Burhaniye Mahallesi Kısıklı Caddesi No: 65 Altunizade 34676 Üsküdar/ISTANBUL/TURKEY Phone: +90 (216) 556 90 00 Fax: +90 (216) 556 91 47 www.dyh.com.tr
2012 Annual Report
ED T...
I LI T
EN
. S.. ES IN This Annual Report is printed on 100% recycled paper. No trees were harmed during the production process.
ENTHU S I A S M.. .J O Y ... H A PP
IVIT Y... RESPONS CREAT IB
IN M ERTA
..
ET... TERN .. IN IO. ISTRIBUTION... AD ... D INT PR
N E W S . .. E N T
. RK
.. R N.
doğan yayın holding 2012 Annual Report
FOCUS... OMER T S U ER... MAGAZ O ... C NEWSPAP INE W E ... T G M N EL A H EV C IS .. IO
UC AT Y... DIVERS IO SP ITY.. EE N . TE D ... CH NO TE LO A GY .
. ..
CONTENTS
AT A GLANCE 2 Who Are We? 10 Our Values 12 Our Road Map 13 Our Management Structure 14 Competitions and Awards 16 Shareholders and Share Performance 18 Message from the Chairperson 20 Message from the CEO OPERATIONS IN 2012 22 Highlights of the Year 24 DYH and the Turkish Media Sector 26 Publishing 32 Broadcasting 39 Other Operations SUSTAINABILITY 40 Corporate Social Responsibility 50 Aydın Doğan Foundation 54 Sustainable Growth and the Environment 56 Human Resources 57 Remuneration Policy and Rights 57 Organization Chart CORPORATE GOVERNANCE 58 Board of Directors 60 Executive Committee 61 Internal Audit and Control 62 Risk Management 64 Corporate Governance Principles Compliance Report 81 Other Legal Announcements 85 Broadcasting and Publishing Principles 88 Code of Ethics and Behavioral Conduct 91 Audit Report 92 Audit Committee Resolution 93 Corporate Governance Committee Resolution 94 Board of Director’s Statement of Responsibility on the Approval of the Reports 95 Board of Director’s Resolution on the Approval of the Reports DIVIDEND DISTRIBUTION 96 Dividend Distribution Policy 97 Dividend Distribution Proposal 99 Dividend Distribution Table FINANCIAL INFORMATION 102 Independent Audit Report 104 Financial Report
Dogan Yayın Holding (DYH) is active in a wide range of fields including newspaper, magazine and book publishing, television and radio broadcasting and production, as well as Internet, print and distribution. Numerous leading brands of the Turkish media are found under the umbrella of DYH, which keeps a close watch on technological advances and brings the global news and entertainment agenda to every corner of Turkey.
AT A GLANCE
Active in a wide range of fields including publishing and broadcasting, Doğan Yayın Holding is the largest and most established group in the Turkish media.
WHO ARE WE?
Doğan Yayın Holding In Turkey and the World Doğan Group of Companies has operations across a vast region including 16 countries and has contributed to the economic, social and cultural development of Turkey since its inception. Active in media and related fields, Doğan Yayın Holding has added to the value of the Doğan Group of Companies with its prestigious position in the Turkish media and its achievements, since its establishment in 1998. DYH is active in newspaper, magazine
and book publishing, television and radio broadcasting and production, as well as Internet, printing and distribution. Content providers for the Group include newspapers, magazines, publishing houses, television channels, radio stations, new media enterprises, as well as music and production companies. The Group’s service providers are made up of distribution, production, digital platform, Internet and printing companies, as well as a factoring company.
DYH grows and develops daily through its productivitycentered business perspective and the synergy existing among its companies. Profitable investments and innovative practices have helped the Company play a pioneering role in the sector. DYH and its key subsidiaries, Hürriyet Gazetecilik ve Matbaacılık A.Ş. (Hürriyet Gazetecilik), Doğan Gazetecilik A.Ş. (Doğan Gazetecilik) and Doğan Burda Dergi Yayıncılık ve Pazarlama A.Ş. (Doğan Burda), are all publicly traded on the stock exchange Borsa Istanbul A.Ş. (Borsa Istanbul).
Hues and colors OF all
For many years, Posta has been read by the entire Turkish population – whether rich or poor, male or female, young or old, well-educated or not. According to surveys, Posta reaches out to a three million readers daily, one million of whom read only Posta – thus proving that it is the newspaper of Turkey.
AT A GLANCE
WHO ARE WE?
Business Partnerships
Magazine Publishing
Book Publishing
TV Broadcasting
Technology
The color of excıtement
D-Smart continues to broadcast the UEFA Champions League and UEFA Europa League games, the pinnacle of European football.
AT A GLANCE
DYH has a leading position in publishing with its newspaper, book and magazine publishing businesses.
WHO ARE WE?
Publishing DYH publishes five daily newspapers: Hürriyet, Posta, Radikal, Fanatik and Hürriyet Daily News as well as 27 periodicals plus children’s and youth magazines. In addition, the Company also publishes books and is active in the printing sector through Doğan Ofset and Doğan Printing Center (seven printing facilities: six in Turkey, one in Germany). DYH distributes daily twothirds of Turkey’s newspapers and magazines to 194 dealers and approximately 26,500
DYH is among the top players in online advertising and online reporting, where competition is fierce, with websites that offer original content, user-friendly features and safety.
sales points across the country through Doğan Dağıtım. This amounts to 11,000 different products every single month. DYH also imports newsprint and printing material through Doğan Dış Ticaret. The Holding’s other affiliates active in the publishing field are Trader Media East, the leading classified ads company in Russia and Central Europe, functioning under Hürriyet and Doğan Media International, active in newspaper publishing in Europe. In online advertising and online reporting where competition is fierce, DYH is
Newspaper Publishing
TME Newspapers
Printing and Distribution
Magazine and Book Publishing
Paper and Printing Material Import
News Agency
among the top players with websites featuring original content, user-friendly features and safety. Designed to appeal to different interests and pursuits, the following DYH websites are among the Turkey’s most popular, in terms of number of visitors: www.hurriyet.com.tr, www.arabam.com, www.hurriyetemlak.com, www.yenibiris.com, www.hurriyetoto.com yakala.co
6-7
doğan yayın holding 2012 Annual Report
Broadcasting DYH’s broadcasting activities include television and radio broadcasting, production and digital broadcasting. Under the umbrella of DYH, there are television channels such as Kanal D, CNN Türk and tv2 lead the industry with their original programs, radio channels such
as Radyo D, CNN Türk Radyo and Slow Türk Radyo offer appealing content. D-Smart, a digital platform offers special thematic-channels, national channels and access to channels that are transmitted through Turksat.
TV & Radio Broadcasting and Production
Digital Broadcasting
Financial Services
In addition, DYH is also engaged in the production of TV series, programs and advertisings via the production companies D Productions and InDHouse and film distribution via Kanal D Home Video. Kanal D Romania, the Holding’s foreign investment in television broadcasting, has quickly gained the lead in the Romanian television sector.
AT A GLANCE
WHO ARE WE?
Shareholder Value Shareholders Doğan Yayın Holding A.Ş.’s current shareholding structure is as follows (1):
75.74%
Doğan Şirketler Grubu Holding A.Ş.
21.95%
2.31%
Free-float
Doğan FamIly
Doğan Yayın Holding’s 3,000,000 “publicly available” shares with a nominal value of TL 1 have been acquired by Doğan Holding (parent company of the Group) from Adilbey Holding A.Ş. on February 20, 2013, from the weighted average share price of TL 0.86 (full) during the first session of the stock exchange, thus within the margins set by Borsa Istanbul’s “Regulation on the Establishment and Operating Principles of the Wholesales Market”. As a result of this transaction published in the Public Disclosure Platform on February 20, 2013, Doğan Holding’s share of Doğan Yayın Holding capital reached 75.74%.
(1)
(*)
The shareholding structure as of December 31, 2012 and December 31, 2011 is available on page 16.
Doğan Yayın Holding Market Capitalization* Share Price
TL 0.78
Market Cap
TL 1,560 million (US$ 873 million)
(*)
As of December 31, 2012
Key Financial Indicators Summary Income Statement (TL million)
2012
2011
2010
2009
2008
Net Sales
2,526
2,338
2,289
2,435
2,880
770
689
691
425
667
Gross Profit Operating Profit/(Loss)
152
84
82
-170
-7
EBITDA(**)
324
251
252
7
174
12.8%
10.7%
11.0%
0.3%
6.0%
-237
-343
-324
(*)
EBITDA Margin(**) Net Profit/(Loss)
(***)
Gross Profit Margin (%) Operating Profit Margin(*) (*)
197
-1,194
30.5
29.5
6.0
3.6
Other operating income and expenses not included.
(**)
Earnings Before Interest, Tax, Depreciation & Amortization (EBITDA) calculated by DYH; amortization of television program rights not included.
(***)
Net Profit / (Loss) includes discontinued operations profit/loss.
8-9
doğan yayın holding 2012 Annual Report
In view of the growth potential of the Turkish advertising sector, DYH’s objective is to increase its advertising revenue in every field of publishing and broadcasting.
Summary Balance Sheet (Thousand TL)
2012
2011
2010
Current assets
1,800,350
2,250,343
1,284,291
Non-current assets
2,136,833
2,440,943
2,623,293
Total assets
3,937,183
4,691,286
3,907,584
Short-term liabilities
1,698,037
1,836,145
1,555,024
Long-term liabilities
818,679
1,775,731
1,082,393
1,420,467
1,079,410
1,270,167
Ratios
2012
2011
2010
Current Ratio (%)
1.06
1.23
0.83
Liquidity Ratio (%)
0.99
1.13
0.74
1.77
3.35
2.08
SHAREHOLDERS’ EQUITY
Debt to Equity Ratio (%)
2,526
324
12.8
2,338
251
Net Sales TL million 2011
2012
10.7
EBITDA TL million 2011
EBITDA MargIn % 2012
2011
2012
AT A GLANCE
OUR VALUES
Mission
To produce and develop content and media tools for news, entertainment and education and deliver these to clients through innovative ways
Strategy
To offer custom-made, rich means of information and entertainment to target audiences To transform content advantage into value To diversify and enhance content distribution channels To diversify and expand sales and distribution channels To rapidly implement technological advances into our business To provide customer-focused services
10 - 11
doğan yayın holding 2012 Annual Report
Values
R ES
P
LITY
Corporate Values of DYH
W
OR
T IV A E
TEAM
IT Y
P RA
SIBI
I D D EC I SI
N-
KING A M
ON
O
LIABILIT Y E R
CR
K P IO
NEERI NG
AT A GLANCE
In 2013, DYH will keep abreast of changes in online media and seize growth opportunities via mergers and acquisitions in this field.
OUR ROAD MAP
With innovative vision and know-how, DYH undertakes investments that add value to the Turkish media sector. In 2013, DYH will keep abreast of changes in online media and seize growth opportunities via mergers and acquisitions in this field. DYH plans to partner with key players within Turkish and global media companies to undertake sustainable investments. In the coming period, the Company will focus on partnerships that contribute to consistent growth. In addition, the Company will keep an eye on investment opportunities overseas. The TV channel Kanal D is a pioneer with regard to Turkish television production with its modern and creative broadcasting line and original programs. Kanal D’s successful performance will be enhanced further with even richer program content, while increasingly more effort is exerted to bolster tv2, launched successfully in August 2012. The operations to increase the brand awareness of CNN Türk among viewers will continue. Doğan TV Holding’s leading production companies, D Prodüksiyon and InDHouse, will continue focusing on content production. Continuously updating its service packages in line with changing market dynamics, D-Smart has enabled its clients to access more content from computers and laptops with the new D-Smart BLU launched in March 2012. Viewers are no longer dependent on the TV screen and can receive programs via Internet.
In 2013, D-Smart will increase the number of HD channels, expand technological investments, enhance services and content and reach out to more consumers through different package and price options. The Company will also expand the service area of D-Smart BLU to allow clients to access content via the Internet with PCs, laptops, tablet PCs and smartphones. As a result, more value will be created for D-Smart subscribers. The Company believes that both domestic and international markets will aid in the growth of “online” advertising revenue and will outpace average market growth. Accordingly, aside from striving to enhance its efficiency and access in the conventional media, the Company is keen on capitalizing on the rapid growth of the Internet and increasing its revenue. In the new media order, the objective is to access readers not only via newspapers but through every platform. Currently, Hürriyet Internet Group reaches out to around 6.8 million people via channels such as newspapers, the worldwide web, tablet PCs and smartphones. In the coming years, the Group will strive to reach ten million people and increase the share of Internet in its overall revenue. As for the overseas, the Group’s subsidiary TME, mainly operating as a classified ad company, will complete its
transformation from a print media company to an online media company and targets to receive 50% of its total revenue from the Internet. In the period ahead, Doğan Gazetecilik will continue its consistent growth thanks to strong brands, efficient management and responsible broadcasting approach. Online radio broadcasting has become ever more popular; the technical capabilities of radio under the umbrella of DYH will be enhanced by means of the state-of-the-art technology. Radios will be enriched in terms of technology and content; promotion campaigns will be organized to increase other ways to listen. As the leader of its sector, Doğan Burda Magazine Group will preserve its strong position in terms of brand recognition, circulation and advertising as well as its market leadership in 2013. Doğan Burda plans to diversify its publications to reach out to a wider audience and will undertake the necessary investment to improve and enhance its current portfolio. DYH is currently assessing the growth potential of the Turkish advertising sector and in the coming period, plans to increase its advertising revenue in all fields of broadcasting and publication.
12 - 13
doğan yayın holding 2012 Annual Report
OUR MANAGEMENT STRUCTURE
OUR MANAGEMENT APPROACH DYH has embraced the concepts of equality, transparency, accountability and responsibility outlined in the Corporate Governance Principles and strives to comply with these principles to a maximum extent in its operations. In this context, ISS Corporate Sevices Inc. (ICS), an international rating firm authorized to carry out ratings in Turkey as per the Capital Markets Board’s (CMB) relevant regulations and resolutions, raised DYH’s corporate governance rating from 8.87 to 9.00 out of 10, in its report dated July 31, 2012. Together with all the companies under its umbrella, DYH is focused on supporting the development of the Turkish media toward a more reliable, modern and innovative direction. DYH’s entire management team and employees make their contributions to the sustainable growth of the Holding, in line with a management perspective open to communication and teamwork, capable of taking initiatives, consistent, flexible and transparent. Board of Dırectors(*) Full Name 1. Y. Begümhan DOĞAN FARALYALI 2. Soner GEDİK 3. Mehmet Ali YALÇINDAĞ 4. Yahya Üzdiyen 5. Ertuğrul Feyzi TUNCER 6. H. Ahmet KILIÇOĞLU
Title Chairperson Vice Chairperson Board Member Board Member Independent Board Member Independent Board Member
Commıttees Executive Committee Full Name 1. Yahya ÜZDİYEN 2. Soner GEDİK 3. Ahmet TOKSOY
Title President Member Member (CFO)
Audit Committee Full Name 1. Hacı Ahmet KILIÇOĞLU
Title President (Independent Board Member)
2. Ertuğrul Feyzi TUNCER
Member
Corporate Governance Committee(**)
Upon a Board of Directors resolution dated July 26, 2012, numbered 2012/14 and subject to the approval of the shareholders at the next General Assembly, Ali İhsan Karacan was appointed to fill the Board Member position left vacant after the resignation of Hanzade V. Doğan Boyner. As per a Board of Directors resolution dated February 12, 2013, numbered 2013/3 and subject to the approval of the shareholders at the next General Assembly, Yahya Üzdiyen was appointed to fill the Board Member position left vacant after the resignation of Ali İhsan Karacan.
(*)
Upon a Board of Directors resolution dated March 4, 2013 and numbered 2013/5, Hacı Ahmet Kılıçoğlu was appointed to fill the Corporate Governance Committee Member position left vacant after the resignation of Ali İhsan Karacan.
(**)
Full Name
Title
1. Ertuğrul Feyzi TUNCER 2. Hacı Ahmet KILIÇOĞLU(**) 3. Dr. Murat DOĞU
President (Independent Board Member) Member Member
Risk Assessment Committee Full Name 1. Ertuğrul Feyzi TUNCER 2. Erem Turgut YÜCEL 3. Tolga BABALI 4. Yener ŞENOK 5. Dr. Murat DOĞU 6. Ayhan SIRTIKARA 7. Korhan KURTOĞLU
Title President (Independent Board Member) Member Member Member Member Member Member
Detailed information about the Board of Directors, the Committees and their résumés are available in the Corporate Governance Principles Compliance Report.
AT A GLANCE
According to the survey Turkey Lovemarks 2012, the newspaper Posta was named “The Most Popular Newspaper of 2012.”
COMPETITIONS AND AWARDS
With high-quality, reliability and dynamic broadcasting and publishing approach, Doğan Yayın Holding was deemed worthy of numerous awards in prestigious national and international platforms during 2012. Some of these awards, which attest to the success of DYH as a modern, pioneering brand within the Turkish media, are presented below: Corporate Partnership Award Goes to CNN Türk Established 13 years ago through a partnership with the global media giant Turner Broadcasting, CNN Türk was granted the American Turkish Society’s Corporate Partnership Award. Given to promote supporting partnerships among American and Turkish companies, this award showcased CNN Türk’s successful corporate development. Kanal D, the most popular TV channel in 2012 In the fourth edition of the Turkey Lovemarks survey, jointly conducted by MediaCat and Ipsos KMG, Kanal D was designated the “The Most Popular TV Channel in 2012” with 32% of the votes. The survey was carried out in 22 categories and among 1,156 participants aged between 15 to 55 from 12 provinces. Posta the most popular newspaper in 2012 According to joint MediaCat-Ipsos KMG survey Turkey Lovemarks 2012, the newspaper Posta was selected “The Most Popular Newspaper in 2012.”
The color of the news
doğan yayın holding 2012 Annual Report
14 - 15
Established 13 years ago through a partnership with the global media giant Turner Broadcasting, CNN Türk was granted American Turkish Society’s Corporate Partnership Award.
AT A GLANCE
In 2012, the DYH share out-performed the BIST 100 index.
Shareholders and Share Performance
Doğan Yayın Holding’s historical, authorized and issued capital as of December 31, 2012 and December 31, 2011 is as follows: December 31, 2012
December 31, 2011
Limit on registered capital
TL 3,000,000,000
TL 2,000,000,000
Issued capital
TL 2,000,000,000
TL 2,000,000,000
Limit on registered issued capital of Doğan Yayın Holding was raised to TL 3,000,000,000 on June 5, 2012. There are no privileged shares in Doğan Yayın Holding. As of December 31, 2012 and December 31, 2011, Doğan Yayın Holding’s shareholders and their share ratios were as follows:
Shareholders
Share (%)
December 31, 2012 (TL thousand)
Share (%)
December 31, 2011 (TL thousand)
Doğan Holding(*)
75.59
1,511,829
75.59
1,511,829
2.31
46,183
2.31
46,183
Doğan Family Adilbey Holding A.Ş.
(**) (***)
Publicly traded on Borsa İstanbul (****) Issued capital Adjustments to issued capital Total (*)
0.15
3.000
-
-
21.95
438,988
22.10
441,988
100.00
2,000,000
100.00
2,000,000
95,781
95,781
2,095,781
2.095,781
As of December 31, 2012 and December 31, 2011, out of the 75.59% of DYH shares controlled by Doğan Holding, 19.00% have an “open” status.
As a result of the purchasing transaction of 3,000,000 shares at Borsa Istanbul on September 5, 2012, Adilbey Holding A.Ş. holds a 0.15% (TL 3 mn) shares in the share capital of Doğan Yayın Holding.
(**)
(***) Doğan Yayın Holding’s 3,000,000 shares with “open status” and each with a price of TL 1, has been acquired by Doğan Holding (parent company of the Group) from Adilbey Holding A.Ş. on February 20, 2013, at the weighted price formed in the first session of the stock exchange, within the margins outlined in Borsa Istanbul’s “Regulation on the Establishment and Functioning of the Wholesales Market.” Each share was purchased at TL 0.86 in cash, outside of Borsa İstanbul. As a result of the said transaction, announced to the PDP on February 20, 2013, Doğan Holding’s stake in Doğan Yayın Holding became 75.74%. (****) As per Capital Markets Board’s Resolution dated July 23, 2010 and numbered 21/655 and according to the records of the Central Registry Agency, 20.95% of Doğan Yayın Holding are in free float as of December 31, 2012 (December 31, 2011: 20.57%). As of December 31, 2012, 41.11% of Doğan Yayın Holding shares (December 31, 2011: %34,01) are publicly available.
Upon the resolution dated April 8, 2011 by the Board of Directors of Doğan Yayın Holding, the Company’s TL 1 billion of issued capital (within a registered capital ceiling of TL 2 billion) was increased in cash by 100% to TL 2 billion and this transaction was registered in the Trade Registry on July 6, 2011. Adjustment to share capital represents the difference between cash and cash equivalent contributions to the total amounts adjusted for inflation added to issued share capital issued and amounts before inflation adjustment.
16 - 17
doğan yayın holding 2012 Annual Report
Share Performance In 2012, the BİST 100 index rose by 53%, whereas the Doğan Yayın Holding share outperformed it by rising 56%. As for the other DYH Group shares, Hürriyet Gazetecilik increased by 31%, Doğan Burda by 29% and Doğan Gazetecilik by 1%. The closing share prices of Group Companies were as follows, as of December 31, 2012: Doğan Yayın Holding A.Ş. Share Price: TL 0.78
Hürriyet Gazetecilik ve Matbaacılık A.Ş. Share Price: TL 0.92
Number of Shares: 2,000 million
Number of Shares: 552 million
Market Cap: TL 1,560 million (US$ 873 million)
Market Cap: TL 508 million (US$ 284 million)
BİST Ticker Symbol: DYHOL
BİST Ticker Symbol: HURGZ
Doğan Gazetecilik A.Ş. Share Price: TL 1.51
Doğan Burda Dergi Yayıncılık ve Pazarlama A.Ş. Share Price: TL 3.48
Number of Shares: 105 million
Number of Shares: 19.6 million
Market Cap: TL 159 million (US$ 89 million)
Market Cap: TL 68 million (US$ 38 million)
BİST Ticker Symbol: DGZTE
BİST Ticker Symbol: DOBUR
AT A GLANCE
In 2012, we preserved our robust financial structure and leadership in the advertising market, by remaining the strongest Turkish media brand in all our business lines.
MESSAGE FROM THE CHAIRPERSON
Doğan Yayın Holding’s Esteemed Investors and Shareholders, Business Partners and Employees,
DYH Corporate Governance Ratıng 2011
2012
(ISS Corporate Services)
8.87
9.00
Following impressive growth performance in 2010 and 2011, the Turkish economy undertook a soft landing in 2012, closing the year with a 2.2% growth rate. While fluctuations continued in the world economy in 2012, the prudent and disciplined economic measures implemented in Turkey caused a deceleration of the growth rate, but led to positive results in terms of financial stability. Favorable development in the Turkish economy in 2012 was experienced as the drop in the current account deficit. In 2011, the ratio of the current account deficit to national income had approached 10%, thus appearing as a critical problem that needed to be tackled with care. According to data from the Central Bank of Turkey, the 2012 current account deficit was US$ 28,157 million less than that of the previous year and fell to about 6% of the national income by the end of the year. This sharp fall was a clear response to questions whether Turkish economic stability would endure. The diversification of export markets and the rise in exports despite the contraction of trade with the severely crisisstricken European Union pointed to what can be achieved when Turkish entrepreneurs follow the right foreign trade policies. Despite this development, however, the current account deficit still remains one of the most critical problems of the Turkish economy.
According to the Turkish Statistical Institute, in 2012 the consumer price index rose by 6.16% and the producer price index by 2.45%. The CPI fell to its lower level in 25 years and the PPI dropped to its lowest level in 44 years. The international credit rating firm Fitch Ratings upgraded Turkey’s credit rating to investment grade strengthening our belief that foreign capital inflows to Turkey will increase in 2013 and that new investments will add more value to the economy. Our hope is that the private sector will sustain its dynamism in terms of employment and growth with its innovative vision and ambitious investments. As for 2013, we see that the global economy is giving signals of recovery; we believe that growth expectations are more optimistic than in 2012. The Medium Term Plan anticipates that the economy in Turkey will grow by 4% in 2013; we expect the Turkish economy to grow by 4.5%. As a media group, we observed that in 2012 the national advertising market expanded by 7.4% in Turkish lira terms. This stands out as yet another indicator of successful Turkish economic performance, especially in light of data those points to a drop in advertising investment in developed countries. The breakdown of ad investment by the media shows that TV channels get the highest share, followed by newspapers and Internet increases its share daily.
In 2012, we took steps to adapt to the transformation within the economy and media sectors, preserving our robust financial structure and leadership in the advertising market while remaining the strongest Turkish media brand in all of our business lines. Our consolidated sales revenue increased by 8% to TL 2.5 billion and our operating profit before income and expenses from other operations rose by 81% toTL 152 million. The Company’s market capitalization rose by 66% to reach US$ 873 million. In the light of this performance, Fitch Ratings confirmed our local and foreign currency credit rating as “B+” and upgraded our outlook from “stable” to “positive.” Another international credit rating agency, ISS Corporate Services, revised our corporate governance rating upwards from 8.87 to 9.00, out of 10. To keep abreast of the latest communication technologies and ensuing new business models, the Company revised its Broadcasting and Publishing Principles, first disclosed to the public in 1999. We updated the document, divided it into categories of publishing, broadcasting and social media and then shared it with the public at large. In order to ensure the oversight of these principles, we set up a new Broadcasting and Publishing Board, representative of a large section of society. Running all operations utilizing corporate citizenship awareness, DYH made significant contributions to the social development of Turkey in 2012.
doğan yayın holding 2012 Annual Report
The Aydın Doğan Foundation continued efforts to promote education, the arts and freedom of expression. As part of the “No to Domestic Violence!” campaign, which completed its eight year, DYH plays an active role in efforts to draft laws and regulations to prevent violence against women. In this regard, various events were held jointly with the Ministry of Family and Social Policies, Ministry of EU Affairs, General Directorate for Women’s Status and NGOs. The conferences, workshops and TV programs organized by the Holding throughout the year helped raise public awareness of domestic violence. In the light of these developments, we are hopeful and excited about 2013. The ratio of advertising spending to GDP is still very low in Turkey compared to developed economies, indicating the great potential for growth in this field. Doğan Yayın Holding will keep a close watch on developments in the world and continue to invest heavily in digital broadcasting. We will sustain our large footprint in publishing and broadcasting through successful risk management, productive business processes a robust financial structure and a modern broadcasting and publishing approach in 2013. The entire Doğan Yayın Holding Family will continue its sustainable and profitable growth drive into 2013 and will add value to society and the economy. Best regards,
Y. BEGÜMHAN DOĞAN FARALYALI Chairperson
18 - 19
AT A GLANCE
In 2012, our consolidated sales revenue grew by 8% to reach TL 2.5 billion, as a result of the rise in the digital platform and ADSL subscribers.
MESSAGE FROM THE CEO
Esteemed Shareholders,
2,338
2,526
In 2012, the turmoil in the global economy and the recession in the Euro Zone reached alarming levels. It is not possible to paint an upbeat picture for the coming period; however, Turkey managed to preserve its macroeconomic equilibrium despite the global uncertainty thanks to its robust financial structure and decisive fiscal policies. The Turkish economy grew rapidly until the last quarter of 2011, before losing steam in 2012 due to the slowdown of the world economy; it closed the year with a growth rate of 2.2%. One of the most crucial developments in the Turkish economy last year was the contraction of the current account deficit resulting from a 21% drop in the trade deficit. Despite this development, however, the current account continues to be a critical issue for the Turkish economy. Another important development was the faster-than-expected drop in the inflation rate. Our hope is that 2013 will be a vibrant period during which profitable investment and partnership opportunities arise in the Turkish economy. The Turkish advertising market continued its expansion; it is estimated that the overall market grew by 7.4%, from TL 4.6 billion in 2011 to TL 5.0 billion in 2012. The TV advertising market rose by 7%, while the newspaper advertising market shrunk by 1%.
Sales Revenue TL million 2011
2012
In 2012, Doğan Yayın Holding’s publishing companies maintained their advertising revenue at the previous year’s level. In addition, despite the fall in newspaper and magazine circulation figures, increases in newspaper and magazine cover prices enabled companies to preserve their domestic circulation revenue.
Another important development for the Group concerned the Hürriyet newspaper’s real estate sale. Hürriyet completed the sale of its headquarter for 28 years, Hürriyet Medya Towers, including land and buildings on February 2012; and the sale of plots of land in Esenyurt in the last quarter of 2012. D-Smart, which operated under our subsidiary Doğan TV Holding since 2007, repositioned the brand Smile as “D-Smart Net” under the umbrella of D-Smart in May 2012, to create an entertainment platform which offers subscribers Internet and TV from a single source. As one of Turkey’s leading digital broadcasting platforms, D-Smart undertook new investments throughout the year in line with the new market dynamics and increased the number of Pay TV subscribers by 44% over the previous year to 872,000. The rise in the subscription revenue of D-Smart had a very positive effect on the Company’s broadcasting operations. DYH views digital media as a very crucial medium and continues to undertake investments in this field. The newspaper Hürriyet initiated a project dubbed “Go 2015 – Shaping the Future” with a view to integrating the editorial departments of Hürriyet and the Hürriyet Internet Group. In the new media order, we aim to reach out to our readership via every platform possible. In the field of digital media, we rolled out the premium video content service NETD in late 2012 offering services via Internet. D Prodüksiyon and InDHouse, two of Turkey’s leading production companies under the umbrella of Doğan TV Holding, continue to enhance content production. Additionally, we have taken important steps toward expanding our “entertainment”
product range through our radio stations, teleshopping companies and other firms such as DMC. In 2011, we decided to exercise the rights granted within the framework of Law No. 6111 on “Restructuring of Certain Receivables.” Within this scope, a portion of the calculated debt was paid in advance; and following eight installments, the remaining portion together with the ninth installment was paid on September 28, 2012. As such, the Group does not have any more liabilities falling within the scope of the Law No. 6111. Year 2012 was a time in which we reinforced our strong corporate governance practices. In this context, ISS Corporate Sevices Inc. (ICS), an international rating firm authorized to carry out ratings in Turkey as per Capital Markets Board’s (CMB) relevant regulations and resolutions, raised DYH’s corporate governance rating from 8.87 to 9.00 out of ten. An assessment of 2012 with regard to consolidated financial results reveals that consolidated sales revenue grew by 8% to reach TL 2.5 billion, mainly led by the rise in the digital platform and ADSL subscription revenues of our companies. The operating profit, on the other hand, increased by 81% to TL 152 million. In 2011, the Company had posted a loss of TL 1,194 million, due to one-off expenses stemming from the tax liability and increased tax basis as per the Law No. 6111. In 2012, however, favorable operational developments and gain on real estate sales allowed us to announce a net profit of TL 197 million.
doğan yayın holding 2012 Annual Report
A comparison between developed countries and Turkey in terms of the media sector’s total assets and advertising revenue shows that Turkey still has a vast potential. With a view to sustaining our pioneering and leading position in the domestic print and broadcasting segment, the Holding has aligned the advertising revenue target for 2013 with the growth rate of this sector in Turkey. In 2013, our objective will be to focus on online media, expanding daily both globally and domestically, via merges and/ or acquisitions and tap into this huge potential. In this regard, we are keeping a close watch on this area and evaluate profitable investment opportunities in all fields including the international media industry. In the upcoming year, Doğan Yayın Holding will sustain its strong position in broadcasting and publishing through its prestigious pioneering media brands and will continue to support social advancement. I would like extend my gratitude to our employees who added value to the Group with their ideas and labor throughout 2012, as well as to our investors, social and economic stakeholders, readers and viewers, who supported us through thick and thin. Best regards,
YAHYA ÜZDİYEN CEO
20 - 21
OPERATIONS IN 2012
In 2012, DYH raised its consolidated sales revenue by 8% to TL 2.5 billion and its operating profit by 81% to TL 152 million.
Highlights of the Year
The year 2012 was a period during which all companies under the Doğan Yayın Holding reinforced their position in the Turkish media industry. As a result of DYH’s robust financial structure and right investment decisions, the international credit rating agency Fitch Ratings confirmed DYH’s local and foreign currency credit rating at “B+” and upgraded its outlook from “stable” to “positive” on November 14, 2012.
In 2012, consolidated advertising revenue remained more or less unchanged from the previous year (TL 1,291 million). Consolidated revenue from publishing rose by 2% to reach TL 1,400 million. Circulation and printing revenue, on the other hand, increased by 3% in 2012 to TL 39 million; although circulation figures dropped, it was more than compensated for with a rise in sales prices and printing revenue.
As for DYH’s financial performance in 2012, the Company increased its consolidated sales revenue by 8%, from TL 2,338 million in 2011 to TL 2,526 million in 2012; publishing accounted for 55% of DYH’s consolidated revenues, broadcasting 42% and other operations 3%.
Consolidated revenue from broadcasting was up by 18% over the previous year, at TL 1,070 million. Previously broadcasting revenue consisted mainly of advertising revenue, after Smile, ADSL subscription revenue was placed under the category of “Other
Revenue,” the overall weight of subscription revenue in this segment increased. As a result of a rise in the digital platform, ADSL subscription revenue and sales to Star TV, the “Other Revenue” category under broadcasting, went up by 60% to reach TL 465 million in 2012. Consolidated gross profit rose by 12% over the previous year to TL 770 million and operating profit increased by 81% to reach TL 152 million while EBITDA grew by 29% to TL 324 million.
22 - 23
doğan yayın holding 2012 Annual Report
In 2012, TL 143 million gain from the sale of the Hürriyet building and plot of land had a positive contribution on the bottom-line.
In 2011, due to a controversial tax liability and increased tax basis, the Company had “Net Expenses from Other Operations” of TL 1,088 million. However, the TL 143 million in profit arising from the February 1, 2012 sale of the Hürriyet building and plot of land as well as TL 46 million received as the indemnity for the dissolution of the Turner share option contract, brought the “Net Income from Other Operations” to TL 169 million in 2012. Due to the drop in financial expenses emanating from foreign exchange rate losses, the Company posted net financial income of TL 2 million – instead of last year’s TL 299 million in “Net Financial Expenses.”
In 2011, the net loss for the period was TL 1,194 million, in 2012 there was a net profit of TL 197 million thanks to positive operating profit, gain on asset sales and net financial income. In 2011, the Company and its subsidiaries (direct or indirect) had tax liabilities arising from Law No. 6111. Within this scope, a portion of the calculated debt was paid in advance and a total of eighteen installments was set for the remainder of the payments. But, remaining portion together with the ninth installment was paid on September 28, 2012. As such, the Group or its direct or indirect subsidiaries do not have any more liabilities falling within the scope of the Law No. 6111.
From January to December 2012, DYH made fixed asset expenditures of TL 240 million (various technical equipment, computers, software, copyrights etc.; except investment property). This corresponds to an 8% decline versus the previous year. In 2012, net consolidated debt stood at TL 1,338 million. However, this figure is expected to fall in 2013, thanks to collection of the receivables from the subsidiary and real estate sales transactions took place in 2011 and 2012.
OPERATIONS IN 2012
DYH continued its pioneering role in the Turkish media sector in 2012 with its strong brands in both publishing and broadcasting media.
DYH AND THE TURKISH MEDIA SECTOR
Media advertising market in Turkey ın 2012 In 2012, the Turkish advertising market continued to expand, growing from TL 4.6 billion in 2011 to TL 5.0 billion in 2012, corresponding to 7.4% growth. As for the evolution of advertising spending by different media throughout the year, television had the highest share with 51%. Accordingly, advertising spending increased by 7% over the previous year to reach TL 2,517 million.
Having capped the previous year with a volume of TL 1,031 million, the newspaper advertising market had an estimated 1% contraction in 2012 to drop to TL 1,024 million. Newspapers face competition from the Internet. Despite this drop in advertising spending however, newspapers remain the second most popular advertising channel for advertisers.
The third largest advertising channel after television and newspaper, Internet continued its consistent and swift growth through 2012. The online advertising spend expanded by 24% to TL 740 million as of year-end. The Internet increased its share in overall advertising spending to 15%, becoming the fastest growing advertising channel.
Estimated Advertising Spending in Turkey, by Segment (TL million)(*) 2012
2011
Change YoY (%)
TV
2,517
2,349
7.2
Newspaper
1,024
1,031
(0.7)
Internet
740
596
24.1
Outdoor
383
359
6.5
Radio
131
119
10.3
Magazine
123
120
3.0
56
58
(3.4)
4,974
4,632
7.4
Cinema Total (*)
Estimated figures by the DYH Advertising Platform.
Advertising Spending by Sector 2012 Share (%)
Change YoY (%)
Food
8.7
4.6
Finance
8.6
30.7
Telecoms
7.9
(18.3)
Construction
5.9
(8.2)
Automotive
5.6
5.4
Media
5.0
13.2
Retail
5.0
11.3
Cosmetics
4.5
20.1
Beverages
3.7
15.8
Furniture
3.2
(0.8)
Other
41.9
10.8
Total
100
7.4
Source: DYH Advertising Platform
The color of the agenda
Doğan Yayın Holding’s daily newspaper Hürriyet is one of Turkey’s major media brands with a 450,000 circulation, a 65-year history, influential columnists and strong principles. Hürriyet not only maintains a close watch on the agenda, but actually sets it. The newspaper also continuously expands its readership profile through digital innovations.
OPERATIONS IN 2012
Since its inception in 1948, Hürriyet leads the way in terms of modern and authentic journalism.
PUBLISHING
Newspaper Publishing Hürriyet: A reputable strong brand in the Turkish media, Hürriyet has been leading the way in terms of modern and authentic journalism ever since its inception in 1948. According to the Turkish Press Readership Survey by Press Readership Research Board (BİAK), Hürriyet has vast access to the A and B socio-economic segments which have a high propensity to consume. The newspaper reaches out to approximately 1.8 million individuals every single day. With the belief that modern journalism must cover all colors of life, the Newspaper issues supplements which add value to the daily life of its readers. As one of the key factors differentiating Hürriyet in the Turkish media, these supplements also provide new alternatives to advertisers. Posta: Reaching out to the masses with its continuously expanding and developing content since its foundation in 1995, Posta maintains its
reputation as the best-selling and most-read newspaper in Turkey. Radikal: Radikal is the choice of individuals who want to receive in-depth and independent coverage in fields ranging from internal affairs to culture and the arts. Published by Hürriyet Group since October 2010, Radikal has always been the destination of originality in the Turkish press with its independent and extensive content. Fanatik: Targeting sports enthusiasts of all ages, Fanatik has a prestigious position in the Turkish sports media with its rich and high-quality content. First published on 1995, Fanatik is the specialist sports paper that first comes to mind in Turkey. Hürriyet Daily News: Turkey’s oldest newspaper in English, the 50-year old Hürriyet Daily News has become the primary source of local news for expatriates and diplomats, thus filling an important gap
in the Turkish media. The Newspaper has a significant know-how since it is the oldest English language newspaper in Turkey. TME: TME is a classified advertising publisher with daily and weekly newspapers, magazines and websites, notably in the fields of real estate, automotive, career and human resources. TME Newspapers Iz Ruk v Ruki: The title Iz Ruk v Ruki, which translates as “from-hand to-hand” is a daily classified ads paper in real estate, vehicles, career and other service areas. Since 1992, it has ranked among the most powerful and leading brands in Russia and Eastern Europe. Using a widespread distribution network covering 100 cities in Russia, Iz Ruk v Ruki is also published in Belarus and Kazakhstan. As of December 2012, the paper’s total monthly circulation was more than 4 million on average.
26 - 27
doğan yayın holding 2012 Annual Report
In May 2012, Doğan Burda launched the Turkish version of the international magazine Popular Science, which is published in five languages in nine countries
Aviso: First published in 1991, Aviso is a daily classified ads paper published in Ukraine addressing real estate, vehicles, career and other service areas and has a monthly circulation average of approximately 300,000. Expressz: A classified ads publisher founded in 1984, Expressz has the highest brand recognition in Hungary with its daily newspapers and magazines. Expressz magazine holds a leading position in the Hungarian classified ads market. Addressing the areas of vehicles, commercial vehicles and real estate, Expressz products reach about 85,000 individuals across Hungary every month. Oglasnik: Founded in 1989 in Zagreb, Oglasnik is one of Croatia’s most important classified ads publishers. The publishing group incorporates three weekly publications which list about 250,000 ads and reach 125,000 individuals each month.
Magazine and Book Publishing Doğan Burda Magazine: Turkey’s leading company in magazine publishing with rich content and a professional workforce, Doğan Burda Magazine has operated under the name of Doğan Burda Dergi Yayıncılık ve Pazarlama A.Ş. since July 2005. Doğan Burda Magazine currently publishes 27 different titles, namely four weekly, 21 monthly and two special-edition magazines. In May 2012, Doğan Burda successfully launched in Turkey the international magazine Popular Science, published in 5 languages and 9 countries. By the end of December 2012, Doğan Burda had published the sub-banners of its 14 main magazine brands. Doğan Egmont: Launched in 1996 by a team embracing the philosophy “Reading is the future”, Doğan Egmont is a leading publisher of magazines
and books for children aged 0-14. The Company currently has more than 1000 books and 23 magazines in its vast portfolio. Doğan Kitap: Active since 1999, Doğan Kitap publishes in Turkish the select works of world literature simultaneously with their international editions. Maintaining its leadership in the world of literature with its futurelooking perspective, Doğan Kitap has a successful profile, as shown by its books topping best-seller lists and sales figures. Dergi Pazarlama Planlama (DPP): Maintaining its unrivalled leadership in magazine marketing and planning, DPP has earned an esteemed reputation in the sector through its foreign partnership and strategic achievements.
OPERATIONS IN 2012
DHA, is a specialized news agency that meets the needs of not only Group publications but also the entire Turkish media with its team of experienced correspondents and news photographers.
PUBLISHING
News Agency Doğan Haber Ajansı (DHA): Built on the know-how of Mil-Ha and Hürriyet News Agency, DHA was established in 1999 under Doğan Group. It is a specialized news agency which meets the needs of not only Group publications but of the entire Turkish media with a team of experienced correspondents and news photographers. Distribution, Printing and Trade Doğan Dağıtım (Yaysat): The company is responsible for the country-wide distribution of 23 national and 11 regional newspapers; nine daily, 25 weekly, four bi-weekly, 127 monthly, 219 bi-monthly and several other periodical domestic magazines and 589 foreign publications. Doğan Dağıtım is the widest-reaching media distribution network in Turkey, delivering this vast range of publications to the narrowest corner of Turkey. Doğan Printing Center (DPC): The largest printing facility in Turkey in terms of its advanced technology, production techniques, machinery park and production capacity, Doğan Printing Center (DPC) well-known across the world newspaper industry. The Company has six print facilities in Turkey and one in Germany. DPC prints the newspapers, weekly and monthly magazines of the Doğan Yayın Holding as well as non-Group magazines and their supplements.
Doğan Ofset: With a high printing capacity Doğan Ofset is a key player not only in Turkey, but also across the Middle East and Balkans. The company prints magazines, supplements, brochures and inserts. Doğan Ofset provides top-notch services with its quality focus approach, new machinery park, customized solutions and efficient distribution network. Doğan Media International: Doğan Media International was founded in 1999 to conduct DYH’s European operations. The Company prints 23 periodical titles published on four continents in eight languages, Hürriyet in particular. Aside from Hürriyet, the plant prints daily international financial newspapers such as The Wall Street Journal Europe, German and other national editions of The Financial Times, the American publication Stars&Stripes, regional editions of Germany’s bestselling newspaper Bild, leading German equine sports paper Sportwelt, as well as the Arabic publications Al-Ahram and Asharq Al-Awsat. Other titles published at different periods include The Polish Info&Tips, China Daily and People’s Daily from China, Korea’s Urishinmun, Macedonia’s Vecer, Rheinland-Pfalz region’s Rhein Hunsrück, as well as The Security Times and New Europe--two important publications highly regarded by opinion leaders. Together with these titles, the total number of the papers printed comes to 300,000 units per day.
Doğan Foreign Trade: Doğan Dış Ticaret ve Mümessillik A.Ş. primarily carries out the newsprint and printing materials imports. Online Media hurriyet.com.tr: The Hürriyet newspaper launched hurriyet.com.tr on January 1, 1997. One of the first Turkish newspapers to go online, Hürriyet maintained its leadership in digital publishing throughout 2012. As of yearend 2012, hurriyet.com.tr had two million daily and 24 million monthly visitors. posta.com.tr: Founded in 2009, Posta provides its readership with news about life through an original perspective in journalism. Closing 2012 with a monthly average of 4.7 million visitors, posta.com.tr ranks among the most visited news sites. Currently, posta.com.tr has about 66,000 followers on Facebook. fanatik.com.tr: Turkey’s leading sports website with a monthly average of over ten million visitors and 300 million page views, fanatik.com.tr has approximately 286,000 followers on Facebook. The website presents sports news with an authentic and highquality perspective. In addition to its online sports content, the website also offers an interactive platform for sports.
28 - 29
doğan yayın holding 2012 Annual Report
In 2012, hurriyetemlak.com increased the number of its visitors by 61% over the prior year to reach 3.5 million.
radikal.com.tr: The online face of the Radikal newspaper, radikal.com.tr is the first choice of an online readership keen on receiving in-depth information on every issue from foreign policy to culture and arts. The website not only offers a rich content but also the chance to pen blogs. It integrates the diverse opinions of Radikal readers into the newspaper’s content. hurriyetdailynews.com: The web site has 450,000 unique visitors on a monthly basis and around 60,000 of these visitors hail from overseas. Its content spans a wide range of issues such as politics, arts, economics, technology, sports and daily life. arabam.com: Visited by an average of 4.5 million people every month, arabam.com, led the way by introducing online classified ads in the automotive sector. The website has approximately 2.5 million users and hosts boasts some 160 million page views every month. In addition,
arabam.com has an estimated 140,000 followers on Facebook. yenibiris.com.tr: As one of Turkey’s leading human resource websites, yenibiris.com.tr increased the total number of résumés in its database from 13 million in 2011 to 14.5 million as of year-end 2012. The Company made groundbreaking achievements in online human resource services and according to December 2012 data by Comscore, it is the second mostvisited career and development website in Turkey. hurriyetemlak.com: As the real estate portal of Hürriyet newspaper, the website services a broad audience of professional realtors, construction firms, contractors and prefabricated home builders. As being the leading web site in real estate sector, its number of average unique visitors increased by 61% over the prior year to reach 3.5 million.
hurriyetoto.com: Launched in 2007, hurriyetoto.com is managed by the same team and infrastructure as hurriyetemlak.com. hurriyetoto.com continues to increase its daily visitors and page views. hurriyetaile.com: Hürriyet Aile addresses the concept of family in diverse aspects and covers many topics from the relationship between men and women to shopping, pregnancy, technological products, health and city guides. The website also brings its readers together with a group of prominent columnists and unique content. yakala.co: Launched in 2010, yakala.co provides information to Internet users about daily discounts, opportunities and coupons that can be used for various events at entertainment or culture and arts venues. Already, the website boasts a vast visitor base.
OPERATIONS IN 2012
Visited by an average of 4.5 million people every month, arabam.com, led the way by introducing online classified ads in the automotive sector.
PUBLISHING
Having merged with Piyasanet in 2012, bigpara.com is now Turkey’s largest finance portal with 1.9 million visitors.
Bigpara.com: Acquired by the Hürriyet Internet Group in November 2012 and later merged with Piyasanet, the website has counted 1.9 million visitors. With a fresh design and unique personal finance products, bigpara.com is Turkey’s largest finance portal. Mahmure.com: Acquired by Hürriyet Internet Group in November 2012, mahmure.com constitutes Turkey’s largest women’s network together with Hürriyet Aile and Kelebek. The website’s rich visuals, innovative design and high quality content help it stand out among its peers and create a loyal following among new generation women. Mahmure. com aims to become a medium that sets the trends and creates the agenda in categories such as fashion, beauty, career, healthy living, healthy nutrition and fitness.
Ekolay.net: Acquired by Hürriyet Internet Group in November 2012, ekolay.net shut down its services and continued broadcasting via its main categories. The website’s traffic continues to increase. Publishing Operations in 2012 According to data by Doğan Dağıtım and Turkuvaz Dağıtım, newspaper circulation across Turkey fell by 0.2% in 2012; the daily number of newspapers sold fell from 4,753 thousand in 2011 to 4,743 in 2012. In 2011, DYH’s average daily circulation of 1,157 thousand fell to 1,087 thousand in 2012, which corresponds to a market share of 23%. In 2012, the Hürriyet Group’s (Hürriyet, Radikal and Hürriyet Daily News) overall average daily newspaper circulation was 443 thousand, whereas Doğan Gazetecilik’s Posta and Fanatik sold a total of 645 thousand papers daily.
As for the Turkish market for magazines that sell ad space which includes Doğan Burda -, the number of magazines sold fell by 5.6% from the prior year to 20.4 million in 2012. Despite this contraction in the Turkish market, DYH capped the year 2012 as the leader of the magazine market. As a result of Doğan Burda’s efforts to enhance its current portfolio and strengthen its brands throughout 2012, the Company maintained its share of the magazine advertising market. Doğan Burda sold 6.2 million magazines in 2012, with four weekly magazines, 21 monthly magazines, two magazines with custom periods and 32 occasional magazines. If DYH’s other magazine-printing subsidiary Doğan Egmont is included, the overall magazine sales indeed increased by 1% over the prior year to reach seven million. DYH controls around 34% of the magazine market in terms of circulation.
30 - 31
doğan yayın holding 2012 Annual Report
Magazine Circulation Market Shares in the Year 2012 (%)
34% DYH
66% Other
Source: DPP & Doğan Burda Dergi Yay.
Breakdown of Average Daily Newspaper Circulation (%)
23% DYH
77% Other
Advertising, circulation and printing revenue are categorized under publishing revenue. DYH’s consolidated publishing revenue (before inter-segment eliminations) increased by 3% over the prior year in 2012, going from TL 1,415 million to TL 1,456 million. Despite the drop in newspaper and magazine circulation figures, the Company raised the prices of newspapers and magazines in late 2011 and mid-2012, which brought overall domestic circulation revenues above its level attained last year. Besides, with higher printing revenues, overall circulation and printing revenues rose by 3% on annual basis.
Independently Audited Publishing Operations (TL million)
2012
2011
Consolidated Revenue
1,456
1,415
2.9
55
29
87.0
EBITDA(*)
147
131
12.4
Net Profit/(Loss)
173
-231
-
Operating Profit/(Loss)
Growth (%)
EBITDA is calculated by DYH. All segment income and EBITDA figures are before inter-segment eliminations.
(*)
An analysis of the advertising revenue in 2012 shows that DYH’s domestic publishing ad revenue maintains its level in the previous year. TME enhanced its Internet services with a restructuring in 2011 and thus displayed a rapid growth performance in the Internet sector in 2012. As of year-end, TME managed to increased its total Internet revenue by 30% and brought their share in its overall revenue up from 16% to 25%.
The EBITDA of publishing operations increased by 12% over the prior year to reach TL 147 million in 2012. In 2012, the newsprint prices dropped by 1.4% to an estimated US$ 748/ ton. This drop was largely due to the fall in newsprint prices in dollar terms in the second half of the year 2012.
OPERATIONS IN 2012
Launched in August 2012 with the motto “My Channel” the national entertainment channel tv2 has gained a large audience even before its first anniversary.
BROADCASTING
Television Broadcasting National Channels Kanal D: With its dynamic, creative, novel and original approach, as well as its rich content, Kanal D is the leader of its sector. According to allyear average SBT data, Kanal D is the most-viewed TV channel in Turkey with an average audience share of 12.66% among all viewers during prime time. CNN Türk: Established as a joint-venture of Doğan Yayın Holding and Time Warner, on 1999, CNN Türk broke ground by becoming Turkey’s first television channel established through an international partnership. CNN Türk is also the first national channel managed outside of Atlanta, Georgia in the USA, broadcasting 24/7 in the national language, with a correct, impartial, reliable and objective journalism perspective. CNN Türk keeps abreast of the technological advancements in its sector and immediately translates these into practice. CNN Türk’s live presentations, program content and newsbreaks can be viewed anytime, anywhere via iPad, iPhone, Samsung, Nokia Ovi android and Blackberry applications. CNN Türk is also one of the first brands to be featured on Smart TV applications. In 2012, CNN Türk was granted American Turkish Society’s Corporate Partnership Award, given to promote support partnerships among American and Turkish companies. Besides, it has ranked first among all news channels
Kanal D TV Ratings (%) SBT (January 1 – December 31, 2012) Prime-Time
All-Day
16.65
12.66
TNS (September 17 – December 31, 2012) Prime-Time
All-Day
14.58
11.69
Source: SBT (January 1 – December 31, 2012) and TNS (September 17 – December 31, 2012) Prime Time (All Viewers) and All-Day (All Viewers) (*) After the Television Monitoring and Research Committee (TİAK) cancelled its rating measurement service contract with NAM A.Ş. (AGB Nielsen) on December 20, 2011, TNS A.Ş. started offering this service. On September 17, 2012, TNS started to publish its first data on the industry. SBT is a research company conducting the Television Rating Measurement (TAM) survey.
during three months in the last quarter of 2012, when TNS started publishing TV ratings, in the category “AB Target Audience- All-Day.” tv2: Launched in August 18, 2012 with the motto “My Channel,” the national entertainment channel tv2 has gained a large audience even before its first anniversary. Boasting a rich range of content, tv2 has positioned itself as an entertainment channel broadcasting popular foreign series, domestic productions, entertainment programs, animations and thematic films. Operations in Europe Kanal D Romania: Kanal D Romania launched its activities in Romania on February 18, 2007 with a national broadcasting license and quickly reached out to a vast audience. According to all-day viewing rates as of the end of 2012, Kanal D ranks third among urban viewers aged 18 to 49.
Euro D: Euro D was founded in 1996 to bring news from Turkey to Turkish expatriates in Europe. Euro D has been much acclaimed by a large Turkish audience due to its vast range of programs, with a colorful schedule ranging from news programs to entertainment and health programs to magazine. Digital Services D-Smart: Active under Doğan TV Holding since 2007, D-Smart ranks among Turkey’s leading digital broadcasting platforms. Continuously expanding its service packages in line with the new market dynamics, D-Smart offers special thematic channels and 32 HD channels, all national channels, hundreds of national and foreign channels transmitted on the Turksat satellite to more than two million D-Smart users every day. The D-Smart broadcasting platform enables viewers to select their choice in the menu among radio and interactive channels as well as all national and many domestic and foreign channels in addition to the thematic channels which it offers.
The color of success
Kanal D’s series Arka Sokaklar [Back Alleys] is one of Turkey’s most popular and successful series. Holding a mirror to society with its scenario and the successful performance of its actors, this crime series has reached 300 episodes.
OPERATIONS IN 2012
D-Smart continued to grow in 2012, while Pay TV increased its subscribers by 44% over the previous year to 872,000.
BROADCASTING
Launched in March 2012, D-Smart BLU allows D-Smart subscribers to access more content via Internet-enabled satellite devices.
Expanding through investments that combine Internet and digital broadcasting technologies and following the new market dynamics, D-Smart has united with the Internet operator Smile in 2010 in response to the needs of its subscribers. With this new cooperation D-Smart has created an entertainment platform that offers exclusive Internet and television services to consumers at favorable rates and through easy-to-access services. Continuously expanding services and product offers while keeping an eye on new market demands, D-Smart increased its HD channels to 32 during 2012. Additionally, it added new thematic channels to the platform to reach out to more consumers from diverse segments. The Company invested in sports content, extending its broadcasting contract with UEFA Champions League and UEFA Europe League for three more years and offering thematic sports
D-Smart Subscribers 2012
2011
D-Smart TV
871,565
606,837
D-Smart Net
341,305
245,094
content such as NBA, Formula1 and Moto GP to its subscribers. The D-Smart BLU, launched in March 2012, has allowed D-Smart subscribers to access even more content via Internetenabled satellites. All of these investments drove the growth of D-Smart in 2012 and the number of Pay TV subscribers rose by 44% over the previous year to 872,000. As of year-end 2012, D-Smart controls the second largest share in the digital platform market. Doğan Teleshopping: A distance sales company active via television broadcasting and the Internet, Doğan Teleshopping launched its activities in 2007 under the roof of DYH. The Company created the D Shopping tv channel to enable TV viewers to shop 24/7 without ever leaving the comfort of their homes.
D Shopping offers a full range of products, including electronics, kitchenware, healthy nutrition, beauty products and leisure activities. D-Smart Channels D-Smart Thematic Channels: Smart Çocuk, broadcasting educational films and series for children; Smart Spor, Smart Spor 2 and NBA TV that cover many sports disciplines such as soccer, basketball, fencing and sailing; Yeşilçam Smart and Smart SineTürk that feature the unforgettable films of the Turkish cinema as well as successful productions from the new period; Smart SineGold, Smart SineGold 2, Smart SineFest, Smart SinePlus and Movie Smart, featuring a range from top American movies to box-office films and masterpieces of the world
34 - 35
doğan yayın holding 2012 Annual Report
From the newest videos of the European and American music scene to the best example of Turkish music as well as concerts to youth and entertainment programs, Dream TV has had a vast following since its inception in 2003.
cinema; Dizi Smart and Max Smart showing the leading television series of the world; and Dream TV and Dream Türk representing the domestic and international music as well as entertainment, technology and the popular culture. Foreign Platform Channels: Foreign channels on the D-Smart platform include those featuring popular films and television series, sports, entertainment and children’s programs, namely: FX HD, Fox Crime HD, EuroSport HD, EuroSport 2, Fox Sports HD, Style Network, BBC HD, NBA TV HD, KidsCo, Luli and 24 Kitchen HD, Chasse&Peche, MyZen TV, Hde, Discovery HD Showcase, Animal Planet HD, Discovery Channel, Discovery World, Discovery Science, ID Investigation Discovery, Animal Planet, Da Vinci Learning, Scitech, Animaux, AB Moteurs.
Business Partner Channels: SinemaTV, SinemaTV 2, SinemaTV Aile, SinemaTV 1001. HD Channels: While introducing a new lease on life into digital platform management and combining its wide broadcasting range with technology and advantageous Internet campaigns, D-Smart has also invested in HD technologies and the rich content of its HD product, D-Smart HD. D-Smart’s HD channels presently include Smart SinePlus HD, Smart SineGold HD, SinemaTV HD, SinemaTV HD 2, SinemaTV Aile HD, SinemaTV 1001 HD, FX HD, FOX Crime HD, Dizi Smart HD, Smart HD / 3D, Max Smart HD, Hde, Discovery HD Showcase, Animal Planet HD, Travel Channel HD, Smart Spor HD, Smart Spor 2 HD, NBA TV HD, EuroSport HD, Fox Sports HD, Kitchen 24 HD, Kanal D HD, TV2 HD, Star
HD, ATV HD, A Haber HD, TRT HD, TRT 1 HD, Semerkand TV HD, BBC HD and Penthouse HD as new channels are added regularly every year. D-Smart launched 3D broadcasting to its product range with a special channel for the Champions League matches. Music channels Dream TV: From the newest videos of the European and American musical scene to the best example of Turkish music, from concerts to youth and entertainment programs, Dream TV has had a vast following since its inception in 2003. Dream Türk: Launched in 2004, Dream Türk offers its viewers the latest developments in the Turkish music scene through high quality videos. Dream Türk is among the most popular Turkish music channels.
OPERATIONS IN 2012
DYH’s consolidated broadcasting revenue increased 17% over the prior year to reach TL 1,090 million in 2012.
BROADCASTING
Radio broadcasting Doğan Yayın Holding’s radio broadcasts blend dynamism, quality and originality, via the channels Radyo D, CNN Türk Radyo and Slow Türk Radyo. In January 2012, the Holding sold Radyo Moda due to RTÜK’s restrictions on terrestrial broadcasting. consolıdated revenue
1,090 934
According to 2012 data, DYH Radio Group’s stations Slow Türk, Radyo D and CNN Türk Radyo had a total access rate of 14.53%. Slow Türk ranks third and Radyo D ranks tenth among the most listened radio stations of the country. Radyo D: Among Turkey’s first national radio channels, Radyo D airs Turkish pop music at world class standards via fullydigital systems.
broadcastıng TL Million 2011
2012
Doğan Radyo Group’s Total Radio Access Rates (*) 2012 Access (%) Radyo D
4.94
Slow Türk
9.08
CNN Türk Radyo
0.51
(*)
Source: KMG Research, Turkish Radio Measurement System data, February 2013.
Slow Türk: Established to offer the best love songs to the Turkish audience, Slow Türk has quickly become one of the most-popular radio channels by airing romantic songs throughout the day. CNN Türk Radyo: Available 24/7 on frequency 92.5, CNN Türk Radyo is a joint venture of DYH and Time Warner. CNN Türk Radyo broadcasts the TV channel CNN Türk’s news programs live to the radio audience with top quality journalism.
TV and Music Production D Productions: D Productions is one of Turkey’s most prominent production companies. The Company was established as ANS International in 1992 and joined the Doğan TV Holding family in 1998. Since 2005, the Company has continued to operate as D Yapım Reklamcılık ve Dağıtım A.Ş. D Productions produces series, programs, movies and advertisements while providing movie distribution services.
36 - 37
doğan yayın holding 2012 Annual Report
InDHouse: The Holding’s second production company is InDHouse; programs include “Ben Bilmem Eşim Bilir,” popular throughout Turkey and “Doktorum,” one of the best quality programs airing during morning hours. Kanal D Home Video: With its innovative structure, D Productions blends quality and diversity with the brand Kanal D Home Video, bringing the full movie experience to the homes of television viewers. Doğan Music Company (DMC): Founded in 2000, DMC is the producer of popular hit songs and the leader in the music industry with a 20% market share.
Online Services kanald.com.tr: According to data reported by ComScore in December 2012, the number of individual Kanal D users has reached 2,907,000. In 2012, kanald.com.tr maintained its position as Turkey’s most accessed television channel website. The website has reached a monthly viewing rate of 20 million videos. Kanal D renewed its iPad and iPhone applications and started broadcasting via the Android platform. Since 2012, Kanal D also continues its presence in social media through corporate accounts with a high number of followers and fans. cnnturk.com: CNN Türk not only sets an example for excellent online journalism with cnnturk.com in terms of speed and reliability, but also makes extensive use of social media accounts in this field.
With its visionary perspective, cnnturk.com is a pioneer that offers mobile applications compatible with all brands and models of devices, as well as Smart TV applications, thus broadcasting its entire content through all efficient media. NETD: Launched at year-end 2012, NETD is a premium video content service providing its services via Internet. NETD aims to deliver the content demanded by users in a very user-friendly and high quality way. NETD users can access all the episodes of their favorite series, the episodes that they miss, a periodically updated list of films, as well as documentaries, talk shows and entertainment programs.
OPERATIONS IN 2012
In 2012, Kanal D maintained its leadership in the All-Day category with its high rating performance.
BROADCASTING
Broadcasting Operations in 2012
Independently Audited Broadcasting (TL million)
2012
2011
Growth (%)
After the Television Monitoring and Research Committee (TİAK) cancelled its rating measurement service contract with NAM A.Ş. (AGB Nielsen) on December 20, 2011, TNS A.Ş. started offering this service. On September 17, 2012, TNS started to publish its data on the industry. DYH’s flagship company in broadcasting segment, Kanal D maintained its leadership in 2012 in the category “All Day” with a high rating performance.
Consolidated Revenue
1,090
934
16.7
Consolidated broadcasting revenue (before inter-segment eliminations) increased 17% over the prior year to reach TL 1,090 million in 2012. The uncertainties in the rating system had a negative impact on broadcasting ad revenues and therefore, the rise in consolidated revenue is due to increases in other revenue. The “digital platform subscription revenue and other revenue” categorized under broadcasting revenue rose by 60% over the previous year to reach TL 465 million.
Operating Profit/(Loss)
110
78
41.3
EBITDA(*)
189
142
33.0
Net Profit/(Loss)
104
-1,060
-
EBITDA is calculated by DYH. All segment revenue and EBITDA figures are before inter-segment eliminations.
(*)
The increase in this revenue is due to the rise in digital platform and ADSL subscription revenue and that due to the sale of Star TV on November 3, 2011, DYH’s sales to Star TV during 2012 were classified as sales outside the Group rather than the Group sales as in 2011. On April 30, 2012, the companies Doğan İletişim and Doğan TV Dijital merged under the corporate identity of Doğan TV Dijital. As a result of this merger, the financial results of Doğan İletişim, previously classified under “Other” were reported under DYH’s broadcasting section. Due to the comparison principle, the reporting note ending on December 31, 2011 were restated in this scope.
As a result of the said merger, broadcasting revenue, comprised mostly of advertising income before, showed a significant increase. With the contribution of an increase in Pay TV subscribers and the inclusion of Smile ADSL subscription revenues, the weight of subscription revenue in the segment as a whole increased. EBITDA, on the other hand, increased by 33% from the previous year to reach TL 189 million.
38 - 39
doğan yayın holding 2012 Annual Report
OTHER OPERATIONS
Financial Services Doğan Faktoring: Doğan Faktoring played a key role in eliminating customers’ possible payment problems as a result of large-scale risk analyses into commercial receivables and added significant value to DYH. Operations of “Other” Segment: As shares of Doğan Müzik Kitap Mağazacılık ve Pazarlama A.Ş. were sold to Doğan Holding on January 16, 2012, it was decided to stop following up the retail segment as a separate reporting unit within Doğan Yayın Holding.
In line with this decision, Doğan Dağıtım’s operations related to retail services started being reported under the “Other” segment as of the consolidated financial statements of September 30, 2012 onwards. Until December 31, 2011, some of these
operations were reported under publishing while others were reported under retail activities. In 2012, the consolidated revenue of this segment fell by 29%. EBITDA posted a TL 10 million loss.
Independently Audited Other (TL million) Consolidated Revenue
2012
2011
Growth (%)
60
85
-28
Operating Profit/(Loss)
-12
-22
-
EBITDA(*)
-10
-20
-
-4
-104
-
Net Profit/(Loss)
EBITDA is calculated by DYH. All segment revenue and EBITDA figures are before inter-segment eliminations.
(*)
SUSTAINABILITY
CSR projects implemented under the leadership of DYH companies and the Aydın Doğan Foundation not only create significant value, but also reach out to the wider masses and raise public awareness.
CORPORATE SOCIAL RESPONSIBILITY
DYH as a corporate citizen With the dynamism of its youthful population and a fast-growing economy, Turkey is developing further every day. In this process, corporate social responsibility projects have a crucial importance. Doğan Yayın Holding not only adds value to national employment and economy with the companies under its roof, but also bolsters social advancement with its social responsibility projects. As a corporate citizen DYH expended intense efforts in various fields in 2012 including the education of the youth, as well as the defense of the rights of women who play a critical role in social development. The Doğan Group believes that only welleducated generations with social responsibility and a high level of awareness can develop Turkey; it undertakes activities to help build a modern society respectful of universal values.
Corporate social responsibility projects implemented under the leadership of DYH companies and the Aydın Doğan Foundation not only create significant value, but also reach out to the wider masses and raise public awareness. “No! to Domestic Violence” Hürriyet’s “No! to Domestic Violence” campaign, launched eight years ago, went beyond social responsibility efforts, to become a solution partner vis-a-vis non-governmental organizations (NGO) and the Ministry of Family and Social Policies. The campaign has been raising awareness about domestic violence through publications, international conferences, workshops, concerts and other activities. It sets a precedent as one of the longestrunning social responsibility campaigns in the country. The campaign included numerous efficient initiatives, ranging
from opinion leadership to contributing to new legislation and established itself as one of the rarely seen long-running social responsibility efforts in Turkey. Emergency Helpline Established in 2007 within the scope of the “No! to Domestic Violence” campaign, in order to provide support on legal, psychological and safety issues to women who are victims of domestic abuse and violence, the Emergency Helpline is active 24/7. From October 15, 2007 until December 31, 2012, the Emergency Helpline was accessed by a total of 33,669 people;15,824 individuals received legal, corporate or psychological support on domestic violence. The Emergency Helpline assisted 11,420 victims or relatives and friends of victims. One in two victims complained of physical violence and about half of this group claimed to suffer from other types of violence, as well. Of the victims calling the line,
40 - 41
doğan yayın holding 2012 Annual Report
The Rightful Women Platform has over 100,000 members from associations as well as individuals to establish gender equality.
3.31% are males and the age group of the victims ranged from 2 to 90. Eighty percent of the victims suffer from violence at the hands of their spouses. The Emergency Helpline has assisted in 1,468 urgent cases to date. It sent police teams to most of the cases and directed a large number of the victims to shelters. The service receives calls from the 81 provinces in Turkey, Cyprus and 14 different nations (Germany, France, Austria, Azerbaijan, Belgium, the Netherlands, Australia, USA, Syria, Switzerland, Iran, Tunisia, the UK and Sweden). Awareness Raising Programs In 2012, the Company continued its efforts to raise public support on the solution of the domestic violence problem via conferences, workshops, TV programs, etc. In addition, within the scope of the “No! to Domestic Violence” campaign, local officials in Yozgat received Inter-institutional Cooperation Training on January 5 and 6, 2012 and Domestic Violence
Awareness Training on January 7, 2012. On February 22, 23, 29, 2012, upon their demand, managers and employees of Istanbul Social Services and Children’s Protection Agency attended seminars on domestic violence therapy. Partnerships As part of the “No! to Domestic Violence” campaign, Penti Socks, a stocking manufacturer had celebrities Ayşe Arman, Kenan Doğulu and Şebnem Bozoklu design stockings. The sales revenue from these specialty products were donated to the Emergency Helpline by Penti. “No! to Domestic Violence” campaign and the Rightful Women Platform -of which the campaign is a member- played an active role in drafting laws and regulations against the violence towards women. In this regard, diverse activities were organized jointly with Ministry of Family and Social Policies, Ministry of EU Affairs, General Directorate on the Status of Women and various NGOs.
100,000 text messages against violence An SMS project was initiated under the “No! to Domestic Violence” campaign to help cover the operating costs of the Emergency Helpline. The campaign signed contracts with the Aralık Foundation association and mobile carriers Turkcell, Vodafone and Avea; they received legal permits to collect donations via the SMS number 6643. Announced to the public at large via the website siddetekarsiyuzbinsms.com, the project not only generated funds against violence, but also raised awareness on the importance of making a nationwide contribution to the solution of a social problem. Rightful Women Platform The Rightful Women Platform is a social responsibility project by the Hürriyet newspaper on gender equality. The Platform supports the equal representation of women in parliament, their protection
SUSTAINABILITY
Focusing on the 50 years of labor migration from Turkey to Germany, the exhibition “Hürriyet Witnesses 50 Years of Turkish Emigration” drew visitors throughout 2012.
CORPORATE SOCIAL RESPONSIBILITY
from all kinds of violence, equality in the workplace, effective legal protection against gender discrimination and the immediate implementation of measures to guarantee gender equality. Numbering 100,000 including members of associations and individuals, the Rightful Women Platform was an active participant in efforts to draft laws and regulations against violence towards women in 2012. The Platform started a project focused on an Egalitarian Budget and held a number of meetings with relevant officials. A report published by the Workshop on an Egalitarian Budget organized at the Bilgi University with the participation of the specialists in the field was presented to the Gender Equality Commission of the Turkish Parliament and other relevant officials. Member institutions of the Right Women’s Platform (www.haklikadinplatformu.org) include:
The Women’s Assembly of the Princes’ Islands City Council; Adana International Business and Professional Women’s Association; Adana NGO Women’s Coalition Forum; Anatolian Entrepreneur Businesswomen Associations Federation (AGIFED); Education, Culture and Social Solidarity Association of Alucra; Ankara Business Women Entrepreneurs and Enhancement Association (ANGİKAD); Women Rights Center of Ankara Bar Association; Women’s Assembly of Antalya City Council; Women’s Joint Powers of Antalya City Council; Antalya TOAYDER Women’s Branch; Aralık Association; Ataşehir City Council; Bakırköy Life Magazine; Capital City Women’s Platform; CNN Turk; Association for Supporting Contemporary Living (ÇYDD); Hürriyet “No! To Domestic Violence” Campaign; Association of Construction and Women; Women’s Assembly of Kadıköy City Council; Women’s Assembly of Istanbul
Bakırköy City Council; Women Commission in Business; Business and Professional Women Association; KA-DER (Association for the Support of Women Candidates); Association for Research on Women’s Social Life; The Women Entrepreneurs Association of Turkey (KAGİDER); Women’s Shelter Foundation and Women Center Foundation (KAMER); the Marmara Group Foundation; NTV; Rengarenk Kırmızı Magazine; Association of Social Services Experts; Foundation of Turkish Women in Legal Professions; The Turkish Women’s Union; Federation of Women’s Associations of Turkey; Federation of Turkish Soroptimist Clubs; Turkish Enterprise and Business Confederation (TÜRKONFED); Turkish Industrialists’ and Businessmen’s Association (TÜSİAD); Uçan Süpürge (Flying Broom); Yeditepe Association of Women’s Solidarity; and 21st Century Education and Culture Foundation (YEKÜV).
42 - 43
doğan yayın holding 2012 Annual Report
Throughout the eight years since the launch of the “Dad, Send Me to School” campaign, 33 dormitories and 12 elementary schools were constructed by various individuals and institutions.
Hürriyet Witnesses 50 Years of Turkish Emigration The latest edition of the exhibition entitled “Hürriyet Witnesses 50 Years of Turkish Emigration” focusing on the 50 years of labor migration to Germany, was organized from December 17, 2012 until January 17, 2013 at two municipal buildings in MörfeldenWalldorf, where Hürriyet Europe’s facilities are located. Designed to showcase the 50 years of shared history of Turks and Germans through the lens of the Hürriyet newspaper, the exhibition was inaugurated by Jörg-Uwe Hahn, Vice Prime Minister of the Hessen State and Minister of Integration. The general public first saw the exhibition within the scope of the Turkish-German Business Forum organized on September 19, 2011 in Berlin. The exhibition, which was met with interest from the presidents of the two countries, was then reproduced at the Turkish House in Berlin; the Ruhr Book Fair in Essen; in
Berlin, Frankfurt and Köln as part of the 88th anniversary of the Turkish Republic; at the Nürnberg Train Station; Turkish Day in Oberursel; during Turkish-German Business Day in Düsseldorf; in German Olympic Sports Union’s Integration Day in Potsdam; and finally in MörfeldenWalldorf. The exhibition featured a Hürriyet cover page selected from each year from 1961 until 2011, as well as various photos and cartoons about migration from the newspaper’s archive. “DAD, SEND ME TO SCHOOL” CAMPAIGN Receiving a full education is critically important and in Turkey, girls especially are deprived of educational opportunities, Doğan Gazetecilik launched the social responsibility campaign in 2005 titled “Dad, Send Me to School” to play an important role in the upbringing of future generations. The project endeavors to transform girls, half of the population, into
productive individuals through education. Launched on April 23, 2005, “Dad, Send Me to School” campaign promotes the extension of education mobilization throughout Turkey and to make sure that all girls enroll in school. Within this framework, after the obstacles concerning girls enrolling in schools were identified, a series of activities were organized to raise awareness as well as to provide financial support. Hanzade Doğan Boyner, Chairperson of Doğan Gazetecilik, was the mastermind behind this comprehensive campaign. Many institutions supported the campaign by building dormitories and classrooms and giving scholarships in 15 cities identified as those with the greatest need. Doğan Gazetecilik, also, contributed TL 1 million to the campaign. The needs of students were immediately met with the vast support triggered by the mobilization.
SUSTAINABILITY
The “Dad, Send Me to School” campaign became a major mobilization with over 300,000 individuals making donations of more than TL 35 million.
CORPORATE SOCIAL RESPONSIBILITY
Throughout the eight years since the launch of the campaign, 33 dormitories and 12 elementary schools were constructed by various individuals and institutions; 10,524 girls received educational scholarships and the Aydın Doğan Foundation supported the campaign by building five dormitories for girls. The dormitories built provided shelter for nearly 3,500 girls each year. In addition, training seminars for 500 parents were organized in five cities around the theme “My Child and I” in collaboration with the Mother and Child Education Foundation (AÇEV); a two-day-long special training session was held for the administrators of Regional Primary Boarding Schools, jointly with the Turkish Association of Private Schools; Kamil Koç Busses sponsored the furnishing of the common areas in the dormitories and girls staying in dormitories were also offered music lessons. Moreover, a platform for multilateral cooperation was formed with universities, students of the Social Awareness module at Sabancı University visited Kars Merkez Sabancı Dormitory for Girls and Sarıkamış Milliyet Dormitory for Girls; Işık University included a Social Awareness module in its curriculum and organized various activities at Mardin Milliyet Dormitory for Girls. In cooperation with the Turkish Family Health and Planning Foundation seminars on hygiene and health and in cooperation with Eczacıbaşı seminars entitled “Our Body and Health” were organized for female students staying in the dormitories.
One week training programs were organized annually in Istanbul for administrators and teachers of the dormitories on topics like puberty, dormitory management, communication skills and budget management. In June 2012, the fifth edition of these training programs was held in Istanbul in cooperation with the Ministry of National education. Fifty dormitory managers and lecturers from various cities participated in the event. In this program, Yücel Onat from the Onat Academy gave a seminar about the “Dynamics of Change.” Güler Kazmacı presented a lecture on “Speaking Turkish Effectively,” Boğaziçi University’s Peace Education Practice and Research Center gave a seminar on “Communication without Violence” and Füsun Paşa offered a course on “Mentorship.” Participants who came to Istanbul for the training program also had the chance to visit the city’s historical and touristic hot spots. Within the scope of the “Dad, Send Me to School” mobilization, students staying at girls’ dormitories participate in a competition every year. The competition is held in the categories of painting, poetry and essay writing. The fifth edition was held on May 2012, around the theme “Life in the Dormitory.” At the award ceremony held in Istanbul, the top-ranking students were invited and given their awards. The newspapers under the roof of Doğan Gazetecilik also played a role in creating public opinion and raising social awareness on the issue. The articles published in our newspapers were influential in finding solutions to structural problems like the
appointment of female directors to dormitories for girls and the revision of the scholarship regulation. As a result of the educational workshops, the problems with regard to education were brought into Turkey’s agenda, solutions were offered for girls to continue their education; the findings of these workshops, where educational problems and relevant solution proposals were discussed at large, were shared with the public and the authorities at the Ministry of National Education. Numerous individuals and institutions eagerly support the “Dad Send Me to School” campaign for school children by donating their pocket money to Limak Holding who constructed a dormitory, the Hacı Ömer Sabancı Foundation and governorships, from the Turkish Union of Chambers and Commodity Exchanges, the Metro Group granting scholarships to girls and Garanti Bank, the Enka Foundation, Oriflame and Siemens. That the campaign turned out to be a major mobilization and over 300,000 individuals made donations of more than TL 35 million are clear indicators that the campaign profoundly appealed to the Turkish public. It is thought that the campaign’s added value is even more and that the number of girls enrolled in schools is even higher than estimated as families inspired by news articles may have decided to enroll their daughters in school. Another contributing factor is that school administrators who participated in the training programs paid visits to many villages and urged families to send their daughters to school.
The color of competition
The competition program “Ben Bilmem Eşim Bilir,” broadcast on Kanal D, has attracted a large following since it was first aired.
SUSTAINABILITY
To allow the visually and hearing impaired to follow TV series with comfort, Kanal D initiated an innovative practice and again broke ground in TV broadcasting.
CORPORATE SOCIAL RESPONSIBILITY
The 24th edition of “Heart Week” organized annually by the Turkish Heart Association was held with the collaboration of Radyo D in 2012.
CSS projects via TV broadcasts The Group’s TV broadcasting not only stands out with its original and lively content, it also contributes to social development via social responsibility activities. Kanal D makes its investment decisions in line with such a social responsibility consciousness. To allow the visually and hearing impaired to follow TV series with comfort, the Kanal D initiated an innovative practice and broke ground in TV broadcasting: Kanal D’s visual depiction service is provided in partnership with the Association for Visual Depiction. Aside from this groundbreaking practice, Kanal D also develops socially and environmentally sensitive projects within the scope of its television programming. For each episode of “Kayıp Şehir” [Lost City], one of Kanal D’s most popular series, 70 trees are planted in the Bozdağ district of Ödemiş, Izmir, by the Çekül Foundation.
The program “Doktorum” [My Medical Doctor] covered the medical cost for 2,500 patients and 200 surgical procedures. The competition show “Şans Kapıda” [Fate Knocks on the Door] allows modest families to obtain new house furniture; the “Ben Bilmem Eşim Bilir” [My Spouse Knows Best] gifted a library and books to the Sarıyer Bala Hatun Primary School and brought joy to pupils in other schools with various activities and presents. The program “Evim Şahane” [My Sweet Home] completely renovated the Gümüşdere Primary School and the family house of a participant from Sinop. Radyo D’s Sponsorships Add Value to the Society Keen on raising social awareness and speeding up development with its initiatives in education, health and sports, Radyo D sponsored numerous beneficial projects in 2012.
The 24th edition of “Heart Week” organized annually by the Turkish Heart Association was held with the collaboration of Radyo D in 2012. Radyo D was also the radio sponsor for the Traditional Tennis Tournament also organized by the Turkish Heart Association. On “World Heart Day” organized together with Kanal D, a cardiovascular heart survey was conducted for the public in Taksim. In 2012, Radyo D initiated the social responsibility campaign entitled ‘‘A Music Room in Every School’’ and renovated music rooms and donated musical instruments to state high schools in need. Furthermore, Radyo D also helped promote the kidney donation campaign of the Turkish Kidney Foundation, thus raising social awareness on the issue. Radyo D also became the radio sponsor for activities during the World Disabled Day on December 3 in Alanya.
46 - 47
doğan yayın holding 2012 Annual Report
The sixth edition of the Brands of Anatolia project was organized in 2012. The aim of the project is to raise brand awareness for Anatolian companies, the driving force of the Turkish economy.
In order to help protect stray animals and draw attention to the needs at animal shelters, Radyo D became a radio sponsor of the activities organized by the Yedikule Animal Shelter and the Day of Love. With a view to supporting the development and popularization of equestrian sport, Radyo D became the radio sponsor of the 2012 Winter Equestrian Festival held by the Turkish Equestrian Federation. Doğan Burda’s Social Responsibility Activities Successfully displaying its social citizenship awareness through social responsibility activities, Doğan Burda Magazine Group expended efforts to raise awareness in the fields of culture and arts, history, environment, nature and health throughout 2012.
Social Responsibility Leaders Every year Capital Magazine organizes the Social Responsibility Leaders Survey and identifies the social responsibility leaders of Turkey, thus creating a buzz about social responsibility. Corporate Social Responsibility The Ekonomist magazine issued a Corporate Social Responsibility supplement to raise corporate awareness of social responsibility and to encourage companies to undertake social responsibility activities. Support to Entrepreneurs Capital magazine organized the surveys “the Most Popular Companies” and “Capital 500” and the Ekonomist magazine held activities for “Women Entrepreneurs” and “The Businessmen of the Year” to support entrepreneurship and successful businessmen in 2012.
TOG Concept The book TOG Concept was published and distributed by the Maison Française magazine to support the Community Volunteers Foundation (TOG). TL 150,000 was collected in donations during the campaign, once again placing the TOG Concept project on the agenda. Brands of Anatolia The sixth edition of the Brands of Anatolia project was organized in 2012. The aim of the project is to raise brand awareness for Anatolian companies, the driving force of the Turkish economy. Pomegranate Seeds The magazine ELLE supported the responsibility project “Pomegranate Seeds” which aims to empower young women who have grown up in orphanages and now experience social and economic exclusion. This project assists them in joining the Turkish labor market.
SUSTAINABILITY
Every three months, Capital magazine issues the Capital Green Business supplement, with a view to supporting a sustainable economic structure and nature-friendly business life.
CORPORATE SOCIAL RESPONSIBILITY
Turkey’s Most Successful Young Executives Survey Every year the magazine Capital organizes the “Marching Toward Success” awards with the participation of CEOs aged 40 years and younger, bringing attention to and encouraging Turkey’s young professional executives. Raising Breast Cancer Awareness For the purpose of raising women’s awareness about breast cancer, the magazine Elele published two special stories concerning celebrities: one in the March issue, focusing on Deniz Uğur who survived breast cancer and the second in the October issue, around the concept “They are not afraid of breast cancer, because they eat healthy.” Smart Eating for Healthy Living Seminar The Modern Education Foundation’s “Smart Eating for Healthy Living Seminar” received media support from the magazine Hello!. Supporting Culture and Arts Doğan Burda magazines, especially Tempo, Elle, Hello! and Istanbul Life, added value to culture and art events by supporting institutions such as İKSV. ELLE Decoration, on the other hand, supported advancement in the field of design by sponsoring the EDIDA awards, as in previous years.
Green Business Every three months, Capital magazine issues the Capital Green Business supplement, with a view to supporting a sustainable economic structure and nature-friendly business life. Atlas Readers Come Together The Atlas magazine continued to organize readers’ meetings to draw attention to environmental issues. The magazine’s readers gave their support to the tea harvest in Rize, as well as to the pistachio nut harvest in Gaziantep via the “Pistachio Nut Abundance” campaign. Eco-Friendly Cars Pamukkale Project In the Pamukkale region, the Denizli Governorship together with AutoShow magazine organized a press tour entitled “Eco-Friendly Cars.” The Denizli Governorship has made the decision to limit access to certain areas to only zero-emission cars to protect cultural heritage and wild life. AutoShow’s “EcoFriendly Pamukkale” project is designed to support the Denizli Governorship by raising social awareness in this regard.
Doğan Burda represents Turkey at Cannes Lions Festival of Creativity “Cannes Lions International Festival of Creativity” is the largest organization in its field, bringing together over 10,000 professionals in communications, marketing and advertising from around the world. Doğan Burda is Turkey’s representative at this festival that supports creativity and opens horizons for young designers. Within the scope of this event, Doğan Burda carried out various activities to help develop creativity and the advertising industry in Turkey during 2012. Doğan Burda organized the Turkish selection for the “Young Lions” competition and took ten young communications professionals to the international festival to represent Turkey.
The color of taste
Setting a precedent in its segment with its publishing philosophy, Doğan Burda is the market leader among both the readership and the advertisers. The magazine Evim, under the roof of Doğan Burda, is Turkey’s best-selling interior design magazine and adds color and value to homes.
SUSTAINABILITY
Aydın Doğan Foundation was established in 1996 to contribute to the development of society and the country.
AYDIN DOĞAN FOUNDATION
The Aydın Doğan Foundation was established on April 15, 1996 to contribute to the development of the country and society. Engaged in a wide range of charitable activities, the Foundation carries out socially responsible activities in the fields of education, health, scientific research, culture, the arts and sports. The Foundation fulfills its responsibilities toward society of which it is a part, by organizing national and international competitions, distributing awards and building educational facilities. The Foundation preserves its strong administrative and financial structure to continue its activities oriented toward its current goals and to reinforce its relationships on the international stage.
Aydın Doğan International Cartoon Competition Open to professional and amateur cartoonists from all countries, the Aydın Doğan International Cartoon Competition is the world’s most prestigious competition of its kind. In 2012, the 29th edition of the Aydın Doğan International Cartoon Competition was held with no subject limitations; 944 artists from 80 countries participated with 2,945 entries. The Selection Committee awarded the first prize to Doğan Arslan from Turkey and Javad Alizadeh from Iran, the second prize to Vladimir Stankovski from Serbia and the third prize to Pawel Kuczynski from Poland. Throughout its history, a total of 7,800 artists from 136 nations participated in the Aydın Doğan International Cartoon Competition with about 70,000 entries.
Exhibitions As always, the cartoons considered worthy of exhibition to the Aydın Doğan International Cartoon Competition were presented to the general public, with special focus on university students during 2012. The award-winning cartoons were displayed in exhibitions organized in the USA, Adana, Muğla, Istanbul (6), Izmir, Ordu, Balıkesir and Ankara. Young Communicators Competition Aydın Doğan Foundation annually organizes the Young Communicators Competition to contribute to the education of qualified media employees and to support continuous development of the communications sector. A total of 1,351 students from the communications departments of 31 universities participated in the 24th edition of the Young Communicators Competition with 1,163 entries in the categories of publishing, broadcasting,
50 - 51
doğan yayın holding 2012 Annual Report
In 2012, Aydın Doğan Foundation organized the 24th edition of the Young Communicators Competition to contribute to the education of qualified media employees and to support continuous development of the communications sector.
advertising, public relations and online media. The selection committee awarded 155 students from 21 universities for 80 projects. The awardwinning students were also given the opportunity to join the programs designed for gaining professional knowledge and experience in one of the newspapers, magazines, or television or radio channels of Doğan Yayın Holding for the duration of one to three months. Aydın Doğan Awards Since its inception, Aydın Doğan Foundation has given awards to individuals who have made contributions to their nation, the world and humanity in different fields such as culture, arts, literature and science. These individuals are chosen among those at the very summit of their profession and have dedicated themselves to creativity. Aydın Doğan Awards were given in the short story category in 2012. The Selection Committee included Doğan Hızlan (Chairman), Nursel Duruel,
Prof. Dr. İnci Enginün, Semih Gümüş, Özcan Karabulut, Prof. Dr. Jale Parla, Hüseyin Su, A. Ömer Türkeş and Metin Celal Zeynioğlu. After an open discussion and elimination, the Selection Committee granted the Aydın Doğan Award to Selim İleri, for having carved out a unique position in the Turkish literature with short stories, novels and essays penned during a long writing career, creating an authentic idiom and style by embracing classical Turkish storytelling, for representing a transition between the tradition and the modern and for making contributions to Turkish literature with short stories. Education Since its establishment, the Aydın Doğan Foundation has launched many projects that helped to raise the quality of education in Turkey. Schools and dormitories were constructed by the Foundation and donated to the Ministry of National Education and include:
• Sema Işıl Doğan Elementary School, Gümüşhane • Atatürk University Aydın Doğan Private Elementary School, Erzurum • Aydın Doğan Elementary School, Göztepe-Istanbul • Yaşar ve İrfani Doğan Industrial Vocational High School, Kelkit-Gümüşhane • Milliyet Anatolian Teachers High School, Erzincan • Hürriyet Anatolian Vocational High School for Hotel Management, Erzincan • Aydın Doğan Vocational High School for Commerce, Istanbul • Aydın Doğan Vocational High School for Health, Istanbul • Gümüşhane University Kelkit Aydın Doğan Vocational School, Gümüşhane • Galatasaray University Aydın Doğan Auditorium, Istanbul • TEGV Sema and Aydın Doğan Education Park, Istanbul • Sema Doğan Park, KelkitGümüşhane
SUSTAINABILITY
Aydın Doğan Vocational Trade (Communications) High School continues to be one of the top choices of students scoring the highest points in the entrance exams.
AYDIN DOĞAN FOUNDATION
A supporter of numerous education-related projects and initiatives in Turkey, the Aydın Doğan Foundation pursues “high quality education for all” in Turkey. To this end, together with other prominent Turkish foundations, Aydın Doğan Foundation serves as an active member on the Board of the Education Reform Initiative.
• Aydın Doğan Center for Science and the Arts, Afyon • Nene Hatun High School Aydın Doğan Dormitory for Girls, Erzurum • Erzincan University Aydın Doğan Dormitory for Girls, Erzincan • Hacı Hüsrev Doğan Dormitory for Girls, Kelkit Gümüşhane • Aydın Doğan Dormitory for Girls, Kürtün Gümüşhane • Aydın Doğan Dormitory for Girls, Köse Gümüşhane • Aydın Doğan Dormitory for Girls, Şiran Gümüşhane • Aydın Doğan Sports Complex, Gümüşhane Kelkit Aydın Doğan Vocational School The foundation for the Kelkit Aydın Doğan Vocational School, part of Gümüşhane University, were laid on July 27, 2002; the school opened with 90 students on September 28, 2003. The number of students studying at the Vocational School reached 579 during the 2010-2011 academic year.
With the support of the Foundation, Kelkit Aydın Doğan Vocational School prioritizes education in English. The associate programs at Kelkit Aydın Doğan Vocational School are: Computer Technologies, Agricultural and Livestock Production, Electronics and Automation, Accounting and Taxation, Transportation Services, Lab Technologies and Veterinary Medicine. The Organic Agriculture Program, which is in high demand by many students in the region, is designed to raise local awareness about sustainable agricultural methods and help develop local agriculture. Aydın Doğan Vocational Trade (Communications) High School Established by the Aydın Doğan Foundation in 1998 and donated to the Ministry of Education, the name of the Aydın Doğan Anatolian Communications Vocational High School was changed to Aydın Doğan Vocational Trade High School with a resolution by the Ministry of
National Education. Holding its 11th graduation ceremony in 2012, the High School provides education in the fields of journalism, radio and television. As in previous years, the high school continues to be one of the top choices of students scoring the highest points in the entrance exams. Out of the 89 students who graduated in 2012, 85 were entitled to enroll in a university. In the 2012-2013 academic year, a total of 90 students were enrolled in the high school. Aydın Doğan Vocational Trade (Communications) High School also awards various prizes to the top three successful students at the end of the academic year. As in previous years, the Foundation continued to support the school with foreign language education, with a view to helping students enhance their level of English. Dormitories for Girls The following girls’ dormitories were constructed by the Aydın Doğan Foundation within the scope of the “Dad, Send
52 - 53
doğan yayın holding 2012 Annual Report
Sema Doğan Park enriches the cultural and social life in Gümüşhane.
Me to School” campaign that attracted much public attention; they were later donated to the Ministry of National Education: Nene Hatun High School Aydın Doğan Dormitory for Girls (Erzurum), Aydın Doğan Dormitory for Girls (Erzincan), Hacı Hüsrev Doğan Dormitory for Girls (Kelkit), Aydın Doğan Dormitory for Girls (Kürtün), Aydın Doğan Dormitory for Girls (Köse) and Aydın Doğan Dormitory for Girls (Şiran). In 2012, Aydın Doğan Foundation hosted students living in these dormitories, who were in the top three in their respective schools, together with coordinating teachers in Istanbul for four days, organizing visits to universities, cultural and historical sites. TEGV Sema and Aydın Doğan Education Park Aydın Doğan Foundation continues to support the Fındıkzade Sema and Aydın Doğan Education Park, established in 1996 by the Educational Volunteers Foundation of Turkey. Since its inauguration, Sema and Aydın Doğan Education Park have offered educational support to nearly 69,000 children. In order to develop children’s language and communication skills, contribute to their personal and mental development, foster their interest in the arts, science and technology and educate them in these fields, Sema and Aydın Doğan Education Park organizes various educational activities.
Sema Doğan Park in Gümüşhane Established to contribute to cultural and social life in Gümüşhane, the Sema Doğan Park was inaugurated on July 24, 2008 as a park able to host various activities. The covered areas inside the Park feature a hall that can accommodate cultural and entertainment activities such as receptions, concerts and conferences. The open area features an amphitheater, which can host movie screenings, theater plays, concerts, folkloric dances and conferences, as well as children’s playgrounds, basketball fields, tennis courts and picnic areas. Kalender Metin Doğan Community Kitchen Through the Kelkit Social Assistance and Solidarity Foundation, Aydın Doğan Foundation supports Kalender Metin Doğan Community Kitchen in Kelkit, where an average of 150 people receive daily hot meals during winter and 80 people during summer. Aydın Doğan Center for Science and Arts Aydın Doğan Center for Science and Arts endeavors to identify gifted or highly talented children at the elementary school or junior high school level and to make the best of their potential. The Center is an educational institution affiliated with the Ministry of National Education, General Directorate of Special Education Guidance and Counseling Services. Aydın Doğan Foundation continues to support the Center, where gifted children are educated by specially trained teachers using special instruments and programs.
Other Activities Education Reform Initiative (ERG) A supporter of numerous education-related projects and initiatives in Turkey, the Aydın Doğan Foundation pursues “high quality education for all” in Turkey. To this end, together with other prominent Turkish foundations, Aydın Doğan Foundation serves as an active member on the Board of the Education Reform Initiative. The Initiative undertakes research, advocacy and monitoring studies for the social and economic development of the country and educational reform. London School of Economics The Aydın Doğan Foundation figures among the sponsors of the Contemporary Turkish Studies Chair at the European Institute of the London School of Economics (LSE), one of the most prestigious educational institutions in the world. The chair will provide great support for the global recognition of modern Turkey. Third Sector Foundation of Turkey (TÜSEV) The Third Sector Foundation of Turkey (TÜSEV) was established in 1993 by 23 civil society organizations including leading foundations and associations in Turkey in order to develop the legal, fiscal and operational infrastructure of the third (non-profit) sector. Today, over 100 trustees of the Foundation collaborate under the roof of TÜSEV to encourage civil society initiatives in Turkey. As a founder and Board member of TÜSEV, Aydın Doğan Foundation supports its initiatives in active manner.
SUSTAINABILITY
Wastewater generated as a result of production process at DYH facilities is collected by a designated wastewater plant.
SUSTAINABLE GROWTH AND THE ENVIRONMENT
Paper Usage Recycled paper constitutes 28% of the overall paper usage at DYH facilities. In 2012, nearly 52,000 tons of recycled paper has been used for newspaper production. Biological Treatment The wastewater generated as a result of the production process at DYH facilities is collected by means of designated wastewater plant. After physical treatment (grills, oil filter and sand filter), the wastewater is also biologically treated. Following the biological treatment, in accordance with the standards set by official institutions, the disinfected wastewater is discharged into appropriate environments from discharge points approved by the same authorities. The treatment plant is managed by the relevant departments at the Company. The treatment process is also overseen by official institutions through regular collection of water samples. The treated sludge is kept at hazardous waste depositories in accordance with the standards set by the Ministry of Environment and then delivered to licensed companies for disposal at a certain fee. Chemical Treatment Following the request made by the Istanbul Water and Sewerage Administration (İSKİ), an integrated chemical and biological treatment plant was constructed at the press facilities. Domestic wastewater is discharged without treatment to İSKİ canals and mixed industrial wastewater is first treated in this plant and then discharged to the İSKİ sewage system according to discharging criteria.
Waste Paper Waste paper generated during production is stacked at collection points and sent for recycling to scrap companies licensed by the Provincial Directorate of Environment and Urbanization. Batteries and Accumulators Waste batteries are collected in the PE collection bins of the Portable Battery Manufacturers and Importers Association (TAP) and delivered to the relevant company for disposal. Waste accumulators are stored in concrete grounds that are impermeable to water and then delivered to licensed companies for recycling. Film Developing Liquids Fixing liquids collected from conventional film developing equipment that is still being used in some DYH enterprises are collected on site and in closed systems. These solutions are then delivered to licensed companies for the recovery of silver. Waste Aluminum Plates After they are cleaned with special fabric, aluminum plates used for printing are collected at waste collection points and then delivered to collection/ recycling companies licensed by the Ministry of Environment for recycling. Waste Chemicals The reservoir water and solvents used in printing are collected separately on site. The solvents are collected into drums which are kept in plastic hazardous waste depositories in accordance with the standards set by the Ministry of Environment and then sent to licensed companies for disposal at a certain fee.
Treated Sludge Despite domestic treatment, treated sludge from biological treatment plants is considered hazardous; it is sent to licensed companies for proper disposal. Waste Plastic Drums and Metal Barrels Drums and barrels of chemicals used in production, such as reservoir water, solvents and oils (contaminated waste) are stored at waste collection points and later sent to firms licensed to recycle this waste materials. Waste Mineral Oil When it expires mineral oil used in the machinery is collected separately on site; after being analyzed in laboratories licensed by the Ministry of Environment in terms of category, it is sent to licensed companies for recycling. Scrap Electronics Scrap PCs and monitors, integrated circuits, semiconductors, telephones, fax machines, photocopy machines, DVDs, VCRs, printed circuit sensors, cables, medical devices and printers are delivered to companies licensed by the Ministry of Environment for recycling. Scrap Fluorescent and Mercury-Vapor Light Bulbs Scrap fluorescent and mercuryvapor light bulbs are kept in hazardous waste depositories in accordance with the standards set by the Ministry of Environment and are then delivered to licensed recycling companies for disposal. Printer Cartridges and Toners Cartridges and toners are within the recycling system of HP, which has established a worldwide recycling system. As a result, HP supplies are used
54 - 55
doğan yayın holding 2012 Annual Report
The newspaper printing machines run on electricity and therefore no gas is emitted into the atmosphere during production.
throughout the Company and waste toners and cartridges are delivered to HP for recycling. Use of other brands of cartridges and toners in the Company is being reduced; these are delivered separately to licensed recycling companies. Gas Emissions The newspaper printing machines run on electricity and therefore no gas is emitted into the atmosphere during production. Since the heating systems at the presses and the office buildings are below 2MV, they are exempt from an emission permit within the Regulations for Industrial based Air Pollution Control and CO2 is released at minimum levels. Environmental Cleanup The cleanup of the environment surrounding the facilities is undertaken by firms on a regular daily basis. In addition, as per the Regulation on Soil Pollution Control, the Company’s Environmental Control Department takes measures and posts warnings against soil pollution at production facilities.
Maintenance of Green Space and Planting of Trees The greening of areas reserved as green space at all facilities is undertaken by specialist firms on a regular basis. Environmental Health and Protection in Administrative Buildings Launched in 2011, the new headquarters building of the Company is equipped with state-of-the-art cooling systems manufactured in line with EU environmental policy, using R 410 and R 132 gases. All the newly purchased coolers and equipment with coolers use environmentally friendly cooling gases. The import, use and delivery of the cooling gases to the end-consumer are done in accordance with the regulations of the Ministry of Environment. The maintenance of the cooling systems at the administration building of the Company is carried out periodically by contracted authorized technical services.
The new Company building is equipped with state-of-theart, environmentally friendly fire fighting systems. The number of fire extinguisher tubes was reduced and new, environmental and health friendly systems utilizing FM 200 and Novac1230 gas was introduced in compliance with EU standards. Fire extinguisher tubes are inspected biannually for any leaks by contracted authorized technical services. Due to the thermal insulation technology of the building, the consumption of natural gases for heating and the consumption of electricity for cooling have decreased resulting in a reduction of the building’s carbon emissions. No law suits have been filed against the Company due to environmental damage claims.
SUSTAINABILITY
DYH believes that corporate success depends on competent, well-educated human resources; accordingly it attaches great importance to the continuous development of employees.
HUMAN RESOURCES
In 2012, DYH’s human resources activities were carried out by the Human Resourcs department of its parent company Doğan Şirketler Grubu Holding A.Ş.
EducatIon(*)
51%
College and University
39%
High School
10% Other
DYH’s primary focus is recruiting people who could add value to the Group’s activities and carry the Group to the future with proper training and competence. After a recruitment process based on modern methods, the employees who join the Doğan Family get the chance to enhance their personal and professional competence through continuous training. The main principles governing Human Resources practices are providing all employees with means of training and development to encourage creativity and innovation, creating a sharing and participatory work environment based on communication and establishing a comfortable and safe work atmosphere in line with the nature of the work. The general practices, principles and policies embraced by the Human Resources are adapted and translated into practice by all Group companies. Recruitment, performance management, on-the-job training and development, salary management, labor law practices and processes of legal compliance are
Number of Employees (Age Groups) (Domestic) 24 and younger 25-30
1,621
31-38
2,069
39-48
1,258
49 and older
420
managed through the efficient infrastructure services expanded by the Human Resources all across the Holding. The comprehensive follow-up, reporting to management and consolidation of these practices are carried out via a web-based Human Resources platform. Human Resources Profile As of December 31, 2012, the total number of individuals employed at Doğan Yayın Holding and at both domestic and international affiliates was 10,302, of which 6,229 are employed in Turkey. Some 51% of the employees at the Group’s affiliates in Turkey are university graduates and 37% are female. DYH has a youthful employee profile: as of December 31, 2012, 49% of its domestic employees are aged between 22 and 33. Training Programs DYH believes that corporate success depends on competent and well-educated human resources and accordingly attaches immense importance
Gender(*)
37% Female
(*)
Human Resources Profile (%) (Domestic)
861
63% Male
to the continuous development of employees. Training programs focused on personal development and the enhancement of management skills also cover nascent media concepts such as “Social Media” and “IT Law,” as a reflection of the Group’s efforts to keep abreast of change and lead the pack. The primary target of these trainings is to help employees hone their skills and qualifications and achieve the Group’s targets together. The programs are designed according to individual and sector-specific needs. In order to help Group employees enhance their professional competence, training programs on issues outside of publishing and broadcasting will also be organized in the coming years. Training programs in which employees from various DYH companies participate also help strengthen communication inside the Holding. From 2006 until 2012, a total of 4,458 employees participated in training programs on personal development, publishing and broadcasting, as well as technical development. Private Health Insurance DYH employees also benefit from the Group Private Health Insurance Program created by Human Resources in line with the importance attached by the Company to human health.
56 - 57
doğan yayın holding 2012 Annual Report
REMUNERATION POLICY AND RIGHTS
DYH’s remuneration policy abides by the principle of “equal pay for equal work” within the framework of market trends and the conditions inside the Company. The pay grades are regularly reviewed to reflect the current market conditions and the performance of the staff. With the approval of the CEO, an annual raise rate is determined at intervals considered necessary by the employer and is reflected in employee salaries. In addition to the remuneration policy, some vested benefits are
offered to all our employees depending on their pay grades. All rights, benefits and remunerations of Board members are determined by the annual General Assembly. In addition to the per diem they receive for being a Board member, a monthly salary and related vested benefits may be offered for those Board members who also serve as executives at the Company. Top executives and other staff who have a say in the management of the Company
may also receive premiums or bonuses depending on their performance. Doğan Yayın Holding has determined the key management personnel as the members of the board of directors and executive committee members. The compensation of key management personnel includes salaries, bonus, health insurance, communication and transportation and total amount of compensation, is presented below.
Payments made to the Board members and key executives as of December 31, 2012 and December 31, 2011 (TL thousand) Salaries and other short term benefits
2012
2011
4,751
7.499
Post-employment benefits
-
-
Other long-term benefits
-
-
Termination benefits
-
-
Share based payments Total
Doğan Yayın Holding Organization Chart
-
-
4,751
7,499
Board of Directors
Corporate Governance Committee
Audit Committee
Executive Committee
Early Identification of Risks Committee
Human Resources Unit
Legal Affairs Unit
Financial and Administrative Affairs Unit
Shareholder Relations Unit
Investor Relations
CORPORATE GOVERNANCE
BOARD OF DIRECTORS
Y. BEGÜMHAN DOĞAN FARALYALI Chairperson
Soner Gedik Vice Chairperson Executive Committee Member
Mehmet Ali Yalçındağ Board Member
Born in Istanbul in 1976, Begümhan Doğan Faralyalı received her BSc in Economics and Philosophy at the London School of Economics in 1998. She began her professional career as a consultant at the NY Office of Arthur Andersen and then moved to the London office of the Monitor Group Strategic Consulting Firm, where she was involved in strategy and restructuring projects for leading European media, technology and FMCG companies.
Soner Gedik was born in 1958 in Eskişehir. He studied Economics and Finance at the Faculty of Political Sciences at Ankara University. Having successfully passed the placement test in 1981, he joined the staff of tax specialists at the Ministry of Finance where he was later promoted to Tax Inspector in 1985 with the highest degree of the period. He worked as a public servant for six years, auditing leading private and public companies and honing his skills and expertise in finance. In 1987, he joined the Finance Department of Hürriyet Holding A.Ş. to serve as Financial Consultant to the President of the Group Executive Board. From 1989 to 1998, he served on the Board and was Vice President of Hürriyet Gazetecilik A.Ş. Gedik played a key role in the founding of Doğan Yayın Holding in 1998 and continued his contributions as CFO and Vice President.
Mehmet Ali Yalçındağ was born in Istanbul in 1964. He graduated with honors in 1989 from the American College in London. Yalçındağ first joined the Doğan Group in 1990 as the assistant General Manager of Doğan Dış Ticaret. In 1991, he became a member of the Executive Committee of Doğan Holding. Then, in 1992, was appointed Assistant General Manager of the Milliyet daily. In 1994, Yalçındağ helped with the establishment of the Simge Group and began publishing four new newspapers including Posta, Fanatik and Radikal.
After earning her MBA at Stanford University in 2004, she took charge of business development initiatives of Doğan Yayın Holding (DYH) in the international arena as an Executive Committee member and Vice President for Overseas Investments. There, in charge of the international growth of DYH, she focused on investment opportunities mainly in Europe, including Eastern Europe and Russia. In 2007, Faralyalı led the startup process for Kanal D Romania, the first foreign television investment of DYH; it also forged its partnership with the Swiss Ringier Group. In two years, the channel ranked third overall in total day viewership. At the same time, she worked on the purchase of Trader Media East, traded on the London Stock Exchange, by Hürriyet. Begümhan Doğan Faralyalı played an active role in this project constituting the largest international acquisition by DYH. After 15 years of overseas experience, she moved back to Turkey in 2009 and became CEO of Star TV. In 2010, she assumed the Presidency of Doğan TV Holding, which also included TV channels Kanal D and CNN Türk. In addition to her role as Chairperson of Kanal D Romania, she also serves as the Chair of Doğan Yayın Holding as of January 1, 2012. Faralyalı is married and has two children.
Presently, he serves as Executive Committee member of Doğan Group of Companies and Vice Chairperson at Doğan Yayın Holding A.Ş. Soner Gedik is married and has four children.
When the media companies of Doğan Group merged under DYH in 1996, Yalçındağ was appointed Vice-President of DYH’s Executive Committee. He has contributed to the synergy of all companies that are part of DYH. These include the establishment of Doğan Ofset integrated all dry press facilities, DPC that put all newspaper printing facilities under a single umbrella and Doğan Factoring responsible for managing the receivables of all Group companies. By founding Doğan News Agency, Yalçındağ placed all news departments under the control of a single administrative body. In addition, the publication of children’s books came under the responsibility of a single unit, which resulted in the creation of a partnership with the Danish Egmont Group. Magazines published by Hürriyet and Milliyet were merged with the formation of a partnership with Burda Media Group. Yalçındağ also formed a partnership with Time Warner, enabling the establishment of a common news channel and has been actively involved in forming other foreign partnerships. When Star TV’s joined the Group in 2005, all TV and radio broadcasting companies became a part of the Doğan TV network. Yalçındağ held the post of CEO at Doğan Yayın Holding between 1999 and 2010. He has recently taken over as the Chairman of Yandex Turkey, the global search engine. At the same time, he served as the Turkish Chairman of the International Advertising Association (IAA), Chairman of the Turkish Advertising Council, a member of Turkish Industrialists’ and Businessmen’s Association (TÜSİAD), the Galatasaray Sports Club and WEF Media Managers. Yalçındağ is married and has two children.
58 - 59
doğan yayın holding 2012 Annual Report
Yahya Üzdiyen Board Member CEO
Ertuğrul Feyzi Tuncer Independent Board Member
H. Ahmet Kılıçoğlu Independent Board Member
Born in 1957, Yahya Üzdiyen graduated from the Department of Business Administration at Middle East Technical University in 1980. From 1980 until 1996, he worked as a trade and investment specialist and manager in several privately owned companies in Turkey and abroad.
Ertuğrul Feyzi Tuncer was born in 1939. He received his BA in Business Administration and Economics from Robert College in 1964. Later, he obtained an “Executive Management” certificate from University of Stanford.
Born in 1956 in Tirebolu, H. Ahmet Kılıçoğlu graduated from TED Ankara College and then received his undergraduate degree in economics from the University of Essex in 1977; he earned his MA in 1978. His professional career began in 1979 at the Ministry of Industry and Technology and in 1980 became Assistant Specialist at Türkiye İş Bankası. After completing his military service, he worked in the private sector, before assuming administrative positions at the UNDP and F-16 project from 1984 onwards.
Between 1997 and 2011, he assumed the position of Strategy Group President at Doğan Holding and became Deputy Chairperson on January 18, 2011. During this period, he played an important role in the acquisition, partnership and sale of Group companies, such as Petrol Ofisi, Ray Sigorta and Star TV. Presently acting as Board member in many of the Group companies, Üzdiyen has served as Doğan Holding’s CEO since January 24, 2012. Yahya Üzdiyen is married with two children.
Tuncer started his professional career in 1967, as Regional Director and Director of Investments at Mobil Oil Türk A.Ş.; he became General Manager in 1990. In 1994, he was Chairman at ATAŞ Anatolian Refinery and then became General Manager of BP Mobil Turkey Joint Venture. In 2000, he resigned from both of these positions to continue his career as General Manager and Board member at Petrol Ofisi A.Ş. In 2005, he joined the Board at Doğan Holding; the following year, at Tuncer Consulting Services and Trade, he became the founder and partnership manager of CASE Consulting Energy.
In 1987, Kılıçoğlu started his career in Turkish Eximbank and after being in various levels of institution, he became Deputy General Manager between 1922-1998, then became General Manager and Member of the Board between 1998-2010. He continued his membership in Turkey Banks Assosiciation between 1998-2010. In 2011, he became the chairman of consulting for the World Eximbanks Union. Between 2008-2009, he served as advisor to the president for the Islamic Development Bank.In 2010, Kılıçoğlu served as Depuity Chairman of Denizbank. He still maintains his duty for being VicePresident of Turkish Education Assocation. Kılıçoğlu is married and has one child.
CORPORATE GOVERNANCE
EXECUTIVE COMMITTEE(*)
Yahya Üzdiyen Board Member CEO
Soner Gedik Vice Chairperson Executive Committee Member
Ahmet Toksoy Executive Committee Member, CFO
Born in 1957, Yahya Üzdiyen graduated from the Department of Business Administration at Middle East Technical University in 1980. Between 1980 and 1996, he worked as a trade and investment specialist and manager in several privately owned companies in Turkey and abroad.
Soner Gedik was born in Eskişehir in 1958. He studied Economics and Finance in the Faculty of Political Sciences at Ankara University. After successfully passing the placement test in 1981, he joined the staff of tax specialists at the Ministry of Finance and in 1985, was promoted to Tax Inspector with the highest grade points for the period. He worked as a public servant for six years, auditing leading private and public companies and honing his skills and expertise in finance. In 1987, Gedik joined the Finance Department of Hürriyet Holding A.Ş.to serve as a financial consultant to the President of the Group Executive Board. From 1989 to 1998, he served on the Board and was Vice President of Hürriyet Gazetecilik A.Ş. He played a key role in the founding of Doğan Yayın Holding in 1998 and continued his contributions as CFO and Vice President.
Ahmet Toksoy was born in 1959 in Istanbul and is a graduate of Istanbul University, Department of Finance, Faculty of Management. After working as auditor at the Ministry of Finance from 1984 to 1989, Toksoy joined Hürriyet Holding as a member of the Audit Committee. Following service as Assistant Finance Manager at Hürriyet newspaper from 1990 to 1991 and Finance Manager from 1991 to 1995, he worked as a Certified Public Accountant at Aktif Denetim Yeminli Mali Müşavirlik for three years.
Between 1997 and 2011, he assumed the position of Strategy Group President at Doğan Holding and became Deputy Chairperson on January 18, 2011. During this period, he played an important role in the acquisition, partnership and sale of Group companies, such as Petrol Ofisi, Ray Sigorta and Star TV. Presently a member of the Board at many of the Group companies, Üzdiyen has served as Doğan Holding’s CEO since January 24, 2012. Yahya Üzdiyen is married with two children.
Presently, he serves on the Executive Committee of Doğan Group of Companies and Vice Chairperson at Doğan Yayın Holding A.Ş. Soner Gedik is married and has four children.
In 1998, Toksoy served as the Financial Affairs Group President at Hürriyet Newspaper for many years (1998-2009) until he was appointed President of Audit and Risk Management at Doğan Holding at the beginning of 2010. Presently a Board member of Doğan Gazetecilik, Çelik Halat, Ditaş, Milta and other Group companies, Toksoy has been CFO since September 2011. Ahmet Toksoy is married and has one child.
The composition of the Executive Committee changed on March 12, 2012. Prior to March 12, 2012 and between July 15, 2010 and December 31, 2011, the members of the Executive Committee included Mehmet Ali Yalçındağ (President), Hanzade Doğan Boyner (Vice President), Begümhan Doğan Faralyalı (Vice President), Soner Gedik (Vice President) and Ertuğrul Özkök (Vice President).
(*)
60 - 61
doğan yayın holding 2012 Annual Report
INTERNAL AUDIT AND CONTROL
In 2012, DYH’s internal audit and control processes continued to be carried out under the supervision of the Chief Financial Officer and Vice President for Internal Audit of the parent company Doğan Şirketler Grubu Holding A.Ş. In this process, the Vice President for Internal Audit, Audit Committee and Corporate Governance Committee communicated their suggestions and actions related to internal control practices and techniques to the Board of Directors. As in previous years, the internal audit / internal control activities were carried out according to the work plan, the authorized bodies were informed about monthly activities and actions and the planning and management activities of the Group companies’ audit units were coordinated.
In line with these efforts, with the aim of protecting company assets and enhancing internal control efficiency and intra-Group synergy, various activities were carried out throughout the year and the measures taken by the Holding Companies were monitored. In 2013, DYH’s goal is to enhance the efficiency of audit and monitoring activities especially as regards to the Information Systems. In addition, the Company will update its Internal Audit Manuals in line with COSO / COBIT standards and standardize existing processes according to the system of the ultimate controlling shareholder Doğan Şirketler Grubu Holding A.Ş.
CORPORATE GOVERNANCE
Financial risk management is conducted within the framework of DYH’s guidelines by all subsidiaries and affiliates subject to joint management.
RISK MANAGEMENT
At DYH, risk management activities are carried out under the coordination of the parent company Doğan Şirketler Grubu Holding A.Ş. The risk management activities include monitoring and measuring fiscal, operational and compliance risk, as well as financial risk and making recommendations to the Group companies when deemed necessary. Fiscal, compliance and operational risks are monitored by Doğan Holding’s Finance Department; financial risk is monitored by the office of the Vice President - Finance and Portfolio Management. Fiscal, Operational and Compliance Risk Management The identification and establishment of risk that the Group Companies may encounter and risk management activities for controlling and reducing identified possible risk is made in collaboration with the senior management of the Group Companies under the coordination of the Holding’s Finance Department. The management of tax, commercial law and capital markets compliance risks, which are important within fiscal, operational and compliance risks are performed in coordination with the related Vice Presidents in the Holding’s Finance Department and with the participation of the Audit and Risk Management departments, as well as the participation of audit firms and chartered accountants as necessary. This approach employed in auditing and controlling enables the continued monitoring of the Group Companies.
Furthermore, Early Risk Detection and Management Committee was set up at DYH as per the temporary article 378 of the Turkish Commercial Code No. 6102 and DYH’s Corporate Governance Committee was authorized in this scope as per CMB’s Communiqué Series: IV, No: 56. Under the guidance of the Board of Directors, these two committees work to detect risk that could jeopardize the presence, development and continuation of the Company as early as possible, to take the necessary action and to manage risk, as well as to review the risk management systems at least once a year. Financial Risk Management DYH is subjected to a range of financial risk due to its activities, including credit and market risk (foreign currency risk, interest rate risk, price) and liquidity risk. DYH’s approach to financial risk management aims to minimize the adverse effects caused by the variability of the financial markets on the fiscal results. To avoid possible diverse financial risk, the Group uses the following methods: Recording foreign currency positions on a Holding-basis in consideration of the Group companies’ foreign currency liabilities; positioning the Group in line with its liabilities according to the liquidity conditions of the Group Companies; and limiting the volume of derivative liabilities. Financial risk management is conducted within the framework of DYH’s guidelines by all subsidiaries and affiliates subject to joint management.
In 2011, Doğan Şirketler Grubu Holding A.Ş. had initiated the Centralized Treasury System, by which the daily market values of any financial instrument (including options and forward transactions) can be calculated. In 2012, the System was improved and enhanced according to the necessities. This application allows for the monitoring of financial risk and managing assets and liabilities. In this system, foreign currency and interest risk can be calculated according to market yield curves and reported on a daily basis. Credit Risk At DYH, credit risk is defined as the risk of the counterparty’s non-fulfillment of its contractual obligations. This risk involves the Group Companies’ receivables, particularly from advertising. The Group controls its credit risk primarily by credit assessment through its factoring firm and by assigning credit limits to counter-parties, hence creating a central data center. Credit risk is distributed due to the high number of organizations in the client-base and their distribution among diverse business fields.
62 - 63
doğan yayın holding 2012 Annual Report
Receivables Risk Group companies are subject to receivables risk due to commercial receivables arising from forward sales. The Group management diminishes the receivables risks associated with the receivables of customers, by setting individual credit limits for each customer and when deemed necessary, by asking for collaterals or accepting only cash payments from customers considered to be risky. The collection risk of Group companies arises mainly from the commercial receivables. Commercial receivables are assessed by the Company management according to past experience and the current economic situation and an adequate amount of reserve is set aside for doubtful receivables. Interest Rate Risk DYH manages interest rate risk through the limited utilization of measures and derivative instruments generated by offsetting its assets and liabilities sensitive to interest rates. Liquidity Risk DYH manages liquidity risk by keeping on hand a sufficient amount of cash to meet short term payments, through short term deposits and securities that can be rapidly turned into cash; and by funding investments and projects in the medium and long-run through sufficient credit facilities in regard of project turnaround periods and the balance between capital and credit.
Because of the dynamism of its business environment, DYH has aimed to maintain funding flexibility by holding credit channels ready for use. Foreign Currency (Foreign Exchange) Risk The Group bears foreign currency risk related to changes in exchange rates as a result of conversions of foreign currency debt amounts to the functional currency. These risks are monitored and limited through foreign currency positions analysis. Capital Risk Management The Group’s capital management objective is to sustain the Group’s activities with the aim to maintain the most suitable capital structure to generate returns for its partners, benefit for its shareholders and to reduce capital cost. The Group holds the right to issue new shares and sell assets to reduce its debts to maintain or reconstitute its capital structure. Legal Risks There are no lawsuits that could jeopardize the operation or financial structure of Group companies. The follow-up of legal controversies and lawsuits related to the activities of Group companies is conducted by lawyers at the Legal Department of the parent company Doğan Şirketler Grubu Holding A.Ş., in a centralized fashion. As such, lawyers specialized in various
legal disciplines offer their services to all the subsidiaries of the Group. Furthermore, this centralized legal structure also provides consultancy services to Doğan Yayın Holding A.Ş and its subsidiaries whenever needed. It coordinates the purchase of such services from specialist legal consultants from outside the Group. Information Technology Risks The procurement, production, sales and accounting processes across Group companies are managed via applications and modules on an integrated information system (SAP) and the reports concerning these transactions are also produced through this system. DYH keeps a close watch on technological progress and embraces these according to the needs of Group companies. DYH also continuously monitors the adequacy, efficiency, access, reliability and sufficiency of the services delivered through its Information Technologies system. In this regard, every year, Group companies identify the processes and activities they need with regards to IT and accordingly the Group undertakes IT investments to meet these demands.
CORPORATE GOVERNANCE
CORPORATE GOVERNANCE PRINCIPLES COMPLIANCE REPORT
1. Declaration of Compliance with the Corporate Governance Principles In its corporate governance practices, the Company exerts maximum care to comply with the Capital Markets Board’s (CMB) Corporate Governance Principles. The corporate governance practices of the Company are assessed by ISS Corporate Services (ICS), the international rating agency licensed to operate in Turkey for rating activities in line with the methodology approved by CMB. The Company was one of the first companies in Turkey to be assigned a corporate governance rating. In its first assessment in 2006, DYH received a rating score of 8.0 out of 10.0. The Company’s corporate governance rating was revised and upgraded to 8.5 in 2007 and to 9.0 in 2008. In its assessments in 2009, 2010, 2011 and 2012, ISS Corporate Services (ICS) again assigned a corporate governance rating of 9.0 to DYH. Through the years, ICS has assigned DYH high ratings in the “Public Disclosure and Transparency” subcategory. In 2012, too, the Company was assigned high ratings in the “Public Disclosure and Transparency” subcategory (9.82) and in the “Board of Directors” subcategory (8.58). The Articles of Association was amended to keep abreast of recent changes in corporate governance and to comply with the CMB’s regulations and resolutions and approved as such by the General Assembly. The Corporate Governance Rating and Corporate Governance Compliance Reports are available on the Company’s website (www.dyh.com.tr). The Company was the first media corporation to publish the local corporate governance rating received from an internationally credible rating agency. The Company was also the first listed Turkish company to be rated by the ICS and the first listed non-finance sector company to receive a corporate governance rating. Last but not least, DYH was included in the Borsa Istanbul Corporate Governance Index (XKURY) since the first day the Index was calculated. The Company complied with the Corporate Governance Principles rendered obligatory by CMB’s regulations and resolutions during the fiscal year that ended on December 31, 2012. We believe that under the current circumstances, the items in the Principles that we fail to fully comply with do not give rise to a major conflict of interest.
Yahya Üzdiyen Board Member and CEO
Yaşar Begümhan Doğan Faralyalı Chairperson
64 - 65
doğan yayın holding 2012 Annual Report
SECTION I - SHAREHOLDERS 2. Shareholder Relations Department 2.1. Exercise of shareholder rights is conducted in compliance with the relevant legislation, the Articles of Association and other Company regulations and all necessary measures are taken to facilitate the exercise of these rights. 2.1.1. To oversee all dealings between the Company and the shareholders, as well as to ensure that the requirements pertaining to shareholders’ rights concerning access to information are fully met, a “Shareholder Relations Department” was formed in accordance with the Capital Markets Legislation and CMB regulations. The Shareholder Relations Department functions in accordance with Capital Market Legislation and CMB regulations and the Principles and carries out the specified duties. 2.1.2. Reporting to the Shareholder Relations Department are the investor relations and legal and financial affairs staff. The Department’s manager is the Company’s Director of Investor Relations Banu Çamlıtepe, her contact details are as follows: Full Name
Title
Phone
E-mail
Banu Çamlıtepe
Director, Investor Relations
(216) 556 90 00
[email protected]
All DYH shares are dematerialized with the Central Registry System (CRS). 2.1.3. While meeting shareholder demands, maximum care is exerted to ensure compliance with the applicable legislation and the Company’s Articles of Association; no written or verbal complaints reached the Company in 2012 concerning the exercise of shareholder rights, nor is the Company aware of any administrative or legal proceedings initiated against itself in this regard. 2.1.4. In 2012, information requests from investors and shareholders were responded in line with Capital Markets Legislation, CMB regulations and resolutions and all the relevant information and documents were delivered to investors and shareholders on equal terms, with the exception of those constituting commercial secrets. 3. Exercise of Shareholders’ Right of Access to Information 3.1. DYH does not discriminate among shareholders on the issue of exercise of shareholders’ right of access to and examination of information. 3.1.1. All information and documents required for the proper exercise of shareholders’ rights are provided to all shareholders on equal terms on the Company’s website at www.dyh.com.tr in both English and Turkish. 3.1.2. Verbal and written requests for information received from shareholders in 2012 were tried to be responded to without delay under the supervision of the Shareholder Relations Department in accordance with the Capital Market Legislation and CMB’s regulations and resolutions. 3.1.3. The Articles of Association currently do not recognize requests for the assignment of a special auditor as an individual right. However, depending on the legislative developments in the upcoming period, this right might be incorporated into the Articles of Association. Meanwhile, no special auditors were appointed for the Company during the reporting period. 3.2. With a view toward expanding shareholders’ rights to access information, all information that might impact the exercise of these rights is provided to the shareholders in an up-to-date manner on the Company’s website. 4. Information on General Assembly 4.1. The Company does not have any registered shares.
CORPORATE GOVERNANCE
CORPORATE GOVERNANCE PRINCIPLES COMPLIANCE REPORT
4.2. According to the Articles of Association, an informational document about agenda items is prepared and announced to the public prior to the General Assembly meeting. 4.2.1. In line with the amendment to the Articles of Association, in addition to the methods required by the applicable legislation, announcements of the General Assembly meetings are published on the Company’s website (www.dyh.com.tr) at least 21 days prior to the meeting to reach as many shareholders as possible. 4.2.2. DYH complies with the Turkish Commercial Code, Capital Markets Legislation, CMB regulations and resolutions as well as the Articles of Association in all of its public announcements and notifications. 4.2.3. Annual reports, financial reports, financial statements, the dividend distribution proposal, the information document about the General Assembly agenda items and other documents related to the agenda items, the latest version of the Articles of Association, texts and justifications of any proposed amendments to the Articles of Association are made available to shareholders’ examination at Company headquarters, branches and online; places where the shareholders can most easily access them and on the date of the announcement regarding the invitation to the General Assembly meeting. 4.2.4. There have been no major changes to the management or operational organization of the Company during the previous reporting period. Any such changes that may arise will be announced to the public in compliance with the relevant legislation. 4.2.5. Sample proxy statements are provided prior to the General Assembly meeting for those who want to attend the meeting by proxy and made available on the Company’s website for shareholder use. 4.2.6. Voting procedures are announced to the shareholders on the Company’s website prior to the meeting. 4.2.7. In 2012, the Company did not receive any requests from the shareholders to add items to the agenda. 4.3. The meeting procedure of the General Assembly facilitates maximum participation by shareholders. 4.3.1. At DYH, General Assembly meetings are carried out with the simplest possible procedures, at the lowest possible cost for the shareholders and in a manner that does not create any inequality among shareholders. 4.3.2. General Assembly meetings are held at Company headquarters. An amendment made to the Articles of Association allows for the meetings to be held in another location in the city where the majority of shareholders reside. Any future request to this effect will be duly taken into consideration. 4.3.3. The General Assembly meeting venue can accommodate all shareholders. With a view to complying with the Turkish Commercial Code’s provisions, an amendment to the Articles of Association will allow the General Assembly to be organized online. At the General Assembly where the accounts and activities for the year 2012 will be discussed, shareholders will have the chance to participate online. This action is in compliance with CMB’s resolution dated 01.02.2013 and numbered 4/89. 4.3.4. DYH was unable to hold the Ordinary General Assembly meetings until the end of March. In order for a General Assembly meeting to be held at the end of March, the Company must have announced its financial statements at the latest by the end of the first week of March. Since the Company is a holding company with numerous domestic and overseas subsidiaries and its financial
doğan yayın holding 2012 Annual Report
66 - 67
statements are prepared on a consolidated basis in conformity with CMB regulations, as well as with International Financial Reporting Standards (IFRS), public reporting of the financial statements within such a short amount of time is not possible. On the other hand, the CMB and Borsa Istanbul regulations allowed the Company to report its financial statements for the year 2011 within 14 weeks of the end of the reporting period, on April 7, 2012. 4.3.5. According to the Articles of Association, unless there is a General Assembly resolution to the contrary, meetings are open to the relevant parties and the media. However, participants without an entrance card proving shareholder or proxy status may neither speak nor vote at the meeting. Shareholders, certain Board members, the Company’s employees and the independent audit firm attended the Ordinary General Assembly for the accounting period 2011, however other stakeholders and the media did not. 4.4. During the General Assembly meeting, agenda items are presented in an objective, detailed, clear and comprehensible manner and shareholders are given equal opportunity to voice their opinions and ask questions, thus creating a healthy discussion environment. 4.4.1. Minutes of the General Assembly meetings, include those of the previous years, are available on the Company’s website (www.dyh.com.tr). 4.4.2. It has been observed that corporate investors often attended the General Assembly meetings by proxy in recent years. One General Assembly meeting was held in 2012. At the Ordinary General Assembly meeting on June 4, 2012, where the 2011 operations of the Company were discussed, 1,095,872,803 shares (54.79%) out of the 2,000,000,000 total shares were represented. During the meeting, no proposals or questions were received from the shareholders attending the meeting, either in person or by proxy. 4.5. According to the Company’s Articles of Association, a General Assembly resolution is required to give guarantees, under the Articles 3 and 4 of the Articles of Association; or for giving grants and aid exceeding 1% of the Company’s total assets, under the provisions of Article 3 of the Articles of Association. The General Assembly may give prior authorization to the Board of Directors for such transactions, provided that upper limits are defined. 4.6. At the Ordinary General Assembly held on June 4, 2012 at Company headquarters, the shareholders were informed about donations of TL 25,000 made by the Company to foundations, associations, public agencies and institutions in 2011. 5. Voting Rights and Minority Rights 5.1. The Company avoids practices that make it difficult to exercise voting rights. All shareholders are given the opportunity to exercise their voting rights in the easiest and most convenient manner. 5.2. There are no preferred stocks or different classes of shares in the Company. 5.3. Each share is entitled to one vote in the Company. 5.4. There is no Company regulation that restricts the exercise of shareholders’ voting rights for a certain period of time following the acquisition date of their shares. 5.5. The Articles of Association do not contain any provision that prevents non-shareholders from voting as proxy as a representative of a shareholder. 5.6. According to the Articles of Association, if the beneficial owner differs from the owner of the right to dispose of a share, these parties can agree among themselves and have themselves represented as they see fit. Should they fail to reach an agreement, the right to attend the General Assembly meetings and vote shall be exercised by the beneficial owner.
CORPORATE GOVERNANCE
CORPORATE GOVERNANCE PRINCIPLES COMPLIANCE REPORT
5.7. Since the share capital of the Company does not involve any cross-shareholdings, no such votes were cast at the General Assembly. 5.8. Minority rights are granted to shareholders collectively holding one-twentieth (5%) of the share capital. 5.8.1. The Company takes the utmost care to ensure the exercise of minority rights. During 2012, the Company did not receive any criticism or complaint in this regard. 5.9. The Articles of Association do not provide for cumulative voting. The advantages and disadvantages of this method are being assessed within the framework of legislative developments. 6. The Dividend Right The Company makes decisions on profit distribution with due consideration of the provisions of the Turkish Commercial Code, Capital Markets Legislation, the Capital Markets Board’s regulations and resolutions, Tax Laws and other applicable legislation, as well as the Articles of Association. 6.1. Pursuant to the Capital Markets Legislation and the Capital Markets Board’s regulations and resolutions, the Company and its affiliates listed on the ISE revised their respective dividend policies and submitted these to the approval of their general assemblies and disclosed them to the public. 6.2. The distribution of profit is enacted within the deadline indicated by the Capital Markets Legislation and CMB regulations, as quickly as possible following the General Assembly meeting. 6.2.1. Since there was no distributable profit accrued for the accounting period from January 1, 2011 to December 31, 2011 according to the profit distribution tables prepared in accordance with CMB regulations, it was resolved at the Ordinary General Assembly convened on June 4, 2012 that no profit distribution would be made to the shareholders for the 2011 accounting period. 6.3. According to the Articles of Association, the Board of Directors may decide to make advance dividend payments, provided that it is authorized by the General Assembly and that such action complies with Capital Markets Legislation and the Capital Markets Board’s regulations and resolutions. The authority granted by the General Assembly to the Board of Directors to make advance dividend payments is limited to the year it was granted. No decision can be made for additional advance dividend payments or distribution of dividends unless advance dividends for the previous year have been fully offset. 6.4. The principles related to the Company’s Profit Distribution Policy are as follows: The Company determines profit distribution proposals on the basis of the Turkish Commercial Code, Capital Market Legislation, CMB’s regulations and resolutions, Tax Laws, provisions of other applicable legislation and the Articles of Association. Accordingly: 1- In principle, a minimum of 50% of the net distributable profit for the period, calculated in accordance with the Capital Market Legislation and with due consideration to the financial statements compatible with International Financial Reporting Standards (IFRS), is distributed. 2- In the event that a profit distribution between 50% and 100% of the calculated net distributable profit for the period is foreseen, the percentage to be distributed is decided with due consideration to the Company’s financial structure and budget. 3- The profit distribution proposal is announced to the public with due consideration of the legal periods and in principle following the completion of the Ordinary General Assembly meetings of our subsidiaries and affiliates included in our consolidated financial statements.
doğan yayın holding 2012 Annual Report
68 - 69
4- In the event that the net distributable profit for the period calculated in line with the financial statements prepared as per the Turkish Commercial Code and the Tax Legislation: a. is lower than the amount calculated in accordance with Article 1, the net distributable profit for the period calculated in accordance with this Article 4 shall be taken into consideration and the entire amount shall be distributed, or b. if it is higher than the amount calculated in accordance with Article 1, the provisions of Article 2 shall be applicable. 5- In the event that no net distributable profit for the period exists according to the financial statements prepared as per the Turkish Commercial Code and the Tax Laws, no profit distribution shall be made even if a net distributable profit for the period has been calculated in accordance with the Capital Market Legislation and the financial statements compatible with International Financial Reporting Standards (IFRS). 6- If the net distributable profit for the period calculated remains below 5% of the issued capital, profit distribution may not be made. 7- Investments for the purpose of increasing the value of the Company, which necessitate substantial fund flows, issues that have an impact upon the Company’s financial structure, the existence of uncertainty or adverse developments in the economy or the market conditions are taken into consideration when making profit distribution. 6.5. The dividend distribution policy of the Company is stipulated in the annual report and publicly announced on the Company’s website at www.dyh.com.tr. 7. Transfer of Shares The Articles of Association do not contain any provisions that make it difficult for the shareholders to freely transfer their shares. SECTION II - PUBLIC DISCLOSURE AND TRANSPARENCY 8. Disclosure Policy of the Company 8.1. A Disclosure Policy concerning the Company’s public announcements has been posted on the Company’s website at www.dyh.com.tr. 8.2. The Disclosure Policy was approved by the Board of Directors and presented to the shareholders at the General Assembly meeting. The Board of Directors is responsible for monitoring, reviewing and improving the Disclosure Policy. The Corporate Governance Committee shall inform and make recommendations on subjects related to the Disclosure Policy. 8.3. Shareholder Relations Department is authorized to oversee and monitor any issue related to public disclosure. Questions received from outside the Company are responded to by the Chairperson, President of the Executive Committee (CEO) and Chief Financial Officer (CFO), or by the Director of Investor Relations, within the knowledge of and authorization limits set by the Chairperson, CEO and CFO, according to the content of the question. In responding to questions, the Company attempts to maintain equality of opportunity among all stakeholders. 8.4. Aside from those prescribed by legislation, data distribution companies, print and visual media and the Company’s website are used for public announcements. 8.5. Principles governing the disclosure of information on future prospects are defined in the Company’s Disclosure Policy. In public announcements, information on future prospects is disclosed together with the justifications and the statistical data underlying the forecasts and is associated with the Company’s financial position and operational results. Only the Chairperson, CEO and CFO are authorized to make such announcements.
CORPORATE GOVERNANCE
CORPORATE GOVERNANCE PRINCIPLES COMPLIANCE REPORT
8.6. “Individuals with Administrative Responsibilities” defined in the Capital Market Legislation and individuals in close contact with them disclose to the public their transactions on the Company’s capital markets instruments, in compliance with the Capital Market Legislation. 8.6.1. Since all material disclosures of the Company are posted on the Company website, the material disclosure mentioned above was also posted automatically on the website. 8.6.2. There are no derivative products of the Company’s stock. 8.7. The financial statements and accompanying notes have been prepared on a consolidated basis in accordance with CMB Communiqué Series: XI, No. 29, as well as with International Financial Reporting Standards (IFRS). They have been audited by independent auditors in accordance with the International Auditing Standards (IAS) and disclosed to the public. 9. The Company’s Website and its Contents 9.1. The Company’s website at www.dyh.com.tr is actively used for public disclosures as stipulated in the Turkish Commercial Code, Capital Markets Legislation and CMB Regulations and Resolutions. 9.1.1. The Company’s website is available in both Turkish and English; its content and format comply with the requirements set forth in the Turkish Commercial Code, Capital Markets Legislation and CMB Regulations and Resolutions. 9.1.2. The Company continuously improves and upgrades the services provided by its website. 9.1.3. The Company letterhead clearly indicates the address of its website. 9.1.4. The principles related to the administration of the Company’s website are stipulated in the Disclosure Policy. 10. Annual Report The Company’s Annual Report for 2011 and the quarterly interim reports for 2012 are in compliance with Turkish Commercial Code, Capital Markets Legislation and CMB Regulations and Resolutions. SECTION III - STAKEHOLDERS Since the Company is a holding company, it is not directly engaged in media operations. Thus, the shareholders and investors are its most important stakeholders. Advertisers are another important group of stakeholders since the Company operates in the media sector and advertising revenues constitutes a significant share of the total revenues. The advertising policies and practices are devised within the scope of the individual companies of the Group. DYH actively participates in and supports the efforts of non-governmental organizations operating in the fields of advertising and media. On the other hand, due to the vital importance of human resources in the media sector, human resources management is represented at a high level within the Company and human resources policies are managed at a macro level. The Company’s policies concerning readers, viewers and listeners in publishing and broadcasting media are implemented in coordination with Group companies. 11. Informing the Stakeholders As explained in detail in Section I of this report, information is disclosed to shareholders and investors using methods compatible with the Capital Market Law and CMB Regulations and Principles. The Company management is encouraged to participate in various non-governmental organizations established by its stakeholders. The Company actively participates in such activities along with the advertisers to understand their needs, as well as to provide sustainable growth and financial strength to the sector. In case of any Company transactions violating the legislation or code of ethics, the stakeholders can contact the members of the Corporate Governance Committee or Audit Committee, or individuals authorized to provide information by the Company’s Disclosure Policy, via e-mail.
doğan yayın holding 2012 Annual Report
70 - 71
12. Stakeholder Participation in Management The Company is in constant contact with the stakeholders listed above. All feedback received from the stakeholders is presented to senior management for evaluation after various procedures and solution proposals and policies are developed. The Articles of Association do not provide for a mechanism allowing stakeholder participation in the Company management. The Company’s intranet site is utilized to inform employees about the general activities and practices of the Company and to collect their suggestions. 13. Human Resources Policy 13.1. The Company’s human resources policy has been set down in writing. This policy gives priority to honest and dependable persons with superior knowledge, skills and business ethics who can easily adapt to the corporate culture, are open to change and development and can associate their future with the future of the Company. 13.2. In accordance with its human resources policy, the Company offers equal opportunity to people with the same qualifications in recruitment and career planning. 13.2.1. Recruitment criteria are set down in writing and are followed in practice. 13.2.2. Employees are treated equally in terms of training and promotion opportunities. They are encouraged to take part in training programs geared toward improving their skills and knowledge. 13.3. Decisions and developments concerning employees are published over the intranet established to enhance communications between employees. 13.4. DYH’s efforts with regard to defining job descriptions and allocations for the employees, as well as determining the criteria for their performance evaluation and recognition is continuously updated to meet the demands of changing circumstances. 13.5. The Company’s work environment is designed to maximize safety and productivity. 13.6. Relations with employees are carried out by the Human Resources Department. There are no unionized employees at the Company. 13.7. The Company does not discriminate among its employees and treats all employees equally. Neither the management nor the Company’s Board Committees have received any complaints in this regard. 14. Code of Ethics and Social Responsibility The Company’s code of ethics has been disclosed to the public via the corporate website. The said code of ethics are continuously reviewed and updated to meet current conditions. Thanks to its institutional structure and employees with highly developed social awareness, the Company undertakes social responsibility projects utilizing the common synergy of the companies within its corporate structure. Together with the companies under its umbrella, the Company produces and supports projects that contribute to the cultural and social development of the communities in which it operates, with a special emphasis on educational projects. The activities geared toward the educational, social and cultural development of Turkey are conducted both under the Company, its subsidiaries and through the Aydın Doğan Foundation. The Foundation focuses its activities on facilitating development and improvement in education, public health, scientific research, sports, arts and the economy. The Foundation also extends efforts to support media-related activities, encourage technological developments and expand the scope of cultural and social progress.
CORPORATE GOVERNANCE
CORPORATE GOVERNANCE PRINCIPLES COMPLIANCE REPORT
In addition to the projects organized directly within its own structure, the Company also supports projects of social awareness by various organizations and companies through its media channels and takes on the mission of helping hundreds of projects every year to achieve the prominence they deserve. SECTION IV - BOARD OF DIRECTORS 15. The Structure and Formation of the Board of Directors 15.1. The Company complies with Turkish Commercial Code, Capital Markets Legislation and CMB regulations and resolutions in the formation and election of the Board of Directors. Accordingly; 15.1.1. The Company is managed and represented by a Board of Directors with at least six and at most 12 members elected by the General Assembly from among shareholders. 15.1.2. A certain number of ratio of the Board Members are required to be independent members, as defined by the Capital Markets Board. The determination, nomination, number and qualifications, selection, dismissal and/or resignation of the Independent Board Members are carried out in compliance with Capital Markets Legislation, CMB regulations and resolutions and other applicable legislation. 15.1.3. No more than half the Board members can assume an executive role in the Company. This rule is taken into account especially in determining the duties of the Board members. 15.2. The full names, qualifications and résumés of the Board members are as follows: Member
Duty
Yaşar Begümhan Doğan Faralyalı
Chairperson, Non-Executive Member
Soner Gedik
Vice Chairperson, Executive Member
Yahya Üzdiyen
Board Member, Executive Member
Mehmet Ali Yalçındağ
Board Member, Executive Member
Ertuğrul Feyzi Tuncer
Board Member, Independent Member
Ahmet Kılıçoğlu
Board Member, Independent Member
(*) Hanzade Vasfiye Doğan Boyner resigned from Board Membership on July 26, 2012 and was replaced by Ali İhsan Karacan. Ali İhsan Karacan resigned from Board Membership on February 12, 2013 and was replaced by Yahya Üzdiyen.
Yaşar Begümhan Doğan Faralyalı Born in Istanbul in 1976, Begümhan Doğan Faralyalı received her BSc in Economics and Philosophy at the London School of Economics in 1998. She began her professional career as a consultant at the NY Office of Arthur Andersen and then moved to the London office of Monitor Group, Strategic Consulting Firm, where she was involved in strategy and restructuring projects for leading European media, technology and FMCG companies. After earning her MBA at Stanford University in 2004, she took charge of the business development initiatives of Doğan Yayın Holding (DYH) in the international arena as an Executive Committee member and Vice President for Overseas Investments. There, in charge of the international growth of DYH, she focused on investment opportunities mainly in Europe, including Eastern Europe and Russia. In 2007, she led the startup process of Kanal D Romania, the first foreign television investment of DYH and forged its partnership with the Swiss Ringier Group. In two years, the channel managed to rank third overall in total day viewership. At the same time, she worked on the purchase of Trader Media East, traded on the London Stock Exchange, by Hürriyet. Faralyalı played an active role in this project constituting the largest international acquisition by DYH. After gaining 15 years of overseas experience, she moved back to Turkey in 2009 and became CEO of Star TV. In 2010, she assumed the Presidency of Doğan TV Holding, which also included TV channels Kanal D and CNN Türk. In addition to her role as Chairperson of Kanal D Romania, she has also become Chairperson of Doğan Yayın Holding as of January 1, 2012. She is married and has two children.
doğan yayın holding 2012 Annual Report
72 - 73
Soner Gedik Soner Gedik was born in 1958 in Eskişehir and studied Economics and Finance in the Faculty of Political Sciences at Ankara University. Having successfully passed the placement test in 1981, he joined the staff of tax specialists at the Ministry of Finance where he was later promoted to Tax Inspector in 1985 with the highest degree of the period. He worked as a public servant for six years, auditing leading private and public companies and honing his skills and expertise in finance. In 1987, he joined the Finance Department of Hürriyet Holding A.Ş. to serve as Financial Consultant to the President of the Group Executive Board. From 1989 to 1998, he served as a Board Member and the Vice President of Hürriyet Gazetecilik A.Ş. He played a key role in the founding of Doğan Yayın Holding in 1998 and continued his contributions as CFO and Vice President. Presently, he serves as a member of the Executive Committee of Doğan Group of Companies and Vice Chairperson at Doğan Yayın Holding A.Ş. Soner Gedik is married and has four children. MehmeT Ali Yalçındağ Mehmet Ali Yalçındağ was born in Istanbul in 1964 and graduated with honors in 1989 from the American College in London. Yalçındağ first joined the Doğan Group in 1990 as the assistant General Manager of Doğan Dış Ticaret. In 1991, he became a member of the Executive Committee of Doğan Holding. Then, in 1992, he was appointed Assistant General Manager of the Milliyet daily. In 1994, Yalçındağ assumed several responsibilities during the establishment of the Simge Group and began publishing four new newspapers including Posta, Fanatik and Radikal. When the media companies of Doğan Group merged under DYH in 1996, he was appointed Vice-President of DYH’s Executive Committee. Yalçındağ has contributed to the generation of synergies for all companies who are part of DYH. These include the establishment of Doğan Ofset which integrated all dry press facilities, DPC which put all newspaper printing facilities under a single umbrella and Doğan Factoring which manages the receivables of all group companies. By founding Doğan News Agency, Yalçındağ put all news departments under the control of a single administrative body. In addition, the publication of children’s books was made the responsibility of a single unit, which resulted in the creation of a partnership with the Danish Egmont Group. Magazines published by Hürriyet and Milliyet were merged with the formation of a partnership with Burda Media Group. Yalçındağ also formed a partnership with Time Warner, which enabled the establishment of a common news channel. He has been actively involved in forming other foreign partnerships. With Star TV’s joining the group in 2005, all TV and radio broadcasting companies have become a part of the Doğan TV network. He served as CEO of Doğan Yayın Holding between 1999 and 2010. He has recently taken over as the Chairman of Yandex Turkey, the global search engine. At the same time, he was the Turkish Chairman of the International Advertising Association (IAA), Chairman of the Turkish Advertising Council, a member of Turkish Industrialists’ and Businessmen’s Association (TÜSİAD), the Galatasaray Sports Club and WEF Media Managers. Mehmet Ali Yalçındağ is married and has two children. Yahya Üzdiyen Born in 1957, Yahya Üzdiyen graduated from the Department of Business Administration at Middle East Technical University in 1980. Between 1980 and 1996, he worked as a trade and investment specialist and manager in several privately owned companies in Turkey and abroad. Between 1997 and 2011 he assumed the position of Strategy Group President at Doğan Holding and became Deputy Chairperson on January 18, 2011. During this period, he played an important role in the acquisition, partnership and sale of Group companies, such as Petrol Ofisi, Ray Sigorta and Star TV. Presently acting as Board member in many of the Group companies, Üzdiyen has served as Doğan Holding’s CEO since January 24, 2012. Yahya Üzdiyen is married with two children. Ertuğrul Feyzi Tuncer Ertuğrul Feyzi Tuncer was born in 1939. He received his BA in Business Administration and Economics from Robert College in 1964. Later, he obtained an “Executive Management” certificate from University of Stanford. He started his professional career in 1967, as Regional Director and Director of Investments at Mobil Oil Türk A.Ş. and eventually became General Manager in 1990. In 1994, he served as Chairman at ATAŞ Anatolian Refinery and then became General Manager of BP Mobil Turkey Joint Venture. In 2000, he resigned from both of these positions to continue his career as General Manager and Board member at Petrol Ofisi A.Ş. In 2005, he became Board member at Doğan Holding. In 2006, at Tuncer Consulting Services and Trade, he was the founder and partnership manager of CASE Consulting Energy.
CORPORATE GOVERNANCE
CORPORATE GOVERNANCE PRINCIPLES COMPLIANCE REPORT
Ahmet Kılıçoğlu Born in 1956 in Tirebolu, Ahmet Kılıçoğlu graduated from TED Ankara College and then received his bachelor’s degree in economics in 1977 from the University of Essex and his Master’s in 1978. He started his professional career in 1979 at the Ministry of Industry and Technology and in 1980 became Assistant Specialist at Türkiye İş Bankası. After completing his military service, he worked in the private sector, before assuming administrative positions at the UNDP and F-16 project from 1984 onwards. In 1987, he took office at Türk Eximbank and served in various positions and served as the bank’s Executive Vice President between 1992 and 1998, as CEO and Board member between 1998 and 2010. From 1998 until 2010, he also served as Board member at the Turkish Banks Association. In 2001, Kılıçoğlu was elected President of the Berne Union. From 2008 until 2009, he worked as a consultant to the President at the Islamic Development Bank. In 2010, he became Vice Chairman at Denizbank; currently he is serving as Vice President at the Turkish Education Association. Ahmet Kılıçoğlu is married and has one child. 15.3. Every year, Board members are elected by the General Assembly for a maximum of three years. Unless the term of office is clearly indicated in the General Assembly’s relevant decision, the term of office is assumed to be one year. Board members were elected at the Ordinary General Assembly dated June 4, 2012 to serve until the Ordinary General Assembly for the accounts and activities of 2012. 15.4. There are two independent members on the Board of Directors. In line with CMB’s regulations and resolutions, independent members constitute one-third of the Board. The Chairperson and CEO are not the same individual. 15.5. No more than one-half of the Board of Directors have executive responsibilities. 15.6. The Company does not impose any rules or restrictions on its Board members for assuming additional duties outside of the Company. Since the Company is a holding company and representation in the management of its affiliated companies is in the best interest of the Company and thus its partners, the Company does not prohibit its Board members from assuming duties in the management of its affiliates and subsidiaries. The practices in this respect are continuously reviewed according to changing conditions. Some of our Board members also sit on the Boards of Group companies, since the Company is a holding company. The duties of the Board members outside of the Company are indicated below: Full Name
Duties Outside of the Company
Yaşar Begümhan Doğan Faralyalı
Chairperson and Board Member at Group companies
Yahya Üzdiyen
Chairperson and Board Member at Group companies
Soner Gedik
Board Member at Group companies, Audit Committee Member
Mehmet Ali Yalçındağ
Board Member at Group companies
Ertuğrul Feyzi Tuncer
Independent Board Member at Group companies
Hacı Ahmet Kılıçoğlıu
None
(*) Hanzade Vasfiye Doğan Boyner resigned from her position on the Board on July 26, 2012 and was replaced by Ali İhsan Karacan; he resigned from his position as a Board member on February 12, 2013 and was replaced by Yahya Üzdiyen.
15.7. The Company asks for written declaration from the independent Board members to prove that they satisfy the independence criteria set forth in the CMB regulations and resolutions. As of the date of this report, there exists no circumstance that would compromise the independent status of the Company’s independent Board members. On May 11, 2012, the applications and declarations of independence of two candidate Independent Board members were evaluated by the Board of Directors and subsequently disclosed to the public on June 4, 2012.
74 - 75
doğan yayın holding 2012 Annual Report
The statements of independence from Independent Board members are presented below: Date: 10/05/2012 STATEMENT OF INDEPENDENCE To the Office of the Chairperson of Doğan Yayın Holding A.Ş.; I hereby declare that, as a Board member of Doğan Yönetim Holding A.Ş., I meet the conditions for “independent Board membership” outlined in the Capital Markets Law, Capital Markets Board’s Communiqués, Guidelines and other regulations, as well as the Company’s Articles of Association; and that in case the said conditions cease to exist I shall immediately inform the Office of the Chairperson and resign from this position if so required by a resolution of the Board of Directors. Best regards,
Ertuğrul Tuncer
Date: 10/05/2012 STATEMENT OF INDEPENDENCE To the Office of the Chairperson of Doğan Yayın Holding A.Ş.; I hereby declare that, as a Board member of Doğan Yönetim Holding A.Ş., I meet the conditions for “independent Board membership” outlined in the Capital Markets Law, Capital Markets Board’s Communiqués, Guidelines and other regulations, as well as the Company’s Articles of Association; and that in case the said conditions cease to exist I shall immediately inform the Office of the Chairperson and resign from this position if so required by a resolution of the Board of Directors. Best regards,
H. Ahmet Kılıçoğlu
CORPORATE GOVERNANCE
CORPORATE GOVERNANCE PRINCIPLES COMPLIANCE REPORT
16. Operating Principles of the Board of Directors 16.1. The Board of Directors is structured to ensure maximum influence and effectiveness in full compliance with CMB’s regulations and resolution. Relevant rules are set forth in the Company’s Articles of Association. Accordingly: 16.1.1. Board members are elected from among persons who possess basic knowledge of the legal framework regulating activities and transactions related to the Company’s field of activity, are educated and experienced in company management, can interpret financial statements and reports and are preferably university graduates. 16.1.2. Every year, the Board of Directors identifies from among the directors the members responsible for affairs that require expertise. If it deems necessary, the Board also determines the executive members who will assume some of the authority and the responsibility for certain parts of the Company’s businesses, as well as the responsibility for overseeing the implementation of Board resolutions. The Board of Directors also plans to transfer some or all of its powers to senior executives, as allowed by the Turkish Commercial Code and Capital Markets Legislation, after determining the principles and procedures of this transfer in line with the Turkish Commercial Code. 16.2. The résumés of the Board members are available in the annual report and on the Company’s website at www.dyh.com.tr. 16.3. Board members are provided with timely access to any information they need to fully meet their obligations. 16.4. The Board of Directors issues a separate resolution for the approval of the annual report, the financial report and the corporate governance compliance report. 16.5. In 2012, 23 Board meetings/decisions were held/made (2010: 35) and the decisions at Board meetings were taken by the unanimous vote by the participants while no dissenting votes were cast. 16.6. A Board of Directors Secretariat, which serves all Board members and reports to the Chairperson of the Board of Directors, was formed to maintain documents related to Board meetings. The duties and responsibilities of the Board of Directors Secretariat are outlined in the Articles of Association. 16.7. Board of Directors meetings are planned and held in an effective and efficient manner. As stipulated in the Company’s Articles of Association; 16.7.1. The Board of Directors convenes as required for the Company’s business, but no less than once a month. 16.7.2. As a rule, the Board of Directors convenes upon the invitation of the Chairperson or the Vice Chairperson. The Board of Directors must also be invited for a meeting upon the request of at least three members. Moreover, any of the Company’s Statutory Auditors can invite the Board of Directors for a meeting and set the agenda for the meeting. 16.7.3. The Board’s meeting invitations also include the agenda and are sent out at least seven days before the day of the meeting and all information and documents regarding the agenda items are attached to the meeting invitation. 16.7.4. As a rule, the Board of Directors convenes at the Company headquarters. However, with a Board of Directors resolution, meetings may be held in another location in the city of the headquarters or in another city. 16.7.5. In-person participation for Board members at the meetings is the rule. Meetings may also be attended using any technology that provides remote access to the meeting. The opinions of those members who do not attend the meeting but submit their opinions in writing shall be conveyed to the other members.
76 - 77
doğan yayın holding 2012 Annual Report
16.7.6. All Board resolutions are recorded in the meeting minutes and signed by the participants of the meetings. The Board members who cast dissenting votes must sign the meeting minutes with their justifications for their dissenting votes. Board resolutions, meeting minutes, related documents and correspondence are kept and regularly archived by the Board of Directors Secretariat. Detailed reasons for the dissenting votes of the independent Board members are disclosed to the public. 16.7.7. The quorum for Board of Directors meetings is the absolute majority of its members. Decisions are taken by the majority of the participating members. In the event of a tie, the issue voted upon is transferred to the next meeting’s agenda. In the event that a majority is not reached in the next meeting, the proposal is deemed rejected. Each Board member is entitled to one vote regardless of his/her position and field of responsibility. Board members do not enjoy privileged voting rights or negative veto rights. 16.8. Travel and meeting expenses of the Board of Directors, as well as the expenses for the special tasks related to the Board’s activities and similar expenses are paid out of the Company’s general budget without any restrictions. 17. The Number, Structure and Independence of Board Committees 17.1. In line with the position and the needs of the Company, four committees were formed to ensure that the Board of Directors successfully exercises its duties and responsibilities. These committees are the Executive Committee, the Audit Committee, the Corporate Governance Committee the Early Risk Detection Committee. 17.2. Charters regarding the functioning of the committees are stated in the Articles of Association. 17.3. Additionally, the Audit Committee and the Corporate Governance Committee have written charters that are approved by the Board of Directors and publicly posted on the Company’s website: www.dyh.com.tr. These charters were created carefully and in due consideration of the Capital Markets Legislation, CMB regulations and resolutions, Articles of Association and international practices abroad. The committees’ charters are reviewed according to legislative changes and changing circumstances. The committees convene at least every three months. 17.4. Information on the Executive Committee is presented below. 17.4.1. Information on committee members is listed below. Full Name
Title
Other Duties
Duties in Other Committees
Yahya Üzdiyen
President
Board Member
None
Soner Gedik
Member
Board Member
None
Ahmet Toksoy
Member
CFO
None
17.5. Information concerning the Audit Committee is presented below. 17.5.1. Information on committee members is listed below.
Full Name
Title
Association with the Company
Independence Status
Duties in other Committees
Hacı Ahmet Kılıçoğlu
President
Independent Board Member (Non-Executive)
Independent
Corporate Governance Committee
Ertuğrul Feyzi Tuncer
Member
Independent Board Member (Non-Executive)
Independent
Corporate Governance Committee
CORPORATE GOVERNANCE
CORPORATE GOVERNANCE PRINCIPLES COMPLIANCE REPORT
17.5.2. The Audit Committee President Hacı Ahmet Kılıçoğlu is a non-executive Independent Board Member. 17.5.3. Committee members do not have executive duties. 17.5.4. The Audit Committee carries out its duties regularly in compliance with the Capital Markets Legislation and CMB’s regulations and resolutions. Taking into account practices abroad, we can easily state that the standard achieved in this Committee’s activities is at the international level. Within this framework, the Committee in 2012: - Reviewed the financial statements, footnotes and independent audit reports of the Company, as well as those of its subsidiaries that are listed on the Borsa Istanbul as a result of the Company’s financial statements being prepared on a consolidated basis, before they were publicly reported and held meetings with the independent auditing firm, - Reviewed the independent auditing contracts of the Company and its subsidiaries listed on the Borsa Istanbul, - Reviewed the internal audit activities conducted by the Internal Audit Department, as well as the measures taken - Performed studies on the subject of risk management. 17.6. The Corporate Governance Committee is also formed by the stipulation of the Company’s Articles of Association and the information on this Committee is presented below: 17.6.1. Information on the Committee members is listed below: Independence Status
Duties in Other Committees
President Board Member (Independent)
Independent
Audit Committee Member
Member
Board Member (Independent)
Independent
Audit Committee President
Member
Doğan Group of Companies, Vice President of Finance (Capital Markets, IFRS/CMB Reporting and Affiliates Oversight)
Dependent
Early Risk Detection Committee Member
Full Name
Title
Ertuğrul Feyzi Tuncer Hacı Ahmet Kılıçoğlu(*)
Dr. Murat Doğu
Association with the Company
Upon a resolution of the Board of Directors, dated March 4, 2013 and numbered 2013/5, Corporate Governance Committee Membership left vacant after the resignation of Ali İhsan Karacan was filled by Hacı Ahmet Kılıçoğlu.
(*)
17.6.2. Although more than half of the Committee members have executive duties, as per CMB’s regulations and resolutions, it is sufficient for the President of the Corporate Governance Committee to be an Independent Board member. 17.6.3. The Committee has functioned on a regular basis since its inception. Accordingly, in 2012: - The Committee assessed the compliance of the corporate governance compliance reports produced by the Company and its public subsidiaries. - The Committee ran compliance analyses on annual reports produced by the Company and its public subsidiaries. - It was assured that the Ordinary General Assembly for the year 2011 was held in accordance with applicable legislation. - The Committee ensured that relations with shareholders and investors were managed in a regular fashion, as per the applicable legislation and principles. - It was assured that the website was continuously updated and enhanced. - The Company received its revised corporate management rating from the world’s most prestigious corporate rating agency ICS on July 31, 2012, which was subsequently disclosed to the general public.
78 - 79
doğan yayın holding 2012 Annual Report
17.7. According to an amendment to CMB’s Communiqué Series: IV No: 56, Risk Assessment Committee was set up with a resolution of the Board of Directors, dated March 18, 2013 and numbered 2013/6. The information on the Early Risk Detection Committee is presented below:
Full Name
Title
Association with the Company
Independence Status
Duties in Other Committees
Independent
Audit Committee Member; Corporate Governance Committee President
Erem Turgut Yücel Member
Doğan Group of Companies, Chief Legal Officer
Dependent
None
Tolga Babalı
Member
Doğan Group of Companies, Vice President of Risk Management and Financial Affairs
Dependent
None
Member
Doğan Group of Companies, Vice President of Financial and Administrative Affairs
Dependent
None
Dr. Murat Doğu
Member
Doğan Group of Companies, Vice President of Capital Markets, IFRS/CMB Reporting and Affiliates Oversight
Dependent
Corporate Governance Committee Member
Ayhan Sırtıkara
Member
Doğan Group of Companies, Director of Analysis and Evaluation Dependent
None
Korhan Kurtoğlu
Member
Doğan Group of Companies, Director of Financial Reporting Dependent
None
Ertuğrul Feyzi Tuncer
Yener Şenok
President Board Member (Independent)
17.8. The Committees of the Company operate within the context of their authorities and responsibilities and submit proposals to the Board of Directors. However, the final decisions are made by the Board of Directors. 17.8.1. The Committees inform the Board of Directors as regards the resolutions they have reached. 17.8.2. The Committees inform the Board of Directors about their annual activities. 17.9. Certain members of the Board sit on more than one committee since there are only two Independent Board members. 18. Risk Management and Internal Control Mechanism Since the Company is a holding company, it predominantly focuses on asset management, the financial performance of its affiliated companies and financial risk. The management of financial risk is monitored by the Chief Financial Officer, relevant Vice Presidents of Financial Affairs and the Vice President of Finance and Portfolio Management. Identification and reporting of financial as well as operational risks of the affiliated companies are also under the responsibility of and undertaken by the CEO. From time to time, the Audit Committee and the Corporate Governance Committee also report problems and suggestions for solutions regarding risk management and internal control mechanisms to the Board of Directors. In 2012, special emphasis was given to risk management and reporting as well as to restructuring efforts. Within the framework of these efforts, information on the implemented processes and methods for audit/risk management is exchanged with the Chief Financial Officer and Vice President for Audit at the Doğan Şirketler Grubu Holding A.Ş., the ultimate controlling partner. The Early Risk Detection Committee set up on March 18, will present suggestions to the Board of Directors with regard to the identification and management of risk.
CORPORATE GOVERNANCE
CORPORATE GOVERNANCE PRINCIPLES COMPLIANCE REPORT
19. The Strategic Goals of the Company The mission, vision, values and strategies of the Company are publicly announced on its website - www.dyh.com.tr. The mission of the Company is to maintain its leadership with regard to news, entertainment and media sectors and to compete in global markets. Its vision is to develop media tools for news, education and entertainment and make these tools more widely accessible, as well as to use innovative methods to deliver content to all customers and to be one of the world’s leading media companies. The strategy of the Company is to provide customer-focused services, develop customized products for target audiences, produce content using traditional brands, keep pace with advances in technology, diversify and enhance content distribution channels using innovative methods, provide customized information and entertainment products and tools, diversify and expand sales and distribution channels and collaborate with leading global media companies. The Board of Directors and the management of the Company continuously monitor the status of the Company against its strategic goals. During the frequent and regularly held Board meetings, the Company’s situation is reviewed and new goals and strategies are developed. 20. Remuneration of Board Members 20.1. According to the Articles of Association, a fee determined by the General Assembly is paid to the Chairperson, Vice Chairperson and members of the Board of Directors. This fee is determined in relation to the time required for the meetings, pre-meeting and post-meeting preparations and the performance of duties, as well as the salary paid to the CEO. Moreover, the attendance fee payable to participants in meetings is also determined by the General Assembly. While establishing a committee, the Board of Directors determines whether or not the Committee Chairperson and members will be paid a fee. The Board of Directors also determines the amount of this fee, if any and its payment terms. In the event that a Committee Chairperson or member is at the same time the Chairperson or a member of the Board of Directors, the General Assembly decides whether such a Committee member is going to receive a fee. The General Assembly also determines the amount of the fee, if any and payment terms. As per CMB’s regulations and resolutions, the Board of Directors has established a “Remuneration Policy” with its decision dated June 4, 2012 and numbered 6; it was subsequently submitted to the General Assembly and disclosed to the public. 20.2. At the Ordinary General Assembly meeting where the activities of 2011 were discussed, it was unanimously decided that the Board members shall be paid a net monthly fee of TL 10,000. It was also unanimously decided that no additional fee would be paid to Board members who are appointed to the committees established under the Company’s Articles of Association. There is no additional performance-based compensation for the Board members. 20.3. Doğan Yayın Holding defines its key management personnel as Board members and Executive Committee members. The short term benefits offered to key management personnel consist of salary, bonus, health insurance, communications and transportation fees; in 2012, these amounted to TL 4,751 thousand (2011: TL 7,499 thousand).
doğan yayın holding 2012 Annual Report
OTHER OBLIGATORY DISCLOSURES
80 - 81
GENERAL INFORMATION The Accounting Period for the Report This report covers the period from January 1, 2012 till December 31, 2012. The Company’s Trade Name, Trade Registry Number, Contact details of Headquarters and Branches Website Trade Name : Doğan Yayın Holding A.Ş. Trade Registry Number : 172165 Address : Burhaniye Mahallesi, Kısıklı Caddesi, No: 65, Üsküdar/İstanbul Tel : (216) 556 9000 Fax : (216) 556 9200 Website : www.dyh.com.tr The Company’s Stakes in Direct or Indirect Subsidiaries The Company has direct or indirect subsidiaries. The information about these and the Company’s stakes in these are presented in the endnotes to the consolidated financial statements for the period from January 1, 2012 until December 31, 2012. Information About the Company’s Acquisition of its Own Shares: During the accounting period from January 1, 2012 until December 31, 2012, the Company did not acquire its own shares. The Company Executives’ Transactions with the Company on their own behalf or on Behalf of Third Parties, or Activities Falling Under Non-Compete Clause within the Scope of the Permission by the General Assembly: Board Members receive the permission of General Assembly to carry out the transactions outlined in the Turkish Commercial Code’s Articles 395 and 396. According to the information available to the Company, Board members did not conduct any commercial activities on their own behalf or on behalf of third parties in the Company’s business line. Administrative or Legal Sanctions Imposed Upon the Company or its Executives Due to Action Violating Legislation: During the period, no administrative or legal sanction was imposed upon the Company or its executives due to actions violating legislation. Amendments to the Articles of Association and their Reasons For reasons of aligning the Articles of Association with the “Communique on the Determination and Application of Corporate Governance Principles” Serial:IV, No:56, later amended by Capital Markets Board’s Communique Serial: IV, No: 57, issued on the Official Gazette dated 11.02.2012 and numbered 28201; the change of address of the Company headquarters; the increase of the registered capital ceiling form TL 2,000,000,000 to 3,000,000,000 due to the attainment of the registered capital ceiling; and amending the body text of the Articles of Association in line with the changes in the Capital Markets Legislation and applicable legislation, amendments to the Articles 4., 5., 7., 8, 10, 11., 12., 13., 16., 18., 19., 20., 22., 25., 27., 28., 29., 32., 33., 34., 38. of the Articles of Association were submitted to and approved at the Ordinary General Assembly held on June 4, 2012, as regards the activities of the year 2011, in line with the permission dated May 21, 2012 and numbered 1388-5575 by the Capital Markets Board the permission dated May 24, 2012 and numbered 3913 by the Ministry of Customs and Trade, General Directorate of Domestic Trade.
CORPORATE GOVERNANCE
OTHER OBLIGATORY DISCLOSURES
RESEARCH AND DEVELOPMENT ACTIVITIES Research and Development Activities The Company carried out no R&D activities during 2012 and thus incurred no related costs. COMPANY ACTIVITIES AND IMPORTANT DEVELOPMENTS The Attainment of Targets Set in Previous Periods, Implementation of General Assembly Resolutions, Any Reasons for Failure to Attain Targets or Implement Resolutions Assessments: The Company implemented all General Assembly resolutions in the concerned accounting period. Lawsuits Against the Company Which Could Affect its Financial Situation and Activities Their Possible Outcomes: The Company sets aside reserves for the pending administrative, commercial and business lawsuits filed against it. The litigations against the Company and the reserves set aside for possible litigation damages are as follows: Lawsuits (TL thousand) The details of litigations against Doğan Yayın Holding and its subsidiaries that were pending as of December 31, 2012 and December 31, 2011 are as follows: December 31, 2012
December 31, 2011
Administrative Cases
53,232
54,391
Commercial Cases
13,569
7,311
Business Cases
6,060
6,585
Other
2,052
6,298
Total
74,913
74,585
As regards the pending lawsuits detailed above, a provision amounting to TL 26,651 has been provided with reference to the opinions of the Group’s legal advisors and past experience of management related to similar litigations against the Group (December 31, 2011: TL 19,282). Legal cases mainly consist of pecuniary and non-pecuniary damages and lawsuits filed against Doğan Yayın Holding and its subsidiaries and lawsuits initiated by the Radio and Television Supreme Council. Information on Extraordinary General Assembly: No Extraordinary General Assembly was held during the period. Information on Private and Public Audits: None. Information about the Company’s Donations, Aids Spending on Social Responsibility Projects During the Year: During 2012, the Company donated TL 5,000 to educational projects by various foundations and associations serving the common good. The Company’s Legal Actions and Measures Taken or Avoided in Favor of the Parent Company or Group Companies: In the reporting period, the Company carried out no legal action in favor of the parent company or any subsidiary thereof, with instructions by the parent company. The Company did not take or avoid taking any measures or carry out any transaction that needed to be redressed in favor of the parent company or its subsidiaries.
doğan yayın holding 2012 Annual Report
82 - 83
Any Corrections Against the Legal Actions Listed Above, Any Damages Inflicted in the Company Arising from Measures Taken or Avoided, Any Corrections for Such Damages: Since the Company did not take any action falling under the scope of the previous paragraph, there are no damages to be redressed. FINANCIAL POSITION The Nature and Volume of Capital Markets Instrument Issued: No capital markets instruments were issued during the period between January 1, 2012 to December 31, 2012. Notes and the Management’s Assessments of the Company’s Shareholders’ Equity and Indebtedness Level: As of December 31, 2012, the shareholders’ equity stood at TL 1,420,467, which is 29% less than the issued capital of TL 2 billion. This was due to one-off payments and expenses within the scope of the Law No. 6111. However, it is evident that the increasing profitability of Company activities will improve the volume of the shareholders’ equity year on year. Measures to Improve the Company’s Financial Position: In order to improve its financial position, the Company has taken measures such as decreasing the cost of borrowing, taking corporate finance actions to improve the Company’s structure and ensuring a more efficient cash flow. In 2012, the net consolidated debt stood at TL 1,338 million. However, the cash raised by the sales of subsidiaries and real estate in 2011 and 2012 is expected to have a positive impact on the net debt level by 2013. INFORMATION ON THE PARENT COMPANY Information on the Parent Company Shares Held by Group Enterprises The parent company is Doğan Şirketler Grubu Holding A.Ş.; the Company holds no shares in the parent company. Notes on the Internal Audit and Risk Management Systems of the Group as Regards the Preparation of Consolidated Financial Statements The consolidated financial statements are issued in line with CMB’s Communique Serial:XI, No:29, International Accounting Standards and International Financial Reporting Standards the principles of presentation are outlined by CMB’s regulations and resolutions. The financial statements are independently audited as per International Audit Standards. The views of the relevant executives are received during the preparation of the financial statements, which are then reviewed by the Audit Committee and approved by the Board of Directors. Information on Reports Outlined in Turkish Commercial Code Article 199 The Company’s Annual Report and affiliation report are issued in line with the provisions of the Turkish Commercial Code. The Board made no demands falling under the scope of Turkish Commercial Code, Article 199/4.
CORPORATE GOVERNANCE
OTHER OBLIGATORY DISCLOSURES
Direct or indirect control of a five, ten, twenty, twenty five, thirty three, fifty, sixty five or hundred percent stake at a capital markets firm and reasons for falling below these percentages: DYHOL December 31, 2012 Effective Share Ratio (%)
DYHOL December 31, 2011 Effective Share Ratio (%)
Change (%)
Doğan Uydu Haberleşme Hiz. ve Telekomünikasyon Tic. A.Ş.
79.96
0.00
79.96
Establishment
2. Doğan Müzik Yapım ve Ticaret A.Ş.
79.96
86.25
6.28
Share transfer
3. Eko TV Televizyon Yayıncılık A.Ş.
75.97
59.82
16.15
Acquisition from Doğan TV Holding Turner
4. Doğan Medya International S.A.
85.81
71.37
14.44
Share transfer
Moda Radyo ve Televizyonculuk 5. Yayıncılık Ticaret A.Ş.
0.00
79.82
79.82
Sales
80.09
46.97
33.12
Share transfer
75.84
0.00
75.84
Establishment
0.00
100.00
100.0
Acquisiton by Doğan Holding
96.19
Transfer of Doğan Müzik Kitap Mağazacılık Pazarlama A.Ş. to Doğan Şirketler Grubu Holding A.Ş.
Company Name 1.
6. Uydu İletişim Basın Yayın A.Ş. 7.
Kanal D Yapımcılık Reklamcılık ve Dağtım A.Ş.
Doğan Müzik Kitap Mağazacılık 8. Pazarlama A.Ş.
Hür Servis Sosyal Hizmetler ve 9. Ticaret A.Ş.
0.00
96.19
Notes
10. Net D Dijital Yayıncılık Ticaret A.Ş.
79.96
0.00
79.16
Establishment
11. Jop.ru.LLC
49.44
0.00
49.44
Establishment
12. Pronto Pskov
44.50
0.00
44.50
Establishment
0.00
47.35
47.35
Sales
49.44
0.00
49.44
Establishment
13. Rosprint 14. Publishing International Holding BV
doğan yayın holding 2012 Annual Report
Media Code of Conduct
84 - 85
DYH’s publishing and broadcasting principles were reviewed in December 2012 taking into consideration the new media and updated principles were disclosed. The new principles are split into two as publishing and broadcasting and the shared values are defined as given below: Our Shared Values Doğan Media Group is a leading media provider offering exclusive, topical news stories, content and services that engage its audience in active dialogue and add value to their daily lives across all channel forms and on a global, 24/7 level. Our “Shared Values” are the most important shared asset between publisher and employee constitute the foundation of our publishing principles. Our Shared Values also form the basis of the intangible, yet critically important, contract between Doğan Media Group, its readers, viewers and listeners. We promise our readers, viewers and listeners a top-quality publishing activity – one that’s creative and in line with professional and ethical principles one that at times breaks the mold and traditions, but is everrespectful of its audience. 1. Trust Earning society’s trust through our general attitude and our audience’s trust through what we print and broadcast is our most important value. The very foundation of Doğan Media Group today, as well as in the future, is comprised of trust. 2. Independence a) The independent nature of Doğan Media Group, its management and employees, is what forms the basis of the trust we have established in society as well as with our audience. Doğan Media Group employees and management respect their professional position above and beyond any and all relationships based on interest and influence. They may not enter or partake in any activity or organization that could tarnish the Group’s, the Company’s or their own reputation should avoid any and all conflict-of-interest situations that would cast doubt on Doğan Media Group’s independent stance. b) Among the most integral factors of the Group’s independence is the fact that the Doğan Media Group’s activities are built upon economic realities and prudent management principles. We will not engage in activities that do not create economic value. This is because an activity that is not economic in nature is simply dependent on yet another source. c) We separate and identify commercial elements appearing in our publications, such as advertisements, commercial messages and sponsorship matters, in a manner that leaves no doubt as to the commercial nature of such elements. We exercise care to not use commercial brand names of companies and commercial product names, provided that such names do not constitute the main story. We do not publish or broadcast any content whatsoever that is based on any suggestion or advice received from advertising sources. 3. Accuracy and Truthfulness a) The fundamental purpose of our publications is to relay facts to the public at large in an objective manner, without distorting, exaggerating or censuring said facts and without being influenced by any external pressure or special interest groups along the way. b) The element of speed should never overshadow truthfulness, exaggeration and simplification should never stand in the way of the multi-faceted nature of truth. We should openly admit to what we do not know and make an effort to avoid speculation. c) Our goal is to never mislead our audience knowingly or deliberately, while minimizing any misleading behavior that stems from a lack of information and diligence on our part and take corrective action at the earliest possible moment. 4. Impartiality, Pluralism, Fairness a) Our publications should be pluralist in a manner that reflects different aspects of the truth and to be impartial in the face of ideas that represent different sides of the truth and social actors.
CORPORATE GOVERNANCE
Media Code of Conduct
Impartiality and pluralism means considering our publications in their entirety and within a reasonable time span reflecting all mainstream ideas existing within society, without ignoring any such ideas within the confines of proportional fairness. b) We aim to be open-minded and free of prejudice in the course of evaluating opinions and elements of proof that either defend or oppose an idea, attitude or behavior. We must act fairly in the face of different opinions, ideas, attitudes and behavior. We must be able to place ourselves in the shoes of those that are different measure whether or not we have been acting fairly. 5. Compliance with Social Values a) We live in a nation of many voices, within a society that is rapidly changing. We regard wealth in terms of the ideas, beliefs, attitudes and behaviors of our society and consider it a resource that feeds our publishing endeavor. We are respectful toward our democratic and secular system the Constitution and Laws that bind such diversity and wealth together. b) We avoid publishing material that limits the freedom of speech, conscience and expression, is in violation of basic human rights, provokes hatred, brutality and animosity, fans hatred and animosity among communities and nations and offends religious beliefs and sensitivities. c) With regard to violence and criminal activity, we do not include details in our news stories that could a) adversely affect people, especially children, b) act as a motivational factor or c) divulge specific methods. This includes language and narration that glorifies violence in any publication that deals with violence and criminal activity. d) We are mindful of the public’s right to be informed and how this right must be carefully balanced against furthering terror propaganda in our publications dealing with terrorism. As such, we exercise care to not aggrandize the consequences of terrorist activities in an excessive and disproportionate manner we use language that is not ethnically discriminatory. e) Our publications cover every aspect of global human life and we are aware that this could at times prove to be disturbing, uncomfortable and/or regarded as out of place. While we engage in such reporting, we take pains to not cause deliberate harm to people – especially those groups that need special attention such as children, the disabled and minorities. We avoid offending community values in an unnecessary, excessive and unjustified manner. f) We abstain from defining individuals by their race, nation, social class, religious belief or lack thereof, professional group or physical or mental disabilities, as long as such elements are not an integral part of the story being reported we avoid creating a setting where such individuals could be subjected to mockery, belittlement, indignity or humiliation due to who or what they are. g) We do not engage in “outing” a certain group or individual through various adjectives, assessments or methods render them subjects of discrimination. We certainly and most definitely do not allow expressions that promote hate crimes. h) We do not use monikers or references that mock or humiliate individuals and entities beyond the boundaries of fair criticism. i) We are keenly aware of the fact that our audience expects that their children are protected. We exercise special care so that children and juveniles who appear in or constitute the subject matter of our publications and broadcasts are protected both physically and emotionally. 6. Right to privacy and protecting privacy a) Our publications respect the privacy of individuals. We do not disclose individuals’ private lives, communications, correspondences or documents unless there is a compelling reason to disregard the requirements of the principle of privacy in order to serve the greater good. b) We do not use an individual’s lifestyle, attitude or behavior as a pretext to disclose their private life unless for the greater good. c) We do not publish secretly-obtained images and sound recordings that violate the sanctity of privacy, or any recordings that violate the freedom of communication, unless required for the greater good, even if such recording was obtained through legal means.
86 - 87
doğan yayın holding 2012 Annual Report
d) We exercise care to not accuse any individual of actions that are considered a crime by the law unless concrete facts exists to that effect, or pronounce individuals and entities guilty as charged in the course of legal investigations unless proven so. We provide equal coverage to the prosecution and the defense, avoid impacting investigations in a negative manner, and take care to not influence our audience. 7. Transparency and accountability a) We are obligated to be accountable to our audience in every endeavor we undertake, starting with our publications. Owning up to our errors openly, if that is the case, and remedying such errors in the most expedient manner is our priority. We respect the right to respond and correct elements that are borne out of false stories and portrayals, and news and articles that infringe upon constitutional rights. b) All publishing and broadcasting entities within Doğan Media Group take structural measures and establish mechanisms designed to avoid repetitive errors in printing and broadcasting, and facilitate prompt follow-up on the opinions and complaints stated by our audience. 8. Corporate dignity a) If it is the public’s respect we strive to earn, we must first respect our own organization and colleagues. b) Regardless of their position within Doğan Media Group, every employee exercises care to avoid behavior that would compromise the dignity of the company or their colleagues, or cause harm to the reputation of the companies under the Group’s umbrella. Publishing and Broadcasting Board A Board was formed to supervise the publishing and broadcasting practices of media institutions belonging to Doğan Group. The Board, made up of various experts specialized in different fields and disciplines, representing a wide social scope; it was formed with the aims of supervising the practices of the editorial principles, determining on the matters that could not be solved by the media institutions themselves, removing different interpretations and pursuing to achieve broadcasting standards that conform to universal norms. The members can remain on the Board for a maximum of six years continuously. At the end of the first two years, one third of the Board will be renewed.
Prof. Dr. Feride Acar
Faculty member at Middle East Technical University, Member of the UN Committee on the Elimination of Discrimination against Women
Bekir Ağırdır
General Manager at KONDA Research Company, writer and researcher
Prof. Dr. Bülent Çaplı
Faculty member at Bilkent University, specialist in visual media
Mustafa Denizli
Sports person
Aydın Doğan
Honorary Chairman of Doğan Şirketler Grubu Holding A.Ş.
Doğan Hızlan
Critic of literature and arts, writer, publishing consultant
Prof. Dr. Yasemin İnceoğlu
Faculty member at Galatasaray University, specialist in communications
Altan Öymen
Journalist and writer
Dean at Bilgi University’s School of Law, specialist in constitutional and human Prof. Dr. Turgut Tarhanlı rights law Prof. Dr. Salih Tuğ
Ex-Dean at Marmara University’s School of Theology, President of Turkish National Culture Foundation’s Board of Trustees
Prof. Dr. Aydın Uğur
Faculty member at Bilgi University, specialist in political science and communications
Volkan Vural
Ex-Ambassador, ex-General Secretary of EU Affairs, Consultant to the Chairperson at Doğan Holding
Prof. Dr. Nevzat Yalçıntaş Economist, ex-minister, Member of Parliament and ex-General Manager of TRT
CORPORATE GOVERNANCE
Code of Ethics and Conduct
DYH employees abide by the following code of ethics and conduct in their work: Objectivity Since the provision of media services constitutes its main field of activity, DYH is bound by its public duty and maintains an objective stance concerning public order and policy. This approach is also expressed in the code of ethics. DYH respects the privacy of individuals within the scope of its media activities. DYH and its employees safeguard personal information gathered concerning the people and companies with whom they are associated, in accordance with the relevant laws and legislation. The management and employees of the Company cannot offer any material benefits to people they are associated with due to their or the Company’s interest. Institutions under the helm of DYH will not permit, contribute, or tolerate any commercial dealing that is in breach of this policy. DYH employees know their business clients and do not enter into commercial dealings with people involved in criminal acts, or into relations on money laundering activities with these persons. DYH operates in several countries beyond Turkey’s borders. The operations in all these countries are fully compliant with the international trade regulations governing issues such as licensing, shipping bills, import documents and storage of reports and records. DYH makes the utmost effort to make sure that transparency and credibility prevails in capital markets. Trade secrets, trademark, copyright and other information governed by intellectual property rights are among the most valuable assets of DYH. It is one of DYH’s main policies to establish, protect, maintain and defend all its commercially significant intellectual property rights and to use those rights in legally responsible ways. All employees should take necessary precautions to safeguard these assets. Just as it protects its own intellectual rights, DYH respects and upholds the intellectual property rights of others. a) DYH’s Core Values 1. Compliance with the law and social, democratic values DYH does not violate the law. It does not offend social values or behave in a way that may have a negative impact on its reputation. DYH respects the democratic structure and associated rules. It believes in and supports modernization. 2. Focus on customers The sole reason for DYH’s existence is its customers, who purchase its books, advertise through its channels and use goods and services that it provides. It is DYH’s responsibility to understand and meet customer expectations and, in the end, earn their respect. 3. Our actions earn us pride and respect Every activity at DYH is evaluated on the basis of pride and respect, the most important of DYH’s core values. Our reputation is our most valuable asset. Our relationships with each other should also earn the Group pride and respect. 4. Our operations create value for our shareholders DYH operations are built upon economic realities and prudent management principles. The Group does not engage in operations that do not create economic value because we believe that non-economic harm our country, our society and our other core values in the long-term.
doğan yayın holding 2012 Annual Report
88 - 89
b) Practices Regarding Codes of Conduct 1. Responsibilities of the employees All personnel at DYH and the Group companies working under an employment contract for a definite or indefinite period are subject to the DYH Code of Conduct. Subsidiaries of DYH and other Group affiliates commit to adopting and implementing similar rules. 2. Responsibilities of executives and leaders Executives will lead the efforts to regularly monitor matters related to direct reporting and compliance with the rules. They should set an example for all employees with their leadership and conduct. They are required to ensure that the employees understand that performance is never more important than complying with the corporate rules. The executives will encourage employees to share their doubts about honesty and to ask any questions they may have. 3. Reporting One of the most important responsibilities of DYH employees is to report to the relevant office whenever they suspect a violation of DYH’s Code of Conduct or the law. c) Relationships with Customers and Suppliers 1. Inappropriate payments DYH employees cannot offer, or allow to be offered, a valuable article (such as money, goods or services), directly or indirectly, to obtain an unfair advantage in the sale of goods and services, in financial transactions or during the representation of the Company interests to official bodies. DYH Group Companies cannot consent to, participate in or tolerate any commercial practice that violates this policy. 2. International trade and business relations In all countries where it conducts business, DYH complies with international trade regulations on matters such as licensing, delivery documents, import documents, notifications and maintenance of records. 3. Identification of customers People engaged in criminal activities (e.g., illegal drug trafficking, bribery, forgery) may try to launder money to conceal or legitimize the proceeds from such criminal activity. DYH fully complies with antimoney laundering laws worldwide. 4. Protection of private and confidential information In accordance with all applicable rules and regulations, DYH and its employees are committed to protecting private information about individuals and corporations they conduct business with against any improper or unauthorized use and disclosure. 5. Relations with suppliers DYH believes that relations with its suppliers usually impact its dealings with the customers, as well as the quality of its own goods and services. Therefore, DYH is committed to conducting relationships with suppliers in an efficient, fair and lawful manner.
CORPORATE GOVERNANCE
Code of Ethics and Conduct
d) Relations with Official Bodies DYH commits itself to complying with all applicable laws and regulations in its business dealings with official bodies and observing the highest standards of business ethics. e) Relations with Competitors DYH commits itself to complying with competition laws, regulations and agreements in all of its activities. f) Environment and Health DYH targets perfection on environmental and health compliance. The management and all personnel are aware of their responsibilities in this matter and commit themselves to complying with all environmental laws. g) Relations with Employees DYH provides fair and equal opportunities for all of its employees to work in a safe environment and achieve personal development. With a view toward enabling the development of society and individuals, the Group complies with all applicable labor laws and regulations. h) Protection of DYH Assets 1. Conflicts of interest DYH requires of all of its employees with activities outside their job to comply with laws and avoid conflicts of interest with their professional roles as DYH employees. Employees cannot abuse DYH resources or damage its image or reputation. 2. Audit and control DYH commits itself to establishing appropriate control mechanisms in accordance with the laws, regulations and Company policies. 3. Rules regarding the Stock Exchange and Company stock DYH commits itself to making every effort to facilitate transparency and confidence in capital markets. 4. Intellectual property rights Intellectual property - trade secrets, brands, copyrights and other proprietary information - is among DYH’s most valuable assets. One of the main policies of DYH is to establish, protect, maintain, defend and prudently utilize all commercially important intellectual property of DYH. All employees are required to take the necessary measures to protect these assets. DYH not only protects its own intellectual property rights, but also respects the intellectual property rights of others.
90 - 91
doğan yayın holding 2012 Annual Report
AUDIT REPORT
TO THE PRESIDENCY OF THE GENERAL ASSEMBLY OF DOĞAN YAYIN HOLDİNG A.Ş. The Company’s internal audit activities for the Accounting Period 2012 are hereby presented to your scrutiny. 1. It was observed that the books, folders and records were duly kept in accordance with the nature and importance of the enterprise that book keeping was in compliance with the laws, accounting procedures and principles, the Articles of Association the provisions of the Turkish Commercial Code. 2. It was observed that the figures featuring in the Company’s financial statements are in accordance with the book records in compliance with the provisions of the Articles of Association the provisions of the Turkish Commercial Code. It was seen that the financial statements submitted to the General Assembly the Board of Directors are in compliance with the principles of the Turkish Commercial Code and in accordance with the official book records. 3. It was observed that the resolutions concerning Company Management were recorded in the resolution ledger as per applicable procedures. As a result, we hereby submit for your scrutiny the Company activities and relevant financial statements as summarized in the report issued by the Board of Directors.
SELMA UYGUÇ Auditor
YENER ŞENOK Auditor
CORPORATE GOVERNANCE
AUDIT COMMITTEE RESOLUTION
Date : April 2, 2013 Subject : Disclosure of Financial Statements for the Accounting Period January 1, 2012 – December 31, 2012 We have examined the consolidated financial report for the accounting period from January 1, 2012 to December 31, 2012, prepared pursuant to the Communiqué Serial XI, Nr. 29 issued by the Capital Markets Board (CMB) and in accordance with the International Financial Reporting Standards, presented in line with the principles set forth by the CMB, independently audited presented in comparison with the previous period we have received the opinions of the executives in charge of the preparation of the report. Within the framework of the information available to us and the data presented to us, we have shared our opinion with the executives in charge of preparing the said financial report. In our opinion, the financial report reflects the truth about the Company’s activity results, does not include any misleading deficiencies and complies with CMB’s regulations.
Hacı Ahmet KILIÇOĞLU President
Ertuğrul Feyzi TUNCER Member
92 - 93
doğan yayın holding 2012 Annual Report
CORPORATE GOVERNANCE COMMITTEE RESOLUTION
Date and Number : April 2, 2013/1 Subject : Annual Report and Corporate Governance Principles Compliance Report for the Accounting Period 01.01.2012 - 31.12.2012 We have examined the Annual Report 2012 prepared in line with the Capital Markets Board’s (CMB) Serial: XI, No: 29 “Communique on Financial Reporting in Capital Markets” and the Ministry of Customs and Trade’s “Regulation on the Determination of Minimal Content of Annual Reports” the Corporate Governance Principles Compliance Report 2012 presented in line with the principles outlined in CMB’s Weekly Bulletin dated February 1, 2013 and numbered 2013/4 (Board resolution dated February 1, 2013 and numbered 4/88) have received the executives in charge of preparing the said reports. Within the framework of the information available to us and the data presented to us, we have shared our opinion with the executives in charge of preparing the Annual Report 2012 and Corporate Governance Principles Compliance Report 2012. In our opinion, the said reports reflect the truth about the Company’s activity results, do not include any misleading deficiencies and comply with CMB’s regulations.
Ertuğrul Feyzi TUNCER President
Yahya ÜZDİYEN Member
Dr. Murat DOĞU Member
CORPORATE GOVERNANCE
Board of Directors’ Statement of Responsibility on the Approval of the Reports
RESOLUTION OF THE BOARD OF DIRECTORS ON THE APPROVAL OF FINANCIAL STATEMENTS AND ANNUAL REPORTS Date Nr.
: April 9, 2013 : 2013/11
STATEMENT OF RESPONSIBILITY PURSUANT TO THE COMMUNIQUÉ SERIAL XI, NR. 29, SECTION 3, ARTICLE 9 ISSUED BY THE CAPITAL MARKETS BOARD Having examined the consolidated financial statements, which are prepared pursuant to the legislation of the Communiqué Serial XI, Nr. 29 issued by the Capital Markets Board (CMB) and in accordance with the International Accounting Standards and the International Financial Reporting Standards, are presented in line with the principles set forth by the regulations and resolutions by the CMB, are independently audited and are presented in comparison with the previous period, for the accounting period from January 1, 2012 to December 31, 2012 and the annual report for the period from January 1, 2012 to December 31, 2012, within the framework of information available in so far as its duties and responsibilities are concerned, the Board concluded that, - The financial statement and the annual report do not contain any misrepresentation of the facts on major issues, or any omissions that may be construed as misleading as of the date of the disclosure; - The financial statements, which are prepared in accordance with the standing financial reporting standards, reflect the facts about the assets, liabilities, financial condition, profit and loss of the Company truthfully together with its consolidated subsidiaries and that the annual report reflect the progress and the performance of the business the financial condition of and the risks and uncertainties faced by the Company truthfully together with its consolidated subsidiaries.
Ahmet TOKSOY CFO
M. Muzaffer GÖĞÜŞ Financial Affairs Manager
94 - 95
doğan yayın holding 2012 Annual Report
Board of Directors’ Resolution on the Approval of Reports
Date : April 9, 2013 Nr. : 2013/11 Participants : Y. Begümhan Doğan Faralyalı (Chairperson) Soner Gedik (Vice Chairperson) Mehmet Ali Yalçındağ (Board Member) Yahya Üzdiyen (Vice Chairperson) Ertuğrul Feyzi Tuncer (Board Member) Hacı Ahmet Kılıçoğlu (Board Member) This resolution was signed by Board Members as per Turkish Commercial Code, Article 390/IV. The Board of Directors of Doğan Yayın Holding A.Ş. met on the above date and unanimously resolved: - To ratify the consolidated financial statements, which are submitted to the Board of Directors by the Audit Committee with an opinion of compliance along with amendment suggestions and which are prepared pursuant to the legislation of the Communiqué Serial XI, Nr. 29 issued by the Capital Markets Board (CMB) and in accordance with the International Accounting Standards and the International Financial Reporting Standards, are presented in line with the principles set forth in the related resolutions by the CMB, are independently audited and are presented in comparison with the previous period, for the accounting period from January 1, 2012 to December 31, 2012 to submit them for the approval of the General Assembly, - To ratify the herewith attached “Annual Report” and “Corporate Governance Compliance Report” for the year 2012, submitted to the Board of Directors with an opinion of approval of the Corporate Governance Committee and other relevant executives to submit these reports to the shareholders.
Y. Begümhan DOĞAN FARALYALI Chairperson
Soner GEDİK Vice Chairperson
Mehmet Ali YALÇINDAĞ Board Member
Yahya ÜZDİYEN Board Member
Ertuğrul Feyzi TUNCER Board Member
Hacı Ahmet KILIÇOĞLU Board Member
DIVIDEND DISTRIBUTION
dıvıdend Distribution Policy
Doğan Yayın Holding determines profit distribution proposals on the basis of the Turkish Commercial Code, the Capital Market Law, the regulations and resolutions of the Capital Markets Board (CMB), tax legislation, provisions of other relevant legislation and the Company’s Articles of Association. Accordingly; 1- In principle, a minimum of 50% of the “net distributable profit for the period”, which is calculated in accordance with the Capital Market Law and with due consideration to the financial statements compatible with the International Financial Reporting Standards (IFRS), is distributed. 2- In the event that a profit distribution between 50% and 100% of the calculated “net distributable profit for the period” is foreseen, the percentage to be distributed is decided with due consideration to the Company’s financial structure and budget. 3- The proposal for profit distribution is announced to the public with due consideration of the legal periods and in accordance with the Capital Market Legislation and the regulations and resolutions of the Capital Markets Board (CMB). 4- In the event that the “net distributable profit for the period” calculated in line with the financial statements prepared as per the Turkish Commercial Code and the tax legislation a. is lower than the amount calculated in accordance with Article 1, the net distributable profit for the period calculated according to the financial statements prepared as per Article 5 is taken into consideration and the entire amount is distributed, b. is higher than the amount calculated in accordance with Article 1, the provisions of Article 2 are applicable. 5- In the event that no net distributable profit for the period exists according to the financial statements prepared as per the Turkish Commercial Code and the tax legislation, no profit distribution is made even if a “net distributable profit for the period” has been calculated in the financial statements prepared in accordance with the Capital Market Legislation and in compliance with International Financial Reporting Standards (IFRS). 6- If the calculated “net distributable profit for the period” remains below 5% of the issued capital, profit distribution may not be performed. 7- Investments for the purpose of increasing the value of the Company, which necessitate substantial fund flows, issues that have an impact upon the Company’s financial structure, the existence of uncertainty or adverse developments in the economy or the market conditions are taken into consideration when making profit distribution.
doğan yayın holding 2012 Annual Report
dıvıdend Distribution Proposal
96 - 97
DOĞAN YAYIN HOLDİNG A.Ş. RESOLUTION OF THE BOARD OF DIRECTORS Date : April 9, 2013 Nr. : 2013/12 Participants : Yaşar Begümhan Doğan Faralyalı (Chairperson) Yahya ÜZDİYEN (Board Member) Hacı Ahmet Kılıçoğlu (Board Member) Soner Gedik (Vice Chairperson) Mehmet Ali Yalçındağ (Board Member) Ertuğrul Feyzi Tuncer (Board Member) This resolution was signed by members of the Board as per Turkish Commercial Code, Article 390/IV. In due consideration of the “profit distribution policy” disclosed to the public as per Turkish Commercial Code, Capital Markets Legislation and CMB’s regulations, Corporate Tax Code, Income Tax Code and other applicable legislation as well as the provisions of the Articles of Association, it was decided that: − According to the consolidated financial statements for the accounting period January 1, 2012 – December 31, 2012, which are prepared pursuant to the CMB’s Communiqué Serial XI, Nr. 29, in accordance with the International Accounting Standards and the International Financial Reporting Standards, presented in line with the principles set forth by the relevant resolutions by the CMB independently audited; the Company has posted “Consolidated Net Profit for the Period” TL 197,242,405.43 after the deduction of “Tax Expenditure for the Period”, “Deferred Tax Income” and “Shares from Outside the main Partnership”; and no profit will be distributed for the 2012 accounting period since the result is a “Net Loss for the Period” of TL 1,890,313,874.42 after the deduction of “Previous Years’ Losses” of TL 2,019,577,418.90- and profit from subsidiary sales of TL 67,978,860.95(75% of the total profit form subsidiary sale) calculated according to the Turkish Commercial Code / Tax Procedures Code which will be not distributed as profit for the accounting period January 1, 2012 – December 31, 2012 but rather kept in a “special fund account” for five years according to the Board of Directors resolution dated April 9, 2013 and numbered 2013/10 so as to benefit from the exemption set forth in the Corporate Tax Code Article 5-1/e in line with Tax Legislation and Capital Markets Legislation; and the shareholders will be informed of this issue at the General Assembly,
DIVIDEND DISTRIBUTION
dıvıdend Distribution Proposal
− According to the financial records kept in compliance with Turkish Commercial Code / Tax Procedures Code, the Company posted “Net Profit for the Period” of TL 87,182,592.65- for the accounting period from January 1, 2012 until December 31, after the deduction of “Losses from Previous Years” of TL 230,372,628.11- and profit from subsidiary sales of TL 67,978,860.95- (75% of the total profit form subsidiary sale) calculated according to the Turkish Commercial Code / Tax Procedures Code which will be not distributed as profit for the accounting period January 1, 2012 – December 31, 2012 but rather kept in a “special fund account” for five years according to the Board of Directors resolution dated April 9, 2013 and numbered 2013/10 so as to benefit from the exemption set forth in the Corporate Tax Code Article 5-1/e in line with Tax Legislation and Capital Markets Legislation, the result is a “Net Loss for the Period” of TL 211,168,896.41-; TL 438,707,989.85-of income exempt from tax previously kept at a “special fund account” in compliance with Corporate Tax Code for five years to benefit from tax exemption, shall be transferred to “Extraordinary Reserves” due to the completion of the five-year period; and the said TL 211,168,896.41- in “Losses from Previous Years” will be entirely included added to “Extraordinary Reserves.”
Y. Begümhan DOĞAN FARALYALI Chairperson
Soner GEDİK Vice Chairperson
Mehmet Ali YALÇINDAĞ Board Member
Yahya ÜZDİYEN Board Member
Ertuğrul Feyzi TUNCER Board Member
Hacı Ahmet KILIÇOĞLU Board Member
98 - 99
doğan yayın holding 2012 Annual Report
dıvıdend Distribution Statement
Doğan Yayın Holding A,Ş, 2012 Dividend Distribution Statement (TL thousand) Issued Capital
2,000,000
Total Legal Reserves (According to Statutory Records)
21,693
Whether there is a privilege in profit distribution granted pursuant to the Articles of Association and information thereof:
None
CMB (IFRS)
Statutory Records
Profit/Loss for the Period (-)(*)
322,372
87,183
Taxes (-/+)
-49,761
0
Non-Controlling, Minority Shares (-)
-75,369
0
Net Profit/Loss for the Period (-)
197,242
87,183
Losses from Previous Years (-)
-2,019,577
-230,373
First Legal Reserves (-)
0
0
(**)
“Profit from the Sale of Subsidiary” not to be Distributed and Transferred Temporarily -67,979 to the “Special Fund Account” (According to Statutory Records) (-)(***)
-67,979
NET DISTRIBUTABLE PROFIT/(LOSS) FOR THE PERIOD
-1,890,314
-211,169
Donations over the Year (+)
5
Net Distributable Profit/(Loss) for the Period, including Donations, as basis for calculating the First Dividend(****)
-1,890,309
First Dividend to Shareholders (20%)
0
Cash
0
Bonus
0
Total
0
Dividend to Preferred Shareholders
0
Dividend to the Board Members, Employees, et al.
0
Dividend to Redeemed Shareholders
0
Second Dividend to Shareholders
0
Second Legal Reserves
0
Statutory Reserves
0
0
Special Reserves
0
0
Extraordinary Reserves
0
0
Other Distributable Resources
0
0
Profits from the Previous Year
0
0
Extraordinary Reserves
0
0
Other Distributable Reserves Pursuant to the Law and the Articles of Association
0
0
(*)
“Net Profit for the Period from Continuing Operations”
Taxes amounting to TL 75,369 consist of “Tax Expenses for the Period” [TL (-) 80,149 thousand] and “Deferred Tax Expenses” [TL (+) 30,388 thousand].
(**)
(***) On January 16, 2012, Doğan Müzik Kitap Mağazacılık ve Pazarlama A.Ş. (“DMK”) shares were sold, leading to the accrual of a profit of TL 67,979 from sales of subsidiary shares. Of this profit, the portion (75%) subject to the exemption outlined by the Corporate Tax Code, Article 5-1/e was transferred to a special fund account under liabilities, as per Tax Legislation, Capital Markets Legislation and other applicable legislation, in the accounting period January 1, 2012 – December 31, 2012. [Board of Directors resolution dated April 9, 2013 and numbered 2013/10] (****)
There is no distributable profit for the period.
DIVIDEND DISTRIBUTION
dıvıdend Distribution Statement
DIVIDEND PER SHARE Dividend Per Share With a Nominal Value of TL 1
Group
Total Amount of Dividend (TL)
Amount (TL)
Ratio (%)
GROSS
-
0
0
0
NET
-
0
0
0
Ratio of Dividend Distributed to Net Distributable Profit for the Period Including Donations Amount of Dividend Distributed to Shareholders (TL)
Ratio of Dividend Distributed to Shareholders to Net Distributable Profit for the Period Including Donations (%)
0
0
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
DOĞAN YAYIN HOLDİNG A.Ş. CONVENIENCE TRANSLATION OF THE CONSOLIDATED FINANCIAL STATEMENTS AND THE AUDITOR’S REPORT FOR THE PERIOD 1 JANUARY – 31 DECEMBER 2012 INTO ENGLISH (ORIGINALLY ISSUED IN TURKISH)
CONVENIENCE TRANSLATION OF INDEPENDENT AUDIT REPORT INTO ENGLISH ORIGINALLY ISSUED IN TURKISH INDEPENDENT AUDIT REPORT
To the Board of Directors of Doğan Yayın Holding A.Ş. 1. We have audited the accompanying consolidated balance sheet of Doğan Yayın Holding A.Ş. (the “Company”), its subsidiaries and joint ventures (together the “Group”) as at 31 December 2012 and the related consolidated statement of income, the related consolidated statement of comprehensive income, consolidated statement of changes in shareholders’ equity and consolidated statement of cash flows for the year ended 31 December 2012, and a summary of significant accounting policies and other explanatory information. Group Managements’ Responsibility for the Financial Statements 2. The Group Management is responsible for preparation and fair presentation of these financial statements in accordance with accounting standards published by Capital Markets Board. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. Auditor’s Responsibility 3. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards published by the Capital Markets Board. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Group management’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by Group management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion 4. In our opinion, the accompanying consolidated financial statements give a true and fair view of consolidated financial position of Doğan Yayın Holding A.Ş. (the “Company”), its subsidiaries and joint ventures as at 31 December 2012, and their financial performance and cash flows for the year then ended in accordance with the financial reporting standards issued by the Capital Markets Board. Without qualifying our opinion, we draw attention to the following: 5. As explained in detail in Note 2.1.6, the Group management has decided to measure their investment properties at fair value and restated the prior year consolidated financial statements accordingly. İstanbul, 9 April 2013 DRT BAĞIMSIZ DENETİM VE SERBEST MUHASEBECİ MALİ MÜŞAVİRLİK A.Ş. Member of DELOITTE TOUCHE TOHMATSU LIMITED
Zere Gaye Şentürk Partner
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 CONTENTS PAGE CONSOLIDATED BALANCE SHEETS
104-105
CONSOLIDATED STATEMENTS OF INCOME
106
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
107
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
108-109
CONSOLIDATED STATEMENTS OF CASH FLOWS
110-111
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 NOTE 2 NOTE 3 NOTE 4 NOTE 5 NOTE 6 NOTE 7 NOTE 8 NOTE 9 NOTE 10 NOTE 11 NOTE 12 NOTE 13 NOTE 14 NOTE 15 NOTE 16 NOTE 17 NOTE 18 NOTE 19 NOTE 20 NOTE 21 NOTE 22 NOTE 23 NOTE 24 NOTE 25 NOTE 26 NOTE 27 NOTE 28 NOTE 29 NOTE 30 NOTE 31 NOTE 32 NOTE 33 NOTE 34 NOTE 35 NOTE 36 NOTE 37
ORGANIZATION AND NATURE OF OPERATIONS BASIS OF PRESENTATION OF FINANCIAL STATEMENTS BUSINESS COMBINATIONS JOINT VENTURES SEGMENT REPORTING CASH AND CASH EQUIVALENTS FINANCIAL INVESTMENTS FINANCIAL BORROWINGS OTHER FINANCIAL LIABILITIES TRADE RECEIVABLES AND PAYABLES OTHER RECEIVABLES AND PAYABLES INVENTORIES INVESTMENTS ACCOUNTED FOR BY USING THE EQUITY METHOD DERIVATIVE FINANCIAL INSTRUMENTS INVESTMENT PROPERTY PROPERTY, PLANT AND EQUIPMENT INTANGIBLE ASSETS GOODWILL GOVERNMENT GRANTS PROVISIONS, CONTINGENT ASSETS AND LIABILITIES COMMITMENTS PROVISION FOR EMPLOYMENT BENEFITS OTHER ASSETS AND LIABILITIES EQUITY SALES AND COST OF SALES MARKETING, SALES AND DISTRIBUTION AND GENERAL ADMINISTRATIVE EXPENSES EXPENSES BY NATURE OTHER OPERATING INCOME/ EXPENSES FINANCIAL INCOME FINANCIAL EXPENSES ASSETS CLASSIFIED AS HELD FOR SALE AND DISCONTINUED OPERATIONS CURRENT AND DEFERRED TAXES EARNING/ LOSS PER SHARE RELATED PARTY DISCLOSURES FINANCIAL RISK MANAGEMENT FINANCIAL INSTRUMENTS SUBSEQUENT EVENTS
113-236
.
113-116 117-147 148 149-150 151-157 158 159 159-164 164 164-165 166-167 167 168 169 170-171 172-173 174-176 176-177 178 178-184 185-186 187-188 188-189 190 -192 193-195 196 197 197-198 199 199 200-209 210-216 217 218-221 221-232 232-234 235
DOĞAN YAYIN HOLDİNG A.Ş.
CONSOLIDATED BALANCE SHEETS AT 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated.)
Audited 31 December 2012
Restated Audited 31 December 2011
Restated Audited 31 December 2010
1.800.350
2.250.343
1.284.291
6 7
488.233 -
1.061.644 102.915
240.359 99.078
34 10 11 12 14 23
14.757 664.684 418.728 114.383 573 98.992
10.555 628.750 34.618 172.113 159.061
16.185 611.058 626 138.414 178.571
1.800.350
2.169.656
1.284.291
-
80.687
-
2.136.833
2.440.943
2.623.293
97.163 1.495 74.034 520.315 627.309 574.203 87.541 154.773
399.322 595 7.709 57.227 536.698 638.500 595.197 58.891 146.804
1.705 551 8.665 52.976 605.193 788.270 951.899 75.222 138.812
3.937.183
4.691.286
3.907.584
Note References
ASSETS Current assets Cash and cash equivalents Financial investments Trade receivables - Due from related parties - Other trade receivables Other receivables Inventories Derivative financial instruments Other current assets Sub-total Non-current assets held for sale
31
Non-current assets Other receivables Financial investments Investments accounted for by using the equity method Investment property Property, plant and equipment Intangible assets Goodwill Deferred tax asset Other non-current assets Total assets
11 7 13 15 16 17 18 32 23
These consolidated financial statements as of and for the period ended 31 December 2012 has been approved by the Board of Directors on 9 April 2013. Ahmet Toksoy Member of the Executive Board
The accompanying notes form an integral part of these consolidated financial statements.
Muzaffer Göğüş Finance Manager
104 - 105
DOĞAN YAYIN HOLDİNG ANNUAL REPORT 2012
DOĞAN YAYIN HOLDİNG A.Ş.
CONSOLIDATED BALANCE SHEETS AT 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated.)
Audited 31 December 2012
Restated Audited 31 December 2011
Restated Audited 31 December 2010
1.698.037
1.836.145
1.555.024
8
1.240.732
782.056
882.596
34 10 9
5.546 257.628 18.207
1.147 386.632 66.438
20.186 345.231 52.481
34 11 32 14 20 23
66.533 7.527 1.375 26.651 73.838
97.435 69.203 32.931 3.429 41.412 355.462
63.209 14.981 8.808 81.242 86.290
818.679
1.775.731
1.082.393
585.793 13.510 81.978 12.364 125.034
1.133.036 60.377 42.541 405.575 134.202
858.752 54.817 42.135 126.689
1.420.467
1.079.410
1.270.167
Note References
LIABILITIES Current liabilities Financial borrowings Trade payables - Due to related parties - Other trade payables Other financial liabilities Other payables - Due to related parties - Other payables Income tax payable Derivative financial liabilities Provisions Other current liabilities Non-current liabilities Financial borrowings Other payables Provision for employment benefits Other non-current liabilities Deferred tax liability
8 11 22 23 32
EQUITY Equity attributable to equity holders of the Parent Company
24
932.238
652.928
801.387
Issued capital Adjustment to issued capital Share premium Translation reserves Restricted reserves Gains on revaluation of investment property Accumulated losses Net income/ (loss) for the period
24
2.000.000 95.781 163.115 41.795 460.401 1.334 (2.027.430) 197.242
2.000.000 95.781 163.115 43.081 460.401 (915.177) (1.194.273)
1.000.000 95.781 162.958 (2.475) 459.192 (688.458) (225.611)
488.229
426.482
468.780
3.937.183
4.691.286
3.907.584
24
Non-controlling interests Total liabilities Commitments
21
The accompanying notes form an integral part of these consolidated financial statements.
DOĞAN YAYIN HOLDİNG A.Ş.
CONSOLIDATED STATEMENTS OF INCOME FOR THE PERIODS ENDED 1 JANUARY-31 DECEMBER 2012 AND 2011 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated.)
Note References
Audited 1 January31 December 2012
Restated Audited 1 January31 December 2011
2.525.589 (1.755.657)
2.337.820 (1.648.774)
769.932
689.046
(290.442) (327.955) 285.325 (115.989)
(283.676) (321.495) 66.384 (1.154.300)
320.871
(1.004.041)
(955) 252.614 (250.158)
(565) 259.253 (558.554)
322.372
(1.303.907)
(80.149) 30.388
(72.874) (18.775)
272.611
(1.395.556)
-
134.954
272.611
(1.260.602)
75.369 197.242
(66.329) (1.194.273)
9,86
(68,86)
Continued operations Sales Cost of sales (-)
25 25
Gross profit Marketing, sales and distribution expenses (-) General administrative expenses (-) Other operating income Other operating expenses (-)
26 26 28 28
Operating profit/ (loss)
Share of loss on investments accounted for by using the equity method Financial income Financial expenses (-)
29 30
Profit/ (loss) before income taxes Tax (expense)/income Current income tax expense Deferred tax income/ (expense)
32 32
Profit/ (loss) for the period from continued operations Discontinued operations Net income for the period from discontinued operations after income taxes
31
Net profit/ (loss) for the period Allocation of net profit/ (loss) for the period: Attributable to non-controlling interests Attributable to equity holders of the Parent Company Earning/ (loss) per share attributable to equity holders of the Parent Company (Kr)
33
The accompanying notes form an integral part of these consolidated financial statements.
106 - 107
DOĞAN YAYIN HOLDİNG ANNUAL REPORT 2012
DOĞAN YAYIN HOLDİNG A.Ş.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE PERIODS ENDED 1 JANUARY-31 DECEMBER 2012 AND 2011 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated.)
Audited 1 January31 December 2012
Restated Audited 1 January31 December 2011
Net profit/ (loss) for the period
272.611
(1.260.602)
Other comprehensive income/(expense): Investment property revaluation reserves Deferred tax effect of gains on revaluation of investment property Actuarial losses in defined benefit plans Deferred tax effect of actuarial losses in defined benefit plans Change in translation reserves
1.504 (75) (37.918) 7.584 (1.410)
84.046
Total comprehensive income/(expense)
242.296
(1.176.556)
68.594 173.702
(27.839) (1.148.717)
Note References
Allocation of total comprehensive income/(expense) for the period: Attributable to non-controlling interests Attributable to equity holders of the Parent Company
The accompanying notes form an integral part of these consolidated financial statements.
Balances at 31 December 2011
Balances at 1 January 2011 (previously reported) Effect of changes in accounting policy (Note 2.1.6) Balances at 1 January 2011 (restated) Transfer from retained earnings Capital increase Option adjustment for non-controlling interest Subsidiary dividend payment Inflation accounting effect Transfer to reserves Other (1) Total comprehensive loss - Translation reserves - Net loss for the period 2.000.000
1.000.000 1.000.000 1.000.000 -
Issued Capital
95.781
95.781 95.781 -
Adjustments to share capital
163.115
162.958 162.958 157 43.081
(2.475) (2.475) 45.556 45.556 -
Currency Share translation Premium differences
460.401
459.192 459.192 1.209 -
Net profit/ (loss) for the period
(915.177) (1.194.273)
(688.458) (236.637) 11.026 (688.458) (225.611) (225.611) 225.611 101 (1.209) - (1.194.273) - (1.194.273)
Retained earnings/ Restricted (accumulated reserves losses)
The accompanying notes form an integral part of these consolidated financial statements.
24
24
24
24
Note References
(Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated.)
652.928
790.361 11.026 801.387 1.000.157 101 (1.148.717) 45.556 (1.194.273)
Total Equity
426.482
1.079.410
464.422 1.254.783 4.358 15.384 468.780 1.270.167 1.548 1.001.705 567 567 (17.054) (17.054) 112 213 368 368 (27.839) (1.176.556) 38.490 84.046 (66.329) (1.260.602)
Equity attributable to equity holders of Nonthe Parent controlling Company interests
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY FOR THE PERIODS ENDED 1 JANUARY-31 DECEMBER 2012 AND 2011
DOĞAN YAYIN HOLDİNG A.Ş.
Balances at 1 January 2012 (previously reported)
24
- Total comprehensive income
(1)
2.000.000
95.781
-
-
-
-
-
-
-
-
-
1.334
-
-
1.334
-
1.334
-
-
-
-
-
-
-
-
-
-
-
-
163.115
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
163.115
-
163.115
41.795
-
-
-
(1.286)
(1.286)
-
-
-
-
-
-
-
-
-
-
43.081
-
43.081
460.401
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
460.401
-
460.401
The accompanying notes form an integral part of these consolidated financial statements.
(2.027.430)
-
(23.588)
-
-
(23.588)
-
-
4.363
(624)
(882)
107.990
(28.609)
-
23.370
(1.194.273)
(915.177)
11.026
(926.203)
Retained Currency earnings/ Share translation Restricted (accumulated premium differences reserves losses)
Represents fair value changes of put option liabilities and acquisition and disposal of shares from non-controlling shareholders and disposal of subsidiary.
Balances at 31 December 2012
-
-
Other (1)
- Net profit for the period
-
Dividend payments of subsidiaries to non-group companies
-
-
Share transfer of investments accounted for the equity method
- Actuarial losses in defined benefit plans
-
-
Purchase of shares of entities under common control
-
-
Purchase of shares of subsidiaries from non-controlling interests
-
-
-
Share transfer of entities under common control (Note 31)
- Translation reserves
-
-
Purchase of subsidiary shares (Note 20)
- Investment property revaluation reserves (Note 15)
-
-
Non-group capital increase of subsidiaries
-
-
Option adjustment for non-controlling interest (Note 20) -
-
-
-
95.781
Transfer from retained earnings
-
2.000.000 95.781
24
24 2.000.000
Balances at 1 January 2012 (restated)
Effect of changes in accounting policy (Note 2.1.6)
Note References
Investment Adjustments property Issued to share revaluation capital capital reserves
(Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated.)
197.242
197.242
-
-
-
197.242
-
-
-
-
-
-
-
-
-
1.194.273
(1.194.273)
1.443
(1.195.716)
Net profit/ (loss) for the period
932.238
197.242
(23.588)
1.334
(1.286)
173.702
-
-
4.363
(624)
(882)
107.990
(28.609)
-
23.370
-
652.928
12.469
640.459
488.229
75.369
(6.746)
95
(124)
68.594
690
(10.628)
-
-
-
-
(21.717)
1.042
23.766
-
426.482
5.211
421.271
Equity attributable to equity holders Nonof the Parent controlling Company interests
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY FOR THE PERIODS ENDED 1 JANUARY-31 DECEMBER 2012 AND 2011
DOĞAN YAYIN HOLDİNG A.Ş.
1.420.467
272.611
(30.334)
1.429
(1.410)
242.296
690
(10.628)
4.363
(624)
(882)
107.990
(50.326)
1.042
47.136
-
1.079.410
17.680
1.061.730
Total Equity
DOĞAN YAYIN HOLDİNG ANNUAL REPORT 2012
108 - 109
DOĞAN YAYIN HOLDİNG A.Ş.
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE PERIODS ENDED 1 JANUARY – 31 DECEMBER 2012 AND 2011 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated.)
Audited 1 January 31 December 2012
Restated Audited 1 January 31 December 2011
322.372 -
(1.303.907) 161.411
15,16,17 30 30 30 18 10 10 23 22
180.502 87.730 20.115 16.246 21.278 38.180 (86) 13.069
206.854 114.411 39.967 20.819 103.895 38.458 (2.734) 273 20.430
16,17 15 28
1.868 634 (163.908) 2.287 955 (56.331) (50.492) (81.032) 3.590 (2.995) (2.627) 8.914 (45.767) (22.130) 12.460 (1.986) (2.436) 300.410
44.633 603 5.878 (24.909) 565 (51.342) (57.161) 4.923 77.142 841.489 327.382 674 (2.504) (4.977) (5.379) 15.987 1.751 (7.710) 4.913 (8.012) (245.849) 317.974
Note References Profit/(loss) before income taxes from continued operations Loss before income taxes from discontinued operations Adjustments: Depreciation and amortization Interest expense Finance expense for tax liability in dispute and tax base increase regarding 6111 law Unearned finance income due to sales with maturity and credit finance expense Impairment on goodwill Provision for doubtful receivables Reversal of provision for doubtful receivables Provision for other doubtful receivables (net) Provision for employment termination benefits Provision for impairment of property, plant and equipment, intangible assets and programme stocks Fair value difference of investment property (Gain)/loss on sale of property, plant and equipment (net) Currency translation differences Share of loss of investments accounted for by using the equity method Interest income Unearned finance expense due to purchases with maturity and credit finance income Competition authority penalty Tax base increase liability regarding 6111 law Tax liability in dispute Unrealized foreign exchange (income)/expense due to financial borrowings Provision for impairment on inventories Reversal of provision for impairment on inventories Reversal of provision for tax penalty Fair value changes of derivative transactions Provision for unused vacation Annulment indemnity of put option agreement of Turner Provision for withholding tax Reversal of provision for withholding tax Provision for lawsuits Reversal of provision for lawsuits Gain on sale of subsidiary shares
13 29 29 28 28 28 12 12 28 23 28 20 20 20 20 28,31
The accompanying notes form an integral part of these consolidated financial statements.
110 - 111
DOĞAN YAYIN HOLDİNG ANNUAL REPORT 2012
DOĞAN YAYIN HOLDİNG A.Ş.
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE PERIODS ENDED 1 JANUARY – 31 DECEMBER 2012 AND 2011 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated.)
Note References
Audited 1 January31 December 2012
Restated Audited 1 January31 December 2011
102.915 (91.270) 14.226 6.083 (21.250) (63.378) 325 128.024 (11.550) (104.655) (6.545) (3.430) (623.785) (22.182) (396.062)
(3.837) (106.150) 15.834 (33.516) (64.184) 37.367 58.281 (8.208) (73.104) (9.233) (4.601) (213.004) (54.040) (21.194) (161.615)
(279.935)
(237.016)
192.146 (1.955) 98.600 (51.208) (42.352)
27.178 347 679 12.141 293.594 96.923
Change in assets and liabilities: Decrease/(increase) in financial investments Increase in trade receivables and due from related parties Collections from doubtful receivables Decrease/(increase) in inventories Increase in other current and non-current assets Decrease/(increase) in trade payables and due to related parties Increase in provisions Increase in other current and non-current liabilities Employment termination benefits paid Tax paid Unused vacation liability paid Provision for lawsuits paid Tax liability in dispute paid regarding 6111 law Tax base increase paid regarding 6111 law Provision for tax penalty paid Net cash used in operating activities:
10
22 23 20
20
Investing activities: Acquisition of property, plant and equipment and intangible assets Proceeds from sale of property, plant and equipment and intangible assets and asset held for sale Change in long-term financial assets Effect of change in non-controlling interest shares (Decrease)/increase in other financial liabilities Cash provided from sale of subsidiary Purchase of shares in subsidiary Net cash (used in)/provided from investing activities
15,16,17
31
The accompanying notes form an integral part of these consolidated financial statements.
DOĞAN YAYIN HOLDİNG A.Ş.
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE PERIODS ENDED 1 JANUARY – 31 DECEMBER 2012 AND 2011 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated.)
Note References
Audited 1 January31 December 2012
Restated Audited 1 January31 December 2011
(19.305) 89.135 (115.494) 1.042 (10.628) (97.435) (152.685) (591.099) 1.060.369 469.270
(132.456) 107.778 (172.156) 1.000.157 1.548 (17.054) 97.435 885.252 820.560 239.809 1.060.369
Financing activities: Decrease in financial borrowings (net) Interest received Interest paid Capital increase Capital increase in non-controlling interests Dividends paid to non-controlling interests (Decrease)/increase in other payables to related parties Net cash (used in)/ provided from financing activities Net (decrease)/increase in cash and cash equivalents Cash and cash equivalents at the beginning of the period Cash and cash equivalents at the end of the period
34
6 6
The accompanying notes form an integral part of these consolidated financial statements.
112 - 113
DOĞAN YAYIN HOLDİNG ANNUAL REPORT 2012
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 1-ORGANIZATION AND NATURE OF OPERATIONS Doğan Yayın Holding A.Ş. (“Doğan Yayın Holding” or the “Group”) was established in 1980 under the registered name of Miltaş Milliyet Basım Malzemeleri İthalat ve Ticaret A.Ş., which was subsequently changed to Milliyet Yayın A.Ş. in 1981. It was renamed Doğan Yayın Holding A.Ş. in November 1994. Doğan Yayın Holding operates in the media sector and has shareholdings in companies operating in newspaper and magazine printing, publishing, distribution and production of classified advertisement, internet publishing and television and radio broadcasting. Doğan Yayın Holding has also shareholdings in retail, book publishing, distribution, foreign trade and internet and telecommunication service companies. Doğan Yayın Holding has been established under Doğan Şirketler Grubu Holding A.Ş. (“Doğan Holding”) and its ultimate shareholder is Aydın Doğan and Doğan Family (Işıl Doğan, Arzuhan Yalçındağ, Vuslat Sabancı, Hanzade V. Doğan Boyner ve Y.Begümhan Doğan Faralyalı). Doğan Yayın Holding is registered in Turkey and its registered office address is as follows: Burhaniye Mahallesi Kısıklı Caddesi No: 65 Üsküdar/İstanbul Doğan Yayın Holding is registered with the Capital Markets Board (“CMB”) and its shares are quoted on Borsa İstanbul (“Borsa İstanbul”) since 6 August 1998. At 31 December 2012, 41,11% (31 December 2011: 34,01%) of Doğan Yayın Holding’s shares (“publicly available”) are listed on the ISE. In accordance with the Capital Markets Board’s (the “CMB”) Resolution No: 21/655 issued on 23 July 2010, it is regarded that 20,95% of the shares (31 December 2011: 20,57%) are outstanding as of 31 December 2012 based on the Central Registry Agency A.Ş.’s (“CRA”) records (Note 24). Subsidiaries Subsidiaries of Doğan Yayın Holding, registered countries and nature of their businesses together with business and geographic segments are as follows: Subsidiaries operating in the publishing segment are summarized as below:
Subsidiaries Hürriyet Gazetecilik ve Matbaacılık A.Ş. (“Hürriyet”) Hürriyet Medya Basım Hizmetleri ve Ticaret A.Ş. (“Hürriyet Medya Basım”) Doğan Ofset Yayıncılık ve Matbaacılık A.Ş. (“Doğan Ofset”) Posta Haber Ajansı A.Ş. (“Posta Haber”) Doğan Gazetecilik A.Ş. (“Doğan Gazetecilik”) Doğan Dağıtım Satış Pazarlama Matbaacılık Ödeme Aracılık ve Tahsilat Sistemleri A.Ş. (“Doğan Dağıtım”) Doğan Dış Ticaret ve Mümessillik A.Ş. (“Doğan Dış Ticaret”) Doğan Haber Ajansı A.Ş. (“Doğan Haber”) Doğan Gazetecilik İnternet Hizmetleri ve Ticaret A.Ş. (“Doğan Gazetecilik İnternet”) Yenibiriş İnsan Kaynakları Hizmetleri Danışmanlık ve Yayıncılık A.Ş. (“Yenibir”) Hürriyet Zweigniederlassung GmbH (“Hürriyet Zweigniederlassung”) Milliyet Verlags und Handels GmbH (“Milliyet Verlags”) Doğan Media International GmbH (“DMI”) Hürriyet Invest B.V. (“Hürriyet Invest”)
Registered country
Geographic segment
Nature of business
Business segment
Turkey
Turkey
Publishing
Turkey
Turkey
Turkey Turkey Turkey
Turkey Turkey Turkey
Newspaper publishing Printing and administrative services Magazine and book publishing News agency Newspaper publishing
Turkey Turkey Turkey
Turkey Turkey Turkey
Distribution Import and export News agency
Publishing Publishing Publishing
Turkey
Turkey
Internet services
Publishing
Turkey Germany Germany Germany Netherlands
Turkey Europe Europe Europe Europe
Internet services Newspaper printing Newspaper publishing Newspaper publishing Investment
Publishing Publishing Publishing Publishing Publishing
Publishing Publishing Publishing Publishing
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 1-ORGANIZATION AND NATURE OF OPERATIONS (Continued) Registered country
Geographic segment
Nature of business
Business segment
Fairworld International Limited (“Fairworld”) United Kingdom Falcon Purchasing Services Ltd. (“Falcon”) United Kingdom Trader Media East Ltd. (“TME”) Jersey Oglasnik d.o.o. Croatia TCM Adria d.o.o. Croatia Hungary Expressz Magyarorszag Media Kft.(1) Mirabridge International B.V. Netherlands Publishing International Holding B.V. Netherlands Pronto Invest B.V. Netherlands Moje Delo spletni marketing d.o.o Slovenia Bolji Posao d.o.o. Serbia Serbia Bolji Posao d.o.o. Bosnia Bosnia-Herzegovina OOO RUKOM Russia OOO Pronto Aktobe Kazakhstan OOO Pronto Neva Russia OOO Novoprint Russia OOO Delta-M Russia OOO Pronto Baikal Russia Job.ru LLC Russia OOO Pronto DV Russia OOO Pronto Ivanovo Russia OOO Pronto Kaliningrad Russia OOO Pronto Kazan Russia OOO Pronto Krasnodar Russia OOO Pronto Krasnoyarsk Russia OOO Pronto Nizhny Novgorod Russia OOO Pronto Novosibirsk Russia OOO Pronto Oka Russia OOO Pronto Samara Russia OOO Pronto Stavropol Russia OOO Pronto UlanUde Russia OOO Pronto Vladivostok Russia OOO Pronto Moscow Russia OOO Tambukan Russia OOO Utro Peterburga Russia OOO Pronto Astrakhan Russia OOO Pronto Kemerovo Russia OOO Pronto Smolensk Russia OOO Pronto Tula Russia OOO Pronto Voronezh Russia OOO Tambov-Info Russia OOO Pronto Obninsk Russia OOO Pronto Pskov Russia OOO SP Belpronto Belarus OOO Pronto Rostov Russia ZAO Pronto Akzhol Kazakhstan TOO Pronto Akmola Kazakhstan OOO Pronto Atyrau Kazakhstan Sklad Dela Prekmurje NGO Slovenia OOO Pronto Aktau Kazakhstan SP Pronto Kiev Ukraine OOO Rosprint Samara Russia OOO Partner-Soft Russia Pronto Soft Belarus TOV E-Prostir Ukraine Impress Media Marketing LLC Russia OOO Rektcentr Russia ZAO NPK Russia Pronto Ust Kamenogorsk Kazakhstan Publishing House Pennsylvania Inc. USA Nartek Bilişim Turizm ve Pazarlama Hizmetleri Ticaret A.Ş. (“Nartek”) Turkey
Europe Europe Europe Europe Europe Europe Europe Europe Europe Europe Europe Europe Russia and EE Russia and EE Russia and EE Russia and EE Russia and EE Russia and EE Russia and EE Russia and EE Russia and EE Russia and EE Russia and EE Russia and EE Russia and EE Russia and EE Russia and EE Russia and EE Russia and EE Russia and EE Russia and EE Russia and EE Russia and EE Russia and EE Russia and EE Russia and EE Russia and EE Russia and EE Russia and EE Russia and EE Russia and EE Russia and EE Russia and EE Russia and EE Russia and EE Russia and EE Russia and EE Russia and EE Europe Russia and EE Russia and EE Russia and EE Russia and EE Russia and EE Russia and EE Russia and EE Russia and EE Russia and EE Russia and EE Russia and EE Turkey
Foreign trade Foreign trade Investment Newspaper and internet publishing Investment Newspaper and internet publishing Investment Investment Investment Internet publishing Internet publishing Internet publishing Internet publishing Newspaper and internet publishing Newspaper and internet publishing Newspaper and internet publishing Newspaper and internet publishing Newspaper and internet publishing Internet publishing Newspaper and internet publishing Newspaper and internet publishing Newspaper and internet publishing Newspaper and internet publishing Newspaper and internet publishing Newspaper and internet publishing Newspaper and internet publishing Newspaper and internet publishing Newspaper and internet publishing Newspaper and internet publishing Newspaper and internet publishing Newspaper and internet publishing Newspaper and internet publishing Newspaper and internet publishing Newspaper and internet publishing Newspaper and internet publishing Newspaper and internet publishing Newspaper and internet publishing Newspaper and internet publishing Newspaper and internet publishing Newspaper and internet publishing Newspaper and internet publishing Internet publishing Newspaper and internet publishing Newspaper and internet publishing Newspaper and internet publishing Newspaper and internet publishing Newspaper and internet publishing Newspaper and internet publishing Internet publishing Newspaper and internet publishing Newspaper and internet publishing Printing Internet publishing Internet publishing Internet publishing Publishing Investment Call centre Newspaper publishing Investment Internet publishing
Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing Publishing
Subsidiaries
114 - 115
DOĞAN YAYIN HOLDİNG ANNUAL REPORT 2012
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 1-ORGANIZATION AND NATURE OF OPERATIONS (Continued) Subsidiaries operating in the broadcasting segment are summarized as below:
Subsidiaries
Registered country
Doğan TV Holding A.Ş. (“Doğan TV Holding”) Turkey DTV Haber ve Görsel Yayıncılık A.Ş. (“Kanal D”) Turkey Kanal D Yapımcılık Reklamcılık ve Dağıtım A.Ş. (“Kanal D Yapımcılık”) Turkey Mozaik İletişim Hizmetleri A.Ş. (“Mozaik” or “D-smart”) Turkey Doruk Televizyon ve Radyo Yayıncılık A.Ş. (“Doruk Televizyon” or “CNN Türk”) Turkey Doğan TV Digital Platform İşletmeciliği A.Ş. (“Doğan TV Dijital”) Turkey Alp Görsel İletişim Hizmetleri A.Ş. (“Alp Görsel”) Turkey Fun Televizyon Yapımcılık Sanayi ve Ticaret A.Ş. (“Fun TV”) Turkey Tempo Televizyon Yayıncılık Yapımcılık Sanayi ve Ticaret A.Ş. (“Tempo TV”) Turkey Kanalspor Televizyon ve Radyo Yayıncılık A.Ş. (“Kanalspor”) Turkey Milenyum Televizyon Yayıncılık ve Yapımcılık A.Ş. (“Milenyum TV”) Turkey TV 2000 Televizyon Yayıncılık Yapımcılık Sanayi ve Ticaret A.Ş. (“TV 2000”) Turkey Popüler Televizyon ve Radyo Yayıncılık A.Ş. (“Popüler TV”) Turkey D Yapım Reklamcılık ve Dağıtım A.Ş. (“D Yapım Reklamcılık”) Turkey Bravo Televizyon Yayıncılık Yapımcılık Sanayi ve Ticaret A.Ş. (“Bravo TV”) Turkey Doğa Televizyon ve Radyo Yayıncılık A.Ş. (“Doğa TV”) Turkey Altın Kanal Televizyon ve Radyo Yayıncılık A.Ş. (“Altın Kanal”) Turkey Stil Televizyon ve Radyo Yayıncılık A.Ş. (“Stil TV”) Turkey Selenit Televizyon ve Radyo Yayıncılık A.Ş. (“Selenit TV”) Turkey Trend Televizyon ve Radyo Yayıncılık A.Ş. (“Trend TV or D Çocuk”) Turkey Ekinoks Televizyon ve Radyo Yayıncılık A.Ş. (“Ekinoks TV”) Turkey Fleks Televizyon ve Radyo Yayıncılık A.Ş. (“Fleks TV”) Turkey Kutup Televizyon ve Radyo Yayıncılık A.Ş. (“Kutup TV”) Turkey Galaksi Radyo ve Televizyon Yayıncılık Yapımcılık Sanayi ve Ticaret A.Ş. (“Galaksi TV”) Turkey Koloni Televizyon ve Radyo Yayıncılık A.Ş. (“Koloni TV”) Turkey Atılgan Televizyon ve Radyo Yayıncılık A.Ş. (“Atılgan TV”) Turkey Yörünge Televizyon ve Radyo Yayıncılık A.Ş. (“Yörünge TV”) Turkey Tematik Televizyon ve Radyo Yayıncılık A.Ş. (“Tematik TV”) Turkey Turkey Süper Kanal Televizyon ve Radyo Yayıncılık A.Ş. (“Süperkanal”) (2) Uydu İletişim Basın Yayın A.Ş. (“Uydu”) Turkey Denizatı İletişim Hizmetleri A.Ş (“Denizatı”) Turkey Protema Yapım Reklamcılık ve Dağıtım A.Ş in liquidation process (“Protema”) Turkey NetD Dijital Yayıncılık Ticaret A.Ş. (“NetD Dijital Yayıncılık”) Turkey Doğan Uydu Haberleşme Hizmetleri ve Telekomünikasyon Ticaret A.Ş. (“Doğan Uydu Haberleşme”) Turkey Doğan Teleshopping Pazarlama ve Ticaret A.Ş. (“Doğan Teleshopping or Her Eve Lazım”) Turkey Rapsodi Radyo ve Televizyon Yayıncılık A.Ş. (“Rapsodi Radyo”) Turkey Doğan Müzik Yapım ve Ticaret A.Ş. (“DMC”) Turkey İnteraktif Medya Hizmetleri Geliştirme Pazarlama ve Ticaret A.Ş. (“İnteraktif Medya”) Turkey Primeturk GmbH (“Primeturk”) Germany Osmose Media S.A (“Osmose Media”) Luxembourg Doğan Media International S.A. (“Kanal D Romanya”) Romania Eko TV Televizyon Yayıncılık A.Ş. (“TNT or Eko TV”) Turkey
Geographic segment
Nature of business
Business segment
Turkey TV broadcasting Turkey TV broadcasting Turkey TV broadcasting Turkey TV broadcasting Turkey TV broadcasting Turkey TV broadcasting Turkey TV broadcasting Turkey TV broadcasting Turkey TV broadcasting Turkey TV broadcasting Turkey TV broadcasting Turkey TV broadcasting Turkey Radio broadcasting Turkey TV broadcasting Turkey TV broadcasting Turkey TV broadcasting Turkey TV broadcasting Turkey TV broadcasting Turkey TV broadcasting Turkey TV broadcasting Turkey TV broadcasting Turkey TV broadcasting Turkey TV broadcasting Turkey TV broadcasting Turkey TV broadcasting Turkey TV broadcasting Turkey TV broadcasting Turkey TV broadcasting Turkey TV broadcasting Turkey TV broadcasting Turkey TV broadcasting Turkey TV broadcasting Turkey TV broadcasting Turkey TV broadcasting Turkey TV broadcasting Turkey Radio broadcasting Music and Turkey entertainment Turkey Interactive services Europe Marketing Europe Marketing Europe TV broadcasting Turkey TV broadcasting
Broadcasting Broadcasting Broadcasting Broadcasting Broadcasting Broadcasting Broadcasting Broadcasting Broadcasting Broadcasting Broadcasting Broadcasting Broadcasting Broadcasting Broadcasting Broadcasting Broadcasting Broadcasting Broadcasting Broadcasting Broadcasting Broadcasting Broadcasting Broadcasting Broadcasting Broadcasting Broadcasting Broadcasting Broadcasting Broadcasting Broadcasting Broadcasting Broadcasting Broadcasting Broadcasting Broadcasting Broadcasting Broadcasting Broadcasting Broadcasting Broadcasting Broadcasting
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 1-ORGANIZATION AND NATURE OF OPERATIONS (Continued) Subsidiaries operating in the retail and other segments are summarized as below:
Subsidiaries Doğan Dağıtım Satış Pazarlama Matbaacılık Ödeme Aracılık ve Tahsilat Sistemleri A.Ş. (“Doğan Dağıtım”) (3) Doğan Faktoring A.Ş. (“Doğan Faktoring”) (4) Doğan Platform Yatırımları A.Ş. (“Doğan Platform”)
Registered country
Geographic segment
Nature of business
Business segment
Turkey Turkey Turkey
Turkey Turkey Turkey
Distribution Factoring Investment
Other Other Other
The related subsidiary changed its commercial title as of 30 June 2012. The related subsidiary changed its commercial title as of 25 September 2012. (3) In 16 January 2012, as a result of shares of Doğan Müzik Kitap Mağazacılık ve Pazarlama A.Ş (“DMK”) being sold to Doğan Holding, retail segment is decided not to be managed as a separate reporting segment within Doğan Yayın Holding. Until 31 December 2011, Doğan Dağıtım’s operations were reported in publishing and retail segments; whereas in the consolidated financial statements prepared as of 31 December 2012, retail operations of Doğan Dağıtım are reported in other segment. (4) Related subsidiary has changed its commercial title as of 11 May, 2012. (1)
(2)
Doğan Yayın Holding’s separate financial statements are included in the “Other” business segment for the purpose of business segment reporting in these consolidated financial statements (Note 5). NOTE 2-BASIS OF PRESENTATION OF FINANCIAL STATEMENTS 2.1 Basis of Presentation 2.1.1 Financial Reporting Standards The Capital Markets Board of Turkey (“CMB”) sets out principles and procedures on the preparation, presentation and disclosure of financial statements prepared by companies in accordance with the Communiqué No: XI-29, “Principles of Financial Reporting in Capital Markets” (“the Communiqué”). This Communiqué is effective for the annual periods beginning from 1 January 2008 and supersedes the Communiqué No: XI–25 “The Financial Reporting Standards of the Capital Markets”. The Communiqué requires companies to prepare their financial statements in accordance with International Financial Reporting Standards (“IASs/IFRSs”) adopted by the European Union. However, IASs/IFRSs will be in effect for the period in which the differences derived from the standards accepted by the European Union and the standards issued by International Accounting Standards Board (“IASB”) would be announced by Turkish Accounting Standards Board (“TASB”). Accordingly, Turkish Accounting/ Financial Reporting Standards (“TAS”/”TFRS”) previously issued by the relevant local regulatory authority, which do not contradict to the standards adopted, shall be applied. Upon the CMB’s resolution made on 17 March 2005, companies operating in Turkey and preparing their financial statements in accordance with the CMB’s Financial Reporting Standards are not required to apply inflation accounting beginning from 1 January 2005. Accordingly, IAS 29 “Financial Reporting in Hyperinflationary Economies” (“IAS 29”) issued by IASB is not applied in accompanying consolidated financial statements for the accounting periods starting 1 January 2005.
DOĞAN YAYIN HOLDİNG ANNUAL REPORT 2012
116 - 117
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 2-BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued) 2.1 Basis of Presentation (Continued) 2.1.1 Financial Reporting Standards (Continued) As of the preparation date of these financial statements, because differences derived from the standards accepted by the European Union and the standards issued by International Accounting Standards Board (“IASB”) have not been announced yet by the relevant local regulatory authority in Turkey, the consolidated financial statements are prepared in accordance with the CMB’s Financial Reporting Standards based on the CMB’s Communiqué Serial No: XI, No: 29 and its explanatory statements as the differences of IAS/IFRS, adopted by the European Union, from those published by IASB have not yet been announced by TASB. The consolidated financial statements and accompanying notes have been presented in accordance with the proposed format of the CMB with the required mandatory information. Doğan Yayın Holding and its subsidiaries, joint ventures and associates registered in Turkey maintain their books of account and prepare their statutory financial statements (“Statutory Financial Statements”) in TL in accordance with the Turkish Commercial Code (the “TCC”), tax legislation, and the Uniform Chart of Accounts issued by the Ministry of Finance. Foreign subsidiaries prepare their statutory financial statements in accordance with applicable laws and regulations in force in the countries in which they are registered. These consolidated financial statements are based on the statutory records, which are maintained under historical cost conversion, with the required adjustments and reclassifications reflected for the purpose of fair presentation in accordance with the CMB’s Financial Reporting Standards. 2.1.2 Financial Statements of Subsidiaries, Associates and Joint Ventures Operating in Foreign Countries Financial statements of subsidiaries that are operating in foreign countries are prepared in accordance with applicable laws and regulations in countries in which they are registered and required adjustments and reclassifications reflected for the purpose of fair presentation in accordance with the Group’s accounting policies. If the Group companies’ functional currency is different from its presentation currency, the functional currency is translated into the presentation currency as follows: • • •
assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet, income and expenses for each income statement are translated at average exchange rates; and all resulting exchange differences are recognised as a separate component of equity and statements of comprehensive income (currency translation reserves). Inflation accounting adjustments have been made for the indirect subsidiaries of the Group operating in Belarus in accordance with IAS 29 as of 31 December 2012
When a foreign operation is partially disposed of or sold, exchange differences recorded in equity are recognised in the income statement as part of the gain or loss on sale. Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate.
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 2-BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued) 2.1 Basis of Presentation (Continued) 2.1.3 Consolidation Principles The consolidated financial statements include the accounts of the parent company, Doğan Yayın Holding, its Subsidiaries, and its Associates (collectively referred as the “Group”) on the basis set out in sections (a) to (e) below. The financial statements of the companies included in the consolidation are based on historical cost of the statutory records and for the purpose of fair presentation in accordance with the accounting policies described in Note 2.1.1 and Note 2.1.2 and application of uniform accounting policies and presentations; adjustments and reclassifications. Subsidiaries and joint ventures acquired or disposed of during the accounting period are included in the consolidation from the date at which the control/ common control of operations are transferred to the Group and excluded from the consolidation when the control/common control is lost. Even if non-controlling interests result in a deficit balance, total comprehensive income is attributed to equity holders of the Parent Company and to the noncontrolling interests. Significant accounting policies used in the preparation of these consolidated financial statements are summarized as below: a) Subsidiaries Subsidiaries are companies in which Doğan Yayın Holding has power to control the financial and operating policies for the benefit of Doğan Yayın Holding either (a) through the power to exercise more than 50% of voting rights relating to shares in the companies as a result of shares owned directly and indirectly by itself or (b) although not having the power to exercise more than 50% of the voting rights, through the exercise of actual dominant influence over the financial and operating policies. Subsidiaries are consolidated on a line-by-line basis from the date control passes to the Group and excluded from the scope of consolidation when the Group loses control. Proportion of ownership interest represents the effective shareholding of the Group through the shares held by Doğan Yayın Holding and indirectly by its subsidiaries. In the consolidated financial statements, interests owned by Doğan family members are treated as non-controlling interests and excluded from net asset and profit of the Group. The balance sheets and statements of income of the subsidiaries are consolidated on a line-by-line basis and the carrying value of the investment held by the Holding and its subsidiaries is eliminated against the related equity. Intercompany transactions and balances between Doğan Yayın Holding and its subsidiaries are eliminated on consolidation. Finance costs and the dividends arising from shares held by Doğan Yayın Holding in its subsidiaries are eliminated from equity and income for the period, respectively. Where necessary, adjustments are made to the accounting policies in the financial statements of subsidiaries in order to comply with the Group’s accounting policies. Changes in the Group’s ownership interests in subsidiaries that do not result in the loss of control over the subsidiaries are accounted for as equity transactions. The carrying amounts of the Group’s interests and non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity and attributed to owners of the Company. When the Group loses control of a subsidiary, the profit or loss on disposal is calculated as the difference between (i) the aggregate of the fair value of the consideration received and the fair value of any retained interest and (ii) the previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary and any non-controlling interests.
118 - 119
DOĞAN YAYIN HOLDİNG ANNUAL REPORT 2012
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 2-BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued) The table below sets out the proportion of voting power held by Doğan Yayın Holding and its subsidiaries and effective ownership interests at 31 December 2012 and 31 December 2011:
Subsidiaries Hürriyet Hürriyet Medya Basım Doğan Ofset Posta Haber Doğan Gazetecilik (1) Doğan Dağıtım Doğan Dış Ticaret Işıl İthalat İhracat(2) Refeks (3) Doğan Haber E Tüketici (4) Doğan Gazetecilik İnternet Yenibir TME Teknoloji (4) Hürriyet Zweigniederlassung Milliyet Verlags (5) DMI Hürriyet Invest Fairworld Falcon Marchant (6) TME (7) Oglasnik d.o.o. (8) TCM Adria d.o.o. Internet Posao d.o.o.(9) Expressz Magyarorszag Media Kft. Mirabridge International B.V. Publishing International Holding B.V. (10) Job.ru LL (11) Pronto Invest B.V. Moje Delo spletni marketing d.o.o (8) Bolji Posao d.o.o. Serbia Bolji Posao d.o.o. Bosnia OOO RUKOM (12) OOO SP Belpronto OOO Pronto Aktobe OOO Novoprint(12) OOO Delta-M OOO Pronto Baikal OOO Pronto DV OOO Pronto Ivanovo OOO Pronto Kaliningrad OOO Pronto Kazan OOO Pronto Krasnodar OOO Pronto Krasnoyarsk (13) OOO Pronto Nizhny Novgorod OOO Pronto Novosibirsk OOO Pronto Oka (14) OOO Pronto Samara OOO Pronto Stavropol (15) OOO Pronto UlanUde OOO Pronto Vladivostok
Proportion of voting power held by Doğan Yayın Holding and its subsidiaries (%) 31 December 31 December 2012 2011 66,56 66,56 100,00 100,00 99,93 99,93 97,53 97,53 70,76 70,76 100,00 100,00 100,00 100,00 96,70 100,00 99,92 99,84 99,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00 74,82 74,82 100,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00 74,28 71,14 100,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00 60,00 60,00 80,00 80,00 100,00 100,00 55,00 55,00 100,00 100,00 100,00 100,00 100,00 100,00 95,00 95,00 72,00 72,00 80,00 80,00 100,00 100,00 90,00 90,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00 90,00 90,00 90,00 90,00
Proportion of effective ownership interest (%) 31 December 31 December 2012 2011 66,56 66,56 66,56 66,56 66,51 66,51 90,64 69,40 70,76 70,76 99,91 99,72 99,41 99,41 96,13 66,56 82,17 82,11 65,90 92,80 98,21 66,56 66,56 66,56 66,56 66,56 65,42 65,57 85,81 85,81 66,56 66,56 99,41 99,41 99,41 99,41 96,13 49,44 47,35 49,44 47,35 49,44 47,35 33,15 49,44 47,35 49,44 47,35 49,44 49,44 49,44 47,35 49,44 47,35 27,19 26,04 27,19 26,04 49,44 47,35 29,67 28,41 31,64 30,30 49,44 47,35 27,19 26,04 49,44 47,35 49,44 47,35 49,44 47,35 46,97 44,98 35,60 34,09 39,55 37,88 49,44 47,35 44,50 42,62 49,44 47,35 49,44 47,35 49,44 47,35 49,44 47,35 44,50 42,62 44,50 42,62
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 2-BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued)
Subsidiaries OOO Pronto Volgograd (16) OOO Pronto Moscow OOO Tambukan OOO Utro Peterburga (14) OOO Pronto Astrakhan (17) OOO Pronto Kemerovo OOO Pronto Smolensk OOO Pronto Tula OOO Pronto Voronezh OOO Tambov-Info OOO Pronto Obninsk OOO Pronto Pskov (18) OOO Pronto Rostov ZAO Pronto Akzhol TOO Pronto Akmola OOO Pronto Atyrau OOO Pronto Aktau SP Pronto Kiev OOO Rosprint (19) OOO Rosprint Samara OOO Partner-Soft Pronto Soft TOV E-Prostir Impress Media Marketing LLC (8) OOO Pronto Neva OOO Rektcentr ZAO NPK(12) Publishing House Pennsylvania Inc. Pronto Ust Kamenogorsk Sklad Dela Prekmurje NGO Doğan TV Holding Kanal D Kanal D Yapımcılık (20) Mozaik Doruk Televizyon Doğan TV Dijital Alp Görsel Fun TV Tempo TV Kanalspor Milenyum TV TV 2000 Moda Radyo (21) Popüler TV D Yapım Reklamcılık Bravo TV Doğa TV Altın Kanal Stil TV Selenit TV Elit TV (22) D Çocuk Ekinoks TV Dönence TV (22) Fleks TV Planet TV (22)
Proportion of voting power held by Doğan Yayın Holding and its subsidiaries (%) 31 December 31 December 2012 2011 100,00 100,00 100,00 85,00 85,00 55,00 55,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00 80,00 80,00 100,00 100,00 100,00 100,00 100,00 100,00 50,00 50,00 100,00 100,00 100,00 90,00 90,00 90,00 90,00 50,00 50,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00 79,96 79,96 94,85 94,85 99,99 99,87 99,85 99,92 99,86 100,00 99,99 100,00 100,00 96,41 94,97 99,27 94,70 100,00 99,59 100,00 99,90 100,00 98,45 99,82 100,00 94,67 100,00 100,00 100,00 98,73 100,00 97,50 100,00 99,14 100,00 98,90 99,87 99,81 99,05 100,00 98,94 100,00 99,76 96,16 100,00 97,82 99,36
Proportion of effective ownership interest (%) 31 December 31 December 2012 2011 47,35 49,44 47,35 42,03 40,25 27,19 26,04 47,35 49,44 47,35 49,44 47,35 49,44 47,35 49,44 47,35 49,44 47,35 49,44 47,35 44,50 49,44 47,35 39,55 37,88 49,44 47,35 39,55 37,88 39,55 37,88 24,72 23,68 47,35 49,44 47,35 44,50 42,62 44,50 42,62 24,72 23,68 49,44 47,35 49,44 47,35 49,44 47,35 49,44 47,35 49,44 47,35 39,55 37,88 27,19 26,04 79,96 79,96 75,84 75,84 75,84 80,09 80,08 79,90 79,85 83,44 80,08 79,96 79,96 77,22 75,94 79,38 75,84 80,09 79,75 80,09 79,88 80,09 78,84 79,82 80,09 75,81 79,96 79,96 80,09 79,06 80,09 78,08 80,09 79,39 80,09 79,20 79,99 79,92 79,32 80,09 79,23 80,09 79,89 77,00 80,09 78,33 79,57
120 - 121
DOĞAN YAYIN HOLDİNG ANNUAL REPORT 2012
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 2-BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued)
Subsidiaries HD TV (22) Doğan Prodüksiyon(23) Kutup TV Galaksi TV Koloni TV Atılgan TV Atmosfer TV(22) Gümüş TV (22) Platin TV (22) Yörünge TV Tematik TV Safir Televizyon (22) Süperkanal Uydu Mobil (24) Matis TV (25) Yonca TV (22) İnci TV (26) Kuvars TV (22) Lal TV (22) Truva TV (26) Kayra (27) Milas (26) Eko TV (28) Anemon(29) Yosun(29) Denizatı Protema in liquidation process (30) NetD Dijital Yayıncılık(31) Doğan Uydu Haberleşme(32) Doğan Teleshopping Rapsodi Radyo TV DMC İnteraktif Medya Prime Turk Osmose Media Kanal D Romanya Doğan Müzik Kitap (33) Hürservis (33) Doğan İletişim (34)
Proportion of voting power held by Doğan Yayın Holding and its subsidiaries (%) 31 December 31 December 2012 2011 99,66 100,00 100,00 99,63 100,00 98,20 90,00 90,00 90,00 90,00 86,67 92,86 91,30 99,19 98,39 86,67 86,67 86,67 99,91 99,65 100,00 58,67 99,99 100,00 100,00 86,67 86,67 86,67 86,67 86,67 86,67 95,01 100,00 100,00 100,00 100,00 99,99 99,99 100,00 100,00 100,00 99,99 99,25 97,58 100,00 99,96 99,99 100,00 100,00 100,00 100,00 100,00 100,00 83,17 100,00 100,00 100,00
Proportion of effective ownership interest (%) 31 December 31 December 2012 2011 79,81 79,96 80,09 79,78 80,09 78,64 71,97 71,97 71,97 71,97 69,40 74,36 73,12 79,44 78,79 69,30 69,30 69,40 79,89 79,80 80,09 46,97 79,96 80,08 79,96 69,40 69,40 69,40 69,40 69,40 69,40 75,97 79,96 79,96 79,96 79,96 79,96 79,96 79,96 79,96 79,96 79,96 79,36 78,03 79,96 86,25 79,96 79,96 80,09 79,96 79,96 79,96 85,81 71,37 100,00 96,19 100,00
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 2-BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued)
Subsidiaries Doğan Faktoring Doğan Platform Aras Produksiyon (35) Nartek
Proportion of voting power held by Doğan Yayın Holding and its subsidiaries (%) 31 December 31 December 2012 2011 99,00 99,00 100,00 100,00 99,99 59,99 59,99
Proportion of effective ownership interest (%) 31 December 31 December 2012 2011 97,29 97,29 100,00 100,00 79,96 39,94 39,94
Doğan Yayın Holding A.Ş. owns 70,76% of shares of Doğan Gazetecilik A.Ş. Nevertheless, in consequence of the option explained in Note 8, the effective ownership interest rate is calculated as 92,76% by considering the additional share proportion in accordance with IAS 32 “Financial Instruments: Presentation” for the operational results of Doğan Gazetecilik and its subsidiaries (2) The related subsidiary has merged with Doğan Dış Ticaret ve Mümessillik A.Ş. as of 31 December 2012. (3) The liquidation process of the related subsidiary is completed as of 20 June 2012. (4) The related subsidiary was merged with Yenibiriş İnsan Kaynakları Hizmetleri Danışmanlık ve Yayıncılık A.Ş. as of 19 June 2012. (5) The related subsidiary is in the liquidation process as of 27 December 2010. (6) The liquidation process of the related subsidiary is completed as of 16 April 2012. (7) Group has purchased and taken over 6,98% of shares corresponding to a number of 3.490.691(exact) share of TME as of 7 March 2012. (8) Related rates include call-options regarding non-controlling shares explained in Note 20. (9) The related subsidiary was merged with Oglasnik D.O.O. as of 15 May 2012. (10) The related subsidiary was established as of 28 June 2012. (11) The related subsidiary was established as of 29 September 2012. (12) The related subsidiary is in the liquidation process as of 2012. (13) The related subsidiary is in the liquidation process as of 2011. (14) The related subsidiary has ceased its operations before the year 2010. (15) The merging process of the related subsidiary with OOO Pronto Rostov has started during the year, 2011. (16) The liquidation process of the related subsidiary has been completed as of 18 May 2012. (17) The liquidation process of the related subsidiary is completed as of 7 November 2012 (18) The related subsidiary was established as of 18 June 2012. (19) The sale of the related subsidiary has been completed as of 5 April 2012. (20) The related subsidiary was established as of 5 June 2012. (21) The sale and transfer of shares of the related subsidiary have been completed as of 12 January 2012. (22) The related subsidiary was merged with Mozaik İletişim Hizmetleri A.Ş. as of 31 May 2012. (23) The related subsidiary was merged with D Yapım Reklamcılık ve Dağıtım A.Ş as of 25 December 2012. (24) The liquidation process of the related subsidiary is completed as of 18 June 2012. (25) The liquidation process of the related subsidiary is completed as of 25 June 2012. (26) The liquidation process of the related subsidiary is completed as of 22 June 2012. (27) The liquidation process of the related subsidiary is completed as of 20 June 2012. (28) As of 6 September 2012, Group Management has completed the share purchase transaction for the 19,98% shares of Eko TV which was accounted as joint venture at 31 December 2011. In the current period, the Company has been included as subsidiary in the scope of consolidation. (29) The related subsidiary was merged with Denizatı İletişim Hizmetleri A.Ş. as of 7 August 2012. (30) The related subsidiary is in the liquidation process as of 26 November 2012. (31) The related subsidiary was established as of 22 November 2012. (32) The related subsidiary was established as of 6 November 2012. (33) The sale and transfer of shares of Doğan Müzik Kitap Mağazacılık ve Pazarlama A.Ş. (“DMK”) and its subsidiary to the parent company, Doğan Holding, have been completed as of 16 January 2012. (34) The related subsidiary was merged with Doğan TV Dijital Platform İşletmeciliği A.Ş. as of 30 April 2012. (35) The related subsidiary was merged with Doruk Televizyon ve Radyo Yayıncılık A.Ş. as of 26 April 2012. (1)
122 - 123
DOĞAN YAYIN HOLDİNG ANNUAL REPORT 2012
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 2-BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued) 2.1.3 Consolidation Principles (Continued) b) Interests in Joint Ventures Joint ventures are companies in respect of which there are contractual arrangements through which an economic activity is undertaken subject to joint control by Doğan Yayın Holding and one or more other parties. Joint ventures, except for those that are classified as held for sale under IFRS 5 are included in consolidation using the proportionate consolidation method (i.e. through the inclusion of the Group’s share of the assets, liabilities, income and expenses).Unrealized gains and losses arising from the transactions with the Group and its joint ventures are eliminated proportionally as the Group’s interest in the joint venture. The joint-ventures, the proportion of voting power held by Doğan Yayın Holding and its subsidiaries and effective ownership interests at 31 December 2012 and 31 December 2011 are disclosed in Note 4. c) Interests in Associates An associate is an entity over which the Group has significant influence and that is neither a subsidiary nor an interest in a joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee but do not have control or joint control over those policies. Investments in associates are accounted for using the equity method of accounting. Such entities are companies in which Doğan Yayın Holding and its subsidiaries have 20%-50% of the voting rights of the Group’s overall voting power, where the Group has significant influence without any controlling power over the operations. Unrealized gains on transactions between the Group and its joint ventures are eliminated to the extent of the Group’s interest in its associates; unrealized losses are also eliminated if there is no indication of the assets transferred. Unrealized gains arising from the transactions with the Group and its associates are written off proportionally as the Group’s interest whereas unrealized losses are written off when there is no indication of impairment of the transferred asset. Increases or decreases in the net assets of associates are increased or decreased proportionally as the Group’s share in the consolidated financial statements and presented under the “Share of loss on investments accounted for by using the equity method” account in the statement of income. Where the investment’s share of losses exceeds the Group’s share (including any longterm investments that, in substance, form part of the Group’s net investment in the associate), the exceeding portion of losses are not recognized. Additional losses are recognised only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate. Unrealized gains on transactions between the Group and its associates are restated in proportion to the Group’s share in the associate and unrealized losses are also restated when there is no indication of impairment of the transferred asset. Equity method is not applied when the carrying amount of the investment in a joint venture reaches zero to the extent that the Group assumes no liabilities or obligations or in respect of the joint venture or the Group has no significant influence over the related joint venture. The carrying amount of the investment when the Group loses its significant influence over the investment is then carried at fair value. The table below indicates associates accounted for using the equity method and the effective interest rates of Doğan Yayın Holding and its subsidiaries at 31 December 2012 and 31 December 2011:
Associate
Voting power held by Doğan Yayın Holding and its subsidiaries (%) 31 December 2012 31 December 2011
Doğan Havacılık (1) (1)
The related associate was merged with Milta Turizm İşletmeleri A.Ş. as of 25 December 2012.
-
29,00
Proportion of effective ownership interest (%) 31 December 2012 31 December 2011 -
25,93
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 2-BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued) 2.1.3 Consolidation Principles (Continued) d) Non-controlling interests Non-controlling interests of shareholders over the net assets and operational results of subsidiaries are classified as non-controlling interest and noncontrolling profit/loss in the consolidated balance sheet and statement of income. e) Financial investments Other investments in which the Group and its subsidiaries, have less than 20%, or more than 20% direct or indirect participation but the Group has no significant influence over the related assets, or which are immaterial to consolidated financial statements are classified as available for sale financial assets. Available for sale investments that do not have a quoted market price in an active market and whose fair value cannot be measured reliably are carried at cost less any allowance for impairment (Note 7). 2.1.4 Offsetting Financial assets and liabilities are offset and the net amount is reported in the consolidated balance sheet when there is a legally enforceable right to set-off the recognised amounts and there is an intention to settle on a net basis, or realize the asset and settle the liability simultaneously. 2.1.5 Comparative information and restatement of prior period financial statements The consolidated financial statements of the Group are prepared comparatively with the previous period to identify the financial position and performance trends. In order to maintain consistency, with current period consolidated financial statements, comparative information is reclassified and significant changes are disclosed if necessary. In the current period, the Group has reclassified its prior period financial statements in order to comply with the presentation of its current period consolidated financial statements. The nature, amount and reason for the reclassifications are described below: - Marketing, sales and distribution expenses amounting to TL 9.651 is shown by offsetting against the sales revenue. -
Net loss from discontinued operations decrease by TL 3.113 as a result of the offsetting of provisions subsequent to the date of sale till the end of the balance sheet date in comparison to the amount previously reported.
-
Restricted profit reserves account has been increased by TL 7.853 and accumulated losses have also been increased by the same amount for the purposes of providing compliance with statutory records.
-
Tax assets recognized in “other current assets” amounting to TL 3.597 is shown by offsetting against deferred tax liabilities.
124 - 125
DOĞAN YAYIN HOLDİNG ANNUAL REPORT 2012
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 2-BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued) 2.1.6 Significant Accounting Policies and Changes in Accounting Estimates and Errors and Restatement of Previously Reported Financial Statements Changes in accounting policies arising from the first time adoptation of a new IAS/IFRS are applied retrospectively or prospectively in accordance with the respective IASs/IFRSs transition requirements, if any. Where there are no transition requirements for any changes or optional significant changes in accounting policies and identified accounting errors, those are applied retrospectively and prior period financial statements are restated accordingly. As a result of management’s decision made based on the Group management’s evaluation, the Group management decided to measure their investment properties at fair value which were previously carried at cost less accumulated depreciation and impairment charges , if any under the cost method in the consolidated financial statements. The effect of these changes are reflected in the consolidated financial statements as of 1 January 2010 and consolidated financial statements were restated accordingly in accordance with “IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors” (“IAS 8”). As a result of this amendment, as of 31 December 2011, the investment properties of the Group have increased by TL 16.974 (31 December 2010: TL 17.164); effects of this amendment to the shareholders’ equity and net loss for the period of the Group are TL 12.469 (31 December 2010: TL 11.026) and TL 1.443 (31 December 2010: TL 11.026) respectively. The impact of such accounting policy change on each account balance is summarized below as of 31 December 2011 and 2010: 31 December 2011 Previously reported 40.253 535.126 59.757
Fair value adjustment 16.974 1.572 (866)
Restated 57.227 536.698 58.891
Accumulated losses Net loss for the period Non-controlling interests
(926.203) (1.195.716) 421.271
11.026 1.443 5.211
(915.177) (1.194.273) 426.482
Other operating expenses (-) Deferred tax expense
(1.156.996) (18.375)
2.696 (400)
(1.154.300) (18.775)
(1.262.898)
2.296
(1.260.602)
(67.182) (1.195.716)
853 1.443
(66.329) (1.194.273)
Investment property Property, plant and equipment Deferred tax liability (net)
Net loss for the period Non-controlling interests Attributable to equity holders of the Parent Company (1)
Adjustment amounting to TL 1.572 observed in property, plant and equipment is related with the transfer made from investment properties.
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 2-BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued) 2.1.6 Significant Accounting Policies and Changes in Accounting Estimates and Errors and Restatement of Previously Reported Financial Statements (Continued) 31 December 2010
Investment property Property, plant and equipment Deferred tax liability (net) Accumulated losses Net loss for the period Non-controlling interests
Previously reported 35.812 606.507 75.688
Fair value adjustment 17.164 (1.314) (466)
Restated 52.976 605.193 75.222
(688.458) (236.637) 464.422
11.026 4.358
(688.458) (225.611) 468.780
Also, the Group has started to capitalize subscriber acquisition costs in the current period. Subscriber acquisition costs paid by D-smart are capitalized over the subscription commitment period beginning from 1 January 2012 and capitalized amounts are recognized under intangible assets account. The preparation of consolidated financial statements require the use of estimations and assumptions that may have an effect over the assets and liabilities reported at the balance sheet date, contingent assets and liabilities disclosures and income and expenses reported during the accounting period. The estimates and assumptions are based on the best available information on the current circumstances and operations; however, they may differ from the actual results. If changes in accounting estimates only relate to one period, the change is reflected in the current period in which the change is made, if they relate to future periods, the change is both reflected in the current period in which the change is made and prospectively for future periods. Except for calculation of employment termination benefits by an actuarial firm (Note 2.1.7), capitalization of subscriber acquisition costs and measurement of investment properties at fair value, accounting policies and accounting estimates applied in the current year are consistent with accounting policies and accounting estimates applied in the preparation of consolidated financial statements for the year ended as of 31 December 2011. 2.1.7 New and Revised International Financial Reporting Standards The following new and revised standards and interpretations below are applied by the Group and have affected the reported amounts and disclosures in the consolidated financial statements. However, the details of standards and interpretations effective in the current period but have no effect on the financial statements and standards and interpretations not yet effective and have not been early adopted by the Group are set out below. (a) Standards effective from 1 January 2012 but have no effect on the financial statements of the Group IFRS 7 (Amendments) IAS 12 (Amendments)
Disclosures – Transfers of Financial Assets Deferred Taxes – Recovery of Underlying Assets
DOĞAN YAYIN HOLDİNG ANNUAL REPORT 2012
126 - 127
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 2-BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued) 2.1.7 New and Revised International Financial Reporting Standards (Continued) (b) New and Revised Standards and Interpretations not yet effective and have not been early adopted by the Group IAS 1(Amendments) IAS 1(Amendments) IFRS 9 IFRS 10 IFRS 11 (1) IFRS 12 IFRS 13 IFRS 7 (Amendments) IFRS 9 and IFRS 7 (Amendments) IFRS 10, IFRS 11 and IFRS 12 (Amendments) IAS 27 (2011) IAS 28 (2011) IAS 32 (Amendments) Amendments to IFRSs IFRIC 20
Presentation of Items of Other Comprehensive Income Clarification of the Requirements for Comparative Information Financial Instruments Consolidated Financial Statements Joint Arrangements Disclosure of Interests in Other Entities Fair Value Measurement Disclosures – Offsetting Financial Assets and Financial Liabilities Mandatory Effective Date of IFRS 9 and Transition Disclosures Consolidated Financial Statements, Joint Arrangements and Disclosures of Interests in Other Entities: Transition Guide Separate Financial Statements Investments in Associates and Joint Ventures Offsetting Financial Assets and Financial Liabilities Annual Improvements to IFRSs 2009-2011 Cycle except for the amendment to IAS 1 Stripping Costs in the Production Phase of a Surface Mine
The above standards will be applicable for 2013 and the following years, and the Group has not had an opportunity to consider the potential impact of the application of these standards over its financial statements but above-mentioned differences are expected not to have any significant impact on the financial statements. (c) New and Revised Standards and Interpretations not yet effective and have been early adopted by the Group IAS 19 Employee Benefits The amendments to IAS 19 change the accounting for defined benefit plans and termination benefits. The most significant change relates to the accounting for changes in defined benefit obligations and plan assets. The amendments require the recognition of changes in defined benefit obligations and in fair value of plan assets when they occur, and hence eliminate the ‘corridor approach’ permitted under the previous version of IAS 19 and accelerate the recognition of past service costs. The amendments require all actuarial gains and losses to be recognized immediately through other comprehensive income in order for the net pension asset or liability recognized in the consolidated statement of financial position to reflect the full value of the plan deficit or surplus. In 2012, the Group has decided to early adopt the amendments to IAS 19 which is applicable as of 1 January 2013. As stated in Note 2.1.6 “Significant Accounting Policies and Changes in Accounting Estimates and Errors and Restatement of Previously Reported Financial Statements”, all actuarial gains and losses are recognized in other comprehensive income statement for the fair presentation of plan deficit or surplus of net retirement asset or liability presented in consolidated balance sheet. Amendments to IAS 19 are required to be applied retrospectively. Accordingly, the Group management has evaluated the effect of changes in accounting policies to financial statements prepared for the period as of 31 December 2011 and decided that restatement of prior financial statements is not needed as calculated effects after tax are below the materiality level.
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 2-BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued) 2.2 Summary of Significant Accounting Policies Related parties For the purpose of these consolidated financial statements, related parties are referred to as legal entities in which Doğan Holding directly or indirectly has participation, including any entities under common control; real persons and/or legal entities that have direct or indirect individual or joint control over the company and their close family members (relatives up to second-degree) and legal entities having direct or indirect individual or joint control by them and legal entities having significant effect over the Company or their key management personnel; Company’s affiliates, subsidiaries and members of the Board of Directors, key management personnel and their close family members (relatives up to second-degree) and real persons and/or legal entities that are directly or indirectly controlled individually or jointly (Note 34). Cash and cash equivalents Cash and cash equivalents are carried at cost in the balance sheet. Cash and cash equivalents comprise cash in hand, bank deposits and highly liquid investments without a significant risk over the change in their value, whose maturity at the time of purchase is three months or less (Note 6). Trade receivables and provision for doubtful receivables The Group’s trade receivables from providing goods or services to customers are carried at net of unrealized finance income. Trade receivables, net of unrealized finance income, are calculated by discounting future cash inflows of receivables carried at the original invoice amount using the effective interest method. Short term receivables with indefinite interest rate are carried at cost unless the effect of imputing interest is significant. Provision is allocated for receivables when the Group has an objective indication over the collectability. The amount of the provision is the difference between the carrying amount and the recoverable amount. Recoverable amount is the present value of all cash flows, including amounts recoverable from guarantees and collaterals discounted based on using the original effective interest rate of the trade receivable occurred. If there is a partial or whole collection over the doubtful receivable amount subsequent to the allocation of provision for doubtful receivables, the collected portion is recognised as income following the write-down of the total provision amount (Note 28). Inventories Inventories are valued at the lower of cost or estimated selling price less estimated costs necessary to make a sale. Cost elements included in inventory are purchase costs and other costs necessary to prepare the asset for its intended use. Cost elements included in inventories are materials, labor and production overheads. The unit cost of inventories is determined on the moving weighted average basis (Note 12). When the net realizable value of inventory is less than cost, the inventory is written down to the net realizable value and the expense is included in the statement of income in the period the write-down or loss occurred. When the circumstances that previously caused inventories to be written down below cost no longer exist or when there is clear evidence of an increase in net realizable value because of the changing economic circumstances, the amount of the write-down is reversed. The reversal amount is limited to the amount of the initial impairment.
DOĞAN YAYIN HOLDİNG ANNUAL REPORT 2012
128 - 129
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 2-BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued) 2.2 Summary of Significant Accounting Policies (Continued) Inventories (Continued) Promotion stocks Evaluation of impairment on promotion stocks and in detection of an impairment; evaluation of the impairment amount is carried out by the Group management. In this manner, an inventory impairment amount is set with the rates determined by the Group management by taking the purchase date into consideration. Programme stocks Programme stocks comprise internal and external productions that have been produced but not yet broadcasted as of the report date. Programme stocks are recognised at acquisition or production cost and they are not subject to amortization. These programmes are charged to the income statement upon the first transmission and included in cost of sales in the consolidated statement of income (Note 25). If the estimated income from programme stocks is lower than the carrying value, carrying value is discounted to net realizable value. Financial instruments In accordance with IAS 39, the Group classifies its financial instruments as assets held at fair value through profit or loss, held-to-maturity, availablefor-sale and loans and receivables. Classification is determined based on the acquisition purpose and specifications of the financial asset at the initial recognition. All financial assets are recognised at cost including transaction costs in the initial measurement. “Financial assets at fair value through profit or loss” are financial assets that have been acquired principally for the purpose of taking advantage of fluctuations in price and other similar elements or independent from initial recognition financial assets held for trading which are part of a portfolio that has a recent actual pattern of short-term profit-taking. A financial asset is classified in this category if it is primarily acquired for the purpose of selling in the short-term. Financial assets at fair value through profit or loss are initially carried at cost including transaction costs at the balance sheet. Subsequent to recognition, the financial assets are carried at fair value. Realized or unrealized gains and losses are recognized in “financial income/ expenses”. Dividends received, are recognized as dividend income in the consolidated statement of income. Financial assets considered as derivative instruments that are not designated for the purpose of hedging instruments are classified as financial assets at fair value thorough profit or loss. “Held-to-maturity investments” are non-derivative financial assets with fixed or determinable payments that the Group intends and is able to hold to maturity and that do not meet the definition of loans and receivables and are not designated on initial recognition as assets at fair value through profit or loss or as available for sale. Held-to-maturity investments are carried at amortized cost using the effective interest method less impairment, if any. The Group has no held to maturity investments as of 31 December 2012.
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 2-BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued) 2.2 Summary of Significant Accounting Policies (Continued) The Group’s “available for sale financial assets” comprise of quoted equity instruments and certain debt securities that are traded in an active market and they are measured at fair value. Unrealized gains or losses on an available-for-sale financial asset shall be recognised in equity, through the investments revaluation reserves and comprehensive income, except for impairment losses and foreign exchange gains and losses, until the financial asset is derecognised, at which time the cumulative gain or loss previously recognised in equity shall be recognised in profit or loss. Dividends on available-forsale equity instruments are recognized in profit or loss when the Group’s right to receive payment is established. Financial assets classified by Doğan Yayın Holding as “available- for- sale financial assets” that do not have any control power or significant effect have no fair value. When fair value cannot be reliably measured as other fair value estimation methods are not applicable; the carrying value of the financial asset is measured at cost less any impairment loss (Note 7). “Loans and Receivables” are financial assets that have fixed or determinable payments and fixed maturity dates and non-derivative financial assets that are not quoted in an active market. Derivative financial instruments Derivative forward instruments, predominantly foreign currency and interest swap agreements and foreign currency forward agreements are initially recognised at their historical costs plus the transaction costs. Derivative financial instruments are subsequently remeasured at their fair value. All derivative financial instruments are classified as financial assets at fair value through profit or loss. Fair values of derivative financial instruments are obtained from quoted market prices or discounted cash flow models as appropriate. Based on positive or negative fair value, derivative financial instruments are carried as assets or liabilities respectively (Note 14). Changes in the fair value of derivatives at fair value through profit or loss are included in the statement of income. While certain derivatives provide effective hedge relationships, they are recognised as financial assets through profit or loss in accordance with IAS 39 and their fair value gains and losses are reported in the statement of income. Investment property Investment properties are properties held to earn rentals and/or for capital appreciation. Investment properties are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are stated at fair value which reflects the market conditions. Gains or losses arising from changes in the fair values of investment properties are included in the profit or loss in the period in which they arise. As of 31 December 2012, the Group decided to adopt fair value method for their investment properties which were previously accounted under the cost method and restated its financial statements according to IAS 8 as explained in Note 2.1.6 “Significant Accounting Policies and Changes in Accounting Estimates and Errors and Restatement of Previously Reported Financial Statements”
130 - 131
DOĞAN YAYIN HOLDİNG ANNUAL REPORT 2012
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 2-BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued) 2.2 Summary of Significant Accounting Policies (Continued) Investment property (Continued) An investment property is derecognized upon disposal or when the investment property is permanently withdrawn from use and no future economic benefits are expected from disposal. Any gain or loss arising on derecognition of the property is included in profit or loss in the period in which the property is derecognized. Transfers are made to or from investment property only when there is a change in use. For a transfer from investment property to owner occupied property, the deemed cost for subsequent accounting is the fair value at the date of change in use. If owner occupied property becomes an investment property, the Group accounts for such property in accordance with the policy stated under property, plant and equipment up to the date of change in use. The difference between cost value and fair value at the date of the change is recognized as revaluation fund in other comprehensive income. Property, plant and equipment and related depreciation Property, plant and equipment are carried at cost less any accumulated depreciation and any accumulated impairment losses (Note 16). Depreciation is provided on property, plant and equipment on a straight-line basis (except land). The depreciation periods for property, plant and equipment, which approximate the economic useful lives of such assets, are as follows: Years Land and land improvements Buildings Machinery and equipment Motor vehicles Furniture and fixtures Leasehold improvements
15-50 25-50 3-15 5-10 3-15 2-25
Useful life and depreciation are reviewed regularly and the Group also reviews the consistency of the useful life and depreciation method applied with the economic benefits to be obtained from the underlying assets. Gains or losses on disposals of property, plant and equipment are determined with respect to the difference between collections received and carrying amounts of property, plant and equipment and are included in the related income and expense accounts, as appropriate. Where the carrying amount of an asset is greater than its estimated recoverable amount, it is written down immediately to its recoverable amount provided to allocate provision. The recoverable amount of an asset is the higher of its fair value less costs to sell and its value in use. Fair value less costs to sell is the amount obtainable from the sale of an asset less the costs of disposal. Value in use is the present value of the future cash flows expected to be derived from an asset plus the residual value of the related assets. Repair and maintenance expenses are charged to the consolidated statement of income as they are incurred. Capital expenditures that increase the present value of the future cash flows expected to be derived from property, plant and equipment by increasing its capacity is added to the cost of tangible fixed asset.
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 2-BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued) 2.2 Summary of Significant Accounting Policies (Continued) Financial Leases Leases are classified as finance leases by the Group whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. Assets held under finance leases are recognised as assets of the Group at their fair value at the inception of the lease or, if lower, at the present value of the minimum lease payments. Lease payments are treated as consisting of capital and interest. Principal lease payments are treated as liabilities and reduced with their payments. Interest charges are charged directly against income statement over the financial lease period. Assets acquired through finance leases are depreciated over the shorter of expected useful life and the lease term, as well as tangible assets acquired. An operating lease is a lease that does not substantially all the risks and rewards incidental to ownership of an asset. For operating leases, lease payments (net of any incentives received from the lessor) are recognized as an expense on a straight line basis over the lease term under the consolidated income statement. Goodwill Goodwill and negative goodwill amount, which represents the difference between the purchase price and the fair value of the acquiree’s net assets, arising from business combinations effected prior to 30 June 2004 in the consolidated financial statements is capitalized and amortized over the useful life by using the straight-line method prior to 31 December 2004. Goodwill arising from business combinations effected subsequent to 31 March 2004 is not amortized and instead reviewed for any impairment losses in accordance with IFRS 3 Business Combinations (Note 18). For the purpose of impairment testing, goodwill is allocated to each of the Group’s cash-generating units expected to benefit from the synergies of the combination. Cash-generating units to which goodwill has been allocated are tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. An impairment loss recognised for goodwill is not reversed in a subsequent period.
132 - 133
DOĞAN YAYIN HOLDİNG ANNUAL REPORT 2012
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 2-BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued) 2.2 Summary of Significant Accounting Policies (Continued) Intangible assets and related amortization Intangible assets excluding goodwill and assets with infinite useful lives comprise brand names, customer lists, terrestrial broadcasting permissions and licenses (frequency rights), other identified rights, computer software and television programme rights which are further discussed in Note 2.2. Brand names, customer relationships and domain names are determined based on the independent valuation on business combinations. Useful lives of certain brand names are determined to be infinite. Assets that have infinite useful life are not subject to amortization and are tested for impairment annually (Note 17). Registered subscriber acquisition costs paid by D-smart are capitalized over the subscription commitment period by the Group beginning from 1 January 2012 and capitalized amounts are recognized under intangible assets account. Weighted average term for subscription acquisition costs is 2 years. Intangible assets are carried at cost, less any accumulated amortization and amortized by using the straight-line method (Note 17). Estimated useful lives of intangible assets that have a finite useful life are as follows: Years Trademark Customer lists Computer software and rights Domain names Other intangible rights
20-25 9 – 18 3 – 15 3 – 20 5
Intangible assets with finite useful lives are tested to determine whether there is an indication that the intangible assets may be impaired and if the carrying value of the intangible asset is higher than the recoverable amount, the carrying value of the intangible asset is written down to its recoverable amount provided to allocate provision. The recoverable amount of an intangible asset is the higher of its fair value less costs to sell and its value in use. Provision for impairment is recognized under the statement of income in the related period. Web page development costs Costs associated with developing web pages are capitalized and amortized by using straight-line method over their estimated useful lives (Note 17). Following the planning phase and operation; all costs are recognised as expense. Maintenance costs of web pages are accounted as operational expenses.
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 2-BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued) 2.2 Summary of Significant Accounting Policies (Continued) Television program rights Television program rights (foreign series, foreign films and Turkish films) are initially recognised at acquisition cost of the license when the Group controls, in substance, the respective assets and the risks and rewards attached to them. Television program rights are evaluated to determine if expected revenues are sufficient to cover the unconsumed portion of the program. To the extent that expected revenues are insufficient, the program rights are written down to their net realizable value. Consumption is based on the transmission of the expected number of runs (vary from two to unlimited) purchased. Amortization of these rights is determined according to release order and number of runs. The appropriateness of the consumption profiles are reviewed regularly by the management. A maximum of 5 runs is applied for the unlimited run purchases. Impairment of assets excluding goodwill and intangible assets with infinite useful lives At each balance sheet date, the Group evaluates whether there are any indications that an asset other than goodwill or infinite life intangible assets may be impaired. When an indication of impairment exists, carrying value of the assets is compared with the net realizable value which is the higher of value in use and fair value less costs to sell. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). Impairment exists if the carrying value of an asset or a cash generating unit including that asset is greater than its recoverable amount which is the higher of value in use or fair value less costs to sell. Impairment losses are recognised in the consolidated statement of income. Taxation on income Taxation on income includes current period income taxes and deferred taxes. Current year tax liability consists of tax liability on period income calculated according to currently enacted tax rates and tax legislation in force as of balance sheet date and includes adjustments related to previous year’s tax liabilities. Turkish tax legislation does not permit a parent company and its subsidiary to file a consolidated tax return. Therefore, tax provisions, as reflected in the accompanying consolidated financial statements, have been calculated on a separate-entity basis. Deferred income tax is provided, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying values for financial reporting purposes. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date. Deferred tax liabilities are recognised for all taxable temporary differences, where deferred tax assets resulting from deductible temporary differences are recognised to the extent that it is probable that future taxable profit will be available against which the deductible temporary difference can be utilized (Note 32). Such deferred tax assets and liabilities are not recognized if the temporary difference arises from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they related to income taxes levied by the same taxation authority.
DOĞAN YAYIN HOLDİNG ANNUAL REPORT 2012
134 - 135
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 2-BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued) 2.2 Summary of Significant Accounting Policies (Continued) Financial borrowings and borrowing costs Borrowings are recognised initially at the proceeds received, net of transaction costs incurred. Borrowings are subsequently stated at amortized cost using the effective interest method. Any difference between proceeds, net of transaction costs, and the redemption value is recognised in the income statement as finance expense over the period of the borrowings (Note 8). The borrowing costs which are directly related with the acquisition, manufacturing or production of a specialty good (means that a long period of time is required to make available for sale and use as purposed) are capitalized as a part of the related asset. The Group does not have any capitalized borrowing costs during the current period. Financial liabilities subject to non-controlling put options Under the terms of certain share purchase agreements, the Group may commit to acquire the interests owned by non-controlling shareholders in subsidiaries, upon the request of non-controlling interest holders. IAS 32, “Financial Instruments: Disclosure and Presentation” requires the value of such put option to be presented as a financial liability on the balance sheet for the discounted value of the expected exercise price of this option, notwithstanding the ability of the Company to settle part of these obligations with its own shares and not cash. In addition, the share of non-controlling shareholders in the net asset of the company subject to the put option is presented in “other financial liabilities” instead of “non-controlling interests” in the consolidated balance sheet. The Group presents, at initial recognition, the difference between the exercise price of the option and the carrying value of the non-controlling interests first as a reduction of non-controlling interest and then as addition to the Group’s equity. The discount amount and any subsequent change in the fair value of the commitment are recognised in the income statement as finance income or expense in subsequent periods. Employment termination benefits Under the Turkish Labour Law and Press Labour Law (for employees in the media sector), the Group is required to pay termination benefits to each employee who achieves the retirement age, whose employment is terminated without due cause written in the related laws. The provision for employment termination benefit represents the present value of the estimated total reserves of the future probable liability of the Group arising from the retirement of the employees measured in accordance with the Turkish Labour and Press Labour Laws (Note 22). The Group has decided to early adopt the amendment in IAS 19 (Note 2.1.7) in 2012 which will be effective starting from 1 January 2013, and calculated employment benefit in accordance with the report prepared by the actuarial firm and recognized all actuarial loss and gains in the other comprehensive income statement.
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 2-BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued) 2.2 Summary of Significant Accounting Policies (Continued) Provisions, contingent assets and liabilities Provisions are recognised when the Group has a present legal or constructive obligation or a result of past events, it is probable that on outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate of the amount of the obligation can be made. Contingent liabilities are assessed continually to determine whether an outflow of resources comprising economic benefits has become probable. If it becomes probable that an outflow of future economic benefits will be required for an item previously dealt with as a contingent liability, a provision is recognised in the financial statements of the period in which the change in probability occurs except in the extremely rare circumstances where no reliable estimate can be made. If it has become virtually certain that an inflow of economic benefits will arise, the asset and the related income are recognised by the Group in the financial statements of the period in which the change occurs. Possible 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 Group are not included in financial tables and are treated as contingent assets or liabilities. A contingent asset is disclosed where an inflow of economic benefit is probable. When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably. Share capital and dividends Ordinary shares are classified as equity. Dividend income is recognised as income by the Group when right to obtain of dividend is generated in the consolidated financial statements. Dividend distribution to the Company’s shareholders is recognised as a liability in the Group’s consolidated financial statements in the period in which the dividends are approved by the General Assembly.
DOĞAN YAYIN HOLDİNG ANNUAL REPORT 2012
136 - 137
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 2-BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued) 2.2 Summary of Significant Accounting Policies (Continued) Revenue recognition Revenue is the fair value amount of sales of goods and services received or receivable which resulted from Group’s operations. Net sales represent the invoiced value of goods or services shipped less any trade discounts, rebates and commissions and are presented with the elimination of intercompany balances. Revenue is initially recognized at the fair value of the consideration received or receivable when it can be measured reliably or when there is an inflow of economic benefits. When the arrangement effectively constitutes a financing transaction, the fair value of the consideration is determined by discounting all future receipts using an imputed rate of interest. The imputed rate of interest is a rate of interest that discounts the nominal amount of the instrument to the current cash sales price of the goods or services (Note 25). Revenues from television, newspapers, magazines and other advertisements Revenue from advertisements is recognised on an accrual and cut-off basis at the time of broadcasting or printing the advertisement in the related media at the invoiced amounts. The part which is not broadcasted or published yet is recognised as deferred income on the balance sheet. Revenues from newspaper and magazine sales and distribution Revenue from newspaper and magazine sales is recognised on an accrual basis at the time of delivery of the newspapers by the distribution company to the dealer at the invoiced values. Newspaper sales returns and provisions: Provision for newspaper sales returns is accounted at the time of delivery based on past experiences and recent information of sales returns. Returns on magazine sales and provisions: Provision for returns on magazine sales are the provisions provided to reflect the sales income based on matching principle by using statistical data for the previous period, field sales data, etc. when return invoices are not issued although returns are taken off from the market or the issue of magazine period is not expired. Revenues from printing services Revenues from printing arise from printing services given to both Group companies and third parties by using Group’s printing facilities. Related income is recognised on an accrual basis at the time of services given. Other revenues Interest income is recognised on a time proportion basis and income accrual is ascertained by taking effective interest rate and remaining maturity into account. Rent income and other income are recognised on an accrual basis.
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 2-BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued) 2.2 Summary of Significant Accounting Policies (Continued) Barter agreements The Group provides advertising services in return for advertisement and other products and services. When goods or services are exchanged or swapped for goods or services which are of a similar nature and value, the exchange is not regarded as a revenue generating transaction. When goods are sold or services are rendered in exchange for dissimilar goods or services, the exchange is regarded as a revenue generating transaction. Revenue is measured at the fair value of the goods or services received, adjusted by the amount of any cash or cash equivalents transferred. If the fair value of the goods or services received is not measured reliably, the revenue is measured at the fair value of the goods or services supplied, adjusted by the amount of any cash or cash equivalents transferred (Note 21). Barter agreements are recognised on an accrual basis. Business combinations Business combinations are accounted in accordance with IFRS 3. Goodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share of the net identifiable assets of the acquired subsidiary/associate at the date of acquisition. If the purchase amount is less than the fair value of provisions, contingent assets and liabilities, the subjected difference is identified with comprehensive income statement. Goodwill recognised in a business combination is not amortized, instead it is tested for impairment annually, or more frequently if events or changes in circumstances indicate that it might be impaired. If the acquisition cost is lower than the fair value of the identifiable assets, liabilities and contingent liabilities acquired, the difference is accounted for as income in the related period (Note 3). There are no business combinations that have significant effect over the financial statements for the period ended 31 December 2012 except for Eko TV combination explained in Note 3. Gains or losses resulted from sale or purchase of subsidiaries under the control of Doğan Yayın Holding (transactions that do not result in a change in control) are recognised under equity. IAS 27 (Revised) requires ownership decreases or increases which do not result in a change in control to be recorded under equity for accounting periods beginning on or after 1 July 2009. For accounting periods beginning prior to 1 July 2009, the difference resulted in favor of acquisition value in connection with sale or purchase of subsidiaries under the control of the Group which do not result in a change in control was recognised as goodwill. Foreign currency transactions Functional currency Items included in the financial statements of each Group entity are measured using the currency that best reflects the economic substance of the underlying events and circumstances relevant to that entity. The consolidated financial statements are presented in Turkish Lira, which is the functional currency of Doğan Yayın Holding. Foreign currency transactions and balances Income and expenses arising in foreign currencies have been translated into TL at the exchange rates prevailing at the transaction date. Monetary assets and liabilities denominated in foreign currencies have been translated into TL at the exchange rates prevailing at the balance sheet dates. Exchange gains or losses arising from the settlement and translation of foreign currency items have been included in the consolidated statement of income.
138 - 139
DOĞAN YAYIN HOLDİNG ANNUAL REPORT 2012
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 2-BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued) 2.2 Summary of Significant Accounting Policies (Continued) Foreign currency transactions (Continued) Foreign Group companies The results of the Group undertakings using a measurement currency other than TL are first translated into Turkish lira by using the average exchange rate for the period. Assets and liabilities of such Group undertakings are translated into TL by using the closing rate at the balance sheet date. Differences arising on retranslation of the opening net assets of such Group undertakings and differences between the average and period-end rates are included in currency translation reserve as a separate item in the shareholders’ equity and recognized under total comprehensive income. A significant portion of the Group’s foreign operations are performed in Russia, Europe and Slovenia (“Russia and Eastern Europe (“EE”)) (Note 5). Foreign currencies and exchange rates at 31 December 2012 and 31 December 2011 are summarized below: Country Euro zone Russia Hungary Croatia Ukraine Romania Kazakhstan Belarus
Currency unit Euro Ruble Forint Kuna Grivna New Lei Tenge Belarusian Ruble
31 December 2012 2,3517 0,0587 0,0081 0,3113 0,2230 0,5319 0,0118 0,0002
31 December 2011 2,4438 0,0587 0,0078 0,3246 0,2364 0,5677 0,0127 0,0002
Segment reporting A business segment is a distinguishable component of an enterprise that is engaged in providing products or services and that is subject to risks and returns that are different from those of other business segments and consists of three main segments; “Publishing”, “Broadcasting” and “Other” based on management reporting. A geographical segment is a distinguishable component of an enterprise that is engaged in providing products or services within a particular economic environment and that is subject to risks and returns that are different from those of components operating in other economic environments and consists of three main divisions; “Turkey”, “Europe”, “Russia and EE”. Earning/(loss) per share Earning/ (loss) per share are determined by dividing net income/ (loss) by the weighted average number of shares that have been outstanding during the period concerned (Note 33). In Turkey, companies can increase their issued capital by making a pro-rata distribution of shares (“bonus shares”) to existing shareholders from retained earnings. For the purpose of earnings per share computations, such bonus share issuances are regarded as issued shares for all of the periods presented in the financial statements. Accordingly, weighted average number of shares used in earnings per share computations is derived by considering the retrospective effects of the issuances of the shares.
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 2-BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued) 2.2 Summary of Significant Accounting Policies (Continued) Discontinued operations Discontinued operations are components of an entity that either have been disposed of or represent a major part of an entity separately from the Group’s operations and cash flows. Operating results as of the Group has ceased its control over its disposal groups are presented separately under “discontinued operations” in the consolidated income statement. Prior period consolidated income statement is adjusted for comparative purposes and the results of discontinued operations are also classified under the “discontinued operations” account (Note 31). The Group has no discontinued operations for the period ended as of 31 December 2012. The results of discontinued operations also include profit/ (loss) from the related operation’s sale proceed and related tax expenses. Profit/ (loss) from the sale proceed is calculated as the difference between the carrying amount of net assets disposed of and sale price. Non-current assets held for sale Assets held for sale are operations that the Group disposes of or classified as available for sale and cash flows which can be treated as a part separately from the Group. Assets classified as held for sale by the Group and discontinued operations, are measured at the lower of the carrying amount of assets and liabilities related to discontinued operations and fair value less costs to sell (Note 31). Government grants Government grants are not recognised until there is reasonable assurance that the Group will comply with the conditions attaching to them and that the grants will be received. Government grants are recognised in profit or loss on a systematic basis over the periods in which the Group recognises as expenses the related costs for which the grants are intended to compensate. The Group has received the investment incentive certificate regarding the modernization of its property that is used in its media operations and it is exempt from the Customs Duty and VAT. Subsequent events In the case that events requiring a correction to be made occur subsequent to the balance sheet date, the Group makes the necessary corrections to the financial statements. In the case that events not requiring a correction to be made occur subsequent to the balance sheet date, those events are disclosed in the notes of consolidated financial statements.
140 - 141
DOĞAN YAYIN HOLDİNG ANNUAL REPORT 2012
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 2-BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued) 2.2 Summary of Significant Accounting Policies (Continued) Statement of cash flows In the statement of cash flows, cash flows during the period are classified under operating, investing or financing activities. The cash flows raised from operating activities indicate cash flows due to the Group’s media and other sales operations. The cash flows due to investing activities indicate the Group cash flows that are used for and obtained from investments (investments in property, plant and equipment and financial investments). The cash flows due to financing activities indicate the cash obtained from financial arrangements and used in their repayment. Cash and cash equivalents include cash and bank deposits and the investments that are readily convertible into cash and highly liquid with three months or less to maturity. 2.3 Critical Accounting Estimates and Assumptions 2.3.1 Critical accounting estimates and assumptions a) Estimated impairment of goodwill In accordance with the accounting policy mentioned in Note 2.2.11, goodwill is annually tested for impairment by the Group. Recoverable amount of cash generating units is measured based on the value in use calculations. Hürriyet, one of the subsidiaries of the Group, has performed goodwill impairment analysis in the context explained below for the periods ended 31 December 2012 and 2011. The recoverable amount of cash generating units is determined by calculating the amount that would be obtained through sales. These calculations are measured based on estimated cash flows after tax using financial budgets covering a five-year period. EBITDA estimates (budgeted interest, tax, depreciation and amortization, provision for impairment and gross margin before other non-operating expenses) have a significant role in these calculations. The EBITDA margin and discount rates used for the cash flows after five-year period are listed below:
TME
EBITDA margin%
Discount rate%
18,8
11,8
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 2-BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued) 2.3 Critical Accounting Estimates and Assumptions (Continued) 2.3.1 Critical accounting estimates and assumptions (Continued) a) Estimated impairment of goodwill (Continued) Hürriyet, one of the subsidiaries of the Group, has booked a provision for impairment on goodwill amounting to TL 18.106 (31 December 2011: TL 103.858) (Note 18). No impairment has been booked for intangible assets (31 December 2011: TL 9.157) (Note 17). If the discount rate applied to cash flow projections for the cash-generating units after tax is 1% more than the estimates of the Group management, additional impairment amounting to TL 51.648 (31 December 2011: TL 62.634 for the goodwill related with TME and intangible assets) would be recognized in the financial statements and profit before tax and non-controlling interests would decrease by TL 51.648 (31 December 2011: TL 62,634) in return. b) Vat amount subject to discount within the scope of law no: 6111 As of November 2011, the Group management has considered the VAT principle amounting to TL 454.281 imposed as a consequence of share exchanges and transfers recognized in the statutory accounts of Doğan TV Holding, D Yapım, Doğan Prodüksiyon ve Alp Görsel and restructured within the scope of Law no: 6111 in the year 2011 as input VAT through issuance of “recourse VAT invoice” by each entity who transfers the shares to the respective entity, sequentially with the amount of corresponding VAT imposed. In this context, input VAT amounting to TL 145.328, TL 222.662 and TL 86.291 have been recognized in the statutory records of D Yapım, Doğan Prodüksiyon and Alp Görsel, respectively. Based on the nature of the transaction and considering the precautionary principle, the Group management elects not to recognize the input VAT amounting to TL 454.281 as an asset in the consolidated financial statements as it will be used in future tax periods. Accordingly, where practible, input VAT that can be offset against the recourse VAT in the related taxation periods can be recognized in the statement of income in the respective periods (Note 28).
DOĞAN YAYIN HOLDİNG ANNUAL REPORT 2012
142 - 143
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 2-BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued) 2.3 Critical Accounting Estimates, Assumptions and Judgments (Continued) 2.3.1 Critical accounting estimates and assumptions (Continued) c) Probable liabilities related to the share sales agreement signed with Commerz-Film GmbH Doğan Yayın Holding sold 90.854.185 shares (“Axel shares”), 25% of the issued capital of Doğan TV Holding, to Commerz-Film GmbH (formerly registered as Dreiundvierzigste Media Vermögengsverwaltungsgesellschaft mbH), a 100% subsidiary of Axel Springer AG, for EUR 375.000 (TL 694.312, this amount is defined as “initial sales price”) on 2 January 2007. In accordance with the Share Sale Agreement (“Agreement”) that the initial sales price will be revised depending on the “initial public offering” (“IPO”) of the shares of Doğan TV Holding if available. Dates for the reassessment of the original selling price as set out in the agreement signed by Doğan Holding, Doğan Yayın Holding, Doğan TV Holding and Commerz-Film GmbH on 19 November 2009 have been postponed for a maximum period of 6 years without being subject to any condition. The related agreement dated 19 November 2009, was amended by a new agreement (Amendment agreement) signed with Doğan Holding, Doğan Yayın Holding, Doğan TV Holding, Commerz-Film GmbH and Hauptstadtsee 809. V V GmbH at 31 October 2011. Certain terms of the agreement dated 19 November 2009 as detailed below are effective as of 19 February 2010. - Axel Springer Group has sale options for 3,3% of its shares in Doğan TV Holding amounting to EUR 50.000 subsequent to January 2013 and the other 3,3% of its shares amounting to EUR 50.000 subsequent to January 2014 to Doğan Holding and Doğan Holding has the commitment to purchase these shares (“DTV Put Option I”). Axel Springer Group may exercise the sale options fully or partially. Payables will include interests’ payments of annual combined 12 months Euro Libor plus 100 base points as of 2 January 2007. Under the amendment agreement dated 31 October 2011, existing DTV Put Option I terms are revised and accordingly, the related terms require the put options exercisable for the periods subsequent to January 2013 and January 2014 in consideration of EUR 50.000 to cover only 33.843.238 (exact) shares in each period. The Amendment also allows Axel Springer another put option exercisable for 34.183.593 (exact) shares for the period subsequent to 2015 in consideration of EUR 50.000. - According to the agreement dated 19 November 2009, Axel Springer Group has option to sell some or all of “Axel shares” with the higher of EUR 4,1275 (exact) per share or a fair value to be determined by specific valuation techniques to Doğan Holding and Doğan Holding has a commitment to purchase these shares (“DTV Put Option II”). Payables will include interests’ payments of annual combined 12 months Euro Libor plus 100 base points as of 2 January 2007. In order to exercise this option, the following conditions must be met. -
Doğan TV Holding shares should not be offered to the public by 30 June 2017,
-
There should be direct or indirect control change over Doğan Holding, Doğan Yayın Holding or Doğan TV Holding,
-
There should be pledges or sequestration on the Doğan Yayın Holding’s assets that have significant unfavorable effects on the operations of Doğan Yayın Holding in addition to the existing ones.
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 2-BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued) 2.3 Critical Accounting Estimates, Assumptions and Judgments (Continued) 2.3.1 Critical accounting estimates and assumptions (Continued) c) Probable liabilities related to the share sales agreement signed with Commerz-Film GmbH (Continued) This time, with the amendment agreement dated 31 October 2011, EUR 4,1275 (exact) per share is updated as EUR 1,46269 (exact) because of the increase in the share capital of Doğan TV. As per the amendment agreement dated 31 October 2011, the Axel Springer Group has also requested two guarantee letters amounting to EUR 50.000 each in order to guarantee the liabilities of Doğan Holding under the “DTV Put Option I”. Two guarantee letters amounting to EUR 50.000 were given by Doğan Holding as at 10 February 2012. In addition, a third guarantee letter amounting to EUR 50.000 in consideration of 34.183.593 shares were given in the same period to be used as of January 2015. EUR 375.000, which is defined above as the initial sale price, can be amended based on the circumstances explained below. As per the agreement, the initial sale price may be subject to revision as the following depending on the “initial public offering” of Axel shares. In the event that Axel shares are offered to public by 30 June 2017 and if quarterly share value of “Axel Shares” in average subsequent to public offering is less than the amount of which will be calculated by adding interest over the original selling price (as measured by using an annual combined 12 months Euro Libor as of 2 January 2007), both the difference resulting from the quarterly share value of “Axel Shares” in average subsequent to public offering and the original selling price and the amount calculated by adding interest over the difference would be paid by Doğan Yayın Holding to the Axel Springer Group. In the event that Axel shares are offered to public by 30 June 2017 and if quarterly share value of “Axel Shares” in average subsequent to public offering is higher than the original selling price, both the difference resulting from the quarterly share value of “Axel Shares” in average subsequent to public offering and the amount of which will be calculated by adding interest over the original selling price (as measured by using an annual combined 12 months Euro Libor as of 2 January 2007) to the original selling price would be equally shared between the Axel Springer Group and Doğan Yayın Holding. In the event that Axel shares are not offered to public by 30 June 2017 and if the fair value of Doğan TV Holding, which will be calculated by using certain valuation techniques as at 31 December 2015, is less than the amount of which will be calculated by adding interest over the original selling price (as measured by using an annual combined 12 months Euro Libor as of 2 January 2007) to the original selling price, both the fair value of Doğan TV Holding, which will be calculated by using certain valuation techniques as at 31 December 2015, and the difference of the original selling price and the amount calculated by adding interest over the difference would be paid by Doğan Yayın Holding to the Axel Springer Group. If Doğan TV Holding’s shares are not listed by the end of 30 June 2017, the fair value based on the above-mentioned techniques would be reassessed, payments would be made to the Axel Springer Group in accordance with the related calculations, and Axel Springer Group’s call option of its entire or some portion of its shares to Doğan Holding and Doğan Holding’s put option for the related shares would continue to be in effect.
144 - 145
DOĞAN YAYIN HOLDİNG ANNUAL REPORT 2012
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 2-BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued) 2.3 Critical Accounting Estimates, Assumptions and Judgments (Continued) 2.3.1 Critical accounting estimates and assumptions (Continued) c) Probable liabilities related to the share sales agreement signed with Commerz-Film GmbH (Continued) In the event that Axel Springer group shares are offered to the public between 30 June 2017 and 30 June 2020, any positive difference between the initial public offering value and the initial sales price remeasured as of 31 December 2015 (it will be remeasured using the annual 12 months Euro Libor rates on annual compound basis starting from 2 January 2007) including interest calculated from the difference (it will be calculated using the annual Euro Libor rates on annual compound basis effective from 1 July 2017) will be apportioned equally, whereas no transaction will take place for any negative difference. In accordance with the agreement signed on 19 November 2009, Doğan Yayın Holding shall make a TL cash capital increase in Doğan TV Holding that corresponds to EUR 385.000, and as a result of the capital increase, Doğan TV Holding shares owned by Commerz-Film GmbH shall be diluted to 19,9% from 25%. In January 2010 and May 2010, the premium capital increase of Doğan TV Holding, was completed in two steps. As a result of the capital increase, the shares of Doğan Yayın Holding and Commerz-Film GmbH at Doğan TV Holding were 79,71% and 19,9% respectively. To measure fair value in order to see whether the Group would assume any financial liability in relation to the above transaction, cash flow projections in relation to periods covering 2013-2017 are prepared for Doğan TV Holding and the fair value of Doğan TV Holding has been calculated by discounting the above mentioned cash flow statements. Valuation projections are prepared for a 5 year-budget period. The critical estimates and assumptions related to cash flow projections prepared in TL within the scope of fair value determinations of Doğan TV are explained below. 2013-2017 Revenue increase in the budgeted period (1)
EBITDA margin (2) (1) (2)
%16,59 2012
2013
2014
2015
2016
2017
%16
%19
%26
%28
%30
%32
Compound annual growth rate (CAGR – compound annual growth rate) Earnings before interest, taxes, depreciation and amortization
Cash flow projections are discounted with 14% as the by rate of weighted average cost of capital (WACC). In accordance with the fair value calculated using the discount rates and cash flow projections mentioned above, there are not any financial liabilities arising from the Axel share acquisition, which represents 19,9% of Doğan TV Holding’s capital, by the Axel Springer Group.
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 2-BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued) 2.3 Critical Accounting Estimates, Assumptions and Judgments (Continued) 2.3.1 Critical accounting estimates and assumptions (Continued) c) Probable liabilities related to the share sales agreement signed with Commerz-Film GmbH (Continued) The Group is also responsible for any unprovisioned liability arising from tax assessments prior to the closing date of sale agreement as required in the Axel share acquisition and transfer “Agreement”. The effect of liability arising from Law no: 6111 in regards to Doğan TV Holding over the share value is compensated in proportion to the share capital to Commerz-Film GmbH. In this content, the payment made to Commerz-Film GmbH amounts to TL 165.523. The related payment has been made on 17 August 2011. Accordingly, Commerz-Film GmbH has participated in the capital increase of Doğan TV Holding from TL 456.554 to TL 1.288.328 through the usage of nominal values in the new share acquisition rights in the share of participation at nominal value. The capital increase has been registered on August 17, 2011. The share interest of Commerz-Film GmbH in Doğan TV Holding (19,9%) have remained still after the capital increase. Accordingly, the Group has indemnified TL 165.523 of liability arising from Doğan TV Holding A.Ş. and its subsidiaries’ undue and on trial tax liabilities in dispute under Law No: 6111 which represents the portion corresponding to Axel Springer Group’s current ownership percentage (19,9%). The related liability portion is not recognized under the non-controlling interests account in the accompanying financial statements prepared as of 31 December 2011. d) Useful lives of intangible assets Useful lives of some trademarks are expected to be infinite by the Group management. Where useful lives of related intangible assets are infinite (in case of 20 years), amortization of such intangible assets’ would increase by TL 13.468 (31 December 2011: TL 14.119) and profit before tax and non-controlling interests would decrease by TL 13.468 (31 December 2011: TL 14.119). Amortization is recognized by the Group considering the useful lives of trademarks, customer lists and internet domain names with definite useful lives disclosed in Note 2.2. If useful lives of trademarks, customer lists and internet domain names differ 10% from the management’s expectations, the effect over the financial statements would be as follows: -
if useful lives were 10% higher, amortization would decrease by TL 1.224 and profit before tax and non-controlling interests would increase by TL 1.224 (31 December 2011: TL 1.816); or
-
if useful lives were 10% lower, amortization would increase by TL 1.496 and profit before tax and non-controlling interests would decrease by TL 1.496 (31 December 2011: TL 2.219).
DOĞAN YAYIN HOLDİNG ANNUAL REPORT 2012
146 - 147
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 2-BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued) 2.3 Critical Accounting Estimates, Assumptions and Judgments (Continued) 2.3.2 Critical accounting judgments Prepaid phone card (prepaid minutes) sales related with mobile telecommunication services and newspaper and magazine sales (excluding transactions with related parties and newspapers distributed through subscription system) are carried at gross value in the consolidated financial statements by the Group. Management believes that the decision to record revenue gross versus net is a matter of professional judgment that is dependent upon the relevant facts and circumstances. The Group evaluated the following factors and indicators in coming to the conclusion. •
The Group has the option to determine the selling price, within the existing economic limitations,
•
General inventory risk of goods mentioned above belongs to the Group. The Group purchases newspapers and magazines from suppliers and sells them to its dealers through its distribution network. The Group returns unsold newspapers and magazines from dealers to the original supplier. General inventory risk is about approximately a week for newspaper and magazine sales,
•
The Group has the collection risk associated with the transaction.
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 3-BUSINESS COMBINATIONS Current period business combinations The details of business combinations for the period ended 31 December 2012 are as follows: Doğan TV Holding – Eko TV Doğan TV Holding has terminated Eko TV joint venture agreement signed with Turner as of 14 June 2012 without any compensation. Following the termination, Eko TV has been accounted as a subsidiary and ceased to be a joint venture of the Group as at 1 July 2013 without any compensation transfer. IFRS 3 requires acquirers to remeasure its previously held equity interest at fair value and recognize the resulting gain or loss, if any, in profit or loss. The Group has completed the remeasurement procedures of Eko TV shares as of 31 December 2012. The details of the remeasurement are summarized below: 30 June 2012 Cash and cash equivalents Current assets Non-current assets Current liabilities
110 16.668 365 (3.222)
Group’s share in net assets before acquisition
13.921
Goodwill recognized before acquisition Total carrying amount before remeasurement
33.881 47.802
Total fair value of net assets of Eko TV Group’s ownership rate Fair value of net assets attributed to the Group Decrease in carrying amount after remeasurement recognised as other expense
59.475 %75,03 44.630 3.172
Also, the Group has completed the purchase of 19,98% shares of Eko TV as of 6 September 2012 for a consideration of 4.331 TL. After these transactions, the share and voting rights of the Group in Eko TV increased to 95,01%. TL 624 loss as a result of this transaction is journalized under equity since there is no change in controlling party in accordance with IAS 27 (revised). Prior period business combinations None.
148 - 149
DOĞAN YAYIN HOLDİNG ANNUAL REPORT 2012
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 4-JOINT VENTURES Joint ventures of the Group, registered countries, nature of their businesses and business and geographic segments are summarized as follows:
Joint ventures Doğan Burda Dergi Yayıncılık ve Pazarlama A.Ş. (“Doğan Burda”) Doğan ve Egmont Yayıncılık ve YapımcılıkTicaret A.Ş. (“Doğan Egmont”) Dergi Pazarlama Planlama ve Ticaret A.Ş. (“DPP”) DB Popüler Dergiler Yayıncılık A.Ş. (“DB Popüler”) Ultra Kablolu Televizyon ve Telekomünikasyon Sanayi ve Ticaret A.Ş. (“Ultra Kablolu”) Birey Seçme ve DeğerlendirmeDanışmanlık Ltd. Şti (“Birey İK”) Katalog Yayın ve Tanıtım Hizmetleri A.Ş. (“Katalog”) Tipeez İnternet Hizmetleri A.Ş. (“Tipeez”) ASPM Holding B.V. OOO Autoscout24
Registered country
Geographic segment
Nature of business
Business segment
Joint venture partner
Turkey
Turkey
Publishing
Burda GmbH
Turkey Turkey Turkey
Turkey Turkey Turkey
Magazine publishing Book and magazine publishing Planning Magazine publishing
Publishing Publishing Publishing
Egmont Burda GmbH Burda GmbH
Turkey
Turkey
Telecommunication Broadcasting
Turkey Turkey Turkey Netherlands Russia
Turkey Turkey Turkey Europe Russia
Internet services Guide publishing Internet services Investment Internet publishing
Koç Holding A.Ş. Doğan Portal ve Elektronik Ticaret A.Ş. Seat Pagine Gialle SPA Tweege Holdings LP Autoscout24 GmBH Autoscout24 GmBH
Other Publishing Publishing Publishing Publishing
Joint ventures of Doğan Yayın Holding, registered countries, nature of their businesses and business and geographic segments at 31 December 2012 and 31 December 2011 are summarized as follows:
Joint-ventures Doğan Burda Doğan Egmont DPP DB Popüler Ultra Kablolu (1) Birey İK Katalog (2) Tipeez ASPM Holding B.V. OOO Autoscout24 (3) TNT (4) (4) (1)
(2)
(3)
Proportion of voting power held by Doğan Yayın Holding and its subsidiaries (%) 31 December 31 December 2012 2011 44,89 50,00 46,00 44,87 50,00 50,00 50,00 30,00 37,88 37,88 -
44,89 50,00 46,00 44,87 50,00 50,00 50,00 30,00 36,28 36,28 75,04
Proportion of effective interest (%) 31 December 31 December 2012 2011 44,89 50,00 45,97 44,87 50,00 46,38 50,00 19,97 25,21 25,21 -
Operations have been terminated as of November, 2006. The company is included in scope of consolidation. Operations have been terminated as of September, 2009. The company is included in scope of consolidation. The related joint venture is in the liquidation process as of February 19, 2013. As of 6 September 2012, Group Management has completed the share purchase transaction for the 19,98% shares of TNT which was accounted as joint venture at 31 December 2011. In the current period, the Company has been included as subsidiary in the scope of consolidation.
44,89 50,00 45,89 44,87 50,00 46,38 50,00 19,97 24,15 24,15 59,82
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 4-JOINT VENTURES (Continued) The aggregate amounts of current assets, non-current assets, current liabilities, non-current liabilities and equity of joint-ventures included in the consolidated financial statements of Doğan Yayın Holding as of 31 December 2012 and 31 December 2011 by using the proportionate consolidation method are as follows: Balance sheets:
31 December 2012
31 December 2011
Current assets Non-current assets
36.447 13.450
50.436 14.154
Total assets
49.897
64.590
17.942 4.106
20.679 1.603
Total liabilities
22.048
22.282
Equity
27.849
42.308
Total liabilities and equity
49.897
64.590
Current liabilities Non-current liabilities
The aggregate amounts of income and expenses of joint-ventures included in the consolidated financial statements of Doğan Yayın Holding for the periods ended 31 December 2012 and 2011 by using the proportionate consolidation method are as follows: 1 January31 December 2012
1 January31 December 2011
41.546
36.216
(35.434) (1.608)
(32.129) (1.651)
4.504
2.436
2.638 (2.574)
2.502 (3.601)
Profit before income taxes
4.568
1.337
Current income tax charge Deferred tax income
(1.572) 308
(1.258) 245
Net profit for the period
3.304
324
Statements of income:
Gross profit General administrative and marketing sales and distribution expenses (-) Other operating income/ (expenses), net Operating profit Financial income Financial expenses (-)
150 - 151
DOĞAN YAYIN HOLDİNG ANNUAL REPORT 2012
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 5-SEGMENT REPORTING The Group has two reporting segments (Geographical & Business) due to diversity of its operations and geographical extensity of its consolidated companies. “Geographical” segment reporting is categorized into “Turkey”, “Europe” and “Russia and Eastern Europe” based on the intensity of geographical operations and “Business” segment reporting is categorized into “publishing”, “broadcasting”, “retail” and “other” based on the businesses of consolidated entities. In 16 January 2012, as a result of shares of Doğan Müzik Kitap Mağazacılık ve Pazarlama A.Ş (“DMK”), being sold to Doğan Holding, retail segment is decided not to be managed as a separate reporting segment in the consolidated financial statements prepared as of 31 December 2012. In the comparative consolidated financial statements prepared as of 31 December 2011 and 31 December 2012, operating results of DMK is reclassified to “discontinued operations”. a) External revenues: The details of the Group’s external revenues for the periods ended 31 December 2012 and 2011 by business and geographical segments are follows:
Turkey
1 January- 31 December 2012 Russia and Europe EE
Total
Publishing Broadcasting Other
1.142.856 961.743 55.655
50.280 107.856 -
207.199 -
1.400.335 1.069.599 55.655
Total
2.160.254
158.136
207.199
2.525.589
Turkey
1 January-31 December 2011 Russia and Europe EE
Total
Publishing Broadcasting Other
1.084.307 840.324 60.856
55.365 67.993 -
228.975 -
1.368.647 908.317 60.856
Total
1.985.487
123.358
228.975
2.337.820
As explained in Note 2.3.2 “Critical accounting judgments”, the Group presents sales of prepaid phone cards and newspaper and magazine at gross. The prepaid phone card sales (other segment) and newspaper and magazine sales (publishing segment) for the period ended 31 December 2012 amounted to TL 45.282 (31 December 2011: TL 56.112) and TL 183.367 (31 December 2011: TL 148.401), respectively.
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 5-SEGMENT REPORTING (Continued) b) Segmental analysis for the period 1 January – 31 December 2012 The segmental analysis for the continued operations of the Group is as follows:
Publishing
Broadcasting (2)
Other (2)
Intersegment eliminations
Total
External revenues (Note 25) Inter segment revenues
1.400.335 55.764
1.069.599 20.437
55.655 4.748
-
2.525.589 80.949
Total revenues
1.456.099
1.090.036
60.403
-
2.606.538
External revenues (Note 25) Inter segment revenues
1.400.335 55.764
1.069.599 20.437
55.655 4.748
-
2.525.589 (80.949)
Sales Cost of sales (-) (1)
1.456.099 (994.287)
1.090.036 (770.793)
60.403 (43.861)
(80.949) 53.284
2.525.589 (1.755.657)
461.812
319.243
16.542
(27.665)
769.932
(208.288) (198.503) 140.444
(103.454) (105.626) 32.027
(28.924) 926
21.300 5.098 (4.061)
(290.442) (327.955) 169.336
195.465
142.190
(11.456)
(5.328)
320.871
Share of profit/ (loss) on investments accounted for by using the equity method Financial income Financial expenses (-)
(623) 135.196 (129.544)
89.982 (96.406)
(332) 28.148 (30.084)
(712) 5.876
(955) 252.614 (250.158)
(Loss)/ profit before income taxes
200.494
135.766
(13.724)
(164)
322.372
Current income tax charge Deferred tax income/ (charge)
(32.267) 4.884
(46.744) 14.910
(1.138) 10.594
-
(80.149) 30.388
173.111
103.932
(4.268)
(164)
272.611
Gross profit/ (loss) Marketing, sales and distribution expenses General administrative expenses Other operating income/(expenses), net Operating (loss)/ profit
Profit/ (loss) for the period
(1)
(2)
Cost of sales and segment information differ as the effect of intra-segment adjustments are presented at gross amounts (Note 25). As of 30 April 2012, Doğan İletişim and Doğan TV Dijital companies have been merged under the legal entity, Doğan TV Dijital and due to the merging, financial results of Doğan İletişim which were previously followed under other segment are reported under broadcasting segment. For comparative purposes, segment reporting note for the period ended 31 December 2011 are restated, accordingly.
152 - 153
DOĞAN YAYIN HOLDİNG ANNUAL REPORT 2012
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 5-SEGMENT REPORTING (Continued) b) Segmental analysis for the period 1 January – 31 December 2011 The segmental analysis for the continued operations of the Group is as follows:
Publishing
Broadcasting (2)
Other (2)
Intersegment eliminations
Total
External revenues (Note 25) Inter segment revenues
1.368.647 46.682
908.317 26.024
60.856 24.140
-
2.337.820 96.846
Total revenues
1.415.329
934.341
84.996
-
2.434.666
External revenues (Note 25) Inter segment revenues
1.368.647 46.682
908.317 26.024
60.856 24.140
(96.846)
2.337.820 -
Sales Cost of sales (-) (1)
1.415.329 (951.905)
934.341 (676.600)
84.996 (61.226)
(96.846) 40.957
2.337.820 (1.648.774)
Gross profit/ (loss)
463.424
257.741
23.770
(55.889)
689.046
Marketing, sales and distribution expenses General administrative expenses Other operating income/(expenses), net
(212.407) (221.596) (170.772)
(98.767) (81.035) (903.787)
(652) (45.128) (11.152)
28.150 26.264 (2.205)
(283.676) (321.495) (1.087.916)
Operating loss
(141.351)
(825.848)
(33.162)
(3.680)
(1.004.041)
Share of loss on investments accounted for by using the equity method Financial income Financial expenses (-)
(268) 122.589 (209.591)
94.127 (239.467)
(297) 50.409 (120.608)
(7.872) 11.112
(565) 259.253 (558.554)
(Loss)/ profit before income taxes
(228.621)
(971.188)
(103.658)
(440)
(1.303.907)
(14.870) 12.664
(57.434) (31.294)
(570) (145)
-
(72.874) (18.775)
(230.827)
(1.059.916)
(104.373)
(440)
(1.395.556)
Current income tax charge Deferred tax income/ (charge) Profit/ (loss) for the period
(1)
(2)
Cost of sales and segment information differ as the effect of intra-segment adjustments are presented at gross amounts (Note 25). As of 30 April 2012, Doğan İletişim and Doğan TV Dijital companies have been merged under the legal entity, Doğan TV Dijital and due to the merging, financial results of Doğan İletişim which were previously followed under other segment are reported under broadcasting segment. For comparative purposes, segment reporting note for the period ended 31 December 2011 are restated, accordingly.
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 5-SEGMENT REPORTING (Continued) c) Segment assets: The details of segment assets in terms of business and geographical segments at 31 December 2012 and 31 December 2011 are as follows: Analysis according to business segments:
31 December 2012
31 December 2011
Publishing Broadcasting Other
1.825.007 1.503.518 93.220
1.801.710 1.501.615 206.005
Segment Assets (1)
3.421.745
3.509.330
570.949 (55.511)
7.709 1.224.316 (50.069)
3.937.183
4.691.286
31 December 2012
31 December 2011
Turkey Europe Russia and EE
2.584.330 179.417 654.139
2.582.284 266.630 705.166
Segment Assets (1)
3.417.886
3.554.080
570.949 (51.652)
7.709 1.224.316 (94.819)
3.937.183
4.691.286
Associates (Note 13) Unallocated assets Less: intersegment eliminations and reclassifications Total assets Analysis according to geographical segments:
Associates Unallocated assets Less: intersegment eliminations and reclassifications Total assets (1)
Segment assets mainly comprise of operating assets. The group’s assets other than segment assets comprise of cash and cash equivalents (Note 6), short-term financial investments (Note 7) and deferred tax assets (Note 32).
154 - 155
DOĞAN YAYIN HOLDİNG ANNUAL REPORT 2012
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 5-SEGMENT REPORTING (Continued) d) Segment liabilities: The analysis of segment liabilities in terms of business and geographical segments at 31 December 2012 and 31 December 2011 is as follows: Analysis according to business segments:
31 December 2012
31 December 2011
Publishing Broadcasting Other
308.765 261.059 25.926
470.944 1.035.932 78.081
Segment Liabilities (1)
595.750
1.584.957
Unallocated liabilities Less: intersegment eliminations and reclassifications
1.959.086 (38.120)
2.082.225 (55.306)
Total liabilities
2.516.716
3.611.876
31 December 2012
31 December 2011
Turkey Europe Russia and EE
475.518 110.215 23.548
1.389.524 216.368 18.578
Segment Liabilities (1)
609.281
1.624.470
Unallocated liabilities Less: intersegment eliminations and reclassifications
1.959.086 (51.651)
2.082.225 (94.819)
Total liabilities
2.516.716
3.611.876
Analysis according to geographical segments
(1)
The Group’s liabilities excluding reportable segment liabilities comprise of short and long term borrowings (Note 8), net income for the period, income tax payable and deferred tax liability (Note 32).
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 5-SEGMENT REPORTING (Continued) e) Depreciation and amortization charges and capital expenditures: The analysis of depreciation and amortization charges in terms of business and geographical segments for the periods ended 31 December 2012 and 2011 is as follows: Analysis according to business segments: 1 January31 December 2012
1 January31 December 2011
82.753 95.574 2.175
91.938 106.665 8.251
180.502
206.854
1 January31 December 2012
1 January31 December 2011
Turkey Europe Russia and EE
133.290 31.276 15.936
166.191 33.732 6.931
Total
180.502
206.854
Publishing Broadcasting Other Total Analysis according to geographic segments:
The analysis of capital expenditure (acquisition of tangible and intangible assets) in terms of business and geographical segments for the periods ended 31 December 2012 and 2011 is as follows: Analysis according to business segments: 1 January31 December 2012
1 January31 December 2011
Publishing Broadcasting Other
98.885 180.783 267
58.592 164.412 14.012
Total
279.935
237.016
1 January31 December 2012
1 January31 December 2011
Turkey Europe Russia and EE
259.268 9.526 11.141
222.699 11.769 2.548
Total
279.935
237.016
Analysis according to geographic segments:
156 - 157
DOĞAN YAYIN HOLDİNG ANNUAL REPORT 2012
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 5-SEGMENT REPORTING (Continued) f) Other non-cash expenses, (net): The analysis of other non-cash expenses, (net), in terms of business segments for the periods ended 31 December 2012 and 2011 is as follows:
Publishing Provision for doubtful receivables (Note 10,23) Provision for impairment on goodwill (Note 18) Interest expense accruals Provision for employment termination benefits (Note 22) Provision for lawsuits (Note 20) Provision for unused vacation liability (Note 23) Provision for impairment on intangible assets (Note 17) Provision for impairment on inventories (Note 12) Total
12.322 18.106 9.044 10.826 3.842 5.471 243 59.854
Publishing Provision for tax liability in dispute regarding 6111 law (Note 23) Provision for tax base regarding 6111 law (Note 23) Provision for impairment on goodwill (Note 18) Provision for doubtful receivables (Note 10, 23) Provision for impairment on intangible assets (Note 17) Provision for employment termination benefits (Note 22) Provision for unused vacation liability (Note 23) Interest expense accruals Provision for impairment on property, plant and equipment (Note 16) Provision for lawsuits Provision for impairment on inventories (Note 12) Total
15.025 103.895 12.685 9.157 15.963 12.343 6.857 10.821 47 (1.133) 185.660
1 January – 31 December 2012 Broadcasting Other 25.670 3.172 7.045 2.157 6.632 2.935 1.868 1.048 50.527
Total
102 40 86 508 (696) 40
38.094 21.278 16.129 13.069 10.474 8.914 1.868 595 110.421
1 January – 31 December 2011 Broadcasting Other
Total
655.560 18.765 24.655 4.326 2.653 3.235 (4.165) (697) 704.332
8.287 4.547 141 991 2.368 1.019 17.353
655.560 23.312 103.895 35.997 33.812 20.430 15.987 12.460 10.821 (3.099) (1.830) 907.345
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 6-CASH AND CASH EQUIVALENTS The details of cash and cash equivalents at 31 December 2012 and 31 December 2011 are as follows: 31 December 2012
31 December 2011
Cash Banks - Time deposits - Demand deposits Other cash and cash equivalents
1.538
3.302
406.209 48.705 31.781
971.828 51.346 35.168
Total
488.233
1.061.644
31 December 2012
31 December 2011
Demand Up to 3 months
82.024 406.209
89.816 971.828
Total
488.233
1.061.644
The maturity analysis of cash and cash equivalents at 31 December 2012 and 31 December 2011 is as follows:
The time deposits of the Group are mainly composed of USD, EUR and TL and the effective interest rates of USD, EUR and TL denominated time deposits are between 0,10% and 5,35% (31 December 2011: 0,5% and 6%), 0,25% and 3,45% (31 December 2011: 1% and 4,5%) and 5,00% and 12,30% (31 December 2011: 5,6% and 12,6%), respectively. Cash and cash equivalents amounting to TL 30.963 (31 December 2011: TL 35.133) at 31 December 2012 comprise of credit card slip receivables and TL 818 (31 December 2011: TL 35) of blocked deposits. Cash and cash equivalents disclosed in the consolidated statements of cash flows for the periods ended 31 December 2012, 31 December 2011 and 31 December 2010 are as follows: 31 December 2012
31 December 2011
31 December 2010
Cash and cash equivalents Less: accrued interest
488.233 (18.963)
1.061.644 (1.275)
240.359 (550)
Cash and cash equivalents
469.270
1.060.369
239.809
158 - 159
DOĞAN YAYIN HOLDİNG ANNUAL REPORT 2012
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 7-FINANCIAL INVESTMENTS The details of short-term financial investments at 31 December 2012 and 31 December 2011 are as follows: Short-term financial investments: 31 December 2012
31 December 2011
Time deposit
-
102.915
Total
-
102.915
There isn’t any financial investment as of 31 December 2012. As of 31 December 2011, average effective interest rate of USD denominated time deposits is 5,35% and their maturity dates are longer than 3 months. The details of long-term financial investments at 31 December 2012 and 31 December 2011 are as follows: Long-term financial investments: 31 December 2012
Share%
31 December 2011
Share%
787 258 150 118 182
-
258 150 187
-
Anten Teknik Hizmetler ve Verici Tesis İşletme Anonim Şirketi Coats İplik Sanayi Anonim Şirketi B2C Prodüksiyon Bilişim ve Emlak Danışmanlığı Sanayi Ticaret A.Ş. Hür Servis Sosyal Hizmetler ve Ticaret A.Ş. Other Total
1.495
595
NOTE 8 – FINANCIAL BORROWINGS The details of financial borrowings at 31 December 2012 and 31 December 2011 are as follows: Short-term financial borrowings:
31 December 2012
31 December 2011
686.481 295.674 216.190 34.193 8.194
340.340 401.017 31.763 8.936
1.240.732
782.056
31 December 2012
31 December 2011
Long term bank borrowings Financial borrowings related with options Interest bearing payables to suppliers Finance lease borrowings
564.370 6.929 14.494
860.929 215.135 34.994 21.978
Total
585.793
1.133.036
Short term bank borrowings Short-term portion of long-term bank borrowings Financial borrowings related with options Interest bearing payables to suppliers Finance lease borrowings Total Long-term financial borrowings:
Total long-term bank borrowings
298.200 13.947
564.370
531.571 32.799
4,13-6,12 1,80-5,11
264.269 31.405 295.674
Long-term bank borrowings: USD denominated bank borrowings EUR denominated bank borrowings
148.249 13.354
169.850 454.652 61.979 686.481
TL
982.155
2,65-5,85 1,33-5,11
Short-term portion of long-term bank borrowings: USD denominated bank borrowings EUR denominated bank borrowings Sub-total
169.850 255.050 26.355
31 December 2012 Original foreign currency
Total short-term bank borrowings
5,75-10,40 4,45-6,40 4,50-5,78
Short-term bank borrowings TL denominated bank borrowings USD denominated bank borrowings EUR denominated bank borrowings Sub-total
Interest rate per annum (%)
Details of the bank borrowings as of 31 December 2012 and 31 December 2011 are as follows:
NOTE 8-FINANCIAL BORROWINGS (Continued)
2,64-7,00 2,52-6,90
2,64-7,00 2,52-7,60
12,25-15,50 4,50-6,75 5,79-9,69
Interest rate per annum (%)
(Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012
DOĞAN YAYIN HOLDİNG A.Ş.
445.102 8.256
205.489 5.266
105.077 93.500 24.000
31 December 2011 Original foreign currency
860.929
840.753 20.176
741.357
388.148 12.869 401.017
105.077 176.612 58.651 340.340
TL
160 - 161
DOĞAN YAYIN HOLDİNG ANNUAL REPORT 2012
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 8-FINANCIAL BORROWINGS (Continued) The redemption schedule of long-term bank borrowings is as follows: 31 December 2012
31 December 2011
2013 2014 2015 2016 2017 and after
458.789 102.775 1.489 1.317
296.337 384.451 180.141 -
Total
564.370
860.929
31 December 2012
31 December 2011
1.545.137 1.388
1.600.526 1.760
1.546.525
1.602.286
The redemption schedule of bank borrowings at 31 December 2012 and 31 December 2011 is as follows:
Up to 6 months 6 to 12 months Total
Carrying value of the financial borrowings is considered to approximate their fair value since discount effect is not material. Group borrows loans on fixed and floating interest rates. At 31 December 2012, bank borrowings with floating interest rates amounted to TL 1.147.627 (31 December 2011: TL 1.074.973). As of 31 December 2012, the floating rate bank borrowings denominated in USD, which represent a significant portion of total bank borrowings of the Group, have interest rates fluctuating between 3 months Libor+2,4 and 6 months Libor+4,25 (31 December 2011: Between 3 months Libor+2,4% and 6 months Libor+6,1%). Commitments and financial terms about borrowings The financial conditions against the bank regarding the long-term bank borrowing of Hürriyet, one of the subsidiaries of Doğan Yayın Holding, to be used in the purchasing of TME shares, have been met. According to these conditions, the ratio of net debt amount to EBITDA and shareholders’ equity identified by the bank for the last 12 months consolidated financial statements have remained below a certain level. Also, the Group and Hürriyet have not entered any merger, split, restructuring activities that can change the partnership structure or main business line of TME. The related loan has been paid and closed at January 4, 2013. Hürriyet has given guarantees amounting to 33.649.091 (exact) shares, which represents 67,3% of TME, one of the subsidiaries of the Group, to financial institutions in regards to long term loans (31 December 2011: 33.649.091 (exact) shares). These guarantees have been taken back subsequent to the payment of the remaining installment of the loan made at January 4, 2013.
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 8-FINANCIAL BORROWINGS (Continued) Commitments and financial terms about borrowings (Continued) OOO Pronto Moscow has restructured its bank loan classified under the long-term financial liabilities as of 31 December 2010 amounting to USD 70.000, as at 15 April 2011. Under the loan restructuring agreement, Doğan Holding’s USD 70.000 of deposit amount has been blocked as a guarantee against the related loan. OOO Pronto Moscow has restructured its bank loan in January 2013 classified under the long-term financial liabilities as of 31 December 2012 amounting to USD 70.000. Also, interest rate applied has decreased to 6,25% from 6,40% as of 31 December 2012. Financial borrowings related with options Doğan Gazetecilik’s, one of the subsidiaries of Doğan Yayın Holding, 22.000.000 shares each having par value of TL 1, which correspond to 22% of Doğan Gazetecilik’s issued capital amounting to TL 78.000, are sold to Deutsche Bank AG during the capital raise to TL 100.000 on 19 November 2007 in the ISE Wholesale Market in consideration of USD 4,0 (exact) per share (initial price) (TL 4,73 (exact)), by putting a restriction over the existing shareholders’ share purchase rights. There are put and call option agreements between Doğan Yayın Holding and Deutsche Bank AG upon the shares of Doğan Gazetecilik. According to the call option agreement, Doğan Yayın Holding has the call option from Deutsche Bank AG for 21.945.000 shares of Doğan Gazetecilik, and according to the put option agreement, Deutsche Bank AG has the put option to Doğan Yayın Holding for 23.100.000 shares of Doğan Gazetecilik. Maturities of both agreements are 5 years 3 months and end at 19 February 2013. It is possible to use the call option after 19 November 2010 on any given day. As of 20 February 2013, Deutsche Bank AG has used its “call” option right and sold 22% shares of Doğan Gazetecilik to Doğan Yayın Holding in consideration of USD 122.323. Since Doğan Yayın Holding has a liability of giving another entity cash or another financial asset (in the case the put option is exercised by Deutsche Bank AG) as a result of the put option agreement mentioned above, USD 88.000 is presented as a financial liability in the consolidated financial statements as of 31 December 2012. As per the put option agreement, the put option exercise price is calculated by considering the initial price and the interest rate of 6,46%.
162 - 163
DOĞAN YAYIN HOLDİNG ANNUAL REPORT 2012
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 8-FINANCIAL BORROWINGS (Continued) Share pledges As of the balance sheet date, 11,3% and 15% shares of Doğan Yayın Holding (226.354.060 (exact) and 300.000.000 (exact) shares), 13,3% shares of Hürriyet (73.200.000 (exact) shares), 20,87% shares of Kanal D (10.747.548 (exact) shares) and 67,3% shares of TME (33.649.091 (exact) shares) were given as pledges to financial institutions in respect of the long-term financial borrowings of the Group. As of 28 November 2012, pledge on shares of Kanal D have decreased to 20,87% (10.747.548 (exact) shares) from 49%. Deutsche Bank AG has used its “call” option right as of 19 February 2013 and sold 22% shares of Doğan Gazetecilik to Doğan Yayın Holding in consideration of USD 122.323 and as a result of this transaction, 11,3% shares of Doğan Yayın Holding (226.354.060 (exact) shares) and 13,3% shares of Hürriyet (73.200.000 (exact) shares) have been repurchased. In addition, 67,3% shares of TME (33.649.091 (exact) shares) have been repurchased as a result of full payment of participation loan borrowed as at 4 January 2013 in relation to the acquisition of TME. Finance lease borrowings The Group acquired property, plant and equipment through finance leases. As of 31 December 2012, total short and long-term lease payment commitments of the Group relating to such lease agreements amount to TL 22.688 (31 December 2011: TL 30.914). The redemption schedule of long-term financial lease borrowings at 31 December 2012 and 31 December 2011 is as follows: Long-term financial lease liabilities: 2013 2014 2015 and after Total
31 December 2012
31 December 2011
8.130 6.364
7.375 8.054 6.549
14.494
21.978
Interest bearing payables to suppliers Interest bearing payables to suppliers are related to the machinery and equipment purchases of Hürriyet, one of the subsidiaries of Doğan Yayın Holding. Interest rates of these short and long-term payables in USD, EUR, CHF are 0,91%, 1,22% and 1,07%, respectively (31 December 2011: USD 0,9%, EUR 2,1%, CHF 1,7%). The maturity analysis of long-term interest bearing payables to suppliers at 31 December 2012 and 31 December 2011 is as follows:
2013 2014 and after Total
31 December 2012
31 December 2011
6.929 6.929
27.794 7.200 34.994
The Group’s short-term and long-term financial borrowings to suppliers issued at variable interest rates are amounting to TL 34.143 (31 December 2011: TL 31.763) TL 6.929 (31 December 2011: TL 34.994), respectively as of 31 December 2012.
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 8-FINANCIAL BORROWINGS (Continued) Interest bearing payables to suppliers (Continued) Interest bearing payables to suppliers have floating interest rates. The exposure of the Group’s long-term financial borrowings to suppliers to interest rate changes and the contractual repricing dates are as follows: 31 December 2012
31 December 2011
41.122 41.122
66.757 66.757
6 months and less Total
The fair values of short-term and long-term financial borrowings to suppliers are considered to approximate their carrying values as the effect of discount is not material. Allocation of loans with fixed and floating interest rates of the Group as of 31 December 2012 and 2011 are as follows:
Loans with fixed interest rates Loans with floating interest rates Total
31 December 2012
31 December 2011
637.776 1.147.627
773.362 1.074.973
1.785.403
1.848.335
NOTE 9-OTHER FINANCIAL LIABILITIES The details of other short term financial liabilities, which are further discussed in Note 20 related with call options at 31 December 2012 and 31 December 2011, are as follows: 31 December 2012
31 December 2011
18.207 18.207
66.438 66.438
Short-term trade receivables
31 December 2012
31 December 2011
Trade receivables Notes and cheques receivable Other
840.716 24.645 2.011
786.766 26.646 2.571
Sub-total Less: unearned financial income due to sales with maturity Less: provision for doubtful receivables
867.372 (4.533) (198.155)
815.983 (12.570) (174.663)
Total
664.684
628.750
Financial liabilities due to call options Total NOTE 10-TRADE RECEIVABLES AND PAYABLES The details of trade receivables and payables at 31 December 2012 and 31 December 2011 are as follows:
In the publishing segment of the Group, the average maturity of not overdue trade receivables is between 70 to 98 days as of the balance sheet date (31 December 2011: 67-91 days). The maturities of trade receivables of the Group vary and the discount rate of trade receivables calculated as annual compound is 10,03% (31 December 2011: 10%-14,4%).
164 - 165
DOĞAN YAYIN HOLDİNG ANNUAL REPORT 2012
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 10-TRADE RECEIVABLES AND PAYABLES (Continued) In the broadcasting segment of the Group, the average maturity of not overdue trade receivables is 92 days as of the balance sheet date (31 December 2011: 90 days). Discount rate of trade receivables calculated as annual simple is 10,03% (31 December 2011: 12%). The movements of provision for doubtful receivables for the periods ended 31 December 2012 and 2011 are as follows: 2012
2011
1 January Provision booked from continued operations (Note 5, 28) Acquisition of subsidiary Collections from continued operations Reversal of provisions from disposal of subsidiary Currency translation differences Reversal of provision from continued operations Provision booked from discontinued operations Reversal of provision from discontinued operations
(174.663) (38.180) (306) 14.226 684 84 -
(175.529) (34.431) 15.834 (1.588) 2.734 (4.027) 22.344
31 December
(198.155)
(174.663)
Aging analysis of trade receivables As of 31 December 2012, trade receivables of TL 136.548 (31 December 2011: TL 196.233) were past due but not impaired. The Group does not foresee any collection risk for these overdue receivables due to sector dynamics and circumstances (Note 35). As of 31 December 2012, the Group has letters of guarantee, guarantee notes, guarantee cheques and mortgages amounting to TL 42.023 (31 December 2011: TL 58.753) related to trade receivables amounting to TL 664.684 (31 December 2011: TL 628.750) (Note 35). The guarantees received for the total trade receivables of the Group amounting to TL 664.684 as of 31 December 2012 (31 December 2011: TL 628.750) consist of bank guarantee letter amounting to TL 1.823 (31 December 2011: TL 887), bails and mortgages amounting to TL 34.234 (31 December 2011: TL 47.415) and cheques and bonds amounting to TL 5.966 (31 December 2011: TL 10.451). Bank guarantee letter amounting to TL 193, bails and mortgages amounting to TL 17.589 and cheques and bonds amounting to TL 4.320 are received for the past due but not impaired receivables (31 December 2011: bank guarantee letters amounting to TL 115, bails and mortgages amounting to TL 8.490, cheques and bonds amounting to TL 7.805) (Note 35). Short-term trade payables:
31 December 2012
31 December 2011
Trade payables Notes and cheques payables Other payables Less: deferred financial expense due to purchases with maturity
250.839 6.659 265 (135)
387.735 2.920 236 (4.259)
Total
257.628
386.632
The average maturity of not overdue trade payables is between 35 to 58 days as of 31 December 2012 (31 December 2011: 48 to 53 days).
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 11-OTHER RECEIVABLES AND PAYABLES The details of other receivables and payables at 31 December 2012 and 31 December 2011 are as follows: Other current receivables:
31 December 2012
31 December 2011
417.212 1.516
29.916 4.702
418.728
34.618
Other non-current receivables:
31 December 2012
31 December 2011
Notes receivables (1) (3) (4) Deposits and guarantees given
95.557 1.606
398.210 1.112
Total
97.163
399.322
Notes receivables (1) (2) (3) Deposits and guarantees given Total
(1)
(2)
(3)
(4)
TL 26.681 (31 December 2011: TL 29.916) of short-term notes receivables and TL 32.318 (31 December 2011: TL 63.908) of long-term notes receivables are composed from the sales of shares of Bağımsız Gazeteciler and all Milliyet brand, royalties and internet domain names to DK Gazetecilik ve Yayıncılık A.Ş at 2 May 2011. Notes receivables are shown at discounted amounts. The discount amount as of 31 December 2012 is TL 734 (31 December 2011: TL 985). Excluding the accrued interest, TL 313.738 (USD 176 million) of long term notes receivables as of 31 December 2012 (31 December 2011: TL 332.446) consists of the receivables from Doğuş Yayın Grubu regarding the sale of shares of Işıl Televizyonculuk Yayıncılık A.Ş (Star TV) as of 3 November, 2011. 3,58% of annual interest rate is applied to the related amount. TL 2.874 of interest accrual is recognized in short-term notes receivables regarding this receivable as of 31 December 2012. The maturity of the receivable is 2 November 2013. Doğuş Holding A.Ş. has become the guarantor for the related receivable. Hürriyet, a subsidiary of the Group, sold the properties that consist of 58.609,45 m2 land and buildings, including the building that has been used as company headquarters for 28 years (Hürriyet Media Towers) in Bağcılar, Istanbul to Nurol Gayrimenkul Yatırım Ortaklığı in consideration of USD 127.500 (TL 225.994), excluding late interest. USD 17.500 of the consideration was paid in cash and the remaining portion which amounts to USD 110.000 is payable in 32 equal installments as of 6 March 2012 by applying 3,5% interest rate for the remaining installment portions. As of 31 December 2012, USD 41.250 (TL 73.532) of the related consideration is recognized as shortterm notes receivables and cheques and USD 34.375 (TL 61.277) is recognized as long term notes receivables and cheques in the accompanying consolidated financial statements. Interest amount that is collectible in relation to principal amount is USD 6.396. USD 3.031 (TL 5.372) of the related amount, excluding VAT, has been collected and is recognized as finance income in the accompanying financial statements in the current period. Interest accrual calculated by using the effective interest rate in the current period amounts to USD 217 (TL 387) and is recognized as short-term notes receivables and cheques and finance income in the accompanying financial statements. Long-term notes receivable amounting to TL1.962 consist of the notes receivables of other subsidiaries.
Other current payables:
31 December 2012
31 December 2011
Taxes and funds payable Payables to personnel Advances received Deposits and guarantees received Other
51.572 11.624 1.408 702 1.227
51.339 12.174 2.466 899 2.325
Total
66.533
69.203
166 - 167
DOĞAN YAYIN HOLDİNG ANNUAL REPORT 2012
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 11-OTHER RECEIVABLES AND PAYABLES (Continued) Other non-current payables: Deposits and guarantees received Advances received (1) Other non-current liabilities Total
(1)
31 December 2012
31 December 2011
13.032 478 13.510
12.779 47.222 376 60.377
As of 31 December 2011, TL 47.222 (USD 25.000) in the total advances received amount is the advance received for the joint venture agreement of Eko TV signed between Doğan TV Holding and Turner Broadcasting System International Inc. (“Turner”) at 17 July 2007. Within the scope of this agreement, Doğan TV Holding has granted a call option to Turner for the 25% of the shares of Eko TV until the year 2017. The call option could only be exercised when RTSC regulation permits the transfer of the shares. In accordance with the amendment to the Law no: 6112 “Establishment and Broadcasting Services of Radio and Television Companies” published in the official Gazette on March 3, 2011, this option has become available and exercisable to Turner. As of 14 June 2012, Doğan TV Holding and Turner’s joint venture agreement is terminated and the related option is not exercised. Therefore, USD 25.000 (TL 45.767) recognized as advances received in the 31 December 2011 financial statements is recognized under other operating income in the current period (Note 28). Following the termination of the agreement, the Group has purchased 19,98% participation of Eko TV in consideration of TL 4.331 (Note 3).
NOTE 12-INVENTORIES The details of inventories at 31 December 2012 and 31 December 2011 are as follows: 31 December 2012
31 December 2011
65.313 36.188 9.907 7.832 1.078
89.312 74.700 8.130 4.707 604
Sub-total
120.318
177.453
Less: provision for impairment on inventories
(5.935)
(5.340)
Total
114.383
172.113
Raw materials and supplies Finished goods and merchandise (1) Promotion stocks Semi-finished goods Other
(1)
35.270 TL of finished goods and merchandise is comprised of dvd and vcd’s produced by companies in the broadcasting segment and satellite receivers and smart cards purchased.
The promotion stocks comprise books, cd, dvd and electronic training materials sold together with newspapers. Evaluation of impairment on promotion stocks and in detection of an impairment; evaluation of the impairment amount is carried out by the Group management. In this manner, an inventory impairment amount is set with the rates determined by the management by taking the purchase date into consideration. Movement of provision for impairment on inventories
1 January Current period charge from continued operations (Note 28) Reversal of provision from continued operations in the current period Reversal provisions from discontinued operations 31 December NOTE 13-INVESTMENTS ACCOUNTED FOR BY THE EQUITY METHOD
1 January31 December 2012
1 January31 December 2011
(5.340) (3.590) 2.995 (5.935)
(8.752) (674) 2.504 1.582 (5.340)
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
The details of the investments accounted for by the equity method at 31 December 2012 and 31 December 2011 are as follows: Associate
31 December 2012
%
31 December 2011
%
Doğan Havacılık (1)
-
29,0
7.709
29,0
Total
-
(1)
7.709
The related associate has been merged with Milta Turizm İşletmeleri A.Ş. as of 25 December 2012.
Balance sheets of the associate as of 31 December 2012 and 31 December 2011 are as follows: 31 December 2012
31 December 2011
-
27.118 (537) 26.581 7.709
Total assets Total liabilities Net assets Group’s share on net assets of the associate accounted for by using the equity method NOTE 14-DERIVATIVE FINANCIAL INSTRUMENTS 31 December 2012 Asset Liability
31 December 2011 Asset Liability
Derivative swap financial instruments: Swap transactions in foreign exchange Interest rate interval swap transactions Interest rate swap transactions
573 -
1.375
-
230 70 3.129
Total
573
1.375
-
3.429
(a) Derivative instruments against foreign exchange risk The Group has made a Euro swap transaction amounting to USD 25.222 (31 December 2011: USD 46.080) related with bank borrowings in the current period and recognised financial asset amounting to TL 573 as of 31 December 2012 (31 December 2011: TL 230 financial liability).
DOĞAN YAYIN HOLDİNG ANNUAL REPORT 2012
168 - 169
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 14-DERIVATIVE FINANCIAL INSTRUMENTS (Continued) b) Derivative instruments against interest risk Group does not have any derivative instruments against interest risk as of 31 December 2012. Group, entered into two collar agreements (CAP and collar) totaling to USD 4.750 to hedge the interest rate risk arising from borrowings as of 31 December 2011. The agreements have fixed base and cap rates. Accordingly, at the dates defined in agreements, if the LIBOR rate is below the base rate, the Group has to compensate for the difference between the base rate and the actual rate to the banks. Similarly, if the LIBOR rate is above the cap rate, banks will compensate the difference to the Group. As of 31 December 2011, fixed base and cap rates change between 3,0% and 5,6% and the main floating interest rate is LIBOR. Financial liability recognised as of 31 December 2011 regarding these agreements amounted to TL 70. Financial expense recognised as of 31 December 2011 regarding these agreements amounting to TL 1.131. (c) Interest rate swap transactions Group, has an interest rate swap agreement to convert floating interest (Libor) rate to fixed interest rate for its loan amounting to USD 80.283. According to the agreement, interest expense of loan depending on 6 months libor rate, is fixed until 5 July 2011. Financial expense recognised in 2011 regarding these agreements amounts to TL 182. Doğan TV Holding, one of the subsidiaries of the Group, had an interest rate swap agreement amounting to USD 33.333 related with bank borrowings to convert floating interest rate to fixed interest rate for its loan. According to the agreement, interest expense of loan was fixed until 23 May 2014. Financial liability recognised as of 31 December 2012 regarding these agreements amounted to TL 1.375 (31 December 2011: TL 3.129). No financial income is recognised during the period regarding these agreements (31 December 2011: None).
21.590 31.386
25.239
Additions
2.306 37.920
Additions
(20.385)
Disposals
(26.035)
Disposals
-
Transfers
3.250
Transfers
1.405 (2.008)
Gain/(loss) arising from change in fair value
779 (1.413)
Gain/(loss) arising from change in fair value
22.995 34.232
31 December 2011
74.034
26.080 47.954
31 December 2012
The group has rent income amounting to TL 348 from investment properties (31 December 2011: TL 2.033). Direct operating costs in the current period resulting from investment property is TL 492 (31 December 2011: TL 382). There is no collateral or mortgage on investment properties of the Group as of 31 December 2012.
Net book value 52.976 57.227 Investment properties which are carried at cost less any accumulated loss and impairment, if any in the prior consolidated financial statements are recognized at fair value in accordance with the Group management’s decision (Note 2.1.6). Accordingly, the Group’s investment properties for the period ended as of 31 December 2012, 31 December 2011 and 31 December 2010 have been subject to valuation under the requirements of Capital Market Board.
Land and land improvements Buildings
57.227
Net book value
1 January 2012
22.995 34.232
Land and land improvements Buildings
1 January 2012
The movements in investment property during the periods ended 31 December 2012 and 2011 are as follows:
NOTE 15-INVESTMENT PROPERTY
(Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012
DOĞAN YAYIN HOLDİNG A.Ş.
3.210
Cost (1.464)
Accumulated depreciation 1.746
Net book value prior to transfer (1)
1.504
Investment property revaluation reserve
3.250
Base transfer value (2)
Under IAS 40, if an owner-occupied property becomes an investment property that will be carried at fair value, an entity shall apply IAS 16 up to the date of change in use. The entity shall treat any difference at that date between the carrying amount of the property in accordance with IAS 16 and its fair value in the same way as a revaluation in accordance with IAS 16. The Group, accordingly, recognized the difference between net carrying value and fair value at the date of transfer in other comprehensive income. Current period depreciation charge of property, plant and equipment transferred to investment property is TL 733 (31 December 2011: TL 675) at the date of the transfer. (2) The fair value of investment properties of Doğan Gazetecilik, a subsidiary of the Group, transferred from property, plant and equipment at the date of the transfer amounts to TL 3.250. Net book value prior to transfer is TL 1.746. The amount recognized in other comprehensive income due to the treatment of the difference between net carrying value and fair value at the date of transfer as a revaluation in accordance with IAS 16 amounts to TL 1.504. Deferred tax liability calculated from the revaluation of investment property is TL 75. Net revaluation amount presented in other comprehensive income is TL 1.429. TL 1.334 of this amount is attributable to parent company shares, TL 95 of this amount is attributable to non-controlling interest shares.
(1)
Buildings
NOTE 15-INVESTMENT PROPERTY (Continued)
(Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012
DOĞAN YAYIN HOLDİNG A.Ş.
DOĞAN YAYIN HOLDİNG ANNUAL REPORT 2012
170 - 171
(1.732) (51.453) (781.376) (13.542) (216.588) (48.163) (1.112.854) 536.698
Accumulated depreciation: Land and land improvements Buildings Machinery and equipment Motor vehicles Furniture and fixtures Leasehold improvements Total Net book value (87) (4.577) (43.685) (1.193) (41.889) (3.231) (94.662)
1.583 716 36.490 1.648 74.978 21.266 23.134 159.815
Additions
30 540 142.827 2.460 85.959 1.587 233.403
(20.937) (4.624) (159.274) (3.230) (94.925) (1.843) (6.351) (291.184)
Disposals
(52) 3.627 3.575
2.094 (9.273) 11.448 1.176 (13.976) (8.531)
Transfer
(18) (788) (1) (807)
18 788 1 807
Consolidation rate change (1)
285 1.388 140 542 65 2.420
(552) (874) (2.677) (132) (325) 427 (148) (4.281)
(1.840) (51.596) (676.787) (12.053) (158.663) (35.474) (936.413) 520.315
29.185 179.214 832.854 15.475 325.444 70.322 4.234 1.456.728
Currency translation differences 31 December 2012
(1)
The Group has completed the share purchase transaction for the 19,98% shares of Eko TV which was journalized as joint venture as of 31 December 2011 as of 6 September 2012 and the Company has been included as subsidiary in the accompanying financial statements as of this date (Note 3).
As of 31 December 2012, TL 180.502 (31 December 2011: TL 206.854) of total depreciation expense whose TL 733 from investment properties (31 December 2011: TL 675), TL 94.662 from property, plant and equipment (31 December 2011: TL 97.844) and TL 85.107 (31 December 2011:TL 108.335) from intangible assets is allocated into cost of goods sold amounting to TL 120.588 (31 December 2011: TL 140.978) (Note 25), TL 9.507 (31 December 2011: TL 7.725) into marketing, sales and distribution expenses, TL 50.407 (31 December 2011: TL 58.151) into general administrative expenses (Note 26). The carrying amount of the property, plant and equipment of the Group acquired thorough finance leases as of 31 December 2012 is TL 49.562 (31 December 2011: TL 56.002). The accumulated depreciation as of 31 December 2012 is TL 28.885 (31 December 2011: TL 26.684).
1 4.847 83 13.313 14.268 32.512
(2) (4.847) (139) (22.549) (20.940) (973) (49.450)
Disposal of subsidiary
There is mortgage amounting to TL 15.286 on the property, plant and equipment as of 31 December 2012 (31 December 2011: TL 17.329).
46.999 193.251 950.926 17.327 367.089 71.412 2.548 1.649.552
Cost: Land and land improvements Buildings Machinery and equipment Motor vehicles Furniture and fixtures Leasehold improvements Construction in progress Total
1 January 2012
The movements in property, plant and equipment during the periods ended 31 December 2012 and 2011 are as follows:
NOTE 16-PROPERTY, PLANT AND EQUIPMENT
(Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012
DOĞAN YAYIN HOLDİNG A.Ş.
(2)
(1)
(138) (6.563) (57.026) (1.948) (27.514) (4.655) (97.844)
173 738 40.133 2.803 84.198 5.489 5.484 139.018
Additions
200 26.774 1.586 4.209 (13) 32.756
(2.807) (34.613) (2.415) (4.612) 102 (448) (44.793)
Disposals
2.676 2.676
(3.679) (3.217) (214) 1.165 (4.393) (10.338)
Transfer (1)
318 33.803 11.716 94 45.931
(11.901) (100.878) (13.599) (94) (147) (126.619)
Classified as asset held for sale (2)
-
(400) (3.447) (6.974) (10.821)
Impairment
149 10.186 259 4.143 3.500 18.237
(154) (16.656) (294) (6.048) (4.003) (27.155)
Discontinued operations (3)
(1.338) (5.849) (378) (1.693) (100) (9.358)
1.347 6.137 8.726 776 2.515 104 210 19.815
(1.732) (51.453) (781.376) (13.542) (216.588) (48.163) (1.112.854) 536.698
46.999 193.251 950.926 17.327 367.089 71.412 2.548 1.649.552
Currency translation differences 31 December 2011
The transfers are related with the reclassification of office floors leased to DK Gazetecilik by the Group as of May 2, 2011. The reclassification is related with the investment property of Hürriyet, a subsidiary of the Group for which the sales process has started as of 2011. Discontinued operations include the Group’s disposal of assets that are related to the sales of Bağımsız Gazeteciler and Milliyet brand, royalties and internet domain names as of 2 May 2011 and sales of Işıl TV as of 3 November 2011.
(1.912) (80.380) (767.177) (13.061) (195.827) (46.895) (1.105.252) 605.193
Accumulated depreciation: Land and land improvements Buildings Machinery and equipment Motor vehicles Furniture and fixtures Leasehold improvements Total Net book value
(3)
57.780 297.341 977.126 16.457 291.344 68.555 1.842 1.710.445
Cost: Land and land improvements Buildings Machinery and equipment Motor vehicles Furniture and fixtures Leasehold improvements Construction in progress Total
1 January 2011
NOTE 16-PROPERTY, PLANT AND EQUIPMENT (Continued)
(Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012
DOĞAN YAYIN HOLDİNG A.Ş.
DOĞAN YAYIN HOLDİNG ANNUAL REPORT 2012
172 - 173
(17.732) (88.938) (123.267) (9.601) (1.763) (22.029) (263.330)
Accumulated amortization: Brand name Customer list Rights Domain names Development costs Other
Total
(1)
(50.158)
(1.439) (18.564) (21.423) (2.669) (421) (5.642)
50.374
42.981 3.086 345 3.962
Additions
4.159
533 3.626
(4.846)
(404) (4.442)
Disposals
-
-
1.384
1.384 -
Transfer
4.143
3.599 104 440
(7.364)
(4.902) (104) (2.358)
-
Disposal of subsidiary
188
(29) (689) 803 (33) 136
(1.853)
(1.650) 884 (1.095) (40) 48
Currency translation differences
(796)
(502) (294) -
886
592 294 -
570.321
(305.794)
(19.200) (108.191) (140.257) (12.303) (2.374) (23.469)
876.115
295.435 310.305 193.900 46.625 3.523 26.327
Consolidation rate change (1) 31 December 2012
The Group has completed the share purchase transaction for the 19,98% shares of Eko TV which was journalized as joint venture as of 31 December 2011 as of 6 September 2012 and the Company has been included as subsidiary in the accompanying financial statements as of this date.
574.204
837.534
Total
Net book value
297.085 309.421 155.344 43.579 2.988 29.117
Cost: Brand name Customer list Rights Domain names Development costs Other
1 January 2012
The movements in intangible assets for the periods ended 31 December 2012 and 2011 are as follows:
NOTE 17-INTANGIBLE ASSETS
(Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012
DOĞAN YAYIN HOLDİNG A.Ş.
(235.490)
Total
(2)
(1)
(48.937)
(1.418) (17.882) (20.683) (2.174) (424) (6.356)
2 12.886 2.179 958 4.439 20.464
Additions
4.424
195 45 4.184
(2.754) (1.112) (941) (4.807)
Disposals
116
116 -
2 1.675 279 1.102 4.155 7.213
Transfer
33.136
30.806 2.045 285
(136.766) (2.045) (57.406) (664) (196.881)
Discontinued operations (1)
(16.579)
(789) (9.432) (5.111) (927) (320)
42.156 39.689 6.688 3.713 344 92.590
Currency translation differences
-
-
(9.157) (23.500) (32.657)
574.204
(263.330)
13.074 (88.938) (154.073) (9.601) (1.763) (22.029)
297.085 309.421 155.344 43.579 2.988 29.117 837.534
Impairment (2) 31 December 2011
Discontinued operations include the Group’s disposal of assets that are related to the sales of Bağımsız Gazeteciler and Milliyet brand, royalties and internet domain names on 2 May 2011 and sales of shares of Star TV on 3 November 2011 to Doğuş Yayın Grubu. As explained in Note 2, Hürriyet, one of the subsidiaries of the Group has reviewed the fair values of its intangible assets and booked provision for impairment amounting to TL 9.157 at 31 December 2011. Doğan TV Holding, one of the subsidiaries of the Group, has booked a provision of TL 23.500 in the current period for the broadcasting license of CNN Turk by taking into consideration the effects of the new RTSC Law No: 6112 and the related communique and regulations regarding the distribution of terrestrial broadcasting licences considering the redistribution of these licenses by giving priority to the license owners (Note 28).
716.122
(15.525) (61.624) (130.635) (6.500) (1.384) (19.822)
Accumulated amortization: Brand name Customer list Rights Domain names Development costs Other
Net book value
400.848 269.732 138.894 80.906 37.408 2.040 21.784 951.612
1 January 2011
Cost: Brand name Customer list Rights Terrestrial broadcasting and permission license Domain names Development costs Other Total
NOTE 17-INTANGIBLE ASSETS (Continued)
(Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012
DOĞAN YAYIN HOLDİNG A.Ş.
DOĞAN YAYIN HOLDİNG ANNUAL REPORT 2012
174 - 175
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 17-INTANGIBLE ASSETS (Continued) In addition to the movement of the intangible assets above, television programme rights amounting to TL 56.988 and TL 64.296 are included in intangible assets in the consolidated balance sheets at 31 December 2012 and 31 December 2011, respectively. The movements of the television programme rights during the periods ended 31 December 2012 and 2011 are as follows:
1 January Additions Amortization of television broadcasting rights (Note 25) (1) Provision for impairment of programme rights (Note 28) Discontinued operations Currency translation differences 31 December
(1)
31 December 2012
31 December 2011
64.296 29.520 (34.949) (1.868) (11)
72.148 52.295 (59.398) (2.574) (3.401) 5.226
56.988
64.296
TL 6.893 of depreciation and amortization amount derived from the sale of Star TV of the Group on 3 November 2011 is recognized under the discontinued operations account on the financial statements for the period ended 31 December 2011.
Intangible assets with indefinite useful lives As at 31 December 2012, the Group has determined that brand names with carrying value of TL 269.360 have indefinite useful lives (31 December 2011: TL 282.379) (Note 2). The utilization period of brand names with indefinite useful lives, as expected by the Group, is determined based on the stability of the industry, changes in market demands as to the products and services provided through assets, control period over the assets and legal or similar restrictions on their utilization. NOTE 18-GOODWILL The movements in goodwill during the periods ended 31 December 2012 and 2011 are as follows: 31 December 2012
31 December 2011
1 January Impairment (Note 28) (1) Currency translation differences Discontinued operations (2) (3) Other (4)
595.197 (21.278) (576) 860
951.899 (103.895) 32.059 (286.682) 1.816
31 December
574.203
595.197
As of 31 December 2012, TL 18.106 of the global goodwill impairment is related with the acquisition of subsidiaries operating in Russia and TL 3.172 is related with the difference in the measurement of goodwill related to the acquisition of Eko TV shares previously accounted as joint venture. (31 December 2011: TL 92.526 of the global goodwill impairment is related with the acquisition of subsidiaries operating in Russia, TL 11.332 is related with the goodwill of acquisition of Doğan Ofset and TL 37 is related with the goodwill of acquisition of Doğan Egmont. (2) 99,99% of its shareholding in the Group’s subsidiary, Bağımsız Gazeteciler, was disposed of on 2 May 2011. TL 47.757 of goodwill arising from the acquisition of Bağımsız Gazeteciler is derecognized from the financial statements (Note 31). (3) 99,99% of its shareholding in the Group’s subsidiary, Işıl TV, was disposed of on 3 November 2011. TL 238.925 of goodwill arising from the acquisition of Işıl TV is derecognized from the financial statements (Note 31). (4) Other relates to the changes in fair value of put options (Note 2.2). (1)
176 - 177
DOĞAN YAYIN HOLDİNG ANNUAL REPORT 2012
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 18 – GOODWILL (Continued) Goodwill is allocated to cash generating units identified based on business segments. The summary of goodwill allocated to business and geographical segments is as follows: 2012
2011
Broadcasting – Turkey Publishing – Russia – Turkey
363.238
366.410
118.374 92.591
136.196 92.591
Total
574.203
595.197
Goodwill impairment testing The Group has performed goodwill impairment analysis for the periods ended 31 December 2012 and 2011 as explained in detail below: The recoverable amount of cash generating units is determined by calculating the amount that would be obtained through sales. These calculations are measured based on estimated cash flows after tax using financial budgets covering a five-year period. EBITDA estimates (budgeted interest, tax, depreciation and amortization, provision for impairment and gross margin before other non-operating expenses) have a significant role in these calculations. The cash flow projections of publishing and broadcasting segments have been prepared covering the years of 2013-2017. The assumptions used in the value in use calculations are as below:
Broadcasting Publishing Russia and Commonwealth of Independent States (3) Turkey (3)
EBITDA margin (1)
Discount rate (2)
%30,20
%14,00
%18,80 %15,50
%11,80 %14,60
Weighted average of EBITDA increase rate used to extrapolate projected cash flows following the budget period Weighted average cost of capital. (3) Group Management has booked a provision for impairment on goodwill amounting to TL 18.106 regarding the acquisition of subsidiaries operating in Russia. (Group Management has booked a provision for impairment on goodwill and property, plant and equipment amounting to TL 103.895 and TL 9.157 (TL 113.052 in total) , respectively in its consolidated financial statements for the period ended 31 December 2011 (Note 17,18). (1)
(2)
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 19-GOVERNMENT GRANTS Group obtained six investment incentives certificate for the imported equipments amounting to USD 13.661 and domestic equipments amounting to TL 1.280 for the modernization of its printing plants in Istanbul, Ankara, Izmir, Adana, Antalya and Trabzon on 28 October, 2, 4 November and 30 December 2011. The agreements are valid for two years and equipment imported within the scope of the certificate is exempt from Customs Duty and VAT. The investments amounting to USD 13.450 for imported equipments and TL 1.280 for domestic equipments are realized within these certificates as of 31 December 2012 (31 December 2011: None). NOTE 20-PROVISIONS, CONTINGENT ASSETS AND LIABILITIES The details of provisions at 31 December 2012 and 31 December 2011 are as follows: 31 December 2012
31 December 2011
Provision for lawsuits Provision for withholding tax
26.651 -
19.282 22.130
Total
26.651
41.412
2012
2011
1 January Additions in the current period (Note 28) Acquisition of subsidiary Payments related with provisions Reversals related with provisions
19.282 12.460 325 (3.430) (1.986)
26.982 4.913 (4.601) (8.012)
31 December
26.651
19.282
2012
2011
22.130 (22.130) -
28.089 1.751 (7.710) 22.130
2012
2011
-
26.171 (4.977) (21.194) -
The movements of provisions for lawsuits for the periods ended 31 December are as follows:
The movements of provisions for withholding taxes for the periods ended 31 December are as follows:
1 January Additions in the current period (Note 28) Reversals related with provisions 31 December The movements of provisions for tax penalties for the periods ended 31 December are as follows:
1 January Reversal of provisions (Note 28) Payments related with provisions 31 December
178 - 179
DOĞAN YAYIN HOLDİNG ANNUAL REPORT 2012
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 20-PROVISIONS, CONTINGENT ASSETS AND LIABILITIES (Continued) (a) Lawsuits The details of litigations against Doğan Yayın Holding and its subsidiaries that are pending at 31 December 2012 and 31 December 2011 are as follows: 31 December 2012
31 December 2011
Legal cases Commercial cases Business cases Other
53.232 13.569 6.060 2.052
54.391 7.311 6.585 6.298
Total
74.913
74.585
A provision for lawsuits filed against the Group whose details are given above amounting to TL 26.651 has been provided with reference to the opinions of the Group’s legal advisors and past experience of management related to similar litigations against the Group (31 December 2011: TL 19.282). Legal cases mainly consist of pecuniary and non-pecuniary damages and lawsuits filed against Doğan Yayın Holding and its subsidiaries and lawsuits initiated by the Radio and Television Supreme Council. (b) Tax penalties and lawsuits The Group’s decision on the requirements set out in relation to “Tax Base Increase” in Law No: 6111 “Restructuring of some receivables and Social Security and General Health Insurance Law and Other Law Amending Certain Laws and Decrees” The Group management plans to make use of the requirements set out in relation to “Undue and on Trial Tax Liabilities” and “Tax Base Increase” in Law No: 6111 “Restructuring of some receivables and Social Security and General Health Insurance Law and Other Law Amending Certain Laws and Decrees” (“Law No: 6111”), which has become effective upon the issuance in the Official Gazette No: 27857 (I.Bis) on 25 February 2011. After the amount calculated on the basis of Law No: 6111 is paid in advance, the remaining portion which will be paid in 18 equal installments in 36 months, including the 9th installment is paid as of 28 September 2012. In this regard, the Group has no outstanding liability under the requirements of Law No: 6111. The amount of payment and expenses of the Group within the scope of Law No: 6111 are summarized below: Undue and on trial tax liabilities in dispute Under the requirements of Law No. 6111, TL 33.926 portion of the related amount is paid in cash until 30 June 2011. In this scope, TL 423.588 portion of TL 886.772 of principal including interest is paid in 8 installments, and the remaining portion (TL 463.184) is paid including the 9th installments. TL 58.013 (31 December 2011: TL 38.595, 31 December 2012: TL 19.418) of total interest payment is made regarding “undue and on trial tax liabilities in dispute” paid in installments. The Group has made a total payment of TL 920.698 including interest regarding its “undue and on trial tax liabilities in dispute” in accordance with Law No: 6111 and the Group has no outstanding liability in this regard.
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 20-PROVISIONS, CONTINGENT ASSETS AND LIABILITIES (Continued) (b) Tax penalties and lawsuits (Continued) Tax base increase Under the requirements of law no: 6111, TL 47.672 portion is paid in cash until 30 June 2011. In this scope, TL 15.063 portion of TL 31.534 which will be paid in 18 installments in 36 months is paid in 8 installments, and the remaining portion (TL 16.471) is paid including the 9th month installments. TL 2.069 (31 December 2011: TL 1.372, 31 December 2012: TL 697) of total interest payment is made regarding tax base increase paid in installments. The Group has made a total payment of TL 79.206 including interest regarding its “tax base increase” ” in accordance with Law No: 6111 and the Group has no outstanding liability in this regard. (c) Commitments and contingent liabilities related to the share acquisition agreement with Commerz-Film GmbH Doğan Yayın Holding sold 90.854.185 shares (“Axel shares”), 25% of the share capital of Doğan TV Holding, to Commerz-Film GmbH (formerly registered as Dreiundvierzigste Media Vermögengsverwaltungsgesellschaft mbH), a 100% subsidiary of Axel Springer AG, for EUR 375.000 (TL 694.312, this amount is defined as “initial sales price”) on 2 January 2007. In accordance with the Share Sale Agreement (“Agreement”) that the initial sales price will be revised based on whether the “initial public offering” (“IPO”) of the shares of Doğan TV Holding or not. Dates for the reassessment of the original selling price as set out in the agreement signed by Doğan Holding, Doğan Yayın Holding, Doğan TV Holding, Commerz-Film GmbH and Hauptstadtsee 809 on 19 November 2009 have been postponed for a maximum period of 6 years without being subject to any condition. The related agreement dated 19 November 2009, was amended by a new agreement (Amendment agreement) signed with Doğan Holding, Doğan Yayın Holding, Doğan TV Holding, Commerz-Film GmbH and Hauptstadtsee 809. V V GmbH at 31 October 2011. The below conditions set out in the agreement signed on 19 November 2009 are applicable as of 19 February 2010. - In the agreement dated November 19, 2009, Axel Springer Group has sale options for 3,3% of its shares in Doğan TV Holding amounting to EUR 50.000 subsequent to January 2013 and the other 3,3% of its shares amounting to EUR 50.000 subsequent to January 2014 to Doğan Holding and Doğan Holding has the commitment to purchase these shares (“DTV Put Option I”). Axel Springer Group may exercise the sale options fully or partially. Payables will include interests’ payments of annual combined 12 months Euro Libor plus 100 base points as of 2 January 2007. Under the amendment agreement dated 31 October 2011, existing “DTV Put Option I” terms are revised and accordingly, the related terms require the put options exercisable for the periods subsequent to January 2013 and January 2014 in consideration of EUR 50.000 to cover only 33.843.238 shares in each period. The Amendment also allows Axel Springer another put option exercisable for 34.183.593 shares for the period subsequent to 2015 in consideration of EUR 50.000. As of 31 January 2013, Doğan Holding acquired 33.843.238 shares (which equals 2,48844% of first tier paid in capital in consideration of EUR 50.000 as stated above) with TL 1 of nominal value in consideration of EUR 61.572 in total.
DOĞAN YAYIN HOLDİNG ANNUAL REPORT 2012
180 - 181
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 20-PROVISIONS, CONTINGENT ASSETS AND LIABILITIES (Continued) (c) Commitments and contingent liabilities related to the share acquisition agreement with Commerz-Film GmbH (Continued) - According to the agreement dated 19 November 2009, Axel Springer Group has option to sell some or all of “Axel shares” with the higher of EUR 4,1275 (exact) per share or a fair value to be determined by specific valuation techniques to Doğan Holding and Doğan Holding has a commitment to purchase these shares (“DTV Put Option II”). Payables will include interests’ payments of annual combined 12 months Euro Libor plus 100 base points as of 2 January 2007. In order to exercise this option, the following conditions must be met. -
Doğan TV Holding shares should not be offered to the public by 30 June 2017,
-
There should be direct or indirect control change over Doğan Holding, Doğan Yayın Holding or Doğan TV Holding,
-
There should be pledges or sequestration on the Doğan Yayın Holding’s assets that have significant unfavorable effects on the operations of Doğan Yayın Holding in addition to the existing ones.
This time, with the amendment agreement dated 31 October 2011, EUR 4,1275 (exact) per share is updated as EUR 1,46269 (exact) because of the increase in the share capital of Doğan TV Holding. As per the Amendment Agreement dated 31 October 2011, the Axel Springer Group has also requested two guarantee letters amounting to EUR 50.000 each in order to guarantee the liabilities of Doğan Holding under the “DTV Put Option I”. Two guarantee letters amounting to EUR 50.000 were given by Doğan Holding as at 10 February 2012. In addition, a third guarantee letter amounting to EUR 50.000 in consideration of 34.183.593 shares were given in the same period to be used as of January 2015. EUR 375.000, which is defined above as the initial sale price, can be amended based on the circumstances explained below. Under the agreement, the “initial sale price” will be determined based on the IPO or non-IPO option of Axel shares. In the event that “Axel shares” are offered to public by 30 June 2017 and if quarterly share value of “Axel Shares” in average subsequent to public offering is less than the amount of which will be calculated by adding interest over the original selling price (it will be remeasured using a 12 month Euro Libor rates on annual compound basis effective from 2 January 2007) to the original selling price, both the difference resulting from the quarterly share value of “Axel Shares” in average subsequent to public offering and the original selling price and the amount calculated by adding interest over the difference would be paid by Doğan Yayın Holding to the Axel Springer Group. In the event that “Axel Shares” are offered to public by 30 June 2017 and if quarterly share value of “Axel Shares” in average subsequent to public offering is higher than the original selling price, both the difference resulting from the quarterly share value of “Axel Shares” in average subsequent to public offering and the amount of which will be calculated by adding interest over the original selling price (as measured by using an annual combined Euro Libor plus 100 base points as of 2 January 2007) to the original selling price would be equally shared between the Axel Springer Group and Doğan Yayın Holding.
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 20-PROVISIONS, CONTINGENT ASSETS AND LIABILITIES (Continued) (c) Commitments and contingent liabilities related to the share acquisition agreement with Commerz-Film GmbH (Continued) In the event that “Axel Shares” are not offered to public by 30 June 2017 and if the fair value of Doğan TV Holding , which will be calculated by using certain valuation techniques as at 31 December 2015, is less than the amount of which will be calculated by adding interest over the original selling price (as measured by using an annual combined Euro Libor plus 100 base points as of 2 January 2007) to the original selling price, both the fair value of Doğan TV Holding, which will be calculated by using certain valuation techniques as at 31 December 2015, and the difference of the original selling price and the amount calculated by adding interest over the difference would be paid by Doğan Yayın Holding to the Axel Springer Group. If Doğan TV Holding’s shares are not listed by the end of 30 June 2017, the fair value based on the above-mentioned techniques would be reassessed, payments would be made to the Axel Springer Group in accordance with the related calculations, and Axel Springer Group’s call option of its entire or some portion of “Axel shares” to Doğan Holding and Doğan Holding’s put option for the related shares would continue to be in effect. In the event that Axel Springer group shares are offered to the public between 30 June 2017 and 30 June 2020, any positive difference between the initial public offering value and the initial sales price remeasured as of 31 December 2015 (it will be remeasured using the annual Euro Libor rates on annual compound basis starting from 2 January 2007) including interest calculated from the difference (it will be calculated using the annual Euro Libor rates on annual compound basis effective from 1 July 2017) will be apportioned equally, whereas no transaction will take place for any negative difference. In accordance with the agreement signed on 19 November 2009, Doğan Yayın Holding shall make a TL cash capital increase in Doğan TV Holding that corresponds to EUR 385.000, and as a result of the capital increase, Doğan TV Holding shares owned by Commerz-Film GmbH shall be diluted to 19,9% from 25%. In January 2010 and May 2010, the premium capital increase of Doğan TV Holding, was completed in two steps. As a result of the capital increase, the shares of Doğan Yayın Holding and Commerz-Film GmbH at Doğan TV Holding A.Ş were 79,71% and 19,9% respectively. For the above matter, Doğan Yayın Holding has determined the fair value of Doğan TV Holding as of 31 December 2011 in order to identify whether it will assume any future financial liability. In accordance with the fair value calculation, there are not any financial liabilities arising from the share acquisition, which represents 19,9% of Doğan TV Holding’s capital, by the Axel Springer Group. The Group is also responsible for any unprovisioned liability arising from tax assessments prior to the closing date of sale agreement as required in the Axel share acquisition and transfer “Agreement”. The effect of liability arising from Law no: 6111 in regards to Doğan TV Holding over the share value is compensated in proportion to the share capital to Commerz-Film GmbH. In this content, the payment made to Commerz-Film GmbH amounts to TL 165.523. The related payment has been made on 17 August 2011. Accordingly, Commerz-Film GmbH has participated in the capital increase of Doğan TV Holding from TL 456.554 to TL 1.288.328 through the usage of nominal values in the new share acquisition rights in the share of participation at nominal value. The capital increase has been registered on August 17, 2011. The share interest of Commerz-Film GmbH in Doğan TV Holding (19,9%) have remained still after the capital increase. Accordingly, the Group has indemnified TL 165.523 of liability arising from Doğan TV Holding and its subsidiaries’ undue and on trial tax liabilities in dispute under Law No: 6111 which represents the portion corresponding to Axel Springer Group’s current ownership percentage (19,9%). The related liability portion is not recognized under the non-controlling interests account in the consolidated financial statements prepared as of 31 December 2011.
DOĞAN YAYIN HOLDİNG ANNUAL REPORT 2012
182 - 183
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 20-PROVISIONS, CONTINGENT ASSETS AND LIABILITIES (Continued) (d) Put options OOO Pronto Moscow Option In January 2007, OOO Pronto Moscow, a subsidiary of Hürriyet, a subsidiary of the Group, acquired the majority shares of Impress Media Marketing LLC (“Impress Media”). Accordingly, the Group has the right to purchase 13% of non-controlling shares from non-controlling shareholders without a time constraint, provided that certain conditions are met. The Group has purchased shares as of 25 May, 2012 regarding non-controlling share of 10% by making a payment of TL 970 (USD 528) and the related liability is settled accordingly (31 December 2011: TL 1.097). Group still has the option to purchase the remaining 3% share in the capital of Impress Media. The fair value of the option is determined based on calculation over Impress Media EBITDA and as of 31 December 2012, the short-term portion of the fair value of the put option is TL 154 and is recognized under short-term financial liabilities account (31 December 2011: TL 108) (Note 9). Oglasnik d.o.o Option Hürriyet, a subsidiary of the Group, has granted a put option, on the 30% shares outstanding during the acquisition of 70% interest of the shares in its subsidiary Oglasnik d.o.o in Croatia. Discussions concerning the use of this option as of the reporting date of these financial statements are still ongoing. As of 31 December 2012, the fair value of the option is calculated as TL 14.261 (USD 8.000) based on various valuation techniques and assumptions and classified in “Other short-term financial liabilities” (31 December 2011: TL 15.111 (USD 8.000)) (Note 9). There is a dispute on the protocol between the contract parties and an arbitration process is in progress in the presence of Zagreb Court of Arbitration. A lawsuit has been filed against the Group amounting to EUR 3.645 by the non-controlling interest shareholders regarding the fact that they couldn’t exercise put option. Subpoena related to the lawsuit has been submitted to the Group on March 5, 2012 and the first trial of the lawsuit was held on 12 July 2012. Moje Delo d.o.o Option Hürriyet, a subsidiary of the Group, has acquired a 55% share in Moje Delo d.o.o. (“Moje Delo”) in Slovenia, in 2007. The Group has granted a put option to the selling shareholders on the shares exercisable from April 2013 to October 2013 (6 months). The result of total consideration to be calculated cannot be less than EUR 1.000. If the outcome of the calculation were to be less than the specified amount, the Group would make a payment of EUR 1.000. Group has also call option right for the non-controlling shares on hand from the non-controlling shareholders which is effective from October 2013. Exercise price shall be calculated based on EBITDA and the net financial debt of Moje Delo. The fair value of the put option is TL 3.792 as of 31 December 2012 (31 December 2011: TL 2.899) and classified in “Other short-term financial liabilities” (Note 9). TME Option The Company has no liabilities in relation to the disputed put option of USD 25.000, which was disclosed in the 31 December 2011 financial statements of Hürriyet, a subsidiary of the Group, and subject to appeal of arbitration before the Zurich Chamber of Commerce because the Company has been notified that the other party has sold the disputed GDR’s to another entity as at 21 March 2012 and the other party has also withdrawn its appeal of arbitration (31 December 2011: TL 47.223) (Note 9). The related transaction has an effect of TL 23.370 of increase in the equity attributable to equity holders of the Parent Company and the related amount is recognized under equity in the financial statements as transactions of shareholders are considered as shareholder transactions in accordance with Paragraph 109 of IAS 1 “Presentation of Financial Statements”.
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 20-PROVISIONS, CONTINGENT ASSETS AND LIABILITIES (Continued) (d) Put options (Continued) TME purchase of additional shares The Group has acquired 6,98% shares corresponding to 3.490.691 (exact) Global Depository Certificates of Trader Media East Limited in consideration of USD 26.250 in accordance with the valuation report issued by an independent valuation company as of 7 March 2012. The related transaction has an effect of TL 28.609 of decrease in the equity attributable to equity holders of the Parent Company and the related amount is recognized under equity in the financial statements as transactions of shareholders are considered as shareholder transactions in accordance with Paragraph 109 of IAS 1 “Presentation of Financial Statements”. (e) Improvements at the Competition Authority Upon the Competitive Board’s notification issued on 17 September 2009, Doğan Yayın Holding, Hürriyet, Doğan Gazetecilik, Bağımsız Gazetecilik and Doğan Daily News were informed that they are subject to an investigation in order to determine whether these companies have violated any provisions of Law 4054 in relation to “Advertisement area sales” in the print media. The Group has made an objection to the initial response session of the ongoing investigation claiming that Doğan Yayın Holding’s operations are not in the form of “Advertisement area sales” in the printed media and Doğan Daily News is not an operating company. Based on the investigation undertaken by the Competition Authority as of 5 April 2011, Hürriyet, Doğan Gazetecilik and Bağımsız Gazetecilik are charged with an administrative penalty fee of TL 3.805, TL 2.316 and TL 444, respectively. On the other hand, the Authority did not charge any administrative penalty for Doğan Daily News (a dormant company) and Doğan Yayın Holding, to avoid imposing multiple charges. The Group has provided a total of TL 4.923 of provision in relation to the charges in the accompanying financial statements. The total amount consists of TL 2.853 of provision for Hürriyet and TL 2.070 of provision for Doğan Gazetecilik and Bağımsız Gazetecilik. For the annulment of this decision, a lawsuit has been filed before the council of state.
(4)
(3)
(2)
(1)
54.204 171.134 -
1.157.032 1.262.993
-
-
410.908 -
19.228 -
-
-
100.624 -
572 6.500
31 December 2012 TL USD EUR
90.675 15.286
TL Equivalent
-
-
8.634 -
2.709 -
1.317.902
-
-
1.209.955
90.618 17.329
Other TL Equivalent
-
-
113.654 -
72.182 1.444
-
-
466.128 -
7.357 -
-
-
88.318 -
1.525 6.500
31 December 2011 TL USD EUR
-
-
-
2.485 -
Other
The guarantees of the Group consist of letter of guarantees, guarantee notes, bails and mortgages. The details of letter of guarantees, guarantee notes, bails and mortgages are explained below. As explained in detail in Note 8, 11,3% and 15% shares of Doğan Yayın Holding (226.354.060 (exact) and 300.000.000 (exact) shares), 13,3% shares of Hürriyet (73.200.000 (exact) shares), 20,87% shares of Kanal D (10.747.548 (exact) shares) and 67,3% shares of TME (33.649.091 (exact) shares) were given as pledges to financial institutions in respect of the long-term borrowings of the Group and are not included in the table above. 11,3% shares of Doğan Yayın Holding (226.354.060 (exact)), 13,3% shares of Hürriyet (73.200.000 (exact) shares) have been repurchased with the usage of the above-mentioned “call” option right and selling 22% of shares of Doğan Gazetecilik 22% in consideration of USD 122.323 to Doğan Yayın Holding. In addition, 67,3% shares of TME (33.649.091 (exact) shares) has been repurchased as a result of full payment of participation loan borrowed as at 4 January 2013 in relation to the acquisition of TME 100% shares of D Yapım (1.124.682.616 (exact) shares), of Doğan Prodüksiyon (1.087.582.624 (exact) shares) and of Alp Görsel (1.068.595.605 (exact) shares) all of which are owned by Doğan TV and 43 properties belonging to third parties and a bank letter of guarantee are given as guarantees to the Tax Offices; and they are not included to the above table in the prior year. Under the requirements of law no: 6111, Group has paid all its liabilities and applied to the related tax authorities for the return of guarantees mentioned above and the guarantees have been taken back in October 2012. There are mortgages amounting to TL 15.286 on property plant and equipment of Hürriyet, one of the subsidiaries of the Group, as of 31 December 2012 (31 December 2011: TL 17.329) (Note 16).
A. CPM’s given in the name of its own legal personality Guarantees (1) Mortgages (2) (3) Pledges (4) B. CPM’s given on behalf of the fully consolidated companies Guarantees (1) Mortgages Pledges C. CPM’s given on behalf of third parties for ordinary course of business Guarantees Mortgages Pledges D. Total amount of other CPM’s given i) Total amount of CPM’s given on behalf of the majority shareholder ii) Total amount of CPM’s given on behalf of third parties which are not in scope of B and C ii) Total amount of CPM’s given on behalf of third parties which are not in scope of C Total
(a) Letters of guarantees and guarantee notes given
Collaterals, pledges and mortgages (CPM) given by the Group at 31 December 2012 and 31 December 2011 is as follows:
NOTE 21 – COMMITMENTS
(Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012
DOĞAN YAYIN HOLDİNG A.Ş.
DOĞAN YAYIN HOLDİNG ANNUAL REPORT 2012
184 - 185
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 21 – COMMITMENTS (Continued) (a) Letters of guarantees and guarantee notes given (Continued) Other CPM given by the Group to equity ratio is 0,0% as of 31 December 2012 (31 December 2011: 0,0%). The details of letter of guarantees and guarantee notes given by the Group are as follows: 31 December 2012 Original TL currency equivalent Letters of guarantees-EUR Letters of guarantees-TL Letters of guarantees-USD Letters of guarantees-Other Guarantee notes – USD Guarantee notes-TL Guarantee notes-EUR Total
76.722 56.704 20.530 2.709 134.475 24.704 25
180.427 56.704 36.597 850 239.715 24.704 59 539.056
31 December 2011 Original TL currency equivalent 35.624 75.331 13.739 2.485 204 25
87.058 75.331 25.952 814 204 61 189.420
Doğan TV Holding, one of the subsidiaries of Doğan Yayın Holding, has given letters of guarantees amounting to EUR 72.000 to UEFA (Union Européenne de Football Association or Union of European Football Associations) in 2008 for broadcasting rights of UEFA Champions League, UEFA Super Cup and UEFA Cup games for the period 2012-2015. (b) Guarantees and mortgages given The details of guarantees of Doğan Yayın Holding and its shareholders’ given for the borrowings and trade payables of the Group companies and related parties as of 31 December 2012 and 31 December 2011 are as follows: 31 December 2012 Original TL currency equivalent Bails-USD Bails-TL Bails-EUR Bails-CHF Mortgages-EUR Mortgages-TL Total
275.131 143.930 24.449 8.634 6.500 -
490.448 143.930 57.498 16.775 15.286 723.937
31 December 2011 Original TL currency equivalent 459.745 110.301 54.194 6.500 1.444
868.413 110.301 132.439 15.885 1.444 1.128.482
(c) Barter agreements Doğan Yayın Holding and its subsidiaries, as a common practice in the media sector, enter into barter agreements, which involve the exchanging of goods or services without any cash collections or payments. As of 31 December 2012, the Group has a commitment for the publication of advertisements amounting to TL 34.677 (31 December 2011: TL 22.130) in exchange for purchasing goods and services and has an option to purchase goods and services amounting to TL 12.825 (31 December 2011: TL 18.567) in exchange of the goods or services sold.
186 - 187
DOĞAN YAYIN HOLDİNG ANNUAL REPORT 2012
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 22-PROVISION FOR EMPLOYMENT BENEFITS
Provision for employment termination benefits
31 December 2012
31 December 2011
81.978
42.541
Except from the legal requirements other than Turkey in which the Group operates, there are no pension plans and benefits. Under the Turkish Labour Law, the Group 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). At 31 December 2012 the amount payable maximum equals to one month of salary is TL 3.033,98 (exact) (31 December 2011: TL 2.731,85 (exact)) for each year of service. On the other hand, the Group is liable to make payments to personnel who work for a minimum of 5 years and whose employment is terminated without due cause in accordance with the Regulations with regards to Employees Employed in the Press Sector. The maximum payable amount is 30 days’ flat salary for each year of service. Employment termination benefit liabilities are not subject to any funding and there are no legal requirements for funding of these liabilities. Provision for employment termination benefits is calculated by estimating the present value of the future probable obligation arising from the retirement of the employees of Doğan Yayın Holding and its subsidiaries, joint ventures and associates registered in Turkey. CMB’s Financial Reporting Standards require developments on the actuarial valuation methods to estimate the Group’s employee termination benefit liability under defined benefit plans. Accordingly, the following actuarial assumptions were used in accordance with the report prepared by the actuarial firm in the calculation of the total provision. -
discount rate is applied as 7,69% (31 December 2011: 10,01%), inflation rate applied as 4,98% (31 December 2011: 5,10%) and rate of increase in real wages applied as 4,98% in the calculation.
- the calculation is made based on the maximum salary rate of TL 3.033,98 effective as of 31 December 2012 (31 December 2011: TL 2.731,85). -
age of retirement is based on the minimum retirement age.
-
CSO 1980 mortality table is used for male and female mortality rates.
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 22-PROVISION FOR EMPLOYMENT BENEFITS (Continued) The movements in the provision for employment termination benefits for the periods ended 31 December 2012 and 2011 are as follows:
1 January Actuarial loss Current period service cost from continued operations Net interest expense regarding defined benefit plan Deficit related to payments/ decrease in benefits/lay off Payments during the period from continued operations Current period service cost from discontinued operations Reversal of provisions for discontinued operations 31 December
31 December 2012
31 December 2011
(42.541) (37.918) (5.326) (4.356) (3.387) 11.550 (81.978)
(42.135) (95) (12.215) (1.941) 8.208 (6.179) 11.816 (42.541)
Total costs excluding the actuarial loss regarding employment benefits are presented in consolidated statement of income prepared as of 31 December 2012. As explained in Note 2.1.6, actuarial loss amounting to TL 37.918, is presented in other comprehensive income statement as of 31 December 2012. Total costs regarding employment benefits as of 31 December 2011 are presented in consolidated statement of income as explained in note 2.1.7 a. NOTE 23-OTHER ASSETS AND LIABILITIES The details of other assets and other liabilities at 31 December 2012 and 31 December 2011 are as follows: Other current assets:
31 December 2012
31 December 2011
19.179 17.256 16.627 11.553 9.120 8.717 6.145 5.413 6.810
15.377 15.803 27.729 5.347 63.087 12.213 4.158 8.177 3.263 5.821
100.820
160.975
Less: provision for other doubtful receivables (Note 5) Less: provision for impairment on programme stocks (Note 28)
(747) (1.081)
(833) (1.081)
Total
98.992
159.061
Advances given Prepaid expenses Value Added Tax (“VAT”) receivables (Note 2.3.1 b) Work advances Programme stocks Personnel advances Income accruals Prepaid taxes Blocked deposit Other Sub-total
188 - 189
DOĞAN YAYIN HOLDİNG ANNUAL REPORT 2012
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 23-OTHER ASSETS AND LIABILITIES (Continued) Other non-current assets: Value Added Tax (“VAT”) receivables (Note 2.3.1 b) Advances given and prepayments (1) Prepaid expenses Advances given for purchase of property, plant and equipment Blocked deposits Other Total
(1)
31 December 2012
31 December 2011
127.518 20.439 6.397 186 17 216
106.043 31.980 1.564 6.716 501
154.773
146.804
Advances given and prepayments amounting to TL 20.439 (31 December 2011: TL 31.980) consist of prepayments made by Doğan TV Holding, one of the subsidiaries of Doğan Yayın Holding, for UEFA (Union Européenne de Football Association or Union of European Football Associations) Champions League qualifying games and UEFA Cup qualifying games of certain Spor Toto Super League teams between 2008 and 2020. In accordance with the agreements, prepayments made for the related games will be refunded to Doğan TV Holding in the cancellation of games.
Other current liabilities: Provision for unused vacation liability Deferred revenue Expense accruals Provision for broadcasted programmes Tax liability in dispute regarding 6111 law Tax base increase liability regarding 6111 law Total
31 December 2012
31 December 2011
30.883 24.774 17.105 1.076 73.838
29.327 32.106 16.834 3.306 264.484 9.405 355.462
31 December 2012
31 December2011
29.327 8.914 610 9 (6.545) (1.432) 30.883
26.941 15.370 321 (9.233) (3.742) 617 (947) 29.327
31 December 2012
31 December 2011
12.364 12.364
592 391.076 13.907 405.575
The movements in the provision for unused vacation for the periods ended 31 December are as follows:
1 January Additions in the current period Acquisition of subsidiary Currency translation difference Payments related with provisions Reversal of provisions in the current period from discontinued operations Additions in the current period from discontinued operations Disposal of subsidiary 31 December Other non-current liabilities:
Deferred income Tax liability in dispute regarding 6111 law Tax base increase liability regarding 6111 law Total
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 24-EQUITY Doğan Yayın Holding adopted the registered capital system and set a limit on its registered capital representing registered type shares with a nominal value of TL 1. Doğan Yayın Holding’s historical, authorized and issued capital at 31 December 2012 and 31 December 2011 is as follows:
Limit on registered capital Issued capital
31 December 2012
31 December 2011
3.000.000 2.000.000
2.000.000 2.000.000
Limit on registered issued capital of Doğan Yayın Holding has been registered and increased to TL 3.000.000 in 5 June 2012. Doğan Yayın Holding has no privileged shares. The ultimate shareholder of Doğan Yayın Holding is Aydın Doğan and Doğan Family (Işıl Doğan, Arzuhan Yalçındağ, Vuslat Sabancı, Hanzade V.Doğan Boyner and Begümhan Doğan Faralyalı) and the shareholders of Doğan Yayın Holding and the historical values of shares in equity at 31 December 2012 and 31 December 2011 are as follows:
Shareholders Doğan Holding (1) Doğan Family Adilbey Holding (2) (3) Publicly traded on Borsa İstanbul (4) Issued capital Adjustments to issued capital Total
(1)
(2)
(3)
(4)
Share (%)
31 December 2012
Share (%)
31 December 2011
75,59 2,31 0,15 21.95 100,00
1.511.829 46.183 3.000 438.988 2.000.000
75,59 2,31 22,10 100,00
1.511.829 46.183 441.988 2.000.000
95.781
95.781
2.095.781
2.095.781
75,59% of the shares of Doğan Yayın Holding are owned by Doğan Holding, which corresponds to 19,00% of the publicly available shares of Doğan Yayın Holding in the Stock Exchange as of 31 December 2012 and 31 December 2011. As a result of the purchasing transaction of 3.000.000 units from Borsa İstanbul as of 5 September 2012, Adilbey Holding A.Ş. owns 0,15% (TL 3.000) shares in the share capital of Doğan Yayın Holding. 3.000.000 “publicly available” shares of Doğan Yayın Holding (exact) with a nominal value of TL 1 each have been acquired by Doğan Holding (parent company of the Group) from Adilbey Holding A.Ş. as of 20 February 2013 in consideration of TL 0,86 (exact) per share in cash independent from Borsa İstanbul transactions based on weighted average transaction amount at the first session provided that the transaction price remains within the margins set out in accordance with the Circular “Principles of Establishment and Operation of Wholesale Market” of Borsa İstanbul. As a result of the above-mentioned transaction disclosed at PDP on 20 February 2013, Doğan Holding’s share in Doğan Yayın Holding has become 75,74%. In accordance with the Capital Markets Board’s (the “CMB”) Resolution No: 21/655 issued on 23 July 2010, it is regarded that 20,95% of the shares (31 December 2011: 20,57%) are outstanding as of 31 December 2012 based on the Central Registry Agency’s (“CRA”) records. 41,11% of Doğan Yayın Holding’s shares (31 December 2011: 34,01%) are publicly available as of 31 December 2012 (Note 1).
The Capital Market Board has approved the Board of Director of Doğan Yayın Holding’s application filed for the listing of shares to be issued in relation to a 100% of cash increase of its issued capital from TL 1.000.000 to TL 2.000.000 within TL 2.000.000 of its registered capital upon the Group’s resolution issued on 8 April 2011 and had been completed with the register of Trade registry as of 6 July 2011.
190 - 191
DOĞAN YAYIN HOLDİNG ANNUAL REPORT 2012
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 24 – EQUITY (Continued) Adjustment to share capital represents the difference between cash and cash equivalent contributions to the total amounts adjusted for inflation added to issued share capital issued and amounts before inflation adjustment. Restricted reserves Restricted reserves are reserved from the prior period profit due to legal or contractual obligations or for certain purposes other than the profit distribution (for example, to obtain the tax advantage of gain on sale of associates). The legal reserves consist of first and second reserves, appropriated in accordance with the Turkish Commercial Code (TCC). The first legal reserve is appropriated out of statutory profits at the rate of 5% per annum, until the total reserve reaches 20% of the Company’s issued capital. The second legal reserve is appropriated at the rate of 10% per annum of all cash distributions in excess of 5% of the issued capital. Under the TCC, the legal reserves can only be used to offset losses and are not available for any other usage unless they exceed 50% of issued capital. The afore-mentioned amounts shall be classified in “Restricted Reserves” in accordance with the CMB’s Financial Reporting Standards. The details of restricted reserves at 31 December 2012 and 31 December 2011 are as follows: Restricted reserves Gain on sale of subsidiary’s shares Legal reserves Total
31 December 2012
31 December 2011
438.708 21.693 460.401
438.708 21.693 460.401
Investment Property Revaluation Reserves Real estates recognized as property, plant and equipment in prior periods, can be transferred to investment property due to changes in use. The Group has reclassified some of its properties in 2012 as investment property and has chosen to account such investment properties at fair value. Accordingly, fair value increase at the initial transfer amounting to TL 1.334 is recognized as revaluation reserve under shareholders equity. Capital Reserves and Retained Earnings Subsequent to the first inflation adjusted financial statements, equity items such as; “Capital, Emission Premiums, Legal Reserves, Statutory Reserves, Special Reserves and Extraordinary Reserves” are carried at carrying value in the balance sheet and their adjusted values are collectively presented in equity. All equity inflation adjustments are only available for bonus shares or loss deduction; and carrying value of extraordinary reserves are only available for cash profit distribution or loss deduction. In accordance with the Communiqué No:XI-29 and related announcements of the CMB, effective from 1 January 2008, “Share capital”, “Restricted Reserves” and “Share Premiums” shall be carried at their statutory amounts. The valuation differences resulted due to the application of the requirements set out in the communiqué (such as, inflation adjustment differences) shall be disclosed as follows: • •
if the difference is due to the inflation adjustment of “Paid-in Capital” and not yet been transferred to capital, it should be classified under “Inflation Adjustment To Share Capital”; if the difference is due to the inflation adjustment of “Restricted Reserves” and “Share Premium” and the amount has not been utilized in dividend distribution or capital increase yet, it shall be classified under “Retained Earnings”. Other equity items are carried at the amounts valued in accordance with CMB’s Financial Reporting Standards. Capital adjustment differences can only be included to capital.
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 24-EQUITY (Continued) Dividend Distribution Listed companies of whose shares traded on the ISE, are required to distribute their dividends in accordance with the following criteria set out by the CMB: Upon the CMB’s Resolution No: 02/51 issued on 27 January 2010, there is no minimum level of dividend distribution requirement for the listed companies at the stock exchange for profits arising from operations in 2009. In this respect, companies will distribute their profits under the scope of the requirements of the CMB’s Communiqué No. IV-27, their own articles of association and their own publicly disclosed profit distribution policies. Also, based on the CMB’s resolution no: 7/242 issued on 25 February 2005, if all of the profit distribution amount determined in accordance with the regulation set out on the CMB’s minimum profit distribution requirement over the net distributable profit calculated based on the CMB regulations can be recovered from the distributable profit amount in the statutory records, the related amount will be fully distributed, or otherwise all the net distributable profit in the statutory records will be distributed accordingly. No dividend distribution will be made if financial statements or statutory records prepared in accordance with the CMB standards reflect any loss amount for the period. At the board meeting of the Board of Directors of Doğan Yayın Holding at 4 June 2012, it is concluded that; -
Under the requirements of the CMB’s Communiqué Serial:XI, No.29, based on the audited consolidated financial statements prepared for the period 01.01.2011-31.12.2011 in accordance with International Accounting Standards and International Financial Reporting Standards, the Group’s “Net Loss for the Period” is calculated as TL 1.195.716, considering its “current period tax expense”, “deferred tax expense”, “non-controlling interests” and “net income after tax from discontinued operations”. Therefore, the Group has decided not to distribute any profits for the period 01.01.2011-31.12.2011 based on the CMB’s profit distribution requirements. As TL 230.373 of net loss for the period is calculated in relation to the financial records filed under the Turkish Commercial Code (TCC) and Tax Procedure Law for the period 01.01.2011-31.12.2011, no statutory reserves would be allocated under TCC.
The CMB’s requires the disclosure of total amount of net profit in the statutory records and other resources which may be subject to distribution in the financial statements prepared in accordance with Communiqué Serial XI, No: 29. As of the balance sheet date, the Company’s gross amount of resources that may be subject to the profit distribution based on the statutory records amounts to TL 117.739.
192 - 193
DOĞAN YAYIN HOLDİNG ANNUAL REPORT 2012
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 25-SALES AND COST OF SALES Sales revenue The details of operating revenue for the periods ended 31 December 2012 and 2011 are disclosed in Note 5-Segment Reporting. The details of sales are as follows: 2012
2011
Gross sales - Domestic sales - Sales abroad (1) Sales returns and discounts
2.528.637 406.135 (409.183)
2.402.696 418.260 (483.136)
Total
2.525.589
2.337.820
(1)
Because the sales abroad amount consists of the sales of the subsidiaries of the Group abroad, it differs from the export amount in the foreign currency position table in the Note 35.
The details of sales for the publishing segment are as follows:
Advertising revenue Circulation and printing revenue Other (1) Total
(1)
2012
2011
686.379 348.908 365.048
698.700 337.157 332.790
1.400.335
1.368.647
2012
2011
604.500 465.099
618.381 289.936
1.069.599
908.317
Other sales related to publishing segment consist of distribution, sale of paper and other revenues.
The details of sales for the broadcasting segment are as follows:
Advertising revenue Other (1) Total
(1)
TL 304.675 (31 December 2011: TL 93.220) of other sales related to broadcasting segment consist of the subscription revenues of D smart.
The details of sales for the other segment are as follows: 2012
2011
Gsm card sales revenue and other revenue
55.655
60.856
Total
55.655
60.856
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 25-SALES AND COST OF SALES (Continued) Cost of sales The details of cost of sales for the business segments for the periods ended 31 December 2012 and 2011 are as follows: 2012
2011
(954.423) (757.373) (43.861)
(941.674) (653.148) (53.952)
(1.755.657)
(1.648.774)
2012
2011
Cost of trade goods sold Payroll and news production costs Paper costs Printing, production and other raw material costs Depreciation and amortization (Note 15,16,17) (1) Commissions Other
(263.597) (229.773) (216.541) (111.810) (38.027) (19.289) (75.386)
(258.028) (222.795) (233.396) (97.839) (41.415) (20.406) (67.795)
Total
(954.423)
(941.674)
Publishing Broadcasting Other Total The details of cost of sales for the publishing segment are as follows:
(1) TL 792 of depreciation and amortization expenses derived from the subsidiary shares of Bağımsız Gazeteciler and all Milliyet brand, royalties and internet domain names on 2 May 2011 is recognized under the discontinued operations account on 31 December 2011 financials.
194 - 195
DOĞAN YAYIN HOLDİNG ANNUAL REPORT 2012
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 25-SALES AND COST OF SALES (Continued) Cost of sales (Continued) The details of cost of sales for the broadcasting segment are as follows: 2012
2011
Television programme production costs Personnel expenses Cost of trade goods sold ADSL receiver costs Depreciation and amortization (Note 15,16,17) (1) Amortization expenses of television programme rights (Note 17) (1) Satellite usage fees RTUK share in advertisement (2) Other
(345.612) (83.629) (76.962) (63.876) (47.612) (34.949) (23.784) (17.701) (63.248)
(312.338) (71.708) (38.494) (77.108) (37.951) (52.505) (20.450) (19.042) (23.552)
Total
(757.373)
(653.148)
(1)
(2)
TL 6.893 of amortization expenses of television programme rights derived from the subsidiary and brand disposal of Işıl TV on 3 November 2011 and TL 1.422 of depreciation and amortization amount is recognized under the discontinued operations account on 31 December 2011 financials. 3% of monthly gross commercial communication income, excluding programme support income, of media service providers are classified as Supreme Council income in accordance with Article 41 (ç) of the “Establishment and Broadcasting of Radio and Television Companies” Law, which was published in the Official Gazette No: 27863 on March 2011. Accordingly, 5% of commercial income that was previously retained as per the revoked Law No: 3984, has been decreased to 3% with the effect of the new requirement.
The details of cost of sales for other segment are as follows: 2012
2011
Gsm card sales expenses and other expenses
(43.861)
(53.952)
Total
(43.861)
(53.952)
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 26-MARKETING, SALES AND DISTRIBUTION EXPENSES, GENERAL ADMINISTRATIVE EXPENSES The details of marketing, sales and distribution expenses and general administration expenses for the periods ended 31 December 2012 and 2011 is summarized below: Marketing, sales and distribution expenses:
Advertisement expenses Personnel expenses Transportation, storage and travel expenses Promotion expenses Communication expenses Depreciation and amortization (Note 15,16,17) (1) (2) (3) Services outsourced Consulting expenses Dealer shop premium expenses Rent expenses Copyright license expenses Other Total
2012
2011
(78.945) (71.307) (50.219) (22.182) (10.504) (9.507) (7.482) (6.651) (5.825) (3.405) (2.698) (21.717)
(76.067) (67.923) (48.211) (26.308) (4.220) (1.100) (11.922) (5.109) (17.323) (2.416) (2.785) (20.292)
(290.442)
(283.676)
TL 44 of depreciation and amortization expenses derived from the subsidiary shares of Bağımsız Gazeteciler and brand disposal Milliyet Newspaper on 2 May 2011 is recognized under the discontinued operations account on 31 December 2011financials. (2) TL 8 of depreciation and amortization amount derived from the sale of Star TV on 3 November 2011 is recognized under the discontinued operations account in 31 December 2011 financials. (3) TL 6.573 of depreciation and amortization amount derived from the sale of Doğan Müzik Kitap on 1 January 2011 is recognized under the discontinued operations account in 31 December 2011 financials. (1)
General administrative expenses:
Personnel expenses Depreciation and amortization (Note 15,16,17) (1) Consulting expenses Services outsourced Rent expenses Travel expenses Various taxes Communication expenses Repair and maintenance expenses Representation expenses Other Total (1)
2012
2011
(147.871) (50.407) (41.130) (17.511) (16.040) (12.412) (10.086) (4.010) (2.904) (1.736) (23.848)
(162.994) (51.737) (25.512) (21.276) (15.762) (13.726) (10.043) (4.214) (2.948) (1.516) (11.767)
(327.955)
(321.495)
TL 860 of depreciation and amortization expenses derived from the subsidiary shares of Bağımsız Gazeteciler and all Milliyet brand, royalties and internet domain names on 2 May 2011 and TL 4.884 of depreciation and amortization derived from the sale of Işıl Televizyon Yayıncılık A.Ş. (Star TV) on 3 November 2011 and TL 670 of depreciation and amortization expenses derived from the sale of Doğan Müzik Kitap shares on 1 January 2012 is recognized under the discontinued operations account on 31 December 2011 financials.
196 - 197
DOĞAN YAYIN HOLDİNG ANNUAL REPORT 2012
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 27-EXPENSES BY NATURE As at 31 December 2012 and 2011, expenses are disclosed by function and the details of the expenses are summarized in Note 25 and Note 26. NOTE 28-OTHER OPERATING INCOME/EXPENSES The details of other operating income and expenses for the periods ended 31 December 2012 and 2011 are as follows. Other operating income: 2012
2011
Gain on sales of property, plant and equipment (1) (2) Annulment indemnity of put option agreement of Turner (Note 11) Reversed provisions Usage of vat discount (Note 2.3.1 b) Gain on sale of subsidiary shares Rent income Reversal of provision of tax penalties (Note 20) Other
181.848 45.767 37.666 2.069 2.436 559 14.980
2.683 38.820 405 2.350 4.977 17.149
Total
285.325
66.384
TL 142.905 of the total amount consists of the sale of land including Hürriyet building at 27 January 2012. TL 142.905 consists of the sale of Hürriyet building in the current period (Note 31), TL 1.217 consists of the sale of printing centers of Pronto Moscow (Note 31), TL 28.099 consists of the sale of land in Esenyurt of the Group. Based on the Group management decision, Corporate tax law article 5-1/e exempted portion (75%) of total gain recorded to legal records for the amount of TL 126.235 on sale of Hürriyet building and land in Esenyurt, is not subjected to profit distribution for the period 1 January 2012 – 31 December 2012 in accordance with Tax Legislation, Capital market Board regulations and other related regulations and the related amount is recognized under a special fund in liability accounts. (2) TL 545 of gain on sale of property, plant and equipments is reclassified to discontinued operations as of 31 December 2011. (1)
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 28-OTHER OPERATING INCOME/EXPENSES (Continued) Other operating expenses:
Provision for doubtful receivables (Note 10) (3) (4) Impairment of goodwill (Note 18) Loss on sale of property, plant and equipment (5) Provision for lawsuits (Note 20) Donations Other penalties and compensations paid Provision for impairment on inventory (Note 12) Provision for impairment of programme rights and stocks (Note 17,23) Decrease in fair value of investment property Withholding tax provision (Note 20) Tax liability in dispute (1) Tax base increase (2) Impairment on terrestrial broadcasting rights (Note 17) Impairment of property, plant and equipment and intangible assets (Note 16,17) Competition authority penalty Other Total (4) (1)
(2)
(3)
(5)
(6)
2012
2011
(38.180) (21.278) (17.940) (12.460) (5.111) (4.414) (3.590) (1.868) (634) -
(31.056) (103.895) (5.719) (4.913) (4.856) (4.039) (674) (1.155) (603) (1.751) (841.489) (71.192) (23.500)
(10.514)
(19.978) (4.923) (34.557)
(115.989)
(1.154.300)
Tax liability in dispute is shown net of TL 21.196 amount of reversal of provisions for the previous years’ tax lawsuits as of 31 December 2011. TL 5.950 of tax base increase expense is recognized under the discontinued operations as of 31 December 2011. TL 4.027 of provision for doubtful trade receivables is recognized under the discontinued operations. The provision amount calculated for trade receivables transferred with the closing balance sheet in relation to the sale of Işıl TV as at 3 November is TL 3.375. This amount is measured at the net received amount and associated with the profit/loss on sale. TL 3.387 of loss on sale of property, plant and equipment is recognized under discontinued operations as of 31 December 2011. Doğan TV Holding, one of the subsidiaries of the Group, has booked an impairment of TL 23.500 as of 31 December 2011 for the broadcasting license of CNN Turk by taking into consideration the effects of the new RTSC Law No: 6112 and communique and regulations regarding the distribution of terrestrial broadcasting licences related with this law and taking into consideration redistribution of these licenses by giving priority to the license owners.
198 - 199
DOĞAN YAYIN HOLDİNG ANNUAL REPORT 2012
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 29-FINANCIAL INCOME The details of financial income for the periods ended 31 December 2012 and 2011 are as follows: 2012
2011
Foreign exchange gains Interest income on bank deposits (2) Unearned finance expense due to purchases with maturity and credit finance income (1) Interest income on marketable securities
145.275 56.331 50.492 516
159.613 49.549 49.966 125
Total
252.614
259.253
(1)
(2)
TL 7.195 of finance income from sales with maturity and credit finance income is recognized under discontinued operations at 31 December 2011. TL 1.793 of interest income on bank deposits is recognized under discontinued operations at 31 December 2011.
NOTE 30-FINANCIAL EXPENSES The details of financial expenses for the periods ended 31 December 2012 and 2011 are as follows:
Foreign exchange losses Interest expenses -Interest expense on bank borrowings (1) - Tax liability in dispute finance expense regarding 6111 law (2) - Tax base increase finance expense regarding 6111 law (2) Unearned finance income due to sales with maturity and credit finance expense (3) Bank commission expenses Other Total
2012
2011
(104.111)
(370.832)
(87.730) (19.418) (697) (16.246) (9.050) (12.906)
(112.407) (38.595) (1.372) (16.074) (10.223) (9.051)
(250.158)
(558.554)
TL 2.004 of interest expense on bank borrowings is recognized under discontinued operations at 31 December 2011. As of 28 September 2012, The Group has paid the total remaining liability which has been paid in every two months from 1 June 2011 including the 9th installments. During the payment, with the recalculation made by the tax office earned interest deduction is netted-off against finance expenses during the year. TL 25.896 of interest is netted-off against tax liability in dispute finance expense and TL 915 is netted-off against tax base increase finance expense from current period interest expense. (3) TL 4.745 of deferred finance expense from purchases with maturity is recognized under discontinued operations at 31 December 2011. (1)
(2)
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 31-ASSETS CLASSIFIED AS HELD FOR SALE AND DISCONTINUED OPERATIONS The details of the disposal of subsidiaries and assets and disposal plans on the property, plant and equipment of the Group as of 31 December 2012 and 31 December 2011 are as follows: a) Transfer of Shares of Subsidiaries and Asset Sale Group has recognized under discontinued operations in the consolidated financial statements as of 31 December 2012 for comparative purposes due to the sale and transfer of shares of subsidiary and asset sale completed as of and for the period ended 31 December 2012 and for the year ended 31 December 2011. Net loss from discontinued operations as of 31 December 2011 is TL 134.954 and the details are as follows: Doğan Müzik Kitap Sale 49.999.996 (exact) shares of Doğan Müzik Kitap Mağazacılık ve Pazarlama A.Ş., a subsidiary of the Group, with a nominal value of TL 1 (exact) each, in which it holds 99,99% participation amounting to TL 39.891 of paid capital from TL 50.000 capital has been sold to Doğan Holding as of 16 January 2012 in consideration of TL 139.404 which is determined by two different valuation reports prepared by independent valuation firms. The related transaction is considered as the controlling party transaction and income amounting to TL 107.990 is recognized in equity. For comparative purposes, operating results of Doğan Müzik Kitap as of 31 December 2011 are also classified under the discontinued operations account in the consolidated financial statements prepared as of 31 December 2012.
Sales Cost of sales (-)
31 December 2011 287.536 (181.723)
Gross profit
105.813
Marketing, sales and distribution expenses (-) General administration expenses (-) Other operating income Other operating expenses Financial income Financial expenses
(86.215) (8.967) 1.854 (893) 2.937 (6.584)
Profit before income tax from discontinued operations Tax expense from discontinued operations Current period tax charge Deferred tax (charge)/ benefit Net profit from discontinued operations prior to sale proceeds from the disposal of brand and subsidiary shares Gain on sale of brand and subsidiary shares Sales income tax expense Discontinued operations Net profit from discontinued operations (after income taxes)
7.945 (5.269) (1.409) (3.860) 2.676 -
2.676
DOĞAN YAYIN HOLDİNG ANNUAL REPORT 2012
200 - 201
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 31-ASSETS CLASSIFIED AS HELD FOR SALE AND DISCONTINUED OPERATIONS (Continued) a) Transfer of Shares of Subsidiaries and Asset Sale(Continued) Sale of Doğan Müzik Kitap (Continued) As of 31 December 2012, the Group has TL 107.990 of subsidiary shares’ sales income from the sale and transfer of shares of Doğan Müzik Kitap Mağazacılık ve Pazarlama A.Ş.’s as at 16 January 2012. The related sales income amount is recognized under equity in accordance with IFRS. 31 December 2011 Amount received Carrying value of net assets
139.404 (31.414)
Sales income
107.990
Net Amount received from sale of brand and subsidiary shares 31 December 2011 Current assets Cash and cash equivalents Trade receivables Inventories Other current assets Non-current assets Property, plant and equipment Intangible assets Other non-current assets Deferred tax asset Current liabilities Trade payables Other current liabilities Current year tax charge Non-current liabilities Provision for employee termination benefits Deferred tax liability Non-controlling interests Net assets disposed of from scope of consolidation Gain from sale
40.804 1.334 51.052 3.062 16.938 3.221 89 20 (78.416) (5.503) (898) (136) (35) (118) 31.414 107.990
Net Amount received from sale of brand and subsidiary shares Cash and cash equivalents received Less: Cash and cash equivalents of sold subsidiary
139.404 (40.804) 98.600
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 31-ASSETS CLASSIFIED AS HELD FOR SALE AND DISCONTINUED OPERATIONS (Continued) a) Transfer of Shares of Subsidiaries and Asset Sale (Continued) Sale of Bağımsız Gazeteciler and Milliyet Brand The Group’s filed application in relation to the transfer of all brands, royalties and internet domain names (milliyet.com.tr; milliyet.com; milliyetemlak.com.tr etc.) pertaining to the Milliyet Newspaper in consideration of USD 47.960 (TL 73.595) plus VAT and its 1.289.996 shares of Bağımsız Gazeteciler Yayıncılık A.Ş. with a nominal value of TL 100 each, comprising all brands, royalties and domain names pertaining to the Vatan Newspaper, in which it holds 99,99% participation amounting to TL 129.000 of capital in consideration of USD 26.000 (TL 39.897) to DK Gazetecilik ve Yayıncılık A.Ş., a joint venture company formed by Demirören and Karacan Group was approved by the Competition Authority on 28 April 2011 and the related transfer transactions were completed as of 2 May 2011 upon the satisfaction of all closing conditions. The Group and DK Gazetecilik ve Yayıncılık A.Ş. have a mutual understanding of the following: transferring of all personnel related to all brands, royalties and internet domain names pertaining to the Milliyet Newspaper with all their rights; share transfer of Bağımsız Gazeteciler Yayıncılık A.Ş. as of the closing balance sheet date prepared on 2 May 2011 by offsetting any of its liabilities/encumbrances and any receivables; if such treatment is inapplicable, offsetting liabilities that cannot be recoverable from receivables against the share transfer consideration by the deduction of liabilities against the first installment payments, or if receivables are higher than liabilities, addition of difference amount between liabilities and receivables to the sale price; restricting the total liability that may arise from termination pay, retirement pay and leave of absence to 15% in the termination of employment contracts by DK Gazetecilik ve Yayıncılık A.Ş. and Bağımsız Gazeteciler Yayıncılık A.Ş. during the share transfer period. As a result of this mutual understanding, TL 3.577 and TL 1.765 of discount have been applied to the Milliyet Newspaper and Bağımsız Gazeteciler Yayıncılık A.Ş., respectively, over the sale price as the cost of termination of employment contracts. In addition, TL 3.269 of discount has been applied over the sale price of Bağımsız Gazeteciler Yayıncılık A.Ş. as a liability amount that cannot be recoverable from receivables. The payment schedule will include TL 20.000 of advance payment at the sign date of the contract (20 April 2011), TL 20.000 of cash payment no later than 31 May 2011 and 40 monthly installments of the remaining portion starting from 2012. For installment payments in 2012, 2013, 2014 and 2015, as of closing date, Libor+2,5, Libor+3,5, Libor+4,5 and Libor+5,5 interest rate will be applied, respectively. Libor interest rate is applied for 6 months and this rate is calculated every six months and is determined on a fix rate basis for the following six-month period. TL 20.000 of cash payment was made on 31 May 2011, less any discounts applied and closing balance sheet reconciliations mentioned above. The payment of the remaining USD 47.893 is received as 40 bonds and classified as USD 7.184 of short term bond and USD 40.709 of long term bond as of 2 May 2011.
DOĞAN YAYIN HOLDİNG ANNUAL REPORT 2012
202 - 203
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 31-ASSETS CLASSIFIED AS HELD FOR SALE AND DISCONTINUED OPERATIONS (Continued) a) Transfer of Shares of Subsidiaries and Asset Sale(Continued) Sale of Bağımsız Gazeteciler and Milliyet Brand (Continued) Operating results and sale proceeds of subsidiaries up until disposal of Bağımsız Gazeteciler and all brands, royalties and internet domain names of Milliyet are detailed as follows:
Sales Cost of sales (-) Gross profit
30 April 2011 49.426 (37.149) 12.277
Marketing, sales and distribution expenses (-) General administration expenses (-) Other operating expenses (net) Financial expenses (net)
(18.293) (6.265) (2.629) (797)
Loss before income tax from discontinued operations
(15.707)
Tax (expense) from discontinued operations Current period tax charge Deferred tax charge Net loss from discontinued operations prior to sale proceeds from the disposal of brand and subsidiary shares
(699) (699) (16.406)
Gain on sale of brand and subsidiary shares Sales income tax (expense)
16.589 (6.541)
Discontinued operations Net (loss) from discontinued operations after income taxes
(6.358)
Cash used in discontinued operations: 30 April 2011 Net cash used in operating activities Net cash provided by investing activities Net cash used in financing activities Net cash outflow
1.151 251 (940) 462
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 31-ASSETS CLASSIFIED AS HELD FOR SALE AND DISCONTINUED OPERATIONS (Continued) a) Transfer of Shares of Subsidiaries and Asset Sale (Continued) 30 April 2011 Amount received Carrying value of net assets Sales income
93.655 (77.066) 16.589
Net Amount received from sale of brand and subsidiary shares Cash and cash equivalents received Notes receivables received Less: Cash and cash equivalents of sold subsidiary
27.424 66.231 (187) 93.468
Net book value of assets disposed 30 April 2011 Current assets Cash and cash equivalents Trade receivables Inventories Other current assets Non-current assets Property, plant and equipment Intangible assets Goodwill (Note 18) Investment property Other non-current assets Current liabilities Financial borrowings Trade payables Other taxes and funds payables Provisions Other current liabilities Non-current liabilities Other payables Provision for employee termination benefits Deferred tax liability
4.516 187 1.848 1.345 1.136 102.598 1.128 51.952 47.757 159 1.602 15.300 3.252 3.708 3.547 159 4.634 14.747 6 11.092 3.649
Net assets disposed of from scope of consolidation
77.066
Gain from sale
16.589
DOĞAN YAYIN HOLDİNG ANNUAL REPORT 2012
204 - 205
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 31-ASSETS CLASSIFIED AS HELD FOR SALE AND DISCONTINUED OPERATIONS (Continued) a) Transfer of Shares of Subsidiaries and Asset Sale (Continued) Star TV Sale 391.500.000 shares of Işıl Televizyon Yayıncılık A.Ş. (Star TV), one of the subsidiaries of the Group, with a nominal value of TL 1 each, which represent 99,99% of capital amounting to TL 391.500 were sold to Doğuş Yayın Grubu in consideration of USD 327.000. USD 151.000 of the total amount has been paid in cash at the date of the completion of share sale and transfer subsequent to obtaining the required legal permits and approvals. The remaining amount of USD 176.000 will be payable as of 2 November 2013. Annual interest rate applicable for the related amount is 3,58 % and interest amounts are accrued at the end of each month. Total interest accrual for the related receivable amounts to USD 12.777 of which USD 5.811 of this balance has been collected and USD 1.610 (TL 2.874) is recognized as accrual as of 31 December 2012. All income and expenses attributable to Işıl Televizyon Yayıncılık A.Ş. relate to the Group by 3 November 2011. The Group also made its best effort to keep a balance in between the receivable and payable accounts associated with Işıl Televizyon Yayıncılık A.Ş. as of 3 November 2011. If these accounts are imbalanced, parties acknowledge and commit to a deduction of payable amounts that cannot be compensated through receivables against the share transfer price or an addition of receivable-payable difference balance to the sale price where receivables exceed payables. Therefore, sale price is revised accordingly and TL 16.000 is added to the sale price. As of 31 December 2011, operating results and profit from the sale of shares of Işıl TV are presented below:
Sales Cost of sales (-)
31 October 2011 167.038 (204.796)
Gross loss
(37.758)
General administrative expenses (-) Other income Other expenses Financial income Financial expenses
(39.319) 4.071 (6.792) 16.539 (13.417)
Loss before income tax from discontinued operations
(76.676)
Tax (expense)/ income from discontinued operations Current period tax charge Deferred tax (charge)/ benefit Net loss from discontinued operations prior to sale proceeds from the disposal of brand and subsidiary shares
(3.718) (3.718) (80.394)
Gain on sale of subsidiary shares Sales income tax expense
229.260 (10.230)
Discontinued operations Net income from discontinued operations after income taxes
138.636
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 31-ASSETS CLASSIFIED AS HELD FOR SALE AND DISCONTINUED OPERATIONS (Continued) a) Transfer of Shares of Subsidiaries and Asset Sale (Continued) Star TV Sale (Continued) Cash used in discontinued operations:
31 December 2011
Net cash provided by operating activities Net cash provided by investing activities Net cash used in financing activities
25.611 254.266 (13.520)
Net cash inflow
266.357
TL 229.260 of subsidiary shares’ sales income is recognized in the consolidated statement of income of the Group prepared as of 31 December 2011, from the sale and transfer of shares of Işıl Televizyon Yayıncılık A.Ş.’s as at 3 November 2011. 31 October 2011 Amount received Carrying value of net assets Sales income
592.855 (363.595) 229.260
Net Amount received from sale of brand and subsidiary shares Cash and cash equivalents received Notes receivables received Less: Cash and cash equivalents of sold subsidiary
267.477 325.378 (1.120) 591.735
Net book value of assets disposed
31 October 2011
Current assets Cash and cash equivalents Trade receivables Inventories Other current assets Non-current assets Property, plant and equipment Intangible assets Goodwill (Note 18) Other non-current assets Current liabilities Financial borrowings Trade payables Other taxes and funds payables Provisions Other current liabilities Non-current liabilities Provision for employment termination benefits Deferred tax liability
53.030 1.120 39.094 302 12.514 361.845 7.649 115.169 238.925 102 40.721 13.520 14.925 6.436 5.840 10.559 725 9.834
Net assets disposed of from scope of consolidation
363.595
Gain from sale
229.260
DOĞAN YAYIN HOLDİNG ANNUAL REPORT 2012
206 - 207
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 31-ASSETS CLASSIFIED AS HELD FOR SALE AND DISCONTINUED OPERATIONS (Continued) b) Assets held for sale OOO Pronto Moscow As OOO Pronto Moscow, one of the subsidiaries of the Group, ceases its operations in its printing facilities in 2011, the Group has decided to dispose of some of its fixed assets in its subsidiaries. These assets which are expected to be disposed of within twelve-month period are reclassified as assets held for sale and presented separately in the balance sheet. Property, plant and equipment reclassified as asset held for sale are as follows: Property, Plant and Equipment
31 December 2011
Cost Land and land improvements Buildings Machinery and equipment Furniture and fixtures Construction in progress
1.424 3.231 13.599 94 147 18.495
Accumulated depreciation Land and land improvements Buildings Machinery and equipment Furniture and fixtures
(441) (11.716) (94) (12.251)
Net book value as of 31 December 2011
6.244
Currency translation differences
(331)
Net book value of assets disposed of
5.913
Sales amount of property, plant and equipment (1)
7.130
Gain on sale of property, plant and equipment
1.217
(1)
In April 2012, the Company’s fixed assets classified as non-current asset held for sale as of 31 December 2011 were sold in consideration of RBL 121 million (TL 7.130).
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 31-ASSETS CLASSIFIED AS HELD FOR SALE AND DISCONTINUED OPERATIONS (Continued) b) Assets held for sale (Continued) Sale of Property, Plant and Equipment of Hürriyet Hürriyet, a subsidiary of the Group, sold the properties that are previously classified as “asset held for sale” that consist of 58.609,45 m2 land and buildings, including the building that has been used as company headquarters for 28 years (Hürriyet Media Towers) in Bağcılar, Istanbul to Nurol Gayrimenkul Yatırım Ortaklığı at February 2012 in consideration of USD 127.500 with maturity. The sales transaction has been completed as of 1 February 2012 and USD 17.500 of the sales amount was paid in cash at the date of the transfer of title. The remaining portion of USD 110.000, which will be paid through bonds, is payable starting from 6 March 2012 in 32 equal installments having 3,5% interest rate. As of 31 December 2012, the Company has made a total collection of USD 37.734 (USD 34.375 of principal amount and USD 3.359 of interest). As of 31 December 2012, interest accrual income amounts to USD 3.248. The remaining portion amounting to USD 75.625 and its interest accrual for the related period amounting to USD 217 are recognized as other short and long term receivables (Note 11). In the preparation of financial statements in accordance with IFRS, Hürriyet has classified the related properties as asset held for sale under IFRS 5. For held for sale investments, no impairment loss is recognized in cases where profit on sale exceeds the carrying value of related asset. Property, plant and equipment reclassified as asset held for sale is as follows: Property, Plant and Equipment Cost Land and land improvements Buildings
31 December 2011
10.476 97.647 108.123
Accumulated depreciation Land and land improvements Buildings
(318) (33.362) (33.680)
Net book value as of 31 December 2011 Change in net book value (1) Net book value of assets disposed of
74.443 4.276 78.719
Sales amount of property, plant and equipment
221.624
Gain on sale of property, plant and equipment
142.905
(1)
As a result of the review of the non-current assets related with the building sold, it has been decided that net book value of fixed assets amounting to TL 4.276 are in the scope of the related sale.
208 - 209
DOĞAN YAYIN HOLDİNG ANNUAL REPORT 2012
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 31-ASSETS CLASSIFIED AS HELD FOR SALE AND DISCONTINUED OPERATIONS (Continued) c) Disposal of subsidiary Hürriyet, one of the subsidiaries of the Group, has disposed its shares in its subsidiary, Rosprint in 2012, in accordance with the legal framework of Russia. Group, has transferred its shares in its subsidiary, Pronto Peterburg in 2011 to the company, in accordance with the legal framework of Russia. Net book value of assets disposed
31 December 2012
31 December 2011
Current assets Cash and cash equivalents Trade receivables Inventories Other receivables Other current assets
34 5 52 209
159 425 53 85 179
Non-current assets Property, plant and equipment Intangible assets Deferred tax asset
246 68
161 28 204
-
(393) (317) (599)
614
(15)
Sales amount: Cash and cash equivalents received Sales amount to be collected in the subsequent period
1.162
189
Net cash inflow from sales: Consideration paid in cash and cash equivalents (Less) cash and cash equivalents disposed of
(34)
(159)
Current liabilities Trade payables Provisions Other current liabilities
Net book value of assets disposed
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 32-CURRENT AND DEFERRED TAXES Turkish tax legislation does not permit a parent company and its subsidiaries to file a consolidated tax return. Therefore, provisions for taxes, as reflected in these consolidated financial statements, have been calculated on a separate-entity basis for the all subsidiaries consolidated on line-by-line basis. Corporate tax Corporate tax liabilities for the periods ended 31 December 2012 and 31 December 2011 are as follows:
Corporate and income taxes payable (1) Prepaid taxes Taxes payable
(1)
31 December 2012
31 December 2011
80.149 (72.622)
91.054 (58.123)
7.527
32.931
As of 31 December 2011, TL 18.180 of corporate and income taxes payable is related with the discontinued operations.
Turkey The Corporate Tax Law has been amended as of 13 June 2006 by Law No: 5520. The majority of the clauses of Law No: 5520 are effective as of 1 January 2006. Corporate tax rate for the fiscal year 2012 is 20% (2011: 20%) for Turkey. Corporate tax is payable at a rate of 20% on the total income of the Group after adjusting for certain disallowable expenses, corporate income tax exemptions (investment allowance, etc.) and corporate income tax deductions (such as research and development expenditures deduction). No further tax is payable unless there is dividend distribution. Dividends paid to non-resident companies having representative offices in Turkey and resident companies are not subject to withholding tax. Dividends paid to companies except for those companies are subject to 15% of withholding tax. An increase in capital via issuing bonus shares is not considered as a profit distribution and thus does not incur withholding tax. Companies calculate corporate tax quarterly at the rate of 20% over their corporate income and these amounts are disclosed by the end of 14th day and paid by the end of the 17th day of the second month following each calendar quarter-end. Advance taxes paid in the period are offset against the following period’s corporate tax liability. If there is an outstanding advance tax balance as a result of offsetting, the related amount may either be refunded in cash or used to offset against for other payables to the government. Tax Law No: 5024 “Amendments in Tax Procedural Law, Income Tax Law and Corporate Tax Law” published in the Official Gazette on 30 December 2003 requires income tax and corporate taxpayers whose earnings are determined based on the balance sheet to prepare their statutory financial statements by adjusting the non-monetary assets and liabilities for the changes in the general purchasing power of the Turkish Lira effective from 1 January 2004. In accordance with the provisions of the afore-mentioned Law provisions, in order to apply inflation adjustment, the cumulative inflation rate (TURKSTAT WPI) over the last 36 months and 12 months must exceed 100% and 10%, respectively. Inflation adjustment has not been applied as the related threshold has not been met as of 2004. In Turkey, there is no procedure for a final and definitive agreement on tax assessments. Companies file their tax returns by the 25th of the fourth month following the close of the financial year to which they relate.
DOĞAN YAYIN HOLDİNG ANNUAL REPORT 2012
210 - 211
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 32-CURRENT AND DEFERRED TAXES (Continued) Corporate tax (Continued) Tax authorities can review accounting records within five years and if they determine any errors on the accounting records, tax payable can be reassessed as a result of another tax assessment. Under the Turkish tax legislation, tax losses can be carried forward to offset against future taxable income for up to five years. Tax losses cannot be carried back to offset profits from previous years. As publicly disclosed on 19 April 2011, the Company plans to make use of the requirements set out in relation to “Tax Base Increase” in Law No: 6111 “Restructuring of some receivables and Social Security and General Health Insurance Law and Other Law Amending Certain Laws and Decrees”; therefore, 50% of losses attributable to the periods that are subject to tax base increase will not be offset against the income to be obtained in 2010 and subsequent periods. As of 31 December 2012, the Company has offset its financial losses attributable to the calculation of offsetting of tax asset against deductible financial losses or current tax provision in accordance with the above-mentioned principles. There are numerous exemptions in the Corporate Tax Law concerning the corporations. The exemptions that are related to the Group are as follows: Exemption for participation in subsidiaries Dividend income from participation in shares of capital of another fully fledged taxpayer corporation (except for dividends from investment funds participation certificates and investment partnerships shares) are exempt from corporate tax. Issued premiums exemption Gains from issued premiums derived from the disposal of sales at nominal values during incorporations and the capital increase of joint stock companies are exempt from corporate tax. Exemption for participation into foreign subsidiaries For companies participating in 10% or more of the capital of a non-resident limited liability or joint stock company,(except for those whose principal activity is financial leasing or investment property) for at least one year until the date of the income is generated and transferred to Turkey until the date of the filing of the corporate income tax return of the fiscal year in which the income is generated is exempt from corporation tax subject to those subsidiaries being subject to corporate income tax, or alike, in their country of legal residence or business centre at the rate of at least 15% (minimum corporate income tax applicable in Turkey for those whose principal activity is finance assurance or insurance).
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 32-CURRENT AND DEFERRED TAXES (Continued) Corporate tax (Continued) Exemption for sale of participation shares and property 75% of the gains derived from the sale of preferential rights, usufruct shares and founding shares from investment equity and real property which have remained in assets for more than two full years are exempt from corporate tax. For exemption, the relevant gain is required to be held in a fund account in liabilities for at least five years. The cost of the sale should be collected until the end of the second calendar year following the year of the sale. The details of effective tax laws in the Russian Federation where the Group performs a significant part of its operations are as follows: Russian Federation The corporate tax rate effective in the Russian Federation is 20% (2011: 20%). The Russian tax year is the calendar year and fiscal year ends other than the calendar year end are not applicable in the Russian Federation. The income taxes over gains are calculated annually. Tax payments are made monthly or depending on tax payer’s discretion, it can be made monthly or quarterly by using different calculation methods. Corporate tax declarations are given until 28th of March following the fiscal year end. According to the Russian Federation’s tax legislation, financial losses can be carried forward for 10 years to be deducted from future taxable income. Restriction on the deductible financial losses has been revoked as of 2007. Maximum amount that can be deducted in any year is limited to 30% of the taxable income (2011: 30%). Rights related to tax losses that have not been utilized in the related years are expired. Tax can be refunded in practice; however, refund is generally available following the outcome of legal procedures. Consolidated tax reporting or tax payment of parent companies or subsidiaries is not allowed. In general, dividend payments that are paid to foreign shareholders are subject to 15% withholding tax. Based on bilateral tax agreements, withholding tax rate can be decreased. The tax legislation of the Russian Federation is subject to various interpretations and changes frequently. The interpretation of tax legislation by tax authorities regarding the business of TME may differ from the management’s interpretation.
DOĞAN YAYIN HOLDİNG ANNUAL REPORT 2012
212 - 213
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 32-CURRENT AND DEFERRED TAXES (Continued) Corporate tax (Continued) The tax rates at 31 December 2012 applicable in the foreign countries, where the significant part of the Group’s operations are performed, are as follows: Country
Tax rates (%)
Germany (1) Hungary (2) Croatia Ukraine (3) Slovenia Belarus (4) Kazakhstan Netherlands (5)
28,0 19,0 20,0 21,0 20,0 18,0 20,0 25,0
Corporate tax rate is applied as 15% for Germany. An additional solidarity tax of 5,5% and municipal commerce tax varying in between 14-17% is also applied over the corporate tax. (2) Tax rate is 10% for the tax base up to initial 500 million Hungarian Forint, 19% for over 500 million Hungarian Forint. (3) From January 1, 2012, tax rate has decreased to 21% from 23%. Tax rate will be decreased to 19% in 2013 and 16% as of 1 January 2014. (4) From January 1, 2012, tax rate has decreased to 18% from 24%. (5) Tax rate is 20% for the tax base up to initial 200.000 EUR, 25% for over 200.000 EUR (1)
Deferred taxes The Group recognizes deferred tax assets and liabilities based upon temporary differences arising between their financial statements as reported under the CMB’s Financial Reporting Standards and their statutory tax financial statements. These differences usually result in the recognition of revenue and expenses in different reporting periods for the CMB’s Financial Reporting Standards and tax purposes. Deferred taxes are calculated on temporary differences that are expected to be realized or settled based on the taxable income in coming years under the liability method using tax rates enacted at the balance sheet dates. Deferred tax assets and liabilities are presented in net in the consolidated financial statements of the Group, since they are presented in net in the financial statements of subsidiaries and joint ventures, which are each individual tax payers. Temporary differences deferred tax assets and deferred tax liabilities at the table below are presented based on gross amounts.
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 32-CURRENT AND DEFERRED TAXES (Continued) The composition of cumulative temporary differences and the related deferred tax assets and liabilities in respect of items for which deferred tax has been provided at 31 December 2012 and 31 December 2011 using the enacted tax rates is as follows: Cumulative temporary differences 31 December 2012 31 December 2011 Carry forward tax losses Provision for doubtful receivables Provision for employee termination benefit and unused vacation Other
(150.159) (56.082) (112.486) (85.366)
(41.662) (29.834) (71.868) (70.700)
Deferred tax assets Difference between the tax base and carrying value of property, plant and equipment and intangible assets Fair value of investment property Other Deferred tax liabilities Deferred tax asset/ (liability), net
575.905 20.496 7.199
624.612 18.546 5.285
Deferred tax assets/(liabilities) 31 December 2012 31 December 2011 30.031 11.124 22.502 17.154
8.639 7.738 14.615 15.118
80.811
46.110
(115.811) (983) (1.510)
(119.586) (866) (969)
(118.304)
(121.421)
(37.493)
(75.311)
The deferred tax assets and liabilities of the Company and its subsidiaries are shown net in the financial statements. In the consolidated financial statements of the Group as of 31 December 2012, TL 87.541 (31 December 2011: TL 58.891) of deferred tax asset and TL 125.034 (31 December 2011: TL 134.202) deferred tax liability is recognised based on temporary differences arising between the carrying values and tax values of assets and liabilities in the financial statements. The Group recognised deferred tax assets over TL 150.159 of carry forward tax losses in the consolidated financial statements prepared in accordance with the CMB’s Financial Reporting Standards as at 31 December 2012 (31 December 2011: TL 23.676). The maturity analysis of carry forward tax losses is as follows: The years for which the financial losses can be used are proposed below: 31 December 2012
31 December 2011
2013 2014 2015 2016 and after
4.261 90.552 21.822 33.524
793 39.234 1.635 -
Total
150.159
41.662
214 - 215
DOĞAN YAYIN HOLDİNG ANNUAL REPORT 2012
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 32-CURRENT AND DEFERRED TAXES (Continued) Deferred tax assets are recognised for all deductible temporary differences to the extent that it is probable that taxable profit will be available against which the deductible temporary difference can be utilized. As of 31 December 2012, the Group does not recognize deferred tax from carry forward tax losses amounted to TL 952.700 (31 December 2011: TL 1.077.660). The movements in deferred tax asset/ (liability) for the periods ended 31 December 2012 and 2011 are as follows:
1 January Deferred income tax benefit/(charge) from continued operations Tax effect of actuarial loss recognized in other comprehensive income Disposal of subsidiary Deferred tax effect of investment property revaluation reserves in other comprehensive income Currency translation differences Deferred income tax charge from discontinued operations (Note 31) 31 December
31 December 2012
31 December 2011
(75.311) 30.388 7.584 16
(51.467) (18.775) 13.279
(75) (95) -
(10.071) (8.277)
(37.493)
(75.311)
Income taxes recognized in consolidated statement of income for the periods ended 31 December 2012 and 31 December 2011 is as follows: 31 December 2012
31 December 2011
Current tax expense Deferred tax income/ (expense)
(80.149) 30.388
(72.874) (18.775)
Total tax expense
(49.761)
(91.649)
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 32-CURRENT AND DEFERRED TAXES (Continued) The reconciliation of the taxation on income in the consolidated statement of income for the periods ended 31 December 2012 and 2011 and the taxation on income calculated with the current tax rate over income before tax are as follows: 31 December 2012
31 December 2011
Income/ (loss) before income taxes from continued operations
322.372
(1.303.907)
Tax calculated at 20% Non-deductible expenses/ expenses not deductible for tax purposes Carry forward losses for which no deferred tax asset was recognized Withholding tax payment related to the operations abroad Expense accruals of tax liability in dispute and tax base increase Impairment of goodwill Deferred tax effect of previously unrecognized carryforward tax losses Income not subject to tax Absorbed financial losses Sale of subsidiary Reversal of previous year losses from which deferred tax was calculated previously Expense accruals of tax liability in dispute Tax base increase Current year tax income calculated over effected tax rates of different countries Other
(64.474) (19.701) (23.627) (7.121) (3.871) (3.621) 17.741 38.454 16.872 3.589 (4.002)
260.781 (30.851) (76.302) (6.765) (20.772) 4.689 3.613 (31.187) (176.017) (15.141) (935) (2.762)
Tax expense
(49.761)
(91.649)
216 - 217
DOĞAN YAYIN HOLDİNG ANNUAL REPORT 2012
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 33-EARNING/ (LOSS) PER SHARE Earning/ (loss) per share for each class of shares disclosed in the consolidated statements of income is determined by dividing the net income/ (loss) by the average number of shares. 2012
2011
197.242
(1.194.273)
2.000.000.000 9,86
1.734.246.575 (68,86)
-
134.954
Net profit/ (loss) for the period from continuing operations
197.242
(1.329.227)
Net (loss)/ profit for the year attributable to non-controlling interests
73.369
(66.329)
2.000.000.000
1.734.246.575
9,86
(68,86)
Net loss for the period Weighted average number of shares with face value of TL 1 each Earning/ (loss) per share (Kr) Net profit for the period from discontinued operations
Weighted average number of shares with face value of TL 1 each Earning/ (loss) per share from continuing operations (Kr)
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 34-RELATED PARTY DISCLOSURES For the purpose of these consolidated financial statements, related parties are referred to as legal entities in which Doğan Holding directly or indirectly has participation, including any entities under common control; real persons and/or legal entities that have direct or indirect individual or joint control over the company and their close family members (relatives up to second-degree) and legal entities having direct or indirect individual or joint control by them and legal entities having significant effect over the Company or their key management personnel; Company’s affiliates, subsidiaries and members of the Board of Directors, key management personnel and their close family members (relatives up to second-degree) and real persons and/or legal entities that are directly or indirectly controlled individually or jointly. As of the balance sheet date, the details of due to/from related parties and related party transactions for the periods ended as of 31 December 2012 and 31 December 2011 are summarized as below: a) Balances with related parties: Due from related parties: 31 December 2012
31 December 2011
9.404 2.258 1.089 858 541 607
1.289 1.232 52 1.056 5.172 1.038 716
14.757
10.555
Medyanet İletişim Reklam Pazarlama ve Turizm A.Ş. (“Medyanet”) (1) Doğan Müzik Kitap Mağazacılık ve Pazarlama A.Ş. (2) D Market Elektronik ve Ticaret A.Ş. (“D Market”) Doğan Portal ve Elektronik Ticaret A.Ş. (“Doğan Portal”) D Elektronik Şans Oyunları ve Yayıncılık A.Ş. (“D Elektronik Şans Oyunları”) Milta Turizm İşletmeleri A.Ş. (“Milta Turizm”) (3) Doğan Holding Other Total
(1)
(2)
(3)
The receivables of the Group from Medyanet consist of the internet advertising sales made from the websites. Doğan Müzik Kitap Mağazacılık balances/transactions are presented as related party transactions as shares of Doğan Müzik Kitap Mağazacılık ve Pazarlama A.Ş. were acquired by Doğan Holding as at 16 January 2012 and it was excluded from the full scope consolidation (Note 31). The receivables of the Group from Milta Turizm consist of the barter agreements made with Milta Turizm.
Due to related parties: 31 December 2012
31 December 2011
Doğan Holding (1) Galata Wind Enerji A.Ş. (“Galata Wind”) (2) Milpa Ticari ve Sınai Ürünler Paz.San. ve Tic. A.Ş. (“Milpa”) (3) Mesiar Sigorta A.Ş. Ortadoğu Otomotiv Ticaret A.Ş. Other
3.224 1.616 538 168
920 91 64 72
Total
5.546
1.147
(3) (1)
(2)
The payables of the Group to Doğan Holding consist of the services like consulting and technical support services. The payables of the Group to Galata Wind consist of the providing of electrical power to the building and printing facilities. The payables of the Group to Milpa consist of the barter agreements made with Milpa.
218 - 219
DOĞAN YAYIN HOLDİNG ANNUAL REPORT 2012
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 34-RELATED PARTY DISCLOSURES (Continued) a) Balances with related parties (Continued) Other payables to related parties: 31 December 2012
31 December 2011
-
97.435 97.435
2012
2011
Doğan Holding (1) Medyanet İletişim Reklam Pazarlama ve Turizm A.Ş. (“Medyanet”) (2) Doğan Müzik Kitap Mağazacılık ve Pazarlama A.Ş. (3) D Market Elektronik ve Ticaret A.Ş. (“D Market”) Other
142.110 17.700 11.539 4.399 5.564
688 16.306 3.359 2.798
Total
181.312
23.151
Doğan Holding (1) (Note 34 e) Total
(1)
The related loan was paid as of 5 July 2012.
b) Significant sales to and significant purchases from related parties for the periods ended 31 December 2012 and 2011: Asset, service and product sales to related parties:
(3) (1)
(2)
Doğan Müzik Kitap Mağazacılık ve Pazarlama A.Ş., a subsidiary of the Group, has been sold to Doğan Holding as of 16 January 2012 in consideration of TL 139.404 (Note 31). Internet advertising sales of the Group are made thorough Medyanet. Sale of commercial products is made.
Service and product purchases from related parties: 2012
2011
Doğan Holding (1) Milta Turizm İşletmeleri A.Ş. (“Milta Turizm”) (2) Ortadoğu Oto (3) Aydın Doğan Vakfı (4) Doğan Müzik Kitap Mağazacılık ve Pazarlama A.Ş. (5) Doğan Elektronik Aracılık Other
26.262 12.763 8.253 3.000 2.087 5.965
2.775 10.172 4.098 5.502 4.084
Total
58.330
26.631
(3) (4) (5) (1)
(2)
The services like financial, legal, technical support and consulting services in other areas and other services of the Group are provided by Doğan Şirketler Grubu Holding A.Ş. Vehicle rentals, organization and transportation services of the Group are made by Milta. Consists of the rent expenses of Trump Towers. Consists of the donations made by Doğan TV group. Consists of the distribution service amount of Radikal newspaper.
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 34-RELATED PARTY DISCLOSURES (Continued) c) Purchase of property plant and equipment and intangible asset from related parties for the periods ended 31 December 2012 and 2011 2012
2011
Doğan İnternet Yayıncılığı ve Yatırım A.Ş. (1) D-Yapı Milpa Ticari ve Sınai Ürünler Paz.San. ve Tic. A.Ş. (“Milpa”) D-Market Elektronik ve Ticaret A.Ş. Milta Turizm İşletmeleri A.Ş. (“Milta Turizm”) Doğan Holding
2.620 490 100 89 -
180 28 24
Total
3.299
232
(1)
Related amount consists of the acquisition of Bigpara.com, Mahmure.com and E-kolay.net websites.
d) Sale of property plant and equipment and intangible asset from related parties for the periods ended 31 December 2012 and 2011 2012
2011
-
7 7
2012
2011
Doğan Holding (1) D-Elektronik Şans Oyunları Other
7.857 14 15
-
Total
7.886
-
2012
2011
Doğan Holding (1) Other
3.560 34
10 -
Total
3.594
10
Delüks Elektronik Hizmetler ve Ticaret A.Ş. Total e) Other significant transactions with related parties for the periods 31 December 2012 and 2011: Financial income:
Financial expenses:
(1)
The Group has borrowed a financial loan amounting to USD 51.500 from Doğan Holding in 2011 and the last principal payment of the loan has been made on 5 July 2012. Financial expense has occurred regarding the exchange differences and interest expenses arising from this loan.
220 - 221
DOĞAN YAYIN HOLDİNG ANNUAL REPORT 2012
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 34-RELATED PARTY DISCLOSURES (Continued) f) Other significant transactions with related parties for the periods 31 December 2012 and 2011: Remuneration of the members of the Board of Directors and key management personnel: Doğan Yayın Holding has determined the key management personnel as the members of the board of directors and executive committee members. The compensation of key management personnel includes salaries, bonus, health insurance, communication and transportation and total amount of compensation is explained below.
Salaries and other short term benefits Post-employment benefits Other long term benefits Termination benefits Share based payments Total
2012
2011
4.751 4.751
7.499 7.499
NOTE 35-FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES 35.1 Financial risk management The Group’s activities expose it to a variety of financial risks; these risks are credit risk, market risk including the effects of changes in debt and equity market prices, foreign currency exchange rates, fair value interest rate risk and cash flow interest rate risk, and liquidity risk. The Group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the financial performance of the Group. The Group use derivative financial instruments in a limited manner to hedge these exposures. Financial risk management is carried out by individual subsidiaries and joint ventures under the policies, which are approved of their Board of Directors within the limits of general principles set out by Doğan Yayın Holding. 35.1.1 Credit risk Credit risk involves the risk that counterparties may be unable to meet the terms of their agreements. These risks are monitored by credit ratings and by limiting the aggregate risk to any individual counterparty. The credit risk is generally highly diversified due to the large number of entities comprising the customer bases and their dispersion across many different industries.
528.136 19.921 136.548 22.102 198.155 (198.155) -
14.757 -
A. Net book value of neither past due nor impaired financial assets - Guaranteed amount by collateral B. Book value of restructured otherwise accepted as past due and impaired financial assets C. Net book value of past due but not impaired assets (Note 10) - Guaranteed amount by collateral (Note 10) D. Impaired asset net book value - Past due (gross amount) (Note 10) - Impairment (-) (Note 10) - Net value collateralized or-guaranteed part of net value - Not overdue (gross amount) - Impairment (-) - Net value collateralized or-guaranteed part of net value E. Off-balance sheet items bearing credit risk
664.684 42.023
14.757 -
Trade receivables Related party Other
Maximum net credit risk as of balance sheet date - The part of maximum risk under guarantee with collateral
31 December 2012
NOTE 35-FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Continued)
-
-
-
747 (747) -
515.891 316.612 -
515.891 316.612
Other receivables Related party Other
(Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
-
488.233 -
488.233 -
Cash and cash equivalents
-
-
-
Financial investments
-
19.179 -
19.179 -
Other assets
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012
DOĞAN YAYIN HOLDİNG A.Ş.
10.555 432.517 42.343 196.233 16.410 174.663 - (174.663) -
A. Net book value of neither past due nor impaired financial assets - Guaranteed amount by collateral B. Book value of restructured otherwise accepted as past due and impaired financial assets C. Net book value of past due but not impaired assets (Note 10) - Guaranteed amount by collateral D. Impaired asset net book value - Past due (gross amount) (Note 10) - Impairment (-) (Note 10) - Net value collateralized or guaranteed part of net value - Not overdue (gross amount) - Impairment (-) - Net value collateralized or guaranteed part of net value E. Off-balance sheet items bearing credit risk
628.750 58.753
10.555 -
Trade receivables Related party Other
Maximum net credit risk as of balance sheet date - The part of maximum risk under guarantee with collateral
31 December 2011
NOTE 35-FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Continued)
-
433.940 332.446 833 (833) -
433.940 332.446
Other receivables Related party Other
(Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
1.061.644 -
1.061.644 -
Cash and cash equivalents
102.915 -
102.915 -
Financial investments
15.377 -
15.377 -
Other assets
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012
DOĞAN YAYIN HOLDİNG A.Ş.
DOĞAN YAYIN HOLDİNG ANNUAL REPORT 2012
222 - 223
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 35-FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Continued) 35.1.1 Credit risk (Continued) Trade receivables The credit quality of trade receivables which is past due but not impaired is as follows: 31 December 2012 Related Other party receivables
31 December 2011 Related Other party receivables
0-1 months overdue 1-3 months overdue 3-12 months overdue 1-2 years overdue 2-5 years overdue
-
52.834 42.714 31.994 8.561 445
-
76.164 53.553 55.870 9.939 707
Total
-
136.548
-
196.233
The credit quality of trade receivables impaired is as follows: 31 December 2012 Related Other party receivables
31 December 2011 Related Other party receivables
0-3 months overdue 3-6 months overdue 6-12 months overdue 1-5 years overdue
-
2.543 14.307 7.415 173.890
-
3.636 2.556 7.519 160.952
Less: provision for impairment
-
(198.155)
-
(174.663)
Total
-
-
-
-
224 - 225
DOĞAN YAYIN HOLDİNG ANNUAL REPORT 2012
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 35-FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Continued) 35.1.2 Interest rate risk The Group is exposed to interest rate risk through the impact of rate changes on interest bearing liabilities and assets. These exposures are managed using natural hedges that arise from offsetting interest rate sensitive assets and liabilities and by limited use of derivative instruments. Borrowings issued at floating rates expose the Group to cash flow interest rate risk. Borrowings issued at fixed rate expose the Group to fair value interest rate risk. As of 31 December 2012 and 31 December 2011, the Group’s borrowings at floating rates are predominantly denominated in US Dollars and Euros. At 31 December 2012, if interest rates on US dollar denominated borrowings had been higher/lower by 100 basis points with all other variables held constant, loss before income taxes would have been TL 10.427 (31 December 2011: TL 9.896) higher/lower, mainly as a result of high interest expense on floating rate borrowings. At 31 December 2012, if interest rates on Euro denominated borrowings had been higher/lower 100 basis points with all other variables held constant, loss before income taxes would have been TL 1.050 (31 December 2011: TL 854) higher/lower, mainly as a result of high interest expense on floating rate borrowings. The table presenting Company’s fixed and floating rate financial instruments is shown below: Financial instruments with fixed rate
31 December 2012
31 December 2011
406.209 -
971.828 102.915
637.776
773.362
31 December 2012
31 December 2011
1.188.749
1.141.730
Financial assets - Banks (Note 6) - Financial investments (Note 7) Financial liabilities (Note 8) Financial instruments with floating rate Financial liabilities (Note 8)
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 35-FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Continued) 35.1.2 Interest rate risk (Continued) The analysis of average annual interest rate (%) of financial assets and liabilities of the Group is as follows:
USD
31 December 2012 EUR
TL
USD
31 December 2011 EUR
TL
Assets Cash and cash equivalents Financial investments
0,10-5,35 -
0,25-3,45 -
5,00-12,30 -
0,5-6 1-9
1-4,5 -
5,6-12,6 -
Liabilities Financial liabilities
2,65-6,40
1,33-5,11
5,75-10,40
2,64-7,00
2,52-9,69
12,25-15,50
The distribution of sensitivity to interest rates about the period for reprising of financial assets and liabilities is as follows: Up to 3 months
3 months1 year
1 year5 years
5 years and over
Noninterestbearing
Total
Assets Cash and cash equivalents (Note 6) Financial investments (Note 7)
406.209 -
-
-
-
82.024 1.495
488.233 1.495
Total
406.209
-
-
-
83.519
489.728
Liabilities Financial borrowings (Note 8)
-
1.105.496
721.029
-
-
1.826.525
Total
-
1.105.496
721.029
-
-
1.826.525
Up to 3 months
3 months1 year
1 year5 years
5 years and over
Noninterestbearing
Total
Assets Cash and cash equivalents (Note 6) Financial investments (Note 7)
971.828 -
-
102.915
-
89.816 595
1.061.644 103.510
Total
971.828
-
102.915
-
90.411
1.165.154
Liabilities Financial borrowings (Note 8)
-
1.641.123
273.969
-
-
1.915.092
Total
-
1.641.123
273.969
-
-
1.915.092
31 December 2012
31 December 2011
Financial borrowings (Note 8) Trade payables (Note 10) Other payables (Note 11) Other payables to related parties (Note 34) Provisions (Note 20) Other short term and long term liabilities (Note 23) Other financial liabilities (Note 9)
Financial liabilities excluding derivatives
31 December 2011
Financial borrowings (Note 8) Trade payables (Note 10) Other payables (Note 11) Provisions (Note 20) Other short term and long term liabilities (Note 23) Other financial liabilities (Note 9)
Financial liabilities excluding derivatives
31 December 2012
2.004.981 386.632 129.580 97.435 41.412 844.460 66.438
369.394 365.110 45.632 57.545 22.130 135.863 -
Less than 3 months
Contractual undiscounted cash flow Book value
1.915.092 386.632 129.580 97.435 41.412 761.037 66.438
728.047 244.218 44.440 24.774 -
Less than 3 months
1.909.022 257.628 80.043 26.651 86.202 18.207
Contractual undiscounted cash flow
1.826.525 257.628 80.043 26.651 86.202 18.207
Book value
As of 31 December 2012 and 31 December 2011, undiscounted cash flows of financial liabilities based on the agreement maturities are as follows:
461.076 21.522 22.979 39.890 19.282 269.177 66.438
3 – 12 months
566.494 13.410 22.093 26.651 49.064 18.207
3 – 12 months
1.174.511 60.969 439.420 -
1–5 years
614.169 13.510 12.364 -
1–5 years
-
Over 5 years
312 -
Over 5 years
Conservative liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of funding through an adequate amount of committed credit facilities and the ability to close out market positions. Due to the dynamic nature of the underlying business, the Group aims maintaining flexibility in funding by keeping committed credit lines available.
35.1.3 Liquidity risk
NOTE 35-FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Continued)
(Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012
DOĞAN YAYIN HOLDİNG A.Ş.
DOĞAN YAYIN HOLDİNG ANNUAL REPORT 2012
226 - 227
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 35-FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Continued) 35.1.4 Foreign currency risk The Group is exposed to foreign exchange risk through the impact of rate changes on the translation of foreign currency liabilities to local currency. These risks are monitored and limited by analyzing foreign currency position. TL equivalents of foreign currency denominated monetary assets and liabilities at 31 December 2012 and 31 December 2011 before consolidation adjustments and reclassifications are as follows:
Assets Liabilities Off-balance sheet net derivative liabilities Net foreign currency position
31 December 2012
31 December 2011
950.760 (1.760.288) 19.261 (790.267)
1.164.995 (2.139.323) (3.481) (977.809)
228 - 229
DOĞAN YAYIN HOLDİNG ANNUAL REPORT 2012
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 35-FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Continued) 35.1.4 Foreign currency risk (Continued) 31 December 2012 1. Trade receivables 2a. Monetary Financial Assets (Cash, Banks included) 2b. Non-Monetary Financial Assets 3. Other 4. Current Assets (1+2+3) 5. Trade receivables 6a. Monetary Financial Assets 6b. Non-Monetary Financial Assets 7. Other 8. Non-Current Assets (5+6+7) 9. Total Assets (4+8) 10. Trade payables 11. Financial Liabilities 12a. Other Monetary Financial Liabilities 12b. Other Non-Monetary Financial Liabilities 13. Current Liabilities (10+11+12) 14. Trade payables 15. Financial Liabilities 16a. Other Monetary Financial Liabilities 16b. Other Non-Monetary Financial Liabilities 17. Non-Current Liabilities (14+15+16) 18. Total Liabilities (13+17) 19. Net asset/liability position of Off-balance sheet derivatives (19a-19b) 19a. Off-balance sheet foreign currency derivative assets 19b. Off-balance sheet foreign currency derivative liabilities 20. Net foreign currency asset liability position (9-18+19) 21. Net foreign currency asset/liability position of monetary items (1+2a+5+6a-10-11-12a-14-15-16a) 22. Fair value of foreign currency hedged financial assets 23. Exports 24. Imports
TL Equivalent
USD
EUR
Other
89.085 760.512 849.597 101.163 101.163 950.760 65.710 854.156 38.155 958.021 802.230 37 802.267 1.760.288 19.261 33.373 14.112 (790.267)
34.663 668.210 702.873 96.833 96.833 799.706 17.527 721.696 4.452 743.675 748.178 748.178 1.491.853 33.373 33.373 (658.774)
45.545 45.817 91.362 4.114 4.114 95.476 39.510 115.641 1.287 156.438 54.052 54.052 210.490 (14.112) 14.112 (129.126)
8.877 46.485 55.362 216 216 55.578 8.673 16.819 32.416 57.908 37 37 57.945 (2.367)
(809.528) 54.886 390.008
(692.147) -
(115.014) -
(2.367) -
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 35-FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Continued) 35.1.4 Foreign currency risk (Continued) 31 December 2011 1. Trade receivables 2a. Monetary Financial Assets (Cash, Banks included) 2b. Non-Monetary Financial Assets 3. Other 4. Current Assets (1+2+3) 5. Trade receivables 6a. Monetary Financial Assets 6b. Non-Monetary Financial Assets 7. Other 8. Non-Current Assets (5+6+7) 9. Total Assets (4+8) 10. Trade payables 11. Financial Liabilities 12a. Other Monetary Financial Liabilities 12b. Other Non-Monetary Financial Liabilities 13. Current Liabilities (10+11+12) 14. Trade payables 15. Financial Liabilities 16a. Other Monetary Financial Liabilities 16b. Other Non-Monetary Financial Liabilities 17. Non-Current Liabilities (14+15+16) 18. Total Liabilities (13+17) 19. Net asset/liability position of Off-balance sheet derivatives (19a-19b) 19a. Off-balance sheet foreign currency derivative assets 19b. Off-balance sheet foreign currency derivative liabilities 20. Net foreign currency asset liability position (9-18+19) 21. Net foreign currency asset/liability position of monetary items (1+2a+5+6a-10-11-12a-14-15-16a) 22. Fair value of foreign currency hedged financial assets 23. Exports 24. Imports
TL Equivalent
USD
EUR
Other
101.324 663.983 765.307 399.688 399.688 1.164.995 176.169 680.473 89.361 7.783 953.786 1.121.770 63.767 1.185.537 2.139.323 (3.481) 14.960 18.441 (977.809)
68.797 602.075 670.872 399.616 399.616 1.070.488 60.918 575.430 52.232 6.571 695.151 1.049.863 63.720 1.113.583 1.808.734 11.182 14.960 3.778 (727.064)
23.080 25.031 48.111 15 15 48.126 104.005 87.628 1.765 1.212 194.610 54.586 54.586 249.196 (14.663) 14.663 (215.733)
9.447 36.877 46.324 57 57 46.381 11.246 17.415 35.364 64.025 17.321 47 17.368 81.393 (35.012)
(966.545) 74.728 345.385
(731.675) -
(199.858) -
(35.012) -
230 - 231
DOĞAN YAYIN HOLDİNG ANNUAL REPORT 2012
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 35-FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Continued) 35.1.4 Foreign currency risk (Continued) As of 31 December 2012 and 31 December 2011, foreign currency denominated asset and liability balances were converted with the following exchange rates: TL 1,7826 = USD 1 and TL 2,3517 = EUR 1 (2011: TL 1,8889 = USD 1 and TL 2,4438 = EUR 1). The Group is exposed to foreign exchange risk arising primarily from the US Dollars and Euros, and sensitivity analysis for currency risk is summarized below:
31 December 2012
Income/ Loss Foreign currency Foreign currency appreciates depreciates
If the USD had changed by %10 against the TL USD net (liabilities)/assets Hedging amount of USD USD net effect on (loss)/income
(65.877) (65.877)
65.877 65.877
If the EUR had changed by %10 against the TL EUR net (liabilities)/assets Hedging amount of EUR EUR net effect on (loss)/income
(12.913) (12.913)
12.913 12.913
31 December 2011
Income/ Loss Foreign currency Foreign currency appreciates depreciates
If the USD had changed by %10 against the TL USD net (liabilities)/assets Hedging amount of USD USD net effect on (loss)/income
(72.706) (72.706)
72.706 72.706
If the EUR had changed by %10 against the TL EUR net (liabilities)/assets Hedging amount of EUR EUR net effect on (loss)/income
(21.573) (21.573)
21.573 21.573
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 35-FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Continued) 35.2 Capital risk management In managing capital, the Group aims to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may issue new shares or sell assets to reduce its liabilities. The Group monitors capital on the basis of the net liability/total equity ratio. Net liability is calculated as the total liability less cash and cash equivalents, provisions and tax liabilities. Total equity is calculated as the total of net liability and the equity as shown in the consolidated balance sheet. The net liability/total equity ratio at 31 December 2012 and 31 December 2011 is summarized below: 31 December 2012
31 December 2011
Total liability (1) Less: cash and cash equivalents (Note 6)
2.382.780 (488.233)
3.441.314 (1.061.644)
Net liability Equity
1.894.547 1.420.467
2.379.670 1.079.410
Total capital
3.315.014
3.459.080
Gearing ratio
57%
69%
(1)
The amounts are calculated by deducting income tax payable, derivative financial instruments and deferred tax liability accounts from total liability.
NOTE 36-FINANCIAL INSTRUMENTS Fair value of financial instruments The fair values of financial assets and financial liabilities are determined as follows: a. Level 1: The fair value of financial assets and financial liabilities with standard terms and conditions and traded on active liquid markets are determined with reference to quoted market prices; b. Level 2: The fair value of other financial assets and financial liabilities are determined in accordance with generally accepted pricing models based on discounted cash flow analysis using prices from observable current market transactions; c. Level 3: The fair value of the financial assets and financial liabilities is determined in accordance with the unobservable current market data.
232 - 233
DOĞAN YAYIN HOLDİNG ANNUAL REPORT 2012
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 36-FINANCIAL INSTRUMENTS (Continued) Based on the fair value hierarchy, the Group’s financial assets and liabilities are categorized as follows:
Financial assets
31 December 2012
Fair Value Measurement as of the Reporting Date Level 1 Level 2 Level 3 TL TL TL
Financial assets at FVTPL Trading securities Derivative instruments Available-for-sale financial assets Equity investments
573 -
-
573 -
-
Total
573
-
573
-
Financial liabilities at FVTPL Trading securities Derivative instruments Other financial liabilities
1.375 18.207
-
1.375 -
18.207
Total
19.582
-
1.375
18.207
Financial liabilities
Financial assets
31 December 2011
Fair Value Measurement as of the Reporting Date Level 1 Level 2 Level 3 TL TL TL
Financial assets at FVTPL Trading securities Derivative instruments Available-for-sale financial assets Equity investments
-
-
-
-
Total
-
-
-
-
Financial liabilities
-
-
-
-
Financial liabilities at FVTPL Trading securities Derivative instruments Other financial liabilities
3.429 66.438
-
3.429 -
66.438
Total
69.867
-
3.429
66.438
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 36-FINANCIAL INSTRUMENTS (Continued) Fair 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. Estimated fair value of financial instruments is determined by Doğan Yayın Holding, its subsidiaries and joint ventures, using available market information and appropriate valuation methodologies. However, judgment 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 Group could realize in a current market exchange. The following methods and assumptions were used to estimate the fair value of the financial instruments: Financial assets The fair value of the foreign currency denominated amounts, which are translated by using the exchange rates prevailing at year-end, is considered to approximate their fair value. The fair value of certain financial assets carried at cost including cash and due from banks, deposits with banks and other financial asset is considered to approximate their respective carrying value due to their short-term nature. The fair value of investment securities has been estimated based on the market prices at balance sheet dates. The trade receivables are carried at amortized cost using the effective yield method less provision for doubtful receivables, and hence are considered to approximate their fair values. Financial liabilities The fair value of funds borrowed and other monetary liabilities are considered to approximate their respective carrying value. Long-term borrowings, which are principally at variable rates and denominated in foreign currencies, are translated at year-end exchange rates and accordingly their carrying amount approximate their fair value. Trade payables are stated at amortized cost using the effective interest method, and accordingly their carrying amounts approximate their fair value.
DOĞAN YAYIN HOLDİNG ANNUAL REPORT 2012
234 - 235
DOĞAN YAYIN HOLDİNG A.Ş.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated. Currencies other than TL, expressed in thousands unless otherwise indicated.)
NOTE 37-SUBSEQUENT EVENTS Deutsche Bank Option -
As explained in detail in Note 8, within the scope of usage of “put option” by Deutsche Bank AG, in accordance with the “Put Option Agreements” signed on 26 July 2007 between Doğan Yayın Holding and Deutsche Bank AG and amended by the amendment agreement dated 10 November 2008, Deutsche Bank AG’s share in Doğan Gazetecilik, direct subsidiary of Doğan Yayın Holding amounting to 23.100.000 bearer shares with a nominal value of TL 1 each which corresponds to 22% of TL 105.000 issued capital of Doğan Gazetecilik has been purchased by Doğan Yayın Holding in consideration of USD 122.323 as of 19 February 2013. Doğan Yayın Holding’s share in Doğan Gazetecilik A.Ş. capital has become 92,76% after the purchase of mentioned shares.
Share Transaction -
3.000.000 “publicly available” shares of Doğan Yayın Holding (exact) with a nominal value of TL 1 each have been acquired by Doğan Holding (parent company of the Group) from Adilbey Holding A.Ş. as of 20 February 2013 in consideration of TL 0,86 (exact) per share in cash independent from Borsa İstanbul transactions based on weighted average transaction amount at the first session provided that the transaction price remains within the margins set out in accordance with the Circular “Principles of Establishment and Operation of Wholesale Market” of Borsa İstanbul. As a result of the above-mentioned transaction disclosed at PDP on 20 February 2013, Doğan Holding’s share in Doğan Yayın Holding has become 75,74%.
Approval of Financial Statements The consolidated financial statements for the period ended 31 December 2012 were approved by the Board of Directors on 9 April 2013. Other than Board of Directors has no authority to change financial statements.
CONTENTS
AT A GLANCE 2 Who Are We? 10 Our Values 12 Our Road Map 13 Our Management Structure 14 Competitions and Awards 16 Shareholders and Share Performance 18 Message from the Chairperson 20 Message from the CEO OPERATIONS IN 2012 22 Highlights of the Year 24 DYH and the Turkish Media Sector 26 Publishing 32 Broadcasting 39 Other Operations SUSTAINABILITY 40 Corporate Social Responsibility 50 Aydın Doğan Foundation 54 Sustainable Growth and the Environment 56 Human Resources 57 Remuneration Policy and Rights 57 Organization Chart CORPORATE GOVERNANCE 58 Board of Directors 60 Executive Committee 61 Internal Audit and Control 62 Risk Management 64 Corporate Governance Principles Compliance Report 81 Other Legal Announcements 85 Broadcasting and Publishing Principles 88 Code of Ethics and Behavioral Conduct 91 Audit Report 92 Audit Committee Resolution 93 Corporate Governance Committee Resolution 94 Board of Director’s Statement of Responsibility on the Approval of the Reports 95 Board of Director’s Resolution on the Approval of the Reports DIVIDEND DISTRIBUTION 96 Dividend Distribution Policy 97 Dividend Distribution Proposal 99 Dividend Distribution Table FINANCIAL INFORMATION 102 Independent Audit Report 104 Financial Report
Burhaniye Mahallesi Kısıklı Caddesi No: 65 Altunizade 34676 Üsküdar/ISTANBUL/TURKEY Phone: +90 (216) 556 90 00 Fax: +90 (216) 556 91 47 www.dyh.com.tr
2012 Annual Report
ED T...
I LI T
EN
. S.. ES IN This Annual Report is printed on 100% recycled paper. No trees were harmed during the production process.
ENTHU S I A S M.. .J O Y ... H A PP
IVIT Y... RESPONS CREAT IB
IN M ERTA
..
ET... TERN .. IN IO. ISTRIBUTION... AD ... D INT PR
N E W S . .. E N T
. RK
.. R N.
doğan yayın holding 2012 Annual Report
FOCUS... OMER T S U ER... MAGAZ O ... C NEWSPAP INE W E ... T G M N EL A H EV C IS .. IO
UC AT Y... DIVERS IO SP ITY.. EE N . TE D ... CH NO TE LO A GY .
. ..
