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GSD Denizcilik Gayrimenkul İnşaat Sanayi ve Ticaret Anonim Şirketi

Consolidated financial statements as of December 31, 2013 together with independent auditors’ report

GSD Denizcilik Gayrimenkul İnşaat Sanayi ve Ticaret Anonim Şirketi

Index

Page Independent auditors’ report 1-2

Statement of financial position (balance sheet) 3-4

Statement of comprehensive income 5

Statement of other comprehensive income 6

Statements of changes in shareholders’ equity 7

Statement of cash flows 8

Notes to the consolidated financial statements 9-63

Convenience conversion of financials 64-67

.

GSD Denizcilik Gayrimenkul İnşaat Sanayi ve Ticaret Anonim Şirketi Consolidated statements of financial position as of December 31, 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated.)

The accompanying accounting policies and notes are an integral part of these consolidated financial statements

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Current period

(Audited) Prior period

(Audited)

Notes December 31,

2013 December 31,

2012

Assets

Current assets 8,210 25,696

Cash and cash equivalents 3 3,785 16,834 Financial investments 4 535 482 - Financial assets available for sale 4.1 535 465 - Derivative financial assets held for trading 4.2 - 17 Trade receivables 6 1,270 - - Due from related parties 20 - - Due from third parties 1,250 - Receivables from finance sector activities 7.1 1,507 7,118 Other receivables 8 266 323 - Due from related parties - - - Due from third parties 266 323 Inventories (net) 9 259 - Prepaid expenses 10 260 172 Current income tax assets 11 17 357 Other current assets 20 30 23 Assets held for sale 12 281 387

Non-current assets 115,162 38,750

Financial investments 4 850 850 - Other financial assets 4.4 850 850 Receivables from finance sector activities 7.1 228 1,294 Property, plant and equipment 13 107,945 6 Intangible assets 14 - - Prepaid expenses 10 14 723 Deferred tax asset 29 6,125 8,203 Other non-current assets 20 - 27,674

Total assets 123,372 64,446

GSD Denizcilik Gayrimenkul İnşaat Sanayi ve Ticaret Anonim Şirketi Consolidated statements of financial position as of December 31, 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated.)


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Current period


(Audited)

Notes December 31,

2013 December 31,

2012

Liabilities

Current liabilities 9,649 852

Financial liabilities 15 3,351 11 - Short term borrowings 15.1 3,351 11 Short term portion of long term financial liabilities 15 5,342 - - Borrowings 15.1 5,342 - Other financial liabilities 4 - 23 - Derivative financial liabilities held for trading 4.3 - 23

Trade payables 6 108 56 - Due to related parties 48 56 - Due to third parties 60 - Payables from finance sector activities 7.2 551 546 Other payables 8.2 98 152 Deferred income 18 106 -

Provisions 19 93 64 - Provisions for employee benefits 19.1 93 64 - Other current provisions - -

Non-current liabilities 47,205 185

Financial liabilities 15 46,941 - - Long term borrowings 46,941 - Provisions 19 264 185 - Provisions for employee benefits 19.2 264 185

Equity 66,518 63,409

Share capital 21.1 30,000 30,000 Adjustment to share capital 21.2 16,341 16,341 Share premium 21.3 1 1 Other comprehensive income or expenses to be reclassified to profit or loss 21.4 8,646 (42) - Currency translation differences 8,615 - - Financial assets revaluation fund 31 (42)

Restricted reserves 21.5 1,183 1,117 Retained earnings 21.6 15,926 14,698 Net profit for the period 21.6 (5,579) 1,294

Total equity and liabilities 123,372 64,446

GSD Denizcilik Gayrimenkul İnşaat Sanayi ve Ticaret Anonim Şirketi Consolidated statements comprehensive income for the years ended December 31, 2013 and 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated.)


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Current period (Audited)

Prior period (Audited)

Notes

December 31, 2013

December 31, 2012

Continuing operations

Marine sector revenues 22 7,564 - Marine sector expenses (-) 22 (8,415) -

Gross profit of marine sector activities

(851) -

Interest income 23 456 1,101 Finance sector operating income

456 1,101

Cost of finance sector activities (-)

- - Provision of finance sector operating income/(expenses) net 23 (268) (193)

Foreign exchange gain/(loss), net 23 656 (844) Other finance sector operating income/(expense), net 23 57 11

Gross profit of finance sector activities

901 75

Gross profit/(loss) 50 75

General administrative expenses (-) 24 (3,244) (2,737) Other operating income 25 5,329 6,375 Other operating expenses (-) 26 (1,517) (3,290)

Operating profit/loss 618 423

Income from investment activities 27 99 331 Expense from investment activities - - Income from associates - -

Operating profit before financial expense 717 754

Financial income 28 - 714 Financial expense (-) 28 (6,508) (98)

Profit/loss before tax from continued operations (5,791) 1,370

Tax income/expense of continued operations

212 (76) - Taxation on income 29 - 525 - Deferred tax income / (expense) 29 212 (601)

Profit for the period (5,579) 1,294

Earnings per share (TL) 30 (0,186) 0,043

GSD Denizcilik Gayrimenkul İnşaat Sanayi ve Ticaret Anonim Şirketi Consolidated statements of other comprehensive income for the years ended December 31, 2013 and 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated.)


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Current period


(Audited)

Notes December 31,

2013 December 31,

2012

Profit for the period (5,579) 1,294

Other comprehensive income/(expense) To be reclassified as profit or loss 8,688 141 Fair value increase on financial assets 21 73 141 Currency translation differences 21 8,615 -

Other comprehensive income / (loss) (net of tax) 8,688 141

Total comprehensive income 3,109 1,435

Appropriation of total comprehensive income 3,109 1,435

Non-controlling interest - -

Equity holders of the parent 3,109 1,435

GSD Denizcilik Gayrimenkul İnşaat Sanayi ve Ticaret Anonim Şirketi Consolidated statements of changes in shareholders’ equity for the years ended December 31, 2013 and 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated.)


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Other comprehensive income or expenses no to be reclassified to

profit or loss Other comprehensive income or expenses to be

reclassified to profit or loss Accumulated

profits

Notes Share capital

Adjustment to share

capital Treasury

shares

Capital adjustment

due to cross-ownership

Share Premium/ Discount

Changes in non-

controlling interest reserve

Gains/losses from the

revaluation and reclassification

Other gains /losses

Foreign currency

translation adjustment

Hedging gains/ losses

Gains/losses from the

revaluation and reclassification

of marketable securities

Other gains

/losses Restricted

reserves Retained earnings

Net profit for the period

Equity attributable

to equity holders

of the parent

Non- controlling

interest Total equity

Prior period

1 January 2012 - previously reported 30,000 16,341

-

- 1

- - - - - (183) - 943 11,389 3,483 61,974 - 61,974

Transfers - - - - - - - - - - - - 174 3,309 (3,483) - - -

Transfers from retained earnings - - - - - - - - - - - - 174 3,309 (3,483) - - - Total comprehensive income - - - - - - - - - - 141 - - - 1,294 1,435 - 1,435

Net profit for the period - - - - - - - - - - - - - - 1,294 1,294 - 1,294 Other comprehensive income - - - - - - - - - - 141 - - - - 141 - 141

Balance as of December 31, 2012 30,000 16,341

-

- 1

- - - - - (42) - 1,117 14,698 1,294 63,409 - 63,409

Current period

Balance as of January 1, 2013 – previously reported 21 30,000 16,341

- 1

- - - - - (42) - 1,117 14,698 1,294 63,409 - 63,409

Transfers - - - - - - - - - - - 66 1,228 (1,294) - - -

Transfers from retained earnings - - - - - - - - - - - 66 1,228 (1,294) - - - Total comprehensive income - - - - - - - 8,615 - 73 - - - (5,579) 3,109 - 3,109

Net profit for the period - - - - - - - - - - - - - (5,579) (5,579) - (5,579) Other comprehensive income - - - - - - - 8,615 - 73 - - - - 8,688 - 8,688

Balance as of December 31, 2013 21 30,000 16,341

- 1

- - - 8,615 - 31 - 1,183 15,926 (5,579) 66,518 - 66,518

GSD Denizcilik Gayrimenkul İnşaat Sanayi ve Ticaret Anonim Şirketi Consolidated statements of cash flows for the years ended December 31, 2013 and 2012 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated.)

The accompanying accounting policies and notes are an integral part of these consolidated financial statements (8)

Audited Audited

Notes December 31,

2013 December 31,

2012

Cash Flows From Operating Activities:

Profit/loss for the period (5,579) 1,294

Adjustments related with the reconciliation of net profit/ loss for the period 8,256 (1,705) Depreciation and amortization 13 3,088 3 Reversal of doubtful receivables 23 317 193 Provision for employee termination benefits 19.2 50 29 Provision for vacation payment liability 19.2 29 37 Provisions for employee bonus 19.1 93 64 Unrealized foreign currency translation difference 21 3,153 - Derivative financial instruments rediscounts 4.2, 4.3 (6) 12 Tax income/(expenses) 29 (212) 76 Gain on sale of investment securities - (86) Interest expense on bank borrowings 28 1,776 77 Interest income on time deposits 25 (32) (2,110)

Realized change in working capital 5,524 (16,091)

Change in stocks 9 (259) - Change in trade receivables (1,270) 18 Change in finance sector receivables 6,360 12,844 Change in other receivables 57 - Change in other current and non-current assets 614 (26,989) Change in trade payables 52 62 Change in finance sector payables 5 (306) Change in other payables 29 (32) Tax paid - (1,611) Employee bonus paid (64) (65) Vacation paid 19 - (10) Employee termination benefits paid 19 - (2)

Cash flows from investing activities (69,113) 5,162

Change in financial investments (47) 2,809 Change in assets held for sale 106 (265) Purchase of property, plant and equipment 13 (69,394) (7) Dividends received 27 99 245 Interest received 123 2,380

Cash flows from financing activities 47,712 (13,933)

Cash inflows due to borrowings 49,488 11 Interest paid (1,776) (77) Repayment of financial borrowings - (13,867)

Effect of change in foreign exchange rate on cash and cash equivalents 240 (32)

Net (decrease)/increase in cash and cash equivalents (12,960) (25,305)

Cash and cash equivalents at 1 January 16,743 42,048

Cash and cash equivalents at 31 December 2 (p) 3,783 16,743

GSD Denizcilik Gayrimenkul İnşaat Sanayi ve Ticaret Anonim Şirketi Notes to the consolidated financial statements For the years ended December 31, 2013 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated.)

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1. Organization and operations of the Company GSD Denizcilik, Gayrimenkul, İnşaat Sanayi ve Ticaret Anonim Şirketi (the former legal title; “Tekstil Finansal Kiralama Anonim Şirketi”) (“the Company”) was established in 1992, in order to operate in Turkey pursuant to the license obtained from the Undersecreteriat of Treasury to the Prime Ministry (“Undersecretariat of Treasury”) for the purpose of finance leasing as permitted by the law numbered 3226. %45,54 percantage of certain shares of the Company are listed on the Borsa İstanbul (BİST) since 20 February 1995. According to the Board of Directors resolution dated 25 May 2011, the Company decided to initiate the process regarding the amendment of the articles of association to change the operating activity, due to the sectoral contraction. According to the amendment of articles of association, the title and name of the Company have been changed as “GSD Denizcilik Gayrimenkul İnşaat Sanayi ve Ticaret Anonim Şirketi” and “GSD Marin”, respectively. Based on the amendment of articles of association, the Company's purpose and activity is decided as purchasing and selling, operating, renting, building and trading of ships, yachts, sea vessels, and relevant instruments, equipment and spare parts; and the purchasing and selling, renting and building real estate properties. The Company's amendment of articles of association was submitted to and approved by the shareholders in the Extraordinary General Meeting held on 24 August 2011 subsequent to the approvals of Banking Regulation and Supervision Agency (“BRSA”), Capital Markets Board of Turkey (“CMB”) and the other relevant authorities. The Company's new title was registered on 26 August 2011 as GSD Denizcilik Gayrimenkul İnşaat Sanayi ve Ticaret Anonim Şirketi. The Company will be able to prosecute its rights and claims resulting from the leasing agreements signed with its former title until its former operating activity is completely ended; on the condition that no new leasing activity or agreement is taken upon, to carry out legal operations for the execution of supplemental agreements, amendment contracts such as change of lessee, term extension and reduction, and similar amendments, annulment of contract, legally follow up of lease receivables to get the underlying leased assets back and collection of receivables; and to partially or completely transfer and assign. The Company has mainly worked with the customers from construction, textile, metal, machine, chemistry and mining industries. The subsidiary companies Cano Maritime Limited and Dodo Maritime Limited have been registered in Malta on March 26, 2013 with 100% shareholding of the Company. The subsidiaries took the delivery of vessels of which the constructions were completed as of the date of May 7, 2013, and begun their operations through rental of vessels. The address of the Company’s registered office is Aydınevler Mahallesi, Kaptan Rıfat Sokak, No: 3 Küçükyalı-Maltepe-İstanbul. As of December 31, 2013 the Company has 9 employees (31 December 2012: 8 employees).

GSD Denizcilik Gayrimenkul İnşaat Sanayi ve Ticaret Anonim Şirketi Notes to the consolidated financial statements For the years ended December 31, 2013 (continued) (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise indicated.)

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1. Organization and operations of the Company (continued)

As at December 31, 2013 and December 31, 2012 information about shareholders and their percentages are as follow:

December 31, 2013 December 31, 2012

Amount % Amount %

GSD Holding A.Ş. (“GSD Holding”) 16,336 54.45 16,336 54.45 Listed 13,662 45.54 13,662 45.54 Other 2 0.01 2 0.01 Historical amount 30,000 100.00 30,000 100.00 Share capital inflation adjustment difference 16,341 16,341 Adjusted for inflation amount 46,341 46,341

As at December 31, 2013 and December 31, 2012 the distribution of the Company’s shares on the basis of group is as following:

December 31,

2013 December 31,

2012

Group A 8,976 8,976 Group B 3,741 3,741 Group C 15,038 15,038 Group D 2,245 2,245 30,000 30,000

Every shareholder has voting right in proportion to the shares. However Group A, B and D shareholders are priviledged in the selection of the Board of Directors, and group A and B shareholders are priviledged in electing auditors. There are no priviledges given to shareholders in the process of profit distribution. GSD Holding holds the entire group A, B and D shares and it holds group C shares that amount to TL 1,375.

The Company’s and the Consolidated Group Companies’ Activities

In the consolidated financial statements, the Company and the subsidiaries that are subject to consolidation are described as “The Group”. The subsidiaries that are included in the consolidation as of the date of December 31, 2013, the activity areas and the Group’s shares in these subsidiaries are as follows:

Subsidiary Country of Establishment Area of Activity Final Rate %

December 31, 2013

December 31, 2012

Dodo Maritime Ltd. (*) Malta Marine 100,00 - Cano Maritime Ltd. (*) Malta Marine 100,00 -

(*) Dodo Maritime Ltd. and Cano Maritime Ltd. were established with Euro 5.000 share capital by GSD Denizcilik Gayrimenkul İnşaat Sanayi ve Ticaret Anonim Şirketi on March 26, 2013 in Malta. Within the scope of the contract that GSD Maritime Real Estate Construction Industry and Trade Joint Stock Company signed by reference to building two dry cargo ships of 39,000 DWT, the two ships were delivered in South Korea upon completion of construction on May 7, 2013. The ships will be registered under the name of the subsidiaries Dodo Maritime Ltd. and Cano Maritime Ltd.


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2. Basis of presentation of financial statements 2.1 Basis of presentation 2.1.1 Principles of financial statement preparation and Declaration of Conformity The consolidated financial statements of the Group have been prepared in accordance with International Financial Reporting Standards (“IFRS”) including International Accounting Standards (“IAS”). The principal accounting policies adopted in the preparation of these financial statements are set out below. In accordance with IFRS, Dodo Maritime Ltd. and Cano Maritime Ltd. has entered the scope of consolidation after acquiring ships as of June 2013.

The Company’s December 31, 2013 financial statements were approved by the Board of Directors with 701 numbered decision in March 11, 2014. The General Assembly and related legal authorities have rights to adjust financial statements after the publication of the financial statements. 2.1.2 Functional and Reporting Currency The Company registered in Turkey maintains its books of account and prepare its statutory financial statements in TL in accordance with the Turkish Commercial Code (“TCC”), tax legislation and the Uniform Chart of Accounts issued by the Ministry of Finance. Subsidiaries maintain their books of account in accordance with the laws and regulations in force in the countries in which they are registered. These consolidated financial statements have been prepared under the historical cost conversion except for the financial assets and liabilities presented at fair values, and the revaluations related to the differences between the carrying value and fair value of the non-current assets recognised in business combinations. Adjustments and restatements, required for the fair presentation of the consolidated financial statements in conformity with the International Financial Reporting Standards, have been accounted for in the statutory financial statements which are prepared in accordance with the historical cost principle. Group’s companies Cano Maritime Limited and Dodo Maritime Limited’s functional currency is USA Dollars.

2.1.3 Basis of consolidation In the preparation of the consolidated financial statements, the subsidiaries for which the Company has control power over their financial and activity policies are identified as follows:

(a) If the Company has the authority to use more than 50% of the voting right in the due to its direct and/or indirect shareholding in those companies.

(b) Although the Company does not have the authority to use more than 50% of voting rights but has the authority and power to control the financial and operational policies control then the Company is included in the consolidation.


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2. Basis of presentation of financial statements (continued) Control power expresses the fact that the Company manages directly or indirectly the financial and operational policies of companies and receives benefit from this. The financial statements of the subsidiaries are included in the consolidation from the date that the management control begins to the date that the control ends. The consolidated financial statements consist of the financial statements of the Company and its subsidiaries as of December 31, 2013 and were prepared according to the principles below: i) The statements of financial position and income statements were subjected to consolidation by

using full consolidation method, and the registered values of the subsidiaries in the Company books and the equity capitals of the subsidiaries in the financial statements were reciprocally clarified. The consolidated financial statements were cleared of all the balances and transactions that resulted from the transactions between the subsidiaries and the Company and of all kinds of unearned income.

ii) In the preparation of the financial statements of the subsidiaries that are included in the

consolidation, the necessary corrections and classifications were applied to the records – which were kept based on historical costs – with regards to conformity to IFRS and to the accounting principles and policies and presentation of the Company.

iii) The operating results of the subsidiaries were included in the consolidation being effective as of

the date the control in the aforementioned companies was transferred to the Company. 2.1.4 Offsetting Financial assets and liabilities are offset and the net amount is reported in the balance sheet when there is a legally enforceable right to set-off the recognized amounts and there is an intention to settle on a net basis, or realize the asset and settle the liability simultaneously.

2.1.5 Going concern

The Company prepared its financial statements according to the going concern assumption. 2.2 Changes and mistakes in accounting policies 2.2.1 New and amended standards and interpretations: The accounting policies adopted in preparation of the consolidated financial statements as at 31 December 2013 are consistent with those of the previous financial year, except for the adoption of new and amended IFRS and IFRIC interpretations effective as of 1 January 2013. The effects of these standards and interpretations on the Company’s financial position and performance have been disclosed in the related paragraphs.


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2. Basis of presentation of financial statements (continued) The new standards, amendments and interpretations which are effective as at January 1, 2013 are as follows: IFRS 7 Financial Instruments: Disclosures – Offsetting Financial Assets and Financial Liabilities (Amendment) The amendment requires the disclosure of the rights of the entity relating to the offsetting of the financial instruments and some information about the related regulations (e.g., collateral agreements).

New disclosures would provide users of financial statements with information that is useful in; i) Evaluating the effect or potential effect of netting arrangements on an entity’s financial position

and ii) Analyzing and comparing financial statements prepared in accordance with IFRSs and other

generally accepted accounting standards. New disclosures have to be provided for all the financial instruments in the statement of financial position (balance sheet) that have been offset accordance IAS 32. Such disclosures also apply to recognised financial instruments in the statement of financial position that are subject to enforceable master netting arrangement or similar agreement, irrespective of whether they are set off in accordance with IAS 32. The amendment affects disclosures only and did not have any impact on the consolidated financial statements of the Company. IAS 1 Presentation of Financial Statements (Amended) – Presentation of Items of Other Comprehensive Income The amendments change only the grouping of items presented in other comprehensive income. Items that could be reclassified (or ‘recycled’) to profit or loss at a future point in time would be presented separately from items which will never be reclassified. The amendment affects presentation only and did not have an impact on the financial position or performance of the Company. IAS 19 Employee Benefits (Amended) Numerous changes or clarifications are made under the amended standard. Among these numerous amendments, the most important changes are removing the corridor mechanism, and recognizing actuarial gain/(loss) under other comprehensive income for defined benefit plans and making the distinction between short-term and other long-term employee benefits based on expected timing of settlement rather than employee entitlement. The Company recognized actuarial gain/(loss) under profit and loss and other comprehensive income since the amount is immaterial. IAS 27 Separate Financial Statements (Amended) As a consequential amendment to IFRS 10 and IFRS 12, the IASB also amended IAS 27, which is now limited to accounting for subsidiaries, jointly controlled entities, and associates in separate financial statements. This amendment did not have an impact on the financial position or performance of the Company.


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2. Basis of presentation of financial statements (continued) IAS 28 Investments in Associates and Joint Ventures (Amended) As a consequential amendment to IFRS 11 and IFRS 12, the IASB also amended IAS 28, which has been renamed IAS 28 Investments in Associates and Joint Ventures, to describe the application of the equity method to investments in joint ventures in addition to associates. This amendment did not have an impact on the financial position or performance of the Company. IFRS 10 Consolidated Financial Statements IFRS 10 replaces the parts of previously existing IAS 27 Consolidated and Separate Financial Statements that addresses the accounting for consolidated financial statements. A new definition of control is introduced, which is used to determine which entities are consolidated. This is a principle based standard and require preparers of financial statements to exercise significant judgment. This standard did not have an impact on the financial position or performance of the Company.

IFRS 11 Joint Arrangements The standard describes the accounting for joint ventures and joint operations with joint control. Among other changes introduced, under the new standard, proportionate consolidation is not permitted for joint ventures. This standard did not have an impact on the financial position or performance of the Company.

IFRS 12 Disclosure of Interests in Other Entities IFRS 12 includes all of the requirements that are related to disclosures of an entity’s interests in subsidiaries, joint arrangements, associates and structured entities. This Standard did not have an impact on the financial statements of the Company. IFRS 13 Fair Value Measurement The new Standard provides guidance on how to measure fair value under IFRS but does not change when an entity is required to use fair value. It is a single source of guidance under IFRS for all fair value measurements. The new standard also brings new disclosure requirements for fair value measurements. The new disclosures are only required for periods beginning after IFRS 13 is adopted. Some of the disclosures about the financial instruments mentioned above, have to be provided in the interim condensed consolidated financial statements according to IAS 34.16 A (j). IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine The Interpretation clarifies when production stripping should lead to the recognition of an asset and how that asset should be measured, both initially and in subsequent periods. The interpretation is not applicable for the Company and did not have any impact on the financial position or performance of the Company.


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2. Basis of presentation of financial statements (continued) Transition Guidance (Amendments to IFRS 10, IFRS 11 and IFRS 12) The amendments change the transition guidance to provide further relief from full retrospective application. The date of initial application is defined as ‘the beginning of the annual reporting period in which IFRS 10 is applied for the first time’. The assessment of whether control exists is made at ‘the date of initial application’ rather than at the beginning of the comparative period. If the control assessment is different between IFRS 10 and IAS 27/SIC-12, retrospective adjustments should be determined. However, if the control assessment is the same, no retrospective application is required. If more than one comparative period is presented, additional relief is given to require only one period to be restated. For the same reasons POA has also amended application guidance of IFRS 11 and IFRS 12 to provide transition relief. These amendments did not have an impact on the consolidated financial statements of the Company. Improvements to IFRSs Annual Improvements to IFRSs – 2009 – 2011 Cycle, which contains amendments to its standards, is effective for annual periods beginning on or after 1 January 2013. This project did not have an impact on the financial position or performance of the Company. IAS 1 Financial Statement Presentation: Clarifies the difference between voluntary additional comparative information and the minimum required comparative information. IAS 16 Property, Plant and Equipment: Clarifies that major spare parts and servicing equipment that meet the definition of property, plant and equipment are not inventory. IAS 32 Financial Instruments: Presentation: Clarifies that income taxes arising from distributions to equity holders are accounted for in accordance with IAS 12. The amendment removes existing income tax requirements from IAS 32 and requires entities to apply the requirements in IAS 12 to any income tax arising from distributions to equity holders. IAS 34 Financial Reporting: Clarifies the requirements in IAS 34 relating to segment information for total assets and liabilities for each reportable segment. Total assets and liabilities for a particular reportable segment need to be disclosed only when the amounts are regularly provided to the chief operating decision maker and there has been a material change in the total amount disclosed in the entity’s previous annual financial statements for that reportable segment. Standards issued but not yet effective and not early adopted Standards, interpretations and amendments to existing standards that are issued but not yet effective up to the date of issuance of the consolidated financial statements and not early adopted by the Company are as follows. The Company will make the necessary changes if not indicated otherwise, which will be affecting the consolidated financial statements and disclosures, when the new standards and interpretations become in effective.


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2. Basis of presentation of financial statements (continued) IAS 32 Financial Instruments: Presentation - Offsetting Financial Assets and Financial Liabilities (Amended) The amendments clarify the meaning of “currently has a legally enforceable right to set-off” and also clarify the application of the IAS 32 offsetting criteria to settlement systems (such as central clearing house systems) which apply gross settlement mechanisms that are not simultaneous. These amendments are to be retrospectively applied for annual periods beginning on or after 1 January 2014. The Company does not expect that these amendments will have significant impact on the financial position or performance of the Company. IFRS 9 Financial Instruments – Classification and Measurement As amended in December 2012, the new standard is effective for annual periods beginning on or after 1 January 2015. Phase 1 of IFRS 9 introduces new requirements for classifying and measuring financial instruments. The amendments made to IFRS 9 will mainly affect the classification and measurement of financial assets and measurement of fair value option (FVO) liabilities and requires that the change in fair value of a FVO financial liability attributable to credit risk is presented under other comprehensive income. Early adoption is permitted. The Company is in the process of assessing the impact of the new standard on the financial position or performance of the Company. IFRIC Interpretation 21 Levies The interpretation clarifies that an entity recognizes a liability for a levy when the activity that triggers payment, as identified by the relevant legislation, occurs. It also clarifies that a levy liability is accrued progressively only if the activity that triggers payment occurs over a period of time, in accordance with the relevant legislation. For a levy that is triggered upon reaching a minimum threshold, the interpretation clarifies that no liability should be recognized before the specified minimum threshold is reached. The interpretation is effective for annual periods beginning on or after 1 January 2014, with early application permitted. Retrospective application of this interpretation is required. The Company does not expect that this amendment will have any impact on the financial position or performance of the Company. Amendments to IAS 36 - (Recoverable Amount Disclosures for Non-Financial assets) As a consequential amendment to IFRS 13 Fair Value Measurement, some of the disclosure requirements in IAS 36 Impairment of Assets regarding measurement of the recoverable amount of impaired assets has been modified. The amendments required additional disclosures about the measurement of impaired assets (or a group of assets) with a recoverable amount based on fair value less costs of disposal. The amendments are to be applied retrospectively for annual periods beginning on or after 1 January 2014. The Company does not expect that this amendment will have any impact on the financial position or performance of the Company. Amendments to IAS 39 - Novation of Derivatives and Continuation of Hedge Accounting Amendments to IAS 39 Financial Instruments: Recognition and Measurement, provides a narrow exception to the requirement for the discontinuation of hedge accounting in circumstances when a hedging instrument is required to be novated to a central counterparty as a result of laws or regulations. The amendments are to be applied retrospectively for annual periods beginning on or after 1 January 2014. The Company does not expect that this amendment will have any impact on the financial position or performance of the Company.


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2. Basis of presentation of financial statements (continued) IFRS 10 Consolidated Financial Statements (Amendment) IFRS 10 is amended to provide an exception to the consolidation requirement for entities that meet the definition of an investment entity. The exception to consolidation requires investment entities to account for subsidiaries at fair value through profit or loss in accordance with IFRS 9 Financial Instruments. The amendments are to be applied retrospectively for annual periods beginning on or after 1 January 2014. This amendment will not have any impact on the financial position or performance of the Company. The new standards, amendments and interpretations that are issued by the International Accounting Standards Board (IASB) but not issued by POA The following standards, interpretations and amendments to existing IFRS standards are issued by the IASB but not yet effective up to the date of issuance of the financial statements. However, these standards, interpretations and amendments to existing IFRS standards are not yet adapted/issued by the POA, thus they do not constitute part of IFRS. The Company will make the necessary changes to its consolidated financial statements after the new standards and interpretations are issued and become effective under IFRS. IFRS 9 Financial Instruments – Hedge Accounting and amendments to IFRS 9, IFRS 7 and IAS 39 -IFRS 9 (2013) In November 2013, the IASB issued a new version of IFRS 9, which includes the new hedge accounting requirements and some related amendments to IAS 39 and IFRS 7. Entities may make an accounting policy choice to continue to apply the hedge accounting requirements of IAS 39 for all of their hedging relationships. The standard does not have a mandatory effective date, but it is available for application now; a new mandatory effective date will be set when the IASB completes the impairment phase of its project on the accounting for financial instruments. The Company is in the process of assessing the impact of the standard on financial position or performance of the Company. Improvements to IFRSs

In December 2013, the IASB issued two cycles of Annual Improvements to IFRSs – 2010–2012 Cycle and IFRSs – 2011–2013 Cycle. Other than the amendments that only affect the standards’ Basis for Conclusions, the changes are effective for annual reporting periods beginning on or after 1 July 2014. Annual Improvements to IFRSs – 2010–2012 Cycle IFRS 2 Share-based Payment: Definitions relating to vesting conditions have changed and performance condition and service condition are defined in order to clarify various issues. The amendment is effective prospectively. IFRS 3 Business Combinations Contingent consideration in a business acquisition that is not classified as equity is subsequently measured at fair value through profit or loss whether or not it falls within the scope of IFRS 9 Financial Instruments. The amendment is effective for business combinations prospectively.


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2. Basis of presentation of financial statements (continued) IFRS 8 Operating Segments The changes are as follows: i) Operating segments may be combined/aggregated if they are consistent with the core principle of the standard. ii) The reconciliation of segment assets to total assets is only required to be disclosed if the reconciliation is reported to the chief operating decision maker. The amendments are effective retrospectively. Amendment to the Basis for Conclusions on IFRS 13 Fair Value Measurement As clarified in the Basis for Conclusions short-term receivables and payables with no stated interest rates can be held at invoice amounts when the effect of discounting is immaterial. The amendment is effective immediately. IAS 16 Property, Plant and Equipment and IAS 38 Intangible Assets The amendment to IAS 16.35(a) and IAS 38.80(a) clarifies that revaluation can be performed, as follows: i) Adjust the gross carrying amount of the asset to market value or ii) determine the market value of the carrying amount and adjust the gross carrying amount proportionately so that the resulting carrying amount equals the market value. The amendment is effective retrospectively. IAS 24 Related Party Disclosures The amendment clarifies that a management entity – an entity that provides key management personnel services – is a related party subject to the related party disclosures. The amendment is effective retrospectively. Annual Improvements to IFRSs – 2011–2013 Cycle IFRS 3 Business Combinations The amendment clarifies that: i) Joint arrangements are outside the scope of IFRS 3, not just joint ventures ii) The scope exception applies only to the accounting in the financial statements of the joint arrangement itself. The amendment is effective prospectively. IFRS 13 Fair Value Measurement The portfolio exception in IFRS 13 can not only be applied to financial assets, financial liabilities and other contracts, also be applied to other contracts under IAS 39. The amendment is effective prospectively. IAS 40 Investment Property The amendment clarifies the interrelationship of IFRS 3 and IAS 40 when classifying property as investment property or owner-occupied property. The amendment is effective prospectively. These amendments did not have an impact on the financial position or performance of the Company.


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2. Basis of presentation of financial statements (continued) IFRS 14 - interim standard on regulatory deferral accounts. In January 2014, the IASB issued this standard. IFRS 14 permits first-time adopter rate regulated entities to continue to recognise amounts related to rate regulation in accordance with their previous GAAP requirements when they adopt IFRS. Existing IFRS preparers are prohibited from adopting this Standard. The Standard will be applied on a full retrospective basis and is effective for annual periods beginning on or after 1 January 2016. Earlier application is permitted. The Standard is not applicable for the Company and will not have an impact on the financial position or performance of the Company. Resolutions promulgated by the Public Oversight Authority In addition to those mentioned above, the POA has promulgated the following resolutions regarding the implementation of Turkish Accounting Standards. “The financial statement examples and user guide” became immediately effective at its date of issuance; however, the other resolutions shall become effective for the annual reporting periods beginning after December 31, 2012. 2013-1 Financial Statement Examples and User Guide The POA promulgated “financial statement examples and user guide” on May 20, 2013 in order to ensure the uniformity of financial statements and facilitate their audit. The financial statement examples within this framework were published to serve as an example to financial statements to be prepared by companies obliged to apply Turkish Accounting Standards, excluding financial institutions established to engage in banking, insurance, private pensions or capital market. This amendment did not have any impact on the financial position or performance of the Company. 2013-2 Accounting of Combinations under Common Control In accordance with the resolution it has been decided that i) combination of entities under common control should be recognized using the pooling of interest method, ii) and thus, goodwill should not be included in the financial statements and iii) while using the pooling of interest method, the financial statements should be prepared as if the combination has taken place as of the beginning of the reporting period in which the common control occurs and should be presented comparatively from the beginning of the reporting period in which the common control occurred. This resolution did not have any impact on the consolidated financial statements of the Company. 2013-3 Accounting of Redeemed Share Certificates Clarification has been provided on the conditions and circumstances where the redeemed share certificates shall be recognized as a financial liability or equity based financial instruments. This resolution did not have any impact on the (consolidated) financial statements of the Company.


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2. Basis of presentation of financial statements (continued) 2013-4 Accounting of Cross Shareholding Investments If a subsidiary of an entity holds shares of the entity then this is defined as cross shareholding investment. Accounting of this cross investment is assessed based on the type of the investment and different recognition principles adopted accordingly. With this resolution, this topic has been assessed under three main headings below and the recognition principles for each one of them has been determined. i) the subsidiary holding the equity based financial instruments of the parent,

ii) the associates or joint ventures holding the equity based financial instruments of the parent,

iii) the parent’s equity based financial instruments are held by an entity, which is accounted as an investment within the scope of IAS 38 and IFRS 9 by the parent.

2.3 Summary of significant accounting policies (a) Financial instruments Non – derivative financial instruments Group’s financial assets comprise of receivables from finance sector operations, cash and cash equivalents and financial investments. Financial liabilities, payables from finance sector operations and other payables are classified as financial liabilities. Non-derivative financial instruments are recognised initially at fair value plus any directly attributable transaction costs, excluding held for trading instruments. Subsequent to initial recognition non-derivative financial instruments are measured as described below: Cash and cash equivalents comprise of cash on hand, demand deposits and other short-term highly liquid investments where their original maturities are three months or less, that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value.

Receivables from finance sector operations consist of finance lease receivables and sum of the minimum lease payements, including interest and principal amounts, are included in gross lease receivables account. As the lease payments are made, the lease amount is is deducted from finance lease receivables account; the interest component is considered as interest income in the profit or loss.

Trade receivables that are created by way of providing goods or services directly to a debtor are carried at amortised cost. Trade receivables, net of unearned financial income, are measured at amortised cost, using the effective interest rate method, less the unearned financial income. Short duration receivables with no stated interest rate are measured at the original invoice amount unless the effect of imputing interest is significant.

Financial liabilities are measured initially at fair value. Any transaction costs directly attributable to the undertaking of a financial liability are added on the fair value of the financial liability. These financial liabilities are subsequently measured at amortised cost using the effective interest method and differences between initially recognized costs are recognized in income statements until maturity.

Trade payables are payments to be made arising from the purchase of goods and services from suppliers within the ordinary course of business. Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.


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2. Basis of presentation of financial statements (continued)

Liabilities from finance sector operations are recognized on cost values due to their short term nature. A financial asset is derecognized where the rights to receive cash flows from the asset have expired, the Group retains the right to receive cash flows from the asset but has assumed an obligation to pay them in full without material delay to a third party under a ‘pass-through’ arrangement or the Group has transferred its rights to receive cash flows from the asset. Derivatives

Derivatives are recognised initially at fair value; attributable transaction costs are recognised in profit

or loss as incurred. Derivatives are carried as assets when the fair value is positive and as liabilities when the fair value is negative.

(b) Tangible Fixed Assets and Depreciation

Tangible fixed assets acquired prior to January 1, 2005 are carried with restated cost for the effects of inflation as of December 31, 2004 less accumulated depreciation and any accumulated impairment losses. Tangible fixed assets acquired after December 31, 2004 are carried at cost less accumulated depreciation and any accumulated impairment losses. Subsequent costs

Subsequent costs, such as repairs and maintenance or part replacement of tangible assets, are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits with the item will flow to the company. All other costs are charged to the statements of profit or loss during the financial year in which they are incurred.

Depreciation

Depreciation for tangible fixed assets is provided on a straight-line basis over their estimated useful lives. Depreciation is provided for leasehold improvements on a straight-line basis over the related lease period. Depreciation corresponding to the period is calculated by dividing costs incurred for tangible assets after deducting the salvage value by the asset’s useful life. Salvage value represents value of the related fixed asset at the end of its useful life.

Group management makes important assumptions about determination of ships’ useful life in direction of technical team experiences. Besides, market data is used for determination of salvage value. The estimated useful lives for the current and comparative periods are as follows:

Years

Ships 18 Furniture and fixtures 4-5 Leasehold improvements 5

Gains or losses on disposals of tangible assets are classified under “other operating income” and “other operating expense” accounts, respectively.

(c) Assets held for sale

Non-current assets or asset groups that meet the criteria of asset held for sale are measured at the lower of its carrying amount and fair value less cost to sell. These assets are not depreciated.


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2. Basis of presentation of financial statements (continued) (d) Depreciation on Assets Financial Assets Unrealised gains and losses arising from changes in the fair value of securities classified as available-for-sale are accounted in equity net of tax under “financial assets fair value reserve”. Unrealised gains and losses arising from changes in the fair value of available-for-sale debt securities are the differences between the fair value of such securities and their amortised costs at the balance sheet date. When available-for-sale securities are sold, collected or otherwise disposed of, related deferred gains and losses in equity are transferred to the consolidated income statement. If the difference between the cost and the fair value of the available-for-sale securities is permanent, gains and losses are transferred to the consolidated income statement. Non-financial Assets The recoverable amount is the higher of fair value less costs to sell and value in use. Value in use is determined by discounting the expected future cash flows to be generated by the cash-generating unit. In the subsequent term, if the impairment loss decreases and the related decrease is objectively associated with a case (such as improvement at the credit rate of the obligator) occurred after the impairment loss has been recognized/accounted, the recognized impairment loss has been reversed directly or by using a provision account. (e) Share capital increases

Share capital increased pro-rata to existing shareholders is accounted for at par value as approved at the annual meeting of shareholders. (f) Provision for employee severance payments In accordance with the existing social legislation in Turkey, the Company is required to make certain lump-sum payments to employees whose employment is terminated due to retirement or for reasons other than resignation or misconduct. Such payments are calculated on the basis of an agreed formula, are subject to certain upper limits and are recognised in the accompanying financial statements as accrued. Since there is no funding requirement in Turkey, no funds were created for these benefit plans. Costs of employees’ services in the current or prior periods are calculated by annual liability method in

the framework of defined benefit plans. Even though the Employee Benefits (IAS 19) standard was

published on the official gazette on March 12, 2013, no. 28585, states recognizing actuarial gain/(loss) under equity, Group recognized actuarial gain/(loss) under profit and loss and other comprehensive income since the amount is immaterial.


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2. Basis of presentation of financial statements (continued) The reserve has been calculated by estimating the present value of the future obligation of the Company that may arise from the retirement of the employees in accordance with IAS 19.

December 31,

2013 December 31,

2012

Net discount rate %4.31 %1.87 Expected rate of salary / limit increase %6 %5 Turnover rate to estimate the probability of retirement %85 %83

The principal assumption is that the maximum liability for each year of service will increase in line with inflation. As the maximum liability is revised semi-annually, amount of full TRY 3,254.44 (December 31, 2012: full TRY 3,033.98) which is effective as of December 31, 2013 has been taken into consideration in calculating the reserve for employment termination benefits of the Company. (g) Provisions, contingent assets and liabilities Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate of the amount can be made. Where the effect of the time value of money is material, the amount of provision shall be the present value of the expenditures expected to be required to settle the obligation. The discount rate reflects current market assessments of the time value of money and the risks specific to the liability. (h) Revenue recognition

(i) Interest and other income from finance sector activities

Interest and other income from finance sector operations are recognized on accrual basis by using effective interest method.

(ii) Dividend Income

Dividend income is recognized in profit or loss in the period they are declared.

(iii) Other income and expenses

Other income and expenses are recognized on accrual basis.

(iv) Financial Income / (Expenses)

Financial income and expenses are recognized on accrual basis by using the effective interest rate method over the period.

(v) Marine sector revenues and expenses

Marine sector revenues and expenses are recognized on accrual basis.


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2. Basis of presentation of financial statements (continued)

(i) Taxes on income Income taxes include current period income tax liabilities and deferred tax liabilities. Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and are accounted for using the liability method. Deferred tax liabilities are recognised to the extent that it is probable that future taxable profit will be available against which the deductible temporary difference can be utilised.

(j) Related Parties For the purpose of these consolidated financial statements, shareholders and associated companies and other companies within the GSD Holding group, key management personnel and Board members, in each case together with their families and companies controlled by/or affiliated with them, are considered and referred to as related parties.Transactions with related parties are priced according to market conditions. Related party, is an individual or entity related to the entity preparing the financial statements (‘reporting entity’). (a) A person or a close member of that person's family is related to a reporting entity if that person:

(i) has control or joint control over the reporting entity; (ii) has significant influence over the reporting entity; or (iii) is a member of the key management personnel of the reporting entity or of a parent of the

reporting entity.

(b) The entity and the reporting entity are members of the same group (which means that each parent, subsidiary and fellow subsidiary is related to the others).

(i) The entity and the company are members of the same group. (ii) One entity is an associate or joint venture of the other entity (or an associate or joint

venture of a member of a group of which the other entity is a member). (iii) Both entities are joint ventures of the same third party. (iv) One entity is a joint venture of a third entity and the other entity is an associate of the third

entity. (v) The entity is a post-employment benefit plan for the benefit of employees of either the

reporting entity or an entity related to the reporting entity. If the reporting entity is itself such a plan, the sponsoring employers are also related to the reporting entity.

(vi) The entity is controlled or jointly controlled by a person identified in (a). (vii) A person identified in (a)(i) has significant influence over the entity or is a member of the

key management personnel of the entity (or of a parent of the entity).


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2. Summary of significant accounting policies (continued) A related party transaction is a transfer of resources, services or obligations between related parties, regardless of whether a price is charged. (k) Earning per share In Turkey, companies can increase their share capital through a pro-rata distribution of shares (“bonus shares”) to existing shareholders from retained earnings and inflation adjustment to equity. For the purpose of earnings per share computations, the weighted average number of shares in existence during the period has been adjusted in respect of bonus share issues without a corresponding change in resources, by giving them retroactive effect for the period in which they were issued and each earlier period as if the event had occurred at the beginning of the earliest period reported. (l) Borrowing costs Investment in a tangible asset that can not be associated with all borrowing costs are recognized in profit or loss in the period they occur. (m) Leases (i) Finance leases Leases of property, plant and equipment where the Group substantially assumes all the risks and rewards of ownership are classified as finance leases. The finance charge is allocated to each period during the lease term so as to produce a constant periodic rate. (ii) Financial leasing is explained in Not 2.3(a). (n) Events after the reporting period

Events after the reporting period refer to events that in favor or against to company and occur between the end of the reporting period and the balance sheet’s date of authorization for the publication. In accordance with TMS 10 “Events after the reporting period”, as of ending reporting period, in terms of occurring new evidences about related events or in terms of occurring related events after reporting period and if these events require correction of financial statements, Group adjust consolidated financial statements in accordance with new state. If related events do not require correction of consolidated financial statements, Company explains related matters in footnotes. (o) Segment reporting Operating segments are reported in a manner consistent with the reporting provided to the chief operating decision-maker. The chief operating decision-maker is responsible for allocating resources and assessing performance of the operating segments.Since the Group has no material activity besides marine activities, segment reporting is not reported.


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2. Summary of significant accounting policies (continued) (p) Cash Flow Statement Group prepares cash flow statement to inform users of the financial statements about changes in net assets, financial structure and the amount and timing of cash flows’ guidance ability in terms of changing circumstances. Cash flows during the period are classified and reported by operating, investing and financing activities in the cash flow statements. Cash flows from operating activities represent the cash flows generated from the Group’s activities. Cash flows related to investing activities represent the cash flows that are used in or provided from the investing activities of the Group (fixed investments and financial investments). Cash flows arising from financing activities represent the cash proceeds from the financing activities of the Group and the repayments of these funds. Cash and cash equivalents represent cash in hand, deposits in banks with maturities of 3 months or less, and short-term high liquid investments with original maturities of 3 months or less and not having depreciation risk. As of 31 December 2013 and 31 December 2012, cash and cash equivalents details are as follows

except the interest income rediscounts presented in the cash flow statement.

December 31,

2013 December 31,

2012

Cash 2 2 Banks (less than 3 months) 3,781 16,741

3,783 16,743

Foreign currency transactions and balances Foreign currency transactions are translated using the exchange rates prevailing at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rates at the balance sheet date. Foreign exchange gains and losses resulting from trading activities (trade receivables and payables) denominated in foreign currencies of the Group companies operating in the non-finance sectors, have been accounted for under “other operating income/expenses” whereas foreign exchange gains and losses resulting from the translation of other monetary assets and liabilities denominated in foreign currencies have been accounted for under “financial income/expenses” in the consolidated income statement. Foreign exchange gains and losses resulting from monetary asset and liabilities denominated in foreign currencies of the Group companies operating in the finance sector, have been classified under “revenue/cost of finance sector operations” in the consolidated income statement. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated to functional currency using the exchange rates as at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.


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2. Summary of significant accounting policies (continued) Financial statements of foreign subsidiaries, joint ventures and associates The assets and liabilities, presented in the financial statements of the foreign Subsidiaries, Joint Ventures and Associates prepared in accordance with the Group’s accounting policies, are translated into TL at the exchange rate at the date of the balance sheet whereas income and expenses are translated at the average exchange rates for the respective periods. Exchange differences resulting from using the exchange rates at the balance sheet date and the average exchange rates are recognised in the currency translation differences under the equity. Rate of exchange from December 31, 2013 and December 31, 2012 that were used by the company as follows:

December 31,

2013 December 31,

2012

USD 2.1343 1.7826 EURO 2.9365 2.3517 GBP 3.5114 2.8708

(s) Inventories Inventories are valued at the lower of cost or net realizable value. The cost of inventories is determined on the weighted average basis for each purchase. Group’s inventories consist of mineral oil. Inventories costs comprise purchase cost and, where applicable and those overheads that have been incurred in bringing the inventories to their present location and condition. Net realizable value is the estimated selling price in the ordinary course of business, less the costs of completion and estimated costs to make the sale. 3. Cash and cash equivalents

As of December 31, 2013 and December 31, 2012 cash and cash equivalents comprised the following:

31 December 2013 31 December 2012

Cash at banks 3,783 16,832 Demand deposit 1,825 163 Time deposit 1,958 16,669 Cash on hands 2 2

Total cash and cash equivalents 3,785 16,834

As of December 31, 2013, the time deposits comprised TL, EUR and USD bank placements.As of December 31, 2013 interest rates are between %3.50 for TL, %0.20 for EUR and %3.50 for USD (31 December 2012: %5.00 - %8.75 for TL, %0,25-%3.50 for USD) denominated bank accounts with an original maturity up to three months. The first upcoming unpaid loan installment amount is assigned by the Bank from the ship lease incomes collected through Bank. (31 December 2012: None).


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4. Financial investments

4.1 Financial assets available for sale

As of December 31, 2013 and December 31, 2012 financial assets (available for sale) are comprised of shares that are traded on the stock exchange.

As of December 31, 2013 and December 31, 2012 details of financial assets available for sale are as follows;


% of

shares Carrying

value % of

shares Carrying

value

Listed GSD Holding 0.17 374 0.17 331 Tekstilbank A.Ş 0.04 161 0.04 134

535 465

Company’s financial investments are exposed to the credit, liquidity and market risk exposures are disclosed in Note 31. 4.2 Derivative financial assets held for trading

As of December 31, 2013 and December 31, 2012, derivative financial assets held for trading which are comprised of currency swap agreements are as follows;

December 31,

2013 December 31,

2012

Derivative financial assets held for trading - 17 - 17

4.3 Derivative financial liabilities held for trading As of December 31, 2013 and December 31, 2012, derivative financial liabilities held for trading which are comprised of currency swap agreements are as follows;

December 31,

2013 December 31,

2012

Derivative financial liabilities held for trading - 23

- 23


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4. Financial investments (continued)

4.4 Other financial investments As of December 31, 2013 and December 31, 2012 financial investments (other financial investments) which are disclosed under non-current assets comprised of shares that are not traded on the stock exchange. As of 31 December 2013 and 31 December 2012, details of other financial investments are as follows; December 31, 2013 December 31, 2012

% of

shares Carrying

value % of

shares Carrying

value

Not listed Tekstil Faktoring Hizmetleri A.Ş 1.98 813 1.98 813 Other - 37 - 37

850 850

5. Related party disclosures A company is defined as a related party of the Company, if one of the companies has control power on the other company or has a significant impact on financial and administrative decisions of the other company. The Company is ultimately controlled by GSD Holding that owns the 54.45% (December 31, 2012: 54.45%) of its shares and that is the principal shareholder of the Company. The ultimate owner of the Company is GSD Holding and in the accompanying financial statements GSD Holding and its related companies are disclosed as related parties.In addition, related parties include the Company’s principal owners, management, Board of Directors and their families. (a) Banks

December 31,

2013 December 31,

2012

Cash at banks 1,604 16,689 Tekstil Bankası A.Ş. (Other related party) 1,603 16,040 GSD Bank (Other related party) 1 649 Bank borrowings 3,351 11 Tekstil Bankası A.Ş. (Other related parties) 3,351 11


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5. Related party disclosures (continued) At 31 December 2013, letters of guarantee obtained from related party banks are amounting to TL 44 (31 December 2012: TL 125). Out of such amount, letter of guarantee amounting to TL 2 (31 December 2012: TL 21) of these letters of guarantee is obtained from Tekstil Bankası AŞ and TL 42 (31 December 2012: TL 104) is obtained from GSD Yatırım Bankası AŞ and are submitted to various public authorities and banks. (b) Other balances and transactions with related parties As of December 31, 2013 and December 31, 2012 trade receivables with related parties are as follows:

December 31,

2013 December 31,

2012

Trade receivables 20 -

Total 20 -

As of December 31, 2013 and December 31, 2012, trade payables with related parties are as follows:

December 31,

2013 December 31,

2012

Trade payables 48 56

Total 48 56

Following transactions with related parties took place during the years ended 31 December: December 31,

2013 December 31,

2012

Tekstil Faktoring Hizmetleri A.Ş. – dividend income 99 218 GSD Dış Ticaret A.Ş. – chargeout income 72 - Tekstil Bankası A.Ş. - interest income 12 1,075 GSD Bank – interest income 7 1,035 Tekstil Bankası A.Ş.- income /(Expense) from derivative

transactions - 227 GSD Reklam ve Halkla İlişkiler Hizmetleri A.Ş. – dividend

income - 27 GSD Bank – banking commision expenses (1) (3) Tekstil Bankası A.Ş. – service fee paid archive (2) - Tekstil Bankası A.Ş. – banking commision expenses (6) (1) GSD Holding - attorneys’ fees paid (15) (30) GSD Bank - income /(Expense) from derivative transactions (41) 680 GSD Bank – representation expenses (43) (42) M. Turgut Yılmaz – rent expenses (200) (190) Tekstil Bankası A.Ş.– interest expenses (291) (6) GSD Holding – representation expenses (381) (368)


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5. Related party disclosures (continued) (c) Derivative financial transactions The Group, as of December 31, 2013, has not realized currency swap transactions. (31 December 2012: TL 4,238 nominal amount). (d) Key management benefits Total benefit of key management for the period ended 31 December 2013, amounting to TL 701 (31 December 2012: TL 608) respectively. (e) Other As of 31 December 2013, GSD Holding, as a guarantee against its open lines of credit, has provided surety amounting to TL 148,939 to credit institutions. (December 31, 2012: TL 95,448) 6. Trade receivables and payables 6.1 Trade receivables As of December 31, 2013 and December 31, 2012, details of trade receivables are as follows:

December 31,

2013 December 31,

2012

Trade receivables from marine activities 1,250 - Other trade receivables 20 -

1,270 -

(*) Trade receivables comprised expenses that are invoiced to GSD Holding and GSD Yatırım

Bankası. 6.2 Trade payables As of December 31, 2013 and December 31, 2012, details of trade payables are as follows:

December 31,

2013 December 31,

2012

Trade payables from marine activities 60 - Other trade payables (*) 48 56

108 56

(*) Trade payables comprised of representation services that are provided by GSD Holding and

GSD Yatırım Bankası.


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7. Receivables and payables from finance sector activities 7.1 Receivables from finance sector activities As of December 31, 2013 and December 31, 2012, details of short-term receivables from finance sector operations are as follows;

December 31,

2013 December 31,

2012

Finance lease receivables 1,507 7,118 Doubtful receivables 2,654 3,005 Provision for doubtful receivables (2,654) (3,005)

1,507 7,118

As of December 31, 2013 and December 31, 2012 details of long-term receivables from finance sector operations are as follows;

December 31,

2013 December 31,

2012

Long-term finance lease receivables 228 1,294 228 1,294

The Company’s credit, liquidity and market risk exposures resulting from financial sector liabilities are disclosed in Note 31. 7.1.1 Finance lease receivables As of December 31, 2013 and December 31, 2012 details of finance lease receivables are as follows; December 31,

2013 December 31,

2012

Short-term finance lease receivables Finance lease receivables, due 157 441 Finance lease receivables, not due 1,627 7,296 Unearned interest income (277) (619)

Short-term finance lease receivables, net 1,507 7,118

Long-term finance lease receivables Finance lease receivables, not due 232 1,347 Unearned interest income (4) (53)

Long-term finance lease receivables, net 228 1,294

Total finance lease receivables, net 1,735 8,412


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7. Receivables and payables from finance sector activities (continued) As of December 31, 2013 and December 31, 2012 the maturity profile of finance lease receivables not due yet are as follows:

2013 Up to 1 year 1-2 years 2-3 years 3-5 years 5 years and

over Total

Finance lease receivables, net 1,350 228 - - - 1,578

Unearned income 277 4 - - - 281

1,627 232 - - - 1,859

2012 Up to 1 year 1-2 years 2-3 years 3-5 years 5 years and

over Total

Finance lease receivables, net 6,677 1,100 194 - - 7,971

Unearned income 619 49 4 - - 672

7,296 1,149 198 - - 8,643

As of December 31, 2013 and December 31, 2012 the currency distribution of finance lease receivables not due yet are as follows:

Currency

Foreign currency principal amount

Principal

amount in TL

Unearned income in

foreign currency

Unearned income

amount in TL

2013

TL 329 329 72 72 Euro 305 895 54 159 USD 166 354 24 50

1,578 281

2012

TL 935 935 222 222 Euro 2,625 6,173 146 343 USD 484 863 60 107

7,971 672

The interest rates of the finance lease contracts are fixed at December 31, 2013. As of December 31, 2013, the average interest rate of finance lease receivables denominated in USD is %5.48, in Euro is %5.34, and in TL is %10.23.


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7. Receivables and payables from finance sector activities (continued) The interest rates of the finance lease contracts are fixed at December 31, 2012. At December 31, 2012, the average interest rate of finance lease receivables denominated in USD is %6.35, in Euro is %5.75, and in TL is %10.58. As of December 31, 2013, a certain portion of finance lease receivables of the Company amounted to TL 157 (31 December 2012: TL 441) is past due but not considered as impaired since these receivables either have been considered as collectible by the Company management based on their past experience with the customers and since they have been secured with collaterals. The maturity profile of such receivables is as follows:

Finance lease receivables

December 31,

2013 December 31,

2012

Past due but not impaired 0-30 days 108 184 30-60 days - 87 60-90 days 5 63 90-180 days 17 77 180 days and over 27 30

Total value 157 441

7.1.2 Doubtful receivables The Company books provisions for allowance for doubtful leasing receivables on a customer basis. Provision amounts consist of receiavabales from uncollectable repayments and uncollectable guarantees acquired for those receivables. The activities of the provisions which are reserved for doubtful receivables are as follows

December 31,

2013 December 31,

2012

Balance at January 1 3,005 2,812 Current period provisions 317 193 Current period collections for provision (49) - Current period write-offs (619) -

Balance at December 31 2,654 3,005

The doubtful receivables provision expenses that are reserved within the period are accounted in the other operating expenses.


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7. Receivables and payables from finance sector activities (continued) 7.2 Payables from finance sector activities As of December 31, 2013 and December 31, 2012 details of trade payables from finance sector operations are as follows;

December 31,

2013 December 31,

2012

Advance received 500 422 Suppliers 39 112 Other 12 12

551 546

8. Other receivables and payables 8.1 Other receivables As of December 31, 2013 and December 31, 2012, details of other receivables are as follows;

December 31,

2013 December 31,

2012

Receivables from finance lease agreements 261 318 Other receivables 5 5

266 323

8.2 Other payables As of December 31, 2013 and December 31, 2012, details of other payables are as follows;

December 31,

2013 December 31,

2012

Other taxes payables 83 141 Social security premiums payables 15 11

98 152

9. Inventories As of December 31, 2013 and December 31, 2012 details of inventories are as follow;

December 31,

2013 December 31,

2012

Ship oil 259 -

259 -


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10. Prepaid expenses As of December 31, 2013 and December 31, 2012 details of prepaid expenses that are classified in current assets are as follow;

December 31,

2013 December 31,

2012

Insurance expenses 250 85 Prepaid miscellaneous expenses 10 6 Prepaid credit commission - 81

260 172

As of December 31, 2013 and December 31, 2012, details of prepaid expenses that are classified in non-current assets are as follow;

December 31,

2013 December 31,

2012

Prepaid expenses 14 68 Prepaid credit commission - 655

14 723

The Company signed a loan contract to be used in financing of ships in 2012. Although these loans were not used by the Company as of the reporting date, the Company made loan commission payments in advance. As of May 31, 2013, the ships were transferred to the subsidiaries Dodo Maritime Ltd. and Cano Maritime Ltd. within the scope of novation agreement and trilateral contract. As a result of this transaction, the credit commissions that were paid in advance were reflected to subsidiaries and were added to the cost of the ships. 11. Current income tax assets As of the dates of December 31, 2013 and December 31, 2012, details of the assets related to the current period tax are as follows:

December 31,

2013 December 31,

2012

Prepaid taxes 17 357

17 357

12. Assets held for sale As of December 31, 2013, assets held for sale amounting to TL 281 comprised of a land, a building and miscellaneous machineries which were acquired from certain customers in exchange for financial lease receivables (December 31, 2012: TL 387).


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13. Property, plant and equipment Movements of property and equipment and related accumulated depreciation during the period ended December 31, 2013 were as follows:

January 1,

2013 Additions Disposals

Currency translation differences

December 31, 2013

Cost

Ships - 97,062 - 13,959 111,021

Furniture and fixtures 1,326 6 - - 1,332

1,326 97,068 - 13,959 112,353

January 1,

2013

Current year

charge Disposals


December 31, 2013

Accumulated depreciation

Ships - 3,085 - - 3,085


1,320 3,088 - - 4,408

Net book value 6 93,980 - 13,959 107,945

Movements of property and equipment and related accumulated depreciation during the year ended December 31, 2012 were as follows:

January 1,

2012 Additions Disposals


December 31, 2012

Cost


Leasehold improvement 155 - 155 - -

1,474 7 155 - 1,326

January 1,

2012

Current year

charge Disposals


December 31, 2012

Accumulated depreciation


Leasehold improvement 155 - 155 - -

1,472 3 155 - 1,320

Net book value 2 4 - - 6

As of December 31, 2013 and December 31, 2012, ships were pledged to banks in return for the borrowings used for financing the ships (Note 17).


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14. Intangible assets None (December 31, 2012: None). 15. Financial liabilities 15.1 Bank borrowings As of December 31, 2013 and December 31, 2012 borrowings comprised bank loans. Details of bank loans are as follow;


Currency Original amount

TL equivalent

Interest rate range%

Original amount

TL equivalent

Interest rate range%

Fixed interest TL 15 15 - 11 11 - Fixed interest USD 1,563 3,336 %5.50 - - -

Short-term bank barrowings 3,351 11

Floating interest USD 2,502 5,342

Libor 3M + %2.80, Libor 6M + %4.75 - - -

Short-term portion of long-term bank

borrowings - 5,342 - - - -

Floating interest USD 21,995 46,941

Libor 3M + %2.80, Libor 6M + %4.75 - - -

Long-term bank barrowings 52,283 -

Total

55,634 - 11

The Company’s credit, liquidity and market risk exposures are disclosed in Note 31. Repayment schedule of the credits that are originally medium term and long term credits are as follows:


Fixed interest Floating interest Fixed interest Floating interest

Up to 1 year - 5,342 - - Up to 2 years - 4,989 - - Up to 3 years - 4,989 - - Up to 4 years - 4,989 - - More than 5 years - 31,974 - -

- 52,283 - -


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16. Provisions, contingent assets and liabilities

16.1 Operating leases 16.1.1 Leases as lessor Cano Maritime Limited and Dodo Maritime Limited rent their dry bull carrier ships called M/V Cano and M/V Dodo, starting from the date of acquisition 7 May, 2013, by time charter ship leasing agreements. Cano Maritime Limited and Dodo Maritime Limited give the ships’ technical managements to a company abroad within agreements. Ship lease income and technical management fees are classified under the “Marine Sector revenues and expenses” as “Marine sector income” and “Marine sector expenses” in Note 22. The first upcoming unpaid loan installment amount is assigned by the Bank from the ship lease incomes collected through Bank and interest is received from the blocked amount until maturity. 16.1.2 Leases as lessee The Group has undergone operating lease agreements as lessee. As of December 31, 2013 and December 31, 2012 contractual lease agreements liabilities are as follows;

December 31,

2013 December 31,

2012

Less than one year 167 135 Between one and five years 63 3

Total 230 138

For the period ended December 31, 2013, total rent expenses for operating leases amounted to TL 240 recognized in financials (31 December 2012: TL 219).


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17. Commitments

17.1 Guarantees given The Guarantees, Pledges and Mortgages (“GPMs”) that the Company gave as of December 31, 2013 and December 31, 2012 are as follows:

GPMs given by the company

December 31, 2013

December 31, 2012

A. Total Amount of GPMs that were Given on Behalf of Its Own

Legal Entity 54,048 125

1. Letters of guarantee that were given by the Group bank as cash collateral surety 44 125 2. Cash 1,721 - 3. Tangible asset mortgage given as cash collateral surety (*) 26,079 - 4. Participation share given as cash collateral surety (*) 26,204 -

B. Total Amount of GPMs that was Given in Favor of the Partnerships that were Included in the Scope of Full Consolidation 78,487 -

1. Bails given as cash collateral surety (*) 52,283 - 2. Tangible asset mortgage given as cash collateral surety (*) 26,204 - C. Total Amount of GPMs that Other Third Parties give With The Purpose

of Assuring Debts for Conducting Ordinary Commercial Activities - - D. Total Amount of the Other GPMs Given - -

i. Total Amount of GPMs that were Given In Favor of the ultimate shareholder - - ii. Total Amount of GPMs that were Given In Favor of Other Group Companies that are not Included in the Scope of Articles B and C - - iii. Total Amount of GPMs that were Given In Favor of the Third Parties that are not Included in the Scope of Article C - -

132,535 125

(*) M/V Cano and M/V Dodo owned by Cano Maritime Limited and Dodo Maritime Limited and Cano Maritime

Limited owned by GSD Denizcilik Gayrimenkul İnşaat Sanayi ve Ticaret A.Ş. are entirely pledged to banks respectively in return to bank loans borrowed for the acquisition of ships.


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17. Commitments (continued) As of December 31, 2013 and December 31, 2012, Guarantees/Pledges/Mortgages (GPM) consist of letters of guarantee, guarantees, ship mortgage, pledge of share and bails that are given to the following institutions:

December 31, 2013

December 31, 2012

Banks 132,491 - Courts 32 109 Other 12 16 132,535 125

As of December 31, 2013 and December 31, 2012, the Company has no guarantees, pledges or mortgages except the letters of guarantee – presented above – given on behalf of its own legal entity. As of the date of December 31, 2013, the rate of the other GPMs the Company has given to the Company’s shareholders’ equity is 0% (December 31, 2012: 0%).

17.2 Guarantees Taken

As of December 31, 2013 and December 31, 2012, the details of the guarantees that were obtained in return for the Company’s receivables from finance sector activities are as follows:

December 31, 2013

December 31, 2012

Customer promissory notes 211,805 233,936 Mortgages 13,113 15,968 Assignment 420 420 Customer checks 77 77 Letters of guarantee 25 25 225,440 250,426

17.3 Pledged Items The details of pledged items as of December 31, 2013 and December 31, 2012 are as follows:

December 31, 2013

December 31, 2012

Promissory notes in banks 62 106 Checks in banks 36 8 Promissory notes in the portfolio - 6 98 120


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17. Commitments (continued)

17.4 Other

As December 31, 2013, GSD Holding has gone bail that amount to TL 148,939 for credit institutions as a guarantee against open credit limits of the Company (December 31, 2012: TL 95,448). 18. Deferred income As of the dates of December 31, 2013 and December 31, 2012, the amount of deferred income TL 106 stems from monthly rents of ships that were collected in advance (December 31, 2012: TL 0).

19. Provision for employee benefits

19.1 Provision for short-term employee benefits As of December 31, 2013 and December 31, 2012 details of provision for short-term employee benefits are as follows:

December 31,

2013 December 31,

2012

Bonus premium 93 64

93 64

19.2 Provision for long-term employee benefits As of December 31, 2013 and December 31, 2012 details of provision for long-term employee benefits are as follows:

December 31,

2013 December 31,

2012

Provision for employee benefit 264 185 Employee termination benefit provision 132 82 Unused vacation provision 132 103

264 185

Employee termination benefit provision According to the Turkish Labor Law, the Company is obliged to pay severance for its personnel who worked for the Company over a year and who were dismissed or who completed 25 (20 years for women) service years for a company and are entitled to pension (58 years of age for women and 60 years of age for men) or who were conscripted or who died. After the amendment in the legislation on May 23, 2002, some transition period articles regarding the service period before retirement were excluded. The severance payment equals to the monthly wage for every service year and this amount is limited to TL 3,254,44 as of December 31, 2013 (December 31, 2012: TL 3,033.98). Even though the Employee Benefits (IAS 19) standard was published on the official gazette on March 12, 2013, no. 28585, states recognizing actuarial gain/(loss) under equity, Group recognized actuarial gain/(loss) under profit and loss and other comprehensive income since the amount is immaterial.


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19. Provision for employee benefits (continued) As of the December 31, 2013 and December 31, 2012 details of movements in the provision for employee severance payments are as follow:

December 31,

2013 December 31,

2012

Balance at the beginning of the year 82 55

Actuarial gain/loss 2 -

Interest Cost 6 -

Paid during the period - (2)

Provision for the current period 42 29

Balance at the end of the year 132 82

Unused vacation provision According to the governing labor law in Turkey, in case the labor contract ends for some reason, the Company is obliged to pay the earning that the employees are entitled but did not use to that person or beneficiaries as of that person’s earning on the contract ending date. According to IAS 19 unused vacation provisions identified as “Benefits to employees” are accrued in the earned periods and are not discounted. The provision for the unused leaves as of December 31, 2013 and December 31, 2012 is the total undiscounted liability amount that all the employees are entitled which corresponds to the days of their unused leaves. As of the December 31, 2013 and December 31, 2012 details of movements in the provision for vacation payment liabilities are as follow;

December 31,

2013 December 31,

2012

Balance at the beginning of the year 103 76

Paid during the period - (10)

Provision for the current period 29 37

Balance at the end of the year 132 103

20. Other current and non-current assets

As of the December 31, 2013 and December 31, 2012 details of other current assets are as follow;

December 31,

2013 December 31,

2012

Personnel advances 9 - Other 21 23

30 23


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20. Other current and non-current assets (continued) As of the December 31, 2013 and December 31, 2012 details of other non-current assets are as follow;

December 31,

2013 December 31,

2012

Advances given - 27,674

- 27,674

The Company signed an agreement on April 10, 2012 regarding the purchase of 2 dry cargo vessels with carrying capacity of 39,000 dwt, which are to be constructed at Hyundai Mipo Dockyard Co. Ltd. shipyard located in South Korea. As of May 31, 2013, the ships were transferred to the subsidiaries Dodo Maritime Ltd. and Cano Maritime Ltd. by GSD Maritime within the scope of change in parties and trilateral contract and were received by the subsidiaries. As a result of this transaction, the advance payment amounts paid were reflected to the subsidiaries and were added to the cost value of the ships. 21. Equity

21.1 Share capital As of December 31, 2013 and December 31, 2012, the Company’s nominal value of authorized share capital amounting to TL 30,000 comprising 3,000,000,000 registered shares of par value of 1 Kuruş (“Kr”) each. (One TL is equivalent to a hundred Kr). As of December 31, 2013 and December 31, 2012, the partnership structure of the Company is disclosed in Note 1.

21.2 Adjustment to Share Capital As of December 31, 2013 and December 31, 2012, the Company’s inflation-adjustment differences amount to TL 16,341. 21.3 Share Premium Premiums concerning shares consist of issuance premiums of shares. Issuance premiums of shares denote the cash inflows received as a result of shares sold with market prices. These premiums are recognized under shareholders’ equity and cannot be distributed, however can be used for future capital increases. 21.4 Other Comprehensive Income or Expenses Other comprehensive income or expenses consist of foreign currency conversion differences and financial asset revaluation fund. As of December 31, 2013 and December 31, 2012, the foreign currency conversion differences consist of the period end exchange rate regarding the assets and liabilities of foreign subsidiaries. The income statement items consist of the differences that arise from their conversion to TL using the average exchange rate. The financial asset revaluation fund is composed of the valuation differences due to fair value measurement of financial assets.


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21. Equity (continued)

21.5 Restricted reserves According to the Turkish Labor Law, legal retained earnings are composed of primary and secondary legal reserves. Until the primary legal reserves reach 20% of the Company’s capital, they are reserved at the rate of 5% of the profit for the period. The secondary legal reserves are reserved at the rate of 10% of all the dividend distributions that exceed 5% of the Company capital. Primary and secondary legal reserves cannot be distributed unless they exceed 50% of the total capital however they can be used for covering the losses in case the voluntary reserves are consumed. As of December 31, 2013, the total restricted reserves on retained earnings of the Company are TL 1,183 (December 31, 2012: TL 1,117).

21.6 Retained earnings As of December 31, 2013, the Company’s retained earnings are composed of TL 15,926 of excess reserves and TL 5,579 of net loss of the period. (As of the date of December 31, 2012, previous year retained earnings are composed of excess reserves).

21.7 Distribution on earnings According to the year 2012 General Assembly resolution dated May 30, 2013, the Company decided to appropriate first legal reserves amounting to TL 66 and extraordinary reserves amounting to TL 1,228 from the net profit amounting to TL 1,294. 22. Marine sector revenues and expenses The details of marine sector revenues and expenses as of December 31 are as follows:

December 31,

2013 December 31,

2012

Ship lease income 7,564 - Marine sector incomes 7,564 -

Ship depreciation expense (3,085) - Personnel expenses (2,598) - Various ship equipment, oil and fuel expenses (1,936) - Ship insurance expenses (341) - Technical management fees (280) - Other expenses (175) Marine sector expenses (8,415) -

Gross Profit/(Loss) from marine sector activities (851) -


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23. Interest and other incomes/interest, commission and other expenses The details of interest and other incomes, and interest, commission and other expenses as of December 31 are as follows:

December 31,

2013 December 31,

2013 Financial lease interest income 355 1,033 Financial lease receivables dividend income 101 68 Total interest and other incomes 456 1,101 Finance sector activity provision (expense)/income, net (268) (193) Total finance sector activity provision (expense)/income, net (268) (193) Other foreign exchange profit/(loss), net 656 (844) Other finance sector activities income/(expense), net 57 11 Gross profit/(loss) from finance sector activities 901 75 24. General administrative expenses The details of general administrative expenses as of December 31, 2013 and 2012 are as follows:

December 31,

2013 December 31,

2012 Personnel expenses 1,705 1,384 Purchases of services from related parties 438 440 Travel expenses 361 303 Rent and other expenses 240 219 Insurance expenses 89 129 Vehicle expenses 12 35 Tax, duty and charge expenses 19 18 Lawsuit expenses 15 29 Other 365 180 Total 3,244 2,737

The details personnel expenses that are included in general administrative expenses as of December 31, 2013 and 2012

are as follows:

December 31,

2013 December 31,

2012 Wages and salaries 1,430 1,134 Employee termination benefit provision expense 108 118 Social security premium expenses – employer’s share 91 69 Other 76 63 Total 1,705 1,384


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25. Other operating income

The details of other operating incomes that belong to December 31, 2013 and 2012 are as follows:

December 31, 2013

December 31, 2012

Ship advance payment exchange difference income 4,323 1,021 Currency Translation Differences 839 2,084 Chargeout income 72 - Interest received from banks 31 2,110 Profit/loss from derivative financial transactions 1 981 Securities interest income 1 6 Other 62 173 Total 5,329 6,375

26. Other operating expenses

The details of other operating expenses as of December 31, 2013 and 2012 are as follows:

December 31, 2013

December 31, 2012

Ship advance payment exchange difference expense 1,034 1,154 Foreign exchange losses 441 2,113 Losses from derivative transactions 42 23 Total 1,517 3,290

27. Incomes from investment activities The details of income from investment activities as of December 31, 2013 and 2012 are as follows:

December 31, 2013

December 31, 2012

Dividend income 99 245 Government bond income - 86 Total 99 331


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28. Financial income The details of finance income and expense as of December 31, 2013 and 2012 are as follows:

December 31, 2013

December 31, 2012

Foreign exchange gains from borrowings - 714 Total - 714

December 31, 2013

December 31, 2012

Foreign exchange losses from borrowings 4,732 9 Interest expenses 1,757 69 Other financial expenses 19 20 Total 6,508 98

29. Tax assets and liabilities Corporation Tax As of December 31, 2013, corporation tax rate is 20% (December 31, 2012: 20%). For the Company’s estimated tax liabilities related to current period activity results, necessary provisions are reflected in the accompanying financial statements. The corporation tax rate on taxable corporation income is calculated by the addition of disallowable expenses and deduction of tax exempt income. (previous years’ losses and investment incentives utilized, if any). In Turkey advance tax is calculated and accrued on quarterly basis. In the period that ended on December 31, 2013, the advance tax rate is 20% (December 31, 2012: 20%). According to the Turkish tax legislation, the tax losses can be deducted from tax basis as long as they do not exceed 5 years. However tax losses cannot offset against retained earnings. In Turkey, tax regulations do not provide a procedure for final agreement of tax assessments. The corporation tax declarations are submitted to the tax office until the evening of the 25

th day of the

fourth month following the end of the accounting period. Nevertheless, the authorities authorized to perform tax and audit can examine the accounting records for retrospective of five years and the tax amounts to be paid can change if any erroneous transaction is determined.


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29. Tax assets and liabilities (continued) Withholding Tax In addition to the corporation tax, withholding tax should be calculated on dividends distributed except for the ones distributed to resident corporations and Turkish branches of foreign companies. The income withholding tax was applied as 10% to all companies between the dates April 24, 2003 – July 22, 2006. This rate has been applied as 15% effective from July 22, 2006 based on the Decision of Council of Ministers no. 2006/10731. The dividends not distributed and added to capital are exempt from withholding tax. For the investment incentive amount benefited in relation to investment incentive certificates obtained before April 24, 2003, withholding tax at 19.8% should be calculated. 40% of the investment expenditures incurred after such date, without investment incentive certificate, and directly relevant with companies’ production activities can be deducted from the taxable income. No accrual is made for investment expenditures benefited without investment incentive certificates. Investment Incentives The Provisional article 69 was added to the Income Tax Law no. 193 with the Law no. 5479 that came into force as of the date of January 1, 2006, and that was published on the official gazette on April 8, 2006, no. 26133. This article sets forth that the taxpayers can deduct their investment incentive amounts that they will calculate only from their incomes belonging to the years 2006, 2007 and 2008 according to the legislation clauses that are in effect on December 31, 2005 (including the clauses concerning tax rate). Thus the investment discount practice was abolished as of the date of January 1, 2006. Within this frame, the taxpayers’ – who did not use all their investment incentive exception rights or some of them in the three years of time – rights were removed as of the date of December 31, 2008. On the other hand, articles 2 and 15 of the Law no. 5479 and article 19 of the Income Tax Law were abolished as of the date of January 1, 2006 therefore it was not allowed to benefit from investment incentive exception based on the investment expenditures made between the dates January 1, 2006 and April 8, 2006. However, in accordance with the decision of Turkish Constitutional Court made in the meeting dated October 15, 2009, the abolishment decision of January 1, 2006 about the aforementioned provisional article no. 69 about investment incentive, clauses of 2006, 2007 and 2008 of the Income Tax Law, and article no. 19 was cancelled due to being unconstitutional. The time limit regarding the investment incentive has been removed as well. In accordance with the decision of the Turkish Constitutional Court, the cancellation about the investment incentive is to enter into force with its publication on the Official Gazette. Therefore the Constitutional Court decision was published on the Official Gazette on January 8, 2010, no. 27456 and entered into force. According to this, the investment incentive amounts that are transferred to the year 2006 due to lack of income, and the investment incentive amounts that stem from the investments that started before 2006 and continued after this date within the scope of economic and technical wholeness can be used not only in 2006, 2007 and 2008 but in the following years as well. With the new regulation, it is provided to continue to benefit from the investment incentive exception that could not be deducted and transferred to the following periods without limiting the number of years. “The Income Tax Law and the Law about the Amendments of Some Laws and Decree Laws” was published on the Official Gazette on August 1, 2010, no. 27659. With the law, it is stated that the amount that will be deducted as investment incentive exception cannot exceed 25% of the current year income. With the amendment, the principle that the corporation tax rate of the institutions to be benefited from investment discount to be the current rate 20% instead of 30% is adopted.


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29. Tax assets and liabilities (continued) Constitutional Court decided – date February 9, 2012, decision no. 2012/9 (Docket No: 2010/93) – the sentence “”the discount amount as the investment incentive exception in determining tax bases cannot exceed 25% of the relevant income” to be unconstitutional and to be cancelled. The aforementioned sentence was added to the article 5 of the Law no. 6009 and provisional article no. 69, sub clause no. 1 of the Income Tax Law. After the decision of the Constitutional Court, the necessary regulations were made by the Revenue Administration. According to these regulations, taxpayers can benefit from the investment incentive without considering the 25% limit in the 2011 Annual Corporation Tax Declaration they will submit. As of December 31, 2013, the Group will be able to use the unused investment discount that amounts to TRY 118,753 (December 31, 2012: 125,947) by deducting from the future income. The Company has the aforementioned unused investment incentive that can be deducted from the future profits and net deferred tax asset over such incentive amounts to TRY 6,125 (December 31, 2012: 8,203). The recoverablity of the deferred tax assets is estimated under the current circumstances. During the assessment, the future profit projections and tax planning strategies to be implemented whenever necessary are considered. Transfer Pricing In Turkey, transfer pricing regulations are indicated in the article 13 – titled “hidden income distribution via transfer pricing” – of the Corporation Tax Law. The notification dated November 18

th, 2007

regarding hidden income distribution via transfer pricing regulates the details about the practice If the taxpayer purchases goods or services from/to its related parties at a value or price that is considered to be non arm’s length, then such income is regarded fully or partially distributed in a hidden way via transfer pricing. Hidden income distribution via this kind of transfer pricing is considered non-deductable expense for corporation tax base. Buying, selling, production and construction transactions, renting and subletting transactions, borrowing and lending money, transactions that require payments like premium, wage, etc. are considered buying or selling goods or services under all circumstances. Companies are obliged to fill out the transfer pricing form that is attached to the annual corporation tax declaration. In this form, all the amounts belonging to the transactions performed with the related companies in the accounting period and the transfer pricing methods relating to these transactions are indicated. The tax provisions for periods that ended December 31 consist of the following:

Current period income tax December 31,

2013 December 31,

2012

Current period corporation tax - - Correction related to previous year corporation tax - 525 Deferred tax income/(expense) 212 (601) Total tax income/(expense) 212 (76)


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29. Tax assets and liabilities (continued) As of December 31, 2013, the reconciliation of tax is as follows;

December 31,

2013 December 31,

2012

Amount Amount

Profit/loss before the reported tax (5,791) 1,370

Tax calculated based on the reported profit/loss 1,518 (274)

Amount of disallowable expenses (114) (35)

Amount of tax exempt income 20 49

Investment incentive (545) (184)

Subsidiary tax effect (*) (1,397) - Tax income/(expense) 212 (76)

(*) The Company’s subsidiaries Cano Maritime Limited and Dodo Maritime Limited are exempt

from tax according to the laws of the country they are registered. The Company calculates deffered tax assets and liabilities arising from the effecs of the evaluation differences between Capital Markets Board (CMB) and Tax Procedure Law (TPL). As of December 31, 2013 and December 31, 2012, the list of temporary differences and related deferred tax assets and liabilities by using current tax rates is as follows:

Deferred tax asset December 31, 2013 December 31, 2012

Unused investment incentives 5,708 7,815

Provision for doubtful receivables 344 337

Severance payment and other employee rights 71 50

Income/expense accruals from derivative transactions, net - 1

Finansal varlık değer artış fonu artış/azalış net 2 -

Deferred tax liability - -

Deferred tax asset, net 6,125 8,203

As of December 31, 2013 and December 31, 2012, deferred tax asset movements are as follows: December 31, 2013 December 31, 2012

Balance of January 1 8,203 8,804 Deferred tax income/(expense) that is recognized in profit or loss 212 (601) Deferred tax that is recognized in shareholders’ equity (2,290) - Balance at end of period 6,125 8,203


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30. Earnings per share

Earnings per share calculation as of December 31, 2013 and 2012 are as follows:

December 31, 2013

December 31, 2012

Net profit for the period (5,579) 1,294 Weighted average number of ordinary shares 30,000 30,000 Basic earnings/(loss) expressed in 1 TL per share (0.186) 0.043

31. The nature and level of the risks that stem from financial instruments 31.1 Financial risk management purposes and policies The Group Companies are exposed to various risks during their activities:

Credit Risk

Liquidity Risk

Market Risk This note is disclosed to give information about the targets, policies and processes in the risk management of the Group Companies in case the Group Companies are exposed to the aforementioned risks. The Board of Directors of the Group Companies is generally responsible for the establishment and supervision of the risk management frame of the Companies. The risk management policies of the Group Companies are formed to determine and analyze the risks that the companies can be exposed to. The purpose of the risk management policies is to form the appropriate risk limit controls, to supervise risks and to adhere to the limits. The Company creates a disciplined and constructive control environment and helps all the employees understand their roles and responsibilities via various training and management standards and processes.

3.1.1 Credit risk

The Group is exposed to credit risk because of its financial sector activities (financial lease transactions) and dry cargo transportation. Credit risk is the risk that one party in a mutual relationship suffers a financial loss as a result of the other party not fulfilling his/her commitment regarding a financial instrument. The Company tries to manage credit risk by limiting the transactions made with certain parties and evaluating continuously the trustworthiness of the related parties. Credit risk concentration is about certain companies operating in similar lines of business or being located in the same geographical region. This concentration is also about changes – that can occur under economic, political and similar other conditions – affecting the commitments of these companies that stem from contracts. Credit risk concentration reveals the Company’s sensitivity about its performance of being effective to a certain branch of industry or geographical region. The Company tries to manage its credit risk by not concentrating its borrowing activities to a certain sector or geographical region. The Company’s maximum credit risk equals to the recorded value of every financial asset exhibited in the balance sheet.


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31. The nature and level of the risks that stem from financial instruments (continued) 31.1.2 Liquidity risk Liquidity risk come in sight during the funding of the Group companies’ activities. This risk includes both the risk of not being able to fund the Group companies’ assets in appropriate maturities and dates and the risk of not being able to liquidate an asset with a reasonable price and in an appropriate timeframe. The Group fulfills its funding needs through banks. The Company continuously evaluates liquidity risk by determining the changes and watching the course of these changes in the fund resources that are necessary to reach the company targets. 31.1.3 Market Risk The Group protects itself with respect to changing market conditions by using tools of purchase and sale. The market risk is managed by purchase and sale of derivative financial instruments, within the limits determined by the Company executives, and by getting preventive positions.

(i) Foreign currency risk

The Group carries the foreign currency risk due to the transactions conducted in foreign currencies (such as leasing transactions, investment activities and bank credits. Since the financial statements of the Group are prepared based on Turkish "Lira, the mentioned financial statements are affected by the floating of the foreign currencies with respect to Turkish Lira.

(ii) Interest rate risk

The activities of the Group companies are exposed to the risk of changes in interest rates when its receivables and loans on interest are redeemed or reprised on different times or amounts. Furthermore, the Group, in case it has loans involving flexible interest rates such as Libor or Eurolibor rates, may also be exposed to the risk of interest rate due to the reprising thereof. The risk management activities aim to optimize the net interest income if the market interest rates in compliance with the basic strategies of the Company are considered. Sensitivity of the assets, liabilities and off-balance sheet items to interest is evaluated daily and monthly by the Company Management while also taking the developments in the market into account. Standard method, value exposed to the risk (RMD - Method of Historical Analogy) and methods of Active-Passive risk measurement are used while measuring the risk of interest rate endured by the Group. Measurements within the context of standard method are conducted on monthly bases via maturity ladder and those within the context of RMD measurements are conducted on daily bases. Active passive measurement model is also conducted on daily basis. During RMD calculations conducted on daily basis interest rate risks of securities of Turkish Lira and foreign currency in the portfolio of the Company which are allocated for sale-purchase and ready for sale and off-balance sheet positions are measured. Mentioned calculations are supported with scenario analyses and stress testings.


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31. The nature and level of the risks that stem from financial instruments (continued) 31.2 Disclosures related to financial risk management

31.2.1 Credit risk Sectoral distribution of the receivables originating from finance sector activities is as follows:

December 31,

2013 % December 31,

2012 %

Textile industry 1,427 82 3,862 46 Mining metal and chemical industry 156 9 815 10 Construction 105 6 2,904 34 Tourism 38 2 245 3 Food and beverage 7 1 346 4 Other 2 0 240 3 Total 1,735 100 8,412 100


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31. The nature and level of the risks that stem from financial instruments (continued) As of 31 December 2013 and 31 December 2012, the assets of the Company which are qualified as credits exposed to credit risk are as in the following chart

Receivables originating from

finance sector activities Trade and other

receivables

December 31, 2013 Related parties Third parties

Related parties

Third parties

Deposit in the Banks

Financial assets

available for sale

Maximum loan risks to be endured as of the end of the reporting period (A+B+C+D+E) - 1,735 20 1,516 3,783

-

A. Net book value of the financial assets which are undue and have not been impaired - 1,578 20 1,516 3,783

-

B. Net book value of the financial assets conditions of which have been re-negotiated and which will otherwise be considered as due or impaired - - - - - - C. Net book value of the assets which are due but have not been impaired - 157 - - - - - portion guaranteed by securities etc. - 157 - - - - D. Net book value of impaired assets - - - - - - - Due (gross registered value) - 2,654 - - - - - Impairment (-) - (2,654) - - - - - Portion of the net value guaranteed by securities etc. - - - - - - - Undue (gross registered value) - - - - - - - Impairment (-) - - - - - - - Portion of the net value guaranteed by securities etc. - - - - - - E. Elements comprising off-balance sheet loan risk - - - - - -


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31. The nature and level of the risks that stem from financial instruments (continued)

Receivables originating from

finance sector activities

Trade and other

receivables

December 31, 2012 Related parties Third parties

Related parties

Third parties

Deposit in the Banks

Financial assets

available for sale

Maximum loan risks to be endured as of the end of the reporting period (A+B+C+D+E) - 8,412 - 323 16,832

17

A. Net book value of the financial assets which are undue and have not been impaired - 7,971 - 323 16,832

17

B. Net book value of the financial assets conditions of which have been re-negotiated and which will otherwise be considered as due or impaired - - - - - - C. Net booked value of the assets which are due but have not been impaired - 441 - - - - - portion guaranteed by securities etc. - 441 - - - - D. Net book value of impaired assets - - - - - - - Due (gross registered value) - 3,005 - - - - - Impairment (-) - (3,005) - - - - - Portion of the net value guaranteed by securities etc. - - - - - - - Undue (gross registered value) - - - - - - - Impairment (-) - - - - - - - Portion of the net value guaranteed by securities etc. - - - - - - E. Elements comprising off-balance sheet loan risk - - - - - -


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31. The nature and level of the risks that stem from financial instruments (continued) 31.2.2 Liquidity risk The chart below provides the maturity analysis of the financial liabilities of the Group companies based on the remaining maturities as of balance sheet date. The amounts indicated in the chart represent undiscounted amounts based on contracts: December 31, 2013 Due Dates In Relation to the Contract

Booked value

Sum of cash outflow in

relation to the contract

Shorter than 3

months Between 3-12 months

Between 1-5 years

Longer than 5 years

Non-derivative Financial Liabilities 56,391 (67,011) (4,878) (6,391) (26,447) (29,295)

Bank loans 55,634 (66,254) (4,121) (6,391) (26,447) (29,295) Payables from finance sector activities 551 (551) (551) - - - Trade payables 108 (108) (108) - - - Other payables 98 (98) (98) - - -

Due Dates In Relation to the Contract Booked value

Sum of cash outflow in


Shorter than 3 months

Between 3-12

months Between 1-

5 years

Longer than 5 years

Derivative Financial Instruments - - - - - -

Derivative cash inflows - - - - - - Derivative cash outflows - - - - - -

December 31, 2012 Due Dates In Relation to the Contract

Booked value

Total cash outflow in


Up to 3 months

Between 3-12 months

Between 1-5 years

Longer than 5 years

Non-derivative Financial Liabilities 765 (765) (732) (33) - -

Bank loans 11 (11) (11) - - - Payables from finance sector activities 546 (546) (513) (33) - - Trade payables 56 (56) (56) - - - Other payables 152 (152) (152) - - -

Due Dates In Relation to the Contract Booked value

Total cash outflow in


Up to 3 months

Between 3-12 months

Between 1-5 years

Longer than 5 years

Derivative Financial Instruments (6) 5 5 - - -

Derivative cash inflows 17 26 26 - - - Derivative cash outflows (23) (21) (21) - - -


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31. The nature and level of the risks that stem from financial instruments (continued) 31.2.3 Market risk Interest rate risk The Company is exposed to the interest rate risk due to the effect of the changes in interest rates on assets yielding interest. The mentioned risk of interest rate is managed by making use of liquid assets as short term investment:

Interest rate position table

December 31, 2013

December 31, 2012

Financial instruments with fixed interest

Leasing receivables 1,735 8,412 Time deposit 1,958 16,669

Financial assets held for trading - - Bank loans 3,351 -

Financial instruments with floating interest

Bank loans 52,283 - Interest rate risk sensitivity analysis If the interest rates of the financial instruments with floating interest, on the renewal dates were 100 base points higher/lower and all other variables were to remain stable, the net profit for the year would be TL 45 higher/lower on December 31, 2013. (December 31, 2012: would not change).


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31. The nature and level of the risks that stem from financial instruments (continued)

Foreign currency risk

Foreign currency risk is the risk arising from the change in the value of a financial instrument depending on the changes in foreign exchange rate. The Company is exposed to the risk of currency due to the changes in exchange rates while converting its foreign currency assets to Turkish Liras. Risks of currency are managed by the using of foreign currency liquid assets as short term investment.

The chart below summarizes the foreign currency position risk of the Group in detail as of the dates of December 31, 2013 and December 31, 2012. Foreign currency assets owned by the Group and debt book values are as follows in foreign currency:

Foreign currency position chart


TL

Equivalent USD (in

Turkish Liras)

Euro (in Turkish

Liras)

Other (in Turkish

Liras) Total TL USD (in

Turkish Liras) Euro (in

Turkish Liras) Other (in

Turkish Liras)

1. Receivables originating From Finance Sector Activities (Note 7) 1,194 373 821 - 6,246 732 5,514 - 1b.Trade receivables (Note 6) 1,250 1,250 - - - - 2.Cash and cash equivalent (Note 3) 3,675 3,027 648 - 8,039 7,924 115 - 3a. Other (Monetary) - - - - 179 179 - - 3b. Other (Non monetary) 453 453 - - - - - - 4. Current assets (1+2+3) 6,572 5,103 1,469 - 14,464 8,835 5,629 - 5. Receivables originating From Finance Sector Activities 172 12 160 - 1,070 164 906 - 6a. Other (Monetary) - - - - 28,246 28,215 28 3 6b.Other (Non monetary) 107,936 107,936 - - - - - - 7. Non-current assets (5+6) 108,108 107,948 160 - 29,316 28,379 934 3 8. Total assets (4+7) 114,680 113,051 1,629 - 43,780 37,214 6,563 3 9. Financial liabilities 8,776 8,776 - - - - - - 10. Liabilities originated from finance sector activities 284 60 224 215 112 103 11. Other 106 106 12. Short-term liabilities(9+10+11) 9,166 8,942 224 - 215 112 103 - 13. Financial liabilities 46,941 46,941 - - - - - - 14. Long-term liabilities 46,941 46,941 - - - - - - 15. Total liabilities (12+14) 56,107 55,883 224 - 215 112 103 - 16. Net Asset/(Liability) Position of the Off-Balance Sheet Foreign Currency Derivative Instruments (16a – 16b) - - - - (4,233) - (4,233) - 16a. Sum of the Off-Balance Sheet Foreign Currency Derivative Products with Active Character - - - - - - - - 16b. Sum of the Off-Balance Sheet Foreign Currency Derivative Products with Passive Character - - - - (4,233) - (4,233) - 17. Net Foreign Currency Asset/(Liability) Position (8-15+16) 58,573 57,168 1,405 - 39,332 37,102 2,227 3 21. Monetary Items Net Foreign Currency Asset/(Liability) Position (=1a+1b+2+3a+5+6a-9-10-13) (49,710) (51,115) 1,405 - 43,565 37,102 6,460 3


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31. The nature and level of the risks that stem from financial instruments (continued) In case, Turkish Lira depreciates by 10% against foreign currencies, its impact on the equity and profit before tax is disclosed below. This analysis is prepared with the assumption that all other variables, especially the interest rates, remain stable:

Foreign Exchange Rate Sensitivity Analysis Table

December 31, 2013

Profit/(Loss) Equity

Foreign currency

appreciates

Foreign currency

depreciates

Foreign currency

appreciates

Foreign currency

depreciates

Change of USD by 10% against TL: 1. USD net asset/liability (715) 715 7,005 (7,005) 2. Secured portion from USD risk (-) - - - -

Change of EUR by 10% against TL: 3. Euro net asset/liability 112 (122) - - 4. Secured portion from EUR risk (-) - - - - Change of other currencies by 10% against TL: 5.Other currencies net asset/liability - - - - 6. Secured portion from other currencies risk(-) - - - -

Foreign Exchange Rate Sensitivity Analysis Table

December 31, 2012

Profit/(Loss) Equity

Foreign currency

appreciates

Foreign currency

depreciates

Foreign currency

appreciates

Foreign currency

depreciates

Change of USD by 10% against TL: 1. USD net asset/liability 3,710 (3,710) 3,710 (3,710) 2. Secured portion from USD risk (-) - - - -

Change of EUR by 10% against TL: 3. Euro Net Asset/Liability 223 (223) 223 (223) 4. Secured portion from EUR risk (-) (423) 423 (423) 423 Change of other currencies by 10% against TL: 5.Other currencies net asset/liability - - - - 6. Secured portion from other currencies risk(-) - - - -


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31. The nature and level of the risks that stem from financial instruments (continued) Other price risks: The Group is exposed to stock price risk arising from the stock investments. Stock investments are conducted for strategic purposes rather than commercial goals. The Group does not actively purchase-sale such investments. Equity price sensitivity Sensitivity analyses below are determined according to stock price risks the Company is exposed to on the reporting date. On the reporting date, in case all other variables are stable and data inputs in valuation method are increased/(decreased) by 15%: Stock investments will not be affected in net profit/loss as long as they are not classified as assets available for sale, sold or impaired. An increase/decrease equal to TL 80 (31 December 2012: TL 70) would occur in financial asset appreciation fund in equities. This situation is in fact originated from real increase in the value of the stocks available for sale. 32. Financial Instruments

Fair value of financial instruments The estimated fair values of financial instruments have been determined by the Group, 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. Following methods and assumptions were used to estimate the fair value of the financial instruments for which is practicable to estimate fair value: Financial Assets The carrying values of financial assets including cash and cash equivalents which are accounted with their costs are estimated to be their fair values since they are short term. The carrying values of receivables from finance sector activities as of December 31, 2013 are different from current interest rates along with the related calculated their fair values. Financial Liabilities

The fair values of short-term financial liabilities and other financial liabilities are estimated to be their fair values since they are short term.


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32. Financial instruments (continued) Carrying and fair values of the financial assets and liabilities which are not reflected at their fair values in the financial statements as of December 31, 2013 and December 31, 2012 are shown in the chart below:


Carrying value

Fair value

Carrying value

Fair value

Financial assets Cash and cash equivalents 3,785 3,785 16,834 16,834 Receivables from finance sector activities 1,735 1,555 8,412 8,016 Payables from finance sector activities 551 551 546 546 Trade payables 108 108 56 56 Other payables 98 98 152 152 Loans received 55,634 55,634 11 11

Classification of the fair value measurement

The chart below discloses the valuation methods of the financial instruments reflected at their fair values. The valuation methods according to different levels are defined as follows:

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: Inputs other than quoted prices included within Level 1 that are observable for the

asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3: Inputs for the asset or liabilities that are not based on observable market data (unobservable inputs).

The chart below discloses the financial investments carried at their fair values using the valuation method:

December 31, 2013 Level 1 Level 2 Level 3 Total

Financial investments Public sector securities, bonds - - - - Derivative financial assets held for trading - - - - Derivative financial liabilities held for trading - - - - Financial assets available for sale Stocks (*) 535 - - 535

Total 535 - - 535

December 31, 2012 Level 1 Level 2 Level 3 Total

Financial investments Public sector securities, bonds - - - - Derivative financial assets held for trading - 17 - 17 Derivative financial liabilities held for trading - (23) - (23) Financial assets available for sale Stocks (*) 465 - - 465

Total 465 (6) - 459

(*) As of December 31, 2013 the financial assets available for sale in the amount of TL 535 (December 31, 2012: TL 465) comprised stocks and public shares measured at their fair values.


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33. Subsequent events None (December 31, 2012; None).

Appendix I GSD Denizcilik Gayrimenkul İnşaat Sanayi ve Ticaret Anonim Şirketi Supplementary Information Convenience conversion to US Dollar December 31, 2013

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The US Dollar ("USD") amounts shown in the statement of financial position and statement of comprehensive income on the following pages have been included solely for the convenience of the reader. For the current period’s financial statements, USD amounts are translated from TL financial statements using the official TL exchange rate of 2.1343 TL/USD prevailing on 31 December 2013. For the prior year’s financial statements, USD amounts are translated from TL financial statements using the official TL exchange rate of 1.7826 TL/USD prevailing on 31 December 2012, Such translation should not be construed as a representation that the TL amounts have been converted into USD pursuant to the requirements of IFRSs or Generally Accepted Accounting Principles in the United States of America or in any other country.

Appendix I GSD Denizcilik Gayrimenkul İnşaat Sanayi ve Ticaret Anonim Şirketi Consolidated Statement of Financial Position For the year ended 31 December 2013 Amounts translated into thousands of USD for convenience purposes only

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Notes December 31,

2013 December 31,

2012

Assets

Current assets 3,847 14,415

Cash and cash equivalents 3 1,773 9,444 Financial investments 4 251 271 - Financial assets available for sale 4.1 251 261 - Derivative financial assets held for trading 4.2 - 10 Trade receivables 6 595 - Receivables from finance sector activities 7.1 706 3,993 Other receivables 8 125 181 Inventories (net) 9 121 - Prepaid expenses 10 122 96 Current income tax assets 11 8 200 Other current assets 20 14 13 Assets held for sale 12 132 217

Non-current assets 53,958 21,738

Financial investments 4 398 477 Receivables from finance sector activities 7.1 107 726 Property, plant and equipment 13 50,576 3 Intangible assets 14 - - Prepaid expenses 10 7 405 Deferred tax asset 29 2,870 4,602 Other non-current assets 20 - 15,525

Total assets 57,805 36,153

Appendix I GSD Denizcilik Gayrimenkul İnşaat Sanayi ve Ticaret Anonim Şirketi Consolidated Statement of Financial Position For the year ended 31 December 2013 Amounts translated into thousands of USD for convenience purposes only

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Notes December 31,

2013 December 31,

2012

Liabilities

Current liabilities 4,522 478

Financial liabilities 15 1,570 6 Short term portion of long term financial liabilities 15 2,503 - Other financial liabilities 4 - 13 - Derivative financial liabilities held for trading 4.3 - 13

Trade payables 6 51 31 Payables from finance sector activities 7.2 258 306 Other payables 8.2 46 86 Deferred income 18 50 -

Provisions 19 44 36

Non-current liabilities 22,118 104

Financial liabilities 15 21,994 - Provisions 19 124 104

Equity 31,165 35,571

Share capital 21.1 14,056 16,829 Adjustment to share capital 21.2 7,656 9,167 Share premium 21.3 - 1 Other comprehensive income or expenses t to be reclassified to profit or loss 21.4 4,051 (24) - Currency translation differences 4,036 - - Financial assets revaluation fund 15 (24)

Restricted reserves 21.5 554 627 Retained earnings 21.6 7,462 8,245 Net profit for the period 21.6 (2,614) 726

Total equity and liabilities 57,805 36,153

Appendix I GSD Denizcilik Gayrimenkul İnşaat Sanayi ve Ticaret Anonim Şirketi Consolidated Statement of Income For the periods ended December 31, 2013 and 2012 Amounts translated into thousands of USD for convenience purposes only

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Notes

January 1 - December 31,

2013

January 1 - December 31,

2012

Continuing operations

Marine sector income 22 3,544 - Marine sector expense (-) 22 (3,943) -

Gross profit of marine sector activities

(399) -

Interest income 23 214 619 Finance sector operating income

214 619

Cost of finance sector activities (-)

- - Provision of finance sector operating income/(expenses) net 23 (126) (107)

Foreign exchange gain/(loss), net 23 307 (472) Other finance sector operating income/(expense), net 23 27 -

Gross profit of finance sector activities 422 40

Gross profit/(loss) 23 40

General administrative expenses (-) 24 (1,519) (1,534) Other operating income 25 2,497 3,576 Other operating expenses (-) 26 (711) (1,845)

Operating profit/loss 290 237

Income from investment activities 27 46 186

Operating profit before financial expense 336 423

Financial income 28 - 401 Financial expense (-) 28 (3,049) (55)

Profit/loss before tax from continued operations (2,713) 769

Tax income/expense of continued operations

99 (43) - Taxation on income 29 - 295 - Deferred tax income / (expense) 29 99 (337)

Profit for the period (2,614) 726

Other comprehensive income/(expense) To be reclassified as profit or loss

4,071 79 - Fair value increase on financial assets 21 34 79 - Currency translation differences 21 4,037 -

Other comprehensive income / (loss) (net of tax) 4,071 79

Total comprehensive income 1,457 805

Non-controlling interest - -

Equity holders of the parent

1,457 805