2014 ANNUAL REPORT

2014,

Borusan Lojistik

embarked upon the

goal of acquiring greater proximity and speed

in customer services, with lean and efficient

processes; meanwhile, it started focusing on

innovative projects and offering customers more

flexible solutions. Technology investments at our

port in Gemlik, which can accommodate container ships of up

to 13,000 TEUs and has a 400,000 TEU-container and 250,000

vehicle-freight handling capacity, have enabled us to create

value for our customers by increasing promptness, efficiency

and operational capacity in services. In the international shipping

under the Balnak brand, we have over 100 agents in Europe,

which provides us with a significant global transaction volume.

We have acquired greater international penetration through the

addition of CIS and Middle East lines.

In 2012, we established an online platform bringing SMEs and

shippers together under the Borusan Lojistik guarantee. This

platform, the ETA (Electronic Shipping Network), provided an

innovative approach to the land shipping sector by offering

reliable and fast service at optimal cost. In 2014, membership in

the online platform grew with the addition of 1,000 freight owners

and 2,000 trucking industry service providers.

Manheim (US), one of the world’s leading specialists in public

auctions, with its partner

Borusan Manheim

, increased

its dealer membership by 30% to 3,500 members. Having

expanded its total customer base by 29% and its business

volume by 14%, Manheim founded Otomax.com to accelerate

sales by broadening its second-hand car portfolio.

Supsan

, Turkey’s largest manufacturer of valves and valve

supplier to major automobile brands, had sales volume of

4.9 million and revenues of US$23 million in 2014. Our company

has also begun exporting to Russia and added Daimler CNG

engines and Volvo trucks to our customer portfolio.

orking towards its vision of achieving a

2,000MW portfolio by 2020,

Borusan EnBW

Enerji

continued its investments through

2014. The foundations of the Balabanlı Wind

Power Plant (Tekirdağ, 50MW) project, which

was put on the investment schedule in 2012,

and was started construction in 2013, reached full capacity two

months earlier than planned. Investments of wind power plant

package projects (which include the Fuatres, Harmanlık, Mut

and Koru Wind Energy Power Plant projects, and the capacity

expansion of the Bandırma Wind Energy Power Plant), which

were decided upon in 2013 as being the Europe’s largest

terrestrial wind power investment, have begun in the 207 MW. As

a result of TÜV NORD Teknik Kontrol ve Belgelendirme Company

inspections, Borusan EnBW Enerji gained “Voluntary Green

Energy Power” certification in July and became the first Turkish

energy company certified as supplying 100% green energy.

eveloping new products, services and business

models is a major focus of

Borusan Group

. In the

scope of these devoted activities, we evaluated

35 business opportunities in 2014. Most of these

opportunities, for which we budgeted US$ 5 million,

have been transformed into operational business

models and commercialized. As a result of our focused efforts,

we have brought seven projects to the incubation stage and, as

of the end of the year, we had over 50 new product, service and

business model projects underway in seven companies.

R&D is crucial to accelerating the development of new products,

services and business models. Therefore, we are establishing

a joint and competent R&D Center under the Holding company

to contribute to the Group’s competitive advantage as we move

forward. We have completed the joint R&D Center’s roadmap

and infrastructure, it will become operational in 2015. We have

also taken steps to increase cooperation with universities; to be

closer to university resources, data banks and academicians, we

have joined ITU’s Arı Teknokent.

Our profit did not reach a satisfactory level as we planned

for 2014. While our consolidated revenues rose by 9%, our

operational profit mirrored that of 2013. This was because of the

negative developments in our business sectors, such as the fall

in steel prices, the shrinkage in Turkish and foreign construction

equipment markets, and the increasingly restrained profitability

levels in the logistics sector.

BORUSAN 2014

REVIEW OF OPERATIONS

In 2014, while celebrating our 70th

anniversary, we established our

targets for 2019 under the 5-year

strategic plan.