ANNUAL REPORT 2013 ENKA İNŞAAT VE SANAYİ A.Ş. (2) ANNUAL REPORT DRT Bağımsız Denetim ve Serbest Muhasebeci Mali Müşavirlik A.Ş. Sun Plaza Bilim Sok. No. 5 Maslak, Şişli 34398 İstanbul, Türkiye Tel: (212) 366 60 00 Faks: (212) 366 60 10 www.deloitte.com.tr AUDITOR’S REPORT ON ANNUAL REPORT To the Board of Directors of Enka İnşaat ve Sanayi Anonim Şirketi As part of our audit, we have assessed whether the financial information and the assessment and explanations of the Board of Directors presented in the annual report of Enka İnşaat ve Sanayi Anonim Şirketi (“the Company”) prepared as of 31 December 2013 are consistent with the audited consolidated financial statements as of the same date. Management is responsible for the preparation of the annual report in accordance with “the Communique related to the Determination of the Minimum Content of the Companies’ Annual Report”. Our responsibility is to express an opinion on whether the financial information provided in the annual report is consistent with the audited financial statements on which we have expressed our opinion dated 3 March 2014. Our assessment is made in accordance with the principles and procedures for the preparation and issuing of annual reports in accordance with Turkish Commercial Code No. 6102 (“TCC”). Those principles and procedures require that audit is planned and performed to obtain reasonable assurance whether the financial information provided in the annual report are free from material misstatement regarding the consistency of such information with the audited financial statements and the information obtained during the audit. We believe that the assessment we have made is sufficient and appropriate to provide a basis for our opinion. Based on our opinion, the financial information and the assessment and explanations of the Board of Directors in the accompanying annual report of Enka İnşaat ve Sanayi Anonim Şirketi are consistent with the audited consolidated financial statements as at 31 December 2013. İstanbul, 3 March 2014 DRT BAĞIMSIZ DENETİM VE SERBEST MUHASEBECİ MALİ MÜŞAVİRLİK A.Ş. Member of DELOITTE TOUCHE TOHMATSU LIMITED Burç Seven, SMMM Partner Member of Deloitte Touche Tohmatsu Limited YILLIK FANNUAL REPORT (3) TABLE OF CONTENTS COMPANIES 6 AGENDA OF THE GENERAL ASSEMBLY MEETING 7 THE BOARD OF DIRECTORS 8 THE EXECUTIVE COMMITTEE 9 CHAIRMAN’S MESSAGE 10 ENGINEERING AND CONSTRUCTION 12 ENERGY 36 REAL ESTATE 40 TRADING & MANUFACTURING 46 FOUNDATION 52 CORPORATE GOVERNANCE PRINCIPLES COMPLIANCE REPORT 64 BASIC RATIOS 80 INDEPENDENT AUDITOR’S REPORT 82 (4) ANNUAL REPORT Enka İnşaat ve Sanayi A.Ş. The Board of Directors’ Annual Report for the Period 01.01.2013 - 31.12.2013 Registered Company Name: Enka İnşaat ve Sanayi A.Ş. Date of Registration or Incorporation: 1957 Country of Registration: İstanbul / Turkey Registration Number of Chamber of Commerce: 68194 Paid-Up Capital: 3 2 2 040 35 778 . 00.000.000 TL . 1. U.S. Dollars (equivalent) BS EN ISO 9001 Registered 2008 Certificate No: 57544 FS BS EN ISO 14001 Registered 2004 Certificate No: EMS 71388 OHSAS 18001 Registered 2007 Certificate No: OHS 71389 Registered Head Office Address: Balmumcu Mah. Zincirlikuyu Yolu No:10, 34349 Beşiktaş / İstanbul Tel: +90 212 376 10 00 Fax: +90 212 272 88 69 (pbx) Official Internet Site E-mail: http://www.enka.com [email protected] YILLIK FANNUAL REPORT (5) COMPANIES ENGINEERING AND CONSTRUCTION Enka İnşaat ve Sanayi A.Ş. Çimtaş Çelik İmalat Montaj ve Tesisat A.Ş. Çimtaş Gemi İnşa Sanayi ve Ticaret A.Ş. Çimtaş Boru İmalatları ve Ticaret Ltd. Şti. Çimtaş Borulama Sanayi ve Ticaret Ltd. Şti. Cimtas (Ningbo) Steel Processing Co. Ltd. IBH Engineering GmbH Capital City Investment B.V. Kasktaş Kayar Kalıp Altyapı Sondaj Kazık ve Tecrit A.Ş. Kasktas Arabia Ltd. Esta Construction B.V. Enka Teknik Genel Müteahhitlik Bakım İşletme Sevk ve İdare A.Ş. Titaş Toprak İnşaat ve Taahhüt A.Ş. Enet Proje Araştırma ve Müşavirlik A.Ş. Limited Liability Company Enmar Enka Holding B.V. Enka Construction and Development B.V. AECO Development L.L.C. Far East Development B.V. Covet B.V. ENERGYEnka Power Systems B.V. Adapazarı Elektrik Üretim Ltd. Şti. Gebze Elektrik Üretim Ltd. Şti. Enkaİzmir Elektrik Üretim Ltd. Şti. Enka Enerji Üretim A.Ş. Elektrik Üretim A.Ş. Enka Santral Hizmetleri A.Ş. REAL ESTATE JSC Mosenka JSC Moskva Krasnye Holmy Enka Holding Investment S.A. Rumos S.A. City Center Investment B.V. TRADINGLimited Liability AND CompanyMANUFACTURING Enka TC Enka Pazarlama İhracat İthalat A.Ş. Pimaş Plastik İnşaat Malzemeleri A.Ş. Pimapen Logistic Center S.R.L. Entaş Nakliyat ve Turizm A.Ş. Airenka Hava Taşımacılığı A.Ş. Enka Finansal Kiralama A.Ş. (The full list of the companies can be found in the Consolidated Financial Statements as of December 31, 2013) (6) ANNUAL REPORT THE GENERAL ASSEMBLY MEETING Date : 2014 Time : March 27, Venue : 14:00 6 Balmumcu Mahallesi, Zincirlikuyu Yolu No: Enka III. Binası,- Konferans Salonu, Beşiktaş İstanbul AGENDA 1- Election of the General Assembly Presidential Board and authorization of the Presidential Board 2- for signing the Minutes of the General Assembly Meeting; Reading and discussing the Annual Report of the Board of Directors and the Balance Sheet and 3- Income Statement for the fiscal year 2013; 4- Reading and discussing the Report of Independent Auditors; 5- Informing the shareholders about the donations made within the fiscal year 2013; 6- Approval of Balance Sheet and Income Statement Accounts of 2013; 7- Acquittal and release of the Board Members; Informing the shareholders about the Remuneration Policy applicable to Board Members and Managers who have an administrative responsibility which is revised regarding the regulations 8- of Capital Markets Board; 9- Election of the Board Members; 10- Determining the attendance fee payable to Board Members; 11- Approval of the selection of the Independent Auditors; 12- Making decision on distribution of the Balance Sheet profit of 2013; Approval of the Profit Distribution Policy which is revised regarding the regulations of Capital 13- Markets Board; Approval of the Donation and Aid Policy which is revised regarding the regulations of Capital 14- Markets Board; Informing the shareholders that there are no guarantees, pledges, mortgages and encumbrances given to the benefit of third parties regarding the regulations of Capital Markets 15- Board; Authorization of the Board Members to engage in businesses mentioned in Articles 395 and 396 of the Turkish Code of Commerce and, in compliance with the Corporate Governance Principles, informing the General Assembly on any businesses engaged in and performed by the same 16- within such framework during the fiscal year of 2013; Requests and recommendations. YILLIK FANNUAL REPORT (7) THE BOARD OF DIRECTORS Sinan Tara Chairman of the Board (Executive Member) Haluk Gerçek Vice Chairman of the Board (Executive Member) Erdoğan Turgut E. Melih Araz V. Ergin İmre Member of the Board Member of the Board Member of the Board (Non-Executive) (Non-Executive & Independent) (Non-Executive & Independent) (8) ANNUAL REPORT THE EXECUTIVE COMMITTEE A. Mehmet Tara M. Gökhan Sağnaklar Alp Doğuoğlu B. Burak Özdoğan C . Şan Gürdamar Özger İnal S. Oğuz Kırkgöz Zafer Gür Asaf Yener YILLIK FANNUAL REPORT (9) CHAIRMAN’S MESSAGE Dear Shareholders, On behalf of the Board of Directors of Enka İnşaat ve Sanayi A.Ş. we wish to extend our deepest respect to all of our shareholders and thank you for attending our General Assembly’s annual meeting which has convened to share the activities of our Company in 2013, as well as our expectations for 2014. As of the end of 2013, Enka İnşaat ve Sanayi A.Ş. realized an equity of 5,6 billion USD, a consolidated turnover of 6,5 billion USD and a consolidated net profit of 656 million USD. Enka is concentrating on the segments of engineering and construction, power production, real estate investment and management, and trading and manufacturing. Thanks to the healthy measures taken by our company as well as the increasing weight of the ongoing profitable big scale construction projects the turnover of engineering and construction segment was increased by 84% in USD terms and reached 2,55 billion USD. - Our completed or ongoing projects in 2013 are Morine Merdare motorway project in Kosovo; Kuntsevo Shopping Center and Khabarovsk Refinery structural steel and mechanical erection works, - - Berezovskaya Coal Fired Power Plant boiler mechanical erection works and additional contract of a electro mechanical works for multi purpose office and residential complex on plot 12 within the Moscow City project in Russi ; maintenance works in Kazakhstan, Tengiz Region; Presidential Palace Project for Gabonese Republic; US Embassy buildings in Afghanistan, Dominican Republic, Equatorial Guinea, and Papua New Guinea; Muscat International Airport in Oman; combined cycle power plant project in Iraq, Erbil Region; mechanical, electrical and instrumentation works in Majnoon Oil Field and 126 MW Power Plant Project in Iraq, Basra Region; Çimtaş’s contracts about steel works for İzmit Bay - Crossing Suspension Bridge Project in Turkey and gas turbine piping systems on a repeat order basis to GE Energy and other projects and contracts. 500 MW Gas Turbine Power Plant Project in Al Najybia and Crude Oil Pumping Station Project in Rumaila, Iraq were signed by Enka Teknik as well as Obari 640 MW Gas Turbine Power Plant Project in Libya. In - addition to ongoing projects, newly undertaken projects in 2013 are; combined cycle power plant projects in the cities of Dohuk and Sulaymaniyah of Iraq; US Embassy buildings in Moscow Russia, Holland, Mauritania and Djibuti; Sergiev Posad Shopping Center and Ufa Perinatal Medical Center - Projects in Russia; TANAP Contract together with Bechtel in Turkey; finishing works for Esentai Park Project in Kazakhstan; conference center project and a multi purpose project which consists of mausoleum, mosque, library and a museum. With contribution of affiliated companies’ contracts, Enka shares of the additions in the last year have reached a level of 1,9 billion USD.