. billion to USD 4.9 biggest continued to rank among Turkey’s exporters. OYAK ANNUAL REPORT 2019 In 2019, OYAK increased total consolidated OYAK In 2019, billion. to TRY 118.3 assets by 16.5% Meanwhile, net corporate consolidated billion and total assets totaled TRY 47.6 distributable resources amounted to TRY 8.2 left behind another challenging billion. OYAK year regarding the real sector in Turkey our with the strength we have gotten from historydeep-rooted and our confidence continued its mission OYAK in our country. the sustainable returns for of providing boosted its savings of its members. OYAK over the consolidated revenue by 3.6% billion and recorded prior year to TRY 48.8 billion. of TRY 8.9 operating profit 8.9 BILLION) (TRY PROFIT OPERATING reportedOYAK operating profit amounting to TRY 8.9 billion in 2019. CEO’S OYAK maintained its financial profitability MESSAGE and operational productivity in 2019. We adopted inclusive, innovative and competitive approaches based on implementation conformity. As a result, we successfully transformed Group synergy and dynamism into profitable operations.

Focused on adding value to Turkey’s economy export revenue of approximately USD 1 in every area, OYAK paid TRY 9.1 billion in billion during a year when trade wars and taxes together with its Group Companies protectionism were rampant around the in 2019. OYAK maintained its financial globe. As the first and largest integrated flat profitability and operational productivity steel manufacturer and a global brand in during the year. OYAK maintained its financial the steel industry, OYAK Mining Metallurgy profitability and operational productivity Group alone manufactured 26% of Turkey’s in 2019. We adopted inclusive, innovative total raw steel production in 2019, producing and competitive approaches based on 8,608 thousand tons of raw steel. In 2020, implementation conformity. As a result, we the Group aims to maintain its success successfully transformed Group synergy and domestically as well as globally with its dynamism into profitable operations. professional business culture, wide range As the first and largest of high added value products, efficiency- integrated flat steel Turkey’s first and largest integrated flat steel based R&D efforts and other competitive manufacturer and a manufacturer advantages. global brand in the OYAK Mining Metallurgy Group – one of the steel industry, OYAK 50 largest steel manufacturers worldwide To broaden its global footprint, OYAK Mining Metallurgy – recorded total assets of USD 7.9 billion as partnered with Miilux, a leader in the Group manufactured of year-end 2019. The Group reported sales production of strategically important 26% of Turkey’s total revenues of about USD 4.8 billion for the high-strength steel and armor steel with raw steel production same period. With exports accounting for manufacturing facilities in Finland and Poland. in 2019 by alone, 20.2% of total sales, the Group significantly On February 25, 2019, OYAK acquired 70% producing 8,608 contributed to the country’s economy with stake of Miilux, while commencing operations thousand tons of at the company’s Manisa Plant. raw steel.

OYAK ANNUAL REPORT 2019 ABOUT OYAK GROUP

the synergy created by this strategic acquisition the synergy created by this strategic acquisition to achieve its cement while moving forward industry objectives. automotive Undisputed leader in the Turkish industry Turkish Identified with the Renault brand in the Automotive Logistics OYAK automotive sector, leadership by having maintained market Group of total automobile production share of 34.9% executes OYAK 2019. as of year-end in Turkey automobile, engine and mechanical parts with Renault; in collaboration production sales and automobile and light commercial vehicle services with MAİS; in collaboration after-sales automobile financing services in collaboration serviceswith ORFİN; and brokerage rental for We operations of corporate enterprises with ORF. to have achieved successful financial are proud and operational results in 2019 despite volatility integrated in the markets thanks to the Group’s management approach. automotive MAİS ranks second in the Turkish vehicles market with total sales of 84,983 and a market share of 17.7%. (Renault+Dacia) Renault ranked first in Turkish Meanwhile, OYAK automobile exports exported with 295,275 MAİS maintained This year, vehicles in 2019. vehicles. sector leadership with sales of 78,201 has remained the most preferred Renault OYAK for passenger automobile brand in Turkey 20 consecutive years. OYAK ANNUAL REPORT 2019 Regional power in the cement industry Regional power in the cement industry – Group Paper Cement Concrete OYAK Verde, Ivory Portugal, Cape operating in Turkey, – continued to boost OYAK’s and Romania Coast overall performance in 2019 by maintaining its leading position in its fields of business Group Paper Concrete Cement OYAK activity. competition with its the differentiates from infrastructure advanced technology production aims to take The Group and R&D competency. further toward becoming a global player steps in 2020. its regional footprint by expanding Group Paper Cement Concrete OYAK Currently, capacity boasts annual cement production and abroad. million tons in Turkey of 32.6 concrete, paper production cement, Conducting its proved and sales activities, the Group advanced operational competency once again by starting waste heat to generate power from and solar energy resources in 2019. Paper Concrete Cement OYAK During the year, in line with took a major step forward Group The its vision of becoming a global player. acquired the Portugal Verde Group and Cape operations of CIMPOR, one of the largest on January 17, cement brands in Europe, has Over the last three years, the Group 2019. its cement capacity by 52%. In 2020, expanded aims to Group Paper Concrete Cement OYAK further strength with consolidate its production OYAK Cement Concrete Paper Group aims to to aims Group Paper Concrete Cement OYAK furthertake a global becoming toward steps footprint regional its by expanding player boasts annual Group the Currently, in 2020. million 32.6 capacity of cement production and abroad. tons in Turkey Closely identified with the Renault brand in automotive the Turkish OYAK sector, Automotive Logistics maintained Group market leadership by 34.9% accounting for of total automobile in Turkey production 2019. as of year-end CEO’S Despite volatility in global markets in 2019, MESSAGE OYAK Finance Group recorded a successful year thanks to its wide product range and high quality advanced technology customer service.

OMSAN is a Group company in the logistics A trusted address in the financial sector sector with land, maritime, air and railway OYAK Finance Group operates OYAK operations. The company provides a ANKER Bank in corporate and individual comprehensive range of logistics services to banking; OYAK Investment, OYAK leading domestic and international firms in Investment Partnership and OYAK Portfolio various industries. OMSAN primarily serves in intermediary firms; and OYAK Group customers in the automotive, iron and steel, Insurance in insurance and reassurance cement, construction, fuel oil, textile, retail, brokerage. Despite volatility in global markets food and communication sectors. in 2019, OYAK Finance Group recorded a successful year thanks to its wide product Once commissioned, We developed international cooperation range and high quality advanced technology OYAK Port Project in the logistics sector to create more customer service. In addition to third parties will generate many opportunities for investment and exportation. and institutions, the Finance Group serves benefits for our Group OYAK brought new investments to Turkey in other OYAK Group Companies, thus helping as well as Turkey’s the logistics arena via loan agreements with to create synergy across the organization and economy. The project international banks. We plan to complete ensuring financial effectiveness at OYAK. will be the first Ro-Ro OYAK Port Project in January 2021. This facility port in Turkey to be will boast an annual handling capacity of 780 OYAK Finance Group has consistently built and operated in thousand vehicles. The port project serves as increased its revenues and expanded its cooperation with a a major milestone in our logistics business customer base. An industry standout with its global port operator. given OYAK’s joint venture with Japanese highly skilled human resources and strong NYK Group, which accounts for 16% of global financial foundations, the Group is also a market share in Ro-Ro transportation. Once leader in digital transformation. Thanks commissioned, OYAK Port will generate many to its value adding efforts in this key area, benefits for our Group as well as Turkey’s OYAK Finance Group aims to maintain its economy. The project will be the first Ro-Ro exceptional service quality and high level of port in Turkey to be built and operated in customer satisfaction in the coming year. cooperation with a global port operator.

OYAK ANNUAL REPORT 2019 ABOUT OYAK GROUP

2 of real estate in Bademler, Urla, Izmir were of real estate in Bademler, by the Ministryapproved and of Environment Urbanization. In addition, real estate assets square meters located in amounting to 12,160 TOKİ and Çorlu, Tekirdağ was acquired from successfully conducted a leased out. OYAK The Group conducts R&D efforts R&D conducts The Group in the nutrition, plant protection, of plant areas and smart livestock health seed breeding, Organized at its center in Gebze agriculture establish are underway to Plans Industry Zone. equipped agricultural center a world-class Turkey’s for technologies with advanced This state-of-the-art industry. agriculture is located in Orhangazi, Bursa. project Agriculture Animal Husbandry Group OYAK aims to further support the development with more than 350 agriculture of Turkish the ecological best suited for products country. characteristics of the for Turkey Generating “Power” includes ISKEN Power Energy Group OYAK international Plant, one of the largest MW installed with 1,320 investments in Turkey owner of the supply Energy, OYAK capacity. the total power need 3% of license, provided The uninterrupted power in 2019. of Turkey Companies Group OYAK supply operation for advantage into a competitive transformed Synergy.” which strengthens “OYAK to life Real-estate investments that add value Service Group İnşaat, an OYAK OYAK In 2019, continued to develop prestigious company, add value to the that real-estate projects members. Some 90% of OYAK lives of OYAK consisting of 1,876 Project, Göksupark Housing needs residences built to meet the housing were completed; membership, of OYAK’s Seyirce required permits were obtained for consisting of 375 residences Project Housing construction began in April in Sincan, Ankara; consisting of project our mixed use 2019 for residences, 156 offices and 10 commercial 414 During the site. Dragos Project areas at OYAK 370 thousand m development plans for year, OYAK ANNUAL REPORT 2019 Chemical industry experience spanning half half spanning experience industry Chemical a century the in 50 years of experience Boasting extended Group Chemical OYAK industry, 2019 thanks to of success in its track record Almatis, brands, including global its strong Group Chemson. The and Kimya Akdeniz in the largest manufacturers ranks among with an annual sector, the world in the PVC admixture production PVC polymer chemical tons. OYAK capacity of 300 thousand its PVC continues to expand Chemical Group Leading range with R&D projects. product in the development the sector especially products, of alumina and alumina-based bolstered its position Chemical Group OYAK as the primary supplier in 2019 with global capacity of over 600 an annual production thousand tons. ventured into yet another area where OYAK economy is completely foreign- Turkey’s dependent by starting to establish a carbon The facility will plant. black production various in used is which black carbon produce sectors, such as rubber manufacturing, particularly and tire, the paint industry, This plant will be products. special electronic domestic carbon black able to meet Turkey’s needs of 220 thousand tons per year. Group Agriculture and Animal Husbandry farmers with innovative supports Turkish applications Agriculture and Animal OYAK In 2019, company Hektaş Husbandry Group’s continued to lead the industry with smart that and sustainable agriculture applications respect people and the natural environment. friendly environmental develops The Group importancesolutions in line with the growing of this area in recent years. During the 14.4 Hektaş produced reporting year, Facility thousand tons at Gebze Production thousand tons at FNC Agricultural and 4.5 the In 2019, Facility. Production (Niğde) to 18.9 company boosted its total production Hektaş thousand tons, up 7% year-on-year. recorded organomineral fertilizer production thousand tons, an increase of 297% of 31.3 to supporting Committed over the prior year. with Smart Agriculture Turkey farmers across applications, Hektaş developed strong international collaborations oriented toward while effectively using its innovative products nationwide sales-marketing network in 2019. Leading the sector the sector Leading in the especially of development alumina- alumina and based products, Chemical Group OYAK its position bolstered as the primary global supplier in 2019 with an annual production capacity of over 600 thousand tons. OYAK Agriculture and OYAK Animal Husbandry aims to Group further support the development of agriculture Turkish with more than 350 best-suited products the ecological for characteristics of the country. OYAK Energy Group Energy Group OYAK 3% of provided total power Turkey’s need in 2019. CEO’S The “Zero Waste Project,” implemented MESSAGE with all our Group Companies to contribute to Turkey’s sustainable development goals, was officially registered by the Ministry of Environment and Urbanization. We earned the right to be the first organization to receive Zero Waste Basic Level Certification in our category with this initiative.

digital transformation in the real-estate First organization to obtain Zero Waste Basic development field as well. About 15 thousand Level Certification in its category pieces of data and information on 40 million At OYAK, we plan for both today and m2 of land owned by OYAK Group companies tomorrow. We take great care when were entered into the Real Estate Operations making decisions that will shape our future. OYAK conducts its own Management System. In addition, we build the future with our sustainability efforts sustainable solutions and applications. With in line with United OYAK Group supports UN Sustainable the “Zero Waste Project,” we have taken Nations Sustainable Development Goals (SDG) the first step for the OYAK ecosystem. This Development Goals OYAK has created a sustainability ecosystem effort will contribute to all OYAK projects (SDG). We have encompassing all Group Companies to ensure economically and ecologically with an presented our active a future for members’ savings and leave a approach that embraces efficient and support for 14 of the more habitable world for future generations. sustainable management of world resources. 17 available goals to OYAK conducts its own sustainability efforts The “Zero Waste Project,” implemented the attention of OYAK in line with United Nations Sustainable with all our Group Companies to contribute stakeholders. Development Goals (SDG). We have to Turkey’s sustainable development goals, presented our active support for 14 of the was officially registered by the Ministry of 17 available goals to the attention of OYAK Environment and Urbanization. We earned stakeholders. With the active involvement of the right to be the first organization to its employees, OYAK considers sustainability receive Zero Waste Basic Level Certification related work one of its main priorities. These in our category with this initiative. Our goal is efforts range from the fight against global to touch the lives of some 1.5 million people climate change and strategies for efficient within OYAK’s impact area, together with use of natural resources, to continuous OYAK employees, our members and their development opportunities for employees families. We also aim to raise awareness and social development programs. in society for prevention of wastage and resource efficiency with our Zero Waste initiative.

OYAK ANNUAL REPORT 2019 ABOUT OYAK GROUP year of Gazi th (OSP) Contracted Medical Institutions, OYAK OYAK Institutions, Medical Contracted (OSP) services Discounts, of and products Education benefit of the – all for Companies Group OYAK We plan to take further members. steps OYAK with OYAK our communication to strengthen capitalizing in the future while stakeholders on the opportunities by digital provided transformation. the 100 2019 was exactly Mustafa Kemal Atatürk’s first steps toward first Mustafa Kemal Atatürk’s As the Republic of Turkey. founding corporate culture a robust representatives of years ourselves, we aim to spanning nearly 60 position in domestic maintain our leadership in all our sectors and international markets draws strength OYAK of business activity. as its dynamic organizational structure from human resources. well as its well-qualified is committed to adding value to the OYAK savings of its members and supporting the Our sustainable development of Turkey. and R&D projects digital transformation continue apace as required by today’s highly With competitive business environment. wishes of further successes in the future with the support of all our stakeholders, particularly our members and employees, Respectfully yours, Süleyman Savaş ERDEM CEO OYAK ANNUAL REPORT 2019 Health and Safety is integrated into all into is integrated and Safety Health operations Group OYAK a healthy and to creating We are committed all our stakeholders, for safe environment integrates particularly OYAK our employees. operations. safety with all Group health and legal and with all applicable We comply regulatory to requirements and adhere standards by internationally accepted our performance.continuously improving objective maintained its zero-accident OYAK its corporate policies in 2019 pursuant to is a pioneer in Group and strategies. The toward ensuring health applications oriented where it operates. and safety in all sectors Projects” demonstrate OYAK’s “Honor corporate reputation boasts one of the most robust OYAK the In 2019, corporate cultures in Turkey. conduct its “Honor continued to Group of its as a demonstration Projects” approach. management professional value to who added exceptional Employees fields are recognized in various the Group with awards as part of our Corporate initiative. Meanwhile, we significantly Loyalty boosted efficiency by digitalizing all our with the OYAK human resources processes effort This Digital HR Project. was developed is so completely with internal resources and advanced that it competes with international Platform, HR digitalization systems. OYAK Family, OYAK for designed exclusively Health Platform enables easy access to OYAK OYAK is committed OYAK the to adding value to savings of its members and supporting the sustainable development of Our digital Turkey. and transformation continue R&D projects apace, as required by today’s highly competitive business environment. CORPORATE OYAK’s Corporate Structure General Directorate OYAK is a complementary occupational The General Directorate is responsible for GOVERNANCE pension fund – examples found in many executing decisions taken by OYAK’s legal other countries with developed economies decision-making bodies. It consists of a – that operates with the awareness and General Manager appointed by the Board of responsibility of offering services to its Directors and a sufficient number of Deputy members while effectively utilizing its General Managers with different units resources through corporate and financial subordinated to them. investments. OYAK Group’s Corporate Governance OYAK’s main objective is to ensure a more Practices secure future for its members. Thanks to its Corporate governance practices, which service model, OYAK strives to generate the are also included in Law No. 205 under best possible returns and offer services with different headings and chapters, have been high added value. meticulously put into practice since OYAK’s founding in 1961. At OYAK Group companies, The Board of OYAK’s Legal Bodies parallel practices are followed. Meanwhile, Representatives is OYAK’s legal bodies that comprise its national and international developments in OYAK’s most well- corporate management system are the this area are closely monitored. attended body with Board of Representatives, the General a member size not Assembly, the Board of Directors, the Board Activities as part of corporate governance at less than 50 and not of Auditors and the General Directorate. OYAK’s General Directorate are carried out The members of these boards, their more than 100 (75 in to: constitution and duties are openly stipulated practice). In order to in Law No. 205. • Undertake efforts in line with OYAK and fulfill the functions Group Companies’ corporate governance stipulated by law, it Board of Representatives principles and rules, convenes once every The Board of Representatives is OYAK’s • Ensure adherence to applicable national three years to review most well-attended body with a member and international law, the financial accounts size not less than 50 and not more than • Monitor and manage domestic and of the last three years. 100 (75 in practice). In order to fulfill the international risks, functions stipulated by law, it convenes once • Conduct activities to enhance every three years to review the financial institutionalization. accounts of the last three years. The Board is authorized to select 20 full and 10 substitute OYAK has internalized four main General Assembly members. principles of corporate governance: fairness, transparency, accountability and General Assembly responsibility. As part of the corporate The General Assembly consists of a total governance strategy, OYAK places great of 37 members, 20 of whom are selected importance on the balance between different by the Board of Representatives and 17 are governance principles and among; appointed as stipulated by the Law. • Shareholders, Board of Directors • Public disclosure and transparency, The Board of Directors is responsible for • Stakeholders, OYAK’s management. Three members of the • Board of Directors Board are selected by the General Assembly, and four are selected by the Selection Committee as designated in Law No. 205. A natural member of the Board, the General Manager, has a right to vote.

Board of Auditors The Board of Auditors consists of three members: one is selected by the General Assembly, one by the President of the Court of Accounts and one by the Chairman of the Board of Directors of the Banks Association of Turkey.

OYAK ANNUAL REPORT 2019 ABOUT OYAK GROUP At the General Assembly meetings, decisions the General Assembly meetings, At and related to the companies were taken business partners on these as were informed stipulated by applicable regulations. 5 Public General Assembly Meetings For Cement Concrete of OYAK Companies Group Paper The announcement regarding the commencement of negotiations for incorporation of five companies of OYAK Companies Group Paper Cement Concrete was published on the Public Disclosure The 2019. on December 13, (KAP) Platform announcements regarding the incorporation/ devolvement were published on KAP on During that period, 2019. December 31, the General Assemblies of the OYAK following Companies, Group Paper Cement Concrete General Assemblies were held. Extraordinary Adana Çimento, Bolu Çimento, Aslan Çimento, Ünye Çimento and Mardin Çimento were merged under Mardin Çimento and the title Çimento of the company was altered to OYAK A.Ş.. Fabrikaları OYAK ANNUAL REPORT 2019 The “Corporate Governance Principles,” The “Corporate in 1999 published internationally by the OECD Markets Board and nationally by the Capital relations take companies’ in 2003, (CMB) with stakeholders as the main framework social benefit. on increasing and focus Governance Communiqué The Corporate took the published by the CMB in 2014, one “Practice, if not, Disclose” approach step further and made it mandatory for to implement some of the Listed Companies principles. Listed Group’s Within this framework, OYAK abide by all relevant laws, fully Companies rules, and regulations in this area. General Assembly Meetings fiscal General Assembly meetings for year 2019 were completed with the announcements made three weeks in advance of the meeting dates as stipulated by relevant regulations. During the General shareholder questions were Assembly, answered. Some shareholders electronically participated in the General Assembly. General Assembly meetings for fiscal with the completed were 2019 year announcements made three weeks in stipulated of the as meetingadvance dates by relevantregulations. Adana Çimento, Bolu Çimento, Aslan Çimento, Ünye Çimento Mardin and Çimento merged under Mardin Çimento and the name of the Company was altered Çimento OYAK to A.Ş..Fabrikaları CORPORATE CORPORATE GOVERNANCE PRACTICES LISTED IN OF COMPANIES OYAK GROUP CORPORATE Number of Independent Board Members and Corporate Governance Compliance Report Election Procedure and Corporate Governance Information Note GOVERNANCE The groups for exchange companies were Pursuant to the amendment to Corporate PRACTICES announced for 2020, upon the CMB’s Governance Communiqué No. II-17.1 upon Decision No. 4/54 dated January 9, 2020. Of the CMB’s Resolution No. 2/49 dated January IN LISTED OYAK Group’s Listed Companies, Erdemir 10, 2019, it was resolved that Corporate COMPANIES OF and İsdemir are included in Group 1, Adana Governance Compliance shall be reported Çimento and Hektaş in Group 2, and other on KAP via using the Corporate Governance OYAK GROUP listed companies in Group 3. These groups Compliance Report (URF) and Corporate were taken into account with regards to the Governance Information Form (KYBF) number of Independent Board Members and templates. Within that frame, compliance election procedure. reports of OYAK Group’s Listed Companies were simultaneously published on KAP with Group Upgrade in Hektaş the disclosure of the 2019 financial results. Hektaş, a listed Company at OYAK Group, was upgraded by Capital Markets Board to the In the Corporate Governance Compliance second category of companies indicating the Report, information on the investor relations level of corporate governance practices. The unit, the structure of the Board of Directors, company was previously placed in the third the Corporate Governance Committee, the group. Pursuant to the related regulation, the Early Detection of Risk Committee and Audit Hektaş board structure was reviewed and Committee established under the Board of three independent board members were Directors, their members and their convening selected at a general assembly during the frequency, committees’ operation directives, year. liability insurance for managers, ethical rules, and policies are included. All these points Hektaş’s stock was featured in the list to were also published on the Group companies’ be included in “BIST Share Indexes for First websites. Quarter of 2020” announced by Borsa Hektaş, one of Istanbul on December 17, 2019. Corporate Governance Index OYAK Group’s Erdemir, one of OYAK Group’s listed listed companies, Board of Directors’ Annual Report companies on the BIST (Istanbul Stock upgraded its position In the Board of Directors’ Annual Report Exchange) Corporate Governance Index. On from 3rd group to of Group companies that was published the voluntary-based Index, Erdemir was 2nd group of CMB in on the Public Disclosure Platform, various listed with a score of 9.49 (94.9%) in 2019. the categorization information, such as non-company related duties of Board Members, the number of Policies defining the level of Board Meetings during the year, important The following policies were devised for OYAK corporate governance court cases, affiliated company reports, Group’s Listed Companies: Information Policy, practices. statements of independence of independent Profit Distribution Policy, Compensation board members, was included in addition to Policy, Wage Policy, Donations and Aid financial figures. Policy. Pursuant to regulatory requirements, some of these policies were put forth for Report on Common and Continuous Related the approval of the General Assembly, while Party Transactions others were disclosed to the public after A report was prepared regarding Common being decided on by the Board of Directors. and Continuous Related Party Transactions with OYAK Group Listed Companies, including Once İsdemir changed trading platforms, the Erdemir, İsdemir, Adana Çimento, Bolu studies on Corporate Governance Policies Çimento, Aslan Çimento, Ünye Çimento and were completed and published on the Mardin Çimento, having the nature and Company’s website, following the General frequency stipulated by law. The section Assembly meeting. Conclusions in the report was published on the Public Disclosure Platform (KAP) as Furthermore, OYAK Group’s Listed material disclosure in March 2020. Companies Public Disclosure was drawn up as per CMB’s Material Events Disclosure Communiqué No. II-15.1.a.

OYAK ANNUAL REPORT 2019 ABOUT OYAK GROUP Group C Group EREGL.IS ISDMR.IS OYAYO.IS OYAYO.IS MRDIN.IS UNYEC.IS BOLUC.IS ADNAC.IS HEKTS.IS ASLAN.IS BIST Code Group B ADBGR.IS, Group Group A ADANA.IS, Group

(1) 47 673 665 648 1,814 2,917 1,825 31,640 23,229 Market Company Company Capitalization Capitalization (TRY million) (TRY 2018 OYAK OYAK Group 51.33% 47.27% 53.81% 96.67% 94.87% 49.29% 49.99% 54.86% 65.20% Share (%) 2019 OYAK OYAK Group 51.33% 47.27% 53.81% 96.67% 94.87% 49.29% 49.99% 54.86% 65.20% Share (%) (2) shows the share of the relevant company in the capital of OYAK/OYAK Group Company as published on KAP. Company Group capital of OYAK/OYAK shows the share of the relevant company in the Market cap of companies are calculated according to the share price as of 31.12.2019. OYAK Group Share (%) column Group OYAK to the share price as of 31.12.2019. Market cap of companies are calculated according Voting right percentage is 86.39%. Voting

Company Ereğli Demir ve Çelik Ereğli Demir ve Çelik T.A.Ş. Fabrikaları İskenderun Demir ve Çelik A.Ş. İskenderun Demir Adana Çimento Sanayii T.A.Ş. Bolu Çimento Sanayi A.Ş. Aslan Çimento A.Ş. Ünye Çimento Sanayi ve Ticaret A.Ş.

Mardin Çimento Sanayii ve Ticaret A.Ş. Hektaş Ticaret T.A.Ş. OYAK Yatırım Ortaklığı A.Ş. Yatırım OYAK OYAK ANNUAL REPORT 2019

(1) (2) The current contact information for OYAK Group Companies’ Investor Relations Departments Investor Relations Companies’ Group OYAK for contact information The current KAP. on is found Table Companies Group Listed OYAK Website corporate regarding The information tab. Relations an Investor include websites Companies’ that tab. in informed of keeping stakeholders fulfilling the aim is regularly updated, governance The following policies weredevised Group’sfor OYAK ListedCompanies: Information Policy, Profit Distribution Compensation Policy, Policy, Wage Policy, Donations Aid and Policy. GENERAL Financial markets improved significantly ECONOMIC OUTLOOK by the end of the year thanks to positive results achieved in the first stage of foreign trade negotiations between the USA and China.

The trend of avoiding Global Economy to concerns about the global economic outlook. risky assets triggered The world economy is estimated to have With inflation remaining below the target level, by concerns regarding expanded 2.4% in 2019, the slowest pace of the Fed lowered its interest rate range to 1.50% global economic growth since the global financial crisis. The - 1.75% after reducing its policy rate by 25 basis growth has led to lower growth environment is due to downward points three times in the second half of the pressure on emerging pressure on world trade created by the trade year. market currencies wars between the USA and China as well and capital flight from as weaker investment spending. This poor Economic activity in the Eurozone was performance in economic activity led central negatively affected by many countries teetering developing countries. banks in developed countries to suspend on recession in that region. Germany’s weak normalization of monetary policies and adopt industrial sector was especially a drag on expansionary measures once again. Financial growth as the largest economy in the EU. markets significantly improved by the end of Uncertainty related to Brexit dominated the year thanks to positive results in the first the year’s agenda and was another factor stage of foreign trade negotiations between hampering economic growth in Europe. As the USA and China. However, overall the year a result these developments, the European was characterized by fragility. The trend of Central Bank (ECB) reinstituted expansionary avoiding risky assets triggered by concerns monetary policies to stimulate the economy. regarding global economic growth has led The ECB kept its policy interest rate at 0% all to pressure on emerging market currencies year and provided low-cost loans for banks. and capital flight from developing countries. Meanwhile, investors turned toward developed The Chinese economy slowed more than countries’ bonds which were seen as safe forecast with the effects of weakening haven investments. domestic demand and ongoing trade wars. In 2019, the country’s economy expanded In the USA, higher trade costs due to the rise 6.1% – the lowest growth rate in 29 years. in customs tariffs implemented by China had Uncertainties concerning trade policies and a negative impact on exports. Uncertainty the negative impacts of high customs tariffs surrounding the issue dampened investments implemented in the trade process with the USA and economic confidence. America’s all weighed on investor sentiment during the manufacturing industry demonstrated a weak year. In addition, industrial production grew at performance as in many other advanced the slowest pace in recent years. economies. The US economy slowed in light of these developments. Despite the fluctuations in In 2019, the price of oil was USD 61/barrel, the economy during the year, the labor market 10% below its 2018 value and USD 5/barrel maintained its robustness. Unemployment fell lower than the expected price. The decrease to a 50 year low with increased labor force in the price of oil was limited thanks to participation. Rising wages also supported production restrictions by OPEC and non-OPEC consumption. The Federal Reserve was pushed countries and concerns regarding supply due to reinstate its expansive monetary policies due to geopolitical tensions. Although oil prices

OYAK ANNUAL REPORT 2019 ABOUT OYAK GROUP return to loose monetary to loose return by central policies the during countries in developed banks partial improvements of the year, second half specific and political tensions in geopolitical in trade positive developments and to Turkey, negotiations. indicators inflation of improved With the effects of the year and the as of the second half reinstatement of expansionary monetary in advanced countries policies by central banks to support (Central CBRT economic activity, implemented of Turkey) Bank of the Republic meeting. cuts as of its July gradual interest rate interest from CBRT reduced its policy In 2019, remained elevated to 12%. Unemployment 24% Domestic consumption the year. throughout significantly due to declined expenditures in the first half of the effect of high inflation spending decreased Investment the year. the substantially due to lower confidence in economy and high interest rates. Imports fell which had a due to the decline in production trade and the current positive impact on foreign the recovery in account balance. However, economic activity in the last quarter of 2019 reversed the trend, albeit to a limited extent, particularly trade balance. The in the foreign at the continuation of tax deductions initiated start to support of 2019 and limited growth domestic demand have negatively affected budget revenues. Meanwhile, the budget 70% in 2019. balance expanded In line with increasing risk appetite in global trade in USA-China markets with the progress negotiations and entry into the new abundant economy is liquidity period, the Turkish its economic robustness to maintain forecast which commenced in the latter half in 2020, in the degradation is expected Some of 2019. trade balance if the economic recoveryforeign continues. Meanwhile, budget revenues are likely to increase with the uptick in domestic demand, thus helping to finance the budget to deficit. Inflation indicators are expected enter a downtrend after remaining relatively The policy high during the first half of the year. Central to be implemented by the Turkish Bank, particularly with regard to interest rate cuts, is key to prevent speculative actions in other major rates. In 2020, exchange foreign economy Turkey’s determining factors for include geopolitical developments specific the path to resolving possible to Turkey, sanctions implemented by the USA in relation conflict and the trend in trade to the S-400 negotiations. OYAK ANNUAL REPORT 2019 Turkish Economy Turkish 2.3% and economy contracted by 2.8%, Turkey’s in the last quarter of 2018 and first two 1.6% The downturn in quarters respectively. of 2019, economic activity coincided with deteriorating rates and inflation indicators. exchange foreign In the third quarter the Turkish of 2019, technical recession economy emerged from to the support of 1% thanks with growth of private and public sectors’ consumption The country’sexpenditures. economy expanded 6% in fourth quarter recovery with the robust at in industrial and manufacturing production Despite this brisk rebound the end of the year. lost significant economy by year’s end, Turkey’s in 2019, only 0.9% momentum and expanded in 2018. growth 2.8% down from ongoing Global concerns stemming from trade wars, lower global risk appetite from geopolitical normalization of monetary policy, and strained tensions specific to Turkey relations with the USA due to the S-400 systems conflict created downward pressure A negative lira denominated assets. on Turkish exchange outlook has dominated both foreign However, rates and stock markets in Turkey. an economic recovery in Turkey, is forecast particularly in capital markets, thanks to a rebounded in the last quarter in the rebounded the year of at the reached agreements with in tandem between the of trade negotiations first stage of the the negative impact USA and China, and ongoing increase in the USA production dominated related to global growth concerns the year. to is projected the world economy In 2020, moderately with potential recoveryimprove and global trade in investment spending in the first stage thanks to positive results by the USA and trade agreement signed in advanced economies China. Central banks an expansionary to maintain are expected monetaryto further stance support economic the new ECB Christine Lagarde, activity. that fiscal policy President, has remarked in an effective way in also needs to be used the current situation in addition to monetary Financial issues in developing countries policy. social due to high debt, geopolitical tensions, unrest, disagreements that may arise during trade negotiations and concerns USA-China which startedcreated by the coronavirus to China late in the year spread worldwide from are significant risks that may lead to another recession in 2020. TURKISH ECONOMY 2019 YEAR-END GROWTH RATE economyTurkey’s expanded 0.9% in 2019. 0.9% In 2020, the world economy is expected to demonstrate limited withimprovement potential recovery in investments and tradeglobal thanks positiveto results in the first stage trade agreement signed by the USA and China. OYAK Group Companies

Mining Metallurgy Cement Concrete Automotive Finance Group Group Paper Group Logistics Group • Ereğli Demir ve Çelik • Cimpor Global Holdings B.V. • OYAK Renault Otomobil • OYAK ANKER Bank Fabrikaları T.A.Ş. • OYAK Çimento A.Ş. Fabrikaları A.Ş. GmbH • İskenderun Demir ve • Adana Çimento Sanayii T.A.Ş. • MAİS Motorlu Araçlar • OYAK Yatırım Menkul Çelik A.Ş. • Bolu Çimento Sanayi A.Ş. İmal ve Satış A.Ş. Değerler A.Ş. • İsdemir Linde Gaz • Aslan Çimento A.Ş. • ORFİN Finansman A.Ş. • OYAK Yatırım Ortaklığı A.Ş. • Ünye Çimento Sanayi ve • ORF Kiralama Ortaklığı A.Ş. • Erdemir Madencilik Sanayi Ticaret A.Ş. Pazarlama ve Pazarlama • OYAK Portföy ve Ticaret A.Ş. • Mardin Çimento Sanayii ve Danışmanlığı A.Ş. Yönetimi A.Ş. • Erdemir Çelik Servis Ticaret A.Ş. • OMSAN Lojistik A.Ş. • OYAK Grup Sigorta Merkezi Sanayi ve Tic. A.Ş. • Denizli Çimento Sanayii T.A.Ş. • OYAK Denizcilik ve Reasürans • Erdemir Mühendislik • OYAK Beton Sanayi ve Liman İşletmeleri A.Ş. Brokerliği A.Ş. Yönetim ve Danışmanlık Ticaret A.Ş. • OYAK NYK Ro-Ro Liman Hizmetleri A.Ş. • Cimpor Portugal Cabo Verde İşletmeleri A.Ş. • Erdemir Romania SRL Operations SGPS S.A. • Erdemir Asia Pacific • OYAK Selüloz ve Kağıt Private Ltd. Fabrikaları A.Ş. • Erdemir Enerji Üretim A.Ş. • OYKA Kağıt Ambalaj Sanayii ve Ticaret A.Ş. OYAK GROUP COMPANIES

Service Group Chemicals Agriculture Energy Other OYAK Group Animal Group Group Companies • OYAK Savunma ve • Akdeniz Kimya Husbandry • İskenderun Enerji • Ataer Güvenlik Sistemleri A.Ş. Sanayi ve Group Üretim ve • OYAK Biyoteknoloji • OYAK İnşaat A.Ş. Ticaret A.Ş. Ticaret A.Ş. • Miilux OY • OYAK Pazarlama • Almatis Group • Hektaş Ticaret • OYAK Elektrik Hizmet ve Turizm A.Ş. • Chemson Group T.A.Ş. Enerjisi Toptan • MicroMedicine Inc. Satış A.Ş. Shaping the Turkish steel sector with its successful financial and operational performance, OYAK Mining Metallurgy Group competes in the global arena with the world’s best steel producers owing to its strong business culture, production quality and high added value product range.

In Worldsteel’s ranking of companies by raw OYAK Mining Metallurgy Group steel production, OYAK Mining Metallurgy Group was placed 4th among EU-28 steel producers, 8th alone manufactured 26% in Europe and 45th in the world.

Developments in 2019 of Turkey’s total raw steel • With 8,608 thousand tons of raw steel production, OYAK Mining Metallurgy production in 2019 by alone. Group realized 26% of the total raw steel production of Turkey in 2019. • In 2019, liquid steel production of OYAK Mining Metallurgy Group was 8,787 bin With the emergence of many risk factors tons while 7,257 thousand tons of flat end limiting the global economic potential, products and 1,026 tons of long end products especially trade wars which remained on the were manufactured. Making sales of 7,250 agenda, a year with challenging conditions in thousand tons flat and 1,057 thousand tons the steel industry has gone by. In 2019, liquid steel long finished products, the Group exported production of OYAK 1,723 thousand tons of finished products in The global steel production and consumption Mining Metallurgy total, including 1,504 thousand tons of flat increased by 3.4%, led by China which Group was 8,787 products and 219 thousand tons of long constitutes half of the world’s steel production thousand tons while products. The Group exported flat end and consumption. In the Chinese economy 7,257 thousand tons products to 52 countries while exporting growing with domestic demands as a result of of flat end products long end products to 23 countries. the incentives provided, the steel production and 1,026 tons of long • The iron ore production of the Group was and consumption increased by 8%. In the 1,938 thousand tons. end products were rest of the world except China, in a year in • During the year, in Erdemir 2nd Non-Stop manufactured. which sector’s protectionism reached the Galvanizing Line, Cold Rolling Mill Pickling- highest level in history, both production and Tandem Line (CPL-TCM) consumption lessened around 2% compared to Product Range and Capacity Enhancement the previous year. and New Shore Protection Structure projects are completed. Turkish steel production dropped by 15% • In İsdemir, Electrical Station Dust Holding corresponding to 26 million tons. Due to the and Water-Cooling System Modernization continuing shrinking domestic demand in projects are finalized. 2019 and increasing protectionism measures, • Erdemir Maden signed the transfer exportation got harder and steel production agreement on October 2018 to take over the of Turkey narrowed by 10%. With 33.7 million operating right of Alacaağzı Coal Site from tons production, Turkey maintained its rank as the Turkish Hard Coal Enterprise Institution being the 8th among the top 10 steel producer until 2049 and took over the license on May countries around the world. 21, 2019. Global Strength of the Turkish Industry The Mining Metallurgy Group at a Glance OYAK Mining Metallurgy Group operates in the • OYAK Mining Metallurgy Group is Turkey’s fields of steel production, mining, engineering only integrated flat steel producer and and project management. The Group produces constant leader of the sector. high-quality steel in advanced-technology • The Group, with its 11,428 personnel, ranks facilities and also engages in distribution. among the top largest private employers in Additionally, the Group is undertaking the Turkey. production of a significant amount of iron ore • The Group Companies; Erdemir, İsdemir, in Turkey. Erdemir Çelik Servis Merkezi and Erdemir Madencilik are listed in İSO 500. 28 OYAK ANNUAL REPORT 2019 OYAK GROUP COMPANIES

Çelik A.Ş. Üretim A.Ş. Ticaret A.Ş. Private Ltd. Private Ltd. Ortaklığı A.Ş. Ortaklığı Erdemir Enerji Fabrikaları T.A.Ş. Fabrikaları Sanayi ve Tic. A.Ş. İsdemir Linde Gaz Erdemir Asia Pacific Erdemir Asia Pacific İskenderun Demir ve Ereğli Demir ve Çelik Ereğli Demir Erdemir Romania SRL Erdemir Romania Erdemir Çelik Servis Merkezi Erdemir Madencilik Sanayi ve Erdemir Mühendislik Yönetim Erdemir Mühendislik Yönetim ve Danışmanlık Hizmetleri A.Ş. ve Danışmanlık Hizmetleri OYAK Mining Metallurgy companies OYAK which are listed in Erdemir and İsdemir, included in the Sustainability Index, BIST, featuring the organizations with corporate sustainability performances at the highest level. Erdemir has been maintaining its since position in the Sustainability Index November 2015 while İsdemir was featured in November 2019. in the index which are OYAK Erdemir and İsdemir, listed in top Mining Metallurgy Companies, Period Corporate 10 of the 2018 Taxation 100 List announced by the Top Turkey’s Tax 2018 tax Revenue Administration. In Turkish Central Bank and T.R. payment, following was listed on the Ziraat Bank, the Group tax upon the combined third place in Turkey payment of Erdemir and İsdemir. OYAKOYAK ANNUAL ANNUAL REPORT REPORT 2019 2019 • • Erdemir and İsdemir, which are OYAK Mining Metallurgy Companies, listed in top 10 of the 2018 Period Taxation Corporate Tax 100 Top Turkey’s List announced by the Revenue Turkish Administration. EREĞLİ DEMİR VE ÇELİK FABRİKALARI T.A.Ş.

As a result of the investments in boosting capacity, Erdemir increased annual raw material production capacity to around 4 million tons.

YEAR OF Ereğli Demir ve Çelik Fabrikaları T.A.Ş. In order to respond to the requirements of ESTABLISHMENT (“Erdemir”) was established in 1960 steel industry swiftly the company undertakes to produce flat-rolled iron and steel product development efforts In line with 1960 domestically in order to meet the country’s customers’ expectations, to further expand its demand and support industrialization efforts. dynamically managed product range to reach Construction of the facilities began in 1961 end users. YEAR OF OYAK GROUP’S and the plant began operations in 1965. PARTICIPATION Erdemir continues to execute new quality and Having pioneered the industrial development product development efforts. As of the year- of Turkey for the past half century, Erdemir end 2019, the company introduced a total of 2006 has increased its annual steel production 501 flat product qualities to the market, all capacity to about 4 million tons and its final capable of competing in domestic and foreign product capacity to nearly 5 million tons markets in terms of quality and price. SHARE OF OYAK GROUP(1) through capacity increasing investments. Erdemir has Turkey’s one of the largest port Based on sales from production criteria, 49.29% facilities in the Black Sea. Erdemir ranked 8th on the İSO Top 500 Industrial Enterprises list, released by the As a result of the tender held for the Istanbul Chamber of Industry. The Company FIELD OF ACTIVITY privatization of Erdemir in 2005, ATAER, a came in the 7th in the rankings of Turkish Tax Flat steel production wholly owned subsidiary of OYAK, acquired a Champions Top 100 for the 2019 fiscal year. and sales 49.29% stake in the company; the acquisition process was completed on February 27, 2006. As of the year-end 2019, Erdemir had a total of With the share transfer, Erdemir and its eight wholly- or majority-owned subsidiaries WEBSITE subsidiaries joined OYAK Group Companies. (6 local subsidiaries and 2 overseas subsidiaries). www.erdemir.com.tr More Than Half a Century of Experience in Investments the Mining Metallurgy Sector, Stability and Erdemir conducts its business operations (1) OYAK Group’s share is presented as the company’s Leadership with a vision to boost the competitiveness of share in the capital of OYAK/ Continuing to successfully operate in the the Turkish steel industry in global markets. OYAK GROUP Company as mining metallurgy sector for 55 years, The Company is currently preparing to swiftly published on KAP. Erdemir is Turkey’s largest integrated flat execute an initiative to produce high added- steel producer. The Company manufactures value steel not currently produced in Turkey. hot and cold rolled sheet, steel plates and tin, chrome and zinc coated steel sheets at During 2019, in Erdemir 2nd Non-Stop international quality standards. With all these Galvanizing Line, on 2nd Cold Rolling Mill products, Erdemir provides raw material for a Pickling-Tandem Line (CPL-TCM), Product wide range of industries – automotive, white Range and Capacity Enhancement and New goods, energy, heavy industry, construction, Shore Protection Structure projects are pipe manufacturing, shipbuilding, food and completed. packaging.

OYAK ANNUAL REPORT 2019 OYAK GROUP COMPANIES solutions. Therefore, it carries out activities solutions. Therefore, and high added competitive to produce costs, identify at convenient value products and alternative raw materials, equipment technologies, recycle wastes, and ensure more efficient use of raw materials and having the energy sources. The Group, capacity to make advanced steel researches continues R&D operations needed by Turkey to support and process raw material, product with its vision to strategies improvement the increase competitive power and structure future. main fields: It conducts activities in four Cold-Rolled and Process, Product Hot-Rolled and Production Steel and Process, Product Materials and Technologies, Raw Casting have been 29 projects R&D. Production Steel are ongoing at the projects finalized and 45 center. R&D Center has a staff of 55 members featuring 29 researchers, 20 technicians and a support team of six members. Placing importance the development of its for also carries out training employees, the Group activities in light of the current technological 38 different training advancements. In 2019, were delivered in technical issues programs specifically to R&D employees while doctorate and postgraduate educations were also R&D team participatedencouraged. In 2019, one national, nine international events with 10 articles, declarations, and posters in total. The team contributed to the intellectual capital with 68 articles,of the Group declarations, Mining OYAK and posters in total up to now. Coke Battery Coke th Slab Furnace Modernization Projects; Projects; Modernization Slab Furnace st OYAK ANNUAL REPORT 2019 the approval processes are completed and processes the approval have been initiated. processes procurement and Engineering, equipment manufacturing site activities have been initiated in Erdemir SortingNew Large and Examination Line Project. World Class Production World a Erdemir is committed to implementing all its common quality understanding across at international facilities, ensuring production is standards and operating in a way that sensitive to humanity and the environment. company adheres to these ends, the To İSO 9001 Quality, standards: the following OHSAS 18001 İSO 14001 Environment, İSO 50001 Occupational Health and Safety, İSO/IEC Safety, İSO 27001 Information Energy, Laboratories and Calibration 17025 Experiment Systems Quality Management 16949 and IATF the Automotive Sector. for Industry’s First Government- The Steel Approved R&D Center R&D and innovation efforts play a significant in solving the global issues. Having role the Ministry from obtained an approval of Industry 2014, and Technology on August 26, the R&D Center has been carrying out its activities in accordance with the strategic Mining Metallurgy OYAK goals of the Company. aims to meet customers’ increasing Group innovative through needs and expectations In New Sinter Project, 4 In New Sinter Project, Production and By-Product Facilities Facilities and By-Product Production Mill Secondary Dust Modernization, Steel Project, Growth Capacity System Collection 1 It conducts activities in four main fields: Hot-Rolled Product and Process, Cold- Rolled Product and Process, Steel Production and Casting Technologies, Raw Materials and Production Steel R&D. 29 projects have been finalized at the R&D Center. EREĞLİ DEMİR Metallurgy Group has five registered patents/ utility models. In 2019, the Group filed 10 VE ÇELİK patent and utility model applications this year. FABRİKALARI Two of the applications were joint initiatives (one of them Erdemir Mühendislik and the T.A.Ş. other İskenderun Demir Çelik Fabrikaları). The total number of the patent/utility applications reached 18 while the registration process for 17 applications is ongoing. One utility model has been approved as of the end of 2019.

In the meantime, six of the projects submitted to the TÜBİTAK TEYDEB 1501 Grant Program for R&D Projects have been completed since 2014. Activities for the three projects, for 501 which grants are approved, are ongoing. QUALITY NUMBER OF As part of the efforts exerted to increase FLAT STEEL PRODUCT competitive advantage and increase The quality number market share, the R&D Directorate and of OYAK Mining Quality & Technology Management co-ran Metallurgy Group’s improvement activities. As a result, 22 new flat steel product is steel qualities were developed, and 15 hot, two cold, four tinplate and one galvanized 501. qualities were put on the market. The flat steel product quality figure at OYAK Mining Metallurgy Group reached 501. As a result of the new product development activities, number of product types increased to 91 with As part of cost-cutting projects, precedence the addition of four new product types. was specifically given to dual phase (DP) steels, interstitial-free (IF) steels, and low carbon In 2019, flat steel development activities steel qualities (ULC). continued on a wide range including automotive, construction and heat-treated Packaging Steel steels. Cost reduction projects were launched Easy-open caps, jar lids and food packaging in high strength low alloy (HSLA) and oil pipe case materials are among tin materials steel qualities. The Group also carries out used in packaging. Up-to-date studies material review studies with the demand and industry’s expectation of this material of internal and external customers as well group reveal the need for materials with as process optimization works as part of higher plasticity and very low deformability providing customer satisfaction. characteristics. Projects are conducted at R&D Centre with the purpose of providing Especially in the automotive industry, the these characteristics for tin materials and As part of cost-cutting focus was put on development of high the works in line with this continues. In projects, precedence strength materials in the body design of the addition, Erdemir is a member of Tinplate was specifically given automobiles with the purpose of increasing Group which includes leading companies in to dual phase (DP) fuel savings and reducing carbon emissions. the world in the tin industry and is among steels, interstitial-free These works aim to smoothen the qualities of the participants of “CRFREE” Project aim of high endurance and plasticity of complicated (IF) steels, and low which is to conduct analyses in the area of tin parts. Within that frame, works are being carbon steel qualities technologies. (ULC). carried out to develop new generation steels specific to Erdemir by taking the expectations Next Generation Steels of the automotive industry into consideration. OYAK Mining Metallurgy Group aims to In order to carry the projects, which have gain competence in the production of next been done up to now, a step further, studies generation alloys with high performance and are being planned for 2020 regarding new added value in line with the aim to increase generation steel qualities and coating having efficiency in production processes as well as high added value. production of next generation steels at a pilot scale.

OYAK ANNUAL REPORT 2019 OYAK GROUP COMPANIES Product Lifecycle Assessment Lifecycle Product As part Assessment Lifecycle Product of the have started which (LCA), it is planned in 2019, as emissions carbon dioxide to analyze and natural of energy well as consumption of one-ton during the production resources it is By this way, end of 2020. steel by the Product generate Environmental aimed to by performingDeclaration (EPD) additional and groups product works specifically for in the green have a presence consequently, markets. R&D Investments on improving making investments Continuing to start Erdemir is planning R&D capacity, test in the first quarterproductions of 2020 with furnace set-up at R&D the vacuum induction center. simulator is The installation of hot rolling the aim completed at a pilot scale in line with generation of developing high strength next put steel qualities and the simulator will be into use in the first quarter And works of 2020. cold rolling commissioning are ongoing for simulator. OYAK ANNUAL REPORT 2019 In this connection, in 2020 it is aimed to it is aimed in 2020 connection, In this expanding by satisfaction customer increase for prototypes by producing range product high strength such as advance special steels furthersteels and and liquid steel improving reducing production quality, end product works, improvement process costs through low density steels. developing Batteries in Coke Efficiency million 4.5 uses approximately The Group per year and aims to tons of coking coal by using non-coking coals increase efficiency in the blend in order and half coking coals costs. Thus, semi- to reduce coal blend towards increasing industrial works oriented have efficiency in coke batteries production successful results have been conducted and been obtained. Emissions Reducing Carbon As part dealing with climate change, of various researches are being conducted with the aim of reducing carbon emissions at Erdemir. technologies and using proper Innovative methods are being researched the from such as retention of carbon dioxide during the process gases generated process and utilization of production of iron-steel algae. micro Continuing making investments on improving R&D capacity, Erdemir is planning start to test productions in the first quarter of 2020 with the vacuum induction furnace set- up at R&D center. As part of dealing with climate change, researches various beingare conducted with the aimof reducing carbon emissions and using proper technologies at Erdemir. EREĞLİ DEMİR Heat Treatment and Dressing Process Corporate Governance Principles Compliance Simulator (HTDPS) is used to develop next Rating increased to 9.49%. VE ÇELİK generation advanced high strength steel In the Corporate Governance Principles FABRİKALARI qualities and to improve available products. Compliance Rating Report, which evaluates Besides zinc, equipment is used to work on the company’s adherence to the Capital T.A.Ş. alternative dressing types using different Markets Board’s Corporate Governance alloys such as aluminum-silicon, magnesium Principles, Erdemir’s rating increased two etc. points in 2019, to 9.49 (94.9%). Erdemir’s strong corporate structure, and transparent, In line with the demands of customers fair, responsible and accountable governance of OYAK Mining Metallurgy Group in the approach was once again affirmed by automotive industry, corrosion tests are the high corporate management score it conducted on the products using salt spray received. Erdemir is among one of Borsa method in different operating conditions Istanbul’s first companies to be included with the Cyclic Corrosion Test Cabin which in BIST’s Corporate Governance Index, and was added to the R&D Centre’s infrastructure continues to remain on the index for the July in the year 2019 in order to test corrosion 2019-July 2020 period thanks to its strong characteristics and determine corrosion performance in corporate governance. behavior of the new kinds of coatings to be developed. BIST Sustainability Index In 2019, Erdemir was once again included Hydrogen permeability test equipment that in the BIST Sustainability Index, which enables determination of whether the steels provides a platform for BIST companies used in the white goods industry are suitable that demonstrate the highest corporate for enamel coating and welding machine sustainability performance. Aiming to achieve that enables welding tests to be conducted sustainability and produce sustainable value according to international standards are in all its activities, Erdemir is the only iron among other investments. and steel company included in the BIST Sustainability Index and maintaining its R&D and Innovation Ecosystem are Growing position since November 2015. and Becoming Widespread OYAK Group has a R&D culture in which Achievements Crowned with Awards all employees contribute with their ideas Crowning its successful performance in and suppliers’ know-how is used. Project almost every area with the awards it receives, ideas of the employees are assessed Erdemir was awarded with the silver prize as part of innovativeness, budget and for its Power Station Optimization Project resources, project’s financial revenue and in the International Enercon Conference partnerships that would emerge in the axis Energy Efficiency awards, organized in Berlin, of collaborations, and the progress made in Germany. approved projects are regularly monitored and reported. Erdemir also received an award as part of the International Occupational Safety Erdemir has its Regular meetings and seminars are Awards which is organized by British Safety stocks listed on the organized in order to benefit from expertise Council and is one of the most prestigious BIST-30 Index with and knowledge of the suppliers and joint organizations in the safety industry. 590 a 47.63% free-float, projects are conducted. Joint projects to companies applied for the awards which ranking among listed be conducted with the customers are has the goal to honor positive contributions, companies with the considered as opportunities in terms innovations, and applications in the field of largest investor base of mutual learning and continuous safety. Erdemir participated in the contest in Turkey. development. with its best practices and systematics which create difference in occupational safety The Favorite Company of Institutional management and became the first Turkish Investors company to receive the award. Erdemir has its stocks listed on the BIST- 30 Index with a 47.63% free-float, ranking among listed companies with the largest investor base in Turkey.

OYAK ANNUAL REPORT 2019 OYAK GROUP COMPANIES Excellence with Employee Participation with Employee Excellence has many Mining Metallurgy Group OYAK systems implementations such as suggestion by that will enable continuous improvement and innovative experiences using know-how, operational ideas of the employees, kaizens, (OPEX) projects. excellence million US to have 1.5 Erdemir is expected OPEX projects Dollar/year return from On the other hand, completed in 2019. Data Analysis supporting MiniTab® Statistical Statistical Design of an Experiment, program, Managers, Measurement Modelling for were Analysis training programs Systems In these projects. conducted to expand 38 employees were given training in Erdemir, 2019 within that frame. OYAK ANNUAL REPORT 2019 The Most Comprehensive H&S Project The Most Comprehensive in Turkey on Behavior Change Focused Erdemir materialized 5x5 Safe Production on the critical that focuses is Vital Project’ Steel actions on five areas listed by the World Association as the most frequent avoidable sources of danger that causes most of the involving The project loses in steel industry. nearly 4 thousand employees is the most that has been comprehensive project of so far in the area conducted in Turkey health and safety with a particular on focus constitutes an behavior change. The project important milestone in achieving Erdemir’s and accident steel production target of zero on critical behaviors in five main focuses height and partsareas: falling down from height, switching energy falling down from intervention to moving equipment, on-off, and working in gaseous/hot environment, traffic. Erdemir materialized materialized Erdemir ‘5X5 Safe Production is Vital Project’ that focuses on the critical actions on five areas listed by the World Steel Association as the most frequent avoidable sources of danger that causes most of the loses in steel industry. Erdemir is expected haveto 1.5 million US Dollar/year return from OPEX projects completed in 2019. EREĞLİ DEMİR VE ÇELİK FABRİKALARI T.A.Ş.

As of the end of 2019, 26,804 suggestions and providing internship opportunities to were given by the employees in Erdemir. university students and students of vocational 3,153 of them were assessed as H&S schools. proposals. 16,180 suggestions and 2,779 H&S proposals were implemented. In 2019, 1,621 Erdemir continued prioritizing its activities kaizen teams were made; 1,503 team projects in the area of education, particularly in were completed. The yield of 249 suggestions 2019. It provides support to the education in the suggestion system were calculated institutions within its operating area to and a result of USD 5.8 million USD yield was enable their activities in science, culture and obtained. Additionally, total earnings were arts, and sports as well as their participation recorded as USD 40.1 million in kaizens having in the contests while also remedying their return expectations. deficiencies in equipment and technical hardware; it has also contributed in the As part of İsdemir Excellence Model, 592 improvement of their physical conditions. 26,804 suggestions of 1,292 projects launched in Erdemir were were made by the completed by the end of 2019. A return of Erdemir supports the activities of Zonguldak employees by the end USD 44,534,746 is predicted to be gained Bülent Ecevit University’s Space Team of 2019 in Erdemir; from the projects. Grizu-263. Grizu-263 is an independent 3,153 of them were student team operating under the roof of acknowledged as H&S Contribution to Social Development BEÜ Engineering Faculty and received the proposals. Erdemir and its subsidiaries create added silver prize in the CanSat satellite contest value for the regional and national economy with the theme of design-built-launch which with their products and services while also was organized by American Astronautical contributing to social development. The Society (AAS) and American Institute of Group executes social responsibility projects Aeronautics and Astronautics (AIAA) and in collaboration with public agencies and sponsored by National Aeronautics and civil society organizations. These efforts Space Administration (NASA) in 2018 and mainly involve upgrading the equipment 2019. Space Team Grizu-263 also won Turkey of educational and healthcare facilities, championship award in Turksat’s satellite supporting culture, arts and sports events contest in 2019. as well as scientific studies at universities,

OYAK ANNUAL REPORT 2019 OYAK GROUP COMPANIES company in İSO 500 list ranking based on company in İSO 500 list ranking based th production sales from Subsidiaries İskenderun Demir ve Çelik A.Ş. İsdemir Linde Gaz Ortaklığı A.Ş. (İLGAZ) Erdemir Madencilik San. ve Tic. A.Ş. Erdemir Çelik Servis A.Ş. Merkezi San. Tic. A.Ş. Erdemir Müh. Yön. ve Dan. Hiz. S.R.L. Erdemir Romania Private Ltd. Erdemir Asia Pacific Erdemir Enerji Üretim A.Ş. BIST Code EREGL.IS Domestic Market Position 8 contest was organized in th OYAK ANNUAL REPORT 2019 Erdemir Steel and Life Sculpture Contest, and Life Sculpture Contest, Erdemir Steel started 2005 by Erdemir and organized in aims to supportbiennially since 2013, young in the development talents who will play a role of the art of sculpture, to contribute in the and to draw education of arts in Turkey steel attention to various utilization areas of art.through The 5 2019. 2019. Children’s theatre performances with free entrance were initiated in 2009 by Erdemir to other regions and continue by expanding Hence, the Companies. of operation of Group students to the theatre in 2,850 brought Group Ereğli, Iskenderun, Sivas and Istanbul in 2019. Erdemir’s “Let the Lands be Ploughed, Let the has been extended Project Tradition Continue” conducted in by three years as a project partnership with Ereğli District Directorate Agriculture Animal Husbandry, of Food, Ereğli District Directorate of Zonguldak to and Foundation National Education its and Protect Ottoman Strawberry Popularize has the goal to increase The project Producers. which of Ottoman Strawberry the production Ereğli however is identified with Karadeniz of which has come to a halt in the production recent years, to encourage its cultivation and to contribute in the regional biodiversity and conservation of species. In 2019, 2,850 students in Ereğli, İskenderun, Sivas and Istanbul were taken to the theatre. 2,850 İSKENDERUN DEMİR VE ÇELİK A.Ş.

İsdemir is the only integrated manufacturer of long and flat steel products in Turkey with an annual hot-rolling capacity of 3.5 million tons.

YEAR OF İskenderun Demir Çelik A.Ş. (“İsdemir”) was Turkey’s only integrated long and flat steel ESTABLISHMENT established in 1970 in Iskenderun, Hatay to producer, İskenderun Demir ve Çelik A.Ş. manufacture long iron and steel products. successfully conducts production, operation, 1970 In 2002, OYAK Mining Metallurgy Group maintenance and modernization works at acquired İsdemir through a privatization all of its facilities with the principle of quality transaction. In 2006, it joined OYAK Group production with optimum cost and maximum YEAR OF OYAK GROUP’S Companies. productivity. PARTICIPATION In 2008, İsdemir commenced production of Continuing to lead regional and national flat products after undergoing modernization development with high value also in 2019, 2006 and transformation through the single largest İsdemir broke annual records in significant capital investment ever in the history of the performance parameters such as 2nd Turkish Republic to eliminate the imbalance Blast Furnace Liquid Raw Iron production, SHARE OF of long/flat products in Turkey. İsdemir Specific Energy consumption, refractory OYAK GROUP(1) manufactures hot-rolled flat steel products consumption, and flat product shipments. and long products (billets and coils) with Additionally, the Company broke daily and 94.87% international quality standards. annual records in totally 16 parameters including production, shipment, recycled İsdemir’s products are used as input in a waste products and fuel consumptions. FIELD OF ACTIVITY wide range of industries, including pipe Long and flat steel manufacturing, shipbuilding, construction, Investments production and sales and manufacturing. As a result, İsdemir In 2019, Electric Station Dust Collection and spearheads the industrial development of Water Cooling System Modernization projects Turkey. are finalized. Approval processes for the New WEBSITE Sinter Factory Project and 1st Blast Furnace www.isdemir.com.tr Turkey’s Biggest Iron and Steel Plant High-pressure Turbine Project are completed Being Turkey’s biggest integrated iron and procurement processes of the projects and steel plant in terms of long product have been initiated. (1) OYAK Group’s share is manufacturing capacity, İsdemir is also the presented as the company’s share in the capital of OYAK/ only integrated manufacturer of long and Additionally, engineering, equipment OYAK GROUP Company as flat steel products with an annual hot- productions and site operations have started published on KAP. rolling capacity of 3.5 million tons. Located in in the extension of A-B Halls and New İskenderun Bay and one of Turkey’s deepest Crane Purchasing Project, 3rd Coke Battery ports, İsdemir Port has a capacity of 21 million Modernization Project, Vacuum Degassing tons and provides loading/unloading services Facility Projects. for bulk cargo (solid and liquid) and general cargo.

OYAK ANNUAL REPORT 2019 OYAK GROUP COMPANIES obtained in cost cutting studies for high- obtained in cost cutting studies for PC carbon SAE 1080 quality coins to produce are still procedures and verification wire/robe wire ongoing. Bead wire and patented thin on quality coin development works are put the agenda. developed 12 and the Company In 2019, long and flat for qualities 25 new product reaching 305 respectively, groups, product and 216 flat product qualities long product qualities. five patent/utility model applications, In 2019, one of them is with Erdemir R&D Directorate, have been made. Three of these applications the remaining two are patent while are for the applications made utility models. With for total number of applications the in 2019, patent reached 17; one utility model and three applications were registered. OPEX Activities The participation and contributions of Mining Metallurgy employees at OYAK constant development. provides Group new ideas experiences, The know-how, of the employees are deployed in kaizens, suggestion systems, statistical data analysis to generate and design of experiments value as a result of the related operational this system Through projects. excellence the employees provide and projects, in occupational health and improvement customer satisfaction, environment, safety, quality and operational activities resulting in cost savings. OYAK ANNUAL REPORT 2019 R&D Activities Mining R&D Center serving under OYAK İsdemir is affiliated that Metallurgy Group, the Ministry from to, obtained an approval of Industry 2014 26, and Technology on August and continues its operations successfully. wastes eliminating for material projects Raw production, and decreasing costs; iron process for projects steel production and process hot product improvement, are being carried out. projects improvement activities experimental In coke production, are performed to decrease carbon emissions as and get cost advantage by using biomass source. a renewable alternative raw material Putting efforts on recycling waste products, on palletizing, is focused the Company by briquetting, and recycling those materials the impurities that limit removing them from their utilization. As part of the improvement and development efforts steel production for works have been initiated for processes, in rubber reinforced liquid steel production steels and free machining steel quality. DP600 quality development works in flat automotive are completed while qualities for sustainability initiatives are still ongoing. outcomes were obtained in testing Positive rubber tire cords and 11SMn30 quality free for range machining steels in the long product Verification procedures of the Company. While the are still ongoing in that context. sustainability studies are under way for gas metal SG2/SG3 quality coins to produce outcomes were arc welding wire. Positive In 2019, the Company developed 12 and 25 new product qualities and long for flat product groups, reaching respectively, 305 long product qualities and 216 flat product qualities. İSKENDERUN The employees in İsdemir shared the DEMİR VE ÇELİK A.Ş. betterment opportunities they realized in occupational health and safety, environmental performance, customer satisfaction, facilitating business processes, saving energy, etc. within the frame of suggestion systems in 2019.

In 2019, 40,306 OPEX Projects also continued in 2019 to that always looks out for the better with the suggestions were make production with lower costs, extend participation of all the employees, making use given by the equipment life, save energy, optimize raw of İsdemir’s historic intellectual know-how. employees in İsdemir; materials, improve product quality. İsdemir is 14,490 of them were expected to have 10.3 million USD/year return Related basic values are as follows; implemented during from OPEX projects completed in 2019. the year. Statistical Data Analysis supporting MiniTab® • To make production without giving harm to program, Design of an Experiment, Statistical people and environment, Modelling for Managers, Measurement • To be in search for the better option at all Systems Analysis training programs were times in operational processes and launch conducted to expand operational excellence good practices rapidly, projects. In İsdemir, 54 employees were given • To use and develop all resources required training in 2019 within that frame. for the operation in the most efficient manner, The employees in İsdemir shared the • To create additional value by innovative betterment opportunities they realized approach, process and applications, in occupational health and safety, • To enable participation of each employee to environmental performance, customer the success satisfaction, facilitating business processes, • To communicate our vision, mission, saving energy, etc. within the frame policies, values, Company functions, of suggestion systems in 2019. 40,306 performance criteria and targets to all our suggestions were given by the employees in employees, adopt continuous improvement İsdemir; 14,490 of them were implemented culture and establish a corporate culture during the year. 1,366 out of 1,711 kaizens, that always looks for the better. set up during the year, were completed. Accession tools In 2019, kaizen training was delivered to İsdemir’s Excellence Model consists of nine 250 employees. Accession tools training functional groups: training was provided was provided to 41 employees as part of to 41 employees as the orientation program of monthly wage • Total Safe Production, part of the orientation employees. • Total Efficient Production, program of monthly • Effective Cost Management, wage employees. İsdemir Excellence Model • Efficient Supply Management, The İsdemir Excellence Model (İEM) launched • Human Resources on July 13, 2017 with “Maximize Financial • Efficient Energy Management, Value by Protecting People and Environment” • Investments, slogan. The goal is to get ahead of the • Shareholders, competition by forming a corporate culture • Innovative Approaches.

OYAK ANNUAL REPORT 2019 OYAK GROUP COMPANIES

th place in İSO 500 th on the İSO 500 list as per the sales from on the İSO 500 list as per the sales from th production criterion. The company ranked 6 criterion. production In the clinker optimization project launched In the clinker optimization project the clinker amount is by the end of 2018, increased decreased by 37% while production 2019 are As a result, the goals for by 1.5%. have achieved and sustainability conditions been defined. The 7 in 2018 Taxing Period Corporate Tax Turkey’s Turkey’s Tax Period Corporate in 2018 Taxing 100 list. Top BIST Code ISDMR.IS Quality Management System İsdemir holds the İSO 9001: 2015 Quality İSO 14001: 2015 Management System, TS EN İSO Management System, Environment Health and Safety Occupational 45001:2018 İSO 50001:2013 Energy Management System, 16949 IATF İSO 17025, Management System, (Automotive), Quality Management System Safety Management İSO 27001 Information TS EN İSO/IEC 17025:2017 certificateSystem, of Laboratory suitability and TS EN 10025-1 certifications. Control Production Factory Subsidiaries İsdemir Linde Gaz Ortaklığı A.Ş. Based on the 2018 results, İsdemir ranks Based on the 2018 results, İsdemir ranks 10 OYAK ANNUAL REPORT 2019 Each function group in the model consists function group Each teams, function leader, of function owner, based project The and unit task forces. and temporary composed of task forces to monthly and hourly waged employees reach their targets with the performance of each criteria in accordance with the goals the employees have function. Consequently outside the chance to work in the projects their departments in their scope of and deepen their expertise; adding value to the corporation. set projects of 3,463 Within that frame; 1,531 up in 2019 were completed. A total of 4,716 employees took part in İsdemir operational A return of USD 171.5 task forces. excellence the million is predicted to be obtained from completed projects. Model launched in 2017 in İsdemir Excellence was shared with Erdemir on August İsdemir, 2018 and put into implementation. 15, Projects to Increase Productivity the goal of the new R&D projects, In 2019, to decrease on productivity focused consumables used in steel production efficiency was to increase process processes, and steel cleaning. In the clinker optimization project launched by the end of 2018, the clinker amount is decreased by 37% productionwhile increased by 1.5%. As a result, the goals for 2019 are achieved sustainabilityand been have conditions defined. İSDEMIR LINDE GAZ ORTAKLIĞI A.Ş.

İsdemir Linde Gaz Ortaklığı A.Ş. produces and sells industrial gas.

YEAR OF İsdemir Linde Gaz Ortaklığı A.Ş. was ESTABLISHMENT established as a joint venture with 50%-50% equally-held shares to set up a new air separation facility to 2016 reinforce the production capacity at İskenderun Demir ve Çelik A.Ş., meet YEAR OF OYAK GROUP’S its additional need for industrial gas PARTICIPATION and reduce costs through an effective and productive management. Within that frame, the Eighth Air Separation 2016 Facility, located at the factory site of İskenderun Demir ve Çelik A.Ş., became operational on January 12, SHARE OF OYAK GROUP 2018 upon the completion of testing activities. The plant has a capacity of; 50% i) 27 thousand Nm3/hour gas oxygen, ii) 25,500 Nm3/hour gas nitrogen, iii) 300 Nm3/hour liquid nitrogen and, FIELD OF ACTIVITY iv) 790 Nm3/hour liquid argon. Manufacturing and Sale of Industrial Gas

OYAK ANNUAL REPORT 2019 OYAK GROUP COMPANIES OYAK ANNUAL REPORT 2019 ERDEMİR MADENCİLİK SANAYİ VE TİCARET A.Ş.

Erdemir Maden produces pellets, by- products, pellet cake, magnetite and iron ore (broken and dust) at its own mine sites.

YEAR OF Erdemir Madencilik San. ve Tic. A.Ş. (“Erdemir In 2019, expropriation works under the ESTABLISHMENT Maden”) was established in 1938 to produce Hasançelebi Iron Ore Enrichment and iron ore. In 2004, the company was acquired Pelletizing Plant project to reduce reliance by OYAK Mining Metallurgy Group through a of Erdemir Maden’s steel and iron plants on 1938 privatization transaction. foreign sources continued.

YEAR OF OYAK GROUP’S It became an OYAK Group Company in Erdemir Maden signed a transfer agreement PARTICIPATION 2006. Erdemir Maden produces pellets, by- in October 2018 to take over the operating products, pellet cake, magnetite and iron ore rights of the Alacaağzı Coal site owned by the (broken and dust) at its own mine sites. Turkish Hard Coal Authority until 2049. The 2006 Company got the license transfer on May 21, Turkey’s Biggest Producer of Iron Ore 2019. Drilling works were done in the site Erdemir Maden is Turkey’s biggest iron during 2019 to determine reserves. SHARE OF OYAK GROUP ore producer and the owner of the largest portfolio of mines – nine iron ore mines Based on the 2018 results, Erdemir Maden 90% and one manganese mine, 11 in total. The ranks 247th on the İSO 500 list as per the sales Company also has a Concentration and Pellet from production criterion. Plant – Turkey’s only pellet plant, in Divriği, FIELD OF ACTIVITY Sivas. Some 21% of Turkey’s exploitable iron Quality Management System Iron ore production ore reserves are located in the company’s OHSAS 18001 and pelletizing licensed areas.

Erdemir Maden owns the first and only iron WEBSITE ore pelletizing plant in Turkey. The Company www.erdemirmaden.com.tr accounts for 33% of total iron ore production in Turkey and single-handedly meets 12% of the country’s demand for raw materials containing iron.

OYAK ANNUAL REPORT 2019 OYAK GROUP COMPANIES OYAK ANNUAL REPORT 2019 ERDEMİR ÇELİK SERVİS MERKEZİ SANAYİ VE TİCARET A.Ş.

Ersem is the largest steel service center in Turkey as well as the country’s most advanced facility with its state-of-the-art equipment.

YEAR OF Erdemir Çelik Servis Merkezi San. ve Tic. Projects ESTABLISHMENT A.Ş. (Ersem) was established in 2001 and In 2019, Ersem attended to the contests; commenced operations in the Gebze Golden Glove with H&S Roof Model Project Organized Industrial Zone in 2002. It became and Golden Suggestion with four suggestions. 2001 an OYAK Group Company in 2006. The Company materialized the TARGET 12 ZERO ACCIDENT model to prevent accidents YEAR OF OYAK GROUP’S Turkey’s Largest Steel Service Center and keep the awareness of the employees at PARTICIPATION Boasting a combined annual production the highest level. capacity of 1.95 million tons for slitting and cut-to-length at its Gebze, Ereğli, Kaizen 2006 İskenderun and Manisa plants, Ersem 102 kaizen projects, focused on efficiency provides dimensioned flat steel products and process, were completed with the to a wide range of industries. These participation of the employees in 2019 and SHARE OF OYAK GROUP include the automotive, white goods, panel efforts were put in to enhance productivity radiators, packaging, electronics, machine and improve processes. 100% manufacturing, pipes and profiles, heating and cooling, agriculture, and distribution Quality Management System industries. İSO 9001, IATF 16949, İSO/IEC 27001 FIELD OF ACTIVITY Cutting, slitting, Ersem is the largest steel service center in shaping and storing Turkey and the country’s most advanced iron and steel facility with its state-of-the-art equipment. products Ersem ranks 67th in the İSO 500 list for sales from production criterion. WEBSITE www.ersem.com.tr

OYAK ANNUAL REPORT 2019 OYAK GROUP COMPANIES OYAK ANNUAL REPORT 2019 ERDEMİR MÜHENDİSLİK YÖNETİM VE DANIŞMANLIK HİZMETLERİ A.Ş.

Erdemir Mühendislik provides investment advisory, engineering and project management services to the manufacturing facilities of OYAK Mining Metallurgy Group.

YEAR OF Erdemir Mühendislik Yönetim ve Danışmanlık Erdemir Mühendislik completed in Erdemir ESTABLISHMENT Hizmetleri A.Ş. (“Erdemir Mühendislik”) was 2nd Non-Stop Galvanizing Line, on 2nd Cold established in 2001 and became an OYAK Rolling Mill Pickling-Tandem Line (CPL-TCM), Group Company in 2006. The Company Product Range and Capacity Enhancement 2001 provides investment advisory, engineering and New Shore Protection Structure projects. and project management services to the YEAR OF OYAK GROUP’S manufacturing facilities of OYAK Mining The Company completed Electrical Station PARTICIPATION Metallurgy Group. Dust Holding and Water-Cooling System Modernization projects in İsdemir. Erdemir Mühendislik offers OYAK Mining 2006 Metallurgy Group companies project In Erdemir New Sinter Project, for Erdemir management, design, procurement, 4th Coke Battery Production and By- SHARE OF OYAK GROUP contract management and supervision Product Facilities Modernization, Steel Mill services throughout the entire investment Secondary Dust Collection System Capacity process – from feasibility studies to plant Growth Project, Erdemir 1st Slab Furnace 100% commissioning, and it follows technological Modernization Projects; İsdemir New Sinter advancements closely. The Company places Project, İsdemir 1st Blast Furnace High- FIELD OF ACTIVITY great importance on increasing productivity, pressure Turbine Project, Board approval Engineering and saving energy, and reducing environmental is taken and procurement processes of the consultancy services impact while managing plant investment projects have been initiated. projects. Furthermore, in Erdemir New Large and WEBSITE Continuous Development Strategy Examination Sorting Line Project, İsdemir www.mühendislikerdemir.com.tr In 2019, OYAK Mining Metallurgy Group Extension of A-B Halls and New Crane continued to implement its continuous Purchasing Project, İsdemir 3rd Coke Battery development strategy regarding investments Modernization Project, İsdemir Vacuum in its modern integrated iron and steel plants Degassing Facility Projects Engineering, which produce competitive products. Board approval is taken for technology acquisition and engineering, equipment The number of continuing projects in Erdemir manufacturing and site activities have been and İsdemir in 2019 is 28. Five of these initiated. projects have started within 2019 while four of them completed in 2019.

OYAK ANNUAL REPORT 2019 OYAK GROUP COMPANIES OYAK ANNUAL REPORT 2019 ERDEMİR ROMANIA SRL

Erdemir Romania garnered “Number 1 in Metallurgy Industry” award in 2019.

YEAR OF ESTABLISHMENT 2002

YEAR OF OYAK GROUP’S PARTICIPATION 2006

SHARE OF OYAK GROUP 100%

FIELD OF ACTIVITY Established by OYAK Mining Metallurgy In 2019, Erdemir Romania was deemed Production and Sales Group in Targoviste in Romania, Erdemir worthy of the “Number One in the Metallurgy of Electrical Steel Romania SRL acquired the Laminorul De Sector” award by the Chamber of Commerce Benzi Electrotehnice (LBE) plant in Romania, in Dambovita state. which produces silicon flat steel, through a WEBSITE privatization tender in 2002. Quality Management System www.erdemir.ro İSO 9001, İSO 14001, OHSAS 18001, İSO 50001 Becoming an OYAK Group Company in 2006, Erdemir Romania produces non-oriented electrical steel, which is a main input used in a variety of industries, including electro- technical applications, electric motors, power transformers and generators. In addition to Turkey and Romania, the company exports its products to many countries.

OYAK ANNUAL REPORT 2019 OYAK GROUP COMPANIES ERDEMİR ENERJİ ÜRETİM A.Ş. ENERJİ ERDEMİR OYAK ANNUAL REPORT 2019 Erdemir Enerji Üretim A.Ş. was founded as Erdemir Enerji Üretim A.Ş. was founded wholly owned subsidiary by Ereğli Demir ve Çelik renewable energy to produce T.A.Ş. Fabrikaları and the establishment of the new company Trade Registry is announced on the Turkish 2019 with the no. 9737. Gazette dated January 3,

100% FIELD OF ACTIVITY Renewable energy production 2019 GROUP SHARE OF OYAK 2019 GROUP’S YEAR OF OYAK PARTICIPATION YEAR OF ESTABLISHMENT

to produce renewable energy. to produce renewable energy. Erdemir Enerji Üretim A.Ş. is established established A.Ş. is Üretim Enerji Erdemir OYAK Cement Concrete

Paper Group is the market Expanding Abroad OYAK Çimento undertook a ‘first’ in the leader in the countries of Turkish cement sector and acquired the Portugal and Cape Verde operations of CIMPOR, one of the largest cement brands in operation. Europe, on January 17, 2019.

With an enhanced cement production capacity as a result of smart investment trusts, OYAK Çimento Cement Concrete Paper Group will keep taking strategic decisions on the path to becoming a global player, rather The Group is operational in Turkey, Portugal, than remaining a mere regional power in Cape Verde, the Ivory Coast and Romania as 2020. the market leader. The Group aims to cement its position in OYAK Cement Concrete Paper Group the global markets, through integration operates in seven geographic regions of its assets with the robust and global in Turkey, with six cement and vertically organization it will establish. integrated concrete, paper and energy companies. The Group is the strongest The Cement Concrete Paper Group at supplier of Turkey’s cement industry in terms a Glance: of production capacity and market share. • The Group has a total clinker production capacity of 17.8 million tons, domestic and The Turkish Cement Manufacturers’ foreign output combined. OYAK Cement Association (TCMA) and anticipated a year- • The Group has a total cement production Concrete Paper on-year 30% decline in cement consumption capacity of 32.6 million tons, domestic and Group has a clinker as of the end of 2019. According to the foreign output combined. production capacity of data of the Turkish Ready Mixed Concrete • In 2019, the Group generated some 65,270 17.8 million tons/year. Association (THBB), production volume for MWh of electricity from waste heat and 2019 is anticipated to reach 60 million cubic 2,543 MWh of electricity from solar energy. meters, as per unofficial numbers, in parallel • The Group produces in 39 ready-mixed with the shrinkage in the construction sector. concrete plants spread across the Mediterranean, Marmara, Black Sea, Stock in OMSAN Lojistik A.Ş., an OYAK Group Central Anatolia and Aegean regions of company, which holds a 20% stake in Adana Turkey. Çimento and Mardin Çimento, was sold in its • Adana Çimento, Bolu Çimento, Aslan entirety to the Armed Forces Pension Fund in Çimento, Ünye Çimento and Mardin return for TRY 107,740,000. Çimento are traded on Borsa İstanbul (Istanbul Stock Exchange). • Adana Çimento, Bolu Çimento and OYAK Beton are listed on the İSO Top 500 Industrial Enterprises list while Aslan Çimento, Denizli Çimento and Mardin Çimento are featured in the İSO’s Second Top 500 Industrial Enterprises list.

52 OYAK ANNUAL REPORT 2019 OYAK GROUP COMPANIES Aslan Çimento A.Ş. OYAK Çimento A.Ş. Çimento OYAK Bolu Çimento Sanayi A.Ş. Adana Çimento Sanayii T.A.Ş. Adana Çimento Sanayii Denizli Çimento Sanayii T.A.Ş. OYAK Beton Sanayi ve Ticaret A.Ş. Beton Sanayi OYAK Ünye Çimento Sanayi ve Ticaret A.Ş. OYAK Selüloz ve Kağıt Fabrikaları A.Ş. Fabrikaları Kağıt Selüloz ve OYAK Mardin Çimento Sanayii ve Ticaret A.Ş. OYKA Kağıt Ambalaj Sanayii ve Ticaret A.Ş. Kağıt OYKA Cimpor Portugal Cabo Verde Operations SGPS S.A. Cabo Cimpor Portugal OYAK ANNUAL REPORT 2019 OYAK ÇİMENTO A.Ş.

In 2018, OYKA shares were transferred to OYAK Selüloz and Kağıt Fabrikaları A.Ş. via a partial demerger.

YEAR OF OYAK Çimento A.Ş. was established in ESTABLISHMENT November 2015 with the purpose of gathering OYAK Cement Companies and their Group Companies under one 2015 management. On December 3, 2015, the company took over OYAK Cement YEAR OF OYAK GROUP’S Concrete Paper Companies along with PARTICIPATION OYKA’s shares owned by OYAK. The Company transferred the OYKA shares to 2015 OYAK Selüloz by a demerger in 2018. Subsidiaries Adana Çimento Sanayii T.A.Ş. SHARE OF OYAK GROUP Bolu Çimento Sanayi A.Ş. Aslan Çimento A.Ş. 60% Ünye Çimento San. ve Tic. A.Ş. Mardin Çimento San. ve Tic. A.Ş. Denizli Çimento San. T.A.Ş. FIELD OF ACTIVITY OYAK Çimento Enerji San. ve Tic. A.Ş. Investing in cement, Cimpor Cote D’Ivoire ready-mixed concrete and paper industries.

WEBSITE www.oyakcimento.com

OYAK ANNUAL REPORT 2019 OYAK GROUP COMPANIES OYAK ANNUAL REPORT 2019 ADANA ÇİMENTO SANAYİİ T.A.Ş.

The company carries out blood donation In 2019, two new limestone campaigns in collaboration with Red Crescent. These campaigns aim to develop a more participatory approach for areas were acquired in social problems, raise awareness for the importance of blood donations and boost Adana Misis to ensure raw the number of voluntary blood donors. Blood donation drives are a regular practice across the world, especially in more developed material sustainability. countries.

Annual tree planting activities also continued

in 2019. Some 796 trees featuring high CO2

absorption and O2 release rates were planted during the year.

YEAR OF Adana Çimento Sanayii T.A.Ş. (“Adana In 2019, two new limestone quarries were ESTABLISHMENT Çimento”) was established in 1954 to provide acquired in Adana Misis to ensure raw cement for construction projects in the material sustainability. Registration of the Çukurova region. The company, which areas is ongoing. 1954 commenced operations in 1957, took its current name Adana Çimento Sanayii in 1986 Thanks to a wide range of efficiency projects, YEAR OF OYAK GROUP’S after OYAK had acquired a stake in 1963. 26,377,437 thousand kWh/year of electricity PARTICIPATION Adana Çimento stock started trading on was saved in 2019, preventing 13,775 tons of Borsa İstanbul (BIST) in 1991. CO2 emissions.

1963 Together with its subsidiaries in the To lessen the environmental impacts of Mediterranean region and TRNC, Adana products, by products or wastes of many Çimento boasts an annual cinder grinding operational processes, blast furnace slag, fly OYAK ÇİMENTO A.Ş.’S capacity of 2 million tons of gray clinker, ash, synthetic plaster and bottom ash were SHARE(1) 1 million tons of white clinker, 5.5 million converted into alternative raw materials tons of gray cement, and white cement. The during the cement production process. 65.2% Company owns a cement production facility As a result, primary resource utilization is in İskenderun Payas and two grinding and decreased while negative environmental packaging facilities at İsdemir. impacts of those wastes are eliminated. FIELD OF ACTIVITY Production and sales Based on sales from production, Adana BIST Code of cement and clinker Çimento ranked 353rd on the İSO Top 500 ADANA.IS, ADBGR.IS, ADNAC.IS Industrial Enterprises list of 2019. Quality Management System WEBSITE Adana Çimento creates employment, growth İSO 9001, İSO 14001, OHSAS 18001, İSO 50001 www.adanacimento.com.tr and economic value in the region where it operates. The Company also adopts a cultural Subsidiaries and artistic approach and takes part in social Adana Çimento San. ve Tic. Ltd. (1) OYAK Çimento’s share is presented as the company’s responsibility efforts in order to increase Adana Çimento Free Port Ltd. share in the capital of OYAK/ quality of life and thus contribute to safer OYAK Beton San. ve Tic. A.Ş. OYAK Group Company as communities. published on KAP.

OYAK ANNUAL REPORT 2019 OYAK GROUP COMPANIES OYAK ANNUAL REPORT 2019 BOLU ÇİMENTO SANAYİİ A.Ş.

Headquartered in Bolu and having branches in Ankara and Ereğli, Bolu Çimento has a total clinker production capacity 2.5 million tons.

YEAR OF Bolu Chamber of Commerce spearheaded Based on sales from production, Bolu ESTABLISHMENT the establishment of Bolu Çimento Sanayii Çimento was ranked 401st on the İSO Top A.Ş. (“Bolu Çimento”) in 1968 with the 500 Industrial Enterprises list, which was purpose of meeting cement demand in Bolu. announced in May 2019. 1968 In 1969, OYAK acquired a 25% stake in Bolu Çimento; by 1990, OYAK had increased its Contribution to the Environment YEAR OF OYAK GROUP’S stake in the company to nearly 50%. Upon Fully aware of its environmental PARTICIPATION the completion of business establishment responsibilities, Bolu Çimento planted a procedures, construction began on the total of 250 thousand trees between 1998 factory on September 26, 1969. After the and 2019. The Company also undertakes the 1969 installation work was completed, the factory regular care and maintenance of these trees. began test runs in 1973 and became fully operational on June 1, 1974. BIST Code OYAK ÇİMENTO A.Ş.’S BOLUC.IS SHARE(1) Being one of Turkey’s most important cement producers, headquartered in Bolu and having Quality Management System 49.99% branches in Ankara and Ereğli, Bolu Çimento İSO 9001, İSO 14001, OHSAS 18001, İSO has a total clinker production capacity 2.5 50001, İSO/IEC 27001 API Spec Q1 (API Quality million tons; 5,25 million tons cement and Management System), API Spec 10A (API FIELD OF ACTIVITY slag grinding capacity. Monogram Certificate),EN 197-1 and EN 15167-1 Production and sales of cement and clinker The Company produces nine different types Subsidiaries of cement, including special cements for OYAK Beton San. ve Tic. A.Ş. durable and sustainable construction projects WEBSITE such as Marmaray and oil-well cements www.bolucimento.com.tr certified by the American Petroleum Institute (API), as well as ground blast furnace slag for the construction industry. (1) OYAK Çimento’s share is presented as the company’s share in the capital of OYAK/ OYAK Group Company as published on KAP.

OYAK ANNUAL REPORT 2019 OYAK GROUP COMPANIES OYAK ANNUAL REPORT 2019 ASLAN ÇİMENTO A.Ş.

Prioritizing customer satisfaction at all times, Aslan Çimento has maintained the quality of its products.

YEAR OF Aslan Çimento A.Ş. (“Aslan Çimento”) cement by ensuring customer satisfaction ESTABLISHMENT – Turkey’s first cement factory – was and boosting additive rates. In 2019, 97% of established on December 20, 1910 under cement sales were blended cement to ensure the name Memalik-i Osmaniye’de Sun’i customer satisfaction. 1910 Çimento ve Hidrolik Kireç İmalına Mahsus Arslan Osmanlı Anonim Şirketi. In December Aslan Çimento is pioneering the industry with YEAR OF OYAK GROUP’S 2009, OYAK acquired all the shares of Aslan its branded cement products CEMENTUM PARTICIPATION Çimento, which were held by the French and POWERCEM, which were developed from Lafarge Group, to become the sole owner of R&D efforts in response to customer needs the company. and expectations. As a result, the company 2009 contributes to environmental sustainability The Company has a production capacity of and concrete durability with these innovative 1.8 million tons of clinker and 3.3 million tons products. OYAK ÇİMENTO A.Ş.’S of cement besides owning a port with an SHARE(1) annual cargo handling capacity of 2 million Based on sales from production, Aslan tons, which the company uses for import and Çimento ranked 123rd on the ISO Top Second 96.67% export operations. 500 Industrial Enterprises list, which was announced in July 2019. 2019 marked a successful period in terms FIELD OF ACTIVITY of the Company’s general technical Energy Savings Production and sales performance. Prioritizing customer Actions were taken to reduce energy costs of cement and clinker satisfaction at all times, Aslan Çimento has throughout the year. These included actions maintained the quality of its products. for conversion to alternative fuels and achievement of significant improvements in WEBSITE Aslan Çimento conducts innovation and the performance of the waste-derived fuel www.aslancimento.com.tr product development activities in light of preparation plant. its deep rooted corporate culture. Quality control, customer satisfaction, environmental BIST Code (1) OYAK Çimento’s share is sustainability, and cost reduction are ASLAN.IS presented as the company’s prioritized across all company operations. share in the capital of OYAK/ OYAK Group Company as Subsidiaries published on KAP. Efforts are ongoing to continue sales of OYAK Beton San. ve Tic. A.Ş. blended cement instead of CEM I 42.5 Marmara Madencilik San. ve Tic. Ltd. Şti.

OYAK ANNUAL REPORT 2019 OYAK GROUP COMPANIES OYAK ANNUAL REPORT 2019 ÜNYE ÇİMENTO SANAYİ VE TİCARET A.Ş.

Based on sales from production, Ünye Çimento ranked 185th on İSO Top Second 500 Industrial Enterprises list in 2019.

YEAR OF Ünye Çimento Sanayi ve Ticaret A.Ş. (Ünye Ünye Çimento held a Breast Cancer ESTABLISHMENT Çimento) was established in 1969 in Ünye, Awareness Seminar for company employees Ordu with OYAK’s 40% ownership stake. The and their relatives delivered by a specialist 1969 Company commenced operations in 1974. physician from Medical Park Hospital in 2019. Ünye Çimento produces various types of During the year, the Company held another YEAR OF OYAK GROUP’S gray cement and clinker having a production awareness seminar in coordination with the PARTICIPATION capacity of 1.6 million tons of clinker and infirmary unit and H&S authorities to help 2.75 million tons of cement. The Company employees to cease smoking. Measurements also owns an export port and a cement were made with a carbon monoxide detector. 1969 pumping and packing facility in Çayeli, Rize. Ünye Çimento’s subsidiary Ünye Cem OYAK Çimento Concrete Paper Group SRL in Romania executes the export and conducts social responsibility initiatives OYAK ÇİMENTO A.Ş.’S commercial sales of cement products in bulk to assist the children of martyrs’ and the SHARE(1) or packed form. relatives of OYAK-member veterans. As part of this effort, an Ankara trip and coaching 51.33% Based on sales from production, Ünye seminar were organized by Ünye Çimento for Çimento ranked 185th on the İSO Top Second schoolchildren preparing for exams related 500 Industrial Enterprises list in 2019. to preparation phases and school choices. FIELD OF ACTIVITY Furthermore, the company also presented Cement-clinker Contribution to the Environment and Society various gifts to children of martyrs and war production and sales The Company continued to make investments veterans in Ordu as part of April 23 – National aimed at minimizing the impact of its Sovereignty and Children’s Day. operations on the environment, and opened WEBSITE the Waste-Derived Fuel Preparation Plant in BIST Code

www.unyecimento.com.tr 2018. Ünye Çimento reduced CO2 emissions UNYEC.IS through replacing coal with alternative fuels. Quality Management System (1) OYAK Çimento’s share is In 2019, Ünye Çimento received a Certificate İSO 9001, İSO 14001, OHSAS 18001, İSO 50001 presented as the company’s of Appreciation from the Turkish Employment share in the capital of OYAK/ OYAK Group Company as Agency for providing support at the Career and Subsidiaries published on KAP. Employment Fair. The event was organized Ünye Cem SRL with the collaboration of Ordu University Ünye OYAK Beton San. ve Tic. A.Ş. İBBF and the Turkish Employment Agency.

OYAK ANNUAL REPORT 2019 OYAK GROUP COMPANIES OYAK ANNUAL REPORT 2019 MARDİN ÇİMENTO SANAYİİ VE TİCARET A.Ş.

Mardin Çimento has production capacity of 1.85 million tons of clinker and 2.7 million tons of cement.

YEAR OF ESTABLISHMENT 1969

YEAR OF OYAK GROUP’S PARTICIPATION 1969

OYAK ÇİMENTO A.Ş.’S SHARE(1) Mardin Çimento Sanayii ve Ticaret A.Ş. Contribution to the Environment and Society 54.86% (“Mardin Çimento”) was established in 1969 To increase employee awareness of quality in Mardin with OYAK’s 40% ownership stake. and environmental protection, prevent Construction of the factory began in 1972 and workplace accidents, reduce costs and boost FIELD OF ACTIVITY the facility became fully operational in 1975. productivity, Mardin Çimento established Cement-clinker With the transfer of OYAK shares to OYAK an Integrated Management System. The production and sales Çimento in 2015, Mardin Çimento joined OYAK system meets all the requirements of the Cement Concrete Paper Group. The Company İSO 9001 Quality Management System, İSO has a production capacity of 1.85 million tons 14001 Environmental Management System, WEBSITE of clinker and 2.7 million tons of cement. İSO 50001 Energy Management System, and www.mardincimento.com.tr OHSAS 18001 OHS Management System. Based on sales from production, Mardin Çimento ranked 431st on the İSO Second Top BIST Code (1) OYAK Çimento’s share is 500 Industrial Enterprises list, which was MRDIN.IS presented as the company’s announced in July 2019. share in the capital of OYAK/ OYAK Group Company as Quality Management System published on KAP. İSO 9001, İSO 14001, OHSAS 18001, İSO 50001, TS 197-1

OYAK ANNUAL REPORT 2019 OYAK GROUP COMPANIES OYAK ANNUAL REPORT 2019 DENİZLİ ÇİMENTO SANAYİİ T.A.Ş.

Denizli Çimento has production capacity of 1.65 million tons of clinker and 3 million tons of cement.

YEAR OF Denizli Çimento Sanayii T.A.Ş. (“Denizli Denizli Çimento, which regards occupational ESTABLISHMENT Çimento”) commenced operations in health and safety as an indispensable 1988. After a series of various partnerships component of all its business operations, established through several privatization continues to undertake efforts to minimize 1988 transactions, Denizli Çimento was acquired risks in this field fulfilling its social duties with by OYAK and joined OYAK Cement Concrete the understanding of social responsibility. YEAR OF OYAK GROUP’S Paper Group in 2014. Denizli Çimento and its PARTICIPATION subsidiary Modern Beton were merged under Quality Management System the structure of Denizli Çimento on March 7, İSO 9001, İSO 14001, OHSAS 18001, İSO 50001 2018. The Company has a production capacity 2014 of 1.65 million tons of clinker and 3 million tons of cement.

OYAK ÇİMENTO A.Ş.’S Based on sales from production, Denizli SHARE Çimento ranked 249th on the “İSO Second Top 500 Industrial Enterprises” list, which was 100% announced in 2018.

Energy Efficiency Investments FIELD OF ACTIVITY Denizli Çimento filed an application to the Production and sales Ministry of Industry and Technology for of cement and clinker establishing an inhouse R&D Center on January 24, 2019. Arbitrator supervisions were carried out on March 29, 2019 and April WEBSITE 3, 2019 at the R&D Center. As a result of the www.denizlicimento.com.tr Assessment and Supervision Commission meeting held on April 8, 2019 at the Ministry, it was unanimously resolved to give R&D Center Certificate to Denizli Çimento.

OYAK ANNUAL REPORT 2019 OYAK GROUP COMPANIES OYAK ANNUAL REPORT 2019 OYAK BETON SANAYİ VE TİCARET A.Ş.

OYAK Beton ranked 245th on İSO Top 500 Industrial Enterprises list, compiled by the Istanbul Chamber of Industry based on 2018 data.

YEAR OF OYAK Beton Sanayi ve Ticaret A.Ş. (OYAK As part of the R&D activities, OYAK Beton ESTABLISHMENT Beton) was established in 2004 with the develops and produces high quality, special and capital contributions of OYAK and OYAK branded concrete for specific purposes. The Cement Group companies. In 2010, all of Company’s various types of products (Durabet, 2004 the company’s shares held by its majority Smartbet, Aquabet, Skybet, Repabet, Porozbet, shareholder OYAK were transferred to OYAK Izobet) are used in mega projects in Turkey. YEAR OF OYAK GROUP’S Cement Concrete Paper Group companies. PARTICIPATION With its innovative products, OYAK Beton OYAK Beton ranked 245th on İSO Top 500 served the following projects as a solution Industrial Enterprises list, compiled by the partner: 2004 Istanbul Chamber of Industry based on 2018 data. • Osman Gazi Bridge Project: DURABET PLUS® C45 and DURABET SELF® (SCC) C60 OYAK ÇİMENTO A.Ş.’S Extensive, Nationwide Services Network • Eurasia Tunnel, The Underwater Road SHARE OYAK Beton runs its operations through six Tunnel Crossing the Bosporus Strait Project: regional offices, 39 ready-mixed concrete DURABET PLUS® C40 100% plants and two aggregate production • Marmaray Project: DURABET®, DURABET facilities spread across the Mediterranean, PLUS® and SMARTBET® C40 Marmara, Black Sea, Aegean and Central • Spine Tower Project: SKYBET® C80 FIELD OF ACTIVITY Anatolia regions of Turkey. • Çamlıca Mosque Project: DURABET® C50 Production and • Emaar Square Project: SKYBET® C60 sales of ready-mixed The Company stands out as being one of • Kahramanmaraş Municipality Building concrete Turkey’s ready-mixed concrete companies (the first building with 100% white concrete): with the broadest distribution network and WHITEBET® C30 highest production capacity • The US Embassy Building: DURABET® C45, WEBSITE AQUABET® C45 and SMARTBET® C45 www.oyakbeton.com.tr OYAK Beton manufactures all types and • Adana Devlet Bahçeli Bridge: SMARTBET® C35 grades of ready-mixed concrete that meet • The State Hydraulic Works’ Head Office rigorous quality standards. The Company also Service Building in Ankara: AQUABET® C30 produces aggregates, which influence the • The Turkish Linguistic Society in Ankara: quality and production cost of concrete, at AQUABET® C30 two internal aggregate production facilities for its plants located in the Marmara Europe Quality Management System and Central Anatolia regions. İSO 9001, İSO 14001, OHSAS 18001, CE Compliance, G Compliance, TSE Compliance

OYAK ANNUAL REPORT 2019 OYAK GROUP COMPANIES OYAK ANNUAL REPORT 2019 CIMPOR PORTUGAL CABO VERDE OPERATIONS SGPS S.A.

Cimpor has three integrated and two grinding/packaging plants where it produces various types of gray cement and clinker.

YEAR OF ESTABLISHMENT 1976

YEAR OF OYAK GROUP’S PARTICIPATION 2019

CIMPOR PORTUGAL HOLDING’S SHARE In 2019, OYAK made a capital contribution to Subsidiaries Cimpor, based in Lisbon, Portugal. Cimpor has Cimpor Cabo Verde S.A. three integrated and two grinding/packaging Cimpor – Industria De Cimentos S.A. 100% plants where it produces various types of Cimpor Trading Activities – Comercio gray cement and clinker. With an annual Internacional S.A. FIELD OF ACTIVITY capacity of 9.1 million tons, the Company has Cimentaçor – Cimentos Dos Açores LDA a presence both in domestic and overseas Agrepor Agregados - Extracção De Production and sales markets. It conducts export and import Inertes, S.A of cement and ready- operations from the ports of Lisbon, Aveiro Betao Liz S.A. mixed concrete and Faro. Ciarga – Argamassas Secas S.A. Sacopor Socıedade De Embalagens E Sacos Cimpor also has subsidiaries which operate De Papel, S.A. WEBSITE ports and supply waste fuel. Boasting all Nova Cimpor Serviços Portugal S.A. www.cimpor.pt these plants, Cimpor is the largest cement, Ibera – Industria De Betao S.A. ready-mixed concrete and aggregate player AVE – Gestao Ambiental E Valorızação in Portugal, while also serving the global Energétıca S.A. cement market as one of the most important Setefrete – SGPS cement brands. Seteshipping Setefrete S.A. In addition to its cement production plants, the Company has ready-mixed concrete, aggregate, mortar and paper bag production plants in Portugal and Cape Verde.

OYAK ANNUAL REPORT 2019 OYAK GROUP COMPANIES

OYAK SELÜLOZ VE KAĞIT FABRİKALARI VE KAĞIT SELÜLOZ A.Ş. OYAK OYAK ANNUAL REPORT 2019 OYAK Selüloz ve Kâğıt Fabrikaları A.Ş. was ve Kâğıt Fabrikaları Selüloz OYAK The company in November 2018. founded Kağıt acquired 100% of the shares of OYKA upon Ambalaj Sanayii ve Ticaret A.Ş. (“OYKA”) a share transfer transaction.

SHARE OF OYAK SHARE OF OYAK GROUP 100% FIELD OF ACTIVITY Paper Cardboard and production: Production paper of cardboardand sacks (including bags and brown bags) YEAR OF OYAK YEAR OF OYAK GROUP’S PARTICIPATION 2018 YEAR OF ESTABLISHMENT 2018 SUBSIDIARIES OYKA Kağıt Ambalaj Sanayii ve Ticaret A.Ş. OYKA KAĞIT AMBALAJ SANAYİİ VE TİCARET A.Ş.

In 2019, OYKA recorded stable growth due to its capital investments.

YEAR OF OYKA Kağıt Ambalaj Sanayii ve Ticaret A.Ş. Resources on June 27, 2019; subsequently, the ESTABLISHMENT (“OYKA”) was established in 1963, originally plant became legally certified and operational. under the name Adana Kağıt Torba Sanayi OYKA Energy Biomass Plant was included in 1963 Türk A.Ş., to manufacture and sell craft paper the Final Renewable Energy Resources list as bags. Following Adana Çimento and OYAK of January 1, 2020 with an announcement by acquired the company’s shares gradually over the Energy Market Regulatory Authority. YEAR OF OYAK GROUP’S time in 1998, 2002 and 2005, the Company PARTICIPATION joined OYAK Group under the name OYKA OYKA invested in a Natural Gas Boiler in Kağıt Ambalaj Sanayii ve Ticaret A.Ş. and order to derive the vapor needed for paper began integrated paper production upon the production since Biomass Shell and Biomass 1998 acquisition of the SEKA Çaycuma Factory from Black Liquor Boilers will be used for electricity the Privatization Administration in 2003. generation. At the Çaycuma plant, the company made other capital investments for SHARE OF OYAK GROUP Turkey’s First and Only Integrated Craft Paper machinery and equipment in the Biomass Producer Shell and Cellulose Washing Sieve. 100% OYKA produces five different coated craft and packing papers as well as craft paper Forestation to Combat Climate Change bags at two separate facilities located in OYKA is one of the founding members of FIELD OF ACTIVITY Çaycuma. The company operates in line with Endüstriyel Ağaç Tarımı Sanayi ve Ticaret Production and sales the requirements of the İSO 22000 Food Anonim Şirketi Tic. A.Ş. (“ENAT A.Ş.”), which of craft paper and Safety Management System. OYKA is the only was founded in 2005 to cultivate industrial craft paper bags company in Turkey undertaking integrated forest plantations in Turkey. The company is cellulose and craft paper manufacturing from committed to adding value to the economy, cellulose production. The company delivers its protecting the environment and fulfilling its WEBSITE products to a wide range of manufacturers in social responsibility. Understanding that the www.oyka.com.tr Turkey and abroad. OYKA serves the cement, best way to counter carbon emissions and lime, plaster, chemicals, mining, construction climate change is to preserve and expand the materials, and food industries. world’s forestland, OYKA plants and cultivates trees on a large scale as raw materials for In 2019, OYKA recorded stable growth thanks mass wood production. to its capital investments. Quality Management System OYKA Energy Biomass Plant, which has an İSO 9001, İSO 14001, İSO 22000, İSO 50001, installed capacity of 21 MWe, was completed OHSAS 18001, FSC on December 31, 2018; the facility also obtained its electricity generation license Subsidiaries from YEKDEM. Provisional approval was OYKA Enerji San. ve Tic. A.Ş. granted by the Ministry of Energy and Natural

OYAK ANNUAL REPORT 2019 OYAK GROUP COMPANIES OYAK ANNUAL REPORT 2019 OYAK Automotive Group’s share in total automobile production of Turkey is 34.9%.

OYAK Automotive Group delivers various services: automobile, engine and mechanical parts production with OYAK Renault; automobile sales, light commercial vehicle sales and after-sales services with MAİS; automobile financing with ORFİN; and car rental to corporate companies as an intermediary with ORF. The Group, which increases its market share in Turkey’s automotive sector each year, ranks first in Turkish automobile production and exports.

High Quality Financing Solutions Operating in the field of automobile finance, ORFİN Finansman A.Ş. gathers all credit and associated insurance products under a single roof for the Renault MAİS sales network, while offering quality automotive financing solutions to customers with its favorable campaigns and a wide range of products and services.

Pioneering and Innovative Brand in Logistics OMSAN Lojistik operates as a pioneering and innovative logistics OYAK company. The Company provides services to leading companies in the automotive, steel and iron, cement and construction, fuel oil, textiles, retail, food and communications industries. OMSAN’s logistics services include domestic and overseas highways, maritime, airline and railroad transport; storage; distribution; warehouse management; project logistics; finished vehicle logistics; transport of hazardous substances; household and office logistics; customs clearance; and insurance services.

The Automotive Logistics Group at a Glance: • The Group continued to lead the industry in 2019 with 34.9% share of total automobile production in Turkey. • The Group leads Turkey’s automotive market with 84,983 thousand units in vehicle sales and a 17.7% market share. • The Renault brand became market leader in passenger cars for the 20th year in 2019 with sales amounting to 66,668 thousand units and a 15.7% market share. • The Group ranks first in Turkey’s automobile exports and second in the country’s overall vehicle exports with exports amounting to 295,275 units.

74 OYAK ANNUAL REPORT 2019 OYAK GROUP COMPANIES İşletmeleri A.Ş. İşletmeleri A.Ş. OMSAN Lojistik A.Ş. ORFİN Finansman A.Ş. OYAK NYK Ro-Ro Liman NYK Ro-Ro OYAK OYAK Denizcilik ve Liman OYAK ORF Kiralama Pazarlama ve Pazarlama ORF Kiralama Pazarlama Danışmanlığı A.Ş. Pazarlama OYAK ANNUAL REPORT 2019 OYAK RENAULT OTOMOBİL FABRİKALARI A.Ş.

OYAK Renault exported 295,275 thousand units and accounted for 35.6% of the overall automobile exports from Turkey.

YEAR OF OYAK Renault Otomobil Fabrikaları A.Ş. (“OYAK One-third of Turkey’s Automobile Exports ESTABLISHMENT Renault”) was established in 1969 by OYAK and OYAK Renault exported 295,275 thousand the French Renault Group to manufacture units and accounted for 35.6% of the overall Renault cars in Turkey. As a result of the automobile exports from Turkey. Therefore, 1969 agreement and share exchange between the the Company ranked third in overall vehicle two shareholders in 1997, OYAK and Renault exports, based on the first series of data of YEAR OF OYAK GROUP’S today hold respective stakes of 49% and 51% in the Uludağ Automotive Industry Exporters’ PARTICIPATION the company. Association (OİB). The Company exported new Clio model manufactured in 2019 to OYAK Renault currently makes mass 30 countries. 1969 production of the new Clio and the new Megane Sedan model and manufactures The Brand that Makes a Difference Globally the engines and mechanical parts of these with Outstanding Quality SHARE OF OYAK GROUP automobiles for the domestic and international OYAK Renault owes its leadership position in markets. production and exports to its consistently high 49% quality level. Being one of the first Renault Leader of the Turkish Automotive Industry factories to be granted the Renault Quality In 2019, the Turkish automotive industry Management certification, OYAK Renault ranks FIELD OF ACTIVITY manufactured a total of 1,485 thousand high among other Renault factories worldwide Manufacturing and vehicles, including 983 thousand passenger in terms of the quality level of its production, exporting of Renault cars. Meanwhile, OYAK Renault manufactured employees, suppliers and management cars and mechanical 343 thousand passenger cars, single- system. spare parts handedly accounting for 34.9% of total cars manufactured in Turkey in 2019 to remain Efficient, High-Capacity Production the market leader. The Company also OYAK Renault’s manufacturing facility is WEBSITE manufactured nearly 513 thousand engines. one of the Renault Group’s highest capacity www.oyak-renault.com.tr Having reached Turkey’s highest production production facilities outside of Western figures, OYAK Renault has the capacity to Europe. The Company boasts an annual produce 1 automobile per minute. production capacity of 378 thousand automobiles and 920 thousand engines. Based on the 2018 sales from production data, OYAK Renault ranked 4th on the İSO Top 500 list.

OYAK ANNUAL REPORT 2019 OYAK GROUP COMPANIES OYAK ANNUAL REPORT 2019 OYAK RenaultOYAK manufactured 343 thousand passenger cars in 2019, single-handedly accounting for 34.9% of total cars manufactured in Turkey. 920 (Thousand Units/Year) Renault’s annual OYAK productionengine capacity is around 920 thousand. OYAK RenaultOYAK increased its automobile production capacity annual to 378 thousand units in 2019. 378 Units/Year) (Thousand AUTOMOBILE PRODUCTION CAPACITY MAİS MOTORLU ARAÇLAR İMAL VE SATIŞ A.Ş.

MAİS functions as the general distributor of Renault and Dacia automobiles across Turkey.

YEAR OF MAİS Motorlu Araçlar İmal ve Satış A.Ş. (“MAİS”) In 2019, MAİS sold a total of 84,983 units: ESTABLISHMENT was established in 1968 as a wholly owned 78,201 automobiles and 6,782 light commercial subsidiary of OYAK. In 1993, The Renault Group vehicles. Having captured a market share acquired a 20% stake in MAİS. As a result of of 17.7%. MAİS preserved its leadership in 1968 the share exchange agreement executed automobile market and came in second in the between the two shareholders in 1997, OYAK overall market in 2019. YEAR OF OYAK GROUP’S and Renault today hold respective stakes of PARTICIPATION 51% and 49% in the company. Pursuant to the Turkey’s Most Popular Brand for agreement signed between OYAK and Renault 20 Consecutive Years in 2007, DOSSD, the general distributor of Renault recorded a total of 66,668 passenger 1968 Dacia cars in Turkey, also joined MAİS. vehicle sales in 2019, capturing a 15.7% market share and thereby continuing to lead Turkey’s A Broad Service Network Across the Country passenger vehicle market for 20 consecutive SHARE OF OYAK GROUP MAİS functions as the general distributor years. of Renault and Dacia automobiles across 51% Turkey. MAİS also undertakes the import of OYAK Renault-produced Renault models are Renault and Dacia automobiles with four among the top three models in the list of branch locations in İstanbul, Ankara, İzmir Turkey’s best sellers. Megane Sedan ranks third FIELD OF ACTIVITY and Bursa and 155 service points around the with 22,414 units and Clio HB ranks second with Sales and after-sales country. With its long experience, the company 24,213 units. services of Renault guarantees high quality in all kinds of spare and Dacia cars and parts and services. Dacia Ranks Among Top 10 in the Market light commercial In 2019, a total of 20,006 Dacia vehicles were vehicles Leading the Overall Market Once Again sold and the brand captured a 4.2% market in 2019 share. Dacia Duster is ranked at 8th place Turkey’s automobile and light commercial among the bestselling models of Turkey with WEBSITE vehicles market narrowed by 23% year-on- 10,378 units sold. www.renault.com.tr year, with a total sales volume of 479,060 units in 2019. Automobile sales dropped by 20% compared to the previous year, down to 387,256 units, whereas light commercial vehicle sales decreased by 32% to 91,804.

OYAK ANNUAL REPORT 2019 OYAK GROUP COMPANIES Thanks to WhatsApp Business project, Renault Thanks to WhatsApp Business project, Crystalreceived 2 Felis, 1 silver and 1 bronze awards in “Utilization of New Technologies” Design” Journey Experience and “Customer Crystalcategories 2 Felis, 1 silver and 1 bronze awards by bringing a fresh air in customer communications as a first in the industry in also received a silver MENA region. The project award at MMA Smartieand a bronze winning 6 awards, in total. The “Indecisiveness” campaign which can be named as an interactive sales campaign, as won 2 Felis the Group a first in the industry, awards. OYAK ANNUAL REPORT 2019 New Awards in 2019 New Awards MAİS was deemed worthy of numerous awards thanks to innovative activities in 2019. conducted in Turkey the users together The initiative which brought with Megane Sedan thanks to Renault and Getir collaboration, blazed a trail and deemed worthy of the “Best of the Best” award in Europe. category at Effie Brand Experience garnered 13 With that award, the project prizes in total, continued collecting the awards also this year like in 2018. MAİS was deemed worthy of 2 Felis awards in the “Utilization New of and Technologies” Experience“Customer Journey Design” categories, besides won 1 silver and 1 bronze Crystal awards. MAİS wasdeemed worthy of numerous awards thanks to activitiesinnovative conducted in Turkey in 2019. MAİS MOTORLU ARAÇLAR İMAL VE SATIŞ A.Ş.

Renault Group also garnered 3 bronze awards MAİS won gold medals in “Best Customer at EuroBest with “Pure led Vision” works. Services” and “Best Social Media Management” categories, silver medals in “Best Technology Renault received “Turkey’s Best-Selling Innovation” and “Best Communication Center” Passenger Car Brand” award in the 2019 ODD categories at 2019 world finals of the Contact Sales and Communication Awards organized Center World contest accepted as the Oscar by the Automotive Distributors Association. ceremony of the customer center world and In Communication category Renault was held within the frame of Customer Experience awarded for “Kangoo Film Series” in “Nostalgia of the Future main scope. TV Implementation of the Year” Aiming to maintain its strong performance also Important Achievements in Quality and in 2020 with its new products, MAİS will launch Customer Satisfaction New Clio, domestic production and leader in its MAİS, received the title World Benchmark own segment and put it on the market at New MAİS, received by getting the highest grade in 3 categories; Captur. the title World site animation, guarantee management Benchmark by getting and communication center, during the Quality Management System the highest grade international Renault Quality controls made by İSO 9001, İSO 27001, İSO 10002 in 3 categories; site Renault Group. animation, guarantee management and At ŞikayetVar A.C.E Awards 2019, in communication Achievement in Customer Excellence center, during the competition, that selects the brands in international Renault Turkey which provide the highest customer Quality controls made satisfaction, Renault and Dacia ranked first in by Renault Group. their own categories with their market shares.

OYAK ANNUAL REPORT 2019 OYAK GROUP COMPANIES OYAK ANNUAL REPORT 2019 ORFİN FİNANSMAN A.Ş.

ORFİN ranked first among financial services firms in domestic debt bond issues.

YEAR OF ORFİN Finansman A.Ş. was established in 2011 ORFİN aims to offer new and creative financial ESTABLISHMENT as a 50:50 joint venture between OYAK and solutions to Renault and Dacia customers at its RCI Banque S.A. under the permission of the sales points. In 2019, the Company extended Banking Regulation and Supervision Agency loans for some 21 thousand new and second- 2011 to facilitate the sales of Renault and Dacia hand vehicles sold by MAİS. automobiles through consumer financing. The YEAR OF OYAK GROUP’S Company commenced operations in 2012. As of 2019, the value of ORFİN’s circulating PARTICIPATION bonds and bills reached TRY 357 million. The The automotive market saw a 23% shrinkage Company ranked first among financial services in new vehicle sales in 2019. Although financial firms in domestic debt bond issues. 2011 services firms witnessed a 27% year-on- year drop in performing vehicle loans; Maintaining profitability levels and managing consequently, performing loans of ORFİN risk-related costs prudently are among the SHARE OF OYAK GROUP decreased by 28% to TRY 2.04 billion. core objectives in 2020, taking the current market conditions and in particular the goals 50% and expectations of the automotive sector into account.

FIELD OF ACTIVITY Sales and financing of Renault and Dacia branded automobiles and supplementary insurance service and sales

OYAK ANNUAL REPORT 2019 OYAK GROUP COMPANIES ORF also leases battery electric packs for vehicles and sells maintenance plans for Renault and Dacia cars under the Maxxi Maintenance brand. Due to a halt in leasing and maintenance contracts caused by the unfavorable issues ORF gave in vehicle leasing industry in 2019, weight to Branded Auto Insurance transactions policies. and generated more than 10,700 ORF KİRALAMA VE PAZARLAMA PAZARLAMA A.Ş. DANIŞMANLIĞI OYAK ANNUAL REPORT 2019 In 2013, OYAK acquired a 50% stake in RCI OYAK In 2013, Şti., Ltd. ve Danışmanlık Hizmetleri Pazarlama which was established by RCI Banque in 2009. the company was renamed ORF Subsequently, Danışmanlığı ve Pazarlama Pazarlama Kiralama A.Ş. on January 22, 2014. Under the Renault Fleet Leasing brand, ORF acts as an intermediary in fleet leasing corporate clients. Renault Fleet operations for Leasing is a vehicle leasing service offered to customers who come to authorized dealers under an agreement between ORF-MAİS- Fleetcorp. ORF has served Renault customers since 2011 and has recorded some 15 thousand vehicle leasing transactions to date.

50% FIELD OF ACTIVITY Intermediary, marketing and marketing consultancy services in vehicle fleet leasing transactions 2013 GROUP SHARE OF OYAK 2009 GROUP’S OF OYAK YEAR PARTICIPATION YEAR OF ESTABLISHMENT leasing operationsfor corporate clients. ORF acts as an intermediary in fleet fleet in intermediary acts an as ORF Under the Renault Fleet Leasing brand, brand, Leasing Fleet Renault the Under OMSAN LOJİSTİK A.Ş.

OMSAN Lojistik has been one of the strongest supporters of privatization in Turkey’s rail transport operations.

YEAR OF OMSAN Lojistik A.Ş. was established in 1978 Domestic operations, on the other hand, are ESTABLISHMENT as an OYAK Group company to operate in carried out through regional offices located in the automotive supply industry. Later, the the Mediterranean, Aegean, Central Anatolia company ventured into the logistics sector, and Black Sea regions. 1978 subsequently amending its Articles of Association in 1982 to include domestic and The First Private Sector Train Operator YEAR OF OYAK GROUP’S international transportation in its fields of OMSAN Lojistik leaped further in rail PARTICIPATION activity. In 2001, the company’s former name transport also in 2019, becoming one of OMSAN Uluslararası Nakliyat San. ve Tic. A.Ş. the strongest supporters of privatization in 1978 was changed to OMSAN Lojistik A.Ş.. Turkey’s rail transport operations. International Service Chain Taking a brand-new step in the 161-year- Specializing in multimodal transport by land, long history of Turkish rail transport, OMSAN SHARE OF OYAK GROUP sea, air and rail, OMSAN ranks among the executed the first and only train operation leading and most reputable transportation project in the private sector. The Company 100% and logistics companies in Turkey. OMSAN is now transports steel rolls, scrap, bulk a member of Turkey’s pioneering associations materials by its exclusive fleet for the iron and of the industry including UND, UTİKAD, steel sector. Indeed, it performs any and all FIELD OF ACTIVITY DTD, ARLOD, in addition to international handling/figuration processes, industrial raw Logistics service; associations such as FIATA, World Cargo material shipments and transport of scrap domestic and Alliance (WCA) and the Association of materials within the plant and port premises international land, air, European Vehicle Logistics (ECG). The of those enterprises that transport steel rolls, sea, railway transport Company is an Executive Board member on scrap and bulk material and gain competitive and warehouse the business councils of four countries at the advantage. services Foreign Economic Relations Board (DEİK) and a founding member of the Service Exporters’ OMSAN transported 3.32 million tons of Association established in 2018 under the ore between its Erdemir plants in Sivas- WEBSITE Turkish Exporters’ Assembly (TIM). Demirdağ and İsdemir plants in Hatay-Payas. Therefore, it single-handedly accounted www.omsan.com OMSAN executes overseas transport for 10% of Turkey’s overall rail transport operations efficiently and effectively at high on an annual basis. In 2019, the Company standards through subsidiaries operating transported 1.1 million tons of steel rolls, in Morocco, France, Kazakhstan, Romania as part of the land transport operations it and Russia and a liaison office in Germany. offered to the steel and iron industry.

OYAK ANNUAL REPORT 2019 OYAK GROUP COMPANIES OMSAN Lojistik awarded in the “Innovation” OMSAN Lojistik of the Year category of the “Success Awards Lojistik contest organized by UTA in Logistics” Transport its “Automobile magazine for project. Railway” through has Lojistik the last 7 years, OMSAN For People” award in received the “Respect for Resources Summit organized by the Human companies as which evaluates kariyer.net, per the criteria of “number of applications, responses, average response time exclusive and number of recruitments via kariyer.net.” The reliable and respected professional drivers having a successful track record the of more than 20 years are awarded at with ceremony which is held in collaboration the International Transporters Association Transportand International Road Union (IRU). driver OMSAN Lojistik During than ceremony, was deemed worthy of the “IRU Badge of Honor.” Quality Management System İSO 10002, OHSAS 18001, İSO 14001, İSO 9001, Operator Authorized Economic İSO 27001, and France (AEO) Turkey applicable for Status Certificate Subsidiaries A.Ş. OMSAN Havacılık OMSAN Denizcilik A.Ş. OOO OMSAN Lojistik SARL OMSAN Logistique SRL OMSAN Logistica SARL Maroc OMSAN Logistique SARL Maroc OMSAN Warehousing TOO Kazakhstan Omsan Logistics OYAK ANNUAL REPORT 2019 More Than Logistics and modern boasts a strong OMSAN Lojistik transportroad fleet of 80 trailers, 3,984 82 semi-trailers, and 344 trucks. It also has 180 self-owned cars, railroad self-owned vessels with a size containers, 2 self-owned DWTof 30 thousand DWT (dry and 4,500 cargo and cement), a 850-thousand-square- meter vehicle park, a 140-thousand-square employees. As meter storage area, and 2,600 integrated logistics a result, OMSAN provides services to help with the diversity and quality their relevant firms and industries increase competitive edge. agency and OMSAN is an authorized IATA supportstherefore other transport models with its proprietary to door air service, ‘door cargo’. As part transport, of project-specific servicesOMSAN provides in various other construction areas including heavy industry, plants, yachts energy investments, projects, and special equipment, thus contributing to and trade the development of production infrastructure in Turkey. National and International Awards OMSAN wins several awards in year, Each recognition of its logistic operational success in addition to the company’s sensitive and social issues. to environmental approach organized as Awards, Logistics In the Atlas part Transport of the International Logitrans was OMSAN Lojistik Fair, and Logistics awarded in categories of International International Marine Operators (L2), Logistics (Ship Owners) Transportation Companies Transportationand Railway Companies (Operators). OMSAN Lojistik awarded in the “Innovation” category of the “Success Awards of the Year in Logistics” contest organized by UTA Lojistik magazine for its “Automobile throughTransport Railway” project. Each year, OMSANEach year, wins several awards in recognition of its logistic operational success in addition theto company’s sensitive approach to environmental and social issues. OYAK DENİZCİLİK VE LİMAN İŞLETMELERİ A.Ş.

Managing operation services of Erdemir and İsdemir ports, OYAK Liman has annual 41 million metric tons of operation capacity.

YEAR OF OYAK Denizcilik ve Liman İşletmeleri A.Ş. OYAK Port has started rendering shipping ESTABLISHMENT was restructured in 2016 to operate shore rendering services as from August 2019 facilities and make new port investments. and made port of call to Romanian ports, delivering agency services to 13 ships. 2016 Having the short name OYAK Liman, the (Date of Company has three main business lines. Offering strait crossing agency services to 78 Restructuring) ships in 2019, OYAK Port attained 58% growth Port Operation Activities in related operations in comparison with 2018. OYAK Denizcilik ve Liman İşletmeleri A.Ş. Moreover, the Company also launched agency YEAR OF OYAK GROUP’S builds and operates ports, piers, loading and services to cape-size coal ships transporting PARTICIPATION unloading facilities, warehouses and cold raw material to İsken Sugözü Power Plant in storage facilities. Managing operation services 2019. 2011 of Erdemir and İsdemir ports, OYAK Liman has annual 41 million metric tons operation Port Investment Activities capacity. In 2019, Large Scaled Investment Incentive SHARE OF OYAK GROUP Certificate for OYAK Port is taken and the port In 2019, a total of 23.8 million metric tons of construction has started. OYAK Port is set 100% load was handled by OYAK Port with present to be Turkey’s cutting edge Ro-Ro Terminal port facilities. As a result, the Company as the first international co-venture of the achieved 12% Turkish market growth in the country under the coordination of OYAK NYK FIELD OF ACTIVITY product segment “General Cargo and Solid Ro-Ro Liman İşl. A.Ş., 55% of which is held by Agency and port Bulk Cargo” classification. OYAK Liman and 45% by NYK. operation services Shipping Agency Activities The construction of OYAK Port, which will OYAK Denizcilik ve Liman İşletmeleri A.Ş. become Turkey’s cutting edge Ro-Ro Terminal has been offering agency services in all ship with a 780 thousand tons vehicle capacity and segments from Koster to Cape-size class with indoor parking, is planned to be finalized and growing potential at Çanakkale and Istanbul become operational as of January 2021. straits, since April 12, 2017 in all ports of Turkey, primarily İsdemir and Erdemir. Furthermore, OYAK Liman will keep up its efforts on different port investments in line with strategic goals.

Subsidiaries OYAK NYK Ro-Ro Liman İşletmeleri A.Ş.

OYAK ANNUAL REPORT 2019 OYAK GROUP COMPANIES Planned to become operational as from Planned to become operational as from Port, will be the first OYAK January 2021, port by an built and operated Ro-Ro when international co-venture in Turkey the venture is finalized. OYAK ANNUAL REPORT 2019 OYAK NYK RO-RO LİMAN İŞLETMELERİ A.Ş. İŞLETMELERİ RO-RO LİMAN NYK OYAK OYAK NYK RO-RO Liman İşletmeleri A.Ş. (OYAK A.Ş. (OYAK Liman İşletmeleri NYK RO-RO OYAK Port investment undertakenPort) is a Ro-Ro holding 16% Group, NYK with the Japanese transportation worldwide and of Ro-Ro ports. currently operating 17 Ro-Ro Port on Erdemir- is being constructed OYAK owned land spanning 235 thousand square It will have an Kocaeli. meters in Yarımca, annual handling capacity of 780 thousand vehicles.

55% FIELD OF ACTIVITY Ro-Ro Port Operations 2018 GROUP SHARE OF OYAK 2018 GROUP’S OF OYAK YEAR PARTICIPATION YEAR OF ESTABLISHMENT

tons vehicles handling capacity. OYAK Port will have an annual 780 thousand thousand 780 annual an have Port will OYAK OYAK Finance Group is providing financial intermediation and portfolio management as well as insurance and reinsurance brokering services.

OYAK Brand Conveys Confidence OYAK Finance Group is widely known for its trustworthiness, quality and reputation. Internationally, the Group provides private and corporate banking services together with OYAK ANKER Bank. Domestically, the Group offers capital markets investors with services through OYAK Yatırım Menkul Değerler, OYAK Yatırım Ortaklığı and OYAK Portföy Yönetimi. Having added insurance and reassurance brokerage to its fields of business in 2017, the Group continues to make a difference in the industry with its strong reputation, expert staff and innovative solutions.

Favored Players in their Respective Industries OYAK ANKER Bank GmbH, a member of the Association of German Banks, renders corporate and retail banking services.

An OYAK Group Company, OYAK Yatırım is an intermediary that is expanding its portfolio with an increasing number of customers, enjoying a significant presence in the industry as a widely-preferred intermediary for foreign institutional investors.

The Finance Group at a Glance: • In banking; the Group provides corporate and retail banking services in Germany. • In capital markets; Financial intermediation (buying and selling of capital market instruments), corporate finance, financial advisory, asset management, research, investment advisory, to about 70 thousand corporate, individual, local and foreign investors through a 13-branch network spread across 11 cities in Turkey, • Insurance and reinsurance brokering services are offered.

88 OYAK ANNUAL REPORT 2019 OYAK GROUP COMPANIES Bank GmbH Değerler A.Ş. Ortaklığı A.Ş. Ortaklığı Yönetimi A.Ş. Yönetimi OYAK ANKER ANKER OYAK OYAK Yatırım Yatırım OYAK OYAK Portföy Portföy OYAK OYAK Yatırım Menkul Menkul Yatırım OYAK OYAK Grup Sigorta ve OYAK Reasürans Brokerliği A.Ş. OYAK ANNUAL REPORT 2019 OYAK ANKER BANK GMBH

OYAK ANKER Bank GmbH is providing a rich portfolio of credits and deposits to its customers.

YEAR OF AB Anker Bank is established in 1958 and The Bank’s credit rating was affirmed as ESTABLISHMENT acquired by the OYAK Group in 1996 by OYAK BBB- “investment grade” by the Credit Rating Bank (formerly: Türk Boston Bank) in line with Agency of the Deposit Protection Fund of the the strategy to expand banking operations Association of German Banks. 1958 into international markets and got the name OYAK ANKER Bank GmbH. After OYAK Group Adopting online banking rapidly in retail YEAR OF OYAK GROUP’S acquired the entire share capital of AB Anker banking, OYAK ANKER Bank GmbH is PARTICIPATION Bank in August 2004, the bank became a providing a rich portfolio of credits and direct Group Company of OYAK. deposits to its customers.

1996 OYAK ANKER Bank GmbH, a member of Setting up a financial bridge between Turkish the Association of German Banks, delivers banks and European companies in corporate corporate and retail banking services. The banking, the Bank, trade financing services SHARE OF OYAK GROUP bank also provides online banking services to in international arena, export/import letter its local and international customers. of credit, factoring and bond transactions as 100% well as refinancing services. The Bank has a representation office in Istanbul and a subsidiary called VfG GmbH in Having active operations in treasury and FIELD OF ACTIVITY Germany. financial institutions, the Bank is offering Banking services in treasury foreign exchange The representation office of the bank transactions, derivative transactions, bonds/ in Istanbul, Turkey engages in activities bills transactions. At the same time, trading WEBSITE in the fields of corporate banking. Its finance for financial institutions, payment and www.oyakankerbank.de subsidiary in Germany, VFG is involved in syndication credit transactions are provided. legal proceedings, collection and warning transactions, receivables accounting of Additionally, the Bank generates intra-group commercial companies and legal advisory synergy by contributing to the financing services. transactions and cash management of OYAK Group.

OYAK ANNUAL REPORT 2019 OYAK GROUP COMPANIES Focused on corporate banking and on corporate banking Focused treasury/financial institutions by decreasing ANKER Bank GmbH operational costs, OYAK million to by EUR 5.3 increased its net profit million in 2019. EUR 6.2 Success Recognized with Awards to economy which contributes FMH, and written media with on visual programs and Handelsblatt, comparative information, deemed the Bank a daily financial paper, worthy award of the “Best Installment Loans” in 2019. Furthermore, Extension Online Loan as for requirements, the weekly financial paper am Sonntag and the German market Euro research institute (DKI) awarded the Bank as Best Installment Loans” the “Bank Extending in the category Independent of of Loans Credibility. Subsidiaries Verrechnungsstelle für Gewerbliche Wirtschaft GmbH (VfG GmbH) OYAK ANNUAL REPORT 2019 Activities in 2019 The Bank has started working in the Trade in Finance and Financial Institutions segment transactions with 16 different making 2019, with primarily letter of banks in Turkey credits, syndication, short and long termed the other debt instruments. In Europe, Bank acts as an intermediary discount for transactions in letter of credits by deploying Companies, the synergies of the Group International UniCredit SpA and Raiffeisen Bank. The Bank generated assets worth EUR 36 EUR 92 million assets and letter million from of credits transactions thanks to the Trade Finance company recently added to its portfolio An interest income of EUR in 2019. trade finance and 2.2 million was gained from letter of credits transactions. The Bank increased its interest yield from EUR 36 million to EUR 66 million, having the corporate majority of its interest yield from interest incomes and bank credit interest incomes. The Bank increased its size of assets million. by EUR 193 million to EUR 1,259 Increasing interest fromrevenue EUR 36 million to EUR 66 million in 2019, ANKER OYAK Bank GmbH’s interest revenue is mostly formed by corporate interest incomes and bank loan interest revenues. Focused on corporateFocused on banking treasury/ and financialinstitutions bydecreasing operational costs, ANKEROYAK Bank GmbH increased its net profit by EUR 5.3 million EUR to 6.2 2019. in million OYAK YATIRIM MENKUL DEĞERLER A.Ş.

Serving corporate and retail customers in the capital markets it operates in, OYAK Yatırım is a name closely associated with trustworthiness, quality, power and reputation in the industry.

YEAR OF OYAK Yatırım Menkul Değerler A.Ş. (“OYAK “Broad Authority” Intermediary Institution of ESTABLISHMENT Yatırım”) was established in 1982 and Capital Markets commenced operations in 1984 after obtaining OYAK Yatırım holds all licenses issued by the the Stock Brokerage Certificate. In 2001, the Capital Markets Board (CMB) and is one of the 1982 company acquired Yaşar Yatırım to support leading companies in the industry. As of year- end 2014, OYAK Yatırım was authorized as a YEAR OF OYAK GROUP’S its position in capital markets and increase its PARTICIPATION market share. In 2002, OB Menkul Değerler, “Broadly Authorized Intermediary Institution” a subsidiary of OYAK Bank and OYAK Menkul by CMB. Değerler, was incorporated into the company 1982 to lower costs and complete transactions Wide-ranging Research and Analysis Services in a shorter time frame. Subsequently, the Shaping Investments company was renamed to OYAK Yatırım OYAK Yatırım Research Department provides a SHARE OF OYAK GROUP Menkul Değerler A.Ş.. detailed overview of investment performance while offering analyses, projections and 99.63% 13 Branches across 11 Cities guidance about capital market instruments Serving corporate and retail customers in the and other investment opportunities. In 2019, capital markets it operates in, OYAK Yatırım is a the department covered more than 60 stocks FIELD OF ACTIVITY name closely associated with trustworthiness, traded on the Borsa Istanbul and ranked Financial brokerage quality, power and reputation in the industry. among the top intermediary teams providing activities The Company boasts a steady market share; a the most extensive research service. widespread sales and distribution network; a strong portfolio of local clients; an innovative OYAK Yatırım Corporate Finance Department WEBSITE and creative approach to corporate finance; continued to provide financial advisory www.oyakyatirim.com.tr strong relationships with international services to a wide range of industries and investment banks; a robust financial businesses. These include banking, financial structure; extensive industry experience; and leasing, private pension, retailing, media, professional leadership. OYAK Yatırım offers real estate, energy, iron and steel, cement, financial intermediation (buying and selling of mining, food, chemicals, transportation, capital market instruments), corporate finance, logistics, information technologies, paper, financial advice, asset management, research petrochemicals, construction, fertilizers, and investment advisory services to around sugar production, telecommunications, and 70 thousand corporate/individual, domestic petroleum refining in 2019 also. and foreign customers through its 13-branch network spread across 11 cities in Turkey.

OYAK ANNUAL REPORT 2019 OYAK GROUP COMPANIES OYAK Yatırım deemed worthy of the first prize Yatırım OYAK categoryin the Lease Certificateof 2018 Export held and Sales Leader in the award ceremony Markets Association on Capital by the Turkish 2019. April 17, An Upward Trend in the Credit Rating the international credit rating agency In 2019, long- Yatırım’s affirmed OYAK JCR-Eurasia, The long- (Trk)’. term national rating as ‘A- currency rating is term international foreign confirmed as ‘BBB-’. Subsidiaries Ortaklığı A.Ş. Yatırım OYAK Portföy Yönetimi A.Ş. OYAK Sigorta Grup A.Ş. ve Reasürans Brokerliği OYAK with TRY 27.7 billion (a 21% billion (a with TRY 27.7 th in the Share Market trading th OYAK ANNUAL REPORT 2019 Activities in 2019 The collaboration, initiated as part of the in 2017 for commenced the project with intermediation of transmission of orders Türkiye Finans Participation Bank, Fibabanka, Creditwest Bank and Albank, increasingly continued in 2019. billion, closed 2019 with TRY 58.8 Yatırım OYAK ranking 20 volume and representing a 1.38% market volume and representing a 1.38% share. In the futures and options market it ranked 27 (VİOP), year-on-year increase) trading volume, holding trading volume, increase) year-on-year led the The Company a market share of 0.79%. issuance of 64 Private Sector Bonds and Bills coming in first in terms of the in 2019, (PSBB) number and volume of PSBB issues among non-bank intermediary issuers.

th In 2019, the international credit rating agency JCR- Eurasia, affirmed Yatırım’sOYAK national long-term rating (Trk)’ as ‘A- and its long-term international foreign currency rating upwardly (Trk)’. as ‘A- OYAK Yatırım OYAK closed 2019with TRY 58.8 billion, ranking 20 in the Share Market trading and volume representing 1.38% a market share. OYAK YATIRIM ORTAKLIĞI A.Ş.

OYAK Yatırım Ortaklığı A.Ş. holds a market share of 5.2% in the industry where nine securities investment trusts operate.

YEAR OF ESTABLISHMENT 2006

YEAR OF OYAK GROUP’S PARTICIPATION 2006

SHARE OF OYAK GROUP 47.27%(2)

FIELD OF ACTIVITY Undertaking capital markets activities in line with CBM and other relevant regulation provisions

WEBSITE OYAK Yatırım Ortaklığı A.Ş. was established The Company is deemed worthy of “Net www.oyakyatirimortakligi.com.tr on November 3, 2006 to meet evolving Asset Value Increase Leader” award in 2019 customer demand in an ever-changing by Turkish Capital Markets Association among capital market environment in Turkey and Securities Investment Associations. OYAK (1) OYAK Group’s share is presented as the company’s globally. In April 2007, the company’s shares Yatırım Ortaklığı A.Ş. holds a market share share in the capital of OYAK/ were offered to the public and began trading of 5.2% in the industry where nine securities OYAK Group Company as on the stock exchange. investment trusts operate. published on KAP. (2) The voting right percentage is 86.39%. Investment strategy band ranges were re- BIST Code adjusted in the beginning of 2018 to allow OYAYO.IS for a more effective and flexible portfolio management in line with changing market conditions.

OYAK ANNUAL REPORT 2019 OYAK GROUP COMPANIES The Company is managing 13 investment The Company funds in total including real estate and venture capital investment funds as of year- Portföy On the other hand, OYAK end 2019. also manages seven pension funds founded A.Ş. and Aegon ve Hayat by Fiba Emeklilik the Company A.Ş.. In 2019, ve Hayat Emeklilik million, achieving a 74% reached TRY 1,417.32 increase in the overall portfolio size under in its management and attaining growth number of participants. launched special funds also Portföy, OYAK members and employees apart OYAK for members and investors, helping OYAK from employees take part in capital markets. diversity of aims to expand The Company funds and its customer base in order to play a in capital markets. more active role OYAK ANNUAL REPORT 2019 Pursuant to the modifications in CMB Pursuant to the modifications in CMB regulations governing portfolio management Portföy Yönetimi A.Ş. was activities, OYAK a wholly 2013 as 14, established on June Yatırım. owned (100%) subsidiary of OYAK obtaining necessary authorization After certificates,the company became operational in January 2014. Markets Law and In line with the Capital relevant regulatory OYAK provisions, Portföy delivers a wide range of financial services private and corporate – from portfolio management consisting of financial assets to management of domestic and investment funds and investment foreign partnerships. OYAK PORTFÖY YÖNETİMİ A.Ş. YÖNETİMİ PORTFÖY OYAK

WEBSITE www.oyakportfoy.com.tr SHARE OF OYAK GROUP SHARE OF OYAK 100% FIELD OF ACTIVITY Undertaking capital activities markets in line with CBM and other relevant regulation provisions YEAR OF OYAK GROUP’S OF OYAK YEAR PARTICIPATION 2013 YEAR OF ESTABLISHMENT 2013

funds in total as of year-end 2019. year-end of as total in funds The Company is managing 13 investment OYAK GRUP SİGORTA VE REASÜRANS BROKERLİĞİ A.Ş.

OYAK Grup Sigorta reached over TRY 550 million in premium volumes in a time period as short as two years, outperforming many of its rivals.

YEAR OF OYAK Grup Sigorta ve Reasürans Brokerliği OYAK Grup Sigorta supports subsidiaries and ESTABLISHMENT A.Ş. (OYAK Group Insurance and Reinsurance external customers in drawing up the required Brokerage Co.) was established in 2017 as risks/damages management procedures. The a wholly-owned (100%) subsidiary of OYAK Company delivers training programs besides 2017 Yatırım with the aim of exclusively engaging paying group visits regarding the required in insurance and reassurance brokerage risks/damages management issues. YEAR OF OYAK GROUP’S activities. PARTICIPATION OYAK Grup Sigorta ve Reasürans Brokerliği, OYAK Grup Sigorta, closely identifies with is moving forward with firm steps as an the trustworthiness, quality, power and exemplary Insurance and Brokerage company 2017 reputation of OYAK name, and takes firm that does not comprise from the quality and steps to become a pioneer in the industry. reliability provided for the customers, valuing The Company reached over TRY 550 million customer appreciation above all else. SHARE OF OYAK GROUP in premium volumes in a time period as short as two years outperforming many of its rivals Outstanding products and services in 2019: 100% and captured the 4th place in the industry. • The coverage of OYAK Group corporate health policies was expanded to provide With its specialized expert staff, OYAK Grup employees with favorable packages covering FIELD OF ACTIVITY Sigorta designs special insurance solutions all health risks. OYAK Group’s life insurance Executing insurance to meet the needs of companies’ customers, policies were secured by OYAK Grup Sigorta. and reassurance members and employees and helps them • With the establishment of OYAK Platform, brokerage activities achieve their main goals. OYAK Grup Sigorta offers OYAK-branded Motor Insurance and Traffic, OYAK OYAK Sigorta signed brokerage contracts Household and OYAK Supplementary Health WEBSITE with 34 insurance companies in Turkey Insurance products and various campaigns www.oyakgrupsigorta.com.tr in a very short time. With respect to the developed exclusively for OYAK members insurance needs of OYAK Group Companies, and OYAK Group employees. The platform is OYAK Sigorta takes into account the interests managed successfully, always making OYAK of all companies in risks and damages Group members and employees feel that pertaining to more than one Group Company. they are privileged.

OYAK ANNUAL REPORT 2019 OYAK GROUP COMPANIES at overseas locations with more than 500 offices in over 100 countries on six continents. Center was established to address A Call members, the insurance needs of all OYAK employees, and customers outside OYAK in the most efficient and rapid Group manner. • Place in the Global Reinsurance Market negotiations with leading global Collaboration Insurance/Reinsurance companies primarily and Gulf markets are East Far in Europe, Grup Sigorta. conducted by OYAK A digital bidding and sales platform was set A digital bidding and sales platform up to compare the most convenient and 19 leading fastest price offers of Turkey’s insurance companies, including those for As a result, operational sales costs cover. the platform. were minimized through Sigorta Grup has become a member OYAK Network Broker of the Worldwide (WBN), the largest international network composed of independent insurance and employee vested benefits brokers the Company consultants. Consequently, can deliver local insurance solutions OYAK ANNUAL REPORT 2019 • • OYAK GrupOYAK Sigorta has become a member of the Broker Worldwide Network (WBN), the largest international network composed independentof insurance brokers and employee vested consultants. benefits A Call Center was established address to the insurance needs members,of all OYAK employees, and customers outside GroupOYAK in the most efficient and rapid manner. OYAK İnşaat was established to develop affordable housing for OYAK members.

OYAK Group Companies also operate in the services sector, with subsidiaries including i) OYAK Güvenlik, which provides physical and electronic security services; ii) OYAK İnşaat, developing building projects and construction works; iii) OYAK Pazarlama, rendering tourism and organization, facility management, technology services, and fleet leasing services.

OYAK İnşaat was established to develop affordable housing development projects with a specific quality for OYAK members as part of OYAK’s social housing services. OYAK İnşaat provides engineering and consulting services and undertakes the design, construction and installation of various types of projects, including residential buildings, hospitals, industrial buildings, tourism and military facilities.

OYAK SGS delivers consultancy services in the area of physical, electronic and cyber security systems. The Company also conducts special security personnel training activities under the permit it holds from the Turkish Ministry of Interior.

To prepare summer/winter tourism and foreign language school packages for OYAK members and ensure that low-fare tourist facilities are included in the program, OYAK Pazarlama conducts joint activities with expert companies.

98 OYAK ANNUAL REPORT 2019 OYAK GROUP COMPANIES Turizm A.Ş. Turizm Sistemleri A.Ş. OYAK İnşaat A.Ş. OYAK OYAK Pazarlama Hizmet ve Hizmet Pazarlama OYAK OYAK Savunma ve Güvenlik Savunma ve Güvenlik OYAK OYAK ANNUAL REPORT 2019 OYAK SAVUNMA VE GÜVENLİK SİSTEMLERİ A.Ş.

OYAK SGS is one of the three companies providing port security services in Turkey.

YEAR OF ESTABLISHMENT 2000

YEAR OF OYAK GROUP’S PARTICIPATION 2000

SHARE OF OYAK GROUP

100% Established in 2000, OYAK Güvenlik A.Ş. was Education, OYAK SGS continues delivering later renamed as OYAK Savunma ve Güvenlik ISPS Code courses, in addition to the First Sistemleri A.Ş. (“OYAK SGS”) in 2002. The Aid Training at the First Aid Training Center FIELD OF ACTIVITY company operates under the Private Security (İYEM) through the operating license from the Electronic and Law. Numbered 5188. Ministry of Health. physical security OYAK SGS delivers a wide range of services The Company also trains expert personnel including physical and electronic security, for the security sector through experienced WEBSITE cyber security, information systems security shooting trainers at the Shooting Range, www.oyaksgs.com.tr and audits, and security systems consulting. equipped with advanced technologies, at The company also serves as an Alarm its premises. The Company is authorized Monitoring Center and Training Institute to provide port security services under (Private Security Training, ISPS Code Training, the Recognized Security Organization etc.). The Company provides training to (RSO) status. OYAK SGS is one of the three private security personnel with the operating companies providing port security services in license obtained from the Ministry of Turkey. Interior since January 2005. Additionally, as authorized by the Ministry of Transport and Quality Management System Infrastructure and the Ministry of National İSO 9001, OHSAS 18001, İSO 14001, İSO 27001

OYAK ANNUAL REPORT 2019 OYAK GROUP COMPANIES applies modern construction techniques and such as prefabrication, tunnel form steel construction, in addition to traditional construction methods. has significant expertise İnşaat in OYAK building industrial facilities, ports, pipelines, In and other infrastructure projects. roads support provides line with that, the Company companies in their investment to the Group İnşaat has also increased its OYAK projects. competency in highway and dam/floodgate construction, regulator modification, and power plants rehabilitation of hydroelectric international projects. through OYAK İNŞAAT A.Ş. İNŞAAT OYAK OYAK ANNUAL REPORT 2019 OYAK İnşaat A.Ş. (OYAK İnşaat) was A.Ş. (OYAK İnşaat OYAK to develop established in 1982, in Ankara, housing development projects affordable members as OYAK with a specific quality for social housing services. Since part of OYAK’s been operating in has the Company 2004, Istanbul. engineering and provides İnşaat OYAK consulting services and undertakes the design, construction and installation of including residential various types of projects, buildings, hospitals, industrial buildings, tourism and military facilities. The Company

WEBSITE www.oyakinsaat.com.tr 100% FIELD OF ACTIVITY Construction, consulting contracting, services 1982 GROUP SHARE OF OYAK 1982 GROUP’S OF OYAK YEAR PARTICIPATION YEAR OF ESTABLISHMENT traditional construction methods. form and steel construction, in addition to techniques suchas prefabrication, tunnel OYAK İnşaat applies modern construction construction modern applies İnşaat OYAK OYAK İNŞAAT A.Ş.

The Ankara OYAK Prominent Projects of 2019 Projects Completed in 2019 Göksupark Project • The Ankara OYAK Göksupark Project • Repair and Renovation works of OYAK (1,876 housing + 7 (1,876 housing + 7 commercial units) is Ankara General Management Buildings commercial units) is the largest ever one-stage build housing • OYAK Yalova Çiftlikköy Lands Consultancy the largest ever one- project undertaken by OYAK and allocated Services, stage build housing for members. The project has started • OYAK Zirvekent-Tandoğan-Kurtuluş Lands Development Plan Revision Services, project undertaken upon obtaining Construction Permit on November 24, 2017 to be delivered to the • OYAK Urla, Seyirce, Tandoğan, Balıkuyumcu, by OYAK and allocated right-holders in July 2020. The physical OYAKKent Lands Consultancy Services, for members. progress rate of the project is around • Erdemir Yalova Taşköprü Project 85.52% as of year-end 2019. Consultancy Services, • OYAK Dragos Project is composed • Erdemir Ereğli Bağlık Mevkii Lands Zoning of 414 residences, 156 offices and 10 Services. stores. Manufacturing of bored piles and excavations of the Project have Ongoing Projects commenced on April 12, 2019 and the • Ankara OYAK Göksupark Project completion date is set to June 30, 2022. • OYAK Dragos Project The physical progress rate of the project is • Getting building permit, implementing around 6.09% as of year-end 2019. master and development plans, • As part of Real Estate Development undertaking license project innovation activities including preparation of master works of Seyirce, Tandoğan, Zirvekent, plans, implementation of development Kurtuluş, Balıkuyumcu, Ayazağa, OYAKKent, plans, and obtaining building permits for Urla, Çiğli, Yalova Çiftlikköy lands under the lands in Seyirce, Tandoğan, Zirvekent, proprietary of OYAK Kurtuluş, Balıkuyumcu, Ayazağa, OYAKKent, • Erdemir Yalova Taşköprü Project Services Urla, Çiğli, Yalova Çiftlikköy which are owned by OYAK. Quality Management System ISO 45001

OYAK ANNUAL REPORT 2019 OYAK GROUP COMPANIES To prepare summer/winter tourism and To OYAK for language school packages foreign members and ensure that low-fare tourist OYAK facilities are included in the program, conducts joint activities with Pazarlama expert companies. Besides the services to OYAK it provides Pazarlama OYAK Companies, Group continued efforts external its to expand customer portfolio in 2019. Quality Management System İSO 27001, OHSAS 18001, İSO 14001, İSO 9001, İSO 22301 İSO 20000, OYAK PAZARLAMA HİZMET VE TURİZM A.Ş. VE TURİZM HİZMET PAZARLAMA OYAK OYAK ANNUAL REPORT 2019 After operating under OYAK until 1998, Ordu until 1998, operating under OYAK After was incorporated as a joint stock Pazarları Büyük OYAK company under the name OYPA in 1998. (OYPA) Mağazacılık T.A.Ş. ceased its operations as a mass In 2002, OYPA It commenced operating as market retailer. offering hygiene a service company in 2004, cleaning, tourism, organization, and ticketing the company was services. Accordingly, ve Turizm Hizmet Pazarlama renamed to OYAK The Marketing). - OYAK Pazarlama A.Ş. (OYAK technology services providing began Company started fleet leasing Company The in 2014. activities in December 2019.

WEBSITE www.oyakpazarlama.com.tr 100% FIELD OF ACTIVITY FacilityTourism, Management and Technological Services and Fleet Leasing 1998 GROUP SHARE OF OYAK 1998 GROUP’S YEAR OF OYAK PARTICIPATION YEAR OF ESTABLISHMENT

its external customer portfolio in 2019. OYAK Pazarlama continued efforts to expand efforts expand to continued Pazarlama OYAK OYAK Chemicals Group is a world leader in manufacturing specialty alumina and PVC stabilizers.

A Global Player With an experience of more than half a century in the Turkish chemical industry, OYAK Chemicals Group grows and acquires internationally big companies with the investments on a global scale.

Among the World’s Largest Players OYAK and Group Companies, with Akdeniz Kimya and Chemson Group companies under its umbrella, boast the biggest share in the global market as the largest manufacturer of stabilizers and other additives which are indispensable inputs of the PVC industry. The Group produces additives to manufacture final products for use in various industrial fields including buildings, construction, electric and electronics and automotive.

The Chemicals Group at a Glance: • The Chemicals Group develops and produces industrial chemicals at 16 integrated facilities spread across 5 continents. • With an annual production that is nearly 300 thousand tons of PVC polymer additives, the Group ranks among the largest chemicals producers in the global PVC industry. • The Group is the world’s leading manufacturer of PVC stabilizers. • The Group is a leading, global supplier of specialty alumina and alumina-based products with its annual production capacity of more than 600 thousand tons.

104 OYAK ANNUAL REPORT 2019 OYAK GROUP COMPANIES Ticaret A.Ş. Almatis Group Chemson Group MicroMedicine Inc. Akdeniz Kimya Sanayi ve Kimya Akdeniz OYAK ANNUAL REPORT 2019 AKDENİZ KİMYA SANAYİ VE TİCARET A.Ş.

In 2019, Akdeniz Kimya broke production, sales and export tonnage records in its 43-year history.

YEAR OF Akdeniz Kimya Sanayi ve Ticaret A.Ş. was ESTABLISHMENT established in 1976 in Izmir to manufacture, market and sell chemical additives that give color, elasticity and durability to PVC- 1976 based window frames and profiles, injection products, cable insulation, and soft surface YEAR OF OYAK GROUP’S coatings. After acquisition of the entire share PARTICIPATION capital by OYAK, the company joined OYAK Group on December 19, 2012.

2012 A Global Brand Akdeniz Kimya, one of the world’s leaders in its field of activity, has an annual production SHARE OF OYAK GROUP capacity of 130 thousand tons of finished products. It is among the few integrated 100% companies in the world that has the capability to produce many calcium/zinc and lead- based intermediate stabilizer raw materials. FIELD OF ACTIVITY As an integrated facility, Akdeniz Kimya is In 2019, Akdeniz Kimya exported to its 105 Production and moving forward to become a world leader country. Based on production from sales marketing of PVC in quality continuity and product diversity in criteria, the Company ranked 238th on the stabilizers and PVC additive materials. Akdeniz Kimya’s total İSO Top List and 13th among the chemicals industrial chemicals annual chemical production reached 198.1 industry exporters. The Company won thousand tons as of year-end 2019. the second prize in the Stars of Export ceremony organized by the Turkish Exporters WEBSITE Akdeniz Kimya included new products, used Assembly’s Aegean Exporters Unions in 2019. www.akdenizkimya.com.tr in different industries other than PVC, in its product range, taking firm steps towards the Quality Management System future in line with its strategic goals. In 2019, İSO 9001, İSO 14001, OHSAS 18001, İSO 27001 the Company broke production, sales and export tonnage records in its 43-year history. Subsidiaries • OYAK Global Investments • Akdeniz Germany GmbH

OYAK ANNUAL REPORT 2019 OYAK GROUP COMPANIES

Quality Management System İSO 50001 OHSAS 18001, İSO 14001, İSO 9001, Group Companies 2 BV Almatis Holdings Almatis BV Almatis Ltd. Ltd. Qingdao Almatis Co. Ltd. Qingdao Almatis Trading Co. Almatis Do Brasil Ltda. Almatis Inc. GmbH Almatis Holdings Almatis GmbH Almatis Alumina Private Ltd. Almatis Singapore Pty Ltd. ALMATIS GROUP ALMATIS OYAK ANNUAL REPORT 2019 Almatis Group was established in the was established Almatis Group high quality raw Netherlands to provide the refractorymaterials for and chemical industries. With the share purchase Global OYAK agreement signed in 2015, Investments took over all shares of Almatis Group joined OYAK which thereby Group, together with its subsidiaries. aluminum oxide processes Almatis Group – the raw material of aluminum – (alumina) alumina. and sell specialty to produce A Global Brand of nine production has a total Almatis Group facilities, six sales offices, and six application- development laboratories across product the world. In addition to its headquarters in operates four the Netherlands, the Group one factory factories in the United States; the Netherlands, Japan, each in Germany, China and India; and sales offices in Brazil, and China. India, Japan USA, Germany, Global Leader in the Alumina Industry Boasting 100 years of industry experience, is a leading developer, Almatis Group and supplier of specialty alumina producer The Group and alumina-based products. activities at nine carries out its production different integrated facilities on three the world and has the continents across range. widest range of alumina product thousand

WEBSITE www.almatis.com Tons/Year FIELD OF ACTIVITY Production sale and alumina premium of 100% PRODUCTION CAPACITY 609 2015 GROUP SHARE OF OYAK 2004 GROUP’S YEAR OF OYAK PARTICIPATION YEAR OF ESTABLISHMENT Almatis Group has a total of nine laboratories across the world. productionfacilities, six sales offices, and six application-product development CHEMSON GROUP

Chemson Group carries out making significant investments to develop new innovative and global technologies at global standards.

YEAR OF Chemson Polymer Additive AG (“Chemson Chemson Group carries out making ESTABLISHMENT AG”), the headquarters of Chemson Group, significant investments to develop new was established in 1986 in Austria to produce innovative and global technologies at global PVC stabilizers. In 2013, Akdeniz Kimya standards. 1986 acquired Chemson AG; thereby, the company and its subsidiaries joined OYAK Group. For a Lead-free Future YEAR OF OYAK GROUP’S In line with the emerging demand and PARTICIPATION In addition to its facilities in Austria, Chemson new EU regulations, the Group undertakes AG has a total of five production plants in the investments to shift from lead-based United States, Australia, Brazil, China as well production to calcium/zinc-based production. 2013 as subsidiaries that operate as sales offices in Germany, the Netherlands, and the UK. Quality Management System İSO 9001, İSO 14001 SHARE OF OYAK GROUP Chemson Group has invested in production facility by founding a new company in China. Group Companies 100% The Company managed to increase its sales Chemson Polymer Additive AG compared to the previous year, despite the Chemson Ltd. negative price fluctuations in 2019. Chemson GmbH FIELD OF ACTIVITY Chemson B.V. Production and Industry Leader in Futuristic Products Chemson Inc. marketing of PVC Chemson Group is a leading global supplier Chemson Pacific Pty. Ltd. stabilizers and of chemical additives that give color, elasticity Chemson Polymer Additives (Zhejiang) industrial chemicals and durability to PVC-based window frames Chemson Ltda. and profiles, injection products, cable Innostar GmbH insulation, and soft surface coatings. Dalian Chemson Chemical Products Co. Ltd. WEBSITE Dalian Chemson Technical Co. Ltd. www.chemson.com The Group continued to undertake research Durox Ltda. and development efforts covering new 3D printing materials in 2019. Chemson’s first patent application for a 3D printing material was registered in a country. Activities are ongoing for the registration of the patent worldwide.

OYAK ANNUAL REPORT 2019 OYAK GROUP COMPANIES MICROMEDICINE INC. MICROMEDICINE OYAK ANNUAL REPORT 2019 In 2015, OYAK Global Investments acquired a OYAK In 2015, MicroMedicine majority stake in the US-based life Inc., which specializes in medical and science technologies. on the development focuses MicroMedicine and commercialization of cell separation technologies to enable applications in diagnostics, therapeutics, and clinical research. “Sorterra,” blood separation the Company’s and development whose design product, and Drug completed, and FDA (USD Food and Administration) Class-I listing finalized The articles is obtained. CE brand approval and poster presentations which confirm the in superiority and success of the product comparison with the present conventional by in the market, are promoted products Access PartnersEarly in various fairs and The Company during 2019. exhibitions in November 2019 and launched the product after that made the first commercial sale and delivery. plans to take MicroMedicine In 2020, initiatives regarding the opportunities in the newly developing cell therapy market and the additional compositions in accordance with the user demands in the market.

WEBSITE www.micromedicine.com 55% FIELD OF ACTIVITY Medical technologies 2015 GROUP SHARE OF OYAK 2015 GROUP’S YEAR OF OYAK PARTICIPATION YEAR OF ESTABLISHMENT diagnostics, therapeutics, and clinical research. technologies to enable applications in and of commercialization separation cell MicroMedicine focuses on the development AGRICULTURE ANIMAL HUSBANDRY GROUP

Hektaş is amongst the top three players in plant protection industry.

One of the Top Three Players in Plant Protection Hektaş, the company of OYAK operating in plant and animal health industry is involved in protection of more than 350 plants, plant nutrition, seed and animal health, production, sales and marketing of pet food and care products. One of the leading institutions of the industry, the Company has always been one of the top three companies of the plant protection industry. Hektaş also has strategic partnerships with global plant protection and plant nutrition companies.

Agriculture Animal Husbandry Group at a Glance: • Hektaş carries out its product marketing and sales activities through its six regional directorates across Turkey, namely in Adana, Ankara, Antalya, Bursa, İzmir, and Şanlıurfa. • It gets into strategic partnerships with global plant protection and plant nutrition companies. • Pioneer in smart agriculture implementations. • R&D activities are carried out at the R&D Center in Gebze Organized Industrial Site.

110 OYAK ANNUAL REPORT 2019 OYAK GROUP COMPANIES Hektaş Ticaret T.A.Ş. OYAK ANNUAL REPORT 2019 HEKTAŞ TİCARET T.A.Ş.

In order to add innovative products to its product portfolio, Hektaş executes formulation differentiation and improvement works.

YEAR OF ESTABLISHMENT 1956

YEAR OF OYAK GROUP’S PARTICIPATION 1963

SHARE OF OYAK GROUP 53.81%

FIELD OF ACTIVITY Plant protection, plant nutrition, seed and animal health, production, sales and marketing of pet food and pet care products. Hektaş Ticaret T.A.Ş. was established in 1956 in in 2005 and plant nutrition and seed products in Adana to manufacture and sell pharmaceuticals. 2017. With over 350 products covering Turkey’s WEBSITE In 1962, Hektaş began manufacturing and ecological diversity in its portfolio, Hektaş leads www.hektas.com.tr selling agrochemicals to meet market demand. the sector with the widest product range. OYAK acquired shares of the company in 1963 and became the majority shareholder in 1981. Strategic Partnerships with Global Brands (1) OYAK Group’s share is Through its strong brand recognition and presented as the company’s Market Leader with Strong Foundation widespread sales and distribution network in share in the capital of OYAK/ OYAK GROUP Company as One of the most well-established firms in the the field of plant protection products and their published on KAP. agriculture sector, Hektaş boasts 63 years of marketing, Hektaş has strategic partnerships experience that allowed it to expand its product with global plant protection and plant nutrition range and start selling animal health products companies.

OYAK ANNUAL REPORT 2019 OYAK GROUP COMPANIES Hektaş is the first company in Turkey to achieve Hektaş is the first company in Turkey the ECOCERT Organic Agriculture Compliance Certificate products. plant protection for holding this The company has ten products certificate. Hektaş aims to offer customized solutions for the Company different types of soil. In 2017, organomineral fertilizersbegan producing to of agricultural soil at a facility boost productivity it leased in Adana. Ticaret Hektaş acquired FNC Tarım In 2017, ve Sanayi A.Ş. operating in plant protection in Niğde. products carries out reclamation works on The Company hybrid vegetable seeds with Akça Tohumculuk carries Sanayi ve Dış Ticaret A.Ş., which Ar-Ge R&D greenhouses out activities in self-owned University which is at the Technocity of Akdeniz incorporated. OYAK ANNUAL REPORT 2019 Closest Solution Partner to the Farmer with Six to the Farmer Closest Solution Partner Regional Directorates across Turkey marketing Hektaş carries out its product its six regional and sales activities through namely in Adana, Turkey, directorates across and Şanlıurfa. Antalya, Bursa, İzmir, Ankara, Pioneer in Smart Agricultural Practices range widens its product The Company needs and in accordance with producers’ with offerings that respect people, expectations and nature and are in keeping the environment with prudent agriculture practices. the In order to develop innovative products, the company differentiates and improves formulas. Hektaş expands its product range with products fitted organicto and good agriculture practices in line with the requirements and expectations of producers, respectful people, to environment, and nature. Hektaş is the first to company in Turkey achieve the ECOCERT Organic Agriculture Compliance Certificate for plant protection products. The company has ten products holding this certificate. HEKTAŞ TİCARET T.A.Ş.

The Company licensed products in Algeria in communications activities in the sector. The 2019 for the first time in its history. Hektaş Company continues to increase its success in was deemed worthy of the “Star of the Export every part of agricultural production with new Award” at the Stars of the Export Award innovative products, reliability, safety, strong Ceremony, organized by Istanbul Chemicals and brand recognition, an experienced sales team, Chemical Products Exporters Association, for widespread distribution channels, nationwide the first time for its achievements in exportation organization, strong positioning in emerging of plant nutrition products. high-value markets, and broad product range.

Maintaining its leadership position in the plant Increased Production Capacity protection industry, the Company deemed In 2019, Hektaş manufactured 14.4 thousand worthy of the Large Scale Enterprise Award for tons at Gebze production facility, 4.5 the second time in the Chemicals Industry in thousand tons production at FNC Tarım the 2019 Above-the-Line Sectoral Performance (Niğde) production facility, increasing its total Awards organized by the Kocaeli Chamber production amount to 18.9 thousand tons by of Industry to reward successful industrial 7% growth. Meanwhile organomineral fertilizer enterprises. production attained growth by 297% to 31.3 In 2019, Hektaş had thousand tons. 14.4 thousand tons Hektaş traded in BIST 100 index in 2019 as production at Gebze a result of the assessment made by Borsa The Company realized 9%year-on-year increase production facility Istanbul in the last quarter of 2018. The in terms of packaging, manufacturing 10.5 and 4.5 thousand tons Company gave confidence to its investors and million packages. The shipments including at FNC Tarım (Niğde) the market, achieving a sustainable success. In manufactured products besides finished production facilities, consequence, Hektaş was qualified to enter in products increased to 56.4 thousand tons by increasing its total BIST 50 index in 2020 following the assessment 128% growth. production amount by made by Borsa İstanbul in the last quarter 7% to 18.9 thousand of 2019. In addition to R&D activities, Hektaş Hektaş completed Integrated Management tons. prepares its business partners and producers System audit successfully, and improved for the future and helps them to compete health and safety conditions at work places. globally. The Company proved its sustainable Subsequently, the Company was qualified success with both its performance in financial to receive İSO 45001 certificate to decrease statements and the sales, marketing and occupational accidents and ranked among the “first organizations” in the industry having that certificate.

OYAK ANNUAL REPORT 2019 OYAK GROUP COMPANIES month. Members spent 118,100 minutes month. Members spent 118,100 st in the club, and had 5,400 interactions in the interactions in in the club, and had 5,400 gifts were sent communication modules. 617 product to members who earned points for purchases as a result of these interactions. BIST Code HEKTS.IS Quality Management System İSO 27001 İSO 14001, İSO 9001, Subsidiaries San. ve Tic. A.Ş. Kimya Tarım TAKİMSAN Tic. ve San. A.Ş. FNC Tarım Sanayi ve Dış Ticaret A.Ş. Ar-Ge Akça Tohumculuk Hektaş Customer Club Hektaş Customer Club, designed Hektaş Customer As end of 2019, reached 703 members in retail customers, for its 21 Hektaş Smart Agriculture at the Villages with Hektaş has launched “Smart Agriculture on the launched in 2018 to create a project Roads,” smart introduce the producers, awareness for with a agriculture techniques and equip them the project global competitive advantage. In 2019, in the villages with directly targeted producers the name “Smart Agriculture at the Villages.” of its social responsibilities, Hektaş Aware organized the event “Smart Agriculture at the Villages” covering 12 thousand kms in one year in 230 and meeting over 10 thousand producers Within that frame, more villages of 27 provinces. digital than 5 million people is reached through channels, news reports in local and national channels. OYAK ANNUAL REPORT 2019 R&D Activities Undertaking efforts plant in plant protection, and nutrition, seed breeding, animal health Hektaş carries out the internet of things (IoT), the all its R&D activities in the R&D Center at three In 2019, Gebze Organized Industrial Zone. in R&D Center; besides, in total lunched projects the inspections of the Hektaş passed through Republic Ministry of Science, Industry Turkish the first time. and Technology realized for it was decided that the R&D Consequently, the incentives/ Center will continue benefit from of the Ministry. exemptions Hektaş Smart Assistant mobile application, supported by artificial intelligence, helps plant diseases on the to detect the growers the cameras of their agricultural land through was mobile phones and define them. The app deemed worthy of the “Agricultural IT Award” Innovation Agriculture Growtech at ATSO organized as part 2019, Awards, of Growtech for the world’s largest greenhouse exhibition the greenhouse industry. has started working on The Company establishing a technological agriculture center decares at global standards on a land of 607 leased in Bursa Orhangazi. In the 2018 Above- the-Line Sectoral Performance Awards Chamber of Industry to organized by the Kocaeli reward successful industrial enterprises, Hektaş in the won the Large Scale Enterprise Award Chemicals Industry. Aware of its social responsibilities, Hektaş organized the event “Smart Agriculture at the Villages” covering 12 thousand kms in one year and meeting over 10 thousand producers in 230 villages of 27 provinces. ENERGY GROUP

As of year-end 2019, total licensed and unlicensed installed electric power is 91,352 MW.

Turkey’s Installed Electric Power and having the characteristics of free consumers” Production are now subject to the Last Resort Supply The 2019 sectoral data for power generation Tariff (“LRST”) as of April 1, 2018. and consumption reveals a similar pattern in power consumption, amounting to 300.2 The LRST limit was reduced to 10 million kWh billion kWh. As of year-end 2019, licensed and as of 2019 and to 7 million kWh in 2020 which unlicensed total installed power production started as 50 million kWh in 2018. reached 91,352 MW with 3.2% year-on-year increase in installed power. One of Turkey’s largest international investments In 2019, the year-on-year increase of total İSKEN is an OYAK company with operations in installed power capacity of Turkey is 2,826 the electric energy sector. In addition to being MW. Thermal installed capacity increased by one of the largest international investments, 907 MW, hydro installed power by 203 MW, İSKEN is also one of the biggest thermal plants geothermal installed power by 255 MW, solar in Turkey. plants by 919 MW, wind plants by 542 MW. As of year-end 2019, unlicensed total installed Holding a Supply License, OYAK Enerji conducts power of power plants increased by 17% to activities in the field of wholesale and retail 6,309 MW. electric energy supply in the market.

In 2019, in total electric production, natural OYAK Enerji commenced electricity supply In 2019, in total gas plants have 19%; hydroelectric plants activities, primarily for OYAK Group Companies, electric production, 31%; import coal plants 21%; lignite plants as of April 1, 2018 and operates following the natural gas plants has 16% and other plants have 13% shares. improvements made in 2019. 19%; hydroelectric plants 31%; import In 2019, the Market Clearing Price rose by 11% OYAK Energy Group at a Glance: coal plants 21%; year-on-year, accounting for TRY 260/MWh. • Owns one of the largest power plants in 2018 was ended 20.5% increase in electricity Turkey. The Energy Group owns one of the lignite plants 16% and supply market while free consumer take-off largest power plants in Turkey. The Group other plants have 13% amount reached 41.7% by the end of 2019. has a 1,308 MW installed capacity for net shares. power generation, meeting 3% of Turkey’s Last Resort Supply Tariff power demand. Pursuant to the “Communiqué Regarding the • Adopting an “Energy Management” Regulation of the Last Resort Supply Tariff “ approach, the Group offers electric energy published in the Official Gazette on January supply services and other related electricity 20, 2018, “those consumers who have an market services. annual electric energy consumption of over 50 million kWh but do not procure electric energy based on bilateral contracts despite

116 OYAK ANNUAL REPORT 2019 OYAK GROUP COMPANIES Ticaret A.Ş. Toptan Satış A.Ş. Satış Toptan OYAK Elektrik Enerjisi OYAK İskenderun Enerji Üretim ve OYAK ANNUAL REPORT 2019 117 İSKENDERUN ENERJİ ÜRETİM VE TİCARET A.Ş.

İSKEN Sugözü Power Plant has a total installed capacity of 1,320 MW.

YEAR OF İskenderun Enerji Üretim ve Ticaret A.Ş. A Modern, Environmentally Sensitive, ESTABLISHMENT (“İSKEN”) was established in 1998 to generate Society-Centered Company and sell electric energy as Turkey’s first İSKEN’s core objective is to generate thermal power plant burning import coal. environmentally sensitive energy in a healthy 1998 In April 2004, OYAK acquired 24% of İSKEN and safe working environment. İSKEN is shares held by Evonik Steag GmbH and committed to fulfilling its responsibilities YEAR OF OYAK GROUP’S became a partner in İSKEN. In October 2004, towards society by supporting projects PARTICIPATION OYAK increased its stake in İSKEN to 49% by carried out in collaboration with various acquiring 25% of the shares held by RWE organizations and institutions – in the fields of Power AG, another shareholder. As part of education, environment, health, culture, arts 2004 the efforts to gather OYAK Group energy and sports – that aim to improve regional companies under one roof, OYAK transferred employment opportunities and support local its shares in İSKEN to OYAK Birleşik Enerji at social capacity. SHARE OF OYAK GROUP year-end 2012. Acting in accordance with Regulation No. 49% Turkey’s First Private Coal-fired Power Plant 27277 on the Control of Industrial Air Pollution Located in Sugözü, İskenderun, the İSKEN dated July 3, 2009, İSKEN completed its Power Plant was commissioned in 2003 investment for the “Catalytic Nitrogen FIELD OF ACTIVITY under a build-operate contract. İSKEN Power Oxide Reduction Unit” (SCR DeNOx) that the Generating and sale Plant has a total installed capacity of 1,320 Company is obliged to finalize this project by of electricity MW. The İSKEN Power Plant – one of the June 8, 2019 and commissioned it in 2019 and largest international investments in Turkey fulfilled its obligation. – generates 9 billion kWh of net electricity WEBSITE annually and meets about 3% of Turkey’s Quality Management System www.isken.com.tr total electric energy demand. The İSKEN İSO 14001, İSO 45001, İSO 27001, İSO 9001, Sugözü Power Plant was commissioned İSO 50001,TS EN 450-1 in under a build-operate contract upon signing Energy Sales Agreement with the Subsidiaries Electricity Generation Corporation (EÜAŞ) Arkad Deniz Taşımacılığı A.Ş. which is terminated on November 22, 2019. The Company has been carrying out its operations in free market since then.

OYAK ANNUAL REPORT 2019 OYAK GROUP COMPANIES OYAK ELEKTRİK ENERJİSİ TOPTAN SATIŞ A.Ş. SATIŞ ELEKTRİK TOPTAN ENERJİSİ OYAK OYAK ANNUAL REPORT 2019 OYAK Enerji Sanayi ve Ticaret A.Ş. was OYAK of established in 2002 to take advantage investment opportunities in the energy was renamed the Company In 2009, sector. Satış A.Ş. Elektrik Enerjisi Toptan to OYAK Energy). (OYAK is sales core business The Company’s of electric energy to wholesale and free consumers and it received a Supply License Regulatory the Energy Market from Authority 2009 to trade (“EMRA”) on November 11, electric energy and capacity. Group As part the efforts of to gather OYAK OYAK energy companies under one roof, to transferred its shares in the Company 2012. Enerji at year-end Birleşik OYAK the operations in 2018, Commencing services provides including Company electricity sales, market operations, and consultancy. is a wholly-owned OYAK Enerji OYAK and adopts an “Energy Company Group in offering electric Management” approach energy supply services and other related electricity market services.

WEBSITE www.oyakenerji.com.tr 100% FIELD OF ACTIVITY Sale electric of energy wholesale to and free consumers 2002 SHARE GROUP’S OYAK 2002 GROUP’S YEAR OF OYAK PARTICIPATION YEAR OF ESTABLISHMENT market services. services. market services and other related electricity related other and services approach in offering electric energy supply OYAK Enerji adopts an “EnergyOYAK Management” OTHER OYAK GROUP COMPANIES

ATAER HOLDİNG A.Ş.

OYAK ANNUAL REPORT 2019 OYAK GROUP COMPANIES Subsidiaries A.Ş. Renault Otomobil Fabrikaları OYAK A.Ş. Ereğli Demir ve Çelik Fabrikaları San. ve Tic. A.Ş. Kimya Akdeniz İç ve Dış Ürünler Pazarlama Kimyasal Akdeniz Ticaret A.Ş. Denizcilik ve Liman İşletmeleri A.Ş. OYAK ve Tic. A.Ş. Ürünleri San. Sentetik Karbon OYAK A.Ş. Madencilik San. ve Tic. Ataer ATAER HOLDİNG A.Ş. HOLDİNG ATAER OYAK ANNUAL REPORT 2019 Ataer Holding A.Ş. was established in Holding Ataer December 2005 as a wholly owned subsidiary to participate in the companies of OYAK ATAER industry. and steel operating in iron shares of Ereğli took over 49.29% Holding (ERDEMİR), T.A.Ş. Demir ve Çelik Fabrikaları of Turkey producer and steel the largest iron on and integrated flat steel manufacturer, 2006. February 27, There have been several changes in the business activities of the company participated in the subsidiaries of OYAK Holding operating in various industries. Ataer and steel, is doing business primarily in iron automotive, chemicals and port operations its subsidiaries. through

WEBSITE www.ataer.com.tr 100% FIELD OF ACTIVITY Participating the in various in companies industries primarily in iron and steel sector 2005 GROUP SHARE OF OYAK 2005 GROUP’S YEAR OF OYAK PARTICIPATION YEAR OF ESTABLISHMENT port operations through its subsidiaries. iron and steel, automotive, chemicals and Ataer Holding is doing business primarily in OYAK BİYOTEKNOLOJİ SANAYİ VE TİCARET A.Ş.

OYAK Biyoteknoloji aims to develop biological agricultural pesticides.

YEAR OF OYAK established its wholly owned subsidiary ESTABLISHMENT OYAK Biyoteknoloji San. ve Tic. A.Ş. on 30 April 2019 in agricultural biotechnology consideration pursuant to the strategic 2019 importance of agriculture in both around the world and in our country, the technological YEAR OF OYAK GROUP’S advancements in that industry. The goal PARTICIPATION is to have innovation and investment (gene and gene technologies transfer), develop biological agricultural pesticides in 2019 international arena and intermediate for sales and distribution of these products.

SHARE OF OYAK GROUP 100%

FIELD OF ACTIVITY Research and experimental development activities

OYAK ANNUAL REPORT 2019 OYAK GROUP COMPANIES

2 indoor and 10,891 m indoor and 10,891 2 having 9,793 m having 9,793 2 outdoor capacity. outdoor capacity. Subsidiaries Çelik Üretim A.Ş. Miilux Yüksek Mukavemetli Sp. z o.o. Miilux Poland Quality Management System İSO 3834- İSO 9001:2015, İSO 45001:2018, İSO 14001:2015 2:2005, sandblasting-dyeing line, laser cut machine. The facility is built on an area of total 20,684 m MIILUX OY MIILUX OYAK ANNUAL REPORT 2019 OYAK Group purcheased 70% shares of Group OYAK of a leading company in production Miilux OY, heat treated high strength steel and armor steel based in Finland, on 25 February 2019. has two affiliates named Miilux The Company Çelik Üretim A.Ş. (100%) Yüksek Mukavemetli Sp. z.o.o. (100%). and Miilux Poland Çelik Üretim A.Ş., Miilux Yüksek Mukavemetli was founded wholly owned by Miilux OY, In Manisa facility of the on 28 May 2019. there are heat treatment line, Company, cold straightening, tempering furnace,

www.miilux.fi 70% FIELD OF ACTIVITY Production of heat treated armor steel, abrasion resistant steel and high strength steel WEBSITE 2019 GROUP SHARE OF OYAK 1994 GROUP’S YEAR OF OYAK PARTICIPATION YEAR OF ESTABLISHMENT February 25, 2019. shares of Miilux on OY OYAK Group acquired 70% 70% acquired Group OYAK Sustainability and H&S At OYAK, sustainability is considered as value creating capacity of OYAK and Group Companies in economic, environmental and social areas under the increasingly competitive and rapidly changing global business SUSTAINABILITY AND H&S conditions by evaluating and managing current and future economic, environmental, social risks and opportunities in advance. SUSTAINA- The impact field of the works conducted as BILITY AND HEALTH & part of sustainability at OYAK is expanded SAFETY (H&S) through a value chain which extends from OYAK General Directorate to all the Group Companies, from senior management to all the other positions. Sustainability and H&S is continuously improved through concrete targets, strong communication channels and effective audit mechanisms.

The priority issues Scope OYAK Group’s Prioritization Matrix of OYAK Group and In this section, OYAK Group’s good practices The priority issues of OYAK Group and the prioritization and performance in sustainability and H&S the prioritization matrix created within matrix created within are reported. OYAK Mining Metallurgy the frame of these issues; drawn up with the frame of these Group, OYAK Cement Concrete Paper Group, reference to the Global Reporting Initiative issues; drawn up with Automotive-Logistics Group, Chemicals (GRI) Standards, Sustainability Accounting reference to the Global Group, Agriculture Animal Husbandry Group, Standards Board Sustainability (SASB) and Energy Group Service Group Companies are Sustainability Reporting Guidelines. Reporting Initiative included in the part featuring the activities (GRI) Standards, between January 1, 2019 and December 31, By specifying priority issues, the extensions of Sustainability 2019. economic, environmental and social impacts Accounting were determined in strategic aspects. Standards Board Sustainability (SASB) and Sustainability Reporting Guidelines.

OYAK ANNUAL REPORT 2019 SUSTAINABILITY AND H&S Strategy Strategy Digital Designated Management Priority Issues Safety Transformation Health and Health and the Laws Compliance to Compliance R&D and Innovation Energy Top Priority Top Domestic and Resource Efficiency Efficiency Efficiency Efficiency Quality Service Product Renewable Raw Renewable Raw Material Management Customer Customer Satisfaction Security Emission Emission Information Climate Change Management Management Circular Economy Employee Employee Development Satisfaction & Emergency and Emergency Waste Waste Supply Chain Management Disaster Management Disaster Management Management Equal Providing High Priority High Opportunities Social Programs Investment Water Management Water OYAK Group Economic, Environmental and Social Impacts Group Economic, OYAK OYAK ANNUAL REPORT 2019 Programs Investment Environmental Biodiversity

Prior Stakeholder Evaluations and Extent of Impact on Decision Making Decision on Impact of Extent and Evaluations Stakeholder Horizontal axis of the matrix indicates OYAK impact aspect of the identified priority subjects while vertical axis indicates the matrix indicates OYAK axis of the Horizontal scoring subject on both axes are positioned on the High aspect of impact on stakeholder assessments and decision-makings. top right part of the Prioritization Matrix. SUSTAINABIL- OYAK Sustainability Committee was ITY MANAGE- MENT established to conduct the necessary works for the achievement of OYAK Sustainability goals, to monitor the national and global developments across the industries and to identify priority work subjects.

At OYAK, sustainability is considered as value • Creating synergy within the Group and creating capacity in economic, environmental and popularizing good practice examples, social areas under the increasingly competitive • Following up on the changes in the legal and rapidly changing global business conditions legislation and ensuring coordination to enable by evaluating and managing current and future compliance to these changes. economic, environmental, social risks and opportunities in advance. OYAK ecosystem Brought in the second half of 2019 into life, The impact field of the works conducted as part OYAK ecosystem approach constitutes the main of sustainability at OYAK is expanded through a umbrella for all the sustainability projects that value chain which extends from OYAK General would make economic and ecologic contributions Directorate to all the Group Companies, from for OYAK Group. With OYAK ecosystem, the senior management to all the other positions. goal is to gather all projects that are conducted Sustainability performance is continuously at OYAK General Directorate and in the Group improved with concrete targets, strong companies and/or planned to be brought into life communication channels and effective auditing with regard to resource efficiency, compliance mechanisms. with the environmental legislation, compliance with the climate change, industrial symbiosis and With OYAK OYAK Sustainability Committee was established to sustainable development under this umbrella and ecosystem, the goal is conduct the necessary works for the achievement to provide these with a stronger impact area. to gather all projects of OYAK Sustainability goals, to monitor the Zero Waste Project, launched on July 26, 2019 that are conducted national and global developments across the industries and to identify priority work subjects, as the first project under this umbrella, aims to at OYAK General and the Committee started its works according to create a cultural change in terms of prevention Directorate and in the rules and principles of H&S and Sustainability of waste and resource efficiency by influencing the Group companies Committees’ Operation Directive. approximately 1.5 million people within the and/or planned to influence field of OYAK, including particularly be brought into Responsibilities of the Sustainability Committee OYAK General Directorate, the Group Companies, life with regard to consist of; members and their families. resource efficiency, compliance with • Ensuring the integration of OYAK sustainability As part of OYAK H&S and Sustainability Site the environmental strategy in OYAK’s activities, Visits Implementation Directive, OYAK H&S and legislation, • Identifying well-managed areas and areas that Sustainability Department organizes site visits to OYAK Group Companies in order to popularize good compliance with are open for improvement within the Group companies, practice examples within the Group, to support the climate change, • Identifying priority sustainability issues and continuous improvement, to create synergy within industrial symbiosis creating a business plan and a road map the Group oriented towards innovative solutions, and sustainable according to these, to enable sustainability for industrial symbiosis development under • Managing products and services of OYAK options and production activities, and particularly, this umbrella and to Group Companies that support sustainable to ensure full compliance with the legislation. provide these with a development, During these site visits, examinations are made stronger impact area. • Identifying, managing and monitoring the under the titles of environmental policy and risks in environmental, social, economic and strategy, fight against climate change, resource management areas, efficiency, circular economy applications, waste management and water management as part of OYAK ANNUAL REPORT 2019 sustainability approach. SUSTAINABILITY AND H&S Waste Management Waste Products Environmental-Friendly Innovation Management Water H&S Management Waste Climate Change Innovation H&S Alternative Resources Utilization Resources Alternative Utilization Natural Resources Energy Efficiency Climate Change Innovation Energy Renewable Management Carbon H&S Chemistry Agriculture Industry • • • • • Energy Industry • • • • Cement Industry Cement • • • • • • • • century. United Nations United Nations century. st Biodiversity Energy Efficiency Natural Resources Utilization Climate Change Management Carbon Management Water H&S Waste Management Waste Governance Corporate H&S OYAK ANNUAL REPORT 2019 Iron-Steel Industry Iron-Steel • • • • • • • OYAK General Management General Management OYAK • • • Climate change is the most pressing global pressing is the most change Climate of the 21 problem identified 17 Sustainable Development Goals 17 Sustainable Development identified the impacts of to fight against (SDG) in order to use of 2030, until the end climate change and to develop more efficiently, resources production consumption and sustainable methods. sustainability works are in Group’s OYAK service of particularly the United Nations’ 14 of Goals (SDG) as a Sustainable Development priority. - - - Ensuring the integration of sustainability OYAK strategy in OYAK’s activities is among responsibilities the of the Sustainability Committee. OYAK Group’sOYAK sustainability works are in service of particularly 14 of the United Nations’ Sustainable Development Goals (SDG) as a priority. TION OYAK GROUP GROUP OYAK AND SUSTAIN ABLE DE VELOPMENT GOALS RELA ENVIRONMENT OYAK encourages all Group Companies to AND ENERGY MANAGEMENT make competitive and technology-centered AND efficiency investments to make use of energy COMBATTING resources in a cost-effective manner. CLIMATE CHANGE

As one of the key indicators of sustainable Thanks to all the implemented energy projects, development, energy has a strategic OYAK Mining Metallurgy Group prevented

significance in OYAK Group. OYAK encourages approximately 270 thousand tons of CO2 all Group Companies to make competitive and emissions per year and saved TRY 175 million. technology-centered efficiency investments to make use of energy resources in a cost- As part of the OYAK Dragos Project brought effective manner. Detailed analyses including to life by OYAK İnşaat, LEED* criteria were financial and non-financial factors are observed and 5% less energy consumption was conducted for sustainable utilization of aimed in the buildings. resources in the Group Companies of energy intensive industries. Aslan Çimento generated approximately 45 million kWh of electricity, thanks to the power Energy Management plant generating electricity from waste heat. OYAK Group saved approximately 756 Thus, 34% of its yearly electricity consumption million kWh of energy in 2019 thanks to the was provided by waste heat. implementation of various efficiency projects. This amount corresponds to the yearly energy ISO 50001 Energy Management System was consumption of approximately 250 thousand established in 18 facilities in order to manage people in Turkey. energy consumptions in a comprehensive manner and ensure energy efficiency in all 270 OYAK assesses risks and impacts in line with activities. thousand tons/year the fight against climate change and closely follows available state-of-the-art technology Approximately 509 million kWh of renewable Thanks to all the applications. As part of the fight against energy was generated by the solar plants at implemented energy climate change, various researches are being Adana and Mardin Çimento among OYAK Group projects, OYAK conducted by the Mining Metallurgy Group Companies and by the biomass power plant at Mining Metallurgy with the aim of reducing carbon emissions OYKA. Group prevented and using the proper technologies at Erdemir. approximately Innovative methods are being researched such At OYAK Renault, CO2 emissions were reduced 270,000 tons of CO2 as retention of carbon dioxide from the process by 1,185 tons by repairing leakages on emissions per year and gases generated during the process of iron- pressurized air lines and by another 146 tons by saved TRY 175 million. steel production and utilization of micro algae. decommissioning the mounting PS facility.

* (Leadership in Energy and Environmental Design) is one of the green building rating systems created by the U.S. Green Building Council (USGBC).

OYAK ANNUAL REPORT 2019 SUSTAINABILITY AND H&S

3 of 3 of water was recovered 3 of water as part of the water recovery 3 project by using circulated water containing by using circulated project of chlorine instead of soft water in the 0.5% preparation of MgCI2 solution. transitioned to reverse osmosis Renault OYAK at the waste water treatment plant process 30 thousand m and recovered approximately and re-used at Ermaden. Akdeniz Kimya saved over 12 thousand Kimya Akdeniz m water by re-using surface waters. million m 4.64 In 2019, water per year. water per year. Ünye Çimento saved over 9 thousand m water was saved in total in 3 OYAK ANNUAL REPORT 2019 OYAK’s activities thanks to water reuse and OYAK’s was footprint Water recovering projects. reduced by recovering 60% of the total water consumption in all industries. with its works towards proceeded Beton OYAK investments and measures which aim to create water savings and less waste water generation by re-using industrial waste waters within the facilities at certain rates, and sourced 30% of the total water used in approximately as recovered waste water from the production of 2019. Water Management Water increases day water resources Demand for Group by day as the supply decreases. OYAK to ensure conducts a managerial approach efficient use of water and to mitigate the impact of waste water arising environmental activities. from Over 1 billion m water 3 was saved in total activitiesin OYAK’s thanks water to reuseand recovering projects. OYAK GroupOYAK conducts managerial a approach ensure to efficient use of water and mitigate to the environmental impact of waste water arising from activities. Overbillion 1 m ENVIRONMENT OYAK İnşaat draws Tree Survey plans for the AND ENERGY MANAGEMENT project areas before starting works at OYAK AND and the Group Companies and collects data COMBATTING with regard to the ages, dimensions and CLIMATE CHANGE species of the existing trees.

In 2015, environmental Biodiversity OYAK İnşaat draws Tree Survey plans for the rehabilitation of OYAK conducts works as part of identifying project areas before starting works at OYAK depleted pozzolan priorities with regard to rehabilitation, and the Group Companies and collects data site was completed reclamation and protection of biodiversity. with regard to the ages, dimensions and by having completed species of the existing trees. These data are “Plow the Fields, Keep the Tradition,” launched shared with the designers to ensure optimum planting 5 thousand by Erdemir in 2016, aims to preserve and solutions that would not harm the natural trees and the site increase the cultivation of the Ottoman habitat around the projects. is made nature- Strawberries, incentivize its cultivation and compatible. contributing to the region’s biodiversity and ISKEN has planted over 1 million roots at the preservation of the species. 10 thousand plant area as part of the landscaping works seedlings produced as part of the project were being conducted since its establishment. given away to 20 voluntary arboriculturists Approximately 100 thousand olive seedlings selected by the District Directorate of Food, were planted in Adana and Yumurtalık region Agriculture Animal Husbandry. The Project in order to disseminate olive plant in the region is extended by three years with the protocol which had a limited cultivation area despite the signed by the parties at the end of 2019. regional climate being suitable for olive trees to grow. Adana Çimento developed a rehabilitation project for the sites that was going to be deserted due to exhausted reserves. In 2015, environmental rehabilitation of depleted pozzolan site was completed by having completed planting 5 thousand trees and the site is made nature-compatible.

OYAK ANNUAL REPORT 2019 SUSTAINABILITY AND H&S 7.7 2.4 9.18 18.6 10.8 29.9 2019 Rate Thermal 1.4 5.4 4.8 8.5 25.1 10.8 Displacement 2018 Factories Factories

Adana Çimento Bolu Çimento Merkez Bolu Çimento Ankara Aslan Çimento Ünye Çimento Denizli Çimento Directorate received its Zero Waste Certificate Waste Directorate received its Zero 2020 and became the first on February 10, certified organization in its category. As partof the “There is No Other World” Mining OYAK across campaign launched in July numbers of recycling the Metallurgy Group, and containers in the offices were increased into containers in the shared areas were put purpose use instead of personal trash bins. The and of the campaign is to separate wastes recover these within the ecosystem. fossil Group, Paper Cement Concrete OYAK At Fuel fuel replacement rate with Refuse-Derived showed increase as expected. Aslan Çimento provided approximately 30% approximately Aslan Çimento provided clinker of the thermal energy required for waste. from production OYAK ANNUAL REPORT 2019 Waste Management Waste A circular economy model has been developed as per the Companies and the Group OYAK for Regulation issued by the Ministry Waste Zero and Urbanization on July of Environment 12, 2019 and even beyond the requirements of this document. Plastic and cardboard General wastes in the office buildings of OYAK by Directorate were reduced approximately 80% in order to ensure correct management mission of of wastes. Launched with OYAK’s ecosystem future generations, OYAK protecting 29, was initiated on July Project Waste Zero 2019 with the purpose of contributing to turkey’s sustainable development goals and General creating socio-economic value. OYAK Circular economy exists in every economy exists Circular area of life need to change habits in on the and is focused and relation to resource utilization, production consumption while also making the importance to the of correct waste management central of ways of conducting business. Management and the resources of the world in a sustainable efficient manner is only possible by decreasing raw material usage, increasing resource reducing waste generation and efficiency, OYAK recycling waste as reusable resources. in line manages its operations in all industries with resource efficiency by implementing Thus, waste management hierarchy. operational costs are reduced while healthy is created. and safe working environment OYAK manages its operations in all industries in in industries all in its operations manages OYAK line with resource efficiency by implementing waste Thus, management hierarchy. operational costs are reduced while healthy and safe working environment is created. Aslan Çimento provided 30% approximately theof thermal energy required clinker for production from waste. CIRCULAR ECONOMY CIRCULAR OYAK Cement Concrete Paper Group ECONOMY achieved TRY 23.3 million of savings by preventing natural resource utilization thanks to alternative raw material usage in 2019.

OYAK Mining Resource Efficiency Supply Chain Management Metallurgy Group OYAK Group brings many projects to life OYAK chain supply management includes used recycled every year by improving performance across activities and operations conducted to offer materials and/or all the Group Companies in the name of products and services, interacted stakeholders, materials with lesser efficient use of natural resources in line with human resources and corporate governance environmental impact the sustainability approach. Thanks to the approach. Each ring in this chain is linked to all in 2019 to achieve conducted projects, many achievements are the others and is involved in interaction. approximately being made to create positive impacts as part TRY 120 million of of the fight against climate change. OYAK considers that sustainability must be savings. considered within the supply chain and takes OYAK Cement Concrete Paper Group achieved into account the social benefit provided for TRY 23.3 million of savings by preventing each of the rings of the chain, well-being natural resource utilization thanks to alternative provided for the society, economic sustainable raw material usage in 2019. profit achieved in the activities, sustainable management of natural resources and raw OYAK Mining Metallurgy Group used materials as well as effective disposal of recycled materials and/or materials with the waste generated as a result of business low environmental impact in 2019 to achieve activities in order to implement a sustainable approximately TRY 120 million of savings. approach in the supply chain.

Recovery and recycling applications are an OYAK supply chain is adopted by all the Group integral part of all actions in OYAK’s activities by Companies and has the goal to improve taking environmental awareness and continuity environmental and social well-being for of the ecosystem into account. the future generations and to significantly contribute in sustainable development. Tallow coming from travertine quarries in Denizli Çimento is used in place of limestone in clinker and cement production. Tallow amount used in this way was 921,260 tons in 2019; and 66.26% of total raw material requirement was provided with the use of tallow.

OYAK ANNUAL REPORT 2019 SUSTAINABILITY AND H&S Eco-friendly Products and Innovative Projects Eco-friendly conducts various researches with the OYAK and purpose of reducing carbon emissions in line with the technologies using the proper fight against climate change. where energy Companies Group the OYAK At and raw material utilization is intense, conducted in line with are innovative projects purpose the efficient use of resources with the of replacing non-renewable primary fuels and natural raw materials with their alternatives. As part of the Lifecycle Assessment-LCA Mining Metallurgy launched in 2019 in OYAK to be conducted analyses are planned Group, emissions generated in the on carbon dioxide up until kg of steel production of 1,000 process the end of 2020 as well as on the consumption the aim of energy and natural resources. Thus, Label Product is to create an Environmental to be conducted additional works through and to groups specifically on separate product so. take place in the green markets by doing to life were brought projects reduction Cost high strength low alloy (HSLA)for and pipe- Mining Metallurgy line steel qualities at OYAK optimization works are Process Group. conducted as part of customer satisfaction works various material examination through in line with the customer demands. Especially was put the focus in the automotive industry, on development of high strength materials in the body design of the automobiles with the purpose of increasing fuel savings and reducing carbon emissions. OYAK ANNUAL REPORT 2019 OYAK Mining Metallurgy Group has the Mining Metallurgy Group OYAK necessary advanced resources to conduct the level steel researches needed in Turkey to and conducts its R&D activities in order support and process material, product raw of development strategies based on its vision the increasing its competitiveness and shaping under future. R&D Center conducts its activities and Process, Product main categories, Hot four and Production Steel and Process, Product Cold Materials and Technologies, and Raw Casting 29 of 2019, As of the end R&D. Production Iron were completed in the R&D Center and projects are ongoing. projects the works of 45 Smart agriculture applications are developed at Hektaş with the purpose of preparing the future, strengthening farmers for national agriculture industry and gaining the world. more competitive power across million budget was TRY 13.1 Approximately in R&D and innovation projects allocated for 2019 such as smart agriculture applications, organomineral fertilizer development, seed breeding, plant conservation and sensitive agricultural applications. Projects developed in line with the principles developed in line with the principles Projects creativity and sustainability has of efficiency, and product the goal to develop production, service which observe processes the economic, impacts, to reduce and social environmental sustainable to improve and carbon footprint technologies. production with stakeholders is considered Communication as an opportunity mutual learning and for joint continuous development through projects to life. Joint to be brought projects are conducted as per the University-Industry universities made with the Protocol Cooperation and scientific research papers are written. OYAK Mining MetallurgyOYAK Group conducts support raw to order activities in R&D material, product and process development its increasing of its on vision based strategies competitiveness and shaping the future. OYAK conductsOYAK researches various with the purpose of reducing carbon and emissions using the proper technologies line in with the fight against change. climate R&D AND AND R&D INNOVATION R&D AND OYAK İnşaat’s OYAK Dragos Project has INNOVATION the goal to reach the level of LEED Certificate Gold and plans to implement internationally recognized applications in eight different categories.

Hektaş started As the industrial partner of Turkish Cement Adana Çimento encourages customers to use working on the Manufacturers Association, Adana Çimento STARCEM, having a lower clinker content, rather process of transition took part in FISSAC (Industrial Symbiosis for a than CEM I type cement products. Produced as Sustainable Resource Intensive Industry across an alternative for CEM I type cement, sales of the from products the Extended Construction Value Chain) Project STARCEM was realized as 200 thousand tons in with emulsion as part of HORIZON 2020 in manufacturing 2019. Thanks to that sales amount, tse of clinker concentrated (EC) blended cement and concrete at an industrial dropped by 15 thousand tons preventing 13,448 formulation to scale with the utilization of steelmaking slag, tons of CO2 emissions. products with water- ground glass waste and ceramic waste as oil emulsion (EW) mineral blend material. OYAK İnşaat’s OYAK Dragos Project has the goal formulation in three to reach the level of LEED Certificate Gold and different products in Aslan Çimento developed 40% cinder added plans to implement internationally recognized order to reduce these CEM III/A 42.5 R and 66% cinder added CEM applications in eight different categories. products’ impacts on III/B 32.5 N industrial testers for special projects human health and requiring high durability by replacing cement Digital Transformation environmental health. with high hearth cinder in differing rates under As part of the digital transformation in OYAK, the standard conditions process efficiency is provided and product and service quality are increased. More convenient Hektaş started working on the process of and time-saving applications are developed with transition from products with emulsion the development of technology. concentrated (EC) formulation to products with water-oil emulsion (EW) formulation in In the TUBITAK-sponsored project, conducted three different products in order to reduce jointly by Adana Çimento and Çukurova these products’ impacts on human health and University, a mathematical model and special Various works are environmental health. It is planned to reduce software are developed for the estimation of conducted at OYAK solvent utilization with this formulation type. cider activity and cement durability data through İnşaat for project and artificial neural network method. Thank to this design activities with Akdeniz Kimya manufactures calcium-zinc estimation method, it would be possible to the involvement of based formulations conforming to environment identify a possible activity change in the high employees in order and health legislations, without heavy metals hearth cider and to prevent the cement quality to follow up on the instead of stabilizer systems containing heavy to be affected by this change. The project was digital transformation metals such as lead due to the negative launched on February 1, 2019 and will continue in the industry and to impacts of these on environment and human for 15 months. manage the projects health. Manufacturing calcium-zinc based more efficiently. products instead of lead added products Various works are conducted at OYAK İnşaat for reduces the usage of toxic products. project and design activities with the involvement of employees in order to follow up on the digital Denizli Çimento products provide long-term transformation in the industry and to manage durability in cements thanks to their ability to the projects more efficiently. As part of OYAKKent increase durability in environments subject to Master Plan Project of OYAK İnşaat, all lands and sulphate, their low alkali levels and their high surrounding areas were scanned by drones and resistance against alkali silica reactions. digital space engineering and sustainable project planning were conducted. OYAK ANNUAL REPORT 2019 SUSTAINABILITY AND H&S OYAK ANNUAL REPORT 2019 HEALTH AND H&S Approach which targets to identify SAFETY (H&S) MANAGEMENT H&S priorities, to create a sustainable safety culture and to raise zero accident awareness for all the employees, is supported by OYAK’s H&S Policy.

As a long-established organization putting forth intense efforts to disseminate its “zero accident” goal among its stakeholders, which was adopted in line with its policies and strategies, OYAK Group leads in all its areas of activities with its good practices.

When H&S studies are conducted in OYAK H&S Approach which targets to create a Group, the following objectives are observed: common H&S language among the Group creating a healthy and safe environment Companies, to identify H&S priorities to focus for all stakeholders, particularly employees, on, to create a sustainable safety culture and making safety an integral part of all Group to raise zero accident awareness in all the activities, and enabling conformity to employees, is supported by OYAK’s H&S Policy. legislation requirements and internationally accepted standards by continuously improving OYAK’s Health and Safety Policy can be performance. accessed on the corporate website.

As a long-established organization putting forth intense efforts to disseminate its “zero accident” goal among its stakeholders, which was adopted in line with its policies and strategies, OYAK Group leads in all its areas of activities with its good practices.

OYAK ANNUAL REPORT 2019 SUSTAINABILITY AND H&S Guide was included in the work plan of 2020 of 2020 work plan in the was included Guide the standardize and to systematize in order application. LOTOTO analysis to the outputs of need According among with the H&S professionals conducted on Machinery “Focusing Companies, the Group and Process on Chemical “Focusing Safety” and planned to be dealt with in Safety” studies are 2020. “Reporting Directive In 2019, and Examination the Accidents Occurring in the Group for to create a was drawn in order Companies” to system with regard standard information all incidents through accidents and to examine As partthe same perspective. the of this study, the content was put into use across following under the subject matter of “Focusing Group on the Accidents.” Incident Details Analysis Guide: A guiding to document that brings a standard perspective Companies the incidents and directs the Group method. towards a standardized examination A tool to convey Incident Reporting Card: Companies Group OYAK to other information referring to the first reporting of the accident to the General Directorate. Incident: Lessons Learnt Assessment After Announcement published with the purpose in Group OYAK of raising awareness across order to prevent repetition of similar incidents, referring to the analysis report created after the occurrence of the accident. Formed by safety managers and professionals that come together representing different sectors under the that come together representing different sectors by safety managers and professionals Formed OYAK ANNUAL REPORT 2019 coordination of OYAK H&S and Sustainability Department. coordination of OYAK * ODAK, which means a focal point or to focus on on to focus point or a focal which means ODAK, adopted is the approach in Turkish, something in its endeavors regarding Group by the OYAK by was developed Approach” “ODAK H&S. group as a multi-sectoral which operates OYAK priority subjects in in order to identify structure is a vision that ODAK Approach H&S. the area of creating OYAK of the process way for lights the Map. H&S Road in the ODAK Approach The subjects included the help of technical were determined with the Moreover, in 2019. site audits conducted H&S Technical OYAK decisions taken during ODAK also contributed in the Committee* subject matters. As part Management, Risk of ODAK Approach, - Tag- (Lock-out LOTOTO Electrical Safety and and Chemical out - Try-out), Machine Safety, on as to be focused Safety are planned Process priorities in 2020. the As part study, on Risks” the “Focusing of H&S and Environmental works to prepare OYAK the Management Guide were initiated with Risk to be purpose of identifying a similar method the current companies for used in all the group of taking and Group HSE hazards of OYAK the necessary regulatory after the measures determination of priority risks. As part on Electrical Safety” the “Focusing of was sub-working group a LOTOTO study, H&S Technical created within the OYAK and good practices were shared Committee Application LOTOTO between the sectors. OYAK H&S FOCUSES In 2019, “ReportingIn Examinationand Directive for the Accidents Occurring in the Group Companies” was drawn in order createto a standard information system with regard to accidents and to incidents all examine through the same perspective. H&S H&S processes at OYAK Group are executed PERFORMANCE meticulously at each step from cultivating safety culture to detection of risks and improvement works, from expanding learnt lessons to increasing awareness of the shareholders.

In OYAK Group In 2019, 11 site visits were made to OYAK Group In 2019, H&S continued to be one of the priority Companies, there are Companies with a total of 134 person*days; and issues across the OYAK Group and over nine facilities certified 58% of the findings reported following the visits TRY 100 million worth of H&S investments and with İSO 45001:2018 were closed within the year of 2019. expenditures were made. Health and Safety Management System Periodical medical examinations of all employees The root causes of work accidents and near and 27 facilities across the Group against occupational and miss incidents occurring across the Group certified with OHSAS natural diseases are rigorously observed. are rigorously examined, and accidents Hence, 15,173 OYAK Group employees had with severe injuries are conveyed to OYAK 18001 Health and Safety regular medical checks as well as recruitment General Directorate as well to ensure a Management System. examinations in 2019 and measures were taken more comprehensive examination process. against potential diseases. Significant improvements were achieved in the last five years in OYAK Group’s accident In 2019, 401,795 person*hours of training was frequency and accident severity rates as a given to OYAK Group employees in order to raise result of the efforts to raise H&S awareness. H&S awareness across the Group. Total H&S The number of accidents with loss of day was training hours given to the employees this year reduced by 36% across the Group compared was increased by 18% compared to the previous to 2015 and accident frequency rate showed an reporting year. improvement of 41%. Similarly, OYAK Group’s accident severity rates between 2015 and 2019 In OYAK Group companies, there are nine was improved by 42%. facilities certified with İSO 45001:2018 Health and Safety Management System and 27 facilities certified with OHSAS 18001 Health and Safety Management System.

Accident Severity Rate Accident Frequency Rate

42% improvement 41% improvement 100 100

90 90

80 80

70 70

60 60

50 50

40 40 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019

Figure 1. Decrement of OYAK Group Accident Frequency and Accident Severity Rates as per 2015* *Accident frequency and accident severity rates of OYAK Group in general between 2016-2019 are given as indexed to 2015 base year.

OYAK ANNUAL REPORT 2019 SUSTAINABILITY AND H&S A graffiti of “There Are People Who Need A graffiti of “There Are People Who Need was painted on the walls located on a You” towards the operation going pedestrian road area at Mardin Çimento facility with the purpose of raising H&S awareness. HAZOP works and quantitative risk assessments were started to be conducted newly established operations and process for safety process changes in order to improve regarding ATEX Works Kimya. at Akdeniz certificationconformity and documentation are being conducted rigorously, processes explosive which have been initiated for against the and protection environments hazards of this environments. OYAK ANNUAL REPORT 2019 At OYAK Group, good practices which are good Group, OYAK At beyond the requirements of H&S legislations these good practices to life and are brought are awarded by various organizations and institutions. Cement OYAK A directive was published for with the purposes Group Paper Concrete all the employees about H&S of informing subjects, enabling active involvement of employees in H&S applications, improving the relevant behaviors in this area, increasing morale and motivation and determining various the employees. As incentives to be applied for part of this, H&S personnel of the month were started Companies to be selected at the Group and various awarding mechanisms were put into place. At OYAK Group, OYAK At good practices which are beyond the requirements of H&S legislations are brought life to and these good practices are awarded by various organizations and institutions. H&S GOOD PRACTICES AND ACHIEVEMENTS H&S GOOD In “Crystal Helmet” contest organized by PRACTICES AND ACHIEVEMENTS OYAK Renault for the employees with regard to safety matters, 28 improvement opportunities were identified and brought to life.

Vertical lifelines were A lifeline of 18,000 meters was installed in In “Crystal Helmet” contest organized by OYAK put into practice at Erdemir to increase safety for the works Renault for the employees with regard to OYAK Denizcilik ve conducted at heights. Speed detection camera safety matters, 28 improvement opportunities Liman İşletmeleri systems were installed across the facility in were identified and brought to life. facilities with the order to ensure traffic safety on the main roads purpose of increasing and waiting times of the railroad crossings Vertical lifelines were put into practice at OYAK safety levels for within the facility were optimized. Denizcilik ve Liman İşletmeleri facilities with the descents and ascents to purpose of increasing safety levels for descents the holds of the ships. Erdemir certified the success of its H&S works and ascents to the holds of the ships. once again and was honored by the British Safety Council during the 61st International As part of the hazardous substance Safety Awards. This was the first time a transportation activities conducted at OMSAN, company from Turkish metal industry was information training programs were organized honored with this award. for the drivers in order to ensure driving safety and a decrease was observed in traffic The campaign conducted at İsdemir with the accidents. motto of “We Are Safe Together with My Dear Fellow” has the goal of enabling each employee Paint preparation cabin located at the retouch to support, warn and help their workmates for workshop at the Renault MAİS vehicle park a healthy and safe working environment and to was changed; ventilation system, electricity prevent unsafe behaviors. installation and lighting system were renewed; water-tight material cabinets were provided Ersem was honored with a total of 3 awards and thus, a safer work environment was in the H&S Contest organized by Turkish created. Moreover, kaizen teams were formed Employers’ Association of Metal Industries and trainings were given as part of 5S works (MESS), consisting of 1 award in the category of conducted in all the branches. Layouts were Recommended Practices and 2 awards in the revised accordingly, and descriptions and labels category of Golden Recommendation. OYAK were rearranged. Renault was also honored in the same contest with an award in the category of Golden Recommendation.

Thanks to the strong management structure expanding from OYAK General Directorate to all the Group Companies, the impact of the works conducted in line with Sustainability and H&S also extends to a wider area. The Group’s sustainability and H&S performance will be monitored in the following periods as well through concrete targets, strong communication channels and effective audit mechanisms and will be continuously improved.

OYAK ANNUAL REPORT 2019 SUSTAINABILITY AND H&S OYAK ANNUAL REPORT 2019 OYAK ANNUAL REPORT 2019

ANNUAL REPORT 2019

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