doğuş holding anonim Şirketi and its subsidiaries

Doğuş Holding Anonim Şirketi and its Subsidiaries

Table of Contents

Independent Auditors’ Report on Review of Consolidated Interim Financial Information Condensed Consolidated Interim Statement of Financial Position Condensed Consolidated Interim Statement of Comprehensive Income Condensed Consolidated Interim Statement of Changes in Equity Condensed Consolidated Interim Statement of Cash Flows Notes to the Condensed Consolidated Interim Financial Statements Appendix: Supplementary Information - Convenience Translation to US Dollar

Doğuş Holding Anonim Şirketi and its Subsidiaries Condensed Consolidated Interim Statement of Financial Position As at 30 June 2011 Currency: Thousands of Turkish Lira (“TL”)

1

Notes 30 June 2011 31 December 2010 Assets Property and equipment 12 3,563,367 3,310,288 Intangible assets 13 1,026,210 1,114,392 Investments in debt securities 14 6,808,327 9,067,893 Investments in equity securities 42,719 73,144 Accounts receivable 49,368 13,741 Banking loans and advances to customers 15 11,157,585 12,476,609 Banking loans and advances to banks 1,138,481 1,375,606 Financial assets at fair value through profit or loss 99,075 108,718 Investment property 1,584,267 1,528,750 Other non-current assets 371,794 456,958 Deferred tax assets 11 131,037 237,683 Total non-current assets 25,972,230 29,763,782 Inventories 603,502 565,144 Accounts receivable 1,602,141 1,888,425 Due from related parties 24 205,497 126,791 Other current assets 1,626,440 1,549,220 Investments in debt securities 14 1,831,430 3,143,254 Banking loans and advances to customers 15 8,266,149 8,513,765 Banking loans and advances to banks 1,166,019 1,591,059 Financial assets at fair value through profit or loss 228,851 133,554 Cash and cash equivalents 16 5,681,523 2,010,936 Total current assets 21,211,552 19,522,148 Total assets 47,183,782 49,285,930

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

Doğuş Holding Anonim Şirketi and its Subsidiaries Condensed Consolidated Interim Statement of Financial Position As at 30 June 2011 (continued) Currency: Thousands of TL

2

Notes 30 June 2011 31 December 2010 Equity Paid-in capital 2,055,292 2,055,292 Capital stock held by subsidiaries (98,755) (98,755) Share premium 159,350 159,350 Fair value reserve 189,889 484,725 Translation reserve 38,484 3,368 Hedging reserve (6,716) (7,859) Revaluation surplus 1,069,784 1,086,198 Legal reserves 294,120 270,507 Retained earnings 5,884,857 3,748,970 Total equity attributable to owners of the Company

9,586,305 7,701,796 Non-controlling interests Şahenk Family 101,964 100,291 Others 208,952 178,668 Total non-controlling interests 310,916 278,959 Total equity 17 9,897,221 7,980,755 Liabilities Long-term bank borrowings 18 5,623,560 6,271,098 Subordinated liabilities 20 249,336 295,764 Deposits 22 360,976 385,622 Bonds payable 19 311,792 -- Obligations under repurchase agreements 245,409 -- Deferred tax liabilities 11 176,062 155,889 Other non-current liabilities 754,368 694,754 Total non-current liabilities 7,721,503 7,803,127 Subordinated liabilities 20 1,565 -- Short-term bank borrowings 21 2,685,359 2,671,315 Short-term portion of long-term bank borrowings 18

1,018,482 1,018,001

Bonds payable 19 499,527 -- Deposits 22 19,427,397 23,429,175 Obligations under repurchase agreements 3,157,519 3,548,767 Accounts payable 1,099,184 1,141,354 Due to related parties 24 12,174 61,912 Taxes payable on income 11 62,189 99,279 Other current liabilities 1,601,662 1,532,245 Total current liabilities 29,565,058 33,502,048 Total liabilities 37,286,561 41,305,175 Total equity and liabilities 47,183,782 49,285,930


Doğuş Holding Anonim Şirketi and its Subsidiaries Condensed Consolidated Interim Statement of Comprehensive Income For the Six-Month Period Ended 30 June 2011 Currency: Thousands of TL

3

Notes

Six-month period ended

30 June 2011

Three-month period ended

30 June 2011


30 June 2010


30 June 2010 Revenues 4,856,262 2,481,064 4,007,415 2,151,545 Cost of revenues (3,582,887) (1,854,330) (2,619,482) (1,456,153)

Gross profit 7 1,273,375 626,734 1,387,933 695,392 Administrative expenses 8 (615,431) (274,399) (575,384) (269,151) Selling, marketing and distribution expenses (104,961) (58,534) (90,391) (48,007) Impairment (losses) / gain, net 9 (170,678) (32,367) 6,383 20,365 Trading gain, net 103,498 32,530 37,290 58,235 Other operating income / (expense), net 6 2,290,254 121,771 (64,359) (40,185)

Result from operating activities 2,776,057 415,735 701,472 416,649 Finance income 320,545 256,734 277,763 93,779 Finance expense (527,772) (317,098) (343,691) (212,608)

Net finance cost 10 (207,227) (60,364) (65,928) (118,829) Share of (loss) / profit of equity accounted investees (2,863) 1,886 18,171 8,354

Profit before income tax 2,565,967 357,257 653,715 306,174 Income tax expense 11 (298,550) (80,895) (132,605) (48,320)

Profit for the period 2,267,417 276,362 521,110 257,854

Other comprehensive income Revaluation of property and equipment -- -- (1,979) (1,979) Change in fair value of available-for-sale financial assets (343,077) (58,193) (36,137) (89,761) Change in translation reserve 35,116 22,307 (59,688) (50,771) Effective portion of changes in fair value of cash flow hedges 1,143 60 (2,613) (1,553) Income tax on other comprehensive income 49,462 10,561 18,856 (3,102)

Other comprehensive income / (expense) for the period, net of income tax (257,356) (25,265) (81,561) (147,166)

Total comprehensive income for the period 2,010,061 251,097 439,549 110,688

Profit attributable to: Owners of the Company 2,247,254 260,327 498,619 238,850 Non-controlling interests 17 20,163 16,035 22,491 19,004

-Şahenk Family 3,443 3,414 3,635 3,844 -Others 16,720 12,621 18,856 15,160

2,267,417 276,362 521,110 257,854

Total comprehensive income attributable to: Owners of the Company 1,990,533 235,537 418,432 92,665 Non-controlling interests 19,528 15,560 21,117 18,023


2,010,061 251,097 439,549 110,688


Doğuş Holding Anonim Şirketi and its Subsidiaries Condensed Consolidated Interim Statement of Changes in Equity For the Six-Month Period Ended 30 June 2011 Currency: Thousands of TL

4

Attributable to owners of the Company

Paid-in capital

Capital stock held by

subsidiaries Share

premium

Fair value

reserve Translation

reserve Hedging

reserve Revaluation

surplus Legal

reserves Retained earnings Total

Non-controlling

interests Total

equity Balances at 1 January 2010 2,010,192 (53,655) 159,350 398,523 46,888 (8,226) 1,081,534 211,758 2,882,502 6,728,866 230,432 6,959,298 Total comprehensive income for the period Profit for the period -- -- -- -- -- -- -- -- 498,619 498,619 22,491 521,110 Other comprehensive income Net fair value losses from cash flow hedges, net of tax -- -- -- -- -- (2,613) -- -- -- (2,613) -- (2,613) Net fair value gains from available-for-sale portfolio, net of tax -- -- -- 1,676 -- -- -- -- -- 1,676 -- 1,676 Transferred to net income from fair value increases, net of tax -- -- -- (36,256) -- -- -- -- -- (36,256) -- (36,256) Foreign currency translation differences for foreign operations -- -- -- -- (59,688) -- -- -- -- (59,688) -- (59,688) Change in revaluation surplus, net of tax -- -- -- -- -- -- 2,592 -- 14,102 16,694 (1,374) 15,320 Total other comprehensive income -- -- -- (34,580) (59,688) (2,613) 2,592 -- 14,102 (80,187) (1,374) (81,561) Total comprehensive income for the period (34,580) (59,688) (2,613) 2,592 -- 512,721 418,432 21,117 439,549 Transactions with owners, recorded directly in equity Increase in capital stock held by subsidiaries 45,100 (45,100) -- -- -- -- -- -- -- -- -- -- Adjustment to non-controlling interest for a new subsidiary of proportionately consolidated joint venture -- -- -- -- -- -- -- -- -- -- 8,303 8,303 Dividends paid -- -- -- -- -- -- -- -- (32,823) (32,823) -- (32,823) Transfers -- -- -- -- -- -- -- 56,306 (56,306) -- -- -- Change in non-controlling interests in consolidated subsidiaries -- -- -- -- -- -- -- -- -- -- 16,865 16,865 Total transactions with owners 45,100 (45,100) -- -- -- -- -- 56,306 (89,129) (32,823) 25,168 (7,655) Balances at 30 June 2010 2,055,292 (98,755) 159,350 363,943 (12,800) (10,839) 1,084,126 268,064 3,306,094 7,114,475 276,717 7,391,192


Doğuş Holding Anonim Şirketi and its Subsidiaries Condensed Consolidated Interim Statement of Changes in Equity For the Six-Month Period Ended 30 June 2011 (continued) Currency: Thousands of TL

5

Attributable to owners of the Company

Paid-in capital

Capital stock held by

subsidiaries Share

premium

Fair value

reserve Translation

reserve Hedging

reserve Revaluation

surplus Legal

reserves Retained earnings Total

Non-controlling

interests Total

equity Balances at 1 January 2011 2,055,292 (98,755) 159,350 484,725 3,368 (7,859) 1,086,198 270,507 3,748,970 7,701,796 278,959 7,980,755 Total comprehensive income for the period Profit for the period -- -- -- -- -- -- -- -- 2,247,254 2,247,254 20,163 2,267,417 Other comprehensive income Net fair value gain from cash flow hedges, net of tax -- -- -- -- -- 1,071 -- -- -- 1,071 -- 1,071 Net fair value losses from available-for-sale portfolio, net of tax -- -- -- (163,765) -- -- -- -- -- (163,765) -- (163,765) Transferred to net income from fair value increases, net of tax -- -- -- (66,177) -- -- -- -- -- (66,177) -- (66,177) Foreign currency translation differences for foreign operations -- -- -- -- 35,526 -- -- -- -- 35,526 -- 35,526 Transferred to retained earnings from revaluation surplus due to partial disposal of proportionately consolidated joint venture -- -- -- -- -- -- (7,700) -- 7,700 -- -- -- Change in joint venture rate in a proportionately consolidated joint venture due to partial disposal -- -- -- (64,894) (410) 72 -- -- -- (65,232) -- (65,232) Change in revaluation surplus, net of tax -- -- -- -- -- -- (8,714) -- 10,570 1,856 (635) 1,221 Total other comprehensive income -- -- -- (294,836) 35,116 1,143 (16,414) -- 18,270 (256,721) (635) (257,356) Total comprehensive income for the period -- -- -- (294,836) 35,116 1,143 (16,414) -- 2,265,524 1,990,533 19,528 2,010,061 Transactions with owners, recorded directly in equity Acquisition of non-controlling interests in a previously proportionately consolidated joint venture with a change in control -- -- -- -- -- -- -- -- -- -- 18,291 18,291 Change in joint venture rate in a proportionately consolidated joint venture due to partial disposal -- -- -- -- -- -- -- (34,984) -- (34,984) -- (34,984) Dividends paid -- -- -- -- -- -- -- -- (71,040) (71,040) (2,804) (73,844) Transfers -- -- -- -- -- -- -- 58,597 (58,597) -- -- -- Change in non-controlling interests in consolidated subsidiaries -- -- -- -- -- -- -- -- -- -- (3,058) (3,058) Total transactions with owners -- -- -- -- -- -- -- 23,613 (129,637) (106,024) 12,429 (93,595) Balances at 30 June 2011 2,055,292 (98,755) 159,350 189,889 38,484 (6,716) 1,069,784 294,120 5,884,857 9,586,305 310,916 9,897,221


Doğuş Holding Anonim Şirketi and its Subsidiaries Condensed Consolidated Interim Statement of Cash Flows For the Six-Month Period Ended 30 June 2011 Currency: Thousands of TL

6

Notes 30 June 2011 30 June 2010 Cash flows from operating activities Profit for the period 2,267,417 521,110 Adjustments for Impairment losses / (gain) 9 170,678 (6,383) Provision for and reversal of employee severance indemnity, net 5 25,776 4,006 Depreciation and amortization 5 139,646 111,503 Technical reserves relating to insurance operations 5 5,347 4,452 Gain on sales of property and equipment 12 (5,020) (5,706) (Gain) / loss on partial sales of proportionately consolidated joint venture 6 (2,163,189) 24,311 Bargain purchase gain recognised on acquisition 6 (1,953) -- Fair value gain on trading property transferred to property and equipment 5 (51,830) -- Gain on sales of investment in equity securities (57,862) -- Share of loss / (profit) of equity accounted investees 5 2,863 (18,171) Change in accrued interest expense, net 5 76,823 225,624 Provision for taxes on income 11 139,784 197,185 Deferred tax charge / (benefit) 11 158,766 (64,580) Warranty provision 5 19,205 14,917 726,451 1,008,268 Changes in operating assets and liabilities Change in deposits 1,597,779 1,830,057 Change in banking loans and advances to banks (150,395) (169,047) Change in balances with Central Bank (290,098) 197,307 Change in banking loans and advances to customers (4,128,217) (2,690,813) Change in financial assets at fair value through profit or loss (103,294) (335,830) Change in other assets (181,655) (432,021) Change in inventories (57,546) (57,754) Change in accounts receivable 77,554 (193,956) Change in due from related parties (78,706) (2,578) Change in obligations under repurchase agreement 411,819 (1,703,083) Change in accounts payable 77,880 151,995 Change in bonds payable 863,393 -- Change in due to related parties (49,738) 3,191 Change in other liabilities 462,565 48,859 (822,208) (2,345,405) Taxes paid 11 (159,633) (197,467) Interest paid (840,009) (847,867) Interest received 1,531,555 1,627,495 Warranties paid (14,686) (14,015) Employee termination indemnity paid (4,415) (4,222) Net cash flows used in operating activities (309,396) (1,781,481) Cash flows from investing activities Increase in interest in consolidated subsidiaries 17 (7,956) (1,544) Decrease in interest in consolidated subsidiaries 17 20,385 18,409 Acquisition of a subsidiary -- (75,787) Acquisition of additional interest with a change in control 6 (87,326) -- Proceeds from partial sale of proportionately consolidated joint venture, net of cash disposed of 2,833,275 72,255 Proceeds from sales of investment in equity securities 77,867 -- Increase / (decrease) in investments in debt securities 395,515 (82,311) Acquisitions of investment property (648) (30,379) Acquisitions of property and equipment and intangible assets (390,217) (445,983) Proceeds from sales of property and equipment and intangible assets 31,442 18,208 Cash flows provided from / (used in) investing activities 2,872,337 (527,132) Cash flows from financing activities Dividends paid (71,040) (32,823) Change in short-term bank borrowings, net 759,400 (97,714) Change in long-term bank borrowings, net 258,298 972,690 Change in subordinated liabilities 16,897 (3,776) Cash flows provided by financing activities 963,555 838,377 Net increase / (decrease) in cash and cash equivalents 3,526,496 (1,470,236) Cash and cash equivalents at 1 January 2,562,163 3,481,405 Cash and cash equivalents at 30 June 16 6,088,659 2,011,169


Doğuş Holding Anonim Şirketi and its Subsidiaries Notes to the Condensed Consolidated Interim Financial Statements As at and for the Six-Month Period Ended 30 June 2011 Currency: Thousands of TL

7

Notes to the condensed consolidated interim financial statements Notes Description Pages 1 Reporting entity 8 2 Basis of preparation 8 3 Significant accounting policies 9 4 Financial risk management 9 5 Segment reporting 15 6 Acquisitions and disposal of ownership interest in jointly controlled entities 20 7 Revenues and cost of revenues 22 8 Administrative expenses 22 9 Impairment losses / (gain), net 23 10 Net finance costs 23 11 Taxation 24 12 Property and equipment 30 13 Intangible assets 31 14 Investments in debt securities 33 15 Banking loans and advances to customers 35 16 Cash and cash equivalents 37 17 Capital and reserves 38 18 Long-term bank borrowings 40 19 Bonds payable 41 20 Subordinated liabilities 41 21 Short-term bank borrowings 42 22 Deposits 42 23 Commitments and contingencies 43 24 Related party disclosures 45 25 Group enterprises 46 26 Significant events 55 27 Subsequent events 56 Appendix: Supplementary information


8

1 Reporting entity Doğuş Holding Anonim Şirketi (“Doğuş Holding” or “the Company”) was established in 1975 to invest in and coordinate the activities of companies operating in different industries, including banking and finance, automotive, construction, tourism, media, real estate and energy and is registered in Turkey.

Doğuş Holding is owned and managed by the members of Şahenk Family. As at 30 June 2011, Doğuş Holding has 73 (31 December 2010: 72) subsidiaries (“the Subsidiaries”), 41 (31 December 2010: 42) joint ventures (“the Joint Ventures”) and 8 (31 December 2010: 9) associates (“the Associates”) (referred to as “the Group” or “Doğuş Group” herein and after). The condensed consolidated interim financial statements of Doğuş Group as at and for the six-month period ended 30 June 2011 comprises Doğuş Holding and its subsidiaries and the Group’s interest in associates and jointly controlled entities. As explained in more detail in note 25, Doğuş Holding holds controlling interest directly or indirectly via other companies owned and/or exercising the control over the voting rights of the shares held by the members of Şahenk Family, in all its subsidiaries included in the Group.

The Group operates partnerships and has distribution, management and franchise agreements with internationally recognised brand names, such as Banco Bilbao Vizcaya Argentaria S.A. (“BBVA”), Volkswagen AG, Volkswagen Finance AG, Audi AG, Porsche AG, Bentley Motors Limited, Seat SA, Scania, Krone, Meiller Fahrzeug&Maschinenfabrik-GMBH&Co KG, Lamborghini S.p.A., Thermo King, Rixos, Neckerman Reisen, Hyatt International Ltd., HMS International Hotel GMBH, Emporio Armani, Guccio Gucci Spa, CNBC, Condé Nast New Markets Europe/Africa NC (Vogue), Loro Piana and Aldiana GMBH.

2 Basis of preparation (a) Statement of compliance

Doğuş Group entities operating in Turkey maintain their books of account and prepare their statutory financial statements in Turkish Lira (“TL”) in accordance with the Accounting Practice Regulations as promulgated by the Banking Regulatory and Supervision Agency (“BRSA”) applicable to Türkiye Garanti Bankası Anonim Şirketi (“Garanti Bank”), Turkish insurance legislation and accounting principles applicable to insurance business, and accounting principles per Turkish Uniform Chart of Accounts and per Capital Market Board of Turkey applicable to entities operating in other businesses.

Doğuş Group’s foreign entities maintain their books of account and prepare their statutory financial statements in accordance with the generally accepted accounting principles and the related legislation applicable in the countries they operate.

The accompanying condensed consolidated interim financial statements have been prepared in accordance with IAS 34, Interim Financial Reporting, and do not include all of the information required for full consolidated annual financial statements, and should be read in conjunction with the consolidated financial statements of the Group as at and for the year ended 31 December 2010.


9

2 Basis of preparation (continued) (b) Estimates

The preparation of interim financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates.

In preparing these condensed consolidated interim financial statements, the significant judgements made by management in applying the Group’s accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements as at and for the year ended 31 December 2010.

3 Significant accounting policies The accounting policies applied by the Group in these condensed consolidated interim financial statements are the same as those applied by the Group in its consolidated financial statements as at and for the year ended 31 December 2010.

(a) New standards and interpretations not yet adopted

A number of new standards, amendments to standards and interpretations are not yet effective for the six-month period ended 30 June 2011, and have not been applied in preparing these condensed consolidated interim financial statements. None of these will have an effect on the consolidated financial statements of the Group.

4 Financial risk management The Group has exposure to the following risks from its use of financial instruments:

• Liquidity risk • Market risk • Credit risk • Operational risk

The Group’s financial risk management objectives and policies are consistent with those disclosed in the consolidated financial statements as at and for the year ended 31 December 2010.


10

4 Financial risk management (continued) (a) Market risk

Currency risk for banking and finance segment

Garanti Bank and its subsidiaries are exposed to foreign currency risk through transactions in foreign currencies and through their investments in foreign operations.

Garanti Bank and its subsidiaries’ main foreign operations are in the Netherlands, Romania and Russia. The measurement currencies of these foreign operations are Euro and American Dollar (“USD”). As the currency in which Garanti Bank presents its consolidated financial statements is TL, its consolidated financial statements are affected by currency exchange rate fluctuations against TL.

Garanti Bank finances a significant portion of its net investment in foreign operations with borrowings in the same currencies as the relevant measurement currencies to mitigate its currency risk. Currency swaps are also used to match the currency of some of its other borrowings to the measurement currencies involved.

Garanti Bank and its subsidiaries’ transactional exposures give rise to foreign currency gains and losses that are recognised in profit or loss. These exposures comprise the monetary assets and monetary liabilities that are not denominated in the measurement currency of Garanti Bank and involved.

The short positions in the consolidated statement of financial position of Garanti Bank and its subsidiaries are hedged by currency swaps, forward contracts and other derivatives entered into to manage these currency exposures. In respect of monetary assets and liabilities in foreign currencies that are not economically hedged, Garanti Bank and its subsidiaries ensure that their net exposures are kept to an acceptable level by buying and selling foreign currencies at spot rates when considered appropriate.

Currency risk for corporate segments

The Group is exposed to currency risk on sales, purchases and borrowings that are denominated in a currency other than the respective functional currencies of Group entities, primarily USD, but also Euro, Swiss Francs (“CHF”), Sterling (“GBP”), Bulgarian Leva (“BVL”), Libyan Dinar (“LYD”), Japanese Yen (“JPY”), Croatian Kuna (“HRK”), Romanian Leu (“RON”) and Ukranian Hryvnia (“UAH”). The currencies in which these transactions primarily are denominated are TL, Euro and USD.

In respect of other monetary assets and liabilities denominated in foreign currencies, the Group ensures that its net exposure is kept to an acceptable level by buying or selling foreign currencies at spot rates when necessary to address short-term imbalances.

The Group is exposed to currency risk through the impact of rate changes on the translation of foreign currency denominated payables and bank borrowings from financial institutions. Such risk is monitored by the Board of Directors and limited through taking positions within approved limits as well as using derivative instruments where necessary.

To minimize risk arising from foreign currency denominated statement of financial position items, the Group sometimes utilises derivative instruments as well as keeping part of its idle cash in foreign currencies.


11

4 Financial risk management (continued) (a) Market risk (continued)

At 30 June 2011, the currency risk exposure of the Group in TL thousand equivalents was as follows: 30 June 2011

USD Euro Other

currencies Total Foreign currency monetary assets Investments in debt securities 807,389 431,421 43,797 1,282,607 Other non-current assets 49,708 32,868 51,435 134,011 Accounts receivable 505,805 84,654 130,591 721,050 Due from related parties -- -- 1,568 1,568 Other current assets 937,966 247,180 60,131 1,245,277 Banking loans and advances to banks and customers 6,915,649 3,707,499 370,041 10,993,189 Financial assets at fair value through profit or loss 15,515 100,315 139,651 255,481 Cash and cash equivalents 3,128,037 153,058 31,769 3,312,864 Total foreign currency monetary assets 12,360,069 4,756,995 828,983 17,946,047 Foreign currency monetary liabilities Long-term bank borrowings 3,285,410 1,320,108 -- 4,605,518 Subordinated liabilities 196,836 54,065 -- 250,901 Other non-current liabilities 81,177 3,632 34,308 119,117 Bonds payable 311,792 -- -- 311,792 Short-term bank borrowings 918,532 1,050,080 -- 1,968,612 Short-term portion of long-term bank borrowings 626,013 275,106 -- 901,119 Deposits 5,106,251 3,607,992 574,273 9,288,516 Obligations under repurchase agreements 595,689 162,324 36,854 794,867 Accounts payable 20,488 149,135 75,256 244,879 Due to related parties 586 -- 2,404 2,990 Other current liabilities 121,867 151,789 98,833 372,489 Total foreign currency monetary liabilities 11,264,641 6,774,231 821,928 18,860,800 Gross statement of financial position exposure 1,095,428 (2,017,236) 7,055 (914,753) Off balance sheet exposure (394,839) 1,097,352 138,343 840,856 Net exposure 700,589 (919,884) 145,398 (73,897)


12


At 31 December 2010, the currency risk exposure of the Group in TL thousand equivalents was as follows: 31 December 2010

USD Euro Other

currencies Total Foreign currency monetary assets Investments in debt securities 1,358,943 364,637 48,979 1,772,559 Other non-current assets 157,753 27,413 48,203 233,369 Accounts receivable 483,433 75,776 95,359 654,568 Due from related parties -- -- 1,135 1,135 Other current assets 522,827 631,731 87,017 1,241,575 Banking loans and advances to banks and customers 7,716,973 4,165,290 408,790 12,291,053 Financial assets at fair value through profit or loss 5,527 5,680 26,020 37,227 Cash and cash equivalents 580,351 359,939 22,178 962,468 Total foreign currency monetary assets 10,825,807 5,630,466 737,681 17,193,954 Foreign currency monetary liabilities Long-term bank borrowings 3,485,652 1,570,083 16,438 5,072,173 Subordinated liabilities 236,574 59,190 -- 295,764 Other non-current liabilities 241,599 4,906 2,431 248,936 Short-term bank borrowings 789,453 950,223 1,995 1,741,671 Short-term portion of long-term bank borrowings 646,250 234,078 -- 880,328 Deposits 5,806,373 4,187,769 503,577 10,497,719 Obligations under repurchase agreements 358,934 31,058 32,794 422,786 Accounts payable 29,057 299,988 83,254 412,299 Due to related parties -- -- 3,221 3,221 Other current liabilities 115,378 61,938 103,218 280,534 Total foreign currency monetary liabilities 11,709,270 7,399,233 746,928 19,855,431 Gross statement of financial position exposure (883,463) (1,768,767) (9,247) (2,661,477) Off balance sheet exposure (1,413,390) 546,782 113,007 (753,601) Net exposure (2,296,853) (1,221,985) 103,760 (3,415,078)

For the purposes of the evaluation of the table above, the figures represent the TL equivalent of the related hard currencies.

Sensitivity analysis:

A 10 percent weakening of TL against the above currencies at 30 June 2011 would have increased (decreased) profit or loss before tax and equity by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remained constant. The analysis is performed on the same basis for 31 December 2010.

30 June 2011 Equity Profit or loss USD (2,815) 72,874 Euro (1,504) (90,484) Others (153) 14,693 31 December 2010 USD (9,080) (220,605) Euro (2,436) (119,763) Others (327) 10,703


13


A 10 percent strengthening of TL against the above currencies at 30 June 2011 would have had the equal but the opposite effect on the above currencies to the amounts shown above, on the basis that all other variables remain constant.

Interest rate risk for banking and finance segment

The market risk arising from trading transactions is calculated via Value at Risk (“VaR”) by Garanti Bank. In addition to this, stress tests and scenario analysis are performed. The interest rate risk of the statement of financial position is monitored with methods such as static duration, gap and sensitivity analysis.

Internal limits are set as well as legal limits, in order to restrict market risk; value at risk limits for trading portfolio, position limits set for trading desks, single transaction limits set for traders and stop-loss limits. Approval, update, monitoring, override and warning procedures of these limits are put into practice and changed with the approval of the Board of Directors of Garanti Bank.

As a part of the duration-gap analysis, Garanti Bank-only sensitivity analysis for a +/-1 point change in the present values of interest sensitive statement of financial position items excluding trading and available-for-sale portfolios and for a +/-5 point change in the foreign currency exchange rates used for foreign currency position and derivative transactions is provided in the table below:

30 June 2011 31 December 2010 Sensitivity analysis for TL interest rates:

Stress applied Change in

portfolio value Change in

portfolio value (+) 1 % (9,793) (37,608) (-) 1 % 9,790 38,627

Sensitivity analysis for FC interest rates:

Stress applied Change in

portfolio value Change in

portfolio value (+) 1 % (70,196) (69,815) (-) 1 % 77,276 77,117

Sensitivity analysis for FX rates:

Stress applied Change in foreign

exchange result Change in foreign

exchange result (+) 5 % 4,668 (3,035) (-) 5 % 1,518 9,378

There are internal limits set to manage interest rate risk for non-trading portfolios approved by the Board of Directors. The structural interest rate risk limit is calculated based on the present value change in interest rate sensitive assets and liabilities, except trading portfolio, resulting from stress test applied as predefined point increase for interest rates. The single transaction limits are defined for asset-liability management dealers.


14


Interest rate risk for banking and finance segment (continued)

The consolidated value at market risks as at 30 June 2011 and 31 December 2010 are calculated as per the statutory consolidated financial statements of Garanti Bank prepared for BRSA reporting purposes within the scope of “Regulation on Measurement and Assessment of Capital Adequacy Ratios of Banks” published in Official Gazette no.26333 dated 1 November 2006, are as follows: 30 June 2011 31 December 2010 Average Highest Lowest Average Highest Lowest Interest rate risk 873,428 969,014 711,156 1,115,381 1,223,507 977,637 Common share risk 51,470 69,461 25,644 66,874 74,878 58,730 Currency risk 291,952 374,701 213,499 206,543 269,571 142,162 Option risk 139,423 175,942 100,670 115,609 149,499 68,664 Commodity risk 4,686 14,059 -- -- -- -- Total value at risk 1,360,959 1,603,177 1,050,969 1,504,407 1,717,455 1,247,193

Interest rate risk for corporate segments

Cash flow sensitivity analysis for variable rate financial instruments for segments other than banking and finance segment:

A change of 100 basis points in interest rates at the reporting date would have increased (decreased) equity and profit or loss before tax by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency rates, remain constant. This analysis is performed on the same basis for 31 December 2010.

Profit or loss Equity 100 bp 100 bp 30 June 2011 Increase Decrease Increase Decrease Variable rate financial instruments 11,613 (11,613) 2,476 (2,660) Cash flow sensitivity (net) 11,613 (11,613) 2,476 (2,660) Profit or loss Equity 100 bp 100 bp 31 December 2010 Increase Decrease Increase Decrease Variable rate financial instruments 8,024 (8,024) 3,794 (3,994) Cash flow sensitivity (net) 8,024 (8,024) 3,794 (3,994)


15

5 Segment Reporting The Group has five reportable segments, as described below, which are largely organised and managed separately according to nature of products and services provided, distribution channels and profile of customers.

Almost each entity included in the Group operates in one specific industry. Accordingly, all the financial statement components of an entity concerned are considered related only to its specific industry.

The Group’s main business segments are as follows:

Banking and finance: Entities operating in the banking and finance segment are mainly involved in retail banking, insurance, leasing and factoring businesses.

Construction: Entities operating in the construction segment are mainly involved in the constructions of buildings, infrastructure and related civil engineering businesses.

Automotive: Entities operating in the automotive segment are exclusively involved in the importation, distribution and retailing of Volkswagen, Audi, Seat, Porsche, Bentley, Scania, Lamborghini, Krone and Meiller brand motor vehicles and spare parts and after sales services in Turkey.

Tourism: Entities operating in the tourism segment are involved in hotel and marina investments, hotel management, ticket sales, hotel reservation, and tour/conference organisation services.

Others: Entities operating in other operations segment are mainly involved in media, real estate, energy and several service businesses. Doğuş Holding is included in the other industrial segment as well.


16

5 Segment reporting (continued) 5.1 Business segments

30 June 2011 Banking and

finance Construction Automotive Tourism Others Total Revenues Total external revenue 1,745,620 304,763 2,591,299 92,593 178,888 4,913,163 Intersegment revenue 1,810 26,804 4,210 4,729 19,348 56,901 Net segment revenue 1,743,810 277,959 2,587,089 87,864 159,540 4,856,262 Gross profit 881,713 30,589 318,083 17,185 25,805 1,273,375 Result from operating activities 651,169 17,312 130,799 (16,573) 1,993,350 2,776,057 Interest income -- 1,884 1,584 727 14,040 18,235 Interest expense -- (2,930) (22,818) (19,953) (52,814) (98,515) Share of profit / (loss) of equity accounted investees 1,784 -- (2,347) -- (2,300) (2,863) Income tax (expense) / benefit (133,486) 2,050 (22,719) 1,959 (146,354) (298,550) Profit / (loss) for the period attributable to the owners of the Company 509,545 13,544 53,263 (61,735) 1,732,637 2,247,254 30 June 2011 Other information Segment assets 36,526,102 1,318,805 1,700,251 1,593,872 6,002,033 47,141,063 Investments in equity securities 4,791 -- 36,153 -- 1,775 42,719 Total assets 36,530,893 1,318,805 1,736,404 1,593,872 6,003,808 47,183,782 Segment liabilities 31,925,049 1,021,951 1,240,521 385,507 2,713,533 37,286,561 Total liabilities 31,925,049 1,021,951 1,240,521 385,507 2,713,533 37,286,561 30 June 2011 Capital expenditure 40,163 24,582 33,801 80,084 312,108 490,738 Depreciation 30,657 39,407 14,282 26,354 16,565 127,265 Non-cash expenses other than depreciation 93,103 8,252 41,997 13,090 101,938 258,380


17

5 Segment reporting (continued) 5.1 Business segments (continued)

30 June 2010 Banking and

finance Construction Automotive Tourism Others Total Revenues Total external revenue 1,957,499 309,643 1,524,905 82,965 158,482 4,033,494 Intersegment revenue 2,180 7,011 452 5,136 11,300 26,079 Net segment revenue 1,955,319 302,632 1,524,453 77,829 147,182 4,007,415 Gross profit / (loss) 1,127,720 12,091 225,579 (137) 22,680 1,387,933 Result from operating activities 743,868 5,303 88,498 (25,566) (110,631) 701,472 Interest income 723 2,866 2,566 268 8,436 14,859 Interest expense (687) (2,620) (24,052) (11,827) (41,348) (80,534) Share of profit of equity accounted investees 2,194 -- 15,714 -- 263 18,171 Income tax (expense) / income (152,928) (4,174) (12,506) (3,736) 40,739 (132,605) Profit / (loss) for the period attributable to owners of the Company 610,744 1,914 51,617 (46,737) (118,919) 498,619 31 December 2010 Other information Segment assets 41,022,748 1,212,757 1,546,512 1,494,482 3,936,287 49,212,786 Investments in equity securities 24,131 -- 39,861 -- 9,152 73,144 Total assets 41,046,879 1,212,757 1,586,373 1,494,482 3,945,439 49,285,930 Segment liabilities 35,843,896 950,070 1,157,396 434,889 2,918,924 41,305,175 Total liabilities 35,843,896 950,070 1,157,396 434,889 2,918,924 41,305,175 30 June 2010 Capital expenditure 23,792 56,756 12,689 327,758 105,256 526,251 Depreciation 27,800 13,172 9,850 27,632 18,397 96,851 Non-cash expenses other than depreciation 176,292 19,458 17,277 14,542 29,699 257,268


18

5 Segment reporting (continued) 5.2 Interests in joint ventures

Joint ventures are proportionately consolidated in the accompanying condensed consolidated interim financial statements.

As at 30 June 2011 and 31 December 2010, the Group's share in the assets and liabilities of the joint ventures using the proportionate consolidation method is as follows:

30 June 2011

Banking and finance

Construction

Automotive

Tourism

Other

Total assets 36,530,893

508,275

475,493

36,150

411,511 Total liabilities 31,925,049

411,737

375,230

18,047

248,161

31 December 2010

Banking and finance

Construction

Automotive

Tourism

Other

Total assets 41,046,879

468,473

499,792

28,913

296,793 Total liabilities 35,843,896

326,928

398,718

12,805

150,735

For the six-month period ended 30 June, the Groups’ share in the profit or loss of the joint ventures using the proportionate consolidation method is as follows: 2011

Banking and finance

Construction

Automotive

Tourism

Other

Profit/(loss) for the period

509,545

15,502

(1,449)

(369)

(2,966)

2010

Banking and finance

Construction

Automotive

Tourism

Other

Profit/(loss) for the period

610,744

(1,323)

1,575

(3,910)

(15,511)


19

5 Segment reporting (continued) 5.3 Non-cash (income) / expenses other than depreciation

Non-cash (income) / expenses other than depreciation for the six-month period ended 30 June 2011 were as follows:

Banking and

finance Construction Automotive Tourism Others Total Provision for doubtful receivables -- -- -- 171 129,846 130,017 Accrued interest and other accruals 23,278 6,997 14,840 11,693 20,015 76,823 Provision for loans 81,744 -- -- -- -- 81,744 Provision for general banking risks 27,216 -- -- -- -- 27,216 Provision for employee severance indemnity 18,700 1,197 134 1,162 4,700 25,893 Warranty provision -- -- 19,205 -- -- 19,205 Amortisation of other intangible assets 1,728 58 8,974 351 1,270 12,381 Insurance technical reserves and provisions 5,347 -- -- -- -- 5,347 Recoveries of loan losses (74,977) -- -- -- -- (74,977) Reversal of impairment in tangible asset (4,335) -- -- -- -- (4,335) Fair value gain on trading property transferred to property and equipment -- -- -- -- (51,830) (51,830) Recoveries of doubtful receivables -- -- (1,156) (215) (310) (1,681) Reversal of employee severance indemnity (45) -- -- (72) -- (117) Others 14,447 -- -- -- (1,753) 12,694 Total 93,103 8,252 41,997 13,090 101,938 258,380

Non-cash (income) / expenses other than depreciation for the six-month period ended 30 June 2010 were as follows:

Banking and

finance Construction Automotive Tourism Others Total Accrued interest and other accruals 178,309 19,352 (10,547) 14,046 24,464 225,624 Provision for loans 112,442 -- -- -- -- 112,442 Warranty provision -- -- 14,917 -- -- 14,917 Amortisation of other intangible assets 1,478 -- 12,073 168 933 14,652 Insurance technical reserves and provisions 4,452 -- -- -- -- 4,452 Provision for employee severance indemnity 826 106 575 648 2,173 4,328 Provision for doubtful receivables 412 -- 259 72 564 1,307 Recoveries of loan losses (122,924) -- -- -- -- (122,924) Reversal of impairment in tangible assets (1,195) -- -- -- -- (1,195) Reversal of employee severance indemnity -- -- -- (230) (92) (322) Recoveries of doubtful receivables -- -- -- (162) (61) (223) Others 2,492 -- -- -- 1,718 4,210 Total 176,292 19,458 17,277 14,542 29,699 257,268


20

6 Acquisitions and disposal of ownership interests in jointly controlled entities 6.1 Acquisition of additional interests in Doğuş Gayrimenkul Yatırım Ortaklığı Anonim Şirketi

(“Doğuş GYO”)

According to share purchase agreement dated 12 November 2010, the Group decided to purchase shares with nominal value of TL 23,914 thousand in Doğuş-GE Gayrimenkul Yatırım Ortaklığı Anonim Şirketi (“Doğuş GE”), which was previously a proportionately consolidated joint venture with a proportion of effective interest of 30.07 percent held by the Group, representing 25.5 percent of the share capital from General Electric Capital Corporation for a consideration of USD 27,885 thousand (equivalent to TL 42,876 thousand). On 3 January 2011, the share transfer was finalised with a closing agreement and the Group obtained control by acquiring the additional 25.5 percent of shares in Doğuş GE.

Subsequent to this transaction, in February 2011, the Group has purchased further additional shares from the publicly traded shares in İstanbul Stock Exchange with a total nominal value of TL 29,577 thousand representing 31.54 percent of the share capital of Doğuş GE for a total consideration of TL 55,010 thousand. On 21 March 2011, Doğuş GE has changed its legal name as “Doğuş Gayrimenkul Yatırım Ortaklığı Anonim Şirketi”.

The following summarises the major classes of consideration transferred and the recognised amounts of identifiable assets acquired and liabilities assumed at the acquisition date:

Consideration transferred Cash paid 97,886 Total consideration 97,886 Identifiable assets acquired and liabilities assumed (Representing the additional interest acquired) Investment property 6,505 Property and equipment 100,514 Intangible assets 7 Other non-current assets 332 Accounts receivables 10 Other current assets 1,146 Cash and cash equivalents 10,560 Accounts payable (618) Other current liabilities (326) Total net identifiable assets 118,130


21

6 Acquisitions and disposal of ownership interests in jointly controlled entities (continued)

6.1 Acquisition of additional interests in Doğuş Gayrimenkul Yatırım Ortaklığı Anonim Şirketi (“Doğuş GYO”) (continued)

Bargain purchase gain

Bargain purchase gain has been recognised as a result of the acquisition as follows:

Total consideration transferred 97,886 Non-controlling interest based on their proportionate interest in the recognised amounts of the assets and liabilities of the acquiree 18,291 Less: Value of net identifiable assets (118,130) Bargain purchase gain (1,953) Cash consideration transferred 97,886 Cash and cash equivalents acquired (10,560) Net cash outflow arising on acquisition 87,326

The bargain purchase gain arising from the difference between consideration transferred and the recognised amounts of identifiable assets acquired and liabilities assumed at the acquisition date is recognised under other operating income / (expense), net in profit or loss.

6.2 Partial disposal of interest in Garanti Bank On 1 November 2010, Doğuş Holding and BBVA signed a share purchase agreement. On 22 March 2011, according to this agreement, 26,418,840,000 shares in Garanti Bank representing 6.29 percent of the share capital of Garanti Bank owned by Doğuş Holding has been transferred to BBVA for a consideration of USD 2,067 million including USD 5 million late payment interest (equivalent to TL 3,243,467 thousand). The approvals of BRSA, Capital Market Board, Republic of Turkey Prime Ministry Undersecretariat of Treasury, The Central Bank of Spain, The Dutch Central Bank, The National Bank of Romania and European Commission have been obtained between the period of 1 November 2010 and 22 March 2011.

In addition, on 1 November 2010, Doguş Holding and BBVA signed a shareholders’ agreement which was effective from the date of completion of aforementioned share purchase agreement. This new shareholders’ agreement has replaced the previously signed shareholders’ agreement between GE Araştırma Müşavirlik Anonim Şirketi and Doğuş Holding dated 22 December 2005.

Gain arising from this share sale transaction amounting to TL 2,163,189 thousand (after partial disposal of goodwill previously recognised as a result of acquisition of 4.65 percent shares from GE Araştırma Müşavirlik Anonim Şirketi in Garanti Bank in December 2007) is recognised under other operating income / (expense), net in profit or loss in the accompanying condensed consolidated financial statements.

Following this share sale transaction, the proportion of effective interest of Doğuş Holding and its subsidiaries in Garanti Bank decreased to 23.95 percent from 30.24 percent. Items in the consolidated statement of comprehensive income of Garanti Bank has been proportionately consolidated with the previous effective interest of 30.24 percent till this share sale date in the accompanying condensed consolidated statement of comprehensive income for the six-month period ended 30 June 2011.


22

7 Revenues and cost of revenues For the six-month and three-month period ended 30 June, revenues and cost of revenues of banking and finance segment and other corporate segments were as follows:


30 June 2011


30 June 2011


30 June 2010


30 June 2010 Banking and finance segment Banking operations: Interest income 1,373,492 629,506 1,583,161 767,074 Interest expense (739,868) (341,425) (731,071) (370,883) Fees and commission income 340,235 146,085 343,936 169,443 Fees and commission expense (99,608) (47,056) (91,670) (46,077) Net operating income 874,251 387,110 1,104,356 519,557 Insurance operations: Technical gain 30,083 13,967 28,222 14,434 Technical loss (22,621) (3,110) (4,858) (2,388) Net technical gain 7,462 10,857 23,364 12,046 Gross profit for banking and finance segment 881,713 397,967 1,127,720 531,603 Other corporate segments Net revenues 3,112,452 1,691,506 2,052,096 1,200,594 Cost of revenues (2,720,790) (1,462,739) (1,791,883) (1,036,805) Gross profit for other corporate segments 391,662 228,767 260,213 163,789 Total gross profit 1,273,375 626,734 1,387,933 695,392

8 Administrative expenses For the six-month and three-month period ended 30 June, general and administrative expenses comprised the following:


30 June 2011


30 June 2011


30 June 2010


30 June 2010 Personnel expenses 320,706 136,588 335,917 162,192 Depreciation and amortisation 69,327 33,205 68,454 26,970 Rent expenses 31,370 14,773 26,623 13,731 Provision for employee severance indemnity 25,893 7,658 4,328 1,578 Taxes and duties other than taxes on income 22,462 10,771 25,235 13,643 Telecommunication expenses 18,364 8,538 22,258 10,245 Electronic data processing expenses 10,920 5,497 11,942 6,691 Insurance expenses 10,765 4,763 10,297 5,244 Utility expenses 10,229 4,683 10,513 3,957 Gasoline expenses 3,908 2,074 4,110 2,500 Research and development expenses 2,686 1,656 4,391 2,447 Stationery expenses 2,599 1,166 2,666 1,393 Others 86,202 43,027 48,650 18,560 615,431 274,399 575,384 269,151


23

9 Impairment losses / (gain), net For the six-month and three-month period ended 30 June, impairment losses / (gain), net comprised the following:


30 June 2011


30 June 2011


30 June 2010


30 June 2010 Provision for doubtful receivables 130,017 9,034 1,307 841 Provision for banking loans 81,744 30,373 112,442 40,926 Provision for general banking risks 27,216 -- -- -- Recoveries of provision for banking loans (74,977) (9,159) (122,924) (57,006) Reversal of impairment in tangible assets (4,335) (614) (1,195) (320) Recoveries of doubtful receivables (1,681) (525) (223) (85) Other provisions / (recoveries) 12,694 3,258 4,210 (4,721) 170,678 32,367 (6,383) (20,365)

10 Net finance costs For the six-month and three-month period ended 30 June, net finance costs comprised the following:

Recognised in profit or loss


30 June 2011


30 June 2011


30 June 2010


30 June 2010 Finance income Foreign exchange gains 302,310 242,053 262,904 88,458 Interest income on bank deposits 16,940 14,151 9,979 5,345 Interest income on trading securities 627 205 1,436 396 Other interest and similar items 668 325 3,444 (420) Total finance income 320,545 256,734 277,763 93,779 Finance expense Foreign exchange losses (429,257) (258,286) (263,157) (168,783) Interest expense on borrowings (68,081) (39,678) (59,677) (32,824) Other interest and similar items (30,434) (19,134) (20,857) (11,001) Total finance expense (527,772) (317,098) (343,691) (212,608) Net finance costs recognised in profit or loss (207,227) (60,364) (65,928) (118,829)

Interest income and interest expense recognised in profit or loss amounts included in finance income and finance expense relate only to the segments other than banking and finance since such amounts are reflected in “revenues” and “cost of revenues” in the results of the “banking and finance segment”.


24

10 Net finance costs (continued)

Recognised in other comprehensive income


30 June 2011


30 June 2011


30 June 2010


30 June 2010 Change in fair value of

available- for-sale financial assets 2,321 107 4,630 (28)

Change in translation reserve 38,386 24,551 (15,926) (16,653) Effective portion of changes

in fair value of cash flow hedges 911 4 (2,632) (1,563)

Income tax on other comprehensive income (464) (21) 926 (6)

Finance income / (costs) recognised in other comprehensive income, net of tax 41,154 24,641 (13,002) (18,250)

Attributable to: Owners of the Company 39,663 23,610 (11,999) (17,107) Non-controlling interests 1,491 1,031 (1,003) (1,143) Finance income / (costs)

recognised in other comprehensive income, net of tax 41,154 24,641 (13,002) (18,250)

Interest income and interest expense recognised in other comprehensive income included in finance income and finance expense relate only to the segments other than banking and finance.

11 Taxation In Turkey, corporate income tax is levied at the rate of 20 percent (31 December 2010: 20 percent) on the statutory corporate income tax base, which is determined by modifying accounting income for certain exclusions and allowances for tax purposes. According to the Corporate Tax Law, 75 percent of the capital gains arising from the sale of tangible assets and investments owned for at least two years are exempted from corporate tax on the condition that such gains are reflected in the equity until the end of the fifth year following the sale. The remaining 25 percent of such capital gains are subject to corporate tax.

There is also a withholding tax on the dividends paid and is accrued only at the time of such payments. The withholding tax rate on the dividend payments other than the ones paid to the non-resident institutions generating income in Turkey through their operations or permanent representatives and the resident institutions is 15 percent. In applying the withholding tax rates on dividend payments to the non-resident institutions and the individuals, the withholding tax rates covered in the related Double Tax Treaty Agreements are taken into account. Appropriation of retained earnings to capital is not considered as profit distribution and therefore is not subject to withholding tax.

The transfer pricing law is covered under Article 13 “disguised profit distribution via transfer pricing” of the Corporate Tax Law. The General Communiqué on disguised profit distribution via transfer pricing dated 18 November 2007 sets details about implementation. If a tax payer enters into transactions regarding sale or purchase of goods and services with related parties, where the prices are not set in accordance with arm’s length basis, then related profits are considered to be distributed in a disguised manner through transfer pricing. Such disguised profit distributions through transfer pricing are not accepted as a tax deductable for corporate income tax purposes.


25

11 Taxation (continued) In Turkey, the tax legislation does not permit a parent company and its subsidiaries to file a consolidated tax return. Therefore, provision for taxes shown in the consolidated financial statements reflects the total amount of taxes calculated on each entity that are included in the consolidation.

Under the Turkish taxation system, tax losses can be carried forward to be offset against future taxable income for up to five years. Tax losses cannot be carried back.

In Turkey, there is no procedure for a final and definitive agreement on tax assessments. Companies file their tax returns within four months following the close of the accounting year to which they relate. Tax returns are open for five years from the beginning of the year that follows the date of filing during which time the tax authorities have the right to audit tax returns, and the related accounting records on which they are based, and may issue re-assessments based on their findings.

Investment allowance

The Temporary Article 69 added to the Income Tax Law no.193 with the Law no.5479, which became effective starting from 1 January 2006, upon being promulgated in the Official Gazette no.26133 dated 8 April 2006, stating that taxpayers can deduct the amount of the investment allowance exemption which they are entitled to according to legislative provisions effective at 31 December 2005 (including rulings on the tax rate) only from the taxable income of 2006, 2007 and 2008. Accordingly, the investment incentive allowance practice was ended as at 1 January 2006. At this perspective, an investment allowance which cannot be deducted partially or fully in three years time was not allowed to be carried forward to the following years and became unavailable as at 31 December 2008. On the other side, the Article 19 of the Income Tax Law was annulled and the investment allowance practice was ended as at 1 January 2006 with effectiveness of the Article 2 and the Article 15 of the Law no.5479 and the investment allowance rights on the investment expenditures incurred during the period of 1 January 2006 and 8 April 2006 became unavailable.

However, on 15 October 2009, the Turkish Constitutional Court decided to cancel the clause no.2 of the Article 15 of the Law no.5479 and the expressions of “2006, 2007, 2008” in the Temporary Article 69 related to investment allowance mentioned above that enables effectiveness of the Law as at 1 January 2006 rather than 8 April 2006, since it is against the Constitution. Accordingly, the time limitations for the investment allowances carried forward that were entitled to prior to mentioned date and the limitations related with the investment expenditures incurred between the issuance date of the Law promulgated and 1 January 2006 were eliminated. According to the decision of Turkish Constitutional Court, cancellation related with the investment allowance became effective with promulgation of the decision on the Official Gazette and the decision of the Turkish Constitutional Court was promulgated in the Official Gazette no.27456 dated 8 January 2010.

According to the decision mentioned above, the investment allowances carried forward to the year 2006 due to the lack of taxable income and the investment allowances earned through the investments started before 1 January 2006 and continued after that date constituting economic and technical integrity will be used not only in 2006, 2007 and 2008, but also in the following years. In addition, 40 percent of investment expenditures that are realised between 1 January 2006 and 8 April 2006, within the context of the Article 19 of the Income Tax Law will have the right for investment allowance exemption. New treatment on investment incentive was introduced by the Law no. 6009 “Law on the Amendment of the Income Tax Law and Certain Laws and Decree Laws” which was promulgated in the Official Gazette on 1 August 2010.


26

11 Taxation (continued) Investment allowance (continued)

The Article 5 of the Law regulates the amount of investment incentive to be benefited in calculating the corporate tax base after the cancellation of the clause no.2 of the Article of the Law no. 5479. According to the Law no. 6009, the taxpayers are allowed to benefit from the investment incentive stemming from the periods before the promulgation of the Law no. 5479 up to 25 percent of the taxable income of the respective tax period.

Tax applications for foreign branches of Garanti Bank

Turkish Republic of Northern Cyprus

According to the Corporate Tax Law of the Turkish Republic of Northern Cyprus no.41/1976 as amended, the corporate earnings (including foreign corporations) are subject to a 10 percent (31 December 2010: 10 percent) corporate tax and 15 percent (31 December 2010: 15 percent) income tax. This tax is calculated based on the income that the taxpayers earn in an accounting period. Tax base is determined by modifying accounting income for certain exclusions and allowances for tax purposes. The corporations cannot benefit from the rights of offsetting losses, investment incentives and amortisation unless they prepare and have certified their statements of financial position, statements of comprehensive income and accounting records used for tax calculations by an auditor authorised by the Ministry of Finance. In cases where it is revealed that the earnings of a corporation were not subject to taxation in prior years or the tax paid on such earnings are understated, additional taxes can be charged in the next 12 years following the related taxation period. The corporate tax returns are filed in the tax administration office in April following the end of the accounting year to which they relate. The corporate taxes are paid in two equal instalments in May and October.

Malta

The corporate earnings are subjected to a 35 percent (31 December 2010: 35 percent) corporate tax. This rate is determined by modifying accounting income for certain exclusions and allowances for tax purposes. The earnings of the foreign corporations’ branches in Malta are also subject to the same tax rate that the resident corporations in Malta are subject to. The earnings of such branches that are transferred to their head offices are not subject to an additional tax. The prepaid taxes are paid in April, August and December in the related years. The prepayments can be deducted from the annual corporate tax calculated for the whole year earnings. The excess part of the corporate tax that is not covered by such prepayments is paid to the tax office in September.

Luxembourg

The corporate earnings are subject to a 21 percent (31 December 2010: 21 percent) corporate tax. This rate is determined by modifying accounting income for certain exclusions and allowances for tax purposes. An additional 4 percent of the calculated corporate tax is paid as a contribution for unemployment insurance fund. 3 percent of the taxable income is paid as municipality tax addition to corporate tax, the municipalities have right to increase this rate up to 225 percent. The municipality commerce tax, which is currently 6.75 percent of the taxable income, is also paid every year. The tax returns are examined by the authorized bodies, and in case of detected mistakes, the amount of the taxes to be paid are revised. The amounts and the payment dates of prepaid taxes are determined and declared by the tax office at the beginning of the taxation period. The corporations, whose head offices are outside Luxembourg, are allowed to transfer the rest of their net income after tax following the allocation of 5 percent of it for legal reserves, to their head offices.


27

11 Taxation (continued) Tax applications for foreign subsidiaries and joint ventures of the Group

The Netherlands

In the Netherlands, corporate income tax is levied at the rate of 20 percent (31 December 2010: 20 percent) for tax profits up to Euro 200,000 and 25 percent (31 December 2010: 25.5 percent) for the excess part over this amount on the worldwide income of resident companies, which is determined by modifying accounting income for certain exclusions and allowances for tax purposes for the related year. A unilateral decree for the avoidance of double taxation provides relief for resident companies from Dutch tax on income, such as foreign business profits derived through a permanent establishment abroad, if no tax treaty applies. There is an additional dividend tax of 5 percent computed only on the amounts of dividend distribution at the time of such payments. Under the Dutch taxation system, tax losses can be carried forward for nine years to offset against future taxable income. Tax losses can be carried back to one prior year. Companies must file their tax returns within nine months following the end of the tax year to which they relate, unless the company applies for an extension (normally an additional nine months). Tax returns are open for five years from the date of final assessment of the tax return during which time the tax authorities have the right to audit tax returns, and the related accounting records on which they are based, and may issue re-assessments based on their findings. The corporate income tax has been calculated using the nominal tax rate of 25 percent (31 December 2010: 25.5 percent) over the Dutch taxable income and 30 percent (31 December 2010: 30 percent) over the local taxable income of Germany branch of Garanti Bank.

Romania

The applicable corporate tax rate in Romania is 16 percent (31 December 2010: 16 percent). The taxation system in Romania is continuously developing and is subject to varying interpretations and constant changes, which may become rarely retroactive. In Romania, tax periods remain open for tax audits for five years. Tax losses can be carried forward to offset against future taxable income for seven years.

Russia

The applicable corporate tax rate for Garanti Bank’s consolidated subsidiary in Russia is 20 percent (2 percent federal and 18 percent regional) (31 December 2010: 20 percent). The taxation system in the Russian Federation is relatively new and is characterised by frequent changes in legislation, official pronouncements and court decisions, which are often unclear, contradictory and subject to varying interpretation by different tax authorities. Taxes are subject to review and investigation by a number of authorities, which have the authority to impose severe fines, penalties and interest charges. A tax year remains open for review by the tax authorities during the three subsequent calendar years; however, under certain circumstances a tax year may remain open for a longer period.

Switzerland

As at 30 June 2011, enacted corporation tax rate is 22.8 percent (31 December 2010: 22.8 percent) for the subsidiaries registered in Switzerland according to local tax law.


28

11 Taxation (continued) 11.1 Income tax expense recognised in profit or loss

Income tax expense for the six-month period ended 30 June comprised the following items:


30 June 2011


30 June 2011


30 June 2010


30 June 2010 Current corporation and income taxes 139,784 61,822 197,185 93,398 Deferred tax charge / (credit) 158,766 19,073 (64,580) (45,078) Total income tax expense 298,550 80,895 132,605 48,320

11.2 Taxes payable on income

In accordance with the tax legislation in Turkey, tax payments that are made in advance during the year are being deducted from the total final tax liability of the fiscal year. Accordingly, the taxation charge on income is not equal to the final tax liability appearing on the consolidated statement of financial position.

Taxes payable on income as at 30 June 2011 and 31 December 2010 comprised the following:

30 June 2011 31 December 2010 Taxes on income 298,550 321,423 Add: Taxes carried forward 99,279 70,606 Add: Current tax recognised in other comprehensive income (11,142)

(4,563)

Add: Deferred taxes on taxable temporary differences (158,766)

35,855

Less: Corporation taxes paid in advance (159,633) (324,042) Less: Change in joint venture rate in a proportionately consolidated joint venture due to partial disposal (6,099)

-- Taxes payable on income 62,189 99,279

11.3 Deferred tax assets and liabilities

Deferred tax is provided in respect of taxable temporary differences arising between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes, except for the differences relating to goodwill not deductible for tax purposes and the initial recognition of assets and liabilities which affect neither accounting nor taxable profit.


29

11 Taxation (continued) 11.3 Deferred tax assets and liabilities (continued)

Unrecognised deferred tax assets and liabilities

As at 30 June 2011, deferred tax assets amounting to TL 160,536 thousand (31 December 2010: TL 123,565 thousand) have not been recognised with respect to the statutory tax losses carried forward and deductible temporary differences amounting to TL 116,632 thousand and TL 43,904 thousand, respectively (31 December 2010: TL 73,954 thousand and TL 49,611 thousand, respectively). Such losses carried forward expire until 2016. Deferred tax assets have not been recognised in respect of these items because it is not probable that future taxable profit will be available against which the Group can utilise the benefits therefrom.

Recognised deferred tax asset and liabilities

Deferred tax assets and deferred tax liabilities at 30 June 2011 and 31 December 2010 were attributable to the items detailed in the table below:

30 June 2011 31 December 2010 Assets Liabilities Assets Liabilities Revaluation on land and buildings -- (73,864) -- (75,085) Provisions 43,041 -- 42,084 -- Employee severance indemnity and short term employee benefits 18,088 -- 18,542 -- Effect of percentage of completion method 12,279 (36,417) 22,895 (37,624) Valuation difference of financial assets and liabilities -- (6,460) 21,563 -- Investment incentives 824 -- 3,616 -- Pro-rata basis depreciation expense -- (4,534) -- (8,342) Fair value gain from investment property -- (45,330) -- (45,330) Other temporary differences 44,175 (45,022) 42,195 (38,242) Subtotal 118,407 (211,627) 150,895 (204,623) Tax losses carried forward 48,195 -- 135,522 -- Total deferred tax assets/(liabilities) 166,602 (211,627) 286,417 (204,623)

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when the deferred taxes relate to the same fiscal authority.

The following amounts as at 30 June 2011 and 31 December 2010, determined after appropriate offsetting, are shown in the condensed consolidated interim statement of financial position: 30 June 2011 31 December 2010 Gross Offsetting Net Gross Offsetting Net Deferred tax assets 166,602 (35,565) 131,037 286,417 (48,734) 237,683 Deferred tax liabilities (211,627) 35,565 (176,062) (204,623) 48,734 (155,889) Deferred tax asset / (liability), net (45,025) -- (45,025) 81,794 -- 81,794


30

12 Property and equipment At 30 June 2011 and 31 December 2010, property and equipment comprised the following: Cost 30 June 2011 31 December 2010 Land and buildings 2,787,476 2,863,726 Furniture and equipment 995,942 1,154,821 Leasehold improvements 404,337 416,184 Motor vehicles 246,149 232,057 Construction in progress 535,859 299,035 Others 7,462 7,446 Total cost 4,977,225 4,973,269 Less: Accumulated depreciation Buildings 564,702 644,689 Furniture and equipment 609,643 740,237 Leasehold improvements 146,785 141,577 Motor vehicles 67,869 60,997 Others 6,741 6,736 Total accumulated depreciation 1,395,740 1,594,236 Net book value 3,581,485 3,379,033 Less: Impairment in value (18,118) (68,745) Net carrying value 3,563,367 3,310,288

12.1 Acquisitions and disposals During the six-month period ended 30 June 2011, the Group acquired property and equipment with a cost of TL 377,808 thousand (30 June 2010: TL 523,857 thousand), excluding property and equipment acquired through business combination (see note 6.1) with a cost of TL 100,514 thousand (30 June 2010: TL 80,227 thousand). Property and equipment with a carrying amount of TL 26,422 thousand were disposed of during the six-month period ended 30 June 2011 (30 June 2010: TL 12,538 thousand), resulting in a gain on disposal of TL 5,020 thousand (30 June 2010: TL 5,706 thousand), which is included in other operating income / (expense), net. During the six-month period ended 30 June 2011, property and equipment with a total net carrying value of TL 106,585 thousand were disposed as a result of partial disposal of a proportionately consolidated joint venture. During the six-month period ended 30 June 2011, hotel building of one of subsidiary in the tourism segment with a total net carrying value of TL 45,760 thousand were transferred to investment property. During the six-month period ended 30 June 2011, a land of one of subsidiary in the other segment which is previously classified as trading property with a total net carrying value of TL 68,415 thousand were transferred to land and buildings.

12.2 Revaluation surplus The Group’s land and buildings are revalued for the purpose of the consolidated financial statements. Independent third party appraisers conduct the appraisals periodically on the basis of fair market value. As at 30 June 2011, the revaluation surplus, net of non-controlling interests and deferred taxes, amounting to TL 1,069,784 thousand including the fair value differences of investment and trading properties till the date of the use of property change from property and equipment and land and buildings (31 December 2010: TL 1,086,198 thousand) was recognised in other comprehensive income, and presented in “revaluation surplus” account within the equity.


31

12 Property and equipment (continued) 12.2 Revaluation surplus (continued)

Had there been no revaluation on land and buildings, the balances of land and buildings as at 30 June 2011 and 31 December 2010 would have been as follows: Historical cost Accumulated depreciation Net Book Value 30 June 2011 1,694,856 (207,148) 1,487,708 31 December 2010 1,771,106 (298,952) 1,472,154

13 Intangible assets At 30 June 2011 and 31 December 2010, intangible assets comprised the following:

30 June 2011 31 December 2010 Goodwill 590,460 677,437 Concession rights (a) 215,706 222,412 Broadcasting rights (b) 140,721 140,721 Concession rights (c) 20,186 20,454 Customer relationship (c) 1,846 1,890 Other intangible assets, net 57,291 51,478

1,026,210 1,114,392 (a) The partnership established by the Group, Akfen Holding Anonim Şirketi and TÜV-SÜD Teknik Güvenlik ve Kalite Denetim Ticaret Limited Şirketi, obtained the right to tender vehicle inspection services for 20 years as at 20 December 2004. Following the completion of taking the advice of 1st Circuit of State, the Concession Agreement, regarding the privatisation of vehicle inspection services with the Privatisation Administration was signed on 15 August 2007, and TÜVTURK Kuzey Taşıt Muayene İstasyonları Yapım ve İşletim Anonim Şirketi (“TÜVTURK Kuzey”) and TÜVTURK Güney Taşıt Muayene İstasyonları Yapım ve İşletim Anonim Şirketi (“TÜVTURK Güney”) have started their operations. As at 30 June 2011, 193 vehicle inspection stations in 81 cities have started their operations. (b) Following the tender organised by Saving Deposits Insurance Fund on 18 June 2008; the transfer of the commercial and economic assets of Kral TV and Kral FM to A Yapım Televizyon Programcılık Anonim şirketi (“A Yapım”), a consolidated entity operating in media business, was started and Competition Authority approvals were obtained. Radio Television Supreme Council approved the process and A Yapım took over Kral TV and Kral FM on 16 October 2008 and recognised the amounts paid as broadcasting rights under intangible assets. (c) According to share transfer agreement dated 27 October 2009, the Group decided to purchase Anadolu Göcek Marina Turizm Yatırımları Anonim Şirketi (“D Marin Göcek”) from Turkon Holding Anonim Şirketi. On 7 December 2010, the share transfer finalised with a closing agreement and the Group obtained control by acquiring 100 percent of shares and voting rights in D Marin Göcek. Under IFRS 3, “Business Combinations” customer relationships amounting to TL 1,890 thousand and concession rights amounting to TL 20,454 thousand were recognised as intangible assets arising from the acquisition of D Marin Göcek at the date of acquisition. Movements in goodwill during the six-month periods ended 30 June were as follows: 30 June 2011 30 June 2010 Balance at the beginning of the period 677,437 734,763 Acquisition during the period -- 4,023 Disposals (*) (94,507) (78,633) Adjustment for currency translation 7,530 (13,806) Balance at the end of the period 590,460 646,347

(*) Disposal of goodwill amounting to TL 94,507 thousand for the six-month period ended 30 June 2011 is related to the partial disposal of the interest in a proportionately consolidated joint venture, Garanti Bank. (See note 6.2).


13 Intangible assets (continued)

At 30 June 2011 and 31 December 2010, goodwill comprised the following:

Company Type of

purchase Acquisition

cost Net asset

fair value Purchase

date

Shares acquired

% Group share

Cumulative adjustment

for currency translation

Cumulative impairment in value of

goodwill Cumulative

disposal

30 June 2011

Net amount

31 December 2010

Net amount

Garanti Bank (*) Cash 789,884 7,215,640 Dec. 2007 4.65 335,527 -- -- (94,507) 359,850 454,357 G Netherlands B.V. (“G Netherlands”) Cash 159,049 61,685 Dec. 2007 49.90 30,781 26,807 (38,772) (78,633) 37,670 32,858 G Netherlands Cash -- (43,392) May.2010 6.08 (2,637) 584 -- -- 3,221 2,812 Leasemart Holding B.V. (“Leasemart”) Cash 27,844 39,960 Dec. 2010 30.24 12,084 2,309 -- -- 18,069 15,760 D Marin Göcek Cash 54,867 40,369 Dec. 2010 100.00 40,369 -- -- -- 14,498 14,498 NTV Radyo ve Televizyon Yayıncılığı Anonim Şirketi (“NTV Radyo”) Cash 98,877 12,081 Apr. 2004 97.00 11,719 -- -- -- 87,158 87,158 Enformasyon Reklamcılık ve Filmcilik Sanayi ve Ticaret Anonim Şirketi (“Enformasyon”) Cash 40,091 10,783 Jul. 2003 70.00 7,548 -- -- -- 30,100 30,100 Doğuş İnşaat ve Ticaret Anonim Şirketi (“Doğuş İnşaat”) Cash 89,076 1,491,894 Dec. 2006 4.10 61,093 -- -- -- 27,983 27,983 Kapital Radyo ve Televizyon Yayıncılığı Anonim Şirketi (“Kapital Radyo”) Cash 9,246 72 Dec. 2007 97.00 70 -- -- -- 9,176 9,176 Doğuş Otomotiv Servis ve Ticaret Anonim Şirketi (“DOAŞ”) Cash 2,735 -- Dec. 2006 50.00 -- -- -- -- 2,735 2,735 29,700 (38,772) (173,140) 590,460 677,437

(*) See note 6.2.

32


33

14 Investments in debt securities At 30 June 2011 and 31 December 2010, debt securities available-for-sale and held-to-maturity comprised the following:

30 June 2011

31 December 2010

Face value

Carrying value

Interest rate

range % Latest

maturity

Carrying

value Debt and other instruments available-for-sale:

Government bonds indexed to consumer price index 1,960,064 2,649,943 6-20 2020 3,261,574 Government bonds at floating rates (a) 1,983,053 2,055,715 7-10 2017 2,822,681 Bonds issued by corporations (b) 733,173 743,269 1-12 2034 896,832 Treasury bills in TL 661,735 659,088 8 2011 1,473,559 Government bonds in TL 587,153 586,249 7-23 2020 640,741 Discounted government bonds in TL 388,111 374,083 8-10 2012 509,807 Bond issued by foreign governments 274,583 277,685 5-11 2021 203,850 Bonds issued by financial institutions 112,253 135,360 3-17 2021 334,081 Euro bonds 63,717 66,390 5-12 2034 254,831 Others 6,169 30,867 Total securities available for-sale 7,553,951 10,428,823 Debt and other instruments held-to-

maturity: Government bonds in TL 520,932 485,316 18 2012 876,645 Euro bonds 323,363 324,377 7-8 2036 389,090 Government bonds at floating rates (a) 213,999 219,537 6-9 2014 422,535 Total held to maturity portfolio 1,029,230 1,688,270 Accrued interest income 56,576 94,054 Total held-to-maturity portfolio 1,085,806 1,782,324 Total investments in debt securities 8,639,757 12,211,147 Current investments in debt securities 1,831,430 3,143,254 Non-current investments in debt securities 6,808,327 9,067,893 8,639,757 12,211,147

(a) The interest rates applied on these securities are floating quarterly based on interest rates of government bond bids of the government.

(b) Bonds issued by corporations include credit linked notes with a total face value of USD 102,852 thousand (31 December 2010: USD 220,920 thousand) and carrying value amounting to TL 167,268 thousand (31 December 2010: TL 339,979 thousand).


34

14 Investments in debt securities (continued) Interest income from debt and other fixed or floating instruments is reflected in interest on securities, whereas gains and losses arising from changes in the effective portion of the fair value of cash flow hedges and available-for-sale assets are deferred as a separate component of equity.

Impairment losses provided on investment securities as at 30 June 2011 amounted to TL 9 thousand (30 June 2010: TL 31 thousand).

At 30 June 2011, government bonds and treasury bills include securities pledged under repurchase agreements with customers amounting to TL 3,643,524 thousand (31 December 2010: TL 3,715,407 thousand).

The following table summarises the securities that were deposited as collaterals with respect to various banking, insurance and asset management transactions:

30 June 2011 31 December 2010

Face value

Carrying value

Face value

Carrying value

Collateralised to foreign banks 4,285,637 4,521,133 2,065,925 2,220,526 Deposited at Istanbul Stock Exchange 465,813 669,252 2,035,551 2,604,057 Deposited at central banks for repurchase transactions 600,585 621,581 492,596 500,027 Deposited at Central Bank of Turkey (“CBT”) for interbank transactions 142,053 155,125 174,858 182,799 Deposited at CBT for foreign currency money market transactions 124,780 136,468 154,526 160,707 Deposited at Clearing Bank (“Takasbank”) 33,590 42,848 19,989 20,445 Others 7,225 10,539 6,153,632 5,699,100


35

15 Banking loans and advances to customers At 30 June 2011 and 31 December 2010, outstanding loans were as follows:

30 June 2011 31 December 2010 Consumer loans 6,189,233 6,751,691 Service sector 1,999,697 2,151,827 Energy 1,309,379 1,620,060 Construction 1,253,792 1,173,433 Transportation and logistics 966,448 1,063,193 Food 901,964 1,025,562 Textile 851,154 843,481 Metal and metal products 843,829 1,060,734 Transportation vehicles and sub-industry 648,600 679,346 Data processing 474,678 384,217 Tourism 412,604 408,258 Financial institutions 389,901 421,357 Agriculture and stockbreeding 294,497 338,196 Chemistry and chemical product 264,464 273,812 Stone, rock and related products 249,040 281,021 Durable consumption 242,597 244,291 Machinery and equipment 212,265 216,508 Mining 197,216 225,775 Electronic, optical and medical equipment 173,145 182,054 Plastic products 114,663 124,671 Paper and paper products 92,320 98,470 Others 708,840 688,723 Total performing loans 18,790,326 20,256,680 Non-performing loans and lease receivables 501,878 772,044 Total gross loans 19,292,204 21,028,724 Finance lease receivables, net of unearned income 451,861 457,302 Accrued interest income on loans and lease receivables 229,374 247,633 Allowance for possible losses on loans and lease receivables (549,705) (743,285) Banking loans and advances to customers, net 19,423,734 20,990,374 Short-term banking loans and advances to customer 8,266,149 8,513,765 Long-term banking loans and advances to customer 11,157,585 12,476,609 19,423,734 20,990,374

As at 30 June 2011, interest rates on loans granted to customers range between 1 percent - 53 percent (31 December 2010: 1 percent - 53 percent) per annum for the foreign currency loans and 1 percent - 30 percent (31 December 2010: 1 percent - 32 percent) per annum for the TL loans.


36

15 Banking loans and advances to customers (continued) The finance lease receivables are secured through the underlying assets. At 30 June 2011 and 31 December 2010, banking loans and advances to customers included the following finance lease receivables:

30 June 2011 31 December 2010 Finance lease receivables, net of unearned income 451,861 457,302 Add: Non-performing lease receivables 69,420 92,602 Less: Allowance for possible losses from finance lease receivables (26,588) (32,839) Finance lease receivables, net 494,693 517,065 Accrued interest on lease receivables 2,806 3,004 Analysis of finance lease receivables, gross Due within 1 year 218,224 253,169 Due between 1 and 5 years 304,906 300,366 Due after 5 years 43,864 39,635 Finance lease receivables, gross 566,994 593,170 Unearned income (72,301) (76,105) Finance lease receivables, net 494,693 517,065 Analysis of finance lease receivables, net Due within 1 year 187,550 217,213 Due between 1 and 5 years 267,114 263,412 Due after 5 years 40,029 36,440 Finance lease receivables, net 494,693 517,065

The provision for possible losses is comprised of amounts specifically identified as being impaired and non-performing loans and advances and a further portfolio-basis amount considered adequate to cover the residual inherent risk of loss present in the lending relationships presently performing in accordance with agreements made with borrowers. The amount of the portfolio basis allowance is TL 83,541 thousand (31 December 2010: TL 85,719 thousand).

For the six-month period ended 30 June, movements in the allowance for possible losses on loans and lease receivables are as follows:

30 June 2011 30 June 2010 Balance at the beginning of the period 743,285 766,570 Provision for the period 81,744 112,442 Write-offs (61,540) (22,365) Effect of change in joint venture rate (138,807) (38,968) Recoveries (74,977) (122,924) Exchange rate differences on foreign currency balances -- (6,803) Balance at the end of the period 549,705 687,952


37

16 Cash and cash equivalents At 30 June 2011 and 31 December 2010, cash and cash equivalents comprised the following:

30 June 2011 31 December 2010 Balances with central banks excluding reserve deposits 2,835,349 1,257,597 Cash at banks 2,623,269 468,740 Cash at branches of the Group banks 210,086 276,495 Other liquid assets and cheques 11,714 7,179 Cash on hand 1,105 925 Total cash and cash equivalents 5,681,523 2,010,936

For the six-month period ended 30 June, cash and cash equivalents disclosed in the condensed consolidated interim statement of cash flows comprised the following:

30 June 2011 30 June 2010 Loans and advances to banks and balances with central banks excluding reserve deposits with original maturity periods of less than three months 3,242,485 1,262,077 Cash at banks 2,623,269 532,598 Cash at branches of the Group banks 210,086 202,154 Other liquid assets and cheques 11,714 13,035 Cash on hand 1,105 1,305 Cash and cash equivalents in the statement of cash flows 6,088,659 2,011,169


38

17 Capital and reserves 17.1 Paid-in capital

As at 30 June 2011, the nominal share capital of Doğuş Holding amounting to TL 2,055,292 thousand (31 December 2010: TL 2,055,292 thousand) in the condensed consolidated interim financial statements.

The paid-in capital of Doğuş Holding comprises 856,027,050 shares (31 December 2010: 856,027,050 shares) of TL 0.001 each.

At 30 June 2011 and 31 December 2010, the shareholding structure of Doğuş Holding based on the number of shares is presented below:

30 June 2011 31 December 2010

Thousands of shares %

Thousands of shares %

Ferit Şahenk 276,671 32.32 276,671 32.32 Filiz Şahenk 258,932 30.25 258,932 30.25 Deniz Şahenk 147,143 17.19 147,143 17.19 Doğuş Araştırma Geliştirme ve Müşavirlik Hizmetleri AŞ (“Doğuş Arge”) 87,183 10.18 87,183 10.18 Garanti Turizm Yatırım ve İşletme Anonim Şirketi (“Garanti Turizm”) 39,851 4.66 39,851 4.66 DOAŞ 31,381 3.67 31,381 3.67 Doğuş Hava Taşımacılığı Anonim Şirketi (“Doğuş Hava”) 5,264 0.61 5,264 0.61 Doğuş Sigorta Aracılık Hizmetleri Anonim Şirketi (“Doğuş Sigorta”) 4,589 0.54 4,589 0.54 Antur Turizm Anonim Şirketi (“Antur”) 3,824 0.45 3,824 0.45 Doğuş Turizm Sağlık Yatırımları ve İşletmeciliği Sanayi ve Ticaret Anonim Şirketi (“Doğuş Turizm”) 765 0.09 765 0.09 Others 424 0.04 424 0.04 856,027 100.00 856,027 100.00

17.2 Legal reserves

The legal reserves are generated by annual appropriations amounting to 5 percent of income disclosed in the Group’s statutory accounts until it reaches 20 percent of paid-in share capital (first legal reserve). Without limit, a further 10 percent of dividend distributions in excess of 5 percent of paid-in capital is to be appropriated to increase legal reserves (second legal reserve). The legal reserves are restricted and are not available for distribution as dividend unless they exceed 50 percent of share capital. In the condensed consolidated interim financial statements, total legal reserves net of non-controlling interests amounting to TL 294,120 thousand as at 30 June 2011 (31 December 2010: TL 270,507 thousand).


39

17 Capital and reserves (continued) 17.3 Revaluation surplus

For the six-month period ended 30 June, the movements of revaluation surplus were as follows:

30 June 2011 30 June 2010 Balance at the beginning of the period/year 1,086,198 1,081,534 Revaluation decrease in land and buildings -- (1,979) Transfer to retained earnings due to partial disposal of a proportionately consolidated joint venture (7,700) -- Deferred taxes on revaluation surplus 1,221 17,299 Non-controlling interest portion of revaluation changes, net of deferred taxes 635 1,374 Depreciation effect on revaluation surplus of prior period (10,570) (14,102) Balance at the end of the period 1,069,784 1,084,126

17.4 Non-controlling interests

For the six-month period ended 30 June, movements of the non-controlling interests were as follows:

30 June 2011 30 June 2010 Balance at the beginning of the period 278,959 230,432 Acquisition of non-controlling interests in a previously proportionately consolidated joint venture with a change in control 18,291 -- Sales to non-controlling interests 1,701 19,875 Effect of a newly consolidated subsidiary of a proportionately consolidated joint venture -- 8,303 Release of non-controlling interests through dividend distribution (2,804) -- Effect of share capital increase 393 (1,465) Purchases from non-controlling interests (5,152) (1,545) Non-controlling interest of changes in revaluation surplus (635) (1,374) Non-controlling interest of profit for the period 20,163 22,491 Balance at the end of the period 310,916 276,717

17.5 Translation reserve

The translation reserve comprises all foreign exchange differences arising from the translation of the financial statements of foreign operations.

Garanti Bank had applied net investment hedge accounting for the exchange rate differences on the net investment risks on its foreign subsidiaries and its related financial liabilities denominated in foreign currencies in the previous periods. Garanti Bank prospectively discontinued this application as of 1 January 2009 within the framework of IFRIC 16 Comment on Hedges of a Net Investment in a Foreign Operation, effective for annual periods beginning on or after 1 October 2008.


40

18 Long-term bank borrowings At 30 June 2011 and 31 December 2010, long-term bank borrowings comprised the following:

30 June 2011 31 December

2010

Interest rate (%)

Original amount in thousand

Long-term borrowings

Long-term borrowings

USD 1.36-6.90 2,381,552 3,882,406 4,088,781 Euro 1.25-5.30 667,972 1,569,199 1,775,610 Others 2.90-15.75 1,122,334 1,328,113 Total long-term bank borrowings 6,573,939 7,192,504 Accrued interest expenses 68,103 96,595 Total 6,642,042 7,289,099 Less: Short-term portion of long-term bank borrowings including accrued interest expenses (1,018,482) (1,018,001) Total 5,623,560 6,271,098

At 30 June 2011 and 31 December 2010, the terms and conditions of outstanding short-term and long-term bank borrowings were as follows:

30 June 2011 Nominal Year of Face Carrying Currency interest rate (%) maturity value amount Secured USD (Libor+1.21-5.75) 2.13-3.34 2012-2025 4,376,914 4,341,090 Secured Euro (Euribor+1.95-4.50) 1.25-6.19 2011-2020 2,220,005 2,213,443 Secured Other 1.25-3.99 2011-2018 1,543,331 1,580,647 Unsecured USD (Libor+1.45-2.95) 3.00-7.00 2011-2016 504,028 488,865 Unsecured Euro (Euribor+0.13-4.70) 4.00 2011-2020 432,682 431,851 Unsecured Other 3.00-8.25 2011-2017 269,694 271,505 9,346,654 9,327,401 31 December 2010 Nominal Year of Face Carrying Currency interest rate (%) Maturity value amount Secured USD (Libor+1.21-5.75) 0.5-8.15 2012-2020 4,362,465 4,336,022 Secured Euro (Euribor+1.95-4.70) 1.00-8.00 2011-2020 2,067,073 2,068,758 Secured Other 3.00-10.73 2011 1,949,732 2,006,893 Unsecured USD (Libor+1.45-5.50) 3.00-6.30 2011-2020 599,332 585,333 Unsecured Euro (Euribor+0.13-4.50) 3.81-4.50 2011-2020 686,999 685,626 Unsecured Other 3.00-14.98 2011-2017 270,792 277,782 9,936,393 9,960,414


41

19 Bonds payable At 30 June 2011 and 31 December 2010, bonds payable comprised the following:


2010 Latest Interest Carrying Carrying Maturity rates % value value Bonds payable of TL 599 million 2012 7.68-8.54 499,527 -- Bonds payable of USD 120 million 2021 6.25 189,883 -- Bonds payable of USD 72 million 2016 3-month libor+2.5 114,960 -- 804,370 -- Accrued interest on bonds payable 6,949 -- Total 811,319 -- Short-term bonds payable 499,527 -- Long-term bonds payable 311,792 -- Total 811,319 --

In May 2011, Garanti Bank issued bills with a total face value of TL 179,625 thousand, interest rate of 8.54 percent and a maturity of 179 days in the domestic market.

In April 2011, Garanti Bank issued bills with a total face value of TL 179,625 thousands, a maturity of 176 days and interest rate of 8.41 percent in the domestic market, and USD 120 million 10-year fixed-rate notes with a maturity date of 20 April 2021 and coupon rate of 6.25 percent and 72 million 5-year floating-rate notes with a maturity date of 20 April 2016 and a coupon rate of 3-month libor+2.5 percent in the international market.

In January 2011, Garanti Bank issued bills with a total face value of TL 239,500 thousand, interest rate of 7.68 percent and maturity of one year in the domestic market.

Garanti Bank and its subsidiaries repurchased some of the Turkish Lira securities with a total face value of TL 82,184 thousand and netted off such securities in the accompanying condensed consolidated financial statement in the current period.

20 Subordinated liabilities At 30 June 2011 and 31 December 2010, subordinated liabilities comprised the following:


2010 Latest Interest Carrying Carrying Maturity rates % value Value Subordinated debt of USD 120 million 2017 6.95 191,530 229,663 Subordinated debt of Euro 12 million 2021 Euribor+3.5 27,780 30,807 Subordinated bonds payable of Euro 7 million 2016 Euribor+1.5 16,668 18,484 Subordinated deposit 2016 4.75-6 8,962 9,558 244,940 288,512 Accrued interest on subordinated liabilities 5,961 7,252 Total 250,901 295,764 Short-term subordinated liabilities 1,565 -- Long-term subordinated liabilities 249,336 295,764 Total 250,901 295,764


42

20 Subordinated liabilities (continued) On 23 February 2009, Garanti Bank obtained a 12-year subordinated loan of Euro 12 million due March 2021 from Proparco (Societe de Promotion et de Participation pour la Cooperation Economique SA), a company of the French Development Agency Group, with an interest of Euribor+3.5 percent and a repayment option for Garanti Bank at the end of the seventh year.

On 5 February 2007, Garanti Bank obtained a 10-year subordinated fixed-rate note of USD 120 million due February 2017 with a repayment option for Garanti Bank at the end of the fifth year. The fixed rate notes with Political Risk Insurance provided by Steadfast (a subsidiary of Zurich American Insurance Company) received a rating of Baa1 by Moody’s Investors Service and priced at par to yield 6.95 to investors for the first 5 years and then 7.95 percent annually.

On 29 September 2006, one of the Group’s joint ventures issued its first floating rate note for Euro 7 million, Euro-denominated lower tier-2 capital, priced at 99.30, arranged by Deutsche Bank and traded on the alternative market in Frankfurt.

As at 30 June 2011, remaining subordinated deposits of the proportionately consolidated banking joint ventures in the Netherlands amounting to Euro 4 million (equivalent of TL 8,962 thousand) (31 December 2010: Euro 5 million, equivalent of TL 9,558 thousand).

21 Short-term bank borrowings At 30 June 2011 and 31 December 2010, short-term bank borrowings comprised the following:

30 June 2011 31 December 2010 Foreign banks 1,830,898 1,845,455 Domestic banks 840,966 821,228 2,671,864 2,666,683 Accrued interest expenses 13,495 4,632 2,685,359 2,671,315

As at 30 June 2011, short-term bank borrowings included various promissory notes amounting to TL 76,739 thousand in total with latest maturity of 2012 (31 December 2010: TL 65,195 thousand with latest maturity of 2011).

As at 30 June 2011, short-term bank borrowings included two one-year syndicated loan facilities to be utilized for general trade finance purposes including export and import contracts in two tranches of (i) USD 72,928 thousand and Euro 187,409 thousand, with the rates of Libor + 1.1 percent and Euribor + 1.1 percent per annum with the participation of 42 banks from 19 different countries, (equivalent of TL 551,435 thousand) and (ii) USD 75,778 thousand and Euro 122,983 thousand with the rates of Libor + 1.2 percent and Euribor + 1.2 percent per annum with the participation of 49 banks from 18 countries (equivalent of TL 406,541 thousand).

22 Deposits At 30 June 2011 and 31 December 2010, banking customer deposits comprised the following:

30 June 2011 31 December 2010 Banking deposits from banks 770,246 849,141 Banking customer deposits 19,018,127 22,965,656 19,788,373 23,814,797 Short-term deposits 19,427,397 23,429,175 Long-term deposits 360,976 385,622 19,788,373 23,814,797


43

22 Deposits (continued) 22.1 Banking customer deposits

At 30 June 2011 and 31 December 2010, banking customer deposits comprised the following:

30 June 2011 31 December 2010 Demand Time Total Total Foreign currency 1,782,678 6,604,386 8,387,064 9,914,863 Saving 662,751 6,184,777 6,847,528 8,078,974 Commercial 816,681 2,153,208 2,969,889 4,420,940 Public and other 618,045 107,315 725,360 454,631 3,880,155 15,049,686 18,929,841 22,869,408 Accrued interest expenses 3,113 85,173 88,286 96,248 3,883,268 15,134,859 19,018,127 22,965,656

At 30 June 2011, interest rates applicable to TL deposits and foreign currency deposits varied between 3 percent - 14 percent (31 December 2010: 5 percent - 11 percent) and 1 percent - 10 percent (31 December 2010: 1 percent - 12 percent), respectively.

23 Commitments and contingencies Commitments and contingent liabilities are discussed separately for “segments other than banking and finance” and “banking and finance segment” in the following paragraphs.

23.1 Segments other than banking and finance

Commitments and contingent liabilities arising in the ordinary course of business for the entities operating in the “segments other than banking and finance” comprised the following items as at 30 June 2011 and 31 December 2010:

Letters of guarantee 30 June 2011 31 December 2010 Given to suppliers 636,721 456,236 Obtained from banks and given to government organisations 460,085 471,433 Given to banks 105,049 33,239 Given to customs administrations 18,049 14,458 Given to others 132,322 149,406 Total letters of guarantee 1,352,226 1,124,772 Sureties given 61,900 55,748

The Group, as a guarantor, has given its equity holdings in some group companies with a total nominal amount of TL 507,687 thousand (31 December 2010: TL 329,106 thousand) and property equipment at an amount of TL 506,380 thousand (equivalent of USD 134,600 thousand and Euro 122,150 thousand) (31 December 2010: TL 458,389 thousand, equivalent of USD 134,600 thousand and Euro 122,150 thousand) as collateral. In terms of the related borrowing agreements, one of the tourism segment consolidated subsidiaries’ profit from hotels has been attached.

23.2 Banking and finance segment

In the ordinary course of banking and finance activities, the entities included in the “banking and finance segment” undertake various commitments and incur certain contingent liabilities that are not presented in the condensed consolidated interim financial statements, including letters of guarantee, acceptance credits and letters of credit.


44

23 Commitments and contingencies (continued) 23.2 Banking and finance segment (continued)

At 30 June 2011 and 31 December 2010, commitments and contingent liabilities comprised the following items:

30 June 2011 31 December 2010 Letters of guarantee 3,461,523 3,641,214 Letters of credit 1,139,818 1,175,773 Acceptance credits 51,243 49,625 Other guarantees and endorsements 14,461 17,160 4,667,045 4,883,772

As at 30 June 2011, commitments for unused credit limits for credit cards, overdrafts, cheques and loans to customers, and commitments for “credit linked notes” amounted approximately to TL 6,122,052 thousand (31 December 2010: TL 7,105,480 thousand) in total.

As at 30 June 2011, commitments for the derivative transactions carried out on behalf of customers in the Turkish Derivatives Exchange amounted to TL 105,352 thousand (31 December 2010: TL 153,621 thousand) in total.

As at 30 June 2011, commitments for purchases and sales of foreign currencies under spot, forwards, swaps, future rate agreements, options and forward agreements for gold trading amounted to TL 8,629,165 thousand (31 December 2010: TL 9,328,333 thousand), approximately 95 percent of which are due within a year. The breakdown of such commitments outstanding at 30 June 2011 and 31 December 2010 by type was as follows:

30 June 2011 31 December 2010 Purchase Sale Purchase Sale Currency swap agreements for hedging purposes 1,603,006 2,101,790 1,688,008 2,567,970 Interest rate and foreign currency options 695,165 753,561 1,146,127 1,479,578 Spot foreign currency transactions 256,031 156,097 170,687 182,804 Forward agreements for customer dealing activities 682,171 342,633 269,199 291,957 Forward rate agreements, foreign currency and interest rate futures 469 4,513 31,349 1,098 Options for customer dealing activities 586,718 870,245 678,200 124,163 Forward agreements for hedging purposes 127,098 156,516 279,136 46,243 Forward agreements for gold trading 20,240 13,129 115,476 82,960 Currency swap agreements for customer dealing activities 186,555 1,919 65,931 39,823 Interest rate and credit default swap agreements 31,290 40,018 18,873 48,751 4,188,743 4,440,421 4,462,986 4,865,347

23.3 Commitments and contingencies applicable to business segments

As at 30 June 2011, commitment for uncalled capital of subsidiaries amounting to TL 114,048 thousand (31 December 2010: TL 116,576 thousand).


45

24 Related parties 24.1 Related party balances

At 30 June 2011 and 31 December 2010, the Group had the following balances outstanding from its related parties:

30 June 2011 Joint Ventures Other Total Other non-current assets 763 -- 763 Accounts receivable 42 -- 42 Due from related parties 1,843 203,654 205,497 Banking loans and advances to customers -- -- -- Cash and cash equivalents 1,447,954 -- 1,447,954 Long-term borrowings 47,097 -- 47,097 Other non-current liabilities 10,691 -- 10,691 Short-term bank borrowings 21,966 -- 21,966 Short-term portion of long-term borrowings 6,779 -- 6,779 Deposits -- 75,548 75,548 Accounts payable 962 -- 962 Due to related parties 669 11,505 12,174 Letters of guarantee 204,138 -- 204,138 31 December 2010 Joint Ventures Other Total Accounts receivable 398 -- 398 Due from related parties 7,669 119,122 126,791 Banking loans and advances to customers 275 -- 275 Cash and cash equivalents 230,797 -- 230,797 Long-term borrowings 27,820 -- 27,820 Other non-current liabilities 10,873 -- 10,873 Short-term bank borrowings 28,251 -- 28,251 Short-term portion of long-term borrowings 9,659 -- 9,659 Deposits 28 76,112 76,140 Accounts payable 61 -- 61 Due to related parties 18,341 43,571 61,912 Letters of guarantee 182,495 2,550 185,045

24.2 Related party transactions

For the six-month period ended 30 June, the revenues earned and expenses incurred by the Group in relation to transactions with its related parties are summarised below: 30 June 2011 Joint Ventures Other Total Revenues 19,646 1,784 21,430 Cost of revenues (205) -- (205) Administrative expenses (602) -- (602) Selling, marketing and distribution expenses (17) -- (17) Net financing income / (costs) 7,028 (1,584) 5,444 Other operating expense, net (486) -- (486) 30 June 2010 Joint Ventures Other Total Revenues 7,386 1,637 9,023 Cost of revenues (697) -- (697) Administrative expenses (1,688) -- (1,688) Selling, marketing and distribution expenses (11) -- (11) Net finance cost (6,579) (1,811) (8,390) Other operating expense, net (113) -- (113)


46

24 Related parties (continued) 24.3 Transactions with key management personnel

On a consolidated basis, key management costs included in administrative expenses for the six-month period ended 30 June 2011 amounted to TL 79,349 thousand (for the six-month period ended 30 June 2010: TL 56,436 thousand).

25 Group enterprises The condensed consolidated interim financial statements aggregate financial information from the following entities:

25.1 Entities in banking and finance segment

The entities first consolidated under Garanti Bank; then proportionately consolidated under the Group in accordance with IAS 31 “Interests in Joint Ventures”:

Name Nature of business Domenia Credit IFN S.A. (“Domenia”) Mortgage G Netherlands Finance Garanti Bank Banking Garanti Bank International NV (“GBI”) Banking Garanti Bank Moscow (“GB Moscow”) Banking Garanti Bank S.A. Banking Garanti Bilişim Teknolojisi ve Ticaret Anonim Şirketi (“Garanti Bilişim”)(a) IT services Garanti Diversified Payment Rights Finance Company (“Garanti DPR”) Special purpose entity for

securitisation transaction Garanti Emeklilik ve Hayat Anonim Şirketi (“GEHAŞ”) Life insurance Garanti Faktoring Hizmetleri Anonim Şirketi (“Garanti Faktoring”) Factoring Garanti Filo Yönetimi Hizmetleri Anonim Şirketi (”Garanti Filo) (a) Fleet management Garanti Finansal Kiralama Anonim Şirketi (“Garanti Leasing“) Leasing Garanti Hizmet Yönetimi Organizasyon ve Danışmanlık Anonim Şirketi (“Garanti Hizmet”)

Service activities for fund management and operations

Garanti Holding B.V. Holding company Garanti Konut Finansmanı Danışmanlık Hizmetleri Anonim Şirketi (“Garanti Konut”) (b) Mortgage marketing Garanti Kültür Anonim Şirketi (“Garanti Kültür”) (a) Cultural activities Garanti Ödeme Sistemleri Anonim Şirketi (“GÖSAŞ”) Credit card operational services Garanti Portföy Yönetimi Anonim Şirketi (“Garanti Portföy”) Fund management Garanti Yatırım Menkul Kıymetler Anonim Şirketi (“Garanti Yatırım”) Brokerage and investment banking Garanti Yatırım Ortaklığı Anonim Şirketi (”Garanti Yatırım Ortaklığı”) Portfolio management Leasemart Holding company Motoractive IFN S.A. (“Motoractive”) Leasing Ralfi IFN S.A. (“Ralfi”) Consumer finance T-2 Capital Finance Company (”T-2 Capital”) Special purpose entity for

subordinated debt transactions

(a) These companies are subsidiaries of Garanti Bank and are operating in businesses other than banking and/or finance. They are included within the "banking and finance” segment for the purposes of Doğuş Holding’s condensed consolidated interim financial statements since Garanti Bank owns their controlling interests.

(b) This company is not consolidated in the accompanying condensed consolidated interim financial statements as it does not currently have material operations compared to the consolidated performance of the Group.


47

25 Group enterprises (continued) 25.2 Entities in construction segment

Name Nature of business Ayson Geoteknik ve Deniz İnşaat Anonim Şirketi (“Ayson”) Drilling Ayson Hydro Gradenje d.o.o. (“Ayson Hydro”) A non-operating company Ayson Sondaj Limited Ukraine (“Ayson Sondaj”) A non-operating company Dogus Insaat ES Construction Dogus Insaat d.o.o. A non-operating company Dogus Maroc SARL Construction Doğuş Alarko YDA İnşaat (“Doğuş Alarko”) Construction Doğuş EOOD Construction Doğuş Hoteli Sibenik d.o.o. (“Doğuş Hoteli Sibenik”) Construction development Doğuş International Limited (“Doğuş International”) Construction equipments Doğuş İnşaat Construction Doğuş İnşaat Limited (Ukraine) (“Doğuş İnşaat Limited”) A non-operating company Doğuş Koray Romania (“Doğuş Koray”) A non-operating company Doğuş Mandalina Razvitak d.o.o. (“Doğuş Mandalina Razvitak”) Construction development Doğuş Polat Adi Ortaklığı (“Doğuş Polat”) Construction Doğuş Poland SP. Z.O.O. (“Doğuş Poland”) A non-operating company Doğuş Sibenik Razvitak Marina d.o.o. (“Sibenik Razvitak”) Construction development Gülermak-Doğuş Adi Ortaklığı (“Gülermak Doğuş”) Construction Kazakhistan Joint Venture (“Doğuş Prestige”) Construction Yapı Merkezi-Doğuş-Yüksel-Yenigün-Belen Adi Ortaklığı (“YMDYYB”) Construction Teknik Mühendislik ve Müşavirlik Anonim Şirketi (“Teknik Mühendislik”) Civil engineering

25.3 Entities in automotive segment

First consolidated under DOAŞ; then consolidated under the Group.

Name Nature of business

DOAŞ Automotive distribution Doğuş Auto Mısır JS A non-operating company Doğuş Auto Mısr LLC A non-operating company D-Auto Suisse SA Automotive retail Doğuş Oto Pazarlama ve Ticaret Anonim Şirketi (“Doğuş Oto”) Automotive retail Doğuş Sigorta Insurance agency Krone-Doğuş Treyler Sanayi ve Ticaret Anonim Şirketi (“Krone Doğuş”) (c)

Production Leaseplan Otomotiv Servis ve Ticaret Anonim Şirketi (“Leaseplan”) Operational leasing LPD Holding Anonim Şirketi (“LPD Holding”) Operational leasing Meiller Doğuş Damper Sanayi ve Ticaret Limited Şirketi (“Meiller Doğuş”) (c)

Production TÜVTURK Kuzey (c) Vehicle inspection station TÜVTURK Güney (c) Vehicle inspection station TÜVTURK İstanbul (c) Vehicle inspection station VDF Faktoring Hizmetleri Anonim Şirketi (“VDF Faktoring”) Factoring VDF Sigorta Aracılık Hizmetleri Anonim Şirketi (“VDF Sigorta”) Agency/brokerage VDF Servis Holding Anonim Şirketi (“VDF Servis Holding”) Holding company Volkswagen Doğuş Tüketici Finansmanı Anonim Şirketi (“VDF Tüketici”) Consumer finance Yüce Auto Anonim Şirketi (“Yüce Auto”) Automotive distribution

(c) These companies are proportionately consolidated joint ventures of Doğuş Holding.


48

25 Group enterprises (continued) 25.4 Entities in tourism segment

Name Nature of business Antur Hospitality and travel agency Arena Giyim Sanayi ve Ticaret Anonim Şirketi (“Arena”) Hospitality, clothing, retail

and cafe D Marin Göcek Marina management D Otel Marmaris Turizm İşletmeciliği Ticaret ve Sanayi Anonim Şirketi (“D Otel”)

Hospitality

Datmar Turizm Anonim Şirketi (“Datmar”) Hospitality Doğuş Dalaman Marina İşletmeleri Turistik ve Ticaret Anonim Şirketi (“Doğuş Dalaman”) (d)

A non-operating company

Doğuş Didim Marina İşletmeleri ve Ticaret Anonim Şirketi (“Doğuş Didim”) Marina Doğuş Hoteli d.o.o. (“Doğuş Hoteli”) Hotel management Doğuş Marina Mandalina d.o.o. (“Doğuş Marina ”) Marina management Doğuş Marina Upravljanje d.o.o. (“Doğuş Marina Upravljanje”) Marina management Doğuş Sibenik Upravljanje Marina d.o.o. (“Sibenik Upravljanje”) Marina management Doğuş Turgutreis Marina İşletmeleri Turistik ve Ticaret Anonim Şirketi (“Doğuş Turgutreis”) Marina management Garanti Turizm Hospitality Göktrans Turizm ve Ticaret Anonim Şirketi (“Göktrans Turizm”) Hospitality NCP Marina Mandalina d.o.o. (“NCP Marina Mandalina”) Marina NCP Hoteli d.o.o. (“NCP Hoteli”) Hotel management Şahintur Şahinler Otelcilik Turizm Yatırım İşletmeciliği Anonim Şirketi (“Şahintur”)

A non-operating company

Voyager Mediterranean Turizm Endüstrisi ve Ticareti Anonim Şirketi (“Voyager”)

Hospitality

(d) Doğuş Dalaman was established to build and operate yachting marina in seaside resort towns in Mediterranean coasts of Turkey. However, Doğuş Dalaman has not yet started its operations and accordingly was noted as non-operating.

25.5 Entities in other segment

Name Nature of business A Yapım Media Aslancık Elektrik Üretim Anonim Şirketi (“Aslancık”) Electricity generation Boyabat Elektrik Üretim ve Ticaret Anonim Şirketi (“Boyabat”) Electricity generation D Enerji Üretim ve Yatırım Anonim Şirketi (“D Enerji”) Energy DAF Araştırma Geliştirme Anonim Şirketi (“DAF”) Lottery DG Finance Holding BV (“DG Finance”) A non-operating company DO-ÇA Tekstil Temizleme ve Ticaret Anonim Şirketi (“DO-ÇA”) Dry cleaning Doğuş Sağlıklı Yaşam ve Danışmanlık Hizmetleri Ticaret Anonim Şirketi (“Doğuş Sağlıklı Yaşam”) Healthcare counseling D Tes Elektrik Enerjisi Toptan Satış A.Ş. (“D Tes”) Energy Doğuş Arge Investing Doğuş Enerji Üretim ve Ticaret Anonim Şirketi (“Doğuş Enerji”) Energy Doğuş Finance Ukraine A non-operating company Doğuş Gayrimenkul Yatırım ve İşletme Anonim Şirketi (“Doğuş Gayrimenkul”) Real estate development Doğuş GYO Real estate investment fund Doğuş Grubu İletişim Yayıncılık ve Ticaret Anonim Şirketi (“Doğuş İletişim”) Media Doğuş Hava A non-operating company Genoto Otomotiv Pazarlama ve Ticaret Anonim Şirketi (“Genoto”) A non-operating company Doğuş Investment A non-operating company Doğuş Luxembourg S.á.r.l. (“Doğuş Lux”) A non-operating company Doğuş Nakliyat ve Ticaret Anonim Şirketi (“Doğuş Nakliyat”) A non-operating company Doğuş SA A non-operating company Doğuş Spor ve Sağlık Hizmetleri Anonim Şirketi (“Doğuş Spor”) Sports activities Doğuş Telekomünikasyon Hizmetleri Anonim Şirketi (“Doğuş Telekom”) A non-operating company


49

25 Group enterprises (continued) 25.5 Entities in other segment (continued)

Name Nature of business Doğuş Turizm Real estate development Doğuş Uydu Haberleşme ve Teknik Hizmetler Anonim Şirketi (“Doğuş Uydu”) Media Doğuş Yayın Grubu Anonim Şirketi (“Doğuş Yayın Grubu”) Media Doğuş E Alışveriş ve Ticaret Anonim Şirketi (“Doğuş E Alışveriş”) Online shopping Enformasyon Media E Elektronik Bahis Oyunları Anonim Şirketi (“E Elektronik”) Lottery İkibinondokuz Radyoculuk ve Sanat Organizasyonu Ticaret Anonim Şirketi

Media (“2019 Radyo”) İstinye Yönetim Hizmetleri Anonim Şirketi (“İstinye Yönetim Hizmetleri”) Shopping mall administration İstinye Park Gayrimenkul Yatırım ve İşletme Anonim Şirketi (“İstinye Park

Shopping mall administration Gayrimenkul”) Kapital Radyo Media Körfez Havacılık Turizm ve Ticaret Anonim Şirketi (“Körfez Hava”) Transportation Makro San. Mam. İmalat ve Pazarlama Limited Şirketi (“Makro”) A non-operating company N Radyo Televizyon ve Yayıncılık Anonim Şirketi (“N Radyo”) Media NTV Avrupa Yayıncılık Anonim Şirketi (“NTV Avrupa”) Media NTV Radyo Media Sititur Turizm Yatırım ve Danışmanlık Hizmetleri Anonim Şirketi (“Sititur”) A non-operating company Tansaş Gıda ve Sanayi Turizm Anonim Şirketi (“Tansaş Gıda”) A non-operating company Yonca Radyo ve TV Yayıncılık Anonim Şirketi (“Yonca Radyo”) Media

25.6 Foreign subsidiaries and jointly controlled entities All Group enterprises are registered in Turkey except for the following companies:

Name Country of incorporation Ayson Hydro Croatia Ayson Sondaj Ukraine Domenia Romania DG Finance The Netherlands Doğuş Auto Mısr JS Egypt Doğuş Auto Mısr LLC Egypt Doğuş EOOD Bulgaria Doğuş Finance Ukraine Ukraine Doğuş Hoteli Croatia Doğuş Hoteli Sibenik Croatia Doğuş Investment Ukraine Dogus İnsaat ES Morocco Dogus Insaat d.o.o. Croatia Dogus İnsaat Limited Ukraine Doğuş International United Kingdom Doğuş Lux Luxembourg Doğuş Mandalina Razvitak Croatia Doğuş Marina Croatia Doğuş Marina Upravljanje Croatia Dogus Maroc SARL Morocco Doğuş Prestige Kazakhistan Doğuş Poland Poland Doğuş SA Switzerland D-Auto Suisse SA Switzerland G Netherlands The Netherlands GB Moscow Russia GBI The Netherlands Garanti Bank S.A. Romania Garanti Holding B.V. The Netherlands Leasemart The Netherlands Motoractive Romania


50

25 Group enterprises (continued) 25.6 Foreign subsidiaries and jointly controlled entities (continued)

Name Country of incorporation NCP Hoteli Croatia NCP Marina Mandalina Croatia Ralfi Romania Sibenik Upravljanje Croatia Sibenik Razvitak Croatia

25.7 Subsidiaries The table below sets out all the Subsidiaries and shows their shareholding structure at 30 June 2011:

Name

Direct and indirect ownership interest by Doğuş Holding

and its subsidiaries

Ownership interest through

shares held by Şahenk Family

Proportion of

ownership interest

Proportion of effective interest of

Doğuş Holding and its

subsidiaries

Proportion of effective

interest of Şahenk Family


interest

A Yapım 97.00 -- 97.00 96.87 0.13 97.00 Antur 96.38 3.60 99.98 96.18 3.80 99.98 Arena 99.98 0.02 100.00 97.88 2.08 99.96 Ayson 70.00 -- 70.00 66.61 3.39 70.00 Ayson Hydro 100.00 -- 100.00 66.61 3.39 70.00 Ayson Sondaj 100.00 -- 100.00 66.61 3.39 70.00 D Enerji 99.63 0.37 100.00 99.63 0.37 100.00 D Otel 100.00 -- 100.00 100.00 -- 100.00 Datmar 99.57 0.43 100.00 98.98 0.96 99.94 Doğuş Sağlıklı Yaşam 97.98 -- 97.98 97.98 -- 97.98 DG Finance 100.00 -- 100.00 100.00 -- 100.00 DOAŞ 73.78 -- 73.78 71.56 2.21 73.77 DO-ÇA 87.27 12.73 100.00 85.54 14.40 99.94 Doğuş Arge 92.72 7.28 100.00 92.71 7.29 100.00 Doğuş Auto Mısr JS 100.00 -- 100.00 71.57 2.21 73.78 Doğuş Auto Mısr LLC 99.00 -- 99.00 70.86 2.19 73.05 Doğuş Dalaman 100.00 -- 100.00 100.00 -- 100.00 Doğuş Didim 100.00 -- 100.00 100.00 -- 100.00 Doğuş E Alışveriş 100.00 -- 100.00 99.86 0.14 100.00 Doğuş Enerji 100.00 -- 100.00 99.63 0.37 100.00 Doğuş EOOD 100.00 -- 100.00 92.46 7.54 100.00 Doğuş Gayrimenkul 97.52 2.48 100.00 97.52 2.48 100.00 Doğuş GYO 91.48 -- 91.48 87.31 0.02 87.33 Doğuş Finance Ukraine 100.00 -- 100.00 100.00 -- 100.00 Doğuş Hava 100.00 -- 100.00 100.00 -- 100.00 Doğuş Hoteli 100.00 -- 100.00 100.00 -- 100.00 Doğuş Hoteli Sibenik 100.00 -- 100.00 100.00 -- 100.00 Doğuş Investment 100.00 -- 100.00 99.92 0.08 100.00 Doğuş İletişim 100.00 -- 100.00 99.86 0.14 100.00 Doğuş İnşaat 92.46 7.54 100.00 92.46 7.54 100.00 Dogus Insaat d.o.o. 100.00 -- 100.00 92.46 7.54 100.00 Dogus Insaat ES 100.00 -- 100.00 92.46 7.54 100.00 Doğuş İnşaat Limited 100.00 -- 100.00 92.46 7.54 100.00 Doğuş International 100.00 -- 100.00 92.69 7.31 100.00 Doğuş Lux 100.00 -- 100.00 100.00 -- 100.00 Doğuş Mandalina Razvitak 100.00 -- 100.00 92.46 7.54 100.00 Doğuş Marina 100.00 -- 100.00 100.00 -- 100.00 Doğuş Marina Upravljanje 100.00 -- 100.00 100.00 -- 100.00


51

25 Group enterprises (continued) 25.7 Subsidiaries (continued)

Name





Proportion of

ownership interest



subsidiaries




interest Dogus Maroc SARL 100.00 -- 100.00 92.46 7.54 100.00 D Marin Göcek 100.00 -- 100.00 100.00 -- 100.00 Doğuş Nakliyat 89.73 0.77 90.50 89.69 0.81 90.50 Doğuş Poland 100.00 -- 100.00 92.46 7.54 100.00 Doğuş Oto 100.00 -- 100.00 72.64 2.13 74.77 Doğuş SA 100.00 -- 100.00 95.18 3.44 98.62 Doğuş Sigorta 99.00 1.00 100.00 87.06 1.93 88.99 Doğuş Spor 100.00 -- 100.00 100.00 -- 100.00 Doğuş Telekom 100.00 -- 100.00 100.00 -- 100.00 Doğuş Turgutreis 100.00 -- 100.00 98.08 1.90 99.98 Doğuş Turizm 100.00 -- 100.00 100.00 -- 100.00 Doğuş Uydu 100.00 -- 100.00 98.63 0.17 98.80 Doğuş Yayın Grubu 100.00 -- 100.00 99.86 0.14 100.00 D-Auto Suisse SA 100.00 -- 100.00 71.59 2.22 73.81 Enformasyon 97.00 -- 97.00 96.87 0.13 97.00 E Elektronik 100.00 -- 100.00 99.86 0.14 100.00 Garanti Turizm 100.00 -- 100.00 98.74 0.83 99.57 Göktrans Turizm 100.00 -- 100.00 99.25 0.73 99.98 Genoto 100.00 -- 100.00 98.43 0.77 99.20 Istinye Park Gayrimenkul 100.00 -- 100.00 100.00 -- 100.00 Kapital Radyo 98.89 -- 98.89 98.75 0.14 98.89 Körfez Hava 100.00 -- 100.00 100.00 -- 100.00 Makro 100.00 -- 100.00 99.95 0.04 99.99 N Radyo 97.00 -- 97.00 96.86 0.13 96.99 NTV Avrupa 98.98 -- 98.98 98.84 0.14 98.98 NTV Radyo 97.00 -- 97.00 96.87 0.13 97.00 Sibenik Upravljanje 100.00 -- 100.00 100.00 -- 100.00 Sibenik Razvitak 100.00 -- 100.00 100.00 -- 100.00 Sititur 100.00 -- 100.00 100.00 -- 100.00 Şahintur 100.00 -- 100.00 100.00 -- 100.00 Tansaş Gıda 90.00 -- 90.00 90.00 -- 90.00 Teknik Mühendislik 99.70 -- 99.70 98.58 1.12 99.70 Voyager 99.08 0.92 100.00 99.06 0.94 100.00 Yonca Radyo 97.00 -- 97.00 96.87 0.13 97.00 2019 Radyo 97.00 -- 97.00 96.87 0.13 97.00


52

25 Group enterprises (continued) 25.8 Joint ventures

The table below sets out the Joint Ventures and shows the shareholding structure at 30 June 2011:

Name





Proportion of

ownership interest



subsidiaries




interest

Aslancık 33.33 -- 33.33 33.21 -- 33.21 Boyabat 33.22 -- 33.22 33.19 0.03 33.22 DAF 33.33 -- 33.33 33.33 -- 33.33 D Tes 25.00 -- 25.00 25.00 -- 25.00 Doğuş Alarko 37.50 -- 37.50 34.67 2.83 37.50 Doğuş Polat 50.00 -- 50.00 46.23 3.77 50.00 Doğuş Koray 50.00 -- 50.00 46.23 3.77 50.00 Doğuş Prestige 60.00 -- 60.00 55.48 4.52 60.00 Domenia 100.00 -- 100.00 23.95 0.93 24.88 Garanti Bank 24.23 0.66 24.89 23.95 0.93 24.88 Garanti Bilişim 100.00 -- 100.00 23.95 0.93 24.88 Garanti DPR (a) -- -- -- -- -- -- Garanti Faktoring 81.84 -- 81.84 19.60 0.77 20.37 Garanti Filo 100.00 -- 100.00 23.72 0.93 24.65 Garanti Holding B.V. 100.00 -- 100.00 23.95 0.93 24.88 Garanti Hizmet 100.00 -- 100.00 26.11 0.90 27.01 Garanti Konut 100.00 -- 100.00 23.95 0.93 24.88 Garanti Kültür 100.00 -- 100.00 23.95 0.93 24.88 Garanti Leasing 100.00 -- 100.00 23.72 0.93 24.65 Garanti Portföy 100.00 -- 100.00 23.95 0.93 24.88 Garanti Bank SA 100.00 -- 100.00 23.95 0.93 24.88 Garanti Yatırım 100.00 -- 100.00 23.95 0.93 24.88 Garanti Yatırım Ortaklığı (b) 0.30 -- 0.30 0.10 -- 0.10 G Netherlands 100.00 -- 100.00 23.95 0.93 24.88 GBI 100.00 -- 100.00 23.95 0.93 24.88 GB Moscow 100.00 -- 100.00 23.95 0.93 24.88 GEHAŞ 85.00 -- 85.00 20.34 0.93 21.27 Gülermak Doğuş 50.00 -- 50.00 46.23 3.77 50.00 GÖSAŞ 99.92 -- 99.92 23.93 0.93 24.86 Krone Doğuş 48.95 -- 48.95 35.31 1.06 36.37 Leasemart 100.00 -- 100.00 23.95 0.93 24.88 Meiller Doğuş 49.00 -- 49.00 35.07 1.08 36.15 Motoractive 100.00 -- 100.00 23.95 0.93 24.88 NCP Hoteli 62.50 -- 62.50 62.50 -- 62.50 NCP Marina Mandalina 40.00 -- 40.00 40.00 -- 40.00 Ralfi 100.00 -- 100.00 23.95 0.93 24.88 TÜVTURK Kuzey 33.33 -- 33.33 23.86 0.74 24.60 TÜVTURK Güney 33.33 -- 33.33 23.86 0.74 24.60


53

25 Group enterprises (continued) 25.8 Joint ventures (continued)

Name





Proportion of

ownership interest

Proportion of

effective interest of Doğuş Holding





interest TÜVTURK İstanbul 66.40 -- 66.40 23.86 0.74 24.60 T-2 Capital (a) -- -- -- -- -- -- YMDYYB 26.00 -- 26.00 24.04 1.96 26.00

(a) Garanti DPR and T-2 Capital are special purpose entities established for Garanti Bank’s securitisation and subordinated debt transactions, respectively. The Group does not have any shareholding interest in these companies.

(b) Although the ownership rate of Garanti Bank on this company is less than 50 percent, Garanti Bank has the controlling power on the operations and financial policies of this company.

25.9 Associates

The table below sets out the associates and their shareholding structure at 30 June 2011:

Name


and its Subsidiaries



Proportion of

ownership interest



Subsidiaries




interest İstinye Yönetim Hizmetleri 42.00 -- 42.00 42.00 -- 42.00 Leaseplan 100.00 -- 100.00 38.14 0.85 38.99 LPD Holding 49.00 -- 49.00 38.14 0.85 38.99 VDF Faktoring (a) 100.00 -- 100.00 38.14 0.85 38.99 VDF Tüketici 49.00 -- 49.00 35.35 1.06 36.41 VDF Servis Holding 49.00 -- 49.00 38.14 0.85 38.99 VDF Sigorta (a) 100.00 -- 100.00 38.14 0.85 38.99 Yüce Auto 50.00 -- 50.00 35.78 1.11 36.89

(a) Consolidated under VDF Servis Holding.


54

25 Group enterprises (continued) 25.10 Other information

The major changes in Group enterprises during the six-month period ended 30 June 2011 are summarised in the following paragraphs:

Establishment of new entities

• On 9 March 2011, Doğuş Yayın has established Doğuş E Alışveriş ve Ticaret Anonim Şirketi.

Change in structure/ title

• On 21 March 2011, Doğuş-GE Gayrimenkul Yatırım Ortaklığı Anonim Şirketi has changed its legal name as “Doğuş Gayrimenkul Yatırım Ortaklığı Anonim Şirketi”.

• On 27 January 2011, D Netherlands Holding B.V. has changed its legal name as “Garanti Holding B.V.”.

• On 27 January 2011, Doğuş GE B.V. has changed its legal name as “G Netherlands B.V.”.

• On 1 June 2011, D Tay Sağlıklı Yaşam ve Danışmanlık Hizmetleri Ticaret Anonim Şirketi has changed its legal name as “Doğuş Sağlıklı Yaşam ve Danışmanlık Hizmetleri Ticaret Anonim Şirketi”.

Liquidation of entities

• On 15 March 2011, liquidation of Cappadocia Investments Limited was finalised.

• Ayson Hydro, Doğuş Auto Mısr LLC, Doğuş Auto Mısır JS, Doğuş İnşaat d.o.o., , Doğuş Lux, Doğuş Prestige, DG Finance, DAF, Doğuş Mandalina Razvitak and Makro are under liquidation as at the reporting date.


55

26 Significant events 26.1 At the meeting of Garanti Bank’s board of directors held on 22 October 2010, it has been

resolved to issue TL denominated bank bonds and/or debentures up to an amount of TL 3,000,000 thousand in various maturities in the domestic market. Accordingly, the related approvals were received, and the issuance of TL denominated bank bonds amounting TL 1,000,000 thousand with one-year maturity and annual compound interest rate of 7.68091 percent started on 24 January 2011 and was completed on 31 January 2011.

26.2 According to share purchase agreement dated 12 November 2010, Doğuş Holding agreed to purchase shares with nominal value of TL 23,913,900 in Doğuş GYO representing 25.5 percent of the share capital from General Electric Capital Corporation for a consideration of USD 28,000 thousand. On 3 January 2011, the purchase price has been paid to the General Electric Capital Corporation and shares have been transferred to Doğuş Holding.

26.3 At 24 February 2011, an agreement has been signed between Doğuş Yayın Grubu and Saving Deposit Insurance Fund for the acquisition of “Radyo 5”.

26.4 On 9 March 2011, Doğuş E Alışveriş ve Ticaret Anonim Şirketi has been established. The area of operation of the entity is private online shopping.

26.5 The “N101” radio channel brand has been changed to “Kapital” brand and the content of broadcast has been changed from Turkish to foreign content.

26.6 On 1 November 2010, Doğuş Holding and BBVA signed a share purchase agreement. On 22 March 2011, according to this agreement, 26,418,840,000 shares in Garanti Bank representing 6.29 percent of the share capital of Garanti Bank owned by Doğuş Holding has been transferred to BBVA for a consideration of USD 2,067 million including USD 5 million late payment interest. The approvals of BRSA, CMB, Republic of Turkey Prime Ministry Undersecretariat of Treasury, The Central Bank of Spain, The Dutch Central Bank, The National Bank of Romania and European Commission have been obtained between the period of 1 November 2010 and 22 March 2011.

In addition, on 1 November 2010, Doguş Holding and BBVA signed a shareholders’ agreement which was effective from the date of completion of aforementioned share purchase agreement. This new shareholders’ agreement has replaced the previously signed shareholders’ agreement between GE Araştırma Müşavirlik A.Ş. and Doğuş Holding dated 22 December 2005. According to the new shareholders’ agreement with BBVA, after five years period starting from the date of this new agreement, BBVA has the right to purchase additional 1 percent of shares held by Doğuş Holding in Garanti Bank for the average price of the last 30 days’ quoted prices.

26.7 Doğuş İnşaat, due to the unrest in Libya that started in February 2011 and still continues as of the date of this report, decided to suspend its operations in Sirte-Libya (Al Tahady University project) based on the force majeure article of the Contract (article 36) and evacuated its personnel. There have been no incidents or damage to the construction. The total assets of the project amount to TL 215,615 thousand and total liabilities of the project amount to TL 112,196 thousand in the condensed consolidated interim financial statements. Ultimate outcome of the unrest cannot presently be determined.


56

26 Significant events (continued)

26.8 On 7 April 2011, one of the shareholder of Garanti Bank, BBVA, has acquired 503,160,000 shares at a total nominal value of TL 5,032 thousand and increased its ownership in the Garanti Bank’s share capital to 25.01 percent. As per the agreement between Doğuş Holding and BBVA, if any of the parties acquires additional shares during the next five years following the date of the shareholders’ agreement, it is required to offer half of the acquired shares to other party, in case that other party does not accept to purchase the offered shares, usufruct rights shall be established on the voting rights of such shares in favour of other party. Accordingly, although BBVA has acquired additional shares in April, this does not affect their jointly control on the Garanti Bank’s management.

26.9 In April 2011, Garanti Bank has issued;

• bills with total face value of TL 179,625 thousand, a maturity of 176 days and interest rate of 8.41 percent in the domestic market, and

• USD 120 million 10-year fixed-rate notes with a maturity date of 20 April 2021 and coupon rate of 6.25 percent and USD 72 million 5-year floating-rate notes with a maturity date of 20 April 2016 and a coupon rate of 3-month libor + 2.50 percent in the international markets.

26.10 On 31 May 2011, in accordance with the shareholders' agreement dated 21 June 2007, Garanti Bank has decided to use the option regarding sale of its 20 percent shares in Eureko Sigorta Anonim Şirketi to Eureko B.V. and signed a share purchase agreement with Eureko B.V.. Following the receipt of legal approvals required under the agreement, the related shares have been transferred for a consideration of Euro 16,765 thousand.

26.11 A part of Garanti Bank’s non-performing loan portfolio amounting to TL 115,888 thousands was sold to a local asset management company at a sale price of TL 12,915 thousands. The sale price is fully recognised as income under other operating income as such receivables were fully provided in the accompanying condensed consolidated financial statements before the sale.

27 Subsequent events 27.1 In accordance with the item (d) of article 19 of law on the Establishment of Radio and

Television Enterprises and Their Broadcasts (“RTÜK”) Law No. 6111 was legislated on 3 March 2011, there are new constraints regulating territorial broadcasting rights and market penetration ratios of the media companies. RTÜK has allowed time to media companies to comply with the new law until December 2011. The Group has made assessment on the potential effects of these changes on the condensed consolidated interim financial statements at the reporting date and started taking necessary actions in order to comply with the new law.

27.2 On 26 July 2011, Doğuş Yayın Grubu has established Dogus Media Group GmbH in Berlin, Germany. The area of operation of the entity is distributing Turkish-language television programs and the marketing of air time for advertisement and all related acts.

27.3 In July and August 2011, Gülermak Doğuş has collected USD 275.8 million (Group share: USD 137.9 million) of its receivables from İstanbul Metropolitan and repaid USD 256 million (Group share: USD 128 million) of its credit debt by this collection.

27.4 On 2 August 2011, Doğuş Holding has established Doğuş Yeni İnternet Reklam Hizmetleri Anonim Şirketi.

27.5 In August 2011, Doğuş Holding has purchased the publicly traded shares of DOAŞ with a total nominal value of TL 935 thousand representing 253,986 shares in total.

27.6 On 26 August 2011, DOAŞ has paid a penalty fee to the government authorities amounting to TL 37,340 thousand with respect to the investigation of Turkish Competition Authority.

Appendix I Doğuş Holding Anonim Şirketi and its Subsidiaries Supplementary Information Convenience Translation to US Dollar 30 June 2011

57

The US Dollar (“USD”) amounts shown in the condensed consolidated interim statement of financial position and condensed consolidated interim statement of comprehensive income on the following pages have been included solely for the convenience of the reader. For the current period’s condensed consolidated interim financial statements, USD amounts are translated from TL condensed consolidated interim financial statements using the official TL exchange rate of 1.6302 TL/USD prevailing on 30 June 2011. For the prior periods’ consolidated financial statements, USD amounts are translated from TL consolidated statement of financial position and TL consolidated statement of comprehensive income using the official TL exchange rates of 1.5483 TL/USD prevailing on 31 March 2011, 1.5460 TL/USD prevailing on 31 December 2010, 1.5747 TL/USD prevailing on 30 June 2010 and 1.5215 TL/USD prevailing on 31 March 2010.

Such translation should not be construed as a representation that the TL amounts have been converted into USD pursuant to the requirements of IFRS or Generally Accepted Accounting Principles in the United States of America or in any other country.

Appendix I.1 Doğuş Holding Anonim Şirketi and its Subsidiaries Condensed Consolidated Interim Statement of Financial Position As at 30 June 2011 Amounts translated into thousands of USD for convenience purposes only

58

30 June 2011 31 December 2010 Assets Property and equipment 2,185,847 2,141,195 Intangible assets 629,499 720,823 Investments in debt securities 4,176,375 5,865,390 Investments in equity securities 26,205 47,312 Accounts receivable 30,283 8,888 Banking loans and advances to customers 6,844,304 8,070,252 Banking loans and advances to banks 698,369 889,784 Financial assets at fair value through profit or loss 60,775 70,322 Investment property 971,824 988,842 Other non-current assets 228,066 295,574 Deferred tax assets 80,381 153,741 Total non-current assets 15,931,928 19,252,123 Inventories 370,201 365,552 Accounts receivable 982,788 1,221,491 Due from related parties 126,056 82,012 Other current assets 997,695 1,002,083 Investments in debt securities 1,123,439 2,033,153 Banking loans and advances to customers 5,070,635 5,506,963 Banking loans and advances to banks 715,261 1,029,146 Financial assets at fair value through profit or loss 140,382 86,387 Cash and cash equivalents 3,485,169 1,300,735 Total current assets 13,011,626 12,627,522 Total assets 28,943,554 31,879,645

Appendix I.1 Doğuş Holding Anonim Şirketi and its Subsidiaries Condensed Consolidated Interim Statement of Financial Position (continued) As at 30 June 2011 Amounts translated into thousands of USD for convenience purposes only

59

30 June 2011 31 December 2010 Equity Paid-in capital 1,260,761 1,329,426 Capital stock held by subsidiaries (60,578) (63,878) Share premium 97,749 103,072 Fair value reserves 116,482 313,535 Translation reserve 23,607 2,179 Hedging reserve (4,120) (5,083) Revaluation surplus 656,229 702,586 Legal reserves 180,420 174,972 Retained earnings 3,609,899 2,424,948 Total equity attributable to owners of the Company

5,880,449 4,981,757 Non-controlling interests Şahenk Family 62,547 64,871 Others 128,176 115,568 Total non-controlling interests 190,723 180,439 Total equity 6,071,172 5,162,196 Liabilities Long-term bank borrowings 3,449,614 4,056,338 Subordinated liabilities 152,948 191,309 Deposits 221,430 249,432 Bonds payable 191,260 -- Obligations under repurchase agreements 150,539 -- Deferred tax liabilities 108,000 100,834 Other non-current liabilities 462,746 449,388 Total non-current liabilities 4,736,537 5,047,301 Subordinated liabilities 960 -- Short-term bank borrowings 1,647,257 1,727,888 Short-term portion of long-term bank borrowings 624,759 658,474 Bonds payable 306,421 -- Deposits 11,917,186 15,154,706 Obligations under repurchase agreements 1,936,891 2,295,451 Accounts payable 674,263 738,263 Due to related parties 7,468 40,047 Taxes payable on income 38,148 64,217 Other current liabilities 982,492 991,102 Total current liabilities 18,135,845 21,670,148 Total liabilities 22,872,382 26,717,449 Total equity and liabilities 28,943,554 31,879,645

Appendix I.2 Doğuş Holding Anonim Şirketi and its Subsidiaries Condensed Consolidated Interim Statement of Comprehensive Income For the Six-Month Period Ended 30 June 2011 Amounts translated into thousands of USD for convenience purposes only

60


30 June 2011


30 June 2011


30 June 2010


30 June 2010 Revenues 2,978,936 1,444,868 2,544,875 1,325,112 Cost of revenues (2,197,821) (1,081,398) (1,663,480) (898,887)

Gross profit 781,115 363,470 881,395 426,225 Administrative expenses (377,519) (157,257) (365,393) (164,123)

Selling, marketing and distribution expenses (64,385) (34,399) (57,402) (29,545)

Impairment (losses) / gain, net (104,698) (15,367) 4,053 13,243 Trading gain, net 63,488 17,652 23,681 37,447

Other operating income / (expense), net 1,404,891 4,334 (40,871) (24,983)

Result from operating activities 1,702,892 178,433 445,463 258,264

Finance income 196,629 155,415 176,391 55,468

Finance expense (323,747) (187,679) (218,258) (132,104)

Net finance income / (costs) (127,118) (32,264) (41,867) (76,636)

Share of (loss) / profit of equity accounted investees

(1,756) 1,311 11,539 5,087

Profit before income tax 1,574,018 147,480 415,135 186,715

Income tax expense (183,137) (42,560) (84,210) (28,814)

Profit for the period 1,390,881 104,920 330,925 157,901

Other comprehensive income

Revaluation of property and equipment -- -- (1,257) (1,257)

Change in fair value of available-for-sale financial assets

(210,451) (26,543) (22,948) (58,192)

Change in translation reserve 21,541 13,268 (37,904) (32,043)

Effective portion of changes in fair value of cash flow hedges

701 2 (1,659) (962)

Income tax on other comprehensive income 30,341 5,216 11,974 (2,458)

Other comprehensive income / (expense) for the period, net of income tax

(157,868) (7,967) (51,794) (94,912)

Total comprehensive income for the period

1,233,013 96,953 279,131 62,989

Profit attributable to: Owners of the Company 1,378,514 95,218 316,644 145,912

Non-controlling interests 12,367 9,702 14,281 11,989


1,390,881 104,920 330,925 157,901

Total comprehensive income attributable to:

Owners of the Company 1,221,035 87,537 265,722 51,613

Non-controlling interests 11,978 9,416 13,409 11,376


1,233,013 96,953 279,131 62,989

doğuş holding anonim Şirketi and its subsidiaries

Documents