Valued shareholders,

Over the course of the past year our Group companies displayed such a high level of performance that they successfully compensated for all of the losses they had incurred during the last international financial crisis. I want to congratulate all our Group managers and employees for their bold efforts in making this happen.

By the end of the third quarter of 2011 our country had an annual economic expansion rate of 8.5%, good enough for a ranking of second in the world after China in terms of its growth rate. While the European Union is having to deal with the effects of the financial crises in the countries which constitute the very foundation of the Union, namely Greece, Italy, Spain, Ireland, and even France, our own financial system has effectively managed to remain not only stable, but powerful as well. The Industrial Productivity Index currently stands at record levels in our national history. All these indicators have confirmed the fact that Turkey is one of the first of just a few countries to swiftly overcome the adverse affects of the international crisis.

I believe that some of the factors behind this impressive performance by our country include the long-term maintenance of political stability, privatization initiatives of public sector controlled areas, as well as the implementation of policies and measures that not only encourage the development of our national industry but also unwaveringly maintain financial stability. In addition to these reasons, we can add the expansion into new world markets and the courageous implementation of efficiency-improving methodologies by domestic enterprises.

It would not be appropriate for me to offer an opinion here about the future to neither our government nor the public sector. However, as an entrepreneur who witnessed the formation of modern industry in our nation I would like to draw the attention of the younger generation embarking on business life to certain things that have occurred which need to be considered in these momentous days.

The world has become an extremely large market. There must be sufficient demand for the goods that are to be manufactured. Across the globe technology has been developing at a rapid pace as great progress in innovations has been attained. While doing their job in commerce everyone should be placing themselves in the position of benefiting from the innovations and conveniences made available through technology. This usually necessitates additional investments. Therefore, in order to embark on such ventures we must attract additional financing from global markets to our nation, which can only be accomplished by adopting strong financial policies.

The possibility of an economic contraction taking place, especially in developed countries, during the course of 2012 must also not be overlooked. Should this occur, the adverse effects will undoubtedly be felt in Turkey as well. Similarly, we must also be aware of the fact that the domestic savings deposits volume has never really reached desirable levels and the present state of the country’s current account deficit makes the economy much more vulnerable to international developments that have affected global markets. Moreover, the political and social developments that are currently being experienced in North Africa and the Middle East have undoubtedly had an adverse impact on our country’s international trade volume.

Perhaps the most important topic pertaining to the present is the seemingly interminable financial crisis being experienced by the European Union. Likewise, as this issue closely concerns Turkey it would be wrong to assume that the European Union vision has lost all its strength. Europe’s experience in both diplomacy and state management is deeply rooted. The present stalemate is only superficial. To ensure the continuation of the Union the more powerful countries in Europe will likely require the ones that are not living within their means to adopt a tighter monetary regime in the end.

Even though countries such as China, Brazil, India, Indonesia and South Africa have been able to grow rapidly as a result of their humble lifestyle it must not be forgotten that in the midterm, Europe will still continue to be a comparatively strong region in terms of economy and politics.

In this sense there should be no doubt about the European Union membership perspective of our country. It would be beneficial for all parties involved if Turkey became a member of the EU, not only in terms of the Union’s future but also for the social and financial development targets of our nation.

Just as Turkey needs the European Union for its social and economic development, the EU is also dependent on Turkey for its financial future because of the mass market and young population our nation possesses. In order to pursue such an advantageous relationship for both parties, the most important domestic issue to address in order to ensure the uninterrupted rapid economic development of our country is the establishment of an education system that will enable us to train up the younger generation in order to supply the necessary qualified labor force for commerce.

In a speech delivered to teachers prior to the foundation of the Turkish Republic in 1922, the founder of modern Turkey Mustafa Kemal Atatürk emphasized, “The victory secured by our armed forces has set the stage for the future victory you and your armies will ensure. You will undoubtedly be the truly victorious ones and ensure the success of future generations.”

All my life, up to this very day, I have endeavored with all my heart to repay my debt to my country. After turning over the management of my companies into capable hands, I have been fortunate enough to contribute to the development of our national education system within the limits of my capabilities and resources.

Throughout the history of the Borusan Group, which in 2011 celebrated its 67th year in business, education has been a major emphasis. The success we have achieved and sustained in our business life, including everything from our high quality products to the excellent and focused service we provide our customers, has been closely connected with strategic research and education efforts which have ensured the future of our companies. Today our managers give such importance to corporate education that they have established a vocational university within the Group, known as Borusan Academy, which many of our managers continue to attend. I have no doubt that the Borusan Academy, a project which I wholeheartedly support, will quickly produce positive results in the near future.

On behalf of our shareholders and my family I would like to take this opportunity to thank all of our Borusan employees, who with great commitment and enthusiasm contributed to the success of our companies this past year.

Asım Kocabıyık
Founder and Honorary Chairman
Borusan Holding