contents · 4 5 türktraktö glance about türktraktör türktraktör, 2014 annual report local...

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Contents

Chapter 1 - Company Profile

TürkTrakTör aT a Glance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

a bouT Tür kTr a kTör . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

MISSIon a nD V ISIon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

ProDucT r a nGe

• Tractors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• Agr icu ltura l Equipments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• Construct ion Equipments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Chapter 2 - 2014 Overview

new PlanT oPenInG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The 60Tha nnI V er Sa ry ofTür kTr a kTör . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

conSTrucTIon equIPMenTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

TTJ awa r D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

awarDS anD accoMPlIShMenTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2014 hIGhlIGhTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The SyMbol of Power Tr6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2nD hanD ProJecT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Chapter 4 - Performance in 2014

The aGrIculTural SecTor anD TracTor MarkeT . . . . . . . . . . . . . . . . . . . . . . . . . .

r&D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Chapter 5 - Sustainability

occuPaTIonal healTh anD SafeTy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

qua lIT y . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

en V IronMenT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

enerGy effIcIency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

cor Por aTeSocI a l r eSPonSIbIlIT y . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

huM a n r eSourceS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

RISK MANAGEMENT AND THE

ACTIVITIES OF RISK ASSESSMENT

COMMITTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

CORPORATE GOVERNANCE . . . . . . . . . . . .

BOARD OF DIRECTORS . . . . . . . . . . . . . . . . . . . . . .

REMUNERATION POLICY . . . . . . . . . . . . . . . .

LEGAL EXPLANATIONS . . . . . . . . . . . . . . . . . . . .

THE AMENDMENTS TO THE

ARTICLES OF ASSOCIATION . . . . . . . . . . . .

THE COMMITMENT REPORT . . . . . . . . . . .

DECLARATIONS FOR

INDEPENDENCY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

AGENDA OF ORDINARY

GENERAL ASSEMBLY

DATED 18.03.2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

DIVIDEND PROPOSAL . . . . . . . . . . . . . . . . . . . . . . . . .

PROFIT DISTRIBUTION TABLE . . . . . . .

AUDIT COMMITTEE REPORT . . . . . . . . . . .

FINANCIAL STATEMENTS AND

INDEPENDENT AUDITOR’S

REPORT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Chapter 3 - Messages from the Management

boarD of DIrecTorS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

r eV Iew of The ch a Ir M a n . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

boa r D of DIr ecTor S’ r ePorT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

ToP M a naGeMenT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

MeSSaGe froM The ceo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

MIleSToneS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Sh a r eholDer STrucTur e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

In V eSTor r el aTIonS a nD bIST Per for M a nce . . . . . . . . . . . . . . . . . . . . . .

DI V IDenD PolIcy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

cor Por aTe GoV er na nce . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4-5

6-7

7

8-9

10-11

12-13

16-17

18-19

20-21

22-23

24-25

26-33

34-35

36-37

38-39

40-41

42-43

44-47

48-49

50-51

52

53-55

56

57

58-63

64-67

68

69

70

71

72-73

74-77

80-81

82-93

94-97

98

99-101

102

103

104-105

106

107

108-109

110

111-157

TürkTraktör, 2014 Annual Report

4 5

TürkTraktör at a Glance About TürkTraktör TürkTraktör, 2014 Annual Report

L OC A L E X P OR T T O TA L

SA LES UNIT S

SA LES R E V ENUE (MILLION T L )

L OC A L E X P OR T T O TA L

TürkTraktör at a Glance

W ith it s cus t omer-focused approach, superior technologic al infr a s truc t ure,

concep t of innovation and qualit y serv ice and World-cl a ss m anufac t uring

pl ant s, t ürk tr ak t ör adds value t o the sec t or and it s cus t omer s.

COMPETITIVE ADVANTAGES

Leader in Turkish tractor market for the last 8 yearsExperience of 60 years in the sector

R&D competencyBroadest distribution network in Turkey

Powerful brands with high recognitionStrong shareholder structure

High second-hand value

Manufacturing technology and high qualitySuperior after-sales service

PROFITA BILIT Y

GR

OS

S P

RO

FIT

MA

RG

IN

22%2013

21%2012

18%201 4

OP

ER

AT

ING

MA

RG

IN

15%2012

15%2013

11%201 4

EB

ITD

A

MA

RG

IN

16%2012

16%2013

12%201 4

NE

T

MA

RG

IN

14%2012

13%2013

10%201 4

HE A DCOUN T

M A NUFAC T URING UNIT S

38,

53

0

2,3

78

2012

2,5

72

2013

3,0

40

2014

39,5

74

20122013

45,

823

2014

H AV ING ACHIE V ED

SUS TA IN A BLE

GROw T H w I T H I T S

EFFICIEN T B A L A NCE

SHEE T M A N AGEMEN T

A ND COMP E T EN T

HUM A N R E SOURCE S,

T üR K T R A K T öR A L SO

P ER FOR MED V ERY

SUCCE SSF ULLY IN 2014.

OPER AT ING PROFIT (million)

2014

2014

2014

2012

2012

2012

2013

2013

2013

EBIT DA (million)

NE T PROFIT (million)

İZMİR Construction Equipment FacilityOpening 18.09.2014Covered Area 3,157 m2

Total Area 6,396 m2

ANKARA PlantEngine and transmission manufacturing centerOpening 25.06.1954Covered Area 82,000 m2

Total Area 257,325 m2

ANKARA Construction Equipment FacilityOpening 30.10.2014Covered Area 4,200 m2

Total Area 6,200 m2

ANKARA AKYURT Spare Part WarehouseOpening 01.04.2010Covered Area 18,279 m2


ERENLER PlantPaintshop and assembly processOpening 17.06.2014Covered Area 68,613 m2


297

294

325

331

313

350

261

268

280

1,790

30,027

2,723

45,893

934

15,866

1,485

2 4,62 4

2,175

39,026

690

14,402

1,363

25,597

1,974

40,162

611

14,565

2012

2012

2012

2012

2012

2012

2013

2013

2013

2013

2013

2013

2014

2014

2014

2014

2014

2014

6 7

TürkTraktör, 2014 Annual ReportTürkTraktör at a Glance About TürkTraktör

TürkTraktör,the Pride of Turkey

t ürk tr ak t ör, the l arges t tr ac t or m anufac t urer of t urke y, is taking it s success int o

the World W ith it s v ision of dri v ing the modern agricult ure, it s 60 y e ar s of e xpert

e xperience, it s r&d p oW er, and it s foresight and s trong s tr ategies for the fu t ure.

ONE of the most important industrial enterprises in Turkey, TürkTraktör was born in 1954 and has now reached over 130 countries of the world with its exports.

The Company shapes its activities in line with its vision of driving the modern agriculture. Thanks to its ever-expanding manufacturing ca-pacity and constantly improving quality stand-ards, it is the largest tractor manufacturer in Turkey. TürkTraktör has triumphantly brought its tractors, built upon the hard work and care of Turkish engineers, to the world. The Company continues to lead in the sector through the impor-tance given to R&D and the innovations and ac-complishments offered.

With its 60 years of expert experience, Türk-Traktör distinguishes itself to a significant extent from its competitors, thanks to its competency, especially in the field of R&D. As a result of its know-how in this field, the Company was accepted as the R&D Center by CNHI in 1999 and has un-dertaken new responsibilities in the international production network of CNHI. TürkTraktör was registered by the Ministry of Science, Industry and Technology as the R&D Center in accordance with Law No. 5746 on the Support of Research and Development Activities in 2009. Powered by its sustainable financial performance and strong corporate infrastructure, TürkTraktör has been steadily continuing to invest in the field of R&D while maintaining its competitive superiority and productive competency.

TürkTraktör’s manufacturing plants are equipped with gear and heat treatment facilities, over 400 CNC tooling machines, engine manufac-turing facilities, paint shops, body and assembly lines as well as modern quality control labs, en-gine and body testing equipment, together with computer-aided design and production infrastruc-ture, all of which reflect Koç Holding’s profession-al management approach and the competency of

CNHI in the field of agricultural equipment man-ufacturing ◼

A WORLD GIANT AT INTERNATIONAL STANDARDSTürkTraktör gives great importance to certification processes and is well-aware of the responsibility car-rying out manufacturing activities at international standards has imparted to it. TürkTraktör acquired the ISO 9001:2000 certificate with zero errors on February 25, 2005 and the ISO 14001 Environmen-tal Management System Certificate for its “Industrial Waste Water Treatment Plant” on October 17, 2005. Thanks to the practices actively implemented with the active participation of the employees under the Safety Culture process, which has become a life style at Türk-Traktör, the working environment and manufacturing processes are continuously being improved. Through the projects carried out, after successfully completing the audits concerning occupational health and safety practices, TürkTraktör acquired the BS OHSAS 18001 Occupational Health and Safety Management System certificate. TürkTraktör is also the first company in Turkey to acquire the TS ISO/IEC 27001 Information Security Management System certificate. Attract-ing interest with its innovative practices and quali-ty customer service, TürkTraktör has also acquired the ISO 10002 Customer Satisfaction and Customer Complaint Management Certificate, first in its sector, thanks to its success in the New Holland Call Center’s Customer Complaint Handling Process. In addition, in 2012, TürkTraktör acquired the certificate for the ISO 50001 Energy Management System, which is a standard focused on the identification of energy needs, monitoring and quantifying the energy consumption of organizations, as well as the certificate for achieving the ISO 14064 Greenhouse Gas Emissions Reduction Standard, which is a standard developed for the pur-pose of classifying greenhouse gas changes in the global atmosphere, and became the first company to acquire the certificates for both standards.

Manufacturing 45,823 tractors and reporting an

MISSIONwith our experience over half a century and reliance to the Koç Group, as the leader of the domestic market, empowered by the prestige and the global leadership of CNHI with it is well- known brands, New Holland, Case IH and Steyr, by developing our own technology and flexible manufacturing possibilities, by introducing modern and technically advanced agricultural equipment to help our customers to become more productive, by delivering the best experience to our customers in sales and after sales services; we create value for our customers, country, employees, dealers, business partners and our shareholders as a driving force for modern agriculture ◼

VISIONTo be the driving force for modern agriculture-today and tomorrow ◼

Mission and Vision

operational profit of 297 million TL as of the end of 2014, TürkTraktör has a share of 50% in the domestic market and is an international player with exports to over 130 countries. Thanks to its deep-rooted corpo-rate culture, the Company has an established custom-er base and develops relationships with its customers based on reciprocal trust through its 246 tractor and spare part dealers and 509 after-sales service points covering all parts of Turkey ◼

WORLD-CLASS MANUFACTURING FACILITIES SHOWN AS GOOD EXAMPLESTürkTraktör’s manufacturing facilities, with its 3,040 employees, who have qualifications and experience above the sector average, is capable of manufacturing New Holland, Case IH and Steyr branded tractors si-multaneously. Housing an advanced R&D Center for the design and manufacture development require-ments of the CNHI international manufacturing in-frastructure, TürkTraktör facilities is the worldwide engineering center and the main production center for New Holland TDD and Case IH JX series tractors, sole manufacturing center of Utility Light series tractors and transmissions, the only manufacturing and engi-neering center of CNHI for TD driveline series and the main producer of S8000 engines.

Looking to the future with confidence and hope thanks to its strong strategies, TürkTraktör entered the construction equipment market at the end of 2013 with Case and New Holland products such as tractor backhoe loaders, crawler excavators, skid steer loaders, compact wheel loaders, wheel loaders, mini excavators, tele handlers, adding a new dimension to its corporate development ◼

STRATEGIC PRIORITIESOperating under the sense of responsibility imparted to it by its status as one of the most deep-rooted industrial establishments in Turkey, TürkTraktör primarily pursues the following strategies when making its investments and fu-ture plans:• To compete at the highest level with internation-al manufacturers operating in the same segment,• To follow developments on the world markets as well as innovations in the sector,• To establish a sustainable image as a company offering advantageous prices through investments in R&D and brand recognition in domestic and in-ternational markets,• To protect profitability and shareholder interests through increases in quantities and market share,• To maintain performance stability through a balanced EBITDA, high shareholder equity com-parable with the leading industrial establishments in the world, and asset profitability,• To ensure high dividend yields ◼

T üR K T R A K T öR

H A S A SH A R E OF

50%

IN T HE

D OME S T IC

M A R K E T

A ND IS A N

IN T ER N AT ION A L

P L AY ER w I T H

E X P OR T S T O

O V ER

130

COUN T R IE S.

8 9

TürkTraktör, 2014 Annual ReportTürkTraktör at a Glance Product Range / Tractors

LOCAL PRODUCTS

T 480S

T480S 2wD > 48 hPT480S 4wD > 48 hP

TTB

TT 50b > 50 hPTT 55b > 55 hPTT 65b > 65 hP

TT

TT 50 > 50 hPTT 55 > 55 hPTT 65 > 65 hPTT 75 > 72 hP

IMPORTED PRODUCTS

TCF

Tc25f > 22 hPTc30f > 25 hPTc70f > 66 hP

LOCAL PRODUCTS

JXC

55 > 55 hP65 > 65 hP75 > 75 hP

Utility Light

55 > 55 hP65 > 65 hP75 > 75 hP

IMPORTED PRODUCTS

Quantum N Quantum 75N > 78 HPQuantum 85N > 88 HPQuantum 95N > 98 HP

JXU

JXU 95 > 96 HPJXU 105 > 106 HPJXU 115 > 113 HP

Maxxum CVX

Maxxum 110 CVX > 112 HPMaxxum 120 CVX > 121 HPMaxxum 130 CVX > 132 HP

Puma

Puma 130 > 131 HPPuma 145 > 146 HPPuma 160 > 160 HPPuma 170 > 167 HPPuma 185 > 185 HPPuma 185 CVX > 185 HPPuma 215 > 215 HPPuma 230 CVX > 228 HP

Steyr*

Compact 4055 S > 55 HPCompact 4065 S > 65 HP

Product Range

TTJ

TT 50J > 50 hPTT 55J > 55 hPTT 65J > 65 hPTT 75J > 72 hP

56S

55-56S > 55 HP65-56S > 65 HP75-56S > 75 HP

Utility Light*

55 > 55 hP65 > 65 hP75 > 75 hP

TDS

TD 65S > 65 hPTD 75S > 72 hPTD 80S > 80 hP

TD4B

TD 4.65b > 65 hPTD 4.75b > 72 hPTD 4.80b > 80 hPTD 4.90b > 88 hP

TDD

TD 65D > 65 hPTD 75D > 75 hPTD 80D > 83 hPTD 90D > 88 hPTD 100D > 98 hPTD 110D > 110 hP

JX

70 > 65 hP75 > 75 hP80 > 80 hP90 > 88 hP100 > 98 hP110 > 110 hP

Utility Medium*

85 > 85 hP95 > 95 hP105 > 105 hP115 > 115 hP

Farmall U

Farmall 105 U > 107 HPFarmall 115 U > 114 HP

Farmall U Pro

Farmall 105 U Pro > 107 HPFarmall 115 U Pro > 114 HP

Maxxum

Maxxum 110 > 112 HPMaxxum 120 > 121 HPMaxxum 140 > 141 HP

Magnum

Magnum 260 > 257 HPMagnum 315 > 311 HPMagnum 340 > 340 HP

TDD Delta

TD 75 Delta> 75HPTD 90 Delta > 88HPTD 100 Delta > 98 HPTD 110 Delta > 110 HP

Utility Medium*

85 > 85 hP95 > 95 hP105 > 105 hP115 > 115 hP

TR6

Tr 120 > 112 hPTr 130 > 122 hPTr 140 > 132 hP

T4 F/N/V T4.75 V > 78 hPT4.75 n > 78 hPT4.75 f > 78 hPT4.85 f > 88 hPT4.95 f > 97 hP

T5000

T5050 > 96 hPT5060 > 106 hPT5070 > 113 hP

T5 Electro Command

T5.105 Electro Command > 107 HPT5.115 Electro Command > 114 HP

T5 Hi-lo

T5.105 > 107 hPT5.115 > 114 hP

T6 AC

T6.140 ac > 112 hPT6.150 ac > 121 hPT6.160 ac > 132 hP

T6000

T6020 > 112 hPT6050 > 127 hPT6060 > 132 hPT6070 > 141 hPT6080 > 155 hPT6090 > 165 hP

T7000 & AC

T7040 > 182 hPT7040 ac > 182 hPT7060 > 213 hPT7070 ac > 225 hP

T8

T8.300 > 257 hPT8.360 > 311 hPT8.390 > 340 hP

TRACTORS New products

* Only for export markets

10 11

TürkTraktör, 2014 Annual ReportTürkTraktör at a Glance Product Range / Agricultural Equipments

Pneumatic Precision Planters DM40S > 4 rows*DM60S > 6 rows*DM60T*BM40S > 4 rows**BM50S > 5 rows**BM60S > 6 rows**bM60T*** Disc type ** Coulter type

Power HarrowsDR 250M(4V) > 250 cmDR 300M(4V) > 300 cmDR 400M(4V) > 400 cm

Square Balers KB290 2 Knotters NonchopperKB390 3 Knotters NonchopperKB390H 3 Knotters with Chopper

Pneumatic Precision Planters DV40r *DV60r *DV60T Telescopic Chassis *cV40r **cV50r **cV60r **CV60T Telescopic Chassis **DD40r ***DD60r ***DD80r ***DD100r ***DD120r **** Disc type ** Coulter type*** No-till seed drill

Cotton Pickers Cotton Express 420 (4-5 rows) > 275 HPModule Express 635 > 400 HP

Self-Propelled SprayersPatriot 3330 > 250 HP

Square Balers LB324 > 80X70X260LB334 > 80X90X260LB424 > 120X70X260LB434 > 120X90X260

Square Balers BC5040 HB > 3 Knotters with ChopperBC5060 ET > 2 Knotters NonchopperBIG BALER 870 > 80X70X260BIG BALER 890 > 80X90X260BIG BALER 1270 > 120X70X260BIG BALER 1290 > 120X90X260

Combine HarvestersTc 5070 > 207 hPCX 5080 > 238 HPCX 5090 > 272 HPCX 6080 > 272 HPCX 6090 > 299 HPCX 8070 > 326 HPcr 9080 > 489 hP

New Holland Corn Headers5 rows rigid chassis6 rows rigid chassis6 rows folding chassis

Fantini Corn HeadersL03 rigid > 5 and 6 rows

Sprayers SA400 > 400 lt*SA600 > 600 lt*SA1000 > 1000 lt.*SA1600 > 1600 lt.*SA2000 > 2000lt.*SA2002 > 2000lt.*SA2002 HSB Tower > 2000lt.*SP600 > 600lt.**SP800 > 800lt.**SP1000 > 1000lt.**SP2000 > 2000 lt.**Berthoud Mounted Type > 400 lt*Orchard type sprayer **Field type sprayer

Mower ConditionersH 7220 > 280 cmH 7230 > 320 cmRDB 313 > 400 cm

Self-Propelled Forage Harvesters fr 450 > 424 hPfr 500 > 500 hPfr 600 > 600 hPfr 700 > 685 hPfr 850 > 824 hP

Pedrotti Grain DriersSuper 120 > 10-12 ton Super 180 > 16-18 tonLarge 240 > 20-24 tonXLM 350 > 30-35 ton

Rotary TillersTF 160 > 160 cmTF 180 > 185 cmTF 210(4V) > 210 cmTF 240(4V) > 235 cmTF 160K > 160 cmTF 180K > 185 cmTF 210K > 210 cmTF 180M(4V) > 185 cmTF 205M(4V) > 210 cmTF 230M(4V) > 235 cmTF 265M(4V) > 280 cmTF 300M(4V) > 290 cm

Round Balers BR6090 RF > 125X120cmBR6090 RC > 125X120cmBR6090 Combi > 125X120cm RB 150 > 120x90-150 cmRB 180 > 120x90-180 cm

Olive – Grape HarvestersVL5080 Plus9060 la9090 XO

Product RangeAGRICULTURAL EQUIPMENTS New products

12 13

TürkTraktör, 2014 Annual ReportTürkTraktör at a Glance Product Range / Construction Equipments

Crawler ExcavatorCX130B 14,3 tonCX210B 20,9 tonCX250C 24,8 tonCX300C 29,9 tonCX370C 37,05 tonCX470C 48,2 tonCX700C 69,3 ton

Mini Excavator CX15B 1,6 tonCX17B 1,7 tonCX18B 1,8 tonCX26B 2,6 tonCX30B 3,0 tonCX35B 3,5 tonCX39B 3,9 tonCX45B 4,5 tonCX50B 5,0 ton

Wheel Loader 521F 11 ton621F 13 ton721F 15 ton821F 18 ton921F 20 ton1021F 24 ton1121F 28 ton

Compact Wheel Loader W50 4,800 kg W60 5,085 kg W70 5,580 kgW80 5,930 kg

Skid Steer Loader SR130 590 kgSR150 680 kgSR175 790 kgSV185 840 kgSR200 905 kgSR220 1,000 kgSR250 1,135 kgSV250 1,135 kgSV300 1,360 kg

Tractor Backhoe Loader B110B Small front wheels B115B 4 4 big wheels

Product Range

Mini Excavator E16B 1,6 tonE18B 1,8 tonE26B 2,6 tonE29B 2,9 tonE35B 3,5 tonE39B 3,9 tonE45B 4,5 tonE50B 5,0 ton

Wheel Loader W110C 11 tonW130C 13 tonW170C 15 tonW190C 18 tonW230C 20 tonW270C 24 tonW300C 28 ton

Skid Steer LoaderL213 590 kgL215 680 kgL218 818 kgL220 905 kgL223 1,020 kgL225 1,135 kgL230 1,360 kg

Tractor Backhoe Loader 580ST Small front wheels695ST 4 big wheels

Compact Wheel Loader21E 4,624 kg121E 4,920 kg221E 5,418 kg321E 5,771 kg

Telehandler TX130-35 13 mTX140-45 14 mTX170-45 17 m

CONSTRUCTION EQUIPMENTS

14 15


2014OVERVIEW

t ürk tr ak t ör, W hich ha s inaugur ated

it s second pl ant in erenler on a l and

me a suring a t o tal of 396,4 43 m 2, ha s re ached

t o the daily m anufac t uring c apacit y of 170

tr ac t or s. the pl ant W hich ha s four mobile

a ssembly lines and a fully au t om ated

robo tic paint shop, the fir s t in the sec t or,

ha s cre ated a l abor force of ne arly 1,0 0 0

people.

16 17


TÜRKTRAKTÖR, celebrated the 60th anniversary of its founding with the opening of a new plant. Having built its first factory in Ankara in 1954, the Company has inaugurated its second factory in Erenler, Sakarya. The foun-dations for the Erenler Plant were laid on 28 March 2013 on a land measuring a total of 396,442.79 thousand square meters, and construction was complet-ed within just fifteen months.

The opening ceremony for the Türk-Traktör Erenler Plant was attended by Fikri Işık, the Minister of Science, Industry and Technology, Nihat Zey-bekçi, the Minister of the Economy, Mustafa V. Koç, the Chairman of the Board of Koç Holding, Richard Tobin, the CEO of CNH Industrial N.V., and many representatives from the govern-ment and business community.

Established in 1954 to manufacture the first tractor of Turkey, TürkTrak-tör is a living example of the phases through which the automotive man-ufacturing industry in Turkey has passed. Through the investments made the Ankara Plant has become a global-ly-competitive facility. Exporting over 30% of its production, TürkTraktör has raised its manufacturing capacity to

50,000 units with its Erenler Plant, be-came one of the largest manufacturers in Europe ◼

EMPLOYMENT FOR 1,000 PEOPLEWith a daily manufacturing capacity of 170 tractors, the Erenler Plant has cre-ated a labor force of nearly 1,000 peo-ple. While the manufacture of the main components, such as engines, transmis-sions and axles remains established at the Ankara Plant, the paint shop and assembly processes have been moved to the Erenler Plant. At the Erenler Plant, there is a fully automated robotic paint shop, the first in the sector, and there

are four mobile assembly lines where parts coming from Ankara, and subsid-iary industries, are assembled ◼

AN IMPORTANT STEP TOWARD THE FUTUREHaving exported approximately16,000 tractors annually to over 130 countries, including the United States and Japan, since the early 2000s, TürkTraktör will be ready for new export ventures with its new factory. The Company is proceeding firmly in line with Turkey’s 2023 vision with its increased manu-facturing, export and enhanced R&D activities, deploying new investments

On its 60th Anniversary, TürkTraktör is Now Even Stronger with its Second Plant

t ürk tr ak t ör is progressing from s trength t o s trength and

e xpanding it s m anufac t uring facilities W ith the opening of

it s second pl ant in erenler, sak arya t o coincide W ith the

60 th anni v er sary of it s founding.

to raise its processing and manufactur-ing capacity not only for tractors, but also of transmissions and engines.

TürkTraktör has long been a pioneer and innovator in Turkey and with its position as market leader, the Company is constantly raising its level of success thanks to its share in the manufacture of tractors in Turkey, its important role in the development of the agricultural sector, and its ever growing export per-formance.

Achieving a major success in the sector in terms of increase in domestic added value, TürkTraktör will contin-ue to lead the field in this area. The Erenler Plant, together with the Anka-ra Plant, will carry the name of Türk-Traktör to even stronger positions in the agricultural sector ◼

01

04

05

03

02

01 TürkTraktör, which has

inaugurated its second

plant in Erenler, Sakarya, has

raised its manufacturing capacity

to 50,000 units.

02 Nihat Zeybekçi, the Minister

of Economy: “It is such a pleasure

of seeing the manufacturing of

these tractors in Turkey.”

03 Fikri Işık, the Minister of

Science, Industry and Technology

who attended to the opening

ceremony: “Each opening of a

new plant is an investment for

the future of the country.”

04 Richard Tobin, CEO of CNH

Industrial NV : “We focus on the 1

millionth tractor.”

05 Mustafa V. Koç, the Chairman

of the Board of Koç Holding: “We

have invested to the future of

the Country, and will continue.”

LEED Gold Certificate Achieved

The Erenler Plant supports environmentally-friendly manufacturing with its “green building” concept by using sunlight at the maximum level combined with lower energy and water consumption. The Plant has been awarded the LEED Gold Certificate which is presented by the U.S. Green Building Council to enterprises which support environmentally-friendly construction ◼

2014 Overwiev New Plant Opening

18 19


t ürk tr ak t ör, the le ading na me in t urkish agricult ure,

comple ted it s 60 th y e ar in 2014 . hav ing pioneered se v er al

innovations and led the sec t or in m an y fields for ov er 60

y e ar s, the compan y celebr ated this v ery imp ortant y e ar

W ith a splendid g al a dinner.

TürkTraktör Celebrates its 60th Anniversary

ESTABLISHED in 1954 as the first tractor factory in Turkey and cumulatively exported over 100,000 units of tractors to over 130 countries, TürkTraktör cel-ebrated the 60th anniversary of its founding with a gala din-ner attended by the Koç Family, Koç Group, CNH Industrial and TürkTraktör executives, deal-ers, and representatives of the business community ◼

“ONE OF EVERY TWO TRACTORS SOLD IN TURKEY TODAY IS MANUFACTURED BY TÜRKTRAKTÖR’’TürkTraktör is one of Turkey’s major assets with its contri-butions to the development of modern agriculture, the added value it has created and its ev-er-increasing exports. Speak-ing at the TürkTraktör gala evening, Mustafa V. Koç, the chairman of the board of Koç

Holding, reminded the guests that TürkTraktör was the start-ing point for the partnership be-tween the Fiat Group and Koç Holding. Mentioning that “one of every two tractors sold in the country today is a product of TürkTraktör,” Koç underlined the success of the company in Turkey. Recalling the saying of the late Vehbi Koç, the founder of Koç Holding; “If my country exists, I exist,” Mustafa Koç went on to underline the fact that Koç Holding is continuing to invest in the future of Turkey while experiencing the greatest investment period of its history, saying; “Maintaining a perma-nent long term perspective and with the confidence and belief we have in the future of Turkey, we have focused on augmenting the added value we have been creating” ◼

“OUR MAIN ADVANTAGE IS OUR RELATIONSHIP WITH THE FIAT GROUP”Richard Tobin, the CEO of CNH Industrial N.V., commenced his speech by saying “Today is a historical day for our compa-ny which has held its position unchanged for over 60 years in the agricultural industry of Turkey.” He then went on to add that; “today’s celebration of TürkTraktör, which is con-tinuing to operate under the partnership between CNH In-dustrial and the Koç Group, is also one of the milestones of our company. With the opening of the new factory in Erenler, we are taking an important step for the future of TürkTraktör.” ◼

“WE HAVE MANY REASONS TO CONGRATULATE OURSELVES”Speaking during the 60th anni-versary gala dinner, Marco Vot-ta, the CEO of TürkTraktör, said

that the Company had reached a total of 700,000 tractors as a result of constant manufactur-ing which had continued unin-terruptedly for 60 years. “We have exported 100,000 of the tractors we manufactured and today we are launching a new manufacturing facility. This alone would be sufficient rea-son to congratulate ourselves. We are very lucky that we could do all this within this year. I hope the new investment we have made will lead to great gains. I thank everybody who has contributed to the open ing proces s of our new facto-ry. I also hope that everybody who has supported the pro-cess will continue in their support.” ◼

01 The Koç Family, Koç Group and TürkTraktör

executives hosted the 60th Anniversary Gala of

TürkTraktör.

02 Kudret Önen, the President, Defence industry, other

Automotive and Iformation Technology Group,

Ali Y. Koç, the Board Member of Koç Holding,

Marco Votta, the CEO of TürkTraktör

03 Marco Votta, the CEO of TürkTraktör:“We have many

reasons to congratulate ourselves”

04 Richard Tobin, the CEO of CNH Indsutrial NV:”We are

taking an important step for the future of TürkTraktör.”

05 Mustafa V. Koç, the Chairman of the Board of

Koç Holding: “With the confidence

and belief we have in the future

of Turkey, we have focused on

augmenting the added value we

have been creating.”

06 The guests attended to the

gala dinner enjoyed with the

magnificent

concert

of Pink

Martini at

the end

of the

night.

01 02

03 05

06

04

2014 Overwiev The 60th Anniversary

20 21


Working t o prov ide a fa s t and high value- added serv ice by

es tablishing close contac t W ith it s cus t omer s, t ürk tr ak t ör ha s

opened a ne W page, under it s dis tribu t or ship agreement W ith cnhi, in

the cons truc tion equipment sec t or. the compan y l aunched it s İzmir

and ank ar a regional facilities in 2014 .

THE construction industry is one of the locomotive industries in Turkey and plays a very important driving role in the economy of developing countries such as Turkey. Due to this fact, the Turkish construction equipment sector has grown sub-stantially in recent years to become the 4th largest market in Europe and the 11th largest market in the world, according to the 2014 data.

CNHI, one of the most impor-tant manufacturers in the world, with an annual turnover of over 30 billion US dollars, and Koç Holding, one of the most important assets of Turkey in terms of its contribution to the economy, have opened a new era with the addition of a Turkish distributorship for Case and New Holland-brand construction equip-ment to their long-standing tractor manufacturing partnership, under the roof of TürkTraktör.

With investments in the con-struction equipment sector, which has experienced a significant growth trend in recent years, TürkTraktör provides a sales and after-sales ser-vices network across Turkey and

aims to become one of the most im-portant players in the construction equipment sector in the near future, as it currently is in agriculture, by means of the high-end products of the well-established Case and New Holland brands ◼

İZMIR AND ANKARA REGIONAL FACILITIES OPENEDCarrying its collaboration with CNH Industrial in the field of ag-ricultural equipment into the field of construction equipment, Türk-Traktör is advancing into this sec-tor through important investments. TürkTraktör launched its İzmir and Ankara Regional Facilities in 2014 as the Turkish distributor of Case and New Holland-brand construc-tion equipment.

For TürkTraktör, which aims to differentiate itself through the val-ue it contributes to its customers through an ever-present close con-tact, the newly-opened facilities are the first milestone on this road. The İzmir and Ankara Regional Facilities provide sales, after-sales and spare part services to the region. Product

B Y CONDUC T ING DIS T INC T M A R K E T ING

AC T I V I T IE S A ND COMMUNIC AT ION P ROjEC T S

IN 2014, T üR K T R A K T öR IN T RODUCED

I T S BR A NDS T O CUS T OMER S IN VA R IOUS

EN V IRONMEN T S.

“We started a new era with our 60th anniversary”

“2014 is a special year for TürkTraktör, for the reason that we are celebrating our 60th anniversary. Apart from being special, 2014 is an extraordinary year, because, in addition to the milestones we have experienced so far, we are continuing to complete new, challenging projects. Our aim is to bring together the knowledge of CNHI in the construction equipment sector with our success in the agricultural sector into the construction equipment sector. When doing this, our biggest guarantee is our confidence in the future of the construction equipment sector in Turkey.’’

support and technical support en-gineers work toward ensuring rapid response by producing instant solu-tions to meet customer needs with mobile service vehicles. In addition to these investments, TürkTraktör has also established a team of spe-cialist and highly-experienced mem-bers confident in their ability to provide such services at the highest standards at all times ◼

SPREADING THE SERVICE ALL OVER TURKEY THROUGH A WIDESPREAD DEALER NETWORKIn 2014, TürkTraktör, with its wide-spread dealer network across Turkey and direct sales and service facility investments, launched 8 3S (Sales + Service + Spare Parts) dealer facili-ties. Together with the appointment of 2S dealers, the Company sells its products through 22 sales dealers and provides servicing to the equip-ment park across Turkey at a total of 20 points. Thus, TürkTraktör is spreading its overall vision across Turkey through its widespread deal-er network ◼

BRANDS INTRODUCED TO CUSTOMERS THROUGH MARKETING ACTIVITIESThrough marketing activities car-ried out during 2014, customers were introduced to the Case and New Holland brands. Starting with the Middle East Construction Trade Fair held in Diyarbakır, events con-tinued with iftar meals provided for customers from various regions throughout Ramadan. The Company also sponsored the traditional iftars given by the Association of Asian Side Excavation Contractors and the Association of European Side Exca-vation Contractors.

TürkTraktör attended agricul-tural trade fairs with its construc-tion equipment throughout the year and thus created a synergy between the brands ◼

SERHAD TAŞKINMERİÇ

Construction Equipment Director

21

TürkTraktör Continued to Invest in Construction Equipment with its Regional Facilities

TürkTraktör opened its first construction equipment facility in İzmir.

2014 Overwiev Construction Equipmant

22 23


OFFERING SUPERIOR PERFORMANCE IN A NARROW SPACEIn vineyard and orchard agricul-ture, a field which has been grow-ing day by day, planting distances are shortening and the cultiva-tion of low-growing fruit varie-ties, such as berries, is gaining prominence. Accordingly, the di-mensions of tractors and equip-ment in use are becoming more important. The new TTJ Series tractors, which offer substantial convenience to farmers dealing with orchards, will be the num-ber one preference in vineyards and orchards thanks to its di-mensions and high maneuvera-bility ◼

TTJ

TT 50J > 50 HP

TT 55J > 55 HP

TT 65J > 65 HP

TT 75J > 72 HP

IDEAL DIMENSIONS FOR VINEYARDS AND ORCHARDS The new New Holland TTJ Se-ries, which will bring a breath of fresh air to orchard farming with its ideal dimensions, brings together power and economy through its four models ranging from 50 HP to 72 HP. The TTJ Series enables farmers to read-ily achieve the speed range de-sired for agricultural operations with its eight forward and eight backward transmission, offering maximum performance.

The new TTJ Series offers farmers a comfortable working environment thanks to an as-sertive, powerful, modern hood design, ergonomically designed platform, and control levers that deliver ease of use ◼

New Holland TTJ Model Receives the “Tractor of the Year” Award in Europe

t ürk tr ak t ör ha s reinforced it s s trength in

global are a once ag ain, hav ing Won one of the

mos t pres tigious aWards in the agricult ur al

sec t or W ith the ne W holl and t tJ model ,

chosen a s the “ tr ac t or of the y e ar – bes t of

specialized” in europe.

2014 Overwiev Tractor of the Year Award

THE new New Holland TTJ Series for vineyard and orchards, which has been developed in Turkey and manufactured at Türk-Traktör facilities with the hard work of Turkish engineers and workers, received the Tractor of the Year 2015 award in Best of Specialized category, which is regarded as one of the most prestigious agriculture sector awards. The award was accept-ed by Marco Votta, the CEO of TürkTraktör, at a ceremony held in Bologna, Italy, under the aegis of the EIMA (Esposizione Inter-nazionale per la Macchina Agri-cola - International Agricultural and Gardening Machinery Exhi-bition) Trade Fair.

With New Holland TTJ, which was introduced to the Turkish market in the spring of 2014 from the TürkTraktör manufacturing line and export-ed to foreign markets under the name of T3F, one of the most important awards in agriculture sector has been won. The award

is an important indicator of New Holland’s perfectionist approach in the field of vineyard-orchard tractors. The “Tractor of the Year Award” which has been present-ed every year since 1998 under the leadership of TRATTORI, the long-established tractor and agricultural equipment maga-zine published in Italy, is award-ed after a challenging selection process. A jury consisting of 23 famous people, recognized in their respective fields from 23 countries in Europe, conducts the tests in an agricultural field. The Tractor of the Year Award consists of three categories; the “Tractor receiving the highest score,” the “Best vineyard-or-chard tractor”, and the “Golden design award”. A maximum of seven brands make it to the finals in each category.

By winning one of the most prestigious awards in the agri-culture sector, TürkTraktör has once more reinforced its strength in the sector internationally ◼

T HE AwA RD wA S

ACCEP T ED BY M A RCO

VOT TA , T HE CEO OF

T üRK T R A K TöR A ND

M AT T HIEU SéjOURNé,

T HE A SSIS TA N T

GENER A L M A N AGER

/ M A RKE T ING,

AT A CEREMON Y

HELD IN

BOLOGN A , I TA LY.

24 25


AW

AR

DS

& A

CC

OM

PL

ISH

ME

NT

STürkTraktör Showered with Awards in 2014

TWO AWARDS FROM EXPERIENCED CIOSThe “IDC Turkey CIO Summit 2014 Turkey”, the flagship of the International Data Corporation (IDC), a global market intelligence firm leading the field of Information Technol-ogies and Telecommunication, and which is celebrating its 50th anniversary this year, was held for the 5th time. The leaders in business, technology and innovation were an-nounced at the Summit. TürkTraktör won the 1st prize in the Best IT Governance Project category and the 2nd prize in the Best Cost Efficiency Project category ◼

TÜRKTRAKTÖR; CHAMPION OF EXPORTS The leading brand in the Turkish agricultural sec-tor, TürkTraktör’s success in export has been recog-nized once again. During the Turkish Exporters Assem-bly (Türkiye İhracatçılar Meclisi - TİM) 21st Ordi-nary General Assembly and Export Champions 2013 Award Ceremony held on 7 June 2014, TürkTraktör, as the company having export-ed the greatest volume in the category of Machinery and Components, was awarded the first prize. Marco Votta, the CEO of TürkTraktör, re-ceived the first prize award from Ali Babacan, the Depu-ty Prime Minister ◼

THE MOST SUCCESSFUL CIO AWARDThe most successful technology leaders of 2014 were announced at the 5th CIO Awards which was organized this year under the lead-ership of the IDG-licensed CIO magazine. Er-gun Özdamar, the TürkTraktör Information Technologies Manager, was selected as one of 23 technology leaders of the year and was rec-ognized as “CIO of the Year” at the 2014 CIO Awards, for his successful work ◼

hav ing been recognized W ith se v er al national aWards in 2014 , t ürk tr ak t ör

ha s continued t o m ake a difference W ith it s innovati v e approach and

produc t s and continuously challenges it self t o re ach e v er gre ater height s.

DOUBLE AWARDS FOR PATENT APPLICATIONSThe companies which made the most local patent applications to the Turkish Patent Institute in 2013 were announced. According to the list, Türk-Traktör took the 9th place, with 20 patent applica-tions, in the Turkey-wide rankings and 4th place in the rankings amongst Koç Holding ◼

STARS OF EXPORT - 1ST PRIZE IN THE EXPORT ENCOURAGEMENT AWARDS! The “Stars of Export” competition, held for 12 years with the aim of supporting export and encouraging exporters, as one of the foun-dations of economic growth and development, and with the further aim of ensuring that Turkey reaches its export targets for 2023, held its annual ceremony. During the ceremony attended by the Deputy Prime Minister, Ali Babacan, the awards were presented to the win-ners. TürkTraktör, was recognized as worthy of the first prize in the field of “Market and Market Diversity” with its contribution to the target of having export with 500 billion US dollars in the 100th year of the Republic ◼

AWARDS FROM KALDER IN 2 CATEGORIES TürkTraktör was recognized with awards in the Quality Circles and Kaizen catego-ries at the 17th Quality Circles Sharing Conference, held annually by the Turk-ish Quality Association (Türkiye Kalite Derneği - KalDer) with the aim of en-couraging teamwork across Turkey and of sharing this work with other organizations under the philosophy of “the person who knows a job best is the one who does it” ◼

34TH PLACE IN THE ISO 500 The results of the annual study of Turkey’s Top 500 In-dustrial Enterprises, which has now become a kind of mirror of the Turkish economy, were announced. The study was originally undertaken in 1968 as the Top 100 Industrial Enterprises and has continued under the Is-tanbul Chamber of Industry and been annually expand-ed since then. In 2013, TürkTraktör was placed at 34th on the list with net sales from manufacturing amount-ing to TL 1,835,659,651 ◼

50TH PLACE AMONG THE FORTUNE 500The Fortune 500 list, consisting of the largest, most profitable, fastest growing, and highest em-ployment providing companies in Turkey, has been announced. TürkTraktör rose to the 50th place on the list, with net sales of TL 2,175,319,881 in 2013 ◼

50TH PLACE

AMONG THE

FORTUNE 500

2014 Overwiev

26 27


BUDGET FRIENDLY TDD DELTA SERIES LAUNCHEDIn addition to its high-performance engine and farmer-friendly equipment, the TDD Delta Se-ries is environmentally-friendly and economi-cal and also considerate of the farmer’s budget. Drawing attention with its modern design, the new TDD Delta Series is equipped with a state-of-the-art 4-cylinder, high-performance en-gine. Conforming to Tier III norms, the engine offers four different power alternatives. Power alternatives start from 75 HP, go on to 88 and 98 HP and end with 110 HP. All high-perfor-mance engines are standard-equipped with turbo feeding and intercooler.

The new TDD Delta Series is equipped with 12x12 transmission, by which all speeds needed by the driver can be achieved thanks to a 3-step, 4-speed gearbox. By means of a mechanical forward-backward shuttle placed next to the steering, the TDD Delta Series enables all forward gear speeds to be used for reverse gear as well. TDD Delta Series models, which have four hydraulic power outlets, are equipped with a superior hydraulic structure with the Lift 0-matic™ system, by which the draft, positioning, mixing and floating func-tions can be used as standard, and which facil-itate end-of-row turns.

Thanks to its modern cab, the new TDD Delta Series offers a perfect 360 degree, wide view. The developed cab insulation, presents a silent working environment of 79.5 dB(A) ◼

T5 EC AND T6 AC MAKE LIFE EASIER

The choice of medium and large size enterprises, the New Holland T5 Electro Command Series is of-fered for sale in two different ver-sions; 105 HP and 114 HP. Designed to meet the needs of upper-medium and large-scale enterprises, the T6 Auto Command™ Series is offered for sale in three different versions; ranging from 110 HP to 131 HP.

Thanks to the new generation 16 forward, 16 backward semi-au-tomatic Electro Command gear-box, which makes the T5 EC Series special, it is sufficient for the user merely to touch a single button in order to shift gear.

Thanks to its constantly variable CVT transmission, the new T6 AC Series enables agricultural opera-tions to be carried out merely by de-termining the cruising speed with-out any need to shift gears at all ◼

THE T480S TAKES PERFORMANCE TO NEW LEVELManufactured at TürkTraktör facilities together with its en-gine equipment, the new T480S comes to prominence with its ability to perform tasks in different categories easily and with low fuel consumption, thanks to the high torque val-ue produced by its 48 HP, three-cylinder, turbo-fed engine. Equipped with an 8 forward-2 reverse gearbox in the 2WD model and an 8 forward-8 reverse gearbox in the 4WD mod-el, the T480S elevates engine-transmission attunement to the maximum level with its enhanced transmission structure. In the 4WD model, a mechanical shuttle placed next to the steering offers usage ergonomics on the one hand and min-imizes loss of time during end-of-row turns, thus ensuring fuel economy on the other. Another feature which ensures fuel economy is the ability of the T480S to maximize PTO speed at revolutions as low as 540 rpm.

With its dimensions suited to multi-purpose tasks, the T480S is equally versatile in livestock and on-road tasks, and can comfortably perform its duties in orchards with its nar-rower model available in both 2WD and 4WD versions.

The new T480S tractor series, developed with a view to-wards the needs of users in different regions of Turkey, was launched in 2014 and has launched to the market ◼

THE NEW HOLLAND TD4B ORCHARD SERIES HAS BREATHED NEW LIFE INTO ITS CLASSPleasing to the sight with its new hood design and new platform equipped with ergonomically positioned control levers, the TD4B Orchard Se-ries has brought a breath of fresh air to its class. The TD4B Orchard Series is offered for sale with four different four-cylinder power options. Power options start at 65 HP, continue through to 72 HP and 80 HP and extend up to 88 HP.

With a forward-reverse shuttle positioned next to the steering, the TD4B Orchard Series is standard-equipped with a 12-forward and 12-reverse transmission. Electronically con-trolled dual traction and differential locking systems make forward and backward maneu-vering easier with the optional Powershuttle shuttle which eliminates the need to depress the clutch. The Powershuttle shuttle especially makes it easier for farmers to make end-of-row turns.

Equipped with robust hydraulic arms com-prising a lifting capacity of up to 3,000 kg and 4 hydraulic power outlets, the new TD4B or-

chard series has been designed to be capable of performing all tasks demanded by orchard and vineyard agriculture ◼

RENOVATION IN THE ORCHARD SERIES WILL CONTINUEIn line with the developing requirements of the market, studies on the renovation of the TDB Orchard tractor series, for the purpose of meet-ing both domestic and international demand, is ongoing. With the 90 horsepower 4-cylinder option, which will be introduced to the mar-ket with broader features in 2015, the series will acquire the capacity to work under heav-ier conditions. Ease of use has been im-proved in the series thanks to features such as the hydro-mechanical gear-box and integrated shuttle, whereas driver ergonomics will be improved through the use of a mono-block platform structure, and the trac-tor will be given a new face with the new NH2 front and rear hood style ◼

2014Highlights

in 2014 t ürk tr ak t ör,

fully eng aged

W ith the l aunch

of ne W produc t s

and communic ation

ac ti v ities W hich

befit the me aning of

the y e ar.

2014 Overwiev

28 29


THE CASE IH JX L630 IS REMARKABLE WITH ITS MULTI-PURPOSE USAGEThe new Case IH JX L630 series front loaders have been manufactured with sufficient strength to be equal to numerous loading and unloading tasks over many years. The new series sports a number of superior design fea-tures that have been developed with regard for the areas of use required by many agricultural and construction companies, mainly the livestock companies. With its robust construction, consisting of three functions and standard operable bucket, Case IH JX L630 offers a wide range of use to users. The new series front loaders pro-vide both ease of use with the joystick control lever in-side the cab on the one hand, and a wide view through the standard sunroof on the other ◼

THE CASE IH FARMALL U DESERVES CREDIT FOR ITS NEW CAB DESIGN AND USAGE ERGONOMICSThe Farmall U Series, included in the product range as a continuation of the JXU Series listed under the Case IH product range, is offered for sale with two different horsepower options, each conforming to Tier IV exhaust emission norms. The four-cylinder turbo-fed engines have107 HP power, 444 Nm torque and 114 HP power, 461 Nm torque options.

The Farmall U Series, which can be used by small and medium size farmers, not only for field tasks but also for every other kind of agricultural task such as livestock, deserves credit not only for its new engine but also for its new cab design and usage ergonomics.

The new Farmall U Pro series, on the other hand, has the characteristic of being the new generation JXU se-ries tractor. With the environmentally friendly Tier 4 engines equipped with the Common Rail injection sys-tem, they minimize damage to the environment ◼

NEW HOLLAND EXPANDS ITS RANGE OF SPRAYERSThe New Holland SA2002 HSB tower type orchard sprayer was included in the range of New Holland sprayers in 2014 in order to ensure more efficient spraying, especially in fruit orchards. With a tower height of two meters, 20 nozzle positioned accor-ding to air flow, an Italian Annovi Reverberi pump with a flow rate of 200l/min, and a control arm of the same make, the New Holland SA2002 HSB pro-vides ease of use together with an improved spra-ying performance ◼

THE RANGE OF TÜRKTRAKTÖR BRANDED EQUIPMENT IS GROWINGThe small baler, one of the machines in the livestock group, has been made available to producers in two models; with chopper and nonchopper. Small balers equipped with the chopper are used to gather the straw from agricultural crops such as wheat and barley from field and to make them into bales. At the baling process, crops are gathered up from field, shred into small pieces by the chopper, pressed into bales in the bale chamber, knotte-red by the globally-recognized and user-favo-rite German Rasspe brand knotter, and then left on the field. The knotter is used with three knotters on the KB 390 H model baler with chopper, two knotters on the KB 290 model nonchoppered baler and with three knotters on the KB 390 model nonchoppered baler.

Square balers, mostly preferred by contra-ctors, are used by Turkish farmers with great admiration for their• Robust chassis, suitable for working under

rough field conditions,• High performance pick-up unit with a wi-

dth of 155 cm,• Strong plunger,• World famous knotter (Rasspe), one of the

most important components of the baler, and

• Unrivaled fan structure which ensures the cleanliness of the knotter at all times ◼

2014 Overwiev 2014 Highlights

TURKEY’S COMBINE NEW HOLLAND TC5070The TC5070 which has managed to remain market lea-der in combines for a long time thanks to its ease of use, robustness, high harvest capacity and widespread repa-ir and spare parts network has been upgraded to meet customer needs and demands. It’s completely upgraded cabin, which has been positioned to the center point of the combine, has been made much more silent thanks to a wider and upgraded isolation system bringing the noise level down to 75.6 dB. With the new infoView™II monitor ergonomically fitted in the cabin, it is easier and faster to monitor and adjust the combine data ◼

30 31


TÜRKTRAKTÖR ACADEMY OPENED ITS DOORS TO DEALERS AND FACTORY EMPLOYEES FOR THE THIRD TIMEHaving commenced operations in 2013, the TürkTraktör Acade-my aims to increase the number of well-educated employees in the sector and to get high standards of service adopted at all stages by making contributions to the per-sonal development of the employees of dealerships and the TürkTraktör after-sales network. A leading name in the agriculture sector in Turkey, TürkTraktör held its third dealer training camp, the first and only training program of its kind in the sector. The program was heavily at-tended by dealers.

The TürkTraktör Academy Deal-er Camp Training Program which was held on a 100 hectare plot of land belonging to the Antalya Ak-deniz University Faculty of Agricul-ture got full marks from attendants for its wide tractor and equipment range.

With the aim of maintaining its leadership on the tractor and equip-ment market and meeting custom-er demand through more accurate selling, TürkTraktör provided sales employees of the dealers with an opportunity to test its products un-

T ÜR K T R A K T ÖR AC A DEM Y, T HE FIR S T A ND ONLY OF

IT S KIND IN T HE SEC T OR , PROV IDED T R A INING T O 720

EMPL OY EES OF DE A LER S IN 3 Y E A R S

THE CASE IH EQUIPMENT RANGE HAS BEEN EXPANDED Imported Case IH LB series large balers have been included in the enri-ched range of Case IH equipment. With these wide Case IH balers, the range of Case IH equipment has been expanded to meet the capacity demands of all agricultural enterprises from the smallest to the largest. With their high capacity and the heavy bales they make, Case IH LB se-ries large balers offer many advantages, greater baling capacity, fuel eco-nomy, low operating costs and lower transportation cost per bale unit weight, together with high performance for agricultural enterprises and baling contractors ◼

CASE IH RECEIVED ITS 10,000TH CUSTOMERCase IH, the preferred brand of Turkish farmers, who demand the best, took pride in receiving its 10,000th customer. Case IH JX110, sold by the Case IH dealership in Edirne, was delivered to the brand’s 10,000th customer at a ceremony at-tended by Kudret Önen, President of the Defense Industry, Other Automotive and Information Technology Group of Koç Holding, together with Marco Votta, the CEO of TürkTraktör. A DV50 R model 5-Rows Planter was also presented as a gift by TürkTraktör at the ceremony.

Case IH was introduced to the Turkish market in 2007 with the aim of offering a new alterna-tive to farmers who want more from the sector. Although just seven years have passed since then, the feedback received proves that the correct step has been taken. Case IH succeeded in winning the admiration of Turkish farmers in a short period of time thanks to its high quality and well-developed service network.

Case IH JX110, which was sold to the 10,000th customer, is in the medium segment. Combining high performance with fuel economy with its110 HP engine, the JX110 has a user-friendly architec-ture and is richly equipped. The Viskos fan and compressor are offered as standard features, while the user can shift forward-backward gears without the use of a clutch thanks to Powershuttle, which is also standard-equipped. The standard inter-mediate hydraulic lever allows ease of equipment control, while a lifting capacity of 4,700 kg ena-bles considerable versatility. Having revolution options of 540-540E & 540-1000 PTO, the JX110 offers a comfortable driving experience with an air-conditioned and spacious cab. The package is completed with the sunroof and passenger seat which are equipped as standard features ◼

C A SE IH IS T HE 5T H MOS T

PR EFER R ED BR A ND OF

T UR KE Y IN 7 Y E A R S.

R E ACHING

IT S 10,0 0 0 T H

CUS T OMER IN IT S

7 T H Y E A R OF IT S

OPER AT ION IN T HE

SEC T OR , C A SE IH

IS CON T INUING

T O WOR K IN

T HE IN T ER ES T

OF T UR KE Y ’S

AGRICULT UR A L

DE V EL OPMEN T

W IT H T HE P OW ER

IT G A INS FROM T HE

CONFIDENCE OF

FA R MER S.

der field conditions and with vari-ous equipment, through the Deal-er Camp training program. In the course of the training, carried out on a100 hectare-plot of land, dealers and their employees were informed about all the product ranges, from orchard tractors to locally manu-factured tractor series, import trac-tors, combines and other agricultur-al equipment, at 4 different training stations. During the TürkTraktör Academy Dealer Camp training, dealers and their employees, who were given opportunities to en-counter the current models under field conditions, received instruc-tions about the features and use of new models.

TürkTraktör Academy, which aims for all employees in the field to provide sales and after-sales service even beyond customer ex-pectations, is continuing in its ed-ucational activities with training courses delivered under four main titles; Sales, Management of Busi-ness Processes, and Customer Re-lations Management, together with the Dealer Camp ◼

“ Through the Academy, we are disseminating our 60 years of knowledge to the sector ’’

“At the end of our 60 years of business

carried out under the name of TürkTraktör,

we have come to know the agriculture

sector of Turkey very well. TürkTraktör

Academy launched in 2013 for the

purpose of adopting professionalism

and maintaining the continuity of high

standards, is still the first and only of its

kind in the sector. Through TürkTraktör

Academy, we aim to make our colleagues

working in our dealer and after-sales

network more knowledgeable in their

respective areas, and also contribute to

their personal development.’’

MATTHIEU SéJOURNé

Assistant General Manager / Marketing

“We are grateful for the confidence of Turkish farmers’’

“2014 is a year while we were celebrating

TürkTraktör’s 60th year and also 7th year of

our Case IH brand in Turkish market. Within

such a short period of time we become the 5th

most preferred brand in Turkey. Thus, we have

broken new ground in our history and we have

entered the list with two brands listed among

the first five. This success stems from our

widest sales and after-sales service network

and the importance we give to quality. We

are justifiably proud of having received our

10,000th customer. I would like to thank all

Turkish farmers for their confidence.”


İRFAN ÖZDEMİR

Assistant General Manager / Sales

32 33


THE TÜRKTRAKTÖR TEAM HAS COME TO THE FIELDTürkTraktör comes together with farmers in the field during the “New Holland Field Days” which form an im-portant part of its vision. In the course of the event, farmers are provided with a festive environment where they can enjoy themselves together with their families. The festival-like event is or-ganized for the purpose of coming to-gether with farmers from all parts of Turkey, listening to them, and creating a platform through which farmers can get to know the products through closer inspection.

TürkTraktör met with farmers un-der the aegis of the “Field Days” in June. The “New Holland Field Days” event which took place between June 3rd and

“Turkish farmers have confidence in TürkTraktör’’

“The farmers know that any tractor

manufactured by TürkTraktör will not let

them down. Every part assembled to the

tractor shall meet the requirements. We

are purchasing directly from the suppliers

that can cover and sustain this quality.

Purchasing with an amount of millions of

Euro annually TürkTraktör is amongst the

most important companies in Turkey.”

“Quality has important part in manufacturing processes’’

“Thanks to its quality, TürkTraktör become

the leader. Quality has important part in

manufacturing processes. In this sense, our

operators are being trained in every step

of manufacturing processes in order to

meet quality requirements and also they do

their operations by considering the quality

control. We are focusing on international

standards in terms of quality and these are

introduced into TürkTraktör.”

dur ing t he ne W hol l a nd

fiel d days, W hich t ook

p l ace in June, fa r mer s

h a d t he op p ort uni t y

t o t e s t t he p roduc t s

of ne W hol l a nd in t he

fiel d, accompa nied

b y t he sp eci a lis t s of

t ür k t r a k t ör .

July 1st visited the provinces of Adana, Şanlıurfa, Kayseri, Konya, Eskişehir and Çorlu. In the course of the event, which was open to farmers and their families, visitors took the opportunity to personally test New Holland prod-ucts in an average area of 200,000 to 300,000 square meters.

In the course of the Field Days, the new TürkTraktör KS series baler with-out shredder, TürkTraktör tillers, New Holland CX6080 combine harvester, TDD Delta Series and two new import tractors with Tier 4 exhaust emission, T5 Electro Command with semi-auto-matic gearbox and T6 Auto Command with continuous variable transmission and CVT, were tested in field opera-tions ◼

02

03

01 The Field Days event hosted several

activities for guests and families to have

a pleasant time.

02 During the “New Holland Field Days”,

farmers take the opportunity to test the

products of New Holland in the field.

03 Sümer Tilmaç, famous artist, met

with farmers in the Field Days event. 01

SEDAT TEZERİŞENERAssistant General Manager / Purchasing

HASAN HALDUN ÖZGÜMÜŞAssistant General Manager / Quality


IN BRIEF

Tractors exported to Japan Marked an important milestone in TürkTraktör’s history, began exporting the NH UTL light 75HP model tractor to Japan, one of the world’s leading and demanding industrial nations ◼

100,000 tractors exported 100,000 tractors have been exported to over 130 countries in 12 years ◼

A tractor donated to AYDER Under the “For My Country” project, one tractor was donated to the “Alternative Camp” project carried out by the Society for Alternative Living (AYDER) in the village of Çukurbağ in the sub-province of Kaş, Antalya ◼

34 35


THE

SYMBOL

OF POWER

TR6

TR6TR 120 > 112 HP | TR 130 > 122 HP | TR 140 > 132 HP

the ne W ne W holl and tr6 series, W hich represent s

a signific ant e xp ort opp ort unit y for the fu t ure,

ha s been l aunched t o the domes tic m arke t a s the

bigges t loc al tr ac t or of t urke y. thank s t o their

technologic al fe at ures, the tr6 series t urns

fieldWork int o a ple a sure.

THE New Holland TR6 Series includes three dif-ferent local products; in the range of TR6.120, TR6.130 and TR6.140. The new series, which represents a significant export opportunity for the future, was launched to the domestic mar-ket, as the biggest local tractor of Turkey, in May 2014.

The TR6 Series brings something new to domestic tractors with its technologically-ad-vanced engines equipped with the 16-valve common-rail injection system which automat-ically enhance power and provide high perfor-mance during surface and power take-off appli-cations.

The 8 hydraulic power outlets which are standard in all TR6 series models offer the abil-ity to work with many different kinds of equip-ment. Performing multiple agricultural activi-ties with less labor in a shorter time thanks to their 16x16 semi-automatic transmission sys-tem, the TR6 Series has a power take-off sys-tem which is operable by an automatic control system at three different power take-off speeds. As a result, models such as the 540/540E/1000 can operate at a higher level of performance and provide fuel saving.

The specially-tailored cab minimizes vibra-tion and noise in the course of work and max-imizes the comfort of operator. The TR6 series turns working in the field into a pleasure thanks to its cab design, featuring a spacious interior, easy-control console and wide-angled view ◼

Local Giant:the New HollandTR6 Series

36 37


THE 2nd hand tractor market is con-tinuing to grow rapidly in Turkey as like in the world. However, since there is no corporate structure or-ganizing the 2nd hand tractor mar-ket in Turkey, farmers are unable to access corporate warranties for 2nd hand tractors. In recognition of the need in the sector, TürkTraktör has undertaken to institutionalize the 2nd hand market. It has established a platform with the aim of enabling farmers to purchase tractors un-der corporate warranty on the 2nd hand tractor market, in accordance with their budget and intended pur-pose. Other than the services and benefits offered directly to Turk-ish farmers, this system will be an important service for the 2nd hand tractor market in Turkey. The web

2nd Hand Market Goes Corporate in Turkey

t ürk tr ak t ör, recognizing the need for far mer s t o be able t o purcha se 2nd hand tr ac t or s

according t o their budge t and intended purp ose and cov ered by a corp or ate Warr ant y

under the serv ice pack age of a compan y, ha s es tablished the corp or ate 2nd hand pl atfor m

for tr ac t or s. in opening the pl atfor m t o all br ands in the sec t or, t ürk tr ak t ör is pl ay ing

an imp ortant role in it s ins tit u tionaliz ation by offering Warr ant y conditions and special

financing op tions.

site created to this end has not been limited to TürkTraktör brands but is offered to serve to all brands. 2nd hand tractors of every brand may be included in the system alongside Case IH and New Holland tractors and equipment ◼

THE WEB SITE BRINGS DEALERS AND PURCHASERS TOGETHER ON A COMMON PLATFORMTürkTraktör, which comprises the New Holland and Case IH brands, is continuing to produce consumer focused solutions. With the launch of the Corporate 2nd hand Platform for Tractors by TürkTraktör in 2014, the Turkish 2nd hand tractor market has gained an institutional identity. Using www.newholland2.net and www.caseih2.net, Turkish farmers have already begun pur-chasing 2nd hand tractors in line with their budget and needs, un-der the warranty of TürkTraktör. Dealers have the chance to post their stock of 2nd hand tractors and equipment at corporate web sites. Designed for easy use and in accord-ance with the needs of end users, the web site allows the posting of 2nd hand inventories without any brand discrimination. Consumers can track the 2nd hand inventories of dealers and do their own research regarding brand, model, horse pow-er and price through the web site in order to find the tractor best meet-ing their needs.

Due to the reportable feature of the web site, TürkTraktör will be able to make analyses based on brand, dealer, model, horse power, province, sub-province and region across Turkey. It will then be possi-ble to support the 2nd hand tractor management of dealers according to the statistical results derived from these reports. In this way, 2nd hand CRM records will be provided and 2nd hand customers will be tracked ◼

EVERYONE’S RIGHTS WILL BE PROTECTED THANKS TO WARRANTY TRANSFERIn addition to offering tractors of all brands and models under corporate

warranty and service through the created platform, under the terms set out by the a collaboration with Tur Assist, New Holland 3S dealers offer a 1-year warranty for locally manufactured New Holland T480, TT, 56S TD series tractors up to 10 years old and with a usage time of 7,000 hours on sale. There will be no hour limit within this period and when a customer sells his guaran-teed tractor to another person, the warranty can be transferred to the new customer. Since the inspection, maintenance and repair of tractors sold under these terms will have been carried out by authorized ser-vice points and will be under the warranty of Tur Assist, the rights of 2nd hand tractor customers will be protected in the event of break-down ◼

SPECIAL FINANCING OPTIONS ARE OFFERED TO 2ND HAND CUSTOMERSTürkTraktör is not only providing 2nd handtractors to Turkish farm-ers with the support of a corporate identity, but also providing financ-ing assistance which farmers may need when purchasing a tractor suited to their budget and purpose. Special interest rates, terms of pay-ment and repayment options are offered to the 2nd hand custom-ers through financial institutions which agreements have been made for the support of 2nd hand sales. Customers can make online appli-cations for loans and gain instant access to the estimated repayment plan for the amount of the loan they intend to take out via www.newhol-land2.net and www.caseih2.net ◼

2ND HAND DEALER STANDARDS ARE BEING ESTABLISHEDIn addition to all these, in order to state that corporate 2nd hand sales are done at dealers, studies are being carried out to establish 2nd hand Dealer Standards and to implement visual standards of dealer 2nd hand inventories. It is also planned to have 2nd hand sales managed sepa-rately from new tractors at dealers ◼

“We are controlling the biggest warranty park of Turkey’’

“TürkTraktör keeps its pioneer position in

after sales sector as well. As TürkTraktör,

we are controlling the biggest warranty

park of Turkey. We are always together

with our dealer, service points and

customers, we believe in face to face study

and on-site support.”

OKTAY YILDIRIMAfter Sales Director

2014 Overwiev 2nd Hand Project

Board ofDirectors

OSMAN TURGAY DURAK Chairman

FRANCO FUSIGNANI Vice Chairman

TEMEL KAMİL ATAYMember

KUDRET ÖNENMember

MARCO VOTTAMember - CEO

STEFANO PAMPALONEMember

MEMET İLKAN KAMBERMember - CFO

(Resigned 30.06.2014)

ALİ AYDIN PANDIRMember

AHMET CANBEYLİ Member - CFO

ANDREAS CHRISTIAN SCHRÖTERIndependent Member

HAŞİM SAVAŞ ARIKANIndependent Member

Board ofDirectors

OSMAN TURGAY DURAK Chairman

FRANCO FUSIGNANI Vice Chairman

TEMEL KAMİL ATAYMember

KUDRET ÖNENMember

MARCO VOTTAMember - CEO

OSMAN TURGAY DURAKChairman (24.03.2014-24.03.2015)Osman Turgay Durak received his Master’s degree in Mechanical Engineering at Northwestern University in the USA. He joined the Koç Group as a Product Development Engineer at Ford Otomotiv in 1976 and was appointed Assistant General Manager in 1986. He took office as Deputy General Manager in 2000 and as General Manager of Ford Otosan in 2002. He worked as the President of the Automotive Group of Koç Holding between 2007 and 2009. He was appointed the Deputy CEO of Koç Holding in May 2009. Durak has been the CEO of Koç Holding since April 2010 ◼

FRANCO FUSIGNANIVice Chairman (24.03.2014 - 24.03.2015)Franco Fusignani completed his under graduated studies in the field of Electrical Engineering. He started his career in 1970 at the Fiat Truck and Bus Factory where he undertook various duties and became the executive in charge of Industrial Operations in the Bus Group. He served as the Vice President of New Holland After-Sales Services, the President of European Commercial Operations, the Vice President of New Holland International Operations and the Vice President of Industrial and Commercial Operations for Fiat from 1981 until 2002 when he was appointed President of CNH Agricultural Operations for Europe, Africa and Asia. He was appointed COO (APAC) and President of CNH International S.A. in 2007 and as CEO and President of New Holland Agricultural Equipment S.p.A. in October 2010. Fusignani has been the COO of IVECO S.p.A. since September 2013 ◼

KUDRET ÖNENMember (24.03.2014 - 24.03.2015)Kudret Önen completed his under graduated studies and received his engineering degree from Gazi University. He joined the Koç Group at Ford Otosan in 1975. He served as the Manager of the R&D Department at Koç Holding in 1980 and as Assistant General Manager of Otokar in 1984. During 1994-2005, he served as the General Manager of Otokar. In 2005, he was appointed Vice-President of Koç Holding Other Automotive Companies Group. In 2006, he was appointed President of the Koç Holding Defense Industry and Other Automotive Group. Önen has been serving in the role of President of the Koç Holding Defense Industry, Other Automotive and Information Group since 2010 ◼

MARCO VOTTAMember - CEO(24.03.2014 – 24.03.2015)Marco Votta completed his undergraduate studies at the Business Administration Department of the Luigi Bocconi University of Commerce. He started his career at Pluritec S.p.A (a manufacturer of industrial machines) in 1994 and continued as a Management Consultant at Andersen Consulting. Votta commenced service at the Business Development Department of New Holland in 1998 and was appointed as Assistant General Manager in charge of Business Control at Türk Traktör ve Ziraat Makineleri A.Ş. and New Holland Trakmak Traktör ve Ziraat Makineleri Ticaret A.Ş. in 1998, where he worked as the CFO during 2006-2010. Votta has been in the position of General Manager since April 2010 ◼

AHMET CANBEYLİMember - CFO (01.07.2014 – 24.03.2015)Ahmet Canbeyli graduated from the Bosporus University Business Administration Department in 1998 and started his career as an Accounting Specialist in 1995. He worked as an Accounting Executive at Ram Dış Ticaret A.Ş. in 2000 and 2002. He was appointed as the Financial Affairs Executive to Tanı Pazarlama ve İletişim Hizmetleri A.Ş. in 2002. He subsequently went on to serve as Financial Affairs and Finance Group Manager, Assistant General Manager in charge of Financial Affairs and Finance and Assistant General Manager in charge of Financial Affairs and Operations at Koç Sistem A.Ş. during the period of 2005-2014. He has been the CFO at Türk Traktör ve Ziraat Makineleri A.Ş. since July 1, 2014 ◼

He was born in İstanbul in 1942. He obtained his Master’s degree from the Middle East Technical University. He joined TOFAŞ Türk Otomobil Fabrikası in 1970 and worked as the Chief of the Press Workshop in 1972, as Assistant Production Manager in 1977, as Assistant Maintenance Manager in 1979, as Manager of Maintenance and Facilities in 1981, as Manager of Technical Services in 1983, as Assistant General Manager (Operations) in 1995 and Production Director in 2001. Arıkan retired from TOFAŞ in 2002. Arıkan is also one of the founders of the Engineering and Architecture Faculty Technology Foundation, founded at Uludağ University in 1996 and currently serves on the Board of Directors as the Second President of the foundation. Arıkan is currently working as a management consultant to Deren Ambalaj Sanayi ve Ticaret A.Ş. and gives lectures on “innovation” as part of the technology course at the Engineering Faculty of Uludağ University ◼

ALİ AYDIN PANDIRMember (24.03.2014 - 24.03.2015)Ali Aydın Pandır received his undergraduate degree from the İstanbul Technical University Department of Mechanical Engineering. He started his career at Koç Holding. After having worked in various positions at Otokar, General Motors Turkey, Opel Germany, General Motors Asia Pacific Operations Singapore, General Motors China, and General Motors Indonesia, he served as the CEO of Tofaş Türk Otomobil Fabrikaları during 2006-2012 period. Currently serving as a Member of the Board of Directors of Tofaş A.Ş. and Türk Prysmian Kablo ve Sistemleri A.Ş., Pandır is also the Chairman of the Board of Directors of Ereğli Demir ve Çelik Fab. T.A.Ş. ◼

HAŞİM SAVAŞ ARIKANIndependent Member(24.03.2014 - 24.03.2015)Haşim Savaş Arıkan graduated as a Mechanical Engineer from the Robert College School of Engineering in 1965.

ANDREAS CHRISTIAN SCHRÖTERIndependent Member(24.03.2014 - 24.03.2015)Andreas C. Schröter graduated from the Besgische University Economics Department in Wuppertal, Germany and completed his professional education as a banker at Deutsche Bank AG in Cologne. He joined the Westdeutsche Landesbank AG in 1983 and worked in the Human Resources Department for several years. In 1991 he was appointed as the President in charge of Human Resources for Germany. He was transferred to the West LB New York Branch Office in 1998 and worked as a Client Relations Manager. During 2003-2014, he worked as the General Manager of the West LB İstanbul Branch Office and President responsible for Turkey. In

addition to his regular assignments, he also served as Global President in charge of Business Management and Development at West LB AG (renamed Portigon AG in July 2012) from 2011 to 2013. In addition, he served as a Member of the Board of Directors of the German-Turkish Chamber of Industry and Commerce from 2009 to 2013 and as a Member of the Board of Directors of the Compagnie Belge de la West LB S.A. (renamed CBAL S.A.) from 2011 to 2013 ◼

MEMET İLKAN KAMBERMember - CFO (resigned 30.06.2014)Memet Kamber completed his undergraduate studies at the Middle East Technical University Economics Department and post-graduate study at the Business Administration Department of Massachusetts University. He started his career as a Trainee in Financial Affairs at Koç Holding in 1991 and continued his career as Financial Affairs Auditor between 1995 and 1998. Kamber was appointed Assistant Coordinator of the Finance Group in 1999, Coordinator of the Finance Group in 2002 and Finance Coordinator in 2004. He worked as the CFO at Türk Traktör ve Ziraat Makineleri A.Ş. during the period of April 2010-June 2014 ◼

STEFANO PAMPALONEMember (24.03.2014 - 24.03.2015)Mr. Pampalone who is the Chief Operating Officer APAC, holds a Master degree of Engineering from the University of Trieste. Stefano Pampalone assumed the role of General Manager for CNH in India, Far East and Japan in February 2013.

TEMEL KAMİL ATAYMember (24.03.2014 - 24.03.2015)Temel K. Atay graduated from the İstanbul Technical University Me-chanical Engineering Department and then received an MBA from Wayne State University in the USA. He joined Koç Group in 1966. He served as the General Manager of Otoyol Sanayi A.Ş. and Tofaş Türk Otomobil Fabrikası A.Ş. and worked at top level positions at Koç Holding. During 2000-2001, he served as the CEO of Koç Holding. He has been the Vice Chairman of the Board of Di-rectors of Koç Holding since 1998 ◼

Since joining CNH in 1998, Mr. Pampalone has always been involved in international assignments. In 2001, after gaining commercial experience in parts and whole goods in Poland, India, Africa and Middle East, he was appointed Business Manager Southern Africa and Iran for all Agricultural Brands in the Fiat Group. In 2004 he became Marketing Director for Agricultural Equipment in Asia, Africa and Middle East. From 2006 till 2009 he first served as Business Director for CNH Agricultural Business in Italy and after one year as Business Director Africa & Middle East. In 2009 he was appointed General Manager of Agricultural and Construction Equipment Business in India and Pakistan ◼

43

TürkTraktör, 2014 Annual ReportMessages from the Management

Dear investors, business partners and employees, According to the IMF, the world economy would grow by 3.3% in 2014 and 3.5% in 2015, remaining below the long term average. Failing to achieve a stable growth trend, the Euro Zone grew by 0.9% in the year 2014. Unemployment remained at high levels and the risk of deflation still exists.

On the other hand, positive developments in the US economy continue and the growth rate of 2014 was announced as 2.4%. Thus, the growth rate occurred above 2.2%, the average of 2011-2013 period. The IMF revised its forecast for 2015 to 3.6% in its February report by taking into account these positive developments in the USA. The IMF announced its growth forecast for Turkey as 3.4%.

With the effect of the decreased political risk from the third quarter following the Presidential elections in August 2014 and of the relatively optimistic atmos-phere in abroad, a positive business environment was seen in the Turkish econo-my. Developments in the neighbouring countries in 2014 inevitably affected the country negatively. Despite these negative developments in the near geography, in the 3rd quarter, the Turkish economy gave recovery signals, though limited. Introduction of new measures through international cooperation in the fight with mentioned developments which have become threat for the global economy, se-curity and peace has increased to some extent our hopes for ending the adverse situation in the region.

Although located in a geography connecting two continents, full of incredible opportunities, Turkey is passing through a long term change and transformation process.

In 2014, the year we celebrated our 60th anniversary, we achieved stunning successes with the power from well-established corporate culture of Koç Holding and CNHI, our majority shareholders.

Having manufactured 45,823 tractors as of the end of 2014, TürkTraktör suc-ceeded to maintain its share in the domestic market at 49.4% and made exports to more than 130 countries. We are experiencing the proud of breaking a new re-cord in the production over our history of 60 years. TürkTraktör reinforced its strong reputation in the eye of its stakeholders by declaring an operating prof-it of TL 296,742,363 as of the end of the year. With investment spending of TL 234,219,964, the Company has carried out important projects which will guaran-tee the sustainability of its corporate structure.

As TürkTraktör, with the vision of “being a company which drives the mod-ern agriculture today and in the future,” we are the leading supporter of the pro-ductivity in the agricultural economy of the country. With our experience of 60 years, we continue to stand by the farmers as a real friend who raises the wealth of 23 million people living in the rural areas. We continue to represent Turkey with proud in international markets day by day. We reinforced our success in the inter-national platform with the “Tractor of the Year 2015 - Best of Specialized” award

we received in Europe for our orchard tractor, New Holland TTJ, manufactured in Turkey with the Turkish engineering. Exportation will be one of our primary focuses in 2015 as well.

Exporting to over 130 countries with its R&D competency enjoying interna-tional recognition besides its strong product range, TürkTraktör aims to maintain its strong support for the economic targets of Turkey in the next period as well. As TürkTraktör, our target has been to ever increase the added value created for the country. With an eye on this target, we pioneered the technology and innovation in the sector where we operate and continuously increased our competitive power in both local and global arenas. We will always focus on results and work towards being better at what we do.

Within the scope of our R&D works, we aim to carry our success in Turkey to international platforms and to take part in the projects within the scope of the Eu-ropean Union next year. As another strategic goal, we also intend to expand the re-search projects and patents, currently carried out by only the R&D Department, to other departments within the Company. In the agenda of the R&D there are many product development and research projects. We continue to look for collaborations with universities and Technology Transfer Offices for them.

Our fundamental objectives which constitute our strategies are to maintain our leading position in the sector, to raise the productivity, our competitive superior-ity and profitability by pioneering the change, and to move our products to upper ranks in the world markets by using our technology at the highest level. We will reach these targets together with our employees, suppliers and dealers.

On behalf of the Board of Directors, I express my deepest thanks to all of our employees, suppliers, dealers, Turkish Metal Union and business partners who supported the breakthroughs realized by TürkTraktör, which has pioneered in the development of the economy and agriculture of Turkey in the course of its cor-porate development of 60 years, during the activity period 2014, to our valuable customers who made our successes possible through the continuous support they have extended to us, with the wish for achieving many successes that will make the strong brand image of TürkTraktör sustainable in the next activity period. ◼

Turgay DURAKChairman

Reviewof theChairman

Working With the aim of

ever increasing the added

value created for turkey,

türktraktör continues

its strong support for the

economic targets of turkey

through its successful

performance by pioneering

the technology and

innovation in its sector and

by increasing its competitive

poWer both in local and

global markets.

OPER AT ING PROFI T OF

297 MILLION T L

IN V ES TMEN T M A DE FOR T HE

FU T URE; TOTA L C A PI TA L

E XPENDI T URE A MOUN T ING TO

234 MILLION T L

42

44 45

TürkTraktör, 2014 Annual ReportMessages from the Management

Board of Directors’ Report

THE FINA NCING OPPORT UNITIES PROV IDED BY ZIR A AT B A NK A ND PRI VATE COMMERCIA L

B A NKS, T OGE THER W ITH S TATE-A LLOC ATED AID A ND INCENTI V ES FOR AGRICULT URE

W ILL BE IMPORTA NT DE TER MINING FAC T OR S FOR THE S TATE OF A FFAIR S IN 2015.%50T ÜRK TR A K T ÖR H A S M AINTAINED IT S LE A DER SHIP FOR 7 Y E A R S IN A ROW

W ITH T WO BR A NDS A ND A M A RKE T SH A RE OF A PPROXIM ATELY

DEAR shareholders, Welcome to the 61st Ordinary General Assembly Meeting

of TürkTraktör. We present the 2014 Annual Report for your examination.

The report includes general information about the Company and evaluations of the Management regarding the Compa-ny’s activities in 2014, and developments in the sector. The last section of the report contains the financial statements, as of December 31, 2014, audited by an independent auditing firm, and the footnotes to the same. The financial results pre-sented in the report have been prepared in accordance with the compulsory format established by the Turkish Account-ing Standards/Turkish Financial Reporting Standards (TAS/TFRS) and the Capital Markets Board (CMB) under the Fi-nancial Reporting Communiqué of CMB.

A GENERAL EVALUATION OF 2014In 2014, the number of tractors sold increased by 14% over the previous year and reached to 59,459 units according to the traffic registration data of the Turkish Statistical In-stitute (TURKSTAT). The reasons for the increase include higher crop prices to offset yield losses due to adverse climat-ic conditions, and loan opportunities offering cheaper rates for retail purchases. Apart from these, grants extended by the European Union Instrument for Pre-Accession Assistance (IPARD) program have played a significant role.

Turkey is the 4th largest tractor market of the world. De-spite the intensely competitive environment, with regard to the number of tractors sold in a market in which over 40 brands compete, TürkTraktör has managed to maintain its leadership, with two brands for 8 years in a row.

The mission of TürkTraktör is to offer the most appro-priate product to its customers, who demand a more produc-tive and more comfortable tractor, and whose expectations

are steadily rising. With our tractors, developed by our R&D center, and with our ever expanding product range, we are sure that we are able to meet the needs of Turkish farmers. At TürkTraktör, our corporate family is working every day to attain our targets and keep customer satisfaction and loyalty high.

Looking at the current industry indicators, we have pos-itive expectations for 2015, in the wake of the last 4 years, which have been satisfactory for the manufacturing indus-try. We expect that 2015 will be a good year for the tractor sector provided that no negative developments occur in the domestic or global economy and no adverse weather con-ditions develop. The financing opportunities provided by Ziraat Bank and private commercial banks and state-provid-ed support and incentives for agriculture will be important determining factors for the state of affairs in 2015.

ABOUT OUR FINANCIAL AND OPERATIONAL RESULTSIn 2014, our total production reached 45,823 units, export reached 15,866 unitsand domestic sales reached 30,027 units.We manufactured a total of 2,525 transmissions and exported 2,596 transmissions.

According to the financial statements approved by the Board, the Company obtained a total revenue of 2,723,317,809 TL, consisting of 1,789,501,123 TL from domestic sales and 933,816,686 TL from export sales. The gross profit amounted to 489,154,307 TL.

Our operating profit was 296,742,363 TL with an op-erating margin of 10.9%. Our profit before tax reached 293,446,885 TL, and the net profit in the period, after de-duction of the tax provisions, amounted to 261,087,272 TL.

With the goal of fostering social sensitivity in the coming next generations, TürkTraktör made contributions, in the form of donations and sponsorships, to various non-govern-

mental organizations and educational institutions in 2014. The Company made donations and contributed support

amounting to 4,400,318 TL.

DIVIDEND PROPOSALAccording to our financial statements for the fiscal period 1 January 2014 to 31 December 2014, the Company’s net in-come is TL 261,087,272. These financial statements were prepared under International Financial Reporting Stand-ards, and audited by Güney Bağımsız Denetim ve S.M.M.M. A.Ş. (a member of Ernst&Young Global Limited). Our propos-al for profit distribution – prepared with due regard for prof-itability and cash status – is stated below.

It has been resolved to distribute dividend as shown be-low in line with Capital Markets Legislation, 19th article of Articles of Association and Dividend Policy approved by the shareholders at the general assembly on 24.03.2014.

Distribute first dividend to the shareholders Tl 159,292,554.20

Distribute second dividend to the shareholders Tl 40,707,445.80

and to allocate 2nd Type Legal Reserve Tl 19,733,155

It has been resolved to pay TL 200,000,000 in cash which is equal to the first and second dividend to be distributed to the shareholders.

It has been resolved to determine the dividend payment date as 25th of March and present to the approval of General Assembly held on 18.03.2015.

Thereby, the dividend will be distributed in cash;• to the resident taxpayer shareholders and non-resident tax-payer shareholders obtaining dividend income through an of-fice or a permanent representative in Turkey as gross (=net) 3.74749386 kr for each share nominal 1 kr (374.749386%)

and,• to foreign-based taxpayer shareholders; as gross 3.74749386 kr (3.56011917 kr net) for each share nominal 1 kr (356.011917%)• to the rest of our shareholders as gross 3.74749386 kr (3.18536978 kr net) for each share nominal 1 kr (318.536978 %).

Dear investors, business partners and employees, This Board of Directors today completes its term in office.

This meeting will elect new members of the Board and de-termine its official term of service. We thank all of you for the trust and support you have shown us during our official term.

We present a concise summary of our activities and the results obtained in 2014 together with our Annual Report. Above all, we thank our employees for their self-sacrificing work and strong support, and our stakeholders and business partners, subsidiary industrialists and authorized dealers, Turkish Metal Union and the most important the farmers preferred our tractors with whom we have progressed to-gether. I hope that these strong bonds of unity will bring yet greater success. ◼

Turgay DURAKChairman

MNE T PROFI T OF 261 MILLION T L IN T HE PERIOD,

TOTA L INCOME OF 2.7 BILLION T L,

46 47


Top Management

MARCO VOTTACEO - Board Member Marco Votta completed his undergraduate studies at the Business Administration Department of the Luigi Bocconi University of Commerce. He started his career at Pluritec S.p.A (a manufacturer of industrial machines) in 1994 and continued as a Management Consultant at Andersen Consulting. Votta commenced service at the Business Development Department of New Holland in 1998 and was appointed as Assistant General Manager in charge of Business Control at Türk Traktör ve Ziraat Makineleri A.Ş. and New Holland Trakmak Traktör ve Ziraat Makineleri Ticaret A.Ş. in 1998, where he worked as the CFO during 2006-2010. Votta has been in the position of General Manager since April 2010 ◼

AHMET CANBEYLİCFO - Board Member - (appointed to the position on 01.07.2014)Ahmet Canbeyli graduated from the Bosporus University Business Administration Department in 1998 and started his career as an Accounting Specialist in 1995. He worked as an Accounting Executive at Ram Dış Ticaret A.Ş. in 2000 and 2002. He was appointed as the Financial Affairs Executive to Tanı Pazarlama ve İletişim Hizmetleri A.Ş. in 2002. He subsequently went on to serve as Financial Affairs and Finance Group Manager, Assistant General Manager in charge of Financial Affairs and Finance and Assistant General Manager in charge of Financial Affairs and Operations at Koç Sistem A.Ş. during the period of 2005-2014. He has been the CFO at Türk Traktör ve Ziraat Makineleri A.Ş. since July 1, 2014 ◼

MEMET İLKAN KAMBERCFO - Board Member (resigned 30.06.2014)Memet Kamber completed his undergraduate studies at the Middle East Technical University Economics Department and post-graduate study at the Business Administration Department of Massachusetts University. He started his career as a Trainee in Financial Affairs at Koç Holding in 1991 and continued his career as Financial Affairs Auditor between 1995 and 1998. Kamber was appointed Assistant Coordinator of the Finance Group in 1999, Coordinator of the Finance Group in 2002 and Finance Coordinator in 2004. He worked as the CFO at Türk Traktör ve Ziraat Makineleri A.Ş. during the period of April 2010-June 2014 ◼

SEDAT TEZERİŞENERAssistant General Manager / PurchasingSedat Tezerişener was graduated from the Middle East Technical University Mechanical Engineering Department. He started his career as a Method Engineer at Türk Traktör ve Ziraat Makineleri A.Ş. in 1984. He went on to serve in the Mechanical Workshop Department, Manufacturing Planning and Control Department and Purchasing Department. Tezerişener has been the Assistant General Manager in charge of Purchasing since 2003 ◼

İRFAN ÖZDEMİRAssistant General Manager / Salesİrfan Özdemir completed his undergraduate studies in the İstanbul Technical University Business Engineering Department. He started his career as a Marketing Executive at DYO in 1991 and then worked as a Marketing Specialist and Marketing Manager. In 1994-2007, he served as the Regional Sales Manager and Regional Sales Coordinator at Tofaş. Özdemir has been the Assistant General Manager in charge of Sales at Türk Traktör ve Ziraat Makineleri A.Ş. since 2007 ◼

48 49


HASAN HALDUN ÖZGÜMÜŞAssistant General Manager / QualityHasan Haldun Özgümüş graduated from the Engineering Faculty of the Mechanical Engineering Department of the Middle East Technical University in 1982. He started his career as a Researcher at the Middle East Technical University Isılmaren Institute in the same year. After completing his military service, he worked as a Project Study Engineer at Türk Traktör Factory in 1984, where he took positions as Assembly Inspection Engineer, Quality Assurance Engineer, Quality Assurance Specialist, Quality Assurance Manager and Existing Product Engineering Manager. Özgümüş has been serving as the Assistant General Manager in charge of Quality since 2011 ◼

FRIEDRICH WIRLEITNERAssistant General Manager / Product and R&D(resigned 30.09.2014)Friedrich Wirleitner has a post-graduate degree in the field of Agricultural Equipment. He started his career at Steyr Daimler Puch AG in 1979. He worked as the Steyr Team Leader for the Middle East, then as a Product Specialist in the After-Sales Department. He subsequently served as a Technical and Warranty Executive, After-Sales Executive, Product Executive and Telehandler Product Executive until 2003. He was appointed Product Coordinator to India Tractors in 2004. He was appointed Assistant General Manager in charge of Product and R&D at Türk Traktör ve Ziraat Makineleri A.Ş. in 2008 and resigned from this position in 2014 ◼

ALI EL IDRISSI EL BOUZIDIAssistant General Manager /Product and R&D(appointed to the position on 01.10.2014)El Idrissi El Bouzidi completed his post-graduate studies at the Mechanical Engineering Department of Politecnico di Torino University in 2000 and started his career as a Production Engineering Specialist at the Fiat Group in 2001. He served as a Product Assessment Specialist, Production Methodologies Specialist, Quality Methodologies Specialist and New Product Quality Manager at CNH America LLC during the period of 2002-2010. He worked as the Compact Tractors and Equipment Platform Manager at CNH Industrial NV from 2010 to 2014 ad then was appointed the New Product Group Manager at Türk Traktör ve Ziraat Makineleri A.Ş. in April 2014. El Bouzidi has been serving as Assistant General Manager in charge of Product and R&D at Türk Traktör ve Ziraat Makineleri A.Ş. since 01.10.2014 ◼

SİYAMİ ESERAssistant General Manager / Production(retired 30.04.2014)Siyami Eser completed his undergraduate studies at the Middle East Technical University Mechanical Engineering Department and post-graduate study at the same university. He started his career as an Assistant Researcher at the Middle East Technical University Mechanical Engineering Department in 1980. He worked as a Production Executive at Hersek Makine ve Çelik İmalat in 1983. Eser started to work as a Cutting Tool Machines Engineer at Türk Traktör ve Ziraat Makineleri A.Ş. in 1984. He was appointed the Manager of Production Engineering in 1996 and then as Assistant General Manager in charge of Production in 2008. He retired in 2014 ◼

MATTHIEU SéJOURNéAssistant General Manager / MarketingMatthieu Séjourné graduated from the Mechanical Engineering Department of CESTI-Paris University and achieved a post-graduate degree at the SDA Bocconi Milan University Business Administration Department. He started his career at the Commercial Logistics Department of CNH in 2001. He was in charge of planning new product processes for the Asia, Africa, Middle East and Eastern European Regions at CNH in 2003-2005. Then he worked as Regional Manager in charge of the French-speaking countries in Africa and as the Regional Manager for South Africa at CNH. Séjourné was appointed to the position of Assistant General Manager in charge of Marketing at Türk Traktör ve Ziraat Makineleri A.Ş. in 2009 ◼

NEBİ DOğAN ÖZDÖNGÜLAssistant General Manager / Production(appointed to the position on 01.05.2014)Nebi Doğan Özdöngül graduated from the Middle East Technical University Metallurgy Engineering Department and started his career as a Method Engineer at Ford Otomotiv Sanayi A.Ş. in 1993. He worked as a Project Engineer in Engine and Transmission Quality Systems and Inspection, as the Team Leader of Ford Manufacturing Systems, Team Leader of Engine and Transmission Manufacturing Engineering, Quality Assurance Manager, the Truck Area Manager and Engine and Transmission Area Manager during the 1996-2014 period. Özdöngül was appointed the Assistant General Manager in charge of Production at Türk Traktör ve Ziraat Makineleri A.Ş. in May 2014 ◼

Top Management

50


51

Message from the CEO

in 2014 , W hich Wa s a special y e ar for t ürk tr ak t ör, W e go t the t urke y dis tribu t or ship

right s for c a se and ne W holl and br and cons truc tion equipment and entering int o a br and

ne W sec t or. hav ing re alized imp ortant in v es tment s in the field of cons truc tion equipment

in 2014 , t ürk tr ak t ör Work s W ith the aim of offering the mos t appropriate and qualit y

produc t s t o our cus t omer s W ith a high le v el serv ice approach.

B Y

M A NUFAC T UR ING

A T O TA L OF

45,823 T R AC T OR S

OF NE w

HOLL A ND, C A SE

IH A ND S T E Y R

BR A NDS IN 2014,


BROK E A R ECOR D

IN I T S HIS T ORY

OF 6 0 Y E A R S.

DEAR investors, business partners and employ-ees,

2014 is a special year for TürkTraktör as we celebrated our 60th anniversary. Having made significant contributions for Turkey to become one of the world’s leading agricultural product exporter economies through the breakthroughs we have realized since 1954, the year of our foundation, TürkTraktör, besides monitoring closely the developments in the global and lo-cal markets, realized projects which will bring efficient solutions to the current needs of the Turkish agriculture. As of the end of 2014, we exported New Holland, Case IH and Steyr brand products in our portfolio through the global dealer network of CNHI to over 130 countries around the world, and this fact alone bears wit-ness to the corporate reputation of our Company and the power of its manufacturing infrastruc-ture which focuses on producing satisfactory solutions for diverse needs.

As the seventh largest agricultural economy in the world as of the end of 2014, Turkey de-rives 7.4% of the GDP according to the data for 9 months of 2014 and 20% of the real employment from the agriculture sector according to Novem-ber results, and exports 1,630 agricultural prod-ucts. Works are continuously being carried out toward overcoming the deficiencies against the global competition conditions in the field of in-dustrial agriculture.

The average age of the tractor park in Turkey, which consists of 1.6 million tractors, being 23 has made Turkey one of the tractor markets of the world which have the most important re-newal potential. Besides the agricultural support mechanisms carried out by the government, at-tractive financing models offered by the Turk-ish banking system for the agricultural industry recently comes to fore as another factor which

gives dynamism to the tractor market of Turkey. Having a strong brand image identified with

innovations thanks to its successes achieved in the tractor and agricultural equipment sector, TürkTraktör is at 34th place in the ranking of “Top 500 Industrial Organizations of Turkey” prepared by the Istanbul Chamber of Industry (ISO) and at the 50th place in the Fortune 500 list ranking the largest, most profitable, most rapidly growing. As seen from these evaluations, which are the basic reference sources for the Turkish economy, TürkTraktör, with its annual tractor manufacturing capacity of 50,000 units and qualified human resources consisting of 3,040 employees at the plants in Ankara and Er-enler, is one of the leading players in the private sector of Turkey beyond the agricultural equip-ment sector ◼

WE COMPLETED THE ERENLER PLANT WITHIN JUST 15 MONTHSContinuing its manufacturing activities in the manufacturing plant in Ankara since its foun-dation, TürkTraktör laid the foundations for its second factory in Erenler on March 28, 2013 as a reflection of steadily increasing sales volume and inaugurated the factory on June 17, 2014. I would like to express my sincere thanks to Mr. Fikri Işık, the Minister of Science, Industry and Technology, Mr. Nihat Zeybekçi, the Minister of Economy, Mr. Mustafa V. Koç, the Chairman of the Board of Directors of Koç Holding, Mr. Richard Tobin, the CEO of CNH International N.V. and many representatives from the govern-ment, state and business world for attending the inauguration ceremony and supporting us. Con-structed within just 15 months thanks to strong support of Koç Group and CNHI, the majority shareholders of the Company, the Erenler Plant has carried the competitive edge of TürkTraktör

in domestic and international markets to higher levels ◼

WE GOT THE MOST PRESTIGIOUS AWARDS OF THE SECTORAs one of the leading exporters of Turkey, TürkTraktör, by winning one of the most prestigious awards of the agricul-tural industry for its New Holland TTJ model selected as the Tractor of the Year - Best of Specialized in 2014, showed once again that it is ambitious in competitive markets. Exporting 100,000th tractor in 2014, the Company has created a signifi-cant export opportunity for future with its TR6 model added to the product portfolio in 2014. Launched as the Local Giant, our TR6 model tractors are the largest tractors manufactured in Turkey ◼

WE MADE IMPORTANT INVESTMENTS IN THE FIELD OF CON-STRUCTION EQUIPMENTApart from celebrating our 60th anniversary, there is another reason that makes 2014 special for our Company. Closely mon-itoring the opportunities offered by the Turkish market, Türk-Traktör, in 2014, entered into a brand new sector by getting the Turkey distributorship rights of Case and New Holland brand construction equipment in accordance with the Compa-ny’s growth plans. In this connection, important investments were made in the field of construction equipment in 2014. Of these investments, the most significant one is TürkTraktör’s Construction Equipment Facilities in Izmir and Ankara which commenced operations in 2014. Thanks to these facilities es-tablished for the purpose of offering the most appropriate and quality products to our customers with a top level service ap-proach, we give support to the region on after-sale issues with a sense of the fastest and quality service to the extent possible ◼

WE BROKE A RECORD IN PRODUCTIONAccording to a report issued by TARMAKBİR, 64,342 tractors were manufactured in Turkey in 2014. Total production in the sector increased by 14% over the previous year. In the Turkish tractor market where significant increases were experienced, we, as TürkTraktör, broke a record once again in our history of 60 years. We manufactured a total of 45,823 tractors with our New Holland, Case and Steyr brands. Distinguished from its competitors for its balanced EBITDA and sustainable financial structure based on high profitability, TürkTraktör sold a total of 45,893 tractors in domestic and international markets and announced an operating profit of TL 297 million TL in 2014. TürkTraktör preserved its market shares in domestic and in-ternational markets as well as its financial profitability despite the slowdown in the global market, which refreshed the strong reputation of the Company in the eye of our shareholders and stakeholders ◼

R&D SPENDING AMOUNTING TO TL 26 MILLION AND 13 NEW PRODUCT PATENTSHaving a broad product portfolio in harmony with the geo-graphic conditions in different parts of the world, TürkTraktör is uninterruptedly continuing its investments and R&D works in line with the changing customer needs and expectations. Carrying out product development works under the coordina-

tion of the R&D Center within its organization, the Company made R&D spending amounting to TL 26 million and acquired patents for13 new products in 2014 ◼

WE HAVE CARRIED THE 2ND HAND TO AN INSTITUTIONAL PLATFORMAnother important development in 2014 was carrying of the 2nd hand tractor sales to an institutional platform. With this new platform launched by TürkTraktör, which will be used by other firms as well, tractor dealers can sell 2nd hand tractors. We expect that 2nd hand tractor sales will have a positive ef-fect on the 1st hand sales as well ◼

SUPPORT ON THE SPOT, SIDE-BY-SIDE SERVICEAs TürkTraktör, we maintain our characteristic of being the leader of the sector in the after-sales services. We are manag-ing the largest warranty park in Turkey. We are together with our dealers, service points and customers at all times and we believe in the working by seeing and in the support on the spot. With our New Holland and Case IH brands, we provide ser-vices at a total of 509 points of service. Within the scope of customer visit and support-in-the-field program, we conduct-ed face-to-face meetings with 2,799 farmers in 2014 ◼

SOCIAL RESPONSIBILITY IS ALWAYS OUR PRIORITYAdopting the corporate social responsibility works as an inte-gral part of its essential activities, TürkTraktör focused again on projects which will add value to the community in 2014. Granting tractor assemblies and engines to a number of voca-tional high schools during the year, TürkTraktör provided use-ful trainings to vocational high school students and farmers under the aegis of the Agricultural Machinery Lab. Aiming to create awareness about participation of the disabled citizens in the social life with the slogan of “For My Country: Barrier Free Life”, TürkTraktör gave trainings on the “Correct Treatment of the Disabled” to 191 people through volunteered instructors from its staff in 2014.

I would like to express my sincere thanks to Koç Group and CNHI, our majority shareholders who gave countenance to us throughout 2014, the employees of TürkTraktör who are the major force behind our success and who always work with sac-rifice, our business partners, customers and all stakeholders. Our greatest wish is to enjoy success and achieve more success-es in 2015 ◼

Marco VOTTAceo

Messages from the Management

52

From 1954 to 2014…

From a single factory in Ankara to being a leader in Turkey

To being one of the biggest manufacturers in Europe

From 1 country to 130 countries

To 5 continents

To wherever there’s a piece of soil

From one factory to a second one

From one worker to thousands

To the top of the work force capacity, to the top level of contribution to the economy

In 60 years, with TürkTraktör…

We came such a long way!

From research to development

From design to implementation

To 24-hours customer service

To innovation and state-of-the-art technology



From being the first tractor manufacturer of Turkey

To the wide product range

To one in every two tractors in Turkey

From one generation to the next



This country took a huge step in 60 years with TürkTraktör,

the manufacturer of one in every two tractors in Turkey

We celebrate its 60th year...

All together!

54 55


1954 - 20141954 1955 1963 1967 1968 1977 1979 1982 1983 1988 1992 1993 1998 1999 2002 2004 2007 2008 2009 2010 2011 2012 2013 2014

TürkTraktör establishedMinneapolis Moline TürkTraktör ve Ziraat Makineleri A.Ş. (MMTT) was established in Ankara on June 25, 1954 by MKE, TZDK, Ziraat Bankası, Tariş, Çukobirlik and Minneapolis-Moline from the uS.

The first tractor in TurkeyThe factory’s opening ceremony, attended by the then-Prime Minister Adnan Menderes, was held on March 4, 1955 and the first Turkish tractor, the UTSD model, was manufactured at the TürkTraktör facilities on March 8, 1955.

A commercial agreement was signed with Egemak, the general distributor of Fiat in Turkey, under which Egemak commenced selling tractors manufactured and assembled at TürkTraktör facilities.

Internazionale Holding Fiat S.A. and Egemak became partners of the Company.

The name of the Company was changed to “TürkTraktör ve Ziraat Makineleri A.Ş.”

Egemak transferred its general distributorship to Trakmak, a 100% owned subsidiary of the Koç Group.

Turkey’s first tractor exportBeing the first exporter of automotive sector, TürkTraktör exported 300 units of 480-model tractors to Pakistan while celebrating its 25th anniversary.

First exports to Iran.

Garanti Bankası, which was accepted as a partner of the Company in 1982, transferred all its shares to Koç Holding A.Ş. Koç Holding share in the capital of the Company reached 18%.

Production of transmission commenced.

The company became a whollypublic company.State Partnership Administration transferred all of its shares to the Koç Group on 12 September 1992 when the Company became a wholly private company.

The name of Fiat S.p.A was changed to New Holland N.V. toward the end of the year after New Holland N.V. became the Company’s foreign partner.

New era, new brandUnder a partnership agreement signed between Koç Holding A.Ş. and New Holland N.V., the registered shares owned by each company in TürkTraktör were equalized. Thus, TürkTraktör adopted the principle of joint management.

The brand name of all formerly “Türk Fiat” branded products was changed to “New Holland”.

From within the New Holland global network, TürkTraktör was selected as the R&D and production center for the 56-66 series tractors in 50-96 HP segment.

New Holland bought out the shares of Case IH and subsequently, CNH - Case New Holland became the partner of TürkTraktör.

The serial production, and exports to 5 continents via the CNH sales network, of the TDD and JX series tractors, which were designed and developed by TürkTraktör for domestic and international markets commenced.

Shares in the Company offered to the public in its golden yearThe 50th anniversary of the Company was celebrated on 6 April 2004.

TürkTraktör was awarded the “Circle of Excellence Award” by Case New Holland for its outstanding success in the design of the TDD/JX model.

Group C bearer shares in the Company owned by Koç Holding A.Ş. were offered to the public through the Borsa İstanbul at a price of TL 8.00. Trading commenced.

The 500,000th tractor was manufacturedTürkTraktör celebrated the production of its 500,000th tractor with a ceremony held on November 9, 2007. The 500,000th tractor was donated to the Ankara University Agricultural Faculty.

TürkTraktör and New Holland Trakmak merged under the roof of TürkTraktör.

R&D Center registeredTürkTraktör R&D Center was registered with the Ministry of Science, Industry and Technology on 02.07.2009 under the Law No. 5746 on the Support of Research and Development Activities and the regulation concerning the implementation and control of the law.

The 200,000th engine was produced.

The Legend is backA limited 480 units of the legendary1970s-era orange-colored Fiat 480 series tractor were produced to bring back the legend.

CNH Global NV based in the Netherlands transferred its shares in the Company at a value of TL 20,013,375 to CNH Österreich GmbH based in Austria, a 100% owned subsidiary of CNH Global nV.

The Tier III project, preparations for which had started in 2009, was completed in 2011 and, thus, TürkTraktör became the first producer of Tier III series agricultural engines in Turkey. Production of the new model agricultural engines enabled the use of a world standard, more environmentally-sensitive product.

110 HP tractors were manufactured.

Erenler Plant foundation was laid.The first export of the Utility

Light 75HP model to Japan, one of the world’s leading and demanding industrial countries, were undertaken with considerable success.

Introduced to international markets in 2011, the Utility Light series was introduced to the domestic market in 2013. Production and shipment of Utility Medium model tractors commenced.

An Importation and Distributorship Agreement was signed with CNHI International S.A. for the importation and domestic sales, marketing and after-sales services of New Holland and Case branded construction equipment.

TürkTraktör at 60 years oldIn order to expand production facilities on top of the factory in Ankara, the second plant was opened in the municipality of Erenler of the province of Sakarya.

The new vineyard and orchard type New Holland TTJ Series tractors , which were developed and produced in Turkey, was awarded the Tractor of the Year - Best of Specialized 2015 one of the most prestigious agricultural industry awards.

In May 2014, the local giant New Holland TR6 series tractors, which represent a significant export potential for the future, were introduced to the domestic market as the largest locally produced tractor in Turkey.

TürkTraktör was awarded the first prize in the automotive category during the 3rd Private Sector R&D Centers Summit organized by the Ministry of Science, Industry and Technology.

100,000th tractor exported.

Milestones

t ürk tr ak t ör ha s e xperienced m an y imp ortant

de v elopment s in the cour se of it s adv ent ure of 60 y e ar s

of de v eloping produc t s and introducing innovations

that mee t the m arke t dem ands, all W hile continuously in

pur suit of e xcellence. here is the his t ory of t ürk tr ak t ör

m arked ou t W ith it s miles t ones.

57


56

Investor Relations and BIST Performance

TürkTraktör Moves Toward the Future with a Strong Shareholder Structure

ac ting according t o it s v ision of being

the compan y that dri v es the modern

agricult ure, t ürk tr ak t ör is confidently

s triding t oWard the fu t ure, combining the

p oW er of koç holding W ith the e xpertise

of it s international partner, cnhi.

THANKS to the long-established business culture and fi-nancial strength of Koç Holding and the technical knowl-edge, sectorial expertise and international experience of CNHI in the field of manufacturing agricultural equip-ment, TürkTraktör is a company with a strong sharehold-er structure, which makes its financial and operational successes sustainable.

As a result of the merger, registered on 31.03.2008 based on the permission of the Capital Markets Board (SPK) with ref. no. B.02.1.SPK.0.13-276/3197, dat-ed 25.02.2008, the capital issued by TürkTraktör was changed to TL 53,369,000, but the registered capital ceil-ing remained at TL 250,000,000. The shares represent-ing the increased capital were registered by the letter no. 17/214 of 31.03.2008 of SPK in accordance with the Cap-ital Markets Law No. 2499.

The numbers and amounts of the bearer shares in the A, B and C Groups are given in the following table accord-ing to grouping.

Investor Relations Performance Boosts Company PerformanceWorking on the principle of de v eloping tr ansparent rel ations W ith the shareholder s,

the t ürk tr ak t ör in v es t or rel ations department held talk s W ith ov er 10 0 e xis ting and

p o tential in v es t or s and analys t s t o infor m them abou t the value the compan y ha s cre ated

for in v es t or s.

SINCE 2004, 25% of the shares of Türk-Traktör have been traded under the stock code TTRAK.IS on the National Market of Borsa İstanbul. The Company is included on the BIST National, BIST 50, BIST 100, BIST All, BIST Corporate Governance, BIST Dividend, BIST Div-idend 25, BIST Industrial, BIST Metal Goods, Machinery, and BIST Ankara Indexes.

Having adopted the principle of de-veloping transparent relations with the shareholders, the Investor Relations Department holds one-to-one talks, roadshows, press conferences and meet-ings with analysts as well as answering all written and verbal questions from shareholders, analysts and fund man-agers throughout the year. Thanks to such activities, investors are constantly informed and notified about any chang-es while with corporate governance and investor relations set to international standards, the Investor Relations De-partment carries out work to increase the interest of existing and potential investors in the company.

In 2014, the Investor Relations De-partment participated in conferences and roadshows at home and abroad and made one-to-one talks with over 100 existing and potential investors and an-alysts. 140 representatives of the press, analysts and fund managers attended the 3 meetings, attended by the top management, where the quarterly fi-nancial results were evaluated ◼

Koç Holding A.Ş.Koç Holding, which owns 37.50% of the shares in the capital of TürkTraktör, is one of the largest conglomerates in Turkey in terms of turnover and export revenues as well as in terms of trading volume on the Borsa İstanbul as well as jobs created. Having been focused on creating value for its stakeholders for 87 years, Koç Holding provides added value at significant levels to the Turkish economy with its successful activities in the international arena ◼

*CNH Industrial Osterreich GmbH is 100% subsidiary of CNH Industrial NV.

CNH Industrial NVOwning 37.50% of TürkTraktör, CNHI is one of the world’s largest tractor and agricultural equipment manufacturers. The Company’s global organization includes 12 brands, 62 production facilities and 48 R&D centers with over 71,000 employees in total. Carrying out sales and marketing activities in 190 countries of the world, the Company has over 10,000 dealers across the world ◼

THE VALUE CREATED BY TÜRKTRAKTÖR FOR ITS INVESTORS

The implementation of principles at universal standards with regard to corporate governance, approach to doing business, ethical principles, environmental policies and working conditions

New projects to expand the product range and increase capacity

Flexible manufacturing system, high productivity and low-cost manufacturing

High capacity utilization rate

Strong and reliable shareholder structure

The largest tractor manufacturer of Turkey•Accountsfor71%ofalltractorsmanufacturedinTurkey•Accountsfor90%ofallTurkishtractorexports

Trust, high reputation and strong brand management based on 60 years of experience

Extensive, consumer-focused service network, comprehensive customer knowledge and customer database management

Strong human resources structure

Resilient structure as a result of diversification in export markets

Compliance with corporate governance principles•SegregationofdutiesofCEOandBoardChairman

•ExecutiveCommittee•AuditCommittee

•CorporateGovernanceCommittee•RiskAssessmentCommittee

Target management system focused on performance and creation of value for shareholders

koç holding a. Ş.

shareholder structure

37.5%

cnh industrial nv

shareholder structure

37.5%

Shareholder Structure

SHAREHOLDER GROUPSHARE

AMOUNT (TL)(%) VOTING RIGHT

VOTING RIGHT RATIO (%)

TYPE OF PRIVILIGE

Koç Holding A.Ş. a 20,013,375 37.50% 2,001,337,500 37.50% Selecting board member

CNH Industrial Osterreich GmbH* b 20,013,375 37.50% 2,001,337,500 37.50% Selecting board member

İnan Kıraç c 17,515 0.03% 1,751,475 0.03% -

A. Aslıgül Kıraç c 8,757 0.02% 875,738 0.02% -

District Treasurer on behalf of A.W. Huff c 362 0.00% 36,190 0.00% -

Public Quotation c 13,315,616 24.95% 1,331,561,597 24.95% -

58 59


Data from the End of 2014Stocks in TürkTraktör have been traded on the Borsa İstanbul under the stock code TTRAK.IS since 4 June 2004.

The highest and lowest prices of TürkTraktör stock (2004-2014)The highest and lowest prices of TürkTraktör stock (2004-2014) are given in TL and US dollars in the following table.

INVESTOR RELATIONS CONTACT DETAILSİlkiz KaragüllüInvestor Relations [email protected] 233 25 02 Sıla AkçayInvestor Relations [email protected] 233 25 04

TTRAK market value (Million TL)

20082007200620052004min max min max min maxmin max min max min max min maxmin max min maxmin max min max

2009 2010 2011 2012 2013 2014

tl usd

daily average trading volume

closing price highest price lowest price

76.85 TL 78.20 TL 51.00 TL

4.7million TL

In 2014, the price of TürkTraktör stock increased by 18% with regard to the average of 2013, exhibiting performance above the BIST 30 index, which decreased by 5% over the same period.

Stock Performance(Change of averageprice in 2014Compared with 2013)

change

53.93

63.52

18%

the average of 2013

the average of 2014

With increased interest from corporate investors, the share of foreign investors in the publicly held stocks of TürkTraktör has risen from 72% to 85% over the last 5 years, whereas the share of foreign investors in BIST decreased from 66% to 64% during the same period.

Development in the share of foreign investors in the publicly held stocks of TürkTraktör (%)

t t r a k

72

2010

81

2012

70

2011

83

2013

85

2014

b is t

66

2012

62

2011

66

2010

63

2013

64

2014

Analyst CoverageAccording to the latest reports issued in 2014, 15 analysts actively reporting on TürkTraktör, their ratings were 6 BUY, 9 HOLD and 3 SELL.

buy6

sell3

hold9

6.20

7.65

5.13

5.55 9.

90

9.30

5.53

18.2

013

.70

12.8

0

17.4

014

.77

13.1

315

.10

3.48

2.04

2.033.58 9.

206.

17

5.227.95

23.6

016

.38 24

.30

14.8

139

.10

24.7

6

14.2

426.6

0

58.2

532

.61

48.2

025

.13

68.0

037

.81 51

.00

22.4

9

36.8

678

.20

8.82

4.01 7.

33

4.16

3,28

2

2,77

5

2,98

9

2,93

5

3,23

7

3,40

0 4,02

9

3,91

7

3,76

3

3,74

1 4,10

1

3,72

5

3,68

2

31/1

2/13

31/0

1/14

31/0

5/14

30/0

9/14

31/0

3/14

31/0

7/14

30/1

1/14

28/0

2/14

30/0

6/14

31/1

0/14

30/0

4/14

31/0

8/14

31/1

2/14

Stock Performance

Market ValueThe market value of the Company has reached 4.1 billion TL as of the end of 2014.

ttrak bist 100 bist 30

31/1

2/13

31/0

1/14

31/0

5/14

30/0

9/14

31/0

3/14

31/0

7/14

28/1

1/14

28/0

2/14

30/0

6/14

31/1

0/14

30/0

4/14

31/0

8/14

31/1

2/14

100

85 91

89 99

104

112 12

3

119

115 11

4 113

125

100

91 92

103

109 11

7

116 12

1

118

111 11

9 127

126

100

91 92

104

110 11

8

117 12

3

120

111 12

0 130

129

Investor Relations and BIST Performance

60 61


“TürkTraktör stock delivered yield of 25%in 2014.’’

“In 2014, company stocks traded on the Borsa İstanbul

under the stock code TTRAK.IS saw their lowest

priceat51.00TLandtheirhighestpriceat78.20TL

andsucceededindeliveringayieldof25%abovethe

index. Our primary goal is to ensure that the stock is

traded above its actual value. In order to achieve this

goal, we endeavor to make sure that all information

disclosed to analysts and investors is accurate and

that investors get the “same” information regardless

of their size and trading volume relative to one-

another. TürkTraktör has distributed an average of

75%ofitsprofitstoitsshareholdersoverthelastfive

years. Over the last 10 years, the Company has paid

dividends amounting to 1.2 billion TL in total.

AHMET CANBEYLİCFO

Profit per Share (TL)

3.37

5.02

5.245.20 4.89

2010

2013

2011

2012

2014

Sub -Categories Weight a ssigned grade

Shareholders 0.25 84.88

Public Disclosure and Transparency 0.25 93.12

Stakeholders 0.15 97.13

Board of Directors 0.35 89.67

Tota l 1.00 90.46

*Share closing price as of dividend payment date have been

used to calculate the dividend yield.

10%

2012

*

2013

*

2014

*

10%

7%

Dividend Payments and Yield

dividend yielddividend (million tl)

200

200

300

Save and Gain with TürkTraktör

Dividend Policy

TÜRKTRAKTÖR carries out the dividend distribution in accordance with the provisions of the Turkish Commercial Code, Capital Markets Regu-lations, Tax Regulations and other relevant regulations as well as with the relevant article in the Articles of Association regulating the distri-bution of profit. In executing the dividend distribution, a balanced and consistent policy is pursued between the shareholders and the interests of the Company, in line with the Principles of Corporate Governance. In principle, a minimum 60% of the net distributable profit in the period, calculated in accordance with the Capital Markets Regulations, is dis-tributed in cash and/or by gratis shares, according to the assessment of market expectations, the Company’s long term strategy, investment and financing policies, profitability and cash situation, to the extent that the relevant regulations and the financial sources permit.

It is aimed to execute the dividend distribution at latest within one month following the General Assembly Meeting. The date of the div-idend payment is determined by the General Assembly. The General Assembly or, if authorization is granted, the Board of Directors, may de-cide to pay dividend in installments in accordance with Capital Markets Regulations.

As per the Articles of Association of the Company, the Board of Di-rectors may pay advance dividend if authorized to do so by the General Assembly, provided that the Capital Markets Regulations are complied with.

Profit distribution is carried out shortly after the General Assembly Meeting within the periods specified in the legislation ◼

TÜRKTRAKTÖR gives the maximum care to compliance with the Corporate Governance Principles of the Capital Markets Board and observes the corporate governance principles of equality, transparency, accountability and responsibility in advancing toward its goals.

TürkTraktör intends to present information, with the exception of trade secrets, to shareholders, the public and stakeholders accurately and in an understandable, complete, easily accessible and timely manner, in accordance with the Corporate Governance Principles of the Capital Markets Board. In the provision of such information, the principles of equality, transparency, accountability and responsibility are observed.

The Information Policy of the Company is posted on the Investor Relations - Corporate Governance page on the offi-cial web site at www.turktraktor.com.tr ◼

CORPORATE GOVERNANCE RATINGTürkTraktör has been constantly raising its performance in compliance with the Corporate Governance Principles. The Company’s Corporate Governance Rating, which was first es-tablished at 7.52 on August 23 2007, has been raised for the seventh time to 9.05, reflecting the improvements achieved in this area.

The major factors in the raising of the Corporate Govern-ance Rating of TürkTraktör to 9.05 were; the importance giv-en by TürkTraktör to the principles of corporate governance and the Company’s desire to implement them as a continuous and dynamic process as well as the improvements made in line with these principles over the period since the previous ratings ◼

Corporate Governance Rating (%)

83.02

89.02

91.04

85.04

90.46

2010

2013

2011

2012

2014

Corporate Governance

62 63

TürkTraktör, 2014 Annual ReportPerformance in 2014

e xhibiting successful perfor m ance in it s fields of business, t ürk tr ak t ör closely monit or s

de v elopment s in the loc al and global m arke t s W here it oper ates, builds up it s s tr ategies

and mov es t oWard it s goal s.

THE AGRICULTURAL INDUSTRY IN TURKEY IN 2014 THE strategic importance of the agricultural industry is increasing constantly due to the fact that it produces the basic food resources, is a very important source of employment and contributes a great deal to the national economy. One of the key inputs of the agricultural industry is undoubtedly soil. As one of the most essential assets of agriculture, which is one of the main industries in the economy, soil is an indispensable natural resource for continuation of human life and for development and wealth of nations.

Food and agricultural industries account for 7.4% of the total GDP of the coun-try according to the data for 9 months of 2014 and provide employment to 20% of the total labor force according to 11 months data. The greater part of the em-ployment in rural areas of Turkey that represent roughly 25% of the population is provided by small and medium size farms ◼

TURKEY HAS SIGNIFICANT POTENTIAL IN AGRICULTUREWith considerable potential in agricultural production, in terms of quantity and diversity of product, Turkey is one of the leading countries of the world in the field of food and agriculture, due to its favorable geographic and ecological conditions. The use of resources efficiently and in a sustainable manner is an important issue in terms of economic development. The total number of plant varieties in Europe amounts to 11,500, while Turkey hosts a total of 11,000 varieties. Turkey has many agricultural products enjoying ecological supremacy and comes in the first place in the world in the production of valuable crops such as nuts, apricots, figs, sour cherries, quinces and poppy seeds. Turkey ranks among the top 5 in the world in the production of a number of agricultural products.

According to 2013 year end data, Turkey’s agricultural added value rose to roughly 62 billion US dollars and exports of agricultural products increased to 19 billion US dollars. Turkey ranks 7th in the world and 1st in Europe in terms of na-tional income from agriculture. Turkey increased her competitive power in 2014 and reinforced her position as a net exporter of agricultural products. According to the data released by TURKSTAT, the agricultural industry grew by 3.6% and the GDP share of the agricultural industry was 7.4% in 2013, given in current pric-es. These rates were 7.6% and 7.4%, respectively, in 9 months of 2014. While the ratio of the sector in the total employment was 23.8% in 2013, this figure was an-nounced as 20% reference to 11 months data for 2014. Exports of foodstuffs and agricultural products amounted to 17 billion US dollars, whereas imports were at 11.2 billion US dollars in 2013. Moreover, exports rose to 14.3 billion US dollars and imports to 10 million US dollars over the period of January-October in 2014 ◼

BESE T BY DROUGH T,

FROS T, H AIL, S TOR MS,

E XCESSI V E PRECIPI TAT ION

A ND E XCESSI V ELY HIGH

T EMPER AT URES, 2014

wA S A H A RD Y E A R FOR

AGRICULT URE. ACCORDING

TO T HE DATA RELE A SED BY

T HE T URKISH S TAT IS T IC A L

INS T I T U T E ( T URK S TAT ), T HE

ECOnOmyGREwBy2.8%

OvERApERiOdOf9mOnThS,

w HILE T HE AGRICULT UR A L

INDUS T RY CON T R AC T ED BY

3%duETOdROuGhTAndThE

EFFEC T S OF OT HER N AT UR A L

DISA S T ER S.

THE SECTOR CONTRACTED BY 3%Afflicted with drought, frost, hail, storms, excessive precip-itation and excessively high temperatures, 2014 was very hard year for agriculture. According to the data released by TURKSTAT, the economy grew by 2.8% in 2014 over the 9-months period, while the agricultural sector contracted by 3% due to drought and other natural disasters. According to the data released by TURKSTAT, production of grains and other crops reduced by 6.6% and fruit by 6.2%, while produc-tion of vegetables grew by 4%. The production of wheat de-creased by 13.8%, barley by 20.3%, rice by 7.8%, chickpeas by 11.1%, and red lentils by 17.7%. Should weather conditions normalize, it is expected that 2015 will be a better year for the agricultural sector ◼

FERTILE SOILS MUST BE PROTECTEDIn order to make the agricultural sector in Turkey more productive as a whole, improvements to the agricultural in-frastructure and rural development are among the highest priority issues. One of the primary factors reducing the pro-ductivity of agricultural enterprises is the high production costs arising from the small scale of agricultural enterprises and the overly-divided nature of lands of these enterprises. In the Western European countries, the average size of land per enterprise is 400 to 500 decares, while this is down to 59 decares in Turkey. A field of this size is comprised of 10 parcels. In order to ensure the productive use of arable fields, it is the utmost necessity that further division of the land be prevented. Law No. 5403 on Soil Protection and Use of Land was enacted in 2014. This law represents one of the first steps required for the creation of a system enabling benefit to accrue from economies of scale and to prevent the further di-vision of land. The law contains statutory regulations which will prevent the division, and selling by way of division, of agricultural lands.

In order to achieve the targeted average land size, very im-portant steps toward the consolidation of agricultural lands are being taken. So far 4.2 million hectares of parceled land has been consolidated. According to the plan, an additional 1 million hectares will have been consolidated during the first half of 2015. It is targeted that 14 million hectares of land will be consolidated and reclaimed by 2023 ◼

14 MILLION HEC TA RES

OF L A ND IS E XPEC T ED

TO BE CONSOLIDAT ED

A ND RECL AIMED BY

2023.

The Agricultural Sectorand Tractor Market

64 65


Agricultural Support Budget (in current prices, million TL)

Agricultural Support Payments on the basis of Land Area

Additional Payment on the basis of Land Area (organic agriculture, good agriculture, soil analysis)

Diesel fuel

Fertilizer

Use of Certified Seeds and Saplings

Protection of Agricultural Fields for Environmental Purposes

Hazel Nuts

Compensatory Payments

Differential Payment Support Services

Cereals and Legumes

Tea

Products with Supply Deficit

Livestock Support Payments

Agricultural Support for Rural Development Purposes

Agricultural Insurance Support Services

Other Support for Agricultural Purposes

South Eastern Anatolian Project Action Plan Rural Development and Livestock Support

Grand Total

2015*

2,964

230

700

850

130

55

860

137

3,065

992

155

1,918

2,953

500

404

14

141

10,141

2014*

2,723

199

650

785

118

50

790

125

2,921

980

150

1,791

2,887

484

356

99

129

9,599

2013

2,435

154

607

718

76

40

720

123

2,607

1,197

170

1,240

2,756

478

299

109

90

8,774

SUBSIDY FOR THE SECTOR CONTINUESAgricultural subsidies, which are granted regu-larly every year and amounted to 8.7 billion TL in 2013, were increased to 9.5 billion TL in 2014. The government program for 2015 has projected a total grant of 10.141 billion TL in subsidies to the agricultural sector. Regarding agricultural subsi-dy payments, the actual figures in 2013, estimat-ed figures for 2014 and projections in the program for 2015 indicate that the amounts of all subsidies have been increased in real terms. No significant change to the rate of premium payments has been planned. The ratio of subsidies for livestock and rural development to the total payments has de-creased, while the ratio of subsidies calculated on the basis of land area is expected to rise. ◼

THE TURKISH TRACTOR MARKET IN 2014The world tractor market reached to 1.5 mil-lion units at the end of 2014. In China and In-dia, which represent half of the global market, around 868 thousand tractors in total were sold. In Europe where 174 thousand of tractors were sold in 2013, the market contracted and 159 thousand of tractors were sold in 2014. The North America market where 235 thousand of tractors were sold in 2013 was recovered and total sales figure increased 243 thousand in 2014. Statistics show that the largest tractor manufacturers in the world are at the same time the largest tractor importers ◼

TURKEY, THE 4TH LARGEST TRACTOR MARKET OF THE WORLDTurkey is currently the 4th largest tractor market in the world. This offers significant opportunities to manufacturers. According to the data released by the TURKSTAT, the av-erage age of 1.6 million tractors in the tractor park of Turkey is 23. The fact that more than half a million tractors in the current tractor park have outdated specifications significant-ly increases the potential for renovation of the tractor park. Additionally, spreading aware-ness of performance and quality, in parallel with the tendency for branding in the sector, increases interest in products with higher horse power, supported by distinct technolog-

ical functions. If the potential for renovation of the trac-tor inventory in Turkey is utilized well, a signif-icant productivity in-

Manufacturing units of TürkTraktör 39,574

2012

2013

2014

38,530

45,823

crease in the agricultural sector is expected in the coming period.

In parallel with the increased importance of industrial agriculture in the global markets and Turkey, it is expected that the Turkish tractor market will enter a rapid course of de-velopment in the next period. In order for this process should run healthily, an increase in incentives for the employment of modern ag-ricultural techniques and agricultural mech-anization is vitally important. In addition, should such international standards as tran-sition to 4th generation emission regulation, which will become compulsory in 2017, be made compulsory for the domestic market, it is expected that this will increase the export potential of the sector significantly. ◼ PRODUCTION GREW BY 14% OVER THE PREVIOUS YEARAccording to a report issued by TARMAKBİR, 64,342 tractors were manufactured in Turkey in 2014. Total production of the sector grew by 14% over the previous year. Despite re-gional drought and many adverse conditions, this production is at a record high when com-pared with that of the last four years. Also the number of tractors registered grew in parallel with the growth in production. According to the traffic registration data released by the TURKSTAT, the number of tractors sold in 2014 grew by 14% over 2013 to 59,459 units. Reasons for this increase include higher crop prices despite low yield due to adverse cli-matic conditions and easier access to low-cost loans for retail purchases. Apart from these,

“We are the apple of Turkish industry’s eye with our manufacturing technology’’

“Providing employment to

over 3 thousand people,

TürkTraktör is one of the

apple of Turkish industry’s

eye. This factory has

superior manufacturing

technology that can compete

with European and global

companies. We are following

worldwide technological

developments and introduced

into our products.”

NEBİ DOğAN ÖZDÖNGÜLAssistant General Manager / Production

*Estimated

ACCORDING TO T HE DATA RELE A SED BY TA R M A KBİR,

6 4,342 T R AC TOR S w ERE M A NUFAC T URED IN T URKE Y

IN 2014. TOTA L PRODUC T ION IN T HE SEC TOR GRE w BY

14%OvERThEpREviOuSyEAR.dESpiTEREGiOnAL

DROUGH T A ND M A N Y A DV ER SE CONDI T IONS,

PRODUC T ION wA S AT A RECORD HIGH w HEN COMPA RED

w I T H T HE L A S T FOUR Y E A R S.

Performance in 2014 The Agricultural Sector and Tractor Market

66 67


“We are working for timely delivering the perfect product’’

“We are working for timely delivering

the perfect product. Supply chain

management has key role in the success of

manufacturing companies. By managing

supply chain successfully, you can decrease

the inventory level, shorten your time to

respond you customer, decrease the costs

depend on the efficiency in production plan

and you enable to produce the best product

with high quality in short period of time.”

FUAT SERDAR AYDINSupply Chain Director

T üRK T R A K TöR M A NUFAC T URED 2,525 T R A NSMISSIONS FOR E XP ORT A ND 45,823 T R AC TOR S IN

2014wiThAGROwThBy19%OvERThEpREviOuSyEAR,BREAkinGARECORdinpROduCTiOn.

With an annual production capacity of 50,000 tractors, TürkTraktör manufac-tured 2,525 transmissions and 45,823 tractors in 2014 with a growth of 19% over the previous year. Thanks to its strong manufacturing infrastructure and high brand recognition, the Company carries out its manufacturing activities uninterruptedly, maintaining its leadership in the domestic market with a market share of 49.4% and making exports to over 130 countries.

One of the leading Turkish exporters, TürkTraktör exported 15,866 tractors thanks to its extensive product range and the efficient international CNHI sales net-work, despite the slow-down on the international markets. The Company exported 2,596 transmissions in 2014. As of the end of 2014, TürkTraktör export revenues amounted to 934 million Turkish liras ◼

COMPETITIVE ADVANTAGESThe primary competitive advantages of TürkTraktör over its competitors are as fol-lows:• The most efficient sales and after-sales service network in the field of agricultur-al tractors and equipment and strong product range with New Holland and Case IH brands,• A rich product range from agricultural tractors with various engine ratings (from 22 HP to 340 HP) to combines, planters and cotton pickers,• Strong brand reputation created by the “Made in Turkey” image among the stake-holders,• Competent human resources in all business processes from manufacturing to sales and marketing,• High brand recognition and customer satisfaction created via product quality,• Range of products equipped with new features thanks to competency in product development ◼

Market leadership of TürkTraktör

türktraktör total market market leadership13

,497 18

,565

30,3

65

60,3

41

25,3

44

25,3

28

29,3

71

50,3

18

52,2

86

59,4

59

36,0

32

13,7

58

27,0

22

2008 2009 2010 2011 2012 2013 2014

the European Union Instrument for Pre-Accession Assis-tance (IPARD) support plays an important role. Reference to Agriculture and Rural Development Support Institution data, thanks to the IPARD supports, it was announced that 5,339 tractors have enjoyed support under various projects so far. Apart from the IPARD support, it must be said that loans extended primarily by Ziraat Bank and other commer-cial banks have had a strong impact on the increase in tractor sales.

Every year more advanced models are introduced to the tractor market, which plays an important role in the develop-ment of the food sector, considered to be one of the strategic sectors. In a sector where intensive competition, particularly price-based competition, reigns, TürkTraktör has significant competitive advantages thanks to its experience and exper-tise of 60 years in the sector. Manufacturing the main com-

ponents such as engine, transmission, axle, hydraulic lift, etc., the Company is appreciated by all stakeholders, primar-ily farmers, on the account of the high degree of local manu-facturing ◼ MARKET LEADER FOR 8 YEARSOn the Turkish tractor market, where significant gains are being made, TürkTraktör has had a market share of 49.4% with its New Holland and Case IH brands over the last 8 years, according to the traffic registration data released by TURKSTAT. The Company has a market share of 44% for its New Holland tractors, which meet needs of farmers in all segments with 26,000 tractors sold, and 5% for its Case IH tractors, with 3,000 tractors sold, according to the records of the TURKSTAT ◼

Manufacturing units

according to TARMAKBİR

Export units

according to TARMAKBİR

53,9

82

56,4

07

64,3

42

15,7

00

15,8

72

17,5

55

2012 2013 20142012 2013 2014

Sales units of TürkTraktör

40,162 39,026

45,8932012 2013

2014

14,565 14,402 15,8662012 2013 2014Export units of TürkTraktör

50% 52%52%

50% 50%48%

49%7,14

8

Manufacturing coverage

ratio

TürkTraktör covers 71% of the total production in Turkey where 64,342 tractors were manufac-tured in 2014.

Export coverage ratio

TürkTraktör solely covers 90% of total ex-portation from Turkey where 17,555 tractors exported.

91%SUPPORT TO

MANUFACTURING

71%SUPPORT TO

EXPORT

Performance in 2014 The Agricultural Sector and Tractor Market

68 69


TürkTraktör Selected as the Best in Automotive among R&D Centersregis tered a s an r&d center in 20 09, t ürk tr ak t ör ha s been c arry ing ou t rese arch and

de v elopment proJec t s, W hich are imp ortant for the de v elopment of turkish indus try. hav ing

res truc t ured it s org aniz ation in 2014 t o suit the conditions of the day, the compan y ha s

been Working, W ith it s te a m consis ting of 120 people, t oWards achie v ing it s innovation and

technolog y de v elopment targe t s.

M A KING I T S M A RK w I T H I T S

R& D PROjEC T S CON V ERT ED

IN TO PAT EN T S, A S OF T HE END

OF 2014, T üRK T R A K TöR H A S

A P ORT FOLIO COMPRISING

106 PAT EN T S, 8 INDUS T RIA L

DESIGNS, 33 T R A DEM A RK S

And27inTERnETdOmAin

N A MES. IN T HE 3RD PRI VAT E

SEC TOR R&D CEN T ER S SUMMI T

ORG A NIzED BY T HE MINIS T RY

OF SCIENCE, INDUS T RY A ND

T ECHNOLOG Y, T üRK T R A K TöR

wON T HE FIR S T PRIzE IN

T HE AU TOMOT I V E SEC TOR

A MONGS T M A N Y N AT ION A L

R& D CEN T ER S.

IN 2014, TürkTraktör’s R&D Center maintained its high tempo of investments and expanded its staff. The staff increased from 55 persons, includ-ing the support personnel, in 2009 to 120 in 2014.

At TürkTraktör, R&D employees are encour-aged to attend master’s and doctorate programs. The number of employees who have doctorate and master’s degrees rose from 15 in the previous year to 26 in 2014. Today there are 22 graduate students and 4 doctorate students working at the R&D center. Particular attention is paid to mak-ing sure that master’s and doctorate programs are in line with the projects of the Company through visits to the lecturers of employees starting educa-tion programs.

Making its mark with its R&D projects convert-ed into patents, TürkTraktör won the first prize in automotive sector in the 3rd Private Sector R&D Centers Summit organized by the Ministry of Science, Industry and Technology, amongst many national R&D centers. Many patent applications are made each year as a result of the importance given to R&D. As a result of patent work started in 2006, the Company has achieved a portfolio com-prising 106 patents, 8 industrial designs, 33 trade-marks and 27 internet domain names. Patents are acquired not only for the products manufactured but also for any equipment developed to facili-tate the work done on the assembly line. Frequent meetings are held with blue collar employees to hear their recommendations and to reward those whose patent applications and recommendations have been adopted ◼

“We took many first in the sector thanks to our R&D centre’’

“The R&D Centre of TürkTraktör is the first in

Turkish market. Having successful team, the R&D

centre has undertaking significant designs since

its establishment, has designing new products and

developing the current ones. The tractors designed

by TürkTraktör that is becoming one of the most

important engineering centres worldwide, are

being sold to all global markets like America, Japan,

Europe, Middle East and Africa.”

ALI EL İDRISSIAssistant General Manager /Product and R&D

EMPHASIS WILL BE PLACED ON INNOVATIONThe R&D Center, an institution which will em-phasize innovation, was established in 2014. In view of the conditions of the 21st century created by international trade and globalization, the most essential way of achieving international competi-tive power depends on a nation’s capacity to create technology and innovation. Countries or compa-nies which raise their capacity for technological innovation achieve significant international com-petitive advantage as well as faster production and increased incomes. In this connection, one of the prerequisites for gaining international com-petitive power for the manufacturing industry in the coming years will depend on the capacity to make technological innovation. If Turkey fails to change its production structure rapidly and to re-construct it on the foundation of high value- add-ed industries based on advanced technologies, it will not have the chance to catch up with the de-veloped countries. A New Technologies Research Department that will carry out basic research activities, monitor only new technologies, con-duct research and develop projects based on such technologies has been established under the aegis of the newly established organization.

The initial fruits of this restructure have begun to be received, and research projects incorporating innovation were initiated in 10 out of hundreds of project ideas. Looking from a very broad perspec-tive, this department works hard to make use of all internal and external resources. Universities, technology transfer offices, R&D institutions, in-ventors, customers and employees can be counted among such resources ◼

Performance in 2014 r&D

70 71


WORK ON PATENTS ARE IN FULL FLOWRegarding Intellectual Property Rights, improvements to the process are continuing at full speed. Being one of the leading organizations in this field in Turkey, TürkTraktör was ranked the 9th organization in Turkey in patent appli-cations in 2014.

One of the primary targets of TürkTraktör is to give due emphasis to innovation and research projects and to acquire patents for inventions in order to protect intellectual prop-erty rights and increase their total value. In line with this vision, in 2015 licensing work is planned to be carried out, using such means as local and foreign companies, the Inter-net and the Turkish Patent Institute.

Patent applications (including industrial design patents)

total number of patents annual number of patents

128

2520

17

4

18

1412

2009

2009

2012

2012

2014

2014

2008

2008

2011

2011

2010

2010

2013

2013

30

44

62 66

83

103

TürkTraktör distinguishes itself from its competitors to a significant extent on account of the level of competency it has attained in the field of R&D. As a result of knowledge ac-cumulated in this field, TürkTraktör was adopted by CNHI as the R&D Center in 1999 and undertook new assignments in the CNHI international manufacturing network. As a re-sult of such projects, which are very important also for Turk-ish industry, TürkTraktör was registered in 2009 as an R&D Center by the Ministry of Science, Industry and Technology, in accordance with Law No. 5746 on the Support of Research and Development Activities ◼

R&D Department

number of employees number of employees having doctorate and master’s degrees

12

66

17

77

26

90

40

104

120

49

5

54

8

60

Number of projects

total number of projectsnumber of projects conducted during the year number of completed projects

67

83

20

11

33

13

3

34

11

6

44

15

6

55

21

6

62

21

6 9

27

2009 2012 20142008 20112010 2013

Performance in 2014 r&D

72 73

TürkTraktör, 2014 Annual ReportSustainability Occupational Health and Safety

AT TürkTraktör, which has always cher-ished the goal of creating a healthy and safe working environment, work on occu-pational health and safety is progressing in tandem with work on World Class Man-ufacturing Operations and continuing with the Integrated Management System certification, which also incorporates the OHSAS 18001:2007 Occupational health and Safety Management System.

As a result of the independent inspec-tions carried out by TÜV Rheinland at both the Ankara and Erenler factories in July 2014, TürkTraktör has been certified as fulfilling all the requirements of the system in full without any deficiency ◼

ON-THE-JOB OCCUPATIONAL HEALTH AND SAFETY TALKS SUCCESSFULLY CONTINUETürkTraktör prioritizes the philosophy of prevention as the foundation of its ap-proach to occupational health and safety, and has set itself the goal of implementing this approach. With the responsibility on creating and disseminating a culture of occupational health and safety among the employees, the Company has increased the hours of training per person by 6.5 hours annually with the practice of “On-the-Job Occupational Health and Safety Talks” and has succeeded in making behavioral changes among the employees, with the full support of the senior management.

Safety Comes First!

SER IOUS

IMP ROV EMEN T S SEEN

IN T HE OCCUPAT ION A L

HE A LT H A ND SA FE T Y

P ER FOR M A NCE

INDIC AT OR S OF

T üR K T R A K T öR ,

w HICH A IMS T O

CR E AT E A HE A LT H Y

A ND SA FE w OR KING

EN V IRONMEN T, A R E

T HE GR E AT E S T P ROOF

T H AT I T IS MOV ING

CLOSER , S T EP -B Y-

S T EP T O I T S GOA L OF

“zERO OCCUPAT ION A L

ACCIDEN T S”.

In order to cement these changes, dramas, competitions and campaigns on the theme of Occupational Health and Safety are organized, with rewards, throughout the year ◼

THE THEME “SAFETY STARTS FROM CHILDHOOD” RECEIVED GREAT INTERESTThe theme of “Safety Starts from Child-hood”, used in the course of creating the Occupational Health and Safety culture, has been well established thanks to exten-sive participation of the employees and their children. The project became one of the nominees for “Best Practice” in the sector, under which all the factories under the CNHI were assessed.

Furthermore, the TürkTraktör Oc-cupational Health and Safety Commit-tee, which meets regularly every month attended by representatives of all Türk-Traktör manufacturing and support de-partments is the most important indi-cator of the care and emphasis placed by TürkTraktör on Occupational Health and Safety.

Serious improvements seen in the oc-cupational health and safety performance indicators of TürkTraktör upon introduc-tion of the World Class Manufacturing Operations in 2009 are the greatest proof that it is moving closer, step-by-step to its goal of “Zero Occupational Accidents” ◼

The Integrated Management

System Policy:

As its main philosophy,

TürkTraktör has embraced the

principles of management and

continuous improvement of

Quality, Customer Complaints

Management, Occupational

Health and Safety, Environmental

and Energy-Efficiency processes

and the inclusion of energy

efficiency in all process design and

purchases.

In order to ensure this,

TürkTraktör commits itself to

• Taking customer expectations

into consideration in its designs,

• Ensuring unconditional customer

satisfaction,

• Achieving the goals of high-

quality, on-time production,

energy efficiency and meeting our

cost and profit targets with the

full participation and support of

all employees,

• Abiding by all statutory

regulations and obligations

concerning quality and to

providing all necessary resources

to ensure occupational health and

safety, conserve the environment

and energy, and employ new

technologies in our fields of

operation,

• Creating a working environment

for all employees, visitors, sub-

contractors and trainees where

occupational accidents and work-

related illnesses are prevented,

the environment is protected and

awareness of energy efficiency is

created,

• Conducting work on cultivating

the awareness of our employees,

service shops, suppliers,

dealers and end customers and

conducting training aimed at

instilling sensitivity and creating a

common culture,

• Identifying health and safety

hazards and environmental

impacts in the working

environment, systematically

taking the necessary measures to

reduce such risks, and curbing the

emission of greenhouse gases.

Quality is One of TürkTraktör’s Most Fundamental Valuest ürk tr ak t ör is commit ted t o ensuring qualit y and continuous

improv ement through it s integr ated m anagement s ys tem p olic y,

commitment t o cus t omer satisfac tion, occupational he alth and

safe t y pr ac tices, effort s t o minimize har m t o the en v ironment

and reduce emissions of greenhouse g a ses, t oge ther W ith energ y-

efficienc y pr ac tices.


IS T HE FIR S T

EN T ER P R ISE

IN T UR K E Y

w HICH H A S GO T

B O T H T HE ISO

50 0 01 ENERG Y

M A N AGEMEN T

S Y S T EM A ND

ISO 14 06 4

GR EENHOUSE

G A SE S

R EDUC T ION A ND

V ER IFIC AT ION

S TA NDA R DS

CERT IFIC AT E S.

HAVING embraced quality as a fundamental principle, TürkTraktör measures, monitors and continuously improves all of its processes. Guided by the ISO 9001, the Company has demonstrated the pri-ority it gives to the environment, occupational safety and energy efficiency, by going on to obtain the OHSAS 18001:2007 Occupa-tional Safety Management System and ISO 1401:2004 Environ-mental Management System standards.

Having gathered the requirements for all standards under a common denominator for the purpose of implementing all these management systems more efficiently, TürkTraktör underwent a comprehensive external audit and confirmed the full integration of these systems in 2010. Thanks to this integration, the document controls, internal audits, management review meetings and cor-rective/preventive actions required to meet the necessary stand-ards are carried out more efficiently.

Monitoring audits were successfully completed in July 2014, and as a result, the integrated management system certificate was successfully maintained. In addition to the Integrated Manage-ment System, TürkTraktör has also achieved to get the ISO 27001 Information Security Management System and had ISO 10002 Customer Complaints Management System Standards first in its sector as well. In addition, TürkTraktör became the first enter-prise in Turkey by having both the ISO 50001 Energy Manage-ment System and had ISO 14064 Green House Gases Reduction and Verification Standards.

TürkTraktör has determined its Integrated Management Sys-tem Policy and communicated this policy to all employees. The policy commits the Company to the allocation of all necessary re-sources to ensure quality and continuous improvement, customer satisfaction, occupational health and safety, the minimization of harm to the environment, reduction of greenhouse gas emissions and the efficient use of energy. TürkTraktör has made this com-mitment permanent and demands the participation of all employ-ees in ensuring it is met ◼

Occupational Health and Safety Indicators

accident weight ratio

(g)= (∑ lost work days / ∑ Working hours)*1,000

accident frequency rate

(f)= (∑ occupational accident / ∑ Working hours)* 1,000,000

2008 2009 2010 2011 2012 2013 2014

0.060

0.052 0.0540.047

0.044

0.028 0.027

11.92

5.15 4.924.65

3.363.10

2.55

Quality

74 75


IN line with the great importance placed on environmental sus-tainability and activities aimed at minimizing the environmen-tal impacts which may arise in the course of its operations, TürkTraktör organizes train-ing activities and competitions among its employees with the purpose of creating awareness of environmental protection issues. The main practices carried out by the Company in the field of environmental sustainability are as follows: • Environmental audits under the Integrated Management Sys-tem have recently been success-fully completed at the Ankara and Erenler Plants.• The Integrated Management System is externally audited by TÜV Rheinland.• In line with its commitment to passing the agricultural environ-ment on to coming generations and to protecting the life cycle, TürkTraktör has initiated work on its “carbon footprint”, thus taking an important step in the fight against global warming. In July 2014, assessment and report-ing under the ISO 14064 green-house emissions and removals at the organizational level was car-ried out. The assessments, tak-ing 2012 as the base year were approved by BSI. Simultaneous ISO 50001 Energy Management

We Keep Working Toward Environmental Sustainability!

Working under the philosoph y of achie v ing sus tainable groW th W hile

continuously cre ating value, t ürk tr ak t ör ha s been monit oring the

en v ironmental impac t of it s ac ti v ities through the use of national and

international en v ironmental m anagement s ys tems.

IN COMMENCING

w OR K ON

I T S “C A R B ON

FOO T P R IN T ”,


H A S TA K EN A N

IMP ORTA N T S T EP

IN T HE FIGH T

AG A INS T GLOB A L

wA R MING.

TÜRKTRAKTÖR, shapes its activi-ties in energy management with an eye both to economic produc-tivity and environmental prior-ities. The primary projects car-ried out by the Company in the field of energy management in 2014 were as follows:

THE PROJECT TO REPLACE OLD TYPE ELECTRIC ENGINESToday, electric engines are gener-ally manufactured and assessed in three basic efficiency classes; which are:• IE 1: Standard Efficiency• IE 2: High Efficiency• IE 3: Premium Efficiency

Although the initial purchase cost of IE3 engines is higher than IE1 and IE2 engines, since the electricity consumption of IE3 electronic engines is lower, it has been seen that IE3 engines become less costly over time, de-pending on use. In this connec-tion, old type electric engines identified across the factory were replaced with efficient ones (IE3) and savings of approximately 40% were achieved ◼

THE PROJECT TO REPLACE OLD TYPE LIGHTING FIXTURES WITH LEDIn conventional lighting sources, most of the energy is converted into heat, while the ratio of this conversion is much lower in LED

Savings Are Possible with Correct Energy Management!

IN 2014, T ÜRK TR A K T ÖR ACHIE V ED CONSIDER A BLE

SAV INGS IN A NUMBER OF A RE A S BY ME A NS OF THE

ENERGY M A N AGEMENT PROJEC T S C A RRIED OU T.

IN 2014, OLD T Y P E ELEC T R IC ENGINE S

w ER E R EP L ACED w I T H EFFICIEN T ONE S

( IE3) A ND SAV INGS OF A P P ROX IM AT ELY

40%wEREAChiEvEd.

IN 2014, OLD T Y P E LIGH T ING

FI X T UR E S ACROSS T HE FAC T ORY

w ER E R EP L ACED w I T H LED

OnESAndSAvinGSOf11%in

CONSUMP T ION OF P Ow ER FOR

LIGH T ING w ER E ACHIE V ED.

System audits were successfully completed.• At the manufacturing facil-ities in Ankara, environmental risk analyses were carried out at 8,759 points in 12 departments under seven risk types, and re-ports were sent to those depart-ments, asking to prepare actions for improvement.• Environmental training cours-es and competitions involving waste were held under the aegis of the awareness raising work be-ing carried out to ensure separate collection of wastes at-source.

The Erenler Plant supports environmentally-friendly manu-facturing with its “green build-ing” concept by using sunlight at the maximum level combined with lower energy and water consumption. The Plant has been awarded the LEED Gold Certif-icate which is presented by the U.S. Green Building Council to enterprises which support envi-ronmentally-friendly construc-tion ◼

fixtures. This means the same level of lighting with lower en-ergy consumption. LED fixtures have advantages over conven-tional fixtures such as lower en-ergy consumption, longer life, smaller size, rapid switching, high durability, low maintenance requirements and reliability. In 2014, old type lighting fixtures across the factory were replaced with LED fixtures and, as a re-sult, savings of 11% in energy consumption from lighting were achieved ◼

APPLICATION OF PID (PROPORTIONAL-INTEGRAL-DERIVATIVE) TO FURNACESPID is a general control cycle feedback mechanism used in common industrial control sys-tems. In furnaces, the temper-ature and processing time re-quired for the processing of each product is determined. In fur-naces where a single temperature and processing time are used, the system is operated at maximum temperature.

After the application of PID, the temperature and processing time values for all products have been determined and defined in the system. In this way, savings of 17% from electricity consump-tion per product were achieved ◼

Sustainability Environment Energy Efficiency

76 77


TÜRKTRAKTÖR, places great importance on carrying out social responsibility and sponsorship activities that con-tribute to the country and community in many areas, mainly in those areas related to its own sector. In these social responsibility projects, apart from the Company’s financial contributions, em-phasis is placed on voluntary employee participation. The families and friends of employees are also approached with a view to raising their awareness and encouraging their participation in these social responsibility projects. Through social responsibility projects conducted in in the field of education, a contribution to youth development is made while also raising awareness of social responsibility ◼

TÜRKTRAKTÖR AGRICULTURAL MACHINERY LABSIn line with the collaborative project developed from the school-enterprise matching model established under the aegis of the Vocational Education: A Crucial Matter for the Nation Pro-ject being carried out by Koç Hold-ing in cooperation with the Ministry of National Education and the Vehbi Koç Foundation, “TürkTraktör Agri-cultural Machinery Labs” have been established at Gazi Technical and In-

In the Midst of Life with Projects That Add Value to the Community

t ürk tr ak t ör supp ort s the goal of sus tainabilit y W ith

s ys tem atic and long-running social resp onsibilit y proJec t s

W hich add value t o the communit y. these proJec t s, in W hich the

employ ees take part voluntarily, offer signific ant supp ort,

especially t o children and you th, in the field of educ ation.

UN T IL T ODAY, T R A INING

H A S BEEN GI V EN T O 24

T E ACHER S, 142 S T UDEN T S

And931fARmERS,

IN AGR ICULT UR A L

M ACHINERY L A BS

E S TA BLISHED IN FOUR

P ROV INCE S.

dustrial Vocational High School in Ankara, Gökhöyük Agricultural Vo-cational High School in Amasya, GAP Agricultural Vocational High School in Şanlıurfa and Osmangazi Agricultural Technical and Agricultural Vocational High School in Bursa.

The purpose of these labs, intro-duced to support education and occu-pational development, is to raise the quality of vocational education related to the use of agricultural machinery and to contribute to satisfying the de-mand in the sector for well-qualified and trained personnel. The first of their kind in the sector, the labs, in collabo-ration with the Ministry of Food, Ag-riculture and Livestock, also serve the farmers by raising awareness concern-ing the safe use of agricultural machin-ery and equipment.

In 2012, operating from the under-standing that a lack of occupational skills plays an important role in gener-ating unemployment in Turkey, a total of 24 teachers, 142 students and 931 farmers have so far received training in agricultural machinery labs estab-lished in four provinces. In 2014, the 3rd of the work books written for stu-dents receiving training at the Türk-Traktör Agricultural Machinery Labs was published. Students at the Agri-

cultural Machinery Labs in Ankara, Amasya and Bursa passed their gradu-ation exams. Successful students were awarded certificates. Students of the TürkTraktör Agricultural Machinery Labs in Ankara, Amasya, Bursa and Şanlıurfa visited TürkTraktör and re-ceived two-day training.

One student of the TürkTraktör Ag-ricultural Machinery Lab at the Gazi Industrial Vocational High School in Ankara, two students of the lab at the Gökhöyük Agricultural Vocational High School in Amasya and one student from each of the Labs at the Agricultural High Schools in Bursa and Şanlıurfa have started their careers at TürkTraktör ◼

ENGINES AND EQUIPMENT WERE DONATED TO 8 SCHOOLSIn 2014, lots of engines, gearboxes, transmissions and testers were donated to eight schools in support of the educa-tion of vocational high school students receiving technical education ◼

TWO STUDENTS WERE GIVEN 5-YEAR UNIVERSITY SCHOLARSHIPSAn analysis of the university entrance exam results reveals that a significant majority of the candidates with superi-or success consists of underprivileged students. Koç University launched the

Anatolian scholarship program in 2011 in order to provide the best education-al means to those who represent the brilliant minds of the country, despite their lack of financial resources, and to make greater contributions to science through these students. TürkTraktör continues to financially support two successful but underprivileged stu-dents over five years as they pursue their educational goals under the roof of Koç University, in accordance with the protocol signed with Koç Universi-ty ◼

2,851 PEOPLE HAVE RECEIVED TRAINING ON THE “CORRECT TREATMENT OF THE DISABLED”According to the data released by the State Planning Organization and TÜRKSTAT, 12.29% of the population of Turkey is disabled. This rate corre-sponds to 8,431,937 individuals as per the last census. One of the most impor-tant reasons for the fact that we don’t come across many disabled people on the streets in our daily life is that it is impossible for the disabled to go out without the assistance of another per-son in most cases. For the purpose of creating awareness about the situation of the disabled, a number of activities, such as; social responsibility projects,

awareness and training in issues con-cerning disability have been carried out at TürkTraktör, as in all other companies of the Koç Group, for the last 2 years under the slogan of “For My Country: Barrier Free Life”. Türk-Traktör delivered training on the Cor-rect Treatment of the Disabled to 2,851 people via its volunteer instructors.

In addition, under the aegis of the “For My Country: Barrier Free Life” project, a Special Educational Class-room designed to facilitate the edu-cational life of the disabled was intro-duced into service at the Sincan Özkent Akbilek Elementary School with the contributions of TürkTraktör ◼

TÜRKTRAKTÖR SPONSORED THE ‘READ AND IMAGINE’ PROJECTTürkTraktör sponsored the ‘READ and IMAGINE’ project launched by the Educational Volunteers Foundation of Turkey (TEGV)), with the goal of en-couraging imagination and the habit of reading in children. Under the project, TEGV conducted reading activities at shopping centers ◼

01 The Read and Imagine project

was sponsored.

02 Training specialists of

TürkTraktör met with the

Agricultural Machinery Labs’

students.01

02

Sustainability Corporate Social Responsibility

78 79


HAVING operated since 1954 with the vi-sion of being the company that drives the modern agriculture, TürkTraktör has built its human resources philoso-phy upon the saying of Vehbi Koç “Our most important asset is our human re-sources” ◼

TALENT MANAGEMENT FOR THE PURPOSE OF CREATING AWARENESSWorking together with universities and vocational high schools, the TürkTrak-tör Human Resources Department of-fers job opportunities to students and prepares them for working life.

A protocol has been signed with the Ministry of National Education (MEB) and the Ministry of Agriculture un-der the aegis of the Vocational Educa-tion: A Crucial Matter for the Nation (MLMM) Project, which is being car-ried out via the collaboration of Koç Holding and MEB. Under this project, TürkTraktör Agricultural Machin-ery Training Labs established in four provinces (Gazi Technical and Indus-trial Vocational High School in Anka-ra, Gökhöyük Agricultural Vocational High School in Amasya, Agricultural Technical and Agricultural Vocational School in Bursa and GAP Agricultural

“Our Most Important Asset is Our People”

t ürk tr ak t ör m akes a difference W ith it s

hum an resources ac ti v ities by continuously

in v es ting in it s employ ees under the

philosoph y of “our mos t imp ortant a sse t is

our people”.

Vocational High School in Şanlıurfa), aim to raise the importance given to vocational education at the junior high-school level, along with the quality of the education given, to build up quali-fied manpower by means of people with occupational knowledge and experi-ence, and to promote cooperation be-tween the private sector and schools ◼

SHINING STARS ARE PREPARED FOR THE FUTUREThe basic aim of the ‘Shining Stars’ pro-gram, as one of the practices support-ing the Talent Management process, is to nominate at least one substitute for each executive position within the Company and to identify those individ-uals with good potential for such posi-tions in a more objective way.

Under this program, the talent pool at TürkTraktör, referred to as ‘Shining Stars’, is given direction through HR workshops and HR Planning Meetings held regularly and transparently with-in the Company every year. Through this process, employee career plans are tracked, and short, medium and long term substitution plans are reviewed annually, so that the Human Resources Strategic Plan is kept continuously up-dated.

Another goal of the Shining Stars process, introduced with the goal of keeping the Human Resources Stra-tegic Plan alive, is to prepare the em-ployees designated as substitutes for the position immediately above them, starting with the white collar level, and to make those who have been included in the Shining Stars process more com-petent and loyal to TürkTraktör. Devel-opment plans are established through one-to-one interviews with those per-sons included in the respective process and special educational opportunities are offered to them ◼

EMPLOYEE LOYALTY AND SATISFACTION ARE MEASUREDTürkTraktör conducts surveys to measure employee loyalty and satisfac-tion and implement improvement ac-tivities in accordance with the results of these surveys.

The “Mark of Excellence” ceremony is held every year with the purpose of sharing employee accomplishments and performance in the course of any activity bringing added value, of appre-ciating successful employees and en-couraging the others ◼

WINNER OF THE RESPECT FOR HUMANS AWARD FOR THE SECOND TIME! By replying to more than 99% of over 30,000 job applications within a period of less than 12 days, TürkTraktör, for the second time won the Respect for Humans Award, which is traditionally awarded every year by Kariyer.net with the aim of highlighting diligent work in the field of human resources and of sharing this with the public.

GREAT INTERESTFROM UNIVERSITY STUDENTSOn the occasion of the 10th Meeting with the Sector and Career Days Event, TürkTraktör came together with students from the Ankara University Agricultural Faculty’s Agricultural Machinery Department, of which TürkTraktör is the main sponsor.

In addition, by meeting students from the Middle East Technical University Industrial Engineering Department throughout the year, TürkTraktör was able to inform students about its activities through its company introduction, HR processes and WCM basic presentation.

“We want to be together for long period of time with our customers and also our employees”

“Employing the right person for the

right position is important but you shall

properly schedule the future carrier of the

people. We are developing our whole team

from sales to the engineer who works at

R&D to design the tractors, by considering

the fact that they shall understand the

market demands and needs.”

HALUK GÜMÜŞDERELİOğLU

Human Resources Director

Sustainability Human Resources

81


80

age distribution

40-54 aGeS

15%25-29 AGES

35%

aboVe 54 aGeS

0.1%

below 25 aGeS

18%

30-39 AGES

32%10% 4-5 YEARS

0-1 YEA

R 39%

14% 6-9 YEA

RS

13% 2-3 YEARS

10+ YEARS 24%

18% 2-3 y

ea

rS

10+ ye

ar

S 16%

0-1 year 30%

5% 6-

9 yearS

31% 4-5 yearS

InDuSTrIalhIGh School 67%

1% e

le

Me

nT

ar

ySc

ho

ol

2% M

IDD

le Sch

oo

l

0.3% M

IDDle Scho

ol

7% h

IGh Sch

ool

21% aSSocIaTe

2% G

ra

Du

aTe

8% aSSocIaTe

7% InDuSTrIal h

IGh Sch

ool2%

hIG

h Sc

ho

ol

0.5% D

oc

To

ra

l

0.2% a

SSoc

IaT

eP

ro

feSSo

r

0.2% e

leM

en

Ta

ry

Sch

oo

l

15%

PoST GraDuaTe

0.04% P

oST GraDuaTe

GraDuaTe 66%

White collar employees

White collar employees

education

seniority

blue collar employees

blue collar employees Assistant General Manager / Product and

r&D AssistantGeneralManager / Production

Assistant General Manager / Purchasing

cfo Assistant General Manager /

Sales

Assistant GeneralManager /Marketing

Assistant General Manager / Quality

CEO

Supply Chain Director

Human Resources Director

After Sales Director

Construction Equipment Director

Organization Chart

HumanResources

Sustainability Human Resources

31 ARALIK 2014 TARİHİ İTİBARİYLE FİNANSAL DURUM TABLOSU(Tutarlar aksi belirtilmedikçe Türk Lirası (“TL”) olarak ifade edilmiştir.)

84 85


RISK MANAGEMENT AND THE ACTIVITIES OF RISK ASSESSMENT COMMITTEE

RISK MANAGEMENTRisk management is implemented under the policies that were approved by the Company’s Board of Directors.

Internal and external factors shall be taken into consider-ation during risk identification studies and be located under the following categories:operational risk: Risks resulting in direct or indirect loss due to insufficient or problematic work processes, employees, systems or external factors. strategic risk: Risks that cause a threat for the corporations mid and long term position, profitability and mission in the sector. financial risk: Risks that arise from the financial positions and choices against changes on the economic conditions.

a) market risk

foreign currency riskThe Company is exposed to foreign exchange risks resulting from the foreign currency denominated commercial activ-ities with the foreign companies and loans obtained from banks. Currency risk arises due to foreign currency denomi-nated recorded and prospective transactions resulting as as-sets and liabilities. These risks are monitored regularly and limited by analyses of the foreign currency position.

b) credit riskFinancial assets are in hand carrying the risk of the inability of fulfilling the requirements of the agreements by the coun-ter parties. The Company management manages these risks by limiting the average risk to any individual counterparty, by obtaining guarantees where necessary. The Company lim-its these risks that may arise from its dealers, by restricting the credit limits determined for the dealers according to the amount of the guarantees received, by updating the guaran-tee amounts regularly and by receiving the pledge of own-ership of the tractors sold. Credit limits are regularly moni-tored by the Company and the customers’ credit quality are regularly evaluated by considering the customers’ financial position, past experiences and other factors. Trade receiva-bles are evaluated by the management of the Company de-pending on their past experiences and current economic conditions and are presented in financial statements net of provision for doubtful receivables.

c) liquidity riskLiquidity risk is managed by mainintaining cash and mar-ketable securities, the availability of funding through an ad-equate amount of committed credit lines and the ability to close out market positions.

Funding risk of the current and future liabilities is man-aged by providing sustainability of the access to sufficient high quality creditors and the sustainability of the sufficient cash flows obtained from operating activities. The Company management, in order to ensure continuous liquidity, close-ly follows up the timely collection of receivables, allocates high intensity focus to prevent any financial burden sourc-ing from late collections and determines cash and non-cash credit limits to be activated in case of need by the Company.

reporting risks: Risks that threaten the being of data that affect the corporation’s financial tables, the correctness, co-herence recording and confidentiality are known as report-ing risks. information technology risks: The risks that are exposed in terms of management, safety, confidentiality and coherence systems in which the work and data of the applications used within the corporation are recorded. legal and reputation risks: Risks that form with the corpo-ration breaching the laws that they are supposed to abide by and not fulfilling their legal responsibilities. information safety risks: Risks that threaten the confiden-tiality, coherence and accessibility of the information in the corporation. business continuity risks: The risk of operations, the main practice of the corporation, being cut.

d) climate riskChanges on the climatic conditions are another risk factor for the Company. Fluctuations in the agricultural sector due to the climatic conditions, impacts the sales of the Company. Since the main customer of the Company is the farmers; cli-matic conditions that is the important factor for shaping the agricultural sector, is different risk factor for the Company.

e) market riskUntil 2008, the competition continued between 2 brands but now current situation is getting harder with the addition of new brands every day. The market penetration target is “High Equipment – Low Price” especially for the importers. The new importers, especially India and China are entering the market with “Low Quality – Low Price” strategy. Not-withstanding, the local tractor manufacturers are increasing their market share with “Low Quality – Low Price” strategy implementing on the lower segment that is sensitive to the price.

capital risk managementThe Company’s objectives when managing capital are to safe-guard the Company’s ability to continue as a going concern

in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital struc-ture to reduce the cost of capital.

The Company monitors capital on the basis of the net fi-nancial debt/ shareholder’s equity ratio. Net financial debt calculated as total financial liabilities (including short and long term bank borrowings) less cash and cash equivalents. This ratio is calculated as net financial debt divided by total shareholders’ equity.

The determined risks will be detailed and recorded us-ing the “TTF Risk Management Follow up Table” will be re-viewed and updated once every 3 months 4 times a year by the officials. Every month, internal reporting shall be made to the responsible persons by the Internal Audit Department after evaluating the summary table of risks.

Risks shall be managed according to the classification be-low:• Low Risks (L:Low): shall be followed at “Supervisor” level.• Moderate Risks (M:Moderate): shall be followed at “Man-ager” level. • High Risks (H:High): require notification and management at “General Manager” and “Assistant General Manager” lev-el.• Extreme Risks (E:Extreme): shall be submitted by the Risk Management Committee to the consideration of the Board. Continuous follow up is required.

ACTIVITIES OF THE RISK ASSESSMENT COMMITTEEThe Risk Assessment Committee established in our compa-ny’s Board of Directors meeting dated 09.07.2012 for the purpose of complying with the 378th article of Turkish Commercial Code numbered 6102, Capital Markets Board Communique on Corporate Governance and ensuring the ef-fective operation of the committees established under board of directors, and making studies to early recognize the risks that may jeopardize the company’s existence, development and continuity; implementing necessary precautions con-cerning to the recognized risks and making studies to man-age the risks. Mr. Andreas Christian Schröter, independent board member, engages on the chairmanship of the commit-tee. Other members of the committee are Mr. Temel Kamil Atay and Mr. Stefano Pampalone who are the board members as well.

The committee convened 6 times in 2016. The commit-tee evaluates Türk Traktör ve Ziraat Makineleri A.Ş. Risk Management system and risk reporting principles, reviews Risk Reports prepared periodically in line with this scope, presents opinions concerning the necessary precautions that need to be taken for the purposes that are not complying with the limits determined at Risk Management System. Report-ing studies and committee evaluations are presented to the information of the Board of Directors.

internal audit system and internal audit The Risk Assessment Committee has been established to give opinions to the board of directors for the purpose of deter-mining and evaluating the strategic, financial, operational

and all kind of risks that may affect the Company, calculating the impact and possibilities, managing these risks in parallel with the company’s risk-taking profile, reporting, ensuring that these risks are taking into consideration by taking deci-sions and accordingly establishing and integrating efficient internal audit systems. The Audit Committee continuously following the operation and efficiency of the system, shar-ing the problems and solutions concerning the internal audit mechanism with the board of directors.

Board of Internal Audit has been established for the pur-pose of executing the company activities and services in ef-ficient, reliable and uninterruptedly way, ensuring integrity, consistency, reliability and safety of the information pro-vided by accounting and financial reporting system. A “Risk Management Committee Report” shall be drafted by Board of Internal Audit at least 6 times a year in order to present Risk Management Committee review. The reports approved by the committee shall be distributed to the BoD and Inde-pendent Auditor. Internal Audit function: • The Board of Directors and Upper Management of the Com-pany make independent examinations that will enable a se-curity for the company’s operations and they provide the ser-vice of giving a detailed report on their examinations.• It fulfills the need of protecting the company’s assets and records.• It enables the security of financial and operational informa-tion and reporting. • It meets the need of increasing the company’s practices’ ef-fectiveness and benefits. • It provides support for meeting the policies set by the Com-pany’s Top Management. • It helps the company gain a transparent operation with con-sciousness of the Company’s high ethical values and respon-sibilities.

AUDIT INFORMATIONIn the year 2014, Türk Traktör ve Ziraat Makineleri A.Ş. was not subjected to private and public audits.

The accounts and financial statements are examined by the Auditing Committee and are audited by the independ-ent audit company, Güney Bağımsız Denetim ve Serbest Mu-hasebeci Mali Müşavirlik Anonim Şirketi (A member firm of Ernst & Young Global Limited) as well. ◼

86 87


CORPORATE GOVERNANCE

CHAPTER 1 – DECLARATION FOR COMPLIANCE WITH CORPORATE GOVERNANCE PRINCIPLESOur Company complies with the Corporate Governance Principles published by Capital Markets Board and makes regulations about issues to be complied with based on devel-oping conditions in line with development of capital mar-kets. The company aims to perform activities required for corporate governance practices as for rights of shareholders, informing public, ensuring transparency and decisions / transactions as regards stakeholders and the Board of Direc-tors. In this sense, our Company oversees and aims to ensure implementation of the above-stated principles based on equal treatment of all stakeholders, responsibility of information and the principles of corporate governance.

Our company completely complies with compulsory prin-ciples stipulated in Communiqué on Corporate Governance numbered II-17.1 which was in force in 2014 and most of

the non-compulsory principles have been kept. Although full-compliance is targeted for non-compulsory principles of Corporate Governance, full-compliance has not been achieved yet due to reasons such as difficulties encountered in relation to implementation of some principles, discussions about compliance with some principles in our country and at international level, non-alignment of some principles with the current structure of the market and the company. There are still some efforts aimed at the principles, which are not implemented, and there is a plan to implement these principles administrative, legal and technical infrastructure activities are completed in order to contribute to effective management of our company. Comprehensive activities car-ried out in our company as regards the principles of corpo-rate governance, the principles, for which compliance has not been achieved yet are described in below table.

t he p r incip l e W hich f ul l comp li a nce h a s no t been achie v ed y e t

r e a son f or no t f ul ly comp ly W it h

a n y conflic t s

of in t er e s t

1.5.2. Minor it y r ights may be def ined in the ar t ic les of associat ion for shareholder s holding less than one t wentieth of the capital of the corporat ion. T he scope of minor it y r ights may be enlarged in the ar t ic les of associat ion.

Despite the fac t that minor it y r ights has not been def ined in the ar t ic les of associat ion for

shareholder s holding less than one t wentieth of the capital , r ights have

been prov ided for the mentioned shareholder s within the scope of

cur rent general legislat ions.

No

3.1.2. Ef fec t ive and rapid compensat ion should be of fered in case the r ights of the stakeholder s that are protec ted under the relevant legislat ion and contrac ts are v iolated. T he corporat ion shall make i t convenient to prov ide the ut il izat ion of the mechanisms such as compensat ion prov ided for the stakeholder s as per the legislat ion. Fur thermore, the corporat ion shall form a polic y on compensat ion towards the corporat ion’s employees and disclose this polic y to public v ia the corporate website.

T here is not any approved compensat ion polic y but the

prepar ing process is st i l l cont inuing.No

4 .3.9. Corporat ion shall determine a target rate prov ided that i t is not less than 25% and a target t ime for member ship of women in the board of direc tor s and form a polic y for this target . T he Board of direc tor s shall annually evaluate the progress in respec t to achiev ing this target .

T he evaluat ion study for determining the target for member ship of women in the board which can be considered as a tool for representing dif ferent

opinions in the board.

No

4 . 4 .7. Member s of the board of direc tor s shall al locate a reasonable t ime for the business of the corporat ion. In cases where the member of the board of direc tor s is a manager or board member in another corporat ion or render s consultanc y ser v ices to another corporat ion, in pr incipal this si tuat ion should not cause a conf lic t of interest and the member shall not hinder his/her dut y in the corporat ion. W ithin this conte x t , ex ternal dut ies that the member conduc ts shall be condit ional on cer tain r ules or become l imited. T he e x ternal dut ies conduc ted by the member of the board of direc tor s and the grounds thereof shall be submit ted for the shareholder s’ information, by dist inguishing either such corporat ion is intragroup or out of the group, together with the agenda i tem regarding elec t ion, at the general assembly meeting in which the elec t ion is discussed.

No such l imitat ion is needed as there is signif icant contr ibut ion f rom

member s to the Board of Direc tor s due to their business e xper ience and

sec tor ial e xper ience.

No

4 .5.5. I t shall be noted that any member of the board of direc tor s shall not have a dut y in more than one commit tee.

Some board member s have dut y in more than one commit tee. But

through those member s commit tees that have related dut ies enable to

have direc t connec t ion and increase collaborat ion possibil i t ies.

No

4 .6.5. Remunerat ions prov ided for member s of the board of direc tor s and execut ives and all other benef its prov ided shall be disclosed v ia the annual repor t to the public . Pr incipally, public disclosure shall be made on the basis of the per sons.

Remunerat ions prov ided for member s of the board of direc tor s and

e xecut ives are disclosed to the public through the f inancial s tatement

footnotes in l ine with general prac t ices.

No


88 89


Distribution of our corporate governance-rating grade by main topics is as follows:

sub -c at egor ie s W eigh t a ssigned gr a de

Shareholder s 0.25 8 4.8 8

Public Disclosure and Transparenc y 0.25 93.12

Stakeholder s 0.15 97.13

Board of Direc tor s 0.35 89.67

t o ta l 1.0 0 9 0. 4 6

Comprehensive activities carried out in our company as regards the principles of corporate governance, the princi-ples, for which compliance has not been achieved yet, and conflicts of interest, if any, related to these issues are de-scribed in below.

In 2014, most important activities in the field of Corpo-rate Governance include activities aimed at compliance with the Capital Markets Law on new regulations about the prin-ciples of corporate governance and with the new legislations prepared based on this Law. all amendments envisaged in the new Turkish Commercial Code and Capital Markets Law were enacted in the articles of association of our Company, besides, the board of directors and the board committees es-tablished in line with the regulations in corporate govern-ance communique. The established committees of the board of directors are being carried out their activities. Remuner-ation policy for the board of directors and senior managers was determined and partners were informed about this policy during the general assembly. Through the general as-sembly information document, our investors were informed about privileged shares to be announced in line with the principles, information about the general assembly such as rights of voting, organizational changes, curriculum vitae for candidates for membership in the board of directors, remu-neration policy for the board of directors and senior manag-ers, reports to be prepared and information to be announced about procedures of the related parties 3 weeks prior to the general assembly. Besides, corporate web site and annual re-port of our Company were reviewed and necessary revisions were made for full-compliance with the principles.

Arrangements concerning the number of independent board member have been stated at the 4.3.4th article of Cor-porate Governance Principles that entered into force through the communique numbered II-17.1 on Corporate Govern-ance. It has also been cited at the 5th item of 5th article that, if the application deemed appropriate by the Capital Markets Board, the criteria determined at the 4.3.4th article concern-ing the number of independent board members will not been implemented for the joint venture companies constitute of two real or legal entities provided that having 51% equally directly or indirectly capital, not having management or au-dit relations amongst each other, sharing the managerial con-trol through the agreement that requires affirmative votes of two parties for the important decisions on the company. Two independent board members will be sufficient for such companies. Our Company’s A group privileged shares at the rate of %37,50 belongs to Koç Holding A.Ş. (Koç Group) and B group privileged shares at the rate of %37,50 belongs to CNH Industrial Osterreich GmbH (“CNHI Group”). Controlling our Company’s management equally between Koç Group and CNHI Group is provided with the articles in Our Company’s Articles of Association.

Pursuant to the article 10 of the Company’s Articles of Association, half of the Board shall be elected from among the nominees of the A Group privileged shareholders and the other half shall be elected from among the nominees of the B Group privileged shareholders. The whole Board is consti-

tuted equally by Koç and CNHI groups without making dis-crimination. As it is mentioned in the article 10 subsection 6 of the Company’s Articles of Association, in case of the ab-sence of affirmative vote of two each board selected by proxy of Koç Group and CNHI Group, it is not possible to take a resolution for an issue in the Board. Therefore, Koç Group and CNHI Group have both controls on our Company.

According to the article 6 of the Communique in question, our Company is accepted as a joint venture and within this context, determining independent board member number as 2 is approved by the CMB on 16.02.2012 with document numbered 5/129.

In the upcoming period, necessary activities will be car-ried out for compliance with the principles by considering developments in the legislation and the related practices.

In this context, SAHA Corporate Governance and Cred-it Rating Services Inc. (SAHA INC.), which is authorized to perform rating activities in Turkey in line with the Corpo-rate Governance Principles published by Capital Markets Board, increased our Company’s corporate governance rating from 90.02 (9.00 over 10) to 90.46 (9.05 over 10) as a result of its analysis in 2014. The new rating and its breakdown is presented below.

The grade (9.05) given by SAHA INC. in the rating activity organized by considering the Corporate Governance Princi-ples shows that our company has significantly achieved com-pliance with the Corporate Governance Principles of Capital Markets Board, that it has implemented necessary policies and measures and that the activities about compliance with the principles of corporate governance will be strengthened and implemented.

Compliance report, which includes components of the Cor-porate Governance Principles (those implemented and those not implemented) for 2014 period in terms of the current management activities based on legal regulations and legisla-tion, is submitted to your information. Besides, it is available in our internet site (www.turktraktor.com.tr).

CHAPTER 2 – SHAREHOLDERS2.1. Investor Relations DepartmentIn our company, the Investor Relations Department affil-iated under Assistant General Management of Financial Affairs is responsible for regulating and ensuring investor relations and public disclosure activities, implementing and following the Corporate Governance Principles, ensuring that employees of the company comply with these principles, representing company’s corporate entity before Ministries, Capital Markets Board, Borsa İstanbul (BİST), Takasbank (Settlement and Custody Bank), Central Registry Agency, independent audit companies and all other related institu-tions and organizations, submitting necessary reports and information to these institutions, making necessary notifi-cations to BİST through Public Disclosure Platform, exten-sion of shareholding rights, carrying out stock transactions, responding to information requests of investors and interme-diary institutions, organizing General Assembly meetings of Partners, organizing meetings of the Board of Directors and Inspection and keeping records thereof, preparing decisions of the Board of Directors and following the approval pro-cess. The Investor Relations Supervisory performs activities such as following and implementing regulations made and to be made in line with the legislation of the Capital Mar-kets Board, establishing relations with shareholders without any discrimination, performing capital increases, keeping records of the shareholders in a sound, safe and updated manner, informing public about the legislation, updating the related parts of the company’s internet site and responding to information requests about the company. The Investor Relations Supervisory responds to information requests of shareholders about the company and plays an active role in protecting and facilitating the use of shareholding rights. Ms. İlkiz Karagüllü who has the Level 3 License of Capital Mar-kets Activities and the License of Corporate Governance Rat-ing is working as the authorized manager and Ms. Sıla Akçay is working as specialist in this unit which is under the Fi-nancial Affairs Assistant General Manager, Mr. Ahmet Can-beyli. It is possible to receive information through the e-mail

address, [email protected], or through telephone number: (0312) 233 25 02 and facsimile number: (0312) 233 33 73.

In addition to one-on-one interviews, roadshows and analyst meetings, all kinds of questions from shareholders, analysts and fund managers were answered in written and verbal form during the year. Current and potential inves-tors met with the Investor relations department through 89 investor meetings, 24 conference calls and 5 conference and roadshows participated. Through these meetings, it was ensured that the related people and institutions were in-formed about TürkTraktör and about recent developments. 2 press conferences and 3 analyst meetings were organized through participation of senior directors in order to reveal quarterly/annual financial results. Feedbacks for 76 infor-mation requests coming directly from phone call or e-mail address of the company were provided in a timely manner. Investor presentations were included in our internet site and it was ensured that investors and public were informed in an updated way. Our Company attaches utmost importance to this issue in line with its information policy in terms of individual and corporate investors and ensures updated in-formation flow. The 03.02.2015 dated report that is about the activities carried out by the Investor Relations Department and prepared according to the 11th article 1. Item of the com-munique numbered II-17.1, presented to the information of board members at the meeting dated 04.02.2015.

Material disclosures, financial statements and other in-formation about the Company, which are to be notified to BİST through Public Disclosure Platform, are sent with elec-tronic signature. Mr. Ahmet Canbeyli, Mr. Murat Ünver and Mr. Esat Ozan Berktaş are authorized signatories for notifica-tions to be made through Public Disclosure Platform.

2.2. Use of Information Rights by ShareholdersActivities were immediately initiated to ensure that share-holders make use of their information rights in Türk Traktör and Ziraat Makineleri A.Ş. (the company), which became a public company upon initial public offering of shares to bear-er by Koç Holding Inc. to BİST on 3-4 June 2004, and neces-sary arrangements were made on the current web site of the Company in order to inform investors. To this end, informa-tion envisaged in line with the legislation of capital markets was added and an e-mail address, which is only available for investors, was brought into use.

No discrimination is made for shareholders about use of


90 91


the right to information and inspection and all information except for trade secrets is shared with shareholders. Ques-tions directed to the Investor Relations Supervisory except for confidential information and trade secrets are answered through telephone or in written form upon consultation with the most authorized person about the related issue. As ex-plained in Chapter 3.1 of this report, any and all information and explanations, which could affect shareholding rights, are provided in corporate internet site.

Although right to request a private auditor is not arranged in our Articles of Association as an individual right, each shareholder may request from the general assembly to clar-ify specific incidents through a private audit even if it is not included in the agenda in the event that it is necessary for ensuring use of shareholding rights and that right to infor-mation or inspection is not previously used. To date, none of the shareholders has made such a request. Besides, activities of the Company are regularly inspected by the Independent Auditor elected in the General Assembly.

2.3. General Assembly MeetingsDuring this period, Ordinary General Assembly meeting of Partners was organized on 24.03.2014 in Ankara headquar-ters of Company. Calls for General Assembly were made in Turkish Trade Registry Gazette and shareholders included in Shareholders’ Stock Register were informed about the Gen-eral Assembly in written form and all necessary information was provided in line with the procedures and within legal time limits. The General Assembly was organized in public. All rightful stakeholders and press members were invited to our General Assembly meeting although they do not have any right to speak. During the mentioned general assembly meeting, 5.336.900.000 shares corresponding to a share cap-ital of TL 53.369.000 out of 1.500 shares were represented in person, 4.645.267.100 shares were represented by represent-ative thus 4.645.268.600 shares in total were represented in the meeting which ensured the minimum quorum specified in both the Law and also in the Articles of Association.

Meeting procedure of the General Assembly is arranged in a way that will provide the highest level of participation for shareholders. It is ensured that meeting minutes are always available through written copies or in electronic format.

Invitation to the General Assembly is made by the Board of Directors in accordance with the provisions stipulated in Turkish Commercial Code, Law on Capital Market and Arti-cles of Association for the company. When a decision is taken by the Board of Directors in order to organize the General As-sembly, necessary calls and explanations are made over Pub-lic Disclosure Platform and as of 2013, calls, announcements, participation and voting procedures for general assemblies has been carried out through Electronic General Assembly System of Central Registry Agency.

Financial statements and activity reports are made avail-able in the Headquarters of our company at least 21 days be-fore the General Assembly. Announcements for meetings of the General Assembly are published on the internet site at least 3 weeks prior to the meeting. Following submission of

financial statements to BİST and publication of the Annual Report, any and all information and report to be handled in the agenda of the General Assembly are sent to those request-ing this information through the fastest facility of delivery such as letter, facsimile message or e-mail. Records are kept public in areas, which are easily accessible by shareholders, including electronic media.

In addition to the announcement for meeting of the Gen-eral Assembly, the following issues are available on the inter-net site of the company.a) Total number of shares and voting rights that reflect the structure of partnership for the company and number of shares and voting rights that represent A and B privileged share groups as of the date on which the announcement is made,b) Information about dismissal, replacement or election of board members and justifications thereof as included in the agenda of the meeting for the General Assembly and people to be nominated for board membership,c) In the event that requests are made by shareholders, Cap-ital Markets Board and/or other public institutions and or-ganizations related to the company for inclusion of items in the agenda, information about these requests,d) In the event that amendment of the Articles of Association is included in the agenda, the related decision of the Board of Directors and former provisions and newly-amended provi-sions of the Articles of Association.

Each motion covered by the agenda items of the General Assembly is clearly described under a separate headline. If re-quests are made by shareholders to the Investor Relations Su-pervisory in written form for inclusion of items in the agenda during preparation of the Agenda, these issues are taken into account by the Board of Directors. In addition, in case of the majority of affirmative votes of independent member which is required to get the board resolution does not secure, the issues can be included to the agenda and the General Assem-bly resolution can be taken related to these issues. General Assembly meeting is may be organized in Ankara, in which headquarters of the company is located, or another city to be determined by the Board of Directors in line with our Arti-cles of Association. However, to this day, all general assem-bly meetings have been organized in the headquarters of the company upon preference of the Board of Directors.

It is quite natural that shareholders ask questions and present their views by taking the floor about an issue dur-ing our General Assemblies. Therefore, General Assembly ensures that partners of our company ask questions, present recommendations about items of the agenda and talk about their proposals in line with the related procedures. In the event that these questions are not related to the agenda or if they are too comprehensive to respond immediately, these questions are answered in writing as soon as possible. Within this framework, there is no question asked by the sharehold-ers in the Ordinary General Assembly Meeting on 24 March 2014. All information including Annual Reports, financial statements and independent audit reports, dividend propos-als and agenda of the general assembly, the related informa-

tion and documentation, if any, and form for voting by proxy, current Articles of Association, texts of amendment, if any, material disclosures, distribution of the capital by sharehold-ers and Corporate Governance Compliance Report are pub-lished on the internet site and this information is also availa-ble in electronic format. Open ballot method (through lifting hands) is used for voting items of the agenda during General Assembly meetings.

Board members, who are informed about the related items of the agenda, other related people, authorities, who are re-sponsible for preparation of financial statements, and audi-tors are present in the General Assembly meeting in order to provide necessary information and to respond to questions.

It is possible to have access to all general assembly min-utes and lists of participants by years from the headquarters of the company. Besides, this information is also available through Turkish Trade Registry Gazette in Ankara Trade Registry Office. Files of the General Assembly Meeting Min-utes for the last 5 years can be accessed and reviewed through our internet site.

The General Assembly should provide a pre-approval and should be informed about the activities related to sharehold-ers, who have dominance in management, board members, senior directors which have administrative liability and spouses and relatives of these people up to the second degree to carry out activities that may result in conflict of interest with the company and the affiliated partnerships and/or in case of carrying out an activity that may fall into the field of partnerships’ operation on its or other’s behalf or getting into another partnerships which are operated in the similar business area as unlimited partner; and related to activities in the field of partnerships’ operation done by person on its behalf who are able to reach the company’s information. Peo-ple, who are privileged to have access to the information of the company, inform the board of directors about the activi-ties they carry out in relation to field of activity for the com-pany during the General Assembly.

During the year there was not any situation that can be considered as significant procedures in terms of implement-ing the Corporate Governance Principles like assignment of all or most of the assets of the companies, establishment of real rights on the assets or renting these assets, taking over or hiring an important asset, envisaging privileges or changing scope or subject of the current privileges and dequotation.

The company does not have any written donation and aid policy, but all donation and aid amounts accrued during the period and beneficiaries thereof are submitted to the infor-mation of the partners through a separate agenda item dur-ing the General Assembly meeting. The Ordinary General Assembly held in 2014 is informed about the donation and aid done in 2013 through a separate agenda item and the do-nation limit for 2014 is determined as the amount of 9 Mil-lion TL.

2.4. Voting Rights and Minority RightsEach shareholder is allowed to make use of the voting right in the easiest and the most proper manner. The related arti-

cles of Turkish Commercial Code and Capital Markets Law and regulation are applied in the ordinary and extraordinary meetings of the General Assembly. Shareholders present in the meetings of the General Assembly will cast vote pro-rata to the nominal value of their total shares in the share capi-tal of the Company and there is no privilege for the voting right (Paragraph c, Article 15 of the Articles of Association). Shareholders with privilege A and B group shares are allowed to nominate people for board membership (Paragraph 2, Ar-ticles 10 of the Articles of Association). Voting rights are uti-lized in the General Assembly in line with the arrangements in relation to the type of representation and voting (Para-graphs c and d, Articles 15 of the Articles of Association). The company complies with the regulations of the Capital Mar-kets Board as regards voting by proxy.

There is no controlling shareholder on the basis of recip-rocal shareholding. There are professional directors from the sector and companies of Koç Holding in the current Board of Directors. As there is a case of voluntary implementation in line with the legislation of capital market and controlling shareholders do not deem this arrangement necessary, no arrangement is made in the Articles of Association for the company with regard to representation of minority shares in the management and cumulative voting method. As for this issue, the current provision about the quorum of the General Assembly shall apply (Paragraph h Article 15 of the Articles of Association).

In the Company, using the minority rights is watched over compliance with the CMB and Turkish Commercial Law reg-ulations. Despite the fact that minority rights has not been defined in the articles of association for shareholders hold-ing less than one twentieth of the capital, rights have been provided for the mentioned shareholders within the scope of current general legislations. In 2014, there is not any diatribe or complaint for this issue. All shareholders including minor-ity and foreign shareholders are treated equally.

2.5 Right of DividendThere is no privilege about participation in profits of the com-pany and distribution of dividends. Article 19 of the Articles of Association on “Distribution of Profit” shall apply. Divi-dends are distributed based on long-term strategies, invest-ment and financing policies, profitability of our company and arrangements of Capital Markets Board and distribution of dividends is submitted to the approval of the General Assem-bly and the company complies with the legal time limits. In line with the policy for distribution of dividends, dividends are distributed to all current shares as of the accounting peri-od on an equal basis irrespective of the dates of exclusion and acquisition. This issue is included in the related article of the Articles of Association and as it is a provision for the General Assembly, it is submitted to the information of shareholders. The dividend policy of Company is given below:

Dividend PolicyOur Company distributes dividend in parallel with the pro-visions of Turkish Commercial Code, Capital Markets Board


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regulations, Tax legislations, other related regulations and the related dividend distribution article of the articles of as-sociation. In line with the Corporate Governance Principles, balanced and accurate policy is followed between the benefits of the shareholders and the Company.

In principle, as long as the relevant regulations and finan-cial possibilities be convenient, by taking into consideration of the market expectations, long-term company strategy, in-vestment and financing policies, profitability and cash situ-ation, minimum 60% of net distributable profit that calcu-lated in line with Capital Markets Board provisions, shall be distributed in cash and/or as bonus shares.

It is aiming to distribute dividend within a month follow-ing the General Assembly Meeting at the latest, general as-sembly decides the date of the dividend distribution. General Assembly or if authorized the Board of Directors may decide to pay the dividend in installments in line with Capital Mar-kets Board regulations.

Reference to the articles of association of the company, the board of directors may distribute the dividend in advance only if the board has authorized by the General Assembly and done in parallel with the Capital Markets Board regulations.

Dividends distributed and dividend distribution policies implemented in the last 5 years are included in our Annual Report and web site of our company. The form and time of dividend distribution resolved to distribute are determined by General Assembly after the proposal of Board of Directors.

2.6. Assignment of SharesIn Article 8 of the Articles of Association on “Assignment of Shares”, principles of selling and assigning registered shares for non-public A and B group are stipulated and there are limitations on assignment of shares in accordance with these rules and arrangements. Assignment of public C group shares is regulated by the Capital Market Board.

CHAPTER 3 – PUBLIC DISCLOSURE AND TRANSPARENCY3.1. Corporate Web Site and Its ContentOur Company has an active and up-to-date internet site. This corporate web site is arranged in two languages: Turkish and English. In this internet address, there is comprehensive in-formation about possible requests from our Company. In our internet site, which can be updated based on developments; there is a section for “Investor Relations” that covers mini-mum components envisaged by Capital Markets Board. Im-portant headlines which can be followed through the web site of the company are as follows:• Stock Information and Investor Tools • Share Chart• Dividend History• Capital Increases• Analyst Coverage• Calendar• Corporate Overview and Governance• Management Team• Trade Registration• Articles of Association

• General Assembly Document• Corporate Governance• Disclosure Policy• Dividend Policy• Corporate Governance Adoption Report• Ethical Rules• Corporate Governance Rating Reports• Policy Regarding Disclosure of Material Event• Policy Regarding Protection of Insider Information• Task and Performance Principles of Committees• Committee Reports• Board of Directors Resolutions• Material Disclosures• Financial Results• Independent Audit Company Report• Investor and Analyst Presentation• Annual Report• Financial Statements• Financial Kit• Investor Registration• Investor Feedback• Contact Us• FAQ• News• Links

The related information, which reflects the situation in the last 5 years, is available in our internet site. Our com-pany’s Annual Report may be provided in printed form. Be-sides, our web-based Annual Report may be reviewed from our internet site. The Investor Relations Supervisory is re-sponsible for preparing content for the section of Investor Relations in our internet site, updating information as they change and adding extra information. Necessary responses are provided to shareholders and stakeholders for questions asked through “Contact Us” section of our internet site and information requested through electronic media.

3.2. Annual Report Board of Directors prepares the Annual Report in a detailed manner in order to inform public about activities of the company in a complete and accurate way. All information required through the 2.2 numbered corporate governance principle and its sub clauses are already included to the an-nual report.

Headlines of the company’s activity report are as follows:• Vision and Mission• Evaluation of the Board Chairman• Message of the General Manager• Results of Activities in 2014• Report of the Board of Directors • Corporate Governance and Capital Structure • Products and Equipment • General Overview of 2014 and Social Responsibility Activ-ities and Human Resources• Corporate Social Responsibility• Legal Notices

• Risk Assessment – Internal Control and Audit• Agricultural Sector and Tractor Market • Resumes of the Board of Directors and Senior Directors• Members of the Board of Directors, Board of Inspection and Audit Committee in the related period• Statement of Corporate Governance and Compliance Re-port• Agenda of the General Assembly Meeting• Amendment of the Articles of Association and Agenda Items for the Meeting of Privileged Shareholders • Dividend Distribution Policy – Dividend Distribution Table • Auditor’s Report – Report of the Committee responsible for the audit • Financial Statements and Independent Audit Report• Information about Duties Carried Out by Board Members and Directors out of the Company and Statements about In-dependence of Board Members• Number of Meetings by the Board of Directors in the re-lated year and Status of Participation by Board Members in these meetings• Information about Significant Administrative Sanctions and Penalties on the Company and Board Members due to Practices, which are contrary to the provisions of the legis-lation, if any• Information about Amendments of the Legislation, which could significantly affect activities of the company• Information about Considerable Suits Filed Against the Company and Possible Consequences Thereof

CHAPTER 4 – STAKEHOLDERS 4.1. Information of the Stake-holders

Stakeholders are defined as employees, suppliers, clients and third parties that are directly related to the company. All these stakeholders are informed about issues, which are related to them and arrangements concerning necessary organizations, information meetings and necessary infor-mation activities are made by our company. Employees of the company are informed about any and all developments through intranet, over which corporate communication is established. Corporate governance practices of the company ensure that rights of the stakeholders, which are regulated by the related legislation or which have not been regulated, yet, are kept secure.

Additionally, the Unusual Event Management Procedure prepared by the Internal Audit Department established in Company is submitted to information of all employees by publishing on intranet. The company has already estab-lished the necessary mechanisms to enable the stakeholders to transmit the company’s transactions which are unlawful and unethical directly to Corporate Governance Committee or Audit Committee. According to this procedure, the unu-sual event is defined as “Fraud, Material Losses, Violation of Legislation and Company Procedures to a Significant Extent, Intellectual and Industrial Right Infringements, Misuse of Computer Sources, Insider Trading, Security or Safety Prob-lems and all other cases which may endanger the Company or the employees and which may damage the reputation of the

Company.” The unusual event notifications may arrive at the Internal Audit Department in the ways below:1) Verbal and written statements of employees2) Complaints and notices written on the Company Website3) Complaints and notices written on the Company Website4) Written complaints and notices arriving at Company sen-ior management and employees thereof

4.2. Participation of Stakeholders in ManagementPractices, through which stakeholders can participate in de-velopment activities for administrative issues, present opin-ions and make evaluations about these issues in an active manner, are carried out within the company. There are meet-ings and training programs, which aim to increase quality and efficiency, and through which employees, suppliers and clients make requests, and studies such as “Survey for Evalu-ation and Improvement of Business Life” and these activities are performed in line with the policies of the company.

Besides, customer satisfaction surveys are organized, feedbacks about customer satisfaction are followed within the system and criteria of objectives are redefined. There are call centers, which work on 7/24 basis in order to respond to needs and questions of customers in the best way possible. Besides, stakeholders are encouraged to participate in man-agement through the system aimed at receiving recommen-dations and opinions in customer relations over SMS.

4.3. Human Resources PolicyOur Human Resources mission is to establish and continu-ously improve Human Resources Systems that will make employees happy in line with the objectives of the Company. Our vision is to maintain Human Resources practices that will meet needs and expectations of employees in TürkTrak-tör through an approach of continuous improvement and to make TürkTraktör a preferred company. Criteria for recruit-ment of personnel specified by Directorate of Human Re-sources are written and recruitment process is carried out in line with these criteria. “Working Environment Procedures” have been created in order to ensure that employees work in a fair, comfortable and safe environment, to eliminate losses of working days and labor, to increase efficiency and to en-sure manufacturing and operational safety; “Improvement Planning Procedures” have been created in order to improve knowledge, skills, manners and talents of employees, to plan, organize and record in-house, external, on-the-job and for-eign language training activities so as to increase business efficiency and “Occupational Health and Safety Procedures” have been created in order to ensure that employees comply with health and safety conditions stipulated in Labor Law and the related regulations on Occupational Health and Safe-ty. Implementation of procedures is supported with docu-ments and orders published in parallel with these procedures.

Personnel of the Directorate of Human Resources per-form activities in order to establish relations with employees. Carrying out communication activities within the Company is defined as one of the current responsibilities of the related personnel and terms of reference, division of labor, criteria


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of performance and reward are shared with all employees. Besides, representatives of trade unions take an active part in activities aimed at strengthening communication. Food Committee, Representative of Health and Safety, repre-sentatives of Leave Board and Disciplinary Board, who are assigned through election or appointment, represent employ-ees and strengthen communication in these processes. If em-ployees are participating in these activities, then motivation and efficiency are increased. No complaint was made by em-ployees about discrimination within the year.

Team spirit and sharing are adopted as our most impor-tant values in all our activities. It is believed that it is only possible to work together and to create a nice working envi-ronment through mutual love, respect, positive approach, honesty, hard work and cooperation.

4.4. Rules of Ethics and Social Responsibility“TürkTraktör Ethical Conduct Board” was formed in order to perform activities in relation to Rules of Ethical Conduct and Principles of Implementation stipulated in Personnel Regu-lation. Corporate activities are performed within “Rules of Ethical Conduct and Principles of Implementation”, which are determined in order to protect and develop reputation of the company name and its corporate structure and the re-lated rules have been published in web site of the company and on intranet, through which corporate communication is established.

Our activities are organized in line with the principle of corporate social responsibility and criteria of impact on so-ciety by considering the region, in which our factory is locat-ed, and other social activities aimed at general public. In this context, information about the related activities carried out within the period is available in the Annual Report. In this period, there is no unfavorable notification in relation to en-vironmental damage and there are records about our activi-ties, in particular, environmental impact assessment reports.

CHAPTER 5 – BOARD OF DIRECTORS5.1. Structure and Composition of the Board of DirectorsBoard of Directors performs its activities in a transparent, accountable, fair and responsible manner.

The Board of Directors may distribute duties of manage-ment and representation among its members or assign all or some of these duties to delegates, who are board members, or managers, who do not have to be shareholders. The Board of Directors determines human resources and financial re-sources that will be required by the Company and shapes management according to these needs. The Board of Direc-tors inspects management performance and workflow.

The Board of Directors takes strategic decisions, keeps risk, growth and profit balance of the company at the most appropriate level, protects long-term interests of the compa-ny through a smart and cautious risk management approach and manages and represents the company. Authorities of the Board of Directors are defined in Article 11 of the Articles of Association. In this sense, the Board of Directors ensures that corporate activities comply with the legislation, the Articles

N A ME – SUR N A ME OF B OA R D MEMBER

S TAT US OF INDEPENDENCE

DAT E OF A PP OIN TMEN T

T ER MDU T IES IN T HE B OA R D

OF DIR EC T OR S A ND IT S COMMIT T EES

DU T IES OU T SIDE T HE COMPA N Y

Osman Turgay Durak

Not independent

member24.03.2014 1 Year Chairman of the Board

Koç Holding A .Ş. - Direc tor

Franco Fusignani

Not independent

member24.03.2014 1 Year

V ice Chairman of the Board and Member of E xecut ive Commit tee

I V ECO S.p. A - Direc tor

Kudret ÖnenNot

independent member

24.03.2014 1 Year

Board Member, Member of E xecut ive

Commit tee and Corporate Governance

Commit tee


Mar co Vot taNot

independent member

24.03.2014 1 Year Board Member

Ahmet Canbey li

Not independent

member01.07.2014

Until the f ir st General A ssembly

Meeting

Board Member, Member of Corporate

Governance Commit tee

Temel Kamil Atay

Not independent


Board Member and Member of

R isk A ssessment Commit tee


Stefano Pampalone

Not independent



Governance and Risk A ssessment

Commit tee

CNH Industr ial Internat ional SA -

Direc tor

Ali Aydın Pandır

Not independent

member24.03.2014 1 Year Board Member

ER DEMİR – Chairman of Board of Direc tor s/Tofaş-Board Member/

Türk Pr ysmian Kablo ve Sistemler i A .Ş. – Board

Member

Haşim Savaş Ar ıkan

Independent member

24.03.2014 1 Year

Board Member, Chairman of Audit


Commit tee

Deren Packaging Ind. - Consultant

Andreas Chr ist ian Schröter

Independent member

24.03.2014 1 Year

Board Member, Member of Audit Commit tee and

Chairman of R isk A ssessment Commit tee

P or t igon AG - Direc tor

of Association, internal regulations and the related policies.Following the General Assembly meetings, during which

the Board of Directors is elected, Chairman and deputy Chairman of the Board are assigned in order to take decision about assignment of duties. In the event that there are va-cancies in Board members during the period, provisions of Article 363 of Turkish Commercial Code shall apply.

Chairman of the board and general manager are different people and their duties are carried out by different people. None of our Board members including the Chairman may have any direct execution duty within our company accord-ing to the definition stated in the CMB Corporate Govern-ance Principles except for General Manager and Assistant General Manager responsible for Financial Affairs. Consid-ering the 4.4.7 numbered principle, it is ensured that board members allocate sufficient time for activities of the compa-ny and there is no limitation on these people about other as-signments or duties outside the company due to the fact that their work experience and sectorial knowledge have impor-tant contribution to the board. Before the General Assembly, shareholders are informed about resumes of the members and their duties performed outside the company.

There is a clear separation between authorities of the Gen-eral Manager of the company and Chairman of the Board as specified in the Articles of Association for the Company. The Investor Relations Supervisory affiliated under Assistant General Management of Financial Affairs is responsible for preparing agendas for decisions of the Board of Directors, writing these decisions, following these decisions and sub-mitting these decisions to information of the members and maintaining effective communication within shareholders. The Investor Relations Supervisory works in close coopera-tion with the Corporate Governance Committee.

The Board of Directors constituted of 10 members. It will be obligatory to elect five of Board Members out of nominees assigned by A group shareholders and to elect the remain-ing members out of nominees assigned by B group share-holders. One candidate from nominees assigned by A group shareholders and one candidate from nominees assigned by B group shareholders need to have characteristics of independ-ence stipulated in regulations of the Capital Markets Board.

Terms of independent Board members are limited to 3 years and it will be possible for them to be elected through re-nomination. Most of the board of directors’ members have to be non-executive members in line with the definition made by the Capital Markets Board.

Our current Board Members are Mr. Osman Turgay Du-rak, Mr. Franco Fusignani, Mr. Kudret Önen, Mr. Marco Vot-ta, Mr. Ahmet Canbeyli, Mr. Temel Kamil Atay, Mr. Stefano Pampalone, Mr. Ali Aydın Pandır, Mr. Haşim Savaş Arıkan and Mr. Andreas Christian Schröter. Curriculum vitae of Board members and General Manager are included both in Annual Reports and in the internet site of Investor Relations.


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The following regulations have been made in line with Article 4.3.4 of the Principles of Corporate Governance, which was brought into force through the Communiqué with Serial II.17.1 on Identification and Implementation of the Principles of Corporate Governance: on condition that the application is deemed appropriate by the Capital Mar-kets Board, provisions in relation to number of Independent Board Members in the Board of Directors shall not apply for business partnerships composed of two real or legal persons that equally share management oversight of the partnership in such a way that positive vote of each party is required for important decisions related to the partnership and that these parties share capital of the company, that at least 51% of the capital is direct or indirect capital and that these parties are independent from each other and number of independent board members in these companies is two. A group privileged shares of our company with a rate of 37.50% belong to Koç Group while B group privileged shares of our company with a rate of 37.50% belong to CNHI Group. In this context, the related application has been made to the Capital Markets Board and the General Assembly has approved that number of independent board members will be two depending on the process.

It is ensured, through the principles for election of the people to be considered as independent board members, that these members need to fulfill criteria stipulated in Article 4.3.7 of the Principles and a person, who worked as Board Member for more than six years within the last ten years, could not be appointed as an independent board member.

Independent Board Member candidate submits to the Cor-porate Governance Committee a written declaration stating that s/he is independent in line with the Articles of Associa-tion and the above-stated criteria during nomination for the related post. The corporate governance committee evaluates the candidate proposals for the independent membership by considering whether the nominee has independency crite-ria or not and presented the evaluation report to the board. 60 days before the general assembly, the company applies to Capital Markets Board approval for independent board mem-ber nominees confirmed by the board. After having capital markets board approval, the company informs public about the final list of independent member candidates together with the call for the general assembly meeting. General as-sembly decision for appointment of independent board mem-ber is announced in the internet site of the company together with dissenting votes and justifications thereof. In the event that independent board member candidates, against whom shareholders that represent one per cent of the capital give dissenting votes, are elected as independent board members, the Capital Markets Board makes an evaluation and decides whether independent members fulfill criteria of independ-ence upon an application to be made by these shareholders within 30 days following the date of general assembly meet-ing.

In the event that a situation for elimination of independ-ence occurs, the board of directors is immediately notified of this change by the related independent member for inform-

ing public. In this case, in principle, the independent board member, who loses his/her independence, resigns. In order to ensure minimum number of independent board members, Corporate Governance Committee makes an evaluation for election of independent members for vacancies for a term that will continue until the next general assembly meeting and notifies the board of directors of the result of the evalu-ation in writing.

As for different duties carried out by board members out-side the company, there is no limitation except for arrange-ments and rules finalized in the General Assembly each year. Provisions of Turkish Commercial Code shall apply for du-ties assigned in other affiliated group companies and for oth-er issues.

Duties of Nomination Committee are carried out by Cor-porate Governance Committee in our company.

Number of independent member candidates proposed for Corporate Governance Committee in 2015 was 2 and decla-rations of nomination and curriculum vitae for these people were evaluated during meeting of the Corporate Govern-ance Committee and meeting of the Board of Directors on 16.01.2015 and it was decided that these candidates would be independent members. All independent board members submitted their declarations of independence to the Auditing Committee and there is no situation for elimination of inde-pendence as of 2014 period.

Approval is sought from the General Assembly in order for Chairman and members of the Board to carry out activities in the field of activity for the company by themselves or on behalf of other people and to become partners in companies that work in this field in line with Articles 395 and 396 of Turkish Commercial Code. It is being thought that having variety in board in terms of knowledge, experience and point of view will have positive contribution on company activities and board efficiency. The evaluation study for determining the target for membership of women in the board which can be considered as a tool for representing different opinions in the board.

5.2. Activities of the Board of DirectorsThe Board of Directors manages and represents the company by pursuing long-term interests of the company. The Board of Directors assembles in a frequent manner so as to fulfill its duties effectively. Chairman of the board determines the agenda of the board meetings by talking to other board mem-bers and executive chairman/managing director. Members do their best in order to participate in every meeting and to present their opinions.

Decisions of the Board of Directors are arranged and pre-pared in line with the emerging requirements. A total of 40 meetings were organized in 2014.

Information and documents related to the issues included in the agenda of the board meeting are submitted to infor-mation of the board members in order to ensure equal flow of information. Issues included in the agenda of the board meetings are clearly and comprehensively discussed. Chair-man of the board does his/her best to ensure that non-exec-

utive members actively participate in board meetings. Board members ensure that reasonable and detailed justifications for their dissenting votes against related issues are recorded in the decision texts in meetings.

Board members make a proposal for amendment of the agenda to the chairman of the board prior to the meeting. Opinions of board members, who cannot participate in meet-ings, but submit their opinions in writing, are submitted to information of other members.

If there is a different vote in decisions of the meetings, an annotation is added to the decision. Questions and expla-nations are included in the text of the decision. There is no weighted vote or right of veto.

As for the quorum of decision approved by the General Assembly in line with the same article, a total of 6 non-in-dependent board members need to be present including at least 2 members representing A Group shares and at least 2 members representing B Group shares in accordance with ar-rangements of the Capital Markets Board.

In 2014, no transaction of affiliated parties or significant transactions were performed for submission to the general assembly because they were not approved by independent members.

The board of directors looks out for company’s activities by evaluating whether there is a possibility of conflict of interest and if so evaluates the results of this situation and then take resolutions in order to be act in most appropriate manner. As well as complying with the regulations for relat-ed party transactions, the board of directors evaluates the possible abuse risks and precisely reviews the related party transactions.

Additionally, since 2011, the Directors & Officers (D&O) insurance is done to cover the responsibilities of board mem-bers regarding their duties. Depending the condition and exclusion in the insurance, the protection scope ensured by D&O insurance can be summarize generally as follows:1) Within the insurance period, it provides a personal protec-tion to board members and managers across the compensa-tion demands came from investors, employees and authority in line with the conditions of insurance.2) In line with the insurance conditions, it provides a pro-tection to companies in case of compensating the amount by the company while board members and managers supposed to pay within the context of 1. subject.3) It covers defense costs.

5.3. Number, Structure and Independence of Committees Formed in the Structure of Board of DirectorsIn accordance with Article 17 of the Articles of Association for the Company, there is an Executive Committee of the Board of Directors composed of 2 people (1 member of A group and 1 member of B group). This committee performs necessary activities in between the Board meetings. Mem-bers of the committee are Mr. Franco Fusignani and Mr. Kudret Önen.

Besides, in line with the related communiqué, the Com-mittee Responsible for auditing was formed in order to follow

financial issues, to analyze periodical financial statements and footnotes and to submit its proposal to the Board of Di-rectors based on the Independent External Audit Report. Board Member Mr. Haşim Savaş Arıkan was appointed as the Chairman of the Committee and Mr. Andreas Christian Schröter as the member of the committee. The Audit Com-mittee convened 5 times in 2014 to evaluate quarterly/an-nually financial results and to send proposal for independent audit company to the board. All committee members attend-ed to the meetings.

Corporate Governance Committee was formed within the Company through a decision of the Board of Directors in order to increase compliance with the Principles of Corpo-rate Governance and Board Member Mr. Haşim Savaş Arı-kan was appointed as the Chairman of the Committee while Mr. Kudret Önen, Mr. Stefano Pampalone and Mr. Ahmet Canbeyli were appointed as the members of the committee. The Corporate Governance Committee convened 10 times in 2014 to determine independent board nominees, evalu-ate remuneration policy and corporate governance adoption report, to review the change in committee membership, to present the material event disclosures to the board, to re-view the revision made in the corporate governance rating, to evaluate the benefits provided for board members and top management. All committee members attended to the meet-ings.

Risk Assessment Committee was formed within the Com-pany through a decision of the Board of Directors in line with Paragraph 1, Article 378 of Turkish Commercial Code and Board Member Mr. Andreas Schröter was appointed as the Chairman of the Committee while Mr. Kamil Atay and Mr. Stefano Pampalone were appointed as the members of the committee. The Risk Assessment Committee convened 6 times in 2014 to examine the financial statements and re-ceivables account and to check equity, evaluate Risk Report that was included to the Annual Report, to review Compe-tition Law Adoption Procedure and internal control system and internal control activities. All committee members at-tended to the meetings.

There is no committee other than the above-stated Ex-ecutive Committee, Audit Committee, Risk Assessment Committee and Corporate Governance Committee. In line with the composition of the Board of Directors, no separate Nomination Committee and Remuneration Committee was formed. Corporate Governance Committee fulfills duties of these committees. The members of the committee were elected in line with the Communiqué with Serial Number II.17.1 on the Principles of Corporate Governance and all of the members of Committee Responsible for Inspection and chairman of the Corporate Governance Committee were elected among independent board members.

Duties and activities of the committees were determined and published in the internet site of the company. Committee may invite the related directors to the meetings in line with their working principles if deemed necessary. Committees may request consultancy services or receive views of inde-pendent experts whenever they need.


98 99


All committee reports are recorded and Auditing and Cor-porate Governance Committees’ reports published in the in-ternet site of the company.

Executive chairman/managing director are not involved in any committee. Despite there is a provision in 4.5.5 num-bered corporate governance principle as it shall be noted that any member of the board of directors shall not have a duty in more than one committee, it is not possible to have full com-pliance because of the board structure. Some board members have duty in more than one committee. But through those members committees that have related duties enable to have direct connection and increase collaboration possibilities.

Board of Directors is periodically informed about the ac-tivities performed in these committees according to the divi-sion of labor. If needed, experts, who are not board members, may be assigned in the committees. Committees act in line with their responsibilities and make recommendations to the Board of Directors. Final decision is taken by the Board of Directors.

5.4. Risk Assessment and Internal Control MechanismRisk Assessment Committee was formed in order to make recommendations and proposals to the Board of Directors about identification, assessment, calculation of impacts and possibilities of strategic, financial, operational and all other risks that could affect the Company, management of these risks in line with the corporate risk-taking profile of the company, reporting of these risks, considering these risks in decision mechanisms and creation and integration of effec-tive internal control systems. Audit Committee continuously oversees functionality and effectiveness of the system and informs the Board of Directors bout problems and sugges-tions for solution of these problems in relation to the risk management and internal control mechanism.

A risk management system is envisaged and an internal control organization is made depending on the financial and administrative activities of the company and the Committee Responsible for Audit follows functionality and effectiveness of the internal audit in line with the related legislation and regulations of the Capital Markets Board. The Board of Di-rectors is responsible for sound functioning of the internal control system and the related Board Member and Company CEO ensure necessary coordination on behalf of the Board of Directors.

The company shall draft A “Risk Management Commit-tee Report” at least 6 times a year in order to present Risk Management Committee review to carry out its activity and services effective, reliable and uninterruptedly, and ensure the integrity, consistency, reliability, timely and safety of information obtained from accounting and financial report system. The reports approved by the committee shall be dis-tributed to the BoD and Independent Auditor.

Internal Audit function: In order to carry out the Board of Directors and Upper Management of the Company make independent examinations that will enable a security for the company’s operations and they provide the service of giving a detailed report on their examinations.

• It fulfills the need of protecting the company’s assets and records.• It enables the security of financial and operational informa-tion and reporting.• It meets the need of increasing the company’s practices’ ef-fectiveness and benefits.• It provides support for meeting the policies set by the Com-pany’s Top Management.• It helps the company gain a transparent operation with con-sciousness of the Company’s high ethical values and respon-sibilities.

5.5. Strategic Objectives of the CompanyMission, vision and values of our Company were created and published and these components are revised and renewed depending on emerging developments. Our mission, vision and values, which are prepared by senior management of our company and approved by the Board of Directors, are availa-ble in our internet site.

Activities of the related units for creation and implemen-tation of strategic objectives of the Company are followed by the senior management and submitted to the Board of Direc-tors. In 2010, as in previous years, strategic decisions of our Company were implemented in line with the priorities. The Board of Directors makes a comparison on objectives of the Senior Management for the new year and makes decisions by reviewing annual activities depending on the strategic objec-tives.

During Board Meetings, which are periodically organized in line with the Articles of Association for the Company, ob-jectives of the company and completed activities including performance in the previous periods are followed. Current status of the company is reviewed and new objectives and strategies are developed as a result of current conditions, if deemed necessary. The Board of Directors oversees compli-ance of the activities of the company with the legislation, the Articles of Association, internal regulations and the related policies.

5.6. Financial Rights“Remuneration Policy of Board Members and Senior Direc-tors” of our Company including any and all rights, interests and wages provided to board members and senior director and criteria used for determination of these rights, inter-ests and wages and principles of wages was presented to the shareholders examination 3 weeks before the general assem-bly dated 24.03.2014 through Information Document and after the general assembly put into practice.

Total amount of payments made in line with the Remu-neration Policy of Board Members and Senior Directors is annually evaluated by Corporate Governance Committee and the Board of Directors. Public is collectively informed about the payments made to the Board Members and senior directors in footnotes of financial statements in parallel with the general practices. No transaction, which will result in conflict of interest, such as lending, extension and giving a security in favor of our board members or directors is carried

out by the Company.In line with the composition of the Board of Directors, no

Remuneration Committee was formed. However, Corporate Governance Committee will determine criteria to be used for wages by considering recommendations of board mem-bers and senior directors about principles of remuneration and fulfill all duties of the related committee.

Besides, within the related period, no lending, extension activity was performed in favor of any Board Member and Senior Director, no interest was provided through a third party and no security such as collateral was provided in favor of board members and directors.

Stock options or performance-based payment plans of the company are not used for wages of independent board mem-bers. In addition, wages of independent board members have to be at a level that will preserve their independence.

Public is being informed about remuneration to be given and all interests to be provided to board members and senior director.


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BOARD OF DIRECTORS

DUTIES AND AUTHORITIES OF BOARD MEMBERSThe chairman of board and board members have duties and authorities determined in related articles of the Turkish Commer-cial Law and Company’s Articles of Association. Both chairman of board and board members have the authorities determined in related articles of the Turkish Commercial Law and article number 11 of the Company’s Articles of Association.

BOARD OF DIRECTORS’ MEMBERS DURING THE PERIODPursuant to the Turkish Commercial Law and related regulations, within the framework of the Company’s Articles of Associa-tion, board members are selected to serve by the General Assembly for one year until the next Ordinary General Assembly. For board members, changes in the period are done with the board resolution in order to submit the approval of the next Ordinary General Assembly. The Company’s Ordinary General Assembly of the year 2013 hold on 24.03.2014.

The Board of Directors’ members as of 31.12.2014:

CHANGES IN THE BOARD OF DIRECTORS WITHIN THE PERIODSince Memet İlkan Kamber, who was appointed as the board member at the Ordinary General Assembly held on 24.03.2014, was appointed another duty in the Koç Holding, Ahmet Canbeyli was appointed as board member effective from 01.07.2014 to complete the remaining term of office of his predecessor through the board resolution dated 25.06.2014.

MEMBERS OF BOARD OF DIRECTORS COMMITTEES, MEETING FREQUENCY, WORKING PRINCIPLES CONSIDERING THE CONTINUING OPERATIONS AND BOARD OF DIRECTORS’ ASSESSMENT RELATED TO THE EFFECTIVENESS OF COMMITTEES The working principles of committees are present under the investor relations link in our website. The detailed information is given in the Annual Report attachment Corporate Governance Adoption Report (Appendix – 2) under the title 5.3. Number, Structure and Independence of Committees Formed in the Structure of Board of Directors.

The information regarding committees are given in the tables below.

N A ME – SUR N A ME OF B OA R D MEMBER

S TAT US OF INDEPENDENCE

DAT E OF A PP OIN TMEN T

T ER MDU T IES IN T HE B OA R D

OF DIR EC T OR S A ND IT S COMMIT T EES

DU T IES OU T SIDE T HE COMPA N Y

Osman Turgay Durak

Not independent

member24.03.2014 1 Year Chairman of the Board


Franco Fusignani

Not independent


V ice Chairman of the Board and Member of E xecut ive Commit tee

I V ECO S.p. A - Direc tor

Kudret ÖnenNot

independent member

24.03.2014 1 Year

Board Member, Member of E xecut ive


Commit tee


Mar co Vot taNot

independent member

24.03.2014 1 Year Board Member

Ahmet Canbey li

Not independent

member01.07.2014

Until the f ir st General A ssembly

Meeting


Governance Commit tee

Temel Kamil Atay

Not independent


Board Member and Member of

R isk A ssessment Commit tee


Stefano Pampalone

Not independent



Governance and Risk A ssessment

Commit tee

CNH Industr ial Internat ional SA -

Direc tor

Ali Aydın Pandır

Not independent

member24.03.2014 1 Year Board Member

ER DEMİR – Chairman of Board of Direc tor s/Tofaş-Board Member/

Türk Pr ysmian Kablo ve Sistemler i A .Ş. – Board

Member

AUDIT ING COMMIT T EE T IT LE INCEP T ION E XPIRY DAT E

Haşim Savaş Ar ıkan Chairman 24.03.2014 18.03.2015

Andreas Chr ist ian Schröter Member 24.03.2014 18.03.2015

COR P OR AT E GOV ER N A NCE COMMIT T EE

T IT LE INCEP T ION E XPIRY DAT E

Haşim Savaş Ar ıkan Chairman 24.03.2014 18.03.2015

Kudret Önen Member 24.03.2014 18.03.2015

Stefano Pampalone Member 24.03.2014 18.03.2015

Ahmet Canbey li Member 01.07.201 4 18.03.2015

RISK A SSESSMEN T COMMIT T EE T IT LE INCEP T ION E XPIRY DAT E

Andreas Chr ist ian Schröter Chairman 24.03.2014 18.03.2015

Temel Kamil Atay Member 24.03.2014 18.03.2015

Stefano Pampalone Member 24.03.2014 18.03.2015

BOARD OF DIRECTORS’ MEETING NUMBER WITHIN THE YEAR AND PARTICIPATION OF BOARD MEMBERS TO THE MEETINGS A total of 40 meetings were hold in 2014. Board members attended the meetings regularly.

THE PAYMENTS MADE TO THE BOARD MEMBERSThe Company made a payment to the Chairman and Members of Board in parallel with the current Remuneration Policy. Payment to board members’ shall be done by considering their task period from inception to expiry date in pro rata basis. The expenses (transportation, telephone, insurance, etc) of which covered by the board members due to their contribution to company, can be met by the company.

Haşim Savaş Ar ıkan

Independent member

24.03.2014 1 Year

Board Member, Chairman of Audit


Commit tee

Deren Packaging Ind. - Consultant

Andreas Chr ist ian Schröter

Independent member

24.03.2014 1 Year

Board Member, Member of Audit Commit tee and

Chairman of R isk A ssessment Commit tee

P or t igon AG - Direc tor


103 102

RESUMES OF THE BOARD MEMBER NOMINESS OF THE YEAR 2015

Mustafa Vehbi KoçMustafa V. Koç graduated with a B.A. degree in Business Ad-ministration from George Washington University in 1984. At the same year, he began his career in Tofaş as consultant and later he served as the Sales Manager and Assistant Gen-eral Manager of Ram Dış Ticaret. In 1992, he moved to Koç Holding and served as Vice President, President, Board Mem-ber and Vice-Chairman of Board of Directors. He has been Chairman of Koç Holding Board of Directors since 2003. Mr. Koç is Honorary Chairman of the Turkish Industrialists and Businessmen’s High Advisory Council and Honorary Con-sul General of Finland in Istanbul. He is also a member of the Rolls Royce International Advisory Board, the JP Mor-gan International Council, the Global Advisory Board of the Council on Foreign Affairs, and the Steering Committee of the Bilderberg Meetings. Mr. Koç was awarded the Cavaliere d’Industria medal by the Government of Italy in 2005 and the International Leonardo Prize, known as the “Oscar of Business” in 2012. He is also a member of the Board of Vehbi Koç Foundation and Board of Trustees of Turkish Volunteers for Education Foundation. Mustafa V. Koç is a controlling shareholder of the Koç Group and currently serves on the Boards of Directors of Group companies, as he has done for the past ten years.

Richard Joseph TobinRichard Joseph Tobin who is CEO of CNH Industrial N.V., Brand Head of Case and New Holland Construction Equip-ment holds a Bachelor of Arts and Master of Business Ad-ministration degrees from Norwich University and Drexel University, respectively. Mr. Tobin carries forth extensive experience in international finance and management that he acquired through regional and global leadership positions of growing responsibility and scope. He began his career with GTE Corporation in Stamford, Connecticut (U.S.), as Vice President of International Marketing. In 1995, he joined Alusuisse-Lonza SA in Zurich, Switzerland, as General Man-ager and Vice President, where he remained until 2001, and the year when he joined Alcan Aluminum of Montreal, Can-ada, with a general management role. In 2002, Mr. Tobin joined SGS Group of Geneva, Switzerland, where he became the Chief Operating Officer for North America. In 2004, he became SGS Group’s Chief Finance Officer & Head of Infor-mation Technology, a position he retained for six years before finally joining CNH in March 2010. Prior to the integration of Fiat Industrial S.p.A. and CNH Global N.V. into CNH In-dustrial, Mr. Tobin was Group Chief Operating Officer of Fiat Industrial S.p.A. and President and Chief Executive Of-ficer of CNH, a role he assumed in January 2012 after two years as Chief Financial Officer (CFO) for CNH.

Levent Çakıroğlu He graduated from Ankara University School of Political Sci-ence in Business Administration and completed his MBA at

the University of Illinois. He began his career at the Ministry of Finance as junior accountant in 1988. Between 1997 and 1998, he worked as part-time lecturer at Bilkent Universi-ty and as Vice President of Financial Crimes Investigation Board at the Ministry of Finance. He joined Koç Holding in 1998 as Finance Group Coordinator. He was the CEO of Koçtaş between 2002 and 2007 and Migros between 2007 and 2008. After becoming the CEO of Arçelik in 2008, he appointed as the President of Consumer Durables Group at Koç Holding in April 2010. He was appointed as CEO of Koç Holding effective from 31.03.2015.

Stefano Pampalone Mr. Pampalone who is the Chief Operating Officer APAC, holds a Master degree of Engineering from the University of Trieste. Stefano Pampalone assumed the role of General Manager for CNH in India, Far East and Japan in February 2013. Since joining CNH in 1998, Mr. Pampalone has always been involved in international assignments. In 2001, after gaining commercial experience in parts and whole goods in Poland, India, Africa and Middle East, he was appointed Business Manager Southern Africa and Iran for all Agricul-tural Brands in the Fiat Group. In 2004 he became Market-ing Director for Agricultural Equipment in Asia, Africa and Middle East. From 2006 till 2009 he first served as Business Director for CNH Agricultural Business in Italy and after one year as Business Director Africa & Middle East. In 2009 he was appointed General Manager of Agricultural and Con-struction Equipment Business in India and Pakistan.

Osman Turgay Durak Osman Turgay Durak received his Master’s degree in Me-chanical Engineering at Northwestern University in the USA. He joined the Koç Group as a Product Development En-gineer at Ford Otomotiv in 1976 and was appointed Assistant General Manager in 1986. He took office as Deputy General Manager in 2000 and as General Manager of Ford Otosan in 2002. He worked as the President of the Automotive Group of Koç Holding between 2007 and 2009. He was appointed the Deputy CEO of Koç Holding in May 2009. Durak has been the CEO of Koç Holding since April 2010.

Kudret Önen Kudret Önen completed his under graduated studies and received his engineering degree from Gazi University. He joined the Koç Group at Ford Otosan in 1975. He served as the Manager of the R&D Department at Koç Holding in 1980 and as Assistant General Manager of Otokar in 1984. During 1994-2005, he served as the General Manager of Otokar. In 2005, he was appointed Vice-President of Koç Holding Oth-er Automotive Companies Group. In 2006, he was appointed President of the Koç Holding Defense Industry and Other Automotive Group. Önen has been serving in the role of Pres-ident of the Koç Holding Defense Industry, Other Automo-tive and Information Group since 2010.

Marco Votta Marco Votta completed his undergraduate studies at the Business Administration Department of the Luigi Bocconi University of Commerce. He started his career at Pluritec S.p.A (a manufacturer of industrial machines) in 1994 and continued as a Management Consultant at Andersen Consult-ing. Votta commenced service at the Business Development Department of New Holland in 1998 and was appointed as Assistant General Manager in charge of Business Control at Türk Traktör ve Ziraat Makineleri A.Ş. and New Holland Trakmak Traktör ve Ziraat Makineleri Ticaret A.Ş. in 1998, where he worked as the CFO during 2006-2010. Votta has been in the position of General Manager since April 2010.

Ali Aydın Pandır Ali Aydın Pandır received his undergraduate degree from the İstanbul Technical University Department of Mechanical Engineering. He started his career at Tekersan Jant Sanayi and served as Project Engineer at Koç Holding between 1982-1984 and Production Manager at Otokar between 1984-1989 at Otokar. He worked for General Motors between 1990-1993, and fro Opel-Germany between 1993-1996, he com-pleted his carreer in foreign countries by serving as CEO and General Manager of General Motor’s plants in Indonesia, Singapore and China between 1996-2006. He served as the CEO and board member of Tofaş Türk Otomobil Fabrikaları during 2006-2012 period, then he appointed as the Head of Turkey at Fiat. Currently serving as a Member of the Board of Directors of Tofaş A.Ş. and independent board member pf Türk Prysmian Kablo ve Sistemleri A.Ş., Pandır is also the Chairman of the Board of Directors of Ereğli Demir ve Çelik Fab. T.A.Ş.

Haşim Savaş Arıkan Haşim Savaş Arıkan graduated as a Mechanical Engineer from the Robert College School of Engineering in 1965. He was born in İstanbul in 1942. He obtained his Master’s de-gree from the Middle East Technical University. He joined TOFAŞ Türk Otomobil Fabrikası in 1970 and worked as the Chief of the Press Workshop in 1972, as Assistant Produc-tion Manager in 1977, as Assistant Maintenance Manager in 1979, as Manager of Maintenance and Facilities in 1981, as Manager of Technical Services in 1983, as Assistant Gener-al Manager (Operations) in 1995 and Production Director in 2001. Arıkan retired from TOFAŞ in 2002. Arıkan is also one of the founders of the Engineering and Architecture Fac-ulty Technology Foundation, founded at Uludağ University in 1996 and currently serves on the Board of Directors as the Second President of the foundation. Arıkan is currently working as a management consultant to Deren Ambalaj San-ayi ve Ticaret A.Ş. and a serves on the superior advisory com-mittee of the Bursa Chamber of Mechanical Engineers, the advisory committee of USİGEM and the board of directors of the Bursa Disaster Society. Being one of the 71 members of the UİG (National Innovation Initiative), which was found-ed by Sabancı University and TÜSİAD in 2003, Arıkan gives lectures on “innovation” as part of the technology course at

the Engineering Faculty of Uludağ University.

Andreas Christian Schröter Andreas C. Schröter graduated from the Besgische Univer-sity Economics Department in Wuppertal, Germany and completed his professional education as a banker at Deutsche Bank AG in Cologne. He joined the Westdeutsche Landes-bank AG in 1983 and worked in the Human Resources De-partment for several years. In 1991 he was appointed as the President in charge of Human Resources for Germany. He was transferred to the West LB New York Branch Office in 1998 and worked as a Client Relations Manager. During 2003-2014, he worked as the General Manager of the West LB İstanbul Branch Office and President responsible for Tur-key. In addition to his regular assignments, he also served as Global President in charge of Business Management and Development at West LB AG (renamed Portigon AG in July 2012) from 2011 to 2013. In addition, he served as a Member of the Board of Directors of the German-Turkish Chamber of Industry and Commerce from 2009 to 2013 and as a Member of the Board of Directors of the Compagnie Belge de la West LB S.A. (renamed CBAL S.A.) from 2011 to 2013. Schröter has been the Director of the Unit for the Origination of Tur-key at the Portigon Head Office in Düsseldorf since Novem-ber 2014.

Board of Directors


105 104

REMUNERATION POLICY FOR TOP MANAGEMENT AND BOARD MEMBERS’

This policy document identifies the remuneration system and practices concerning our board members’ and top man-agement whose have administrative responsibility as per the CMB regulations.

Fixed compensation for all board members’ is determined in general assembly meetings every year.

Payment for executive board members shall be done with-in the context of below given policy that has been determined for top managers.

Performance based compensation is not applied for the in-dependent board members remuneration.

Payment to board members’ shall be done by considering their task period from inception to expiry date in pro rata basis. The expenses (transportation, telephone, insurance, etc…) of which covered by the board members due to their contribution to company, can be met by the company.

The top management compensation is comprised of two components; fixed and performance based.

Top management’s fixed compensation is determined in parallel with international standards and legal obligations by considering macroeconomic data in the market, remunera-tion policies prevalent in the market, corporate growth and long term targets and the position of the managers’.

Top management bonuses are calculated according to bo-nus based, company performance and personal performance. The information concerning the mentioned criteria is sum-marized below.

bonus based: The base of bonus updated at the beginning of every year and can be variable according to the size of man-agers’ position. While updating the base of the bonuses, the top management bonus policies prevalent in the market shall be considered.

company performance: The company performance is ob-tained by evaluating period end values of the financial and operational (market share, export, foreign market activities, efficiency, etc…) targets given at the beginning of every year. The sustainability of the success, covering improvements compared to previous years is the overemphasized principles considering determining the company targets.

personal performance: Targets concerning employee, custom-er, process, technology and long term strategy are considered together with the company targets to determine the personal performance. While evaluating the personal performance, in line with company performance, it is paying regard to long term sustainable improvement principle excluding the fi-nancial areas,

In case the top managers leave the company, post-employ-ment benefits may be paid by taking into consideration of their working period as top manager, their contribution to the company, last target bonus before the leaving date, sala-ries and the bonuses paid within the last year.

Total amount of remuneration of which paid to top man-agement and board members’ within the year, and deter-mined as per the above given principles, shall be presented to the information and/or approval of shareholders in the following general assembly in line with the legislation.

LEGAL EXPLANATIONS

period of report01.01.2014 – 31.12.2014 the name of companyTürk Traktör ve Ziraat Makineleri A.Ş. the registry of commerce – trade registry numberAnkara Ticaret Sicili Müdürlüğü – 5347 central registry system number0876005471300012 contact information of the headquartersAdress: Güvercin Yolu No: 111-112 06560 GaziYenimahalle Ankara Tel : 0 312 233 33 33 contact information of the brancheserenler plant:Adress : Bekirpaşa Mahallesi Kozluk Caddesi No:130Erenler Sakarya Tel : 0 264 289 89 89akyurt branch:Adress : Büğdüz Mahallesi No: 286/3 Akyurt Ankara Tel : 0 312 847 52 77ostim branch:Adress : 1212. Sokak No: 2-4-6-8 ve 1213. Sokak No: 1-3-5-7 Ostim Ankara Tel : 0 312 233 33 33İzmir branch:Adress : KOSBI Ansızca Sanayi Sitesi No:327/A-B-C-DKemalpaşa İzmir Tel : 0 312 233 33 33

web sitewww.turktraktor.com.tr manufacturing capacityOur Company’s annual manufacturing capacity is 50,000 units of tractor with the Ankara and Erenler Plants. (In case of working in double shifts for 5 days a week as per the Cham-bers of Industry standard). main factors affecting the company’s performance, impor-tant changes occurred in the company’s operating area and policies applied by the company against these changes, in-vestment and dividend policy applied to strengthen of com-pany’s performanceIn the related period, there are not any important changes in the operating area of the company.

employee and Workers’ movements and collective bargaining applicationsThe personnel number of our company is 3,040 by 31 Decem-ber 2014. No disagreement or worker movement observed during the period in terms of activities.

Our company is subject to collective group agreement signed between Turkish Metal Industry and MESS. Since the Union and Collective Bargaining Agreement Law num-bered 6356 has been entered into force on 07.11.2012 and the acquisition of authorization has been served; the col-lective agreement signed between Turkish Metal Industry and MESS. The conditions concerning the collective group agreement for the period of 01.09.2014-31.08.2016 was an-nounced on 16.12.2014.

Within the legal regulations our staff’s social rights are regularly and periodically provided.

Reference to the the CMB communiqué with serial no II.14.1 the senior indemnities liability is TL 8,986,321 at the end of period.

the qualification and amount of the issued capital market instrumentsThere is not any issued capital market instruments in the re-lated period.

investment activitiesIn the year 2014, our Company invested total amount of TL 234,219,964. TL 23,567,559 of total investment amount is coming from the capitalized development costs. In 2014, our Company created the amount of TL 36,794.678 of tax asset within the scope of incentivized investment.

As of 31.12.2014, total 279,243,226.91 TL has been spent for Erenler Plant investment including the land purchases and total land purchases reached to 396,442.79 m2.

development of financial sources and policies implemented by the company in this development frameworkThe Company provided its financial needs occurred in the period of 01.01.2014 – 31.12.2014 by using the bank loan.

donationsThe total amount of TL 4,400,318 donations to the founda-tions and associations are done in the year 2014.

information about significant administrative sanctions and penalties on the company and board members due to practices, which are contrary to the provisions of the legislation, if anyThere are not any administrative sanctions or penalties for the Company and Board Members due to practices, which are contrary to the provisions.


106 107

Legal Explanations

information about considerable suits filed against the compa-ny and possible consequences thereofThere is not any significant sue against the company which could affect our Company’s financial situation and activities.

information about amendments of the legislation, Which could significantly affect activities of the companyThere is not any amendment of the legislation, which could significantly affect activities of the company.

the conflicts of interest occurred between the company and the corporations providing investment consulting and rating services and information related to the taken measures to prevent these conflicts of interestThe investment consulting service is not taken. The Corpo-rate Governance Rating service is taken but the conflict of interest does not occur with the company which provides this service.

organizational changes within the yearMr. Memet İlkan Kamber, who was selected as the board member nominated by A Group shareholders in the Ordinary General Assembly held on March 24, 2014, resigned from his Board membership as of July 1, 2014, due to his appointment to another Koç Group company. Pursuant to the decision tak-en at the Board of Directors’ meeting on June 25, 2014, Mr. Ahmet Canbeyli was appointed a Board member to serve un-til the next Ordinary General Assembly Meeting.

Mr. Memet İlkan Kamber, who was serving in the com-pany as CFO, left his poisiton as of July 1, 2014, due to his appointment to another Koç Group company. Pursuant to the decision taken at the Board of Directors’ meeting on June 25, 2014, Mr. Ahmet Canbeyli was appointed CFO as of July 1, 2014, to replace Mr. Memet İlkan Kamber.

Mr. Friedrich Wirleitner, who was serving in the compa-ny as Assistant General Manager in charge of Product and R&D, left his position in our company as of September 30, 2014, since he was appointed to a different position at CNHI Group. Pursuant to the decision taken at the Board of Direc-tors’ meeting on October 1, 2014, Mr. Ali El İdrissi El Bouz-idi was appointed as Assistant General Manager in charge of Product and R&D as of October 1, 2014, to replace Mr. Frie-drich Wirleitner.

Mr. Mustafa Siyami Eser, who was serving in the company as Assistant General Manager in charge of Production, left his position in our company as of April 30, 2014, due to his re-tirement. Pursuant to the decision taken at the Board of Di-rectors’ meeting on April 28, 2014, Mr. Nebi Doğan Özdöngül was appointed Assistant General Manager in charge of Pro-duction as of May 1, 2014, to replace Mr. Mustafa Siyami Eser.

social rights of employees, vocational education and other informations about company activities Which create social and environmental results

social rightsOur employees have some rights such as fuel allowance, paid vacation allowance, financial help for marriage, maternity benefit, assistance in case of death, military service support, child support, educational support, shoes support, towel ben-efit (big once a year, small twice a year), soap (twice a year), food, services and resting areas.

TürkTraktör carries out social responsibility and spon-sorship projects in several areas in the sector as we add value to the country and society in general. Through these social responsibility projects, the Company aims to contribute in both a material sense and by encouraging employees to take part in these projects voluntarily and become part of them. TürkTraktör reaches out to the families of employees to in-crease their awareness of social issues and to encourage more personal involvement. With social responsibility projects fo-cusing on education, the Company contributes to the devel-opment of young people as it instills in them a sense of social responsibility.

information about the extraordinary general assembly meeting, if held during the yearAn Extraordinary General Assembly Meeting was not held during the year.

implementation of the general assebly meeting’s resolutionsThe resolutions taken at the Ordinary General Assembly Meeting held on 24.03.2014, have been implemented.

informations related to shareholders, who have dominance in management, board members, senior directors which have administrative liability and spouses and relatives of these people up to the second degree to carrying out activities that may result in conflict of interest with the company and the affiliated partnerships and to competingWithin the framework of articles 395 and 396 of the Turkish Commercial Law, it is need to be getting permission from the General Assembly.

key indicators and ratiosFinancial statements are prepared and audited in accordance with the Capital Markets Board Communiqué on Principles of Financial Reporting in Capital Markets serial no II-14.1 (“Communiqué”), Turkish Accounting Principles/ Turkish Financial Reporting Standards (“TAP/TFRS) and the recom-mended formats of the CMB.

b a l a nce shee t ( t l ) 31 december 2014 31 december 2013

Current assets 1,319,190,50 8 1,0 85,7 13,601

Non-cur rent assets 59 4,856,341 4 0 8,899,590

Total assets 1,914,0 4 6,8 49 1,49 4,613,191

Current l iabil i t ies 737,879,961 385,811,950

Non-cur rent l iabil i t ies 47 1,30 4,17 3 365,4 83,519

Shareholder s’ equit y 7 0 4,862,7 15 743,317,722

t o ta l li a bili t ie s 1,914 ,0 4 6,8 49 1, 49 4 ,613,191

income s tat emen t ( t l ) 31 december 2014 1 december 2013

Sales (net) 2,723,317,8 09 2,175,319,8 81

Cost of sales (-) (2,234,163,502) (1,7 03,022,950)

Gross prof it 4 89,15 4,307 472,296,931

Operat ing E xpenses / O ther Operat ing Income / E xpenses

(192,411,9 4 4) (147,238,4 41)

Operat ing prof it 296,742,363 325,058,490

Investment Income / E xpenses F inancial Income / E xpenses

(3,295,478) (4,8 03,919)

Prof it Before Taxat ion on Income 293,4 4 6,8 85 320,25 4,57 1

Taxes on Income (32,359,613) (4 0,34 8,632)

Net Prof it 261,0 87,272 279,905,939

imp orta n t r at ios 2014 2013

Gross Prof it Margin 18.0 % 21.7 %

Operat ing Prof it Margin 10.9% 14.9%

EBI T DA Margin 12.1% 16.1%

Net Prof it Margin 9.6% 12.9%

Return on A sset 14% 19%

Return on Equit y 37 % 38%

Current Rat io 1.8 2.8

Quick Rat io 1.2 1.2

legal disclaimer:

This annual report (report) which includes the Board of Directors’ Report concerning the activities and accounts of the year 2014, Financial Statements and

Independent Audit Report, has been prepared in line with the legal regulation in order to present at Türk Traktör ve Ziraat Makineleri A.Ş. (the company)

Ordinary General Assembly Meeting that will be held on Wednesday 18.03.2015 at the address of company’s headquarter, Güvercin Yolu No:111 06560 Gazi

Yenimahalle / ANKARA. This report has been prepared just for the purpose of informing the shareholders, shall not intended to provide a basis for any invest-

ment decision. The report includes the forward-looking views and a figure that reflects the Company’s management assumptions for future events and may be

differentiates depending on the assumptions and variables constituted realizations and estimated figures. Accordingly, neither the company nor any of its board

members, consultants nor employees shall have any liability whatsoever for any information or communication transmitted within the scope of this report

or the information contained in this report are not included in an information-based or as a result of incurred losses and loss of a person directly or indirectly.

At the time of preparation of this report, all of the information is believed to be accurate; the company shall not accept any responsibility for inaccuracies that

may occur typographically and at printing stages.


108 109

THE AMENDMENTS TO THE ARTICLES OF ASSOCIATION

THE COMMITMENT REPORT PREPARED WITHIN THE CONTEXT OF ARTICLE 199 OF TURKISH COMMERCIAL LAW

Based on the permissions of the Turkish Republic Prime Ministry Capital Markets Board dated 03.03.2014 and no 438-2169, 10.02.2014 and no 290-1383 and the permission of the Domestic Trade General Directorate division of the Turkish Republic Ministry of Customs and Trade dated 20.02.2014 and no. 1365-1021, the proposal of making amendment to the 3rd article entitled “Purpose and Scope”, 6th article entitled “Share Capital”, 8th article entitled “Transfer of Shares and Establishment of Rights of Usufruct on Shares”, 12th article entitled “Daily Management of the Company and the Executive Committee” of the company’s Articles of Association approved in Ordinary General Assembly dated 24.03.2014. The old and new texts of relevant articles are published on the company web site under the investor relations part.

Pursuant to the article 199 of Turkish Commercial Code no. 6102 dated 1 July 2012, the board of directors of Türk Traktör ve Ziraat Makineleri A.Ş. shall prepare a report concerning the relations of company with the parents and associated companies, in the first three months of the activity year and the conclusion part of this report shall be given on the Annual Report. The necessary explanations about the transactions done by Türk Traktör ve Ziraat Makineleri A.Ş. with the related parties are given in the financial report’s note number 22.

In the report dated 23.02.2015 prepared by the Board of Directors of Türk Tarktör ve Ziraat Makineleri A.Ş., it is said that Board of Directors of Türk Traktör ve Ziraat Makineleri A.Ş. shall conclude that; in 2014, within all the transactions made between the controlling shareholders of Türk Traktör ve Ziraat Makineleri A.Ş. and the subsidiaries of the controlling share-holders, according to terms and conditions known by us at the moment when the transaction is made or the measure is taken or the measure is avoided to be taken, an appropriate return performance is acquired in every procedure, and that there is no measure taken or avoided to be taken that can damage the company, and that there is no procedure or measure requiring a balancing in this regard.


111 110

INDEPENDENT BOARD OF DIRECTORSMEMBERS’ DECLARATIONS FOR INDEPENDENCY


112 113

TÜRK TRAKTÖR VE ZİRAAT MAKİNELERİ A.Ş.AGENDA OF ORDINARY GENERAL ASSEMBLY DATED 18.03.2015

1. Opening and Election of the Presidential Board,

2. Reading, discussing and approving the Annual Report of 2014 prepared by Company’s Board of Directors,

3. Reading the summary of Independent Audit Report relat-ed to the accounting year of 2014,

4. Reading, discussing and approving the Financial State-ments related to the accounting period of the year 2014

5. Approving the change in board membership during the year pursuant to 363rd article of Turkish Commercial Code

6. Acquitting the members of the Board of Directors due to the activities of the company for the year 2014,

7. Full adoption, acceptance by certain changes, or rejection of the Board of Directors’ proposal with respect to distribu-tion of the profit for the year 2014 prepared in line with div-idend policy and date of such profit distribution,

8. Selecting the board members and determination of the task period, selecting the independent board members

9. Pursuant to Corporate Governance Principles, informing the Shareholders about the remuneration policy towards the Members of the Board of Directors and top managers and about the payments made within the scope of this policy and approving them,

10. Determination of monthly gross remunerations of Board of Directors’ members,

11. Approval of the selection of the Independent Auditing Company proposed by the Board of Director in connection with the provisions of Turkish Commercial Code and Capital Markets Board,

12. Obtaining information to the shareholders about the do-nations granted in 2014 and determination the upper limit for donations in 2015,

13. Obtaining information to the shareholders about the guarantee, pledge, mortgage and bails given in favor of third parties by the company within the context of Capital Mar-kets Board regulation,

14. Granting of permission to shareholders having manage-rial control, shareholder board members, top managers and up to the second degree blood or affinity relatives in accord-ance with articles 395 and 396 of Turkish Commercial Code, Capital Markets Board legislation and obtaining information to the shareholders concerning the transactions done in the year 2014 in line with Corporate Governance Principles,

15. Wishes.

DIVIDEND PROPOSAL

According to our financial statements for the fiscal period 1 January 2014 to 31 December 2014, the Company’s net income is TL 261,087,272. These financial statements were prepared under International Financial Reporting Standards, and audited by Güney Bağımsız Denetim ve S.M.M.M. A.Ş. (a member of Ernst&Young Global Limited). Our proposal for profit distribu-tion – prepared with due regard for profitability and cash status – is stated below.

It has been resolved to distribute dividend as shown below in line with Capital Markets Legislation, 19th article of Articles of Association and Dividend Policy approved by the shareholders at the general assembly on 24.03.2014.

Distribute first dividend to the shareholders TL 159,292,554.20 Distribute second dividend to the shareholders TL 40,707,445.80 And to allocate 2nd Type Legal Reserve TL 19,733,155 It has been resolved to pay TL 200,000,000 in cash which is equal to the first and second dividend to be distributed to the

shareholders. It has been resolved to determine the dividend payment date as 25th of March and present to the approval of General As-

sembly held on 18.03.2015.Thereby, the dividend will be distributed in cash;

• to the resident taxpayer shareholders and non-resident taxpayer shareholders obtaining dividend income through an office or a permanent representative in Turkey as gross (=net) 3.74749386 kr for each share nominal 1 kr (374.749386%) and, • to foreign-based taxpayer shareholders; as gross 3.74749386 kr (3.56011917 kr net) for each share nominal 1 kr (356.011917%) • to the rest of our shareholders as gross 3.74749386 kr (3.18536978 kr net) for each share nominal 1 kr (318.536978 %).

the dividend distributed Within last 3 years and ratios

di v idend 2012 2013 2014

Amount 20 0,0 0 0,0 0 0 30 0,0 0 0,0 0 0 20 0,0 0 0,0 0 0

Ratio (%) 74.6 107.2 76.6


114 115

PROFIT DISTRIBUTION TABLE

di v idend dis t r ibu t ion ta bl e of t ür k t r a k t ör v e zir a at m a kinel er i a .Ş. f or 2014 ( t l )

1. Paid-Up / Issued Capital 53,369,0 0 0.0 0

2. Total Legal Reser ve Fund ( According to legal records) 143,902,267.03

Information relat ing to preferences, i f any on div idend distr ibut ion according to ar t ic les of associat ion

None

ACCOR DING TO CMBACCOR DING TO LEG A L

R ECOR DS (LR)

3. PROFI T FOR T HE PERIOD 293,4 4 6,8 85.0 0 233,0 0 4,251.01

4. TA x ES PAYA BLE ( - ) 32,359,613.0 0 41,0 03,15 4.39

5. NE T PROFI T FOR T HE PERIOD ( = ) 261,0 87,272.0 0 192,0 01,096.62

6. LOSSES FROM PR E V IOUS Y E A R S ( - )

7. GENER A L LEG A L R ESERV E F UND ( - )

8 . NE T DIS T RIBU TA BLE PROFI T ( = ) 261,0 87,272.0 0 192,0 01,096.62

9. DON AT IONS OF T HE Y E A R ( + ) 4,4 0 0,318.34

10.NE T DIS T RIBU TA BLE PROFI T OF T HE

PERIOD INCLUDING DON AT IONS265,4 87,590.34 192,0 01,096.62

11.

PRIM A RY DI V IDEND TO SH A R EHOLDER S 159,292,55 4.20 2,66 8,450.0 0

- C A SH

- BONUS SH A R E

- TOTA L

12.DI V IDENDS PA ID TO PRI V ILEGED

SH A R EHOLDER S

13.

OT HER DIS T RIBU T ED DI V IDEND

- TO T HE MEMBER S OF T HE B OA R D

- TO T HE EMPLOY EES

- TO T HE OT HER S W HO A R E NOT

SH A R EHOLDER

14.DI V IDEND DIS T RIBU T ED TO T HE OW NER S

OF DI V IDEND RIGH T CERT IF IC AT E

15. SECONDA RY DI V IDEND TO SH A R EHOLDER S 4 0,7 07,4 45.8 0 172,120,587.83

16. GENER A L LEG A L R ESERV E F UND 19,7 33,155.0 0 17,212,058.78

17. S TAT U TORY R ESERV ES

18. SPECIA L R ESERV ES

19. E xCESS R ESERV ES 41,35 4,117.0 0 0.0

20.

OT HER R ESOURCES T H AT A SSUMED TO BE

DIS T RIBU T ED25,210,962.17

- FROM E xCESS R ESERV ES 25,210,962.17

- FROM OT HER C A PI TA L R ESERV ES

- FROM LEG A L R ESERV ES

21.

GENER A L LEG A L R ESERV E F UND FOR

OT HER R ESOURCES T H AT A SSUMED TO BE

DIS T RIBU T ED

2,521,096.22

A B O U T T H E R AT E O F PA ID D I V ID E N D

GROUP

TOTA L DIS T RIBU T ED DI V IDEND

A MOUN T

TOTA L DIS T RIBU T ED

DI V IDEND A MOUN T / NE T

DIS T RIBU TA BLE PROFI T

DI V IDEND COR R ESP ONDING TO ONE SH A R E OF 1 T L NOMIN A L VA LUE

C A SH ( T L)B ONUS

SH A R E ( T L)R AT E (%) A MOUN T ( T L) R AT E (%)

Net

A 75,0 0 0,0 0 0 28.7 3 3.74749 4 374.749386

B 7 1,250,0 0 0 27.29 3.560119 356.011917

C 42,50 0,0 0 0 16.28 3.18537 0 318.536978

TOTA L 18 8,750,0 0 0 72.29 - -

(1) There is not privileged right for dividend.

(2) A Group shares are holding by the resident taxpayer shareholders, thus 0% withholding tax is calculated.

(3) Foreign-based taxpayer shareholder CNHI Österreich is holding B group shares. Due to the agreement to avoid double taxation between Austria and Turkey,

withholding tax is calculated 5%.

(4) %15 withholding tax calculated for the remaining C group share owners.

117


116

TÜRK TRAKTÖR VE ZİRAAT MAKİNELERİ A.Ş.CONVENIENCE TRANSLATION INTO ENGLISH OF FINANCIAL STATEMENTS AT DECEMBER 31, 2013 TOGETHER WITH INDEPENDENT AUDITOR’S REPORT(ORIGINALLY ISSUED IN TURKISH)

118 119


InDePenDenT auDITor’S rePorT abouT fInancIal STaTeMenT ....................................................................... 115 - 116

STaTeMenTS of fInancIal PoSITIon ................................................................................................................................... 117 - 118

STaTeMenTS of ProfIT or loSS anD oTher coMPrehenSIVe IncoMe ..................................................................... 119

STaTeMenTS of chanGeS In ShareholDerS’ equITy .......................................................................................................... 120

STaTeMenTS of caSh flowS ..................................................................................................................................................... 121 - 122

EXPLANATORY NOTES TO THE FINANCIAL STATEMENTS .............................................................................................. 123 - 159

CONTENTS

INDEPENDENT AUDITOR’S REPORT ABOUT FINANCIAL STATEMENT

120 121


curr ent per iodaudited

Pr ior per iodAudited

no tes december 31, 2014 DECEMBER 31, 2013

a sse t s

cur r en t a sse t s 1.319.19 0.50 8 1.0 85.7 13.601

Cash and cash equivalents 3 269.229.023 209.322.936

Trade receivables:

• Trade receivables, other parties 5 362. 4 4 2.8 0 0 282.114.924

• Due from related parties 22 98. 4 4 6.05 4 8 0.797.729

Inventor ies 6 436.283.247 413.398.558

Prepaid e xpenses 5.032.6 05 416.76 8

O ther cur rent assets 9 147.756.7 7 9 99.662.6 86

non-cur r en t a sse t s 59 4 .856.3 41 4 0 8.899.590

Trade receivables:

• Trade receivables, other parties 5 - 250.659

O ther receivables:

• Other receivables, other parties 357. 419 355.102

Proper t y, plant and equipment 7 45 4 .15 4 .723 274.193.297

Intangible assets 8 93.76 0.0 81 7 7.296.206

Prepaid e xpenses 10 832.613 20.260.797

Defer red tax assets 20 45.751.505 36.5 43.529

t o ta l a sse t s 1.914 .0 4 6.8 49 1.49 4.613.191

The financial statements prepared as at and for the period ended December 31, 2014 have been approved by the Board of Directors on February 16, 2015 and was signed by the General Manager Marco Votta and Vice President of Financial Affairs Ahmet Canbeyli on behalf of the Board of Directors.

The accompanying notes form an integral part of these financial statements.

STATEMENTS OF FINANCIAL POSITION FOR YEAR ENDED AT DECEMBER 31, 2014(Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated.)

122 123

TürkTraktör, 2014 Annual ReportSTATEMENTS OF FINANCIAL POSITION FOR YEAR ENDED AT DECEMBER 31, 2014(Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated.)

STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED AT DECEMBER 31, 2014(Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated.)


Pr ior per iodAudited

no tes december 31, 2014 DECEMBER 31, 2014

li a bili t ie s

current liabilities 737.879.961 385.811.950

Short-term financial liabilities 4 121.626.528 14.702.994

Short term portion of long term financial liabilities 4 94.964.073 -

Trade payables:

• Trade payables, other parties 5 403.905.945 276.743.088

• Due to related parties 22 44.766.757 29.346.571

Employee benefit obligations 12 16.273.738 10.958.597

Other payables:

• Other payables, other parties 11.740.493 7.669.767

Government incentives and aids 3.183.083 3.242.469

Deferred income 9 11.859.067 11.299.957

Provision for taxation on income - 8.524.578

Short-term provisions:

• Short-term provision for employee benefits 11 1.488.479 979.368

• Other short-term provisions 11 28.071.798 22.344.561

non-current liabilities 471.304.173 365.483.519

Long-term financial liabilities 4 441.660.937 333.887.601

Long-term provisions:

• Long-term provision for employee benefits 11 8.986.321 15.435.367

• Other long-term provisions 11 20.656.915 16.160.551

shareholders’ equity 704.862.715 743.317.722

parent’s equity

Paid-in share capital 13 53.369.000 53.369.000

Adjustments to share capital 13 39.014.356 39.014.356

Merger reserve (5.569.000) (5.569.000)

Restricted profit reserves 143.902.267 114.169.112

Other comprehensive income/expense not to be reclassified to profit or loss:

• Actuarial gain/loss arising from defined benefit plans 207.195 (250.526)

Retained earnings 212.851.625 262.678.841

Net profit for the period 261.087.272 279.905.939

total liabilities 1.914.046.849 1.494.613.191

Provisions, contingent assets and contingent 11



prior per iodaudited

no tesJ a nua ry 1 -

december 31, 2014J a nua ry 1 -

december 31, 2013

Sales 14 2.723.317.809 2.175.319.881

Cost of sales (-) 14 (2.234.163.502) (1.703.022.950)

gross profit 489.154.307 472.296.931

Marketing, selling and distribution expenses (-) 15 (124.101.198) (97.248.052)

General administrative expenses (-) 15 (56.382.394) (40.764.494)

Research and development expenses (-) 15 (11.928.352) (9.225.895)

Other operating income 17 563.688.910 401.066.375

Other operating expenses (-) 17 (558.977.074) (376.474.610)

operating profit 301.454.199 349.650.255

Income from investment activities 1.751.090 343.990

Expenses from investment activities (-) (60.118) (145.224)

Financial income 18 63.135.514 53.956.127

Financial expenses (-) 19 (72.833.800) (83.550.577)

profit before taxation on income 293.446.885 320.254.571

Taxation on income (-) 20 (41.682.033) (55.246.090)

Deferred tax income 20 9.322.420 14.897.458

net profit for the year 261.087.272 279.905.939

Attributable to:

Non-controlling interest - -

Equity holders of the parent 261.087.272 279.905.939

other comprehensive income/ (expense)

Other comprehensive income/expense not to be reclassified to profit or loss:

Actuarial loss arising from employee benefits 572.165 (472.892)

Deferred tax effect (114.444) 94.578

other comprehensive income/expense after tax 457.721 (378.314)

total comprehensive income 261.544.993 279.527.625

earnings per share (tl) 21 0,0490 0,0524


124 125

TürkTraktör, 2014 Annual ReportCHANGES IN SHAREHOLDERS’ EQUITY FOR THE YEAR ENDED AT DECEMBER 31, 2014(Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated.)

STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED AT DECEMBER 31, 2014(Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated.)

other comprehensive income or loss items not to be

reclassified to profit or loss

paid-in share

capital

adjustment to share capital

merger reserve

actuarial gain/ (loss) fund arising from benefit plans

restricted reserves allocated

from profit

retained earnings

net profit for the period

total shareholders’

equity

January 1, 2014 53.369.000 39.014.356 (5.569.000) (250.526) 114.169.112 262.678.841 279.905.939 743.317.722

transfers - - - - 29.733.155 250.172.784 (279.905.939) -

dividends paid - - - - - (300.000.000) - (300.000.000)

total comprehensive income

- - - 457.721 - - 261.087.272 261.544.993

december 31,2014

53.369.000 39.014.356 (5.569.000) 207.195 143.902.267 212.851.625 261.087.272 704.862.715

Other comprehensive

income or loss items

not to be reclassified

to profit or loss

Paid-in

Share

capital

Adjustment

to share

capital

Merger

reserve

Actuarial gain/ (loss)

fund arising from

benefit plans

Restricted

reserves

allocated

from profit

Retained

earnings

Net profit for

the period

Total

shareholders’

equity

As of January

1, 2013 -

previously

reported

53.369.000 39.014.356 (5.569.000) - 94.435.957 214.342.169 268.197.615 663.790.097

Change in

accounting

policies (2.2)

- - - 127.788 - (68.377) (59.411) -

As of January 1,

2013 - restated53.369.000 39.014.356 (5.569.000) 127.788 94.435.957 214.273.792 268.138.204 663.790.097

Transfers - - - - 19.733.155 248.405.049 (268.138.204) -

Dividends paid - - - - - (200.000.000) - (200.000.000)

Total

comprehensive

income/

(expense)

- - - (378.314) - - 279.905.939 279.527.625

December 31,

201353.369.000 39.014.356 (5.569.000) (250.526) 114.169.112 262.678.841 279.905.939 743.317.722


curr ent p er iod audited 2014

prior p er iod audited 2013

notes 2014 2013

a.cash floWs from operating activities (15.873.835) (26.439.655)

net profit for the period 261.087.272 279.905.939

adjustments to reconcile net income 112.224.667 36.229.873

Amortization and depreciation 16 34.062.179 24.626.643

Provision for impairment on inventories 6 1.441.643 5.748.166

Provision for employee termination benefits 11 (437.936) 8.461.689

Provision for doubtful receivables 17 - 5.169.012

Expense accruals 10.223.593 5.983.439

Interest income and expense 18, 19 31.619.562 1.623.477

Tax expense 20 32.359.613 40.348.632

Gain/ loss from sales of property plant and equipment (1.690.971) (198.766)

Foreign exchange change effect 4.646.984 (55.532.419)

changes in working capital (8.903.777) (87.569.240)

Change in trade receivables (77.647.217) (44.901.578)

Change in due from related parties (20.298.504) 16.791.744

Change in inventories (25.311.783) (116.466.685)

Change in other current assets (48.094.093) 1.739.440

Change in other receivables (2.317) (16.864)

Change in prepaid expenses 14.812.347 (19.984.106)

Change in due to related parties 15.517.588 11.881.392

Change in trade payables 127.576.834 67.166.685

Change in deferred income 87.335 (3.306.031)

Change in other liabilities 4.070.726 2.784.982

Change in short term provision for employee termination benefits 509.111 263.512

Change in payables for employee termination benefits 5.315.141 (1.018.415)

Employee termination benefits paid 11 (5.438.945) (2.503.316)

net cash provided by operating activities 364.408.162 228.566.572

Dividends paid 13 (300.000.000) (200.000.000)

Interest paid (39.099.280) (12.622.878)

Interest received 9.023.894 8.832.078

Tax paid (50.206.611) (51.215.427)

126 127

TürkTraktör, 2014 Annual ReportSTATEMENTS OF CASH FLOWS FOR THE YEAR ENDED AT DECEMBER 31, 2014(Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated.)

EXPLANATORY NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED AT DECEMBER 31, 2014(Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated.)

NOTE 1 - ORGANIZATION AND NATURE OF OPERATIONSTürk Traktör ve Ziraat Makineleri A.Ş. (the “Company”) was established in 1954 in Ankara, as Minneapolis Moline Türk Traktör ve Ziraat Makineleri A.Ş. to undertake the manufac-turing and trade of farm tractors, harvesters and other agri-cultural machinery and equipment. The name of the Com-pany was changed as Türk Traktör Ziraat Makineleri A.Ş. in 1968 upon the purchase of 25% of the shares held by Ege Makina ve Ticaret A.Ş., a group company of the Koç Holding A.Ş. (“Koç Holding”). As of December 31, 2014, major share-holders of the Company are Koç Holding and CNHI Oster-reich GmbH (“CNHI Osterreich”) (Note 13). The number of personnel working within the Company as of December 31, 2014 is 3.040 (Permanent: 2.572, temporary: 468) (2013: 2.572 (Permanent 2.206, temporary 366)).

The Company conducts marketing and selling activities in the domestic market, through its 136 sales dealers, 96 spare part dealers and 10 construction equipment dealers (2013: 129 sales dealers, 95 spare part dealers).

The Company signed an import and distribution agree-ment providing after-sales services for activities such as do-mestic oriented sales and marketing for CNHI International SA, New Holland and Case branded imported construction equipment.

The Company is registered in Turkey in the following ad-dress:

Güvercin Yolu No: 111-11206560 - Gazi AnkaraAs of December 31, 2014, the free float of the Company

whose shares are traded in the Borsa Istanbul (“BIST”) is 24,77% (2013: 24,66%) (Note 13).

NOTE 2 - BASIS OF PRESENTATION OF FINANCIAL STATEMENTS2.1. Basis of presentationThe main accounting policies used for preparing the Compa-ny’s financial statements are stated below:

Principles governing the preparation of financial statements The financial statements and disclosures have been prepared in accordance with the communiqué numbered II-14,1 “Communiqué on the Principles of Financial Reporting In Capital Markets” (the Communiqué) announced by the Capital Markets Board (“CMB”) (hereinafter will be referred to as “the CMB Accounting Standards”) on June 13, 2013 which is published on Official Gazette numbered 28676. In accordance with article 5th of the CMB Accounting Standards, companies should apply Turkish Accounting Standards/ Turkish Financial Reporting Standards (“TAS/ TFRS”) and interpretations regarding these standards as adopted by the Public Oversight Accounting and Auditing Standards Authority (“POA”).

According to decision which was made by CMB on March 17, 2005, from the date of January 1, 2005 there is no need for inflation accounting application for the listed companies performing in Turkey. The Company has prepared the financial statements according to this decision. Functional

curr ent p er iod audited 2014

prior p er iod audited 2013

notes 2014 2013

b. cash floWs from investing activities (228.384.117) (172.973.814)

Proceeds from sales of property, plant and equipment and intangible assets 3.126.226 1.247.282

Payments for purchases of property, plant and equipment and intangible assets (231.922.734) (175.773.794)

Proceeds from government grants 412.391 1.552.698

c. cash floWs from financing activities 306.581.636 6.856.433

Proceeds from bank borrowings 759.996.287 478.510.949

Repayment of bank borrowings (453.414.651) (471.654.516)

net increase/ (decrease) in cash and cash equivalents before currency translation differences (a+b+c)

62.323.684 (192.557.036)

d. currency translation differences (net) (2.726.062) 25.335.514

net increase/ (decrease) in cash and cash equivalents (a+b+c+d) 59.597.622 (167.221.522)

e. cash and cash equivalents at the beginning of the period 3 208.997.296 376.218.818

cash and cash equivalents at the end of the period (a+b+c+d+e) 3 268.594.918 208.997.296


and representative currency of the Company is TL.The financial statements for the year ended at December

31, 2014 are based on the statutory records, with adjustments and reclassifications for the purpose of fair presentation in accordance with the Accounting Standards of the POA. Such adjustments are mainly composed of deferred tax, retirement pay liability calculation, economic life and pro-rata depreciation implementation of fixed assets depreciation, the recognition of a provision, evaluation of doubtful receivables and the rediscount of trade receivables and payables.

2.2 Comparatives and restatement of prior periods’ financial statementsTo allow for the detection of financial position and perfor-mance trends, the financial statements of the Company for the current period are prepared comparatively with the pre-vious period. To ensure compliance with the presentation of the financial statements for the current period, comparative information may be reclassified when necessary.

Pursuant to the decree taken in the CMB’s meeting dated June 7, 2013 and numbered 20/670, for capital market board institutions within the scope of the Communiqué on Princi-ples Regarding Financial Reporting in the Capital Market, fi-nancial statement templates and a user guide have been pub-lished, effective as of the interim periods ended after March 31, 2013. Various classifications were made in the Company’s statement of financial position pursuant to these formats which have taken effect.

The sole classification made in the statement of financial position of the Company as of December 31, 2013 is as fol-lows:- Retirement liability pay interest cost amounting to TL 430.396 previously classified in the cost of sales account group has been classified under financial expenses.

2.3. Changes in TFRSThe accounting policies adopted in preparation of the finan-cial statements as at December 31, 2014 are consistent with those of the previous financial year, except for the adoption of new and amended TFRS and TFRIC interpretations effec-tive as of January 1, 2014. The effects of these standards and interpretations on the Company’s financial position and per-formance have been disclosed in the related paragraphs.

i) The new standards, amendments and interpretations which are effective as at January 1, 2014 are as follows

TAS 32 Financial Instruments: Presentation - Offsetting Finan-cial Assets and Financial liabilities (Amended)The amendments clarify the meaning of “currently has a le-gally enforceable right to set-off” and also clarify the applica-tion of the TAS 32 offsetting criteria to settlement systems (such as central clearing house systems) which apply gross settlement mechanisms that are not simultaneous. These amendments did not have an impact on the financial state-ments of the Company.

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TAS 16 Property, Plant and Equipment and TAS 41 Agriculture (Amended) – Bearer PlantsTAS 16 is amended to provide guidance that bearer plants, such as grape vines, rubber trees and oil palms should be ac-counted for in the same way as property, plant and equip-ment in TAS 16. Once a bearer plant is mature, apart from bearing produce, its biological transformation is no longer significant in generating future economic benefits. The only significant future economic benefits it generates come from the agricultural produce that it creates. Because their opera-tion is similar to that of manufacturing, either the cost model or revaluation model should be applied. The produce grow-ing on bearer plants will remain within the scope of TAS 41, measured at fair value less costs to sell. Entities are required to apply the amendments for annual periods beginning on or after 1 January 2016. Earlier application is permitted. The amendment is not applicable for the Company and will not have an impact on the financial position or performance of the Company.

Annual Improvements to TAS/TFRSsOn September 2014, Public Oversight Authority (POA) has issued the below amendments to the standards in relation to “Annual Improvements - 2010–2012 Cycle” and “Annual Im-provements - 2011–2013 Cycle. The changes are effective for annual reporting periods beginning on or after July 1 2014.

Annual Improvements - 2010–2012 Cycle

IFRS 2 Share-based Payment:Definitions relating to vesting conditions have changed and performance condition and service condition are defined in order to clarify various issues. The amendment is effective prospectively.

IFRS 3 Business CombinationsContingent consideration in a business acquisition that is not classified as equity is subsequently measured at fair value through profit or loss whether or not it falls within the scope of IFRS 9 Financial Instruments. The amendment is effec-tive for business combinations prospectively.

IFRS 8 Operating SegmentsThe changes are as follows: i) Operating segments may be combined/aggregated if they are consistent with the core principle of the standard. ii) The reconciliation of segment assets to total assets is only required to be disclosed if the rec-onciliation is reported to the chief operating decision maker. The amendments are effective retrospectively.

IAS 16 Property, Plant and Equipment and IAS 38 Intangible AssetsThe amendment to IAS 16.35(a) and IAS 38.80(a) clarifies that revaluation can be performed, as follows:i) Adjust the gross carrying amount of the asset to market val-

ue or ii) determine the market value of the carrying amount and adjust the gross carrying amount proportionately so that the resulting carrying amount equals the market value. The amendment is effective retrospectively.

IAS 24 Related Party DisclosuresThe amendment clarifies that a management entity – an en-tity that provides key management personnel services – is a related party subject to the related party disclosures. The amendment is effective retrospectively.

Annual Improvements – 2011–2013 CycleTFRS 3 Business CombinationsThe amendment clarifies that: i) Joint arrangements are out-side the scope of TFRS 3, not just joint ventures ii) The scope exception applies only to the accounting in the financial statements of the joint arrangement itself. The amendment is effective prospectively.

IFRS 13 Amendment to the Basis for Conclusions on TFRS 13 Fair Value MeasurementThe portfolio exception in TFRS 13 can be applied to fi-nancial assets, financial liabilities and other contracts. The amendment is effective prospectively.

TAS 40 Investment PropertyThe amendment clarifies the interrelationship of TFRS 3 and TAS 40 when classifying property as investment property or owner-occupied property. The amendment is effective pro-spectively.

The Company does not expect that these amendments will have significant impact on the financial position or per-formance of the Company.

The new standards, amendments and interpretations that are issued by the International Accounting Standards Board (IASB) but not issued by Public Oversight Authority (POA)

The following standards, interpretations and amend-ments to existing IFRS standards are issued by the IASB but not yet effective up to the date of issuance of the financial statements. However, these standards, interpretations and amendments to existing IFRS standards are not yet adapted/issued by the POA, thus they do not constitute part of TFRS. The Company will make the necessary changes to its finan-cial statements after the new standards and interpretations are issued and become effective under TFRS.

Annual Improvements – 2010–2012 CycleIFRS 13 Fair Value MeasurementAs clarified in the Basis for Conclusions short-term receiva-bles and payables with no stated interest rates can be held at invoice amounts when the effect of discounting is immateri-al. The amendment is effective immediately.

TFRS Interpretation 21 LeviesThe interpretation clarifies that an entity recognizes a liabili-ty for a levy when the activity that triggers payment, as iden-tified by the relevant legislation, occurs. It also clarifies that a levy liability is accrued progressively only if the activity that triggers payment occurs over a period of time, in accordance with the relevant legislation. For a levy that is triggered upon reaching a minimum threshold, the interpretation clarifies that no liability should be recognized before the specified minimum threshold is reached. The interpretation is not ap-plicable for the Company and did not have any impact on the financial position or performance of the Company.

TAS 36 Impairment of Assets- Recoverable Amount Disclosures for Non-Financial assets (Amended)As a consequential amendment to TFRS 13 Fair Value Meas-urement, some of the disclosure requirements in TAS 36 Impairment of Assets regarding measurement of the recov-erable amount of impaired assets has been modified. The amendments required additional disclosures about the meas-urement of impaired assets (or a group of assets) with a re-coverable amount based on fair value less costs of disposal. These amendments did not have an impact on the financial statements of the Company.

TAS 39 Financial Instruments: Recognition and Measurement (Amended)- Novation of Derivatives and Continuation of Hedge AccountingAmendments provides a narrow exception to the require-ment for the discontinuation of hedge accounting in circum-stances when a hedging instrument is required to be novated to a central counterparty as a result of laws or regulations. These amendments did not have an impact on the financial statements of the Company.

TFRS 10 Consolidated Financial Statements (Amended)TFRS 10 is amended to provide an exception to the consoli-dation requirement for entities that meet the definition of an investment entity. The exception to consolidation requires investment entities to account for subsidiaries at fair value through profit or loss in accordance with TFRS. This amend-ment does not have any impact on the financial position or performance of the Company.

ii) Standards issued but not yet effective and not early adopted

Standards, interpretations and amendments to existing standards that are issued but not yet effective up to the date of issuance of the financial statements are as follows. The Company will make the necessary changes if not indicated otherwise, which will be affecting the financial statements and disclosures, when the new standards and interpretations become effective.


TFRS 9 Financial Instruments – Classification and measurementAs amended in December 2012, the new standard is effec-tive for annual periods beginning on or after 1 January 2015. Phase 1 of this new TFRS introduces new requirements for classifying and measuring financial instruments. The amendments made to TFRS 9 will mainly affect the classi-fication and measurement of financial assets and measure-ment of fair value option (FVO) liabilities and requires that the change in fair value of a FVO financial liability attribut-able to credit risk is presented under other comprehensive income. The Company will quantify the effect in conjunction with the other phases, when the final standard including all phases is adopted by POA.

TAS 19 Defined Benefit Plans: Employee Contributions (Amended)TAS 19 requires an entity to consider contributions from em-ployees or third parties when accounting for defined benefit plans. The amendments clarify that, if the amount of the con-tributions is independent of the number of years of service, an entity is permitted to recognise such contributions as a re-duction in the service cost in the period in which the service is rendered, instead of allocating the contributions to the pe-riods of service. These amendments are to be retrospectively applied for annual periods beginning on or after 1 July 2014. The amendments will not have an impact on the financial position or performance of the Company.

TFRS 11 Acquisition of an Interest in a Joint Operation (Amended)TFRS 11 is amended to provide guidance on the accounting for acquisitions of interests in joint operations in which the activity constitutes a business. This amendment requires the acquirer of an interest in a joint operation in which the ac-tivity constitutes a business, as defined in TFRS 3 Business Combinations, to apply all of the principles on business com-binations accounting in TFRS 3 and other TFRSs except for those principles that conflict with the guidance in this TFRS. In addition, the acquirer shall disclose the information re-quired by TFRS 3 and other TFRSs for business combina-tions. These amendments are to be applied prospectively for annual periods beginning on or after 1 January 2016. Earlier application is permitted. The amendments will not have an impact on the financial position or performance of the Com-pany.

TAS 16 and TAS 38 - Clarification of Acceptable Methods of Depreciation and Amortisation (Amendments to TAS 16 and TAS 38)The amendments to TAS 16 and TAS 38, have prohibited the use of revenue-based depreciation for property, plant and equipment and significantly limiting the use of reve-nue-based amortisation for intangible assets. The amend-ments are effective prospectively for annual periods be-ginning on or after 1 January 2016. Earlier application is permitted. The amendments will not have an impact on the financial position or performance of the Company.

NOTE 2 - BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (CONTINuEd) NOTE 2 - BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (CONTINuEd)

130 131

TürkTraktör, 2014 Annual ReportEXPLANATORY NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED AT DECEMBER 31, 2014(Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated.)

Annual Improvements – 2011–2013 CycleIFRS 15 Revenue from Contracts with CustomersIn May 2014, the IASB issued IFRS 15 Revenue from Con-tracts with Customers. The new five-step model in the stand-ard provides the recognition and measurement requirements of revenue. The standard applies to revenue from contracts with customers and provides a model for the sale of some non-financial assets that are not an output of the entity’s or-dinary activities (e.g., the sale of property, plant and equip-ment or intangibles). IFRS 15 is effective for reporting peri-ods beginning on or after 1 January 2017, with early adoption permitted. Entities will transition to the new standard fol-lowing either a full retrospective approach or a modified ret-rospective approach. The modified retrospective approach would allow the standard to be applied beginning with the current period, with no restatement of the comparative pe-riods, but additional disclosures are required. The Company is in the process of assessing the impact of the standard on financial position or performance of the Company.

IFRS 9 Financial Instruments - Final standard (2014)In July 2014 the IASB published the final version of IFRS 9 Financial Instruments. The final version of IFRS 9 brings to-gether the classification and measurement, impairment and hedge accounting phases of the IASB’s project to replace IAS 39 Financial Instruments: Recognition and Measurement. IFRS 9 is built on a logical, single classification and measure-ment approach for financial assets that reflects the business model in which they are managed and their cash flow charac-teristics. Built upon this is a forward-looking expected credit loss model that will result in more timely recognition of loan losses and is a single model that is applicable to all financial instruments subject to impairment accounting. In addition, IFRS 9 addresses the so-called ‘own credit’ issue, whereby banks and others book gains through profit or loss as a re-sult of the value of their own debt falling due to a decrease in credit worthiness when they have elected to measure that debt at fair value. The Standard also includes an improved hedge accounting model to better link the economics of risk management with its accounting treatment. IFRS 9 is effec-tive for annual periods beginning on or after 1 January 2018. However, the Standard is available for early application. In addition, the own credit changes can be early applied in iso-lation witho ut otherwise changing the accounting for financial instruments. The Company is in the process of as-sessing the impact of the standard on financial position or performance of the Company.

IAS 27 Equity Method in Separate Financial Statements (Amendments to IAS 27)In August 2014, IASB issued an amendment to IAS 27 to restore the option to use the equity method to account for investments in subsidiaries and associates in an entity’s sep-arate financial statements. Therefore, an entity must account for these investments either:

• At cost • In accordance with IFRS 9 (or IAS 39), Or • Using the equity method

The entity must apply the same accounting for each cate-gory of investments. The amendment is effective for annual periods beginning on or after 1 January 2016. The amend-ments must be applied retrospectively. Early application is permitted and must be disclosed. The Company is in the pro-cess of assessing the impact of the standard on financial po-sition or performance of the Company or the amendment is not applicable for the Company and will not have an impact on the financial position or performance of the Company.

Annual Improvements to IFRSs - 2012-2014 Cycle In September 2014, IASB issued their annual cycle of im-provements to IFRSs, Annual Improvements to IFRSs 2012-2014 Cycle. The document sets out five amendments to four standards, excluding those standards that are consequential-ly amended, and the related Basis for Conclusions. The stand-ards affected and the subjects of the amendments are: • IFRS 5 Non-current Assets Held for Sale and Discontinued Operations – changes in methods of disposal • IFRS 7 Financial Instruments: Disclosures – servicing con-tracts; applicability of the amendments to IFRS 7 to con-densed interim financial statements • IAS 19 Employee Benefits – regional market issue regarding discount rate • IAS 34 Interim Financial Reporting – disclosure of infor-mation ‘elsewhere in the interim financial report’

The amendments are effective for annual periods begin-ning on or after 1 January 2016, with earlier application per-mitted. . The Company is in the process of assessing the im-pact of the amendments on financial position or performance of the Company.

FRS 10 and IAS 28: Sale or Contribution of Assets between an Investor and its Associate or Joint Venture (Amended)In September 2014, IASB issued amendments to IFRS 10 and IAS 28, to address the acknowledged inconsistency between the requirements in IFRS 10 and IAS 28 in dealing with the loss of control of a subsidiary that is contributed to an associ-ate or a joint venture, to clarify that an investor recognises a full gain or loss on the sale or contribution of assets that con-stitute a business, as defined in IFRS 3, between an investor and its associate or joint venture. The gain or loss resulting from the re-measurement at fair value of an investment re-tained in a former subsidiary should be recognised only to the extent of unrelated investors’ interests in that former subsidiary. An entity shall apply those amendments prospec-tively to transactions occurring in annual periods beginning on or after 1 January 2016. Earlier application is permitted. The Company is in the process of assessing the impact of the standard on financial position or performance of the Compa-ny. or The amendment is not applicable for the Company and

will not have an impact on the financial position or perfor-mance of the Company.

IFRS 10, IFRS 12 and IAS 28: Investment Entities: Applying the Consolidation Exception (Amendments to IFRS 10 and IAS 28)In December 2014, IASB issued amendments to IFRS 10, IFRS 12 and IAS 28, to address the issues that have arisen in applying the investment entities exception under IFRS 10 Consolidated Financial Statements. The amendments are ap-plicable for annual periods beginning on or after 1 January 2016. Earlier application is permitted. The amendment is not applicable for the Company and will not have an impact on the financial position or performance of the Company.

IAS 1: Disclosure Initiative (Amendments to IAS 1) In December 2014, IASB issued amendments to IAS 1. Those amendments include narrow-focus improvements in the fol-lowing five areas: Materiality, Disaggregation and subtotals, Notes structure, Disclosure of accounting policies, Presenta-tion of items of other comprehensive income (OCI) arising from equity accounted investments. The amendments are applicable for annual periods beginning on or after 1 January 2016. Earlier application is permitted. These amendments are not expected have significant impact on the notes to the financial statements of the Company.

2.4. Summary of significant accounting policiesThe principal accounting policies, consistently applied with prior years, adopted in the preparation of these financial statements are set out below:

Cash and cash equivalentsCash and cash equivalents includes cash in hand, deposits held with banks, other short-term highly liquid investments with original maturities of three months or less (Note 3). De-posits with Turkish lira is recognised with cost, foreign cur-rency deposits are translated into Turkish lira by using of the buying exchange rate of the Central Bank of the Republic of Turkey. Time deposits include interest accrued as of balance sheet date.

Recognition of incomeSales is recorded on the basis of accrual over the fair value of the amount received or receivable when product is deliv-ered or services are rendered, the transfers of the risks and benefits related to the product have been made, the amount of income can be determined reliably and it is probable that economic benefits related to the transaction will flow to the Company. Net sales are calculated by deducting the estimat-ed or realized returns and discounts over the sales of prod-ucts. Sales taxes such as VAT and SCT are not included in revenue (Note 14).

Other revenues such as interest income is recognised on an accrual basis using the effective interest rate method, rent income under operating lease agreements is recognised on

an accrual basis and dividend income is recognised when the right to receive dividend is established.

InventoriesInventories are valued at the lower of cost or net realisable value. Net realisable value is the estimated selling price, less the costs of completion and selling expenses (Note 6). Cost el-ements included in inventories comprise total purchase costs and other costs incurred in bringing the inventories to their present location and condition. The unit cost of inventories is determined on the weighted average basis.

Prepaid expensesPrepaid expenses are the amounts generally made to suppliers and which will be transferred to expense and cost accounts in the following period or periods.

Property, plant and equipmentProperty, plant and equipment acquired before January 1, 2005 are carried at cost in purchasing power of TL as at De-cember 31, 2004 less accumulated depreciation and impair-ment losses. Property, plant and equipment acquired after January 1, 2005 are carried at cost less accumulated depre-ciation and impairment losses. Depreciation is provided on a straight-line basis based on the estimated useful lives of the assets (Note 7). Land is not depreciated as it is deemed to have an indefinite life.

The estimated useful lives for property, plant and equip-ment are as follows:

use ful l i ves

Buildings 25-50 years

Land Improvements 10-25 years

Machinery and Equipment 4-10 years

Motor Vehicles 4-5 years

Furniture and Fixtures 5-6 years

Special Costs 4-10 years

An impairment loss is recognised for the amount by which the carrying amount of the asset exceeds its recoverable amount. Gain or losses on disposals of property, plant and equipment with respect to their restated net book values are included in the related income and expense accounts.

Repair and maintenance expenditures are charged to the income statement as they are incurred. Repair and mainte-nance expenditures are capitalised if they result in an en-largement or substantial improvement of the respective assets and depreciated over remaining useful life of related asset.

Intangible fixed assetsIntangible fixed assets comprise of rights and computer soft-ware. Those acquired before January 1, 2005 are carried at


132 133


cost in the purchasing power of TL as at December 31, 2004; less accumulated depreciation and impairment losses. Those acquired after January 1, 2005 are carried at cost less accu-mulated depreciation and impairment losses and are depre-ciated using the straight-line method over their useful lives of four and five years following the acquisition date. Where impairment indicator exists, the carrying amount of any in-tangible asset is assessed and written down to its recoverable amount (Note 8).

Impairment of assetsProperty, plant and equipment and other non-current assets including intangible assets, except deferred tax assets, are reviewed for impairment losses at each balance sheet date whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impair-ment loss is recognised for the amount by which the carrying amount of the asset or any cash generating unit of that asset exceeds its recoverable amount which is the higher of an as-set’s net selling price and value in use. Impairment losses are accounted for in the statement of income.

Impairment loss on assets can be reversed to the extent of previously recorded impairment losses, in cases where in-creases in the recoverable value of the asset can be associated with events that occur subsequent to the period when the im-pairment loss was recorded.

Segment reportingAs the Company operates only in production and trade of agricultural machinery and equipment, in Turkey, segment reporting of the financial information is not disclosed.

Financial assetsFinancial assets are classified in accordance with the intention at acquisition. Company management determines appropriate classification of its investments at the time of purchase and re-evaluates these classifications in each financial year-end.

ReceivablesReceivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active mar-ket. They arise when the Company provides money, goods or services directly to a debtor with no intention of trading the receivable. They are included in current assets, except for ma-turities greater than 12 months after the balance sheet date which are classified as non-current assets. Receivables are in-cluded in trade and other receivables in the balance sheet. Re-ceivables are recognised initially at the proceeds received, net of any transaction costs incurred. In subsequent periods, re-ceivables are stated at amortised cost using the effective yield method. Maturity differences related to trade receivables are presented in other income/expense from main operations (Note 5, Note 17).

Impairment of receivablesA risk provision for trade receivables is established if there is objective evidence that the Company will not be able to collect all amounts due. The amount of the provision is the difference between the carrying amount and the recoverable amount, being the present value of all cash flows, including amounts recoverable from guarantees and collateral, dis-counted based on the original effective interest rate of the originated receivables at inception.

If the amount of the impairment subsequently decreases due to an event occurring after the write-down, the release of the provision is credited to other income.

Trade payablesIn subsequent periods, payables are stated at amortised cost using the effective yield method. Maturity differences and foreign exchange gains/ losses related to trade payables are presented in other income/expense from main operations (Note 5, Note 17).

BorrowingsBorrowings consist of bank loans taken from different banks. Loans are recorded at the value after the transaction costs are deducted from the amount of the loan. Bank loans are pre-sented over the discounted cost value by using the effective interest rate in the subsequent periods. The difference be-tween the amount remaining after the transaction costs are deducted and the discounted cost value is reflected in the fi-nancial statements as financing costs during the period of the loan (Note 19). When there are assets which take a significant amount of time to be available for use or sale, the borrowing costs directly attributable to their purchase, manufacture or production are included in the cost of the asset until the as-set is available for use or sale. Borrowing costs include other costs borne according to the interest and the borrowing (Note 4, Note 19).

Recognition and derecognition of financial assets and liabilitiesThe Company reflects financial asset or liability reflects the balance sheet when the Company becomes a part of financial instrument agreement. The Company derecognises a part of all financial instruments, only if the Company loses controls rights over the related financial asset. The Company derec-ognise a financial instrument if only when obligation is re-moved, cancelled or expired.

All financial instruments are reflected to the financial statements at the commitment date of sales or purchase. Re-lated sales and purchases are generally transactions required delivery of financial assets, regulated by the regulation and forms in the market within the time allowed.

OffsettingFinancial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforce-able right to set off the recognised amounts and there is an

intention to settle on a net basis, or realise the asset and settle the liability simultaneously.

Related Parties(a) A person or a close member of that person’s family is relat-ed to a reporting entity if that person: (i) has control or joint control over the reporting entity; (ii) has significant influence over the reporting entity; or (iii) is a member of the key management personnel of the re-porting entity or of a parent of the reporting entity. (b) The entity and the reporting entity are members of the same group (which means that each parent, subsidiary and fel-low subsidiary is related to the others). (i) The entity and the company are members of the same group. (ii) One entity is an associate or joint venture of the other en-tity (or an associate or joint venture of a member of a group of which the other entity is a member). (iii) Both entities are joint ventures of the same third party. (iv) One entity is a joint venture of a third entity and the other entity is an associate of the third entity. (v) The entity is a post-employment benefit plan for the ben-efit of employees of either the reporting entity or an entity related to the reporting entity. If the reporting entity is itself such a plan, the sponsoring employers are also related to the reporting entity. (vi) The entity is controlled or jointly controlled by a person identified in (a). (vii) A person identified in (a) (i) has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the entity).

For the purpose of these financial statements, shareholders, associated entities, key management personnel and Board of Directors members, in each case together with their families and companies controlled or affiliated with them are consid-ered and referred to as related parties. As a result of ordinary business operations, the Company may have business rela-tions with the related parties.

Foreign currency transactions and balancesTransactions in foreign currencies during the period have been translated into TL at the exchange rates prevailing at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies have been translated into TL at the exchange rates prevailing at the balance sheet dates. Foreign exchange gains or losses arising from the settlement of such transactions and from the translation of monetary as-sets and liabilities are recognised in the statement of income. Non-monetary assets and liabilities, which are recognised at fair value, have been translated into TL at the exchange rates prevailing at the dates of fair value determined. Currency dif-ferences arising from trade receivables and payables related to main operations are shown in from operating income/ expens-es (Note 17).

Earnings per shareEarnings per share disclosed in the statements of income are determined by dividing net income for the period by the weighted average number of shares that have been outstand-ing during the period (Note 21).

In Turkey, companies can increase their share capital by making a pro-rata distribution of shares (“bonus shares”) to existing shareholders from retained earnings and revaluation surplus. For the purpose of earnings per share computations, the weighted average number of shares outstanding during the period has been adjusted in respect of bonus shares issues without a corresponding change in resources, by giving them retroactive effect for the year in which they were issued and for each earlier year.

Subsequent eventsEvents after the balance sheet date are those events, even if those events occur after the public announcement of profit or of other selected financial information, that occur between the balance sheet date and the date when the financial state-ments are authorised for issue. The Company adjusts the amounts recognized in its financial statements to reflect ad-justing events after the balance sheet date. The events that occur subsequent to the balance sheet date and not require a correction to be made are disclosed in accompanying notes, where the decisions of the users of financial statements are affected.

Provisions, contingent assets and contingent liabilitiesPossible assets or obligations that arise from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company are treated as contingent assets or liabilities. The Company does not recog-nize contingent assets and liabilities. A contingent liability is disclosed, unless the possibility of an outflow of resources embodying economic benefits is remote. A contingent asset is disclosed, where an inflow of economic benefits is probable (Note 11).

Provisions are recognised when the Company has a pres-ent legal or constructive obligation as a result of past events; it is more likely than not that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated. Where there are a number of similar obli-gations, the likelihood that an outflow will be required in set-tlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small. Provisions are not recog-nised for future operating losses.



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In cases where the time value of money is material, pro-visions are determined as the present value of expenses re-quired to be made to honor the liability. The rate used to dis-count provisions to their present values is determined taking into account the interest rate in the related markets and the risk associated with the liability. This discount rate does not consider risks associated with future cash flow estimates and should be pre-tax.

LeasesThe Company - as the lessee

Financial LeasesFinance leases are capitalized at the inception of the lease at the lower of the fair value of the leased property or the pres-ent value of the minimum lease payments. Each lease pay-ment is allocated between the liability and finance charges so as to achieve a constant rate on the finance balance outstand-ing. The corresponding rental obligations, net of finance charges, are included in other liabilities and reduced as they are paid. The interest element of the finance cost is charged to the statement of income over the lease period. The prop-erty, plant and equipment acquired under finance leases are depreciated over the useful life of the asset (Note 7).

Operating LeasesLeases where a significant portion of the risks and rewards of ownership are retained by the lessor are classified as op-erating leases. Payments made under operating leases are charged to the income statement on a straight-line basis over the period of the lease.

Research and development expensesResearch expenditure is recognized as an expense as in-curred (Note 15). Costs incurred on development projects (relating to the design and testing of new or improved prod-ucts) are recognized as intangible assets when the following criteria are fulfilled:• it is technically feasible to complete the intangible asset so that it will be available for use;• management intends to complete the intangible asset and use or sell it;• there is an ability to use or sell the intangible asset;• it can be demonstrated how the intangible asset will gener-ate probable future economic benefits;• adequate technical, financial and other resources to com-plete the development and to use or sell the intangible asset are available; • the expenditure attributable to the intangible asset during its development can be reliably measured.

Other development expenditures that do not meet these criteria are recognized as an expense as incurred. Devel-opment costs previously recognized as an expense are not recognized as an asset in a subsequent period. Capitalised development costs are recorded as intangible assets and am-

ortised from the point at which the asset is ready for use on a straight-line basis over its useful life, not exceeding five years (Note 8).

Development assets are tested for impairment annually, in accordance with IAS 36.

Government grants and aidsAll government grants, including non-monetary government grants followed up at fair values, are taken into account in the financial statements when there is reasonable assurance that the Company will comply with the conditions attaching to it and that the grant will be received or when the grant is actually received by the Company. Government grants shall be recognized in profit or loss on a systematic and pro rata basis over periods in which the entity recognizes as expenses the related costs for which the grants are intended to com-pensate. There are investment incentive certificates to which the Company has been entitled by the official authorities in connection with certain capital expenditures. The Company has two incentives Ankara Modernization and Adapazarı In-vestment as of December 31, 2014.

The rights of the Company due to these incentives are as follows:a) 100% exemption from customs duty on machinery and equipment to be imported,b) Value-added tax exemption with respect to purchases of investment goods both from domestic and export markets,c) Incentives under the jurisdiction of the research and de-velopment law (100% corporate tax exemption, Social Secu-rity Institution incentives, etc.),d) Inward processing permission certificates,e) Cash refund from Tübitak - Teydeb for research and devel-opment expenses,f) Discounted corporate tax incentive,g) Exemption of taxes and funds,h) Incentive of environmental costs support by law 9715,i) Patent incentives,j) Corporate tax exemption based on investment contribu-tion rates.

Taxes on incomeTaxes on income included in statement of income comprise current and deferred tax. Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the balance sheet date, and any adjustment to tax payable in respect of prior years (Note 20).

Deferred income tax is provided for all temporary differences arising between the tax bases of assets and liabilities and their carrying values for financial reporting purposes with the enacted tax rates as of the balance sheet date (Note 20).

Deferred income tax is provided in full, using the liability method, on all temporary differences arising between the tax bases of assets and liabilities and their carrying values in the

financial statements. Tax bases of assets and liabilities reflect the amounts affecting the future tax bases under the current tax legislation. Deferred income tax is determined using tax rates and laws that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

Deferred income tax assets or liabilities are reflected to the financial statements to the extent that they will provide an increase or decrease in the taxes payable for the future periods where the temporary differences will reverse.

Deferred income tax liabilities are recognized for all taxable temporary differences, where deferred tax assets resulting from deductible temporary differences are recognized to the extent that it is probable that future taxable profit will be available against which the deductible temporary difference can be utilised. To the extent that deferred income tax assets will not be utilised, the related amounts have been deducted accordingly.

Deferred tax assets and deferred tax liabilities related to income taxes levied by the same taxation authority are offset accordingly, if current tax assets can be offset against current tax liabilities (Note 20).

Payables related to employee benefitsThese are the amounts payable within the scope of employ-ee benefits such as remunerations, wages and social security contributions. These amounts are reflected in personnel ex-penses in the period when they are accrued.

Provisions related to employee benefitsIn accordance with the laws in effect, the Company is obliged to pay employment termination benefits to employees whose employment is terminated for reasons other than retire-ment, resignation or behavior mentioned in the Labour Law. The provision for employment termination benefits has been calculated reflected in the financial statements according to the net current value of the amount of liabilities expected to arise in the future due to the retirement of all employees. Ac-tuarial loss or gain is recognized under other comprehensive expense. According to employment contract, if employment contract ends for any reason, provision of unused vacation has to be paid to employees or right holders. Provision is calculat-ed based on the employee wage when the contract expired.

Statement of cash flowThe statement of cash flows reports cash flows during the year classified by operating, investing and financing activities.

Cash flows from operating activities are derived from the principal revenue producing activities of the Company.

Cash flows related to investing activities represent cash flows generated from and used in the investing activities (fixed assets and financial investments) of the Company.

Cash flows related to financing activities represent cash flows generated from Company’s financing activities and re-

payment of such generated cash-in flows. Cash and cash equivalents include cash in hand, bank

deposits and other short-term highly liquid investments with original maturities of three months or less.

Share capital and dividendsOrdinary shares are classified as capital. Dividends distrib-uted over ordinary shares are recorded by deducting from retained earnings within the year in which they are declared.

2.5. Significant accounting estimates and decisionsPreparation of the financial statements requires the usage of the estimates and judgements affecting the amounts of the assets and liabilities as of the balance sheet date and the income and expenses recorded through the year and expla-nations of contingent assets and liabilities. Estimations and assumptions can differ from actual results in spite of these estimations and assumptions are based on Company manage-ment’s best knowledge.

The useful life of tangible and intangible assets The Company’s management has made significant assump-tions in determining the useful life of tangible and intangible assets (Note 2.4).

Provision for doubtful receivables Company management reviews customer collection history and their current economic situations in order to provide esti-mates regarding doubtful receivables within Company’s trade receivables portfolio (Note 5).

Provision for employment termination benefits Provisions for retirement payments, discount rate, future salary increases and employee turnover rates are determined by actuarial calculations based on certain assumptions. Due to the long term nature of these plans, such estimates are sub-ject to significant uncertainty (Note 11).

WarrantiesWarranty expenses are recorded as a result of repair and maintenance expenses for products produced and sold, au-thorised services’ labour and material costs for products un-der the scope of the warranty terms without any charge to the customers, initial maintenance costs and estimated costs based on statistical information for possible future warranty services and returns of products with respect to the products sold during the period (Note 11). The Company estimates ra-tio based on statistical information for possible future war-ranty services and returns of products, and calculates pro-vision amount with respect to the products sold during the period. The Company gives guarantee services for each trac-tor sold during two years. The Company reflects estimated cost incurred in one year to short term.



136 137


Provision for lawsuits The Company determines lawsuit provision for ongoing le-gal cases at the preparation date of the Company’s statement of financial position by consulting with Company’s legal counsel on cases that could potentially lead to a cash outflow (Note 11).

Provision for impairement of inventoriesInventory is evaluated at each period in order to determine whether there is a need to have provision for potential im-pairment costs at the date of statement of financial position (Note 7).

Deferred tax assetsDeferred tax assets represent the amounts that are recovera-ble in the future periods which are related to taxes collected over the income as a result of deductible temporary differ-ences, accumulated financial losses transferred into future periods and accumulated tax advantages transferred into

NOTE 4 - FINANCIAL LIABILITIES

a) Short-term financial liabilities

Short-term bank borrowings

original currency amountWeighted average effective

interest rate p.a. (%) tl equivalent

2014 2013 2014 2013 2014 2013

TL bank borrowings 83.859.778 - 8,30 - 83.859.778 -

USD bank borrowings 10.032.699 - 1,78 - 23.264.826 -

EUR bank borrowings 5.141.250 5.006.979 2,92 3,35 14.501.924 14.702.994

121.626.528 14.702.994

Current portion of long term bank borrowings

original currency amountWeighted average effective interest

rate p.a. (%)tl equivalent

2014 2013 2014 2013 2014 2013

EUR bank borrowings 26.459.415 - 2,44 - 74.634.073 -

TL bank borrowings 20.330.000 - 10,79 - 20.330.000 -

94.964.073 -

b) Long-term financial liabilities

Long-term bank borrowings

original currency amountWeighted average effective

interest rate p.a. (%)tl equivalent

2014 2013 2014 2013 2014 2013

EUR bank borrowings 83.705.125 80.092.571 2,44 2,64 236.107.047 235.191.834

TL bank borrowings 207.328.208 100.459.111 10,79 10,83 207.328.209 100.459.111

443.435.256 335.650.945

Prepaid commission for debt (*)

(1.774.319) (1.763.344)

total long-term financi-al liabilities

441.660.937 333.887.601

(*) Prepaid commission for debt consists of unrealized commission expenses paid to bank related to borrowings.

Redemption schedule of the long-term bank borrowings as of December 31, 2014 and 2013 are as follows:

year 2014 2013

2015 - 176.575.101

2016 305.864.380 62.925.000

2017 83.009.171 62.925.000

2018 52.787.386 31.462.500

441.660.937 333.887.601

As of December 31, 2014 the Company has long-term investment loans amounting to EUR 75.000.000 and EUR 20.000.000

NOTE 2 - BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (CONTINuEd)

future periods.Deferred tax asset item cannot be used for amounts which

are not deductible (constant) in terms of tax regulations. The Company has recorded its deferred tax asset as of

December 31, 2014 since it is highly probable that sufficient profit will be made which will cause a tax liability which may be offsetted in the subsequent periods.

2.6. Convenience translation into English of financial state-ments originally issued in TurkishThe accounting principles described in Note 2 (defined as Turkish Accounting Standards/Turkish Financial Reporting Standards) to the accompanying financial statements differ from International Financial Reporting Standards (“IFRS”) issued by the International Accounting Standards Board with respect to the application of inflation accounting, clas-sification of some balance sheet, income statement items and also for certain disclosures requirement of the POA.

NOTE 3 - CASH AND CASH EQUIVALENTS

2014 2013

Cash 1.596 -

banks:

- TL denominated demand deposits 4.403.897 8.200.808

- TL denominated time deposits 144.825.231 132.231.418

- Foreign currency denominated demand deposits 4.959.334 1.787.232

- Foreign currency denominated time deposits 115.038.965 67.103.478

269.229.023 209.322.936

As of December 31, 2014, the weighted average effective annual interest rates for TL and Euro (“EUR”) time deposits are 9,58% and 1,55% (2013: TL: 8,70%, EUR: 2,42%). As of December 31, 2014 and 2013, remaining time to maturity of time deposits is less than three months.

The cash and cash equivalents included in the statement of cash flows at December 31, 2014 and 2013 are as follows:

2014 2013

Banks 269.229.023 209.322.936

Less: Interest accruals (556.637) (35.894)

Less: Restricted bank deposits (*) (77.468) (289.746)

cash and cash equivalents 268.594.918 208.997.296

(*) This account consists of receivables collected via the direct debit system. The blockage on this account is terminated follow-ing the closure of the term.

138 139


(2013: EUR 75.000.000). The EUR 75.000.000 loan’s maturity period is 5 years with an interest payment of every 6 months and with an interest rate of 2.20% + Euribor with no principle payments for the following 2 years. The EUR 20.000.000 loan’s maturity period is 4 years with an interest payment of every 6 months and with an interest rate of 2.20% + Euribor with no principle payments for the following 2 years. In accordance with the agreements signed with respect to the investment loans used by the Company, there is an obligation of not exceeding the below mentioned rate calculated over the financial state-ments prepared in accordance with the Financial Reporting Standards by the Public Oversight Authority:Obligation rate is;• Net financial liability (*) / Earnings before interest, taxes, depreciation and amortization: 3,75.

(*) Net financial liability is calculated by deducting the cash and cash equivalents from total of financial liabilities (includ-ing short term and long term financial debts).

The Company met these conditions as of December 31, 2014.Carrying values and fair values of the bank borrowings are as shown below:

carrying value fair value

2014 2013 2014 2013

Bank borrowings 660.025.857 350.353.939 658.251.538 340.317.920

As of December 31, 2014, fair values of the loans are determined by using the discounted cash flow method over annual average effective discount rates which is 2,61% for EUR loans, 1,78% for USD loans and 10,42% for TL denominated bank borrowings respectively (2013: EUR 3,63% and TL: 12,10%).

NOTE 5 - TRADE RECEIVABLES AND PAYABLES

2014 2013

short-term trade receivables:

Customer current accounts 402.918.762 304.819.369

Notes receivables 1.320.755 16.455.393

Protested notes 617.225 5.163.779

404.856.742 326.438.541

Less: Provision for doubtful receivables (39.866.049) (42.169.877)

Unearned financial income (2.547.893) (2.153.740)

Short-term trade receivables 362.442.800 282.114.924

Due from related parties (Note 22) 98.446.054 80.797.729

total short-term trade receivables 460.888.854 362.912.653

Movements of the provisions for short term doubtful receivables for the years ended December 31, 2014 and 2013 are as shown below:

2014 2013

January 1 (42.169.877) (37.784.114)

Transfer from long term to short term (139.484) (388.187)

Cancelled during the year (Note 17) 2.443.312 1.171.436

Charge during the year (Note 17) - (5.169.012)

december 31 (39.866.049) (42.169.877)

long-term trade receivables:

2014 2013

Notes receivables - 391.920

Less: Provision for doubtful receivables - (139.484)

Unearned financial income - (1.777)

- 250.659

Movements of the provisions for long term doubtful receivables for the years ended December 31, 2014 and 2013 are as shown below:

2014 2013

January 1 (139.484) (527.671)

Transfer from long term to short term 139.484 388.187

december 31 - (139.484)

2014 2013

trade payables:

Supplier current accounts 407.771.045 278.698.990

Less: Unincurred financial expense (3.865.100) (1.955.902)

trade payables 403.905.945 276.743.088

Due to related parties (Note 22) 44.766.757 29.346.571

total trade payables 448.672.702 306.089.659

NOTE 6 - INVENTORIES

2014 2013

Raw materials 197.505.879 151.293.846

Work in progress 3.281.225 4.345.695

Finished goods 57.969.537 45.944.910

Commercial goods 77.897.423 93.471.041

Spare parts 26.636.862 22.048.260

Goods in transit (*) 85.951.535 107.812.377

449.242.461 424.916.129

Provision for impairment of inventory (-) (12.959.214) (11.517.571)

436.283.247 413.398.558

The cost of inventories recognised as expense in the current year, amounted to TL 2.027.175.878 (2013: TL 1.524.046.351).(*) Goods in transit comprised of commercial goods and spare parts are not arrived, but invoices are received as of period

end.

NOTE 4 - FINANCIAL LIABILITIES (CONTINuEd) NOTE 5 - TRAdE RECEIVABLES ANd PAYABLES (CONTINuEd)

140 141


Movement of provision for impairment of inventory during the period is as follows:

2014 2013

January 1 (11.517.571) (5.769.405)

Cancelled due to sales of inventory during the year 1.462.705 2.212.745

Charge during the year for impairment of inventory (2.904.348) (7.960.911)

december 31 (12.959.214) (11.517.571)

Allocation of the provision for impairment on inventories in terms of inventory type is as follows:

2014 2013

Raw materials (9.293.104) (7.595.685)

Commercial goods (2.097.278) (2.544.396)

Spare parts (1.568.832) (1.377.490)

(12.959.214) (11.517.571)

NOTE 7- PROPERTY, PLANT AND EQUIPMENT

January 1, 2014 additions disposals transfers december 31, 2014

cost

Land 34.957.864 2.010.500 (248.164) - 36.720.200

Land improvements 5.967.701 38.717 (75.841) 4.201.099 10.131.676

Buildings 53.297.382 29.801.083 (1.223.080) 149.219.196 231.094.581

Machinery and equipment 409.412.790 58.581.939 (11.439.942) 48.268.497 504.823.284

Special costs 2.712.138 976.488 - - 3.688.626

Motor vehicles 1.915.576 2.163.460 (207.940) - 3.871.096

Furniture and fixtures 36.581.561 10.063.690 (123.984) 8.364.022 54.885.289

Construction in progress 108.180.493 104.153.680 - (210.052.814) 2.281.359

653.025.505 207.789.557 (13.318.951) - 847.496.111

accumulated depreciation

Land improvements 3.584.995 242.288 (54.467) - 3.772.816

Buildings 38.195.591 3.205.848 (352.383) - 41.049.056

Machinery and equipment 309.305.795 17.820.635 (11.378.098) - 315.748.332

Special costs 2.653.578 41.314 - - 2.694.892

Motor vehicles 1.416.890 334.930 (194.540) - 1.557.280

Furniture and fixtures 23.675.359 4.918.154 (74.501) - 28.519.012

378.832.208 26.563.169 (12.053.989) - 393.341.388

net book value 274.193.297 454.154.723

January 1, 2013 Additions Disposals Transfers December 31, 2013

Cost

Land 30.171.026 4.786.838 - - 34.957.864

Land improvements 5.448.242 425.123 - 94.336 5.967.701

Buildings 52.951.936 345.446 - - 53.297.382

Machinery and equipment 379.404.095 12.630.855 (5.781.050) 23.158.890 409.412.790

Special costs 2.705.188 6.950 - - 2.712.138

Motor vehicles 1.906.576 9.000 - - 1.915.576

Furniture and fixtures 31.440.063 4.105.427 (639.532) 1.675.603 36.581.561

Construction in progress 18.201.769 115.232.218 (14.535) (25.238.959) 108.180.493

522.228.895 137.541.857 (6.435.117) (310.130) (*) 653.025.505

Accumulated depreciation

Land improvements 3.344.573 240.422 - - 3.584.995

Buildings 36.651.959 1.543.632 - - 38.195.591

Machinery and equipment 300.372.133 13.694.671 (4.761.009) - 309.305.795

Special costs 2.641.633 11.945 - - 2.653.578

Motor vehicles 1.204.620 212.270 - - 1.416.890

Furniture and fixtures 21.020.832 3.280.119 (625.592) - 23.675.359

365.235.750 18.983.059 (5.386.601) 378.832.208

Net book value 156.993.145 274.193.297

(*) Transferred to intangible assets.For the year ended at December 31, 2014, of the total depreciation expense amounting to TL 26.563.169 (2013: TL

18.983.059), TL 18.959.958 (2013: TL 13.792.439) is allocated to production costs, TL 3.762.675 (2013: TL 2.883.977) is allocated to general administrative expenses, TL 2.609.285 (2013: TL 1.530.037) is allocated to research and development expenses and TL 1.231.251 (2013: TL 776.606) is allocated to marketing, selling and distribution expenses. The depreciation expense amounting to TL 2.297.230 (2013: TL 1.283.912) is capitalized during the year as it is related to the development costs.

The Company has capitalized total TL 7.263.322 financial costs arose from foreign exchange denominated borrowings on construction in progress as of December 31, 2014 (2013: TL 9.505.715).

There is no mortgage on property, plant and equipment as of December 31, 2014 (2013: None).

NOTE 7- PROPERTY, PLANT ANd EQuIPMENT (CONTINuEd)NOTE 6 - INVENTORIES (CONTINuEd)

142 143


NOTE 8 - INTANGIBLE ASSETS


cost

Rights 10.940.879 2.862.848 (170.292) - 13.633.435

Development costs 37.632.894 - - 14.099.155 51.732.049

Development costs in progress 49.875.974 23.567.559 - (14.099.155) 59.344.378

98.449.747 26.430.407 (170.292) - 124.709.862

accumulated amortisation

Rights 6.436.499 1.879.059 - - 8.315.558

Development costs 14.717.042 7.917.181 - - 22.634.223

21.153.541 9.796.240 - - 30.949.781

net book value 77.296.206 93.760.081


cost

Rights 7.955.531 2.675.218 - 310.130 10.940.879

Development costs 27.966.944 269.138 - 9.396.812 37.632.894

Development costs in progress 13.195.578 46.077.208 - (9.396.812) 49.875.974

49.118.053 49.021.564 - 310.130 98.449.747

accumulated amortisation

Rights 5.205.768 1.230.731 - - 6.436.499

Development costs 9.020.277 5.696.765 - - 14.717.042

14.226.045 6.927.496 - - 21.153.541

net book value 34.892.008 77.296.206

Development costs includes intangible assets generated by the Company. Capitalized development costs are recorded as intan-gible assets and amortised from the point at which the asset is ready for use.

The amortisation is not calculated for the development costs in progress as the development process has not yet been com-pleted.

For the year ended at December 31, 2014, of the total amortisation expenses amounting to TL 9.796.240 (2013: TL 6.927.496), TL 1.341.213 (2013: TL 894.207) is allocated to production costs, TL 266.169 (2013: TL 186.977) is allocated to general administrative expenses, TL 8.101.760 (2013: TL 5.795.962) is allocated to research and development expenses and TL 87.098 (2013: TL 50.350) is allocated to marketing, selling and distribution expenses.

NOTE 9 - OTHER ASSETS AND LIABILITIES

2014 2013

a) other current assets:

Deferred value added tax (“VAT”) 72.988.039 59.756.795

Reclaimed VAT 71.660.884 39.648.268

Assets related to prepaid tax 2.796.797 -

Other 311.059 257.623

147.756.779 99.662.686

2014 2013

b) deferred income:

Deferred income (*) 9.311.734 5.600.348

Advances received 2.547.333 5.699.609

other short-term liabilities 11.859.067 11.299.957

(*) Deferred income represents the sales amount of the tractors for which the invoices are issued but are not yet shipped to customers as of December 31, 2014 and 2013.

NOTE 10 - PREPAID EXPENSES

Long-term prepaid expenses

2014 2013

Advances given for fixed assets 832.613 20.260.797

Long-term prepaid expenses 832.613 20.260.797

NOTE 11 - PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

a) Short term provisions

Short term provision for employee benefits

2014 2013

Provision for unused vacation 1.488.479 979.368

1.488.479 979.368

Movements of the provision for unused vacation rights for the years are as follows:

2014 2013

January 1 979.368 715.856

Charge/ (used) for the year, net 509.111 263.512

december 31 1.488.479 979.368

Other short term provisions

2014 2013

Warranty provision 20.609.316 16.908.966

Provision for legal cases (*) 7.343.170 4.097.031

Other provisions (**) 119.312 1.338.564

28.071.798 22.344.561

(*) The balance represents provision for legal cases which were opened against the Company.(**) Includes various expense accruals as of December 31, 2013.

NOTE 9 - OTHER ASSETS ANd LIABILITIES (CONTINuEd)

144 145


Movements of the lawsuit provisions for the period are as follows:

2014 2013

January 1 4.097.031 1.369.143

Charge for the year (Note 17) 3.246.139 2.727.888

december 31 7.343.170 4.097.031

b) Long term provisionsLong term provision for employee benefits

2014 2013

Provision for employee termination benefits 8.986.321 15.435.367

8.986.321 15.435.367

Provision for employee termination benefit is recorded in line with the legal arrangements explained below:Under the Turkish Labour Law, the Company is required to pay termination benefits to each employee who has completed one

year of service and whose employment is terminated without due cause, or who is called up for military service, dies or retires after completing 25 years of service (20 years for women) and achieves the retirement age (58 for women and 60 for men).

The amount payable consists of one month’s salary limited to a maximum of TL 3.438,22 for each year of service as of Decem-ber 31, 2014 (2013: TL 3.254,44).

The liability is not funded, as there is no funding requirement. The provision has been calculated by estimating the present value of the future probable obligation of the Company arising from the retirement of the employees.

Communiqué require actuarial valuation methods to be developed to estimate the enterprises’ obligation under defined ben-efit plans. Accordingly, the following actuarial assumptions were used in the calculation of the total liability:

2014 2013

Inflation rate (%) 4,50 4,50

Discount rate (% 8,16 9,50

Turnover rate to estimate the probability of retirement (%) 93,09 98,52

The principal assumption is that the maximum liability for each year of service will increase in line with inflation. Thus, the discount rate applied represents the expected real rate after adjusting for the anticipated effects of future inflation. The maximum amount of TL 3.541,37 which is effective from January 1, 2015 has been taken into consideration in calculating the provision for employee termination benefits of the Company.

Movements of the provision for employee termination benefits during the period are as follows:

2014 2013

January 1 15.435.367 9.004.102

Interest cost 1.466.360 430.396

Current year service cost (1.904.296) 8.031.293

Paid in the year (5.438.945) (2.503.316)

Actuarial (gain)/loss (572.165) 472.892

december 31 8.986.321 15.435.367

Sensitivity analysis of key assumptions used for termination benefits calculations as at December 31, 2014 are as follows:

Net Discount RateTurnover related to the probability of

retirement

sensitivity level %0,5 decrease %0,5 increase %0,5 decrease %0,5 increase

Rate (%3,0) (%4,0) (%92,59) (%93,59)

Change in employee benefits liability 579.990 (533.049) (592.974) 644.345

Other long term provisions

2014 2013

Warranty provision 20.656.915 16.160.551

20.656.915 16.160.551

Movements of the short term and long term warranty provisions for the years are as follows:

2014 2013

January 1 33.069.517 30.746.095

Used during the year (38.455.529) (37.117.210)

Charge for the year (Note 15) 46.652.243 39.440.632

December 31 41.266.231 33.069.517

c) Contingent liabilitiesThe commitments and contingent liabilities that are not expected to cause material loss or debts to the Company are summa-rized below:As of December 31, 2014 and 2013 the Company’s guarantee/pledge/mortgage positions are as follows:

2014 2013

A. The total amount of collaterals given on behalf of its own legal entity 101.091.071 9.327.007

B. The total amount of collaterals given in favor of the companies in the scope of full consoli-dation

- -

C. The total amount of collaterals given for the purpose of providing debt to third parties in the course of ordinary business activities

- -

D. The total amount of other collaterals given - -

i. The total amount of collaterals given in favor of the parent companies - -

ii. The total amount of collaterals given in favor of other group companies which are not in the scope of items B and C

- -

iii. The total amount of collaterals given in favor of third parties other than the parties stated in item C

- -

101.091.071 9.327.007

As at December 31, 2014, the Company has given in its own legal entity on behalf of the original collateral denominated in foreign currency amounts of EUR 2.676.108 and USD 38.860.836 (2013: EUR 2.676.108).

NOTE 11 - PROVISIONS, CONTINGENT LIABILITIES ANd CONTINGENT ASSETS (CONTINuEd) NOTE 11 - PROVISIONS, CONTINGENT LIABILITIES ANd CONTINGENT ASSETS (CONTINuEd)

146 147


d) Contingent assets

Foreign currency amount TL equivalent

2014 2013

eur usd tl EUR USD TLdecember 31,

2014December 31,

2013

Letters of guarantees received

73.530 270.000 381.193.800 1.569.142 303.000 326.287.850 382.027.310 331.542.328

Direct debit - - 295.670.892 - - 244.616.204 295.670.892 244.616.204

Mortgages - - 788.714 - - 5.452.214 788.714 5.452.214

Security bonds - - 2.500.000 - - 2.722.000 2.500.000 2.722.000

Cash TL guarantees - - 177.530 - - - 177.530 -

Cash foreign currency guarantees

- - - 8.457 - - 18.051

681.164.446 584.350.797

NOTE 12 - PROVISION FOR EMPLOYEE BENEFITS

Liabilities for employee benefits

2014 2013

Taxes payable and liabilities (*) 10.330.249 6.272.971

Accrued premiums and liabilities to personnel 5.943.489 4.685.626

16.273.738 10.958.597

(*) The balance consists of social security and witholding debt for the employees of the Company.

NOTE 13 - SHAREHOLDERS’ EQUITY

Paid-in Share CapitalThe Company’s registered share capital amounts to TL 250.000.000 (2013: TL 250.000.000).

The Company’s share capital is composed of 5.336.900.000 units of shares each Kr 1 nominal value. The nominal value of share capital is TL 53.369.000.The composition of the Company’s statutory share capital at December 31, 2014 and December 31, 2013 are as follows:

2014 2013

participation (%)

share amount (tl)

Participation(%)

Share Amount (TL)

Koç Holding 37,50 20.013.375 37,50 20.013.375

CNHI Osterreich 37,50 20.013.375 37,50 20.013.375

Public quotation in BİST 24,93 13.306.859 24,93 13.306.859

Other 0,07 35.391 0,07 35.391

100,00 53.369.000 100,00 53.369.000

adjustments to share capital 39.014.356 39.014.356

92.383.356 92.383.356

Adjustments to share capital represent the restatement effect of cash and cash equivalent contributions to share capital.The Company’s shares were organized as A, B and C Groups. A and B Group shares are privilege shares, and five Board mem-

bers are selected from Group A’s and five Board members are selected from Group B’s nominated candidates. As of June 11, 2004, the Company has been quoted to BIST and its shares started to be traded in the stock exchange market

from that date. As of 31 December 2014, 24,77% (31 Decem-ber 2013: 24,66%) of the Company shares are quoted at BIST.

Retained earnings, restricted profit reserves, fair value reserves, and other capital reservesThe legal reserves consist of first and second reserves, appro-priated in accordance with the Turkish Commercial Code (“TCC”). The TCC stipulates that the first legal reserve is ap-propriated out of statutory profits at the rate of 5% per annum, until the total reserve reaches 20% of the Company’s paid-in capital. The second legal reserve is appropriated at the rate of 10% per annum of all cash distributions in excess of 5% of the paid-in capital. Under the TCC, the legal reserves can be used only to offset losses and are not available for any other usage unless they exceed 50% of paid-in capital.

In accordance with the CMB regulations effective until 1 January 2008, the inflation adjustment differences arising at the initial application of inflation accounting which are re-corded under “accumulated losses” could be netted off from the profit to be distributed based on CMB profit distribution regulations. In addition, the aforementioned amount recorded under “accumulated losses” could be netted off with net in-come for the period, if any, undistributed prior period prof-its, and inflation adjustment differences of extraordinary re-serves, legal reserves and capital, respectively.

In addition, in accordance with the CMB regulations effec-tive until 1 January 2008, “Capital, Share Premiums, Legal Reserves, Special Reserves and Extraordinary Reserves” were recorded at their statutory carrying amounts and the inflation adjustment differences related to such accounts were recorded under “inflation adjustment differences” at the initial appli-cation of inflation accounting. “Equity inflation adjustment differences” could have been utilised only in issuing bonus shares and offsetting accumulated losses, carrying amount of extraordinary reserves could have been utilised in issuing bonus shares, cash dividend distribution and offsetting accu-mulated losses.

In accordance with the Communiqué No:XI-29 and relat-ed announcements of CMB, effective from 1 January 2008, “Share capital”, “Restricted Reserves” and “Share Premiums” shall be carried at their statutory amounts. The valuation dif-ferences arised due to implementing the communique (such as inflation adjustment differences) shall be disclosed as follows:• if the difference is arising due to the inflation adjustment of “Paid-in Capital” and not yet been transferred to capital should be classified under the “Inflation Adjustment To Share Capital”;• if the difference is due to the inflation adjustment of “Re-stricted Reserves” and “Share Premium” and the amount has not been utilised in dividend distribution or capital increase yet, it shall be classified under “Retained Earnings”,

Other equity items shall be carried at the amounts calculat-ed based on TAS/TFRS.

Capital adjustment differences have no other use other than being transferred to share capital.

NOTE 13 - SHAREHOLdERS’ EQuITY (CONTINuEd)NOTE 11 - PROVISIONS, CONTINGENT LIABILITIES ANd CONTINGENT ASSETS (CONTINuEd)

Dividend DistributionListed companies distribute dividend in accordance with the Communiqué No. II-19.1 issued by the CMB which is effective from 1 February 2014.

Companies distribute dividends in accordance with their dividend payment policies settled and dividend payment de-cision taken in general assembly and also in conformity with relevant legislations. The communiqué does not constitute a minimum dividend rate. Companies distribute dividend in ac-cordance with the method defined in their dividend policy or articles of incorporation. In addition, dividend can be distrib-uted by fixed or variable installments and advance dividend can be paid in accordance with profit on interim financial statements of the Company.

Companies should include at least the following in their profit distribution policies:a) Whether dividends will be distributed, and if distributed, the dividend distribution rate for shareholders and for others participating in the distribution.b) Payment type of dividend distribution. c) Time of dividend distribution; on condition that the distri-bution procedures to be started at the latest of the end of the annual period in which general assembly meeting was held in which the distribution was agreed upon. d) Whether dividend advances will be distributed, and if dis-tributed, the related principles.

In accordance with the Turkish Commercial Code (TCC), unless the required reserves and the dividend for shareholders as determined in the article of association or in the dividend distribution policy of the company are set aside, no decision may be made to set aside other reserves, to transfer profits to the subsequent year or to distribute dividends to the holders of usufruct right certificates, to the members of the board of directors or to the employees; and no dividend can be dis-tributed to these persons unless the determined dividend for shareholders is paid in cash.

In dividend distribution, the Company follows a balanced and consistent policy between the benefits of the sharehold-ers and the benefits of the Company in accordance with the Corporate Management Principles. The Board of Directors of the Company has decided; that at least 20% of the distrib-utable net profit for the period calculated in accordance with the TCC, CMB regulations and the main agreement should be distributed to the shareholders as dividends, taking into consideration the economic conditions, long-term investment financing and business plans as well as profitability; that the dividend to be distributed may be realized in cash or by capi-tal increase through bonus shares or partly in cash and partly through bonus shares; that the calculable dividend amount may remain undistributed in the event that it is less than 5% of the paid-in capital; and that this dividend distribution poli-cy should be revised annually by the Board of Directors.

The part of the of accumulated losses of the Company ex-ceeding the total of retained earnings, general legal reserves including premiums related to shares and costs arising from

148 149


the adjustment of equity items except for capital stock in ac-cordance with inflation accounting is accounted for as dis-count items in the calculation of net distributable profit for the period.

In the statutory financial statements of the Company, in addition to the statutory profit amounting to TL 192.001.097 and retained earnings amounting to TL 252.298.747 for the year ended December 31, 2014; there are inflation adjust-

January 1 - december 31, 2014 January 1 - December 31, 2013

general administrative expenses:

Personnel expenses 13.673.900 11.264.909

Service expenses received from shareholders 9.160.259 5.233.921

Entertainment expenses 4.767.601 1.849.983

Remuneration of key management personnel (Note 22) (*) 4.715.983 4.123.771

Donations and aids 4.400.318 4.156.770

Depreciation and amortisation expenses (Note 7, 8) (***) 4.028.844 3.070.954

Outsourced expenses 3.365.086 1.627.081

Consultancy services 2.467.419 1.033.091

Service expenses 2.197.584 2.882.347

Taxes and other legal expenses 1.583.859 843.081

Transportation and travel expenses 1.211.215 797.040

Insurance expenses 786.700 484.130

Subscription expenses 721.162 662.487

Legal colsultancy and lawsuit expenses 549.645 691.418

Provision for employment termination benefits (Note 11) (**) 235.142 318.346

Other 2.517.677 1.725.165

56.382.394 40.764.494


research and development expenses:

Depreciation and amortisation expenses (Note 7, 8) (***) 8.413.815 6.042.087


Project expenses 883.365 641.300

Outsourced expenses 703.609 310.965


Remuneration of key management personnel (Note 22.v) (*) - 79.393

Other 378.079 516.378

11.928.352 9.225.895

(*) The amount of remuneration of key management personnel allocated to production costs is TL 4.113.581 (2013: TL 2.433.006), and capitalized amount is TL 932.989 (2013: TL 943.057). (**) The amount of provision for employment termination benefits allocated to production costs is TL (2.519.763) (2013: TL 7.345.484). The amount capitalized during this period is TL 25.116 (2013: None).(***) The amount of depreciation and amortization expenses allocated to production costs is TL 20.301.171 (2013: TL 14.686.646).

NOTE 15 – RESARCH ANd dEVELOPMENT EXPENSES, MARKETING, SELLING ANd dISTRIBuTION EX-PENSES, GENERAL AdMINISTRATIVE EXPENSES (CONTINuEd)

NOTE 13 - SHAREHOLdERS’ EQuITY (CONTINuEd)

ment difference and other capital reserves that can be subject to a possible tax liability amounting to TL 47.110.422 and TL 14.076.203 if dividend distribution is made.

The decision of dividend payment amounting to TL 300.000.000 was taken in the Company’s 60th General Assem-bly dated March 24, 2014 and payment has been made to share-holders in cash on March 25, 2014 (Note 22). Dividend pay-ment distribution has been 5,62 Kr per share (2013: 3,74 Kr).

NOTE 14 - SALES AND COST OF SALES


Domestic sales 2.007.494.638 1.658.881.576

Export sales 944.418.345 698.327.376

sales income (gross) 2.951.912.983 2.357.208.952

Less: Discounts and returns (228.595.174) (181.889.071)

sales income (net) 2.723.317.809 2.175.319.881

Cost of sales (2.234.163.502) (1.703.022.950)

gross profit 489.154.307 472.296.931

NOTE 15 – RESARCH AND DEVELOPMENT EXPENSES, MARKETING, SELLING AND DISTRIBUTION EXPENSES, GENERAL ADMINISTRATIVE EXPENSES


marketing, selling and distribution expenses:

Warranty expenses (Note 11) 46.652.243 39.440.632


Transportation and insurance expenses 21.407.137 16.784.868

Press relations, advertisement and promotion expenses 7.073.610 5.028.746

Dealers meeting and fair expenses 6.576.447 4.553.398

Transportation and travel expenses 4.261.568 3.394.615

Remuneration of key management personnel (Note 22.v) (*) 2.213.863 1.795.451

Outsourcing expenses 2.044.999 1.908.774

Rent expenses 1.915.672 1.253.785

Depreciation and amortisation expenses (Note 7, 8) (***) 1.318.349 826.956

Service expenses 1.028.254 957.761

Material expenses 989.068 961.589


Other 4.574.529 3.386.307

124.101.198 97.248.052

150 151


NOTE 16 – EXPENSES BY NATURE


Raw materials 1.705.898.731 1.210.479.855

Cost of merchandise sold 302.623.126 298.825.619

Personnel and provision for employment termination benefits expenses 165.228.467 132.476.710

Material expenses 49.133.777 42.866.439

Warranty expenses 46.652.243 39.440.632

Depreciation and amortisation expenses 34.062.179 24.626.643

Transportation and insurance expenses 29.619.232 22.520.265

Energy expenses 14.719.793 10.936.242

Remuneration of key management personnel 11.043.427 8.431.621

Donations and aids 4.400.318 4.156.770

Changes in finished goods and work in process (10.960.157) (3.651.010)

Other 74.154.310 59.151.605

2.426.575.446 1.850.261.391

NOTE 17 – OTHER OPERATING INCOME/ EXPENSES


Foreign exchange gain from trade receivables and payables 510.896.267 381.095.623

Financial income from credit sales 45.449.197 16.042.893

Termination of provision for doubtful receivables (Note 5) 2.443.312 1.171.436

Incentive income 568.373 400.000

Other income 4.331.761 2.356.423

other operating income 563.688.910 401.066.375

Foreign exchange losses on trade receivables and payables (520.603.598) (355.912.173)

Financial expense on credit purchases (34.610.581) (9.754.867)

Provision for doubtful receivables (Note 5) - (5.169.012)

Provision for legal cases (Note 11) (3.246.139) (2.727.888)

Other expenses (516.756) (2.910.670)

other operating expenses (558.977.074) (376.474.610)

NOTE 18 - FINANCIAL INCOME


Foreign exchange gain(*) 53.590.877 45.174.088

Interest income 9.544.637 8.782.039

financial income 63.135.514 53.956.127

(*) Consists of foreign exchange rate income from accounts other than trade receivables and payables.

NOTE 19 – FINANCIAL EXPENSE


Foreign exchange losses (*) (27.426.711) (69.398.458)

Interest expenses of bank borrowings (41.164.199) (10.405.516)

Other (4.242.890) (3.746.603)

financial expenses (72.833.800) (83.550.577)

(*) Consists of foreign exchange rate expenses from accounts other than trade receivables and payables.

NOTE 20 - TAX ASSETS AND LIABILITIES

2014 2013

Corporate taxes payable 41.682.033 55.246.090

Less: Prepaid taxes (44.478.830) (46.721.512)

(tax asset)/ tax liabilty - net (2.796.797) 8.524.578


Current period corporate tax expense (41.682.033) (55.246.090)

Deferred tax income 9.322.420 14.897.458

tax expense (32.359.613) (40.348.632)

Corporation tax is payable, at a rate of 20% as of 2014 (2013: 20%) on the total income of the companies registered in Turkey after adjusting for certain disallowable expenses, exempt income and investment and other allowances (e.g. R&D allowance).

Deferred taxesThe Company recognizes deferred tax assets and liabilities based upon temporary differences arising between the financial

statements prepared in accordance with the CMB Financial Reporting Standards and their statutory financial statements, using the currently enacted tax rates. These temporary differences result in the recognition of revenue and expenses in different re-porting periods for CMB Financial Reporting Standards and tax purposes. The currently enacted tax rate for deferred tax assets and liabilities is 20% (2013: 20%).

The breakdown of cumulative temporary differences and the resulting deferred tax assets/ (liabilities) at December 31, 2014 and 2013 are as follows:

Temporary differences Deferred tax assets/ (liabilities)

2014 2013 2014 2013

Property, plant and equipment and intangible assets, restatement and useful life differences

48.938.089 20.270.382 (9.787.618) (4.054.076)

Unearned finance income on due from related parties (5.696) (26.287) 1.139 5.257

Provision for employee termination benefits (8.986.321) (15.435.367) 1.797.264 3.087.073

Warranty provision (41.266.231) (33.069.517) 8.253.246 6.613.903

Provision for lawsuits (7.343.170) (4.097.031) 1.468.634 819.406

Unearned finance income on trade receivables and payables

1.078.777 (282.633) (215.755) 56.527

Provision for doubtful receivables (2.191.705) (7.489.117) 438.341 1.497.823

Provision for impairment of inventory (12.959.214) (11.517.571) 2.591.843 2.303.514

Sales premium accrued (13.443.441) (13.560.049) 2.688.688 2.712.010

Other expense provisions 134.335 (925.022) (26.867) 185.004

Temporary differences Deferred tax assets/ (liabilities)

152 153


2014 2013 2014 2013

Investment incentive tax assets - - 36.794.678 22.553.029

Deferred income (4.552.091) (368.483) 910.418 73.697

Other (4.187.470) (3.451.806) 837.494 690.362

Deferred tax assets 45.751.505 36.543.529

Movements of deferred tax assets during the years are as follows:

2014 2013

January 1 36.543.529 21.551.493

Reflected to profit for the year 9.322.420 14.897.458

Reflected to other comprehensive income/ (expense) (114.444) 94.578

December 31 45.751.505 36.543.529

The reconciliation of the current period tax charge is as follows:

January 1 -december 31, 2014 January 1 -December 31, 2013

Profit before tax 293.446.885 320.254.571

Tax calculated at enacted tax rate 58.689.377 64.050.914

Investment incentives (21.464.950) (19.351.996)

Research and development incentives (4.930.162) (4.429.419)

Disallowable expenses 191.963 735.902

Other (126.615) (656.769)

Total tax charge 32.359.613 40.348.632

NOTE 21 - EARNINGS PER SHAREEarnings per share stated in the income statement are calculated by dividing the net income to the weighted average number of ordinary shares outstanding during the period.

Companies can increase their share capital by making a pro-rata distribution of shares (“Bonus Shares”) to existing share-holders from statutory retained earnings and statutory revaluation surplus. For the purpose of earnings per share computations, the weighted average number of shares in existence during the year has been adjusted in respect of bonus share issues without a corresponding change in resources, by giving them retroactive effect for the year in which they were issued and each earlier year.

Basic earnings per share are calculated by dividing the net income attributable to shareholders by the weighted average num-ber of ordinary shares in issue. Nominal value of one share of company is 1 Kr.


Net profit for the year 261.087.272 279.905.939

Weighted average number of the ordinary shares 5.336.900.000 5.336.900.000

Earnings per share (1 Kr nominal value per share as TL) 0,0490 0,0524

There is no difference between basic and diluted earnings per share in any period.

NOTE 22 - RELATED PARTY EXPLANATIONSThe Company is jointly controlled by Koç Holding and CNHI Osterreich. Related party balances and transaction disclosure are grouped by joint venture companies and group companies of joint venture companies.

Summary of the intercompany balances as of December 31, 2014 and 2013 and significant intercompany transactions were

as follows:

i) Balances with related parties as of December 31, 2014 and 2013:

2014 2013

a) bank deposits and borrowings

deposits with related parties:

Yapı ve Kredi Bankası A.Ş. (“Yapı Kredi”) 2.470.743 28.481.316

2.470.743 28.481.316

2014 2013

borrowings from related parties:

Yapı Kredi 40.072.667 -

40.072.667 -

2014 2013

b) due from related parties

due from group companies

CNHI International SA (“CNHI International”) (*) 91.430.770 60.196.245

CNHI Argentina SA (“CNHI Argentina”) 494.268 10.309.551

CNHI Italy SPA (“CNHI Italy”) 4.300.148 8.686.937

CNHI Latin America Ltda. 1.432.319 1.003.496

Other 794.245 627.787

98.451.750 80.824.016

Less: Unearned financial income (5.696) (26.287)

98.446.054 80.797.729

(*) Due from related parties is arising from export sales of the Company realized via CNHI International. These receivables are collected on a regular basis in specified maturities within the business deals.

2014 2013

c) due to related parties

Koç Holding 3.711.509 1.939.893

due to shareholders 3.711.509 1.939.893

Zer Merkezi Hizmetler ve Ticaret A.Ş. (“Zer”) 12.100.893 6.397.486

Opet Fuchs Madeni Yağ Sanayi ve Ticaret A.Ş. (“Opet Fuchs”) 8.081.328 4.374.305

Ark İnşaat Sanayi ve Ticaret A.Ş. 6.498.031 7.565.470

New Holland Fiat India Pvt. Ltd. (“New Holland India”) 4.177.625 2.512.605

Koç Sistem Bilgi ve İletişim Hizmetleri A.Ş. (“Koç Sistem”) 2.373.805 3.609.295

Arçelik A.Ş. 2.201.521 -

Eltek Elektrik İth. İhracat ve Toptan Tic. A.Ş. (“Eltek”) 1.680.858 -

Koçtaş Yapı Marketleri A.Ş. (“Koçtaş”) 1.153.621 605.461

Setur Servis Turistik A.Ş. (“Setur”) 1.035.020 -

Otokoç Otomotiv San. ve Tic. A.Ş (“Otokoç”) 510.667 279.575

Opet Petrolcülük A.Ş. (“Opet”) 171.238 60.882

NOTE 22 - RELATEd PARTY EXPLANATIONS (CONTINuEd)NOTE 20 - TAX ASSETS ANd LIABILITIES (CONTINuEd)

154 155


2014 2013

Otokar Otomotiv ve Savunma Sanayi A.Ş. (“Otokar”) 7.312 760.127

Other 1.378.490 1.409.163

2014 2013

due to group companies 41.370.409 27.574.369

Less: Unearned financial expenses (315.161) (167.691)

44.766.757 29.346.571

ii) Significant sales and purchases transactions with related parties for the periods between January 1 – December 31, 2014 and 2013:a) Product sales to related parties

January 1 -december 31, 2014

January 1 -December 31, 2013

product sales to group companies

CNHI International (*) 922.191.761 671.762.570

CNHI Italy 11.119.313 7.095.227

CNHI Argentina SA 5.127.373 11.698.252

CNHI Latin America Ltda. 5.087.866 6.875.242

Other 1.174.208 972.265

944.700.521 698.403.556

(*) The Company realizes export sales through CNHI International.

b) Service sales to related companies



service sales to group companies

CNHI International (1) 5.756.060 787.560

CNHI Italy(2) 3.873.674 3.084.828

Other 45.961 -

9.675.695 3.872.388

(1) Services sold to CNHI International is related to engineering, consultancy and various services.(2) Services sold to CNHI Italy is related to engineering and various services.

c) Other income and expenses from related parties



other income from group companies

CNHI International - 618.262

Other - -

- 618.262

other expenses from group companies

CNHI Italy - -

Other - (7.371)

- (7.371)

c) Product purchases from related parties



product purchases from group companies

CNHI International (1) 132.017.598 321.977.243

Opet Fuchs (2) 38.120.534 29.377.064

New Holland India (3) 21.438.578 25.303.899

Zer 15.296.880 10.268.269

Koç Sistem 10.650.683 2.504.429

Akpa Dayanıklı Tüketim LPG ve Akaryakıt Ürünleri Pazarlama A.Ş. 4.000.369 2.406.372

Opet (2) 1.333.025 872.629

Other 5.749.730 3.916.198

228.607.397 396.626.103

(1) The Company purchases tractors, agricultural machinery, engine and spare parts.(2) The Company makes various oil purchases for use in production and fuel purchases for use in company vehicles.(3) The Company purchases ponte and front axles for use in production.

d) Service purchases from related parties



service purchases from shareholders

Koç Holding (3) 5.077.442 2.896.856

5.077.442 2.896.856

service purchase from group companies

Ark İnşaat San. ve Tic. A.Ş. (1) 188.194.156 80.377.694

Zer (2) 60.732.522 51.148.132

CNHI International (4) 8.785.479 35.513.794

Eltek (8) 8.219.613 -

Setur (6) 6.880.920 3.692.927

Otokar (5) 5.327.189 7.743.126

Vehbi Koç Vakfı 4.000.000 4.000.000

Otokoç 1.938.601 1.270.485

Ram Sigorta Aracılık Hizmetleri A.Ş. (7) 1.878.874 1.214.453

Koç Sistem 766.991 1.513.981

Aygaz Doğalgaz Toptan Satış A.Ş. - 171.282

Other 3.185.903 2.680.014

289.910.248 189.325.888

294.987.690 192.222.744

(1) Services purchased from Ark İnşaat San. ve Tic. A.Ş. is related to services taken for construction of assembly factory in Sakarya.(2) Services purchased from Zer are related with security, cleaning, transportation and other services(3) Services purchased from Koç Holding is related with human resources, strategy development, consulting and brokerage.(4) Services purchased from CNHI International is related with engineering services for Tier 4, strategy development, consult-ing and brokerage.

NOTE 22 - RELATEd PARTY EXPLANATIONS (CONTINuEd) NOTE 22 - RELATEd PARTY EXPLANATIONS (CONTINuEd)

156 157


(5) Service purchased from Otokar is related with assembly and assembly support services. (6) Services purchased from Setur are generally arising from plane tickets, accommodation and associated with various organi-zations within the sales and marketing activities. (7) Insurance service purchased from Ram Sigorta Aaracılık Hizmetleri A.Ş. is related interim period include premium amounts paid and accrued ended on 31 December 2014.(8) Services purchased from Eltek related to electricity.

iii) Financial income and expenses arising from transactions with related parties for the periods between January 1 – December 31, 2014 and 2013:

Financial income and expense from group companies



interest income

Yapı Kredi 831.315 398.629

1 ocak - 31 aralık 2014 1 Ocak - 31 Aralık 2013

interest expense

Yapı Kredi (3.224.222) (372.770)

Yapı Kredi Yatırım Menkul Değerler A.Ş. - (2.790)

Yapı Kredi Finansal Kiralama A.O. - (23)

(3.224.222) (375.583)

iv) Dividends paid to related parties:



Koç Holding 112.500.000 75.000.000

CNHI Osterreich 112.500.000 75.000.000

Public quotation 74.801.056 49.867.371

Other 198.944 132.629

300.000.000 200.000.000

v) Other transactions with related parties for the periods between January 1 – December 31, 2014 and 2013:



Remuneration of key management personnel (*) 11.976.416 9.374.678

(*) Key management personnel are identified as Board of Directors, general manager and vice general managers.

NOTE 23 - FINANCIAL INSTRUMENTS AND NATURE AND EXTENT OF RISKS ARISING FROM FINANCIAL INSTRUMENTS The Company’s activities expose it to a variety of financial risks. These risks are market risk, currency risk, fair value interest rate risk, price risk and cash flow interest rate risk, credit risk and liquidity risk. The Company’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the financial performance of the Company.

Risk management is carried out in accordance with the program set by the Board of Directors of the Company.

a) Market Risk

Foreign currency riskThe Company is exposed to foreign exchange risks resulting from the foreign currency denominated commercial activities

with the foreign companies and loans obtained from banks. Currency risk arises due to foreign currency denominated record-ed and prospective transactions resulting as assets and liabilities. These risks are monitored regularly and limited by analyses of the foreign currency position.

The amounts of foreign currency assets, liabilities and TL equivalents of the Company as of December 31, 2014 and 2013 are as follows:

2014

tl equivalent usd eur gbp dkk chf yen

1.Trade receivables 116.805.527 914.419 40.658.376 - - - -

2. Monetary financial assets (inclu-ding banks accounts) (Note 3)

119.998.299 765.276 41.723.337 148.301 - 577 -

3.Other 82.285.342 5.957.255 24.274.493 - - - -

4. current assets (1+2+3) 319.089.168 7.636.950 106.656.206 148.301 - 577 -

5. Trade receivables - - - - - - -

6.Other 22.760.414 1.019 8.068.228 - - - -

7. non-current assets (5+6) 22.760.414 1.019 8.068.228 - - - -

8. total assets (4+7) 341.849.582 7.637.969 114.724.434 148.301 - 577 -

9. Trade payables 53.292.272 - 18.893.279 - - - -

10. Financial liabilities (Note 4) 112.400.823 10.032.699 31.600.665 - - - -

11. Other monetary liabilities 10.034.483 28.362 3.534.128 -

12. current liabilities (9+10+11) 175.727.578 10.061.061 54.028.072 - - - -

13. Financial liabilities (Note 4) 236.107.047 - 83.705.125 - - - -

14. non-current liabilities (13) 236.107.047 - 83.705.125 - - - -

15. total liabilities (12+14) 411.834.625 10.061.061 137.733.197 - - - -

16. net foreign currency asset/ (liability) position (8-15)

(69.985.043) (2.423.092) (23.008.763) 148.301 - 577 -

17. net monetary foreign currency asset/ (liability) position (8-15)

(69.985.043) (2.423.092) (23.008.763) 148.301 - 577 -

2013

TL Equivalent USD EUR GBP DKK CHF YEN

1.Trade receivables 101.677.059 650.023 34.152.806 - - - -

2. Monetary financial assets (inclu-ding banks accounts) (Note 3)

68.890.710 24.853 23.436.469 4.033 - 969 -

3.Other 95.276.963 10.655.199 24.572.228 85.695 - - 3.871.040

4. current assets (1+2+3) 265.844.732 11.330.075 82.161.503 89.728 - 969 3.871.040

5. Trade receivables 250.659 76.489 29.766 - - - -

6.Other 20.262.971 1.019 6.899.641 - - - -

7. non-current assets (5+6) 20.513.630 77.508 6.929.407 - - - -

8. total assets (4+7) 286.358.362 11.407.583 89.090.910 89.728 - 969 3.871.040

9. Trade payables 54.035.952 10.019.740 10.906.669 57.509 - - 20.831.892


NOTE 22 - RELATEd PARTY EXPLANATIONS (CONTINuEd) NOTE 23 - FINANCIAL INSTRuMENTS ANd NATuRE ANd EXTENT OF RISKS ARISING FROM FINANCIAL INSTRuMENTS (CONTINuEd)

158 159


2013

TL Equivalent ABD Doları Avro GBP DKK CHF YEN

11. Other monetary liabilities 11.324.615 3.793 3.853.744 - - - -

12. current liabilities (9+10+11) 80.063.561 10.023.533 19.767.392 57.509 - - 20.831.892


14. non-current liabilities (13) 235.191.834 - 80.092.571 - - - -

15. total liabilities (12+14) 315.255.395 10.023.533 99.859.963 57.509 - - 20.831.892

16. net foreign currency asset/ (liability) position (8-15)

(28.897.033) 1.384.050 (10.769.053) 32.219 - 969 (16.960.852)

17. net monetary foreign currency asset/ (liability) position (8-15)

(28.897.033) 1.384.050 (10.769.053) 32.219 - 969 (16.960.852)

The import and export amounts of the Company for the years ended December 31, 2014 and 2013 are as follows:


Total export amount 944.418.345 698.327.376

Total import amount 736.170.777 571.016.789

The Company is exposed to foreign exchange risk primarily with respect to EUR and USD. The effect of the Company’s EUR and USD foreign currency position as of December 31, 2014 and 2013 under the assumption of the appreciation and depreci-ation of TL against other currencies by 10% with all other variables held constant, is as follows:

2014

profit/ loss shareholders’ equity

appreciation of foreign currency

depreciation of foreign currency

appreciation of foreign currency

depreciation of foreign currency

had tl appreciate/ (depreciate) by 10% against usd

Profit/(loss) from USD net asset position (561.891) 561.891 - -

Hedged amount against USD risk (-) - - - -

net effect of usd (561.891) 561.891 - -

had tl appreciate/ (depreciate) by 10% against eur

Profit/ (loss) from EUR net liability position (6.490.082) 6.490.082 - -

Hedged amount against EUR risk (-) - - - -

net effect of eur (6.490.082) 6.490.082 - -

had tl appreciate/ (depreciate) by 10% against other

Profit/(loss) from other net liability position 53.469 (53.469) - -

Hedged amount against other (-) - - - -

net effect of other 53.469 (53.469) - -

total net effect (6.998.504) 6.998.504 - -

2013

Profit/ Loss Shareholders’ equity

Appreciation of foreign currency

Depreciation of foreign currency

Appreciation of foreign currency

Depreciation of foreign currency

had tl appreciate/ (depreciate) by 10% against usd

Profit/(loss) from USD net asset position 295.398 (295.398) - -

Hedged amount against USD risk (-) - - - -

net effect of usd 295.398 (295.398) - -

had tl appreciate/ (depreciate) by 10% against eur

Profit/ (loss) from EUR net liability position (3.162.332) 3.162.332 - -

Hedged amount against EUR risk (-) - - - -

net effect of eur (3.162.332) 3.162.332 - -

had tl appreciate/ (depreciate) by 10% against other

Profit/(loss) from other net liability position (22.769) 22.769 - -

Hedged amount against other (-) - - - -

net effect of other (22.769) 22.769 - -

total net effect (2.889.703) 2.889.703 - -

Price Risk The Company does not have financial assets exposed to price risk.

Interest rate riskThe table of the financial instruments that have interest rate sensitivity are shown below:

financial instruments with fixed interest rate

2014 2013

Time deposits (Note 3) 259.864.196 199.334.896

Financial liabilities (Note 4) 390.336.142 129.864.519

financial instruments with floating interest rate

2014 2013

Financial liabilities (Note 4) 267.915.396 218.726.076

For financial instruments with variable interest rates, if the interest on December 31, 2014 in all currencies was higher/lower by 100 base points with all other variables held constant, the profit for the period before tax as a result of high/low interest rate income/ expense consisting of loans with variable interest rates would be higher/lower by TL 1.783 (2013: TL 12.297).

b) Credit RiskFinancial assets are in hand carrying the risk of the inability of fulfilling the requirements of the agreements by the counter parties. The Company management manages these risks by limiting the average risk to any individual counterparty, by obtain-ing guarantees where necessary. The Company limits these risks that may arise from its dealers, by restricting the credit limits determined for the dealers according to the amount of the guarantees received, by updating the guarantee amounts regularly and by receiving the pledge of ownership of the tractors sold. Credit limits are regularly monitored by the Company and the customers’ credit quality are regularly evaluated by considering the customers’ financial position, past experiences and other factors. Trade receivables are evaluated by the management of the Company depending on their past experiences and current economic conditions and are presented in financial statements net of provision for doubtful receivables (Note 5).

NOTE 23 - FINANCIAL INSTRuMENTS ANd NATuRE ANd EXTENT OF RISKS ARISING FROM FINANCIAL INSTRuMENTS (CONTINuEd)


160 161


The Company’s maximum exposure to credit risk as of December 31, 2014 and 2013 is as follows:

2014

trade receivables other receivables

related party third party related party third party bank depositsderivative

instruments

net book value of financial assets which are undue and not impaired

98.446.054 359.417.489 - 357.419 269.227.427 -

net book value of restructured finan-cial assets, otherwise that - will be considered as due dated or impaired

- - - - - -

net book value of due dated but not impaired assets

- 2.752.280 - - - -

net book value of impaired assets - 273.031 - - - -

- due dated (gross book value) - 39.770.692 - - - -

- provision (-) - (39.497.661) - - - -

- undue (gross book value) - 368.388 - - - -

- provision (-) - (368.388) - - - -

off-balance sheet items exposed to credit risk

- - - - - -

amount exposed to maximum credit risk (*)

98.446.054 362.442.800 - 357.419 269.227.427 -

(*) The factors, increasing the credit reliability and the guarantees received are not taken into consideration in calculation of the amount.

As of December 31, 2014, the guarantee amount of the maximum exposure to credit risk is TL 675.364.122. Besides, all assets which are due but not impaired and are impaired are guaranteed.

2013

Trade Receivables Other Receivables

Related party Third party Related party Third party Bank depositsDerivative

instruments

net book value of financial assets which are undue and not impaired

80.797.729 273.967.582 - 355.102 209.322.936 -

net book value of restructured finan-cial assets, otherwise that - will be considered as due dated or impaired

- - - - - -

net book value of due dated but not impaired assets

- 2.580.519 - - - -

net book value of impaired assets - 5.817.482 - - - -

- due dated (gross book value) - 47.268.302 - - - -

- provision (-) - (41.450.820) - - - -

- undue (gross book value) - 858.541 - - - -

- provision (-) - (858.541) - - - -

off-balance sheet items exposed to credit risk

- - - - - -

amount exposed to maximum credit risk (*)

80.797.729 282.365.583 - 355.102 209.322.936 -

(*) The factors, increasing the credit reliability and the guarantees received are not taken into consideration in calculation of the amount.

As of December 31, 2013, the guarantee amount of the maximum exposure to credit risk is TL 566.630.979. Besides, all assets which are due but not impaired and are impaired are guaranteed.

As of December 31, 2014 and 2013, assets that are overdue but not impaired are as follows:

2014

receivables

trade receivables

other receivables bank depositsderivative

instrumentsother

1-30 days past from maturity - - - - -

1-3 months past from maturity - - - - -

3-12 months past from maturity 1.840.538 - - - -

1-5 years past from maturity 911.742 - - - -

Over 5 years from maturity - - - - -

total overdue 2.752.280 - - - -



162 163


2013

Receivables

Trade Receivables

Other Receivables Bank DepositsDerivative

InstrumentsOther

1-30 days past from maturity 15.725 - - - -

1-3 months past from maturity 29.248 - - - -

3-12 months past from maturity 1.157.733 - - - -

1-5 years past from maturity 1.377.299 - - - -

Over 5 years from maturity 514 - - - -

Total overdue 2.580.519 - - - -

Consist of guarantees, guarantee letters received from customers, collateral securities and mortgages.

c) Liquidity RiskLiquidity risk is managed by mainintaining cash and marketable securities, the availability of funding through an adequate amount of committed credit lines and the ability to close out market positions.

Funding risk of the current and future liabilities is managed by providing sustainability of the access to sufficient high quality creditors and the sustainability of the sufficient cash flows obtained from operating activities. The Company manage-ment, in order to ensure continuous liquidity, closely follows up the timely collection of receivables, allocates high intensity focus to prevent any financial burden sourcing from late collections and determines cash and non-cash credit limits to be activated in case of need by the Company.

As of December 31, 2014 and 2013, the undiscounted cash flows and liabilities according to their remaining maturities are presented in the following tables:

2014

book valueless than 3

monthsbetween 3-12

monthsbetween 1-5

yearson demand

total cash outflows according

to contract

financial liabilities (note 4) 658.251.538 103.669.787 139.431.306 476.484.511 - 719.585.604

trade payables (note 5) 403.905.945 407.771.043 - - - 407.771.043

due to related parties (note 22) 44.766.757 45.081.918 - - - 45.081.918

other payables 11.740.493 11.740.495 - - - 11.740.495

non-derivative financial instru-ments

1.118.664.733 568.263.243 139.431.306 476.484.511 - 1.184.179.060

derivative cash inflows - - - - - -

derivative cash outflows - - - - - -

derivative financial instruments - - - - - -

2013

Book valueLess than 3

monthsBetween 3-12

monthsBetween 1-5

yearsOn Demand

Total cash outflows according to

contract

Financial liabilities (Note 4) 348.590.595 46.875 26.336.313 357.790.571 - 384.173.759

Trade payables (Note 5) 276.743.088 278.698.990 - - - 278.698.990

Due to related parties (Note 22) 29.346.571 29.514.262 - - - 29.514.262

Other payables 7.669.767 7.669.767 - - - 7.669.767

Non-derivative financial instruments 662.350.021 315.929.894 26.336.313 357.790.571 - 700.056.778

Derivative cash inflows - - - - - -

Derivative cash outflows - - - - - -

Derivative financial instruments - - - - - -



Capital risk managementThe Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.

The Company monitors capital on the basis of the net financial debt/ shareholder’s equity ratio. Net financial debt calculated as total financial liabilities (including short and long term bank borrowings) less cash and cash equivalents. This ratio is calcu-lated as net financial debt divided by total shareholders’ equity.

2014 2013

Cash and cash equivalents (Note 3) 269.229.023 209.322.936

Less: Financial liabilities (Note 4) (658.251.538) (348.590.595)

net financial (debt)/ asset (389.022.515) (139.267.659)

Total shareholders’ equity 704.862.715 743.317.723

net financial debt/ shareholders’ equity ratio (0,55) (0,19)

Fair value of financial assetsFair value is the amount at which a financial instrument could be exchanged in a current transaction between willing parties,

other than in a forced sale or liquidation, and is best evidenced by a quoted market price, if one exists.

The estimated fair values of financial instruments have been determined by the Company using available market information and appropriate valuation methodologies. However, judgement is necessarily required to interpret market data to estimate the fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company could realise in a current market exchange.

The following methods and assumptions were used to estimate the fair value of the financial instruments for which it is practical to estimate fair value:

Financial assetsThe fair values of balances denominated in foreign currencies, which are translated at period-end exchange rates, are considered to approximate carrying value.

The fair values of cash and cash equivalent are considered to approximate their respective carrying values due to their short-term nature.

The discounted carrying values of trade receivables along with the related allowances for uncollectability are estimated to be their fair values.

Financial liabilitiesThe fair values of short-term and long-term bank borrowings are presented in Note 4.

Trade payables, which are measured at amortised cost, are considered to approximate their carrying value.

NOTE 24 - SUBSEQUENT EVENT None.

164

NOTES

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