ALK‹M ALKAL‹ K‹MYA ANON‹M fi‹RKET‹

Transkript

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ALK‹M ALKAL‹ K‹MYA ANON‹M fi‹RKET‹
Printed in March 2008
ANNUAL REPORT
2007
ALK‹M ALKAL‹ K‹MYA ANON‹M fi‹RKET‹
Mr. Vedat Kora, born in 1923, and within the 1946 - 1947 term he has graduated from the
Faculty of Science of Istanbul University as Chemical Engineer with M.Sc. degree. He began
his career as chemical engineer in the Turkish State Monopolies ( Tekel ) and then, he resigned
and started as an entrepreneur to the production of various chemicals in a small factory.
In 1963, he established a partnership with Essex Interore Chemicals ( Exxon ) of America, and
the new company core of Alkim Alkali Chemical Corporation was born. Alkim, which was
built upon these rationalistic and sound foundations, is now competing with the global giants
of chemistry.
Mr. Vedat Kora acquired patent rights for many processes and techniques developed by himself
for the production of various chemicals used as raw materials in the basic sectors such as
paper, glass, detergent and textile production.
H. VEDAT KORA
M.Sc Chemical Engineer
1923-1975
We lost our leader H. Vedat KORA, whom we will always remember with deepest respect
and love, on 30 th January 1975, by an airplane disaster at his most efficient and successful
age, while he was working as President and CEO in Alkim and leading the company to a bright
future with his high knowledge.
ALK‹M Board of Directors
Dear Shareholders,
Welcome to our Ordinary General Assembly Meeting where we shall discuss the activities we carried out in the fiscal
year of 2007.
As explained in detail in our Activity Report, we produced and sold 267.204 tons of refined sodium sulphate, 18.372
tons of light type sodium sulphate, and 87.782 tons of salt during the fiscal year starting on January 1, 2007 and ending
on December 31, 2007. A net profit of YTL 13.330.226.46 was derived from these operations.
While we sustained our ordinary operations in the fields of sodium sulphate and salt production in a successful manner,
magnesium compounds were produced in 2007 for the first time in the history of our company at our Cihanbeyli Plants
located by the side of the Lake Tersakan. Similarly, real and actual steps were taken for production of potassiumcontaining fertilizers at our Cihanbeyli Plants during the last months of 2007, and trial productions of leonite element
were carried out. These activities represent very important steps taken by Alkim for putting at disposal of domestic
economy a major part of the minerals that are available in lakewater. Another important aspect of these steps is that
all the research and development activities were carried out and completed by the staff of Alkim using its own technical
capabilities.
R&D activities have reached their final stage for our mining field of glauberite element located in Ankara - Çay›rhan with
a total reserve of 200 million tons. Feasibility studies were commenced for the Integrated Sodium Sulphate Plants that
shall be established in the said region, and that shall be the third largest facility of our company with an annual production
capacity of 150.000 tons. To be used for production of leonite-containing fertilizers that have rather important areas of
use at greenhouses, this plant is being integrated to our sodium sulphate plants located at the Lake Bolluk, Cihanbeyli.
This investment shall also be completed soon.
In summary, Alkim Alkali Kimya Anonim fiirketi has left another successful, productive, and profitable operating year
behind. We believe that investments to be made in Çay›rhan sodium sulphate plants based on the high morale and
sound equities of our company in 2008 would be completed as soon as practically possible with the approval and support
of our valuable shareholders, and that our company would improve its global position further in the field of sodium
sulphate production.
We wish to thank all of our shareholders, and extend our respect to the General Assembly.
Board of Directors
Alkim Alkali Kimya A.fi.
HEAD OFFICE
Address: ‹nönü Caddesi No:13
34437 Taksim - ‹STANBUL
Phone: + 90 212 292 22 66
Fax: + 90 212 252 76 60
Email: [email protected]
Website: www.alkim.com
1. INTRODUCTION
1.1.
THE PERIOD COVERED BY THE REPORT : 01.01.2007 - 31.12.2007
1.2.
TRADE TITLE OF THE COMPANY
1.3.
BOARD OF DIRECTORS
: ALK‹M ALKAL‹ K‹MYA ANON‹M fi‹RKET‹
a) Below are the names, surnames, and titles of the members of the board of directors as well as the
committee of auditors who were elected pursuant to Articles 9 & 13 of the Articles of Association of
the Company:
Name and Surname Position
Profession
Term in Office
M. Reha KORA
A. Haluk KORA
Ferit KORA
Hüseyin A. KORA
Mithat KORA
Özay KORA
Tülay ÖNEL
Hüseyin ÜNER
Nihat ERKAN
Yüksel KADIO⁄LU
M.Sc. Mechanical Engineer
M.Sc. Mechanical Engineer
Economist
Physics Engineer
Lawyer
Economist
Public Relations
Retired Financier
Political Sciences
Chartered Accountant
30.03.2006 - 30.03.2008
30.03.2006 - 30.03.2008
30.03.2006 - 30.03.2008
30.03.2006 - 30.03.2008
30.03.2006 - 30.03.2008
30.03.2006 - 30.03.2008
30.03.2006 - 30.03.2008
30.03.2006 - 30.03.2008
30.03.2006 - 30.03.2008
30.03.2007 - 30.03.2008
Chairman
Deputy Chairman
Deputy Chairman
Member
Member
Member
Member
Member
Member - General Manager
Auditor
b ) Limitations of Authority
Limitations of authority are specified in the Turkish Commercial Code as well as in the Articles of
Association of the company.
1.4.
AMENDMENTS TO THE ARTICLES OF ASSOCIATION
None.
1.5.
CORPORATE CAPITAL AND SHAREHOLDING STRUCTURE
a) The Company owns a capital of YTL 24.725.000.
b) Number of Shareholders of the Company
* Our company went public at the end of February 2000, and its shares are currently traded at the
Istanbul Stock Exchange. Following the public offering, number of the shareholders of our company,
which was initially 11, increased with participation of 66.357 individual investors, 362 employees of
Alkim companies, 74 domestic corporate investors, and 8 foreign corporate investors.
c) Daily stock prices of our share certificates can be found at the bulletins issued by the Istanbul Stock
Exchange under the code 'Alkim'.
d) Dividends distributed during the last three years
* In 2004, a total amount of YTL 10.206.087 was distributed as follows. YTL 2.285.506 was distributed
from the net distributable profit of the period as the first dividends; YTL 4.889.469 YTL was distributed
as the second dividends; and YTL 3.031.112 was also distributed from the extraordinary reserves.
f) Our shareholders who hold a share in excess of 10% of our corporate capital:
Cihat KORA
M.Reha KORA
Hüseyin A. KORA
1
YTL 3.677.843,75
YTL 2.905.187,50
YTL 4.945.000,00
14,88%
11,75%
20,00 %
1.6.
DETAILS OF THE SECURITIES ISSUED
Our company has issued no security or bond so far.
1.7.
SECTOR OF THE COMPANY, AND POSITION OF THE COMPANY IN THE SECTOR
The main field of operation of our company is to produce sodium sulphate and sodium chloride (i.e. salt) at the
lakes and underground mining fields for which we hold longtime operation licenses as per the Mining Law.
Following completion of research activities in 2007, magnesium was registered as the third mineral to the
operating license we hold for our Cihanbeyli Tersakan Plants for production of magnesium-containing compounds
from lakewater.
PRODUCTION OF SODIUM SULPHATE
Our sodium sulphate plants are located in Konya-Cihanbeyli, Afyon-Dazk›r›, and Ankara-Çay›rhan regions.
With the enormous mineral reserves as well as longtime operating licenses, these mines cover considerably large areas.
This kind of lake operations conducted to produce chemical substances, like those of Alkim, are available in a
small number of countries in all over the world.
Alkim is the 6th largest producer of sodium sulphate in the world, and is a member of the European Chemical
Industry Council ( CEFIC ) as well as the Sodium Sulphate Producers Association ( SSPA ).
Sodium Sulphate ( Na2SO4 ) is one of the basic raw materials used in detergent, glass, paper, textile, and chemical
industries. This substance is used for production of all kinds of detergents (except for liquid detergents) at the
rate of 16 to 40%, and constitutes 3% of glass paste used in glass production industry. Sodium sulphate is also
used by paper production industries for production of cellulose, for painting of textile products, and for production
of various chemical substances.
At our Tersakan-Bolluk plants located in Konya - Cihanbeyli region and our Ac›göl plants located in Afyon-Dazk›r›
region, production activities involve gathering of lakewater containing chemical substances (i.e. a solution) at
large production pools (i.e. salting method); concentration thereof at the said pools, and picking through special
methods and shipment thereof to our sodium sulphate plants for processing purposes.
Although gallery-type mining operations were carried out at our underground sodium sulphate fields located
in Çay›rhan region, our R&D activities were also sustained for realization of “underground solution mining
operations” in the year 2007, which were initiated in cooperation with the Polish Chemkop Company in 2005.
Production pools of our company (i.e salinas) cover an aggregate area of 18 square kilometers. At the mining
plants, we have a large number of (i.e. about 120) fully owned heavy construction equipments of all kinds,
excavation machineries, loaders, dozers, heavy tractors, excavators of normal and boggy type, trucks, light duty
trucks, vans, and other similar vehicles and machineries of general and special service type. We have the complete
and full property of extremely valuable mining equipments, vehicles, devices, plants, warehouses, silos, various
service workshops, administrative buildings, personnel houses, and etc. which are available at our mining
enterprises.
•
•
•
•
Alkim has a total annual production capacity of 330.000 tons for finished refined sodium sulphate products,
of 900.000 tons for crystal sodium sulphate, and of 25.000 tons for light type sodium sulphate.
Our plants received ISO - 9002 quality assurance certificates in 1996, and thereafter adopted TS - EN - ISO
9001 : 2000 Quality System Management standards, which stand for the ultimate point achieved in terms
of quality systems.
Among permanent customers of Alkim are the Turkish Bottle and Glass Factories as well as all the domestic
manufacturers of detergent products. At foreign markets, detergent factories located in all the neighbor
countries such as Romania, Bulgaria, Greece, Syria, Lebanon, Egypt, Saudi Arabia, Libya, Tunisia, and Israel
are our direct and permanent customers.
Alkim searches for and implements the most advanced, most productive, and most effective methods at all
times for the purpose of offering the best quality to its customers. Ac›göl Sodium Sulphate Plants located
by the side of the Alkali Lake Ac›göl as well as Bolluk Sodium Sulphate Plants located by the side of the Lake
Bolluk are the plants which are the largest end the most modern sodium sulphate plants with an annual
production capacity of up to 330.000 tons, and which are operated using the Recompressed Vaporization
Technologies and DCS Automation System. Thanks to the cogeneration units, these plants have reduced
their energy costs to a minimum level by meeting their own electricity and steam requirements since 1999.
Being a mining and chemical company, Alkim has been exporting its products since 1960s. Export activities
currently constitute about 20% of the total turnover of the company.
The entire volume of production of our sodium sulphate plants which run at their full capacities is sold to
both domestic and foreign markets. Alkim conducts its sales at both domestic and foreign markets through
its own initiatives, and does not employ any separate sales and marketing company for this purpose.
2
PRODUCTION OF SALT
As known, our company has made legal applications, and obtained licenses for production of salt at our mining fields
upon adoption of the Law No. 4683 which nullified the former Salt Law.
Investments in salt production operations started in 2002 following receipt of the licenses for salt production plants,
and construction works of salt production pools were completed at our Konya - Cihanbeyli Plants in 2004, and at
our Afyon - Ac›göl Plants during the period of 2005 and 2006.
Upon completion of salt production pools, activities were commenced for production of healthy and quality salt in
a natural lake environment free from impacts of environmental pollution at our Ac›göl plants located in Afyon Dazk›r› region and at our Tersakan-Bolluk located in Konya - Cihanbeyli region.
Our plants at Konya Cihanbeyli region have an annual production capacity of approximately 40.000 tons on an overall
salt production area of 750.000 square meters.
Our Ac›göl plants at Afyon - Dazk›r› region own preliminary vaporization pools with a total area of 1.3 million square
meters used for production of raw salt; and our production fields have reached a total area of 2.8 million square
meters. Consequently our annual production capacity has increased to approximately 150.000 tons. The investment
in a refined salt production facility with an annual production capacity of 50.000 tons, which was initiated at our
Ac›göl plants, was completed in 2007, and we carried out the first trial production of refined salt in October.
Magnesium compounds and leonite-containing fertilizers
Our Cihanbeyli plants successfully completed the trial production activities for magnesium - potassium sulphate- and
leonite-containing fertilizers which were carried out at the Lake Tersakan for a while. At the same plants, magnesium
chloride solutions were also produced in considerable tonnages using purely natural methods. Being used as an ice
dissolvent at highways and municipalities, this chemical substance shall provide our company with new sales tonnages
and extra turnovers starting from 2008.
Raw Salt Heaps of Alkim
PAPER INDUSTRY - ALK‹M KAGIT SANAY‹ ve T‹CARET ANON‹M fi‹RKET‹
Our paper production plants seated on an area of 50.000 square meters in Kemalpafla Organized Industrial Zone, ‹zmir,
which are the most modern ones of Turkey, are capable of competing with many plants in Europe thanks to the
excellence of its technological infrastructure. Converted into a separate judicial entity under the title “Alkim Ka¤›t
Sanayi ve Ticaret A.fi.” on 30.06.1999, our paper production company is a subsidiary of Alkim Alkali Kimya A.fi. with
a share of 79.9% owned therein. Within scope of the capital increase effected on November 2, 2000, the increased
portion of 20% was offered to the public, and said portion of shares is currently traded at Istanbul Stock Exchange
under the code 'Alka'. The total capital of Alkim Paper Company was increased to YTL 52.500.000 as a result of the
capital increase effected on 19.10.2004, and Alkim Alkali Kimya A.fi has a share of YTL 41,962,500 in the said capital.
INSURANCE SERVICES
All the factory buildings, production and storage areas, management buildings, facilities, fixed and mobile construction
machines, fixtures, finished and semi-finished product stocks, transportation vehicles and other vehicles as well as
domestic and foreign transportation activities and other relevant activities and operations of Alkim Alkali Kimya A.fi
and Alkim Ka¤›t Sanayi ve Ticaret A.fi represent a huge insurance portfolio. Therefore, our board of directors adopted
a resolution on September 24, 2002 for incorporation of an insurance company which would act as a corporate
insurance agency for our own insurance deals. On November 4, 2002, "Alkim Sigorta Arac›l›k Hizmetleri Ltd
fiirketi" was established in Istanbul with an initial capital of YTL 20 Million which was contributed by Alkim Alkali
Kimya A.fi and Alkim Ka¤›t San. ve Tic. A.fi on equal basis.
3
Koralkim Power Plant
4
2. OPERATIONS
A. INVESTMENTS
1.
DEVELOPMENTS ON THE SIDE OF INVESTMENTS
The main field of operation of Alkim Alkali Kimya A.fi is to produce sodium sulphate. Alkim occupies the second
rank in Europe, and the sixth rank in the world among producers of sodium sulphate. Alkim is a member of
the European Chemical Industry Council (CEFIC) as well as the Sodium Sulphate Producers Association (SSPA).
Alkim produces raw materials using the salification method at the lakes for which the company has a mining
license. Our sodium sulphate production pools cover an area of approximately 18 square kilometers, and
our preliminary vaporization pools cover an area of approximately 7 square kilometers. Furthermore, raw
salt is produced at our salt production pools of approximately 2.8 square kilometers. The company has made
huge investments so far, and shall continue to make investments for the purpose of processing lakewater
chemicals available in these pools in a productive and rational manner.
Alkim produces refined sodium sulphate with the purity of 99% at the plants established in an integrated
fashion with the state-of-art technologies for processing of raw materials. Investments are now ongoing
which are required to operate these plants in a productive and rational manner.
DAZKIRI - ACIGÖL PLANTS
a) Open Field Plants
•
•
•
•
•
Repair and maintenance works were carried out for the sets and roads of preliminary vaporization and
production pools available at our Ac›göl plants.
500 meters of energy transmission lines were laid down in addition to the existing ones at salt (sodium
chloride) pools.
Two pools were constructed at the Crystal Cleaning Rotation and Ore Enrichment Unit, each having an
area of 1.000 square meters and capable of storing 1.500 cubic meters of solution; and lateral surfaces
thereof were covered with wooden materials.
A salt washing unit was established with a capacity of 15 tons per hour at the stock field for raw salt.
Two pools were established at the unit, each having a volume of 1.000 cubic meters for storage of the
solution that is used for washing of raw salt.
A modern automation system was installed at the locations where all kinds of vehicles such as construction
machines, trucks, light duty trucks, motopumps, and etc. are available at the open field plants. This
system enables computerized control and tracing, at diesel fuel consumption points, of a 15-ton tanker
which is operated as a mobile fuel oil station.
Ac›göl - Production Pools
5
b) Koralkim Plants
•
Refined Salt Production Unit
A refined salt production unit was established within scope of the K-2 Process. For this unit which is
capable of producing refined salt at the rate of 5 tons per hour, or mechanical refined salt at the rate
of 8 tons per hour; raw salt feeding, melting, post-vaporization thickening, centrifuging, fluid bed drying,
and packaging systems were added to the K-2 Process. Production lines were integrated to the existing
PLC Automation and Control System.
•
Bulk Sodium Sulphate Conveyance System
For shipment of sodium sulphate in bulk, a portal crane was installed by the side of railway junction line,
which shall be used for transfer of containers on railway cars (each having a capacity of 25 tons of refined
sodium sulphate) between railway cars and trucks. For the sake of worker's safety, a spreader apparatus
was also installed to link containers to the crane which has a lifting capacity of 40 tons.
6
C‹HANBEYL‹ - BOLLUK and TERSAKAN PLANTS
Sodium Sulphate Factory in Bolluk
Rehabilitation works were carried out, and certain units were installed at our Bolluk Sodium Sulphate Factory in 2005
and 2006 because production costs were high due to employment of old-fashioned production methods, and quality
of products was inferior then that of refined sodium sulphate. Production method employed at the Factory was changed
to the evaporation method which enables production of refined sodium sulphate with the purity of 99.8%.
The Cogeneration System, which was available at our Dazk›r› - Koralkim Sodium Sulphate Plants, was also established
at our Bolluk Plants for the purpose of producing, at the lowest possible cost, the steam and electricity which is
required for the 4-Stage Evaporation and Vacuum Vaporization Process. In this regard, an autoproducer license was
obtained, and an energy and steam plant was established. This plant includes a dust coal-operated steam boiler
with a fluid bed as well as its premises, a demineralised water unit, a steam turbine, and electricity switching systems.
350 kWh of electricity is currently produced using the steam produced at the boiler equipped with a fluid bed,
which was installed with a capacity of 15 tons of hot steam per hour (at 380 °C and 30 bars), at the KKK Turbine
(485 kVA) that was transferred from our Dazk›r› - Koralkim Plants, and commissioned by our own staff. Activities
are currently ongoing for commissioning of the EET Steam Turbine which was imported from Germany.
Since coal is burned at the steam station, an electrostatic filter was added to the system in order to meet the
environmental requirements.
PLC Automation Control Systems were employed within the Process and at the Energy & Steam Plant. Each stage
of the production process is supervised through computerized systems.
Thanks to the Process which was designed and installed with a physical production capacity of 90.000 tons of
refined sodium sulphate per year, production of refined sodium sulphate has been continuing at a daily capacity
of 240 tons since 2007.
Fertilizers Production Plant, and Magnesium Chloride Filling and Transfer Tanks
Our activities regarding production of potassium-containing fertilizers, which are totally imported to our country at
present, have been continuing for a long period of time. The fact that potassium-containing fertilizers would be
produced using the raw material derived from domestic resources increases the strategic importance of our activities
further.
As a result of the R&D activities conducted at the Lake Tersakan, we have secured a resource for the raw material to
be used at our potassium- and magnesium-containing fertilizers production plant which is now under construction.
We have obtained all the necessary production permits for this fertilizers production plant which is under construction
in a fashion integrated to our Refined Sodium Sulphate Plants in Bolluk. Magnesium chloride, magnesium sulphate,
potassium sulphate, and leonite (potassium - magnesium sulphate) shall be produced in the form of chemical fertilizers
at this plant. Investment activities are under way so that the plant shall be commissioned in the second half of 2008.
Sodium Sulphate Plants in Bolluk
7
LAKE TERSAKAN
LAKE BOLLUK
8
The underground glauberite mining field located in Çay›rhan has a reserve of approximately 200 million tons, and
covers an area of 90 square kilometers.
Images from the R&D activities conducted in Çay›rhan
ANKARA - ÇAYIRHAN PLANTS
The Solution Mining Method
Ankara - Çay›rhan'da Tenardit - Glauberit'in iç içe oluflturdu¤u Avrupa'n›n en büyük yer alt› Sodyum Sülfat maden
At our mining field located in Çay›rhan, Ankara which has the largest underground tenardite- and glauberite-containing
sodium sulphate reserve of Europe, operations were carried out until recently using the underground mining methods,
and it was failed to make a remarkable progress in achieving an economic level in mining operations using this method.
Only approximately 67 million tons of pure sodium sulphate can be derived from 200 million tons of glauberite mineral.
Various activities regarding the solution mining method, i.e. one of the recent technological advancements, and results
obtained therefrom have made it mandatory to handle the existing mining field on a pilot scale for the purpose of
putting the available reserves at disposal of domestic economy. As known, a sodium sulphate solution is obtained at
varying concentrations depending upon certain factors such as time, heat, and surface when natural sodium sulphate
minerals are exposed to water, and this solution is used for production activities using the solution mining method.
As a result of laying down of nested pipes in the wells to be drilled at the mining field in Çay›rhan, especially at the
areas which contain extremely dense glauberite, and application of pressurized water and & air, a degree of dissolubility
would be achieved in the wells, and the solution so obtained would be taken from well tops, and used for production
of minerals. This would ensure processing of underground minerals available in a solid form which would, in turn,
make considerable contributions to the domestic economy, and mining operations would be carried out totally under
the ground without any harm to environment or nature.
There is no country in the world where underground sodium sulphate mineral is converted into a solution as such,
and then put at disposal of economy. In other words, Alkim shall be the pioneering company of the world in this
regard upon implementation of the said important project.
If this investment is realized, Alkim shall give a new dimension to the domestic approaches to mining operations.
Activities are conducted in cooperation with TUB‹TAK due to the necessities regarding strategic confidentiality and
due to the fact that TUB‹TAK is the most influential scientific organization of our country, and all the findings and data
are shared with TUB‹TAK.
R&D activities have reached their final stage for our glauberite mining field in Ankara - Çay›rhan which has a total
reserve of 200 million tons. Feasibility studies were started for the Integrated Sodium Sulphate Plants that shall be
established at the said region with an annual production capacity of 150.000 tons.
TOTAL VALUE OF THE AFOREMENTIONED INVESTMENTS
Total value of all the investments made in the year 2007 is YTL 8.029.556,54.
9
B. DETAILS OF COMMODITY AND SERVICE PRODUCTION ACTIVITIES
1. FEATURES OF PRODUCTION UNITS
a) Description of Production Units
Dazk›r› Koralkim Plants
Our Dazk›r› - Koralkim Plants have two units called K1 (Crystallization Unit No.1) and K2 (Crystallization Unit No.2).
The only raw material used at these plants is the glauber salt obtained from the Lake Ac›göl which is located 2.1
kilometers far from the plants. Glauber salt is allowed to precipitate in our pools located in the lake under cold weather
conditions of winter seasons, and is then processed through a gradual evaporation process at our plants to produce
refined anhydrous sodium sulphate with the purity of 99.5%. These plants are equipped with an energy production
plant to meet their own steam and electricity requirements as well as with all kinds of technical, administrative, and
social infrastructure facilities, various auxiliary units, and all the support systems which are required for a chemical plant
of the same size. All the plants of Alkim Kimya are operated through computerized control systems. Pressurized steam
produced at the energy production station of our plant passes through the turbine to produce both the steam required
for the process and the electricity required for the entire plant. The maximum capacity of our steam turbine (i.e. our
electricity generating power) is 3.5 MWh.
As a result of considerable investments made for the purpose of producing granule sodium sulphate, i.e. a mineral
demanded by some international detergent manufacturers, we have become able to produce such product with a
particle size of 250 to 750 microns using the special technology at K2 unit, and this capability provides us with
considerable benefits.
Our products are offered for sale in 1-1.5 ton bigbags, in 50 kg sacks, or in bulk depending upon demands of our
customers. Productivity of the evaporation units owned by has been improved further thanks to employment of certain
methods and techniques. The overall productivity has been increased to the maximum level by means of a
thermocompression system located in front of the first unit, and an additional low vacuum balancing systems located
at the last unit.
Koralkim Sodium Sulphate Plants have a daily production capacity of 700 tons on average.
During the period of 01.01.2007 to 31.12.2007:
Net working days at K1 unit (except for shutdowns)
Net working days at K2 unit (except for shutdowns)
307 days
288 days
Total production volume of these units is 190.222 tons.
Following quantities are consumed for the said production volume:
Quantity of crystal consumed
593.831 tons
Quantity of coal consumed (former boiler)
1.143 tons
Quantity of dust coal consumed (new boiler)
43.555 tons
Overall quantity of electricity consumed by all the plants is
Quantity consumed at the turbine
Quantity purchased from TEDAfi
21.436.548
18.291.758
3.144.790
kwh
kwh
kwh
Cihanbeyli Plants, and Bolluk Sodium Sulphate Factory
Established using the technologies and know-how of Alkim, Cihanbeyli plants produce refined sodium sulphate
products from raw sodium sulphate which is obtained from mining operations carried out at the Lakes Tersakan
and Bolluk. These plants also produce light type sodium sulphate, i.e. a raw material used at a part of the
detergent industry.
Provisions of the “Regulation on Implementation of the Law No. 4683 regarding Amendments to the Mining
Law and Nullification of the Salt Law” have allowed us to produce salt (NaCl) at our mining fields. Our company
has begun producing salt after obtaining an operating license as well as a producing license for salt.
At Bolluk Sodium Sulphate Factory
During the period of 01.01.2007 to 31.12.2007
Net working days
Production volume of refined type sodium sulphate
Quantity of crystal consumed
Quantity of dust coal consumed
Total quantity of electricity consumed
313
70.307.477
195.962.42
21.683.970
7.166,349
days
kgs
kgs
kgs
kwh
10
b) Production Activities
C‹HANBEYL‹ PLANTS
Sodium Sulphate Production Activities
Tersakan - Bolluk Plants
Ordinary lake operating activities are carried out at twelve production pools which cover a total area of 6.167.000 square
meters.
Product:
Sodium Sulphate (Na2SO4)
Light type Sodium Sulphate
Tuvenan Sodium Sulphate
Crystal Sodium Sulphate
Refined Sodium Sulphate
Mixture Sodium Sulphate
19.261
19.993
183.040
70.307
2.300
Tons
Tons
Tons
Tons
Tons
Salt Production Activities
In 2007, 31.701 tons of raw salt were produced at Tersakan Plants.
ACIGÖL PLANTS
Our Ac›göl plants represents the most important investment of our company in terms of sodium sulphate production,
capacity, quality, and sales and export activities.
Ac›göl Plants
At our Ac›göl plants, there are sodium sulphate production pools of total 5.880.000 square meters, and preliminary
vaporization pools of total 7.600.000 square meters. Our salt production pools cover an overall area of 2.800.000 square
meters, and preliminary vaporization fields used for production of salt cover an overall area of approximately 1.325.000
square meters.
In 2007, our Ac›göl plants produced 555.352 tons of Crystal Sodium Sulphate (Na2SO4.10H2O)
In 2007, 75.843 tons of raw salt were produced at the salt pools of Ac›göl plants.
A part of raw salt produced passes through washing units located near the salt stock field to produce washed raw salt.
In 2007, 5.969 tons of washed raw salt were produced.
KORALK‹M PLANTS
Following quantities are produced at Koralkim Plants which are equipped with the most advanced technologies of the
world, and which produce products of the best quality:
Granule
Total - Sodium Sulphate
Refined Salt
Dried Salt
Total Salt Production
22.654
167.568
190.222
tons
tons
tons
1.196
985
2.181
tons
tons
tons
In 2007, the total volume of refined sodium sulphate products sold from our Koralkim sodium sulphate plants was
197.057 tons; and out of this volume total 30.357 tons were exported.
c) Overall Capacity Rates
Sodium Sulphate
Total sodium sulphate production capacity of the company is 330.000 tons; i.e. 230.00 tons of refined ( including
granular) sodium sulphate at Dazk›r› Koralkim Plants, and 80.000 tons of refined sodium sulphate and 20.000 tons of
light type sodium sulphate at Cihanbeyli Plants.
(Tons)
Capacity
Production
Capacity Usage
11
2005
275.000
244.388
%89
2006
275.000
249.484
%91
2007
330.000
282.090
%86
ALK‹M KA⁄IT SANAY‹ VE T‹CARET A.fi.
Alkim Ka¤›t Sanayi ve Ticaret A.fi was first established within the body of Alkim Alkali Kimya A.fi, but converted into
an independent entity on 30.06.1999. 20% of the shares in our paper production company was offered to the public
on 02.11.2000, and its shares are currently traded at Istanbul Stock Exchange with the code “ALKA”.
Our high-grade paper pulp and enamel paper production plants, established with an installed production capacity
of 55.000 tons per year, have reached a technological superiority and productivity, which enables the company to
compete with the largest paper production plants of Europe thanks to the technology investments that were made
for the last ten years starting from the first day of its incorporation.
As of the end of 2007, our paper production plant has reached an annual production capacity of 90.000 tons as a
result of the cogeneration investment; increase of the capacity of the gas turbine to 5.5 MW; increase in the production
capacity achieved by means of an increase in the speed of paper machinery to 700 meters per minute; and many
other investments which were started in 2000.
Alkim Kâ¤›t Sanayi ve Ticaret A.fi is one of the most reputed producers of Turkish paper industry thanks to its advanced
technological infrastructure and efficient planning strategies as well as a versatile range of products. We would like
to state proudly and gladly that Alkim Ka¤›t has broken the production and sales records in 2007 where the paper
production sector suffered from many challenges as a result of fluctuations in prices quoted for both cellulose, i.e.
the basic raw material, and for finished paper products.
Productivity of our production activities was improved further this year thanks to the dedicated and considerable
efforts of our directors and all members of our staff. Quality of our paper products has undisputedly occupied the
first ranks not only in our country but also in Europe.
Our turnover and tonnage figures accurately and visibly reflect said positive and successful results. An overall turnover
of YTL 90.772.366 was derived from a total sales volume of 68.090 tons of paper products. In 2007, Alkim Ka¤›t
earned a profit of YTL 6.368.000.
12
ALKIM Insurance Agency Inc.
(01.01.2007 – 31.12.2007)
Activity Report
Alkim Sigorta Arac›l›k Hiz. Ltd. fiti. was established on 04.11.2002 with an initial capital of YTL 20 Million contributed
by Alkim Alkali Kimya A.fi and Alkim Ka¤›t San. ve Tic. A.fi on equal basis. The General Assembly appointed Mr. Nihat
Erkan as the company's manager in charge of corporate deals and trasactions. In 2002, this company received authorizations
from Anadolu Sigorta and Koç Allianz Sigorta A.fi to act as an insurance agency. The company currently acts as an
authorized insurance agency of Koç Allianz and Anadolu Sigorta. The company is seated at the Head Office of Alkim.
The company has begun producing insurance policies in regard of building, machinery breakdown, fire, content,
commodity, transportation, vehicle, traffic, and own insurances as well as group individual accident and health insurances
for Alkim Alkali Kimya A.fi, Alkim Ka¤›t San.ve Tic. A.fi, and Sodafl Sodyum San.A.fi. as well as its other customers subject
to issuance of said policies by the head offices and district directorates of insurance companies.
With a portfolio size of YTL 125 Million, Alkim Sigorta Arac›l›k Hiz. Ltd. fiti maintains its position as a large corporate
agency in the insurance sector.
Distribution of portfolio as of the end of 2007
ALK‹M K‹MYA A.fi
YTL
ALK‹M KA⁄IT A.fi
YTL
OTHER ENTITIES AND INDIVIDUALS YTL
TOTAL
YTL
13
39,5
65,3
20,2
125
Million
Million
Million
Million
2 . ACTIVITIES REGARDING PRODUCTION OF COMMODITIES AND SERVICES
a) Developments in Production of Sodium Sulphate
The rise of living standards in the world, especially in the Middle East, leads to use of washing machines to a greater extent, and
consequently to the consumption of considerably higher quantities of detergents. Said rise in consumption of detergents also leads
to an increase in use of sodium sulphate automatically. Percentage of sodium sulphate used has increased from 15-20% to about 4550%. Alkim has reached huge capacities in production of sodium sulphate by means of respective investments for the purpose of
meeting the said rise in demand, maintaining its global position, and making access to new markets.
b) A comparative table regarding production activities
Production quantities of sodium sulphate and salt are shown in the following table with a comparison to those of the preceding year.
Quantity (in tons)
Dazk›r›
Crystal
Light Type
Raw Salt
Tuvenan
Washed Raw Salt
Dried Salt
Refined Salt
2006
635.566
220.090
2.694
84.461
-
2007
555.352
190.222
75.843
5.969
985
1.196
Quantity (in tons)
Cihanbeyli
Tuvenan
Light type
Raw Salt
Refined
Mixture
Crystal
2006
21.347
26.688
23.475
-
2007
19.993
19.261
31.701
70.307
2.300
183.040
c) Average selling prices of sodium sulphate and salt products over years
Selling prices of sodium sulphate has begun rising starting from the second half of 2007 based on the supply and demand equilibrium.
It is expected that this rise shall continue in 2008.
Unfortunately, sale prices of salt decreased in 2007 relatively. The salt market had become complicated due to import of huge masses
of salt on the one hand, and privatization of the Great Salt Lake on the other hand, which was followed by offering, in consideration
of lower prices, of stocks of hundreds of thousands tons of commodity by private companies for the purpose of overcoming their cash
problems after taking transfer of said stocks. The prices started gaining equilibrium as a result of decrease in the said stocks starting
from the last quarter of 2007.
3 - SALES ACTIVITIES
a) Below is a summary of our sodium sulphate sales volumes with a comparison to those of the preceding year
Dazk›r›
Total Refined and Granular
Light Type
Raw Salt
Washed Raw Salt
Dried Salt
Refined Salt
Cihanbeyli
Light type
Raw Salt
Refined
Mixture
2006
223.690 tons
2.694 tons
57.213 tons
-
2007
197.057 tons
58.050 tons
3.137 tons
927 tons
406 tons
2006
26.700 tons
52.448 tons
-
2007
18.372 tons
25.262 tons
67.939 tons
2.208 tons
All the factories of Turkish Bottle, Glass, and Detergent Industry meet their sodium sulphate requirements from Alkim, and our sales
to this corporation are carried out based on annual contracts. Our domestic contractual sales volume represents 90% of our overall
volume of domestic sales. Detergent sector has the highest share in our domestic sales. A demand burst has occurred for sodium
sulphate both in Turkey and in the Middle East since detergent producers have increased quantity of sodium sulphate ( which is the
cheapest raw material when compared to other imported inputs ) in their formulations for the purpose of decreasing their production
costs. For this reason, our existing plants are operated at their full capacities on the one hand, and our efforts are maintained at the
highest level to benefit from our sodium sulphate reserves in Çay›rhan for the purpose of meeting the increased demand of the domestic
market for sodium sulphate on the other hand. In short, our company acts in a manner which is appropriate for fulfillment of the
responsibilities assumed by a global company in the sodium sulphate sector.
Our foreign sales are carried out on the basis of cash against documents, cash against goods, or cash through letters of credit depending
upon status of countries of destination as well as customers. Majority of our foreign customers is comprised of detergent manufacturers.
In general, we sell our products directly to customers. However, we employ our agencies for sales to Greece, Israel, Syria, Lebanon,
and other similar countries.
14
Alkim-Ac›göl Integrated Sodium Sulphate Plant
CONSOLIDATED BALANCE SHEETS AT 31 DECEMBER 2007 AND 2006
(Amounts expressed in New Turkish lira (YTL) unless otherwise indicated)
Notes 31 December 2007
31 December 2006
61.091.626
58.712.245
4
5
7
8
9
10
11
12
9.744.305
5.351
25.438.728
230.857
2.839.844
22.219.510
6.973.394
384.836
24.108.996
371.881
2.957.218
23.260.394
13
14
15
613.031
655.526
102.379.977
103.740.799
21.548
14.313
100.954.744
626.411
762.672
289
23.247
14.313
102.180.851
789.688
732.393
307
163.471.603
162.453.044
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Marketable securities- net
Trade receivables- net
Leasing receivables- net
Due from related parties- net
Other receivables- net
Biological assets- net
Inventories- net
Receivables from construction
contracts in progress- net
Deferred tax assets
Other current assets
NON-CURRENT ASSETS
Trade receivables- net
Leasing receivables- net
Due from related parties- net
Other receivables- net
Financial assets- net
Positive/ negative goodwill- net
Investment property- net
Property, plant and equipment- net
Intangible assets- net
Deferred tax assets
Other non-current assets
TOTAL ASSETS
7
8
9
10
16
17
18
19
20
14
The consolidated financial statements prepared as at and for the year ended 31 December 2007 have been approved
and signed by the Board of Directors on 6 March 2008.
The accompanying notes form an integral part of these consolidated financial statements
17
CONSOLIDATED BALANCE SHEETS AT 31 DECEMBER 2007 AND 2006
Notes 31 December 2007
31 December 2006
LIABILITIES
CURRENT LIABILITIES
Financial liabilities - net
Short-term portion of long-term financial liabilities - net
Lease liabilities - net
Other financial liabilities- net
Trade payables- net
Due to related parties- net
Advances received
Construction progress billings- net
Provisions
Deferred tax liabilities
Other liabilities- net
6
6
8
10
7
9
21
13
23
14
15
21.615.688
10.594.376
203.590
8.768.369
566.973
268.533
188.664
1.025.183
27.204.347
2.138.552
13.527.226
225.020
8.782.771
392.665
227.046
929.014
982.053
NON-CURRENT LIABILITIES
Financial liabilities - net
Lease obligations- net
Other financial liabilities- net
Trade payables- net
Due to related parties- net
Advances received
Provisions
Other liabilities- net
6
8
10
7
9
21
23
14
15
9.323.130
4.650.065
361.292
2.768.799
1.542.974
-
10.058.706
6.198.048
681.718
664.064
2.514.876
-
MINORITY INTEREST
24
17.877.999
16.626.613
114.654.786
24.725.000
38.594.844
38.594.844
108.563.378
24.725.000
38.594.844
38.594.844
13.678.517
10.086.704
3.591.813
-
12.355.311
8.323.364
4.031.947
-
-
-
18.230.111
19.426.314
11.170.067
21.718.156
163.471.603
162.453.044
SHAREHOLDERS' EQUITY
Share Capital
Treasury share
Capital Reserves
Share premiums
Profit from share cancellations
Revaluation fund
Revaluation fund for financial assets
Inflation adjustment to shareholders' equity
Profit Reserves
Legal reserves
Statutory reserves
Extraordinary reserves
Special reserves
Property sales gains and investments shares
To be added to capital
Cumulative translation adjustment
Net profit for the year
Retained earnings
25
26
27
27
27
27
28
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES
Provisions and contingent assets and contingent liabilities
31
The accompanying notes form an integral part of these consolidated financial statements.
18
CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEARS THEN ENDED 31 DECEMBER 2007 AND 2006
1 January Notes 31 December 2007
1 January 31 December 2006
Net sales
Cost of sales
Service income- net
Other revenue
36
36
36
36
142.463.444
(104.258.100)
-
119.244.537
(88.136.734)
-
GROSS PROFIT
36
38.205.344
31.107.803
Operating expenses
37
(14.383.719)
(14.682.760)
23.821.625
16.425.043
6.726.754
(578.144)
(5.675.344)
8.324.837
(1.527.377)
(9.086.428)
24.294.891
14.136.075
NET OPERATING PROFIT
Other income
Other expenses
Financial expenses
38
38
39
OPERATING PROFIT
Gain/ loss on net monetary position
40
-
-
(Profit)/ loss attributable to minority interest
24
(1.251.386)
426.793
23.043.505
14.562.868
(4.813.394)
(3.392.801)
18.230.111
11.170.067
0,7373
0,4518
PROFIT BEFORE TAX
Taxes on income
41
NET PROFIT FOR THE YEAR
EARNINGS PER SHARE
42
Inflation
adjustment to
Share shareholder’s
capital
equity
Extraordinary
reserves
38.594.844
6.832.832
4.565.239
24.551.593
7.930.893
107.200.401
-
-
-
(3.386.408)
(6.420.682)
-
(9.807.090)
-
-
1.490.532
-
2.853.116
-
3.587.245
-
(7.930.893)
11.170.067
11.170.067
24.725.000
38.594.844
8.323.364
4.031.947
21.718.156
11.170.067
108.563.378
Dividend payment
-
-
-
(2.567.804)
(9.570.899)
-
(12.138.703)
Transfers to retained earnings
and reserves
-
-
1.763.340
-
2.127.670
-
7.279.057
-
(11.170.067)
18.230.111
18.230.111
24.725.000
38.594.844
10.086.704
3.591.813
19.426.314
18.230.111
114.654.786
1 January 2006
24.725.000
Dividend payment
Transfers to retained earnings
and reserves
31 December 2006
31 December 2007
19
Total
Retained
Net profit shareholder’s
earnings for the year
equity
Legal
reserves
1 January Notes 31 December 2007
23.043.505
14.562.868
9.357.801
712.023
(629.760)
1.046.729
115.196
(3.137.556)
1.251.386
(3.380.634)
8.552.918
668.857
(467.853)
1.362.886
244.228
27.474.137
22.032.099
379.485
(1.328.033)
141.024
117.374
1.040.884
42.495
18
(678.466)
174.308
41.487
1.060
43.130
(458.100)
(136.656)
(5.267.289)
1.006.709
(691.250)
2.218.463
186.927
(65)
(1.376.230)
(153.113)
41.203
10.942
(477.840)
26.990.803
17.393.900
629.760
467.853
(8.471.556)
387.943
(14.598.078)
862.592
(7.453.853)
(13.267.633)
(3.131.467)
(341.856)
(1.345.643)
(9.807.090)
3.071.805
906.738
(16.766.039)
(7.174.190)
2.770.911
(3.047.923)
Cash flows from operating activities:
Net profit before taxation on income
Adjustments to reconcile net profit to net cash
generated from operating activities
Depreciation and amortisation
19, 20
Provision for employment termination benefits
23
Interest income
38
Interest expense
39
Loss from sales of property, plant and equipment - net
38
Taxes paid
(4.042.109)
Profit/ (loss) attributable to minority interest
24
Exchange (gains)/ losses on borrowings
Changes in assets and liabilities
Change in marketable securities
Change in trade receivables
Change in due from related parties
Change in other receivables
Change in inventories
Change in other current assets
Change in other non-current assets
Change in trade payables
Changes in due to related parties
Changes in advances received
Changes in short-term provisions
Changes in other short-term liabilities
Employment termination benefits paid
5
7
9
10
12
15
7
9
21
23
15
23
Net cash flows generated from operating activities
Cash flows from investing activities
Interest received
Purchases of property, plant and equipment
and intangible assets
Proceeds from sales of property, plant and equipment
19-20
Net cash used in investing activities
Cash flows from financing activities
(Decrease)/ increase in financial liabilites
(Decrease)/ increase in lease obligations
Interest paid
Dividend paid
8
(1.154.013)
(12.138.703)
Net cash used in financing activities
Net increase/ (decrease) in cash and cash equivalents
(426.793)
672.544
Cash and cash equivalents at beginning of the year
4
6.973.394
10.021.317
Cash and cash equivalents at end of the year
4
9.744.305
6.973.394
20
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AT 31 DECEMBER 2007 AND 2006
NOTE 1 - ORGANISATION AND NATURE OF OPERATIONS
Alkim Alkali Kimya A.fi (the “Company”) was established in 1948 as Alkali Madencilik Limited fiirketi. Since 1963,
the Company has continued its operations as Alkim Alkali Kimya A.fi.
The nature of the operations of the Company is the mining of ores and the production and distribution of all kinds
of chemical materials in domestic and foreign markets as disclosed in the articles of association.
The nature of the businesses of the Subsidiaries is as follows:
Subsidiaries
- Alkim Ka¤›t Sanayi ve Ticaret A.fi. (“Alkim Ka¤›t”)
- Alkim Sigorta Arac›l›k Hizmetleri Ltd. fiti. (“Alkim Sigorta”)
Country
Nature of business
TurkeyKa¤›t ürünlerinin üretimi ve sat›fl›
Turkey
Sigortac›l›k
The Company and its subsidiaries (“the Group”) are registered in Turkey. The Company and its subsidiary Alkim Ka¤›t,
are publicly quoted companies and 29,18% (2006: 22,44%) of the Company's shares, 20,00% (2006: 20,00%) of
Alkim Ka¤›t shares are quoted on the Istanbul Stock Exchange (“ISE”) (Note 25).
The address of the registered office is as follows:
Gümüflsuyu Mahallesi ‹nönü Caddesi No:13
34437 Taksim- ‹stanbul
NOTE 2 - BASIS OF PRESENTATION OF FINANCIAL STATEMENTS
2.1 Accounting Standards
The Group maintains its books of account and prepares its statutory financial statements in accordance with the
Turkish Commercial Code, communiqués issued by the CMB and Turkish tax legislation. These financial statements
are based on the statutory records, which are maintained under the historical cost convention with adjustments and
reclassifications for the purpose of fair presentation in accordance with CMB Communiqué XI/25 “Communiqué
Regarding Accounting Standards in Capital Markets” (“Communiqué”) dated 15 November 2003. Financial statements
and notes to the financial statements are prepared in compliance with the formats required by the CMB announcement
dated 10 December 2004.
Other than the financial assets and liabilities carried at their fair values, consolidated financial statements are based
on historical cost convention and prepared in terms of New Turkish Lira (“YTL”).
2.2 Financial reporting in hyperinflationary periods
CMB declared by referring to the announcement dated 17 March 2005 that the application of inflationary accounting
is not required for the companies which continue the operations in Turkey and prepare the financial statements in
accordance with Communiqué; effective from 1 January 2005.
21
2.3 Group Accounting
The subsidiries are consolidated from the date on which control is transferred to the Group and no longer consolidated
from the date that control ceases. The financial statements of the companies included in the scope of consolidation
have been prepared as of the date of the consolidated financial statements and have been prepared in accordance
with CMB accounting standards applying uniform accounting policies and presentation as of 31 December 2007 and
2006.
Subsidiaries
Subsidiaries are companies which Alkim Alkali Kimya A.fi. owns, directly or over other subsidiaries, in terms of capital
and management relations, 50% or over 50% of the shares, voting power or the majority in management or electing
the majority of the management.
The table below sets out all Subsidiaries included in the scope of consolidation and shows their shareholding structure:
(*)
Subsidiaries
Direct
shares owned
by parent
company (%)
Indirect
shares owned
by parent
company (%)
Minority
interest (%)
Alkim Ka¤›t
Alkim Sigorta
79,93 (*)
50,00
39,96
20,07 (*)
10,04
According to the decision of Board of Directors dated 29 March 2007; the company has applied to the CMB on 28
May 2007 for the sale of 18,77% share in its Subsidiary Alkim Ka¤›t, and accordingly percentage of shares submitted
to IMKB Takas ve Saklama Bankas› A.fi. was increased from %12,51 to %31,28 (2006: %12,51), however by the
the approval date of the consolidated financial statements, the sale of the related shares has not realised yet.
Balance sheet items of the parent Alkim Alkali Kimya A.fi. and its subsidiaries excluding paid-in capitals and shareholders'
equity at the purchase date, are consolidated on a line-by-line basis and the intercompany balances are eliminated.
Paid-in capital at the consolidated balance sheet is, in principle, the paid-in capital of the parent company. Paid-in
capital of the consolidated subsidiaries were not included.
The minority shareholders' share in the net assets and results for the year for the subsidiaries are separately classified
in the consolidated balance sheet and statement of income as “Minority Interest”.
The statements of income of the subidiaries are consolidated on a line-by-line basis. Intercompany transactions,
unrealised gains on transactions beetwen group companies are eliminated; unrealized loss are also eliminated, unless
cost cannot be recovered.
2.4
Comparatives and Restatement of Prior Year Financial Statements
The Group has prepared its financial statements on a comparative basis with the preceding financial period, which
enables determination of trends in financial position and performance. The Group has prepared its balance sheet as
at 31 December 2007 on a comparative basis to 31 December 2006; and statement of income, cash flows and changes
in shareholders' equity for the period of 1 January - 31 December 2007 on a comparative basis to the period of
1 January - 31 December 2006.
Where necessary reclassifications in prior year comparative figures have been made in order to make them comparable
with the presentation of current year consolidated financial statements.
2.5
Offsetting
All items with significant amounts and nature, even with similar characteristics, are presented separately in the financial
statements. Insignificant amounts are grouped and presented by means of items having similar substance and function.
When the nature of transactions and events necessitate offsetting, presentation of these transactions and events over
their net amounts or recognition of the assets after deducting the related impairment are not considered as a violation
of the rule of non-offsetting. As a result of the transactions in the normal course of business, revenue other than sales
described in “Revenue Recognition” are presented as net provided that if the nature of the transaction or the event
qualify for offsetting.
22
NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies applied in the preparation of the consolidated financial statements are
summarised below:
i. Revenue recognition
Revenues are recognised on an accrual basis at the time deliveries are made, services are given and significant
risks and rewards are transferred to the buyer, the amount of revenue can be measured reliably and it is
probable that the economic benefits associated with the transaction will flow to the Group at the fair value
of considerations received or receivable. Net sales represent the invoiced value of goods shipped less sales
returns, sales discounts and commissions (Note 36). Rent income are recognized on an accrual basis, interest
income are recognized on an accrual basis with effective yield basis calculation. Dividend income are recognized
when the right to receive is possessed.
ii. Inventories
Inventories are valued at the lower of cost or net realisable value. Net realisable value is the estimated selling
price in the ordinary course of business, less the costs of completion and selling expenses. Cost elements
included in inventories comprise total purchase costs and other costs incurred in bringing the inventories to
their present location and condition. The cost of inventories is determined on the monthly moving weighted
average basis (Note 12).
iii. Property, plant and equipment
Property, plant and equipment acquired before 1 January 2005 are carried at cost in purchasing power of YTL
as at 31 December 2004; less accumulated depreciation and impairment losses. Property, plant and equipment
acquired after 1 January 2005 are carried at cost less accumulated depreciation and impairment losses.
Property, plant and equipments are capitalized and depreciated when they are fully commissioned and in a
physical state to meet their designated production capacity.
Depreciation is provided using the straight-line method based on the estimated useful lives of the assets (Note
19). Land is not depreciated as it is deemed to have an indefinite life. The estimated useful lives for property,
plant and equipment are as follows:
Years
Land improvements
Buildings
Machinery and equipment
Motor vehicles
Furniture and fixtures
7
25
5
4
3
-
50
50
30
10
20
Property, plant and equipment are reviewed for impairment losses whenever events or changes in circumstances
indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount
by which the carrying amount of the asset exceeds its recoverable amount. Gain or losses on disposals of
property, plant and equipment with respect to their restated net book values are included in the related income
and expense accounts (Note 38).
Repair and maintenance expenditures are charged to the income statement as they are incurred. Repair and
maintenance expenditures are capitalised if they result in an enlargement or substantial improvement of the
respective assets and depreciated over remaining useful life of related asset.
iv. Intangible assets
Intangible assets comprise of computer software programmes and development costs. The acquired before
1 January 2005 are carried at cost in the purchasing power of YTL as at 31 December 2004; less accumulated
depreciation and impairment losses; those acquired after 1 January 2005 are carried at cost less accumulated
depreciation and impairment losses, which are depreciated using the straight-line method over 3-10 years
following the acquisition date (Note 20) in either case.
v. Development expenses
Development expenditures are recognised as an expense as incurred. Development costs that have been
capitalised under intangible assets are amortised from the commencement of the commercial production of
the product on a straight-line basis over five years (Note 20).
23
vi. Impairment of assets
Except for deferred tax assets each class of assets are reviewed for impairment losses at each balance sheet date
whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment
loss is recognised for the amount by which the carrying amount of the asset or any cash generating unit of that asset
exceeds its recoverable amount which is the higher of an asset's net selling price and value in use. Impairment losses
are accounted for in the statement of income. Impairment loss on an assets can be reversed, to the extent of previously
recorded impairment losses, in cases where increases in the recoverable value of the asset can be associated with
events that occur subsequent to the period when the impairment loss was recorded.
vii. Borrowings and borrowing cost
If the maturity of these instruments is less than 12 months, these loans are classified in current liabilities and if more
than 12 months, classified in non-current liabilities(Note 6). Borrowings are stated at amortised cost using the effective
yield method. Any proceeds and the redemption value is recognised in the statement of income as borrowing cost
over the period of the borrowings. Borrowing cost are expensed as incurred (Note 39).
viii. Financial assets
Loans and receivables constitute non-derivative financial instruments, which are not quoted in active markets and
have fixed or scheduled payments. Loans and receivables arise, without held-for-sale intention, from the Company's
supply of goods, service or direct fund to any debtor. They are classified as current assets when they have a maturity
less than 12 months, and non-current assets when they have a maturity more than 12 months as of balance sheet
date. Loans and receivables are recognised initially at their fair value plus transaction costs directly attributable to the
acquisition or issue of the financial asset. These loans and receivables are included in trade receivables and other
receivables in the balance sheet. Loans are recorded at the proceeds received, net of any transaction costs incurred.
In subsequent periods, loans are stated at amortised cost using the effective yield method.
ix. Business combinations
None. (2006:None).
x. Foreign currency transactions and balances
Transactions in foreign currencies during the year have been translated at the exchange rates prevailing at the dates
of the transactions. Monetary assets and liabilities denominated in foreign currencies have been translated into YTL
at the exchange rates prevailing at the balance sheet dates. Foreign exchange gains or losses arising from the settlement
of such transactions and from the translation of monetary assets and liabilities are recognised in the statement of
income.
xi. Earnings per share
Earnings per share indicated in the consolidated statements of income are determined by dividing consolidated net
income for the year by the weighted average number of shares that have been outstanding during the year concerned
(Note 42).
In Turkey, companies can increase their share capital by making a pro-rata distribution of shares ("bonus shares")
to existing shareholders from retained earnings and revaluation surplus. For the purpose of earnings per share
computations, the weighted average number of shares outstanding during the year has been adjusted in respect of
bonus shares issues without a corresponding change in resources, by giving them retroactive effect for the year in
which they were issued and for each earlier year.
xii. Subsequent events
Subsequent events, announcements related to net profit or even declared after other selective financial information
has been publicly announced, include all events that take place between the balance sheet date and the date when
balance sheet was authorised for issue (Note 34).
In case the events require a correction subsequent to the balance sheet date, the Group makes the necessary corrections
to the financial statements. Moreover, the events that occur subsequent to the balance sheet date and not require
a correction to be made are disclosed in accompanying notes, when they may affect decision of making of users of
financial statements.
24
xiii. Provisions, contingent assets and contingent liabilities
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events; it
is more likely than not that an outflow of resources will be required to settle the obligation; and the amount has been
reliably estimated.
In cases where the time value of money is material, provisions are determined as the present value of expenses
required to be made to honor the liability. The rate used to discount provisions to their present values is determined
taking into account the interest rate in the related markets and the risk associated with the liability. This discount
rate does not consider risks associated with future cash flow estimates.
Possible assets or obligations that arise from past events and whose existence will be confirmed only by the occurrence
or non-occurrence of one or more uncertain future events not wholly within the control of the Group are treated as
contingent assets or liabilities. The Group does not recognise contingent assets and liabilities (Note 31).
xiv. Accounting policies, changes in accounting estimates and errors
Significant changes in accounting policies and errors are applied on a retrospective basis and reflected upon previous
periods' financial statements. Changes in accounting estimates involving single periods are reflected upon the current
period when the change occurs; changes involving future periods are reflected both upon the current period when
the change occurs and the future period, on a prospective basis.
xv. Leases
Leases of property, plant and equipment are classified regarding the belonging of all the risks and rewards of ownership
to lessor or lessee. According to this principle, leases of property, plant and equipment where the Group has substantially
all the risks and rewards of ownership are classified as finance leases (Note 8).
Leases of property, plant and equipment excluding finance leases are classified as operating leases. Payments for
assets leased out under operating leases are reflected to statement of income as expense on straight-line basis over
the lease term even if the installments are not fixed. Rental income is also recognised on a straight-line basis over
the lease term and reflected to statement of income as income; uncommitted to period of collections.
xvi. Related parties
For the purpose of these financial statements, Group's personnel, shareholders, key management personnel and
board members, in each case together with their families and companies controlled by or affiliated with them and
associated companies are considered and referred to as related parties (Note 9).
xvii. Segment reporting
As the Group is engaged in two major business segment namely mining and paper production, the financial information
regarding business segments are reported in Note 33.
The Group's primary reporting format is business segments A business segment is a group of assets and operations
engaged in providing products or services that are subject to risk and return that are different from those of other
business segments.
As the Group is engaged in providing products or services mainly within the same economic environment that are
subject to the same risks and returns, no geographical segment information is presented in these consolidated financial
statements on the grounds of materiality.
xviii. Construction contracts
None (2006: None).
xix. Discontinued operations
None (2006: None).
xx. Government grants and incentives
None (2006: None).
xxi. Investment Property
None (2006: None).
25
xxii. Taxes on income
Taxation on income includes current period tax liability and deferred income taxes. Current period tax liability includes
the taxes payable calculated on the taxable portion of period income with tax rates enacted on the balance sheet
date and the correction adjustments related to prior period tax liabilities (Note 41).
Deferred tax assets and liabilities are provided, using the liability method, for all temporary differences arising between
the tax bases of assets and liabilities and their carrying values for financial reporting purposes with the enacted tax
rates as of the balance sheet date (Note 14).
Deferred tax assets or liabilities are reflected to the financial statements to the extent that they will provide an increase
or decrease in the taxes payable for the future periods where the temporary differences will reverse. Deferred tax
liabilities are recognized for all taxable temporary differences, where deferred income tax assets resulting from
deductible temporary differences are recognized to the extent that it is probable that future taxable profit will be
available against which the deductible temporary difference can be utilised. To the extent that deferred tax assets
will not be utilised, the related amounts have been deducted accordingly.
Deferred tax assets and deferred tax liabilities related to income taxes levied by the same taxation authority are offset
accordingly, at individual entity level. Consequently, the net deferred tax positions of the parent company and the
individual subsidiaries and joint venture are not offset in the consolidated financial statements (Notes 14 and 41).
xxiii. Provision for employment termination benefits
According to the enacted law, the Group is liable to make a lump sum payment to employees when employment is
terminated for reasons other than retirement, resignation and others disclosed in the Labour Law. Provisions for
employment termination benefits have been calculated for the net present value of future employment termination
benefits and reflected in the consolidated financial statements (Note 23).
xxiv. Pension plans
None (2006: None).
xxv. Agricultural operations
None (2006: None).
xxvi. Statement of cash flows
In the statement of cash flows, cash flows are classified into three categories as operating, investing and financing
activities. Cash flows from operating activities are those resulting from the Group's operating activities. Cash flows
from investing activities indicate cash inflows and outflows resulting from fixed asset and financial investments. Cash
flows from financing activities indicate the resources used in financing activities and the repayment of these resources.
For the purposes of the cash flow statement, cash and cash equivalents comprise of cash in hand accounts, bank
deposits, mutual funds and loans originated by the Group by providing money directly to a bank under reverse
repurchase agreements with a predetermined sale price at fixed future dates of less than or equal to 3 months.
xxvii. Re-purchase agreements
None (2006: None).
xxviii. Trade receivables and impairment of receivables
Trade receivables that are created by the Group by way of providing goods or services directly to a debtor are carried
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 original invoice amount unless the effect of imputing interest
is significant.
A credit risk provision for trade receivables is established if there is objective evidence that the Group will not be able
to collect all amounts due. The amount of the provision is the difference between the carrying amount and the
recoverable amount, being the present value of all cash flows, including amounts recoverable from guarantees and
collateral, discounted based on the original effective interest rate of the originated receivables at inception.
If the amount of the impairment subsequently decreases due to an event occurring after the write-down, the release
of the provision is credited to other income in the consolidated statement of income (Note 38).
xxix. Share Capital and dividends
Share capital are classified as capital and dividends distributed from common stocks are deducted at the period of
the declaration from the retained earnings.
26
xxx. Financial instruments and financial risk management
The Group's activities expose it to a variety of financial risks, including the effects of changes paper and cellulose
markets, in debt and equity market prices, foreign currency exchange rates and interest rates. The Group's overall
risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential
adverse effects on the financial performance of the Group.
Risk management has been applied in line with the decisions that have been approved by the Board of Directors of
the Company and its susidiaries.
Market risk
i. Foreign exchange risk
The Group is exposed to foreign exchange risks through the impact of rate changes on translation into YTL of foreign
currency denominated assets and liabilities. These risks are monitored and limited by analyses of the foreign currency
position (Note 29).
ii. Interest rate risk
The Group is exposed to interest rate risk through the impact of rate changes on interest bearing liabilities and assets.
The interest rate risk is managed through the balancing of assets and liabilities that are responsive to the fluctuations
in interest rates.
Liquidity risk
The ability to fund existing and prospective debt requirements is managed as necessary by maintaning the availability
of adequate committed funding lines from high quality lenders.
Credit risk
Ownership of financial assets involves the risk that counterparties may be unable to meet the terms of their agreements.
The Group has established an effective control system over its dealer network and risks arising from transactions with
dealers (excluding related parties) are followed by obtaining sufficient amounts of guarantees from the dealers for
dealing with credit risk.
xxxi. Fair value of financial instruments
Fair value is the amount at which a financial instrument could be exchanged in a current transaction between willing
parties, other than in a forced sale or liquidation, and is best evidenced by a quoted market price, if one exists.
The estimated fair values of financial instruments have been determined by the Group using available market information
and appropriate valuation methodologies. However, judgement is necessarily required to interpret market data to
estimate the fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the
Group could realise in a current market exchange.
The following methods and assumptions were used to estimate the fair value of the financial instruments for which
it is practical to estimate fair value:
Financial assets
The fair values of balances denominated in foreign currencies, which are translated to YTL using year-end exchange
rates, are considered to approximate their carrying value. The fair values of cash and cash equivalents are considered
to approximate their respective carrying values due to their short-term nature. The carrying values of trade receivables
and due from related parties are estimated to approximate their fair values due to their short-term nature.
Financial liabilities
Fair value of bank borrowings has been disclosed in Note 6. The fair values of other monetary liabilities including
trade payables, due to related parties and other financial liabilities are considered to approximate their respective
carrying values due to their short-term nature.
xxxii.Significant accounting estimates and decisions
Preparation of financial statements requires disclosure of reported assets and liabilities, contingent assets and liabilities
as at balance sheet date and utilization of estimates and assumptions that can effect income and expense balances
of the reporting period. Estimations and assumptions can differ from actual results in spite of these estimations and
assumptions are based on Group management's best knowledge Significant accounting estimates are as follows:
Income taxes
There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary
course of business and significant judgment is required in determining the provision for income taxes. The Group
recognizes tax liabilities for anticipated tax issues based on estimates of whether additional taxes will be due and
recognizes tax assets for the carry forward tax losses and unused investment tax credits to the extent that the realisation
of the related tax benefit through the future taxable profits is probable (Note 14). Where the final tax outcome of
these matters is different from the amounts that were initially recorded, such differences will impact the income tax
and deferred tax provisions in the period in which such determination is made.
27
NOTE 4 - CASH AND CASH EQUIVALENTS
31 December 2007
31 December 2006
9.042
9.735.263
8.810.114
660.951
264.198
-
4.905
6.968.489
2.675.951
174.467
319.539
3.798.532
9.744.305
6.973.394
Cash on hand
Banks
- YTL denominated time deposits
- YTL denominated demand deposits
- Foreign currency denominated demand deposits
- Foreign currency denominated time deposits
As of 31 December 2007, maturity of YTL denominated time deposits is less than one month (2006: One month) and
the effective interest rate is 17,67% per annum (“p.a.”) (2006: 20,00% p.a., 5,16% p.a. and 3,25% for YTL, USD and
Euro denominated time deposits, respectively).
NOTE 5 - MARKETABLE SECURITIES
The details of the short-term securities classified by the Group in marketable securities, held for trading purposes, are
as follows;
31 December 2007
31 December 2006
Mutual funds (“B type”)
Other
5.351
380.359
4.477
5.351
384.836
NOTE 6 - FINANCIAL LIABILITIES
31 December 2007
Effective weighted
average interest
rate p.a. (%)
YTL
a) Short-term financial liabilities
Short-term borrowings (Euro)
Short-term borrowings (YTL)
-
31 December 2006
Effective weighted
average interest
rate p.a. (%)
YTL
-
3,90
-
2.111.446
27.106
2.138.552
b) Short-term portion of
long-term financial liabilities
Short-term borrowings (USD) (*)
5,27
10.594.376
5,56
10.594.376
c) Long-term financial liabilities
Long-term borrowings (USD) (*)
5,14
13.527.226
13.527.226
4.650.065
5,53
4.650.065
6.198.048
6.198.048
(*) The interest rates of the USD denominated bank borrowings vary between Libor+0,01 p.a. with six-month contractual
repricing dates (2006: Libor+0,02-0,12 p.a.).
The redemption schedule of long-term bank borrowings as of 31 December 2007 and 2006 is as follows:
31 December 2007
31 December 2006
4.650.065
6.198.048
-
4.650.065
6.198.048
2008
2009
Carrying value and fair value of bank borrowings are as follows:
Carrying Amounts
31 December 2007 31 December 2006
Bank borrowings
15.244.441
21.863.826
Fair Values
31 December 2007 31 December 2006
15.332.207
21.950.328
Fair value of the borrowings has been calculated regarding the discounted cash flow method using yearly effective
weighted average interest rates of 4,52% p.a. (2006: 5,55% p.a. and 3,90% p.a. for USD and Euro denominated bank
borrowings, respectively)
28
NOTE 7 - TRADE RECEIVABLES AND PAYABLES
31 December 2007
31 December 2006
16.429.198
10.198.738
3.008
14.814.951
10.499.001
10.311
26.630.944
25.324.263
(410.289)
(781.927)
(433.340)
(781.927)
25.438.728
24.108.996
a) Short-term trade receivables
Cheques and notes receivables
Customer current accounts
Deposits and guarantees given
Less: Unearned financial income
Provision for doubtful receivables
As of 31 December 2007, effective weighted average interest rate for short-term YTL trade receivables is 15,62% p.a
(2006: 18,59% p.a), for the trade receivables denominated in USD and Euro effective weighted average interest rates
are 4,50% p.a. and 3,99% p.a (2006: 5,35% p.a. and 3,71% p.a.) respectively. Average date of maturity is within 2
months (2006: 2 months).
b) Long-term trade receivables:
Deposits and guarantees given
c) Short-term trade payables:
Supplier current accounts
Less: Unincurred financial cost
21.548
23.247
21.548
23.247
8.808.792
(40.423)
8.813.825
(31.054)
8.768.369
8.782.771
As of 31 December 2007, effective weighted average interest rate for short-term YTL trade payables 16,06% p.a.
(2006: 18,51% p.a.), for the trade payables denominated in USD and Euro effective weighted average interest rates
are 4,51% p.a. and 3,09% p.a. (2006: 5,32% p.a and 3,63% p.a.) respectively. Average date of maturity is within 1
month. (2006: 1 month)
d) Long-term trade payables:
Supplier current accounts
Less: Unincurred financial cost
-
701.447
(37.383)
-
664.064
NOTE 8 - LEASING RECEIVABLES AND OBLIGATIONS
31 December 2007
YTL
USD
equivalent
Short-term
Long-term
31 December 2006
YTL
USD
equivalent
174.800
310.201
203.590
361.292
160.089
485.001
225.020
681.718
485.001
564.882
645.090
906.738
Lease obligations with an effective average interest rate of 8,5% p.a. (2006: 8,5% p.a.) and with the maturity on 1
September 2010; are related with the purchase of gas turbine by Alkim Ka¤›t.
NOTE 9 - TRANSACTIONS AND BALANCES WITH RELATED PARTIES
Due from related parties and due to related parties' balances and transactions held with related parties during the
current period are as follows:
a) Due from related parties:
Receivables from personnel
Sodafl Sodyum A.fi. (“Sodafl”)
29
31 December 2007
31 December 2006
171.185
59.672
279.102
92.779
230.857
371.881
b) Due to related parties:
Payable to personnel
Payable to shareholders
c) Product and service sales to related parties:
Sodafl
1 Ocak 31 Aral›k 2007
1 Ocak 31 Aral›k 2006
566.284
689
392.062
603
566.973
392.665
924.982
1.225.976
The Group has transferred a region of its privileged area in Afyon Dazk›r› Ac›göl to Sodafl for which the Group collects
the 6% of the gross sales of Sodafl as “Rödavans” income (Note 38) amounting to YTL 824.357 as of 31 December
2007 (2006: YTL 733.829). Moreover, Group's goods and service sales to Sodafl is amounting to YTL 100.625 (2006:YTL
492.147).
d) Product purchases from related parties:
Sodafl
708.142
451.196
12.138.703
9.807.090
1.734.443
1.693.965
31 December 2007
31 December 2006
2.081.412
696.052
62.380
2.182.270
611.854
163.094
2.839.844
2.957.218
31 December 2007
31 December 2006
11.653.811
486.831
1.837.414
324.422
7.917.032
7.329.846
2.132.638
5.024.420
191.630
8.581.860
22.219.510
23.260.394
e) Dividends paid:
Dividends paid to shareholders
f) Remuneration of key management personnel:
Benefits provided to top management
NOTE 10 - OTHER RECEIVABLES AND PAYABLES
Other Receivables:
Value Added Tax transferred (“VAT”)
VAT receivable
Other
NOTE 11 - BIOLOGICAL ASSETS
None (2006: None).
NOTE 12 - INVENTORIES
Raw materials
Semi finished goods - net
Finished goods
Other inventories
Order advances given
YTL 214.090 of other inventories is comprised of goods in transit as of 31 December 2007 (2006: None).
The cost of inventories recognised as expense and included in cost of goods sold amounted to YTL 58.280.898 (2006:
YTL 49.535.099).
NOTE 13 - BALANCES RELATED TO CONSTRUCTION CONTRACTS IN PROGRESS
None (2006: None).
30
NOTE 14 - DEFERRED TAX ASSETS AND LIABILITIES
The Group calculates deferred tax assets and liabilities based on temporary differences between the financial statements
prepared in accordance with the Communiqué and financial statements prepared according to the Turkish tax legislation.
As further stated in Note 41, in accordance with temporary article 69 amended to Income Tax Law, corporate taxpayers
that utilise unused investment tax credits, could not offset their investment incentive allowances against 2005 taxable
income, can offset their existing investment incentive allowances at 31 December 2005 against taxable income of the
years 2007 and 2008. In this respect, as the Company's subsidiary Alkim Ka¤›t has prefered to utilise unused investment
tax credits, the Company has calculated deffered tax assets and liabilities for all temporary differences concerning to
Alkim Ka¤›t that are expected to be realised or settled until the end of 2008 under liability method using 30% (2006:
30%) and 20% (2006: 20%) thereafter. Considering all other temporary differences, deferred tax assets and liabilities
have been calculated under liability method using 20% (2006: 20%).
The breakdown of cumulative temporary differences and the resulting deferred tax assets/ (liabilities) provided at 31
December 2007 and 2006 using the enacted tax rates is as follows:
Taxable temporary
differences
Differences on property, plant and
equipment and intangible assets
Carry-forward tax losses and unutilised
investment tax credits
Provision for employment termination
benefits (Note 23)
Other
Deferred tax assets
Deferred income tax assets/
(liabilities) - net
31 December
2007
31 December
2006
31 December
2007
31 December
2006
(12.577.100)
(12.115.545)
(2.515.420)
(2.423.109)
6.759.380
14.189.415
1.167.642
2.658.601
2.768.799
(68.580)
2.514.876
(30.368)
553.760
13.716
1.735.118
(2.515.420)
502.975
(6.074)
3.161.576
(2.429.183)
(780.302)
732.393
Deferred tax (liabilities)/ assets - net
Turkish tax legislation does not allow the parent company and its subsidiaries to be presented on the consolidated tax
declaration. Therefore, deferred tax assets and liabilities presented in these financial statements are calculated separately
for each company:
31 December 2007
Deferred tax
- Alkim Alkali Kimya A.fi.
- Alkim Ka¤›t
31 December 2006
Deferred tax
Assets
Liabilities
Net
Assets
Liabilities
Net
763.292
1.365.478
(620)
(2.908.452)
762.672
(1.542.974)
726.513
2.819.737
(20.409)
(2.793.448)
706.104
26.289
2.128.770
(2.909.072)
(780.302)
3.546.250
(2.813.857)
732.393
Movement for deferred tax can be analysed as follows:
1 January
(Charged)/ credited to consolidated income statement (Note 41)
31 December
2007
2006
732.393
732.055
(1.512.695)
338
(780.302)
732.393
Carry-forward tax losses accounted for as of 31 December 2007 can be utilised until 31 December 2011.
31
NOTE 15 - OTHER CURRENT/NON-CURRENT ASSETS AND CURRENT/ NONCURRENT LIABILITIES
31 December 2007
31 December 2006
511.361
45.592
56.078
566.454
34.530
54.542
613.031
655.526
a) Other current assets:
Prepaid expenses
Income accrual for customer overdue charges
Other
Prepaid expenses amounting to YTL 511.361 (2006:YTL 566.454) are mainly related with the insurance premiums paid
for property, plant and equipment.
b) Other current liabilities:
Taxes and funds payable
Other
1.014.611
10.572
941.765
40.288
1.025.183
982.053
NOTE 16 - FINANCIAL ASSETS
31 December 2007
Share
Carrying
%
value
‹tafl ‹zmir Teknopark Tic. A.fi.
Kristal Rafine Tuz A.fi.
0,12
less than 0,1
14.285
28
31 December 2006
Share
Carrying
%
value
0,12
less than 0,1
14.313
14.285
28
14.313
NOTE 17 - POSITIVE / NEGATIVE GOODWILL
None (2006: None).
NOTE 18 - INVESTMENT PROPERTY
None (2006: None).
NOTE 19 - PROPERTY, PLANT AND EQUIPMENT
1 January 2007
Opening
Additions
Disposals
Transfers
31 December 2007
Closing
2.003.211
9.452.706
22.987.576
117.344.527
7.583.012
6.190.922
1.061.934
9.192.226
36.357
105.298
279.598
541.900
459.912
1.428.889
5.566.712
(831)
775.613
5.416.355
(842.956)
8.298.783
(326.529)
86.522
(22.554)
146.227
- (2.437.751)
- (12.292.105)
2.002.380
10.264.676
28.509.229
125.079.952
7.884.905
6.774.507
53.072
2.466.833
175.816.114
8.418.666
(1.192.870)
(*) (6.356)
183.035.554
Less: Accumulated depreciation
Land improvements
(3.419.791)
Buildings
(7.729.936)
(54.414.776)
Motor vehicles
(3.633.256)
(4.437.504)
(435.180)
(929.887)
(6.520.101)
(744.740)
(505.370)
471.093
200.992
17.646
-
(3.854.971)
(8.659.823)
(60.463.784)
(4.177.004)
(4.925.228)
(73.635.263)
(9.135.278)
689.731
-
(82.080.810)
Cost:
Land
Land improvements
Buildings
Motor vehicles
Furniture and fixture
Advances given
Construction in progress
Net book value
102.180.851
100.954.744
32
1 January 2006
Opening
Additions
Disposals
Transfers
31 December 2006
Closing
2.003.211
8.471.603
21.943.957
115.764.131
7.713.979
6.000.081
181.627
2.142.482
16.135
1.360.243
177.541
154.833
880.307
11.971.679
(192.811)
(737.640)
(1.986.060)
(33.093)
-
964.968
1.236.430
957.793
1.677.552
69.101
(4.921.935)
2.003.211
9.452.706
22.987.576
117.344.527
7.583.012
6.190.922
1.061.934
9.192.226
164.221.071
14.560.738
(2.949.604)
(*) (16.091)
175.816.114
Less: Accumulated depreciation
Land improvements
(3.014.330)
Buildings
(6.990.314)
(48.580.684)
Motor vehicles
(4.601.334)
(3.966.365)
(405.461)
(824.170)
(5.964.745)
(638.828)
(491.816)
84.548
130.653
1.606.906
20.677
-
(3.419.791)
(7.729.936)
(54.414.776)
(3.633.256)
(4.437.504)
(67.153.027)
(8.325.020)
1.842.784
-
(73.635.263)
Cost:
Land
Land improvements
Buildings
Motor vehicles
Furniture and fixture
Advances given
Construction in progress
Net book value
97.068.044
102.180.851
(*) The related figure includes the transfers to intangible assets.
The additions and transfers to land improvements, buildings and machinery and equipment are mainly related with the
investments made in sodium sulphate facility in Konya Cihanbeyli. Construction in progress is mainly related with the
investments of glauberit and fertilizer facility.
YTL 8.568.799 (2006: YTL 7.514.147) of the current year depreciation charge has been allocated to cost of sales, YTL
527.263 (2006: YTL 514.622) to general and administrative expenses (Note 37), YTL 116.335 (2006: YTL 116.335) to
research and development expenses (Note 37), YTL 26.923 (2006: YTL 12.801) to selling and distribution expenses and
YTL 118.481 (2006: YTL 395.013) to inventories.
The Group has no mortgage on its property, plant and equipment as of 31 December 2007 (2006: YTL 5.000.000)
(Note 31).
NOTE 20 - INTANGIBLE ASSETS
1 January 2007
Opening
Additions
Transfers
31 December 2007
Closing
3.288.659
704.130
52.890
(*) 6.356
3.288.659
763.376
(3.203.101)
(222.523)
-
(3.425.624)
Development costs
Rights- software
Less: Accumulated amortisation
789.688
Net book value
626.411
1 January 2006
Opening
Additions
Transfers
31 December 2006
Closing
3.288.659
650.699
37.340
(*) 16.091
3.288.659
704.130
(2.975.203)
(227.898)
-
(3.203.101)
Development costs
Rights- software
Less: Accumulated amortisation
Net book value
964.155
789.688
(*) See Note 19.
NOTE 21 - ADVANCES RECEIVED
Order advances received
33
31 December 2007
31 December 2006
268.533
227.046
268.533
227.046
NOTE 22 - PENSION PLANS
There are no pension plans other than the provision for employment termination benefits explained in Note 23 “Provisions”.
NOTE 23 - PROVISIONS
31 December 2007
31 December 2006
186.964
1.700
928.374
640
188.664
929.014
2.768.799
2.514.876
2.768.799
2.514.876
a) Short-term provisions:
Corporate tax provision (Note 41)
Other
b) Long-term provisions:
Provision for employment termination benefits
Provision for employment termination benefits has been calculated in accordance with explanations below.
Under the Turkish Labour Law, the Group is required to pay termination benefits to each employee who has completed
one year of service and whose employment is terminated without due cause, or who is called up for military service,
dies or retires after completing 25 years of service (20 years for women) and achieves the retirement age (58 for women
and 60 for men).
The amount payable consists of one month's salary limited to a maximum of YTL 2.030,19 for each year of service as
of 31 December 2007 (2006: YTL 1.857,44).
The liability is not funded, as there is no funding requirement. The provision has been calculated by estimating the
present value of the future probable obligation of the Group arising from the retirement of the employees.
The Communiqué requires actuarial valuation methods to be developed to estimate the enterprises' obligation under
defined benefit plans. Accordingly, the following actuarial assumptions were used in the calculation of the total liability.
Discount rate (%)
Turnover rate to estimate the probability of retirement (%)
2007
2006
5,71
98,4
5,71
98,3
The principal assumption is that the maximum liability for each year of service will increase in line with inflation. Thus,
the discount rate applied represents the expected real rate after adjusting for the anticipated effects of future inflation.
The maximum amount of YTL 2.087,92 which is effective from 1 January 2008 (1 January 2007: YTL 1.960,69) has
been taken into consideration in calculating the provision for employment termination benefits of the Group.
Movements of the provision for employment termination benefits during the year are as follows:
2007
2006
1 January
2.514.876
2.323.859
Paid during the year
Interest cost
Actuarial losses
Increase during the year
(458.100)
143.600
158.183
410.240
(477.840)
127.580
190.184
351.093
31 December
2.768.799
2.514.876
Total provision for employee termination benefit of YTL 712.023 (2006: YTL 668.857) has been allocated to cost of
sales amounting to YTL 471.605 (2006: YTL 481.769), to selling and distribution expenses amounting to YTL 25.061
(2006: YTL 29.670) and to general administrative expenses amounting to YTL 215.357 (2006: YTL 157.418) (Note 37).
NOTE 24 - MINORITY INTEREST
Movement of the minority interest during the year is as follows:
1 January
Current year profit/ (loss) attributable to minority interest
31 December
2007
2006
16.626.613
17.053.406
1.251.386
(426.793)
17.877.999
16.626.613
34
NOTE 25 - SHARE CAPITAL/ TREASURY SHARES
The composition of the Company's paid-in share capital at 31 December 2007 and 2006 was as follows:
Shareholder:
Hüseyin A. Kora
Cihat Kora
M. Reha Kora
A.Haluk Kora
Public quotation
Other
31 December 2007
Participation
(%)
Amount (YTL)
31 December 2006
Participation
(%)
Amount (YTL)
20
15
12
10
29
14
4.945.000
3.677.844
2.905.188
2.423.050
7.214.000
3.559.918
27
15
12
10
22
14
6.611.112
3.677.844
2.905.188
2.423.050
5.547.886
3.559.920
100
24.725.000
100
24.725.000
Inflation adjustment to share
capital (*) (Note 26)
26.909.044
26.909.044
Total paid-in share capital
51.634.044
51.634.044
(*) The amount includes inflation adjustment applied in accordance with article number 14 of CMB Serial:XI, Number:25
“Communiqué about Financial Reporting Methods during Hyperinflation Periods.”
The Company's authorised and issued capital consists of 24.725.000 (2006: 24.725.000) shares of
1 YTL each paid in full. The Company is not subject to the registered capital system.
NOTE 26 - 27 - 28 - CAPITAL RESERVES, PROFIT RESERVES, RETAINED EARNINGS
The retained earnings in statutory books other than the clause as mentioned below.
The legal reserves consist of first and second reserves, appropriated in accordance with the Turkish Commercial Code
(“TCC”). The TCC stipulates that the first legal reserve is appropriated out of statutory profits at the rate of 5% per
annum, until the total reserve reaches 20% of the company's paid-in capital. The second legal reserve is appropriated
at the rate of 10% per annum of all cash distributions in excess of 5% of the paid-in capital. Under the TCC, the legal
reserves can be used only to offset losses and are not available for any other usage unless they exceed 50% of paid-in
capital.
Publicly quoted companies are subject to dividend requirements regulated by the CMB as follows:
Applicable from 1 January 2006, net income computed in accordance with Communiqué XI/25 must be distributed in
the ratio of a minimum of 20% of total distributable profit (2006: 20%). Based on the decision of the General Assembly,
the distribution of a minimum of 20% of the distributable profit can be made as cash or as bonus shares or as a
combination of a certain percentage of cash and bonus shares.
In accordance with the above explanation, inflation adjustment to shareholders' equity as of 31 December 2007 and
2006 is as follows:
31 December 2007
Share capital
Legal reserves (*)
Extraordinary reserves (*)
Nominal values
Restated
values
Inflation adjustment
to shareholders' equity
24.725.000
10.086.704
3.591.813
51.634.044
17.666.914
7.697.403
26.909.044
7.580.210
4.105.590
38.403.517
76.998.361
38.594.844
31 December 2006
Share capital
Legal reserves (*)
Extraordinary reserves (*)
Nominal values
Restated
values
Inflation adjustment
of shareholders' equity
24.725.000
8.323.364
4.031.947
51.634.044
15.903.574
8.137.537
26.909.044
7.580.210
4.105.590
37.080.311
75.675.155
38.594.844
(*) Amounts have been calculated by taking into consideration the restated share capital of Alkim Alkali Kimya A.fi.
and the shares of the subsidiaries over the share owned by parent. Shares outside of the parent company are shown
under the “Minority interests” account
35
NOTE 29 - FOREIGN CURRENCY POSITION
The table below summarises the Group's exposure to foreign currency position risk as of periods ending 31 December
2007 and 2006. The carrying amounts of the Group's assets and liabilities denominated in foreign currencies are as
follows, categorised by currency:
31 December 2007
YTL
USD
Euro
Other
equivalent
Assets:
Trade receivables
125.303
6.882.277
69.148
1.958.919
1
-
264.198
11.365.931
11.630.129
Liabilities:
Short-term portion of
Leasing obligations
Trade payables
Long term financial liabilites
(9.096.228)
(485.001)
(3.377.644)
(3.992.500)
(107.709)
-
-
(10.594.376)
(564.882)
(4.118.145)
(4.650.065)
(19.927.468)
Net foreign currency liability position
(8.297.339)
31 December 2006
Assets:
Trade receivables
Due from related parties
USD
Euro
YTL
Other
equivalent
1.349.859
2.885.543
10.055
1.199.122
584.649
4.390
197
115
-
4.118.084
5.138.714
22.261
9.279.059
Liabilities:
Short term financial liabilites
Short-term portion of
Leasing obligations
Trade payables
Long-term financial liabilities
-
(1.140.398)
-
(2.111.446)
(9.623.809)
(645.090)
(2.945.246)
(4.409.539)
(179.163)
-
(3.402)
-
(13.527.226)
(906.738)
(5.485.117)
(6.198.048)
(28.228.575)
Net foreign currency liability position
(18.949.516)
NOTE 30 - GOVERNMENT GRANTS
None (2006: None).
NOTE 31 - PROVISIONS, CONTINGENT ASSETS AND CONTINGENT LIABILITIES
31 December 2007
31 December 2006
a) Guarantees received:
Guarantee letters
Bails
Guarantee notes
Guarantee cheques
4.231.726
2.000.000
1.010.254
429.452
5.993.014
2.000.000
783.966
812.612
7.671.432
9.589.592
7.261.682
-
7.931.298
5.000.000
7.261.682
12.931.298
b) Guarentees given:
Guarantee letters
Mortgages
36
c) Contingent assets:
As of 31 December 2006 , the Company's subsidiary Alkim Ka¤›t has engaged in a lawsuit against J and A International
Resources Inc. amounting to USD 124.786 related to quality problems in raw material purchased. Court does not come
to a conclusion as of reporting date.
d) Registered mining fields of the Group are as follows:
Place
Register No
Hectare
Duration
Licence
start
date
3260
2197
19
2355
1712
2188
1944
1945
283
1.111
5.483
6.383
1.031
1.307
1.048
1.944
60
60
60
30
30
30
30
30
07/08/1991
09/03/1987
03/06/1987
05/03/2004
05/03/2004
08/03/2004
05/03/2004
03/03/1987
2051
2047
2047
2034
2034
2034
2034
2017
3927
9.487
30
23/08/1993
2023
Licence No
Licence
end
date
i) Sodium Sulphate and Sodium Chlorine Fields:
Afyon - Dazk›r›
Konya - Cihanbeyli
Konya - Cihanbeyli
Afyon - Dinar
Afyon - Dazk›r›
Afyon - Dazk›r›
Afyon - Dazk›r›
Afyon - Dazk›r›
7.422
231
159
2.144
1.014
1.015
363
73
ii) Sodium Sulphate Fields:
Ankara - B. Pazar›
17.951
NOTE 32 - BUSINESS COMBINATIONS
None (2006: None).
NOTE 33 - SEGMENT REPORTING
The Group is organised mainly into three main business segments.
- Chemical products: Production and sales of Sodium Sulphate and derivatives
- Paper: Production and sales of paper products
- Other operation segment
Other operations of the Group mainly comprise insurance which is not significant enough to qualify as an individual
reportable segment.
Segment assets consist primarily of property, plant and equipment, intangible assets, inventories, receivables and
operating cash. They exclude deferred income tax assets. Segment liabilities comprise operating liabilities. They exclude
items such as bank borrowings, taxation on income and deferred income tax liabilities. Capital expenditure comprises
additions to property, plant and equipment and intangible assets.
The segment results for the year ended 31 December 2007 are as follows:
Chemical
products
Paper
Other
Unallocated
Group
Total gross segment sales
Inter-segment sales
52.127.543
(69.804)
90.397.791
(6.765)
111.770
(97.091)
-
142.637.104
(173.660)
Revenue (Note 36)
52.057.739
90.391.026
14.679
Operating profit/ (loss) segment result
15.282.141
Other incomes-net (Note 38)
1.344.097
Financial expense (Note 39)
(216.339)
Profit attributable to minority interest (Note 24)
8.521.311
4.768.604
(5.425.145)
(1.164)
35.909
(33.860)
142.463.444
19.337
-
Profit before taxation on income
Taxes on income (Note 41)
37
23.821.625
6.148.610
(5.675.344)
(1.251.386)
23.043.505
(3.244.131)
(1.569.263)
-
-
(4.813.394)
18.230.111
The segment results for the year ended 31 December 2006 are as follows:
Chemical
products
Paper
Other
Total gross segment sales
Inter-segment sales
45.337.158
(120.435)
74.082.673
(73.632)
100.839
(82.066)
- 119.520.670
(276.133)
Revenue (Note 36)
45.216.723
74.009.041
18.773
- 119.244.537
Operating profit/ (loss) segment result
14.574.952
Other incomes-net (Note 38)
2.359.494
Financial expense (Note 39)
(590.509)
Loss attributable to minority interest (Note 24)
1.832.223
4.378.041
(8.436.352)
(1.624)
59.925
(59.567)
Unallocated
19.492
-
Profit before taxation on income
Taxes on income (Note 41)
Group
16.425.043
6.797.460
(9.086.428)
426.793
14.562.868
(3.538.478)
145.677
-
-
(3.392.801)
11.170.067
The segment assets and liabilities at 31 December 2007 and capital expenditure for the year then ended are as follows:
Chemical Products
Assets
Deferred income tax assets (Note 14)
48.819.758
762.672
Paper
Other
Group
113.790.856
-
98.317
-
162.708.931
762.672
163.471.603
Liabilities
Bank borrowings and financial liabilities
Provision for taxes (Note 23)
Deferred income tax liabilites (Note 14)
5.812.959
186.964
-
7.091.593
15.809.323
1.542.974
495.005
-
13.399.557
15.809.323
186.964
1.542.974
30.938.818
Capital expenditures (Notes 19 and 20)
7.567.238
904.318
-
8.471.556
The segment assets and liabilities at 31 December 2006 and capital expenditure for the year then ended are as follows:
Chemical Products
Assets
Deferred income tax assets (Note 14)
49.158.367
706.104
Paper
Other
Group
112.490.772
26.289
71.512
-
161.720.651
732.393
162.453.044
Liabilities
Bank borrowings and financial liabilities
Provision for taxes (Note 23)
6.455.952
928.374
6.592.497
22.770.564
-
515.666
-
13.564.115
22.770.564
928.374
37.263.053
Capital expenditures (Notes 19 and 20)
12.730.336
1.867.742
-
14.598.078
NOTE 34 - SUBSEQUENT EVENTS
None.
NOTE 35 - DISCONTINUED OPERATIONS
None (2006: None).
38
NOTE 36 - OPERATING REVENUE
The breakdown of sales income for the periods then ended 31 December is as follows.
123.173.032
19.810.420
44.656
108.673.926
10.951.710
52.842
143.028.108
119.678.478
(507.303)
(57.361)
(267.814)
(166.127)
142.463.444
119.244.537
Cost of sales
(104.258.100)
(88.136.734)
Gross Profit
38.205.344
31.107.803
116.335
75.684
5.464
116.335
66.561
32.824
197.483
215.720
5.361.240
974.907
753.080
325.286
256.241
559.649
5.435.794
905.756
854.194
270.850
335.218
502.829
8.230.403
8.304.641
3.511.106
838.918
527.263
180.050
167.828
215.357
515.311
3.667.675
869.658
514.622
164.732
191.091
157.418
597.203
5.955.833
6.162.399
14.383.719
14.682.760
Domestic sales
Export sales
Other sales
Less: Discounts
Less: Returns
Net Sales
NOTE 37 - OPERATING EXPENSES
Research and Development Expenses:
Depreciation and amortisation
Staff cost
Other
Selling and Distribution Expenses:
Transportation
Staff cost
Outsourced benefits
Commission expenses
Advertisement
Other
General Administrative Expenses:
Staff cost
Outsourced benefits
Depreciation and amortization
Taxes and funds (other than taxes on income)
Travel
Emloyment termination benefits
Other
Total operating expenses
39
NOTE 38 - OTHER INCOME/EXPENSES AND PROFITS/ LOSSES
Other operating income:
Foreign exchange gain
“Rödavans” income
Interest income
Interest income on credit sales
Income from overdue charges
Compansation income from insurance companies
Gain on sales of property, plant and equipment
Other
Other expenses:
Tax penalty
Cost of scrap sales
Loss from sales of property, plant and equipment
Indemnity expense
Other
Other operating income - net
3.604.820
824.357
629.760
482.197
388.811
321.746
475.063
5.518.503
733.829
467.853
314.866
222.571
343.850
312.075
411.290
6.726.754
8.324.837
(154.455)
(152.258)
(115.196)
(156.235)
(358.244)
(69.191)
(556.303)
(449.770)
(93.869)
(578.144)
(1.527.377)
6.148.610
6.797.460
4.007.155
1.046.729
487.377
134.083
6.818.847
1.362.886
562.158
342.537
NOTE 39 - FINANCIAL EXPENSES
Foreign exchange loss
Interest expense
Interest expense on credit purchases
Bank commission expense
5.675.344
9.086.428
NOTE 40 - GAIN/ LOSS ON NET MONETARY POSITION
None (2006: None).
NOTE 41 - TAXES ON INCOME
1 January 1 January 31 December 2007 31 December 2006
Current corporation tax expense
Less: Prepaid taxes
Corporate tax provision
Current corporation tax expense
Deferred tax (expense)/ income (Note 14)
Taxes on income
3.300.699
(3.113.735)
186.964
(3.300.699)
(1.512.695)
(4.813.394)
3.393.139
(2.464.765)
928.374
(3.393.139)
338
(3.392.801)
40
In Corporate Tax Law, there has been settled a number of exemptions for companies, of which the Group may benefit
are explained as follows:
Corporation tax is payable at a rate of 20% for 2007 (2006: 20%) on the total income of the Group after adjusting
for certain disallowable expenses, exempt income and investment and other allowances. No further tax is payable unless
the profit is distributed.
Dividends paid to non-resident corporations having a place of business in Turkey or resident corporations are not subject
to withholding tax. Otherwise, dividends paid are subject to withholding tax at the rate of 10%. Addition of profit to
capital is not considered as a profit distribution.
In accordance with Tax Law No. 5479 “Law Related to Changes in Income Tax Law, Law for Collection of Public
Revenue, Special Consumption Tax Law and Tax Procedural Law” that was published in the Official Gazette on 8 April
2006, income and corporate taxpayers that could not offset their investment incentive allowances against 2005 taxable
income, can offset their existing investment incentive allowances at 31 December 2005 against taxable income of the
years 2006, 2007 and 2008. In addition to this, the capital expenditures after 1 January 2006 related to the investments
that begin prior to 1 January 2006 within the scope of repealed 19th article of Income Tax Law No. 193 and the capital
expenditures related to the investment certificates granted prior to 24 April 2003, can also be offset against taxable
income of the years 2006, 2007 and 2008. In this respect, since the Group's subsidiary Alkim Ka¤›t Sanayi ve Ticaret
A.fi. has prefered to offset its unused investment tax credits at 31 December 2005 against taxable income of the years
2007 and 2008, the corporate tax of Alkim Ka¤›t is payable at a rate of 30% for the income generated in 2007 (2006:
30%). Corporation tax is payable at a rate of 20% (2006: 20%) on the total income of the Company.
Under the Turkish taxation system, tax losses can be carried forward to be offset against future taxable income for
up to 5 years. However, Tax losses cannot be carried back to offset profits from previous periods.
In Turkey, there is no procedure for a final and definitive agreement on tax assessments. Companies file their tax returns
within the 25th of the fourth month following the close of the financial year to which they relate. Tax returns are open
for 5 years from the beginning of the year that follows the date of filing during which time the tax authorities have
the right to audit tax returns, and the related accounting records on which they are based, and may issue re-assessments
based on their findings.
Transfer pricing
Turkish Corporate Income Tax Law numbered 5520 Article 13 concerning transfer pricing regulations has become
effective on 1 January 2007. With Article 13 of the mentioned law, considerable amendments have been made to
transfer pricing regulations by taking OECD transfer pricing guidelines as a basis. In this respect, companies should
enter into transactions regarding the sale or purchase of goods and services with related parties, where the prices are
set in accordance with the arm's length principle. Arm's length principle states that determination of price for sale or
purchase of goods and services with related parties should be consistent with the price determined for the transactions
with tird parties. In the determination of the transfer pricing method, companies are required to refer to the related
law and apply the most applicable method considering the nature of the transactions. Documentation requirements
are obligated for the companies in order to support the methods to be applied in the determination of the arm's length
price. Moreover, the companies are obliged to prepare reports regarding the related party transactions realized within
the accounting period; including detailed informational and paper file documentations
In case of transactions regarding the sale or purchase of goods and services with related parties, where the prices are
not set in accordance with the arm's length principle, then related profits are considered to be distributed in a disguised
manner through transfer pricing. The profit distributed in a disguised manner through transfer pricing will be reclassified
as dividends distributed and necessary adjustments to taxes will be assessed at the party receiving the deemed dividends.
In order to make adjustments in this respect, the taxes assessed in the name of the company distributing dividends in
a disguised manner must be finalized and paid. It should be ensured that the original tax assessment on behalf of the
entity has been finalized and that the taxes have already been paid.
After the enactment of the Transfer Pricing article effective from 1 January 2007; in order to clarify the applications,
General Communique on Disguised Profit Distribution through Transfer Pricing (Serial no:1) has been published on 18
November 2007 by Ministry of Finance
41
Reconciliation of the taxation on income is as follows:
Profit before tax
23.043.505
14.562.868
Tax expense calculated on profit before tax
Expenses not deductible for tax purposes
Income not subject to tax
Tax effect of unused investment tax credits
Temporary differences not subject to deferred tax calculation
Other
(4.608.701)
(310.314)
181.854
31.116
(107.349)
(2.912.574)
(285.898)
89.595
(278.699)
(157.280)
152.055
Taxes on income
(4.813.394)
(3.392.801)
NOTE 42 - EARNINGS PER SHARE
Earnings per share stated in the income statement is calculated by dividing the net income to weighted average number
of shares in the current period.
In Turkey, companies can increase their share capital by making a pro-rata distribution of shares ("bonus shares") to
existing shareholders from retained earnings. For the purpose of earnings per share computations, the weighted average
number of shares outstanding during the year has been adjusted in respect of bonus shares issues without a corresponding
change in resources, by giving them retroactive effect for the year in which they were issued and for each earlier year.
In order to ensure the distribution of profit; it is required to allocate reserve over the statutory records, in accordance
with the arrangements of Turkish Commercial Code. Net distributable profit calculated through financial statements
adjusted in accordance with Communiqué should be distributed if it would be covered by statutory distributable profit;
otherwise total amount calculated through statutory financial statements will be subject to distribution of profit.
1 January 1 January 31 December 2007 31 December 2006
A
18.230.111
11.170.067
Weighted average number of the shares
B
24.725.000
24.725.000
A/B
0,7373
0,4518
Earnings per share
For the period ended 31 December 2007, YTL 0,7373 net profit per share with a face value of YTL 1 has been calculated.
As of the date of preparation of these financial statements, the Board of Directors of the Company has not prepared
the proposal for the profit distribution to be presented to the General Assembly.
D‹PNOT 43 - CONSOLIDATED CASH FLOW STATEMENTS
Cash flow statements have been presented within the financial statements (please refer to page 5)
NOTE 44 - OTHER MATTERS THAT MAY HAVE A MATERIAL EFFECT ON, OR BE EXPLAINED
FOR THE CLEAR UNDERSTANDING OF THE CONSOLIDATED FINANCIAL STATEMENTS
None.
NOTE 45 - EXPLANATION ADDED FOR CONVENIENCE TRANSLATION INTO ENGLISH
As of 31December 2007, the accounting principles described in Note 2 (defined as 'Communiqué') to the financial
statements differ from International Financial Reporting Standards (''IFRS'') issued by the International Accounting
Standards Board with respect to the application of inflation accounting and presentation of the basic financial statements
and the notes to them. Accordingly, the financial statements are not intended to present the financial position and
results of operations in accordance with IFRS.
42
TABLE OF THE PROFIT DISTRIBUTED BY ALK‹M ALKAL‹ K‹MYA A.fi
DURING THE YEAR 2007 (in YTL)
1. Paid up /Issued Capital :
24,725,000.00
2. Total Legal Reserves (as per legal records) :
3,578,904.32
Whether any precedence has been granted for distribution of profits as per the Articles of association: None
As per the Capital Market Board
Profit for the Period
23,043,505.00
Taxes Payable (-)
4,813,394.00
Net Profit for the Period (=)
18,230,111.00
Accumulated Losses (-)
Legal Reserves of First Class (-)
666,511.32
Amount of Distributable Profits of the Subsidiaries
covered under the Consolidation(-)
4,983,251.00
9. NET DISTRIBUTABLE PROFIT FOR THE PERIOD (=)
12,580,348.68
10. Donations granted during the year (+)
50,604.60
11. Net distributable profit for the period with the donations added,
on which the first dividends are to be calculated.
12,630,953.28
12. First dividends to shareholders
Cash
13. Dividends distributed to holders of preference shares
14. Dividends to members of the board of directors, employees, and etc.
125,803.49
15. Dividends to holders of redeemed shares
16. Second dividends to shareholders
2,505,948.34
17. Legal Reserves of Second Class
392,169.25
18. Statutory Reserves
19. Special Reserves
20. EXTRAORDINARY RESERVES
12,013,487.95
21. Other resources to be distributed
Profit of the Previous Year
Extraordinary Reserves
3.
4.
5.
6.
7.
8.
As per Legal Records (LR)
16,630,925.79
3,300,699.33
13,330,226.46
666,511.32
12,663,715.14
2,526,190.66
7,113,603.41
DETAILS OF PERCENTAGES OF PROFIT SHARES DISTRIBUTED
(1) DETAILS OF DIVIDENDS PER SHARE
TOTAL AMOUNT OF DIVIDENDS
GROSS
NET
11.276.190,66
9.584.762,06
DIVIDENDS PAYABLE PER ORDINARY
SHARE WITH A PAR VALUE OF YTL 1
AMOUNT (in YTL)
0,45606
0,38765
PERCENTAGE (in %)
45,606
38,765
RATIO OF PROFIT SHARES DISTRIBUTED TO THE DISTRIBUTABLE PROFIT FOR THE PERIOD WITH DONATIONS ADDED
AMOUNT OF PROFIT SHARES DISTRIBUTED TO
SHAREHOLDERS (in YTL)
11.276.190,66
43
RATIO OF PROFIT SHARES DISTRIBUTED TO SHAREHOLDERS TO
THE DISTRIBUTABLE PROFIT FOR THE PERIOD WITH DONATIONS ADDED
89,274
BASIC RATIOS BASED ON THE DATA CONTAINED IN THE CONSOLIDATED FINANCIAL STATEMENTS OF
ALK‹M ALKAL‹ K‹MYA A.fi
1-LIQUIDITY RATIOS
a) Current Ratio
b) Liquidity Ratio
c) Cash Ratio
2006
2.16
1.28
0.27
2007
2.83
1.77
0.45
2-OPERATING RATIOS
a) Assets Turnover
b) Receivables Turnover
c) Days Accounts Receivable ( in days )
d) Stock Turnover
2006
0.73
4.95
74
3.62
2007
0.87
5.60
65
4.58
3- FINANCIAL STANCE RATIOS
a) Total Liability / Equity
b) Total Liabilities / Assets with Added
c) Total Long Term Liabilities /Assets
d) Tangible Fixed Assets / Equity
2006
0.34
0.17
0.06
0.94
2007
0.27
0.13
0.06
0.88
4- PROFITABILITY RATIOS
a) Total Net Profit for the Period /Assets
b) Net Profit for the Period / Equity
c) Gross Profit Margin
2006
0.07
0.10
0.26
2007
0.11
0.16
0.27
2006
24,725,000
4.82
0.54
0.54
2007
24,725,000
5.76
0.74
0.74
0.48
0.48
0.20
0.20
4.391
4.637
2006
0.56
0.41
2007
0.45
0.63
5- DETAILS PER SHARE
a) Number of Shares
b) Net Sales per Share
c) Net Profit per Share ( in YTL )
- Ordinary Shares
-Preference Shares
d) Dividends per Share
- Ordinary Shares
-Preference Shares
e) Book Value per Share ( in YTL )
6-GROWTH RATIOS ( % )
a) Basic Operating Profit
b) Net Profit
44
Baflaran Nas Ba¤›ms›z Denetim
ve Serbest Muhasebeci
Mali Müflavirlik A.fi.
a member of
PricewaterhouseCoopers
BJK Plaza, Süleyman Seba Caddesi
No:48 B Blok Kat 9 Akaretler
Befliktafl 34357 ‹stanbul-Turkey
www.pwc.com/tr
Telephone +90 (212) 326 6060
Facsimile +90 (212) 326 6050
INDEPENDENT AUDITOR'S REPORT
(Translation for the Company's convenience - the Turkish text is authoritative)
To the Board of Directors of
Alkim Alkali Kimya A.fi.
1. We have audited the accompanying consolidated financial statements of Alkim Alkali Kimya A.fi. and its subsidiaries
(together, the “Group”) which comprise the consolidated balance sheet as of 31 December 2007 and the consolidated
income statement, consolidated statement of changes in equity and consolidated cash flow statement for the year
then ended and a summary of significant accounting policies and other explanatory notes.
Group Management's responsibility for the financial statements
2. Management is responsible for the preparation and fair presentation of these consolidated financial statements that have
been prepared in accordance with financial reporting standards published by the Turkish Capital Market Board. This
responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair
presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error;
selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the
circumstances.
Group Auditor's responsibility
3. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted
our audit in accordance with generally accepted auditing principles issued by Turkish Capital Market Board. Those principles
require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether
the consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated
financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks
of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial
statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as
well as evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
4. In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial
position of Alkim Alkali Kimya A.fi. as of 31 December 2007, and of its consolidated financial performance and its cash
flows for the year then ended in financial reporting standards published by Turkish Capital Market Board.
Additional paragraph for convenience translation into English
5
As of 31 December 2007, the accounting principles described in Note 2 (defined as 'Communiqué Regarding Accounting
Standards in Capital Markets') to the accompanying consolidated financial statements differ from International Financial
Reporting Standards (''IFRS'') issued by the International Accounting Standards Board with respect to the application of
inflation accounting and presentation of the basic financial statements and the notes to them. Accordingly, the accompanying
consolidated financial statements are not intended to present the financial position and results of operations in accordance
with IFRS.
Baflaran Nas Ba¤›ms›z Denetim ve
Serbest Muhasebeci Mali Müflavirlik A.fi.
a member of
PricewaterhouseCoopers
ORIGINAL COPY ISSUED AND SIGNED IN TURKISH
Murat Sancar, SMMM
Partner
Istanbul, 6 March 2008
45
M.YÜKSEL KADIO⁄LU
Chartered Accountant
Mecidiye Mah. Cevat Pafla Sok. No: 12
Kofluyolu/Kad›köy - ‹STANBUL
Tel.: (0216)546 11 46 (Pbx)
Fax: (0216)546 09 26
REPORT OF AUDIT ON
ALK‹M ALKAL‹ K‹MYA A.fi.
Of the company audited
Trade Title
Head Office
Capital
Operations
Name, Surname, and Term in Office of the Auditor;
and whether he is a partner or employee of the Company
Number of meetings of the board of directors attended
Scope of the audits conducted on
corporate accounts, books and documents;
and date and conclusions of the audit
Number of counts conducted at the corporate
cash-desk office, and conclusions thereof pursuant to
the Article 353(1)(3) of Turkish Commercial Code
Dates and conclusions of inspections conducted pursuant to
the Article 353(1)(4) of Turkish Commercial Code
Complaints and fraudulent acts reported;
and legal actions initiated against them
:
:
:
:
Alkim Alkali Kimya A.fi
‹nönü Cad. No:13 Gümüflsuyu, Taksim/‹STANBUL
YTL 24.725.000 ( TL 24.725.000.000.000 )
Production of Sodium Sulphate
: M.Yüksel KADIO⁄LU ( 1 year in office )
The auditor is not a partner or employee of the Company
: 6 meetings of the board of directors were attended
: Revisions were carried out at the end of 3rd, 6th, 9th, and 12th
months pursuant to the tax regulations and trade laws;
and no facts were determined which deserve any criticism.
: Three counts were performed at the cash-desk office;
and it was found that available assets match the records.
: Inspections carried out on the last business day of each month
revealed that actual letters of guarantee as well as negotiable
papers match the books and records
: No complaint were reported
We have conducted an audit on the accounts and transactions of ALK‹M ALKAL‹ K‹MYA A.fi for the period of 01.01.2007 to
31.12.2007 in accordance with the applicable provisions of the Turkish Commercial Code, the Articles of Association of the
Company, other pertinent regulations as well as the generally accepted accounting methods and principles.
The balance sheet dated 31.12.2007 attached hereto having a content accepted by the auditor reflects the actual financial stance
of the company as of the said date; and the income statement covering the period of 01.01.2007 to 31.12.2007 reflects the actual
operating results of the period in question.
As can be seen from a review of the balance sheet and the income statement attached hereto, the company has derived a
commercial profit of YTL 16.630.925,79 before tax from the operations conducted within the period of 01.01.2007 to 31.12.2007.
We hereby submit to the opinion of the General Assembly for approval of the said balance sheet and income statement, and for
release of the board of directors from its respective liabilities.
(Signed)
M.Yüksel KADIO⁄LU
Auditor
46
REPORT ON COMPLIANCE TO THE CORPORATE MANAGEMENT PRINCIPLES
1. STATEMENT ON COMPLIANCE TO THE CORPORATE MANAGEMENT PRINCIPLES
Our company has paid a due diligence to the implementation of the Corporate Management Principles as announced
by the Capital Market Board. Below are the explanations about aspects of the said implementation.
SECTION 1 - SHAREHOLDERS
2. Shareholder Relations Unit
A shareholder relations unit was established by our company for the purpose of managing relations with shareholders;
answering questions in a timely and appropriate manner; administering investor relations; and providing information
to a large number of investors.
Director of the Unit
: Z. Banu Gökçen - [email protected]
Personnel of the Unit : Bekir Akyol
- [email protected]
Phone Number
: + 90 212 292 22 66
3. Use by Shareholders of the Right to Information
Our shareholders and investors are kept informed by our shareholder relations unit by means of the Special Event
Statements as adopted by the Istanbul Stock Exchange. Furthermore, all questions regarding the company ( i.e.
investments, turnover figures, capital increases, dividend payments, and etc. ) are answered by the same unit unless
such questions involve disclosure of trade secrets. Our corporate website (www.alkim.com) contains all useful
information available to both shareholders and the public.
4. Details of General Assembly Meetings
Pursuant to the Capital Market Law, annual activity reports, financial statements, proposals for distribution of profits,
agenda of general assembly meetings, proxy forms, and other documentation required in connection with agenda
items are submitted to all shareholders who make a request, and the same are also announced via at least two
national newspapers as well as via our website before general assembly meetings.
Questions asked by all shareholders present at a general assembly meeting are answered on e by one pursuant to
the principle of equality. Minutes of meeting are notified to the Istanbul Stock Exchange, and published via our
website upon completion of a general assembly meeting. Shareholders are entitled to vote by proxy at general
assembly meetings. All kinds of resolutions concerning modifications to the Articles of Association of the Company
are adopted at general assembly meetings.
The Articles of Association of the Company contains no provision which stipulates that resolutions regarding splits,
or sale, purchase, or rent of corporate assets have to be adopted at general assembly meetings.
5. Voting Rights and Minority Rights
As put in Article 14 ( 'General Assembly Meetings' ) of our Articles of Association, holders of shares classified as
A, B, C, and D are entitled to 100 votes per share, whereas holders of shares classified as E are entitled to 1 vote
per share. Article 9 of our Articles of Association stipulates that members of the board of directors are elected from
among candidates nominated by shareholders of the Groups A, B, C, and D. Our Articles of Association can be
found at our website. No cumulative voting is allowed.
6. Corporate Policy on, and Timing of Distribution of Profits
Our company realizes distribution of profits within the legally allowed periods of time in accordance with the
applicable provisions of the Turkish Commercial Code as well as the regulations adopted by the Capital Market
Board. Each shareholder is entitled to receive a share from profits in proportional to his/her shareholding in the
company. No concession has been allowed so far which might be enjoyed in connection of distribution of profits.
Amount of profits to be distributed are fixed at general assembly meetings depending upon the status of liquidity
of as well as the investments to be made by the Company.
7. Transfer of Shares
Article 20 of our Articles of Association contains the provisions which govern transfers and sales of registered shares.
SECTION II - PUBLIC DISCLOSURES AND TRANSPARENCY
8. Policy on Corporate Disclosures
Our company discloses such facts which are required to be disclosed to the public in connection with its activities
and operations in a timely manner via Special Event Statements pursuant to the applicable laws and regulations.
Furthermore, it is the duty of our shareholder relations units to supervise all the issues regarding public disclosures,
and answer the questions which are asked to our company. All kinds of questions asked in writing or orally throughout
a year are answered by this unit, and all the pertinent details are disclosed to relevant parties.
Mr. Nihat Erkan, the general manager, and Ms. Z. Banu Gökçen, director of the shareholder relations unit, are
responsible for implementation of our policy on public disclosures.
47
9. Special Event Statements
8 Special Event Statements were delivered in the year 2007. No additional explanation was requested by the Capital
Market Board or by the Istanbul Stock Exchange in respect of said Special Event Statements.
10. Corporate Website and its Content
Corporate website of Alkim can be accessed at www.alkim.com. Necessary arrangements have been carried out in
respect of our corporate website in accordance with the Corporate Management Principles; and the requirements
listed in the Resolution No. 48/1588 passed by the Capital Market Board on 10.12.2004 have been fulfilled.
Our website contains:
• trade registration details
• most recent shareholding structure
• most recent members of the board of directors
• most recent form of the Articles of Association
• activity reports for the last two years
• special event statements
• reports on compliance to the Corporate Management Principles
• list of attendants and minutes of the general assembly meetings held during the last two years
• proxy form for voting purposes
• periodical financial statements and independent audit reports
• prospectus and circulars on public offerings ( containing the information for the year 1999 )
• agenda items of general assembly meetings
11. Details of Dominant Shareholder(s)
Dominant shareholders of our company are disclosed by our company upon request.
12. Public disclosures on Individuals who can access insider information
Alkim Alkali Kimya Anonim flirketi tries to take all the measures which are required to comply with the legal
arrangements regarding prevention of insider trading. For this purpose, the chairman and members of the board
of directors, auditors, and all the other members of the staff are prohibited use any insider information, which might
be obtained directly or indirectly in the course of fulfillment of their tasks and duties, for the benefit of themselves
or third parties.
SECTION III - STAKEHOLDERS
13. Disclosures to Stakeholders
Shareholders
In accordance with the Article 8 'Corporate Policy on Disclosures', shareholders are kept informed about relevant
matters by means of legal notifications as well as our website.
Customers
Necessary disclosures are made in respect of corporate matters which are also of interest for customers. Furthermore,
our website contains all the information and news about our company.
Staff
All the arrangements involving our staff members are conducted in accordance with the labor law as well as other
applicable regulations. Activities regarding recruitment, promotion, and dismissal of staff members are carried out
by our HR division.
14. Stakeholders' Participation in Management
Our company has not adopted any special model for participation of stakeholders in corporate management. Rights
of our stakeholders are protected by the applicable regulations.
15. HR Policy
Our HR policy is to improve productivity of our employees in accordance with the corporate objectives and strategies;
and to employ training tools and similar HR tools in connection with assessment of performance of our employees.
A highly motivated and successful team is the result of the combination of the sapient and experienced management
staff of our company having existence for over 50 years with a personnel staff who attach importance to his career
to be pursued in our company, and working in harmonization with the discipline, human relations, and a prestigious
working environment. We have a HR unit which is directed by Mr. Bülent Eser.
48
16. Details of Customers and Suppliers
Our main field of operation is to produce sodium sulphate. In respect of production of sodium sulphate which is
one of the main raw materials of several sectors such as detergents, glass, cellulose, textile paints, and etc., Alkim
is known in our country, in neighbor countries, in Europe ( due to being the sixth largest producer of the world ),
and even in the word since the company has been involved in the sector for over 50 years. We have been maintaining
relations for many years with both technical and supplier staff and directors acting in said sectors and top level
managements of the sectoral companies. Customer relations are also sustained with other chemical companies
which, like Alkim, produce raw materials for fundamental sectors since publications of international chemical sector
contain news and comments about operations and activities of our company.
17. Social Responsibility
Our company produces sodium sulphate and salt from natural resources. Pursuant to our sensitivity in this respect,
we act in strict compliance to all the applicable laws and regulations regarding environment as well as health and
safety of our employees. It is proven that Alkim goes beyond the current practices in Turkey regarding environmental
standards since certain bird species, which are rare in our country, have begun living and reproducing in the region
of Ac›göl ( Afyon ) where our largest facilities are located; an increase has been observed in number of the most
sensitive animal species such as flamingos and etc. which started living in these region; and all these facts have been
broadcasted by scientific and reputed TV programs.
Our approach to social responsibility requires us to reflect to people such a respect which is higher than that paid
to the environment. In this regard, Alkim has constructed and equipped 5 primary schools with 18 classrooms, 2
healthcare centers, 4 libraries, 2 parks for children, and 1 center for conferences and performance arts in the regions
where the company has facilities, and delivered property thereof to the public. Alkim also assumes annual general
repair and maintenance works of these facilities. All these efforts have not been reflected to the media for advertising
purposes since they were initiated purely based on an awareness of our social responsibility.
SECTION IV - BOARD OF DIRECTORS
18. Organization of
M.Reha KORA
A. Haluk KORA
Ferit KORA
Hüseyin A. KORA
Mithat KORA
Özay KORA
Tülay ÖNEL
Hüseyin ÜNER
Nihat ERKAN
the Board of Directors, and Independent Members
- Chairman of the Board of Directors
- Deputy Chairman of the Board of Directors
- Deputy Chairman of the Board of Directors
- Member of the Board of Directors
- Member of the Board of Directors & General Manager
Mr. Nihat Erkan is the general manager as well as a member of the board of directors of the Company. The General
Manager and Manager of the Financial Affairs Division hold executive positions in the Company. There is no
independent member at the board of directors. Members of the board of directors may hold positions outside the
company without any restriction, and no rules have been adopted in this respect.
19. Qualifications of the Members of the Board of Directors
Minimum qualifications required for holding a membership position at the board of directors match those qualifications
specified in the Corporate Management Principles as adopted by the Capital Market Board. Principles applicable
in this regard are not contained in the Articles of Association because a due diligence is paid to the election of
members of the board of directors in accordance with the principles.
20. Mission, Vision, and Strategic Objectives of the Company
The fundamental objective of Alkim is to carry out production activities at its sodium sulphate and salt mining fields
at the maximum productivity, and sell these products in our country as well as in all over the world, especially our
near neighbors. Being the sixth largest global producer of sodium sulphate as of the end of 2007, we are making
efforts to maintain and improve the said position of our company. Strategic objectives are identified by the general
manager as well as his assistants, and submitted to the board of directors for approval purposes. Levels of realization
achieved as to the approved objectives are reported to the board of directors on monthly basis, and these levels
are evaluated appropriately.
21. Risk Management and Internal Control Mechanism
The Corporate Risk Management and Internal Control Mechanism is fulfilled by a committee of auditors which is
comprised of members of the board of directors. This committee has authorized the Audit Group to supervise
establishment of an internal control mechanism, and inspect functionality thereof. The Audit Group conducts
periodical audits on the internal control mechanism pursuant to the approved annual audit plans, and reports its
opinions to the top management. The committee of auditors reviews said facts and comments, and make proposals
to the board of directors. This Committee and the Board of Directors notify corporate directors of necessary measures
via the general manager.
49
22. Authorities and Responsibilities of Members of the Board of Directors as well as Corporate Directors
Authorities and responsibilities of members of the board of directors as well as corporate directors are detailed in
Articles 8, 9, 10 & 11 of the Articles of Association of the Company.
23. Principles of Operation for the Board of Directors
Principles of Operation for the Board of Directors are detailed in article 10 of the Articles of Association of the Company.
The Board of Directors held 16 meetings in the fiscal year of 2007. The Board of Directors passes its resolutions through
majority of votes cast by its members. Almost all the resolutions have been adopted unanimously so far. No member
of the board of directors has any weighted voting right or any negative right to veto.
24. No Deal or Competition with the Company
This matter is discussed as an agenda item at the general assembly meeting of our company. The General Assembly
has authorized the board of directors so far to conduct in accordance with the Articles 334 and 335 of the Turkish
Commercial Code.
25. Code of Conduct
The Code of Conduct which is binding on all employees has been adopted through the course of over 50 years of
operations of Alkim. This code of conduct conforms to the operating principles of Alkim, national laws, international
practices, and general principles of honesty and reliability. Apart from this general perspective, all the employees of
Alkim is obliged to honor the following rules:
- to consider national benefits in all operations, and to adopt a national awareness since we operate natural resources
of our country, and are involved in this field;
- to protect nature and environment;
- to attach the primary importance to quality; and
- to attach the primary importance to teamwork as a corporation
Compliance to the code of conduct is supervised by superiors of employees within an hierarchical structure.
In case of identification of any behavior that is contrary to the code of conduct, necessary formalities are fulfilled by the
relevant division chief, unit manager, assistant general manager, and the general manager in sequential fashion starting
from the immediate manager in accordance with the corporate bylaws on human resources and personnel staff.
26. Number, Structures, and Independency of Committees established within the Board of Directors
The audit committee of our company was established within the legal period of time, and fulfills such tasks and duties
as designated in respective communiqués of the Capital Market Board. Members of this committee are Mr. Özay Kora
and Mr. A. Haluk Kora, both also being members of the board of directors.
27. Financial Rights granted to the Board of Directors
Members of the board of directors receive a fixed monthly remuneration. This monthly remuneration was YTL 1.000
for the fiscal year of 2007. No loans or credits were granted to, nor were any securities issued in favor of any member
of the board of directors or managers of the company.
50
ENVIRONMENT
Rare bird species live and reproduce in the regions where Konya - Cihanbeyli - Bolluk and Afyon - Dazk›r› - Ac›göl
plants of Alkim are located, and these regions have a beautiful natural structure, and these facts indicate the
remarkable awareness by our company of environmental standards.
Alkim holds a pioneering position both in Turkey and in the world as to awareness of environment friendly production
operations, and has never discharged any hazardous wastes into environment. This is best revealed by the
environmental awards which have been granted to our company on regional basis for many years. As known, the
flamingos seen in the photograph are one of the most sensitive living creatures, and they always stop off at the
lakes where we operate. In summary, environmental awareness of Alkim is far beyond the current practices in
Turkey.
This Annual Report is Printed on 170 gr Alkim Coated Paper

ALK‹M ALKAL‹ K‹MYA ANON‹M fi‹RKET‹

Transkript

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Dear Shareholders, Welcome to our General Assembly Meeting

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Değerli Öğretmen Dostlarımız, Sevgili Öğrenciler, ELS Yayıncılık

2Q Number 3

boyner büyük mağazacilik anoni̇m şi̇rketi̇ minutes of the annual

şi̇ftrap 150 ml şi̇fa ki̇mya i̇laç koz. san. ti̇c. a.ş

Title in English in Uppercase and Lowercase Letters, Centered, Bold